A Haphazard Holding: Montana Supreme Court’s Ruling in Superfund Case Harms Commerce and the Environment

montana s ctBy Amanda Voeller, a 2018 Judge K.K. Legett Fellow at Washington Legal Foundation who will be entering her third year at Texas Tech University School of Law in the fall.

Tension between uniform federal regulation and state-level action has become more prevalent recently, and a pending certiorari petition in the U.S. Supreme Court in Christian v. Atlantic Richfield Co., illustrates well this conflict.  In Atlantic Richfield, the Atlantic Richfield Company (ARCO) has asked the U.S. Supreme Court (with the support of a WLF amicus brief) to review and overturn a Montana Supreme Court ruling that creates extreme uncertainty for businesses by allowing state courts to supersede federal environmental regulations.

Since 1977, ARCO has owned a 300-square-mile plot of land in Montana known as the Anaconda Smelter Superfund Site.  The land, which is contaminated with arsenic from its previous owner’s copper mining techniques, is the site of an EPA-directed hazardous waste cleanup.  The Environmental Protection Agency (EPA) established the Superfund Site in 1983 under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).

CERCLA allows EPA to declare a piece of land an environmental hazard, provides a federal “Superfund” for EPA to clean up these sites, and allows the agency to seek out the parties responsible for the waste and ensure that they cooperate in the cleanup process.  The Act also preempts state-law claims that interfere with EPA’s remedial plans, bars potentially responsible parties from undertaking remedial actions without EPA approval, and prohibits most challenges to EPA remedies.

ARCO has spent $470 million cleaning the Anaconda Smelter Superfund site, one of the largest Superfund sites in the country.  In 2008, 25 years after EPA established the site, a group of landowners in the area filed the above-mentioned lawsuit against ARCO asking for land-restoration damages.  In 2013, a state trial court granted summary judgment in favor of ARCO on all claims, finding that the applicable statutes of limitation had run because the appellants should have known about the contamination well before 2008.  The landowners appealed directly to the Montana Supreme Court (Montana does not have intermediate appellate courts).  The state high court reversed the lower court on the limitations issue, and further ruled that CERCLA did not bar the landowners’ state-law restoration claims.

Because many provisions of the CERCLA cleanup plan and the landowners’ plan directly contradict, the Montana Supreme Court’s holding could render meaningless much of the work that ARCO had done to clean the site over the past 35 years.  For example, the landowners’ plan demands construction of 19,000 feet of underground trenches even though EPA has determined that trenches would worsen the environmental conditions, and the plan requires removing 33% more topsoil than EPA thinks is necessary.

CERCLA clearly preempts Montana state law.  When Congress wrote CERCLA, it placed a general savings clause in the statute.  A savings clause basically creates an exception in a statute, and in federal statutes, savings clauses often clarify that the statute does not affect state-law claims.  CERCLA’s savings clauses state: “Nothing in this chapter shall be construed or interpreted as preempting any State from imposing any additional liability or requirements with respect to the release of hazardous substances within such State,” and “Nothing in this chapter shall affect or modify in any way the obligations or liabilities of any person under other Federal or State law, including common law, with respect to releases of hazardous substances or other pollutants or contaminants.”

The Montana Supreme Court erroneously reasoned that these two savings clauses allow the Montana landowners to undo aspects of EPA’s cleanup plan.  However, the court failed to read CERLCA’s savings clauses in the larger context of the statute, and it ignored the common statutory-construction rule that the specific governs the general.  Congress only intended for the savings clauses to ensure that CERCLA does not preempt the field of environmental cleanup, not for the clause to allow conflicting state laws or state-law legal claims to impede CERCLA’s plans.  Congress did not intend for a group of jurors to reorganize EPA’s $500 million-plus cleanup plan, but this is exactly what the Montana Supreme Court’s ruling would allow.

At first blush, one might think that Montana businesses would prefer more local regulation and less federal regulation, but this is not necessarily the case.  Many Montana industry organizations, including the Montana Chamber of Commerce and the Montana Mining Association, joined together to file an amicus brief in favor of ARCO.  The companies point out that even though they may find most EPA regulations intrusive and poorly designed—including those implementing CERCLA, the Clean Water Act, and the Clean Air Act—federal oversight on these matters help businesses function more effectively.

The organizations’ brief states: “Predictability, certainty, consistency, finality—these are all necessary ingredients for industry to thrive in this new world.”  In order for businesses to succeed, they need to feel confident that state-law claimants cannot undercut the agreements they reach with EPA and other federal agencies.  The Montana Supreme Court’s decision creates non-federal regulators—here, the Montana landowners—in addition to the already-existing federal regulators, which leads to uncertainty and conflicting regulation.

The U.S. Supreme Court should hear this case to correct the Montana Supreme Court’s erroneous ruling.  If a Montana jury is allowed to change EPA’s clean-up plan, this would entirely defeat CERLCA’s purpose of promoting the timely cleanup of hazardous waste sites.  A decision by the justices not to review and reverse Atlantic Richfield could send an implicit message to other state courts that second guessing federally designed hazardous-waste cleanups or piling new state-law requirements onto such plans is acceptable.  Those states’ businesses, and, ironically, the environment, would be the losers under that scenario.

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