District Court Finds EPA's Involvement in Cleanup Unnecessary to Deem Settlement between State and Private Party "Judicially Approved"

May 8, 2009
Client Alert Newsletter May 2009

In Westinghouse Electric Co. v. United States, the U.S. District Court for the Eastern District of Missouri recently held that a state settlement with a private party, in the absence of an express delegation from the Environmental Protection Agency ("EPA"), constitutes a judicially approved settlement under the Comprehensive Environmental Response Compensation and Liability Act ("CERCLA") for purposes of triggering Section 113 private party contribution rights, although there remains a split of authority on the issue.

In Westinghouse, the Court reversed its July 2008 decision denying Westinghouse's Section 113 claim against companies that once either owned or operated a nuclear fuel facility on the property, including the United States. The earlier decision held that the consent decree with Missouri could not, as a matter of law, constitute a "judicially approved settlement" under Section 113 because Missouri had never entered into a Section 104 cooperative agreement with the EPA related to the contaminated property. In reversing the prior ruling issued by a previous judge, the Court held that the state did not need EPA involvement to clean up the site on its own and then sue under Section 107 and therefore, the consent decree could be the basis of a contribution claim because it stemmed from a Section 107 action filed by Missouri against Westinghouse.

Ironically, the Court noted that its finding was based in part upon the United States' support of its position, even though the United States is one of the targeted contribution defendants in the Section 113 action. In this regard, the United States argued in its brief that "States have authority to recover response costs under CERCLA Section 107(a)(4)(B) absent a delegation of authority from the United States Environmental Protection Agency" and therefore, the consent decree may have triggered contribution rights by Westinghouse. The Court's decision in Westinghouse is consistent with decisions from the Ninth and Second Circuit Court of Appeals, although more recent contrary decisions have been issued from the Northern and Western District Courts of New York and the District Court of Arizona.