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Ruling May Arm Nonsettlors In Challenging Multi-Party Settlements Under CERCLA


In a recent split decision, the Ninth Circuit Court of Appeals armed nonsettling potentially responsible parties (PRPs) with ammunition to challenge settlements under CERCLA.  The Court in Arizona v. Raytheon Co., ___ F.3d ___, 2014 WL 3765569 (9th Cir. 2014) rejected the district court’s approval of Arizona Department of Environmental Quality’s Consent Decree with de minimis PRPs as unduly deferring to the ADEQ’s judgment.  On remand, the lower court was ordered to independently scrutinize the terms of the settlements, by comparing total settlement dollars against each settlor’s portion of liability.  Consent Decrees are more susceptible to challenges where the court has failed to go through this process of independent review.

As a result of this decision, agencies and PRPs are apt to ensure submittal of sufficient evidence in the court record to support the cost/liability allocation.  This could pose new challenges.  Oftentimes in the early stages of investigation and settlement, there just is not that much information available.  What the Ninth Circuit decision could be signaling is that further facts need to be developed to support settlement.

A Principal in our Environmental group, Mindy DeYoung, was recently quoted by Bloomberg BNA Toxics Law Reporter in an article analyzing the reach of Arizona v. Raytheon.

To continue reading the article in its entirety, click here.