The Supreme Court recently issued its opinion in the closely watched case of PPL Montana, LLC v. State of Montana, 565 U.S. __ (2012), unanimously reversing and remanding a controversial Montana State Supreme Court decision granting Montana ownership of riverbeds underlying ten hydroelectric facilities on three of the state’s rivers. The Supreme Court’s ruling relieved PPL of its obligation to pay the state of Montana $41 million in back rent for use of the riverbeds, and likely quelled any fears in the hydropower industry that similar ownership theories would be advanced by other states seeking to fill empty coffers with millions of dollars in back rental payments. The Supreme Court’s opinion, while providing clarity on the proper application of the federal navigability-for-title test, limits its reasoning on navigability to those instances in which property rights between the states and the federal government are in question, and is explicitly inapplicable to determinations of whether waters are “navigable” for purposes of federal regulatory programs.
This week, in the case of Solutia, Inc. and Pharmacia Corp. v. McWane, Inc. (Solutia), the Eleventh Circuit held that a party that performs a cleanup in compliance with a consent decree has no right under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) section 107(a) to recover its cleanup costs. This case represents a continuance of the courts’ clarification of when claims can be brought under CERCLA sections 107(a) and 113(f). To understand the significance of this case, it is best to start by examining the United States Supreme Court cases that proceeded it, beginning with the Supreme Court’s decision in Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157 (2004).
In Cooper v. Aviall, the Supreme Court turned decades of CERCLA jurisprudence on its head. Relying on the plain language of CERCLA section 113(f), the court held that a potentially responsible party (“PRP”) can only seek contribution under section 113(f) from other parties “during or following” a civil action under CERCLA section 106 or 107. Therefore, a party that had not been sued and had not entered into a settlement could not seek contribution under CERCLA section 113(f). The court did not address when a party could bring an action under section 107.