ELR Citation: ELR 21312
No(s). CIV 91-1094 PHX RCB (D. Ariz. Sep 22, 1992)

The court approves as fair, reasonable, and consistent with the objectives of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) a proposed settlement agreement in which an electronic components manufacturer agreed to pay $1.275 million and to provide the state with legal and investigative data regarding trichloroethylene (TCE) soil and groundwater contamination. The settling manufacturer, one of nine "potentially responsible parties" (PRPs) to which the Arizona Department of Environmental Quality issued notice letters for the West Osborne Complex, negotiated a private settlement with the state while the state refused to negotiate individual settlements with the other PRPs. Three of these other PRPs objected to the settlement during the public comment period, and one of them intervened as a plaintiff in this action.

The court first holds that insufficient evidence exists to suggest that the agreement is procedurally unfair. First, the court finds no evidence that the state "dragged its feet" during its negotiations with the PRP group. The fact that the state may have extended the negotiation period and internal deadlines does not prove that the state intentionally delayed the group negotiating process. Second, the court holds that the state may privately negotiate and settle with any PRP without notifying the other PRPs, as long as the state operates in good faith. The state was entitled to treat the settling manufacturer differently from the other PRPs because the settling manufacturer consistently cooperated with the state and initiated settlement negotiations before the group negotiations began, while the other PRPs had not. The court also holds that while the state may have misled the combined PRP group regarding its willingness to conduct private negotiations, the state clearly communicated its unwillingness to conduct private negotiations with the parties objecting to the settlement.

The court next holds that it has sufficient technical data to determine that the agreement is substantively fair. The court holds that it need not resolve the differences of experts on the total cleanup cost estimate and that there is no evidence that the estimate is unreasonably uncertain or technically inadequate. The court next holds that the method used to determine the amount of the settling manufacturer's liability was reasonable in light of the lack of evidence documenting actual chemical use and disposal over the 40- or 50-year contamination period. The court next holds that the state had no obligation to complete a formal remedial investigation and feasibility study (RI/FS) before negotiating settlement agreements. Even without an RI/FS, the state possesses sufficient information to rationally apportion liability. Forcing the state to complete a formal RI/FS before negotiating any settlement agreement, considering the state's lack of resources, conceivably could preclude all agreements, a result contrary to CERCLA objectives. Last, the court holds that the contribution protection provision in the agreement is not only appropriate, but is mandated by CERCLA §113(f)(2) and (f)(3)(B). The court concludes that the decree is reasonable and in the best interest of the public and consistent with CERCLA's objectives.

Counsel for Plaintiffs
Steven J. Silver, Ass't Attorney General
Attorney General's Office
1275 W. Washington St., Phoenix AZ 85007
(602) 542-4266

Counsel for Defendants
Rolf von Oppenfeld, Christopher L. Callahan
Fennemore & Craig
Two N. Central Ave., Ste. 2200, Phoenix AZ 85004
(602) 257-8700