First Quarter 2007

U.S. Supreme Court Agrees to Hear Post-Cooper v. Aviall CERCLA Cost Recovery/Implied Contribution Case; Could Resolve Circuit Split

Holland & Knight Newsletter
Amy L. Edwards

On January 19, 2007, the U.S. Supreme Court agreed to review one of three pending cases involving whether a Potentially Responsible Party (PRP) may bring a cause of action against another PRP under Section 107 of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) for cost recovery or an implied right of contribution. This question was left unresolved in the Supreme Court’s seminal 2004 decision in Cooper Industries Inc. v. Aviall Services Inc., 543 U.S. 157,167 (2004), in which it found that a PRP could not sue another PRP under Section 113(f) of CERCLA unless it had previously been sued under Section 106 or 107 of CERCLA or had settled its CERCLA liability. There is a split in the circuit courts at the present time over whether a PRP may sue another PRP under CERCLA Section 107 instead.

The case in which the Supreme Court granted certiorari, United States v. Atlantic Research Corp., 459 F.3d 827 (8th Cir. 2006), cert. granted, 2007 WL 124673 (U.S. Jan. 19, 2007) (No. 06-562), involved a decision in which the Court of Appeals for the Eighth Circuit had found that the plaintiff, Atlantic Research Corporation, could recover a portion of its cleanup costs from the Department of Defense on the basis of both an implied right of contribution and cost recovery under CERCLA Section 107. Atlantic Research Corp. v. UGI Utilities Inc., 459 F.3d 827, 835-36 (8th Cir. 2006).

Two other Circuit Courts have reached similar conclusions. In Consolidated Edison Co. of New York v. UGI Utilities, 423 F.3d 90, 98 (2nd Cir. 2005) and in Metropolitan Water Reclamation District of Greater Chicago v. North American Galvanizing & Coatings, Inc., 2007 WL 102979 (7th Cir. 2007), the Second Circuit and the Seventh Circuit found an implied right of contribution under CERCLA Section 107. A petition for certiorari is pending before the Supreme Court in the Consolidated Edison case. Consolidated Edison Co. of New York v. UGI Utilities, 423 F.3d 90 (2nd Cir. 2005), petition for cert. filed, 74 U.S.L.W. 3600 (U.S. April 14, 2006) (No. 05-1323).

In contrast, the Court of Appeals for the Third Circuit has found that there is no implied right of contribution under Section 107 of CERCLA and that this provision could not be used where there was no right under Section 113 to recover cleanup costs from another PRP. E.I. du Pont de Nemours & Co. v. United States, 460 F.3d 515, 544-45 (3rd Cir. 2006). A petition for certiorari, supported by a coalition of industry groups, was filed in the du Pont case, but the Supreme Court has not yet acted upon that petition. E.I. du Pont de Nemours & Co. v. United States, 460 F.3d 515 (3rd Cir. 2006), petition for cert. filed, 75 U.S.L.W. 3296 (U.S. Nov. 21, 2006) (No. 06-726).

The U.S. Department of Justice has filed briefs indicating that either the Atlantic Research or the du Pont case would provide suitable vehicles for resolving this important split between the circuits and creating greater certainty. It is not yet known whether the Court will grant certiorari in the du Pont case as well, and consolidate the two cases, or whether it will simply hold the du Pont and Consolidated Edison petitions in abeyance until it has reached a decision in Atlantic Research. Stay tuned for further developments.

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