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Atlantic Richfield Gets Partial Win in Superfund SCOTUS Case (3)

April 20, 2020, 2:50 PMUpdated: April 20, 2020, 7:43 PM

Atlantic Richfield Co. might be off the hook for added cleanup liability at a Montana site after the Supreme Court on Monday partially resolved a high-stakes Superfund case in the oil company’s favor—but the door is still open for similar claims in other cases.

All eyes are now on the Environmental Protection Agency and Montana courts, as they decide what happens next.

At issue in the case is an effort by Montana landowners who wanted Atlantic Richfield to pay for additional cleanup work in their backyards. The justices’ 7-2 opinion says the landowners can’t pursue those claims without the EPA’s blessing.

“That’s good because industry needs certainty in knowing that once they agree to a cleanup plan with U.S. EPA, that they’re not going to be subject to attacks from adjoining landowners, or in this case, landowners living on the site,” said Michael Blumenthal, an environmental attorney at McGlinchey Stafford PLLC in Cleveland.

But the decision also sidesteps the company’s broader argument that federal Superfund law preempts the types of claims the landowners brought.

“In the absence of EPA approval of the current restoration plan, we have no occasion to entertain Atlantic Richfield’s claim that the Act otherwise preempts the plan,” Chief Justice John Roberts wrote.

It’s a mixed result, Harvard Law School professor Richard J. Lazarus said, because the decision “keeps alive the potential for suits under state law in state courts related to Superfund cleanups in future cases,” but with the “major catch” that challengers must first get the EPA’s approval.

“This opinion is likely to be scrutinized, interpreted and reinterpreted, and leave district and appellate courts, not to mention state courts, struggling to apply its multifaceted holding,” said Shoshana Schiller, a partner at Manko, Gold, Katcher & Fox LLP in Bala Cynwyd, Pa., whose practice areas include brownfields and Superfund cases.

The Supreme Court remanded the case to Montana state courts to review the landowners’ claims in light of their status as “potentially responsible parties” under the Superfund law—a classification that prevents them from conducting cleanup work without EPA authorization.

Roberts authored the majority opinion, with all other justices signing on for part of the analysis—that the Supreme Court has jurisdiction over the case—but splitting on other sections.

Justice Samuel Alito filed a separate opinion that partially dissented from the majority’s determination that state courts can review challenges to EPA-approved cleanup plans.

Justice Neil Gorsuch also filed a partial dissent, joined by Justice Clarence Thomas, saying the outcome in the case “strips away ancient common law rights from innocent landowners and forces them to suffer toxic waste in their backyards, playgrounds, and farms.”

‘Working with the EPA’

Joseph R. Palmore, an attorney at Morrison & Foerster LLP in Washington, represented the landowners before the Supreme Court. The Opportunity, Mont., landowners are “pleased” that the court rejected Atlantic Richfield’s attempt to dismiss their remedy, he said.

“We look forward to working with the EPA toward a cleanup that will protect the environment and safeguard the health and property of the residents of Opportunity,” he said.

Atlantic Richfield is continuing cleanup work on other parts of the Montana site in accordance with EPA’s existing plan. The court “confirmed Atlantic Richfield Company’s long-held position that Superfund site landowners cannot implement an alternative cleanup plan that the EPA has not approved,” company spokesman Michael Abendhoff said.

The EPA is reviewing the court’s decision, an agency spokesman said.

The case involves the 300-square-mile Anaconda Co. Smelter Superfund site, where copper smelting spewed lead and arsenic for years. Atlantic Richfield bought and shut down the plant decades ago and has worked with the Environmental Protection Agency since 1983 to clean it up.

Nearly 100 landowners who say harmful amounts of heavy metals remain in the soil filed suit in Montana state court to force the company to fund additional restoration work.

Montana’s Supreme Court previously allowed the landowners to proceed with their case. The company brought the case to the U.S. Supreme Court.

‘Two Cooks in the Kitchen’

Environmental lawyers and companies involved in other Superfund cleanups have watched the case closely, with some expressing concern that a loss for Atlantic Richfield would spawn similar landowner lawsuits across the country.

John M. Barkett, a partner at Shook, Hardy & Bacon LLP in Miami who handles Superfund and waste cases, said the court properly recognized the EPA’s leading role in cleanups.

“You can’t really tolerate a situation where there are two cooks in the kitchen,” he said. “You have to have one authority dealing with cleanup.”

Lewis & Clark Law School professor Craig Johnston, who previously said he was nervous that the case could disrupt Superfund law nationwide, said he was relieved by the outcome because it prevents states and other parties from interfering with EPA cleanup decisions.

Landowner advocate Jonathan Wood, meanwhile, criticized the ruling for setting up “unnecessary procedural obstacles” for landowners invoking their property rights. But, he said, it remains to be seen how the next phase of state-court litigation will play out.

“Ultimately, so many questions are left unanswered that we’ll have to wait and see what happens in the end,” he said.

Wood is an attorney for the Pacific Legal Foundation, which filed a brief supporting the Montana landowners in the case.

State Versus Federal Law

The Anaconda smelter closed the same year Congress created the EPA’s Superfund program to address the nation’s worst environmental pollution.

The law empowered the EPA to investigate pollutants, identify parties that could be liable for putting them there, decide on a remedy, and agree on cleanup with those parties to get the work done.

The Trump administration and business groups supported Atlantic Richfield in the case. Property rights advocates and Democratic attorneys general from 14 states backed the landowners.

During oral arguments in December, justices on both ends of the ideological spectrum seemed troubled by the prospect of hindering landowner rights, but reluctant to interfere with the EPA’s authority.

The case is Atlantic Richfield v. Christian, U.S., No. 17-1498, 4/20/20.

(Adds comment from Atlantic Richfield in 15th paragraph.)

To contact the reporters on this story: Sylvia Carignan in Washington at scarignan@bloombergenvironment.com; Ellen M. Gilmer in Washington at egilmer@bloombergenvironment.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergenvironment.com; Chuck McCutcheon at cmccutcheon@bloombergenvironment.com; Rebecca Baker at rbaker@bloombergenvironment.com

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