Until recently, most companies would not have understood “disposal” to apply to their emissions of hazardous substances into the air. However, a recent court case sought to expand the definition to impose liability for contamination resulting from a company’s air emissions. In Pakootas v. Teck Cominco Metals Ltd. (Teck), the plaintiffs argued that Teck should be held liable for disposal under CERCLA as a result of its air emissions. The U.S. District Court for the Eastern District of Washington agreed. Fortunately for companies with air emissions, the Ninth Circuit overturned the district court’s holding, returning CERCLA to its more narrow scope.

A company can be held liable under CERCLA if it owns or operates a facility where a disposal of hazardous substances has occurred (or formerly owned or operated the facility at the time of the disposal); if it transports hazardous substances for disposal; or if it arranges for disposal. CERCLA incorporates the definition of “disposal” from the Solid Waste Disposal Act (RCRA), which defines “disposal” to mean discharging or placing solid or hazardous waste “into or on any land or water” such that solid or hazardous waste “may enter the environment or be emitted into the air or discharged into any waters.”

Teck’s smelter in Trail, British Columbia, emitted certain hazardous substances including lead and mercury compounds through a smokestack, and those compounds were carried downwind and eventually deposited by the wind onto land and water. These facts were not in dispute. But Teck could only be held liable under CERCLA for the costs of cleanup for the land and water where the materials came to rest if it arranged for the disposal of those materials. Teck had moved to strike the plaintiffs’ claims on the grounds that its discharges were not “disposal” because they were emitted into the air rather than directly deposited into or on any land or water, but the district court denied Teck’s motion, reasoning that disposal occurred when hazardous substances “came to a point of repose” at the site.

One month after the district court’s ruling, the Ninth Circuit decided in Center for Community Action and Environmental Justice (CCAEJ) v. BNSF that emissions of diesel particulate matter in exhaust from railyards did not constitute “disposal” within the meaning of RCRA. It reasoned that the definition under RCRA does not plainly state that emissions “into the air” are within its scope, and are instead regulated under the Clean Air Act. Teck asked the district court to reconsider its decision in light of CCAEJ, but it again ruled against Teck on the grounds that “disposal” occurred in the first instance on the land or water of the contaminated site.

On appeal, the Ninth Circuit ruled in Teck’s favor, noting that CCAEJ involved essentially the same facts in that it alleged emission of hazardous substances into the air. Significantly, it reasoned that the plaintiffs’ interpretation was problematic because “if ‘aerial depositions’ are accepted as ‘disposals,’ ‘disposal’ would be a never-ending process, essentially eliminating the innocent landowner defense.” It also cited prior case law holding that “‘[n]othing in the context of the statute or the term ‘disposal’ suggests that Congress meant to include chemical or geological processes or passive migration,’ i.e., the gradual spread of contaminants without intervention.”

The Ninth Circuit’s Pakootas decision confirms that CERCLA liability will not apply to emissions of hazardous substances into the air. Rather, such emissions (and any liability for such emissions) will be considered under the Clean Air Act. This is the result we would have anticipated prior to the district court’s decision, and the result that seems in line with CERCLA’s language and intent.

Pakootas addressed emissions from a smelter operation, but the implications for the coal industry could be enormous. Any company with air emissions that might deposit “contaminants” on the ground or in water (including coal fines) could face the issue of whether the company’s air emissions trigger CERCLA liability.

While mining and industrial operations across industries may have dodged a bullet with the Ninth Circuit’s holding, it may not entirely foreclose such sources’ liability for airborne emissions. First, the decision arguably only extends to activities that are regulated under the Clean Air Act, so companies should limit their risk of CERCLA liability by ensuring that all sources of air emissions are covered by an air permit. Second, Pakootas is only the law in the Ninth Circuit, and is not binding in other courts, so a similar case could have a different outcome in other, coal-rich areas of the country. And finally, both the United States and the California Department of Toxic Substances Control filed briefs before the Ninth Circuit in support of the plaintiffs arguing that CERCLA jurisdiction was necessary to address contamination caused by industrial operations that emit hazardous substances into the air and fall to the ground, which may indicate that federal and state agencies will attempt to expand CERCLA liability to cover actions previously thought to be outside the scope of CERCLA actions.

A subsequent decision by the Ninth Circuit overruling or limiting Pakootas or a decision by a different circuit finding that such emissions do constitute “disposal” would have wide-ranging implications and trigger a new round of attacks on the coal industry by environmental groups. Companies and associations would be well advised to monitor litigation and be prepared to intervene or file amicus briefs supporting Pakootas.

Ali Nelson is senior counsel in the Denver, Colorado, office of Husch Blackwell LLP. She can be reached at ali.nelson@huschblackwell.com.