1. Suppose the coalition sues the companies that transported the waste. Are they liable as PRPs? Why or why not

2. Why do you believe that the court rejected the special master’s report? Do you agree with the court’s decision?

3. Should courts have broad discretion when engaging in a Superfund allocation analysis? Is the public interest best served by a court deciding the allocation? Why or why not?

For decades, two public landfills in Connecticut accepted industrial waste, including municipal solid waste from various municipalities. The EPA declared the landfills to be Super-fund sites because they were leaking chemicals and threatening the local water supply. The EPA began the remedial enforcement process by investigating and identifying various principally responsible parties (PRPs) that contributed to the pollution, and it entered into consent decrees for them to contribute to the cost of cleanup. The PRPs, which were all corporations that had disposed of waste in the landfills, formed a coalition to represent their common interests and sued several municipalities for contribution to the cleanup costs. In a long, complicated litigation, a special master was appointed by the court to try to mediate a settlement. The special master came to certain conclusions about which parties contributed how much waste. At trial, the district court did not follow the conclusion of the special master and allocated much of the liability to the municipalities that ran the landfills. The municipalities appealed.

The U.S. Court of Appeals for the Second Circuit affirmed the district court’s ruling. Appellate courts will not overturn a district court’s allocation of remediation costs in Superfund cases unless there is an abuse of discretion. It was within the right of the court not to follow all of the findings of the special master and to allocate more costs to the municipalities than recommended by the master. For the court to abuse its discretion, it would have to have committed an error of law or be clearly wrong in its finding of facts.

The allocation of costs in such complicated proceedings may produce varying results; the court chose a method of allocation that was proper based on the evidence.

“Because [CERCLA’s] expan-sive language affords a district court broad discretion to balance the equities in the interests of justice, the appellate court will not overturn the district court’s allocation of response costs absent an abuse of that discretion. A district court abuses or exceeds the discretion accorded to it when (1) its decision rests on an error of law (such as application of the wrong legal principle) or a clearly erroneous factual finding, or (2) its decision—though not necessarily the product of a legal error or a clearly erroneous factual finding—cannot be located within the range of permissible decisions. . . . A district court must give ‘some deference’ to a master’s recommendation where the master has ‘direct and extensive’ knowledge about the particular circumstances of a given case. A district court that extends some deference to the master will consider his recommendation and the factors influencing it, but will not regard the recommendation as the alpha and omega of the analysis.  .  .  .  The Federal Rules of Civil Procedure expressly permit a district court to ‘modify’ a special master’s report. . . . [A] plaintiff may recover any necessary costs of response incurred consistent with the national contingency plan.  .  .  .  [CERCLA] does not limit courts to any particular list of factors. The court may consider the state of mind of the parties, their economic status, any contracts between them bearing on the subject, any traditional equitable defenses as mitigating factors and any other factors deemed appropriate to balance the equities in the totality of the circumstances.”