New Rules (revised) for Negotiating Superfund Settlements
| Jurisdiction | United States,Federal |
| Citation | Vol. 24 No. 5 Pg. 1069 |
| Pages | 1069 |
| Publication year | 1995 |
1995, May, Pg. 1069. New Rules (Revised) for Negotiating Superfund Settlements
When United States v. Colorado & Eastern Railroad Co., Inc.(fn1) was reviewed in this column in the February 1995 issue of The Colorado Lawyer,(fn2) the title of the article announced "New Rules for Negotiating Superfund Settlements." The article also noted a pending petition for rehearing. This petition was granted in part on March 17, 1995; the Tenth Circuit withdrew its first opinion and filed a second opinion.(fn3) The "new rules" of three months ago now need modest revision.
After entering a consent decree with the EPA, Farmland Industries, Inc. and another potentially responsible party ("PRP") spent approximately $15,000,000 to clean up the Woodbury Chemical site. After the cleanup, Farmland pursued pending alternative cross claims under CERCLA § 107(a) (cost recovery) and § 113(f) (contribution) against another PRP, Colorado & Eastern Railroad Co. ("CERC"), and added CERC's former CEO and its holding company as additional cross-claim defendants (collectively, "CERC parties").
The district court entered judgment on the § 107(a) claim in favor of Farmland and against the CERC parties for approximately $760,000, which was Farmland's share of almost $1,500,000 of "additional cleanup costs"(fn4) allegedly caused by the CERC parties. The district court rejected the CERC parties' defense that a consent decree entered between CERC and the United States protected them from a contribution claim.
The Tenth Circuit reversed. It reached three principal legal conclusions: (1) settlement reduces the liability of nonsettlors pro tanto (that is, as applied by the Tenth Circuit, the pro tanto credit rule set forth in the Uniform Contribution Among Tortfeasors Act reduced the CERC parties' liability by both the amount of the settlement money that Farmland paid to the EPA and the $ 15 million that Farmland and another PRP paid to contractors to clean up the site); (2) a consent decree that refers to the same site and hazardous substances at issue in a private cost recovery action completely releases the settlor from liability in such action, unless there is express and clear language to the contrary (for example, the CERC consent decree referred to the same site...
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