The Massachusetts Supreme Judicial Court (SJC) upheld a statutory interpretation by the Massachusetts Department of Environmental Protection (MassDEP) that the statutory definition of “oil” does not include leaded gasoline. As a result, contamination from leaded gasoline released from a gas station was not eligible for less stringent remediation standards applicable to “oil” releases.  Based on the SJC’s reasoning, this ruling may also be applicable to gasoline containing other additives (such as MTBE).

At issue in Peterborough Oil Co., LLC v. Dept. of Environmental Protection (SJC-11851, June 6, 2016) is the Massachusetts “mini-CERCLA” statute, M.G.L c. 21E, which distinguishes between “oil” and “hazardous materials” when establishing liability for remediating environmental contamination.  Drawing on that statutory distinction, MassDEP revised its cleanup regulations (the Massachusetts Contingency Plan, 310 CMR 40.0000 (MCP)) to impose less stringent cleanup requirements for releases of oil (vs. hazardous materials releases) in so-called Zone II protection areas for public drinking water wells.

MassDEP concluded that the leaded gasoline in the Peterborough case was not “oil” because the lead it contained is separately identified as a “hazardous material” under Chapter 21E.  MassDEP therefore determined that additional remediation was required beyond what the plaintiff had already conducted.  The plaintiff sought judicial review of MassDEP’s determination, and then appealed after the trial court ruled in favor of MassDEP.

The SJC concluded that Chapter 21E was ambiguous on the issue, as it did not specifically address how to classify commingled “oil” and “hazardous materials.” The Court noted that Chapter 21E does not incorporate the “petroleum exclusion” found in the federal Superfund statute, and therefore Chapter 21E creates “greater liability for cleanup of oil spills than does CERCLA.”

After reviewing the legislative history and MassDEP’s rationale for determining that petroleum hydrocarbons containing hazardous materials like lead should be excluded from the definition of “oil,” the Court deferred to the agency’s interpretation. Specifically, the Court concluded that MassDEP’s “interpretation advances its mandate to ensure the cleanup of spills posing a threat to public health and safety, while reasonably permitting less stringent remediation based on the scientific studies it conducted concerning the observed levels of contamination in the public water supply.”

This case not only confirms the SJC’s general willingness to defer to MassDEP on regulatory issues arising under Chapter 21E, but also indicates that gasoline containing other “hazardous material” additives like MTBE, ethanol, and butanol would likewise not be deemed “oil” under Chapter 21E. Parties who own or are redeveloping gasoline-contaminated sites in Massachusetts should evaluate the implications of this decision to their remediation plans.