Allocating CERCLA Liability: Divisibility or Section 113 Equitable Contribution

Transcription

1 Presenting a live 90-minute webinar with interactive Q&A Allocating CERCLA Liability: Divisibility or Section 113 Equitable Contribution Assessing Harm, Proving Divisibility of Harm Defense Absent a Bright-Line Test, and Apportioning Costs WEDNESDAY, MARCH 5, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Richard A. Du Bey, Attorney, Short Cressman & Burgess, Seattle John F. Gullace, Partner, Manko Gold Katcher & Fox, Bala Cynwyd, Pa. Kathleen M. (Kate) Whitby, Of Counsel, Spencer Fane Britt & Browne, St. Louis The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

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5 Allocating CERCLA Liability: Divisibility or Section 113 Equitable Contribution March 5, 2014 John F. Gullace, Esq. Manko, Gold, Katcher & Fox, LLP Copyright 2014

6 6 Topics To Be Covered CERCLA 107(a) cost recovery claims v. CERCLA 113(f) contribution claims Apportionment or Divisibility v. Allocation Burlington Northern & Santa Fe Railway v. U.S. Copyright 2014

7 7 Agenda I. The Basics II. A Little History, CERCLA 107 and 113 III. The Supreme Court Addresses 107 v. 113 IV. Burlington Northern V. Recap VI. Why It Matters Copyright 2014

8 8 The Basics What Are the Elements of a Claim under CERCLA? Release or threatened release of a hazardous substance from a facility into the environment causing the incurrence of response costs National Contingency Plan Consistency Copyright 2014

9 9 The Basics (cont.) Who Is Liable? Current owners and operators of a facility (CERCLA 107(a)(1)) Prior owners and operators of a facility at the time of disposal (CERCLA 107(a)(2)) Arrangers (intent to dispose) (CERCLA 107(a)(3)) Transporters (CERCLA 107(a)(4)) Copyright 2014

10 10 A Little History In 1980, CERCLA contained a cost recovery action under 107(a), but no explicit right of contribution. Copyright 2014

11 11 A Little History (cont.) The Courts Began to Interpret 107(a) Joint and Several Liability Private Right of Action Divisibility or Apportionment Defense Contribution Claims Were Uncertain Copyright 2014

12 12 A Little History (cont.) Copyright 2014 Restatement (Second) of Torts 433A Apportionment of Harm to Causes (aka Divisibility Defense) (1)Damages for harm are to be apportioned among two or more causes where (a) there are distinct harms, or (b) there is a reasonable basis for determining the contribution of each cause to a single harm. (2) Damages for any other harm cannot be apportioned among two or more causes.

13 13 A Little History (cont.) 1986 SARA Amendments added an explicit right of contribution at 113(f) of CERCLA Copyright 2014

14 14 A Little History (cont.) From 1986 to 2004, the Courts struggled with the meaning and interplay between CERCLA 107 and 113, and generally came to agreement that 107(a) cost recovery claims seeking to impose joint and several liability could only be brought by the Government innocent parties 113(f) claims for contribution could be brought by everyone else to recover a portion of their response costs Copyright 2014

15 15 A Little History (cont.) Plaintiff in a contribution action has the burden of proving: 1. That it paid more than its fair share 2. The fair share of the contribution defendant; and 3. The overall size of the pie. In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate. (CERCLA 113(f)(2)) Copyright 2014

16 16 A Little History (cont.) The Gore Factors (aka Equitable Factors) The ability of the parties to demonstrate that their contribution to a discharge, release, or disposal of a hazardous waste can be distinguished; The amount of the hazardous waste involved; The degree of toxicity of the hazardous waste; The degree of involvement by the parties in the generation, transportation, treatment, storage, or disposal of the hazardous waste; The degree of care exercised by the parties with respect to the hazardous waste concerned, taking into account the characteristics of such hazardous waste; and The degree of cooperation by the parties with Federal, State, or local officials to prevent any harm to public health or to the environment. Copyright 2014

17 17 The Supreme Court, 107 v. 113 Along Comes the Supreme Court: Cooper Industries v. Aviall Services, 543 U.S. 157 (2004) U.S. v. Atlantic Research, 551 U.S. 128 (2007) Burlington Northern & Santa Fe Railway Co. v. United States, 556 U.S. 599 (2009) Copyright 2014

18 18 The Supreme Court, 107 v. 113 (cont.) Cooper Industries v. Aviall Services, 543 U.S. 157 (2004) Section 113(f) claims for contribution can only be asserted during or following an action brought under 106 (a government action) or under 107(a), [or following an administrative or judicially approved settlement with the government] Basis for the holding: that s what the statute says Copyright 2014

19 19 The Supreme Court, 107 v. 113 (cont.) Any person may seek contribution from any other person who is liable or potentially liable under section [107] of this title, during or following any civil action under section [106] of this title or under section [107] of this title. Such claims shall be brought in accordance with this section and the Federal Rules of Civil Procedure, and shall be governed by Federal law. In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate. 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 [106] of this title or section [107] of this title. CERCLA 113(f)(1) (emphasis added) Copyright 2014

20 20 The Supreme Court, 107 v. 113 (cont.) Since every Court of Appeals had limited 107(a) claims to the government or an innocent party, a private party that voluntarily incurred cleanup costs had no cause of action under CERCLA after the Aviall Services decision Copyright 2014

21 21 The Supreme Court, 107 v. 113 (cont.) U.S. v. Atlantic Research, 551 U.S. 128 (2007) Any party who incurs response costs, has not yet been sued under 106 or 107(a) of CERCLA, and otherwise satisfies the elements of 107(a), may assert a cost recovery claim under 107(a) Basis for the holding: 107 says claims are available to recover costs of response incurred by any other person. Any other person means any other person Copyright 2014

22 22 Copyright 2014 The Supreme Court, 107 v. 113 (cont.) 107(a) of CERCLA provides that a responsible party shall be liable for (A) (B) all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe not inconsistent with the national contingency plan any other necessary costs of response incurred by any other person consistent with the national contingency plan CERCLA 107(a)(4)

23 23 The Supreme Court, 107 v. 113 (cont.) Burlington Northern & Santa Fe Railway v. United States, 556 U.S. 599 (2009) Arranger Liability Court looked at the dictionary definition of arranged for disposal to resolve a split in circuits regarding arranger liability Divisibility Court reinstated divisibility defense to a government 107(a) claim relying upon 433A of the Restatement (Second) of Torts Copyright 2014

24 24 Burlington Northern Facts of Burlington Northern Copyright 2014

25 25 Burlington Northern (cont.) Brown & Bryant Superfund Site Pesticide reformulator and distributor Tanks, lagoons, debris, soil and groundwater contaminated by several pesticides EPA spends $8 million in response costs Ongoing efforts involve GW pump & treat, supply well decom. and MNA Copyright 2014

26 26 Burlington Northern (cont.) B&B originally on 3.8 acres (1960) and leases.9 acres from railroads in 1975 B&B ceases operations 1989 Pond, sumps and Dinoseb spill area are main release points Dinoseb and D-D (1,2-DCP) are main GW contaminants Copyright 2014

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31 31 Burlington Northern (cont.) Apportionment Facts Railroad owned 19 percent of the surface area of the Site (0.9 acres/4.7 acres) Railroad leased their parcel to B&B for 45 percent of the time of operation (13 yrs/29yrs) Only spills of Nemagon (DBCP) and Dinoseb (not D-D) substantially contributed to contamination originating on the Railroad parcel and those two chemicals contributed two thirds (66 percent) of the total Site contamination requiring remediation Copyright 2014

32 32 Burlington Northern (cont.) Court s Calculation of Railroad Liability 19% x 45% x 66% = 6% BUT Allowing for calculation errors of up to 50% make it 9% Copyright 2014

33 33 Burlington Northern (cont.) The District Court apportioned the liability sua sponte The Court of Appeals reversed because the record did not establish a reasonable basis for apportionment The Supreme Court reversed the Court of Appeals and Reinstated the District Court s Apportionment Ruling Copyright 2014

34 34 Burlington Northern (cont.) The big change by the Supreme Court in Burlington Northern is that the meaning of reasonable has changed. Previously, as a practical matter, the courts interpreted reasonable to mean to a scientific certainty or provable. After Burlington Northern, reasonable seems to mean plausible or rational. This decision should have been a very strong signal to the lower courts to allow the defense of apportionment in many more circumstances. The other ramification was that plaintiffs, including the government, face greater risk from orphan shares. Copyright 2014

35 35 Recap Recap If you have incurred response costs on a cleanup you are conducting, and have not been sued by anyone, you can bring a 107(a) cost recovery claim joint and several liability If you have been sued under 106 or 107(a), or settled with the government through an administrative or judicially approved settlement, you are limited to a 113(f) contribution claim several liability only Copyright 2014

36 36 Recap (cont.) Divisibility/Apportionment is a defense to 107(a) joint and several liability Equitable Allocation is an equitable allocation of liability by the court between liable parties, but the result can vary significantly depending upon whether its: An allocation between jointly and severally liable defendants in a 107(a) cost recovery action, or An allocation involving severally liable parties in a 113 contribution action Copyright 2014

37 37 Why It Matters R B B B Copyright 2014

38 38 Why It Matters Copyright 2014

39 39 Why It Matters Successful Divisibility Defendants R gets 10% B gets 30% Equitable Allocation Among Jointly & Severally Liable Defendants that asserted cross-claims under 113(f) R gets 25% B gets 75% Copyright 2014

40 40 Why It Matters Contribution under 113(f) Copyright 2014

41 41 Why It Matters R & B sue G in contribution under 113(f), Must show R & B paid more than their fair share Must show total contributions of all parties Must show G s share of that total The Court can then apply equitable factors to allocate the response costs Discussing 113(f), the Supreme Court in Atlantic Research approvingly quoted the Restatement (Second) of Torts 886A(2) No tortfeasor can be required to make contribution beyond his own equitable share of the liability. Copyright 2014

42 42 Questions? John F. Gullace, Esq Manko, Gold, Katcher & Fox, LLP Copyright 2014

43 Allocating CERCLA Liability: Divisibility or Section 113 Equitable Contribution Kathleen M. Whitby Spencer Fane Britt & Browne LLP March 5, Kansas City Omaha Overland Park St. Louis Jefferson City Denver

44 Post-BNSF Cases For the purists: Burlington Northern & Santa Fe Railway Co. v. United States, 556 U.S. 599, 129 S.Ct. 1870, 173 L.Ed.2d 812, 568 ERC 1161, 77 USLW 4366 (2009). As of February 24, 2014, Burlington Northern had been cited in 167 opinions (not all CERCLA cases and sometimes more than once in a continuing case), including 22 federal appellate cases, 75 district court cases, 5 state court cases, and 1 bankruptcy case. Kansas City Omaha Overland Park St. Louis Jefferson City Denver 44

45 Reminders Divisibility only applies to joint & several liability under Section 107. [I]nsofar as the District Court made reference to equitable considerations favoring apportionment, it erred. Equitable considerations play no role in the apportionment analysis; rather, apportionment is proper only when the evidence supports the divisibility of the damages jointly caused by the PRPs.... As the Court of Appeals explained, apportionment looks to whether defendants may avoid joint and several liability by establishing a fixed amount of damage for which they are liable, while contribution actions allow jointly and severally liable PRPs to recover from each other on the basis of equitable considerations. Burlington Northern, 556 U.S. at 615, FN 9. Kansas City Omaha Overland Park St. Louis Jefferson City Denver 45

46 Reminders If the claim is by or between co-prps, this does not automatically mean the claim is for Section 113 contribution. After Atlantic Research, PRPs may seek cost recovery under Section 107. Conversely, just because the complaint cites Section 107, it may not sound in cost recovery. Section 107 also establishes the classes of responsible party liabilities which are pursued under Section Kansas City Omaha Overland Park St. Louis Jefferson City Denver 46

47 Cases: Ashley II PCS Nitrogen Inc. v. Ashley II of Charleston LLC, 43 ELR (4th Cir., 04/04/2013) Apportionment disallowed on three separate theories Time at the site Innocent current owner Geography But when apportionment fails, equitable allocation is still available. For a more detailed analysis, see Ashley-II-Decision--Property-Redevelopers-and- Superfund--Liability-Defenses / Kansas City Omaha Overland Park St. Louis Jefferson City Denver 47

48 Cases: NCR Corp / Appleton Papers -- Fox River Litigation began in 2008 in the ED of Wisconsin concerning PCB contamination in five Operable Units of Fox River. NCR produced carbonless copy paper by manufacturing a PCB-containing emulsion which it sent to Appleton Paper to be applied to the paper. This process produced broke -- paper scrap and trimmings. Appleton Paper sold the broke, through brokers, to paper recycling companies who used it in their own papermaking facilities. This emulsion manufacture, paper coating, and broke paper recycling process resulted in the discharge of PCBs into the Fox River. Kansas City Omaha Overland Park St. Louis Jefferson City Denver 48

49 Kansas City Omaha Overland Park St. Louis Jefferson City Denver 49

50 Cases: NCR Corp / Appleton Papers -- Fox River Appleton Papers Inc. v. George A. Whiting Paper Co. (E.D. Wis.,3/1/2011) Paper recyclers at top of Fox River (OU-1) sought to impose arranger liability on NCR and Appleton Papers for OU-1 (upriver of Appleton plant), and sought contribution for costs paid downriver (OUs 2 to 5). Court found questions of fact and denied summary judgment to recyclers on issue of Appleton Papers and NCR s arranger liability for OU-1. Court had ruled in 2009 that NCR/Appleton could not recover equitable contribution from recyclers for OUs 2 to 5 because NCR, and not the companies operating the other plants, had been aware of the significant risks of PCBs at an early date but had decided to accept the risk of potential environmental harm in exchange for the financial benefits of continued (and increasing) sales of carbonless paper. Court ruled in this 2011 decision that recyclers can recover 100% contribution from NCR/Appleton for costs already paid towards OUs 2 to 5. Kansas City Omaha Overland Park St. Louis Jefferson City Denver 50

51 Cases: NCR Corp / Appleton Papers -- Fox River Appleton Papers Inc. v. George A. Whiting Paper Co. (E.D. Wis.,7/3/2012) Court found Appleton Paper was not an arranger, and therefore not liable for PCB contamination in the River, because there was insufficient proof of intent to dispose as required by Burlington Northern. Characterized broke as both waste and product. Saw no specific intent to dispose Appleton was indifferent to the final destination of the broke. Broke was sold as a useful product to the defendant recyclers. Bales of paper are not inherently hazardous. Analogized to sale of copper for recycling as similar transaction with no intent to dispose. Found NCR itself also not an arranger based on sale of emulsion to Appleton Papers for application to carbonless paper -- sale of manufactured product, not waste disposal. Kansas City Omaha Overland Park St. Louis Jefferson City Denver 51

52 Cases: NCR Corp / Appleton Papers -- Fox River U.S. v. NCR Corp., (ED Wis. 4/27/2012) Followed finding of no liability for Appleton Paper in George A. Whiting Paper Co and 2011 decisions. EPA wanted NCR to dredge 660k yds 3 of OU-4 sediment in 2012; NCR willing to do only 500k yds 3 and stopped work. US sought preliminary injunction to compel NCR to perform; NCR claimed divisibility and that only 9% of PCBs in OU-4 were attributable to it. Court said yes to US, no to NCR: Mass of PCBs does not dictate cost of cleanup. Harm is dependent on placement of PCBs surficial or under layers of sediment. Independent factors currents, wind, time affect distribution of PCBs and so indivisibility of harm. Kansas City Omaha Overland Park St. Louis Jefferson City Denver 52

53 Cases: NCR Corp / Appleton Papers -- Fox River U.S. v. NCR Corp., 688 F.3d 833 (7th Cir., 8/3/2012) Expedited appeal of the April 27, 2012 district court s denial of divisibility to NCR for OU-4. Agreed with district court that harm is not capable of apportionment and sustained preliminary injunction. Because EPA used 1 ppm standard for River sediment cleanup, any discharges upstream would require cleanup downstream in OU-4. Cleanup costs alone do not equal environmental harm, but costs can approximate harm. Observes that in Burlington Northern, the parties agreed that apportionment was theoretically possible. 556 US at 608. Burden to show divisibility was on NCR. Kansas City Omaha Overland Park St. Louis Jefferson City Denver 53

54 Cases: NCR Corp / Appleton Papers -- Fox River U.S. v. NCR Corp., (ED Wis. 4/30/2013) Judgment after full trial on US demand for permanent injunction against NCR and six other defendants. Court concludes that NCR and upstream recyclers failed to prove that the harm was divisible downstream. [E]ven though it is undeniable that Burlington Northern loosened the rules governing how a given harm might be apportioned, it did not address the key issue here, which is whether the harm is theoretically divisible in the first place. NCR at 17. Answer is no, after fact-intensive examination of expert testimony and River fate & transport, harm is not divisible. US receives permanent injunction requiring all defendants to perform work required by 2007 UAO, with some defendants limited to certain OUs and no inj. for response costs. Kansas City Omaha Overland Park St. Louis Jefferson City Denver 54

55 Other Cases Team Enterprises LLC v. Western Inv. Real Estate Trust, 647 F.3d 901, 909 (9th Cir., 2011) (no intent to dispose by drycleaning equipment manufacturer) At most, the design indicates that Street was indifferent to the possibility that Team would pour PCE down the drain. This is insufficient. U.S. v. General Electric Co., 670 F.3d 377 (1st Cir. 2012) (GE liable for PCBs sold as a paint ingredient despite claim of lack of intent to dispose) Material was labeled and stored as scrap or waste, sometimes given away and sometimes sent to landfill, and was often contaminated with other chemicals. Kansas City Omaha Overland Park St. Louis Jefferson City Denver 55

56 Other Cases W.R. Grace & Co. v. Zotos Int'l, Inc. slip op. at 60 (W.D. N.Y., (9/26/2013) Liability for disposal of returned hair care products because At every step preceding actual disposal, Zotos owned and was responsible for returned product, set policies governing returns, and made all decisions relative to the ultimate fate of returned goods. These facts are more than sufficient indicia of Zotos's intent. Wilson Rd. Dev. Corp. v. Fronabarger Concreters, Inc. (E.D. Mo., 9/11/2013) Property owners downgradient from MEW PCB transformer site seek response costs for migrating contaminants; court finds that utilities are arrangers under Burlington Northern because they retained ownership of the transformers and knew PCB-oil would not be returned, or sold scrap transformers as junkers. Kansas City Omaha Overland Park St. Louis Jefferson City Denver 56

57 Other Cases Pakootas v. Teck Cominco Metals, Ltd. See Part III of Webinar. US v. Wilmer slip op. at 11 (D. Colo., 3/7/2013) Pro se defendant sold trailer with containers of print shop liquids, and court denied US summary judgement. It is unclear whether, at the time of Weiss's sale to Wilmer, the print shop liquids were useful hazardous materials or instead merely hazardous waste. If the print shop liquids were useful hazardous materials, Burlington Northern would require the Government to prove that Weiss had the specific intent to dispose of them. 556 U.S. at 610. However, if the Government proves that the print shop liquids were hazardous wastes, whether it would be required to further establish that Weiss had the specific intent to dispose of them remains an open question. Kansas City Omaha Overland Park St. Louis Jefferson City Denver 57

58 Take-Away Points Manufacturer equipment cases (i.e., drycleaning equipment) or good product sales, even with knowledge of disposal; intent to dispose controls and courts find no liability. Traditional CERCLA cases (waste drums, leaking transformers) decided as always no divisibility of harm. In-betweeners are where litigation over divisibility will continue i.e., materials not inherently wastelike (paper) or transaction not clearly involving waste disposal (property redevelopment), but with harm severe or costs not easily attributed to volume, time or geography. Kansas City Omaha Overland Park St. Louis Jefferson City Denver 58

59 Questions? Kate Whitby Spencer Fane Britt & Browne Kansas City Omaha Overland Park St. Louis Jefferson City Denver 59

60 Strafford ALLOCATING CERCLA LIABILITY: Divisibility or Section 113 Equitable Contribution Assessing Harm, Proving Divisibility of Harm Defense Absent a Bright Line Test, and Apportioning Costs Live CLE Webinar Wednesday, March 5, :00 p.m. 2:30 p.m. EST IV. Best Practices A. Circumstances Lending Themselves to a Divisibility Defense B. Presenting a Divisibility Defense Presented by: Richard Du Bey Short Cressman & Burgess PLLC 999 Third Avenue, Suite 3000 Seattle, Washington (206) rdubey@scblaw.com

61 IV. Best Practices A. How not to Present a Divisibility Defense Pakootas v. Teck Cominco Metals, Inc. Ltd. No. CV LRS (U.S. District Court, Eastern District of Washington) Nature of the Litigation: CERCLA Site in Northeast Washington; Claims: CERCLA citizen suit, cost recovery, NRDA, and NRD Three Parties: Plaintiffs the Confederated Tribes of the Colville Reservation and the State of Washington; Defendant Teck Metals, Ltd. Key Issue Adjudicated by Motion: Rule 56 Dismissal of Teck s Divisibility / Apportionment Affirmative Defense 61

62 Setting: The Upper Columbia River Lake Roosevelt created by Grand Coulee Dam in 1942 Colville Reservation west of Lake Roosevelt Spokane Reservation east of Lake Roosevelt From the Grand Coulee Dam to the U.S./Canada border is 150 miles Teck Metals, Ltd. operates the world s largest leadzinc smelter 10 miles upstream from border at Trail, British Columbia 62

63 Upper Columbia River Site Teck Smelter Canada United States Columbia River 63

64 Teck s Trail Smelter (Historical) 64

65 Teck s Trail Smelter (Current) 65

66 Teck s Hazardous Substance Disposal Practices Teck discarded hazardous substances in the form of slag and effluent directly into the Columbia River Teck ultimately stipulated to disposal between 1930 to 1995 of: 9,970,000 tons of slag; and Effluent containing lead, zinc, cadmium, arsenic, copper, mercury, thallium, and other hazardous substances Both slag and effluent were transported downstream and released in the United States 66

67 Teck s Slag Slag collected at Black Sand Beach, two miles downstream of US-Canada border Scanning electronic microscope (SEM) image of slag just downstream of US-Canada border 67

68 Timeline 1999 Confederated Tribes of the Colville Reservation petitioned U.S. Environmental Protection Agency for a CERCLA Preliminary Assessment 2001 EPA conducted sampling/analysis of sources of hazardous substances 2003 EPA issued a Unilateral Administrative Order to Teck, a Canadian corporation 68

69 Early Litigation Teck rejects the 2003 EPA Order and asserts that EPA does not have jurisdiction. EPA fails to enforce its Order. In 2004 two members of the Confederated Tribes of the Colville Reservation (Tribe) filed a CERCLA citizen suit against Teck seeking to enforce the Order issued by EPA. In 2005 the Tribe and the State of Washington join the litigation as co-plaintiffs. 69

70 Bifurcation In 2008 and 2009, the Parties bifurcate the seven causes of action: First Trial 1. Civil penalties on UAO (Dismissed in 2009) 2. Declaratory Relief for CERCLA Cost Recovery Subsequent Trial(s) 3. CERCLA Cost Recovery 4. Declaratory Relief for Natural Resource Damage Assessment (NRDA) Costs 5. Recovery of NRDA Costs 6. Declaratory Relief for Natural Resource Damages 7. NRD 70

71 DIVISIBILITY/ APPORTIONMENT Teck Asserts the Affirmative Defense of Apportionment 71

72 Teck Proceeds with Apportionment Defense while RI/FS Ongoing Six testifying experts supporting apportionment defense Numerous consulting experts Tens of thousands of pages of expert reports and supporting materials Teck s assumption: Burlington Northern & Sante Fe Ry v. United States, 129 S. Ct (2009), had changed divisibility / apportionment law 72

73 The BNSF Site Apportionment Calculation RRs parcel was19% of the site surface area Leased parcel to polluter for 45% of time the polluter was in operation Two chemicals responsible for 2/3 of the contamination Formula:.19 x.45 x.66 = 6%, plus 50% multiplier = 9% apportioned to railroads Source: Appendix to Supreme Court opinion. 73

74 The UCR Site (Zinc, as example) Allegations for Total Site (Not Limited to Zinc) 150-river mile site Multiple contributing tributaries More than 100 years of operations in the region 6 other smelters More than 400 mines; at least 4 contributing mills Industrial and municipal contributions Erosion Landslides Source: Expert Report of Victor J. Bierman (for Tribes/State), Sept

75 Teck s Apportionment Approach Apportionment Paradigm The harm in this case is the extent of sediment contamination by hazardous substances released at the Site.... [T]his single harm is divisible based on the relative contribution of metals released at the Site by different sources and can reasonably be apportioned using scientific methods. Teck expert, January 14, 2011 report Key assumptions 1. Harm limited to only one medium: sediment. (Top 5 cm) 2. Only six substances at issue, the SAC metals : arsenic, cadmium, copper, lead, mercury, and zinc. Plus, antimony. 75

76 Tort Law Foundation for CERCLA Apportionment Principles Section 433A of the Restatement (Second) of Torts Damages for harm are to be apportioned among two or more causes where (a) there are distinct harms, or (b) there is a reasonable basis for determining the contribution of each cause to a single harm. (Cited in United States v. Chem-Dyne Corp., 572 F. Supp. 802 (D.C. Ohio 1983)). Two categories of harms under Restatement: (1) Distinct harms or single harms for which there is a reasonable bassis for division according to the contribution of each (divisibility available); (2) Single and indivisible harm (no divisibility available). 76

77 Plaintiffs File Summary Judgment Motion to Dismiss Teck s Affirmative Defense of Apportionment Failure to account for full extent of harm Limited to sediment Subset of hazardous substances No evaluation of release from metals contributed to Site Did not address commingling Failure to provide reasonable basis for apportionment 77

78 April 4, 2012 District Court Grants Tribe s Motion; Teck s Apportionment Defense Dismissed Harm 78

79 Dismissal of Apportionment Defense, cont d No evidence of proportionality No evaluation of synergistic effects Distinction between liability and nature of liability 79

80 Dismissal of Apportionment Defense, cont d Harm Not met Burden of Proof 80

81 Teck Stipulates to the Elements of CERCLA Liability and Chooses to Go to Trial on Personal Jurisdiction A. Facility CERCLA hazardous substances are found in the reaches of Columbia River from international border to Grand Coulee Dam. B. Covered Person 1. Discharges a. Between 1930 and 1995, Teck discharged at least 9.97 million tons of slag directly into the Columbia River via outfalls at its Trail Smelter. b. Teck discharged effluent via outfalls at the Trail Smelter directly into the Columbia River. This discharged effluent contained lead, zinc, cadmium, arsenic, copper, mercury, thallium and other metals, as well as a variety of other chemical compounds. 81

82 Teck Stipulates (Cont.) 2. Transported to UCR a. At least 8.7 of the at least 9.97 million tons of slag discharged by Teck from its Trail Smelter has been transported by the Columbia River downstream of the international border into Washington, and some portion of that slag has come to be located at the UCR site. b. Nearly all of Teck s effluent that was discharged by its outfall at the Trail Smelter has been transported by the Columbia River downstream of the international border into Washington, and at least some portion of it has come to be located at the UCR site. 82

83 Teck Stipulates (Cont.) 3. Teck hazardous substances released to environment in UCR a. Teck slag that has come to be located in the UCR site has leached and continues to leach hazardous substances... b. Hazardous substances in Teck s effluent... has subsequently leached or otherwise moved by desorbtion or other geochemical and/or biogeochemical processing to and within the waters and sediments found at the UCR site. 83

84 At Summary Bench Trial Judge Suko Rules And Finds Teck Liable Under CERCLA Findings of Fact and Conclusions of Law favorable to Plaintiffs the Tribes and State. Rule 54(b) Judgment issued, then vacated. Timeline for next phases of litigation: Response cost trial set for December,

85 B. Presenting a Divisibility Defense Apportionment is proper when there is a reasonable basis for determining the contribution of each cause to a single harm. Restatement (Second) of Torts 433A(1)(b). Question is whether there is sufficient evidence from which the Court can determine the amount of harm caused by each defendant. If the expert testimony and other evidence establishes a factual basis for making a reasonable estimate that will fairly apportion liability, joint and several liability should not be imposed. 85

86 Burden of Proof 1. Define the total harm from all releases at the Site: All individual hazardous substances The synergistic impact of all contaminants of concern The resulting total clean up costs to address the harm Possibly the total harm to natural resources 86

87 Burden of Proof (cont.) 2. Define the total harm from your client s releases at the Site. 3. Use expert testimony to demonstrate that there is a Reasonable Basis to support the Court s conclusion, as a matter of law, that the total harm at the Site is divisible. 87

88 Burden of Proof (cont.) 4. Use expert testimony to prove that the harm caused by your client s releases may be divided from the total harm to the Site and that your client is entitled to an allocated share of the harm. 5. Remember that the total harm is not the mere disposal or release of hazardous substances, but the consequences thereof. 88

89 Strafford ALLOCATING CERCLA LIABILITY: Divisibility or Section 113 Equitable Contribution Assessing Harm, Proving Divisibility of Harm Defense Absent a Bright Line Test, and Apportioning Costs Richard Du Bey Short Cressman & Burgess PLLC 999 Third Avenue, Suite 3000 Seattle, Washington (206) rdubey@scblaw.com