Opinion ID: 4458383
Heading Depth: 2
Heading Rank: 3

Heading: Resolving the overlap

Text: Cost recovery and contribution are “similar and somewhat overlapping remed[ies].” Key Tronic Corp. v. United States, 511 U.S. 809, 816 (1994). That overlap became an issue after the Supreme Court’s decision in Atlantic Research, which held that polluters could bring both kinds of claims against one another. 551 U.S. at 141. Since then, we and our sister circuits have clarified the relationship between the two kinds of claims. 1. The price of contribution-claim immunity. A polluter who settles its CERCLA liability with the federal government or a state government enjoys immunity under § 9613(f)(2) from contribution claims. In Agere Systems, we held that if a polluter 5 is immune from contribution claims, it cannot bring costrecovery claims. Agere Sys., Inc. v. Advanced Envtl. Tech. Corp., 602 F.3d 204, 229 (3d Cir. 2010). Instead, it can bring only contribution claims. Id. Six other circuits have reached this issue. All agree. See Whittaker Corp. v. United States, 825 F.3d 1002, 1007 & n.4 (9th Cir. 2016); Hobart Corp. v. Waste Mgmt. of Ohio, Inc., 758 F.3d 757, 768 (6th Cir. 2014); Bernstein v. Bankert, 733 F.3d 190, 202 (7th Cir. 2013); Solutia, Inc. v. McWane, Inc., 672 F.3d 1230, 1236–37 (11th Cir. 2012) (per curiam); Morrison Enters. v. Dravo Corp., 638 F.3d 594, 603 (8th Cir. 2011); Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., 596 F.3d 112, 127–28 (2d Cir. 2010). 2. Why the Agere Systems rule is necessary. An example may help show (a) the normal interplay between cost-recovery and contribution claims, (b) why contribution-claim immunity under § 9613(f)(2) encourages CERCLA settlements, and (c) how the Agere Systems rule helps apportion cleanup costs equitably by keeping polluters from using their immunity as both sword and shield. Imagine a cleanup of comic proportions: Years ago, Wayne Enterprises and LexCorp ran a chemical factory together. After it shut its doors, the site remained contaminated with hazardous substances. Now, Gotham City owns the vacant, polluted brownfield. Responding to mounting public pressure, the City spends $1 billion cleaning up the site. Then it sues both companies for cost recovery. 6 In a typical CERCLA lawsuit, this is how cost-recovery and contribution claims would interact: because cost-recovery actions impose joint-and-several liability, both companies would theoretically be on the hook for 100% of the billion-dollar liability. Trainer Custom, 906 F.3d at 90. While joint-and-several liability helps compensate fully those who clean up pollution, it sometimes leads to inequitable results. Fortunately, CERCLA has an answer: the two companies could cross-claim for contribution and ask the court to split the bill between them in proportion to their percentages of fault. See Atl. Research, 551 U.S. at 139–40 (citing 42 U.S.C. § 9613(f)(1)). But litigation is costly and time consuming. So CERCLA encourages polluters to settle with the government to get cleanups started sooner. Contribution-claim immunity under § 9613(f)(2) promotes those efficient settlements. Imagine instead that the Environmental Protection Agency starts an enforcement action, claiming that LexCorp is responsible for $400 million of the cleanup costs at the Gotham chemical factory. LexCorp’s lawyers negotiate down and settle for just $100 million. Afterwards, Wayne Enterprises cannot bring a contribution action and ask the court to allot more than $100 million in cleanup costs to LexCorp. If it could, it would undermine the finality of CERCLA settlements and thus discourage them. Cf. Atl. Research, 551 U.S. at 141 (noting that “settlement carries the inherent benefit of finally resolving liability”). Instead, contribution-claim immunity under § 9613(f)(2) protects settlements like LexCorp’s. Without the Agere Systems rule, however, settling polluters could wield this immunity offensively to escape liability. If 7 LexCorp settles with the government for $100 million and then sues Wayne Enterprises for cost recovery, LexCorp could impose 100% of its liability on Wayne Enterprises through jointand-several liability. Agere Sys., 602 F.3d at 228. Worse still, because LexCorp has § 9613(f)(2) immunity, Wayne Enterprises could not counterclaim for contribution to apportion costs equitably. So LexCorp could recoup its $100 million in settlement costs even though it is “actually responsible for, and ha[s] stipulated that [it is] responsible for, a significant portion of the contamination.” Id. at 228. So if a polluter like LexCorp who is immune from contribution claims could bring a cost-recovery action, it could use that immunity to “ ‘eschew equitable apportionment,’ ” impose “the harshness of joint and several liability” against other polluters, and shift its own liability in the process. Id. at 228–29 (quoting Atl. Research, 551 U.S. at 138). To avoid this “perverse result,” we held in Agere Systems that a polluter who has contribution-claim immunity under § 9613(f)(2) cannot bring a cost-recovery claim. Id. Instead, it can bring only a contribution claim. Id. at 229.