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U.S. Supreme Court Clarifies Scope of CERCLA Contribution Claims by Settling Parties

On May 24, 2021, the United States Supreme Court ruled in Territory of Guam v. United States that a party’s claim for contribution under Section 113(f)(3)(B) of the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. § 9613(f)(3)(B), and therefore the commencement of the limitations period for such a claim, requires resolution specifically of CERCLA liability rather than of liability under other environmental statutes implicating a cleanup. The case arose out of Guam’s efforts to recover costs under CERCLA from the U.S. government for remediation of contamination at the Ordot Dump, which both the U.S. Navy and Guam used as a landfill from the 1940s until the late twentieth century. In 2004, Guam entered into a consent decree with the U.S. to resolve alleged violations of the Clean Water Act relating to the Dump and was ordered to remediate the site; however, the settlement specifically left Guam open to future suits under other statutes, including CERCLA. In 2017, Guam brought a CERCLA action against the Navy, alternatively for cost recovery under Section 107 and for contribution under Section 113(f)(3)(B), to recover the costs of remediating the site.

At issue was the language in Section 113(f)(3)(B), which states that “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 may seek contribution from any person who is not party to” such a settlement. The U.S. argued that such a “settlement” could include a non-CERCLA settlement involving a cleanup. According to this logic, because Guam had a contribution claim against the U.S. but failed to bring it within three years of the date of the Clean Water Act settlement—the limitations period for such actions— Guam was time-barred from asserting its contribution claim. Pursuant to precedent holding that Section 107 and Section 113 are mutually exclusive remedies, Guam could therefore not seek cost recovery.

The Supreme Court disagreed, reversing the decision of the U.S. Court of Appeals for the D.C. Circuit that ruled in favor of the U.S. on this question. The D.C. Circuit noted that the language of Section 113(f)(3)(B) “contains no . . . CERCLA-specific language.” But the Supreme Court, also relying on CERCLA’s statutory language, looked at Section 113 in its entirety and concluded that it was meant to limit the availability of contribution claims only to settlements of CERCLA liabilities.

The Guam decision confirms longstanding Second Circuit precedent about the scope of Section 113(f)(3)(B), see W.R. Grace & Co.–Conn. v. Zotos Int’l, Inc., 559 F.3d 85 (2d Cir. 2009), and resolves a Circuit split on this question. The case leaves open the opportunity for parties that have resolved non-CERCLA liability with the government to seek cost recovery under Section 107, even where those settlements require remedial actions. It also reduces ambiguity about the commencement of the limitations period for CERCLA actions in such cases.

The Supreme Court did not reach another question that arose during the litigation: whether a party who has entered into an administrative CERCLA settlement may only bring a Section 113 claim. This has proven to be, if anything, a thornier issue for the courts, particularly in cases where a party asserts it has incurred costs both as the result of a settlement and beyond its settlement obligations.

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