937 F.3d 928
7th Cir.2019Background
- Refined Metal Corp. acquired a contaminated lead-smelter site in Beech Grove, Indiana, in 1980 and entered a 1998 consent decree with EPA and IDEM requiring site closure, cleanup, and payment of a fine.
- The 1998 Decree included covenants not to sue by the agencies that took effect upon entry but reserved certain statutory rights; parties dispute the scope of those covenants.
- In 2017 Refined sued NL Industries to recover part of the cleanup costs; NL moved to dismiss as time-barred.
- The district court treated Refined’s claim as a §113(f)(3)(B) contribution action (3-year limitations period) and dismissed it as untimely; it relinquished supplemental jurisdiction over Refined’s Indiana Environmental Legal Actions claims.
- On appeal, Refined argued the suit was a §107(a) cost-recovery action (longer limitations), and advanced three principal arguments: (1) no admission of liability in the Decree; (2) the Decree did not resolve CERCLA-specific liability; (3) lack of common liability/joint tortfeasor status with NL.
- The Seventh Circuit affirmed, holding the 1998 Decree triggered §113(f)(3)(B), the contribution limitations period expired, and the district court properly relinquished supplemental jurisdiction (and Refined waived any defect-correction attempts on diversity jurisdiction).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 1998 Decree triggered a §113(f)(3)(B) contribution claim (starting the 3-year limitations period) | Decree did not "resolve" liability because Refined refused to admit liability; therefore §113(f)(3)(B) did not apply and §107(a) cost-recovery governs | The immediately effective covenant not to sue in the Decree resolved at least some liability, so §113(f)(3)(B) applies | Held: §113(f)(3)(B) applies despite lack of admission; immediate covenant not to sue is dispositive, so contribution clock ran and suit is time-barred |
| Whether a qualifying settlement must resolve CERCLA-specific liability (vs. liability under any statute/state law) | Settlement must resolve CERCLA-specific liability to trigger §113(f)(3)(B) | §113(f)(3)(B) covers settlements that resolve some liability for a response action or costs under federal or state law; CERCLA-specific resolution is not required | Held: No CERCLA-specific requirement; settlement that resolves some liability to U.S. or a State suffices to trigger §113(f)(3)(B) |
| Whether Refined could seek contribution from NL given alleged lack of common liability / joint tortfeasor status | Refined lacked "common liability" with NL (so contribution not available) because NL was a non-settling party and the Decree did not find NL liable | A §113(f)(3)(B) settling party may seek contribution from non-settling parties; it was Refined’s burden to timely prove NL’s liability and share | Held: Argument unpersuasive and waived—Refined failed to raise it below; contribution remedy available to settleing party to pursue NL if timely |
| Whether the district court properly relinquished supplemental jurisdiction over state-law ELA claims and dismissed for defective diversity pleading | Refined wanted state claims to proceed in federal court; asserted diversity jurisdiction and sufficient amount in controversy | District court found federal claims dismissed and sensible to relinquish supplemental jurisdiction; also found Refined failed to plead amount-in-controversy exclusive of interest/costs | Held: Affirmed—district court did not abuse discretion in relinquishing supplemental jurisdiction; Refined waived challenge to diversity pleading and failed to seek amendment |
Key Cases Cited
- NCR Corp. v. George A. Whiting Paper Co., 768 F.3d 682 (7th Cir.) (immediately effective covenant not to sue can trigger §113(f)(3)(B))
- Bernstein v. Bankert, 733 F.3d 190 (7th Cir.) (settlement not triggering §113(f)(3)(B) where covenant not to sue was conditional and not immediately effective)
- United States v. Atlantic Research Corp., 551 U.S. 128 (U.S.) (discussion of contribution and cost-recovery remedies under CERCLA)
- Meghrig v. KFC Western, 516 U.S. 479 (U.S.) (RCRA does not authorize private recovery for completed cleanups that no longer present ongoing endangerment)
- Asarco LLC v. Atlantic Richfield Co., 866 F.3d 1108 (9th Cir.) (circuit treating non-CERCLA-specific settlements as triggering §113(f)(3)(B))
- Trinity Indus., Inc. v. Chicago Bridge & Iron Co., 735 F.3d 131 (3d Cir.) (same)
- Consolidated Edison Co. of N.Y. v. UGI Utilities, 423 F.3d 90 (2d Cir.) (contrasting view requiring explicit CERCLA resolution)
- Niagara Mohawk Power Corp. v. Chevron U.S.A., 596 F.3d 112 (2d Cir.) (states have independent CERCLA causes of action)
- Powers v. Fultz, 404 F.2d 50 (7th Cir.) (pleading requirements for amount-in-controversy in diversity cases)