Amicus Curiae Brief — Meghrig v. KFC Western, Inc.

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No. 95-83

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| NOV 9 1985

In the Supreme Court

of the

United States

OCTOBER TERM, 1995

Alan Meghrig and Margaret Meghrig,

Petitioners,

vs.

KFC Western, Inc.,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

BRIEF FOR THE WESTERN STATES

PETROLEUM ASSOCIATION AS AMICUS

CURIAE IN SUPPORT OF PETITIONERS

Donna R. Black

Counsel of Record

MANATT, PHELPS & PHILLIPS

- 11355 West Olympic Boulevard

Los Angeles, California 90064

(310) 312-4000

Counsel for Amicus Curiae

Western States Petroleum Association

wa ie - elee re

i

TABLE OF CONTENTS

INTEREST OF THE AMICUS CURIAE

THE LIKELY IMPACT OF THE EXPANSION

OF RCRA CITIZEN SUIT REMEDIES

B. _ Effect of the Decision Below

1. The Creation of a New

CONCLUSION

TT

If Allowed to Stand, the

Decision Below will

Significantly Impact the

Caseload of the Federal

District Courts ...........

iii

TABLE OF AUTHORITIES

Cases

Key Tronic Corp. v. United States, U.S. ,

114S. Ct. 1960 (1994) .......... 8, 10, 16

Middlesex County Sewerage Authority v.

National Sea Clammers Assn. ;

EE A eee 20

Washington State Dept. of Transportation v. Washington

Natural Gas Co., 51 F.3d 1489

DD wees We dbeoeSeccvcees 10

City of Chicago v. Environmental Defense Fund,

__ US. ___, 114 S.Ct. 1588 (1994) ....... 6

Wilshire Westwood Assoc. v. Atlantic Richfield Corp.,

881 F.2d 801 (9th Cir. 1989) .......... 10

Statutes

DE Sevee sls bbeccectseeses 12

RINE eke Ce ecoeseiees 7, 8, 13, 16, 18

i Ai 1 tik eign c ea 00s eee eee e 7

ES Tee eee ee 11

DD coc ce cre eacccceccs 4, 10

EES ee 9, 15, 19

STE 10, 15

iv

Miscellaneous

$36 Come. Res. SONGS CIGFED. cw cc ces 20

126 Cong. Rec. H11793-11802 (Dec. 3, 1980) .. 11, 18

130 Cong. Rec. $2028, S2080 (daily ed. Feb. 29, 1984)

(comments of Sen. Durenberger) ............. 12

132 Cong. Rec. $14931-32 (daily ed. Oct. 3, 1986) . 19

40 C.F.R. §§ 300.400 - 300.440 .......... 10, 15

H.R. Rep. No. 1491, 94 Cong., 2d Sess. reprinted in

1976 Oil and Hazardous Substances Liability:

Hearings on H.R. 29& H.R. 85 ............ 11

Inside EPA Weekly Report at 1-2 (May 12, 1995) .. 20

Ohio Admin. Code § 1301:7-7-13 ............ 13

Pub. L. No. 86-616, 98 Stat. 3221-93 ....... 11, 18

Third Quarter Oil Cleanups, Releases Nearly Equal,

26 Env’t Rep. 709 (Aug. 11, 1995) ......... 3, 19

U.S. Code Cong. & Admin. News at 1641-42 ..... 7

53 Fed. Reg. 37083 (Sept. 23, 1988) ........... 3

4 W. Rodgers, Environmental Law § 7.6(b) .... 8, 13

96th Cong., Ist Sess. 177 (1979) ............ ll

S. Cooke, The Law of Hazardous Waste ...... passim

No. 95-83

In the Supreme Court

of the

United States

OCTOBER TERM, 1995

Alan Meghrig and Margaret Meghrig,

Petitioners,

VS.

KFC Western, Inc.,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

BRIEF FOR THE WESTERN STATES

PETROLEUM ASSOCIATION AS AMICUS

CURIAE IN SUPPORT OF PETITIONERS'

INTEREST OF THE AMICUS CURIAE

The Western States Petroleum Association ("WSPA")

is an association of 31 companies that together account for

the bulk of the petroleum exploration, production, refining,

transportation and marketing activities in six western states --

Arizona, California, Hawaii, Nevada, Oregon, and

' Written consent to the filing of this amicus brief has been

obtained from both parties and separately filed with the Court.

2

Washington.? Unlike petitioners, who owned only one

commercial property upon which a gas station was formerly

located, WSPA’s member companies own and have owned

thousands of such properties. WSPA is thus well positioned

to discuss the important questions raised by the Ninth

Circuit’s decision and the significant impact of that decision

on affected parties as well as on the workload of the district

courts.

If not reviewed and reversed by this Court, the Ninth

Circuit’s decision will, for the first time, allow petroleum

contamination cleanup cost recovery actions to proceed in

federal court. Congress expressly excluded petroleum

product cleanups from the reach of the Comprehensive

Environmental Response, Compensation and Liability Act

("CERCLA") and limited the remedies provided by the

citizen suit provisions of the Resource Conservation and

Recovery Act ("RCRA") to injunctive relief. As a result,

actions to recover costs for cleaning up property contaminated

by petroleum products have been brought exclusively in state

courts pursuant to various statutory and common law

theories.

THE LIKELY IMPACT OF THE EXPANSION

OF RCRA CITIZEN SUIT REMEDIES

The potential impact of the Ninth Circuit’s expansion

of RCRA citizen suit remedies on federal district courts is

Staggering. A few years ago, the United States

Environmental Protection Agency ("EPA") estimated that

over two million underground storage tanks containing

? WSPA’s members also account for the majority of these

activities nationally, although WSPA focuses on activities in the six

western states listed above.

3

petroleum products were in operation in the United States.

53 Fed. Reg. 37083 (Sept. 23, 1988). These tanks were

located at over 700,000 facilities nationwide. Jd. Based

upon a study of over 10,000 tanks, EPA concluded that

approximately 25 percent of those underground petroleum

tanks had leaked. /d. at 37086. EPA also estimated that the

“number of sites needing significant cleanup ... is expected

to be in the tens of thousands nationwide." Id. at 37097

(emphasis added). More recent data indicates that there are

over 1,100,000 underground petroleum tanks being actively

operated in the United States. There are also approximately

170,000 petroleum tank sites nationwide awaiting cleanup.

Third Quarter Oil Cleanups, Releases Nearly Equal, 26 Env’t

Rep. 709 (Aug. 11, 1995).

In preparation for submitting this brief, WSPA polled

several of its member companies. Information was sought on

the number of service stations owned by member companies

and the amount of pending litigation concerning underground

petroleum tanks. One company reported that it currently

owned about 1,000 service station properties in the western

United States and stated that it had owned over 16,000 gas

Station properties in that region historically. A second

company reported owning about 3,000 gas stations nationwide

and stated that it had owned over 9,000 gas station properties

within the last 10 years. A third company reported owning

about 4,000 gas stations nationwide, but could provide no

historical ownership information. A fourth company reported

owning over 1,000 service stations and stated that it had

owned over 25,000 service station properties since the early

1900s.

These four companies also reported being named as

defendants in over 1,600 actions for recovery of petroleum

contamination cleanup costs brought in state courts over the

past five to ten years. Approximately one-third to one-half

4

of these cases are still pending.

Although the results of the informal survey conducted

here are not definitive, a clear indication of the magnitude of

the impacts emerges when the responses are considered in

light of EPA’s published data. EPA reported that

underground petroleum tanks were located at over 700,000

active facilities nationwide in the year 1988. Given the

significant downsizing in the retail marketing end of the

petroleum industry both before and after 1988, confirmed by

the large number of former gas station properties reportedly

owned by the surveyed companies, it would appear that

underground petroleum tanks historically have been located

at well over one million, and perhaps at several million,

properties.

EPA also reported that tens of thousands of

underground petroleum tank properties would require

"significant cleanup." Given that just the four WSPA

member companies surveyed reported being named as

defendants in over 1,600 petroleum tank cleanup cases,

EPA’s estimate appears accurate. Extrapolating from the

information obtained from WSPA members, it is a reasonable

estimate that well over 10,000 underground petroleum storage

tank cost recovery actions have been filed in the state courts

in the past five to ten years and that several thousand such

cases are currently pending.

I. SUMMARY OF ARGUMENT

Currently, all cases seeking the reimbursement of

costs expended in cleaning up contamination associated with

underground petroleum tanks are brought in state courts.

This is because the cornerstone of federal cleanup law,

CERCLA, excludes petroleum products from its reach. 42

U.S.C. § 9601(14). And, prior to the decision below, it was

5

"well settled" that the RCRA citizen suit provision -- which

arguably reaches petroleum contamination -- did not provide

a cost recovery remedy but was limited to injunctive relief.

Cooke, infra, § 16.03(3)(f).

If the decision of the Ninth Circuit is not reversed,

Virtually all petroleum cleanup cost recovery cases will shift

from state to federal court. This is primarily because the

RCRA citizen suit contains an attorney’s fees provision, as

well as a provision for recovery of expert’s fees, whereas

such fees generally cannot be recovered in state courts

pursuant to common law theories. In addition, state common

law causes of action are subject to definite statutes of

limitation whereas the RCRA citizen suit does not contain

such a provision. Because of the large number of

underground petroleum tank cleanup cases, the shifting of

these cases to the federal courts would result in a significant

additional burden on the federal court system. Such a result

would be ironic, to say the least, because the legislative

history of environmental citizen suit provisions expressly

indicates that Congress was aware of this potential

consequence and deliberately crafted citizen suit provisions to

avoid overburdening the federal courts.

Finally, if the decision below is not reversed, the

express petroleum exclusion of CERCLA would be nullified

and cost recovery actions for cleanups of petroleum could

proceed in federal court for the first time.

II. ARGUMENT

While the industrial revolution has produced many

useful benefits for society, many industrial processes and

practices which were not only completely lega!, but which

were widely perceived to be safe and even state-of-the-art at

the time, have resulted in the contamination of numerous

6

properties across the country. This issue first arose in the

1970s and resulted in the enactment of three federal statutes:

(1) the Resource Conservation and Recovery Act of 1976

("RCRA"); (2) the Comprehensive Environmental Response,

Compensation and Liability Act of 1980 ("CERCLA"); and

(3) the underground storage tank provisions of Subtitle I of

RCRA enacted as part of the Hazardous and Solid Waste

Amendments of 1984 ("Subtitle I").

We will briefly review the relevant portions of RCRA,

CERCLA and Subtitle I that comprised federal statutory

contamination cleanup law prior to the Ninth Circuit’s

decision below in order to show that that decision is

completely contrary to the underlying legislative framework.

We will then illustrate the impacts of the decision on the

federal district courts and on the petroleum industry.

A. The Underlying Legislative Framework

1. RCRA

RCRA was signed into law in October 1976. The

RCRA legislation completely replaced the former Solid Waste

Disposal Act with nine new subtitles, denominated A though

H, addressing the management of hazardous and solid wastes.

S. Cooke, The Law of Hazardous Waste, § 1.02 (1995)

("Cooke"). As this Court has noted, "RCRA is a

comprehensive environmental statute that empowers EPA to

regulate hazardous wastes from cradle to grave, in

accordance with the rigorous safeguards and management

procedures of Subtitle C" and to regulate solid waste under

the “much ... loose[r]" procedures of Subtitle D. City of

Chicago v. Environmental Defense Fund, U.S. __, 114

S.Ct. 1588, 1590 (1994).

7

At the time of its passage, RCRA was viewed as

Closing the “last remaining loophole in environmental law,

that of unregulated land disposal of discarded materials and

hazardous wastes." H.R. Rep. No. 1491, 94 Cong., 2d Sess.

reprinted in 1976 U.S. Code Cong. & Admin. News at 1641-

42. With respect to contamination of property by solid and

hazardous wastes, RCRA remains largely prospective in

nature -- it is designed primarily to prevent future

occurrences of property contamination.

However, two provisions of RCRA do provide a

mechanism for reaching past activities that have caused

property contamination: (1) the “imminent hazard"

provision, 42 U.S.C. § 6973, and (2) the citizen suit

provision, 42 U.S.C. § 6972. Under the imminent hazard

provision, the Administrator of the EPA is authorized to file

suit against any person who has contributed, or who is

contributing, to the past or present handling or disposal of a

hazardous or solid waste that "may present an imminent or

substantial endangerment to human health or the

environment." 42 U.S.C. § 6973. If the EPA finds the

requisite danger present, it may seek an injunction in district

court “to require that the liable parties refrain from

potentially harmful activity, and undertake any action

necessary to abate the hazard." Cooke, § 15.01(1)(a). The

EPA is also provided with authority to issue "such orders as

may be necessary to protect public health and the

environment." 42 U.S.C. § 6973(a).

The citizen suit provision of RCRA authorizes a

citizen-plaintiff to file suit in district court against a person

who has contributed, or who is contributing, to the past or

present handling or disposal of a solid or hazardous waste

that "may present an imminent and substantial endangerment

to human health or the environment." 42 U.S.C. §

6972(a)(1)(B). The district court has jurisdiction to "restrain"

/

a liable party, to “order such person to take such other action

as may be necessary, or both." /d. As a leading treatise on

hazardous waste law has stated, “[iJt is well settled that,

under [the RCRA citizen suit provision], as is the case with

the C[{lean}] W{ater] A[ct], an award of damages to the

plaintiff is not permitted." Cooke, § 16.03(3)(f); see also, 4

W. Rodgers, Environmental Law § 7.6(b) (1992).’

2. CERCLA

As noted above, RCRA is largely prospective in

operation and regulates the handling and disposal of solid and

hazardous waste. Congress recognized “that while RCRA

amply addressed the management of hazardous wastes from

generation through disposal, it provided only limited authority

to clean up wastes that had been improperly disposed of."

Cooke, § 12.02(3) (emphasis added). This, coupled with

several well known incidents of environmental contamination,

including particularly the Love Canal site in New York, led

to the passage of CERCLA in 1980. /d., § 12.02(2).

CERCLA is now the “centerpiece of the federal hazardous

substance cleanup and liability program." /Jd., § 12.01(2).

CERCLA provides the federal government with

“broad power to command private parties and other

government agencies to clean up hazardous waste sites." Key

7

> In the decision below, the Ninth Circuit Court of Appeals

ruled that the RCRA citizen suit provision, 42 U.S.C. §

6972(aX 1B), provides for the recovery of costs expended in

cleaning up hazardous waste and solid waste because the statutory

language providing the district courts with jurisdiction to “order

such person to take such other action as may be necessary" is broad

enough to encompass not only mandatory injunctive relief but

money damages in the form of recovery of cleanup costs expended.

9

Tronic Corp. v. United States, __-s«sUS._, 114 S. Ct.

1960, 1964 (1994). The federal government, generally acting

through the EPA, may undertake the cleanup itself or may

attempt to compel liable parties to undertake the cleanup.

Cooke, § 12.01(2). Thus, CERCLA, which is largely

retrospective in operation, provides a cost recovery

mechanism pursuant to which the federal government may

file suit in district court to recover its cleanup expenses from

liable parties. 42 U.S.C. § 9607(a).

The CERCLA cost recovery cause of action is also

available to private party plaintiffs who effectuate a cleanup.

CERCLA provides that:

[A]ny person who at the time of disposal of

any hazardous substance owned or operated

any facility at which such hazardous

substances were disposed of

***

shall be liable f

(A) all costs of removal or remedial action

incurred by the United States Government or

a State or an Indian Tribe not inconsistent with

the National Contingency Plan; [or]

(B) any other necessary costs of response

incurred by any other person Consistent with

the National Contingency Plan.

42 U.S.C. § 6907(a)(2)(A) & (B) (emphasis added).

By providing a private party cost recovery cause of

action, CERCLA allows owners of property contaminated

10

with hazardous substances to clean up their property and then

seek recovery of their cleanup expenses in the federal courts

from liable parties under CERCLA. Former owners or

lessees of contaminated property are typical defendants in a

CERCLA private party cost recovery action.

There are, however, some restrictions on the recovery

of cleanup costs in these cases. First, the costs incurred must

be consistent with the National Contingency Plan ("NCP").

Washington State Dept. of Transportation v. Washington

Natural Gas Co., 51 F.3d 1489 (9th Cir. 1995). The NCP

contains detailed procedures on how cleanups are to be

conducted and covers nearly thirty pages in the Code of

Federal Regulations. 40 C.F.R. §§ 300.400 - 300.440.

Second, an action must be brought within the statutory

limitations period. 42 U.S.C. § 9613(g)(2). Third,

attorney's fees are not recoverable in a private party

CERCLA cost recovery action. Key Tronic, supra, 114 S.

Ct. 1960.

Finally, there is no cost recovery under CERCLA for

cleanup of petroleum product contamination, but only for

cleanup of “hazardous substances." The term “hazardous

substance" is defined in CERCLA and explicitly "does not

include petroleum, including crude oil or any fraction thereof

which is not otherwise specifically listed or designated as a

hazardous substance” elsewhere in CERCLA. 42 U.S.C. §

9601(14); Wilshire Westwood Assoc. v. Atlantic Richfield

Corp., 881 F.2d 801 (9th Cir. 1989).

* This definitional exclusion is commonly referred to as the

"CERCLA petroleum exclusion." Early subcommittee testimony on

the CERCLA legislation evinced Congressional awareness that

petroleum contamination posed less of a threat to public health than

(continued...)

1]

3. Subtitle I

The Hazardous and Solid Waste Amendments of 1984

were the first federal enactment to address underground

petroleum storage tanks. Pub. L. No. 86-616, 98 Stat. 3221-

93 codified at 42 U.S.C. §§ 6991 - 6991i. This legislation

created Subtitle I of RCRA which directed the EPA to

establish regulations for leak detection and cleanup of

contamination at existing tanks and to establish standards for

the installation and operation of new tanks. Cooke, §

7.01(2). The provisions of Subtitle I are not at issue here.

The legislative history of Subtitle I contains a

noteworthy analysis of the reasons for its enactment:

Underground storage tanks are seldom

regulated. At present [1984], Federal

regulation of storage tanks covers only above-

ground tanks containing chemical wastes.

And, if a tank is leaking, the Federal

Government cannot under [CERCLA]

authority respond or clean up a spill if it

involves petroleum products.

** *

‘(...continued)

those chemicals that later came to be defined as “hazardous

substances." Oil and Hazardous Substances Liability: Hearings on

H.R. 29 & H.R 85 Before the Subcomm. on Coast Guard and

Navigation of the House Comm. on Merchant Marine and Fisheries,

96th Cong., Ist Sess. 177 (1979). The legislative debates on the

final compromise language of CERCLA indicated that Congress

intended to enact subsequent legislation on petroleum

contamination. See 126 Cong. Rec. H11793-11802 (Dec. 3, 1980).

12

The tank storage of one of the most common

underground contaminants -- gasoline -- is

unregulated because it is not a waste product

(and thus not governed under the authority of

[RCRA]) and spills of the fuel cannot be

cleaned up under [CERCLA] because it is a

petroleum product.

130 Cong. Rec. $2028, $2080 (daily ed. Feb. 29, 1984)

(comments of Sen. Durenberger).

Congress provided a mechanism in the Subtitle |

legislation for the states to enact their own legislation and to

adopt regulations governing underground petroleum tanks that

would supersede the federal legislation and regulations. 42

U.S.C. § 6991c. Prodded by Subtitle I, virtually all states

have adopted laws and promulgated regulations governing

underground petroleum tanks. In practical terms, this means

that a party installing, operating or cleaning up contamination

from a tank refers to applicable state laws and regulations in

conducting its activities. These activities are generally

regulated and overseen by state agencies that have been

delegated these duiies by state statute. It is critical to note

that Subtitle I provides no cost recovery cause of action in

favor of parties who expend costs cleaning up petroleum

contamination from underground tanks.

In sum, then, the federal statutory framework

governing property contamination litigation is as follows. (1)

RCRA is largely designed to prevent future contamination

problems, and the provisions that address existing

contamination are limited to injunctive relief only. (2)

CERCLA provides authority for the cleanup of past incidents

of contamination, and allows a private party who cleans up

“hazardous substance" contamination (not petroleum products)

to recover its costs in federal court pursuant to the CERCLA

13

private party cost recovery action. (3) Petroleum

contamination is addressed by state agencies pursuant to state

laws and regulations.’ These state programs were

encouraged by federal Subtitle I legislation, which itself

provided no cost recovery cause of action.

Because of CERCLA’s petroleum exclusion, parties

who clean up property contaminated by petroleum from an

underground tank cannot bring a CERCLA cost recovery

action in federal court. Neither can parties who clean up

petroleum contamination on their property bring a cost

recovery action in federal court pursuant to Subtitle |

because Subtitle I does not provide for such a cause of action.

And, until the Ninth Circuit's decision in KFC Western, Inc.

v. Meghrig, it was well settled that such parties could not

bring a cost recovery action in federal court under the RCRA

citizen suit provision, 42 U.S.C. § 6972, because only

injunctive relief was available under that provision.° Cooke,

§ 16.03(3)(d); 4 W. Rogers § 7.6(b). Parties seeking

monetary damages in these circumstances have available to

* For example, many states have detailed and complex

formulae set forth in regulations and guidance documents to

determine “how clean is clean." E.g Ohio Admin. Code § 1301:7-

7-13; Calif. Leaking Underground Fuel Tank Field Manual. Federal

regulations contain no parallel provisions.

* The RCRA citizen suit provision authorizes a citizen-

plaintiff to obtain a prohibitory injunction to halt on-going

contamination or a mandatory injunction to compel abatement of

existing contamination. This provision applies to both hazardous

waste and solid waste. Solid waste arguably includes petroleum

contamination. However, the relief available is limited to injunctive

relief. Cost recovery is not expressly provided for in the RCRA

14

them a full array of state common law and statutory causes of

action which can be brought in state court.’

B. Effect of the Decision Below

The decision below, if not reviewed and reversed by

this Court, will significantly alter the above-described

legislative framework. This, in turn, will result in a series of

inconsistencies, anomalies and uncertainties in the law of

hazardous substance and petroleum contamination cleanup.

In addition, of course, the creation of a new federal remedy

in an area as active as petroleum contamination cost recovery

cannot help but significantly impact the workload of the

1. The Creation of a New Loosely-Defined

Federal Remedy by the Ninth Circuit is

Unwarranted

In ruling that the RCRA citizen suit provision allows

plaintiffs to recover costs expended in cleaning up hazardous

wastes or solid wastes, the Ninth Circuit has created a new

federal remedy. Because this “citizen suit cost recovery

” A leading treatise in the area has noted that “{iJn the

absence of federal or state statutes creating private causes of action,

private suits involving damage to... property [from contamination}

are brought under common law tort principles." Cooke, §

17.01(1\(b). Because of the CERCLA petroleum exclusion, lack of

a cost recovery cause of action under Subtitle | and the limitation

of RCRA citizen suits to injunctive relief, all actions to recover

costs expended in cleaning up petroleum contamination have been

brought in state courts. Although additional causes of action may

be available in some jurisdictions under certain factual situations,

most petroleum contamination cases proceed under three common

law causes of action -- trespass, nuisance and negligence.

15

action" was never intended by Congress, it is ill-defined and

For example, RCRA provides no standards for

determining which costs expended by a plaintiff are

recoverable in a citizen suit cost recovery action. In contrast,

under CERCLA, a private party can recover only costs that

axe necessary and consistent with the National Contingency

Plan. 42 U.S.C. § 9607(a). The NCP contains detailed

procedural requirements intended to ensure that cleanups are

well designed, well implemented and cost effective. 40

C.F.R. §§ 300.400 - 300.440. The lack of such standards

under RCRA is anomalous given the Congressional

this lack of standards is strong evidence that Congress did not

intend the RCRA citizen suit provision to be a cost recovery

mechanism. If the decision below is allowed to stand, the

RCRA provides no statute of limitations for citizen

suit cost recovery actions. Again, in contrast, CERCLA

provides an express statute of limitations for cost recovery

actions. 42 U.S.C. § 9613(g)(2). The lack of a statute of

stand, the district courts will be required to resolve this issue

as well, and substantial uncertainty and unevenness of

16

decisions will exist for some time.*

The RCRA citizen suit provision expressly provides

that attorney’s fees may be awarded to the prevailing party.

42 U.S.C. § 6972(e). It is a long-standing American rule of

law that attorney’s fees are not recoverable. See, Key Tronic,

supra, 114 S.Ct. at 1965. Attorney’s fees are not

recoverable in private party CERCLA cost recovery actions,

nor are attorney's fees generally recoverable in cost recovery

cases brought under state common law theories. In all

likelihood, Congress decided to allow an attorney’s fees

award in the context of the RCRA citizen suit provision due

to the limited nature of the relief Congress was providing --

If the Ninth Circuit’s ruling is allowed to stand,

several anomalies will be created. Attorney's fees will be

recoverable in a federal "cost recovery" action brought under

RCRA, but not under CERCLA. Thus, CERCLA -- the

Statute designed to address the less numerous but potentially

more dangerous hazardous substance sites -- will provide a

less comprehensive remedy, from a plaintiff's perspective,

than the RCRA citizen suit provision. The end result is

clear: all parties seeking cost secovery for any type of

contamination cleanup will bring a RCRA citizen suit action

instead of, or in addition to, a CERCLA claim in an effort to

recover attorney's fees. And, because attorney's fees would

* The Ninth Circuit’s opinion below has suggested that the

doctrine of laches “will alleviate any unfairness that might be

created by the lack of a limitations period under RCRA.” Pet. App.

at A9. This suggestion is troubling both because it will encourage

stale claims and because it injects tremendous uncertainty into the

law, whereas contamination cases brought in state courts have well-

settled limitation periods.

17

be recoverable in federal court under RCRA, petroleum “cost

recovery” actions will be brought in federal court instead of

in state court where attorney's fees are not recoverable.

The movement of underground petroleum storage tank

cleanup litigation from state to federal courts would be an

unfortunate development because the state courts are the more

logical forum for resolution of these disputes. As noted

above, virtually all states have passed laws and promulgated

regulations governing underground petroleum tanks.

Accordingly, regulatory decisions regarding underground

tanks generally occur at the state level. Determinations as to

whether a tank cleanup was done properly, cost-effectively

and in a timely manner, and whether the level of cleanup

satisfies applicable standards, are all questions of state law.

State courts have been deciding tank cleanup cases for

a decade, and a body of case law, based on common law tort

concepts, has developed. The state common law courts of

general jurisdiction are ideally suited to resolve disputes of

this nature by applying general rules of decision to the facts

of the cases before them. In addition, the respective

obligations of current and former lessees and landowners that

are at the center of most underground petroleum tank cleanup

cases are matters historically determined by state law.

2. The Ninth Circuit’s Ruling Would

Effectively Eliminate The CERCLA

Petroleum Exclusion

In addition, if the Ninth Circuit’s opinion is upheld,

the CERCLA petroleum exclusion would be rendered a

nullity. The legislative history of CERCLA indicates that

Congress understood that petroleum contamination posed less

of a threat to public health than the chemicals defined as

“hazardous substances” under CERCLA. The legislative

history also indicates that Congress intended to pass

subsequent legislation addressing petroleum contamination.

See, supra at 10 n.4; 126 Cong. Rec. H11793-11802 (Dec.

3, 1980). As discussed above, Subtitle I, enacted in the

Hazardous and Solid Waste Amendments of 1984, was that

subsequent legislation. But Subtitle I clearly does not contain

a Cost recovery provision.

The RCRA citizen suit provision was also amended

and assumed its current form in the Hazardous and Solid

Waste Amendments of 1984. Pub. L. No. 86-616, 98 Stat.

3221-93. Respondents argue that these 1984 amendments

introduced a cost recovery mechanism into RCRA for

petroleum contamination by adding language allowing district

courts to “order [persons] to take such other action as may be

necessary." 42 U.S.C. § 6972(a)(1)(B). Respondents further

argue that this is the manner in which Congress decided to

create a broad cost recovery remedy and to override the

policy decision it had made in including the petroleum

exclusion in CERCLA.

But the legislative history of the 1986 amendments to

CERCLA, which were enacted only two years after RCRA

petroleum exclusion remained effective. A colloquy from the

Senate debates makes this abundantly clear:

"Mr. Bentsen. I would like to ask a question

with regard to the effects of this legislation.

It is my understanding that these amendments

would not diminish the scope of the present

exclusion from liability for petroleum found in

section 101(14) of the act. Is my

understanding correct, Senator?

19

Mr. Simpson. Yes, the Senator from Texas is

correct in his interpretation. This bill will not

diminish the scope of the present petroleum

exclusion. That provision, found in section

101(14) of the act, excludes from the

definition of ‘hazardous substance’ all types of

petroleum ...."

132 Cong. Rec, $14931-32 (daily ed. Oct. 3, 1986).

This colloquy would have made little sense had the

CERCLA petroleum exclusion been effectively nullified by

the 1984 amendments to RCRA.

3. If Allowed to Stand, the Decision Below will

Significantly Impact the Caseload of the

Federal District Courts

As previously stated, approximately 170,000 tank sites

nationwide are currently awaiting cleanup. 26 Env’t Rep. at

709. Cleanups are being completed at the rate of

approximately 25,000 sites per year. Jd. If only 10 percent

of these cleanups result in litigation, approximately 2,500

new tank cleanup cost recovery cases would be filed

nationwide each year.

As a result of the Ninth Circuit’s decision, plaintiffs

will be highly motivated to bring petroleum cost recovery

suits in federal court under RCRA because of the possibility

of recovering attorney's fees. In addition, plaintiffs who are

barred from proceeding in state court on statute of limitations

grounds will file in federal court where an uncertain, but

potentially much longer, limitations period may apply. The

end result will be that virtually all underground tank litigation

will shift to federal court. This trend has already begun.

Court Ruling On Cost Recovery Under RCRA Spawns Raft of

20

New Lawsuits, Inside EPA Weekly Report at 1-2 (May 12,

1995) (quoting industry spokespersons predicting that

"hundreds" of underground petroleum tank cases will soon be

filed in the district courts of the Ninth Circuit alone).

It would be ironic if the construction placed upon the

RCRA citizen suit provision by the Ninth Circuit resulted in

unduly burdening the federal courts. Congress took great

pains to avoid just this result when it adopted the first

environmental citizen suit provision 25 years ago. This is

clearly indicated in Congressional debates such as the

following:

"It has been argued, however, that conferring

additional rights on the citizen may burden the

courts unduly. / would argue that the citizen

suit provision of [this bill] has been carefully

drafted to prevent this -consequence from

arising. First of all, it should be noted that

the bill makes no provision for damages to the

individual. It therefore provides no incentives

to suit other than to protect the health and

welfare of those suing and others similarly

situated. Jt will be the rare, rather than the

ordinary, person, I suspect, who with no hope

of financial gain and the very real prospect of

financial loss, will initiate court action under

this bill."

116 Cong. Rec. 33104 (1970) (comments of Sen. Hart)

quoted in Middlesex County Sewerage Authority v. National

Sea Clammers Assn., 453 U.S. 1 n.27 (1981) (emphasis

added).

——— eee

21

The Ninth Circuit’s decision takes this very precise

indication of legislative intent -- and over a decade of judicial

decisions which have adhered to it -- and stands them on their

head. Such an arbitrary and ill-founded construction of the

law should not be countenanced by this Court.

CONCLUSION

If left to stand, the Ninth Circuit’s decision below will

work a massive disruption of well-settled principles of federal

environmental law and underground petroleum tank litigation.

The federal courts will be inundated with new cases better

brought in state court, contrary to clearly expressed

Congressional intent. Those subject to cost recovery actions

under RCRA, which will in some cases involve WSPA

member companies, will be subject to a myriad of

uncertainties in the litigation process. For these reasons,

WSPA respectfully urges this Court to reverse the decision of

the Court of Appeals for the Ninth Circuit.

Dated: November 9, 1995.

Respectfully submitted,

Donna R. Black

Counsel of Record

MANATT, PHELPS &

PHILLIPS

11355 West Olympic Boulevard

Los Angeles, California 90064

(310) 312-4000

Counsel for Amicus Curiae

Western States Petroleum

Association