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B.F. Goodrich Co. v. Murtha

ELR Citation: 24 ELR 21599
Nos. No. N-87-52 (PCD), 855 F. Supp. 545/(D. Conn., 02/08/1994) Summary judgment on contribution protection granted

The court holds that settlement agreement proceeds that the U.S. Environmental Protection Agency (EPA) did not receive itself, but earmarked for use by a group of potentially responsible parties (PRPs) at a contaminated site, must be credited toward the reduction of nonsettling defendants' liability under §107 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Under the agreement, the owners and operators of two contaminated sites in Connecticut paid $5,375,000 in EPA and state response costs incurred at the sites. EPA earmarked some of those funds for a PRP group at one of the sites to use, provided a consent decree were negotiated within the next 18 months requiring a PRP group to remedy the site. EPA then sued nonsettling defendants at the site for response costs allegedly not covered by the settlement. The court first holds that the settlement exceeds the total amount of EPA's and the state's costs at the site. By allocating almost $2 million for use by PRPs, however, EPA could be left with unreimbursed costs. The court holds that CERCLA §113(f) reduces EPA's right to reimbursement from nonsettling PRPs by the amount of the settlement. What EPA does with the proceeds does not diminish nonsettlors' right to full credit for the settlement. The court holds that EPA may not refuse to receive settlement funds directly, and, by channeling them to another use, remove the funds from the settlement and from being credited in favor of PRPs later targeted. Although settlement is favored, EPA may not structure settlements to deprive a party of statutorily pronounced credits.

[Related decisions in this litigation are published at 19 ELR 20357, 21 ELR 20777, 22 ELR 20683, 23 ELR 21080, and 24 ELR 20515. Briefs are digested at ELR PEND. LIT. 66147, 66157, and 66161.]

Counsel for Plaintiffs
Louis R. Pepe, David E. Rosengren
Pepe & Hazard
Goodwin Sq., Hartford CT 06103
(203) 522-5175

Counsel for Defendants
Laura B. Frankel, Mark J. Zimmerman
Updike, Kelly & Spellacy
One State St., P.O. Box 231277, Hartford CT 06123
(203) 548-2600