Argued
and Submitted February 8, 2017 Seattle, Washington
Appeal
from the United States District Court for the District of
Montana No. 6:12-cv-00053-DLC, Dana L. Christensen, Chief
Judge, Presiding
Gregory Evans (argued), Laura G. Brys, and Daphne Hsu,
McGuire Woods LLP, Los Angeles, California; Linda R. Larson,
Nossaman LLP, Seattle, Washington; for Plaintiff-Appellant.
Shannon Wells Stevenson (argued), William J. Duffy, and Mave
A. Gasaway, Davis Graham & Stubbs LLP, Denver, Colorado;
Elizabeth H. Temkin, Temkin Wielga & Hardt LLP, Denver,
Colorado; Randy J. Cox and Randy J. Tanner, Boone Karlberg
P.C., Missoula, Montana; for Defendant-Appellee.
Before: Raymond C. Fisher, Richard A. Paez, and Consuelo M.
Callahan, Circuit Judges.
SUMMARY[*]
Environmental
Law
The
panel vacated the district court's summary judgment in
favor of the defendant in a contribution action under §
113(f) of the Comprehensive Environmental Response,
Compensation, and Liability Act.
CERCLA
§ 113(f) provides that after a party has, pursuant to a
settlement agreement, resolved its liability for a
"response" action or the costs of such an action,
that party may seek contribution from any person who is not a
party to the settlement.
The
panel held that a 1998 settlement agreement under the
Resource Conservation and Recovery Act between the plaintiff
and the United States did not trigger the three-year statute
of limitations for the plaintiff to bring a CERCLA
contribution action concerning the East Helena Superfund
Site. Agreeing with the Third Circuit, and disagreeing with
the Second Circuit, the panel held that a settlement
agreement entered into under an authority other than CERCLA
may give rise to a CERCLA contribution action. In addition, a
"corrective measure" under RCRA qualifies as a
"response" action under CERCLA. The plaintiff did
not, however, "resolve its liability" under the
1998 RCRA settlement agreement.
Nonetheless, a later, 2009 agreement, on which the plaintiff
based its present CERCLA contribution action, did resolve the
plaintiff's liability. Because the plaintiff filed the
present action within the three-year limitations period
measured against entry of the 2009 agreement, it was timely.
The panel remanded the case for further proceedings to
determine whether the plaintiff was entitled to contribution
for the response costs it incurred under the 2009 agreement.
OPINION
CALLAHAN, Circuit Judge:
Section
113(f)(3)(B) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 ("CERCLA")
allows persons who have taken actions to clean up hazardous
waste sites to seek monetary contribution from other parties
who are also responsible for the contamination. 42 U.S.C.
§ 9613(f)(3)(B). The provision provides that a person
that has "resolved its liability" for "some or
all of a response action or for some or all of the costs of
such action" pursuant to a settlement agreement with the
government "may seek contribution from any person who is
not party to a settlement." Id. In other words,
"a [potentially responsible party] that pays money to
satisfy a settlement agreement . . . may pursue § 113(f)
contribution." United States v. Atl. Research
Corp., 551 U.S. 128, 139 (2007). CERCLA imposes a
three-year statute of limitations after entry of a judicially
approved settlement, during which a party may bring a
contribution action. 42 U.S.C. § 9613(g)(3).
This
case presents three issues of first impression in our
circuit. First, we must decide whether a settlement agreement
entered into under an authority other than CERCLA may give
rise to a CERCLA contribution action. Second, we must decide
whether a "corrective measure" under a different
environmental statute, the Resource Conservation and Recovery
Act ("RCRA"), qualifies as a "response"
action under CERCLA. And third, we must decide what it means
for a party to "resolve[] its liability" in a
settlement agreement-a prerequisite to bringing a §
113(f)(3)(B) contribution action. Our answers to these legal
questions guide our inquiry into whether a 1998 settlement
agreement under RCRA (the "1998 RCRA Decree")
between Appellant Asarco LLC ("Asarco") and the
United States, which was approved and entered by a federal
district court, triggered the three-year statute of
limitations for Asarco to bring a § 113(f)(3)(B)
contribution action.
In this
contribution action against Appellee Atlantic Richfield
Company ("Atlantic Richfield"), the district court
answered the first two questions in the affirmative but did
not address the third. On Atlantic Richfield's motion for
summary judgment, the district court concluded that
Asarco's action accrued with entry of the 1998 RCRA
Decree. Because Asarco brought its action in 2012-well beyond
the three-year statute of limitations under CERCLA-the
district court determined that its claim was time-barred.
We
agree with the district court on the first two issues but, as
to the third, conclude that Asarco did not "resolve[]
its liability" under the 1998 RCRA Decree. Asarco
therefore could not have brought its contribution action in
1998, and the statute of limitations did not begin to run
with entry of the 1998 RCRA Decree. By contrast, a later,
2009 agreement, on which Asarco bases its present
contribution action, did resolve Asarco's liability. And
because Asarco filed that action within the three-year
limitations period measured against entry of the 2009
agreement, it is also timely. The district court therefore
erred in dismissing Asarco's action on statute of
limitations grounds. Accordingly, we vacate the district
court's judgment and remand for further proceedings to
determine whether Asarco is entitled to contribution for the
response costs it incurred under the 2009 agreement.
I.
Factual Background
The
East Helena Superfund Site (the "Site") is located
in and around an industrial area in Lewis and Clark County,
Montana. The Site includes the City of East Helena,
Asarco's former lead smelter, and a nearby zinc fuming
plant that was operated by Atlantic Richfield's
predecessor, Anaconda Mining Company ("Anaconda"),
and later by Asarco.
The
Site has been a locus of industrial production for more than
a century, resulting in decades of hazardous waste releases.
The lead smelter, which Asarco operated from 1888 until 2001,
discharged toxic compounds into the air, soil, and water,
such as lead, arsenic, and other heavy metals. Asarco alleges
that the zinc fuming plant, which Anaconda operated from 1927
to 1972, also contributed to the contamination. Asarco
purchased the zinc fuming plant in 1972 and apparently ceased
operations in 1982.[1] In 1984, the
United States Environmental Protection Agency
("EPA") added the Site to the National Priorities
List under CERCLA.
In the
late 1980s, EPA identified Asarco and Anaconda as potentially
responsible parties ("PRPs") under CERCLA,
meaning-in CERCLA vernacular-that they bore at least some
responsibility for the contamination. See 42 U.S.C.
§ 9607(a). EPA sought remedial action only from Asarco,
which resulted in three CERCLA settlements between Asarco and
the United States in the late 1980s and early 1990s. Those
early settlements are not at issue in this litigation.
In
1998, the United States brought claims against Asarco for
civil penalties and injunctive relief under RCRA and the
Clean Water Act ("CWA"). The complaint alleged that
Asarco had illegally disposed of hazardous waste at the Site,
and sought an order requiring Asarco to, inter alia,
"conduct corrective action pursuant to Section 3008(h)
of RCRA, 42 U.S.C. § 6928(h) . . . ." A
"corrective action" under RCRA is a type of
"response measure" necessary to protect human
health or the environment, see 42 U.S.C. §
6928(h), and is "designed to clean up contamination,
" J. Stanton Curry, James J. Hamula, Todd W. Rallison,
The Tug-of-War Between RCRA and CERCLA at Contaminated
Hazardous Waste Facilities, 23 Ariz. St. L.J. 359, 369
(1991).
Asarco
settled the case with the United States. The settlement
agreement was approved by the federal district court in
Montana, and entered on the court's docket as a consent
decree. The 1998 RCRA Decree assessed civil penalties against
Asarco and also required Asarco to take certain remedial
actions to address past violations. Those actions included
"[c]orrective [m]easures" to, inter alia,
"remediate, control, prevent, or mitigate the release,
potential release or movement of hazardous waste or hazardous
constituents into the environment or within or from one media
to another."
Despite
the 1998 RCRA Decree's lofty goals, Asarco failed to meet
its cleanup obligations. Further complicating matters, in
2005 Asarco filed for Chapter 11 bankruptcy protection. The
United States and Montana filed proofs of claim in the
bankruptcy proceeding asserting joint and several liability
claims under CERCLA. On June 5, 2009, the bankruptcy court
entered a consent decree under CERCLA (the "CERCLA
Decree") between Asarco, the United States, and Montana.
The CERCLA Decree established a custodial trust for the Site,
and turned over cleanup responsibility to a trustee. As part
of the agreement, Asarco paid $99.294 million (plus other
expenses), which, inter alia, "fully resolved
and satisfied" its obligations under the 1998 RCRA
Decree.[2]
II. Procedural Background
On June
5, 2012, Asarco brought an action against Atlantic Richfield
under CERCLA § 113(f)(3)(B), seeking contribution for
its financial liability under the CERCLA Decree. Atlantic
Richfield filed a motion for summary judgment, arguing that
Asarco's action was untimely because the three-year
statute of limitations under § 113 began running with
the 1998 RCRA Decree. Asarco countered that "RCRA, a
statute that does not authorize contribution claims, [cannot]
trigger the limitations period under another law,
CERCLA." Asarco also argued that the CERCLA Decree
created "new" and "different" work
obligations from the 1998 RCRA Decree, thereby triggering a
new statute of limitations period for at least the costs
associated with those new obligations.
The
district court granted summary judgment for Atlantic
Richfield and dismissed the case. It concluded that the plain
language of CERCLA § 113(f)(3)(B) requires only that a
settlement agreement address a "response action, "
not that it be entered into under CERCLA. The court also
determined that Asarco had incurred response costs under the
1998 RCRA Decree, and therefore held that the 1998 RCRA
Decree provided the necessary predicate for a CERCLA
contribution action. Finally, the court rejected Asarco's
argument that the CERCLA Decree contained matters not
addressed by the 1998 RCRA Decree. Accordingly, it held that
the CERCLA Decree did not reset the statute of limitations
for any response costs incurred under that agreement, and
deemed Asarco's claim for contribution untimely. Asarco
appealed.
III. Statutory Context
Congress
enacted CERCLA in 1980 with two goals in mind: (i) to
encourage the "'expeditious and efficient cleanup of
hazardous waste sites, '" and (ii) to ensure that
those responsible for hazardous waste contamination pay for
the cleanup. Carson Harbor Vill., Ltd. v. Unocal
Corp., 270 F.3d 863, 880 (9th Cir. 2001) (en banc)
(quoting Pritkin v. Dep't of Energy, 254 F.3d
791, 795 (9th Cir. 2001)); see S. Rep. No. 96-848,
at 13 (1980). Hazardous waste sites- also known as Superfund
sites-contain toxic substances often deposited by multiple
entities. See 42 U.S.C. § 9607(a)(1)-(4). In
order to spread responsibility among those entities, Congress
included a provision in CERCLA providing for reimbursement of
costs incurred by the government or a liable PRP. Section
107(a) provides a cause of action for a "cost
recovery" claim against PRPs for a wide range of
expenses, including "'any . . . necessary costs of
response incurred'" that result from a release of a
hazardous substance. Whittaker Corp. v. United
States, 825 F.3d 1002, 1006 (9th Cir. 2016) (quoting 42
U.S.C. § 9607(a)).
"Response"
is a term of art under CERCLA and means "remove,
removal, remedy, and remedial action." 42 U.S.C. §
9601(25). Congress even gave those defining terms their own
definitions. A "removal" means, inter
alia, "the cleanup or removal of
released[3] hazardous substances from
the environment" and any actions that may be necessary
"in the event of the threat of release of hazardous
substances into the environment." Id. §
9601(23). A "remedial action" means, inter
alia, "actions consistent with permanent remedy
taken instead of or in addition to removal actions . . . to
prevent or minimize the release of hazardous substances so
that they do not migrate to cause substantial danger to
present or future public health or welfare or the
environment." Id. § 9601(24). Put simply,
a "response action" covers a broad array of cleanup
activities.
Section
107(a) is limited to recovery of response costs the suing PRP
itself directly incurred. See Atl. Research, 551
U.S. at 139 ("[Section] 107(a) permits recovery of
cleanup costs but does not create a right to
contribution."). At the time of enactment, CERCLA
included no express right to contribution for a PRP that did
not itself incur response costs, but that reimbursed another
party that did incur response costs. See Cooper Indus.,
Inc. v. Aviall Servs., Inc., 543 U.S. 157, 162 (2004).
Such a situation arises under two circumstances: (i) where
the PRP is the defendant in a CERCLA § 106 or §
107(a) action and a money judgment issues against it; or, as
with the CERCLA Decree in the matter before us, (ii) where
the PRP pays the United States' or a State's response
costs pursuant to a settlement agreement. See id. at
160-61; Atl. Research, 551 U.S. at 138-39;
Whittaker, 825 F.3d at 1006-07.
Congress
added an express right to contribution with the Superfund
Amendments and Reauthorization Act of 1986 ("1986 CERCLA
Amendments"), Pub. L. No. 99-499, to address these two
circumstances. See Atl. Research, 551 U.S. at 132.
Section 113(f)(1) captures the first, and provides that
"[a]ny person may seek contribution from any other
person who is liable or potentially liable under [§
107(a)] of this title, during or following any civil action .
. . under [§ 106 or § 107(a)] of this title."
42 U.S.C. § 9613(f)(1). Section 113(f)(1) is not at
issue in the instant matter, but, as discussed infra
in Part IV.A, it is relevant to resolving the first issue we
must decide: whether the 1998 RCRA Decree may give rise to a
CERCLA contribution action. Section 113(f)(3)(B), which is
directly at issue, captures the second scenario, and provides
that
[a] person who has resolved its liability to the United
States or a State for some or all of a response action or for
some or all of the costs of such action in an administrative
or judicially approved settlement may seek contribution from
any person who is not party to a settlement [that immunizes
such person from a contribution action].
Id. § 9613(f)(3)(B). In other words, "a
PRP that pays money to satisfy a settlement agreement or a
court judgment may pursue § 113(f) contribution."
Atl. Research, 551 U.S. at 139; see Cooper,
543 U.S. at 163, 167 (recognizing that § 113(f)(1) and
§ 113(f)(3)(B) set forth separate rights of
contribution).
While
§ 107(a) cost recovery actions and § 113(f)
contribution actions offer "complementary yet
distinct" remedies, there is overlap between them.
Atl. Research, 551 U.S. at 138, 139 n.6. For
example, a PRP may undertake its own response actions
pursuant to a settlement agreement with the government.
See id. That PRP will have incurred its own response
costs, meaning it is eligible for cost recovery under §
107(a), but it has also settled with the government, giving
rise to a contribution action under § 113(f)(3)(B). The
question is whether both or only one of these avenues of
relief is available. Our circuit, and "every federal
court of appeals to have considered the question since
Atlantic Research, " has concluded that "a
party who may bring a contribution action for
certain expenses must use the contribution action
[under § 113(f)(3)(B)], even if a cost recovery action
[under § 107(a)] would otherwise be available."
Whittaker, 825 F.3d at 1007 (emphasis in original);
see, e.g., Bernstein v. Bankert, 733 F.3d
190, 206 (7th Cir. 2013) (party may not pursue cost recovery
claim where a contribution claim is available); Solutia,
Inc. v. McWane, Inc., 672 F.3d 1230, 1236-37 (11th Cir.
2012) (same); Morrison Enters., LLC v. Dravo Corp.,
638 F.3d 594, 603-04 (8th Cir. 2011) (same); Agere Sys.,
Inc. v. Advanced Envtl. Tech. Corp., 602 F.3d 204, 229
(3d Cir. 2010) (same); Niagara Mohawk Power Corp. v.
Chevron U.S.A., Inc., 596 F.3d 112, 128 (2d Cir. 2010)
(same); ITT Indus., Inc. v. BorgWarner, Inc., 506
F.3d 452, 458 (6th Cir. 2007) (same). Thus, a PRP that incurs
its own response costs pursuant to a settlement agreement may
only bring a claim for contribution.
Sections
107(a) and 113(f) have different statutes of limitations
periods. An action for "recovery of . . . costs"
under § 107(a) "must be commenced . . . within 6
years after initiation of physical on-site construction of
the remedial action" or "within 3 years after the
completion of the removal action." 42 U.S.C. §
9613(g)(2)(A), (B). An action for contribution of
"response costs or damages" under § 113(f), by
contrast, "may be commenced" no more than "3
years after . . . the date of . . . entry of a judicially
approved settlement with respect to such costs or
damages." Id. §
9613(g)(3)(B).[4] The shorter
three-year limitations period for contribution actions is
intended "to ensure that the responsible parties get to
the bargaining-and clean-up- table sooner rather than
later." RSR Corp. v. Commercial Metals Co., 496
F.3d 552, 559 (6th Cir. 2007); see Whittaker, 825
F.3d at 1013 (Owens, J., concurring in part) (observing that
§ 113(f) was intended to "'bring[] all such
responsible parties to the bargaining table at an early
date'" (quoting H.R. Rep. (Energy and Commerce
Committee) No. 99-253, pt. 1, at 80 (1985), [5] reprinted in 1986 U.S.C.C.A.N.
2835, 2862)).
IV.
Discussion
Asarco's
action is untimely if it could have brought a contribution
action after judicial approval and entry of the 1998 RCRA
Decree. Such would be the case if three conditions are met:
(i) a non-CERCLA authority may give rise to a CERCLA
contribution action, (ii) Asarco took a response action or
incurred response costs under the 1998 RCRA Decree, and (iii)
the 1998 RCRA Decree resolved Asarco's liability for at
least some of those response actions or costs. The district
court analyzed the first two conditions but not the third. We
evaluate all three issues.
Our
review of the district court's grant of summary judgment
is de novo, as is our review of the court's determination
that Asarco's contribution claim under the CERCLA Decree
is barred by the statute of limitations. Hernandez v.
Space labs Med. Inc., 343 F.3d 1107, 1112 (9th Cir.
2003). Our review of the district court's interpretation
of the RCRA and CERCLA Decrees is also de novo, except that
we defer to any factual findings unless they are clearly
erroneous. City of Emeryville v. Robinson, 621 F.3d
1251, 1261 (9th Cir. 2010).
A.
A Non-CERLCA Settlement Agreement May Form the Basis for a
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