On September 27, 2024, in Short Creek Development, LLC v. MFA Incorporated, No. 22-05021-CV-SW-WBG, 2024 WL 4326815 (W.D. Mo. Sept. 27, 2024), Magistrate Judge W. Brian Gaddy determined Plaintiffs’ claim under Section 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) was barred by the applicable statute of limitations as “physical on-site construction of the remedial action” occurred more than six years prior to when Plaintiffs brought their lawsuit.  Specifically, the Magistrate Judge found that costs related to a leachate collection system constructed approximately a year before the adoption of a Record of Decision (“ROD”) amendment outlining a permanent remedy for the Orongo-Duenweg Mining Belt Superfund Site (the “Site”) was the beginning of the six-year limitations period.   In doing so, the Court rejected adoption of a “bright-line” rule that remedial actions begun before adoption of a final remedial plan do not trigger the limitations period. 

In Short Creek, phosphogypsum—a byproduct of the process creating phosphoric acid for use in the manufacture of fertilizer—was placed on top of millions of tons of historical mining and milling wastes on a portion of the Site, forming what is known as a gypstack.  When phosphoric acid production ceased in 1971, the gypstack covered approximately 54 acres in area, with depths varying from a few feet to 60 feet.  The primary contaminants leaching from the gypstack are phosphorous and fluoride, as well as arsenic, aluminum, sulfate, and iron.  However, in addition, the gystack leachate contains contaminants from the underlying mining and milling wastes, including cadmium, copper, lead, nickel, zinc, and iron. 

Given this history, by the time of the litigation, a number of actions had already taken place.  First, as part of a state-led “compliance plan,” a water treatment plant which operated between 2000 and 2012 was constructed to remove phosphorus and fluoride from the gypstack leachate.  In 2004, EPA issued its initial ROD for the Site, which documented the existing system as the remedy for the gypstack.  Subsequently, the state became concerned about the metals which were also present in the soils and the leachate at the Site, and required a more robust leachate treatment system, construction of which began in 2012.  Finally, after additional concerns arose regarding the metals in soils beneath the Site, a ROD amendment in 2013 provided for disposal of significant amounts of metal-contaminated soils to be excavated, as well as other Site materials in place on top of the gypstack, followed by construction of a permanent cap over the gypstack.  At the time of the litigation, construction of the cap had not yet begun and the date of commencement was uncertain.

Plaintiffs, who purchased the gypstack site in 2021 and assumed all related environmental liabilities, filed suit in March of 2022, against Defendant, who constructed and operated the associated fertilizer plant in the 1950s.  By the time the Court held a bench trial on the allocation of damages in December of 2023, Plaintiffs only remaining claim was for recovery of costs incurred prior to June 30, 2023 under Section 107(a).  The parties stipulated that Defendant was liable to Plaintiffs under that provision up to that date and the Court had previously determined that the environmental harm was not divisible.  Following its bench trial, the Court ordered briefing on the statute of limitations issue, among others.

With respect to the statute of limitations, the parties agreed that 42 U.S.C. § 9613(g)(2)(B) controlled.  That relevant language provides:  “An initial action for recovery of the costs referred to in section 9607 of this title must be commenced . . . within 6 years after initiation of physical on-site construction of the remedial action.”  The parties disagreed, however, on what constituted “on-site construction of the remedial action.”  Defendant contended that the water treatment plant and leachate collection system were remedial actions and because on-site construction related to those actions commenced more than six years before suit was filed, the statute of limitations had run.  On the other hand, Plaintiffs contended that there was only one “final remedy” and, thus, the statute of limitation would not be triggered until construction was begun of the cap on the gypstack, the permanent remedy identified in the ROD amendment.

To settle the issue, the Court reviewed the actions that had already taken place at the Site and compared them with CERCLA’s definitions of remedy and remedial action.  It noted that each specific action—the water treatment plant, the leachate collection system, and the gypstack cap—is described by the statutory definition of remedial action.  See 42 U.S.C. § 9601(24).  For example, with respect to the leachate collection system, the definition of remedial action includes “collection of leachate and runoff.”  What is more, the Court determined that the definitions of remedy and remedial action do not mandate a “single” remedy or “final” action, but rather encompass those actions that are consistent with the permanent remedy.  It determined the leachate collection system was consistent with the final remedy, which requires control of runoff and leachate from the gypstack. 

While Plaintiffs offered a number of cases in support of their position, the Court found them easily distinguishable or simply inapplicable to the facts at hand.  First, Plaintiffs argued that the actions to date were similar to investigating, surveying, evaluating, and planning—different in kind from physical on-site construction required to trigger the statute of limitations.  The Court was unpersuaded, noting that the water treatment plant and leachate collection system were remedial actions approved by the agency, were built, and resulted in collection, confinement, and treatment of the leachate.  Plaintiffs also urged the Court to adopt the “bright-line” rule used by the Ninth Circuit, which holds that initiation of physical on-site construction can only occur after the adoption of the final remedial action plan, which the Plaintiffs contended did not happen until the ROD amendment was issued.  After noting other Circuits rejection of the rule, the Court declined to adopt it here, finding it offered neither certainty nor accuracy.  Further, at sites like this one, application would result in evidence concerning liability going stale and indefinite finality for Defendant, contrary to the general purpose of the statute of limitations. 

Given the above, the Court concluded that the leachate collection system was a remedial action specifically listed under the CERCLA definition of a remedial action and that it was consistent with the permanent remedy.  Because physical on-site construction of that system began in January of 2012, the statute of limitations began to run then as well.  Plaintiffs did not file suit until March 2022, and, thus, their 107(a) claim was time-barred.

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