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SCOTUS Superfund Ruling Could Spawn New State Law Claims (1)

April 21, 2020, 6:16 PMUpdated: April 21, 2020, 7:44 PM

New lawsuits from frustrated property owners and environmental groups could arise from the Supreme Court’s Monday opinion on a dispute between landowners and Atlantic Richfield Co. at a Montana Superfund site, attorneys said.

A group of nearly 100 Montana landowners, whose properties are part of the Anaconda Co. Smelter Superfund site, sought additional soil cleanup under state law after the Environmental Protection Agency and Atlantic Richfield carried out an agreed-upon remedy.

Their dispute rose to the U.S. Supreme Court, where the justices decided Monday the EPA and Montana courts would have to figure out what happens next.

“This likely opens up an entirely new category of state law actions challenging EPA-approved clean-ups,” said Shoshana Schiller, a partner at Manko, Gold, Katcher & Fox LLP in Bala Cynwyd, Pa. “I would venture a guess that it’s going to result in a lot of litigation from adjoining property owners, but also environmental groups.”

The Supreme Court determined the landowners qualify as “potentially responsible parties,” or PRPs. That status means the landowners may be liable for remediation costs and must seek EPA’s approval for any further cleanup at their properties. But in other cases where nearby residents think the EPA hasn’t done enough to control the spread of toxic waste, the rules are less clear.

“The risk here is that there are landowners, who are not PRPs, that could suddenly have leverage to get the remedial options they want,” said Joshua B. Frank, partner at Baker Botts LLP in Washington.

‘Try to Open This Door’

Site-based cleanup steering committees, made up of multiple PRPs, need to prepare for lawsuits from nearby property owners, said Michael Blumenthal, attorney at McGlinchey Stafford PLLC in Cleveland.

“There are a lot of plaintiffs’ lawyers that are going to try to open this door,” he said.

On the other hand, Sara Colangelo, director of the environmental law program at Georgetown University, said the EPA’s public comment opportunities already provide an outlet for cleanup concerns, making a flood of state law claims unlikely.

“In reality, that’s going to be a very small universe of instances,” she said.

The EPA is also unlikely to change its mind about cleanup plans after they’re finalized, Colangelo said.

“The decision-making process is so thorough and so long, I don’t see EPA turning back and second guessing that decision,” she said.

There may also be cases where states want to initiate remediation at a contaminated site, but may now feel obligated to seek EPA’s approval first. That could slow the cleanup process and affect a property’s market value, said Noah Perch-Ahern, partner at Greenberg Glusker Fields Claman & Machtinger LLP in Los Angeles.

Persistent Risks

The threat of nearby landowners suing PRPs under state law during the cleanup process has “always been a concern,” Blumenthal said.

Though the court’s decision resolved some questions of federal law in the Montana case, similar situations could still pop up.

“This will be another element that companies will have to take into account when they’re analyzing settlements with EPA under CERCLA,” or Superfund law, said Martha Thomsen, senior associate at Baker Botts LLP in Washington.

(Adds comments from Sara Colangelo in ninth through 12th paragraphs.)

To contact the reporter on this story: Sylvia Carignan in Washington at scarignan@bloombergenvironment.com

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

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