Companies may be exposed to unexpected Superfund site cleanup costs beyond those agreed to in deals with the government. The Supreme Court granted review of a Montana Supreme Court’s decision that residents can sue BP America Ltd. for costs related to cleaning up their properties, even though the company already settled with the U.S. Environmental Protection Agency (“USEPA”) over cleanup of the site.

The Supreme Court will review: 1) whether the private resident’s claims are preempted by the Comprehensive Environmental Response Compensation Liability Act (“CERCLA”); 2) whether the residents’ lawsuit presents a challenge to the USEPA’s cleanup plan; and 3) whether the plaintiffs are “potentially responsible parties” meaning they need USEPA authorization before proceeding with remediation.

As to the first question for review, there are several states that permit restoration damages claims but no federal court of appeal or other state court has addressed whether CERCLA preempts that specific type of claim. Second, if the Court finds that the lawsuit presents a challenge to the USEPA’s cleanup plan, CERCLA would block the action; but if restoration damages are awarded it could mean that private parties can institute their own cleanup actions, which is troubling to the USEPA. The third question for review is an obscure part of the law.

The result of this case could affect the way that parties negotiate settlements for fear of future toxic tort cases. If the Supreme Court sides with the company, private cases will be harder to pursue and could impact whether a company decides to settle under CERCLA or another state regime. ff