California District Court Answers CERCLA Question Left Open By U.S. Supreme Court
The federal court of the Eastern District of California has published its decision in Kotrous v. Goss-Jewett Co. of Northern California, Inc. (2005 WL 1417152, E.D. Cal. Jun. 16, 2005), concerning whether a potentially responsible party in CERCLA hazardous waste cases may bring a contribution claim.
This has been a closely watched issue in the aftermath of the U.S. Supreme Court's December 2004 ruling in the case Cooper Industries, Inc. v. Aviall Services, Inc., __ U.S. __, 125 S.Ct. 577, 160 L.Ed. 2d 548 (2004), that no express right of contribution exists under CERCLA in the absence of (1) a pending civil suit action under section 106 or 107 of the federal statute, or (2) a judicially or administratively approved settlement with the state or federal government.
The Supreme Court stated in Cooper Industries that it was not deciding the question of whether an implied right to contribution exists under section 107. This issue is important because there are, according to General Accounting Office estimates, upwards of half a million hazardous wastes contaminated sites in the U.S. and the majority of those are remediated by private parties. For a private party involved in a cleanup case that incurs response costs, it is vital to know if and when a cost recovery contribution claim can be made under CERLA.
The Kotrous case concerned a Sacramento site leased by Goss-Jewett Company, a dry cleaning chemical supply business. A PCE supplier to Goss-Jewett accidentally released PCE to soil and groundwater at the site during delivery. The PCE contamination was discovered years later by Kotrous, at that time the owner of the site. The California Regional Water Quality Control Board requested Goss-Jewett to conduct groundwater monitoring and a site assessment, and issued a Cleanup and Abatement Order against Goss-Jewett when they failed to heed the Regional Board's request. A subsequent Cleanup and Abatement Order included Kotrous and other present and past owners of the property. Kotrous then filed a claim for contribution against the other parties under CERCLA. The other parties countered that Kotrous' CERCLA claim should be dismissed, because as a potentially responsible party it was not entitled to assert a contribution claim under either of the two CERCLA sections which authorize private actions for damages, section 107(a) and 113(f), in keeping with the Supreme Court's recent decision in Cooper Industries.
The Eastern District of California, however, disagreed, finding that 9th Circuit precedent has previously recognized an implied right of contribution under section 107 of CERCLA, and that this implied right was not eviscerated by the more stringent standing requirements of the later-enacted section 113. Thus, as a potentially responsible party Kotrous was permitted to state a contribution claim.
This is the second Eastern District decision since Cooper Industries to find an implicit right to contribution under section 107 of CERLCA. In May 2005, the court in Adobe Lumber, Inc. v. Taecker, 2005 WL 1367065, reached the same conclusion. While the implied right to contribution seems secure in California, at least for now, Congress could, of course, amend CERCLA to explicitly deny any implied right. The U.S. Supreme Court could also take up the issue anew in a future case.
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