How valuable is a consent order or a consent decree, and what is the difference?
First, the basics: a consent order is typically an administrative agency contract with a private party, but is not filed in a court as part of a litigation. Despite not being filed in a court, it is a binding, enforceable contract, and the penalties for failing to comply with all its terms are very real. A consent decree is, on the other hand, filed in a federal or state court as the whole or partial settlement of a litigation.
If drafted properly, a consent order, while containing provisions that the private party may not be thrilled about, at least can provide peace of mind, unlike many other documents.
First, as noted, a consent order is contract used to settle liability, typically in an administrative enforcement action brought by the government – it is like a settlement agreement between private litigants. In the environmental arena, a consent order is extremely useful because parties can reach an agreement with the government to address liability without having to legally admit responsibility for causing the problem. In addition, it ends transaction costs of the business arising from continued fighting with the government. More importantly, the party entering into the consent order with the government can, in many instances, receive liability protection for future claims brought by the government (law suits or demands to clean up property).
In a recent decision from the Eastern District of New York, for example, a federal judge held that 58 private parties to a consent decree were protected having to pay for future cleanup costs from contamination migrating away from a landfill in Babylon to which they sent their waste. In New York v. Pride Solvents & Chem. Co. Inc., 15-CV-6569 (Dec. 15, 2017), the judge found that the terms of the consent order were unambiguous because these 58 private parties were released from “any and all” claims or lawsuits “relating to the disposal or alleged disposal or release or alleged release of hazardous substances” at the landfill. As a result, the judge determined that the 58 settling parties could not be brought into a lawsuit also by the State for alleged contamination flowing from the Babylon landfill in the Pride Solvents case because they had completely resolved their liability for any contamination “associated in any way with hazardous substances or contamination” from the Babylon Landfill site.
If the consent order had not provided a clear and unambiguous release of liability, the 58 settling private parties might have had to face a lengthy and expensive law suit with the State for contamination they may or may not have been responsible for. Here, they were certainly relieved with the Court’s decision and could get the claims brought against them dismissed in an early procedural stage of the case.
Click here to read the court’s decision in New York v. Pride Solvents & Chem. Co. Inc., 15-CV-6569 (Dec. 15, 2017) decision.
Call the experienced environmental attorneys of Periconi, LLC at (212) 213-5500 if you are facing claims for environmental contamination or if the government is threatening you with an administrative enforcement action – a properly drafted consent order or settlement agreement may give you peace of mind.