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United States v. Kramer

ELR Citation: 27 ELR 20878
Nos. 89-4340 (JBS), -4380 (JBS), 953 F. Supp. 592/(D.N.J., 01/29/1997) determination on allocating orphan shares

The court holds that it may allocate part of the orphan share responsibility for cleanup costs at a contaminated site to third-party defendants in a Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) cost recovery action. The court first holds that the direct defendants' motion to consider this issue is ripe. The motion seeks resolution of an almost purely legal issue. The court has the authority to rule pretrial on an issue of law that will shape subsequent proceedings in this case, and this issue is in dispute. In addition, the court is unable to discern what facts might subsequently be developed that would facilitate the disposition of the motion. And decision of the motion will aid the parties in determining what further discovery is needed pertaining to equitable allocation, as well as the likelihood that evidence pertaining to the orphan share will be admissible at trial.

The court refuses to rule out the possibility that due to equitable apportionment of an orphan share, the liability of the third-party defendants in this case may be more than it otherwise would have been if all liable parties were identifiable, financially solvent, and had the same ability to satisfy an adverse judgment. In adjudicating equitable apportionment of liability under CERCLA §113(f)(1), a federal court enjoys broad discretion to consider and apply such equitable factors as it deems appropriate to achieve a just and fair allocation among liable parties. The fact that §113(f) permits the court to allocate response costs "among liable parties" logically means among all liable parties, whether defendants or third-party defendants, without limitation to some subset of liable parties. Nothing in the statute's legislative history indicates that such a result would be inappropriate. Furthermore, holding that third-party defendants in a CERCLA case may never be held responsible for an orphan share would not comport with notions of fairness and common sense. The United States, which argued in favor of the direct defendants' motion, noted that forcing direct defendants to bear responsibility for the entire orphan share would likely result in primary federal cost recovery actions with far more parties. Consequently, the United States would be able to bring fewer CERCLA actions at any one time, and could potentially encounter problems with the statute of limitations in certain instances. Finally, the court rejects the argument that the direct defendants are seeking to convert consideration of orphan share as an equitable factor under §113 into the equivalent of joint and several liability of §113 respondents. This argument fails to recognize that none of the third-party defendants has a proper share of responsibility until the court sets forth the respective liabilities of each of those parties through equitable apportionment among potentially responsible parties.

[Prior opinions in this litigation are published at 21 ELR 20879 and 26 ELR 20856.]

Counsel for Plaintiff
Deborah M. Reyher
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendants
William H. Hyatt Jr.
Pitney, Hardin, Kipp & Szuch
Park Avenue at Morris County
P.O. Box 1945, Morristown NJ 07962
(201) 966-6300