Bernstein v. Bankert
733 F.3d 190
| 7th Cir. | 2012Background
- Enviro-Chem was an Indiana waste-handling corporation controlling three sites north of Zionsville; it ceased operations in the early 1980s, leaving pollutants behind.
- Trustees are the Third Site Trust Fund's administrators seeking cleanup-cost recovery or liability determinations from the Bankerts and their insurers.
- EPA identified contamination at Third Site (VOC/SVOC in soil, groundwater, and surface seeps; Finley Creek contamination affecting Indianapolis drinking water) and began removal actions.
- EPA entered 1999 and 2002 Administrative Orders by Consent (AOCs) dividing duties between Non-Premium and Premium Respondents, with a Trust overseeing funding and oversight; Bankerts were Non-Premium Respondents who allegedly failed to fund the Trust.
- Plaintiffs filed suit in 2008 for CERCLA §9607(a) cost recovery, CERCLA §9613(f) contribution, ELA recovery, and declaratory relief; the district court dismissed Counts I–V and found Count VII moot, prompting appeals and rehearing to address EPA-related issues.
- The panel amended the prior opinion, reinstating some CERCLA and ELA claims and addressing whether the AOC-based actions could be pursued as cost recovery or contribution, with related implications for timeliness and settlement-related liability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| CERCLA claim type and timeliness | Trustees argue a timely §9607(a)(4)(B) cost-recovery claim (and/or a timely §9613(f)(1) contribution, where appropriate). | Bankerts contend only a §9613(f) contribution claim is available, and it is time-barred; or §9607(a) costs were improperly claimed. | Count I reinstated as timely cost recovery for 2002 AOC costs; Count II revived as related declaratory relief. |
| Effect of 1999 and 2002 AOCs on §9613(f)(3)(B) availability | Settlement with EPA can trigger §9613(f)(3)(B) rights upon liability “resolution.” | Settlement alone suffices to create §9613(f)(3)(B) claims?; the agreement here did not immediately resolve liability. | 1999 AOC supports a §9613(f)(3)(B) contribution action; 2002 AOC did not resolve liability, so costs incurred under 2002 AOC are recoverable under §9607(a) (timely). |
| Indiana ELA claim timeliness | ELA claim should be timely under the ten-year catch-all or applicable statute based on nature of the claim. | ELA claim timing governed by Indiana limitations; some argue six-year property-damage period may apply. | ELA claim timely under the ten-year catch-all; the nature of the claim is contribution-like, not property damage, and timely as to damages incurred after 1998. |
| Declaratory judgment claim against insurers (Count VII) | Reinstatement of CERCLA/ELA claims implies live coverage questions; insurer should face declaratory relief. | Preclusion concerns and mootness; cross-appeal should be limited; coverage questions may depend on site-specific facts. | Count VII not moot; insurer cross-appeal appropriately considered; preclusion analyses upheld in part. |
Key Cases Cited
- Burlington Northern & Santa Fe Ry. Co. v. United States, 556 U.S. 599 (Supreme Court 2009) (CERCLA purpose and private-rights alignment; guidance on allocation of cleanup costs)
- Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157 (Supreme Court 2004) (Constitutional interpretation of §9613(f) rights; limits on broad reading of contribution actions)
- Atlantic Research Corp. v. United States, 551 U.S. 128 (Supreme Court 2007) (Confirms overlap and distinct remedies under §107(a) and §113(f) post-SARA; limits on overlapping remedies)
- Niagara Mohawk Power Corp. v. Chevron USA, Inc., 596 F.3d 112 (2d Cir. 2010) (Discusses contribution rights post-SARA; settlement-resolved liability prerequisite)
- RSR Corp. v. Commercial Metals Co., 496 F.3d 552 (6th Cir. 2007) (Case on immediate vs. conditional liability resolution in settlements (distinguishing immediate release))