Superfund Update
U.S. Supreme Court Limits CERCLA Contribution Claims
In a decision that has broad implications for PRPs (Potentially Responsible Parties) planning to seek contribution from others for costs incurred when voluntarily cleaning up contaminated property, the U.S. Supreme Court reversed long-standing contribution practices in many circuits and cast doubt on when a PRP can sue to recover response costs from former owners that exceed the PRP’s equitable share of the cost.
The court ruled on December 12, 2004, that companies that want to voluntarily clean up their polluted land and sue former owners to share the costs under the Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), may not be able to collect unless the
federal government has first sued the company to compel the cleanup. The case is Cooper Industries, Inc. v. Aviall Services, Inc. (No. 02-1192)
The case concerns four contaminated aircraft engine maintenance sites in Texas. Cooper Industries, Inc. owned and operated those sites until 1981 when it sold them to Aviall Services, Inc. Aviall operated the four sites for a number of years. Ultimately, Aviall discovered that both it and Cooper had contaminated the facilities. Aviall notified the state of the contamination. The state ordered Aviall to clean up the site and threatened to pursue an enforcement action if the company failed to undertake remediation. Neither the state nor the EPA, however, took judicial or administrative measures to compel cleanup.Aviall cleaned up the properties under the state’s supervision incurring approximately $5 million in cleanup costs. Aviall then sued Cooper under the contribution provisions of CERCLA (Section
113(f)) seeking to recover cleanup costs.
The Cooper Industries decision is significant because it discourages PRPs from voluntarily remediating
or complying with a government order to remediate contaminated sites, as they will no longer be able to seek restitution from other PRPs for the costs incurred. It also vests the United States Environmental Protection Agency (USEPA) with increased bargaining power because USEPA decides which PRPs to name in an order and whether to grant settlement.
In response to the Court’s decision, industry sources say they will push Congress to amend the Superfund law. The industry sources say the high court's decision may torpedo EPA's successful voluntary cleanup efforts because it will force
companies to go through expensive and timeconsuming
litigation to win a cleanup or other
legal order so they can retain the right to sue other polluters.
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