Tuesday, July 28, 2009


This is a blog about Alternative Dispute Resolution (ADR), the law and other topics related to ADR that interest me. I seek your comments and reactions. To the extent this blog becomes a dialogue among readers, I will have accomplished my purposes here.

One area that I’m particularly interested in is settling hazardous waste cost allocation disputes. The law imposing liability for the cleanup of abandoned hazardous waste sites is known as the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), also known as Superfund.

Because the law imposes joint and several liability on large numbers of parties (called Potentially Responsible Parties, or PRPs) those parties must find some way of allocating costs among themselves.

While PRPs can and do litigate allocation disputes, the cost of litigation is very high, especially for parties whose share of liability may be small. Litigation costs can be more than the share of the damages.

Thus, PRPs, frequently with the assistance of a neutral, negotiate settlements to allocate costs of the cleanup, thus avoiding expensive litigation.

On May 4, 2009 the Supreme Court issued a very important decision regarding hazardous waste law. In an 8 to 1 decision the Court decided Burlington Northern & Santa Fe Railway Co. v. United States (556 U. S. ____ (2009)).

This opinion decided two issues. The first issue, regarding so-called “arranger liability” (liability imposed by the law on those who arrange for disposal of hazardous substances), the Court held that “arrangers” are not liable unless they intended that their shipments be disposed. While this holding clarifies the law regarding arranger liability, it is not, in my opinion, a surprise or indeed a major change from current law.

The other portion of the decision, however, which has not received nearly as much attention in the press (except among environmental lawyers), held that liable PRPs are not “jointly and severally” liable and apportionment is proper when there is a reasonable basis for determining the contribution of each to the harm.

I believe this case could have a significant effect on how parties litigate and settle Superfund cost allocation disputes in the future. More about this in my posting next week.

For a comprehensive discussion of the issues involved in hazardous waste cost allocation disputes, see Chapter 8, “Resolving Superfund Cost Recovery Disputes” in the excellent survey edited by Ann L. MacNaughton and Jay G. Martin, Environmental Dispute Resolution: An Anthology of Practical Solutions, published by the American Bar Association Section of Environment, Energy, and Resources.

Keywords: alternative dispute resolution, adr, cercla, superfund, burlington northern & santa fe railroad v. united states, arrange liability, prp, potentially responsible party, hazardous waste, hazardous waste law

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