Jenner & Block: Section 113 or 107? Supreme Court Declines to Clarify CERCLA Cost Recovery Options

Jenner & Block: Section 113 or 107? Supreme Court Declines to Clarify CERCLA Cost Recovery Options

Allison Torrence   By Allison Torrence, Associate, Jenner & Block

Ever since the U.S. Supreme Court decided United States v. Atlantic Research Corp. in 2007, CERCLA PRPs and courts have been struggling with a crucial question: Whether parties subject to a consent decree may file claims for cost recovery under §107(a) of CERCLA, or whether their remedies are limited to filing claims for contribution under §113(f) of CERCLA. On October 9, 2012, the Supreme Court declined the opportunity to clarify that question when it denied cert in the appeal of the 11th Circuit's opinion in Solutia Inc. v. McWane Inc., 672 F.3d 1230 (11th Cir. 2012).

In United States v. Atlantic Research Corp., 551 U.S. 128 (2007), the Supreme Court held that §107 of CERCLA provides PRPs with a cause of action to recover costs incurred in cleaning up contaminated sites from other PRPs. However, the Supreme Court explicitly left open the question of whether a PRP can recover costs under §107 if the PRP incurred those costs subject to a consent decree with the government. Id. at 139 n.6 ("we recognize that a PRP may sustain expenses pursuant to a consent decree following a suit under §106 or §107(a). In such a case, the PRP does not incur costs voluntarily but does not reimburse the costs of another party. We do not decide whether these compelled costs of response are recoverable under §113(f), §107(a), or both.").

In the Solutia case, the 11th Circuit ruled that a PRP who has incurred cleanup costs pursuant to a consent decree cannot obtain cost recovery under §107, and is instead left with only a contribution claim under §113. 672 F.3d at 1237. As the 11th Circuit explained in its opinion, the majority of courts that have addressed this issue have held that §113 provides the exclusive remedy for a PRP compelled to incur response costs pursuant to a consent decree. See Morrison Enter., LLC v. Dravo Corp., 638 F.3d 594, 603 (8th Cir. 2011); Agere Sys., Inc. v. Advanced Envtl. Tech. Corp., 602 F.3d 204, 229 (3d Cir. 2010); Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., 596 F.3d 112, 128 (2d Cir. 2010).

Uncertainty remains, however, due to inconsistent rulings on this issue, primarily in federal district courts. For example, district courts in Illinois, New York, and Michigan have allowed §107 claims to proceed despite the presence of a consent decree compelling cleanup. See, e.g., United States v. Pharmacia Corp., 713 F.Supp.2d 785, 791 (S.D. Ill. 2010); New York v. Solvent Chem. Co., 685 F.Supp.2d 357, 425-28 (E.D.N.Y. 2010); Ford Motor Co. v. Michigan Consol. Gas. Co., No. 08-CV-13503, 2009 U.S. Dist. LEXIS 89885 (E.D. Mich. Sept. 29, 2009).

PRPs who have entered into a consent decree and then seek recovery of their cleanup costs are still left with the decision of what type of CERCLA claim to pursue. Without clarification of these issues from the Supreme Court, PRPs will likely continue to pursue claims under both §107 and §113, leaving it to each individual court to decide the validity of the CERCLA claims.

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

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

Hazardous Waste at Contaminated Site CERCLA

For more information about LexisNexis products and solutions, connect with us through our corporate site.