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Supreme Court Affirms That Parties That Clean Up Contamination Can Recover Costs From Polluters

By: Paul S. Weiland, Alfred E. Smith, Frederic A. Fudacz
06/11/07

On June 11, 2007, the United States Supreme Court issued a unanimous decision clarifying that a so-called responsible party that voluntarily takes action to clean up the environment may bring an action under section 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"). United States v. Atlantic Research, Sup. Ct. Case No. 06-562.

Nossaman filed an amicus curiae brief in support of the position adopted by the Court on behalf of the Association of California Water Agencies, the National Association of Water Companies, the California Water Association, the California State Association of Counties, the Castaic Lake Water Agency, the San Gabriel Basin Water Quality Authority, and the Main San Gabriel Basin Watermaster. The Court’s position confirms the ability of public agencies, water purveyors, and other parties to utilize CERCLA’s powerful enforcement tools to recover costs from responsible parties that are incurred cleaning up hazardous contamination.

In the case before the Court, plaintiff Atlantic Research filed suit against the United States after it voluntarily investigated and cleaned up hazardous contamination of soil and groundwater. Because Atlantic Research was not subject to a lawsuit under section 106 or 107(a) of CERCLA, it was barred from seeking section 113(f)(1) contribution by a 2004 decision of the Supreme Court, Cooper Industries v. Aviall Services, 543 U.S. 157 (2004). Accordingly, Atlantic Research filed an action under section 107(a) of CERCLA; however, the district court held that Atlantic Research is a liable party that cannot bring an action under section 107(a). The Court of Appeals reversed, holding that a liable party that is barred from seeking contribution under section 113(f)(1) of CERCLA may bring an action under section 107(a) of CERCLA. The Supreme Court affirmed that Court of Appeals decision.

The question of whether a liable party possesses a right of action under CERCLA is of particular importance to public and private water purveyors. When water supplies are adversely impacted by contamination, water purveyors are often mandated to incur cleanup costs to ensure a continuing safe and reliable water supply to their service area, deferring issues of cost allocation until a later time. Water purveyors may ultimately be adjudged innocent parties when they seek to recover those response costs; however, polluters have argued that water purveyors are liable, even if only for a de minimis amount. For example, some polluters have argued that by pumping groundwater production wells, water purveyors spread the contaminant plume. The Court’s holding preserves an important right of action under CERCLA that will enable water purveyors to focus on their mission of providing clean and reliable water supplies, without fearing that cleanup costs cannot be recouped from polluters.

To view a copy of the decision, click here. To view a copy of Nossaman’s amicus curiae brief, click here.

Paul Weiland counsels clients regarding environmental and land use matters and litigates such matters in trial and appellate courts under a variety of statutes, including the Clean Water Act and Endangered Species Act. Formerly, he worked in the Law and Policy Section, Environmental and Natural Resources Division of the U.S. Department of Justice. He can be reached at (949) 833-7800 or pweiland@nossaman.com.

Fred Fudacz is Chair of the Water Law Group at Nossaman and has experience representing public and private water purveyors, major water users and public agencies. He also litigates water rights in major water rights adjudications throughout the State, and has been involved in extensive multi-party negotiations concerning physical solutions relating to the allocation of water and water rights. He can be reached at (213) 612-7823 or ffudacz@nossaman.com.

Alfred E. Smith, II specializes in environmental, water and complex commercial litigation. He represents public and private water purveyors, major water users, corporations and public agencies on matters including environmental compliance, water rights disputes, conjunctive use, public utility regulation, groundwater management and litigation over allegedly contaminated water and soil. He can be reached at (213) 612-7800 or asmith@nossaman.com.

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