|
Canadian Company Sued Under U.S. Superfund
By Katherine M. van Rensburg
Teck Cominco Metals Ltd. is a Canadian company that operates a lead-zinc smelter
in Trail, British Columbia, approximately ten miles north of the U.S. border.
It is alleged that from 1906 until mid-1995, Teck Cominco dumped 142,000 tons
of slag into the Columbia River, resulting in downstream contamination of surface
water, groundwater and sediments of the river. Lake Roosevelt, a man-made lake
created by the Grand Coulee Dam which borders the tribal lands of the Confederated
Tribes of the Colville Reservation, was also affected.
In 1999 the Confederated Tribes petitioned the U.S. EPA to list Lake Roosevelt
as a Superfund site. As an alternative to the Superfund process, Teck Cominco
attempted to negotiate an agreement with the EPA that would have provided $13
million in funding for studies of pollution in Lake Roosevelt. It was proposed
that Teck Cominco’s affiliate, Teck Cominco American Incorporated, would
enter into the agreement with the EPA.
It is reported that negotiations broke down when, in December 2003, the EPA
issued a Unilateral Administrative Order to the Canadian entity requiring studies
to be undertaken. The Canadian government objected to the action as an improper
extra-territorial extension of U.S. laws, and petitioned to have the order rescinded.
In July 2004, the Colville Confederated Tribes commenced a citizen’s suit
in the State of Washington, with the Washington State Governor and Attorney
General subsequently joining the action as plaintiffs. The complaint in Pakootas
v. Teck Cominco Metals Ltd., which was served on the Canadian company at its
head office in Vancouver, seeks to enforce the Unilateral Administrative Order
against Teck Cominco. The action also seeks civil penalties of up to $25,000
per day, payable to the United States Treasury.
In August 2004, Teck Cominco filed a motion with the U.S. District Court in
Spokane, Washington, to dismiss the action. The company claimed that the U.S.
Superfund law could not be applied to its activities in Canada.
On November 8, 2004, Senior Judge Alan A. McDonald denied Teck Cominco’s
motion to dismiss the lawsuit. The court rejected the argument that the Superfund
Law (or CERCLA) could be applied only to actions and operations occurring within
the U.S. The court acknowledged that there is a presumption against extraterritorial
application of U.S. laws, but concluded that the presumption did not apply,
stating:
“Because the fundamental purpose of CERCLA is to ensure the integrity
of the domestic environment, we expect that Congress intended to proscribe conduct
associated with the degradation of the environment, regardless of the location
of the agents responsible for said conduct.”
The court also certified the case for appeal t cU.S. Court of Appeals for the
Ninth Circuit.
Cross-Border Consequences
This case is the first in which U.S. Superfund law has been applied to environmental
damage allegedly caused by an activity occurring outside the United States.
Traditionally, American courts have been unwilling to apply U.S. laws to activities
outside the U.S., including those of American nationals abroad, arguing that
this would interfere with the sovereignty of the countries in which they are
operating.
At the same time, it is recognized that we need strong measures to deal with
environmental harm. Air pollution and discharges to water do not respect national
borders, and this fact is recognized in the numerous bilateral and multilateral
agreements dealing with the environment, including the NAFTA environmental side
agreement.
This case raises important questions about whether such diplomatic approaches
are sufficient, and whether companies and individuals that cause environmental
harm should be subject to both domestic laws and the laws of any jurisdiction
where their activities cause an impact. As a practical matter, the case has
captured the attention of businesses with cross-border operations, raising the
specter of a new weapon in the hands of regulators and environmentalists on
both sides of the border.
Katherine van Rensburg is a partner with the Toronto office of Gowling Lafleur
Henderson LLP, where she practices environmental law and civil litigation.