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In re- 450 S. WESTERN AVE., LLC,

Summarizing by Bradley Pearce

U.S.A. v. Federal Resources Corp.

United States v. The Coeur D'Alenes Company, Case 12-36065 (9th Cir. September 16, 2014)
The district court did not abuse its discretion in failing to consider comparative fault and focusing solely on a company's limited ability to pay in assessing the fairness of a CERCLA consent decree. Although, this would create disproportionate liability for other responsible parties, this is within CERCLA's contemplation, promotes early settlements, and deters financially unproductive litigation. With respect to FDC's argument that the district court did not adequately question the Government's investigation into CDA's ability to pay, the panel held the government retained a financial analyst to review financial health and CDA hired an expert to investigate insurance coverage and turned these findings over. In short, FDC did not conclusively demonstrate the existence of insurance or that the district court abused its discretion in accepting the government's investigation, which followed established procedures.
Procedural context:
Appeal from a district court order approving a CERCLA Consent Decree capping a party's liability at $350,000 based on company's ability to pay.
As relevant to the ruling, the United States brought two CERCLA lawsuits against two separate potential responsible parties ("PRPs"), The Coeur d'Alenes Company ("CDA") and the Federal Resources Corporation ("FRC") related to hazardous waste cleanup at a mine site in Idaho. CERCLA liability is generally joint and several, but defendants are generally allowed to seek contribution from other liable parties. However, a party can cut off its liability to other parties by entering into a statutorily authorized and judicially approved consent decree procedure. In this case, simultaneous with filing the lawsuit against CDA, the government filed a negotiated consent decree that capped CDA's liability at $350,000. This figure did not consider CDA's proportionate liability in relation to the total clean up cost, but only considered CDA's ability to pay without risking the company's failure or bankruptcy filing. FRC objected, asserting that the court must consider CDA's degree of fault, also questioning the government's analysis of CDA's financial situation and the potential existence of insurance coverage.
Circuit Judges A. Wallace Tashima and Mary H. Murguia; District Judge Cormac J. Carney, sitting by designation

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