In a December 19, 2012 decision, the U.S. Court of Appeals for the Seventh Circuit ruled that a plaintiff that qualified for a Superfund contribution action is barred from also bringing a cost recovery action (Bernstein v. Bankert, Nos. 11-1501 and 11-1523 [7th Cir. Dec. 19, 2012]). The appeals court found that the trustees of a trust fund at a landfill site in Indiana waited too long to sue former owners for contribution for work that had been completed under a 1999 settlement agreement. However, the court concluded that each settlement a party has with EPA for a single site can result in a distinct payment obligation, which could be the basis for a separate Superfund claim. Therefore, the trustees could still sue for cost recovery under a 2002 agreement. This decision partially reversed a district court decision, and the case was remanded for further proceedings on the reinstated claims.
The Environmental Chemical and Conservation Company (Enviro-Chem) performed waste handling, waste disposal, and recycling of industrial and commercial wastes at three sites near Zionsville, Indiana from 1977 until May 1982, when the company went bankrupt. All three sites were polluted. A fund was created to both finance and oversee the cleanup at one of the sites, called Third Site, which is a CERCLA site. The plaintiffs in the current case were the trustees of the Third Site trust fund. The defendants in the current case were the former owners of the site (i.e., the Bankerts), their corporate entities, including Enviro-Chem, and their insurers.
Initially, EPA's cleanup focused on the other two sites, but volatile organic compounds (VOCs) and semi-volatile organic compounds were found in samples of the soil, groundwater, seepage soil, and seepage water from Third Site. In 1988, EPA collected surface water samples from a nearby creek, and found elevated VOCs adjacent to, and downstream of, the site. In other words, Third Site was polluted, and was releasing pollutants into a creek that flowed into a reservoir that was a drinking water supply for the city of Indianapolis.
In 1996, EPA issued a unilateral administrative order that included a plan to realign the creek. The realignment was completed in September 1996. In 1999, EPA entered an Administrative Order by Consent (AOC) with a number of potentially responsible parties (PRPs). The 1999 AOC had two separate parts: one part dealt with non-premium respondents,
and one part dealt with premium respondents. The non-premium respondents agreed to undertake an engineering evaluation and cost analysis (EE/CA) of removal alternatives for the site, as well as to settle a trust to pay for the EE/CA and other necessary work. The trust would be used to reimburse EPA for past and future response and oversight costs for the EE/CA project. The premium respondents were alleged to be de minimis contributors to the Third Site contamination, and were entitled to settle out with a one-time monetary contribution to the trust.
In 2000, the non-premium respondents obtained EPA approval of the final EE/ CA report, as...