Opinion ID: 213952
Heading Depth: 2
Heading Rank: 2

Heading: Well-D

Text: Two provisions of [CERCLA] §§ 107(a) and 113(f)allow private parties to recover expenses associated with cleaning up contaminated sites. United States v. Atl. Research Corp., 551 U.S. 128, 131, 127 S.Ct. 2331, 168 L.Ed.2d 28 (2007). Though complementary, §§ 107(a) and 113(f) provide two `clearly distinct' remedies, id. at 138, 127 S.Ct. 2331, to persons in different procedural circumstances, id. at 139, 127 S.Ct. 2331 (quotation omitted). Section 107(a)(4)(B) permits a private party who has voluntarily incurred costs cleaning up a site for which it may be held liable to recover necessary response costs from another liable party through a direct recovery action. See id. at 133-34, 127 S.Ct. 2331, aff'g Atl. Research Corp. v. United States, 459 F.3d 827 (8th Cir.2006). Section 113(f), enacted after § 107 as part of the Superfund Amendments and Reauthorization Act of 1986 (SARA), Pub.L. No. 99-499, 100 Stat. 1613 (1986), authorizes one [potentially responsible party] to sue another for contribution in certain circumstances. Id. at 132, 127 S.Ct. 2331. Section 113(f)(1) allows a person to seek contribution from any other person who is liable or potentially liable under § 107(a) during or following a civil action under §§ 106 or 107. Section 113(f)(3)(B) authorizes [a] person who has resolved its liability to the United States or a State for some or all of a response action or for some or all of the costs of such action in an administrative or judicially approved settlement to seek contribution from any person who has not so resolved its liability. The term contribution has its traditional meaning of a tortfeasor's right to collect from others responsible for the same tort after the tortfeasor has paid more than his or her proportionate share, the shares being determined as a percentage of fault. Atl. Research, 551 U.S. at 138, 127 S.Ct. 2331 (quoting Black's Law Dictionary 353 (8th ed.2004)). The right to contribution under § 113(f)(1) is contingent upon an inequitable distribution of common liability among liable parties. Id. at 139, 127 S.Ct. 2331. The right to contribution under § 113(f) is more limited than the right to recover costs under § 107(a). See Atl. Research, 459 F.3d at 832. A person seeking contribution under § 113(f) may be subject to the equitable allocation of response costs, see § 113(f)(1), and may not recover from previously settling parties, see § 113(f)(2). Such claims are also subordinate to the rights of the United States or a State, see § 113(f)(3)(C), and subject to a shorter limitation period than cost-recovery claims, see § 113(g)(2)-(3). To ensure the continued vitality of the precise and limited right to contribution Congress set forth in § 113, we have held the right to bring a cost-recovery action under § 107 is available to parties who have incurred necessary costs of response, but have neither been sued nor settled their liability under §§ 106 or 107. Atl. Research, 459 F.3d at 835. [L]iable parties which have been subject to §§ 106 or 107 enforcement actions are still required to use § 113. Id. at 836-37. See also, Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., 596 F.3d 112, 128 (2d Cir.2010) (holding that allowing a liable party whose claims fit § 113(f) to proceed under § 107(a) would in effect nullify the SARA amendment and abrogate the requirements Congress placed on contribution claims under § 113); ITT Indus., Inc. v. BorgWarner, Inc., 506 F.3d 452, 458 (6th Cir.2007) (To maintain the vitality of § 113(f), however, [potentially responsible parties] who have been subject to a civil action pursuant to §§ 106 or 107 or who have entered into a judicially or administratively approved settlement must seek contribution under § 113(f).). In affirming our decision in Atlantic Research, the Supreme Court noted the potential for overlap between §§ 107(a) and 113(f), but declined to decide whether a liable party sustaining expenses pursuant to a consent decree following a suit under §§ 106 or 107(a) could recover such compelled costs under § 107(a), § 113(f), or both. Atl. Research, 551 U.S. at 139 n. 6, 127 S.Ct. 2331. We necessarily reach that issue in these appeals, and hold that § 113(f) provides the exclusive remedy for a liable party compelled to incur response costs pursuant to an administrative or judicially approved settlement under §§ 106 or 107. See Atl. Research, 459 F.3d at 830 n. 4 (explaining our holding in Dico, Inc. v. Amoco Oil Co., 340 F.3d 525, 531 (8th Cir.2003), that a liable party cannot bring an action under § 107 remains viable for those parties which still have recourse to relief under § 113).
The district court determined Morrison could not use § 107(a) to recover response costs for removing TCE at Well-D because Morrison was a liable party that had been subject to a § 107 enforcement action as evidenced by the amended 1991 AOC, the 1995 AOC amendments, the 1996 AOC, and the 2008 consent decree, which obligated Morrison to operate Well-D to remove TCE and other hazardous substances. Morrison contends the district court erred in finding Morrison could not bring a cost-recovery action because, in Morrison's view, it voluntarily cleaned up TCE contamination for which Dravo was legally liable. Denying any causal connection to releases of TCE anywhere in the Site, Morrison attempts to analogize its compelled removal of TCE at Well-D to the plaintiff's voluntary clean up of hazardous substances in Atlantic Research. According to Morrison, [b]y `voluntarily,' the Supreme Court [in Atlantic Research ] meant actions taken `without any establishment of liability to a third party,' such as through a judgment or court order. See Atl. Research, 551 U.S. at 139, 127 S.Ct. 2331. Morrison's understanding of Atlantic Research and its application here is incorrect. Morrison ignores the terms of the AOCs by which it is bound. Unlike the voluntary plaintiff in Atlantic Research, which had never been subject to an action under §§ 106 or 107, Morrison has been sued under § 107 for releases and potential releases of hazardous substances at the FAR-MAR-CO Subsite and entered administrative settlements to resolve its liability. Notwithstanding Morrison's assertions to the contrary, the 1996 AOC specifically obligates Morrison to operate Well-D to remove TCE from contaminated ground water as a liable party under § 107(a). Morrison is subject to penalties if it fails to do so. Response costs incurred pursuant to such administrative settlements following a suit under § 106 or § 107(a) are not incurred voluntarily. See Atl. Research, 551 U.S. at 139 n. 6, 127 S.Ct. 2331. The district court correctly concluded Morrison could not maintain a cost-recovery action under § 107(a).
The City likewise did not voluntarily incur response costs operating Well-D. As thoroughly explained by the district court, the City was subject to enforcement under §§ 106 and 107 and resolved its liability to the federal government in administrative and judicially approved settlements, including the 1992 AOC, the 1998 consent decree, the 2004 AOC, and the 2007 consent decree, culminating in the operation of Well-D to remediate contamination in the City's ground water. Analyses of the City's ground water between 1985 and 1995 revealed contamination down gradient of the North Landfill Subsite caused by the release of TCE. Noting the past, present or potential migration of hazardous substances currently located at or emanating from the Subsite, constitutes actual and/or threatened `releases,' the 1992 AOC obligated the City, as a liable party, to perform certain remedial actions at the site. The 1998 consent decree and the 2004 AOC also address the City's liability for migrating TCE. By the City's own account, the 2007 consent decree requires the City to finance and perform the work necessary to implement the specified remedies, including continued operation of the Well-D System to contain the migration of TCE plumes. The City has not operated Well-D voluntarily. The City contends its participation in settlements at the North Landfill Subsite does not preclude a cost-recovery action against Dravo under § 107(a). In support of this assertion, the City cites three cases, W.R. Grace & Co.-Conn. v. Zotos Int'l, Inc., 559 F.3d 85, 91-93 (2d Cir.2009), Kotrous v. Goss-Jewett Co. of N. Cal., Inc., 523 F.3d 924, 934 (9th Cir.2008), and Schaefer v. Town of Victor, 457 F.3d 188, 191-92, 201-02 (2d Cir.2006), each permitting a § 107 action. We agree with the district court that each of the City's cases is distinguishable. Unlike the City, none of the plaintiffs in the cited cases had resolved its § 107 liability, nor entered into administrative or judicially approved settlements within the meaning of § 113(f). See W.R. Grace, 559 F.3d at 91-93; Kotrous, 523 F.3d at 927; Schaefer, 457 F.3d at 191-92. This difference deprives those cases of any persuasive value. The City contends the district court erred in focusing on the remedy, Well-D, rather than Dravo's liability for contamination originating at the Colorado Avenue Subsite, which the City stresses is a separate facility under CERCLA. According to the City, each of the settlements the City entered addressed its liability at the North Landfill Subsite, not the Colorado Avenue Subsite, making the City's construction, operation and maintenance of Well-D to clean up contamination from the Colorado Avenue Subsite voluntary. The City's focus on specific facilities within the Site is entirely too narrow given CERCLA's comprehensive remedial purpose and broad reach. See, e.g., Control Data Corp. v. S.C.S.C. Corp., 53 F.3d 930, 936 (8th Cir.1995). The term facility includes any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come[s] to be located. 42 U.S.C. § 9601(9)(B). Under § 107(a), [l]iability is strict and is typically joint and several. United States v. Hercules, Inc., 247 F.3d 706, 715 (8th Cir.2001). [O]nce a party is liable [under § 107(a)], it is liable for its share, as determined by [§ 113(f)], of `any' and all response costs, not just those costs `caused' by its release. Control Data, 53 F.3d at 936. Some of the releases of hazardous substances for which the City and Dravo are liable may have initially originated at different subsites, but both are responsible for the release of TCE into the City's ground water within the Site. Because the TCE contamination from the North Landfill Subsite and the Colorado Avenue Subsite has migrated to the FAR-MAR-CO Subsite, the district court correctly concluded the City must use § 113(f) to allocate responsibility for response costs incurred operating Well-D to remove TCE accumulating there.
In an argument closely related to Morrison's claim it voluntarily incurred response costs for TCE, Morrison contends it could not seek contribution from Dravo pursuant to § 113(f) because Morrison and Dravo released different contaminants at different facilities. In Morrison's view, because Morrison has never been subject to liability under § 107 for response costs necessary to address TCE from the Colorado Avenue Subsite or anywhere else, Morrison does not, as a matter of law, share common liability with Dravo necessary to support an action under § 113(f). The City similarly argues it does not have a right of contribution against Dravo because the City is not liable for hazardous substances released at the Colorado Avenue Subsite. According to the City, neither the AOCs and consent decrees by which it is bound, nor its operation of Well-D create any common liability with Dravo because [c]ommon liability arises out of conduct leading to an indivisible harmnot a single solution (i.e. the Well D System) to multiple, divisible harms. In its amicus brief, the United States asserts appellants' interpretation fundamentally misconstrue[s] liability under CERCLA. We agree. Under CERCLA, if a responsible party . . . releases hazardous materials into the environment, and that release `causes the incurrence of response costs,' then the party is liable. . . . for ` any other necessary cost of response incurred by any other person consistent with the national contingency plan.' Control Data, 53 F.3d at 936 (quoting 42 U.S.C. § 9607(a) (emphasis in Control Data )). CERCLA focuses on whether the defendant's release or threatened release caused harm to the plaintiff in the form of response costs. Id. at 935; see also Hercules, 247 F.3d at 715-17 (explaining it is enough that response costs resulted from `a' release or threatened releasenot necessarily the defendant's release or threatened release) (quoting 42 U.S.C. § 9607(a)(4)). When multiple parties are liable for response costs, the focus then shifts to allocation. See Hercules, 247 F.3d at 715. Allocation is a contribution claim controlled by [§ 113(f)]. Control Data, 53 F.3d at 935. Applying the foregoing private cost-recovery framework in Control Data, a factually similar case, we affirmed the trial court's allocation of response costs between liable parties based, in part, on the relative toxicity of the distinct hazardous substances each released into the ground water at different sites. Id. at 932-34, 937-38. Control Data owned and operated a facility that inadvertently discharged trichloroethane (TCA) into ground water. Id. at 932. While testing the ground water beneath its facility, Control Data discovered tetrachloroethylene (PERC), which had been released by Schloff Chemical at a different facility. Id. at 932-33. Control Data installed a remediation system that simultaneously removed both TCA and PERC. Id. at 933. We held Control Data could seek contribution from Schloff for the operation of the remediation system and the investigation of the ground water contamination because, [b]y not reacting and allowing the PERC plume to migrate, [Schloff] became partially responsible for the hazardous condition of the Control Data site. Id. at 936. We reach the same conclusion with respect to appellants' ability to seek contribution from Dravo for response costs incurred operating Well-D to remove TCE that migrated from the Colorado Avenue Subsite from the City's ground water. As the United States points out, Well-D removes hazardous substances for which Morrison, the City and Dravo are each responsible, making them jointly and severally liable for response costs incurred to operate it. Morrison is liable for operating Well-D to remove TCE, CT and EDB which have migrated into the City's ground water at the FAR-MAR-CO Subsite. The City is liable for operating Well-D to remove TCE and other hazardous substances released at the North Landfill Subsite. And Dravo is liable for response costs to operate Well-D to remove TCE released at the Colorado Avenue Subsite. Indeed, the 2007 consent decree requires Dravo and the City to coordinate periodically with Morrison to ensure the continued operation of Well D. Morrison, the City and Dravo share liability for contaminating the City's ground water. They also share liability for operating Well-D to remove those contaminants. This shared liability is sufficient to support a § 113(f) contribution claim. Many of the factors appellants have raised with respect to common liability may be relevant to the proper allocation of liability and response costs among the parties but do not prevent appellants from seeking contribution from Dravo, subject to any limitations CERCLA places on that ability. See Hercules, 247 F.3d at 715-19 (discussing divisibility of harm); Control Data, 53 F.3d at 935 (listing factors relevant to resolving contribution claims).