Another Nail In The Arranger Liability Coffin
If someone moves a hazardous substance from their property to a property owned by another and the substance is released into the soil or groundwater, that party can be liable for the resulting damages under a theory of arranger liability under CERCLA. The tough question is usually the level of proof necessary to show that the party caused such a transfer. In the recent case of DVL, Inc. v. General Electric Co., et al., the United States District Court for the Northern District of New York set a rational, but surprisingly high, bar for that proof.
Before setting out the facts, I should point out that the Court acknowledged that there is a relaxation of traditional causation principles under CERCLA:
[T]he party seeking costs need only show that there was a release or threatened release, which caused incurrence of response cost, and that the defendant generated hazardous waste at the cleanup site. What is not required is that the government (or another authorized party) show that a specific defendant’s waste caused incurrence of cleanup costs. CERCLA thus “relaxes” but does not eliminate the causation requirement: a plaintiff need not show a causal link between that particular waste and the response costs the plaintiff incurred, but it must demonstrate that a defendant deposited hazardous waste at the site in question.
While the Court was agreeable to allowing the use of circumstantial evidence to prove the relaxed causation standard, it found that such evidence did not exist in this case.
In DVL, Inc., the plaintiff owned property that was 150 feet “down-gradient” from a property owned and operated by General Electric for the production of capacitors and electrical components. It was undisputed that the GE site was contaminated with polychlorinated biphenyls (PCBs). Although GE never owned or operated any portion of the DVL site, the DVL site was found to be heavily contaminated with PCBs. (DVL had made no investigation of the site when it purchased the property for $500,000 in foreclosure in 2002).
Despite the fact that the DVL property was down-gradient from the GE site, two monitoring wells placed between the properties consistently tested non-detect for PCBs. As such, if the contamination was traveling to the DVL site from the GE site, it apparently was not doing so via the tested aquifer. As a result, there were only two remaining possibilities: the contaminant was being physically transported from the GE site and allowed to be released on the DVL site or the contaminant was moving next door via storm water runoff.
With regard to the physical transportation theory, the plaintiff could produce no evidence that anyone from GE had transported materials to the DVL site. Although there was some testimony that electrical transformers containing PCBs could have leaked on the DVL site, there was no showing that they were GE transformers.
Turning to the possibility of surface water transport, the testimony showed that such water did, in fact, flow from the GE property to the DVL site but there was no proof that the water contained any PCBs. The Court noted:
DVL has not presented an expert to opine that [the surface water had PCB contamination] and that this migration of surface water explains the contamination at the DVL site. In the absence of eyewitness testimony or other direct evidence, and without expert opinion linking GE to the contamination at the DVL site, the circumstantial evidence DVL cites does not provide the Court with a basis for denying GE’s Motion for Summary Judgment.
The case is an interesting read for causation in lateral migration cases because it is a situation that so often arises. The question in these cases is always: How did the contamination get from there to here? For the plaintiff, the clean wells between the properties presented an almost insurmountable problem because if the contamination was not traveling underground, how else could it have been conveyed from the upstream property? The Court’s answer was likely the correct one; that is, either someone must have seen the release of the hazardous substance from a GE activity (either the delivery of the hazardous waste onto the property or the sale of a GE transformer that was seen leaking) or expert testimony would need to be used to fill the gap regarding the unknown delivery. For example, if storm water transported the contamination from the GE site to the DVL site, testing might establish that the contamination was confined to the surface runoff paths and the contamination was greatest on the surface and at the property border and decreased away from property border and at depth. While expert testimony is never cheap, the plaintiff was seeking the recovery of cleanup costs that were in excess of $1 million dollars. (I should note that it is possible that this analysis was done and an expert could not support the theory, though the opinion does not give that impression).
While the Court gave lip service to the prior case law that there is a “relaxed standard” for arranger liability under CERCLA, it certainly did not give the plaintiff in this case much benefit of the doubt, even though the Court was simply considering a motion for summary judgment. The Court made it clear that for arranger liability, you must show how the defendant’s hazardous material got from there to here -- and for this showing, close is not good enough.
RELATED POSTS: R.I.P. Superfund Arranger Liability: 1980-2010
