Half Way There On Pleading CERCLA Contribution Claims

In its 2004 decision in Cooper Industries v. Aviall, the Supreme Court turned upside down many years of settled CERCLA jurisprudence establishing that a PRP only has contribution claims against other PRPs under Section 113(f)(1) and not direct cost recovery claims under Section 107(a).  A decision earlier this week by the Eighth Circuit, Morrison Enterprises v. City of Hastings, coupled with the Supreme Court’s 2007 decision in Atlantic Research, provides clear guidance on when a PRP suing another PRP must assert a contribution claim and when he must assert a direct cost recovery claim.

In Atlantic Research, the Supreme Court had held that a PRP which voluntarily undertook response actions can seek to recover the costs of that voluntary cleanup work by bringing a Section 107(a) cost recovery action against other PRPs. At the center of the Court’s reasoning was the inability of a volunteer to seek contribution since voluntary cleanup actions by definition lack the compulsion of a government enforcement action which Aviall found to be the sine qua non of a contribution action under Section 113(f)(1). 

Morrison Enterprises establishes the converse proposition: that a PRP which has been compelled by the government to undertake cleanup work or to pay responses costs can recover all or part of its costs only in a claim for contribution under Section 113(f)(1) and not under Section 107(a).    Specifically, Morrison Enterprises involved a claim by a PRP which had been the subject of a Section 107 enforcement action and agreed to perform certain cleanup work in a Consent Order that resolved that enforcement action. The PRP then sought to recover some or all of the costs of its Consent Order work in a Section 107 cost recovery claim against another PRP. The Eighth Circuit ruled that “response costs incurred pursuant to such administrative settlements following a suit under § 106 or § 107(a) are not incurred voluntarily… The district court correctly concluded [that the PRP] could not maintain a cost-recovery action under § 107(a).”    The failure by the PRP to assert a contribution action instead of a direct cost recovery action was fatal to that PRP’s claim.

Morrison Enterprises and Atlantic Research provide useful guidance to PRPs as to when to assert a direct cost recovery action and when a contribution action. However, those decisions do not resolve all of the problems unleashed by Aviall, particularly with respect to how a settling party can obtain finality, which was the subject of several cases that Seth Jaffe and I blogged about last fall — Ashland v. Gar Electroplating and Emeryville v. Sherwin Williams. While PRPs now may be able to figure out when they have a Section 107(a) claim and when they have a contribution claim, those PRPs still cannot count on courts to construe CERCLA’s contribution scheme to ensure that settling parties will have meaningful protection from future claims. 

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