Federal Courts Might Force Superfund Reform

Commentary by H. Sterling Burnett

A recent federal court decision may have drastically altered the debate over renewal of the controversial Superfund law to clean up hazardous waste sites. How drastically? As Mike Oxley, chairman of the House Commerce Committee's Subcommittee on Commerce, Trade and Hazardous Materials, commented on the verdict, "If you want to know how this decision changes the Superfund landscape, go see the movie 'Twister.' Everything has changed." As everyone knows, when a twister hits, things are destroyed, and if this decision withstands expected appeals it will effectively wipe out Superfund.

The Superfund program is probably the greatest failure of all federal environmental undertakings. Even Democrats, when they are not trying to score political points by attacking the Republicans as environment destroyers, admit that Superfund needs a major overhaul. How badly has Superfund failed? It is the Environmental Protection Agency's (EPA) largest single project. Yet, despite cumulative federal expenditures of more than $30 billion over 15 years, of the over 1,300 sites listed on the National Priorities List for cleanup, only 97 sites have been taken off the list - and some among those were listed incorrectly in the first place. Many billions of dollars more have been spent by the private sector on Superfund. Unfortunately, very little of the money has actually gone to clean up hazardous waste sites. Instead, from 30 percent to 60 percent of the dollars spent on Superfund have gone for lawyers' fees and other transaction costs.

Among the most tragic aspects of Superfund's failure has been its creation of "brownfields" -- once-productive commercial sites now sitting abandoned because developers fear that they contain toxic waste and thus carry the burden of Superfund liability applied retroactively.

There are as many as 450,000 brownfield sites across the country. Ironically, Superfund, a law created to protect human health and promote environmental cleanup, has caused decreased inner-city employment opportunities and increased urban sprawl.

Brownfield redevelopment presents a win/win opportunity for virtually everyone. Community leaders are interested in returning brownfield properties to the tax rolls and increasing employment in economically depressed areas. Environmentalists want to preserve currently undeveloped greenfields, and to see existing contaminated sites made safe. The owners of brownfield sites want to see potential liabilities turned into assets.

Among the reforms necessary to make Superfund effective are substantial changes in Superfund's liability scheme and changes that give states authority over future Superfund decisions. These lie at the very heart of the District Court's decision.

Currently Superfund provides that the EPA can go after anyone who has ever contributed any material to a waste site -- even years after the fact and even if the action was legal at the time it took place.

In a potentially landmark decision, District Judge W. Brevard Hand of the Southern District Court of Alabama ruled that, due to recent Supreme Court decisions, Superfund liability can't be applied retroactively nor does the federal government have jurisdiction over waste sites that are not currently operating commercially. In U.S. v. Olin Corporation, Hand ruled that federal laws could not be applied retroactively unless the Congress clearly stated its intent to do so in the relevant statutes -- and Congress never explicitly stated that in the law. As much as 90 percent of Superfund liability could be affected.

Perhaps even more significant, Judge Hand also found that the contamination at Olin's facility doesn't warrant federal regulation for two reasons. First, because the plant stopped production in 1982, there is no ongoing economic activity at the site and so it is not engaged in interstate commerce as defined by the Supreme Court in U.S.. v. Lopez. Second, the EPA's own risk analysis concluded that the site poses threats only to people who might someday live on the property, and such property management issues are traditionally a matter of local jurisdiction. If this ruling stands, then the vast majority of the more than 1,300 federal Superfund sites currently listed would cease to fall under federal jurisdiction.

Republicans have long fought to reform Superfund's liability and federal/state responsibility provisions only to have their efforts thwarted by those who wish to use the Republican failure as a campaign issue in the upcoming elections. Sadly, Superfund reform has become mired in election year politics. Some legislators seem more concerned with winning seats in Congress than with producing bipartisan environmental reforms that would simultaneously protect human health and safety, help the economy and improve environmental quality.

Fortunately, the court's decision has given new life to the reform effort. The EPA anticipates that large numbers of parties to Superfund litigation will try to use it to gain exemption from liability, essentially destroying the federal Superfund program and reinforcing the need for a substantial rewrite of the law. Senator Robert Smith said "the ruling does not override our need for Superfund reform, but it certainly does our battle for fairness in liability some good." To quote a popular commercial, "Change is good!" In relation to Superfund, change could be Super!

This appeared as an op-ed in The Seattle Times, July 23, 1996.