Supreme Court denies petition by Solutia, Inc. to address whether a party to a consent decree may file a cost recovery action under CERCLA Section 107(a).

Posted by in CERCLA, Environmental Litigation on October 10, 2012

On October 9, 2012, the U.S. Supreme Court denied the petition of Solutia, Inc. and Pharmacia Corporation to review a March 6, 2012 ruling by the Eleventh Circuit which affirmed a grant of summary judgment and held that parties subject to a consent decree are limited to filing claims for contribution under CERCLA § 113(f), and may not file claims for cost recovery under CERCLA § 107(a).  Solutia Inc. v. McWane, Inc., 672 F.3d 1230 (11th Cir. Ala. 2012).

Plaintiffs Solutia and Pharmacia were parties to a partial consent decree (PCD) entered into with the U.S. Environmental Protection Agency (EPA) related to contamination caused by production of polychlorinated bipheyls (PCBs) at a plant near downtown Anniston, Alabama.  Plaintiffs sued several defendants as potentially responsible parties (PRPs) for the contamination, seeking to recover cleanup costs incurred by plaintiffs and contribution under CERCLA §§ 107(a) and 113(f), respectively.

These two provisions of CERCLA – §107(a) and § 113(f) – have been the focus of several Supreme Court decisions attempting to define which remedies are available under CERCLA in different situations.  In United States v. Atlantic Research Corp., 551 U.S. 128 (U.S. 2007) and Cooper Indus. v. Aviall Servs., 543 U.S. 157 (U.S. 2004), the Supreme Court held that cost recovery actions under CERCLA § 107(a) are complementary to, yet distinct from, contribution actions under CERCLA § 113(f).  Cleanup costs incurred voluntarily and directly by a party are recoverable under CERCLA § 107(a), which imposes joint and several liability on the defendants.  Atlantic Research Corp., 551 U.S. at 138-139.  By contrast, CERCLA § 113(f) permits contribution actions after a party is forced to reimburse a third party, such as where it has been sued under CERCLA §§ 106 or 107, or entered into a settlement with a Federal or State agency or private parties to resolve its liability.  Id., at 138; Aviall, 543 U.S. at 166.  Under § 113(f) contribution actions, a defendant potentially responsible party (“PRP”) is liable only for its equitable share of response costs.

But the Supreme Court in Atlantic Research expressly left open the question of whether a party that incurs direct cleanup costs pursuant to a consent decree following a CERCLA lawsuit under § 106 or § 107 may bring an action to recover those costs under § 107(a), or whether its remedy is limited to § 113(f) contribution claim.  Atlantic Research, 551 U.S. at 139 n. 6.  This issue was presented as a matter of first impression to the Eleventh Circuit in Solutia Inc. v. McWane, which held that parties subject to a consent decree are limited to filing claims for contribution under CERCLA § 113(f), and may not file claims for cost recovery under CERCLA § 107(a).  Solutia Inc. v. McWane, Inc., 672 F.3d at 1236-1237.

Certain defendant PRPs sued by Solutia and Pharmacia plaintiffs had settled their liability in a separate settlement agreement with EPA (the “Settling Defendants”).  CERCLA § 113(f)(2) provides that “[a] person who has resolved its liability to the United States or a State in an administrative or judicially approved settlement shall not be liable for claims for contribution regarding matters addressed in the settlement.” 42 U.S.C. § 9613(f)(2).  Accordingly, the plaintiffs’ CERCLA §113(f) contribution claims against the Settling Defendants were precluded by §113(f)(2).  The Eleventh Circuit reasoned that permitting § 107(a) cost recovery claims by plaintiffs against Settling Defendants would undermine the structure of CERCLA and thwart the contribution protection given to settling PRPs, discouraging future settlements. Solutia Inc. v. McWane, Inc., 672 F.3d at 1236.

Comments are closed.