By Nathalie Camarena and Rebecca Andrews

The U.S. Supreme Court determined that the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA or the Act) did not strip Montana courts of jurisdiction over landowners’ state law tort claims for restoration damages against Atlantic Richfield Company (ARCO). The Court, however, also determined the landowners were potentially responsible parties a (PRP) under CERCLA. As a result, the Act required the landowners to seek U.S. Environmental Protection Agency (EPA) approval for their desired restoration plan. [Atlantic Richfield Co. v. Christian et.al., ___U.S.___, 140 S.Ct. 1335 (April 20, 2020).]

Factual and Procedural Background

For nearly a century, the Anaconda Copper Smelter in Butte, Montana contaminated an area of over 300 square miles with arsenic and lead. For 35 years, the EPA worked with the owner and defendant, Atlantic Richfield Company (ARCO) to implement a cleanup plan under the Act. To date, ARCO estimates that it has spent roughly $450 million to remediate more than 800 residential and commercial properties in accordance with the approved cleanup plan.

In 2008, a group of 98 landowners sued ARCO in Montana state court under common law tort claims of nuisance, trespass and strict liability, seeking restoration damages that went beyond EPA’s cleanup plan. For example, the landowners sought a maximum soil contamination level of 15 parts per million of arsenic, rather than the 250 parts per million level set by EPA, to excavate soil within residential yards to a depth of two feet rather than EPA’s chosen depth of one, and to capture and treat shallow groundwater, a plan EPA rejected as costly and unnecessary to secure safe drinking water. The estimated cost for the additional measures was $50 to $58 million.

ARCO argued that CERCLA stripped the Montana courts of jurisdiction over the landowners’ state law claim for restoration damages. The Montana Supreme Court held that the landowners’ plan was not a challenge to the EPAs cleanup plan because it, “would not stop, delay, or change the work EPA is doing.” It reasoned the landowners were:

“. . .simply asking to be allowed to present their own plan to restore their own private property to a jury of twelve Montanans who will then asses the merits of that plan.”

The Montana Supreme Court also held that the landowners were not PRPs prohibited from taking remedial action without EPA approval under § 122(e)(6) of the Act. It reasoned that the landowners were not Potential Responsible Parties (PRPs) because they had never been treated as PRPs for any purpose—by either the EPA or ARCO during the entire 30 years since the Copper Smelt was designated as a Superfund site, and that the six-year statute of limitations for a claim against the landowners had run.

Atlantic Richfield petitioned the U.S. Supreme Court for review.

The U.S. Supreme Court’s Decision

Before the High Court was whether CERCLA stripped the Montana state courts of jurisdiction over the landowners’ claim for more stringent restoration damages and, if not, whether the Act required the landowners to seek EPA approval of their restoration plan.

Jurisdictional Inquiry

The Court considered and rejected two arguments regarding jurisdiction. First, the Court rejected the landowners’ argument that the Court lacked jurisdiction to review the Montana Supreme Court’s decision.

The U.S. Supreme Court is authorized to review final judgments or decrees rendered by the highest court of a state. To qualify as final, a state court judgment must be an effective determination of the litigation and not merely an interlocutory or intermediate step. The landowners argued the Court lacked jurisdiction because the Montana Supreme Court’s decision was a writ of supervisory control, which allowed the case to proceed to trial, but trial had not taken place. The U.S. Supreme Court rejected this argument, noting that Supreme Court precedent provides that a writ of supervisory control issued by the Montana Supreme Court is a final judgement within the Court’s jurisdiction.

Second, the Court considered Atlantic Richfield’s argument that CERCLA § 113 stripped Montana courts of jurisdiction over the landowners’ lawsuit. Section 113(b) of the Act provides that U.S. District Courts have exclusive original jurisdiction over all controversies arising under the Act. The Court rejected this argument, explaining that this case does not “arise under” the Act as the term is used in CERCLA § 113(b). Instead, landowners’ common law claims for nuisance, trespass and strict liability arose under Montana law. Thus, CERCLA did not deprive Montana state courts of jurisdiction over those claims.

Responsible Party Inquiry

The U.S. Supreme Court next considered whether CERCLA required the landowners to seek EPA approval of their restoration plan. Section 122(e)(6) of the Act requires PRPs to obtain EPA approval of a restoration plan that is inconsistent with an approved plan. Section 107(a) of the Act lists four classes of PRPs.

The first category includes any “owner” of a “facility.” “Facility” includes:

“. . .any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located.”

The Court determined that arsenic and lead are hazardous substances, and that because they have come to be located on the landowners’ properties, the landowners are PRPs. As a result, under § 122(e)(6), EPA must approve of the landowners’ more stringent restoration plan.

The Opinions of Justices Alito, Gorsuch and Thomas

Justices Alito, Gorsuch, and Thomas concurred in part and dissented in part. Justice Alito concurred with the Court’s majority holding that it has jurisdiction to decide the case and that the landowners are PRPs under § 122 (e)(6) of the Act. However, he was unwilling to join the Court’s holding that state courts have jurisdiction to entertain “challenges” to EPA-approved plans under CERCLA.

Justices Gorsuch and Thomas concurred with the Court’s holding that the Court has jurisdiction to decide the case, but dissented with the Court’s holding that the landowners were PRPs under the Act.

Conclusion and Implications

The U.S. Supreme Court’s decision introduces the possibility for property owners impacted by CERCLA Superfund sites to sue under common law state tort claims to implement a more stringent restoration plan than the plan approved by EPA. Further, the Court’s interpretation of the Act makes it possible that the property owners could also PRPs, thereby requiring EPA approval prior to bringing such state law claims, if hazardous substances from a Superfund site have “come to be located” on their property. The High Court’s opinion is available online at: https://www.supremecourt.gov/opinions/19pdf/17-1498_8mjp.pdf