HELENA, Mont. (Legal Newsline) – The Montana Supreme Court has upheld a ruling against Atlantic Richfield Co. in a lawsuit over whether the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) bars a state law claim for restoration damages.
Justice James Jeremiah Shea delivered the Dec. 29 opinion, with Justice Laurie McKinnon offering a dissenting opinion.
"We conclude that the district court did not err by denying ARCO’s motion for summary judgment on property owners’ claim for restoration damages as barred by CERCLA and granting property owners’ motion for summary judgment on ARCO’s CERCLA preemption affirmative defenses (11th–13th). To be clear, ARCO is not precluded from contesting the merits of the property owners’ restoration plans. However, that is an issue of fact to be resolved at trial," the opinion states.
ARCO asked the court for a writ of supervisory control in an effort to reverse five orders of the 2nd Judicial District Court in Silver Bow County in the matter of Christian, et al. v. Atlantic Richfield Co.
At the center of the legal scuffle is a claim for restoration damages brought by property owners in and around the town of Opportunity, Montana.
On Aug. 30, 2016, the 2nd Judicial District Court in Silver Bow County issued an order rejecting ARCO’s motion for summary judgment on property owners’ claim for restoration damages as barred by CERCLA and granting the property owner’s motion for summary judgment on ARCO’s CERCLA preemption affirmative defenses.
ARCO owned the property that had been the site of the Anaconda Smelter, which was constructed by the Anaconda Copper Mining Co. before it closed in 1980.
In 1983, the Environmental Protection Agency designated the area as being impacted by the smelter as a superfund site. ARCO owned the land and kicked off a remedial investigation.
"In 1998, EPA selected a remedy pursuant to CERCLA that detailed ARCO’s cleanup responsibilities moving forward," the opinion states. "As part of the company’s cleanup responsibility, the EPA required ARCO to remediate residential yards within the smelter site that held levels of arsenic exceeding 250 parts per million in soil, and to remediate all wells used for drinking water with levels of arsenic in excess of 10 parts per billion."
In total, the property owners, which included 98 landowners, sought the opinion of outside experts to see what needed to be done to restore their properties to pre-contamination status.
After failing to reach an agreement, the property owners started legal action against ARCO in 2008, claiming common law trespass, nuisance and strict liability. They are seeking restoration damages.
According to the opinion, "in 2013, ARCO moved for summary judgment on the grounds that CERCLA prevented the property owners’ claims."
The lower court didn’t address "ARCO’s CERCLA preemption issue because it dismissed the property owners’ case on the basis that their claims were barred by the statute of limitations," the opinion states.
Ultimately, the property owners appealed at the Montana Supreme Court at that time affirmed in part, and reversed in part, the decision and remanded the case back to the district court.
Shea noted that on remand, the district court denied all of ARCO’s contested motions for summary judgment.
For its part, ARCO argues that the property owners should be prohibited from making a state law claim for restoration damages because the claim conflicts with various provisions of CERCLA, and thus are preempted.
Citing Oneok Inc. v. Learjet Inc., Shea noted that "preemption is established expressly, through the unambiguous language of Congress in statute or implied through the doctrines of field preemption or conflict preemption."
Shea also noted that Congress recognized the role of state law in hazardous cleanup when it addressed overlaps between CERCLA and state laws.
In 42 U.S.C. § 9614(b), Congress said, in part that “[a]ny person who receives compensation for removal costs or damages or claims pursuant to any other Federal or State law shall be precluded from receiving compensation for the same removal costs or damages or claims as provided in this Act,” the opinion states.
Citing PMC Inc. v. Sherwin-Williams Co., Shea also pointed out that while a key purpose of CERCLA’s savings clauses is to reinforce the right to demand hazardous waste cleanup apart from CERCLA, a savings clause “is not intended to allow specific provisions of the statute that contains it to be nullified.”
Shea also wrote that CERCLA does not establish a “'new font of law on which private parties could base claims for personal and property injuries.'”
McKinnon said she dissented from the majority’s conclusion that property owners’ claim for restoration damages is not barred pursuant to the provisions of § 113(h).
McKinnon maintained that the issue "before the Supreme Court is one of subject-matter jurisdiction which, if lacking, bars property owners from going to trial on a claim for restoration damages," the opinion states.
“I would reverse because there is no genuine dispute of fact that property owners’ restoration claim conflicts with the ongoing EPA investigation and CERCLA cleanup,” she wrote. “The district court, as a matter of federal law, lacks subject-matter jurisdiction to consider property owners’ claim for restoration damages.”