New Jersey Department of Environmental Protection v. American Thermoplastics Corp, No. 18-2865 (3d Cir. 2020)
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In 1948-1981, New Jersey's 65-acre Combe Superfund Site functioned as a municipal landfill. In 1978, Carter purchased the Site. Compaction conducted operations and transported hazardous materials to the Site. In 1983, the U.S. Environmental Protection Agency (USEPA) added the Site to the National Priorities List. USEPA and the New Jersey Department of Environmental Protection (NJDEP) entered into a cooperative agreement that designates NJDEP as the lead agency to oversee the cleanup. USEPA contributed 90% of the cost of managing and performing the work; NJDEP paid 10%. The agreement expressly “negated and denied” the authority of either party to “attempt to negotiate on behalf of the other.”
The United States did not file a claim against Carter in its bankruptcy case. In 1983, USEPA notified Carter and others that they were potentially responsible parties (PRPs) under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9601, for the cleanup costs. In 1991 the Bankruptcy Court approved a settlement between Carter and the NJDEP with respect to the Site. In 1998, the United States and NJDEP sued several PRPs; they entered into a global consent decree with several parties (including Compaction) in 2009 for $62.6 million. Compaction consented to a judgment of $26 million but is not obligated to pay unless its recoveries from CERCLA contribution actions against other PRPs exceeds at least $11 million. Carter was not a party to the Decree or the Judgment.
Compaction sought contribution from Carter in 2011. The district court granted Carter summary judgment, reasoning that the NJDEP Settlement protected it from contribution. The Third Circuit reversed. A polluting party’s settlement with a state does not protect it from lawsuits seeking contributions toward expenditures made by the federal government on the same site.
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