Evaluating the Effects of Alternative Superfund Liability Rules
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Description
One of the central issues in the Superfund reauthorization debate concerns the fate of joint-and-several liability. The 1980 Superfund statute did not specify whether potentially responsible parties (PRPs) would face joint-and-several liability rather than nonjoint (several only) liability. In the face of this legislative silence, the courts followed the approach of the Restatement (Second) of Torts and have imposed joint-and-several liability for indivisible harm – harm for which there is not a reasonable basis of apportionment. The Superfund Amendments and Reauthorization Act of 1986 (SARA) implicitly ratified the imposition of joint-and-several liability, at least in some circumstances, by establishing a right to contribution; such a right would not arise in the absence of joint-and-several liability. In the reauthorization debate, two groups recently have urged various curtailments in the use of joint-and-several liability. The National Commission on Superfund, comprised of twenty-six leaders from the various Superfund constituencies, did so in its final consensus report (National Commission on Superfund 1994). The Clinton administration likewise urged such curtailments in its bill submitted to the 103rd Congress in February 1994 (H.R. 3800). The commission recommended a scheme under which PRPs would generally be responsible only for their own share of the costs and would typically not have to bear responsibility for any orphan shares of insolvent or unidentifiable PRPs, if they accepted a determination of their share performed by a neutral third party. Orphan shares would be funded by an increased tax and would be charged to the PRP’s participating in the allocation process only if the proceeds of the tax were insufficient. Joint-and-several liability would be retained for parties that did not comply with the requirements of the allocation process (National Commission on Superfund 1994, 14-21). Under the Clinton administration’s Superfund bill, PRPs that accept a neutral determination of their share of the liability would not be responsible for amounts attributable to insolvent PRPs, but they would have to pay their share of amounts attributable to unidentifiable PRPs. Even under the current Superfund statutes, the courts have disagreed somewhat about what it means for a harm to be indivisible, thereby triggering joint-and-several liability. This chapter seeks to inform the reauthorization debate by comparing the effects of joint-and-several liability to those of nonjoint liability on the basis of three criteria: deterrence, settlement-inducing properties, and fairness. Our major conclusion is that, with respect to each of these criteria, neither rule dominates the other. Our discussion on this chapter focuses on a simple situation: a single plaintiff, whether the U.S. Environmental Protection Agency (EPA) or a state, seeks to recover cleanup costs from two defendants; we therefore do not focus on many of the real-world complications posed by Superfund. We proceed in this fashion because it is important to understand the basic questions raised by joint-and-several liability before dealing with additional complications. The major insights of this chapter are applicable to more complex situations as well.
Source Publication
Analyzing Superfund: Economics, Science, and Law
Source Editors/Authors
Richard L. Revesz, Richard B. Stewart
Publication Date
1995
Recommended Citation
Kornhauser, Lewis A. and Revesz, Richard L., "Evaluating the Effects of Alternative Superfund Liability Rules" (1995). Faculty Chapters. 1943.
https://gretchen.law.nyu.edu/fac-chapt/1943
