ELR Citation: ELR 21312
No(s). s. 92-4040, -4048 (10th Cir. Jul 9, 1993)

The court holds that a private party may recover nonlitigation attorney fees generated in designing and negotiating a removal action if such fees were necessary to the containment and cleanup of released hazardous substances, but the party may not recover attorney fees from litigation of a private cost recovery action under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). A defendant chairman of a company that, due to a lack of funds, did not perform any of the cleanup it had agreed with plaintiffs to perform, appealed a judgment granting plaintiffs' reimbursement for response costs. First, the court holds that the chairman waived any right he may have had to a jury trial by signing a pretrial order and participating in the bench trial. Next, the court holds that the chairman is subject to operator liability under CERCLA because he exercised actual control and personally participated in conduct that violated CERCLA. The court also upholds the lower court's apportionment of 25 percent of the response costs to nonparties. The district court properly considered the liability of nonparties in apportioning costs, and the chairman did not establish that his costs should have been less due to liability of nonparties.

Addressing the recoverability of attorney fees as necessary response costs under CERCLA §107(a)(4)(B), the court holds that a private party may not recover attorney fees arising from the litigation of a private cost recovery action, because such fees fall under the American rule. However, the court holds that nonlitigation attorney fees, which do not fall under the American rule because they are not incurred in pursuing litigation, are not barred. Therefore, attorney fees generated in designing and negotiating the removal action and in preparing and carrying out the work plan approved by the U.S. Environmental Protection Agency are recoverable. The court remands to the district court to ascertain whether any nonlitigation attorney fees sought in the action were necessary to the containment and cleanup of hazardous releases and, therefore, are recoverable as necessary costs.

[Counsel not available at this printing.]

Before Tacha and Rogers,^* JJ.: