What Is CALA?
The Controlled Allocation of Liability Act (CALA) is a voluntary process that allows potentially liable persons (PLPs) to petition for an allocation of liability as an alternative to the strict, joint and several liability provisions included in CECRA. CALA provides a streamlined alternative to contribution litigation that involves negotiations designed to allocate liability among persons involved at facilities requiring cleanup, including bankrupt or defunct persons. Cleanup of these facilities must occur concurrently with the CALA process and CALA provides the funding for the orphan share of the cleanup. Since CECRA cleanups typically involve historical contamination, liable persons often include entities that are bankrupt or defunct and not affiliated with any viable person by stock ownership. The share of cleanup costs for which these bankrupt or defunct persons are responsible is the orphan share. The Department represents the interests of the orphan share.
The Montana Legislature added the Controlled Allocation of Liability Act (CALA; §§ 75-10-742 through 751, Montana Code Annotated (MCA)) to the Comprehensive Environmental Cleanup and Responsibility Act (CECRA; §§ 75-10-701 through 757, MCA), the state Superfund law, in 1997. The Department administers CALA including the orphan share fund it establishes.
The CALA Process
CALA was designed to be a streamlined, voluntary allocation process. For facilities where a PLP does not initiate the CALA process, strict, joint and several liability remains. This flowchart outlines the basic CALA process. The flowchart does not include some details like the additional fifteen days the PLPs have to designate a lead person if the Department rejects their original choice. However, the flowchart does provide all the major steps in the CALA process. The statute provides timelines for a person who has been noticed as being potentially liable as well as any potentially liable person who has received approval of a voluntary cleanup plan to petition to initiate the CALA process. CALA includes fourteen factors to be considered in allocating liability. Based on these factors, causation weighs heavily in allocation, but is not the only factor considered.
Current CALA Facilities
The Department currently has four facilities that have completed allocations under CALA:
The Corbin Flats facility is located just south of Helena, in and near the town of Corbin, in Jefferson County.
The S&W Sawmill facility is located in Darby, south of Hamilton, in Ravalli County.
The CMC Asbestos Bozeman facility is located in downtown Bozeman (Gallatin County).
The Joslyn Street Tailings facility is located in Helena (Lewis and Clark County).
The Orphan Share Fund
The orphan share fund is a state special revenue fund created from a variety of sources. The legislature has allocated funds from the resource indemnity and groundwater assessment taxes and from the oil and natural gas production taxes. The balance of the orphan share fund, as of December 1, 2015, is approximately six million dollars.
The lead PLP can request reimbursement once it completes the final remedial investigation report and again after it completes the final feasibility study report. Reimbursement is limited to those eligible costs incurred by the lead PLP for the preparation of these reports. The lead PLP can also request reimbursement for eligible costs once all remedial actions, except for operation and maintenance are complete. Reimbursement is limited to the orphan’s share of actual documented remedial action costs incurred after the date of the CALA petition.
If the lead PLP demonstrates a financial hardship, the Department may allow the submission of claims and may reimburse the claims prior to the completion of remedial actions.