“Cooperative Federalism” or “Paternalistic Central Planning”?: U.S. Supreme Court Agrees That State Courts Can Hear Claims Over Adequacy of CERCLA Cleanups Under Certain Circumstances, But Limits Plaintiffs’ Options

The federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as the Superfund law, prescribes a careful process for making decisions on how to remediate contaminated sites. To avoid delay, the statute also divests federal courts of jurisdiction to hear most challenges to the selected remedy. In its recent opinion in Atlantic Richfield Co. v. Christian, the U.S. Supreme Court agreed that CERCLA does not bar state courts from hearing claims grounded in state law that go beyond claims for money damages and seek a cleanup that goes beyond what EPA requires.

The case arose in Montana, where the Anaconda Copper Smelter operated for over a century and contaminated an area of over 300 square miles with arsenic and lead. Atlantic Richfield Company acquired the financially troubled smelter in the 1970s but could not reverse its decline, and closed it by 1980. Three years later, EPA named it one of its first official Superfund sites, and since then Atlantic Richfield has spent over $450 million on a cleanup that is expected to continue until 2025.

The Superfund site that Atlantic Richfield has been remediating includes numerous residential properties. The owners of 98 of those properties sued Atlantic Richfield in Montana state court in 2008, asserting state common law claims. In addition to traditional money damages, the plaintiffs sought restoration damages, an unusual form of relief that is available to owners of private residences under Montana law. To recover restoration damages, the plaintiffs would have to show that they would be permitted to use that money for restoration of their properties. The restoration they proposed went beyond EPA’s cleanup plan, and would cost Atlantic Richfield an estimated $50-$58 million. The Montana trial court held that CERCLA did not preclude the plaintiffs’ claims for restoration damages, and the Montana Supreme Court affirmed that determination.

The critical issue at the center of the case was whether two interlocking provisions in Section 113 of the federal statute divested the state court of jurisdiction to entertain the plaintiffs’ claim for restoration damages. Writing for an 8-1 majority on this issue (Justice Alito would have remanded the case to the Montana courts without trying to interpret those “devilishly difficult statutory provisions”), Chief Justice Roberts concluded that Sections 113(b) and 113(h) deal only with the jurisdiction of federal courts, and have no effect on the jurisdiction of state courts to hear cases grounded in state law that effectively seek review of the adequacy of an EPA-approved cleanup.

Having decided that the plaintiffs were entitled to their day in state court, Chief Justice Roberts then turned to other provisions of CERCLA to decide just how much freedom the statute left the plaintiffs in the design of the plan to restore their properties. The majority held that because they were subject to liability under Section 107 as the owners of portions of the Superfund “facility” that Atlantic Richfield is remediating, the plaintiffs were also “potentially responsible parties.” For that reason, the plaintiffs were covered by Section 122(e)(6), which requires EPA approval of a remedial action proposed for an EPA-listed Superfund site by any potentially responsible party. They remained potentially responsible parties, said the Court, even though EPA could no longer sue them to recover its costs (because the statute of limitations had run) and EPA, pursuant to a long-standing policy regarding residential owners who did not cause the contamination, chose not to involve them in settlement negotiations, the plaintiffs were still potentially responsible parties for purposes of Section 122(e)(6).

Justice Gorsuch (joined by Justice Thomas) dissented vigorously on this issue, accusing the majority of reading CERCLA in a way that favored “paternalistic central planning” over concurrent federal and state roles in the restoration of contaminated land. His dissent also sounded familiar with notes emphasizing the “traditional and central role of state governments” in the regulation of private property and the protection of natural resources and the continuing relevance of “ancient common law causes of action” as means of redress for landowners whose property has been contaminated by others. The majority, by contrast, pointed to the significant role given to the states and state law in the CERCLA process (including the general requirement that remedial action comply with all “legally applicable or relevant and appropriate requirements” of state environmental law (commonly known as ARARs). Far from encouraging “paternalistic central planning,” said Chief Justice Roberts, CERCLA incorporates the same “spirit of cooperative federalism” that characterizes many federal environmental statutes.

It is not often that the Supreme Court enters the notoriously dense thicket of CERCLA’s oft-criticized language. As with prior opinions, the full reach and significance of Atlantic Richfield, whether broad or limited, will not be clear for some time.

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