RCRA Restricts Citizens Suits

Owners of contaminated property cannot file a citizen suit under the Resource Conservation and Re-covery Act (RCRA) for reimbursement of their cleanup costs, according to a ruling by the U.S. Supreme Court (Meghrig v. KFC Western Inc., Docket No. 95-83, March 19, 1996).

The court's unanimous opinion, by Jus-tice Sandra Day O'Connor, gave two reasons for denying recovery of site cleanup costs via citizen suits. For one thing, she said, RCRA does not clearly state that private parties can file suit after they have finished cleanup work and no "im-minent and substantial" danger to health or the environment exists.

Also, RCRA limits the relief that federal district courts can provide in citizen suits, she continued. Section 7002(a) permits judges "to restrain" any person who contributes to a hazardous waste site and "to order any such person to take such other action as may be necessary." How-ever, RCRA does not offer citizen suits as a way for parties to obtain reimbursement of their past re-sponse costs, the opinion said.

The decision is particularly forceful because the justices could have limited the ruling to the "imminent and substantial endangerment" is-sue. The high court could have merely said that citizen suits are re-served for situations that pose an immediate threat and require a prompt response - not for sites where cleanup crews have packed up, collected their pay and moved on to other jobs. Instead, the court expressly ruled that a RCRA citizen suit is not a method for squaring accounts with parties who may be ultimately liable for cleanup costs.

Some observers have called the ruling a blow to the environment. Current owners of contaminated sites, particularly where petroleum products are present, won't likely be quick to initiate cleanup work. Petroleum products are not covered under the federal Superfund cleanup scheme. If the stakes are high enough, these owners will probably want to take their chances in a drawn-out court battle.

"Now, if someone comes into my office and says 'I've discovered contamination, what should I do?,' I'll have to say, 'Don't do anything. Sit down. I'll file a lawsuit on your behalf,"' said a lawyer who represents the current owners of a contaminated site. "Instead of seeking restitution, you have to try to get a mandatory injunction or-dering the responsible parties to clean up the site," he added.

The Supreme Court did not directly address whether citizen suits to recover response costs are permissible if an imminent endangerment still exists. However, the overall opinion's tone suggested that the court is not willing to broadly interpret RCRA, creating remedies (i.e., money damages) that Congress did not expressly provide.

KFC Western bought the site for a fried chicken restaurant. Before construction began, petroleum contamination was discovered on the property. Everyone agreed that KFC did not cause the problem and did not own the site when the problem arose. Nevertheless, Los Angeles County environmental officials ordered the company to clean-up the site.

After spending in excess of $200,000 on the restoration, KFC filed a RCRA citizen suit against Alan and Margaret Meghrig, who had operated a gasoline station on the site before selling it to KFC.

The U.S. Court of Appeals for the Ninth Circuit ruled that courts could go beyond merely granting an injunction under RCRA's citizen suit clause (see WW May 1995, pg. 60).

As the appellate court saw it, RCRA allows courts to order defendants to "take such other action as may be necessary." Thus, if RCRA allows suits by the federal government for restitution of response costs, then private parties should have the same relief, the Ninth Cir-cuit concluded. All that's necessary is for an imminent endangerment to have existed when the cleanup occurred, the appeals court said, and not necessarily when the citizen suit was filed.

Unimpressed with the Ninth Circuit's reasoning, Jus-tice O'Connor pointed to the Superfund law as an example of how Congress unequivocally creates private re-sponse cost recovery actions. Congress could have done so in the RCRA citizen suit provision if that's what the lawmakers had intended, she noted.

Zero-Value Industrial Sites A contaminated industrial site, which would be worth $1 million dollars if not for the pollution, has zero value for purposes of county pro-perty tax assessments, according to the Minnesota Su-preme Court (Westling v. Mille Lacs County, Docket No. C1-95-979, Feb. 2, 1996).

The decision affirmed a state tax court ruling that the "unimpaired value" of the 13-acre property must be offset by the diminution of value from the "stigma" of pollution and the cleanup costs.The court acknowledged the county's frustration with "attaching a zero market value to ... improved real estate [producing] $114,000 in annual rent."