Opinion ID: 2974114
Heading Depth: 2
Heading Rank: 2

Heading: Equitable Indemnification

Text: The second issue is whether the district court erred in dismissing the Authority’s equitable indemnification claim under Federal Rule of Civil Procedure 12(b)(6). We review the grant of a motion to dismiss under Rule 12(b)(6) de novo. Eubanks v. CBSK Fin. Group, Inc., 385 F.3d 894, 897 (6th Cir. 2004). “The Court is required to construe the complaint in the light most favorable to the plaintiff, accept all of the complaint’s factual allegations as true, and determine whether the plaintiff undoubtedly can prove no set of facts in support of the claims that would entitle plaintiff to relief.” Id. The district court dismissed the equitable indemnification claim on the ground that the Authority could not bring a claim in equity because CERCLA provided an adequate remedy at law. The Authority’s first response is that the equitable indemnification claim is merely an alternative theory of liability. The second response is that a CERCLA remedy may not be available as a matter of law. Specifically, the Authority notes that the Supreme Court’s recent decision in Cooper No. 05-5754 Regional Airport Authority v. LFG, LLC, et al. Page 12 Industries, Inc. v. Aviall Services, Inc., 543 U.S. 157 (2004), effectively precludes the Authority’s § 113 claim, see id. at 161 (holding that recovery under § 113 is available only to those parties that have already been sued themselves), and that, if remanded, the district court could determine that the Authority is a “potentially responsible party” not eligible to bring a private cause of action under § 107, see Centerior Serv. Co. v. Acme Scrap Iron & Metal Corp., 153 F.3d 344, 350 (6th Cir. 1998) (stating that CERCLA claims brought by potentially responsible parties must be brought under § 113). This, the Authority concludes, would leave no adequate remedy at law. Parties may, of course, plead alternative theories of liability. See Fed. R. Civ. P. 8(e)(2), 18(a). However, Kentucky follows the traditional rule that equitable relief is not available where there exists an adequate remedy at law. See Popplewell’s Alligator Dock No. 1, Inc. v. Revenue Cabinet, 133 S.W.3d 456, 472 n.83 (Ky. 2004) (citing Tharp v. Louisville & N. R. Co., 210 S.W.2d 954, 955 (Ky. 1948) (“It is, of course, an ancient and settled principle that an equity court will not exert its powers where the litigant has an adequate remedy at law.”)); see also Shaw v. United States, 891 F.2d 602, 603 (6th Cir. 1989) (“Under standard equity doctrine, where there is an adequate remedy at law it must be pursued.”). The fact that a party is unsuccessful in proving an available legal remedy does not make the remedy inadequate. Thompson v. Allen County, 115 U.S. 550, 554 (1885); Justice v. United States, 6 F.3d 1474, 1482 n.16 (11th Cir. 1993); see also INS v. Pangilinan, 486 U.S. 875, 883 (1988) (“[I]t is well established that courts of equity can no more disregard statutory and constitutional requirements and provisions than can courts of law.” (internal quotation omitted)). Most courts that have considered this issue have concluded that CERCLA provides an adequate legal remedy for cost-recovery claims.9 See Truck Components, Inc. v. Beatrice Co. (Truck Components I), No. 94 C 3228, 1994 U.S. Dist. LEXIS 13319, at -43 (N.D. Ill. Sept. 19, 1994) (unpublished opinion); One Wheeler Rd. Assocs. v. Foxboro Co., 843 F. Supp. 792, 799 (D. Mass. 1994); but see Truck Components, Inc. v. K-H Corp. (Truck Components II), No. 94 C 50250, 1995 U.S. Dist. LEXIS 17444, at  (N.D. Ill. Nov. 22, 1995) (unpublished opinion). The district court relied on the decision in Truck Components I, which held that “CERCLA provides an indemnification remedy. Moreover, CERCLA reflects a legislative judgment of how the equities of pollution response should be balanced. [Plaintiff] therefore has an adequate remedy at law and its equitable indemnity claim must be dismissed.” Truck Components I, 1994 U.S. Dist. LEXIS 13319, at . We find the district court’s reasoning sound. “Courts sitting in chancery cannot disregard statutory law, so that where the rights of the parties are clearly defined and their situation is established by the law, the maxim that equity follows the law must be applied . . . .” Breslin v. Gray, 193 S.W.2d 143, 146 (Ky. Ct. App. 1946); see also Morton v. Bank of Bluegrass & Trust Co., 18 S.W.3d 353, 358 n.4 (Ky. Ct. App. 1999) (stating that where an issue can be resolved on legal grounds, “equitable principles are inapplicable as equity follows the law”). CERCLA provides a statutory means of determining environmental cleanup liability, which essentially “trumps” any extra-statutory liability in equity. Moreover, “[t]here can be no indemnity without liability.” Clark v. Hauck Mfg. Co., 910 S.W.2d 247, 253 (Ky. 1995). Therefore, the Authority’s claim for equitable indemnification would necessarily hinge on the resolution of the CERCLA claim, because CERCLA provides the sole means of determining liability. Since CERCLA itself provides an adequate remedy for damages, the equitable indemnification claim is superfluous. As for the argument that the Authority might have no legal remedy if we were to remand this case and the district court were later to decide that the Authority is a potentially responsible party, 9 CERCLA may not, however, provide an adequate legal remedy when a plaintiff seeks injunctive relief. See, e.g., United States v. Waste Indus., Inc., 734 F.2d 159, 168 (4th Cir. 1984). No. 05-5754 Regional Airport Authority v. LFG, LLC, et al. Page 13 there is simply nothing in the record to suggest that the court could make such a finding. In fact, if the Authority were deemed a potentially responsible party, § 107(a) would be rendered meaningless. Congress clearly intended to allow private parties in the Authority’s situation to recover response costs from other private parties in Defendants’ position, provided certain requirements were satisfied. If the Authority were precluded from recovery as a potentially responsible party, it is difficult to conceive of a private party-plaintiff that would not be similarly precluded. We need not speculate, however. CERCLA provided the Authority with an adequate remedy at law. That the facts of this case prevent recovery does not affect this conclusion.