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CERCLA Litigation Liability Update: Cases, New Twists
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THURSDAY, APRIL 30, 2020
Presenting a live 90-minute webinar with interactive Q&A
Denise G. Fellers, Attorney, Morgan Lewis & Bockius, Los Angeles
Jonathan Nwagbaraocha, Counsel - Environment, Health, Safety & Sustainability andCompliance Leader, Xerox, Rochester, NY
Shoshana Suzanne Ilene Schiller, Partner, Manko Gold Katcher & Fox, Bala Cynwyd, Pa.
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CERCLA Litigation Liability Update: New Cases, New Twists
DENISE FELLERS
MORGAN LEWIS & BOCKIUS, LLP
JONATHAN NWAGBARAOCHA
XEROX CORPORATION
SHOSHANA SCHILLER
MANKO GOLD KATCHER & FOX, LLP
TOPICS
Superfund Liability: An Overview
PRPs: Owners, Operators, Arrangers, and Transporters
Accrual of Claims and Statutes of Limitations
Liability Defenses: Sovereign Immunity, Preemption, and Releases
Allocation/Damages
COVID-19 Issues
Questions
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Superfund Liability: An Overview
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CERCLA Liability, Generally
Release or Substantial Threat of a Release
Of a Hazardous Substance
From a Facility
Released by one of four Categories of PRPs
Present Owners and Operators
Owners and Operators at the time of Disposal
Generators – generated hazardous substances that came to be located at the site or who “otherwise arranged” for their disposal or treatment
Transporters or anyone who arranged with transporters for transport for disposal or treatment
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Cost Recovery vs. Contribution Claims
Cost Recovery Claims. If you have incurred response costs on a cleanup you are conducting, and have not been sued by anyone, you can bring a § 107(a) cost recovery claim – joint and several liability
Contribution Claims. If you have been sued under § 106 or § 107(a), or settled with the government through an administrative or judicially approved settlement, you are limited to a § 113(f) contribution claim – several liability only
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Accrual of Claims/Statute of Limitations
Under CERCLA Section 113, contribution claims must be brought within three years of a civil action under Section 106 or 107, a CERCLA administrative order, or a judicially approved settlement with respect to costs or damages. 42 U.S.C. § 9613(g)(3).
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Defenses
Act of God, CERCLA § 107(b)(1)
Act of War, CERCLA § 107(b)(2)
Act of Omission of a Third Party, CERCLA § 107(b)(3)
Federally Permitted Release, CERCLA § 107(j)
Recycling Exemption, CERCLA § 127
Lender Liability Exemption, CERCLA § 101(20)
Bona Fide Prospective Purchaser, CERCLA § 101(40)
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Divisibility vs. Allocation
Divisibility/Apportionment is a defense to § 107(a) joint and several liability
Equitable Allocation is an equitable allocation of liability by the court between liable parties, but the result can vary significantly depending upon whether its:
An allocation between jointly and severally liable defendants in a §107(a) cost recovery action, or
An allocation involving severally liable parties in a § 113 contribution action
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Equitable Allocation
For a defendant at a multiple PRP site, the next best alternative to a divisibility defense is to seek a reasonable allocation of liability
The court may allocated response costs among liable parties using such equitable factors as the court determines are appropriate
The District Court is authorized to make the final equitable allocation of costs and to choose which equitable factors will inform its decision
A court may consider several factors, a few factors, or only one determining factors, depending on the totality of the circumstances presented to the Court. See NCR Corp. v. George A. Whiting Paper Co., 768 F.3d 682, 695-696 (7th Cir. 2014)
The Court must “balance the equities in light of the totality of the circumstances.” FMC Corp. v. Aero Industries, Inc., 998 F.2d 842, 847 (10th Cir. 1993)
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PRPs: Owners, Operators, Arrangers, and Transporters
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A. Idaho Waste Systems, Inc. v. U.S. Air Force, 2020 WL 697914 (D. Idaho Jan. 27, 2020), adopted by2020 WL 699824 (D. Idaho Feb. 11, 2020)
B. Cottman Ave. PRP Group v. AMEC Foster Wheeler Envt'l Infrastructure Inc.,2020 WL 757834 (E.D. Pa. Feb. 13, 2020)
C. U.S. v. Dico, Inc., 920 F.3d 1174 (8th Cir. 2019)
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Accrual of Claims and Statutes of Limitations
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A. Refined Metals Corporation v. NL Industries Inc.,937 F.3d 928 (7th Cir. 2019)
B. Premcor Ref. Grp., Inc. v. Apex Oil Co., Inc.,2019 WL 1489543 (S.D. Ill. Feb. 6, 2019)
C. 2121 Abbott Martin Partners, LLC. v. Lee,2019 WL 3818870 (M.D. Tenn. Aug. 14, 2019)
D. Cranbury Brick Yard, LLC v. United States, et. al.,943 F.3d 701 (3rd Cir. 2019)
E. Government of Guam v. United States of America,950 F.3d 104 (D.C. Cir. 2020)
F. Arconic, Inc., et al. v. APC Inv. Co., et al.,2019 WL 398001 (C.D. Cal. Jan 15, 2019)
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Liability Defenses: Sovereign Immunity, Preemption, and Releases
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A. Gold King Mine Release in San Juan County, CO,2019 WL 1369349 (D.N.M. Mar. 26, 2019) &2019 WL 999016 (D.N.M. Feb. 28, 2019)
B. LCCS Group v A.N. Logistics,341 F. Supp.3d 847 (N.D. Ill. 2018)
C. LAJIM, LLC v. General Electric Company,917 F.3d 933 (7th Cir. 2019)
D. Asarco, LLC v. Union Pacific Railroad,778 Fed. Appx. 423 (9th Cir. 2019)
E. Atlantic Richfield Co. v. Gregory A. Christian, et al.,2020 WL 1906542 (U.S. Apr. 20, 2020)
F. Idaho Waste Systems, Inc. v. U.S. Air Force,2020 WL 697914 (D. Idaho Jan. 27, 2020)
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Allocation/Damages
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A. Giovanni v. U.S. Dept. of Navy,906 F.3d 94 (3rd Cir. 2018)
B. Valbruna Slater Steel Corp. v. Joslyn Mfg. Co.,934 F.3d 553 (7th Cir. 2019)
C. Mission Linen Supply v. City of Visalia,2019 WL 446358 (C.D. Cal. Feb. 5, 2019)
D. Thomas & Betts Corp. v. New Albertson's, Inc.,915 F.3d 36 (1st Cir. 2019)
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COVID-19 Issues
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List of State Orders (updated daily as needed):
https://www.mankogold.com/publications-Stay-at-Home-Orders-Environmental-Remediation.html
Does the state/local order directly or indirectly prevent site work?
Identify the applicable order(s) – state and local
Review exemptions
Understand their unique application on a site-by-site basis
Consider the context – strength of the order vs. urgency of the work
Anticipate varying interpretations
IMPACT OF STAY-AT-HOME ORDERS
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EPA’S INTERIM GUIDANCE ON SITE FIELD WORK
DECISIONS DUE TO IMPACTS OF COVID-19
No Blanket Waivers of Obligations
Prioritize health and safety of public and workers while maintaining ability to prevent and respond to any substantial endangerment to human health or the environment
Refer to Enforcement Instrument for Provisions Related to Delayed Performance and Force Majeure
Consider Applicable Health Orders, Safety and Availability of Work Crews and Staff, Need for Travel, Critical Nature of Work, and other Site-Specific Issues
https://www.epa.gov/sites/production/files/2020-04/documents/interim_guidance_on_site_field_work_decisions_due_to_impacts_of_covid.pdf
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Mitigate and Document the Impact
Analyze the guidance, regulation, permit, order, consent decree, or contract
Duty to notify?
Duty to mitigate?
Duty to perform as soon as practicable?
Document the Impact and the Actions
Work scheduled
Applicable order(s)
Direct/indirect impact on work
Implementation of site-specific COVID-19 protocols
Communicate with the appropriate Agency (and document communications)
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Potential Areas of Future
Disputes
Ambiguous exemptions in state orders
Inconsistent policy across EPA regions
Opportunistic interpretations from third parties (force majeure, impossibility, impracticability, frustration of purpose)
Indirect disputes – site access, contract claims
Future third party/citizen suits
Disagreements with outside consulting firms
Insurance coverage disputes
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Shoshana Schiller
Manko, Gold, Katcher & Fox, LLP
Bala Cynwyd (Philadelphia), Pennsylvania
Jonathan Nwagbaraocha
Xerox Corporation
Rochester, New York
Denise Gail Fellers
Morgan, Lewis & Bockius LLP
Los Angeles, California
Questions?
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