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Practice Notes
SCOTUS Cranks Up the Lawn Mower
By Major Daniel W. Hancock
Practicing environmental law often feels like watching grass grow. Cases stemming from the Comprehensive Environmental Response, Compensation, and Liability Act1 (CERCLA or “Superfund”), the comprehensive federal law governing the cleanup of contaminated lands, take years—occasionally decades—to reach resolution. Rarely is there an opportunity to witness a change to the landscape. One such rare occasion arose in spring 2021 when the Supreme Court decided Guam v. United States,2 a case involving the Army and Navy, and resulting in an opinion that figuratively mowed down a decade’s worth of incremental growth in the CERCLA landscape.
Guamrequired the Supreme Court to consider whether a Clean Water Act3 (CWA) consent decree could trigger the statute of limitations for a contribution action4 under CERCLA. The Supreme Court had never previously ruled on what non-CERCLA environmental settlements were sufficient to trigger CERCLA’s statute of limitations. The apparent trend across the circuits distinctly favored the United States’ position that non-CERCLA settlements can trigger the statute of limitations. Indeed, since 2010, an array of settlements had been held sufficient to trigger CERCLA’s statute of limitations when the plaintiff had previously resolved some portion of its liability at the site in question under some other settlement provision of state or federal environmental law. Unfortunately, a ruling for the United States’ position did not come to pass.
A ruling from the Supreme Court that built on the circuits’ existing framework would have acted as a powerful fertilizer to advance CERCLA’s purpose of streamlining environmental litigation5 and established uniform precedent favorable to the Federal Government at many clean-up sites with prior environmental settlements. However, instead of sedately pushing the fertilizer spreader across the CERCLA landscape, Justice Clarence Thomas and his colleagues elected to crank up the lawn mower.
This article provides a history and overview of CERCLA. It then moves into an analysis of a key line of cases from the last two decades, considering Guam in detail, and then reassesses the CERCLA landscape in the aftermath of Guam.
CERCLA History and Overview
Congress created CERCLA to be the comprehensive federal law governing the cleanup of contaminated lands.6 Enacted in 1980, CERCLA seeks to encourage quick cleanup of contaminated sites by those responsible for the hazardous waste contamination rather than forcing taxpayers to bear the costs of cleanup.7 Persons that can be held liable for cleanup costs incurred by the government or another person are called “potentially responsible parties” (PRPs),8 and, in some circumstances, a single PRP can be held liable for all the costs of cleanup at a site.9 In its original form, CERCLA allowed only PRPs who themselves had incurred response costs—a term of art in CERCLA10—to bring actions to recoup their costs. This loophole left PRPs that had paid for response costs without actually performing the work themselves, including payment via settlement with the government, with no avenue of recovery against other PRPs.11 Conceptually, it imposed joint and several liability without the accompanying common law remedy of contribution.12
By offering PRPs the prospect of a contribution suit following resolution with state and federal regulators, SARA appeared to bolster not only CERCLA’s goal of speedy clean-up litigation but also the broad cooperative federalism principles that allow states to enforce certain federal environmental provisions.15
As a result, in 1986, Congress passed the Superfund Amendments and Reauthorization Act of 1986 (SARA).13 The SARA created a contribution right for a PRP to sue other PRPs for their equitable shares of the response costs paid by the plaintiff once it had resolved its liability for response actions at the site in question with the Federal Government or a state government.14 By offering PRPs the prospect of a contribution suit following resolution with state and federal regulators, SARA appeared to bolster not only CERCLA’s goal of speedy clean-up litigation but also the broad cooperative federalism principles that allow states to enforce certain federal environmental provisions.15 After SARA’s enactment, PRPs pondering litigation generally had two options available: a suit to recover their own directly-incurred response costs under Section 107 (“cost recovery”) and/or a suit to recover their indirect costs under Section 113 (“contribution”) from other PRPs.16
Plaintiffs’ attorneys love options and flexibility, and Section 107 cost recovery actions appear more advantageous when compared with Section 113 contribution actions. Section 107 bars equitable defenses,17 and it has the potential for a six-year statute of limitations for cost recovery actions as compared with a uniform three-year statute of limitations under Section 113 for a contribution action.18 Contrary to plaintiffs’ attorneys’ preference for options, courts value the efficiency and simplicity of obligation and invariability. Although the Supreme Court has not directly addressed the issue,19 eight circuit courts of appeals have considered whether a plaintiff may bring either a cost recovery action under Section 107 or a Section 113 contribution action, if both are available, and all eight circuit courts have restricted the plaintiff to a Section 113 contribution action.20
While our landscape may still appear foggy, we have established that a plaintiff that has previously resolved its liability for response costs through a settlement with the Federal Government or a state government that then wishes to recoup response costs from other PRPs must almost certainly seek contribution under Section 113 with its more limited three-year statute of limitations. With that background in mind, we may consider the case law leading up to Guam that attempted to define what exactly constitutes a PRP resolving its liability to the Federal or a state government for response costs through a settlement agreement—that is, what exactly was believed to make the CERCLA Section 113 clock start ticking.
Case Law
That a settlement with the federal government or a state government pursuant to CERCLA would be sufficient to trigger a CERCLA Section 113(f)(3)(B)21 action is a redundancy. But what about settlements pursuant to other environmental laws? Although there was not a definite answer to that question prior to Guam, the circuits were beginning to formulate a broad answer that favored the Federal Government as a frequent CERCLA defendant.
In 2005, the Second Circuit in Consolidated Edison Company of New York, Inc. v. UGI Utilities, Inc.22 became the first circuit court of appeals to consider whether resolution of non-CERCLA claims could trigger a contribution action under Section 113(f)(3)(B). The plaintiff, Consolidated Edison, contended that its settlement with the state of New York’s Department of Environmental Compliance (NYDEC) pursuant to New York state environmental laws was sufficient for it to sue defendant, UGI, for contribution.23 However, the Second Circuit panel disagreed and held that Section 113(f)(3)(B) does not permit contribution actions based on the resolution of state law claims apart from CERCLA.24 The court identified two key foundations underlying its holding. The first was a settlement term whereby NYDEC reserved its rights to bring a future action against the plaintiff, which arguably meant that the settlement was not a full resolution of the matter.25 The second was a House of Representatives committee report in SARA’s legislative history that the court characterized as requiring prior resolution “under CERCLA to seek contribution.”26
Five years later, a different panel of the Second Circuit held that resolution of state environmental liability and CERCLA liability with the state of New York were sufficient to trigger a contribution action.27 The Niagara Mohawk panel noted the obvious distinction that Niagara Mohawk’s consent decree had resolved its CERCLA liability and relied on the statutory text of Section 113(f)(3)(B) to conclude that the absence of the United States as a party to the consent decree posed no problem.28 The panel rested its conclusion in part on an EPA amicus brief stating that Consolidated Edison “was not correctly decided.”29 The panel’s EPA-endorsed conclusion that resolution of CERCLA liability with a state was sufficient to trigger CERCLA’s statute of limitations rendered Consolidated Edison meaningless to other circuits considering the issue in the years ahead.
In 2013, the Third Circuit in Trinity Industries v. Chicago Bridge and Iron Co. answered the same question posed by Consolidated Edison regarding whether a state environmental law settlement can trigger a contribution action in exactly the opposite manner.30 Why the court did so is key: one of the Consolidated Edison panel’s two foundational pillars was built upon sand. That sand immediately gave way when the panel noted that the House committee report language built upon by the Second Circuit panel referred to Section 113(f)(1), not Section 113(f)(3)(B).31 The court also stated that, in its view, nothing in the text of Section 113(f)(3)(B) requires resolution of CERCLA liability in particular and found further support for its holding in the overlap between CERCLA and the relevant state environmental law.32
Knowing that it would break a tie in an ongoing circuit split,33 the Ninth Circuit issued a comprehensive opinion34 for its 2017 decision in Asarco LLC v. Atlantic Richfield Co.35 The court sided with the Third Circuit to hold that a settlement under a non-CERCLA federal authority could give rise to a CERCLA contribution action.36 Cognizant of debate regarding the House committee report’s reference to CERCLA Section 113(f)(1) as opposed to (f)(3)(B), the Asarco court echoed the Third Circuit’s conclusion regarding the House SARA report37 and contrasted subsection (f)(1)’s specific language requiring a CERCLA predicate with subsection (f)(3)(B)’s lack of any such specificity.38 The court took confidence that the EPA concurred with its interpretation and further noted that SARA’s “broad remedial purpose [was]. . . to get parties to the negotiating table early to allocate responsibility . . . .”39
In 2019, the Seventh Circuit heard a case in which the plaintiff, Refined Metals Corporation, sought to escape Section 113’s three-year statute of limitations.40 In 1998, Refined had entered a settlement with the Federal Government and the state of Indiana resolving liability pursuant to the federal Clean Air Act,41 the Resource Conservation and Recovery Act,42 and state law. Since the settlement was silent regarding the resolution of CERCLA liability, Refined argued that its right to seek contribution had not been triggered.43 The Seventh Circuit disagreed, holding that “a settlement need not resolve CERCLA-specific liability in order to start the clock on a contribution action.”44 Echoing Asarco, the Seventh Circuit carefully compared CERCLA Sections 113(f)(1) and (f)(3)(B), stating that the fact that subsection (f)(3)(B) contemplates resolution under state law “makes it even more unlikely that Congress was concerned only with liability under the federal CERCLA statute.”45
To recap, prior to Guam, our CERCLA landscape had taken on a distinct shape with courts holding the following types of settlements sufficient to trigger a CERCLA contribution action: a CERCLA settlement with a state government (Niagara Mohawk)46, a non-CERCLA state environmental law settlement with a state government (Trinity Industries)47, and non-CERCLA federal environmental law settlements with the Federal Government (Asarco and Refined Metals).48 However, faint yet discernible CERCLA shadows remained in all three of the latter cases.49 Could a federal environmental law settlement that did not cite CERCLA trigger a CERCLA contribution action’s statute of limitations? Enter now Guam, the Navy, and our Army.
Guam v. United States
The roots of Guam’s 2017 case against the United States ultimately lead back to the 1940s when the Navy allegedly first began to use the Ordot Dump50 and the Army stationed dozens of Pacific Theater support units on Guam.51 While the military bases had their own landfills, the Ordot Dump was the operational landfill for the remainder of the island. Under Guam’s ownership and management since 1950, the Ordot Dump eventually became a 280-foot-tall mountain of trash. Nevertheless, the Ordot Dump lacked the basic environmental safeguards of a bottom liner and an upper cap. Both surface water runoff and rain percolating through the dump’s contents picked up hazardous wastes and carried them into the nearby Lonfit River which ultimately flows into the Pacific Ocean.52
Unsurprisingly, the Ordot Dump caught the EPA’s attention. In 1986, the EPA began a series of attempts to force Guam to clean up the Ordot Dump.53 The culmination of these attempts was a 2002 CWA lawsuit resulting in a 2004 consent decree.54 The consent decree required Guam to pay a civil penalty and close the Ordot Dump.55 Guam officially closed the Ordot Dump in 2011.56 In 2017, Guam sued the U.S. Department of Defense under CERCLA Section 107(a) for cost recovery and, alternatively, Section 113(f)(3)(B) for contribution to recoup some of the $160 million it estimated were required to close and remediate the Ordot Dump.57
The United States immediately moved to dismiss, arguing that Section 113 contribution was the only valid option of the two stated causes of action and that the 2004 consent decree had triggered Section 113’s three-year statute of limitations, which had then elapsed. The district court denied the motion, and the United States sought an interlocutory appeal in the D.C. Circuit.58 The D.C. Circuit panel first assessed and concurred with the logic of its sister circuits in concluding that Sections 107 and 113 are mutually exclusive and that Section 113 is the only remedy for plaintiffs who incur costs pursuant to a government settlement.59 The question then became whether Guam’s 2004 CWA consent decree with the Federal Government was sufficient to trigger Guam’s right to seek CERCLA contribution which would mean that the statute of limitations had run. In language echoing the prior case law, the D.C. Circuit panel highlighted the absence of CERCLA-specific language in Section 113(f)(3)(B) as compared with Section 113(f)(1) to conclude that a non-CERCLA settlement can trigger Section 113(f)(3)(B) contribution rights when it resolves the plaintiff’s liability for a prior response action.60 With Guam limited to a Section 113 suit and the 2004 consent decree triggering Guam’s Section 113 rights, the statute of limitations had run a full decade before Guam filed suit. Guam requested a rehearing en banc and, being denied, appealed to the Supreme Court.61
Going into Guam, perennial CERCLA defendants had held out hope the Supreme Court would establish that the functional equivalent of CERCLA resolution at least three years prior to the instant suit was sufficient to trigger CERCLA’s statute of limitations.
The Supreme Court heard oral argument in April 2021, and in May, unanimously reversed and decided the case in Guam’s favor. The question presented was whether a non-CERCLA settlement can trigger a contribution claim under Section 113(f)(3)(B) which would begin the statute of limitations.62 As discussed previously, the previous four of five total circuit court opinions held that a non-CERCLA settlement could trigger contribution claims under certain conditions with a distinct trend toward broadening which types of settlement were sufficient. However, in language clearer than a remediated stream63 the Supreme Court “h[e]ld that CERCLA contribution requires resolution of a CERCLA-specific liability.”64
Justice Thomas’s opinion, joined by all his colleagues, focused exclusively on the text of Section 113(f). Operating from an initial premise diametrically opposed to that of the circuit court panels deciding Asarco, Refined Metals, and Guam, the Supreme Court viewed Section 113(f)(1) as an “anchor provision”65 that moored the entirety of Section 113(f). Specifically, the relevant subsection of Section 113(f)(3)(B) refers explicitly to (f)(2), and (f)(2) itself mirrors (f)(1), the “anchor provision.”66 Read as a whole, Section 113(f), thus, presupposes only resolution of a CERCLA-specific liability as the predicate liability for contribution under Section 113.67 The Court stated that the United States’ argument (and by extension the circuit court opinions underlying it) of functional equivalence between liabilities resolved under CERCLA and other environmental statutes stretched CERCLA beyond its statutory language.68
Conclusion
A glimpse across the CERCLA landscape now, just a short while after Guam, reveals a different scene than the one that had slowly grown up beginning with Niagara Mohawk in 2010. Of the four cases discussed, only Niagara Mohawk included resolution of the CERCLA-specific liability analysis required by Guam. Trinity Industries and Refined Metals respectively involved state statutory and consent decree references to be deemed resolution of liability. After Guam, the logic and results of those opinions should not be expected to reappear on the CERCLA landscape. Going into Guam, perennial CERCLA defendants had held out hope the Supreme Court would establish that the functional equivalent of CERCLA resolution at least three years prior to the instant suit was sufficient to trigger CERCLA’s statute of limitations. However, the bud that the defendants hoped would blossom into a bright line rule was cut down, root and branch, as the SCOTUS lawn mower passed.
One thing apparent to everyone, regardless of familiarity with the technicalities of environmental law, is that a cut field inevitably grows back. How it changes over time as it grows back can be difficult, if not impossible, to forecast with certainty. Perhaps the only certainty in the immediate aftermath of Guam is that ongoing CERCLA Section 113 litigation involving a settlement more than three years prior to the complaint will endure. It’s become time to watch the grass grow yet again—and beware of the sound of a lawn mower cranking up. TAL
MAJ Hancock previously served as a litigation attorney in the Environmental Law Division, United States Army Legal Services Agency, at Fort Belvoir, Virginia. He is currently a brigade judge advocate at Fort Benning, Georgia.
Notes
1. 42 U.S.C. §§ 9601–9675. Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) practitioners and courts alike generally refer to sections of the statute, as amended, rather than to the U.S. Code. This article adopts that practice in its main text but uses the U.S. Code citation in these endnotes for ease of reference for those readers seeking to look up relevant provisions. To convert a U.S. Code section number in these endnotes back to a CERCLA section number, simply focus on the final two digits of the Code section number.
2. Guam v. United States, 141 S. Ct. 1608 (2021).
3. Clean Water Act of 1977, 33 U.S.C. §§ 1251–1388.
4. See 42 U.S.C. § 9613(g)(3).
5. Justin R. Pidot & Dale Ratliff, The Common Law of Liable Party CERCLA Claims, 70 Stan. L. Rev. 191, 248 (2018).
6. Consol. Edison Co. of N.Y., Inc. v. UGI Utils., Inc., 423 F.3d 90, 94 (2d Cir. 2005).
7. NCR Corp. v. George A. Whiting Paper Co., 768 F.3d 682, 689 (7th Cir. 2014).
8. Refined Metals Corp. v. NL Indus., 937 F.3d 928, 930 (7th Cir. 2019).
9. See Gov’t of Guam v. United States, 950 F.3d 104, 107–08 (D.C. Cir. 2020).
10. See 42 U.S.C. § 9601.
11. Id.
12. Asarco v. Atlantic Richfield Co., 866 F.3d 1108, 1116 (9th Cir. 2017).
13. SARA of 1986, Pub. L. No. 99-499, 100 Stat. 1613.
14. See Asarco, 866 F.3d at 1116.
15. See, e.g., Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., 596 F.3d 112, 124–26 (2d Cir. 2010).
16. See 42 U.S.C. §§ 9607, 9613.
17. Refined Metals Corp. v. NL Indus., 937 F.3d 928, 930 (7th Cir. 2019).
18. 42 U.S.C. § 9613(g).
19. United States v. Atl. Rsch. Corp., 551 U.S. 128 (2007).
20. Gov’t of Guam v. United States, 950 F.3d 104, 111 (D.C. Cir. 2020). See also Whittaker Corp. v. United States, 825 F.3d 1002, 1007 n.5 (9th Cir. 2016) (collecting cases).
21. Because the discussion at this point begins to focus heavily on CERCLA § 113(f), the entire subsection is provided here:
- (f) Contribution
- (1) Contribution[.] Any person may seek contribution from any other person who is liable or potentially liable under section 9607(a) [section 107(a)] of this title, during or following any civil action under section 9606 [section 106] of this title or under section 9607(a) [section 107(a)] of this title. Such claims shall be brought in accordance with this section and the Federal Rules of Civil Procedure, and shall be governed by Federal law. In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate. Nothing in this subsection shall diminish the right of any person to bring an action for contribution in the absence of a civil action under section 9606 [section 106] of this title or section 9607 [section 107] of this title.
- (2) Settlement[.] A person who has resolved its liability to the United States or a State in an administrative or judicially approved settlement shall not be liable for claims for contribution regarding matters addressed in the settlement. Such settlement does not discharge any of the other potentially liable persons unless its terms so provide, but it reduces the potential liability of the others by the amount of the settlement.
- (3) Persons not party to settlement[.]
- (A) If the United States or a State has obtained less than complete relief from a person who has resolved its liability to the United States or the State in an administrative or judicially approved settlement, the United States or the State may bring an action against any person who has not so resolved its liability.
- (B) 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 referred to in paragraph (2).
- (C) In any action under this paragraph, the rights of any person who has resolved its liability to the United States or a State shall be subordinate to the rights of the United States or the State. Any contribution action brought under this paragraph shall be governed by Federal law.
42 U.S.C. § 9613(f).
22. Consol. Edison Co. of N.Y., Inc. v. UGI Utils., Inc., 423 F.3d 90, 94 (2d Cir. 2005).
23. Id. at 95.
24. Id. at 96.
25. Id. at 96–97.
26. Id. at 96. “The report of the House Committee on Energy and Commerce accompanying SARA states that section 113 ‘clarifies and confirms the right of a person held jointly and severally liable under CERCLA to seek contribution from other potentially responsible parties.’ H.R. Rep. No. 99-253(l), at 79 (1985) (emphasis added).” Id.
27. Niagara Mohawk Power Corp., 596 F.3d 112.
28. Id. at 125–27.
29. See id. at 126, 126 n.15.
30. Trinity Indus. v. Chi. Bridge & Iron Co., 735 F.3d 131 (3d Cir. 2013).
31. Id. at 135–36. “[A]s the United States points out, this passage refers to contribution claims under § 113(f)(1), not § 113(f)(3)(B), as it is only through a civil action under section 9607(a), [CERCLA § 113(f)(1)], that a PRP may be held jointly and severally liable for response costs under CERCLA.” Id. at 136 (internal quotations removed).
32. Id. at 136–37.
33. See Asarco, 866 F.3d at 1119.
34. Unlike the aforementioned decisions that treated this series of questions almost exclusively as abstract questions of law, the Asarco court spilled a considerable amount of ink instructing its district courts how to spot a sufficient non-CERCLA settlement underlying a contribution action. The court held that the phrase “resolved its liability” requires that a potentially responsible party’s compliance obligations be determined with “certainty and finality . . . for at least some of its response actions or costs set forth in the agreement.” Id. at 1125. Neither a covenant not to sue nor a reservation of rights in and of itself prevents such a settlement from triggering a Section 113(f)(3)(B) contribution action. Id. at 1128–29. The second point was significant because it represented a rejection by a sister circuit of the Second Circuit’s other foundational pillar in Consolidated Edison. See Consol. Edison Co. of N.Y., Inc. v. UGI Utils., Inc., 423 F.3d 90 (2d Cir. 2005).
35. Asarco LLC, 866 F.3d 1108.
36. Id. at 1118–29. The Asarco court analyzed two federal settlements: a 1998 Resource Conservation and Recovery Act (RCRA) settlement and a 2009 CERCLA settlement. The court initially considered the RCRA settlement to hold that a non-CERCLA federal consent decree could trigger CERCLA contribution rights. However, the court determined that the RCRA decree did not resolve Asarco’s liability for a response action but that the later CERCLA decree did do so. Id.
37. Id. at 1120.
38. Id. at 1118–19.
39. Id. at 1119.
40. Refined Metals Corp. vs. NL Indus., 937 F.3d 928, 929 (7th Cir. 2019).
41. Clean Air Act, 42 U.S.C. §§ 7401–7671q.
42. Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901–6992k.
43. Refined Metals Corp., 937 F.3d at 929.
44. Id. at 932; cf. id. at 931.
45. Id. at 933.
46. Niagara Mohawk Power Corp., 596 F.3d 112 (2d Cir. 2010).
47. Trinity Indus. v. Chi. Bridge & Iron Co., 735 F.3d 131 (3d Cir. 2013).
48. Asarco v. Atlantic Richfield Co., 866 F.3d 1108 (9th Cir. 2017); Refined Metals Corp. vs. NL Indus., 937 F.3d 928 (7th Cir. 2019).
49. The Pennsylvania statute underlying Trinity Industries included a provision stating that remediation conducted pursuant to its provisions satisfied CERCLA. Trinity Indus. at 137. As discussed in detail in note 36, a CERCLA settlement played a role in Asarco. Refined Metals’ federal settlement included a reservation clause indicating that CERCLA clean-up had been specifically implicated. Refined Metals, 937 F.3d at 933.
50. See Gov’t of Guam v. United States, 950 F.3d 104, 108 (D.C. Cir. 2020).
51. See, e.g., John B. Flick et al., Chapter XI, Pacific Ocean Areas, in 2 Med. Dep’t, U.S. Army, Surgery in World War II: Activities of Surgical Consultants (John B. Coates, Jr. ed., 1964).
52. Gov’t of Guam, 950 F.3d at 108-09.
53. Id. at 109.
54. Id.
55. Id.
56. Id.
57. Id. at 109–10.
58. Id. at 110.
59. Id. at 110–11.
60. Id. at 113–14.
61. Gov’t of Guam v. United States, 2020 U.S. App. LEXIS 15472 (D.C. Cir. May 13, 2020) (per curiam), cert. granted, Guam v. United States, 141 S. Ct. 976 (2021).
62. Guam v. United States, 141 S. Ct. 1608 (2021).
63. See Refined Metals Corp.,937 F.3d at 931, citing Refined Metals Corp. v. NL Indus., 2018 U.S. Dist. LEXIS 163988 at *15 (S.D. In. 2018).
64. Guam, 141 S. Ct. at 1611.
65. Id. at 1612.
66. Id. at 1611-13.
67. Id. at 1611-12.
68. Id.