High Court Examines the “Natural Meaning” of CERCLA Section 107 and Impact on Private Cost Recovery Actions
On April 23, 2007, the U.S. Supreme Court heard oral argument in United States v. Atlantic Research Corp., U.S., No. 06-562. The primary issue in the case was whether a Potentially Responsible Party (PRP) could sue another PRP to recover a portion of its response costs, voluntarily incurred, pursuant to Section 107 of the Comprehensive Environmental Response, Compensation and Recovery Act (CERCLA or Superfund).
The lower court held in Atlantic Research Corp. v. UGI Utilities, Inc., 459 F.3d 827 (8th Cir. 2006), that Atlantic Research Corporation did have the right to recover the cleanup costs that it had voluntarily incurred in cleaning up a site in Camden, Arkansas, from the federal government. The Eighth Circuit’s decision in Atlantic Research Corp. is inconsistent with the Third Circuit’s holding in E.I. du Pont de Nemours & Co. v. United States, 460 F.3d 515 (3rd Cir. 2006), No. 06-726 (petition for cert filed Dec. 27, 2006), another case involving a claim by a PRP against the federal government, in which the Third Circuit held that a PRP may not recover its cleanup costs pursuant to Section 107 of CERCLA.
In the Atlantic Research case, the Court’s questions focused upon the meaning of the phrase “any other person” in Section 107 of CERCLA. The Justice Department argued that the phrase “any other person” meant the government or “innocent parties,” but did not include the four categories of “responsible parties” listed in the statute. Counsel for Atlantic Research argued the opposite: that the only logical interpretation of this phrase, based upon the structure of Section 107, would be to include PRPs. At least five of the Justices appeared to have difficulty with the government’s interpretation of this phrase, with Justice Roberts stating that the most natural reading of this phrase being that the “‘other’ refers to other than the United States or a State or an Indian tribe” (emphasis added). The Justices seemed sympathetic to several parties’ arguments that, to conclude otherwise would discourage parties from conducting voluntary cleanups and place an undue burden upon the states.
The U.S. Supreme Court’s decision in Cooper Industries Inc. v. Aviall Services Inc., 543 U.S. 157 in December of 2004 upset 20 years of precedent and sent a tremor throughout the industry, causing parties to reconsider whether they should voluntarily incur any cleanup costs. The Cooper Industries decision held that a PRP could not sue another PRP pursuant to Section 113 of CERCLA unless that party had first been sued or entered into a settlement agreement with the government. Parties conducting cleanups are now cautiously optimistic that a more favorable decision might be reached in the Atlantic Research case if the Supreme Court reaffirms PRPs’ rights to recoup voluntary cleanup costs pursuant to Section 107 of CERCLA.
A decision is expected by the end of June 2007.