United States v. Federal Resources Corp.
767 F.3d 873
9th Cir.2014Background
- CERCLA allows ability-to-pay settlements; CDA settled for $350,000 with CDA, approved by district court over FRC objections.
- FRC intervened, challenging lack of comparative fault analysis and consideration of CDA’s insurance when assessing ability to pay.
- Consent Decree amount based on CDA’s ability to pay, with EPA analysis rather than exact fault apportionment.
- District court approved the decree; FRC appeals, arguing procedural and substantive fairness defects under CERCLA.
- CERCLA permits ability-to-pay settlements; non-settling PRPs face disproportionate liability risk as part of the framework.
- Court defers to district court and EPA expertise, indicating potential for deference in complex settlements under CERCLA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether district court was required to perform comparative fault analysis | FRC: required to compare fault before approval | United States/CDA: not required; deference to district court | No; not required; defer to district court's discretion |
| Whether insurance evidence must be considered in ability-to-pay assessment | FRC: insurance increases CDA’s ability to pay | Government: investigation adequate; no clear error | No; district court’s reliance on government investigation stands |
Key Cases Cited
- United States v. Montrose Chem. Corp. of Cal., 50 F.3d 741 (9th Cir. 1995) (requires fair, reasonable CERCLA consent decree with deference to EPA)
- United States v. Aerojet Gen. Corp., 606 F.3d 1142 (9th Cir. 2010) (double-layer deference to EPA and district court in CERCLA consent decrees)
- United States v. Cannons Eng’g Corp., 899 F.2d 79 (1st Cir. 1990) (disproportionate liability and settlements encouraged by CERCLA framework)
- United States v. Charter Int’l Oil Co., 83 F.3d 510 (1st Cir. 1996) (substantive fairness requires some correlation with fault)