The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)—as part of its dual goals of cleaning up hazardous-waste sites and ensuring that the polluter pays for that cleanup—gives private parties two mutually exclusive causes of action: cost recovery and contribution. Contribution is available in limited circumstances, including if the party has “resolved” its liability with the government. But CERCLA does not define this operative term. Federal courts are split over how the structure of a settlement resolves liability. Several courts follow Bernstein v. Bankert, which held that any conditions precedent and nonadmissions of liability strongly suggest that a party has not yet resolved its liability. The Ninth Circuit’s recent case, ASARCO LLC v. Atlantic Richfield Co., said liability is resolved if the settlement determines the party’s obligations with “certainty and finality.” Bernstein deviates from CERCLA’s text and policy, leading to serious inconsistencies in the interpretation and application of the statute. ASARCO injects uncertainty into the statute, which disincentivizes settlements. When the stakes are the reallocation of billions of dollars and the amelioration of the most notorious environmental disasters, getting it right is paramount. This Note proposes a bright-line rule—liability is resolved when the settlement contains any covenant not to sue, conditional or unconditional—and argues that this reading cleans up many of the issues the current circuit split imparts on the statute.
Resolving "Resolved": Covenants Not to Sue and the Availability of CERCLA Contribution Actions,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol119/iss1/6