## Facts

- Hazardous-waste contamination was identified at four Superfund sites in Massachusetts and New Hampshire (Bridgewater, Plymouth, Londonderry, and Nashua).
- EPA investigated and notified 671 entities as potentially responsible parties (PRPs), and classified some as “de minimis” based on minimal volume and toxicity.
- Before suit, EPA reached administrative settlements with roughly 300 de minimis PRPs under CERCLA § 122(g).
- After suit, two partial consent decrees were presented:
  - A major-PRP decree requiring 47 major PRPs to perform remedial work and pay over $18 million in response costs.
  - A judicial de minimis decree requiring 12 de minimis PRPs to pay 260% of their volumetric share of estimated response costs.
- The settlements, combined with earlier administrative agreements, would resolve claims against 359 PRPs and yield close to $48 million in performance value and cash.
- Settling parties received substantial protections, including covenants not to sue and protection from contribution claims; non-settling PRPs objected as excluded and potentially left with greater residual liability.
- The district court approved the decrees, certified them as final judgments, and barred related cross-claims against settling parties.

## Issues

1. What level of deference should courts give EPA and the settling parties when reviewing CERCLA consent decrees?
2. Whether the decrees were fair, reasonable, and consistent with CERCLA, including procedural and substantive fairness.
3. Whether EPA’s negotiation and PRP classification process was procedurally unfair or arbitrary.
4. Whether volumetric allocation (with toxicity adjustments) and a 260% de minimis premium was substantively unfair.
5. Whether CERCLA permits contribution bars protecting settling PRPs despite potential disproportionate liability for non-settling PRPs.
6. Whether the district court abused its discretion by approving the decrees without an evidentiary hearing.

## Decision

- The First Circuit affirmed approval of both consent decrees and the associated contribution bars.
- The court held the decrees were procedurally fair, substantively fair, reasonable, and consistent with CERCLA’s objectives of prompt cleanup and settlement.
- The court found no abuse of discretion in relying on the written record and argument rather than holding an evidentiary hearing.

## Legal Principles

- A court reviewing a CERCLA consent decree must determine whether the settlement is fair, reasonable, and consistent with CERCLA’s purposes; the decree need only fall within a zone of reasonableness.
- EPA’s technical and policy judgments in structuring CERCLA settlements and allocation methods receive considerable judicial deference; courts should not replace the agency’s compromise judgments absent arbitrariness or comparable defects.
- Procedural fairness focuses on whether negotiations were open and at arm’s length and whether affected parties had a reasonable opportunity to participate; refusal of an offered settlement does not entitle a party to later claim process unfairness.
- Substantive fairness is assessed by comparative responsibility and permits “rough justice”; CERCLA does not require precise proportional allocation among PRPs.
- Volumetric allocation with appropriate adjustments, and risk premiums for de minimis settlements in exchange for broad covenants not to sue, can be reasonable tools to manage uncertainty and encourage settlement.
- CERCLA authorizes contribution protection for settling PRPs; resulting disproportionate liability for non-settling PRPs is an accepted consequence of the statutory settlement scheme.
- An evidentiary hearing is not required to approve a CERCLA consent decree if the record provides an adequate basis for evaluating statutory fairness and reasonableness.

## Conclusion

The First Circuit upheld EPA-negotiated CERCLA settlements for four Superfund sites, emphasizing deference to the agency’s allocation choices and confirming that covenants not to sue, de minimis premiums, and contribution bars are permissible means to encourage settlement and advance timely remediation.


United States v. Cannons Eng’g Corp., 899 F.2d 79 (1st Cir. 1990)