USDOJ Legal Memo Clarifies Department’s Policy on Using Federal Judgment Fund to Settle Superfund Cases

A U.S. Department of Justice legal memo, obtained under the Freedom of Information Act by Bloomberg Law, has clarified and restated the Department’s strict policy against using the federal Judgment Fund to settle Superfund cases in which the federal government is a Potentially Responsible Party (PRP).

The memo states that the federal government can settle its liability by payments from the Fund only if the settlement is “final” – that is, there are no contingencies or future payments due. Many Superfund settlements do not meet that standard, since they typically include reopeners, “pay-as-you-go” arrangements, or provisions for additional funding if the remedy proves more expensive than originally estimated.

As Gibbons Director David J. Freeman told Bloomberg Law, “It’s not a favorable development for the program, or for making progress on settlements in general, for the government to be taking such a hard line on this.”

This policy will likely result in making it more difficult to achieve settlements at sites where the federal government is a PRP.