Operator of a Contaminated Landfill Site May Be Held Only Jointly Liable In a Suite for Contribution
December 1, 1999
In a case of first impression, on November 1, 1999, the Seventh Circuit Court
of Appeals ruled that, where a landfill operator is sued for contribution under
CERLCA, it may be jointly-as opposed to only severally-liable, reversing a
federal district court. In Browning-Ferris Industries of Illinois, Inc. v. Ter
Maat, No. 98-3204, the plaintiffs, Browning-Ferris Industries of Illinois, Inc.,
(BFI) and several other companies cleaned up a contaminated site and then
brought suit under CERCLA against Richard Ter Maat and two corporations of which
he was the president and principal shareholder, M.I.G. Investments, Inc. and AAA
Disposal Systems, Inc.
The plaintiffs alleged that, in 1971, the owners of a landfill had leased it
to a predecessor of BFI, which operated it until 1975. Between 1975 and 1988 it
was operated by M.I.G. and AAA. In June of that year, after AAA was sold and Ter
Maat moved to Florida, M.I.G. abandoned the landfill without covering it
properly. For tax reasons, M.I.G. had been operated with very little capital,
and it lacked funds for a proper cover. Two years after the abandonment, the
United States Environmental Protection Agency placed the site on the National
Priorities List, the list of contaminated sites for priority clean-up under
CERCLA. Thereafter, BFI and the other plaintiffs, which shared responsibility
for some of the pollution, agreed to clean up the site.
The federal district judge allocated 55% of the clean-up costs to the
transporters and generators; the other 45 percent he allocated to the owners of
the landfill and the generators of the hazardous wastes dumped in it. Of that
55%, 40% was allocated to BFI, and the other 60 % to M.I.G. and AAA. As between
M.I.G. and AAA, the judge allocated responsibility equally, holding that,
although the two corporations had operated the landfill jointly, the statute
required him to allocate liability severally rather than jointly.
On appeal, the Seventh Circuit Court of Appeals ruled that CERCLA does not
preclude the imposition of joint, as distinct from several, liability in a suit
for contribution. The court noted that the issue before it was a case of first
impression at the appellate level; although a recent decision by the Sixth
Circuit Court of Appeals in Carter-Jones Lumber Co. v. Dixie Distributing Co.,
166 F.3d 840, 847-48 (6th Cir. 1999) did hold that CERCLA permitted joint
liability in a contribution suit, that court had based its decision on state
law, not CERCLA. Here, the court held that section 113(f), the CERCLA
contribution provision, provided expressly that actions under it were to be
governed by federal law, with the federal court to "allocate response costs
among liable parties using such equitable factors as the court determines are
appropriate." The court noted the plaintiff's' claims in this case were
based exclusively on section 113, not state law.
The court stated that, under traditional common law, when two or more persons
inflict an indivisible injury, each is fully liable for the injury - that is,
the plaintiff can sue one of the tortfeasors for the entire damages and let the
other go, and the one who is sued has no remedy against the one who got off
scot-free. CERCLA, however, has modified the traditional common law rule by
allowing one liable party to sue another for contribution. Further, the court
noted that it did not follow that if contribution is sought from more than one
party, the defendants cannot be held jointly liable under CERCLA. Thus, the
court reversed the allocation decision of lower court and held that it was up to
the district judge, guided by "equitable considerations," to decide
whether joint liability was the appropriate remedy.
For more information, contact Robert Whitney at 1-888-688-8500.