By Elizabeth Garvin

Welcome back to the Rocky Mountain Land Use Institute Legal Corner. We are going to spend 2020 reviewing judicial opinions and brushing up on our knowledge of how lawsuits move from “that one property owner who violated their fence permit” to a court telling us we will be doing things very differently in the future. Our topic this month is environmental law.

To begin we will examine the recent oral arguments of the U.S. Supreme Court in Atlantic Richfield Company v. Christian, 408 P.3d 515 (Mont. 2017), cert. granted,_____________. This case is still in progress and will most likely not be decided until later in the Supreme Court’s term. All of the documents related to this case, along with a transcript and audio version of the oral arguments, are available for free on the SCOTUS website, here.

Undated historic photo of the Anaconda mines and is in the public domain.

Background and a Short Montana History Lesson

The Anaconda copper mine, is located northwest of Butte, Montana, and is deeply embedded in Montana’s history. The original copper mine was purchased by one of Montana’s three Copper Kings, Marcus Daly, who arrived in Butte in 1880. Daly attracted the attention of his rival Copper King, Fritz Heinz, who then purchased a parcel on top of the mine and claimed proceeds from the operation. Copper King number three, William Clark, meanwhile focused his efforts on campaigning for the selection of Helena, instead of Anaconda, as the state capitol. Over time, the Anaconda site was expanded to include several smaller mines. While profitable for their owners, the Anaconda smelters produced high concentrations of arsenic and lead that contaminated the surrounding soil, groundwater, and surface water. Atlantic Richfield purchased the Anaconda site in 1977 and closed the Anaconda smelter in 1980. The U.S. Environmental Protection Agency (EPA) placed the 300 square mile site on the Superfund National Priorities List in 1983, and cleanup has been proceeding since.

This lawsuit was originally filed in 2008 by a group of about 100 residential property owners (Property Owners) who live in Opportunity, Montana, a neighborhood within the Anaconda Superfund site. Remediation on the Property Owners’ lots, according to their attorney, is complete and ranged from replacing 18 inches of soil to no remediation at all. Property Owners thought more should be done and hired outside experts to review the EPA plan and identify additional restoration options. Relying on this information, Property Owners sued Atlantic Richfield (ARCO) in Montana state court seeking damages for claims including loss of use and enjoyment of their property, diminution of value, annoyance and discomfort, and restoration damages, the last of which would include funding for clean-up beyond that required by the EPA.

Old Works Golf Course, Anaconda, Montana: https://www.flickr.com/photos/137837832@N07/23198665689/in/photolist-d6sYnd-AX2Mi5-BkZe5D-Fof1pA-FGumuv

From Montana to Washington, D.C.

The state trial court held that all of the Property Owners’ claims, including the restoration damages claim, should go to a Montana jury for decision. The Montana Supreme Court upheld the decision and ARCO appealed to the U.S. Supreme Court. The change of venue to Washington, D.C., temporarily paused the Montana case and shifted the focus from Property Owners’ multiple claims to the legal viability of the restoration damages claim. The key issue, as Justice Sotomayor framed it, is whether CERCLA – the federal law that establishes the Superfund process – requires the EPA to create a cleanup plan that establishes both a floor and a ceiling for the remediation process? If the EPA plan just establishes a floor, then it may be possible for Property Owners to request additional restoration in the overall cleanup plan. And if the EPA plan also establishes a ceiling on cleanup efforts, then this claim will likely be dismissed when returned to the trial court.

The Arguments

Three parties argued before the Supreme Court in this case about a mix of state and federal substantive law and procedure. ARCO, owner of the site, argued that the Property Owners do not have the right to sue for restoration damages. The Federal Government argued that the CERCLA/EPA/Superfund process is comprehensive in nature. And the Property Owners argued that they are not bound by the CERCLA/EPA/Superfund cleanup and that state law allows them to sue ARCO for restoration damages.

ARCO opened the argument before the Court by asserting that Property Owners cannot make a claim for “additional” restoration damages because CERCLA, a federal law, preempts state law and blocks the imposition of any additional, non-EPA, cleanup requirements on the polluter. The goal of CERCLA was to create a comprehensive approach to hazardous waste cleanup that was fully entrusted to the EPA, not individual juries. ARCO’s attorney was quickly interrupted by Justice Sotomayor, who asked whether it would be okay for a state-approved plan to supplement, rather than contradict the EPA plan? As Justice Sotomayor phrased it, “[I]f I think it’s just a floor, and that the EPA has the power to decide whether any plan can supplement its own [plan], where does that leave this argument? ARCO answered no, the EPA’s plan occupies the whole house-shaped space of clean-up possibilities, floor to ceiling. To permit otherwise would change the terms of the settlement agreement between EPA and the polluter. Justice Ginsburg pointed out that the settlement agreement is not law and that the EPA could modify the agreement to allow the supplemental clean-up requested by the Property Owners. Justice Kagan then took the questioning one step further and asked what the result would be if Montana passed legislation requiring lower arsenic levels than the EPA approved? ARCO answered that the CERCLA process identifies how EPA can set standards, including overriding conflicting state standards, and that the states’ statutory remedy is to sue the EPA. Justice Breyer then joined the conversation, questioning whether this case would be different if the Property Owners had gotten EPA permission before filing their state lawsuit. And here, because the Property Owners did not do that, would the case be dismissed? ARCO’s attorney conceded that the case would be dismissed without EPA permission for the restoration plan.

ARCO was followed by an assistant attorney from the U.S. Solicitor General’s Office (referred to as Federal Government) making a limited argument in support of Atlantic Richfield. The Federal Government stated that the process for creating a cleanup plan is very inclusive on the front end and has mechanisms to consider the various standards that could be implemented as part of the cleanup plan. The Federal Government attorney explained a process of public comment, landowner meetings, and state meetings that result in the creation of a cleanup plan that is carried out pursuant to CERCLA. Justice Sotomayor returned to the question of whether the approved plan was both the floor and the ceiling. And through a give-and-take discussion, the Federal Government attorney concluded that a property owner could take a request for additional remediation to the EPA for a yes or no answer.

The Court then moved into a discussion of whether the Property Owners could or should be considered potentially responsible parties (PRP) under CERCLA – exploring the assertion that their status seem to have changed through the course of the litigation. The importance of this classification became clearer later in the argument, as discussed below in the Potentially Responsible Party Status section. The discussion again turned back to options for additional remediation. Justices Kavanaugh, Ginsburg, and Gorsuch, in order, asked: (1) whether the EPA could grant approval for a landowner to take significant remedial action on site, (2) whether these specific Property Owners needed to get EPA approval, and (3) how earlier statements by EPA that permission might be granted in this case work together? The Federal Attorney answered yes, stating that the EPA stands ready to listen to landowners, while noting that these Property Owners have not submitted anything for EPA consideration.

Property Owners’ counsel made the final argument in this case. Property Owners’ position was that the EPA-approved cleanup plan provided a floor only, and that the Property Owners still had the right to add a few stories to this structure and that right did not hinge on EPA approval. Justice Sotomayor asked whether a taking claim would be more appropriate in this case, where the Property Owners’ preferred cleanup might interfere with EPA’s existing cleanup actions? Property Owners’ attorney shared with the Court that the cleanup was complete on these properties and very little active cleanup had been done. Chief Justice Roberts commented that the EPA’s position was that “doing nothing” was far more protective to the community than “doing something,” which would have moved the pollutants and created a more significant adverse impact.

Potentially Responsible Party Status

Here, the Court returned to the Property Owners’ unclear status as either potentially responsible parties (PRP) or not and seemed to pull the threads of the arguments together. The Q&A explored how this status, or lack thereof, impacted whether Property Owners were meaningfully involved in the creation of the cleanup plan and CERCLA settlement process. Where Property Owners were residents of the area and subject to EPA’s standard exemption of residential owners from PRP status, that policy and lack of clarity in the law about who should be included in the PRP settlement discussions may have left these Property Owners out of the loop in establishing a cleanup plan. PRP status is also, though, a potential marker of liability, a label most people want to strenuously avoid when it comes to a hazardous waste site. Property Owners’ asserted that because they were not PRPs, they also did not need EPA approval to pursue further restoration. Justice Sotomayor saw this differently, and potentially as a means to an end, stating that identifying all landowners on a Superfund site as PRPs clarifies how they can challenge the EPA if they don’t like the cleanup plan.

Property Owners’ counsel was unimpressed with this suggestion, and asked the Court if this meant that his clients would forever need to get permission from the EPA before putting a sandbox in their backyard, rather than allowing them to act like other property owners who can build sandboxes as they please without prior permission from the EPA? This question went unanswered because the argument time was up.

What’s Next?

We will keep an eye on the Supreme Court’s website for the decision in this case and report back to Western Planner readers when it is provided.

Elizabeth Garvin is a land use lawyer and planner and the founding principal of Community ReCode in Denver, Colorado. She is a member of the RMLUI Regional Advisory Board who writes the RMLUI Legal Corner for The Wester Planner. This article is informational only and is not a legal opinion.

WP / RMLUI Legal Corner: Does the EPA Have to Approve Your Sandbox?