July 9, 2014

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Ryley Carlock Attorneys Help Client Win Important Appeal on Case Involving CERCLA

Ryley Carlock attorneys recently won an important Tenth Circuit Court of Appeals case for one of our clients, a subsidiary of a fortune 500 company Case No. 13-1435. The Tenth Circuit's decision, a matter of first impression at the circuit court level, addresses the statute of limitations for a contribution claim arising from a Comprehensive Environmental Response and Compensation and Liability Act (CERCLA) settlement occurring within the scope of a bankruptcy proceeding. The Tenth Circuit's holding makes clear that CERCLA contribution claims may accrue when a bankruptcy court approves a settlement for CERCLA costs, irrespective of whether a plan of bankruptcy is ever confirmed or effective. The Tenth Circuit decision affirms the U.S. District Court of Colorado's decision, issued on September 19, 2013 in favor of Ryley Carlock's client Case No. 12cv3216.

In the District Court case, Ryley Carlock's client was sued pursuant to CERCLA, more commonly known as the Superfund law, which is intended to facilitate cleanup of contaminated sites by, in part, identifying liability for cleanup. Section 113(f) of CERCLA allows an entity that settles with EPA for cleanup costs to seek contribution from other entities based on their proportionate liability at a site. ASARCO, plaintiff-appellant, who operated a smelting facility at a site for over 70 years, entered into a settlement agreement with EPA to resolve its CERCLA liability for cleanup costs at the subject site. This settlement was approved by the U.S. Bankruptcy Court for the Southern District of Texas in June 2009 and the bankruptcy reorganization plan was confirmed in November 2009. More than three years later, ASARCO sought to recover from Ryley Carlock's client a portion of cleanup costs by way of CERCLA's Section 113(f) contribution provision.

Ryley Carlock attorneys successfully argued in both the District Court and Tenth Circuit that ASARCO's claims for contribution were barred by CERCLA's statute of limitations. Under CERCLA Section 113(g)(3)(B), where there has been a judicially approved settlement for cleanup costs, the applicable limitations period for a contribution action begins when the settlement was judicially approved. ASARCO filed claims against Ryley Carlock's client more than three years after its settlement with EPA was approved by the Bankruptcy Court. Therefore, the District Court concluded, and the Tenth Circuit affirmed, that ASARCO's claims were time-barred. As a result, the case against Ryley Carlock's client was dismissed.

Reaching this outcome entailed tackling complicated issues involving CERCLA and bankruptcy law. The Ryley Carlock team included John Fries (Bankruptcy) and Richard Kaufman (Litigation). This success is just one example of how our firm's full-service practice can provide efficient and favorable solutions for clients.