The Ability to Recover the Cost of Environmental Cleanup may be Lost Without Public Participation Beyond Oversight by a Regional Water Quality Control Board

Addressing an oft asked question in environmental law, the Ninth Circuit Court of Appeals recently held that minimal cleanup oversight by the Regional Water Quality Control Board ("RWQCB") did not fulfill the public participation requirement of the National Contingency Plan ("NCP"). (See Carson Harbor Village, Ltd. v. County of Los Angeles, et al. (9th Cir. 2006) 06 C.D.O.S. 339.)

On January 12, 2006, the Ninth Circuit denied plaintiff Carson Harbor Village, Ltd. ("Carson Harbor") recovery of cleanup costs under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") because Carson Harbor failed to fulfill both the public participation and the feasibility study requirement of the NCP. Before a party can recover a portion of its cleanup costs from a prior owner, CERCLA requires that the party demonstrate substantial compliance with the NCP.

Unocal Corporation ("Unocal") held an oil and gas lease on the subject property located in Carson, California from 1945 to 1977. Thereafter, Carson Harbor owned and operated a mobile home park. In 1994 Carson Harbor discovered tar-like and slag material with high lead levels on the Property. As required by law, Carson Harbor notified RWQCB of the high lead concentrations at the Property. By October of 1995, Carson Harbor and Unocal completed remediation of the Property.

On May 7, 1996 Carson Harbor filed suit against Unocal and other parties, seeking reimbursement for cleanup costs under CERCLA, as well as damages under other federal and state laws. The District Court granted summary judgment in favor of Unocal on the CERCLA claim, holding that Carson Harbor failed to show it substantially complied with the NCP public participation and feasibility study requirements.

In analyzing the NCP criteria on appeal, the Ninth Circuit recognized that the public participation requirement has three main components. First, a party developing a remedial action plan ("RAP") and conducting the cleanup "shall… to the extent practicable" interview local officials, community residents, or other affected parties to learn about their concerns. Second, a formal community relations plan must be prepared to ensure an opportunity for public involvement, and at least one local "information repository" must be established to make information available to the public about the site remediation. Third, after a RAP has been chosen, the party conducting the cleanup shall publish notice of the RAP in a local newspaper, provide an opportunity for public comment and a public meeting, make a transcript of the meeting available to the public, and prepare a written summary of significant comments and responses to those comments.

The Ninth Circuit held that Carson Harbor failed to comply with the public participation requirement in part because it did not provide the public an opportunity to learn about or comment on its proposed remediation plan. It was further held that the RWQCB's "minor and ministerial" involvement did not rise to the level of substantial NCP compliance. Specifically, the Court emphasized that the RWQCB: (1) was not present when Carson Harbor did a preliminary investigation of the pollutants at the Property; (2) was not actively involved in the RAP at the Property; (3) merely approved the proposed RAP with very minor modifications; and (4) did not oversee the cleanup, but simply inspected the Property after cleanup was complete.

In addition, the Ninth Circuit found that Carson Harbor had not demonstrated substantial compliance as to the feasibility study requirements of the NCP. One of the hallmarks of the feasibility study requirement is to conduct an assessment and analysis of various viable alternatives. The only evidence that Carson Harbor put forth to show that it had considered other options beyond removal was a declaration stating that "various alternatives" had been considered. The Ninth Circuit found that the statement alone was insufficient to show that Carson Harbor had considered alternative remedies, and as such, it determined that Carson Harbor failed to meet the NCP feasibility study requirement.

In sum, after Carson Harbor, the limited oversight of environmental cleanup by a Regional Water Quality Control Board is insufficient public participation under the NCP. Further, there must be evidence that alternative remediation methods were considered in order to comply with the feasibility study requirements of the NCP.

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