Gravel2Gavel Construction & Real Estate Law Blog
On December 29, 2017, the Montana Supreme Court decided an important Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), known also as Superfund, case involving the application of Montana state law in an ongoing federal CERCLA cleanup effort. The case is Atlantic Richfield Company v. Montana Second Judicial District Court. Atlantic Richfield Company (ARCO) petitioned the Montana Supreme Court for a writ of supervisory control, seeking a reversal of several orders of the trial court presiding over the case of Christian, et al. v. ARCO, filed in 2008, in which a group of private property owners in and around the town of Opportunity, MT are seeking restoration damages, based on Montana common law, for their properties that had been adversely affected by the operations of the Anaconda Smelter which operated for nearly 100 years before it was shut down in 1980.
ARCO became the owner of the smelter, and in 1983, the smelter site was placed on the CERCLA National Priority List for Superfund cleanups. Following the issuance by the Environmental Protection Agency (EPA) of an administrative order, a cleanup remedy was selected by EPA in 1998, but the cleanup may not be completed until 2025. The remedy requires ARCO to remediate residential yards within the smelter site that have excessive concentrations of arsenic, and to remediate all affected drinking water wells.
The property owners engaged their own experts who recommended that their properties could be restored to “pre-contamination “ levels by the removal of the top two feet of soil and the installation of permeable walls to remove arsenic from the groundwater. ARCO moved for summary judgment in the trial court, arguing that CERCLA barred these claims, but the motion was denied.
Before the Montana Supreme Court, ARCO, supported by the U.S. Department of Justice, argued that these claims for restoration are barred by CERCLA Section 113(h) because the cleanup conflicts with a federally-mandated cleanup, and that the Montana courts lack jurisdiction over any claims that constitute a challenge to a CERCLA cleanup. However, the Montana Supreme Court, citing the “savings clauses” contained in CERCLA that preserve a role for state common law claims, has rejected this argument, thereby allowing these claims to be tried in the Montana state courts.
After reviewing the arguments, the Court held that the property owners restoration damages claims cannot be “morphed” into a challenge to the EPA cleanup. Whether the property owners succeed in their claims for restoration damages—and the particulars of their remedy can be challenged by ARCO– “will not affect, alter, or delay EPA’s work in any fashion.”
Justice McKinnon filed a strong dissent, arguing that the Court’s conclusions that, during the pendency of a CERCLA cleanup, a jury may determine restoration damages and reserve the amount of any damages awarded by the jury for future restoration efforts is inconsistent with CERCLA, federal precedent and has no authority in Montana law. Indeed, Justice McKinnon notes, the Seventh Circuit, in PMC, Inc. v. Sherwin-Williams Co., held that the CERCLA savings clause must not be used to “gut the provisions of CERCLA.”
This is a very interesting result and it may have ramifications in other jurisdictions.