UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
AJS 2 B63
OFFICE OF
SOLID WASTE AND EMEHGENCV RESPONSE
MEMORANDUM
SUBJECT: CMA Book on Key Superfund Liability Issues
FROM: Gene A. Lucero, Director
Office of Waste Programs Enforcement
TO: Uaste Management Division Directors
Regions I ,V ,X
Air & Uaste Management Division Directors
Regions 11,III,IV,VI,VII , VIII , IX
As requested in the AO workshop, I am sending CMA's six-
chapter book which gives the responsible party's view on
key Superfund liability issues.
You and your staff should review this book which represents
a fairly complete set of arguments that can be made by a defendant
in a superfund enforcement action.
Also, we suggest you share this document with the Regional
Counsel and Enforcement Attorneys. Additional copies may
be obtained from the Chemical Manufacturers Association, 2501 M
Street, N.V., Washington, DC, 20037, Telephone 202/887-1100, at a
fee of $12.50 per copy.
At taehment
cc: Kirk Sniff, w/Attachment
Regional Counsel, w/o Attachment
Superfund Enforcement Branch Chiefs, w/o Attachment
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A PRESCRIPTION FOR PROMPT AND EFFECTIVE
WASTE SITE CLEANUP UNDER SUPERFUND
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A PRESCRIPTION FOR PROMPT AND EFFECTIVE
WASTE SITE CLEANUP UNDER SUPERFUND
TABLE OF CONTENTS
Page
I. INTRODUCTION AND SUMMARY 1
II. SUPERFUND PROVIDES AN EFFECTIVE
CLEANUP PROGRAM 3
A. Congress Intended for the National
Contingency Plan to Serve as the
Touchstone for Prioritized, Cost-
Effective Cleanup 3
B. In Keeping with the Congressional
Plan, the First Step Is to Seek
Voluntary Cleanup from Potentially
Responsible Parties 5
C. If Voluntary Cleanup Is Not Possible,
Superfund Provides Both the Authority
and Resources for Effective Government
Cleanup 10
D. EPA's Authority to Recoup "Costs
Incurred" from Responsible Parties
Preserves the Fund and Promotes a
Fair Allocation of Society's
Cleanup Burden 13
E. Section 106 Provides for Emergency
Injunctions in Those Rare Cases
Where the Section 104 Authority is
Inadequate to Address an Imminent
and Substantial Endangerment 16
III. CONTINUED ADHERENCE TO THE STATUTORY
PLAN CAN ACHIEVE PROMPT WASTE SITE
CLEANUP 18
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A PRESCRIPTION FOR PROMPT AND EFFECTIVE
WASTE SITE CLEANUP UNDER SUPERFUND
I. INTRODUCTION AND SUMMARY.
The Administration recently changed management at EPA
amid a barrage of charges that Superfund was not being
implemented properly. EPA's critics have not, however, out-
lined how the Superfund cleanup can proceed effectively, and
it will be up to the new Administrator and his team to
embrace policies which will result in timely and effective
cleanup, [vocal critics have questioned the orientation of
the old management towards settlements and have touted
litigation as a preferred policy. Nevertheless, implemen-
tation should be based on the statute itself, because in
Superfund Congress provided a clear and sensible cleanup
policy^
Congress' first preference in the Superfund statute is
for voluntary cleanup — not litigation. This choice is in
keeping with the American legal system's traditional prefer-
ence for settlement, not to mention the unique problems
presented by litigating simultaneously against the dozens,
sometimes hundreds, of "generators" who may have sent waste
materials to an old waste disposal site. Moreover, settle-
ment efforts should take place before the institution of
litigation impairs the possibility of dialogue and problem
solving among the parties. Only if efforts to achieve a
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negotiated solution fail should EPA use its expansive author-
ity under Superfund to clean up the site and to recover its
costs. Except where a health emergency is presented, litiga-
tion is appropriate only after cleanup costs have been
incurred and EPA seeks reimbursement from potentially respon-
sible parties.
Although much maligned, EPA's settlement program to
date has collected well over $100 million to be used for
cleanup of more than forty sites nationwide. Far from being
"sweetheart" deals, these settlements have been for at least
"a hundred cents on the dollar," apportioned among genera-
tors primarily on the basis of estimates of each generator's
volumetric share of the total wastes allegedly sent to the
site. As a result of such settlements, where industry
rather than government personnel arranged for and supervised
cleanup conducted by outside engineering contractors, cleanup
has begun much sooner and generally will be carried out far
more efficiently. Moreover, because of the administrative
and legal costs saved by settlement, the aggregate costs
relating to cleanup can be expected to be far cheaper than
would be the case after litigation.
For negotiated cleanup to become a casualty of the
recent controversy over EPA personnel would indeed be tragic.
The new EPA Administration should give top priority to
developing a fair and effective settlement process. If
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settlement becomes difficult or impossible, the inevitable
outcome must be protracted, costly, and uncertain litigation,
accompanying delays in actual site cleanup and eventual
depletion of the statutory Superfund. Accordingly, it is
imperative that EPA adopt and adhere to the statutory plan
which is described in this paper.
II. SUPERFUND PROVIDES AN EFFECTIVE
CLEANUP PROGRAM.
A. Congress Intended for the National
Contingency Plan to Serve as the
Touchstone for Prioritized, Cost-
Effective Cleanup.
Throughout the deliberations which led up to the passage
of Superfund, there was uncertainty regarding the scope of
the old waste site problem, the actual level of risk to
human health and the appropriate levels and probable costs
of cleanup.—^ With Congress not in a position to direct how
available cleanup resources should be managed, it delegated
this job to the President and EPA under Section 105 of Super-
2/
fund.— In order to provide a well-managed cleanup program,
1/ See, e.g., S. Rep. No. 848, 96th Cong., 2d Sess. (1980)
at 5 (uncertainty about the "scope of the problem" and the
sources of hazard) and 18 (uncertainty about the number of
sites and the needed cleanup revenues); H.R. Rep. No. 1016,
Part I, 96th Cong., 2d Sess. (1980) at 18 (uncertainty about
the number of sites) and 21 (uncertainty about the locations
and hazards presented by abandoned sites).
2/ 42 U.S.C. § 9605.
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Section 105 requires a revised National Contingency Plan
("NCP") to set cleanup priorities and to insure cost-effective
cleanup.
The first step under the NCP is the preparation of a
priority list of at least 400 sites "designated individually"
from "throughout the United States" which are to be known as
the "top priority among known response targets."^ The list
is to be developed according to "[cjriteria and priorities
. . . based upon relative risk or danger to public health or
4/
welfare or the environment . . . The purpose of the
National Priorities List is to direct and focus the national
cleanup effort on "those facilities and sites or other
releases which appear to warrant remedial actions."^ Once
these "top priority" sites are identified, Section 105 then
requires that the NCP provide "means of assuring that remedial
action measures are cost effective . . . .^
With the NCP as the touchstone, the statute then sets
forth an orderly procedure for implementing a prioritized,
cost-effective cleanup program. Under Section 104, EPA must
3/ Section 105(8)(B), 42 U.S.C. § 9605(8)(B).
4/ Section 105(8)(A), 42 U.S.C. § 9605(8)(A). To assist
In the preparation of the list, Section 103(c), 42 U.S.C.
§ 9603(c), provides for a comprehensive round of reporting
on the existence and location of old disposal sites.
5/ S. Rep. No. 848, 96th Cong., 2d Sess. 60 (1980).
6/ Section 105(7), 42 U.S.C. § 9605(7).
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first determine whether the site will be cleaned up volun-
tarily by potentially responsible parties. If voluntary
cleanup will not be provided, EPA may then use the statutory
Trust Fund to clean up the site in accordance with the NCP.
Thereafter, Section 107 provides for recoupment from respon-
sible parties of monies spent in accordance with the NCP.
Finally, Section 106 provides injunctive authority to compel
private cleanup when an imminent and substantial endangerment
arises and EPA's Section 104/107 authority is not adequate.
It is to this statutory cleanup plan that we now turn.
B. In Keeping with the Congressional
Plan, the First Step Is to Seek
Voluntary Cleanup from Potentially
Responsible Parties.
Far from being an unauthorized means of cleaning up
waste sites, voluntary cleanup under Superfund is the pre-
ferred means of remedying conditions at old waste sites.
Section 104(a)(1) thus specifically provides that EPA must
always make an initial determination of whether "removal and
remedial action will be done properly by the owner or operator
of the vessel or facility from which the release or threat
7/
of release emanates, or by any other responsible party."-'
The genesis of this provision is Section 311 of the
Clean Water Act,^ which provides the model for Superfund's
7/ 42 U.S.C. § 9604(a)(1).
8/ 33 U.S.C. § 1321.
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National Contingency Plan, government response authority and
liability provisionsUnder Section 311, the requirement
that EPA first determine the availability of voluntary cleanup
of spills into the rivers and other waterways has proved
highly successful. A large percentage of spills are cleaned
up voluntarily, thus allowing cleanup to take place expedi-
tiously with a minimum of red tape and delay.
By embracing voluntary cleanup as the remedy of choice,
Congress acted in the best tradition of the American legal
system. For although we are generally acknowledged to be a
litigious society, most disputes are not solved by litiga-
tion. In 1981, for example, over 93% of civil cases in the
Federal Courts were settled before trial.—^
Moreover, as the number and complexity of lawsuits has
increased, leading jurists have repeatedly stressed the need
9/ Like Superfund, Section 311 provides for a National
Contingency Plan for spills (Section 311(c)(2)), for cleanup
using federal funds after a determination that voluntary
cleanup is not available (Section 311(c)(1)), and for recoup-
ment from responsible parties (Section 311(f)).
10/ See, e.g., Anglo Fabrics, Co., Inc. v. United States,
No. 279-77, slip op. at 15, 23 (Ct. CI. Jan 9, 1981) ("the
policy behind the FWPCA . . . encourages owners and operators
of oil facilities to promptly and efficiently clean up any
oil spills . . ."). Recognizing the efficiency of this
approach, Congress authorized government Section 311 cleanup
only "[i]f the owner or operator fails to do so." S. Rep.
No. 351, 91st Cong., 1st Sess. 17-18 (1969). Thus, the
Coast Guard routinely seeks private cleanup before resorting
to the government's authority. See, e.g., Union Petroleum
Corp. v. United States, 651 F.2d 734, 740 (Ct. CI. 1981).
11/ 1981 Annual Report of the Director of the Administrative
Office of the U.S. Courts, Table 36, page 238.
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to accelerate the trend toward private dispute resolution.
In the words of Judge Hubert L. Will, one of the nation's
leading trial court judges:
One of the fundamental principles of
judicial administration is that, in most
cases, the absolute result of a trial is
not as high a quality of justice as is
the freely negotiated, give a little,
take a little settlement. . . . There-
fore it is essential as part of your
procedures to provide some techniques
that will maximize the possibility of
freely negotiated settlements in cases
for which you are responsible.12/
Chief Justice Warren E. Burger has consistently made
much the same point:
It is becoming trite to say Americans
tend to be the most litigious people on
the globe, using the courts for airing
all manner of grievances, disputes and
perceived "entitlements." The escalating
demands imposed on the courts have led
to their becoming congested, slow, and
costly. Fortunately, there has been a
steady but all too limited increase in
the number and variety of alternative
dispute resolution programs, largely
stimulated by the American Bar Associa-
tion following the Pound Conference of
1976. This reflects the view that
courts are not the appropriate forums
for the resolution of many problems,
regardless of the condition of their
dockets.13/
12/ Will, Hubert L. , et al. "The Role of the Judge in the
Settlement Process," Federal Judicial Center Education and
Training Series, at 1 (1977).
13/ Burger, Warren E., 1982 Year-End Report on the Judiciary,
8-9 (1982) (footnote omitted).
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The trend in favor of alternative dispute resolution has
recently played a growing role in regulatory and administra-
tive law.^/
Any limitation of settlement discussions would be par-
ticularly distressing given the great advantages to the
public of voluntary cleanup rather than litigation. Private
industry, particularly the chemical industry, generally has
more technical and engineering knowhow than the government.
For example, at Seymour, Indiana, private parties were able,
given their superior knowledge of waste management practices,
to contract for the surface cleanup at far less cost than
the government estimate.—7' And at Bluff Road, South Carolina,
settlement was achieved only after the generators selected
one of the parties to carry out cleanup at costs much lower
than anticipated by EPA.—^ Moreover, in addition to savings
14/ Cohen, Neil J., "Settling Litigation: A New Role for
Regulatory Lawyers," 67 ABA Journal 878 (July 1981); Harten,
Philip J., "Negotiating Regulations: A Cure for the Malaise?"
Report to the Administrative Conference of the United States
(January 1982).
15/ See Legal Times, October 18, 1982, at 1. The Seymour
negotiations led to a settlement where 24 generators committed
7.7 million dollars, the full amount needed to clean up the
surface of the site. United states v. Seymour Recycling
Corp., Haz. Waste Lit. Rep, at 3,489 (S.D. Ind. 1983).
16/ At this site 15 generators paid almost two million
dollars towards surface cleanup. See United States v. South
Carolina Recycling & Disposal, Inc., Civ. No. 80-1274-6
(D.S.C.), partial consent decree (March 23, 1982). See also
Chemical Applications Co., Inc. v. Home Indemnity Co., 425 F.
Supp. 777, 779 (D. Mass. 1977) (insurer urges insured to
cleanup oil spill since government cleanup is likely to be
more costly).
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that result from harnessing industry's technical expertise,
voluntary cleanup generally produces further economies
because of the administrative and legal costs saved by
foregoing time-consuming and costly litigation.
In short, recent efforts to achieve voluntary cleanup
are in keeping not only with Superfund and the predecessor
spill program under the Clean Water Act but also with long-
standing traditions favoring settlement rather than litiga-
17 /
tion of most disputes.—If settlement discussions are
stalemated, or alternatively, are allowed to take place only
after a complaint is filed, the objective of achieving
prompt cleanup will be frustrated. Once a case is turned
over to the trial lawyers, resources and available funds are
likely to be directed towards the litigation rather than
problem solving. Dialogue among the parties is generally
impaired or becomes impossible once litigation counsel take
the reins from company lawyers and agency personnel whose
institutional interests favor settlement rather than litiga-
tion.
17/ Although this paper advocates continuation of the
settlement process, we do not intend to embrace the negotiat-
ing strategy or legal positions taken by EPA and the Justice
Department in such negotiations.
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C. If Voluntary Cleanup Is Not Possible,
Superfund Provides Both the Authority
and Resources for Effective Government
Cleanup.
While voluntary cleanup is the first and preferred step
in the Superfund scheme, the hea'rt of the statute is the
authority and funding provided for government cleanup. In
Section 104, Congress granted EPA broad authority to remedy
conditions at inactive waste sites releasing or threatening
to release hazardous substances into the environment. This
authority permits EPA to take a wide variety of emergency
actions (defined as "removal actions") as well as to fund
long-term or permanent solutions (defined as "remedial
actions"). Section 101(23), (24), 42 U.S.C. §§ 9601(23),
(24). The funding for such cleanup is provided by a Trust
Fund financed primarily by a special tax on chemical and
18/
petroleum products.—'
The fundamental importance of the Section 104 cleanup
provisions was recently emphasized by Senator George J. Mitchell
(D. Maine):
[IJt [Superfund] is primarily a clean up
mechanism, it is a mechanism designed to
give the government, the only institution
in our society that can deal with this
18/ Section 211 of Superfund, 26 U.S.C. § 4611, imposes the
Superfund tax; Section 221, 42 U.S.C. § 9631, establishes
the Trust Fund; and Section 111(a), 42 U.S.C. § 9611(a),
sets forth the authorized uses of the Fund including "payment
of governmental response costs incurred pursuant to section
9604 of this title."
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massive nationwide problem, the opportu-
nity to take those [cleanup] steps.19/
Senator Mitchell's comments echo Congress' original intent
which was to establish "a revolving fund" that would allow
the government to "cleanup hazardous waste sites first" and
"then try to recover the costs of cleanup later" from respon-
20/
sible parties.—f
Some have suggested that there are stumbling blocks in
the path of Section 104 cleanup. Most frequently mentioned
are the requirements for state participation under Sections
104(c) & (d), and the 10 percent matching fund imposed by
Section 104(c)(3). Neither of these requirements, however,
imposes a serious constraint on EPA's cleanup efforts.
Local participation in the remedial process is valuable to
public understanding of the risks posed and remedial steps
taken in site cleanup. Thirty-two states have already
21/
passed legislation addressing the 10 percent matching share.—
Moreover, even if a state cannot provide the matching share,
Sections 104(c)(1)(A)(i)-(iii) authorize EPA to spend unlimited
funds to remedy emergency conditions without regard to the
matching funds requirement.
19/ Transcript of Hearings on Oversight on Implementation
of Superfund Before the Senate Committee on Environment and
Public Works, 98th Cong., 1st Sess. 117 (Feb. 23, 1983).
20/ S. Rep. No. 848, 96th Cong., 2d Sess. 12 (1980).
21/ National Conference of State Legislatures, Hazardous
Waste Management: A Survey of State Legislation 1982 III-l
(1982).
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The government has also suggested that the Fund is
financially inadequate to support a full cleanup effort
under Section 104.—^ This contention cannot be supported.
At year-end 1982, the Treasury reported a current balance in
the Fund of over $430 million.—^ Moreover, hundreds of
millions in additional taxes are due to be collected and
additional millions can be expected from settlements and
recoupment actions under Section 107.
If the Fund should ever prove inadequate, EPA can and
should make its case to Congress. Much consideration was
given during the legislative debates as to how large a fund
was needed. This subject was "especially controversial" and
only after the "closest scrutiny" did Congress decide on
22/ In its brief in United States v. Wade, a case in the
United States Court of Appeals for the Third Circuit, No.
82-1715, the government attempts to justify reliance on
emergency injunctive provisions instead of Section 104 on
the grounds that the Fund is "simply inadequate" or "wholly
inadequate." Government Brief at 5, 30, 32.
23/ Department of Treasury, Bureau of Government Financial
Operations, Division of Financial Management, Trust & Revolv-
ing Funds Branch, "Status of Hazardous Substance Response
Trust Fund" (December 31, 1982).
24/ Under Superfund Section 303, 42 U.S.C. § 9653, the
statutory tax will terminate after September 30, 1985, when
the full $1.6 billion will have been collected. To date
more than $183.3 million have been recovered in settlements
and recoupment actions. See Office of Solid Waste and
Emergency Response Accomplishments (Jan. 21, 1983) (citing
monies obtained from settlements, private party cleanups and
cost recoveries).
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$1.6 billion.Nonetheless, Congress recognized even in
doing so that the "precise scope" of the problem was not
"readily ascertainable" and that Congress could always
2 6/
"reexamine the situation."—f
As a means of assisting Congress in carrying out such a
reexamination, Section 301(a) expressly calls for EPA, no
later than December, 1984, to make "a projection of any
future funding needs," as well as to offer "recommendations
for legislative changes," including "recommendations concern-
ing authorization levels, taxes [etc.]." 42 U.S.C. §§ 9651(a)
(1)) (C), (G). This Section 301 report provides the vehicle
for EPA to present any inadequacy in Fund financing and, if
necessary, to seek a statutory increase in the Fund.
D. EPA's Authority to Recoup "Costs
Incurred" from Responsible Parties
Preserves the Fund and Promotes a
Fair Allocation of Society's
Cleanup Burden.
Once a site is cleaned up using the $1.6 billion Fund,
Section 107(a) provides the government an opportunity to
recover "costs incurred" consistent with the NCP from respon-
sible parties. 42 U.S.C. § 9607(a). Responsible parties
25/ Statement of Rep. Florio, 126 Cong. Rec. H9155 (daily
ed. September 19, 1980); Statement of Sen. Helms, 126 Cong.
Rec. S14969 (daily ed. November 24, 1980).
26/ H.R. Rep. No. 1016, Part II, 96th Cong., 2d Sess. 5
(1980).
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are broadly defined to include site owners and operators,
transporters, and some waste generators. The standard of
liability under Section 107 is modeled after the liability
provisions of Section 311 of the Clean Water Act.^-^ Although
designed to be tough, these liability provisions were intended
to provide a fair allocation of the burdens of cleanup. For
owners and operators, the standard is "strict" liability;^/
for other responsible parties, defenses are narrowly circum-
scribed by Section 107(b). 42 U.S.C. § 9607(b). After much
debate, Congress adhered to common law causation principles^/
and rejected language which would have imposed joint and
22/ Section 101(32) of Superfund, 42 U.S.C. § 9601(32)
provides that "'liable1 or 'liability' under this subchapter
shall be construed to be the standard of liability which
obtains under [Section 311 of the Federal Water Pollution
Control Act]."
28/ Section 311 imposes strict liability on the owners and
operators of a facility. See United States v. LeBeouf
Brothers Towing Co., 621 F.2d 787, 789 (5th Cir. 1980),
cert, denied, 452 U.S. 906 (1981). For Superfund parties,
such as generators and transporters, whose connection to the
hazardous condition is more remote, a negligence standard
may be appropriate. See City of Philadelphia v. Stepan
Chemical Co., 544 F. Supp. 1135, 1143 n.10 (E.D. Pa. 1982).
29/ Section 107 of Superfund provides that before a plain-
tiff can obtain reimbursement from a defendant, he must show
that the defendant's waste "cause[d]" the "release or threat-
ened release" necessitating cleanup action. Superfund
Section 107(a)(4), 42 U.S.C. § 9607(a)(4). By this language,
Congress intended to implement the long-standing common law
principle that causation is a fundamental and essential
prerequisite for assigning legal liability. See W. Prosser,
Law of Torts 236 (1975); 2 F.V. Harper & F. James, The Law
of Torts § 20.2 at 1110 (1956).
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30/
several liability.—Consequently, a defendant is only
required to bear his proportionate, fair share of liability.
Under these circumstances, Section 107 provides an
adequate tool allowing EPA to recover its cleanup "costs
incurred" when the prerequisites of responsible party liabil-
ity are proven. These liability provisions are carefully
drafted so as to replenish the Fund and encourage settlement
while preserving the basic common law principles of respon-
sibility and fairness necessary to engender cooperation and
confidence in the cleanup program.
30/ Joint and several liability had been provided in early
versions of Superfund, but it was explicitly removed from
the final compromise bill. As described by Senator Stafford
as well as other Senators, the deletion of joint and several
liability was deliberate and, indeed, essential to achieve
enactment. In Senator Stafford's words:
I am a realist and know that many per-
ceive [S. 1480] as punitive and unneces-
sarily rigorous. For that reason Senator
Randolph and I introduced [a compromise
bill] last week.
* * *
We eliminated the term joint and
several liability.
126 Cong. Rec. S14967 (daily ed. Nov. 24, 1980). Confirming
his statement, a "list of changes as presented by the Environ-
ment and Public Works Committee" for consideration by the
full Senate, entitled "Concessions in Stafford-Randolph
Compromise," stated that the revised bill (which ultimately
passed) " [eliminated joint and several liability." M. at
S15004 (remarks of Senator Helms).
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E. Section 106 Provides for Emergency
Injunctions in Those Rare Cases
Where the Section 104 Authority is
Inadequate to Address an Imminent
and Substantial Endangerment.
In.the case of emergencies, Congress provided in Section
106 for injunctive relief if and when the provisions of
Sections 104 and 107 are inadequate to deal with site cleanup.
Section 106 is specifically limited to "imminent and substan-
31/ •
tial endangerment"—' and provides relief under the limita-
32/
tions of traditional equitable principles.—' Use of Section
106 would, therefore, be appropriate in the case of an
imminent and substantial danger needing very prompt atten-
tion where the owner's assistance was required to deal with
the problem.
Congress' decision to limit Section 106 injunctive
actions to emergency circumstances was based on sound public
31/ 42 U.S.C. § 9606(a). Congress specifically amended
Section 106 on the Senate floor to add the condition that an
endangerment be "imminent and substantial" before an injunc-
tion could issue, even though it was aware of the "tremendous
burden of proof associated" with this standard. See Subcomm.
on Oversight of Government Management of Senate Comm. on
Governmental Affairs, 96th Cong., 2d Sess., Report on Hazar-
dous Waste Management and the Implementation of the Resource
Conservation and Recovery Act 29 (Comm. Print 1980).
32/ It is well-established that statutory injunctive author-
ity such as Section 106, like all equitable remedies, may
issue only when the plaintiff lacks an adequate remedy at
law. See Weinberger v. Romero-Barcelo, 102 S. Ct. 1798
(1982 ). Congress itself has specified that this type of
imminent hazard provision should "not be used when the sys-
tem of regulatory authorities provided elsewhere in the bill
could be used adequately to protect the public health."
H.R. Rep. No. 1185, 93d Cong., 2d Sess. 35 (1974) (Safe
Drinking Water Act).
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policy considerations. Injunctive litigation embroils both
the government and private parties in time-consuming and
expensive legal proceedings draining off resources which
could be better used for site cleanup. Perhaps worse is the
delay which can result from litigation. Cases as complex as
the typical Superfund cleanup can drag on for years with
site cleanup stalled during the interim. Senator Mitchell
captured the essence of the problem in the recent Senate
oversight hearings when he remarked that the "legal process
does not afford appropriate response, it does take time, it
can be used to delay up to five ... or ten years; and it
is one of the reasons Superfund was created . . ^
An equally compelling reason for limiting the use of
injunctive actions is that of avoiding further impositions
34/
on already overburdened courts.—' Besides being time-
consuming, the questions presented by site cleanup are sci-
entifically complex and generally beyond the ken of most
trial judges. Site cleanup under the NCP, for example,
would require the court to conduct or oversee a preliminary
hazard evaluation (40 C.F.R. § 300.64, 47 Fed. Reg. 31180,
31214 (1982)) and then to choose among eleven "immediate
removal" options (40 C.F.R. § 300.65, 47 Fed. Reg. at
33/ Transcript of Hearings before the Senate Committee on
Environmental and Public Works, supra note 19, at 114.
34/ Burger, Warren E., 1982 Year-End Report on the Judiciary,
12 (1982) ("New judgeships are desperately needed to cope
with the ever increasing caseload").
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31214-15), followed by an even more detailed evaluation of
longer-term "planned removal and remedial action" (40 C.F.R.
§ 300.66, 47 Fed. Reg. at 31215). This, in turn, requires
an in-depth review of six technical factors which bear on
whether planned removal action (40 C.F.R. § 300.67, 47 Fed.
Reg. at 31215-16) and remedial action (40 C.F.R. § 300.68,
47 Fed. Reg. at 31216-17) are being carried out in a cost-
effective manner.
The courts, by definition, are ill-equipped to supervise
resolution of such complex technical questions.^/ Far from
promoting prompt site cleanup, therefore, achievement of
Congress' cleanup objectives would be frustrated and delayed
by having the courts routinely involved in depth at the pre-
cleanup and cleanup stages.
III. CONTINUED ADHERENCE TO THE STATUTORY
PLAN CAN ACHIEVE PROMPT WASTE SITE CLEANUP.
Whatever the merits or demerits of EPA's management, it
was Congress that chose voluntary cleanup as a key weapon in
the government's waste cleanup arsenal. The wisdom of that
choice has generally been confirmed by the cleanup experience
35/ See Friends of the Earth v. Wilson, 389 F. Supp. 1394,
1396 (S.D.N.Y. 1974) ("'Courts should not, in the exercise
of sound discretion grant relief'" where their "supervision
would be of a highly technical nature" (citations omitted)).
See also Refrigeration Engineering Corp. v. Frick Co.,
370 F. Supp. 702, 715 (W.D. Tex. 1974) ("difficulty of
enforcement is, in itself, often a sufficient reason for
denying injunctive relief").
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to date. Litigation, such as that the government chose to
file in United States v. Conservation Chemical Company—/
37/
and United States v. Price,—7 has languished m delay and
time-consuming court filings that might have been avoided
had settlement negotiations been pursued.
By contrast, negotiated voluntary cleanups such as
38/
those achieved at Bluff Road, South Carolina,—' Seymour,
Indiana,—^ Deerfield, Ohio,—/ Hyde Park, New York,^/ and
St. Louis, Michigan—^ resulted in prompt cost-effective
36/ Civ. No. 80-0883-CV-W-5 (W.D. Mo., filed Sept. 29,
1980). The Conservation Chemical Co. case was originally a
RCRA Section 7003 complaint against the site owner/operator
alleging immediate and substantial endangerment. On Novem-
ber 22, 1982 a new action, Civ. No. 82-0983-CV-W-5, was
filed under Superfund. Despite the allegation of imminent
and substantial endangerment over two and a half years of
litigation have passed without even a site assessment in
compliance with the NCP, much less cleanup.
37/ Civ. No. 80-4104 (D.N.J., filed Dec. 22, 1980).
38/ See United States v. South Carolina Recycling & Disposal,
Inc., supra note 16.
39/ See Memorandum Opinion, United States v. Seymour Recycl-
ing Corp., Haz. Waste Lit. Rep, at 3489 (S.D. Ind. 1983).
40/ See Certificate of Completion filed in Ohio v. Georgeoff,
Civ. No. C81-1961 (N.D. Ohio, Oct. 13, 1982) (Ohio EPA
certified that the surface of the site had been properly
cleaned up).
41/ See United States v. Hooker Chemicals & Plastics Corp.,
Civ. No. 79-989 (W.D.N.Y. Jan 19, 1981) (Consent decree
providing for the cleanup of the Hyde Park Landfill in
Niagra, New York).
42/ See United States v. Velsicol Chemical Corp., Civ. No.
82-303 (E.D. Mich., Order of Dec. 27, 1982 providing for
cleanup of Velsicol's former plant site in St. Louis, Michigan).
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- 20 -
cleanup. A key factor in the prompt effective action at
these sites seems to have been that the cleanup contractor
was selected and provided by the settling parties without
the delay of government red tape.
Superfund settlements have also provided an important
supplement to the resources available in the Fund. Many
agreements have been reached by site owners, many of whom
are on-site generators.^/ By year-end 1982 over $118.7
million had been collected as a result of EPA's efforts.^/
Against this background of success, it is most unfor-
tunate that recent allegations and controversy have disrupted
Superfund's preferred policy of voluntary cleanup. Hopefully,
the new EPA Administrator will adhere to Congress1 original
policy preference and achieve many future settlements in
those cases where litigation can sensibly be avoided. That
is not to say that use of the Fund will be unnecessary.
When settlement cannot be achieved, the Administrator should
use his authority under Section 104 and then seek reimburse-
ment of the government's costs incurred consistent with the
43/ See, e.g., United States v. Olin Corp., Civ. No.
CV-80-PT-5300NE (N.D. Ala.) (see 5 Chem. & Rad. Waste Lit.
Rep. 1023-24 (March, 1983)) (cleanup of Olin's plant on the
Redstone Arsenal in Huntsville, Alabama); In the Matter of
Stauffer Chemical Co., Westport, Connecticut, EPA Docket No.
82-1070 (May 25, 1982) (agreement to perform an investigative
study at the Woburn, Massachusetts site).
44/ Office of Solid Waste and Emergency Response Accomplish-
ments (Jan. 21, 1983).
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- 21 -
NCP under Section 107. But the aim should be to use the
Fund only when voluntary efforts fail so that the Fund can
be preserved for those circumstances where responsible
parties do not exist or cannot be found.
In the end, public confidence in the fairness and
propriety of EPA's cleanup program can best be preserved if
the statutory plan is followed. Settlements made in accor-
dance with NCP procedures will protect the public health,
welfare and the environment. Federal funds will be used for
cleanup when voluntary cleanup is not available. And respon
sible parties will be required to reimburse the government
for their share of the costs incurred in federally funded
cleanup under an even-handed and fair interpretation of the
liability provisions of Section 107.
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CHEMICAL MANUFACTURERS ASSOCIATION
December 30, 1982
TO: CMA Board of Directors
General Counsels' Group
Ad Hoc Superfund Litigation Group
Superfund Task Group
CMA Member Company Legal Contacts—
Superfund
This memorandum transmits a six-chapter book which will be
of assistance to our members either in conducting Superfund
settlement negotiations or in litigating key Superfund liability
issues. Development of this book is part of a range of CMA
Superfund-related activities. This memorandum briefly explains
those various activities and summarizes the content and conclu-
sions of the book's six chapters.
Background
CMA conducts activities relating to Superfund on a number of
fronts. Under the leadership of the Government Relations Commit-
tee, we closely follow legislative developments on the federal
and state level. Under the leadership of the Environmental
Management Committee, we play an active role in the development
of regulations and other administrative policies.
The legal department has been managing other elements of our
Superfund activities. For instance, we have expended a great
amount of time and resources (and will continue to do so) pro-
moting procedures and principles to further reasonable settlements
between industry and government at waste sites. This is in line
with CMA's policy that the national inactive waste site problem
is manageable, and can be solved relatively quickly, by rational
prioritization, cost-effective use of the Fund, and expeditious,
fair settlements with responsible parties.
We have also recognized that in order to foster fair settle-
ments, CMA and its members should be prepared to challenge
unreasonable implementation of Superfund in the courts. To further
FROM: David F. Zoll, Vice President
and General Counsel
RE: Kirkland & Ellis Book on Key Superfund Liability Issues
Formerly Manufacturing Chemists Association—Serving the Chemical Industry Since 1872.
2501 M Street, NW • Washington, DC 20037 • Telephone 202/887-1100 • Telex 89617 (CMA WSH)
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- 2 -
these goals, various company counsel recommended that we establish
an "Ad Hoc Superfund Litigation Group." We established this Group,
consisting of company attorneys with expertise in Superfund legal
issues, in April, 1982. (A list of the members of this Group is
included in front of the book.) Based on the advice of various
company attorneys, the Group selected Ed Warren of the law firm
of Kirkland & Ellis to serve as counsel. As events have
developed, this Group's efforts have been broadly divided into
two phases.
Under "Phase I," Kirkland & Ellis has drafted—with the
Group's guidance, review, and input—a book with six chapters on
crucial issues of Superfund interpretation as they might affect
the liabilities of our members for individual waste site remedial
actions.
Under "Phase 11," the Group has been monitoring various
Superfund cases throughout the country to determine which cases
may be appropriate for some form of institutional CMA participa-
tion. The purpose of this phase is to assure that the courts
render the most responsible interpretations of the key Superfund
liability issues addressed in the book. We have already deter-
mined that the South Carolina Recycling case (Bluff Road, South
Carolina) is an appropriate forum for such involvement.
The Book
Phase I is now complete. We are today distributing the book
with the following six chapters:
(1) Apportionment of Liability Under Superfund (56 pp.)—
Analyzes Superfund's structure/language/legislative history,
common law, and equitable principles, and case law under §311 of
the Clean Water Act, and concludes that damages are to be appor-
tioned and that "joint and several" liability does not apply; also
develops point that even if "joint and several" were imposed, a
right of "contribution" would then exist.
(2) The Standard of Liability (17 pp.)—Analyzes, development
of "strict liability" at common law, Superfund's structure/lam-
guage/legislatiye history, and case law under §311 of the Clean
Water Act, and concludes that Superfund provides a "hybrid stan-
dard" which is nominally "strict," but which allows considerations
of relative fault when allocating liabilities among multiple
parties; concludes that "relative degree of fault" may become am
important factor for apportionment.
(3) The Causation Requirement (46 pp.)—Analyzes develop-
ment of causation principles at common law, Superfund and Clean
Water Act (§311) structure/language/legislative history, and con-
cludes that Superfund preserves traditional principles which impose
burdens on the government or other plaintiffs to prove cause-in-
fact and proximate cause; concludes that "relative degree of
causation" may become am important factor for apportionment.
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- 3 -
(4) Substantive Standards Under Section 106 of Superfund
(57 pp.)—Analyzes the structure/language/legislative history
of §106, both alone and as it relates to other Superfund pro-
visions; concludes that §106 is a limited emergency provision
designed to supplement the primary Superfund response provisions
(§§104 and 107) in extraordinary cases in which the government
can meet the traditional requirements for equitable relief; con-
cludes that generators are not proper parties under §106; and
that in all events, remedies under §106 must be in accordance
with the cost-effective principles of the NCP and must be based
on balancing of equities and equitable defenses.
(5) The Liability Provisions of Section 107 (71 pp.)—
Analyzes the structure/language/legislative history of §107, both
alone and as it relates to other Superfund provisions? concludes
that Congress carefully limited the types of response costs and
damages which might be recoverable; analyzes which parties may be
proper plaintiffs; distinguishes among the liabilities which may
properly attach to various types of defendants; develops numerous
defenses and liability limitations; and analyzes the important
limitations Congress placed on the "punitive" damages provisions.
(6) The Potential For Constitutional Challenge to Superfund
Provisions Having Retroactive Effect. (88 pp.)—Analyzes Supreme
Court development of constitutional doctrines in areas of
(a) impairment of contracts, (b) taxing of property without just
compensation, (c) deprivation of property without due process;
concludes that in specific factual situations in which the govern-
ment or other party makes over-reaching or harsh demands, any of
these doctrines might invalidate specific portions of Superfund
as so applied; and that in harsh factual situations, the presenta-
tion of persuasive constitutional arguments may promote judicial
rulings which adopt reasonable statutory constructions.
Special Points Regarding the Book
I would like to make three important points about the book:
(1) The chapters of the book should be read together as
one integrated document. The concepts of apportionment, standard
of liability, and causation are, for instance, highly inter-
related. One should not be addressed in isolation from the other,
and the various chapters contain numerous cross-references.
Similarly, a firm understanding of the concepts in the first three
chapters is crucial to an understanding of the positions in the
§106 and §10 7 arenas.
(2) The book is written from an advocacy perspective and
its sections are basically in the style one would use to write
an adversarial brief before a court. The book does not gener-
ally include the types of discussions a counsel would use in
presenting a confidential assessment of the relative strengths
and weaknesses of positions and alternatives.
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- 4 -
(3) Finally, it is important to stress that by providing
this book to our members, we do not intend to encourage members
to litigate rather than settle their potential Superfund liabil-
ities. It is our hope that this book can primarily serve to
provide our industry with a full recognition of its best legal
arguments which may be relevant to waste site negotiations, bo
that we can negotiate from a position of strength in obtaining
fair settlements. But we recognize that various of our members
may from time to time be forced into Superfund litigation, and
in such situations this book will provide valuable research and
drafting assistance.
In this context, it is important to understand the purpose
of including the chapter on constitutional issues. CMA fully
supports a rapid, efficient, and cost-effective cleanup program
under Superfund and we believe the statute provides the govern-
ment with the necessary tools—including the $1.6 billion fund
derived largely from taxes on our industry—to accomplish these
goals. As the chapter on constitutional issues notes, however,
there may be factual situations in which a federal or state entity
may seek to impose unduly harsh interpretations of certain sections
of the statute, and these interpretations may be held constitution-
ally infirm in such a setting. In such a situation, raising con-
stitutional issues may result in assuring more reasonable inter-
pretations .
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SUPERFUND:
KEY LIABILITY ISSUES
December, 19 82
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CM
CHEMICAL MANUFACTURERS ASSOCIATION
DAVID F. ZOLL
Vice President
General Counsel
SUPERFUND: KEY LIABILITY ISSUES
The purpose of this book of six, interrelated chapters, is
to assist members of the Chemical Manufacturers Association in
conducting Superfund settlement negotiations and/or in litigating
key Superfund liability issues.
It is CMA's policy that the national inactive waste site
problem can and should be solved through reasonable and fair
implementation of Superfund. We believe that this book will
promote such implementation by providing our members with basic
research and drafting assistance to defend themselves in the
courts in cases where efforts to obtain reasonable settlements
fail.
The book is written from an advocacy perspective and its
sections are basically in the style of an adversarial brief before
a court. The book does not generally include the types of
discussions a counsel would use in presenting a confidential
assessment of the relative strengths and weaknesses of positions
and alternatives.
The firm of Kirkland & Ellis prepared these six chapters for
the members of CMA under the guidance and direction of the CMA
Ad Hoc Superfund Litigation Group and my legal department staff.
The "Ad Hoc Group" is comprised of numerous CMA member company
attorneys with expertise in Superfund liability issues. The
members are:
Chairman: Robert Reichert, E. I. du Pont de
Nemours & Company
Vice-Chairman: Phocion Park, Monsanto Company
Steering Committee: David Graham, Velsicol Chemical
Corporation
William Hood, Ashland Chemical Company
David Sigman, Exxon Chemical Company
Cornelius Smith, Union Carbide
Corporation
Messrs. Reichert and Park
(over)
Formerly Manufacturing Chemists Association —Serving the General Industry Since 1872
2501 M Street. NW • Washington, DC 20037 • Telephone 202/887-1350 • Telex 89617 (CMA WSH)
-------
- 2 -
Other members:
Scott Ferguson, Olin Corporation
Kenneth Fitzpatrick, The Dow
Chemical Company
Ellen Friedell, Rohm and Haas
Company
David Giannotti, Occidental
Chemical Corporation
Robert St. Aubin, FMC Corporation
Martin Teicher, American
Cyanamid Company
Margaret Tribble, American
Cyanamid Company
Harold Wallum, Allied
Corporation
Peter Wynne, ARCO Chemical
Company
Roger Zehntner, Stauffer
Chemical Company
Richard G. Stoll, CMA's Deputy General Counsel, has assisted
me in managing the activities of the Ad Hoc Group and the pro-
duction of this book.
David F. Zor]
Vice President and
General Counsel
December 30, 19 82
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KIRKLAND JL ELLIS
SUPERFUND:
KEY LIABILITY ISSUES
December 1982
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SUPERFUND:
KEY LIABILITY ISSUES
TABLE OF CONTENTS
Page
PREFACE
Outline of Chapters 2
Overview of Legislative Background 4
CHAPTER 1
APPORTIONMENT OF
LIABILITY
INTRODUCTION AND SUMMARY OF CONCLUSIONS 1-1
A. The Nature and Development of Joint
and Several Liability at Common Law 1-3
B. Possible Application of Joint and
Several Liability to Multigenerator
Hazardous Waste Sites 1-6
C. Issues Addressed and Summary of Conclusions .. 1-9
I. NEITHER THE STATUTORY TEXT NOR ITS LEGISLATIVE
HISTORY PROVIDES FOR JOINT AND SEVERAL LIABILITY .. 1-10
A. The Statutory Text Is Inconsistent
with Joint and Several Liability I-10
B. The Legislative History Shows That
Congress Deliberately Rejected
Joint and Several Liability 1-12
1. Both original House and Senate
bills provided expressly for
joint and several liability 1-13
2. The liability provisions of both
bills were rejected as too "punitive" ... 1-15
- i -
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Page
3. Congress intentionally eliminated
joint and several liability to secure
passage of the compromise bill 1-17
C. The Legislative History May Be
of Assistance to the Courts in
Apportioning Damages Under the Act 1-20
II. EVEN IF THE ISSUE WERE LEFT OPEN BY SUPERFUND,
COMMON LAW WOULD NOT PROVIDE FOR JOINT AND
SEVERAL LIABILITY AMONG GENERATORS 1-24
A. If the Issue Remained Open for Judicial
Interpretation, the Courts Would Have
To Evolve a Federal Rule or Defer to
State Law in Deciding Liability and
Apportionment Issues I-2S
B. As Sources for a Federal Rule,
Admiralty and State Law Would Not
Impose Joint and Several Liability 1-30
1. Admiralty law would not impose
joint and several liability 1-32
2. Because the common law favors
apportionment of damages, joint and
several liability would not be imposed
unless damages cannot be apportioned .... 1-33
3. In pollution-related cases, damages
have generally been apportioned 1-35
4. Joint and several liability may be
more likely between generators and
site owners than among generators 1-42
C. Congress Reference to Section 311 Does Not
Provide for Joint and Several Liability 1-45
III. EVEN IF JOINT AND SEVERAL LIABILITY WERE THE
RULE, CONTRIBUTION IS PROVIDED BY STATUTE 1-49
A. There Is a Federal Right to
Contribution Under Superfund 1-49
B. Superfund's Statutory Contribution Right
Would Divide Damages Based on Relative
Causation and Fault Among the Parties 1-54
- ii -
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Page
CHAPTER 2
THE STANDARD OF LIABILITY
INTRODUCTION AND SUMMARY OF CONCLUSIONS II-l
I. STRICT LIABILITY AT COMMON LAW II-2
II. THE STATUTE AND ITS LEGISLATIVE HISTORY
INDICATE THAT CONGRESS "PARED DOWN" THE
STRICT LIABILITY STANDARDS OF EARLIER BILLS I1-8
III. THE STANDARD OF LIABILITY UNDER SECTION 311, AND
THEREFORE SUPERFUND, IS A HYBRID ONE, WITH STRICT
LIABILITY TEMPERED BY CONSIDERATIONS OF FAULT 11-10
IV. CONCLUSION 11-16
CHAPTER 3
THE CAUSATION REQUIREMENT
INTRODUCTION AND SUMMARY OF CONCLUSIONS III-l
I. THE UNDERPINNINGS OF A CAUSATION REQUIREMENT III-4
II. CAUSE-IN-FACT, INCLUDING BOTH "IDENTIFICATION"
AND "DAMAGES," IS AN INVARIABLE REQUIREMENT
FOR RECOVERY UNDER SECTION 107 II1-6
A. Cause-In-Fact Has Always Been
Required at Common Law 111-7
B. Proof of Cause-In-Fact Is an Essential
Prerequisite To Recovery Under
Superfund Section 107 I11-10
1. The provisions of section 107
require proof of causation I11-10
2. Causation is required by the courts
under the Clean Water Act 111-15
C. The Legislative History of Superfund Confirms
the Causation Requirement of Section 107 .... 111-18
- iii -
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Page
1. The House bill required strict
proof of causation under common
law standards II1-19
2. The Senate Committee bill
also required strict proof
of causation in most cases 111-20
3. Strict causation requirements
were carried forward in section
107 of Superfund 111-23
D. The Cause-In-Fact Requirement Substantially
Limits Superfund Liability II1-25
1. Superfund plaintiffs must
bear the burden of proof II1-26
2. Causation provides a mechanism for
apportionment in Superfund cases II1-29
III. PROOF OF PROXIMATE CAUSE IS
ALSO REQUIRED UNDER SUPERFUND . . 111-31
A. The Proximate Cause Requirement
at Common Law 111-31
B. Superfund Plaintiffs Must
Prove Proximate Cause II1-35
IV. ABERRANT THEORIES OF CAUSATION II1-37
CHAPTER 4
SUBSTANTIVE STANDARDS
UNDER SECTION 106 OF SUPERFUND
INTRODUCTION AND SUMMARY OF CONCLUSIONS IV-1
I. SECTION 106 IS AN EMERGENCY PROVISION
DESIGNED TO SUPPLEMENT THE PRINCIPAL
CLEANUP PROVISIONS OF SECTIONS 104 AND 107 IV-3
II. ALTHOUGH IT MAY BE ARGUED THAT SECTION 106
IS SOLELY JURISDICTIONAL, THE COURTS ARE
LIKELY TO FIND SUBSTANTIVE REQUIREMENTS
AND EMPLOY EQUITABLE AND COMMON LAW
PRINCIPLES IN CONSTRUING SECTION 106 IV-7
- iv -
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Page
A. The Courts Are Likely To Construe
Section 106 As Substantive Rather
than Solely Jurisdictional IV-7
B. Courts Will Rely on Statutory Requirements
and General Equitable Principles To 'Elaborate
the Substantive Standards of section 106 IV-12
1. Substantive standards for section
106 are found in the statutory
requirement of "imminent and
substantial endangerment," general
equitable principles, the requirement
that relief be consistent with the
"public interest and equities of the
case," and the NCP IV-12
2. The same substantive standards
also apply to section 106
administrative orders IV-14
III. SECTION 106 MAY BE USED ONLY IN CASES OF
"IMMINENT AND SUBSTANTIAL ENDANGERMENT" AND WHEN
THE GOVERNMENT MEETS THE TRADITIONAL EQUITABLE
REQUIREMENTS FOR INJUNCTIVE RELIEF IV-16
A. The "Imminent and Substantial Endangerment"
Requirement Limits Section 106 to
Extraordinary Circumstances IV-16
1. The statutory scheme indicates
that section 106 deals only
with extraordinary risks IV-16
2. The legislative history confirms
that section 106 should be reserved
for extraordinary circumstances IV-18
3. Similar provisions in related statutes
also support a restriction of section
106 to extraordinary circumstances IV-21
B. Under Equitable Principles, Generators
Usually Will Not Be Proper Party Defendants .. IV-30
C. Equitable Principles Limit Section 106
Injunctions to Those Rare Instances When
Section 104 Cleanup Authority Is Inadequate .. IV-35
- v -
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Page
1. Equitable relief may issue only where
the government has demonstrated the
inadequacy of its legal remedies IV-35
2. The legislative history of section
106 and comparable provisions in
other statutes confirm that
injunctions should be limited to
cases where section 104 is inadequate ... IV-40
IV. EVEN WHERE SECTION 106 INJUNCTIVE RELIEF
IS APPROPRIATE, EQUITABLE PRINCIPLES
LIMIT THE LIABILITY OF GENERATORS AND
THE SCOPE OF CLEANUP REQUIRED IV-44
A. Section 106 Cleanup Must Be
Consistent with the NCP IV-44
B. Section 106 Cleanup Can Be Ordered Only
After Balancing the Equities of the Case IV-47
C. In Some Cases, Equitable Defenses will Protect
Generators from Section 106 Injunctions IV-51
CHAPTER 5
THE LIABILITY PROVISIONS OF SECTION 107
INTRODUCTION AND SUMMARY OF CONCLUSIONS V-l
I. SECTION 107 IS AN INTEGRAL PART
OF A UNIFIED STATUTORY SCHEME V-4
A. Superfund Provides for Response and Cleanup
Supplemented by Limited Liability for
Response Costs and Natural Resource Damages .. V-4
B. The Legislative Evolution of Section 107
Indicates That a Cautious Rather Than an
Expansive Interpretation Is Required V-6
II. CONGRESS CAREFULLY LIMITED THE RESPONSE COSTS
AND DAMAGES RECOVERABLE UNDER SECTION 107 V-9
A. Recoverable Response Costs Are Limited
by the Requirements of Section 104 and
the National Contingency Plan V-lo
- vi -
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Page
1- Superfund's language and legislative
history require compliance with
section 104 and the NOP in order to
recover under section 107 V-ll
2. The better interpretation reads section
107 "in tandem" with section 104 V-17
3. Section 104 and the NCP establish cost-
effective standards governing both
response and section 107 recovery V-19
a- Federal removal actions are limited
in both scope and expense V-19
b. Federal remedial actions must
be cost-effective, comport
with the NCP and meet other
statutory criteria v-2l
c. With federal approval, a state
can exercise the statutory response
authority and recover its costs .... v-23
d. Other plaintiffs can recover
only for response costs
incurred in compliance with
section 104 and the NCP V-28
B. Future Response Costs Cannot Be Recovered .... V-30
1. Costs must have been "incurred" V-30
2. Declaratory judgments for future
response costs are not available V-32
C. Recovery of Natural Resource Damages
Is Limited to Economic Loss by the
Federal Government or a State V-3 5
1. Natural resource damages may not
exceed reduced economic value V-36
2. Common law confirms that reduced
economic value normally should be
the measure of resource damages V-41
3. Natural resource damages may be
recovered only by the federal
and state governments, and are
limited to public resources - * . . V-47
- vii -
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Page
III. PROPER SECTION 107 PLAINTIFFS INCLUDE THE
FEDERAL AND STATE GOVERNMENTS, AND IN ACTIONS
TO RECOVER RESPONSE COSTS, "ANY OTHER PERSON" V-49
IV. TO BE LIABLE, A DEFENDANT MUST BE
SPECIFICALLY TARGETED IN SECTION 107 V-53
A. Present Owners and Operators
Are Broadly Liable V-54
B. Past Owners and Operators Are Liable Only
if Disposal Occurred During Their Tenure V-56
C. Only Transporters Who Select Disposal
Sites or Cause Releases Are Liable V-57
D. Only Generators Who Select
Disposal Sites Are Liable V-58
V. SECTION 107 PROVIDES OTHER DEFENSES
AND LIABILITY LIMITATIONS V-63
A. Defenses Based on Acts of God, War,
and Third Parties Are Provided V-63
B. Federally Permitted Releases,
Pesticide Applications, and Actions
Taken in Accordance with the NCP
Are Exempt from Superfund Liability V-67
C. The Statute's Monetary Limits
on Liability Are High V-69
VI. LIABILITY FOR PUNITIVE DAMAGES FOR
NONCOMPLIANCE WITH ADMINISTRATIVE ORDERS
IS SUBJECT TO IMPORTANT LIMITATIONS V-70
CHAPTER 6
THE POTENTIAL FOR CONSTITUTIONAL CHALLENGE
TO SUPERFUND PROVISIONS HAVING RETROACTIVE EFFECT
INTRODUCTION AND SUMMARY OF CONCLUSIONS VI-1
I. IN MANY SITUATIONS, RETROACTIVE
APPLICATION OF SUPERFUND MAY POSE
SIGNIFICANT CONSTITUTIONAL QUESTIONS VI-3
- viii -
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Page
A. Typical Situations in Which the Retroactive
Provisions of Superfund May Be Challenged
on Constitutional Grounds VI-3
1. The imposition of retroactive liability
under a new cause of action for
previously lawful activities VI-4
2. The retroactive invalidation
of contractual provisions VI-7
3. The deprivation of rights
in private property VI-9
B. Distinguishing Among Cases and Parties
Within the Typical Situations VI-11
II. THE BASES FOR A CONSTITUTIONAL CHALLENGE TO
SUPERFUND PROVISIONS IN APPROPRIATE CASES VI-12
A. Protection Afforded by the Contract Clause .. Vl-18
B. Protection Afforded by the Taking Clause .... VI-28
C. Protection Afforded by
the Due Process Clause Vl-35
D. Elaboration of the Constitutional
Protection Against Retroactivity VI-46
1. Further development of
the Due Process analysis VI-47
2. Possible extended applicability of
the Taking and Contract Clauses VI-53
III. SUMMARY OF THE CONSTITUTIONAL ARGUMENTS:
CRITERIA FOR FRAMING A CHALLENGE TO
SUPERFUND PROVISIONS IN APPROPRIATE CASES VI-55
A. Challenging the Imposition of Retroactive
Liability under a New Cause of Action
for Previously Lawful Activities VI-57
B. Challenging the Retroactive Invalidation
of Contractual Provisions VI-71
C. Challenging the Deprivation of
Rights in Private Property VI-75
- ix -
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Pa
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SUPERFUND:
KEY LIABILITY ISSUES
PREFACE
Hazardous waste sites throughout the country have
received dramatically increased attention in recent months,
principally under the influence of the Comprehensive Envi-
ronmental Response, Compensation, and Liability Act,1 which
was enacted in December 1980 and which is popularly known as
"Superfund.11 This attention has taken many forms, including
hard-fought federal and state litigation and complex settle-
ment negotiations — both involving many parties and hereto-
fore unresolved issues.
David F. Zoll, the Chemical Manufacturers Association's
General Counsel, at the request of several member company
counsel, formed an advisory group of company attorneys to
guide the Association's efforts to analyze comprehensively
the many unique, yet important legal issues that will flow
from the government's implementation of Superfund's liability
sections.
This book is a result of CMA's effort to assist in
Superfund implementation. It is designed to analyze Super-
fund's liability provisions, principally from the standpoint
1 Pub. L. No. 96-510, 94 Stat. 2767 (1980), codified at
42 U.S.C. § 9601 et seq.
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- 2 -
of off-site generators, and to provide a comprehensive and
coherent analysis that can be used by the chemical industry
in responding to governmental initiatives at the many hazar-
dous waste sites throughout the country, be they settlement
discussions or contested litigation.
Outline of Chapters
Perhaps the most controversial issue of Superfund is
that of joint and several liability versus apportionment,
which is addressed in chapter 1. Although at one time
Congress considered imposing joint and several liability, it
clearly rejected that result in the final Act, an outcome
consistent with common law standards as well. Chapter 1
relates this rejection of joint and several liability,
describes the factors that should be considered in appor-
tioning damages, and outlines the scope of a defendant's
right to contribution when he has paid more than his fair
share of cleanup costs.
Chapter 2 focuses on another key issue — the proper
standard of liability under Superfund. Although a superfi-
cial reading of the legislative history has led some commen-
tators to conclude that Superfund necessarily imposes strict
liability on all defendants, a more careful analysis reveals
that the answer is not so simple. As discussed in chapter 2,
the appropriate standard is a hybrid one, allowing considera-
tion of relative fault among multiple parties.
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- 3 -
The nature of the causation requirement under Superfund
is analyzed in chapter 3. As shown there, Superfund makes
no radical changes in the traditional common law causation
principles. Plaintiffs still must prove that named defen-
dants were both the "cause-in-fact" and the "proximate
cause" of the harm that plaintiffs seek to address.
Chapter 4 analyzes section 106, the "emergency" relief
provision of Superfund. Although the government has taken a
broad reading of section 106, perhaps to circumvent some of
the restrictions of sections 104 and 107, we show that
Congress intended section 106 to be a seldom used, extra-
ordinary remedy. Thus, in typical cases, section 106 will
be unavailable to the government.
Chapter 5 addresses the general requirements of section
107 of Superfund. Section 107, the statute's sole mechanism
for recovering cleanup costs incurred by the government and
others, is a particularly detailed provision, and this
chapter takes the reader through the important limitations
on the scope of relief available, available defenses and
limits on liability, and the identity of proper plaintiffs
and defendants. This chapter discusses the basic require-
ments of section 107 claims, but some of the key section 107
issues are addressed in detail in the preceding chapters.
Chapter 6, which analyzes the constitutional limita-
tions on the scope of Superfund, takes a slightly different
approach from the preceding chapters. In this chapter, we
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- 4 -
outline the key factors in framing a constitutional chal-
lenge to a retroactive application of Superfund's liability
provisions. Although a facial challenge to the entire
statute is likely to be unsuccessful, chapter 6 shows how a
properly tailored constitutional attack on the application
of Superfund to specific facts can help defendants limit the
government's potentially onerous interpretations of the
Act's liability requirements.
It is our intent that each of these chapters largely
stand on its own as a discussion of its respective subject
area. Read together, however, they present a comprehensive
discussion of the key liability issues under Superfund,
which we believe will be helpful, especially to defendant
generators.
* * *
Before turning to the detailed discussion of these key
issues, the following overview of Superfund will provide a
helpful context to the detailed analysis in chapters one
through six.
Overview of Legislative Background
In Superfund, Congress addressed the problems presented
by hazardous waste disposal sites throughout the country,
many 9f them long-abandoned. A primary feature of the Act
was the creation of a "Superfund" — a $1.6 billion Trust
Fund, which the government could use to "clean up" dangerous
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- 5 -
dumpsites. Superfund's scope is broad while its specific
terms are ambiguous in many instances, and its legislative
history provides only limited guidance regarding many key
statutory provisions.
Originally proposed in June 1979,2 the Superfund
concept was much-debated and underwent substantial revision
before passage. The earlier Senate bill would have compen-
sated individuals for medical costs and imposed automatic
joint and several liability on many parties.
Following the November 1980 elections leading to a
Republican Senate majority in the next Congress, proponents
of Superfund frantically sought to pass a compromise bill in
its lame-duck session. The more onerous provisions of
earlier bills which had engendered bitter opposition, such
as medical compensation and joint and several liability,
were deleted in a compromise that passed the Senate. The
House of Representatives promptly passed the Senate compro-
mise language verbatim.
The resulting legislation, described by one court as
"severely diminished" and by Congress as "pared down,"
raises many questions. Because the House and the Senate
passed identical language under the pressure of the expiring
session of Congress, there is no conference report to illum-
inate the meaning of Superfund's provisions. And because
See S. 1341, H.R. 4571, 96th Cong., 1st Sess. (1979).
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- 6 -
the final legislation differed substantially from its prede-
cessor bills, traditional sources of legislative history,
such as committee reports, are of limited utility.
With language borne of hasty compromise and limited
legislative history, some aspects of Superfund are indeed
enigmatic. As we show below, however, a careful reading of
the statutory text, combined with a tracing of the legis-
lative history and reference to traditional common law
concepts, offer considerable guidance in correctly inter-
preting the statute.
This work provides such guidance. It does not pretend
to be a comprehensive discussion of all the provisions of
Superfund — such an effort would be far beyond the scope of
even this relatively lengthy book. Thus, some significant
provisions of the Act, such as its tax and recordkeeping
requirements, are addressed only tangentially, where they
are relevant to other provisions. Instead, the main focus
throughout is on the liability provisions of Superfund,
especially as they apply to persons who generate the mate-
rials that ultimately are deposited at a dumpsite.
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TAB 1
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CHAPTER 1:
APPORTIONMENT OF LIABILITY
INTRODUCTION AND SUMMARY OF CONCLUSIONS
When multiple parties are defendants, the standard
common law approach is to 11 apportion" any damages due among
the liable defendants, according to the proportional legal
responsibility of each defendant. As with most issues, the
plaintiff bears the burden of proving how much of his damage
was caused by each defendant.
"Joint and several" liability is a departure from this
practice, in which each of several defendants is liable for
the entirety of plaintiff's damage award. Plaintiff may
choose to enforce the whole award against any one defendant,
whose only recourse lies in any right he may have to bring a
separate action for "contribution" from other liable parties.
As discussed in this chapter, joint and several lia-
bility at common law arises in two distinct circumstances.
First, where two or more people act culpably and in concert
to injure another, liability may be joint and several. Even
where it may be practicably possible to apportion damages
(i.e., the cost of a broken arm to one party, a broken leg
to another), the law, as a policy matter, elects not to do
so. Joint and several liability serves to punish and deter
this sort of culpable, conspiratorial behavior.
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1-2
The second context where joint and several liability
may apply is when there is no known means for dividing the
damages among the defendants. Here the law has a practical
concern that a meritorious plaintiff should not go uncompen-
sated because he cannot prove which defendant did what
damage. Because solely pragmatic reasons underlie this
rule, its practical effect is simply to shift the burden of
proving apportionment onto defendants. If defendants can
successfully bear this burden, damages are not "indivis-
ible," and there is no longer any basis for joint and sev-
eral liability.
Among the most controversial issues that the courts
will be called upon to decide under Superfund is whether
liability for response costs should be apportioned or joint
and several. Although this question is presented most
directly by the liability provisions of section 107, essen-
tially the same considerations also apply when the govern-
ment brings an "imminent and substantial" abatement action
under section 106.1 Before addressing this issue in the
context of a multi-generator waste site, however, it is
useful to summarize briefly the nature and development of
joint and several liability at common law.
See chapter 4 at IV-16.
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1-3
A. The Nature and Development of Joint
and Several Liability at Common Law.
The concept of joint and several liability originated
in 17th century English cases where a group of individuals
banded together to commit an intentional, and usually crim-
inal, act. The theory behind the imposition of joint lia-
bility on each member of the group was that because "all
[are] coming to do an unlawful act, . . . the act of one is
the act of all."2 Traditionally, these cases involved a
common purpose, with mutual aid in carrying it out. Promi-
nent examples included group assault or group trespass.3
Where concerted action was proved, courts eventually
extended joint and several liability to jointly.negligent
actions. A classic example involved two defendants engaged
in a horse race on a crowded street, and when one of the
defendants injured a bystander, both defendants were held to
be jointly and severally liable. Hanrahan v. Cochran,
42 N.Y.S. 1031, 1032-33 (1896). The court reasoned that the
race itself was a negligent creation of risk, and defen-
dants' joint participation rendered them both fully respon-
sible. M. a"t- 1033.
Even in the absence of concerted action, courts at
about the same time extended joint and several liability to
2 See Sir John Heydon's Case, 77 Eng. Rep. 1150 (1613),
and other English cases cited in Prosser, The Law of Torts
291.
Prosser at 291-92.
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1-4
defendants having a common duty that they negligently failed
to discharge. Here, the classic case involved landowners
who failed to maintain a party wall, causing it to fall and
injure a third party. See, e.g., Simmons v. Everson, 25 N.E.
911 (N.Y. 1891).
More recently, the doctrine has been extended to cover
multiple defendants not acting in concert; or in violation of
a common duty, where their actions independently created an
indivisible harm. The rationale of these cases is that the
plaintiff may be confronted with an impossible task of
identifying the damages for which each defendant is respon-
sible and that, consequently, he may be denied recovery
unless defendants are held jointly and severally liable.
Such liability may be imposed "where either cause would have
been sufficient in itself to bring about the result, as in
the case of merging fires which burn a building."4
The "indivisible harm" theory has sometimes been
applied in products liability cases, but, even there, the
recurrent theme has been that the deserving plaintiff may
not recover at all due to his inability to attribute a
specific portion of his harm to each responsible defendant.
In practical effect, then, these cases represent not so much
a judicial dissatisfaction with apportionment as a shift of
4 Prosser at 316. See also Restatement (Second) of
Torts, §§ 433A & 433B, illustrations; Seckerson v. Sinclair,
140 N.W. 239 (N.D. 1913).
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1-5
the burden of proving apportionment from a plaintiff to
defendants. See Borel v. Fibreboard Paper Products Corp.5
Even as the doctrine has more recently evolved, joint
and several liability is appropriate under common law only
when certain conditions are met. If defendants' actions
were intentional, joint and several liability clearly
applies. The same is true of concerted negligent action or
defendants' failure to satisfy a common duty.
In other cases, however, application of the doctrine is
much more problematical. The courts have applied the doc-
trine in the case of an "indivisible harm," but usually only
in the context of providing recovery to a deserving plain-
tiff who otherwise might be denied recovery because he could
not attribute specific portions of his harm to individual
defendants. Nowhere does the common law provide for joint
and several liability when defendants are not reckless or
negligent, when they are distant in place and time from the
actual harm suffered by plaintiff or where an industry-
financed fund was created to ensure that plaintiff's harm
does not go unrecompensed absent joint and several liabil-
ity. These are, of course, precisely the circumstances the
5 493 F.2d 1076, 1095 (5th Cir. 1973), cert, denied,
419 U.S. 869 (1974) (insulation worker suffering asbestosis
recovered from asbestos insulation producers); see also Hall
v. E.I. du Pont de Nemours & Co., 345 F. Supp. 353, 371
(E.D.N.Y. 1972), aff'd sub nom Ball v. E.I. du Pont de
Nemours & Co., 519 F.2d 715 (6th Cir. 1975) (children
injured by blasting caps recovered from explosive manufac-
turers ).
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1-6
courts will face in deciding whether to apply joint and
several liability to Superfund defendants.
B. Possible Application of Joint and
Several Liability to Multigenerator
Hazardous Waste Sites.
Since the passage of Superfund, government officials
have claimed that joint and several liability may be imposed
against defendants in appropriate cases.6 Moreover, Jus-
tice Department and EPA enforcement attorneys routinely
assert joint and several liability against allegedly
responsible parties, and the threat of joint and several
liability is used as a strong bargaining lever to force
settlements.7
6 See, e.g., Remarks of Carol E. Dinkins, Ass't Atty.
Gen., Land and Natural Resources Division, U.S. Dept.
of Justice, at Federal Bar Association Panel Presentation
on "New Programs and Policies in the Department of Jus-
tice" 7 (Sept. 9, 1981). Ms. Dinkins did not suggest that
joint and several liability was always appropriate. Id. at
7-8. Nevertheless, complaints filed to date have consis-
tently alleged joint and several liability against all
defendants. Note, Joint and Several Liability for Hazardous
waste Releases Under Superfund, 68 Va. L. Rev. 1157, 1190
n.127—(1982). EPA's Acting Director of Waste Programs
Enforcement, Gene Lucero, also has indicated that joint and
several liability will be asserted routinely. 10 Pest. &
Toxic Chem. News, Nov. 3, 1982, at 17.
7 Former EPA enforcement counsel William Sullivan argued
that the threat of joint and several liability might play a
"tremendous role" in settlement negotiations. 12 Env. Rep.
(BNA) 1284 (1982). The threat of joint and several liabil-
ity is implicit in EPA's "demand letters" seeking voluntary
compliance. See Haz. Waste Lit. Rep. at 2376—90^ (May 4,
1982). The states have been even more extreme in their
(Footnote 7 continued on next page.)
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1-7
What would joint and several liability mean if it were
applied to the typical dump site? In some cases, old dis-
posal sites are located on the property of the company that
generated the waste and, accordingly, only one party is
responsible. More typically, however, many companies will
have generated and shipped waste to a dump. Shipment may
have occurred through a variety of transportation or dis-
posal companies. And ownership and operation of the site
itself may have changed hands several times.
The facts and circumstances applicable to this multi-
tude of parties may be infinitely variable: generators will
have deposited different wastes, of different toxicities, in
different quantities, at different times. Generators may
have been more or less careful in selecting transporters or
waste disposal companies. Often they may have entered into
contracts transferring liability to the disposal company.
Transporters, in turn, may range from highly professional
disposal operators to fly-by-night haulers. Operators may
have run their site carelessly or well, often pursuant to
state permits. Prior operators may have been careful and
subsequent operators careless, or vice versa.
(Footnote 7 continued from previous page.)
assertion of joint and several liability. For example, in
Ohio's letters regarding the Chem-Dyne site, the State
expressly asks each potential defendant to pay the full cost
of clean-up (in excess of $20 million). See letter from
William J. Brown, Attorney General of Ohio re Chem-Dyne,
Inc. (March 26, 1982).
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1-8
Joint and several liability would make all of these
distinctions irrelevant. All that would be required is that
the government plead a valid cause of action under sections
106 or 107,8 prove its case, and then enforce all or part
of the judgment against any defendant[s] it chooses. Even
if one assumes that the government would not enforce the
judgment in a capricious manner, two critical issues are
presented: (1) whether solvent responsible parties (who may
or may not be at fault) should pay the share of absent or
insolvent parties, or whether the federal Fund created under
section 221 should pay, and (2) who should bear the burden
of pursuing other responsible parties to make them pay their
share once a solvent responsible party is found.
One solution is for the government to pursue all known
responsible parties to secure payment of their fairly appor-
tioned share and for the remainder to be paid by the Fund.
Another is to permit joint tortfeasors who have been held
fully liable to pursue other joint tortfeasors in contribu-
tion suits to recover their fair shares. Both of these
approaches are discussed in detail in this chapter.
* The government has argued that the standard of conduct
under § 107 applies to § 106 abatement actions as well
See, e.g., Memorandum of Plaintiff United States of America
in Opposition to Defendant Gould, Inc.'s Motion To Dismiss
the Amended Complaint, filed in United States v. Wade, Civ
No. 79-1426 at 26-32, (Memorandum filed April 22, 1982).
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1-9
C. Issues Addressed and Summary of Conclusions
The first question addressed by this chapter is whether
Superfund itself provides for joint and several liability.
The answer is that Superfund neither provides for nor per-
mits imposition of joint and several liability. Such lia-
bility would be inconsistent with statutory provisions
allowing claims against the Fund to prevent a partially
responsible party from having to bear more than his fair
share. Moreover, it is highly implausible that Congress
would have imposed joint and several liability — without
even mentioning the term — while simultaneously creating a
Fund financed by taxes on industry to pay for response costs
when private parties are absent or insolvent.
This conclusion is supported by the legislative his-
tory. Both the original House and Senate bills expressly
provided for joint and several liability. Congress deliber-
ately removed this language from th.2 final bill as part of a
compromise to secure passage of Superfund. In light of this
legislative history, the only reasonable conclusion is that
Congress opted for a more traditional apportionment approach
instead of joint and several liability.
Nevertheless, scattered statements during the closing
debates hint that joint and several liability, although
deleted from Superfund as enacted, could still be applied
by the courts under evolving common law doctrines. Assuming
arcruendo that these statements rather than the statutory
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1-10
text and better reading of the legislative history were
accepted, it would then be necessary to determine what
source of law to consult in deciding when to apply appor-
tionment or joint and several liability. Regardless of
whether admiralty law, state common law, or federal common
law derived from these sources were employed, liability for
clean-up of old dump sites should still be apportioned.
The final question addressed by this chapter is
whether, assuming joint and several liability were imposed,
a right of contribution exists under Superfund. As we show,
both the statute and common law provide for such a contribu-
tion action. The basis for contribution generally will be
relative causation, but considerations of fault may also
play a role.
I. NEITHER THE STATUTORY TEXT NOR ITS LEGISLATIVE
HISTORY PROVIDES FOR JOINT AND SEVERAL LIABILITY.
A. The Statutory Text Is Inconsistent
with Joint and Several Liability.
Read as a coherent whole, even without resort to the
legislative history, the statutory text suggests that Con-
gress intended apportionment rather than joint and several
liability. First and most obviously, joint and several
liability is nowhere mentioned in the statute. The only
even arguably relevant reference, section 101(32), incorpo-
rates the standard of liability under section 311 of the
Federal Water Pollution Control Act. But as discussed infra
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1-11
section 311 provides little guidance on the issue of joint
and several liability for generators under Superfund.
Looking beyond these general considerations, the $1.6
billion Response Fund eliminates any reason for joint and
several liability. The basis for such liability, to ensure
that an innocent plaintiff is compensated, Huddell v. Levin,
537 F.2d 726/ 746 (3d Cir. 1976) (Rosenn, J., concurring),
is absent where the Fund is available to reimburse plain-
tiff's damages. Members of the chemical industry are
required to contribute to the Fund precisely so that there
will be resources to pay for response costs in the absence
or insolvency of responsible parties and so that other
defendants will not be forced to bear costs for which they
are not responsible.
The inconsistency of joint and several liability and
the Act's Response Fund is further demonstrated by the
claims procedures of sections 111 and 112. Where a private
party has incurred cleanup costs, section 111(a)(2) provides
that the Fund shall be used to pay "any claim for necessary
response costs incurred by any other party [not the gov-
ernment] as a result of carrying out the national contin-
gency plan." And section 112 sets forth the procedure for
private parties to bring such claims, with subsection (a)
requiring that claims "be presented in the first instance to
the owner, operator or guarantor of the vessel or facility
from which a hazardous substance has been released." In
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1-12
cases where "a liable party is unknown or cannot be deter-
mined," section 112(b) provides for recovery from the Fund.
The claims procedures of sections 111 and 112 demon-
strate two important principles of the Act. First, they
indicate that one party should not be required to pay all
cleanup costs from a site where multiple parties are par-
tially responsible. To the contrary, section 112 strongly
implies that each party will be required to pay only his
fair share. Second, where some responsible parties cannot
be identified, section 112 makes clear that the Fund is to
pay their share. The basic thrust of joint and several
liability is precisely to the contrary — that is, to make
one responsible party potentially liable for the entire
burden for all responsible parties, including those that are
absent or insolvent.
B. The Legislative History Shows That
Congress Deliberately Rejected Joint
and Several Liability.
The omission of joint and several liability from the
statutory language was no accident, as the legislative his-
tory amply demonstrates. The question of joint and several
liability was among the most controversial issues debated in
connection with Superfund.9 Bills considered by the Senate
9 See, e.g., 126 Cong. Rec. S15004 (remarks of Sen.
Helms), id. at S15008 (remarks of Sen. Stafford) (daily ed.
Nov. 24, 1980).
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1-13
and passed by the House would have provided expressly for
joint and several liability, tempered by statutory provi-
sions for apportionment of damages among defendants in cer-
tain situations. As discussed below, however, even the
advocates of this severe liability regimen conceded that
such provisions were widely regarded as extreme and punitive
and could not be enacted.
1. Both original House and Senate bills
provided expressly for joint and
several liability.
Bills considered by both the House and the Senate would
have imposed joint and several liability on Superfund defen-
dants. The bill reported by the Senate Committee on Envi-
ronment and Public Works provided that specified persons
"shall be jointly, severally, and strictly liable," subject
to certain defenses. S. 1480, § 4(a). Similarly, H.R.
7020, the bill originally passed by the House, provided that
"liability shall be joint and several" among persons who
"caused or contributed to" a release. H.R. 7020,
§ 3071(a)(1).
Even S. 1480 and H.R. 7020, however, would not uni-
formly have imposed joint and several liability in all
cases. Rather, both bills provided for some apportionment
of liability although their provisions differed substan-
tially, with S. 1480 providing a far more limited exception
to joint and several liability. Compare H.R. 7020
§ 3071(a)(3) with S. 1480 § (4)(f).
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1-14
Under the House bill, joint and several liability was
mitigated by two provisions for apportionment. First, if a
defendant established that "only a portion of the total
costs . . . are attributable to hazardous waste" that he
generated, transported, treated, stored, or disposed of, the
defendant could be held liable only for that portion of the
costs. H.R. 7020, § 3071(a)(3)(A). Second, if apportion-
ment was not established by the defendant under subparagraph
(A), the court could apportion liability among the parties
"based upon evidence presented by the parties as to their
contribution," considering several additional factors
including the relative quantity and toxicity of the parties'
wastes, and the defendants' relative culpability. H.R.
7020, § 3071(a)(3)(B). With these provisions for appor-
tionment, H.R. 7020 passed the House.
S. 1480 also would have provided that a defendant's
liability "shall be limited to that portion of the release
or damages to which such person contributed," but only where
the defendant could show by a preponderance of the evidence
that his contribution could be distinguished or apportioned,
and that his contribution was not a "significant factor" in
causing or contributing to the release or damages. S. 1480,
§ 4(f)(1) (emphasis added).10 In addition, S. 1480 would
10 In addition, the Senate Report held out the prospect of
apportioning liability even among "significant contrib-
utors." Thus, the Report notes that "courts have exercised
(Footnote 10 continued on next page.)
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1-15
have established a right of contribution for any defendant
held jointly and severally liable. S. 1480, § 4(f)(2). On
its face, however, the "significant factor" test in the
Senate bill was so limiting that few defendants could have
qualified for statutory apportionment.
2. The liability provisions of both
bills were rejected as too "punitive."
Despite these mitigating provisions for apportionment
and contribution, the Senate concluded that the liability
provisions of both H.R. 7020 and S. 1480 were too severe.
Senator Stafford, the sponsor of the Senate bill and the
ranking minority member of the Committee on Environment and
Public Works, noted that many of his colleagues "perceive[d]
[S. 1480] as punitive and unnecessarily rigorous."11
Senator Helms emphasized that the earlier bill had received
"well-deserved criticism," because the standards of liabil-
ity were "grossly unfair."12 Similarly,' Senator Riegle
(Footnote 10 continued from previous page.)
their equitable powers to occasionally limit liability even
for significant contributors, and this discretionary power
is likely to continue to be exercised." S. Rep. No. 848,
96th Cong., 2d Sess. 38 (1980).
11 126 Cong. Rec. S14967 (daily ed. Nov. 24, 1980) (empha-
sis added).
12 Id. at S15004.
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1-16
commended the compromise legislation, suggesting that the
earlier bill had been "too burdensome or punitive."13
As a result, Senator Stafford, one of the key archi-
tects of both S. 1480 and the final Superfund legislation,
conceded, "the fact remains that at this time and in this
place S. 1480 cannot be enacted."14 Thus, Stafford recog-
nized the "strong concern and opposition" to the bill, which
required "major concessions" by the bill's sponsors to
obtain passage.15 Accordingly, even with a mitigating
provision for apportionment, the liability provisions of
S. 1480 were considered too punitive, and Senator Stafford
and other sponsors of the legislation turned to a compromise
approach that did not employ joint and several liability.
The sponsors' original compromise, however, was insuf-
ficient, and "there remained strong concern and opposition
to even that measure."16 As a result, the sponsors under-
took a "new round of negotiations." As described by Senator
Stafford:"
with the approval of the distinguished
majority leader . . . and with the
strong support and cooperative spirit of
the distinguished minority leader . . .
who made available his office as well as
Id. at S15007 (emphasis added).
Id. at S14968 (emphasis added).
Id.
Id. at S14967 (remarks of Sen. Stafford).
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1-17
his leadership and guidance, we met in
extended sessions with a number of
Senators and their staffs.
During those meetings, a new com-
promise was shaped . . .17
That compromise bill dropping joint and several liability
eventually passed the Senate.
Following Senate passage of the relaxed liability
provisions of the compromise bill, the language was presented
to the House as a fait accompli. As described in the House
debate, the Senate presented the House with an "ultimatum"
that the Senate bill be passed without amendments, or the
Senate would "kill the whole product."18 And the threat
of losing the legislation controlled — to avoid a confer-
ence committee, the House passed the Senate bill without
any changes.
3. Congress intentionally eliminated joint
and several liability to secure passage
of the compromise bill.
Because the compromise bill arose in the Senate,
greater weight should be ascribed to the Senate debates when
attempting to determine what Congress intended. As
described by Senator Stafford as well as other Senators, the
Id. The record is replete with references to the final
bill as a compromise. See, e.g., id. at S14964 (remarks of
Sen. Randolph), S15004 (remarks of Sen. Helms), S15008
(remarks of Sen. Stafford).
18 126 Cong. Rec. H11791 (comments of Rep. Harsha), H11792
(comments of Rep. Breaux) (daily ed. Dec. 3, 1980).
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1-18
deletion of joint and several liability was deliberate and,
indeed, essential to achieve enactment. In Senator
Stafford's words:
. . . I am a realist and know that many
perceive [s. 1480] as punitive and
unnecessarily rigorous. For that reason
Senator Randolph and I introduced [a
compromise bill] last week.
AAA
We eliminated the term joint and
several liability.19
Likewise, Senator Cohen stressed that the elimination of any
reference to joint and several liability was a "concession"
essential to the passage of Superfund in the Senate.20
Senator Helms made the same point, noting that "among the
concessions in [the] Stafford-Randolph compromise" was the
"eliminat[ion] [of] joint and several liability."21 In the
House debate, Representative Jeffords stressed that "this
version of the superfund legislation is somewhat weaker with
regard to imposing liability," than H.R. 7020, which nomi-
nally applied joint and several liability but which actually
provided for apportionment in many situations.22
Senator Helms explained the problems with joint and
several liability as follows:
Id. at S14967 (daily ed. Nov. 24, 1980).
Id. at S14980.
Id. at S15004.
Id. at H11799 (daily ed. Dec. 3, 1980).
19
20
2 1
22
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1-19
Retention of joint and several liability
in S. 1480 received intense and well-
deserved criticism from a number of
sources, since it could impose financial
responsibility for massive costs and
damages awards on persons who contri-
buted only minimally (if at all) to a
release or injury. Joint and several
liability for costs and damages was
especially pernicious in S. 1480, not
only because of the exceedingly broad
categories of persons subject to liabil-
ity and the wide array of damages avail-
able, but also because it was coupled
with an industry-based fund. Those
contributing to the fund will frequently
be paying for conditions they had no
responsibility in creating or even
contributing to. To adopt a joint and
several liability scheme on top of this
would have been grossly unfair.23
Consequently, Congress concluded that joint and several
liability was unfair and should be eliminated:
The drafters of the Stafford-Randolph
substitute have recognized this unfair-
ness, and the lack of wisdom in elim-
inating any meaningful link between
culpable conduct and financial respon-
sibility. Consequently, all references
to joint and several liability in the
bill have been deleted.24
In short, there can be little doubt why Congress elimi-
nated joint and several liability. Even as tempered by
apportionment provisions, the liability standards of earlier
bills, including especially S. 1480, were considered too
Id. at S15004 (daily ed. Nov. 24, 1980).
24 (remarks of Senator Helms). Likewise, Senator
Riegle praised the compromise as a "measure that represents
a positive step toward insuring a safe environment without
being too burdensome or punitive on our necessary and valu-
able chemical industry." M. at S15007.
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severe.25 The rejection of joint and several liability
necessarily invokes traditional apportionment principles,
making each defendant liable only for that portion of the
harm that he caused.
C. The Legislative History May Be
of Assistance to the Courts in
Apportioning Damages Under the Act.
Once it is determined that apportionment, not joint and
several liability, is the rule, the question is how damages
should be apportioned. Superfund provides no express guid-
ance on this point, although the statutory framework itself
may provide assistance. Causation is required for liability
under section 107,26 strongly suggesting that relative or
proportional causation should be one basis for apportion-
ment. Causation might permit apportionment in a "hori-
zontal " setting among a group of generators but might be
more difficult to apply in "vertical" setting between a
generator and his disposal site owner or an operator. In a
"vertical" situation (i.e., between a generator and either
his transporter or the site owner), apportionment on the
25 Contrary statements in the House debate by Congressman
Florio do not explain why joint and several liability was
dropped and, in any event, cannot override the explicit
statements of Senators Stafford, Helms, Cohen and others in
the Senate debates. The compromise was brokered in the
Senate and not in the House, and it is the Senate's explana-
tion, not the post facto views of Congressman Florio, that
provide the better source of legislative history.
2 8 See chapter 3.
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1-21
basis of relative fault would seem more practical, although
no statutory language expressly dictates this result.27
In the absence of clear statutory direction, courts may
wish to consider the legislative history of Superfund.
Perhaps the best reference point in the legislative history
is the apportionment scheme outlined in section 3071(a)(3)
(A) of H.R. 7020. Although this provision never became law,
it suggests that Congress considered apportionment to be
practicable and provides one reasonable approach for divid-
ing damages among liable defendants.
Under section 3071(a)(3)(A) of H.R. 7020, if a gen-
erator could have established by a preponderance of the
evidence "that only a portion of costs . . . are attribut-
able to hazardous waste generated . . . by him, such gen-
erator . . . shall be liable under this subsection only for
such portion." As among generators, the bill apportioned
damages based on that part of total response costs attribut-
able or caused by each defendant's wastes.
The House bill recognized, however, that in some cases
it would be impossible. to link specific cleanup operations
to a specific generator's wastes and thus went on to provide
a secondary means for apportioning damages. In apportioning
damages, therefore, the courts were directed to consider the
following factors:
i7 Fault will continue to play a role in assigning liabil-
ity under Superfund. See chapter 4.
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(i) the ability of the parties to
demonstrate that their contribution to a
discharge, release, or disposal of a
hazardous waste can be distinguished;
(ii) the amount of hazardous waste
involved;
(iii) the degree of toxicity of the
hazardous waste involved;
(iv) the degree of involvement by the
parties in the generation, transporta-
tion, treatment, storage, or disposal of
the hazardous waste;
(v) the degree of care exercised by the
parties with respect to the hazardous
waste concerned, taking into account the
characteristics of the waste;
(vi) the degree of cooperation by the
parties with Federal, State, or local
officials to prevent any harm to the
public health or the environment.
H.R. 7020, § 3071(a)(3)(B).28 Although part of a bill
admittedly more stringent than the compromise eventually
enacted, these criteria could provide guidance not only for
apportioning damages among generators, but also among a
generator, his transporter and the disposal site owner or
operator.
Where some responsible parties are not before the
court, either because they cannot be identified or they have
gone out of business, the Fund would pay their share of the
costs. This approach is supported by the House Report on
H.R. 7020, which states that "if one of the parties is
28 The Senate bill was intended to employ these same
factors in apportioning liability among "non-significant"
contributors. S. 1480, § 4(f)(4).
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ordered to take actions which result in his expenditure of
more than that which he establishes is his proportionate
share, he may recover the excess amount from the fund."29
This policy is carried forward in Section 112(b) as enacted,
which provides that when "a liable party is unknown or
cannot be determined," a party may recover from the Fund.
In short, the apportionment provisions of H.R. 7020,
while in no sense binding, suggest the following approach in
apportioning damages. As among various generators sharing
liability for a multigenerator site, costs should be appor-
tioned based on that portion of the response costs caused by
each defendant. In many cases, this may be determined
simply by the quantity of wastes deposited by each generator
at the site.30 As among a generator, his transporter, and
a site owner and operator, relative causation will be more
difficult to measure, and, consequently, courts are likely
to rely more heavily on relative fault in apportioning
liability.
29 H.R. Rep. No. 1016, 96th Cong., 2d Sess. 29 (1980).
30 Where one or more generators have been negligent,
however, and thereby contributed more than their propor-
tional share to the release or threat of release, courts are
likely to consider the relative degrees of culpability of
generators in apportioning damages. Such an approach is
consistent with the legislative history and with the common
law precedents, discussed infra at 1-54.
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1-24
II. EVEN IF THE ISSUE WERE LEFT OPEN BY SUPERFUND,
COMMON LAW WOULD NOT PROVIDE FOR JOINT AND
SEVERAL LIABILITY AMONG GENERATORS.
As summarized above, the best interpretation of the
statutory text and the legislative history is that Congress
explicitly rejected joint and several liability. Sponsors
of the earlier bills, however, attempted to salvage joint
and several liability by arguing in debate that the issue
should be resolved by reference to the common law.
For example, Representative Florio noted that although
joint and several liability was deleted from the bill, it
might still be applied in "appropriate circumstances," such
as "where several persons have often contributed to an
indivisible harm."31 Senator Randolph explained the dele-
tion of joint and several liability not as a "rejection of
the standards in the earlier bill," but rather as a "recog-
nition of the difficulty in prescribing in statutory terms
liability standards which will be applicable in individual
cases.1,32
31 126 Cong. Rec. H11787 (daily ed. Dec. 3, 1980). 0Repre-
sentative Florio also introduced a letter from the Justice
Department that concluded that the deletion of joint and
several liability "does not in any way preclude courts from
imposing joint and several liability where appropriate.11
Id. at H11788 (letter to Representative Florio from Alan A.
Parker, Assistant Attorney General, Office of Legislative
Affairs). See also id. at H11799 (remarks of Representative
Waxman) suggesting the same result.
32 Id. at S14964 (daily ed. Nov. 24, 1980). Senator
Stafford also noted that automatic joint and several liabil-
ity was deleted, but left open the possibility that joint
and several liability might be imposed by reference to other
sources of law. Id. at S15008.
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1-25
Plaintiffs can be expected to rely on these floor
statements as support for joint and several liability. But
even if this version of Congress' actions were accepted,
joint and several liability would not be the rule under
Superfund, because it is contrary to the common law.
A. If the Issue Remained Open for Judicial
Interpretation, the Courts Would Have
To Evolve a Federal Rule or Defer to
State Law in Deciding Liability and
Apportionment Issues.
If, contrary to the discussion in Part I supra, the
courts look beyond Superfund to fashion a common law stan-
dard of joint liability, they will confront questions of
which source of law to employ. Would the courts attempt to
fashion their own rule or would they rely on state tort law?
And if they choose to develop a federal rule, what sources
would they consult in devising such a rule? We now turn to
these questions.
Courts fashion federal rules in two distinct circum-
stances: first, to fill undefined interstices in federal
statutory schemes, and second, to create new remedies. Only
in the former instance have courts generally been willing
to formulate federal common law rules.
The distinction between filling in statutory gaps and
creating new remedies is illustrated by the Supreme Court's
recent decision in City of Milwaukee v. Illinois, 451 U.S.
304 (1981) (Milwaukee II). The Court in Milwaukee II
addressed whether a federal common law nuisance action
-------
1-26
existed following the 1972 amendments to the Federal Water
Pollution Control Act. Although the Court had previously
endorsed a federal common law nuisance action in the same
case, 406 U.S. 91 (1972), it held that the 1972 amendments
"occupied the field through the establishment of a compre-
hensive regulatory program," thus eliminating the need for
federal common law. 451 U.S. at 317. In so holding, the
Court stressed that there was no "interstice" in the statu-
tory scheme "to be filled by common law." Id. at 323.
Where statutory gaps exist, however, federal common law
has often developed. For example, in United States v. Lit-
tle Lake Misere Land Co., 412 U.S. 580 (1973), the Court
confronted contractual and property issues pertaining to the
federal government's acquisition of land under the Migratory
Bird Conservation Act. Stressing that the acquisition was
"one arising from and bearing heavily on a federal regula-
tory program," id. at 592, the Court ruled that federal,
rather than state, common law applied because "interstitial
federal lawmaking is a basic responsibility of the federal
courts." Id. at 593.
The fact that Super fund is a federal statute does not,
however, necessarily mean that unresolved questions must be
settled by a federal rule.33 Rather, federal common law
33 See United States v. Yazell, 382 U.S. 341 (1966)
(applying state common law to issues surrounding a Small
Business Administration loan); Wallis v. Pan American Petro-
leum Corp., 384 U.S. 63, 69-71 (1966) (applying state common
law under the Mineral Leasing Act of 1920).
-------
1-27
is appropriate only: (1) when there is a need for a uniform
national standard or (2) when paramount federal policies
are at stake that should be effectuated by federal courts.
The former concern has been used as a reason for
federal common law in cases involving United States com-
mercial paper. For example, in Clearfield Trust Co, v.
United States, 318 U.S. 363 (1943), the Court fashioned
federal common law to avoid "great diversity in results by
making identical transactions subject to the vagaries of
the laws of the several states." 318 U.S. at 367. And in
D'Oench Duhme & Co. v. Federal Deposit Ins. Corp., 315 U.S.
447 (1942), Justice Jackson in a concurring opinion stressed
that financial issues are not questions "to be answered from
considerations of geography." Id. at 473.
The need for national uniformity on hazardous waste
disposal liability is less compelling than for financial
instruments moving in commerce throughout the country.
Hazardous waste disposal site liability traditionally has
been addressed by the state common law of nuisance, with no
noticeable harm from a lack of uniformity. Indeed, in past
cases, the Supreme Court has held that land-related issues
are local in character and do not call for federal common
law. See Mason v. United States, 260 U.S. 545 (1923) (a
suit by the U.S. over title to allegedly public lands);
-------
1-28
Wallis v. Pan American Petroleum Corp., supra note 33 (invol-
ving oil and gas rights on federal lands).34
Federal common law might also be justified on the
ground that Superfund involves fundamental federal policies
and therefore requires uniform federal common law to ensure
that the policies are fulfilled. The federal labor laws are
an example where this rationale has justified the develop-
ment of federal common law. Textile Workers Union v. Lin-
coln Mills, 353 U.S. 448 (1957).35
One factor considered by courts in this connection is
whether and to what extent the federal statutory scheme is
comprehensive. Where the "policy of the law is so dominated
by the sweep of federal statutes," courts have held that
"legal relations which they affect must be deemed governed
by federal law." Sola Electric Co. v. Jefferson Electric
Co., 317 U.S. 172 (1942) (federal common law under the
Sherman Act). Similarly, the First Circuit has ruled in
O'Brien v. Western Union Telegraph Co., 113 F.2d 539, 541
But see United States v. Little Lake Misere Land Co.,
supra 1-26, involving mineral rights in land and rejecting
the application of state common law partly on the grounds
that the specific state law was "aberrant" and "hostile to
the interests of the United States." 412 U.S. at 596.
See Note, Joint and Several Liability for Hazardous
Waste Releases Under Superfund, 68 Va. L. Rev. at 1177, n.74
citing Lincoln Mills "as an example where "[f]ederal courts
have created federal common law based on a strong federal
policy in cases with weaker statutory bases [than Super-
fund] ."
-------
1-29
(1st Cir. 1940), that in regulating telegraph companies
Congress "occupied the field by enacting a fairly comprehen-
sive scheme," and accordingly issues unresolved by that
scheme "must be governed by uniform federal rules."
A reasonably strong case might be made for federal
common law on these grounds. Not only are Super fund's
liability provisions "fairly comprehensive," but the legis-
lative history reflects Congress1 concern that state laws
and decisions might be inadequate to fulfill the federal
policy giving rise to Superfund.
Congress' concern is best illustrated by the defeat of
a proposal by then-Representative Stockman that would have
given the states primary responsibility for cleanup activi-
ties. The Stockman alternative was overwhelmingly rejected
by Congress, with Representative La Falce noting:
We cannot have this comprehensive
approach if we allow each State to work
its own will and come up with some
patchwork built across the entire United
States of 50 differing laws ... 50
differing laws dealing with every aspect
of this problem.38
In the final debates, Representative Florio explicitly
argued that "the bill will encourage the further development
of a Federal common law."37
36 126 Cong. Rec. H9445 (daily ed. Sept. 23, 1980).
37 Id. at H11787 (daily ed. Dec. 3, 1980) (emphasis
added).
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1-30
Notwithstanding the comprehensive nature of the federal
scheme for regulating hazardous wastes, however, it is a
close question whether federal common law on liability and
apportionment issues is appropriate.38 Indeed, it is even
difficult to say where defendants1 interests lie on this
question. For example, if state common law calls for appor-
tionment of liability, then industry's interests would be
served by application of state law, assuming that the issue
were not deemed decided by the statutory text and legisla-
tive history discussed in Part I, supra. But if state
common law in a specific case calls for joint and several
liability, generators may themselves argue for a federal
common law, since as discussed below there are good reasons
for concluding that apportionment rather than joint and
several liability would be the federal rule.
B. As Sources for a Federal Rule, Admiralty
and State Law Would Not Impose Joint and
Several Liability.
If a federal rule were to be developed, courts would be
likely to turn first to admiralty precedents. The federal
38 To the contrary is a series of decisions holding that
state statutes of limitations are to be applied to federal
claims where Congress did not establish a specific limita-
tions period. See, e.g., Rawlings v. Ray, 312 U.S. 96
(1941); Campbell v. Haverhill, 155 U.S. 609 (1895). These
cases make clear, however, that the choice of a statute of
limitations period "is ultimately a question of federal
law," and the adoption of state statutes occurs only when
"consistent" with national policies in the field. United
Auto Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 706
(1966).
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1-31
common law of admiralty, deriving from the Constitution
itself, has perhaps the longest tradition and offers the
largest body of federal common law. See Texas Industries,
Inc. v. Radcliff Materials, 451 U.S. 630, 642 (1981).
A second source for the development of a federal common
law would be existing state tort precedents. For example,
in the context of developing a federal common law in the
labor area, the Supreme Court held that "state law, if
compatible with the purpose of § 301 [of the Labor Manage-
ment Relations Act] may be resorted to in order to find the
rule that will best effectuate the federal policy." Textile
Workers Union v. Lincoln Mills, 353 U.S. at 457. See also
Illinois v. Milwaukee, 406 U.S. 91, 108 (1972) ("considera-
tion of state standards may be relevant").39 As summarized
below, neither of these sources calls for the imposition of
joint and several liability.
39 But see Chicago, Milwaukee, St. Paul and Pacific Ry. v.
United States, 575 F.2d 839, 843 (Ct.Cl. 1978), discussing
S 311 of the Water Act and concluding:
We reject at the outset defendant's
contention that the tort law of the
State of Washington (which defendant
asserts, holds that violation of a duty
prescribed by statute is negligence per
se) has any relevance whatsoever to our
analysis. It is a federal statute we
are construing.
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1. Admiralty law would not: impose
joint and several liability.
If courts turn to admiralty precedents, damages would
be apportioned. In collision cases, the most common admi-
ralty fact pattern raising apportionment issues, courts have
based damages on the relative fault of the parties.40
s
The proper apportionment of damages in admiralty cases
was resolved definitively by the Supreme Court in United
States v. Reliable Transfer Co., 421 U.S. 397 (1975). There,
the Court ruled that liability "is to be allocated among the
parties proportionately to the comparative degree of their
fault." 421 U.S. at 411. The Court went on to hold that an
"equal division of damages is a reasonably satisfactory
result" in cases where "each vessel's fault is approximately
equal and each vessel thus assumes a share of the collision
damages in proportion to its share of the blame, or where
proportionate degrees of fault cannot be measured and deter-
mined on a rational basis." 421 U.S. at 405. The Reliable
Transfer case is especially helpful to generators, because
it suggests that even where damages are practically indivis-
ible they should be apportioned evenly among defendants.41
41 Gilmore & Black, The Law of Admiralty 492 (2d ed.
1975). See also Cooper Stevedoring Co. v. Kopke, Inc.,
417 U.S. 106, 108 n.3 (1974).
41 The principle of dividing damages equally in admiralty
collision cases has a long tradition. See, e.g., The
Schooner Catharine v. Dickinson, 58 U.S. 170 (1855); Weyer-
hauser S.S. Co. v. United States, 372 U.S. 597 (1963).
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1-33
Even if courts were to ignore the admiralty precedents,42
however, the existing body of state tort law strongly favors
apportionment.
2. Because the common law favors apportionment
of damages, joint and several liability
would not be imposed unless damages cannot
be apportioned.
Even at common law, joint and several liability was
never the rule unless defendants caused an indivisible
harm.43 The courts generally favor apportionment of damages
whenever possible. Prosser has noted that "entire liability
will be imposed only where there is no reasonable alterna-
tive."44 Similarly, the Restatement establishes the pre-
sumption that "[i]f two or more persons, acting indepen-
dently, tortiously cause distinct harms or a single harm for
which there is a reasonable basis for division according to
42 In the federal common law built up around the antitrust
statutes, liability has been held to be joint and several.
See Texas Industries, 451 U.S. at 646. In this case, how-
ever, the Supreme Court emphasized the punitive nature of
the liability under the Sherman Act as justification for
imposing damages in excess of those for which the defendant
was responsible. Id. at 639. By contrast, under Superfund,
there is no punitive purpose, and the Fund is intended to
pay any excess, unapportioned damages.
43 Restatement (Second) of Torts, §§ 879, 881.
44 Prosser at 314. See, e.g., Hall v. Frankel, 197 N.W.
820 (Wis. 1924) (apportionment among separate repetitions of
the same defamatory statement); Embrey v. Borough of West
Mifflin, 390 A.2d 765 (Pa. 1978) (apportionment of traffic
death damages between negligent traffic control and hospital
malpractice).
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1-34
the contribution of each, each is subject to liability only
for the portion that he has caused."^/
The key question then is whether there is any rational
basis for dividing the damages among the defendants. The
proof of the proportion caused by each defendant need not be
exact. Prosser has stated:
The requirements of proof usually have
been somewhat relaxed in such cases, and
it has been said that no very exact evi-
dence will be required, and that general
evidence as to the proportion in which
the causes contributed to the result
will be sufficient to support a ver-
dict .... As a last resort, in the
absence of anything to the contrary, it
has been presumed that certain causes
are equally responsible, and the damages
have been divided equally between
them.4 6
The acceptability of only rough apportionment of dam-
ages is illustrated by example in the Restatement:
Five dogs owned by A and B enter C's
farm and kill ten of C's sheep. There
is evidence that three of the dogs are
owned by A and two by B, and that all of
the dogs are of the same general size
and ferocity. On the basis of this
evidence, A may be held liable for the
death of six of the sheep and B liable
for the death of four.47
By rough analogy, this example would suggest that damages
might be apportioned among generators based on evidence of
45 Restatement (Second) of Torts, § 881.
46 Prosser at 319. See, e.g., Miller v. Prough, 221 S.W.
159 (Mo. App. 1920); Wood v. Snider, 79 N.E. 858 (N.Y.
1907).
47 Restatement § 433A, illustration 3.
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their relative quantities of comparably toxic waste at a
site.48
3. In pollution-related cases, damages
have generally been apportioned.
The courts have generally followed the common law pre-
sumption favoring apportionment in pollution-related cases.
Although few hazardous waste disposal cases have been
decided at state common law, they too seem to favor appor-
tionment. Taking the hazardous waste cases first, the court
in United States v. Vertac Chemical Corporation, elected to
apportion liability among two defendants partially responsi-
ble for discharging dioxin, but gave the defendants the
opportunity first to negotiate a sharing arrangement. 489 F.
Supp. 870 (E.D.Ark. 1980). Damages also were apportioned in
New Jersey v. Chemical & Pollution Sciences, Inc., 2 Chem. &
Rad. Waste Lit. Rep. 673 (N.J. Super. 1981), where the court
distinguished the differing chemical identities of the
wastes dumped by two defendants and, though noting that
"there was some overlapping" of substances, the court con-
cluded that "those overlappings tend to balance out." The
48 Whatever its other deficiences, the notorious decision
Sindell v. Abbott Laboratories, 607 P.2d 924 (Cal.), cert,
denied, 449 U.S. 912 (1980), also supports apportionment
even in the case of an indivisible harm. In Sindell,
mothers sued for injuries to their children caused by using
DES. The court used a probability of causation basis to
allocate liability among DES manufacturers according to
their respective market shares, absent proof that a particu-
lar defendant's product caused the injury.
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1-36
court further held, however, that other damages, from pollu-
tion that destroyed all beneficial use of a tract of land,
were not divisible, thereby giving rise to joint and several
liability. at 679.49
But perhaps the clearest indication that cleanup costs
are generally divisible, and therefore apportionable, is the
settlement agreements signed to date by the government. For
example, in the recent Woburn, Massachusetts, agreement
between EPA and Stauffer Chemical, EPA agreed to "determine
the proportionate responsibility of Stauffer and third
parties for the costs incurred," based primarily on the
relative quantities of wastes disposed at the site by various
generators.50 Similarly, the government's model settlement
agreement in South Carolina Recycling and Disposal, Inc.
calls upon settling defendants to pay their "pro rata share"
49 Apportionment was rejected in New Jersey v. Ventron, a
case decided under a New Jersey statute explicitly providing
for joint and several liability. 3 Chem. & Rad. Waste Lit.
Rep. 197 (N.J. Super. 1981). That case involved a suit
against a plant dumping mercury waste on-site. As between
the two parties operating the mercury plant over the rele-
vant time period, the court found joint and several liabil-
ity. The court relied both on common law and the New Jersey
statute that expressly imposed joint and several liability
in hazardous waste cases. Although the court held that
damages could not be apportioned due to indivisible harm,
the significance of this holding is minimized by the fact
that a state statute unambiguously required joint and sev-
eral liability for clean-up costs.
50 In the Matter of Stauffer Chemical Company, Westport,
Connecticut, EPA Docket No. 82-1070 (May 25, 1982) at 14.
See also id., attachments C and D, discussing the apportion-
ment criteria to be employed.
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of costs incurred.51 These recent government settlement
decisions have apportioned damages roughly in proportion to
the parties' percentage of the volume of waste at the site.
The case for apportioning damages at hazardous waste
sites is also significantly strengthened by analogous air
and water pollution precedents. Common law pollution cases
generally arise under the law of nuisance where pollution
"is regarded by the courts as capable of some rough appor-
tionment according to the extent to which each defendant has
contributed, and [accordingly] . . . each will be liable
only for his proportionate share of the harm."52
The Restatement adopts a similar position:
apportionment is commonly made in cases
of private nuisance, where the pollution
of a stream . . . has interfered with
the plaintiff's use or enjoyment of his
land. Thus where two or more factories
independently pollute a stream, the
interference with the plaintiff's use of
the water may be treated as divisible in
terms of degree, and may be apportioned
among the owners of the factories, on
the basis of evidence of the respective
51 United States v. South Carolina Recycling and Disposal,
Inc., Civ. No. 80-1274-6 (D.S.C.), "Settlement Agreement and
Release" at 3. See also Settlement Agreement for the Chem-
Dyne site (August 26, 1982), where the government appor-
tioned damages among over 100 parties (see appendix A);
Agreement between Inmont Corp. and EPA regarding the Santa
Pe Springs, California site, in which the government main-
tains that the situation "may represent an 'indivisible
harm'", but nonetheless provides that the United States will
only hold generators liable for their "proportional share of
the total costs incurred." Id. at 5.
52 Prosser at 608.
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quantities of pollution discharged into
the stream.53
Likewise, recent commentaries discussing the common law
before Superfund have noted that "[environmental damage,
such as pollution of a stream by several manufacturers, has
been held to be theoretically divisible thus precluding
application of joint and several liability.1154
The possibility of joint and several liability was
also rejected in William G. Roe & Co. v. Armour & Co.,55
414 F.2d 862 (5th Cir. 1969), where fluorine gas emitted
from defendant's plant combined with a spring freeze to
damage plaintiff's citrus crop. The Court of Appeals held
that the district court was correct to apportion damages,
noting that in "the absence of concert of action or the
breach of a joint duty," joint and several liability will
53 Restatement (Second) of Torts, § 433A, comment d. See
Midland Empire Packing Co. v. Yale Oil Corp., 169 P.2d 732
(Mont. 1946); Somerset Villa, Inc. v. City of Lee's Summit,
436 S.W.2d 658 (Mo. 1969); Snavely v. City of Goldendale,
117 P.2d 221 (Wash. 1941). See also Neville v. Mitchell,
66 S.W. 579 (Tex. 1902) (apportionment among noise pollution
sources).
54 Note, Superfund; Conscripting Industry Support for
Environmental Cleanup, 9 Ecol. L.Q. 524, 535 (1981).
55 The court in Roe distinguished cases involving auto-
mobile collisions by noting that "defendants who indepen-
dently pollute the same stream are liable only severally for
the damages individually caused." 414 F.2d at 870. in
support of apportionment, the court emphasized that the
intermingling of otherwise independent tortious acts does
not make the torts joint: "such union or intermingling of
consequences did not cause the injury b£ intermingling or
contact." Id. (emphasis in original).
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not be imposed "simply because two or more causes concur to
produce the plaintiff's injuries." Id. at 869.
Notwithstanding the view of commentators and the avail-
able precedents, a letter from the Justice Department intro-
duced into the congressional debates by Representative
Florio asserted that "common law provides for joint and
several liability where the act or omission of two or more
persons results in an indivisible injury."58 Analogizing
to water pollution cases, the letter argued that such an
"indivisible harm is frequently the situation at hazardous
waste sites where many parties have contributed to the
contamination or other endangerment and there are no reli-
able records indicating who disposed of the hazardous wastes
(or in what quantities)."57
In support of its argument, however, the Justice
Department letter cites two Indiana cases, from 1895 and
1904, in which joint and several liability was imposed on
defendants in water pollution cases.58 In both cases, the
courts noted that damages normally would be apportioned in
water pollution cases, but they found that the action was a
public nuisance and that joint and several liability always
58 126 Cong. Rec. H11788 (daily ed. Dec. 3, 1980).
S7 Id.
39 Id.
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1-40
applied in public nuisance cases.59 Not only are these
cases against the weight of precedent, but it is highly
questionable whether they still constitute good law.
Prosser discussed the precedents cited by the Justice
Department as follows:
The distinction made in West Muncie
Strawboard Co v. Slack . . . between a
public and a private nuisance in this
respect [joint and several liability]
has nothing to recommend it and was
rejected in City of Mansfield v.
Brister, 1907, 76 Ohio St. 270, 81 N.E.
631, and Mitchell Realty Co. v. City of
West Allis, 1924, 184 Wis. 352, 199 N.W.
390.60
In sum, the common law precedents, not to mention
hazardous waste cases and the Justice Department's growing
practice of apportioning damages, weigh heavily against
joint and several liability. Accordingly, even if the issue
59 City of Valparaiso v. Moffit, 39 N.E. 909 (Ind. App.
1895); West Muncie Strawboard Co. v. Stack, 72 N.E. 879
(Ind. 1904).
60 Prosser at 608 n.7. The weight of precedent suggests
that pollution damages are divisible and capable of appor-
tionment. These holdings have not been unanimous, however,
and there is a possibility of joint and several liability.
See, e.g., Landers v. East Texas Salt Water Disposal Co.,
248 S.W.2d 731 (Tex. 1952) (plaintiff's lake contaminated by
release of saltwater from disposal company's pipeline and
oil from oil pipeline held to be indivisible); Phillips
Petroleum Co. v. Hardee, 189 F.2d 205 (5th Cir. 1951) (where
several companies had discharged saltwater into a creek used
for irrigating plaintiffs' rice fields and crop damages were
held indivisible). Under the latter case, at least, appor-
tionment was denied because there was no evidence concerning
the relative contributions of defendants to the contamina-
tion. Id. at 212. In general, the water pollution prece-
dents suggest that Superfund damages should be apportioned.
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1-41
were not resolved by Superfund's statutory text and legisla-
tive history and even if there were need to develop a fed-
eral common law rule, that rule would be to apportion dam-
ages.
A related issue is who bears the burden of proof that
damages are apportionable. Although traditionally the
burden of proof on this issue was on plaintiffs, the
Restatement has shifted it to defendants.61 The Restate-
ment goes on to provide that "when the defendant does not
sustain his burden of proof as to the extent of his own
contribution (see § 433B), he is liable for the entire
harm."82 This principle has been applied in several
cases.63
The Restatement approach of shifting the burden of
proof, however, has not been accepted by many courts.64
Moreover, "[m]ost courts have refused to apply it where less
than all the possible tortfeasors are before the court or
where not all have been proved negligent.1165 In addition,
61 Restatement (Second) of Torts, § 433B.
62 Restatement (Second) of Torts, § 840E, comment c.
63 See, e.g., Borel v. Fibreboard Paper Products Corp.,
493 F.2d at 1095 (occupational exposure to asbestos); Michie
v. Great Lakes Steel Division, Nat'l Steel Corp., 495 F.2d
213, 218 (6th Cir.), cert, denied, 419 U.S. 997 (1974) (air
pollution).
64 Prosser at 319-20.
65 See Ginsberg & Weiss, Common Law Liability for Toxic
Torts: A Phantom Remedy, 9 Hofstra L.Rev. 859, 898 n.157
(Spring 1981) and cases cited therein.
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the proof requirements for apportioning damages have been
defined very loosely (see p. 1-34 supra), and the signifi-
cance of which party bears the burden of proof on this issue
is therefore lessened.
4. Joint and several liability may
be more likely between generators
and site owners than among generators.
The strongest policy and practical grounds for appor-
tionment exist among generators sharing a disposal site.
The same grounds may not always apply with equal force as
between a generator and a waste disposal site owner found
liable under Superfund. There are several reasons for this
difference. First, as detailed in chapter 3 and elaborated
above, relative causation is generally available as a basis
for apportionment among generators in a "horizontal" rela-
tionship. By contrast, it is likely to be more difficult to
apportion cleanup costs on a causation basis for the various
parties in a contractual or quasi-contractual "vertical"
relationship. And since strict liability is the statute's
nominal liability rule,88 courts may be reluctant to appor-
tion liability based on relative fault in such situations-
Moreover, the common law provides a somewhat weaker
argument for joint and several liability in such a "verti-
cal" situation — although even here the courts have not
rejected apportionment. Thus, a plaintiff might argue under
See chapter 3 at II1-29.
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common law that a generator should be liable for the torts
of his disposal site owner, based on the Restatement, which
imposes a duty to inquire about the contractor's practices
and reputation as well as a higher duty for more dangerous
activities.87 Plaintiffs also may maintain that generators
should be held responsible tinder the principle that one can-
not contract away responsibility for an inherently dangerous
activity. To be inherently dangerous under this rule, an
activity must present a "peculiar risk of injury . . .
unless special precautions are taken."68
So far this argument has been unavailing to plaintiffs.
The one case to address the issue in the hazardous waste
context, Ewell v. Petro Processors of Louisiana, Inc.,
364 So.2d 604, 606 (Ct. App. La. 1978), held defendant
generators not liable for waste disposal sites run by inde-
pendent contractors, because such activity is not "inher-
ently or intrinsically dangerous." Rather, the Ewell court
emphasized that the contractor "received no instructions as
to the method of carrying out the assigned task or the
disposal of the waste material," and therefore was not
within the control of the generator. Id.69
87 Restatement (Second) of Torts § 411, comment a.
68 Prosser at 472. See, e.g., Loe v. Lenhardt, 362 P.2d
312 (Ore. 1961) (spraying pesticides). See also Restatement
(Second) of Torts § 427.
69 The Ewell court did, however, find one generator liable
for the nuisance created by the disposal site owner, because
(Footnote 69 continued on next page.)
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Still, Ewe 11 is likely to be only the first in a long
line of cases to argue for joint and several liability based
on ultrahazardous activity and the reckless or negligent
conduct of a site owner and operator. And although Ewell
points in the opposite direction, plaintiffs will probably
rely upon the nominal strict liability standard of Superfund
to argue that Congress has essentially defined hazardous
waste disposal an ultrahazardous activity. The legislative
history, however, is contrary to this view.70 But even if
the argument were to prevail, it would provide joint and
several liability only for those in a "vertical" rather than
a "horizontal" relationship, as is typically the case among
the numerous generators at a multigenerator waste site.
(Footnote 69 continued from previous page.)
that generator had visited the site and therefore was "aware
of the leakage at the pits and continued to dump hazardous
material at that site," Id. at 608 For the one generator
deemed to be liable at all, his liability with the site
owner was held to be joint and several. Id.
70 S. 1480 declared generation and disposal of hazardous
waste to be ultrahazardous (see § 3(a)(1)), but this provi-
sion was deleted in the final compromise legislation*
Although this deletion was not discussed in the Senate
debates, it creates the strong inference that Congress con-
sidered the issue and intentionally chose not to declare
such waste disposal ultrahazardous.
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1-45
C. Congress' Reference to Section 311 Does Not
Provide for Joint and Several Liability.
Plaintiffs may also argue that Superfund's reference to
section 311 of the Water Act supports joint and several
liability.71 Congress apparently intended the section 311
reference to apply only to the strict liability/negligence
controversy,72 but even assuming that section 311 has a
bearing on joint and several liability, it provides no
grounds for imposing such liability on off-site generators.
Before analyzing the cases, two critical differences
between section 311 and section 107 must be stressed.
First, potentially liable parties under section 311 include
only a vessel's owner and operator — not any other person,
such as shippers of materials or generators of the sub-
stances spilled. See section 311(f)(1). Second, unlike
section 107, section 311 is not supported by a large,
71 Of course, section 101(32) of Superfund incorporates
section 311 as the Act's standard of liability. Representa-
tive Florio suggested that this reference might provide for
joint and several liability "under appropriate circum-
stances." 126 Cong. Rec. H11767 (daily ed. Dec. 3, 1980).
Representative Florio's remarks may be discounted, however,
since the controlling legislative history regarding joint
and several liability is found in the Senate debates. See
n.25, supra.
72 See, e.g., 126 Cong. Rec. S15008 (daily ed. Nov. 24,
1980) (remarks of Senator Stafford); S14964 (remarks of
Senator Helms); S14964 (remarks of Senator Randolph); H11787
(remarks of Representative Florio).
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1-46
industry-financed Response Fund to pay the costs of site
cleanup.73
The first clear section 311 decision bearing on this
point, United States v. M/V Big Sam, 505 F. Supp. 1029
(E.D. La. 1981), aff'd in part, rev'd in part, 17 E.R.C.
(BNA) 2169 (5th Cir. 1982), recently held that liability was
joint and several for an owner and an operator, largely due
to the court's fear that one of these parties might be
insolvent and that cleanup costs might go unpaid. 17 E.R.C.
at 2174. But neither section 311 nor the court's reasoning
in Big Sam provide any guidance regarding whether or not
generators — as opposed to owners and operators — may be
jointly and severally liable under Superfund.
The only parties potentially liable under section
311 — and the parties held jointly and severally liable in
Big Sam — are a vessel's owner and operator. The Big Sam
court stressed that "owner or operator" was a "term of art,"
describing a specific, very close and usually long-standing
"vertical" relationship, characterized by such factors as
sharing of insurance against liability from a release.
Id. at 2174. These facts, as well as the distinct possibil-
ity that cleanup might not be achieved without holding both
the owner and operator liable, led to Big Sam's joint and
several liability ruling.
73 Section 311's "equivalent" of the Response Fund is very
small and financed through such limited sources as civil
penalties. See Section 311(k)(l).
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1-47
Applying joint and several liability in these circum-
stances is nothing more than a logical outgrowth of the
"concert of action" or "joint duty" rationales, previously
discussed. See pp. 1-2 to 1-6, supra. It says nothing
about whether generators having no relationship to one
another should be held jointly and severally liable. To the
contrary, the absence of the many factors noted in Big Sam
as supporting joint and several liability would seem to
weigh heavily against such liability for off-site genera-
tors .
Even if Big Sam has application for owners and opera-
tors under sections 107(a)(1) and (2), there is no basis for
extending this rationale to section 107(a)(3), which poten-
tially imposes liability on generators much further removed
from the scene and from the causes of a release. Because
section 311 exempts generators from liability altogether, it
is implausible to argue that section 311 provides the basis
for expanding generator liability under Superfund.
There is still less reason for applying joint and
several liability among different generators at a multi-
generator site. In such situations, there generally is not
even the most remote hint of concert of action, no privity
whatsoever, and certainly no "term of art" such as relied on
in Big Sam to warrant such an expansion of liability.
The Big Sam case itself illustrates this distinction.
There, the vessel owner was causally linked to one hundred
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1-48
percent of the spill requiring cleanup, because his ship had
been held "solely" responsible for the entire discharge.
17 E.R.C. at 2171. The owner had sought to avoid liability
on negligence grounds, notwithstanding the nominal strict
liability standard of section 311. While not ruling out
entirely the relevance of fault considerations, the court
held that where the negligent operator was insolvent, the
owner must pay the bill. Id. In short, the court did no
more than impose liability on a party who was causally
responsible for the entire discharge.
By contrast, at a multigenerator site cleaned up under
Superfund, any one generator typically will be responsible
for only a small percentage of a release or threatened
release.74 Plainly there is a vast difference between
imposing joint and several liability among parties such as
the site owner and operator having a joint duty to their
customers and the public and imposing such liability on
generators who are distinct in time and place from the site
and one another. The existence of the multi-billion dollar
Response Fund provides yet another key reason why joint and
several liability among generators is inappropriate and
unnecessary under Superfund.
74 In United States v. South Carolina Recyclying and
Disposal, No. 80-1274-6 (D.S.C.), for example, the govern-
ment's own figures indicate that no defendant is responsible
for more than 12% of the wastes sent to the site.
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1-49
III. EVEN IF JOINT AND SEVERAL LIABILITY WERE THE
RULE, CONTRIBUTION IS PROVIDED BY STATUTE.
To this point, this chapter has presented the arguments
against joint and several liability. But if a court were to
conclude that joint and several liability applies under
Superfund, it would still be necessary to decide whether
liable defendants are entitled to sue for contribution
against other potentially liable persons.
As discussed below, a federal right to contribution
exists under Superfund. The statute itself expressly pro-
vides such a right; but even if it did not, the legislative
history supports an implied right of contribution. And even
if a federal right of contribution did not exist, defendants
would probably be entitled to contribution under most state
laws.
A. There Is a Federal Right to
Contribution Under Superfund.
On its face, section 107(a) of Superfund appears to
provide a direct, statutory right of contribution. Thus,
section 107(a)(4)(B) makes certain statutorily-defined
defendants (including generators, transporters and site
operators) liable for response costs "incurred by any other
person consistent with the national contingency plan."
Section 101(21) defines person broadly to include, inter
alia, "an individual, firm, corporation, association, part-
nership, consortium, joint venture, [or] commercial entity
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1-50
. . ." and section 101(25) defines response costs to include
any removal or remedial actions, which may be taken under
section 104.
This reading of the Act was challenged in City of
Philadelphia v. Stepan Chemical, 544 F. Supp. 1135 (E.D. Pa.
1982). There, defendants argued that the term "'other
person' refers unmistakably to persons other than liable
persons" under section 107.75 The court, however, rejected
this interpretation:
In the context in which it appears,
then, the term "any other person" is
quite conceivably designed to refer to
persons other than federal or state
governments and not, as defendants
argue, to persons other than those made
responsible under the act.76
Thus, the only decision to address this issue held that
potentially liable parties may employ section 107 of the Act
to recover from other liable parties.77
This interpretation is further supported by other
provisions of section 107, including sections 107(i) and (j)
See Memorandum in Support of Defendants' Motion for
Judgment on the Pleadings, reprinted in 3 Chem. & Rad. Waste
Lit. Rep. 517, 521 (1982).
78 544 F. Supp. at 1142.
77 There is some basis for distinguishing this decision
from the contribution context. Later in the opinion, the
court noted that "the dispositive consideration is that the
City did not operate a hazardous waste disposal facility on
the premises and it asserts that it did not voluntarily
permit the placement of the hazardous substances on its
property." ^d. at 1143. There seems to be little basis,
however, for relying on this distinction in the definition
of "other party" in the Act.
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1-51
(which retain pre-existing common law rights) and section
107(e)(2) (which expressly preserves to liable parties any
actions based on "subrogation or otherwise against any
person.") Likewise, sections 111(a)(2) and 112(a) provide
explicitly for suits under section 107 "for payment of any
claim for necessary response costs incurred by any other
person as a result of carrying out the national contingency
plan . . .."
These provisions, taken together, provide persuasive
evidence that Congress intended a federal right of con-
tribution if there are any cases where joint and several
liability applies.78 This conclusion is further bolstered
by section 112(c)(2), which provides that "any person" who
pays for "damages or costs resulting from a release of a
hazardous substance shall be subrogated to all right3,
claims, and causes of action for such damages and costs of
removal that the claimant has under this Act or any other
law." Although less than crystal clear, when read together
8 Some will argue, of course, that Superfund does not
create a federal right of contribution, but simply requires
parties to exhaust any pre-existing state rights of contri-
bution before making a claim on the Fund. This reading
seems strained, however, and the language in section 112
providing that "the claimant may elect to commence an
action" is inconsistent with such an interpretation. The
"authorization" for such an action would be redundant if a
party had to rely on pre-existing rights. Moreover, if the
purpose of § 112 were to require exhaustion of private
remedies, the section would specifically have so required.
Read in conjunction with § 107(a), therefore, a federal
right of contribution seems intended.
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1-52
with the subrogation provision of section 107(e)(2), section
112(c)(2) suggests that a person held liable for response
costs may employ the provisions of the Act, including sec-
tion 107, to recover his costs from other responsible
parties.
But even if the statute did not provide for contribu-
tion, such a right would still exist under federal or state
common law. In some circumstances, such as under the
federal securities laws, courts have implied a federal
common law cause of action for contribution.79
Although the Supreme Court's two most recent decisions
on the issue declined to create a federal common law right
of contribution,80 the Court commented favorably on the
79 See, e.g., In re National Student Marketing Litigation,
517 F. Supp. 1345 (D.D.C. 1981); Globus Inc. v. Law Research
Service, Inc., 318 F.Supp. 955 (S.D.N.Y. 1970), aff'd,
442 F.2d 1346 (2d Cir.), cert, denied, 404 U.S. 941 (1971)-
A federal common law right of contribution also exists under
the Interstate Commerce Act. Gordon H. Mooney, Ltd. v.
Farrell Lines, Inc., 616 F.2d 619, 625-26 (2d Cir.), cert-
denied, 449 U.S. 875 (1980).
80 In Texas Industries, Inc. v. Radcliff Materials, supra
p. 1-31, the Court held that a jointly and severally liabl®
defendant has no right to contribution from co-conspirators
under the Sherman Antitrust Act. Likewise in Northwest
Airlines v. Transport Workers Union of America, 451 U.S. 77
(1981), the Court ruled against such a right of contribution
under either the Equal Pay Act or the Civil Rights Act of
1964.
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1-53
equity of establishing such a right.81 The Court's deci-
sions were based entirely on its review of the legislative
history of the statutes in queston.
In Texas Industries, the Court held that "Congress
neither expressly nor implicitly intended to create a right
to contribution." 451 U.S. at 640. Similarly, in Northwest
Airlines. the Court noted:
The ultimate question in cases such as
this is whether Congress intended to
create the private remedy — for example,
a right to contribution .... Factors
relevant to this inquiry are the langu-
age of the statute itself, its legisla-
tive history, the underlying purpose and
structure of the statutory scheme ....
451 U.S. at 91.
By contrast, creation of a federal contribution right
is strongly supported by Superfund's legislative history.
For example, a letter introduced in the House debates from
the Justice Department suggests that Superfund defendants
have "the right to seek contribution from any other person
responsible for a release or a threat of release."82
Representative Florio also suggested that "the bill will
81 See Northwest Airlines, 451 U.S. at 88: "Recognition
of the right reflects the view that when two or more persons
share responsibility for a wrong, it is inequitable to
require one to pay the entire cost of reparation, and it is
sound policy to deter all wrongdoers by reducing the likeli-
hood that any will entirely escape liability."
126 Cong. Rec. H11788 (daily ed. Dec. 3, 1980).
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1-54
encourage the further development of a Federal common
law.1,83
Finally, as discussed above, a right of contribution
would be consistent with the underlying purpose of the Act,
which seeks to impose liability on parties only in propor-
tion to the damages that they have caused. This distin-
guishes Super fund from the Sherman Act, interpreted in
Texas Industries, which has primarily punitive purposes.
451 U.S. at 639.
B. Superfund's Statutory Contribution Right
Would Divide Damages Based on Relative
Causation and Fault Among the Parties.
The details of Superfund's right of contribution must
eventually be supplied by the courts. For the reasons dis-
cussed in I-C supra, Superfund and its legislative history
provide some guidance regarding the appropriate division of
damages in contribution actions. The courts must then fill
in the interstices of the statute by reference to section
83 Id. at H11787. If these statements are credited by
courts in imposing joint and several liability, they also
should be used to imply a right of contribution. In addi-
tion, the Clean Water Act's section 311(h) contains a
preservation of remedies provision which has been held to
provide for contribution. Valley Towing Service v. SS
American Wheat, Civ. No. 75-363, (E.D. La., Jan. 23, 1980)
at 3.
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1-55
311 cases,84 admiralty law,85 state common law,86 or
federal common law developed by reference to some or all of
these sources.87 See II-A supra. Under these precedents,
relative causation and fault would be the principal stan-
dards for assigning liability in contribution actions.88
84 Under the section 311 cases, comparative fault would be
the basis for dividing liability in a contribution action.
See Valley Towing, id. at 3.
85 In admiralty cases, liability is based on the relative
fault of the parties. United States v. Reliable Transfer
Co., p. 1-32 supra.
88 Forty-three states now recognize a right to contribu-
tion. See Robinson, Multiple Causation in Tort Law;
Reflections on the PES Cases, 68 Va. L.Rev. 713, 716 n.12
{April 1982). The nature of a contribution right, however,
varies widely from state to state. The majority of states
appear to base contribution on the comparative fault of the
parties. See, e.g., American Motorcycle Ass'n v. Superior
Court, 578 P.2d 899, 907-12 (Cal. 1978); Packard v. Whitten,
274 A.2d 169, 179-81 (Me. 1971); Dole v. Dow Chemical Co.,
282 N.E.2d 288 (N.Y. 1972); Bielski v. Schulze, 114 N.W.2d
105 (Wis. 1962); Mitchell v. Branch, 363 P.2d 969 (Ha.
1961). In addition, fourteen states have statutorily pro-
vided that contribution should be based on relative fault.
12 U.L.A. 53, 61 (1982 pocket part).
87 Federal common law of apportionment of liability has
developed in cases involving torts in the Virgin Islands.
There, the Third Circuit has ruled that liability should he
imposed upon joint tortfeasors "in proportion to their
comparative negligence." Gomes v. Brodhurst, 394 F.2d 465
(3d Cir. 1967). Even in strict liability cases, the courts
have applied a "system of pure comparative fault" for appor-
tionment of responsibility. See e.g., Murray v. Fairbanks
Morse, 610 F.2d 149, 162 (3d Cir7 1979).
88 In strict liability cases, where no party may be at all
blameworthy, courts have often relied on a principle of
"comparative causation." Sun Valley Airlines v. Avco-
Lycoming Corp., 411 F.Supp. 598, 603 (D. Id. 1976). Even
(Footnote 88 continued on next page.)
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1-56
In a horizontal relationship, such as between two genera-
tors, both relative causation and fault should apply. In
vertical relationships, such as between a generator and an
owner operator, causal responsibility may be difficult to
divide and relative fault is likely to be the determinative
apportionment factor in many cases.
(Footnote 88 continued from previous page.)
courts ruling on "comparative fault" principles have often
focused largely on comparative causation. One court
observed:
In many of the cases adopting a "com-
parative fault" approach to strict
liability, there has been a frank reali-
zation what is being compared is not
fault, but cause.
Stueve v. American Honda Motors Co., 457 F.Supp. 740, 760
D. Kan. 1978). Furthermore, six states have adopted the
provision of the Uniform Contribution Among Joint Tortfeasors
Act that provides that relative damages shall not be based
on fault. 12 U.L.A. 52, 61 (1982 pocket part). Although
the Act is not explicit, presumably damages would be appor-
tioned based on relative causation.
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TAB 2
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II-l
CHAPTER 2:
THE STANDARD OF LIABILITY
INTRODUCTION AND SUMMARY OF CONCLUSIONS
Some commentators have argued that the standard of
liability under Superfund is one of strict liability.1
While strict liability may in fact be imposed in some cases,
a more careful examination of the statute and its legisla-
tive history indicates that the answer is not always so
clear.
Superfund's predecessor bills contained an explicit
strict liability standard, which was deleted in the Senate
compromise in favor of the standard of liability under
section 311 of the Water Act. The legislative history
indicates that Congress considered this change to be a
relaxation of Superfund's liability standards.
The section 311 cases nominally employ a strict liabil-
ity test, but actually consider the relative fault of par-
ties before imposing liability. This hybrid approach should
be of considerable assistance to non-negligent generators in
cases where a solvent transporter or site owner acted negli-
gently. Indeed, the section 311 cases suggest strongly that
1 See, e.g., Hinds, Liability Under Federal Law for Haz-
ardous Waste Injuries, 6 Harv.Env.L.Rev. 1, 26 (1982); Note,
Superfund: Conscripting Industry Support for Environmental
Cleanup, 9 Ecol.L.Q. 524, 541 n.119 (1981).
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11-2
there may be circumstances where non-negligent defendants
might escape liability altogether under Superfund.
Part I of this chapter discusses the nature and devel-
opment of strict liability at common law. As will be shown,
application of strict liability to non-negligent generators
would be a substantial departure from common law standards
of liability.
Part II discusses the legislative history of Superfund.
In order to obtain passage, Congress cut back on the liabil-
ity standards of the earlier bills and adopted the standard
of liability under section 311.
Part III examines the liability standards of section
311. As discussed there, the nominal standard of liability
is strict liability, but it has been tempered in numerous
situations by considerations of culpability. The result is
a hybrid standard that imposes liability on negligent par-
ties and exonerates non-negligent parties, at least in some
circumstances.
I. STRICT LIABILITY AT COMMON LAW
Traditionally, a defendant was not liable in tort for
harming another unless the harm resulted from the defen-
dant's intentional, reckless or negligent action causing
harm to the defendant.2 Thus, a party was not liable
Restatement (Second) of Torts § 6.
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II-3
unless he failed to conform to a certain, legally defined
standard of conduct designed to protect others against
unreasonable risks.3 Strict liability, by contrast,
imposes liability without regard to culpability, i.e.,
without regard to whether defendant's action was inten-
tional, reckless, or negligent.4
Plaintiffs have maintained that Superfund imposes
strict liability on defendants, including generators.5 But
as discussed below, common law strict liability has been
narrowly limited, and accordingly, routine application of
strict liability to generators in Superfund cases would be a
radical change from common law principles.
The classic departure from a standard of negligence to
strict liability occurred in a nineteenth century English
case, Rylands v. Fletcher. 3 H.L. 330 (1868). There, the
defendant mill owners constructed a reservoir upon their
3 Restatement (Second) of Torts § 282. For a discussion
of factors relevant to defining standards of conduct, see
Amaya v. Home Ice, Fuel & Supply Co., 379 P.2d 513 (Cal.
1963). See also Prosser at 143, 325-27.
4 The Restatement contrasts strict liability by observing
that the "fact that negligence as here defined is conduct
which falls below the standard of behavior established by
law for the protection of others carries with it the idea of
social fault." Restatement (Second) of Torts § 282, com-
ment f. Prosser, however, notes that, where strict liabil-
ity has been applied, the defendant's "conduct is still so
far socially questionable that it does not justify immun-
ity," e.g., blasting operations. Prosser at 495.
5 See, e.g., Complaint, Ohio v. Georgeoff, No. C-81-1961,
f 35 (N.D. Ohio) (filed October 1, 1981).
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11-4
property, which subsequently flooded an adjoining coal mine.
The House of Lords decision held defendants strictly liable
as a result of their "non-natural" use of the land. 3 H.L.
at 338. The decision in Rylands focused on the liability of
the landowner, noting that "the true rule of law is that the
person who for his own purposes brings on his lands and col-
lects and keeps there anything likely to do mischief if it
escapes, must keep it at his peril." Id.
The rule in Rylands v. Fletcher has evolved in America
into the doctrine of strict liability for "ultrahazardous
activity." An activity has been deemed ultrahazardous if it
necessarily involves a high risk of serious harm and is
inappropriate to the place where it is carried on.6 There
has been "general recognition . . . that the relation of the
activity to its surroundings is the controlling factor,"
and, consequently, strict liability generally has been
imposed on the owner of the land on which the ultrahazardous
activity is taking place.7 In addition, the comm<3n law has
6 See, e.g., Yommer v. McKenzie, 257 A.2d 138 (Md. 1969).
For a discussion of the factors relevant to a determination
that an activity is ultrahazardous, see Restatement (Second)
of Torts § 520.
7 Prosser at 513. Contrast Alonso v. Hills, 214 P.2d 50
(Cal. 1950) (blasting in developed area is ultrahazardous)
with Houghton v. Loma Prieta Lumber Co., 93 P. 82 (Cal-
1907) (blasting in deserted area is not ultrahazardous).
See also State Dept. of Environmental Quality v. Chemical
Waste Storage & Disposition, Inc., 528 P.2d 1076 (Ct. App. 0*e'
1974) (hazardous waste disposal in remote site is not ultra-
hazardous ).
-------
imposed strict liability only when a defendant is aware of
the ultrahazardous condition and has permitted it to con-
tinue .8
Neither of these conditions apply in the case of gen-
erators sending materials to a hazardous waste site. Thus,
except for a generator who deposits wastes on his own prop-
erty, generators do not create a hazard as in Rylands v.
Fletcher or engage in waste disposal activity normally con-
sidered "ultrahazardous." Moreover, generators may be
unaware of where their materials are deposited, much less
whether the site is "ultrahazardous." Accordingly, even
where the site owner may knowingly permit an ultrahazardous
condition to continue, generators should not be held strictly
liable under common law precedent.
The case that most directly addresses this question,
Ewell v. Petro Processors of Louisiana, Inc., 364 So.2d 604
(Ct. App. La. 1978), is fully consistent with the common law
rules summarized above. In Ewell, the court held that
generators were not strictly liable for waste disposal sites
run by independent contractors, because the activity is not
"inherently or intrinsically dangerous." Id. at 606. The
court stressed that the generators were unaware of the
See Zampos v. U.S. Smelting, Ref. & Min. Co., 206 F.2d
171 (10th Cir. 1953); Hunt v. Hazen, 254 P.2d 210 (Ore.
1953), see also Prosser at 517 n.98.
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11-6
condition of the site and that the site owner "received no
instructions as to the method of carrying out the assigned
task or the disposal of the waste material." I_d. Although
generators were not held strictly liable, the court did hold
one generator liable based on his negligence, because he was
"aware of the leakage" yet continued to use the site. Id.
In addition to the limitations discussed above, strict
liability does no more than relieve plaintiffs of the burden
of proving negligence. To maintain a cause of action, a
plaintiff must still prove that a legally-protected interest
of plaintiff's has been invaded, that the defendant's con-
duct is a legal cause of the invasion, and that the plain-
tiff has not so conducted himself in a manner that precludes
his claim (e.g., assumption of risk).9 Thus, the existence
of strict liability rather than negligence does not relieve
plaintiffs of the need to prove all other elements of a tort
claim.10
Indeed, when a defendant may be found strictly liable,
courts generally have held plaintiffs to a stricter standard
on other elements of proof. Thus, Prosser noted:
9 See Restatement (Second) of Torts § 281.
10 See, e.g., United States v. Tex-Tow, Inc., 589 F.2d
1310, 1313 (7th Cir. 1978) ("causation is required even
under a strict liability statute").
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II-7
Just as liability for negligence has
tended to be restricted within narrower
boundaries than when intentional miscon-
duct is involved, there is a visible
tendency to restrict it still further
when there is not even negligence.11
For example, when strict liability might be applied, courts
have made it easier to escape liability on the basis of
intervening causes.12
In short, application of strict liability, although
available, was severely limited under common law. First,
strict liability generally applied only to landowners and
even then only if they were fully aware of the risk pre-
sented by the hazardous condition on their land. The doc-
trine of ultrahazardous activity is an extension of these
principles, but as the Ewell decision suggests, it should
not normally apply to generators. Moreover, even where
proof of negligence has been dispensed with under common
law, the courts have generally required a higher standard of
proof of other elements of a cause of action.
By contrast, some have argued that Superfund would
impose strict liability on non-landowners, unaware of the
11 Prosser at 517.
12 See, e.g., Golden v. Amory, 109 N.E.2d 131 (Mass. 1952)
(no liability where extraordinarily heavy rainfall con-
tributed to release of water); Kaufman v. Boston Dye House,
182 N.E. 297 (Mass. 1932) (intervening act of stranger
released oil from truck); Davis v. Atlas Assur. Co.,
147 N.E. 913 (Ohio 1925) (employee released gas vapors
resulting in fire).
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11 —8
risk addressed, without regard to the magnitude of the
hazard presented by specific substances, and would make the
standard of proof for a cause of action more lenient than at
common law.13 This contention goes far beyond the common
law and in any event is contrary to Superfund and its legis-
lative history, as well as the case law under section 311 of
the Water Act.
II. THE STATUTE AND ITS LEGISLATIVE HISTORY
INDICATE THAT CONGRESS "PARED DOWN"
THE STRICT LIABILITY STANDARDS OF
EARLIER BILLS.
The original Superfund bills provided expressly for
strict liability. S. 1480, § 4(a); H.R. 7020, § 3071(a).
As discussed in greater detail in chapter 1, these earlier
bills were unacceptable to Congress, largely because their
liability standards were regarded as too severe.14 Conse-
quently, a compromise bill was drafted in the Senate and
adopted by the House.
The Senate compromise bill deleted the explicit require-
ment of strict liability and replaced it by "specifying the
13 The complaint in Georqeoff, supra n.5, explicitly or
implicitly makes all these claims.
14 See, e.g., 126 Cong. Rec. S14967 (daily ed. Nov. 24,
1980) (remarks of Senator Stafford) (noting that many of his
colleagues "perceive[d] [S. 1480] as punitive and unneces-
sarily rigorous"); Id. at Rec. S15004 (remarks of Senator
Helms) (stating that S. 1489 had received "well-deserved
criticism" because its liability standards were "grossly
unfair").
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11—9
standard of liability under Section 311 of the Clean Water
Act."15 Senator Stafford explained:
As reported by the Committee, S. 1480
and its accompanying report set the
standard of liability as one of joint,
several and strict liability- However,
to avoid confusion over new language the
compromise bill simply defers to exist-
ing law in Section 311 of the Clean
Water Act which already provides a
liability standard for recover of costs
for response and remedial actions . . .1S
At least some members of the Senate seemed to believe
the section 311 standard to be one of strict liability.
Thus, Senator Randolph referred to the standard of liability
under "[s]ection 311 of the Federal Water Pollution Control
Act," which "I understand . . . to be a standard of strict
liability.1,17
Senator Stafford, one of the key architects of the
compromise bill, also emphasized, however, that the strict
15 liL- at S14964. Section 302(d) of the Act also indi-
cates that strict liability should not be automatically
applied. That section provides that
this Act shall not be considered, inter-
preted, or construed in any way as
reflecting a determination, in part or
whole, of policy regarding the inappli-
cability of strict liability, or strict
liability doctrines, to activities
relating to hazardous substances, pol-
lutants , or contaminants or other such
activities.
16 126 Cong. Rec. S15008 (daily ed. Nov. 24, 1980).
17 at S14964. The House debate reflects a similar
conclusion. 126 Cong. Rec. H11787 (daily ed. Dec. 3, 1980)
(comments of Representative Florio).
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11-10
liability system should be tempered by considerations of
fault, at least in some circumstances. He explained that
S. 1480 "had strict liability provisions, but they were
severely pared down."18 According to Stafford, the com-
promise bill was "not an embodiment of other forms of no
fault liability or innovative Federal intrusion into the law
now developing within individual state jurisdiction[s].1,19
Furthermore, Congress carefully declined to find that
hazardous waste disposal was an ultrahazardous activity.
S. 1480 contained an explicit declaration that this activity
was "ultrahazardous" (§ 3(a)(1)), but this language was
deleted in the final compromise. Although this deletion was
not discussed in the debates on the final bill, it creates a
strong inference that Congress considered the issue and
intentionally chose not to declare hazardous waste disposal
to be ultrahazardous.
III. THE STANDARD OF LIABILITY UNDER SECTION 311, AND
THEREFORE SUPERFUND, IS A HYBRID ONE, WITH STRICT
LIABILITY TEMPERED BY CONSIDERATIONS OF FAULT.
Congress' intended relaxation of the strict liability
standard was accomplished through the adoption of the sec-
tion 311 standard of liability. As Congress suggested, the
nominal standard of liability under section 311 is strict
18 126 Cong. Rec. S15008 (daily ed. Nov. 24, 1980).
19 Id. at S14967.
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11-11
liability. See Steuart Transportation Co. v. Allied Towing
Corp.. 596 F.2d 609, 613 (4th Cir. 1979) (section 311 of
"[t]he final bill embodied the Senate's strict liability
proposal"); United States v. Hollywood Marine, 16 E.R.C.
2180, 2182 (S.D. Tex. 1981); Sabine Towing and Transporta-
tion Co. v. United States, 16 E.R.C. 2081, 2082 (Ct. CI.
1981). Thus, in a simple factual situation with one dis-
charger and no intervening third parties, liability will be
strict.
When several parties may share responsibility for a
discharge, however, section 311 cases have generally imposed
liability based on the relative negligence of the parties.
The importance of negligence considerations under section
311 is illustrated by Valley Towing Service, Inc. v. SS
American Wheat, Civ. No. 75-363, slip op. (E.D. La.,
Jan. /.3, 1980). There, the court observed that Section 311
"clearly provides that the owner or operator may be liable
for clean-up costs," id. at 7 (emphasis in original), but
found that the operator of several oil barges was largely at
fault for a collision and subsequent discharge of oil.
After concluding that the owner, as distinguished from the
operator, was blameless, the court ruled that cleanup costs
were owed only by the operator of the barges. Id.
The courts' concern with culpability is further illus-
trated by United States v. M/V Big Sam, 505 F.Supp. 1029
(E.D. La. 1981), aff'd in part, rev'd in part, 17 E.R.C.
(BNA) 2169 (5th Cir. 1982). In Big Sam, an oil-carrying
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11-12
barge spilled part of its cargo as a result of a collision
with another, negligent vessel. The government did not
attempt to recover from the non-negligent barge but pro-
ceeded against the negligent vessel.
In the action against the negligent vessel, the govern-
ment sought to recover from both its owner and its operator.
The court imposed liability on the negligent operator but
held that the owner of the vessel was not at fault and
therefore not liable. 505 F.Supp. at 1033. Accordingly,
even though the owner was a proper party defendant under
section 311, he was not judged on a strict liability basis
and indeed was immunized from damages because he was not
negligent.
The government did not appeal this part of the lower
court's decision, but the Fifth Circuit addressed it none-
theless, and held that the owner was properly liable.
17 E.R.C. at 2174. The court came to this conclusion based
primarily on its fear that the operator would be insolvent
and there would be no liable party to pay for cleanup. Id.
This holding is consistent with the conclusions at p. 11-14
infra, that strict liability will be imposed when it is
essential to finance cleanup costs.20
20 The decision in Big Sam also was based in large part on
the close vertical relationship between an owner and opera-
tor, described by the court as a "term of art." 17 E.R.C. at
2174. Generators under Superfund stand in a different
position, and, as discussed at pp. 11-15 to 11-16 infra,
there are strong policy reasons why strict liability should
not apply to generators.
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11-13
Section 311 liability has been based on the fault of
the parties in at least three other contexts. First, when a
negligent third party has contributed to a spill, courts
have imposed liability on a defendant only after a finding
that the defendant was also negligent and that his negli-
gence was a more significant cause of the spill. See Tug
Ocean Prince, Inc. v. United States, 436 F. Supp. 907 (S.D.N.Y.
1977), aff'd in part, rev'd in part on other grounds, 584 F.2d
1151, 1161 (2d Cir. 1978) (government's ineffective naviga-
tion aids are no defense where tug boat employees were
negligent); Steuart Transportation Co. v. Allied Towing Corp.,
596 F.2d at 613 (alleged negligence of tug is no defense
when barge was not seaworthy).
In another case, a non-negligent barge spilled oil due
to the negligence of its tug. The government sued both the
barge and tug owners, but the court imposed liability only
on the negligent tug, even though both would be liable under
a pure strict liability standard. Tug Ocean Prince, Inc. v.
United States, 436 F. Supp. at 926. Two courts have reached
a contrary result in these factual circumstances, but both
appear to have imputed the negligence of the tug to the
barge owner, on a theory similar to respondeat superior.
United States v. LeBeouf Bros. Towing Co., 621 F.2d 787
(5th Cir. 1980); Burgess v. M/V Tamano, 564 F.2d 964 (1st Cir.
1977). As among multiple generators using a common waste
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11-14
disposal site, there would be no basis for imputing negligence
in this manner.
Third, section 311(h) of the Water Act has been held to
preserve a right of contribution against another party
"whose fault contributed to a discharge." United States
v. Bear Marine Services, 15 E.R.C. 1953 (E.D.La. 1980) (cit-
ing Valley Towing Service, Inc. v. SS American Wheat).21
Although distinct from the issue of strict liability, pre-
servation of this right is yet another example of how
culpability considerations are applied by the courts deter-
mining liability under section 311.
Taken as a whole, the section 311 cases reflect a
primary concern for financing the cleanup of discharges, and
where strict liability is necessary to that end, it has been
imposed. When imposing liability against multiple parties
with varying degrees of responsibility, however, courts
frequently have relied on negligence considerations.
These cases at first glance suggest that courts are
simply apportioning damages. The significance of these
21 The culpability of the discharger also has been held to
be the primary factor in the magnitude of civil penalties
assessed under § 311(h). United States v. General Motors,
403 F. Supp. 1151, 1164 (D. Conn. 1975) (in which the court
held that "where the defendant was not negligent or at
fault" it would be an "abuse of discretion to impose more
than a nominal penalty"); Tug Ocean Prince, Inc. v. United
States, 436 F. Supp. at 926 (remanding with instructions "to
permit the absence of culpability to mitigate the amount oi
the fine").
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11-15
decisions, however, goes beyond apportionment to the under-
lying standard of liability. The "all-or-nothing" approach
taken in these decisions is contrary to the apportionment
cases, which typically divide damages among the liable
parties.22 Moreover, apportionment based on fault has
typically been rejected in strict liability cases, in favor
of apportionment based on a theory of causation. These
cases have sought to determine what percentage of the dam-
ages were "caused" by each party and apportion liability
accordingly.23 Finally, the courts in the section 311
cases have not spoken of apportionment of liability, but
rather have used fault concepts to exonerate defendants from
liability in the first instance.
Superfund decisions to date do not resolve these issues.
In United States v. Hardage, Civ. No. 80-1031-W (W.D.Okla.
Setp. 29, 1982), the court cursorily held that the statute,
on its face, imposes strict liability. Slip op. at 2. That
decision did not, however, adjudicate the responsibility of
specific parties on specific facts.
22 See Restatement (Second) of Torts, § 433a, illustra-
tions. See, e.g., Valley Towing Service, Inc. v. SS Ameri-
can Wheat, slip op. at 3; Jackson v. Frederick's Motor Inn,
418 A.2d 168 (Me. 1980).
23 See, e.g., Sun Valley Airlines v. Avco-Lycoming Corp.,
411 F.Supp. 598 (D.Id. 1976); Stueve v. American Honda
Motors Co., 457 F.Supp. 740 (D.Kan. 1978).
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11-16
City of Philadelphia v. Stepan Chemical Company, 544 F.
Supp. 1135 (E.D.Pa. 1982), considered the issue more
thoroughly and its holding supports the above reading of
strict liability tempered by fault considerations. There,
the court noted that the nominal standard of liability under
section 311, and therefore under Superfund, is strict liabil-
ity. Id. at 1140 n.4. Judge Ditter went on, however, to
quote approvingly from a law review article concluding that
the application of strict liability should be limited:
It is clear, however, that Super-
fund's strict liability standards should
be confined to those parties who engaged
in substantial and purposeful hazardous
waste disposal activity for commercial
profit after the enactment of this
statute. Automatic application of
strict liability to parties whose con-
duct was substantially unrelated to the
present danger posed by the hazardous
waste release or who did not obtain
commercial benefit from their conduct,
does not appear to be compelled by the
environmental concerns which gave rise
to Superfund.
Id. at 1143 n.10 (dicta).24
IV. CONCLUSION
The section 311 precedents discussed above should be of
considerable assistance to generators under Superfund. in
24 The article quoted, Dore, The Standard of Civil Liabil"'
ity for Hazardous Waste Disposal Activity: Some Quirks of
Superfund, 57 Notre Dame Lawyer 260, 276 (December 1981)'
stresses that findings of strict liability under section 311
"came in the context of determining the liability of parties
intimately involved in the challenged pollution activity-
Id. at 275.
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11-17
many Superfund cases, potentially responsible generators
will be remote in time and place from the site of the release
and be wholly without fault. In a number of these cases,
the negligence of a transporter or a site owner will have
contributed to the release. The section 311 cases suggest
that the non-negligent generator may escape liability, and
the negligent party should be wholly liable.25
Plaintiffs can be expected to argue that such an inter-
pretation is contrary to the specifically enumerated statu-
tory defenses of section 107. Plaintiffs may claim that
these defenses are the exclusive exceptions to liability.
Such an argument is, however, unconvincing. Section 311
contains similar statutory defenses to liability, yet that
has not stopped the courts from employing fault considera-
tions in determining which parties are liable. Moreover,
the section 311 cases are consistent with Superfund's legis-
lative history, which indicates that Congress pared down the
liability standards of the original bills.
25 As discussed in chapter 1, a non-negligent generator
should not be liable even if the negligent site owner is not
before the court or insolvent, because the Fund was designed
to pay clean-up costs in these circumstances.
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TAB 3
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CHAPTER 3:
THE CAUSATION REQUIREMENT
INTRODUCTION AND SUMMARY OF CONCLUSIONS
Causation is certain to be a critical issue under
Superfund. Old dumpsites inherently present thorny issues
of causation among multiple generators and various owners
and operators. Consequently, cause-in-fact and proximate
cause will continually be raised, and courts will have to
grapple with the scope of these defenses, especially in the
context of multigenerator disposal sites.
As detailed in Part I, proof of causation is a funda-
mental and invariable prerequisite to tort liability at
common law. Although poorly drafted, the liability provi-
sions of Superfund preserve the traditional common law
standards of causation by requiring proof that the defendant
was both the cause-in-fact and proximate cause of the plain-
tiff's loss. This conclusion is strongly supported by
judicial construction of analogous provisions of the Clean
Water Act,1 on which the Superfund liability provisions
were modeled, and by the legislative history of Superfund.
Part II deals more explicitly with the causation
requirements of Superfund. Specifically, Superfund plain-
tiffs must prove cause-in-fact by showing that the defendant
33 U.S.C. §§ 1251, et seq. (hereinafter "Water Act").
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111-2
caused a release or threatened release of a hazardous sub-
stance, and that such release caused the incurrence of
response costs or natural resource damages. Mere evidence
that the defendant disposed of hazardous substances at a
multigenerator disposal site, without proof that the defen-
dant's materials were released or threaten to be released or
that such materials caused damage, is insufficient to give
rise to liability.
Although fact patterns in Superfund cases are likely to
vary widely, a few simple examples illustrate the potential
importance of the cause-in-fact requirement in defending
such cases. If ten generators sent identifiable drums of
waste to a site, and only one generator's drums are involved
in an actual or threatened release, the remaining generators
are not liable because they did not cause the release.
Similarly, if the defendant disposed of only chlorinated
solvents at a site from which there is a release of some
other compound, the defendant did not cause the release and
should not be held liable.
Moreover, if the defendant caused a release which did
not result in response costs or natural resource damages,
there should no liability. For example, where monitoring
reveals only trace amounts of defendant's material in ground-
water, at levels which require no response, and cleanup
actions are based on the presence of other compounds at high
levels, the defendant's release did not cause the response.
-------
Even where the defendant caused a release which
resulted in response action, causation may provide an impor-
tant mechanism for apportionment at multi-generator sites.
If a dozen generators all disposed of the same substance at
the site, for example, a defendant who contributed only 20%
of the material did not cause all the damage and should not
be liable for the entire response costs. In other cases,
liability may be apportioned among defendants who disposed
of different compounds, based on the varying response
actions required for each.
As detailed in Part III, Superfund requires proof that
the defendant was the proximate cause, as well as the cause-
in-fact, of the plaintiff's loss. Although Superfund may
modify the common law of proximate cause with respect to the
acts of intervening third parties, other aspects of the
complex and highly fact-specific proximate cause doctrine
should provide important limitations on liability in appro-
priate cases.
Under Superfund, as at common law, plaintiffs bear the
burden of proving causation by a preponderance of the evi-
"S
dence. Although, as summarized in Part IV, a few contro-
versial decisions in common law products liability and
personal injury cases have shifted the burden of proof on
causation to defendants, those decisions provide no basis
for reversing the congressional allocation of the burden of
proof to plaintiffs in statutory actions under Superfund.
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I. THE UNDERPINNINGS OF A CAUSATION REQUIREMENT
Tort law presents a fundamental tension between the
need to protect and compensate members of society and the
need not to abridge the freedom of those who act. As Dean
Prosser has explained,
The administration of the law becomes a
process of weighing the interests for
which the plaintiff demands protection
against the defendant's claim to untram-
meled freedom in the furtherance of his
own desires, together with the impor-
tance of those desires themselves.2
This fundamental tension is reflected in a recurring
doctrinal tug-of-war. On the one hand, society tends to
feel that defendants should not be held liable unless they
are at fault. Countering fault-based notions,, however, is
an equally strong view that those injured innocently should
be compensated for their injuries. According to leading
legal scholars, the common law has moved like a pendulum,
swinging back and forth between these two doctrinal poles
— at first assigning liability without regard to the defen-
dant1 s fault, then refusing to assign liability without
fault, and, in the past several decades, returning to the
no-fault pole, with various strict liability schemes.3
Even the strongest partisans of liberal compensation
imposing liability without fault, however, have never
Prosser at 15.
Prosser at 17-18.
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III-5
advocated liability without causation. Indeed, our tort
system is founded on causation as an invariable minimum
requirement for assigning legal or moral responsibility.4
Fault and causation are similar in that both go to the
issue of moral and legal responsibility. But causation asks
whether the defendant, in fact, brought about the event.
Fault assumes that the defendant caused the event, but goes
further to ask whether the defendant's actions are "blame-
worthy" or violate societal norms. Our tort system some-
times assigns liability without fault, but never without
causation.
The causation requirement furthers two fundamental
objectives of tort law. First, the rules of tort law are
designed, in part, to influence behavior outside the court-
room.5 For example, holding a polluter liable for damages
he has caused encourages abatement of the pollution and
deters others from engaging in similar conduct. If lia-
bility were assigned without regard to causation, however,
potential defendants would have little incentive to avoid
4 "An essential element of the plaintiff's cause of
action for negligence, or for that matter for any other
tort, is that there be some reasonable connection between
the act or omission of the defendant and the damage which
the plaintiff has suffered." Prosser at 236. "[A]ll agree
that defendant's wrongful conduct must be a cause in fact of
plaintiff's injury before there is liability." 2 F. V.
Harper & F. James, The Law of Torts § 20.02, at 1110 (1956).
5 See Calabresi, Concerning Cause and the Law of Torts:
An Essay for Harry Kalven, Jr., 43 U.Chi.L.Rev. 69, 78
"(1975).
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pollution because their conduct would have no bearing on
their potential liability.
Second, for tort law to work, it must be accepted by
society. Because liability is imposed only for damages
caused by the defendants, tort law appears to the community
as a rational, ordered, and just system — one that the
community will accept. Thus, in our society the causation
requirement forms the outer boundary of the tort law system.
Where it is necessary to compensate victims who cannot meet
the causation standard of the tort law system, compensation
becomes the function of a social welfare system.
At common law, causation encompasses two distinct con-
cepts, "cause-in-fact" and "proximate cause." Broadly
speaking, "cause-in-fact" involves a factual inquiry as to
whether the defendant actually brought about the damage, and
"proximate cause" involves a more policy-oriented inquiry as
to whether the defendant should be held liable for the
consequences of the events he caused in fact.
II. CAUSE-IN-FACT, INCLUDING BOTH "IDENTIFICATION"
AND "DAMAGES," IS AN INVARIABLE REQUIREMENT
FOR RECOVERY UNDER SECTION 107.
In actions brought under section 107, plaintiffs must
prove that the defendant was the cause-in-fact of the
response costs or natural resource damages for which reco-
very is sought. As detailed below, this means that Super-
fund plaintiffs must be required to prove "identification"
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III-7
by showing that the defendant caused a release or threatened
release of a hazardous substance, and "damage" by showing
that such release caused the incurrence of response costs or
natural resource damages. This causation requirement
derives from the statutory text and legislative history of
section 107, as well as the interpretation given by the
courts to section 311 of the Water Act, after which sec-
tion 107 was patterned.
A. Cause-in-Fact Has Always Been
Required at Common Law.
Cause-in-fact is often dismissed by legal thinkers as a
conceptually simple issue, even though it may present great
factual complexity.6 In most cases, the plaintiff will
prove causation by showing that the damaging event would not
have occurred "but for" the defendant's act or omission. As
Prosser explains, "[t]he defendant's conduct is not a cause
of the event, if the event would have occurred without
it."7
In a number of cases, the traditional "but for" test
has given way to the "substantial factor" test, which con-
siders the defendant's conduct a cause-in-fact of an event
8 Harper and James note, for example, that "the cause in
fact aspect of the requirement of legal cause gives little
trouble, and it has been called a simple one." 2 F. V.
Harper and F. James, Torts § 20.02, at 1110 (1956), cited in
0'Toole, Radiation, Causation, and Compensation, 54 Geo.
L.J. 751, 764 (1966).
Prosser at 238-39.
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III-8
if the conduct was a "substantial factor" in bringing about
the event.8 The "substantial factor" test arose because
the "but for" test is not adequate to decide some cases of
multiple causation. Under the "but for" test, if two ante-
cedents concur to bring about a single event and either
antecedent alone would have sufficed, neither antecedent can
be called the cause-in-fact because the event would have
occurred without it.9
For purposes of analysis, the cause-in-fact requirement
can be broken down into two elements, both of which the
plaintiff must prove in order to carry his burden. The
first component is the "who" or "identification" component
— the plaintiff must show that it was the defendant, and
not someone else, who acted or failed to act. The second
component is the "what" or "damage" component — the plain-
tiff must show that the injury was caused by the defendant's
act or omission and not by something else.
For example, five generators may have disposed of five
different hazardous substances at the same disposal site-
8 See Restatement (Second) of Torts § 431 (1965); Prosser
at 239-40.
9 For example, if two motorcycles simultaneously pass the
plaintiff's horse, causing it to bolt, neither motorcyclist
could be considered a "but for" cause. Under the "substan-
tial factor" test, each motorcyclist would be considered *
cause-in-fact. Corey v. Havener, 65 N.E. 69 (Mass. 1902)-
-------
II1-9
State regulatory authorities detect only one of the sub-
stances in a river, construct dikes between the disposal
site and the river, and sue one of the generators to recover
the state's response costs. In order to show causation, the
state would be required at common law to prove "identifica-
tion" by showing that the defendant caused the release; that
is, that the substance found in the river came from the
defendant's deposits at the site and not from materials
deposited by another generator at the same site, or even
from a separate upstream facility. In addition, the state
would be required to prove the "damage" element of causation
by showing that the plaintiff's loss (the cost of construct-
ing the dikes) was caused by the presence of the substance
in the water at sufficient levels to require response.
In addition, the plaintiff at common law would be
required to prove causation by a preponderance of the evi-
dence. In other words, plaintiff must prove on both the
"identification" and "damage" issues that the defendant more
likely than not caused the injury for which recovery is
sought. This test is not unique to the causation issue, but
merely restates the traditional plaintiff's burden of proof
to demonstrate each element of his claim by a preponderance
of the evidence.10
10 The standard of proof is addressed in more detail at
pp. I11-26 to I11-29, infra.
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111-10
B. Proof of Cause-in-Fact Is an
Essential Prerequisite To Recovery
Under Superfund Section 107.
The cause-in-fact requirement is a fundamental element
of liability under Superfund section 107, no less than in
actions at common law. This is true even though section 107
relaxes both the "who" and the "what" to a degree by allow-
ing recovery not only in the case of an actual release but
also for a threatened release. Nonetheless, as detailed
below, cause-in-fact is likely to constitute a potent
defense in many section 107 actions.
1. The provisions of section 107 require
proof of causation.
The liability provisions of Superfund section 107
should be interpreted to require strict proof of both
"identification" and "damage."
Section 107(a), the basic liability section of Super-
fund, is far from a model of draftsmanship and needs to be
read in its inelegant entirety. It provides that:
Notwithstanding any other provision or
rule of law, and subject only to the
defenses set forth in subsection (b) of
this section —
(1) the owner and operator of
a vessel (otherwise subject to the
jurisdiction of the United States)
or a facility,
(2) any person who at the
time of disposal of any hazardous
substance owned or operated any
facility at which such hazardous
substances were disposed of,
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III-ll
(3) any person who by con-
tract, agreement, or otherwise
arranged for disposal or treatment,
or arranged with a transporter for
transport for disposal or treat-
ment, of hazardous substances owned
or possessed by such person, by any
other party or entity, at any
facility owned or operated by
another party or entity and con-
taining such hazardous substances,
and
(4) any person who accepts or
accepted any hazardous substances
for transport to disposal or treat-
ment facilities or sites selected
by such person, from which there is
a release, or a threatened release
which causes the incurrence of
response costs, of a hazardous sub-
stance, shall be liable for —
(A) all costs of removal
or remedial action incurred by
the United States Government
or a State not inconsistent
with the national contingency
plan;
(B) any other necessary
costs of response incurred by
any other person consistent
with the national contingency
plan; and
(C) damages for injury
to, destruction of, or less of
natural resources, including
the reasonable costs of asses-
sing such injury, destruction,
or loss resulting from such a
release.
Section 107(a) (emphasis supplied).
As drafted, section 107(a) requires some interpretive
modification. Read literally, section 107(a) imposes lia-
bility only on certain transporters, under subsection (4).
Subsections (1), (2), and (3), dealing with owners,
-------
II1-12
operators, and generators, contain no liability language.
Accordingly, to achieve a sensible construction of the
liability provisions, the language of subsection (4) which
has been underlined above must be read as modifying each of
subsections (1) through (4).
In the underlined language, the phrase "shall be liable
for" supplies the liability language missing from subsec-
tions (1), (2), and (3). But reading only the phrase "shall
be liable for" in conjunction with the earlier subsections
would create the absurd result of imposing liability on
parties having no connection whatsoever with the disposal
site. Read this way, for example, the owners and operators
of all vessels and facilities could be liable for response
costs at any site anywhere in the United States. Thus, to
achieve a rational construction of Section 107(a), liability
under subsections (1), (2) and (3) as well as (4) must be
limited to vessels or facilities "from which there is a
release, or a threatened release which causes the incurrence
of response costs. .
Section 107(a) expressly requires proof of the "damage"
element of causation — that the release or threatened
release caused the response costs or natural resource daw-
ages for which recovery is sought. Liability accrues only
upon "a release, or a threatened release which causes the
incurrence of response costs. ..." § 107(a)(4) (emphasis
supplied). In addition, damages may be recovered "iot
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II1-13
injury to, destruction of, or loss of natural resources
. . . resulting from such a release." § 107(a)(4)(C)
(emphasis supplied).
The "identification" requirement that the defendant
caused the release, though not stated explicitly in the
statute, must also be met in actions brought under section
107. Absent such a requirement, a generator, transporter,
or previous owner could be liable even though there was no
connection whatsoever between his hazardous material or
waste and the release. There is no indication that Congress
intended to depart radically from the common law by abrogat-
ing the fundamental principle that a defendant can be held
liable only where he caused (can be identified with) the
harm complained of.
The fundamental role of causation, including "identifi-
cation" causation, in Superfund liability determinations is
demonstrated by the section 107(b) defenses, which excuse a
defendant from liability where "the release or threat of
release of a hazardous substance and the damages resulting
therefrom were caused solely by" an act of God, an act of
war, or the act or omission of a third party. § 107(b)
(emphasis supplied). The rationale of section 107(b) is
simple: where another instrumentality caused the release,
the defendant should not be held liable under section 107.
Necessarily implicit in the language of this defense are the
requirements that the defendant's liability is predicated on
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II1-14
his causal relationship to (identification with) the release,
and that the causation of the release is an element of a
prima facie case under section 107(a). if causation of the
release were not required under section 107(a), it would
make no sense to release the defendant from liability based
on causation by another instrumentality under section
107(b).11
Moreover, the section 107(a) provisions hold generators
and transporters liable only where they have engaged in
affirmative acts that cause a release. For example, genera-
tors do not incur potential liability merely by producing
hazardous wastes; they must have "arranged for disposal or
treatment, or arranged with a transporter for transport for
disposal or treatment. ..." § 107(a)(3). Similarly, a
transporter is not liable merely because he transported
hazardous wastes to a site; he must have "accepted . . •
hazardous substances for transport to disposal or treatment
facilities or sites selected by such [transporter]. .
§ 107(a)(4). Without an identification requirement, there
11 Similarly, the identification element of the causation
requirement is emphasized in section 107(c), which provides
dollar limits on liability under section 107. These limits
do not apply where the release or threatened release "was
the result of willful misconduct or willful negligence
within the privity or knowledge of" the defendant, or "the
primary cause of the release" was a violation of safety/
construction, or operating standards. Superfund § 107(c)
(2)(A) (emphasis supplied). As with section 107(b), the
causation concept in section 107(c)(2)(A) does not make
sense unless causation of the release is required unde*
section 107(a).
-------
II1-15
would be no reason to distinguish between generators who did
arrange for disposal and those who did not, since in either
case liability could be predicated on a release unrelated to
the acts of the defendant. Similarly, the distinction
between transporters who selected disposal facilities and
those who did not makes sense only if liability is predi-
cated on the defendant's causal relationship to the release.
In short, the provisions of section 107, while not a
model of clarity, preserve the causation requirements appli-
cable at common law and under the Water Act. Proof of
"damage" causation is expressly required, and the "identifi-
cation" causation requirement is necessary to a reasonable
construction of the statute.
2. Causation is required by the
courts under the Clean Water Act.
Superfund was modeled closely on section 311 of the
Clean Water Act, which has been interpreted by the courts to
require proof of cause-in-fact. Superfund provides that the
term "liable" or "liability" "shall be construed to be the
X
standard of liability which obtains under section 311 of the
Federal Water Pollution Control Act." Section 101(32).12
12 This reference to section 311's standard of liability
is helpful on causation questions, but provides little guid-
ance on other issues, such as apportionment of liability.
See Chapter 1 at 1-45 to 1-48.
-------
111-16
But even absent this statutory reference, judicial construc-
tion of the Water Act would carry great weight in inter-
preting the Superfund provisions, because the latter was
"modeled upon the experience with the Clean Water Act's
spill response program."13
The provisions of the Water Act analogous to section
107 are contained in section 311(f), which nowhere expressly
specifies that causation of the release or discharge is an
element of plaintiff's case but which does provide a defense
to liability where the defendant can show that the discharge
"was caused solely by" another instrumentality.14 With
13 126 Cong. Rec. S14965 (daily ed. Nov. 24, 1980). See
also S. Rep. No. 848, 96th Cong., 2d Sess. 1 (1980)
(S."1480, the Senate predecessor to Superfund, "has its
roots in the liability and funding provisions provided ih
the Clean Water Act of 1972.11)
14 Section 311(f)(1) of the Water Act provides:
Except where an owner or operator can
prove that a discharge was caused solely
by (A) an act of God, (B) an act of war,
(C) negligence on the part of the United
States Government, or (D) an act or
omission of a third party . . . such
owner or operator of any vessel from
which oil or a hazardous substance is
discharged in violation of subsection
(b)(3) of this section shall, notwith-
standing any other provision of law, be
liable to the United States Government
for the actual costs incurred under
subsection (c) of this section for the
removal of such oil or substance. . ..
Sections 311(f)(2) and 311(f)(3) contain analogous liability
provisions for the owners and operators of onshore and
offshore facilities, respectively.
-------
II1-17
respect to causation, the liability and defense provisions
of Superfund are closely analogous to these provisions of
the Water Act,15
Despite the absence of an explicit causation require-
ment in section 311, the courts have required proof that the
defendant caused the discharge in cases brought under the
Water Act. In United States v. Tex-Tow, Inc., 589 F.2d 1310
(7th Cir. 1978), the court held that "causation is required
even under a strict liability statute," and required proof
that the defendant's actions were both the "cause in fact"
and "legal cause" of a spill. Id. at 1313-14. In other
Water Act cases, the government has used dye tests, testi-
mony regarding the defendant's operations, engineering
reports, and chemical, spectrographic, and chromatographic
analyses to prove causation by showing that oil spills came
from the defendant's facilities. See, e.g., United States
v. Malitovsky Cooperage Co., 472 F. Supp. 454 (W.D. Pa.
1979); United States v. Slade, Inc.. 447 F. Supp. 638 (E.JD.
Tex. 1978).
The causation requirement recognized under section 311
s
applies equally to actions under Superfund section 107.
15 The basic liability provisions of Superfund are con-
tained in section 107, and are addressed in detail in
Chapter 2. Like the liability provisions of section 311(f),
Superfund section 107 does not expressly require proof of
"identification" causation, but provides a defense where the
defendant can show that a release "was caused solely by"
another instrumentality. Section 107 expressly requires
proof of "damage" causation, however, while section 311(f)
does not.
-------
II1-18
Particularly since Congress modeled Superfund after the
Water Act the courts should construe the analogous liability
provisions of Superfund section 107 to require proof that
the defendant caused the release, as well as proof that the
release caused the response costs or natural resource dam-
ages for which recovery is sought.
C. The Legislative History of Superfund
Confirms the Causation Requirement
of Section 107.
The legislative history of Superfund reveals a consis-
tent congressional intent to require strict proof of causa-
tion in actions to recover response costs and natural
resource damages. The committee report on H.R. 7020, the
bill originally passed by the House, shows that the bill's
express causation requirement was intended to invoke "the
usual common law principles of causation." H.R. Rep. No.
1016, Part I, 96th Cong., 2d Sess. 33 (1980).
Similarly, S. 1480, the bill reported out of committee
in the Senate, required strict proof of both "identifica-
tion" and "damage" causation. The Committee bill relaxed
the causation requirement only in the context of actions to
recover medical and rehabilitation expenses; it retained
traditional causation requirements for all other claims.
Although S. 1480 was rejected because the liability
provisions were perceived as onerous and unfair to defen-
dants, the Senate developed and passed compromise Superfund
-------
II1-19
legislation which was accepted by the House without amend-
ment. The causation requirements of the earlier bills were
carried forward in section 107 of the final legislation,
which modified the liability provisions of S. 1480 to ame-
liorate their harsh effect but retained the same basic
grammatical structure.
1. The House bill required strict proof
of causation under common law standards.
The Superfund bill initially passed by the House, H.R.
7020, explicitly required proof of causation by imposing
liability on "any person who caused or contributed to the
release or threatened release," H.R. 7020, 96th Cong.,
2d Sess. § 3071(a)(1). In reporting the bill to the House,
the Committee on Interstate and Foreign Commerce explained
that "the usual common law principles of causation, includ-
ing those of proximate causation, should govern the deter-
mination of whether a defendant 'caused or contributed" to a
release or threatened release."16 Under the House bill,
therefore, plaintiffs were required to satisfy the normal
common law requirement of showing a nexus between the defen-
dant's acts and the plaintiff's injury.17
16 H.R. Rep. No. 1016, Part I, 96th Cong., 2d Sess. 33
(1980).
17 In so construing H.R. 7020 the Committee specifically
warned that liability should not be imposed merely on a
(Footnote 17 continued on next page.)
-------
II1-20
2. The Senate Committee bill
also required strict proof
of causation in most cases.
As introduced in the Senate, S. 1480 contained language
on causation similar to that in H.R. 7020.18 Although the
"caused or contributed" language was not carried forward in
the revised liability provisions drafted by the Committee on
Environment and Public Works, the same common law standards
of causation applicable under H.R. 7020 were to apply under
the Committee's version of S. 1480.
With respect to causation, the liability provisions
contained in section 4(a) of S. 1480 as reported out of
(Footnote 18 continued from previous page.)
showing that the hazardous substances generated or trans-
ported by the defendant were found in the facility:
The mere act of generation or transpor-
tation of hazardous waste, or the mere
existence of a generator's or transpor-
ter's waste in a site with respect to
which cleanup costs are incurred would
not, in and of itself, result in lia-
bility under section 3071. The Com-
mittee intends that for liability to
attach under this section, the plaintiff
must demonstrate a causal or contribu-
tory nexus between the acts of the
defendant and the conditions which
necessitated response action under sec-
tion 3041.
Id. at 33-34 (emphasis added).
18 S. 1480, 96th Cong., 2d Sess. § 4(a) (1980). Section
4(a) as originally drafted would have imposed liability on
the "owner or operator" of a vessel or facility, and "anY
other person who caused or contributed or is causing or con"
tributmg to" a discharge, release, or disposal. (emphasis
supplied)
-------
Ill—21
committee were grammatically similar to the provisions of
Superfund sections 107(a) and (b) and Water Act section
311(f).19 While section 4(a) did not expressly require
proof that the defendant caused the release (identifica-
tion), it provided a defense when the defendant could prove
that the release "was caused solely by" an act of God or act
of war.
19 As revised by the Committee on Environment and Public
Works, section 4(a) provided in pertinent part:
Except where the person otherwise liable
under this subsection can prove that a discharge,
release, or disposal was caused solely by an act
of God or an act of war, and notwithstanding any
other provision or rule of law —
(i) the owner or operator of. a vessel or a
facility,
(ii) any person who at the time of disposal
of any hazardous substance owned or operated any
facility or site at which such hazardous sub-
stances are disposed of,
(iii) any person who by contract, agreement,
or otherwise arranged for disposal, treatment, or
transport for disposal or treatment by any other
party or entity of hazardous substances owned or
possessed by such person, at facilities or sites
owned or operated by such other party or entity
and containing such hazardous substances, and
(iv) any person who accepts any hazardous
substances for transport to disposal or treatment
facilities or sites selected by such person, from
which a hazardous substance is discharged,
released, or disposed of, or from which any pol-
lutant or contaminant is released resulting in
action under section 3(c)(1) of this Act, shall be
jointly, severally, and strictly liable. . ..
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II1-22
Despite the absence of an express requirement that the
defendant caused the release, similar proof of causation was
plainly intended as an element of recovery under section 4(a)*
The Committee relaxed the causation requirement only for the
limited purpose of recovering medical and rehabilitation
expenses, and retained strict causation requirements for all
other Superfund claims.
The Committee deliberations centered almost exclusively
on whether strict common law causation requirements would
apply in actions to recover medical and rehabilitation
expenses.20 As revised in Committee, S. 1480 provided a
mechanism through which personal injury plaintiffs could
establish a presumption "that defendant caused or signifi-
cantly contributed to" the plaintiff's injury or disease-
S. 1480, § 4(c)(3)(A).21 The creation of such a presump-
tion necessarily implies that the Committee intended to
20 S. 1480 would have created a new right of action to
recover, among other things, medical expenses due to per-
sonal injury caused by a release. S. 1480, § 4(a)(2)(F)'
21 Even under the medical expenses presumption, however/
the Committee did not relax the requirement for strict proof
that the defendant caused the release (identification); only
the standard of proof for showing that the release caused
the plaintiff's injury (damage) was lightened. In order to
establish the presumption, the plaintiff would have been
required to prove exposure "to a hazardous substance found
in a discharge, release, or disposal which the defenda^S
caused or to which he contributed. . S. 1480, § 4(c)(3)
(A)(i) (emphasis supplied). The standard of proof f°r
showing that the release caused plaintiff's injury was
relaxed, however, through introduction of a "reasonable
likelihood" standard. S. 1480, § 4(c)(3)(A)(ii), (iii)'
-------
II1-23
require proof of causation in Superfund actions, for without
such a requirement, the presumption would have been super-
fluous .
The relaxed standard of causation applied only for "the
limited purpose of recovering out-of-pocket medical expenses
and rehabilitation costs." S. Rep. No. 848, 96th Cong.,
2d Sess. 43 (1980). Traditional common law standards of
causation remained applicable to other costs and damages
recoverable under S. 1480:
To recover for other injuries (or for
costs other than out-of-pocket medical
and rehabilitation expenses), an injured
party must utilize the methods of proof
and evidence ordinarily applied by the
courts in his or her jurisdiction.22
Under S. 1480, therefore, as under the House bill, plaintiffs
were required to meet traditional standards of causation to
recover response costs or natural resource damages.
3. Strict causation requirements were carried
forward in section 107 of Superfund.
The basic grammatical structure of the S. 1480 lia-
bility provisions, and the requirement for proof of causa-
tion, were enacted in Superfund. Indeed, the modifications
made in the liability provisions in developing the final
Superfund bill were designed to ameliorate liability terms
22 S. Rep. No. 848, 96th Cong., 2d Sess. 43 (1980).
-------
111-24
which the Senate found too severe — not to make liability
even more severe by limiting causation requirements.
For example, Senator Stafford, a sponsor of S. 1480 and
the ranking minority member of the Committee on Environment
and Public Works, conceded that many of his colleagues
"perceive[d] [S. 1480] as punitive and unnecessarily rigor-
ous."23 Similarly, Senator Helms emphasized the "well-
deserved criticism" directed at S. 1480, based on standards
of liability which were "grossly unfair."24 And Senator
Riegle also described S. 1480 as "too burdensome or puni-
tive."25
Due to this "strong concern and opposition," the bill's
sponsors were required to make "major concessions" to pass
any Superfund legislation.26 Following a second round of
negotiations, a "new compromise was shaped,"27 which passed
the Senate and was accepted by the House without amend-
ment.28
23 126 Cong. Rec. S14967 (daily ed. Nov. 24, 1980).
24 Id. at S15004.
25 Id. at S15007.
26 Id. at S14968 (remarks of Senator Stafford).
27 _Id- at S14967 (remarks of Senator Stafford).
28 See 126 Cong. Rec. H11791 (daily ed. Dec. 3, 1980)
(remarks of Rep. Harsha); id. at HI 1792 (remarks of Rep*
Breaux).
-------
111-25
Having rejected earlier liability provisions as exces-
sively onerous, despite the incorporation of strict causa-
tion requirements, Congress certainly did not dilute the
causation requirements of H.R. 7020 and S. 1480 in develop-
ing the compromise Superfund legislation.29 Accordingly,
Superfund's legislative history confirms that the strict
causation requirements applicable at common law must be
satisfied in actions brought under Superfund section 107.
D. The Cause-in-Fact Requirement Substantially
Limits Superfund Liability.
In order to prove cause-in-fact under Superfund, plain-
tiffs must show (1) that it is more likely than not that the
defendant was a substantial factor in causing a release or
threat of release, and (2) that it is more likely than not
that the release or threat of release caused the incurrence
of response costs or damage to natural resources. Even
where plaintiffs are able to make the requisite showing,
causation provides a mechanism for apportioning damages
among defendants. Accordingly, the cause-in-fact require-
ment substantially limits potential liability under Super-
fund.
29 Indeed, the causation requirement was reaffirmed on the
Senate floor during debate on the final compromise legisla-
tion. See p. II1-26 infra (remarks of Senator Helms).
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I11-26
1. Superfund plaintiffs must
bear the burden of proof.
Superfund plaintiffs bear the burden of proving causa-
tion as an element of a prima facie case. Plaintiffs must
show both "identification" and "damage" causation by a
preponderance of the evidence. Thus, mere evidence that the
defendant has some vague association with a disposal site is
an insufficient basis for recovery.
The Senate debate on the final compromise Superfund
legislation recognized that the burden of proof rests with
Superfund plaintiffs:
The Government can sue a defendant under
the bill only for those costs and dam-
ages that it can prove were caused by
the defendant's conduct.30
No exceptions to this rule were even suggested in the debate-
Indeed, even the relaxed medical causation provision
developed in the Senate Committee's version of S. 1480, but
dropped before final passage, emphasized that the burden of
proof remains with the plaintiff:
The presumption . . . affects only the
burden of going forward with the presen-
tation of the case. Nothing in this
paragraph shall affect the burden of
proof which shall remain with the claim-
ant in accordance with Rule 301 of the
Federal Rules of Evidence.
30 126 Cong. Rec. S15004 (daily ed. Nov. 24, 1980) (remark
of Senator Helms) (emphasis added).
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III—27
S. 1480, § 4(c)(3)(B). No provision of Superfund purports
to modify either the burden of going forward with the evi-
dence, or the ultimate burden of proof. To the contrary,
Congress specifically recognized that plaintiffs would bear
the burden of proof under the Superfund liability provi-
sions, considered modifying the burden of going forward in
the discrete context of medical expense claims and left the
burden of proof ultimately with plaintiffs in all circum-
stances .
In order to sustain their burden of proof, plaintiffs
must prove causation by a preponderance of the evidence. As
Dean Prosser has emphasized, a mere possibility that the
defendant caused the injury is inadequate to support lia-
bility.31 Similarly, where the plaintiff fails to show
According to Prosser,
[Plaintiff] must introduce evidence
which affords a reasonable basis for the
conclusion that it is more likely than
not that the conduct of the defendant
was a substantial factor in bringing
about the result. A mere possibility of
such causation is not enough; and when
the matter remains one of pure specula-
tion or conjecture, or where the proba-
bilities are at best evenly balanced, it
becomes the duty of the court to direct
a verdict for the defendant.
Prosser at 241.
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Ill—28
which of several possible causes was responsible for his
injury, the courts have denied recovery.32
For example, in a case such as a groundwater cleanup
involving an actual release, Superfund plaintiffs cannot
recover merely by showing that a defendant disposed of a
hazardous substance at a multi-generator site and, there-
fore, might have caused a release. If the plaintiff is
unable to show that it is more likely than not that the
defendant caused the release, or is unable to show that it
is more likely than not that the release caused the response
or natural resource damages for which recovery is sought, no
recovery will be allowed.
To prove that a defendant caused a release at a multi-
generator site, plaintiffs must prove at a minimum that the
wastes deposited at the site by the defendant include the
hazardous substances involved in the release or threatened
release. For instance, where the plaintiff proves that
carbon tetrachloride has been released from a site, he must
32 As the court held in Ingersoll v. Liberty Bank of
Buffalo, 14 N.E.2d 828 (N.Y. 1938),
Where the facts proven show that there
are several possible causes of an injury,
and it is just as reasonable and prob-
able that the injury was the result of
one cause as the other, plaintiff cannot
have a recovery as he has failed to
prove that the negligence of the defen-
dant caused the injury.
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111-29
also prove that the defendant sent carbon tetrachloride to
the site. Absent such proof, the plaintiff could only
speculate that the defendant caused the release, and no
recovery should be allowed.
Similarly, a mere possibility that the defendant's
release caused response costs or natural resource damages is
insufficient to support recovery. Rather plaintiff must
show by a preponderance of the evidence that the defendant's
release caused the response taken at the site.33
The government's problem may be simplified when surface
cleanup is involved, and the causation issue is centered on
a threat of release. Linkage between a defendant's waste
and a release will be unnecessary. But it will still be
necessary for the government to show that defendant's waste
was present at the site, thereby posing a threat of release
that required cleanup.
2. Causation provides a mechanism for
apportionment in Superfund cases.
Even where plaintiffs are able to prove that a defen-
dant more likely than not was a "substantial factor" in
causing a release, causation provides a useful mechanism for
33 For example, if the defendant's release was completely
cleaned up by removing his drums of waste and a few inches
of topsoil from the site, the defendant's release did not
cause an extensive subsurface response program, and the
defendant should not be liable for the subsurface costs.
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111-30
apportioning liability at multi-generator sites. Apportion-
ment is required in Superfund cases because Superfund does
not provide for joint and several liability, and indeed
Congress explicitly rejected the imposition of joint and
several liability.34
In most cases at common law, pollution has been
"regarded by the courts as capable of some rough apportion-
ment according to the extent to which each defendant has
contributed, and it is held that each will be liable only
for his proportionate share of the harm."35 The Restatement
establishes the presumption that "[i]f two or more persons,
acting independently, tortiously cause distinct harms or a
single harm for which there is a reasonable basis for divi-
sion according to the contribution of each, each is subject
to liability only for the portion that he has himself
caused.1136
Where the defendant's wastes are only part of the
hazardous substances involved in a release, his liability
should be limited to that portion of the response costs or
resource damages caused by his waste. A company should bear
no liability for another generator's larger or more toxic
release, based merely on the unfortuitous disposal of wastes
at the same site. In addition, where several generators
See chapter 1 at 1-17 to 1-20.
Prosser at 608.
Restatement (Second) of Torts, § 881 (1979).
34
35
36
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Ill—31
each contributed the same or similar types of waste, in
substantial quantities, causation provides a responsible
mechanism for apportioning damages fairly among the defen-
dants .
III. PROOF OF PROXIMATE CAUSE IS ALSO
REQUIRED UNDER SUPERFUND.
The concept of proximate cause encompasses a variety of
legal policy considerations limiting recovery where the
injury is so unforeseeable or remote from the defendant's
acts that it is unfair to impose liability. Congress incor-
porated common law proximate cause standards in Superfund,
although it limited their application in cases involving the
intervening acts of third parties. The courts have also
recognized the proximate cause requirement under section 311
of the Water Act. Accordingly, the proximate cause require-
ment may provide an important limitation on Superfund lia-
bility.
A. The Proximate Cause Requirement
at Common Law.
Proximate cause is not a question of physical causation
at all, but rather a question of the extent of a defendant's
liability for events which he caused in fact. Like the
ripples caused by a pebble falling in a pond, the effects of
a defendant's act spread out in time, space and directness.
How far the defendant's liability for his act should run is
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II1-32
a legal policy question, not a factual one, and is the
subject of inquiry in proximate cause issues. Thus,
"[p]roximate cause ... is merely the limitation which the
courts have placed upon the actor's responsibility for the
consequences of his conduct."37
No single formula can determine whether A was the
proximate cause of B. Instead, proximate cause presents "a
series of distinct problems, more or less unrelated, to be
determined upon different considerations"38 which can be
conveniently summarized in the form of five questions:
(1) Was the damage that occurred foreseeable? (2) Was the
plaintiff who was harmed foreseeable? (3) Was the damage
that occurred direct? (4) Was there a significant inter-
vening cause? (5) Was there no other person on whom the
defendant was free to leave the burden of protecting the
plaintiff?39
Thousands of cases have addressed these questions, and
hundreds of books and law review articles have probed the
issues further. As a general rule, however, in uninten-
tional torts, the defendant may be excused from liability on
the basis of any of the five basic proximate cause issues
37 Prosser at 236.
38 Id. at 249.
39 See id. at 249-50 for a similar analysis, which also
treats the issues of "cause-in-fact" and apportionment of
damages among causes as aspects of proximate cause.
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111-33
outlined above. Thus, defendants are not responsible if the
damage40 or the plaintiff41 was unforeseeable, if the
damage was indirect or remote,42 if there was an interven-
ing cause43 or if there was another person to whom the
defendant could have left responsibility.44 Proximate
40 E.g. Has sett v. Palmer, 12 A. 2d 646 (Conn. 1940)
(Defendant railroad which failed to post sign or guard near
exposed electrical wire was not liable for injuries to
workmen when steel measuring tape fell, striking the wire
and workmen simultaneously and causing a shock, since that
damage was unforeseeable).
41 E.g. Palsgraf v. Long Island R. Co., 162 N.E. 99 (N.Y.
1928) TRailroad employees, who helped a passenger board a
moving train and dislodged the passenger's wrapped package,
were not liable for injuries to woman standing on station
platform when fireworks in the package exploded, overturning
scales which fell on the woman, since harm to the woman was
unforeseeable).
42 E.g. Petition of Kinsman Transit Co., 388 F.2d 821
(2d Cir. 1968). (Vessel broke loose from moorings and
struck second vessel which in turn broke loose from moor-
ings, and both vessels drifted downstream and crashed into
bridge which collapsed and together with two vessels formed
dam causing flooding and ice jam. Damage sustained by owner
cf cargo aboard vessel berthed in harbor below bridge, as
result of inability to unload cargo at point above collapsed
bridge, and damages incurred by company engaged in unloading
cargo from vessel located above bridge, in having to rent
special equipment to unload vessel because of ice jam, were
too tenuous and remote to permit recovery).
43 E.g. Richards v. Stanley, 271 P.2d 23 (Cal. 1954)
(Where defendant left key in ignition of unlocked parked car
and thief stole the car and ran down the plaintiff, defen-
dant was not liable because the thief was an intervening
cause).
44 E.g. Jessup v. Sloneker, 21 A. 988 (Pa. 1891) (Defen-
dant laborer, hired to excavate in street, was not liable
for injuries to passers-by who fell into unmarked hole,
since laborer was entitled to leave it to his employers to
set out a lantern).
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111-34
cause is exceedingly complex, highly fact-specific, and in
some areas greatly confused. The rule expressed above,
then, is subject to many exceptions.
Although the above analysis arose in the context of
negligence cases, a strict liability regimen poses the same
need for determining proximate cause.45 Moreover, the
proximate cause standard may be higher in a strict liability
regimen than in a negligence regimen. In a negligence case,
the plaintiff must show both that the defendant caused the
harm and that the defendant was negligent. As a matter of
equity, if causation is to be the sole basis for liability/
it seems appropriate to require a more rigorous showing of
causation.
This analysis is supported by tort law's differential
treatment of intentional and unintentional torts. Defen-
dants are generally held liable for the unforeseeable conse-
quences of their intentional torts, but not for the unfore-
seeable consequences of their unintentional torts.46
Blameworthiness seems to be considered an independent basis
for liability; as that basis diminishes, the courts insist
45 "The same practical necessity for the restriction of
liability within some reasonable bounds, which arises in
connection with problems of "proximate cause" in negligence
cases, demands [in strict liability cases] that some limit
be set." Prosser at 517.
46 E.g., Derosier v. New England Tel. & Tel. Co., 130 A-
145 (N.H. 1925).
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111-35
on a fuller showing of the other basis for liability --
causation. Following this pattern, the courts should insist
on rigorous proof of causation in strict liability cases,
which require no showing of blameworthiness.
B. Superfund Plaintiffs Must
Prove Proximate Cause.
Proof of proximate cause, under the standards developed
at common law, is a prerequisite to recovery under Superfund
section 107. As set forth above, both the language of
section 107 and judicial interpretation of the analogous
provisions of the Clean Water Act confirm that causation is
essential in Superfund liability determinations. See
pp. 111-10 to II1-18, supra.
As the legislative history shows, Congress intended to
incorporate common law standards of proximate cause in
Superfund. For example, in explaining the liability provi-
sions of the House Bill, H.R. 7020, the Committee on Inter-
state and Foreign Commerce emphasized that "the usual common
law principles of causation, including those of proximate
causation, should govern the determination of whether a
defendant 'caused or contributed1 to a release or threatened
release.1,47
47 H.R. Rep. No. 1016, Part I, 96th Cong., 2d Sess. 33
(1980) (emphasis supplied).
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111-36
Similarly, S. 1480, the bill reported out of committee
in the Senate, applied traditional legal standards to causa-
tion issues, except with respect to the recovery of medical
expenses.48 In explaining the relaxed standard for proving
medical causation, the Senate Committee on Environment and
Public Works was careful to note that a plaintiff seeking
other recovery "must utilize the methods of proof and evi-
dence ordinarily applied by the courts in his or her juris-
diction."49 Thus, section 107, which retained the basic
structure of the S. 1480 liability provisions, requires
proof of proximate cause under traditional common law stan-
dards .
Moreover, judicial interpretation of the analogous
liability provisions found in section 311(f) of the Water
Act provides strong confirmation that proximate cause is
required under section 107. For example, in United State!
v. Tex-Tow, Inc., the court held that plaintiffs under sec-
tion 311(f) must prove that the defendant's actions are the
"legal cause," as well as the cause-in-fact, of a spill
covered by section 311. 589 F.2d at 1314. Although Tex-Tojf
did not apply a rigorous proximate cause standard, the
48 The medical causation presumption contained in the
committee version of S. 1480, which was not carried forward
into the final Superfund legislation, is addressed at
pp. 111-22 to 111-23, supra.
49 S. Rep. No. 848, 96th Cong., 2d Sess. 43 (1980).
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111-37
court's recognition of the proximate cause requirement under
section 311 strongly reaffirms proximate cause as an essen-
tial element under section 311.
Only with respect to the intervening acts of third
parties — a distinct subset of proximate cause issues —
did Congress alter the basic common law standards for prov-
ing proximate cause. Section 107(b)(3) provides a defense
where the defendant can show that the release and resulting
damages were caused solely by
an act or omission of a third party
other than an employee or agent of the
defendant, or than one whose act or
omission occurs in connection with a
contractual relationship, existing
directly or indirectly, with the defen-
dant ....
Since at common law the defendant would not be the proximate
cause of an injury caused solely by the intervening act of a
third party in a contractual relationship with the defen-
dant, this provision represents a congressional modification
of common law standards. In addition, section 107(b) may
shift the burden of proof to the defendant where the inter-
vening acts of third parties are at issue. But Superfund
does not change the common law of proximate causation in
other respects.
IV. ABERRANT THEORIES OF CAUSATION
The foregoing analysis demonstrates that Superfund was
intended to require strict proof of causation by plaintiffs,
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111-38
in accordance with the standards developed at common law and
under section 311 of the Clean Water Act. Where Superfund
plaintiffs fail to satisfy the burden of proof on causation,
however, they may argue that the burden should be shifted to
defendants on the basis of a few common law decisions which
departed from tradition by requiring defendants to prove
that they did not cause the plaintiff's injury. The few
decisions which have so held provide no basis for altering
the congressional allocation of the burden of proof in
Superfund, fail to show a consistent rationale for changing
common law standards and have not been widely accepted, in
addition, the reasoning of those decisions does not apply
well in the Superfund context.
In statutory actions under Superfund, the courts are
not free to tinker with the burden of proof assigned to
plaintiffs by Congress. Congress could have provided a
mechanism for shifting the burden of proof on causation
issues to defendants. But as set forth above, the only con-
gressional effort to relax Superfund causation requirements*
the medical causation presumption of S. 1480, did not relax
the "identification" requirement and affected only the
burden of going forward, not the ultimate burden of proof-
Even this modest retreat from strict causation requirements
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111-39
was deleted from the final Superfund legislation, leaving
the burden squarely on plaintiffs to prove causation.50
Moreover, no consistent rationale has been developed
for shifting the burden of proof on causation to defendants.
For example, in Summers v. Tice, 199 P.2d 1 (Cal. 1948),
where two hunters independently and negligently fired their
guns in the plaintiff's direction, the plaintiff was unable
to identify which defendant fired the shot that caused
injury. The court held that because the defendants, both
negligent, "brought about a situation where the negligence
of one of them injured the plaintiff ... it should rest
with them each to absolve himself if he can." 199 P.2d
at 4.
A different theory of liability was applied in Hall v.
E.I. DuPont de Nemours & Co., 345 F.Supp. 353 (E.D.N.Y.
1972), aff'd sub nom., Ball v. E.I. Dupont de Nemours & Co.,
519 F.2d 715 (6th Cir. 1975), where some plaintiffs were
unable to identify the specific manufacturer of blasting
caps which exploded and caused their injuries. In an action
against six manufacturers "comprising virtually the entire
blasting cap industry" of the United States, id. at 391, the
50 The burden-shifting cases are also inconsistent with
the liability scheme Congress mandated in Superfund because,
with at least one notable exception, those decisions have -s
imposed joint and several liability on defendants. Super-
fund does not provide for joint and several liability, and
indeed, Congress considered and rejected such liability
under Superfund. See chapter 1.
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II1-40
Hall court held that joint liability could be predicated on
alleged joint control of risk under a conscious agreement
among defendants not to place warnings on blasting caps.
The court held that the burden of proof on causation could
be shifted to defendants "[i]f plaintiffs can establish by a
preponderance of the evidence that the injury-causing caps
were the product of some unknown one of the named defen-
dants, that each named defendant breached a duty of care
owed to plaintiffs, and that these breaches were substan-
tially concurrent in time and of a similar nature." Id. at
380. Other Hall plaintiffs who alleged that a specific
manufacturer produced the injury-causing cap were not per-
mitted to proceed on a joint liability theory, and their
claims.against other manufacturers were dismissed.51
In Bichler v. Eli Lilly and Co., 436 N.Y.S.2d 625
(1981), aff'd, 450 N.Y.S.2d 776 (1982), plaintiff's injuries
were caused by her mother's ingestion of the prescription
drug DES during pregnancy. Although plaintiff was unable to
identify the manufacturer of the DES used by the mother, and
thus had not proved that Eli Lilly made the pills which
caused plaintiff's injury, no other manufacturers were named
51 345 F.Supp. at 381-84. Ironically, the Hall decision
left the plaintiffs who alleged an ability to prove causa-
tion against a specific manufacturer in a worse position
than those who alleged they were unable to identify a speci-
fic manufacturer who caused the injury.
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II1-41
as defendants. The court held Eli Lilly jointly and sever-
ally liable, based on a finding that Eli Lilly had engaged
in concerted action with other manufacturers through cooper-
ation and pooling of information, agreement on the basic
chemical formula, adoption of Lilly's literature as a model
for package inserts, and "conscious parallel activity there-
after." 436 N.Y.S.2d at 633-34.
Sindell v. Abbott Laboratories, 607 P.2d 924 (Cal.),
cert, denied, 449 U.S. 912 (1980), another DES case, specif-
ically rejected the "concert of action" theory applied in
Bichler, as well as the "enterprise liability" theory of
Hall. 607 P.2d at 931-35. In addition, the Sindell court
recognized that the "alternate liability" theory of Summers,
developed in a case where one of two negligent defendants
caused plaintiff's injury, would be unfair if applied in a
case where "there is a possibility that none of the five
defendants . . . produced the offending substance and that
the responsible manufacturer . . . will escape liability."
607 P.2d at 936-37; see id. at 930-31. The Sindell court
held that the burden of proof could be shifted to defendants
only if the manufacturer of a "substantial share" of the DES
market were joined in the action, and limited each defen-
dant's liability to its market share:
[e]ach defendant will be held liable for
the proportion of the judgment repre-
sented by its share of that market
unless it demonstrates that it could not
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II1-42
have made the product which caused
plaintiff's injuries.
Id. at 937.
Other courts have firmly rejected the burden-shifting
theories advanced in these controversial cases. For
example, in Ryan v. Eli Lilly & Co., 514 F.Supp. 1004
(D.S.C. 1981), the court refused to apply Sindell under
South Carolina law. Judge Chapman held that:
The unequivocal law of South Carolina is
the plaintiff in a negligence action has
not only the burden of proving negli-
gence but also the burden of proving
that the injury or damage was caused by
the actionable conduct of the particular
defendant .... Application of this
burden-shifting theory would violate
established public policy and funda-
mental principle of tort law and pro-
cedure in this state in a variety of
ways.
Id. at 1018-19.
The Ryan decision was followed in another case under
South Carolina law, Mizell v. Eli Lilly & Co., 526 F.Supp-
5§9 (D.S.C. 1981). In Mizell, Judge Hawkins refused to
apply Sindell, observing that:
By removing the traditional requirement
that the plaintiff identify the respons-
ible manufacturer, the doctrine destroys
the nexus between production of a defec-
tive item and the plaintiff's injury.
As a result, liability is placed on
defendants bearing no responsibility for
the defective product.
Id. at 596.
Similarly, in Starling v. Seaboard Coast Line R. CQj.>
533 F.Supp. 183 (S.D. Ga. 1982), the court careful^
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I11-43
reviewed Hall and Sindell, concluding that "these theories
have no basis in Georgia law." Id. at 189. The court
observed that burden-shifting is contrary to Georgia's
product liability rules because it tends to make every
manufacturer an insurer of the safety of all generically
similar products; that the legislature, and not the courts,
should decide this fundamental issue; and that the market
share approach of Sindell is unfair if market share is not
equivalent to the harm caused. Id. at 190-91.
Whatever their status at common law, the reasoning of
Sindell, Bichler, Hall and Summers is inapposite in Super-
fund cases. The conditions which a few courts believe
warranted burden-shifting in those cases are absent in
Superfund litigation.
First, decisions shifting the burden of proof on causa-
tion issues in common law actions have been influenced by
the prospect that an innocent, injured party would be left
without a remedy, a problem that will not arise under Super-
fund. The court in Summers, for example, wrote that "the
innocent wronged party should not be deprived of his right
to redress." 199 P.2d at 5. Similarly, in Bichler, the
court stated that " [p]laintiffs should not be without a
remedy merely because defendants' conduct has made it diffi-
cult or impossible to prove which defendant was the actual
tortfeasor." 436 N.Y.S.2d at 630.
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II1-44
Under Superfund, however, Congress has provided an
industry-financed Fund to pay cleanup costs and natural
resource damages where the responsible parties cannot be
identified, or are insolvent. Superfund plaintiffs will not
be left without a remedy merely because they are unable to
establish causation. Moreover, imposing the cost on the
Fund distributes the cost throughout the industry, a much
more equitable result than imposing the cost entirely on one
or more defendants with no demonstrable causal relationship
to the harm.
Second, the basis for shifting the burden of proof has
been the defendant's negligence or violation of a duty of
care, shifting the loss from an innocent plaintiff to defen-
dants who are at fault. For example, the Sindell court
emphasized that "as between an innocent plaintiff and negli-
gent defendants, the latter should bear the cost of the
injury."52 In Summers the trial court found both defen-
dants negligent,53 and in Sindell plaintiffs alleged
negligence in the manufacture and marketing of a drug with-
out adequate testing.54 Similarly, in Hall the court held
that plaintiffs are entitled to shift the burden of proof on
52 607 P.2d at 936.
53 199 P.2d at 5.
54 607 P.2d at 926.
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111-45
causation only if they can prove, inter alia, "that each
named defendant breached a duty of care owed to plain-
tiffs."55 In Shunk v. Bosworth,56 however, the Sixth Cir-
cuit refused to shift the burden of proof under the Summers
rule in a case where fault had not been shown. Shunk
involved a hunting accident similar to the facts of Summers,
except that "[t]here was no evidence from which inferences
could be drawn that either or both of the defendants were
guilty of negligence . . ..,l57
Where Superfund plaintiffs rely on theories of lia-
bility which do not require proof of wrongdoing or breach of
a duty of care, the causation requirement should not be
relaxed. Absent proof of fault on the part of the defen-
dants, there is simply no basis for shifting the burden of
proof from a Superfund plaintiff to defendants, particularly
in light of the plaintiff's alternate recourse to the Fund.
Third, the Hall, Bichler, and Sindell decisions are
particularly inapposite because they involved efforts to
impose industry-wide liability on defendants manufacturing
fungible goods, where any one of the defendants could have
55 345 F.Supp. at 380. Even in Bichler, nominally a strict
liability case, the defendant was found to have marketed an
"unreasonably dangerous drug," and was described as a
"wrongdoer." 436 N.Y.S.2d at 634.
56 334 F.2d 309 (6th Cir. 1964).
57 Id. at 312. But see Litzmann v. Humboldt County,
273 P.2d 82 (Cal. 1954), a lower level California decision
which apparently has never been followed.
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111-46
been the cause of plaintiff's injury. By contrast, at most
dumpsites, generators did not dispose of uniform and fungi-
ble wastes. Instead, generators are likely to have disposed
of a wide variety of materials, of varying toxicity, solu-
bility and persistence. Thus, there is no basis for believ-
ing that each defendant contributed equally to the risk, or
that, as the Sindell court argued, "each manufacturer's
liability would approximate its responsibility for the
injuries caused by its own products." 607 P.2d at 937.
Similarly, because there is no uniformity of conduct among
generators, the "concerted action" theory applied in BichleT'
and the "joint control of risk" theory applied in Hall, are
inapplicable to waste disposal cases under Superfund.
Accordingly, there is no basis for shifting the burden
of proof on causation to Superfund defendants. When plain-
tiffs fail to show causation by a preponderance of the
evidence, recovery should be denied.
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TAB 4
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CHAPTER 4:
SUBSTANTIVE STANDARDS
UNDER SECTION 106 OF SUPERFUND
INTRODUCTION AND SUMMARY OF CONCLUSIONS
EPA's policy to date has been to utilize section 106
and similar emergency enforcement provisions of other stat-
utes routinely whenever EPA seeks to require industry
cleanup of hazardous wastes.1 This policy has resulted in
more than sixty suits under "imminent and substantial endan-
germent" provisions, including many cases containing counts
under section 106 of Superfund.2 So long as this policy
continues, section 106 may be the key provision that genera-
tors will be required to deal with under Superfund.
This chapter addresses and discusses the limits on
EPA's authority under section 106. Part I is a discussion
of the overall scheme of Superfund and how section 106 fits
For example, in EPA's Interim Superfund Removal Guid-
ance (July 28, 1981), on-site coordinators are instructed to
"request" or "compel" private parties to clean up before
resorting to Response Fund money. Furthermore, EPA's Acting
Director of the Office of Solid Waste Enforcement Programs
has said that the EPA prefers issuing orders to using the
Fund's resources. See 10 Pest. & Tox. Chem. News, No. 26
at 17 (May 12, 1982).
2 Remarks of Carol Dinkins,.Asst. Atty. General, Land and
Natural Resources Division, Department of Justice, at annual
Meeting of ABA Section of Corporation Banking and Business
Law (August 9, 1982) at 8. Many of these cases have been
settled. Id.
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IV-2
into that scheme. Part II discusses whether section 106 is
substantive or merely jurisdictional, and, if it is substan-
tive, what criteria govern liability. It will be difficult
to maintain that the section is merely jurisdictional;
however, the primary source for interpreting section 106
should be the statutory requirements of section 106 itself
and prevailing equitable principles — not the new liability
regime established by section 107 of Superfund.
Part III discusses in greater detail what these sub-
stantive limitations are. Part III-A begins with the "immi-
nent and substantial endangerment" requirement, which the
statute, its legislative history, and court decisions under
analogous statutes indicate was intended to limit applica-
tion of section 106 to extraordinary circumstances, where
the normal operation of Superfund would not suffice to
protect the public.
Part III-B addresses who may be proper parties defen-
dant under section 106. Even though a wide range of pos-
sible defendants theoretically might be liable for post-
cleanup damages under section 107, the statutory framework
and equitable principles suggest that many of these parties,
including generators, will not generally be proper defen-
dants under section 106. Under this interpretation, genera-
tors may be enjoined only when they participated directly i*1
waste site management or knowingly contributed wastes to an
unsafe site.
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IV-3
Part III-C then discusses the additional section 106
requirement that the government demonstrate that it lacks an
adequate remedy at law as a prerequisite to obtaining
injunctive relief- Like the imminent and substantial endan-
germent requirement, this condition underscores Congress'
intent that in the ordinary situation the government should
employ its section 104 cleanup authority and seek recovery
under section 107 rather than forcing the courts to decide
the need for and scope of remedy in an enforcement action
for injunctive relief.
Assuming that the government establishes an "imminent
and substantial endangerment," the equitable principles
governing section 106 place significant limits on the nature
and scope of cleanup that can be required. As discussed in
Part IV, both the Act and its legislative history mandate
that cleanup orders be consistent with the National Contin-
gency Plan (NCP). Moreover, remedies that might be appro-
priate under section 104 are not necessarily appropriate
under the equitable principles that govern section 106.
I. SECTION 106 IS AN EMERGENCY PROVISION
DESIGNED TO SUPPLEMENT THE PRINCIPAL
CLEANUP PROVISIONS OF SECTIONS 104 AND 107.
Superfund represents a sharp break with the past,
because for the first time the government is authorized to
carry out hazardous waste site cleanup activity on its own
and then seek recovery from potentially responsible parties.
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IV-4
In this regard, the key provision is section 104, which
establishes the government's authority to engage in various
kinds of cleanup activity and which imposes certain limits
on the kinds of activity that may be appropriate.
Section 105, in turn, provides further and more
detailed control over authorized cleanup operations. in
particular, that section requires publication of a National
Contingency Plan that provides the criteria for determining
the sites needing cleanup and what the nature of cleanup
operations at those sites should be.
Under section 105, the NCP is to provide criteria to
assess the risks presented by various sites (§ 105(8)(A))
and to establish a list of priority sites to be cleaned up
(§ 105(8 )(B)). The NCP must also set forth "methods and
criteria for determining the appropriate extent of removal,
remedy and other measures authorized by this Act,"
(§ 105(3)) and a means of assuring that these measures are
"cost-effective" (§ 105(7)).
The authority, resources and procedures for accom-
plishing and funding the cleanup under section 105 are
provided not only by section 104, but also by sections 107,
111 and 112 of the Act. Section 107 provides a means for
the government to recover its costs incurred for hazardous
waste (but not other) cleanup authorized by section 104,
provided that such costs are "not inconsistent with the
NCP." Under section 107, private parties may be liable for
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IV-5
hazardous waste cleanup costs that can be linked to their
conduct. The list of potential defendants under section 107
is expansive, including at least some generators.3 More-
over, the standard of liability under section 107 may, in
roany instances, be strict liability.4
In contrast to sections 104 and 107, which permit the
government to undertake certain forms of cleanup and recover
its costs, section 106 authorizes EPA to seek abatement
relief directly when it "determines that there may be an
imminent and substantial endangerment to the public health
or welfare or the environment because of an actual or
threatened release of a hazardous substance from a facil-
ity." m addition, the Administrator may take "other
action,11 including the issuance of "such orders as may be
necessary to protect public health and welfare and the
®nvironment.1,5 Failure to comply with a section 106 order
See Chapter 5 for a detailed discussion of potentially
liable parties.
* For a detailed analysis of section 107 liability
issues, see Chapters 2 and 5.
5 The text of section 106(a) is as follows:
In addition to any other action
taken by a State or local government,
when the President determines that there
may be an imminent and substantial
endangerment to the public health or
welfare or the environment because of an
actual or threatened release of a haz-
ardous substance from a facility, he may
(Footnote 5 continued on next page.)
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IV-6
is potentially punishable by a $5,000 fine for each day of
non-compliance,6 and by treble damages if the government
uses Response Fund money to clean up the release after the
responsible party refuses without justification to do so.7
By its terms, section 106 is intended to be used only
when the normal cleanup regime established by sections 104,
105 and 107 will not suffice. Thus, section 106 expressly
is referred to as an "emergency response authority" and sec-
tion 106(c) requires EPA to issue guidelines to coordinate
its action under this provision with that under other "immi-
nent hazard, enforcement and emergency response author-
ities." Moreover, section 106 is directed only at "imminent
and substantial endangerment," a limitation that does not
(Footnote 5 continued from previous page.)
require the Attorney General of the
United States to secure such relief as
may be necessary to abate such danger or
threat and the district court of the
United States in the district in which
the threat occurs shall have jurisdic-
tion to grant such relief as the public
interest and the equities of the case
may require. The President may also,
after notice to the affected State, take
other action under this section
including, but not limited to, issuing
such orders as may be necessary to
protect public health and welfare and
the environment.
42 U.S.C. § 9606(a).
6 Superfund § 106(c), 42 U.S.C. § 9606(c).
Superfund § 107(c)(3), 42 U.S.C. § 9607(c)(3).
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IV-7
aPply to all actions under section 104. And unlike sections
104 and 107, the existence and scope of the authorized
remedy under section 106 is defined expressly in terms of
"the public interest and the equities of the case."
II. ALTHOUGH SOME ARGUE THAT SECTION 106 IS SOLELY
JURISDICTIONAL, THE COURTS ARE LIKELY TO FIND
SUBSTANTIVE REQUIREMENTS AND EMPLOY EQUITABLE
AND COMMON LAW PRINCIPLES IN CONSTRUING SECTION 106.
Some have argued that section 106 imposes no substan-
tive limits and is instead merely a grant of federal juris-
diction to permit the courts to enforce federal common law
remedies. In light of the statutory text and the Milwau-
kee II decision (City of Milwaukee v. Illinois, 451 U.S. 304
(1981)), however, courts eventually are likely to reject
this position and instead view section 106 as establishing
substantive standards, interpreted in light of prevailing
equitable and common law principles.
A. The Courts Are likely To Construe Section 106 as
Substantive Rather than Solely Jurisdictional.
In section 106 cases to date, defendants have argued
that section 106 does nothing more than provide a grant of
federal jurisdiction to enforce existing common law nuisance
remedies.8 Certainly the statutory text of section 106
See, e.g., Motion of Defendant Gould, Inc. to Dismiss
the Amended Complaint, United States v. Wade, No. 79-1246
at 8, (E.D. Pa. 1982) (motion filed Feb. 4, 1982); Memoran-
dum in Reply to Plaintiff's Response to Motion to Dismiss,
United States v. Outboard Marine Corp., No. 78-C-1004 at 2,
8, (N.D. 111. 1982).
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iv-a
does not answer this question definitively either way. To
be sure, section 106 is considerably more detailed than the
normal jurisdictional provision establishing a federal cause
of action.9 Nevertheless, several courts (at least prior
to Milwaukee II) have held that a similar emergency provi-
sion under RCRA was solely jurisdictional.10
The legislative history is silent on the issue. None
of the predecessor bills contained a provision closely
comparable to section 106,11 and since there was no confer-
ence report on the compromise bill, the only relevant legis-
lative history is the floor debate on the compromise. But
with the exception of a brief discussion of the damages for
disobedience of a section 106 order,12 there was no mention
of section 106 on the House or Senate floor.
The argument that section 106 is solely jurisdictional
thus rests almost exclusively on two decisions under section
9 Compare 28 U.S.C. § 1331 (federal jurisdiction); § 1337
(antitrust action); and § 2201 (declaratory judgment).
10 See, e.g., U.S. v. Midwest Solvent Recovery, Inc.,
484 F. Supp. 138 (D. Ind. 1980); U.S. v. Solvents Recovery
Service of New England, 496 F. Supp. 1127 (D. Conn. 1980).
11 For example, the predecessor bills had no "imminent and
substantial danger" requirement, did not authorize injunc-
tive relief, and contained no direction that a court should
"grant such relief as the public interest and the equities
of the case may require." See S. 1480, § 3(b); H.R. 7020,
§ 3041(a)(2).
12 See 126 Cong. Rec. S15008 (daily ed. Nov. 24, 1980)
(remarks of Senator Stafford).
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IV-9
7003, the comparable provision of RCRA also enacted by the
96th Congress.13
The first, United States v. Midwest Solvent Recovery,
Inc.. 484 F. Supp. 138, 143-44 (D.Ind. 1980), held that the
"imminent and substantial endangerment" provision of RCRA
section 7003 was simply an evidentiary prerequisite, provid-
ing federal jurisdiction and allowing the government to
prosecute actions under federal common law. The second
case, United States v. Solvents Recovery Service of New
England, 496 F. Supp. 1127 (D.Conn. 1980), reached a similar
conclusion, holding that section 7003 was too vague to serve
as a source for substantive standards:
Section 7003(a) reads:
Notwithstanding any other provision of
this Act, upon receipt of evidence that
the handling, storage, treatment, trans-
portation or disposal of any solid waste
or hazardous waste may present an immi-
nent and substantial endanqerment to
Kiilth or the environment, the Adminis-
trator may bring suit on behalf of the
United States in the appropriate dis-
trict court to immediately restrain any
person contributing to such handling
storage, treatment, transportation or
disposal to stop such handling, storage,
treatment, transportation or disposal or
to take such other action as may be
necessary. The Administrator shall
provide notice to the affected State of
any such suit. The Administrator may
also after notice to the affected State,
take other action under this section
Including, but not limited to, issuing
such orders as may be necessary to pro-
tect public health and the environment.
(emphasis added). Compare with § 106(a), supra n.5.
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IV-10
Section 7003 provides a jurisdictional
basis and an enforcement device for the
government .... However, section 7003
does not itself establish standards for
determining the lawfulness of the con-
duct of those sued by the United States.
In an appropriate case, those standards
might be found elsewhere in RCRA or in
the regulations promulgated pursuant to
RCRA, or in the federal common law of
nuisance, which is evolving to meet a
variety of pollution problems.
496 F. Supp. at 1133-34.
The argument that sections 106 or 7003 are merely
jurisdictional is much more difficult to maintain, however,
in the wake of the Supreme Court's decision in Milwaukee II•
There, the Court held that the federal common law of nui-
sance no longer exists for the water pollution issues pre-
sented in that case, because a comprehensive regulatory
program was adopted by Congress in the Federal Water Pollu-
tion Control Amendments of 1972.
The only section 106 case to address this issue
squarely since Milwaukee II, United States v. Outboard
Marine Corp., 18 E.R.C. (BNA) 1087 (N.D. 111. 1982), held
that the section carried "certain substantive requirements."
18 E.R.C. at 1090. The court recognized that section 106
was vague but held that the interpretation that the section
was solely jurisdictional "seems to be foreclosed by
Milwaukee II." Id. United States v. Wade, 546 F. Supp. 785
(E.D. Pa. 1982), though not directly addressing the issue,
also implicitly treated section 106 as substantive.
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IV-11
Section 7003 cases decided since Milwaukee II have also
held that provision to be substantive as well as jurisdic-
tional. The leading case is United States v. Price, 523 F.
Supp. 1055, 1069 (D.N.J. 1981), aff'd, No. 82-5030, slip op.
(3d Cir. September 14, 1982), which relied expressly on
Milwaukee II in dismissing a federal common law nuisance
claim and attributing substantive standards to section 7003.
Similarly, in United States v. Diamond Shamrock Corp.,
17 E.R.C. (BNA) 1329, 1332-33 (N.D. Ohio 1981), the court
dismissed a claim for injunctive relief based on the federal
common law of nuisance, observing that since Milwaukee II
federal common law remedies are unavailable in fields like
ftCRA, which are occupied by federal legislation. The court
Upheld a section 7003 claim, expressly finding the section
to be both jurisdictional and substantive.14
Several other pre-Milwaukee II decisions have granted
belief under section 70"03 without reference to common law
concepts, implicitly regarding section 7003 as a source of
substantive standards. See, e.g., United States v. Hardage,
No. Civ-80-1031-W, slip op. (W.D.Okla. Sept. 29, 1982);
United States v. Vertac Chemical Corp., 489 F. Supp. 870
(D.Ark. 1980). Moreover, even if section 7003 were held to
°e jurisdictional only, section 106 may be substantive. For
example, the court in Midwest Solvent Recovery, in holding
section 7003 jurisdictional only, relied primarily on the
fact that section 7003 is among the "miscellaneous" provi-
sions of RCRA, rather than among the "group of provisions
which sets down duties." 484 F. Supp. at 143. Section 106,
contrast, appears to be an integral part of the statutory
scheme of Superfund. Thus, the recent opinion in United
States v. Reilly Tar & Chemical Corp., observes that "[s]ec-
tion 106(a) is broader in scope than section 7003 of RCRA."
546 F. Supp. 1100, 1113 (D. Minn. 1982). The court there
did not decide the jurisdictional/substantive issue, holding
instead that even if section 106 were only jurisdictional,
lt should not be limited to interstate effects, the only
controversy in the defendant's motion to dismiss. Id.
46
-------
IV-12
It may matter little to the ultimate resolution of
cases, however, whether or not section 106 is substantive as
well as jurisdictional. In Solvents Recovery Service, which
found section 7003 to be jurisdictional only, the court
suggested that substantive standards should be filled in by
reference to the remainder of the Act and the federal common
law. 496 F. Supp. at 1134. But as discussed below, not-
withstanding Milwaukee II, these same sources almost cer-
tainly will be employed to define the contours of section
106 even if it is held to be substantive.
B. Courts Will Rely on Statutory Requirements
and General Equitable Principles To Elaborate
the Substantive Standards of Section 106.
The remainder of this chapter details the substantive
standards likely to be employed by the courts under section
106. As an introduction to the subsequent discussion, those
standards are briefly summarized below.
1. Substantive standards for section 106 are
found in the statutory requirement of
"imminent and substantial endangerment,"
general equitable principles, the
requirement that relief be consistent
with the "public interest and equities
of the case," and the NCP.
Section 106's substantive standards derive directly
from the statutory text and established principles of statu-
tory construction. The first such standard, found on the
face of section 106, is that the government demonstrate that
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IV-13
there is or may be an "imminent and substantial endanger-
ment" at the site. As discussed in Part III-A below, Con-
gress intended that this "imminent and substantial endan-
germent" requirement limit the use of section 106 to extra-
ordinary situations.
A second substantive requirement of section 106 derives
from general equitable principles. As discussed in parts
III-B and III-C below, the Supreme Court has stressed that
statutory injunctive authority, such as section 106, is
always governed by the traditional requirements for equi-
table relief. These traditional equitable requirements
preclude suit against generators in most instances and
require in all cases that the government show that its legal
remedies are inadequate.
The third prerequisite to use of section 106 is that
the requirements of the National Contingency Plan be satis-
fied. This restriction is dealt with in Part IV-A, which
describes how the statute and its legislative history limit
section 106 injunctive authority to actions in accordance
with the NCP.
The fourth and final major substantive requirement of
section 106 is that relief be consistent with the "public
interest and the equities of the case." This limitation
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IV-14
reinforces the need to apply general equitable principles15
and invokes public interest balancing considerations, such
as those found in the state common law of nuisance.16
These principles are addressed in Parts IV-B and IV-C.
Taken together, these substantive standards provide a
coherent, although relatively limited, role for section 106
in the overall statutory scheme.
2. The same substantive standards also apply
to section 106 administrative orders.
Section 106 does not unambiguously apply the standards
noted above to administrative orders, but imposing such
requirements is the only reasonable construction of sec-
tion 106.
15 See, e.g., Pepper v. Litton, 308 U.S. 295, 304-05
(1939), using the term "equities of the case" in the Bank-
ruptcy Act as support for courts to apply "the principles
and rules of equity jurisprudence." See also Manufacturers
Trust Co. v. Becker, 338 U.S. 304, 310 (1949).
Likewise, the "public interest" is a traditional cri-
terion of equity. See, e.g., Yakus v. United States,
321 U.S. 414, 441 (1944); Virginia Ry. Co. v. System Federa-
tion, 300 U.S. 515, 552 (1937).
16 This point was expressly made in the recent Reillv Tar
decision where the court observed that the "portion of the
statute granting the court the power to grant such relief as
•the equities of the case may require' may suggest that
reference to federal common law nuisance principles is
appropriate." 546 F. Supp. at 1113. The use of nuisance
law principles also finds support in the legislative history
of section 7003 of RCRA. See S. Rep. No. 172, 96th Cong./
1st Sess. 5 (1979).
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IV-15
First, section 106 explicitly refers to administrative
orders as "other action under this section,11 thereby
directly incorporating the requirements of section 106
outlined above.
Second, the Administrative order authority of section
106 is potentially a summary, ex parte proceeding. As such,
it logically should have a higher threshold requirement,
reserved for cases where a site presents such a dire emer-
gency that immediate action is required.
Finally, failure to apply the general section 106
standards to administrative orders would raise grave consti-
tutional issues under the delegation doctrine. Absent the
standards noted above, there would be no "intelligible
principle" to guide administrative decisions and to serve as
a basis for judicial review. See Panama Refining Co. v.
Ryan, 293 U.S. 388, 430 (1935); Industrial Union Dep't v.
American Petroleum Institute, 448 U.S. 607, 685-87 (1980)
(concurring opinion of Justice Rehnguist).17
17 The better course would be for the courts to follow the
usual canons of construction by construing section 106
reasonably to avoid having to decide the unconstitutional
delegation issue. See, e.g., Industrial Union Dep't v. API,
448 U.S. at 646; Nat'l Cable Television Ass'n v. United
States, 415 U.S. 336, 341-43 (1974).
-------
IV-16
III. SECTION 106 MAY BE USED ONLY IN CASES OF
"IMMINENT AND SUBSTANTIAL ENDANGERMENT" AND
WHEN THE GOVERNMENT MEETS THE TRADITIONAL
EQUITABLE REQUIREMENTS FOR INJUNCTIVE RELIEF.
A. The "Imminent and Substantial Endangerment"
Requirement Limits Section 106 to
Extraordinary Circumstances.
The Justice Department has consistently maintained that
sections 104 and 106 are alternative tools available to the
Administrator and that the availability of section 104 in no
way limits the availability of section 106.18 But both the
language and legislative history of Superfund, as well as
comparisons with other environmental statutes, show pre-
cisely the contrary — namely that that Congress purpose-
fully established a higher threshold for section 106 actions
than for section 104 cleanup. Consequently, section 106
should be reserved for situations of extraordinary endanger-
ment.
1. The statutory scheme indicates that section
106 deals only with extraordinary risks.
The plain language of Superfund mandates a higher
threshold for section 106 than for section 104. Section 104
is triggered: "[w]henever . . . any hazardous substance is
released or there is a substantial threat of such a release
18 Plaintiff's Memorandum Opposing Motion to Dismiss
Claim, United States v. Outboard Marine Corp., supra n.8, at
12-13 .
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IV-17
into the environment.1,19 "Hazardous substance," in turn,
is defined statutorily to include a list of chemicals spe-
cifically designated as hazardous or toxic by the EPA.20
Thus, section 104 requires only that the released substance
be "hazardous."21 Section 106, by contrast, requires both
that the chemical be a "hazardous substance" and that its
release or threatened release may pose an "imminent and
substantial endangerment" — on its face a much higher
standard than contained in section 104.
The far more detailed provisions of sections 104 and
107, as opposed to section 106, provide further support for
a narrow reading of the latter section. Thus, section 104
treats in extreme detail the nature and scope of authorized
cleanup operations, while section 107 sets forth a detailed
19 Section 104 also is triggered with "there is a release
or substantial threat of release into the environment of any
pollutant or contaminant which may present an imminent and
substantial danger to the public health or welfare . .
42 U.S.C. § 9604(a)(1).
20 Superfund defines "hazardous substances" to include
substances designated hazardous or toxic under § 311(b)(2)(A)
of the Clean Water Act, § 3001 of the Solid Waste Disposal
Act, § 307a of the Clean Water Act, § 112 of the Clean Air
Act, and § 7 of the Toxic Substances Act. 42 U.S.C. § 9601
(14).
21 A different reading of § 104 has been suggested, in
which the imminent and substantial endangerment requirement
is read to modify not only "any pollutant or contaminant"
but also "hazardous substances." The one court to address
this issue, however, held that "imminent and substantial
endangerment" did not modify "hazardous substances" under
section 104. United States v. Hardage, supra n.16.
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IV-18
scheme of private liability for government cleanups,
including specifications of who may be potential defendants
and what are the available defenses. Ey contrast, section
106 is terse and cryptic, containing none of the elaboration
provided by sections 104 and 107. Under these circum-
stances, it is difficult to imagine that Congress intended
section 106 as a parallel provision to be utilized by EPA
whenever it chooses not to use Fund financing to clean up a
site.2 2
2. The legislative history confirms
that section 106 should be reserved
for extraordinary circumstances.
Although the statutory structure and context imply
strongly that section 106 was intended for extraordinary
rather than routine use, much of the debate may turn on what
Congress meant by "imminent and substantial endangerment."
Unfortunately, the legislative history of Superfund does not
definitively resolve this issue. What legislative history
22 This approach has been followed under the Clean Water
Act, with EPA proceeding almost exclusively under its
detailed cleanup authority of § 311(c), rather than the
injunctive authority of §§ 311(e) and 504. See pp. IV-40 to
IV-41 infra.
The narrow scope intended for section 106 is also
demonstrated by the provision for treble damages for viola-
tion of a section 106 order. § 107(c)(3). Such provisions
are rare and generally reserved for "exceptional circum-
stances." See, e.g., Columbia Broadcasting System v. Zenith
Radio Corp., 537 F.2d 896, 899 (7th Cir. 1976) (patent
infringement case).
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IV-19
there is, however, does suggest that section 106 was not
intended for routine cleanup operations and that the "immi-
nent and substantial endangerment" test was added to the
compromise as a major substantive limitation on injunctive
actions.
As noted in chapter 1, the final act was the product of
a hasty compromise on the Senate floor.23 In the compro-
mise, the Senate added the "imminent and substantial" condi-
tion to the "endangerment" requirement of the predecessor of
section 106. Compare section 106(a) and S. 1480, § 3(d).
This revision itself signifies Congress' intent that section
106 be limited in scope, for otherwise there would have been
no reason to add the qualifying modifier "imminent and
substantial."
The floor debates are virtually silent with respect to
section 106. Some useful legislative history exists in the
House and Senate Committee reports on H.R. 7020 and S. 1480,
even though these reports apply to early versions of Super-
fund and not to the final Act. For example, the Senate
Report indicates that the predecessor of section 104, autho-
rizing the use of Fund monies to clean up sites, would be
2 3 one commentator described this compromise as the "last
minute scrambling of a lame-duck Congress." Vernon and
Dennis, Hazardous-Substance Generator, Transporter and Dis-
poser Liability under the Federal and California Superfunds,
2 J. Env. Law 67, 78 (1981). Similarly, the court in City
of Philadelphia v. Stepan Chemical Co., 544 F. Supp. 1135
(E.D. Pa. 1982), described the Act as "a severely diminished
piece of compromise legislation." I_d. at 1142.
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IV-20
the principal, if not exclusive, means by which cleanup
would take place.24
Moreover, Congress' general silence regarding section
106 is itself significant. Had Congress intended' section
106 to be used in typical circumstances, it surely would
have fleshed out the contours of that provision. Instead,
Congress' reticence can reasonably be explained only by an
expectation that section 106 would not be invoked absent
extraordinary circumstances.
To be sure, there are some passages in the Committee
reports that EPA might rely on to support a broader reading
for section 106. For instance, the House Report suggests
that the "imminent and substantial endangerment" standard
contained in the predecessor of section 104 should be "flex-
ible," and that the Administrator should have the power to
clean up sites even where there is no conclusive proof of an
emergency.25 Likewise, the Senate Report emphasizes that
the "paramount purpose" of the predecessor of section 104
was "the protection of the public health, welfare, and the
environment," and that it is therefore "preferable to err on
the side of protecting public health, welfare, and the
environment."26 Similarly, the Senate Report notes that
24 S. Rep. No. 848, 96th Cong., 2d Sess. 18 (1980).
25 H.R. Rep. No. 1016, (Part I), 96th Cong., 2d Sess. 28
(1980).
26 S. Rep. No. 848, 96th Cong., 2d Sess. 56 (1980).
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IV-21
the standard for cleanup under section 104's predecessor
provision "is intended to be a flexible one," and authorizes
administrative action before conclusive proof of endanger-
ment is available.27
All these comments, however, refer to the early ver-
sions of section 104 (section 3041(a)(1) in the House and
section 3(c)(1) in the Senate) and not to the early versions
of section 106 (section 3041(a)(2) in the House and section
3(d) in the Senate). The intent that the government have
considerable "flexibility" and latitude in cleaning up sites
with Fund money was carried forward in the final version of
section 104. But that says nothing about what Congress
intended in the context of injunctive relief under section
106. To the contrary, the very fact that Congress broadened
EPA's own cleanup authority using Fund money inevitably
tends to make section 106 injunctive actions less necessary.
3. Similar provisions in related statutes
also support a restriction of section
106 to extraordinary circumstances.
One possible explanation for Congress1 relative silence
about the meaning of the phrase "imminent and substantial
endangerment" in Superfund is that nearly identical language
is found in provisions of RCRA,28 the Clean Water Act
27 Id.
28 § 7003, 42 U.S.C. § 6973 (1976), as amended by Solid
Waste Disposal Act Amendments of 1980, § 25, Pub. L. No.
96-482, 94 Stat. 2334 ("may present an imminent and substan-
tial endangerment to health or the environment").
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IV-22
(CWA),2 9 Clean Air Act (CAA),30 and Safe Drinking Water
Act (SDWA).31 The legislative history and judicial con-
struction of these provisions have consistently limited the
government's authority to bring injunctive actions. More-
over, the fact that other statutes do not contain govern-
mental authority and resources comparable to Superfund may
be why Congress could have envisioned less need for injunc-
tive actions under Superfund.
The most helpful discussion of "imminent and substan-
tial endangerment is contained in the legislative history of
the SDWA. By "imminent," the House Report noted, the actual
health harm, as opposed to the exposure to the harmful
substance, need not be imminent. Hence, there is an immi-
nent and substantial endangerment "when there is an imminent
likelihood of the introduction into drinking water of con-
taminants that may cause health damage after a period of
latency."32
Congress went on to give examples of harms that it
considered "substantial:"
29 § 504, 33 U.S.C. § 1364 (1977) ("is presenting an
imminent and substantial endangerment to the health of
persons").
30 § 303, 42 U.S.C. § 7603 (1977) ("is presenting an immi-
nent and substantial endangerment to the health of persons").
31 § 1431, 42 U.S.C. § 300(i) (1976) ("may present an
imminent and substantial endangerment to the health of
persons").
32 H.R. Rep. No. 1185, 93rd Cong., 2d Sess. 36 (1974).
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IV-23
(1) a substantial likelihood that con-
taminants capable of causing adverse
health effects will be ingested by
consumers if preventive action is not
taken; (2) a substantial statistical
probability that disease will result
from the presence of contaminants in
drinking water; or (3) the threat of
substantial or serious harm (such as
exposure to carcinogenic agents or other
hazardous contaminants).33
To trigger the section, however, the exposure to harmful
substances must be significant as well as imminent. Conse-
quently, the "emergency" authority of SWDA should not be
used "in cases where the risk of harm is remote in time,
completely speculative in nature, or de minimis in
degree. "3 4
This legislative history may be construed as comporting
with the recent decision in Reilly Tar, where the court
accepted as true the allegations of plaintiffs' complaint to
the effect that the
wastes disposed of by Reilly Tar are
carcinogens and toxic [and that] . . .
[f]or over fifty-five years these wastes
were spilled, leaked and discharged
directly into the ground at the site,
and from there entered and continue to
enter the groundwater which is used as a
water supply for the City of St. Louis
Park and the surrounding area. The City
of St. Louis Park has already closed
five wells and the City of Hopkins has
closed one. Unless preventative mea-
sures are taken, the contaminants will
33
34
Id. (emphasis added).
Id.
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IV-24
continue to move through the leaching
and migration of groundwater into the
drinking water for the Minneapolis-
St. Paul metropolitan area.35
Under these circumstances, the court ruled that "it cannot
be said with positive assurance that there exists no immi-
nent and substantial endangerment.1,36
Decisions under other statutes provide guidance as to
the meaning of "imminent and substantial endangerment." The
two leading cases, Ethyl Corp. v. EPA37 and Reserve Mining
Co. v. EPA,38 were not decided under an "imminent and sub-
stantial endangerment" standard, but rather under a simpler
"endangerment" standard.39 Both Ethyl and Reserve Mining
acknowledge that the "term 'endangering1 . . . connotes a
lesser risk of harm than the phrase 'imminent and substan-
tial endangerment to the health of persons'. . .."40 Thus,
35 546 F. Supp. at 1110.
36 Id. at 1114.
37 541 F.2d 1 (D.C- Cir. 1976).
38 514 F.2d 492 (8th Cir. 1975).
39 Ethyl was decided under § 211(c)(1)(A) of CAA, autho-
rizing the Administrator to "control or prohibit the manu-
facture, introduction into commerce, offering for sale, or
sale of any fuel or fuel additive ... if any emission
products of such fuel or fuel additive will endanger the
public health or welfare." 42 U.S.C. § 1857f-6c(C)(1)(A).
Reserve Mining was decided under §§ 1160(c)(5) and (g)(1) of
the 1970 Federal Water Pollution Control Act, authorizing
action "in the case of pollution of waters which is endan-
gering the health or welfare of persons . . .."
«° Reserve Mining, 514 F.2d at 528 (dicta); see also
Ethyl, 541 F.2d at n.36 (dicta).
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IV-25
the standard of section 106 of Superfund is stricter than
the standard enunciated in Ethyl and Reserve Mining, and the
conditions which satisfy the "endangerment" standard in
Ethyl and Reserve Mining are necessary but not sufficient to
satisfy the "imminent and substantial endangerment" standard
of section 106.
According to these decisions, endangerment is "some-
thing less than actual harm. When one is endangered, harm
is threatened; no actual injury need occur."41 The courts
and Congress agree that endangerment requires proof of risk
of harm, not proof of actual harm.42
But how great a risk must exist for there to be immi-
nent and substantial endangerment? The courts, in setting
down broad guidelines, have held that endangerment is com-
posed of two elements: "risk and harm, or probability and
severity."43 Probability and severity are reciprocally
related, so that "the public health may properly be found
endangered both by a lesser risk of a greater harm and by a
greater risk of a lesser harm."44
41 Ethyl, 541 F.2d at 13 (emphasis in original). See also
Reserve Mining, 514 F.2d at 529; United States v. Vertac
Chemical Corp., 489 F. Supp. 870, 885 (E.D. Ark. 1980).
42 See, e.g., Ethyl, 541 F.2d at 17; Reserve Mining,
514 F.2d at 528; Vertac, 489 F. Supp. at 885; H.R. Rep. No.
1185, 93rd Cong., 2d Sess. 35-36 (SDWA provision designed to
prevent hazardous conditions).
43 Ethyl, 541 F.2d at 18. See also Reserve Mining, 514
F.2d at 520.
44 Ethyl, 541 F.2d at 18.
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IV-26
The reciprocal relationship of risk and harm was cen-
tral to the decision in United States v. Vertac Chemical
Corp.45 There, the leak of a relatively small amount of
dioxin — a highly toxic substance — into the environment,
was found to be imminent and substantial endangerment
because: "While there may be a low probability of harm from
dioxin as defendants contend, there is a serious and dire
risk from exposure to dioxin should the hypothesis advanced
by the plaintiffs prove to be valid."46
Under this analysis, the more toxic the substance
involved, the smaller, or less likely to spread, the actual
or threatened release must be. The court noted in Ethyl,
however, that this inverse proportional rule "must be con-
fined to reasonable limits." 541 F.2d at n.32. Citing
Carolina Environmental Study Group v. United States,47 the
court said that even in the case of a possible nuclear
reactor accident, "a disaster of ultimate severity and
horrible consequences," some amount of risk must be shown.
Conversely, "even the absolute certainty of de minimis harm
might not justify government action." Id.
Taking these decisions together, one thing is clear —
some meaningful exposure to toxic substances must be shown.
4 5
46
4 7
See note 41 supra.
489 F. Supp. at 885.
510 F.2d 796 (D.C. Cir. 1975).
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IV-27
This is supported even by the Vertac decision, where the
court emphasized the importance that "the extent of expo-
sure" be considered and accordingly held that even rela-
tively high dioxin readings in unburied containers did not
present an "imminent and substantial endangerment," because
there was little if any likelihood of contamination from
these containers. 489 F. Supp. at 879, 876.
While Congress has never provided a precise formula for
quantifying imminence and substantiality in determining
whether the endangerment standard is met, the legislative
history of the Clear Air Act and the Safe Drinking Water Act
provides further guidance as to the intended meaning of
"imminent." Thus, imminence should be considered with
respect to the amount of time required to prepare adminis-
trative orders or court papers, to file and prosecute suits,
and to permit issuance and enforcement of administrative or
court orders.48 Some courts have added that imminence does
not always mean immediacy — that the "imminence of a hazard
does not depend on the proximity of the final effect, but
may be proven by the setting in motion of a chain of events
which could cause serious injury."49
48 H.R. Rep. No. 294, 95th Cong., IstSess. 328 (1977)
(CAA); H.R. Rep. No. 1185, 93rd Cong., 2d Sess. 36 (1974)
(SDWA).
49 United States v. Hardage, supra note 16. See also
Environmental Defense Fund v. EPA, 465 F.2d 528, 535 (D.C.
(Footnote 49 continued on next page.)
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IV-28
One of the most helpful judicial constructions of the
phrase "imminent and substantial endangerment" is found in
United States v. Hardaqe.50 There, the court interpreted
RCRA section 7003, the provision most similar to section
106, to establish a high threshold, defining "imminent and
substantial endangerment" to mean "that sort of emergency
situation in which application of the general provisions of
the Act would be too time-consuming to effectively ward off
the threatened harm to health or environment." Slip op.
at 3 (emphasis added).
Assuming Hardaqe is correct, the "imminent and substan-
tial danger" requirement in Superfund should be stricter
than in the analogous acts, because Superfund provides
effective alternate emergency remedies.51 Although the
(Footnote 49 continued from previous page.)
Cir. 1972). Fletcher v. Bealey, 28 Ch. 688 (1885), an
English common law nuisance case, held that the "danger"
from a waste disposal site "is not imminent, because it must
be some years before any such quantity of the liquid will be
found issuing from the heap as would pollute the Irwell to
the detriment of the Plaintiff." The court also stressed
the absence of evidence that release was probable and the
ability to promptly discover and respond to any release that
did occur. See Fiss, Injunctions 5, 8 (1972).
50 See note 16 supra.
51 This narrowing of section 106 is disputed by the deci-
sion in Reilly Tar, which held that "the availability of
other response authorities for dealing with chronic and
recurring pollution problems does not preclude the simulta-
neous invocation of the imminent hazard provision of section
(Footnote 51 continued on next page.)
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IV-29
Ethyl court used the interpretation of endangerment in one
statute to help interpret another statute,52 that process
seems less compelling in the case of section 106. In most
of the other environmental statutes, there is but one emer-
gency provision, triggered by imminent and substantial
endangerment.53 Superfund, however, has two emergency
provisions: sections 106 and 104. The standard for
invoking section 106 should be higher than the standard in
the other statutes, since there is an alternative means of
dealing with emergencies. Even if a section 106 action is
not available, releases can be cleaned up under section 104.
Consequently, many releases or threatened releases will
not rise to an "imminent and substantial endangerment"
invoking section 106. This issue is heavily fact-dependent,
however, and the facts surrounding abandoned dump sites will
often be murky. It may therefore sometimes be difficult to
sustain this issue in pretrial motions. By contrast, the
following sections focus on substantive requirements that
(Footnote 51 continued from previous page.)
106." 546 F. Supp. at 1114. Nor did Outboard Marine, where
the court gave § 106 a "broad reading," discuss the availa-
bility of § 104 cleanup. See 18 E.R.C. at 1091. In United
States v. Wade, however, the court held that the presence of
section 104 cleanup authority significantly limited the
scope of section 106. See pp. IV-30-31, 37 infra.
52 Ethyl, 541 F.2d at 17.
53 §ee, e.g. , 42 U.S.C. § 6928 (RCRA); 42 U.S.C. § 7603
(CAA); 42 U.S.C. § 300i (SDWA).
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IV-30
raise primarily legal issues that generators may success-
fully maintain in motions to dismiss.
B. Under Equitable Principles, Generators
Usually Will Not Be Proper Party Defendants.
Generators who do not own or operate a site should not
be subject to section 106 cleanup injunctions. United
States v. Wade, the only case to explore this issue in any
detail, held that generators should seldom, if ever, be
proper defendants in section 106 actions. In Wade, the
court began by analyzing RCRA and ruled that "a court may
not base a decision to impose liability on such a poten-
tially vast group of defendants as off-site generators of
hazardous waste on the basis of the conflicting and frag-
mentary legislative history of section 7003." 546 F. Supp.
at 791.
Section 106, of course, provides even less guidance as
to proper defendants than section 7003 of RCRA. The Wade
court thus stressed that there was "no case in which these
provisions [§§ 106 & 7003] have ever been used to confer
liability on past off-site generators, parties who generated
hazardous wastes which were transported to a dump site by
others." Id. at 787. In short, "[t]he language of section
106 gives no hint of an intent to confer liability on past
generators. Like section 7003 of RCRA, and, significantly,
unlike section 107, it is written in the present tense."
Id. at 794.
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IV-31
To provide a "harmonious" interpretation of Superfund
as a whole, the Wade court recognized that "Congress
intended each provision to serve a specific purpose." Id.
And "[w]here Congress after extensive debate, has clearly
designated [in section 107] its choice of a method for
obtaining money damages from past off-site generators whose
waste products have contributed to the critical problem
posed by abandoned chemical dumps, it is the role of EPA and
this Court to carry out the unambiguous legislative intent."
Id. The court went on to hold, "on the basis of the statu-
tory language, its context, and the legislative history,
that past off-site generators are not proper defendants"
under section 106. at 787.54
The Wade decision is consistent with general equitable
principles, which are best illustrated by Naughton v.
Bevilacqua, 605 F.2d 586 (1st Cir. 1979). There, a resident
in a mental hospital brought suit against the director of
the hospital and others to enjoin a drug treatment plan.
The court dismissed the suit against the director, noting
that he had "never prescribed, administered, or directed the
administration of any drug" to the plaintiff and therefore
bore only a "remote relationship" to the complained-of
54 But see U.S. v. Reilly Tar & Chemical Corp., 546 F.
Supp. at 1113: "Section 106(a) of CERCLA contains no limi-
tations on the classes of persons within its reach." The
requirements of equity, were not raised in Reilly Tar,
however, and its holding applied only to a prior site owner
and not an off-site generator.
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IV-32
conduct. 605 F.2d at 588-89. The court thus held that a
party could not be enjoined where he had "no knowledge or
control" over the incidents giving rise to the complaint.
605 F.2d at 589.55
Likewise, in the securities context, a defendant
director "may be enjoined . . . [only] if such person had an
affirmative duty to know what was occurring with respect to
corporations in which he had a position of control and if
his action or inaction had a tendency to aid or abet the
violation." SEC v. National Bankers Life Insurance Co. .
334 F. Supp. 444, 456 (N.D. Tex. 1971), aff'd, 477 F.2d 920
(5th Cir. 1973). See also SEC v. Coffey, 493 F.2d 1304,
1317 (6th Cir. 1974); SEC v. Advance Growth Capital Corp..
470 F.2d 40, 52 (7th Cir. 1972).
In sum, general equitable considerations support the
holding in Wade that a defendant may not be enjoined where
he bears a "remote relationship" to and has not participated
directly in the objectionable conduct. In most instances
under Superfund, the hazardous condition at the site will be
55 A similar result limiting enjoinable parties was
reached in United States v. Clarksdale King & Anderson Co.,
288 F. Supp. 792 (N.D. Miss. 1965). A property owner had
leased a restaurant to another party, which violated the
Civil Rights Act, and the Justice Department sued both the
operator and the property owner. The court refused to
enjoin the property owner for the discriminatory practices
of the restaurant, because he "had disassociate[d] [him]self
from participation in [its] operation." 288 F. Supp. at 796.
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IV-33
unrelated to a generator's conduct and accordingly, such
generators should be immune from injunctive relief.56
On similar grounds, courts have been reluctant to
enjoin defendants who do not own the operations at which an
injunction would be directed. Thus, in United States v.
Gulf-State Theaters, 256 F. Supp. 549 (N.D. Miss. 1966), the
government sued to halt racially discriminatory practices by
local theater owners and the regional chain that provided "a
major portion of the ordinary managerial functions" of the
theaters. Id. at 553. The court refused to enjoin the
chain, because it did "not own any theaters, nor does it
have any proprietary interest of any kind in, or any power
of control over, any theaters." Id.
A similar result was reached in Greenhouse v. Greco,
368 F. Supp. 736 (W.D. La. 1973), where the superintendent
56 This result is consistent with the decision in Ewell v.
Petro Processors of Louisiana, 364 So.2d 604 (Ct. App. La.
1978 ). There, the court declined to hold a number of gene-
rators liable in nuisance and stressed that the record did
"not support the conclusion that the work done by Petro
Processors cannot be done safely." Id. at 607.
The court in Ewell went on to examine the degree of
generator participation in the hazard. With respect to all
but one generator, the court found that the site operator
"received no instructions as to the method of carrying out
the assigned task or the disposal of waste material," and
therefore held them not liable. Id. at 606. One generator,
however, was "aware of the leakage at the pits and continued
to dump hazardous material at that site." T^e c0111"11
found this knowledge sufficient to hold the generator
liable. Whether such a generator would be subject to an
injunction under section 106 of Superfund remains an open
question.
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IV-34
of parochial schools, the local diocese and others were sued
to compel integration. The action was dismissed against the
superintendent and the diocese, with the court stressing
that neither "owns or controls any school properties or
equipment or has any independent authority to operate any
parochial schools." Id. at 738. Rather:
Since each of the individual church
corporations has legal title to the
properties and equipment and the sole
authority and financial responsibility
for the day-to-day operation of each
school, only the individual church
corporation can respond to the judicial
mandate sought in this proceeding ....
Id. at 739.
The Justice Department, of course, may argue for other
sources of law, such as section 107, where generators are
more likely to be considered proper defendants. Section
107(a) explicitly includes at least some generators as
potential defendants and, if courts were to rely on this
provision, generators might be amenable to suit under sec-
tion 106. But the failure to reference section 107 in
section 106 and the inability of such generators to control
action at inactive sites strongly suggests that generators
are not proper parties in most abatement actions under
section 106.
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IV-35
C. Equitable Principles Limit Section 106
Injunctions to Those Rare Instances When
Section 104 Cleanup Authority Is Inadequate.
In addition to limiting parties who may be proper
defendants, equitable principles also preclude use of sec-
tion 106 injunctions where the government has an adequate
remedy at law. As discussed below, the government's section
104 cleanup authority should generally prove an adequate
remedy at law and preclude injunctive relief under section
106.
1. Equitable relief may issue only where
the government has demonstrated the
inadequacy of its legal remedies.
Under equitable principles, an injunction may issue
only when a plaintiff has demonstrated the inadequacy of his
legal remedies.57 In Weinberger v. Romero-Barcelo, 102
S.Ct. 1798 (1982), the Supreme Court held that this require-
ment applies even when a federal statute authorizes injunc-
tive relief, as in section 106. Under this principle, the
57 For section 106 purposes, the basic legal standards
will be comparable whether the government is seeking a
preliminary injunction, as will often be the case, or a
permanent injunction. For both forms of relief, the govern-
ment must show the absence of an adequate remedy at law.
For a preliminary injunction, the government also must show
its likelihood of eventual success on the merits and that
relief is in the public interest, requirements that parallel
the conditions for permanent relief. See, e.g., Virginia
Petroleum Jobbers Ass'n v. FPC, 259 F.2d 921 (D.C. Cir.
1958); SK&F, Co. v. Premo Pharmaceutical Laboratories, Inc.,
625 F.2d 1055 (3d Cir. 1980).
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IV-3 6
burden is squarely on the government to show that its legal
remedies are inadequate — a burden that will be difficult
to satisfy in most cases, given EPA's broad authority under
sections 104 and 107.
In construing the injunctive relief provisions of the
Clean Water Act, the Supreme Court stressed in Romero-
Barcelo that it "has repeatedly held that the basis for
injunctive relief in the federal courts has always been
irreparable injury and the inadequacy of legal remedies."
102 S.Ct. at 1803. See also Hecht Co. v. Bowles, 321 U.S.
321, 329 (1944); U.S. v. Price, 523 F. Supp. at 1066-68.
The private plaintiffs in Romero-Barcelo sought an
injunction against the Navy, which was undeniably dis-
charging wastes in violation of the CWA. Plaintiffs con-
tended, in view of the statutory violation, that the stat-
ute's injunctive relief provision should be invoked automat-
ically and that they were not required to meet the tra-
ditional equitable requirements for injunctive relief. The
Court held, however, that it would uphold an injunction
against the Navy's activity only if the plaintiffs met all
the traditional equitable requirements, despite the statu-
tory violation.
In so holding, the Court characterized an injunction as
an "extraordinary remedy" and declined to issue an injunc-
tion due to the plaintiffs' failure to demonstrate irrepa-
rable injury. In this connection, the Court observed that:
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IV-37
An injunction is not the only means of
ensuring compliance. The FWPCA itself,
for example, provides for fines and
criminal penalties.
102 S.Ct. at 1804.58 Since the plaintiffs had made no
attempt to demonstrate the inadequacy of these remedies,
injunctive relief was denied.
The adequacy of legal remedies under Superfund is even
clearer than under the Water Act. CWA's fines and criminal
penalties are, at best, incentives to undertake cleanup.
The section 104 authority for the government to clean up is
much broader and far more adequate. Indeed, under section
104 the government can accomplish everything that it could
do under section 106. Moreover, the government will often
be able to recover its costs in actions against responsible
parties under section 107.
For these reasons, the availability of cleanup ,
authority under section 104, along with recovery of costs
incurred under section 107, generally should provide the
5S It is well-established that plaintiffs in equity must
demonstrate the inadequacy of their legal remedies. See
Beacon Theaters, Inc. v. Westover, 359 U.S. 500, 506-07
(1959); Hecht Co. v. Bowles, 321 U.S. at 329. Thus, "equi-
table relief will not be granted where an adequate remedy at
law exists, [and] [m]oney damages if determinable with a
reasonable degree of certainty constitute such an adequate
remedy." SCM Corporation v. Xerox Corporation, 507 F.2d
358, 363 (2d Cir. 1974). See also Van Arsdel v. Texas A&M
University, 628 F.2d 344, 346 ~(5th Cir. 1980); Fox Valley
Harvestore, Inc. v. A.O. Smith Harvestore Products, Inc.,
545 F.2d 1096 (7th Cir. 1976).
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IV-38
government with an adequate legal remedy, thereby signifi-
cantly circumscribing the availability of injunctive relief
under section 106.
Although not expressly invoking this doctrine, the
court in Wade denied injunctive relief in part due to tradi-
tional equitable considerations. The government sought an
injunction requiring defendants "to pay the cost of drawing
up and implementing a plan" for cleanup, which the court
described as "transparently a prayer for money damages."
546 F. Supp. at 792. Noting that a "plaintiff cannot trans-
form a claim for damages into an equitable action by asking
for an injunction that orders the payment of money," the
court denied relief and directed the government to pursue
its legal remedies if it sought such payment. Id.
In Price, the district court reached the same result on
a similar request under section 7003, holding that "an order
compelling defendants to fund such a study would not be an
appropriate form of preliminary injunctive relief." 523 F.
Supp. at 1067. The government in Price also sought to
compel defendants to provide alternative safe water supply
sources in the event of contamination, relief expressly
provided by the SDWA. Nonetheless, the court held that this
too was not appropriate for preliminary injunctive relief.
Id. at 1068. The court thus noted that the true issue "is
simply who will bear the cost of the alternate water sup-
ply," id., and denied relief on the grounds that such issues
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IV-39
were properly resolved in a subsequent decision granting or
denying damages.
The Third Circuit affirmed this holding as an appro-
priate exercise of the district court's discretion, but
provided a broader view of when injunctive relief was appro-
priate under section 7003 of RCRA. United States v. Price,
No. 82-5030 (3d Cir. Sept. 14, 1982). Thus, according to
the Third Circuit, "even though funding a diagnostic study
would require payments of money, it may still be an appro-
priate form of preliminary relief if the traditional bal-
ancing process tips decidedly in favor of plaintiff."
Slip op. at 15.
The circuit court criticized the automatic assumption
that payment of money is per se unavailable in equity, and,
while noting that such injunctions should be "rare,"
stressed that the "test is still one of balancing the com-
peting interests." Slip op. at 14 (citations omitted). In
so holding, the court reaffirmed that injunctive relief
under RCRA must be guided by traditional principles. And
although the Price court suggested that funding such a study
might be appropriate under RCRA section 7003, it did not
address the issue in the context of Superfund, where section
104 provides a viable alternative to injunctive relief.59
59 In some limited circumstances, of course, the govern-
ment may lack an adequate remedy at law and section 106
(Footnote 59 continued on next page.)
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IV-40
2. The legislative history of section 106 and
comparable provisions in other statutes
confirm that injunctions should be limited
to cases where section 104 is inadequate.
The language of section 106 must be read in the context
of legislative intent. Congress drafted section 106 with a
background understanding of how analogous provisions in
other statutes had operated. The history of comparable
provisions makes clear that "imminent and substantial endan-
germent" authority should be used sparingly for truly extra-
ordinary hazards that cannot be dealt with by other provi-
sions .
Superfund was patterned in substantial part on the CWA.
In Senator Randolph's words, the Act is "modeled upon the
experience with the Clean Water Act's spill response pro-
gram."60 The experience under the spill response program
(Footnote 59 continued from previous page.)
would be available. As noted in Wade, section 106 may be
used to enjoin ongoing disposal operations. In other cases
a state cannot or will not meet the section 104(c) and (d)
prerequisites for federally funded remedial action, or at
some time in the future the Fund may be exhausted and the
government may lack the necessary resources for a section
104 response action. The government's legal remedy may also
be inadequate when a site is exclusively in the defendant's
control and the defendant has a unique ability to effect
cleanup. Absent proof of these or similar circumstances,
however, section 104 will generally constitute an adequate
remedy at law.
60 126 Cong. Rec. 14965 (daily ed. Nov. 24, 1980). See
also S. Rep. No. 848, 96th Cong., 2d Sess. 1 (1980), stating
that S. 1480 "has its roots in the liability and funding
provisions provided in the Clean Water Act of 1972."
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IV-41
was that the "imminent and substantial endangerment" injunc-
tive relief provision was used rarely, if at all. Between
1972 (when CWA was amended to give it the response provi-
sions on which Superfund was based) and the 1980 congres-
sional deliberations regarding Superfund, there were no
reported cases in which the government sought to invoke
CWA's "imminent and substantial danger" provisions to
require a cleanup.61
Likewise, similar provisions in other statutes call for
the same sparing use of "imminent and substantial endanger-
ment" authority. The House Report on the Safe Drinking
Water Act stressed the limits inherent in this term:
In using the words 'imminent and sub-
stantial endangerment to the health of
persons,' the Committee intends that
this broad administrative authority not
be used when the system of regulatory
authorities provided elsewhere in the
bill could be used adequately to protect
the public health.62
The House Report on section 108 of the Clean Air Act, the
original "imminent and substantial endangerment" provision,
likewise emphasized that it was "not intended as a substi-
tute procedure for chronic or generally recurring pollution
61 A possible exception is Vertac, which involved § 1364
as well as RCRA § 7003, but which was roughly contempora-
neous with — not prior to — congressional deliberations.
Though Reserve Mining was decided in 1975, it was decided
based on the 1970 version of CWA.
62 H.R. Rep. No. 1185, 93rd Cong., 2d Sess. 35 (1974).
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IV-42
problems, which should be dealt with under the other provi-
sions of the Act."63
The court in Solvents Recovery applied this same inter-
pretation to section 7003 of RCRA, holding that "situations
which do not present time emergencies are better dealt with
through the more comprehensive, if more cumbersome, provi-
sions of RCRA and the EPA regulations promulgated thereunder
than in an action under Section 7003." 496 F. Supp. at 1143
n.29. U.S. v. Hardage employed a similar interpretation of
RCRA, limiting section 7003 to "that sort of emergency
situation in which application of the general provisions of
the Act" would be inadequate to protect the public health.
Slip op. at 3.
This interpretation of section 106 of Superfund is
strongly supported by the recent decision in United States
v. Wade. There, the court found it "astonish[ing]" that
"the government here has chosen to ignore those provisions
of the statute which give it clear authority to remedy the
pollution problem at the Wade site and recover its costs
from Gould and the other off-site generators, and has
instead chosen to sue under" section 106. 546 F. Supp.
at 787.
In denying relief under section 106, the Wade court
emphasized that "Congress intended each provision to serve a
H.R. Rep. No. 728, 90th Cong., 1st Sess. 119 (1967).
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IV-43
specific purpose," and that "Congress intended section
106(a) to be used . . . where hazardous waste was currently
being discharged or threatened to be discharged 'from a
facility' and where such discharge could be stopped by an
injunction.11 at 794. The court noted that this
"reading of section 106 as applicable to current emergencies
where responsible parties may be ordered to comply with an
injunction renders the section a complement to section 104
and 107 which are so clearly addressed to the present health
problems caused by abandoned sites." Id.64
In short, section 106 establishes three important
preconditions for relief: the government must prove the
existence of an "imminent and substantial endangerment,"
that named defendants are potentially liable in equity and
that it lacks an adequate remedy at law. In most cases, the
government will be unable to make these showings with
respect to generators, and accordingly section 106 will not
apply.
64 The recent decision in United States v. Reilly Tar
appears to the contrary. The court there recognized that
imminent and substantial endangerment provisions "should not
become a substitute for other reasonably available and
adequate response authorities." 546 F. Supp. at 1114. The
court nonetheless held that section 106(a) may be used
simultaneously with other statutory response authorities.
Id. Reilly Tar, however, did not consider the limiting
effect of equitable principles on section 106 actions and
was limited to owner/operators.
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IV-44
IV. EVEN WHERE SECTION 106 INJUNCTIVE RELIEF
IS APPROPRIATE, EQUITABLE PRINCIPLES
WILL LIMIT THE LIABILITY OF GENERATORS
AND THE SCOPE OF CLEANUP REQUIRED.
As discussed above, section 106 should be construed as
giving rise to a cause of action for injunctive relief only
in extraordinary situations. But even where the requisite
threshold showing is made, the statutory and equitable
principles already mentioned may limit the relief to which
the government is entitled under section 106.
A. Section 106 Cleanup Must Be
Consistent with the NCP.
Once the government has established the threshold
requirements discussed above, any remedy granted must con-
form to the NCP. Both Superfund and its legislative history
indicate that private response actions ordered pursuant to
section 106 must be bounded by the NCP, including its risk
assessment and cost-effectiveness provisions. Section
106(c) requires the Administrator to establish guidelines
for the use of the section and mandates that " [s]uch guide-
lines shall to the extent practicable be consistent with the
national hazardous substance response plan."65
65 The guidelines ultimately promulgated by EPA, however,
are seriously deficient. See 47 Fed. Reg. 20664 (May 13,
1982). These guidelines reject cost-effectiveness as a
consideration for private cleanup and offer no guidance on
the type or degree of hazard needed to qualify as an "immi-
nent and substantial endangerment." 47 Fed. Reg. at 20666.
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IV-45
Section 105 unequivocally requires, regardless of
whether section 106 or section 104 is used, that "the
response to . . . hazardous substance releases shall, to the
greatest extent possible, be in accordance with the provi-
sions of the plan." This point is reaffirmed in section
107, which specifies that private parties will be liable
only for costs that are "consistent with" or, in some cases,
"not inconsistent with" the NCP. Section 107(a)(4)(A) -
(B).
In addition, the Senate Report on Superfund's prede-
cessor bill stressed that "removal and remedial actions
should be in accordance with the plan to the greatest extent
possible."66 The House Report similarly admonished that
"response shall be in accordance with the plan to the
greatest extent possible."67
Therefore, the NCP defines the outer boundaries of
relief that may be ordered in a section 106 action. This
point is expressly recognized in section 300.68(c) of the
recently-issued NCP, which provides that the Plan shall
66 S. Rep. No. 848, 96th Cong., 1st Sess. 53 (1980).
67 H.R. Rep. No. 1016, 96th Cong., 1st Sess. 30 (1980).
One of the principal sponsors of the final superfund legis-
lation, Senator Stafford, explicitly recognized that the NCP
would govern private cleanup actions under section 106. In
the floor debates preceding enactment, he described the
intended court review of section 106 administrative orders.
According to Stafford, "we would expect the courts to
examine the particular orders ... to determine whether
they were proper, given the standards of the Act and of the
national contingency plan." 126 Cong. Rec. S15008 (daily ed.
Nov. 24, 1980).
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IV-46
govern private cleanup to "determine the level of clean-up
to be sought through enforcement efforts."68 The most
important limits imposed by the NCP "[i]n determining the
need for and in planning" of cleanup actions may be summa-
rized as follows.69
First, a preliminary assessment is required, which must
evaluate "the magnitude of the hazard" and "the source and
nature of the release."70 The assessment and further
federal action may be terminated by a number of circum-
stances, including a determination that the "amount released
does not warrant Federal response," or that a "party respon-
sible for the release, or any other person, is providing
appropriate response."71
When an "immediate and significant risk of harm to
human life or health or to the environment" is found,72 and
appropriate response action is not being taken, the NCP
authorizes certain "defensive" "immediate removal
actions."73 All such actions must rely "on established
68 47 Fed. Reg. 31180, 31216 (July 16, 1982). This sec-
tion makes clear that the section 104(c)(4) to balance the
level of publically financed cleanup against amounts avail-
able in the Fund do not apply to private cleanup.
69
Id.,
§
300.61(c)(4).
70
Id.,
§
300.64(a).
7 1
Id.,
§
300.64(c).
7 2
Id.,
§
300.65(a).
73
Id.,
§
300.65(b).
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IV-47
technology when feasible and cost-effective.1,74 Additional
procedural and substantive conditions are set forth for
subsequent removal and remedial actions.75 These require-
ments help focus courts on procedures and techniques that
may be imposed in section 106 actions.
Moreover, remedial (as opposed to removal) actions
under section 106 should be limited to sites on the National
Priority List. Under Superfund section 105(8), the Adminis-
trator is directed to establish a national list of the most
hazardous sites, to be considered the highest priority
response targets. The Administrator may designate up to 400
sites as top priorities for cleanup. Under the NCP, a site
must be on the priority list to be eligible for remedial
action. Unless these requirements as well as the additional
and more specific provisions are complied with, no remedy is
appropriate under section 106,
B. Section 106 Cleanup Can Be Ordered Only
After Balancing the Equities of the Case.
Over and above the requirements of the NCP, equitable
principles impose another condition on section 106 abatement
relief. At equity, a court will issue an injunction only
after "balancing" the "equities and hardships" involved.76
74 Id., § 300.61(c)(4).
75 Id., §§ 300.66-.68.
76 See Dobbs, Remedies 52 (1973).
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IV-48
Equity "balances the conveniences of the parties and pos-
sible injuries to them according as they may be affected by
the granting or withholding of the injunction." Yakus v.
United States, 321 U.S. at 440. Section 106's directive
that relief be based on the "public interest" and the "equi-
ties of the case" further underscores the need for such a
balancing of interests.
The Supreme Court elaborated on the importance of a
balancing of interests in Aberdeen & Rockfish R.R. v. SCRAP.
409 U.S. 1207 (1972) :
Our society and its governmental instru-
mentalities, having been less than alert
to the needs of our environment for
generations have now taken protective
steps. These developments, however
praiseworthy, should not lead courts to
exercise equitable powers loosely or
casually whenever a claim of "environ-
mental damage" is asserted .... The
decisional process for judges is one of
balancing and it is often a most diffi-
cult task.
409 U.S. at 1217-18. This process involves consideration of
the relative good faith and negligence of the parties,
Golden Press v. Rylands, 235 P.2d 592 (Colo. 1951), as well
as a determination of whether the costs of an injunction are
justified by its benefits. Boomer v. Atlantic Cement Co. .
257 N.E.2d 870 (N.Y. 1970).
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IV-49
Nuisance cases provide one source of guidance regarding
the nature of this balancing process.77 In those cases,
the issue is framed in terms of the "unreasonableness" of an
activity. The Restatement defines an activity as unreason-
able if:
(a) the gravity of the harm out-
weighs the utility of the actor's con-
duct, or
(b) the harm caused by the conduct
is serious and the financial burden of
compensating for this and similar harm
to others would not make the continua-
tion of the conduct not feasible.78
In determining the gravity of the harm, the Restatement
identifies the following factors as relevant: (1) the
extent of the harm involved, (2) the character of the harm,
(3) the social value that the law attaches to the type of
use or enjoyment invaded, (4) the suitability of the partic-
ular use or enjoyment invaded to the character of the
locality and (5) the burden on the person harmed of avoiding
the harm.79 In determining the utility of the conduct
claimed to be a nuisance, courts consider: (1) the social
value that the law attaches to the primary purpose of the
conduct, (2) the suitability of the conduct to the character
77 Nuisance cases traditionally arose in equity and pro-
vide the primary precedents for equitable balancing. See
Reilly Tar, 546 F. Supp. at 1113. Dobbs, Remedies 52-55
(1973).
78 Restatement (Second) of Torts, § 826.
79 Id., § 827.
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IV-50
of the locality and (3) the impracticablity of preventing or
avoiding the invasion.80
Hazardous waste cases have applied the Restatement's
"reasonableness" test in determining whether a specific site
is a nuisance. Thus, in New Jersey v. Ventron, the court
emphasized that the case required "a delicate balancing of
private and public interests" before finding a nuisance.
2 Chem. & Rad. Waste Lit. Rep. 348 (N.J. 1979).81 There,
waste disposal was held to be a nuisance under the balancing
test.
In at least one hazardous waste disposal case, however,
the site was held to be "reasonable." The court in State
Department of Environmental Quality v. Chemical Waste
80 Id., § 828. Prosser identifies two especially impor-
tant Tactors in the unreasonableness balancing test. First,
courts look to the feasibility of preventing the nuisance:
A very material factor in all cases is
the practical possibility of preventing
or avoiding the harm. If the defendant,
by taking reasonable steps, without too
great hardship or expense, could reduce
or eliminate the inconvenience to the
plaintiff, and still carry on his enter-
prise effectively, his failure to do so
may render him liable.
Second, Prosser notes that the "decisive consideration in
many cases is the nature of the locality, and the suitabil-
ity of the use made of the land by both the plaintiff and
the defendant." Prosser at 599. See also Restatement
(Second) of Torts, §§ 830, 831.
81 See also Village of Wilsonville v. SCA Services, Inc.,
426 N.E.2d 824, 835 (111. 1981), where the court required a
balancing test in a hazardous waste case but applied it in a
manner that gave primary weight to health harms.
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IV-51
Storage & Disposition, Inc., 528 P.2d 1076 (Ct. App. Ore.
1974), relied primarily on the relatively remote location
of the site in holding there was no nuisance. JUl. at 1080.
These cases demonstrate the importance of the balancing
test in section 106 litigation. This issue, though highly
fact-dependent, may rule out injunctive relief altogether,
where the site is a "reasonable" use of land or where the
costs of cleanup would outweigh any benefits. Moreover, the
balancing test may limit the scope of required cleanup
operations, precluding excessive, costly measures that yield
little public health benefit.
C. In Some Cases, Equitable Defenses Will Protect
Generators from Section 106 Injunctions.
The application of equity principles under section 106
may, in appropriate cases, also give rise to certain tradi-
tional equitable defenses. For example, in some cases,
generators may successfully invoke the defenses of "unclean
hands" and "estoppel." Where the government owns a waste
disposal site, or has itself deposited wastes at a site,
these defenses may effectively bar a section 106 claim.
The requirement that plaintiffs possess "clean hands"
is uniform throughout equity. As described by the Supreme
Court:
The guiding doctrine in this case is the
equitable maxim that "he who comes into
equity must come with clean hands."
This maxim is far more than a mere
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IV-52
banality. It is a self-imposed ordi-
nance that closes the doors of a court
of equity to one tainted with inequi-
tableness or bad faith relative to the
matter in which he seeks relief, however
improper may have been the behavior of
the defendant.
Precision Instrument Mfg. Co. v. Automotive Co., 324 U.S.
806, 814 (1945).82 Although "unclean hands" is an absolute
defense, the court has considerable discretion in its appli-
cation. Id.
To invoke the doctrine of unclean hands, a plaintiff
must have engaged in some form of improper behavior "in
connection with the transaction under consideration.11
Great Western Cities, Inc. v. Binstein, 476 F. Supp. 827
(N.D. 111. 1979).83 As described by the seminal article in
the field, a negligent motorist should not be "able to
defend the subsequent personal injury suit by proving that
the pedestrian had beaten his wife before leaving his
home.1,84
82 See also Pope Mfg. Co. v. Gormully, 144 U.S. 224,
236-37 (1892); National Fire Insurance Co. v. Thompson,
281 U.S. 331, 338 (1930); Udall v. Littell, 366 F.2d 668,
675 (D.C. Cir. 1966).
83 See Jacoby-Bender, Inc. v. Jacques Kreisler Mfg.,
287 F. Supp. 134, 135 (S.D.N.Y. 1968) ("unclean hands is
available to a defendant only if there is a direct relation-
ship between plaintiff's misdeeds and defendant's") (cita-
tion omitted). See also Nice Ball Bearing Co. v. Bearing
Jobbers, Inc., 205 F.2d 841, 850-51 (7th Cir.), cert.
denied, 346 U.S. 911 (1953).
84 Chaffee, Coming Into Equity with Clean Hands, 47 Mich.
L. Rev. 877, 1072 (1949).
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IV-53
To constitute unclean hands, the behavior of the plain-
tiff need not "be actually fraudulent or sufficient to
constitute a basis for legal action." Hanson & Associates
v. Farmers Cooperative Creamery Co., 403 F.2d 65, 70 (8th
Cir. 1968). Rather, the conduct in question must merely be
such that it would be unfair to shift full responsibility
onto the defendant. The defense of unclean hands applies
equally to the government as plaintiff as it does to private
parties.85
At least two of the circumstances held to represent
unclean hands may help generator defendants in section 106
actions. First, plaintiffs may be denied relief where they
have "participated" in the unlawful conduct. See, e.g.,
Johanna Farms, Inc. v. Citrus Bowl, Inc., 468 F. Supp. 866,
874 (E.D.N.Y. 1978); Jacoby-Bender v. Kreisler Mfg., 287 F.
Supp. at 135.86 And second, "unclean hands" applies when a
defendant has relied on the representations of a plaintiff
and has acted accordingly. In such circumstances, the
85 See, e.g., United States v. Georgia-Pacific Co., 421
F.2d 92, 103 (9th Cir. 1970); United States v. City of
Milwaukee, 395 F. Supp. 725, 727 (E.D. Wis. 1975); Marcee v.
United States, 455 F.2d 525, 527 (Ct. CI. 1972). Cf. United
States v. The Thekla, 266 U.S. 328, 339-40 (1924).
86 Thus, where a contractor sought to have an original set
of bids for a federal project set aside and a rebidding
performed, he may not then attempt to overturn the rebidding
results. In Contel Construction Corp. v. Parker, 261 F.
Supp. 428 (E.D. Pa. 1966), the court held that "[h]aving
been a willing and even eager participant in the rebidding,
plaintiff cannot now be heard to say that its consequences
should be enjoined." 261 F. Supp. at 430.
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IV-54
plaintiff may not repudiate its earlier statements and seek
to enjoin the defendant's conduct.
In United States v. Georgia-Pacific, 421 F.2d 92 (9th
Cir. 1970), a timber company invested in tracts of land,
based on a 1958 government revision of the boundaries of
national forest land. In 1970, the government came into
court alleging that the 1958 changes were invalidly made and
seeking part of defendant's land. The court observed that
"Georgia-Pacific has made considerable investment in the
Eden Ridge Tract based upon good faith reliance on both the
boundary changes of 1958 and the failure of Government to
assert any claim to the subject lands until the present suit
was instituted." M. at 104. In light of this past his-
tory, the court held that the government's hands were
"tainted" in its present suit and the injunction was denied.
Id.
These precedents for "unclean hands" should be helpful
to generators in a variety of circumstances. In some cases,
the government may have operated a waste site or used a site
for disposal of wastes that it generated, only to sue a less
responsible private party for cleanup under section 106.87
On these facts, the government has "participated" in the
wrong and its unclean hands should be taken into account
when balancing the equities.
87 See, e.q., City of Philadelphia v. Stepan Chemical Co.
544 F. Supp. 1135 (E.D. Pa. 1982), where the city sought
cleanup liability from private parties for a city-owned
dump.
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IV-55
In other circumstances, waste disposal sites have been
licensed by government and have received at best desultory-
investigation and enforcement. In many of these cases, more
vigorous enforcement in the past would have significantly
limited the scope and cost required for current cleanup
efforts. Where generators have relied on the adequacy of
these waste sites in using them for disposal, Georgia-
Pacific suggests that the government should not be allowed
to repudiate its earlier decision and require generators to
clean up a site.88 Again, unclean hands may be a factor in
balancing the equities.
These facts may also give rise to the equitable defense
of estoppel. Equitable estoppel prevents a party in a
judicial proceeding from contradicting his earlier state-
ments to the opposing party. This doctrine focuses pri-
marily on doing "justice between the parties." Konstanti-
nidis v. Chen, 626 F.2d 933, 936-37 (D.C. Cir. 1980).
The estoppel defense applies to actions brought by the
government as well. Investors Research Corp. v. SEC, 628
F.2d 168, 174 (D.C. Cir. 1980). When seeking to estop the
government, however, a defendant may be required to do more
than show a negligent failure to inform; he may be required
88 In many situations, early enforcement inadequacy will
probably be the fault of state and local governments,
whereas section 106 is limited to federal actions.
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IV-56
to show 11 affirmative misconduct." Lavin v. Marsh, 644 F.2d
1378, 1382 (9th Cir. 1981).89
Thus, where the government has permitted a waste site,
it may be estopped from proceeding under section 106.90
For example, where pits, ponds or lagoons were built to
specifications required pursuant to section 402 of the Water
Act,91 the federal government might be precluded from suing
under section 106.
Plaintiffs will probably argue that a major exception
to the unclean hands defense exists where the application of
an unclean hands defense to government action would "frus-
trate the purpose of its laws or . . . thwart public
policy." Pan American Petroleum and Transport Co. v. United
89 This burden may not be imposed by all circuits. For
example, when the government negligently failed to depict a
pipeline on dredging specifications, the government has been
held responsible on estoppel grounds. Williams-McWilliams
Co. v. U.S., 551 F.2d 945 (5th Cir. 1977). ("By a prolonged
course of conduct the Government can induce justifiable
reliance by interested parties on the course of action being
continued.")
90 One difficulty with this defense is the traditional
requirement that the plaintiff must know the true facts at
the time of the original representation. See, e.g., Bob's
Big Boy Family Restaurants v. NLRB, 625 F.2d 850, 854 (9th
Cir. 1980); Beverage v. Harvey, 602 F.2d 657, 659 (4th Cir.
1979). This knowledge, however, may be constructive rather
than actual. Bohannon v. Manhattan Life Insurance Co.,
555 F.2d 1205, 1211 (5th Cir. 1977).
91 33 U.S.C. § 1342. Regulations issued thereunder are
codified in 40 C.F.R. §§ 122-125 (1981).
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IV-57
States, 273 U.S. 456, 506 (1927).92 In the absence of an
alternative means to ensure the cleanup of waste disposal
sites, the strong public interest in health protection might
indeed prevent the application of the unclean hands defense.
But in light of the alternative of government cleanup under
section 104, the public interest in requiring private
cleanup under section 106 seems small, and unclean hands and
estoppel should be effective defenses in some cases.93
9 2 see also Eichleay Corp. v. National Labor Relations
Board, 206 F.2d 799, 806 (3d Cir. 1953); Deseret Apartments
v. United States, 250 F.2d 457, 458 (10th Cir. 1957).
93 In practice, these defenses may operate simply as a
"backstop" to the irreparable injury requirement. Where the
government has no adequate remedy except under section 106,
unclean hands may not be helpful, due to the public interest
exception.
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TAB 5
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CHAPTER 5:
THE LIABILITY PROVISIONS
OF SECTION 107
INTRODUCTION AND SUMMARY OF CONCLUSIONS
Section 107 of Superfund provides the statute's only
mechanism for recovering cleanup costs and natural resource
damages from responsible parties. Despite EPA's expressed
preference for compelling private cleanup through the emer-
gency enforcement provisions of section 106 of Superfund,1
suits under section 107 to recover the costs of government
response actions are likely to become increasingly impor-
tant. This is true not only because EPA inevitably will
begin expending fund monies, but also because, as detailed
in chapter 4 supra, section 106 is available only in extra-
ordinary circumstances.2
1 See, e.g. EPA's Interim Superfund Removal Guidance
(July 28, 1981) (instructing on-site coordinators to
"request" or "compel" private cleanup before "resorting to
Response Fund expenditures); 10 Pest. & Tox. Chem. News,
No. 26 at 17 (May 12, 1982) (EPA's Acting Director of the
Office of Solid Waste Enforcement Programs stated that EPA
prefers issuing orders for private cleanup to using Fund
resources).
2 At least ten section 107 counts have already been filed
by United States and several state governments. In United
States v. Wade, 546 F. Supp. 785 (E.D. Pa. 1982), the court
dismissed a complaint against non-negligent generators for
injunctive relief under section 106, indicating that a sec-
tion 107 complaint was appropriate against a generator when
federal response had already begun. See chapter 4 at IV-38.
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V-2
This chapter addresses all aspects of section 107's
liability provisions, except for three key general issues
(standard of liability, causation, and apportionment)
addressed in chapters 1-3.
Part I provides a brief statutory and legislative
history background of section 107. The relationship of
section 107 to the other key Superfund provisions is out-
lined and the legislative evolution of section 107 is sum-
marized.
Part II addresses the scope of monetary relief which
may be recovered under section 107. Unlike the much broader
liability schemes proposed in earlier bills, section 107
carefully limits liability to cleanup costs and natural
resource damages. Moreover, the scope of recoverable
response costs is limited not only by the specific terms of
section 107, but also by the substantive standards of sec-
tion 104 and the substantive and procedural requirements of
the National Contingency Plan (NCP). Natural resource
claims are restricted to the lost economic value of federal
and state lands and are subject to an administrative assess-
ment procedure to be developed by regulation under section
301(c).
The parties who may sue under section 107 are examined
in Part III. The United States, the states, and any other
person who incurred response costs may sue to recover them
under section 107. Only the United States and the states,
however, may sue to recover natural resource damages.
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V-3
Part IV describes the parties who may be liable under
section 107. The broadest liability is imposed on the
present owners and operators of facilities and sites.
Liability for past owners and operators, transporters, and
generators is imposed only in connection with disposal or
treatment facilities- Even then, not all past owners and
operators, transporters, and generators are liable; instead,
Congress limited liability to those classes of defendants
most likely to be in a position to control the risk of
hazardous substance releases.
Part V addresses various defenses and limitations of
liability available under section 107. In addition to
defenses based on acts of God, acts of war, and acts or
omissions of third parties, section 107 establishes certain
monetary limits on liability and provides exclusions related
to federally permitted releases, "good Samaritan" cleanup
actions, and pesticide applications.
Finally, Part VI considers the section 107 provision,
for recovery of punitive damages of up to three times
response costs against one who "fails without sufficient
cause" to provide removal or remedial action under an admin-
istrative order. Where the defendant in good faith contests
liability, or is unable to comply with the administrative
order, punitive damages may not be recovered. Nor may
punitive damages be assessed where the administrative order,
or the response expenditures by which the damages would be
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V-4
measured, fail to comport with statutory standards and the
requirements of the NCP.
I. SECTION 107 IS AN INTEGRAL PART
OF A UNIFIED STATUTORY SCHEME.
A. Superfund Provides for Response
and Cleanup Supplemented by
Limited Liability for Response
Costs and Natural Resource Damages.
Superfund provides a comprehensive scheme for respond-
ing to releases of hazardous substances and for allocating
the costs of such response efforts. Section 107 of Super-
fund, the Act's basic liability provision, plays a key role
in this scheme and must be read in harmony with the entire
statute.
Section 104 of Superfund authorizes the federal govern-
ment, alone and in cooperation with the states, to use
Superfund monies to respond to releases of hazardous sub-
stances. Voluntary private cleanup ,is also contemplated.3
Section 104 response actions are governed by standards
set forth in both sections 104 and 105. For example, sec-
tion 104 places dollar and time limits on response actions
3 Section 104(a) authorizes federal response "unless the
President determines that such removal and remedial action
will be done properly by the owner or operator of the vessel
or facility from which the release or threat of release
emanates, or by any other responsible party." Section
104(d)(1) authorizes state response under Superfund "[w]here
the President determines that a State or political subdivi-
sion thereof has the capability to carry out any or all of
the actions authorized in this section," and enters a con-
tract or cooperative agreement with the state.
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V-5
at a particular site unless specified conditions are met
[§ 104(c)(1)] and requires the selection of remedial mea-
sures which accord with the NCP and provide for a cost-
effective response [§ 104(c)(4)]. Section 105 provides for
revision of the NCP previously published under section
311(c) of the Clean Water Act,4 "to reflect and effectuate
the responsibilities and powers created by" Superfund.5
Section 106 provides a limited supplement to govern-
mental cleanup authority under section 104. Under section
106, the owner or operator of a site can be ordered to clean
up an imminent and substantial endangerment where no ade-
quate remedy exists under sections 104 and 107.®
Cleanup costs for response actions taken under Super-
fund, and damages for injury to natural resources, may be
recovered under sections 107, 111, and 112. A claimant may
elect to assert an unsatisfied claim which has been pre-
sented to private parties either in an^ action against
responsible parties under section 107, or against the Fund
under the claims procedures of sections 111 and 112.
4 The NCP promulgated under the Clean Water Act is codi-
fied at 40 C.F.R. Part 1510 (1981).
5 The revised NCP must include, inter alia, criteria for
determining the appropriate extent of removal, remedial, and
other measures under Superfund [§ 105(3)], means of assuring
that remedial measures are cost-effective [§ 105(7)], meth-
ods for assessing the risks presented by sites [§ 105(8)
(A)], and a list of national priority sites for response
[§ 105(8) (B) ].
6 See Chapter 4 at IV-35 to IV-43.
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V-6
The Fund is available to satisfy claims against insol-
vent or absent parties at sites involving multiple respon-
sible parties irrespective of whether or not liability is
apportioned-7 Similarly, a private party who conducts
cleanup in excess of his apportioned share may recover
excess costs against other responsible parties under section
107 or against the fund under section 112.
B. The Legislative Evolution of Section 107
Indicates That a Cautious Rather Than an
Expansive Interpretation Is Required.
Superfund was passed in the lame-duck session of the
96th Congress in a last minute effort to enact a bill before
the 97th Congress, elected along with President Reagan, took
office. The enacted legislation was a massive compromise
from earlier proposals, hastily drafted, and passed without
the customary committee or conference reports explaining its
provisions.
As the sponsors of the Superfund legislation conceded,
S. 1480, the bill reported by the Senate Environment and
Public Works Committee, could not be passed because it was
regarded as overly harsh and extreme.8 While the enacted
7 See Chapter 1 at 1-11 to 1-12.
8 Even Senator Stafford, one of the key sponsors of
S. 1480, conceded that many of his colleagues "perceive[d]
[S. 1480] as punitive and unnecessarily rigorous." 126 Cong.
(Footnote 8 continued on next page.)
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V-7
section 107(a) preserved the basic structure of the analo-
gous liability provisions from S. 1480,9 the compromise
significantly restricted potential Superfund liability by
eliminating the most onerous aspects of the Committee
bill.10
For example, S. 1480 would have created an unprece-
dented private cause of action under federal law to recover
a variety of damages for personal injury or economic loss
resulting from the release of hazardous substances, incorpo-
rating a far weaker medical causation requirement than that
imposed by common law.11 As repeatedly emphasized during
the final Senate debate on Superfund, this revolutionary
. federal cause of action for personal injury and economic
(Footnote 8 continued from previous page.)
Rec. S14967 (daily ed. Nov. 24, 1980). Other Senators
described the provisions of S. 1480 as "grossly unfair" (id.
at S15004, Senator Helms) and "too burdensome or punitive"
(id. at S15007, Senator Riegle). Thus, due to the "strong
concern and opposition" to S. 1480, the bill's sponsors were
required to make "major concessions" to obtain passage of a
compromise bill. Id. at S14967 (remarks of Senator Staf-
ford ).
9 S. 1480 § 4(a). As detailed in this chapter, some
aspects of H.R. 7020, the bill originally passed by the
House, were also used in developing the compromise legisla-
tion. Throughout this memorandum, references to H.R. 7020
are to the version of H.R. 7020 originally passed by the
House, unless otherwise indicated.
10 As the court observed in City of Philadelphia v. Stepan
Chemical Co., 544 F.Supp. 1135 (E.D. Pa. 1982), "[w]hat was
enacted and signed into law is a severely diminished piece
of compromise legislation . . .." Id. at 1142.
11 S. 1480 §§ 4(a)(2), 4(c); see chapter 3 at III-7.
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V-3
loss could not pass and therefore was eliminated from the
compromise bill.12
The compromise also eliminated both joint and several
liability and the express provisions for strict liability
found in both the Senate and House bills. In their place,
Congress adopted the standard of liability applicable under
section 311 of the Clean Water Act, permitting fault con-
siderations to influence liability determinations in some
Superfund cases.13
No committee report or conference report was prepared
on the final compromise, which was presented on the floor of
the Senate as an amendment in the nature of a substitute.14
Neither the Senate report on the committee version of
S. 1480,15 nor the House debate and committee report on
12 See, e.g., 126 Cong. Rec. S14964 (daily ed. Nov. 24,
1980) (remarks of Senator Randolph); id. at S14967 (remarks
of Senator Stafford); id. at S14973 (remarks of Senator
Mitchell); id. at S14980 (remarks of Senator Cohen); id. at
S15004 (remarks of Senator Helms).
13 See chapter 1; compare S. 1480 § 4(a) and H.R. 7020
§ 3071(a)(1), with Superfund § 107(a); and chapter 2 at
II-8 to 11-16; compare S. 1480 § 4(a) and H.R. 7020
§ 3071(a), with Superfund §§ 107(a), 101(32).
14 126 Cong. Rec. S14948 (Nov. 24, 1980) (remarks of
Senators Byrd and Stafford). Because the compromise bill
passed in the Senate was accepted and passed in the House
without amendment, no conference was needed. See id.,
H11791 (daily ed. Dec. 3, 1980) (remarks of Rep. Harsha);
id. at H11792 (remarks of Rep. Breaux).
15 S. Rep. No. 848, 96th Cong. 2d Sess. (1980).
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V-9
H.R. 7020,16 can be regarded as authoritative regarding the
final compromise. Accordingly, the legislative history of
S. 1480 and H.R. 7020 must be used cautiously in inter-
preting the provisions of the compromise legislation, and
section 107 itself must be interpreted in light of the
substantial narrowing of liability achieved in the final
compromise.
II. CONGRESS CAREFULLY LIMITED THE RESPONSE COSTS
AND DAMAGES RECOVERABLE UNDER SECTION 107.
Section 107 relief is limited to recovery of two kinds
of solely money damages: the costs of responding to a
release or threatened release of a hazardous substance
[§§ 107(a)(4)(A), (B)];17 and "damages for injury to,
destruction of, or loss of natural resources . . ." [§ 107
16 H.R. Rep. No. 1016, 96th Cong. 2d Sess. (1980).
17 Section 107(a) also requires "a release, or a threat-
ened release which causes the incurrence of response costs,
of a hazardous substance.. . [§ 107(a)(4)]. "Release"
and hazardous substance are both defined terms under the
statute [§ 101(22) and § 101(14)]. Initially these terms
appear to provide some practical limitation to the scope of
liability, but in practice the definitions are very broad
and have little limiting effect. It should be noted, how-
ever, that petroleum and crude oil fractions are excluded
from the definition of hazardous substances [§ 101(14)]. In
addition, although the government may respond in some cases
under section 104 to the release of a "pollutant or con-
taminant" which is not a "hazardous substance," there is no
liability under section 107 relating to the release of a
"pollutant or contaminant."
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V-10
(a)(4)(C)].18 Equitable relief is permissible only under
the narrowly-drawn emergency abatement provisions of section
106, available primarily against owners and operators — not
against past off-site generators.19
Moreover, the response costs and natural resource
damages recoverable under section 107 are limited sharply.
As detailed below, Congress tailored the scope of recovery
to achieve the remedial ends of the statute without undue
burden on either private defendants or the federal Response
Fund, which must bear the liability of insolvent or unavail-
able parties.
A. Recoverable Response Costs Are Limited
by the Requirements of Section 104 and
the National Contingency Plan.
As an integral part of the Superfund comprehensive
cleanup scheme, section 107 supplements the response author-
ity provisions of section 104 by permitting recovery for the
costs of response taken pursuant to section 104. Both the
response authority and the liability provisions, however,
explicitly require consistency with the revised NCP promul-
gated under section 105.
18 As noted above, Congress deliberately eliminated from
the final compromise bill provision for the recovery of
damages for personal injury or private economic loss, which
had been included in both the Senate committee version of
S. 1480 and the House bill, H.R. 7020. See p. 8, supra.
19 United States v. Wade, supra n.2; see chapter 4
at IV-30 to IV-35.
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V-ll
Compliance with section 104 and the NCP is of critical
interest to Superfund defendants. Both are designed to
insure efficient, cost-effective, and economical cleanup.
Without section 104 and the NCP, the government could seek
to recover response costs under section 107 virtually with-
out limitation, thereby removing its incentive to perform
cost-effective, economical cleanup.
1. Superfund's language and legislative
history require compliance with
section 104 and the NCP in order to
recover under section 107.
Both the statute and its legislative history show that
the costs recoverable under section 107 are the costs of
hazardous waste removal or remedial response actions taken
in accordance with the section 104 cleanup authority and the
provisions of the NCP. It follows, therefore, that section
107 provides no basis for recovering the costs of actions
taken outside Superfund1s statutory framework.
Response measures under Superfund include removal and
remedial actions, both of which are authorized under section
104 in responding to releases or threatened releases of
hazardous substances.20 Removal action "is that initial
response . . . which after discovery must be undertaken
quickly to protect or prevent actual or potential injury
2° Superfund § 104(a)(1); Superfund § 101(25).
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V-12
. . . ."21 In contrast, remedial action "involves the more
permanent, costly measures which may be necessary after the
need for emergency action has terminated."22
Section 104 defines the scope of authorized response
under Superfund by setting standards for removal and reme-
dial measures, including (i) dollar and time limitations on
removal action [§ 104(c)(1)]; (ii) requirements for consul-
tation with affected states and state cost-sharing agree-
ments prior to undertaking remedial action [§§ 104(c)(1),
(2), (3)]; and (iii) requirements for selection of remedial
measures which are cost-effective and balanced [§ 104(c)(4)].
State response under Superfund also requires a federal
determination that the state is capable of carrying out the
response and has obtained a federal-state agreement covering
the response. Superfund § 104(d)(1).
In addition, both remedial and removal response actions
are governed by the revised NCP promulgated under section
21 S. Rep. No. 848, 96th Cong., 2d Sess. 53 (1980). The
enacted legislation adopted the distinction between removal
and remedial action developed in S. 1480. The basic
response authority provisions found in Superfund § 104 and
S. 1480 § 3(c) are also similar.
22 S. Rep. No. 848, 96th Cong., 2d Sess. 54 (1980). The
terms "removal" and "remedial action" are terms of art under
Superfund. See Superfund §§ 101(23), (24). As detailed in
this chapter the terms "removal" and "remedial" are used
throughout §§ 104, 105, 107, 111, and 112 in defining the
scope of response and recovery authorized by Superfund.
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V-13
105.2 3 The application of the NCP to all Superfund
response actions is emphasized throughout sections 104 and
105.24 Significantly, actions inconsistent with the NCP
are nowhere authorized under Superfund.
Indeed, the legislative history makes clear that the
NCP was to provide standards both for response and liabil-
ity. For example, the final Senate debate recognized that
Superfund "is to be substantially keyed to the national
contingency plan."25 The Senate committee report on
S. 1480 explains that the revised NCP should "give some
consistency and cohesiveness to response planning and
actions under this bill."26 And the Senate debate on the
23 Section 105 requires that the NCP, inter alia, specify
"methods and criteria for determining the appropriate extent
of removal, remedy, and other measures authorized by this
Act" [§ 105(3)]; establish "means of assuring that remedial
action measures are cost-effective. . ." [§ 105(7)]; estab-
lish risk assessment procedures [§ 105(8)(A)]; and determine
and list priorities for response among known releases or
threatened releases [§ 105(8)(B)].
24 See section 104(a)(1) (authorizing removal, remedial,
and other response actions "consistent with the national
contingency plan"); section 104(c)(4) (requiring selection
of remedial actions "which are to the extent practicable in
accordance with the national contingency plan"); and section
105 (requiring that "the response to and actions to minimize
damage from hazardous substances releases shall, to the
greatest extent possible, be in accordance with the provi-
sions of the plan").
25 126 Cong. Rec. S15007 (daily ed. Nov. 24, 1980) (col-
loquy between Senator Helms and Senator Stafford).
28 S. Rep. No. 848, S6th Cong., 2d Sess. 52 (1980).
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V-14
final legislation confirms that the NCP applies even to
administrative orders for removal or remedial action, and
that the inconsistency of such an order with the NCP could
be raised as a defense to a punitive damages action under
section 107(c).27
Section 107 provides a logical complement to Super-
fund's response authority by providing recovery of costs
incurred under the statutory response scheme. The costs
which may be recovered are specified as:
(A) all costs of removal or remedial
action incurred by the United States
Government or a State not inconsistent
with the national contingency plan;
(B) any other necessary costs of
response incurred by any other person
consistent with the national contingency
plan ....
Superfund §§ 107(a)(4)(A), (B).
This means that the costs to be recovered under section
107(a) are only the costs of "removal or remedial action" or
"response." The costs of actions which do not comport with
the standards of section 104 do not qualify as the costs of
"removal or remedial action" and cannot be recovered under
the terms of section 107(a).
27 126 Cong. Rec. S15008 (daily ed. No. 24, 1930) (col-
loquy between Senator Simpson and Senator Stafford). The
section 107(c) provision for punitive damages for violation
of administrative orders is addressed at pp. v-69 to V-71
infra.
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V-15
This unified construction of the section 107 liability
provisions is also supported by Superfund's parallel scheme
for recovering costs from the federal Response Fund.
Response cost claims which remain unsatisfied after pre-
sentation to potentially liable parties may be asserted
either in a section 107 action or against the Fund under
sections 111 and 112, thereby indicating that the scope of
response cost recovery against private defendants is coex-
tensive with recovery from the fund. Superfund § 112(a).
Recovery of response costs from the Fund is specifically
linked to section 104 by section 111(a)(1), which provides
for "payment of governmental response costs incurred pur-
suant to section 104 of this title ..." (emphasis sup-
plied). In short, the section 104 standards are applicable
to all claims for response costs, whether asserted against
responsible parties or against the Fund.
Moreover, the cost recovery provisions of section
107 — like sections 104 and 105 — specifically require
consistency with the NCP. The federal and state governments
may recover only those costs that are "not inconsistent with
the national contingency plan," and other persons may
recover only costs "consistent with the national contingency
plan."
The key language in section 107 requiring consistency
with the NCP was added in the final compromise legislation
and does not appear in the liability provisions of either
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V-16
S. 1480 or H.R. 7020.28 Thus, the compromise reinforced
the central role of the NCP in Superfund by using it explic-
itly to define the limits of cost recovery under section 107
as well as the extent of response authority under section
104. While nothing in the statute or legislative history
explains the use of the terms "not inconsistent with" in
section 107(a)(4)(A) and "consistent with" in section
107(a)(4)(B), the double negative "not inconsistent" is
logically equivalent with the positive "consistent."29
Given the rushed rewriting of Superfund in the closing days
of Congress, no particular importance should be attributed
to those essentially identical formulations.30
Taken together, the only coherent reading of sections
104, 105, and 107 is that liability under sections
107(a)(4)(A) and (B) is limited to "removal," "remedial,"
and "response" actions taken in accordance with the section
28 See S. 1480 §§ 4(a)(1)(A), (B); H.R. 8020 § 3071(b).
29 Arguably, "consistent with" was considered a tighter
verbal formulation and that tighter control was intended for
recovering the cost of private response action. The statute
as a whole, however, makes clear that both governmental and
private recovery for response costs is to be conditioned on
meeting NCP requirements.
30 The final Act contains numerous, obvious examples of
errors in draftsmanship. For example, section 107(c)(3)
imposes penalties on parties who violate Presidential orders
under section 104 of the Act, but section 104 contains no
authority for such orders. And section 303 cuts off taxing
authority in 1985, even though the post-closure tax fund
continues thereafter.
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V-17
104 cleanup authority and the NCP. Cleanup costs taken
outside the Superfund statutory framework are recoverable,
if at all, only under other legal authority, such as state
common law.
2. The better interpretation
reads section 107 "in
tandem" with section 104.
Although early judicial interpretations of Superfund
are divided, the recent decision in United States v. Wade
comes closest to meshing section 107 with the response
standards of section 104. There, the court dismissed claims
against non-negligent generators under section 7003 of RCRA
and section 106 of Superfund. In interpreting the injunc-
tive power of section 106, the court analyzed the statute as
a whole, and focused on the availability of an alternative
remedy for the government under sections 104 and 107, empha-
sizing their close link:
Congress intended section 104 to work in
tandem with section 107, the liability
section. By the terms of section 107,
the government is authorized to sue
designated classes of persons to reim-
burse the Superfund for emergency clean-
up, removal and containment actions
which it undertook under section 104.
546 F. Supp. at 793 (citations and footnotes omitted).
By contrast, in United States v. Reilly Tar & Chemical
Corp., the court interpreted section 107(a) without refer-
ence to related statutory provisions. Relying on the first
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V-I8
clause of section 107(a) ("[n]otwithstanding any other
provision or rule of law and subject only to the defenses
set forth in subsection (fc) of this section"), the court
rejected Reilly Tar's argument31 that plaintiff's section
107 claim should be dismissed because plaintiff failed to
obtain the cooperative agreement required under section
104(c)(3). According to the court,
Congress did not intend that courts
engage in the complex inquiry and statu-
tory tracing of the various sections
Reilly Tar relied on. Section 107(a)
was meant to stand by itself ....
17 E.R.C. at 2124.32
The brief introductory clause relied upon in the Reilly
Tar decision does not compel the crabbed interpretation of
section 107 imposed by the court. Other courts, when pre-
sented with the unitary reading of sections 104, 105, and
107 described at pp. 11-17 supra, should reach a different
result. Accordingly, the Wade approach of reading section
104 and 107 in tandem provides the proper analytical frame-
work for section 107 claims.
31 This argument was based on a technical reading of
section 112(a) and section 111(a).
32 The court also rejected Reilly Tar's argument that
because no final revised NCP was available, it was impos-
sible to determine whether the costs sought to be recovered
were consistent with the NCP. It held instead that section
107 was intended to become effective immediately upon pas-
sage, and that the NCP promulgated under section 311 of
Clean Water Act governed Superfuna response until publica-
tion of the revised NCP under section 105.
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V-19
3. Section 104 and the NCP establish cost-
effective standards governing both
response and section 107 recovery-
Section 104 and the NCP provide detailed substantive
and procedural requirements for all removal and remedial
actions under Superfund, including those that become subject
to a section 107 action. These standards impose substantial
limits on the scope of all response and recovery, thereby
making compliance with section 104 and the NCP central
issues in many future Superfund cases.
a. Federal removal actions are limited
in both scope and expense.
As explained above, removal actions are intended to
provide an initial response to emergency conditions where
prompt action may be required to avoid harm.33 For this
reason the total expenditures for and duration of removal
action are sharply restricted. Removal actions are not,
however, subject to some of the substantive and procedural
limitations which govern remedial action.34
Removal expenditures are limited to $1,000,000 or any
lesser amount spent within six months of the initial
response. Superfund § 104(c)(1). The $1,000,000 — six-
month limit for removal action can be exceeded only where
See p. V-12 supra.
See pp. V-21 to V-23 infra.
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V-20
"continued response actions are immediately required to
prevent, limit, or mitigate an emergency," there is an
"immediate risk," and timely assistance will not otherwise
be provided. Id.
The revised NCP35 limits removal action by setting
standards for immediate removal and planned removal. These
NCP removal standards emphasize that removal actions encom-
pass only responses of short duration, calling for limited
expenditures, at sites which present an immediate and high
risk.36 Immediate removal actions must be terminated when
the site no longer meets acute hazard criteria and proper
disposal has been completed. NCP § 300.65(c).
The NCP permits planned removal only at the request of
the affected state. NCP § 300.67(b).37 Moreover, the NCP
indicates that the situations in which planned removal are
appropriate are limited to direct human contact with hazard-
ous substances, "contaminated drinking water at the tap,"
35 National Oil and Hazardous Substances Contingency Plan,
47 Fed. Reg. 31180 (1982).
36 The NCP permits immediate removal only where such
action "will prevent or mitigate immediate and significant
risk of harm to human life or health or to the environment,"
such as "exposure to acutely toxic substances" "contamina-
tion of a drinking water supply," "fire and/or explosion,"
or other "similarly acute situations." NCP § 300.65(a).
37 Planned removal actions are directed at non-emergency
situations falling short of full remedial action and staying
within the statutory criterion for removal actions.
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V-21
and other "serious threats." NCP § 300.67(c). Planned
removal must also be terminated after the expenditure of
$1,000,000 or six months after the date of initial response,
unless continued response is "immediately required" by an
"emergency" and "immediate risk." NCP § 300.67(e).
b. Federal remedial actions must be
cost-effective, comport with the
NCP and meet other statutory criteria.
Remedial actions, in contrast to emergency removal
actions, provide a more costly, long-lasting response,
normally requiring considerable study.38 While federal
remedial actions are not subject to the $1,000,000 — six
months remedial limits, they are governed by strict stan-
dards for state consultation and cost sharing, as well as
cost-effectiveness. Federal remedial action not only
requires prior consultation with any affected state
[§ 104(c)(2)] but the state must enter a contract or coop-
erative agreement assuring, inter alia, that the state will
provide "all future maintenance" at the site and will pay
ten percent of the costs [§ 104(c)(3)].
By these limitations, Congress expressly intended to
avoid quixotic attempts to clean up every release of a
hazardous substance regardless of cost. For example, in the
S. Rep. No. 848, 96th Cong. 2d Sess. 54 (1980).
-------
V-22
final debate on Superfund, Senator Stafford, one of the key
architects of both S. 1480 and the compromise legislation,
emphasized that:
[Considerations of the relationship
between the costs and the benefits of a
particular response action are an essen-
tial part of both the national contin-
gency plan, to be developed under sec-
tion 105, and the selection of remedial
and response actions under section 104.
We intend that priorities be set for
expenditures from the fund, and that
such expenditures be made in those
situations which most present a threat.
The fund should not be used to clean ud
or remedy any and every discharge.3^
Similarly, Senator Dole observed that "[f]ederal action must
be responsible, and carefully calculated to deal with the
immediate problem in a realistic and cost-effective way."40
As Superfund requires, the NCP also sharply limits the
sites at which remedial action may be taken by defining
remedial actions as "responses to releases on the National
39 126 Cong. Rec. S15007 (daily ed. Nov. 24, 1980).
40 126 Cong. Rec. S14982 (daily ed. Nov. 24, 1980). He
further noted that,
[t]he compromise package . . . imposes
limits on the discretion of those admin-
istering the response mechanism, to
insure that reasonably cost-efficient
actions are taken, and that the response
to a given problem is shaped with regard
to the entire range of problems covered
by the fund and to the overall limit on
the fund.
Id.
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V-23
Priorities List." NCP § 300.68(a)(3).41 Thus, at non-
priority sites, only removal action — subject to the strict
limits described above — can be undertaken and recovered.
Moreover, remedial actions must comply with detailed
substantive and procedural requirements to ensure the selec-
tion of cost-effective measures. The NCP requires develop-
ment and detailed analysis of alternative remedial measures
based on cost, effectiveness, and feasibility. NCP
§§ 300.68(g), (h), (i). For example, the NCP requires
selection of the alternative,
which ... is cost-effective (i.e., the
lowest cost alternative that is techno-
logically feasible and reliable and
which effectively mitigates and mini-
mizes damage to and provides adequate
protection of public health, welfare, or
the environment).
NCP § 300.68(j).
In short, the express invocation of NCP standards in
section 107 provides substantial limitations on the scope of
response cost recovery. Expenditures contrary to the NCP
provisions may not be recovered under section 107.
c. With federal approval, a state can
exercise the statutory response
authority and recover its costs.
Old hazardous waste sites often present acute political
problems for state and local governments, and state
41 Section 105(8)(B) requires the creation of a National
Priorities List of four hundred sites based on risk assess-
ments pursuant to the NCP.
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V-24
government interest and participation in cleanup has been
accordingly keen. Because of their proximity to citizen
concern, states may, in certain situations, want expensive,
even zero-risk cleanup, particularly if cleanup costs are to
be borne out of the Response Fund rather than state treasur-
ies. Accordingly, the requirement that the state comply
with section 104 and the NCP as a condition to recovering
response costs under section 107 may be of particular impor-
tance in certain situations.42
Section 104 has two provisions that affect the terms of
participation by state and local governments in Superfund
cleanup. The first, section 104(d)(1), provides statutory
authority for state and local governments to undertake
responses, including removal and remedial action under
Superfund. The second, section 104(c)(3), requires that a
state provide financial and management assurances before the
federal government spends Response Fund money on remedial
actions within the state.
Section 104(d)(1) provides the basic authority for
state Superfund response.43 Under that provision, states
42 In a number of recent cases, including Ohio v.
Georgeoff, No. C-31-1961 (N.D. Ohio, filed Oct. 1, 1981),
state governments have sued in disregard of the limitations
and requirements of section 104 and the NCP.
43 Section 104(d)(1) provides, in pertinent part:
Where the President determines that a
State or political subdivision thereof
has the capability to carry out any or
(Footnote 43 continued on next page.)
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V-25
may exercise Superfund response authority based on a federal
determination that the state "has the capability to carry
out" the response and has entered into a federal-state
agreement providing for state response. Significantly,
because the authority granted the state under section
104(d)(1) is the authority to take "actions authorized in
this section," the substantive standards of section 104 are
applicable to state response.
Congress hoped that many, even most, states would play
a central role in hazardous waste cleanup actions. Never-
theless, the requirement for federal approval and the main-
tenance of statutory controls over state activity reflect a
general congressional concern that not all states could deal
with the problems of hazardous waste sites, and that a
comprehensive federal framework for response was needed.
For example, during the House debate on H.R. 7020,
before President Reagan's "New Federalism" swept Washington,
then-representative David Stockman offered a substitute bill
(Footnote 43 continued from previous page.)
all of the actions authorized in this
section, the President may, in his
discretion, enter into a contract or
cooperative agreement with such State or
political subdivision to take such
actions in accordance with criteria and
priorities established pursuant to
section 105(8) of this title and to be
reimbursed for the reasonable response
costs thereof from the Fund.
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V-26
giving the states primary responsibility for addressing
hazardous waste sites, with the aid of federal funding, in
lieu of federal authority under Superfund.44 The Stockman
substitute was overwhelmingly rejected because the House did
not believe that all states were equally capable of doing
the job.45 Moreover, Congress recognized hazardous waste
response as a national problem deserving a comprehensive
legal framework.46
44 126 Cong. Rec. H9437-H9440 (daily ed. September 23,
1980).
45 During the debate on the Stockman bill, Representative
Florio stated:
Many states, quite frankly, are not
interested or are not capable of going
forward. And they do not want to. They
want to defer to the Federal Government.
Id. at H9441. Indeed, according to Representative Gore, the
states themselves "recocpize[d] that they have neither the
capacity nor the expertise" necessary to address the prob-
lem. Id. at H9449. Representative Gore stated that:
A number of States, among them
Michigan, California, New York, Ken-
tucky, and New Jersey, have repeatedly
testified before the Congress concerning
the severe limitations on the ability of
the states to deal with hazardous waste
sites and concerning the need as they
see it, for Federal legislation.
Id. at H9445.
46 Id. at H9445 (remarks of Representative La Falce). See
also id. at H9449 (remarks of Representative Martin). Thus,
Congressman La Falce concluded simply that "the States
cannot handle" the problem of responding to hazardous waste
sites. Id. at H9445.
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V-27
Even where a state or local government has not been
granted Superfund response authority under a section
104(d)(1) agreement, the state still must participate in any
federal remedial action using the Fund. As a condition to
the expenditure of federal funds on remedial action, section
104(c)(3) requires a state contract or cooperative agreement
providing a percentage of state funding, future maintenance
by the state, and state disposal of materials removed from
the site. To the extent provided in the contract or coop-
erative agreement and if in compliance with the NCP and
other requirements, state expenditures and actions under
section 104(c)(3) are pursuant to the federal scheme and
should be eligible for recovery under section 107(a)(4)(A).
The NCP, as promulgated, repeats and reinforces the
requirements of sections 104(d)(1) and 104(c)(3). Section
300.24 of the new NCP dealing with "state and local partici-
pation" encourages state and local governments to partici-
pate in cleanup operations, pursuant to section 104(d)
agreements.4 7
47 Under Section 300.24, states are encouraged to use
their own authorities to compel or undertake response
actions. Section 300.24 provides for the only use of Super-
fund authority:
"States may enter into cooperative
agreements pursuant to section 104(c)(3)
and (d) . . ., as appropriate, to under-
take actions authorized under subparts E
and F of this Plan. Requirements for
entering into these agreements are
included in sections 300.58 and 300.62
of this Plan."
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V-28
Section 300.62 of the NCP, which pertains to the "State
Role" in hazardous substance cleanup, recites the require-
ment of a contract or cooperative agreement under section
104(d)(1) in order to play a cleanup role and includes in
the Plan the section 104(c)(3) requirements for a state
financing and disposal commitments before federal funds can
be spent for remedial action in a state.
Not only are the commitments and agreements of sections
104(c)(3) and (d)(1) required by the NCP, state and local
governments must also show that the costs were not inconsis-
tent with the substantive and procedural provisions of the
NCP.48
d. Other plaintiffs can recover
only for response costs
incurred in compliance with
section 104 and the NCP.
Parties other than the federal and state governments,
including responsible parties,49 can recover response costs
in compliance with the substantive standards of section 104
and consistent with the NCP. Superfund § 107(a)(4)(B).
Cities, counties, and other "political subdivisions" of
states may be granted authority to conduct response actions
under the terms of section 104(d)(1). As with states, the
See pp. V-ll to V-18 supra.
See pp. V-50 to V-52 infra.
-------
V-29
exercise of section 104 authority by such political subdivi-
sions is conditioned on a federal determination that the
political subdivision has the capability to carry out the
action and on a contract or cooperative agreement between
the federal government and the political subdivision.
Exercise of such authority and recovery of costs are subject
to the standards of section 104.
Responsible parties can also conduct response actions
in lieu of governmental action, and then recover response
costs in appropriate cases. Superfund § 107(a)(4)(B).
Section 104(a)(1) authorizes federal removal or remedial
action unless others will properly carry out such action.
Thus, section 104 contemplates that the same response mea-
sures may be taken by private respondents as by federal or
authorized state authorities; the statute merely provides
that responsible parties may act in place of federal or
authorized state authorities when the President determines
that they will conduct the response properly.
Moreover, in any action under section 107(a)(4)(B),
recovery is limited to the "necessary costs of response
. . . consistent with the national contingency plan." Thus,
recovery is governed by the same substantial and procedural
standards applicable to federal and state response and
recovery under the NCP. In addition, section 300.25(d) of
-------
V-30
the Plan requires advance EPA approval of actions by other
persons in order for the costs to be reimbursable.50
B. Future Response Costs Cannot Be Recovered.
Section 107 expressly limits response cost recovery
under Superfund to costs that have been "incurred." Similar
language in the Clean Water Act has been held to require
government expenditures and completed cleanup operations
before suit. Superfund plaintiffs have improperly attempted
to circumvent this limitation by seeking injunctive relief
mandating the payment of future response costs and by seek-
ing a declaratory judgment for future response costs.
1. Costs must have been "incurred."
By its very terms, section 107 permits recovery of only
"incurred" response costs. Superfund simply provides no
recovery for future response costs.
Similar language limiting recovery to costs that have
been "incurred" appeared in the liability provisions of both
Section 300.25(d) provides as follows:
The prior authorization is only specifi-
cally tied to claims against the fund
under Section 111(a)(2) of Superfund.
But failure to obtain permission should
nonetheless be considered inconsistent
. with the plan for the analogous provi-
sions of Section 107(a)(4)(B).
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V-31
S. 1480 and H.R. 7020.51 Indeed, this was precisely what
former EPA Administrator Douglas Costle sought — "a revolv-
ing fund that would allow us to go in and clean up hazardous
waste sites first, then try to recover the costs of cleanup
later.1,52
The language of section 107 and the earlier bills
limiting recovery to costs already "incurred" is derived
from section 311(f) of the Clean Water Act, which provides
liability for "actual costs incurred." This language has
%
been construed to give rise to a cause of action only after
the response action has been performed and the money
expended.53
For example, in United States v. The Barge Shamrock,
635 F.2d 1108 (4th Cir. 1980), cert, denied, 454 U.S. 830
(1981), the court explicitly held that "[t]he cause of
action for recouping expenses incurred by the government
51 S. 1480 § 4(a); H.R. 7020 § 3071(b).
52 S. Rep. No. 848, 96th Cong. 2d Sess. 12 (1980).
53 Judicial construction of analogous terms from the Clean
Water Act is particularly persuasive in interpreting Super-
fund because, as one of the key sponsors observed during the
final Senate debate on Superfund, the Superfund legislation
is "modeled upon the experience with the Clean Water Act's
spill response program." 126 Cong. Rec. S14965 (daily ed.
Nov. 24, 1980) (remarks of Senator Randolph). See also
S. Rep. No. 848, 96th Cong., 2d Sess. 1 (1980), stating that
S. 1480, the Senate predecessor to the Superfund bill
enacted by Congress, "has its roots in the liability and
funding provisions provided in the Clean Water Act of 1972."
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V-32
does not fully accrue until the government has completely
exercised its option and completed the cleanup operation."
635 F.2d at 1110. As the court observed, the Clean Water
Act authorizes the President to act first and recover costs
later, "[i]n order to avoid the obvious consequences of
possible delay or ineffectiveness." Id. As a consequence,
claims for future amounts to be expended in planned or
continuing response actions are not cognizable.
2. Declaratory judgments for future
response costs are not available.
Superfund plaintiffs have sought declaratory judgments
that defendants are liable for response costs not yet incur-
red.54 This means of circumventing the express statutory
limitation, "costs incurred," must fail.35
An analogous case is United States v. Bums, 512 F.
Supp. 916 (W.D. Pa. 1981), where plaintiffs sought to avoid
the dollar limit on liability under section 311(f) of the
Clean Water Act by seeking a declaratory judgment under the
Toxic Substances Control Act. The court dismissed plain-
tiffs' claims, stressing that Congress intentionally limited
54 See Ohio v. Georgeoff, supra n.42.
55 Nor should the government be able to seek injunctive
relief under section 106 in order to avoid the costs
incurred limitation. See chapter 4.
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V-33
liability for discharges into navigable waters and that
plaintiffs would not be permitted to circumvent these limi-
tations by proceeding under a different act. 512 F. Supp.
at 919.
More generally, declaratory relief has traditionally
been held inappropriate where specific statutory procedures
are provided for the resolution of contested issues.56
This is so because "courts should refrain from exercising
jurisdiction under the Declaratory Judgment Act where
special statutory proceedings have been established to grant
the relief sought by the declaratory action." Clausell v.
Turner, 295 F. Supp. 533, 537 (S.D.N.Y. 1969) (denying
declaratory judgment to hold conviction unlawful, in light
of availability of habeas corpus petition).57 In view of
Congress1 comprehensive system for response and recovery
under Superfund, and the express limitation of recovery to
costs actually "incurred," courts are unlikely to grant
pre-cleanup declaratory judgments.
56 Independent Cosmetic Manufacturers and Distributors,
Inc. v. Dep't of Health Education and Welfare, 574 F.2d 553,
555-56 (D.C. Cir. 1978) (statute providing for administra-
tive hearing with appeal to circuit court).
57 See also Holiday Inns of America, Inc. v. Holiday
House, Inc., 279 F. Supp. 648, 649 (W.D. Pa. 1968), refer-
ring "to the impropriety of declaratory relief in a situa-
tion where a comprehensive statutory scheme has been estab-
lished" (declining to grant such relief where Congress
established procedures for NLRB adjudication of such mat-
ters ).
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V-34
Moreover, even though in certain circumstances the
existence of "another adequate remedy does not preclude a
judgment for declaratory relief," Fed. R. Civ. P. Rule 57,
the decision to grant a declaratory judgment is discretion-
ary. The availability of alternative relief, such as that
which would be available to Superfund plaintiffs in a subse-
quent action for response costs incurred, has been invoked
in denying declaratory relief.58
The doctrine of "ripeness" also provides a strong rea-
son for denying declaratory relief. Courts will not grant
declaratory judgments until the issues "have taken on fixed
and final shape." Public Service Commission v. Wycoff Co.f
Inc., 344 U.S. 237, 244-45 (1952). A fundamental principle
is whether the challenge presents a "purely legal question"
appropriate for declaratory judgment or whether "factual"
issues are relevant to the decision. Toilet Goods Associa-
tion, Inc. v. Gardner, 387 U.S. 158, 162, 164 (1967).
Accordingly, declaratory judgment claims for future response
costs are not ripe for decision because none of the key
factual issues will not have taken on "fixed and final
shape" until cleanup is completed. For as explained above,
53 See City of Highland Park v. Train, 519 F.2d 681, 692
(7th Cxr. 1975), cert, denied, 424 U.S. 927 (1976) (denying
relief where the cXean Air Act provides specific review
procedures); Cartier v. Secretary of State, 506 F.2d 191,
200 (D.C. Cir. 1974), cert, denied, 421 U.S. 947 (1975).
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V-35
recovery depends on plaintiff's compliance with the require-
ments of section 104 and the NCP, which cannot be determined
until response actions have been completed. See pp. V-ll to
V-29 supra. Moreover, the nature of the cleanup needed or
appropriate may be revised in light of new information that
may come available only after response actions have begun.
In sum, Superfund's goals, as well as sound judicial
administration, can only be achieved by requiring, at least
that each major phase of cleanup be completed before section
107 is invoked. Most courts are likely to eschew piecemeal
litigation and multiple trials even regarding different
phases of cleanup (e.g., groundwater and surface water).
The best solution from the standpoint of all concerned,
therefore, is likely to be cleanup first and litigation
later. Not only will this encourage prompt cleanup, but it
also will prevent needlessly complex judicial proceedings
and facilitate the just apportionment of response costs
among the Fund and the various responsible parties.
C. Recovery of Natural Resource Damages
Is Limited to Economic Loss by the
Federal Government or a State.
Section 107 authorizes recovery of damages incurred to
natural resources as a result of a release of hazardous sub-
stances, but carefully limits the scope of those damages.
Measurement of natural resource damages will be a critical
issue in many Superfund cases. Natural resource liability
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V-36
could often exceed response cost liability or provide a
detour around response cost limitations, unless its measure-
ment is properly restricted. A future rulemaking under
section 301 will set procedures for measurement and assess-
ment and will be most important in determining the scope of
potential liability. In the meantime, the statute and its
legislative history provide important guidance for assess-
ments and for the section 301 rulemaking.
The Act and its legislative history emphasize that the
measure of natural resource damages should be "economically
efficient," "cost-effective," and "accurate." Thus, the
natural resource damages recoverable under the statute were
limited to the lost economic value of federal or state
resources. Rehabilitation and restoration costs are not
imposed if they exceed the economic damages. To do other-
wise would not be "economically efficient" or "cost-
effective, " because it would devote more money to restoring
natural resources than they were worth in the first place.
This congressional requirement is consistent with applicable
common law precedents.
1. Natural resource damages may not
exceed reduced economic value.
Superfund authorizes recovery of "damages for injury
to, destruction of, or loss of natural resources," and the
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V-37
"reasonable costs of assessing such injury . . .." Super-
fund § 107(a)(4)(C).59
Federal officials designated under the NCP are to
assess natural resource damages, and their assessment is
given presumptive weight. Superfund § 111(h). In turn,
section 301 directs the President to "promulgate regulations
for the assessment of damages for injury to, destruction of,
or loss of natural resources." Superfund § 301(c)(1).60
59 The section goes on to provide that "[s]ums recovered
shall be available for use to restore, rehabilitate, or
acquire the equivalent of such natural resources by the
appropriate agencies of the Federal Government or the State
government but the measure of such damages shall not be
limited by the sums which can be used to restore or replace
such resources." Superfund § 107(f).
Section 107 also provides certain exemptions from
natural resource liability. There is no liability where
"such damages and the release of a hazardous substance from
which such damages resulted have occurred wholly before the
enactment of this Act." Superfund § 107(f). Nor is there
liability "where the party sought to be charged has demon-
strated that the damages to natural resources complained of
were specifically identified as an irreversible and irre-
trievable commitment of natural resources in an environ-
mental impact statement, or other comparable environmental
analysis, and the decision to grant a permit or license
authorizes such commitment of natural resources, and the
facility or project was otherwise operating within the terms
of its permit or license." Id.
60 The regulations are to be promulgated within two years
and are to provide:
(A) standard procedures for simplified
assessments requiring minimal field
observation, including establishing
measures of damages based on units of
(Footnote 60 continued on next page.)
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V-38
Natural resource damages are measured under a two-
pronged system. First, for a few releases requiring minimal
field investigation, the use of standardized tables is
authorized. Second, for any potentially significant natural '
resource damages, the statute requires the "best" estimate
of actual damages, including consideration of such factors
as the natural "ability of the ecosystem or resource to
recover."
The legislative history elaborates this two-pronged
system to include two other overriding principles. First,
economic values, rather than an intangible, inherent value
of an animal or a tree must be used. Second, reduction in
economic or land value is the primary measure of damages,
except where restoration costs less than the reduction in
land value.
(Footnote 60 continued from previous page.)
discharge or release or units of
affected area, and (B) alternative
protocols for conducting assessments in
individual cases to determine the type
and extent of short- and long-term
injury, destruction, or loss. Such
regulations shall identify the best
available procedures to determine such
damages, including both direct and
indirect injury, destruction, or loss
and shall take into consideration fac-
tors including, but not limited to,
replacement value, use value, and abil-
ity of the ecosystem or resource to
recover.
Superfund § 301(c)(2).
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V-39
The primacy of economic value was reflected in the
floor debates by Senator Simpson, who stated that the bill
called for use of "traditional legal rules for calculating
of damages," such as reduced land value.61 As discussed
infra, these common law rules call for a measurement of lost
economic value.
H.R. 7020, the original House-passed bill, also focused
recovery on the economic value of damaged natural resources.
But the House clearly did not intend for natural resource
damages to form a major part of the Superfund response
effort. H.R. 7020 thus limited natural resource damages to
ten percent of the total amount authorized for Superfund
response actions. H.R. 7020 § 3041(a)(2).
The measure of damages should generally be the reduc-
tion in land values resulting from damage to natural
resources rather than restoration costs. Senator Simpson
detailed the factors that should be considered in measuring
natural resource damages:
[Rehabilitation should be planned and
cost effective — those are sound prin-
ciples of public administration. I also
trust that the traditional legal rules
for calculating of damages for injury in
tort will be observed as part of cost
effectiveness. For example, the law
achieves cost effectiveness by awarding
the difference in value before and after
61 126 Cong. Rec. S15008 (daily ed. November 24, 1980).
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V-40
the injury, and where the injured inter-
est can be restored to its original con-
dition for less than the difference in
value, the cost fof] restoration is
used.s:Z"
Similarly, the Senate Report on S. 1480, the bill from which
Superfund's natural resource damage provisions evolved,
stressed that "actions to restore, rehabilitate, or replace
natural resources under the provisions of this Act be accom-
plished in the most cost-effective manner possible."63
The Report on S. 1480 also elaborates the nature of the
two-pronged approach to damage assessment. For "'minor'
releases," the Committee intended that assessments should
"rely on a combination of habitat values, tables of values
for individual species, and previously conducted surveys and
laboratory studies, related to units of discharge or units
of affected area."64
By contrast, for substantial natural resource damage,
the Report mandates a "site-specific damage assessment,"
including "extensive fieldwork.1,65 The Committee
62 Id. (emphasis supplied). Other Senators also stressed
that natural resource damages should be limited to what was
economically reasonable. Senator Stafford noted that any
"rehabilitation and replacement of natural resources
[should] be accomplished in the most cost-effective manner
possible." Id.
63 S. Rep. No. 848, 96th Cong., 2d Sess. 85 (1980).
64 Id. at 86.
65 Id. This would include a system for "assessing the
value of direct losses of organisms and their habitat and
indirect losses of organisms and habitat through ecological
interactions." Id.
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V-41
recognized that "procedures for these types of monetary cost
assessments are sometimes hard to define," but the Agency
was directed to "make a decision as to which are the most
accurate and efficient for accomplishing the mandates in
this legislation.1,68
2. Common law confirms that reduced
economic value normally should
be the measure of resource damages.
As Senator Simpson observed, the common law employs the
most "cost-effective" approach, measuring damages in terms
of the reduced value of land or the market value of products
damaged or destroyed. Restoration costs in excess of this
net reduction in value are not granted. Where restoration
costs are less than the net reduction in value, however, the
efficient measure of damages is the cost of restoring the
resources.
When injured or destroyed natural resources have an
independent economic value of their own, such as marketable
timber or fish in a hatchery, the measure of damages is the
value of the destroyed resource.67 Many natural resources,
66 Id.
87 See, e.g., Chevron Oil Co. v. Snellgrove, 175 So.2d
471, 474 (Miss. 1965) (timber); State Dep't of Fisheries v.
Gillette, 621 P.2d 764, 768 (Ct. App. Wash. 1980) (fish in
hatchery); Nash & Windfohr v. Edens, 109 S.W.2d 496, 500
(Ct. App. Tex. 1937) (strawberry plants); First Nat'l Bank
v. Amco Engineering Co., 335 N.E.2d 591, 593 (Ct. App. 111.
1975) (dicta).
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V-42
however, will have no such clearly ascertainable value, and
courts must turn to other sources to value any damages.
The virtually unanimous rule in state courts is that
damages to natural resources that lack their own economic
value should be measured by the reduction in the market
value of the land to which they are attached.68 In some
cases, however, it may be very difficult to evaluate the
diminution of market value of land due to damage to natural
resources, especially on publicly-owned land. Even in these
cases, however, the government has established its ability
to measure losses in the closely analogous terms of reduced
benefits from land (see p. V-46 infra), and these techniques
should be used under Superfund.
An exception to this general rule exists where the
injured or destroyed natural resouces can be restored to
their original condition for less cost than the decreased
88 See, e.g., Atlas Chemical Industries, Inc. v. Anderson,
524 S.W.2d 681, 687 (Tex. 1975) (damage to land from pol-
luted creek); Fiske v. Moczik, 329 So.2d 35, 37 (Ct. App.
Fla. 1976) (ornamental trees); First Nat'l Bank v. Amco
Engineering Co., 335 N.E.2d at 593 (damage to shade trees);
Farny v. Bestfield Builders, Inc., 391 A.2d 212, 214 (Del.
1978) (damage to shade trees); Borland v. Sanders Lead Co.,
Inc., 369 So.2d 523 (Ala. 1979) (damage to agricultural land
from airborne lead); Pehrson v. Saderup, 498 P.2d 648, 650
(Utah 1972) (damage to lilacs); Chevron Oil Co. v. Snell-
grove, 175 So.2d at 474 (damage to trees from oil explora-
tion); Phillips Petroleum Co. v. Mangan, 114 P.2d 454, 456
(Okla. 1941) (damage to soil and shade trees).
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V-43
market value of the land.69 Where restoration costs exceed
the reduction in land value, however, they are an inappro-
priate measure of damages.70 Moreover, when restoration is
proper, it should be tempered by cost-effectiveness consid-
erations. In Farny v. Bestfield Builders, supra n.68, a
case involving damages to large residential shade trees, the
court acknowledged that "replacement cost may be considered
to the extent that the cost is reasonable and practical,"
but required consideration of less costly replacement alter-
natives :
[W]hether the plaintiffs Farny as rea-
sonable owners would well have replaced
the dead trees, perhaps then fully
matured, in light of the fact that their
replacement cost may unreasonably exceed
their marginal aesthetic value; or
whether the plaintiffs Farny would have
replaced the lost trees with less mature
trees of a somewhat lower replacement
cost but with an aesthetic value near to
that of the lost trees.
69 Chevron Oil Co. v. Snellgrove, 175 So.2d at 474
(restoring seedlings). See also Watkins v. FMC Corp.
531 P.2d 505 (Ct. App. Wash. 1975) (damage to apple trees);
Steckman v. Quincy, 0. & K.C.R. Co., 165 S.W. 1122 (Mo. App.
1914) (dicta). Of course, section 107(f) mandates that
restoration costs may not be the sole measure of damages,
and plaintiffs should also be able to recover any losses
incurred during the time pending completion of restoration.
See id. at 1123-24.
70 See, e.g., Maldonado v. Connecticut Light and Power
Co., 328 A.2d 120 (Conn. 1974) (damage to shade trees);
Nillson v. Hiscox, 158 So.2d 799 (Ct. App. Fla. 1963) (dam-
age to large trees); First Nat'l Bank v. Amco Engineering
Co., 335 N.W.2d at 593 (damage to shade trees); Pehrson v.
Saderup, 498 P.2d at 650 (damage to lilacs); Governale v.
Owosso, 229 N.W.2d 918 (Mich. App. 1975) (damage to shade
trees); Watkins v. Mountain Home Cooperative Irrigation Co.,
197 P. 247, 251 (Idaho 1921) (damage to shade trees).
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V-44
391 A.2d at. 214. The court stressed that it would not
impose costs that were "wholly disproportionate to the
damage inflicted," and held that "it cannot be expected that
restoration or replacement will exactly duplicate what was
damaged or destroyed." Id.
Finally, the common law, like Superfund, requires
consideration of "the ability of the ecosystem or resource
to recover." In Watkins v. FMC Corp., supra n.69, an acci-
dental herbicide spraying damaged apple trees. Plaintiffs
sought recovery of the entire value of the trees, but the
court noted that "there was no root damage and that the
trees will come back to a vigorous tree," by natural pro-
cesses. 531 P.2d at 506. Permanent damages were therefore
denied, and plaintiffs were awarded only those damages that
they would suffer in the time prior to the natural recovery
of the trees. Id.
In short, the overriding goal of common law damages for
loss of natural resources is achieving the most economically
efficient measure possible. Plaintiffs in section 107
cases, however, may argue that courts should impose stipu-
lated damages in the form of a certain specified amount for
each animal lost or each acre damaged.71
71 The "unit-cost" type formula was employed by the dis-
trict court in Commonwealth of Puerto Rico v. ss Zoe
Colocotroni, 456 F. Supp. 1327 (D.P.R. 1978), affirmed in
part, vacated in part, 628 F.2d 652 (1st Cir. 1980), cert.
(Footnote 71 continued on next page.)
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V-45
A unit-cost formula for assessing natural resource
damages, however, is generally contrary to the Act.
Although section 301(c)(2) permits such an approach for
(Footnote 71 continued from previous page.)
denied, 450 U.S. 912 (1981). This case involving local
statutes and the Clean Water Act granted damages, inter
alia, of six cents per small invertebrate creature. 628
F7I3 at 1344-45.
The circuit court vacated this part of the damage
award, denying recovery for "the loss of small, commercially
valueless creatures" that could not be replaced anyway.
628 F.2d at 677. The court also rejected diminished mone-
tary value as the measure of damages, however, and used the
reasonable costs of restoration as the proper measure.
628 F.2d at 673-74. The requirement of compensation for
actual restoration costs was based in large part on the
language of the Puerto Rican statute under which the govern-
ment recovered natural resource damages. 628. F.2d at 674.
The legislative history discussed above indicates that
a different result would obtain under Superfund. Although
much of Superfund liability is patterned after § 311 of the
Clean Water Act, Congress intended to limit the scope of
natural resource damages under Superfund by applying tradi-
tional common law standards of economic loss. Even if
restoration costs were appropriate under Superfund, however,
the Colocotroni decision clearly limits damages to reason-
able) cost-effective restoration measures, taking into
account natural regenerative processes.
The focus in determining such a remedy
should be on the steps a reasonable and
prudent sovereign or agency would take
to mitigate the harm done by the pollu-
tion, with attention to such factors as
technical feasibility, harmful side
effects, compatibility with or duplica-
tion of such regeneration as is natur-
ally to be expected, and the extent to
which efforts beyond a certain point
would become either redundant or dispro-
portionately expensive.
628 F.2d at 675 (emphasis supplied).
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V-46
"minor" damages, that section makes clear that for signifi-
cant natural resource losses, the measure of damages must be
"site-specific" and "the most accurate and efficient" pos-
sible. See p. 40 supra.
EPA has readily available means for performing such an
accurate and efficient measure of damages. In environmental
impact statement cases, courts have required agencies to
assess economically natural resource damages from major
federal projects. See Alabama v. Corps of Engineers, 411 F.
Supp. 1261 (N.D. Ala. 1976). The procedure recommended by
the court included placing monetary values on economic
losses from reduced fishing, hunting, and other recreational
activities. 411 F. Supp. at 1270-71. This tool has been
used in common law damage measurements as well. State Dep't
of Fisheries v. Gillette, 621 P.2d at 768.72
The use of these and similar procedures will enable
courts to obtain a reliable measurement of economic losses
resulting from natural resource damages and fulfill Con-
gress' intent of obtaining the most accurate and efficient
measure of damages.
72 EPA has proposed guidelines for measuring natural
resource losses for use in preparing regulatory impact
analyses pursuant to President Reagan's Executive Order
12291. See Guidelines for Performing Regulatory Impact
Analyses (draft) (April 15, 1982). These guidelines are now
undergoing review within the agency. They outline a frame-
work for valuing natural resource damages in terms of esti-
mates of "willingness to pay," using studies of travel costs
and property values to measure the economic value of recrea-
tion effects. Id. at 11-12, Appendix A.
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V-47
3. Natural resource damages may be
recovered only by the federal
and state governments, and are
limited to public resources.
Only the federal and state governments may recover
natural resource damages under section 107, and only damages
to publicly owned or controlled resources may be recovered.
Congress did not intend section 107 to authorize recovery
for damages to privately-owned natural resources, and it
eliminated provisions for private recovery from the compro-
mise legislation. Section 107(f) expressly limits the
recovery of natural resource damages to the United States
and states:
In the case of an injury to, destruction
of, or loss of natural resources under
subparagraph (C) of subsection (a)
liability shall be to the United States
Government and to any State for natural
resources within the State or belonging
to, managed by, controlled by, or apper-
taining to such State. . . .
(emphasis supplied).
In addition, the statutory definition of "natural
resources" includes only resources "belonging to, managed
by, held in trust by, appertaining to, or otherwise con-
trolled by the United States . . . any State or local
government, or any foreign government." Section 101(16).73
73 As the Senate committee report explained the virtually
identical provisions of S. 1480:
(Footnote 73 continued on next page.)
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V-48
Damage to privately-owned resources therefore provides no
basis for recovery under section 107.
Unlike the final legislation, S. 1480 would have
allowed private recovery for some economic losses resulting
from harm to natural resources.74 But the provisions for
private recovery were deliberately eliminated from the
compromise legislation along with provisions for personal
inj ury recovery.7 5
(Footnote 73 continued from previous page.)
In such cases of harm to natural
resources the President, or the author-
ized representative' of any State, shall
act on behalf of the public as trustee
in. recovering for such damage, injury,
or loss of such resources.
S. Rep. No. 848, 96th Cong. 2d Sess. 84 (1980). The per-
tinent provisions of S. 1480 and the final compromise legis-
lation are identical in all material ways. Compare S. 1480
§ 4(a)(2)(C), with Superfund § 107(a)(4)(C) (creating lia-
bility for "injury to, destruction of, or loss of natural
resources"); S. 1480 § 4(b), with Superfund § 107(f) (pro-
viding that "liability shall be to the United States Govern-
ment and to any State"); S. 1480 § 2(b)(14), with Superfund
§ 101(16) (defining "natural resources" as including only
resources "belonging to, managed by, held in trust by,
appertaining to, or otherwise controlled by the United
States . . . any State or local government, or any foreign
government.")
74 For example, S. 1480 would have allowed private plain-
tiffs to recover for "any loss of use of natural resources,
without regard to the ownership or management of such
resources" [S. 1480 § 4(a)(2)(D)], and for "any loss of
income or profits or impairment of earning capacity result-
ing from . . . injury to or destruction of real or personal
property or natural resources, without regard to the owner-
ship of such property or resources" [S. 1480 § 4(a)(2)(E)].
75 See, p. v-8 supra.
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V-49
Accordingly, the federal and state governments are the
only proper plaintiffs in actions to recover natural
resource damages under section 107, and may recover only
damages for public resources.
III. PROPER SECTION 107 PLAINTIFFS INCLUDE
THE FEDERAL AND STATE GOVERNMENTS,
AND IN ACTIONS TO RECOVER RESPONSE
COSTS, "ANY OTHER PERSON."
Section 107 specifically identifies the plaintiffs who
may seek to recover each of the two kinds of monetary relief
— response costs and natural resource damages ~ available
under the liability provisions. Under section 107, the
United States, states, and "other persons" may sue to
recover response costs, although only the United States and
states are proper plaintiffs in actions to recover natural
resource damages.
The ability of the "United States' Government or a
State" to recover response costs is unquestioned. But,
despite its apparent breadth, the provision that "any other
person" may recover response costs will require interpre-
tation. 76
78 Sections 107(a)(4)(A) and (B) provide for the recovery
of response costs by the United States, a state, or "any
other person" who has incurred response costs. Specifi-
cally, those sections provide recovery for
(Footnote 76 continued on next page.)
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V-50
In the recent decision in City of Philadelphia v.
Step an Chemical Co., 544 F. Supp. 1135 (E.D. Pa. 1982),
defendants moved to dismiss on the ground that the city
could not sue as "any other person" under section 107(a)(4)
(B) because it too was potentially liable as the owner and
operator of the disposal site in question- The court held,
however, that Philadelphia could bring an action against
off-site generators to recover response costs.
The Stepan court rejected the argument that the term
"any other person" must be interpreted as any person other
(Footnote 76 continued from previous page.)
(A) all costs of removal or remedial
action incurred by the United States
Government or a State not inconsistent
with the national contingency plan?
(B) any other necessary costs of
response incurred by any other person
consistent with the national contingency
pian • * ..
The analogous provisions of S. 1480 were similar, but
not identical to, sections 107(a)(4)(A) and (B). The
S. 1480 provisions did not expressly require consistency
with NCP, and recovery by "any person" was limited to the
costs of "removal" as defined in section 311(a)(8) of the
Clean Water Act. The S. 1480 provisions read:
(A) all costs of removal, or remedial
action incurred by the United
States Government or a State, and
(B) any other costs or expenses incur-
red by any person to remove a
hazardous substance as the terms
"remove" or "removal" are defined
in section 311(a)(8) of the Clean
Water Act ....
S. 1480 §§ 4(a)(1)(A), (B).
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V-51
than responsible parties with potential section 107 liabil-
ity. Instead, according to the court, the term "any other
person" refers to persons other than the federal and state
governments:
The provision merely sets forth, in
general terms, three categories of
"persons" entitled to recover response
costs from those parties designated as
liable for such costs. . . . Under
42 U.S.C. § 9601(21) both federal and
state governments are subsumed under the
definition of person. In the context in
which it appears, then, the term "any
other person" is quite conceivably
designed to refer to persons other than
federal or state goveimments and notT as
defendants argue, to persons other than
those made responsible under the act.
544 F. Supp. at 1142 (emphasis supplied).
The Stepan holding, although perhaps limited because
the plaintiff there was a municipality,77 nevertheless
would encourage persons who conduct voluntary cleanup to
recover cleanup costs in excess of its fairly apportioned
share from other responsible parties. Indeed, the same
77 An issue the court did not consider is whether the City
of Philadelphia, as a political subdivision of Pennsylvania,
is included within the term "State" as used in section
107(a)(4)(A) or whether Philadelphia is "any other person"
under section 107(a)(7)(B). It could be argued that Phila-
delphia is "any other person" and not within the term state
becase section 104(a)(4)(A) and the definition of state in
section 101(27) make no mention of political subdivisions,
while section 104(d)(1) specifically refers to the "state or
political subdivision." Pennsylvania, however, should not
be allowed to evade the requirements of sections 104(c)(3)
and 104(d)(1) by havings its subdivisions sue as "any other
person" under section 104(a)(4)(B). On this basis, Phila-
delphia should be included within the term "state" for
purposes of section 107(a)(4).
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V-52
would be true even if cleanup were involuntary in the sense
of being conducted pursuant to an administrative or judicial
order. Accordingly, the Stepan decision appears to conflict
with joint and several liability and to comport with appor-
tionment among responsible parties.
This reading of the statute is also supported by sec-
tion 111(a)(1), which after providing for Fund payment of
"governmental response costs," specifies that:
[Pjayment of any claim for necessary
response costs incurred by any other
person as a result of carrying out the
national contingency plan . . . Pro-
vided, however, That such costs must be
approved under said plain and certified
by the responsible Federal official. . ..
Section 111(a)(2) (emphasis in original). The Stepan
court's analysis of the term "any other person" in section
107(a)(4)(B) applies with even greater force to the use of
the same term in section 111(a)(2), which in context can
only mean other than the "governmental response" dealt with
in section 111(a)(1).78 Accordingly, plaintiffs in
78 Contrary to the argument made by defendants and
rejected in Stepan, this construction of §§ 107(a)(4)(B) and
111(a)(2) need not lead to "a merry go round of litigation
with the government suing a responsible person which in turn
could sue other responsible persons which in turn could
claim against the fund and so forth." 544 F. Supp. at 1141.
Under either § 107 or § 111, a responsible party should
recover only those costs of response which exceed his pro-
portionate share of liability at the site. Thus, at most, a
responsible party could recover his excess costs from the
Fund, which in turn would be subrogated to his claims
against other responsible parties. See § 112(c)(1).
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V-53
response cost actions under section 107 may include the
United States, states, and "any other person," including a
responsible party, who incurs response costs.
IV. TO BE LIABLE, A DEFENDANT MUST BE
SPECIFICALLY TARGETED IN SECTION 107.
Section 107 identifies four categories of potentially
liable defendants. Present owners and operators of vessels
and facilities may be liable for releases at disposal sites
and elsewhere, such as an accident scene. Superfund § 107
(a)(1). In addition, at disposal or treatment facilities,
some past owners and operators, certain transporters, and
some generators may also be liable. Superfund §§ 107(a)(2)-
(4).79
The statutory language defining the four classes of
Superfund defendants is derived from the analogous provi-
sions of S. 1480.80 Neither S. 1480 nor the final legis-
lation attempted to impose liability on all past owners and
79 Section 107(a) was poorly drafted and requires some
interpretive modification. Read literally, the section
would impose liability only on certain transporters, under
§ 107(a)(4). Sections 107(a)(1), (2) and (3), dealing with
owners, operators, and generators, contain no liability
language. A sensible construction of section 107(a) can be
achieved only be reading the liability language in § 107(a)
(4) as modifying each of §§ 107(a)(l)-(4).
80 See S. 1480 §§ 4(a)(i)-(iv). But the legislative
history of S. 1480 must be used cautiously in interpreting
the final legislation, both because the language defining
potentially liable parties was amended in the compromise and
because the terms of the compromise were intended to amelio-
rate the harsh aspects of the S. 1480 liability regime.
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V-54
operators, transporters, and generators connected with a
disposal site. Instead, Congress intended to limit liabil-
ity to those best able to control the risks posed by waste
disposal. As the Senate committee report on S. 1480 stated,
By holding the factually responsible
person liable, S. 1480 encourages that
person — whetjier a generator, trans-
porter or disposer of hazardous sub-
stances — to eliminate as many risks as
possible.81
This policy restricts the potentially liable parties to
those who were in a position to control the risk.
A. Present Owners and Operators
Are Broadly Liable.
All present owners and operators are potential defen-
dants under section 107.82 Because they are generally in
the best position to control risk, Congress imposed broad
liability to encourage them to limit risk.
Unlike other sections pertaining to past owners and
operators, transporters, and generators, section 107(a)(1)
81 S. Rep. No. 848, 96th Cong., 2d Sess. 33 (1980).
82 Section 107(a)(1) identifies as responsible "the owner
and operator of a vessel (otherwise subject to the juris-
diction of the United States) or a facility . . .."
The language of § 107(a)(1) is identical to § 4(a)(1)
of S. 1480, except for the addition of the parenthetical
clause "otherwise subject to the jurisdiction of the United
States," which was added during Senate debate in a group of
amendments described as "technical" or "minor" amendments.
126 Cong. Rec. S14988 (daily ed. Nov. 24, 1980).
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V-55
is not limited to disposal or treatment sites.83 Suit can
be brought against present owners and operators of all
"facilities," defined broadly to include buildings, pipes,
wells, pits, ponds, landfills, storage containers, motor
vehicles, and aircraft.84 Thus, owners and operators of a
track from which a hazardous substance is released in a
highway accident are potential defendants.85 Similarly,
83 The application of the statute to releases other than
from disposal sites was noted in the final Senate debate by
Senator Randolph:
Accidents -- whatever their cause —
which result in, or can reasonably be
expected to result in releases of hazar-
dous pollutants would not be exempt from
the requirements and liabilities of this
bill. Thus fires, ruptures, wrecks and
the like invoke the response and lia-
bility porvisions [sic] of the bill.
126 Cong. Rec. S14965 (daily ed. Nov. 24, 1980). See also
id. at S14966 (remarks of Senator Stafford, detailing the
need for response to "spills and other nonwaste disposal
incidents").
84 Superfund § 101(9). The Act contains a circular defi-
nition of the owner or operator of a facility as "any person
owning or operating such facility." Superfund § 101(20)(A).
The potential defendants also include all present owners and
operators of "vessels," defined as "every description of
watercraft or other artificial contrivance used, or capable
of being used, as a means of transportation on water."
Superfund § 101(28). The "owner or operator" of a vessel
includes "any person owning, operating, or chartering by
demise, such vessel." Superfund § 101(20)(A).
85 The statutory definition of "owner or operator" pro-
vides expressly that "in the case of a hazardous substance
which has been accepted for transportation by a common or
contract carrier . . . the term 'owner or operator' shall
mean such common carrier or other bona fide for hire carrier
acting as an independent contractor during such transporta-
tion . . Superfund § 101(20)(B).
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V-56
present owners and operators of a chemical manufacturing
plant from which a release occurs could be sued. Superfund
107(a)(1).
Moreover, present owners and operators of disposal
sites are potential defendants under section 107(a)(1) even
where they had no connection with past disposal operations
at the site.86 Present owners and operators are generally
in the best position to prevent current releases, given
their current knowledge of site conditions and access to the
site.
B. Past Owners and Operators
Are Liable Only if Disposal
Occurred During Their Tenure.
Potential section 107 defendants also include past
owners and operators.87 Unlike section 107(a)(1), section
107(a)(2) is limited expressly to owners or operators of
facilities at which hazardous substances were disposed.
86 Unlike the section 107(a)(2) provision for past owners
and operators, the applicability of section 107(a)(1) is not
limited to those who owned or operated a disposal site "at
the time of disposal."
87 Section 107(a)(2) brings in "any person who at the time
of disposal of any hazardous substance owned or operated any
facility at which such hazardous substances were disposed
of . . This subsection was modeled after § 4(a)(ii) of
S. 1480, with two changes. The term "facility or site" was
changed to "facility," and the term "are disposed of" was
changed to "were disposed of."
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V-57
Moreover, past owners and operators are potentially
liable only if they owned or operated the disposal facility
"at the time of disposal." Superfund § 107(a)(2) (emphasis
supplied). Other owners and operators, who came before or
after the relevant disposal action, but who no longer own or
operate the facility, are not covered. Congress thereby
recognized that intervening owners and operators who have no
ability to control hazardous waste disposal or fault for
current releases should not be subject to liability.
C. Only Transporters Who Select Disposal
Sites or Cause Releases Are Liable.
Section 107(a)(4) includes only those transporters who
select disposal or treatment facilities as potential defen-
dants.88 Consequently, transporters who do not select
disposal or treatment facilities or sites are not liable.
Common carriers can be held liable only as "owners or opera-
tors" for releases which occur "during transportation.1,89
88 Section 104(a)(4) provides in pertinent part as fol-
lows:
Any person who accepts or accepted any
hazardous substances for transport to
disposal or treatment facilities or
sites selected by such person ....
This provision is virtually identical to § 4(a)(iv) of
S. 1480, but the term "accepts" in the S. 1480 provision was
changed to read "accepts or accepted" in the final legisla-
tion.
89 Superfund § 101(20)(B).
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V-58
But transporters not selecting sites have no responsibility
after delivery to a disposal or treatment facility.90
In short, Congress limited the liability of transpor-
ters to the two circumstances where they control the risk of
release. Transporters (i) may be liable as "owners or
operators" for in transit releases and (ii) may be liable as
transporters for releases from disposal or treatment facili-
ties they select.
D. Only Generators Who Select
Disposal Sites Are Liable.
Some off-site generators at disposal or treatment
facilities are potentially liable. Superfund § 107(a)(3).
Although Superfund does not use the term "generator," it
includes as potential section 107 defendants:
Section 101(20)(C) provides:
[I]n the case of a hazardous substance
which has been delivered by a common or
contract carrier to a disposal or treat-
mint facility and except as provided in
section 107(a)(3) or (4) (i) the term
"owner or operator" shall not include
such common or contract carrier, and
(ii) such common or contract carrier
shall not be considered to have caused
or contributed to any release at such
disposal or treatment facility resulting
from circumstances or conditions beyond
its control.
(Emphas i s supplied).
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V-59
[A]ny person who by contract, agreement,
or otherwise arranged for disposal or
treatment, or arranged with a transpor-
ter for transport for disposal or treat-
ment, of hazardous substances owned or
possessed by such person, by any other
party or entity, at any facility owned
or operated by another party or entity
and containing such hazardous substances
..91
According to this provision, generator liability is
expressly limited to instances where a generator "arranged
for disposal or treatment, or arranged with a transporter
for disposal or treatment, at any facility" owned or oper-
ated by others.92 Superfund liability does not attach
where the generator makes some other distribution of a
hazardous substance, such as a sale or distribution in
commerce.93 Indeed, Superfund expressly adopts the defini-
tions of "disposal" and "treatment" set forth in section
91 Section 107(a)(3). This section was derived, with some
changes, from § 4(a)(iii) of S. 1480. The debates on the
final compromise bill do not explain the revisions in the
language of the generator provision. Significantly, how-
ever, both § 107(a)(3) and the S. 1480 provision did not
include all off-site generators as potential defendants.
92 As the court recognized in United States v. Wade supra,
some past off-site generators are subject to suit under this
provision. 546 F. Supp. at 793. But the Wade opinion,
which dealt only with the government's claims under Super-
fund § 106 and RCRA § 7003, did not consider the precise
scope of generator liability under § 107(a)(3).
93 Generators could be liable as owners or operators for a
release or threatened release of a hazardous substance from
a manufacturing facility, disposal site, or other facility
that they presently owned or operated. See pp. V-54 to V-56
supra.
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V-60
1004 of the Solid Waste Disposal Act, which does not include
commercial distribution.94
Moreover, section 107(a)(3) is best interpreted as
covering only off-site generators who arrange for disposal
or treatment at a specifically selected facility.95 This
94 Superfund § 101(29). Under the Solid Waste Disposal
Act:
The term "disposal" means the discharge,
deposit, injection, dumping, spilling,
leaking, or placing of any solid waste
or hazardous waste into or on any land
or water so that such solid waste or
hazardous waste or any constituent
thereof may enter the environment or be
emitted into the air or discharged into
any waters, including ground waters.
42 U.S.C. § 6903(3) (1976). The Solid Waste Disposal Act
also provides that:
The term "treatment,11 when used in
connection with hazardous waste, means
any method, technique, or process,
including neutralization, designed to
change the physical, chemical, or bio-
logical character or composition of any
hazardous waste so as to neutralize such
waste or so as to render such waste
nonhazardous, safer for transport,
amenable for recovery, amenable for
storage, or reduced in volume. Such
term includes any activity or processing
designed to change the physical form or
chemical composition of hazardous waste
so as to render it nonhazardous.
42 U.S.C. § 6903(34) (1976).
95 The analogous provision of S. 1480 contained language
very similar to that of § 107(a)(3):
(Footnote 95 continued on next page.)
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V-61
limit on section 107(a)(3) is strongly supported by the
parallel provisions of section 107(a)(4), dealing with
transporters. As detailed above,96 transporters are poten-
tially liable in connection with releases from a disposal or
treatment facility only where they selected the facility.
Accordingly, where the generator arranges for disposal at a
specific site, the transporter has no liability; where the
transporter is responsible for site selection, the generator
has no liability.97
(Footnote 95 continued from previous page.)
[A]ny person who by contract, agreement,
or otherwise arranged for disposal,
treatment, or transport for disposal or
treatment by any other party or entity
of hazardous substances owned or posses-
sed by such person, at facilities or
sites owned or operated by such other
party or entity and containing such
hazardous substances ....
S. 1480 § 4(a)(iii). Thus, the S. 1480 provision applied
only to a generator who "arranged for disposal, treatment,
or transport for disposal or treatment by any other Party or
entity . . . at facilities or sites owned or operated by
such other party or entity . TT" (Emphasis supplied).
The revision or this language in the final compromise bill
was not explained in debate, but the compromise was designed
to ameliorate the harsh aspects of S. 1480, not to make
liability more severe. See pp. V-6 to V-9 supra. Thus,
§ 107(a)(3) must be read to limit the class of generator
defendants at least as strictly as the terms of s. 1480.
96 See pp. V-57 to V-58 supra.
97 Plaintiffs, however, are likely to contend that the
language of section 107(a)(3), which is not as clear on
limiting liability to those who selected sites as is the
parallel language of secton 107(a)(4), should be given an
expansive interpretation. But failure to limit generator
(Footnote 97 continued on next page.)
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V-62
By limiting liability to site owners and operators, and
parties actually responsible for the selection of disposal
or treatment facilities, Congress implemented the logical
policy of establishing liability only for those in a posi-
tion to control the risk. When the transporter selects the
disposal or treatment facility, the generator has no control
over ultimate disposition and should not be held liable.
Moreover, a transporter assuming responsibility for site
selection normally should have been compensated for the use
of his expertise, and should therefore bear all liability
for improper site selection. An even stronger argument can
be made that a generator should not be liable when the
generator selects a specific site, but the transporter
disregards instructions and takes the waste to another site
where a problem arises.
Accordingly, not all off-site generators are subject to
section 107 suits. Off-site generators who did not choose a
specific disposal or treatment facility were in no position
to control the risk and are not proper defendants under
section 107.
(Footnote 97 continued from previous page.)
liability to those who selected sites would render part of
the section's language superfluous and defeat the policy
objective of assigning liability to the causally responsible
party.
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V. SECTION 107 PROVIDES OTHER DEFENSES
AND LIABILITY LIMITATIONS.
Section 107 provides defenses based on acts of God,
acts of war, and acts or omissions of third parties. It
also establishes defenses or limitations on liability for
federally permitted releases, pesticide applications, and
"good Samaritan" cleanup actions, and sets overall monetary
limits on liability.
A. Defenses Based on Acts of God, War,
and Third Parties Are Provided.
Releases or threatened releases caused solely by per-
sons other than the defendant are not actionable. But the
defendant must show "by a preponderance of the evidence"
that the release or threatened release and resulting damages
"were caused solely by" an act of God, war, or a third
party.98
98 Section 107(b) provides:
There shall be no liability under subsection (a) of
this section for a person otherwise liable who can
establish by a preponderance of the evidence that the
release or threat of release of a hazardous substance
and the damages resulting therefrom were caused solely
by —
(1) an act of God;
(2) an act of war;
(3) an act or omission of a third party other
than an employee or agent of the defendant, or than one
whose act or omission occurs in connection with a
contractual relationship, existing directly or indi-
rectly, with the defendant (except where the sole
contractual arrangement arises from a published tariff
(Footnote 98 continued on next page.)
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V-64
The legislative history of H.R. 7020, from which the
section 107(b) defense provisions were principally derived,
shows that the standard of proving causation under the
defense provisions is the same standard applicable to the
plaintiff's cause of action." Thus, "the usual common law
principles of causation, including those of proximate causa-
tion" apply to the section 107(b) defenses as well as to
plaintiff's proof of causation under section 107(a).100
The third-party defense of section 107(b)(3) is con-
siderably more complex and potentially more important than
the act of God and act of war defenses.101 The third-party
provision of H.R. 7020, as reported out of committee in the
House, provided a defense based on:
(Footnote 98 continued from previous page.)
and acceptance for carriage by a common carrier by
rail), if the defendant establishes by a preponderance
of the evidence that (a) he exercised due care with
respect to the hazardous substance concerned, taking
into consideration the characteristics of such hazar-
dous substance, in light of all relevant facts and
circumstances, and (b) he took precautions against
foreseeable acts or omissions of any such third party
and the consequences that could foreseeably result from
such acts or omissions; or
(4) any combination of the foregoing paragraphs.
99 H.R. Rep. No. 1016, Part I, 96th Cong. 2d Sess. 34
(1980).
100 at 33; see also chapter 3.
101 An "act of God" is "an unanticipated grave natural
disaster or other natural phenomenon of an exceptional,
inevitable, and irresistible character, the effects of which
could not have been prevented or avoided by the exercise of
due care or foresight." Section 101(1). The term "act of
war" is not defined in the statute.
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V-65
an act or omission of a third party if
the defendant establishes that he exer-
cised due care with respect to the
hazardous waste concerned, taking into
consideration the characteristics of
such hazardous waste.102
The committee version of H.R. 7020's relatively simple
provision was amended on the House floor. Representative
Gore's amendment made the third-party defense available only
if the third party was neither "an employee or agent of the
defendant," nor "a person whose act or omission occurs in
connection with a contractual relationship, existing
directly or indirectly, with the defendant.1,103 In addi-
tion, it required a defendant to "demonstrate that he exer-
cised due care . . ..1,104
Although his amendment restricted the scope of the
third-party defense, Representative Gore recognized that the
defense would continue to be available in some cases:
[T]he amendment would permit a defendant
to escape liability for damages caused
by the act or omission of a third party
who has no connection whatsoever with
the defendant and which act or omission
102 H.R. 7020 § 3071(a)(1)(C) (as reported out of commit-
tee). By contrast, S. 1480 as reported out of committee
provided defenses for acts of God and acts of war, but
contained no express third-party defense.. See s. 1480
§ 4(a).
103 126 Cong. Rec. H9461 (daily ed. Sept. 23, 1980); H.R.
7020 § 3071(a)(1)(C).
104 126 Cong. Rec. H9461 (daily ed. Sept. 23, 1980); H.R.
7020 § 3071(a)(2).
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V-66
is unforeseeable .... [W]ith regard
to foreseeable acts by third parties,
the amendment requires that a defendant
demonstrate that he acted with due care
in order to escape liability.105
The third-party defense provisions of H.R. 7020
[§§ 3071 (a)(1)(C) and 3071(a)(2)] were consolidated as
section 107(b)(3) in the final Superfund bill.106 Accord-
ingly, the third-party defense under Superfund is equivalent
to the scope of the defense provided in H.R. 7020 as passed
by the House.
Despite the limitations imposed by the Gore amendment,
Superfund's third-party defense provision is likely to be
helpful in many cases. For example, a generator would not
have a direct or indirect contractual relationship with a
subsequent site owner or operator and normally can establish
a third-party defense based on the actions of the subsequent
owner or operator.107 Similarly, a generator has no con-
tractual relationship whatsoever with another generator who
105 126 Cong. Rec. H9463 (daily ed. Sept. 23, 1980).
106 The only material change made in the language was the
addition of the parenthetical clause "except where the sole
contractual arrangement arises from a published tariff and
acceptance for carriage by a common carrier by rail."
126 Cong. Rec. S14993 (daily ed. Nov. 24, 1980). As Senator
Stafford explained, this language was intended to provide
that the "'contractual relationship' language of [the]
third-party defense does not apply to rail carriers . . . ."
Id.
107 Although Superfund does not define the concept of an
"indirect" contractual relationship, the relationship
between an off-site generator and a subsequent disposal site
(Footnote 107 continued on next page.)
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V-67
sends wastes to the same disposal site, and therefore may
often have a defense based on the actions of another gen-
erator.
B. Federally Permitted Releases, Pesticide
Applications, and Actions Taken in
Accordance with the NCP Are Exempt
from Superfund Liability.
Superfund provides three miscellaneous exemptions from
section 107 liability for federally-authorized releases,
pesticide applications and NCP-authorized cleanups. Section
107(j) exempts "federally permitted releases" from Superfund
liability.108 They include a broad range of discharges or
(Footnote 107 continued from previous page.)
owner or operator is so remote that no contractual relation-
ship whatsoever should be inferred. The generator has no
control whatsoever over the selection or actions of a subse-
quent purchaser of a disposal site; thus, a subsequent site
owner should be treated no differently than any other
unrelated third party.
A reasonable construction of the "indirect" contractual
relationship language would preclude the use of the third-
party defense only where the third party participates in the
disposal or treatment of the generator's waste. For
example, a generator who contracts with a transporter who in
turn contracts with a disposal operator has a direct con-
tractual relationship with the transporter and an indirect
contractual relationship with the site operator, and cannot
establish a third-party defense based on the disposal opera-
tor's conduct. The same generator would have no contractual
relationship with a subsequent purchaser of the disposal
site, and the third-party defense would therefore be avail-
able based on the acts of the purchaser.
108 Section 107(j) provides in part:
Recovery by any person (including the
United States or any State) for response
(Footnote 108 continued on next page.)
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V-68
emissions in connection with permits under specific stat-
utes .109
Superfund also exempts application of registered pesti-
cides from the liability provision of the Act, but preserves
any liability under other federal or state law, including
common law. Superfund § 107(i). The pesticide exclusion
covers "field application" of pesticides, which, as the
Senate committee report explained, was "intended to mean the
(Footnote 103 continued from previous page.)
costs or damages resulting from a feder-
ally permitted release shall not be
pursuant to existing law in lieu of this
section.
109 Federally permitted releases include releases excluded
from section 311 of the Clean Water Act and releases contem-
plated by permits under the Clean Water Act, the Solid Waste
Disposal Act, the Marine Protection, Research, and Sanctuar-
ies Act of 1972, the Safe Drinking Water Act, the Clean Air
Act, and the Atomic Energy Act, as well as fluid injections
authorized under state laws in connection with crude oil,
natural gas, or water wells. Superfund § 101(10).
The federally permitted release exemptions originated
in S. 1480. S. 1480 §§ 4(1), 2(b) (18). As the committee
report on s. 1480 explained,
in view of the large sums of money spent
to comply with specific regulatory pro-
grams, liability for federally permitted
releases ought to be determined based on
the facts of each individual case.
Therefore, the reported bill authorizes
reponse to federally permitted releases,
but requires costs to be assessed
against the permit holder under the
liability provisions of other laws, not
S. 1480.
S. Rep. No. 848, 96th Cong. 2d Sess. 46 (1980).
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V-69
use of a pesticide generally in accordance with its pur-
pose."110 Other releases of pesticides, such as spills or
disposal, are not excluded.111
Finally, section 107(d) provides a defense to Superfund
liability for actions taken in accordance with the NCP or at
the direction of an onscene coordinator appointed under the
NCP.
C. The Statute's Monetary Limits
on Liability Are High.
Superfund establishes high monetary limits on liability
arising from a release. Superfund § 107(c)(1). These
limits provide little relief for generators in connection
with disposal sites or manufacturing facilities since, for
facilities other than transportation facilities, liability
shall not exceed "the total of all costs of response plus
$50,000,000 for any damages under this title."112 Thus, at
facilities such as disposal sites and manufacturing plants,
there is no ceiling on the recovery of removal and remedial
110 Id. at 45. The pesticide application exclusion origi-
nated m S. 1480. See S. 1480 § 4(k).
111 S. Rep. No. 848, 96th Cong., 2d Sess. 45 (1980).
112 The specified transportation "facilities" are dealt
with separately in § 107(c)(1)(C). Monetary limits for
"vessels" are set in §§ 107(c)(1)(A) & (B).
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V-70
costs, and the limitation on recovery of natural resource
damages is set at $50,000,000.113
VI. LIABILITY FOR PUNITIVE DAMAGES FOR
NONCOMPLIANCE WITH ADMINISTRATIVE ORDERS
IS SUBJECT TO IMPORTANT LIMITATIONS.
The United States may bring an action to recover puni-
tive damages from any liable party who "fails without suf-
ficient cause to properly provide removal or remedial action
upon order of the President pursuant to section 104 or
106.1,114 Nevertheless, the legislative history reveals
important limitations on the imposition of punitive damages.
Although the liability provision of S. 1480 contained a
treble punitive damages provision,115 the language was sub-
stantially revised in the final Superfund compromise. The
compromise added the limitation that the failure to provide
113 Under section 107(c)(2), the monetary limits of section
107(c)(1) do not apply in cases where the release or threat-
ened release resulted from "willful misconduct or willful
negligence within the privity or knowledge" of the defen-
dant; or the primary cause of the release was a violation of
safety, construction, or operating standards or regulations;
or the defendant failed or refused to cooperate with or
assist as requested in response activities under the NCP.
114 Superfund § 107(c)(3). Punitive damages may be
assessed "in an amount at least equal to, and not more than
three times, the amount of any costs incurred by the Fund as
a result of such failure to take proper action," and are to
be recovered "in addition to any costs recovered from such
person pursuant to section 112(c)," the subrogation provi-
sion of Superfund.
113 S. 1480 § 4(g). H.R. 7020 also contained a provision
for recovering "civil penalties" for violation of adminis-
trative orders.
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V-71
removal or remedial action must have been "without suffi-
cient cause," changed the measure of damages from a flat
three times removal costs under S. 1480 to allow discretion
in setting punitive damages, and conditioned liability upon
noncompliance with an "order" of the President rather than a
"request" of the President.116
The "sufficient cause" limitation precludes punitive
damages where the defendant in good faith contested lia-
bility, was only a minor contributor to a release, or was
financially or technically unable to comply with the order.
As Senator Stafford explained,
It would certainly be unfair to assess
punitive damages against a party who for
good reason believed himself not to be
the responsible party. For example, if
there were, at the time of the order,
substantial facts in question, or if the
party subject to the order was not a
substantial contributor to the release
or threatened release, punitive damages
should either not be assessed, or should
be reduced in the interest of equity.
There could also be "sufficient cause"
for not complying with an order if the
party subject to the order did not at
the time have the financial or technical
resources to comply, or if no techno-
logical means for complying was avail-
able .117
116 Compare Superfund § 107(c)(3), with S. 1480 § 4(g); see
126 Cong. Rec. S15008 (daily ed. Nov. 24, 1980) (colloquy
between Senators Simpson and Stafford).
117 126 Cong. Rec. S15008 (daily ed. Nov. 24, 1980).
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V-72
In addition, punitive damages may not be assessed
unless the Government complied with the NCP and statutory
standards. As Senator Stafford explained:
We also intend that the President's
orders, and the expenditures for which a
person might be liable for punitive
damages, must have been valid. In
particular, they must not be inconsis-
tent with the national contingency plan
and must in the President's belief, have
been required in order to protest the
public health or welfare or the environ-
ment. Thus, in deciding whether a
person should be liable for punitive
damages, we would expect the courts to
examine the particular orders or expen-
ditures from the fund to determine
whether they were proper, given the
standards of the act and of the national
contingency plan, taking into account
the fact that a threat to the public was
posed by the situation sought to be
corrected.118
Accordingly, compliance with the provisions of Section
104 and the NCP will be a condition for punitive damages as
well as response cost liability.
118 Id.
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TAB 6
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VI-1
CHAPTER 6:
THE POTENTIAL FOR CONSTITUTIONAL CHALLENGES
TO SUPERFUND PROVISIONS HAVING RETROACTIVE EFFECT
INTRODUCTION AND SUMMARY OF CONCLUSIONS
Many provisions of Superfund are likely to be applied
to transactions and events that were completed long before
enactment of the statute. The consequences of this retroac-
tive change of law could, in some cases, be extremely severe
and unfair, especially where liability is asserted for
actions that were absolutely lawful when undertaken.1
Depending upon the judicial interpretation of Superfund and
the discretion exercised in implementing and enforcing the
statute, the financial liability resulting from the legisla-
tion's retroactive provisions could be enormous.
The retroactive application of Superfund is, however,
subject to constitutional limitations. Three doctrines
developed by the Supreme Court provide potentially strong
bases for challenging certain types of retroactive action
under Superfund, in the appropriate circumstances. Those
doctrines are founded on the constitutional prohibition
against impairing contractual obligations, the proscription
1 For purposes of this chapter it will be assumed argu-
endo that Congress intended to make Superfund retroactive,
with a limited exception for natural resource damage recov-
eries, § 107(f), notwithstanding the contrary interpretation
that may be developed from the legislative history.
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VI-2
against taking private property for public use without just
compensation, and the bar against deprivations of property
without providing due process. Although it is highly
unlikely that these doctrines could be applied to invalidate
Superfund in its entirety, there is a much more reasonable
prospect of invalidating individual Superfund provisions as
applied in specific factual situations where the government
argues for an extreme or harsh interpretation of such provi-
sions. The most vulnerable of those provisions are certain
aspects of section 107, which creates a new liability action,
and certain types of cleanup measures, particularly as
applied in individual cases. Equally as important, the
presentation of a persuasive constitutional challenge can
favorably influence related issues of statutory interpreta-
tion, because of the judicial preference to adopt construc-
tions that avoid constitutional infirmity.
Part I of this chapter suggests possible constitutional
challenges that could be raised in appropriate cases, first
by discussing three typical situations that may present con-
stitutional questions and then by addressing the importance
of distinguishing among cases in which a constitutional
argument might be raised. Part II presents the necessary
academic detour into the scope of the constitutional doc-
trines and the framework of analysis for evaluating poten-
tial challenges to Superfund. Finally, Part III applies the
constitutional doctrines to the three typical fact patterns.
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VI-3
This analysis thereby suggests the circumstances needed to
develop a reasonable constitutional challenge, explains the
significance of various factual differences, and identifies
those cases in which possible interpretation of Superfund by
the government may be vulnerable on constitutional grounds.
I. IN MANY SITUATIONS, RETROACTIVE
APPLICATION OF SUPERFUND MAY POSE
SIGNIFICANT CONSTITUTIONAL QUESTIONS.
A. Typical Situations in Which the Retroactive
Provisions of Superfund May Be Challenged
on Constitutional Grounds.
Superfund may be given its most extreme retroactive
effect through the newly created cause of action for
response costs and through cleanup measures either ordered
or actually undertaken by the government.2 Three typical
fact situations are likely to arise from the use of those
statutory mechanisms, in which the retroactive consequences
may be subject to constitutional objections: (1) the impo-
sition of retroactive financial liability under the new
cause of action for previously lawful activities; (2) the
invalidation retroactively of contract provisions allocating
2 The Trust Fund established by Title II of superfund
also operates retroactively by imposing taxes on current
operations to finance cleanup of hazardous waste deposited
before the statute's enactment. This chapter focuses on the
retroactive consequences described in the text above, which
are more objectionable on constitutional grounds, and does
not specifically address the constitutionality of the taxing
mechanism.
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VI-4
responsibility for the transportation, disposal or treatment
of hazardous wastes; and (3) the intrusion upon and limita-
tion, pursuant to retroactive legislation, of an owner's
rights to the use of real, personal or intangible property.
Although other comparable situations may also arise to
support a constitutional challenge, a general description of
these three situations would be most useful to focus the
following discussion and provide a foundation in Part III
for explaining the potential application of the constitu-
tional doctrines.
1. The imposition of retroactive liability
under section 107 for previously lawful
activities.
As detailed in chapter 5, section 107 of Superfund
creates a new cause of action rendering generators, trans-
porters and dumpsite owners and operators liable for the
cost of cleaning up releases or threatened releases of haz-
ardous wastes.3 In the typical situation, EPA may have
expended funds pursuant to section 104, or a state may have
expended funds to undertake remedial or removal action at a
dumpsite created before the enactment of Superfund. To
recover those funds, EPA or the state may file suit under
3 An abatement action or order pursuant to Section 106 of
the Act, 42 U.S.C. § 9606, may impose comparable retroactive
burdefcs and raise similar constitutional questions. Rele-
vant differences between Sections 106 and 107 will be
addressed in the analysis below, but otherwise this chapter
will relate the constitutionality arguments generally to
Section 107.
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VI-5
section 107, naming as defendants the present site owner and
operator, past owners and operators, transporters and waste
generators. In many instances, EPA or the state may even
assert that these defendants are jointly and severally
liable.4
The different defendants1 role in causing the danger
posed at a given site, and indeed the degree of danger
actually created, will vary widely from one section 107
action to the next- At one extreme, the site in question
may have posed or still pose a serious and immediate threat
to health, but in others there may be no genuine threat to
public health or the environment. Where a hazard is posed,
it may be related causally to the conduct of the site owner
or operator, transporters, generators, or any combination of
those parties. Moreover, at a multigenerator site the
hazard may have been caused by the wastes of only one gener-
ator, the combination of wastes from several generators, or
the independent release of wastes by several generators. A
number of generators, therefore, may be able to argue that
their waste was never actually released at the site or that
it was released only because other wastes leaked first.
4 As discussed in chapter 1, the legislative history of
Superfund demonstrates that Congress did not intend to
create joint and several liability. Nevertheless, since EPA
has continued to argue otherwise, this chapter explores
arguendo the constitutional questions presented by the
retroactive imposition of joint and several liability.
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VI-6
The degree of fault and the equities of asserting
retroactive liability for cleanup costs can also be expected
to vary enormously among the different types of defendants
and among the defendants within each type. For example, a
previous site owner may have engaged in negligent or reck-
less disposal practices, or learned that continuing prac-
tices were resulting in the discharge of hazardous wastes,
whereas the current operator may be running a highly profes-
sional operation unaware of the past negligent practices.
Similarly, some transporters may have continued depositing
waste at a site they knew was operated negligently, while
other transporters were unaware of the negligence. The
variations on the degree of knowledge and fault by genera-
tors may be even broader: some generators may have arranged
the disposal of wastes fully cognizant of the leakage and
health risks, others may have contracted reasonably with
transporters to arrange for safe disposal, and others may
have employed the best available techniques and precautions,
at considerable expense, to dispose safely of their wastes.
The potential for liability under the law applicable
prior to Super fund, and thus the degree to which Super fund
truly constitutes a retroactive change of law, will differ
among the section 107 defendants and will differ from juris-
diction to jurisdiction. In some states, defendants who
were neither negligent nor reckless would not have been
liable at all prior to the enactment of Superfund. Defen-
dants in other jurisdictions may have been subject to strict
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VI-7
liability for their conduct. Depending upon the status of
the prior law and other factors, some section 107 defendants
will be able to develop a persuasive argument that signifi-
cant business judgments were predicated on the fact that
their conduct satisfied all legal requirements and would not
result in any liability. Other section 107 defendants may
be unable to develop such a strong reliance argument, if
they held a mere expectation that their conduct was lawful
or, in some cases, disregarded potentially applicable state
law.
All of the variations on the basic fact pattern out-
lined above, and especially variations in the pre-existing
law and in reliance interests, will be crucial in evaluating
whether Superfund's imposition of retroactive liability on a
particular defendant or group of defendants is unconstitu-
tional .
2. The retroactive invalidation
of contractual provisions.
Over and above the general inequities of retroactivity
summarized above, the imposition of liability under section
107 may also have the effect of overriding or invalidating
contractual provisions among generators, transporters, and
dumpsite operators. In the typical situation where contract
impairment presents constitutional questions, a generator
may have entered a disposal contract that was intended to
transfer completely all responsibility for his wastes to a
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VI-8
transporter or operator for the transportation, disposal and
treatment of hazardous wastes. The subsequent imposition of
section 107 liability on the generator, for the actions of
the transporter, obviously would impair and frustrate this
contractual intent.5
The contract impairment situation is subject to several
unique variations, in addition to those discussed above.
Thus, in each case, contractual provisions and intent are
likely to differ. For example, some contracts may clearly
reflect an intention to transfer responsibility, while in
others such an intention can only be inferred from the
inclusion of warranty and indemnification provisions.6
Among generators that did arrange to transfer respon-
sibility, some may have undertaken special expenses or
precautions in reliance on or in accordance with the con-
tract. For example, those generators may have paid more to
retain a more reputable transporter or disposer or may have
5 Section 107(b) of the Act establishes certain third-
party defenses which may excuse liability of a generator for
the conduct of a transporter. See Chapter 5 at V-64 to
V-66. The following discussion assumes arguendo that these
third-party defenses are unavailable.
Another provision of the Act implicated by this situa-
tion is section 107(e) which may be construed to prohibit a
generator from contractually transferring liability to a
transporter, yet to preserve the generator's right to seek
indemnification from the transporter.
6 If such an inference cannot be made from a transpor-
ter's warranty and promise of indemnification, the contract
impairment argument is weakened considerably, as discussed
in Part IIIB infra.
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VI-9
incurred considerable expenses for pre-treatment of waste.
By contrast, other generators may be unable to identify any
reliance on their contracts apart from reliance on the state
of the law prior to Superfund.
These factual variations, in conjunction with the other
variations in a section 107 action, will heavily influence
whether modification or impairment of contractual rights by
the operation of Superfund will violate constitutional
limitations.7
3. The deprivation of rights
in private property
Inevitably government action under Superfund will
deprive private parties of property rights, but most of
those deprivations will present the same constitutional
questions as the patterns discussed above. A distinct
pattern of deprivations, however, may give rise to constitu-
tional challenges by the owners of disposal sites in connec-
tion with the implementation of certain remedial or removal
measures.
7 The constitutional objections presented by this pattern
of cases may be even stronger when EPA orders abatement or
seeks relief under section 106 of Superfund, instead of
seeking reimbursement under section 107. See note 3 supra.
A section 106 action or order may directly obligate a gener-
ator to breach its contract with a transporter or to forego
contractual rights, thereby presenting the contract impair-
ment more starkly. In addition, section 106 might be used
to interfere with other contracts by a generator, which
would not be affected directly by the assertion of financial
liability under section 107.
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VI-10
Most conunonly this pattern may involve government
cleanup action pursuant to section 104 on the site owner's
property. At a minimum, government cleanup will require
temporary physical intrusions on the property by the govern-
ment or a government contractor, such as when short-term
removal action is undertaken at a disposal site. Permanent
or long-term intrusions may occur in connection with remedial
action, particularly if permanent structures are built on
the property.8 The extent of impairment of residual pro-
perty value by the government cleanup measures will be
another significant variable in the property deprivation
pattern, as will the existence of cleanup alternatives that
would cost less and create less impairment.
Private cleanup measures that a site owner is ordered
to undertake himself pursuant to section 106 also are
included within this pattern. Although the intrusion ele-
ment may be absent here, there will still be variations in
the degree of impairment and in the availability of less
burdensome or expensive cleanup measures. Indeed, a number
of these cases are likely to involve disagreements between
the site owner and the government regarding the extent of
cleanup necessary and the ability to pursue less costly
alternatives.
3 Similar intrusions by other private parties might also
occur if a generator or transporter were ordered pursuant to
section 106 to undertake cleanup action at the site owner's
property.
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VI-11
B. Distinguishing Among Cases and Parties
Within the Typical Situations
The importance of presenting any possible constitu-
tional challenges only in the most appropriate case, and
only on behalf of the most appropriate parties, should be
stressed. Any realistic attempt to challenge Superfund's
retroactive impact must recognize the necessity of avoiding
facial challenges to the constitutionality of Superfund. As
demonstrated by recent Supreme Court decisions discussed in
Part II, arguments that retroactive statutes are unconstitu-
tional on their face fail almost universally.9
Even where Superfund might be challenged as applied,
distinctions will be necessary among different groups of
defendants and within groups. As indicated by the varia-
tions possible in the typical fact patterns discussed above,
Superfund's retroactive consequences may be held unconstitu-
tional as applied to some parties but not as to others. For
example, generators would be in a better position to raise
many of the constitutional objections than will transporters
and dumpsite operators. Moreover, generators who took
better precautions regarding disposal of their waste and who
9 See, e.g., Hodel v. Virginia Surface Mining & Reclama-
tion Ass'n, 452 U.S. 264, 293-97 (1981) (Surface Mining
Control and Reclamation Act of 1977); Hodel v. Indiana,
452 U.S. 314, 333-35 (1981) (Surface Mining Control and
Reclamation Act of 1977); Agins v. City of Tiburon, 447 U.S.
255 (1980) (city zoning ordinance).
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VI-12
included protective provisions in their contracts with
transporters and operators could make stronger arguments
than those who did not. Even factors such as the potential
for pre-Superfund liability under different state laws can
be critical.
Based on these preliminary considerations, and the
factors suggested by the following discussion of the consti-
tutional doctrines, Part III of this chapter uses the three
typical fact situations presented above to identify and
distinguish the possible constitutional challenges to Super-
fund that are most likely to succeed.
II. THE BASES FOR A CONSTITUTIONAL CHALLENGE TO
SUPERFUND PROVISIONS IN APPROPRIATE, CASES.
Three related doctrines, founded on the Due Process
Clause of the Fifth Amendment, the Contract Clause of
Article I, § 10 as incorporated by the Due Process Clause,
and the Taking Clause of the Fifth Amendment, function as
the principal constitutional limitations on Congress' power
to enact retroactive legislation.10 Until recently, these
10 One additional doctrine that could apply to a limited
number of Superfund provisions is the constitutional prohi-
bition in Article I, § 9 against ex post facto laws. This
doctrine forbids retroactive criminal penalties, and the
Supreme Court has been willing to consider a number of
factors in determining whether a statute is penal in nature.
See De Veau v. Braisted, 363 U.S. 144 (1960); Calder v.
Bull, 3 U.S. (3 Dall.) 386 (1798). See generally United
(Footnote 10 continued on next page.)
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VI-13
three doctrines were perceived as applicable to distinct
factual situations, paralleling generally the three typical
fact patterns outlined above. The Taking Clause, which
limited the taking of private property for public use with-
out just compensation, and the Contract Clause, which lim-
ited the governmental impairment of contractual rights, had
somewhat narrow ranges of application. Outside those ranges,
retroactive legislation was constrained only by the Due
(Footnote 10 continued from previous page.)
States v. Ward, 448 U.S. 242 (1980). Depending upon the
interpretation of the legislative history of Sections 106(b)
and 107(c)(3) and those other factors, it may be argued that
the fines and treble punitive damages these sections author-
ize if an abatement order is not implemented are criminal in
nature and would violate the Ex Post Facto Clause when
applied retroactively. The penalty authorized by section
103(b)(3) for failure to provide notice of unpermitted
releases is almost certainly criminal under the Supreme
Court's tests, and would also violate this doctrine if
applied retroactively.
Several further constitutional doctrines can also
operate as constraints on retroactive legislation but are
less likely to apply in the context of a challenge to Super-
fund. The Bill of Attainder Clause in Article I, § 9, for
example, prohibits enacting legislation, whether retroactive
or not, to punish or disable specifically designated persons
or groups without the protections of a judicial trial.
See generally Nixon v. Administrator of General Services,
433 U.S. 425, 468-84 (1977). Moreover, statutory presump-
tions adopted to facilitate retroactive regulatory schemes,
particularly "irrebutable presumptions," can be found to
violate the Due Process Clause. See generally Usery v.
Turner Elkhorn Mining Co., 428 U.S. 1 (1976). The Supreme
Court has also held that a few retroactive statutes violated
the constitutional principle of separation of powers. See,
e.g., United States v. Klein, 80 U.S. (13 Wall.) 128 (1872).
Cf. National Cable Television Ass'n v. United States,
415 U.S. 336 (1974). Superfund is unlikely to implicate any
of these doctrines, and hence they will not be addressed
further here.
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VI-14
Process Clause. In addition to the differences in applica-
bility, the doctrines varied in their stringency as consti-
tutional limitations on retroactivity. Where they applied,
the Taking Clause and the Contract Clause were far more
likely than the Due Process Clause to prohibit or confine
retroactive enactments.
During the past five years, these doctrines have under-
gone significant development and revitalization and have
become more effective limitations on retroactive legislation
such as Superfund. In two recent decisions, the Supreme
Court invalidated retroactive state statutes under the
Contract Clause for the first time in nearly forty years.11
Another series of Supreme Court decisions appears to
strengthen the Taking Clause, even though the constitutional
challenges did not always prevail.12 Although the Court
has not yet strengthened significantly the Due Process
Clause as a limitation on retroactive legislation, its most
11 Allied Structural Steel Co. v. Spannaus, 438 U.S. 234
(1978); United States Trust Co. v. New Jersey, 431 U.S. 1
(1977). See id. at 60 (Brennan, J., dissenting).
12 Kaiser Aetna v. United States, 444 U.S. 164 (1979), and
Loretto v. Teleprompter Manhattan CATV Corp., 102 S. Ct.
3164 (1982), were the most successful of these challenges.
See pages VI-29 to VI-34 infra. Other cases among this
series of refinements include Hodel v. Virginia Surface
Mining & Reclamation Ass'n, supra n.9; Hodel v. Indiana,
supra n.9; San Diego Gas & Electric Co. v. City of San
Diego, 450 U.S. 621 (1981); Agins v. City of Tiburon, supra
n.9; PruneYard Shopping Center v. Robins, 447 U.S. 74 (1980);
Andrus v. Allard, 444 U.S. 51 (1979); Penn Central Transpor-
tation Co. v. New York City, 433 U.S. 104 (1978).
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VI-15
recent decision in Usery v. Turner Elkhorn Mining Co.,
428 U.S. 1 (1976), leaves open the possibility of further
development.
Reflecting these doctrinal changes, the number of
constitutional challenges to statutes with retroactive
implications has escalated sharply in the last several
years. Among the challenged legislation have been provi-
sions of the Multiemployer Pension Plan Amendments Act of
1980,13 the Employee Retirement Income Security Act
(ERISA),14 the 1976 Amendments to the Internal Revenue
Code,15 and the Bankruptcy Reform Act of 1978.16 In addi-
tion, the constitutional objections to retroactivity have
13 See, e.g., Shelter Framing Corp. v. Carpenters Pension
Trust, 543 F. Supp. 1234 (C.D. Cal. 1982), appeal pending,
No. 82-5460 (9th Cir.); Peick v. Pension Benefit Guaranty
Corp., 539 F. Supp. 1025 (N.D. 111. 1982), appeal pending,
No. 82-2081 (7th Cir.); Grano Steel Corp. v. Shopmen's Iron-
workers Pension Trust Plan, No. CV-81-5862 (C.D. Cal.,
ruling announced June 7, 1982); American Trucking Ass'ns,
Inc. v. Pension Benefit Guaranty Corp., Mo. J82-0061(R)
(S.D. Miss., filed Feb. 4, 1982).
14 See, e.g., A-T-O, Inc. v. Pension Benefit Guaranty
Corp., 634 F.2d 1013 (6th Cir. 1980); Nachman Corp. v.
Pension Benefit Guaranty Corp., 592 F.2d 947 (7th Cir.
1979), cert, granted limited to statutory issues and aff'd,
446 U.S. 359 (1980).
15 See United States v. Darusmont, 449 U.S. 292 (1981)
(upholding minimum tax provisions).
16 See, e.g., Rodrock v. Security Industrial Bank,
642 F.2d 1193 (10th Cir. 1981), prob. juris, noted sub nom.
United States v. Security Industrial Bank, 102 S. Ct. 969
(1982). In re Charles E. Ashe, 669 F.2d 105 (3d Cir.
1982); Gifford v. Thorp Finance Corp., 669 F.2d 468
(7th Cir. 1982).
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VI-16
been raised in connection with actions under the Resource
Conservation and Recovery Act (RCRA).17 Although such
constitutional challenges have not always succeeded, the
arguments presented in these cases, the judicial decisions,
and the numerous commentaries18 confirm that potentially
successful constitutional challenges can be developed in
appropriate Superfund cases.
The following discussion of these constitutional doc-
trines begins with the Contract and Taking Clauses, because
they traditionally have been perceived as greater limita-
tions on retroactivity despite their more limited factual
*
applicability. The Due Process analysis that should apply
more broadly can then be considered in light of the Contract
and Taking Clause analyses. Finally, this Part addresses
two possible elaborations of the constitutional limitations
17 See, e.g., United States v. Diamond Shamrock Corp.,
17 E.R.C. 1329 (N.D. Ohio 1981). See also United States v.
Solvents Recovery Service of New England, 496 F. Supp. 1127,
1139-41 (D. Conn. 1980) (avoiding constitutional issue);
United States v. Vertac Chemical Corp., 489 F. Supp. 870,
888 (E.D. Ark. 1980) (also avoiding retroactivity issue).
Because of the grounds for decision and the issues pre-
sented, these RCRA cases do not contribute significantly to
the substantive analysis here, despite the context similar
to Superfund.
18 See, e.g., Note, Constitutionality of Retroactive Lien
Avoidance Under Bankruptcy Code Section 522(f), 94 Harv. l.
Rev. 1616 (1981); Note, A Process-Oriented Approach to the
Contract Clause, 89 Yale L.J. 1923 (1980); Note, Revival of
the Contract Clause: Allied Structural Steel v. Spannaus
and United States Trust v. New Jersey] 65 Va. l! Rev. 377
(1979); Burke, The 1976 Retroactive Amendment of the Minimum
Tax: An Exercise of the Taxing Power or a Taking of Prop-
erty, 32 Baylor L. Rev. 165 (1980).
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VI-17
on retroactive legislation: first, the incorporation into
the Due Process analysis of the considerations that tradi-
tionally make the Contract and Taking Clauses more protec-
tive against retroactivity, and second, the possible appli-
cability of the Contract and Taking Clause doctrines to a
broader range of factual situations.
All three of these doctrines essentially serve to
balance individual property rights against the governmental
justification for assigning to a specific group the cost and
burden of regulations that benefit the public as a whole.
The pattern emerging from recent decisions attempting to
strike this balance indicates that at least five Justices on
the Supreme Court have become considerably more sympathetic
to the protection of the individual property rights impli-
cated by retroactive legislation: Justices Powell, Rehnquist,
Blackmun, and Stevens, and Chief Justice Burger.19 Justice
Powell appears to be particularly sensitive to the potential
unfairness of retroactive legislation,20 while Justice
19 Justice Stewart was also among this group prior to his
retirement. Justices Brennan, White, and Marshall appear
more willing to uphold legislation that creates retroactive
burdens.
20 Justice Powell concurred separately in Usery v. Turner
Elkhorn Mining Co., 428 U.S. 1 (1976), to emphasize his view
that even the constitutionality of the retroactive liability
imposed there was a close question. Id. at 38-45. In
addition, his concurrences there and in Hodel v. Virginia
Surface Mining & Reclamation Ass'n, 452 U.S. at 305-07,
strongly suggest that he would resolve differently chal-
lenges to the application of retroactive legislation, des-
pite his upholding the legislation against facial attack.
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VI-18
Rehnquist has taken the lead in protecting property
rights.21 Justice O'Connor may well join this group, but
she has not yet participated in enough decisions that reveal
her views on these matters.22 A properly framed challenge
might draw upon the Court's changing views to strengthen the
constitutional doctrines and extend the protection against
retroactive Superfund provisions.23
A. Protection Afforded by the Contract Clause.
The Contract Clause of Article I, § 10 provides that
"no State shall . . . pass any . . . law impairing the Obli-
gation of Contracts."24 The initial inquiry in applying
21 For example, Justice Rehnquist authored the opinion of
the Court in Kaiser Aetna, and the dissent in Penn Central
objecting to the application of New York Cityrs Landmarks
Preservation Lav.
22 Although Justice O'Connor did join this group in
Loretto v. Teleprompter Manhattan CATV Corp., that decision
also saw Justices Blackmun and Marshall depart from their
usual predispositions.
23 The Supreme Court already has noted probable jurisdic-
tion in two cases involving these retroactivity doctrines:
Energy Reserves Group, Inc. v. Kansas Power & Light Co., No.
81-1370 (Contract Clause) and United States v. Security
Industrial Bank, No. 81-184 (Taking and Contract Clauses).
24 The Clause operates literally as a direct limitation
only on state action, but its principles have been incor-
porated in the Fifth Amendment's Due Process Clause as a
limitation on Congressional action. See Allied Structural
Steel Co. v. Spannaus, 438 U.S. at 241 n.12; Veix v. Sixth
Ward Building & Loan Ass'n, 310 U.S. 32, 41 (1940); Home
Building & Loan Ass'n v. Blaisdell, 290 U.S. 398, 448 (1934).
(Footnote 24 continued on next page.)
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VI-19
this Clause is to determine whether retroactive legislation
causes a "substantial impairment of a contractual relation-
ship." Allied Structural Steel Co. v. Spannaus, 438 U.S. at
244. In many cases, this preliminary inquiry will depend
heavily upon definition of the contractual rights and obli-
gations.25 If legislation does cause such an impairment,
the second step in the analysis requires a determination
whether the impairment "is reasonable and necessary to serve
an important public purpose." United States Trust Co. v.
New Jersey, 431 U.S. at 25, 29; accord, Allied Structural
Steel Co. v. Spannaus, 438 U.S. at 242-45. This two-stage
test does not invalidate all "legislation with retroactive
(Footnote 24 continued from previous page.)
See generally Hochman, The Supreme Court and the Constitu-
tionality of Retroactive Legislation, 73 Harv. L. Rev. 692,
695 (1960); Hale, The Supreme Court and the Contract Clause:
III, 57 Harv. L. Rev. 852, 890-91 (1944). For clarity m
distinguishing the relevant constitutional doctrines, this
chapter refers to the Contract Clause limitations on Con-
gressional action without repeating that it applies through
the Due Process Clause.
25 Superfund is most likely to impair contractual rights
and obligations stemming from provisions in disposal con-
tracts that were intended to transfer responsibility for the
transportation, treatment and disposal of hazardous wastes.
See pages VI-7 to VI-9 supra and Part IIIB infra. The
definition of the contract can become extremely complicated
in the Contract Clause cases, particularly where the govern-
ment is one of the contracting parties or where contractual
terms may have been drafted in contemplation of the law then
in effect. See, e.g., Dodge v. Board of Education, 302 U.S.
74, 78-79 (1937); Home Building & Loan Ass'n v. Blaisdell,
290 U.S. at 429-30. See generally Hale, The Supreme Court
and the Contract Clause: II, 57 Harv. L. Rev. 621, 663-70
(1944).
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VI-20
effects" on contracts, United States Trust, 431 U.S. at 17,
but it does establish a basis for determining when Congres-
sional disregard for contractual rights has exceeded accep-
table bounds.
The Court has not found a comprehensive standard for
deciding when a contract has been "impaired." At a minimum,
an impairment occurs when a statute nullifies or dilutes one
party's rights under a contract. Many of the older deci-
sions involved laws relieving debtors of obligations to
their creditors, which simultaneously diminished the credi-
tors' rights.26 More recent decisions have found impair-
ments with different types of contracts and where the inter-
ference with contractual rights was less direct or the
particular rights affected were less central to the con-
tract. The impairment successfully challenged in United
States Trust Co., for example, arose from the state's repeal
of a statutory convenant that prevented the depletion of
revenues and reserves which secured certain state bonds.
Although this dilution of the security protection poten-
tially reduced the investment value to the bondholders, the
bonds were not in default and evidently had retained most of
their value. The Court's decision therefore emphasized that
"total destruction" of contractual obligations is not
26 See, e.g., Home Building & Loan Ass'n v. Blaisdell,
supra n.24. See generally Hale, The Supreme Court and the
Contract Clause, 57 Harv. L. Rev. 512, 514-18 (1944).
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VI-21
required to establish legal impairment. See 431 U.S. at
17-21, 26-28. Spannaus developed this holding even further,
by explaining that once an impairment is shown, the degree
of impairment governs the justification needed in the second
stage of analysis to uphold the legislation:
The severity of the impairment measures
the height of the hurdle the state
legislation must clear. Minimal altera-
tion of contractual obligations may end
the inquiry at its first stage. Severe
impairment, on the other hand, will push
the inquiry to a careful examination of
the nature and purpose of the state
legislation.
Spannaus, 438 U.S. at 245.
The Spannaus decision also demonstrates that in addi-
tion to the diminution of a contracting party's rights,
impairment can take the form of "superimposing ... obliga-
tions upon the company conspicuously beyond those that it
had voluntarily agreed to undertake." Id. at 240. The
legislation challenged in Spannaus imposed certain condi-
tions on the termination of pre-existing pension plans for
employees of private companies. Not only did the legisla-
tion eliminate an employer's contractual right to amend or
terminate a plan at any time, but it also required an emplo-
yer to provide funding upon termination for pension rights
that had not even vested under the terms of the pension
plan. In finding this to be an impairment, the Court
rejected the dissent's contention that the Contract Clause
forbids only laws diminishing "the duties of a contractual
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V1-22
obligor," since in "any bilateral contract the diminution of
duties on one side effectively increases the duties on the
other." Id. at 244-45 n.16.
The second stage of the Contract Clause analysis con-
templates a balancing of the public purpose to be served and
the reasonableness and necessity of the impairment. United
States Trust, 431 U.S. at 25, 29; Spannaus, 438 U.S. at
242-45.27 A wide range of factors have been considered in
this balancing during the long history of the Contract
Clause, and not always consistently. One of the most cru-
cial factors limiting retroactive legislation in recent
Contract Clause decisions has been the reliance interests of
the affected paxties. The Court emphasized in Spannaus that
the employer had "relied heavily, and reasonably," on its
legitimate expectations of obligations owed under the pen-
sion contracts. Id. at 245-46. Because the Court perceived
the element of reliance as "vital" in selecting adequate
27 Different views have been expressed regarding the
burden of persuasion once an impairment has been demon-
strated. United States Trust suggests at points that a
state must justify the reasonableness and necessity of the
impairment. Spannaus indicates, however, that the Court
applied a more stringent level of scrutiny in United States
Trust only because the law challenged there affected con-
tracts to which the state itself was a party. 438 U.S. at
244 & n.15; accord, Nachman Corp. v. Pension Benefit Guar-
anty Corp., 592 F.2d at 959 n.23. When evaluating the
effect of legislation on a purely private contract in
Spannaus, the Court referred to a "presumption favoring
•legislative judgment as to the necessity and reasonabless
of a particular measure,'" 438 U.S. at 247, but ultimately
found that the presumption "simply cannot stand in this
case." Id.
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VI-23
funding levels for a pension plan, it was less willing to
permit overriding the employer's expectations.28 Reliance
was also an important factor in United States Trust, since
the state originally had enacted the covenant to enhance the
marketability of its bonds, thereby deliberately inviting
reliance on prior law. See 431 U.S. at 9-10, 18. Con-
versely, the absence of a significant reliance interest may
undercut the objections to a contract impairment.29
Another crucial factor limiting retroactive legislation
in the recent decisions has been the existence of alterna-
tive measures that would still serve the governmental inter-
est and yet minimize or avoid altogether the impairment of
28 Although not stated so explicitly in its opinion, the
Court also appears to have assumed that the employer had
relied on the requirements of prior law, or the absence
thereof, in establishing a pension plan in the first place
and in structuring its contractual obligations. See 43S U.S.
at 245-47, 250.
29 See El Paso v. Simmons, 379 U.S. 497 (1965). Moreover,
as suggested by Spannaus, "[i]n some situations the element
of reliance may cut both ways." 438 U.S. at 246 n.18.
Challenges to the Employee Retirement Income Security Act
and the Multiemployer Pension Plan Amendments Act of 1980
have been undercut substantially by findings that the reli-
ance interests of the statutory beneficiaries were at least
comparable to those of the parties whose contracts were
impaired. See, e.g., A-T-O, Inc. v. Pension Benefit Guar-
anty Corp., supra n.14 Nachman Corp. v. Pension Benefit
Guaranty Corp., supra n.14; Pension Benefit Guaranty Corp.
v. Ouimet Corp., 470 F. Supp. 945, 954-58 (D. Mass. 1979),
aff'd, 630 F.2d 4, 12 (1st Cir. 1980), cert. denied,
450 U.S. 914 (1981); Peick v. Pension Benefit Guaranty Corp.
supra n.13. This difficulty should usually be avoided in a
challenge to Superfund, since the statute does not operate
ordinarily to protect reliance interests competing against
those of indemnified generators.
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VI-24
contracts. Based predominantly on this factor, the Court
found in United States Trust that repealing the covenant was
neither reasonable nor necessary to achieving the legisla-
tive goals. According to the state, the contract impairment
was necessary to sell additional bonds for subsidizing new
mass transit facilities, which served the broader objective
of encouraging a shift from the use of private automobiles
to public transportation. 431 U.S. at 29. The Supreme Court
rejected this justification on two levels. First, "a less
drastic modification would have permitted the [sale of
additional bonds] without entirely removing" the covenanted
security protection to current bondholders. Id. at 29-30.30
Second, "the States could have adopted alternative means
[than selling additional bonds] of achieving their twin
goals of discouraging automobile use and improving mass
transit." Ld. at 30.31 The Court's holding therefore
depended significantly on the principle that "a State is not
free to impose a drastic impairment when an evident and more
moderate course would serve its purposes equally well." Id.
at 31.32
30 The Court explained in a footnote a number of these
measures. 431 U.S. at 30 n.28.
31 The Court suggested in a footnote a variety of alterna-
tive transportation control strategies that would avoid
affecting the contractual safeguards at all. 431 U.S. at 30
n.29.
32 See generally Note, A Process-Oriented Approach to the
Contract Clause, 89 Yale L.J. at 1642-43. " ~~
-------
VI-25
As indicated above, the severity of the contract impair-
ment is also important in the balancing analysis. The
retroactive alteration of pension obligations in Spannaus
was characterized as causing a "severe disruption of con-
tractual expectations" and imposing "a completely unexpected
liability in potentially disabling amounts." 438 U.S. at
247. Moreover, the employer was forced to make all the
retroactive changes at one time, without any provision for
gradual application or grace periods. Id. Thus, the
Court's summary distinguishing its more deferential deci-
sions relied substantially on the Court's conclusion that
the challenged legislation "did not effect simply a tempo-
rary alteration ... but worked a severe, permanent, and
immediate change in [contractual] relationships - irrevoca-
bly and retroactively." Id. at 250.33
A less important factor in the balance against the
legislative justification, yet one still emphasized in
Spannaus, is the extent of prior regulation in the subject
area affected. The state legislation in Spannaus "invaded
an area never before subject to regulation by the State,"
438 U.S. at 250, which evidently confirmed the reasonable-
ness of the employer's reliance on pre-existing law and
33 Spannaus also pointed out, however, that a less sub-
stantial impairment would lessen the justification needed to
uphold retroactive legislation. 438 U.S. at 245. Arguably
the impairment in United States Trust was insubstantial, but
the state's impairment there of its own contracts outweighed
this weakness in the challenge.
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VI-26
magnified the severity of the first legislative intrusion.
On the other hand, the existence of prior state or federal
regulation may serve to legitimize imposing additional
obligations and may undercut reliance interests.34 Conse-
quently, this factor may cut either way just as readily in
the Contract Clause analysis.
Balanced against these factors is the legislative
justification for the contract impairment. Even absent
special circumstances, the governmental determination to
support particular objectives can justify some degree of
contract impairment, for otherwise contractual relationships
could readily thwart. regulation for the public interest.
That power to override contracts can be increased dramati-
cally, however, by particularly compelling justifications,
such as the emergency conditions during the economic depres-
sion of the 1930's or a "broad, generalized economic or
social problem."35 In contrast, a narrow legislative focus
can weaken the justification for impairment, especially if
it appears that a special group has been singled out to bear
34 See 438 U.S. at 242-43 n.13, 250, citing Veix v. Sixth
Ward Building & Loan Ass'n, 310 U.S. at 38.
35 See Spannaus, 438 U.S. at 240-44, 249 n.24, 250. See,
e.g., Home Building & Loan Ass'n v. Blaisdell, 290 U.S. at
444-47.
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VI-27
the burden of a public program or that the legislation is
not appropriately tailored to the justification.36
Finally, in applying these factors, it must be recog-
nized that the Contract Clause has its greatest force when
the government enacts legislation impairing its own con-
tracts. See, e.g., United States Trust Co., supra. Absent
the higher level of scrutiny triggered by this self-
interest, the factors discussed above must be carefully
marshalled to demonstrate that the contract impairment is
either unreasonable or unnecessary to serve the legislative
purpose.
Following the Supreme Court's recent decisions, the
Contract Clause has become considerably more potent as a
limitation on retroactive legislation impairing contracts.
Nevertheless, the doctrine still applies factually only to a
circumscribed pattern of cases arising under Superfund,
i.e., those involving substantial contract impairments, and
any challenge based on the doctrine must be carefully chosen
and developed in order to succeed, as explained further in
Part III.
36 See Spannaus, 438 U.S. at 242, 248-50. The retroactive
legislation there may have been aimed, somewhat imprecisely,
at a single employer, id. at 248 and n.20, and "clearly
ha[d] an extremely narrow focus." Moreover, the legislation
inequitably penalized only those employers who had in the
past been "sufficiently enlightened" to establish voluntary
pension plans. I_d. at 250.
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VI-28
B. Protection Afforded by the Taking Clause.
The Taking Clause of the Fifth Amendment forbids retro-
active legislation that causes a taking of private property
for public use, unless Congress provides just compensation
for the taking.37 Notwithstanding the long history of
challenges under the Taking Clause, there is no fixed defi-
nition of the "property" subject to its protection. Most
often the Clause has been applied to protect a variety of
interests in real and personal property.38 Although broader
forms of property, such as contract rights, may also be
covered in light of the Clause's purpose, the Supreme Court
has invoked the Taking Clause only once to invalidate retro-
active legislation taking money alone.39
The Supreme Court also has declined to develop a uni-
form test or standard for determining whether protected
37 Unlike the Contract Clause and the branch of the Due
Process doctrine discussed below, the Taking Clause does not
operate specifically as a limitation on retroactive legisla-
tion and can apply equally to the prospective taking of
property. The limitations on retroactivity imposed by the
Taking Clause are rather one consequence of a more general
limitation on governmental authority.
38 The third typical fact pattern under Superfund that is
discussed on pages VI-9 to VI-11 supra and in Part I lie
infra illustrates the application of the Taking Clause to
protect such interests in real property.
39 This decision, Railroad Retirement Board v. Alton Rail-
road Co., 295 U.S. 330 (1935), relied on both the Taking
Clause and the Due Process Clause to support this result.
See pages VI-36 to VI-39, infra. The potential applicabil-
ity of the Taking Clause to broader forms of property is
discussed infra at VI-54 to VI-55.
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VI-29
property has been taken unconstitutionally. Instead, recent
decisions have firmly embraced an "ad hoc" approach of
balancing competing governmental and private interests:
[T]his Court has generally "been unable
to develop any 'set formula' for deter-
mining when 'justice and fairness'
require that economic injuries caused by
public action be compensated by the
government, rather than remain dispro-
portionately concentrated on a few
persons." Rather, it has examined the
"taking" question by engaging in essen-
tially ad hoc, factual inquiries that
have identified several factors - such
as the economic impact of the regula-
tion, its interference with reasonable
investment backed expectations, and the
character of the governmental action -
that have particular significance.
Kaiser Aetna v. United States, 444 U.S. at 175 (citations
omitted).40 A demonstration, therefore, that retroactive
legislation affects adversely a property right does not
necessarily mean that the property has been "taken." For
example, the Supreme Court has long upheld zoning laws41
and other regulations that limit some, but not all, of the
"beneficial uses" of property.42 These decisions suggest
that the Taking Clause would permit an order barring con-
tinued use of property as a dumpsite, at least if some other
40 Accord, Hodel v. Virginia Surface Mining & Reclamation
Ass'n, 452 U.S. at 295; Penn Central Transportation Co. v.
New York City, 438 U.S. at 124.
41 See, e.g., Goldblatt v. Town of Hempstead, 369 U.S. 590
(1962); Gorleb v. Fox, 274 U.S. 603 (1927); Euclid v. Ambler
Realty Co., 272 U.S. 365 (1926).
42 See, e.g., Andrus v. Allard, supra n.12; Penn Central
Transportation Co. v. New York City, supra n.12.
-------
VI -30
use for the property remained. On the other hand, an order
denying an owner any economically viable use of the land
probably would constitute a taking.43 In essence, govern-
ment regulation violates the Taking Clause where the balance
of ad hoc factors demonstrates "that the public at large,
rather than a single owner, must bear the burden of an
exercise of State power in the public interest.1,44
The Supreme Court's most recent Taking Clause decision,
Loretto v. Teleprompter Manhattan CATV Corp., extended this
doctrine to hold that a "permanent physical occupation of
real property" always constitutes a taking. At issue in
that case was a New York law requiring landlords to permit
the installation on their buildings of equipment that would
enable tenants to receive cable television service.
Although the equipment occupied only a small area on the
outside of the building, the Court considered it a per se
taking because "a permanent physical occupation ... is
perhaps the most serious form of invasion of an owner's
property interests." 102 S. Ct. at 3176. The public bene-
fit from the occupation and the actual economic impact on
43 See Agins v. city of Tiburon, 447 U.S. at 260; Penn
Central Transportation Co. v. New York City, 438 U.S. at
138, n.36. Although such a denial ordinarily virtually
defines a taking, in this situation the prior use as a
dumpsite may preclude all other uses and thereby complicate
the analysis.
44 Agins v. City of Tiburon, 447 U.S. at 260; Hodel v.
Virginia Surface Mining & Reclamation Ass'n, 452 U.S. at 306
n.3 (Powell, J., concurring).
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VI-31
the owner were deemed irrelevant to the taking issue, given
the special kind of injury to the owner's property
rights.4 5
Absent a permanent physical occupation, the broader
range of factors suggested by the Court's decisions must be
balanced to determine whether a curtailment of property
rights rises to the level of a "taking." The most basic
factor in balancing the private and public interests is the
degree to which the property rights have been impaired.46
A second factor, which may be equivalent in some cases to
the severity of impairment, is the "economic impact of the
regulation on the claimant."47 The Court does not always
require an extreme economic impact, however, and in some
instances the economic impact may not be subject to ready
quantification.4 8
45 The case was remanded to determine the amount of com-
pensation due the property owner, which presumably would
reflect the relatively slight economic impact of the taking.
46 See, e.g., Penn Central Transportation Co. v. New York
City, supra n.12, See generally, Note, Constitutionality of
Retroactive Lien Avoidance Under Bankruptcy Code Section
522If), 94 Harv. L. Rev. at 1634.
47 Penn Central Transportation Co. v. New York City,
438 U.S. at 124; accord, Kaiser Aetna v. United States,
444 U.S. at 175.
48 The government action challenged in Kaiser Aetna v.
United States, arguably would not have caused extensive
economic consequences. The Court thus applied this factor
only to the extent of stating that " [t]his is not a case in
which the Government ... will cause an insubstantial devalu-
ation." 444 U.S. at 180 (emphasis added).
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VI-32
Interference with reasonable and distinct investment-
backed expectations is another factor that can strongly
influence the balance. In Kaiser Aetna v. United States,
for example, the owners of a private pond had obtained
government approval and undertaken a number of improvements
to convert the pond into a marina. These improvements in
the marina were intended to enhance the value of surrounding
lots and to permit charging fees for the use of the marina
by non-resident boat owners- Subsequently, the government
claimed that the marina should be opened to the public at
large because the improvements had connected the pond to
navigable waters. The Court's conclusion that the govern-
ment's plans would result in taking private property
expressly reflected considerable unwillingness to override
the "expectancies" created by the previously applicable law
and the government's approval of the improvements. 444 U.S.
at 179. Thus, where pre-existing regulation, or the absence
of regulation, has created comparable "expectancies," this
decision and its predecessors suggest that these reliance or
expentancy interests can weigh heavily in the balance.49
On the other hand, acquisition of a property interest that
is already subject to extensive legal restrictions may
effectively preclude a Taking Clause challenge.
49 See also Pennsylvania Coal Co. v. Mahon, 260 U.S. 3 93,
414 (1922); Goldblatt v. Town of Hempstead, 369 U.S. at 594.
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VI -33
The final factor suggested in the Court's recent deci-
sions is the "character of the government action."50 A
"physical invasion" by the government, for example, even
short of a permanent physical occupation, is more offensive
than a regulation merely restricting private use of the
property.51 Both Loretto and Kaiser Aetna have emphasized
that the "right to exclude" is a "fundamental element" of an
owner's rights in real property, and any physical invasion
by the government or third parties conflicts with that basic
right. Thus, while the government might in a given case be
able to prohibit a specific use of property by the owner,
the addition of temporary intrusions by the government on
the property or the creation of an easement for others may
result in violating the Taking Clause.
Apart from cases involving permanent physical occupa-
tions, the Supreme Court has yet to decide "whether in some
circumstances one of these factors by itself may be disposi-
tive." Kaiser Aetna v. United States, 444 U.S. at 178 n.9.
Moreover, the Court's recent willingness to protect rights
in private property suggests that the above list should not
be considered exclusive, if additional factors tend to
demonstrate that the public at large should bear the burden
50 Kaiser Aetna v. United States, 444 U.S. at 175.
51 Loretto v. Teleprompter Manhattan CATV Corp.,
102 S. Ct. at 3173; Penn Central Transportation Co. v. New
York City, 438 U.S. at 124; see, e.g., United States v.
Causby, 328 U.S. 256 (1946).
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VI -34
of the exercise of state power. Balanced against these
factors, however, despite the omission from the Court's
explicit listing, is the nature of the government's interest
in restricting or perhaps usurping the private property
rights. Where the government interest is compelling and
directly related to protection of the public health, the
Court may be less willing to prohibit government action
under the Taking Clause.
The resolution of a Taking Clause challenge also
depends heavily on the procedural context in which it is
raised. Taking claims that arise in the context of a facial
challenge are resolved by a less protective standard:
whether the "mere enactment" of the legislation constitutes
a taking by denying "an owner economically viable use of his
land."52 The possibility that beneficial uses of the
property will remain available precludes such a finding,
evidently without regard to the ordinary elements of the
Taking Clause analysis.53 Accordingly, the Taking Clause
is largely ineffective as a limitation on retroactivity
absent a specific, applied challenge.
In addition, the procedural and factual context, as
well as the structure of the challenged statute, can affect
52 Hodel v. Virginia Surface Mining & Reclamation Ass'n,
452 U.S. at 295-96; Agins v. City of Tiburon, 447 U.S. at
260.
53 See Virginia Surface Mining, 452 U.S. at 296-97 & 296
n.38; Agins, 447 U.S. at 262-63.
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VI-35
the type of relief provided by a successful challenge. An
unconstitutional taking can be remedied either by prohibit-
ing the action that results in the taking or by providing
"just compensation." Where the challenged statutory scheme
or the procedural context would readily permit the affected
parties to seek "just compensation," the retroactive legis-
lation itself that causes the taking may still be upheld.
See, e.g., Loretto v. Teleprompter Manhattan CATV Corp.54
In other instances, where compensation would be unavailable,
the violation of the Taking Clause must be remedied by
invalidating the legislative provision or forbidding the
taking.5 5
C. Protection Afforded by the
Due Process Clause.
The Due Process Clause of the Fifth Amendment prohibits
Congress from depriving any person of property without due
54 The Court declined in the Regional Rail Reorganization
Act Cases, 419 U.S. 102 (1974), to declare unconstitutional
a statute that might result in "taking" private property,
because persons suffering a taking could sue for "just
compensation" under the Tucker Act in another court. See
also Hodel v. Virginia Surface Mining & Reclamation Ass'n,
452 U.S. at 297 n.40. "Inverse condemnation" actions might
provide a comparable basis to seek "just compensation" for
takings caused by Superfund provisions. See generally Note,
Constitutionality of Retroactive Lien Avoidance under Bank-
ruptcy Code Section 522(f), 94 Harv. L. Rev. at 1631 n.98;
Countryman, Real Estate Liens in Business Rehabilitation
Cases, 50 Am. Bankr. L.J. 303, 339 (1976).
55 See, e.g., Kaiser Aetna v. United States, supra n.12.
-------
VI -36
process of law.56 One aspect of that prohibition is a
limitation on retroactive legislation, because of the like-
lihood that retroactive measures will disrupt settled rights
and expectations. Despite the long history of Due Process
challenges to such legislation, however, none have addressed
directly the constitutionality of creating an entirely new
cause of action based on past events, which is the retroac-
tive element of Superfund most likely to be challenged. See
pages VI-4 to VI-7 supra and Part IIIA infra. The most
analogous precedent for a Due Process challenge to Super-
fund, therefore, may be two decisions involving the estab-
lishment of retroactive pension or compensation schemes.
The first of those decisions, Railroad Retirement Board
v. Alton Railroad Co., came during the era of "Substantive
Due Process," when the Supreme Court invoked the Due Process
Clause freely to invalidate economic legislation.57 The
The Railroad Retirement Act of 1934 at issue there estab-
lished a retirement fund financed by assessments against
employers based on the number and wages of a railroad's
56 A broader range of "property" is subject to the Due
Process requirement than has traditionally been at stake in
the Taking Clause cases. As demonstrated by the cases
discussed below, deprivations occasioned by retroactive
financial liability alone are clearly sufficient to require
satisfaction of due process requirements.
57 See, e.g., Lochner v. New York, 198 U.S. 45 (1905);
Adkins v. Childrens' Hospital, 261 U.S. 525 (1923); Coppage
v. Kansas, 236 U.S. 1 "(1915). See generally L. Tribe,
American Constitutional Law 434-42 (1978).
-------
VI-37
employees. Among many related objections to the Act, a
group of railroads challenged provisions awarding pensions
to persons who had been employed within the year before
enactment but were no longer employed by a railroad, regard-
less of the reason for ending their railroad employment.
Another retroactive provision the group contested allowed
any former employee to obtain a pension, based upon the full
length of employment prior to the enactment date, if the
person subsequently was reemployed by any other railroad.
The Court found both provisions retroactively benefitting
former employees to be unconstitutional, and even the dis-
senting Justices agreed with respect to the first provision
»
which benefitted those never again reemployed. 295 U.S. at
349-50 (majority), 389 (Hughes, C.J., dissenting).58
In evaluating these retroactive provisions, the Court
applied an essentially Due Process test of whether the
legislation was "unreasonable, arbitrary or capricious" and
"the means selected [had] a real and substantial relation to
58 The alignment of Justices in Alton Railroad suggests
that it would be inappropriate to limit the current vitality
of this case by characterizing it as a Substantive Due
Process decision. The four dissenting Justices agreed that
retroactive authorization of benefits to former employees
never again re-employed was unconstitutional, despite their
opposition to the use of the Substantive Due Process doc-
trine. Moreover, the author of the Court's majority
opinion, Justice Roberts, also had recently opposed the
excesses of that doctrine in Nebbia v. New York, 291 U.S.
502 (1934), and only two years later joined the previous
dissenters in closing the Substantive Due Process era. See
L. Tribe, American Constitutional Law 448-49 & n.18 (1978).
-------
VI -38
the object sought to be attained." Id. at 347-48 n.5.
Notwithstanding the government's argument that these provi-
sions of the pension system would promote safety and effi-
ciency in the railroad industry, the Court concluded that
the relationship between that end and the pension provisions
was too weak to justify the retroactive burden. The Court's
discussion of that burden reflects the significant weight
given to protecting the settled expectations and rights
under prior law:
Plainly this requirement alters con-
tractual rights; plainly it imposes for
the future a burden never contemplated
by either party when the earlier rela-
tion existed or when it was terminated.
The statute would take from the rail-
roads ' future earnings amounts to be
paid for services fully compensated when
rendered in accordance with contract,
with no thought on the part of either
employer or employee that further sums
must be provided by the carrier. The
provision is not only retroactive in
that it resurrects for new burdens
transactions long since past and closed;
but as to some of the railroad companies
it constitutes a naked appropriation of
private property upon the basis of
transactions with which the owners of
the property were never connected. Thus
the act denies due process of law by
taking the property of one and bestowing
it upon another.
295 U.S. at 349-50.59 The two major elements of the Court's
holding — a special solicitude for reliance interests and
59 This blending of references to Due Process and to the
taking of property permits the interpretation of Alton
Railroad's holding as resting upon either the Taking Clause,
see note 58 supra, or the Due Process Clause, or both.
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VI-39
insistence on a very strong justification to override those
interests - established a stringent constitutional test for
this form of retroactive legislation.
Following the close of the Substantive Due Process era
in 1937, see note 58 supra, the Supreme Court became very
reluctant to invalidate economic legislation under the Due
Process Clause, even when the legislation was given retro-
active effect. Eventually this reluctance led to the
Court's decision which upheld a retroactive compensation
scheme for coal miners and thus serves as the most appro-
priate Due Process analogy for comparison to Alton Railroad.
At issue in Turner Elkhorn were several statutes60 that
enabled former coal miners and their survivors to obtain
compensation from mine operators for disability or death due
to pneumoconiosis (black lung) arising out of coal mine
employment. A group of mine operators framed a facial
challenge under the Due Process Clause against the retroac-
tive aspects of this scheme, specifically the obligation to
compensate miners who had left coal mine employment before
the effective date of the statute.61 Although the Court's
60 Title IV of the Federal Coal Mine Health and Safety Act
of 1969, 83 Stat. 792, as amended by the Black. Lung Benefits
Act of 1972, 30 U.S.C. §§ 901 et seq.
61 The operators also challenged several of the presump-
tions and limitations on rebuttal evidence that Congress
enacted for adjudicating the liability of individual opera-
tors .
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VI-40
rejection of that challenge is often cited by those advocat-
ing a free hand in the imposition of retroactive liability,
careful analysis of the Court's opinion reveals the contin-
ued existence of significant Due Process limitations on
retroactivity.
At the outset, Turner Elkhorn emphasized that stricter
scrutiny is necessary when retroactive legislation is chal-
lenged under the Due Process Clause. Ordinarily, "the
burden is on one complaining of a due process violation to
establish that the legislature has acted in an arbitrary and
irrational way." 428 U.S. at 15. Only minimal justification
is needed to uphold legislation under that test, but a
greater justification is required for retroactive measures:
It does not follow . . . that what
Congress can legislate prospectively it
can legislate retrospectively. The
retrospective aspects of legislation, as
well as the prospective aspects, must
meet the test of due process, and the
justifications for the latter may not
suffice for the former.
428 U.S. at 16-17. In essence, the Court adjusted the
balancing test it has adopted for Due Process challenges, to
lessen the burden of overcoming the presumption of consti-
tutionality .
Following perhaps from the higher standard of scrutiny,
the Court's substantive analysis suggested that the imposi-
tion of retroactive liability must rest on a compelling
health justification or a comparable basis. The benefi-
ciaries of the retroactive liability imposed by the black
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VI-41
lung legislation could recover only if their illness became
"totally disabling" or had resulted in the death of a former
miner. The justification for establishing a compensation
mechanism was therefore much stronger than in situations
where liability is not imposed to compensate innocent par-
ties, the need for compensation is less compelling, or
public health is not seriously and immediately threatened.
Indeed, the Court's distinction of Alton Railroad, which had
invalidated legislation creating retroactive pension obliga-
tions, appeared to rest on the "specific need" in Turner
Elkhorn to compensate those injured by working under "dan-
gerous conditions." 428 U.S. at 19.62
The most important limitation on retroactivity devel-
oped in Turner Elkhorn, however, is the need for an adequate
causal connection between the legislative justification and
the persons forced to bear the retroactive liability. A
strong connection between the compensable injury and the
particular operator subject to liability was statutorily
required in Turner Elkhorn, and the Court's opinion suggests
that this connection was crucial to the holding. In par-
ticular, specific adjudications of individual responsibility
and liability for past employees were required by the statu-
tory scheme, and the Court clearly assumed that no operator
62 Turner Elkhorn's distinction of Alton Railroad also
appears to have been based in part on the stronger causal
connection, which is discussed below, between the mine
operators and the dangerous conditions causing black lung.
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VI-42
would be liable for disabilities or deaths not attributable
to his own conduct.63 The Court even described the pur-
pose of the new liability as a means of "allocat[ing] to the
mine operator an actual, measurable cost of his business."
428 U.S. at 19. The Court therefore held only that "the Due
Process Clause poses no bar to requiring an operator to
provide compensation for a former employee's death or dis-
ability due to pneumoconiosis arising out of employment in
its mines." 428 U.S. at 19-20 (emphasis added).
Two subsequent passages of the Court's opinion further
emphasized the significance of this strong causal connection
to its holding. In the first, the Court considered the
validity of an irrebutable presumption that death was due to
pneumoconiosis whenever a miner was totally disabled by
pneumoconiosis at the time of death.64 This presumption
had been included to establish eligibility for the survivors
of disabled miners, and it eliminated the need for proof
that pneumoconiosis caused the death. The Court seriously
questioned the constitutionality of this presumption and the
63 Although not specifically cited in the Court's opinion,
the legislation then applicable provided that the government
would pay black lung benefits where liability could not be
placed on a responsible mine operator. 83 Stat. 742,
30 U.S.C. § 934.
64 This presumption only arose if certain forms of evi-
dence demonstrated that the miner was afflicted by compli-
cated pneumoconiosis. 428 U.S. at 10-11. The statute also
presumed irrebutably that complicated pneumoconiosis was
totally disabling, but that presumption did not implicate
the line of causation to a responsible operator.
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VI-43
retroactive liability if death was the predicate of a sur-
vivor's eligibility, since the death may not have been
caused by the operator held liable:
To the extent that the presumption of
death due to pneumoconiosis is viewed as
requiring compensation for damages
resulting from death unrelated to the
operator's conduct, its application to
employees who terminated their employ-
ment before the Act was passed would
present difficulties not encountered in
our prior discussion of retroactivity.
The justification we found for the
retrospective application of the Act is
that it serves to spread costs in a
rational manner - by allocating to the
operator an actual cost of his business,
the avoidance of which might be thought
to have enlarged the operator's profits.
The damage resulting from a miner's
death that is due to causes other than
the operator's conduct can hardly be
termed a "cost" of the operator's busi-
ness.
428 U.S. at 24-25 (emphasis added). In light of these con-
stitutional doubts, the Court upheld the presumption only
because the legislative history revealed that this liability
was based on the fact that a miner had suffered from totally
disabling pneumoconiosis, not on the fact of death, which
may not have been attributable to the operator's conduct.65
65 The Court's elaboration concerning its reservations
also emphasized the importance of the causal connection:
We might face a more difficult problem
in applying § 411 (c)(3)'s presumption
of death due to pneumoconiosis on a
retrospective basis if the presumption
(Footnote 6 5 continued on next page.)
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VI-44
The second passage in Turner Elkhorn further emphasiz-
ing the importance of a causal connection involved limita-
tions on the evidence that could be used to rebut certain
presumptions. The District Court had held these limitations
unconstitutional because they would "preclude an operator's
defense that the disease did not arise out of employment in
the particular mines for which it was responsible."
428 U.S. at 35. Rather than confront that constitutional
issue, the Supreme Court adopted a dubious construction of
the statute to render the limitations inapplicable to mine
(Footnote 65 continued from previous page.)
authorized benefits to the survivors of
a miner who did not die from pneumocon-
iosis, and who during his life was com-
pletely unaware of and unaffected by his
illness; or, in the case of a miner who
died before the Act was passed, if the
presumption authorized benefits to the
survivors of a miner who did not die
from pneumoconiosis, who nevertheless
was aware of and affected by his ill-
ness, but whose dependents were com-
pletely unaware of and unaffected by his
illness. But the Operators in their
facial attack on the Act have not sug-
gested that a miner whose condition was
serious enough to activate the § 411(c)
(3) presumptions might not have been
affected in any way by his condition, or
that the family of such a miner might
not have noticed it. Under the circum-
stances, we decline to engage in specu-
lation as to whether such cases may
arise.
428 U.S. at 26-27.
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VI-45
operators, even though the limitations did apply when com-
pensation was paid by the government. Id.66 By adopting
this construction, the Court strongly suggested that an
adequate causal connection is a prerequisite to the imposi-
tion of retroactive liability.
In sum, despite the substantial deference given to
Congress' judgments, Turner Elkhorn actually does little to
confine the Due Process analysis of retroactive legislation.
Alton Railroad addressed both sides of the applicable bal-
ancing test: on one side, the Court's close scrutiny of the
legislative rationale in that era undercut the already weak
justification for imposing retroactive liability, and on the
other side, the Court demanded that great weight be given
settled rights and expectations.67 Turner Elkhorn, in
66 Justice Stewart, joined by Justice Rehnquist, demon-
strated in a separate opinion the anomalies that would arise
from the Court's statutory construction. 428 U.S. at 49-51.
Justice Stewart preferred to avoid the constitutional objec-
tions by concluding that, notwithstanding the applicable
limitations, other provisions enabled a specific operator to
defeat liability by showing that disability did not arise
out of employment in his mine during the period when he
operated it. M. at 51.
87 Although some courts have questioned the continuing
vitality of Alton Railroad based on its Substantive Due
Process context, see, e.g., A-T-O, Inc. v. Pension Benefit
Guaranty Corp., 634 F.2d at 1025 n.13; Pension Benefit
Guaranty Corp. v. Ouimet Corp., 470 F. Supp. at 955, Turner
Elkhorn clearly declined to overrule the decision, see
page VI-41 supra, to the point of noting that the dissenting
Justices in Alton Railroad also would have invalidated the
provision for allowances to former employees. 428 U.S.
at 19 n.18. Moreover, as discussed supra at note 58, the
result in Alton Railroad is readily separable from the
suspect Substantive Due Process context.
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VI-46
contrast, focused principally upon the adequacy of the
legislative justification, without necessarily minimizing
the significance of the individual objections.68 Indeed,
as discussed above. Turner Elkhom may have been the first
decision to clearly develop a strong causation requirement,
thereby confining the types of justification that can be
considered to balance against the burdens of retroactive
liability.
D. Elaboration of the Constitutional
Protection Against Retroactivity
Notwithstanding Turner Elkhorn's avoidance of signifi-
cantly weakening the Due Process analysis of retroactivity,
the Due Process Clause decisions since the Substantive Due
Process era still do not provide the same degree of protec-
tion against retroactive legislation as the Contract and
Taking Clauses, when they apply factually. However, Turner
Elkhorn was decided shortly before the series of recent
Supreme Court decisions revitalizing the latter two doc-
trines. In light of those decisions and the Court's emerg-
ing sympathy for the protection of individual property
rights, see pages VI-17 to VI-18 supra, the Due Process
analysis is capable of providing stronger limitations on
68 This focus on only one side of the balance may have
been attributable to the operator's failure, in the context
of a facial challenge, to develop adequately the factors
that can be weighed against the legislative justification.
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VI »47
retroactivity and, in addition, the Contract and Taking
Clause protections may become applicable to broader ranges
of factual situations.
1. Further development of
the Due Process analysis
Further development of the Due Process analysis of
retroactivity can draw support from a number of sources.
The most obvious of these are the recent Contract and Taking
Clause decisions. Many of the factors that have been impor-
tant in those cases for limiting retroactivity should be
equally relevant under the Due Process Clause.69 In
addition, Turner Elkhorn itself suggested that several
factors, such as reliance, would have influenced the Due
Process balance, had they been present in the case. Finally,
even though less analogous than Turner Elkhorn and Alton
Railroad, many of the Supreme Court decisions involving Due
Process challenges to retroactive legislation can still be
valuable for supplementing the constitutional analysis.
69 Although not usually considered in this connection, a
number of decisions and commentators have concluded that
"the analysis employed in Contract Clause cases is also
relevant to judicial scrutiny of Congressional enactments
under the Due Process Clause." Nachman Corp. v. Pension
Benefit Guaranty Corp., 592 F.2d at 959. See generally
Hochman, The Supreme Court and the Constitutionality of
Retroactive Legislation, 73 Harv. L. Rev. at 695; Hale, The
Supreme Court and the Contract Clause: III, 57 Harv. l.
Rev. at 890-91.
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VI -48
Based on these sources, three additional factors, in
particular, should be developed to support a Due Process
challenge against retroactive legislation such as Superfund:
interference with reliance interests, the availability of
less drastic alternatives to meet the legislative justifica-
tion, and the nature and extent of the burden caused by the
retroactive imposition. Each of these considerations should
bear directly upon the reasonableness of the retroactive
legislation or on the adequacy of the legislative justifica-
tion for subjecting the affected persons to retroactive
consequences.
The relevance of the reliance factor is demonstrated
most clearly by one of the recent Contract Clause decisions,
Allied Structural Steel Co. v. Spannaus, 438 U.S. at 246-47.
In that case, the Court gave great weight to the company's
reliance upon its negotiated contracts and the pre-existing
law as the basis for structuring and funding a pension plan
for its employees.70 The reliance factor also appears to
have been important in a number of the Supreme Court's Due
Process decisions, and especially in Alton Railroad, where
pre-existing law ordinarily is the immediate foundation for
reliance interests, rather than contractual rights. Unfor-
tunately, most of the Due Process decisions have cited or
70 See also United States Trust Co. v. New Jersey, 431
U.S. at 9-10, 18. Similarly, "interference with reasonable
investment backed expectations" has become a significant
element in the Taking Clause analysis. See, e.g., Kaiser
Aetna v. United States, 444 U.S. at 175 (1979).
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VI-49
considered the absence of reliance to support upholding
retroactive legislation,71 and others have reflected con-
siderable readiness to override at least certain forms of
reliance interests.72
In light of these previous Due Process decisions,
Turner Elkhom specifically observed that the degree of
reliance is relevant in the retroactivity analysis:
[I]n this case the justification for the
retrospective imposition of liability
must take into account the possibilities
that the Operators may not have known of
the danger of their employees1 contract-
ing pneumoconiosis, and that even if
they did know of the danger their con-
duct may have been taken in reliance
upon the current state of the law, which
imposed no liability on them for disabl-
ing pneumoconiosis.
428 U.S. at 17. Despite the Court's willingness to consider
reliance on the pre-existing law, the mine operators had
"not specifically pressed the contention that they would
have taken steps to reduce or eliminate the incidence of
pneumoconiosis had the law imposed liability upon them."
Id. In short, although the Court indicated that it might be
receptive to such an argument, the operators failed to
71 This is particularly true of the Court's decisions
involving retroactive changes in the tax laws. See page
VI-51 and note 74 infra.
72 See, e.g., Fleming v. Rhodes, 331 U.S. 100 (1947);
Carpenter v. Wabash Ry., 309 U.S. 23 (1940); Norman v.
Baltimore & O.R.R., 294 U.S. 240 (1935); Home Building &
Loan Ass'n v. Blaisdell supra n.24; Louisville & Nashville
R.R. v. Mottley, 219 U.S. 467 (1911).
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VI-50
develop a substantial reliance case, other than to complain
that the law upset otherwise settled expectations, which the
Court was not persuaded to protect. 428 U.S. at 16.
Turner Elkhorn's passages confirming that reliance
interests remain relevant to the Due Process analysis also
suggest that some forms of reliance interests are more
persuasive, or deserve greater protection, than others.
Settled expectations alone, even if fully justified by prior
law, may not be enough, even given the continued vitality
Alton Railroad. See 428 U.S. at 16-17. A stronger reliance
argument can be developed, according to Turner Elkhorn, by
those who would have altered their conduct to avoid liabil-
ity if the liability subsequently attached to their chosen
course of conduct could have been anticipated. 428 U.S.
at 17 n.16.73 Many of the Supreme Court's decisions
involving Due Process challenges to retroactive tax laws, in
particular, can be distinguished by the presence or absence
of this form of reliance.74 The reliance factor probably
is strongest, however, in the closely related situation
73 The foreseeability of legislative changes may preclude
development of this argiiment, whereas the unforeseeability
of the dangers motivating a subsequent change of law may
strengthen the reliance factor. See Turner Elkhorn,
428 U.S. at 17.
74 See, e.g., Welch v. Henry, 305 U.S. 134, 146-48 (1938);
Milliken v. United States 283 U.S. 15, 21 (1931); Untermyer
v. Anderson, 276 U.S. 440 (1928). See generally, Hochman,
The Supreme Court and the Constitutionality of Retroactive
Legislation, 73 Harv. L. Rev. at 706-11.
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VI-51
where instead of simply declining to take action based on
the applicable law, affirmative conduct and expense were
predicated on the prior law. Retroactive legislation in
this situation not only deprives those affected of the
opportunity to minimize their liability, but it also can
impose severe losses or magnify tremendously the expense of
previously lawful conduct.75
The Due Process analysis can also be strengthened by
the development of a less drastic means argument. In United
States Trust Co., the Court's invalidation of the retroac-
tive legislation was based in large part upon the availabil-
ity of alternative measures that would have served ade-
quately the government interest, yet minimized or avoided
altogether the impairment of contracts. The Court may have
been willing to consider a similar argument in Turner
Elkhorn, given the close scrutiny of the legislative justi-
fication, but the alternative preferred by the mine opera-
tors could hardly be considered less drastic. See 428 U.S.
at 17-18.76
75 The Company involved in Spannaus, for example, was
subjected to extensive burdens because it had relied on the
absence of the retroactive pension fund restrictions when it
adopted and structured its pension plan.
76 The operators in Turner Elkhorn opposed "basing liabil-
ity upon past employment relationships," 428 U.S. at 18,
due to fears of creating competitive cost advantages for new
(Footnote 76 continued on next page.)
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VI-52
The third factor that should be developed to enhance
the Due Process protection against retroactivity is the
nature and severity of the burden caused by the retroactive
legislation. This factor is incorporated explicitly in the
Contract and Taking Clause doctrines, and was especially
significant as a limitation on retroactivity in Spannaus.
Moreover, as Justice Powell recognized in his Turner Elkhorn
concurrence, the burden of retroactive legislation bears
directly upon the reasonableness of disrupting settled
rights. 428 U.S. at 42-45. Accordingly, Justice Powell
specifically suggested that the extent and consequences of
the financial burden on the mine operators should be con-
sidered in the context of a Due Process challenge to retro-
active provisions as applied. Id. Although the Court's
opinion was less sympathetic to this factor, id. at 18-19,
it certainly did not foreclose consideration of the degree
of retroactive burdens in a more appropriate case.77
(Footnote 76 continued from previous page.)
firms. The only alternative suggested, however, was creat-
ing a new tax on all coal mine operators presently in busi-
ness . This alternative merely redistributed among private
parties the burden of retroactive liability. As explained
below, Superfund may be more vulnerable to a less drastic
alternatives analysis because it creates two duplicative
means of redressing the perceived need: a new cause of
action and a Trust Fund consisting of large mandatory con-
tributions .
77 The discussion of the burden in Turner Elkhorn focused
principally upon the ability of the mine owners to pass
their retrospective liability on to consumers; see 428 U.S.
at 18-19, instead of the magnitude of the burden.
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VI-53
In sum, Turner Elkhorn was not intended and should not
be construed as an exhaustive list of the factors relevant
to the Due Process analysis. The constraints on retroactiv-
ity established by Turner Elkhorn therefore could be supple-
mented substantially by the persuasive development of these
three factors in any subsequent Due Process challenges.
2. Possible extended applicability of
the Taking and Contract Clauses
The Contract and the Taking Clauses traditionally have
been confined to narrow ranges of factual application as
limitations on retroactive legislation. Nevertheless, since
both doctrines have been perceived as more stringent limita-
tions on retroactivity than is the Due Process doctrine,
extension of their factual applicability should strengthen
considerably the constitutional basis for challenging retro-
active legislation.
The scope of the Contract Clause already has been
expanded in recent years by treating as an "impairment"
almost any substantial alteration of contractual rights.
Because the language of the Clause ties its application to
"contracts," however, there is limited potential for expand-
ing further the applicability of the doctrine.78 Thus,
78 Any further expansion probably must come in the defini-
tion of the obligations and rights areated by contractual
agreements, since Spannaus already has confirmed that the
"impairment" requirement can encompass almost all substan-
tial alterations of those contractual rights. See pages
VI-20 to Vl-22 supra.
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VI -54
broader use of the Contract Clause as a limitation on retro-
activity essentially will depend upon relating constitu-
tional objections to contract rights.
The Taking Clause, on the other hand, is still capable
of broader applicability, because of the expanding defini-
tion of property rights. Most often the Taking Clause has
been invoked to protect interests in real or personal prop-
erty.79 The Clause should no longer be viewed as confined
to those forms of property, if it ever actually was, given
the conclusion in several recent decisions that contractual
rights must also be considered a form of property subject to
the protection of the Taking Clause.80 Based upon these
decisions and upon Alton Railroad, see pages 38-41 and
note 40 supra, it may be possible now to urge that financial
resources should also be considered protected "property."
As a practical matter, the financial resources and assets
implicated by a retroactive cause of action are no different
as property than a tract of land. Moreover, protection of
all forms of property would be consistent with the function
79 In addition to the more obvious ownership rights, past
decisions have indicated that liens, easements and lease-
holds, for example, would also be covered by the Taking
Clause.
80 United States Trust Co. v. New Jersey, 431 U.S. at 19
n. 16 (1977) ("Contract rights are a form of property and as
such may be taken for a public purpose provided that just
compensation is paid."); see also Loretto v. Teleprompter
Manhattan CATV Corp., 102 S. Ct. at 3186 n.ll (Blackmun, J.,
dissenting).
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VI-55
of the Taking Clause to distinguish whether "the public at
large, rather than a single owner," should bear the burden
of government regulation.81 Thus, the Taking Clause may
still be capable of further extension to protect against
retroactivity in the form of a new cause of action.
Already the Due Process, Taking and Contract Clauses
establish fundamental limitations on Congress1 authority to
impose retroactive liabilities. As discussed below, several
aspects of Superfund may violate those limitations, if
demonstrated in an appropriate case. The combination of
extending the applicability of the Taking and Contract
Clauses, and of supplementing the Due Process analysis,
would strengthen the constitutional protection against
retroactivity and lend additional support for challenging
Superfund.
III. SUMMARY OF THE CONSTITUTIONAL ARGUMENTS:
CRITERIA FOR FRAMING A CHALLENGE TO
SUPERFUND PROVISIONS IN APPROPRIATE CASES.
Three typical factual patterns in which the application
of Superfund is likely to have retroactive consequences were
outlined generally in Part I. The discussion above of the
major constitutional doctrines limiting retroactive legis-
lation suggests that six factors will be crucial in deter-
mining when those retroactive consequences may reasonably be
subject to constitutional challenge:
Agins v. City of Tiburon, 447 U.S. at 260.
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VI-56
(1) the causal connection between the
persons subject to retroactive
consequences and the legislative
justification; and
(2) the nature and degree of the burden
on private parties caused by the
retroactive application;
(3) the degree to which reasonable
reliance interests have been
impaired by the retroactive appli-
cation;
(4) the potential for liability under
pre-existing state or federal law
for the conduct questioned under
Superfund;
(5) the nature and persuasiveness of
the legislative justification for
retroactivity, i.e., the public
purpose underlying the legislative
action;
(6) the availability of alternative
measures that would accomplish the
legislative objectives without
causing such severe retroactive
consequences.
The significance of these factors and the importance of
distinguishing among the many conceivable challenges is best
explained by returning to the typical factual situations
described in Part I. Application of the constitutional
doctrines and factors to those factual variations should
illustrate, without cataloging encyclopedically, the cir-
cumstances most likely to result in a successful challenge.
For example, one of the factors, the absence of an adequate
causal connection, may sustain a challenge almost by itself.
Conversely, among the six factors, one in particular, the
potential for liability under pre-existing state or federal
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VI-57
law, should virtually disqualify a challenge where prior
liability could readily have been established.82 In most
instances, however, all of the" factors must be considered
and balanced to determine whether the objections to Super-
fund's retroactive application are strong enough, in light
of the Supreme Court's recent decisions, to develop a per-
suasive constitutional argument.
A. Challenging the Imposition
of Retroactive Liability under
a New Cause of Action for
Previously Lawful Activities.
The most common factual pattern in which a constitu-
tional challenge may be considered will arise when EPA files
suit under section 107 to recover funds expended for reme-
dial or removal action at a dumpsite created before the
82 Although this factor is rarely addressed independently
in the Supreme Court's decisions, it clearly underlies the
factors that are discussed. If a generator would have been
liable under prior law, the objection to section 107 is not
that it imposes liability retroactively, but rather that an
existing liability might actually be enforced due to the
improvement of remedies. The latter objection is less
likely to be considered within the scope of the retroactiv-
ity doctrines. See, e.g., Department of Transportation v.
PSC Resources, Inc., 419 A.2d 1151, 1160-61 (N.J. 1980).
Even if it were within those doctrines, the Supreme Court's
Due Process decisions often distinguish between the imposi-
tion of entirely new burdens and the mere increase in
burdens imposed by prior law. See, e.g., United States v.
Darusmont, 449 U.S. at 299-300. In addition, a generator
that would have been liable under prior law obviously cannot
argue persuasively that it relied reasonably on the pre-
existing law to undertake conduct now made liable by Super-
fund. See Usery v. Turner Elkhom Mining Co., 428 U.S.
at 17; (1976); Allied Structural Steel Co. v. Spannaus,
438 U.S. at 245-47, 250.
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VI -58
enactment of Superfund. For multigenerator sites, EPA often
names as defendants a number of waste generators and trans-
porters, as well as the past and present site owners and
operators. Although EPA may distinguish broadly between
major contributors to the site and lesser contributors,
little other discrimination among defendants may be expected
at the outset. Some of the named defendants could have
generated less than 1% of the waste at the site, and the
evidence connecting some generators to the site may be very
tenuous. EPA also typically adopts an extreme litigation
and negotiation stance, claiming harsh interpretations of
the statute and asserting joint and several liability against
all defendants.
The constitutional objections to retroactivity, where
they can be developed persuasively, should serve a dual
purpose in these cases. Most directly, constitutional
objections can serve as a basis for challenging provisions
of Superfund as applied to specific facts. Equally as
important, the argument that retroactive application would
otherwise be unconstitutional can serve as a means of influ-
encing issues of statutory interpretation. As will become
evident below, the statutory arguments particularly suscep-
tible to this consideration are those opposing the imposi-
tion of joint and several liability, supporting a broader
construction of the third party defenses under section
107(b), demonstrating that liability must be predicated upon
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VI-59
findings of both cause-in-fact and proximate cause, and
opposing the use of a strict liability standard of
intent.83
The initial consideration in assessing the strength of
any Due Process retroactivity challenge84 is the nature and
strength of the causal connection between particular defen-
dants and the hazards presented by a given site. In some
situations, one or more generators may be able to show that
their waste never went to the site or that it was removed
before any damage could have occurred. In other situations,
a specific threat may have been identified as the basis for
cleanup action, such as the appearance of a highly toxic
chemical in the ground water. Here, a number of generator
defendants may be able to demonstrate that their waste
neither contained the chemical in question nor could have
caused the release of the chemical from the drums sent to
83 Less directly the constitutional objections can rein-
force arguments that cleanup action should be taken only to
remedy or prevent serious hazards, as well as to confine the
types of cleanup measures for which EPA can seek reimburse-
ment. For similar reasons to those discussed above, the
prospect of constitutional objections may convince EPA to
exercise greater discretion in applying the statute, with or
without more reasonable interpretations of the statute.
Conversely, reasonable interpretations and applications
of the statute would tend to reduce the number of instances
in which a constitutional challenge could be developed per-
suasively.
84 The constitutional arguments developed in the context
of this factual pattern should be based on a combination of
the Due Process, Contract and Taking Clause doctrines, as
discussed in Part IID supra.
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VI-SO
the site by others. Still other generators may demonstrate
that regardless of the content of their waste, their dis-
posal method in fact had prevented any release or threat of
release.85
The absence of any direct causal connection between the
past actions of these generators and the rationale for
imposing retroactive liability should permit development of
a strong argument that the retroactive application of sec-
tion 107 to these generators would violate the Due Process
Clause. For as discussed above, Turner Elkhora suggests
that an adequate causal connection may be a prerequisite for
imposing retroactive liability, independently of other
factors in the balancing analysis.86
85 For example, a more compelling argument could be deve-
loped where defendant generator1s waste was only stored
temporarily at the disposal site and had been moved before
the cleanup. Similar arguments might exist where the gene-
rator defendant already had financed voluntarily the removal
of its waste before government cleanup began.
86 See pages VI-42 to VI-45 supra. The type and extent of
causal connection necessary to justify retroactive liability
under the Due Process Clause has not been clarified since
Turner Elkhorn. The examples described above involve situa-
tions where there is no causal connection even between the
generator's waste and the environmental threat. In other
situations, there may be a connection with the generator's
waste but not with the generator's own conduct following
generation of the waste, such as where a transporter's
reckless conduct was solely responsible for any hazard. The
distinction between these situations is fundamentally one of
fault or blameworthiness, and it is not clear that the
absence of blameworthiness in the latter situations alone
would preclude establishing the minimum connection required
(Footnote 86 continued on next page.)
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VI-61
Following the initial differentiation based on the
causal connection factor, a broad range of distinctions
among defendants remain to be considered in assessing the
strength of any constitutional argument. First, is the
nature, degree, and fairness of the burden on private par-
ties caused by the assertion of retroactive liability under
section 107.87 The generators in the best position to
emphasize the inequitable burdens of retroactivity are those
who acted blamelessly and in good faith, contributed a very
small fraction or else questionably toxic waste to the site,
and can demonstrate that the causal connection between their
own conduct and the endangerment is very attenuated. The
risk of substantial financial liability, in relation to the
size, financial health, and past conduct of the generator,
(Footnote 8 6 continued from previous page.)
by the Due Process Clause. Turner Elkhorn also left unre-
solved the question whether a weak causal connection, as
opposed to the absence of a connection, would be insuffi-
cient constitutionally.
Even if this distinct causation argument cannot be
developed persuasively, however, the weakness of a causal
connection should be significant as a factor in the balanc-
ing analysis.
87 The burden and unfairness of imposing retroactive
liability through a new cause of action, of course, is
intensified in most cases by the additional assessment of
taxes for the statutory Trust Fund. Most generators there-
fore would be subjected to two forms of retroactive liabil-
ity.
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VI-62
obviously is also essential to demonstrating an unreasonable
burden.88
EPA's application and interpretation of the statute in
a given case can magnify the inequities considerably. For
example, the Agency's present insistence on asserting joint
and several liability increases significantly the burden of
retroactive liability, especially if a number of defendants
have settled and many of the remaining defendants are insol-
vent.89 Conversely, the abandonment of that position or
its rejection by the courts could reduce the burden in a
particular case to the point of weakening a constitutional
challenge. Similarly, a prior decision by EPA to undertake
expensive and unnecessarily extensive cleanup measures can
dramatically increase the response costs sought to be
imposed retroactively on private parties. In essence,
virtually any consideration that demonstrates the unfairness
of imposing section 107 liability on a particular defendant
can be related to the burden caused by retroactivity. See
pages VI-19 to VI-21, VI-29 to VI-30, VI-40 to VI-41 supra.
88 Some of the companies affected by the retroactive
provisions of the Multiemployer Pension Plan Amendments Act,
for example, have been exposed to liabilities exceeding
their profits over a several-year period or even exceeding
their net worth. See note 13 supra. Such an extreme burden
should not be necessary to develop a challenge here, how-
ever .
89 A narrow construction of the third party defenses set
forth in section 107(b)(3) would also exacerbate the unfair-
ness of the burden for many generators, by subjecting them
to liability for the conduct of other parties, despite their
own precautions.
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VI-63
A related factor, which can strongly support a chal-
lenge by some generators at a site, is the degree to which
the retroactive reach of section 107 impairs reasonable
reliance interests. Although most generators will have
relied to some extent on the conclusion that their conduct
was lawful and did not create risks of financial liability,
some forms of reliance receive far greater constitutional
protection than others.90 Generators who predicated affir-
mative conduct and expense on the prior law, such as select-
ing a specific manufacturing process or choosing a site for
a facility, are in the best position to develop the reliance
argument.91 Generators may also have relied affirmatively
on the prior law in contracting with transporters or opera-
tors or in selecting particular waste disposal methods that
90 See pages VI-22 to VI-23, VI-32 to VI-33, VI-48 to
VI-51 supra. At the same time the reliance interest must be
substantial, it must not appear to reflect an attempt to
take extreme advantage of gaps in the pre-existing law.
Such an attempt not only would weaken the equities of a
defendant's position but could also support the justifica-
tion for retroactive remedial legislation, especially if
the attempt included conduct that created obvious risks to
health or the environment.
91 All of these reliance arguments, of course, would
require development in the record by affidavits and other
means. Having obtained state permits or .federal permits for
disposal on the generator's own site may be a particularly
valuable means of proving reliance.
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VI-64
previously would have precluded the assertion of liability
but are now disregarded by EPA.92
A larger number of generators can develop the further
reliance argument that they would have altered their conduct
if the liability retroactively attached to their chosen
course of conduct could have been anticipated. Some gene-
rators will be able to demonstrate that they would have
avoided altogether the conduct for which liability is now
asserted, by such measures as abandoning the generating
activities, incinerating their waste, or by making alterna-
tive arrangements for waste disposal. Other generators
would have purchased special insurance or maintained
92 Numerous examples of this form of reliance have arisen
thus far. Some generators pretreated their waste to permit
safe disposal, and others arranged for disposal in concrete
tanks or containers. In addition, provisions sometimes
incorporated in disposal contracts confirm that a number of
generators relied on contractual assurances and obligations
that their transporters and dumpsite operators have obtained
state and federal permits for their activities. Moreover,
some of those generators specifically selected more reput-
able transporters, and at greater expense, negotiated dis-
posal contracts transferring all responsibility for arrang-
ing safe, lawful disposal, all to enable reliance. See
pages VI-71 to VI-73 infra.
The paradigm example of this form of reliance may arise
in connection with disposal on the generator's own property.
Within the several years immediately preceding the enactment
of Superfund, EPA required such generators under section
402(a) of the Clean Water Act, 33 U.S.C. § 1342(a), to
expend over $1 billion upgrading pits, ponds and lagoons
used for the disposal of waste. Forcing those generators to
remove that waste under section 106 of Superfund would
obviously impair significant investment-backed expectations
created by EPA itself.
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VI-65
reserves had there been any risk that their disposal activi-
ties might result in financial liability.93 All of these
examples of reliance interests, emphasise the unreasonable-
ness of changing the law retroactively, because the retro-
activity alone actually prevented the generators from
conforming their conduct to the law or otherwise minimizing
the risk of liability. In contrast, the disruption of
settled expectations that conduct was lawful, without more,
does not permit such a persuasive argument that retroactive
application violates the Due Process Clause.94
The third factor that may differentiate among the
defendants at a site and must be considered in developing a
persuasive constitutional challenge is the potential for
liability under pre-existing state or federal law.95
93 A generator in this situation might be able to demon-
strate that it has purchased insurance in other states or
for other plants, or that it carries insurance for other
hazardous activities. Proving that a generator would have
set aside reserves for self-insurance or increased its
prices as a Consequence of the liability risk may be some-
what more difficult, except by affidavit.
94 See page VI-50 supra. Relatively few generators may be
in this position, except those unable to document the alter-
native measures they would have taken. Presumably almost
all reputable generators would have altered their conduct
had they otherwise been exposed to liability in a government
cause of action. Reliance interests therefore may assume
unique weight in challenges to retroactive legislation of
this nature.
95 The potential for liability under pre-existing law will
vary widely from state to state. The sources of potential
liability and many of the variations in state laws are dis-
cussed in Appendix A.
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VI-66
Generators who clearly could not have been held liable under
pre-existing law are in the best position, especially if
they have taken affirmative precautions such as contracting
for disposal only on licensed facilities and in accordance
with state requirements.96 The potential for pre-existing
liability often cannot be determined with great precision,
however, since it usually would depend on the uncertain
application of state nuisance law.97 Consequently, the
mere possibility of pre-existing liability under state
nuisance law should not by itself preclude a generator from
challenging the assertion of retroactive liability under
section 107.
All three of the preceding factors - degree of burden,
reliance, and pre-existing liability - will depend signifi-
cantly on how Superfund's liability provisions are inter-
preted with regard to a defendant's disposal activities.
Thus, the defendants in the best position to rely on these
factors should include generators who could be held liable
only by treating section 107 as a strict liability
statute.98 For example, some generators can demonstrate
96 See note 82 supra.
97 Even where a jurisdiction has sufficient precedent to
define the scope of its nuisance law, many of the require-
ments for establishing that certain actions constitute a
nuisance must be considered on a case-by-case basis, such as
the location of a dumpsite. See generally Appendix A.
98 The legislative history of Superfund demonstrates that
Congress did not intend to create an absolute standard of
strict liability under section 107. See chapter 2.
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VI-67
that they investigated thoroughly and then implemented the
best disposal techniques and precautions available at the
time." The unforeseeability of any dangers that subse-
quently arose should support even further a challenge by
those generators.100 On the other hand, defendants charge-
able with a greater degree of fault may be unable to develop
such persuasive objections.
Balanced against these factors that ordinarily can
directly support a constitutional challenge is the justifi-
cation for imposing retroactive liability under section 107.
The nature and persuasiveness of that justification will
vary from site to site, depending initially upon the sever-
ity of the danger or hazard presented by the site.101 The
99 In addition, generators may have based their decision
upon the best information available at the time of disposal
(but subsequently proved incorrect) that their waste was not
toxic or was not sufficiently soluble to reach the ground
water.
100 In conjunction with its discussion of reliance inter-
ests, the Court specifically noted in Turner Elkhom that
"the justification for the retrospective imposition of
liability must take into account the possibility] that the
operators may not have known of the danger of their employ-
ees' contracting pneumoconiosis." 428 U.S. at 17. The
context of the Court's opinion suggests that the inability
to foresee any such danger may be treated as a separate
factor having comparable or greater weight than the protec-
tion of reliance interests. Unfortunately, the factor was
not developed further in Turner Elkhorn because the mine
operators clearly could have foreseen the health risks
there.
101 The circumstances discussed below will also introduce
variations among defendants. Many of the Supreme Court's
(Footnote 101 continued on next page.)
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VI-68
justification for creating severe retroactive burdens is
weakest, of course, where the need for taking cleanup action
under section 104 was highly questionable. For example, EPA
may have required removal of thousands of tons of soil
contaminated with low levels of TCDD despite the absence of
any dangers off the site.102 Even if the basis for section
104 action is not so tenuous, the justification for consti-
tutional purposes is weaker where the danger consists of a
threatened or potential release instead of an actual
release, or of a threat to the environment alone and not the
public health. Although the justification at those sites
may still satisfy the constitutional minimum, absent persua-
sive development of the countervailing factors discussed
above, at least the justification for retroactivity should
be less compelling than it might otherwise. In contrast,
(Footnote 101 continued from previous page.)
decisions, such as Turner Elkhorn, have focused on the
government interest and justification for legislation on the
broad public policy level. That abstract perspective should
be avoided in developing a challenge to the retroactive
application of Superfund, by focusing on the justification
and necessity of imposing retroactive liability in the
specific case at hand.
102 Fencing and closing the dumpsite might have sufficed
just as well to prevent any danger elsewhere, given the
insolubility of TCDD. As this example suggests, the justi-
fication for taking any cleanup action generally must be
compared to the removal or remedial measures actually
demanded or implemented. At some sites EPA may require far
more extensive cleanup than necessary to eliminate any
threatened hazard, and the health justification for imposing
those response costs retroactively on various other defen-
dants may be minimal.
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VI-69
absent special circumstances, development of a persuasive
constitutional challenge would be considerably more diffi-
cult at sites that presented a serious and immediate threat
to public health.103
The justification for actually imposing section 107
liability, as opposed to incurring response costs under
section 104, can be minimized even further in a number of
instances. In particular, the justification becomes increa-
singly tenuous for generators who can only be weakly con-
nected to causation of the hazard at the site, especially if
intervening parties such as transporters or site owners are
responsible for the hazard arising. Moreover, the Agency's
justification may be questioned and discounted at sites
containing waste generated by government agencies, because
the government has a considerable self-interest in asserting
joint and several liability under section 107 against other
parties.104 Finally, the availability of alternative
i°3 see pages VI-26, VI-29 to VI-30, VI-41 supra. The con-
text of a challenge to retroactive application of section
107, as opposed to section 106, should diminish somewhat the
strength of any justification based on health considerations
or environmental protection. Specifically, since cleanup
measures often will have been completed, the question really
is not whether responsive action should be compelled, but
rather whether generators should be required to finance that
action over and above their contributions to the statutory
Trust Fund.
104 The site at Bluff Road, South Carolina, for example,
appears to contain significant amounts of waste generated by
(Footnote 104 continued on next page.)
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VI-70
measures for accomplishing the legislative objectives at a
site, i.e., alleviating an environmental danger, without
causing such severe retroactive consequences tends to demon-
strate that the imposition of section 107 liability is
unnecessary and unreasonable. For the present, at least,
the availability of funds in the statutory Trust Fund can be
cited as such an alternative.105
The comparison of all these factors to determine
whether any or all of the defendants at a specific site can
develop a persuasive constitutional challenge is obviously
not a simple process. As discussed above, all of the fac-
tors have gradations, and the most persuasive conditions for
each factor are not essential for a persuasive challenge.
Nevertheless, a challenge to retroactivity will be most
appropriate in certain situations on behalf of certain
defendants.
(Footnote 104 continued from previous page.)
both federal and state agencies. This type of governmental
self-interest in imposing retroactive consequences on others
has required strict scrutiny of the legislative justifica-
tion in the Contract Clause cases, see page VI-27 supra, and
should be significant for the same reason in the Due Process
balancing analysis.
105 In effect, Congress created its own less drastic alter-
native by establishing duplicative means of accomplishing
its cleanup objectives, which facilitates substantially the
suggestion that this analysis is appropriate under the Due
Process Clause as well as the Contract Clause. See
pages VI-51 to VI-52 supra.
(Footnote 103 continued on next page.)
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VI-71
B. Challenging the Retroactive Invalidation
of Contractual Provisions.
A second typical situation where a constitutional
challenge may be developed should arise in connection with
the retroactive invalidation of contractual arrangements
between generators, transporters and dumpsite operators. A
number of the generators named as defendants at a multi-
generator site probably will have entered contracts allocat-
ing responsibility to transporters and dumpsite operators
for the disposal of waste. To the extent the assertion of
liability under section 107 interferes substantially with
those contracts, the generators may challenge the retroac-
tive application under the Contract Clause.
The existence of a contract impairment, the prerequi-
site for direct application of the Contract Clause doctrine,
will depend fundamentally on the scope of the contractual
arrangements. The generators best able to establish an
impairment are those whose contracts clearly reflect an
agreement to transfer responsibility for safe, lawful dis-
posal of the generator's waste. This type of agreement
frequently involves the inclusion of a warranty by the
(Footnote 105 continued from previous page.)
The less drastic alternatives analysis may also be
particularly appropriate in cases involving section 106,
where a generator may have proposed fully adequate remedial
measures that EPA rejected in favor of far more expensive
action.
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VI-72
transporter106 as well as a promise to indemnify the
generator.107 In addition, the transfer of responsibility
may be manifested by provisions demonstrating reliance on
the transporter's expertise to select safe disposal measures
and sites. Where such a bargain to transfer all responsi-
bility can be established, the subsequent assertion of
liability against the generator impairs the essence of the
generator's bargain.108
106 The essence of such an express warranty provision is a
promise by the transporter to comply with all applicable
federal, state and local laws and regulations. That promise
may be supplemented by the transporter's agreement to main-
tain all permits and documentation that are required for its
disposal activities. This supplemental promise facilitates
confirming the transporter's compliance with legal require-
ments and proving the generator's reliance on the warranty
(especially if the generator occasionally requested copies
of the permits). The warranty provision may also demon-
strate the significance to the parties of the intent to
transfer all responsibility by clauses requiring renegotia-
tion if the applicable law is changed and permitting termi-
nation of the agreement in the event the generator reason-
ably suspects noncompliance by the transporter.
107 The indemnification provision would, for example,
contain an agreement by the tranporter to indemnify the
generator against any penalty for the transporter's failure
to comply with the applicable law or to obtain the necessary
permits. The intent to transfer all responsibility would be
established even more persuasively if the provision includes
an agreement, in the language of one such clause, to indem-
nify, defend and hold the generator harmless from any claims
or liabilities arising out of the transporter's "collection,
handling, transportation, processing, treatment, use, resale
or other disposal" of the generator's waste.
108 Contracts that contain indemnification and warranty
provisions but do not reflect the broader bargain to trans-
fer all disposal responsibility may not provide as strong a
(Footnote 108 continued on next page.)
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VI-73
For those generators whose disposal contracts are
impaired within the meaning of the Contract Clause, the
strength of a constitutional challenge will vary based upon
the factors discussed in connection with the first typical
fact pattern.109 Although most of those factors would
apply in essentially the same manner here, a few may assume
greater significance. In particular, reliance interests
can be predicated on the disposal agreements as well as on
the pre-existing law.110 Moreover, it may be more dif-
ficult to justify the reasonableness and necessity of
(Footnote 108 continued from previous page.)
foundation for the Contract Clause analysis. In particular,
EPA might argue that the imposition of liability does not
interfere at all with operation of the indemnification and
warranty clauses, and instead only necessitates the applica-
tion of those provisions. This argument is further sup-
ported by section 107(e)(l)-(2) of the Act, which may be
construed as preserving a generator's right to seek indemni-
fication from the transporter in a separate cause of action.
In contrast, the first sentence of section 107(e)(1) may be
construed as expressly overriding an agreement to transfer
disposal responsibility entirely, which naming the generator
as a defendant also accomplishes.
109 See pages VI-4 to VI-7 supra. As indicated in Part IID
supra, a challenge in the contract impairment situation
should be based on both the Contract Clause and the Taking
Clause doctrines. In presenting such a challenge, of
course, the factors discussed here for the purpose of evalu-
ating the strategy must be related more specifically to the
framework of analysis adopted by the Superme Court and
explained in Parts IIA and IIB supra.
110 For example, some generators may have paid higher fees
to retain a more reputable transporter who would assume
complete responsibility for compliance with the pre-existing
law. Accordingly, those generators may have foregone addi-
tional precautions in reliance on their contracts.
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VI-74
overriding a private allocation of responsibility, in com-
parison to imposing liability generally under section
107 .111
As was the case in the first situation, all of these
factors must be carefully weighed in determining whether
impairment of specific contracts is prohibited by the Con-
tract Clause. For notwithstanding the potential of greater
constitutional protection against retroactivity under the
Contract Clause, this argument will be stronger in some
situations than others.112
111 At the same time, defendants must be sensitive to the
Court's concern that the Contract Clause not be abused as a
means of thwarting legitimate regulation. "One whose
rights, such as they are, are subject to state restriction,
cannot remove them from the power of the state by making a
contract about them. The contract will carry with it the
infirmity of the subject matter." Hudson County Water Co.
v. McCarter, 209 U.S. 349, 357 (1908); accord, Allied Struc-
tural Steel Co. v. Spannaus, 438 U.S. at 241-42 (1978).
As indicated in note 7 supra, the contract impairment
may be presented more directly, and persuasively, when EPA
acts under section 106.
112 Contract Clause challenges might also be developed in
the similar situation where enforcement action is taken
against the new owner of property previously used as a dis-
posal site, such as an entire plant that includes a disposal
site on the property. Like the generators discussed above,
many purchasers may demand express assurances in their con-
tracts that the site complies with all applicable environ-
mental regulations and that the seller will assume respon-
sibility for its former uses of the site. The assertion of
liability under section 107 or a demand under section 106
against the new owner, who had never even disposed of waste
on the property, would therefore conflict with the essence
of that contract. This potential challenge would be
(Footnote 1:2 continued on next page.)
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VI-75
C. Challenging the Deprivation of
Rights in Private Property.
Two principal situations were described in Part I where
site owners might develop challenges to the deprivation of
their property rights. The first should arise at generator-
owned sites where the government undertakes removal or
remedial action under section 104. Depending upon the
extent of that action and the limitations it imposes on
remaining uses of the property, the site owner might demon-
strate that the Agency's action constituted a taking of its
property without just compensation.113
The site owners best able to develop such a constitu-
tional challenge will be those forced to endure a "permanent
physical occupation" of their property as a result of the
government action. For example, the Agency might build
permanent structures on the property for the purpose of
(Footnote 112 continued from previous page.)
directed broadly toward Superfund's alteration of contrac-
tual responsibility for past actions, rather than focused
solely on individual contract assurances. Thus, proper
development of this argument by a new owner depends upon
whether the sale contract as a whole and surrounding circum-
stances demonstrate that the parties intended to prevent
allocation of liability for past waste disposal to the new
owner and demonstrate that this precaution was crucial to
the sale.
113 The challenge in this situation would be based pri-
marily on the Taking Clause doctrine, and, of course, the
factors developed to support the challenge should be pre-
sented within the framework of analysis used by the Supreme
Court. See Part IIB supra.
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VI-76
containing waste, preventing further access, or monitoring
ground water. Although the benefit of objecting to these
structures may well be minimal in most cases, the Supreme
Court's recently adopted "per se" rule suggests that these
structures must be considered a taking.114 A more prac-
tical argument may exist where the Agency's remedial or
removal action deprives the owner of virtually any remaining
economically valuable use of the property.115 The consti-
tutionality of such action would then be determined by
application of an "ad hoc" balancing analysis that incorpo-
rates all of the factors discussed above in connection with
the ether constitutional doctrines. However, the Supreme
Court's willingness to uphold land use regulation suggests
that merely barring continued use of the property as a
dumpsite may not constitute a taking. Thus, a taking chal-
lenge could be developed persuasively only where the cleanup
measures, as opposed to the former use of the site, pre-
cluded all other uses that could have been made had less
burdensome cleanup measures been implemented. See
pages VI-29 to VI-30 supra.
114 See pages VI-30 to VI-31 supra. Absent substantial
objections to these structures, of course, little or no
compensation may be required for the taking. Moreover, in
the event the compensation cannot be paid under Superfund,
the Agency may still be entitled to demand implementation of
equivalent protective measures. See also notes 45 and 54
supra.
115 For example, the cleanup action may interfere with
operation of other facilities on the generator's property
that are distinct from the disposal site.
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VI-77
The second type of situation in which a Taking Clause
challenge might be considered will arise in connection with
orders under section 106. In particular, site owners who
receive such orders may be able to propose cleanup measures
that would preserve an economically viable use of the pro-
perty yet adequately eliminate any hazard off the site. If
the Agency rejects those measures and insists on more exten-
sive action that completely restricts any subsequent use of
the property, then the Taking Clause might be applied to
challenge EPA's position. In sura, the particular forms of
cleanup action taken under section 104 or demanded under
section 106 are subject to substantial constraints by the
Taking Clause doctrine.
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APPENDIX A
Potential Liability under State
Nuisance Law Prior to the
Enactment of Superfund
-------
A-l
Potential Liability under
State Nuisance Law Prior to
the Enactment of Sunerfund
One of the most crucial criteria for a successful
Contract Clause, Taking Clause or Due Process argument is
whether the person subjected to liability under Superfund
would otherwise have been liable under pre-existing state or
federal law. As discussed in Chapter 6, clear liability
under preexisting law may preclude applicability of the
retroactivity doctrines and prevent establishing that rea-
sonable reliance interests would be threatened. Accord-
ingly, a preliminary step in a given case should be an
evaluation of the likelihood of liability under the pre-
existing law. In most instances, this evaluation would
focus on the state law of nuisance, both because other
applicable requirements almost certainly were satisfied1
and because the boundaries of nuisance law are not well
defined and, thus, the imposition of liability under that
law often could not have been predicted accurately in
advance of undertaking the conduct in question.
1 Many of the federal regulatory statutes have preempted
the potential applicability of the federal common law of
nuisance, see Middlesex County Sewerage Authority v.
National Sea Clammers Ass'n, 453 U.S. 1 (1981); City of
Milwaukee v. Illinois, 451 U.S. 304 (1981), thereby mini-
mizing the possibility that liability could arise under
federal law if all regulatory requirements were met. Com-
pliance with specific regulatory requirements under state
laws must be determined on a state-by-state and case-by-case
basis, but most companies can be expected to have satisfied
express state law provisions regulating land use and dis-
posal activities.
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A-2
The existence of liability under pre-existing nuisance
law will depend heavily on several requirements that vary
markedly among the different states. Thus, specific conduct
may be actionable as a nuisance in one state but not in
other states that preferred less regulation under nuisance
doctrines. Similarly, distinctions based on which parties
may be responsible under state nuisance law will be neces-
sary; for example, transporters and perhaps even generators
may be liable along with owners of dump sites in some states
and yet avoid liability in states that concentrate on the
more immediate causes of a nuisance. Although any detailed
analysis of whether past conduct would be actionable as a
nuisance obviously must be performed in the context of
individual cases, the following overview of six requirements
and two defenses generally describes the factors that must
be considered more extensively.2
(1) The most fundamental requirement for the imposi-
tion of nuisance liability is "some substantial interference
with the interest" of others.3 The actual discharge of
hazardous waste in amounts that may be toxic onto adjacent
property will almost always qualify as a "significant
2 Many of these requirements are also independently sig-
nificant in a challenge to statutory retroactivity, apart
from their relevance to state nuisance law, and are dis-
cussed in the context of their independent significance in
Part IIIA of Chapter 6.
3 Prosser, Law of Torts 577-78 (4th ed. 1971).
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A-3
harm."4 Depending on the nature of the waste materials and
the dangers they may present, relief may also be granted in
some states where there is no present interference but only
a serious threat or potential for significant property
damage or physical injury.5
(2) Nuisance law also requires that the act or omis-
sion of the party in question must cause the substantial
interference.6 Proof of causation may be extremely diffi-
cult in hazardous waste cases, and depending on the ability
to infer causation under state law, this requirement may
substantially limit nuisance liability.7
4 See, e.g., New Jersey v. Chemical & Pollution Sciences,
Inc., 2 Chem. & Rad. Waste Lit. Rep. 673 (N.J. Super. 1981);
Ewell v. Petro Processors of Louisiana, Inc., 364 So.2d 604
(Ct. App. La. 1978).
5 Compare O'Leary v. Moyer's Landfill, Inc., 523 F. Supp.
642, 658 (E.D. Pa. 1981); Robie v. Lillis, 299 A.2d 155, 159
(N.H. 1972) with Village of Wilsonville v. SCA Services,
Inc., 426 N.E.2d 824, 836-37 (111. 1981). See generally
Comment, A Private Nuisance Approach to Hazardous Waste Dis-
posal Sites, 7 Ohio N.U.L. Rev. 86, 101 (1980).
6 The causation requirement for common law actions in
general is also discussed in Chapter 3.
7 See, e.g., Shell Oil v. Ainsworth, 2 E.R.C. (BNA) 1606,
1608 (Miss. 1971); Magnolia Petroleum Co. v. Williams,
76 So.2d 365 (Miss. 1954). See generally Note, An Analysis
of Common Law and Statutory Remedies for Hazardous Waste
Injuries, 12 Rutgers L.J. 117, 138-40 (1980); Senate Comm.
on Environment and Public Works, Report on Six Case Studies
of Compensation for Toxic Substances Pollution: Alabama,
California, Michigan, Missouri, New Jersey and Texas, 96th
Cong., 2d Sess. at 105, 255, 309, 380, 488 (Comm. Print
1980). But see Pan American Petroleum Co. v. Bvars, 153
So. 616, 618 (Ala. 1934).
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A-4
(3) A related requirement under nuisance law is that
the act or omission in question must constitute a "proximate
cause" of the interference.8 Although the standards of
proximate cause are no less ambiguous in hazardous waste
cases than in other areas of tort law, most courts have
appeared to focus in this context on the foreseeability that
the act or omission would result in damage or injury.9
This foreseeability standard arguably even applies where a
strict liability test is substituted for intent require-
ments.10 Thus, the proximate cause requirement of a close
connection between a generator's actions and the interfer-
ence to others may further confine the possible establish-
ment of liability under pre-existing nuisance law.11
8 The proximate cause requirement at common law is dis-
cussed generally in Chapter 3 at 111-31 to 111-35.
9 See, e.g., Bianchini v. Humble Pipe Line Co., 480 F.2d
251 (5th Cir. 1973). See generally Note, An Analysis of
Common Law and Statutory Remedies for Hazardous Waste Injur-
les, supra n.7 at 144. See also Holland v. Keaveney, 306
So.2d 838 (Ct. App. La.), aff'd, 310 So.2d 843 (1975).
10 Holland v. Keaveney, supra. Ginsberg & Weiss, Common
Law Liability for Toxic Torts: A Phantom Remedy, 9 Hofstra
L. Rev. 859, 876 n.66, 878, 912, 918 (Spring 1981). But see
Beshada v. Johns-Manvilie Products Corp., No. A-162 (D.N.J.,
July 7, 1982 ) .
11 Some states may shift the burden of proof under certain
circumstances to require that a nuisance defendant demon-
strate that it was not the proximate cause of an interfer-
ence. E.g., City of Bridgeton v. B.P. Oil, Inc., 369 A.2d
49, 51 (N.J. 1976). Allocation of the burden of proof may,
as a practical matter, be virtually dispositive in a nui-
sance action, but it is not clear how the allocation ques-
tion would bear upon the analysis for a constitutional
challenge to Superfund.
-------
(4) The intent standard for imposing nuisance liabil-
ity can vary widely among the states. Intentional or negli-
gent acts or omissions will satisfy the intent requirement
for all states. However, that level of intent often will
not exist in the hazardous waste context because culpability
must be judged by the knowledge available when the act or
omission occurred, not by the wisdom born of hindsight.12
A number of states have virtually eliminated these intent
requirements in many cases by adopting a strict liability
standard for "ultrahazardous activities," and the various
factors used to define an "ultrahazardous activity"13
consequently may lead to the imposition of strict liability
in hazardous waste cases.14 Nevertheless, even in states
where this doctrine has been adopted, hazardous waste dis-
posal may not be judged "ultrahazardous" if the disposal
site is in a remote or otherwise peculiarly appropriate
12 Prosser at 146; Ginsberg & Weiss, supra n.10 at 885,
890. See, e.g., New Jersey v. Ventron, 2 Chem. & Rad. Waste
Lit. Rep. 348, 373 (N.J. Super. 1979); (discussing common
law nuisance theory).
13 See generally Restatement (Second) of Torts § 520
(1977).
14 See, e.g., City of Bridgeton v. B.P. Oil, Inc., 369
A.2d at 53-54; Village of Wilsonville v. SCA Services, Inc.,
426 N.E.2d at 838; New Jersey v. Ventron, 2 Chem. & Rad.
Waste Lit. Rep. at 376.
-------
A-6
location,15 or if evidence demonstrates that disposal could
have been performed safely.16
Accordingly, the applicability of a meaningful intent
requirement to limit the potential existence of nuisance
liability under prior law depends upon: (a) whether a state
has rejected or not yet adopted the principle of strict
liability for ultrahazardous activities,17 or if it has
adopted that principle, (b) whether the disposal site is
located in areas considered particularly appropriate.
(5) Notwithstanding the absence of a limiting intent
requirement in many states, hazardous waste activities still
will not constitute a nuisance unless they are "unreason-
able." Based on this requirement, courts balance the grav-
ity of the interference caused against the utility of the
conduct claimed to be a nuisance.18 If all practicable
precautions were taken to reduce the interference to others,
15 See, e.g., State Department of Environmental Quality v.
Chemical Waste Storage & Disposition, Inc., 528 P.2d 1076
(Ct. App. Ore. 1974). See generally Ginsberg & Weiss, supra
n.10 at 916.
16 See Ewell v. Petro Processors of Louisiana, Inc., 364
So.2d at 606; Dounaoulakis v. Town of HemDstead, 368 N.E.2d
24, 27 (N.Y. 1977).
17 Several states have considered and rejected this prin-
ciple, see Prosser at 509, and others have avoided deciding
expressly whether to adopt the principle. Cf. Freeman v.
Olin Corp., 2 Chem. & Rad. Waste Lit. Rep. 790, 802 (N.D.
Ala., August 14, 1981).
18 Restatement (Second) of Torts §§ 826, 827, 828 (1979);
Prosser at 581, 596-99.
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A-7
disposal activity is less likely to be found unreasonable.19
Another "decisive consideration in many cases is the nature
of the locality, and the suitability of the use made of the
land" by both the nuisance plaintiff and defendant.20
Consequently, this reasonableness requirement has prompted
courts in several instances to find that waste disposal
activities were not a nuisance.21
(6) The final requirement that may limit the existence
or degree of nuisance liability relates to the apportionment
of damages.22 The presumption in nuisance law is that
damages should be apportioned where there is a practical
basis for doing so.23 Accordingly, courts have found some
basis for apportioning liability in most of the hazardous
waste cases decided thus far under the nuisance doctrine.24
19 Prosser at 599. See also Restatement (Second) of Torts
§ 830 (1979).
20 Prosser at 599. See also Restatement (Second) of Torts
§ 831 (1979).
21 See, e.g., Robie v. Lillis, 299 A.2d at 159; State
Department of Environmental Quality v. Chemical Waste
Storage & Disposition, Inc., 528 P.2d at 1079-82.
22 The common law rules concerning apportionment of dam-
ages are discussed in greater detail in Chapter 1.
23 Prosser at 608; Note, Superfund: Conscripting Industry
Support for Environmental Clean-up" 9 Ecol. L.Q. 524, 535
(1981). See generally Prosser at 314-19; Restatement
(Second) oT~Torts §§ 881, 433A, 433B (1979 and 1965).
24 New Jersey v. Chemical & Pollution Sciences, Inc.,
supra n.4 at 679. See also United States v. Waste Indus-
tries, Inc., 1 Chem. & Rad. Waste Lit. Rep. 1017, 1059
(E.D.N.C., April 7, 1981); United States v. Vertac Chemical
Corp., 489 F. Supp. 870, 888 (E.D. Ark. 1930).
-------
A-3
Nevertheless, where the "damage done is incapable of any
practical division,1,25 or courts infer that nuisance defen-
dants have acted "in concert," joint and several liability
may be imposed.26 The significance of these apportionment
rules in nuisance law for developing a constitutional chal-
lenge against Superfund must be determined in individual
cases. The strongest challenge could be made where joint
and several liability is asserted under Superfund and nui-
sance liability would not have been imposed at all. A
credible challenge might also be developed in such a case if
nuisance liability would have been imposed but reduced
significantly by apportionment. Where joint and several
liability is not sought under Superfund, however, the abil-
ity to apportion under pre-existing nuisance law does not
provide any distinction between the previous law and the
retroactive legislation.
25 See, e.g., Michie v. Great Lakes Steel Division,
National Steel Corp., 495 F.2d 213 (6th Cir.), cert, denied,
419 U.S. 997 (1974); Phillips Petroleum Co. v. Hardee,
189 F.2d 205, 212 (5th Cir. 1951); Velsicol Chemical Corp.
v. Rowe, 543 S.W.2d 337 (Tenn. 1976).
26 See, e.g., Ewell v. Petro Processors of Louisiana,
Inc., 3 64 So.2d at 608 (imposing liability on chemical com-
pany for cleanup of waste left by numerous other companies
because it continued to dump waste after learning that site
was not properly managed). But see Ginsberg & Weiss, supra
n.10 at 897 n.156 ("it is questionable whether plaintiffs' in
hazardous waste disposal site litigation could establish
cooperation between the diverse enterprises involved at a
disposal site to ignore the then existing safety standards
in favor of more risk laden, though less costly, prac-
tices" ).
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A-9
(7) Even if all the elements of a nuisance were other-
wise satisfied, liability still would not have been imposed
under pre-existing nuisance law if either of two affirmative
defenses were applicable. The first such defense is that
the disposal activities were authorized by government permit
or regulation. In some states, this authorization may con-
stitute a complete defense,27 but courts in other states
may either disregard the authorization28 or severely limit
its significance.29 The second major defense to nuisance
liability, primarily available to generators, is that an
independent contractor was responsible for the act of omis-
sion that caused the "substantial interference." This
defense may preclude liability under pre-existing law in
some states for generators that entered contracts giving
transporters or operators broad discretion to select safe
disposal methods.30 A number of states, however, have
created exceptions, particularly a theory of "enterprise
27 See, e.g., Warren County v. North Carolina, 528 F.
Supp. 276, 285 (E.D.N.C. 1981); Twitty v. North Carolina,
527 F. Supp. 778, 781 (E.D.N.C. 1981).
28 See, e.g., Borland v. Sanders Lead Co., 369 So.2d 523
(Ala. 1979); Commonwealth v. Barnes & Tucker Co., 319 A.2d
871 (Pa. 1974).
29 See, e.g., Village of Wilsonville v. SCA Services,
Inc., 426 N.E.2d at 837. See generally Note, Hazardous
Wastes: Preserving the Nuisance Remedy, 33 Stan. L. Rev.
675, 679 (1981).
30 Ewell v. Petro Processors of Louisiana, Inc., 364 So.2d
at 606.
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A-10
liability," that may preclude reliance on the defense in
certain cases.31
Based on the interpretation of these elements and
defenses under the applicable state nuisance law, and any
special requirements adopted in that particular jurisdic-
tion, the likelihood of liability under pre-existing law can
be assessed for a specific case and defendant.32 This
assessment should then be given significant weight in deter-
mining whether to develop a constitutional challenge to the
application of Superfund.
31 See, e.g., United States v. Waste Industries, Inc.,
supra n.24 at 1050. See generally Prosser at 468; Ginsberg
& Weiss, supra n.10 at 95; Ramirez v. Amsted Industries,
Inc., 408 A.2d 818, 825-25 (N.J. 1979), aff'd, 431 A.2d 811
(1981).
32 In the event a state's nuisance law has evolved in
recent years, leading to an increased likelihood of liabil-
ity, the assessment should primarily reflect the law applic-
able at the time disposal activities were undertaken but
also recognize the difficulty of demonstrating that more
recent judicial decisions actually changed the prior law
instead of merely interpreting it.
-------
TABLE OF CASES
Page
Aberdeen & Rockfish R.R. v. SCRAP,
409 U.S. 1207 (1972) IV-48
Adkins v. Childrens1 Hospital,
261 U.S. 525 (1923) VI-37
Agins v. City of Tiburon,
447 U.S. 255 (1980) VI-11,14,30,34,35,55
Alabama v. Corps of Engineers,
411 F. Supp. 1261 (N.D. Ala. 1976) . V-46
Allied Structural Steel Co. v. Spannaus,
438 U.S. 234 (1978) VI-passim
Alonso v. Hills,
214 P.2d 50 (Cal. 1950) II-4
Amaya v. Home Ice, Fuel & Supply Co.,
379 P.2d 513 (Cal. 1963) II-3
American Motorcycle Ass'n v. Superior Court,
578 P.2d 899 (Cal. 1978) 1-55
American Trucking Ass'ns, Inc. v.
Pension Benefit Guaranty Corp.,
No. J82-0061(R) (S.D. Miss.,
filed Feb. 4, 1982) VI-15
Andrus v. Allard,
444 U.S. 51 (1979) VI-14
Atlas Chemical Industries, Inc. v. Anderson,
524 S. W. 2d 681 (Tex. 1975) V-42
A-T-Q, Inc. v. Pension Benefit Guaranty Corp.,
634 F. 2d 1013 (6th Cir. 1980) VI-15,23,46
Beacon Theaters, Inc. v. Westover,
359 U.S. 500 (1959) VI-37
Beshada v. Johns-Manville Products Corp.,
No. A-162 (D.N.J. , July 7, 1982) A-4
Beverage v. Harvev,
602 F. 2d 657 (4th Cir. 1979) IV-56
-------
B-2
Pa£e
Bianchini v. Humble Pipe Line Co.,
480 F. 2d 251 (5th Cir. 1973 ) A-4
Bichler v. Eli Lilly and Co.,
436 N.Y.S.2d 625 (1981), aff'd
450 N.Y.S.2d 776 (1982) 111-40,41,43,45,46
Bielski v. Schulze,
114 N.W.2d 105 (Wis. 1962) 1-55
Bob's Big Boy Family Restaurants v. NLRB,
625 F.2d 850 (9th Cir. 1980) IV-56
Bohannon v. Manhattan Life Insurance Co.,
555 F.2d 1205 (5th Cir. 1977) IV-56
Boomer v. Atlantic Cement Co.,
257 N.E.2d 870 (N.Y. 1970) IV-48
Borel v. Fibreboard Pacer Products Corp.,
493 F.2d 1076 (5th Cir. 1973),
cert, denied, 419 U.S. 869 (1974) 1-5,41
Borland v. Sanders Lead Co.,
369 So.2d 523 (Ala. 1979) V-42
A-9
Burqess v. M/V Tamano,
564 F.2d 964 (1st Cir. 1977) 11-13
Calder v. Bull,
3 U.S. (3 Dall.) 386 (1798) VI-12
Campbell v. Haverhill,
155 U.S. 609 (1895) 1-30
Carolina Environmental Studv Group v. United States,
510 F. 2d 796 (D.C. Cir". 1975) ...
Carpenter v. Wabash Ry.,
309 U.S. 23 (1940)
Cartier v. Secretary of State,
506 F.2d 191 (D.C. Cir. 1974),
cert, denied, 421 U.S. 947 (1975)
Chevron Oil Co. v. Snellqrove,
175 So.2d 471 (Miss. 1965)
IV-26
VI-49
V-34
V-41-43
-------
B-3
Page
Chicago, Milwaukee, St. Paul and
Pacific Ry. v. United States,
575 F. 2d 839 (Ct. Cl. 1978) 1-31
City of Bridqeton v. B.P. Oil, Inc.,
369 A.2d 49 (N.J. 1976) A-4
City of Highland Park v. Train,
519 F.2d 681 (7th Cir. 1975),
cert, denied, 424 U.S. 927 (1976) V-34
City of Milwaukee v. Illinois,
451 U.S. 304 (1981) 1-25,26
IV-7,10.
A-l
City of Philadelphia v. Stepan Chemical Co.,
544 F.Supp. 1135 (E.D. Pa. 1982) 1-50
11-15,16
IV-19,54
V-50-52
A-l
City of Valparaiso v. Moffit,
39 N.E. 909 (Ind. App. 1895) 1-40
Clausell v. Turner,
295 F. Supp. 533 (S.D.N.Y. 1969) V-33
Clearfield Trust Co. v. United States,
318 U.S. 363 (1943) 1-27
Columbia Broadcasting System v.
Zenith Radio Corp.,
537 F.2d 896 (7th Cir. 1976) IV-18
Commonwealth v. Barnes & Tucker Co.,
319 A.2d 871 (Pa. 1974) A-9
Commonwealth of Puerto Rico v. SS Zoe Colocotroni,
456 F. SUPP. 1327 (D.P.R. 1978), aff'd in
part, vacated in part, 628 F.2d 652 (1st Cir.
1980), cert, denied") 450 U.S. 912 (1981) V-44,45
Contel Construction Corp. v. Parker.
261 F. Supp. 428 (E.D. Pa. 1966) IV-53
Cooper Stevedorinq Co. v. KoDke. tnr..
417 U.S. 106 (1974) 1 ! j_32
-------
B-4
Pa^e
Coppage v. Kansas,
236 U S. 1 (1915) VI-37
Corey v. Havener,
65 N.E. 69 (Mass. 1902) III-8
Davis v. Atlas Assurance Co.,
147 N.E. 913 (Ohio 1925) II-7
Department of Transportation v. PSC Resources, Inc.,
419 A.2d 1151 (N.J. 1980) VI-57
Derosier v. New England Tel. & Tel. Co.,
130 A.2d 145 (N.H. 1925 ) 111-34
Deseret Apartments v. United States,
250 F.2d 457 (10th Cir. 1957) IV-57
DeVeau v. Braisted,
363 U.S. 144 (1960) VI-12
Dodge v. Board of Education,
302 U.S. 74 (1937) VI-19
D'Oench Duhme & Co. v. Federal Deposit Ins. Com.,
315 U.S. 447 (1942) 1-27
Dole v. Dow Chemical Co.,
282 N.E.2d 288 (N.Y. 1972) 1-55
Doundoulakis v. Town of Hempstead,
368 N.E.2d 24 (N.Y. 1977) A-6
Eichleay Corp. v. NLRB,
206 F.2d 799 (3d Cir. 1953) IV-57
El Paso v. Simmons,
379 U.S. 497 (1965) VI-23
Embrey v. Borough of West Mifflin,
390 A. 2d 765 (Pa. App. 1978) 1-33
Energy Reserves Group, Inc. v.
Kansas Power & Light Co.,
630 P.2d 1142 (Kan. 1981)
prob. juris noted, 50 U.S.L.W. 3783 VI-18
Environmental Defense Fund v. EPA,
465 F. 2d 528 (D.C. Cir. 1972 ) IV-27
-------
B-5
Page
Ethyl Corp. v. EPA.
541 F.2d 1 (D.C. Cir. 1976) IV-24-26,29
Euclid v. Ambler Realty Co
*72 U.S. 365 (1926) VI_29
EWellJ!': Petro gr°cessors of Louisiana. Tnr. ,
364 So.2d 604 (Ct. App. La. 1978) 1-43,44
I1-5-7
IV-3 3
A-3,6,8,9
Farny v. Bestfield Builders, Inc..
391 A.2d 212 (Del. 1978) . . '. y_42
Eirst Nat'l Bank v. Amco Engineering Co.,
335 N.E.2d 591 (Ct. App. 111. 1975) V—41-43
Fiske v. Moczik.
329 So.2d 35 (Ct. App. Fla. 1976) v_42
Fleming v. Rhodes.
331 U.S. 100 (1947) VI_49
Fletcher v. Bealev.
28 Ch. 688 (1885) IV-28
Fox Valley Harvestore. Inc. v. A.O.
Smith Harvestore Products, Inc.,
545 F.2d 1096 (7th Cir. 1976) IV-37
Freeman v. Olin Corp,.
2 Chem. & Rad. Waste Lit. Rep. 790
(N.D. Ala., August 14, 1981) A_g
Gifford v. Thorp Finance Corp.,
669 F.2d 468 (7th Cir. 1982) VI-15
Globus Inc. v. Law Research Service Inc
318 F. Supp. 955 (S.D.N.Y. 1970),
aff'd, 442 F.2d 1346 (2d Cir.),
cert, denied. 404 U.S. 941 (1971) !_52
Goldblatt v. Town of Hempstead.
369 U.S. 590 (1962) ^ VI—29 33
Golden v. Aroorv.
109 N.E.2d 131 (Mass. 1952) II-7
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B-6
Page
Golden Press v. Rylands,
235 P.2d 592 (Colo. 1951) IV-48
Gomes v. Brodhurst,
394 F. 2d 465 (3d Cir. 1967) 1-55
Gordon H. Mooney, Ltd. v. Farrell Lines, Inc.,
616 F.2d 619 (2d Cir.), cert.
denied, 449 U.S. 875 (1980) 1-52
Gorieb v. Fox,
274 U.S. 603 (1927) VI-29
Governale v. Owosso,
229 N. W. 2d 918 (Mich. App . 1975) V-43
Grano Steel Corp. v. Shopmen's
Ironworkers Pension Trust Plan,
No. CV-81-5862 (C.D. Cal.)
(ruling announced June 7, 1982) VI-15
Great Western Cities, Inc. v. Binstein,
476 F. Supp. 827 (N.D. 111. 1979) ' IV-52
Greenhouse v. Greco,
368 F. Supp. 736 (W.D. La. 1973) IV-33,34
Hall v. E.I. Dunont de Nemours & Co.,
345 F. Supp. 353 (E.D.N.Y. 1972),
aff'd sub nom. Ball v. E.I.
Dupont de Nemours & Co.,
519 F. 2d 715 (6th Cir. 1975) 1-5
111-39,40,44-46
Hall v. Frankel,
197 N.W. 820 (Wis. 1924) 1-33
Hanrahan v. Cochran,
42 N.Y.S. 1031 (1896) 1-3
Hanson & Associates v. Fanners
Cooperative Creamery Co.,
403 F.2d 65 (8th Cir. 1968) IV-53
Hassett v. Palmer,
12 A.2d 646 (Conn. 1940) 111-33
Hecht Co. v. Bowles,
321 U.S. 321 (1944) IV-36,37
-------
B-7
Page
Hodel v. Indiana,
452 U.S. 314 (1981) VI-11,14
Hodel v. Virginia Surface Mining &
Reclamation Ass'n,
452 U.S. 264 (1981) VI-11,14,17,29,30,34,35
Holiday Inns of America, Inc. v. Holiday House, Inc.,
279 F. Supp. 648 (W.D. Pa. 1968) V-33
Holland v. Keaveney,
306 So.2d 838 (Ct. App. La.), aff'd,
310 So.2d 843 (1975) A-4
Home Building & Loan Ass'n v. Blaisdell,
290 U.S. 398 (1934) VI-18-20,26,49
Houghton v. Loma Prieta Lumber Co.,
93 P. 82 (Cal. 1907) II-4
Hudson County Water Co. v. McCarter,
209 U.S. 349 (1908) VI-74
Huddell v. Levin,
537 F.2d 726 (3d Cir. 1976) 1-11
Hunt v. Hazen,
254 P.2d 210 (Ore. 1953) IZ-S
Illinois v. Milwaukee,
406 U.S. 91 (1972) 1-31
Independent Cosmetic Manufacturers and Distributors,
Inc. v. Dep't of Health, Education and Welfare,
574 F.2d 553 (D.C. Cir. 1978) V-33
Industrial Union Deo't v. American Petroleum Institute,
448 U.S. 607 (1980) IV-15,16
Ingersoll v. Liberty Bank of Buffalo,
14 N.E.2d 828 (N.Y. 1938) 111-28
In re Charles E. Ashe,
669 F. 2d 105 (3d Cir. 1982) VI-15 .
In re National Student Marketing Litigation,
517 F. Supp. 1345 (D.D.C. 1981) 1-52
Investors Research Corp. v. SEC,
628 F.2d 168 (D.C. Cir. 1980) IV-55
-------
B-8
Page
Jackson v. Frederick's Motor Inn,
418 A.2d 168 (Me. 1980) 11-15
Jacoby-Bender, Inc. v. Jacques Kreisler Mfg.,
287 F. Supp. 134 (S.D.N.Y. 1968) IV-52,53
Jessup v. Sloneker,
21 A. 988 (Pa. 1891) 111-33
Johanna Farms, Inc. v. Citrus Bowl, Inc.,
463 F.Supp. 866 (E.D.N.Y. 1978) IV-53
Kaiser Aetna v. United States,
444 U.S. 164 (1979) VI-14, 18 , 29, 31-34, 36
Kaufman v. Boston Dye House,
182 N.E. 297 (Mass. 1932) 11-7
Konstantinadis v. Chen,
626 F.2d 933 (D.C. Cir. 1980) IV-55
Landers v. East Texas Salt Water Disposal Co.,
248 S . W. 2d 731 (Tex. 1952) 1-40
Lavin v. Marsh,
644 F.2d 1378 (9th Cir. 1981) IV-56
Litzmann v. Humboldt County,
273 P.2d 82 (Cal. 1954) 111-45
Lochner v. New York,
198 U.S. 45 (1905) VI-37
Loe v. Lenhardt,
362 P.2d 312 (Ore. 1961) 1-43
Loretto v. Teleprompter Manhattan
CATV Corp.,
102 S. Ct. 3164 (1982) VI-14,18,30,31,33,35,55
Louisville & Nashville R.R. v. Mottley,
219 U.S. 467 (1911) VI-49
Magnolia Petroleum Co. v. Williams,
76 So.2d 365 (Miss. 1954) A-3
Maldonado v. Connecticut Light and Power Co.,
328 A,2d 120 (Conn. 1974)
V-43
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B-9
Pace
Manufacturers Trust Co. v. Litton,
338 U.S. 304 (1949) IV-14
Marcee v. United States,
455 F.2d 525 (Ct. CI. 1972 ) IV-53
Mason v. United States,
260 U.S. 545 (1923) 1-27
Michie v. Great Lakes Steel
Division, Nat'l Steel Corp.,
495 F.2d 213 (6th Cir.) cert.
denied, 419 U.S. 997 (1974) 1-41
A-8
Middlesex County Sewerage Authority
v. National sea Clampers Ass'n,
453 U.S. 1 (1981) A-l
Midland Empire Packing Co. v. Yale Oil Corp.,
169 P.2d 732 (Mont. 1946) 1-38
Miller v. Prough,
221 S.W. 159 (Mo. App. 1920) 1-34
Milliken v. United'States,
283 U.S. 15 (1931) VI-51
Mitchell v. Branch,
363 P.2d 969 (Ha. 1961) 1-55
Mizell v. Eli Lilly & Co.,
526 F. Supp. 589 (D.S.C. 1981) 111-42
Murray v. Fairbanks Morse,
610 F.2d 149 (3d Cir. 1979) 1-55
Nachman Corp. v. Pension Benefit Guaranty Corp.,
592 F.2d 947 (7th Cir. 1979), cert,
granted limited to statutory issues
and aff'd, 446 U.S. 359 (1980) VI-15 , 22 , 23 , 47
Nash & Windfohr v. Edens,
109 S.W.2d 496 (Ct. App. Tex. 1937) V-41
National Cable Television Ass'n v. United States,
415 U.S. 336 (1974) IV-15
VI-13
-------
B-10
Page
National Fire Insurance Co. v. Thompson,
281 U.S. 331 (1930) IV-52
Nauqhton v. Bevilacgua,
605 F.2d 586 (1st Cir. 1979) IV-31
Nebbia v. New York,
291 U.S. 502 (1934) VI-38
Neville v. Mitchell,
66 S.W. 579 (Tex. 1902) 1-38
New Jersey v. Chemical & Pollution Sciences, Inc.,
2 Chem. & Rad. Waste Lit.
Rep. 673 (N.J. Super. 1981) 1-35,36
A-3,7
New Jersey v. Ventron,
3 Chem. & Rad. Waste Lit.
Rep. 197 (N.J. Super. 1981)
aff'd in part, rev'd in part,
3 Chem. & Rad. Waste Lit. 1-36
Rep. 348 (N.J. 1979) IV-50
A-5
Nice Ball Bearing Co. v. Bearing Jobbers, Inc.,
205 F.2d 841 (7th Cir.), cert.
denied, 346 U.S. 911 (1953 ) IV-52
Nillson v. Hiscox,
158 So.2d 799 (Ct. App. Fla. 1963 ) V-43
Nixon v. Administrator of General Services,
433 U.S. 425 (1977) VI-13
Norman v. Baltimore & O. R.R.,
294 U.S. 240 (1935) VI-49
Northwest Airlines v. Transport
Workers Union of America,
451 U.S. 77 (1981) 1-52,53
O'Brien v. Western Union Telegraph Co.,
113 F.2d 539 (1st Cir. 1940) 1-28
Ohio v. Georaeoff,
No. C-81-1961 (N.D. Ohio, filed
Oct. 1, 1981) 11-3,8
V-24,32
-------
3-11
Paae
O'Leary v. Mover's Landfill, Inc.,
523 F. Supp. 642 (E.D. Pa. 1981) A-3
Packard v. Whitten,
274 A.2d 169 (Me. 1971) 1-55
Palsqraf v. Long Island R. Co.,
162 N.E. 99 (N.Y. 1928) 111-33
Panama Refining Co. v. Ryan,
293 U.S. 388 (1935) IV-15
Pan American Petroleum Co. v. Byars.
153 So. 616 (Ala. 1934) A-3
Pan American Petroleum and Transport
Co. v. United States,
273 U.S. 456 (1927) IV-56
Pehrson v. Saderup,
498 P.2d 648 (Utah 1972) V-42,43
Peick v. Pension Benefit Guaranty Corp.,
539 F. Supp. 1025 (N.D. 111. 1982),
appeal pending, No. 82-2081 (7th Cir.) VI-15,23
Penn Central Transportation Co. v.
New York Citv,
438 U.S. 104 (1978) VI-14,18,29-31,33
Pennsylvania Coal Co. v. Mahon,
260 U.S. 393 (1922) VI-33
Pension Benefit Guaranty Corp. v. Ouimet Corp.,
470 F. Supp. 945 (D. Mass. 1979),
aff'd, 630 F.2d 4 (1st Cir. 1980),
cert, denied, 450 U.S. 914 (1981) VI-23,46
PepDer v. Litton,
308 U.S. 295 (1939) IV-14
Petition of Kinsman Transit Co.,
388 F.2d 821 (2d Cir. 1968) 111-33
Phillips Petroleum Co. v. Hardee,
189 F.2d 205 (5th Cir. 1951) 1-42
A-8
Phillips Petroleum Co. v. Mangan,
ll4 P.2d 454 (Okla. 1941) V-42
-------
B-12
Pa^e
Pope Mfg. Co. v. Gormully,
144 U.S. 224 (1892) IV-52
Precision Instrument Mfq. Co. v. Automobile Co.,
324 U.S. 806 (1945) IV-52
PruneYard Shoppinq Center v. Robins,
447 U.S. 74 (1980) VI-14
Public Service Commission v. Wycoff Co., Inc.,
344 U.S. 237 (1952) V-24
Railroad Retirement Board v. Alton
Railroad Co.,
295 U.S. 330 (1935) VI-28,36-39,46,49
Ramirez v. Amsted Industries, Inc.,
408 A.2d 813 (N.J. 1979),
aff'd, 431 A. 2d 811 (1981) A-10
Rawlinqs v. Ray,
312 U.S. 96 (1941) 1-30
Regional Rail Reorganization Act Cases,
419 U.S. 102 (1974) VI-35
Reserve Mining Co. v. EPA,
514 F.2d 492 (8th Cir. 1975) IV-24,25,41
Richards v. Stanley,
271 P.2d 23 (Cal. 1954) 111-33
Robie v. Lillis,
299 A.2d 155 (N.H. 1972) A-3,7
Rodrock v. Security Industrial Bank,
642 F.2d 1193 (10th Cir. 1981), prob.
juris, noted sub nom. U.S. v. Security
Industrial BanfiT] 102 S. Ct. 969 (1982 ) VI-15,18
Ryan v. Eli Lillv & Co.,
514 F. Supp. 1004 (D.S.C. 1981) 111-42
Rvlands v. Fletcher,
3 H.L. 330 (1868) 11-3-5
Sabine Towing and Transportation Co. v. United States,
16 E.R.C. (BNA) 2081 (Ct. Cl. 1981) 11-11
-------
B-13
Page
San Dieao Gas & Electric Co. v. City of San Dieao,
450 U.S. 621 (1981) VI-14
SCM Corporation v. Xerox Corporation,
507 F. 2d 358 {2d Cir. 1974) IV-37
SEC v. Advance Growth Capital Corp.,
470 F< 2d 40 (7th Cir. 1972) IV-32
SEC v. Coffev,
493 F. 2d 1304 (6th Cir. 1974) IV-32
SEC v. National Bankers Life Insurance Co.,
334 F. Supp. 444 (N.D. Tex. 1971),
aff'd, 477 F.2d 920 (5th Cir. 1973 ) IV-32
Seckerson v. Sinclair,
140 N.W. 239 (N.D. 1913) 1-4
Shell Oil v. Ainsworth.,
2 E.R.C. (BNA) 1506 (Miss. 1971) A-3
Shelter Framing Corp. v. Carpenters Pension Trust,
543 F. Supp. 1234 (C.D. Cal. 1982),
appeal pending, No. 82-5460 (9th Cir.) VI-15
Shunk v. Bosvcrth,
334 F.2d 309 (6th Cir. 1964) 111-45
Simmons v. Everson,
25 N.E. 911 (N.Y. 1891) 1-4
Sindell v. Abbott Laboratories,
607 P.2d 924 (Cal.), cert.
denied, 449 U.S. 912 (1980) 1-35
111-41,42,44-46
Sir John Heydon's Case,
77 Eng. Rep. 1150 (1613) 1-3
SK&F, Co. v. Premo Pharmaceutical Laboratories, Inc.,
625 F.2d 1055 (3d Cir. 1980) IV-35
Snavely v. City of Goldendale,
117 P.2d 221 (Wash. 1941) 1-38
Sola Electric Co. v. Jefferson Electric Co.,
317 U.S. 172 (1942) 1-28
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B-14
Page
Somerset Villa, Inc. v. City of Lee's Summit,
436 S . W. 2d 653 (Mo. 1969) 1-38
Starling v. Seaboard Coast Line R. Co.,
533 F. Supp. 183 (S.D. Ga. 1982) 111-42,43
State Dept. of Environmental Quality v. Chemical
Waste Storage & Disposition, Inc.,
528 P.2d 1076 (Ct. App. Ore. 1974) 1-4
IV-51
A-6,7
State Department of Fisheries v. Gillette,
621 P.2d 764 (Ct. App. Wash. 1980) V-41,46
Stsckman v. Quincy, O. & K.C. R. Co.,
165 S.W. 1122 (Mo. 1914) V-43
Steuart Transportation Co. v. Allied Towing Corp.,
596 F. 2d 609 (4th Cir. 1979) 11-11,13
Stueve v. American Honda Motors Co.,
457 F. Supp. 740 (D. Kan. 1978) 1-56
11-15
Summers v. Tice,
199 P.2d 1 (Cal. 1948) 111-39,43,44
Sun Valley Airlines v. Avco-Lycoming Corp.,
411 F. Supp. 598 (D. Id. 1976) 1-55
11-15
Texas Industries, Inc. v. Radcliff Materials,
451 U.S. 630 (1981) 1-31,33,52-54
Textile Workers Union v. Lincoln Mills,
353 U.S. 448 (1957) 1-28,31
The Schooner Catharine v. Dickinson,
58 U.S. 170 (1855) 1-32
Toilet Goods Association, Inc. v. Gardner,
387 U.S. 158 (1967) V-34
Tua Ocean Prince, Inc. v. United States,
436 F. Supp. 907 (S.D.N.Y. 1977),
aff'd in part and rev'd in part,
584 F. 2d 1151 (2d Cir. 1978 ) 11-13,14
-------
B-15
Paae
Tvittv v. North Carolina,
527 F. Supp. 778 (E.D.N.C. 1981) A-9
Udall v. Littell,
366 F. 2d 668 (D.C. Cir. 1966) IV-52
United Auto Workers v. Hoosier Cardinal Corp.,
383 U.S. 696 (1966) 1-30
United States v. Bear Marine Services,
15 E.R.C. (BNA) 1953 (E.D. La. 1980) 11-14
United States v. Burns,
512 F. Supp. 916 (W.D. Pa. 1981) V-32
United States v. Causby,
328 U.S. 256 (1946 ) VI-33
United States v. City of Milwaukee,
395 F. Supp. 725 (E.D. Wis. 1975) IV-53
United States v. Clarksdale King & Anderson Co.,
288 F. Supp. 792 (N.D. Miss. 1965) IV-32
United States v. Darusmont,
449 U.S. 292 (1981) VI-15,57
United States v. Diamond Shamrock Corp.,
17 E.R.C. (BNA) 1329 (N.D. Ohio 1981) IV-11
VI-16
United States v. General Motors,
403 F. Supp. 1151 (D. Conn. 1975) 11-14
United States v. Georgia-Pacific Co.,
421 F.2d 92 (9th Cir. 1970) IV-53-55
United States v. Gulf-State Theaters,
256 F. Supp. 549 (N.D. Miss. 1966) IV-33
United States v. Hardaqe,
Civ. No. 80-1031-W
(W.D. Okla. Sept. 29, 1982) 11-15 •
IV-11,17,27,28,42
United States v. Hollywood Marine,
16 E.R.C. (BNA) 2180 (S.D. Texas 1981) 11-11
United States v. Klein,
80 U.S. (13 Wall. ) 128 (1872) VI-13
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B-16
Page
United States v. LeBeouf Bros. Towing Co.,
621 F. 2d 787 (5th Cir. 1980) 11-13
United States v. Little Lake Misere Land Co.,
412 U.S. 580 (1973) 1-26,28
United States v. Malitovsky Cooperage Co.,
472 F. Supp. 454 (W.D. Pa. 1979) 111-17
United States v. Midwest Solvent Recovery, Inc.,
484 F. Supp. 138 (D. Ind. 1980) IV-8,9,11
United States v. M/V Big Sam,
505 F. Supp. 1029 (E.D. La. 1981),
aff'd in part, rev'd in part,
17 E.R.C. (BNA) 2169 (5th Cir. 1982) 1-46,48
11-11,12
United States v. Outboard Marine Corp.,
18 E.R.C. (BNA) 1087 (N.D. 111. 1982) IV-7,10,16,29
United States v. Price,
523 F. Supp. 1055 (D.N.J. 1981), aff'd,
No. 82-5030 (3d Cir. Sept. 14, 1982) IV-11,36,38,39
United States v. Reilly Tar & Chemical Corp.,
546 F.supp. 1100 (D. Minn. 1982 ) IV-passim
V-17,13
United States v. Reliable Transfer Co.,
421 U.S. 397 (1975) 1-32,55
United States v. Slade, Inc.,
447 F. Supp. 638 (E.D. Tex. 1978) 111-17
United States v. Solvents Recovery
Service of New England,
496 F. Supc. 1127 (D. Conn. 1980) IV-8-10,12,42
VI -16
United States v. South Carolina
Recycling and Disposal, Inc.,
Civ. No. 80-1274-6 (D.S.C. 1980) 1-37,48
United States v. Tex-Tow, Inc.
589 F. 2d 1310 (7th Cir. 1978) 11-6
111-17,36
United States v. The Barge Shamrock,
635 F.2d 1103 (4th Cir. 1980),
cert, denied, 454 U.S. 330 (1981) V-31
-------
E-17
Paae
United States v. The Thekla,
266 U.S. 328 (1924) IV-53
United States v. Vertac Chemical Corp.,
489 F. Supp. 870 (E.D. Ark. 1980) 1-35
IV-11,25-27,41
VI-16
A-7
United States v. Wade,
546 F. Supp. 785 (E.D. Pa. 1982) 1-8
IV-passim
V-l,10,17,18,58
United States v. Ward,
'443 U.S. 242 (1980) VI-13
United States v. Waste Industries, Inc.,
1 Chem. & Rad. Waste Lit. Rep.
1017 (E.D.N.C., April 7, 1981) A-7,10
United States v. Yazell,
'382 U.S. 341 (1966) 1-26
United States Trust Co. v. New Jersey,
431 U.S. 1 (1977) Vl-passim
Untermyer v. Anderson,
276 U.S. 440 (1928) VI-51
Usery v. Turner Elkhorn Mining Co.,
428 U.S. 1 (1976) Vl-passim
Valley Towing Service, Inc. v. SS American Wheat,
Civ. No. 75-363 (E.D. La.,
Jan. 23, 1980) 1-54
11-11,14,15,55
Van Arsdel v. Texas A&M University,
628 F.2d 344 (5th Cir. 1980) IV-37
Veix v. Sixth Ward Building & Loan Ass'n,
310 U.S. 32 (1940) VI-18,26
Velsicol Chemical Corp. v. Rowe,
543 S.W.2d 337 (Tenn. 1976) A-8
Village of Wilsonville v. SCA Services, Inc.,
426 N.E.2d 824 (111. 1981) IV-50
A-3,5,9
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8-18
Page
Virginia Petroleum Jobbers Ass'n v. FPC,
259 F. 2d 921 (D.C. Cir. 1958) IV-35
Virginia Ry. Co. v. System Federation,
300 U.S. 515 (1937) IV-14
Wallis v. Pan American Petroleum Corp.,
384 U.S. 63 (1966) 1-26,28
Warren County v. North Carolina,
528 F. Supp. 276 (E.D. N.C. 1981) A-9
Watkins v. FMC Corp.,
531 P. 2d 505 (Ct. App. Wash. 1975) V-43,44
Watkins v. Mountain Home Cooperative Irrigation Co.,
197 P. 247 (Idaho 1921) V-43
Weinberger v. Romero-Sarcelo,
102 S.Ct. 1798 (1982) IV-35-37
Welch v. Henry,
305 U.S. 134 (1938) VI-51
West Muncie Stxawboard Co. v. Stack,
72 N.E. 879 (Ind. 1904) 1-40
Weyerhauser S.S. Co. v. United States,
372 U.S. 597 (1963) 1-32
William G. Roe & Co. v. Armour & Co.,
414 F.2d 862 (5th Cir. 1969) 1-38,39
Williams-McWilliams Co. v. United States,
551 F.2d 945 (5th Cir. 1977) IV-56
Wood v. Snider,
79 N.E. 858 (N.Y. 1907) 1-34
Yakus v. United States,
321 U.S. 414 (1944) IV-14,48
Yommer v. McKenzie,
257 A.2d 138 (Md. 1969) II-4
Zampos v. U.S. Smelting, Ref. & Min. Co.,
206 F. 2d 171 (10th Cir. 1953 ) II-5
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TABLE OF BOOKS AND ARTICLES
Page
Burke, The 1976 Retroactive Amendment of
the Minimum Tax: An Exercise of the
Taxing Power or a Taking of Property,
32 Baylor L. Rev. 165 (1980) VI-16
Calabresi, Concerning Cause ana the Law of
Torts: An Essay for Henry Kalven, Jr.,
43 Chi. L. Rev. 69 (1975) III-5
Chaffee, Coming Into Equity with Clean Hands,
47 Mich. L. Rev. 877 (1949) IV-52
Comment, A Private Nuisance Approach
to Hazardous Waste Disposal Sites,
7 Ohio N.U.L. 86 (1980) A-3
Countryman, Real Estate Liens in
Busines! Rehabilitation Cases,
50 Am. Bankr. L. J. 303 (1976) VI-35
Dobbs, Remedies (1973) IV-47, 48
Dore, The Standard of Civil Liability for Hazardous
Waste Disposal Activity: Some Quirks of Superfund,
57 Notre Dame Lawyer 260 (Dec. 1981) V-16
Gilmore and Elack, The Law of Admiralty (2d ed. 1975) .. 1-32
Ginsberg and Weiss, Common Law Liability
for Toxic Torts: A Phantom Remedy,
9 Hofstra L. Rev. 859 (Spring 1981) 1-41
A-4,6,8,10
Hale, The Supreme Court and the Contract Clause,
57 Harv. L. Rev. 512 (1944) VI-20
The Supreme Court and the Contract Clause: II
57 Harv. L. Rev. 621 (1944) VI-19
The Supreme Court and the Contract Clause: III
57 Harv. L. Rev. 852 (1944) VI-19,48
Harper & James, The Law of Torts (1956) 11,1-5,7
Hinds, Liability Under Federal Law
for Hazardous Waste Injuries,
6 Harv. Env. L. Rev. 1 (1982) II-l
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C-2
Pa
-------
C-3
Page -
Tribe, American Constitutional Law (1978) VI-37,38
Vernon and Dennis, Hazardous Substance Generator,
Transporter and Disposer Liability under the
Federal and California Superfunds,
2 J. Env. Law 67 (1981) IV-19
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