Opinion ID: 195592
Heading Depth: 2
Heading Rank: 2

Heading: Fidelity to the Statute.

Text: Among the overarching goals of CERCLA recognized by the courts are accountability, the desirability of an unsullied environment, and promptness of response activities. Cannons, 899 F.2d at 91. Appellants insist that Judge Woodlock's endorsement of the consent decrees undermined one of these goals accountability in two separate ways. Appellants' main argument is that the allocation method embodied in the first consent decree failed to specify each individual generator's and transporter's degree of culpability. As a factual matter, appellants are correct; the consent decrees did no more than assign payment responsibilities to classes of potentially responsible parties (PRPs), leaving the question of allocation inter sese to the class members themselves. But we see no reason to prohibit such an approach. Realistically, a government agency, in the midst of negotiations, is in no position to put so fine a point on accountability. We, therefore, endorse, in general, EPA's practice of negotiating with a representative group of PRPs and then permitting the group members to divide the burden of the settlement among themselves. This is, as one court has said, a practical and 3Appellants also disparage the adequacy of the generator/transporter settlement from a financial standpoint. As we explain in Part III(B), infra, their criticism is unfounded. 9 reasonable process for achieving settlements. United States v. Acton Corp., 733 F. Supp. 869, 873 (D.N.J. 1990). It is also faithful to CERCLA's goals. After all, the ultimate measure of accountability in an environmental case is the extent of the overall recovery, not the amount of money paid by any individual defendant. Over and beyond these generalities, there is an especially compelling reason for accepting a class-wide allocation here. Judge Woodlock supportably found that appellants' records were wholly inadequate. A lack of reliable records renders it impossible, as a practical matter, for a court to make reasoned findings concerning the relative contributions of particular generators or transporters to the aggregate harm. So it is here. And, moreover, because the shortage of records can be directly attributed to appellants' stewardship of the Site, they can scarcely be heard to complain that the settling parties resorted to, and the court then approved, a class-wide allocation. Appellants' fallback position is predictable: in a refrain evocative of one of their attacks on the decrees' reasonableness, see supra note 3, they insinuate that the first consent decree compromised the goal of accountability by setting too modest a price tag on the generator/transporter settlement. Appellants have an easily envisioned stake in this aspect of the matter: as the sole non-settling defendants, they are potentially liable for the full difference between the costs of 10 cleanup and the total amount paid by the settling PRPs. See 42 U.S.C. 9613(f)(2), 9622(h)(4); see also United Technologies Corp. v. Browning-Ferris Indus., Inc., F.3d , (1st Cir. 1994) [No. 93-2253, slip op. at 17-18] (explaining interface between settlement and liability of PRPs for contribution in CERCLA cases). If, say, the overall clean-up costs eventually total $70,000,000 the highest of the differing estimates that have been bandied about appellants are staring down the barrel of a $21,000,000 shortfall. Appellants claim their aggregate net worth amounts to only a tiny fraction of this exposure. On this basis, they contend that the plaintiffs sold out too cheaply, for many of the settling parties have very deep pockets. Although we understand appellants' consternation, these considerations are virtually irrelevant. In the first place, the district court found that appellants are liable for all clean-up costs and that finding is not disputed on appeal. As is true of any assessment of compensatory damages, the liable party's ability to pay should not influence the amount of the assessment. See generally 22 Am. Jur. 2d Damages 952 (explaining that evidence of a defendant's pecuniary resources is generally inadmissible in cases where only compensatory damages are recoverable); Vasbinder v. Ambach, 926 F.2d 1333, 1344 (2d Cir. 1991) (applying principle). To be sure, at the next step relative wealth may have some practical bearing. When defendants are jointly and severally liable, the prevailing party may choose to collect the 11 entire indebtedness from one or more of the liable parties, to the exclusion of others. See, e.g., McDonald v. Centra, 118 B.R. 903, 914 (D. Md. 1990), aff'd, 946 F.2d 1059 (4th Cir. 1991), cert. denied, 112 S. Ct. 2325 (1992). But when, as in this case, liability is contested, much more than the PRPs' relative affluence must be considered. With this in mind, the proper way to gauge the adequacy of settlement amounts to be paid by settling PRPs is to compare the proportion of total projected costs to be paid by the settlors with the proportion of liability attributable to them, and then to factor into the equation any reasonable discounts for litigation risks, time savings, and the like that may be justified. Inspected through that lens, the first consent decree looks entirely appropriate. The district judge explicitly found that the generators and transporters collectively were responsible for fifty percent of the environmental damage. Under the terms of the negotiated settlement, the payment to be tendered by the generators and transporters as a group (approximately $36,000,000) represents more than half of the highest estimate of aggregate clean-up costs ($70,000,000). Thus, the settlement is favorable to the government agencies even before allowances are made for appropriate discounts, such as litigation risks, the benefit derived from shelving the 12 counterclaims, and the desirability of expediting the cleanup.4 Accordingly, appellants' accountability challenge lacks force.