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In a decision that should pique the interests of environmental consultants across the country, the U.S. District Court for the Eastern District of Missouri issued an opinion last month in BancorpSouth Bank v. Environmental Operations, Inc., Case No. 4:11CV9 HEA (E.D. Mo. Oct. 11, 2011),allowing a CERCLA claim to survive against several engineering firms hired to handle the remediation of an old landfill slated for a Brownfields redevelopment project. The complaint alleged that the defendants failed to properly design and construct an engineered cell on the site (which didn’t account for the potential for methane gas to escape the cell), and further failed to adequately screen hazardous materials from the dirt on the site prior to spreading it around as fill material. These activities, according to the plaintiff, not only constituted malpractice, but also turned the engineering firms into “operators” and/or “arrangers” under CERCLA, subjecting them to strict, joint and several liability for alleged damages in excess of $10 million.
After the complaint was filed, one of the engineering firms, Clayton Engineering Company, Inc., sought to dismiss the CERCLA count, arguing that it had neither actual control nor the authority to control any of the environmental operations on the property. But the district court disagreed, holding that the complaint sufficiently alleged that Clayton had the authority to control the handling of the hazardous materials on the property – the standard for imposing operator liability under CERCLA – and that whether Clayton actually had such control was a subject for another day.
It will be interesting to see where this case goes. Section 119 of CERCLA, 42 U.S.C. § 9619, provides that a “response action contractor” cannot be liable under CERCLA for any damage resulting from a release of hazardous substances, unless the release is caused by the contractor’s negligence, gross negligence or intentional misconduct. But it is unclear whether the defendant consultants in this case would qualify as “response action contractors” – a term that, generally speaking, is limited to those who perform work either for the government, or for a private responsible party under the supervision of the government.
Notably, none of the defendants appeared to have asserted the “response action contractor” defense in their answers to the complaint. But if they do end up pursuing it, and can establish that they are in fact “response action contractors,” it’ll mean that the plaintiff will need to establish negligence, at a minimum, for liability to be imposed.
Even then though, it will behoove the plaintiff to do what it can to keep the CERCLA claim alive, particularly in order to keep the prospect of joint and several liability on the table. In this regard, while at least one appellate court has acknowledged that placing response action contractors in danger of paying for an entire cleanup may chill the process of identifying and cleaning up hazardous sites, it was not prepared to state that CERCLA’s standard joint and several liability scheme was off-limits in these contexts. In theory, this means that any one of the BancorpSouthdefendants, if negligent, could face liability in excess of $10 million, subject only to their own ability to establish the percentage negligence of the others (who, hopefully, remain solvent).