The Hazardous Waste Land
By Jerry L. Anderson
INTRODUCTION
What are the roots that clutch, what branches grow
Out of this stony rubbish? Son of man,
You cannot say, or guess, for you know only
A heap of broken images, where the sun beats,
And the dead tree gives no shelter, the cricket no relief,
And the dry stone no sound of water.
Twenty-three attorneys gathered in the office of the United States Attorney for the deposition of Paul Kalarski, waste truck driver and landfill worker. Mr. Kalarski, in his mid-sixties, arrived at the deposition in an ambulance. He appeared to be very ill as he began to answer questions, hooked to an oxygen tank and attended by a nurse. Halting every so often for more medication, to catch his breath or regain his strength, Kalarski rambled through his recollections—sometimes very clear, but at other times vague, disjointed, and often conflicting—of his days at the Hayward dump, now known to the parties as the Bryant Avenue CERCLA site.
The assembled lawyers, representing the likes of a Big Three automaker and a major communications company, as well as the local, state, and federal governments, hung on every word. Kalarski, who had worked as a truck driver and laborer at the site in the 1960's and 1970's, had become the crucial witness in the government's suit to recover the site's cleanup costs, largely because almost everyone else associated with the site had died. Cleanup costs at the site could reach $10 million, and any party might suddenly be in or out of the pool of parties held responsible for the cleanup based on a sentence from this witness's lips.
Although his health worsened throughout the protracted deposition—a two-day session in January and a three-day session in March—Kalarski tried to remember the details of the dump's operations twenty to thirty years before. He struggled to reconstruct which company's waste was hauled where and what it might have been. Was it some sort of acid? Did it smell bad? What color was the powder? How many times a week had he hauled that waste? The memories were now hazy, and progress was slow. Poor health forced a recess, and the deposition was rescheduled and postponed several times. Finally, the United States Attorney sent word that Mr. Kalarski had died. The nightmarish task of deciding who should pay the millions of dollars of cleanup costs had only just begun, however.
Meanwhile, in Toledo, Ohio, negotiations were dragging on over who should pay for the costs to clean up the Dura landfill, run by the city from the 1950's to the 1970's and now an environmental disaster. Located on the banks of the Ottawa River, the dump accepted both residential and industrial wastes for years. A study conducted in 1986 estimated that 5,500 gallons of hazardous leachate from the landfill had been leaking into the river daily. Due to PCB contamination from the Dura dump, the Ottawa River had to be closed to fishing and swimming in 1991.
The city denied responsibility for the site cleanup and identified a small cadre of major waste generators as the ones who should pay. In response, the generator group began to meet on a monthly basis, with lawyers flying into Toledo from across the country to discuss strategies, peruse studies, and conduct investigations to find more parties to help pay cleanup costs. Negotiations between the group and the city continued sporadically over what should be done to the site and who should pay the estimated $33 million in response costs. City lawyers postured and threatened; generator lawyers gathered and talked. Months became years. The city at last proposed a partial solution: a leachate collection system and a 600-foot-long barrier wall would be constructed to protect the river. The generator group, however, produced a different plan which they believed would accomplish the same thing, while saving a lot of money. While the plans are developed and debated, hazardous substances continue to leak into the Ottawa River.
The hazardous waste cleanup system is in trouble. Not only is the system of assigning liability for cleanup costs manifestly unfair, it simply is not working. The Bryant Avenue case and the Dura dump case are but two examples of the thousands of CERCLA cases mired in the Superfund pipeline, laden with inequities and massive transaction costs for the parties involved and destined for delay by inherent incentives to avoid action.
Like a bureaucratic monster with a life of its own, the Superfund system has resisted a number of attempts to streamline the process and to step up the glacial pace of remediation. Congressional pressure and administrative promises of reform have been as effective as hitting a velociraptor with a fly swatter. The cost-recovery system is also bogged down. Cleanup costs are supposed to be recovered from the parties responsible for the contamination, but the Environmental Protection Agency (EPA) has been forced to write off hundreds of millions of dollars of costs because the potential defendants were insolvent or had disappeared, because evidence was insufficient, or because the agency lacked the resources to pursue the case within the statutory limitations period.
Delays in cleanups and cost-recovery seem to be tied, at least in part, to CERCLA's liability system. The parties who are responsible for the cleanup costs (“potentially responsible parties” or “PRPs”) clog the system by questioning every move EPA makes and forcing EPA to spend time building a record to support every decision. For example, the time required for studying sites and developing remedial designs has doubled in recent years, presumably due to the threat of PRP challenge.
In recent years, there has been a cacophony of calls for reform of the system. As alternatives are explored, the fundamental question being raised is whether the current liability approach represents the best answer, in terms of efficiency and fairness, to the hazardous waste problem. As reauthorization nears, the representatives of a variety of interest groups have developed strategies and reform proposals to serve their constituencies. The proposals range from liability carve-outs for specific groups, such as like lenders or municipalities, to a complete abandonment of private party liability. Many of the proposals for reform contain valuable ideas for moving the program into a more equitable and more efficient phase, but because they are burdened by biases they require careful objective evaluation.
In the first years of the Superfund program, courts and commentators, driven by the specter of rampant hazardous contamination, simply glossed over the significant fairness problems in the CERCLA liability scheme in their zeal to achieve environmental progress. One by one, issues like retroactive liability, strict liability, joint and several liability and successor liability were resolved in favor of the government based largely on the slogan that hazardous waste cleanup costs must be placed on those responsible for the problem and that the liability scheme must be “liberally” construed to achieve its goals. But subsequent experience reveals that cleanup costs are often borne by those who are not responsible for the problem at all, and that many other parties are held liable to an extent far exceeding their actual responsibility. The CERCLA liability system has become a black hole that indiscriminately devours all who come near it.
This article will undertake a comprehensive review of the most significant fairness and efficiency problems in the CERCLA mechanism, in order to determine whether these problems merit a change in the system. First, the article will use a hypothetical case to find the roots of the delay and inequity problems seemingly inherent in CERCLA's scheme. The paradigm will illustrate that the reality of many CERCLA cost recoveries has strayed far from the idea that the polluter should pay; in many cases, the system results in an extremely irrational distribution of liability, which in turn leads to further delay. The article will then dissect the legal rules that underlie the scheme's inefficiency and irrational cost distribution to determine whether those rules are justified. Finally, the article will suggest some reforms that should improve the efficiency of CERCLA cleanups while improving the equity of the liability scheme.
What are the roots that clutch, what branches grow
Out of this stony rubbish? Son of man,
You cannot say, or guess, for you know only
A heap of broken images, where the sun beats,
And the dead tree gives no shelter, the cricket no relief,
And the dry stone no sound of water.
Twenty-three attorneys gathered in the office of the United States Attorney for the deposition of Paul Kalarski, waste truck driver and landfill worker. Mr. Kalarski, in his mid-sixties, arrived at the deposition in an ambulance. He appeared to be very ill as he began to answer questions, hooked to an oxygen tank and attended by a nurse. Halting every so often for more medication, to catch his breath or regain his strength, Kalarski rambled through his recollections—sometimes very clear, but at other times vague, disjointed, and often conflicting—of his days at the Hayward dump, now known to the parties as the Bryant Avenue CERCLA site.
The assembled lawyers, representing the likes of a Big Three automaker and a major communications company, as well as the local, state, and federal governments, hung on every word. Kalarski, who had worked as a truck driver and laborer at the site in the 1960's and 1970's, had become the crucial witness in the government's suit to recover the site's cleanup costs, largely because almost everyone else associated with the site had died. Cleanup costs at the site could reach $10 million, and any party might suddenly be in or out of the pool of parties held responsible for the cleanup based on a sentence from this witness's lips.
Although his health worsened throughout the protracted deposition—a two-day session in January and a three-day session in March—Kalarski tried to remember the details of the dump's operations twenty to thirty years before. He struggled to reconstruct which company's waste was hauled where and what it might have been. Was it some sort of acid? Did it smell bad? What color was the powder? How many times a week had he hauled that waste? The memories were now hazy, and progress was slow. Poor health forced a recess, and the deposition was rescheduled and postponed several times. Finally, the United States Attorney sent word that Mr. Kalarski had died. The nightmarish task of deciding who should pay the millions of dollars of cleanup costs had only just begun, however.
Meanwhile, in Toledo, Ohio, negotiations were dragging on over who should pay for the costs to clean up the Dura landfill, run by the city from the 1950's to the 1970's and now an environmental disaster. Located on the banks of the Ottawa River, the dump accepted both residential and industrial wastes for years. A study conducted in 1986 estimated that 5,500 gallons of hazardous leachate from the landfill had been leaking into the river daily. Due to PCB contamination from the Dura dump, the Ottawa River had to be closed to fishing and swimming in 1991.
The city denied responsibility for the site cleanup and identified a small cadre of major waste generators as the ones who should pay. In response, the generator group began to meet on a monthly basis, with lawyers flying into Toledo from across the country to discuss strategies, peruse studies, and conduct investigations to find more parties to help pay cleanup costs. Negotiations between the group and the city continued sporadically over what should be done to the site and who should pay the estimated $33 million in response costs. City lawyers postured and threatened; generator lawyers gathered and talked. Months became years. The city at last proposed a partial solution: a leachate collection system and a 600-foot-long barrier wall would be constructed to protect the river. The generator group, however, produced a different plan which they believed would accomplish the same thing, while saving a lot of money. While the plans are developed and debated, hazardous substances continue to leak into the Ottawa River.
The hazardous waste cleanup system is in trouble. Not only is the system of assigning liability for cleanup costs manifestly unfair, it simply is not working. The Bryant Avenue case and the Dura dump case are but two examples of the thousands of CERCLA cases mired in the Superfund pipeline, laden with inequities and massive transaction costs for the parties involved and destined for delay by inherent incentives to avoid action.
Like a bureaucratic monster with a life of its own, the Superfund system has resisted a number of attempts to streamline the process and to step up the glacial pace of remediation. Congressional pressure and administrative promises of reform have been as effective as hitting a velociraptor with a fly swatter. The cost-recovery system is also bogged down. Cleanup costs are supposed to be recovered from the parties responsible for the contamination, but the Environmental Protection Agency (EPA) has been forced to write off hundreds of millions of dollars of costs because the potential defendants were insolvent or had disappeared, because evidence was insufficient, or because the agency lacked the resources to pursue the case within the statutory limitations period.
Delays in cleanups and cost-recovery seem to be tied, at least in part, to CERCLA's liability system. The parties who are responsible for the cleanup costs (“potentially responsible parties” or “PRPs”) clog the system by questioning every move EPA makes and forcing EPA to spend time building a record to support every decision. For example, the time required for studying sites and developing remedial designs has doubled in recent years, presumably due to the threat of PRP challenge.
In recent years, there has been a cacophony of calls for reform of the system. As alternatives are explored, the fundamental question being raised is whether the current liability approach represents the best answer, in terms of efficiency and fairness, to the hazardous waste problem. As reauthorization nears, the representatives of a variety of interest groups have developed strategies and reform proposals to serve their constituencies. The proposals range from liability carve-outs for specific groups, such as like lenders or municipalities, to a complete abandonment of private party liability. Many of the proposals for reform contain valuable ideas for moving the program into a more equitable and more efficient phase, but because they are burdened by biases they require careful objective evaluation.
In the first years of the Superfund program, courts and commentators, driven by the specter of rampant hazardous contamination, simply glossed over the significant fairness problems in the CERCLA liability scheme in their zeal to achieve environmental progress. One by one, issues like retroactive liability, strict liability, joint and several liability and successor liability were resolved in favor of the government based largely on the slogan that hazardous waste cleanup costs must be placed on those responsible for the problem and that the liability scheme must be “liberally” construed to achieve its goals. But subsequent experience reveals that cleanup costs are often borne by those who are not responsible for the problem at all, and that many other parties are held liable to an extent far exceeding their actual responsibility. The CERCLA liability system has become a black hole that indiscriminately devours all who come near it.
This article will undertake a comprehensive review of the most significant fairness and efficiency problems in the CERCLA mechanism, in order to determine whether these problems merit a change in the system. First, the article will use a hypothetical case to find the roots of the delay and inequity problems seemingly inherent in CERCLA's scheme. The paradigm will illustrate that the reality of many CERCLA cost recoveries has strayed far from the idea that the polluter should pay; in many cases, the system results in an extremely irrational distribution of liability, which in turn leads to further delay. The article will then dissect the legal rules that underlie the scheme's inefficiency and irrational cost distribution to determine whether those rules are justified. Finally, the article will suggest some reforms that should improve the efficiency of CERCLA cleanups while improving the equity of the liability scheme.