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District Court Rejects Owner-Operator Liability Under CERCLA for Sewer System Owner Discharging to River

Beveridge & Diamond, P.C., July 28, 2010

On July 7, 2010, the U.S. District Court for the Western District of Washington issued an opinion on cross motions for summary judgment in United States v. Washington State Department of Transportation (WSDOT), No. 08-8722RJB, rejecting CERCLA owner-operator liability for the owner of a sewer system discharging to a river.  The U.S. had alleged that a storm sewer system owned and operated by WSDOT carried hazardous substances from various highways into waterways at the Commencement Bay-Nearshore Tideflats Superfund site in Tacoma, WA.  The federal government was seeking response costs for cleaning up contaminated sediments in the waterways.  Without citing any cases using similar reasoning, the Court settled on a narrow interpretation of current and former owner or operator liability under CERCLA Sections 107(a)(1) and 107(a)(2).  In the Court’s view, a potentially responsible party (“PRP”) could be held liable as an owner or operator of a Superfund facility only if it is or was “the owner or operator of the facility in which the United States incurred a response cost.”  Because WSDOT does not own or operate the waterways where the federal government had incurred response costs, the Court denied the Plaintiff’s motion for summary judgment on owner-operator liability. 

Both the government’s argument and the Court’s reading of Section 107(a) focused on the definition of the word “facility.”  To the Court, the WSDOT roadways and storm sewers could not be considered a single CERCLA facility along with the waterway because they “are reasonably or naturally divided into multiple parts or functional units.”  The Court’s decision, which reflected the government’s arguments, focused on whether the roadways, sewer, and waterways could be one large facility instead of whether WSDOT could be held liable under Section 107(a)(1) for a release from a facility into a waterway. 

The Plaintiff’s argument and the Court’s conclusion seems to overlook a more complete reading of Section 107(a), which imposes liability on an “owner and operator of a vessel or a facility, . . . from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance.”  Other plaintiffs have relied on all of the language in Section 107(a) to impose liability on the owners or operators of facilities or vessels from which there was a release into the environment.  For example, the courts in Westfarm Associates Ltd. v. Washington Suburban Sanitary Commission, 66 F.3d 669, 678–79 (4th Cir. 1995), and Bangor v. Citizens Communications Co., 2004 U.S. Dist. LEXIS 3845, *49–51 (D. Me. Mar. 11, 2004), both looked favorably on a broader reading of Section 107(a).  Both courts found sewer owners liable under CERCLA section 107(a)(1) based on releases to the environment from their sewer pipes.   

If the WSDOT opinion survives, this narrow application of owner-operator liability could reduce the universe of PRPs at contaminated sediment and groundwater Superfund sites.  It is important to note, however, that the federal government here reserved “any other theories of liability” (i.e. arranger and transporter liability).  Indeed, the Court concluded in a June 7, 2010 opinion in the same case that WSDOT could be held liable as an arranger under CERCLA Section 107(a)(3) for designing and maintaining the stormwater system that discharges to the waterways that comprise the Superfund site.

For more information, please contact Steve Jawetz at (202) 789-6045, sjawetz@bdlaw.com.

Graham Zorn assisted in the preparation of this alert.   

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