Florida Power Corp. v. FirstEnergy Corporation, 810 F.3d 996

Background

Progress Energy (plaintiff) operated two former coal-gasification sites in Florida (Sanford and Orlando); EPA identified contamination in the 1990s.
Plaintiff entered into Administrative Orders by Consent (AOCs) with EPA: Sanford AOC (1998) and Orlando AOC (2003) to perform RI/FS work and to reimburse specified past response costs.
AOCs include payment obligations, covenants not to sue that are conditioned on complete and satisfactory performance, reservation-of-rights language, and (in the Orlando AOC) a non‑admission‑of‑liability clause.
Plaintiff later incurred additional remediation costs and sued successor defendant under CERCLA for cost recovery and contribution in 2011; defendant moved to dismiss as time‑barred, arguing the AOCs were administrative settlements that triggered §113(f)(3)(B)’s 3‑year limitations period.
The district court initially split its view but, on reconsideration after Hobart, dismissed plaintiff’s contribution claim as time‑barred. The Sixth Circuit majority reversed, holding the AOCs are not administrative settlements that resolved plaintiff’s liability.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the 1998 Sanford and 2003 Orlando AOCs constitute an “administrative settlement” under CERCLA §113(f)(3)(B) (i.e., resolved plaintiff’s liability to the U.S.).	The AOCs do not resolve liability because resolution is conditioned on complete performance, include non‑admission language, and preserve EPA enforcement rights; thus the 3‑year contribution limitations period was not triggered.	The AOCs resolved at least some liability (e.g., by payment of past costs and mutual promises), so §113(f)(3)(B)’s 3‑year limitations period began at the AOCs’ effective dates.	Reversed district court: AOCs do not constitute administrative settlements because resolution of liability is conditioned on complete performance and therefore did not trigger §113(f)(3)(B).
Whether conditional covenants, reservation of rights, or non‑admission clauses negate an intent to resolve liability.	Conditional covenants, explicit reservation of rights, and non‑admission clauses (or silence) show parties intended not to resolve liability immediately.	Those contractual features do not prevent finding a settlement resolved liability where parties exchanged enforceable promises; RSR precedent supports that exchange of promises can resolve liability.	Court relied on AOC language: conditioning resolution on full performance and broad reservation/covenants support finding no immediate resolution of liability here.
Whether RSR Corp. v. Commercial Metals Co. controls (i.e., an exchange of promises can resolve liability and statute runs from entry of settlement).	Plaintiff argued more recent Hobart/ITT/Bernstein line controls and distinguishes RSR on facts; RSR is not dispositive because it did not analyze consent‑decree terms the same way.	Defendant relied on RSR to say conditional promises still resolve liability and limitations run from entry.	Majority distinguished RSR, adopting Hobart/ITT/Bernstein approach: focus on whether liability was resolved as of the effective date; RSR did not foreclose that analysis.
Effect of Hobart decision (2014) and EPA model AOC changes (post‑2005) on analysis of older AOCs.	Plaintiff: pre‑2005 AOCs more like ITT/Bernstein and should be interpreted by their terms; EPA memos are parol evidence and not consulted absent ambiguity.	Defendant: Hobart signals a broad approach to treating some AOCs as administrative settlements; post‑2005 forms tend to resolve liability.	Court used Hobart as guidance but held these pre‑2005 AOCs comport with ITT/Bernstein—conditioning and reservations distinguish them from Hobart ASAOC, so Hobart did not mandate dismissal.

Key Cases Cited

ITT Indus., Inc. v. BorgWarner, Inc., 506 F.3d 452 (6th Cir. 2007) (pre‑2005 AOC did not resolve liability where EPA reserved broad rights and AOC disclaimed admission of liability)
Bernstein v. Bankert, 733 F.3d 190 (7th Cir. 2013) (AOC that conditioned covenants on complete performance did not resolve liability until performance; signing alone did not trigger contribution limitations period)
Hobart Corp. v. Waste Mgmt. of Ohio, Inc., 758 F.3d 757 (6th Cir. 2014) (post‑2005 ASAOC that expressly called itself an administrative settlement and stated liability was resolved as of the effective date did trigger §113(f)(3)(B))
RSR Corp. v. Commercial Metals Co., 496 F.3d 552 (6th Cir. 2007) (judicial consent decree with exchange of promises held to have resolved liability; court held limitations runs from entry of settlement)
United States v. Atlantic Research Corp., 551 U.S. 128 (2007) (distinguishing cost‑recovery and contribution remedies under CERCLA)
Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157 (2004) (statutory prerequisites for contribution actions under CERCLA)