Opinion #110. Representation of "Potentially Responsible Parties" in Superfund Litigation

Issued by the Professional Ethics Commission

Date Issued: October 12, 1990

Question

In proceedings under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. 9601, et seq. also variously known as “CERCLA” or “Superfund,” certain groups of parties, sometimes generators or transporters of hazardous waste, or owners or operators of disposal sites (commonly referred to as “Potentially Responsible Parties,” or “PRPs”) often agree to share liability upon the basis of a formula. In a substantial number of Superfund cases, the sharing of site clean-up costs is negotiated among groups of PRPs sharing common liability characteristics. Thus, for instance, a group of waste generators who shipped relatively minor amounts of hazardous waste all having comparable levels of toxicity may typically, as a class, be offered an opportunity to settle their liabilities at an advantageous cost per gallon. Under the CERCLA statute these individuals would be jointly and severally liable inter sese, along with the other more (volumetrically) significant contributors to the Superfund site.

The question posed relates to the propriety of multiple representation under these circumstances.

Opinion

It is the committee, or the group of PRPs which is the client; not the constituent PRP members of the group. The attorney’s duty of loyalty is to the group—not to the individual PRP. In this sense, representation of such a group is analogous to representation of a creditors committee in a bankruptcy reorganization. There, in the absence of a 100% distribution, an underlying conflict exists with respect to the interests of the individual members of the creditors committee as well as the creditors represented by the committee. However, the representation of the committee itself poses no conflict.

Where the attorney also represents an individual PRP, Bar Rule 3.4 controls. Before accepting employment by a committee or group of PRPs, an attorney must disclose both to the committee or group and to any individual PRP‑client the possible effect of such multiple representation upon the exercise of the lawyer’s independent judgment. Bar Rule 3.4(d). Such disclosure should include an outline of any democratic or other decision‑making process which has been or is likely to be adopted by the committee or group.

If the multiple representation is likely to result in representation of differing interests or to have an adverse effect upon the exercise of the lawyer’s independent professional judgment, the attorney should not accept employment. Bar Rule 3.4(b), (c). Similarly, the attorney should withdraw from employment if circumstances later occur under which the attorney would not, had he or she known of the facts at the outset of representation, have accepted employment.


Enduring Ethics Opinion