CERCLA Cost Recovery v. Contribution Again: It’s Still Unfair

Parties in CERCLA cases continue to deal with the consequences of the Supreme Court decisions in Aviall and Atlantic Research which essentially created two classes of PRPs: (1) PRPs who entered into CERCLA settlements with the federal or state government and were limited to Section 113(f) CERCLA contribution claims with three year statute of limitations and (2) PRPs who were permitted to pursue cost recovery claims under Section 107 of CERCLA with joint and several liability and a six year statute of limitations. A recent decision by a federal court in the Southern District of New York, HLP Properties, LLC v. Consolidated Edison Company, illustrates how this works and how weird it is.

In HLP, a group of four owners and developers of a site in Manhattan were spending millions of dollars to clean up a former manufactured gas plant in Manhattan. Those parties sought to recover response costs under CERCLA from Consolidated Edison, the successor of the entity that had formerly operated the manufactured gas plant. The four parties each asserted claims for both CERCLA cost recovery under Section 107 and for contribution under Section 113(f). The court ruled that those parties could not simultaneously pursue claims for both cost recovery and contribution. However, the court went on to hold that while some of the four parties could pursue the more favorable cost recovery claims others were limited to only contribution claims with a shorter statute of limitation and less favorable liability standard. What separated the two groups was whether the individual parties had previously committed to clean up the site pursuant to a Brownfield Site Cleanup Agreement with the State of New York.  As the court explained, parties which had resolved their CERCLA liability to the government in a settlement could only pursue contribution claims and the Brownfields Site Cleanup Agreement expressly recited that each of the parties to the agreement “shall be deemed to have entered into an administrative settlement of liability and to have resolved its it liability to the State for purposes of contribution protection provided by [CERCLA]…”

HLP provides a stark illustration of the way Aviall and Atlantic Research work to penalize parties who voluntarily agree to clean up contaminated Superfund sites.   It’s hard to find any satisfying rationale that would justify the result that parties who contractually commit themselves to clean up a contaminated site would be afforded a less favorable cause of action against other PRPs than parties who did not contractually commit themselves to the cleanup.  While that may be the best literal interpretation of the words in CERCLA, it seems unlikely that was what Congress really intended.

One thought on “CERCLA Cost Recovery v. Contribution Again: It’s Still Unfair

  1. Pingback: Allocating The Liability Shares of Settling PRPs Under CERCLA | Law and the Environment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.