Opinion ID: 199558
Heading Depth: 3
Heading Rank: 3

Heading: The District Court Approval

Text: To assist in its assessment of Consent Decree I, t he district court held a two-day hearing to determine whether the proposed settlement was fair, both procedurally and substantively, reasonable, and consistent with CERCLA's objectives. United States v. Cannons Eng'g Corp., 899 F.2d 79, 84 (1st Cir. 1990). Procedurally, the court - 18 - found that [t]he negotiations were conducted openly and all parties were given an opportunity to participate. Davis II, 11 F. Supp. 2d at 189. Substantively, the court concluded that the consent decree met all requirements because the proposed settlement reflects a rational method of allocating liability in a manner that reasonably approximates each party's share of responsibility; the method is applied evenhandedly with respect to all PRP's and sufficient information is presented to enable the Court to determine whether that has been done. Id. at 192. In assessing the reasonableness of the consent decree, the court's chief concern was whether the public can be adequately compensated by a settlement in which the United States receives only a portion of the remediation cost from a party previously adjudged liable for the entire cost, id. at 186, a reference to the release of UTC from the Phase I judgment. According to the district court, under the terms of the settlement the United States would receive $27.5 million, plus the $5.8 million from the original defendants, leaving a $21.7 million shortfall in compensation for the projected cost of the cleanup. This issue distinguished the Davis case from others in which the United States settled before judgment. In those cases, compromising for a fraction of the response costs with a PRP that is potentially liable for the entire cost usually is justifiable on the ground that litigation might result in the United States recovering no - 19 - response costs at all. Id. at 192. The court thus framed the reasonableness question in terms of whether the amount by which the judgment has been discounted reasonably reflects the risk of reversal [on appeal], and called this a very close question. Id. at 193. The court acknowledged some remaining, albeit diminished, litigation risk associated with the claim against UTC. Id. The court also suggested that concern about releasing UTC from the judgment was mitigated by the fact that the United States could still sue the non-settlors for the $21.7 million shortfall, but recognized that this course of action seemed to involve much greater litigation risk than simply pursuing the judgment against UTC. Id. In resolving the issue, the court considered factors beyond an assessment of litigation risks. The court noted that the financial obligations imposed on UTC are considerably greater than the obligations assumed by the other 'carve-out' settlors, reinforcing UTC's substantial responsibility. Id. It also noted that given the deference accorded to the EPA's judgment in such matters, it cannot be said that the proposed discount is unreasonable. Id. The court said that the consent decree avoided an unduly harsh result for UTC, whereas the judgment would have saddled [it], unfairly, with liability for remediation costs that far exceed its fair share. Id. Acknowledging that UTC could pursue contribution actions against other PRPs, the - 20 - court still concluded that the consent decree was reasonable given the great difficulty of establishing entitlement to contribution. Id. Finally, the court found the consent decree to be consistent with the statute because it advanced the overriding goal of promptly and efficiently cleaning up hazardous waste sites. Id. Pursuant to its thorough opinion, the district court approved Consent Decree I on February 13, 1998, and entered final judgment on December 9, 1999. Consent Decrees II, III, IV and the Capuano decree were each summarily approved subsequently. Final judgment was also entered on these decrees in December 1999. On appeal, Ashland, a nonsettling PRP, lodges numerous objections to the approval of the consent decrees, including a jurisdictional objection. We assess these arguments.