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Supreme Court seems willing to make it easier for some companies to recover enviro costs


WASHINGTON -- A majority of the Supreme Court seems willing to make it easier for many large, industrial companies to recover some of the millions of dollars they've spent cleaning up hazardous waste sites.

At issue in a case heard last week is whether, under the federal environmental law known as "Superfund," companies that voluntarily choose to clean up contaminated areas can sue other companies or the government to recoup a portion of the cleanup costs.

The Bush administration argues that corporations must themselves be sued or settle an enforcement action with the Environmental Protection Agency before they can seek to recover costs from other parties. Allowing companies to recoup costs after a voluntary cleanup "would frustrate Congress's clear intent to encourage settlements with the government," Deputy Solicitor General Thomas Hungar, arguing for the U.S. government, told the justices. It would also undermine Congress' intent to promote "supervised, effective cleanups," he said.

But most of the justices appeared unconvinced.

The "most natural reading" of the law is the way the government's adversary in the case, Atlantic Research Corp., reads it, Chief Justice John Roberts said.

Justice Stephen Breyer, echoing many legal experts, said the relevant section of the Superfund law isn't very clear. "I can't get anything out of the language," he said.

The case stems from a lawsuit filed by Atlantic Research in 2002. The company retrofitted rocket motors under contract with the U.S. government in the 1980s at an industrial park in Camden, Ark., according to court filings.

Rocket propellant contaminated the industrial park as a result of the work, and the company voluntarily cleaned up the pollution. It then sued the federal government, as a party that helped create the pollution, in 2002 to recover some of the costs.

Environmentalists and several U.S. business groups argued in court briefs that the government's position would discourage companies from initiating their own cleanups.

Several state governments also filed papers in support of Atlantic.

Jay Geck, deputy solicitor general for the state of Washington, told the justices that there are 400,000 toxic waste sites in the United States and the EPA is stretched too thin to address all of them.

"If these sites are going to be cleaned up, it's going to take private parties," Geck said, and the companies should be able to reclaim some of their costs.

Several business groups, including the Superfund Settlements Project and trade associations representing the chemical, oil, and utilities industries, signed onto a brief supporting Atlantic Research. The Superfund Settlements Project represents 10 corporations, including General Electric Co. (NYSE: GE) and United Technologies Corp. (NYSE: UTX), that have spent $6 billion on hazardous waste cleanups, the group's lawyer said.

The outcome of the case will also affect other, similar disputes currently in the courts. In one case, DuPont Co. and ConocoPhillips (NYSE: COP) filed suit against the government in 1997 to recover a portion of the cost of cleaning up 15 polluted industrial sites that the government had once owned or controlled during World War II. DuPont spent $24 million on the cleanups.

Separately, Lockheed Martin Corp. (NYSE: LMT) said in a court brief that it has also sued the government seeking to recover "tens of millions of dollars" it spent rehabilitating a military production facility formerly operated by the United States in Hempstead, N.Y.

The case is United States v. Atlantic Research Corp., (06-562).

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