Opinion ID: 785138
Heading Depth: 2
Heading Rank: 2

Heading: Neville's Defenses on the Merits

Text: 35 Neville raised an affirmative defense — waiver and estoppel — in the district court. The argument was that Neville cannot be liable under CERCLA for the costs of overseeing the clean-up incurred by the Department because the Department had promised that it would not sue Neville for full recovery costs if Neville conducted the research, planning, and clean-up of the site. The district court ruled that Neville could not assert equitable defenses to a CERCLA recovery action. We review the grant of summary judgment de novo. United States v. Chapman, 146 F.3d 1166, 1169 (9th Cir.1998). 36 CERCLA section 107(a) and (b), 42 U.S.C. § 9607(a) and (b), allow for only three defenses to CERCLA liability. A covered person is liable under the statute subject only to the defenses set forth in subsection (b) of this section. 42 U.S.C. § 9607(a). Subsection (b) lists three defenses (1) an act of God; (2) an act of war; [and] (3) an act or omission of a third party.... 42 U.S.C. § 9607(b)(1)-(3). In Levin Metals Corp. v. Parr-Richmond Terminal Co., 799 F.2d 1312, 1316-17 (9th Cir.1986), we suggested that these defenses were exclusive. 37 Congress imposed strict, but not absolute, liability under CERCLA. It provided defenses to liability for causation solely by an act of God, an act of war, or acts or omissions of a third party.... Consequently, in order to state a claim for declaration of nonliability, the declaratory judgment plaintiff must base its claim of nonliability on one or more of the statutory affirmative defenses. 38 Id. (emphasis added) (internal quotation marks and citations omitted). 39 Every court of appeals that has considered the precise question whether § 9607 permits equitable defenses has concluded that it does not, as the statutory defenses are exclusive. See Gen. Elec. Co. v. Litton Indus. Automation Sys., Inc., 920 F.2d 1415, 1418 (8th Cir.1990) (holding that CERCLA does not provide an unclean hands defense) (questioned on other grounds in Key Tronic Corp. v. United States, 511 U.S. 809, 114 S.Ct. 1960, 128 L.Ed.2d 797 (1994)); see also Blasland, Bouck & Lee, Inc. v. City of North Miami, 283 F.3d 1286, 1304 (11th Cir.2002) (holding that CERCLA bars equitable defenses); Velsicol Chem. Corp. v. Enenco, Inc., 9 F.3d 524, 530 (6th Cir.1993) (same); Town of Munster v. Sherwin-Williams Co., 27 F.3d 1268, 1270 (7th Cir.1994) (same). Following the implication of Levin Metals and the express holdings of these cases from other circuits, we conclude that the three statutory defenses are the only ones available, and that traditional equitable defenses are not. The district court was correct, therefore, in holding that Neville could not raise equitable defenses to liability under CERCLA. 40 Neville argues separately that equitable defenses are at least relevant to the amount of recovery that the Department receives. Even if it is liable for some of the oversight costs, Neville asserts, that amount is limited by equitable consideration that the Department's implied promise to pursue recovery of only a limited activity fee, rather than the Department's actual recovery-oversight costs. Neville cites as support for this argument numerous cases in which courts considered equitable factors in allocating costs in suits for contribution. See, e.g., Alcan-Toyo Am., Inc., v. N. Ill. Gas Co., 881 F.Supp. 342, 346-47 (N.D.Ill.1995); Akzo Coatings, Inc. v. Aigner Corp., 909 F.Supp. 1154, 1161-62 (N.D.Ind.1995); New York v. Almy Bros., 971 F.Supp. 69, 73 (N.D.N.Y. 1997). 41 Suits for contribution, however, are entirely distinct under the statute from suits for recovery of costs. The former is governed by 42 U.S.C. § 9613(f)(1), which explicitly states, In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate. The provisions of CERCLA governing suits for recovery of costs, 42 U.S.C. §§ 9607(a) and 9613(g)(2), make no such reference to equitable factors. Also, the critical distinction between [suits for contributions and suits for cost recovery] is that under § 107 [42 U.S.C. § 9607(a)], the court merely determines whether the party is jointly and severally liable, without regard to the amount of fault; but under § 113 [42 U.S.C. § 9613(f)(1)], the court also divides the fault of the parties, using equitable factors. Catellus Dev. Corp. v. L.D. McFarland Co., 910 F.Supp. 1509, 1514 (D.Or.1995). California is not bringing suit here for contribution, so the specific language allowing the court to consider equitable factors when apportioning contribution is inapplicable. 42 Neville makes one last defensive argument: The Department may not sue for its recovery costs, Neville contends, because those costs were not consistent with the national contingency plan. Whether a party can recover certain costs under § 9607 depends on whether or not those costs were incurred consistently with the national contingency plan. 42 U.S.C. § 9607(a)(4)(A) (providing that a covered person who violates CERCLA shall be liable for ... all costs of removal or remedial action incurred by the ... State ... not inconsistent with the national contingency plan ) (emphasis added). The national contingency plan is promulgated by the EPA and provide[s] the organizational structure and procedures for preparing and responding to ... releases of hazardous substances. 40 C.F.R. § 300.1. See also Wash. St. Dep't of Transp. v. Wash. Natural Gas Co., 59 F.3d 793, 799 (9th Cir.1995) (WSDOT). To show that the Department's actions were inconsistent with the national contingency plan, the burden is on Neville to show that the Department acted in an arbitrary and capricious manner in choosing a particular response action. See id. at 802 (citing United States v. Hardage, 982 F.2d 1436, 1442 (10th Cir.1992)). When a state is seeking recovery of response costs, consistency with the national contingency plan is presumed. Id. at 799-800. 43 Neville has provided no evidence that the Department acted arbitrarily and capriciously in choosing a particular response action to respond to a hazardous waste site. Hardage, 982 F.2d at 1442 (emphasis added). Accord WSDOT, 59 F.3d at 802 (To prove that a response action of the EPA was inconsistent with the NCP, a defendant must prove that the EPA's response action was arbitrary and capricious.) (emphasis added). In fact, Neville does not challenge any response action taken by the Department. Neville challenges instead the Department's attempt to recover the full oversight costs after suggesting that, should Neville cooperate and conduct the clean-up itself, the Department would only require Neville to pay an activity fee. This change in policy and pursuit of the full costs of oversight cannot be inconsistent with the national contingency plan, as the national contingency plan does not direct the state to limit its recovery of response costs in any way. See 40 C.F.R. §§ 300.1 et seq. The district court, therefore, did not err by finding that Neville was responsible for all the Department's response costs.