Ninth Circuit holds that applying CERCLA to Canadian company where slag dumped in Canada became deposited along banks of Columbia River within U.S. and was releasing toxic metals into its waters did not involve extraterritoriality
Joseph A. Pakootas and Donald R. Michel as individuals and as enrolled members of the Confederated Tribes of the Colville Reservation in Washington state (Plaintiffs) sued to enforce a Unilateral Administrative Order (UAO) issued by the U.S. Environmental Protection Agency (EPA) against Teck Cominco Metals, Ltd., a Canadian corporation (Defendant). The Order would require Defendant to conduct a remedial investigation/feasibility study (RI/FS) along a segment of the Columbia River lying entirely within the United States, where hazardous substances disposed of by Defendant in Canada have come to be located. On this interlocutory appeal of the district court's denial of Defendant's motion to dismiss, the main transnational issue is whether a citizen suit based on Defendant's alleged non-compliance with the UAO is a domestic or an extraterritorial application of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. Sections 9601-9675, a strict liability statute.
In August 1999, the Colville Tribes petitioned the EPA to assess the hazardous substance contamination in and along the Columbia River in northeastern Washington state. The EPA found ongoing contamination including heavy metals such as arsenic, cadmium, copper, lead, mercury and zinc." The "EPA also observed the presence of slag, a by-product of the smelting furnaces, containing glassy ferrous granules and other metals, at beaches and other depositional areas at the Assessment Area." The EPA decided that the Upper Columbia River Site (the Site) was eligible to be listed on the National Priorities List (NPL).
Defendant owns and operates a lead-zinc smelter (Trail Smelter) in Trail, British Columbia. Between 1906 and 1995, Defendant has been generating and disposing of hazardous materials, in both liquid and solid form, into the Columbia River. Before mid-1995, the Trail Smelter had been dumping up to 145,000 tons of slag per year into the Columbia River. Although the discharge itself took place within Canada, the EPA concluded that the river's current bore Defendant's wastes southward into the U.S. where it settled out in slower-flowing quiescent areas.
A substantial quantity of slag has built up and adversely affects the surface water, ground water, sediments, and biological resources of the Upper Columbia River and Lake Roosevelt. Technical evidence shows that the Defendant's Smelter is the main source of pollution at the Site.
Plaintiffs filed this action in Washington federal court under the citizen suit provision of CERCLA. They asked for a declaration that Defendant has violated the EPA Order, for injunctive relief enforcing the Order against Defendant, as well as for penalties for non-compliance and recovery of costs and fees. Defendant moved to dismiss the complaint for failure to state a CERCLA claim and for lack of subject matter jurisdiction, on the ground that the district court could not enforce and EPA Order against activities carried out by Defendant in Canada. The District Court denied the motion but certified the issues for interlocutory appeal. In a July 3 opinion, the U.S. Court of Appeals for the Ninth Circuit affirms.
Defendant's primary argument is that, in absence of a clear statement by Congress that it intended CERCLA to apply extraterritorially, the presumption against extraterritorial application of United States law precludes CERCLA from applying to Defendant in Canada. The Court needs to address whether the presumption against extraterritoriality applies only if this case does involve an extraterritorial application of CERCLA.
"Unlike other environmental laws such as the Clean Air Act (CAA), the Clean Water Act (CWA), and [the] Resource Conservation and Recovery Act (RCRA), CERCLA is not a regulatory statute. Rather, CERCLA imposes liability for the cleanup of sites where there is a release or threatened release of hazardous substances into the environment. [Cite].." [1073].
"CERCLA liability attaches when three conditions are satisfied: (1) the site at which there is an actual or threatened release of hazardous substances is a "facility, ...' (2) a "release' ... of a hazardous substance from the facility has occurred, ... and (3) the party is within one of the four classes of persons subject to liability."
"CERCLA defines the term "facility' as, in relevant part, "any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located.' Section 9601(9). The Order defines the "facility' in this case as the Site, which is described as the "extent of contamination in the United States associated with the Upper Columbia River.' UAO at 2 (emphasis added). The slag has "come to be located' at the Site, and the Site is thus a facility under Section 9601(a). [Cite]."
" ... Defendant does not argue that the Site is not a CERCLA facility. Because the CERCLA facility is within the United States, this case does not involve an extraterritorial application of CERCLA to a facility abroad. The theory of Plaintiffs's complaint, ... does not invoke extraterritorial application of United States law precisely because this case involves a domestic facility." [1074].
"The second element of liability under CERCLA is that there must be a "release' or "threatened release' of a hazardous substance from the facility into the environment. ... CERCLA defines a "release,' with certain exceptions not relevant here, as "any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment.' Section 9601(22)."
"Plaintiffs has (sic) alleged that the leaching of hazardous substances from the slag that is in the Site is a CERCLA release, and Defendant has not argued that the slag's interaction with the water and sediment of the Upper Columbia River is not a release within the intendment of CERCLA. Our precedents establish that the passive migration of hazardous substances into the environment from where hazardous substances have come to be located is a release under CERCLA. [Cites]. We hold that the leaching of hazardous substances from the slag at the Site is a CERCLA release. That release -- a release into the United States from a facility in the United States -- is entirely domestic." [1075].
The Court then refers to the "domestic effects' exception to the presumption against extraterritorial application of United States law. See Steele v. Bulova Watch Co., 344 U.S. 280, 287-88 (1952) (finding jurisdiction in a trademark suit against a person in Mexico who manufactured counterfeit Bulova watches that then entered and caused harm within the United States). "In Steele the prohibited conduct, ... took place in Mexico but the harm, the dilution of Bulova's trademark, took place in the United States. Id. at 287. The Court therefore held that there was jurisdiction in that case."
"The location where a party arranged for disposal or disposed of hazardous substances is not controlling ... Because the actual or threatened release of hazardous substances triggers CERCLA liability, and because the actual or threatened release here, ... took place in the United States, this case involves a domestic application of CERCLA." ... [1079].
Citation: Pakootas v. Teck Cominco Metals, Ltd., 36 Envtl. L. Rep. 20, 130, 452 F.3d 1066 (9th Cir. 2006).
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