Presenting a live 90-minute webinar with interactive Q&A PRP Contribution Claims Under CERCLA: Strategies for Cost Recovery Against Potentially Responsible Parties THURSDAY, JULY 6, 2017 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Glenn A. Harris, Partner, Ballard Spahr , Cherry Hill, N.J. David A. Haworth, Of Counsel, Ballard Spahr , Cherry Hill, N.J. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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Glenn A. Harris, Esq. David A. Haworth, Esq. Ballard Spahr Ballard Spahr harrisg@ballardspahr.com haworthd@ballardspahr.com 856-761-3440 856-873-5525
OVE VERVIE VIEW Slide ide No. I. Cont ntribu ributio tion Claims ims 7 *Varieties, ties, Availa ilabi bility lity, Pros ros & Cons ns II. II. Rece cent nt Case Law aw Developme velopment nts s 44 44 *Courts ts “ Direc ecting ting Traffic ic ” to § 107 or § 113 III. I. Discussi cussion of of Curren rent Issues ues 70 70 6
What is “contribution”? “Contribution is defined as ‘the tortfeasor’s right to collect from others . . . after [paying] more than his . . . proportionate share . . . .’ Nothing in [CERCLA] § 113(f) suggests that Congress used the term ‘contribution’ in anything other than this traditional sense.” U.S. v. Atlantic Research Corp., 551 U.S. 128, 138 (2007) (citation omitted) Usually contrasted with § 107(a) cost recovery. But today we will use “c ontribution ” broadly to include any legal theory by which a PRP seeks to recovers any response costs from any other PRPs. 7
Why y is is co contri ribu bution ion im impor ortant? tant? Vitally important to PRPs to mitigate the unfairness of joint and several liability (to EPA or State) Other tools to mitigate this unfairness have limited availability or effectiveness: Divisibility of harm (even after 2009 Supreme Court ruling in Burlington Northern ) Mixed funding (CERCLA § 122(b)) EPA “ interim ” orphan share funding policy (1996) De minimis settlements 8
Why y is is co contri ribu bution ion im impor ortant? tant? (c (con ont ’ d) d) Vitally important to EPA because contribution is what facilitates the settlements needed to maintain the historic high rate (50% - 70%) of PRP-lead cleanups Especially important now as EPA effectively has no budget to perform or complete cleanups except at orphan sites So EPA and the PRPs have a strong shared interest in an effective contribution framework But don ’ t assume that EPA will help you obtain contribution from other PRPs at your site! 9
Var arieties ieties of co contribut ribution ion cl clai aims CERCLA § 107(a) cost recovery claims § 107(a)(4)(B) for “ necessary ” response costs incurred that are “ consistent with ” the National Contingency Plan ( “ NCP ” ) Recognized in U.S. v. Atlantic Research Corp. , 551 U.S. 128 (2007), discussed infra CERCLA § 113(f) contribution claims § 113(f)(1) for costs incurred during or following a civil action under §§ 106 or 107; and § 113(f)(3) for costs incurred in other administrative or judicially approved settlements with EPA or a State 10
Var arieties ieties of co contribut ribution ion cl clai aims ( cont ’ d ) State law Statutory (e.g., New Jersey Spill Act, Minnesota Environmental Response and Liability Act, Washington Model Toxics Control Act) May be keyed to plaintiff’ s compliance with federal or state cleanup procedures and/or standards, e.g.: NJ: cleanup “shall, to the greatest extent possible, be in accordance with the” NCP MA: Massachusetts Contingency Plan ( “ MCP ” ) WA: costs recoverable for actions that “when evaluated as a whole, are the substantial equivalent” of a DEP-conducted remedial action. Common law (e.g., equitable contribution among joint tortfeasors, unjust enrichment, trespass, restitution, private nuisance, etc.) 11
Avai ailabil lability ity Which of these claims are actually available to plaintiffs in the most common recurring scenarios? PRPs performing an RI/FS PRPs performing a removal action PRPs performing RD/RA PRPs performing work under a § 106 unilateral order >35 years after CERCLA was enacted, it remains surprisingly difficult to answer this basic question, despite 2 Supreme Court rulings and a host of appellate decisions. 12
Avai ailabil lability ity ( con ont ’ d ) 2 recent decisions by the Second Circuit on the § 107/ § 113 split illustrate this problem: In one case, decided in 2009, the court allowed a PRP to bring a § 107 cost recovery claim but not a § 113 contribution claim In the other case, decided in 2010, the court allowed a similarly situated PRP to bring a § 113 contribution claim but not a § 107 cost recovery claim Let ’ s take a closer look 13
Avai ailabi labilit lity y (cont nt ’ d) d) W.R. R. Grace e v. Zot otos , , Ni Niagar a Mohawk k v. Chevron ron , , 559 F.3d 85 (2d Cir ir. 2009) 596 F.3d 112 (2d Cir ir. 2010 10) *suit by current owner *suit by former owner following following settlement with NY settlement with NY DEC; DEC; *DEC consent orders obligated *DEC consent order obligated plaintiff to perform RI/FS and plaintiff to perform RI/FS and RD/RA; RD/RA; *order released all claims *orders released all claims under both CERCLA and NY law under NY law, but made no mention of CERCLA 14
Avai ailabi labilit lity y (cont nt ’ d) d) W.R. R. Grace e v. Zot otos , , Niagara a Mohawk wk v. Chevron ron , , 559 F.3d 85 (2d Cir ir. 2009) 596 F.3d 112 (2d Cir ir. 2010 10) § 113 claim allowed because § 113 claim rejected because AOC recites that DEC releases AOC does not mention CERCLA, its CERCLA claims against so “ there is a risk the EPA will plaintiff upon completion of the take later actions …that could work expose the PRP to additional liabilities ” , i.e. Grace has not [N.B.: Isn ’ t there the same risk “resolved its liability to” gov’t as in Zotos that “ EPA will take later actions ” ?] [N.B.: 3d Circuit reached the opposite conclusion in Trinity Industries, discussed infra .] 15
Avai ailabi labilit lity y (cont nt ’ d) d) W.R. Grace v. Zot otos, Niagara a Mohawk wk v. Chevron ron , , 559 F.3d 85 (2d Cir ir. 2009) 596 F.3d 112 (2d Cir ir. 2010 10) § 107 claim rejected because § 107 claim allowed “ even though allowing it “ would in effect nullify the its expenditures were made in SARA amendment and abrogate the compliance with a consent order ” ; requirements Congress placed on because § 107(a) not limited to contribution claims under § 113 ” those who act “ voluntarily ” ; “ relevant inquiry . . . is whether [N.B.: Court cites only to the CERCLA [plaintiff acted without] the type of statute of limitations to support the administrative or judicial action that reference to “ requirements ” ] would give rise to a contribution claim under section 113(f) ” 16
Avai ailabil lability ity (c (con ont ’ d) d) Shifting case law on basic availability of claims makes this terrain very difficult to navigate In many cases, we can expect a battle over which type(s) of claims the plaintiff is entitled to assert. The fight over which type of claim is available often decides the outcome of the litigation. 17
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