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

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0501%3A25

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2007
- **Citation:** 551 U.S. 128

## Text

EU bS7Te
35 pa @

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

iv

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

vi

_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
© BORSSD, GB ULB, SEGUIGDD ccccccccosccrcssceccccscesccssees 20
§ 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
© 1D Mad, 42 US.C. SGOT O) ..00cccerercescesceccsessrcoees 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)
.

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

6

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

7

_ 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

8

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.

9
ARGUMENT

I

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

10

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

11

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.

12

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

13

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

14

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

15

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

-

16

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

17

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

18

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

19

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”

20

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

21

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

22

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)
. 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

23

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) .

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)
. 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

24

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

25

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.

26

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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0501%3A25. Public record. Not legal advice.