District Court Dismisses CERCLA Suit as Time Barred

On September 21, 2010, Judge Freda Wolfson of the U.S. District Court for New Jersey dismissed the claims of the United States against Rohm and Haas due to the limitations periods contained in CERCLA. The U.S. agreed that the suit was untimely; however, argued that the limitations periods contained in CERCLA should be tolled due to a change in law on whether oversight costs are recoverable, and for other equitable reasons. The defendants (including predecessors) had disposed of industrial wastes at the site between 1950 and 1965. After site investigation, the site was listed on the NPL in 1984. An ACO was entered into with the NJDEP in 1991 and RI/FS was completed in 1992. Substances were removed from the site from 1991 through 1995 and the EPA issued a Baseline Risk Assessment finding the site no longer posed a risk to human health or the environment in 1996. A Record of Decision (ROD) was issued in September of 1996. A PRP letter was issued to the defendant in 1997 after which the parties entered into a Consent Order which explicitly excluded any reimbursement of oversight costs, which were defined as “future response costs incurred by EPA in monitoring and supervising [Morton’s] performance …” The Consent Order did not contain a tolling agreement. The monitoring of the site was completed in 2001 and the site was taken off of the NPL in 2002. Six years later the EPA wrote to the defendant demanding payment of oversight costs. Shortly thereafter the parties entered into a tolling agreement from November 2008 to March of 2009. The complaint was filed in October of 2009. In the complaint, the U.S. sought the recovery of oversight costs, although the government did reserve its rights to seek other costs. There are two potential limitations periods under CERCLA that could apply to the claims. The first is a 3 year period for commencement of a removal action which starts to run after completion of the removal, and a 6 year period for a remedial action, which commences with the initiation of physical on-site construction of the remedial action. The Court acknowledged that case law provides that the 3 year period begins to accrue upon issuance of the ROD, which in this case was issued in 1996. The 6 year statute began to run in 1991 when defendant began to remove hazardous substances from the site. The government, however, argued that it was barred from bringing the action for oversight costs by the Third Circuit’s 1993 decision in U.S. v. Rohm and Haas 2 F.3d 1265 (3rd. Cir. 1993) which was subsequently overturned by U.S. v. DuPont, 432 F.3d 161 (3rd Cir. 2005). The government argued that its claims could not have accrued as it could not have been brought until the decision in DuPont was issued in December 2005. The court rejected the government’s argument in part due its statement that costs other than oversight costs might be included. According to the court, that constituted a concession that the claim for the other costs could have been brought as they were not precluded and resurrected by the decision of the 3rd Circuit. The court reasoned, further, that the application of periods for limitations should not be governed by the uncertainties of changing laws. The court noted that other jurisdictions had rendered decisions contrary to the 1993 Rohm and Haas decision, so that it would have been appropriate to take actions to preserve the claims. The court then considered whether the claims could proceed under the doctrine of equitable tolling. The court, again, ruled in favor of defendants finding that the government had not acted diligently in pursuing or preserving its claims. The court pointed to such actions as the failure to include a reservation and tolling of the claims for oversight and future costs in the Consent Order, the failure to initiate proceedings with the knowledge of favorable decisions on the ability to recover oversight costs from other jurisdictions, and then waited over three years from the issuance of the DuPont decision to institute its action. As the court stated: “Such behavior does not bespeak of due diligence in preserving one’s claim.” DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in environmental and defense of toxic exposure matters. For additional information about the matters in this bulletin or in the firm’s environmental practice, please contactSteven A. Kunzman, Esq. who heads our Environmental and Latent Injury Litigation Department

CATEGORIES: CERCLA, Superfund

DiFrancesco, Bateman, Kunzman, Davis, Lehrer & Flaum PC (http://www.dbnjlawblog.com) is a full service law firm in New Jersey which provides a broad range of legal services. For additional information about the matters in this bulletin or in the firm’s Employment Practice, please contact Richard P. Flaum, Esq.

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