The Sixth Circuit has ruled that an EPA administrative order entered into under section 122(a) cannot form the basis for a section 113 CERCLA contribution action. In ITT Industries v. BorgWarner, Inc., 6th Cir., No. 06-2393, 10/18/07, ITT entered into an administrative order with the EPA to perform remedial action. After having spent nearly $2 million, ITT concluded that no further remediation would be required and asserted a contribution claim against Borg Warner and other companies under section 113.

Borg Warner moved to dismiss the claim stating that a section 122(a) administrative order did not count as the type of settlement that could form the basis of an “administrative or judicially approved settlement” as contemplated by Cooper v. Aviall Services Inc., 543 U.S. 157. The Sixth Circuit agreed, holding that (1) ITT had not finally resolved all of its liabilities because the EPA reserved the right to bring further legal action, and (2) a contribution claim could not be based on section 122(a) as section 113(g) only references administrative orders entered into under section 122(g) (relating to de minimus settlements and 122(h) (relating to cost recovery settlements). Despite the dismissal of the contribution claim, the case was remanded to district court to determine if ITT could pursue a section 107 cost recovery claim pursuant to the Supreme Court’s ruling in United States v. Atlantic Research Corp., 127 S. Ct. 2331.

Download Sixth Circuit opinion (PDF: 42KB).