Wednesday, September 17, 2014

Ninth Circuit Affirms CERCLA Consent Decree Based on Ability to Pay

On September 16, the Ninth Circuit (Tashima, Murguia, Carney (by designation)) issued a decision in United States v. Coeur d’Alene Company, No. 12-36065.  The United States negotiated a CERCLA settlement with the Coeur d’Alene Company regarding liability for the cleanup of the Conjecture Mine Site in Bonner County, Idaho.  The settlement based Coeur d’Alene’s liability on its limited ability to pay rather than on its proportionate share of the cleanup costs.  The district court entered the consent decree over the objections of Federal Resources Corporation, another potentially responsibility party.  Federal Resources appealed.  The court of appeals affirmed, noting that CERCLA § 122, 42 U.S.C. § 9622, which governs settlements, explicitly contemplates that ability to pay is a factor in CERCLA settlements and that courts have frequently recognized the legitimacy of “ability to pay” settlements.  The court rejected Federal Resources’s contention that the district court should have conducted an analysis of the comparative fault of the potentially responsible parties, because the settlement was based on ability to pay rather than fault.  The court also dismissed as speculative Federal Resources’s assertion that Coeur d’Alene might have insurance that could cover some of its liability, thereby increasing its ability to pay.

—Todd Aagaard

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