Practitioner Insights: Impact Of Settlements On CERCLA Actions

The Comprehensive Environmental Response Com- pensation and Liability Act (CERCLA) is a constantly evolving area of law and courts' interpretations of certain provisions can vary dramatically depending on the jurisdiction. Thus, it is imperative that practitioners are aware of how certain areas of CERLCA are interpreted across the country. One important example of such a variance is whether judicially approved settlements of environmental liabilities trigger the statute of limita- tions under CERCLA.

The Second and Third Circuits of the U.S. Court of Appeals have reached starkly different conclusions on this issue. In the Third Circuit, the statute of limitations is triggered when a party settles its environmental cleanup liability, even if such a settlement does not ex- pressly resolve CERCLA liability. Conversely, the Sec- ond Circuit has ruled that the statute of limitations does not begin to run until CERCLA liability is settled. Now, the Ninth Circuit has