CERCLA Cost Recovery
and Contribution
by
David L. Wallis, Esq.
Gallagher & Kennedy
Phoenix, AZ
Outline of Presentation
Overview of CERCLA’s cost-recovery framework
United States Supreme Court’s decisions in Cooper
Industries, Inc. v. Aviall Services, Inc . and United
States v. Atlantic Research Corp.
Survey case law applying CERCLA §§ 107(a) and
113(f) in the wake of these decisions
Outstanding Issues
Legal Framework of CERCLA
Cost Recovery
CERCLA § 107(a) provides that “the United States,
a State, an Indian Tribe” or any other person may
recover its response costs from a “responsible
person” through a so-called “cost-recovery claim” if
the following conditions are satisfied: the site is a
“facility,” there is a “release” or threatened release
of a “hazardous substance,” the release or
threatened release caused the party to incur
response costs, and the response costs are not
inconsistent with the National Contingency Plan
(“NCP”).
Legal Framework of CERCLA
Contribution
CERCLA § 113(f)(1) provides that any
person may seek contribution from any PRP
during or following any civil action under §§
106 or 107(a) of CERCLA.
CERCLA § 113(f)(3)(B) provides for a right
of contribution for “[a] person who has
resolved its liability to the United States or a
State for some or all of a response action or
for some or all of the costs of such action in
an administrative or judicially approved
settlement.”
Aviall
The Supreme Court held that the plain
language of CERCLA § 113(f)(1) allows
a "potentially responsible party" (PRP)
to seek contribution only "during or
following" a "civil action" under
CERCLA §§ 106 or 107(a).
Atlantic Research
The Supreme Court held that under
the plain terms of CERCLA § 107, a
potentially responsible party (PRP) in
Atlantic Research’s situation can
recover incurred cleanup costs from
other PRPs where there is no
corresponding legal action (suit or
settlement) by EPA or a state under
CERCLA §§ 106 or 107.
Post Atlantic Research
ITT Industries: CERCLA § 107(a) can
be used by a PRP that entered into an
administrative settlement with EPA.
EPA’s Position: CERCLA § 107(a) does
not apply to parties that have
contribution rights under CERCLA §
113.
CERCLA § 113(f)(3)(B)
Majority Approach: The settlement
must be with EPA or a State with
delegated CERCLA authority and follow
CERCLA § 122 settlement procedures.
Minority Approach: The settlement can
be with EPA or a State without
delegated CERCLA authority so long as
the State settles its CERCLA claims.
Outstanding Issues
Implications of CERCLA § 107(a) joint
and several liability
Use of both CERCLA §§ 107(a) and
113(f) by the same PRP
Contribution protection against
CERCLA § 107(a) cost recovery claims
Settlement of State CERCLA claims