Recently Enacted Changes in CERCLA Liability Scheme

Article

In-Sites

January 14, 2002

By: Paul M. HaugeEdward F. McTiernan

On December 21, 2001, Congress enacted the Small Business Liability Protection and Brownfields Revitalization Act which amends the liability scheme established by CERCLA. On January 11, 2002, President Bush signed this legislation. The important redevelopment incentives found in this new legislation will be addressed in future issues of In-Sites. The following is a summary of the liability provisions found in this new statute.

De Micromis Exemption: These amendments add a new subsection to CERCLA that exempts from liability certain de micromis generators and transporters. The exemption applies only to liability for costs at NPL sites. To qualify for the exemption, a party must demonstrate that the total amount of material containing hazardous substances that it sent or took to the facility in question was less than 110 gallons (i.e., 2 barrels) of liquid material or less than 200 pounds of solid material (or such greater or lesser amounts as EPA may determine by regulation), and that all or part of the disposal, treatment or transport took place before April 1, 2001. In contribution actions brought by nongovernmental entities, however, the burden of proof shifts to the party bringing the action, who must show that the volume/weight and time conditions are not met.

The de micromis exemption does not apply where the EPA determines that the material in question contributed or could contribute significantly to the cost of a response action or natural resource restoration with respect to the facility in question; that the person has failed to comply with an information request or administrative subpoena, or that the person has been convicted of a criminal violation for the conduct to which the exemption would apply.

These amendments introduce a unique cost shifting feature to CERCLA litigation. A nongovernmental entity that brings a contribution action against a party that is not liable because of the de micromis exemption provided shall be liable to that party for all reasonable defense costs, including reasonable attorney’s fees and expert witness fees.

Municipal Solid Waste Exemption: These amendments also add a new subsection that exempts certain generators of municipal solid waste. As with the de micromis exemption, it applies only to liability for costs at NPL sites. Municipal solid waste is defined as waste generated by households, and waste generated by commercial, industrial, or institutional entities to the extent that it is essentially the same as household waste, is collected and disposed of along with household waste, and contains levels of hazardous substances no greater than those found in household waste. Among other things, it specifically includes office supplies, cosmetics, and household hazardous waste, but does not include combustion ash from incinerators or manufacturing or processing waste that is not essentially the same as household waste.

To qualify for this new exemption, a CERCLA defendant must demonstrate that it is the owner, operator or lessee of residential property from which all the waste came, a business entity (including a parent, subsidiary, or affiliate of the entity) that has fewer than 100 full-time employees or is a 501(c)(3) organization that has fewer than 100 employees at the location from which all the waste came.

The municipal solid waste exemption does not apply where EPA determines (a determination not subject to judicial review) that the material in question contributed or could contribute significantly to the cost of a response action or natural resource restoration with respect to the facility in question.

As with the de micromis exemption, a nongovernmental entity that brings a contribution action against a party that is eligible for the municipal solid waste exemption shall be liable to that party for all reasonable defense costs, including reasonable attorney’s fees and expert witness fees.