“Let No Man Put Asunder:” The Act of God Defense and Climate Change

Posted on November 2, 2017 by Peter Hsiao

Following the punishing hurricanes in the gulf coast and island regions of the United States, concern immediately turned to the environmental impacts of toxic releases from damaged chemical facilities.  EPA reports that 13 of the 41 Superfund sites in the area were flooded by Hurricane Harvey.  High winds and rain damaged the protective cap at the San Jacinto River Waste Pits, risking the escape of dioxin contaminated sediments, and EPA ordered the responsible companies to take immediate action.  Even without an order, facility owners will often act as quickly as possible to contain any spills and mitigate their impacts. 

But as a matter of law, would there be a basis to defend against the EPA order or claims for response costs by asserting the Act of God defense?  CERCLA and the Oil Pollution Act both provide a complete defense to liability if the party can show that the release of hazardous substances (or petroleum under the OPA) was caused solely by an act of God.  The defense is severely limited by the requirement that a natural disaster must be “unanticipated” and an “exceptional” event.  For example, CERCLA’s legislative history says a major hurricane may be an act of God, but may not qualify as unanticipated or exceptional in an area where hurricanes are common.  Reportedly there are no cases where the defense has been successfully raised.

A superstorm such as Hurricane Harvey may present a more compelling case for this defense.  While hurricanes are expected in the area, an event that unleashed an estimated 19 trillion gallons of water can be considered exceptional and arguably unforeseeable, even with the recent history of other superstorms (e.g., Sandy, Katrina).  Successfully asserting the defense will likely depend upon expert testimony showing the facility implemented enhanced protective measures before the storm, probably true for most major industrial facilities in the affected area, and that exceptional circumstances overwhelmed those measures, which circumstances could not have been anticipated or prevented even by the exercise of due care or foresight.  

Comparing the precautions taken by other similarly situated facilities will also be important to establish the standard of care.  For example, the Texas environmental agencies worked with chemical facilities before the storm to protect hazardous waste containers from damage and flooding, and any facility asserting the defense will likely need to have undertaken similar precautions to have any chance of success.  For a toxic tort case, there is no statutory Act of God defense, but the same types of arguments will be used to show the facility exercised due care and reasonable foresight in taking protective measures. These issues will also be presented in insurance claims and litigation regarding coverage disputes. 

The defense however has an additional requirement, that the Act of God not be the result of human action, such as from greenhouse gas emissions.  While the relationship between climate change and these superstorms may not be known until years of further study, there is preliminary evidence that global warming made the storms worse by increasing ocean temperatures and raising the sea level, intensifying the impacts of its wind speed, rainfall and storm surges. 

So the Act of God defense may become impossible to win for a superstorm if man-made contributions were a factor – but is this meaningful?  The defense has never been successfully asserted in any event.  But if an alternative causation for a superstorm can be proven by a preponderance of the evidence, there is a potential basis for the responsible party under CERCLA or a tort theory to seek contribution or otherwise allocate a proportionate share of liability to others.  And the large number of “other” potential defendants who contributed to global warming will raise difficult issues of justiciablity.  The recent superstorms may produce a test case with the right combination of circumstances to squarely present these issues to a court. 

That is, while not a complete defense, climate change may provide new theories for defendants.  When a door closes, a window may blow open.

Superfund: After Nearly Forty Years, Still a Work in Progress

Posted on October 19, 2017 by William Hyatt

Since its enactment, the Comprehensive Environmental, Response, Compensation and Liability Act of 1980, commonly known as the Superfund statute, has probably received more diagnostic attention than any other environmental law.  That is not surprising, considering EPA has devoted more resources to the Superfund program than to any other program the agency administers.  Matters were not helped by the program’s rocky start, with allegations of impropriety swirling around the agency and the head of the Superfund program winding up in jail. Meanwhile, the liability regime designed to fund the Superfund program spawned an avalanche of litigation, resulting in crushing transaction costs.  Over the years, the Superfund program has been consistently controversial and has undergone a steady stream of “reforms,” reports to Congress and GAO studies. The statute itself has also been repeatedly criticized, including by the Supreme Court, for its lack of clarity.

As two recently released reports attest, the diagnostic process continues.  Both reports should be required reading for Superfund practitioners, but the question remains whether the underlying structural problems of the statute have been, or even can be addressed.

The first report is a paper commissioned by the American Council of Engineering Companies, entitled Superfund 2017, Cleanup Accomplishments and the Challenges Ahead.  The author, Katherine Probst, is a longtime, thoughtful commentator on Superfund matters and was a key member of the Resources for the Future team that issued a 2001 Report to Congress, entitled Superfund’s Future: What Will It Cost? A Report to Congress.  Her latest effort is largely a report card on the Superfund remedial program, lamenting the lack of sufficient information to conduct a thorough diagnosis. She makes a number of recommendations that the missing information be gathered, following which a new diagnosis would presumably be undertaken. In the meantime, the Probst report makes a number of interesting, but telling observations. For example, right from the start, EPA has struggled to measure the success of the cleanup program, but Probst points out that even though a significant percentage (24%) of non-federal sites have been deleted from the National Priorities List (NPL), and another 48% have been deemed “construction complete,” seven percent of sites on the NPL are still characterized as “human exposure not under control” and another 10% lack sufficient data to make a protectiveness determination.  Federal funding for Superfund continues to decline; states also face shrinking resources.  Not surprisingly, cleanup progress has slowed, not just for lack of funds, but also because the sites in the cleanup program today tend to be far more complex (and expensive) than the NPL sites of the past. EPA finds itself continuing to implement a prescriptive cleanup program that was not designed for many of the more complex sites on the 2017 NPL (e.g., mining and contaminated sediment sites).

The second document, entitled Superfund Task Force Recommendations, was issued by EPA in June, 2017. The Task Force was charged by the Administrator “to provide recommendations on an expedited timeframe on how the agency can restructure the cleanup process, realign incentives of all involved parties to promote expeditious remediation, reduce the burden on cooperating parties, incentivize parties to remediate sites, encourage private investment in cleanups and sites and promote the revitalization of properties across the country.”   These familiar themes led the Task Force to identify five basic goals, forty-two recommendations and various strategies for improving the Superfund program.  All the goals and recommendations are directed at speeding up the process of cleanup.  For example, one strategy advocates the use of “adaptive management” to expedite cleanup through use of early actions, interim records of decision and removal actions. Another advocates more centralized management of complex sites to assure consistency and aggressive oversight.

Even if all the recommendations contained in these two latest reports were to be accepted and implemented, the Superfund program would likely still be highly controversial with many of the challenges identified in the early days of the program still remaining to be solved.  Among those challenges are the following:

·         Is the National Contingency Plan (NCP) still the best “cookbook” for cleanup?  If not, what changes should be considered to achieve cleanup faster and better? Is the Superfund program too “process heavy?”  Is amendment of the NCP even politically feasible?

·         How can cleanups be accomplished with less study?  Particularly at complex mega-sites, NCP-compliant studies can take far too long.  Is the NCP process too prescriptive and too inflexible? 

·         How to measure success?  Should the key measurement be “construction complete,” or deletion from the NPL, or reduction of risk, or something else?  Should there be intermediate metrics of success?

·         Should there be greater centralized management of the Superfund program, as the report of the Superfund Task Force appears to advocate?  How should that be accomplished?  What is the appropriate role for CSTAG and NRRB?

·         How clean is clean?  Should the Superfund program chase every last molecule of hazardous substances, or reduce risk as quickly as possible?  Should there be greater use of the removal program?  As the saying goes, is “perfect the enemy of good?”

·         What should “cost effectiveness” mean in context of the Superfund program? Should proposed remedies be subjected to a cost-benefit analysis?

·         What is the proper role of EPA “guidance” in implementing the Superfund program?  Should guidance be binding on EPA?  Could that happen without notice and comment rulemaking?

·         Are the remedies implemented thus far in the Superfund program really effective?  For example, many groundwater cleanup programs were projected to have cleaned up contaminated groundwater by now.  Has that happened?  Can the pumps be turned off?

·         Should federal funds be used to leverage private party investment in cleanups?  Does EPA’s orphan share policy strike the right balance?

·         Does the statute strike the right balance between the federal and state interests in cleanup?  Should EPA and the states be true “partners”?

·         Should the lapsed Superfund tax be reinstated?  If so, in what form?

·         Finally, is there a role for fairness in Superfund?  Is the ban on pre-enforcement review too harsh a standard?

As this list of challenges demonstrates, Superfund will almost certainly remain a key subject for continued diagnosis in the future.