US Supreme Court Rules that CERCLA-Specific Settlement is a Pre-Requisite to a CERCLA Contribution Claim
August 30, 2021
In May 2021, the Supreme Court ruled in Territory of Guam v. United States, 593 U.S. __ (2021), on the issue of whether a settlement resolving environmental liabilities was sufficient to establish a right of contribution for a settling-party against a non-settling responsible party pursuant to the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”), 42 U.S.C §9613(f)(3)(B). The Court held that to trigger contribution rights under CERCLA 113(f)(3)(B), settlement must resolve a CERCLA-specific liability.
Guam v. US arises from a dispute regarding environmental responsibility for the Ordot Dump – described as a “280-foot mountain of trash,” that at various times was owned and operated by both the US Navy and Guam. The Navy constructed the dump in the 1940’s and allegedly disposed of hazardous waste at the dump for several decades. Ownership of the dump was later ceded to Guam. Upon discovery of the environmental contamination emanating from the Dump and Guam’s non-compliance with environmental regulations, EPA sued Guam pursuant to the Clean Water Act, alleging Guam was discharging wastes to the waters of the United States. Ultimately, a consent decree was entered between EPA and Guam in 2004, terminating the litigation (the “Consent Decree”). As part of the Consent Decree, Guam was required to pay a civil penalty and perform certain remedial tasks. The Consent Decree documented that Guam’s compliance was in full settlement and satisfaction of the claims of the United States as alleged in the compliant; claims made under the Clean Water Act.
In 2017, Guam seeking to recover the costs of cleanup in response to the Consent Decree, sued the United States pursuant to CERCLA. Guam forwarded two-theories; (1) cost recovery under CERCLA §107(a) — seeking recovery against a person that at the time of disposal of hazardous substances owned or operated the disposal facility, and (2) a contribution action under CERCLA §113(f)(3)(B), authorizing a party that has resolved its liability to the United States for costs associated with a response action to seek contribution from a responsible party that has not settled its liability.
The DC Circuit found that Guam’s CERCLA §107(a) claim could not proceed if Guam could assert a contribution claim pursuant to CERCLA §113(f)(3)(B). The Circuit then held that Guam’s CERCLA §113(f)(3)(B) claim was time-barred as the 3-year statute of limitations for the contribution claim began to run with the 2004 Consent Decree.
In its arguments before the Court, Guam withdrew from its CERCLA §113(f)(3)(B) claim. Guam argued that it never established a contribution claim because it had only resolved its liability under the Clean Water Act, and to establish a contribution claim, settlement must have been CERCLA-specific. Therefore, Guam contended, it was free to pursue cost recovery under CERCLA §107(a). The Court agreed, parsing the “reticulated statutory matrix of environmental duties and liabilities,” its “interlocking language and structure,” to conclude that, “CERCLA contribution requires resolution of a CERCLA-specific liability.”
From Guam’s perspective, the result was equitable, and they may now pursue recovery from one of the alleged responsible parties. From a practice perspective, Guam v. US, helps to clarify how and when contribution rights are established.