your honour's may please the court there are two issues in this case the first issue is what part of the superfund act circle applies to private parties civil action to recover its costs from other potentially responsible parties after the plaintiff entered into an agreement with e p a to perform a study of the site known as a remedial investigation feasible feasibility study or us this court in the united he versus board warner case held that that action is a  circle the second issue is that after selecting the proper vehicle for suit under the statute section one of seven cost recovery is this court held ninety or section one thirteen contribution what is the proper statute limitations that applies three years after completion of the work agreed to as we contend or three years after signing as the district court found contrary to this up parties agree that the first question whether one of the seven cost recovery or one thirteen contribution is the claim here comes down to whether the agreement in the plaintiffs and resolve to the plaintiff's liability in an administrative settlement is those terms are used under circle one thirteen three b for the work in payments agreed to the question comes down to whether liability is resolved at the moment of signing of the agreement or is it resolved when work certified is completed and payments fully made where in the agreement plaintiff is admitting a liability e p a expressly conditioned its covenant not to sue on completion of the work and e p a retained discretion to terminate the agreement or take over the work under very strict circumstances and throughout the agreement well it was certainly much more resolved after the agreement was signed than before i mean you know i think if you do certain things then it's you're not going to have any further liability their ability on their side to terminate is limited you get sort of one you know free violation as i understand it you have to go to they have to go to dispute resolution and so on i mean surely it's fair to say you're very differently situated after you go through the i would imagine considerable trouble of entering into this agreement than you are before is that common i mean we have that the common ground in this case well i wouldn't put it exactly that way whether way i would put it is that before the agreement is signed there's no agreement when the agreement is signed then you have an agreement in common terms you might call that a settlement but in this particular make remits binding correct i mean it's creating obligate actual obligation on both sides that's correct but that doesn't resolve liability well but is resolution just such a black and white issue i mean first of all let's back up one step is i read the statute and please correct me if i'm wrong because i could be wrong about everything i say about this case but  it seems to say that the agreement only needs to resolve some of your liability in order to put you in this one thirteen court to limit  b your honor does say some or all right sort of the liability but let me back up a little bit because it isn't a true then that the agreement only needs the question before us at least the question for your first issue is does this agreement resolve some of your liability is that here that's fair my answer to that is that the agreement resolves no liability at signing i do want to correct one point  circuit court called it even though the theoretically the covenant not to sue is affected immediately in reality it's the same as the i t t covenant not to sue and the other covenants to could not to sue that the d p is put into these i don't know they wouldn't if you're doing the job there's no lawsuit the key point is your liability is out there under one hundred six or one hundred seven until you complete the work and pay all the costs now the other point i was going to make about what  some people call reopening of the e p a has there actually five places in the agreement where e p a can step in take over the work and complete the work there's a section called work take over there other sections matters because it shows that the respondents who sign up for to do the work never have a full resolution of liability until the work has completed a few p a can step in finish the work in its discretion and then immunity to contribution actions from other p r p is correct there is a contribution protection section right here that's sort of a deal right i mean as i understand it in the sorts of resolutions when you get put when you get limited now i know you might not agree with the idea that it's either one or seven or one thirteen but when when you get sort of put off in the one thirteen corner you also as a benefit as i understand it get protection against other c can contribution from you that's a little bit of a complicated issue one thirteen f two in the statute provides contribution protection when you resolve liability right and in a settlement and you got that protection in this agreement correct well that's it that's an interesting question the agreement purports to give it to you career is a purported ok but the congress the statute and congress now is never delegated the power to give i'm just right now i'm just focused on the agreement so the agreement purports to give you that protection and the question is is it have any value and when do you really get it well i mean let's there is a certain iron that you know you got at least a stencil believe that protection and you haven't been sued by any other p r p i don't know if there'd be any reason for them to have sued you but you got that protection and i just wonder you if if you had been sued would you say oh actually at go ahead and sue us i mean we do have that recitation but all this is sort of i don't think not effective until we finish our job is that is that what you i thought the way you reacted i don't think we have the contribution for do you think we have to read you know agreements that way in these cases i mean that sound settlement agreements are supposed to create more certainty not chaos in well you know this is a model we didn't write it well you now but i do want to say one more thing about contribution protection it's very important the contribution protection language in the one thirteen f three b language both use expressions resolution of liability if you haven't brou resolution of liability under one thirty nine three b that gives the contribution action or the contribution protection into one thirteen f two until you finish the work and pay all the costs that's our position that's the only t did i t t hold that in the manner you just said i don't recall it being there crystal well not on the contribution protection part but certainly on the one thirteen three b part at looked at the language resolve liability same language ours the difference is after the abbey all case e p a said we better beef up our models because we're losing on the issue of contribution and we want to put in language that helps us argue or helps us take the position that there is a resolution of viability at signing in these agreements that is not a determent of the fact that that language got in the agreement in my view is not determinative of this issue there are the other provisions you have to look at the reality of these these agreements are all the same the cot the covenant not to sue doesn't really kick in until you finish the work because if you stop working or e p a decides to take over you're still subject to suit under one  there truly is a resolution of liability e p a says your liability under one zero six or one zero seven for this work in these costs is hereby terminated covenant not to sue in effect no reservations no conditions what we have that e p a to enforce the contract is a contract claim you can go to court and say we've got stipulated penalties we've got all those other other unforced mechanism intrust that's how you terminate concede that that is the a a resolution of liability but obviously wants to keep everything and all its options and take it being able to take over and five different places in the agreement and ha so one zero seven because they've conditioned the covenant not to sue and that's a i mean that's a very coherent argument has no circuit court i guess adopted that sort of more absolute approach company not to switch tell me again what their case was this is the this is the seventh circuit case dealt with two different similar administrative orders the citation is seven thirty three third full complete release of the and it went into that issue bernstein is probably the case that goes most deeply into the issues of resolution of live billet the i t t case from this court did not go as deeply into it but came to the same conclusion the only two appellate courts so far that have really dealt with the issue of resolution of liability under one thirty nine three b as well as one thirteen up to the contribution protection section are the cases i've mentioned and this case will be court my name is glenn harris i'm here on behalf of both the hobart want to know part two parties may want to speak up up sorry to discuss with your honor the issues to your honor's the issues today let me follow up on your questioning because i think you guys you folks were dead on this is a contract well let me i mean if we're going to speak of or we're just left off why does mr silver have a point about this bernstein case i mean i'm just reading  what's happened to me in the brief here and the case does kind of say what mr mr silver just described it to say it does say look if you want to resolve liability  structure contracts so that live builders is resolved immediately or you can choose to leave the question alive build the open through inclusion of reservation rights conditional covenants express express disclaimers of liability i mean it is fair to say we're in the parties may choose to leave the question of liability open through the inclusion of reservations of rights he we have here conditional covenants and expressed disclaimers of liability now maybe we shouldn't follow this case not one of our cases but it's fair to say we're in the second category here well problem the problem mr silver's argued well i mean as a predator to begin with it's fair to say we're in the second category here right i'm sorry i'm not following what we think the second  cat i mean you know if the question of liability remains open because parties are reserved rights they're conditional covenants and expressed disclaimers of liability in the agreement i mean i'm just trying to find what the common ground is move from there why it seems indisputable we have those things here isn't that fair we have conditions that say that if you materially breach the contract as judge tardo was suggesting standard contract law if you materially breach the contract the other party is excused from performance so even though the cupboard no matter what the company is even if the covenant not to sue just said you get a company to immediately just like it did it doesn't actually have to say and oh by the way if you breach the club the contract somehow materially then my covenant not to sue goes away and i'm going to sue you that's the flaw in that argument that's why just hard it was but there's a lot more than that that brings this into a kind of more gray area in terms of the resolution a liability i mean mr silver does have a point i mean this isn't just you know you pay me a million bucks and i release my claim far from this is nothing like that that's true but let me point out a key difference with bernstein opinion which oh yeah that's what i'm ass overspoke overspoke because the language in the bernstein opinion says the covenant not to sue says it is effective only upon issuance of a certificate a notice of completion by the e p a when the work is done that's what the bernstein one says are says it's effective immediately and we get to take it back only if you don't perform under the agreement that is night and day different so there is no way the mr silver is correct that the court held that these agreements are open ended that language is materially different materially different ok and so and the same is true of the i t t agreement respond to that simply he agreed that they are material changes as as your honour's already pointed out this is a contract it says right in it two things it says we agree that this is an f three settlement agreement constitutes an administrative settlement for the purposes of section one thirteen f three b of circle of pursuant to which the respondents have as of the effective date resolved the liability to united states for the work and future response costs and the set of the paragraph right immediately preceding that says the parties agree that this settlement agreement constitutes an administrative settlement for the purposes of one thirteen f two of circa the citation and the proponents are entitled as of the effective date to protection from contribution actions or claims as provided in sections one thirteen f two and one twenty two h four of circle of for the matters addressed in the settlement now as of the effective date and there's a provision in the effective date is the date of signing exactly correct your honor so what do we have here we have a contract we're not talking allegations in a complaint or writing like that these parties made this agreement specifically so that they could get exactly what they got they said you better do this or we're going to sue you and they said well we don't want to be sued we'll sign this agreement in which you covenant not to sue us and that's exactly what happened now they're here telling you that even though they agreed that it says it's an f three even though they agreed that it was a settlement under one twenty two and each it just isn't true that's their argument really is the heart that's their argument and i would suggest to you just put you suggest the judge catherine this is a contract we all know that the pool star of contract interpretation is to discern and then enforce the intent of the parties there can be no doubt whatsoever that the intent of both the united states and the pla was that this was an f three b settlement that they had the right to go sue us which is exactly what they did and that they were immune now as long as they complied with a contract from further in forstmann action that's the bargain that they got and they're now telling you well we don't really get that bargain we got nothing that's really their argument but that arguing their fingers were right i didn't hear him say that you're  so so i think this is dispositive it's case they agreed i specifically read you that they agreed that it was an age for settlement on purpose because that disposes of their statute of limitations argument as well because even though we think that this that one thirteen g three which is the contribution section of the statute of limitations should be read differently than they're proposing even if it's read as they're proposing in expressly includes an h for settlement and they've agreed that it's an age for settlement so just to be really clear if if if your honour's agree that what they said i true and it is an age for settlement this case is over because that eliminates their resolved argument and it also eliminates their statute of limitations argument they're both gone now and by the way it really isn't and one twenty two grants the president the right to settle any type of circle claim and then it prepares some rules and provisions that detail those things and one twenty two each gives the united states the authority to quote consider compromise and settled a claim under section one six zero seven of this title for costs incurred by the united states government and quote that's what h says and the words for costs incurred do not limit the nature of those costs to pass cost to future costs  or for that matter any other cost we could rewrite that section of the statute by saying for the authority to consider compromise and settle a claim under blubaugh for past or future costs incurred by the united states government and we wouldn't have to change the word incurred so nothing in the statute says they have to be passed cost or future cost it just costs incurred well the pla absolutely clear that this is an age for settlement the cost incurred by the united states are truly incurred is it i mean is it necessarily one of the other i mean in other words couldn't couldn't  be exercising were the president be exercising authority under a one twenty two way and one in one twenty two h in a single agreement or is that not possible i think it's possible i think it's possible you know because here there do seem to be arguably cares characteristics of both there in yes in fact if you look at your opinion r s r the court there looked at that  had its resolution of past costs it had a resolution of future costs and it had to the parties perform work and the artist or court said that is an age for a settlement on those facts the payment of past cost and future costs is an h for settlement and they also reference d one twenty two d your honor which is the provision that talks about work in one twenty two so actually this court has already held that that that the settlement before you today is an h for settlement because it resolves their future cost claim their oversight costs claim and again that's the end of this case if you agree with me on this  recovery settlement under one twenty two h as well as a cleanup agreement under one twenty two fifty one that's it page by fifty five fifty eight so this wasn't one twenty two a settlement there was every reason in the world that these liability or paying for the costs of cleaning up due to your having put product in the done well remember this is a motion to dismiss so i agreed that you have to take their allegations as true but those yes because the government can't go after you well no no that's very good point yes i back up yes the government to come after us because we don't have a common enough so he can't come after us but the governments can still come after us we are fair game for the e p a which is to hold back to my point which is the reason they signed this agreement they didn't want to be in the fair game category anymore they're not in the fair game category i'm in the fair game category sobieski in the area category so yes i did misspeak yes i am still subject to liability at a minimum to the united states of america to a state and to an indian tribe under one of the seven a which is who who gets to bring one of seventy action so yes i have not escaped liability not i'm not i don't know him any contribution but i have not escaped liability so and you know there's lots of good reasons why the statute of limitations i don't need to tell you folks that you understand why statute of limitation say what they have and it is unfortunate for them that they slept on the right but they slept on their right they had three years to bring this claim and they waited too long so as to them you're correct we will not pay any money for the costs on that lawsuit to them but i am completely exposed the united states or the state of ohio if they want to come after me for whatever they want to come after me for so it's did your client take the position earlier in this litigation that this was not a qualifying administrator some of my clients did and some of them didn't rephrase as mr silver does point out there are things you can alternatively plead and there are reasonable differences about was the distinction i want to make is that yes hobart one people flip flop just like the plains is a flip flop but they agreed in a contract that it was true i never agreed the contract it was true and something that some of my clients said in a brief so yes we flip flop but that's materially different from a green in a contract to something and instead of just making an argument between a brief your thank thank you morning runners nicholas de masi on behalf of the united states and may it please the court the main point that i want to make here this morning is that constraining the settlement in line with the parties expressly stated intent to resolve liability and thus give rise to contribution rights is absolutely essential to the prompt clean up of contaminated sites under the circle regime i mean and i think we get that i mean we understand your policy argument in the brief but at least speaking for myself i mean that the end of day we're going a statute here end a story and if not exactly what effect does it have in determining whether this agreement does in fact resolves hobart's liability it's not dispositive on its own what it does is it memorializes the party's intent at the time of signing the agreement to achieve a specific purpose and that is resolve liability and give rise to contribution rights and protection under the status of parties intended but  that how does that then affect our determination whether in fact there is some resolution a liability essentially what it means is that if there if we can stand here and have a considered debate about whether or not the objective manifestations on the face of this agreement resolve liability that your decision should be guided by if at all possible achieving the party's intent as the as they stated on the on the face of the agreement and what we would contend is th document actually has all of the objective manifestations that the courts of appeals including this court's decision in one nine hundred eighty have stated are necessary to resolve liability to the united states include the bernstein case it does include the bernstein case and that's very important point because that covenant not sue may not be sitting directly in front of you but i want you to know that covenant not to sue specifically stated that it did not go into effect until we issued a notice of completion for the entire work at the site that is very different in this covenant not to sue which said it takes effect immediately and on that point also i'd like to steer your honour's to this court's decision in r s r which specifically stated that a promise to perform under this type of agreement  s covenant not to sue constitutes a resolution of liability that's in the our us our decision there's another case that i'd like to point you to on that point it's an eight circuit case named dr zuber it's cited in the plaintiff's brief it's thirteen f third one twenty two and that case also explains that merely because you state that your covenant is conditioned upon satisfactory performance under the agreement that doesn't mean that you don't actually have a real covenant it just means that the covenant is subject to a condition subsequent as it's known in the contract law and so if you breach the agreement then of course the cover of the comment would evaporate the other very important objective manifestation of resolution of liability that's on the face of this agreement is that it there is an immediately effective covenant ought to sue over the costs incurred by the united states under section one twenty two h and that basically complies with this court's decision and i t t so the two primary decisions that they rely on are bernstein and i t t and what we're saying is that on the face of this document you can see how we complied with those with those requirements to resolve liability we stated  that's what we were trying to do and so you should construe this agreement in order to give effect to the parties attent intent to resolve those issues but one question that i have this was i'm in agreement apologize another question is if we were to rule against your position here would various government agencies be potentially responsible parties liable to pay the plaintiff here no your honor because the covenant not vague gave us a covenant not to sue in this i mean other entities you like the department of defense and things like that correct i understand your point and and the answer is no because there is a covenant not to sue by the appellants not to sue the united states which covers the entire united states over the matters addressed in this agreement so our argument here does not depend upon our interest in not being sued that's already been resolved by this agreement  none of the it is the u s can be sued because of the agreement you're saying that's correct your honor but i see my time is up i did have another a few points about about the  the important policy ramifications of this of this agreement if you like me to make those points i can make them i think in fairness if your time is up your time is up thank you very well thanks very much  talk i'm going to need these five minutes your honor starting with the back up again i apologize i went blank yes we do have a backlog argument it's on point two if the court determines that we have a one thirteen contribution we have made a fairly extensive argument in their briefs that the one thirteen g three statute of limitations provision doesn't provide for the kind of settlement that we entered into here in our fs settlement a work settlement nothing in one thirteen g three addresses that for good reason one third a work seldom is addressed by one hundred four b and this goes to my opponent's point about one twenty two h four and by the way your honor six for the purpose of allowing e p a to stop doing the r if this is themselves and basically deputized authorized parties that they agree will do it properly and rig and require them to enforcement threat against us we got a p r p letter and then we were asked do you want to do this work and we said yes that's under one hundred four b one twenty two h like you were hired to do the work in effect but we had to be we had to be qualified to do it for e p a to let us do it under the language you want to for a that's an important point they don't sue you and then tell you to do the work they request that you do the work consider your qualifications get you to agree to pay their oversight costs along the way and then you do it that's what happened here one twenty two each for is a completely different provision that language in twenty two age for talks about is is mr here is quoted consider compromise and settle claim under one hundred seven there was no claim against us for cost that section goes to pass cost settlements and what you could call a cash out settlements for the entire site one twenty two h four is thrown into the agreement by  and its model but that's not what we did here there was no past cost settlement a past cost settlement is an easy one thirteen f three b issue why you pay immediately you resolve your liability immediately guidance covers that one is a seven a pass cost we pay less than the whole mt you get contribution protection for the remaining amount you get your covenant not to sue you can also do it he can also do a cash out settlement pay now pay a premium and you're out of the side that's the nature of a one of one twenty two g so dominant a also identified in the statue limitations section for de minimus parties pay now and you're out of the site that's what they mean when they talk about resolving liability and that's why those are the only two administrative orders identified and one third changey three everything else the statute works if you  automatically get you a contribution action under one thirteen f one there was not they demon have to go any further than that one thirteen after one says during a filing a civil action consent decrees are always filed in court even as a pro forma complaint and settled and goes to the federal register and then entered by the judge if there's no appropriate objections so the point is iris r is an easy case to resolve i mean is it fair to care i mean thirty thousand feet is it fair to characterize your argument in light of the political law here to be you know we have to admit by the terms of the contract you have to say it was our intent to enter into an  and that's that's basically your argument today i would say it a little differently than that remember there is a statutory interpretation part of this and e p a is tried to displace the courts it's almost at the reception said this this this agreement liability regardless of what the courts and we agreed to that kind of language well was put on us and we agreed to it that's only one part of the contract a contract you got to look at off four corners this was one corner look at the other three