Atlantic Richfield Co. v. American Airlines, Inc.

In 1988, Atlantic Richfield Company (Atlantic) (plaintiff) entered into a consent decree with the Environmental Protection Agency (EPA) under which Atlantic agreed to perform cleanup at the Sand Springs Petrochemical Complex Superfund Site (the site) and reimburse the EPA for its oversight costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Atlantic subsequently filed response cost and contribution claims against approximately 400 potentially responsible parties (PRPs). The majority of the claims were settled based on volume contribution. Atlantic had asked the court to apply the pro tanto credit rule to any future recovery against the PRPs that had not yet settled. The nonsettling PRPs (defendants) argued that the proportionate credit rule should apply to any future recovery. The magistrate judge concluded that the decision to apply either the pro tanto or the proportionate approach is left to the court’s discretion on a case-by-case basis to reach an equitable result and further the goals of CERCLA. A fairness hearing was conducted, and the magistrate concluded that because Atlantic agreed to perform a cleanup that was originally the burden of the United States, equity dictates that Atlantic should be afforded the same consideration of settlement as the United States would have under the pro tanto approach. The magistrate granted Atlantic’s motion, and the nonsettling PRPs appealed to the district court.