The Supreme Court has had a lot to say in recent years about how the lower courts should be interpreting CERCLA, but the trend appears to have ended, at least for now.  On October 3, the Court declined to review the Eighth Circuit’s decision inMorrison Enterprises, LLC v. Dravo Corp., which held that the contribution provision of § 113(f) of CERCLA provides the exclusive remedy for a PRP that incurs response costs pursuant to an administrative or judicially approved settlement under §§ 106 or 107, such as a consent decree or administrative order on consent (AOC).

This is the second time within the past year that the Supreme Court has declined to further address the relationship between § 107(a) cost recovery and § 113(f) contribution – the subject of the Court’s landmark 2007 decision in United States v. Atlantic Research, which held for the first time that § 107(a) cost recovery is not limited to the government.  (The other, Carpenter Technology Corp. v. Agere Systems, Inc., et al., posed the question of whether a PRP that contributes funds toward a cleanup by settling with a consent decree party has a § 107(a) claim, when the consent decree party itself is limited to a more restrictive § 113(f) claim.  MGKF represented Carpenter as appellate counsel in that case.)

And while Justice Thomas openly questioned in Atlantic Research whether a party that conducts a cleanup pursuant to a consent decree has a claim “under § 113(f), § 107(a), or both,” the legal landscape is becoming well-defined.  So, a PRP that incurs cleanup costs after being sued or settling under § 106 or § 107 cannot bring a § 107(a) cost recovery claim, but can bring a § 113(f) claim for contribution.  And conversely, a PRP that incurs cleanup costs without being sued or settling under § 106 or § 107 cannot bring a § 113(f) claim for contribution, but can bring a § 107(a) claim for cost recovery. 

This framework appears necessary to preserve the vitality of the § 113(f) contribution claim, since, if given a choice between the two claims, a PRP would invariably choose a  § 107(a) cost recovery claim, which offers a longer statute of limitations, joint and several liability, and a relaxed burden of proof.  And it is quite possibly for this reason that the Court has refrained from stepping back into the issue.

What remains to be seen, though, is how this will affect the incentives for cleanups on a going-forward basis.  Today, all other things being equal, a PRP that intends to recover cleanup costs from other PRPs would best be served by attempting to conduct a cleanup without signing on to a consent decree or AOC.  This could theoretically lead to earlier, voluntary cleanups, but will it in practice?  And might there be times when the existing caselaw creates incentives not to settle with the government, in an attempt to preserve a § 107(a) claim?  Time will tell.

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