Ninth Circuit Rejects CERCLA Settlement, Declines to Give Deference to State Agency

by Davis Wright Tremaine LLP

On August 1, 2014, a divided panel of the Ninth Circuit reversed a district court’s approval of a multi-party settlement at an Arizona waste site. State of Arizona v. Ashton Company Incorporated Contractors and Engineers, et al., No. 12-15691 (9th Cir. August 1, 2014). The dissenting opinion noted that this is only the second time an appellate court has done so, with both decisions made by the Ninth Circuit. The reasoning of the majority has to give pause to parties preparing to enter into CERCLA settlements at state-lead sites.

On appeal, the majority opinion held that the district court had not conducted the “comparative analysis” required in the approval of CERCLA settlements under the Circuit’s prior rulings, including US v. Montrose Chemical, 50 F.3d 741 (9th Cir 1995). In Montrose Chemical, the district court had expressly declined to examine the merits of the settlement and, without any discussion of the merits, relied upon the approval of the settlement terms by the Special Master appointed by the district court to oversee settlement negotiations.

In State of Arizona, the district court did review, but did not discuss, information from the State on the relative liability of the settling parties, instead relying on the judgment of the State agency as to whether the settlement served the public interest. Because the State agency was making a judgment about the adequacy of a settlement under a federal statute, the majority would not give the same deference to the agency’s determination as it would have given to EPA. The lengthy dissent strongly took issue with the failure to grant deference to the State agency’s determination, and concluded that the record was adequate to support the settlements.

Interestingly, the State agency had provided the district court with information on the basis for the settlement, which included an estimate of total cost. The court had also received the State environmental agency’s estimate of the relative liability of the settling parties, and its judgment that the settlement terms were in the public interest. It is likely that both the agency and the district court concluded that more precision was not worth the candle – this was an early settlement and these were small parties at a multi-party site. Whether one accepts the view that federal courts should give lesser deference to the judgments of state agencies enforcing a federal statute, even where, as with CERCLA, that statute provides the State with a significant enforcement role, the district court here would seem to be exercising the type of judicial discretion to which a reviewing court should give deference consistent with the reasoning in decisions cited by both the majority and the dissent.

As with Montrose Chemical, this settlement will be remanded to the district court for further proceedings. One hopes that the proposed settlement will not meet the same fate as the settlement in Montrose on remand. The settlement ultimately approved in Montrose contained the same substantive terms as the one reviewed and remanded by the Ninth Circuit, but only after years of delay while the litigation played out. Such a delay for these de minimis parties would hardly serve the public’s interest or the objective of CERCLA to promote early settlement.

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.

© Davis Wright Tremaine LLP | Attorney Advertising

Written by:

Davis Wright Tremaine LLP

Davis Wright Tremaine LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.