Supreme Court justices decide on Tuesday whether to take a case with repercussions for whether and how all future contaminated environmental sites are cleaned up. The justices in the spring deferred their decision on granting certiorari, asking the government’s opinion of Georgia-Pacific Consumer Products v. International Paper Company.
Yet, in a move reminiscent of the Queen of Hearts’s backward “sentence first, verdict afterward” decree, Solicitor General Elizabeth Prelogar replied that, while petitioner Georgia-Pacific was indeed the victim of an erroneous decision by the 6th U.S. Circuit Court of Appeals, the Supreme Court should not take the case because it’s somehow not the best vehicle for addressing the issues at bar.
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The broader question is how liability for cleaning up contaminated environmental sites actually functions or should function.
The Comprehensive Environmental Response, Compensation, and Liability Act was enacted in 1980. It is commonly called the Superfund law, and money collected under it from chemical and other companies is held in a supersized account for cleanups involving large hazardous waste sites when no responsible party can be found or is still in business.
Ideally, when a contaminated site is discovered, companies responsible for it will step forward, take responsibility, and begin remediation. In fact, the Superfund law contains provisions designed to encourage such behavior.
Any company that voluntarily pays to clean up a site, instead of being compelled to do so by a legal judgment or settlement, can then seek recovery of costs from other parties, according to their respective shares of overall responsibility.
Sound public policy should therefore encourage companies to step forward, begin the cleanup process, and later recoup costs they have incurred beyond their fair share. It also makes sense that government find ways to save Superfund (and taxpayer) money for situations where responsible parties cannot be located or no longer exist.
In Georgia-Pacific v. International Paper, if the Supreme Court fails to grant certiorari, the incentives will be turned upside down, and the government will likely end up paying large sums from the Superfund, now and in the future.
The more immediate question is, at what point does the statute of limitations begin to run in what are often decadeslong actions over responsibility?
In this case, the contamination affects 80 miles of Michigan’s Kalamazoo River, 3 miles of Portage Creek, and adjacent waters. It was designated a Superfund site in 1990 due to PCBs (polychlorinated biphenyls) that were discharged into waterways from paper recycling operations from the mid-1950s to 1971.
Petitioner Georgia-Pacific acquired one of the paper mills after the pollution occurred. It voluntarily committed early on to help clean up the river bottoms, even though overall responsibilities had not been definitively established.
That’s exactly the kind of corporate behavior we should want to encourage.
According to court documents, Georgia-Pacific has spent more than $100 million over the years removing the contaminants. But the work isn’t done, meaning the company could be compelled to spend millions more, even though later investigations determined that other companies were also responsible for the pollution and partially liable for the costs.
A lower court found that Georgia-Pacific was actually responsible for only 40% of the contamination (and cleanup costs). Three other companies also shared the blame.
But because two appeals courts disagreed about when the statute of limitations begins to run, the company risks being punished for its good deeds and saddled with the entire cleanup bill.
Georgia-Pacific persuasively argues that the 6th Circuit erred in holding that the three-year Superfund statute of limitations for recovering costs begins running the moment a court makes a bare-bones declaratory judgment that a defendant is liable, even though actual damages or cleanup costs cannot yet be determined or assessed against all responsible parties.
Instead, Georgia-Pacific says, the short time frame should be triggered only when a court renders a judgment against a liable party for recovery of specific costs or damages. That was the 1st Circuit’s determination, which even the solicitor general agrees is correct.
If the 6th Circuit’s ruling is allowed to stand, it will disincentivize corporations from taking responsibility for cleaning up future contamination unless forced to do so by court verdicts because doing the right thing could saddle a company with full removal and remediation costs.
The scope and extent of environmental contamination are often not understood until after years of investigation, analysis, and contentious litigation. Determining all the contributing factors and parties certainly requires more than three years.
The 6th Circuit ruling creates a much more litigious environment for other Superfund events, such as the Norfolk Southern train derailment in Ohio this February. Yearslong cleanup delays are the last thing impacted communities need.
The Supreme Court should accept the case. Any other decision will likely delay future cleanups and incentivize corporate shirking of responsibility.
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Paul Driessen is senior policy adviser for the Committee For A Constructive Tomorrow. He received his J.D. from the University of Denver College of Law.