The Continuing Saga of Cost Recovery and Contribution Claims Under CERCLA Sections 107 and 113

Posted on May 4, 2011 by Jarred O. Taylor, II

In his July 8, 2010 ACOEL blog entry, Fournier “Boots” Gale of this firm reported on the then-most recent court decision dealing with whether and how a plaintiff could recover, under CERCLA, costs it incurred for a cleanup performed under a consent decree or administrative settlement. One of the more intriguing developments for CERCLA practitioners has been the tension between and radical changes to cost recovery or contribution claims under 107 and 113 of CERCLA. Boots reported on the July 2, 2010 decision by a federal judge here in Alabama to grant complete summary judgment to defendants, finding that a party compelled to incur such costs can only proceed under Section 113, and not 107. Because the defendants in that case had also entered into an administrative settlement with EPA for the same site, thus obtaining Section 113 contribution protection, all of plaintiffs’ claims were dismissed. That case is still on appeal to the 11th Circuit. The issue decided by the Alabama federal court--whether compelled costs were recoverable under Section 107, 113, or both—had been left unanswered by the United States Supreme Court in United States v. Atlantic Research Corp., 551 U.S. 128 (2007). Courts have been struggling with this issue ever since.

 

The latest opinion on this issue is from the 8th Circuit, in Morrison Enterprises, LLC v. Dravo Corp., 2011 WL 1237526 (8th Circuit, April 5, 2011). The 8th Circuit was the federal circuit court whose decision was affirmed in the Atlantic Research case, so the result in this case is not surprising. Noting the question unanswered by the United States Supreme Court in Atlantic Research, the Morrison Court, as did the federal court in Alabama, concluded that Section 113 was the appellants’ exclusive remedy, confirming the summary judgment granted by the district court below on the Section 107 claim. One of the Morrison appellants argued to the district court that one of the contaminants it cleaned up was totally unrelated to its operations and, thus, the costs it incurred related to that contaminant were “voluntary” and thus recoverable under Section 107. Interestingly, the plaintiffs in the Alabama case made the same argument. Both the Alabama and 8th Circuit Courts rejected the argument because all of the work was performed under and pursuant to a consent decree, which was broad enough to encompass the costs for cleaning up the contaminant sought to be carved out as voluntary. In effect, even if one wishes to argue later that some costs incurred were for a contaminant for which one had no responsibility, if the costs incurred are pursuant to that consent decree, or administrative settlement, then the costs are not incurred voluntarily and a Section 107 claim is still barred. In a final blow to the cost recovery efforts in this case, the appellant attempted to amend its complaint to assert a Section 113 claim after summary judgment had been entered on its 107 claim, but the district court denied it as untimely (and the Morrison court affirmed on this issue, too).



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