In the CERCLA context, knowing whether a cleanup action is a “removal” or “remedial” action is crucial to the length of time allowed for the cleanup, the amount of money that may be spent on the cleanup, and the statute of limitations for recovery of costs incurred as part of the cleanup. Generally, the statute of limitations for the recovery of costs related to a removal action is three years from the date of completion of the removal action, whereas the statute of limitations related to a remedial action is six years after the initiation of physical on-site construction of the remediation – meaning contribution lawsuits must often be brought while a remedial action is on-going. The determination of whether an action is removal or remedial can, therefore, be dispositive on whether an action is time-barred.

Last week, the Second Circuit was called to contrast “removal” and “remedial” activities under CERCLA in New York v. Millennium Realty, LLC, No. 12-2894 (2d. Cir. Oct. 15, 2013). In Millennium Realty, volatile organic compounds from an industrial area caused groundwater contamination near Hempsted, New York. In 1990, in an effort to address the groundwater contamination, the Town of Hempsted installed an absorption system to remove contaminants from groundwater wells. Later, in 1997, New York State installed an air stripper tower also to address the groundwater contamination, after finding that the town’s absorption system was inadequate. In 2006, and after additional work had been done by the state at the site, the state filed a cost recovery claim for costs related to the construction and operation of the air stripper tower.

The District Court held that the state’s claim for costs related to the air stripper tower were time-barred, as they were part of a remedial action and more than six years had passed since the time of construction. On appeal, the Second Circuit reversed, and held that both the town’s absorption system (which had been operating for 15 years) and the state’s air stripper tower (in operation for about nine years) were removal actions, designed to ensure safe drinking water to area residents, and therefore subject to a three year statute of limitations at the time of completion. Because neither the absorption system nor the air stripper tower were complete at the time the state’s lawsuit was filed, the Second Circuit held that the statute of limitations had not begun to run and, therefore, did not bar the state’s contribution claim.

The Second Circuit explicitly rejected the respondents argument that because the two actions were costly and lengthy, they were therefore “remedial” in nature. Instead, the court suggested that only those activities which address the source of contamination and seek to “permanently eliminate” it are remedial. On the contrary, actions taken to “minimize and mitigate” aspects of the contamination, or actions taken “in response to an imminent public health hazard,” like contaminated drinking water, regardless of their cost or length, are removal in nature.

Although the opinion, available here, emphasized CERLCA’s liberal construction in favor of state and federal governments, the court’s language concerning removal and remedial actions is nonetheless relevant to private party litigation as it elucidates the contours of removal and remedial actions and affirms the statute of limitations for each. These statute of limitations deadlines remain a most crucial touchstone for private parties engaging in, and seeking to recover costs under, CERCLA’s contribution provisions.