Natural Resource Damage Assessments: Is Cooperation a Good Thing?

Abstract

Abstract It has been nearly 55 years since the United States enacted the Clean Water Act (CWA) in which natural resource damages (NRD) were codified.1 The NRD cause of action, originally derived from the public trust doctrine and common law, was later integrated into the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) in 1980 and into the Oil Pollution Act (OPA) in 1990. In response to the establishment of CERCLA and OPA, the U.S. Department of the Interior (DOI) was charged with developing and promulgating NRD regulations under CERCLA while the National Oceanic and Atmospheric Administration (NOAA) was charged to do so under OPA. Originally, DOI’s approach to assessing NRD under CERCLA emphasized monetary compensation, as this was a simple common denominator. Later, under OPA, NOAA’s regulations allowed NRD to be determined by, and compensated with, an ecological currency, e.g., using a Habitat or Resource Equivalency Approach (HEA2, REA3). This focus on putting restoration front and center in NRD assessments (NRDAs)4 was ultimately integrated into the DOI regulations in 2008. A critical and evolving aspect of NRDAs has been the concept of cooperation between the responsible party (RP) and the trustees in undertaking the NRDA (e.g., Israel 2006a; Connor and Gouguet 2005; Reinharz et al. 2005). This approach, supported by NOAA and others, is an effective means to identify and resolve legal uncertainties through stipulations and create working relationships that effectively focus on assessment resolution and restoration implementation; the ultimate outcome being a more rapid path to restoration and a significant decrease in litigation and other transactional costs. Over the past decade, the benefits of cooperative assessments have been questioned. It has been suggested that cooperative NRDAs do little to move the process forward in a timely manner. It has been further implied that cooperation equates to RPs paying up front for the cost of the assessment while the trustees conduct the assessment. In truth, both perspectives are correct, the reality being that cooperation means different things to different people. In this paper, we examine the historical underpinnings of the NRDA regulations, how this led to the development of the cooperative, restoration-based NRDA process, and the pros and cons of the cooperative NRDA process. We identify some of the inherent political, technical, cultural, and legal challenges with the cooperative NRDA paradigm as well as some of the benefits. Finally, we discuss the advantages and disadvantages of cooperation in the context of future NRDA cases, with an eye towards identification of specific processes that may help better understand or predict if cooperation is the best path forward for resolution of NRD liability.