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Recent Decision Restricts RCRA Actions for Damages

Fall 1995

A recent decision from the U.S. Court of Appeals for the Eighth Circuit has again cast doubt as to whether a property owner facing contamination problems may seek recovery of clean-up costs against parties that caused the contamination.

In Furrer v. Brown, the Eighth Circuit refused to read the citizen suits provision of the Resource, Conservation and Recovery Act ("RCRA") to allow for post-cleanup claims for damages against parties that may actually be responsible for causing the contamination.

The Furrer court rejected the rationale of the Ninth Circuit in KFC V. Meghrig, decided March 1, 1995, in which the Court held that post-cleanup claims to recover cleanup costs were encompassed by the RCRA citizens suit provisions (see related article). The KFC court found the RCRA provision that allows judges in fashioning citizen suit remedies to, "order such ... other action as may be necessary," to include damages.

Contrary to KFC, the Furrer court found that Congress had not explicitly or implicitly intended to allow an action for cleanup cost damages. Without the appropriate congressional imprimatur, the Furrer court found that the better reading was that citizen suits under RCRA are intended for injunctive relief — that is, requiring a responsible party to actually engage in investigation and cleanup of a contaminated property.

While the Furrer court decided the damages question, RCRA’s citizen suits provisions remain available to "any person" to bring a claim against those who are causing, or may cause, "imminent and substantial endangerment to human health or the environment." While the Furrer court did not address the question, significant authority holds that the "imminent and substantial endangerment" must exist at the time that a citizen suit is filed. This does not mean, however, that the contamination must have been caused by the current property owner. If a party with a past interest in a currently contaminated property created the circumstances that currently present, or may present, an "imminent and substantial endangerment," such parties may be responsible under RCRA’s citizen suits provision.

While under the KFC decision, property owners had an incentive to cleanup and then recover their costs, the Furrer decision alters this incentive dramatically, indeed it reverses it. Contaminated property owners will now want to evaluate potential claims against third-parties and bring them into the cleanup process at the outset, in particular if they intend to use RCRA’s citizen suit provision to do so. Such early evaluation becomes even more crucial when, as is typical, property owners are encouraged by state and/or local authorities to diligently proceed with a specific cleanup. The all-too-common scenario of contaminated property owners proceeding apace in conducting their cleanup and avoiding legal engagement or analysis may have the effect of removing recovery options for many such owners in the wake of the Furrer decision. A review of the relevant history of a property, former owners, and/or tenants, as well as appropriate legal review, may keep such options open. A recent decision from the U.S. Court of Appeals for the Eighth Circuit has again cast doubt as to whether a property owner facing contamination problems may seek recovery of clean-up costs against parties that caused the contamination.

In Furrer v. Brown, the Eighth Circuit refused to read the citizen suits provision of the Resource, Conservation and Recovery Act ("RCRA") to allow for post-cleanup claims for damages against parties that may actually be responsible for causing the contamination.

The Furrer court rejected the rationale of the Ninth Circuit in KFC V. Meghrig, decided March 1, 1995, in which the Court held that post-cleanup claims to recover cleanup costs were encompassed by the RCRA citizens suit provisions (see related article). The KFC court found the RCRA provision that allows judges in fashioning citizen suit remedies to, "order such ... other action as may be necessary," to include damages.

Contrary to KFC, the Furrer court found that Congress had not explicitly or implicitly intended to allow an action for cleanup cost damages. Without the appropriate congressional imprimatur, the Furrer court found that the better reading was that citizen suits under RCRA are intended for injunctive relief — that is, requiring a responsible party to actually engage in investigation and cleanup of a contaminated property.

While the Furrer court decided the damages question, RCRA’s citizen suits provisions remain available to "any person" to bring a claim against those who are causing, or may cause, "imminent and substantial endangerment to human health or the environment." While the Furrer court did not address the question, significant authority holds that the "imminent and substantial endangerment" must exist at the time that a citizen suit is filed. This does not mean, however, that the contamination must have been caused by the current property owner. If a party with a past interest in a currently contaminated property created the circumstances that currently present, or may present, an "imminent and substantial endangerment," such parties may be responsible under RCRA’s citizen suits provision.

While under the KFC decision, property owners had an incentive to cleanup and then recover their costs, the Furrer decision alters this incentive dramatically, indeed it reverses it. Contaminated property owners will now want to evaluate potential claims against third-parties and bring them into the cleanup process at the outset, in particular if they intend to use RCRA’s citizen suit provision to do so. Such early evaluation becomes even more crucial when, as is typical, property owners are encouraged by state and/or local authorities to diligently proceed with a specific cleanup. The all-too-common scenario of contaminated property owners proceeding apace in conducting their cleanup and avoiding legal engagement or analysis may have the effect of removing recovery options for many such owners in the wake of the Furrer decision. A review of the relevant history of a property, former owners, and/or tenants, as well as appropriate legal review, may keep such options open.

Media Contact 

If you have a media request or need an attorney with particular knowledge for comment, please contact Susan Steberl, Director of Marketing, at 414.287.9556 or ssteberl@gklaw.com.

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