The act-of-war defense in Section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, or Superfund) appropriately applies to the September 11, 2001, attacks and, therefore, does not allow the use of CERCLA to recover the costs of cleaning up contamination caused by the attacks.

That was the opinion of a U.S. district court in a case where a real estate developer sued the owners and lessees of the World Trade Center (WTC) and the owners of the jets that crashed into it to recover the cost of cleaning up contamination at nearby building leased by the developer.

In a May 2, 2014, opinion, the U.S. Court of Appeals for the 2nd Circuit affirmed the district court’s decision (Cedar & Washington Associates v. The Port Authority of New York and New Jersey, et al.).  Much of the case focuses on whether the 9/11 attacks met the definition of an act of war for CERCLA liability purposes since the 9/11 attacks have been viewed more as acts of terrorism than acts of war.

Background

After the 9/11 attacks, Cedar & Washington, real estate developer, began renovating its leased 12-story downtown office building into a business hotel. In 2004, the New York State Department of Environmental Conservation and the EPA notified Cedar & Washington that areas of the building might contain finely ground substances from the WTC, including concrete, asbestos, silicon, fiberglass, benzene, lead, and mercury—so-called “WTC Dust.”  To permit renovation to continue, the government agencies required Cedar & Washington to perform costly remediation.  Cedar & Washington sought recovery of those costs from the owner of the WTC site, lessees of WTC buildings, and the companies that owned the two aircraft that crashed into the towers.

Act of terrorism

The plaintiffs argued that acts of war must be distinguished from acts of terrorism, a distinction that is implicit in the Anti-Terrorism Act (ATA).  According to the ATA, an act of war is any act occurring in the course of declared war; armed conflict, whether or not war has been declared, between two or more nations; or armed conflict between military forces of any origin.

But the 2nd Circuit does not find this distinction in CERCLA.

“The ATA is designed precisely to differentiate between acts of terrorism and acts of war, while CERCLA is silent as to terrorism,” stated the court. “Indeed, in the CERCLA context, an event may be both an act of war and an act of terrorism; under the ATA regime, it may not.”

The 2nd Circuit recognizes that CERCLA commands a “broad reading,” which is intended to ensure that responsible parties cover the cost of cleaning up pollution they cause.  In addition, says the court, the three CERCLA affirmative defenses liability—act of war, act of God, act or omission of an unrelated third party—are generally read narrowly.

Overwhelming contribution

But for multiple reasons, the court concludes that the attacks were indeed an act of war, in the plain meaning of that term “solely for the purposes construing CERCLA’s affirmative defense.”

For example, the 2nd Circuit notes that the district court emphasized that the attacks were unique in U.S. history, that al-Qaeda’s leadership declared war on the United States and organized sophisticated attacks on leading U.S. commercial and political institutions, that the president and the Congress sent troops to “wage war against those who perpetrated the attacks,” and that the U.S. Supreme Court said that the attacks “were acts of war against the United States.”

Further, the 2nd Circuit agreed with the district court’s finding that the defendants did not reasonably make other contributions to the contamination (i.e., because their properties contained hazardous materials) because the act of war was the sole cause of any release of hazardous substances from the WTC’s collapse and “overwhelmed and swamped” the contributions of the defendants.

The 2nd Circuit’s opinion: Cedar & Washington Associates v. The Port Authority of New York and New Jersey, et al.