U.S. Supreme Court Denies Recovery of Cost Incurred in Performing Independent Remedial Action

By Ame C. Wellman
[December 2004]

As a result of a United States Supreme Court ruling last week, private parties who perform independent remedial actions may be barred from recovering such costs from other potentially responsible parties (PRPs). Absent a cleanup order from the government, private parties who perform cleanup actions may not be able to seek contribution from other PRPs.

The Aviall Decision

On Dec. 13, 2004, the U.S. Supreme Court issued a decision that may curtail private contribution actions under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), also known as Superfund. In Cooper Industries, Inc. v. Aviall Services, Inc., Case No. 02-1192, 543 U.S. _____ (2004), the Supreme Court interpreted CERCLA as specifically limiting contribution actions brought by private parties under § 113(f)(1). The court ruled that a party may only bring a § 113(f)(1) contribution action to recover costs from other PRPs when the United States or a state has taken action against it under § 106 or § 107.

In Aviall, contaminated aircraft engine maintenance sites in Texas were sold by Cooper Industries to Aviall. Aviall subsequently discovered that the sites were contaminated by the onsite operations of Cooper and Aviall. A Texas agency notified Aviall that it was in violation of Texas environmental laws and directed it to clean up the property or risk having an enforcement action brought against it. Accordingly, Aviall voluntarily remediated the property under agency supervision and filed a contribution action against Cooper for its allocable share of the clean-up costs.

The Supreme Court held that Aviall could not seek contribution from Cooper under § 113(f)(1) because Aviall had not been the subject of an action brought by the United States or Texas under CERCLA. The Court read the language of § 113(f)(1), which states that a party “may seek contribution…during or following any civil action” brought under § 106 or § 107…”, to mean that contribution actions are allowed only when the government has asserted such a claim against the party seeking contribution. Notably, the Supreme Court declined to rule on two additional issues: (a) whether a PRP can recover response costs for a voluntary cleanup under § 107; and (b) whether there is an implied right of contribution under § 107. Some courts, including the Ninth Circuit, have held that a PRP cannot bring a § 107 action because such claims may only be brought by government agencies and "innocent" plaintiffs (i.e., those parties without any culpability or liability).

Potential Impacts of Aviall

Aviall flies in the face of conventional interpretations of CERCLA. Prior to this decision, most courts allowed private parties who voluntarily cleaned up a contaminated site to bring a contribution suit under § 113(f)(1) to recover their costs from other PRPs. While many parties will likely still have a right of contribution for voluntary cleanups under state Superfund laws, this new interpretation of CERCLA may result in a number of notable impacts, such as:

• Private parties may be disinclined to clean-up contaminated properties if it is possible that they will not be able to recover those costs from responsible parties. As a result, cleanup actions may be delayed until government enforcement actions force PRPs to perform a cleanup.
  
  
• State Superfund statutes may be interpreted to limit private contribution actions in the same way, particularly if the state statutory language is similar to CERCLA.
  
  
• The Aviall decision may spur a call to amend CERCLA to provide for contribution actions by private parties who voluntarily clean-up contaminated properties.

For More Information

Davis Wright Tremaine has successfully assisted clients in disputes involving liability for hazardous substances, including contribution and cost recovery actions, involving facilities throughout the western United States. We have the expertise and experience to help you develop an effective strategy for dealing with these disputes. We welcome the opportunity to meet with you and discuss your individual legal needs.

For further information, contact:

Author: Ame C. Wellman Seattle, Washington (206) 903-3945 AmeWellman@dwt.com

Lynn T. Manolopoulos, Bellevue, (425) 646-6146, LynnManolopoulos@dwt.com
Richard M. Glick, Portland, (503) 778-5210, RickGlick@dwt.com
Lawrence B. Burke, Portland, (503) 778-5239, LarryBurke@dwt.com

This Environmental Law Advisory is a publication of the Environmental Law Department of Davis Wright Tremaine LLP. Our purpose in publishing this Advisory is to inform our clients and friends of recent developments in environmental law. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may be given only in response to inquiries regarding particular situations.

Copyright © 2004, Davis Wright Tremaine LLP.

return to Advisory Bulletins main page