Background
In September 1995, a federal appeals court held that a publicly owned treatment works (POTWs) was liable under CERCLA for groundwater contamination caused by hazardous waste discharged by an industrial user into the sewer system that allegedly leaked from the POTW collection system (Westfarm Associates Limited and International Fabricare Institute v. Washington Suburban Sanitary Commission). This decision constitutes an unintended shift in responsibility for hazardous waste cleanup from private parties to taxpayers. There is a long history of federal environmental law recognizing the unique nature of public sewer systems in the context of regulatory and liability regimes. The statutory provisions of Superfund and the Resource Conservation and Recovery Act point clearly to the intent of Congress that publicly owned treatment works are not to be responsible parties under Superfund or to be subject to regulation under RCRA.Legislative History - Statutory Recognition of the Unique Nature of POTWs The Clean Water Act comprehensively regulates the activities, responsibilities and liabilities of publicly owned treatment works. The Clean Water Act is one of our nation's most effective environmental laws and serves as the primary vehicle for regulating POTWs.
Congress has a long history of recognizing the unique nature of public environmental programs and has enacted legislation that protects municipalities from undue exposure to liability. An analysis of the legislative treatment of publicly owned treatment works in federal environmental law as a whole demonstrates that Congress has consistently enacted extensive protection for POTWs from exposure to liability. That protection is evidenced in:
Analysis - CERCLA's Definition of "Facility"
- Section 407 of the Rivers and Harbors Act of 1899, which contains a general prohibition of the discharge of refuse into navigable waters, but exempts the release of liquid refuse from sewers;
The Rivers and Harbors Act of 1899 contains the first clear evidence that Congress intended to treat public sewers and treatment works as special entities. Section 407 excludes the discharge of liquid refuse from sewers from the general prohibition on discharging refuse into navigable waters contained in the Act.
- The Domestic Sewage Exclusion contained in the Resource Conservation and Recovery Act (RCRA), which exempts virtually all discharges into and from POTWs from the reach of liability under RCRA, and in turn CERCLA (which covers substances regulated under RCRA);
Congress continued to recognize the unique nature of POTWs in 203(4) of the Solid Waste Disposal Act of 1965 which explicitly excluded from its definition of solid wastes "solid or dissolved material in domestic sewage." This exemption has since become known as the Domestic Sewage Exclusion or DSE. Thus, material going into a publicly owned treatment works that falls within this definition was excluded from the regulatory framework of the law. This exclusion is particularly significant in the context of later amendments to the Solid Waste Disposal Act, which collectively became the Resource Conservation and Recovery Act. The definition of solid waste is now set forth at 1004(27) of the Solid Waste Disposal Act, and Congress has declined for more that 30 years to modify the Domestic Sewage Exclusion. This treatment recognizes that sewer systems are essential public services provided by state and local governments which may have no knowledge or control over the materials placed into the sewerage system other than by sources subject to pretreatment regulations.
- The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund) definition of "federally permitted release" which excludes POTWs and industrial dischargers with a Clean Water Act Section 307 pretreatment permit from the reach of Superfund liability;
A third statutory recognition of the unique nature of POTWs is found in CERCLA. The law exempts from liability any "federally permitted release" of a hazardous substance if the release is in accordance with the requirements of a permit granted under Section 402 (National Pollutant Discharge Elimination System (NPDES)) or Section 307 (Toxic and Pretreatment Effluent Standards) of the Clean Water Act.
Wastewater collection systems, as a component of POTWs, are regulated through the NPDES permit program of the federal Clean Water Act. The acceptance of industrial wastewater, subject to strict monitoring and enforcement requirements, is authorized under the Clean Water Act's Section 307 industrial pretreatment program. Consistent with this provision, CERCLA provides exemptions from liability in its definition of "federally permitted release" for discharges in compliance with a NPDES permit and releases into a POTW in compliance with a pretreatment permit.
- The CERCLA definition of "facility," which is intended to exclude POTWs from Superfund liability by covering specifically only the pipes of a discharger into the sewer system.
Recognition of the special treatment of POTWs as essential municipal services not intended to be exposed to liability is also found in CERCLA's definition of "facility." CERCLA liability is triggered by the "release" of a "hazardous substance" from a "facility." An analysis of the law and associated definitions demonstrates clear Congressional intent to include pipes discharging into wastewater collection systems within the definition of "facility" under Superfund, but not the publicly owned wastewater collection systems themselves.Under §101(9) of CERCLA, 33 U.S.C. § 9601(9) the term "facility" is defined as follows:
(A) any building, structure, installation, equipment, pipe or pipeline (including any pipe into a sewer or publicly owned treatment works), well, pit, pond, lagoon, impoundment, ditch, landfill, storage container, motor vehicle, rolling stock, or aircraft, or (B) any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located; but does not include any consumer product in consumer use or any vessel.
42 U.S.C.§9601(9) (emphasis added).
The "facility" definition is intended to exclude from liability the POTW to which hazardous substances in violation of a Clean Water Act Section 402 or 307 permit are discharged. Thus, liability for the discharge of such contaminants is the sole responsibility of the discharger, who alone has knowledge and control of the activities which caused release of the contaminant. Congress intended that the provision of essential waste treatment service by the POTW for an industrial customer (discharger) not trigger liability exposure for acts of that customer. Only the industrial users of the POTW should be liable for any discharges which cause CERCLA contamination, and then only to the extent those discharges are in violation of Sections 402 or 307 of the Clean Water Act.
The court in Westfarm Associates v. WSSC could have, and should have, held the generator liable for the release of the CERCLA hazardous substance that subsequently entered area groundwater. The Court did find that the language of the "facility" definition, if taken alone, indicates an intent to exempt POTWs, but found that since POTWs were not expressly excluded from CERCLA liability, the POTW in question must be held liable for costs related to cleanup action. The court concludes by also suggesting that it doubts the wisdom of imposing liability on POTWs, but states that the question is a matter for Congress, not the court, to clarify.
Recommendation Congress is currently considering an exemption for municipalities from liability for certain kinds of co-disposal sites in both House and Senate legislation. This is yet another recognition of the special nature of publicly owned facilities within the Superfund liability regime. Congress is also considering exempting from Superfund liability certain categories of potentially responsible parties in order to expedite settlements and limit economic impact.
In the case of POTWs, Congress needs only to restate the exemption provided under prior law by specifically exempting POTWs from the definition of "facility" under CERCLA. To fail to correct the Westfarm interpretation not only exposes publicly owned sewer systems nationwide to significant liability but also invites real responsible parties to try to recover their Superfund clean up costs from customers of these essential public agencies who pay the costs of POTW operation through user fees.
The following amendment is recommended to clarify Congressional intent to exclude POTWS from liability under Superfund:
Amend the definition of "facility," Section 101(9)(A) of the Comprehensive Environmental Response, Compensation and Liability Act (33 U.S.C. § 9601(9)(A) by inserting after the word "works", before the " )", a "," and the following:
but excluding publicly-owned sewers and treatment works as defined in §212(2) of the Federal Water Pollution Control Act, as amended
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