Washington Supreme Court Aligns MTCA Owner/Operator Liability with CERCLA

Fri May 25th, On Environmental Law, by

Many states have counterpart statutes to the federal CERCLA, or Superfund, statute.  Though these statutes generally have the same purpose: to ensure the cleanup of sites contaminated with hazardous substances and to allow for recovery of natural resource damages caused by those substances, and though most state statutes are “modeled” after CERCLA, many state statutes have specific statutory language or provisions that differ.  This is true of the State of Washington’s superfund statute modeled after CERCLA, the Model Toxic Control Act, or “MTCA.”   

On May 24, 2018, the Supreme Court of the State of Washington decided Pope Resources, LP v. The Washington State Department of Natural Resources.  At issue was whether Washington’s Department of Natural Resources (“DNR”) should have owner or operator liability, as defined by MTCA, over the contaminated Port Gamble Bay facility in Kitsap County, Washington. More specifically, the Washington Supreme Court addressed the question of whether MTCA’s definition of “owner or operator,” which differs from CERCLA’s definition, could cause a case to come out differently under MTCA than it would have under CERCLA. 

The Washington Appellate Court thought the differing statutory language made a difference.  Under CERCLA, an “owner or operator”—two of the groups of persons potentially responsible for cleanup costs and natural resource damages—is defined rather tautologically as “any person owning or operating” the facility. As such, Congress left it to the courts to provide more meaning to what exactly is and is not an owner or operator. Washington’s legislature, on the other hand, put a bit more meat on the definition of “owner or operator” in the MTCA statute, defining that term as “any person with any ownership interest in the facility or who exercises any control over the facility.”  The appellate court thought that distinction was significant: “although MTCA was modeled after CERCLA, the applicable provision here—namely, the definition of an ‘owner or operator’—is different,” and, thus, “holdings relying on an interpretation of CERCLA liability are not persuasive.” 

The appellate court held that DNR had owner liability (based on the broad “any ownership interest” language under MTCA) because DNR had some management rights—which the court found are part of the “bundle” of rights constituting ownership—over the facility.  And, it found operator liability (based on the broad exercisinganycontrol” MTCA language) because DNR “had authority to control the activities allowed on the aquatic lands within the Site and actually exercised that control.”

The Washington Supreme Court unequivocally disagreed.  Whereas the appellate court sought to separate MTCA from CERCLA based on the statutory language differences, the Washington Supreme Court, on multiple occasions, spoke of the strong connection: “[W]e recognize MTCA’s affinity with CERCLA”; “Contrary to the Court of Appeals’ view, MTCA follows CERCLA in defining who is liable for environmental contamination”; “MTCA was heavily patterned after CERCLA” and thus cases interpreting CERCLA are “persuasive authority” in MTCA cases.  As such, the Washington Supreme Court reversed the appellate court and, drawing from cases interpreting CERCLA, held that DNR did not have owner or operator liability.  The court found DNR held no real property rights (rejecting the appellate court’s “bundle” of rights analysis, which equated management to ownership) over the facility and was thus not liable as an owner.  And, drawing from the Bestfoods CERCLA case—which bases operator liability only on those who manage, direct, or conduct operations specifically related to pollution (not those that just manage land generally, as was enough for the appellate court under MTCA)—the Washington Supreme Court found that DNR had no operator liability either.

The Washington Supreme Court’s decision in Poperepresents strong authority supporting MTCA’s connection to CERCLA, even where the language of the statutes may differ, and it strengthens litigants’ ability to use CERCLA cases as persuasive authority in actions arising under MTCA.

The Washington Supreme Court case isPope Resources, LPv. The Washington State Department of Natural Resources, case no. 94084-3, 2018 WL 2347105 (Wash. May 24, 2018).  The underlying, now reversed, appellate decision can be found at 197 Wash. App. 409.

The Environmental Attorneys at Bick Law LLP will continue to monitor developments in environmental suits around the country.

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