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Adobe Lumber, Inc. v. Hellman

ELR Citation: 39 ELR 20028
Nos. No. 05-1510, (E.D. Cal., 02/03/2009)

A district court rejected a settlement agreement between a property owner and a former dry cleaning business concerning subsurface soil and groundwater perchloroethylene contamination. Under the terms of the settlement agreement, the owner requested that the court adopt a "pro tanto" settlement credit method—i.e., a dollar-for-dollar reduction of the amount of the settlement from the owner's ultimate recovery. The proportionate share approach, however, better facilitates the equitable allocation of liability in accordance with the statutory guidance of Comprehensive Environmental Response, Compensation, and Liability Act §113(f)(1). This approach calls for the reduction of the nonsettling defendants' liability by the equitable share of the settling party's obligation. Because the proposed settlement agreement here is expressly conditioned upon the court entering an order that only reduces the liability of nonsettling defendants by the dollar amount of the settlement—a pro tanto credit—the court denied the owner's motion to approve the settlement.