Unpaid Volunteers?: Supreme Court Cuts Off CERCLA Contribution Actions By Parties That Have Not Faced Government Suits

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In-Sites

January 27, 2005

In an eagerly awaited decision released on December 13, 2004, the United States Supreme Court held in Cooper Industries, Inc. v. Aviall Services, Inc., 125 S. Ct. 577 (2004), that a private party that incurs cleanup costs but has not been sued in an administrative or cost recovery action under section 106 or 107(a) of the federal Comprehensive Environmental Response, Liability, and Compensation Act (“CERCLA”), 42 U.S.C. Sections 9606, 9607(a), cannot obtain contribution from other liable parties under section 113(f)(1), 42 U.S.C. Section 9613(f)(1). Relying on the text of section 113(f)(1), which provides that “[a]ny person may seek contribution … during or following a civil action during or following a civil action under section 9606 … or under section 9607(a)” (emphasis added), the Court held that section 113(f)(1) simply did not authorize a contribution action in the absence of a civil action against the contribution plaintiff. Moreover, section 113(f)(1)’s “savings clause,” which provides that [n]othing in this subsection shall diminish the right of any person to bring an action for contribution in the absence of a civil action” under section 106 or section 107, does not create a separate right of contribution, but merely preserves whatever contribution rights might exist independently of section 113(f)(1).Thus, the Court concluded, Aviall, which cleaned up four Texas properties that both it and Cooper had contaminated after notifying the State of the contamination but without being sued under section 106 or section 107(a) by either the State or the federal government, could not seek contribution from Cooper under section 113(f)(1).

The Court pointed out that a separate portion of section 113 authorizes contribution actions by parties that have settled with a State or the federal government. But the Court’s deliberately narrow decision left unanswered many questions about the ability of parties like Aviall to recover a portion of their cleanup costs from other liable parties. Is there an “implied” right of contribution under section 107(a), as many courts had concluded before Congress added section 113 to the statute in 1986? Can a liable party bring a so-called “direct” cost recovery action against other liable parties under section 107(a)? Do contribution rights based on state law survive CERCLA, or are they preempted by the statute? Lower courts will continue to wrestle with these issues in the aftermath of Cooper Industries v. Aviall Services.

The issues addressed, and raised but not addressed, by the Court’s decision have obvious and important implications for developers and redevelopers. Look for a more complete discussion of Cooper Industries v. Aviall Services in an upcoming edition of In-Sites.