Natural Resource Damages

Overview

The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund), the Clean Water Act, the Oil Pollution Act, and similar state statutes impose liability not only for cleanup costs, but also for natural resource damages (NRD).  The NRD claims that can be brought by federal and state trustee agencies and tribal governments differ greatly from the removal and remedial action claims brought by EPA and state response agencies.  Beveridge & Diamond, P.C. has been in the forefront of efforts to help clients resolve potential NRD liability, with a particular focus on contaminated sediment sites in rivers, bays, and estuaries containing substances such as PCBs, heavy metals, PAHs, and dioxins/furans.  We also help our clients with NRD liabilities arising from contaminated groundwater, wetlands, and soils.  Sediment and groundwater sites typically raise complex legal, technical, economic, and political issues associated with both remediation and NRD.  Our focus is on helping clients plan and execute cost-effective strategies that address these issues in an integrated fashion, while being attentive to the needs of their ongoing businesses.

Full Description

Federal natural resource damages claims have been most prevalent with respect to rivers, lakes, estuaries, harbors and other sites involving sediments that contain persistent hazardous substances like polychlorinated biphenyls (PCBs) and other chlorinated compounds, polyaromatic hydrocarbons (PAHs), and heavy metals.  State natural resource damages claims have tended to focus on contaminated groundwater.  We have helped clients develop strategies for rebutting inflated damages claims and for dealing with both cooperative and uncooperative federal, state, and tribal natural resource trustees.  We also work closely with technical experts to understand the ramifications of alleged natural resource injuries and the strengths and weaknesses of the methodologies available for quantifying and valuing damages claims.

We have grappled with most of the important legal issues that arise in natural resource damages cases. These include the scope of federal, state, and tribal trusteeship; how to handle the competing claims of federal and state trustees concerning the same resources; relevant statutes of limitation for CERCLA and Clean Water Act claims; and issues of causation, “baseline,” and various other defenses.  But legal issues are often dominated by larger strategic issues, such as whether to cooperate with any trustees, attempt early settlement, await (or promote) the development of critical technical or economic information, or lay the foundation for future litigation.

We have helped clients negotiate and resolve potential liability for NRD at many sites, including the Lower Fox River and Bay of Green Bay in Wisconsin, the Malone Service Company Site in Texas, Lake Hartwell in South Carolina and Georgia, the Grand Calumet River in Indiana, the Saginaw River and Bay in Michigan, the Crab Orchard National Wildlife Refuge in Illinois, and Waukegan Harbor in Illinois.  We are continuing to assist clients concerning several other major river and lake systems in the Northeast, Midwest, and South, including the St. Lawrence River in northern New York, the Tittabawassee River in Michigan, and the Calcasieu Estuary in Louisiana.  Beveridge & Diamond also represented a major oil company in litigation with the NJDEP regarding a claim for natural resource damages arising from groundwater contamination.  The Firm also has closely followed the rulemakings of the Department of the Interior (DOI) and the National Oceanic and Atmospheric Administration (NOAA) concerning natural resource damages assessment, and represented two clients in Kennecott Utah Copper Corporation v. U.S. Department of the Interior , 88 F.3d 1191 (D.C. Cir. 1996), which involved a challenge to the DOI natural resource damage assessment rules.  We also periodically work with the natural resource damages coalition that is seeking CERCLA reform in Congress and that continues to pursue improvements within the federal trustee agencies.

Representative Matters
Representative Matters
  • Lower Fox River and Bay of Green Bay, WI:   Beveridge & Diamond helped a major paper manufacturer develop a long-term strategy to manage response action and NRD liabilities associated with historical releases of PCBs to the Lower Fox River and Green Bay.  As part of that strategy, we negotiated various agreements with the State and EPA for response and NRD activities.  In 2000, we negotiated a State-only settlement of NRD claims, and by 2002, we had helped the client complete a global settlement with the federal, tribal, and state natural resource trustees that resolved all NRD claims associated with the river and bay for about $11 million in habitat acquisition and restoration projects and human use enhancements and $1.5 million for reimbursement of assessment costs.
  • Saginaw River and Saginaw Bay, MI:   Beveridge & Diamond helped a major automobile manufacturer settle state and federal response action and NRD claims arising from the presence of PCBs in Saginaw River and Saginaw Bay sediments and biota.  The state had initiated an NRD lawsuit due to statute of limitations concerns; the federal trustees and EPA were brought into the settlement for a global resolution of response action and NRD claims relating to the river and bay.  The final settlement included several components, including $10 million of dredging and about $18 million of land acquisition and other resource restoration projects.
  • Tittabawassee River, MI :  We are helping a large chemical company address multiple issues arising from contaminated sediments and floodplains along more than 30 miles of river in Michigan.  We helped the company develop an overall strategy to address response action and natural resources damages issues, and among other activities, negotiated a detailed cooperative natural resource damages assessment agreement with federal and state natural resource trustee agencies that is now being implemented.  
  • Grand Calumet River, IN:   We helped a leading steel producer evaluate its potential liability and negotiate a settlement among federal and state trustee agencies, EPA, and other potentially responsible parties that resolved state and federal NRD claims and potential EPA response action claims associated with the Grand Calumet River and Indiana Harbor Canal.  As part of a group settlement, the client was able to “cash out” of further responsibility in exchange for a payment over time of about $20 million.
  • St. Lawrence River, NY:   Beveridge & Diamond has assisted neighboring facilities with regard to NRD issues arising from historical releases of PCBs and other substances to the St. Lawrence, Raquette, and Grasse Rivers, near the lands of the St. Regis Mohawk Tribe.  We negotiated a funding and participation agreement with the natural resource trustees in 1990 that was one of the first of its kind in the country, and we are advising our client with respect to an unusual cooperative process with the trustees to evaluate specific natural resource damages issues. 
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