Opinion ID: 201206
Heading Depth: 3
Heading Rank: 2

Heading: The judgment for past soil remediation response costs

Text: 29 The Capuanos also contend that the O'Neil judgment triggered the running of the statute of limitations because it was a judgment for the recovery of response costs. In O'Neil, R & H was held jointly and severally liable for past response costs totaling $991,937.30 for the soil remediation. Thus, the Capuanos argue, R & H had three years from the date of the O'Neil judgment to bring a contribution action not only for costs relating to the soil remediation, but also for any response costs or damages that could arise in the future. 30 We disagree and, once again, begin our inquiry by examining the language of the statute. When interpreting a statute, courts must strive to give effect to each subsection contained in a statute, indeed, to give effect to each word and phrase. Browning-Ferris, 33 F.3d at 101. Section 9613(g)(3) states that [n]o action for contribution for any response costs or damages may be commenced more than 3 years after—(a) the date of judgment in any action ... for recovery of such costs or damages. 42 U.S.C. 9613(g)(3) (emphasis added). There are two plausible interpretations of subparagraph (a). Under one interpretation, the term such costs or damages refers to any response costs. Under a second interpretation, the term such costs or damages refers to the costs or damages contained in the judgment mentioned in subparagraph (a). 31 Several factors favor the latter interpretation. First, other subsections of § 9613(g)(3) contain the word such and use it to limit and identify a word within the same sentence. For example, § 9613(g)(4) states that [n]o action based on rights subrogated pursuant to this section by reason of payment of a claim may be commenced ... more than 3 years after the date of payment of such claim. 42 U.S.C. § 9613(g)(4) (emphasis added). Similarly, § 9613(g)(5) states that where a payment pursuant to an indemnification agreement with a response action contractor is made ... an action ... for recovery of such indemnification payment from a potentially responsible party may be brought at any time before the expiration of 3 years from the date on which such payment is made. 42 U.S.C. § 9613(g)(5) (emphasis added). In both subsections, the word such is used to identify a particular claim or payment. Similarly, we find that such costs in § 9613(g)(3) refers to the judgment mentioned earlier in the sentence and identifies a particular claim or payment. 2 32 Our interpretation of other subsections of § 9613 further supports the interpretation that such costs refers to costs identified in the judgment. Section 9613(g)(2) requires a court to enter a declaratory judgment on liability and then provides that subsequent actions for future response costs may be maintained at any time during the response action, but must be commenced no later than 3 years after the date of completion of all response action. See 42 U.S.C. § 9613(g)(2)(B). Section 9613(g)(2), therefore, allows for the cleanup and the payment for that cleanup to occur in phases. When a PRP is forced to pay more than its share of that cleanup, it turns to § 9613(f), which allows a PRP to seek contribution from any other person who is liable or potentially liable. 42 U.S.C. § 9613(f)(1). We have determined that § 9613(g)(2)'s declaratory provision applies to § 9613(f)(1), allowing a PRP to obtain a declaratory judgment in a contribution action. See Davis, 261 F.3d at 45-46. After obtaining such a declaratory judgment, a PRP is able to seek contribution from other PRPs in phases as it incurs costs beyond its pro rata share. By interpreting such costs to refer to those costs contained in a judgment, a PRP would not lose the ability to seek contribution if a phase of a cleanup occurs after three years of an initial judgment. 33 The Capuanos disagree and contend, citing Davis, that regardless of when a PRP incurs response costs, a PRP is required to seek a declaratory judgment in a contribution action for any future remediation within three years of being held liable for any type of remediation. Such an argument is self-defeating and proves why a judgment for soil remediation does not trigger the statute of limitations for contribution claims relating to the groundwater remediation. The O'Neil judgment regarding soil remediation triggered the statute of limitations for a contribution action regarding soil remediation. Consequently, R & H sought contribution from other PRPs for the soil remediation. See American Cyanamid v. King Indus., Inc., 814 F.Supp. 215 (D.R.I.1993). R & H could not, however, seek contribution relating to the soil remediation from the Capuanos because the Capuanos had settled with the government regarding costs associated with soil remediation and, as discussed earlier, settling parties are immune from contribution suits regarding matters addressed in the settlement. See 42 U.S.C. § 9613(f)(2). At the time of the O'Neil judgment, R & H was also unable to seek contribution relating to the groundwater remediation because it was uncertain whether groundwater remediation was likely to occur. See Davis, 261 F.3d at 47-48 (stating that a PRP may seek a declaratory judgment in a contribution action if the PRP is likely to incur more than its fair share of future cleanup); see also Boeing Co. v. Cascade Corp., 207 F.3d 1177, 1192 (9th Cir.2000) (stating that declaratory relief is appropriate when there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant declaratory relief (citation omitted)). Indeed, in 1988, Rhode Island and the United States had not assessed whether there was groundwater contamination at the Picillo site. On appeal in O'Neil, we discussed giving Rhode Island and the EPA time to conduct further tests and we discussed the possibility that after conducting the necessary tests, the government [could] conclude[] [that] there was in fact no harm to the area's groundwater. O'Neil, 883 F.2d at 183. As such, R & H could not seek a declaratory judgment against the Capuanos after the O'Neil judgment because, at the time of the O'Neil judgment, R & H did not have a contribution claim, declaratory or otherwise, against the Capuanos. See Davis, 261 F.3d at 48 (stating that a PRP may seek a declaratory judgment in a contribution action if the PRP is likely to incur more than its fair share of future cleanup). Thus, the O'Neil judgment pertaining to soil remediation could not trigger the statute of limitations for a contribution action for groundwater remediation. 34 This interpretation of § 9613 comports with the legislative history of the statute of limitations and advances CERCLA's purpose. See Ortega v. Star-Kist Foods, Inc., 370 F.3d 124, 143 (1st Cir.2004) (Resort to legislative history is appropriate where, as here, the text of a statute is susceptible to two textually plausible interpretations.). 35 The legislative history indicates that § 9613 establishes a three-year statute of limitations for the filing of an action for contribution for response costs or damages. The statute of limitations begins to run at the date of judgment for recovery of response costs or damages or the date of entry of a judicially approved settlement with respect to such costs or damages. H.R.Rep. No. 253(I), 99th Cong., 1st Sess., at  (1985). In discussing the statute of limitations, Congress referred to § 9613(g)(3)(A) and § 9613(g)(3)(B) together. In subsection (B), the statute of limitations is triggered by the entry of a judicially approved settlement with respect to such costs or damages. 42 U.S.C. § 9613(g)(3)(B). The entry of a judicially approved settlement provides contribution protection only regarding matters addressed in the settlement and allows a settling PRP to seek contribution within three years of that settlement for costs incurred in the settlement. See 42 U.S.C. § 9613(f)(2). Similarly, a PRP has three years to seek contribution for costs contained within a judgment. The statute of limitations, however, is not triggered for costs not contained within the judgment. 36 Generally, the interpretation of § 9613 implicates two competing principles. On the one hand, CERCLA's `essential purpose' [is] making `those responsible for problems caused by the disposal of chemical poisons bear the costs and responsibility for remedying the harmful conditions they created.' Boyd v. Boston Gas Co., 992 F.2d 401, 405 (1st Cir.1993) (quoting Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805 F.2d 1074, 1081 (1st Cir.1986)). Congress also wanted to give potentially responsible parties the explicit right to sue other liable or potentially liable parties who also may be responsible for the hazardous waste site. H.R.Rep. No. 253(I), 99th Cong., 1st Sess., at 15 (1985) (by enacting SARA, Congress wanted to protect the interests and rights of those who may be held liable for ... clean-ups.). 37 On the other hand, the Supreme Court has recognized that statutes of limitations are not disfavored, but rather `are found and approved in all systems of enlightened jurisprudence' [and] represent a pervasive legislative judgment that ... `the right to be free of stale claims in time comes to prevail over the right to prosecute them.' United States v. Kubrick, 444 U.S. 111, 117, 100 S.Ct. 352, 62 L.Ed.2d 259 (1979) (citations omitted). Indeed, by passing SARA, Congress recognized that CERCLA currently includes no explicit statute of limitations for the filing of cost recovery actions [and SARA] provides for the timely filing of cost recovery actions, to assure that evidence concerning liability and response costs is fresh and to provide a measure of finality to affected responsible parties. H.R.Rep. No. 253(I), 99th Cong., 1st Sess., at 15 (1985). 38 Defining such costs to identify those costs contained in a judgment upholds both principles. First, it ensures those responsible for environmental damage bear the costs for remedying the harmful conditions they created. An environmental cleanup takes many years to complete. To make the cleanup manageable, it is done in phases. If an initial cost recovery action triggered the statute of limitations for the recovery of any costs in future phases, PRPs could manipulate CERCLA to avoid paying their share. Indeed, by settling with the government for the soil remediation, the Capuanos received contribution protection for the soil remediation only. At the time of the soil remediation, the likelihood of a groundwater cleanup was unknown. Allowing the immunity the Capuanos received for the soil remediation to effectively shield them from contribution relating to future phases of the cleanup would provide the Capuanos protection for which they never paid—a result in conflict with the purpose of CERCLA. 39 Our interpretation of § 9613 also ensures that evidence concerning liability and response costs is fresh and provides a measure of finality to affected responsible parties. To limit such costs to those costs contained in a judgment results in a contribution action tracking the statute of limitations for cost recovery actions. In a cost recovery action, any actions after a declaratory judgment must be commenced no later than 3 years after the date of completion of all response action. 42 U.S.C. § 9613(g)(2)(B). Thus, the latest a judgment for the recovery of costs could occur is three years after the completion of a response action. A PRP would then have three years to commence a contribution action. The workings of 42 U.S.C. § 9613, therefore, ensure that evidence concerning liability and response costs is fresh.