U.S Supreme Court Rules That Adjacent Landowners Can Sue So Long As They Don’t Interfere With an EPA Approved CERCLA Remedy
In Atlantic Richfield Co. v. Christian et al., Slip Op. No.17-1498, April 20, 2020, landowners sued Atlantic Richfield in State Court alleging nuisance, trespass and strict liability under Montana law, and among other things, sought restoration damages. Their restoration plan went beyond what EPA required to protect human health and the environment.
The Court held that CERCLA did not strip Montana courts of jurisdiction over the state law claims for restoration damages. But the Court also held that the landowners were potentially responsible parties (PRPs) under CERCLA because they were owners of property where contamination came to rest (even though as a practical matter they were immune from suit under the so called innocent landowner defense). Because they were at least in theory PRPs, the landowners needed to seek EPA approval for their restoration plan since it could intrude on EPA’s approved plan.
The part of the decision requiring EPA approval may be more limited than would appear at first blush. Property damages under Montana law (as in many states) are simply the difference between the value of the property before and after the injury. On the other hand, restoration damage can be more. Under Montana law if the property serves as a private residence and the plaintiff has an interest in seeing the property restored, it can seek the full cost of restoration, i.e. restoration damages. In this instance, the plaintiffs sought the larger restoration damages. Had they sought only property damages, they would apparently not need EPA approval (since just a money damage claim would not interfere with EPA’s cleanup plans), and thus likely would have won hands down.
The moral of the tale appears to be simple. If you own land adjacent to an EPA cleanup site, and your property has been damaged by migrating contamination, sue under state law for property damages only – do not seek restoration costs. And don’t seek injunctive relief that would alter EPA’s remediation decisions or you will run afoul of the same problem. Just sue for common law damages and you should be fine. On the other hand, if you have been sued by an adjacent landowner, see whether the relief plaintiff seeks will arguably interfere with EPA’s power to select the site remedy. If so, the Atlantic Richfield Co. decision may well give you grounds to have the case quickly dismissed.