RICHMOND, Va. (CN) — The Fourth Circuit gave a poor forecast to Dow Chemical on Tuesday as its attorney struggled even to complete a sentence about a lawsuit the company faces from West Virginia State University over groundwater pollution on campus.
After the school sued Dow nearly five years ago in Kanawha County Circuit Court, Dow removed the case to federal court but only briefly. U.S. District Judge John Copenhaver sent the case back to state court last year with particular attention to the state permit for corrective action regarding the groundwater pollution.
Copenhaver said that the school, "as an alter ego of the West Virginia, has an interest in having its state law claims heard in state court," even if there is overlap between its suit and the permit plans.
Seeking a reversal Tuesday from a three-judge appellate panel in Richmond, Virginia, on Tuesday, Kirkland Ellis attorney Kasdin Mitchell argued for Dow that case belongs in federal court under the Superfund law otherwise known as CERCLA or the Comprehensive Environmental Response, Compensation, and Liability Act.
This act, which was enacted by Congress in 1980, gives the Environmental Protection Agency authority to designate additional hazardous substances not listed under provisions like the Resource Conservation and Recovery Act.
“Because CERCLA is in place, we know the federal government has taken on the responsibility for cleaning up contaminated sites and if they’re able to accomplish those objectives through a permit holder, that doesn't change the fact that its government or that they’re directing that aspect of the permitted activities,” Mitchell said at the hearing.
Looking askance at this argument, however, was U.S. Circuit Judge Paul Niemeyer.
"They're claiming very simply that there is a trespass and a nuisance under common law and that they want relief beyond what has been approved under the RCRA process," the George H.W. Bush appointee said. "They want removal so that they can put in a well to drink water there. What’s wrong with that?"
West Virginia State University is a historically Black institution. Its attorney Benjamin R. Hogan asked the panel to affirm Tuesday.
“This suit involves state law claims filed in state court by a state actor, arising from the defendant’s contamination of West Virginia State University’s property," said Hogan, who is with the firm Bailey Glasser. "Although the claims involve pure questions of state law, the defendants somehow seek to pull them into federal court.”
But Hogan faced stiff questioning as well from Niemeyer.
"You essentially have a company working with the federal government, complying with the EPA laws. EPA’s satisfied with what they’re doing. They’ve reached full agreement, and you’re now bringing a state lawsuit that potentially could impose a sanction that is different or inconsistent with what the federal government has authorized under federal law," the judge noted. "How do we handle something like that?"
Hogan insisted meanwhile that any limit of the state court action here would conflict with the Supreme Court’s decision in Atlantic Richfield v. Christian. That case held that, "even under a surplus site, the local landowners were able to bring state action for remediation that was over and above what the EPA had approved for a superfund site that has been the source of a great amount of contamination in Montana," Hogan said.
In the case at hand, meanwhile, "there’s not much conflict at all between the state law claims and the EPA-approved permit," Hogan said.
Hogan accused Dow of "simplifying complying with the law as they engage in their for-profit business in which they can create chemicals and bring them to market — and, as a result of the law, clean up the mess that is made.”
He added that “states have the absolute right to bring state law claims in a state court, and this is not one of the exceptional circumstances where there are state law claims that are masking some federal cause of action.”
On rebuttal, Mitchell argued that the EPA was directing the cleanup “as part of our activities separate and apart from our ordinary compliance activities.”
“We don't know what would have happened if we hadn't agreed all along to do whatever the EPA has told us to do," she said. "We could have permit-related consequences for refusing to comply with this part of the plan, so I don't want to say we would have completely had no consequences if we didn't continue to follow EPA’s instructions with respect to cleanup.”
Mitchell called the cleanup activity a federal matter, separate from what Dow is required to do under its permit.
“The federal government has taken on the responsibility of cleaning up contamination,” the attorney said.
She also argued that the RCRA distinguishes between ordinary compliance and the disposal of hazardous waste, as well as the corrective action plan that it initiates and directs.
“I think it is important for the court to understand that not all permit conditions are created equally,” said Mitchell.
U.S. Circuit Judge Julius N. Richardson, another member of Tuesday's panel, said that the corrective action directed by the EPA was limited to permittees. “That’s not acquiescing, that’s getting the benefit of a permit," the Trump appointee said.
Richardson and Niemayer heard the appeal with Chief U.S. Circuit Judge Roger Gregory, who was nominated by George W. Bush. The judges did not indicate when or how they would rule on the matter.
Also listed as defendants in the case are Bayer Corp., Union Carbide Corp., Aventis CropScience and several other companies that have operated the manufacturing plant that leached toxic chemicals in the vicinity of the Charleston-area school.
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