CERCLA Cost Recovery and Contribution and a Primer on Natural Resource Damages Law: Regulation, Litigation, and Basic Economic Principles

AuthorIra Gottlieb, Nathan Howe, Rick Dunford, and Cynthia Betz
CERCLA Cost Recovery and
Contribution and a Primer on
Natural Resource Damages Law:
Regulation, Litigation, and Basic
Economic Principles
Ira Gottlieb, Nathan Howe, Rick Dunford, and Cynthia Betz
Comprehensive Environmental Response, Compensation, and Liability Act (CER-
CLA): The main goal of this part of the chapter is to provide a discussion of statu-
tory and case law core concepts that arise most frequently and pervade practice.
In doing so we give the reader a narrative explanation of how these concepts are
practically woven together in practice areas that we often confront in daily prac-
tice, focusing on recovery actions between private parties, but without trying to
be too wide-ranging or delve into the many topics and nuances that can arise (e.g.,
National Priority List listing, definitions, National Contingency Plan consistency,
defenses). We also address some key policy (guidance) changes that have occurred
in the last several years, particularly with the rise of urban sediment sites.
Natural Resource Damages (NRD): In this part of the chapter we address key
concepts related to natural resource damage claims. After providing basic back-
ground, an explanation of key concepts concerning statutes/common law claims,
and the assessment process (including damage determination and valuation), we
briefly address allocation, the restoration process itself, and some of the innova-
tions and issues that have arisen post-Deepwater Horizon. We also briefly address
climate change and some of the suits and citizen efforts that have arisen in the last
ten years.
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190 Environmental Litigation
The engine powering CERCLA’s liability scheme is the central policy premise that
those who are responsible for contamination will be held strictly accountable for
the costs of remediation.1 Courts have invoked this purpose as the basis for many
decisions interpreting CERCLA’s liability provisions throughout its history. For
instance, CERCLA is construed to impose strict liability on potentially responsible
parties (PRPs), and as a result, there is no knowledge requirement, or even the
need to prove that a PRP was negligent in its handling or discharge of hazardous
substances.2 Moreover, CERCLA exposes PRPs to joint and several liability at the
receiving end of cost recovery actions, placing the burden on PRPs to recoup costs
from other PRPs when they have paid more than an equitable share.3 Additionally,
liability under CERCLA is generally retroactive, and therefore PRPs are subject to
liability for contamination that occurred before its enactment in 1980.4
Regardless of the positive remedial policy goals underlying CERCLA, the prac-
tical realities and complex nature of environmental contamination can lead to
severely inequitable outcomes among those grappling with liability and damages
issues. This is particularly true when parsing the responsibility of PRPs for multi-
party sites. The difficulty of this task, and the resultant potential for disagreements
and inequity, is aggravated by the sometimes substantial and even enormous costs
that need to be borne upfront, and for many years, before questions of apportion-
ment and allocation of responsibility for those costs are addressed and resolved.
This situation can be even more complicated when one or more PRPs will be insol-
vent, or are otherwise unavailable, thus resulting in further inequitable results.
Complicating matters further, the design and language of CERCLA does not afford
great clarity into issues that inevitably arise in such complex situations, and leave
in its wake a convoluted series of court interpretations that are occasionally incon-
sistent, at least among some federal circuits.
Although many questions arise regarding the administration of the Superfund
program of the Environmental Protection Agency (EPA), and the implementation
of removal and remedial activities, because of the high costs of environmental
1. See the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, Pub.
L. No. 96-510, 94 Stat. 2767 (1980) (CERCLA, also commonly known as Superfund) and the Superfund
Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499, 100 Stat. 1613 (1986) (SARA).
2. See, e.g., Pakootas v. Teck Cominco Metals, Ltd., 452 F.3d 1066, 1078 n.18 (9th Cir. 2006); In re Bell
Petrol. Servs., 3 F.3d 889, 897 (5th Cir. 1993); United States v. Aceto Agric. Chems. Corp., 872 F.2d 1373,
1377 (8th Cir. 1989).
3. Like strict liability, CERCLA is also not explicit in this regard, but courts have construed Section
107(a) to include joint and several liability under common law tort principles, except in limited cir-
cumstances when the harm is divisible. Burlington N. & Santa Fe Ry. Co. v. United States, 556 U.S. 599,
613–14 (2009) (discussing and reaffirming the approach to joint and several liability initially recognized
in United States v. Chem-Dyne Corp., 572 F. Supp. 802, 810–11 (S.D. Ohio 1983)).
4. See Gould, Inc. v. A & M Battery & Tire Serv., 933 F. Supp. 431, 438 (M.D. Pa. 1996) (noting federal
district courts have uniformly determined CERCLA to have retroactive effect, with but a single excep-
tion). This comports with one of the primary reasons CERCLA was created, which was to remediate
abandoned hazardous waste sites and historic contamination.
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CERCLA Cost Recovery and Contribution 191
remediation, the one issue that spawns intense litigation is cost recovery and con-
tribution. CERCLA provides distinct rights and remedies depending on whether a
plaintiff is a government agency, or a private party. CERCLA presently provides two
avenues of recoveries for response costs. The first is referred to as cost recovery,
provided under Section 107(a), and is available to government, private parties, and
most recently PRPs. The second avenue, provided under Section 113(f), empowers
PRPs to seek contribution from other PRPs for their proportionate share of costs.
The interplay between 107(a) and 113(f) in circumstances where PRPs seek to
recoup costs from other PRPs has been the source of much confusion over recent
years. While these two avenues are described as “complementary yet distinct”
remedies,5 the relationship between them remains murky, and determining where
the boundary of one ends and the other begins is no simple task. This confusion is
largely the product of the U.S. Supreme Court’s closely related decisions in Aviall
and Atlantic Research, which severely disrupted established norms in this area.
These decisions and their impact are discussed later in this chapter.
Even more recently, the change of administrations at the White House in 2017
brought renewed attention to the Superfund program, though it is unclear to what
extent these changes may alter the liability scheme applicable to private parties.
In May 2017, the newly minted and now former EPA Administrator, E. Scott Pruitt,
announced his commitment as head of the agency to restore Superfund and related
cleanup efforts “to their rightful place at the center of the agency’s core mission.”6
Then-Administrator Pruitt commissioned a Superfund Task Force “to provide rec-
ommendations on an expedited time frame on how the agency [could] restructure
the cleanup process,” among other things.7
Two months later, in July of 2017, that Superfund Task Force released its
report, which included “42 specific and detailed recommendations to streamline
and improve the Superfund program,”8 which were noted to be possible “with-
out legislative change.”9 Among the proposals included “high attention” to long-
standing NPL sites; third-party investment in NPL cleanups; acceleration of
5. See Cooper Indus. v. Aviall Servs., Inc., 543 U.S. 157 (2004); United States v. Atl. Research Corp.,
551 U.S. 128, 138 (2007).
6. See Memorandum from E. Scott Pruitt, EPA Adm’r, Prioritizing the Superfund Program (May
22, 2017), https://www.epa.gov/sites/production/files/2017-05/documents/prioritizing_the_superfund
7. Id.
8. See News Release, U.S. Envtl. Protection Agency, EPA Announces Superfund Task Force Recom-
mendations (July 25, 2017), https://www.epa.gov/newsreleases/epa-announces-superfund-task-force-
recommendations (last visited Feb. 14, 2019).
9. See U.S. Envtl. Protection Agency, EPA Superfund Task Force Recommendations (July 25, 2017),
https://www.epa.gov/sites/production/files/2017-07/documents/superfund_task_force_report.pdf. How-
ever, former administrator Pruitt’s response to the recommendations did note that “[s]ome of the task
force’s recommendations will require future administrative actions, such as rulemakings or the issu-
ance of guidance, by the agency for them to come to fruition.” See Memorandum from E. Scott Pruitt,
EPA Adm’r, Receipt of Superfund Task Force Report and Next Steps for Revitalizing the Superfund
Program (July 25, 2017), https://www.epa.gov/sites/production/files/2017-07/documents/receipt_of
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