Alert: U.S. Supreme Court Decision in Aviall Limits CERCLA Contribution Lawsuits Following Voluntary Cleanups

December 13, 2004

Today, in a closely watched case that will have significant implications for the business community, the United States Supreme Court announced an important decision limiting the scope of available claims under the federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. §9601.  In a 7-2 decision by Justice Thomas, the Supreme Court held that CERCLA Section 113(f)(1) does not authorize contribution actions by one potentially responsible party (“PRP”) against another PRP for costs incurred for a "voluntary" cleanup of environmental contamination.  Aviall Servs., Inc. v. Cooper Indus., Inc., 543 U.S. ___ (2004).

The Court interpreted the "clear meaning" of CERCLA's Section 113(f)(1) to establish a right of contribution for a PRP plaintiff only after it has been subject to a lawsuit under CERCLA Sections 106 or 107(a).  The Court declined to examine legislative history or otherwise engage in any statutory interpretation regarding the purpose of CERCLA, and found that the text itself was clear.

This dramatic decision marks an important new precedent in CERCLA authority and will have an immediate impact upon pending CERCLA cases throughout the United States.  Any party currently performing voluntary remediation, or considering a voluntary remediation, should carefully weigh the potential implications of this decision as part of its strategy to obtain contribution for its costs from other responsible parties.

Background of the Aviall Case

The underlying case was brought by Aviall Services, Inc. ("Aviall") concerning several industrial facilities purchased from Cooper Industries, Inc. ("Cooper") in 1981.  After acquiring the facilities, Aviall undertook a voluntary cleanup of the on-site environmental contamination after notifying Texas state regulatory authorities and being directed to clean up the site.  Texas authorities threatened to pursue an enforcement action but did not take any formal action.

In 1997, Aviall filed a lawsuit in Texas federal court against Cooper under CERCLA.  The trial court granted Cooper's summary judgment motion to dismiss the CERCLA claim on the ground that Aviall was precluded from asserting a Section 113 contribution claim given the absence of a Section 106 administrative action by the government, a Section 107(a) cost recovery action by the government or a private party, or a judicial or administrative settlement with a federal or state regulatory agency.  

On appeal, the Fifth Circuit initially affirmed the decision, and then, upon rehearing en banc, reversed itself and held that a PRP could obtain contribution under Section 113(f)(1) following a voluntary cleanup. Cooper then appealed to the Supreme Court.

Summary of Supreme Court's Decision

Justice Thomas's decision is succinct and to the point.  He started by observing that Section 113 of CERCLA creates two express rights of contribution in Section 113(f)(1) and in Section 113(f)(3)(B).  Section 113(f)(1) provides that "[a]ny person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title, during or following any civil action under section 9606 of this title or under section 9607(a) of this title."  Section 113(f)(3)(B) provides that a PRP also may seek contribution after it has entered into a settlement with the federal or state regulatory agency.  Aviall's contribution claim was brought under Section 113(f)(1).

After initially finding that the statute's language is clear and unambiguous, and thereby dispensing with any legislative or policy analysis, he concluded that all Section 113(f)(1) contribution claims must be brought "during or following any civil action" under CERCLA Section 106 or 107(a).  Aviall could not satisfy that requirement and therefore its claim must be dismissed.  Justice Thomas found this reading to be consistent with the language of Section 113 overall.  As the meaning of the text was clear, there was no reason to dig deeper.

The majority declined to address two related issues raised by Aviall and by the two dissenting justices: (1) whether Aviall, as an admitted PRP, could instead bring a Section 107(a) cost recovery claim; and (2) whether Aviall could still pursue an implied right to contribution under Section 107.  The Court found that these issues deserved further briefing and consideration in the lower courts, and remanded the case for further proceedings on those issues.

Analysis and Implications for Current and Future CERCLA Litigation

The Aviall decision runs counter to the widely accepted tenet in environmental circles that Section 113 of CERCLA did enable a private party plaintiff to bring a contribution action against another PRP following a voluntary cleanup.  The Court's opinion undoubtedly will spur an effort to amend CERCLA to provide an express right of contribution for voluntary cleanups as presumed prior to this decision.  Amending CERCLA has been problematic in the past, however.

The Aviall decision also opens the door to reexamination of another well-accepted issue in CERCLA litigation, as to whether a PRP can bring a Section 107(a) cost recovery claim.  Several circuit courts have adopted the view that PRPs like Aviall cannot bring Section 107(a) cost recovery claim, under the theory that such claims are limited to government agencies and "innocent" plaintiffs.  Instead, PRPs are limited to Section 113 contribution claims.  The issue has not been addressed by the Supreme Court and is now ripe for their adjudication.

Parties performing a voluntary remediation without formal agency action, or those considering doing so, are now faced with a dilemma.  This decision likely will lead to a need for greater governmental involvement in cleanup projects, to protect the ability to obtain cost recovery from other PRPs.  Waiting for federal and state authorities to initiate enforcement actions could lead to extensive delays, however, as such agencies may not be prepared for an onslaught of new cases.  Any business with current or future responsibilities for investigation and remediation of contaminated sites must carefully review this decision and its potential impacts on cost recovery.

Link to U.S. Supreme Court Decision in Aviall  (PDF).