Daily Development for Wednesday, November 30, 2005
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri

ENVIRONMENTAL LAW; CERCLA; “OPERATOR:”    Utility company installing underground conduit in an area containing engineered controls of existing hazardous substance is not liable as an “operator” when its actions trigger a release of such substances if utility is not aware the existence of the controls and they were not registered under state’s “one call” system.

United States v. QWEST Corp., 353 F. @upp. 2d 1048 (D. Minn. 2005)

QWEST, through subcontractors, carried out a project to install underground communications line in a public “utility corridor” easement running across a Superfund site.  The site was listed on the National Priorities List.  The EPA had dealt with extensive residual  pollution on the property by building a series of containment and prevention facilities, including wells for the extraction of contaminated groundwater and underground forcemains (piping)  for the transport of the contaminated water to an on site treatment unit. 

QWEST and its subcontractors had no actual knowledge of the pipelines, and contacted the Minnesota “One Call Center” prior to installing the line to locate all underground utilities in the right of way.  The EPA had not installed any “tracers” so that its piping could be identified on the surface, and had failed to register the line with the “One Call Center” as required by statute.

It appears that QWEST’s subcontractors’ activities resulted in a rupture of the pipelines for contaminated water and that the government was forced to conduct a clean up that QWEST, at least, claimed could wind up costing several million dollars.

The government brought suit demanding that QWEST contribute to the cost of clean-up as an “operator of a facility.”  QWEST opposed this claim on several grounds, most of which appear to be matters of first impression.

“Operator” has a simple and vague definition in the statute, but the U.S. Supreme Court has defined the term to mean “someone who directs the workings of, manages or conducts the affairs of a facility . . . [A]n operator must manage, direct or conduct operations specifically related to pollution. That is, operations having to do with the leakage or disposal of hazardous waste, or decisions about compliance with environmental regulations.”

The government argued that demonstrably QWEST directed operations that had to do with leakage or disposal of hazardous waste, as what it did resulted in leakage of such waste.  QWEST responded that it had no idea that the pipes were there, and thus couldn’t be viewed as engaged in a project that had to do with protection or maintenance of these pipes.  Apparently QWEST was implicitly conceding that the situation might have been different had it been on constructive notice of the pipes due to their registration with the “one call” system.  But since the government didn’t register their presence, QWEST had no reason to know of them, and couldn’t be charge with any duties concerning them.

The government cited cases in which a party who was not the original operator of the facility was held liable when it conducted contractor operations at a facility, but QWEST sought to distinguish those cases because the contractor had a direct contractual relationship with an actual operator.  In the instant case, QWEST was making use of a dedicated public easement (but query why the grant of the easement to the public was not itself a “contractual relationship?”)

Alternatively, QWEST argued that it was not doing any operations in a “facility” because its activities occurred entirely within a utilities corridor, and not within the polluted area itself. 

The court stated that there was no clear authority concerning the liability of a public utility under these circumstances, and stated that “the Government is seeking t expand the definitions of operator liability well beyond the plain language of [the statute] and beyond any definition offered by a court. . . Defendants did not conduct any activities relating to the handling and management of hazardous substances on the Site.  Neither did their utility work on the land adnacent to the Site “specifically relate to pollution.”

Comment 1: Unfortunately the case is hopelessly ambiguous as to whether the “not an operator” or “not on the Site” arguments prevailed for the defendant, or whether (unlikely) both were critical.  Further, it is not clear how important it was that the government failed to register the site with the “one call” system.  Should it be relevant that the government in fact negligently caused the discharge by its failure to register?

Comment 2: The two cases cited by the government dealing with releases caused by contractors on land owned by another (both finding “operator” status”)  are ambiguous themselves on the question of whether the defendant must have knowledge of the dangers pertaining to its activities.  In one case, the defendant was an oil driller, and the discharge was a spill resulting from the drilling, so there clearly was awareness.  In the other case, however, the defendant was an excavator that spread polluted soil over a 300 acre construction site.  There is nothing in the case to indicate it knew that the soil (resulting from an earlier shipbuilding operation) was polluted, but the complaint alleged that the defendant had been negligent, which suggests that at least there was an allegation that it “should have known.”

Comment 3: There is also some argument that the defendant here perhaps should have known more than its now admitting.  This was, after all, a publicly identified Superfund site.  Maybe more “asking around” was appropriate, in addition to checking with the “one call” center, which any utility might do in any case, Superfund site or not. 

Comment 4: As to whether the defendant did work on the “facility,” wouldn’t it be logical to conclude that the “facility” included the pipes that had been built to drain pollution away from the facility, whether or not they were located below a public easement area?

Comment 5: Interestingly, the government’s lawsuit here has stirred up a lot of consternation in the utility community about the usefulness and relevance of “one call” statutes.   It is somewhat questionable whether such state legislation can eliminate the problem here, but perhaps we’ll get more clarity nationwide as to whether environmental clean up structures ought to be reported in “one pass” registries. 

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