341 F. Supp. 3d 74
D.C. Cir.2018Background
- The Ordot Landfill in Guam, established during U.S. Naval administration, accepted military and civilian waste (including hazardous substances) and leached contaminants into nearby waterways; EPA placed the site on the NPL in 1983.
- EPA sued Guam under the Clean Water Act in 2002; the parties entered a 2004 consent decree requiring Guam to close the landfill, pay modest penalties, and perform remedial measures, but the decree stated it was entered "without any finding or admission of liability."
- The 2004 consent decree said it settled the civil judicial claims in the CWA complaint through the date of lodging, but it also contained broad reservation-of-rights language preserving the United States’ ability to bring other claims and conditioned the covenant on Guam’s performance.
- Guam closed the landfill in 2011 and began remediation work in 2013; remediation costs are expected to exceed $160 million.
- Guam sued the United States under CERCLA seeking (1) cost recovery under Section 107(a), (2) a declaratory judgment of future liability, and (3) alternatively, contribution under Section 113(f)(3)(B).
- The United States moved to dismiss, arguing the 2004 consent decree resolved Guam’s liability and thus Guam’s remedy is limited to a time-barred contribution claim under Section 113(f)(3)(B); the court denied dismissal of the Section 107(a) cost-recovery claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2004 consent decree "resolved" Guam's liability under CERCLA §113(f)(3)(B) | The decree did not resolve liability because it disclaimed any admission of liability, reserved rights, and limited its scope to the CWA | The decree settled Guam's liability for the claims addressed and thus triggered §113(f)(3)(B) contribution remedy | The decree did not resolve liability; §113(f)(3)(B) was not triggered, so §107(a) cost-recovery remains available |
| Whether conditional covenants, non‑admissions, and reservation clauses prevent a settlement from "resolving" liability | Such clauses show parties intended liability to remain open; settlement of cleanup obligations alone is insufficient | Settlement of cleanup obligations (even if conditional) can resolve liability and trigger contribution | Court follows Sixth/Seventh Circuit approach: conditional covenants, non‑admissions, and broad reservations weigh against finding liability resolved |
| Whether Guam is limited to a §113 contribution claim with a 3‑year limitations period | Guam argues it never became eligible for §113(f)(3)(B), so the 3‑year contribution clock never started | United States contends the 2004 decree started the §113 clock and Guam’s claim is time‑barred | Because the decree did not resolve liability, the contribution statute of limitations did not start; §107(a) suit not time‑barred at this stage |
| Proper interpretive approach to "resolved its liability" in §113(f)(3)(B) | Interpret the phrase by reference to the plain meaning and the specific terms of the settlement | Argues a broader, policy‑driven interpretation supports finding resolution despite disclaimers | Court adopts view that "resolved" requires the agreement to decide/determine liability; examination is case‑specific and contract‑term focused |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard for facial plausibility)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must raise claim above speculative level)
- United States v. Atlantic Research Corp., 551 U.S. 128 (2007) (distinguishing §107 cost‑recovery and §113 contribution remedies)
- Bernstein v. Bankert, 733 F.3d 190 (7th Cir. 2013) (settlement terms with non‑admissions and conditional covenants do not necessarily resolve liability)
- Asarco LLC v. Atlantic Richfield Co., 866 F.3d 1108 (9th Cir. 2017) (interpretation that certain settlements can resolve liability; court discussed)
- Florida Power & Light Co. v. FirstEnergy Corp., 810 F.3d 996 (6th Cir. 2015) (broad reservation clauses and conditioned resolution of liability defeat §113 trigger)
- ITT Industries, Inc. v. BorgWarner, Inc., 506 F.3d 452 (6th Cir. 2007) (AOC did not resolve liability where EPA reserved rights and plaintiff did not admit liability)
- Dravo Corp. v. Zuber, 13 F.3d 1222 (8th Cir. 1994) (discussing resolution in context of de minimis settlements)
- United States v. Bestfoods, 524 U.S. 51 (1998) (CERCLA background and strict liability principles)