Gravel2Gavel Construction & Real Estate Law Blog
On August 10, the U.S. Court of Appeals for the Ninth Circuit decided the case of ASARCO LLC v. Atlantic Richfield Company, which involves the ongoing liability to clean up the East Helena Superfund Site, located “in and around an industrial area in Lewis and Clark County, Montana.” The Ninth Circuit, vacating the U.S. District Court in Montana’s grant of summary judgment, held that
[Ansarco’s] 1998 RCRA Decree did not resolve Asarco’s liability for at least some of its response obligations under that agreement. It therefore did not give rise to a right to contribution under CERCLA § 113(f)(3)(B). By contrast, the 2009 CERCLA Decree did resolve Asarco’s liability, and Asarco has brought a timely action for contribution under that agreement.
The East Helena Superfund Site is the site of a former lead smelter (operated by Asarco LLC) and zinc fuming plant (operated for some time by Atlantic Richfield Company’s (ARCO) predecessor, Anaconda Mining Company’s (Anaconda)). In the late 1980s, the Environmental Protection Agency identified Asarco and Anaconda as potentially responsible parties (PRPs) under CERCLA, “meaning—in CERCLA vernacular—that they bore at least some responsibility for the contamination.”
While the site was placed on the National Priorities List (NPL) in 1984, in 1998, the U.S. brought claims against Asarco for civil penalties and injunctive relief under RCRA and the Clean Water Act. Asarco entered into a separate Resource Conservation and Recovery Act (RCRA) consent decree, which required extensive cleanup by means of a comprehensive RCRA Corrective Measures order. Then in 2005, Asarco filed for bankruptcy protection. In 2009, the bankruptcy court entered a CERCLA consent decree between Asarco, the U.S. and Montana. This decree fully satisfied Asarco’s 1998 RCRA obligations.
In 2012, Asarco filed a CERCLA contribution claim against ARCO, which argued that the time had long past since Asarco could maintain such a contribution action.
CERCLA § 113(f) provides that after a party has, pursuant to a settlement agreement, resolved its liability for a ‘response’ action or the costs of such an action, that party may seek contribution from any person who is not a party to the settlement.
CERCLA § 113(g)(3) “imposes a three-year statute of limitations after entry of a judicially approved settlement, during which a party may bring a contribution action.”
The District Court agreed with ARCO that Asarco’s claim was extinguished by the relevant Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) statute of limitations.
The Ninth Circuit disagreed and vacated the lower court’s ruling, answering three issues of first impression
- “[W]hether a settlement agreement entered into under an authority other than CERCLA may give rise to a CERCLA contribution action.”
- “Whether a ‘corrective measure’ under a different environmental statute, the [RCRA], qualifies as a ‘response’ action under CERCLA.”
- “[W]hat it means for a party to ‘resolve[] its liability’ in a settlement agreement—a prerequisite to bringing a § 113(f)(3)(B) contribution action.”
The District Court answered the first two questions in the affirmative and the Court of Appeals agreed. However, the Ninth Circuit found that the District Court “erred in dismissing Asarco’s action on statute of limitations grounds.” The Ninth Circuit held that a RCRA consent decree may give rise to a CERCLA contribution claim (the Court of Appeals acknowledges there is a split in the circuits on this issue), and that the 1998 RCRA consent decree obligated Asarco to take a “response action” in the form of “corrective measures.” But, since Asarco did not fully resolve its CERCLA obligations until the 2009 bankruptcy-induced CERCLA consent decree was entered, the relevant CERCLA statute of limitations had not run by the time the 2012 CERCLA contribution claim was filed.