The 9th Circuit Court of Appeals revived a contribution action under CERCLA, and in the course of ruling, it addressed three issues of first impression in the Circuit regarding contribution litigation under CERCLA. Asarco, LLC v. Atlantic Richfield Company.
First, it joined the 7th Circuit in holding that a settlement entered into under an authority other than CERCLA could give rise to a CERCLA contribution action. Second, it held that corrective measures under a RCRA settlement could be response actions for purposes of CERCLA. Third, it held that in order to bring a contribution action under CERCLA Section 113(f)(3)(B), a party must resolve with "certainty and finality" at least some of its liability for response costs at the site. In addressing the latter issue, the court addressed not only the absence of such resolution in the RCRA decree at issue, but also clarified what it would require by way of “certainty and finality” to establish resolution in a CERCLA settlement.
Asarco brought its contribution action in June 2012, three years to the day after entry of a settlement with the United States in Asarco’s bankruptcy. Atlantic Richfield sought dismissal of the case because Asarco had entered into a 1998 settlement of RCRA claims at the same facility, paying a civil penalty and committing to substantial cleanup activities. Thus, the case hinged on which settlement commenced the start of the three year statute of limitations for contribution claims under CERCLA.
The district court held that the RCRA settlement satisfied the provisions of Section 113, and dismissed the action as untimely filed. On appeal, the 9th Circuit agreed with the district court that a settlement satisfying Section 113 did not have to be a CERCLA settlement, and also that cleanup actions taken under the RCRA settlement were response actions for purposes of that section. It found that, however, that the RCRA settlement, unlike the bankruptcy agreement, did not constitute a final resolution of any part of Asarco’s liability under CERCLA.
In ruling, the court noted that the specific terms of the RCRA settlement resolved only liability for civil penalties, and specifically reserved all authority of the US to take other actions under CERCLA and other statutes. More significant for future cases, the court, contrary to decisions in the 6th and 7th circuits, also held that “certainty and finality” is not defeated by a party’s non-admission of liability, or by terms that reserve the government’s ability to enforce the agreement, or that condition the release of liability on completed performance of the terms of the agreement—all provisions ubiquitous in CERCLA settlements with EPA and the Department of Justice.
The often confusing language of CERCLA has given rise to a great deal of litigation, particularly in the area of contribution claims. As the court notes, the test of certainty and finality will require a case by case analysis. However, this decision provides parties a much clearer road map for analysis of such claims, at least in the 9th Circuit.