On October 5, 2015, the US Supreme Court refused to hear an appeal of a Ninth Circuit ruling that reversed a decision by the US District Court for the District of Arizona approving two de minimis Superfund or Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) settlements in 2011.

The settlements were negotiated by the Arizona Department of Environmental Quality (ADEQ) regarding the Broadway-Patano Landfill, a hazardous waste site in Tucson, Arizona that was later developed into two landfills.

ADEQ settled with several potentially responsible parties (PRPs) who agreed to pay de minimis amounts ranging from 0.01% to 0.2% of the overall cleanup cost of $75 million in exchange for liability release under CERCLA §13(f)(2) (42 U.S.C.A. § 9613). The US District Court for Arizona approved these settlements and an appeal followed.

On August 1, 2014, the Ninth Circuit reversed the district court’s approval of the consent decree. The court held that the district court was required to independently scrutinize the terms of the settlement to ensure the terms were fair, reasonable and consistent with CERCLA’s objectives (Arizona v. Raytheon Co., No. 12-15691 (9th Cir. Aug. 1, 2014)). The court continued, explaining that the district court had afforded undue deference to the ADEQ's judgment that these settlements were fair and reasonable.

The petitions for certiorari brought by the State of Arizona and a non-settling party argued that the Ninth Circuit’s decision impedes state efforts to fulfill their statutorily mandated roles under CERCLA. Colorado, Hawaii, Indiana, Maine, Michigan, Nevada, Ohio, South Carolina and South Dakota filed amicus briefs.

Many environmental law experts are concerned that the Ninth Circuit decision, and the Supreme Court’s denial of review, will undermine the credibility of state environmental agencies, leaving the EPA as the sole entity that can approve CERCLA settlements. Property owners with potential CERCLA liability should consult with local counsel to determine the best strategy for negotiating with state environmental agencies and the EPA.