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Applying Cost Causation Principles in Superfund Allocation Cases

February 1998

Citation: ELR 10067

Author: Richard Lane White and John C. Butler III

Editors' Summary: The question of how to fairly apportion cleanup costs at Superfund sites is a highly debated topic in the law of hazardous substances. This Article highlights the deficiencies found in common allocation methods, and offers cost causation as a rational approach to apportioning cleanup costs. After providing a background on the CERCLA liability scheme, the authors address the various equitable factors used to apportion cleanup costs and discuss cost causation's relationship with those factors. The authors then introduce cost causation in an examination of how cleanup costs are created at a site and who is responsible for the specific costs. Next, they use figures and hypothetical scenarios to explain cost causation analysis and to note the deficiencies of volumetric- and toxicity-based allocations of costs. They conclude that although cost causation analysis may not address every equitable issue, it addresses many of them, and is flexible enough to incorporate others.

Richard Lane White is a director in the Cambridge, Massachusetts, office of Putnam, Hayes & Bartlett, Inc., an international economic and management consulting firm. John C. Butler III is a managing director of Putnam, Hayes & Bartlett, Inc., in its Los Angeles, California, office, and he heads the firms environmental practice. Both Mr. White and Mr. Butler serve as allocation experts in Superfund contribution cases. The views expressed here are those of the authors, and not necessarily those of Putnam, Hayes & Bartlett, Inc.

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