August 29, 2018 Articles

NJDEP Settlement Precludes Contribution Claim

A cautionary tale that could limit the ability of nonsettling parties to obtain contribution from parties that enter into a settlement with a single agency that does not purport to address the full scope of response costs incurred at a site.

By Duke K. McCall III and Conrad W. Bolston

On July 23, 2018, a New Jersey federal district court rejected the attempt of Compaction Systems Corp. and Compaction Systems Corp. of Connecticut, Inc. (collectively, Compaction) to recover from Carter Day Industries, Inc. (CDI), Combe Fill Corporation (CFC), and Combustion Equipment Associates, Inc. (CEA) (collectively, Carter Day Parties) a portion of the $11 million in cleanup costs that Compaction paid to the U.S. Environmental Protection Agency (USEPA) and the New Jersey Department of Environmental Protection (NJDEP) for costs incurred at the Combe Fill South Superfund Site (Site). In concluding that the Carter Day Parties were entitled to summary judgment on Compaction’s CERCLA contribution claim, the court rejected Compaction’s argument that contribution protection under CERCLA only applies to bar claims to recover monies paid to the state or federal agency that was the party to the prior settlement. Instead, the court found that the NJDEP’s settlement with one of the Carter Day Parties served to bar any contribution claim that Compaction might assert under CERCLA for monies that Compaction subsequently paid to both the NJDEP and the USEPA.

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