ELR Citation: ELR 20317
No(s). 8:CV 91-00499 (D. Neb. Sep 9, 1992)

The court holds that a de minimis settlement under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) between the U.S. Environmental Protection Agency (EPA) and two potentially responsible parties (PRPs) at a Nebraska Superfund site bars a primary PRP's CERCLA contribution action for monetary and declaratory relief. The hazardous substance contamination occurred at the Colorado Avenue subsite of the Hastings Groundwater Contamination site in Hastings, Nebraska. Under the settlement, two de minimis PRPs gave EPA access to their property for purposes of performing response actions in return for EPA agreeing not to sue them and EPA's agreeing that the de minimis settlers were entitled to contribution protection under CERCLA §122(g)(5).

The court first holds that the primary PRP's contribution action against the settling de minimis PRPs is barred, because CERCLA §122(g)(5) expressly precludes contribution actions against de minimis settlers. Courts have consistently enforced CERCLA by providing settling parties with immunity from any claim regarding matters addressed in the settlement with the government, provided the nonsettling party's claim is in substance a claim in contribution. The court holds that the language of the de minimis settlement, which the primary PRP reads to imply that the contribution protection was not effective until the de minimis PRPs satisfied their liability, was effective upon entry and approval. To the extent that the settlement addresses the future, it is only because the de minimis PRPs have continuing obligations to EPA, such as to provide continued access to their land. Absent a showing that the de minimis PRPs are not now in compliance with the order, no factual basis exists to cause a default terminating the contribution bar. Moreover, the primary PRP's interpretation does not make practical sense, since it would take away from the settling parties the most significant reason to settle—an effective contribution bar. Further, it is understandable for EPA to make the benefits of such a settlement contingent on future performance by the settling parties. However, if the primary PRP's interpretation were adopted, few parties would settle because they could expect no contribution bar until remediation efforts were complete.

The court next holds that the primary PRP is not entitled to discovery to determine the factual accuracy of statements made by the settling de minimis PRPs that form the basis of the settlement. If the primary PRP were permitted to engage in discovery to challenge a factual basis for the settlement, the contribution bar would have little value to settling parties. In this case, the rationale for the settlement was squarely before the court, since the settlement was judicially approved, and EPA was a party. Moreover, the de minimis settlement procedure provides for measures to assure the factual accuracy of assertions made to EPA prior to settlement. For example, the primary PRP was given, and took advantage of, the opportunity to submit comments to EPA about the factual accuracy of the de minimis settlers' representations. Further, EPA's decision to settle was not predicated solely on the de minimis settlers' representations, was not made without considering the primary PRP's position, and was not arrived at in a haphazard way. If a nonsettling PRP can obtain discovery to determine whether an administrative de minimis settlement order is factually well-founded, then CERCLA's contribution bar has virtually no utility.

Finally, the court declines to follow the district court in United States v. Hardage, 20 ELR 21307, and holds that the primary PRP is barred by the contribution protection in the settlement from seeking contribution for any independent response costs incurred by the primary PRP. In Hardage, the district court held that the United States had no authority under CERCLA to protect de minimis parties from "independent response cost claims," which the court reasoned would encourage parties to engage in cleanup activities on their own. The court holds that a response cost claim, no matter when or why the costs areincurred, is indistinguishable from a claim for contribution. Even if the primary PRP incurred independent response costs, those costs reduce the primary PRPs liability. Moreover, it is undisputed that the contamination was caused solely by the acts and omissions of third parties other than the de minimis settlers. If the Hardage rationale were adopted, it would inject into the de minimis settlement process uncertainty about the exposure of settling parties, which would provide a disincentive to settlement with the government, a result clearly contrary to CERCLA. The court concludes that since prompt settlement with de minimis PRPs is one of the express goals of CERCLA's de minimis settlement procedure, the Hardage rationale frustrates, rather than furthers, the congressional intent.

Counsel for Plaintiff
Lawrence Demase, Joseph Klein
Reed, Smith, Shaw & McClay
James E. Reed Bldg., Mellon Sq., 435 6th Ave., Pittsburgh PA 15219
(412) 288-3131

Michael Mostek, Paul Elofson
McGill, Gotsdiner, Workman & Lepp
10010 Regency Cir., Ste. 300, Omaha NE 68114
(402) 397-9988

Counsel for Defendants
Robert M. Zuber
Zuber & Ginsburg
Commercial Federal Tower, 2120 S. 72d St., Ste. 646, Omaha NE 68124
(402) 397-1161

Judy M. Lange, Rodney M. Confer
Knudsen, Berkheimer, Richardson & Endacott
1000 NBC Ctr., Lincoln NE 68508
(402) 475-7011