United States: CERCLA Contribution: Ninth Circuit Addresses Two Circuit Splits

In ASARCO LLC v. Atlantic Richfield Co., the U.S. Court of Appeals for the Ninth Circuit addressed two Circuit splits regarding contribution claims under Section 113(f )(3)(B) of the Comprehensive Environmental Response, Compensation, and Liability Act. This article addresses this latest development in CERCLA Section 113(f )(3)(B) caselaw.

In ASARCO LLC v. Atlantic Richfield Co., the U.S. Court of Appeals for the Ninth Circuit recently addressed two Circuit splits regarding contribution claims under Section 113(f )(3)(B) of the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA").1 First, the Ninth Circuit joined the U.S. Court of Appeals for the Third Circuit and Environ- mental Protection Agency ("EPA") in holding that settlement agreements under an authority other than CERCLA (e.g., state law; Resource Conservation and Recovery Act ("RCRA")) can give rise to a CERCLA Section 113 contribution claim.2 Second, the Ninth Circuit weighed into what does it means for a settlement agreement to "resolve" liability so as to trigger a CERCLA contribution claim, adopting a case-by-case analysis of whether "the settlement agreement decides with certainty and finality a PRP's obligations for at least some of its response actions or costs as set forth in the agreement."3

CERCLA SECTION 113(f )(3)(B) CASELAW

The Ninth Circuit's views on both of these Circuit splits will have ramifications on CERCLA litigants both in and outside of the Ninth Circuit. This article addresses what you need to know about this latest development in CERCLA Section 113(f )(3)(B) caselaw.

The Ninth Circuit Holds that Non-CERCLA Settlements May Trigger CERCLA Contribution Claims, Joining Third Circuit and EPA

Courts have been divided over whether a settlement agreement under an authority other than CERCLA (e.g., state law; RCRA) can give rise to a CERCLA contribution claim.

This issue can be a crucial one for litigants. Most notably, if such agreements do trigger a CERCLA contribution claim, then the settlor must pursue any CERCLA recovery solely through a CERCLA contribution claim and not through a cost recovery claim under CERCLA Section 107.4 Plaintiffs, however, would generally prefer to bring a CERCLA Section 107 cost recovery claim over a Section 113 contribution claim, since a Section 107 cost recovery claim is subject to a longer statute of limitations for certain costs5 and is not subject to the CERCLA contribution protection bar.6

In ASARCO LLC v. Atlantic Richfield Co., the Ninth Circuit found that CERCLA Section 113(f )(3)(B)'s "text says nothing about whether the agree- ment must settle CERCLA claims in particular" in order to give rise to a Section 113(f )(3)(B) contribution claims.7 The Ninth Circuit therefore turned to three sources to conclude that a settlement agreement need not settle CERCLA claims to trigger a Section 113(f )(3)(B) contribution claim: First, the Ninth Circuit contrasted Section 113(f )(3)(B) with the other CERCLA contribution provision at Section 113(f )(1) (which does have an express CERCLA predicate), finding that the textual differences between these two provisions provide "strong evidence that Congress intended no such predicate" in the case of CERCLA Section 113(f )(3)(B) contribution claims.8 Second, the Ninth Circuit found that such an interpretation was "consistent with CER- CLA's broad remedial purpose" and Congress' goal to incentivize parties "to settle and initiate cleanup" contamination.9 Third, the Ninth Circuit noted that EPA itself endorsed this interpretation and that EPA's view was entitled to Skidmore deference.10 For these reasons, the Ninth Circuit held that ASARCO's RCRA settlement triggered a CERCLA Section 113(f )(3)(B) contribution claim.11

With this opinion, the Ninth Circuit joins the Third Circuit Court of Appeals, which held in 2013 in Trinity Indus., Inc. v. Chicago Bridge & Iron Co., that a settlement that resolved state law liability for a response action triggered a CERCLA Section 113(f )(3)(B) contribution claim.12 District courts, including the court below in ASARCO LLC v. Atlantic Richfield Co., also have endorsed the interpretation advanced by the Ninth Circuit.13

On the other side of the Circuit split is the U.S. Court of Appeals for the Second Circuit; however, the Second Circuit appears willing to rejoin its sister Circuits on the other side of the split once given the opportunity to do so. In 2005, the Second Circuit in Consolidated Edison Co. of N.Y., Inc. v. UGI Utilities, Inc., held that CERCLA Section 113(f )(3)(B) creates a "contribution right only when liability for CERCLA claims . . . is resolved."14 The Second Circuit's interpretation rested heavily upon a 1986 House of Representatives Committee report. But, as both the Ninth and Third Circuits have noted when they subsequently split with the Second Circuit on this issue, this report reported to "a different provision—§ 113(f )(1)" and not Section 113(f )(3)(B) which is at issue.15 Indeed, the Second Circuit in its 2010 opinion Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., strongly hinted that the Second Circuit's interpretation first expressed in Consolidated Edison was incorrect and that EPA's contrary view had a "great deal of force . . . given the language of the statute."16 In other words, the Second Circuit appears poised to reconsider its prior interpretation and resolve the Circuit split once it is confronted with this issue again.

To view the full article please click here.

Footnotes

* Eric A. Rey is an associate at Arnold & Porter Kaye Scholer LLP representing clients in environmental litigation, transactional, and regulatory compliance matters. He may be reached at eric.rey@apks.com.

1 There are two different types of contribution claims under CERCLA Section. Section 113(f)(3)(B) bestows a contribution claim upon a party once it "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. . . ." 42 U.S.C. § 9613(f)(3)(B). Section 113(f)(1) bestows a contribution claim to a party "during or following any civil action under section 9606 of this title or under section 9607(a) of" CERCLA. 42 U.S.C. § 9613(f)(1).

2 ASARCO LLC v. Atlantic Richfield Co., 866 F.3d 1108 (9th Cir. Aug. 10, 2017).

3 Id. Potentially Responsible Party ("PRP").

4 Id. (citing, in support, decisions from the Second, Sixth, Seventh, Eighth, Ninth, and Eleventh Circuits Courts of Appeals).

5 Compare 42 U.S.C. § 9613(g)(2) (cost recovery claims statute of limitations), with id. § 9613(g)(3) (contribution claims statute of limitations).

6 Id. § 9613(f)(2).

7 ASARCO, supra note 2.

8 Id. ("Where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion." (quoting Russello v. United States, 464 U.S. 16, 23 (1983))).

9 Id.

10 Id.

11 Id.

12 735 F.3d 131, 136 (3d Cir. 2013).

13 ASARCO LLC v. Atl. Richfield Co., 73 F. Supp. 3d 1285, 1292 (D. Mont. 2014); Exxon Mobil Corp. v. United States, 108 F. Supp. 3d 486, 510 (S.D. Tex. 2015).

14 423 F.3d 90, 95 (2d Cir. 2005).

15 Trinity Indus., 735 F.3d at 136.

16 596 F.3d 112, 126 n.15 (2d Cir. 2010).

Previously published in Pratt's Energy Law Report

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.