A federal court in Connecticut has provided a very clear analysis of the difference between CERCLA allocation and CERCLA apportionment. In Yankee Gas Services v. UGI Utilities, Inc. (D. Conn., 2012) the court addressed a suit between the current owner and the former owner and operator of a manufactured gas plant. The court began its discussion by noting that both parties had already been found to have CERCLA joint and several liability and the remaining dispute was about who should pay how much. In such cases, a court must allocate liability (or the costs) based on equitable principles.
The court distinguished allocation from apportionment as follows. Apportionment was the issue in the Supreme Court’s decision in Burlington Northern, 556 U.S. 599 (2009). Apportionment is the process of deciding who should pay how much when the parties are not jointly and severally liable (when each is liable only for part). Allocation, on the other hand, is an equitable doctrine, intended to determine who, among the jointly and severally liable parties, should pay how much. Equitable considerations play no role in apportionment; but equitable considerations are central to allocation. The court explained: “To apportion is to request separate checks, with each party paying only for his own meal. To allocate is to take an unitemized bill and ask everyone to pay what is fair.”
The court noted that regarding how to allocate among liable parties, the Second Circuit does not use a fixed list of equitable factors that may be considered, but that many courts use the so-called Gore Factors, which include: “(1) The ability of the party to demonstrate that his contribution to the release can be distinguished; (2) The amount of hazardous substance involved. Of course, a small quantity of highly toxic material, or above which releases or makes more dangerous another hazardous substance, would be a significant factor; (3) The degree of toxicity of the hazardous substance involved; (4) The degree of involvement of the person in the manufacture, treatment, transport, or disposal of the hazardous substance; and (5) The degree of cooperation between the person and the Federal, State, or local government in preventing harm to public health or the environment from occurring from a release. This includes efforts to mitigate damage after a release occurs.” Yankee Gas at *14 quoting Niagara Mohawk, 596 F.3d at 130 (quoting S. Rep. No. 96-848, at 345-46 (1980)).
The court also noted that a second list of factors sometimes examined are referred to as the Torres Factors from Judge Torres’ opinion in United States v. Davis, 31 F. Supp. 2d 45, 63 (D.R.I. 1998). They include: (1) extent to which the costs are related to waste for which each party is responsible; (2) each party’s level of culpability; (3) degree to which the party benefitted from the disposal; and (4) ability to pay.
In the court’s detailed analysis of the facts and application of the equitable factors, the expert testimony regarding what happened during which time period was central to the court’s conclusions. Thus, even though this was an allocation case, the reasoning and result were very much what one would expect in an apportionment case.
It should not come as a surprise that allocation and apportionment, while conceptually distinct, often reach the same result. Apportionment, the court said was like separate checks at the restaurant – each pays for what they ate. Allocation, however, the court said, was about fairness. Factors such as ability to pay, cooperation with the government, culpability and the degree to which a party benefitted from the disposal should be considered. Sticking with the court’s analogy to the restaurant, whether the people at the table have separate checks or are looking for a fair means of dividing one bill should not make a significant difference because the most fair division will be based on who ate what.