What Happened: A federal trial court in Maine denied a PRP’s motion to dismiss and in the process distinguished the limiting effect of the United States Supreme Court’s definition of “arranger liability” in Burlington Northern & Santa Fe Railway Co. v. United States, 129 S.Ct. 1870 (2009). Essentially, the court held that knowing disposal of hazardous wastes via sewer lines would fall well within the confines of arranger liability. Because the complaint alleged knowing disposal of poly-aromatic hydrocarbons via sewer lines, the complaint withstood the PRP’s motion to dismiss.
Rationale: In Burlington, the Supreme Court held that “mere knowledge that spills and leaks continued to occur” is an insufficient basis for arranger liability. The PRP alleged that this decision “narrowed the scope of arranger liability under 42 U.S.C. § 9607(a)(3)” sufficiently to dismiss the complaint. In effect, the PRP argued that the plaintiff must allege facts indicating that the PRP overtly arranged for other parties to dispose of hazardous waste. The trial court refused to limit arranger liability to that extreme. Rather, the court held: To the extent that the sewer system, which discharged untreated sewage into a CERCLA site, was owned and operated by the municipality, the PRP’s disposal of hazardous substances via the sewer would fall well within the confines of arranger liability – even after Burlington.
Consequences: Pursuant to recent Supreme Court case law, a plaintiff must allege “a plausible entitlement to relief.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). This “plausibility standard” requires “more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009). Thus, to survive a motion to dismiss, the complaint must contain “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
If the trial court had upheld the PRP’s argument, then it would have the effect of forcing plaintiffs to allege facts – prior to discovery – effectively proving that an off-site PRP overtly entered into a transaction for the sole purpose of transporting and discarding a hazardous substance that ended up at the remediation site. The higher pre-discovery pleading standard would likely curtail CERCLA “arranger” suits because plaintiffs rarely have access to a PRP’s private business contracts and communications when filing an action for contribution.
Example: Company incurs remediation costs for a site clean-up. Company believes that an off-site party has contributed to the environmental harm, but the off-site party is not an owner/operator of the remediation site under CERCLA § 9607(a)(1) or (2). Company’s contribution claim can likely survive dismissal by alleging that the off-site party handled hazardous wastes, and that the off-site was connected to the remediation site by sewer lines.
Case: Frontier Communications Corp. v. Barrett Paving Materials, Inc., No. 1:07-CV-113, 2009 WL 1941920 (D. Me. July 7, 2009)
Posted on
Wednesday, July 22, 2009
by Ivan L. London