Opinion ID: 1438987
Heading Depth: 3
Heading Rank: 2

Heading: CERCLA response costs are restitutionary.

Text: CERCLA authorizes the President, acting through the Environmental Protection Agency (EPA), to respond to the release or the substantial threat of a release of any hazardous substance or any pollutant or contaminant which may present an imminent and substantial danger to public health or welfare. 42 U.S.C. § 9604(a)(1); Exec. Order No. 12,316, 46 Fed. Reg. 42,237 (1981). The EPA has broad authority to take whatever response measures it deems necessary to remove or neutralize hazardous waste. 42 U.S.C. § 9604; 42 U.S.C. § 9621(a). Alternatively, the EPA may seek injunctive relief to compel responsible parties to take necessary response action. 42 U.S.C. § 9606(a). Private citizens also have standing to sue to force compliance with CERCLA. 42 U.S.C. § 9659(a)(1). CERCLA permits certain governmental bodies (but not private citizens) to recover damages for injury to, destruction of, or loss of natural resources. 42 U.S.C. § 9607(a)(4)(C). CERCLA does not provide for compensation to private individuals for personal injury, property damages and economic losses resulting from releases of hazardous substances. See section 4(a) of S. 1480, 96th Cong., 1st Sess., 125 Cong. Rec. 17,991 (1979) (providing for such liability, but eliminated from CERCLA as ultimately passed), cited in Brett, Insuring Against the Innovative Liabilities and Remedies Created by Superfund, 6 J. Envtl. L. 1, 18 & n. 95 (1986). Natural resource damages are essentially a compensatory remedy. The measure of natural resource damages is  the lesser of : restoration or replacement costs; or diminution of use values. (Italics mine.) 43 C.F.R. § 11.35(b)(2). Natural resource damages must be based on actual injury or loss. 42 U.S.C. § 9601(6). They are available only to governmental bodies act[ing] on behalf of the public as trustee of the natural resources. 42 U.S.C. § 9607(f)(1). Artesian Water Co. v. New Castle Cy., 851 F.2d 643 (3d Cir.1988). Total liability is limited to the value of the injured property. 42 U.S.C. § 9651(c); 43 C.F.R. § 11.35(b)(2). In addition to natural resource damages, CERCLA permits both the EPA and other parties to recover costs which they have incurred as a result of a response action from responsible parties. 42 U.S.C. § 9607(a)(4)(A), (B). Responsible parties include hazardous waste generators, hazardous waste transporters, and hazardous waste disposal facility owners and operators. 42 U.S.C. § 9607(a). CERCLA defines the term response to mean removal ... and remedial action ... includ[ing] enforcement activities related thereto. 42 U.S.C. § 9601(25). Among the many safety measures identified as potential response actions are monitoring, security fencing, dikes, on-site treatment or incineration, recycling, provision of alternative water supplies, and related enforcement activities. 42 U.S.C. § 9601(23), (24). CERCLA response cost liability is essentially restitutional: When a party, governmental or nongovernmental, incurs response costs it is performing the duty of the responsible party. In seeking recovery of those costs under section 107(a) [42 U.S.C. § 9607(a)], that party is asking for the return of money spent on behalf of the responsible party to safeguard public health. Thus, response cost recovery restores the status quo by returning to the plaintiff what rightfully belongs to it, rather than compensating the plaintiff for loss sustained to its interest as a result of the responsible parties' wrongful conduct, and is a classic example of equitable restitution. (Footnotes omitted.) Brett, Insuring Against the Innovative Liabilities and Remedies Created by Superfund, 6 J. Envtl. L. 1, 35 (1986). The contrast between natural resource damage liability and response cost liability further indicates that CERCLA response costs are a restitutionary remedy. First, a responsible party can be held liable for response costs even though there is no property damage to compensate, because no actual release has yet occurred. 42 U.S.C. § 9604. Second, parties without an economic interest in the affected property can maintain an action for response costs. 42 U.S.C. §§ 9607(a)(4)(B), 9659(a). Finally, liability for response costs can greatly exceed the economic value of the affected property. See Abraham, Environmental Liability and the Limits of Insurance, 88 Colum. L. Rev. 942, 969 (1988). The contrast between response costs and natural resource damages makes clear that response costs are an equitable restitutionary remedy, not a compensatory damage remedy. Verlan, Ltd. v. John L. Armitage & Co., 695 F. Supp. 950 (N.D. Ill. 1988). Every court that has examined the nature of Superfund response costs liability outside of the insurance context has held that such costs are a form of equitable restitution. See, e.g., United States v. Northernaire Plating Co., 685 F. Supp. 1410 (W.D. Mich. 1988) (no right to jury trial); Wehner v. Syntex Corp., 682 F. Supp. 39 (N.D. Cal. 1987) (idem); United States v. Dickerson, 640 F. Supp. 488 (D. Md. 1986) (idem); United States v. Conservation Chem. Co., 619 F. Supp. 162, 206 (W.D. Mo. 1985) (permitting assertion of equitable defenses); Mardan Corp. v. C.G.C. Music, Ltd., 600 F. Supp. 1049 (D. Ariz. 1984) (idem); Penn Terra Ltd. v. Department of Envtl. Resources, 733 F.2d 267, 278 (3d Cir.1984) (response action not automatically stayed under Bankruptcy Code). In fact, this authority is so overwhelming that even the policyholders admit that the governmental remedy under CERCLA is equitable.  Brief of Policyholders, at 37. Therefore, this court must also hold that CERCLA response costs are a restitutionary remedy.