US Supreme Court Decides a CERCLA PRP may Bring a Cost Recovery Claim

June 11, 2007

On June 11, 2007, the United States Supreme Court issued its opinion in the case United States v. Atlantic Research Corp., 2007 U.S. Lexis 7718 (“ARCO”).  The Court has determined that a CERCLA PRP may assert a cost recovery claim under 42 U.S.C. § 9607(a).  This case resolves one of the major issues remaining from Cooper Indus. v. Aviall Servs., 543 U.S. 157 (2004) and now creates a new set of issues to percolate through the federal courts.

The principal ruling in the Court’s June 11, 2007, ARCO opinion is that a party potentially responsible for contamination under CERCLA has a cause of action under 42 U.S.C. § 9607(a) for cost recovery.  Section 9607 claims are not limited to innocent parties.  The ARCO Court resolved a split among federal circuit courts in favor of the views expressed by the Second, Seventh, and Eighth Circuits and against the Third Circuit.  SeeAtlantic Research Corp. v.U.S., 459 F.3d 827 (8th Cir. 2006); Metro. Water Reclam. Dist. v. North American Galvanizing & Coatings, 473 F.3d 824 (7th Cir. 2007); Consolidated Edison Co. v. UGI Utilities, 423 F.3d 90 (2d Cir. 2005); compare DuPont v.U.S., 460 F.3d 515 (3d Cir. 2006).

Importantly, the Court’s ARCO decision was careful to preserve the distinction between a CERCLA 9613 contribution claim and other claims that may be brought by PRPs under 9607(a).  A PRP may only bring a 9607(a) claim when that PRP itself has incurred cleanup costs.  The PRP may not pursue a 9607(a) claim when the PRP has paid to satisfy a settlement or court judgment to reimburse other parties for third party CERCLA costs.  Thus, it appears that only a “volunteer” PRP may pursue the 9607(a) claim.  Other PRPs remain limited to their 9613 rights.

In addition, the ARCO court held that a PRP may not simultaneously seek to recover the same expenses under both 9613 and 9607(a).  Thus, a PRP cannot seek to avail itself of the longer statute of limitation for 9607(a) claims in the event that both sections may apply.  Finally, the ARCO court strongly suggests that any party concerned with joint and several liability when sued by a PRP in a 9607(a) claim must bring a 9613 counterclaim to blunt the apportionment.  While the Court noted that the settlement bar for 9613 claims may remain an issue in future cases, the Court did not delineate precisely how that settlement bar would apply to future 9607(a) PRP claims other than to note that the district courts simply should apply traditional rules of equity in considering prior settlements.

Attorneys at Frost Brown Todd presently are litigating several CERCLA cases concerning PRP rights, including these very issues.  As a firm, Frost Brown Todd draws upon environmental attorneys in nine offices spanning the Midwest and Midsouth.  In the 25 years since CERCLA became law, we have litigated environmental issues in at least 36 states and continue to represent virtually every industry affected by the statute.

Should you have any questions on this or other CERCLA issues, please feel free to contact David Walulik (513) 651-6877 (dwalulik@fbtlaw.com) or Paul Casper (513) 651-6490 (pcasper@fbtlaw.com). Mr.Walulik recently briefed and argued the issue of 42 U.S.C § 9607 PRP rights in a multi-million dollar CERCLA case and can explain how the evolving nature of CERCLA recovery can impact your business.

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