8.2 Liability and Cost Recovery under CERCLA

CERCLA's liability and cost recovery provisions form the backbone of environmental cleanup efforts. These rules cast a wide net, holding various parties responsible for contamination and its cleanup, regardless of fault or when the pollution occurred.

The law's strict approach ensures thorough cleanups but can lead to complex legal battles. PRPs face significant financial risks, while cost recovery and contribution actions allow for sharing the burden. Natural resource damage claims add another layer of responsibility for environmental harm.

Liability under CERCLA

Types of Potentially Responsible Parties

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• Current owners or operators of contaminated facilities bear responsibility for cleanup costs
• Past owners or operators during hazardous substance disposal face liability
• Generators who arranged for disposal or treatment of hazardous substances can be held accountable
• Transporters who selected contaminated sites for hazardous substance disposal incur liability
• PRPs may include individuals, corporations, and government entities

Principles of CERCLA Liability

• Joint and several liability allows government to recover full cleanup costs from any PRP
• PRPs can seek contribution from other responsible parties to share costs
• Strict liability applies regardless of fault or intent
• Retroactive liability extends to actions taken before CERCLA's enactment in 1980
• Courts interpret CERCLA liability broadly to ensure effective environmental remediation

Implications of CERCLA Liability

• PRPs face potentially significant financial burdens for cleanup costs
• Liability can extend to corporate successors and parent companies in some cases
• Insurance coverage for CERCLA liability often leads to complex litigation
• EPA can issue unilateral administrative orders to compel PRPs to conduct cleanups
• Failure to comply with EPA orders can result in treble damages and daily penalties

Cost Recovery and Contribution

Cost Recovery Actions

• Government can seek reimbursement for cleanup costs from PRPs
• Private parties who conduct cleanups can recover costs from other PRPs
• Statute of limitations for cost recovery actions varies (3 years for removal actions, 6 years for remedial actions)
• Recoverable costs include site investigation, cleanup activities, and enforcement expenses
• Plaintiffs must prove costs were necessary and consistent with the National Contingency Plan

Contribution Actions

• PRPs can seek contribution from other responsible parties to equitably allocate cleanup costs
• Courts consider factors such as volume, toxicity, and degree of involvement in allocating costs
• Contribution actions must be filed within 3 years of judgment or settlement
• Settlement with the government provides contribution protection against non-settling parties
• Orphan shares (costs attributable to insolvent or defunct PRPs) may be allocated among viable PRPs

Natural Resource Damages

• Trustees (federal, state, or tribal officials) can seek compensation for injury to natural resources
• Damages cover assessment costs, restoration expenses, and lost use value
• Restoration aims to return resources to baseline condition before contamination
• Trustees must conduct natural resource damage assessments following specific regulations
• Settlements often involve a combination of monetary payments and restoration projects

Defenses and Settlements

Statutory Defenses to CERCLA Liability

• Innocent landowner defense applies to those who acquired property without knowledge of contamination
• Purchasers must conduct all appropriate inquiries into previous ownership and uses
• Bona fide prospective purchaser defense protects buyers who knowingly acquire contaminated property
• BFPPs must meet specific criteria, including conducting due diligence and cooperating with response actions
• Act of God, act of war, and third-party defenses provide limited protection in specific circumstances

Types of CERCLA Settlements

• De minimis settlements allow parties with minimal involvement to resolve liability early
• De micromis settlements exempt very small volume contributors from liability
• Ability-to-pay settlements adjust payment terms based on a PRP's financial capacity
• Prospective purchaser agreements provide liability protection for redevelopment of brownfields
• Mixed funding settlements involve both government and PRP contributions to cleanup costs

Benefits and Challenges of CERCLA Settlements

• Settlements provide certainty and finality for PRPs
• EPA often offers covenant not to sue as part of settlement agreements
• Administrative settlements can be faster and less costly than litigation
• Reopeners in settlements may allow government to seek additional costs in certain circumstances
• Non-settling PRPs may face disproportionate liability if other parties settle early