Aviall’s Continuing Impact on PRP Settlements in Superfund

Over a decade after it was issued, Aviall continues to cause difficulties for private settling parties in CERCLA.  In Lewis v. Russell, a federal district court recently considered whether a PRP which agreed to a cash payment from another PRP has to reduce his claim against other PRPs by the actual amount of the cash payment or by the proportionate share of the settling party.  Prior to Aviall, all settlements between PRPs were for contribution under Section 113(f)(1) and not for cost-recovery under Section 107; hence, settlements with one PRP did not affect the rights of other PRPs since a PRP could never be required to pay more than its several contribution share irrespective of what other PRPs paid.  Aviall turned that upside down by acknowledging the possibility that claims by one PRP against others might be a joint and several liability claim for cost-recovery under Section 107 of CERCLA.

Although the case law is slowly cycling back to the view that all claims among PRPs are contribution claims, a recent decision in federal district court in California indicates the kinds of contortions that PRPs must still go through after Aviall in  order to ensure that a settlement protects both the settling and non-settling parties.  InLewis v. Russell, a federal court in California illustrated the just how complicated PRP settlements remain after Aviall.  To make the settlement work, the settling parties needed affirmative findings by the court that the settlement was fair, reasonable, and consistent with CERCLA and that the settlement would operate as a bar against subsequent contribution claims.  The non-settling parties needed findings that the settlement will reduce their exposure not by the amount f the settlement but by the proportionate share of the settling party in accordance with the Uniform Comparative Fault Act and not the Uniform Contribution Among Tortfeasors Act.

Unless a PRP is settling only contribution claims under Section 113(f)(1), Lewis suggests the necessary findings prudent parties would require.

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