2013 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

6-5-2013

US VI Dept of Planning and Nat v. St. Croix

Renaissance Group

Precedential or Non-Precedential: Non-Precedential

Docket No. 11-2265

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NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 11-2265

_____________

UNITED STATES VIRGIN ISLANDS DEPARTMENT OF

PLANNING AND NATURAL RESOURCES,

 Appellant

v.

ST. CROIX RENAISSANCE GROUP*, L.L.L.P.; CENTURY ALUMINA COMPANY; 

VIRGIN ISLANDS ALUMINA COMPANY; LOCKHEED MARTIN CORPORATION; 

ST. CROIX ALUMINA L.L.C*.; ALCOA WORLD ALUMINA, LLC*; 

HOVENSA LLC; HOVIC HOVENSA LLC; VI PORT AUTHORITY; 

VI WASTE MANAGEMENT AUTHORITY

(*Dismissed in USCA per Clerk’s order of 4/9/12)

_____________

On Appeal from the District Court of the Virgin Islands

(D.C. No. 07-cv-0114)

District Judge: Hon. Harvey Bartle, III

_____________

Submitted Under Third Circuit LAR 34.1(a)

April 23, 2013

BEFORE: McKEE, Chief Judge, SCIRICA and VANASKIE, Circuit Judges.

(Filed: June 5, 2013)

_____________

OPINION

_____________

McKEE, Chief Judge.
2

United States Virgin Islands Department of Planning and Natural Resources 

(“DPNR”) appeals the District Court’s grant of summary judgment to defendants in 

DPNR’s suit under the Comprehensive Environmental Response, Compensation, and 

Liability Act (“CERCLA”), 42 U.S.C. §§ 9601-9675. For the reasons that follow, we 

will vacate the District Court’s order and remand for further proceedings.1

I.

As we write only for the parties who are familiar with this case, we will recite only 

the facts and procedural history relevant to our conclusion.

To prove its claim for response costs under CERCLA, DPNR must establish the 

following four elements: (1) the alumina refinery at issue is a facility within the meaning 

of CERCLA; (2) there has been a release or threatened release of a hazardous substance 

from the facility; (3) the release or threatened release has required DPNR to incur 

response costs; and (4) the defendant is a potentially responsible party under CERCLA. 

See 42 U.S.C. § 9607(a); see also United States v. Alcan Aluminum, 964 F.2d 252, 258-

59 (3d Cir. 1992). For the purposes of summary judgment, the only disputed issue is

whether DPNR has incurred response costs. 

CERCLA provides that any responsible party “shall be liable for all costs of 

removal or remedial action incurred by the United States Government or a State or Indian 

Tribe not inconsistent with the national contingency plan.” 42 U.S.C. § 9607(a)(4)(A) 

 

1

 The District Court had jurisdiction under 28 U.S.C. § 1331 and 42 U.S.C. § 

9613(b). We have appellate jurisdiction under 28 U.S.C. § 1291. We exercise plenary 

review over a district court’s summary judgment ruling. Nat’l Sec. Sys., Inc. v. Iola, 700 

F.3d 65, 81 (3d Cir. 2012).
3

(emphasis added). DPNR submits that it has incurred three items of recoverable 

response costs: (1) $4,790.36 paid directly by DPNR to S.S. Papadopulos & Associates 

on September 20, 2010 for water sampling and laboratory fees of water samples collected 

from the alumina refinery property; (2) salaries of employees who purportedly devoted 

over 4,000 hours responding to contamination on the property; and (3) $61,519.67 

advanced by counsel for sampling, laboratory analysis, and site visits. The District Court 

granted summary judgment to defendants after concluding that none of these items 

qualified as “incurred response costs” recoverable under CERCLA. 

We agree that the first item cannot serve as the basis for an action under CERCLA 

because it was not incurred before a lawsuit was initiated. See 42 U.S.C. § 9613(g)(2) 

(providing that an action may be commenced “for recovery of costs at any time after such 

costs have been incurred”) (emphasis added). We also agree that the second item is not a 

qualified response cost because, as DPNR itself concedes, DPNR did not maintain 

adequate records of those expenses. See 40 C.F.R. § 300.160(a)(1) (requiring an 

“accurate accounting” of costs for recovery under CERCLA). However, the District 

Court erred in concluding that the third item does not qualify as a recoverable response 

cost under CERCLA as a matter of law. 

II.

The District Court concluded that the $61,519.67 advanced by counsel for 

sampling, laboratory analyses, and site visits (at least some of which were incurred prior 

to the start of the litigation) does not qualify as an incurred response cost because, under 

the Professional Services Contract (“PSC”) between DPNR and its counsel, DPNR has 
4

no legal obligation to reimburse those expenses. However, there is at least a genuine 

issue as to the proper interpretation of DPNR’s obligation under the PSC. Drawing 

reasonable inferences in the light most favorable to DPNR, a reasonable jury could 

conclude that DPNR was obligated to reimburse the advanced costs.

Under the PSC, attorneys’ fees are entirely contingent on recovery in the litigation. 

However, DPNR is obligated to reimburse costs and expenses even if no recovery is 

obtained. The PSC provides: 

[T]he Government agrees to pay any expenses advanced by [counsel] . . ., 

even though it may recover nothing, within sixty (60) days of . . . 

terminati[on of] the litigation subject to the availability and appropriation of 

funds. Costs remaining unreimbursed after such period shall bear interest 

at the legal rate of interest then effective in the Territory.

A422 (PSC at 4) (emphasis added). The District Court interpreted this language to mean 

that DPNR is not obligated to reimburse costs unless and until an appropriation has been 

made by the Virgin Islands legislature, but the legislature was under no obligation to 

appropriate funds and had not done so. 

However, DPNR argues that the clause “subject to the availability and 

appropriation of funds” appears immediately after and modifies only DPNR’s 60-day 

obligation. “The doctrine of last antecedent teaches that qualifying words, phrases, and 

clauses are to be applied to the words or phrase immediately preceding and not to others 

more remote.” United States v. Hodge, 321 F.3d 429, 436 (3d Cir. 2003) (internal 

quotation marks omitted). The District Court’s interpretation, however, would read the 

“subject to the availability and appropriation of funds” clause to modify the more 
5

remotely stated governmental obligation to pay. While this interpretive doctrine may be 

overcome by other indicia of meaning, defendants have not yet identified any such 

indicia. A reasonable jury could certainly conclude that, under the terms of the PSR, 

DPNR was obligated to reimburse the advanced costs, irrespective of whether funds have 

been appropriated.2

The District Court’s conclusion that DPNR had not incurred response costs led 

directly to the court’s denial of DPNR’s claim for a declaratory judgment of defendants’ 

liability to pay future response costs. However, because we now hold that a jury may 

conclude that DPNR has incurred response costs, we need not reach the question of 

whether the absence of incurred response costs precludes a plaintiff from obtaining a 

declaratory judgment as to liability for future response costs.

II. 

For the reasons set forth above, we will vacate the order of the District Court 

granting defendants’ motion for summary judgment and remand for further proceedings. 

 

2

 The District Court cites to Trimble v. Asarco, 232 F.3d 946 (8th Cir. 2000), as 

support for its conclusion, but that case is clearly distinguishable. Under the terms of the 

contract in Trimble, there was no question that the obligation to pay costs was contingent 

upon success of the lawsuit.