This week, the U.S. Supreme Court decided the case of Guam v. United States, clarifying when contribution actions under CERCLA may be brought. In a unanimous decision overturning the D.C. Circuit, the Court held that a settlement must resolve a CERCLA liability, and not liability under some other environmental statute, to trigger a contribution action under CERCLA. The Court refused to "treat 113(f)(3)(B) as a free-roving contribution right for a host of environmental liabilities arising under other laws."
The Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), sometimes referred to as the Superfund law, is complex and has been the subject of many important federal cases interpreting its interwoven provisions. Among the most litigated provisions under CERCLA is Section 113, which allows for a liable party to sue a third party for contribution under certain circumstances. In essence, Section 113 allows a responsible party (or group of parties) to clean up the contamination, settle its claims with the United States or a state, and then sue other responsible parties for reimbursement of the cleanup costs incurred.
In Guam, the U.S. Environmental Protection Agency (EPA) and Guam entered into a consent decree in 2004 for claims under the Clean Water Act, requiring Guam to pay civil penalties and take certain actions at the Ordot Dump, where both the United States and Guam disposed of hazardous substances. The consent decree provided that Guam's compliance would constitute full settlement and satisfaction of the EPA's civil claims under the Clean Water Act. Guam complied with the consent decree and incurred costs to close the landfill.
Thirteen years later, Guam sued the United States under two separate provisions in CERCLA for its share of the cost to clean up the landfill. One claim was for cost recovery under Section 107(a) allowing Guam to recover "all costs of a removal or remedial action" from any person who owned or operated a facility where hazardous substances were disposed of. The second was for contribution under Section 113(f).
Section 113(f)(2) of CERCLA provides that "a person who has resolved its liability to the United States . . . for some or all of a response action or for some or all of the costs in such action in [a] settlement may seek contribution from any person who is not [already] party to a [qualifying] settlement."1 The heart of the matter is what constitutes a "qualifying settlement" for purposes of claims brought under Section 113(f)(2).
The D.C. Circuit found that "if a party can assert a contribution claim under 113(f), then it cannot assert a cost-recovery claim under 107(a)." The Circuit Court also found that Guam's Section 113 contribution claim should be dismissed because it had not been brought within three years of the consent decree it entered into with the EPA to resolve claims under the Clean Water Act.
The Court's Ruling
The Court provided reasoning from several angles. It looked at the totality of Section 113(f), which "governs the scope of a 'contribution' claim." "That this subsection centers on and is entitled 'contribution' is the first clue that it is concerned only with the distribution of CERCLA liability."2
Since a contribution suit by its very nature apportions common liability among parties, the Court found it logical that the liability in question could only be based in CERCLA. When examining all of the provisions of Section 113(f) as a "family of contribution provisions," the Court found that they all pointed back to Section 113(f)(1), which explicitly requires a predicate CERCLA liability under sections 106 or 107(a).
The Court also looked to the "statute as a whole," noting that the title itself explains that the law is intended to be "comprehensive" in nature, and that a "federal contribution action is virtually always a creature of a specific statutory scheme."
Finally, the Court identified the fact that the Government's interpretation, defining settlement for purposes of Section 113 to include settlement of claims under anything that might resemble CERCLA, would inject significant uncertainty into the process. "Rather than requiring parties and courts to estimate whether a prior settlement was close enough to CERCLA, the far simpler approach is to ask whether a settlement expressly discharged a CERCLA liability."
Ultimately, the Court held that the most natural reading of Section113(f)(3)(B) is that contribution may be sought under CERCLA only after settling a CERCLA-specific liability. Guam is therefore free to pursue a claim under Section 107(a), having established that its prior Clean Water Act settlement did not generate a CERCLA contribution claim.