Article by Susan M. Cooke, Brian A. McGill and Daphne W. Trotter
The Supreme Court confirms private party right to recover cleanup costs under Superfund law.
On June 11, 2007, the Supreme Court issued its second decision on what Superfund remedies are available to parties seeking to recoup cleanup costs at a contaminated site. In United States v. Atlantic Research Corp., the Court held that the "plain language" of Section 107 of the Superfund statute "authorizes cost recovery actions by any private party," including those responsible for the contamination. The Court’s 2004 decision in Cooper Industries, Inc. v. Aviall Services, Inc. had precluded the owner of a contaminated site from using the contribution remedy found in Section 113(f) of Superfund to recover cleanup costs because the owner had taken action voluntarily and Section 113(f) could only be used during or following a civil action brought under Section 106 of Superfund.
Prior to the Aviall decision and after the 1986 amendments to Superfund which added the Section 113 contribution provision, the great majority of circuit courts had precluded cost recovery actions under Section 107. However, following the Supreme Court’s decision in the Aviall case, several of those courts concluded that Section 107 did provide an implied right to bring a cost recovery action, at least in some instances. The Atlantic Research decision now settles the split among the circuits. The Court noted that Sections 107 and 113(f) provide two "clearly distinct" remedies—one for recovering cleanup costs under Section 107 regardless of liability, and another for recovering a share of such costs by a liable party that has paid more than its fair share.
The Atlantic Research decision leaves some important questions unanswered. First, the opinion notes that Section 113(f) prohibits contribution claims against parties who have settled with the government. However, the opinion does not preclude parties to a Section 113(f) settlement from then litigating under Section 107 to recover additional cleanup costs. Second, the opinion declined to address the question of whether parties to a judicial consent decree are eligible to utilize Section 107 as an alternative to a Section 113(f) contribution action, a less attractive option since a Section 113(f) claim has a shorter statute of limitations and only that portion of the costs shown to be excessive can be recovered. Third, the Court did not render an opinion on whether Section 107 provides for joint and several liability. Thus, while the decision should encourage more voluntary cleanups, the uncertainties that still exist could result in increased litigation as parties seek to enhance their recovery of cleanup costs.
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Excess insurers are taking the position that a policyholder which settles for less than the full amount of the policy limits has waived its right to obtain coverage from any of the high level insurers.