Federal and State Hazardous Substance Litigation By John C. Cruden cercla overview

(3) Under Section 113(h), there is no right to pre-enforcement judicial review of an Administrative Order. See Solid State Circuits, Inc. v. United States Envtl. Protection Agency, 812 F.2d 383 (8th Cir. 1987). But see General Electric v. Whitman, 257 F. Supp. 2d 8 (D.D.C. 2003),reversed on appeal, (DC Circuit Court of Appeals held constitutional challenge to 106 order could be considered).

(4) Sufficient Cause Defense: Congress and the courts have construed "sufficient cause," as an "[o]bjectively reasonable, good faith belief that one has a valid defense." United States v. Parsons, 723 F. Supp. 757, 763 (N.D. Ga. 1989) (citing cases). See also Solid State Circuits v. United States Envtl. Protection Agency, 812 F.2d 383, 391-392 (8th Cir. 1987). The author of the bill in the Senate advised:

We intend that the phrase "sufficient cause" would encompass defenses such as the defense that the person who was the subject of the President's order was not the party responsible under the Act for the release of the hazardous substance . . . There could also be "sufficient cause" for not complying with the order if the party subject to the order did not comply or if no technological means for complying was available.

United States v. Reilly Tar & Chem. Corp., 606 F. Supp. 412, 420 (D. Minn. 1985) (citing remarks of Senator Stafford in 1 Legislative History, 770-71). See also United States v. LeCarreaux et al., Civ. No. 90-1672, 1991 WL 341191, (D.N.J. 1992) (financial status is not "sufficient cause" for failure to comply with an Order) and Solid State Circuits v. United States Envtl. Protection Agency, 812 F.2d 383, 390 (8th Cir. 1987) (equitable arguments are not "sufficient cause" for non-compliance with order and are not a defense to liability).

(5) EPA may order a party to participate in a cleanup even if another party has agreed in a consent decree to perform that cleanup. United States v. Occidental Chem. Corp., 200 F.3d 143 (3d Cir. 1999).

b. Injunctive Relief

(1) Injunctive relief is available only to the United States, not states or private parties. See Colorado v. Idarado Mining Co., 916 F.2d 1486, 1494-1498 (10th Cir. 1990); Ohio v. United States Envtl. Protection Agency, 997 F.2d 1520 (D.C. Cir. 1993) (NCP Litigation).

(2) Executive Order 13016 (August 1996) amended Executive Order 12580 and delegated § 106 authority to Secretaries of Interior, Commerce, Agriculture, Defense, and Energy with respect to facilities under their management or control, to be exercised with concurrence of either the Coast Guard or EPA, as appropriate. These agencies and DOJ entered into a MOU (September 1997) detailing the implementation process.

E. COST RECOVERY ACTIONS - CERCLA § 107

1. BASIC ELEMENTS OF LIABILITY

a. When there is a release or threatened release of hazardous substances by a responsible party from a facility that causes the incurrence of response costs, and the costs are not inconsistent with the National Contingency Plan ("NCP"), all government costs are recoverable.

b. States and tribes can also take actions and seek reimbursement from private parties for their expenditures pursuant to Section 107(a).

2. THE FOUR ELEMENTS OF LIABILITY - SECTION 107(a)

a. Liability is created in part by the release or substantial threat of release. n9

(1) These terms are defined broadly and include leaking, leaching, abandonment of drums or containers, as well as dumping or disposing into the environment. See, e.g., Dedham Water Co. v. Cumberland Farms Dairy, Inc., 889 F.2d 1146, 1152 (1st Cir. 1989).

(2) There is no minimum threshold release, concentration, or reportable quantity required to create liability. E.g. Johnson v. James Langley Operating Co., 226 F.3d 957 (8th Cir. 2000); B.F. Goodrich Co. v. Murtha, 958 F.2d 1192 (2d Cir. 1992); United States v. Alcan Aluminum Corp., 964 F.2d 252 (3d Cir. 1992); Esso Std. Oil Co. v. Perez, CIVIL 01-2012 (SEC), 2004 U.S. Dist. LEXIS 19954, at *33 (D. P. R. 2004).

(3) In establishing CERCLA liability, the U.S. need not prove that the responsible party is the only source of the contamination or that the releases occurred in any particular amount. Alcan-Aluminum, 964 F.2d at 264, 259-60.

(4) Liability for "passive disposal" (i.e., mere migration of pre-existing contamination) is unsettled. Carson Harbor Village, Ltd. v. Unocal Corp., 270 F.3d 863 (9th Cir. 2001) (en banc decision that active human conduct is not required for "disposal" of a hazardous substance, but holding that the mere movement of contamination in the soil in this case did not constitute disposal). Compare, Nuard, Inc. v. William E. Hooper & Sons, Co., 966 F.2d 837, 844-47 (4th Cir. 1992)(passive migration and leaking from underground storage tanks established "disposal") with United States v. 150 Acres of Land, 204 F.3d 698 (6th Cir. 2000); United States v. CDMG Realty, 96 F.3d 706 (3d Cir. 1996); Solvent Chem. Co. v. E.I. DuPont de Nemours Co., 01-CV-425C(SC), 2005 U.S. Dist. LEXIS 16573, at *20-22 (W.D.N.Y. June 28, 2005).

b. The release or threat of release must be of a hazardous substance n10

(1) A minimum amount or reportable quantity requirement does not exist. Mere listing or designation as a hazardous substance is sufficient to create liability for disposal of any amount of the substance. See, e.g., Stewman v. Mid-South Woods Prods. Of Mena, Inc., 993 F.2d 646, 649 (8th Cir. 1993).

(2) This term includes municipal solid waste. B.F. Goodrich Co. v. Murtha, 958 F.2d 1192 (2d Cir. 1992). See EPA Municipal Solid Waste Policy, 54 FR 51071.

(3) Mining wastes known as "Bevill Wastes" may still be hazardous substances under CERCLA § 101(14). La. Pacific Corp. v. ASARCO, Inc., 13 F.3d 1378 (9th Cir. 1994).

c. The release or threat of release must come from a vessel or at a facility

(1) Facility is defined very broadly under Section 101(9) to include:

(a) Any building, structure, installation, equipment, pipe or pipeline, ... well, pit, pond, lagoon, impoundment, ditch, landfill, storage container, motor vehicle, rolling stock, or aircraft, or

(b) Any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located; but does not include any consumer product in consumer use or any vessel. n11

d. The release or threat of release must be caused by a responsible party, i.e., a person that falls within one or more of the following four categories for a PRP:

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n9 Defined in CERCLA § 101(22). Statute excludes certain categories from definition of release including workplace exposure, engine exhaust emissions, and "the normal application of fertilizer". See City of Tulsa v. Tyson Foods, 258 F. Supp. 1263, 1287-88 (N.D. Okla 2003), vacated and settled by City of Tulsa v. Tyson Foods, No. 01 CV 0900EA(C) 2003 U.S. Dist. LEXIS 11269 (N.D. Okla. 2003).

n10 Hazardous substances are defined broadly under CERCLA by referring to substances listed under other federal statutes. See 40 C.F.R. § 302.4 (comprehensive listing of CERCLA hazardous substances), published at 50 Fed. Reg. 13486 (April 4, 1985). The term includes "hazardous wastes" under Section 3003 of RCRA, 42 U.S.C. § 6923, "hazardous substances" identified under Section 311 of the CWA, 33 U.S.C. § 1321, "toxic pollutants" designated under Section 307 of the CWA, 33 U.S.C. § 1317, "hazardous air pollutants" designated under Section 112 of the Clean Air Act ("CAA"), 42 U.S.C. § 7412, and "imminently hazardous chemical substances or mixtures or any article containing such a substance or mixture" under Section 7 of Toxic Substance Control Act, 15 U.S.C. § 2606. Petroleum, however, is not a hazardous substance unless already included in the above categories, or natural gas. 42 U.S.C. § 9601(14).

n11 "Facility" is so broadly defined that this element is rarely in issue, but the extent of the facility in question, and whether an area comprises one facility or several, may be an issue in some cases. See N.J. Turnpike Auth. v. PPG Inds., 197 F.3d 96, 105 (3d Cir. 1999).

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3. CURRENT OWNERS AND OPERATORS

a. The term applies to all current owners or operators. The plaintiff does not have to prove that disposal of hazardous substances occurred at the time of ownership or operation. "Owner" has been held to include tenants whose leases grant them broad rights over leased property, e.g. United States v. A & N Cleaners & Launderers, Inc., 788 F.Supp. 1317, 1332-34 (S.D.N.Y. 1992). The Second Circuit held that a lessee is liable as an "owner" only if it is a "de facto owner" as opposed to merely "exercis[ing] control over the facility"; the latter may suffice for "operator" liability. Commander Oil Corp. v. Barlo Equipment Corp., 215 F.3d 321, 331 (2d Cir. 2000).

b. Ownership status is usually determined as of the time plaintiff files complaint.

c. The Supreme Court in Bestfoods stated: "an operator must manage, direct, or conduct operations specifically related to pollution, that is, operations having to do with the leakage or disposal of hazardous waste, or decision about compliance with environmental regulations." 524 U.S. at 66-678. See also Consol. Edison Co. of N.Y., Inc. v. UGI Utils., Inc., 310 F. Supp. 2d 592 (S.D.N.Y. 2004); Esso Std. Oil, 2004 U.S. Dist. LEXIS 19954; GenCorp Inc. v. Olin Corp., 390 F.3d 433 (6th Cir. 2004) (co-venturers constructive "ownership and possession").

4. PAST OWNERS AND OPERATORS

a. Section 107(a)(2) imposes liability on "any person who at the time of disposal of any hazardous substance owned or operated" the facility. The United States need not prove a release or threat of a release at time owned/operated, only that disposal of a hazardous substance occurred during relevant time.

b. Individual liability

(i) Officers and directors can be found directly liable as an "operator." See NEPACCO, 810 F.2d at 734 (president and major shareholder and vice president and principal responsible official of the company were found liable for arranging for disposal); New York v. Corp., 759 F.2d 1032, 1043 (2d Cir. 1985) (individual stockholder who manages the business was also an "owner"); Sidney S. Arst Co. v. Pipefitters Welfare Education Fund, 25 F.3d 417, 421 (7th Ct. 1994) (individual operator liability). A contrary decision by the 6th Circuit was vacated by the Supreme Court: Donahey v. Bogle, 129 F.3d 838 (6th Cir. 1997), vacated, 524 U.S. 924 (1998). Subsequently, the 6th Cir. has upheld a finding of individual liability: Carter-Jones Lumber Co. v. Dixie Distrib. Co., 166 F.3d 840 (6th Cir. 1999); Carter-Jones Lumber Co. v. LTV Steel Co., 237 F.3d 745 (6th Cir. 2001). See also, Browning - Ferris Industry v. Ter Maat, 195 F.3d 953 (7th Cir. 1999); GenCorp, Inc. v. Olin Corp., 390 F.3d 433, 447 (6th Cir. 2004)(holding that can officer and directors may be liable as operators even if they were unaware of the exact location of disposal).

(ii) Shareholders can be held liable by corporate veil-piercing, if the required elements are satisfied. See Carter-Jones, 237 F.3d 745 (applying state law for veil-piercing standard but interpreting it broadly); Ter Maat, 195 F.3d 953 (leaving open whether federal or state law governs veil piercing).

c. Successor liability

(i) CERCLA § 101(21) includes "corporations" in list of liable entities. 1 U.S.C. § 5 indicates when the words "company" or "association" are used then successors are automatically included. United States v. Mex. Feed & Seed Co., 980 F.2d 478, 486 (8th Ct. 1992).

(ii) Courts have held normal principles of successor liability apply to CERCLA: the leading decision is Smith Land and Improvement Corp. v. Celotex Corp., 851 F.2d 86 (3d Cir. 1988), cert. denied, 488 U.S. 1029 (1989). In general, "where one company sells or otherwise transfers all its assets to another company, the latter is not liable for the debts and liabilities of the transferor." 15 W. Fletcher, Cyclopedia of the Law of Private Corporations § 7122 (perm. ed. rev, vol. 1999). However, the doctrine of successor liability permits exceptions to the general rule in four specific instances: when (a) the purchaser expressly or implicitly agrees to assume liability; (b) the purchase is a de facto consolidation or merger; (c) the purchaser is a mere continuation of the seller; or (d) the transfer of assets is for the fraudulent purpose of escaping liability. See, e.g., Philadelphia Elec. Co. v. Hercules, Inc., 762 F.2d 303, 308-309 (3d Cir. 1985), cert. denied, 474 U.S. 980; Interfaith Community Organization v. Honeywell International Inc. 263 F. Supp. 796 (D.N.J. 2003), aff'd 399 F.3d 248 (2d Cir. 2005), cert. denied 125 S.Ct 2951. In addition, some federal courts have recognized another theory of CERCLA successor liability under federal common law. This theory is known as the "substantial continuity" or "continuation of the enterprise test". See United States v. Carolina Transformer Co., 978 F.2d 832, 837-838 (4th Cir. 1992). Contra Atchinson Topeka & Santa Fe R.R. Co., et al. v. Brown & Bryant, et al., 159 F.3d 358 (9th Cir. 1998); New York v. Nat'l Servs. Indust., 352 F.3d 682 (2d Cir. 2003), on remand, 380 F. Supp. 2d. 122 (E.D.N.Y. 2005); United States v. General Battery Corp. Inc., 423 F.3D 294 (3d Cir. 2005) (holding that "substantial continuity is untenable as a basis for successor liability under CERCLA").

iii. Courts are divided on whether state or federal law controls. Compare Anspec Co., Inc. v. Johnson Controls Inc., 922 F.2d 1240 (6th Cir 1991) reversing district court decision, holding that Congress included successor corporations within description of liable parties (applied state law) to United States v. Mex. Feed & Seed Co., 980 F.2d 478 (8th Cir. 1992) (substantial continuity test); North Shore Gas Co. v. Salomon, Inc., 152 F.3d 642 (7th Cir. 1998) (parties stipulated federal common law applied); U.S. v. General Battery Corp., Inc., 423 F.3d 294 (3d Cir. 2005) (holding that a de facto merger creates successor liability under federal common law).

d. Parent Company Liability. Parent companies may also be directly liable as an operator if the parent actively participated in, and exercised control over, the operations of a subsidiary's facility. United States v. Bestfoods, 524 U.S. 51 (1998) (Court unanimously reversed lower court's en banc decision in United States v. Cordorva Chem. Co., 113 F.3d 572 (6th Cir. 1997). See also United States v. Township of Brighton, 153 F.3d 307 (9th Cir. 1998); Atlantic Gas Light Co. v. UGI Utilities, Inc., 463 F.3d 1201 (11th Cir. 2006) (applying Bestfoods to hold parent not liable); and United States v. Kayser-Roth Corp., 272 F.3d 89, 102 (1st Cir. 2001)(finding parent liable, court stated: "[w]hatever the ambiguity created by [Bestfoods'] reference to [general facility operations], we think it is clear that direct operator liability requires an ultimate finding of the parent's involvement with 'operations having to do with the leakage or disposal of hazardous waste, or decisions about compliance with environmental regulations.'" Bestfoods presumes that activities conducted by dual officeholders were taken on behalf of the subsidiary, not the parent. 524 U.S. at 71; Raytheon Constructors, Inc. v. ASARCO, Inc., 368 F.3d 1214 (10th Cir. March 11, 2003). A parent company also faces "derivative" liability if the corporate veil can be pierced. In Bestfoods, the Supreme Court recognized that courts and commentators disagree "over whether, in enforcing CERCLA's indirect liability, courts should borrow state law, or instead apply a federal common law of veil piercing." 118 S.Ct. 1876. Because that issue was not presented, the court expressly did not resolve the conflict.

e. Dissolved Corporations, In the 7th Cir., state law governs whether dissolved company remains amendable to CERCLA suit, Citizens Electric Corp. v. Bituminous Fire & Marine Insurance Co., 68 F.3d 1016, 1019-20. Accord La. Pacific Corp. v. ASARCO, Inc., 5 F.3d 431 (9th Cir. 93). But see Town of Oyster Bay v. Occidental Chem. Corp., 987 F.Supp. 182 (E.D.N.Y. 1997), United States v. Sharon Steel Corp., 681 F. Supp. 1492 (D. Utah 1987); and AM Props. Corp. v. GTE Prods. Corp., 844 F. Supp. 1007 (D.N.J. 1994) (holding that CERCLA preempts inconsistent state law and allows suit against dissolved corporation.)

f. Federal Lien. Section 107(1) establishes a federal lien in favor of U.S. upon "all real property and rights to such property ... subject to or affected by a removal or remedial action," although the lien must be perfected to ensure priority over subsequent lienholders. In Reardon v. United States, 947 F.2d 1509 (1st Cir. 1991) (en banc), the court found EPA procedures lacked adequate procedural safeguards. Subsequently, EPA promulgated procedures for instituting such liens which were upheld in United States v. 150 Acres of Land, 5:95 CV 109, 1998 U.S. Dist. LEXIS 1289 (E.D. Ohio 1997), aff'd in pertinent part by 204 F.3d at 710-11. A new statutory "windfall lien" has also been established. (See Outline at Section H.12).

5. GENERATORS

a. Section 107(a)(3) imposes liability on "any person who by contract, agreement or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at any facility or incineration vessel owned or operated by another party or entity and containing such hazardous substances, . . ." see generally Motion Intern, Inc. v. A.E. Staley Mfg. Co., 343 F.3d 669 (3d Cir. 2003).

b. A generator is liable if 1) it owned or possessed hazardous substances, 2) substances were shipped to the site in question, and 3) similar substances were found at the site.

c. The plaintiff need not prove that the generator selected the facility; a generator is liable even if it directed transporter to take hazardous substances to another facility. O'Neill v. Picillo, 883 F.2d 176 (1st Cir. 1989).

d. Plaintiffs need not prove that the generator owned or possessed hazardous substances if it exercised sufficient control over disposal. NEPACCO, 810 F.2d 726; United States v. Aceto Agr. Chems. Corp., 872 F.2d 1373 (8th Cir. 1989). In Aceto, the Court of Appeals held that pesticide company who supplied raw materials to pesticide formulator, but retained ownership, was liable, as the generation of hazardous wastes was an inherent part of process. See also Jones-Hamilton Co. v. Beazer East Materials & Services Inc., 973 F.2d 688 (9th Cir. 1992). But see Fla. Power & Light Co. v. Allis-Chalmers Corp., 893 F.2d 1313 (11th Cir. 1990) (party who sells only raw materials or a finished primary product is not liable); Concrete Sales & Services v. Blue Bird Body Co., 211 F.3d 1333 (11th Cir. 2000) (party who contracted with electroplating company is not liable as generator of wastes resulting from electroplating operations).

e. Plaintiffs need not prove that the hazardous substances found, released, or cleaned up at the site were generators' wastes, i.e., need not "fingerprint" the wastes, but plaintiffs must prove that generator's wastes were shipped to the site and that "like substances" were found there. Further, proof of specific intent to arrange for disposal of hazardous substances is not required. Tosco Corp. v. Koch Industries Inc., 216 F.3d 886, 892 (10th Cir. 2000); Carson Harbor Village, 227 F.3d at 1211; United States v. TIC Invest. Corp., 68 F.3d 1082, 1088 (8th Cir. 1995), cert denied, 117 S.Ct. 50 (1996); and Redwing Carriers Inc. v. Saraland Apartments, 94 F.3d at 1489, 1512 (11th Cir. 1996).

f. Whether the disruption or movement of contaminated earth constitutes a "disposal" is unsettled. Compare, Tanglewood East Homeowners v. Charles Thomas, Inc., 849 F.2d 1568, 1573 (5th Cir. 1988) (land filling and grading by developer constitutes disposal) with Alcan-Togo America, Inc. v. Northern Illinois Gas Co., 881 F. Supp. 342 (N.D. Ill 1995)(owners excavation and stockpiling did not constitute disposal). See also Geraghty & Miller, Inc. v. Conoco Inc., 234 F.3d 917, 929 (5th Cir. 2001) (possibility that environmental contractors caused migration of hazardous substances precludes summary judgment that contractors are not liable as generators); Blasland, Bouck & Lee, Inc. v. City of North Miami, 96 F.Supp.2d 1375 (S.D. Fla. 2000) (absent negligence, response action contractor cannot be held liable for failing to remedy contamination without worsening it); United States v. CDMG Realty Co., 96 F.3d 700 (7th Cir. 1996) (disposal includes the spreading of contaminants already introduced at the facility during a soil investigation); Redwing Carriers, 94 F.3d at 1510-12; Kaiser Aluminum, 976 F.2d at 1342. In Dent v. Beazer Materials, 156 F.3d 523 (4th Cir. 1998), Court found prior owners not liable because of leaking of wood-treating substances on their property from creosote processing facility on adjacent property by subsurface migration.

g. Sale of useful product. CERCLA Section 101(9), the definition of "facility" excludes "any consumer product in consumer use ..." "The sale of a useful, although hazardous substance, to serve a particular purpose, is not an arrangement for disposal and will not impose CERCLA liability," Douglas County, Neb v. Gould, Inc., 871 F. Supp. 1242, 1245 (D. Neb. 1994); Cal. Dep't of Toxic Substances Control v. Payless Cleaners, 368 F. Supp. 2d 1069, 1077 (E.D. Cal. Mar. 4, 2005); Fla. Power and Light Co. v. Allis Chambers Corp., 893 F.2d 1313, 1317 (11th Cir. 1990); State of California v. Summer Del Caribe, Inc., 821 F. Supp. 574, 581 (N.D. Ca. 1993). Compare, AM Int'l Inc. v. Int'l Forging Equipment Corp., 982 F.2d 98, 998 (6th Cir. 1993) (sale of electroplating business did not constitute disposal) with United States v. Cello-Foil Products, Inc., 100 F.3d 1227 (6th Cir. 1996) (although intent to arrange for disposal is part of establishing generator liability, government need not demonstrate subjective intent to have waste disposed in particular manner or at particular site, and intent may be proven circumstantially). See also Amcast Indust. Corp. v. Detrex Corp., 2 F.3d 746, 751 (7th Cir. 1993), cert. denied, 510 U.S. 1044 (1994) ("arranged for" implies intentional action); United States v. Petersen Sand & Gravel, 806 F. Supp. 1346, 1354 (N.D. Ill. 1992); and Pneumo Abex Corp v. High Point, 142 F.3d 769 (4th Cir. 1998)(used bearings were sale of valuable material).

h. The parent company of a subsidiary generator may also be held liable if the plaintiff meets the Supreme Court's Bestfood standards. Carter-Jones Lumber Co. v. Dixie Distribution Co., 166 F.3d 840 (6th Cir. 1999).

6. TRANSPORTERS

a. Section 107(a)(4) imposes liability on "any person who accepts or accepted any hazardous substances for transport to disposal or treatment facilities, incineration vessels or sites selected by such person, . . ." See Prisco v. AED Carting Co., 168 F.3d 593 (2d. Cir. 1999).

b. Plaintiff must have evidence that the transporter PRP selected the site. See e.g., B.F. Goodrich v. Betkoksi, 99 F.3d 505 (2d Cir. 1996), (decision clarified on denial of rehearing) 112 F.3d 88 (1997), cert. denied, 524 U.S. 926 (1998).

c. CERCLA § 107 (c)(1)(A) limits recovery of a vessel to $ 300 per gross ton of the vessel, or $ 5 million, whatever is greater, unless there is willful misconduct or willful negligence. See also Section 108(a)(1) (vessel certificate of financial responsibility).

F. RECOVERABLE COSTS

1. GOVERNMENTAL RESPONSE COSTS

a. Section 107 allows the government to recover its response costs "notwithstanding any other provision or rule of law, and subject only to the defenses set forth in subsection (b) of this section." Courts have emphasized that consistency with the NCP is "the only criterion for the recoverability of response costs under CERCLA." United States v. Hardage, 982 F.2d 1436, 1444-1445 (10th Cir. 1992); United States v. NEPACCO, 579 F.Supp. 823, 852 (W.D. Mo. 1984) and Laidlaw Waste Sys. v. Mallinckrodt, Inc., 925 F.Supp. 624, 632 (E.D. Mo 1996); United States v. JG-24, Inc., 331 F. Supp. 2d 14, 64 (D.P.R. 2004). In considering consistency under the NCP, courts review EPA's selection of a response action under an arbitrary and capricious standard, based on the administrative record, pursuant to section 113 (j). See United States v. Burlington Northern R.R. Co., 200 F.3d 679 (10th Cir. 1999); United States v. Chapman, 146 F.3d 1166 (9th Cir. 1998); United States v. Akzo Coating of Am., Inc., 949 F.2d 1409, 1424 (6th Cir. 1991). This burden of proof and standard for cost recovery applies not only when EPA is exercising the President's CERCLA authorities to clean up to EPA, but also to federal land managing agencies exercising that authority to clean up federally-owned land. See United States v. Chrysler, 157 F. Supp. 2d 849 (N.D. Ohio 2001) (U.S. entitled to maintain cost recovery, not contribution action despite being the property owner); United States v. Chrysler, 168 F. Supp. 2d 754 (N.D. Ohio 2001) (U.S. entitled to presumption of consistency with the NCP even where majority of costs were incurred by the National Park Service, the federal land manager).

b. Recoverable costs include government's past response costs, the costs of any remediation paid for by the government, prejudgment interest, indirect costs, enforcement costs, and future costs at the site that the government may incur. United States' litigation costs and attorney fees are considered enforcement activity costs. See United States v. Gurley, 43 F.3d 1188, 1199-1200 (8th Cir 1994), (recoverable costs include government payroll expenses); B.F. Goodrich v. Betkoski, 99 F.3d 505 (2d Cir. 1996) (enforcement costs including attorney's fees); United States v. Hardage, 750 F.Supp 1460, 1497-1504 (site investigation, enforcement, indirect and litigation costs); Meyer, 889 F.2d at 1499, 1504-05 (indirect or "overhead" costs recoverable), cert. denied, 494 U.S. 1057 (1990); O'Neil v. Picillo, 883 F.2d l76, 178 (1st Cir. 1989), cert. denied, 493 U.S. 1071 (1990) (prejudgment interest); United States v. E.I. Dupont de Nemours and Co., Inc., 432 F.3d 161 (3d Cir. 2005) (EPA may recover overight costs), overruling United States v. Township of Brighton, 153 F.3d 307, 321 (6th Cir. 1998) (prejudgment interest).; United States v. Rohm & Haas Co., 2 F.3d 1265 (3d Cir. 1993); see also United States v. Lowe, 118 F.3d 399 (5th Cir. 1997); Atlantic Richfield Company v. Am. Airlines, 98 F.3d 564 (10th Cir. 1996) (holding EPA oversight costs are recoverable); United States v. Dico, Inc., 266 F.3d 864 (8th Cir. 2001), reh'g and reh'g en banc denied, cert den., 122 Sup. Ct. 2291 (2002). United States v. Chromalloy Am. Corp., 158 F.3d 345 (5th Cir. 1998) (oversight costs are recoverable even if Economy Act not compiled with); JG-24, 331 F. Supp. 2d at 64 (explaining,"[r]ecoverable response costs include not only the costs of actual cleanup or removal activities, such as excavation and removal of drums and other wastes, but also the costs of sampling, site assessment, investigations, monitoring, oversight, and litigation and other enforcement costs. Moreover, recoverable response costs include indirect costs, as well as direct costs. The United States is also entitled to prejudgment interest on its past response costs"); U.S. v. W.R. Grace & Co., 429 F.3d 1224 (9th Cir. 2005) (award EPA $ 11 million in indirect costs).

c. The United States and States are entitled to "all costs" of response action incurred not inconsistent with the NCP, not limited to "reasonable" or "necessary" costs. Dico, 266 F.3d 864; NEPACCO, 810 F.2d 726; United States v. Hardage, 982 F.2d 1436, 1441-43 (10th Cir. 1992); United States v. Domenic Lombard Realty, Inc., 334 F. Supp. 2d 105, 108 (D.R.I. 2004); Solvent Chem. Co., 2005 U.S. Dist. LEXIS 16573, at *242-243, United States v. Gurley, 317 F. Supp. 2d 870, 878 (E.D. Ark. 2004). But see Chapman, 146 F.3d at 1176 (attorney's fees portion of enforcement costs limited to reasonable attorney's fees). The United States may prove its costs by means of cost summaries and payroll reports with underlying documentation. United States v. Findett Corp., 220 F.3d 842 (8th Cir. 2000); Chapman, 146 F.3d at 1171; Hardage, 982 F.2d at 1442-43. A defendant may object to costs by offering "evidence to counter or otherwise challenge the extensive government documentation of its costs." Meyer, 889 F.2d at 1508; Solvent Chem. Co., 2005 U.S. Dist. LEXIS 16573, at *230; United States v. E.I. Dupont Nemours & Co., 341 F. Supp. 2d 215 (W.D.N.Y. 2004) Gurley, 43 F.3d at 878.

d. PRPs challenging government expenses bear the burden of proving that response actions giving rise to costs were selected in manner inconsistent with the NCP. Hardage, 982 F.2d at 1491; United States v. Kramer, 913 F. Supp. 284 (D.N.J. 1995); United States v. Am. Cyanamid Co., 786 F.Supp. 152 (D.R.I. 1992), aff'd, 381 F.3d 6 (1st Cir. 2004). Response actions need not "advance" NCP goals to be recoverable. 150 Acres, 204 F.3d at 710. To show costs are "inconsistent," a party must demonstrate: (1) on the administrative record, that the decision to choose a particular remedy was arbitrary and capricious, Hardage, 982 F.2d at 1443; E.I. Dupont Nemours & Co., 341 F. Supp. 2d at 215.; and (2) that the cleanup, due to the variance from the NCP, resulted in demonstrably avoidable and unnecessary remediation costs. O'Neill v. Picillo, 682 F. Supp. 706 (D.R.I. 1988), aff'd 883 F.2d 176 (1989); United States v. Kramer, 913 F. Supp. 848, 866 (D.N.J. 1995); Miami-Dade, 345 F. Supp. 2d at 1334; Gurely, 317 F. Supp. 2d at 878; Domenic Lombard Realty, 334 F. Supp. 2d at 107. See 42 U.S.C. § 9613(j)(4). See Alex A. Beehler, Steve C. Gold, and Steven Novick, Contesting of CERCLA Costs by Responsible Parties -- There Is No Contest, 22 Env't L. Rep. (Envtl L. Inst.), Dec. 1992, at 10763. See also U.S. v. Vertac Chemical Corp., 966 F. Supp. 1491 (E.D. Ark. 1997), aff'd 247 F.3d 706 (8th Cir. 2001) cert. denied 534 US 1065, on remand 364 F. Supp. 2d. 941 (E.D. Ark. ).

e. Section 107(a)(4) allows the government to also recover interest on amounts recoverable, from the later of the date of demand or date of expenditure.

f. In addition to the recovery of costs, CERCLA § 113(g)(2) authorizes the imposition of a declaratory judgment as to liability for future response costs. See also City of Wichita Kan, v. Trs. of APCO Oil Corp., 306 F. Supp. 2d 1040 (D. Kan. 2003).

2. RECOVERABILITY OF PRE-CERCLA COSTS

a. Courts have held that CERCLA § 107 permits recoverability of costs incurred at a site prior to the enactment of CERCLA. See NEPACCO, 810 F.2d 726.

b. State was held not entitled to recover NRD when it did not show that the injuries occurred after effective date. CERCLA § 107(f)(1). Montana v. Atlantic Richfield Co., 266 F. Supp. 1238 (D. Mont. 2003).

3. PRIVATE COST RECOVERY ACTIONS

a A party seeking recovery of costs has the burden of proving the costs were "necessary" and incurred "consistent with" the NCP. Section 107(a)(4)(B). NEPACCO, 810 F.2d at 747. Key issues will be whether private remedy selected was protective of human health and the environment, a range of alternatives were legitimately considered, and there was adequate public participation. See Carson Harbor Village, 227 F.3d at 1203 (necessity judged against degree of threat to human health and environment); Young, 394 F.3d at 863-864; Regional Airport Authority v. Louisville, LFG, 460 F.3d 697 (6th Cir. 2006).

b. Response costs do not include tort damages for personal injury, property damage, or economic losses. Artesian Water Co. v. Gov't of New Castle, 659 F. Supp. 1269, 1285-86 (D. DE 1987), aff'd in part and remanded in part 851 F.2d 643 (3rd Cir. 1998). Private recovery actions also do not include "medical monitoring" for public health. Prisco, 902 F. Supp. at 410-11.

c. Key Tronic Corp. v. United States, 511 U.S. 809, 114 S. Ct. 1960, 128 L. Ed. 2d 797 (1994). In a 6-3 decision, the Court ruled that private parties cannot recover attorney's fees in a contribution action under CERCLA. However, attorney's fees incurred for legal work that "increased the probability of an effective cleanup" are recoverable. See also Franklin County Convention Facilities Auth. v. American Premier Underwriters, Inc., 240 F.3d 534 (6th Cir. 2001); Sealy Conn., Inc. v. Litton Inds., Inc., 93 F.Supp.2d 177 (D. Conn. 2000); Syms v. Olin Corp., 408 F.3d 95, 104 (2d Cir. May 18, 2005).

d. Response actions "carried out in compliance with the terms of an order issued by EPA pursuant to section 106 of CERCLA, or a consent decree entered into pursuant to section 122 of CERCLA will be considered 'consistent with the NCP.'" 40 C.F.R. § 300.700(c)(3)(ii).

e. Other response actions must be in "substantial compliance" with the NCP to allow for private cost recovery. 40 C.F.R. § 300.700(c)(5-6); Franklin County Convention Facilities Auth. v. Am. Premier Underwriters, Inc., 240 F.3d 534 (6th Cir. 2001); Union Pacific R.R. Co. v. Reilly Industries Inc., 215 F.3d 830, 834-39 (8th Cir. 2000) (holding plaintiff did not substantially comply with public participation requirements); Nutrasweet Co. v. X-L Engineering Co., 227 F.3d 776, 791 (7th Cir. 2000); Sherwin-Williams Co. v. ARTRA Group Inc., 125 F. Supp. 739 (D. Md. 2001); Young, 394 F.3d at 864-865; Regional Airport Authority, 460 F.3d 697 (6th Cir. 2006).

4. EXTRATERRITORIALITY

CERCLA is not extraterritorial. See Arc Ecology v. U.S. Dept of Air Force, 294 F. Supp. 2d 1152 (N.D. Cal 2003), aff'd 411 F.3d 1092 (9th Cir. 2005). cf Pakootas v. Teck Comminco Metals, 452 F.3d 1066 (9th Cir. 2006), cert. pending (although original source of hazardous substance was Canada, CERCLA jurisdiction covered subsequent release in U.S.).

G. DEFENSES TO LIABILITY - SECTION 107(b)

There are only three § 107(b) affirmative defenses available. See e.g., Betkoski, 99 F.3d at 514 (plaintiff entitled to summary judgment if defendants cannot establish one of three affirmative defenses); Town of Munster, Ind. v. Sherwin-Williams Co., 27 F.3d 1268, 1271 (7th Cir. 1994); Elementis Chems. Inc. v. T. H. Agric. & Nutrition, LLC, 373 F. Supp. 2d 257 (S.D.N.Y. Jan. 31, 2005). Note that Defendant must show that the release or threatened release was caused solely by one of the following:

1. ACT OF GOD

a. This term means an "unanticipated grave natural disaster or other natural phenomenon of an exceptional, inevitable, and irresistible character, the effects of which could not have been prevented or avoided by the exercise of due care or foresight." See United States v. M/V Santa Clara I, 887 F. Supp. 825 (D.S.C. 1995); United States v. Barrier Industry, 991 F. Supp. 678 (S.D.N.Y. 1998) (unprecedented cold spell not defense); U.S. v. W.R. Grace & Co., 429 F.3d 1224 (9th Cir. 2005) (mine owner not entitled to defense).

2. ACT OF WAR

a. An act of war connotes a sudden hostile action. The sinking of ships belonging to a belligerent nation by submarines of another nation, or torpedoing a destroyer, constitutes an act of war. See Stankus v. New York Life Insurance Co., 44 N.E. 2d 687 (Mass. 1942); Farbwerke Vormal Meister Lucius & Bruning v. Chemical Found., Inc., 283 U.S. 152 (1931) (capture of enemy-owned patent is an act of war); Hijo v. United States, 194 U.S. 315 (1904) (seizure of enemy vessel).

b. The leading CERCLA case on this issue is United States v. Shell Oil Co., 841 F. Supp. 962 (CD. Cal. 1993), aff'd 281 F.3d 812 (9th Cir 2002).

The court found that oil companies could not invoke "act of war" defense to escape liability for dumping hazardous substances which were disposed of following production of aviation fuel during World War II; further, the term "act of war" as used in CERCLA could not reasonably be construed to cover either government's wartime contracts to purchase aviation fuel or its regulation of oil companies' production of aviation fuel.

3. THIRD PARTY DEFENSE

a. This Section 107(b)(3) defense applies to an act or omission of a third party (other than an employee or agent of the defendant), or one whose act or omission occurs in connection with a contractual relationship, existing directly or indirectly, with the defendant. The third party defense requires proof that the acts or omissions of a third party were the sole cause of a release.

b. Current owner may rely on third party defense only if it can establish the elements of the "innocent landowner" defense set forth in Section 101(35). See, e.g., Foster v. United States, 922 F. Supp. 642, 653-57 (D.D.C. 1996).

c. Defendant must show that "(a) he exercised due care with respect to the hazardous substance concerned . . . and (b) he took precautions against foreseeable acts or omissions of any such third party and the consequences that could foreseeably result from such acts or omissions", CERCLA § 107(b)(3). See also Carter-Jones Lumber Co. v. Dixie Distribution Co., 166 F.3d 840 (6th Cir. 1999). Allowing migration of hazardous substances can be failure to exercise due care, even if the defendant did not bring hazardous substances to the site and was not negligent in contributing to the release. Franklin County Convention Facilities Auth. v. Am. Premier Underwriters, Inc., 240 F.3d 534 (6th Cir. 2001) but cf. 150 Acres, 204 F.3d at 706 (narrowly tailoring due care and precautions inquiry to particular circumstances of inheritance of property); Advanced Tech. Corp. v. Eliskim, Inc., 96 F. Supp.2d 715, 718 (N.D. 2000) (party that inadvertently exposes hazardous substances deposited by another may be innocent landowner).

d. Section 101(35)(a) defines the term "contractual relationship" to include "land contracts, deeds, or other instruments transferring title or possession." Compare State of New York v. Lashins Arcade Co., 91 F.3d 353, 360 (2d. Cir. 1996) (contract must relate to hazardous substances) to Lefebvre v. Central Maine Power Co., 7 F. Supp. 2d 64 n3 (D. Me. 1998) (rejecting Lashins)

4. PROCEDURES

a. Defendant must prove these defenses with a preponderance of evidence. Arguments that costs were inconsistent with the NCP relate to recoverability of particular costs but are not defenses to liability. United States v. Kramer, 757 F. Supp. 397, 436 (D.N.J. 1991); Illinois v. Grigoleit Co., 104 F. Supp. 2d 967 (CD. Ill. 2000); United States v. Cantrell, 92 F. Supp. 2d 704 (S.D. Ohio 2000). Arguments that individual costs are unreasonable, excessive, duplicative, improper, and/or not cost effective do not provide a defense as NCP is limited in its requirements. United States v. Kramer, 913 F. Supp. 284 (D.N.J. 1995).

b. Courts have held that the following are not adequate defenses: absence of causation, absence of negligence, United States laches, and "unclean hands." Equitable defenses not available. See Kramer, 757 F.Supp. 397; Kelley v. Thomas Solvent Co., 714 F. Supp. 1439, 1451-52 (W.D. Mich. 1989)(equitable defense of laches denied); United States v. Stringfellow, 661 F. Supp. 1053, 1062 (CD. Cal. 1987); United States v. Vineland Chem. Co, 692 F. Supp. 415, 423-24 (D.N.J. 1988) (striking estoppel defenses); California ex rel. Dept of Toxic v. Neville Chem., 358 F.3d 661, 672 (9th Cir. 2004) ("Every court of appeals that has considered the precise question whether §9607 permits equitable defenses has concluded that it does not, as the statutory defenses are exclusive").

c. Defendants bear the burden of proof as to all statutory exemptions. See Idaho v. Hanna Mining Co., 882 F.2d 392, 396 (9th Cir. 1989).

H. EXCLUSIONS

1. PETROLEUM

a. Crude oil, or any fraction thereof, natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas) are excluded from the definition of a "hazardous substance" under Section 101(14). See Wilshire Westwood Assoc. v. Atlantic Richfield Corp., 881 F.2d 801 (9th Cir. 1989) (petroleum exclusion covers leaded gasoline); Petrovic v. Amoco Oil Co., 200 F.3d 1140 (8th Cir. 1999).

b. Petroleum mixed with hazardous waste, such as used oil, is not exempt. EPA Final Rule, 50 Fed. Reg. 13456 (April 4, 1985); Wilshire, 881 F.2d at 805. See also Tosco Corp v. Koch Industries Inc., 216 F.3d 886, 892 (10th Cir. 2000) (petroleum mixed with hazardous substances in environmental media not within scope of exclusion); Southern Fuel Company Inc. v. Amoco Oil Co., Civil Action No. WN-92-3322, 1994 U.S. Dist. LEXIS 15769 at 13 (D. Md. 1994) (petroleum products that are contaminated with hazardous substances do not come under the ambit of CERCLA's petroleum exclusion); Cose v. Getty Oil Co., 4 F.3d 700 (9th Cir. 1993)(discarded crude oil tank bottoms are not entitled to exclusion); Esso Std. Oil, 2004 U.S. Dist. LEXIS 19954, at *29-34 (holding co-defendants didn't fall under petroleum exemption because they released crankcase oil which is contaminated by wear metals and fuel residue).

2. SECURITY INTEREST HOLDERS

a. Section 101(20)(A) excludes owners or operators "who, without participating in the management of a vessel or facility, holds indicia of ownership primarily to protect his security interest in the vessel or facility." A mortgagee or lender is generally not liable unless he participates in management of the facility (other than providing financial advice). 42 U.S.C. § 9601(F)(i)(20). See also In re Bergsoe Metal Corp., 910 F.2d 668 (9th Cir. 1990); Monarch Tile Incorporated v. City of Florence, 212 F.3d 1219, 1222 n. 2 (11th Cir. 2000).

b. This exemption was the subject of an EPA Rule: Lender Liability Under CERCLA, 57 Fed. Reg. 18344 (Apr. 29, 1992). This rule was vacated by the D.C. Court of Appeals on the ground that EPA lacked authority to promulgate it. Kelley v. Envtl. Protection Agency, 15 F.3d 100 (D.C. Cir. 1994), reh'g denied, 25 F.3d 1088, cert. denied, Am. Bankers Ass'n v. Kelly, 115 S.Ct. 900 (1995). The Rule was then reissued as policy: 57 Fed. Reg. 18, 344 (1992). Congress resolved conflicting court decisions in 1996 when it enacted the Asset Conservation, Lender Liability, and Deposit Insurance Protection Act of 1996, Pub. L. No. 104-208.

c. The Asset Conservation, Lender Liability, and Deposit Insurance Act of 1996, Pub. L. 104-208 added a new Section 101(20)(E)-(G) similar to the Lender Rule. The secured creditor defense protects lenders from liability if they did not participate in the management or exercise actual control over the facility. That Act also validates that portion of the Rule which addresses involuntary acquisition by government entities. See "EPA Policy on Interpreting CERCLA provisions addressing Lenders and Involuntary Acquisitions by Government Entities," 62 Fed. Reg. 36, 424 (July 7, 1997).

3. INNOCENT LANDOWNERS

a. Section 101(35) provides protection for defined "innocent landowners." The defense arises from the definition of "contracted relationship" for purposes of a Section 107(b)(3) third-party defense. See Westwood Pharms., Inc. v. National Fuel Gas Distribution Corp., 964 F.2d 85 (2d Cir. 1992). This defense applies if: (a) the defendant acquired real property after the disposal of hazardous substances, did not know, and had no reason to know about the hazardous substances on, in, or at the facility when it was acquired, Foster v. United States, 922 F. Supp. 642 (D.D.C. 1996); (b) the defendant is a government entity, who through its responsibilities acquired the facility, Hercules v. United States, 938 F.2d 276, 281 (D.C. Cir. 1991); or (c) the defendant acquired the facility by inheritance or bequest Snediker Developers L.P. v. Evans, 773 F. Supp. 984, 990 (E.D. Mich. 1991).

b. Pub. L. No. 107-118, 115 Stat. 2356 (2001) Small Business Liability Relief and Brownfields Revitalization Act amended Section 101(35) as follows: (1) it makes clear that the defense applies to easement holders and tenants of proper holders; (2) it requires that the landowner took reasonable steps to stop continuing releases and prevent future releases; and (3) it further defines what constitutes "all appropriate inquiry." See United States v. Domenic Lombardi Reality, Inc., 290 F. Supp. 2d 198, 209 (D.R.I. 2003)(holding the amendment was not retroactive); "G" St. Assocs. v. Rookwood Pigments NA, No. DKC 2002-1622, 2004 U.S. Dist. LEXIS 19178, at * 39 (D. Md. 2004)(relying on the assumption that the Brownfield Amendments are not retroactive in finding that the plaintiff had satisfied all necessary elements of the innocent landowner defense).

4. FEDERALLY PERMITTED RELEASES

a. Section 101(10) sets out numerous examples of releases of hazardous substances that are allowable under CERCLA because of established permits set out in various other environmental statutes such as CAA, CWA, Solid Waste Disposal Act, 42 U.S.C. § 6901 et seq., Safe Drinking Water Act, 42 U.S.C. § 300f et seq., Marine Protection, Research, and Sanctuaries Act, 33 U.S.C. § 1401 et seq., and Atomic Energy Act, 42 U.S.C. § 2011 et seq..

b. "[T]he exception for federally permitted release states an affirmative defense." United States v. Freter, 31 F.3d 783 (9th Cir. 1994). Accordingly, defendant has burden of going forward with sufficient evidence to raise the exception as an issue.

c. Section 107(j) applies.

5. COMMON CARRIERS

a. Section 101(20)(B) insulates shipper of hazardous substances from being "considered to have caused or contributed to any release during such transportation which resulted solely from circumstances or conditions beyond his control."

6. PESTICIDE

a. Section 107(i) exempts application of pesticide products registered under the Federal Insecticide, Fungicide Act. See Redwing Carriers v. Saraland Apartments, 875 F. Supp. 1545, 1564-65 (S.D. Ala. 1995).

b. Improper application of pesticide may result in CERCLA liability. United States v. Tropical Fruit, S.E., 96 F. Supp. 2d 71 (D.P.R. 2000).

7. CONSUMER PRODUCTS

a. Section 101(9) excludes from the definition of facility "any consumer product in consumer use." See discussion at E.2d (3)(g), supra.

b. Uniroyal Chem. v. Deltech Corp., 160 F.3d 238 (5th Cir. 1998). Court defined exception as "any goods normally used for personal, family, or household purposes, which was being used in that manner when the subject release occurred."

8. RECYCLERS

a. Superfund Recycling Equity Act (SREA), P.L. 106-113, 113 Stat. 1536 (Nov. 29, 1999) provides liability exemption to recyclers (scrap paper, plastic, glass, textiles, rubber (not whole tires) and some batteries meeting specified criteria. See CERCLA § 127. PRP has burden to demonstrate exemption applies.

b. SREA does not affect any concluded administrative or judicial action, or any pending judicial action initiated by the United States prior to enactment. See Morton Int'l v. A.E. Staley Mfg. Co., 106 F. Supp. 2d 737 (D.N.J. 200); United States v. Atlas Lederer Co., 97 F. Supp. 2d 830 (S.D. Ohio 2000); United States v. NL Indus., No. 91-CV-578-JLF, 2005 U.S. Dist. LEXIS 10713 (S.D. Ill. may 4, 2005). Courts have applied SREA retroactively to cases filed by private parties that were pending at the time of enactment. See Gould, Inc. v. A & M Battery & Tire Service, 232 F.3d 162 (3d Cir. 2000).

c. Any person who brings action in contribution against a recycler not liable under CERCLA shall pay for costs of defending the action. Section 127(j).

d. Section 114(c) exempts service station dealers who generate or transport recycled oil (if RCRA requirements are met). Service stations can still be liable as owners or operators.

9. DE M1CROMIS EXEMPTION SECTION 107(o)

a. Section 107(o) exempts generators and transporters where the amount of hazardous substances is quite small. Parties may be exempt at NPL sites if: hazardous substances are less than 110 gallons of liquid waste or 200 pounds of solid waste.

b. The treatment, disposal, or transport must have occurred before April 1, 2001.

c. The exemption does not apply if EPA finds the hazardous substances contributed significantly to the costs. This determination is not judicially reviewable.

d. In Section 107 cost recovery action by the government, the PRP has the burden of proof. In Section 113 private contribution action, plaintiff must prove defendant does not fall within this exemption.

10. MUNICIPAL SOLID WASTE EXEMPTION (MSW) SECTION 107(p)

a. Section 107(p) addresses municipal solid waste (MSW). MSW is household waste, collected and disposed of as part of normal collection service, containing typical amounts of hazardous substances (ie., food, household, and yard waste).

b. Owner/operator/lessees of residential property which dispose of MSW at NPL sites are exempt under Section 107(p). Transporters and municipalities are not exempt.

c. Small business or a tax exempt entity (under 100 employees) that generate MSW are exempt under Section 107(p).

d. The exemption does not apply if EPA finds the hazardous substances contributed significantly to the costs. This determination is not judicially reviewable.

11. CONTIGUOUS PROPERTY OWNERS SECTION 107(q)

a. Section 107(q) exempts contiguous property owners/operators that did not "cause, contribute, or consent to the release or threatened release."

b. In order to qualify for the defense, owner/operator must establish by preponderance of the evidence that it meets a series of statutory conditions, including that the owner is not "affiliated with any other person that is potentially liable," takes reasonable steps to deal with the contamination, provides full cooperation to authorities, and is in compliance with applicable law.

12. PROSPECTIVE PURCHASER SECTION 107(r)

a. Section 107(r) protects a buyer who would otherwise become liable as owner or operator solely because it purchased contaminated property. Buyer must meet 8 conditions (including not being a PRP).

b. Subject to certain conditions the new purchaser will not be liable except for a windfall lien that covers unreimbursed response costs. The lien shall not exceed the increase in fair market value of the property attributable to the response action.

13. BROWNFIELDS

a. Section 128(b) prohibits EPA from taking § 106(a) or § 107(a) enforcement action against a PRP conducting or completing a response action that is in compliance with the applicable state cleanup program.

b. Exceptions include requests by the State for EPA to act where EPA determines that there is an "imminent and substantial endangerment". This section applies only to response actions conducted after February 15, 2001.

14. RADIONUCLIDES SECTION 101(22)(c)

a. CERCLA exempts from release definition "source, by product, or special nuclear material". This exemption applies to releases covered under the Price Anderson Act, 42 USC § 2210, and releases arising out of remedial activities under the Uranium Mill Tailings Radiation Control Act, 42 USC § 7212(a) and 7942(a). RCRA excludes "source, special nuclear or by product material as defined by the Atomic Energy Act" from the definition of "solid waste". 42 USC § 6903(27). However all major radionuclides are hazardous air pollutants under CAA regulations, 40 CFR 61.01. See also Amoco Oil Co. v. Borden, Inc., 889 F.2d 664, 669 (5th Cir. 1990); United States v. United Nuclear Corp., 814 F. Supp. 1552 (D. N. Mex. 1992) (addressing EPA's remediation of leachate from radioactive mine tailings).

I. STANDARD OF REVIEW

1. ADEQUACY OF RESPONSE COSTS

a. In Section 107 actions for cost recovery, while the elements of liability must be established de novo, the standard for reviewing costs themselves is arbitrary and capricious. See Meyer, 889 F.2d at 1508; JG-24, 331 F. Supp. 2d at 65. Judicial review of any issue concerning the adequacy of any response action taken or ordered by the United States is limited to the administrative record, and the standard of review is arbitrary and capricious. Section 113(j)(1), (2).

b. Defendants have the burden of proving that specified costs claimed are inconsistent with the NCP. NEPACCO, 810 F.2d at 747-48; Gurley, 317 F. Supp. 2d at 878; JG-24, 331 F. Supp. 2d at 64-65.

c. Once it is shown that selection of response action was not arbitrary, capricious or inconsistent with the NCP, the United States is entitled to all costs (not just all reasonable costs) incurred in implementing response action. See Meyer, 889 F.2d 1497, and Hardage, 982 F.2d 1491.

J. STATUTE OF LIMITATIONS

1. Under Section 113(g)(2)(A), which discusses removal actions, the United States must bring an action within three years after completion of the removal action (unless remedial action has begun by then). See United States v. Chromatex, Inc., 832 F. Supp. 900 (M.D. Pa. 1994); United States v. Cantrell, 92 F.Supp.2d 704, 716 (S.D. Ohio 2000) (completion of final site investigation rather than completion of construction of clay cap would be completion of removal action for limitations purposes). In Colorado v. Sunoco, 337 F.3d 1233, 1242 (10th Cir. 2003), the Court of Appeals held that in a site where there were multiple removal and remedial activity, "the key issue in determining the timeliness of Colorado's action is when 'physical on-site construction of the [first] remedial action' occurred at the site." See California Dept. Of Toxic Services v. Neville Chemical Co., 213 F. Supp. 1115 (2003) aff'd 358 F.3d 661 (9th Cir. 2004), cert. denied 125 S.Ct. 303 (excavating wells not "initiation of physical on-site construction of the remedial action.").

2. Under Section 113(g)(2)(B), which discusses remedial actions, the United States must bring an action within 6 years after initiation of physical on site construction (removals included if the remedial action was initiated within three years of completion of removal). See United States v. Navistar International, 152 F.3d 702 (7th Cir. 1998); Findett, 220 F.3d at 848. See also California v. Neville Chem. Co., 358 F.3d 661, 671 (9th Cir 2004)(holding that the statute of limitations cannot begin to run until a final remedial action plan has been adopted); Schaefer v. Town of Victor, 57 F.3d 188 (2nd Cir. 2006) (plaintiff barred).

3. CERCLA authorizes subsequent actions for later-incurred response costs if the initial action is timely filed. See Section 113(g)(2) (statute of limitations for initial actions, authorizing declaratory judgments for future costs); Findett, 220 F.3d at 845.

K. SECTION 107 COST RECOVERY ACTIONS DO NOT ALLOW FOR TRIALS WITH JURIES

1. It is well settled that a CERCLA cost recovery action, an action in equity for restitution, does not provide a right to jury trial. United States v. Northeastern Pharm. & Chem. Co., Inc., 810 F.2d 726, 749 (8th Cir. 1986), cert. denied, 484 U.S. 1987; United States v. Vertac, 966 F. Supp. 1491 (E.D. Ark. 1997); United States v. Mex. Feed & Seed Co., Inc., 729 F. Supp. 1250, 1254 (E.D. Mo. 1990); Miami-Dade County v. United States, 245 F. Supp. 2d 1319, 1324 (S.D. Fla. 2004)(rejecting county's demand for jury trial in CERCLA action). There has been one reported jury trial in a case brought by the United States. United States v. Vertac, Case No. LR-C-80-C-109, 1993 U.S. Dist. LEXIS 19311 (E.D. Ark. 1993) (advisory jury returned verdict in favor of United States against Uniroyal Chemical Ltd.).

2. In natural resource damages cases, however, several courts have held that there is a right to jury trial. See In re Acushnet River and New Bedford Harbor, 712 F. Supp. 994, 1000 (D. Mass. 1989). But See GE v. United States Envt'l Protection Agency, 18 F. Supp. 2d 138, 144 (D. Mass. 1998).

L. CERCLA SETTLEMENTS (SECTION 122)

1. STATUTORY GOAL

a. A fundamental goal of CERCLA is to facilitate voluntary settlements in order to expedite remedial actions and minimize litigation. The specific settlement provisions found in Section 122 of CERCLA were added in 1986 in an effort by Congress to eliminate impediments to settlement of claims relating to the cleanup of Superfund sites.

2. DISCRETIONARY AUTHORITY

a. Section 122(a) affords the United States the discretion to enter into an agreement with any person to perform response action at a site.

b. Scope of Attorney General's authority addressed in United States v. Hercules, Inc., 961 F.2d 796 (8th Cir 1992)(rejecting defendants assertion that Section 122(h) limits AG's settlement authority). See also United States v. ASARCO, Inc., 814 F. Supp. 951, 957 (D. Colo. 1993).

3. PROCEDURE AND SCOPE

a. Section 122 authorizes EPA and DOJ to conduct negotiations under specified procedures, defines the scope of covenants not to sue, and provides for public comment on proposed settlements. Section 122(d), (e), (f).

b. Section 122(e) provides moratorium following PRP notification under § 122(a). Absent a significant public health or environment threat, EPA must want at least 90 days from commencing RI/FS and 120 days for any cleanup or remedial action.

4. CONSENT DECREE

a. Section 122(d) requires that settlements involving implementation of remedial actions be embodied in judicial consent decrees, subject to court approval. Two standard consent decrees are for PRPs to perform the site work remedy as set forth in the Record of Decision or to pay past EPA expenses.

b. Model Work Consent Decree. Remedial Design/Remedial Action Consent Decree model has been revised and was published at 63 Fed. Reg. 9541 (Feb. 25, 1998). It is also on the Internet at (http://es.epa.gov/oeca/osre/950713.htnil). Many of the provisions are nationally consistent and always included.

c. Reopeners. CERCLA § 122(f)(6)(i) provides that where settlements contain a covenant not to sue, the settlement "shall include an exception to the covenant that allows the President to sue such person concerning future liability resulting from the release or threatened release that is the subject of the covenant where such liability arises out of conditions which are unknown at the time ... that remedial action has been completed at the facility concerned."

5. DE M1NIMIS SETTLEMENT

a. Section 122(g) authorizes administrative and judicial de minimis settlements when the claim involves a minor portion of the response costs at the facility and, in EPA's judgment, the amount and toxicity of hazardous substances contributed by the settling party are minimal in comparison to other hazardous substances at the facility. Cannons, 720 F. Supp. at 1027.

b. This type of settlement is appropriate for small volume generators (usually less than 1%) whose waste contains no greater toxicity than anyone else.

c. Settlors must agree to settle their liability for a share of the total costs and "cash-out." The share usually includes a premium. United States v. Cannons Eng'g Corp., 899 F.2d 79 (1st Cir. 1990) (upheld EPA determination, including premium).

d. Section 122(g)(7) was amended in 2002 to codify DOJ and EPA practice of settling with PRPs who have a limited ability to pay. In addition, § 122(g)(8) was added requiring that settlements under § 122(g) require that the PRP waives all claims (including contribution) against other PRPs ("unless the President determines that requiring a waiver would be unjust."). Model CERCLA deminimis Consent Decree and Administrative Order on Consent is at 60 Fed. Reg. 62, 849 (Dec. 7, 1995).

6. CONTRIBUTION PROTECTION

a. Under Section 113(f)(2), a person who has resolved its liability to the United States is protected against third party contribution claims for matters addressed by the settlement.

b. Most courts have rejected non-settlors efforts to limit the intended effect of CERCLA's contribution protection provisions. See United States v. SEPTA, 235 F.3d 817, 823 (3d Cir. 2000) (rejected attempt to limit contribution protection to response actions settlor would perform, which would have reserved contribution claim for work to be performed by non-settlor); United States v. Cannons Eng'g Corp., 899 F.2d 79 (1st Cir. 1990) (rejected attempt to end run contribution protection through assertion of a common law indemnification claim); Dravo v. Zuber, 13 F.2d 1222 (8th Cir. 1994) (rejected challenge to de minimis settlement that provided contribution protection against the non-settlors' costs); United States v. ASARCO, Inc., 814 F. Supp. 951, 956 (D. Colo. 1993) (a liable party can not assert an independent cost recovery claim which negates another liable party's contribution protection); Avnet v. Allied-Signal, 825 F. Supp. 1132, 1141 (D.R.I. 1992) (contribution protection provided against costs incurred in responding to EPA 106 Orders); Transtech Indust. v. A & Z Septic-Clean, 798 F. Supp. 1079 (D.N.J. 1992) (same ruling as Avnet). See also Akzo Coating, Inc. v. Aigner Corp., 30 F.3d 761 (7th Cir. 1994) (CERCLA does not afford contribution protection where matter is "not addressed" in settlement); United States v. Acorn Eng'g Co., 221 F.R.D. 530 (CD. Cal. 2004)(holding that non-settling PRPs did not have a right to intervene in action to approve consent decree). But see Waste Mgmtt v. City of York, (E.D. Pa. 1995, )(non de minimis AOC under 122(h) - contribution protection limited to costs incurred by U.S.).

c. Under Section 113(f)(2), liability of non-settling parties is reduced by the amount of any settlement with the United States. The House report indicates that non-settling parties will "remain potentially liable for the amounts not received by the government through settlement," H.R. Rep. No. 253, Part 3, 99th Cong., 1st Sess., 19 (1995). UCFA does not apply. Cannons Engineering, 720 F. Supp at 1049, n.26.

7. MIXED FUNDING

a. Section 122(b)(1) allows EPA to reimburse settling parties for this work. The purpose of this mixed funding authority is to "mix funds from Superfund with private party monies, where appropriate ..., so as to enable response actions by the settling parties to proceed as quickly as possible." H.Rep. No. 253, 99th Cong. 2d Sess. 101 (1985) reprinted in 1980 U.S.C.C.A.N 2835, 2883.

b. EPA may choose, for example, to settle for less than 100% when an "orphan share" exists at the site or defendants do not have the financial ability to pay.

c. Pre-authorization agreements from EPA allow PRP reimbursement from the Superfund.

8. NON-BINDING ALLOCATIONS OF RESPONSIBILITY ("NBAR")

a. The NBAR process is encouraged under § 122(e)(3). More often, PRPs decide their own internal allocation through PRP committees which are usually formed to negotiate with the United States.

b. Alternative Dispute Resolution (ADR) has significantly increased in CERCLA settlements.

9. RELEASES FROM LIABILITY/COVENANT NOT TO SUE

a. Section 122(f)(1) authorizes release from liability if (1) it is in the "public interest," (2) it would expedite the response action, (3) the PRPs are in full compliance with the consent decree, and (4) the response action has been approved by EPA.

b. All covenants (except special covenants and de minimis settlements) are subject to a reopener clause that allows for future liability for unforseen and unknown conditions that arise following completion of the remedial action Section 122(f)(6)(A).

c. The AG can also grant a covenant not to sue to future owners with a "prospective purchaser agreement". See 60 Fed. Reg. 34, 792 (July 3, 1995).

10. STANDARD OF REVIEW FOR CONSENT DECREES

a. Remedial Action. CERCLA § 122(d) specifies the procedures applicable where "the President enters into an agreement under this section with any potentially responsible party with respect to remedial action under Section 9606 of this title." Section 122(d)(1)(A).

b. Cost Recovery. Settlement of cost recovery claims under CERCLA § 107 does not invoke the Section 122 procedures, except insofar as cost claims are included in Section 106 remedial action settlements, or the Section 107 settlement includes a covenant not to sue for Section 106 claims.

c. Public Comment. CERCLA § 122 settlements are subject to public comment and notice of lodging of a consent decree is provided by Federal Register Notice. The normal comment period is 30 days. Section 122(d)(2)(B) provides as follows:

The Attorney General shall provide an opportunity to persons who are not named as parties to the action to comment on the proposed judgment before its entry by the court as a final judgment. The Attorney General shall consider, and file with the court, any written comments, views, or allegations relating to the proposed judgment. The Attorney General may withdraw or withhold its consent to the proposed judgment if the comments, views, and allegations concerning the judgment disclose facts or considerations which indicate that the proposed judgment is inappropriate, improper, or inadequate.

d. The Attorney General moves for entry of the decree following review of any comments received. Most consent decrees are entered without significant delays in proceedings after close of the comment period. DOJ presents all comments to the court and non-parties may seek to intervene.

e. There is a strong presumption of validity favoring consent decrees, given the Attorney General's inherent discretion to settle litigation and EPA's technical expertise. See, e.g., United States v. Hooker Chems. & Plastics Corp., 540 F. Supp. 1067, 1080 (W.D.N.Y. 1982), aff'd by 749 F.2d 968 (2d Cir. 1984); United States v. Chevron U.S.A., Inc., No. C 03-4650 CRB, 2005 U.S. Dist. LEXIS 13291, at *48 (N.D. Cal. June 24, 2005). The trial court has the discretion to deny intervention, United States v. Tex. E. Transmission Corp., 923 F.2d 410 (5th Cir. 1991). The court has discretion whether or not to conduct a hearing. Hooker, supra; United States v. Seymour Recycling Corp., 554 F. Supp. 1334 (S.D.Ind. 1982).

f. Three-Part Test under Judicial Review. There is a three-part standard for review of CERCLA consent decrees: (I) fairness, (2) reasonableness, and (3) consistency with statutory goals. H.R. Rep. No. 253, Part 3, 99th Cong., 1st Sess. 19 (1985). See United States v. Charles George Trucking Co., 34 F.3d 1081 (1st Cir. 1994); United States v. Cannons Engineering Corp., 899 F.2d 79, 85 (1st Cir. 1990); United States v. ASARCO, Inc., supra, 814 F. Supp. at 954; United States v. Akzo Coatings of America, Inc., 949 F.2d 1409, 1435 (6th Cir. 1991). Although the court is not a rubber stamp, review is deferential. United States v. Hooker Chem. & Plastics Corp., 540 F. Supp. 1067 (W.D.N.Y. 1982), aff'd, 749 F.2d 968 (2d Cir. 1984); United States v. SEPTA, 235 F.3d 817, 822 (3rd Cir. 2000); United States v. Dibiase, 45 F.3d 541 (1st Cir. 1995). Courts need not conduct an evidentiary hearing in evaluating CERCLA consent decrees. United States v. CUCCO, 204 F.3d 275, 278-79 (1st Cir. 2000); 55 Motor Ave. Co. v. Liberty Indus. Finishing Corp., 332 F. Supp. 2d 525, 530 (E.D.N.Y. 2004); United States v. Fort James Operating Co., 313 F. Supp. 2d 902, 907 (E.D. Wis. 2004).

M. CONTRIBUTION SUITS

1. Section 113(f) (added by SARA) establishes that a PRP has a right to seek contribution "during or after" a Section 106/107 enforcement action from any other person that is liable under Section 107, and specifically provides that "in resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate."

a. A number of court have used the so-called "Gore factors" in allocating response costs. See Kalamazoo River Study Group v. Rockwell Int'l, 107 F. Supp. 2d 817 (W.D. Mich. 2000); Bancamerica Commercial Corp. v. Trinity Indust., Inc., 900 F. Supp. 1427, 1472 (D. Kan 1995). These factors to be considered in equitable were originally proposed by then - congressman Gore as an amendment to the 1980 CERCLA bill which did not pass. These factors are often summarized as follows:

(1) the ability of the parties to demonstrate that their contributions to a discharge, release, or disposal of a hazardous waste can be distinguished;

(2) the amount of the hazardous waste involved;

(2) the degree of toxicity of the hazardous waste involved;

(4) the degree of involvement by the parties in the generation, transportation, treatment, storage, or disposal of the hazardous waste;

(5) the degree of care exercised by the parties with respect to the hazardous waste concerned, taking into account the characteristics of such hazardous waste; and

(6) the degree of cooperation by the parties with federal, state, or local officials to prevent any harm to the public health or the environment.

b. The Gore factors are neither mandatory nor exclusive of other considerations when allocating liability. See Boeing Co. v. Cascade Corp., 207 F.3d 1177 (9th Cir. 2000) (discretion to select factors); Westerns Props Serv. Corp. v. Shell Oil, 358 F.3d 678, 690 (9th Cir. 2004)(same); Tosco Corp. v. Koch Indust., Inc., 216 F.3d 886, 894-95 (10th Cir. 2000) (years of operation); B.F. Goodrich Co. v. Murtha, 958 F.2d 1192 (2d Cir. 1992)(financial resources of the parties involved); United States v. R. W. Meyer, Inc., 932 F.2d at 576-77; Foster v. United States, 130 F. Supp. 2d 68, (D.D.C. 2001) (whether current owner contributed to wastes); Anscutz Mining Corp. v. NL Indust., Inc., 891 F. Supp 492 (E.D. Mo. 1995); Weyerhauser Co. v. Koppers Co., 771 F. Supp. 1420 (D. Md. 1991)(benefits received by the parties from the activities leading to the release); Amoco Oil Co. v. Borden, Inc., 889 F.2d 664, 673 (5th Cir. 1989) (circumstances involved in the property's conveyance, including the price paid and discounts granted); New York v. Westwood-Squibb Pharm. Co., No. 90-CV-1324C, 2004 U.S. Dist. LEXIS 13841, at *64-70 (W.D.N.Y. 2004)(circumstances of property conveyance). Courts distinguish factors that affect allocation from those that determine liability in the first instance. See Kalamazoo River Study Group v. Menasha Corp., 228 F.3d 648 (6th Cir. 2000) (causation not an element of liability though it may bear on allocations); Boeing Co. v. Cascade Corp., 207 F.3d 1177 (defendant may owe contribution even if plaintiff would have incurred same costs had defendant disposed of no hazardous substances at site); Cadillac Fairview v. Dow Chemical, 299 F.3d 1019 (9th Cir. 2002) (U.S. pay 100% costs for World War II activity because of indemnification agreement).

2. A PRP's claim against liable parties liable "for an appropriate division of the payment one of them has been compelled to make that PRP is by definition making a [Section 113(f)] claim for contribution." Accordingly, a PRP is not entitled to a finding of joint and several liability against another PRP in a Section 113 contribution action. Bedford Affiliates v. Sills, 156 F.3d 416, 424 (2d. Cir. 1998); New Castle County v. Haliburton NUS Corp., 111 F.3d 1116, (3d Cir. May 2, 1997); Control Data Corp. v. S.C.S.C. Corp., 53 F.3d 930, 935 (8th Cir. 1995); Morrison Enters, v. McShares, Inc., 302 F.3d 1127, 1135 (10th Cir. 2002); United States v. Colo. & Eastern R.R., 50 F.3d 1530, 1534-36 (10th Cir. 1995) ("CERRC II"); United Techs. Corp. v. Browning-Ferris Industries, 33 F.3d 96, 103 (1st Cir. 1994), cert. denied, 115 S. Ct. 1176 (1995); Akzo Coatings, Inc. v. Aigner Corp., 30 F.3d 761, 764 (7th Cir. 1994); In re Dant & Russell, Inc., 951 F.2d 246, 249 (9th Cir. 1991); Amoco Oil Co. v. Borden, Inc., 889 F.2d 664, 672 (5th Cir. 1989); Smith Land & Improvement Corp. v. Celotex Corp., 851 F.2d 86, 88-89 (3d Cir. 1988), cert. denied, 488 U.S. 1029 (1989).

3. In December 2004, the Supreme Court in Cooper Indust., Inc. v. Aviall Servs., Inc., 543 U.S. 157 (2004) held that a private party not sued under CERCLA § 106 or § 107(a) could not bring a contribution action under Section 113 (f)(1). The Court expressly held that "Section 113 provides two express avenues for contribution Section 113(f)(1) ('during or following' specified civil actions) and Section 113 (f)(3)(B) after an administrative or judicially approved settlement that resolves liability to the United States or a State." The Court, however, did not resolve a number of collateral questions, including whether Aviall has a direct or an implied right to contribution under Section 107. Since Aviall there has been significant litigation and a circuit split. See, Atlantic Research Corporation v. US, 459 F.3d 827 (8th Cir. 2006); Consolidated Edison, New York v. UGI Utilities Inc., 423 F.3d 90 (2nd Cir. 2005), E.I. Dupont De Nemours and Co. v. U.S, 460 F.3d 515 (3rd Cir. 2006). Atlantic Research was argued to the Supreme Court in early 2007.

4. The law is unsettled on how to allocate costs in a contribution suit when there have been prior settlements. The National Conference of Commissioners of Uniform State Laws has developed two model statutes that address the situation in which claimant settles with one of several joint tortfeasors: Uniform Contribution Among Joint Tortfeasors (UCATA) in 1955 and the Uniform Comparative Fault Act (UCFA) in 1977. UCATA has been adopted by 19 states and UCFA by states. State law, however, does not control pursuant to Section 113 (4)(3)(C). When a litigant has settled with another party, the UCFA would reduce the contribution share of the remaining defendants by the percentage of total fault of the settlors. UCATA, on the other hand, only credits the amount of money paid in the settlement. Some courts have applied the UCFA profata share credit rule which reduces the non-settlors' liability by the settlors' equitable share of liability. Other courts advocated use of the UCATA pro tanto credit rule which reduces the non-settlors' liability by the dollar amount specified in the settlement. The Supreme Court in McDermott applied UCFA in an admiralty proceeding. The Seventh Circuit, however, held that McDermott's approach was not appropriate in CERCLA cases and applied UCATA instead of UCFA: Akzo Nobel Coatings, Inc. v. Aigner Corp., 197 F.3d 302 (7th Cir. 1999). See also, SCA Services, 827 F. Supp. 526, 532 (N.D. Ind. 1993); Douglas County, Neb. v. Gould, Inc., No. CV. 90-0-395, (D. Neb. Mar. 24, 1994); Barton Solvents, Inc., 834 F. Supp. 342, 345-46 (D. Kan. 1993); Am. Cyanamid Co. v. King Indust, Inc., 814 F. Supp. 215, 217 (D. R.I. 1993); Allied Corp. v. Acme Solvent Reclaiming, Inc., 771 F. Supp. 219, 223 (N.D. Ill. 1990): Applying UCFA are Comerica Bank-Detroit, 769 F. Supp. 1408, 1413 (E.D. Mich. 1991); United States v. Western Processing Co., 756 F. Supp. 1424, 1429 (W.D. Wash. 1990); Lyncott Corp. v. Chem. Waste Mgmt, Inc., 690 F. Supp. 1409, 1418-19 (E.D. Pa. 1988). But see Am. Cyanamid Co. v. Capuano, 381 F.3d 6, 21 (1st Cir. 2004)(refusing to choose one approach over the other and deferring to the district court's discretion to allocate response costs under CERCLA).

6. District courts are split as to whether a right to a jury trial exists in Section 113(f) contribution cases. Compare, American Cyanamid Co. v. King Industries, Inc., 814 F. Supp. 209, 213-215(D.R.I. 1993) and Hatco Corp. v. W.R. Grace & Co., 59 F.3d 400 (3d Cir. 1995) (no jury trial right) with United States v. Shaner, Civ. A. No. 85-1375, 1992 WL 154618 (E.D. Pa. 1992) (right to jury trial exists). Fed. R. Civ. Pro. 39(c) also applies.

7. CERCLA § 113(g)(3) provides a three-year statute of limitations for contribution suits, after a party's liability is determined by judgment, administrative order, or judicially approved settlement. Courts have taken various approaches to determining statute of limitations absent any of these events. See Gerahghty & Miller, 234 F.3d at 924; Sun Company Inc. v. Browning-Ferris Inc., 124 F.3d 1187, 1192 (10th Cir. 1997); Sherwin-Williams, 125 F. Supp. 2d at 745-56; Reichhold Chemicals Inc., v. Textron Inc., 888 F. Supp. 1116 (N.D. Fla. 1995).

N. NATURAL RESOURCES DAMAGES n12

n12 Similar Federal claims for natural resource damages exist under Section 1002(b)(2)(A) of the Oil Pollution Act of 1990, 33 U.S.C. § 2710(b)(2)(A); Section 311(f)(4) & (5) of the Clean Water Act, 33 U.S.C. § 1321(f)(4) & (5); Section 312 of the Marine Protection, Research, and Sanctuaries Act, 16 U.S.C. § 1443; and the Park System Resources Protection Act, 16 U.S.C. § 19.

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

1. A natural resource damages claim is a statutory cause of action arising from: "[a] injury to, destruction of, or loss of [b] natural resources [c] resulting from such a release [of a hazardous substance]." CERCLA § 107(a)(4)(c). In New Mexico v. General Electric Co., 467 F.3d 1223 (10th Cir. 2006), (barred use of state common law theories to obtain unrestricted money damages).

2. Natural resources: CERCLA § 101(16) defines "natural resources" as "land, fish, wildlife, biota, air, water, ground water, drinking water supplies, and other such resources belonging to, managed by, held in trust by, appertaining to, or otherwise controlled by the United States . . ., any State or local government, any foreign government, any Indian tribe, or, if such resources are subject to a trust restriction on alienation, any member of an Indian tribe."

a. "Customarily, natural resource damages are viewed as the difference between the natural resource in its pristine condition and the natural resource after the cleanup, together with the lost use value and the costs of assessment. As a residue of the cleanup action, in effect, [damages] are thus not generally settled prior to a cleanup settlement." In re Acushnet River & New Bedford Harbor, 712 F. Supp. 1019, 1035 (D. Mass. 1989) (AVX litigation).

b. Congress deliberately excluded "purely private" property from the definition of natural resources. Ohio v. Dept of Interior, 880 F.2d 432, 460 (DC. Cir. 1989). However, resources need not be owned by the government to be CERCLA "natural resources." Id. "Rather, a substantial degree of government regulation, management or other form of control over property would be sufficient" to make the CERCLA natural resource damages provisions apply. Id. at 461.

3. Natural resource damages claims may be brought exclusively by State or Federal government trustees, or by designated trustees of Indian tribes. CERCLA § 107(a)(4)(C). EPA is not a trustee. Private entities may not bring CERCLA natural resource damage claims. Artesian Water Co. v. New Castle County, 851 F.2d 643, 649 (3d Cir. 1988); Nat'l Ass'n of Mfrs v. United States, 134 F.3d 1095 (D.C. Cir. 1998).

4. Recovery of natural resource action costs can only be used to restore, replace, or acquire equivalent natural resources. CERCLA § 107(f)(1).

5. NRD Statute of Limitations

a. Under Section 113(g)(1), which discusses natural resource damages actions, the United States must bring an action within three years after the later of the following:

(1) the date of the discovery of the loss and its connection with the release in question, and

(2) the promulgation of Department of the Interior regulations. The D.C. Court of Appeals held that the promulgation of the last DOI Regulation was on March 1987. Kennecott v. Dep't of the Interior, 88 F.3d 1191, 1213-13 (D.C. Cir. 1996). See also United States v. Montrose Chem. Corp., 104 F.3d 1507 (9th Cir. 1997).

b. If claim arises at a site which is listed on the NPL or which RA has been initiated, SOL is 3 years from completion of remedy.

6. NRD Assessments

a. CERCLA § 301(c) required the President to promulgate two types of regulations for assessment of NRD: (A) simplified procedures and (B) protocols for full assessments. DOI promulgated the Type A Rule which uses a computer model to calculate damages in 1987, at 43 C.F.R. §§ 11.40 -.41. DOI also promulgated the Type B Rule, 43 C.F.R. 11.60 - .84, amended at 53 Fed. Reg. 5166 (Feb. 22, 1988). In 1989, the D.C. Court of Appeals remanded both the Type A and B Rules for revisions consistent with its opinion. State of Ohio v. Dep't of the Interior, 880 F.2d 432; State of Colorado v. Dep't of the Interior, 880 F.2d 481 (D.C. Cir. 1989).

b. DOI promulgated revised Type B Rule on March 25, 1994, 59 Fed. Reg. 14262. n13 The DOI regulations were substantially upheld in Kennecott Corp. v. Dep't of the Interior, 88 F.3d 1191 (D.C. Cir. 1996). Type A procedures were upheld in Nat'l Ass'n of Mfrs. v. United States Dep't of the Interior, 134 F.3d 1095 (D.C. Cir. 1998).

c. The DOI NRDA regulations define "injury" as "a measurable adverse change, either long or short-term, in the chemical or physical quality or the viability of a natural resource." 43 C.F.R. §§ 11.14(v). The regulations allow proof of injury by evidence either of an adverse change in a given natural resource or of the exceedance of a regulatory standard, such as water quality standards, see 43 C.F.R. §§ 11.62, whereby the exceedance of such a standard is per se injury. Nonetheless, natural