Monday, April 21, 2008

Kotrous v. Bayer Cropscience

Apr 17: In the U.S. Court of Appeals, Ninth Circuit, Case Nos. 06-15162, 06-16019. The case involves the Circuit Court's reconsideration of the continued viability of its opinion in Pinal Creek Group v. Newmont Mining Corp., 118 F.3d 1298 (9th Cir. 1997), in light of the Supreme Court’s most recent precedent addressing the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) -- i.e. United States v. Atlantic Research Corp., 127 S. Ct. 2331, 2333 (2007) [See WIMS 6/12/07]. Sections 107 and 113(f) of CERCLA, “allow private parties to recover expenses associated with cleaning up contaminated sites.”

U.S. v. Atlantic Research Corp., the Supreme Court held that § 107(a) provides “so-called potentially responsible parties (PRPs) . . . with a cause of action to recover costs from other PRPs,” whereas § 113 provides an action for contribution. In so holding, the Ninth Circuit said, the High Court "undermined Pinal Creek’s holding that § 107 entitles PRPs to seek only contribution, not cost recovery, from other PRPs. To the extent, therefore, that Pinal Creek conflicts with Atlantic Research, we conclude that Pinal Creek has been overruled."

The Appeals Court explained further that its opinion addressed two separate appeals, in separate actions, seeking recovery of costs associated with the cleanup of hazardous waste sites. In the first appeal, James Kotrous sued numerous defendants, including Bayer Crop-Science, Inc., seeking contribution under CERCLA for costs he had incurred in cleaning soil and groundwater contamination on land he owned. The district court denied Bayer’s motion to dismiss Kotrous’ claim under CERCLA § 107 for contribution. It then granted Bayer’s motion for certification for interlocutory appeal pursuant to 28 U.S.C. § 1292(b).

In the second appeal, Adobe Lumber, Inc., the owner of contaminated land, sued the owners of a dry cleaning business run on the property, as well as prior landowners, chemical and equipment manufacturers, and the City of Woodland, for contribution for costs Adobe had incurred in dealing with the contamination. The district court denied the defendants’ motion to dismiss for failure to state a claim. Adobe Lumber, Inc. v. Hellman, 415 F. Supp. 2d 1070 (E.D. Cal. 2006). The district court subsequently certified its order for appeal and the Appeals Court agreed to hear both interlocutory appeals.

The Ninth Circuit concludes, "Atlantic Research overruled our holding in Pinal Creek that an action between PRPs is necessarily for contribution. Under Atlantic Research, Kotrous and Adobe are entitled to bring a claim for recovery of costs under § 107(a), even if they are PRPs. The Supreme Court’s holding, however, has made it clear that they must seek cost recovery under § 107, not contribution under § 113, because they have not been subject to an action under § 106 or § 107. In each of these appeals, the judgment of the district court is vacated and the case remanded for further proceedings. Each party shall bear its own costs on appeal.

Access the complete opinion (
click here).