Opinion ID: 2680424
Heading Depth: 3
Heading Rank: 3

Heading: Statute of Limitations: Contribution Claims

Text: CERCLA contribution claims are subject to a three‐year statute of limitations, which provides that “[n]o action for contribution for any response costs or damages may be commenced more than 3 years after . . . entry of a 22 judicially approved settlement with respect to such costs or damages.” 42 U.S.C. § 9613(g)(3)(B). The event triggering the beginning of the limitations period – “entry of a judicially approved settlement” – is the point of contention here. The district court, relying on the plain language of that provision, concluded that the statute of limitations began to run for the Everett Smelter Site on April 18, 2008, and for the MCMA on June 5, 2009. Asarco contends that the district court “committed legal error by ignoring the bankruptcy context in which the Everett Site and MCMA Site Agreements were negotiated and approved,” Appellant’s Br. 32‐33, and that the statute of limitations did not begin to run until the date its reorganization plan became effective. We disagree. We review the interpretation of federal statutes de novo. W. R. Grace & Co. – Conn. v. Zotos Int’l, Inc., 559 F.3d 85, 88 (2d Cir. 2009). “[O]ur obligation is to look to the plain language of the statute to effectuate the intent of Congress.” Id. The plain language of § 9613(g)(3)(B) contradicts Asarco’s contention that the statute of limitations did not begin to run until its Reorganization Plan was either approved by the bankruptcy court or became effective. See RSR Corp. v. Commercial Metals Co., 496 F.3d 552, 558 (6th Cir. 2007) (“[T]he statute of limitations for contribution actions runs from the ‘entry’ of the settlement, 42 23 U.S.C. § 9613(g)(3)(B), not from the date that each provision of that settlement takes effect.”). Pursuant to its authority under Federal Rule of Bankruptcy Procedure 9019(a), the bankruptcy court approved settlements for the Sites, which, by the terms of each settlement, resolved Asarco’s liability for the corresponding government entities for the response costs incurred at each site. Moreover, each settlement was effective once approved by the bankruptcy court and was not conditioned on the confirmation of a reorganization plan. We have no doubt that the bankruptcy court’s approval of the settlement falls within § 9613(g)(3)(B). Asarco contends that the bankurptcy court’s approval of the settlement agreements only resolved the disputed proofs of claim and did not immediately trigger CERCLA’s three‐year statute of limitations for direct contribution claims because “[n]o moneys could be paid at that time,” and because “it could not even be definitively stated how much would be paid at the time the Bankruptcy Court approved the two agreements.” Appellant’s Br. 33. Therefore, Asarco argues, the date that the reorganization plan became effective is the most logical triggering event for the statute of limitations because “[o]nly upon the [Reorganization] Plan’s judicial confirmation and effective date was the 24 contribution amount finally determined and payable,”id., in this case, December 9, 2009.8 It is a sufficient answer to say that Congress chose to tie the limitation period to the “entry of a judicially approved settlement” and not to “approval of [a reorganization] [p]lan.” We note as well, however, that under the terms of the statute a “judicially approved settlement” need only “resolve[]” a potentially responsible party’s liability, and not fix the settlement amount. See 42 U.S.C. § 9613(f)(3)(B). Such a resolution occurs when a potentially responsible party is released from CERCLA liability, which the Everett Smelter and MCMA settlements accomplished with respect to Asarco. See Niagara Mohawk, 596 F.3d at 125‐26; RSR Corp., 496 F.3d at 558. Moreover, given that the confirmation of a reorganization plan could plausibly take years, tying the statute of limitations to that date would do nothing to ensure the “principal purpose of limitations periods in this setting,” namely “ensur[ing] that the responsible parties get to the bargaining‐ and clean‐up‐table sooner rather than later.” RSR Corp., 496 F.3d at 559. Because the bankruptcy court approved a settlement as to the Everett 8 Asarco alternatively argues that the date of the bankruptcy court order confirming the Plan, November 13, 2009, could be the triggering event. We reject that argument too as having no basis in the statutory text. 25 Smelter Site on April 18, 2008, and as to the MCMA on June 5, 2009, we agree with the district court that the three‐year statute of limitations for the Everett Smelter expired on April 18, 2011, more than a year before this action was commenced on May 10, 2012. As to the MCMA, the three‐year statute of limitations expired on June 5, 2012 – after this action was filed, but before Asarco filed its first amended complaint on July 17, 2012. It was only in that amended complaint that Asarco first asserted a claim relating to the MCMA. Thus, as Asarco concedes, that claim is time‐barred unless it relates back to the filing of the initial complaint. See Fed. R. Civ. P. 15(c)(1)(B). Upon de novo review, we find no error in the district court’s determination that the MCMA claims do not relate back the original complaint. See Slayton v. Am. Exp. Co., 460 F.3d 215, 228 (2d Cir. 2006). For a newly‐added claim to relate back under Rule 15(c)(1)(B), “the basic claim must have arisen out of the conduct set forth in the original pleading.” Id. (internal quotation marks omitted). “[T]he central inquiry is whether adequate notice of the matters raised in the amended pleading has been given to the opposing party within the statute of limitations by the general fact situation alleged in the original pleading.” Id. (internal quotation marks omitted). 26 Here, Asarco’s original complaint dealt exclusively with the alleged contamination at the Everett Smelter, and contained no facts whatever about the MCMA settlement, any actions taken or costs incurred to remediate the MCMA site, or even any reference to the environmental contamination there. Indeed, the original complaint explained that the suit involved a claim “for costs incurred by Asarco at a former lead smelter and arsenic extraction facility . . . and surrounding areas located in Everett, Washington.” J.A. 19, ¶ 1. In contrast, the MCMA claims, as described in the Second Amended Complaint, arose as a result of “mining, ore concentrating, and transportation facilities located . . . in Snohomish County, Washington,” approximately 40 miles away from Everett. J.A. 71, ¶ 1. While the Second Amended Complaint alleges that the enterprises involved in the Everett and MCMA operations were “interrelated,” we cannot see how the original complaint would have given “adequate notice” that the MCMA claims, which were based on different conduct, in a different location, and attributable to different entities than the claims set forth in that pleading, would be at issue in the dispute. See Slayton, 460 F.3d at 228. Accordingly, Asarco’s direct contribution claims are time‐barred.