U.S. Supremes Decide on Liability

The U.S. Supreme Court has changed course on liability for the cleanup of contaminated properties under the Superfund law. In a unanimous decision, the court ruled that a private party undertaking voluntary environmental cleanup can sue another "potentially responsible party" to recover cleanup costs.

Among those who applauded the decision were the California State Association of Counties and a number of water agencies. They contended that preventing cost-recovery suits would discourage voluntary remediation of contaminated sites.

Three years ago, the Supreme Court ruled in Cooper Industries v. Aviall Services, 543 U.S. 157 (2004), that the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, or the Superfund law) prohibits cost-recovery suits in voluntary cleanups. However, in the case at hand, the Eighth U.S. Circuit Court of Appeals ruled that Atlantic Research Corporation could use a different section of CERCLA to sue a potentially responsible party. Atlantic Research wants to sue the federal government because the contamination of a site in Arkansas resulted from the company's work on rocket engines for the federal government. The Eighth Circuit said the suit could go forward, and, over the Bush administration's objections, the U.S. Supreme Court agreed.

The federal government and some analysts argue that the decision will discourage potentially responsible parties from paying a sum to a state or federal government to settle liability. The settlements were intended to immunize a party from additional liability. But in an opinion by Justice Clarence Thomas, the Supreme Court ruled that such settlements do not protect against suits filed by other parties because the settlements would preclude any responsible party from recovering cleanup costs.

The case is United States. v. Atlantic Research Corp., No. 06-562, 2007 DJDAR 8503 and was decided on June 11, 2007.