Understanding the Basics of CERCLA - ABA YLD 101 Practice Series

By Sudhir Lay

The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA,” also known as the “Superfund Act”) was enacted in response to concerns about the release of hazardous substances, except oil and gas, from abandoned waste sites, and it requires parties responsible for the contamination to pay for or conduct cleanup and remediation at the sites.  CERCLA was amended by the Superfund Amendments and Reauthorization Act of 1986 (“SARA”), and by the Brownfields Revitalization and Environmental Restoration Act of 2001. 

Under CERCLA, four classes of parties, called “potentially responsible parties” (“PRPs”), may be found liable for contamination at a “facility,” which Section 101(9) of CERCLA defines as any site or area where a hazardous substance is located:

  1. the current owner or operator of a facility,
  2. the owner or operator of a facility at the time that disposal of a hazardous substance occurred,
  3. a person who arranged for the disposal of a hazardous substance at a facility owned or operated by another person, and
  4. a person who transported a hazardous substance to a facility which the transporter selected for the disposal of the hazardous substances.

42 U.S.C. § 9607.

To initiate an investigation, under Section 104 of CERCLA, the Environmental Protection Agency (“EPA”) may issue an information request to all PRPs, and contract with or arrange for a qualified person to conduct a remedial investigation (“RI”) and feasibility study (“FS”).  42 U.S.C. § 9604.  The EPA may also order PRPs to perform response actions, oversee PRP response actions, or conduct a response action itself and then seek cost recovery.  42 U.S.C. § 9606.  Further, the EPA may issue an enforcement order or bring an enforcement action under Section 106 against PRPs who refuse to participate in negotiations regarding the remedial action or where negotiations prove unsuccessful.  42 U.S.C. § 9606.

The EPA or federal government can take two kinds of response actions when there is a release or threat of a release of a hazardous substance into the environment:

  1. Short-Term Removal Actions.  These actions may be taken to address releases or threatened releases requiring a prompt response, such as when contaminated surface soils or abandoned drums pose a risk to human health or the environment.  Removal actions are categorized as emergency, time-critical, or non-time critical, and may be taken with respect to any hazardous substances, pollutants or contaminants.  40 C.F.R. § 300.415.  Removal actions must be commenced within three years after completion of the removal action.  42 U.S.C. § 9613(g).
  2. Long-Term Remedial Actions.  These actions permanently and significantly reduce the risks associated with releases or threatened releases of hazardous substances that are serious but not so critical as to require a removal action response.  Remedial actions include the long-term prevention of the migration of pollutants and neutralizing toxic substances, and can only be conducted by the EPA at sites listed on the EPA’s National Priorities List (“NPL”).  40 C.F.R. § 300.430.  States and private parties can conduct remedial actions and then bring a Section 107 cost recovery or Section 113 contribution claim with regard to sites not listed on the NPL.  Remedial actions must be commenced within six years after initiation of the physical on-site construction of the remedial action, except if the remedial action is initiated within three years after completion of the removal action, costs incurred in the removal action may be recovered in the remedial cost recovery action.  42 U.S.C. § 9613(g).

42 U.S.C. §9604.

Under Section 122(e) of CERCLA, which was added by SARA, the EPA may send a Notice Letter to all PRPs regarding the action, notifying the PRPs that they can voluntarily cooperate with the EPA by remediating the property under government supervision or “oversight,” or by paying the EPA to do so.  If, within a few months, the PRPs fail to respond, then the EPA can bring an enforcement action against these groups.  If the EPA’s enforcement action is not successful, then the federal government can finance cleanup of the site through the CERCLA Trust Fund.  The federal government, through the Department of Justice, can then bring a court action against the responsible parties to recover up to three times the cleanup costs.  42 U.S.C. § 9607(c)(3).  The EPA must follow the guidelines set forth in the National Contingency Plan, the federal government’s blueprint for responding to hazardous substance releases, in pursuing cleanup and remediation of Superfund sites.  40 C.F.R. § 300.

National Priorities List (“NPL”)
The NPL is a list which identifies Superfund sites and primarily guides the EPA in:

  • Identifying what CERCLA-financed remedial actions may be appropriate;
  • Notifying the public of sites the EPA believes warrant further investigation; and
  • Serving to notify potentially responsible parties that the EPA may initiate CERCLA-financed remedial action.

PRPs Can Recover Costs From Other PRPs Under Section 107 or 113 of CERCLA
Subject to a divisibility defense under Burlington Northern & Santa Fe Railway Co. v. United States, 129 S. Ct. 1870, 1876-77 (2009), liability under CERCLA is strict, joint, and several, so a non-PRP plaintiff can recover all of its costs from defendants.  CERCLA also allows non-federal government entities or PRPs to recover costs from other PRPs in three ways. 

Under Section 107(a) of CERCLA, all parties, including the government and PRPs, may recover from other PRPs the costs it voluntarily incurred beyond its equitable share to clean up a contaminated site.  United States v. Atlantic Research Corp., 551 U.S. 128 (2007), 127 S. Ct. 2331 (2007).  Therefore, under Section 107(a)(4)(B), PRPs have a cost recovery remedy for voluntarily incurred costs against other PRPs regardless of whether they have been sued by the EPA or a State government under Sections 106 or 107 of CERCLA.

Similarly, a PRP can recover incurred cleanup costs from other PRPs under Section 113(f)(1) of CERCLA, even if there is no corresponding legal action by or settlement with the EPA or a State government under Sections 106 or 107 of CERCLA.  United States v. Atlantic Research Corp., 551 U.S. 128, 127 S. Ct. 2331. 

PRPs who have settled with the EPA or government in an administrative or judicially approved settlement may seek contribution from any person who was not a party to the settlement under Section 113(f)(3)(B).  A PRP who has settled with the government can bring a Section 113 contribution claim, but a contribution claim cannot be brought against a PRP who has settled with the government if the claim falls within the scope of the contribution bar as set forth in the administrative or judicially approved settlement.  Courts use equitable factors to allocate a “fair share” of response costs among liable PRPs in Section 113(f) contribution actions.

Contribution Protection
Section 113(f)(2) provides contribution protection for those PRPs who enter into an administrative or judicially approved settlement with the government regarding CERCLA liabilities.  These PRPs are shielded from future contribution liability for the matters “addressed in the settlement” that other PRPs might otherwise be able to bring against them.  If the consent decree with the EPA or government does not define “matters addressed” by the settlement, then courts will look to a number of factors to determine what matters the parties intended to include within the “matters addressed in the settlement” and the extent of the contribution protection the settling parties are entitled to under Section 113(f)(2).  These factors include the location involved, time frame, and hazardous substances and cleanup costs covered by the agreement.  42 U.S.C. § 9613(f).

The settlement bar set forth in Section 113(f)(2) only protects a settling PRP from contribution suits by PRPs that have inequitably reimbursed the costs incurred by another party; it does not protect a PRP from cost-recovery liability under Section 107(a).  United States v. Atlantic Research Corp., 551 U.S. 128, 127 S. Ct. 2331.

De Minimis PRPs Can Settle Out
CERCLA allows PRPs whose contribution to the contamination was minimal in volume and toxicity to settle out of the case early.  Once the de minimis contributors pay the government the settlement amount that includes a premium that accounts for uncertainties associated with the costs of future work, they are given “contribution protection,” which bars other PRPs from bringing third party contribution claims against the de minimis settling party.  42 U.S.C. § 9622(g).

Code, Cases, and Jurisdiction
CERCLA is a complex law frequently being interpreted and reinterpreted by subsequent case law.  Consult the code and read up on federal cases within your jurisdiction to determine rights and obligations applicable to your client.

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About the Author

Sudhir Lay is an associate at Dongell Lawrence Finney LLP in Los Angeles.  Her practice areas include Litigation and Environmental Law.  Ms. Lay is a member of the American Bar Association Young Lawyers Division and is a Vice Chair of the Environment, Energy, and Resources Committee.

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