This
is the first of a series of blog entries regarding the evolution of CERCLA §107
cost recovery claims and CERCLA §113 contribution claims. It will show that prior to SARA cost
recovery and contribution were distinct legal remedies by discussing the Pre-SARA
cases the Supreme Court cited in Cooper Industries,
Inc. v. Aviall Services, Inc., 543 U.S. 157, 161-62 (2004). The discussion is limited to these
cases cited by the Supreme Court because, by citing these decisions, the
Supreme Court was foreshadowing where the case law was likely to return. The overarching argument of this series
of blog entries is that cost recovery and contribution were distinct remedies
prior to SARA, then the Circuit Courts blurred the distinctions between these
two remedies, and now, starting primarily with Cooper Industries, the Supreme Court and other courts have begun
restoring those distinctions that existed prior to SARA.
The Comprehensive Environmental Response, Compensation, and
Liability Act (“CERCLA”) was passed in 1980, and at the time it was passed it
did not explicitly provide a right to contribution. Cooper Industries, 543 U.S. at 162.
Shortly
after CERCLA’s passage, the question emerged regarding whether it provided
private parties with a right to cost recovery. This question was answered in the affirmative. Walls v. Waste Resource Corp., 761 F.2d 311, 317-18 (6th Cir., 1985) (finding a private
right to cost recovery under CERCLA § 107(a)(4)(B)); City of Philadelphia v. Stepan Chemical Co., 544 F.Supp.
1135, 1139-42 (E.D.Pa., 1982) (same); Wickland
Oil Terminals v. Asarco, Inc.,
792 F.2d 887, 890 (9th Cir., 1986) (same); Cooper Industries, 543 U.S. at 161-62
(citing Walls, City of Philadelphia and Wickland
Oil for this proposition); see also, United States v. New Castle County, 642 F.Supp. 1258, 1261-62, 1267-69 (D.Del., 1986) (recognizing a right
to cost recovery under CERCLA § 107(a)(4)(B), and, as discussed below, finding
a right to contribution).
The
question regarding whether a PRP could pursue cost recovery was also litigated
and answered in the affirmative. City of Philadelphia, 544 F.Supp. at
1139-42 (the court held the liability (or potential liability) of the plaintiff
did not prevent it from being able to bring a cost recovery action.); see also, Cooper Industries, 543 U.S. at 161-62. This private right of cost recovery accrued when a person
incurred cleanup costs and damages and the relief sought was reimbursement of
those costs and damages incurred. See Wickland Oil, 792 F.2d at 888-92; City of Philadelphia, 544 F.Supp. at 1139, 1142-43; Walls, 761 F.2d at 314, 317-18; Cooper Industries, 543 U.S. at 161-62.
Additionally, shortly after CERCLA’s passage, “the separate
question” emerged regarding whether a private party that “had been sued in a
cost recovery action” could seek contribution. This question was also answered in the affirmative. Cooper Industries, 543 U.S. at 161-62 (citing Asarco, infra, New Castle, supra, and Wehner, infra, for this proposition); see also, Colorado v. Asarco, Inc.,
608 F.Supp. 1484, 1490 (D.Colo., May 13, 1985) (finding a right to
contribution as a matter of federal common law after being sued); New Castle, 642 F.Supp. at 1261-62,
1267-69 (same); Wehner v. Syntex
Agribusiness, Inc., 616 F.Supp. 27, 31
(E.D.Mo., April 1, 1985) (finding an implied right to contribution under
CERCLA § 107(e)(2) after being sued).
This right to seek
contribution arose after being sued.
These contribution claims were a way for the
contribution plaintiff—who was also a cost recovery defendant—to have the court
determine the equitable amount the contribution defendant(s) should pay only if
the contribution plaintiff is “held jointly and severally liable” with the
contribution defendant(s) to the cost recovery plaintiff. Asarco, 608 F.Supp. at 1485;
see also, Wehner, 616 F.Supp. at 31; New Castle, 642 F.Supp at 1261; Cooper Industries, 543 U.S. at 161-62 (characterizes these
decisions as allowing contribution after
being sued in a cost recovery action).
The right to obtain contribution
was contingent upon the suit being between parties who shared joint liability. Asarco, 608 F.Supp. at 1492
(“[i]t is settled law that contribution is only available where joint liability
can be imposed.”); see also, Wehner, 616 F. Supp. at 31 (The court
held, “CERCLA allows contribution among joint tortfeasors…”). In other words, the right to obtain contribution was contingent
upon the harm being indivisible. Asarco, 608 F.Supp.
at 1485 n.1 (noting that if the contribution plaintiffs could prove their
divisible share of the harm, then they could not obtain contribution); see also, Wehner, 616 F. Supp. at 31 (The court cited legislative history
testimony from Representative Al Gore about contribution being available to
“nonapportioned” defendants).
However, a person could seek contribution even if they contended
they are not entitled to contribution because the harm is divisible. See Asarco, 608 F.Supp. at 1485 n.1,
1492. In Asarco, the State of Colorado sued multiple defendants under CERCLA
§ 107. Id. at 1485. The defendants contended they were not
jointly and severally liable because the harm was divisible. Id. at 1485 n.1. The defendants sued third-parties for
contribution, and the third-party defendants moved to dismiss arguing there was
no right to contribution. Id.
1485-86. The court found that, if
the defendants could prove their divisibility defense to the State of Colorado’s
CERCLA § 107 claim against them, then they would not have a right to obtain
contribution. Id. at 1485 n.1. However, if the defendants were found
jointly and severally liable under CERCLA § 107(a), then defendants would have
a right to obtain contribution. Id.
at 1492. Even though the
defendants’ contribution claims were contingent upon them being liable for an
indivisible harm and they contended the harm was divisible, the court did not
dismiss their contribution claims because liability issues had not yet been decided.
Id. at 1485 n.1, 1492.
In short, the pre-SARA state of the law can be boiled down as
follows: (1) any person that incurred costs, including PRPs, could seek cost
recovery; and (2) any person that had been sued for cost recovery (or sued in
an enforcement action) could seek contribution, but obtaining contribution was
contingent upon the parties being jointly liable. Note that were a person incurs costs, has been sued and
found liable for those same cost, and can prove another person is jointly
liable with it/he/she for those same costs, it appears the cost recovery and
contribution remedies overlap. In
other words, it appears that person can recover the costs they incurred in either a cost recovery action or a contribution action.
THAT’S
MY ARGUMENT.
© July 2013 Brandon J. Evans
