On June 11, in a unanimous opinion written by Justice Thomas, the United States Supreme Court resolved the key question left open by its decision three years ago in Cooper Industries, Inc. v. Aviall Services, Inc., 543 U.S. 157 (2004). In United States v. Atlantic Research Corp., the Court held that a PRP that voluntarily cleans up a contaminated site may bring a cost recovery action against other PRPs under Section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). In Cooper, the Court held that a PRP could not bring a contribution claim under Section 113 against another PRP unless an action had first been filed against the plaintiff PRP under Section 106 or 107. Following Cooper, the circuits had divided on whether the only avenue for recovery by a PRP against another PRP is a contribution claim under Section 113. In Atlantic Research, the Court upheld the judgment of the Eighth Circuit that PRPs are not confined solely to a contribution action under Section 113 but also have a direct cause of action for cost recovery under Section 107. It therefore rejected the contrary reading of the Third Circuit in E.I. DuPont de Nemours and Co. v. United States, 460 F.3d 515 (3d Cir. 2006).


Atlantic Research Corp. (ARC) retrofitted rocket motors for the United States government at a property leased through the Department of Defense. The process resulted in wastewater and burned fuel that contaminated the soil and groundwater on the property. ARC cleaned the site at its own expense and then sought to recover costs from the government under Section 107(a) and Section 113(f). The district court found that ARC's Section 113(f) claim was foreclosed by the Supreme Court's decision in Cooper Industries. ARC subsequently amended its complaint to seek relief under Section 107(a)(4)(B). The government moved to dismiss, arguing that Section 107(a)(4)(B) did not allow PRPs to recover response costs. The trial court granted the motion to dismiss, but the Court of Appeals for the Eighth Circuit reversed, holding that Section 113(f) did not provide the exclusive means by which PRPs may recover cleanup costs.

The Supreme Court's Decision

The Supreme Court held that Section 107(a)(4)(B) provides an express cause of action for cost recovery for PRPs that incur cleanup costs voluntarily. The Court relied on the “plain language” of Section 107(a)(4)(B) and the “symmetry” between subsections (4)(A) and (4)(B), reasoning that subsection (B) must be read together with subsection (A) to conclude that all entities other than the governments listed in (A) can seek cost recovery under (B). The Court rejected the government's contrary interpretation to limit Section 107(a)(4)(B) to "innocent landowners" and thereby exclude PRPs altogether, explaining that it “makes little textual sense,” would “destroy the symmetry” between the subsections, and would “reduce the number of potential plaintiffs to almost zero, rendering Section 107(a)(4)(B) a dead letter.” The Court also rejected the government's argument that this reading would render "any other person" in Section 107(a)(4)(B) superfluous, stating that the “hesitancy to construe statutes to render language superfluous does not require [the Court] to avoid surplusage at all costs. It is appropriate to tolerate a degree of surplusage rather than adopt a textually dubious construction that threatens to render the entire provision a nullity.”

The Court then distinguished the rights and remedies under Sections 107 and 113. First, the Court held that Section 107 provides a cause of action for cost recovery rather than for contribution. The government unsuccessfully argued that the term “contribution” is synonymous with any apportionment of expenses among PRPs. However, “[n]othing . . . suggests that Congress used the term 'contribution' in anything other than [the] traditional sense.” Contribution and cost recovery are complementary but distinct causes of action dependent on “different procedural circumstances.” Thus, Section 113(f)(1) authorizes a suit before or after the establishment of common liability stemming from an action instituted under Section 106 or Section 107. If a PRP pays money to satisfy a settlement agreement or a court judgment, it may then pursue a contribution action under Section 113(f)(1) to establish an equitable distribution of common liability among liable parties.

By contrast, the Court concluded that “Section 107(a) permits recovery of cleanup costs but does not create a right to contribution.” Under Section 107(a), a private party does not need to establish liability to a third party; however, the PRP can only recover costs incurred in cleaning up a site. A party does not incur its own costs of response when payment is made to satisfy a settlement agreement or court judgment; instead, the party has reimbursed other parties for costs that those parties incurred. In this manner, “Section 107(a) permits cost recovery (as distinct from contribution) by a private party that has itself incurred cleanup costs.”

Further differentiating between Sections 107 and 113, the Court also held that a PRP cannot choose whether or not to proceed under Section 107 or Section 113. “The choice of remedies simply does not exist.” The two remedies are generally mutually exclusive, and a PRP “cannot simultaneously seek to recover the same expenses” under the two provisions. Notwithstanding the above, however, the Court acknowledged that some situations might arise in which the remedies under Section 107(a)(4)(B) and Section 113(f) might overlap. For example, the Court recognized that a PRP may sustain expenses pursuant to a consent decree following a suit under Section 106 or Section 107(a). Nonetheless, the Court expressly chose not to decide whether “compelled costs of response are recoverable under Section 113(f), Section 107(a), or both.” Instead, the Court found it sufficient to note that costs incurred voluntarily are recoverable only by way of Section 107(a)(4)(B), whereas costs of reimbursement to another person pursuant to a legal judgment or settlement are recoverable only under Section 113(f).

The Court also rejected three additional concerns raised by the government. First, the government contended that a PRP would effectively be permitted to circumvent the shorter statute of limitations under Section 113(f) by choosing between Section 107(a) and Section 113(f). However, the Court explained that, because a PRP cannot elect which statute to proceed under, “the PRP cannot choose the 6-year statute of limitations for cost-recovery actions over the shorter limitations period for Section 113(f) contribution claims.” Second, the government also contended that a PRP would be able to avoid equitable apportionment provided under Section 113(f) by seeking joint and several liability under Section 107(a). Again, the Court concluded that a choice of remedies does not exist under Sections 107 and 113. In terms of the standard for a cost-recovery action under Section 107, the Court “assume[d] without deciding that Section 107(a) provides for joint and several liability.” To avoid the possibility of excessive or inequitable recovery in a Section 107 action, the Court suggested that “a defendant PRP in such a Section 107(a) suit could blunt any inequitable distribution of costs by filing a Section 113(f) counter-claim.” Resolution of such a counter-claim would necessitate the equitable apportionment of costs among all liable parties, including the PRP that filed the Section 107(a) action.

Finally, the government contended that the Court’s interpretation would eviscerate the settlement protection in Section 113(f)(2). The Court flatly rejected this concern, stating that “permitting PRPs to seek recovery under Section 107(a) will not eviscerate the settlement bar set forth in Section 113(f)(2).” The settlement bar is limited to contribution and “does not by its terms protect against cost-recovery liability under Section 107(a).” Moreover, the Court found it doubtful that the alleged loophole would have the effect of discouraging settlement in any event. Furthermore, the Court observed that “a district court applying traditional rules of equity [in a Section 107 cost-recovery action] would undoubtedly consider any prior settlement as part of the liability calculus.”

The Significance of Atlantic Research

In answering the question left open in Cooper Industries, the Court allows a PRP that voluntarily cleans up a contaminated site, without waiting for an enforcement action under Section 106 or 107, to bring a direct cost-recovery action under Section 107 against other PRPs for an equitable allocation of the overall cleanup costs among all responsible parties. This ruling will serve the two fundamental purposes of CERCLA: to provide for prompt and effective cleanups and to ensure that all PRPs bear a fair share of the costs of cleanup. These considerations are particularly important in cases where, as in Atlantic Research, the government – our nation's largest polluter – is involved. The Court's decision was supported by a wide array of amici curiae, including environmental groups, former EPA officials, states, cities, municipal water districts, and distinguished academics. This group of amici attests to the importance of the Court's decision and the salutary consequences it will have for the fair and expeditious cleanup of hazardous waste sites.