New York v. Solvent Chem. Co.
Citation: 28 ELR 20570
The court holds that future Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) contribution actions by settling private defendants against private nonsettlors at a New York Superfund site will be governed by the Uniform Comparative Fault Act (UCFA) and CERCLA § 113(f)(1), instead of by CERCLA § 113(f)(2) and the Uniform Contribution Among Tortfeasors Act (UCATA). A state environmental protection agency proposed consent decrees between the state and several responsible parties for response costs at the site. Nonsettling third-party defendants objected to the proposed decrees as unfair because the settlement would leave them with a share of the response costs that exceeds their share of liability. In order to determine the consent decree's fairness, the settlors argue that CERCLA § 113(f)(2) and UCATA § 4, which reduces the liability of the nonsettlors by the amount specified in the settlement agreement, should apply. The nonsettlors argue for the application of CERCLA § 113(f)(1) and the UCFA § 6, which reduces a nonsettlor's liability by the amount of the settlor's equitable share. The court first notes that because it is not convinced that the six consent decrees, and the process by which they were reached, are completely fair to the nonsettling third-party defendants, it will determine which contribution model shall be applied hereinafter. The court then holds that CERCLA § 113(f)(2), which provides that when a party settles with the government, the nonsettling party's liability is reduced only by the amount of the settlement, does not apply. Case law cited by the defendant chemical company to support application of CERCLA § 113(f)(2) does not apply to the present case as the facts are not similar. The chemical company's argument also ignores important decisions in which other courts have applied CERCLA § 113(f)(1) and the provisions of the UCFA to settlement arrangements between private parties after the government has settled and is no longer a party. The court next holds that CERCLA § 113(f)(1) and the UCFA apply. Under CERCLA § 113(f)(1), which applies to allocation of costs among private parties, the court must consider equitable factors. The chemical company should bear the risk that it settled for too little with its codefendants in entering into one of the multiple consent decrees. The UCFA will best facilitate the most equitable resolution of this litigation and produce the most efficient result. If the UCATA is applied, then the court would have to hold a hearing on the fairness of the negotiations now in order to approve the settlement. Such a hearing is not required under the UCFA approach, as the nonsettlors will not be liable for any more than their equitable share. Because any future contribution actions brought by the chemical company will be governed by the UCFA, the court finds that the proposed consent decrees are fair and equitable, and are not unreasonable or contrary to public policy.
Counsel for Plaintiff
Dennis C. Vacco, Attorney General
Attorney General's Office
State Capitol, Albany NY 12224
Robert E. Hernan, Ass't Attorney General
Attorney General's Office
120 Broadway, 25th Fl., New York NY 10271
Counsel for Defendants
Dennis P. Harkawik
Jaeckle, Fleischmann & Mugel
Fleet Bank Bldg.
12 Fountain Plaza, Buffalo NY 14202