United States v. Atlantic Research Corporation
127 S. Ct. 2331 (2007)

  • Atlantic leased property belonging to the Dept. of Defense and used the site to retrofit rocket motors for the US military. Some of the rocket fuel leaked, and the entire site became a hazardous waste area.
  • Realizing that they would be held liable for cleanup costs under CERCLA, Atlantic cleaned up the site at their own expense. They then sued the Dept. of Defense to recover the cleanup costs under CERCLA 107(a) and 113(f).
    • CERCLA 107(a) says that owners of contaminated sites can be held liable for cleanup costs.
    • CERCLA 113(f) says that any person may seek contribution from any other person who is liable or potentially liable under 107.
  • The Trial Court dismissed the case. Atlantic appealed.
    • The Trial Court relied on the decision in Cooper Industries, Inc. v. Aviall Services, Inc. (543 U.S. 157 (2004)), which basically said that one potentially responsible party (PRP), cannot sue another to recover costs.
      • Based on a reading of 107(a)(4)(A).
  • The Appellate Court reversed. The Dept. of Defense appealed.
    • The Appellate Court found that 107(a)(4)(B) authorized a suit by any person not permitted to sue under 107(a)(4)(A).
      • The Appellate Court interpreted 107(a)(4)(B) to say that any PRP associated with a facility from which there is a release...shall be liable for...any necessary costs of response incurred by any other person...
      • The Dept. of Defense argued that 107(a)(4)(B) permits suits only by non-PRPs.
  • The US Supreme Court affirmed.
    • The US Supreme Court found that a plain reading of 107(a)(4)(B) allowed a PRP to recover costs from other PRPs. Therefore Atlantic had a cause of action.
    • The Court found that 107(a)(4)(B) provides a cause of action to anyone except the persons listed in 107(a)(4)(A).
    • The Dept. of Defense argued that this interpretation would offer PRPs a choice between 107(a)(4)(B) and 113(f), effectively allowing PRPs to circumvent 113(f)'s shorter Statute of Limitations, and encourages PRPs to forgo the equitable apportionment of 113(f) and instead try to get out of paying completely by using 107(a)(4)(B)'s joint and several liability.
      • The Court rejected this argument, saying that if one PRP makes a 107(a)(4)(B) claim, the other PRP can always make a 113(f) counterclaim, and the court can decide if equitable apportionment or joint and several liability is the appropriate remedy.
  • One bonus to suing under 107(a)(4)(B) is that you can argue that the defendant should be held jointly and severally liable, and stick them with the entire bill. Under 113(f) you can only sue for equitable contribution, so the most the defendant will have to pay is just an equitable share of the costs.