Opinion ID: 147650
Heading Depth: 1
Heading Rank: 5

Heading: Significantly Protectable Interest

Text: An applicant for intervention must have a significantly protectable interest, meaning that (1) it asserts an interest that is protected under some law, and (2) there is a `relationship' between its legally protected interest and the plaintiff's claims. Lockyer, 450 F.3d at 440-41 (citation and internal quotation marks omitted). Applicants here seek to intervene to protect their rights to contribution under CERCLA, and to ensure that the consent decree embodies a fair and reasonable allocation of liability. By its plain language, CERCLA provides to a nonsettling PRP a statutory right to contribution from other PRPs. Section 113(f)(1) provides that [a]ny person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title, during or following any civil action under section 9606 of this title or under section 9607(a) of this title. 42 U.S.C. § 9613(f)(1). Courts are instructed to resolve contribution claims by allocating response costs among liable parties using such equitable factors as the court determines are appropriate. Id. Section 113(f)(2), however, makes the right of contribution unavailable against any PRP that enters into an approved settlement with the United States or a State: A person who has resolved its liability to the United States or a State in an administrative or judicially approved settlement shall not be liable for claims for contribution regarding matters addressed in the settlement. Such settlement does not discharge any of the other potentially liable persons unless its terms so provide, but it reduces the potential liability of the others by the amount of the settlement. 42 U.S.C. § 9613(f)(2). Only two circuits, the Eighth and the Tenth, have considered whether non-settling PRPs may intervene in litigation that threatens to cut off their rights to contribution under § 113(f). Both circuits have held that such PRPs have interests sufficient to support intervention as of right. See United States v. Albert Inv. Co., Inc., 585 F.3d 1386 (10th Cir.2009); United States v. Union Elec. Co., 64 F.3d 1152 (8th Cir.1995). District courts have split on the question. Compare United States v. Acorn Eng'g Co., 221 F.R.D. 530, 534-39 (C.D.Cal.2004) (holding interest not legally sufficient to support intervention as of right), United States v. ABC Indus., 153 F.R.D. 603, 607-08 (W.D.Mich.1993) (same), and Arizona v. Motorola, Inc., 139 F.R.D. 141, 145-46 (D.Ariz.1991) (same), with United States v. Exxonmobil Corp., 264 F.R.D. 242, 246-48 (N.D.W.Va.2010) (holding interest legally sufficient); United States v. Acton Corp., 131 F.R.D. 431, 433-34 (D.N.J.1990) (same). We join the Eighth and Tenth Circuits in holding that non-settling PRPs have a significant protectable interest in litigation between the government and would-be settling PRPs. As non-settling PRPs, Applicants in this case are potentially liable for response costs under § 107(a) of CERCLA, 42 U.S.C. § 9607(a). Section 113(f)(2) provides that approval of a consent decree will cut off their contribution rights under § 113(f)(1). The proposed consent decree in the EPA's suit against the Group of 10 will therefore directly affect Applicants' interest in maintaining their right to contribution. See Union Elec., 64 F.3d at 1166-67. Further, because non-settling PRPs may be held liable for the entire amount of response costs minus the amount paid in a settlement, Applicants have an obvious interest in the amount of any judicially-approved settlement. See CERCLA § 107(a), 42 U.S.C. § 9607(a); CERCLA § 122(h)(4), 42 U.S.C. § 9622(h)(4). The larger the settlement amount, the smaller the remaining amount for which the non-settling PRPs may be liable. Appellees contend that § 113(f)(1) creates only a contingent or speculative interest in non-settling PRPs, and that Applicants' interest is therefore not significantly protectable. Some district courts have agreed. For example, the district court in United States v. Vasi determined that: Beazer's [the applicant's] potential right to contribution does not constitute a direct, substantial, legally protectable interest in the Vasi case. If anything, Beazer has a remote economic interest.... Beazer's right to contribution is at present a contingency, and not something which it owns. Beazer has not been declared a responsible party, nor have the Vasi defendants been found responsible parties. Beazer cannot demonstrate that a substantial interest will be impaired by the Vasi proceedings. Nos. 5:90-cv-1167, 5:90-cv-1168, 1991 WL 557609, at  (N.D.Ohio Mar. 6, 1991); see also Motorola, 139 F.R.D. at 146 (offering similar reasoning). We disagree. Although only parties found liable can be made to pay a contribution claim, the statute explicitly provides an interest in such a claim to any liable or potentially liable person. CERCLA § 113(f)(1). Moreover, the statute provides that the interest arises during or following a civil action under §§ 106 or 107 of CERCLA. Therefore, under the statute, a non-settling PRP need not have first been found liable in order for the contribution interest to arise. See Union Elec., 64 F.3d at 1167 ([N]o finding of liability is required, nor assessment of excessive liability, before the contribution interest arises.). These interests are sufficient to satisfy the requirements of Rule 24(a)(2) and § 113(i) that the interest be significantly protectable. CERCLA provides a contribution right and requires that consent decrees be substantively fair. See CERCLA § 113(f)(1); United States v. Montrose Chem. Corp. of Cal., 50 F.3d 741, 743 (9th Cir.1995) (noting proposed consent decrees must be fair, reasonable and consistent with the objectives of CERCLA). Thus, Applicants' interests in contribution and in a fair and reasonable allocation of liability are protected under some law. Lockyer, 450 F.3d at 440-41. There is a relationship between Applicants' legally protected interest and the plaintiff's claims, id., because the resolution of appellees' claims will have a direct effect on Applicants. See Donnelly v. Glickman, 159 F.3d 405, 410 (9th Cir.1998). Appellees would have us rely on arguments based on policy and legislative intent as a justification for concluding that non-settling PRPs' interests are not sufficient to support intervention. Some district courts have been persuaded by policy arguments against intervention, based upon the desirability of giving the EPA leverage to encourage early settlement. These arguments include the desire to ensure rapid and thorough cleanup of toxic waste sites, Acorn, 221 F.R.D. at 536; to avoid the expenditure of limited resources on protracted litigation, id. at 537; and to encourage early settlement by parties potentially responsible for cleanup costs, Motorola, 139 F.R.D. at 145. These courts believe that allowing intervention would be inconsistent with CERCLA's joint and several liability scheme and its policy favoring early settlements. Id. A non-settling PRP could refuse to engage in meaningful settlement negotiations until other parties reached a settlement, and only then seek to intervene, which could cause delays in implementation of the clean up ... and effectively thwart the settlement process. Vasi, 1991 WL 557609, at . There are, however, countervailing policy arguments in favor of treating all PRPs fairly, an interest that is itself embodied in the statutory scheme. Section 113(f)(1) confers a right to contribution on a non-settling PRP. Allowing non-settling PRPs to intervene in CERCLA litigation to represent their own interests helps ensure that the costs of [hazardous waste site] cleanup efforts [are] borne by those responsible for the contamination. Burlington N. & Santa Fe Ry. Co. v. United States, ___ U.S. ___, 129 S.Ct. 1870, 1874, 173 L.Ed.2d 812 (2009). Further, even if intervention is allowed, the approval of a settlement will still cut off the non-settling PRPs contribution interest, thus keeping intact the intent of § 113(f)(2) to induce prompt settlement. Union Elec., 64 F.3d at 1166. But we do not rely on arguments based on policy. We agree with the Eighth and Tenth Circuits that § 113(f) and 113(i) of CERCLA are unambiguous. See Albert, 585 F.3d at 1394-96; Union Elec., 64 F.3d at 1158 & n. 1, 1165-66 (citing Hazardous Waste Treatment Council v. South Carolina (In re Sierra Club), 945 F.2d 776, 779 (4th Cir.1991)). Section 113(f) confers a right of contribution. Like Rule 24(a)(2), § 113(i) confers a right to intervene on any person who claims an interest in the litigation, should the disposition of the action impair or impede that interest. Section 113(i) contains no restriction on intervention by non-settling PRPs. See Union Elec., 64 F.3d at 1165. Nor does the right of intervention in § 113(i) need to be restricted in order to give effect to the contribution provisions of § 113(f). Indeed, precisely because § 113(f)(2) cuts off the contribution right of non-settling PRPs, § 113(i) gives them the right to intervene upon timely application. We therefore hold that Applicants have significant protectable interests that support intervention as of right.