Second Circuit Holds That Single-Remediation Principle for CERCLA’s Statute of Limitations Does Not Apply in All Circumstances

In a new opinion applying CERCLA’s statute of limitations, the Second Circuit held in MPM Silicones, LLC v. Union Carbide Corp. (2020 U.S. App. LEXIS 23060) that the Circuit’s “single-remediation principle” does not categorically apply in all circumstances in reversing the lower court’s decision that plaintiff’s cost recovery claim against defendant Union Carbide was time-barred. The lower court had dismissed plaintiff MPM’s claim for recovery of its remedial costs based on CERCLA’s 6-year statute of limitations for remedial actions because, in part, the defendant had long before conducted remedial actions for different contaminants at the impacted property. The lower court seemed constrained by what it understood to be Second Circuit precedent holding that there can only be one remedy (i.e., the “single-remediation principle”) under CERCLA for statute of limitations purposes. The Second Circuit, however, clarified that this principle does not apply in all circumstances, in remanding the matter for additional consideration.

In summary, defendant Union Carbide was a previous owner of the property and it had deposited waste PCBs during its operations. During its ownership, Union Carbide had undertaken certain corrective actions regarding other contaminants as required by state regulatory agencies, but it did not address the PCBs. After a series of ownership changes, MPM purchased the property and discovered PCBs in a separate area. After reporting the discovery to state and federal agencies, MPM filed a CERCLA action against Union Carbide for recovery of its incurred response costs, including a claim for declaratory judgment to recover future response costs.

Interestingly, the Second Circuit did not directly hold that Union Carbide’s remedial activities as a previous owner could not form the basis for its statute of limitations defense under CERCLA. It instead clarified the single-remediation principle as meaning that when remediation is undertaken under a cleanup plan based on full disclosure of the known environmental problems, successive remedial steps in furtherance of the original remedial objectives (presumably pursuant to that cleanup plan) are part of a single remediation for statute of limitations purposes. Accordingly, the matter was remanded for consideration of whether MPM’s claim was timely based on these factors and whether its remedial activity was part of the same remediation begun by Union Carbide.

Notably for practitioners in the Ninth Circuit, the court’s approach of tying the commencement of CERCLA’s statute of limitations to the remedial plan appears largely consistent with the Ninth Circuit’s 1994 opinion in California v. Neville Chemical Co., which held that the statute of limitations for remedial actions is not triggered until final adoption of the remedial action plan.