Home » Case Summaries » 1995 » Washington State Department of Transportation v. Washington Natural Gas Co.


Washington State Department of Transportation v. Washington Natural Gas Co.



Washington State Department of Transportation (WSDOT) brought suit against Washington Natural Gas Company (WNG) and several other defendants to recover response costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The district court denied WSDOT its costs because it had failed to comply with the National Contingency Plan (NCP) as required by CERCLA.

While beginning construction of a new interstate highway system, WSDOT discovered a tar-like substance and reported it to the Washington State Department of Ecology (WSDOE). Soil samples obtained in an atypical way were tested and found to be “extremely hazardous waste.” WSDOE advised WSDOT that it might be able to obtain National Priority Listing (NPL) in order to get funding from the Superfund. WSDOT did not want to pursue this due to the extra time and effort entailed. WSDOT hired its own environmental consultant to investigate. However, during the investigation the consultant made several erroneous assumptions about whether a coal gasification plant and the tar by-product it produced had been removed. The consultant also failed to collect new samples and relied only on the original samples for its conclusions about the nature and extent of the contamination.

The consultant and WSDOT organized an interagency team to formulate an action plan. The team concluded that the only option was to move the tar to a hazardous waste facility in Oregon and to encapsulate the less-hazardous oily silt and sand in vaults on the site. By the time the cleanup was completed, the original estimates of the extent and nature of the contamination were found to be grossly underestimated.

Three issues were addressed by the court: 1) whether WSDOT is the “State” for purposes of section 107(a)(4)(A) of CERCLA;[1] 2) whether WSDOT’s actions were “not inconsistent” with the NCP; and 3) whether the defendants were entitled to attorney’s fees and deposition costs.

When a defendant is sued by the United States, a state, or an Indian tribe, section 107 places the burden of proving that the cleanup was consistent with the NCP on the defendant; however, when a defendant is sued by any “other person” seeking response costs, the burden is on that other party. Here, the burden of proof would be on WSDOT if the court determined that it was not the “State” under section 107, but on the defendants if WSDOT is the “State.” The defendants conceded that “State” includes state administrative agencies, but contended that the term only contemplates agencies authorized to implement removal or remedial action; for example, those agencies who act with EPA’s authorization. The district court agreed with the defendants. The Ninth Circuit, however, held that the wording of section 107 should not be limited in this manner because the defendant’s reading would create EPA authorization requirements for state cleanups where none otherwise exist. Therefore, the Ninth Circuit concluded that WSDOT qualified as the “State” for purposes of section 107, and thus the defendants had the burden of showing WSDOT’s inconsistency with the NCP.

Nevertheless, the court held that the district court’s ruling was harmless error because, even in light of the burden shifting, WSDOT clearly acted inconsistently with the NCP. The court noted that the defendants must show that WSDOT’s actions were inconsistent with the NCP based on the deferential abuse-of-discretion standard.

In comparing WSDOT’s actions with the NCP, the court’s initial task was to decide which NCP to use–the 1982 NCP that was in effect when WSDOT initiated its response, or the 1985 NCP that was in effect when ninety-five percent of the costs were incurred. The Ninth Circuit held that although the district court erroneously applied the 1985 NCP to the entire amount rather than the ninety-five percent applicable to it, the decision was harmless because WSDOT’s actions were inconsistent with both the 1982 and the 1985 NCP.

The Ninth Circuit held that WSDOT failed to follow the requirements of the NCP, noting its failure to accurately assess the nature and extent of the contamination, to adequately consider alternatives, and to provide public review and comment. WSDOT’s actions were therefore deemed to be arbitrary and capricious, and thus WSDOT was not entitled to recover its response costs.

The third issue on appeal was whether the defendants were entitled to attorney’s fees under Federal Rules of Civil Procedure (FRCP) 37(c), which allows for an award of attorney’s fees for failure to admit, and costs for depositions under FRCP 54(d), which allows for award of certain costs, including deposition costs, to the prevailing party. The court held that the district court did not abuse its discretion in denying the defendants those costs because “WSDOT could have reasonably believed that it had complied with the applicable provisions of the NCP.”

[1] Id.§ 9607.

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