ELR Citation: ELR 21474
No(s). 91-8080 (5th Cir. Sep 28, 1993)

The court holds that joint and several liability may not be imposed under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) in a U.S. Environmental Protection Agency (EPA) cost recovery action on a party that met its burden of proving a reasonable basis for apportioning liability among several defendants on a volumetric basis. The operations of three parties who operated at mutually exclusive times led to the contamination of groundwater with chromium. First the court reviews the various approaches that other circuit courts of appeal have taken in resolving the questions posed by the concepts of joint and several liability and apportionment of liability as applied under CERCLA. The court finds that there are three distinct approaches to joint and several liability; however, it concludes that the best of the three approaches requires that a defendant seeking to avoid such liability prove the amount of harm it caused. Applying this approach, the court holds that the defendant in this action met its burden of proving that there exists a reasonable basis for apportioning liability among the three defendants on a volumetric basis. The court finds that it is reasonable to assume that the respective harm done by each of the defendants is proportionate to the volume of chromium-contaminated water each discharged into the environment. Moreover, there is sufficient evidence from which a reasonable and rational approximation of each defendant's individual contribution to the contamination can be made.

The court holds that EPA's decision to furnish an alternate water supply to consumers of water from the local aquifer as an interim measure pending completionof a final remediation action was arbitrary and capricious. The administrative record contained no evidence that anyone was drinking contaminated water. The court holds that EPA is not entitled to recover costs of designing and constructing an alternate water supply, because the arbitrary and capricious nature of EPA's decision to furnish the alternate water supply rendered the decision inconsistent with the national contingency plan. Finally, the court holds that the filing of the complaint by EPA satisfies the statutory requirement that prejudgment interest be demanded in writing. Neither the notices informing the defendant generally that EPA would look to it for potential reimbursement nor the record of decision to install the alternate water supply constitute sufficient written demand for payment. Therefore, the court holds that under CERCLA §107(a)(4), for costs incurred before the filing of the complaint, prejudgment interest should be assessed from the date of filing, and for costs incurred after the date of filing, and for costs incurred after the date of filing, prejudgment interest should be assessed from the date of expenditures.

Counsel for Appellee
Albert M. Ferlo Jr.
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Appellants
James B. Harris
Thompson & Knight
3300 First City Ctr., 1700 Pacific Ave., Dallas TX 75201
(214) 969-1700