CERCLA 113(f) Contribution Claim is the Exclusive Remedy
Roane/Third Party Plaintiffs Holdings Limited ("Roane/Third Party Plaintiffs", or “Plaintiffs") filed a third-party complaint ("TPC") against MeadWestvaco, UCC, and Citigroup ("Defendants"), seeking recovery of costs Roane/Third Party Plaintiffs claimed to have incurred and will continue to incur in connection with environmental impacts and response actions at the Roane/Third Party Plaintiffs Alloys Site ("Site"). Roane/Third Party Plaintiffs' TPC alleged a cost-recovery claim based on Roane/Third Party Plaintiffs' costs incurred pursuant to an Administrative Consent Order ("ACO") under CERCLA's section 107(a)(4), and a contribution claim based on a Consent Decree pursuant to section 113(f)(1) and 113(f)(3)(B). Defendants file a motion to dismiss the TPC on several grounds, in part, alleging that because Plaintiffs incurred response costs associated with an administrative settlement-the AOC- section 113's contribution rights represent Plaintiffs' exclusive remedy. Citing to the potential for an inequitable result should Plaintiffs be permitted to hold the Defendants jointly and severally liable pursuant to a section 107 cost-recovery judgment when Defendants would be barred from cross-claiming for contribution, the Court held that Plaintiffs were limited to a contribution claims against Defendants.
The distinction between a claim pursued under section 107(a) and section 113(f) is that a defendant will be held jointly and severally liable for all response costs unless it can prove a reasonable basis for apportionment, while a defendant facing a section 113(f) contribution action is liable only for its equitable share. Burlington Northern & Santa Fe Ry. Co. v. United States 556 U.S. 599 (2009).
The United States v. Atlantic Research Corp. 551 U.S. 128 (2007) is a starting point for this issue. In analyzing Section 107 claims vis-a-vis Section 113 claims, the Atlantic Research court noted the following: “CERCLA provide[s] for a right to cost recovery in certain circumstances, § 107(a), and separate rights to contribution in other circumstances, §§ 113(f)(1), 113(f)(3)(B)."' (Id. at 2337,quoting Cooper Industries Inc. v. Aviall Services, Inc., 543 U.S. 157, 163 (2004); (emphasis in original).) The Supreme Court also held that a private party did not need to establish its liability to a third party in order to recover under Section 107, and that Section 107 only permits a party to recover costs it actually “incurred" in cleaning a site. (Id. at 2338.) In contrast, a claim under CERCLA's contribution provision, Section 113, arises when a party satisfies a settlement agreement or judgment, in which case that party is not incurring its own response costs, it is reimbursing other parties for costs they incurred. (Id.)
In Atlantic Research, the Supreme Court also observed that CERCLA Section 107 allows a PRP to recover from other PRPs costs incurred in voluntarily cleaning up a contaminated site.
In describing the distinctions between Section 107 and Section 113 claims, the Supreme Court observed that despite the fact that Section 107 and Section 113 provide “two ‘clearly distinct’ remedies," there might be some overlap between the provisions: “For instance, we recognize that a PRP may sustain expenses pursuant to a consent decree following a suit under § 106 or § 107(a) ... In such a case, the PRP does not incur costs voluntarily but does not reimburse the costs of another party" either. (Id. at 2338 n.6.) Critically, the Supreme Court declined to address that situation: “We do not decide whether these compelled costs of response are recoverable under § 113(f), § 107(a), or both." (Id.)
The Atlantic Research decision also abrogated Centerior’s interdependent construction of CERCLA. [Citations omitted.] Centerior held that PRPs seeking costs from other PRPs are necessarily contribution actions, governed under section 113(f). In reaching this conclusion, Centerior read sections 107(a) and 113(f) together, noting that “parties seeking contribution under section 113(f0 must look to section 107 to establish the basis and elements of the liability of the defendants, and well as defenses to that liability." [Citation omitted.] Atlantic Research reiterated that the remedies provided under CERCLA are “clearly distinct." Therefore, the appropriateness of a section 107(a) cost recovery action or a section 113(f) contribution action will be dictated by the facts leading up to the action, not by the identity of the parties.
Atlantic Research did not resolve the issue in this case-whether there is an overlap between section 107(a) and section 113(f) claims. This issue was not previously resolved in the 6th Circuit, but has been ruled on in the 3rd Circuit in the Agere Sys., Inc. v. Advanced Envtl. Tech. Corp. 602 F.3d 204 (3rd Cir. 2010) decision. This Court found the Agere decision persuasive as, in Agere, the plaintiffs’ claims fell within the purview of left unresolved in Atlantic Research-whether in addition to section 113(f) contribution claims, the plaintiffs have section 107(a) claims for expenses sustained pursuant to a consent decree following a CERCLA action. Although the 3rd Circuit agreed with Atlantic Research that some overlap exists between these cost-recovery tracks, the Agere Court found “’the potential for an inequitable result’ remained in that case because the defendants would have been precluded by virtue of section 113(f)(2) from bringing a section 113(f) counterclaim against the plaintiff." Id. at 228. In Agere, because the defendants would have been barred from brining a contribution counterclaim due to the fact that plaintiffs had entered into judicially approved settlements with EPA-the Agere Court could not permit defendants to be exposed to joint and several liability without the right to be pursue contribution counterclaims as that “perverse" result was inconsistent with CERCLA’s goal of making polluters pay. Id. at 229.
The same rational applied to Roane/Third Party Plaintiff’s third-party action. As in Agere, Plaintiffs are protected from contribution counterclaims by virtue of the terms of the AOC. “This means that if plaintiffs were permitted to pursue section 107(a) claims for joint and several liability against defendants, defendants would be precluded from pursuing section 113(f) counterclaims against plaintiffs." The difference between consent decrees in Agere and the AOC here, was not meaningful.
This case implicates the still developing distinctions between liability under CERCLA's §107(a) and §113(f), and the broad reaching effect that the Agere decision will have on PRPs who settle with the government pursuant to sections 106 of 107(a) of CERCLA. First, a settling PRP hoping to recover part of its costs against non-settling PRPs in a later contribution action has to be mindful that the statute of limitations does not expire on the government's potential claims against these non-settling PRPs by the time the contribution cause of action first accrued. Second, a settling PRP will only have a contribution action against non-settling PRPs under §113(f).