Introduction
Widespread concern by the public regarding pollution has led to regulatory and legal efforts to reduce contamination in the United States. One concern is water pollution by concentrated animal feeding operations (CAFOs). Since the 1990s, the US Environmental Protection Agency (EPA) has been developing revised regulations under the federal Clean Water Act to address pollutants from CAFOs (EPA, 2003, 2008). Moreover, in response to legal challenges, the EPA and state permitting agencies have increased their oversight of these operations (Waterkeeper Alliance, Inc. v. EPA, 2005; Centner, Reference CENTNER2008), including the regulation of dry poultry litter in 2004 (EPA, 2003). Yet, these efforts have not altered the fact that nutrients from the application of manure and poultry litter on fields continue to adversely affect many surface waters.
The lack of success at achieving water quality goals under the Clean Water Act, as well as pollution damages for public water authorities, has led some to conclude that the pollution control provisions of the Clean Water Act are insufficient (EPA, 2008). The Oklahoma Attorney General decided that other legal causes of action existed to challenge pollution from poultry farms in a watershed in the state. In 2005, he instituted a major lawsuit against Tyson Foods and other poultry integrators for contamination damages (Tyson Foods I Complaint, 2005). The lawsuit, referred to as Tyson Foods I, seeks response costs under the recovery provisions of the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and other causes of action. As a state government, Oklahoma seeks to recover costs for remedying pollution problems caused by the release of contaminants by poultry producers. The basic allegations of the lawsuit are set forth in the litigants’ filed complaint, answer, and documents addressing a motion for summary judgment.
The Tyson Foods I lawsuit raises novel questions about possible nutrient contamination from poultry farms. If poultry litter is spread on fields to be used as a fertiliser for growing crops, does the fact that some nutrients are carried into surface waters mean that farmers and others owning or managing litter can incur liability for polluting the water? Under the Clean Water Act, reasonable applications of manure accompanied by discharges of nutrients into federal waters are permitted as agricultural storm water discharges. However, as a separate environmental law, CERCLA may set forth different liability requirements involving nutrient contamination from the application of manure. When nutrients from poultry litter are carried into federal waters, are there releases of hazardous substances within the meaning of CERCLA? Perhaps more important is whether the allegations of this lawsuit might provide insights for the poultry industry for restructuring practices to avoid pollution problems.
The legal challenge under CERCLA is very significant for the poultry industry. If producers and integrators are responsible for contamination from applying poultry litter, they may incur liability for damage awards. Moreover, a judge might enjoin the application of poultry litter on fields that have too many nutrients, thereby forcing producers to remove litter to other areas. This paper addresses the argument that poultry production activities are violating CERCLA and analyzes the meaning of the permit defence and fertiliser exclusion. It adopts the concept that appropriate agronomic applications of manure are production practices involving the normal application of fertiliser. Thus, integrators whose producers follow best management practices and limit applications of litter to amounts required for plant growth should have a defence to defeat allegations under CERCLA.
The lawsuit: Tyson Foods I
In its complaint, the plaintiff in the Tyson Foods I lawsuit alleged that the defendants caused injury to the Illinois River Watershed due to activities of their producers who stored and applied poultry litter on lands within the watershed (Tyson Foods I Complaint, 2005). The practices of the integrators’ producers caused injury to and destruction of natural resources in the watershed, including land, fish, wildlife, biota, air, water, groundwater, drinking water supplies, and other resources. Ten causes of action were advanced in the lawsuit: (1) CERCLA cost recovery, (2) CERCLA natural resource damages, (3) Solid Waste Disposal Act citizen suit, (4) state nuisance, (5) federal nuisance, (6) trespass, (7) violation of state pollution law, (8) violation of state pollution regulations, (9) violation of state administrative code regarding CAFOs, and (10) unjust enrichment. This paper analyses liability under CERCLA, the first two causes of action in the Tyson Foods I lawsuit, to comment on industry practices related to nutrient contamination concerns.
For all of the claims, the deposition of poultry litter on fields in Arkansas and Oklahoma caused injury to the watershed. Litter is alleged to be a hazardous substance because it contains phosphorus and phosphorus compounds, nitrogen and nitrogen compounds, zinc and its compounds, copper and its compounds, and arsenic and its compounds. Although the alleged hazardous substance was deposited on lands in both Arkansas and Oklahoma, the lawsuit only seeks relief for damages arising in Oklahoma. Firstly, Oklahoma wants the defendants to pay for all monetary damages suffered by the state, and also pay the costs and expenses incurred to remedy the wrongful conduct. Secondly, Oklahoma seeks a permanent injunction requiring the defendants to abate their pollution-causing conduct. Other relief being sought includes punitive and exemplary damages, statutory penalties, prejudgment interest, attorneys’ costs and fees, and disgorgement of all gains the defendants realized in consequence of their wrongdoing.
A separate lawsuit by Oklahoma under the Resource Conservation and Recovery Act requested a court order to immediately stop releases of poultry litter in the watershed (Tyson Foods II, 2008). The trial court declined to issue an injunction, and this was affirmed on appeal (Tyson Foods III, 2009).
CERCLA releases and liability
CERCLA is a strict liability statute enacted to address sites already contaminated with hazardous waste (US Public Law No. 96-510, Reference US PUBLIC LAW1980). Contamination problems at Love Canal and other sites in the United States led Congress to enact this act to reduce and eliminate health threats posed by formerly deposited hazardous waste. The act gives the EPA the power to respond to actual or threatened releases of hazardous substances and enables governments to seek response costs for the removal or remediation of hazardous substances. Governments may also seek contribution for cleanup costs from other potentially responsible parties (US Code, Reference US CODE2000, title 42). The Tyson Foods I lawsuit seeks damages for the removal and remediation of nutrient contamination caused by the actions of defendants involved in the deposition of poultry litter.
CERCLA delineates four elements that need to be proven to establish liability:
1) the site of the contamination is a ‘facility’
2) the defendant is a ‘covered person’ under the act
3) the release of hazardous substances comes from a facility
4) the release caused the plaintiff to incur response costs that are consistent with the national contingency plan (US Code, Reference US CODE2000, title 42).
A brief overview of these requirements identifies several issues in the Tyson Foods I lawsuit that are important to the poultry industry.
‘facility’ as defined by CERCLA
The defendants in the Tyson Foods I lawsuit have argued that fields where poultry litter is applied do not constitute a ‘facility’ as defined by CERCLA. They claim that the area is too large and includes parcels where no activities by the defendants have occurred (Tyson Foods I Motion, 2009). However, ultimately, this contention is unlikely to preclude the delineation of a facility, as other courts have already confronted similar arguments about CERCLA's definition of a facility.
In a lawsuit against owners of a smelter in Canada, citizens and the state of Washington argued that contaminants carried from the smelter by the Columbia River contaminated a facility in the United States called the ‘Upper Columbia River Site’ (Pakootas v. Teck Cominco Metals, Ltd., 2004). This site included all areas within the United States where hazardous substances from the defendant's operations had come to be placed, including portions of the Columbia River and Lake Roosevelt. The court found the entire area to be a facility. A similar conclusion was reached in a mining case involving two valley areas and a third area consisting of mountain basins (Colorado v. Idarado Mining Company, 1990). These cases establish precedents for finding a facility can be a large territory such as a watershed.
covered persons
Section 107 of CERCLA defines persons who are covered by the act. The definition of covered persons includes persons who owned or operated a facility at which hazardous substances were disposed of, and persons who, by contract or agreement, arranged for the disposal of a hazardous substance (US Code, Reference US CODE2000, title 42). Oklahoma argues in the Tyson Foods I lawsuit that poultry integrators arranged for the disposal of the litter. Under production contracts, integrators have substantial control over the production of birds and retain title to the birds (Tyson Foods I Answer, 2005). If facts show some type of control over the deposition of the litter by the integrators, established precedents suggest that would be sufficient to bring integrators within the classification of covered persons under CERCLA (United States v. Vertac Chemical Corporation, 1995).
The defendants argue that they do not arrange for the disposal of the litter. The integrators’ arrangements with producers never confer to the integrators any authority over the litter, and integrators do not appear to have been actively involved in any management decisions over the disposal of the waste. Rather, producers are the owners and operators of the farms and arrange for the disposal of the litter. Litter appropriately applied as fertiliser for crop production should be found to be a useful by-product and not waste. Under judicial precedents, the integrators should not incur liability for this practice (California Department of Toxic Substances Control v. Alco Pacific, Inc., 2007).
While courts had taken an expansive view of arranger liability under CERCLA, this has been curtailed by the 2009 Supreme Court decision in Burlington Northern & Santa Fe Railway Company v. United States (2009). An appellate court had decided that arranger liability included situations in which an entity was the source of hazardous waste even when an entity never managed the disposal of hazardous waste (United States v. Burlington Northern & Santa Fe Railway Company, 2007). In reversing the lower court, the Supreme Court interpreted arranger liability to require an ‘action directed to a specific purpose.’ When the disposal is a peripheral result of a transaction and efforts were taken to avoid wrongful disposal, the entity does not incur arranger liability.
Applying the Supreme Court's finding in Burlington Northern to the facts of the Tyson Foods I lawsuit, the production contracts between integrators and producers do not appear to involve integrators arranging for the disposal of hazardous waste. Unless additional facts surface to show more integrator involvement, the arrangements show integrators’ birds as the source of the waste, but the integrators do not exercise control over the management of the litter's disposal (Tyson Foods I Answer, 2005). It should be concluded that the independent-contractor producers are solely responsible for arranging the disposal of the litter.
release of a hazardous substance
The third requirement for liability under CERCLA is a release of a hazardous substance. Whenever a person causes a release of a hazardous substance, it must be reported promptly (US Code, Reference US CODE2000, title 42). The state of Oklahoma claims that the defendants in Tyson Foods I knew that their producers were improperly storing poultry waste and were over-applying the waste to lands within the watershed. These wrongful practices resulted in large quantities of phosphorus and other hazardous substances accumulating in soils, led to the runoff of excess nutrients, and released contaminants into the watershed. The state's allegations are in dispute; the defendants claim that poultry litter was applied as a fertiliser.
The integrators claim that phosphorus compounds in poultry litter are not hazardous as they are common substances found in nature (Tyson Foods I Motion, 2009). However, the issue is not whether the compounds are toxic or dangerous but rather whether poultry litter is within CERCLA's definition of a hazardous substance. The hazardous substances listed under the act are not intended to preclude unlisted combinations of compounds from being found to constitute hazardous substances (United States v. Alcan Aluminum Corporation, 1991). Because the language of CERCLA excludes the normal application of fertiliser, the act supports a conclusion that fertiliser was considered to be a hazardous substance. An exclusion was needed to allow people to use fertiliser to promote plant growth. Finally, a district court has already decided that poultry litter is a hazardous substance under CERCLA (City of Tulsa v. Tyson Foods, Inc., 2003). With this ruling, other courts may follow this precedent and conclude that poultry litter can be a hazardous substance when it is wrongfully applied to fields.
response costs
Under CERCLA, defendants can be ordered to pay response costs. The act defines these as all costs of removal or remedial action incurred by the government and any other necessary costs of response incurred by any other person consistent with the national contingency plan. These costs would include expenses in designing and implementing actions to remove the contaminants (City of Waukegan v. National Gypsum Co., 2008). Response costs do not include diminution of property value and lost income.
Federally permitted releases
CERCLA contains two exceptions under which the application of poultry litter may not constitute a prohibited release of a hazardous substance. The first exception is for federally permitted releases. Discharges of hazardous substances under CERCLA can be sanctioned through permitting provisions of other federal laws (US Code, Reference US CODE2000, title 42). Federally permitted releases include discharges in compliance with a National Pollutant Discharge Elimination System (NPDES) permit issued under the Clean Water Act (US Code, Reference US CODE2000, title 33). A second exception that may operate to defeat the CERCLA allegations against poultry defendants involves the application of fertiliser. CERCLA provides that a release does not include ‘the normal application of fertiliser’ (US Code, Reference US CODE2000, title 42).
producers with NPDES permits
Poultry producers who have secured an NPDES permit or corresponding state permit under the provisions and regulations of the Clean Water Act may qualify for CERCLA's permit defence. Since dry poultry litter was not regulated under the Clean Water Act until 2004 (EPA, 2003), few producers have NPDES permits. In Oklahoma, registered poultry operations have nutrient management plans and receive training on poultry waste handling under state law (Oklahoma Statutes, Reference OKLAHOMA STATUTES2008). These regulatory efforts are not the equivalent of an NPDES permit. The permits secured by producers in Arkansas under the Arkansas Soil Nutrient Application and Poultry Litter Utilisation Act are not NPDES permits (Arkansas Code Annotated, Reference ARKANSAS CODE ANNOTATED2008). Given the lack of NPDES permits by poultry producers, the CERCLA permit defence is not helpful in reducing liability for contamination damages that have already occurred. However, the poultry industry may want to consider having individual producers secure NPDES permits so that the defence would be available.
Under NPDES permits, animal production areas cannot have a discharge. Thus, animal confinement areas, manure storage areas, raw materials’ storage areas, and waste containment areas are not allowed to discharge into federal waters. However, areas where manure (including poultry litter) is applied to the land for crop production may have discharges (USCFR, 2008). Under the Clean Water Act, permittees are allowed to have agricultural storm water discharges. Federal regulations for CAFOs define agricultural storm water discharges to include any discharges from land areas under the control of a CAFO where the manure has been applied in accordance with site-specific nutrient management practices that ensure appropriate agricultural utilisation of the nutrients.
Discharges from the land application of manure qualify as agricultural storm water discharges when CAFO owners and operators have implemented nutrient management plans under which manure is used to provide suitable nutrients for plant growth and crop production. In developing the regulations for CAFOs, the EPA recognised that the use of animal manure for producing crops was a reasonable practice (EPA, 2001). Applying manure to land is a sustainable agronomic practice that has considerable value in providing nutrients for crop production and contributing to soil fertility (Bakhsh et al., Reference BAKHSH, KANWAR and KARLEN2005; Ramos et al., Reference RAMOS, QUINTON and TYRREL2006). By limiting applications of nutrients necessary for agronomic production, permittees’ nutrient management plans prevent unacceptable disposal practices.
The federal water quality regulations for CAFOs clearly sanction the application of poultry litter as a fertiliser, so long as it is applied under an NPDES permit pursuant to an approved nutrient management plan (USCFR, 2008). A plan's best management practices establish the use of litter as a fertiliser. Discharges of nitrogen, phosphorus, and other pollutants from litter applications to fields are allowed for permitted CAFOs if the discharges qualify as agricultural storm water discharges. Conversely, discharges of pollutants from litter applied to land outside the directives of a nutrient management plan do not qualify as agricultural storm water discharges. Applications of litter contrary to a nutrient management plan may not constitute an application of fertiliser, and discharges from these applications would be in violation of the Clean Water Act.
Poultry producers who have been issued an NPDES permit can qualify for the CERCLA permit defence. The defence will depend on a permittees compliance with the effluent limitations set forth in an approved NPDES permit, including application of poultry litter according to the permittees nutrient management plan. Permittees complying with NPDES permits can have agricultural storm water discharges containing nutrients, and the CERCLA permit defence should shield them from response costs related to the sanctioned discharges. The permit defence would not relieve a permittee from response costs related to applications of litter made before the applicator secured an NPDES permit.
application of poultry litter as fertiliser
A second exception from CERCLA liability concerns releases accompanying the normal application of fertiliser. The use of poultry litter as fertiliser for crop production is an established agricultural practice (EPA, 2003). Poultry litter supplies nutrients and organic matter, augments the soil's water-holding capacity, and increases the soil's fertility (Araji et al., Reference ARAJI, ABDO and JOYCE2001; EPA, 2003). Through appropriate husbandry practices, poultry producers can recycle nutrients contained in poultry litter as fertiliser for crop growth. Oklahoma claims in Tyson Foods I that litter has been over-applied on fields in the watershed and thus was disposed of as a waste (Tyson Foods I Response, 2009).
Not all applications of poultry litter qualify as applications of fertiliser. An overabundance of nutrients, which may exist on a farm or in a region where large quantities of animals are being raised, may mean that producers are disposing poultry litter in a manner detrimental to the environment (Sharpley, Reference SHARPLEY1999; Green et al., Reference GREEN, ARNOLD, WILLIAMS, HANEY and HARMEL2007). Whenever excessive amounts of nutrients accumulate in soils, it may be argued that producers applying litter are not engaging in normal fertiliser application for sustainable crop production (Petersen et al., Reference PETERSEN, SOMMER, BELINE, BURTON, DACH, DOURMAD, LEIP, MISSELBROOK, NICHOLSON, POULSEN, PROVOLO, SORENSEN, VINNER, WEISKE, A, BERNAL, BOHM, JUHASZAND and MIHELIC2007). Rather, these producers may be disposing litter as a waste by-product. Short-term profitability objectives may interfere with long-term productivity and environmental quality (Kingery et al., Reference KINGERY, WOOD, DELANEY, WILLIAMS and MULLINS1994).
Distinguishing between normal and abnormal applications of poultry litter as fertiliser may be analogised with decided cases concerning the CERCLA petroleum exclusion (Dartron Corporation v. Uniroyal Chemical Company, 1996). Petroleum is excluded from CERCLA's definition of hazardous substances (US Code, Reference US CODE2000, title 42). However, if petroleum is altered from its virgin state, it no longer qualifies under the exclusion (Esso Standard Oil Company v. Perez, 2004). This suggests that poultry litter applied for crop production is fertiliser. Nevertheless, if litter is applied incorrectly or is over-applied to a field, the litter would not qualify under the CERCLA fertiliser exclusion. Because the normal application of fertiliser does not include levels exceeding a crop's phosphorus needs, over-application of litter would not qualify under the fertiliser exclusion (City of Tulsa v. Tyson Foods, Inc., 2003).
Some states have recognised that the application of manure to land is an established and recommended practice and have delineated criteria to advance sustainability (Illinois Compiled Statutes Annotated, Reference ILLINOIS COMPILED STATUTES ANNOTATED2008). Thirty-four states have enacted regulations requiring CAFO wastes be applied to land at agronomic rates (EPA, 2001). Both Oklahoma and Arkansas, the two states in the watershed allegedly contaminated by the Tyson Foods I defendants, have special rules governing the application of poultry litter (Arkansas Code Annotated, Reference ARKANSAS CODE ANNOTATED2008; Arkansas Natural Resources Commission Rules, Reference ARKANSAS NATURAL RESOURCES COMMISSION RULES2008; Oklahoma Administrative Code, Reference OKLAHOMA ADMINISTRATIVE CODE2008; Oklahoma Statutes, Reference OKLAHOMA STATUTES2008). The state regulations impose requirements through nutrient management plans that limit the amounts of poultry litter that may be applied to lands. Litter cannot be applied fields where a listed nutrient is already present in sufficient quantities for crop growth.
Most state nutrient and manure management provisions delineate additional practices that foster the use of nutrients for crop production. These practices might also be considered to be part of ‘the normal application of fertiliser.’ Litter cannot be applied when the ground is saturated (Arkansas Natural Resources Commission Rules, Reference ARKANSAS NATURAL RESOURCES COMMISSION RULES2008; Oklahoma Statutes, Reference OKLAHOMA STATUTES2008). On lands prone to flooding, manure application through injection or incorporation into the soil may be required (Illinois Compiled Statutes Annotated, Reference ILLINOIS COMPILED STATUTES ANNOTATED2008). To minimize runoff of nutrients, states limit the application of manure on frozen ground (Arkansas Natural Resources Commission Rules, Reference ARKANSAS NATURAL RESOURCES COMMISSION RULES2008; Oklahoma Statutes, Reference OKLAHOMA STATUTES2008; Illinois Compiled Statutes Annotated, Reference ILLINOIS COMPILED STATUTES ANNOTATED2008). Another provision may prohibit manure application in road ditches (Minnesota Rules, Reference MINNESOTA RULES2003).
Under the CERCLA fertiliser exception, poultry producers would show that they are applying their litter as a fertiliser and that their applications of litter to land qualify as normal applications of fertiliser. Proof of this defence would involve evidence that all litter was applied according to a nutrient management plan under which the nutrients of the litter were required for plant growth and crop production. Producers would also show that they complied with other state recognised practices that are part of good husbandry practices in using litter as a fertiliser. Producers successful in convincing a trier of fact (jury) that they applied their litter as a fertiliser should qualify for the fertiliser exception and not incur liability under CERCLA.
Conclusions
The Tyson Foods I lawsuit in the United States presents some novel allegations in seeking recovery and damage costs for contamination problems. Conflicting allegations and factual information offered by the plaintiffs and defendants present a possibility of liability, but are not conclusive. While evidence shows poultry litter as a useful by-product being applied to land to enhance crop production, this does not preclude liability under CERCLA. The judiciary's broad interpretation of hazardous substances under CERCLA means an acceptable and widespread substance can be hazardous. In a similar manner, the judiciary has interpreted the definition of ‘facility’ under CERCLA expansively to include polluted water bodies, valleys, and mountain basins. Within these parameters, a watershed might be found to be a ‘facility’ and inappropriate application of poultry litter may constitute a ‘release’ under CERCLA.
While the allegations of the state of Oklahoma support a possible finding of liability, it is not clear that factual evidence supports the state's claims. Evidence presented by the defendants supports a contrary conclusion. If Oklahoma presents evidence to establish the CERCLA prerequisites, a jury will need to decide which facts are most credible. Integrators have a strong argument that there is insufficient evidence showing that they are ‘covered persons’ under the act. Allegations that integrators knowingly placed birds at facilities in the watershed do not establish that they arranged for the disposal of a ‘hazardous substance owned or possessed by such person . . .’ (US Code, Reference US CODE2000, title 42). Unless further evidence is presented, and not simply allegations that integrators should have known that the excrement from their birds would be applied as a waste, it should be found that the integrators are not covered by CERCLA.
The contractual arrangements between integrators and producers are not that different from franchise agreements for restaurants, hotels, and other activities. Franchisers carefully structure contracts to maintain standards and quality control while allowing franchisees to exercise control over their operations. For accidents occurring on a franchisee's property, such as a patron falling in a restaurant, the franchiser does not incur liability. With respect to poultry integrators, producers have complete control over poultry litter. Litter is a useful by-product from raising birds, and the placement of birds is not designed to result in the improper disposal of litter. If there is contamination from the application of poultry litter, it is a result of producers wrongfully disposing of their litter. Thus, it may be inferred that integrators are not covered persons under CERCLA so cannot incur liability for the act's response costs.
Although integrators in the Tyson Foods I lawsuit may not incur liability under CERCLA, poultry producers applying litter to land might be found to be covered persons. This means that producers could incur liability for response costs. Therefore, two exceptions that may provide a defence for persons applying poultry litter following acceptable practices are important. The permit defence is available for producers complying with NPDES permits secured under the Clean Water Act. Although these producers may have agricultural storm water discharges, because these discharges are allowed under their NPDES permits, the producers have a defence against CERCLA allegations. The second exception is the fertiliser exclusion. Producers who apply their litter as fertiliser and comply with good husbandry practices should be able to qualify for CERCLA's exclusion and not incur liability under CERCLA.
Despite these exceptions, the Tyson Foods I lawsuit suggests that it is incumbent on producers and the industry to recognize that public concerns about environmental contamination might be addressed voluntarily by desisting from the over-application of litter on fields. Alternatively, the industry may be able to do more to assure producer compliance with applicable regulations. The poultry industry may be able to do more to reduce contaminants from entering federal waters. First, all producers should be employing best management practices in applying litter on their fields pursuant to their nutrient management plans. Compliance with these plans should enable producers to qualify for the fertiliser exception. Producers with NPDES permits could also qualify for the CERCLA permit defence. Second, integrators may want to be more vigilant in monitoring practices of their producers, while simultaneously avoiding involvement in management decisions. Producers who fail to comply with their nutrient management plan's best management practices should not be extended new production contracts.
Finally, governmental enforcement efforts may be needed to preclude shirkers from engaging in practices that offend existing laws. Producers who violate laws or regulations and cause contamination damages may cause the public to clamour for even more regulations. Through increased voluntary adoption of good husbandry practices, compliance with applicable regulations, and additional monitoring efforts, the poultry industry might alleviate pollution problems.
