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Presenting a live 90‐minute webinar with interactive Q&A

PRP Contribution Claims Under CERCLAStrategies for Cost Recovery Against Other Potentially Responsible Parties

T d ’ f l f

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

TUESDAY, SEPTEMBER 13, 2011

Today’s faculty features:

Glenn A. Harris, Partner, Ballard Spahr, Cherry Hill, N.J.

Michael W. Steinberg, Senior Counsel, Morgan Lewis & Bockius, Washington, D.C.

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Glenn A. Harris, Esq. Michael W. Steinberg, Esq.B ll d S h M L iBallard Spahr Morgan [email protected] [email protected] (202) 739-5141

OVERVIEW

Slide No.

I Contribution ClaimsI. Contribution Claims*Their Varieties, Availability, Pros and Cons

7

II. Recent Case Law Developments *Courts “Directing Traffic” to Either § 107 or § 113

33

III. Discussion of Current Issues 76

IV Question and Answer Session 77IV. Question-and-Answer Session 77

6

How important is contribution?

“Contribution” as used here means any legal theory Contribution as used here means any legal theory by which a PRP recovers cleanup costs from other PRPs

Important to PRPs as the primary defense against unfairness of joint and several liability to EPA

Oth t l t itig t f i h t b Other tools to mitigate unfairness have not been widely available or highly effective:

Divisibility of harm (although this is in flux after Divisibility of harm (although this is in flux after Burlington Northern)

Mixed funding

EPA orphan share funding policy

7

How important is contribution? (cont’d)p

Important to EPA because contribution is essential Important to EPA because contribution is essential to achieve settlements that will maintain the historic high rate (~70%) of PRP-lead cleanups

Especially important now as EPA has no budget to perform cleanups except at orphan sites

S EPA d th PRP h h d i t t i So EPA and the PRPs have a shared interest in an effective contribution framework

But don’t assume that EPA will help you obtain But don t assume that EPA will help you obtain contribution from other PRPs at your site!

8

Varieties of contribution claims

CERCLA § 107(a) cost recovery CERCLA § 107(a) cost recovery

CERCLA § 113(f) contribution following litigation or settlement under §§ 106 or 107

§ 113(f)(1) for costs incurred in an action under §§106 or 107

§ 113 f 3 f § 113(f)(3) for costs incurred in settlements with EPA or a State

State lawState law

Statutory (e.g., New Jersey Spill Act)

Common law (e.g., equitable contribution among tortfeasors)

9

Why does it matter how the claim is styled?

Rapidly shifting case law makes this terrain Rapidly shifting case law makes this terrain difficult to navigate

For example, 2 recent decisions by the Second Circuit on the § 107/§ 113 split appear to be directly contradictory

In the first case decided in 2009 the court allowed a In the first case, decided in 2009, the court allowed a PRP to bring a § 107 cost recovery claim but not a §113 contribution claim

In the second case, decided in 2010, the court allowed a similarly situated PRP to bring a § 113 contribution claim but not a § 107 cost recovery claim§ y

10

Why does it matter how the claim is styled? (cont’d)

W.R. Grace v. Zotos, 59 F.3d 85 (2d Cir. 2009)

Niagara Mohawk v. Chevron, 596 F.3d 112 (2d Cir. 2010)

suit by current owner following settlement with NY DEC; DEC

d bli d

suit by former owner following settlement with NY DEC; DEC

d bli d consent order obligated plaintiff to perform RI/FS and RD/RA; orders released all claims under NY law, but

consent orders obligated plaintiff to perform RI/FS and RD/RA; order released all claims under both CERCLA and ,

made no mention of CERCLA NY law

11




§ 113 claim rejected because AOC makes no reference to CERCLA; “there is a risk the

§ 113 claim allowed because AOC recites that DEC releases its CERCLA claims against ;

EPA will take later actions or select different remedies that could expose the PRP to additional liabilities”

plaintiff upon completion of the work

[N B : Isn’t there the same risk additional liabilities” [N.B.: Isn t there the same risk as in Zotos that “EPA will take later actions”?]

12


W R G Z t Ni g M h k Ch

(cont’d)



§ 107 claim allowed “even though its expenditures were made in compliance with a consent order”; beca se § 107(a) not limited to

§ 107 claim rejected because allowing it “would in effect nullify the SARA amendment and abrogate the requirements Congress placed on because § 107(a) not limited to

those who act “voluntarily”; “relevant inquiry . . . is whether [plaintiff acted without] the type of

requirements Congress placed on contribution claims under § 113” –

[N.B.: Court cites only to the CERCLAadministrative or judicial action that would give rise to a contribution claim under section 113(f)”

statute of limitations to support the reference to “requirements”]

13


Some legal theories are inherently more favorable Some legal theories are inherently more favorable to the plaintiff than others

Many worthy claims founder on procedural issues, e.g., a statute of limitations problem that no one anticipated

EPA/DOJ i l t i i t t litig ti EPA/DOJ involvement in private-party litigation can be a “wild card”

EPA/DOJ often seeks to block § 107 claims against EPA/DOJ often seeks to block § 107 claims against settling PRPs

Yet EPA/DOJ refuses to confer such protection up front i ttl t gr tin settlement agreements

14


CERCLA § 107(a) cost recovery

(cont’d)

CERCLA § 107(a) cost recovery

Pros:

Joint and several liability (subject to counterclaim for y ( jequitable contribution)

Easier prima facie case and burden of proof (need not delineate the equitable shares of each defendantdelineate the equitable shares of each defendant

Defenses typically limited to those set forth in § 107(b) (act of God, act of war, third-party defense)

Benefit of highly favorable case law built up by EPA/DOJ over 30 years

Recovery may even include attorney’s fees as “enforcement” cost.

15


CERCLA § 107(a) cost recovery (cont’d)

(cont’d)

CERCLA § 107(a) cost recovery (cont d)

Pros (cont’d):

Longer statute of limitations than for § 113(f) g § ( )contribution claims

Text of CERCLA § 113(g)(2):

“(2) Actions for recovery of costs An initial action for recovery “(2) Actions for recovery of costs. — An initial action for recovery of the costs referred to in section 107 must be commenced —

(A) for removal action, within 3 years after completion of the removal action ; andremoval action, …….; and

(B) for a remedial action, within 6 years after initiation of physical on-site construction of the remedial action……”

16



(cont’d)


Cons:

Courts may be reluctant to grant PRPs the powerful y g pweapon of joint and several liability. Agere Systems v. AETC, 602 F.3d 204 (3d Cir. 2010) (discussed infra); Solutia, Inc. v. McWane, Inc., 726 F. Supp. 2d 1316(N.D. Ala., 2010).

Defendants may raise divisibility of harm based on Burlington Northern, effectively turning claim into one for contribution

17



(cont’d)


Cons (cont’d):

EPA/DOJ may seek to block § 107 claims brought / y § gagainst other PRPs, especially against if those other PRPs have settled with EPA

EPA/DOJ argues that § 107 claims are available only for EPA/DOJ argues that § 107 claims are available only for purely “voluntary” cleanups, although the Supreme Court said no such thing in Atlantic Research Ashland v Gar 729 F Supp 2d 526 (D R I 2010) (“clearly the Ashland v. Gar, 729 F. Supp. 2d 526 (D.R.I. 2010) ( clearly the

focus of the Supreme Court’s analysis [in Atlantic Research] was on the type of recovery sought, not on the voluntariness of the cleanup or the innocence of that party bringing the action.”).

18



(cont’d)


Cons (cont’d):

EPA/DOJ contend that any PRP incurring costs under / y ggovernment agency oversight is limited to a contribution claim under § 113

EPA/DOJ argues that “worker” PRPs had § 113 claims EPA/DOJ argues that worker PRPs had § 113 claims based on the AOC they signed, and even if those claims are now time-barred, they still cannot pursue § 107 claims!

19


CERCLA § 113(f) contribution

(cont’d)

CERCLA § 113(f) contribution

Pros: Usually no objection/challenge by EPA/DOJ

Cons: Must be tied to a statutory “trigger” event EPA (or State) § 107 cost recovery action EPA (or State) § 107 cost recovery action EPA § 106 civil action to compel performance of work RD/RA consent decree Oth r d i i tr ti r j di i ll r d “ ttl t” Other administrative or judicially approved “settlement”

with EPA or the State

Query whether § 113 plaintiff may also seek otherresponse costs that were not incurred pursuant to the same “trigger” event.

20


CERCLA § 113(f) contribution (cont’d)

(cont’d)

CERCLA § 113(f) contribution (cont d)

Cons (cont’d):

Must be tied to a statutory “trigger” eventy gg

EPA Issuance of § 106 Unilateral Administrative Order?

NO -- Emhart Industries, Inc. v. New England Container Co Inc 478 F Supp 2d 199 (D R IContainer Co., Inc., 478 F. Supp. 2d 199 (D.R.I.2007); Raytheon Aircraft Co. v. United States, 435 F. Supp. 2d 1136 (D. Kan. 2006); Pharmacia Corp. v. Clayton Chemical Acquisition LLC, 382 F. Supp. 2d1079 (S.D. Ill. 2005).

21



(cont’d)


Cons (cont’d):

AOC for RI/FS?/

NO -- ITT Indus.. Inc. v. BorgWarner. Inc., 506 F.3d 452 (6th Cir. 2007); Pharmacia Corp. v. Clayton Chemical Acquisition LLC, 382 F. Supp. 2d 1079 (S.D. Ill. 2005).

Practice Tip: Ask to perform RI/FS under a CERCLA consent decree instead, triggering the right to seek contribution

22



(cont’d)


Cons (cont’d):

Even if plaintiff is entitled to seek contribution, that’s pnot the end of the story

Prima facie case includes several common-law elements that may be difficult to prove in the CERCLA context:that may be difficult to prove in the CERCLA context:

common liability to a third party

complete discharge of that party’s claim,

costs were incurred under compulsion of law

23



(cont’d)


Cons (cont’d):

See, e.g., Du Pont v. United States, 297 F. Supp. 2d 740, g pp751-55 (D.N.J. 2003), aff’d on other grounds, 460 F.3d515 (3d Cir. 2006), vacated on other grounds, 127 S. Ct. 2971 (2007). See also BASF Catalysts LLC v. United States, 479 F. Supp. 2d 214 (D.Mass. 2007).

24



(cont’d)

CERCLA § 113(f) contribution (cont d) Cons (cont’d):

Recovery limited to the equitable share of each defendantdefendant

Courts have broad discretion to consider any equitable factors (not just the Gore factors), reviewable on appeal only for abuse of discretiononly for abuse of discretion

Court may find that defendants are liable, but equity dictates that no contribution should be allowed . . . Appleton Papers Inc v George A Whitting Paper Co 2009 WL Appleton Papers Inc. v. George A. Whitting Paper Co., 2009 WL

5064049 (E.D.Wis. Dec. 16, 2009)

or that defendants should be assigned a “zero share” Kalamazoo River Study Group v. Eaton Corp., 258. F. Supp. 2dy p p , pp

736 (W.D. Mich. 2002)

25



(cont’d)


Cons (cont’d):

Statute of limitations is shorter, less predictable (§p (§113(g)(3))

Many contribution claims have no limitation period at all!all!

Text of CERCLA § 113(g)(3):“(3) Contribution. — No action for contribution for any response costs or damages may

be commenced more than 3 years after—be commenced more than 3 years after

(A) the date of judgment in any action under this Act for recovery of such costs or damages, or

(B) the date of an administrative order under section 122(g) (relating to de i i i ttl t ) 122(h) ( l ti t t ttl t ) t minimis settlements) or 122(h) (relating to cost recovery settlements) or entry

of a judicially approved settlement with respect to such costs or damages.”

26



(cont’d)


Cons (cont’d):

Defendants may argue no “common liability” if an EPAy g yclaim against them would have been time-barred based on SOL

Agere Systems v. AETC, 602 F.3d 204 (3d Cir. 2010) (discussed g y , ( ) (infra)

Attorney’s fees generally not recoverable

Litigation fees versus PRP search fees Litigation fees versus PRP search fees

27


State law claims

(cont’d)

State law claims

Pros:

May cover petroleum or other substances not covered by y p yCERCLA

May impose liability on broader universe of “arrangers” or generators (e.g., New Jersey Spill Act: “any person or generators (e.g., New Jersey Spill Act: any person responsible for” a discharge)

May authorize recovery of plaintiff’s attorney’s fees

28


State law claims (cont’d)

(cont’d)

State law claims (cont d)

Cons:

May be preempted by CERCLA (e.g., if recovery would be y p p y ( g yallowed where CERCLA would bar such recovery)

Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., 596 F.3d 112, 138 (2d Cir. 2010) (“state law 596 F.3d 112, 138 (2d Cir. 2010) ( state law contribution claims for CERCLA response costs conflict with CERCLA contribution claims and therefore are preempted” )

29



(cont’d)


Cons (cont’d):

Some courts distinguish between statutory claims and g ycommon-law claims:

In re Reading Corp., 115 F.3d 1111, 1117 (3d Cir. 1997) (“Permitting independent common law remedies 1997) ( Permitting independent common law remedies would create a path around the statutory settlement scheme, raising an obstacle to the intent of Congress.”)

Manor Care Inc v Yaskin 950 F 2d 122 126 (3d Cir Manor Care, Inc. v. Yaskin, 950 F.2d 122, 126 (3d Cir. 1991) (upholding New Jersey DEP’s authority to issue Spill Act directives: “Congress did not intend for CERCLAremedies to preempt complementary state remedies.”p p p y

30



(cont’d)


Cons (cont’d):

Courts tend to finding that state-law contribution gremedies are preempted, but:

Preemption cases are difficult to reconcile with CERCLA’s savings clauses in § 114(a) and § 310(h)§ §

Preemption cases are not carefully reasoned, and so the law in this area should not be viewed as stable or settled

State law claims may also be subject to state-specific State law claims may also be subject to state specific anomalies

E.g., the Minnesota Environmental Response and Liability Act (MERLA) allows PRPs to recover their “removal” costs but not (MERLA) allows PRPs to recover their removal costs but not their “remedial” costs

31

OVERVIEW

Slide No.


3


33



32

C I d t i I A i ll S i I Cooper Industries, Inc. v. Aviall Services, Inc. , 543 U.S. 157 (2004).

33

Cooper Industries, Inc. v. Aviall Services, Inc.

Plaintiff Aviall Services Inc bought property from

p

Plaintiff, Aviall Services Inc., bought property from defendant, Cooper Industries, Inc.

Aviall later discovered environmental contamination on the property and voluntarily remediated

Aviall brought a civil action against Cooper, seeking f C ’ it bl h f recovery of Cooper’s equitable share of

environmental response costs

One of Aviall’s several claims was ultimately brought One of Aviall s several claims was ultimately brought under CERCLA section 113(f)(1)

34

Cooper’s Motion for Summary Judgment

Cooper argued that Aviall could not state a claim

p y g

Cooper argued that Aviall could not state a claim under section 113(f)(1) because Aviall had not been sued under section 106 or 107

District Court agreed, and dismissed the claim

5th Circuit Court of Appeals affirmed, then reversed the dismissal by a divided en banc panel vote the dismissal by a divided en banc panel vote

The Supreme Court affirmed dismissal of the claim by the lower courts

35

Supreme Court’s Holding

Private party who has not first been sued under

p g

Private party who has not first been sued under section 106 or 107 cannot seek contribution under section 113(f)(1) from other potentially responsible

ti (“PRP ”) f di ti t it i d parties (“PRPs”) for remediation costs it incurred

Supreme Court based its decision on the plain language of section 113(f)(1): language of section 113(f)(1):

“Any person may seek contribution from any other person who is liable or potentially liable under section 960 f f9607(a) of this title, during or following any civil action under section 9606 … or under section 9607(a).” (emphasis added)

36

37

United States v. Atlantic Research Corp.

Plaintiff Atlantic Research Corp leased property

p

Plaintiff, Atlantic Research Corp., leased property from US Department of Defense

In the course of work done for the U.S., Atlantic contaminated the site, then voluntarily cleaned it

Atlantic brought a civil action against the US under CERCLA ti 107 t h f t CERCLA section 107 to recover share of costs incurred in voluntarily cleaning up contaminated site

38

U.S. Moves to Dismiss

U S argued that section 107(a) does not allow PRPs U.S. argued that section 107(a) does not allow PRPs(such as Atlantic) to recover costs

District Court granted dismissal

8th Circuit Court of Appeals reversed, stating that section 113(f) does not provide the exclusive route by which PRPs may recover cleanup costswhich PRPs may recover cleanup costs

Supreme Court affirmed judgment of the Court of Appeals

39

Supreme Court’s Holding

PRPs who have voluntarily incurred remediation

p g

PRPs who have voluntarily incurred remediation costs may bring cost recovery action against other PRPs under section 107(a)(4)(B)

The decision harmonized section 107(a) cost recovery and 113(f) contribution:

“§ 107(a) permits cost recovery (as distinct from “§ 107(a) permits cost recovery (as distinct from contribution) by a private party that has itself incurred clean-up costs. . . . [C]osts of reimbursement to

th t t l g l j dg t another person pursuant to a legal judgment or settlement are recoverable only under § 113(f).” (emphasis added)

40

Supreme Court’s Holding (cont’d)

While recognizing possible scenario Court declined

p g

While recognizing possible scenario, Court declined to decide whether costs of work done pursuant to consent decree under section 106 or 107 ( ll d t ) bl d ti (compelled costs) are recoverable under section 113(f), 107(a), or both

41

Footnote Six

We do not suggest that §§ 107(a)(4)(B) and 113(f) have no §§overlap at all. Key Tronic Corp. v. United States, 511 U.S. 809, 816, 114 S.Ct. 1960, 128 L.Ed.2d 797 (1994) (stating the statutes provide “similar and somewhat overlapping remed[ies]”). For instance, we recognize that a PRP may sustain expenses pursuant to a consent decree following a suit under § 106 or § 107(a). See , e.g. , United Technologies Corp. v. Browning-Ferris Industries, Inc.. , 33 F.3d 96, 97 (C.A.1 1994). In such a case, the PRP does not incur costs voluntarily but does not reimburse the costs of another party. We do not decide whether these compelled costs of response are recoverable under § 113(f), § 107(a), or both. For our purposes, it suffices to demonstrate that costs

§incurred voluntarily are recoverable only by way of §107(a)(4)(B), and costs of reimbursement to another person pursuant to a legal judgment or settlement are recoverable only under § 113(f). Thus, at a minimum, neither remedy swallows the other, contrary to the Government's argument.

42

Section 107 Language

Section 107(a) – Liability

g g

Section 107(a) Liability

The statute sets out who is liable in § 107(a)(1)-(4) and then states in §107(a)(4) to whom those parties are liable and what they are liable for:

To the government for all costs of a removal or remedial action not inconsistent with the NCP and,

To any other person for any other costs of response incurred which costs are consistent with the NCP.

43

Section 113(f) Language( ) g g

Section 113(f) “Contribution” Section 113(f) Contribution

Contribution. — Any person may seek contribution from any other person who is liable or potentially liable under §107(a) during or following any civil action under § 106 or under § 107(a).

Settlement. — A person who has resolved its liability to Settlement. A person who has resolved its liability to the United States or a State in an administrative or judicially approved settlement shall not be liable for claims for contribution regarding matters addressed in claims for contribution regarding matters addressed in the settlement.

44

Section 113(f) Language (cont’d)

Persons not party to settlement

( ) g g

Persons not party to settlement.

……………

A person who has resolved its liability to the United p yStates or a State for some or all of a response action or for some or all of the costs of such action in an administrative or judicially approved settlement mayadministrative or judicially approved settlement mayseek contribution from any person who is not party to a settlement referred to in paragraph (2).

45

Costs Clearly Recoverable Under Either §107 or §113

Claims that must be brought under §107:

§107 or §113


Costs incurred in cleanup undertaken without EPA oversight or involvement.


Claims against 3rd parties for government incurred t h th g t h d t d l costs where the government has conducted a cleanup

and sued your client for cost recovery.

46

Agere Systems, Inc., et al. v. Advanced Agere Systems, Inc., et al. v. Advanced Environmental Technology Corp., et al.

602 F.3d 204 (3d Cir. 2010)

47

Agere Systems, Inc., et al. v. Advanced Environmental Technology Corp et al

Three of five plaintiffs agreed in US Consent Decree

Environmental Technology Corp., et al.

Three of five plaintiffs agreed in US Consent Decree to perform OU-1 Work

Those three plus another plaintiff, TI, agreed in a second US Consent Decree to reimburse US past costs and to perform OU-2 Work

TI j i d OU 1 G d Ag j i d OU 1 d OU TI joined OU-1 Group and Agere joined OU-1 and OU-2 Groups

Claims asserted under Section 107(a) and Section Claims asserted under Section 107(a) and Section 113(f)

48

Agere Systems, Inc., et al. v. Advanced Environmental Technology Corp et al

Held --

Environmental Technology Corp., et al. (cont’d)

Held

1) Plaintiffs who if permitted to bring a Section 107(a) claim would be shielded from contribution counterclaims under Section 113(f)(2) do not have any 107(a) claims for costs incurred

2) TI and Agere have 107(a) claims for “Work” costs, as 2) TI and Agere have 107(a) claims for Work costs, as they were never sued

Statutory language ignored, sole focus was perceived inequity of permitting joint and several liability without perceived possibility of equitable allocation counterclaims

49

Niagara Mohawk Power Corp. v. Chevron Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., et al.

596 F.3d 112 (2nd Cir. 2010)

50

Niagara Mohawk Power Corp. v. Chevron U S A Inc et al

Plaintiff entered into State Consent Order to

U.S.A., Inc., et al.

Plaintiff entered into State Consent Order to perform remediation

Consent Order expressly resolved State’s CERCLAclaimsclaims

Claims asserted under Section 107(a) and Section 113(f)

Held – Plaintiffs limited to Section 113(f)

Statutory language ignored, allowing Section 107(a) l i ld “ llif th SARA d t d claims would “nullify the SARA amendment and

abrogate the requirements Congress placed on contribution claims under Section 113” – noting diff t t t t f li it tidifferent statutes of limitations

51

M i E t i LLC t l D CMorrison Enterprises, LLC, et al. v. Dravo Corp.638 F.3d 594 (8th Cir. 2011)

52

Morrison Enterprises, LLC, et al. v. Dravo Corp.

Plaintiffs entered into US AOCs and Consent Decree

p p

Plaintiffs entered into US AOCs and Consent Decree to do work

Claims asserted under Section 107(a) and Section 113(f)

Held – Section 107(a) claim dismissed

Entitled to Section 113(f) claim, but claim dismissed as time barred

Statutory language ignored no Section 107(a) Statutory language ignored, no Section 107(a) claim because work costs were not incurred “voluntarily”

53

B t i t l B k t t l Bernstein, et al. v. Bankert, et al. 2010 WL 3893121 (S.D. Ind. 2010)

54

Bernstein, et al. v. Bankert, et al.

Held -- No Section 107(a) -- Statutory language Held No Section 107(a) Statutory language ignored, no Section 107(a) because work pursuant to Consent Decree, so not “voluntary” –– Follows Ag b C t D g t ib ti Agere, because Consent Decree gave contribution protection would prohibit Section 113(f) counterclaim, prevent injustice

55

S l ti I t l M W I Solutia, Inc. et al. v. McWane, Inc. 726 F. Supp. 2d 1316 (N.D. Ala. 2010)

56

Solutia, Inc. et al. v. McWane, Inc.

Held – Section 113(f) only because State Consent

, ,

Held Section 113(f) only because State Consent Decree released CERCLA claims – If settlement gives rise to contribution rights, then Section 113(f)

l if t th S ti 107( ) l N only; if not, then Section 107(a) only – No “voluntary” requirement, acknowledges statutory language in Section 107(a), but Congress could not have “intended that a plaintiff could avoid the less favorable aspects of Section 113(f) claims … just by seeking those very same costs via Section 107(a)” seeking those very same costs via Section 107(a) -- relies on “some or all of a response action or for some or all of the costs of such action”

57

U it d St t Ph i C t l United States v. Pharmacia Corp., et al. 713 F. Supp. 2d 785 (S.D. Ill. 2010)

58

United States v. Pharmacia Corp., et al.

Held – Section 107(a) cross-claim permitted for

p

Held Section 107(a) cross claim permitted for costs incurred “voluntarily outside the scope of” Pharmacia’s partial US Consent Decree and not

i b bl t th US S ti 113(f) l i reimbursable to the US – Section 113(f) claim previously dismissed because US lost liability trial against remaining defendant

59

Opinions allowing a Section 107(a) claim where there is no right to a Section 113(f) claim

60

W.R. Grace & Co. –CONN v. Zotos Int’l, Inc. 559 F.3d 85 (2d Cir. 2009)

61

W.R. Grace & Co. –CONN v. Zotos Int’l, Inc.

Plaintiff entered into State Consent Order to do Plaintiff entered into State Consent Order to do work and reimburse State response costs

CO did not mention CERCLA

Held – Section 107(a) claim permitted, no Section 113(f) claim

No Section 113(f) claim because not a CERCLAsettlement

No statutory requirement that costs be “voluntary” No statutory requirement that costs be “voluntary”, and Grace did the work itself

62

W.R. Grace & Co. –CONN v. Zotos Int’l, Inc., (cont’d)(cont’d)

“The relevant inquiry is whether the party The relevant inquiry … is whether the party undertook the remedial actions without the need for the type of administrative or judicial action that

ld gi i t t ib ti l i d would give rise to a contribution claim under section 113(f)”

Encourage cleanupsEncourage cleanups

63

ITT Industries Inc v BorgWarner IncITT Industries, Inc. v. BorgWarner, Inc.506 F.3d 452 (6th Cir. 2009)

64

ITT Industries, Inc. v. BorgWarner, Inc.g

Plaintiff entered into ACO that was not a Section Plaintiff entered into ACO that was not a Section 113(f) settlement

Held –Section 107(a) permitted

ACO gave no contribution rights, so Section 107(a) permitted

65

A hl d I GAR El t f i g t lAshland Inc. v. GAR Electroforming, et al.729 F. Supp. 2d 526 (D.R.I. 2010)

66

Ashland Inc. v. GAR Electroforming, et al.g

Plaintiff responded to EPA letter and accompanying Plaintiff responded to EPA letter and accompanying AOC with a letter agreeing to be a Performing Party (others had settled with EPA) and thereafter

f d t i k d i b d EPA performed certain work and reimbursed EPA oversight costs

Held – Section 107(a) claim permitted against Held Section 107(a) claim permitted against parties to EPA Consent Decree; no Section 113(f) claim because Plaintiff was never sued, never j di i l d i i t ti l f ttl tjudicial or administrative approval of settlement

67

Ashland Inc. v. GAR Electroforming, et al., (cont’d)(cont’d)

No statutory requirement that costs be “voluntary”; No statutory requirement that costs be voluntary ; follows Grace

Contribution protection given to CD parties did not bar Section 107(a) claim

68

Ford Motor Co. v. Michigan ConsolidatedFord Motor Co. v. Michigan ConsolidatedGas Co.

2009 WL 3190418 (E.D. Mich. 2009)

69

Ford Motor Co. v. Michigan Consolidated Gas Co.Ford Motor Co. v. Michigan Consolidated Gas Co.

Plaintiff entered into State voluntary CERCLA CACOyto do remediation

Brought Section 107(a) and Section 113(f) claims Held Section 107(a) claim permitted; Section Held – Section 107(a) claim permitted; Section

113(f) claim dismissed No Section 113(f) claim because wasn’t 122(g) or

(h) (statute of limitations)(h) (statute of limitations) No statutory requirement that costs be “voluntary”

and it was voluntary Encourage cleanups

70

US v. Pharmacia Corp., et al. US v. Pharmacia Corp., et al. v. Rogers Cartage

713 F. Supp. 2d 785 (S.D. Ill. 2010)

71

US v. Pharmacia Corp., et al. v. Rogers Cartagep g g

Cross-claim Plaintiffs sued by US, entered into y ,partial settlement

Cross-claim Defendants found not liable to US at trialt a

Cross-claims asserted under Section 107(a) and Section 113(f) for costs outside scope of settlement (that claim dismissed when cross-claim Defendant (that claim dismissed when cross claim Defendant found not liable)

Held – Section 107(a) claim permitted, but only for costs outside the scope of any ACO or Consent costs outside the scope of any ACO or Consent Decree and not reimbursement

Being sued by the US under Section 107(a) does not bar a Section 107(a) claimbar a Section 107(a) claim

72

Queens West Development Corp. v. Queens West Development Corp. v. Honeywell International Inc.

No. 3:10-cv-04876 (D.N.J. Aug. 17, 2011)

73

Queens West v. Honeywell International

Queens West remediated a former chemical works

y

Queens West remediated a former chemical works operated by Honeywell’s predecessor in Long Island City.

Remediation performed under New York DEC’s Remediation performed under New York DEC’svoluntary cleanup program

Contribution claim asserted under § 113(f)§ Held – No § 113 claim permitted for costs incurred

voluntarily, which (citing Atlantic Research) are recoverable only under § 107(a) recoverable only under § 107(a).

Queens West did not allege (1) that it is a PRP, or (2) that it entered into an administrative or j di i ll d ttl tjudicially approved settlement

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OVERVIEW

Slide No.


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Discussion of Current Issues

76

Question-and-Answer Session

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Glenn A. Harris, Esq. Michael W. Steinberg, Esq.B ll d S h M L iBallard Spahr Morgan [email protected] [email protected] (202) 739-5141

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