In the five years since the seminal decision in Burlington Northern and Santa Fe Railway Co. v. United States, 556 U.S. 599 (2009)—which held that if a defendant can demonstrate a reasonable means of apportioning a single divisible harm it will not be held jointly and severally liable under CERCLA—few courts have actually concluded there was divisibility of harm among potentially responsible parties (PRPs). As a result, counsel seeking to establish a divisible CERCLA harm must be rigorous at first demonstrating the entire harm and then a reasonable means of segregating the harm caused by her client.
As explained by Judge Mark R. Kravitz in Yankee Gas Servs. Co. v. UGI Utils., 852 F.Supp. 2d 229, 242 (D.Conn. 2012), to “apportion” is to request separate checks, with each party paying only for its own meal. To “allocate” is to take an unitemized bill and ask everyone to pay what is fair.
Divisibility is a fact-intense question of law that depends largely on Restatement (Second) of Torts §433A, which provides that when two or more persons acting independently cause a distinct or single harm that can reasonably be divided according to the contribution of each, each is subject to liability only for the portion of the total harm that he has himself caused. But where two or more persons cause a single and indivisible harm, each is subject to liability for the entire harm. If a defendant cannot demonstrate that it caused a distinct harm, but instead has contributed to a single indivisible harm, the second prong of the divisibility test must be shown, i.e., that there is a reasonable factual basis for an apportionment.
The sampling of cases that follow are instructive on demonstrating or refuting divisibility of harm under CERCLA.
Cases Rejecting Divisibility
(1) In United States v. NCR, 960 F. Supp.2d 793 (E.D. Wis. 2013), numerous defendants contributed PCBs to the Lower Fox River in Green Bay, Wisconsin. NCR argued that for a portion of the river (OU4), it was only severally liable because the harm in that part of the river was divisible. In ruling on the government’s motion for a preliminary injunction, the court found that NCR’s discharges were a “sufficient cause” of the environmental harm in OU4. The U.S. Court of Appeals for the Seventh Circuit concluded that apportionment is improper “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.” The court found that because NCR’s discharges would, on their own, require roughly the same remedial measures that were being undertaken to address all of the PCB contamination, it could be deemed a sufficient cause of the harm. And because it would have essentially caused almost all of the harm just on its own, as a legal and policy matter it made sense to conclude that NCR should be deemed jointly and severally liable for the OU4 harm.
Later, the court granted the government and state’s motion for a permanent injunction and declaratory relief to hold NCR jointly and severally liable. The first step was to define the harm:
Before determining whether the harm is theoretically capable of divisibility, it is important to define what the ‘harm’ is. …[T]he harm could include the danger to the public, the actual volume of PCB-containing sediment at the bottom of the river, the cost to remediate (remove or cover) that sediment, or the remediation work itself.
The harm was best defined with reference to the concentration of contamination that would require remediation. Because the government established a PCB remedial threshold of 1 part per million (ppm), meaning that areas containing concentrations higher than 1 ppm are contaminated and thus subject to remediation, if a PRP’s discharges were necessary to reach or exceed 1 ppm, that PRP contributed to the harm in that area. The court adopted the view that joint and several liability may (and should) attach even if a party is not a sufficient cause of the harm, so long as the party is necessary to the harm.
Therefore, even if NCR’s contribution of 0.7 ppm of PCBs to a given area would not require remediation, it becomes harmful (requiring remediation) when mixed with the PCBs from other sources. NCR was found to be jointly and severally liable.
(2) In another river case, Pakootas v. Teck Cominco Metals, 868 F.Supp 2d 1106 (E.D.Wash. 2012), the state of Washington and the Confederated Tribes of the Colville Reservation sought to dismiss Teck’s “divisibility of harm” defense. Teck disposed of slag and liquid effluent into the Upper Columbia River from its smelter operations. Teck’s divisibility defense failed because Teck did not show its relative contribution to the total contamination of the Upper Columbia River. The court found that simply demonstrating the volume of Teck’s slag does not establish its relative contribution to the single harm at the site. The court found that there was no evidence that the volume of slag is truly proportional to the harm potentially caused by it, particularly so when Teck’s experts failed to address possible synergistic effects of commingled contaminants of various types (metals and nonmetals).
(3) In 3000 E. Imperial v. Robertshaw Controls, 2010 U.S. Dist. Lexis 138661 (C.D. Cal. Dec. 29, 2010), the current property owner sued prior owners for contamination of the property. The defendant proposed using two criteria to establish that the contamination is divisible in terms of degree: the relative sizes of the two contaminated areas on the property (Area 1 and Area 2) and the number of years each party owned the land. The court mandated that there must be evidence to support a relationship between these criteria and the amount of harm caused by the defendants. Area 1 was 55 percent of the contaminated property, and Area 2 was 45 percent of the contaminated property.
The defendant argued that the court should limit its liability to Area 1 since there is no evidence that it used TCE or benzene in their operations in Area 2. This argument necessarily relied on testimony that the defendant never used TCE in its operations as Area 2 comprises the area underneath the former manufacturing building where degreasing and assembly of valves would have occurred. Because the court found that defendant did use TCE in its operations, it rejected divisibility based on the respective sizes of Areas 1 and 2. Moreover, there was no evidence showing the defendant’s relative contribution to the contamination in Area 2 compared to the contribution by the other owners.
The defendant also proposed using the number of years of its ownership as a basis for apportioning liability. The defendant notes that the underground storage tanks (USTs) in Area 1 were installed in 1942 and removed in 2009, a 67-year period. The defendant owned the property for eight years, which is 12 percent of the time the USTs were in the ground. The court found that apportioning liability might be reasonable if there were some evidence that the USTs leaked steadily during the entire 67 years that they were in the ground. However, because it was possible that most, if not all, of the TCE leaked out of the USTs during the defendant’s ownership, years of ownership was not an appropriate method of apportionment.
(4) In Board of County Commissioners v. Brown Group Retail, 768 F. Supp. 2d 1092 (D.Colo. 2010), the current owner of property which operates a jail sought to recover costs for on-site and off-site solvent contamination caused by the prior operations at this site (production of optical lenses that were incorporated into rifle scopes and the assembly of rifle scopes). The defendant sought divisibility based on the nature of the contamination found in various geographic areas. The court concluded that there were distinguishing characteristics of the solvent contamination in distinct areas. However, the court found that Brown Group’s manufacturing operations contributed to the contamination in each of these areas, and that there was not a reasonable basis to determine the separate contribution of Brown Group to the contamination.
It has been recognized that determining the contribution of each cause to a single harm where there has been a commingling of contaminants often requires a very complex assessment of the relative toxicity, migratory potential and synergistic capacity of the hazardous wastes at issue. None of these issues was addressed in a manner useful to apportionment analysis at trial. Rather, Brown Group’s evidence supporting divisible harm based on geographic location focused on the relative measures of solvents present at different locations on the property and off-site.
Furthermore, although the solvent contamination to the east of the jail is driving future costs of remediation, there was little to no evidence as to how geographic distinctions impacted the recoverable response costs the current owner has already incurred. Under these circumstances, Brown Group has failed to meet its burden of establishing that geographic location provides a reasonable basis for apportioning the current owner’s past and future response costs.
The Brown Group also sought divisibility between defendants based on the period of time that each operated the former plant. The fact that the co-defendant operated the plant for approximately the same period of time using the same or similar processes as Brown Group, however, is an insufficient basis for concluding that it is responsible for approximately half of the solvent contamination. The incomplete records presented at trial did not establish to any degree of reasonable probability the number of lenses manufactured or the volume of solvents used and disposed of while the co-defendants operated the plant. Therefore, the respective periods of operation did not provide a reasonable basis for apportioning past and future response costs.
Cases Accepting Divisibility
(1) In City of Gary v. Paul Shafer, 2011 U.S. Dist. Lexis 86710 (N.D. Ind. 2011), the court was tasked with allocating the responsibility of Paul’s Auto Yard, the operator that closed the site. The court found that because Paul’s Auto Yard only moved a small amount of contaminated soil for a short duration of time, strict liability should not be imposed. The court found that volume and time of operations was a reasonable, objective, measurable, concrete and specific basis for allocation of liability in this case. It is a reasonable basis for determining the contribution of Paul’s Auto Yard, to the single harm in this case. The opinion seems to conflate the divisibility analysis with a traditional allocation of fault pursuant to CERCLA’s right of contribution based on equitable factors.
(2) In Reichhold v. U.S. Metals, 655 F. Supp. 2d 400 (D.N.J. 2009), the property owner sued the prior owner, which had engaged in smelting operations, to recover costs expended to investigate and remediate the site. The court found that there were special circumstances for one of Reichhold’s claims—reimbursement of costs incurred in connection with the most recent cap. There, the court has found that the cap requirement had two causes—U.S. Metals’ use of large amounts of metals containing slag throughout the parcel and as fill in the southern part of the parcel, and Reichhold’s depositing 2 to 3 feet of metals containing fill over a substantial portion of the parcel. The court found that each contamination alone would have caused the New Jersey Department of Environmental Protection to require the additional cap, and together they constituted a single harm.
After finding a single harm, the court found that the metals contamination of the southern portion of the parcel was a distinct or single harm that U.S. Metals and a third party caused. There is a reasonable basis for division according to the contribution of each. The measurement is not the exact amount of metals contamination for which each was responsible; U.S. Metals was undoubtedly the source of most of it. Rather, it is the circumstances that each was responsible for a sufficient amount of metals contamination that required the cap.
(3) In Attorney General and Department of Natural Resources v. Clark Refining, 2003 Mich. App. Lexis 41 (Mich. App. Jan. 10, 2003) (unpublished decision), the trial court awarded costs for investigating and connecting 27 residential properties to the community water system following a release of benzene, toluene, ethylbenzene and xylene (components of gasoline) at the defendant’s filling station. On appeal, the plaintiffs contend that the trial court erred by failing to require the defendant to pay all of the plaintiffs’ corrective action costs. The defendant argued on appeal that the trial court erred by requiring the defendant to pay more than its share of corrective action costs.
The case involved two contaminated groundwater plumes. The plaintiff alleged that the defendant should be jointly and severally liable for all costs pursuant to the Leaking Underground Storage Tank Act (later repealed). Given the lack of published case law interpreting the LUST Act, the parties agreed that the court should look to CERCLA common law. The plaintiffs alleged that contamination at the site was commingled and, therefore, indivisible. The defendant successfully refuted this allegation by demonstrating the presence of chlorinated volatile organic compounds at the site and a separate and distinct release from the former Chevron gas station across the street.
Because the defendant proved divisibility of environmental harm, the trial court correctly allocated only a portion of the plaintiff’s corrective action costs to the defendant.
The divisibility of harm analysis embraced by the Supreme Court in Burlington Northern has not resulted in many cases that have found divisibility. The factual analysis that is required to show a distinct harm or a meaningful basis for apportionment may continue to be difficult except in the most straightforward cases, as when there is physically isolated contamination.
Reprinted with permission from the July 21, 2014, issue of the New Jersey Law Journal. © 2014 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.