### In the 

# United States Court of Appeals For the Seventh Circuit

____________________ No. 18-3235

R EFINED M ETALS C ORPORATION , Plaintiff-Appellant,

v.

NL I NDUSTRIES I NC ., Defendant-Appellee

.

____________________ Appeal from the United States District Court for th e Southern District of Indiana, Indianapolis Division.

No. 1:17-cv-02565 — Sarah Evans Barker , Judge.

____________________

A RGUED M ARCH 25, 2019

— D ECIDED A UGUST 22, 2019

____________________

Before W OOD , Chief Judge, and F LAUMand S YKES, Circuit Judges

. W OOD , Chief Judge . This is a case about who should bear the costs of cleaning up a cont aminated lead smelter site in Beech Grove, Indiana, a suburb of Indianapolis. Plainti ffRefi ned Metal Corporation (“Re fi ned”) has owned the site since 1980, when it acquired it from defendant NL Industries Inc. (“NL”). After years of litigation involving both the federal En-2 No. 18-3235

vironmental Protection Agency (“EPA”) and the Indiana Department of Environmental Management (“IDEM”), Re fi ned entered into a se tt lement with both agencies in 1998. The 1998 Decree, as we will call it, required Re fi ned to close the site, pay a $210,000 fi ne, and remedy the contamination. For their part, EPA and IDEM agreed not to bring suit against Re fi ned on at least some of their pote ntial claims (though the parties dispute the scope of those covenants). These covenants not to sue took e ffect immediately upon the entry of the 1998 Decree. In 2017, almost 19 years later, Re fi ned sued NL to recoup some of the cleanup costs for which it is responsible. A delay of 19 years is a long ti me to keep an entitlement to reimbursement up in the air. The question before us is whether it is so long that Re fi ned lost its statutory right to bring this action. The district court found that Re fi ned’s claim quali fi ed as a “contribution action” under section 113(f)(3)(B)of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. § 9613(f)(3)(B).Contribution claims are subject to a three-year statute of limitations, and so the court dismisse d the suit on that ground. It also relinquished supplemental jurisdiction over Re fi ned’s state law claims. On appeal, Re fi ned argues that its suit is instead a “cost-recovery” action under section 107(a) of CERCLA, 42 U.S.C. § 9607(a), and that it would be timely under that subsection’s more perm issive limitations period. NL contends that it wins no ma tt er which CERCLA provision applies, given that the statute of limitations applicable to section107(a) is only six years and, as NL sees things, that clock began running and expired long ago.No. 18-3235 3

It ma tt ers, in our opinion, whether this is a section 113(f)(3)(B) contribution action or a section 107(a) cost-recovery case. If it were the la tt er, we would need to conduct a searching examination of what ac tions to clean up the site anyone has taken, and when. But we can skip that inquiry, because we agree with the districtcourt that this is a section 113(f)(3)(B) contribution action, and the limitations period had expired by the time Re fi ned fi led suit. We therefore a ffi rm the decision of the district court.

I CERCLA, commonly known as the Superfund Act, “shiftsthe cost of [an environmental] cleanup to the parties responsible for creating the hazard and away from taxpayers, who otherwise would be left to pick up the bill.” NCR Corp. v. George A. Whiting Paper Co. , 768 F.3d 682, 689 (7th Cir. 2014). The statute identi fi es who may be held liable; they are called “potentially responsible parties” or PRPs in the jargon of environmental law. If a PRP believes that it has paid or may become liable for paying “cleanup costs in excess of its fair share,” id. , the statute permits it to seek compensation from other PRPs. There are two such routes available to someone seeking to recover from a PRP: a section 107(a) “cost-recovery” action and a section 113(f) “contribution” action. Bernstein v. Bankert, 733 F.3d 190, 206 (7th Cir. 2013). A plainti ffsuch as Re fi ned will often prefer to proceed under the cost-recovery provision in section 107(a), because it not only contains a longer statute of limitations, but it also bars defendants from asserting equitable defenses. NCR Corp ., 768 F.3d at 690. These plainti ff

friendly provisions make sense: section 107 generally, if not always, operates as an avenue for recovering “costs incurred4 No. 18-3235

during a self-initiated environmental cleanup” rather than one spurred by a lawsuit or se tt lement. Id. But if either statutory trigger for a section 113(f) contribution action is present—a qualifying lawsuit unde r section 113(f)(1) or a qualifying se tt lement under section 113(f)(3)(B)—the plainti ff may proceed only under that provision. See Bernstein , 733 F.3d at 206 (“[A] plainti ffis limited to a contribution remedy when one is available.”). The statutory trigger at issue inthis case is the one spelled out in section 113(f)(3)(B), whic h creates a right to contribution for a party that has “resolv ed its liability to the United States or a State for some or all of a response action or for someor all of the costs of such action in an administrative or judicially approved se tt lement.” (A “response” is a term of art inCERCLA that encompasses both short-term “removal” actions and more permanent “reme dies” or “remedial actions.” 42 U.S.C. § 9601(25)). The district court found that the 1998 Decree resolved enough of Re fi ned’s liability to qualify as “an administrative or judicially approved se tt lement” under section 113(f)(3)(B). Since the thr ee-year clock for contribution suits starts when the se tt lement is entered, the district court ruled that the statute of limit ations ran out in 2001 and this suit was time-barred. On appeal, Re fi ned advances nine issues, which we have reorganized into three principa l arguments, in support of its contention that the 1998 Decr ee did not trigger a section 113(f)(3)(B) contribution claim. Ifit is correct, and if other conditions were satis fi ed, then it would be able to pursue a section 107 cost-recovery claim. First, Re fi ned asserts that its refusal to admit liability in the 1998 Decree meant that the Decree did not actually “resolve[] it s liability to the United StatesNo. 18-3235 5

or a State for some or all of a response action,” as the statute requires. Second, Re fi ned argues that only se tt lements that resolve liability for CERCLA-speci fi c violations qualify as predicates for section 113(f)(3)(B) claims. As Re fi ned reads it, the 1998 Decree included only covenants from the agencies not to sue Re fi ned under other statutes—i n particular, the Resource Conservation and Recovery Act (RCRA) and the Clean Air Act—and left Re fi ned’s CERCLA liability open. Re fi ned asks
us to fi nd that this is an independ ent reason that the 1998 Decree could not have triggered a contribution action. Third, Refi ned argues that it could not have sought a “contribution” from NL because, in its view, NL and Re fi ned are not “joint tortfeasors.” We address its arguments in that order.

A In determining whether the 1998 Decree quali fi ed under section 113(f)(3)(B), Re fi ned urges us to focus on the presence or absence of an admission of lia bility. But that is not the central inquiry. We recognize that in Bernstein , we found that a

se tt lement had not resolved enough of the PRP’s liability to trigger a section 113(f)(3)(B) claim, but the circumstances are important. We reached this result when (1) the se tt lement expressly stated that the defendant companies did not admit any liability or the validity of the EPA’s fi ndings; and(2) the covenants not to sue were not immediately e ff ective, but instead were conditional on comp lete performance of the terms of the se tt lement. 733 F.3d at 212. The di strict court in this case found it “clearer than a remedi ated stream” which of the two factors the Bernstein court found dispositive: the lack of an immediately e ff ective covenant not to sue. The Bernstein courtemphasized that “if the EPA had included an immediately effective promise not to sue as consideration for entering into6 No. 18-3235

the agreement, the situation would be di ff

erent .” Id. at 213 (emphasis added). We have in this case that “di ff erent” situation. Bernstein also noted that it was “very di ffi cult to say, in light of [a section from the se tt lement in which the defendant companies refused to admit liability], that the agreement between the parties constituted a resolution of liability.” Id

. at 212. And we do not need to guess what e ff ect each of the two factors Bernstein identi fi ed would have in isolation, because we have revisited this topic. In NCR Corp .—a case Re fi ned does not even cite in its opening brief—we found that a se tt lement’s inclusion of an immediately e ff ective covenant not to sue meant that a PRP had “resolved its liability ... for some or all of a response action,” which in turn started the clock on a contribution claim. 768 F.3d at 682. In its reply brief, Re fi ned points out that “the NCR Court makes no mention of a nonadmission clause, an issue raised in Bernstein. ” But that is precisely why NCR dooms Re fi ned’s argument. In NCR , the onlyfactor that the court explicitly discussed as a reason for distinguishing the se tt lement from the one in Bernstein was the immediate e ff ectiveness (as opposed to conditional nature) ofthe covenant not to sue. Granted, the court noted that the settlement before it “diverge[d] in every meaningful way from the one in Bernstein that left section 107(a) liability available.”768 F.3d at 692. Yet its reasoning leaves no doubt that the immediately e ff ective covenant not to sue was the dispositive point. Because that factor is present in this case, the mere fact that Re fi ned refused to admit liability is not enough to exempt the 1998 Decree from the reach of section 113(f)(3)(B).No. 18-3235 7

B We now turn to the scope of the covenants not to sue that were included in the 1998 Decree. All agree that they were notcomprehensive. Both EPA and IDEM included clauses reserving their rights to fi le suit under particul ar statutes. The question relates to both the content and the e ff ect of those reservation clauses—in particular, their e ff ect on Re fi ned’s eligibility for a contribution remedy as of the date of the Decree. Re fi ned asserts that the Decree left its CERCLA liability una ff ected, and that at least some of its liability speci fi cally for a violation of CERCLA would have to be resolved in order for the 1998 Decree to support a section 113(f)(3 )(B) contribution action. NL disputes both of these points. It argues that the Decree actually didresolve some of Re fi ned’s CERCLA-speci fi c liability, since IDEM’s reservation clause says nothing about CERCLA, suggesting that the state agencyhad given up the ability to proceed under that statute. NL also contends that none of this

ma tt ers. As it reads section 113(f)(3)(B), a se tt lement need only resolve some portion of a PRP’s liability for a cleanup—under any statute—in order to trigger a contribution action. We agree with the la tt er point: a se tt lement need not resolve CERCLA-speci fi c liability in order to start the clock on a contribution action. Multiple reasons support an interpretation of section 113(f)(3)(B) that does not limit covered se tt lements to those that speci fi cally mention CERCLA. First, the othertrigger for a contribution action—section 113(f)(1), which allows partiesto seek contribution “during or following any civil action under section 9606 of this title or under section 9607(a) of this title”—explicitly limits its applicability to civil actions8 No. 18-3235

brought under CERCLA. “[W]here Congress includes particular language in one section of a statute but omits it in anothersection of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.” Russello v. United States , 464 U.S. 16, 23 (1983) (internal citation and quotation marks omi tt ed). While this maxim should not be applied mechanically, the disparity between these two closely related subsections in section 113(f) is a strong indication that Co ngress meant for the universe of qualifying se tt lements under section 113(f)(3)(B) to be broader than those speci fi cally mentioned in section 113(f)(1). There is further support for th is reading in the text and structure of the Act. The tri gger for section 113(f)(3)(B) encompasses se tt lements that leave at least some liability open, given that this subpart of the statute describes a qualifying

se tt lement as one that “has resolved [a defendant’s] liability to the United States or a State for some or all of a response action or for some or all of the costs of such action.” (Emphasisadded). We have observed that CERCLA does not favor “slicing and dicing of costs incurred under the same administrative order ... .” NCR Corp. , 768 F.3d at 692. The same logic applies here. The text demonstrates Congress’s intention to encourage parties that have reached even a partial se tt lement with respect to a contaminated site to act expeditiously in identifying costs, seeking comp ensation where necessary and completing the required cleanup.

Re fi ned’s reading of section 113(f)(3)(B), in contrast, would allow se tt ling parties to drag out the process of seeking those funds until they “initiat [ed] ... physical on-site construction of the remedial action”—in other words, until the six-year statute of limitations for a cost-recovery action underNo. 18-3235 9

section 107(a) begins to run. As Re fi ned sees things, despite years of cleanup work on the site , that clock did not start here until the EPA approved “ fi nal corrective measures” in 2014. We do not need to decide whether the 1998 Decree actually did permit Re fi ned to wait almost two decades before undertaking the requisite on-site construction. (Recall NL’s backup argument that Re fi ned long ago undertook enough work on the site to start and eventuallyrun out the 107(a) clock.) That is a question of interest only to Re fi ned and the EPA. Our concern is with Re fi ned’s right to insist that someone else—here, NL—share that bill. In that conn ection, it is worth noting that Re fi ned’s reading of the statute wo uld have allowed it to wait almost 19 years before fi ling suit to recover any costs from NL for any actions covered by CERCLA that were incurred in the course of complying with the 1998 Decree. We would need a much strong er statutory basis than we have before we would adopt that position. As the district court noted, it would undermin e the purpose of a statute of limitations if “a plainti ff[could] choose when a limitation period to which it is subject begins to run.” That is e ff ectively the rule that Re fi ned asks us to bless here. Short statutes of limitations encourage swift action, and that is the regime Congress chose for the se tt lement trigger in section 113(f)(3)(B). The statutory text also speci fi cally contemplates se tt lements that resolve liability under state, rather than federal,law. This makes it even more unlikely that Congress was concerned only with liability unde r the federal CERCLA statute. Section 113(f)(3)(B) speaks of se tt lements that resolve liability “to the United States or a Statefor some or all of a response action.” States have an independent right of action under CERCLA. See Niagara Mohawk Power Corp. v. Chevron U.S.A.,10 No. 18-3235

Inc. , 596 F.3d 112, 126–27 (2d Cir. 2010) (“Under CERCLA,states have causes of action independent from the federal government.”). But states also ha ve myriad environmental laws of their own that might be impl icated by an enforcement action. See, e.g. , CERCLA § 121(e)(2), 42 U.S.C. § 9621(e)(2), stating that “[a] State may enforce any Federal or State standard,requirement, criteria, or limitation to which the remedial action is required to conform under this chapter ... .” Perhaps there are state environmental st atutes or enforcement actions that are so far a fi eld from CERCLA and its concerns that a defendant subject onlyto state enforcement action would not be on notice that a federal clock was ticking. But that is not the case before us. Indiana se tt led with Re fi ned in 1998 at the same time as the federal gove rnment, and the EPA’s reservation clause shows that the cleanup implicated CERCLA. Whatever the scope of the EPA’s covenant not to sue, Re fi ned certainly resolved its liability to “a State for some or all of [the] response action.”

Re fi ned expresses a practical concern about this straightforward reading of the statute. The 1998 Decree began a yearslong period of cleanups that required federal oversight and approval, culminating in the EPA’s 2014 approval of “ fi nal corrective measures.” Re fi ned objects that a three-year statute of limitations would require it to initiate a contribution action long before the full scope of its liability became certain. Butthat is nothing new: in tort law, the statute of limitations begins running on the day of the accident, even though damages such as the full cost of medical care and lost income often must be estimated, since they st retch far into the future. In addition, as the district court noted, “ NCR rejected as contrary
to Bernstein and common sense the notion that no se tt lement ‘resolves’ liability until the work under it is complete.” WeNo. 18-3235 11

also agree with the district co urt that a declaratory judgment could help mitigate such ex ante uncertainty. CERCLA section 113(g)(2), which governs the statute of limitations for section 107(a) actions, anticipates this problem by requiring courts to “enter a declaratory judgment on liability for response costs or damages that will be binding on any subsequent action or actions to recover further response costs or damages.” 42 U.S.C. § 9613(g)(2). We see no reason why the lack of such a mandatoryprovision in section 113(f) should be read to strip courts of their discretionary power to issue declaratory judgments in such cases, where appropriate.Finally, our holding is consistent with those of the majority of circuits that have considered the question. See Asarco LLC v. Atlantic Rich fi eld Company, 866 F.3d 1108, 1120–21 (9th Cir. 2017); Trinity Industries, Inc. v. Chicago Bridge & Iron Co. ,735 F.3d 131, 136–37 (3d Cir. 2013). The Second Circuit appears to be an exception: it has held that a se tt lement must explicitly resolve CERCLA liability to trigger a contribution action. Consolidated Edison Co. of New York v. UGI Utilities , 423 F.3d 90 (2d Cir. 2005). On the othe r hand, as the district court noted, the Second Circuit later cast serious doubt on that part of UGI Utilities (without quite overruling it, since the issue was not squarely presented). See Niagara Mohawk Power Corp. , 596 F.3d at 126 n.15 (noting that there was a “great deal of force to th[e] argument” of the EPA as amicus that UGI Utilities was wrongly decided). Whatever the state of the law in the Second Circuit, we are pe rsuaded by the view adopted by the Third and Ninth Circuits.12 No. 18-3235

C

Re fi ned spends much of its brief advancing a di ff erent argument altogether for its contenti on that a contribution actioncould not have accrued. This one is based solely on commonlaw principles. Re fi ned asserts that it could not seek anything in the nature of “contribution” from NL because it did not share liability with NL for the underlying “tort.” In support of this reasoning, Re fi ned cites the Supreme Court’s decision in United States v. Atlantic Research Corp. , 551 U.S. 128 (2007), which notes that a contribution action under section 113(f)(1)— notthe statutory trigger at issue here—requires “common liability stemming from an action instituted under section 106 or section 107(a).” Id. at 139. To show that it lacked common liability with NL, it points to the Supreme Court’s decision in Meghrig v. KFC Western , 516 U.S. 479 (1996)

, which held that RCRA—one of the st atutes under which the federal government proceeded—does not provide a private cause of action to recover costs for “the cleaning up [of] toxic wastethat does not, at the time of suit, continue to pose an endangerment to health or the environment.” Id. at 481.

We fi nd this argument puzzling. Fi rst, how is it that NL can somehow be, at the same time, notjointly liable for the actions required under the 1998 Decree and yet still liable to Re fi ned once Re fi ned “could show that its actions incurred more than its fair share of costs for which both parties are liable ”? Appellant’s Br. at 21 (emphasis added). Either NL has some liability for these cleanup costs or it does not. It is beside the point that “the 1998 RCRA Consent Decree neither fi nds nor addresses any liability of NL ...” Id. at 2. NL was a non-settling party. The contribution provision in section 113(f)(3)(B)No. 18-3235 13

exists to allow se tt ling parties to seek contribution from a nonse tt ling party. It was for Re fi ned to establish, in the course of making a timely contribution cl aim, that NL was liable under the statute, and for what amount. Re fi ned failed to do so. It is also unclear why Meghrighas anything to say about this situation. The MeghrigCourt held that RCRA does not authorize parties to seek compensation for already completed cleanup

e ff orts, but it explicitly recogniz ed that CERCLA does (within the applicable statute of limit ations). 516 U.S. at 486–88. After all, that is why Re fi ned is here. The fact that the federal government brought suit and se tt led under RCRA tells us nothing about whether, as of the date of se tt lement, CERCLA provided Re fi ned with an independen t mechanism for seeking compensation. Apart from its peculiar nature, Re fi ned’s “common liability” argument has another problem: Re fi ned waived it in the district court. Re fi ned’s response to NL’s motion to dismiss did not so much as mention th is argument, let alone develop it. Re fi ned tries to dig itself out of that hole with the assertion that its arguments on this point “ fl ow naturally from the legal analysis and decisions of [the cases it cited below].” Reply Br. at 24. But citing a few cases thatmight (or might not) implicate a separate line of argument is not good enough. A thorough treatment of Re fi ned’s argument could potentially require deciding one or both of (1) how much liability NL might have had, if any, under RCRA and the Clean Air Act; and (2) whether the Supreme Court’s interpretation of section 113(f)(1) in Atlantic Research applies with equal force to section 113(f)(3)(B), a di ff erent subsection covering a di ff erent situation. The district court did not deal with these issues, because Re fi ned never briefed them. It is therefore too late for Re fi ned to raise them now.14 No. 18-3235

II There remains the question of Re fi ned’s claims under Indiana’s Environmental Legal Acti ons (“ELA”) statute. Once it dismissed the federal claims, the district court relinquished supplemental jurisdiction over the state-law claims. See 28U.S.C. § 1367(c). We review this decision for abuse of discretion. Montano v. City of Chicago , 375 F.3d 593, 601 (7th Cir. 2004). The district court found nothing to rebut what we have called the “sensible presumption that if the federal claimsdrop out before trial, the district court should relinquish jurisdiction over the state-law claims.” Williams Elecs. Games, Inc. v. Garrity, 479 F.3d 904, 907 (7th Cir. 2007). Re fi ned o ff ers no reason for fi nding an abuse of discretion here. It merely asserts that its claims under the ELA “should be allowed to proceed on remand to the District Court.” It has therefore waived any challenge to the district co urt’s decision to relinquish its supplemental jurisdiction. Similarly, Re fi ned has not explained why we should upset the district court’s admi tt edly very technical ruling that Refi ned did not properly support the existence of diversity jurisdiction under 28 U.S.C. § 1332. In the district court, Re fi ned alleged that “[t]he amount in controversy in this action exceeds $75,000 and is between citizens of di ff erent states ... .” But the district court found that this was “ine ff ective” because Re fi ned failed to specify that the amount in controversy exceeded $75,000 “exclusive of inte rest and costs,” as required by 28 U.S.C. § 1332(a). The court cited Powers v. Ful tz , 404 F.2d 50, 52 (7th Cir. 1968), for the proposition that it was proper to dismiss a complaint for failing to address interest and costs. This result may or may not be required by Powers, where the complaint (unlike the one before us) also alleged that theNo. 18-3235 15

amount in dispute was exactly$10,000 (then the amount speci fi ed in the statute) rather thana claim in excess of the required amount. Here, the plainti ff s did plead an amount incontroversy in excess of the statutory minimum; they just neglected to specify that the exce ss existed exclusive of interest and costs. In the end, however, we have no need to decide whether the state claims fell within the court’s diversity jurisdiction, because Re fi ned has again dropped the ball. It never sought leave to amend in the district court to cure the apparent de fi

ciency. In its opening br ief to this court, Re fi ned asserts that “[j]urisdiction also exists based on the diverse citizenship of the parties pursuant to 28 U.S.C. 1332” and that “[t]he amount in controversy exceeds seventy- fi ve thousand dollars ($75,000.00).” Nowhere does Re fi ned tie up the loose end that the district court identi fi ed ( i.e. the failure to specify that the required amount is satis fi ed without considering interest andcosts), nor does it even acknowledge the existence of an adverse ruling on this question. This is waiver, and it leaves no further basis for federal jurisdiction over the state-law claims, which can still be pursued in state court should Re fi ned so desire.

III We AFFIRM the judgment of the district court.