WHO WILL PAY FOR THE
PORTLAND HARBOR CLEANUP?
Presented by
Joan P. Snyder
900 SW Fifth Avenue, Suite 2600
Portland, Oregon 97204
(503) 224-3380
jpsnyder@stoel.com
1
“Although the Portland Harbor was designated a
federal Superfund site so that polluting businesses
would be forced to pay for decades of environmental
neglect, evidence increasingly suggests that
taxpayers could foot most of the bill.”
--The Business Journal, 2/8/02
2
“***[The federal Superfund process] will get to the
bottom of who is responsible for damage to the
harbor and who will have to pay for its cleanup.”
--Letter to the editor of The Oregonian, 2/1/02
3
Who IS responsible for damage to
the harbor and, therefore,
who SHOULD have to pay for its
cleanup?
4
The Question is for:
Federal and state regulators
Potentially liable parties (performing
and non-performing)
Federal and state legislators
The public

Or it is ultimately for
Judges and/or arbitrators of Portland
Harbor CERCLA claims
5
General CERCLA Principles
“Liable Parties” under CERCLA section
107(a) include:




Current owners and operators;
Owners and operators of any vessel or facility at
the time of the disposal of hazardous substances;
Any person who arranged for the disposal or
treatment of the hazardous substances; and
Transporters who selected the waste disposal
location from which there has been a release
6
Portland Harbor History
1851
1868
—
—
1911
—
1917-19 —
City of Portland chartered
Dredging of Willamette to
accommodate shipping begins
(and continues through present
day)
Oregon Board of Health declares
lower reaches of Willamette River
an “open sewer” and fish from
those areas unsuitable to eat
176 WWI ships built in Portland
Harbor
7
Portland Harbor History
1930
—
1936
—
1940
—
1942-45 —
Oregon State Sanitary Authority
declares the Willamette a “menace
to health”
Oregon State Sanitary Authority
bans swimming in the lower
Willamette
67 separate wharves or port
terminals operated in Portland
Harbor, including lumber, oil, grain,
iron & steel, cement and municipal
terminals
Over 600 WWII ships built in
Portland Harbor
8
Portland Harbor History
1951
—
1972
1972
1977
—
—
—
first sewage treatment plant built
on Willamette River
Clean Water Act goes into effect
DDT production banned
PCB production banned in U.S.
9
Portland Harbor History
1997
—
Willamette River Basin Water
Quality Study releases its report
card:
●
Upper Reach (above
Corvallis): Good health
●
Salem Reach: Marginal
health
●
Newberg Pool: Marginal to
poor health
●
Tidal Pool (Willamette Falls to
Columbia): Marginal to poor
health
10
Portland Harbor History
— EPA sponsored sediment study in
Portland Harbor (Weston Study)
finds broad range of
contamination, including
polycyclic aromatic hydrocarbons
(“PAHs”, which are constituents of
bunker fuel, diesel, oils and other
petroleum products), metals, PCBs
and pesticides
12/1/2000— Portland Harbor listed as federal
Superfund Site.
1997
11
Effect of Population on Riparian Habitat?
4
100
(2000, 3.8 million)
(1850, 100%)
3
75
Oregon
Population
(millions)
Percentage Favorable
Riparian Habitat
2
(1960, 1.8 million)
1
50
25
(2000, 20%)
(1900, .4 million)
0
0
1850
1900
1960
2000
Year
12
Trends
1870-present:

Port capabilities crucial to Portland’s (and
Oregon’s) economic health; Portland the
foremost port for grain exports on the west
coast
1965-77:

300,000+ cubic yards per year dredged from
Portland Harbor navigation channel and placed
primarily upland in Portland Harbor vicinity.
During same time, 32 berthing areas require
annual maintenance dredging, estimated at over
100,000 cubic yards per year (data not found pre1965 or post-1977).
13
Trends
1972-present:

Consistent with Clean Water Act, level of
contamination in all discharges to Willamette
reduced, probably exponentially as compared to
prior decades
Future:

Willamette Basin’s population is expected to
double in next 50 years, “with most growth
occurring in cities.”
14
Ownership of Portland Harbor
(bed, banks and beyond)
Oregon Division of State Lands owns the bed
of the Willamette River to the ordinary low
water mark
DSL has asserted ownership by requiring
lease payments for all overwater structures
Ownership of adjacent lands (and operations
thereon) are currently, and have been
historically, in hundreds of separate entities
and individuals
15
“Pool” of Potentially Liable Parties
State of Oregon
United States
10 entities that have signed the
Administrative Order on Consent with EPA
59 entities identified by EPA and DEQ who did
not sign the AOC
??? individuals and entities that have
operated on the waterfront over the years
16
“Pool” of Potentially Liable Parties
??? individuals and entities that have
operated back from waterfront, but whose
contamination has run into the Willamette
River
Everyone who has “released” contaminants
in sanitary or storm sewage to the Willamette
River, except under conditions where the
release was subject to (and not in violation
of) a “federal permit”
17
Costs to be Allocated
RI/FS: Costs of Remedial Investigation/Feasibility Study
Being Performed by Lower Willamette Group (“LWG”)
for EPA
Governed by terms of Administrative Order on
Consent (“AOC”)
AOC Statement of Work: “EPA will consider issuing
orders to obtain participation of additional PRPs as
the RI/FS proceeds.”
AOC signatories will likely sue in contribution
under CERCLA section 113 to recover these costs
from other liable parties (and advocate for a
“recalcitrance” premium)
18
Costs to be Allocated
RD/RA: Costs of Remedial Design/Remedial Action to
be performed after EPA issues Record of Decision
selecting remedy
EPA will “invite” parties to sign Consent Decree to perform
RD/RA
If parties sign, they will perform and likely sue nonperformers
If parties don’t sign, EPA will either: (1) sue to require
parties to perform or (2) perform and sue to recover
Under any scenario, if not resolved otherwise, costs will be
equitably allocated by judge pursuant to CERCLA and state
law.
19
Costs to be Allocated
NRD: Costs of Restoration/Replacement of Natural
Resource Damages (“NRD”)
NRD Trustees responsible for performing NRD
Assessment
NRD Trustees have obligation to secure NRD
restoration or replacement to compensate for NRD,
either by settlement or by suit.
Under any scenario, ultimate allocation of liability will
be pursuant to CERCLA and state law.
20
Legal Issues
“Joint and Several” Liability
Legal effect of action by EPA under CERCLA
section 106 or 107, but not directly applicable
in a contribution claim under CERCLA section
113.
Defines parties whom EPA can compel to
perform RI/FS and/or RD/RA (irrespective of
their “share” of liability) or sue for
reimbursement if EPA undertakes the remedy.
21
Legal Issues
“Joint and Several” Liability
Caselaw summary:



Parties have begun to challenge the application of
“joint and several” liability for large, complex sites.
Courts thus far have upheld EPA’s discretionary
designation of “facility,” and concluded that PRPs
are jointly and severally liable to perform remedy
for entire facility.
Courts may refuse to apply joint and several
liability on entities releasing “miniscule” amounts
of contaminants (e.g. if, alone, that contamination
would not have required remediation—Kalamazoo
River Study Group).
22
Divisibility
Mechanism to divide portion of remedy for
which parties are liable
Two primary bases for divisibility:


Geographic
Type of contaminant/type of remedy/type of harm
In either case, need reasonable basis for
determining contribution of each divisible
harm
23
Divisibility
Chem-Nuclear Systems, Inc.:

Government must make prima facie case
to show PRP caused harm in geographic
area of site and then burden shifts back to
PRP to disprove that inference.
24
Orphan Share
Two types of Orphan Share:
Insolvent Orphans
 Orphans who are solvent, but not at table

25
Orphan Share
Legal framework:

Gould Electronics v.NL Industries, (USDC Or
1995): A party who is “liable” under CERCLA
section 107 cannot bring a “pure” section 107
claim, but must bring a “hybrid” claim for
contribution under CERCLA section 113(f).
Consequence:

If EPA performs, it will have direct section 107
claim with presumption of “joint and several”
liability, which would then be subject to allocation
under section 113. If PRPs perform and sue,
likely to be limited to 113(f) claim for contribution,
where allocation is “equitable” and “joint and
several” may not apply.
26
Orphan Share
Caselaw Summary:



Courts have thus far still “equitably” distributed
insolvent orphan share among liable solvent PRPs
(e.g. Pinal Creek)
“Equitable apportionment” will include decision on
appropriate method of allocation of the insolvent
orphan share (e.g. Pinal Creek, Centerior Service
Co.)
It may be appropriate to allocate insolvent orphan
share to only certain (i.e. similarly situated) PRPs
(e.g. US v. Consolidation Coal Co.)
27
NRD Damages and Trustee’s
Burden of Proof
42 U.S.C. § 9607(a)(4)(C): For any
party otherwise liable for a “release”
under 42 USC 9607, creates liability for
“damages for injury to, destruction of, or
loss of natural resources, including the
reasonable costs of assessing such
injury, destruction or loss resulting from
such a release ***.”
28
NRD Damages and Trustee’s
Burden of Proof
United States v. Montrose Chemical
Corp. of California: To prevail on any
claim for recovery for injury to natural
resources under § 107(a)(4)(C), the
plaintiff must establish that the
defendant’s release was the “sole or
substantially contributing cause of each
alleged injury to natural resources.” But
see, In re National Gypsum Co.
29
NRD Damages and Trustee’s
Burden of Proof
42 U.S.C. § 9607(f)(1):

“There shall be no recovery under the authority of
subparagraph (C) of subsection (a) where such
damages and the release of a hazardous
substance from which such damages resulted
have occurred wholly before the enactment of this
Act [Dec. 11, 1980].”
United States v. Montrose Chem. Corp. of
Cal.:

Section 9607(f)(1) bars recovery for natural
resource damages only when both the release
causing the damage and the accrual of damages
ended before CERCLA was enacted.
30
6. Damaged
natural
resources
5. Surface water
discharge
2. Near Shore
contamination
What May
Need to be
Remedied
3. Depositional
area
4. Upland
source
soil
1. Navigation
channel