Is Compliance a Defense to Contamination Claims?

April 2, 2018
Legal Stream

About the author: Dan Kucera is a partner in the law firm of Chapman and Cutler, 111 W. Monroe St., Chicago, Illinois 60603-4080, (312) 845-3000.

An interesting question for both water and wastewater utilities concerns the potential pre-emptive or defensive effects of compliance with the federal Safe Drinking Water Act (SDWA) and the federal Clean Water Act.

For example, under the SDWA, various "contaminants" are regulated by U.S. EPA. If a water utility complies with parameters for all regulated constituents, can it still be subject to a claim of contamination from unregulated contaminants or even from a claim for contamination from regulated constituent parameters with which it is in compliance? Or, if a wastewater utility is in compliance with its NPDES permit, is it still subject to pollution claims for constituents not covered by the permit or even for constituents identified in its permit for which it is in compliance? Distilled to its essence, these questions present a "preemption" issue-does a federal law regulatory scheme preempt state law claims?

A recent Louisiana federal court decision discusses this issue under a different but possibly analogous factual setting. Mongrue v. Monsanto Co., 14 ERC 1622 (E.D. LA. 1999).

Plaintiffs owned property that is adjacent to property owned by Monsanto. Louisiana permits the disposal of wastewater into underground injection wells under permitting and regulation by the state Commissioner of Conservation.

Monsanto obtained a state permit for several underground injection wells on its property for disposal of wastewater. Plaintiffs alleged that wastewater from the injection wells migrated to their property and that the wastewater contained hazardous waste or toxic materials. Plaintiffs sought relief under several theories.

Trespass. Plaintiffs asserted that subsurface migration of wastewater onto their property was an unlawful trespass. Monsanto responded that a temporary migration of a discharge authorized by permit cannot constitute a trespass.

The Court held that plaintiffs were entitled to pursue a claim for trespass, although they "have the burden of demonstrating that the migration of wastewater interfered with a reasonable and foreseeable use of their property." Id. at 1625.

Louisiana has adopted the concept of "unitization," or drilling unit. This concept, when designated by the state for a particular area, supercedes individual property rights to establish a common interest in a reservoir of natural resources below adjacent tracts of land. Id. at 1624. The Court found that plaintiff's property had not been unitized and, therefore, the boundaries between their property and Monsanto's remained intact.

The Court concluded that the state "may supercede individual property rights and preclude actions for trespass by an act of unitization because it alters land boundaries; but absent unitization, the Commissioner does not necessarily bar claims of trespass when authorizing the disposal of waste through underground injection wells."

Taking. Plaintiffs asserted that subsurface migration was an unconstitutional taking of their property for which they were entitled to just compensation. Monsanto asserted that there was no taking.

The Court agreed with Monsanto. "Defendant cannot be liable for a taking under Louisiana law, however, because it is not a private entity authorized by Louisiana law to expropriate private property for a public and necessary purpose." Id. at 1625.

Unjust Enrichment. Plaintiffs claimed that the storage of wastewater in their substrata unjustly enriched Monsanto. In its response, Monsanto asserted that plaintiffs' claim was inappropriate.

The Court agreed with Monsanto. In Louisiana, "unjust enrichment" is described as "a person who has been enriched without cause at the expense of another person is bound to compensate that person." Id. at 1626. Unjust enrichment is an equitable remedy available under state law only when a party has no adequate remedy at law. The Court concluded that since the law provides a viable trespass remedy, plaintiffs were not entitled to a claim of unjust enrichment.

Preemption. Monsanto asserted two global arguments why any claim by plaintiffs should be precluded. The defendant argued that all claims were preempted by the federal SDWA, which mandates regulations for underground injection control programs. Preemption of state law claims occurs, Monsanto stated, because the SDWA specifically authorizes use of underground injection wells.

The Court rejected the preemption argument by distinguishing the use of injection wells from migration from the wells. "[T]his complaint does not confront the wisdom of the SDWA or the Commissioner. . . . [Plaintiffs] do not challenge the regulatory scheme authorizing the use of injection wells established by the SDWA. Therefore, plaintiffs are not preempted by federal law from bringing their claims." Id.

Collateral Attack. Monsanto's second global argument was that plaintiffs' claims were barred as an improper collateral attack on the state permit granted to operate the injection wells.

The Court rejected this argument because there was no evidence that, in the permit proceeding, the Commissioner considered the potential for subsurface migration of defendant's wastewater onto plaintiffs' property. Id. at 1627.

In the end, this case comes down to a conflict between a state law claim for trespass versus a defense of preemption under the SDWA regulatory scheme. Trespass cannot be a viable state claim unless the preemption argument is rejected.

The Court's discussion of the preemption argument is brief and really does not focus on the more traditional elements of preemption such as whether Congress intended to preempt the subject of underground injection control by means of the SDWA, 42 U.S.C. 300f, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq. and U.S. EPA's regulations under the SDWA, 40 CFR Part 144. Indeed, it could be argued that U.S. EPA's regulations provide a comprehensive scheme for regulation of injection wells, including provisions for corrective action to prevent migration. See 40 CFR Û144.55.

For water and wastewater utilities, this decision perhaps is more of an alert than helpful precedent. While it may not provide useful answers to the preemption issue, at the very least it stands as notice that this issue likely will be confronted in the future.

About the Author

Dan Kucera

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