Defining the Boundaries of Superfund’s Unfairness

It’s long been a tenet of Superfund that one effective strategy for managing an expensive site is to bring in a lot of additional parties to share the costs. For some years now, that has been the strategy of the two largest PRPs alleged to have contaminated the lower Fox River in Wisconsin with massive amounts of PCBs. Cleanup costs for that site are estimated to cost $1.5 billion. So far, at least, that strategy of bringing in more parties has failed in ever more dramatic fashion.

First, a federal court in Wisconsin dismissed a contribution action brought by the largest PRPs against twenty additional parties even though those parties had unquestionably disposed of paper wastes containing PCBs into the river. More recently, the government entered into a de minimis settlement with twelve of those parties, contending that a $2 million contribution from those parties represented their fair share of the $1.5 billion cleanup. A fairness challenge by the largest PRPs was rejected by the district court and was affirmed yesterday by the Seventh Circuit. United States v. George A. Whiting Paper Co. In a breezy decision, the Seventh Circuit held that CERCLA settlements require broad deference to EPA and should be approved as long as the factual record contains any support for the government’s estimate as to the share to be paid by the settling parties.

Everyone knows that Superfund is unfair and that the government can impose a disproportionate share of the cleanup costs on parties which don’t settle. Anyone who wondered how far the government could go in imposing that disproportionate share will find an answer in the Seventh Circuit’s decision.

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