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Allied Corp. v. Acme Solvents Reclaiming, Inc.

Citation: 19 ELR 21254
No. No. 86 C 20377, 691 F. Supp. 1100/29 ERC 1311/(N.D. Ill., 05/13/1988)

The court holds that Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) § 122(e)(6), added by the Superfund Amendments and Reauthorization Act (SARA) to require private parties to obtain prior Environmental Protection Agency (EPA) approval of remedial actions, does not apply retroactively to pre-SARA response costs, and the court adopts a moderate approach to the scope of CERCLA liability. The court holds that pre-SARA CERCLA did not require potentially responsible parties (PRPs) to obtain EPA approval of remedial actions undertaken prior to SARA's enactment as a prerequisite to cost recovery under § 107. Although the legislative history indicates that § 122(e)(6) was intended to clarify prior practice, there is nothing in pre-SARA CERCLA to indicate congressional intent to impose a prior approval requirement. The court holds that EPA's passive acquiescence to PRP remedial actions is not sufficient to satisfy the prior approval requirements of § 122(e)(6). This section clearly applies to any remedial action undertaken by plaintiffs after SARA's enactment. Thus, any unauthorized costs incurred by plaintiffs after SARA's enactment must be considered inconsistent with the national contingency plan and not recoverable under § 107. The court holds that the remedial actions undertaken after SARA's enactment that were required by a September 1986 consent order will be deemed authorized. The court holds that § 122(e)(6) does not apply retroactively. Nothing in SARA or its legislative history reveals a congressional intent to apply this provision retroactively. Retroactive application would result in manifest injustice. There is little benefit to the public interest from retroactive application of provisions such as § 112(e)(6) that are designed to act as disincentives to certain conduct. Further, plaintiffs reasonably relied on pre-SARA law that EPA authorization was not required.

The court holds that plaintiffs are not required to prove that EPA's selection of its preferred remedy was arbitrary and capricious, and that the court is not limited to administrative record review under CERCLA § 113(j). These standards apply only if plaintiffs' cost recovery claims constitute objections to the record of decision (ROD). The court holds that plaintiffs' cost recovery claims are ripe for review. Defendant's claim that the ROD is not final is irrelevant, since plaintiffs are not challenging the ROD. Further, EPA's authorization decision under § 122(e)(6) for post-SARA cleanup costs is final, since EPA has promised not to prosecute plaintiffs concerning the performance of the groundwater cleanup. The court next adopts a moderate approach to the scope of CERCLA liability, under which the court has the discretion to hold defendants jointly and severally liable if the court finds that the injury is indivisible. Under this approach, the court has the option of rejecting joint and several liability, regardless of the indivisibility of the harm, where the facts of the case point to a more equitable opportionment. The court declines to impose a blanket prohibition against the imposition of joint and several liability in claims between PRPs. Claims between PRPs are not always contribution claims and thus are not limited to several liability. The court holds that plaintiffs have stated a claim for contribution under § 113(f)(1). The court holds that PRPs are not barred by the doctrine of unclean hands from recovering response costs.

Counsel for Defendants
Leonard A. Nelson
Schoenberg, Fisher & Newman
222 S. Riverside, Ste. 2700, Chicago IL 60606
(312) 648-2300

Michael D. Freeborn
Freeborn & Peters
11 S. LaSalle St., Ste. 1500, Chicago IL 60603
(312) 750-9500

Counsel for Plaintiffs
Donald B. Hillaker
Phelan, Pope & John
180 N. Wacker Dr., Chicago IL 60606
(312) 621-0700

John R. Adams
Taylor, Miller, Sprowl, Hoffnagle & Merletti
33 N. LaSalle St., Ste. 1900, Chicago IL 60602
(312) 782-6070