## Facts

- Atlantic Richfield Co. (ARCO) entered a 1988 consent decree with the EPA to perform remedial cleanup and pay EPA oversight costs at the Sand Springs Petrochemical Complex Superfund Site in Oklahoma.
- ARCO then sued roughly 400 potentially responsible parties (PRPs), including American Airlines, seeking recovery of response costs and contribution under CERCLA.
- Many PRPs settled with ARCO, largely using a volume-based allocation tied to waste volumes attributed to each PRP.
- ARCO sought (1) a judicial determination that the settlements were in good faith, (2) an order barring nonsettling PRPs from contribution/indemnity claims against settling PRPs, and (3) adoption of a pro tanto (dollar-for-dollar) settlement credit against any future judgment.
- A magistrate judge recommended approving the settlements, imposing a contribution bar, and applying pro tanto credit; several defendant groups objected, urging a proportionate share (equitable share) credit rule.

## Issues

1. In a private CERCLA action with partial settlements, should any later judgment against nonsettling PRPs be reduced by the settlement amounts (pro tanto) or by the settling PRPs’ equitable shares (proportionate share)?
2. Does CERCLA, including § 113(f)(2), require a particular settlement-credit approach in private-party settlements, or may the court choose an approach based on equity and CERCLA’s purposes?

## Decision

- The district court adopted the magistrate judge’s recommendation over the objections.
- The court found the settlements were made in good faith and were fair, reasonable, and consistent with CERCLA’s objectives, after a fairness review addressing allocation method, adequacy, and absence of collusion.
- The court barred any contribution or indemnity claims by nonsettling PRPs against settling PRPs regarding matters addressed in the settlements.
- The court applied the pro tanto settlement-credit rule: any future judgment against nonsettling PRPs would be reduced by the dollar amounts paid in settlement.

## Legal Principles

- CERCLA does not expressly prescribe a settlement-credit rule for private-party settlements; courts may fill the gap using federal common law and equitable discretion.
- CERCLA § 113(f)(2) expressly provides a contribution bar and settlement credit for qualifying settlements with the United States or a State, but its text does not dictate the rule for private settlements.
- In selecting a credit rule for private settlements, courts may consider CERCLA policies favoring prompt cleanup and settlement finality, and may choose the approach that is most equitable on the case’s facts.
- A good-faith finding—supported by judicial scrutiny for fairness and absence of collusion—supports a contribution bar that protects settling parties from later contribution/indemnity claims.
- Pro tanto credit may be selected where it is expected to encourage settlements and reduce litigation burdens in complex multi-PRP matters, with fairness review serving as a safeguard against materially inadequate settlements.

## Conclusion

The court approved ARCO’s private CERCLA settlements as good faith, imposed a contribution/indemnity bar protecting settling PRPs, and held that—because CERCLA is silent on private settlement credits—the court could equitably adopt pro tanto (dollar-for-dollar) credit, which it found most consistent with efficient cleanup and settlement finality in this multi-party case.


Atlantic Richfield Co. v. American Airlines, Inc., 836 F. Supp. 763 (N.D. Okla. 1993)