Just Around the Corner

Top issues in hazardous waste management in 2005

• By Stephen I. Addlestone, JD
• Jan 01, 2005

Despite at least a perceived drop in enforcement, there continue to be developments in regulation and litigation involving solid and hazardous waste. As many predicted, the Bush administration has not been particularly active on the environmental front. Although the U.S. Environmental Protection Agency (EPA) reports an increase in the amount of civil penalties recovered in the last fiscal year, the fine print reveals that this "increase" is the result of a relatively few number of larger cases. In addition, EPA recovered fewer criminal penalties this past year. Moreover, there appear to be few major regulatory developments on the horizon.

That said, 2004 has still produced some interesting changes, some of which will continue into 2005. It also will be important to watch for any developments resulting from the nomination of current EPA Administrator Mike Leavitt to the cabinet level position of Secretary of Health and Human Services.

Contribution Actions for Voluntary Cleanups
On December 13, 2004, the U.S. Supreme Court issued its opinion in Cooper Industries Inc. v. Aviall Services Inc., holding that a private party that has engaged in a voluntary cleanup cannot bring a contribution action under Section 113 of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), also known as Superfund. Section 113(f)(1) found at 42 U.S.C. § 9613(f)(1) states:

Any person may seek contribution from any other person who is liable or potentially liable under section 9607 (a) of this title, during or following any civil action under section 9606 of this title or under section 9607 (a) of this title... Nothing in this subsection shall diminish the right of any person to bring an action for contribution in the absence of a civil action under section 9606 of this title or section 9607 of this title.

In addition, Section 113(f)(3)(B) authorizes a person who has settled claims regarding liability with the United States or a state in an administrative or judicially approved settlement to seek contribution from certain other parties. CERCLA Section 113 therefore clearly states that a party that has been subject to an enforcement action under Section 106 or 107 of CERCLA, or a party that has entered into a settlement with the United States or a state, may bring a contribution action under CERCLA § 113. The central issue in the Cooper Industries case involved whether a party that has not been sued under CERCLA or has not entered into a settlement can seek recovery of some of its cleanup costs from other parties liable under CERCLA.

In this recent case, Cooper Industries had owned and operated several aircraft engine maintenance sites in Texas. In 1981, it sold these sites to Aviall, which operated them for a number of years. Aviall discovered contamination on the properties that had been caused by both it and Cooper. Aviall cleaned up the properties under the state's supervision, but neither Texas nor EPA brought a judicial or administrative enforcement action against Aviall. Ultimately, Aviall incurred at least $5 million in cleanup costs. In 1997, Aviall brought suit against Cooper seeking to recover some of its response costs pursuant to the contribution provision in Section 113(f)(1) of CERCLA. The U.S. District Court held that Aviall could not pursue its CERCLA claim because it had not been subject to an enforcement action under Section 106 or 107 of CERCLA. The U.S. Court of Appeals for the Fifth Circuit reversed this decision, relying on the final "savings" clause in Section 113(f)(1), which states: "Nothing in this subsection shall diminish the right of any person to bring an action for contribution in the absence of a civil action under section 9606 of this title or section 9607 of this title."

The Supreme Court disagreed with the Court of Appeals. It held that the Section 113 "savings" clause only applied to contribution actions that might exist independently of Section 113(f)(1). In short, the Court interpreted this provision to hold that the existence of the Section 113 contribution right does not extinguish any other contribution right that may be available to a potentially responsible party, such as a contribution action based on state law. The Supreme Court also declined to address whether Aviall might have an implied right of contribution under Section 107 of CERCLA. It did not find that Section 113(f)(1) itself authorized a contribution suit in the absence of an enforcement action.

The real significance of the Cooper Industries decision is what it means for voluntary cleanup actions. A party engaged in a cleanup without being subject to an enforcement action or settlement will be unable to seek contribution from other parties under CERCLA Section 113, thus potentially discouraging voluntary cleanups. In its decision, the Supreme Court only addressed the text of CERCLA, refusing to weigh in on how its position might further the goals and purpose of CERCLA to cleanup sites contaminated with hazardous substances. In any event, unless Congress amends the language of CERCLA, a party should evaluate whether it may eventually wish to seek recovery from other parties before engaging in a voluntary cleanup without first entering into a settlement agreement with either EPA or a State.

The Cooper Industries opinion is available at www.supremecourtus.gov/opinions/04pdf/02-1192.pdf.

Proposed Rule on Standards for Site Assessments
The 2002 Superfund Amendments included provisions limiting liability under certain circumstances for property owners whose land has been contaminated by passive migration of constituents from contiguous (or other similarly situated) property, limiting CERCLA liability for those persons who qualify as "bona fide prospective purchasers" of contaminated property, and attempting to extend the protections of CERCLA's "innocent landowner" provision. In order to qualify for these protections, persons are required to have conducted all appropriate inquiries into the prior ownership and use of the property prior to or at the time of acquisition.

On August 26, 2004, EPA proposed rules addressing what constitutes "all appropriate inquiries" see 69 Fed. Reg. 52,542 (August 26, 2004). According to EPA, "this regulation may affect most directly those persons and businesses purchasing commercial property or any property that will be used for commercial purposes and who after purchasing the property, seek to claim protection from CERCLA liability." Presently, EPA uses standards for "all appropriate inquiries" based on American Society for Testing and Materials (ASTM) standards (Standard Practice for Environmental Site Assessment: Phase 1 Environmental Site Assessment Process). Because the August 2004 publication by EPA is only a proposed rule, the ASTM standards remain the governing criteria until EPA finalizes the rule. It will be important, however, to watch for these developments.

For additional information, see www.epa.gov/brownfields/regneg.htm.

Hazardous Waste Generators
Currently, EPA is evaluating whether it should makes changes to the requirements applicable to hazardous waste generators, as governed by the Resource Conservation and Recovery Act (RCRA). On April 22, 2004, EPA published an Advance Notice of Proposed Rulemaking for purposes of evaluating RCRA's hazardous waste generator program see 69 Fed. Reg. 21,800 (April 22, 2004). EPA is seeking to evaluate the effectiveness of the hazardous waste generator program in protecting human health and the environment. Items of interest to EPA include:

• Hazardous waste accumulation times
• Waste generation quantity thresholds for Large Quantity Generators, Small Quantity Generators, and Conditionally Exempt Small Quantity Generators
• Waste sampling and testing procedures
• Waste management standards
• Use of RCRA identification numbers
• Generator accumulation and treatment in containers and tanks
• Waste minimization mechanisms
• Land Disposal Restrictions applicable to generators
• Significantly, however, EPA does not intend to address any issues related to the definition of "solid waste" under RCRA or the hazardous waste identification regulations.

For additional information and developments, see www.epa.gov/epaoswer/hazwaste/gener/init/index.htm . To review comments submitted on this notice, see www.epa.gov/edocket, Docket ID RCRA-2003-0014.

This article originally appeared in the 01/01/2005 issue of Environmental Protection.