Superfund Case Highlights the Important Role of Property Rights in Discouraging Harmful Pollution

PERC and the Pacific Legal Foundation filed an amicus brief with the U.S. Supreme Court on Atlantic Richfield Co. v. Christian

Photo courtesy of Mark Holloway.

The Supreme Court of the United States will soon decide whether Montana courts can hear the plea of the property owners surrounding a copper smelter near Opportunity, Montana. The smelter has dumped toxic metals, arsenic, and lead on its neighbors for nearly 100 years.

As a result of the extreme levels of pollutants, the Environmental Protection Agency designated 300 square miles surrounding the smelter as a Superfund site. The owners of the surrounding properties have asked Montana courts to enforce their property rights and require the polluter to pay to restore their property.

Atlantic Richfield Company, which owns the smelter, argues that the federal Comprehensive Environmental Response, Compensation, and Liability Act, commonly known as Superfund, prevents Montana courts from requiring it to fund more restoration work than that ordered under the federal law.

Earlier this week, PERC and the Pacific Legal Foundation filed an amicus brief with the Supreme Court urging it to reject this argument. The brief explains property rights’ central role in discouraging harmful pollution and how Atlantic Richfield’s argument would undermine this role.

In the brief, PERC and PLF explain that there is no indication that Congress intended for the federal law to void state property rights. Instead, Congress provided that “[n]othing” in Superfund would “affect or modify in any way the obligations or liabilities of any person under other Federal or State law, including common law[.]” The court should be wary to assume such intent and should also be reluctant to limit the remedies available to property owners. By allowing the Superfund to preempt the rights of private property owners, a perverse incentive is created that undermines property rights and encourages environmental damage.

Jonathan Wood, a PERC research fellow and environmental attorney with PLF who authored the brief, explained how crucial property rights are for environmental conservation:

Secure property rights discourage environmental damage by forcing would-be polluters to internalize the harms imposed on neighboring property owners. And where this incentive isn’t heeded, property rights enable anyone whose property is damaged by another to demand that property be restored. Where property rights are insecure, these incentives are weakened, leading to worse environmental outcomes.

Nothing in the Property Owners’ claim for restoration damages “stands as an obstacle to the accomplishment of congressional objectives as encompassed in CERCLA,” unless Congress’s objective was to condemn, in perpetuity, the private property of an individual property owner because that property happened to have been contaminated by a third party.

The United States has sided with Atlantic Richfield and asserted that Superfund forbids property owners within the boundaries of a Superfund site from improving the environmental conditions on their property without the agency’s permission. As the brief explains, this argument imposes significant environmental impacts by preventing landowners from improving the environmental health of their property. There is no indication that Congress, when it enacted Superfund to encourage environmental remediation, meant to frustrate landowners’ efforts to improve their own property.

“Property rights are not only the cornerstone of a free and prosperous society, they are also critical to addressing environmental problems such as pollution,” explained PERC executive director Brian Yablonski. “Well-defined and secure property rights play a central role in protecting landowners from harmful pollution and force polluters to be accountable for the costs they impose on others. Congress was clear that federal law should not supplant these fundamental rights, but rather it should supplement the key role they play in addressing and discouraging pollution.”

Read the entire amicus brief

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