|
31 ELR 11098 | Environmental Law Reporter | copyright © 2001 | All rights reserved Making Sense of Superfund Allocation Decisions: The Rough Justice of Negotiated and Litigated AllocationsRobert P. DahlquistMr. Dahlquist is a partner in the law firm of Latham & Watkins. He is the chair of the San Diego office's Environmental Department. His practice areas include environmental law, insurance coverage, and trial court/appellate litigation. He is a graduate of the University of Chicago Law School. The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund) allows parties who are liable for environmental cleanup costs to seek contribution from other responsible parties. The statutory right of contribution, codified at 42 U.S.C. § 9213(f)(1), serves as the basis for allocating liability among responsible parties both in private cost recovery actions and in cost recovery actions commenced by governmental entities. The statute empowers a court to "allocate response costs among liable parties using such equitable factors as the court determines are appropriate."1 Aside from suggesting that Superfund allocations should be performed in "an equitable manner,"2 CERCLA provides no real guidance to parties who become embroiled in allocation disputes. Moreover, the relative lack of statutory guidance is not the only challenge facing parties in these disputes. "Allocation is a highly fact-intensive process that depends upon the particular circumstances of each case."3 Hence, in the early history of the Superfund program, most practitioners and parties found it "difficult to predict how costs might be allocated in particular cases."4 However, as time has passed, a body of case law and practical experience has emerged to enable parties and their counsel to more accurately predict the range of likely outcomes in allocation disputes, even in the most factually complex cases. In both negotiated settlements and litigated disputes, allocation outcomes (and counsel's ability to predict outcomes) are usually far from perfect. Nevertheless, courts and parties are often able to develop allocations that achieve some measure of rough justice. Where information concerning the volume or mass of each party's contribution to the contamination is available, courts and parties usually start the allocation process by making an initial allocation based on some sort of volumetric or tiered volumetric allocation scheme, and then making adjustments to account for other appropriate factors, such as unusually high or low costs attributable to a particular type of waste, a party's culpability or cooperation, a party's inability to pay, etc. Where some or all of the cleanup costs can be segregated or allocated to individual parties (or groups of parties) whose conduct caused a particular environmental problem, rough justice is achieved by allocating the cleanup costs to the parties whose conduct caused the problem. Where the relative levels of culpability among the responsible parties vary significantly, rough justice is achieved by allocating more liability to the most culpable parties. District courts have considerable discretion to determine the appropriate factors to be used in an allocation of liability and the weight to be given to each factor. Courts frequently divide the liable parties into categories—such as site owners, site operators, waste generators, and waste transporters—and allocate both between categories and among the members of each category. While it is true that allocations are dependent upon the unique facts of each case, the cases tend to indicate that, all other things being equal: site operators who have actively caused contamination are usually allocated more liability than property owners, particularly if the owner is not culpable or is absent; owners and operators of waste disposal facilities are usually allocated more liability than waste generators and transporters; and waste generators are usually allocated more liability than transporters unless the transporter was responsible for selecting the method of disposal. Among waste generators, the quantity and types of wastes generated by each party tend to be among the most important allocation factors. But if extraordinary costs can be attributable to any one or more parties or if there are significantly different levels of culpability, then these factors will usually predominate. There are many reported district court decisions addressing Superfund allocation issues. It is not feasible to discuss all of the published decisions in this Dialogue. But most of the leading published decisions are discussed or cited below, and a nonexhaustive compilation of representative district court decisions is presented in Appendix A. In the absence of an error of law or some other extraordinary circumstance, a district court's allocation will almost [31 ELR 11099] always be affirmed by the courts of appeals. This should not be surprising because the district courts have been granted the authority to do equity, and the courts of appeals are generally reluctant to substitute their own judgment for the equitable discretion exercised by district courts. A nonexhaustive compilation of appellate decisions is shown in Appendix B. Many courts have indicated that the allocation process should commence with an analysis of the so-called Gore factors. These factors include: (1) the ability of the parties to demonstrate that their contribution to a discharge, release, or disposal of a hazardous waste can be distinguished; (2) the amount of hazardous waste involved; (3) the degree of toxicity of the waste; (4) the degree of involvement by the parties in the generation, transportation, treatment, storage, or disposal of the waste; (5) the degree of care exercised by the parties with regard to the waste involved, taking into account the characteristics of the waste; and (6) the degree of cooperation by the parties with applicable government officials to prevent any harm to the public health or environment.5 These factors assist the decision-maker in assessing the environmental harm caused by each party.6 A court may, if it chooses, consider these factors in allocating liability under CERCLA but there are at least two reasons why a court is not required to follow these factors in any particular case. First, CERCLA specifically authorizes the court to consider any factors that the court determines are appropriate to be considered. By its own terms, the statute does not require a court to follow the Gore factors or any other factors. "Congress intended the court to deal with [allocation disputes] by creative means, considering all the equities and balancing them in the interests of justice."7 The statute does not require the courts to get "bogged down by . . . making meticulous factual determinations" about the Gore factors or any other factors.8 A district court may allocate liability based on "several factors, a few factors, or only one determining factor, . . . depending on the totality of the circumstances presented to the court."9 Second, the Gore factors were proposed for inclusion into CERCLA but Congress declined to enact them. Hence, it is ironic, and probably wrong, for courts and commentators to continually assert that the factors should form the framework for allocating liability under CERCLA. Superfund allocation cases may be the only type of legal proceeding where courts and parties feel compelled to follow a procedure—in this case, evaluating each of the Gore factors—that was rejected by Congress. Courts are certainly free to consider the Gore factors but they are not required to do so. In light of the statute's declaration that a court may consider any equitable factors that the court deems appropriate, it is not surprising that a wide variety of equitable factors have been used in apportioning liability under CERCLA. Some of the other factors, in addition to the Gore factors, include: (1) the costs caused by the conduct of each party10; (2) the benefits received from using a particular waste disposal practice11; (3) the parties' knowledge of, and acquiescence in, the activities that caused contamination12; (4) whether a property owner acquired the contaminated property at a reduced price13; (5) whether a property owner purchased the property with knowledge of its contaminated condition14; (6) whether a property owner may benefit from an increased property value following the remediation15; (7) the parties' financial resources16; (8) the existence of any indemnity agreements17; and (9) the existence of an agency relationship among the parties.18 These various factors—the Gore factors and the other factors considered by the courts—were reduced by Judge Ernest C. Torres in United States v. Davis19 into a list of four categories of the most "critical factors" to be considered in Superfund allocations. According to Judge Torres, the four critical factors are: (1) the extent to which cleanup costs are attributable to wastes for which a party is responsible; (2) the party's level of culpability; (3) the degree to which the party benefitted from the disposal of the waste; and (4) the party's ability to pay its share of the cost. The Gore factors are most relevant in academic and theoretical analyses of the way Superfund liabilities should be allocated. But in the real world of litigated cases, Judge Torre's list of four critical factors often provides the basis upon which Superfund allocation decisions are made. Moreover, in the real world of negotiated settlements (particularly settlements between the U.S. Environmental Protection Agency (EPA) and waste generators), the Gore factors and Judge Torres' list of critical factors become almost irrelevant. If someone were commissioned to compile a list of critical factors for negotiated settlements between EPA and waste generators, the list would be very short. In fact, it would have only two factors: (1) waste volume or mass; and (2) a settlement "premium." The amount of the [31 ELR 11100] settlement premium may be influenced by any applicable equitable factor but, as summarized more fully below, the premium amount generally falls within a range of 50-100%. One of the curious aspects of Superfund allocation proceedings is that, in most instances, the primary factors used in settling cases (volume and a settlement premium) are not the same factors that are used by the courts in adjudicating each party's equitable share of liability. In litigated cases the courts generally focus on the conduct of each party, while in the settlement context the parties tend to focus primarily on waste volume or mass and use the settlement premium as a catchall for all other potentially applicable equitable factors. In most settlements involving large numbers of parties, it is usually assumed, rightly or wrongly, that all parties have the same levels of culpability and cooperation and that it is impossible or infeasible to determine the relative costs associated with the wastes discharged by each party. In the sections that follow, the two critical factors used in most negotiated settlements—waste volume and settlement premiums—will first be explored. Then, the four critical factors used in most litigated cases, as identified by Judge Torres in Davis, will be discussed. Finally, various procedural issues will be briefly addressed. Critical Allocation Factors in Negotiated Settlements As discussed above, the Gore factors and Judge Torres' list of four critical factors become almost irrelevant in negotiated settlements. Instead, only two factors—waste volume or mass and the settlement premium—are critical in negotiated settlements between EPA and waste generators. Both of these factors are discussed in more detail below. There is a significant inconsistency between theory and practice with respect to the use of volume in Superfund allocations. In theory, everyone knows that an allocation based solely on volume can produce unfair and even absurd results. The Ninth Circuit Court of Appeals recognized this fact in Boeing Co. v. Cascade Corp.,20 when it compared two hypothetical parties: one that disposed of one pound of highly toxic material that escaped and contaminated a large area; and another that disposed of 500 pounds of the same material in a sealed canister that could be readily removed. The Ninth Circuit confirmed the obvious when it indicated that a volumetric allocation of 500 to 1 would be inappropriate because of the disproportionate costs associated with remedying the problems caused by these two hypothetical parties. A more likely, real-world scenario is where one party disposes of concentrated waste but another party disposes of diluted, barely hazardous liquids at a disposal site. Or, one party disposes of a solvent that migrates and causes significant groundwater contamination while another party disposes of a material that has not migrated and has not caused any off-site contamination. The argument that it is unfair to allocate by volume has considerable "persuasive force" in these real-world contexts.21 However, it is reasonable to allocate liability on the basis of volume if all of the responsible parties contributed the same hazardous material to the contaminated site or "it has been demonstrated, that independent factors had no substantial effect on the harm to the environment."22 This is what happened in In re Bell Petroleum Services, Inc.,23 where three entities released the same hazardous substance—chromium—to the environment and caused groundwater contamination "as the result of similar operations . . . at mutually exclusive times."24 The Fifth Circuit Court of Appeals found that there was "a reasonable basis for apportioning liability among the defendants on a volumetric basis" and therefore reversed the district court's judgment that was based on a contrary determination.25 A similar set of facts was presented in Gould, Inc. v. A&M Battery & Tire Service.26 That case involved a battery breaking facility. The court allocated 75% of the liability to the owner/operator of the facility and 25% to the battery sellers who sent batteries to the facility for processing. The battery sellers' 25% share of liability was allocated "in accordance with their attributed amount as indicated by the waste-in list."27 This volumetric allocation was appropriate because all of the battery sellers sent the same product—waste batteries—to the battery breaking facility.28 However, the facts of the Bell and Gould cases represent the exception rather than the rule. Unlike Bell and Gould, most cases involve parties who disposed of different hazardous substances, each of which may have a different effect on the environment and may require different cleanup technologies. For example, in Control Data Corp. v. S.C.S.C. Corp.,29 one party released 1,1,1 trichloroethane (TCA) into the environment while a neighboring party released perchloroethylene (PERC), also known as tetrachloroethylene. The contaminant plumes from these two neighbors merged and became indistinguishable, in part, because TCA and PERC degrade into many of the same substances. The Eighth Circuit Court of Appeals affirmed the district court's allocation of one-third of the liability to the PERC discharger even though PERC constituted only 10% of the contamination. The PERC discharger was assigned a proportionately [31 ELR 11101] higher share of liability because PERC was determined to be more toxic and more difficult to remediate than TCA. In some instances, volume becomes the primary factor in an allocation because of the absence of information concerning other relevant factors or because the other equitable factors do not favor one party over another. A good example is Davis.30 In that case, the court attempted to weigh the culpability of the parties but found relatively little meaningful distinctions among those parties falling within the generator and transporter groups (although the court found a greater degree of culpability on the part of the site owner and operator). The court also attempted to weigh other equitable factors unrelated to waste volume but could not effectively do so because of a lack of evidence. In light of these circumstances, the court allocated shares of liability to the three categories of responsible parties (generators, transporters, and owners/operators) on the basis of culpability and overall responsibility for the wastes but allocated liability within the generator and transporter categories on the basis of volume. The owner/operators were assigned 62.84% of the liability; three transporters were assigned 33.84%; and five generators were assigned 3.33%. Notwithstanding the inequities associated with volumetric allocations, volume is almost always the starting point for conducting Superfund allocations among waste generators (i.e., allocations that do not involve site owners and operators). In many cases, volume becomes the primary—and sometimes sole—factor used in these allocations.31 This is especially common for negotiated settlements with EPA, regardless of whether the settlements involve de minimis contributors or other, more significant contributors. It is less common for litigated allocations but, even in litigation, volume is usually a significant allocation factor. In the context of de minimis settlements with EPA, volume has become the only factor for establishing a settling party's so-called base payment, which is then multiplied by a "premium" to arrive at the settlement amount. This allocation methodology is established by EPA's 1995 formal guidance memorandum addressing de minimis settlements.32 According to EPA's guidance memorandum, "the base payment is normally developed by comparing the percentage of waste contributed to the estimated cleanup cost."33 In other words, the "base payment" is determined solely by waste volume or mass. This "base payment" is then increased by a premium, which is presumptively set at 100% for settlements without a remedy cost reopener or 50% for settlements with a remedy cost reopener. A more detailed discussion of settlement premiums is contained in the following section. When defendants settle out of a cost recovery action (or potential action), it is common for the settling defendants to pay some type of settlement premium as part of the resolution of the action. Settlement premiums can be used to account for many factors, including the risks of cost overruns assumed by the party accepting the settlement money, recalcitrance or lack of cooperation by the settling defendants, extraordinary damages or costs caused by the settling parties, uncertainties in the information upon which the settlement is based, etc. EPA specifically encourages a "premium payment" to be included in settlements involving the Agency if it is assuming responsibility for future remediation of a Superfund site.34 This allows a liable party, in many instances, to pay a premium to settle a claim and not be involved in future remediation or litigation. This type of premium accounts for, among other things, the risk EPA (or a responsible party) assumes in allowing the settling party out of (or to avoid) a lawsuit and rewards EPA (or a responsible party) for its efforts in cleaning up the site. EPA's position with respect to settlement premiums is set forth in a guidance memorandum issued in 1988. The guidance memorandum does not require any specific settlement premium amount, but rather suggests that the premium should be determined by evaluating the specific circumstances of each case. EPA encourages a relatively higher premium payment where the Agency gives a liable party a covenant not to sue without a cost reopener. A cost reopener allows EPA to seek additional contributions from the settling parties in the event of cost overruns. "EPA can guard against these cost overruns by reserving the right to seek reimbursement for any overruns or by requiring an up-front payment of a 'cost overrun' premium."35 Nearly seven years after issuance of the guidance document on premium payments, EPA issued a second guidance document, Standardizing the De Minimis Premium, which addresses premium amounts for settlements involving so-called de minimis parties.36 The guidance "is grounded in EPA's experience in completing more than 150 de minimis settlements, each of which was initially developed under the Agency's enforcement discretion, subjected to public notice and comments and, in the case of judicial settlements, approved by a court."37 Based on this experience, EPA reported that the most frequently assessed settlement premium for settlements that did not contain a cost reopener was 100%. The average settlement premium was 108%. These figures were "based on all settlements for which data [31 ELR 11102] was available at the time of the issuance of [the] guidance."38 For settlements containing a cost reopener, the guidance document provides less empirical data. This may be the result of a relatively smaller data set available for these types of settlements. According to the guidance document, "less than 10[%] of the settlements have contained a remedy cost reopener."39 Since the guidance was based on 150 total settlements, the data set for settlements without cost reopeners must have consisted of less than 15 settlements. Within this data set, "almost no settlement . . . assessed a premium of greater than 100[%], and at least one assessed no premium at all."40 Based upon these data and other relevant factors, EPA's de minimis premium guidance document establishes "presumptive premium figures and describes the most likely bases for deviating from such figures."41 The presumptive settlement premium for a settlement with a cost reopener is 100%. The presumptive settlement premium for a settlement without a cost reopener is 50%.42 Practical experience and published information about specific Superfund sites confirm the accuracy of the ranges of settlement premiums reported in EPA's guidance document.43 Critical Allocation Factors in Litigated Cases Having examined the two critical factors that are most often used in negotiated settlements, it is now appropriate to look to the published cases to evaluate the critical factors that determine the outcomes of most litigated allocation disputes. In negotiated settlements, a settlement premium often serves as a lump-sum surrogate for the other equitable factors that could be evaluated in greater detail if the matter were litigated. The four so-called critical factors of litigated allocation cases—causation, culpability, benefits received by the responsible party, and ability to pay—are examined below. These four factors are not the only factors that may be evaluated in litigated allocation disputes but these factors frequently serve as the primary factors upon which an allocation decision is based. In a perfect world, each party that contributes to an environmental problem would be required to pay the costs associated with its contribution to the problem. According to some courts, this is one of CERCLA's primary objectives—"to place the cost of [an environmental cleanup] response on those responsible for creating or maintaining the hazardous condition."44 Even the listing of separate allocation factors, such as the Gore factors, is intended to focus the decisionmaker on "the harm that each party causes the environment."45 Sometimes it is relatively easy to determine each party's contribution to the harm and to allocate liability using causation principles. In some cases, one party can fairly be determined to have caused all of the harm. For example, in American Color & Chemical Corp. v. Tenneco Polymers, Inc.,46 the court determined that "[polychlorinated biphenyls (PCBs)] were the contaminant of concern . . . and drove the remedy."47 One party—Tenneco—was "exclusively responsible for the release of PCBs at the site."48 Under these circumstances, the party responsible for causing the incurrence of response costs was assigned all of the liability for the cleanup costs. The reported decisions reflect that it is relatively common for the courts to determine that 100% of the liability for a particular site, or 100% of the liability for a particular portion of the cleanup costs at a particular site, should be allocated to the party that has caused the problem for which response costs have been incurred. The table of representative district court allocation decisions contained in Appendix A lists eight published decisions allocating all of the liability to one party (or group of parties) using CERCLA's equitable principles. A ninth decision allocated all of the liability to one party using state-law comparative fault principles.49 Even if a party is liable under CERCLA and has contributed to an environmental problem, the causation principle can be used to allocate a zero share of liability to that party if the party's contribution was minimal or inconsequential. For example, in Kalamazoo River Study Group v. Rockwell International,50 four paper companies sought contribution from Rockwell for response costs associated with PCB contamination at the Kalamazoo River Superfund site. Although Rockwell was determined to be a liable party, the court found that "Rockwell's PCB contribution was very minimal."51 In fact, the contribution was so minimal that it "did not exceed background levels and would not in itself have resulted in a need for remediation of the Kalamazoo River."52 Based on these facts, the court decided that Rockwell should not be assigned any share of liability for the cleanup costs. A similar result was reached by the district court, and affirmed by the Seventh Circuit Court of Appeals, in PMC, [31 ELR 11103] Inc. v. Sherwin-Williams Co.53 In that case, Sherwin-Williams was assigned 100% of the liability and PMC was assigned 0% even though PMC was responsible for some spills of hazardous substances. The court assigned a 0% share of liability to PMC because PMC's spills were "too inconsequential to affect the cost of cleaning up significantly."54 If undisputed facts establish that a party's contribution to the harm was immaterial (and no other equitable factors are relevant or disputed), then the party's share of liability can be summarily adjudicated. This has been done by one district court, in an unpublished order.55 But the order was not reviewed by an appellate court. This fact, together with the unpublished status of the decision, gives it little precedential value for other cases. Nevertheless, there should be no doubt that the summary judgment procedure may be used in appropriate cases to allocate liability on the basis of causation.56 Most cases do not involve clearcut facts demonstrating that one party has caused all of the harm or that another party has caused none of the harm. In many instances, there are multiple parties who have each caused or substantially contributed to the environmental harm. In those instances, all of the liability cannot fairly be assigned to a single party. Instead, equity requires an allocation in accordance with each party's contribution to the harm. But is it often difficult, or even impossible, to determine each party's relative contribution to the environmental problem. This reality should not stop the courts and private parties from using "causation" as an important factor in allocation analyses. Indeed, in many cases, it is essential to consider causation in order to achieve a rough justice that will achieve CERCLA's objectives and maintain a reasonable degree of public confidence in the judicial system's ability to do equity in complex environmental cases. The use of causation principles in allocation proceedings tempers CERCLA's harsh, and sometimes inequitable, strict liability standard.57 An example of a case involving the use of causation principles is Bancamerica Commercial Corp. v. Trinity Industries, Inc.58 In that case, the court allocated various costs associated with remediation of a former lead smelter and steel fabrication facility. The court carefully segregated costs associated with specific activities—such as the removal of barrels, asbestos remediation, and remediation of lead in the soil—and allocated the costs to the parties whose conduct caused the problem that required each type of remediation. For example, the court found that the barrels and their contents were left at the site by one party.59 Accordingly, all of the costs of the barrel removal were allocated to that party. On the other hand, the court found no evidence that any of the defendants were responsible for any releases of asbestos, so it allocated no liability for asbestos remediation costs to any ofthe defendants.60 With respect to remediation of lead in the soil, the court found that defendants contributed 1% of the total lead in the soil but allocated 5% of the costs to them because the form of lead (paint and smelter ash) was "more toxic" than the lead found in slag and "no doubt influenced the design of the remediation method and contributed to increased costs."61 Another example of a case involving the use of causation for allocating costs is Control Data Corp.,62 which is discussed more fully in the text above. In that case, a defendant who contributed only 10% of the total volume of contamination was assigned a 33 1/3% share of liability because the contaminant released by the defendant—PERC—was determined to be more difficult (and hence more expensive) to remediate than the contaminant released by the plaintiff. The relative culpability of each party is widely regarded as one of the most critical factors to be considered in an equitable allocation of liability. The Seventh Circuit Court of Appeals has declared that "courts should equitably allocate costs of cleanup according to the relative culpability of the parties."63 Similarly, the Fourth Circuit Court of Appeals has stated that CERCLA's contribution provision "reveals Congress' concern that the relative culpability of each responsible party be considered in determining the proportionate share of costs each must bear."64 There are several reported decisions in which culpability was used to justify an upward adjustment in a party's equitable share of liability. In Browning-Ferris Industries of Illinois, Inc. v. Ter Maat,65 for example, the district court allocated a relatively large 40% share of liability to one operator (Browning-Ferris) even though prior operators had "operated the landfill for a lot longer time and had dumped a much larger quantity of wastes in it."66 The court assigned a proportionately greater share of liability to the operator, in part, [31 ELR 11104] because the operator "operated the landfill poorly and had dumped particularly toxic wastes . . . in violation of its operating permit."67 Similarly, in Farmland Industries, Inc. v. Colorado & Eastern Railroad Co.,68 one party's culpability was a prominent factor in the court's allocation decision. In that case, a berm washout allowed contaminated soil from a pesticide formulating plant to spread into previously uncontaminated areas. The court found that the property owners: "Acted unreasonably in response to the berm washout. They could have fixed the berm immediately, but did not. They could have granted [another responsible party] and the EPA access to remediate immediately, but they did not."69 In addition, the court believed that the owners were "engrossed with how to avoid any responsibility for the cleanup" and diverted assets to other entities "in an effort to avoid paying any remedial costs."70 Even though the property owners were not the cause of the berm washout, the court allocated 85% of the costs associated with the washout to them. In many cases, however, there are no parties whose conduct is significantly more culpable than the conduct of the other parties. In those cases, the courts have gone beyond a search for culpable conduct and have attempted to assess the relative degrees of cooperation exhibited by the parties. Culpability and cooperation can be thought of as flip sides of the same coin. Culpability is bad conduct that warrants an increase in a party's allocated share of liability.71 Cooperation is good conduct that warrants a decrease in the share of liability. The relative degrees of cooperation by the responsible parties was used as an allocation factor in Central Maine Power Co. v. F.J. O'Connor Co.72 In that case, the court was called upon to allocate liability for cleanup costs associated with an electrical scrap facility. There were three parties (or groups of parties): a major generator (Central Maine Power or CMP) who sent considerably more electrical scrap to the site than anyone else; a second generator (Westinghouse) who sent considerably less scrap to the site but whose cooperation did not rise to the level of the other parties; and a group of former owners and operators of the scrap facility (the O'Connors). The court lauded CMP's cooperation, calling it "exemplary." CMP's cooperation included taking ownership of the contaminated property, entering into a consent decree with EPA, and completely funding the cleanup efforts that had been undertaken as of time of the lawsuit. The O'Connors were deemed to be cooperative even though they were not parties to the EPA consent decree. Their cooperation consisted of interaction with the state Department of Environmental Protection and conveying the property to CMP in order to facilitate cleanup efforts. Westinghouse's cooperation was determined to be less than that of the other parties. Westinghouse chose not to participate in the consent decree negotiations and did not pay any of the cleanup costs incurred as of the time of the lawsuit. In light of Westinghouse's relative lack of cooperation, it was assigned a disproportionately higher share of liability. The court allocated liability as follows: 46.5% to CMP; 41% to Westinghouse; and 12.5% to the O'Connors.73 The court labeled the cooperation factor as being "very important" in the allocation process.74 Cooperation was also an important allocation factor in United States v. R.W. Meyer, Inc.75 In that case, the district court allocated liability among a facility owner who claimed to be an innocent landlord, and a facility operator who was "the primary actor in allowing this site to become contaminated."76 However, the purportedly innocent landlord "neither assisted nor cooperated with the EPA officials during their investigation and eventual cleanup of the . . . site."77 Apparently relying on the landlord's lack of cooperation, the district court allocated one-third of the liability to the landlord and two-thirds to the tenant (with the two-thirds split equally between the corporate tenant and its sole shareholder who personally managed the day-to-day operations). The parties' relative degrees of "care and cooperation" also played an important role in United States v. Alcan Aluminum Corp.78 In that case, the court allocated liability among two parties: Cornell University and Alcan. The volumetric contributions of the two parties, relative to each other, were 88% from Alcan and 12% from Cornell. However, the court found that "Cornell demonstrated a greater degree of care and cooperation than did Alcan."79 Based on the greater degree of care and cooperation of Cornell, the court allocated Cornell an equitable share of 6% of the liability. Lack of cooperation was also cited by the court in Dent v. Beazer Materials & Services, Inc.80 as a material factor in supporting an allocation of 100% of the liability to the noncooperating party. Although there were other important factors, including the causation factor, that weighed heavily in favor of the 100% allocation, the lack of cooperation seemed to seal the fate of the noncooperating party. The court specifically noted that "the record indicates that [the responsible party] consistently failed to cooperate with state officials in dealing with the contamination."81 A more modest upward adjustment for lack of cooperation is reflected in Ekotek Site PRP Committee v. Self.82 In that case, a defendant failed to respond to two separate requests, issued by EPA pursuant to CERCLA § 104(e), for information. The court agreed with the plaintiff's argument that the defendant's "share should be adjusted to account for its recalcitrance in failing to respond to the EPA's [§] 104(e) information requests," but the court concluded that the "adjustment should be minor" because the "plaintiff Committee and the remediation process suffered little prejudice as a result" of the defendants' recalcitrance.83 Some courts have tweaked the cooperation factor (or created a slightly different allocation factor) by looking for a responsible party's willingness to accept legal responsibility for the contamination. These courts have examined the parties' "willingness to accept responsibility for remediating the harm."84 This is what happened in United States v. Vertac Chemical Corp.,85 where a party who was responsible for 1.76% of the production of herbicides at a contaminated facility was assigned a larger share of liability—2.6% or approximately 1.48 times its volumetric share—on account of an "upward departure" that the court determined to be appropriate under the facts of the case. The "upward departure" was warranted, in part, because the responsible party did not respond to an administrative order issued by EPA under CERCLA § 106. The responsible party argued that it could properly disregard the order because the party's liability had not yet been determined. But the court concluded that the party's failure to respond to the order was unjustified because published case law indicated that the party would eventually be found liable. Notwithstanding the analysis of the Vertac Chemical decision, a party's willingness to accept responsibility should not automatically be considered to be the same thing as "cooperation." Not should a party's decision to contest liability be considered to be "culpability." A party can contest its liability and still be nonculpable and even cooperative. However, the standards for determining a party's liability under CERCLA are now relatively well established by case law. In cases where liability is clear under existing standards, a court of equity may consider the party's refusal to accept legal responsibility for its conduct as a factor justifying a greater share of liability. But in cases where liability is not clear, a party ought not to be penalized for contesting its liability. The Benefits Received by the Parties From Their Conduct If a party has benefitted from the conduct that caused contamination, it is only fair that the benefits be taken into account in apportioning liability. This concept is, to some degree, an extension of the principle, reflected in CERCLA's legislative history and in early CERCLA case law, that "polluters . . . should bear the majority of the costs incurred in cleaning up their waste."86 It is also a reflection of the common belief that "polluters" often make the choice to pollute because they can make more money by being lax in their environmental responsibilities.87 However, in light of the huge costs associated with noncompliance with modern environmental laws and standards, it is doubtful that anyone could find much current empirical support for this common belief. Nevertheless, it is important for a court of equity to carefully scrutinize any benefits received from conduct causing contamination and to weigh those benefits in allocating liability under CERCLA. This factor was cited by the court in Beazer Materials & Services88 as one of the justifications for allocating 100% of the liability to the former operator of a wood treatment facility. According to the court, the operator "realized significant economic benefits by failing to implement waste control measures which [the] court [felt] would have eliminated a significant portion of the contaminated releases."89 Expert testimony quantified the operator's savings at approximately $ 16 million. There were other factors—including the causation factor—that also justified the 100% allocation of liability to the former operator, but the operator's apparent choice to scrimp on its environmental controls was a significant concern to the court. The economic benefits were also considered by the court in United States v. Shell Oil Co.90 In that case, the court allocated liability for the McCall Superfund site among the United States and various oil companies. The McCall site contained wastes from the manufacture of aviation gasoline and other refinery products used during World War II. The United States and the oil companies were all determined to be liable parties under CERCLA. The United States argued that the oil companies received profits and other economic benefits from the manufacturing of the aviation gasoline and other products. The United States argued that these benefits constituted "an equitable factor to be counted against the oil companies."91 However, the court elected not to assign any significance to the profits and other benefits obtained by the oil companies. Under the unique facts of the case—involving war production contracts and statutorily mandated renegotiations of wartime contracts—the court was confident that the oil companies did not receive any undue benefits from the production of products used in the war. Moreover, the court concluded that "the war caused the [environmental] problem and like myriad others, the burden must rest on the United States, which is all of us."92 Accordingly, the court allocated 100% of the liability to the United States. The economic benefits factor was also considered by the court in Pneumo Abex Corp. v. Bessemer & Lake Erie Railroad [31 ELR 11106] Co.93 In that case, the court considered evidence of the "substantial economic benefits" received by railroad companies from their use of a foundry used to convert used bearings into new bearings.94 The court weighed those benefits against the profits earned by the foundry. The court found that "the benefits received do not sharply distinguish the liability" of the two groups (the railroad companies and the foundry owners) because "both parties profited from the arrangement."95 Accordingly, the court concluded that "this equitable factor militates in favor of finding Plaintiffs and Defendants equally liable for the costs of cleanup."96 Using this factor, and others, the court assigned 50% of the liability to the railroad companies and 50% to the foundry owners. A party's ability to pay is another factor that has been frequently cited as an appropriate factor to be considered in judicially determined allocations, although the precise role of this factor is generally less well-defined, and more controversial, than the other factors. For example, the Second Circuit Court of Appeals has simply stated that "the financial resources of the parties" is one of the equitable factors that may be considered in the allocation process.97 But there are few published decisions that actually apply the factor or discuss its significance in any-meaningful way. There are even cases in which district court judges have exercised their discretion to consider this factor irrelevant to an allocation of Superfund liability. One case in which the ability to pay was used in the allocation of liability is the Central Maine Power case.98 In that case, the court noted that "the relative financial resources of the parties" was a relevant factor and identified two of the three parties as being "better situated financially to absorb the substantial expense of this clean-up."99 The court's allocation decision—46.5% to a major generator with substantial assets, 41% to a minor generator with substantial assets, and 12.5% to the former facility operator with less assets—suggests that thecourt reduced the equitable share of one party (the former operator) based on its relative financial position as compared with the other parties. But the court's opinion does not provide any insight into the amount by which the former operator's equitable share was reduced or the amounts by which the other parties' equitable shares were increased. Another case involving an analysis of the parties' ability to pay is Pneumo Abex Corp., Inc.100 In that case, the court allocated liability between a small group of plaintiffs and a larger group of defendants. The plaintiff group included both municipalities and private parties, some with substantial assets. The defendant group included private parties with substantial assets. In the allocation trial, the court admitted into evidence the financial statements of various parties. In addition, the court conducted its own research concerning the financial condition of other parties. In the end, however, the court concluded that "nothing in the record suggests that any of the parties are unable to pay a share of the costs of cleanup."101 Hence, the court concluded that "this factor . . . counsels in favor of Plaintiffs and Defendants sharing the liability equally."102 The court's decision split the liability equally between the two groups. Even though Judge Torres in Davis identified a party's ability to pay as one of the four critical allocation factors, other judges have elected to disregard this factor altogether. Many of the published allocation decisions do not even address the parties' ability to pay. Some decisions go a step further and suggest that the parties' relative financial positions are irrelevant. For example, in Alcan Aluminum Corp.,103 the court was asked to allocate liability between two parties, Cornell University and Alcan Aluminum Corporation. Cornell argued that the court should "take into consideration the fact that [Cornell] is an eleemosynary institution, and that the Canadian parent of Alcan has assets totaling $ 10.6 billion and Alcan itself has assets totaling approximately $ 336.2 million."104 The court rejected this argument and concluded that these facts were irrelevant to an equitable allocation of liability. According to the court, "specialized treatment [of Cornell] would be inequitable and would frustrate the Congressional purpose of allowing parties such as Alcan to seek contribution from other responsible parties."105 In lieu of directly evaluating a party's ability to pay, and incorporating that factor into an allocation decision, there is another mechanism for dealing with a party's inability to pay its full equitable share of liability. That mechanism is to assign equitable shares to all parties without regard to ability to pay and, if a party thereafter is unable to pay its full share, it becomes an "orphan share" that is divided among the remaining parties.106 But this mechanism has the potential effect of requiring a relatively poor party to use all of its assets to pay its share of the allocation. Hence, this mechanism should be used only if the court determines that it is appropriate to allow a party to be driven into insolvency by the allocation decision. There are undoubtedly instances in which such an outcome is equitable but it may not be equitable in every case. The district court has discretion under CERCLA to determine if it is appropriate to allow an allocated share of liability to drive a party into insolvency. CERCLA's contribution provision does not require a district court to use any particular procedure when making an allocation decision. Most practitioners assume that due to the wide range of equitable factors that a court may consider in allocating liability, a court will almost always need to conduct a trial to allocate liability. They also assume that the [31 ELR 11107] trial will be long and complex because a full airing of all equitable factors must be made. These assumptions are not entirely unfounded. They are largely based on experience. The district courts have conducted several of these long, complicated trials, including a 26-day bench trial in Davis,107 a 17-day bench trial in Bancamerica Commercial Corp. v. Mosher Steel of Kansas, Inc.,108 a 17-day bench trial in Gould, Inc.,109 a 10-day bench trial in Ekotek Site PRP Committee,110 a 10-day bench trial in Horsehead Industries, Inc. v. St. Joe Minerals Corp.,111 and a 6-day bench trial in Pneumo Abex Corp.,112 among others. It is truly an understatement to declare that the costs—to the litigants and to the courts—"of litigating such claims is substantial."113 However, the assumption that a long trial is necessary to allocate CERCLA liability will not be correct in every instance. In light of the court's discretion to determine which equitable factors are appropriate for allocating liability in any given case, there will be instances in which a court may allocate liability in a short trial limited to those issues that thecourt determines are relevant and material.114 The court has considerable discretion under Rule 403 of the Federal Rules of Evidence to exclude evidence that the court believes is not critical to the allocation factors and will create undue delay or waste the court's time. In certain circumstances, a court may even be able to allocate liability using motions for summary judgment or other procedures that fall short of a full trial. At a minimum, "a defendant in a contribution action is entitled to summary judgment if it can demonstrate that, on the undisputed facts, it would not be equitable to require the defendant to reimburse the plaintiff for a portion of the plaintiff's response costs."115 The summary judgment procedure will also be appropriate in other circumstances. For example, the summary judgment procedure was used in Northernaire Plating Co.,116 where the court allocated two-thirds of the liability to the operator of a metal electroplating business, and one-third to the property owner. The summary judgment procedure was also used in United States v. Montrose Chemical Corp. of California117 to determine the equitable share of one party. In that case, the court allocated 0% of the liability to a party whose relative contribution to the problem was determined to be insubstantial. The summary judgment procedure is unavailable to allocate liability in cases involving disputed issues of material fact. But since the district court has discretion to determine the factors to be considered in an allocation of liability, the court undoubtedly has some discretion to determine which disputed facts, if any, are material to the allocation issue. Summary judgment will not be appropriate in every (or even most) cases, but with the development of a substantial body of case law under CERCLA, the summary judgment procedure can probably be used more frequently than it has in the past. Another procedure that has been used to conserve the time of the district court is the referral of the allocation proceeding to a magistrate judge or a special master. However, in the absence of other procedures to simplify the allocation proceeding, the referral to a magistrate judge will, in many instances, increase the time and expense required to complete the allocation process. The parties will first litigate the allocation issue with the magistrate judge and then seek independent review by the district court judge. This is precisely what happened in Beazer East, Inc. v. Mead Corp.,118 where the parties first conducted a 12-day trial (or "hearing," using the court's term) involving 14 witnesses and approximately 1,300 exhibits. The district judge then conducted an independent review of the entire record, assisted by additional briefing and argument by the parties. This type of procedure—a full trial by a magistrate judge, followed by independent review by the district court—may be more efficient for the district judge, but it is not efficient for the parties and it does not lead to the prompt resolution of allocation disputes. This procedure inevitably results in a more expensive and time-consuming allocation process.119 In light of the time and expense usually required to obtain a judicial allocation of Superfund liability, it is not surprising that many groups of responsible parties seek to resolve their allocation disputes using various forms of alternative dispute resolution (ADR). ADR is particularly popular among waste generators involved in allocation disputes concerning landfills or other waste disposal sites. ADR can significantly reduce the time and expense associated with allocation disputes. But if judicial allocations only provide rough justice, ADR usually provides a rougher-even "roughshod"—measure of justice.120 In addition, the old adage about only getting what you pay for is fully applicable to ADR of allocation disputes. Even if parties do not wish to use ADR for resolution of allocation disputes, they can simplify the allocation process and conserve scarce judicial resources by agreeing, in appropriate cases, to submit the allocation issue to the court on [31 ELR 11108] a written record without the need for the court to hear live testimony. Alternatively, the parties can agree to limit their presentations to a small number of witnesses who will testify in person, while submitting other written evidence. The court may order, or the parties may agree, that direct testimony will be submitted in written form, with the witnesses then subject to cross-examination and redirect in open court.121 As the body of case law and other experience continues to grow, these procedural alternatives should be more acceptable to parties, and they can allow courts and parties to obtain resolution of difficult allocation problems in a more cost-effective manner. CERCLA was enacted two decades ago. In the earliest days of its existence, CERCLA created much confusion among potentially liable parties and their counsel. There was confusion about the scope of liability and the extent to which liable parties could obtain contribution. After CERCLA was amended in 1986, and the right to contribution was confirmed by enactment of 42 U.S.C. § 9613, there was uncertainty about how the courts would allocate liability. In the 15 years that have followed, a substantial body of allocation case law has emerged. The case law does not remove all uncertainty but it does provide considerable guidance concerning (1) the critical factors that will be evaluated in the allocation process, and (2) the likely range of outcomes that can now be expected in a judicially determined allocation of liability. Equally important, there is now a substantial body of experience with respect to negotiated settlements and allocations obtained through ADR. Ranges of settlement premiums are widely known, and presumptive premiums exist. These bodies of knowledge enable sophisticated parties and experienced counsel to more accurately predict likely outcomes of allocation disputes. This, in turn, should lead to less judicially determined allocations. Cases with unusual fact patterns are still likely to be litigated (or arbitrated) but many "typical" allocation disputes can be resolved outside of the judicial system. Even cases within the judicial system may be more efficiently resolved through streamlining procedures available to the court and the parties. The Superfund allocation process is not perfect. The results obtained from the process are not perfect. In particular, negotiated settlements with EPA and allocations obtained through ADR frequently follow set formulas and use presumptive settlement premiums that are not perfectly applicable to the facts of each case. True equity conforms to no standard formulas. Nevertheless, the collective body of allocations achieved to date reflect a rough justice that is largely consistent with the congressional directive to allocate Superfund liabilities in an equitable fashion. APPENDIX A Table of Representative District Court Decisions Allocating Superfund Liabilities
APPENDIX B Table of Representative Appellate Decisions Reviewing Allocations of Superfund Liabilities
2. Control Data Corp. v. S.C.S.C. Corp., 53 F.3d 930, 934, 25 ELR 21378, 21379 (8th Cir. 1995). 3. United States v. Davis, 31 F. Supp. 2d 45, 63, 29 ELR 20441, 20447 (D.R.I. 1998). See also City of Toledo v. Beazer Materials & Servs., Inc., 923 F. Supp. 1013, 1023 (N.D. Ohio 1996) ("Contribution actions among parties held jointly and severally liable under CERCLA often involve complex factual scenarios associated with multiparty liability and necessarily require courts to perform a case-by-case evaluation when allocating the cost of clean-up for hazardous waste."). 4. Ridgeway M. Hall, Superfund Response Cost Allocations: The Law, the Science, and the Practice, 49 BUS. LAW. 1489 (1994). 5. See United States v. Colorado & E.R.R., 50 F.3d 1530, 1536 n.5, 25 ELR 20309, 20312 n.5 (10th Cir. 1995). 6. Control Data Corp., 53 F.3d at 935, 25 ELR at 21380. 7. United States v. R.W. Meyer, Inc., 932 F.2d 568, 572, 21 ELR 21062 (6th Cir. 1991). 8. Id. 9. Colorado & E. R.R., 50 F.3d at 1536, 25 ELR at 20312 (quoting Environmental Transp. Sys., Inc. v. ENSCO, Inc., 969 F.2d 503, 509, 22 ELR 21361, 21363 (7th Cir. 1992)). 10. Colorado & E. R.R., 50 F.3d at 1534, 25 ELR at 20311 ("'Causation' in the context of this case means whether [defendant] caused the increase in the expense of remediation. If it did, that would be an equitable factor for the court to consider under [§] 113(f)(1)."). 11. Weyerhaeuser Co. v. Koppers Co., Inc., 771 F. Supp. 1420, 1426, 22 ELR 20168, 20171 (D. Md. 1991); Cadillac Fairview/Cal., Inc. v. Dow Chem. Co., No. 83-8034 MRP, 1997 U.S. Dist. LEXIS 3083, at *45-46 (C.D. Cal. Feb. 19, 1997). 12. Id. 13. Minyard Enters., Inc. v. Southeastern Chem. & Solvent Co., 184 F.3d 373, 387, 29 ELR 21369, 21374 (4th Cir. 1999). 14. Id. 15. Id. See also Dent v. Beazer Materials & Servs., Inc., 993 F. Supp. 923, 951 (D.S.C. 1995) ("Beazer will also realize an economic benefit from remediation of this site since it or its designee will acquire the Dent property as part of the settlement agreement between the two parties and will receive the benefit of its expenditure of response costs."). 16. Cadillac Fairview/Cal., Inc., 1997 U.S. Dist. LEXIS 3083, at *44. 17. See, e.g., B.F. Goodrich Co. v. Murtha, 958 F.2d 1192, 1206, 22 ELR 20683, 20690 (2d Cir. 1992); Central Me. Power Co. v. F.J. O'Connor Co., 838 F. Supp. 641, 645, 24 ELR 20743, 20744 (D. Me. 1993). 18. Cadillac Fairview/California, Inc., 1997 U.S. Dist. LEXIS 3083 at *45. 19. 31 F. Supp. 2d 45, 63, 29 ELR 20441, 20447 (D.R.I. 1998). 20. 207 F.3d 1177, 1188, 30 ELR 20423, 20427 (9th Cir. 2000). 21. Id. See also United States v. Monsanto Co., 858 F.2d 160, 172-73, 19 ELR 20085, 20090 (4th Cir. 1988), cert. denied, 490 U.S. 1106 (1989): Common sense counsels that a million gallons of certain substances could be mixed together without significant consequences, whereas a few pints of others improperly mixed could result in disastrous consequences. Under other circumstances proportionate volumes of hazardous substances may well be probative of contributory harm. In this case, however, volume could not establish the effective contribution of each waste generator to the harm at the . . . site. 22. Monsanto Co., 858 F.2d at 173, 19 ELR at 20090. 23. 3 F.3d 889, 903-04, 23 ELR 21474, 21478-80 (5th Cir. 1993). 24. Id. at 903, 23 ELR at 21479. 25. Id. at 904, 23 ELR at 21479-80. 26. 987 F. Supp. 353, 28 ELR 20277 (M.D.Pa. 1997), vacated, 232 F.3d 162, 31 ELR 20251 (3d Cir. 2000). 27. Gould, Inc., 987 F. Supp. at 372, 28 ELR at 20285. 28. Another similar case is Horsehead Industries, Inc. v. St. Joe Minerals Corp., 1996 U.S. Dist. LEXIS 22493 (N.D. Okla. 1996), where liability for cleanup costs associated with a zinc smelter were allocated on the basis of the volume of smelting conducted by the facility operators. As noted by the plaintiffs in that case: "The same hazardous substances are being addressed and each party engaged . . . in the recovery of zinc. Thus, the time of use and volume of production—i.e., 'retort years'—provides an appropriate place in which to initiate an equitable allocation approach." Id. at *25. 29. 53 F.3d 930, 25 ELR 21378 (8th Cir. 1995). 30. 31 F. Supp. 2d at 45, 29 ELR at 20441. 31. See ENVIRONMENTAL ASPECTS OF REAL ESTATE TRANSACTIONS 8 (James B. Witkin ed., 2d ed. 1999): When information on volume is available, liability among generator [potentially responsible parties (PRPs)] is most commonly allocated on a volumetric basis. When 'waste-in' information does not exist, parties either (1) reconstruct volume figures by examining various factors, such as production or number of employees, or (2) allocate liability on a tiered basis or some other basis. 32. U.S. EPA, STANDARDIZING THE DE MINIMIS PREMIUM (July 7, 1995), available at http://es.epa.gov/oeca/osrc/950707.html (also available from the ELR Document Service, ELR Order No. AD-3206). A de minimis party is one who disposes of a "small amount" of waste compared to the total volume of waste at a site. There is no definitive rule for determining how small "a small amount" must be before a party will be deemed to be a de minimis party. According to the 1995 memorandum, which evaluated over 100 de minimis settlements, the waste volume cutoff for de minimis status varied from .07% to 10%, with an average of 1.05%. 33. Id. at 3. 34. U.S. EPA, GUIDANCE ON PREMIUM PAYMENTS IN CERCLA SETTLEMENTS, OSWER Directive No. 9835.6 (Nov. 17, 1988), available at http://es.epa.gov/oeca/osre/88117.html (also available from the ELR Document Service, ELR Order No. AD-563). 35. Id. at 5. 36. STANDARDIZING THE DE MINIMIS PREMIUM, supra note 32. 37. Id. at 3. 38. Id. at 5 n.8. 39. Id. at 5. 40. Id. 41. Id. at 1. 42. For settlements with so-called de micromis parties (parties who contributed even less waste than the de minimis parties), EPA states that no premium should be imposed because the purpose of this type of settlement is to release the very small contributors from the action. Thepolicy is that it would be inequitable and unfair to seek any significant contribution from these types of generators. See U.S. EPA, GUIDANCE ON CERCLA SETTLEMENTS WITH DE MICROMIS WASTE CONTRIBUTORS, OSWER Directive No. 9834.17 (July 30, 1993) ADMIN. MAT. 35566 (also available from the ELR Document Service, ELR Order No. AD-3273). 43. See, e.g., De Minimis Settlements, THE INFORMATION NETWORK FOR SUPERFUND SETTLEMENTS (Morgan, Lewis & Bockius), Feb. 1, 1995, at DM-1-40. 44. United States v. Mexico Feed & Seed Co., 980 F.2d 478, 486, 23 ELR 20461, 20463 (8th Cir. 1992). See also Kalamazoo River Study Group v. Rockwell Int'l, 107 F. Supp. 2d 817, 822 (W.D. Mich. 2000) ("CERCLA seeks to place the cost of [cleanup] on those responsible for creating or maintaining the hazardous condition"); Beazer E., Inc. v. Mead Corp., No. 91-408, 2000 U.S. Dist. LEXIS 4282, at *10 (W.D. Pa. Mar. 7, 2000) ("one of [CERCLA's] principal concerns is assuring that those who are responsible for environmental conditions bear the costs of remedying those conditions"). 45. Control Data Corp. v. S.C.S.C. Corp., 53 F.3d 930, 935, 25 ELR 21378, 21380 (8th Cir. 1995). 46. 918 F. Supp. 945, 26 ELR 21261 (D.S.C. 1995). 47. Id. at 959, 26 ELR at 21268. 48. Id. 49. United States v. Stringfellow, No. CV-83-2501, 1998 U.S. Dist. LEXIS 21497 (C.D. Cal. Sept. 11, 1998). 50. 107 F. Supp. 2d 817 (W.D. Mich. 2000). 51. Id. at 840. 52. Id. 53. No. 93-C-1379, 1997 U.S. Dist. LEXIS 6013 (N.D. Ill. Apr. 23, 1997), aff'd, 151 F.3d 610, 28 ELR 21568 (7th Cir. 1998), cert. denied, 525 U.S. 1104 (1999). 54. 151 F.3d at 616, 28 ELR at 21570. 55. United States v. Montrose Chem. Corp. of Cal., No. CV-90-3122 R (C.D. Cal. 2000) (unpublished order entered Sept. 20, 2000). 56. See Environmental Transp. Sys., Inc. v. Ensco, Inc., 969 F.2d 503, 22 ELR 21361 (7th Cir. 1992) (summary judgment allocating 100% of liability to trucking company responsible for an accident causing a release of PCBs affirmed). See also John M. Hyson, The Plaintiff's Burden in CERCLA Contribution Actions: Unscrambling the First Circuit's Acushnet Decision, 31 ELR 10180, 10200-01 (Feb. 2001). 57. See, e.g., B.F. Goodrich Co. v. Murtha, 958 F.2d 1192, 1206, 22 ELR 20683, 20690 (2d Cir. 1992) (in affirming the district court's denial of municipalities' motion for summary judgment, the court of appeals noted that the amount of liability imposed on municipalities "will not necessarily be a function solely of the total volume of municipal waste disposed of in the landfills, but rather will be a function of the extent to which municipal dumping of hazardous substances both engendered the necessity, and contributed to the costs, of cleanup"). 58. 900 F. Supp. 1427, 26 ELR 20757 (D. Kan. 1995), aff'd in part & rev'd in part, 100 F.3d 792, 27 ELR 20397 (10th Cir. 1996). 59. 900 F. Supp. at 1448, 26 ELR at 20765 ("Based on the weight of the evidence, the court finds that the barrels and their contents were left at the Site by Trinity."). 60. Id. at 1462, 26 ELR at 20773 ("Plaintiffs have not presented any evidence to show that Trinity and Mosher Steel were in any way responsible for the bricks or that a 'release' of asbestos occurred during the time that Trinity and Mosher Steel operated the facility."). 61. Id. at 1474, 26 ELR at 20779. 62. 53 F.3d at 930, 25 ELR at 21378. 63. Environmental Transportation Systems, Inc. v. ENSCO, Inc., 969 F.2d 503, 508-09, 22 ELR 21361, 21363 (7th Cir. 1992). 64. United States v. Monsanto Co., 858 F.2d 160, 173 n.29, 19 ELR 20085, 20090 (4th Cir. 1988), cert. denied, 490 U.S. 1106 (1989). 65. 195 F.3d 953, 30 ELR 20135 (7th Cir. 1999), cert. denied, 529 U.S. 1098 (2000). 66. Id. at 957-58, 30 ELR at 20135. 67. Id. at 957-58, 30 ELR at 20137. 68. 944 F. Supp. 1492 (D. Colo. 1996). 69. Id. at 1496. 70. Id. at 1500. 71. Unfortunately, however, some courts have used the term "culpability" to refer to conduct that has caused environmental contamination, even if the conduct was entirely legal, proper, and nonnegligent. See, e.g., Hatco Corp. v. W.R. Grace & Co., 849 F. Supp. 931, 973, 25 ELR 21149, 21169 (D.N.J. 1994) ("The court immediately recognizes that certain of the remediation costs incurred by Hatco are not readily allocable via the existing apportionment mechanism—degree of culpability within a specific AEC."). Use of the term "culpability" in this context is confusing and should be discontinued. This kind of "culpability" is really "causation," not culpable conduct. 72. 838 F. Supp. 641, 24 ELR 20743 (D. Me. 1993). 73. The court made an exception for future cleanup costs directly attributable to lead contamination. The allocation for those costs was 67% to CMP and 33% to the O'Connors. This exception was made because Westinghouse did not contribute to the lead contamination. 74. 838 F. Supp. at 646, 24 ELR at 20745. In addition to cooperation, it also appears that the relative financial resources of the parties played an important in the allocation of liability in the Central Maine Power case. This factor is discussed more fully below, see infra notes 97-106 and accompanying text. 75. 932 F.2d 568, 571, 21 ELR 21062, 21063 (6th Cir. 1991). 76. Id. 77. Id. 78. No. 87-CV-920, 1991 U.S. Dist. LEXIS 18721 (N.D.N.Y. Dec. 27, 1991). 79. Id. at *14. 80. 993 F. Supp. 923 (D.S.C. 1995). 81. Id. at 951. 82. 1 F. Supp. 2d 1282, 28 ELR 21480 (D. Utah 1998). 83. Id. at 1304, 28 ELR at 21489. 84. United States v. Davis, 31 F. Supp. 2d 45, 65, 29 ELR 20441, 20448 (D.R.I. 1998). 85. 79 F. Supp. 2d 1034 (W.D. Ark. 1999). 86. United States v. Northernaire Plating Co., 20 ELR 20200 (W.D. Mich. Sept. 18, 1989). 87. See RICHARD A. POSNER, ECONOMIC ANALYSIS OF LAW 310-11 (2d ed. 1977): There are economic reasons for questioning both the feasibility and appropriateness of major corporate commitments to social goals other than profit maximization. . . . The firm that channels profits into (say) pollution control will not be able to recoup its losses by charging higher prices to its customers . . . . The firm will therefore have to defray the expenses of pollution control entirely out of its profits. 88. 993 F. Supp. at 951. 89. Id. 90. 13 F. Supp. 2d 1018, 1028-39, 29 ELR 20027, 20031-32 (C.D. Cal. 1998). 91. Id. at 1029, 29 ELR at 20031. 92. Id. at 1030, 29 ELR at 20032. 93. 936 F. Supp. 1250, 27 ELR 20230 (E.D. Va. 1996). 94. Id. at 1271, 27 ELR at 20239. 95. Id. at 1272, 27 ELR at 20240. 96. Id. 97. B.F. Goodrich Co. v. Murtha, 958 F.2d 1192, 1206, 22 ELR 20683, 20690 (2d Cir. 1992). 98. 838 F. Supp. 641, 24 ELR 20743 (D. Me. 1993). 99. Id. at 647, 24 ELR at 20745. 100. 936 F. Supp. at 1250, 27 ELR at 20230. 101. Id. at 1273, 27 ELR at 20240. 102. Id. 103. No. 87-CV-920, 1991 U.S. Dist. LEXIS 18721. 104. Id. at *11. 105. Id. at *11-12. 106. See, e.g., Pinal Creek Group v. Newmont Mining Corp., 118 F.3d. 1298, 1303, 27 ELR 21211, 21213 (9th Cir. 1997), cert. denied, 524 U.S. 1106 (1998) ("The cost of orphan shares is distributed equitably among all PRPs, just as cleanup costs are."). 107. 31 F. Supp. 2d at 45, 29 ELR at 20441. 108. 100 F.3d at 802, 27 ELR at 20402 ("the district court engaged in extensive fact-finding during a trial lasting more than seventeen days"). 109. 987 F. Supp. at 355, 28 ELR at 20277 ("On Monday, February 24, 1997, the Court conducted the first day of the non-jury trial. Thereafter, the Court held sixteen (16) court days of testimony concerning the allocation of response costs . . . ."). 110. 1 F. Supp. 2d at 1282, 28 ELR at 21480 ("Phase II (damages) and phase III (allocation) issues . . . were tried to the court . . . over 10 days from January 12 to January 23, 1998."). 111. 1996 U.S. Dist. LEXIS 22493 (N.D. Okla. 1996). 112. 936 F. Supp. at 1250, 27 ELR at 20230. 113. Hyson, supra note 56. 114. E.g., Farmland Indus., Inc. v. Colorado & E. R.R., 944 F. Supp. 1492, 1493 (D. Colo. 1996) (allocation decision rendered after a one-day trial); Weyerhaeuser Co. v. Koppers Co., Inc., 771 F. Supp. 1420, 22 ELR 20168 (D. Md. 1991) (allocation decision rendered after a two-day bench trial). 115. Hyson, supra note 56, at 10200. 117. No. CV 90-3122 R (C.D. Cal. 2000) (unpublished order entered Sept. 20, 2000) (concluding that "the State of California's allocable share of liability under 42 U.S.C. § 9613(f) for response costs and any damages for injury to, destruction of or loss of natural resources is zero"). 118. No. 91-408, 2000 U.S. Dist. LEXIS 4282. 119. A nonconsensual reference of an allocation trial to a magistrate judge also raises serious statutory and constitutional issues concerning the proper role of Article III judges in CERCLA cases. The parties in Beazer East objected to the reference of the allocation trial to a magistrate judge but the district court overruled the parties' objections. Inasmuch as the Beazer East decision is an unpublished district court opinion that was not reviewed by an appellate court, the decision has little precedential value for future cases. 120. Vandenberg v. Superior Court, 21 Cal. 4th 815, 831 (1999) ("private arbitration is a process in which parties voluntarily trade the safeguards and formalities of court litigation for an expeditious, sometimes roughshod means of resolving their dispute"). 121. See, e.g., Foster v. United States, 130 F. Supp. 2d 68, 70 n.2 (2001) ("Direct testimony in this case was received by written declaration, with the witnesses then subject to live cross-examination and re-direct before the Court."). 31 ELR 11098 | Environmental Law Reporter | copyright © 2001 | All rights reserved |