§15.10 - Consent Decrees

• Jurisdiction: Washington

§15.10 CONSENT DECREES

Many NRD claims are never fully litigated; rather, defendants settle the claims pursuant to consent decrees with the government. A consent decree, which is simply an agreement sanctioned by the court, entered between the EPA and a PRP for site remediation, may include a covenant not to sue for NRD if the federal natural resource trustees agree to such a covenant in writing. CERCLA §122(j)(2); 42 U.S.C. §9622(j)(2). Without the federal trustees signing off, a court will not approve a covenant not to sue for NRD.

Trustees may only sign off on a covenant not to sue for NRD if the PRP agrees to undertake appropriate action necessary to protect and restore the resource. This provision was interpreted in In re Acushnet River & New Bedford Harbor (Acushnet IV), 712 F. Supp. 1019 (D. Mass. 1989). The Acushnet IV court held that CERCLA does not limit the use of a covenant not to sue as part of a settlement to those instances in which PRPs agree to pay to fully restore the natural resource, but CERCLA does require the United States to assess the strengths and weaknesses of its case and drive the hardest bargain it can. Id. at 1036. The holding affirms the tenets of the common-law bases for NRD claimsthat the government protect and preserve natural resources for the public good.

In accord with that tenet, in Acushnet IV, the court struck down the settlement because it lacked a reopener clause that would allow the United States to sue the defendant for presently unknown damages. The court held that, without such a reopener, the consent decree violated the requirements of CERCLA and was not in the public interest. Id. at 1037-38.

Yet while courts are hesitant to allow trustees to compromise their duties to the public by waiving their right to NRD as part of a consent decree, federal courts are split as to whether trustees have standing to intervene and appeal entry of a consent decree. In United States v. AVX Corp., 962 F.2d 108 (1st Cir. 1992), the U.S. Court of Appeals for the First Circuit denied the National Wildlife Federation (NWF) standing to appeal the consent decree concerning cleanup of New Bedford Harbor (see Acushnet line of cases, discussed above). The NWF had intervened in the underlying action to brief certain issues, including the appropriate measure of NRD under CERCLA. Neither the government plaintiffs nor the defendants appealed entry of the consent decree; the NWF alone did. The First Circuit held that for the NWF to bring an independent appeal, it had to independently pass the test of Article III standing. The court denied the NWF associational standing because the NWF had failed to show that its members had some concrete nexus with the harbor area.

However, in a more recent decision, the U.S. Court of Appeals for the Tenth Circuit held that nonsettling PRPs may intervene in consent decree proceedings. United States v. Albert Inv. Co., 585 F.3d 1386 (10th Cir. 2009). In Albert, the court allowed a nonsettling PRP to intervene to oppose the consent decree on the basis that entry of the consent decree would allow the settling PRP the ability to seek contribution under CERCLA. As a result, the Tenth Circuit stated that nonsettling PRPs may intervene by right in such proceedings. In Albert, the Department of Justice filed a friendly suita lawsuit brought solely for the purpose of settlementagainst the settling PRPs, and then filed a consent decree for the courts review. Union Pacific Railroad, a nonsettling PRP, filed comments related to the consent decree and stated it was unfairly excluded from the settlement negotiation process. It objected to the consent decree for a variety of reasons, but mainly because such a settlement would bar Union Pacific Railroad from bringing contribution claims against the settling PRPs. No responses were provided to Union Pacific Railroads comments, and therefore, it sought to intervene in the lawsuit. The district court denied the motion and Union Pacific Railroad appealed. The primary issue on appeal was whether Union Pacific Railroad had an interest in the settlement proceedings sufficient to intervene under Fed. R. Civ. P. 24(a)(2) and CERCLA §113(i), 42 U.S.C. §9613(i).

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