Ninth Circuit Requires Federal Government to Contribute to Superfund Payment

Nov 29, 2017

Ninth Circuit holds that the District Court exceeded its discretionary powers.

The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) authorized the creation of a Superfund to remove polluted material from toxic waste sites. These projects are extremely expensive. Often they are undertaken years, sometimes decades, after the parties responsible for the pollution used the sites.

The Environmental Protection Agency (EPA) oversees these cleanups. Its unapologetic mandate is to locate parties who have participated in the use of polluted properties with pockets deep enough to fund the removal of the toxic material and the reclamation of the land.

More often than not, the parties cited by the EPA find themselves disagreeing about what percentage of the cleanup costs should be allocated to each party. Lawsuits ensue.

When the United States is named as a party the other parties to the suit are usually at a disadvantage.

Gerald George reporting in the Energy & Environmental Law Blog, examines a recent finding by the Ninth Circuit Court of Appeals in which the Court “reversed a district court decision allocating 100% of CERCLA response to costs to a U.S. military contractor.” TDY Holdings, LLC et al. v. United States, No. 15-56482 (9th Cir. 10/4/2017).

The District Court’s decision was based upon two cases that addressed the allocation issue before the court. It found that the lower court misinterpreted the rulings in those cases and exceeded its discretionary power “to apply ‘such equitable factors as the court determines are appropriate.’”

According to an article in Justica Government & Administrative Law Opinion Summaries, the Court of Appeals found “that encumbering a military contractor with 100 percent of CERCLA costs that were largely incurred during war-effort production was a 180-degree departure from the panel’s prior case law … In this case, the district court did not adequately consider the parties’ lengthy course of dealings and the governments’ requirement that TDY use two of the hazardous chemicals at issue.”

Sources—

U.S. Reversed on 100% Allocation to Contractor, Gerald George, Energy & Environmental Law Blog, Oct. 10, 2017.

TDY Holdings v. United States, Justica Inc. Oct. 4, 2017.