Arizona v. Reytheon Co.

A consent decree may be granted by a district court if a settlement agreement is fair, reasonable, and consistent with Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) objectives, the terms of which must be independently scrutinized and comparatively analyzed to meet CERCLA requirements.

The State of Arizona (“State”) brought suit under the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) and the Arizona Water Quality Assurance Revolving Funds (“WQARF”) for the cleanup of a contaminated landfill site in Tucson, Arizona. In June 2010, the State settled with twenty-two potentially responsible parties, thereby releasing them from liability and contributory obligations of future non-settling parties. Several non-settling parties not included in the settlement negotiations (“Intervenors”) intervened in the action, opposing the State’s motion to include consent decrees, and alleging that the State failed to provide information regarding whether the consent decrees were in congruence with CERCLA objectives. The district court denied the Intervenor’s request for declaratory relief and entered the consent decrees. On appeal, the Ninth Circuit Court held that that the Intervenors’ request for declaratory relief was improperly before the district court because such relief must be included in the original complaint. Secondly, the panel held that the district court failed to independently scrutinize the consent decrees pursuant to CERCLA and incorrectly deferred to the determinations of the Arizona Department of Environmental Quality. A consent decree pursuant to CERCLA may be granted if a settlement agreement is “fair, reasonable, and consistent with CERCLA’s objectives,” whereby the district court must use comparative analysis to estimate the harm by each potentially responsible party. AFFIRMED IN PART, VACATED IN PART, AND REMANDED.