July 30, 2021
The Environmental Claims Journal published a peer-reviewed article co-authored by McGuireWoods partner Gregory Hinojosa Evans. The technical article explored the basis for the allocation of remedial expenditures for the cleanup of a CERCLA Superfund site. The article “Allocating Remedial Expenditures at the East Helena Smelter Complex, MTUSA,” published June 25, 2021, discussed complex issues of allocation strategy in environmental cost recovery cases.
As noted in the article, Asarco LLC v. Atlantic Richfield Co. arose from a dispute over groundwater contamination from adjacent smelter complexes in East Helena, Montana, that were operated by Asarco and Atlantic Richfield Co. (ARCO). Asarco, represented by Evans, paid $111.4 million as part of its bankruptcy settlement to clean up the hazardous waste site and sought costs from ARCO under the Comprehensive Environmental Response, Compensation and Liability Act for contributing to the contamination. After ARCO denied liability, Asarco brought a civil action against ARCO for partial contribution and recovery of Asarco’s settlement to remediate the contamination.
Based on expert analysis, the trial court determined that ARCO was liable for 25 percent of the contamination. The 9th Circuit upheld the 25 percent allocation on appeal, and provided that future costs may also be recovered after they are incurred.
“While legal descriptions of allocations are plentiful ... there are few accounts ... of the technical basis behind trial deliberations leading to an allocated resolution of CERCLA (Superfund) claims in the scientific literature. This article describes ARCO’s fuming operation, contamination of soil and groundwater adjacent to its blasting furnace, and an allocation approach to the contaminated groundwater and potential liabilities, realizing that Asarco’s had been resolved as part of the bankruptcy proceedings in 2009,” the authors wrote.