ELR Citation: ELR 20447
No(s). G-86-267 (S.D. Tex. Aug 8, 1991)

The court holds that §113(f)(2) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) bars a nonsettling defendant in a government suit for recovery of response costs from asserting a cross-claim for contribution against settling de minimis defendants, and the nonsettling defendant and its counsel must each pay sanctions of $10,000 and the reasonable attorney fees and expenses of the de minimis defendants responding to the cross-claim. The court first holds that the nonsettling defendant cannot assert its cross-claim against the de minimis defendants because Congress had in mind this exact scenario when it decided to protect these parties under CERCLA §113(f)(2) from any further liability, including claims for contribution or indemnity. Although there is no guarantee that the nonsettlor will not ultimately be required to pay more than its "fair share" of the final cleanup costs, under a different holding there would be no incentive for government plaintiffs to enter into such settlements if by doing so they would not decrease their enforcement costs and would have to take on the burden of showing that the settling parties paid their equitable share.

The court next holds that it will allow the nonsettling defendant's cross-claim against one settling defendant until that defendant's true posture in the litigation is resolved. Despite having been a party to the partial consent decree with the government, that defendant may have been more involved in the activities leading to this case than was originally believed. Further, the government reserved in the consent decree the right to bring a party back into the litigation as a principal player if that party could be shown to have contributed to the hazardous waste at the site by more than one percent. The court next dismisses motions to dismiss the nonsettling defendant's cross-claim against principal parties in the litigation. However, the court orders the nonsettling defendant to file a more definite statement of its cross-claim against these defendants in order to sufficiently notify them of the legal nature of its claim and of the underlying allegations of fact supporting it.

The court further holds that the Superfund Amendments and Reauthorization Act (SARA) need not be applied retroactively to support the bar against the nonsettling defendant's claim against the de minimis defendants. Much of the knowledge of the enormity of the response costs in the this case had already disseminated among the parties, and the settlement was approved long after the adoption of the SARA contribution bar provisions. The court holds that the nonsettling defendant may not pursue contribution under state liability law, because the de minimis parties are liable parties under CERCLA and their liability is already fixed pursuant to the settlement with the government. Further, it is inconceivable that Congress, wanting to encourage parties to settle early with the government, would so carefully fashion protections against contribution claims under CERCLA, but then leave those same parties exposed to similar liability by allowing state law contribution schemes to be pursued. Finally, the court holds that the nonsettling defendant's cross-claim is a per se violation of Federal Rule of Civil Procedure 11. The nonsettling defendant blatantly disregarded binding statutory law and controlling rules of procedure, and evidenced manifest lack of concern for the court's frequently stated need to resolve its enormous docket as orderly and expeditiously as possible. The nonsettling defendant's legal theory was unreasonable, and its persistent assertion of its claims for contribution from the de minimis defendants in the face of statutory authority to the contrary is a blatant expression of bad faith.

Counsel for Plaintiff
Robert Darden, Ass't U.S. Attorney; Henry K. Oncken, U.S. Attorney
P.O. Box 61129, Houston TX 77208
(713) 229-2600

James Robertson, Peter Stinson
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendants
Robert A. Hall, Mark C. Watler
Woodard, Hall & Primm
7000 Texas Commerce Tower, 600 Travis St., Houston TX 77002
(713) 221-3800

Cynthia H. Stewart
Jones, Day, Reavis & Pogue
2001 Ross Ave., P.O. Box 660623, Dallas TX 75266
(214) 220-3939