June 11, 2007
On June 11, 2007, the Supreme Court issued a unanimous opinion in United States v. Atlantic Research Corporation, No. 06-562, holding that the plain language of Section 107(a)(4)(B) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9607(a), authorizes a potentially responsible party (PRP) to recover response costs from other PRPs. In so doing, the Court resolved a question that it had expressly left open three years earlier in Cooper Industries, Inc. v. Aviall Services, Inc., 543 U.S. 157 (2004).
The United States had sought reversal of an Eighth Circuit decision that permitted Atlantic Research, a PRP, to seek recovery of response costs from the United States, which Atlantic Research alleged was also a PRP at the contaminated facility. The Supreme Court determined that the plain language of Section 107(a) clearly granted a right of recovery to Atlantic Research because the phrase "any other person" in subparagraph (B) referred to "the immediately preceding subparagraph (A), which permits suit only by the United States Government or a State or an Indian tribe. The phrase ‘any other person’ therefore means any person other than those three," including a PRP. The United States had argued that the phrase "any other person" referred back to the more remote list of PRPs found in Section 107(a)(1)-(4) and therefore excluded PRPs from the scope of the cost recovery cause of action available under Section 107(a)(4)(B). The Court rejected that interpretation because the structure of the statute clearly linked subparagraphs (A) and (B) and nothing in the statutory text suggested "an intent to refer to antecedents located in two different statutory provisions."
The Court also dismissed the United States’ suggestion that permitting PRPs to recover response costs would "create friction" between Section 107(a) and Section 113(f)(1), which governs contribution actions. The Court explained that Section 107(a) and Section 113(f)(1) complement each other because they address persons in different procedural circumstances. Accordingly, a PRP who has incurred response costs can recover those costs under Section 107(a), while a PRP who has been sued or entered into a settlement to pay costs incurred by another can file a contribution action under Section 113(f)(1). The Court’s decision will encourage voluntary cleanup actions by PRPs and will permit those CERCLA actions already filed by voluntary PRPs–many of which have been delayed since the Cooper Industries decision–to move forward.
The Supreme Court’s decision in United States v. Atlantic Research Corp. is available at http://www.supremecourtus.gov/opinions/06pdf/06-562.pdf.
Gibson Dunn participated in both the Atlantic Research and Cooper Industries cases. In amicus briefs prepared by Washington, D.C. office partners Miguel Estrada and Raymond Ludwiszewski on behalf of Lockheed Martin Corporation, Gibson Dunn urged the Court to conclude, as it did in Atlantic Research, that CERCLA provides a cause of action for PRPs.
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@example.com) in Washington, D.C., Robert W. Loewen (949-451-3894, firstname.lastname@example.org) in Orange County, or Patrick W. Dennis, Practice Group Chair (213-229-7567, email@example.com) 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, firstname.lastname@example.org) or
Theodore B. Olson (202-955-8500, email@example.com) in Washington, D.C.,
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Daniel M. Kolkey (415-393-8200, email@example.com) 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.