On February 24, 2010, the Second Circuit issued an important CERCLA contribution decision in Niagara Mohawk Power Corp. v. Chevron USA, Inc., 2010 WL 626064. Over the last 100 years, the site at the heart of the decision, the Water Street Site in Troy, New York has, according to the Court, “played host to various industrial activities including a coke plant, a steel manufacturing facility, a manufactured gas plant and a petroleum distribution facility,” all of which uses “led to the release or disposal of toxic substances, many subject to liability under CERCLA.” In its holding, the Second Circuit ruled that a contribution plaintiff need not establish the precise amount of hazardous material discharged or prove with certainty that a PRP defendant discharged the hazardous material to get their CERCLA claims past the summary judgment stage. Has the Second Circuit significantly raised the bar for defendants seeking summary judgment in private cost recovery cases? That is the thesis of Steven G. Jones in an article titled, “Second Circuit Makes Summary Judgment More Difficult to Obtain for Defendants in CERCLA Contribution Actions,” dated March 5, 2010. Jones contends that some CERCLA defendants, faced with a long and complex trial, may be more inclined to resolve their cases in mediation if it is less likely that a CERCLA defendant will be able to obtain dismissal through summary judgment prior to trial. In reversing the federal district court in the North District of New York, the Second Circuit relied on its prior precedent in United States v. Alcan Aluminum Corp., 990 F.2d 711, 721 (2d. Cir. 1993), which decision represented what the court described as a purposeful lowering of the liability to be a PRP and a relaxed CERCLA liability standard. It also cited the Tenth Circuit’s holding in Tosco Corp. v. Koch Indus., Inc., 216 F.3d 886, 892 for the proposition that “CERCLA liability may be inferred from the totality of the circumstances as opposed to direct evidence.” Thus, in my view, Niagara Mohawk is less an expansion of existing CERCLA case law in the Second Circuit as much as it is a rebuke to the trial judge, who arguably did not apply the correct standard in the first instance.
Nothing in §107(a)(4)(B) references “voluntary” cleanups, and nothing in that section restricts its application to “voluntary” cleanups or actors. Sections 107(a) and 113(f) of CERCLA allow private parties to recover expenses associated with cleaning up contaminated sites. Similarly, nothing in Atlantic Research and its progeny restricts the application of cost recovery actions under CERCLA §107(a)(4)(B) to “voluntary” cleanups. If that is the case, what is the basis for the contention that only PRPs that perform cleanups voluntarily are entitled to pursue §107 cost recovery claims?
Section 107(a) defines four categories of PRPs and makes them liable for, among other things, “(A) all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe not inconsistent with the national contingency plan” and “(B) any other necessary costs of response incurred by any other person consistent with [such] plan,” §§107(a)(4)(A)-(B). This is the language on which the Supreme Court relied in its decision in Atlantic Research.Similarly, Atlantic Research is best understood in the context of the development of the law of recovery of CERCLA response costs. Historically, some courts interpreted §107(a)(4)(B) as providing a cause of action for a private party to recover voluntarily incurred response costs and to seek contribution after having been sued. However, after the enactment of §113(f), which authorizes one PRP to sue another for contribution, many courts held §113(f) to be the exclusive remedy for PRPs. In Cooper Industries, Inc., the Supreme Court demonstrated the limitations of §113, and held that a private party could seek contribution under §113(f) only after being sued under §§106 or 107(a). In Atlantic Research, the Supreme Court held that §107(a)(4)(B)’s plain language allows a PRP to recover costs from other PRPs, providing a cost recovery remedy to PRPs that had not been sued under §§106 or 107(a).
The Atlantic Research decision uses the term “voluntary” at times, but does not define the term or use it literally. After all, only parties that do not have liability under CERCLA or other regulatory schemes truly engage in “voluntary” response actions. Rather, in Atlantic Research and its progeny the term “voluntary” is simply used to draw a contrast with private parties who have been sued under CERCLA §§106 or 107(a) and, therefore, pursuant to Cooper Industries, qualify to seek contribution from other liable parties under CERCLA §113. Despite the Court’s use of the terms “voluntary” and “involuntary” to distinguish between payments recoverable under §107(a) and those recoverable under §113(f), the operative principle appears to be that §107(a) is available to recover payments only in cases where §113(f) is not. This is what a federal district trial court concluded recently in Appleton Papers Inc. v. George A. Whiting Paper Co., No. 08-C-16, 2008 WL 3891304 (E.D.Wis. Aug. 20, 2008). In E.I. Dupont de Nemours & Co. v. United States, 508 F.3d 126 (3d Cir. 2007), the Third Circuit distinguished between “those who voluntarily admitted their responsibility” and those who have “in fact been held responsible (via adjudication or settlement with the EPA)” in discussing who may bring an action under CERCLA §107(f). Id at 133. Therefore, a PRP who conducts a dialog with a regulatory agency concerning how best to clean up a site does not make the PRP who admits liability and accepts responsibility any less a volunteer under CERCLA and applicable case law. In Champion Laboratories, Inc. v. Metex Corp., No. 02-5284, 2008 WL 1808309 (D.N.J. Apr. 21, 2008), the Hon. William H. Walls held that a plaintiff undergoing an ISRA cleanup in New Jersey could pursue a CERCLA §107 claim.. The New Jersey district court clearly did not find the pendency of an ISRA cleanup any impediment to plaintiff’s pursuit of a CERCLA §107 claim. The whole point of the Atlantic Research decision is that PRPs may, without regard to their own disposal activity, avail themselves of CERCLA §107.
Nothing in CERCLA §107(a)(4)(B) or any decision post-Atlantic Research conditions a party’s eligibility to bring a cost recovery action under CERCLA §107(a)(4)(B) on that party’s response action having been purely voluntary. Any other interpretation of "voluntariness" under CERCLA, if adopted, would have the anomalous result of barring the doors of the courthouse to CERCLA plaintiffs who cannot bring a CERCLA §113 claim (having not been the prior subject of a §106 or §107 claim by the United States), but whose cleanup may not have been “voluntary” in the strictest sense. It was clearly not the intention of Atlantic Research to limit access to the courthouse to only a restricted sub-class of CERCLA §107 plaintiffs.