Allocation of Superfund Cleanup Costs Among Potentially Responsible Parties: The Role of Binding Arbitration
Editors' Summary: The high cost of resolving environmental disputes through litigation has made alternative dispute resolution (ADR) an increasingly attractive alternative. The high transaction costs of Superfund litigation would seemingly provide a strong incentive for the parties to use ADR. While non-binding mediation and negotiation techniques have been attempted in most Superfund cases, potentially responsible parties (PRPs) often reach an impasse on the issue of the proper allocation of cleanup costs. These cost allocation disputes will in turn often affect ongoing negotiations with EPA over the appropriate remedy at the site. To prevent this "spillover" effect, the author proposes that PRPs bifurcate the allocation and remedy selection issues by submitting the cost allocation dispute to binding arbitration. While CERCLA does not explicitly provide for bifurcation, the combined use of EPA's mixed funding authority and binding arbitration of cost allocation disputes could create a hybrid bifurcated proceeding and remove many of the obstacles to the voluntary cleanup of hazardous waste sites.