CERCLA (Superfund) and State Hazardous Substances

Reed Smith's environmental team has garnered a wealth of experience under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") and equivalent state legislation at more than 100 sites with soil and groundwater contaminated with hazardous substances.  Our experience includes sites with:

  • Soil contaminated with volatile organic compounds, metals, asbestos, PCBs, mercury and other heavy metals.
  • Ground water and surface water contaminated with chlorinated solvents such as TCE, TCA or PCE, Perchlorate 1,4, Dioxane, NDMA, MTBE and Freon 113.

We have worked cooperatively with EPA and state agencies in the cleanup process, defended EPA and state cost recovery cases, handled precedent setting litigation with other responsible parties in allocating liability, advised clients with respect to liability avoidance and dealt with all these issues in unique circumstances.

Cleanup Process

Reed Smith's extensive experience includes guiding its clients through risk assessment, the hazard ranking process, NPL site listing, agreements to conduct remedial investigation and feasibility studies, records of decision and entry into administrative orders and consent decrees. 

Defense of Claims and Allocation of Liability

Reed Smith has defended numerous liability claims by EPA and state environmental agencies, conducted searches for responsible parties and their successors, proposed and suggested allocation schemes at sites with multiple potentially responsible parties and negotiated covenants not to sue, contribution protection and de minimis settlements for its clients. 

Reed Smith's experience with state hazardous substance laws includes cases under California's Carpenter-Presley Hazardous Substance Act, the Pennsylvania Hazardous Substances Sites Cleanup Act, the New Jersey Spill Act, the Illinois Environmental Protection Act, the Washington Model Toxics Control Act, the New York Inactive Hazardous Waste Disposal Site Act, the Michigan Natural Resources and Environmental Protection Act, the North Carolina Solid Waste Management Act, the South Carolina Hazardous Waste Management Act, the West Virginia Hazardous Waste Management Act, Wisconsin Environmental Protection Act.

Liability Avoidance

Almost every real property transaction requires an assessment of the subject property's environmental liabilities, including whether or not the property is contaminated by hazardous substances.  Reed Smith has represented buyers, sellers and lenders in these transactions.  Our services have included guiding sellers through the process of qualifying buyers as "bonafide purchasers" and "contiguous landowners" under the Small Business Liability Relief and Brownfield's Revitalization Act and state "buy/sell" agreements.  We help sellers protect their interest in cleanups and the scope of retained liability and advise lenders how to avoid environmental liability.

Precedent Setting Litigation

The Reed Smith Environmental team is responsible for some precedent setting CERCLA decisions.  Most recently the Environmental team successfully represented a client in the case of Morrison Enterprises et al. v. Dravo Corporation, 634 F.3rd 594 (8th Cir. 2011, cert den. October 3, 2011) in which the Eighth Circuit Court of Appeals held that a party who had incurred CERCLA response costs pursuant to administratively or judicially approved settlements or following an enforcement action under Sections 106 or 107 of CERCLA had to bring a contribution claim under CERCLA § 113(f).  This case resolved an issue of CERCLA liability left open by the Supreme Court in United States v. Atlantic Research Corp., 551 U.S. 128 (2007).  We also represented plaintiff Union Gas before the United States Supreme Court in the case of Pennsylvania v. Union Gas Company, 491, U.S. 1 (1989), which held that CERCLA, as amended by the Superfund Amendments and Reauthorization Act, clearly expressed an intent to hold states liable for CERCLA damages in actions brought by private parties.    

Reed Smith has also obtained a precedent-setting decision holding that CERCLA liability asserted by both the government and a number of private parties against a reorganized debtor more than a decade after the debtor emerged from bankruptcy could not be asserted because such liability was discharged in bankruptcy.  In the matter of Reading Company, 115 F.3d 1111 (3d Cir. 1997), held that the CERCLA liability of Reading Company to the United States for a site had been discharged by Reading's bankruptcy and that, as a result, contribution claims asserted against Reading under CERCLA § 113(f) failed as a matter of law.  The case demonstrates when and how companies reorganized in bankruptcy may avoid CERCLA liability asserted for pre-discharge acts and omissions.           

Some Unique Circumstances and Solutions

In bankruptcies Reed Smith's environmental team has helped Chapter 11 debtors arrange to isolate their liability post-bankruptcy for contaminated properties.

Reed Smith represented the Official Committee of Unsecured Creditors of ASARCO LLC in bankruptcy proceeding  where, inter alia, Debtor sought approval of five proposed Environmental Settlement Agreements covering more than 50 mining and/or smelting sites in 16 states.  Three of the Environmental Settlement Agreements relate to certain non-operating sites owned by the Debtor that are referred to as the Custodial Trust Sites because they are contained in three consent decrees and settlement agreements identified as the Custodial Trust Settlement Agreements .  These sites are located in 13 states, and the settlement agreements are between the Debtor, one or more federal and/or state governmental entities, and three trustees. Reed Smith, on behalf of the Committee,  argued that the Environmental Settlements Agreements were not fair, equitable or in the best interests of the Debtor's estate, and constituted an impermissible sub rosa plan.

Many of our clients have sought our assistance in resolving claims by the Army Corps of Engineers at sites once owned by the Department of Defense, but subsequently passed into private ownership.

Reed Smith helped pioneer EPA's Pilot ADR program.

We have been involved in unique remedies, including one in which the long-term remedy requires cooperation and coordination with two private water companies, a municipality that pumps its own water and a state agency created solely to address the site. 

In criminal cases Reed Smith's environmental team has worked with our criminal lawyers to defend clients charged with illegal disposal of hazardous substances. 

Additional Information

For information about specific sites and transactions where we have been involved or representative clients, please contact one of the lawyers linked to this practice description.