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Akzo Nobel Coatings, Inc. v. Aigner Corp.

Citation: 30 ELR 20180
No. No. 98-4174, 197 F.3d 302/49 ERC 1609/(7th Cir., 11/24/1999) Allocation of contribution costs

The court vacates a district court's allocation of contribution costs a coating company must pay for cleanup costs incurred by another potentially responsible party (PRP) at the Fisher-Calo site in Indiana. Although the coating company sent 9 percent and the PRP sent approximately 71 percent of the total volume of solvents processed at the site, the district court ordered the coating company to reimburse the PRP 12.56 percent of the total costs the PRP will incur in performing cleanup work. The district court ignored other shipments and shippers that were not parties to this suit in reaching this figure.

The court first affirms the district court's decision to the extent that it holds the coating company liable for contribution toward the cleanup costs of the Fisher-Calo site as a whole. The district court properly concluded that the site must be deemed a single site, making a search for distinct harms within that site unnecessary. In addition, even if none of the coating company's wastes can be traced to one of the many parcels within the site, it does not follow that the district court was obliged to carve that parcel out when calculating cleanup costs and responsibility. Further, the district court did not err in failing to apportion costs according to a toxicity index. The district court's decision to give every gallon of waste the same weight was within its discretion, even on the assumption that the PRP's wastes were more toxic per gallon than the coating company's.

The court, however, then vacates the district court's allocation of the coating company's contribution liability. The district court relied on the Uniform Comparative Fault Act (UCFA) and concluded that the responsibility of nonparties must be disregarded, even if they are financially able to pay their share of the cleanup. This does not yield an equitable allocation of expenses. Moreover, adopting the UCFA as a federal rule would undermine the approach preferred under § 113(f)(2) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), which provides that settlements should reduce the potential liability of others not party to the settlement by the amount of the settlement. Extending the pro tanto approach of CERCLA § 113(f)(2) to claims under § 113(f)(1) enables courts to avoid what could be a complex and unproductive inquiry into the responsibility of missing parties. On remand, therefore, the district court should determine how much the PRP has collected from third parties in settlement, then require the coating company to pay 12.56 percent of the costs net of those recoveries, rather than of the PRP's total outlay.

[Prior decisions in this litigation are published at 24 ELR 21254, 25 ELR 21339, and 26 ELR 20797 and 20837.]

Counsel for Plaintiffs
Timothy W. Woods
Jones, Obenchain, Ford, Pankow & Lewis
1800 Valley American Bank Bldg., South Bend IN 46634
(219) 233-1194

Counsel for Defendants
Pierre C. Talbert Jr.
Foley & Lardner
One IBM Plaza
330 N. Wabash Ave., Ste. 3300, Chicago IL 60611
(312) 444-9500

Before Cudahy and Kanne, JJ.