Framing CERCLA'S “Act of War” Defense
September 24, 2013
Plaintiff, Cedar & Washington Associates, LLC appealed decision granting defendants' motion to dismiss for failure to state a claim for relief under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). On remand from the Court of Appeals, district court was tasked with determining the applicability of CERCLA'S “act of war” exception. This case is In re September 11 Litigation: Cedar & Associates LLC v. Port Authority of New York & New Jersey, 2013 WL 1137320 (S.D.N.Y. Mar. 20, 2013).
Plaintiff owned property at 130 Cedar Street in lower Manhattan, just one block south of the World Trade Center. Following the devastation and collapse of the Twin Towers on September 11, 2001, plaintiff filed this action to recover cleanup and abatement costs for removing pulverized dust that infiltrated into the property at 130 Cedar Street. Relying on CERCLA, plaintiff alleged defendant's jointly and severally caused the “spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing” of the hazardous inert substances of the World Trade Center. The Port Authority of New York and the Port Authority of New Jersey, Inc. (Port Authority defendants) were named defendants as owners of the World Trade Center, along with various corporations tied to real estate developer, Larry Silverstein (Silverstein defendants), as lessee's of the structure; The suit also named those who operated business in the World Trade Center (Ground defendants); and airlines American, Inc. and United, Inc., as owners and operators of passenger flights United Airline 175 and American Airline 11 (Aviation defendants).
The legislative intent behind CERCLA is to impose strict liability on those individuals or entity polluters whose acts caused the occurrence of any necessary response costs. For this purpose, CERCLA provides but three affirmative defenses to strict liability, the scheme of which is narrowly tailored and conservatively applied. In order to avail of the defenses, the alleged polluter must show by a preponderance of the evidence that the release of the hazardous substance was caused solely by (1) an act of God; (2) an act of war; (3) an act or omission of a third party not occurring from a direct or indirect contractual relationship with defendant, or a combination of the three.
However, CERCLA does not provide a definition of the term an “act of war” and its legislative history is silent as to the nature of this defense. Consequently, at issue before the court on remand was whether the attack on the World Trade Center was “an act of war” as contemplated within CERCLA. Because the inquiry was largely one of first impression, the court consulted an array of resources and references, including insurance contracts, in order to bring meaning to the term “act of war” and frame the applicability of this defense under CERCLA. Namely, the court determined that terrorist activities committed by a terrorist group may be attributed to a foreign state government where the state functionally controlled the group's terroristic agenda. Moreover, the court reasoned that an act of terror which necessarily provoked the response of war becomes itself an “act of war”.
Using these parameters to analyze the activities of al Qaeda on September 11, the court held that the attack on the World Trade Center was, in fact, an “act of war” within the meaning of CERCLA's affirmative defense. Consequently, the court went on to hold that defendant's Port Authority, Silverstein, and Ground were entitled to invoke the act of war defense, which operates as a total escape from liability. On this ground, the court dismissed the claim against those defendants. Finally, the court found that plaintiff had no claim against Aviation defendant's for a “release” under CERCLA, but in dicta noted that if it were successful in securing a trial, the Aviation defendants could invoke the act of war defense as well.
Editor's Note: While the court cautioned that its holding should be read narrowly and in context with the facts of this case only, it is the first significant discussion of the scope and applicability of the “act of war” defense to strict liability under CERCLA. Thus, the factors considered by the court in framing the definition of an act of war give practitioners and industries a platform by which to analyze future terrorist based claims.