United States v. Southeastern Pennsylvania Transportation Authority

Over a 70-year period, several rail companies operated a rail yard where service, repair, and storage of railcars caused toxic-chemical contamination of the site and its watershed. American Premier owned the yard for 70 percent of that period. The United States (plaintiff) sought recovery of the cleanup costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) against three rail companies, including Southeastern Pennsylvania Transportation Authority (defendant), and the rail companies brought American Premier into the lawsuit as a third-party defendant. During settlement negotiations, American Premier offered to pay 20 percent of the costs, but the United States rejected the offer because it estimated that American Premier was responsible for most of the costs. The United States Environmental Protection Agency issued an administrative order requiring American Premier to remediate the watershed portion of the site. The United States settled with the other three rail companies pursuant to a consent decree that held the rail companies responsible for the cleanup of the rail yard and granted contribution protection to the settlors for that work as well as for the work performed by American Premier. American Premier filed objections in federal district court, arguing that the consent decree’s terms were contrary to CERCLA and substantively unfair because the one-sided contribution protection would lead to disproportionate allocation of costs. Rejecting these arguments, the district court entered the consent decree. American Premier appealed.