Monday, June 11, 2007

SCOTUS Holding re CERCLA Liability

U.S. v. Atlantic Research Corp. (No. 06-562) , 459 F. 3d 827, June 11, 2007.

Holding: Because §107(a)(4)(B)’s plain terms allow a potentially responsible party ("PRP") to recover costs from other PRPs, the statute provides Atlantic Research with a cause of action.

Implications: In the case of reimbursement, a PRP cannot choose §107(a)’s longer statute of limitations for recovery actions over §113(f)’s shorter one for contribution claims. Similarly, a PRP could not avoid §113(f)’s equitable distribution of reimbursement costs among PRPs by instead choosing to impose joint and several liability under §107(a). That choice of remedies simply does not exist, and in any event, a defendant PRP in a §107(a) suit could blunt any such distribution by filing a §113(f) counterclaim.

Permitting PRPs to seek recovery under §107(a) will not eviscerate §113(f)(2), which prohibits §113(f) contribution claims against “[a] person who has resolved its liability to the United States or a State in an administrative or judicially approved settlement … .” Although that settlement bar does not by its terms protect against §107(a) cost-recovery liability, a district court applying traditional equity rules would undoubtedly consider any prior settlement in the liability calculus; the settlement bar continues to provide significant protection from contribution suits by PRPs that have inequitably reimbursed costs incurred by another party; and settlement carries the inherent benefit of finally resolving liability as to the United States or a State.

For a copy of the opinion see, Cornell University Law School, Legal Information Institute, at

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