If there is a reasonable basis for divisibility of harm, apportionment may be appropriate even where CERCLA liability is joint and several, notes the Sixth Circuit
Eagle-Picher Technologies, LLC (“EP Tech”) had acquired a leasehold interest in a manufacturing plant. The plant had manufactured water-activated batteries, printed circuit boards, and cable connectors. As a result of the manufacturing activities, TCE was discharged and detected in the groundwater. EP Tech filed for Chapter 11 bankruptcy in 2005. The United States, on behalf of EPA and the Department of Interior, filed a claim in the bankruptcy proceeding against EP Tech under CERCLA to recover the cost of cleaning up hazardous waste from the alleged release.
U.S. Bank, the trustee, argued that the debtor was not liable under the CERCLA for hazardous waste releases that occurred before it acquired the property and issues of fact existed as to whether the debtor was responsible for contamination located a mile and a half from the plant or for future clean up costs. The bankruptcy court found EP Tech liable for $357,246 of already-incurred costs and $8,735,434 in estimated future costs for the clean-up of groundwater and soil contamination near a vacant manufacturing plant in Socorro, New Mexico. The trustee appealed to the district court, which affirmed.
In U.S. Bank N.A., Trustee v. EPA, 563 F.3d 199 (6th Cir. 2009), the Court of Appeals addressed the issue. The Court found that the debtor, as the successor company, expressly agreed to assume liability for all hazardous substance disposals at the plant that the predecessor company incurred as an owner and operator of the site at the time of the disposal of hazardous substances. In passing, the Court noted that when a reasonable basis for divisibility exists, then apportionment may be proper even where liability is joint and several. However, here the Court noted that the facts preclude the the conclusion that the environmental harm off-site was distinct from the harm at the manufacturing plant. Thus, the Court found that there was no evidence to suggest a "reasonable basis" for apportioning liability between the debtor and an unknown second source.