ELR Citation: ELR 20845
No(s). s. 89-1979 et al (1st Cir. Mar 20, 1990)

The court holds that a district court did not abuse its discretion in approving two partial consent decrees in a Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) action to recover response costs. The Environmental Protection Agency (EPA) entered into an administrative settlement with 300 de minimis potentially responsible parties (PRPs) that requires each PRP to pay 160 percent of its volumetric share of the estimated response costs. Subsequently, EPA and two states entered into two consent decrees, one requiring 47 major PRPs to perform remedial actions and pay over $ 18 million in response costs, and the other requiring 12 de minimis PRPs that failed to enter the earlier administrative settlement to pay 260 percent of their volumetric shares of the estimated response costs. The court first upholds the district court's finding that the proposed decrees possessed procedural integrity, since EPA did not act beyond its scope of discretion in separating minor and major PRPs by using a one-percent volumetric dividing line. The dividing line was plausible and EPA had no obligation to allow PRPs to move from class to class and undermine the rationale and purpose for drawing lines. Moreover, the consent decrees were the product of fair play, having been negotiated at arm's length among experienced counsel. The court next holds that the district court selected a reasonable method of weighing comparative fault and that the consent decrees were thus substantively fair. EPA need not show that it chose the best, or even the fairest, of all conceivable methods. Further, the acceptance of the first and second de minimis settlement by so many de minimis PRPs is evidence of substantive fairness toward the class to which appellants belong. The court holds that it was not unfair to increase the settlement costs of the second de minimis decree, since rewarding PRPs who settle sooner than later is completely consonant with CERCLA. EPA is entitled to make use of a series of escalating settlement proposals in a CERCLA case.

The court next holds that the district court properly found the consent decrees to be reasonable. Since litigation is a cost-ineffective alternative to settlement that can squander valuable resources, a settlement that nets less than full recovery of cleanup costs is reasonable. Next, the court holds that the district court correctly found that the consent decrees addressed CERCLA's overarching principles of accountability, the desirability of a clean environment, and promptness of response activities. The court finds that in attempting to gauge a consent decree's consistency with CERCLA, courts must give deference to EPA's choice of eligibility criteria, and the criteria EPA selected fell within the ambit of executive discretion. The court holds that disproportionate liability, a technique that promotes early settlements and deters litigation, is an integral part of and is expressly provided for in CERCLA. The court holds that the district court properly dismissed appellants' contribution claims, since Congress did not intend nonsettlors to have contribution rights against settlors regarding matters addressed in settlement. The court next holds that although CERCLA is silent regarding indemnification, the court refuses to read such a right into the statute that would effectively allow nonsettlors to avoid the statutory scheme in §113. The court also holds that EPA is under no obligation to notify de minimis PRPs of possible settlement offers, its negotiating strategy, or whether such PRPs will or will not be eligible to join ensuing major party settlements. Moreover, the court holds that CERCLA does not require EPA to open all settlement offers to all PRPs, because if EPA operates in good faith, it is at liberty to negotiate and settle with whomever it chooses. Finally, the court holds that no evidentiary hearing was required, since the issues were fully argued and briefed.

[The district court opinion is published at 20 ELR 20159.]

Counsel for Appellant
Gregory L. Benik, Gerald J. Petros
Hinckley, Allen, Snyder & Comen
1500 Fleet Ctr., Providence RI 02903
(401) 274-2000

Robert C. Barber, Duncan A. Maio
Looney & Grossman
101 Arch St., Ninth Fl., Boston MA 02110
(617) 951-2800 for Plaintiff-Appellee
J. Carol Williams
Land and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2757

Mark Pearlstein
U.S. Attorney's Office, 1107 John W. McCormack Post Office & Courthouse,
Boston MA 02109-4583
(617) 223-9403

Nancy E. Harper, Ass't Attorney General
Commonwealth of Massachusetts
One Ashburton Pl., Boston MA 02108
(617) 727-2200

George Dana Bisbee, Associate Attorney General
Attorney General's Office
208 State House Annex, Concord NH 03301
(603) 271-3655

Before TORRUELLA and SELYA, Circuit Judges, and BOWNES, Senior Circuit Judge.