Apr 02, 2012

Eleventh Circuit Issues Important Decision on Remedies Available Under CERCLA

In a March 6, 2012 decision, the U.S. Court of Appeals for the Eleventh Circuit held that parties who enter into a consent decree with the U.S. Environmental Protection Agency (EPA) following an EPA enforcement action and then seek recovery of cleanup costs from other potentially responsible parties (PRPs) are limited to a contribution claim under § 113(f) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and may not simultaneously pursue a cost recovery action under § 107(a) of CERCLA.

In the case of Solutia, Inc., et al. v. McWane, Inc., et al., the two plaintiff companies had entered into a consent decree with EPA as part of resolving an EPA enforcement action for cleanup of sites contaminated with lead and PCBs in Anniston, Alabama. The two plaintiffs directly incurred significant cleanup costs pursuant to the consent decree with EPA and then brought claims under both § 107(a) and § 113(f) of CERCLA seeking to recover cleanup costs from other PRPs. Consistent with decisions from other federal court of appeals around the country, the Eleventh Circuit concluded that, when a party incurs cleanup costs pursuant to a consent decree following a CERCLA lawsuit brought by EPA or a state environmental agency, the party is limited to a § 113(f) contribution action against other PRPs.

Although a party’s ability to bring a § 113 contribution claim rather than a § 107 cost recovery claim may appear to be a purely technical distinction, the difference has very significant practical implications for parties who have spent significant sums on response to and cleanup of a contaminated property. The important differences include:

  • (1) § 107(a) claims allow plaintiffs to impose joint and several liability on other PRPs (while § 113 claims are subject to allocation of fault between plaintiffs and defendants);
  • (2) § 107(a) claims are not subject to the contribution protection bar available against § 113 claims (i.e., PRPs that have settled with EPA are immune from § 113 claims, but not § 107 claims, by other PRPs); and
  • (3) § 107(a) claims are frequently subject to longer statutes of limitations than § 113 claims.

Finally, it is important to recognize that the Eleventh Circuit’s decision in Solutia v. McWane is limited to situations where the plaintiff’s response and cleanup costs were incurred pursuant to a consent decree entered as a result of an enforcement action by EPA or a state environmental agency. Parties that incur response and cleanup costs voluntarily under consent orders that did not follow an agency enforcement action are still able to bring § 107(a) cost recovery actions against other PRPs. See Agere Systems, Inc. v. Advanced Environmental Technology Corp., 602 F.3d 204 (3d Cir. 2010).

To download a copy of the Eleventh Circuit’s decision, please click here: Solutia Inc. Holding

To discuss the potential impacts of this decision on your business, please contact Andy Thompson.

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