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Cases to Watch: Supreme Court Could Address Key Cost Recovery Issue in Morrison Enterprises

Keri Holleb Hotaling   By Keri L. Holleb Hotaling, Partner, Jenner & Block LLP

When the Supreme Court returns from its summer recess on September 26 to select cases for review this fall, it is likely to consider taking up Morrison Enterprises, LLC v. Dravo Corp.

The question presented is: Whether a party that has incurred response costs either pursuant to an administrative order, or to a consent decree following suit under § 106 or § 107 of the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), may ever seek to recover those "compelled" costs under §107(a), or whether the exclusive remedy for cost recovery is contribution under CERCLA § 113(f)?

The case stems from a Nebraska company, Morrison, entering into administrative consent agreements with EPA to clean up the FAR-MAR-CO Subsite contained within the Hastings Ground Water Contamination Site. Morrison was liable for carbon tetrachloride and ethylene dibromide contamination at the FAR-MAR-CO Subsite, but as part of its cleanup work, Morrison also remediated trichloroethylene ("TCE") contamination for which it was not liable. The TCE contamination originated from the Colorado Avenue Subsite, formerly operated by Dravo, located two miles upstream. In 2008, Morrison and the City of Hastings sued Dravo under CERCLA § 107 seeking cost recovery for the operation of the well to extract TCE contamination emanating from Dravo's former facility. Morrison did not bring a contribution claim under CERCLA § 113(f). The district court dismissed the claim, holding that § 113(f) provided the exclusive remedy. The Eighth Circuit affirmed in Morrison Enters., LLC, et al. v. Dravo Corp., 638 F.3d 594 (8th Cir. 2011).The Eighth Circuit specifically ruled that parties can sue under Section 107 "only if they have 'neither been sued nor settled their liability'" to the government.

In United States v. Atlantic Research, the Supreme Court ruled that there was no textual basis in CERCLA for limiting Section 107 relief to "innocent" parties. Atlantic Research left unresolved whether PRPs conducting clean-ups pursuant to an administrative order or consent decree could sue other PRPs under Section 107, Section 113, or both. Morrison argues that "the Eighth Circuit adopted a rigid rule that eliminates any possible overlap between § 107(a) and § 113(f) holding that if a party has ever been subject to either an AOC or a suit under § 106 or § 107-no matter the circumstances-that party cannot seek cost recovery under § 107." (Pet. at 10.)

Petition for Writ of Certiorari.

Keri Holleb Hotaling is a partner in Jenner & Block's Chicago office.  She is a member of the Firm's Environmental and Workplace Health & Safety Law Practice.  She also is a member of the Firm's Litigation Department and the Climate and Clean Technology Law Practice.  Ms. Holleb Hotaling serves on the Firm's Hiring Executive Committee and Hiring Committee.

Read more at Corporate Environmental Lawyer Blog by Jenner & Block LLP.

The Corporate Environmental Lawyer Blog is a 2011 LexisNexis Top 50 Blogs for Environmental Law & Climate Change winner.

Hazardous Waste Drums subscribers can access the Lexis enhanced version of the Morrison Enters., LLC, et al. v. Dravo Corp., 638 F.3d 594 (8th Cir. 2011) decision with summary, headnotes, and Shepard's. subscribers can access the Lexis enhanced version of the United States v. Atl. Research Corp., 551 U.S. 128 (U.S. 2007) decision with summary, headnotes, and Shepard's. subscribers can access the Lexis enhanced sections of CERCLA, 42 U.S.C.S. § 9601 et seq., with annotations and Shepard's:

§ 106, 42 U.S.C.S. § 9606.

§ 107, 42 U.S.C.S. § 9607.

§ 113, 42 U.S.C.S. § 9613.

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