April 24, 2007
On Monday, April 23, 2007, the Supreme Court held oral argument in United States v. Atlantic Research Corporation, Case No. 06-562. The Court granted certiorari in Atlantic Research to answer a question that it expressly left open in Cooper Industries, Inc. v. Aviall Services, Inc., 543 U.S. 157 (2004) — namely whether a party that is a “covered person” under Section 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9607(a), but that does not satisfy the requirements for bringing an action for contribution under Section 113(f) of CERCLA, 42 U.S.C. § 9613(f), may bring an action against another covered person for cost recovery under Section 107(a).
The United States is seeking reversal of the Eighth Circuit’s decision that permitted a potentially responsible party (PRP), Atlantic Research, to seek recovery of response costs from the United States, which Atlantic Research alleges is also a PRP at the contaminated facility. The Eighth Circuit held that the plain language of Section 107(a) clearly granted a right of recovery to covered persons because the “statutory phrase ‘any other person’ means any person other than the statutorily enumerated ‘United States Government or a State or an Indian tribe.’” Emphasizing the important role of voluntary cleanups in CERCLA’s remedial framework, the court further explained that it “could discern nothing in CERCLA’s words, suggesting Congress intended to establish a comprehensive contribution and cost recovery scheme encouraging private cleanup of contaminated sites, while simultaneously excepting–indeed, penalizing–those who voluntarily assume such duties.”
During oral argument, Deputy Solicitor General Thomas G. Hungar maintained, on behalf of the United States, that Congress intended that all actions by PRPs be brought under Section 113(f)(1) because it is the only “precisely drawn detailed mechanism for PRPs to recover costs from other PRPs.” Deputy Solicitor General Hungar further argued that the word “other” in Section 107(a)(4)(B) refers to the four classes of PRPs listed above in Section 107(a)(1)-(4), and thus excludes PRPs from its coverage. The United States alleged repeatedly that CERCLA’s remedial regime would be significantly disrupted if the Court permitted PRPs to recover under Section 107(a)(4)(B) because the availability of such suits would purportedly undermine the settlement protections found in Section 113(f)(2).
Several Justices expressed reservations about the United States’ primary arguments. Chief Justice Roberts stated that the Eighth Circuit’s interpretation of the statute appeared to be the most natural reading, and Justice Souter likewise found the United States’ textual argument “odd.” During the argument by Atlantic Research’s counsel, Justice Scalia also expressed his misgivings about the United States’ interpretation of Section 107(a)(4)(B). Chief Justice Roberts and Justice Souter pressed the United States to provide examples of non-PRPs who would qualify to sue under its reading of Section 107(a)(4)(B), highlighting some concern about the procedural difficulties that might result if courts were forced to make a complex factual ruling on whether a party was a PRP in order to determine its threshold ability to bring a claim. Justices Souter and Ginsburg also expressed concern that the United States’ interpretation, if adopted, would allow the United States to avoid liability at the many sites where it constitutes a PRP.
Several other Justices expressed concern, however, that affirming the Eighth Circuit’s reading of Section 107(a) would disrupt the settlement protection found in Section 113(f)(2). Justice Breyer in particular sought an explanation of how Sections 107 and 113 could work together to protect settling parties. Counsel for Respondent Atlantic Research provided his view of how the statutes interact, and explained that there was no risk in permitting unsupervised cleanups because of the restrictions imposed by the National Contingency Plan. Jay Geck, Deputy Solicitor General for the State of Washington, who argued on behalf of the 38 States that joined Atlantic Research as amici curiae, explained that the States support voluntary cleanups by PRPs because they do not possess the resources to oversee cleanups at the more than 400,000 contaminated sites nationwide.
The full transcript of the Supreme Court’s United States v. Atlantic Research Corp. oral argument is available at http://www.supremecourtus.gov/oral_arguments/
argument_transcripts/06-562.pdf.
Gibson Dunn participated in both the Atlantic Research and Cooper Industries cases by filing amicus briefs authored by Washington, D.C. office partners Miguel Estrada and Raymond Ludwiszewski on behalf of Lockheed Martin Corporation. If the Court reverses the Eighth Circuit’s decision, it will have a profound impact on the conduct of superfund cleanups nationwide and on the ability of PRPs to recoup past cleanup costs. A decision is expected from the Court by the end of June, and Gibson Dunn will transmit an analysis of the opinion as soon as it is issued.
Gibson, Dunn & Crutcher’s Appellate and Constitutional Law Practice Group has played a leading role in a number of recent significant cases in the Supreme Court, and also handles appellate matters in federal and state courts throughout the country. The firm’s Environment and Natural Resources Practice Group has particular expertise in CERCLA matters, especially in bringing cost recovery and contribution actions against the United States. We also handle a range of other environmental litigation and counseling matters nationwide.
To learn more about the firm’s environmental litigation, please contact the Gibson Dunn attorney with whom you work or Raymond B. Ludwiszewski (202-955-8665, [email protected]) in Washington, D.C., Robert W. Loewen (949-451-3894, [email protected]) in Orange County, or Patrick W. Dennis, Practice Group Chair (213-229-7567, [email protected]) in Los Angeles.
For more information on the firm’s appellate practice, please contact the Gibson Dunn attorney with whom you work or any member of the firm’s Appellate and Constitutional Law Practice Group, or practice group Co-Chairs
Miguel A. Estrada (202-955-8500, [email protected]) or
Theodore B. Olson (202-955-8500, [email protected]) in Washington, D.C.,
Theodore J. Boutrous, Jr. (213-229-7000, [email protected]) in Los Angeles, or
Daniel M. Kolkey (415-393-8200, [email protected]) in San Francisco.
© 2007 Gibson, Dunn & Crutcher LLP
The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.