Thursday, June 3, 2010

USA v. Aerojet General Corporation

Jun 2: In the U.S. Court of Appeals, Ninth Circuit, Case No. 08-55996. In this important case involving the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the Appeals Court explains that "CERCLA requires certain polluters to pay for cleaning up contaminated sites. After identifying a contaminated site, U.S. EPA and state environmental agencies typically negotiate with potentially responsible parties (PRPs) over their shares of comparative responsibility for cleanup costs. CERCLA allows PRPs to seek contribution from one another in order to apportion response costs equitably. But CERCLA bars contribution claims against PRPs that have obtained administratively or judicially approved settlements with the government. CERCLA thus provides an incentive for PRPs to settle by leaving non-settling PRPs liable for all of the response costs not paid by the settling PRPs."
    The Appeals Court said, "We consider a question that has split the federal courts: May a non-settling PRP intervene in litigation to oppose a consent decree incorporating a settlement that, if approved, would bar contribution from the settling PRP? We join the Eighth and Tenth Circuits in holding that the answer is 'yes.'" In its conclusion the Appeals Court rules, ". . .we hold that Applicants have a right to intervene under Rule 24(a)(2) and § 113(i) of CERCLA to protect their interests in contribution and in the fairness of the proposed consent decree. We therefore reverse and remand for further proceedings consistent with this opinion."
    Explaining further, the Appeals Court says, "Under Rule 24(a)(2), Applicants bear the burden of showing that their interests are not adequately represented by the existing parties. Under § 113(i), the government bears the burden of showing the non-settling PRPs' interests are adequately represented. Under either standard, we conclude that the interests of the non-settling PRPs are not adequately represented by the existing parties." And, the Appeals Court says, ". . .§ 113(i) confers a right to intervene on 'any person' who 'claims an interest' in the litigation, should the disposition of the action 'impair or impede' that interest. Section 113(i) contains no restriction on intervention by non-settling PRPs. See Union Elec., 64 F.3d at 1165. Nor does the right of intervention in § 113(i) need to be restricted in order to give effect to the contribution provisions of § 113(f). Indeed, precisely because § 113(f)(2) cuts off the contribution right of nonsettling PRPs, § 113(i) gives them the right to intervene upon timely application. We therefore hold that Applicants have significant protectable interests that support intervention as of right."
    In its opinion, the Appeals Court references the 8th & 10th Circuit cases, which have held that such PRPs have interests sufficient to support intervention as of right, and some of the competing district court ruling: "See United States v. Albert Inv. Co., Inc., 585 F.3d 1386 (10th Cir. 2009); United States v. Union Elec. Co., 64 F.3d 1152 (8th Cir. 1995). District courts have split on the question. Compare United States v. Acorn Eng'g Co., 221 F.R.D. 530, 534-39 (C.D. Cal. 2004) (holding interest not legally sufficient to support intervention as of right), United States v. ABC Indus., 153 F.R.D. 603, 607-08 (W.D. Mich. 1993) (same), and Arizona v. Motorola, Inc., 139 F.R.D. 141, 145-46 (D. Ariz.1991) (same), with United States v. Exxonmobil Corp., 264 F.R.D. 242, 246-48 (N.D. W. Va. 2010) (holding interest legally sufficient); United States v. Acton Corp., 131 F.R.D. 431, 433-34 (D.N.J. 1990) (same)."
    Access the complete opinion (click here).