United States v. Southeastern Pennsylvania Transportation Authority

No. 99-1479 (235 F.3d 817) (3d Cir. December 26, 2000)

ELR Digest

The court holds that a Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) consent decree that resolves the liability of three settling rail companies does not unfairly allocate responsibility for cleanup. After proposing and entering a consent decree resolving the liability of three rail companies, the U.S. Environmental Protection Agency (EPA) issued an administrative order to the nonsettling party requiring it to implement remedies from an EPA record of decision related to the site's watershed. The decree gave protection to the settling parties for past, interim, and future response costs of the United States and Pennsylvania, including the work the nonsettling party is to perform under the administrative order. The nonsettling party claimed that CERCLA does not permit the contribution protection the consent decree provided the settling parties. The decree gives the settling parties contribution protection for the remedies that they will perform under the decree, which are matters addressed in the settlement, and for the remedies that the nonsettling railyard owner and operator will perform under the administrative order, which are matters not addressed in the settlement. Therefore, the nonsettling party argued that the decree is a partial settlement and the rail companies are entitled to contribution protection only for the remedies they are undertaking under the consent decree.

The court first holds, however, that the consent decree is not a partial settlement. The rail companies agreed to take on the remedies necessary to clean up the railyard in order to resolve their liability for the entire site, including the watershed area. Reading the settlement as a whole, it is reasonable to conclude that it addresses matters related to the entire site. The court next holds that the districtcourt did not abuse its discretion by accepting years of ownership and operation as a plausible method on which to judge the fairness of the consent decree. The court further holds that the consent decree is not unfair because it sets a floor for the nonsettling party's liability, but a ceiling for the settling parties' liability. Finally, the court holds that the consent decree is not unfair because the nonsettling party will be responsible for highly speculative future costs.

[A prior decision in this litigation is published at 17 ELR 20001.]

The full text of this decision is available from ELR (14 pp., ELR Order No. L-313).

Counsel for Appellee
Bonnie A. Barnett
Drinker, Biddle & Reath
One Logan Square
18th & Cherry Sts., Philadelphia PA 19103
(215) 988-2700

Counsel for Appellant
James J. Capra Jr.
Orrick, Herrington & Sutcliffe
666 5th Ave., New York NY 10103
(212) 506-5000

[31 ELR 20310]

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]