County Liable to Developer for Migration of Landfill Gas

A federal district court ruled that a Maryland county government was liable to a developer for damages resulting from the migration of landfill gas from a closed landfill to a planned development community. The court held that developer was entitled to recover response costs under CERCLA and that the subsurface migration of methane gas and VOCs from the landfill constituted a trespass and public nuisance. The court also found that the county had violated certain provisions of Subtitle D of RCRA.

In Marcas, LLC v Board of County Commissioners of St. Mary’s County, 2011 U.S. Dist. LEXIS 110378 (D. Md. 9/28/11),  the County of St. Mary’s (County) had owned and operated the St. Andrews Landfill from 1974 to 1999. Three waste disposal cells had been closed in 1997 and the remaining disposal cell was closed in 1999. A C&D disposal cell was closed in 2001.

Beginning in 1994, groundwater sampling began detecting elevated levels of volatile organic compounds (VOCs) in groundwater monitoring wells located at the landfill. One off-site well that was located within 200 of the future development parcel also had elevated levels of PCE and vinyl chloride. In November 1996, representatives of Marcas LLC (Marcas) and the St. Mary’s County Department of Public Works and Transportation (DPWT) met to discuss the landfill condition since Marcas sought to have a 227-acre parcel rezoned for a Planned Unit Development (PUD) to be called the First Colony Planned Development Unit. After the rezoning was approved, Marcas acquired title in April 1998.

In 1999, the Maryland Department of the Environment (MDE) inspected the landfill and observed several leachate seeps. The MDE ordered the County to contain and collect the leachate. In 2001, the County retained a consultant to conduct landfill gas sampling from the perimeter of the landfill.  Methane was detected at 100% of the lower explosive level (LEL) in a number of locations. After a second round of sampling largely verified the initial results, the DPWT proposed to enhance the existing methane collection system by installing mini-blowers at the vent flares located within the disposal cells.

The MDE approved the proposed upgrade in 2002. In December 2002 the DPW&T asked plaintiff to enter into an access agreement to implement a soil has monitoring plan approved by the MDE. In January 2003, the director of the DPW&T allegedly sent a letter to plaintiff that landfill gas has migrated approximately 200 feet beyond the landfill property boundary and that additional sampling may be required. Plaintiff denied it receiving this letter and claimed it did not learn of the letter until September 2004. The timing of the notification became significant because Marcas agreed to sell 240 building lots in August 2004 to Lincoln Property Company Southwest, Inc. (“Lincoln”) who intended to construct new homes for the U.S. Navy.  The January 2004 letter was discovered during Lincoln’s environmental due diligence.

Following discovery of the methane issue, plaintiff retained its own consultant to fill data gaps. A dispute subsequently arose about the extent of actions required to mitigate the methane and the VOCs. The engineering consultant retained by Marcas  recommended enhancements to the Landfill Gas Remediation Plan to facilitate the development, including an active gas extraction system be installed that would cost approximately $950K. The County, on the other hand, wanted to install a passive system at a cost of approximately $200K that could be upgraded to an active system if subsequent sampling indicated additional measures were required. Marcas authorized an additional investigation to try to convince the County to implement the more robust methane collection system. The County informed Marcas that it while it appreciated the additional information, it would proceed with the previously-approved remedy.  Interestingly, when Marcas told the County that it could be potentially damaged by the methane gas because Lincoln was backing away from developing two of the three areas to be developed, the County’s response was to assert that plaintiff had acquired the tract and  entered into the development agreements with full knowledge of the landfill and the potential for the gas to migrate to adjacent properties. The County later amended the rezoning approval to reconfigure the development so that commercial development would occur at the portion of the property impacted by the landfill gas instead of residences.

The landfill gas collection system became operational in the spring of 2007 but levels of methane gas continued to be detected about the 5% LEL in the subsurface soils at the Marcas property.  Marcas then filed its lawsuit. In a 56 page decision, the court denied the County’s motion for summary judgment and granted portions of plaintiff’s motion for summary judgment. Following are some of the more interesting rulings.

On the CERCLA claim, the County argued that Marcas costs were unnecessary because Marcas knew as early as 2002 that the County had already implemented a monitoring plan and had selected a remedial plan. However, the court said there was nothing in CERCLA preventing an owner or operator from initiating its own investigation.

The county further argued that the declarations and invoices submitted to support the motion for summary judgment did not comply with the NCP. The court also rejected this argument, saying the County has apparently overlooked two reports that described in detail the release, the probable nature of the release and recommended remedial actions.

Finally, the County contended that the reports were not consistent with the NCP because they were generated in part for the commercial development of the property and not due to any threat to public health.  The Court said there were some documents prepared for Marcas prior to the time it was notified by the County that sampling had confirmed landfill gas had migrated to its property. However, the court said that at this stage of the litigation, all Marcas had to show was that it had incurred some costs consistent with the NCP to maintain its CERCLA claim. Thus, the court ruled that Marcas was entitled to recover its investigative costs incurred after the date it was received the notice from the County that were consistent with the NCP.

On the nuisance claim, the court ruled that Marcas had demonstrated the release of landfill gas had interfered with its use and enjoyment of its property. As support, the court pointed to a “Supplemental Site Evaluation” prepared for Marcas that showed that the project design had to be changed because of the presence of the landfill gas. In particular, the report recommended that no residences with basements or other subsurface structures be constructed in areas impacted with landfill gas.

On the trespass claim, the County claimed that Maryland law did not recognize subsurface migration as a trespass. Even if Maryland law did recognize migration as a trespass, the County asserted that Marcus did not prove that the trespass was intentional. The court disagreed, holding that all that was required was to show an unpermitted intrusion that was done in a negligent or intentional manner.

A number of other issues remain to be decided including the amount of the CERCLA response costs and the damages relating to the nuisance and trespass claims. Stay tuned.

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