Is It Remedial or Removal — The Distinction Is Critical in Determining the Statute of Limitations for Actions under CERCLA

Under CERCLA activities to clean up hazardous substances are characterized as either “removal actions” or “remedial actions.”  Generally, removal actions are interim actions to clean up or remove hazardous materials.  42 U.S.C. § 9601(23).  Remedial actions are efforts to permanently remedy the presence of hazardous materials.  Id. § 9601(23).  A claim to recover damages for a removal action must be brought within three years after completion of the removal.  Id. 9613(g)(2)(A).  A claim to recover damages for a remedial action must be brought within six years after “initiation of physical on-site construction” of the action.  Id. § 9613(g)(2)(B).

As the Court noted in Asarco v. Atlantic Richfield, 73 F. Supp. 1285 (D. Mont 2014) CERCLA is “not a model of legislative draftsmanship” and the distinction between what constitutes a “removal action” versus a “remedial action” has sparked a great deal of litigation.  Two recent district court decisions shed light on this question.  In California River Watch v. Fluor Corporation, 2015 WL 5970175 (N.D. Cal. October 14, 2015), the former tenant of a contaminated site that had incurred costs to respond to the contamination brought a cost recovery action against the current owner of the site. The current owner asserted a variety of defenses to this claim including that the claim was barred by the six-year statute of limitations for remedial actions.

Specifically, the current owner asserted that the actions by the former tenant of drilling injection wells and soil vapor extraction points with respect to the contamination and spreading asphalt over some contaminated soil at the site constituted “initiation of physical on-site construction” of a remedial action and triggered the applicable six-year statute of limitations for “remedial actions.”  In response to a motion by the former tenant seeking a ruling that this defense was frivolous, the Court noted that these activities predated the adoption of a remedial action plan and that in the Ninth Circuit “the initiation of physical on-site construction of the remedial action can only occur after the final remedial action plan is adopted.”  Therefore, the activities by the former tenant did not trigger the six-year statute of limitations for remedial actions and the current owners’ affirmative defense in that regard was frivolous.

In Drilling Envtl. Eng’g, Inc. v. Gamblin, 2015 WL 6123070 (N.D. Cal. Oct. 19, 2015) an intervenor sought dismissal of the plaintiff’s cost recovery claim on the grounds that the claim was barred by the six-year statute of limitations for remedial actions.  The intervenor argued that activities including groundwater sampling and preliminary investigative work to evaluate the scope of contamination at the site constituted the initiation of on-site remedial actions and triggered the six-year statute of limitations. The Court found that work done to investigate the scope of contamination and develop a solution is not the same as the “initiation of physical on-site construction” of a remedial action. Therefore, the Court allowed plaintiff’s cost recovery action to proceed.

Under these holdings it is clear that, at least in the Ninth Circuit, activities undertaken prior to the adoption of a final remedial action plan and preliminary investigation work and the development of a response plan are not “initiation of physical on-site construction” of a remedial action.  However it should be noted that a party may initiate a cost recovery action any time after the party has incurred “necessary costs of response [which includes costs of a removal action and costs of a remedial action] . . . consistent with the national contingency plan.” 42 U.S.C. § 9607.  Given this and the length of time that it normally takes for a CERCLA action to proceed through the judicial process, a party that has incurred the required response costs might consider bringing a cost recovery action within six years after the incurrence of these costs to avoid any potential statute of limitation argument with respect to a “remedial action.”