Recovery of Attorneys’ Fees Under CERCLA: One Man’s PRP Search Is Another Man’s Litigation Expenses

In Key Tronic Corp. v. United States, the Supreme Court held that costs which are “closely tied to the actual cleanup may constitute a necessary cost of response in and of itself….” Such costs include “work performed in identifying other PRPs.”   According to the Supreme Court, “tracking down other responsible solvent polluters increases the probability that a cleanup will be effective and get paid.”

On the other hand, the Supreme Court noted that attorneys’ fees incurred in the course of negotiations with the government or for the purpose of defending a party against expected litigation are not recoverable. 

The problem in this approach is that distinguishing between these two motives will almost always be impossible. This difficulty was brought home by a recent case from the Eastern District of California. In BNSF Railway v. California, the court denied a contribution plaintiff’s effort to recover its attorneys fees incurred in identifying additional PRPs, because the court could “not distinguish [plaintiff’s] efforts expended in searching for PRPs from their own litigation expenses.”

Well, duh.

When a PRP attempts to identify other PRPs, is there ever a situation in which the PRP is acting solely out of the goodness of his heart? It seems more likely that the PRP is looking for others to share the pain. Indeed, for PRPs with large pocketbooks, the Supreme Court’s premise that identifying other PRPs will increase the likelihood that the cleanup will be effective and get paid for seems questionable, at best. Even if no other PRPs are identified, the well-heeled PRP is likely to perform the cleanup itself. The identification of additional PRPs, while possibly decreasing the share to be paid by the original PRP, is, if anything, likely to lead to more private cost recovery litigation.

On the other hand, is it reasonable to allow recovery of attorneys’ fees to small PRPs, because their identification of additional PRPs does increase the likelihood that the cleanup will be completed, but not to the GEs of this world? That hardly seems fair and certainly has no basis in the statutory language.

It seems to me that the Supreme Court’s language in Key Tronic is simply unworkable in the real world. The better approach would be to allow recovery of attorneys’ fees incurred in the identification of additional PRPs, regardless of whether the motivation for the PRP search might have been to protect the PRP’s own financial interests in defending an action brought by the government.   Such a rule might actually facilitate private settlements, but it would in any case be much easier for courts to administer and, on that basis alone, would be preferable to the current free-for-all, in which the outcome seems most likely to be decided by the judge’s respective level of sympathy for the plaintiff and the defendant.

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