january 2007

U.S. Supreme Court to Decide Whether PRPs Who Voluntarily Incur Cleanup Costs May Recover Such Costs under Federal Superfund Law

The U.S. Supreme Court has agreed to hear the appeal of an Eighth Circuit decision, Atlantic Research Corp. v. U.S., concerning recoupment of remedial expenditures. At issue is whether Section 107 of CERCLA - the federal Superfund law – grants parties who are potentially responsible for environmental contamination (PRPs) the ability to bring a federal lawsuit against other PRPs for recovery of environmental cleanup costs that have been incurred without governmental compulsion.

Another provision in CERCLA – Section 113 - permits PRPs to bring a federal contribution lawsuit against other responsible parties. However, in a 2004 case, Cooper Industries v. Aviall Services, the U.S. Supreme Court found that PRPs who voluntarily undertake environmental cleanups without having been compelled to do so by a government entity through a civil action or by way of an administrative or judicially approved settlement could not sue for contribution under Section 113. The Court’s finding did not address whether Section 107 might permit such parties to nevertheless sue.

Four United States Courts of Appeals have since attempted to answer that open question, resulting in a three-to-one split. Although one court held that Section 107 does not permit a contribution lawsuit, three courts (including the Eighth Circuit) have held that it does.

It is anticipated that the Court’s decision in the Atlantic Research case will provide a clear answer to the question left open in the Cooper Industries case. A decision is likely by June or July of 2007.

If you have any questions concerning these issues, please contact David B. Farer or Daniel L. Schmutter.