Rejecting federal officer removal and federal question removal theories, the Fourth Circuit affirmed the District of West Virginia’s remand of a state tort suit against the remediators of an EPA-permitted Resource Conservation and Recovery Act (“RCRA”) site.  W.V. St. Univ. Bd. of Govs. v. Dow Chem. Co. et al., No. 20-1712, __ F.4^th __, 2022 WL 90242 (Jan. 10, 2022).

The operators of a manufacturing facility in Institute, West Virginia investigated historical groundwater contamination and found that the contamination extended off-site beneath what was historically the West Virginia Rehabilitation Center, owned by the West Virginia Department of Administration.  The rehab center property was transferred in 2013 to West Virginia State University (“WVSU”) to expand its footprint from another nearby property.  Id. at *1.  The Fourth Circuit noted that WVSU was aware of the groundwater contamination when it accepted title to the property.  Id. at *3.  

Because there was no risk of consumption of off-site groundwater or vapor intrusion in occupied buildings, EPA approved a remedy for the off-site groundwater contamination that was based on using institutional controls to permanently restrict use of the contaminated groundwater and residential use of certain buildings.  Id. at *3–4.  WVSU, however, declined to enter the environmental covenants that would require these long-term controls on the property.  Id. at *4.

After the parties failed to reach an agreement on the environmental covenants, WVSU filed suit in 2017 in West Virginia state court, pleading ten counts for declaratory judgment, injunctive relief, negligence, interference with business, public nuisance, private nuisance, trespass, strict liability, unjust enrichment, and punitive damages.  Id.

The case was removed to federal court, with the defendants asserting two primary jurisdictional theories.  First, they argued that the federal officer removal statute provides jurisdiction because the environmental remediation that is the subject of the plaintiffs’ claims was performed under the direction and guidance of EPA and the defenses in the action will heavily involve adherence to federal environmental laws.  See 42 U.S.C. § 1442.  Second, they argued that federal question jurisdiction applies because the plaintiffs’ claims effectively “arise under” the federal environmental statutes because they are essentially a collateral attack of a federally overseen environmental remediation.  See 42 U.S.C. § 1331.  Affirming the U.S. District Court for the District of West Virginia, the Fourth Circuit rejected both theories.

The Fourth Circuit held that private parties carrying out an environmental remediation under EPA oversight are not “acting under” EPA for purposes of federal officer removal.  WVSU, 2022 WL 90242, at *13.  It reasoned that a party performing a RCRA site remediation is more akin to a regulated entity operating in a “highly regulated sector” than to a federal contractor or other private party to whom the removal theory may apply.  Id. at *9–12.

With respect to federal question jurisdiction, the court distinguished this RCRA site from CERCLA sites, where challenges to a CERCLA “cleanup” are limited by the terms of CERCLA Section 113(b).  Id. at *14 (citing 42 U.S.C. § 9613(b).)  Without wading into the Supreme Court’s recent decision in Atlantic Richfield v. Christian, 140 S. Ct. 1335 (U.S. 2020), which addressed the preemptive scope of CERCLA Section 113(b) in detail, the Fourth Circuit here drew a bright line between CERCLA and RCRA sites and found no parallel preemption under RCRA.  Id. at *14–16.  It held that federal question jurisdiction does not lie in this circumstance, where, in its judgment, RCRA issues may be “hotly contested” but they would not “turn” the plaintiffs’ claims.  Id. at *18.

The conclusions of the Fourth Circuit are fact-specific to the case at bar, but they demonstrate that dual jurisdiction in state and federal courts may be available even for claims involving highly regulated, federally directed environmental remediation sites.

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