November 09, 2018

Endless liability? Evaluating whether to settle or litigate private environmental lawsuits at regulated sites

Jon Rauchway and Mave Gasaway

Government-regulated environmental cleanups can last for decades.  Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund), the primary federal statute for regulating large-scale environmental cleanups, has been described as “a black hole that indiscriminately devours all who come near it.” Long Beach Unified Sch. Dist. v. Dorothy B. Godwin Living Tr., 32 F.3d 1364, 1366 (9th Cir. 1994). For companies responsible for such cleanups, it may seem—as with real black holes—that time slows down and they never emerge. Even when the end to regulatory liability is in sight, private-party lawsuits often follow. In recent years, we have seen an uptick in private lawsuits against companies responsible for government-regulated environmental cleanups, particularly at federal Superfund sites. Unlike most regulatory liability, however, private environmental suits are defensible and companies should think hard about approaching them in the same way as government enforcement actions, where the options are limited.

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