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November 01, 2013
New York entitled to cost recovery for 'removal

The distinction between a removal action and remediation under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) was central in a suit brought by the New York State Department of Environmental Conservation (DEC) against the owner of a 170-acre industrial area and the light industries that operated on the property. 

The DEC was seeking to compel the businesses to reimburse the state for the purchase of equipment installed to treat water from the sole-source aquifer used by the town of Hempstead, New York.  According to the DEC, the aquifer had been contaminated with volatile organic compounds (VOCs) used by the businesses.  A district court ruled that the state’s claim was time-barred by CERCLA’s statute of limitations governing remediations.  But the ruling was vacated by a three-judge panel of the U.S. Court of Appeals for the 2nd Circuit, which found that DEC’s action was a removal, not a remediation, and that the removal was still progressing when the DEC filed its petition.  Therefore, DEC’s claim was not barred by the statute of limitations. 

VOC contamination

As described by the 2nd Circuit, in the 1950s, the New Cassel Industrial Area (NCIA) near Hempstead was occupied by manufacturers and other businesses that used the “likely carcinogens” trichloroethylene and tetrachloroethylene.  In 1989, Hempstead detected the chemicals in drinking water wells approximately 1,500 feet from the NCIA.  The town installed a granulated activated carbon adsorption system (GAC) and later an air-stripping tower to remove the chemicals from the water. 

The town then requested that the DEC reimburse it for the cost of the tower, which the DEC agreed to do.  Subsequently, the DEC determined that the NCIA was the source of the contamination.  In 2006, the DEC filed a CERCLA suit against the defendants, seeking to recover the costs incurred for investigating and responding to the off-site groundwater contamination at the NCIA, as well as past, present, and future response costs incurred and to be incurred by the state in responding to releases of hazardous substances.

Statutes of limitation

Under CERCLA, there is a 6-year statute of limitations governing suits to recover costs for remedial actions —that is, measures to permanently remediate hazardous wastes.  That statute of limitations is triggered by the commencement of cleanup construction.  CERCLA also provides a 3-year statute of limitations for removal actions—that is, measures taken to address immediate threats to public health.  That statute of limitations is triggered by the completion of the removal action.  The district court decided that the town began remediation in 1990 with operation of the air stripper.  Therefore, the statute of limitations was long expired when the state filed its petition in 2006.  Accordingly, the district court sided with the defendants.

Imminent threat
The 2nd Circuit disagreed, stating that the actions were removals, as defined by CERCLA and case law.   First, said the 2nd Circuit, both treatment systems were installed in response to an imminent public health hazard—contamination in Hempstead’s drinking water—a defining characteristic of removal actions. 

Second, both the GAC and the air stripper tower were designed as measures to address water contamination at the endpoint—the wells—and not to permanently remediate the problem by preventing or minimizing the release of hazardous substances so that they do not migrate from the underlying source of contamination at the NCIA.

“Indeed, at the time the GAC and air stripper were built, neither the State nor the Town knew the source of the VOCs in the drinking water pumped from the wells, and they were responding to a water-supply problem, not an environmental cleanup concern,” said the 2nd Circuit.

The panel added that even though the GAC and the air stripper were eventually adopted as part of a permanent remedial solution, they still constituted removal actions at all times relevant to the statute of limitations questions.

The 2nd Circuit thus vacated the district court’s judgment and remanded for further proceedings consistent wi

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