Amicus Curiae Brief — United States v. Atlantic Research Corp.

Supreme Court brief2007

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No. 06-562

IN THE

SUPREME COURT OF THE UNITED STATES

UNITED STATES OF AMERICA,

Petitioner,

-V.-

ATLANTIC RESEARCH CORPORATION,

Respondent,

On Writ of Certiorari to the United States Court of

Appeals for the Eighth Circuit

BRIEF OF AMICUS CURIAE THE CITY OF NEW YORK

IN SUPPORT OF RESPONDENT

MICHAEL A. CARDOZO,

Corporation Counsel of the

City of New York

Attorney for Amicus Curiae

The City of New York

100 Church Street

New York, NY 10007

(212) 788-1568

LEONARD J. KOERNER,*

SUSAN M. KATH,

CHRISTOPHER G. KING,

NANIEL GREENE,

of Counsel.

*Counsel of Record

April 5, 2007

QUESTION PRESENTED

The City of New York (“City”) voluntarily

investigates and remediates contamination caused by third-

parties in order to protect its citizens and the environment

as well as to revitalize brownfield properties. The main

question the City addresses is whether the City, in all

circumstances, is entitled to recover its voluntarily incurred

response costs from responsible parties under the

Comprehensive Environmental Response, Compensation,

and Liability Act.

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TABLE OF CONTENTS

Page

QUESTION PRESENTED ........ccsssssssssesssssssssnsssssssssssee i

TABLE OF AUTHORITIES ........ccccsoscossssssssssssseesnnseses iv

INTERESTS OF AMICUS CURIAE ...cccsssssssssssssssssssssse

SUMMARY OF ARGUMENT .......cscssscsssssseesssssseeseesesee 7

IT wnictnniitnniintsitciennnetncidminvicionianustmiininaael 9

I. SECTION 107(a)(4)(B) OF CERCLA CREATES A

PRIVATE COST RECOVERY CLAIM FOR ANY

PERSON WHO INCURS RESPONSE COSTS........ 9

A. 107(a)(4)(B) is a Distinct Cause of Action

from 113(f)(A) -ccccsssssvecccscccessssecsscssssecessessssevessessese 9

B. Interpretation of the Phrase “Any Other

SUITE icsscisichcsniciltcnniieieibeciddeipaaigsiniienapinieiiliphiaiuitusiniahiba 10

C. Pnvate Cost Recovery Claims Will Not

Create a Disincentive to CERCLA

TERT BS, OTA Te ROE IO ERD 12

Il. LIMITING COST RECOVERY CLAIMS

TO NON-PRPS WILL EXCLUDE

FAULTLESS PRPS FROM BRINGING

COSTS RECOVERY ACTIONS ...............:::064 16

iii

A. The Broad Scope of PRP Status ............00.cee 16

B. Nothing in Section 107(a) Creates a

Distinction Between Innocent Landowners

or Bona Fide Purchasers and PRPs..................... 19

lil. VOLUNTARY RESPONSE ACTIONS

ARE CRITICAL TO STATE AND

FEDERAL EFFORTS TO ADDRESS

HAZARDOUS CONTAMINATION .................. 21

EN ineiiisesisieslbdanteeddiesaiienisnicausiniessitaisouliaia 26

TABLE OF AUTHORITIES

Cases Page

Amcast Indus. Corp. v. Detrex Corp., 2 F.3d 746

» FIR, Fei reriescsccssssstennniisisiaammnnaann 14

Atlantic Research v. United States, 459 F.3d 827

Ta FI cn cceviinennneniennpsitcistiiahioipanantaail passim

Carson Harbor Village Ltd. v. County of Los Angeles,

433 F.3d 1260 (9th Cir. 2006)...........ceceeeeeeeees 11,25

City of New York v. Chemical Waste Disposal Corp.,

836 F.Supp. 968 (E.D.N.Y. 1993) ....cccccccssscsessesseeeneees 3

City of New York v. N.Y. Cross Harbor R.R. Terminal

Corp., Case No. 98-7227, 2006 U.S. Dist. LEXIS

ST EF. Be intensiersntsonvinasecintaianamamaa 2,15

Consolidated Edison Co. of New York v. UGI Utilities,

Inc., 423 F.3d 90 (2d Cir. 2005) ........ccee cence. passim

Cooper Industries, Inc. v. Aviall Services, Inc.,

OD Sas BF Ge itciccecntstncneiectinnscongasainmiii 7, 9, 25

Differential Development-1994, Ltd. v. Harkrider

Distrib. Co., Case No. H-05-3375, 2007 U.S. Dist.

LEXIS 1592

NN SE 25, 26

E.J. Dupont De Nemours & Co. v. United States,

460 F.3d 515 (3d Cir. 2006)............00000... seindasiadann 8,11

Elementis Chems., Inc. v. T H Agric. & Nutrition,

L.L.C., 373 F. Supp. 2d 257 (S.D.N.Y. 2005)..........17

Farmland Industries, Inc. v. Morrison-Quirk Grain

Corp., 987 F.2d 1335 (8th Cir. 1993)... eeeeeees 17

' Key Tronic Corp. v. United States, 51\ U.S. 809

Metropolitan Water Reclamation Dist. v. North Am.

Galvanizing & Coatings, 473 F.3d 824

i aac en crreaterenes 7, 8,15

Redwing Carriers v. Saraland Apts., 94 F.3d 1489

EE ee 17

Schaeffer v. Town of Victor, 457 F.3d 188

dai rseedernrinetatnnniidenalonepeenensueneal 8

State of New York v. Shore Realty Corp., 759 F.2d 1032

ince iasin cannetncanennamnneeneusnasoatin 17

Tanglewood East Homeowners v. Charles-Thomas,

Inc., 849 F.2d 1568 (Sth Cir. 1988) ........0........ eee 17

United States v. Alcan Corp., 990 F.2d 711

ccs acai ciai ana ceenienaneneness 17

United States v. Taylor, 909 F.Supp. 355

I i nen penaseeeremnmnescenntente sasineneisei 10

United Technologies v. Browning-Ferris, 33 F.3d 96

ia cree iantaniatntasiparitenecnrentes 12

_Westfarm Assocs. v. Wash. Suburban Sanitary Comm'n,

GB PDB GBD CG GOR. FISD cccccccncccccnscccccesccntsnsnscresens 17

Western Props. Serv. Corp. v. Shell Oil Co., 358 F.3d

Bee iiiiecinntaiincicmnecsnntemeseninnsanmnninion 17, 20

Wickland Oil Terminals v. Asarco, Inc., 792 F.2d 887

I a 12

Statutes and Regulations

Federal Statutes

Comprehensive Environmental Response,

Compensation and Liability Act, 31 U.S.C. 9601 et

seq.:

§ 101421), 42 U.S.C. SGOI(21) ..........0ccccecsscseseseeesesss 11

§ 101(39)(A), 42 U.S.C. 9601(39)(A) ...2.. eee 3

§ 101(40), 42 U.S.C. 9601(40) 00... cece eeeeeteeeeeees 20

§ 101(41), 42 U.S.C. 9601(41)(B)(it) ...... eee 23

5 eer passim

§ 107(a)(1)-(4)(A), cae

lie Se OD cccnccssctecenenssesserenssel passim

§ 107(a)(1)-(4)(B), |

42 U.S.C. 9607(a)(1)-(4)(B) ...........0.....ceeeeeeeeeees passim

Do en 20

§ 107(r)(1), 42 U.S.C. 9607(r)(1) oo... eee. aniseed 20

Vik Boot fk) passim

§ £13(f(1), 42 U.S.C. 9613( DCL) 0... eee ceeeeeees 7,14

§ 113¢6(2), 42 U.S.C. 9613(f)(2) ...... ee eeeeeeeeeees 12, 13

§ 113(f)(3)(B), 42 U.S.C. 9613(f)(3)(B)............. 24,25 —

Vii

Rules of the Supreme Court of the United States, 28

nt, EES SR Ceasar 1

Small Business Liability Relief and Brownfields

‘Revitalization Act, Pub L. 107-118,

I iii ailing att aad ated 23

Superfund Amendments and Reauthorization Act of

1986, Pub. L. No. 99-499, 100 Stat. 1613 ......000....... 12

Federal Regulations

ONIN, cicscittciiniencsieritinbeitaitmninipiaiiieneainitinnenath 25

State Statutes

N.Y. Environmental Conservation Law § 27-1401 et

a CED cctintetsintastintepiiamcmaunecninaiinsitiitin 23

Other

Memorandum of Agreement on State Voluntary

Cleanup Programs (Mar. 27, 2007)

<http://www.epa.gov/brownfields/html-

I eiiticiccccnianindiitiinccienntaniaiannimnecisie 23

Memorandum from Elliot Laws, Assistant

Administrator, Office of Solid Waste and

Emergency Response, and Steven A. Herman,

Assistant Administrator, Office of Enforcement and

Compliance Assurance (Nov. 14, 1996),

<http://www.epa.gov/brownfields/html-

TE wiintiicinnibineninsdiniininensnsiimninisiiitiid saiiiieied 22

Vili

New York State Department of Environmental

Conservation, Annual Remedial Programs Report

for State Fiscal Year 2005-06 (2006)

<http://www.dec.state.ny.us/website/der/2006annua

SI ibceatasisnisisdiatalnibiueninidiibdendsbaaneninenuatdiniasensiteonntemmametataa 23

New York State Department of Environmental

Conservation, The MGP Program

at the NYSDEC (April 2007)

<http://www.dec.state.ny.us/website/der/mgp/dec _

United States General Accounting Office, Brownfield

Development: Stakeholders Report that EPA's

Program Helps to Redevelop Sites, but Additional

~ Measures Could Complement Agency Efforts,

GAO-05-94 (December 2004). ...........cccccceeeeeeeeeeeeees 22

United States General Accounting Office, State

Voluntary Cleanup Programs Provide Incentives to

Encourage Cleanups, GAO/RCED-97-66 (Apmil

Sa vith ncsincspminsinioncinaninhaneptpincnjeeceniinmndniiapueabesitinineneiens 22

ia a wr

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INTERESTS OF AMICUS CURIAE

Amicus curiae the City of New York (“City”)

submits this brief in support of respondent Atlantic

Research Corporation seeking affirmance of the United

States Court of Appeals for the Eighth Circuit’s decision in

Atlantic Research v. United States, 459 F.3d 827 (8th Cir.

2006).

The City, a political subdivision of the State of New

York, is actively involved in the investigation and

remediation of contaminated properties throughout its five

boroughs. While the City conducts some of these activities

pursuant to consent orders with the State of New York and

less often, with the United States, the City also conducts

voluntary cleanups of properties contaminated by third-

‘parties. The City’s motivation in remediating this

contamination is twofold. First, the City is committed to

abating hazardous contamination that poses a threat to its

citizens and the environment. Second, the City remediates

brownfields in order to foster economic growth by

returning these underutilized properties to productive uses.

The private causes of action available under the

Comprehensive Environmental Response, Compensation, —

and Liability Aci (CERCLA), 42 U.S.C. 9601 et seq., are

critical to both of these goals.

' Pursuant to Rule 37.6 of this Court, the City represents that

counsel for the City authored this brief in its entirety and that no

person or entity other than the City or its representatives made

any monetary contnbution to the preparation or submission of

this brief. Counsel for petitioner and respondent have consented

to the filing of this brief, and letters reflecting their consent are

submitted to the clerk’s office with this brief.

With respect to the City’s first goal, the City uses

CERCLA to recover costs associated with remediating

contamination that threatens human health or the

environment and is caused by a third-party. For example,

in 1997, a City contractor was performing routine work at

a rail facility that the City has owned since the 1970s and

leases to private entities. In the course of performing this

work, the contractor discovered over a dozen buried drums

of chlordane, a pesticide that has been banned by the

United States Environmental Protection Agency (EPA), as

well as extensive polyaromatic hydrocarbon (PAH)

contamination in soils on the site. Both of these

compounds pose a risk to human health and the

environment.

In accordance with State regulatory requirements,

the City notified the New York State Department of

Environmental Conservation (NYSDEC) of the situation

and its plans to abate the contamination. NYSDEC agreed

with the City’s planned course of remedial action, but did

not order the City to conduct a cleanup or directly supervise

it. The City voluntanly conducted the investigation and

remediation of the buried hazardous waste with its own

funds. ,

The City then brought a CERCLA claim in the

Eastern District of New York against the corporation that

leased the land from the City as well as against its chief

executive officer. As further explained in the district

court’s decision on the City’s motion for summary

judgment, the City had facts supporting its claim that the

drums of chlordane had been surreptitiously buried by the

tenant on the City’s property. See City of N.Y. v. N.Y.

Cross Harbor R.R. Terminal Corp., Case No. 98-7227,

2006 U.S. Dist. LEXIS 4238 (E.D.N.Y. 2006). The City

was eventually able to recover a substantial sum of its

response costs through settlements with the defendants.

A second example where the City voluntarily

incurred response costs in order to abate a serious threat to

its environment and then brought a CERCLA claim to

recover its costs is City of New York v. Chemical Waste

Disposal Corp., 836 F. Supp. 968 (E.D.N.Y. 1993). The

defendants in that case were found to be pumping large

quantities of hazardous chemicals through a floor drain and

into the City’s sewer system. The City incurred substantial

costs voluntarily abating this illegal and dangerous activity

fourteen months before EPA brought its own claim against

the defendant.

These two cases exemplify how voluntary response

actions, coupled with attendant private cost recovery

claims, can be used to effectuate environmental

remediation and responsible party liability, two of

CERCLA’s main goals. However, in both of these cases,

the City may have qualified as a potentially responsible

party (PRP) and thus would likely be unable to bring

similar claims in the future if the petitioner’s argument is

accepted. Thus, the City is an amicus in this proceeding

because it has an interest in ensuring that it can continue to

bring litigation that benefits its citizens and_ its

environment.

In addition to helping the City protect its

environment, CERCLA claims can also play an important

role in improving the City’s economy. New York City, like

many municipalities throughout the country, is burdened by

a large number of brownfield properties. CERCLA defines

a brownfield as_ real property “the expansion,

‘redevelopment, or reuse of which may be complicated by

the presence or potential presence of a hazardous

substance, pollutant, or contaminant.” 42 USC.

§ 9601(39)(A). Brownfields are synonymous with urban

blight, producing little tax revenue and few jobs, if any.

Brownfield redevelopment increases the. local tax base,

facilitates job growth, utilizes existing infrastructure, takes

development pressures off of undeveloped land, and

improves and protects the environment. EPA estimates that

there are currently 450,000 brownfields in the United States

and actively promotes the cleanup and reinvestment tn

these properties.

In New York City, brownfield properties are often

clustered together in_ historically lower income

neighborhoods or in former manufacturing districts along

the City’s waterfront. The economic viability of these

manufacturing districts - which were once the backbone of

the City’s econoniy - has dramatically declined in recent

years, as evidenced by a fifty percent reduction in the

number of manufacturing jobs in the City since the early

1960s. In addition, many lands along the City’s waterfront

were created in the nineteenth and early twentieth by filling

wetlands with contaminated construction and demolition

debris, incinerator ash, and other byproducts of an

industrialized society. This so-called “historic fill material”

is ubiquitous throughout certain areas of the City and is

prohibitively expensive to remove and dispose of properly.

The potential environmental conditions at these

properties ward off prospective developers, who fear

expensive remediation costs and the possibility of an

enforcement action by state or federal authorities. The City

has a broad strategy to revitalize these properties including,

but not limited to, applying for federal and state funding,

providing information and assistance to community and

business groups working on brownfields redevelopment,

and, perhaps most importantly, voluntarily investigating

and remediating brownfield sites.

A good example of the City’s work in this area is

iis ongoing investigation and remediation of an

approximately 200-acre tract of land on the Hunts Point

Peninsula, which is located in the borough of the Bronx.

Between the 1920s and 1950s, the Consolidated Edison

Company of New York (Con Edison) used a significant

portion of this land for a manufactured gas plant (MGP)

operation. MGPs were facilities that existed throughout the

country during most of the nineteenth and twentieth

centuries. These facilities produced natural gas for use in

home heating and lighting by gasifying coal, oil, and other

feedstocks. See generally New York State Department of

Environmental Conservation, The MGP Program at the

NYSDEC (April 2007) = <http://www.dec.state.ny.us/

website/der/mgp/dec_mgp.html>.

The MGP process created two distinct types of

hazardous wastes: coal tar, which is an oily liquid with high

levels of PAH compounds, and purifier waste, which

contains cyanide. Jd. In the era before environmental

regulation, many MGP plant operators would directly

dispose of this material on the grounds of the plant. The

NYSDEC estimates that there are roughly 300 former MGP

sites in New York state alone, with several dozen in New

York City. Jd. Because many of these MGPs ceased

operations decades ago, these sites are often hidden and

have unwittingly been developed over the years into a

range of industrial, commercial, and even residential uses.

Id.

—

The City purchased the site of the former Hunts

Point MGP in the late 1960s and early 1970s and, while the

City was able to develop some of the property for

commercial and industrial purposes, dozens of acres at the

site sat idle for decades due to economics and, ultimately,

its potential environmental conditions. In the late 1990s,

the City began carrying out a comprehensive plan to

revitalize the idle acreage at Hunts Point by entering into

several separate voluntary cleanup agreements (VCAs) for

the site with the NYSDEC.

Con Edison, the PRP, was not a party to the VCAs;

however, via a companion agreement, Con Edison

reimbursed the City for some of the investigative and

remedial costs associated with the MGP waste. This

agreement was prompted, at least in part, by the prospect of

the City bringing a cost recovery action against Con Edison

under CERCLA. Thus, even though a lawsuit was not

. filed, the threat of a private party CERCLA cost recovery

action prompted a former owner and operator to offer the

funding that led to the successful redevelopment of this

large brownfield site. In 2005, the historic Fulton Fish

Market was moved from lower Manhattan into a state-of-

the-art new facility at the site of the former MGP, bringing

600 jobs and a one billion dollar industry to the Bronx.

This positive turnaround may not have occurred had the

City not voluntarily remediated the 28,000 tons of coal tar

and 8,000 tons of purifier waste fouling the site. This

accomplishment was recognized in 2006 when the project

was awarded the Phoenix Award for Excellence in

Brownfields Redevelopment for EPA Kegion 2.

While the City’s accomplishments are noteworthy,

a staggering amount of work remains to be done, both in

abating threats to the environment and revitalizing

brownfields. It is currently estimated that there are

approximately 5,700 acres of contaminated land in New

York City. The City’s need to remediate these properties is

made more urgent by the fact that the City’s population is

_ projected to grow by another | million people by 2030,

thus increasing the need for livable and usable space. If the

City is no longer permitted to recover its voluntarily

incurred response costs from responsible parties under

CERCLA, addressing these issues will be made

substantially more difficult and expensive. Therefore, the

City has a strong interest in arguing for this Court to uphold

the right of all parties, whether they be innocent or

potentially responsible, to recover their response costs

under Section 107(a)(4)(B) of CERCLA.

SUMMARY OF ARGUMENT

Since 1980, CERCLA has unalterably stated that

responsible parties are liable for “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” and “‘any other necessary costs

of response incurred by any other person consistent with

the national contingency plan... .” 42 U.S.C. 9607(a)(1)-

(4)(A)(B). This broad net of both public and private

liability promotes CERCLA’s twin goals of “encouraging

expeditious, voluntary environmental cleanups while

holding responsible parties accountable for response costs

that their past activities induced.” See Metropolitan Water

Reclamation Dist. v. North Am. Galvanizing & Coatings,

473 F.3d 824, 836 (7th Cir. 2007). With respect to private

cost recovery claims, this Court recognized over a decade

ago that Section 107 “unquestionably provides a cause of

action for private parties to seek recovery of cleanup costs.”

See Key Tronic Corp. v. United States, 511 U.S. 809, 818

(1994).

In Cooper Industries, Inc. v. Aviall Services, Inc.,

543 U.S. 157, 165-68 (2004), this Court clarified that suits

for contnbution brought under Section 113(f)(1) of

CERCLA are only available to persons that have first been

sued under either Section 106 or Section 107. Since the

Court’s decision, three courts of appeal have held that the

language and intent of CERCLA clearly allow any person,

including PRPs, to bring cost recovery claims under

Section 107(a)(4)(B). See Consolidated Edison Co. of New

York v. UGI Utilities, inc., 423 F.3d 90, 99-100 (2d Cir.

2005); Atlantic Research, 459 F.3d at 834-35 (8th Cir.

2006); Metropolitan Water Dist., 473 F.3d at 834-36; see

also Schaeffer v. Town of Victor, 457 F.3d 188, 199-201

(2d Cir. 2006) (separate three-judge panel of the Second

Circuit reaffirming the holding and analysis set forth in

Consolidated Edison of New York). Cnly one court of

appeals has since ruled that Section 107(a)4)(B) actions’

are only available to innocent parties and that PRPs who

voluntarily incur response costs have no remedy under

CERCLA. See E.J. Dupont De Nemours & Co. v. United

States, 460 F.3d 515, 530 (3d Cir. 2006). The

interpretation given CERCLA by the United States Courts

of Appeals for the Second, Seventh, and Eighth Circuits is

the correct one, and should be affirmed by this Court.

These courts of appeals all recognized the

importance of voluntary remedial actions and private cost

recovery claims as an essential part of the CERCLA

statutory framework. The petitioner’s arguments to the

contrary are not only disconnected from CERCLA’s

language and purpose, but also fail to consider who these

so-called PRPs are, and how important voluntary cleanups

are to remediating this country’s contaminated land.

ARGUMENT

SECTION 107(a)(4)(B) OF CERCLA

CREATES A PRIVATE COST

RECOVERY CLAIM FOR’ ANY

PERSON WHO INCURS RESPONSE

COSTS

Petitioner’s position that CERCLA does not allow

PRPs to bring Section 107(a)(4)(B) claims is based upon

several misinterpretations of the statute, a number of which

are addressed below.

A. 107(a)(4)(B) is a Distinct Cause of Action from

113()Q)

Petitioner contends that PRPs are only permitted to

bring contribution actions under Section 113(f) regardless

of whether or not they voluntarily incurred response costs

at a site. However, as this Court noted in Cooper

Industries, the causes of action under 107(a)(4)(B) and

113(f) are “clearly distinct,” and available to plaintiffs who

have incurred different types of harm. 543 U.S. at 163 n. 3;

see also Consolidated Edison of New York, 423 F.3d at 99

(stating that Sections 107(a) and 113(f)(1) embody

mechanisms for “cost recovery available to persons in

different procedural circumstances”).

As recognized by the Eighth Circuit, Section 107(a)

claims are available to any plaintiff who actually incurs

response costs at a site, 1.e., voluntarily expends money

‘investigating and remediating a site contaminated by

hazardous waste without being prompted by a Section 106

or 107 enforcement action by the state or federal

government. See Atlantic Research, 459 F.3d at 835. In

contrast, plaintiffs who have been the subject of a 106 or

107 actions are only eligible to pursue contnbution actions

under Section 113(f). /d.

This interpretation of CERCLA is straightforward

as it rightly distinguishes between parties who act

voluntarily and those who do not. Parties who voluntary

take on cleanup responsibilities incur substantial, upfront

’ risks by investigating and remediating contamination at a

site before the extent of the contamination is fully

delineated. In contrast, parties who are subject to an

enforcement action take on no such risk, and in many

instances, are merely paying money while someone else is

doing the actual work. As analogized by the Court of

Appeals for the Second Circuit, if a “party expends funds

out of obligation under an administrative or court order or

final judgment, its liability may be similar to that of a tort

feasor’s liability for the doctor’s bills of the injured party.

Payment by the tort feasor does not mean it has incurred

doctor’s bills itself.” See Consolidated Edison of New York,

423 F.3d at 101 (internal citations omitted); see also United

States v. Taylor, 909 F. Supp. 355, 365 (M.D.N.C. 1995)

(stating when a party “does not conduct its own cleanup, it

has not incurred recovery costs”).

Thus, any party who has incurred actual response

costs at a site — as opposed to costs incurred as a result of

litigation — should be entitled to cost recovery under

Section 107(a)(4)(B).

B. Interpretation of the Phrase “Any Other Person”

Petitioner’s claim that the use of the phrase “any

other person” in Section 107(a)(4)(B) was intentionally

used by Congress to restrict private cost recovery claims to

innocent parties, is refuted by the Eighth Circuit’s more

logical interpretation that “‘any other person’ means any

person other than the statutonly enumerated United States

Government or a State or an Indian Tribe.” See Atlantic

Research, 459 F.3d at 835. The Eighth Circuit’s position is

firmly supported by a plain reading Section 107(a)(4)(A)

and (B) and an analysis of CERCLA’s definition of the

word “person.” See 42 U.S.C. § 9601(21).

CERCLA defines “person” as “an individual, firm,

corporation, association, partnership, consortium, joint

venture, commercial entity, United States Government,

State, municipality, commission, political subdivision of a

State, or any interstate body.” Jd. § 9601(21) (emphasis

added). Given that the definition of person includes both

the United States and the States, if Section 107(a)(4)(B) did

not use the word “other” to qualify the word “person,”

CERCLA would provide two separate avenues for the

United States and the States to bring cost recovery actions:

Section 107(a)(1(A) - in which they are specifically

mentioned — and 107(a)(4)(B) — in which they are included

only by virtue of the statutory definition of “person.” Such

a result would be illogical as Congress intended the two

causes of action to have different burdens of proof. See

Carson Harbor Village, Ltd. V. County of Los Angeles, 433

F.3d 1260, 1265 (9th Cir. 2006); United States v. El.

Dupont De Nemours & Co., 432 F.3d 161, 178 (3d. Cir.

2005).

Thus, it is likely that, when adding the word

“other,” the authors of CERCLA merely recognized the

defimtional overlap caused by the use of the word “person”

in Section 107(a)(4)(B) and decided to provide a simple

clarification. However, as petitioner admits, “the

legislative history does not shed light on that particular

change.” Petitioner’s Brief on the Merits (Pet. Brief), at 19.

The lack of legislative history surrounding this change

supports the interpretation that this change was intended to

be minor, and not, as petitioner contends, an exclusion of

an entire class of private CERCLA plaintiffs from the

ability to bring a cost recovery action. See, e.g., Wickland

Oil Terminals v. Asarco, Inc., 792 F.2d 887, 891 (9th Cir.

1986) (finding no basis for granting the “ordinary word

[other]” a critical meaning in interpreting CERCLA

107(a)(4)(B) when it has “an alternate, more plausible

purpose”). Thus, the interpretation of the phrase “any other

person” by the Eighth Circuit should be upheld.

Cc. Private Cost Recovery Claims Brought by PRPs

Will Not Create A Disincentive to CERCLA

Settlements

Petitioner warns that allowing private cost recovery

actions by PRPs under Section 107(a)(4)(B) will

discourage settlements with the state and _ federal

government and thus interfere with a_ key objective of

CERCLA. It is without question that an objective of

CERCLA and the Superfund Amendments and

Reauthorization Act of 1986 (SARA), Pub. L. No. 99-499,

100 Stat. 1613, was to encourage PRPs to quickly enter into

settlement agreements with the United States and the states

in order to avoid protracted litigation. See United

Technologies v. Browning-Ferris, 33 F.3d 96, 102 (1st Cir.

1994). To promote this goal, CERCLA offers settling

PRPs with contribution protection “for claims for

contribution regarding matters addressed in the settlement

[of a 106 or 107 claim].” See 42 U.S.C. 9613(f(2). Section

113(f)(2) also implicitly threatens parties with the prospect

of disproportionate liability if they do not enter into a

settlement agreement. Petitioner’s argument, however, that

107(aX(4)(B) claims brought by PRPs will impede the

statute’s promotion of settlements, is legally flawed and

premised on unrealistic, hypothetical situations.

First, it is wrong for the petitioner to assert that

107(4)(B) claims brought by PRPs will uniquely interfere

with the contribution protections offered by Section

113(f(2). A settling party is equally threatened by post-

settlement cost recovery claims brought by innocent parties

because Section 113(f)(2) offers no protection from these

claims either. See 42 U.S.C. 9613(f) (offering liability

protection “for claims for contribution regarding matters

addressed in the settlement’’).

To illustrate, a common issue at inactive hazardous

waste sites is offsite migration of onsite contamination via

the groundwater or other media. These migrating

contaminates have the potential to contaminate the soil and

groundwater of adjacent properties owned by individuals

who have nothing to do with the activities on the inactive

hazardous waste site. As the petitioner admits, these

innocent landowners have the right to recover any response

costs under Section 107(a)(4)(B). See Pet. Brief. 16.

Thus, if a PRP enters into a settlement with the

United States or a state with regard to onsite contamination,

they still face the prospect of liability from cost recovery

claims brought by these innocent third-parties. Similarly,

under certain circumstances, they could face similar claims

from subsequent purchasers of the property. See Pet. Brief,

at 16. Thus, the threat of post-settlement liability and a

lack of full contribution protection will not be eliminated

by preventing PRPs from recovering their response costs

under Section 107(a)(4)(B).

Second, petitioner’s argument that PRPs will forego

settlement with the United States or a state in order to take

advantage of the joint and several liability offered by a

Section 107(a) claim is flawed because it would be unusual,

if not impossible, for one PRP to actually obtain joint and

several liability against another. See Pet. Bnef at 37. As

the Second Circuit has made clear in Consolidated Edison

of New York “a person sued under Section 107(a) . . . [may

bring] a counterclaim under Section 113(f)(1) for offsetting

contribution against the plaintiff volunteer who, if sued,

would be liable under Section 107(a).””. See Consolidated

Edison of New York, 423 F.3d at 100, n. 9. This nght of

contribution is available whether or not the United States or

a State has brought an enforcement action. See 42 U.S.C. §

9613(f)(1) (stating that “nothing in this subsection shall

diminish the right of any person to bring an action for

contribution the absence of a civil action under 9606 or

9607 of this title.’’)

While petitioner complains that this framework

shifts the burden onto the defendant PRP for bringing a

counterclaim to avoid joint and several liability, the burden

is minimal and not any more burdensome than having to

assert contributory negligence to avoid joint and several

lability in a negligence claim. This minimal burden is

further reduced by the fact that 113(f) counterclaims are not

compulsory. See Amcast Indus. Corp. v. Detrex Corp., 2

F.3d 746, 748 (7th Cir. 1993) (“The statute is explicit that a

counterclaim for response costs is not compulsory .. . a

result consistent with general law’). Thus, given that the

chance of obtaining joint and several liability against

another PRP is slim to nil, it is unlikely that a PRP would

choose to bring a 107(a)(4)(B) action over obtaining the

liability release and contribution protection offered by a

settlement with the United States or a state.

Finally, CERCLA’s goal of encouraging prompt

settlements with the United States or the states only comes

into play when these entities are actively enforcing against

the PRPs at the site. As recognized by the Seventh Circuit

in Metropolitan Water District, the petitioner’s concerns

regarding “diminished settlement leverage” do not exist

- when the United States or the states “are not in the picture”

and thus have “no reason to pursue a settlement.” See

Metropolitan Water Dist., 473 F.3d at 837. As evidenced

by the City’s experiences in conducting voluntarily

cleanups as discussed above, it is often the case that once a

PRP takes the lead in conducting a response action, there 1s

no need for the EPA or a state regulatory agency to bring

an enforcement action against the self-motivated PRP.

In the Cross Harbor case, for instance, the City

notified the NYSDEC of its plan and then spent its own

resources investigating and remediating the hazards on its

property. In such circumstance it would be illogical, and a

’ great waste-of governmental resources, to do as the

petitioner suggests and “enter into a settlement with the

federal or state government.” Pet. Brief, at-43. Such a

statement wrongly assumes that the individual states and

federal government have the desire or the resources to

bring CERCLA actions in every instance of hazardous

contamination that occurs in this country, even when

another entity is ready and willing to conduct the cleanup.

Moreover, if the states or federal government decline to

take action, a PRP has no recompense for his voluntary

action due to the lack of involvement of a federal or state

enforcer.

Additionally, where the states and _ federal

government are absent in a cleanup, CERCLA’s goal of

achieving prompt settlements can still be carried out by

private parties. Almost all of the CERCLA actions that the

City has brought or planned have resulted in some form of

settlement with the other PRPs. Most notably, in City of

New York v. Cross Harbor, the City was able to obtain a

settlement with several defendants for hazardous waste

response costs that it incurred at its rail facility. Similarly,

at the Hunts Point site, the City was able to use CERCLA

as a key negotiating point with the PRP in order to achieve

an agreement. These examples of agreements or

settlements arising out of private cost recovery actions

debunk the hypothetical concerns offered by the petitioner

in support of its argument.

LIMITING COST RECOVERY

CLAIMS TO NON-PRPS’~ WILL

EXCLUDE FAULTLESS PRPS FROM

BRINGING COST RECOVERY

ACTIONS

Because this case centers around the right of PRPs

to bring claims under Section 107(a)(4)(B) of CERCLA, it

is important for this Court to consider who can qualify as a

PRP under CERCLA and how broadly that term has been

interpreted over the years by federal courts. It is also

important for this Court to consider whether the language

of section 107(a)(4)(B) supports petitioner’s contention that

bona fide purchasers or other parties who qualify for

CERCLA defenses may bring cost recovery claims while

PRPs cannot.

A. The Broad Scope of PRP Status

In general, CERCLA sets out four categories of

persons who are liable for response costs: (i) current

owners and operators; (11) past owners and operators who

owned or operated the facility at the time of the disposal of

hazardous substance; (iii) persons who arrange for

hazardous substance to be disposed of at the facility where

there is a release; and (iv) persons who transport hazardous

substances to a facility where there is a release. See 42

U.S.C. 9607(a)(1)-(4). Congress intentionally crafted these

categories of covered persons to be broad and the federal

courts have broadened them even further by interpreting

CERCLA as requiring no finding of causation or fault. See

Farmland Industries, Inc. v. Morrison-Quirk Grain Corp.,

987 F.2d 1335, 1339 (8th Cir. 1993); United States v. Alcan

Corp., 990 F.2d 711, 721 (2d Cir. 1993); State of New

York v. Shore Realty Corp., 759 F.2d 1032, 1044 (2d Cir.

1985).

Over the years, federal courts have interpreted

CERCLA’s provisions as granting PRP status to

individuals who did not directly cause or participate in the

original release or disposal of contamination at the site.

See, e.g., Westfarm Assocs. v. Wash. Suburban Sanitary

Comm 'n, 66 F.3d 669, 675-80 (4th Cir. 1995) (holding that

a municipal operator of a sewer system is liable for the acts

of a third-party that discharges hazardous waste into the

system); Western Props. Serv. Corp. v. Shell Oil Co., 358

F.3d 678, 689-90 (9th Cir. 2004) (holding that non-

polluting landowner of a contaminated site is a PRP under

CERCLA); Redwing Carriers v. Saraland Apts., 94 F.3d

1489, 1512 (11th Cir. 1996) (holding that operator liability

can occur when a party disperses contaminated soil during

the course of grading and filling a construction site);

Tanglewood East Homeowners v. Charles-Thomas, Inc.,

849 F.2d 1568, 1573-74 (Sth Cir. 1988) (holding that

developers who graded and improved contaminated

property could be subject to both operator and arranger

liability); and Elementis Chems., Inc. v. T H Agric. &

Nutrition, L.L.C., 373 F. Supp. 2d 257, 268-69 (S.D.N.Y.

2005) (holding that current owner who undertakes response

action is a PRP regardless of whether the owner causes the

release). These cases and others show that CERCLA

liability has been held to attach to innocent and unassuming

entities who engage in normal activities such as readying

what turns out to be contaminated site for development or

even operating a municipal sewer system.

That these non-polluting PRPs can be held liable

under CERCLA for their involvement with the

contaminated site is not necessarily inconsistent with the

statute’s language or intent. What is inconsistent, however,

is petitioner’s argument that, by virtue of their legal status

as PRPs, these otherwise innocent parties are barred from

recovering their response costs from the individuals who

actually caused the contamination. The petitioner’s

interpretation that PRP status bars an action under

107(a)(4)(B) would result in inequities to these non-

polluting PRPs, especially in urban areas where

environmental conditions often remain concealed long after

the conta.ainating activities on the site have ceased.

A telling example of how PRP status is too easily

achieved under CERCLA in urban areas is evidenced by

the continued finding of new MGP contamination

throughout New York City and State. Although the

NYSDEC has been aggressively attempting to identify new

MGP sites for years now, it is still working to identify how

many other sites may exist in New York, and where they

are located. At least three times in the past ten years, the

City has uncovered’ previously unknown MGP

contamination on properties it owned well before the

enactment of CERCLA. For at least one of these sites,

nothing in the property records even indicated that MGP

contamination was present on the site.

Yet on all of the sites, the City (or other private

owners) could be considered a PRP merely because it is the

owner at the time the previously hidden contamination is

identified. Moreover, MGP contamination is only one

example of hidden environmental conditions that may be

discovered in the course of a City development project. To

bar the City from bringing cost recovery actions against

prior owners, operators, arrangers, and transporters, merely

because the City owns or has used the land where the

contamination is found, would expose the City and other

similarly situated municipalities to extensive liabilities.

These potential liabilities would have a chilling

effect on developing properties that may be contaminated

because any developer, either the City or a private entity,

would have no federal claim to offset the oftentimes

extensive investigation and remedial costs unless, in each

instance, the United States or the state brings an

enforcement action. As recognized by the Second Circuit

in Consolidated Edison of New York, “[w]ere this economic

disincentive in place, such parties would likely wait until

they are sued to commence cleaning up any site for which

they are not exclusively responsible because of their

inability to be reimbursed for cleanup expenditures in the

absence of a suit.” 423 F.3d at 100. This chilling effect is

directly contrary to CERCLA’s intent of encouraging

parties to remediate contaminated properties.

B. Nothing In Section 107(a) Creates A Distinction

Between Innocent Landowners or Bona Fide

Purchasers and PRPs

Although the petitioner claims that PRPs as

enumerated under Section 107(a)(1)-(4) have no mght to

bring a claim under Section 107(a)(4)(B), petitioner does

claim that certain types of landowners who might otherwise

meet the definition of a PRP should still be allowed to

bring Section 107(a)(4)(B) claims if they can qualify as

either an “innocent landowner” or a “bona fide purchaser”

under the statute. Petitioner’s attempt to create a

distinction that some, but not other, PRPs can bring claims

under the Section 107(a)(4)(B) is not supported by the

statutory text.

The “innocent landowner” and “bona fide

purchaser” provisions of CERCLA cited by the petitioner

are clearly intended to be affirmative defenses against

107(a) claims, not elements of the claims themselves. See

42 U.S.C. 9601(35), 9601(40), 9607(b) and 9607(r)(1).

Nothing in the statutory text indicates that these provisions

are intended to be used as methods by which PRPs can

establish standing to bring a claim under 107(a)(4)(B).

Indeed, while it is true that certain courts of appeal have

read these sections consistent with the petitioner’s view,

see, e.g., Western Props. Serv. Corp, 358 F.3d at 690 n. 53,

the language of these sections is expressly used in terms of

establishing affirmative defenses. For example, Section

107(b) is expressly entitled “Defenses,” and Section

107(r)(1) states that a bona fide purchaser shall “not be held

liable as long as [he] does not impede the performance of a

response action or natural resource restoration.” See 42

U.S.C. 9607(b) and 9607(r)(1). Thus, while the petitioner

criticizes the Eighth Circuit of judicially inferring a new

cause of action for PRPs who incur response costs,

petitioner is proposing that this Court recognize distinctions

that plainly do not exist in Section 107(a)(4)(B).

Furthermore, accepting petitioner’s argument would

require courts to make detailed factual determinations

whether a plaintiff meets the detailed standards for an

“innocent landowner” and “bona fide purchaser,” an

evaluation that Section 107(a)(4)(B) does not envision. It

is also likely that, at least in some cases, the threshold issue

of whether the plaintiff is a PRP will not be decided until

the case moves forward to trial. This would result in great

judicial inefficiencies as many CERCLA cases often take at

least several years to reach that point.

This unwieldy framework that would have parties

argue whether a plaintiff is a PRP as a threshold issue will

further complicate the already muddied world of CERCLA

_ litigation. The statute does not require it and it thus should

be rejected. Instead, a far more clear and workable solution

would be to interpret the statute as it is wntten: allowing

any person who has incurred response costs to bring a

Section 107(a) cost recovery claim.

Ill

VOLUNTARY RESPONSE ACTIONS

ARE CRITICAL TO STATE AND

‘FEDERAL EFFORTS TO ADDRESS

HAZARDOUS CONTAMINATION

The petitioner contends that CERCLA was not

intended to foster voluntary remediation of sites but instead

intended to encourage “negctiated settlements leading to

supervised cleanups.” Pet. Brief, at 41. Petitioner’s

argument fails to acknowledge, however, that over the past

fifteen years the federal and state governments have moved

significantly away from administrative settlements for

moderately contaminated sites and instead have actively

encouraged parties to voluntanly remediate the

contamination. The substantial gains made by these

voluntary remedial programs could be lost if vojunteers are

now forced to endure the financial burden they believed

would be offset by their ability to bring CERCLA claims.

In the late 1980s, limited state and federal

resources, coupled with trepidation in the private sector for

taking on expensive cleanup obligations, led to a hindrance

of cleanups at brownfields and other contaminated sites.

See United States General Accounting Office, Brownfield

Development: Stakeholders Report that EPA’s Program

Helps to Redevelop Sites, but Additional Measures Could

Complement Agency Efforts, GAO-05-94, at 10 (December

2004). In response, “some states began to establish

voluntary cleanup programs that allow private parties to

identify and clean up sites, use less _ extensive

administrative procedures, and obtain some relief for future

state liability for past contamination.” /d. The programs

also proved beneficial to the federal and state governments

because encouraging voluntary cleanups by PRPs allowed

EPA and state enforcement agencies to focus their limited

resources on the most seriously contaminated sites. See

United States General Accounting Office, State Voluntary

Cleanup Programs Provide Incentives to Encourage

Cleanups, GAO/RCED-97-66, at 14 (April 1997).

In 1995, EPA began authorizing states to use

federal funds to develop voluntary cleanup programs. Jd.

In November 1996, EPA’s Office of Solid Waste and

Emergency Response issued a guidance document entitled

“Interim Approaches for Regional Relations with State

Voluntary Cleanup Programs.” See Memorandum from

Elliot Laws, Assistant Administrator, Office of Solid Waste

and Emergency Response, and Steven A. Herman,

Assistant Administrator, Office of Enforcement and

Compliance Assurance (Nov. 14, 1996)

<http://www.epa.gov/brownfields/ntml-doc/vep.htm>. In

the guidance, which is still in effect today, EPA set out

baseline criteria which it employs to evaluate the adequacy

of state voluntary cleanup programs. EPA memorializes its

acceptance of the state voluntary cleanup program by

entering into a Memorandum of Agreement (“MOA”) with -

a state. In return, EPA provides a non-binding promise to

avoid taking any enforcement action under 106 and 107 of

CERCLA at sites undergoing a state supervised voluntary

cleanup. Since 1996, EPA has entered into MOA’s with

twenty-three individual states in order to promote their use

of voluntary cleanup programs. See Memorandum of

Agreement on State Voluntary Cleanup Programs

(Mar. 27, 2007) <http://www.epa.gov/brownfields/html-

doc/statemoa.htm>.

The federal government’s promotior of voluntary

cleanup programs became even stronger in 2002 when

Congress passed the Small Business Liability Relief and

Brownfields Revitalization Act, Pub L. 107-118, 115 Stat.

2356, which, among other things, increased federal funding

for these programs and formally dissuaded EPA from

taking ERCLA enforcement action at “eligible response

sites” that are enrolled in a state program that meets certain

criteria. See 42 U.S.C. 9601(41)(B)(ii). In large part

because of EPA’s efforts to promote these programs, all

fifty states have some version of a voluntary cleanup

program available to both PRPs and non-PRPs.

New York State began its voluntary cleanup

program in 1994 and has accepted 762 sites into the

program. See New York State Department of

Environmental Conservation, Annual Remedial Programs

Report for State Fiscal Year 2005-06, at 7 (2006)

<http://www.dec.state.ny.us/website/der/2006annualreport.

pdf>. New York State’s voluntary program was such a ~

success that the New York State Legislature codified the

program in 2003 and bolstered it by offering innocent and

PRP remedial parties tax incentives for voiuntarily

remediating sites. See generally N.Y. Environmental

Conservation Law § 27-1401 et seg. (McKinney 2006).

The codification of the voluntary program in New York

State is indicative of the decided national trend of moving

away from enforcement-based cleanups and expanding —

voluntary remedial programs.

The City has taken advantage of New York State’s

voluntary cleanup program to address contamination at a

number of complicated sites, most notably the Hunts Point

Peninsula in the Bronx. The City has entered into several

voluntary cleanup agreements to address various parcels at

the 200-acre site. The voluntary cleanup program has

offered the City the regulatory flexibility and limited state

oversight necessary to complete such an extensive

investigation and remediation in a timely and efficient

manner. Furthermore, other large public entities such as

Con Edison have used New York State’s voluntary cleanup

program to address MGP contamination at various sites

throughout the state. See Consolidated Edison of New

York, 423 F.3d at 93 (describing Con Edison’s use of

voluntary cleanup program to investigate and remediate

former MGP sites).

In its brief, the petitioner argues that CERCLA was

not intended to promote “wholly voluntary, unsupervised,

sua sponte cleanup” operations but instead encourages

PRPs to enter into settlement agreements or consent

decrees to resolve their liability at a site. Pet. Brief, at 41-

43. The petitioner asserts that PRPs entering into such

agreements with the federal or state governments provides

the PRP with a right to pursue contribution under Section

113(f)(3)(B). Pet. Brief, at 43 note 18. Importantly, not all

voluntary cleanups are “unsupervised” as petitioner

suggests, though they certainly require fewer resources of

the federal and state government than formal administrative

or judicial enforcement actions.’ Additionally, the

2 Petitioner’s contention _ that voluntary cleanups are

“unsupervised” implies that such cleanups are performed

incorrectly. However, as petitioner fails to recognize, any

petitioner does not address whether voluntary cleanup

agreements with state environmental agencies would also

provide PRPs with a right of action under CERCLA even

though they are not enforcement actions per se. Although

it is the City’s position that all cleanups, supervised or

unsupervised, should give rise to a private cost recovery

claim, it is especially important for this Court to recognize

that PRPs who perform cleanups pursuant to a voluntary

cleanup agreement with a state environmental agency have

a private right of action to pursue their response costs under

either 107(a)(4)(B) or 113(f)(3)(B). Petitioner’s proposal

does neither and forces a would-be volunteer to wait and be

sued by the United States or a state, before it has any

_ chance of recovery.

If the Court does not make the distinction between

supervised and unsupervised voluntary cleanups, PRPs who

conduct thorough, government-approved cleanups may lose

their mght to recover some of their cleanup costs. Indeed,

as a result of Cooper Industries, several courts have

disallowed contributions actions because the PRPs

conducted their cleanups pursuant to state approved

voluntary agreements rather than former administrative

consent decrees or enforcement actions. See, e.g.,

Consolidated Edison of New York, 423 F.3d at 96 and

Differential Development-1994, Ltd. v. Harkrider Distrib.

private party that hopes to bring a Section 107(a)(4)(B) claim to

recover its costs must conform its cleanup to the mgorous

procedures and protocols set forth the National Contingency Plan

(NCP). See 40 C.F.R. Part 300 et seg. Those who do not are

denied recovery under CERCLA. See e.g., Carson Harbor

Village, LTD v. County of Los Angeles, et al., 433 F.3d 1260 (9th

Cir. 2006). Thus, all private cost recovery actions must meet

‘objective standards promulgated by EPA in order to be

successful.

Co., Case No. H-05-3375, 2007 U.S. Dist. LEXIS 1592,

*27 -*41 (D. Tex. 2007).. A holding that bars PRPs who

enter into voluntary cleanup agreements from recovering

‘their response costs would not only be inequitable, but it

would effectively eviscerate the gains made by the national

shift toward voluntary cleanup programs over “command

and control” cleanups. Thus, this Court should recognize

this distinction to avoid such a result.

CONCLUSION

For all the foregoing reasons, amicus respectfully

urges the Court to affirm the decision of the Court of

Appeals for the Eighth Circuit to avoid serious negative

consequences for all persons who engage in the voluntary

cleanup and remediation of hazardous contamination.

Respectfully submitted,

MICHAEL A. CARDOZO

Corporation Counsel of the

City of New York

100 Church Street

New York, New York 10007

(212) 788-1568

LEONARD J. KOERNER,* .

SUSAN M. KATH,

CHRISTOPHER G. KING,

DANIEL GREENE,

*Counsel of Record

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.