Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-12-17245/USCOURTS-ca9-12-17245-0/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

AMERIPRIDE SERVICES INC., a

Delaware Corporation,

Plaintiff-Appellee,

v.

TEXAS EASTERN OVERSEAS INC., a

Delaware Corporation dissolved,

Defendant-Appellant.

No. 12-17245

D.C. No.

2:00-cv-00113-

LKK-JFM

OPINION

Appeal from the United States District Court

for the Eastern District of California

Lawrence K. Karlton, Senior District Judge, Presiding

Argued and Submitted

November 20, 2014—San Francisco, California

Filed April 2, 2015

Before: Ferdinand F. Fernandez and Sandra S. Ikuta,

Circuit Judges, and William H. Albritton III, Senior

District Judge.*

Opinion by Judge Ikuta

* The Honorable William H. Albritton III, Senior District Judge for the

U.S. District Court for the Middle District of Alabama, sitting by

designation.

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2 AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

SUMMARY**

Environmental Law

The panel vacated the district court’s judgment after trial

in a contribution action under the Comprehensive

Environmental Response, Compensation, and Liability Act

arising out of the contamination of the soil and groundwater

in an industrial area of Sacramento, California.

Agreeing with the First Circuit, and declining to follow

the reasoning of the Seventh Circuit, the panel held that in

allocating liability to a nonsettling defendant in a CERCLA

contribution action, the district court is not required to apply

either the proportionate share approach of the Uniform

Comparative Fault Act or the pro tanto approach of the

Uniform Contribution Among Tortfeasors Act, but rather has

discretion to determine the most equitable method of

accounting for settlements between private parties. The panel

held that because the district court first ruled that it was

adopting the proportionate share approach but later, at trial,

effectivelyapplied the pro tanto approach, and did not explain

its methodology for complying with CERCLA § 9613(f) and

furthering the goals of CERCLA, the panel could not

determine whether the district court abused its discretion in

allocating response costs (costs of cleanup of contaminated

soil and groundwater). Accordingly, the panel remanded the

case to the district court for further proceedings.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS 3

Consistent with the Tenth Circuit, the panel held that a

party can seek contribution under § 9613(f)(1) only for

settlement costs that were for necessary response costs

consistent with the national contingency plan, a plan

promulgated by the federal government to guide federal and

state response actions. Accordingly, the district court erred

in failing to determine the extent to which costs were incurred

consistent with the plan. The panel held that the district court

also erred in setting the date on which prejudgment interest

began to accrue and in assigning causes of action pursuant to

Cal. Civ. Proc. Code § 708.510.

COUNSEL

Fred M. Blum (argued) and Erin K. Poppler, Bassi Edlin Huie

& Blum LLP, San Francisco, California; Ronald Bushner,

Wilson, Elser, Moskowitz, Edelman, & Dicker LLP, San

Francisco, California, for Defendant-Appellant.

Philip C. Hunsucker (argued), Brian L. Zagon, Maureen B.

Hodson, and Marc A. Shapp, Hunsucker Goodstein PC,

Lafayette, California; Lee N. Smith, Weintraub Tobin

Chediak Coleman Grodin Law Corporation, Sacramento,

California, for Plaintiff-Appellee.

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4 AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

OPINION

IKUTA, Circuit Judge:

This appeal requires us to determine whether the district

court erred in calculating and allocating liability under the

ComprehensiveEnvironmental Response,Compensation, and

Liability Act of 1980 (CERCLA), 42 U.S.C. §§ 9607(a) and

9613(f), in AmeriPride Services Inc.’s contribution action

against Texas Eastern Overseas, Inc. (TEO). TEO challenges

(1) the district court’s method of allocating liability among

settling and nonsettling parties; (2) its determination that

AmeriPride could recover costs that were not “necessary

costs of response incurred . . . consistent with the national

contingency plan,” § 9607(a)(B);1(3) its selection of the date

prejudgment interest started accruing based on equitable

factors, rather than on the accrual dates specified in

§ 9607(a); and (4) its assignment of TEO’s causes of action

against its insurers to AmeriPride. We have jurisdiction

pursuant to 28 U.S.C. § 1291, and we vacate the district

court’s judgment and remand for further proceedings.

I

We begin by reviewing the statutory framework

applicable to this appeal. CERCLA, 42 U.S.C.

§§ 9601–9675, is a statutory scheme giving the federal

government broad authority to require responsible parties to

clean up contaminated soil and groundwater. Key Tronic

Corp. v. United States, 511 U.S. 809, 814 (1994). Section

1 Because each of the lettered subparagraphs in § 9607(a) applies to each

of the numbered subparagraphs, we refer to the four lettered

subparagraphs as subdivisions of § 9607(a) itself.

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AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS 5

9607(a) states that any enumerated responsible party,

including any person who is a current owner or operator of

contaminated property, is liable for “any . . . necessary costs

of response incurred by any other person consistent with the

national contingency plan.” 42 U.S.C. § 9607(a)(B).2

“Response” costs are limited to cleanup, enforcement, and

related security costs. 42 U.S.C. § 9601(23)–(25). The

national contingency plan (NCP) is a national plan

promulgated by the federal government to guide federal and

state response actions. 42 U.S.C. § 9605; 40 C.F.R. pt. 300

(publishing the NCP). A private person (someone who is not

the United States, a state, or a tribe) who has incurred

 

2

 42 U.S.C. § 9607(a) provides in pertinent part:

(a) Covered persons; scope; recoverable costs and

damages; interest rate; “comparable maturity” date

Notwithstanding any other provision or rule of law, and

subject only to the defenses set forth in subsection (b)

of this section— [persons specified in (a)(1)–(4)] shall

be liable for—

(A) all costs of removal or remedial action incurred by

the United States Government or a State or an Indian

tribe not inconsistent with the national contingency

plan;

(B) any other necessary costs of response incurred by

any other person consistent with the national

contingency plan;

. . . . The amounts recoverable in an action under this

section shall include interest on the amounts

recoverable under subparagraphs(A) through (D). Such

interest shall accrue from the later of (i) the date

payment of a specified amount is demanded in writing,

or (ii) the date of the expenditure concerned. . . . .

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6 AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

“necessary costs of response” that are consistent with the

NCP, 42 U.S.C. § 9607(a)(B), may bring an action to recover

such costs, including “interest on the amounts recoverable.” 

§ 9607(a).

In addition to allowing private parties to sue for cost

recovery under § 9607(a), CERCLA also authorizes a

responsible party who has incurred liability under § 9607(a)

to bring an action for contribution under § 9613(f)(1) against

anyother potentially responsible party.

3

“Contribution” is not

defined in CERCLA, but is interpreted to mean “the

tortfeasor’s right to collect from others responsible for the

same tort after the tortfeasor has paid more than his or her

proportionate share, the shares being determined as a

percentage of fault.” United States v. Atl. Research Corp.,

551 U.S. 128, 138 (2007) (internal quotation marks omitted). 

“In resolving contribution claims, the court may allocate

 

3

 42 U.S.C. § 9613(f)(1) provides:

(1) Contribution

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.

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AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS 7

response costs among liable parties using such equitable

factors as the court determines are appropriate.” § 9613(f)(1). 

CERCLA does not limit the equitable factors a court may

consider.

II

We now turn to the facts of this case. This action arose

out of the contamination of the soil and groundwater in an

industrial area of Sacramento, California. Valley Industrial

Services, Inc. (VIS) operated an industrial dry cleaning and

laundry business at that site for seventeen years. VIS used

perchloroethylene (PCE) as a solvent in its dry cleaning

operations. PCE is designated as a “hazardous substance”

under CERCLA. 42 U.S.C. § 9602; 40 C.F.R. § 302.4. 

During its operations, VIS released PCE into the

environment. VIS eventually merged into TEO, which

expressly assumed VIS’s liabilities.

VIS was a wholly owned subsidiary of Petrolane, Inc.

during part of the time it was operating at the Sacramento

site. In 1983, Petrolane sold the Sacramento site; the property

passed through various hands until AmeriPride became the

owner. During AmeriPride’s ownership, there were

additional releases of PCE-contaminated water into the soil

and groundwater. The contamination at the Sacramento site

migrated onto a neighboring property owned by Huhtamaki

Foodservices, Inc. (Huhtamaki), and contaminated

groundwater wells owned by California-American Water

Company (Cal-Am). Chromalloy American Corporation,

which owned property in the vicinity of the Sacramento site,

also released hazardous substances that contributed to the

contamination on AmeriPride’s property.

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8 AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

AmeriPride’s environmental consultant found evidence of

PCE in the soil under the Sacramento site during a remodel

in 1997. AmeriPride reported its discovery to regulatory

authorities, and a state agencydirected AmeriPride to conduct

additional sampling and install monitor wells. In 2002, after

AmeriPride had conducted the additional sampling and

monitoring, the state agency took regulatory control over the

Sacramento site investigation. Since then, AmeriPride has

performed investigation and remediation of the PCE in the

soil and groundwater at and near the Sacramento site under

the direction of the state agency. The cleanup is ongoing.

In January 2000, AmeriPride filed a complaint in district

court against VIS, Petrolane, TEO, and Chromalloy under

42 U.S.C. §§ 9607(a) and 9613, seeking to recover costs it

incurred responding to the PCE contamination. TEO asserted

a counterclaim for contribution under § 9613(f). AmeriPride

subsequently entered into settlement agreements with

Chromalloy and Petrolane, for $500,000 and $2.75 million

respectively.

Both Cal-Am and Huhtamaki subsequently brought suit

against AmeriPride. In July 2002, Cal-Am filed a complaint

against AmeriPride seeking recovery of its response costs,

damages, and other relief in connection with the

contamination of its wells. AmeriPride paid Cal-Am $2

million to settle these claims. In the settlement agreement,

Cal-Am agreed to release AmeriPride from all claims arising

out of or related to the “interference with, or destruction or

loss of use of” either Cal-Am’s wells or the parcels of real

property on which the wells were located. In July 2004,

Huhtamaki filed a complaint against AmeriPride seeking cost

recovery under CERCLA and state law, and asserting

common law causes of action for nuisance, trespass, and

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AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS 9

negligence. AmeriPride paid Huhtamaki $8.25 million to

settle Huhtamaki’s claims. In the settlement agreement,

AmeriPride and Huhtamaki mutually agreed to release each

other from all charges or damages related to or arising from

the claims asserted in Huhtamaki’s complaint, “including . . .

the costs of replacement water claimed by Huhtamaki.”

The district court approved AmeriPride’s settlement

agreements in July 2007 in an order entering judgment under

Federal Rule of Civil Procedure 54(b). In its order, the court

noted that federal courts in California approving settlements

involving CERCLA have adopted section 6 of the Uniform

Comparative Fault Act as federal common law to determine

how the settlement of one or more parties will impact the

nonsettling parties, and stated that “[t]his Court does the same

here.” It then held that “Section 6 of the Uniform

Comparative Fault Act (‘UCFA’) . . . in pertinent part, is

hereby adopted as the federal common law in this case for the

purpose of determining the legal effect of the settlement

agreements.”

Meanwhile, litigation between AmeriPride and TEO

continued. On January 7, 2011, AmeriPride filed a motion

for summary judgment against TEO seeking, among other

things, an order holding TEO liable to AmeriPride under

42 U.S.C. § 9607(a) for its response costs, including the

amounts paid in settlement to Cal-Am and Huhtamaki. 

AmeriPride also moved to dismiss TEO’s counterclaim under

42 U.S.C. § 9613(f) for contribution.

In an order dated May 12, 2011, the court ruled that TEO

was liable for AmeriPride’s response costs under § 9607(a)

as a matter of law. Next, the court held that the amounts

AmeriPride paid in settlement to Cal-Am and Huhtamaki

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10 AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

were not recoverable under § 9607(a), but permitted

AmeriPride to file an amended complaint seeking to recover

these amounts under § 9613(f).4In light of this ruling, the

court did not address whether those amounts were necessary

response costs that had been incurred consistent with the

NCP, though it held that AmeriPride’s other response costs

met that criterion. The district court concluded that triable

questions of fact remained regarding a number of other

issues, including the equitable allocation of response costs

between TEO and AmeriPride under § 9613(f). The district

court therefore set a date for a bench trial to resolve these

remaining issues.

Before trial, TEO moved the court for an order reasserting

its previous ruling that the UCFA proportionate share

approach would applyto determine the effect of AmeriPride’s

settlements with Chromalloy and Petrolane. At the hearing

on its motion, TEO explained that under section 6 of the

UCFA, the court had to calculate the amount of Chromalloy’s

and Petrolane’s equitable shares of the response costs, and

reduce AmeriPride’s claims against TEO by that amount. 

The district court denied this motion. The court indicated that

it would use equitable factors to allocate response costs

between AmeriPride and TEO, but that the liability of the

settling parties “is measured by the settlement that the court

found fair and reasonable.” Accordingly, the court held that

it would reduce AmeriPride’s claims against TEO only by the

dollar value of Chromalloy’s and Petrolane’s settlements.

In its motion in limine, TEO also asked for an order

requiring AmeriPride to prove that its settlements with

Huhtamaki and Cal-Am were for necessary costs of response

 

4

 AmeriPride filed such an amended complaint on May 24, 2011.

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AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS 11

incurred consistent with the NCP. The court denied this

motion as well, mistakenly stating that it had resolved this

issue in its May 12, 2011 order, and agreeing with

AmeriPride that because the response action at the

Sacramento site was NCP compliant, it did not need to make

an individual determination regarding whether the settlement

with Cal-Am and Huhtamaki met that criterion.

After a bench trial, the district court entered a final order

and judgment against TEO. First, the district court found that

$15,508,912 was the amount of AmeriPride’s damages

subject to equitable apportionment. The court reached this

number by taking several steps. It first totaled all of

AmeriPride’s response costs, including its investigation,

remediation, and regulatory oversight costs. The court added

this sum to the amounts AmeriPride paid to settle Huhtamaki

and Cal-Am’s claims, and rejected TEO’s argument that it

must first determine the extent to which these payments were

for necessary response costs incurred consistent with the

NCP. AmeriPride’s response costs and settlement costs

together totaled $18,758,912. The court then deducted $3.25

million to account for the money AmeriPride received from

settling its claims with Chromalloy and Petrolane.

Second, the district court apportioned the $15,508,912

amount equally between AmeriPride and TEO, resulting in

each party being responsible for $7,754,456. Because

AmeriPride had been bearing the costs of response for many

years, the court held that TEO would also be responsible for

prejudgment interest, accruing from the date the costs were

incurred by AmeriPride. The court rejected TEO’s argument

that such interest did not begin to accrue until the date

AmeriPride demanded payment of a specified amount in

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12 AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

writing, see § 9607(a)(i), stating that the interest accrual date

was “a matter of equity rather than statutory requisites.”

After the district court entered its judgment, TEO filed a

renewed motion for judgment as a matter of law and moved

to amend or alter the judgment. AmeriPride moved for an

order directing TEO to assign its causes of action against its

insurers to AmeriPride. The district court denied TEO’s

motions and granted AmeriPride’s. TEO timely appealed the

district court’s judgment.

III

We review the district court’s interpretation of a statute de

novo. See Boeing Co. v. Cascade Corp., 207 F.3d 1177, 1182

(9th Cir. 2000). When interpreting a statute, “[o]ur task is to

construe what Congress has enacted.” Carson Harbor Vill.,

Ltd. v. Unocal Corp., 270 F.3d 863, 877 (9th Cir. 2001) (en

banc) (alteration in original). “[W]e look first to the plain

language of the statute, construing the provisions of the entire

law, including its object and policy, to ascertain the intent of

Congress.” Id. (alteration in original) (internal quotation

marks omitted).

We begin with TEO’s argument that although the district

court properly recognized that TEO was entitled to a credit

for AmeriPride’s settlements with Huhtamaki and Cal-Am, it

applied the wrong method to determine how that credit

should be determined. This claim first requires an

understanding of the two leading methods for allocating

liability to a nonsettling defendant after other responsible

parties have entered into a settlement agreement to resolve

their responsibility for an injury.

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AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS 13

A

When a statute does not provide an approach for

determining how to credit settlements in cases involving

settlements with less than all the jointly and severally liable

tortfeasors, courts generally look to either the Uniform

Contribution Among Tortfeasors Act (UCATA), sometimes

referred to as the pro tanto approach, or the Uniform

Comparative Fault Act (UCFA), sometimes referred to as the

proportionate share approach. See, e.g., McDermott, Inc. v.

AmClyde, 511 U.S. 202, 208–09 & n.8, 217 (1994). The

UCATA and the UCFA are model acts proposed by the

National Conference of Commissioners on Uniform State

Laws that advocate competing methods of accounting for a

settling party’s share when determining the amount of a

nonsettling defendant’s liability. See id. at 209 n.8.

The UCFA, which takes the proportionate share approach,

provides that when an injured party settles with one of

multiple tortfeasors, the settlement does not discharge the

nonsettling tortfeasors but reduces the injured party’s claims

against them by the amount of the settling tortfeasor’s

proportionate share of the damages. See UCFA § 6.5 Courts

 

5

 Uniform Comparative Fault Act § 6 states:

A release, covenant not to sue, or similar agreement

entered into by a claimant and a person liable

discharges that person fromallliabilityfor contribution,

but it does not discharge any other persons liable upon

the same claim unless it so provides. However, the

claim of the releasing person against other persons is

reduced by the amount of the released person’s

equitable share of the obligation, determined in

accordance with the provisions of Section 2.

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14 AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

adopting the UCFA proportionate share approach must

therefore “determine the responsibility of all firms that have

settled, as well as those still involved in the litigation.” Am.

Cyanamid Co. v. Capuano, 381 F.3d 6, 20 (1st Cir. 2004)

(internal quotation marks omitted). The nonsettling

tortfeasors will be responsible only for their proportionate

share of the costs, even if the settling tortfeasor settles for less

than its fair share of the injury. Under this approach, an

injured party who settles for too little may not receive full

recovery. The district court in this case expressly adopted the

UCFA proportionate share approach in its July 2, 2007 order

approvingthe settlement agreements between AmeriPride and

the settling defendants, Chromalloy and Petrolane.

The UCATA pro tanto approach provides that when an

injured party settles with one of two or more tortfeasors for

the same injury, the settlement does not discharge the

nonsettling tortfeasors but reduces the injured party’s claims

against them by the dollar value of the settlement. See

UCATA (Revised) § 4(a) (1955).6If the settling tortfeasor

 

6

 Uniform Contribution Among Tortfeasors Act § 4 provides:

When a release or a covenant not to sue or not to

enforce judgment is given in good faith to one of two or

more persons liable in tort for the same injury or the

same wrongful death:

(a) It does not discharge any of the other tortfeasors

from liability for the injury or wrongful death unless its

terms so provide; but it reduces the claim against the

others to the extent of any amount stipulated by the

release or the covenant, or in the amount of the

consideration paid for it, whichever is the greater; and,

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AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS 15

settles for less than its proportionate share of the injury, the

nonsettling tortfeasors will end up paying more than their

proportionate share. While this approach encourages early

settlement, see McDermott, 511 U.S. at 214–15, it also gives

rise to a potential for unfairness or collusive settlements, see

Franklin v. Kaypro Corp., 884 F.2d 1222, 1230 (9th Cir.

1989). To remedy this concern, courts and legislatures

adopting the UCATA pro tanto approach for resolving state

tort claims or pursuant to statute often require “good-faith

hearings” before approving a settlement. McDermott,

511 U.S. at 213. “When such hearings are required, the

settling defendant is protected against contribution actions

only if it shows that the settlement is a fair forecast of its

equitable share of the judgment.” Id.

Despite having previously adopted the UCFA

proportionate share approach, the district court concluded at

a motion in limine hearing that it would not determine the

proportionate share of the damages attributable to

Chromalloy and Petrolane. Instead, it held it would reduce

the amount of AmeriPride’s claim by the dollar amount paid

by Chromalloy and Petrolane, the settling defendants.

B

TEO argues that CERCLA requires that courts apply the

UCFA proportionate share approach to determine how to

credit settlements in cases involving private settlements with

less than all the potentially responsible parties.

(b) It discharges the tortfeasor to whom it is given from

all liability for contribution to any other tortfeasor.

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16 AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

We have generallyfavored the UCFA proportionate share

approach when construing federal statutes that authorize

contribution but are silent regarding how liability should be

allocated to nonsettling defendants. See Franklin, 884 F.2d

at 1231–32 (9th Cir. 1989); see also In re Exxon Valdez,

229 F.3d 790, 798 (9th Cir. 2000).

In Franklin, we considered how courts should allocate

liability to nonsettling defendants in the context of a

settlement in a securities case brought pursuant to section

11(f) of the Securities Act of 1933, 15 U.S.C. § 77k(f).7

884

F.2d at 1225–26. We noted that while § 77k(f) provided that

defendants could recover contribution from other liable

parties, it did not provide any guidance for partial settlements. 

Id. at 1228. Given that settlements in securities cases “affect

substantive rights that are the province of federal courts,” we

concluded it was necessary to develop federal common law

on this issue, and considered various approaches. Id. at

1228–29. We declined to hold that federal courts should

adopt the contribution law of the forum state. Id. at 1228. 

We also rejected the UCATA pro tanto approach. Id. at

1230–31. Ultimately, we concluded that the UCFA

proportionate share approach was preferable, noting that

“[t]he principles of compensation and contribution are in

tension with the goals of full disclosure and settlement in

 

7

 Section 77k(f)(1) provides:

[E]very person who becomes liable to make any

payment under this section may recover contribution as

in cases of contract from any person who, if sued

separately, would have been liable to make the same

payment, unless the person who has become liable was,

and the other was not, guilty of fraudulent

misrepresentation.

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AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS 17

actions under the securities laws,” and “the most efficacious

and equitable method of resolving this tension is by adopting

a rule allowing only proportional liability if a contribution bar

is entered as part of a pretrial partial settlement.” Id. at 1232. 

Accordingly, we concluded that “[i]n the absence of any

guidance from Congress, such a rule becomes part of the

federal common law.” Id.

In a subsequent case, we held that the district court

abused its discretion when it refused to enforce an agreement

between settling parties designed to obtain the “functional

equivalent of a proportionate share allocation of damages”

because “[t]he proportionate share approach is the law in the

Ninth Circuit” and both the Ninth Circuit and the Supreme

Court have “endorsed” the proportionate share approach in

other contexts due to “its superiority in blending fairness to

the parties with incentives to settle.” In re Exxon Valdez,

229 F.3d at 797–98.

The Supreme Court has likewise favored the UCFA

proportionate share approach in federal admiralty law. See

McDermott, 511 U.S. at 217. In McDermott, the Supreme

Court reasoned that the UCFA proportionate share approach

was “superior” to the UCATA pro tanto approach in

admiralty because it was consistent with the rule that

damages in an admiralty suit be assessed on the basis of

proportionate fault. Id. at 211, 217.

Despite this precedent, we cannot read federal common

law into a statute if we determine it is contrary to

congressional intent. See Native Vill. of Kivalina v.

ExxonMobil Corp., 696 F.3d 849, 856 (9th Cir. 2012)

(“Federal common law is subject to the paramount authority

of Congress.”) (citing New Jersey v. New York, 283 U.S. 336,

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18 AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

348 (1931)); see also United States v. Northrop Corp.,

59 F.3d 953, 958 (9th Cir. 1995) (“Even if federal common

law otherwise would operate, it is displaced when Congress

has decided the matter.”) Accordingly, before applying

federal common law, we must first interpret the statute and

attempt to ascertain congressional intent to determine if

Congress has decided the matter. See Northrop, 59 F.3d at

958. In the CERCLA context, “[a]lthough we presume the

application of well-established common law principles to a

federal statute, this presumption does not apply ‘when a

statutory purpose to the contrary is evident.’” Chubb Custom

Ins. Co. v. Space Sys./Loral, Inc., 710 F.3d 946, 958 (9th Cir.

2013) (quoting United States v. Texas, 507 U.S. 529, 534

(1993)). “Congress need not ‘affirmatively proscribe’ the

common law principle to evince this intent.” Id. Rather,

congressional intent can be inferred from the statutory text,

the structure of the statute and the relationship between its

provisions, and “CERCLA’s overall statutory purpose.” See

id. at 960–61.

Here, there are strong indications that Congress did not

intend to require district courts to apply the UCFA

proportionate share approach in cases involving litigation

among private parties. CERCLA specifies an approach for

allocating liability to a nonsettling defendant in one

circumstance only: when the federal or state government has

incurred recoverable response costs and enters into a

settlement agreement. See § 9613(f)(2). Section 9613(f)(2)

provides that a settlement agreement between the state or

federal government and one responsible party, “reduces the

potential liability of the others by the amount of the

settlement,” i.e., it requires the UCATA pro tanto approach. 

By contrast, CERCLA does not specify how a settlement

agreement between two private parties affects the liability of

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nonsettling parties. See § 9613(f). The requirement that

courts apply the UCATA pro tanto approach for government

settlements in § 9613(f)(2), and the lack of any such a

requirement in private party settlements, leads to the

conclusion that Congress did not intend to impose a uniform

requirement for a particular approach in private party

settlements. See Keene Corp. v. United States, 508 U.S. 200,

208 (1993) (“[W]here Congress includes particular language

in one section of a statute but omits it in another . . . , it is

generally presumed that Congress acts intentionally and

purposely in the disparate inclusion or exclusion.”)

(alterations in original) (internal quotation marks omitted);

see also Cent. Bank of Denver, N.A. v. First Interstate Bank

of Denver, N.A., 511 U.S. 164, 176–77 (1994) (concluding

that Congress did not intend to impose aiding and abetting

liability under the Securities Act of 1934 where the plain

language of the statute did not impose such liability, yet other

statutes showed that “Congress knew how to impose aiding

and abetting liability when it chose to do so”). CERCLA’s

statutory language is best read as leaving the allocation of

liability among responsible parties to be guided by

§ 9613(f)(1)’s more general principle that “the court may

allocate response costs among liable parties using such

equitable factors as the court determines are appropriate.” 

Such flexibility would further one of CERCLA’s core

purposes of “foster[ing] settlement through its system of

incentives and without unnecessarily further complicating

already complicated litigation.” Chubb Custom, 710 F.3d at

971 (internal quotation marks omitted).

In light of CERCLA’s statutory scheme, neither Franklin

nor McDermott is applicable. Franklin held that the

“statutorily created right to contribution” in § 77k(f)(1) left

courts “free to fashion a common law” because Congress had

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not “created laws governing the right it created.” 884 F.2d at

1228 n. 10. Moreover, in adopting the UCFA proportionate

share approach, Franklin focused on the policy goals of the

securities law, noting the “statutory goal of punishing each

wrongdoer.” Id. at 1231. In CERCLA, by contrast, the

statutory text and “CERCLA’s overall statutory purpose,”

Chubb, 710 F.3d at 961, weigh against adopting the UCFA

proportionate share approach as a matter of federal common

law. Congress required the use of the UCATA pro tanto

approach in cases involving settlements between a private

party and the government, but otherwise granted courts

discretion to allocate response costs among liable parties. See

§ 9613(f)(1)–(2). Further, Congress’s preference for the

UCATA pro tanto approach in government settlements

weighs against mandating a single different approach in the

private party context. Cf. AkzoNobel Coatings, Inc. v. Aigner

Corp., 197 F.3d 302, 308 (7th Cir. 1999) (adopting the

UCATA pro tanto approach for private party settlements to

be consistent with Congress’s adoption of this approach in

§ 9613(f)(2)). Nor do CERCLA’s policy goals fully coincide

with the policy goals identified in Franklin for securities law. 

Although CERCLA has a “secondary purpose” of “assuring

that ‘responsible’ persons pay for the cleanup,” its focus is on

protecting the public health and environment “by facilitating

the expeditious and efficient cleanup of hazardous waste

sites.” Carson Harbor, 270 F.3d at 880. Because the UCFA

proportionate share approach does not promote early

settlement to the same extent as the UCATA pro tanto

approach, it may not be the best approach for furthering the

goals of CERCLA in all cases.

Nor is McDermott controlling. In McDermott, the

Supreme Court concluded that the UCFA proportionate share

approach was “superior” to the UCATA pro tanto approach

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in admiralty because it was consistent with the rule that

damages in an admiralty suit be assessed on the basis of

proportionate fault. See 511 U.S. at 207, 217. CERCLA has

no similar rule. Rather, we have recognized that CERCLA

contemplates that responsible parties who fail to enter into an

early settlement agreement “‘may ultimately bear a

disproportionate share of the CERCLA liability.’” United

States v. Coeur d’Alenes Co., 767 F.3d 873, 875 (9th Cir.

2014).

Accordingly, we reject TEO’s argument that because

CERCLA does not specify how to allocate liability to

nonsettling parties in litigation between two private parties,

we must apply the UCFA proportionate share approach. 

Instead, we conclude that a district court has discretion under

§ 9613(f)(1) to determine the most equitable method of

accounting for settlements between private parties in a

contribution action. In reaching this conclusion, we concur

with the well-reasoned approach of the First Circuit. See

Capuano, 381 F.3d at 20–21 (concluding that § 9613(f)(1)

gives district courts discretion to determine “the most

equitable method of accounting for settling parties” in

private-party contribution actions).8 For the same reason, we

decline to follow the reasoning of the Seventh Circuit, which

held that CERCLA requires courts to use the UCATA pro

tanto approach in every case. See Akzo, 197 F.3d at 308. 

Akzo concluded that language in the statute providing that

8 The Tenth Circuit has also suggested that district courts have discretion

to determine which method of accounting to apply in private-party

contribution actions. See Tosco Corp. v. Koch Indus., Inc., 216 F.3d 886,

897 (10th Cir. 2000) (holding that the district court was not obligated to

reduce the nonsettling party’s liability by the settlement amount, and was

permitted to reduce the nonsettling party’s liability by the settling party’s

equitable share of the liability).

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contribution claims “shall be governed by Federal law,”

§ 9613(f)(1), “implies that the law should be nationally

uniform,” and required the uniform application of the

UCATA pro tanto approach, because it best matched “the

most closely related rule of law” in § 9613(f)(2). Id. at

307–08. We disagree with this reasoning. While the

statement that § 9613(f)(1) contribution claims “shall be

governed by Federal law,” clarifies that CERCLA requires us

to adopt a federal rule, rather than adopt the law of the forum

state, it does not raise the inference that Congress required

federal courts to adopt a single method of allocating liability

among nonsettling parties. Rather, the statutory language

raises the opposite inference, both by mandating the use of

UCATA for government settlements but not for private

settlements, and by directing the courts to “allocate response

costs among liable parties using such equitable factors as the

court determines are appropriate.” § 9613(f)(1)–(2).

C

TEO argues that even if the district court had discretion

to determine which approach to apply in allocating response

costs among liable parties, it abused its discretion here by

first ruling that the UCFA proportionate share approach

would determine the legal effect of the settlements, and then

refusing to assess the settling parties’ equitable share of fault.

Although courts have discretion to choose a method to

allocate liability to nonsettling defendants in private-party

contribution actions under CERCLA, they must exercise this

discretion in a manner consistent with § 9613(f)(1) and the

purposes of CERCLA. Choosing a method that would

discourage settlement or produce plainly inequitable results

could constitute an abuse of discretion. See § 9613(f)(1);

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Chubb Custom, 710 F.3d at 971; see also Capuano, 381 F.3d

at 21 (“[I]t is not unimaginable that the use of one of these

approaches might produce a result so inequitable that it would

constitute an abuse of discretion . . . .”). Because a district

court’s chosen method will likely affect parties’ decisions to

settle or contest a proposed settlement, once a district court

selects a method in a final order approving a settlement

agreement, failing to follow that approach may produce a

result that is inequitable and inconsistent with CERCLA’s

goals.

In this case, the district court first ruled that it was

adopting the UCFA proportionate share approach. This

ruling signified that, at trial, the court would identify the

equitable factors that it deemed appropriate, allocate costs

according to those factors among all potentially responsible

parties, including those that settled, and hold the non-settling

parties responsible only for their proportionate share of the

costs. See § 9613(f)(1); UCFA § 6. Given this ruling, TEO

had no need to contest the settlements or adduce evidence as

to their fairness or the appropriate factors that should be

applied in determining the settling parties’ equitable share of

response costs under § 9613(f)(1).

At trial, however, the district court declined to determine

the proportionate share of both the settling and nonsettling

parties, in contravention of the UCFA methodology. Instead,

the district court allocated to the settling parties only the

response costs set forth in the settlement agreements, ruling

that “the appropriate measure of the liability of the settling

defendants is measured by the amount of dollars that were

paid to Ameripride and that the defendants get a one-dollarfor-one-dollar credit for that.” This ruling effectively applied

the UCATA pro tanto approach.

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Due to TEO’s justifiable reliance on the court’s UCFA

ruling, TEO did not have a reasonable opportunity to present

evidence and argument regarding the fairness of such an

allocation. Nor did the district court explain how its approach

complied with § 9613(f)(1) and furthered the goals of

CERCLA.9 Because the court failed to explain its

methodology for complying with § 9613(f) and furthering the

goals of CERCLA, whether under the UCFA proportionate

share approach or the UCATA pro tanto approach, we cannot

determine whether it abused its discretion in allocating

response costs. See Traxler v. Multnomah Cnty., 596 F.3d

1007, 1015–16 (9th Cir. 2010) (explaining that “meaningful

appellate review for abuse of discretion is foreclosed when

the district court fails to articulate its reasoning” (internal

quotation marks omitted)). Accordingly, we remand to the

district court for further proceedings.10

IV

We next turn to TEO’s arguments that the district court

made legal errors in calculating the amount subject to

equitable apportionment. TEO claims the district court erred

by failing to determine whether AmeriPride’s settlements

with Huhtamaki and Cal-Am were solely for “response costs”

9 The court’s conclusory statement that the settlements represented “a

fair allocation of settlement proceeds and liabilities” is insufficient to

explain the equitable factors it considered and how it determined the

appropriate allocation of liability according to those factors. See Boeing,

207 F.3d at 1187.

10 In light of our remand for further proceedings, we do not address

TEO’s alternative argument that even if the district court properly applied

the UCATA pro tanto approach, it incorrectly credited the settlement

monies received by AmeriPride.

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that were incurred consistent with the NCP, and by setting the

date on which prejudgment interest begins accruing based on

equitable considerations, rather than the statutory

requirements in § 9607(a).

These arguments require us to consider the relationship

between the statute authorizing cost recovery, § 9607(a), and

the statute authorizing contribution actions, § 9613(f)(1). 

Under § 9607(a)(A)–(D), a potentially responsible party is

liable for specified costs incurred by a government, including

natural resource damages and certain health effects studies,

and for “necessary costs of response incurred by [a private

party] consistent with the national contingency plan.” 

Section 9607(a) further provides that “[t]he amounts

recoverable in an action under this section shall include

interest on the amounts recoverable” under § 9607(a)(A)–(D),

and “[s]uch interest shall accrue from the later of (i) the date

payment of a specified amount is demanded in writing, or

(ii) the date of the expenditure concerned.” § 9607(a).

To prevail in a private cost recovery action under

§ 9607(a), a plaintiff must establish, among other things, that

the release of a hazardous substance “caused the plaintiff to

incur response costs that were ‘necessary’ and ‘consistent

with the national contingency plan.’” Carson Harbor,

270 F.3d at 870–71. Therefore, a defendant liable in a private

cost recovery action under § 9607(a) would be liable for

response costs that meet such criteria.

A party liable under § 9607(a) may bring a contribution

action under § 9613(f)(1), which permits courts to allocate

“response costs” among liable parties. Such a plaintiff may

seek contribution “from any other person who is liable or

potentially liable” under § 9607(a). The liability of the

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defendant in the contribution action is therefore also defined

by § 9607(a).

Reading these sections together, when a private plaintiff

who incurred liability under § 9607(a)(B) for a third party’s

response costs seeks contribution under § 9613(f)(1) for such

costs, the only response costs recoverable from the defendant

in the contribution action are those that were necessary and

consistent with the NCP. Accordingly, if a party who was

liable under § 9607(a) entered into a settlement agreement to

discharge its CERCLA liability to a third party, it can seek

contribution under § 9613(f)(1) only for the settlement costs

that were for necessary response costs incurred consistent

with the NCP. See Atl. Research, 551 U.S. at 139 (clarifying

that a responsible party that pays money to satisfy a

settlement agreement or a court judgment does not incur its

own response costs, but reimburses other parties for response

costs that they incurred). This conclusion is consistent with

the Tenth Circuit’s reasoning. See Cnty. Line Inv. Co. v.

Tinney, 933 F.2d 1508, 1517 &n.13 (10th Cir. 1991) (holding

that “consistency with the NCP is an element of a CERCLA

contribution claim”).

Our interpretation is also consistent with the statutory

scheme as a whole. Nothing in the statute suggests that

liability incurred under other statutes or state tort law is

allocable in a contribution action under § 9613(f)(1); there is

“no suggestion in the statute that Congress intended

CERCLA to create a general federal right of contribution for

damages and response costs that are not otherwise cognizable

under the statute.” Cnty. Line, 933 F.2d at 1517. Indeed,

allowing a party to recover settlement money in a

contribution action under § 9613(f)(1) without first requiring

the party to prove that the settlement reimbursed the recipient

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for necessaryresponse costs incurred consistent with the NCP

could produce incongruous results. See id. at 1517 n.13. For

instance, AmeriPride could successfully defend a § 9607(a)

action brought by Huhtamaki or Cal-Am by proving that

Huhtamaki and Cal-Am’s response costs did not complywith

the NCP, settle with Huhtamaki and Cal-Am for liability

under state law, and then seek contribution under § 9613(f)(1)

against TEO for the settlement monies it paid. Accordingly,

the district court erred in failing to determine the extent to

which the amounts paid by AmeriPride to Cal-Am and

Huhtamaki were incurred consistent with the NCP.11

Our reading of § 9613(f) also resolves the question

whether the district court erred in setting the date on which

prejudgment interest began accruing based on equitable

considerations rather than the statutory requirements in

§ 9607(a). Because § 9613(f)(1) incorporates § 9607(a) to

the extent it delineates the nature of recoverable costs, and the

amounts recoverable under § 9607(a) include “interest on the

amounts recoverable,” such costs are also recoverable in a

contribution action under § 9613(f). Further, because the

accrual date for determining this element of response costs is

specified in § 9607(a), that accrual date is equally applicable

to a court allocating costs under § 9613(f)(1). Because

§ 9613(f) incorporates the liability provisions of § 9607(a),

the court is not free to exercise its discretion in determining

the methodology for calculating prejudgment interest. In

11 The district court’s mere observation that the gravamen of Huhtamaki

and Cal-Am’s claims was the contamination of the ground water does not

substitute for factual findings, based on evidence in the record,

establishing that AmeriPride’s settlements reimbursed Huhtamaki and

Cal-Am solely for necessary response costs incurred consistent with the

NCP.

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reaching this conclusion, we join the majority of other

circuits that have addressed this issue. See, e.g., Capuano,

381 F.3d at 28 (“Since the prejudgment interest provision of

§ 9607 refers to ‘actions under this section’ and because

§ 9613(f) incorporates the liability provisions of § 9607, an

action for contribution also incorporates the prejudgment

interest provision.”); see also United States v. Consol. Coal

Co., 345 F.3d 409, 415 (6th Cir. 2003); Goodrich Corp. v.

Town of Middlebury, 311 F.3d 154, 177 (2d Cir. 2002);

Bancamerica Commercial Corp. v. Mosher Steel of Kan.,

Inc., 100 F.3d 792, 800–01 (10th Cir. 1996). But see

Caldwell Trucking PRP v. Rexon Tech. Corp., 421 F.3d 234,

247 (3d Cir. 2005) (holding that § 9613(f)’s silence on the

issue of prejudgment interest “fairly leads to an interpretation

that, in contribution cases, such an award is discretionary”). 

Here, the district court erred in holding that prejudgment

interest began accruing on the date AmeriPride incurred the

relevant costs without determiningwhether that date was later

than the date on which AmeriPride demanded a specified

amount in writing from TEO. See § 9607(a).

On remand, the district court should determine what

portion of AmeriPride’s settlements with Huhtamaki and CalAm reimbursed them for necessary response costs they

incurred consistent with the NCP. The district court should

also apply the interest provisions in § 9607(a) to determine

when interest began to accrue.

V

We now turn to TEO’s final argument that the district

court erred when it assigned TEO’s causes of action against

its insurers to AmeriPride pursuant to section 708.510 of the

California Code of Civil Procedure.

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Rule 69(a)(1) of the Federal Rules of Civil Procedure

states in relevant part that “[a] money judgment is enforced

by a writ of execution,” and “[t]he procedure on execution . . .

must accord with the procedure of the state where the court

is located.” Here, the relevant state law is section 708.510 of

the California Code of Civil Procedure (section 708.510),

which provides that a “court may order the judgment debtor

to assign to the judgment creditor . . . all or part of a right to

payment due or to become due, whether or not the right is

conditioned on future developments.” The statute provides

a nonexclusive list of types of payments subject to

assignment, including “[w]ages due from the federal

government that are not subject to withholding under an

earnings withholding order,” “[r]ents,” “[c]ommissions,”

“[r]oyalties,” “[p]ayments due from a patent or copyright,”

and an “[i]nsurance policy loan value.” Cal. Civ. Proc. Code

§ 708.510(a).

We conclude that the district court erred in assigning

TEO’s causes of action against its insurers to AmeriPride

pursuant to section 708.510. Section 708.510 permits

assignment of “a right to payment due or to become due,” and

lists “types of payments” that are subject to assignment. In

California, “[a] cause of action for damages is itself personal

property,” rather than a type of payment. See Schauer v.

Mandarin Gems of Cal., Inc., 23 Cal. Rptr. 3d 233, 238 (Ct.

App. 2005). A court therefore may assign only the right to

payment due from a cause of action under section 708.510,

and may not assign the cause of action directly. While causes

of action of a non-personal nature may be generally

assignable under California law, as AmeriPride argues,

section 708.510 does not apply to all voluntarily assignable

property rights, but only to “all or part of a right to payment

due.” Cal. Civ. Proc. Code § 708.510. Accordingly, the

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district court erred when it assigned TEO’s causes of action

against its insurers to AmeriPride.

VI

In sum, we vacate the district court’s judgment and

remand to the district court with instructions to (1) explain

which equitable factors it considered in allocating $3.25

million in costs to the settling parties, or select those factors

and allocate costs in accordance with those factors in the first

instance; (2) determine the extent to which AmeriPride

reimbursed Huhtamaki and Cal-Am for necessary response

costs incurred consistent with the NCP; and (3) apply the

interest provisions in § 9607(a) to determine when interest

began to accrue on the costs paid by AmeriPride.

VACATED AND REMANDED.

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