Environmental – Avoid CERCLA Consent Orders After Cert. Denial in Hobart
By Norman Bernstein of N. W. Bernstein & Associates, LLC posted in Environmental on Tuesday, January 20, 2015.
The Supreme Court on January 20, 2015 denied certiorari in the Hobart case. As to private PRPs, after this denial, a company that wants to cooperate with EPA on a CERCLA environmental cleanup would be well advised to insist that EPA issue a unilateral 106 Order and respectfully decline to sign any consent order. In that way, the company would preserve the right to bring a 107 action against those that don’t settle (a company receiving a 106 Order has not resolved its liability to the United States). It should retain the benefit of the longer statute of limitations, and would not have submitted to stipulated penalties, nor waived any defenses to exorbitant oversight costs. Additionally, if there is a dispute about the remedy, at least in the Seventh Circuit, EPA cannot get a permanent injunction but is limited to statutory penalties. In theory, EPA could hire a contractor to do the work and sue for treble damages, but at least in the past it has been reluctant to take that course.
The alternative for private parties, after Hobart, is to sign a consent order, be limited to a contribution action, have the shortest possible statute of limitations imposed on any contribution action, be subject to stipulated penalties, and waive defenses as to oversight costs.
Federal PRPs will be the main beneficiaries of the Hobart case since they are immune from suit by EPA, and at least as to recently issued consent orders that resolve liability, can only be sued by private parties in contribution thereby avoiding any risk of joint and several liability. Moreover, the contribution actions under Hobart are subject to the short three years from the date of the consent order statute of limitation.