Opinion ID: 4195356
Heading Depth: 4
Heading Rank: 2

Heading: remediating “any contamination in

Text: groundwater, surface water and soils, and the ore storage areas”; (iii) taking actions that “will result in the remediation of contaminated media”; and (iv) “provid[ing] the minimum level of exposure to contaminants and the maximum reduction in exposure.” The agreement’s requirement that Asarco take various “corrective measures” is particularly noteworthy because RCRA expressly defines “corrective action” as a type of “response” action: Under RCRA, EPA “may issue an order requiring corrective action or such other response measure as [it] deems necessary to protect human health or the environment.” 7 42 U.S.C. § 6928(h) (emphasis added). In short, we hold that the 1998 RCRA Decree included response actions for purposes of bringing a CERCLA § 113(f)(3)(B) action. Asarco Did Not “Resolve Its Liability” Under the 1998 RCRA Decree The third condition necessary for the 1998 RCRA Decree to have triggered Asarco’s ability to bring a § 113(f)(3)(B) contribution action is that the agreement “resolved its liability to the United States or [Montana] for some or all of” its response action or the “costs of such 7 We do not suggest that other authorities that lack the term “response” could not support a § 113(f)(3)(B) contribution action. 22 ASARCO V. ATLANTIC RICHFIELD action” in the 1998 RCRA Decree. See 42 U.S.C. § 9613(f)(3)(B). Asarco argues that it did not, and therefore the statute of limitations to bring the instant action did not expire three years later, in 2001. 1. Atlantic Richfield contends that Asarco waived this argument by not raising it in the district court, and that we should therefore not consider it. Atlantic Richfield is correct that Asarco failed to raise this precise issue below. Waiver, however, is not an absolute bar to our consideration of arguments on appeal. See In re Mercury Interactive Corp. Sec. Litig., 618 F.3d 988, 992 (9th Cir. 2010). We may reach an otherwise waived issue in three circumstances: (i) to prevent a miscarriage of justice or preserve the integrity of the judicial process, (ii) when a new issue arises on appeal because of a change in the law, and (iii) “‘when the issue presented is purely one of law and either does not depend on the factual record developed below, or the pertinent record has been fully developed.’” Id. (quoting Bolker v. Comm’r, 760 F.2d 1039, 1042 (9th Cir. 1985)). Determining whether Asarco “resolved its liability” under the 1998 RCRA Decree falls into the first and third categories. If Asarco did not, as it contends, resolve its liability under the 1998 RCRA Decree, then justice would not be served by upholding the district court’s decision. The correct interpretation of the phrase “resolved its liability” is also a pure question of law. While deciding whether Asarco “resolved its liability” requires application of the law to the particular terms of the 1998 RCRA Decree, those terms are not in dispute and the record requires no further development. Moreover, deciding this issue will bring certainty to the state of the law in the Ninth Circuit and ASARCO V. ATLANTIC RICHFIELD 23 thereby “‘preserve the integrity of the judicial process.’” Id. We therefore proceed to the merits. 2. As we did in Part IV.A, supra, we begin our analysis with the plain text of the statute. Hughes, 525 U.S. at 438. Where Congress has not defined specific statutory terms, we look to their ordinary meanings. Carcieri v. Salazar, 555 U.S. 379, 388 (2009). The commonly understood meaning of “resolve” is “to deal with successfully,” “reach a firm decision about,” or to “work out the resolution of” something. Resolve, Merriam-Webster Online Dictionary, https://www.merriam-webster.com/dictionary/resolve (last accessed July 13, 2017). Black’s Law Dictionary similarly defines the term to mean “to find an acceptable or even satisfactory way of dealing with (a problem or difficulty).” Resolve, Black’s Law Dictionary 1504 (10th ed. 2014). Implicit in these definitions is an element of finality. If the parties reach a “firm decision about” liability, then the question of liability is not susceptible to further dispute or negotiation. As the Seventh Circuit explained in interpreting the same statutory provision, “[a]n issue which is ‘resolved’ is an issue which is decided, determined, or settled— finished, with no need to revisit.” Bernstein, 733 F.3d at 211. “To meet the statutory trigger for a contribution action under § 9613(f)(3)(B), the nature, extent, or amount of a PRP’s liability must be decided, determined, or settled, at least in part, by way of agreement with the EPA.” Id. at 212 (emphasis in original). But even if an agreement decides with finality the scope of a PRP’s legal exposure and obligations, is its liability “resolved” where the government reserves certain rights, or where the party refuses to concede liability? For example, the statutory provision setting forth EPA’s settlement 24 ASARCO V. ATLANTIC RICHFIELD authority allows EPA to include a covenant not to sue in a settlement agreement. 42 U.S.C. § 9622(f). But such covenant must be conditioned on a PRP’s completed performance. Section 122(f)(3) provides that [a] covenant not to sue concerning future liability to the United States shall not take effect until the President certifies that remedial action has been completed in accordance with the requirements of this chapter at the facility that is the subject of such covenant. Id. § 9622(f)(3). EPA must therefore preserve its ability to bring an enforcement action even after the settlement agreement is executed. This requirement is reflected in EPA’s model CERCLA consent decree, which provides that “covenants not to sue are conditioned upon the satisfactory performance by Settling Defendants of their obligations under this Consent Decree.” Superfund Program; Revised Model CERCLA RD/RA Consent Decree, 60 Fed. Reg. 38,817, 38,833 (July 28, 1995). Similarly, EPA has, in the past, included in settlement agreements releases from liability that are conditioned on a PRP’s completed performance. See, e.g., Bernstein, 733 F.3d at 212–13; Florida Power Corp. v. FirstEnergy Corp., 810 F.3d 996, 1004 (6th Cir. 2015); RSR, 496 F.3d at 558. Furthermore, parties often expressly refuse to concede liability under a settlement agreement, even while assuming obligations consistent with a finding of liability. The Sixth and Seventh Circuits have decided that these reservations of rights tip the scales against a finding that a party has resolved its liability. In Bernstein, the Seventh Circuit held that settling PRPs had not resolved their liability ASARCO V. ATLANTIC RICHFIELD 25 where (i) the agreement expressly stated that the PRPs had not conceded liability; (ii) EPA reserved its right to “seek legal [] or equitable relief to enforce the terms of the [agreement]”; and (iii) EPA only “conditionally promised to release the [PRPs] from liability” upon the PRPs’ “complete performance, as well as certification thereof.” 733 F.3d at 212–13 (emphasis in original). In rejecting the PRPs’ argument that the agreement’s covenant not to sue amounted to the requisite resolution, the court reasoned that because the release from liability was conditioned on completed performance, the covenant could only take effect when “performance was complete.” Id. at 212. The Sixth Circuit conducted a similar analysis in ITT Industries. 506 F.3d 452. The court found no resolution of liability where (i) EPA reserved its right to bring legal action for failure to comply with the agreement or for past, present, or future response costs; and (ii) the agreement expressly stated that the PRP did not concede liability. Id. at 459–60. And more recently, in Florida Power, the Sixth Circuit found no resolution where (i) EPA reserved its right to bring a CERCLA enforcement action for violations of the agreement; (ii) the agreement expressly stated that the PRP “shall have resolved [its] liability to EPA” only “[f]ollowing satisfaction of the requirements of this Consent Order”; (iii) the agreement provided that “participation of [the PRP] in this Order shall not be considered an admission of liability”; and (iv) the agreement was not titled an “administrative settlement.” 810 F.3d at 1004. By comparison, in Hobart Corp. v. Waste Management of Ohio, Inc., 758 F.3d 757 (6th Cir. 2014), the Sixth Circuit held that a PRP had resolved its liability where the agreement (i) stated that, “for purposes of Section 113(f)(3)(B) . . . [the PRPs] have, as of the Effective 26 ASARCO V. ATLANTIC RICHFIELD Date, resolved their liability to the United States”; (ii) immunized the settling parties from contribution actions as of the Effective Date; (iii) included the title, “Administrative Settlement Agreement”; and (iv) contained a covenant prohibiting EPA from suing under CERCLA “[i]n consideration of the actions that will be performed and the payments that will be made by [the PRPs] under the terms of th[e] Settlement Agreement.” Id. at 768–69 (emphasis added and omitted). Yet, as pointed out by the dissent in Florida Power, the agreement in Hobart also included a broad reservation of rights, specifying that “nothing herein shall prevent U.S. EPA . . . from taking other legal or equitable action as it deems appropriate or necessary.” Florida Power, 810 F.3d at 1016 (Suhrheinrich, J., dissenting) (internal quotation marks omitted). Similar provisions precluded a finding that the parties had resolved their liability in ITT and Florida Power, thus creating what appears to be an inconsistent approach within the Sixth Circuit. Further complicating the law in the Sixth Circuit is an earlier case, RSR, in which the court held that the PRP’s promise of future performance “resolved [its] liability to the United States” because RSR “agree[d] to assume all liability (vis-à-vis the United States) for future remedial actions.” 496 F.3d at 558 (emphasis in original). But, as noted again by the dissent in Florida Power, the agreement at issue in RSR also included a covenant not to sue conditioned on a Certification of Completion of Remediation Action issued by EPA. Florida Power, 810 F.3d at 1012 (Suhrheinrich, J., dissenting); see id. (contemplating that the covenant might “not take effect until the remedial action was complete”). The RSR court indicated that a promise of future performance in an agreement suffices to constitute resolution of liability. See 496 F.3d at 558. ASARCO V. ATLANTIC RICHFIELD 27 We adopt a meaning of the phrase “resolved its liability” that falls somewhere in the middle of these various cases. We conclude that a settlement agreement must determine a PRP’s compliance obligations with certainty and finality. See Bernstein, 733 F.3d at 211–12 (“An issue which is ‘resolved’ is an issue which is decided, determined, or settled—finished, with no need to revisit.”); see also Florida Power, 810 F.3d at 1002–03. However, we disagree with the Sixth and Seventh Circuits’ holdings in Florida Power and Bernstein that the government must divest itself of its ability to enforce an agreement’s terms. If a covenant not to sue conditioned on completed performance negated resolution of liability, then it is unlikely that a settlement agreement could ever resolve a party’s liability. That is because CERCLA prevents a covenant not to sue from “tak[ing] effect until the President certifies that remedial action has been completed . . . .” 42 U.S.C. § 9622(f)(3); see 60 Fed. Reg. at 38,833 (model consent decree, conditioning a covenant not to sue on completed performance). Nor do we agree—as the court held in Bernstein—that a release from liability conditioned on completed performance defeats “resolution.” An agreement may “resolve[]” a PRP’s liability once and for all without hobbling the government’s ability to enforce its terms if the PRP reneges. This reasoning applies equally to a covenant not to sue conditioned on completed performance. 8 It is also consistent 8 Bernstein held that an agreement containing a covenant not to sue conditioned on completed performance could give rise to a § 113(f)(3)(B) contribution action after performance was completed. 733 F.3d at 204. The court reasoned that once the condition was satisfied, the PRP had resolved its liability. Id. But such an interpretation renders another part of § 113—the statute of limitations provision—anomalous. The statute of limitations provision requires a PRP to bring a contribution action “no more than 3 years after . . . entry 28 ASARCO V. ATLANTIC RICHFIELD with the 1986 CERCLA Amendments. A House of Representatives Committee report expresses Congress’ intent to encourage settlements by creating a right to contribution. H.R. Rep. 99–253, pt. 1, at 80. That same report criticizes EPA’s inclusion of releases from liability in settlement agreements. Id. at 102–03 (“[T]he Committee specifically notes its disapproval of the releases granted in the settlements entered into in the Seymore Recy[c]ling case and the Inmont case and expects and intends that any compara[b]le releases that might be presented for court approval would be rejected as not in the public interest.”). Indeed, the report goes one step further, expressing an intent to “authorize[]” EPA “to include in an agreement . . . any provisions allowing future enforcement action . . . that [EPA] determines are necessary and appropriate to assure protection of public health, welfare, and the environment.” Id. at 102 (emphasis added). Having sung the praises of settlements providing for a right of contribution in one part of the report, it would make little sense for Congress to encourage EPA to craft settlements in a way that nullifies that right in another. of a judicially approved settlement . . . .” 42 U.S.C. § 9613(g)(3)(B) (emphasis added). Thus, under the Seventh Circuit’s approach, a party’s contribution action could accrue after the statute of limitations had already expired. For example, if a settlement agreement included a covenant not to sue conditioned on completed performance, and the cleanup took four years, then—in the Seventh Circuit’s view—the PRP would be precluded from ever bringing a contribution action, even though it (eventually) satisfied the requirements for doing so. And this would necessarily be the case because, as discussed, CERLCA requires that a covenant not to sue be conditioned on completed performance. See 42 U.S.C. § 9622(f)(3). Where possible, we avoid construing statutes in a way that results in such internal inconsistencies. Boise Cascade Corp. v. EPA, 942 F.2d 1427, 1432 (9th Cir. 1991). ASARCO V. ATLANTIC RICHFIELD 29 Moreover, unlike the court in Florida Power, we conclude that it matters not that a PRP refuses to concede liability in a settlement agreement. Congress’ intent in enacting § 113(f)(3)(B) was to encourage prompt settlements that establish PRPs’ cleanup obligations with certainty and finality. A PRP’s refusal to concede liability does not frustrate this objective so long as the PRP commits to taking action. Indeed, requiring a PRP to concede liability may discourage PRPs from entering into settlements because doing so could open the PRP to additional legal exposure. See 42 U.S.C. § 9607(a) (setting forth obligations of liable PRPs). In sum, an examination of § 113(f)(3)(B)’s plain language, with due consideration for CERCLA’s structure and purpose, leads us to the conclusion that a PRP “resolve[s] its liability” to the government where a settlement agreement decides with certainty and finality a PRP’s obligations for at least some of its response actions or costs as set forth in the agreement. A covenant not to sue or release from liability conditioned on completed performance does not undermine such a resolution, nor does a settling party’s refusal to concede liability. Whether this test is met depends on a case-by-case analysis of a particular agreement’s terms.