If you pay to clean up a toxic mess, can you use the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) to make another responsible party contribute to the cost? At the moment, the answer seems to be a resounding "maybe." In January the U.S. Supreme Court accepted a case from the Court of Appeals for the Fifth Circuit that may resolve the uncertainty.1 The appellate court's majority and dissenting opinions illustrate other courts' conflicting views.2 Meanwhile, a Third Circuit district court has disagreed with both the Fifth Circuit majority and dissenters and proposed an alternative theory.3 The Ninth Circuit Court of Appeals has also weighed in, more or less agreeing with the Fifth Circuit majority, but suggesting that the case they considered might be distinguishable.4 Surveying these courts' views suggests that in the future you may only be able to use CERCLA to make another responsible party contribute to clean-up costs if you have been a party to a CERCLA cost recovery action, administrative clean-up order, or approved settlement.
CERCLA Liability And Implied Contribution Rights
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You can be liable for cleanup costs under CERCLA if you are the owner or operator of a facility at which there are hazardous substances or if you were the owner or operator of the facility at the time of disposal.5 You can also be liable if you transported or arranged for transport, treatment, or disposal of hazardous substances.6When and how you can sue other parties who are potentially liable under CERCLA to make them contribute to those cleanup costs is less certain.
CERCLA started out in 1980 with no express provision that would permit responsible private parties to sue others to make them contribute to cleanup costs.7 Some courts found such a right in section 107(a)(4)(B), which says that covered persons are liable for "any other necessary costs of response incurred by any other person consistent with the national contingency plan."8This implies that any "other person" can seek contribution from a covered person toward that other person's incurred necessary response costs.9
Congress Adds Express Contribution Rights, But Courts Disagree On Meaning
In 1986, Congress made the implied right to seek contribution an express one through the Superfund Amendments and Reauthorization Act (SARA).10 Among other things, the SARA amendments added CERCLA subsection 113(f)(1).11 The first sentence of that subsection says, "Any person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title, during or following any civil action under section 9606 of this title or under section 9607(a) of this title."12
Some courts have read this sentence to mean that a person may seek contribution under section 113(f)(1) only when there is a pending or completed civil action under section 106 (administrative abatement orders) or section 107(a) (cost recovery actions).13 Others have had trouble reconciling that view with the subsection's last sentence, which says, "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 of this title or section 9607 of this title."14 Some courts have resolved the issue by finding that the last sentence means that a potentially responsible party who has not been the subject of a section 106 or 107 action may still seek contribution under state law.15
Other courts have decided that a pending or completed civil action under section 106 or 107 is not required before a person may seek contribution under section 113(f)(1).16 The first sentence, after all, says that a person "may," not "must" seek contribution during or following a pending action. Moreover, the last sentence says, "nothing in this subsection shall diminish" any person's right to bring a contribution action "in the absence of" a section 106 or 107 action. This seems to say that the right to bring a CERCLA contribution action is not conditioned on a prior or pending section 106 or 107 action.
The Fifth Circuit Wades Into The Fray
In 2001, a Fifth Circuit panel tackled CERCLA section 113(f)(1) in Aviall Services, Inc. v. Cooper Industries, Inc.17 The background story began in 1981 when Aviall bought an aircraft engine maintenance business from Cooper.18 Several years later, Aviall discovered that the facilities were contaminated with hazardous substances that had accumulated on Aviall's watch as well as on Cooper's.19 Aviall told the Texas Natural Resource Conservation Commission ("TNRCC") about the contamination.20 The TNRCC then sent letters to Aviall telling the company that it had violated state environmental laws.21 The Environmental Protection Agency, however, did not contact Aviall or designate the property as contaminated.22
Starting in 1984, Aviall spent ten years and millions of dollars cleaning up the facilities.23 In 1995, Aviall asked Cooper for reimbursement.24 When Cooper declined, Aviall sued. The district court granted Cooper's motion for summary judgment on Aviall's CERCLA contribution claim.25 The court held that Aviall could not pursue a CERCLA contribution claim against Cooper unless Aviall could allege that there was a prior or pending CERCLA enforcement action against Aviall.26
Aviall appealed to the Fifth Circuit, and a panel of the appellate court affirmed the district court's decision.27 The panel majority concluded that there has to be a civil action under section 106 or 107(a) before a potentially responsible party can seek contribution.28 It found that "when the word 'may' is used as an enabling provision creating a cause of action (as it is here), it establishes an exclusive cause of action and means 'shall' or'must.'"29A party can therefore sue for contribution only if it has been alleged or found liable under section 107(a), or the government has issued a cleanup order against it under section 106.30 The last sentence of section 113(f)(1), the panel said, means "that the statute does not affect a party's ability to bring contribution actions based on state law."31
The en banc court reversed. The majority, however, seemed uncertain about its interpretation. "Reasonable minds can differ," the court said, "over the interpretation of section 113(f)(1), because its syntax is confused, its grammar inexact and its relationship to other CERCLA provisions ambiguous."32 Nonetheless, the majority concluded that a potentially responsible party "may sue at any time for contribution under federal law to recover costs it has incurred in remediating a CERCLA site."33
After the court issued its opinion, Cooper petitioned the Supreme Court for a writ of certiorari. The Supreme Court invited the Solicitor General to file a brief expressing the views of the U.S.34In the U.S.' amicus curiae brief, the Solicitor General argued that the en banc court of appeals' decision was mistaken.35Accordingly, the Solicitor General urged the Supreme Court to grant Cooper's petition.36On January 9, about a month after the Solicitor General filed the U.S.' brief, the Supreme Court granted Cooper's petition.37 Records from several past years show that the Court has partly or completely reversed or vacated about 80 percent of the cases reviewed on writ of certiorari.38 The odds therefore seem to be against the Court completely agreeing with the Fifth Circuit that you can sue for CERCLA contribution at any time.
A New Jersey Court Differs
In E. I. DuPont de Nemours and Co. v. U.S., a NJ federal district court explained why the Fifth Circuit Aviall majority and dissenting opinions are both wrong.39 The DuPont plaintiffs' had asserted a section 113(f) contribution claim against the U.S., although there was no pending or prior section 106 or 107 action against them. The government moved for summary judgment, relying on statutory construction and the en banc Aviall dissenters' argument that the section 113(f)(1) savings clause preserves state law contribution claims, not CERCLA contribution claims.40
Contrary to the Aviall dissenters,DuPont found that Congress could not have intended the savings clause to preserve all state law claims.41The Third Circuit distinguishes common law remedies, which CERCLA preempts, from state statutory remedies, which CERCLA does not preempt.42If the savings clause preserved all state remedies, then the court could not reconcile the Third Circuit's preemption positions. CERCLA could not both preserve all and preempt some state law remedies.
Next, the court addressed the Fifth Circuit majority's position that the savings clause permits a contribution action without a "primary lawsuit."43 This also could not be right, the court found, because "a contribution action requires (at least) a prior or ongoing lawsuit."44 Instead, the court said, "the contribution action plaintiff must still meet all the usual preconditions of a contribution action, if only because that word is used in the so-called savings clause."45
It could be, the court suggested, that the savings clause permits a contribution action when the primary plaintiff has sued the contribution plaintiff under some other federal or state statutory or common-law cause of action.46 The court's preferred view, however, was that the savings clause confirms that party to an approved settlement can pursue a contribution action even though that party has not been the subject of a section 106 or 107 action.47 This is consistent with Section 113(f)(3)(B), which says that a settling party may seek contribution from a non-settling party:
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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).48
Ultimately, despite the court's previous statement that "a contribution action requires (at least) a prior or ongoing lawsuit," the court concluded that the savings clause confirms that a settling party can pursue an action for contribution under CERCLA section 113(f)(3) even if there has been no prior primary action.49
The Ninth Circuit Weighs In
In February the Ninth Circuit considered a case in which a property purchaser sued several oil companies to recover state ordered environmental response costs relating to the alleged dumping of "acid tar" petroleum waste on the property during the 1940s.50 The purchaser asserted both a section 107(a) cost recovery claim and a section 113(f)(1) contribution claim against the defendant oil companies.51The court said that the last sentence of section 113(f)(1) "allows for contribution actions where a judgment or settlement has determined liability."52 The purchaser was not, however, a party to either a judgment or a settlement.53 The Ninth Circuit nonetheless found that the purchaser could assert a contribution claim, based on its own simultaneous section 107(a) action, because the contribution action was literally "pursued 'during ... [a] civil action under ... 107(a).'"54 Ordinarily, as the DuPont court pointed out, a contribution claimant is one who has paid more than his equitable share of a joint liability to a third party.55 Moreover, the contribution claimant must be one against whom that third party has asserted a claim.56 The Ninth Circuit's interpretation seems contrary to these traditional ideas about contribution.In any event, its reading is "consistent with the en banc decision in the Fifth Circuit."57 Consequently, it does not help to resolve the conflict.
Conclusion
The alternative views show that reasonable minds can differ on what section 113(f)(1) means. The NJ court's reading offers an attractive way to reconcile the first and last sentences. Under this analysis, you can sue for contribution during or after a section 106 or 107 action or after an approved section 113(f)(2) settlement. What you cannot do is sue for contribution before there is a CERCLA action or approved settlement to fix the liability to which the parties will contribute.
At some point, the U.S. Supreme Court or Congress can be expected to clarify CERCLA section 113(f)(1). The odds suggest that those who pay CERCLA clean-up costs may have to wait for a lawsuit against them or an approved settlement before they try to make another CERCLA potentially liable party contribute to those costs.
1Cooper Industries, Inc. v. Aviall Services, Inc., 124 S.Ct. 981 (2004).
2See Aviall Services, Inc. v. Cooper Industries, Inc., 312 F.3d 677 (5th Cir. 2002), cert. granted, 124 S.Ct. 981 (2004).
3See E. I. DuPont de Nemours and Co. v. U.S., 2003 WL 23104700 (D. N.J. Dec. 30, 2003).
4See Western Properties Service Corp. v. Shell Oil Co., 2004 WL 259174 (9th Cir. Feb. 13, 2004).
542 U.S.C.A. § 9607(a)(1)-(4) (West 2004).
6Id.
7Key Tronic Corp. v. U. S., 511 U.S. 809, 816 (1994)
8See, e.g., City of Philadelphia v. Stepan Chem. Co., 544 F.Supp. 1135, 1143 (E.D.Pa.1982) (finding that the City, although it might be a potential responsible party, was not precluded from suing other potentially responsible parties for cleanup costs under CERCLA section 107(a)(4)(B)). See also NL Indus., Inc. v. Kaplan, 792 F.2d 896 (9th Cir.1986)(finding that CERCLA section 107(a)(4)(B) "expressly creates a private cause of action for damages" permitting one potentially responsible party to seek contribution from another potentially responsible party); Walls v. Waste Resource Corp., 761 F.2d 311, 318 (CA6 1985) (holding that the district court "erred in dismissing the plaintiffs' CERCLA count on the ground that section 9607(a)(4)(B)does not create a private right of action to recover response costs."); Pinole Point Prop., Inc. v. Bethlehem Steel Corp., 596 F.Supp. 283, 291 (N.D.Cal.1984)(finding that the present owner of a hazardous waste disposal site had standing to pursue a section 107(a)(4)(B) contribution claim against another potentially responsible party).
9See Key Tronic Corp. v. U.S. 511 U.S. 809, 818 n.11 (1994) ("That § 107 imposes liability on A for costs incurred 'by any other person' impliesÑbut does not expressly commandÑthat A may have a claim for contribution against those treated as joint tortfeasors.").Justice Scalia disagreed, concluding that the sentence expressly created a right to contribution: "Surely to say that A shall be liable to B is the express creation of a right of action."Id. at 822 (Scalia, J., dissenting).
10H.R. Rep. No. 99-253(I) (1985), reprinted in 1986 U.S.C.C.A.N, 2835, 2837.
11H. R. Rep. No. 99-253(I), at 80 (1985).
1242 U.S.C.A. § 9613 (f) (1) (emphasis added).Section 113(f)(1) provides in full:
Any person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title, during or following any civil action under section 9606 of this title or under section 9607(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 of this title or section 9607 of this title.42 U.S.C.A. § 9613 (f) (1).
13See, e.g., Marathon Oil Co. v. Tex. City Terminal Ry. Co., 172 F.Supp.2d 897, 899 (S. D. Tex. 2001) ("a potentially responsible party ("PRP") cannot file a contribution claim against another PRP under CERCLA unless it has a pending or adjudged administrative abatement order or cost recovery action against it," relying on the panel decision in Aviall Servs., Inc. v. CooperIndustries, Inc., 263 F.3d 134, 139 (5th Cir.2001), reversed, 312 F.3d 677 (5th Cir. 2002), cert. granted, 124 S.Ct. 981 (January 9, 2004)); Deby, Inc. v. Cooper Ind., 2000 WL 263985 at 5 (N. D. Ill. Feb. 29, 2000) (Deby was not permitted to pursue contribution claims in a separate action because, among other things, it had not been found liable in a prior or pending action); Estes v. Scotsman Group. Inc. 16 F.Supp.2d 983, 990 (C.D. Ill. 1998) (dismissing Estes' Section 113(f)(1) claim for want of a § 106 or § 107 proceeding against Estes"); Rockwell Int'l Corp. v. IV Int'l Corp., 702 F.Supp. 1384, 1389 (N.D. Ill. 1988) ("To receive any actual compensation through an action for contribution, the party must have been found liable as a defendant in an earlier or pending action," although the party could seek a declaratory judgment "that defendants who are jointly and severally liable should pay contribution for certain portions of that liability, only in the event the plaintiff is later found liable").
1442 U.S.C.A. § 9613(f)(1) (emphasis added).
15See, e.g., Rockwell Int'l Corp. v. IV Int'l Corp., 702 F.Supp. 1384, 1389 (N.D. Ill. 1988) ("we view the last sentence of § 9613(f) not as derogating from the requirement that a finding of liability precede any award in contribution but as an assurance that contribution remains available in other contexts, such as through Rockwell's claims for contribution under Illinois law.").
16See, e.g., Aero-Motive Co., v. Becker, No. 1:99-CV-384, 2001 U. S. Dist. Ct. LEXIS 20621 (W.D. Mich. 2001) ("since Aviall it [sic] is not binding on this Court, it is not necessary that Plaintiff be subject to a § 106 or § 107(a) claim before it may seek contribution under § 113(f)"); Coastline Terminals of Conn., Inc. v. VSX Corp., 156 F.Supp.2d 203, 208 (D. Conn. 2001) (denying a motion to dismiss and allowing plaintiff to assert a section 113(f) contribution claim, although it had not alleged a prior or pending section 106 or 107 cost recovery action); Ninth Avenue Remedial Group v. Allis Chalmers Corp., 974 F.Supp. 684 (N.D. Ind. 1997) ("this Court finds that PRP can bring a section 113 action even when no prior or pending section 106 or 107 civil actions have occurred"); Johnson County Airport Comm. v. Parsonitt Co., Inc., 916 F. Supp. 1090, 1095 (D. Kan. 1996) ("Nothing in the language of section 113(f) restricts contribution actions to parties who have incurred liability under section 107"); Companies for Fair Allocation v. Axil Corp., 853 F. Supp. 575 (D. Conn. 1994); Mathis v. Velsicol Chem. Corp., 786 F. Supp. 971 (N.D. Ga. 1991) (plaintiffs who had voluntarily obligated themselves for cleanup costs through a consent order were entitled to pursue a section 113(f) contribution claim, along with a section 107(a) claim).
17Aviall Services, Inc. v. Cooper Industries, Inc., 263 F.3d 134 (5th Cir. 2001), reversed, 312 F.3d 677, 681 (5th Cir. 2002), cert. granted, 124 S.Ct. 981 (2004).
18Id. at 136.
19Id.
20Id.
21Id.
22Id.
23Id.
24Id.
25Aviall Services, Inc. v. Cooper Industries, Inc., 2000 WL 31730 at 5-6 (N.D.Tex., Jan 13, 2000).
26Id. at 4.
27Aviall Services, Inc. v. Cooper Industries, Inc., 263 F.3d 134, 145 (5th Cir. 2001), reversed, 312 F.3d 677, 681 (5th Cir. 2002), cert. granted, 124 S.Ct. 981 (2004).
28Id. at 139.
29Id. at 138-39.
30Id. at 139.
31Id. (emphasis in original).
32Aviall Services, Inc. v. Cooper Industries, Inc., 312 F.3d 677, 680 (5th Cir. 2002), cert. granted, 124 S.Ct. 981 (2004).
33Aviall Services, Inc. v. Cooper Industries, Inc., 312 F.3d 677, 681 (5th Cir. 2002).
34Cooper Industries, Inc. v. Aviall Services, Inc., 123 S. Ct. 1823 (2003).
35Brief of Amicus Curiae U.S. at 1, Cooper Industries, Inc. v. Aviall Services, Inc. (No. 02-1192) 2003 WL 22977858 (Dec. 12, 2003).
36Id.
37Cooper Industries, Inc. v. Aviall Services, Inc., 124 S.Ct. 981 (2004).
38See The Supreme Court, 1998 Term - The Statistics, 113 Harv. L. Rev. 400, 407 (1999) (33.8% reversed and 48.5% vacated); The Supreme Court, 1997 Term - The Statistics, 112 Harv. L. Rev. 366, 373 (1998) (30.6% reversed and 43.3% vacated); and The Supreme Court, 1996 Term - The Statistics, 111 Harv. L. Rev. 431, 436 (1997-98) (32.9% reversed and 50.6 % vacated).
39E. I. DuPont de Nemours and Co. v. U.S., 2003 WL 23104700 (D. N.J. Dec. 30, 2003).
40Id. at 1-2.
41Id. at 6.
42Id.
43Id.
44Id.
45Id. at 8 (emphasis in original).
46Id. at 7.
47Id.
4842 U.S.C.A. § 9613(f)(3)(B).Paragraph 2, to which this subpart refers, says:
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.42 U.S.C.A. § 9613(f)(2).
49Id. at 11.
50Western Properties Service Corp., 2004 WL 259174 at 1-2.
51Id. at 2.
52Id. at 3.
53See id. at 2.
54Id. at 4.
55E. I. DuPont de Nemours and Co., 2003 WL 23104700 at 10.
56Id. at 11.
57Western Properties Service Corp., 2004 WL 259174 at 3."blue">"blue">"blue">"blue">
Published April 1, 2004.
