ELR Citation: ELR 20332
No(s). 85 Civ. 1939 (EW) (S.D.N.Y. Sep 29, 1988)

The court upholds, for the most part, a Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) proposed settlement between New York City and several contributors to five city landfills. The settlement was challenged by two nonsettling contributors. The court first holds that whether CERCLA §113(f)(2), protecting settling parties from contribution claims from nonsettling parties, applies in this case is currently ripe for review. Deciding now that §113(f)(2) applies would guarantee settling parties that they will not be dragged back into the case later, and would immediately confront nonsettling parties with the prospect of covering any shortfall that develops between the settlement reached and the ultimate share of the settling parties. The court next holds that municipalities are "states" for purposes of bringing suit under CERCLA §107(a)(4)(A) and entering into settlements under §113(f)(2). CERCLA §101(27) defines "state" with the introductory verb that it includes the 50 states and other specified governments such as the District of Columbia, and this contrasts with other CERCLA definitions that define terms with the introductory verb mean. Thus, CERCLA's definition of "state" invites inclusion of entities not specifically listed. CERCLA divides duties among levels of governments, and though in some sections they arespecifically granted rights and in others they are omitted, political subdivisions of states are not relegated to the status of private parties. Interpreting §§107(a)(4)(A) and 113(f)(2) to include political subdivisions is consistent with CERCLA's remedial purposes by encouraging early and complete settlement. CERCLA's legislative history is unreliable in general, and on this issue in particular it offers no persuasive guidance. Moreover, in this case the state government has participated in reaching the settlement and in effect has approved New York City's role in the litigation; to fail to apply §113(f)(2) would be unduly formalistic.

The court next holds, however, that the separate administrative consent order between the settling parties and the state, incorporated into the proposed settlement, must be severed. Severance in no way diminishes the obligations set out in either the settlement or the consent order, but it would eliminate the court's judicial approval of the consent order, and under §113(f)(2) this would affect the state's right to recover from nonsettling parties. The state has not commenced a judicial action under CERCLA and has not sought to intervene in this one, so it is only New York City's claims on which the court will rule. The court holds that if §113(f)(2) does not govern New York City's settlement, settling parties are still entitled to contribution protection under the Uniform Comparative Fault Act.

The court next holds that it is not required to hold a hearing with public notice and comment to consider the proposed settlement. Nothing in CERCLA suggests that solicitation of public comment is required for settlements in which the United States is not a party. Although some other courts evaluating proposed settlements under CERCLA have conducted fairly extensive evidentiary hearings, they were considering the adequacy of long-term response plans, not a plan for payment by the settling defendants for a response yet to be selected. CERCLA will require public comment when the plan in this case is selected. By analogy, CERCLE §122, which applies only to federal settlements, does not require proposed money settlements to be reviewed in an evidentiary hearing. Also by analogy, discovery and an evidentiary hearing would not be required under the standards governing class action settlements.

In approving a CERCLA settlement, the court must do what is necessary to be convinced that it is fair, adequate, reasonable, and consistent with the Constitution and the mandate of Congress. There is a presumption in favor of approving the settlement. The court holds that there is a sufficient basis to approve the settlement in this case. It was entered into in good faith and is based on a sufficient factual record to reach an informed decision as to settlement terms. Moreover, it is fair to nonsettling defendants. Only a few nonsettling defendants have objected to it, and there is no evidence that New York City and the state are favoring some defendants over others. The settling parties have agreed to forego their contribution rights against nonsettling parties. To the extent nonsettling parties are disadvantaged by CERCLA §113(f)(2)'s applicability to the settlement, their dispute is with Congress.

A previous opinion in this case appears at 16 ELR 20850. The complaint is summarized at ELR PEND. LIT. 65856. The settlement is analyzed at 19 ELR 10012.]

Counsel for Plaintiff
Peter Lehner, Ass't Corporation Counsel for the City of New York
City of New York Legal Department
100 Church St., New York NY 10007
(212) 566-0745

Counsel for Defendant
Michael M. Gordon
Cadwalader, Wichersham & Taft
100 Maiden Lane, New York NY 10038
(212) 504-6000

CONBOY, District Judge: