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  • CERCLA at 40: The Monster That Often Eats the Village

    Congress enacted the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known also as Superfund, in 1980 to address the horror of sites like Love Canal where discarded toxic chemicals began oozing into neighboring backyards and basements, contaminating air, soil and water, and endangering human health and the environment. Many people were sickened and hundreds of homes that were found to be uninhabitable were bulldozed as a part of the cleanup. Since its enactment, CERCLA has become the predominant site remediation vehicle and its reach has expanded far beyond the typical landfill sites to include factories, waterways, mining sites and recreational areas. Moreover, CERCLA’s impacts extend beyond contaminated sites into many aspects of commerce. In this episode of Digging Into Land Use Law, Nossaman Environment & Land Use partners Leslie Nellermoe and Reed Neuman discuss some places to look for the CERCLA monster and offer possible strategies to harness the beast.


    CERCLA at 40: The Monster That Often Eats the Village

    0:00:00.1 Leslie Nellermoe: In 1980, Congress enacted CERCLA, the Comprehensive Environmental Response Compensation and Liability Act, also known as Superfund, to address the threats posed by contaminated sites like Love Canal. Since its enactment, CERCLA has become the predominant site remediation vehicle and its reach has expanded far beyond the typical landfill sites to include factories, waterways, mining sites and recreational areas. CERCLA's impacts now affect many aspects of commerce. Today we'll talk about some places to look for the CERCLA monster and offer possible strategies to harness the beast.

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    0:00:38.3 Speaker 2: Welcome to Digging Into Land Use Law, Nossaman's podcast covering the development of all things in, on, or above the ground.

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    0:00:54.6 LN: Thank you, joining us for this episode of Digging Into Land Use Law. I'm Leslie Nellermoe, a partner in the environment and land use group at Nossaman. I have practiced for a number of years with my focus on contaminated sites, all aspects, clean-ups, sales, mergers, and sometimes even permitting. I'm joined today by Reed Neuman, who's also a partner in the environment and land use practice at Nossaman. He has practiced environmental law and litigation for over four decades. He represents major manufacturers and other private entities around the country. So, let's start, Reed with a brief discussion about what CERCLA is and why it came into being, so then we can talk about what it's changed, how it's changed, and its importance in today's legal and commercial world.

    0:01:40.3 Reed Neuman: Very good. Hi, Leslie.

    0:01:43.6 LN: Good morning. So, Reed, why did Congress pass CERCLA?

    0:01:45.1 RN: Well, I think, Leslie, I hope, anyway, most of our listeners are familiar with the origin story of CERCLA that in 1980, after Congress had already put into place several of the, what we consider to be the bedrock of environmental laws, pollution control and protection laws, the Clean Air Act, Clean Water Act, Safe Drinking Water Act, and a little later the Ripper Statute, there still remained a sense that impacts from historic waste disposal needed to be addressed a little more effectively and more quickly. Although there were various statues already on the books, including things that long forgotten like the Rivers and Harbors Act and Ripper, of all those statutes were available, they still depended upon a fairly cumbersome process of the government showing that our threat existed, that it needed to be dealt with, and by and large then persuading a court to fix the liability to parties and persuade the court to impose a remedy through injunctive relief.

    0:02:37.7 RN: As you can imagine, those cases too often move fairly slowly through the court and not getting action out into the field as promptly as the public wanted it to be, again, needing to prove up to threat that our health and human environment, there's need to affix the liability and then to convince the court what the appropriate relief is to impose through injunctive relief. The bad optics of the Love Canal situation and others were continuing to bring pressure on the federal government.

    0:03:07.5 RN: So after a few years of thinking about how to do it, Congress in 1980, devise what we know now to be the response action and reimbursement scheme under CERCLA, that largely has shifted the focus to work in the first instances accelerating response actions and putting up front the site investigation and response action process, and keeping the focus away in the first instance from going to court to get these cases started, although CERCLA does have its own immanent hazard and injunctive relief provision like Ripper does, which is essentially a statutory nuisance provision, it's really used and the response action and reimbursement approach has become the norm, as I said, this was intended by Congress to fill in perceived gaps to what the Federal toolbox was at the time, and over the years, it has become indeed the predominant vehicle to address the impacts from legacy contamination.

    0:04:03.9 LN: What did the clean-ups look like in those early days? What kinds of sites are we talking about and who was in charge?

    0:04:08.9 RN: Well, again, driven by the optics represented by situations like Love Canal, where there were just ghastly impacts on neighbors and residents and things that are sort of obvious to anyone, deteriorating facilities, stacked drum sitting idle on the back dock at a factory, or frankly, fires, explosions and catastrophic events leading to the release of hazardous substances, there were a number of problem children sites that were already on the radar of US EPA, and as to which US EPA and the state agencies had a fair amount of information through its regulatory apparatus to understand what the threats were at these particular sites, these handful of bad actor sites were the first ones that EPA moved to put on the national priorities list of sites needing to be attended to, and again, most of these were already in the system by way of information generated in the regulatory process.

    0:05:10.0 LN: EPA was in charge at that point.

    0:05:12.3 RN: EPA was really the only game in town at that point. You had willing and to some extent able state agencies that were part of the process, but for the most part, US EPA was the agency that was obviously directed by Congress in CERCLA to get started on collecting information, putting together the national priorities list and organizing the response action program as it did, it had through the provisions, the enactment of the appropriations under CERCLA, it had a significant war chest assigned to it for money to conduct site investigations and response actions. There was an awful lot of partnering that the federal government did and continues to do with state agencies to work together on data collection, site investigation, PRP identification efforts, but for the most part, EPA was the lead dog and it still remains so on many of the bigger sites.

    0:06:08.9 LN: When you say PRP, what do you mean?

    0:06:11.8 RN: PRP is a potentially responsible party, it's a term in the vernacular that's come to be sort of inclusive of all the parties whose status is laid out in the statute of parties that can be liable under CERCLA for having either arranged, transported or somehow been involved in the ownership of facility as that term is defined, where a release defined, of a hazardous substance defined, occurs that necessitates a response action and cost. So PRPs are just obviously what we talk about as that universe of responsible entities that are potentially liable parties under the defined terms in CERCLA.

    0:06:49.8 LN: EPA had this big list, they had a big pot of money. Did they get them all cleaned up?

    0:06:55.6 RN: No, obviously, after the law was passed, it was going to take some time to shake out the reach, the impact and frankly the effect of some of the fairly startling provisions in the statute, right away there was litigation up and down the wall with challenges to the standard of liability set forth in the statute, defenses, if any, to liability, things like that. So the early cases, one by one, tackle a lot of these issues that were either unclear or not codified at all in the statute, but the extensive legislative history suggests that they meant to be dealt with, and over time, the case law emerged fairly clearly that liability under the statute is strict, it's joint and several, and very importantly, it's retroactive in its application, reaching back to activities that occurred long, long ago, if indeed there still today are impacts or threats from contaminated materials released or disposed many, many years ago way before the enactment with statute, they still can be addressed through the statute. The important thing, of course, that carries throughout the legal regime is that liability under the statute is without regard to fault, defenses are very, very limited. And for the most part, that case law has confirmed that when looking at potential liability under the statute, we're not talking about what historically are well-understood common law concepts of fault, whether the conduct was intentional or negligent or anything in between.

    0:08:28.2 RN: We're mostly focusing on the status of the entity as through potentially a responsible party rather than conduct, did you own the facility? Did you generate the waste, did you transport it or give it to somebody to be transported for disposal, or did you send it down the sewer or did you let it migrate away from your property without regard to fault, those are the types of entities that are covered as responsible parties.

    0:08:54.2 LN: Has a lot of change over the last 40 years?

    0:08:58.1 RN: It's changed a lot and, in some respects, it's changed very little. In the latter, it's relatively unchanged in terms of the basics of the liability scheme that I just described and how response actions are conducted the National contingency plan is essentially unchanged in 40 plus years since the statute was enacted. It lays out how one goes about conducting a site investigation and selecting a response action or remedy or removal action, but a lot of litigation has occurred over the years, as I mentioned, about the availability and the nature of any defenses to liability whether harms at a complex site can in some ways be divisible or divide it for terms of liability that my stuff's over here to the one side, but it's not over there, Should I be liable for only that one side or should I be liable for both sides. Those types of questions have been dealt with and are still being done, to a large extent, in the courts. All of which is mostly an attempt to pare back and minimize the sometimes-harsh impacts of the application of joint and several liability. More recently the litigation, it's still going on today with some frequency is focused on what parties may be entitled to bring claims under what circumstances, whether they have to be sued by the government, entitled to bring a claim or can they be a volunteer to conduct a response action.

    0:10:17.3 RN: For how long do those claims accrue before they have to be acted upon lest they be barred by applicable eliminations periods, and frankly, what protections that parties can get when they settle claim in whole or in part from potential claims from other parties. Those are the types of things that litigation these days, is mostly focused on.

    0:10:36.5 LN: If I had a banner at the beginning of this period 40 years ago that said, "It's not fair, it doesn't make sense, just write a check." I could still use that today, couldn't I?

    0:10:47.1 RN: That's basically the deal, of course, fairly quickly and conclusively got rid of the notion that fairness was a defense to just about anything. Most entities now that have had any experience, good, better or indifferent, with statute and the legal principles understand that fairness is not what it's about whether I did or didn't do the right thing, whether I was negligent in doing that or whether I did what I did, because the state agency told me that that was the best place to dispose of my stuff 40 years ago. That doesn't matter. So basically, yes, the inquiry now has shifted away from whether it's fair, whether I was smart, dumb, good or bad, and now it's just, do I fall into one of the categories, and what do we do about it?

    0:11:29.3 LN: So how do sites look now? You said that the easy ones were identified early on and some of them were addressed, what do they look like now?

    0:11:36.1 RN: I guess I should say that it's not so much the easy sites, but it was the notorious and obvious sites, and that was the Acme landfill down the road with the fence around it that everybody knows not to enter because it looks like Chernobyl, then obviously the abandoned site with drums piled up, those types of things were the ones that were obvious and most needing of immediate attention, increasingly now we're finding that Superfund type liabilities arise it in more nuanced and less obvious situations, whether it be under a concrete floor of a factory that for years has been operating cleanly and efficiently, but then when the redevelopment comes along and you dig in, you find, "Oh my gosh, there's tanks that were not emptied underneath 20 feet down, and by the way they're leaking." Those types of situations give rise to response actions and potentially CERCLA claims nobody really understood or intended. It's not just the places where a disposal occurred and was obvious, it's more likely nowadays to be these unknown problems, these places where hazardous substances have come to be located, whether washed downstream from a mining site or whether from an outfall of a sewer that then has sort of loaded the bottom of a river bed with a layer of contaminants that indeed is a facility that can be addressed through the CERCLA program.

    0:13:00.7 RN: And again, it's not just the stuff where somebody intentionally and knowingly took something to be dumped, it's where hazardous substances have come to be located, so increasingly are some very surprising locations that are themselves now, Superfund facilities.

    0:13:13.7 LN: Is EPA still running the show?

    0:13:15.2 RN: EPA is still in charge of setting the ground rules, obviously setting the principles in place, an awful lot of what EPA, years ago, decided was the best approach to settling cases with PRPs and what consent agreements need to look like. An awful lot of the practices, whether you want to call them best practices or not, practices adopted by US EPA, and it's always friendly counterpart, the Department of Justice, do indeed permeate and have been adopted largely by a lot of the state and other actors, who themselves either want to compel clean-ups or conduct clean-ups and want others to pay for them, but we have a whole lot of other actors, for sure. EPA is no longer the only sheriff in town, fair number or if not the majority of states have by and large, enacted baby Superfund statutes that mimic the liability scheme, perhaps have even a broader reach because unlike CERCLA, they can reach out to touch petroleum related waste in a way that CERCLA carved out years ago. Tribal groups and regional governments and a whole bunch of other actors now are basically finding themselves at the forefront of initiating response actions, and as we'll talk about in a few minutes, an awful lot of activity that ends up in a CERCLA claim arises not from government compulsion or government health protection initiatives, but from private party transactions and dealing with your neighbors.

    0:14:44.8 LN: I've also observed that the roles of state and federal government have changed in that not only are they the enforcers, but sometimes they are also the liable parties, and I think that's a big change, do you not?

    0:15:00.5 RN: It is a big change, I suppose it was a matter of time before it came to be realized that the state and federal governments operate in communities, they have fairly large institutional activities that themselves are pollution causing. They need to use solvents at air force bases, they need to use all sorts of chemical materials at military and hospital facilities and VAs, obviously the awful lot of waste associated with nuclear materials processes end up in landfills or at least used to, and so yes, the state and federal governments themselves, increasingly because of their business like operations in a lot of locations, themselves end up being PRPs and end up being involved in Superfund site liability determinations and allocations.

    0:15:50.4 LN: Let's move away from the government actors and talk, as you mentioned we would, about private parties and real estate transactions and how CERCLA comes into play there.

    0:16:01.3 RN: Yeah, well, increasingly I think folks that are in business, have ownership of properties or have sold assets or real estate, understand that impacted properties and the vestiges of those operations or industrial activities have left behind types of conditions that themselves usually manifest in claims to clean them up and if that's the case, then that can be a CERCLA and the state analogs going to be a primary consideration in whether and on what terms to sell, or acquire, or redevelop and refinance property. Increasingly, folks have come to understand that assessing whether there's ongoing or potential response actions at a piece of property, or that there's activities nearby where the plume that's heading your way and that in 10 years may be on your property and that you either need to do something to protect perhaps your water supply, or you need to do something to protect the value of a property, all sorts of things need to be assessed at the beginning that at their end point could end up being involved in a CERCLA response action and claim. The need is there to be understanding whether there's outstanding orders, directives, permits or consent agreements with the government or private parties that either describe or may implicate response action obligations down the road.

    0:17:25.0 LN: There also are some initiatives under CERCLA, both state and federal to redevelop contaminated site. How does that come into play here?

    0:17:33.9 RN: Well, it comes into play in a lot of ways, but basically, you find now that properties that likely were with good reason deemed to be unusable or likely not to be re-used for any purpose beyond the fairly dirty purpose that they had been subjected to in years past can, through the federal programs to incentivize and encourage redevelopment of what we call brownfields brings back into play a lot of properties that for years, companies may well thought of Well, we're done with the clean up that needed to be done, measured by the standards at the time or measured by the community expectations at the time, and that that site won't be a problem later on. Well, now, if it indeed that factor is to be reconverted into some sort of other public use or that area of property that was impacted by surface mining or whatever wants to become a golf course. Well, you all of a sudden have the need to be looking at the potential for response actions and costs on properties that for years were just deemed to be sort of in the rearview mirror.

    0:18:37.0 LN: If you are a buyer and are doing this investigation that you mentioned of neighbors and so on. Is it just immediate neighbors? Is it current neighbors? Can you go further back in time?

    0:18:47.7 RN: No, I guess the beauty and the curse of CERCLA is if there is a problem, if there is gum stuck to the bottom of your shoe in terms of a sub-surface area at the property that is contaminated or a tank that needs to yanked, or if there is a set of pipes that were filled at one time and are contaminated, the recourse is not just with the immediate seller that you're in privity with as you would be in contract law, and not necessarily the guy that occupies the property next door, that...

    0:19:14.3 RN: 15 years prior to that guy's ownership of that property, sent onto your property through the ground water, a plume of contaminated material, all of those things are in play if to the extent that there are available parties to go after, whether they're obviously still in existence and amenable to suit, but you have to be thinking about recourse against all of these types of parties right up front, and it's important to look at the history of the property that you're talking about, the history of some immediate adjacent neighboring properties in terms of what industrial activities may have occurred and as a result, whether impactful activities have taken place at those properties and assess what was left behind and un-remediated or at least left in the air to be determined as to whether there is a problem that may manifest itself in years to come that...

    0:20:08.2 RN: If you become the owner of the property, and if you're the owner of the property at the time of any release, well, then you fall into that category of liable parties, and you may be asked in the first instance to do something about it, and the challenge will be to try to find out who others are that need to be brought in that should be doing something about it.

    0:20:27.3 LN: And how do you bolster your case against those others?

    0:20:30.1 RN: Well, what it means is that in addition to thinking about understanding the problem and going through the normal due diligence steps to ascertain what the problem might be and how bad it might be and figure out how to negotiate for it if indeed there is to be a set of environmental obligations that you are going to either take on as the buyer or be left with if an unsuccessful seller, as soon as you're getting wind of the existence or potential existence of a problem, that party really needs to start thinking like a plaintiff to pull together the requisite information to understand what the problem is if appropriate to do something about it, and to do something about it in a way that you're thinking about being a potential plaintiff to be able to assert a claim and successfully transfer some of that liability, if appropriate, to other parties and that that means that just instead of just looking at record evidence to understand the problem, it may be more proactive steps in the way of sampling exercises and other things may need to be started fairly early on to get your arms around the problem in a way that if it comes time to assert a claim, and stick some of that liability on somebody else, you've begun the process of perfecting that claim right from the get-go.

    0:21:45.9 LN: Are there rules that you have to follow to make sure your claim is ready to go, if that's where you have to end up?

    0:21:51.6 RN: Yeah, pretty much whether you're dealing with the federal government, obviously, or if it's a state lead site, or if indeed you are a private property owner that's looking to protect yourself and maximize the value of your property because you don't want to get stuck with liability that really should be somebody else's problem. The NCP, the federal regulations enacted under CERCLA, like I said, lay out and have for years laid out how to go about conducting a response action, and by and large, those are applicable to just about any response action that one could conduct. If you follow those rules and not necessarily with respect to all the things in terms of holding public meetings and what not. But if you basically follow those rules and other things that have sprung up around them as best practices under the various scientific and engineering standards to conduct, you will probably assure that you have at least a prima facie, a threshold case of establishing liability on the part of somebody else, if in deed there is a somebody else to whom you can connect by nexus information for the liability.

    0:22:56.7 LN: How about timing, you have to be worried about when you start this?

    0:23:00.7 RN: As I mentioned, you absolutely do, because when there is a credible suggestion that there is a threat, there is a release that needs to be acted upon besides reporting that to the responsible agencies, it may be that the private party is in the first instance, the one that has to deal with it, and indeed the clock will start running. It's not unlike discovery rules in common law practice, once appraised of the problem, you have some limited amount of time to do something. Now, if you have an agreement with the government for the conduct of a response action CERCLA will then kick you into certain time parameters based upon whether your activity is a removal or a remedial action, there are separate statutes of limitation that pertain to your ability to bring federal causes of action for recovering those costs, but by and large, to answer your question, yes, absent an agreement with the potentially responsible parties on the other side to toll the running of any applicable statutes of limitation. Yeah, you're on the clock. Once you find that there's a problem that needs to be dealt with.

    0:24:02.8 LN: Once you have this information, are there reporting obligations beyond those to the environmental agencies that you should be aware of?

    0:24:10.7 RN: Yeah, putting aside potential claims, whether you are or not in the mindset or in a position to do something about it, in terms of shifting through legal means, those liability costs to other parties, the fact that the gum is stuck to your shoe and there is a known or potentially large environmental liability associated with your business or your real estate or both, there certainly are situations where the magnitude of those potential liabilities becomes so great that if you're a public company, they have to be accounted for in your financial records, and if one or more of these liabilities under CERCLA are known and reasonably estimable and they are sufficiently material to require acknowledgement in your public reporting, companies do have to go through the exercise, setting aside reserves that are adequate to cover those liabilities until they're either resolved and taken off the books, or they go away through divestiture or other means to shift those problems to somebody else, so if a known problem, which is fairly easy to determine if there is a potential of a liability because you've either received a letter from the government, you've signed on to an agreement that says, Hey, that's your problem, or some other way that you have some reasonable way of knowing that if it's a problem, it's yours, the tougher problem then is to figure out whether the cost of that potential liability later to be determined that's this big...

    0:25:42.6 RN: A clean up and your percentage of that clean-up is x, those future parameters are difficult to estimate, and only if they're estimable do companies need to put them onto their books, but if they're estimable within a range, and the range is from a reasonable best case to a reasonable worst case potential outcome, you typically almost always have to book at the high end of that range to keep your nose clean with the accounting rules.

    0:26:14.8 LN: You talked a little bit about risk shifting as you were talking about how you set the deals up, and so on it seems to me that that's a pretty big deal, so are there other risk-shifting processes or procedures or issues that you'd like to bring to the real estate transaction discussion?

    0:26:31.3 RN: Yeah, I think in fairness, we talked only mostly about the ability through legal means to shift costs to other parties at arm’s length, more typically, or perhaps most typically, companies find themselves sharing those risks by agreement in real estate transactions, they find some way to identify, quantify and then allocate the risk of either a known problem, there is a consent agreement to finish over the next 10 years, completion of a ground water pump and treat system, you're going to take that on, you're going to pay either all of the costs, or I'm going to split the cost with you up to a certain amount or whatever. Those are known liabilities, and it's fairly easy to allocate in the transaction document the risks of those future costs. What's more difficult obviously, if it's a contingent or an unknown inestimable future liability, you have to figure out but the challenge is for how long to share that risk with the buyer and seller, depending on what position you're in, what things would trigger either the ability to access insurance or escrowed funds that have been put aside to deal with that contingent liability or to tear up the agreement entirely and to go back into court to litigate who should pay and how much...

    0:27:48.8 RN: All of those things can be addressed with difficulty, but can be addressed, that should be addressed in the environmental portion of the transaction documents.

    0:28:00.3 LN: Just one last thing on this general concept, is it not also true that these issues come up when you're selling your company or merging with another company and not just on specific real estate transactions?

    0:28:12.0 RN: For the most part, these liabilities arise in conjunction with a physical piece of ground somewhere where hazardous substances have come to be located, but the liabilities run with the assets of the entity, and indeed this is something that needs to be looked at with respect to purchasing an entity outright. Even if the real estate that the company operated on in big town USA long ago has been divested and turned into the new local library, the liability associated with the activities of that entity years ago need to be accounted for in the transaction document because indeed... Again, the liability is not just because you own the property, but if you fall into the category of someone whose status connects to the historic release of the hazardous substances.

    0:29:01.0 LN: I think we should move to another arena for allocation, which is outside of the transaction arena, and in the paying for the response costs, paying for the remedy cost arena. I think it makes sense for us to move to that now.

    0:29:17.0 RN: I do too. I was going to say in that regard, that although we've talked a little bit about voluntary efforts to shift responsibilities through transaction documents, the types of cases where you don't have a transaction, but you have a dispute, you have an assertion that one or more entities is involved at a super fun site, giving rise to CERCLA claims, whether held by the state, whether held by US EPA, or held by a tribe or held by a private party, invariably parties have been less than satisfied with recourse to the courts to resolve these disputes, and increasingly are availing themselves of the services of private industry, of very capable professionals that mediate and allocate these types of cost, multi-party sites, hundreds of parties, very greatly complicated fact patterns, and I think Leslie you have a lot of experience with that. Recently, some of it painful, but if you don't mind talking about it, I think that's where we should shift.

    0:30:15.8 LN: Okay, I do have some experience with that in a particular site at which I've been working for many years, because all of these cases take forever and ever to resolve, it is the Portland Harbor site, and there are some hundred parties participating in an allocation process, these parties are all potentially responsible parties or PRPs at a site that includes about 12 miles of the Willamette River in the vicinity of Portland, Oregon. A number of years ago, like 13, EPA suggested to the group of PRPs that an allocation process might be useful because they did not anticipate that litigation would be the way to resolve how the costs of the remedy would be shared. So we embarked upon that. We did hire as a group two very, very successful mediators who have worked in both complex river systems and other sites for many years and bring a wealth of experience and expertise to the site in a way that you are unlikely to find when you initiate litigation because there are few jurists. Certainly, you can't predict that there would be one in every jurisdiction who really understand these matters and are willing to put in the time and effort it takes to sort through all the facts, even with the help of magistrates and the like...

    0:31:35.5 LN: We started this process, we are trying to avoid litigation so far that's been only marginally successful because there is an action pending which is told to bring other parties into the mediation allocation process, but in general, the effort has been focused in this allocation process.

    0:31:53.5 RN: How have you noticed parties reacting to, if you will, or accepting being part of a process where you're consciously avoiding the courts, you're avoiding going to see a judge, maybe a magistrate, maybe a magistrate that's got some experience with these types of things. You're not even dealing in ADR with a former judge, you are dealing with folks who are in the profession for the express purpose of helping to resolve these very complicated types of sites, have you found that for the most part, parties go into it with a level of acceptance and an expectation that they're going to get treated fairly and get a decent... Or at least an explainable outcome.

    0:32:34.0 LN: Absolutely. In this instance, we have someone whose background is in economics, but who has done a lot of allocations, and we have an experienced Superfund lawyer as our allocation team. My observation, having looked at parties big and small approaching this, is that overall, people think that they are being treated fairly.

    0:32:53.0 LN: People are confident that the legal issues that they raise will be decided correctly, and that ultimately the allocation that comes out of this very long process will be appropriate and fair. This process is specifically set up to result in a preliminary allocation report followed by mediation, which gives the parties another chance to say, “Well, we don't agree with this piece, we don't think this is quite fair. Could you look at this again?” There are several ways in which people get to have their voices heard, and I think that makes a big difference in their attitudes toward the process.

    0:33:27.5 RN: Is it your experience, Leslie, that these types of situations allow parties to sort of bring their best to the table, put all of their facts on the table, is it the case that the level of sophistication and expertise that you're dealing with in terms of the professional allocator allows you to explain yourself, perhaps in a way that you wouldn't be able to do in court then if the outcome is what the outcome is, at least you haven't had to pull any punches and cut any corners.

    0:33:53.5 LN: Absolutely, I think that all of the practitioners, whether they are the scientists, the consultants or the lawyers in this allocation, are in fact bringing their A-game and they are doing that because they know it'll be heard, they know it'll be understood. And in some cases, they've been directed to answer specific questions or provide specific information, so I think that's a huge part of the reason that this is likely to be successful. The other thing that I think is really helpful is that this is an alternative dispute resolution process, it is covered by mediation confidentiality, and that does allow people to respond to inquiries and to provide information that they might not readily provide in the litigation setting. As a result, I think we have a better record. I think people better understand what their neighbors and historical residents of their property have done, and I think that just makes for a better process.

    0:34:48.5 RN: Do you find that as a result of the thoroughness of the presentations that you're able to make in these proceedings, and again, the fact that the folks to whom you are presenting these things that may actually speak the language and know what you're talking about, does that mean that the ultimate acceptance by your client, or folks on the other side who perhaps have been at some point reluctant to accept the reality or the likely outcome, does it mean to you that there's a higher level of acceptance of the outcome, if you go through this kind of sophisticated process.

    0:35:20.5 LN: I think it absolutely means that. Our mutual client in this case has never been designated PRP, but for factual reasons, they believe that they will get a far better shake out of this allocation process than they would in litigation, and I don't believe that our client is the only one in that sort of situation, I believe that even though this process has taken a long time, it has given all of the parties an opportunity to observe the professionalism of the allocators and the way they make decisions, and to be confident that the outcome will be one that they can live with.

    0:35:54.3 RN: We have talked a little bit about how liability and risks get determined and allocated in the context of the Superfund remediation program, what we think of as the clean-up program, I mentioned upfront that we're not specifically talking about how the NRD program works with different jurisdictional agencies that develop records for either asserting claims or are more likely to engage in consensual agreements to conduct restoration activities and assessments, but a lot of what we've been talking about in terms of the liability scheme and the fact that the liabilities that once determined can be allocated certainly would seem to apply to what you've been talking about in terms of the expertise of the professional allocation process, there aren't that many NRD cases yet that have gone through that process, but there certainly seems to be no reason why they couldn't. And I think that's something that we probably should be looking for down the road, but the NRD program... How it works and how you interact with it. I think it's a whole other discussion. One thing that I wanted to ask you about, Leslie, is that because of your experience, is that we've talked a lot already today about the role of US EPA, state governments, private parties, but we're neglecting one particular party, also in the Superfund cleanup program, particularly in the NRD Program, and that is the tribes that have jurisdictional interests of their own. Can you talk a little bit about that?

    0:37:20.1 LN: Yes, thank you. In Portland, for example, there is a natural resource trustee Council, which is involved in assessing damages to natural resources and then determining likely causes and seeking funds to restore or replace. The tribes who are part of the council are also involved in overseeing the remedial decisions and the implementation just as EPA in the state of Oregon are, their roles are a little bit different because although the state has state funding and EPA has funding authorized by Congress, the tribes, generally do not have budgets that allow for participation in oversight, and therefore are looking to the participating parties to fund their participation, but certainly I have seen over time remedies shift, remedies change, implementation vary because of tribal concerns and issues both about cultural and historical resources and present day concerns about their members. So they are a player. I think they're becoming an increasingly large player at many sites that I see, and they do change the dynamic. With that, I think we'll conclude, thank you to our listeners for joining us for this episode of Digging Into Land Use Law.

    0:38:36.8 LN: For additional information on this topic or other environmental and land use matters. Please visit our website at nossaman.com, and don't forget to subscribe to Digging Into Land Use Law, wherever you listen to podcasts so you don't miss an episode. Until next time.

    [music]

    0:38:54.8 S2: Digging Into Land Use Law is presented by Nossaman LLP, and cannot be copied or re-broadcast without consent, content reflects the personal views and opinions of the participants. The information provided in this podcast is for informational purposes only. It is not intended as legal advice and does not create an attorney-client relationship. Listeners should not act solely upon this information without seeking professional legal counsel.


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