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Pinal Creek Group v. Newmont Mining Corp.

ELR Citation: 26 ELR 21422
Nos. CIV-91-1764-PHX-ROS, 926 F. Supp. 1400/42 ERC 1755/(D. Ariz., 03/27/1996)

The court holds that potentially responsible parties (PRPs) may sue other PRPs for cost recovery under §107 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The court first holds that the statutory language supports allowing PRPs to sue under §107. The plain language of §107 draws no distinction between innocent and noninnocent plaintiffs. Also, although §113 provides a right of contribution for private parties, it does not provide that contribution is the exclusive remedy for PRPs. Allowing plaintiffs §107 standing will not frustrate contribution protection, and any potential for abuse emanating from a settlement between plaintiffs and the government is substantially mitigated by the fact that the court must approve any settlement. The court next holds that CERCLA policy supports allowing PRPs to sue under §107. Allowing PRPs who initiate an environmental cleanup to sue for cost recovery, thereby initially shifting the cost of cleanup to other PRPs who may then assert §113(f) counterclaims, satisfies both of CERCLA's goals. It provides an array of incentives for private parties to initiate prompt environmental cleanups and it ensures that cleanup costs will be equitably allocated among PRPs. These incentives work in tandem with disincentives targeted at PRPs who resist participating in cleanups or settlements. The court also holds that traditional legal principles support PRP standing under §107. Allowing PRPs to sue under §107 is consistent with the principle of indemnity, which allows a tortfeasor to recover from another the entire cost of a joint liability. Traditionally, whether indemnity or contribution applied in an action among joint tortfeasors turned on an assessment of the blameworthiness of the parties. Similarly, the distinction drawn in §107 between responding and nonresponding parties recognizes that responding parties are less blameworthy than other PRPs because they have begun to assist in a cleanup. The court next notes that a split of authority among the federal courts exists regarding the issue of PRP standing under §107, and finds that the most persuasive cases support PRP standing. The court thus denies defendants' motion to dismiss plaintiffs' §107 claims. The court next refuses to dismiss plaintiffs' claims for cost recovery under the Arizona Environmental Quality Act. A.R.S. §49-285(A) provides that "any other person" in addition to the state may bring an action to recover remediation costs, and nowhere suggests that the Arizona Legislature intended this cause of action to be limited to only "innocent" persons. Finally, the court refuses to dismiss claims that allegedly required piercing one plaintiff's corporate veil to impose liability on a prior shareholder. The plaintiff is not trying to pierce its own corporate veil; rather, the complaint contains sufficient allegations of ownership and control to support the direct imposition of owner or operator liability on the shareholder.

Counsel for Plaintiffs
Charles J. Muchmore
Muchmore & Wallwork
2700 N. Central Ave., Ste. 1225, Phoenix AZ 85004
(602) 240-6699

Counsel for Defendants
Gerald S. Maltz
Miller, Pitt & McAnally
111 S. Church Ave., Tucson AZ 85701
(520) 792-3836