Those who have been unlucky enough to participate in remediation of a Superfund site know that two issues make the experience very uncomfortable; strict liability and joint and several liability. Strict liability is painful enough, imposing liability if you have sent hazardous substances to a facility, regardless of fault. Joint and several liability is even more painful, creating liability for the entire cost of cleanup regardless of the volume of hazardous substances actually sent to the site. However, a recent ruling by the U.S. Supreme Court in a case entitled Burlington Northern & Sante Fe Railway Company, et al., v. United States (“Burlington Northern”) may provide welcome relief from joint and several liability.
Previously, to avoid joint and several liability, a party needed to provide evidence it was either not responsible for the harm caused by the disposal or only responsible for a portion of the harm. Otherwise, a small mom and pop company would have the same degree of liability as a Fortune 500 company. Fortunately, the Burlington Northern decision concluded that costs may be apportioned amongst the various Superfund parties if there is “a reasonable basis for identifying a portion of the harm attributable” to a party. More importantly, the Supreme Court described what was necessary to demonstrate that “reasonable basis.”
In Burlington Northern, the Supreme Court approved the lower court’s apportionment formula. That court considered the percentage of the site used by Burlington Northern, compared the length of time Burlington Northern leased the property to the total time hazardous substances were disposed at the site, and also compared the volume of hazardous substances released by Burlington Northern to the total volume disposed at the site. Significantly, the lower court also concluded that no basis existed to quantify the contribution from the Burlington Northern property to the groundwater contamination. The Supreme Court approved the lower court’s analysis, finding that there was a sufficient “reasonable basis” to avoid joint and several liable.
The decision is particularly important since, at lease at a majority of Superfund sites, the most reliable evidence available as to disposal of hazardous substances is the volume of hazardous substances sent to the site. The Supreme Court determined that “divisibility may be established by ‘volumetric, chronological, or other types of evidence,’ including appropriate geographic consideration.”
Of course, the next hurdle is the United States Environmental Protection Agency (“EPA”); how will EPA apply the Burlington Northern decision to existing Superfund sites? Encouragingly, a federal district court, in an environmental tort claim, used the Burlington Northern decision to apportion costs. While agreeing that the burden to prove divisibility is on the “culpable party,” the court held that the burden of production is low; the party need only demonstrate a reasonable basis for its proposed share. Clearly, one court has received the message from the Supreme Court; now we must wait to see if EPA has as well.