Hobart Corp. v. Waste Management of Ohio, Inc.
2014 U.S. App. LEXIS 13286
6th Cir.2014Background
- The Hobart plaintiffs (Hobart, Kelsey-Hayes, NCR) entered into an Administrative Settlement Agreement and Order on Consent (ASAOC) with the EPA in 2006 to perform an RI/FS and reimburse EPA response costs at the South Dayton landfill site. The ASAOC states it "resolves" the plaintiffs' liability and provides contribution protection.
- Plaintiffs later sued numerous other potentially responsible parties in two consolidated suits (Hobart I and Hobart II), asserting (1) CERCLA cost‑recovery under §107(a)(4)(B), (2) contribution under §113(f)(3)(B), and (3) Ohio unjust‑enrichment.
- District court: dismissed plaintiffs’ §113(f)(3)(B) claims as time‑barred, dismissed unjust‑enrichment claims for failure to state a claim, and granted summary judgment to defendants on plaintiffs’ §107(a)(4)(B) claims, reasoning the ASAOC made plaintiffs eligible only to pursue contribution.
- On appeal, plaintiffs argued the ASAOC was not an "administrative settlement" triggering §113(f)(3)(B), that §113(g)(2) (cost‑recovery limitations) rather than §113(g)(3) applied, and that unjust‑enrichment dismissal improperly relied on federal law.
- Sixth Circuit affirmed: (1) ASAOC is an administrative settlement resolving liability; (2) once §113(f) is available, §107 cost‑recovery is foreclosed; (3) §113(g)(3)’s three‑year contribution limitation applies and was triggered by the ASAOC effective date (Aug. 15, 2006); (4) unjust‑enrichment dismissal under Ohio law was correct because defendants did not cause plaintiffs’ detriment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the ASAOC is an "administrative settlement" under §113(f)(3)(B) that resolves plaintiffs' liability | ASAOC is more like the ITT AOC and does not resolve liability under §113(f)(3)(B), so plaintiffs may pursue §107 cost recovery | ASAOC explicitly says it resolves liability, grants contribution protection, and contains a covenant not to sue; it is an administrative settlement | ASAOC resolves some liability and qualifies as an administrative settlement under §113(f)(3)(B); plaintiffs are limited to §113 relief |
| Whether plaintiffs may pursue §107(a)(4)(B) cost‑recovery after entering the ASAOC | Because plaintiffs directly paid for RI/FS (a removal), §107 applies; §§107 and 113 are not mutually exclusive in this context | Once a settlement triggers §113(f), a PRP must proceed under §113 and cannot pursue §107 cost recovery | §§107 and 113 provide mutually exclusive remedies where §113(f) is available; plaintiffs cannot proceed under §107 |
| Proper statute of limitations for §113(f)(3)(B) claims and triggering event | The three‑ or six‑year periods in §113(g)(2) (for cost recovery/removal) should govern because RI/FS is a removal action | §113(g)(3) governs contribution actions; its three‑year limit is triggered by the effective date/entry of the settlement | §113(g)(3) governs contribution claims; the ASAOC effective date (Aug. 15, 2006) triggered the three‑year limit, so plaintiffs’ 2010 suit was untimely |
| Whether unjust‑enrichment claim should survive dismissal | Plaintiffs allege defendants were unjustly enriched by plaintiffs shouldering RI/FS and EPA costs | Defendants argue plaintiffs voluntarily assumed those costs under the ASAOC and defendants did not cause plaintiffs' detriment | Dismissal affirmed: under Ohio law plaintiffs failed to plead that defendants caused plaintiffs’ detriment or retained an unjust benefit |
Key Cases Cited
- United States v. Atl. Research Corp., 551 U.S. 128 (Sup. Ct.) (distinguishes §107 cost recovery from §113 contribution remedies)
- Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157 (Sup. Ct.) (preconditions and distinction for §113 contribution actions)
- Burlington N. & Santa Fe Ry. Co. v. United States, 556 U.S. 599 (Sup. Ct.) (CERCLA purpose and allocation principles)
- ITT Indus., Inc. v. BorgWarner, Inc., 506 F.3d 452 (6th Cir.) (analyzing when EPA AOC constitutes an administrative settlement)
- RSR Corp. v. Commercial Metals Co., 496 F.3d 552 (6th Cir.) (§113(g)(3) governs contribution limitations)
- Bernstein v. Bankert, 733 F.3d 190 (7th Cir.) (distinguishing §107 vs §113 where settlement terms left liability unresolved)
- Agere Sys., Inc. v. Advanced Envtl. Tech. Corp., 602 F.3d 204 (3d Cir.) (mutual exclusivity of §107 and §113 remedies)
- Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., 596 F.3d 112 (2d Cir.) (statute‑of‑limitations differences between §107 and §113)