Although it has taken a surprisingly long time, the holding in Burlington Northern which greatly lowered the standard for apportionment in Superfund cases is finally being embraced by lower courts. Last fall I blogged about a Seventh Circuit decision which rejected the trial court’s conclusion in the long-running Lower Fox River Litigation (US v. NCR Corp.) that a portion of the liability was not divisible. On remand, the trial court completely switched its earlier ruling and held that the harm was divisible based entirely on the relative volumetric contribution of the PRPs; the court then decided that the liability could be apportioned largely on each PRP’s volumetric share of the cleanup costs.
Given that most multi-party Superfund settlements have long been tied to volumetric shares of waste sent to a Site, the growing availability of apportionment of joint and several liability based on volume may not represent much of a change. However, the availability of apportionment whenever volumetric shares can be determined is likely to limit the cases governed by joint and several liability. While this may be a salutary development for many PRPs, it does not quite square with CERCLA’s stated objectives.
From the beginning one of the central tenets of Superfund has been the principle that the “polluter must pay.” As offensive as this principle sometimes seemed when applied retroactively to conduct that was legal at the time, the principle of having the polluter pay was achieved by allowing the government to recover all its costs from one or more PRPs under the rubric of joint and several liability. Those jointly and severally liable PRPs were then allowed to divide up their liability in contribution actions governed by “equitable factors.” Many of those equitable factors turned on a PRP’s cooperation with the government, its culpable knowledge, its unjust enrichment, and its relative fault.
By looking only to volumetric share, the Burlington Northern rule reduces the division of liability to a mechanical formula and takes equitable factors out of play. This is likely to mean that the government will lack the leverage to reward early settlors and penalize recalcitrants; it may also mean that the government will be stuck paying orphan shares and courts will be powerless in some cases to do real equity in spliting up Superfund liability based upon concepts like fault and unjust enrichment. Although the government has sometimes used joint and several liability in unfair ways, the loss of joint and several liability is not entirely a positive development.