Null

Mark Atlas

Editors' Summary: In an early decision on private party recovery of attorneys' fees under CERCLA, T&E Industries v. Safety Light Corp., the court refused to create a right to recovery of attorneys' fees because Congress had not expressly provided that such a right exists. A distinction then evolved in the case law between enforcement-related and response-related attorneys' fees, and ultimately the Eighth Circuit held in General Electric Co. v. Litton Industrial Automation Systems that attorneys' fees are recoverable by private parties because the definition of "response" in CERCLA § 101(25) includes related enforcement activities. This recent federal appellate court ruling on the recovery of private party attorneys' fees under CERCLA follows more than two years of numerous conflicting district court decisions. In light of the decision's potential repercussions on the goal of cleaning up hazardous waste sites, this Article describes the development and present status of the law on private party recovery of attorneys' fees under CERCLA and offers suggestions to increase the likelihood of recouping these transaction costs.From T & E Industries to General Electric v. Litton: Private Party Recovery of Attorneys' Fees Under CERCLA

Mark Atlas is a junior partner in the environmental department of the Washington, D.C., office of Hale and Dorr. He received his B.A. and M.A. from Michigan State University and his J.D. from the University of Pennsylvania. Mr. Atlas has assisted individual and trade association clients in CERCLA enforcement and regulatory proceedings across the country, including serving as counsel to the Superfund Working Group of the National Association of Manufacturers.

[21 ELR 10206]

Transaction costs" — the polite euphemism for attorneys' fees and other legal costs — often are considered the bane of actions under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).¹ Transaction costs frequently are a major reason for parties to settle, rather than litigate, their CERCLA liability with the U.S. Environmental Protection Agency (EPA). Transaction costs also are important when private parties make efforts to recover the expenses they incur under CERCLA.

These expenses may arise when a private party attempts to respond to releases of hazardous substances by undertaking cleanup actions or when a party pursues a contribution action, seeking the equitable shares of liability from other potentially responsible parties (PRPs) after having settled its own liability.

Under CERCLA, private parties, as well as government entities, can recover the costs of responding to hazardous substance releases.² Although the right of private parties to recover the ordinary costs of response (e.g., technical studies, remediation actions, sampling, etc.) is well-established,³ uncertainty remains about whether private party attorneys' fees and other legal costs are recoverable under CERCLA. Because these transaction costs can be substantial, the issue of whether they are recoverable along with ordinary response costs could substantially influence a private party's decision to expend the effort and funds needed to recover costs from other PRPs. For example, if the expense of suing a PRP would exceed that PRP's equitable share of the response costs, taking into account the likelihood of prevailing in court, it may not be worthwhile to pursue a claim. This would discourage otherwise cooperative parties from conducting response actions or settling their liability early in the CERCLA process and would encourage PRPs inclined towards recalcitrance to continue "lying in the weeds" to escape liability.

Only recently has an appeals court ruled on the recovery under CERCLA of private party attorneys' fees, after more than two years of numerous conflicting lower court decisions. In light of the decision's potential repercussions on the goal of cleaning up hazardous waste sites, this Article describes the development and present status of the law on private party recovery of attorneys' fees under CERCLA and offers suggestions to increase the likelihood of recouping these transaction costs.

Court Rulings

"Enforcement Costs" Not Recoverable

The first court to directly address whether private party attorneys' fees are subject to cost recovery under CERCLA was T&E Industries v. Safety Light Corp.⁴ The plaintiff in T&E Industries, after incurring costs from responding to contamination at its facility, sought summary judgment on several issues against the defendant, who was a corporate successor to the facility's prior owner. The defendant argued that the plaintiff could not recover any attorneys' fees incurred in bringing the action.

The court's analysis of attorneys' fees and litigation costs began by citing well-established precedent that "a party cannot recover attorneys' fees unless provided for by contract or statute."⁵ The court concluded that its review of [21 ELR 10207] CERCLA found no indication that attorneys' fees and litigation costs were recoverable by private parties. The court had determined elsewhere in its opinion that no general intent exists in CERCLA to differentiate between costs recoverable by government and nongovernment parties, and thus allowed T&E Industries to be reimbursed for the value of the time spent by its president in assessing and managing the contamination problem. The court, however, perceived a specific intent for government/nongovernment differentiation with regard to attorneys' fees and litigation costs. The court pointed to CERCLA § 104(b)(1) as expressly authorizing the government's recovery of its attorneys' fees and litigation costs.⁶

The court also relied on United States v. Northeastern Pharmaceutical & Chemical Co. (NEPACCO)⁷ as supporting the right of government parties to recover such costs. The court in NEPACCO also had referenced CERCLA § 104(b) and had held that "CERCLA specifically allows for the recovery of attorney fees."⁸ However, the NEPACCO court took a more complicated route for reaching this conclusion than the T&E Industries court's simple reliance on CERCLA § 104(b)(1). In NEPACCO, the court noted that CERCLA § 107(a)(4)(A) holds PRPs liable for all costs of removal or remedial actions and that CERCLA § 101(23) defines "removal" to mean an action taken under CERCLA § 104(b).⁹ Because, as required by CERCLA § 104(b)(1), the government acted pursuant to CERCLA § 104(a) in conducting the removal action in question, including engaging in legal efforts authorized by CERCLA § 104(b), the court concluded that the government had the right under CERCLA § 107(a)(4)(A) to recover the costs it had incurred.

The NEPACCO decision, unlike that in T&E Industries, did not specify that only government plaintiffs could recover attorneys' fees. The court in T&E Industries stated, however, that no analogous portion of the statute would entitle a private party to recover for legal action taken and refused "to create a right to recovery of attorney fees where Congress has not expressly stated such to exist."¹⁰ In a footnote, the court rejected the plaintiff's argument that, because the definition of "response" in CERCLA § 101(25) includes related enforcement activities, attorneys' fees were recoverable by private parties.¹¹

In a summary fashion, the court indicated that it interpreted "enforcement costs" to mean the expense of "bring[ing] an action to enforce CERCLA's clean-up provisions against another private entity."¹² Presumably the court was referring (1) to actions under CERCLA § 106, which authorizes the President to seek an injunction or to issue an administrative order directing a party to implement a cleanup, or to actions under CERCLA § 109, which authorizes the President to impose administrative penalties or to seek judicially imposed penalties for CERCLA violations, because these are the only CERCLA enforcement actions unavailable to private parties. The court reasoned that because a private party cannot initiate such actions, it cannot incur recoverable "enforcement costs." It is relevant to recognize, however, that under this interpretation of "enforcement costs," state and local governments also would not be able to recover their attorneys' fees and litigation costs, because they — just as nongovernment entities — do not have the authority to act under CERCLA §§ 106 and 109.

"Response Costs" vs. "Enforcement Costs"

The court's reasoning in T&E Industries on the recovery of litigation costs was subsequently adopted, but the purposes for which attorneys' fees were incurred became relevant to prospects for their recovery. In BCW Associates, Ltd. v. Occidental Chemical Corp.,¹³ the plaintiffs brought a CERCLA cost recovery action against the defendant, a prior owner of a warehouse, for expenses incurred in cleaning up the contamination. The court cited T&E Industries without elaboration, in rejecting any recovery of litigation costs by the plaintiffs, BCW and Knoll International, Inc., the owner and operator of a warehouse contaminated by lead dust.

The court did, however, allow the plaintiffs generally to recover attorneys' fees that were incurred in responding to the threatened release and in complying with CERCLA cost recovery requirements. The court permitted recovery for the portion of BCW's legal fees incurred for such matters as investigating the conditions in the warehouse; strategy meetings with BCW, Knoll, and consultants; negotiatingwith Knoll as to responsibility for the cleanup; and developing a cleanup standard. The court also approved of recovery for Knoll's expenses for legal advice relating to cleanup procedures and negotiations with BCW.

The court thus bifurcated the attorneys' fees into enforcement-related costs which, pursuant to its own and the T&E Industries court's interpretation of CERCLA, were unrecoverable, and response-related costs, which were recoverable as would be expenses for technical consulting firms assisting in the remediation. Therefore, as long as attorneys acted in their role as advisers to planning and implementing a response action, their fees were appropriately categorized as response costs and thus subject to cost recovery.¹⁴ When attorneys are employed to initiate legal action to recover those costs, however, their fees and litigation costs are not recoverable.

The absence of any citation of statutory provisions or case law directly on point makes this decision useful as a precedent but generally inconclusive for its legal reasoning. Furthermore, the court's bare assertion that CERCLA specifically allows for the recovery of attorneys' fees echoes the earlier NEPACCO decision, which contained the same statement.¹⁸ This similarity is not surprising, because the author of the NEPACCO decision five years later wrote the General Electric I opinion. Thus, the reasoning that the judge employed in NEPACCO to conclude that attorneys' fees were recoverable under CERCLA may have remained the same for his General Electric I decision.

The Pendulum Swings Back. During the next year, a series of court decisions consistently rejected the recovery of attorneys' fees by parties other than the federal government. In Idaho v. Hanna Mining Co.,¹⁹ the state sought recovery of its legal costs in a suit for natural resource damages. The court noted that neither CERCLA nor any case stated whether attorneys' fees could be awarded in natural resource damage actions.²⁰ In the absence of any definitive guidance, the court decided, without elaboration, not to award attorneys' fees.

In Hemingway Transport, Inc. v. Kahn,²¹ the plaintiff, after cleaning up contaminated property it owned, sought recovery of its attorneys' fees from the trustee of the bankrupt prior owner. The court denied this recovery, citing T & E Industries generally and Regan v. Cherry Corp.²² specifically for the following assertion:

If Congress had intended to permit citizens seeking response costs to recover their attorney fees, it would simply have amended § 107 to allow the recovery of these litigation costs. [The Superfund Amendments and Reauthorization Act of 1986 ("SARA")] was a comprehensive overhaul of CERCLA. Therefore, it would have been a simply [sic] matter to amend § 107 to allow recovery of attorney fees.²³

The court's use of this quote from Regan, however, was inappropriately taken out of context. As noted earlier, the discussion in Regan addressed whether CERCLA § 310 allowed recovery of attorneys' fees from citizens suits, not whether attorneys' fees were otherwise recoverable under other CERCLA provisions. In addition, during consideration of SARA, Congress should have felt no need to amend CERCLA § 107 to allow for private party recovery of attorneys' fees because the only pre-SARA case even referencing this issue had indicated that such fees were recoverable.²⁴

In Fallowfield v. Strunk,²⁵ the plaintiffs, after cleaning up contaminated property they owned, sought cost recovery, including attorneys' fees, from the defendants, who had previously owned the property. While the court rejected the claim for attorneys' fees, it noted the conflicting opinions of other courts and provided a more extensive rationale for its decision. The court focused on the CERCLA § 101(25) definition of response, which the General Electric I court may have relied on to justify the inclusion of attorneys' fees in recoverable response costs, but which the court in T & E Industries dismissed in a footnote.

The court noted that SARA had added to the definition of response any "enforcement activities related thereto." After reviewing the legislative history for this modification, however, the court concluded that Congress did not intend for private parties to collect attorneys' fees in cost recovery actions. The court cited a House report from the Committee on Energy and Commerce, which stated that "[t]he change will confirm the EPA's authority to recover costs for enforcement actions taken against responsible parties."²⁶ Because this text referenced only EPA, the court apparently [21 ELR 10209] decided that Congress had mandated that other parties be expressly excluded from recovering such costs.

The court ignored, however, the only other possible legislative explanations for this change, none of which mentioned EPA:

This amendment clarifies and confirms that such costs are recoverable from responsible parties, as removal or remedial costs under section 107.²⁷

[This amendment] modifies the definition of "response action" to include related enforcement activities.²⁸

[This action] amends the definition of what constitutes a response to include related enforcement activities, thereby permitting recovery of those costs.²⁹

Thus, as these alternative explanations illustrate, the legislative history for the change to CERCLA § 101(25) is ambiguous as to whether it was designed solely for EPA's benefit.

The final case in the series that rejected the recovery of attorneys' fees by parties other than the federal government was Mesiti v. Microdot, Inc.,³⁰ which simply cited T & E Industries in holding that attorneys' fees and litigation costs are not recoverable by private litigants under CERCLA.³¹

The Pendulum Swings Back Again. Recently, another series of cases allowing the recovery of attorneys' fees has developed. In Shapiro v. Alexanderson,³² the court — like the Fallowfield court — focused on the inclusion of "enforcement activities related thereto" in the CERCLA § 101(25) definition of response. The court agreed, however, with the reasoning in the General Electric I decision that CERCLA should be broadly interpreted so as not to restrict the liability of PRPs. Furthermore, the court interpreted the General Electric I decision as holding that attorneys' fees were recoverable as response costs because enforcement activities were defined as response costs because enforcement activities were defined as response actions under CERCLA § 101(25), and CERCLA § 107(a)(4)(B) allowed private parties to recover response costs. Thus, the court rejected the defendant's motion for summary judgment to eliminate the plaintiff's claim for attorneys' fees.

The next case involving recovery of attorneys' fees, Pease & Curren Refining, Inc. v. Spectrolab, Inc.,³³ presents the most extensive discussion of the issue. The court began by noting that although CERCLA § 104(b)(1) expressly allows the federal government to recover its attorneys' fees and CERCLA § 107(a)(4)(B) explicitly allows private parties to recover their response costs, CERCLA does not directly discuss recovery of private party attorneys' fees. Further, other courts had split in deciding this issue.

Predictably, the court based its decision on the inclusion of "enforcement activities related thereto" in the CERCLA § 101(25) definition of response. The court relied primarily on what it perceived as the plain meaning of the relevant statutory language and held that Congress intended to allow private party recovery of attorneys' fees. The court noted that CERCLA § 107(a)(4)(B) expressly allows private parties to recover the "necessary costs of response." Because CERCLA § 101(25) defines "response" to include related enforcement activities, and because the plain meaning of "enforcement activities" includes attorneys' fees incurred to require PRPs to comply with response actions dictated by CERCLA, the court concluded that Congress intended those costs to be recoverable by private parties. The court also noted that its interpretation was consistent with CERCLA's broad legislative purpose to impose cleanup costs on parties responsible for the contamination.

The court also expressly rebutted the defendant's arguments — and the reasoning of the prior court decisions that rejected recovery of attorneys' fees — on some points. The defendant offered an argument relied on in Fallowfield, claiming that a House report on SARA indicated that the addition of the words "enforcement activities related thereto" to theCERCLA § 101(25) definition of response was intended to apply only to EPA's authority to recover attorneys' fees. The court noted, however, that the definition of response in CERCLA § 101(25) is not expressly limited to the federal government, but also refers to private parties through the application of CERCLA § 107(a)(4)(B). The court used this same point to reject the defendant's argument, and that of the court in T & E Industries, that to expressly permit the federal government to recover attorneys' fees under CERCLA § 104(b)(1) creates a negative implication that only the federal government can recover such costs. The court concluded that because CERCLA § 101(25) allowed private party recovery of such costs, no such negative implication existed. Finally, the court rejected the defendant's argument that allowing plaintiffs to seek attorneys' fees under CERCLA would prompt them to disguise ordinary tort claims as CERCLA claims in order to recover attorneys' fees. The court simply noted that plaintiffs would not automatically be allowed to recover all of their attorneys' fees, including those involved with non-CERCLA claims, but that the proper recovery would be determined on an allocation basis.

The next case involving private party recovery of attorneys' fees, United States v. Hardage,³⁴ reverted back to the court's position in T & E Industries. Quoting liberally from the decision in T & E Industries, the court in Hardage rejected the recovery of attorneys' fees. The Hardage court also cited United States v. Conservation Chemical Co.³⁵ as supporting the position that the cost of tasks performed to assist counsel in their defense of litigation is not recoverable. Although this is an accurate portrayal of the Conservation Chemical court's holding, it is taken out of context when applied to the issue presented in Hardage.

In Conservation Chemical, the third-party plaintiffs sought recovery not of their attorneys' fees, but of the costs of some remedial investigation activities. The court examined these activities and determined that they were not [21 ELR 10210] remedial investigation tasks originally approved by the court, but appeared to be tasks designed simply to assist the third-party plaintiffs in defending themselves in the litigation.³⁶ Therefore, the court concluded that such expenses could not legitimately be characterized as response costs, and thus would not be recoverable. The court stated, however, that if the third-party plaintiffs could demonstrate that these activities were useful and necessary in formulating a response action, the costs would be recoverable. Thus, the Conservation Chemical decision in no way supports the proposition that private attorneys' fees are not recoverable; rather, one could argue that it reinforces the position that at least attorneys' fees incurred in planning and implementing a response action would be recoverable.

The most recent court decision on recouping private attorneys' fees under CERCLA also is the first appellate court opinion on the issue. In General Electric Co. v. Litton Industrial Automation Systems (General Electric II),³⁷ the court considered Litton's appeal of the General Electric I decision in which, among other findings, General Electric was allowed to recover its attorneys' fees. In deciding this appeal, the court focused — like most of the earlier courts — on the inclusion of "related enforcement activities" within the CERCLA § 101(25) definition of response. The court simply stated:

A private party cost-recovery action such as this one is an enforcement activity within the meaning of the statute…. Attorney fees and expenses necessarily are incurred in this kind of enforcement activity and it would strain the statutory language to the breaking point to read them out of the "necessary costs" that section 9607(a)(4)(B) allows private parties to recover.³⁸

The court also observed that such an interpretation supported two of CERCLA's main goals — prompt cleanups and the imposition of the costs on PRPs. Because the litigation costs associated with a site could surpass the costs of cleaning it up, parties could be discouraged from conducting cleanups if they were unable to recover their transaction costs. In a closing footnote, however, the court mentioned without elaboration the split among district courts on this issue.³⁹

The Controversy Continues: Defining "Enforcement Activities"

Only a week after the General Electric II decision, though in another context, the narrow interpretation of the T&E Industries court that enforcement activities under CERCLA § 101(25) do not include cost recovery claims was also expressed in Reardon v. United States.⁴⁰ In Reardon, the court tried to determine whether property liens were among the enforcement activities related to EPA response actions subject to the preenforcement review prohibition in CERCLA § 113(h). To decide what constitutes "enforcement activities," the court first focused on CERCLA § 117(c)(2), which refers to "enforcement action" under CERCLA § 106. The court admitted that "enforcement action" and "enforcement activities" are not necessarily synonymous, but in the absence of any statutory definition for either term, it treated "enforcement" as the operative word for both terms. Because CERCLA § 106 pertains only to administrative orders issued, or court orders sought, by EPA, the court concluded that "enforcement" in CERCLA specifically refers to activities that EPA can take to force compliance with the response actions that it orders undertaken.

The court's search, however, for enforcement-related language in CERCLA, which ultimately led to its interpretation of "enforcement activities," was seriously flawed. Although the term enforcement activities appears nowhere in CERCLA other than in § 101(25), CERCLA uses the term enforcement action in six places additional to the CERCLA § 117(c)(2) language that the court cited.⁴¹ That the statute uses one term — enforcement action — several times and another term — enforcement activities — only once is evidence that Congress intended that courts interpret the terms differently rather than evidence that Congress expected courts to ignore half of the words in the phrases to assume that they are synonymous.

Furthermore, of the six additional places where CERCLA refers to enforcement actions, only § 122(e)(5) can logically be interpreted to pertain only to actions under CERCLA § 106. CERCLA § 122(e)(5) allows the government to "undertake … enforcement action regarding a significant threat to public health or the environment" during the special notice moratorium period on EPA actions under § 122. Because a § 107 cost recovery action is an unlikely response to any such significant threat, this section presumably envisions only § 106 actions.

In contrast, the § 122(f)(6)(C) reference to enforcement action expressly states that it is applicable to actions under both § 106 and § 107. In addition, the § 301(h)(1)(F) references to the enforcement actions on which EPA must annually report to Congress do not limit themselves to § 106 actions, and EPA has interpreted them to include both § 106 and § 107 actions. Similarly, the § 111(c)(3) reference to the enforcement actions that can be paid for from Superfund is not limited to § 106 actions,and EPA has logically interpreted it to include more than such actions. The § 122(b)(4) reference to the enforcement actions that the government can bring against nonsettlors at a mixed funding site also is not limited to § 106 actions.

Finally, the § 104(d)(1)(A) reference to enforcement actions can only be interpreted to exclude § 106 actions. This section concerns enforcement actions that nonfederal government entities must be able to implement to qualify for a cooperative agreement with the federal government to clean up CERCLA sites. Because only the federal government can issue § 106 orders, this section's reference to enforcement actions cannot include such actions. Thus, contrary to the Reardon court's myopic focus on § 117(c)(2), most of CERCLA's references to enforcement actions do not pertain only to § 106 actions.

Even if no provision in CERCLA other than § 117(c) [21 ELR 10211] referenced enforcement action, the court's reliance on § 117(c) to define the term was unwise. This section describes the actions EPA can take regarding a CERCLA site that would require EPA to publish an explanation of significant differences if the action will result in a different remedy than what was selected in the site's Record of Decision. Because the issuance of a § 106 order is the only enforcement action that can be taken involving the implementation of a remedy, § 117(c) inherently results in a narrow definition of what constitutes an enforcement action. Thus, the court's selection of § 117(c), rather than other relevant sections of CERCLA, to decide its interpretation of an enforcement action resulted in a preordained conclusion. That almost all of the other references to enforcement action in CERCLA would lead to a different conclusion is an indication that the court chose incorrectly.

Practical Application of CERCLA Attorneys' Fee Cases

The preceding discussion of relevant cases demonstrates that the issue of private party recovery of attorneys' fees is unsettled. Although the statutory language and legislative history that have been the battleground of this issue consist of just a few sentences, the courts apparently have found no difficulty in reaching widely divergent interpretations of them. Thus, at present, it is difficult to predict the decision of a court confronted with this issue. Perhaps a consistent approach will begin to emerge as more circuit courts decide the issue.⁴²

In the meantime, however, the past cases provide some guidance on how private parties may be able to maximize the likelihood of recovering their attorneys' fees in CERCLA actions by addressing certain administrative aspects of the attorney-client relationship. The following are specific suggestions to consider.

Maintain, Retain, and Submit to the Court Detailed Records of the Purpose of Particular Attorneys' Fees and Expenditures

Try to avoid the misfortune — especially on a large scale — of the plaintiff in BCW, who was denied cost recovery for an overnight mail package to its attorneys because it did not provide proof of the purpose of the expenditure. All costs for attorneys should be documented, and their purpose in the context of the CERCLA action should be described in sufficient detail to best survive the scrutiny of a defendant and a judge. To avoid the difficulty of attempting to reconstruct this information late in the litigation process, this information should be collected and recorded contemporaneously with the incurrence of the costs.

Explain Why Each Expenditure Was "Necessary"

Try not to make the mistake of the plaintiff in BCW who was denied cost recovery for failing to demonstrate why its attorney's air fare for travel to the contamination site was "necessary." CERCLA § 107(a)(4)(B) allows private parties to recover "necessary costs of response…." Thus, contemporaneously creating a record of why the services and expenditures of an attorney are "necessary" in the context of the CERCLA action will better ensure that such costs will overcome this statutory hurdle. For example, a client could be asked to send a short letter to its attorney to initiate the attorney's assignment and to indicate that particular tasks are "necessary" for conducting the response action.

Explain Why Each Expenditure Is "Consistent With the National Contingency Plan"

CERCLA § 107(a)(4)(B) also requires that costs be incurred consistent with the CERCLA National Contingency Plan (NCP)⁴³ to be recoverable. Thus, contemporaneously creating a record of the provisions of the NCP with which the services and expenditures of an attorney are consistent will better ensure that such costs will pass this statutory threshold for recovery.

Attempt to Classify as Many Costs as Possible as Related to "Response" Rather Than to Enforcement

Some courts have been more willing to allow the recovery of attorneys' fees incurred in response-related activities than those incurred during litigation. Thus, to the extent possible, attorneys' fees should be justified as being part of the client's involvement in the response action. Furthermore, some legal research or discussions with technical consultants may be supported as necessary in both the response action and the litigation phases of the site cleanup. Engaging in that research and discussion before the initiation of litigation may help in positioning those expenses as response costs and thus increasing the likelihood of their recovery.

1. 42 U.S.C. §§ 9601-9675, ELR STAT. CERCLA 001-075.

2. CERCLA § 107(a)(4)(B), 42 U.S.C. § S9607(a)(4)(B), ELR STAT. CERCLA 024-025.

3. See, e.g., Wickland Oil Terminals v. ASARCO, Inc., 792 F.2d 887, 890, 16 ELR 20754, 20756 (9th Cir. 1986); NL Indus. v. Kaplan, 792 F.2d 896, 898, 16 ELR 20749, 20750 (9th Cir. 1986); Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805 F.2d 1074, 1078, 17 ELR 20223, 20225 (1st Cir. 1986).

4. 680 F. Supp. 696, 18 ELR 20926 (D.N.J. 1988).

5. Id. at 707, 18 ELR at 20932 (citation omitted).

6. 42 U.S.C. § 9604(b)(1), ELR STAT. CERCLA 013 ("[T]he President may undertake such planning, legal, … and other studies or investigations as he may deem necessary or appropriate to plan and direct response actions, to recover the costs thereof, and to enforce the provisions of this chapter." (emphasis added)).

7. 680 F. Supp. at 708, 18 ELR at 20932 (citing 579 F. Supp. 823, 14 ELR 20212 (W.D. Mo. 1984)).

8. 579 F. Supp. at 851, 14 ELR at 20224.

9. Id., 14 ELR at 20224.

10. 680 F. Supp. at 708, 18 ELR at 20932.

11. Id. n.13, 18 ELR at 20932 n.13. Because CERCLA § 107(a)(4)(B) allows private parties to recover their "response" costs, the plaintiff claimed that expenses from its "enforcement activities" — attorneys' fees and litigation costs — should be recoverable.

12. Id.

13. No. 86 Civ. 5947 (E.D. Pa. Sept. 29, 1988).

14. This position is consistent with dicta in Bulk Distrib. Centers, Inc. v. Monsanto Co., 589 F. Supp. 1437, 15 ELR 20151 (S.D. Fla. 1984). In that case, the court concluded that the plaintiff could not seek cost recovery until it had begun implementing, rather than just planning, a response action, and thus the court did not rule on whether any specific costs were recoverable. The court noted, however, that "[o]nce a claimant has begun to implement a government authorized clean-up program, then those preliminary costs heretofore non-recoverable (e.g., expenses for legal … and other planning) may be recaptured." Id. at 1452, 15 ELR at 20159 (emphasis added).

[21 ELR 10208]

Although this partial recovery of attorneys' fees should be welcome news for plaintiffs, the BCW decision indicates that courts may carefully scrutinize the substantiation for these expenses. For example, whereas the court granted cost recovery for Knoll's attorneys' fees, it refused to allow recovery of a $ 1,052 bill for flying one of Knoll's attorneys to the warehouse, because there was insufficient proof that the trip was necessary. The court also disallowed a $ 17 bill for overnight mail to its attorneys, because it was uncertain from the information presented what was in the package.

All Legal Costs Recoverable

The differentiation between enforcement-related and response-related attorneys' fees advanced in BCW was not adopted in the next case to directly confront the issue, General Electric Co. v. Litton Business Systems, Inc. (General Electric I).¹⁵ With little explicit reasoning for its decision, the court in General Electric I allowed the plaintiff to recover all of its attorneys' fees, during both the administrative phase (i.e., planning and implementing the cleanup of the plaintiff's contaminated property) and the litigation phase, in which the prior owner of the property was sued for cost recovery.¹⁶ In justifying its decision, the court stated that "CERCLA specifically allows for the recovery of attorney's fees."¹⁷ The court also noted that it was Congress' intent that CERCLA be broadly interpreted so as not to restrict the liability of PRPs for response costs, and cited the CERCLA § 101(25) definition of response, which includes related enforcement activities. It is unclear, however, from the court's discussion whether it was using this definition as support for the private party recovery of attorneys' fees.

15. 715 F. Supp. 949 (W.D. Mo. 1989). In Regan v. Cherry Corp., 706 F. Supp. 145 (D.R.I. 1989), the court faced the question of whether attorneys' fees were recoverable pursuant to CERCLA § 310 by plaintiffs bringing citizens suits under that provision. While the court concluded that attorneys' fees were not recoverable under this authority, it did not address the issue of whether they were otherwise recoverable under CERCLA. Id. at 149.

16. 715 F. Supp. at 955, 959.

17. Id. at 959.

18. 579 F. Supp. at 851, 14 ELR at 20224.

19. 882 F.2d 392, 19 ELR 21358 (9th Cir. 1989).

20. Id. at 396, 19 ELR at 21360.

21. 108 Bankr. 378 (Bankr. D. Mass. 1989).

22. 706 F. Supp. 145 (D.R.I. 1989).

23. 108 Bankr. at 383.

24. Bulk Distrib. Centers, Inc. v. Monsanto Co., 589 F. Supp. 1437, 15 ELR 20151 (S.D. Fla. 1984).

25. No. 89 Civ. 8644 (E.D. Pa. Apr. 23, 1990).

26. H.R. REP. No. 253, 99th Cong., 1st Sess., pt. 1, at 66-67 (1985), reprinted in 1986 U.S. CODE CONG. & ADMIN. NEWS 2835, 2848-49.

27. H.R. REP. No. 962, 99th Cong., 2d Sess., 185 (1986), reprinted in 1986 U.S. CODE CONG. & ADMIN. NEWS 3276, 3278.

28. H.R. REP. No. 253, 99th Cong., 1st Sess., pt. 1, at 66-67 (1985), reprinted in 1986 U.S. CODE CONG. & ADMIN. NEWS 2835, 2848-49.

29. Id. at 5-6 (1985), reprinted in 1986 U.S. CODE CONG. & ADMIN. NEWS 3124, 3129.

30. 739 F. Supp. 57 (D.N.H. 1990).

31. Id. at 62-63.

32. 741 F. Supp. 472 (S.D.N.Y. 1990).

33. 744 F. Supp. 945 (C.D. Cal. 1990).

34. 750 F. Supp. 1460 (W.D. Okla. Oct. 16, 1990).

35. 628 F. Supp. 391 (W.D. Mo. 1985).

36. Id. at 406.

37. 920 F.2d 1415, 21 ELR 20453 (8th Cir. 1990), petition for cert. filed sub nom. Litton Industrial Automation Sys. v. General Elec. Co., 59 U.S.L.W. 3535 (U.S. Jan. 31, 1991) (No. 90-1221).

38. Id. at 1422, 21 ELR at 20456 (citations omitted).

39. Id. at 1422 n.10, 21 ELR at 20456 n.10.

40. 922 F.2d 28 (1st Cir. 1990).

41. See CERCLA §§ 104(d)(1)(A), 111(c)(3), 122(b)(4), 122(e)(5), 122(f)(6)(C), and 301(h)(1)(F); 42 U.S.C. §§ 9604(d)(1)(A),, 9611(c)(3), 9622(b)(4), 9622(e)(5), 9622(f)(6)(C), and 9651(h)(1)(F); ELR STAT. CERCLA 015, 034, 055, 057, 058, 064.

42. A more consistent approach would certainly result if the U.S. Supreme Court grants the petition for certiorari filed by Litton. See Litton Indus. Automation Sys. v. General Elec. Co., 59 U.S.L.W. 3535 (U.S. Jan. 31, 1991) (No. 90-1221).

43. 40 C.F.R. pt. 300 (1990).