The Court of Appeals of the State of São Paulo (TJ-SP) is due to decide in August whether it will accept the an Ancillary Proceeding to Resolve Repeat Lawsuits (IRDR) to standardize case law with respect to the remediation of contaminated areas in São Paulo.

The Public Prosecutor of the State of São Paulo (MP-SP) requested the IRDR in order to solidify the TJ-SP's understanding with respect to the standards and limits of recovery of contaminated areas in the state, given the large number of civil inquiries and public civil actions litigating this subject matter. The IRDR is a novelty created by the 2015 Code of Civil Procedure and it is feasible when there are several repeated lawsuits disputing the same issue of law that may jeopardize equal legal treatment or legal certainty.

In this specific case, the MP-SP proposes discussion of various controverted legal arguments regarding the management of contaminated areas:

  • Comprehensive recovery of the contaminated area: the theory supported by the MP-SP is that the remediation should be comprehensive, comprising all types of environmental damages (property and non-property damages and intercurrent damages) and all means of repair (restoration, recovery, compensation, and indemnification). This theory would oppose the understanding of Companhia Ambiental do Estado de São Paulo (the Environmental Company of the State of São Paulo, or Cetesb) to the effect that rehabilitation according to the declared use of the area is reasonable, based on the levels of risk acceptable to human health.

  • Priority of decontamination measures: the plaintiff argues that the restoration and recuperation measures of the area (decontamination measures) can only be replaced by measures for containment, control, and engineering (control measures) if the economic and financial infeasibility of the decontamination measures is proven. It also sustains that the control measures are temporary and should be reviewed periodically.

  • Intercurrent damages: the MP-SP seeks formal recognition of intercurrent damages to the environment for the period in which the community was deprived of the environmental assets and resources due to the contamination. According to this understanding, any process of recovery of contaminated areas should provide for compensation and/or indemnification for intercurrent damages.

  • Separation of civil and administrative environmental liabilities: the MP-SP seeks to rule out the theory that conclusion of the administrative process of remediation of contamination conducted by Cetesb would exhaust (or at least mitigate) civil liability of the polluter for damage caused to the environment.

  • Restoration of water quality: the plaintiff argues that the management of groundwater contamination may only be concluded if the drinkability parameters of water bodies are reached. Pursuant to MP-SP, this understanding had been consolidated by Cetesb via the recent Board Decision No. 038/2017/C.

  • Application of new Cetesb guidelines to already concluded remediation processes: the proposal is to apply Board Decision No. 038/2017/C to all contamination management processes, including those that have already been completed, especially with respect to the recovery and restoration of groundwater quality.

The decision on the admission of the IRDR, which was assigned to Judge Marcelo Berthe, is scheduled for on August 10, by the Judicial Working Group on Environmental Law. In the event that the TJ-SP accepts the IRDR filing, it will suspend all repeated lawsuits in the State of São Paulo until there is a final decision on the merits of the IRDR, within a one-year limit.

For the decision on the merits, the reporting judge may hear testimony from experts on this subject matter during a public hearing, in addition to the parties involved. Once the IRDR has been adjudicated, the legal theory established thereby should be applied by all state judges and courts in repeated present and future cases.

When the case law of the TJ-SP on the legal issues raised is settled, it is expected greater predictability of outcomes in present and future actions, as well as in the management of public civil inquiries by the MP-SP. Considering the conflicting decisions on remediation of contamination and the recent rules for management of contaminated areas, the consolidation of a single understanding on this legal issue will establish the limits and standards for the conclusion of proceedings in the civil and administrative spheres.

However, there is a risk that the decision on the IRDR will cause uncertainty regarding the contamination management processes already concluded with the environmental agency, since the MP-SP requested the application of the new Cetesb guidelines to the remediation processes that have already been concluded.