Court Opinion

ID: 2791083
Source: CourtListenerOpinion
Date Created: 2015-04-02 17:01:00.771795+00
Date Added: 2024-06-11T11:10:52.809318
License: Public Domain

FOR PUBLICATION

     UNITED STATES COURT OF APPEALS
          FOR THE NINTH CIRCUIT

 AMERIPRIDE SERVICES INC., a                        No. 12-17245
 Delaware Corporation,
                  Plaintiff-Appellee,                 D.C. No.
                                                   2:00-cv-00113-
                      v.                             LKK-JFM

 TEXAS EASTERN OVERSEAS INC., a
 Delaware Corporation dissolved,                      OPINION
               Defendant-Appellant.

        Appeal from the United States District Court
            for the Eastern District of California
     Lawrence K. Karlton, Senior District Judge, Presiding

                  Argued and Submitted
        November 20, 2014—San Francisco, California

                        Filed April 2, 2015

     Before: Ferdinand F. Fernandez and Sandra S. Ikuta,
     Circuit Judges, and William H. Albritton III, Senior
                       District Judge.*

                     Opinion by Judge Ikuta

 *
   The Honorable William H. Albritton III, Senior District Judge for the
U.S. District Court for the Middle District of Alabama, sitting by
designation.
2    AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

                           SUMMARY**

                       Environmental Law

    The panel vacated the district court’s judgment after trial
in a contribution action under the Comprehensive
Environmental Response, Compensation, and Liability Act
arising out of the contamination of the soil and groundwater
in an industrial area of Sacramento, California.

    Agreeing with the First Circuit, and declining to follow
the reasoning of the Seventh Circuit, the panel held that in
allocating liability to a nonsettling defendant in a CERCLA
contribution action, the district court is not required to apply
either the proportionate share approach of the Uniform
Comparative Fault Act or the pro tanto approach of the
Uniform Contribution Among Tortfeasors Act, but rather has
discretion to determine the most equitable method of
accounting for settlements between private parties. The panel
held that because the district court first ruled that it was
adopting the proportionate share approach but later, at trial,
effectively applied the pro tanto approach, and did not explain
its methodology for complying with CERCLA § 9613(f) and
furthering the goals of CERCLA, the panel could not
determine whether the district court abused its discretion in
allocating response costs (costs of cleanup of contaminated
soil and groundwater). Accordingly, the panel remanded the
case to the district court for further proceedings.

  **
     This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
     AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS               3

     Consistent with the Tenth Circuit, the panel held that a
party can seek contribution under § 9613(f)(1) only for
settlement costs that were for necessary response costs
consistent with the national contingency plan, a plan
promulgated by the federal government to guide federal and
state response actions. Accordingly, the district court erred
in failing to determine the extent to which costs were incurred
consistent with the plan. The panel held that the district court
also erred in setting the date on which prejudgment interest
began to accrue and in assigning causes of action pursuant to
Cal. Civ. Proc. Code § 708.510.

                         COUNSEL

Fred M. Blum (argued) and Erin K. Poppler, Bassi Edlin Huie
& Blum LLP, San Francisco, California; Ronald Bushner,
Wilson, Elser, Moskowitz, Edelman, & Dicker LLP, San
Francisco, California, for Defendant-Appellant.

Philip C. Hunsucker (argued), Brian L. Zagon, Maureen B.
Hodson, and Marc A. Shapp, Hunsucker Goodstein PC,
Lafayette, California; Lee N. Smith, Weintraub Tobin
Chediak Coleman Grodin Law Corporation, Sacramento,
California, for Plaintiff-Appellee.
4    AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

                             OPINION

IKUTA, Circuit Judge:

    This appeal requires us to determine whether the district
court erred in calculating and allocating liability under the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (CERCLA), 42 U.S.C. §§ 9607(a) and
9613(f), in AmeriPride Services Inc.’s contribution action
against Texas Eastern Overseas, Inc. (TEO). TEO challenges
(1) the district court’s method of allocating liability among
settling and nonsettling parties; (2) its determination that
AmeriPride could recover costs that were not “necessary
costs of response incurred . . . consistent with the national
contingency plan,” § 9607(a)(B);1 (3) its selection of the date
prejudgment interest started accruing based on equitable
factors, rather than on the accrual dates specified in
§ 9607(a); and (4) its assignment of TEO’s causes of action
against its insurers to AmeriPride. We have jurisdiction
pursuant to 28 U.S.C. § 1291, and we vacate the district
court’s judgment and remand for further proceedings.

                                    I

    We begin by reviewing the statutory framework
applicable to this appeal.        CERCLA, 42 U.S.C.
§§ 9601–9675, is a statutory scheme giving the federal
government broad authority to require responsible parties to
clean up contaminated soil and groundwater. Key Tronic
Corp. v. United States, 511 U.S. 809, 814 (1994). Section

 1
  Because each of the lettered subparagraphs in § 9607(a) applies to each
of the numbered subparagraphs, we refer to the four lettered
subparagraphs as subdivisions of § 9607(a) itself.
       AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS                    5

9607(a) states that any enumerated responsible party,
including any person who is a current owner or operator of
contaminated property, is liable for “any . . . necessary costs
of response incurred by any other person consistent with the
national contingency plan.” 42 U.S.C. § 9607(a)(B).2
“Response” costs are limited to cleanup, enforcement, and
related security costs. 42 U.S.C. § 9601(23)–(25). The
national contingency plan (NCP) is a national plan
promulgated by the federal government to guide federal and
state response actions. 42 U.S.C. § 9605; 40 C.F.R. pt. 300
(publishing the NCP). A private person (someone who is not
the United States, a state, or a tribe) who has incurred

 2
     42 U.S.C. § 9607(a) provides in pertinent part:

          (a) Covered persons; scope; recoverable costs and
          damages; interest rate; “comparable maturity” date

          Notwithstanding any other provision or rule of law, and
          subject only to the defenses set forth in subsection (b)
          of this section— [persons specified in (a)(1)–(4)] shall
          be liable for—

          (A) all costs of removal or remedial action incurred by
          the United States Government or a State or an Indian
          tribe not inconsistent with the national contingency
          plan;

          (B) any other necessary costs of response incurred by
          any other person consistent with the national
          contingency plan;

          . . . . The amounts recoverable in an action under this
          section shall include interest on the amounts
          recoverable under subparagraphs (A) through (D). Such
          interest shall accrue from the later of (i) the date
          payment of a specified amount is demanded in writing,
          or (ii) the date of the expenditure concerned. . . . .
6         AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

“necessary costs of response” that are consistent with the
NCP, 42 U.S.C. § 9607(a)(B), may bring an action to recover
such costs, including “interest on the amounts recoverable.”
§ 9607(a).

    In addition to allowing private parties to sue for cost
recovery under § 9607(a), CERCLA also authorizes a
responsible party who has incurred liability under § 9607(a)
to bring an action for contribution under § 9613(f)(1) against
any other potentially responsible party.3 “Contribution” is not
defined in CERCLA, but is interpreted to mean “the
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.” United States v. Atl. Research Corp.,
551 U.S. 128, 138 (2007) (internal quotation marks omitted).
“In resolving contribution claims, the court may allocate

    3
        42 U.S.C. § 9613(f)(1) provides:

             (1) Contribution

             Any 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. Such claims shall be brought in accordance
             with this section and the Federal Rules of Civil
             Procedure, and shall be governed by Federal law. In
             resolving contribution claims, the court may allocate
             response costs among liable parties using such
             equitable factors as the court determines are
             appropriate. Nothing in this subsection shall diminish
             the right of any person to bring an action for
             contribution in the absence of a civil action under
             section 9606 of this title or section 9607 of this title.
     AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS              7

response costs among liable parties using such equitable
factors as the court determines are appropriate.” § 9613(f)(1).
CERCLA does not limit the equitable factors a court may
consider.

                              II

    We now turn to the facts of this case. This action arose
out of the contamination of the soil and groundwater in an
industrial area of Sacramento, California. Valley Industrial
Services, Inc. (VIS) operated an industrial dry cleaning and
laundry business at that site for seventeen years. VIS used
perchloroethylene (PCE) as a solvent in its dry cleaning
operations. PCE is designated as a “hazardous substance”
under CERCLA. 42 U.S.C. § 9602; 40 C.F.R. § 302.4.
During its operations, VIS released PCE into the
environment. VIS eventually merged into TEO, which
expressly assumed VIS’s liabilities.

    VIS was a wholly owned subsidiary of Petrolane, Inc.
during part of the time it was operating at the Sacramento
site. In 1983, Petrolane sold the Sacramento site; the property
passed through various hands until AmeriPride became the
owner.      During AmeriPride’s ownership, there were
additional releases of PCE-contaminated water into the soil
and groundwater. The contamination at the Sacramento site
migrated onto a neighboring property owned by Huhtamaki
Foodservices, Inc. (Huhtamaki), and contaminated
groundwater wells owned by California-American Water
Company (Cal-Am). Chromalloy American Corporation,
which owned property in the vicinity of the Sacramento site,
also released hazardous substances that contributed to the
contamination on AmeriPride’s property.
8    AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

    AmeriPride’s environmental consultant found evidence of
PCE in the soil under the Sacramento site during a remodel
in 1997. AmeriPride reported its discovery to regulatory
authorities, and a state agency directed AmeriPride to conduct
additional sampling and install monitor wells. In 2002, after
AmeriPride had conducted the additional sampling and
monitoring, the state agency took regulatory control over the
Sacramento site investigation. Since then, AmeriPride has
performed investigation and remediation of the PCE in the
soil and groundwater at and near the Sacramento site under
the direction of the state agency. The cleanup is ongoing.

    In January 2000, AmeriPride filed a complaint in district
court against VIS, Petrolane, TEO, and Chromalloy under
42 U.S.C. §§ 9607(a) and 9613, seeking to recover costs it
incurred responding to the PCE contamination. TEO asserted
a counterclaim for contribution under § 9613(f). AmeriPride
subsequently entered into settlement agreements with
Chromalloy and Petrolane, for $500,000 and $2.75 million
respectively.

    Both Cal-Am and Huhtamaki subsequently brought suit
against AmeriPride. In July 2002, Cal-Am filed a complaint
against AmeriPride seeking recovery of its response costs,
damages, and other relief in connection with the
contamination of its wells. AmeriPride paid Cal-Am $2
million to settle these claims. In the settlement agreement,
Cal-Am agreed to release AmeriPride from all claims arising
out of or related to the “interference with, or destruction or
loss of use of” either Cal-Am’s wells or the parcels of real
property on which the wells were located. In July 2004,
Huhtamaki filed a complaint against AmeriPride seeking cost
recovery under CERCLA and state law, and asserting
common law causes of action for nuisance, trespass, and
     AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS               9

negligence. AmeriPride paid Huhtamaki $8.25 million to
settle Huhtamaki’s claims. In the settlement agreement,
AmeriPride and Huhtamaki mutually agreed to release each
other from all charges or damages related to or arising from
the claims asserted in Huhtamaki’s complaint, “including . . .
the costs of replacement water claimed by Huhtamaki.”

    The district court approved AmeriPride’s settlement
agreements in July 2007 in an order entering judgment under
Federal Rule of Civil Procedure 54(b). In its order, the court
noted that federal courts in California approving settlements
involving CERCLA have adopted section 6 of the Uniform
Comparative Fault Act as federal common law to determine
how the settlement of one or more parties will impact the
nonsettling parties, and stated that “[t]his Court does the same
here.” It then held that “Section 6 of the Uniform
Comparative Fault Act (‘UCFA’) . . . in pertinent part, is
hereby adopted as the federal common law in this case for the
purpose of determining the legal effect of the settlement
agreements.”

    Meanwhile, litigation between AmeriPride and TEO
continued. On January 7, 2011, AmeriPride filed a motion
for summary judgment against TEO seeking, among other
things, an order holding TEO liable to AmeriPride under
42 U.S.C. § 9607(a) for its response costs, including the
amounts paid in settlement to Cal-Am and Huhtamaki.
AmeriPride also moved to dismiss TEO’s counterclaim under
42 U.S.C. § 9613(f) for contribution.

    In an order dated May 12, 2011, the court ruled that TEO
was liable for AmeriPride’s response costs under § 9607(a)
as a matter of law. Next, the court held that the amounts
AmeriPride paid in settlement to Cal-Am and Huhtamaki
10 AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

were not recoverable under § 9607(a), but permitted
AmeriPride to file an amended complaint seeking to recover
these amounts under § 9613(f).4 In light of this ruling, the
court did not address whether those amounts were necessary
response costs that had been incurred consistent with the
NCP, though it held that AmeriPride’s other response costs
met that criterion. The district court concluded that triable
questions of fact remained regarding a number of other
issues, including the equitable allocation of response costs
between TEO and AmeriPride under § 9613(f). The district
court therefore set a date for a bench trial to resolve these
remaining issues.

    Before trial, TEO moved the court for an order reasserting
its previous ruling that the UCFA proportionate share
approach would apply to determine the effect of AmeriPride’s
settlements with Chromalloy and Petrolane. At the hearing
on its motion, TEO explained that under section 6 of the
UCFA, the court had to calculate the amount of Chromalloy’s
and Petrolane’s equitable shares of the response costs, and
reduce AmeriPride’s claims against TEO by that amount.
The district court denied this motion. The court indicated that
it would use equitable factors to allocate response costs
between AmeriPride and TEO, but that the liability of the
settling parties “is measured by the settlement that the court
found fair and reasonable.” Accordingly, the court held that
it would reduce AmeriPride’s claims against TEO only by the
dollar value of Chromalloy’s and Petrolane’s settlements.

   In its motion in limine, TEO also asked for an order
requiring AmeriPride to prove that its settlements with
Huhtamaki and Cal-Am were for necessary costs of response

 4
     AmeriPride filed such an amended complaint on May 24, 2011.
     AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS 11

incurred consistent with the NCP. The court denied this
motion as well, mistakenly stating that it had resolved this
issue in its May 12, 2011 order, and agreeing with
AmeriPride that because the response action at the
Sacramento site was NCP compliant, it did not need to make
an individual determination regarding whether the settlement
with Cal-Am and Huhtamaki met that criterion.

    After a bench trial, the district court entered a final order
and judgment against TEO. First, the district court found that
$15,508,912 was the amount of AmeriPride’s damages
subject to equitable apportionment. The court reached this
number by taking several steps. It first totaled all of
AmeriPride’s response costs, including its investigation,
remediation, and regulatory oversight costs. The court added
this sum to the amounts AmeriPride paid to settle Huhtamaki
and Cal-Am’s claims, and rejected TEO’s argument that it
must first determine the extent to which these payments were
for necessary response costs incurred consistent with the
NCP. AmeriPride’s response costs and settlement costs
together totaled $18,758,912. The court then deducted $3.25
million to account for the money AmeriPride received from
settling its claims with Chromalloy and Petrolane.

    Second, the district court apportioned the $15,508,912
amount equally between AmeriPride and TEO, resulting in
each party being responsible for $7,754,456. Because
AmeriPride had been bearing the costs of response for many
years, the court held that TEO would also be responsible for
prejudgment interest, accruing from the date the costs were
incurred by AmeriPride. The court rejected TEO’s argument
that such interest did not begin to accrue until the date
AmeriPride demanded payment of a specified amount in
12 AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

writing, see § 9607(a)(i), stating that the interest accrual date
was “a matter of equity rather than statutory requisites.”

    After the district court entered its judgment, TEO filed a
renewed motion for judgment as a matter of law and moved
to amend or alter the judgment. AmeriPride moved for an
order directing TEO to assign its causes of action against its
insurers to AmeriPride. The district court denied TEO’s
motions and granted AmeriPride’s. TEO timely appealed the
district court’s judgment.

                               III

    We review the district court’s interpretation of a statute de
novo. See Boeing Co. v. Cascade Corp., 207 F.3d 1177, 1182
(9th Cir. 2000). When interpreting a statute, “[o]ur task is to
construe what Congress has enacted.” Carson Harbor Vill.,
Ltd. v. Unocal Corp., 270 F.3d 863, 877 (9th Cir. 2001) (en
banc) (alteration in original). “[W]e look first to the plain
language of the statute, construing the provisions of the entire
law, including its object and policy, to ascertain the intent of
Congress.” Id. (alteration in original) (internal quotation
marks omitted).

    We begin with TEO’s argument that although the district
court properly recognized that TEO was entitled to a credit
for AmeriPride’s settlements with Huhtamaki and Cal-Am, it
applied the wrong method to determine how that credit
should be determined. This claim first requires an
understanding of the two leading methods for allocating
liability to a nonsettling defendant after other responsible
parties have entered into a settlement agreement to resolve
their responsibility for an injury.
       AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS 13

                                      A

    When a statute does not provide an approach for
determining how to credit settlements in cases involving
settlements with less than all the jointly and severally liable
tortfeasors, courts generally look to either the Uniform
Contribution Among Tortfeasors Act (UCATA), sometimes
referred to as the pro tanto approach, or the Uniform
Comparative Fault Act (UCFA), sometimes referred to as the
proportionate share approach. See, e.g., McDermott, Inc. v.
AmClyde, 511 U.S. 202, 208–09 & n.8, 217 (1994). The
UCATA and the UCFA are model acts proposed by the
National Conference of Commissioners on Uniform State
Laws that advocate competing methods of accounting for a
settling party’s share when determining the amount of a
nonsettling defendant’s liability. See id. at 209 n.8.

   The UCFA, which takes the proportionate share approach,
provides that when an injured party settles with one of
multiple tortfeasors, the settlement does not discharge the
nonsettling tortfeasors but reduces the injured party’s claims
against them by the amount of the settling tortfeasor’s
proportionate share of the damages. See UCFA § 6.5 Courts

 5
     Uniform Comparative Fault Act § 6 states:

          A release, covenant not to sue, or similar agreement
          entered into by a claimant and a person liable
          discharges that person from all liability for contribution,
          but it does not discharge any other persons liable upon
          the same claim unless it so provides. However, the
          claim of the releasing person against other persons is
          reduced by the amount of the released person’s
          equitable share of the obligation, determined in
          accordance with the provisions of Section 2.
14 AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

adopting the UCFA proportionate share approach must
therefore “determine the responsibility of all firms that have
settled, as well as those still involved in the litigation.” Am.
Cyanamid Co. v. Capuano, 381 F.3d 6, 20 (1st Cir. 2004)
(internal quotation marks omitted).             The nonsettling
tortfeasors will be responsible only for their proportionate
share of the costs, even if the settling tortfeasor settles for less
than its fair share of the injury. Under this approach, an
injured party who settles for too little may not receive full
recovery. The district court in this case expressly adopted the
UCFA proportionate share approach in its July 2, 2007 order
approving the settlement agreements between AmeriPride and
the settling defendants, Chromalloy and Petrolane.

    The UCATA pro tanto approach provides that when an
injured party settles with one of two or more tortfeasors for
the same injury, the settlement does not discharge the
nonsettling tortfeasors but reduces the injured party’s claims
against them by the dollar value of the settlement. See
UCATA (Revised) § 4(a) (1955).6 If the settling tortfeasor

 6
     Uniform Contribution Among Tortfeasors Act § 4 provides:

          When a release or a covenant not to sue or not to
          enforce judgment is given in good faith to one of two or
          more persons liable in tort for the same injury or the
          same wrongful death:

          (a) It does not discharge any of the other tortfeasors
          from liability for the injury or wrongful death unless its
          terms so provide; but it reduces the claim against the
          others to the extent of any amount stipulated by the
          release or the covenant, or in the amount of the
          consideration paid for it, whichever is the greater; and,
     AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS 15

settles for less than its proportionate share of the injury, the
nonsettling tortfeasors will end up paying more than their
proportionate share. While this approach encourages early
settlement, see McDermott, 511 U.S. at 214–15, it also gives
rise to a potential for unfairness or collusive settlements, see
Franklin v. Kaypro Corp., 884 F.2d 1222, 1230 (9th Cir.
1989). To remedy this concern, courts and legislatures
adopting the UCATA pro tanto approach for resolving state
tort claims or pursuant to statute often require “good-faith
hearings” before approving a settlement. McDermott,
511 U.S. at 213. “When such hearings are required, the
settling defendant is protected against contribution actions
only if it shows that the settlement is a fair forecast of its
equitable share of the judgment.” Id.

    Despite having previously adopted the UCFA
proportionate share approach, the district court concluded at
a motion in limine hearing that it would not determine the
proportionate share of the damages attributable to
Chromalloy and Petrolane. Instead, it held it would reduce
the amount of AmeriPride’s claim by the dollar amount paid
by Chromalloy and Petrolane, the settling defendants.

                                  B

    TEO argues that CERCLA requires that courts apply the
UCFA proportionate share approach to determine how to
credit settlements in cases involving private settlements with
less than all the potentially responsible parties.

       (b) It discharges the tortfeasor to whom it is given from
       all liability for contribution to any other tortfeasor.
16 AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

    We have generally favored the UCFA proportionate share
approach when construing federal statutes that authorize
contribution but are silent regarding how liability should be
allocated to nonsettling defendants. See Franklin, 884 F.2d
at 1231–32 (9th Cir. 1989); see also In re Exxon Valdez,
229 F.3d 790, 798 (9th Cir. 2000).

    In Franklin, we considered how courts should allocate
liability to nonsettling defendants in the context of a
settlement in a securities case brought pursuant to section
11(f) of the Securities Act of 1933, 15 U.S.C. § 77k(f).7 884
F.2d at 1225–26. We noted that while § 77k(f) provided that
defendants could recover contribution from other liable
parties, it did not provide any guidance for partial settlements.
Id. at 1228. Given that settlements in securities cases “affect
substantive rights that are the province of federal courts,” we
concluded it was necessary to develop federal common law
on this issue, and considered various approaches. Id. at
1228–29. We declined to hold that federal courts should
adopt the contribution law of the forum state. Id. at 1228.
We also rejected the UCATA pro tanto approach. Id. at
1230–31. Ultimately, we concluded that the UCFA
proportionate share approach was preferable, noting that
“[t]he principles of compensation and contribution are in
tension with the goals of full disclosure and settlement in

 7
     Section 77k(f)(1) provides:

          [E]very person who becomes liable to make any
          payment under this section may recover contribution as
          in cases of contract from any person who, if sued
          separately, would have been liable to make the same
          payment, unless the person who has become liable was,
          and the other was not, guilty of fraudulent
          misrepresentation.
     AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS 17

actions under the securities laws,” and “the most efficacious
and equitable method of resolving this tension is by adopting
a rule allowing only proportional liability if a contribution bar
is entered as part of a pretrial partial settlement.” Id. at 1232.
Accordingly, we concluded that “[i]n the absence of any
guidance from Congress, such a rule becomes part of the
federal common law.” Id.

    In a subsequent case, we held that the district court
abused its discretion when it refused to enforce an agreement
between settling parties designed to obtain the “functional
equivalent of a proportionate share allocation of damages”
because “[t]he proportionate share approach is the law in the
Ninth Circuit” and both the Ninth Circuit and the Supreme
Court have “endorsed” the proportionate share approach in
other contexts due to “its superiority in blending fairness to
the parties with incentives to settle.” In re Exxon Valdez,
229 F.3d at 797–98.

   The Supreme Court has likewise favored the UCFA
proportionate share approach in federal admiralty law. See
McDermott, 511 U.S. at 217. In McDermott, the Supreme
Court reasoned that the UCFA proportionate share approach
was “superior” to the UCATA pro tanto approach in
admiralty because it was consistent with the rule that
damages in an admiralty suit be assessed on the basis of
proportionate fault. Id. at 211, 217.

    Despite this precedent, we cannot read federal common
law into a statute if we determine it is contrary to
congressional intent. See Native Vill. of Kivalina v.
ExxonMobil Corp., 696 F.3d 849, 856 (9th Cir. 2012)
(“Federal common law is subject to the paramount authority
of Congress.”) (citing New Jersey v. New York, 283 U.S. 336,
18 AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

348 (1931)); see also United States v. Northrop Corp.,
59 F.3d 953, 958 (9th Cir. 1995) (“Even if federal common
law otherwise would operate, it is displaced when Congress
has decided the matter.”) Accordingly, before applying
federal common law, we must first interpret the statute and
attempt to ascertain congressional intent to determine if
Congress has decided the matter. See Northrop, 59 F.3d at
958. In the CERCLA context, “[a]lthough we presume the
application of well-established common law principles to a
federal statute, this presumption does not apply ‘when a
statutory purpose to the contrary is evident.’” Chubb Custom
Ins. Co. v. Space Sys./Loral, Inc., 710 F.3d 946, 958 (9th Cir.
2013) (quoting United States v. Texas, 507 U.S. 529, 534
(1993)). “Congress need not ‘affirmatively proscribe’ the
common law principle to evince this intent.” Id. Rather,
congressional intent can be inferred from the statutory text,
the structure of the statute and the relationship between its
provisions, and “CERCLA’s overall statutory purpose.” See
id. at 960–61.

    Here, there are strong indications that Congress did not
intend to require district courts to apply the UCFA
proportionate share approach in cases involving litigation
among private parties. CERCLA specifies an approach for
allocating liability to a nonsettling defendant in one
circumstance only: when the federal or state government has
incurred recoverable response costs and enters into a
settlement agreement. See § 9613(f)(2). Section 9613(f)(2)
provides that a settlement agreement between the state or
federal government and one responsible party, “reduces the
potential liability of the others by the amount of the
settlement,” i.e., it requires the UCATA pro tanto approach.
By contrast, CERCLA does not specify how a settlement
agreement between two private parties affects the liability of
     AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS 19

nonsettling parties. See § 9613(f). The requirement that
courts apply the UCATA pro tanto approach for government
settlements in § 9613(f)(2), and the lack of any such a
requirement in private party settlements, leads to the
conclusion that Congress did not intend to impose a uniform
requirement for a particular approach in private party
settlements. See Keene Corp. v. United States, 508 U.S. 200,
208 (1993) (“[W]here Congress includes particular language
in one section of a statute but omits it in another . . . , it is
generally presumed that Congress acts intentionally and
purposely in the disparate inclusion or exclusion.”)
(alterations in original) (internal quotation marks omitted);
see also Cent. Bank of Denver, N.A. v. First Interstate Bank
of Denver, N.A., 511 U.S. 164, 176–77 (1994) (concluding
that Congress did not intend to impose aiding and abetting
liability under the Securities Act of 1934 where the plain
language of the statute did not impose such liability, yet other
statutes showed that “Congress knew how to impose aiding
and abetting liability when it chose to do so”). CERCLA’s
statutory language is best read as leaving the allocation of
liability among responsible parties to be guided by
§ 9613(f)(1)’s more general principle that “the court may
allocate response costs among liable parties using such
equitable factors as the court determines are appropriate.”
Such flexibility would further one of CERCLA’s core
purposes of “foster[ing] settlement through its system of
incentives and without unnecessarily further complicating
already complicated litigation.” Chubb Custom, 710 F.3d at
971 (internal quotation marks omitted).

    In light of CERCLA’s statutory scheme, neither Franklin
nor McDermott is applicable. Franklin held that the
“statutorily created right to contribution” in § 77k(f)(1) left
courts “free to fashion a common law” because Congress had
20 AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

not “created laws governing the right it created.” 884 F.2d at
1228 n. 10. Moreover, in adopting the UCFA proportionate
share approach, Franklin focused on the policy goals of the
securities law, noting the “statutory goal of punishing each
wrongdoer.” Id. at 1231. In CERCLA, by contrast, the
statutory text and “CERCLA’s overall statutory purpose,”
Chubb, 710 F.3d at 961, weigh against adopting the UCFA
proportionate share approach as a matter of federal common
law. Congress required the use of the UCATA pro tanto
approach in cases involving settlements between a private
party and the government, but otherwise granted courts
discretion to allocate response costs among liable parties. See
§ 9613(f)(1)–(2). Further, Congress’s preference for the
UCATA pro tanto approach in government settlements
weighs against mandating a single different approach in the
private party context. Cf. Akzo Nobel Coatings, Inc. v. Aigner
Corp., 197 F.3d 302, 308 (7th Cir. 1999) (adopting the
UCATA pro tanto approach for private party settlements to
be consistent with Congress’s adoption of this approach in
§ 9613(f)(2)). Nor do CERCLA’s policy goals fully coincide
with the policy goals identified in Franklin for securities law.
Although CERCLA has a “secondary purpose” of “assuring
that ‘responsible’ persons pay for the cleanup,” its focus is on
protecting the public health and environment “by facilitating
the expeditious and efficient cleanup of hazardous waste
sites.” Carson Harbor, 270 F.3d at 880. Because the UCFA
proportionate share approach does not promote early
settlement to the same extent as the UCATA pro tanto
approach, it may not be the best approach for furthering the
goals of CERCLA in all cases.

   Nor is McDermott controlling. In McDermott, the
Supreme Court concluded that the UCFA proportionate share
approach was “superior” to the UCATA pro tanto approach
      AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS 21

in admiralty because it was consistent with the rule that
damages in an admiralty suit be assessed on the basis of
proportionate fault. See 511 U.S. at 207, 217. CERCLA has
no similar rule. Rather, we have recognized that CERCLA
contemplates that responsible parties who fail to enter into an
early settlement agreement “‘may ultimately bear a
disproportionate share of the CERCLA liability.’” United
States v. Coeur d’Alenes Co., 767 F.3d 873, 875 (9th Cir.
2014).

    Accordingly, we reject TEO’s argument that because
CERCLA does not specify how to allocate liability to
nonsettling parties in litigation between two private parties,
we must apply the UCFA proportionate share approach.
Instead, we conclude that a district court has discretion under
§ 9613(f)(1) to determine the most equitable method of
accounting for settlements between private parties in a
contribution action. In reaching this conclusion, we concur
with the well-reasoned approach of the First Circuit. See
Capuano, 381 F.3d at 20–21 (concluding that § 9613(f)(1)
gives district courts discretion to determine “the most
equitable method of accounting for settling parties” in
private-party contribution actions).8 For the same reason, we
decline to follow the reasoning of the Seventh Circuit, which
held that CERCLA requires courts to use the UCATA pro
tanto approach in every case. See Akzo, 197 F.3d at 308.
Akzo concluded that language in the statute providing that

 8
  The Tenth Circuit has also suggested that district courts have discretion
to determine which method of accounting to apply in private-party
contribution actions. See Tosco Corp. v. Koch Indus., Inc., 216 F.3d 886,
897 (10th Cir. 2000) (holding that the district court was not obligated to
reduce the nonsettling party’s liability by the settlement amount, and was
permitted to reduce the nonsettling party’s liability by the settling party’s
equitable share of the liability).
22 AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

contribution claims “shall be governed by Federal law,”
§ 9613(f)(1), “implies that the law should be nationally
uniform,” and required the uniform application of the
UCATA pro tanto approach, because it best matched “the
most closely related rule of law” in § 9613(f)(2). Id. at
307–08. We disagree with this reasoning. While the
statement that § 9613(f)(1) contribution claims “shall be
governed by Federal law,” clarifies that CERCLA requires us
to adopt a federal rule, rather than adopt the law of the forum
state, it does not raise the inference that Congress required
federal courts to adopt a single method of allocating liability
among nonsettling parties. Rather, the statutory language
raises the opposite inference, both by mandating the use of
UCATA for government settlements but not for private
settlements, and by directing the courts to “allocate response
costs among liable parties using such equitable factors as the
court determines are appropriate.” § 9613(f)(1)–(2).

                                C

     TEO argues that even if the district court had discretion
to determine which approach to apply in allocating response
costs among liable parties, it abused its discretion here by
first ruling that the UCFA proportionate share approach
would determine the legal effect of the settlements, and then
refusing to assess the settling parties’ equitable share of fault.

    Although courts have discretion to choose a method to
allocate liability to nonsettling defendants in private-party
contribution actions under CERCLA, they must exercise this
discretion in a manner consistent with § 9613(f)(1) and the
purposes of CERCLA. Choosing a method that would
discourage settlement or produce plainly inequitable results
could constitute an abuse of discretion. See § 9613(f)(1);
     AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS 23

Chubb Custom, 710 F.3d at 971; see also Capuano, 381 F.3d
at 21 (“[I]t is not unimaginable that the use of one of these
approaches might produce a result so inequitable that it would
constitute an abuse of discretion . . . .”). Because a district
court’s chosen method will likely affect parties’ decisions to
settle or contest a proposed settlement, once a district court
selects a method in a final order approving a settlement
agreement, failing to follow that approach may produce a
result that is inequitable and inconsistent with CERCLA’s
goals.

    In this case, the district court first ruled that it was
adopting the UCFA proportionate share approach. This
ruling signified that, at trial, the court would identify the
equitable factors that it deemed appropriate, allocate costs
according to those factors among all potentially responsible
parties, including those that settled, and hold the non-settling
parties responsible only for their proportionate share of the
costs. See § 9613(f)(1); UCFA § 6. Given this ruling, TEO
had no need to contest the settlements or adduce evidence as
to their fairness or the appropriate factors that should be
applied in determining the settling parties’ equitable share of
response costs under § 9613(f)(1).

    At trial, however, the district court declined to determine
the proportionate share of both the settling and nonsettling
parties, in contravention of the UCFA methodology. Instead,
the district court allocated to the settling parties only the
response costs set forth in the settlement agreements, ruling
that “the appropriate measure of the liability of the settling
defendants is measured by the amount of dollars that were
paid to Ameripride and that the defendants get a one-dollar-
for-one-dollar credit for that.” This ruling effectively applied
the UCATA pro tanto approach.
24 AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

    Due to TEO’s justifiable reliance on the court’s UCFA
ruling, TEO did not have a reasonable opportunity to present
evidence and argument regarding the fairness of such an
allocation. Nor did the district court explain how its approach
complied with § 9613(f)(1) and furthered the goals of
CERCLA.9         Because the court failed to explain its
methodology for complying with § 9613(f) and furthering the
goals of CERCLA, whether under the UCFA proportionate
share approach or the UCATA pro tanto approach, we cannot
determine whether it abused its discretion in allocating
response costs. See Traxler v. Multnomah Cnty., 596 F.3d
1007, 1015–16 (9th Cir. 2010) (explaining that “meaningful
appellate review for abuse of discretion is foreclosed when
the district court fails to articulate its reasoning” (internal
quotation marks omitted)). Accordingly, we remand to the
district court for further proceedings.10

                                   IV

   We next turn to TEO’s arguments that the district court
made legal errors in calculating the amount subject to
equitable apportionment. TEO claims the district court erred
by failing to determine whether AmeriPride’s settlements
with Huhtamaki and Cal-Am were solely for “response costs”

  9
    The court’s conclusory statement that the settlements represented “a
fair allocation of settlement proceeds and liabilities” is insufficient to
explain the equitable factors it considered and how it determined the
appropriate allocation of liability according to those factors. See Boeing,
207 F.3d at 1187.
  10
    In light of our remand for further proceedings, we do not address
TEO’s alternative argument that even if the district court properly applied
the UCATA pro tanto approach, it incorrectly credited the settlement
monies received by AmeriPride.
     AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS 25

that were incurred consistent with the NCP, and by setting the
date on which prejudgment interest begins accruing based on
equitable considerations, rather than the statutory
requirements in § 9607(a).

     These arguments require us to consider the relationship
between the statute authorizing cost recovery, § 9607(a), and
the statute authorizing contribution actions, § 9613(f)(1).
Under § 9607(a)(A)–(D), a potentially responsible party is
liable for specified costs incurred by a government, including
natural resource damages and certain health effects studies,
and for “necessary costs of response incurred by [a private
party] consistent with the national contingency plan.”
Section 9607(a) further provides that “[t]he amounts
recoverable in an action under this section shall include
interest on the amounts recoverable” under § 9607(a)(A)–(D),
and “[s]uch interest shall accrue from the later of (i) the date
payment of a specified amount is demanded in writing, or
(ii) the date of the expenditure concerned.” § 9607(a).

    To prevail in a private cost recovery action under
§ 9607(a), a plaintiff must establish, among other things, that
the release of a hazardous substance “caused the plaintiff to
incur response costs that were ‘necessary’ and ‘consistent
with the national contingency plan.’” Carson Harbor,
270 F.3d at 870–71. Therefore, a defendant liable in a private
cost recovery action under § 9607(a) would be liable for
response costs that meet such criteria.

    A party liable under § 9607(a) may bring a contribution
action under § 9613(f)(1), which permits courts to allocate
“response costs” among liable parties. Such a plaintiff may
seek contribution “from any other person who is liable or
potentially liable” under § 9607(a). The liability of the
26 AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

defendant in the contribution action is therefore also defined
by § 9607(a).

    Reading these sections together, when a private plaintiff
who incurred liability under § 9607(a)(B) for a third party’s
response costs seeks contribution under § 9613(f)(1) for such
costs, the only response costs recoverable from the defendant
in the contribution action are those that were necessary and
consistent with the NCP. Accordingly, if a party who was
liable under § 9607(a) entered into a settlement agreement to
discharge its CERCLA liability to a third party, it can seek
contribution under § 9613(f)(1) only for the settlement costs
that were for necessary response costs incurred consistent
with the NCP. See Atl. Research, 551 U.S. at 139 (clarifying
that a responsible party that pays money to satisfy a
settlement agreement or a court judgment does not incur its
own response costs, but reimburses other parties for response
costs that they incurred). This conclusion is consistent with
the Tenth Circuit’s reasoning. See Cnty. Line Inv. Co. v.
Tinney, 933 F.2d 1508, 1517 & n.13 (10th Cir. 1991) (holding
that “consistency with the NCP is an element of a CERCLA
contribution claim”).

    Our interpretation is also consistent with the statutory
scheme as a whole. Nothing in the statute suggests that
liability incurred under other statutes or state tort law is
allocable in a contribution action under § 9613(f)(1); there is
“no suggestion in the statute that Congress intended
CERCLA to create a general federal right of contribution for
damages and response costs that are not otherwise cognizable
under the statute.” Cnty. Line, 933 F.2d at 1517. Indeed,
allowing a party to recover settlement money in a
contribution action under § 9613(f)(1) without first requiring
the party to prove that the settlement reimbursed the recipient
      AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS 27

for necessary response costs incurred consistent with the NCP
could produce incongruous results. See id. at 1517 n.13. For
instance, AmeriPride could successfully defend a § 9607(a)
action brought by Huhtamaki or Cal-Am by proving that
Huhtamaki and Cal-Am’s response costs did not comply with
the NCP, settle with Huhtamaki and Cal-Am for liability
under state law, and then seek contribution under § 9613(f)(1)
against TEO for the settlement monies it paid. Accordingly,
the district court erred in failing to determine the extent to
which the amounts paid by AmeriPride to Cal-Am and
Huhtamaki were incurred consistent with the NCP.11

    Our reading of § 9613(f) also resolves the question
whether the district court erred in setting the date on which
prejudgment interest began accruing based on equitable
considerations rather than the statutory requirements in
§ 9607(a). Because § 9613(f)(1) incorporates § 9607(a) to
the extent it delineates the nature of recoverable costs, and the
amounts recoverable under § 9607(a) include “interest on the
amounts recoverable,” such costs are also recoverable in a
contribution action under § 9613(f). Further, because the
accrual date for determining this element of response costs is
specified in § 9607(a), that accrual date is equally applicable
to a court allocating costs under § 9613(f)(1). Because
§ 9613(f) incorporates the liability provisions of § 9607(a),
the court is not free to exercise its discretion in determining
the methodology for calculating prejudgment interest. In

 11
    The district court’s mere observation that the gravamen of Huhtamaki
and Cal-Am’s claims was the contamination of the ground water does not
substitute for factual findings, based on evidence in the record,
establishing that AmeriPride’s settlements reimbursed Huhtamaki and
Cal-Am solely for necessary response costs incurred consistent with the
NCP.
28 AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

reaching this conclusion, we join the majority of other
circuits that have addressed this issue. See, e.g., Capuano,
381 F.3d at 28 (“Since the prejudgment interest provision of
§ 9607 refers to ‘actions under this section’ and because
§ 9613(f) incorporates the liability provisions of § 9607, an
action for contribution also incorporates the prejudgment
interest provision.”); see also United States v. Consol. Coal
Co., 345 F.3d 409, 415 (6th Cir. 2003); Goodrich Corp. v.
Town of Middlebury, 311 F.3d 154, 177 (2d Cir. 2002);
Bancamerica Commercial Corp. v. Mosher Steel of Kan.,
Inc., 100 F.3d 792, 800–01 (10th Cir. 1996). But see
Caldwell Trucking PRP v. Rexon Tech. Corp., 421 F.3d 234,
247 (3d Cir. 2005) (holding that § 9613(f)’s silence on the
issue of prejudgment interest “fairly leads to an interpretation
that, in contribution cases, such an award is discretionary”).
Here, the district court erred in holding that prejudgment
interest began accruing on the date AmeriPride incurred the
relevant costs without determining whether that date was later
than the date on which AmeriPride demanded a specified
amount in writing from TEO. See § 9607(a).

    On remand, the district court should determine what
portion of AmeriPride’s settlements with Huhtamaki and Cal-
Am reimbursed them for necessary response costs they
incurred consistent with the NCP. The district court should
also apply the interest provisions in § 9607(a) to determine
when interest began to accrue.

                               V

     We now turn to TEO’s final argument that the district
court erred when it assigned TEO’s causes of action against
its insurers to AmeriPride pursuant to section 708.510 of the
California Code of Civil Procedure.
     AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS 29

     Rule 69(a)(1) of the Federal Rules of Civil Procedure
states in relevant part that “[a] money judgment is enforced
by a writ of execution,” and “[t]he procedure on execution . . .
must accord with the procedure of the state where the court
is located.” Here, the relevant state law is section 708.510 of
the California Code of Civil Procedure (section 708.510),
which provides that a “court may order the judgment debtor
to assign to the judgment creditor . . . all or part of a right to
payment due or to become due, whether or not the right is
conditioned on future developments.” The statute provides
a nonexclusive list of types of payments subject to
assignment, including “[w]ages due from the federal
government that are not subject to withholding under an
earnings withholding order,” “[r]ents,” “[c]ommissions,”
“[r]oyalties,” “[p]ayments due from a patent or copyright,”
and an “[i]nsurance policy loan value.” Cal. Civ. Proc. Code
§ 708.510(a).

     We conclude that the district court erred in assigning
TEO’s causes of action against its insurers to AmeriPride
pursuant to section 708.510. Section 708.510 permits
assignment of “a right to payment due or to become due,” and
lists “types of payments” that are subject to assignment. In
California, “[a] cause of action for damages is itself personal
property,” rather than a type of payment. See Schauer v.
Mandarin Gems of Cal., Inc., 23 Cal. Rptr. 3d 233, 238 (Ct.
App. 2005). A court therefore may assign only the right to
payment due from a cause of action under section 708.510,
and may not assign the cause of action directly. While causes
of action of a non-personal nature may be generally
assignable under California law, as AmeriPride argues,
section 708.510 does not apply to all voluntarily assignable
property rights, but only to “all or part of a right to payment
due.” Cal. Civ. Proc. Code § 708.510. Accordingly, the
30 AMERIPRIDE SERV. V. TEXAS EASTERN OVERSEAS

district court erred when it assigned TEO’s causes of action
against its insurers to AmeriPride.

                               VI

    In sum, we vacate the district court’s judgment and
remand to the district court with instructions to (1) explain
which equitable factors it considered in allocating $3.25
million in costs to the settling parties, or select those factors
and allocate costs in accordance with those factors in the first
instance; (2) determine the extent to which AmeriPride
reimbursed Huhtamaki and Cal-Am for necessary response
costs incurred consistent with the NCP; and (3) apply the
interest provisions in § 9607(a) to determine when interest
began to accrue on the costs paid by AmeriPride.

    VACATED AND REMANDED.