The United States Supreme Court has resolved a Circuit split involving Superfund liability, holding that section 107(a)(4)(B) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") authorizes any person to recover incurred cleanup costs from other potentially responsible parties (PRPs) in a separate cause of action. United States v. Atlantic Research Corp., 551 U.S. __, 127 S. Ct. 2331 (2007).
Sections 107(a) and 113(f) of CERCLA both provide for recovery of expenses related to cleanup of contaminated sites. Courts have held differing views, however, as to the scope of their coverage.
In 2004, the Supreme Court held that section 113(f) authorized PRPs to sue for contribution from other PRPs only after liability had been assessed under sections 106 or 107(a). See Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157, 161 (2004). This holding left unanswered the question of whether a nongovernmental person (including but not limited to PRPs) also may sue a PRP for recovery of "necessary costs of response incurred" (as opposed to contribution based on inequitable apportionment of costs) under section 107(a)(4)(B). (Section 107(a)(4)(A) authorizes governmental entities to recover all incurred costs).
A Circuit split resulted, with the U.S. Courts of Appeal for the Second and Seventh Circuits concluding that section 107(a) authorizes a separate cause of action, and the Third Circuit holding that Section 113(f) was the exclusive remedy for PRPs seeking to recover from other PRPs for cleanup costs.
In this case, the plaintiff, Atlantic Research, sued under both CERCLA sections. Cooper Industries vitiated the section 113(f) action because liability had not yet been assessed under sections 106 or 107. The defendant successfully moved to dismiss the remaining section 107 claim.
The Eighth Circuit reversed, adopting the reasoning of the Second and Seventh Circuits and holding that section 107(a) authorizes a PRP to sue another PRP for cleanup costs. The Supreme Court affirmed, resolving the split in authority.
In a unanimous opinion authored by Justice Thomas, the Supreme Court relied on the plain language of the statute and held that section 107(a)(4)(B) authorized a cause of action for recovery of incurred costs to "anyone except the United States, a State or an Indian tribe—the persons listed in [Section 107(a)(4)(a)]." Atlantic Research, 127 S. Ct. at 2336. Responding to concern that this holding would create a disincentive for PRPs to settle with the government because PRPs still could be exposed to section 107 liability, the Supreme Court observed that a defendant in a section 107 recovery action could counterclaim under the contribution provision of section 113(f) and avoid liability disproportionate to its responsibility.
The court also noted that settlement remained beneficial to PRPs because it "resolved liability as to" the government and provided "protection from contribution suits by PRPs that have inequitably reimbursed the costs incurred by another party." Id. at 2339.
According to commentators, Atlantic Research resolved an important question with respect to the viability of section 107 cost-recovery claims, but in so doing, created uncertainty as to the rights of parties settling with the government.
This article is presented for informational purposes only and is not intended to constitute legal advice.