*3 CALLAHAN, Circuit Judge:
Section
113(f)(3)(B)
of
the Comprehensive
Environmental Response, Compensation, and Liability Act
of 1980 (“CERCLA”) allows persons who have taken
actions to clean up hazardous waste sites to seek monetary
contribution from other parties who are also responsible for
the contamination. 42 U.S.C. § 9613(f)(3)(B). The
provision provides that a person that has “resolved its
liability” for “some or all of a response action or for some or
all of the costs of such action” pursuant to a settlement
agreement with the government “may seek contribution
from any person who is not party to a settlement.” In
other words, “a [potentially responsible party] that pays
money to satisfy a settlement agreement . . . may pursue
§ 113(f) contribution.”
United States v. Atl. Research Corp.
,
This case presents three issues of first impression in our circuit. First, we must decide whether a settlement agreement entered into under an authority other than CERCLA may give rise to a CERCLA contribution action. Second, we must decide whether a “corrective measure” under a different environmental statute, the Resource Conservation and Recovery Act (“RCRA”), qualifies as a “response” action under CERCLA. And third, we must decide what it means for a party to “resolve[] its liability” in a settlement agreement—a prerequisite to bringing a § 113(f)(3)(B) contribution action. Our answers to these legal questions guide our inquiry into whether a 1998 settlement agreement under RCRA (the “1998 RCRA Decree”) between Appellant Asarco LLC (“Asarco”) and the United States, which was approved and entered by a federal district court, triggered the three-year statute of limitations for Asarco to bring a § 113(f)(3)(B) contribution action.
In this contribution action against Appellee Atlantic Richfield Company (“Atlantic Richfield”), the district court answered the first two questions in the affirmative but did not address the third. On Atlantic Richfield’s motion for summary judgment, the district court concluded that Asarco’s action accrued with entry of the 1998 RCRA Decree. Because Asarco brought its action in 2012—well beyond the three-year statute of limitations under CERCLA—the district court determined that its claim was time-barred.
We agree with the district court on the first two issues but, as to the third, conclude that Asarco did not “resolve[] its liability” under the 1998 RCRA Decree. Asarco therefore could not have brought its contribution action in 1998, and the statute of limitations did not begin to run with entry of the 1998 RCRA Decree. By contrast, a later, 2009 agreement, on which Asarco bases its present contribution action, did resolve Asarco’s liability. And because Asarco filed that action within the three-year limitations period measured against entry of the 2009 agreement, it is also timely. The district court therefore erred in dismissing Asarco’s action on statute of limitations grounds. Accordingly, we vacate the district court’s judgment and remand for further proceedings to determine whether Asarco is entitled to contribution for the response costs it incurred under the 2009 agreement.
I. Factual Background
The East Helena Superfund Site (the “Site”) is located in and around an industrial area in Lewis and Clark County, Montana. The Site includes the City of East Helena, Asarco’s former lead smelter, and a nearby zinc fuming plant that was operated by Atlantic Richfield’s predecessor, Anaconda Mining Company (“Anaconda”), and later by Asarco.
The Site has been a locus of industrial production for more than a century, resulting in decades of hazardous waste *5 6 A SARCO V . A TLANTIC R ICHFIELD releases. The lead smelter, which Asarco operated from 1888 until 2001, discharged toxic compounds into the air, soil, and water, such as lead, arsenic, and other heavy metals. Asarco alleges that the zinc fuming plant, which Anaconda operated from 1927 to 1972, also contributed to the contamination. Asarco purchased the zinc fuming plant in 1972 and apparently ceased operations in 1982. [1] In 1984, the United States Environmental Protection Agency (“EPA”) added the Site to the National Priorities List under CERCLA.
In the late 1980s, EPA identified Asarco and Anaconda as potentially responsible parties (“PRPs”) under CERCLA, meaning—in CERCLA vernacular—that they bore at least some responsibility for the contamination. See 42 U.S.C. § 9607(a). EPA sought remedial action only from Asarco, which resulted in three CERCLA settlements between Asarco and the United States in the late 1980s and early 1990s. Those early settlements are not at issue in this litigation.
In 1998, the United States brought claims against Asarco for civil penalties and injunctive relief under RCRA and the Clean Water Act (“CWA”). The complaint alleged that Asarco had illegally disposed of hazardous waste at the Site, and sought an order requiring Asarco to, inter alia , “conduct corrective action pursuant to Section 3008(h) of RCRA, 42 U.S.C. § 6928(h) . . . .” A “corrective action” under RCRA is a type of “response measure” necessary to protect human health or the environment, see 42 U.S.C. § 6928(h), [1] It is unclear whether the plant remains active. Asarco and Atlantic Richfield both contend that the plant ceased operations in 1982, but the parties rely on authority from 1997, which states that “Asarco continues to operate the zinc fuming plant.”
and is “designed to clean up contamination,” J. Stanton Curry, James J. Hamula, Todd W. Rallison, The Tug-of-War Between RCRA and CERCLA at Contaminated Hazardous Waste Facilities , 23 Ariz. St. L.J. 359, 369 (1991).
Asarco settled the case with the United States. The settlement agreement was approved by the federal district court in Montana, and entered on the court’s docket as a consent decree. The 1998 RCRA Decree assessed civil *6 penalties against Asarco and also required Asarco to take certain remedial actions to address past violations. Those actions included “[c]orrective [m]easures” to, inter alia , “remediate, control, prevent, or mitigate the release, potential release or movement of hazardous waste or hazardous constituents into the environment or within or from one media to another.”
Despite the 1998 RCRA Decree’s lofty goals, Asarco failed to meet its cleanup obligations. Further complicating matters, in 2005 Asarco filed for Chapter 11 bankruptcy protection. The United States and Montana filed proofs of claim in the bankruptcy proceeding asserting joint and several liability claims under CERCLA. On June 5, 2009, the bankruptcy court entered a consent decree under CERCLA (the “CERCLA Decree”) between Asarco, the United States, and Montana. The CERCLA Decree established a custodial trust for the Site, and turned over cleanup responsibility to a trustee. As part of the agreement, Asarco paid $99.294 million (plus other expenses), which, inter alia , “fully resolved and satisfied” its obligations under the 1998 RCRA Decree. [2]
[2] Asarco also paid $5 million to Montana to settle a claim for natural resource damages.
II. Procedural Background
On June 5, 2012, Asarco brought an action against Atlantic Richfield under CERCLA § 113(f)(3)(B), seeking contribution for its financial liability under the CERCLA Decree. Atlantic Richfield filed a motion for summary judgment, arguing that Asarco’s action was untimely because the three-year statute of limitations under § 113 began running with the 1998 RCRA Decree. Asarco countered that “RCRA, a statute that does not authorize contribution claims, [cannot] trigger the limitations period under another law, CERCLA.” Asarco also argued that the CERCLA Decree created “new” and “different” work obligations from the 1998 RCRA Decree, thereby triggering a new statute of limitations period for at least the costs associated with those new obligations.
The district court granted summary judgment for Atlantic Richfield and dismissed the case. It concluded that the plain language of CERCLA § 113(f)(3)(B) requires only that a settlement agreement address a “response action,” not that it be entered into under CERCLA. The court also determined that Asarco had incurred response costs under *7 the 1998 RCRA Decree, and therefore held that the 1998 RCRA Decree provided the necessary predicate for a CERCLA contribution action. Finally, the court rejected Asarco’s argument that the CERCLA Decree contained matters not addressed by the 1998 RCRA Decree. Accordingly, it held that the CERCLA Decree did not reset the statute of limitations for any response costs incurred under that agreement, and deemed Asarco’s claim for contribution untimely. Asarco appealed.
III. Statutory Context
Congress enacted CERCLA in 1980 with two goals in
mind: (i) to encourage the “‘expeditious and efficient
cleanup of hazardous waste sites,’” and (ii) to ensure that
those responsible for hazardous waste contamination pay for
the cleanup.
Carson Harbor Vill., Ltd. v. Unocal Corp.
,
“Response” is a term of art under CERCLA and means “remove, removal, remedy, and remedial action.” 42 U.S.C. § 9601(25). Congress even gave those defining terms their own definitions. A “removal” means, inter alia , “the cleanup or removal of released [3] hazardous substances from the environment” and any actions that may be necessary “in the event of the threat of release of hazardous substances into [3] With exceptions, a “release” under CERCLA means “any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment (including the abandonment or discarding of barrels, containers, and other closed receptacles containing any hazardous substance or pollutant or contaminant) . . . .” 42 U.S.C. § 9601(22).
10 A SARCO V . A TLANTIC R ICHFIELD the environment.” Id. § 9601(23). A “remedial action” means, inter alia , “actions consistent with permanent remedy taken instead of or in addition to removal actions . . . to prevent or minimize the release of hazardous substances so that they do not migrate to cause substantial danger to present or future public health or welfare or the environment.” § 9601(24). Put simply, a “response action” covers a broad array of cleanup activities.
Section 107(a) is limited to recovery of response costs
the suing PRP itself directly incurred.
See Atl. Research
,
551 U.S. at 139 (“[Section] 107(a) permits recovery of
cleanup costs but does not create a right to contribution.”).
At the time of enactment, CERCLA included no express
right to contribution for a PRP that did not itself incur
response costs, but that reimbursed another party that did
incur response costs.
See Cooper Indus., Inc. v. Aviall
Servs., Inc.
, 543 U.S. 157, 162 (2004). Such a situation
arises under two circumstances: (i) where the PRP is the
defendant in a CERCLA § 106 or § 107(a) action and a
money judgment issues against it; or, as with the CERCLA
Decree in the matter before us, (ii) where the PRP pays the
United States’ or a State’s response costs pursuant to a
settlement agreement.
See id.
at 160–61;
Atl. Research
,
Congress added an express right to contribution with the Superfund Amendments and Reauthorization Act of 1986 (“1986 CERCLA Amendments”), Pub. L. No. 99–499, to address these two circumstances. See Atl. Research , 551 U.S. at 132. Section 113(f)(1) captures the first, and provides that “[a]ny person may seek contribution from any other person who is liable or potentially liable under [§ 107(a)] of this title, during or following any civil action . . . under [§ 106 or § 107(a)] of this title.” 42 U.S.C. *9 § 9613(f)(1). Section 113(f)(1) is not at issue in the instant matter, but, as discussed infra in Part IV.A, it is relevant to resolving the first issue we must decide: whether the 1998 RCRA Decree may give rise to a CERCLA contribution action. Section 113(f)(3)(B), which is directly at issue, captures the second scenario, and provides that
[a] person who has resolved its liability to the United States or a State for some or all of a response action or for some or all of the costs of such action in an administrative or judicially approved settlement may seek contribution from any person who is not party to a settlement [that immunizes such person from a contribution action]. § 9613(f)(3)(B). In other words, “a PRP that pays money
to satisfy a settlement agreement or a court judgment may pursue § 113(f) contribution.” Atl. Research , 551 U.S. at 139; see Cooper , 543 U.S. at 163, 167 (recognizing that § 113(f)(1) and § 113(f)(3)(B) set forth separate rights of contribution).
While § 107(a) cost recovery actions and § 113(f)
contribution actions offer “complementary yet distinct”
remedies, there is overlap between them.
Atl. Research
,
Sections 107(a) and 113(f) have different statutes of
limitations periods. An action for “recovery of . . . costs”
under § 107(a) “must be commenced . . . within 6 years after
initiation of physical on-site construction of the remedial
action” or “within 3 years after the completion of the
removal action.” 42 U.S.C. § 9613(g)(2)(A), (B). An action
for contribution of “response costs or damages” under
§ 113(f), by contrast, “may be commenced” no more than
“3 years after . . . the date of . . . entry of a judicially approved
settlement with respect to such costs or damages.” § 9613(g)(3)(B).
[4]
The shorter three-year limitations period
[4]
When comparing the limitations periods for §§ 107(a) and 113(f),
courts generally interpret the limitations period for § 107(a) recovery
actions to be a uniform six years, not six years
or
three years.
See, e.g.
,
for contribution actions is intended “to ensure that the
responsible parties get to the bargaining—and clean-up—
table sooner rather than later.”
RSR Corp. v. Commercial
Metals Co.
, 496 F.3d 552, 559 (6th Cir. 2007);
see
Whittaker
,
IV. Discussion
Asarco’s action is untimely if it could have brought a
contribution action after judicial approval and entry of the
1998 RCRA Decree. Such would be the case if three
Florida Power Corp. v. FirstEnergy Corp.
,
[5] With a wary eye trained on the potential pitfalls of gleaning congressional intent from legislative history, we note that the version of the bill to which H.R. Rep. No. 99–253 refers, H.R. 2817, included a contribution provision substantially similar to the final version included in the enacted statute. That bill, which was introduced in the House of Representatives on June 20, 1985, and which remained the same in relevant part when reported out of the House Committee on Energy and Commerce, contained a contribution provision stating in part:
Nothing in this subsection shall affect or modify in any way the rights of . . . any person that has resolved its liability to the United States or a State in a good-faith settlement, to seek contribution or indemnification against any persons who are not party to a settlement [with the United States or a State in a judicially approved good-faith settlement].
H.R. 2817, 99th Cong. § 113 (June 20, 1985). conditions are met: (i) a non-CERCLA authority may give rise to a CERCLA contribution action, (ii) Asarco took a response action or incurred response costs under the 1998 RCRA Decree, and (iii) the 1998 RCRA Decree resolved Asarco’s liability for at least some of those response actions or costs. The district court analyzed the first two conditions but not the third. We evaluate all three issues.
Our review of the district court’s grant of summary
judgment is de novo, as is our review of the court’s
determination that Asarco’s contribution claim under the
CERCLA Decree is barred by the statute of limitations.
Hernandez v. Spacelabs Med. Inc.
,
A Non-CERLCA Settlement Agreement May Form the Basis for a CERCLA Contribution Action
1.
We begin by considering whether § 113(f)(3)(B) applies
to non-CERCLA settlement agreements. “As in any case of
statutory construction our analysis begins with the language
of the statute.”
Hughes Aircraft Co. v. Jacobson
, 525 U.S.
432, 438 (1999) (internal quotation marks omitted). But it
does not end there. We must heed the “fundamental canon
of statutory construction that the words of a statute must be
read in their context and with a view to their place in the
overall statutory scheme.”
FDA v. Brown & Williamson
Tobacco Corp.
,
A SARCO V . A TLANTIC R ICHFIELD 15 the statutory scheme . . . because only one of the permissible meanings produces a substantive effect that is compatible with the rest of the law.” Util. Air Regulatory Grp. v. EPA , 134 S. Ct. 2427, 2442 (2014) (alteration in original and internal quotation marks omitted).
The plain text of § 113(f)(3)(B) is unilluminating. A “response” action is a defined term under CERCLA, but it is unclear from the text of § 113(f)(3)(B) whether it is a CERCLA-exclusive term. See 42 U.S.C. § 9601(25). In the same vein, § 113(f)(3)(B) requires a PRP to enter into a settlement agreement that is “administrative[ly] or judicially approved,” but the text says nothing about whether the agreement must settle CERCLA claims in particular. See id. § 9613(f)(3)(B).
Expanding our analysis to the broader context of the
statute, we consider § 113(f)(3)(B)’s companion provision,
§ 113(f)(1). That section expressly requires a CERCLA
predicate by providing that “[a]ny person may seek
contribution from any other person who is liable or
potentially liable under [§ 107(a)] of this title, during or
following any
civil action under [§ 106] of this title or under
[§ 107(a)] of this title
.” § 9613(f)(1) (emphasis added).
“Where Congress includes particular language in one section
of a statute but omits it in another section of the same Act, it
is generally presumed that Congress acts intentionally and
purposely in the disparate inclusion or exclusion.”
Russello
v. United States
,
Our understanding of § 113(f)(3)(B) is consistent with CERCLA’s broad remedial purpose. “In ascertaining the meaning of an ambiguous [statutory] term, we may use canons of statutory construction, legislative history, and the statute’s overall purpose to illuminate Congress’s intent.” Probert v. Family Centered Servs. of Alaska, Inc ., 651 F.3d 1007, 1011 (9th Cir. 2011) (internal quotation marks *13 omitted). With the 1986 CERCLA Amendments, Congress sought to get parties to the negotiating table early to allocate responsibility for cleaning up contaminated sites. H.R. Rep. No. 99–253, pt. 1, at 80. Granting a settling party a right to contribution from non-settling PRPs provides a strong incentive to settle and initiate cleanup. Congress gave no indication that it matters whether the authority governing the settlement is CERCLA or something else. Its focus was, instead, on cleaning up hazardous waste sites. An interpretation that limits the contribution right under § 113(f)(3)(B) to CERCLA settlements would undercut private parties’ incentive to settle (except, of course, where the agreement was entered into under CERCLA), thereby thwarting Congress’ objective and doing so without reaping any perceptible benefit.
Our interpretation also aligns with EPA’s own view. In
Niagara Mohawk Power Corp. v. Chevron, U.S.A., Inc.
,
2.
Whether a non-CERLCA settlement agreement may
give rise to a contribution action has split the circuits. In
Trinity Industries, Inc. v. Chicago Bridge & Iron Co.
,
*14
given the similarity of the provisions of RCRA and CERCLA authorizing EPA to order private parties to conduct corrective activity, we fail to perceive any reason why Congress might have wished to make government oversight expenses recoverable if the government invoked CERCLA statutory authority, but not if it invoked RCRA.
Id. at 1275.
The Second Circuit has gone the other way. In Consolidated Edison Co. of N.Y., Inc. v. UGI Utilities, Inc. , 423 F.3d 90, 95 (2d Cir. 2005), the court held that § 113(f)(3)(B) creates a “contribution right only when liability for CERCLA claims . . . is resolved.” That case, like Trinity , involved a party’s § 113(f)(3)(B) contribution action to recoup costs spent pursuant to a settlement agreement under state law. Id. at 96. But unlike Trinity , the Second Circuit read the term “response action” to be a “ CERCLA -specific term,” and relied on a House of Representatives Committee report for the 1986 CERCLA Amendments creating § 113. Id. at 95–96. That report states that § 113 “‘clarifies and confirms the right of a person held jointly and severally liable under CERCLA to seek contribution from other potentially liable parties.’” (quoting H.R. Rep. No. 99–253, pt. 1, at 79) (emphasis in opinion). [6]
*15
[6]
Several district courts—including one in the Ninth Circuit—have
agreed with the Second Circuit’s approach.
See, e.g.
,
Differential Dev.-
1994, Ltd. v. Harkrider Distrib. Co.
,
The Second Circuit’s approach is not persuasive and may be shifting. First, the court misreads the pertinent legislative history. Consolidated Edison relied on a portion of the House report that is specific to § 113(f)(1) for the proposition that Congress intended to require a CERCLA predicate under § 113(f)(3)(B). See 423 F.3d at 96; H.R. Rep. No. 99–253, pt. 1, at 79. But, as previously noted, those two provisions diverge in a crucial way: § 113(f)(1) expressly requires that a party first be sued under CERCLA before bringing a contribution action, whereas § 113(f)(3)(B) makes no reference to CERCLA at all . Second, in a subsequent case, Niagara Mohawk , the Second Circuit indicated agreement with EPA’s position that a CERCLA-specific settlement agreement is not necessary to maintain a § 113(f)(3)(B) contribution action. 596 F.3d at 126 n.15. While the court addressed a distinct issue, and so did not have an opportunity to revisit its holding in Consolidated Edison , it commented that EPA “understandably takes issue with our holding in Consolidated Edison .”
We agree with the Third Circuit. Consideration of
CERCLA’s statutory context, structure, and broad remedial
purpose, combined with EPA’s reasonable interpretation,
lead us to the inexorable conclusion that Congress did not
intend to limit § 113(f)(3)(B) to response actions and costs
incurred under CERCLA settlements. We therefore hold
that a non-CERLCA settlement agreement may form the
necessary predicate for a § 113(f)(3)(B) contribution action.
PHX-SRB,
20 A SARCO V . A TLANTIC R ICHFIELD We turn next to considering whether the 1998 RCRA Decree is such an agreement.
The 1998 RCRA Decree Required Asarco to Take
“Response” Actions
The second condition necessary for the 1998 RCRA Decree to have triggered Asarco’s ability to bring a § 113(f)(3)(B) contribution action is that the agreement required Asarco to take response actions or incur response costs. Asarco suggests that the 1998 RCRA Decree did not actually require any response actions, but was instead focused on assessing penalties for RCRA violations, such as noncompliance with RCRA’s land disposal restrictions. Asarco argues that the agreement “at best” only resolved “Asarco’s liability for civil penalties stemming from alleged operating violations.” The district court barely acknowledged this issue.
Asarco dramatically understates the scope of its obligations under the Decree. The agreement clearly required Asarco to take response actions to clean up hazardous waste at the Site. Specifically, the 1998 RCRA Decree obligated Asarco to:
• Implement interim measures to “control or abate[] . . . imminent threats to human health and/or the environment”; • Prevent or minimize the spread of hazardous waste “while long-term corrective measure alternatives are being evaluated”; • Remove and dispose of contaminated soil and sediment at the Site; and, more generally, to
• Fulfill the Decree’s “remedial objectives” and “remedial activities”—specifically by (i) implementing “corrective measures” to “reduce levels of hazardous waste or hazardous constituents to applicable standards”; (ii) remediating “any contamination in groundwater, surface water and soils, and the ore storage areas”; (iii) taking actions that “will result in the remediation of contaminated *17 media”; and (iv) “provid[ing] the minimum level of exposure to contaminants and the maximum reduction in exposure.” The agreement’s requirement that Asarco take various “corrective measures” is particularly noteworthy because RCRA expressly defines “corrective action” as a type of “response” action: Under RCRA, EPA “may issue an order requiring corrective action or such other response measure as [it] deems necessary to protect human health or the environment.” [7] 42 U.S.C. § 6928(h) (emphasis added). In short, we hold that the 1998 RCRA Decree included response actions for purposes of bringing a CERCLA § 113(f)(3)(B) action.
Asarco Did Not “Resolve Its Liability” Under the
1998 RCRA Decree
The third condition necessary for the 1998 RCRA Decree to have triggered Asarco’s ability to bring a § 113(f)(3)(B) contribution action is that the agreement “resolved its liability to the United States or [Montana] for some or all of” its response action or the “costs of such [7] We do not suggest that other authorities that lack the term “response” could not support a § 113(f)(3)(B) contribution action. action” in the 1998 RCRA Decree. See 42 U.S.C. § 9613(f)(3)(B). Asarco argues that it did not, and therefore the statute of limitations to bring the instant action did not expire three years later, in 2001.
1.
Atlantic Richfield contends that Asarco waived this
argument by not raising it in the district court, and that we
should therefore not consider it. Atlantic Richfield is correct
that Asarco failed to raise this precise issue below. Waiver,
however, is not an absolute bar to our consideration of
arguments on appeal.
See In re Mercury Interactive Corp.
Sec. Litig.
,
Determining whether Asarco “resolved its liability” under the 1998 RCRA Decree falls into the first and third categories. If Asarco did not, as it contends, resolve its liability under the 1998 RCRA Decree, then justice would not be served by upholding the district court’s decision. The correct interpretation of the phrase “resolved its liability” is also a pure question of law. While deciding whether Asarco “resolved its liability” requires application of the law to the particular terms of the 1998 RCRA Decree, those terms are not in dispute and the record requires no further development. Moreover, deciding this issue will bring certainty to the state of the law in the Ninth Circuit and thereby “‘preserve the integrity of the judicial process.’” Id. We therefore proceed to the merits.
2.
As we did in Part IV.A,
supra
, we begin our analysis
with the plain text of the statute.
Hughes
,
But even if an agreement decides with finality the scope of a PRP’s legal exposure and obligations, is its liability “resolved” where the government reserves certain rights, or where the party refuses to concede liability? For example, *19 the statutory provision setting forth EPA’s settlement 24 A SARCO V . A TLANTIC R ICHFIELD authority allows EPA to include a covenant not to sue in a settlement agreement. 42 U.S.C. § 9622(f). But such covenant must be conditioned on a PRP’s completed performance. Section 122(f)(3) provides that
[a] covenant not to sue concerning future liability to the United States shall not take effect until the President certifies that remedial action has been completed in accordance with the requirements of this chapter at the facility that is the subject of such covenant.
Id.
§ 9622(f)(3). EPA must therefore preserve its ability to
bring an enforcement action even after the settlement
agreement is executed. This requirement is reflected in
EPA’s model CERCLA consent decree, which provides that
“covenants not to sue are conditioned upon the satisfactory
performance by Settling Defendants of their obligations
under this Consent Decree.”
Superfund Program; Revised
Model CERCLA RD/RA Consent Decree
, 60 Fed. Reg.
38,817, 38,833 (July 28, 1995). Similarly, EPA has, in the
past, included in settlement agreements releases from
liability that are conditioned on a PRP’s completed
performance.
See, e.g.
,
Bernstein
, 733 F.3d at 212–13;
Florida Power Corp. v. FirstEnergy Corp.
, 810 F.3d 996,
1004 (6th Cir. 2015);
RSR
,
The Sixth and Seventh Circuits have decided that these reservations of rights tip the scales against a finding that a party has resolved its liability. In Bernstein , the Seventh Circuit held that settling PRPs had not resolved their liability *20 where (i) the agreement expressly stated that the PRPs had not conceded liability; (ii) EPA reserved its right to “seek legal [] or equitable relief to enforce the terms of the [agreement]”; and (iii) EPA only “ conditionally promised to release the [PRPs] from liability” upon the PRPs’ “complete performance, as well as certification thereof.” 733 F.3d at 212–13 (emphasis in original). In rejecting the PRPs’ argument that the agreement’s covenant not to sue amounted to the requisite resolution, the court reasoned that because the release from liability was conditioned on completed performance, the covenant could only take effect when “performance was complete.” Id. at 212.
The Sixth Circuit conducted a similar analysis in
ITT
Industries
.
By comparison, in
Hobart Corp. v. Waste Management
of Ohio, Inc.
,
Further complicating the law in the Sixth Circuit is an
earlier case,
RSR
, in which the court held that the PRP’s
promise of future performance “resolved [its] liability to the
United States” because RSR “agree[d] to assume
all
liability
(vis-à-vis the United States) for future remedial actions.”
by EPA.
Florida Power
,
We adopt a meaning of the phrase “resolved its liability”
that falls somewhere in the middle of these various cases.
We conclude that a settlement agreement must determine a
PRP’s compliance obligations with certainty and finality.
See Bernstein
, 733 F.3d at 211–12 (“An issue which is
‘resolved’ is an issue which is decided, determined, or
settled—finished, with no need to revisit.”);
see also Florida
Power
, 810 F.3d at 1002–03. However, we disagree with
the Sixth and Seventh Circuits’ holdings in
Florida Power
and
Bernstein
that the government must divest itself of its
ability to enforce an agreement’s terms. If a covenant not to
sue conditioned on completed performance negated
resolution of liability, then it is unlikely that a settlement
agreement could
ever
resolve a party’s liability. That is
because CERCLA prevents a covenant not to sue from
“tak[ing] effect until the President certifies that remedial
action has been completed . . . .” 42 U.S.C. § 9622(f)(3);
see
Nor do we agree—as the court held in Bernstein —that a release from liability conditioned on completed performance defeats “resolution.” An agreement may “resolve[]” a PRP’s liability once and for all without hobbling the government’s ability to enforce its terms if the PRP reneges. This reasoning applies equally to a covenant not to sue *22 conditioned on completed performance. [8] It is also consistent [8] Bernstein held that an agreement containing a covenant not to sue conditioned on completed performance could give rise to a § 113(f)(3)(B) contribution action after performance was completed. 733 F.3d at 204. The court reasoned that once the condition was satisfied, the PRP had resolved its liability. Id. But such an interpretation renders another part of § 113—the statute of limitations provision—anomalous. The statute of limitations provision requires a PRP to bring a contribution action “no more than 3 years after . . . entry . with the 1986 CERCLA Amendments. A House of Representatives Committee report expresses Congress’ intent to encourage settlements by creating a right to contribution. H.R. Rep. 99–253, pt. 1, at 80. That same report criticizes EPA’s inclusion of releases from liability in settlement agreements. Id. at 102–03 (“[T]he Committee specifically notes its disapproval of the releases granted in the settlements entered into in the Seymore Recy[c]ling case and the Inmont case and expects and intends that any compara[b]le releases that might be presented for court approval would be rejected as not in the public interest.”). Indeed, the report goes one step further, expressing an intent to “authorize[]” EPA “to include in an agreement . . . any provisions allowing future enforcement action . . . that [EPA] determines are necessary and appropriate to assure protection of public health, welfare, and the environment ” at 102 (emphasis added). Having sung the praises of settlements providing for a right of contribution in one part of the report, it would make little sense for Congress to encourage EPA to craft settlements in a way that nullifies that right in another.
of a judicially approved settlement
. . . .” 42 U.S.C. § 9613(g)(3)(B)
(emphasis added). Thus, under the Seventh Circuit’s approach, a party’s
contribution action could accrue
after
the statute of limitations had
already expired. For example, if a settlement agreement included a
covenant not to sue conditioned on completed performance, and the
cleanup took four years, then—in the Seventh Circuit’s view—the PRP
would be precluded from ever bringing a contribution action, even
though it (eventually) satisfied the requirements for doing so. And this
would necessarily be the case because, as discussed, CERLCA
requires
that a covenant not to sue be conditioned on completed performance.
See
42 U.S.C. § 9622(f)(3). Where possible, we avoid construing statutes in
a way that results in such internal inconsistencies.
Boise Cascade Corp.
v. EPA
,
A SARCO V . A TLANTIC R ICHFIELD 29
Moreover, unlike the court in Florida Power , we conclude that it matters not that a PRP refuses to concede liability in a settlement agreement. Congress’ intent in enacting § 113(f)(3)(B) was to encourage prompt settlements that establish PRPs’ cleanup obligations with certainty and finality. A PRP’s refusal to concede liability does not frustrate this objective so long as the PRP commits to taking action. Indeed, requiring a PRP to concede liability may discourage PRPs from entering into settlements because doing so could open the PRP to additional legal exposure. See 42 U.S.C. § 9607(a) (setting forth obligations of liable PRPs).
In sum, an examination of § 113(f)(3)(B)’s plain language, with due consideration for CERCLA’s structure and purpose, leads us to the conclusion that a PRP “resolve[s] its liability” to the government where a settlement agreement decides with certainty and finality a PRP’s obligations for at least some of its response actions or costs as set forth in the agreement. A covenant not to sue or release from liability conditioned on completed performance does not undermine such a resolution, nor does a settling party’s refusal to concede liability. Whether this test is met depends on a case-by-case analysis of a particular agreement’s terms.
3.
Turning to the 1998 RCRA Decree, we conclude that it fails to resolve Asarco’s liability for any of its response actions or costs. First, the Decree’s release from liability covers none of the “corrective measures”—i.e., response actions—mandated by the agreement. Paragraph 209, under “Effect of Decree,” states that
ASARCO’s payment of all civil penalties due, and ASARCO’s commitments to pay all stipulated penalties due and owing under this Decree, and ASARCO’s commitment to fully *24 and successfully complete the requirements of this Decree , shall constitute full satisfaction of the claims for civil penalties for civil violations alleged in the complaint of the United States that occurred prior to the date of lodging of this Decree, except as provided in this Paragraph . . . . This release is conditioned upon the complete and satisfactory performance by ASARCO of its obligations under this Decree.
1998 RCRA Decree ¶ 209 (emphasis added). The release is expressly limited to liability with regards to the United States’ claims for civil penalties. Yet the complaint that prompted the parties to reach the agreement specifically sought both civil penalties and injunctive relief—only the latter of which could “require ASARCO to conduct corrective action.”
Second, the 1998 RCRA Decree is replete with references to Asarco’s continued legal exposure. For example, in paragraph 122, under the header “Off-Site Access,” the agreement states unequivocally that “[n]othing in this section shall be construed to limit or otherwise affect ASARCO’s liability and obligation to perform corrective measures . . . .” Similarly, in setting forth a limited covenant not to sue, paragraph 214 states that the
Decree shall not be construed as a covenant not to sue, release, waiver or limitation of any rights, remedies, powers and/or authorities,
civil or criminal, which EPA has under RCRA, CERCLA, or any other statutory, regulatory, or common law authority, except as provided in Paragraph 209 above . . . . Because paragraph 209 does not address—let alone resolve—the United States’ claims for injunctive relief, the covenant not to sue does not restrict the United States’ authority to bring an action under CERCLA §§ 106 or 107, which could result in additional response obligations. 42 U.S.C. §§ 9606, 9607.
Lest there be any doubt, the Decree makes the point at least three more times. Paragraph 216 states that “except as specifically provided in Paragraph 209,” compliance with the Decree “shall be no defense to any action commenced” under federal or state law. 1998 RCRA Decree ¶ 216. And *25 the next paragraph provides that
[e]xcept as expressly provided herein, nothing in this Decree shall constitute or be construed as a release from any claim, cause of action or demand in law or equity, against any person, firm, partnership, or corporation for any liability it may have arising out of, or relating in any way to, the generation, storage, treatment, handling, transportation, release, management or disposal of any hazardous wastes . . . found at, on, or under, taken to or from, or migrating to, from or through the [lead smelter and contiguous areas]. ¶ 217 (emphasis added). Finally, paragraph 137 states
that Asarco’s CERCLA liability for response costs would not be released even if Asarco fully complied with the Decree:
Notwithstanding compliance with the terms of this Decree, ASARCO is not released from liability, if any, for the costs of any response actions taken or authorized by EPA under any applicable statute, including CERCLA.
Simply put, the 1998 RCRA Decree did not just leave open some of the United States’ enforcement options, it preserved all of them. Because the Decree did not settle definitively any of Asarco’s response obligations, it did not “resolve[] [Asarco’s] liability.” See 42 U.S.C. § 9613(f)(3)(B). Accordingly, Asarco could not have brought a contribution action pursuant to the 1998 RCRA Decree and the corresponding limitations period did not run with that agreement. [9]
[9]
Asarco was not without recourse to seek reimbursement for costs
incurred under the RCRA Decree. As discussed in Part III,
supra
, where
a § 113(f) contribution action is unavailable, a PRP may be able to bring
a § 107 “cost recovery” action against other PRPs to recoup “any . . .
necessary costs of response incurred” that result from a release of a
hazardous substance. 42 U.S.C. § 9607(a);
see Bernstein
, 733 F.3d at
214. Put another way, a PRP that has taken a response action but has not
entered into a settlement agreement that resolves its liability has satisfied
the criteria for bringing a § 107 action. A § 107 action has at least three
advantages and one disadvantage compared to a § 113(f)(3)(B) action:
(i) § 107(a) comes with a longer statute of limitations period than
§ 113(f)(3)(B) (six years versus three), (ii) it provides the possibility of
*26
joint and several liability, and (iii) it comes with limited defenses—e.g.,
acts of God, acts of war, and third-party omissions.
See Burlington N. &
Santa Fe Ry. Co. v. United States
,
Asarco “Resolved Its Liability” Under the 2009
CERCLA Decree
The district court held that Asarco’s contribution claim for response costs incurred under the 2009 CERCLA Decree was time-barred based on the erroneous conclusion that Asarco could have brought its action under the 1998 RCRA Decree. Asarco argues the district court erred because it brought its action no more than three years after entry of the June 2009 CERCLA Decree, which it argues “resolved its liability” for the first time, and therefore its action is timely. We agree with Asarco.
Asarco has a timely contribution claim under the CERCLA Decree if three conditions are met. First, Asarco must have brought its action within three years after the date the settlement was judicially approved. 42 U.S.C. § 9613(g)(3)(B). Second, the CERCLA Decree must cover response actions or costs of response. Id. § 9613(f)(3)(B). And third, the CERCLA Decree must “resolve[]” Asarco’s liability for at least some response actions or costs. Id.
Statute of limitations. Section 113(g)(3) requires a party seeking contribution to bring its action no more than “3 years after . . . the date of . . . entry of a judicially approved settlement.” § 9613(g)(3). The bankruptcy court approved and entered the CERCLA Decree on June 5, 2009. Asarco brought its contribution action on June 5, 2012. In its denial of Atlantic Richfield’s motion to dismiss, the A. Whiting Paper Co. , 768 F.3d 682, 690 (7th Cir. 2014) (discussing limited defenses under § 107); 42 U.S.C. § 9607(a)(4)(B) (listing defenses). On the other hand, a party that is ineligible to bring a § 113(f) contribution action—and therefore must resort to § 107(a)—does not enjoy protection from other PRPs’ contribution actions. See 42 U.S.C. § 9613(f)(2).
34
A SARCO V . A TLANTIC R ICHFIELD district court held that Asarco’s claim was timely. Dist. Ct.
Dkt. 49, at 6–7. On appeal, Asarco reiterates that its action
“was filed within three years of a settlement that did in fact
resolve Asarco’s liability at the Site.” Conspicuously absent
from Atlantic Richfield’s brief is any contention that the
district court erred on this issue. We therefore deem
abandoned Atlantic Richfield’s argument that Asarco’s
claim is time-barred as measured against the CERCLA
Decree.
See Collins v. City of San Diego
,
Even if Atlantic Richfield did not abandon this claim, we would conclude Asarco’s claim is timely. Under § 113(g)(3), the day of the event that triggers the period is excluded for purposes of computing the period’s end date. See Asarco , LLC v. Union Pac. R.R. Co. , 765 F.3d 999, 1007–08 (9th Cir. 2014). Therefore, the first day of the period would be June 6, 2009, and the last day for filing would be June 5, 2012. See id. at 1007. Asarco met this deadline.
Response actions or costs. The CERCLA Decree required Asarco to pay $99.294 million (plus other expenses) into a custodial trust account to clean up the East Helena Site. The account covers expenses for past and future response actions, including, inter alia , “remedial actions, removal actions, [and] corrective action” at the Site. The CERCLA Decree also settled all obligations under the 1998 RCRA Decree, which, as described in Part IV.B, supra , itself addressed response actions. It is therefore beyond cavil that the CERCLA Decree covers “response” actions or costs of response.
Resolution of liability. Asarco argues that the CERCLA Decree “unequivocally” resolved its liability for all of its response costs at the Site. Atlantic Richfield does not directly address this issue, but instead asserts that the CERCLA Decree did not “trigger a new limitations period for costs incurred under the 1998 [RCRA] Consent Decree” because the CERCLA Decree served only as a “funding mechanism” for Asarco’s “preexisting commitments.” Atlantic Richfield asserts that deeming Asarco’s contribution claim timely would work an injustice by *28 allowing Asarco to incur cleanup obligations, sit on its rights and do nothing for years, and then pursue a stale claim through bankruptcy by virtue of its own indolence.
We agree with Asarco and hold that the CERCLA Decree “resolved” its liability for all of its response costs at the Site. [10] For example, the Decree sets forth a covenant not to sue that is immediately effective and covers all of Asarco’s response obligations. The covenant provides, in relevant part, that
[10]
While the district court did not address whether the CERCLA
Decree resolved Asarco’s liability, we need not remand to the district
court for consideration of this issue in the first instance. Whether the
CERCLA Decree resolved Asarco’s liability is an “issue fairly included
within the question presented,” namely, whether the district court erred
in holding that Asarco could not maintain a contribution action under the
CERCLA Decree.
See Lewis v. Clarke
,
upon the Effective Date and Debtors’ [11] full funding of all Custodial Trust Accounts . . . the United States [and Montana] covenant[] not to sue or assert any civil claims or civil causes of action against [Asarco] . . . pursuant to Sections 106 and 107(a) of CERCLA, 42 U.S.C. §§ 9606, 9607(a), and RCRA, 42 U.S.C. § 6901, et seq., Sections 301(a), 309(b), and 311 of CWA, 33 U.S.C. §§ 1311(a), 1319(b), and 1321, or any similar state law, including any liabilities or obligations asserted in the United States’ [and Montana’s] Proofs of Claim with respect to the East Helena Site.
CERCLA Decree ¶¶ 28–29. Thus, so long as Asarco funds the Custodial Trust Accounts, [12] it is released from liability for all response obligations under prior settlements, including “corrective measures” under the RCRA Decree.
Other parts of the Decree are similarly all-encompassing. For example, the section setting forth reservations of rights *29 by the government is, in pertinent part, limited to Asarco’s “future acts.” Under that provision, the United States and Montana “specifically reserve . . . liability for[, inter alia ,] response costs [and] response actions . . . under CERCLA, RCRA, CWA, [the Montana Comprehensive Environmental Cleanup and Responsibility Act] or any other law for [11] Asarco is a “debtor” under the agreement.
[12] Asarco asserts that it has funded the custodial trust account, and Atlantic Richfield’s brief concedes the point. We assume that Asarco has complied with the CERCLA Decree’s payment obligations with respect to the East Helena Site.
Debtors’ . . . future acts creating liability ” under those statutes “that occur after the Closing Date.” CERCLA Decree ¶ 39 (emphasis added). The section expressly does not reserve any rights to hold Asarco liable under any legal authority with respect to then-existing contamination beyond its payment obligations under the agreement. See id.
The agreement also caps Asarco’s “total financial obligations” for past contamination at the amount specified in the agreement. CERCLA Decree ¶ 8.h. While it leaves open the possibility that Asarco may owe certain additional costs, those costs do not include response costs. In other words, Asarco’s financial liability was “resolved”—i.e., determined with finality—under the agreement itself; the agreement did not expose Asarco to future liability for past hazardous waste releases.
The agreement also provides Asarco with protection
against contribution actions by non-settling parties, as
provided under CERCLA § 113(f)(2), 42 U.S.C.
§ 9613(f)(2). CERCLA Decree ¶ 43. Contribution
protection applies only to “[a] person who has
resolved its
liability
. . . in an administrative or judicially approved
settlement.” 42 U.S.C. § 9613(f)(2) (emphasis added). The
agreement’s incorporation of that provision is further
evidence that Asarco “resolved its liability” under the
agreement.
See Hobart
,
Finally, we consider Atlantic Richfield’s concern that deeming Asarco’s contribution claim timely would allow Asarco to benefit from its own alleged neglect under the RCRA Decree. We sympathize with Atlantic Richfield’s *30 position but cannot agree with its conclusion. Whether a 38 A SARCO V . A TLANTIC R ICHFIELD right of contribution is available does not depend on whose ox gets gored: the fact that Asarco and not some other party was liable under the RCRA Decree does not change the fact that that agreement did not give rise to a right of contribution, whereas the CERCLA Decree did.
In sum, the CERCLA Decree constitutes a “firm decision
about” Asarco’s liability that lends it the requisite degree of
finality.
See Bernstein
,
V. Conclusion
We hold that the 1998 RCRA Decree did not resolve Asarco’s liability for at least some of its response obligations under that agreement. It therefore did not give rise to a right to contribution under CERCLA § 113(f)(3)(B). By contrast, the 2009 CERCLA Decree did resolve Asarco’s liability, and Asarco has brought a timely action for contribution under that agreement. We therefore vacate the district court’s grant of summary judgment and remand for further proceedings consistent with this opinion. On remand, the district court should determine whether Asarco is entitled to any financial contribution from Atlantic Richfield and, if so, how much.
[13] We express no opinion on the scope of contribution and protection rights where a settlement agreement, unlike this CERCLA Decree, resolves a PRP’s liability only for some of its response obligations. Cf. Whittaker , 825 F.3d at 1008 (a party may not seek contribution for expenses that are not “at issue in the triggering . . . settlement”).
Costs are awarded to the Appellant.
VACATED and REMANDED.
