In January, 2007 the United States Supreme Court agreed to review a case that should decide, once and for all, the circumstances under which a company that performs environmental cleanup work at a contaminated property has the right to sue other co-responsible parties to make them help pay for that cleanup. This decision should bring more certainty to a critical issue that affects almost every hazardous waste cleanup and industrial property transaction. In the meantime, parties involved with such matters will have to try to make the best decisions they can with rules that are sometimes unclear. As almost everyone with environmental responsibility for an old landfill, manufacturing plant or industrial property knows, once upon a time there was a “right of contribution” in the federal environmental laws. If a potentially responsible party (“PRP”) performed or paid for an environmental cleanup at a “facility” (any location where “hazardous substances” had been stored, treated, transported, disposed or came to be located), that PRP could sue other co-responsible parties to make them contribute their fair shares towards the costs of cleaning up the property. This right existed without regard to whether the PRP did the work “voluntarily” or because a governmental regulator (for example, the United States Environmental Protection Agency (EPA) or a state agency such as Missouri Department of Natural Resources (MDNR) or Kansas Department of Health and the Environment (KDHE), told the PRP to do the work or approved the cleanup work when done. Then in December, 2004 the United States Supreme Court decided Cooper Industries, Inc. v. Aviall Services, Inc., 125 S.Ct. 577 (2004), and that broad right to sue for contribution evaporated. In Cooper Industries v. Aviall, the Supreme Court looked at Section 113(f)(1) of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund), 42 U.S.C. §9613(f)(1), and determined that the statute only provides a right to seek contribution from other PRPs if the party demanding contribution first has been the subject of a “civil action” under CERCLA Section 106 (to compel performance of a cleanup) or Section 107(a) (to recover back cleanup costs already spent). Generally speaking, only the federal or state governments file such suits, so unless a PRP is “lucky” enough to have been hauled into court by EPA or a state environmental agency, that PRP cannot sue for contribution under Section 113(f)(1) to make anyone else help pay for a cleanup. At the time the Cooper Industries v. Aviall decision came down, prior case law in almost every federal trial and appeals court held that because private PRPs had contribution rights under CERCLA Section 113(f)(1), they could not sue other companies under CERCLA Section 107(a) for cost recovery. Those courts reasoned that giving PRPs a choice between seeking contribution under Section 113(f)(1) and cost recovery under Section 107(a) would eviscerate Section 113(f)(1), because Section 107(a) has a longer time limit to file suit and can be used to impose joint and several liability for 100 percent of the costs of cleanup. Section 113(f)(1), in contrast, requires a court to allocate responsibility among all the co-liable parties “using such equitable factors as the court determines are appropriate.” In other words, Section 107(a) is better for plaintiffs than Section 113(f), and if PRPs had a choice, they would all choose Section 107(a) and leave Section 113(f) in the dust. Since that December, 2004 Supreme Court decision, a number of federal district trial and circuit appellate courts have reexamined the interaction between CERCLA Sections 113(f) and 107(a). Many of those courts express discomfort that parties who performed or paid for cleanup work at a site would be forced to bear 100 percent of the costs of that remediation, or find themselves condemned to navigate through 50 states’ dramatically different environmental statutes and interpretations of common law. The courts also worry that without the right to seek contribution, companies will be less likely to volunteer to perform an environmental cleanup or will refuse an invitation to investigate or remediate contaminated properties absent some enforcement activity by EPA or a state. Finally, the courts find it difficult to watch the United States take on the role of environmental enforcer via the efforts of EPA and the Environmental Enforcement section at the United States Department of Justice (DOJ), while at the same time refusing to perform or pay for contamination caused by the Department of Defense and other federal agencies represented by DOJ’s Environmental Defense Section. As the various trial and appellate courts sift through the cases before them, plaintiffs argue that notwithstanding the Cooper Industries v. Aviall decision, a PRP who performs or pays for environmental cleanup work still should be able to get money back from other co-liable PRPs. Some of these plaintiffs couch their claims as an implied right to contribution under Section 107(a). This was a right that did, indeed, exist in some circuits before Congress added Section 113(f) to CERCLA in 1986. Other plaintiffs rely on the cost recovery language of Section 107(a) itself, which gives to the United States, the states, and Native American tribes a right to sue to recover “costs of response not inconsistent” with the National Contingency Plan (NCP) (a federal regulation specifying how investigations and cleanups are to be performed), and to “all other persons” the right to recover “costs of response consistent” with the NCP. As of January, 2007 four federal appellate circuits have ruled on the existence of an implied contribution or express cost recovery right under the Superfund law. Three of those circuits have found in favor of the plaintiffs and allowed them to return to the trial courts to try and prove up their claims for cleanup money from other PRPs. These decisions apply in the Second Circuit (Connecticut, New York, and Vermont), the Seventh Circuit (Illinois, Indiana, and Wisconsin), and the Eighth Circuit (Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota). Consolidated Edison Co. v. UGI Utilities, Inc., 423 F.3d 90 (2d Cir. 2005); Metropolitan Water District v. North American Galvanizing & Coatings, Inc., — F.3d —, 2007 WL 102979 (7th Cir., Jan. 17, 2007); and Atlantic Research Corp. v. United States, 459 F.3d 827 (8th Cir. 2006). One federal appellate court has disallowed any right to recovery of cleanup costs by a private PRP under CERCLA unless the PRP first was sued or entered into an administrative or court-approved settlement – the Third Circuit (Delaware, Pennsylvania, New Jersey, and the Virgin Islands). E.I. DuPont de Nemours & Co. v. United States, 460 F.3d 515 (3d Cir. 2006). Apparently a 3-1 split among the circuits is enough to interest the judges of our highest court. On January 19, 2007 (two days after the Seventh Circuit issued its ruling in the Metropolitan Water case), the Supreme Court accepted certiorari in the Eighth Circuit’s Atlantic Research decision. Docketed as Supreme Court Case No. 06-582 under the caption United States v. Atlantic Research Corp., the matter reportedly is scheduled for oral argument in April, 2007 and should be decided by the end of the summer. Accordingly, interested parties should know relatively soon whether, and under what circumstances, a PRP who performs a “voluntary” environmental cleanup will have the right to make others pay for all or part of those cleanup costs. In the meantime, a PRP who previously chose to investigate or clean up a property probably will want to continue that work. The PRP may wish to follow the NCP regulations in doing so, in order to preserve any existing or future contribution or cost recovery rights. A PRP who owns contaminated property that needs to be studied or remediated, or who has been asked to join in investigating or remediating somebody else’s property (i.e., an old landfill or recycling site), may want to factor contribution or cost recovery issues into the “perform or not” decisionmaking process. Depending on the location of the property, such a PRP may have a controlling federal court decision to use for guidance on the existence and limits of any potential contribution or cost recovery rights until the Supreme Court issues its decision. Finally, if a PRP is considering acquiring contaminated property, that acquisition decision should take into account contribution and cost recovery rights (or lack of rights), costs, and risks.  The Supreme Court did not disturb contribution rights under a different part of the Superfund contribution statute, Section 113(f)(3)(B). To invoke a right to sue under that part of the law, however, a PRP again must first negotiate with EPA or the state and sign a court-approved or administrative “settlement.” Unfortunately, after Cooper Industries v. Aviall several courts ruled that the typical regulatory administrative consent order (which requires a party to “investigate and study” or “clean up until the Agency says stop”), does not really settle anything at all and so may not authorize a contribution lawsuit seeking cleanup dollars.