A Federal Appeals Court in the Ninth Circuit has unanimously ruled on April 2, that Federal Trial Courts are not required to employ a specific formula when allocating costs between private parties for clean-up expenses incurred under CERCLA. The Court stated that District Courts have discretion in determining the most equitable method of accounting for settlements between private parties in a contribution action, and stated that this approach is consistent with both federal common law and the intent of CERCLA. Under the Ruling, District Courts can apply equitable factors in deciding whether to subtract from a Plaintiff’s potential recovery the exact amount of settlement proceeds obtained or to determine the proportionate share owed by the settling parties. This approach, which aligns with the approach by the 10th Circuit, will allow courts to take into account the myriad of factors that may affect a responsible party’s right to contribution from other responsible parties.

For more information, please contact Phillip Hoover or Andy Thompson.