WWII-Era Manufacturers Eye Federal Reimbursement For Environmental Cleanup Costs

Manufacturers grappling with the environmental consequences of World War II-era production may find their government supply contracts provide a legal basis for seeking costs recovery from the federal government. During World War II, the United States urgently demanded vast quantities of supplies and material to support the war effort. The response by American industry was overwhelming. Companies across nearly every sector of industry entered into contracts with the government to meet the industrial wartime demands at an unprecedented scale. Today, industry burdened by the modern environmental consequences of its war-time response need not shoulder the costs of environmental cleanup alone. Instead, manufacturers are dusting off their decades-old supply contracts to unlock remedies potentially available to them to ensure the United States pays its fair share for such costs. 

Companies seeking to hold the United States accountable for environmental contamination arising from World War II-era industrial activities may find a viable avenue under the Tucker Act, 28 U.S.C. § 1491. The Tucker Act grants the U.S. Court of Federal Claims jurisdiction over monetary claims against the federal government, including those based on contractual obligations. Recent decisions have affirmed that costs associated with wartime production may be reimbursable under World War II-era contracts. For example, in Shell Oil Co. v. United States, 751 F.3d 1282 (Fed. Cir. 2014), the Federal Circuit held that certain environmental cleanup costs could be “charged” back to the government pursuant to its contractual commitments. 

An essential first step in evaluating the viability of a Tucker Act claim is a close analysis of a company's World War II-era government contracts. These contracts varied significantly in form and substance. Some included express indemnity provisions, which may directly support a claim for reimbursement. However, relief may still be available even in the absence of an indemnity clause. Courts have recognized that contractual language shifting responsibility to the United States for additional taxes, fees or charges incurred by the contractor as a result of wartime activities may suffice. In Shell Oil, the Federal Circuit found that the government was contractually obligated to reimburse Shell for environmental cleanup costs, based on provisions requiring the government to cover certain expenses arising from wartime production.

Alternatively, the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly known as Superfund, provides a statutory framework for the cleanup of hazardous waste sites and imposes liability on parties responsible for contamination. CERCLA renders federal agencies subject to the same liability standards as private entities, including cleanup obligations at federally owned or operated facilities. Courts have applied this provision to World War II-era sites where the federal government exercised substantial control over industrial operations. In Exxon Mobil Corp. v. United States, 108 F. Supp. 3d 486 (S.D. Tex. 2015), the court found the government liable under CERCLA due to its operational involvement in wartime production facilities. Similarly, in FMC Corp. v. United States, the Third Circuit held the government jointly and severally liable under CERCLA as an “operator” and “arranger” of hazardous waste disposal at a rayon manufacturing facility, based on its pervasive control over production processes during the war.

The next step in pursuing recovery is determining whether the Tucker Act or CERCLA provides the appropriate legal avenue for your claims. Each path presents distinct procedural and strategic considerations. Because Tucker Act claims are grounded in contract law, they may be subject to different accrual and tolling rules than those governing CERCLA actions. Some parties have opted to pursue both avenues simultaneously, filing parallel proceedings in separate courts to preserve their rights under both statutory and contractual frameworks.

To date, most litigation involving World War II-era government contracts has centered on the recovery of environmental remediation costs. However, it is possible that other categories of costs may also be recoverable, including those related to government-imposed penalties, nuisance claims or even personal injury. While these theories of recovery are less established and have not been widely tested in court, they may present new opportunities for companies seeking to shift liability to the federal government. Success under these alternative theories would likely depend on the specific language of the wartime contracts and the extent of the government's involvement in the underlying conduct.

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