Municipal Superfund Liability for the Disposal of Household Wastes

In general, the federal Superfund law imposes liability upon certain parties who have engaged in disposal activities related to so-called "hazardous substances." The definition of hazardous substances under the Superfund law is quite broad, but it was not clear until recently that the definition also included household wastes, which many municipalities pickup and dispose of for their residents. In addition, many municipalities also own and operate landfills into which household wastes are disposed. Thus, many municipalities may now face potential Superfund liability as a result of their disposal activities related to ordinary household wastes.

This new potential Superfund liability is the result of a federal appeals court decision, B. F. Goodrich Co. v. Murtha, which determined that 20 municipalities in Connecticut could be found liable under the Superfund law for a portion of the cleanup costs associated with two landfills. According to the Court's decision, the cleanup costs at issue were estimated to be approximately $50 million.

In B.F. Goodrich Co. v. Murtha, the Second Circuit Court of Appeals was asked to determine whether there was an exemption from Superfund liability for municipalities that had disposed of only household wastes. In that case, the United States Environmental Protection Agency, the State of Connecticut and several corporations brought suit under the Superfund law against the owners of two landfills located in Connecticut. The plaintiffs wanted reimbursement for past and future cleanup costs associated with the landfills. In turn, the defendant owners filed suit against approximately 200 others, including numerous municipalities, that had disposed of household wastes in the two landfills. The defendant owners recognized that household wastes generally contain only minimal amounts of hazardous substances. However, they claimed that was enough to impose Superfund liability upon the municipalities.

The municipalities argued that as a matter of law the disposal of household wastes did not subject them to Superfund liability. The argument presented by the municipalities was twofold. First, they claimed that household waste was exempt from the Superfund definition of hazardous substances. Consequently, they argued that since they did not dispose of hazardous substances, the Superfund law did not apply. Second, the municipalities argued that an exemption for household waste set forth in another federal environmental statute, the Resource Conservation and Recovery Act, shielded them from Superfund liability.

The Second Circuit Court of Appeals rejected both arguments. As to the municipalities' first argument, the Court noted that in the Superfund law Congress specifically exempted only two substances from the definition of hazardous substances — natural gas and oil —and that no other exclusions were provided. The Court acknowledged that household waste may contain only very small amounts of substances considered hazardous to the environment or human health. In the Court's view, nevertheless, the concentration of hazardous substances in household waste, regardless of how low the percentage, was simply not relevant to the question of liability under Superfund.

The Court next examined the municipalities' second argument and concluded that the narrow exemption for household waste in the Resource Conservation and Recovery Act in no way limited Superfund liability. According to the Court, to construe that exemption so that it also applied to Superfund would serve to frustrate the broad remedial purpose intended by Congress when it enacted the Superfund law. The Court, therefore, concluded that the municipalities could be found liable under the Superfund law as a result of their disposal of household wastes. The Court did note that the municipalities' liability would not be disproportionate or unlimited because courts have the authority under the Superfund law to allocate cleanup costs among liable parties. Nonetheless, the Court's decision in B. F. Goodrich Co. v. Murtha represents a broadening of the scope of municipal liability under the federal Superfund law. Consequently, municipalities that disposed of only household wastes into landfills contaminated with hazardous substances may now face Superfund liability.

October 1992 / Illinois Municipal Review / Page 9

Fortunately, municipalities may soon be receiving legislative relief from potential Superfund liability arising from the disposal of household wastes. Recently, the Senate voted to support an amendment to the Superfund law that would exempt municipalities that disposed of only household wastes at a site. According to the amendment supported by the Senate, if a municipality institutes a household hazardous waste collection program to prevent disposal of such materials in non-hazardous waste landfills, then private parties would not be allowed to sue the municipality for cleanup costs under the Superfund law. Only the United States Environmental Protection Agency would be allowed to bring suit; however, in such instances the amendment encourages the agency to reach settlements with municipalities. Further, it the agency did bring suit the amendment limits municipal liability to 4% of the total cleanup costs at any one site. The House has yet to act upon the amendment voted for by the Senate.

In sum, as a result of the Court's decision in B. F. Goodrich Co. v. Murtha, there are likely to be more suits against municipalities by parties seeking contribution towards Superfund cleanup costs. The good news is that a legislative solution may be right around the corner to protect municipalities from Superfund liability arising solely from the disposal of ordinary household wastes. •

Page 10 / Illinois Municipal Review / October 1992