This
is the third of a series of blog entries regarding the evolution of CERCLA §107
cost recovery claims and CERCLA §113 contribution claims. It will discuss how Cooper Industries, Inc. v. Aviall Services, Inc.,
543
U.S. 157 (2004), and other cases have begun restoring the nature of a
contribution action to the way it was before SARA was enacted.
My first blog entry to this series discussed how cost
recovery and contribution were distinct legal remedies prior to SARA being
enacted. My second blog entry to this series discussed how the circuit courts blurred those distinctions
after SARA was enacted. The
overarching argument of this series of blog entries is that cost recovery and
contribution were distinct remedies prior to SARA, then the Circuit Courts
blurred the distinctions between these two remedies, and now, starting
primarily with Cooper Industries, the
Supreme Court and other courts have begun restoring those distinctions that
existed prior to SARA.
Cooper
Industries focused on the text of CERCLA and held that only
certain PRPs can seek contribution. Id. at 167. After SARA, the new codified right to contribution clearly allowed
a PRP to seek contribution if it had been sued in a prior cost recovery or
enforcement action because CERCLA § 113(f)(1) provides that “[a]ny person may
seek contribution… during or following
any civil action under [CERCLA §§ 106 or 107.]”. 42
U.S.C. § 9613(f)(1). Additionally, a PRP could clearly
seek contribution under CERCLA § 113(f)(3)(B) if it had “resolved” some of its
liability in an “administrative or judicially approved settlement”. 42
U.S.C. § 9613(f)(3)(B). Cooper Industries made the preconditions list in CERCLA § 113(f) mandatory—“to assert a contribution claim under § 113(f), a party must
satisfy the conditions of either § 113(f)(1) or § 113(f)(3)(B).” Cooper Industries, 543 U.S. at 167.
“[M]any
courts prior to the Supreme Court’s decision in Cooper Industries, apparently read section 113(f)(1) to permit
contribution claims regardless of whether there was or had been a civil
action.” Raytheon Aircraft Co. v. United States, 435 F.Supp.2d 1136, 1143 (D. Kan.,
2006); see also, Centerior Service Co. v.
Acme Scrap Iron & Metal Corp., 153 F.3d 344, 352 (6th Cir., 1998) (allowing
a PRP subject to a CERCLA § 106 cleanup order to pursue CERCLA § 113(f)(1)
contribution claim even “in the absence of a civil action” under CERCLA §§ 106
or 107); Sun Co. Inc. v. Browning-Ferris, Inc., 124 F.3d 1187, 1192 (10th
Cir., 1997) (same). Cooper
Industries held that a PRP who voluntarily
cleaned up a site did not have a contribution claim under § 113(f)(1) because
his suit was not “during or following” a “civil action” under §§ 106 or 107. Cooper Industries, 543 U.S. at 165-66. Therefore, to the extent that Centerior
Service, Sun Company or other
cases suggest “a party may seek contribution under section 113(f)(1) even in
the absence of a civil action under section 106 or 107(a), that suggestion has
been superseded by Cooper Industries.”
Raytheon, 435
F.Supp.2d at 1143.
In arriving at its conclusion, the Supreme Court specifically
indicated that not only did its conclusion flow from the statutory text of
CERCLA § 113(f), but it also flows from the text of the corresponding statute
of limitations provision, CERCLA § 113(g)(3):
Our
conclusion follows not simply from § 113(f)(1) itself, but also from the whole
of § 113. As noted above, § 113 provides two express avenues for contribution:
§ 113(f)(1) (“during or following” specified civil actions) and § 113(f)(3)(B)
(after an administrative or judicially approved settlement that resolves
liability to the United States or a State). Section 113(g)(3) then provides two
corresponding 3-year limitations periods for contribution actions, one
beginning at the date of judgment, § 113(g)(3)(A), and one beginning at the
date of settlement, § 113(g)(3)(B). Notably absent from § 113(g)(3) is any
provision for starting the limitations period if a judgment or settlement never
occurs, as is the case with a purely voluntary cleanup. The lack of such a
provision supports the conclusion that, to assert a contribution claim under §
113(f), a party must satisfy the conditions of either § 113(f)(1) or §
113(f)(3)(B).
Cooper Industries, 543 U.S. at 167.
Following this logic
the Sixth Circuit held that an administrative settlement
under § 122(a) did not constitute an “administrative or judicially approved
settlement” for purposes of § 113(f)(3)(B) because if it did constitute such a
settlement there would be no statute of limitations for that contribution
action. ITT Industries v. Borgwarner,
506 F.3d 452, 460-61 (6th Cir., 2007). The only
settlements that trigger the running of the statute of limitations are
administrative settlements under CERCLA §§ 122(g) or (h) and judicially approved
settlements. See 42 U.S.C. § 9613(g)(3)(B). Thus, under the logic of Cooper Industries and ITT Technologies the only settlements
that would give rise to a claim for contribution under CERCLA § 113(f)(3)(B)
are administrative settlements under CERCLA §§ 122(g) or (h) and judicially
approved settlements.
Cooper
Industries did not present an opportunity for the Court to consider
whether a CERCLA § 106 order constitutes a “civil action” for purposes of
CERCLA § 113(f)(1). 543 U.S. at 168 n.5 (“Neither has Aviall been subject to an
administrative order under § 106; thus, we need not decide whether such an
order would qualify as a ‘civil action under section 9606… or under section
9607(a)’ of CERCLA. 42 U.S.C. § 9613(f)(1).”). However,
following the logic of Cooper Industries,
a statute of limitations analysis would suggest that a CERCLA
§ 106 order is not a “civil action” for purposes of CERCLA § 113(f)(1) because the statute of limitations for such actions
is triggered by a judgment and CERCLA § 106 orders do not
result in a judgment.
Moreover,
other courts that have considered this
issue have held that a government order is not a “civil action” for purposes of
CERCLA § 113(f)(1). Pharmacia Corp. v. Clayton Chemical Acquisition LLC, 382 F.Supp.2d 1079, 1086 (S.D. Ill.,
2005);
Raytheon, 435 F.Supp.2d at
1144. The Pharmacia
Court explained its holding that a government order is not a “civil action” for
purposes of CERCLA § 113(f)(1) as follows:
In
interpreting a statute, “courts must presume that a legislature says in a
statute what it means and means in a statute what it says there.”…If a court
finds the words of a statute unambiguous, judicial inquiry is complete…This
Court finds that the natural meaning of “civil action” is clearly a
non-criminal judicial proceeding. Federal
Rule of Civil Procedure 2 states that “[t]here shall be one form of
action” to be known as “civil action”. The term “civil action” refers to the
“entire civil proceeding, including all component ‘claims' and ‘cases' within
that proceeding”…Further, Federal Rule
of Civil Procedure 3 governs the commencement of an action and states
that “[a] civil action is commenced by filing a complaint with the court.”
Additionally, Black's Law Dictionary defines a civil action as “[a]n action
brought to enforce, redress, or protect a private or civil right; a
non-criminal litigation.”
Pharmacia, 382 F.Supp.2d at 1087 (omitting citations).
Furthermore,
following this logic, contribution under § 113(f)(1) cannot be based on a
dismissed “civil action” that does not result in a judgment because if it did
there would be no statute of limitations for the action. Thus, obtaining contribution under §
113(f)(1) must be based on a judgment under §§ 106 or 107, but contribution may
be pursued while a party is only in jeopardy of a judgment. Compare
42 U.S.C. § 9613(f)(1) (CERCLA § 113(f)(1)
provides that “[a]ny person may seek contribution… during or following any civil action under [CERCLA §§ 106 or
107.]”) with 42 USC 9613(g)(3)(A)
(the statute of limitations does not begin to run until there is a judgment).
Another important point that stems from
a textual reading of the CERCLA statute is that only costs incurred pursuant to
an event triggering the right to contribution are recoverable in
contribution. This point was
explained in Raytheon, 435 F.Supp.2d at 1144, as
follows:
Raytheon argue[d] that it can pursue a claim for contribution
under this section for costs incurred responding to the UAO because it has
resolved its liability with respect to costs incurred complying with the AOCs
[which were settlements triggering a right to contribution]… [A] proper reading
of section 113(f)(3)(B) is one that limits a plaintiff's right to contribution
to those response costs for which it has resolved its liability in settlements
with the United States or a State.
Stated another way, the right to contribution under section 113(f)(3)(B)
is defined by the scope of the liability resolved.
Thus, following this
logic only costs incurred pursuant to a judgment resulting from a cost recovery
action or an enforcement action are obtainable in a contribution action under
CERCLA § 113(f)(1), and only costs incurred pursuant to an administrative settlement under CERCLA §§ 122(g)
or (h), or pursuant to a judicially approved settlement, are obtainable in a
contribution action under CERCLA § 113(f)(3)(B).
These
decisions bring the current view of contribution more in line with pre-SARA
view of contribution, which allowed suits for contribution by “a private entity
that had been sued in a cost recovery action.” Cooper
Industries,
543 U.S. at 160-61, 162. Further,
they paved the way for even further cases to continue to restore the
distinctions between contribution and cost recovery, as will be discussed in
further blog entries.
THAT’S MY ARGUMENT.
© July 2013 Brandon
J. Evans
