RECENT FEDERAL DECISIONS

August 2004

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Fourth Circuit Affirms Dismissal of Direct CERCLA Action Against Insurers Providing Financial Assurances Required by RCRA
South Carolina Department of Health and Environmental Control v. Commerce and Industry Insurance Co.___ F.3d ___

The United States Court of Appeals for the Fourth Circuit has held that plaintiffs in cost recovery and contribution actions under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) may not bring direct actions against insurance companies who provide financial assurance as required by the Resource Conservation And Recovery Act (RCRA). The court held that the two statutes, CERCLA and RCRA, serve different purposes and that the direct action provision in CERCLA does not apply to financial assurances provided not under CERCLA but under RCRA.