A group of private landowners ended of 2017 with a Montana Supreme Court ruling, in Atlantic Richfield Company v. Montana Second Judicial District Court, that they could proceed with their state law claims for restoration damages against the owner of a site contaminated by a former copper smelter. No. 16-0555, 2017 WL 6629410 (Mont. December 29, 2017). In a split decision, the Court found that the landowners’ claims for restoration damages were not preempted by the federal Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) because the claims did not constitute a challenge to the U.S. Environmental Protection Agency’s established cleanup plan for the Site.

The case involves an area contaminated by the Anaconda Smelter, now owned by the Atlantic Richfield Company (“ARCO”), which was designated as a Superfund site by EPA in 1983. EPA selected a cleanup plan for the Site in 1998 that detailed ARCO’s cleanup responsibilities, including the remediation of residential yards and drinking water wells that exhibited elevated levels of arsenic. A group of 98 landowners who owned property within the designated Site hired experts to determine what actions would be necessary to fully restore their properties to pre-contamination levels. The experts recommended that the landowners remove the top two feet of soil from their properties and install permeable walls to remove arsenic from the groundwater. These remedies are in excess of what EPA required of ARCO in the cleanup plan for the Site.

In their private action, the landowners alleged common law trespass, nuisance, and strict liability against ARCO. They claimed various types of damages, including loss of the enjoyment and value of real property, and expenses and costs of investigation and restoration of their properties. In a motion for summary judgment, ARCO conceded that the landowners could move forward with their claims for all damages except the restoration damages, which ARCO argued constituted an impermissible challenge to EPA’s cleanup plan for the Site. Specifically, ARCO argued that those claims violated Section 113(h) of CERCLA, known as the “timing of review” provision, which prohibits federal courts from hearing challenges to EPA’s selected remedy for a site.

The Court agreed to hear argument on the issue after the District Court denied ARCO’s summary judgment motion with respect to the landowner’s claim for restoration damages. The majority opinion, written by Judge James Jeremiah Shea, first cited to the Court’s prior decision in Sunburst School Dist. No. 2 v. Texaco, Inc., in which it held that common law claims for restoration damages in that case were not preempted by a Montana state statute similar in purpose and scope to CERCLA. 165 P.3d 1079 (Mont., 2007). The Sunburst decision also articulated the principle that a presumption exists against a statutory preemption of common law claims. For such preemption to exist, the instant Court noted, a statute would need to expressly or by “necessary implication” assert preemption over state law claims. The Court noted that CERCLA did not assert any preemption over state claims. Rather, the timing provision in Section 113(h) cited by ARCO only prohibited federal courts – not state courts – from hearing challenges to EPA’s selected remedy. Further, the Court found, CERCLA specifically provides that it does not affect State laws nor prohibit States from imposing “additional liability or requirements” with respect to hazardous substances.

The Court then determined, irrespective of the above jurisdictional issue, that the landowners’ restoration claims did not constitute “challenges” to EPA’s cleanup plan pursuant to Section 113(h). Synthesizing case law from the Ninth Circuit as well as district courts from other jurisdictions, the Court held that such challenges must “actively interfere with EPA’s work” so that the requested relief would “stop, delay, or change the work EPA is doing.” At a minimum, the Court found, a “challenge” must be more than merely requiring a defendant to spend more money to clean up land for the plaintiff landowner’s benefit. The Court reasoned that the landowners’ restoration claims in the instant case only sought damages to remediate their properties to a greater degree than what EPA required in its cleanup plan. “Put simply,” the Court said, the landowners were not asking the Court to interfere with EPA’s remedial action.

After holding that the restoration claims did not impermissibly challenge EPA’s cleanup plan in violation of Section 113(h), the Court quickly disposed of ARCO’s alternative argument that CERCLA preempted the landowners’ claims because the landowners were also liable parties for contamination at the Site. ARCO asserted that because the plaintiffs owned property within the EPA-designated Site, they were liable parties pursuant to CERCLA (known as “potentially responsible parties” or “PRPs”) and therefore could not take remedial actions inconsistent with EPA’s cleanup plan. The Court found that while the landowners’ property ownership within the Site could have made them PRPs, EPA never alleged or treated the landowners as PRPs and that the six-year statute of limitation applying to such liability had long passed.

The majority’s finding that CERCLA did not preempt the landowners’ state law restoration claims did not sit easily with two of the other justices. Judge Beth Baker wrote a concurring opinion in which she agreed with the majority’s decision but noted that she understood the holding to be a “narrow one.” Her opinion stressed that CERCLA can still preempt state law claims when actual conflict arises between a landowner’s state law claim and EPA’s selected remedy. In the instant case, she wrote, the landowners’ counsel argued at hearing that in the nine years of litigation, no evidence had ever been presented that the landowners’ claims actually conflicted with EPA’s selected remedy. Thus, there was no preemption under this specific set of facts..

Finally, Judge Laurie McKinnon argued in her dissent that the landowners’ restoration claims were preempted by CERCLA because they did, in fact, impermissibly challenge EPA’s cleanup plan. The opinion reasoned that the Ninth Circuit provides “clear guidance” that a claim constitutes a challenge to EPA’s selected remedy when it is “related to the goals of [EPA’s] cleanup.” Judge McKinnon argued that the landowners’ proposed restoration plan, which advocates for lower applicable arsenic levels and a deeper soil excavation, is both related and “plainly contrary” to EPA’s cleanup plan. Thus, their claims should have been preempted.

The Court’s ruling in this case is a case-specific interpretation of when state law claims for restoration damages do not constitute a “challenge” to EPA’s selected remedy pursuant to Section 113(h), and as it arises under state law, is not binding precedent outside of Montana. However, it is notable for its proposition, in an unsettled body of case law, that in certain circumstances private litigants may recover damages to restore their property above and beyond what EPA otherwise requires pursuant to its selected remedy for a Superfund site.