In a case of first impression, the Ninth Circuit recently ruled that facilities with air emissions that included hazardous substances could not be liable for remediating other properties contaminated by those hazardous substances. In Pakootas v. Teck Cominco Metals, LTD (2016 WL 401119), the Ninth Circuit held that a facility that emitted hazardous substances was not arranging for the disposal of those substances at properties at which the emissions settled and therefore was not a liable party under the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. 9601) (“CERCLA”). The decision is good news for emission sources facing a variety of attacks outside of the Clean Air Act, under which they are regulated, but not such good news for responsible parties seeking cost recovery under CERCLA from companies whose air emission deposition contributed to contamination at CERCLA sites.

In Pakootas, the State of Washington and several Native American tribes had long sought cost recovery and natural resources damages for sediment contamination of a portion of the Columbia River alleged to be caused by discharges of slag from a Canadian smelter located close to the U.S. border. The Ninth Circuit had held in a prior case that the smelter was liable for sediment contamination in the United States resulting from metal slag discharged into the river in Canada. (Pakootas v. Teck Cominco Metals, 636 F.3d 1214 (9th Cir. 2011)). After that decision, the plaintiffs amended their claim to add liability for contaminants at the site resulting from air emissions from the facility operations and subsequent deposition of those contaminants in the Columbia River. The District Court denied the smelter’s motion to dismiss these additional claims but then certified the question for review by the Ninth Circuit.

The Ninth Circuit reversed the District Court, holding that contamination from air emissions did not constitute disposal under CERCLA and that no CERCLA claim could be brought to address that contamination. The Ninth Circuit noted that it had recently upheld the dismissal of a citizen suit pursuant to the Resource Conservation and Recovery Act (42 U.S.C. 6901) (“RCRA”) alleging damages by diesel emissions from locomotives, holding that the strict language of the definition of “disposal” under RCRA did not include the emission and subsequent deposition of airborne waste materials. (Center for Community Action and Environmental Justice v. BNSF Railway Company, 764 F.3d 1019 (9th Cir. 2014)). The Ninth Circuit reasoned that since CERCLA incorporated the RCRA definition of “disposal” by reference, the same reasoning should apply to the question of whether the smelter was liable for “arranging for the disposal” of the emitted substances that had landed by the site through deposition. Looking to its prior interpretation, the Ninth Circuit ruled that the deposition of airborne-emitted substances could not constitute “arranging for disposal” under CERCLA and that these specific CERCLA claims could not stand. The Ninth Circuit acknowledged that CERCLA is to be interpreted broadly to allow for the remediation of contamination but also stated that liability still had to be tied to the language of the statute, which in this case did not provide for liability for parties not engaged in an act of disposal.

From the perspective of operators of stationary sources within the Ninth Circuit this decision is very good news. Stationary sources have been the subject of state law nuisance claims and should be relieved to see another means of expanding their liability beyond Clean Air Act requirements eliminated. The decision is also positive in that it continues the trend in recent years of courts interpreting the plain language of CERCLA rather than stretching the statute in order to find industrial operations liable regardless of their connection to a given site.

That said, the Environmental Protection Agency and responsible parties have often considered facilities that caused contamination by virtue of their emissions liable under CERCLA, and there are any number of negotiated settlements and consent decrees involving such parties. The decision may complicate such settlements in the future, and it could yield confusing differences in liability at sites where air emissions have caused contamination.

Liability under CERCLA extends to any person (i) who is the owner or operator of a site, (ii) who owned or operated the site at the time that hazardous substances were “disposed” at the site, (iii) who arranged for the “disposal” or treatment of hazardous substances at the site, or (iv) who transported hazardous substances for “disposal” or treatment at the site. The liability of parties in categories (ii), (iii), and (iv) is expressly tied to “disposal,” while the liability of parties in category (i) is not. Accordingly, under the logic of the decision, an owner or operator of a facility with an emissions source could be held liable for the contamination on its own property under category (i), but not for the contamination on adjacent properties, since its liability there would turn on whether it was arranging for “disposal” on those properties under category (iii), which is the premise for liability that the Ninth Circuit rejected. Persons who owned or operated a site at the time of “disposal” of hazardous substances, but who are not currently the owner or operator of the site, also should not face liability because their liability also is premised on “disposal” under category (ii).

Another complication is that the RCRA definition of “disposal” specifically includes windblown materials from solid waste placed on land. As a result, a party with both an emission source and waste piles on their property could be liable for contamination on another property under category (iii) for materials blown from their waste piles, but not for materials emitted from the emissions source.

The Ninth Circuit acknowledged that it could have interpreted the definition of “disposal” differently under CERCLA than under RCRA in light of the different purposes of the two statutes, but found that it had no reason to in this case. The Ninth Circuit also acknowledged that CERCLA actually addresses air emissions, albeit in connection with the term “release,” but found that this was not sufficient to modify the strict definition of disposal. Much of the government’s authority to act under CERCLA is triggered by “releases,” whereas much of RCRA’s authority is triggered by “disposal.” CERCLA’s definition of “release” includes “emitting” but specifically excludes emissions from engine exhaust from mobile sources, which implies that nonmobile emissions are “releases.” CERCLA also exempts persons responsible for “federally permitted releases” from cost recovery liability and defines such releases to include emissions permitted under the Clean Air Act. The Ninth Circuit, however, declined to utilize these provisions of CERCLA, which address air emissions as a reason to interpret the term “disposal” differently than in RCRA.

The Ninth Circuit’s distinction between the terms “release” and “disposal” for the purpose of CERCLA cost recovery may not satisfy critics or, perhaps, other circuit courts. For these reasons, Pakootas is likely to be debated and questioned in future cases in other circuits. It is, however, now the law of the Ninth Circuit.