September 26, 2022

Volume XII, Number 269

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September 26, 2022

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Maine Court Approves Consent Decree on Long-Running RCRA Suit, Rejects Request to Bar Future Claims

Consent decrees play a major role in environmental litigation. This week, Maine People’s Alliance v. Holtrachem Manufacturing Company, one of the nation’s longest-running cases under the Resource Conservation and Recovery Act’s (RCRA) citizen suit provisions, has essentially ended with a Maine district court’s entry of a consent decree negotiated between owners of a former color-alkali plant and two non-governmental organizations (NGOs).

The court’s order is available here. The decision illustrates a variety of points worth noting to the regulated community:

  • Environmental litigation can last decades. Though the court’s order here brings some finality to a case originally filed in 2000, the court explicitly rejected calls from the defendant to bar future claims related to waste disposal.

  • Courts can end up acting like regulators. In this case, the court found the defendant liable for the site, ordered a two-phase study of mercury in the river, appointed and oversaw a study panel, then ordered and oversaw an engineering study, and eventually encouraged and approved a consent decree to address the issues.

  • Finality in environmental cases often comes in the form of consent decrees which can be at least as complex as other closure methods. Here, the Consent Decree — which the court itself indicates is “a nuanced, complicated, and dense document” — funds four types of environmental projects in and around Maine’s Penobscot River basin at a cost of at least $187 million and up to $267 million if certain contingencies are met. These include:

    • Capping “roughly 130 acres of intertidal sediment” in the Orrington Reach of the Penobscot River at a cost of $50-60 million;

    • Spending $70 million dollars to dredge and remove mercury-contaminated mobile sediments from the river, at areas defined by an appointed trustee;

    • Remediation in a different area of the River in a manner to be determined at a cost of $30 million;

    • Providing at a minimum of $20 million in “Beneficial Environmental Projects” to offset past harms caused by mercury pollution and to generally improve environmental conditions along the Penobscot; and,

    • Committing a minimum of $10 million for long-term monitoring of the River, to occur for not less than 30 years.

Finally, in approving the Consent Decree, the court declined to issue the defendant’s requested bar order. After the parties had negotiated a settlement, the defendant initially requested an order in connection with the Consent Decree that would bar any future lawsuits on its past discharges. After meeting with state officials, among others, the defendant amended the requested bar order to carve out, thereby allow, claims brought by the state and federal governments. The plaintiffs—along with an industrial company operating around the River—opposed the bar order during the Consent Decree comment period. The court ultimately agreed with the plaintiffs and declined to issue the order.

Case Background

A series of industrial companies owned and operated a color-alkali plant on the Penobscot River in Orrington, Maine, from 1967 until 2000. The facility used significant quantities of mercury, and mercury-contaminated sludge was released from the plant to the Penobscot River as part of plant operations. In 2000, the NGOs sued two of these companies for violation of 42 USC § 6972(a)(1)(B), alleging that the companies had caused an “imminent and substantial endangerment to health and the environment” as a result of their discharges of mercury into the Penobscot River.

Beginning in 2000 and continuing until the proposed Consent Decree was filed, the following took place:

  • In 2002, the parties litigated whether materials in part released from the plant “may present an imminent and substantial endangerment to public health and the environment.” (This series of decisions resulted in appeals in 2002 (resolved in 2006), where the First Circuit fully affirmed the district court’s 2002 order.)

  • In 2003, even though an appeal of the court’s 2002 findings was pending, the court directed plant operators to fund a study assessing: (i) the extent of mercury contamination in the Penobscot; (ii) the need for and feasibility of a remediation plan to address any existing harm; and (iii) the elements and timetable for remediation of any harm.

  • In 2008, the study panel submitted its first report confirming that the Penobscot River was contaminated with mercury and posed a risk to wildlife and human consumers of fish and shellfish. The court adopted the report and ordered Phase II to proceed.

  • In 2013, the panel submitted its Phase II report, which recommended the establishment of a remediation program due to the continuing risk the mercury and methylmercury presented to both biota and human consumers. Over objections, the court adopted the report.

  • In 2014, the court held a bench trial to determine the next steps in light of the study reports. The court concluded that the Penobscot River “continues to suffer irreparable injury from ongoing mercury contamination caused by [the defendant].” The court ordered a Phase III engineering study.

  • In 2018, the court’s appointed expert submitted the Phase III report, which estimated the total cost of its remediation strategy to be between $246,068,000 and $333,378,000. Following receipt of this study and while preparing for a third trial on the remaining issues, the parties entered into settlement discussions that ultimately resulted in the Consent Decree.

The Court’s Analysis of the Consent Decree

Consent decrees in the RCRA context set forth a negotiated framework intended to address risks that past behavior (i.e., releases of waste) “may” pose an imminent and substantial endangerment to human health and the environment. Consent decrees can be controversial in the environmental context (see here). While the Consent Decree here is far-reaching, there was “‘consensus’ among the public commentators and parties’ experts ‘that this negotiated resolution is preferable to continued litigation and the cleanup should begin right away.’”  

In a context where there is broad support for an RCRA consent decree, a reviewing court conducts a “multifaceted” assessment of a proposed decree, weighing the decree’s likely effectiveness in addressing environmental issues; how the parties negotiated; whether the decree provides for “satisfactory compensation for anticipated remedial costs”; and whether the decree was designed to provide a remedy that “ameliorates” risk posed by past RCRA violations.

Here, the court found that the Consent Decree should be entered because the parties “engaged in three years of extensive negotiations” and achieved a settlement that embodies principles of “corrective justice and accountability” to create an “action-oriented path forward” where the court’s remedial decision making authority was transferred to a trustee. While limited appeal rights to federal courts would remain, the decree created a mechanism where the federal judiciary's role in monitoring mercury contamination in the Penobscot River “will essentially be over.” As the parties’ work moves into a remedial stage, “the federal court cannot be as nimble and creative as a private trustee,” and nimbleness was now required.

In the court’s view, the trustee was empowered to be a “remediation czar for the Penobscot River” with “an extraordinary degree of authority” over the river’s fate. The Consent Decree grants the trustee broad powers to formulate community relations plans and determine what remediation method would be employed in various portions of the estuary. While the parties and community would have the ability to comment on aspects of the decision making, the trustee was vested with nearly sole decision making power, including related to highly technical areas in which the parties themselves had never been able to forge a concrete compromise. The main checks required by the Court, in addition to those proposed in the decree, relating to rights of comment and financial audit. Outside of relatively minor tweaks, the court determined that the proposed consent decree was largely reasonable.

Why the Court Rejected a Bar on Future Claims

Seeking finality, the defendant requested that the court, in approving the proposed Consent Decree, also enter a bar order preventing any future claims against the defendant in connection with the Penobscot River site (except for specified claims brought by certain governmental organizations). Although the court concluded that it did have the authority to issue the bar order, it refused to do so, expressing skepticism that the proposed bar order was “either necessary or appropriate.”

First, after noting that other courts have issued such orders in Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) — but not RCRA — litigation, the court ultimately rejected the defendant’s main argument: that it should be granted future protection because it was willing to pay a substantial amount to remediate the Penobscot River. Noting that the negotiated amount is substantially below the defendant’s full potential exposure, the court rejected this basis for a bar.

Second, the court expressed concern that any bar order could result in inequity. For example, if the defendant later sought contribution under CERCLA from other potentially responsible parties (PRPs), those non-party PRPs would be barred from bringing affirmative claims against the defendant. But if the court were to carve out an exception allowing such PRPs to bring claims against the defendant, that would protect only “asset-heavy businesses,” leaving private citizens still constrained by the bar order. The court was “chary indeed about issuing an order which so starkly favors the powerful and disfavors the interest of the common citizen.”

Third, the court drew parallels with Taylor v. Sturgell, explaining that there may be parties whose unique interests were not adequately represented by plaintiffs. The court was wary to “deny them their day in court without knowing who they are or the nature of their claims.”

Finally, the court explained that the proposed bar order would bar claims brought about by the remediation efforts themselves. Considering “not only whether things will go right, but also whether they will go wrong,” the court held that entry of the “broad order precluding future remediation claims is inappropriate and potentially unenforceable for due process and policy reasons.”

© 2022 ArentFox Schiff LLPNational Law Review, Volume XII, Number 223
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About this Author

J. Michael Showalter, Litigator, Schiff Hardin LLP
Associate

Mike Showalter is a litigator whose practice is focused on resolving complex disputes. Mr. Showalter's past clients span diverse industries including manufacturing, mining, power generation and transmission, oil and gas, the financial and insurance sectors, and process outsourcing.

Mr. Showalter's practice has focused on distilling complicated technical information into a format where it can be understood by decision makers. He has worked with experts in fields including medicine, economics, history, physical sciences, industrial hygiene, toxicology, environmental engineering and...

312-258-5561
Associate

James has experience working on complex litigation, consumer fraud, and environmental matters and assisting on government investigations. He has drafted memoranda, briefs, and court orders, and has experience managing contracts for private businesses. Prior to joining the firm, James worked with the Civil Litigation Clinic at the Sandra Day O’Connor College of Law, drafting motions, interviewing and counseling clients, conducting discovery, and representing clients through mediation and settlement.

Before attending law school, James served as an Infantry Officer in the United States...

312.258.5616
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