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CERCLA Liability for Air Emissions? Ninth Circuit to Hear Appeal of District Court Decision That Could Expand Superfund Statute’s Reach

April 19, 2015

On December 31, 2014, the United States District Court for the Eastern District of Washington issued an order that has potential significantly to expand the reach of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).[1] In Pakootas v. Teck Cominco Metals, Ltd.,[2] the court held that direct air emissions that eventually settle on land or water can support CERCLA “arranger” liability. The Washington district court appears to be the first to have taken up this important question, but it will not be the last: on March 25, 2015, the Ninth Circuit granted Teck Cominco Metals’ (Teck) petition for permission to appeal.

The district court’s order raises a number of issues: it appears to be in tension with a recent Ninth Circuit decision interpreting identical language in the Resource Conservation and Recovery Act (RCRA)[3] not to support liability for air emissions; it fits awkwardly with Supreme Court precedent that CERCLA liability may only be imposed on parties who intentionally dispose of hazardous substances; and it could tie emitters to faraway CERCLA sites, greatly complicating resolution of CERCLA cases and imposing liability on unsuspecting emitters.

Background

Teck, a Canadian mining company, operates a smelter situated along the Columbia River approximately ten miles north of the United States border in Trail, British Columbia. Teck concedes that it discharged nearly 10 million tons of slag and other effluent containing hazardous substances directly into the Columbia from the early 1900s to 2005.[4] Owing to the hydrology of the Columbia, virtually all of this material travelled downstream and into the United States where it eventually settled in and around Lake Roosevelt in what has come to be known as the Upper Columbia River (UCR) Site.[5]

CERCLA provides strict liability for certain classes of persons, including those who “arranged for disposal … of hazardous substances” at a “facility” at which there has been an actual or threatened “release” of hazardous substances. [6] The last decade and a half has seen a number of orders, negotiations, agreements, citizen suits and court decisions with regard to releases at the UCR Site, a CERCLA “facility.”

Of particular relevance is the Ninth Circuit’s 2006 decision in Pakootas v. Teck Cominco Metals, Ltd.[7] In that case, Teck had argued that to hold it liable under CERCLA for releases made in Canada would be an impermissible extraterritorial application of that act. The district court assumed that “[t]o find there is not an extraterritorial application of CERCLA in this case would require reliance on a legal fiction that the ‘releases’ of hazardous substances into the Upper Columbia River Site and Lake Roosevelt are wholly separable from the discharge of those substances into the Columbia River at the Trail Smelter.”[8] The Ninth Circuit, however, was willing to view Teck’s discharges as combinations of distinct events:

[S]everal events could potentially be characterized as releases. First, there is the discharge of waste from the Trail Smelter into the Columbia River in Canada. Second, there is the discharge or escape of the slag from Canada when the Columbia River enters the United States. And third, there is the leaching of heavy metals and other hazardous substances from the slag into the environment at the Site. Although each of these events can be characterized as a release, CERCLA liability does not attach unless the “release” is from a CERCLA facility.[9]

The Ninth Circuit ultimately embraced what the court below had labeled a legal fiction, holding that the “release” of hazardous substances took place not when Teck discharged slag and effluent into the Columbia in Canada, but when, after settling in the UCR Site, these hazardous substances leached into the environment.[10] Viewing Teck’s discharges as wholly separate from releases at the UCR Site allowed the Ninth Circuit to avoid a potentially difficult extraterritoriality question and hold a foreign polluter liable for what essentially amounted to a century of dumping large quantities of hazardous waste in United States waters, but the court’s reasoning arguably created a troubling precedent.

In its recent order, the district court seems to have doubled down on the Ninth Circuit’s use of conceptual bifurcation in characterizing Teck’s emissions. By this time, plaintiffs had amended their complaint to allege that Teck arranged for disposal of hazardous substances it emitted into the air where those substances settled in the UCR Site. The district court agreed that such emissions could support CERCLA arranger liability. Subsequently, the Ninth Circuit held in Center for Community Action and Environmental Justice (CCAEJ)[11]that under RCRA, air “emission of diesel particulate matter does not constitute ‘disposal’ of solid waste” and therefore will not sustain a claim under that act.[12] Because CERCLA defines “disposal” solely by reference to the RCRA definition,[13] Teck filed a motion for reconsideration, arguing that CCAEJ foreclosed the trial court’s finding that air emissions can constitute a CERCLA disposal.

The court denied Teck’s motion, distinguishing CCAEJ in large part on the grounds that the court there “had no reason to consider how its interpretation of ‘disposal’ relates to the additional CERCLA definitions of ‘facility’ and ‘release.’”[14] Just as the Ninth Circuit artificially separated Teck’s effluent discharges in determining where the release took place, so too did the district court divide Teck’s air emissions: disposal occurred not when Teck emitted substances into the air, but when those substances subsequently “were deposited ‘into or on any land or water’ of the UCR Site.”[15] In order to distinguish CCAEJ, the district court emphasized that CERCLA applies only where there is disposal at a “facility,” whereas RCRA applies to disposals to any land or water. As a result, the court claimed, a “CERCLA disposal”—as distinct from a RCRA disposal—occurs only when hazardous substances are deposited into any land or water at a CERCLA facility.

Recognizing the significance of its decision, the district court certified its order for immediate interlocutory appeal to the Ninth Circuit;[16] the appeals court has decided to hear the case.

Analysis

The trial court’s holding raises several issues likely to be addressed on appeal.

First, the finding that air emissions can support CERCLA liability appears to be in tension with CCAEJ. The CCAEJ court relied primarily on RCRA’s text, which defines “disposal” as:

the discharge, deposit, injection, dumping, spilling, leaking, or placing of any  … hazardous waste into or on any land or water so that such … hazardous waste … may enter the environment or be emitted into the air or discharged into any waters.  …[17]

As the Ninth Circuit recognized, this language compels the conclusion that “‘disposal’ occurs where the [] waste is first placed ‘into or on any land or water’ and is thereafter ‘emitted into the air.’”[18] The CCAEJ court also observed that RCRA defines “release” to include both “emitting” and “disposing,” indicating that “Congress knew how to define ‘disposal’ to include emissions, but nevertheless chose not to.”[19] Ultimately, the Ninth Circuit did not mince words: “Reading [the definition] as Congress has drafted it, ‘disposal’ does not extend to emissions of [] waste directly into the air.”[20] The same analysis should presumably apply to CERCLA, which defines “disposal” by incorporating the RCRA definition and similarly defines “release” to include “emitting.”[21] Indeed, in its 2006 Pakootas decision, the Ninth Circuit observed that under CERCLA (as under RCRA), “‘release’ is broader than ‘disposal.’”[22] The district court’s finding that Teck’s air emissions were disposed of “‘in the first instance’ into or on land or water of the UCR Site”[23] therefore seems in tension with CCAEJ.

Second, the district court’s reading of “disposal” is problematic when considered in the context of CERCLA jurisprudence. Key to the trial court’s order was its distinction between ordinary disposals—which may take place anywhere, and would include Teck’s air emissions and effluent discharges in Canada—and so-called “CERCLA disposals,” which occur only when a hazardous substance is disposed of “into or on any land or water” of a CERCLA facility.[24] If applied beyond the confines of the facts of the Pakootas case, however, this definition could have unintended consequences. As the Supreme Court held in Burlington N. & Santa Fe Ry. Co. v. United States [25]in order to establish CERCLA “arranger” liability, a plaintiff must show that the defendant took “intentional steps to dispose of a hazardous substance.” It is not enough that the plaintiff possess knowledge that such a disposal would occur: the party must intend that a “disposal” result from its arrangement.[26] Perhaps ironically, applying the district court’s definition of “disposal” to these established principles would create a rule that that goes beyond anything contemplated in Burlington Northern and may haunt CERCLA plaintiffs: a party is only liable as an arranger if it took intentional steps to dispose of a hazardous substance at a CERCLA facility.

Third, and perhaps most obviously, the district court’s holding could lead to a significant expansion of CERCLA’s scope. Already it is no easy feat to determine responsibility for a given CERCLA site, and parties with only remote connections to these sites can find themselves embroiled in CERCLA litigation. Given that defendants “seeking to avoid joint and several liability bear the burden of proving that a reasonable basis for apportionment exists,”[27] the stakes for parties who may have contributed to releases at a given CERCLA facility are high. Given that air pollutants can be transported thousands of miles before settling on land or water, widespread adoption of the district court’s holding could both complicate the resolution of CERCLA cases considerably and expose large numbers of new parties to liability.

To be sure, there may be factors such as personal jurisdiction that place some limits on roping air-emitting parties into faraway disputes, and Burlington Northern’s intentional-disposal standard may further limit liability. Moreover, unlike the Canadian Teck Cominco, many US-based air emitters should be able to take advantage of the “federally-permitted release” defense. Nevertheless, the district court’s Pakootas decision has potential significantly to change the CERCLA landscape, and is worth watching as it goes before the Ninth Circuit. Teck’s opening brief is due July 6, 2015.

[1] 42 U.S.C. § 9601 et seq.

[2] CV-04-256-LRS, 2014 WL 7408399 (E.D. Wash. Dec. 31, 2014).

[3] 42 U.S.C. § 6901 et seq.

[4] Pakootas v. Teck Cominco Metals, Ltd., 2012 WL 6546088, at *2-*3 (E.D. Wash. Dec. 14, 2012).

[5] See id.

[6] 42 U.S.C. § 9607(a).

[7] 452 F.3d 1066 (9th Cir.2006).

[8] Id. at 1079.

[9] Id. at 1075.

[10] Id. at 1077-1078.

[11] Center for Community Action and Environmental Justice v. BNSF Railway Company, 764 F.3d 1019 (9th Cir.2014).

[12] Id. at 1020-21.

[13] 42 U.S.C. § 9601(29).

[14] Pakootas, 2014 WL 7408399, at *2.

[15] Id.

[16] Id. at *4.

[17] 42 U.S.C. § 6903(3).

[18] CCAEJ, 764 F.3d at 1023 (emphasis in original).

[19] Id. at 1024-1025.

[20] Id. at 1024.

[21] 42 U.S.C. § 9601(22).

[22] Pakootas, 452 F.3d at 1078 n.17. (citations omitted).

[23] Pakootas, 2014 WL 7408399, at *2.

[24] Id. at *3.

[25] Burlington N. & Santa Fe Ry. Co. v. United States, 556 U.S. 599, 611 (2009).

[26] Id. at 612.

[27] Id. at 614.

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