January 20, 2014 Article

Seventh Circuit Takes a Second Look at Its Decision on CERCLA Liability after EPA Settlement

The court added yet more wrinkles to this already crag-filled area of the law

by Jessica Wall and Travis Godwin

In a rare amended decision, the Seventh Circuit has added yet more wrinkles to an already crag-filled area of the law: when parties who have settled their liability with the Environmental Protection Agency can bring claims for contribution, versus claims for cost-recovery, under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). The court’s original decision in Bernstein v. Bankert, 733 F.3d 190 (7th Cir. 2013)(dated December 19, 2012) caused such concern regarding the liability of potentially responsible parties (PRPs) upon settlement with the EPA that the EPA felt compelled to join the defendant-appellants as amicus curiae urging rehearing of the case by a panel. The Seventh Circuit issued its amended decision on July 31, 2013.

In Bernstein, the trustees of a fund created to finance and oversee the cleanup of a former waste-handling and disposal site incurred significant costs in undertaking removal actions at the site.  The trustees entered into two administrative orders by consent (AOCs) with the EPA, one in 1999 and another in 2002, forcing such removal actions. The EPA approved the work completed under the 1999 AOC in October 2000. In 2008, the trustees brought several claims, including a cost recovery claim under CERCLA § 107(a), against the former owners of the site, their corporate entities, and their insurers. When the trustees filed suit, the work under the 2002 AOC remained unfinished, and the EPA had not deemed it completed.

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