September 10, 2012 Articles

Good-Bye to Joint and Several Liability in Private CERCLA Actions

Who is responsible for paying orphan shares?

By Kenneth Kilbert – September 10, 2012

The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) empowers the government or private plaintiffs to force “responsible parties” to pay for the costs of cleaning up contaminated sites. Usually a site has multiple responsible parties, and typically the cleanup costs end up being shared among them based on equitable factors. Not infrequently, however, some of the responsible parties are now insolvent, dead, or defunct and hence cannot pay their shares of the cleanup costs. Who must pay those “orphan shares”?

In CERCLA § 107 actions brought by federal or state governments, defendants traditionally have been subject to joint and several liability, meaning that the plaintiff may recover all of the site cleanup costs from any one of the multiple defendants. Although Burlington Northern& Santa Fe Ry. v. United States (Burlington Northern), 556 U.S. 599 (2009) made the availability of joint and several liability less automatic in governmental CERCLA actions, joint and several liability remains the rule rather than the exception in such cases. The availability of contribution under CERCLA § 113 can lessen the harshness of joint and several liability, by allowing the defendant to force other responsible parties to pay their fair shares of the site-cleanup costs. But where other responsible parties are insolvent, dead, or defunct, the original defendant can be left to shoulder the orphan shares alone.

In CERCLA actions by private plaintiffs, courts have gone back and forth on whether defendants are subject to joint and several liability. For many years, private responsible parties could not sue under CERCLA § 107 and were limited to bringing contribution actions under CERCLA § 113. A defendant in a section 113 claim was not subject to joint and several liability; rather, it would only be liable for an equitable share of the cleanup costs. As a result of Cooper Industries, Inc. v. Aviall Services, Inc., 543 U.S. 157 (2004), and United States v. Atlantic Research Corp., 551 U.S. 128 (2007), however, more private plaintiffs now are able to bring section 107 claims. In the wake of those Supreme Court decisions, lower courts routinely are subjecting defendants to joint and several liability in private CERCLA § 107 actions, raising the specter that such defendants may have to bear all the orphan shares—even where the plaintiff may be more culpable.

The main thrust of this article is that joint and several liability has no place in private CERCLA litigation. Instead, courts should adopt a uniform scope of liability that allows for equitable allocation of all response costs and orphan shares among all viable parties, regardless of whether the claim is brought under section 107 or section 113.

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