Pitfalls In Proving CERCLA Divisibility Of Harm

In a stinging decision, the Hon. Lonny R. Suko, a federal district court judge sitting in the Eastern District of Washington, ruled on April 4, 2012, that PRP Teck Cominco Metals, Ltd. failed to prove that contamination at a CERCLA site was divisible and, as a result, will be subject to CERCLA 107 joint and several liability at an upcoming September 2012 bench trial (Pakootas v. Teck Cominco Metals Ltd., E.D. Wash., No. 04-cv-256, 4/4/12).

The Confederated Tribes of the Colville Reservation, and the State of Washington as Plaintiff-Intervenor, filed a CERCLA action against Teck, alleging that the company had discharged slag and other hazardous substances into the Upper Columbia River, a Superfund site (the “UCR Site”) from its lead-zinc smelter across the border in British Columbia.

An earlier Ninth Circuit decision in the case discussed how Teck’s smelter had dumped slag waste into the Columbia River, ten miles north of the border, over several decades of operation, which resulted in pollution downstream in the United States. In 2003, the EPA placed the site on the National Priorities List. Thereafter, EPA issued a unilateral administrative cleanup order, which Teck failed to comply with. Initially, a lawsuit seeking enforcement of the order was brought. The State of Washington intervened in the action and amended its initial complaint to seek future CERCLA response costs and declaratory relief seeking natural resource damages.

A settlement between Teck and EPA followed, pursuant to which EPA withdrew the unilateral administrative cleanup order. Because enforcement of the order was then no longer at issue, there were no longer any pending claims by Plaintiffs Pakootas and Michel. Thus, what is at issue in the upcoming trial are the cost recovery and natural resource damages claims of the Tribes and the State.

Against this procedural backdrop, the motions before Judge Suko were the Tribes’ motion to dismiss Teck’s affirmative defense seeking to apportion liability and the State’s motion for partial summary judgment on Teck’s Divisibility Defense. At the outset, the court provided some helpful definitions of the technical CERCLA terms that would be discussed in the Opinion. For example, the judge explained that divisibility/apportionment is not a defense to liability itself. Rather, it is a judicially created defense to joint and several liability. Although “divisibility” and “apportionment” are terms often used interchangeably, what is potentially divisible is the harm, and if the harm is divisible, what it potentially apportions is liability, assuming a reasonable factual basis for apportionment. 

In opposing the motions, Teck argued that, even assuming it was liable under CERCLA, liability should be several, not joint and several, because the harm at issue is divisible. Pursuant to the Supreme Court’s landmark decision inBurlington Northern and Santa Fe Railway (“BNSF”) case, liability under CERCLA is generally joint and several unless a defendant meets its burden to prove the harm is divisible and capable of apportionment. Under the Restatement (Second) of Torts §433(A), the universal starting point for divisibility of harm analyses is “when two or more persons acting independently cause a distinct or single harm for which there is a reasonable basis for division according to the contribution of each, each is subject to liability only for the portion of the total harm that he has himself caused.” According to the Eighth Circuit’s decision in U.S. v. Hercules, “evidence supporting divisibility must be concrete and specific.”  

At the outset, it appeared that Teck had some probability of defeating the motions on the strength of an impressive array of expert witnesses. One environmental expert, Mark W. Johns, Ph.D., opined that there was no detectable release of hazardous substances from Teck’s barren slag and no evidence that dissolved metals from liquid effluent releases were located at the site. Using three different methodologies to apportion Teck’s liability for the harm at the UCR Site, Dr. Johns argued persuasively that Teck’s share of liability should be nothing or next to nothing 

Unfortunately for Teck, the court concluded that Teck had failed to present sufficient evidence to support its divisibility argument. Critical to the district court’s decision was its analysis of the term “harm.” Teck argued, based upon its reading of the BNSF decision, that the type of harm subject to apportionment was the alleged contamination from the leaching of metals traceable to the leaching of Teck’s slag and effluent. However, the Court ruled this argument missed the mark. The Ninth Circuit’s definition of harm, relied upon by Teck, was “for the purposes of determining divisibility,” not liability in the first instance, according to the district court. The court held that “the harm is the entirety of the contamination in the UCR site and what the Plaintiffs seek are recovery of costs to investigate and cleanup the entirety of that contamination…” The court continued:

"This contamination is not limited to metals which have been released or which threaten to be released from Teck’s slag and/or liquid effluent deposited in the UCR Site. None of Teck’s apportionment theories address the entirety of the contamination. Instead, they begin with the assumption that the only harm at issue is whatever metals were released from Teck’s slag and/or liquid effluent and the same metals which were released from non-Teck sources. This is a fatal flaw. Because Teck has not addressed the relevant harm in the first instance, it has failed to establish as a matter of law that the relevant harm is a single harm divisible in terms of degree".

In other words, Teck’s fatal flaw was in failing to account for all of the harm at the UCR Site. Because it did not do so, it would not prove that the harm it caused was divisible and thereby capable of apportionment.

For the CERCLA cost recovery practitioner, Pakootas makes for important reading, not only because of its cautionary holding, but because of its detailed analysis of other CERCLA cases, including BNSF, in which cases all of the harm at the respective sites was accounted for in determining that divisibility was possible. In short, Teck failed to consider the full range of environmental consequences at the UCR Site and, subject to post-trial appeal, may pay a steep price .

CPLR Article 16 Protection for NY Defendants

The application of CPLR Article 16 can significantly limit a defendant’s exposure in NY litigation for non-economic loss to his or her equitable share of fault. The CPLR defines “non-economic loss” to include pain and suffering, mental anguish, loss of consortium or other similar categories of damages. Thus, Article 16 does not avail a defendant in a claim to recover lost earnings or unreimbursed medical expenses. However, for claims seeking recovery for pain and suffering, Section 1601 modifies the common law rule of joint and several liability by making a joint tortfeasor, whose share of fault is fifty percent or less, liable for plaintiff’s non-economic loss only to the extent of that tortfeasor’s equitable share. For a thoughtful analysis of whether to assert a contribution claim or to rely on the application of Article 16, I commend you to “Securing Full Protection of CPLR Article 16 for Defendants,” an article by John Lyddane and Ellen B. Fishman, partners at Martin Clearwater & Bell, which appeared in The New York Law Journal on September 14, 2010. Although the article focuses on the application of Article 16 in defending medical malpractice actions, the authors’ analysis is equally applicable to the defense of toxic tort litigation. In particular, Mr. Lyddane and Ms. Fishman provide a valuable discussion concerning how to keep Article 16 issues, (i.e., the non-defendants’ wrongs) before the finder of fact.

CPLR Article 16 contains many traps for the unwary practitioner. In particular, the exceptions to CPLR Article 16 must be considered in advising clients concerning the relief this section potentially affords them as defendants. For example, tortfeasor liability on property damage and wrongful death claims remains joint and several in respect to all categories of damages. There may be instances when a defendant should implead a co-tortfeasor as a third-party into the case rather than seek relief from Article 16. Another trap for the unwary litigant is in construction litigation. A tortfeasor shown to have violated what the law denominates a “non-delegable duty” gets no several-only status. Thus, in Labor Law Section 240 and 241 cases, a tortfeasor found liable under those sections may be found joint and severally liable for satisfying an adverse judgment if that liability is predicated upon a “non-delegable duty.”