Early Analysis: United States v. Atlantic Research Corp.

The following is an analysis, written by Sarah Rispin of Akin Gump’s Washington, DC office, of the case U.S. v. Atlantic Research, in which the Supreme Court granted cert. last Friday. We previously mentioned this case as part of an earlier post spotlighting a plethora of environmental cases that have come before the Court this Term.

Last Friday, the Supreme Court granted certiorari in United States v. Atlantic Research Corp., a case out of the Eighth Circuit which presents the question of whether Section 107(a) of Superfund gives potentially responsible parties (PRPs) the opportunity to seek contribution from other PRPs to clean up Superfund sites before the EPA commences any enforcement action against them. A ruling by the Court on the merits of the case will resolve a three-to-one circuit split on the question presented: like the Eighth Circuit, the Second and Seventh Circuits hold that Section 107(a) grants an implied right of pre-enforcement contribution, while the Third Circuit holds that it does not. Briefs in the case are available here (06-562).

This issue is somewhat unique among unresolved issues in environmental law insofar as it brings environmentalists, landowners, industry, and the states together on the same side. The issue’s importance to owners of Superfund sites, which include many industrial corporations, is self evident: remediation of these “brownfield” sites can be so costly that, without a legal mechanism to share costs prior to EPA-initiated clean-ups, these properties remain abandoned until EPA turns its attention to them. But EPA has so many sites to attend to that it could be years before it seeks to compel clean-up at any given site. Granting a pre-enforcement contribution right, landowners contend, allows them to clean up property much earlier than they otherwise would and reap the benefit from idling assets. Environmentalists are also in favor of a pre-enforcement contribution right, because it means that ongoing underground leaks and other contamination can be capped off and remediated. Finally, localities are eager to see blighted brownfield areas –which often take up prime waterfront sites in downtowns – turned into functioning, taxable space.

Section 107(a) of Superfund assigns joint and several liability to several classes of PRPs, including present property owners, anyone who owned the property at the time toxic wastes were released at the site, and anyone who released toxic wastes at the site. Though the original version of Superfund did not include an explicit right of contribution between classes of PRPs, many federal courts held, during the first few years that it was in effect, that such a right was implied under Section 107(a).

Congress codified this contribution right in Section 113(f) through the Superfund Amendment and Reauthorization Act of 1986. Still, it was not clear whether PRPs could seek contribution from other PRPs before being the subject of an EPA enforcement action. The Court first considered this issue in Cooper v. Aviall, two terms ago. In that case, the Court held, based largely on the specific language of the provision, that Section 113(f) does not grant PRPs the ability to bring contribution actions against other PRPs before they themselves are the subject of some sort of enforcement action.

Because its decision in Cooper v. Aviall concentrated on textual language specific to Section 113(f), the Court was mindful that after its decision landowners might turn back to Section 107(a) as a source of a pre-enforcement contribution right. But the majority specifically declined to decide whether Section 107(a) afforded PRPs such a right. Notably, Justices Ginsburg and Stevens dissented from that particular decision, and wrote separately to say they would have reached and decided it in favor of granting a contribution right.

The plaintiffs in Atlantic Research did exactly as the Supreme Court anticipated, and turned to Section 107(a) after the Supreme Court closed off the Section 113(f) route while they were already in litigation. Taking advantage of the Supreme Court’s pronouncement in Cooper v. Aviall that the two sections are “similar and somewhat overlapping,” yet “clearly distinct,” the Eighth Circuit interpreted Section 107(a) as both operating independently from Section 113(f) and granting the right that the Supreme Court said Section 113(f) did not provide in Cooper v. Aviall.

Thus, this case presents the rare situation in which an almost identical issue will be heard for a second time within two years. It is also possible that the outcome will change, given Justices Ginsburg and Stevens’s dissent in Aviall, and that two new justices have joined the Court since that case was decided and will thus be considering the question for the first time.

Argument in United States v. Atlantic Research Corp., will be heard in April, as one of the last arguments of the October 2006 Term.