The Ho norab le E dward R . Korm an, United State s D istrict C ourt fo r the Eastern D istrict of * NewY ork , s itting by

des ig nation. 05
- 27 98
- cv W
. R
. G r ace & Co
. – C onn. v. Zot os I nt er nat i onal , I nc.



### UN ITED STA TES C OUR T OF AP PE ALS F OR TH E S EC ON D C IR C U IT

____ ____ ____ ____ ____ _ August Term, 2005 (Argued: J anuar

y 27, 2006 Dec ided: Marc h 4, 2009)

Docke t No. 05-2798-c v

_____________________ W.R . GRACE & CO. – CONN ., Plain tif f- Ap pe lla nt,
– v. – Z OTOS I NTERNATI ONAL , I

NC., Defendant-

Appellee

.

_______________________ BEF ORE: RAGGIand HAL L , Circuit Judges , and KORMAN, District Judge
. *

_______________________ Owner W.R . Gra ce & Co. broug ht suit under the Comprehensive Environmental Re sp on se , Co mpe ns atio n, and L ia bil ity Ac t ( CER CLA) a g a ins t D e fe nd ant Z oto s Inte rn atio na l, Inc. for costs incurre d in connec tion with Grace ’s investig ation and re mediation of contamination at the B rew er Road site. The United States District Court for the Wester n District of Ne w York (Skretny , J

.) he ld G ra c e wa s n ot e nti tle d to c ontr ibutio n und e r C ERC LA a nd g ra nte d ju dg me nt i n favor of Z otos. Grac e appe aled. Af firmed in par

t, reve rsed in par

t, and re manded.2 ________________________ KEVI N M. HOGA

N, Philli ps Ly

tle L L P, Buff

alo, New York, for Plain tiffAppellant
. THOMAS R. SMI TH, (Rober t R. Ty son, L illian Abbott P fohl, on the brief ) B ond, Schoenec k & K ing, PL L C, Sy rac use, Ne w York, for Defendant-Appe llee
. R o b e rtE m m e tH e r

n an , M i c h e l l e A r o n o w i t z , E u g e n e J. L e f f , an d G o r d o nJ. J ohnson, for Eliot Spitz er, A ttorney Gene ral for

the State of Ne w York, N ew York, Ne w York, submitted a br ief for Amicus Curiae the State of Ne w Y or k, in support of Plaintif

f-Appellant
. Ke vin A. Szanyi, N e lso n Pe re l, A . T imo thy Web ste r, Web ste r S zanyi L L P, B uf fa lo, Ne w Y or

k; Je ff re y N. Ma rt in, Er ic J. Mur do c k, Hunto n & Willi ams L L P, Washington, D.C., submitted a brief for Amici Curiae Allied Waste Sy stems, I nc. and B rowning -F err is I ndustries of Ne w York, I nc., in support of De

fe nd an tAppellee
.

________________________ HAL L , Circuit Judge : Pla int if f W. R. G ra c e & Co. -C onn. (“ Gr a c e ” ) s e e ks to r e c ov e r n e c e ssa ry re sp on se c os ts under the Comprehensive Envir onmental Response, Compensation, and L iability Act of 1980 (“CERCL A”) for c osts Grac e incur red in c leaningup a ce rtain contaminated site in New Y ork. The District Court (Skre tny , J .) conc luded Gra ce, which is itself a re sponsible party , is not entitled to rec overy

under CERCL A bec ause G rac e had not pr eviously been a party to a CERCL A civil action, and e ntere d judgme nt in favor of defe ndant Z otos I nternational, Inc. (“Z otos”). W

.R. Grace&Co.–Conn. v. Zotos Int'l, Inc. , No. 98-CV-838S(F ), 2005 WL1076117,
at *1 2 ( W.D .N .Y . M ay

3, 20 05 ). Gr a c e a sse rt s it is e nti tle d to se e k a

n e qu ita ble sh are of

its
re sp on se c os ts f

ro m Z oto s und e r s e c tio n 1 07 (a ) o f C ERC LA. 42 U. S.C. § 9 60 7( a ). Whil e thi s Court was consider ing the appea l, the Supreme Court dec ided United States v. Atlantic Rese archB e c a us e Gr a c e do e s n ot s e e k r e sp on se c os ts i nc ur re d p ur su ant t o th e 19 84 or de r, on ly 1 the re sp on se c os ts i nc ur

re d p ur su ant t o th e 19 88 c on se nt o rd e r a re the su bje c t of the laws uit
. 3 Corp. , 1 27 S. Ct . 2 33 1 ( 20 07 ), wh ic h h old s th at CE RCLA p ro vid e s a po te nti a lly

re sp on sib le party (“PRP”) who ha s incurre d costs of re sponse in clea ning a contaminated site w ith a cause of
a c tio n to re c ov e r t

ho se c os ts f

ro m ot he r P RPs. We c on c lud e that G ra c e ha s in c ur re d r e sp on se costs within the meaningof sec tion 107(a) a nd rema nd to the district court for further proce eding s. I. Bac kgr ound In 1 97 8, Gr a c e a c qu ir e d a fa c ili ty kn own a s th e B re we r R oa d Si te (t he “ Site ” ) whe n it purcha sed the a ssets of a c hemical manuf actur er, Eva

ns Chemetics, Inc. (“ ECI ”). ECI had used the Site as a landf

ill for wastes f

rom a Waterloo, Ne w York, ma nufac turingfac ility

(the “Waterloo Plant”) f

rom 1950 throug h 1959. ECImanufa cture d org anic c ompounds at the Wat e rl oo Plant, and

it f or mul ate d a nd pa c ka g e d h a ir

c are pr od uc ts at th e Wat e rl oo Plant f or sa le to Z otos and other c ustomers. Gra ce a lleg es that Z otos arra ng ed for the disposal of ce rtain of th o s e w a s t e s atth e S i t e . G r a c e c o n t i nu e s t o o w nth e S i t e t o d ay. In 1983, the New

York State De partment of E nvironmental Conservation (“DEC”)
c on du c te d a

Pha se Ipr e lim ina

ry inv e sti g atio n o f t

he Site , a nd in 1 98 4 G ra c e e nte re d into i ts f ir st administrative orde r on conse nt to perfor m a Phase I Iinvestigation at the Site. After DE C placed the Site on the New Y ork Reg istry of Inactive H azardous Waste Disposal Sites, Grac e cooper atively

enter ed into a sec ond administrative orde r on conse nt with DEC in 1988 (the “Consent Orde r”)
. Pursuant to that Consent Order, G rac e agree d to reimburse D EC 1
a pp ro ximate ly

$2 0, 00 0 f

or re sp on se c os ts ( inc lud ingdir e c t la bo r, ana ly tic a l, a nd c ontr a c tor

c os ts)4

incurre d investigating the e nvironmental conditions. Gra ce a lso ag ree d to perfor m a re medial investigation and fea sibili ty study (“RI /FS”), a nd to remediate the landf

ill. The Consent Order provided spec ifically

that there had bee n no admission of g uilt or finding of liability . Upon the
su c c e ssf ul c omp le tio n o f t

he re me dy , D EC e xpre ssl y a gre e d to re le a se Gr a c e fr om a ll c la ims
ari sin gun de r t

he Ne w Y or

k E nv ir onme nta l Co ns e rv atio n L aw ( “ ECL ” ) r e lativ e to t he land fi ll. The Consent Orde r stated that Gr ace “voluntarily consents to the issuing a

nd enter ing of this Order, a

nd without admitti ngany fac ts or the applica

bility of any law, wa ives its right to a hear ing he rein a s provided by law, and c onsents to be bound by the provisions, terms and
c on dit ion s o f t

his Or de r. ” Th e Con se nt O rd e r p ro vid e d th at at th e c on c lus ion of the pr ogra

m, i f DEC acknow ledg ed that implementation was c omplete, such ac knowledg ment [ s i c] s hall constitute a full and c omplete satisfac tion and re le a se of e a c h a nd e ve ry c la im, de mand , r e medy or act ion wh atso e ve r a g a ins t [Grace ], i t s o ff

i ce rs and dire ctors, which [DEC] has or may have a s of the date of such ac knowledg ment [si c] pursuant to Article 27, Title 13, of the ECLrelative to or arisingfrom the disposal of ha zardous or industrial waste at the Site. The Consent Orde r also provide d that Gra ce w ould reimburse D EC $20,967.64 for costs incur red in investigating the c onditions at the Si te and in pre paringthe Consent Orde r, as we ll as other
sums concer

ning the costs of implementation of the f easibility study and re medial desig n. The Consent Order

set out that the “fa ilure of [Grac e] to comply with any provision of this Order shall constitute a def

ault and a f

ailure to pe rfor

m an obligation under this Order and under

the ECL ,” and that “[n] othing he rein shall be c onstrued to bind any entity not specifica lly

bound by the terms of this Orde r.” Pursua nt to the Consent Order, G rac e re mediated the Site in 1993 and has there afte r maintained the Site. Throug h April 2004, Gra ce ha d expended appr ox imately $1.7 milli on on reme dial activities at the Site.5

Gra ce c ommenced the instant action in Dec ember 1998, seekingcontribution from Z otos purs ua nt t o CE RCLA s e c tio n 1 13 (f ), 42 U. S.C. § 9 61 3( f) , a

nd Ne w Y or k la w f or the c os ts incurre d in connec tion with the investigation and r emediation of c ontamination at the Site. Followinga benc h trial, the District Court rende red a final dec ision and order

dated Ma y 3, 2005, in which it concluded that Grac e is not entitled to reimbursement pur suant to CERC LA sec tion 11 3( f) be c a

us e it w a s n e ith e r a

pa rt y to a c ivi l su it n or

a pa rt y to a se ttl e me nt. Th e c ourt

a lso denied Gr ace ’s claims under state law. Gra ce ur g es on appe al that it should have bee n entitled to seek c ontribution under § 113(f) (3)( B) due to its Consent Order w ith DEC. I n the alter native, Gr ace argues that it was entitled to rec over a

portion of its costs pursuant to § 107(a) (4)( B)
.

II. Discussion B e c a us e thi s c a se tur

ns on the int e rp re ta

tio n o f a fe de ra l st atut e , o ur

re vie w i s de novo
. Commander Oil Corp. v. Barlo Equip. Corp. , 2 1 5 F
. 3 d 3 2 1 , 3 2 6 ( 2 d

Ci r . 2 0 0 0 )
. We r e c o g n iz e that w ithre sp e c t to thi s r e vie w, our o bli g atio n is to l oo k to the pla in l angua g e of the statut e to eff ectuate the intent of Congress. See Natural Res. De f. Counsel v. Abraham , 355 F.3d 179, 198- 99 (2d Cir. 2004) (“ In interpre ting the pla in languag e of the statute, we must look to the particula r statutory

languag e at issue, a s well as the languag e and de sign of the statute as a

whole,
and , whe re a

pp ro pr iate , it s le g isl ativ e his tor y .” (i nte rn a l qu otatio n ma rk s o mitte d) ); se e als o D ole v. United Stee lworkers of Am. , 4 94 U. S. 2 6, 35 (1 99 0) (n oti ngtha t, whe n in qu ir ingint o cong ressional intent throug h means of tr aditional statutory construction, cour

ts “look to the provisions of the whole law , and to its object and policy” (inter nal quotation marks omitted)).6

A. CE RC LA CER CLA i s a

c omp re he ns ive fe de ra l la w g ov e rn ingthe re me diatio n o f h a zar do us wa ste sites. Unfortunate ly , CERCL A, which wa s hastily enac ted on the eve of the lame -duck se ssion of the 96th Cong ressional ter m, is known neither for

its concinnity

nor its brevity
. See, e .g. , Exx on Corp. v. Hunt , 475 U.S. 355, 363 (1986) (notingCERCL A provisions are “not . . . mod e l[s] of

le g isl ativ e dr a ft sma

ns hip ,” and

its statut or

y langua g e is “ at be st i na

rt fu l and at w or st redunda nt”); Ar te

sia n W ate r Co . v . Ne w Ca stle Cou nty , 851 F.2d 643, 648 ( 3d Cir. 1988) (“CERCL A is not a para digm of clar ity or pre cision. I t has bee n criticized fre quently for inar tful draf ting a nd numerous ambiguities attributable to its precipitous passag e.”) . Nonethele ss, it has now bee n over twe nty -five year s since CERCL A’s ena ctment, and a lthough many of the provisions remain per

plexi ng , the statute’s primar y purposes a

re ax iomatic: (1) to enc ourag e the

“ tim e ly c le anu p o f h a zar do us wa ste sit e s;” and (2 ) t o “ pla c [e] th e c os t of tha t [c le anu p] on tho se responsible for

cre atingor maintainingthe hazardous c ondition.” Consol. Edison v. UGI Utils., Inc. , 423 F.3d 90, 94 ( 2d Cir. 2005) (sec ond alteration in original) ( internal quotation marks omi tte d) ; see also Key

Tronic Corp. v. United States , 5 1 1 U
. S
. 8 0 9 , 8 1 9 n . 1 3 ( 1 9 9 4 ) ( “ ‘ C E R C LA is designe d to encour ag e private par ties to assume the financ ial responsibility of cle anup by al l o wi n g th em t o s ee k

re co v ery fr o mo th er s . ’” (qu o t i n g FMC Corp. v. Aero Indus., I nc., 998 F.2d 84 2, 84 7 ( 10 th C ir . 1 99 3) )) . T hu s, on re vie w, thi s Co ur

t mu st “ c on str

ue the statut e lib e ra lly

in order to effe ct these c ong ressional c oncer ns.” Schiavonev. Pe arce , 79 F.3d 248, 253 ( 2d Cir. 1996). In order

to achieve these dua l purposes, the statute c reates sever al distinct provisions that authorize parties in diff

ere nt proce dural positions to recove r costs incurr ed in clea ning up“We assume without dec iding that § 107( a) pr ovides for joint and seve ral liability .” At l. 2 Researc h Corp. , 127 S. Ct . at 2339 n.7. 7 contamination: “(1) section 107(a ), which pe rmits the ge nera l rec overy of cle anup and pr evention
c os ts; (2 ) s e c tio n 1 13 (f

)( 1) , whic h c re ate s a

c ontr ibutio n r ig ht f

or pa rt ie s li a ble or po te nti a lly 2 liable under

CERCL A; and (3) section 113(f )(3) (B ), which c reates a c ontribution right for parties that have r esolved their liability by settlement.” Consol. Edison , 4 23 F .3 d at 94 . Wh ile c ourt s have pr eviously

strug g led with interpre ting whic h of these subse ctions provides a c ause of action for pa rties in differ ing pr ocedur al and f actua l circumstanc es, two Supreme Court de cisions have shed lig ht on these two sec tions of CERC LA. See A tl. Research Corp. , 127 S. Ct . 2331 (holding CERCL A sec tion 107(a) pr ovides potentially responsible pa

rties with cause of ac tion to recove r
ne c e ssa ry c os ts o f r e sp on se fr om o the r P RPs) ; Cooper Indus., Inc . v. Av iall Servs., Inc. , 5 43 U. S. 15 7 ( 20 04 ) ( ho ldi ngpr ivate pa rt ie s w ho have no t be e n s ue d in a CER CLA a dmi nis tr ativ e or c os t
rec overy action may

not bringa contr ibution sui t under sec tion 113). In Cooper Industries , the Supreme Court he ld that a par ty may pursue a contribution
c la im und e r s e c tio n 1 13 (f )( 1) on ly if tha t pa rt y ha s b e e n s ub

je c t to a c ivi l a c tio n a s sp e c if

ie d in that section, id . at 583, a limitation mostcourts had not pr eviously imposed, see, e .g. , Be dfo rd Af fil iates v . S

ill s , 156 F.3d 416, 423- 24 (2d Cir. 1998) (a ssuming that a liable party that was not the subject of a

civil action could bringa contr ibution claim under sec tion 113(f)(1) ). B efor e Cooper Industries , most courts, including our s, held that in connec tion with application for reimburse ment from other potentially

liable par ties, only section 113(f

) provided a

cause of action to par

ties who would be liable, a nd section 107(a ) wa s rese rved f or innoce nt parties. See, e.g., Be dford Affil iates , 1 56 F .3 d at 42 3; see also Me tro. W ater Rec lamation Dist. of Greater8

Chicago v. N. Am. Galvanizing &Coatings, Inc. , 473 F.3d 824, 828 & n.4 (7th Cir. 2007). Bedford Affiliat es he ld t

hat th e pla int if

f “ c ou ld n ot p ur su e a

§ 1 07 (a ) c os t r e c ov e ry

c la im a g a ins t [t he def endants] due to its status as a potentially responsible pe rson.” 156 F .3d at 423-24. Fo l l o wi n g Cooper Industries , th is C ourt ind ic ate d th at Bedford Affiliat es may no longe r be g ood law bec ause the assumption that a potentially liable par ty seekingreimburse ment had a c ause of
a c tio n und e r s e c tio n 1 13 (f )( 1) , e ve n if

the pa rt y ha d n ot b e e n s ub

je c t to a pr ior CER CLA s uit , w a s i n v a l i d at e d

b y Cooper Industries
. Consol. Edison , 423 F.3d at 101 n.12. Consolidat ed Edison the re by

su g g e ste d th at Coo

pe r I nd us tri es had implicitly

overr uled Bedford Affiliat es . Howeve r, it did not reac h the ultimate decision of whe ther Bedford Affiliat es had bee n overr uled beca use the Court conc luded that fa ctual discre pancie s distinguished the c ase be fore it from Bedford Affiliat es such that it did not need to consider direc tly the issue. Consol. Edison , 423 F.3d at 100-02. Subsequent to our dec ision in Consolidat ed Edison , the Supreme Court in At lan tic Researc h held that “the pla in terms of § 107(a )(4) (B ) allow a PRP to rec over c osts from other PRP s.” 127 S. Ct. at 2339. I n light of Atlantic Research , w e no w c on fi rm tha t Be dfo rd Affili ates ’s holding limiting r ecove ries by PRP s to actions broug ht under sec tion 113(f) is no longe r valid. See Ne w Y

ork v. Nat’l Serv . Indus., Inc

. , 4 60 F .3 d 2 01 , 2 07 (2 d Ci r. 20 06 ); Ba nk Bo sto n, N.A . v . S

ok olo wsk i ( In re Sok olowski ), 20 5 F .3 d 5 32 , 5 34 -3 5 ( 2d Cir . 2 00 0) (T his Court is “bound by

a dec ision of a prior pa

nel unless and until its rationale is overr uled, imp lic itl y or e xpre ssl y , b y

the Sup re me Court

or thi s c ourt en banc ” (quotation marks and citation omitted)).Init ia lly , G ra c e a sse rt e d it s c a us e of a c tio n und e r s e c tio n 1 13 (f ) g e ne ra lly , a

nd a lso 3 specific ally

ref err ed to sec tion 113(f)(1)
. Grace , 2005 WL1076117, at *3 n.6. Cooper Industries was de cided while the case was pe nding de cision after trial, and Gr ace and Z otos were g rante d leave to brief the sig nificanc e of that case to the District Court. Grac e ra ised its section 113(f) (3)( B) claim at that stag e, which w as addr essed a nd denied by

the District Court. Id . at *3. The district cour

t’s decision in this case w as re ndere d prior to our holdingin Consolidat ed Edison , and neither

the par ties nor the cour

t discussed whethe r Gra ce ha d a viable c ause of action under se ction 107(a)
. 9 That a PRP may

asser t a claim under

section 107 as pr ovided in Atlantic Research , howeve r, does not put an e nd to the question of whethe r a pa rty such as Gr ace may

maintain a
cause of ac tion for re cover y of re sponse costs. As the Court stated in Atlantic Research , “§ 107(a) permits a PRP t o rec over only costs it has ‘incurr ed’ in c leaningup a site.” 127 S. Ct. at 2338 (citing42 U.S.C. § 9607(a)(4) (B )). Ac cording ly , the question befor e us is whether a potentially

responsible pa

rty who has re mediated a

contaminated site pur suant to an administrative conse nt order ha s a ca use of a ction to pursue nec essar y associate d costs under
se c tio n 1 07 . We c on c lud e that it do e s. B. Se c ti on 1 13 (f) (3 )( B) On appe al, Gra ce f

irst asserts that it should be able to bringa ca use of a ction for contribution under se ction 113(f) (3)( B) . In the alter native, Gr ace asser

ts it has a cause of ac tion under se ction 107(a) . We will first consider Gra ce’ s arguments with respec t to section 113(f) (3)( B)
. 3 Gra ce a cknowledg es that, af ter Cooper Industries , it may not bringa ca

use of a ction
a g a ins t Z oto s und e r s e c tio n 1 13 (f )( 1) be c a us e Gr a c e ha s n ot a lr e a dy be e n s ub je c t to a c ivi l su it under e ither sec tion 106 or 107. Grac e asse rts that since its Consent Order with the DEC10

qualifies as a

n administrative settlement under section 113(f

)(3) (B ), it should be able to pursue a
cause of ac tion ag ainst Z otos pursuant to this section. Under the principles e nunciated in Consolidat ed Edison , we c onclude Gr ace may not seek contribution under se ction 113(f) (3)( B) . 423 F.3d at 95-96. Consolidat ed Edison made c lear that “ on ly wh e n li a bil ity fo r C ERC LA c la ims , r athe r t ha n s ome br oa de r c ate g or

y of le g a l c la ims , is resolved” does sec tion 113(f)(3) (b) c reate a r ight to contr ibution . Id . at 95. Acc ording ly , the

“ op e rativ e qu e sti on

in d e c idi ngwh e the r [G ra c e ’s ] cl a ims ari se un de r s e c tio n 1 13 (f )( 3) (B ) .
. . is whether [Grace ] resolved its CER CL A liability befor e bring ing suit.” Id. at 96 . We c on c lud e it has not. Th e 19 88 Or de r o n Co ns e nt p ro vid e s: I f the [DEC] ackno wl ed ges that the implementation is complete . . . suc h acknow ledg ment shall constitute a full and c omplete satisfac tion and rele ase of eac h and eve ry claim, demand, r emedy

or action whatsoeve r ag ainst [Grace ], i ts office rs and dire ctors, which the [DEC] has or may have a s of the date of such a c kn ow le dg me nt pu rsu an t to Ar tic le27 , Ti tle13 , o

f th e ECL relative to or arising from the disposal of ha zardous or industrial waste at the Site. (empha sis added). The Consent Order further states: “Nothingcontained in this Orde r shall be construed a s barr ing, diminishing, a djudicatingor in any way aff ecting. . . (3) the [DEC’s] right to bringany

action, at law

or in equity

ag ainst [Grace ] . . . wit h respe ct to are as or r esourc es that may have be en dama g ed as a

result of the r elea se or mig ration of ha zardous or industrial wastes from the Site.” This text, which makes no re fer ence to CERC LA, establishes that the D EC settled only

its state law claims ag ainst Grac e, leaving ope n the possibilit y that the DEC or the EPA could, at some future point, assert CERCL A or other claims. In the same w ay that the voluntary consent a g ree ment in Consolidat ed Edison did not resolve Consolidated Edison’s liability under CERCL A, neither

did this C onsent Orde r re solve Gra ce’ s liabilit y underAtlantic Research , 1 27 S. Ct . 2 33 1, wa s is su e d a ft e r o ra l arg ume nt h a d b e e n h e ard

in 4 thi s c a se and

wh ile the matte r w a s p e nd ingwi th t his Court . G ra c e and

Z oto s w e re g ive n le ave to file supplemental br iefingon the ef fec t of Atlantic Research on this case.

11 CERCL A. See City of W aukesha v . Viacom Int’ l Inc. , 404 F. Supp. 2d 1112 (E.D. Wis. 2005) (c i t i n g Consolidat ed Edison and the district cour t’s decision in that ca se, and holdingthat the cost share pilot progr am contra ct the City enter ed with State’s De partment of N atura l Resource s
w a s n o tana dm i n i s tr at i v e o r j u d i c i a l l y a p p r o v e d s e t t l e m e n tth atr e s o l v e d

th e C i ty ’ s C E R C LA liability). The Consent Orde r at issue he re did not re solve CERCL A claims that could be broug ht by the fe dera l gove rnment. As the district cour t corre ctly

observe d, “[w]here a state proce eds on its own authority

to identify

a re medy and settle with a PRP, there is a r isk the EPA will take later a ctions or selec t differ ent re medies that could e x pose the PRP to additi onal liabilities.” Grace , 2005 WL1076117 at *5. We conclude that the Consent Orde r with the DEC wa s not an administrative settlement cognizable under sec tion 113(f)(3) (B ), and w e af firm the District Court’s decision that Gra ce ma y not bringan ac tion for contribution ag ainst Z otos under that section. C. Se c ti on 1 07 (a )( 4) (B ) Ac kn ow le dg ingthat Atlantic Research holds that a potentially responsible pa

rty may
asser t a claim under

section 107(a )(4) (B ) to rec over inc urre d clea nup costs, Z otos maintains that Gr a c e may

no t pu rs ue a c la im f or c os t r e c ov e ry

be c a us e Gr a c e ha s n ot i nc ur

re d r e sp on se c os ts within the meaningof sec tion 107(a). Specifica lly , Z otos contends that bec ause G rac e “w as 4
c omp e lle d to inc ur

c os ts p ur su ant t o a

n a dmi nis tr ativ e or de r, ” it h a s n ot i nc ur re d r e sp on se c os ts within the meaningof sec tion 107(a), a nd there fore has no ca

use of a ction ag ainst Z otos. ToA “ re mov a l a c tio n” re fe rs g e ne ra lly to t e mpo ra

ry a c tio ns take n to a dd

re ss i mme diate 5 threats to the environment. 42 U.S.C. § 9601(23). The c lean- up action take n here was re medial in nature. 12 support its claim that Grac e’s c leanup c osts were not incurre d costs within the meaningof the statut e , Z oto s c ite s Consolidat ed Edison , 4 23 F .3 d 9 0, 10 1- 02 . Z oto s’ s r atio na le , h ow e ve r, is misguided. We hold that Gra ce ma y pursue ne cessa

ry response costs pursuant to sec tion 107(a) even though its ex penditures we re ma de in compliance with a conse nt order. Gene rally , response costs are liberally construed unde r CERCL A, se e, e .g., Am oc o O il Co. v. Borden Inc

. , 8 89 F .2 d 6 64 (5 th C ir . 1 98 9) (“ Re sp on se c os ts a re g e ne ra lly

and sp e c if ic a lly define d to include a va

riety of ac tions designe d to protect the public he alth or the e nvironment. To jus tif ia bly inc ur re sp on se c os ts, on e ne c e ssa ri ly mus t ha ve a c te d to c onta in a

re le a se thr e ate nin gthe pu

bli c he a lthor

the e nv ir onme nt. ” ). Th is l ibe ra l c on str uc tio n is in c on fo rm ity with the plain languag e of the statute. As def ined by CERCL A, the ter

ms “respond” or “re sponse” mea

n “re move, re moval, reme dy , and re medial ac tion; all such terms (includingthe te rm s ‘ re mov a l’ a

nd ‘r e me dia l a c tio n’ ) i nc lud e e nf or c e me nt a c tiv iti e s r e late d th e re to. ” 42 U. S.C. § 9 60 1( 25 ). A “ re me dia l a c tio n” is d e fi ne d in se c tio n 1 01 (2 4) a s “ tho se a c tio ns c on sis te nt w ith perma nent re medy ,” g ener ally

ref err ing to the f

inal reme dy

selec ted to addre ss the contamination at the hazar dous waste site. 42 U.S.C. § 9601(24). Under the statute, there fore , Gra ce 5 undertook re medial ac tion as that term is defined in se ction 101(24), 42 U.S.C. § 9601(24), a nd thus perfor

med a “ response ” ac tion as that term is defined in se ction 101(25), 42 U.S.C. §The plain languag e of se ction 107(a) allows any person to see k rec overy

for “ nece ssary 6 costs of re sponse” in re moval or re mediation action. 42 U.S.C. § 9607(a) (4)( B) . There is no dispute that Grac e is a “ person” under the statute. 42 U.S.C. § 9601(21) (“ The ter m ‘person’ means a n individual, firm, corpora tion, association, partne rship, consortium, joint venture, commerc ial entity , United States Gover nment, State, municipality , commission, poli tical subdivision of a State, or any interstate body .”).

13 9601(25). Se e als o Syms v . Olin Corp. , 408 F.3d 95, 101 ( 2d Cir. 2005) (“CERCL A def ines the 6 term ‘r esponse’ as enc ompassing both ‘ remova l’ eff orts and ‘r emedial a ctions.’”)
. Under the plain languag e of the statute, the fa ct that a pa rty enter s into a consent orde r be fo re be g inn ingre me diatio n is of no le g a l si g nif

ic anc e wi th r e sp e c t to wh e the r o r n ot t he pa rt y has incurr ed re sponse costs as re quired unde r sec tion 107(a). Our relianc e on the statutory languag e conf

orms with the Supreme Court’s e mphasis on the textof CERCL A in interpre ting section 107(a ). See e .g. Atl. Research , 1 27 S. Ct . at 23 36 (s tatin gtha t th e str uc tur a l r e latio ns hip of the text must“be r ead a s a whole,” and that the “ plain language of s ub para graph ( B) authorizes cost-re cover

y actions by

any private pa

rty , including PRPs” (empha sis added))
. Ind e e d, the Court

c on c lud e d th at “ [b]e c a

us e the pla in t e rm s o f § 10 7( a )( 4) (B ) a llo w a PRP to
rec over c osts from other PRPs, t he statute provide s Atlantic Resea rch w ith a cause of ac tion.” Id. at 2339. In the same ma nner that section 107(a) is not li mited solely to “innocent” parties, see id. , section 107(a ) does not spec ify that only parties who “ voluntarily ” re mediate a site have a
cause of ac tion. Section 107 “per

mits a PR P to recove r only the costs it has ‘incur

red’ in cleaningup a site.” Id . at 2338 (c iting 42 U.S.C. § 9607(a) (4)( B) ). Section 107(a ) “pe rmits cost recove ry (as distinct from contribution) by a private par

ty that has itself incurr ed cle anup costs.” Id. A p art y wh o “ pa y s to satis fy

a se ttl e me nt a g re e me nt o r a c ourt jud g me nt, ” ho we ve r, “ do e s n ot i nc ur itsAs the Supreme Court sug g ested, it may well be that a

party who sustains expenses 7 pursuant to a c onsent dec ree followinga suit under se ction 106 or sec tion 107(a) may have a cause of ac tion under either section 113(f

), sec tion 107(a), or bo th
. Atl. Research , 127 S. Ct . at 2338 n.6. We need not addr ess this issue here a s Grac e did not enter into the consent dec ree followingsuit. See id. 14 own costs of re sponse. Rather, it re imburses other pa rties for c osts that those parties incurr ed.” Id ; se e als o Ko tro us v . G os s- J e we tt Co . o

f N. Cal

. , 5 23 F .3 d 9 24 , 9 34 (9 th C ir . 2 00 8) (“ [A] PRP who has not bee n subject to a § 106 or a § 107 action . . . is not entitled to seek contr ibution
un de r § 11 3. Ins te a d, he sh ou ld p ro c e e d und e r § 10 7 f or c os t r e c ov e ry .” ). He re , G ra c e se e ks to
re c ov e r c os ts f

or re me diatio n it

pe rf or me d it se lf

; it do e s n ot s e e k to re c ou

p e xpe ns e s in c ur

re d in satisfying a

settlement ag ree ment or a c ourt judg ment. We conclude that Grac e may seek
rec overy for incur red r esponse c osts under sec tion 107(a). 7 Our holdingthat Gra ce inc urre d response costs even though it conducted the r emediation purs ua nt t o a c on se nt o rd e r i s c on sis te nt w ithpr ior de c isi on s th at ha

ve a llo we d p ote nti a lly responsible pa

rties to seek c ost recove ry under se ction 107(a) despite g overnme nt involvement
an d o v e r s i g h t . InSc ha e

fe r v . To wn o

f V ic tor , the plaintiff under

went eight y ear s of enf

orce ment pr oc e e din g s f

ro m N e w Y or

k’ s D EC w ithre sp e c t to a c ontamin ate d la

nd fi ll a nd ha d e nte re d into two consent orde rs with the DEC re g ardingthe landfill’s closure and re mediation. 457 F.3d 188, 19 1- 92 (2 d Ci r. 20 06 ). Th e fi rs t c on se nt o rd e r r e qu ir e d inve sti g atio n o f t he po ssi ble environmenta l threat posed by the landfill; two y ear s later, the se cond conse nt order r equire d closure. T he Schaefe r

Court held the plaintiff could br ing a cause of ac tion under sec tion 107 beca use the plaintiff ha d begun to incur some re sponse costs bef ore the final conse nt order requiringclosure of

the site. Id. at 201-02 (c oncludingthat even “ under the holding of this Court in Consolidat ed Edison, Schaef er ma y bringthis action under § 107" ). De spite the fac t that15

Schaef er a cted pur suant to ext ensive a g ency oversig ht, the Sc ha e

fe r Court concluded that Schaef er ha d incurre d costs of re sponse duringthe closure proce ss and thus could seek to r ecove r those nec essar

y costs under se ction 107(a)
. Simi larly , in Consolidat ed Edison , the plaintiff ente red into a “ voluntary clea nup
a g re e me nt” wi th N e w Y or k’ s D EC a ft e r t

he a g e nc y ha d r e qu ir e d th e pla int if

f t o s ub mit information conc erningpossible contamination at over 100 of its properties. 423 F .3d at 93. The plaintiff had r emediate d the sites at issue only pursuant to the agree ment, which plaintiff completed in re turn for the DEC’s waivingsome of its liabilit y . Id. at 96. As the Court found, C o n s o l i d at e d

E d i s o nw a s a

p o t e n t i a l l y r e s p o n s i b l e p arty, n o tani n n o c e n tp arty, s e e k i n gr e c o v e r y. Id. at 10 0. Ne w Y or

k in fa c t e xpre ssl y

c onte mpl ate d th at su c h “ Pot e nti a lly Re sp on sib le Part [ie s]” wo uld

e nte r i nto a g re e me nts wi th t he DE C thro ugh th e “ vo luntary c le anu p p ro g ra m” to avoid liability

with the state. The state’s volunteer clea nup prog ram guide diffe rentiate s betwee n PRP s and “innoc ent” owne rs, and it place s differ ent substantive and pr ocedur al compliance
re qu ir e me nts up on

the se tw o ty

pe s o f p art ie s. Consolidated Edison was no more a n “innoce nt” volunteer

than Gra ce. B oth parties would have be en vulner able to suit by the state a

bsent proper

reme diation conducted unde r the respe ctive agree ments with the state. More importa ntly , there is no doubt the DEC would not have pr e c lud e d G ra c e fr om e nte ri ngint o a vo luntary

c on se nt a g re e me nt m e re ly be c a us e Gr a c e isGra ce a dds that New Y ork’s Voluntar y Cleanup Prog ram wa s not adopted until 1994. 8 Prior to that date, the only way a par ty could “voluntar ily ” under take a clea nup, obtain DEC’s approva l and over sight of a reme dial plan, and r ece ive re lease of some liability was to ente r a c on se nt o rd e r w iththe DE C. 16 a PRP. Indeed, the DEC states in the Voluntary Cleanup Prog ram Guide that a voluntary 8
c l e anu p “ a g r e e m e nt ” m a

y b e c h ar a c t e r i z e d

a s an“ o r d e r ” u

p o nth e r e qu e s to f

a p arty. For the purposes of

CERCL A, there fore , the voluntary ag ree ment in Consolidat ed Edison differ s from the Consent Orde r in Gra ce in title only —both were ag ree ments made with the DEC to remediate voluntarily

contaminated sites a

nd to avoid liability . We note that the State of Ne w Yo rk ’s po sit ion , a

rt ic ulate d in

its am ic us brief in this ca se, fur ther supports this contention. New York a sserts “ther e is no prac tical diffe renc e betwe en an a g ree ment under the Voluntary Cleanup Prog ram a

nd a settlement in the for

m of an a dminist rative c onsent order under the State Inactive Hazardous Waste Disposal Site prog ram, such a s Grac e sig ned.” B eca use the de termination of whether a par ty has a c ause of

action under

section 107(a ) ca

nnot turn on the semantics of the state program’s title, which w ill undoubtedly vary from state to state a

nd be subjec t to internal state modifications, we find no rea son to disti nguish the case at bar from other

case s in which we allowed PRPs who acted pur suant to administrative agree ments to seek to re cover expenses under se ction 107(a)
. The re levant inquiry

with respec t to section 107(a) is whether the party undertook the
reme dial actions without the nee d for the ty pe of a dminist rative or

judicial action that would g ive rise to a c ontribution claim under sec tion 113(f). See A tl. Research , 127 S. Ct . at 2338. Gra ce, like the Consolidat ed Edison plaintiff who wa s found to have a cause of ac tion for re cover y of response costs, chose to e nter into an a g ree ment with the state to investigate and r emediate a17

c ontamin ate d s ite . G ra c e save d th e pa rt ie s a nd the g ov e rnme nt l iti g atio n c os ts, and pr e suma bly also limit ed ong oing c ontamination by promptly reme diating the site. Although G rac e ente red into a consent orde r with the state, that f act a lone and the title of its agree ment with DEC do not prec lude it from bring ing a n action pursua

nt to section 107(a)
. Whil e it is “‘ultimately

the provisions of our law s rather than the princ ipal conce rns of our leg islators by

which we are g overne d,’” Cohen v. J P Morgan Chase &Co. , 498 F.3d 111, 1 2 2 (2 d C i r. 2 0 0 7 ) ( qu o t i n g Oncale v . Sundowner Offshore Servs., I nc. , 523 U.S. 75, 79 (1998)), in this i nstance the text of the law mandate s a statutory interpre tation that also supports the principal c ong ressional c oncer ns of ensuringthat those responsible pr omptly clea n up and pay

for
remova l of hazardous wa ste. See, e .g. , Rep. Volkmer 96 Cong . House De bates 1980, 26351 (“Cre ation of a supe rfund will lead to the pr ompt cleanup of hazardous dumps once discovere d
and thu s w ill le sse n th e ri sk

of ha rm to h uma n b e ing s. ” ). On e of

CER CLA’ s ma in p ur

po se s is to

“ ‘e nc oura g e pr ivate pa

rt ie s to a ssume the fi na

nc ia l r e sp on sib ili ty

of c le anu p b y a llo wi ngthe m to seek r ecove ry

from other s.’” Key Tronic Corp. , 5 1 1 U. S
. at8 1 9 n . 1 3 (qu o t i n g FMC Corp. v. Aero Indus., I

nc. , 998 F.2d 842, 847 ( 1993)). As Sen. Culver stated in the Senate debate s
re g ard ingthe bil l, “ [Th e statut or y ] pur po se s a re to p ro vid e a

wa y fo r t he Go ve rnme nt t o r a

pid ly
c le an u p a nd mit ig ate c he mic a l di sa ste rs , to a ssu re inj ur e d v ic tim s p ro mpt and a de qu ate
c omp e ns atio n, and

to c re ate an in c e nti ve fo r b oth a high s tand ard

of c are and fo r a re sp on sib le party to clean up its own re lease s.” 96 Cong . Senate De bates 1980, 30952. We are also mindful that CERC LA was e stablished with the intent that the fede ral a nd state g ov e rnme nts wo uld

c oo pe rate in o rd e r t o r e me diate e nv ir onme nta l ha zar ds e xpe dit iou sly and appr opriately
. See United States v. Colorado, 990 F.2d 1565, 1575 ( 10th Cir. 1993); Manor18

Care, Inc. v . Y

askin, 950 F.2d 122, 125- 26 (3d Cir. 1991) (A lito, J .). We find no basis for interpre ting CERCL A in a wa y that would discourag e par ties from ente ringag ree ments with the state s to e ns ur e a

pr op e r c le anu

p. To dis a llo w a

pa rt y wh o h a s e nte re d into a

c on se nt o rd e r w ith
an ad m i n i s tra t i v e a gen cy

t o s ee k re co v ery o f e x p en d i ture s fr o mo th er P R P s wo u l d

d i s co ura ge cooper ation with state ag encie s. Whi le potentially liable par ties might still attempt to clean up a contaminated site, w e see no prac tical or statutory purpose in discoura g ing pa rties from
reme diating c ontaminated sites in a manne r that provides a g ency oversig ht of the re mediation. Moreove r, interpr etingthe statute such that a potentially

liable par ty , like Z otos, bears no financ ial responsibility

for r emediation costs, while the pa rty that actua lly

consente d without litigation to reme diate a c ontaminated site bea rs the total financ ial burden of the re mediation, does not comport with the intended pur poses of the statute. See Consol. Edison , 423 F.3d at 94 (notingthe primary

purposes of CERCLA include “ encour ag ing the timely clea nup of hazardous waste sites” and “pla cingthe cost of that [clea nup] on t hose re sponsible for cr eatingor maintaining the hazardous condition” ( alteration in original) ( internal quotation marks omitted))
. I f a po te nti a lly

lia ble pa rt y be lie ve d it

c ou ld a vo id l ia bil ity a lto g e the r b y

do ingno thi ngwh ile
ano the r l ia

ble pa rt y ne g oti ate s w itha

state a g e nc y , it

wi ll h ave le ss i nc e nti ve to c oo pe ra te in
reme diation. See, e .g. , Rep. Florio, 96 Cong . House De bates 1980, 26338 (r eiterating the objectives of CERCLA, which include that “[i] t cre ates a strongincentive both for preve ntion of rele ases a nd voluntary

clea nup of re lease s by

responsible pa

rties”)
. F a c e d w ithe nv ir onme nta l ha zar do us wa ste c ontamin atio n o n it s la nd , G ra c e did

no t w a it for a lawsuit befor e attemptingto remediate. Instead, it promptly enter ed into a conse nt order with a state a g ency

and cle aned up the site. By doing so it avoide d additional contamination19

cause d by delay , as we ll as saved itself, other potentially

liable par ties, and the state a

nd fede ral g overnme nts cleanup c osts. W e ca nnot conclude that Congre ss intended to bar suc h a plaintiff fr om s e e kin gre c ov e ry

of c os ts f ro m ot he r r e sp on sib le pa

rt ie s, and to a llo w tho se po te nti a lly lia ble pa rt ie s to avo id f

ina nc ia l r e sp on sib ili ty , p a

rt ic ula rl y wh e re no thi ngin t

he statut e sp e aks to such a limitation. See 42 U.S.C. § 9607(a)(4) (B ). More over, ha d Gra ce not a cted r esponsibly by enter ing into the c onsent order with the DEC, and instead w aited for suit, itwould have ha d a
c a us e of a c tio n f or c ontr ibutio n und e r s e c tio n 1 13 (f )( 1) , b ut t hat c ours e of

a c tio n w ou ld a

rgua bly have oc c a sio ne d b oth

fu rt he r c ontamin atio n a

nd g re ate r e xpe ns e s a sso c iate d w iththe de lay in instituting litigation. D. Ne c e ssa r y C os ts of R e spo nse T h e s t atu t e a l l o w s f

o r r e c o v e r y o f o n l y “ ne c essa ry

c os ts o f r e sp on se . . . c on sis te nt w ith the national conting ency

plan.” § 107( a)( 4)(B ), 42 U.S.C. § 9607(a)( 4)(B ). We note that Z otos stipulated at an e arlier

stag e in the proc eeding s that “[a]tleast some” of the costs Gra ce inc urre d
wer e “ne cessa

ry ,” and “ consistent with the National Continge ncy Plan,” and within the mea ning of 42 U.S.C. § 9607(a)( 4)(B ). B eca use the district cour

t concluded that Grac e had no c ause of action, it made no de termination with respe ct to the nature of the c osts incurred. We make no jud g me nt a

bo ut t hat is su e , whic h is a

matte r t o b e de c ide d b y

the dis tr ic t c ourt

in t he fi rs t instance. III. Conclusi on We hold that parties who have not been subjec t to a civil action under section 106 or section 107 but who have reme diated a c ontaminated site pursua nt to a consent orde r ente red with a state a g ency

may bringa ca

use of a ction to rec over ne cessa ry costs of re sponse under20

CER CLA s e c tio n 1 07 (a ). We a ff ir m th e jud g me nt o f t

he Di str ic t Co ur

t w ithre sp e c t to its dismiss al of Gr ace ’s sec tion 113(f)(3) (B ) cla im. W ith reg ard to Gr ace ’s claim under section 107(a) , we r ever se and w e re mand for f urther pr ocee dings c onsistent with thi s opinion. Affir med in part, re verse d in part, and r emande d.