Washington State District Court Holds WDOT, the Designer and Manager of a Highway Stormwater Drainage System, Liable As An “Arranger” Under CERCLA

A District Court in Washington has held that the Washington State Department of Transportation (“WSDOT”) is liable as an arranger under CERCLA because it designed a drainage system with the purpose to discharge highway runoff to the environment, and at some point had knowledge that the runoff contained hazardous substances. United States v. Washington State Department of Transportation, Case No. C08-5722RJB, 2010 U.S. Dist. LEXIS 58952, (W.D. Wash. June 7, 2010)(“WSDOT II”).

The litigation concerns the Commencement Bay-Nearshore Tideflats Superfund Site (“the CB-NT Site”) in Tacoma, Washington. In 1989 the United States Environmental Protection Agency (EPA) contacted over 130 potentially responsible parties (PRPs), including WSDOT, regarding the CB-NT Site. EPA entered into consent decrees to provide funding with over 80 PRPs in early 2003, but not WSDOT. Consequently, the United States filed a complaint against WSDOT in late 2008. WSDOT filed an answer and counterclaim alleging, among other things, that the United States was liable for contribution to WSDOT for response costs at the CB-NT Site due to activities of the United States Army Corps of Engineers.

The complaint by the United States alleged “that WSDOT owned/owns and operated/operates I-5, SR 705, and SR 509 highways; and the drainage structures designed to drain runoff away from these highways and to discharge the runoff into the Thea Foss Waterway” transported hazardous substances. WSDOT II, at 3. WSDOT filed a motion for partial summary judgment, and argued that it could not be held liable as an arranger under CERCLA because it did not have control over the release of hazardous substances and it did not intend to dispose of hazardous substances. U.S. responded by filing a cross motion for partial summary judgment, arguing that it is undisputed that WSDOT arranged for disposal by designing, constructing, and operating highway drainage systems into nearby water-bodies, that WSDOT had actual knowledge that the runoff contained hazardous substances, and that WSDOT has the ability to redirect, contain, and treat its contaminated runoff. The Court found:

“The court is persuaded by the U.S.’s arguments. WSDOT arranged for disposal of hazardous substances. It is undisputed that WSDOT designed the drainage systems at issue. Designing is an action directed to a specific purpose. The purpose was to discharge the highway runoff into the environment. WSDOT had knowledge that the runoff contained hazardous substances and there was an actual release of the hazardous substances into the environment. WSDOT argues that it did not have control of the hazardous substances. However, it did have control over how the collected runoff was disposed of. WSDOT did design the drainage system and, as noted by the U.S., WSDOT has the ability to redirect, contain, or treat its contaminated runoff. For the foregoing reasons, WSDOT is an arranger under 42 U.S.C. § 9607(a)(3).” WSDOT II, at 8.

The Court’s legal reasoning on the issue of arranger liability is brief. The Court first cites 42 U.S.C. § 9607(a)(3), the CERCLA definition of an arranger: “An arranger is defined as ‘any person who by contract, agreement, or otherwise arranged for disposal or treatment… of hazardous substances owned or possessed by such person, by any party or entity, at any facility… owned or operated by another party or entity and containing such hazardous substances.” 42 U.S.C. § 9607(a)(3).” WSDOT II, at 7-8.

Next, the Court noted that “[D]isposal activities that were legal when conducted can nevertheless give rise to liability under § 9607(a)(3) if there is an actual or threatened release of such hazardous substances into the environment.” WSDOT II, at 8, quoting Pakootas v. Teck Cominco Metals, Ltd., 452 F.3d 1066, 1077-78 (9th Cir. 2006).

Finally, the Court quoted Burlington No. and Santa Fe Ry. Co. v. United States, 129 S. Ct. 1870, 1879 (2009) for the point that “‘[A]n entity may qualify as an arranger under § 9607(a)(3) when it takes intentional steps to dispose of a hazardous substance’ . . . ‘The word ‘arrange’ implies action directed to a specific purpose.’” WSDOT II, at 8.

Beyond the statute and these two cases, no other authority is cited by the Court for its legal conclusion that the designer and manager of a stormwater system qualifies as an arranger once they learn that the runoff contains hazardous substances. The Court’s phrase appears essential: “Designing is an action directed to a specific purpose.” Id. It is difficult to tell from the Court’s written opinion in WSDOT II whether WSDOT’s knowledge that their stormwater drainage system transported hazardous substances came during or after the time when they were designing the system. But, in a prior proceeding, the Court noted that WSDOT had discovered contamination while constructing a highway, though WSDOT had sought to clean up the contaminated soil before finishing construction. United States v. Wash. State DOT, 665 F. Supp. 2d 1233, 1235 (W.D. Wash. 2009)(WSDOT I)(motion granting in part and denying in part U.S.’s motion for partial judgment on the pleadings). The Court also noted, in WSDOT II, that WSDOT “did have control over how the collected runoff was disposed of” while it had knowledge that the runoff contained hazardous substances. WSDOT II, at 8.