The Seventh Circuit Still Wrong: Bernstein v. Bankert

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Late last year I blogged on the dubious decision by the Seventh Circuit in Bernstein v. Blankert which held that a settling CERCLA party did not resolve its liability to the government until it had performed all of its obligations under the Consent Decree.  While that decision enabled the settling party to get around a statute of limitations problem in bringing a claim against the real polluting party, that decision also meant that settling parties had no protection from contribution claims or new suits by the government until all the obligations under the Consent Decree had been performed — which in many instances could be decades.   After that decision issued, the losing party in the appeal requested a panel rehearing, which was joined by the US EPA as amicus.

The Seventh Circuit allowed the rehearing and recently reaffirmed its mistaken view in an amended decision.  The only leeway the court showed was to acknowledge the possibility that the government could in a Consent Decree expressly provide that the settling party has resolved its liability upon signing the Decree.  Even assuming that the government is willing to enter settlements that resolve liability immediately upon signing, the amended decision does nothing to address the vast numbers of prior CERCLA settlement agreements which specifically state that a settling party does not resolve its liability to the government until it has performed its obligations under the decree.

 


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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