United States v. Reilly Tar

Background

The United States and the State of Minnesota brought the environmental lawsuit in 1980 against Reilly Tar & Chemical Corporation. The company’s subsidiary had operated a coal-distillation and wood-treatment business on an 80-acre site in St. Louis Park from 1917 through 1972. Toxic chemicals were dumped into ponds and ditches and forced into wells, eventually reaching aquifers that supplied drinking water to much of the western Twin Cities metropolitan area. The litigation originally proceeded under the Resource Conservation and Recovery Act and was later amended to add claims under the Comprehensive Environmental Response, Compensation, and Liability Act.

In 1986, the parties entered a consent decree requiring a remedial action plan. The plan included removing contaminated soil, pumping and treating groundwater, and monitoring groundwater. It initially addressed four chemicals: polycyclic aromatic hydrocarbons, benzene, naphthalene, and phenolics. After Reilly Tar’s successor declared bankruptcy in 2016, the parties proposed an amended consent decree removing Reilly Tar and substituting the City of St. Louis Park, which had already assumed most of Reilly Tar’s obligations.

Daikin Applied Americas, Inc., and Super Radiator Coils LP sought limited intervention. Their predecessors had owned a nearby 0.62-acre parcel where a metal-fabricating plant operated from approximately 1949 to 1998. The Minnesota Pollution Control Agency had asserted that the intervenors were responsible for perchloroethylene contamination in groundwater beneath their property, including aquifers shared with the Reilly Tar site. The intervenors argued that contamination from the Reilly Tar site was the primary source of contamination and that the proposed amendment could increase their cleanup costs and allow pollutants to spread.

Standing and Intervention

The court first considered whether the intervenors had standing, meaning a legally sufficient injury connected to the challenged action that a favorable ruling could likely remedy. The intervenors claimed injury because they were spending money to clean up their property. The court held that this spending was not traceable to the proposed amended consent decree. The Minnesota Pollution Control Agency had required cleanup of certain chlorinated volatile organic compounds, while the consent decree addressed different chemicals. The court therefore concluded that the intervenors’ cleanup obligations would be the same whether the existing decree remained in place or the amendment was adopted.

The court also held that the relief the intervenors wanted was outside the scope of this proceeding. They sought a new investigation and a different amendment addressing additional chemicals at the Reilly Tar site. Stopping the proposed amendment would not provide that relief, so the intervenors could not show that a favorable decision would likely remedy their alleged injury.

The court further ruled that, even if the intervenors had standing, they had not shown a right to intervene under Federal Rule of Civil Procedure 24 or the intervention provision of the environmental statute. The government established that the intervenors’ interests were adequately protected by the United States, Minnesota, and St. Louis Park. The court therefore denied intervention.

Consent Decree

The court rejected the intervenors’ arguments that the amended decree would change St. Louis Park’s groundwater-pumping obligations or shield the city from liability for environmental costs at the intervenors’ property. The amended remedial plan allowed a party to propose changes concerning the Drift aquifer, but any change had to comply with federal environmental requirements, including public notice and an opportunity for public comment. The government also represented that the decree’s contribution limitation applied only to matters addressed by the decree—actions taken and costs incurred in connection with the Reilly Tar site. The court stated that judicial estoppel would prevent the government from taking an inconsistent position in future litigation.

The court reviewed the proposed amended consent decree for fairness, reasonableness, and adequacy. It found that the amendment continued the original decree’s obligations and responsibilities while updating its language and scientific information. The court found the amended decree fair, reasonable, adequate, consistent with environmental laws, and in the public interest.

Disposition

The court ordered that the Motion to Intervene was DENIED. It ordered that the Motion to Approve Proposed Consent Judgment was GRANTED.