If you settle with the State EPA in your jurisdiction and perform a cleanup under State regulatory statutes, can you recover costs from prior a owner and/or operator?
This is an issue that federal courts are grappling with in the aftermath of the U.S Supreme Court Ruling in Cooper Industries, Inc. v. Aviall Services, Inc. In Aviall, the Supreme Court limited the rights of a potentially responsible party (PRP) under CERCLA to recover its costs by bringing a contribution claim under Section 113(f) of the Act. The Court ruled that a PRP could not sue other owners/operators (PRPs) to recover its costs under Section 113(f) unless it had settled its CERCLA liability with the government.
After this ruling, companies (PRPs) voluntarily performing cleanups were potentially left without any means of seeking contribution unless the government had already sued them or they had reached a settlement.
In 2007, the U.S. Supreme Court found that a PRP could still bring an action under Section 107 without having to wait for government enforcement. See, United States v. Atlantic Research Corp.
However, you are only entitled to bring Section 107 claims as long as you haven’t settled with the government.
What about State Settlements?
After Aviall, an issue that was still left open was whether a PRP that reached a settlement with the State EPA under State specific statutory cleanup authorities could seek contribution from other PRPs. For example, in Ohio, R.C. 3734.20 provides some authority to Ohio EPA to seek cleanup of hazardous waste. If you settle with Ohio EPA under this authority it can you seek contribution under Section 113 of CERCLA?
This issue has yet to be decided in the Sixth Circuit. However, a split has emerged amount the other circuits.
The Second Circuit appears to have answered "no" to this question initially. In two cases, Consolidated Edison Co. of N.Y. Inc. v. UGI Utils. Inc. and W.R. Grace & Co. v. Zotos International Inc.,, the Second Circuit held that Section 113(f) creates a contribution right only after the resolution of claims brought under CERCLA, not a state statute.
Recently, the Third Circuit found the opposite result. In Trinity Industries v. Chicago Bridge & Iron, the Third Circuit held that Section113(f) of CERCLA allows a PRP to seek contribution from another PRP for cleanup of a contaminated Pennsylvania site even though the PRP seeking contribution resolved its environmental liability with Pennsylvania regulators under a pair of state statutes.
Due to the large cost of environmental cleanup, it makes sense to explore all possible remedies and rights of recovery. In regards to cleanup of contaminated sites, CERCLA represents the most complicated statute with the broadest authorities and the most litigation. It has been more than 30 years since passage CERCLA, yet the courts are still deciding what rights parties posses to recover costs or pursue cleanup.