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Reichhold, Inc. v. United States Metals Refining Company

03-453 (U.S. Dist. Ct. D. N.J. 2004) (Unpublished)

ENVIRONMENTAL LIABILITY; CERCLA; SPILL ACT—Liability under CERCLA and the Spill Act is several; therefore a potentially responsible person cannot recover from others because its only liability in the first place was its fair share of the cleanup costs.

A metal refining company owned a site at which it operated one of the world’s largest secondary copper smelters and refineries. During its ownership, metal contamination may have occurred. The refinery sold the site in the early 1960s. The buyer may then have discharged hazardous substances. The site was then repeatedly sold, each new buyer possibly contaminating the site even further. In the mid-1980s, the first buyer began dealing with the New Jersey Department of Environmental Protection (NJDEP), which was concerned about the possible contamination. In the 1990s, the first buyer approached the refining company regarding the alleged contamination and a possible claim against it. The refinery and the buyer then entered into a settlement agreement in which the buyer received a certain amount for recovery costs. After entering into this agreement, the buyer continued working with the NJDEP.

In 2002, the first buyer submitted a Remedial Action Workplan (RAWP) to NJDEP. It was approved in January 2003. After NJDEP’s approval, the buyer brought an action against the refinery under CERCLA and the Spill Act seeking recovery for damages suffered and seeking response costs incurred to correct the contaminated site. In response, the refinery sued all of the subsequent owners of the site, alleging that they all released hazardous substances on the site or that they were owners when such substances were released. The refinery was seeking contribution under the Spill Act as well as under section 113 of CERCLA in the event it was found liable to the first buyer for relief sought in connection with the site. The current owner moved to dismiss the refinery’s suit, arguing that the refinery was only severally liable to the first buyer, and therefore it was only liable for its pro-rata share of the environmental harm to the site, making it ineligible for contribution under section 113(f) of CERCLA and both section 58:10-23.11f(a)(2) of the Spill Act.

A “potentially responsible person” (PRP) may recover from another PRP the portion of its costs in excess of its pro-rata share. To maintain an action for contribution under CERLCA or the Spill Act, the refinery had to show that the liability it would incur would be in excess of its pro-rata share. The Court concluded that the refinery failed to meet its burden because liability under CERCLA and the Spill Act is several; therefore, the refinery could not incur costs greater than its fair share of the response costs expended by the first buyer. If the refinery were found liable to the first buyer, because it was only severally liable, it would not incur expenditures in excess of its fair share of liability. Thus, since it would not be paying more than its fair share, it was not entitled to contribution from other potentially liable owners or from other third party defendants. For that reason, the Court dismissed the refinery’s claim.

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