• See other documents that cite the same legislation

Akzo Nobel Coatings, Inc. v. Aigner Corp.: The Settlement Credit Issue Answered for CERCLA Litigation?

Recipient of the Vinson & Elkins Best Student Casenote or Comment Award, 2000-2001, and Second Place in the 2001 Annual Environmental Law Essay Contest sponsored by the Environmental Law Section of the Louisiana Bar Association. The author extends special thanks to Professor Kenneth M. Murchison, James E. and Betty M. Phillips Professor of Law, Louisiana State University Paul M. Hebert Law Center, for his encouragement and assistance.

In Akzo Nobel Coatings, Inc. v. Aigner Corp.,1 the United States Court of Appeals for the Seventh Circuit held Akzo liable in contribution to Aigner for costs incurred in a response action2 under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA").3 The court found Akzo's liability to be approximately 13% of Aigner's costs minus the amount Aigner agreed to accept from third parties in settlement.4 Aigner incurred the costs as the result of a consent decree it entered with the Environmental Protection Agency. In the decree, Aigner and several other responsible parties agreed to pay the costs associated with the cleanup and remediation5 of a hazardous waste site. Aigner and the other responsible parties also entered into a private-party settlement agreement addressing the distribution of costs of the response action.

Akzo was not a party to the settlement. Aigner then sued Akzo for contribution, claiming Akzo was also a responsible party and should bear a portion of the response costs.6

The Seventh Circuit applied a dollar-for-dollar credit rule to determine Akzo's contribution liability. This decision is important because the cost associated with CERCLA response actions is high.7The decision is also important because it is the first appellate opinion addressing the issue of the appropriate settlement credit rule in a private party's action for contribution against a non-settling responsible party under the laws of CERCLA. The confusion concerning how the non-settling party's liability should be determined exists because Congress enacted a provision under CERCLA that expressly provides for the right of contribution in the private party context, but that provision does not state how settlement agreements should affect the contribution liability of non-settling parties.8 Most district courts have considered either the Uniform Comparative Fault Act9 or the Uniform Contribution Among Tortfeasors Act10 because each Act provides a method for calculating contribution liability when there is a private party settlement. The district courts, however, are split in their holdings.11

The Seventh Circuit's decision does not end the confusion because the court reversed the district court without adequately explaining its reasoning. The decision is a good one from the perspective of judicial economy and fairness, but the appellate court decision provide's little certainty in the law. Unless the United States Supreme Court decides to hear the issue, certainty will only be provided if Congress adopts a clear provision addressing this issue. This paper asserts that Congress should adopt the ruling of the United States Court of Appeals for the Seventh Circuit and explicitly declare that the non-settling party should receive a credit for the amount of the settlement. Furthermore, Congress should provide that the non- settling parties must pay an equitable percentage of the orphan shares, i.e., shares of the liability attributable to unknown or insolvent parties.12

Part I of this paper describes the facts and holding of Akzo Nobel Coatings, Inc. v. Aigner Corp.13 Part II offers background information on the law of CERCLA, the specific provisions addressing contribution rights, the jurisprudence, and the issues that remain unresolved after the Akzo decision. Part III describes the two uniform tortfea...

If you are already a vLex customer, Access Here