The U.S. Department of Justices recently dictated a change in the settlement approval process for Superfund. The final rule affects situations where there are many potentially responsible parties (PRPs) associated with a Superfund site. Under the new rule, liability under Superfund is joint and several when the harm at the site is indivisible, and will thus provide for the "equitable allocation" of response costs.

The change particularly affects potentially responsible parties who can't afford their share. Previously, the DOJ's Assistant Attorney General for the Environment could only approve only certain proposed settlements that were relatively close to the original claim. Larger settlements had to get approval from the Associate Attorney General, the third-ranking official in the DOJ. The new rule makes an exception to allow virtually any settlement by cash-strapped potentially responsible parties to be approved within the DOJ's environmental department.

According to the DOJ, these types of settlements "are common in multi-party CERCLA litigation and seldom raise issues significant enough to warrant Associate Attorney General review."

Business and Legal Reports notes that equitable allocation typically results in de minimis settlements. "It is also common to see substantial dollar differentials between original claims and settlement amounts since many settlements are made with parties who do not have the financial ability to pay the equitable allocated amount," said BLR.

Links

• Read the rule in the Federal Register