*1 to cause peril excluded combine peril and CORP., dba FLORIDA POWER recov-
loss, damages even no amount Inc., Energy Florida, Progress the in- payable erable15—let alone —until Plaintiff-Appellant, complies the concurrent-cause sured Math (“[T]he insured doctrine. Id. at 302-08 v. only portion entitled to recover CORP., FIRSTENERGY solely by per- the covered damage caused Defendant-Appellee. il(s).” added)). The district (emphasis No. 14-4126. applied the concurrent- properly court Provision. to the Contract cause doctrine of Appeals, United States Court Sixth Circuit. point, that Seahawk did The final 4, not its under the concurrent- Argued: Aug. meet burden 2015. doctrine, controversy. is without cause 5, and Filed: Nov. Decided segre no presented Seahawk evidence to Rehearing En Banc Denied solely attributable gate damage Dec. 2015.* (the peril) as com misaligned legs covered hydraulic-jacking pared to the defective (the
system “Although peril). excluded not required
[an insured] is establish damages his with mathe amount of rea precision, there must be some
matical upon [fact finder’s] basis which the
sonable rests.” failed
finding Id. Seahawk
to meet its burden under the concurrent- presented because it no evi
cause doctrine apportion damages cov
dence to between perils, so
ered and excluded the district denied the claim under the properly
Contract Provision.
AFFIRMED. Bryan Dictionary “actually Agreeing 15. See A. which is recovered.” Legal Garner, = (3d ed.2011) ("recoverable com- proposition, we do with that for dam cláim Usage pensable---- ‘capable being legally ob law, ages peril Texas where a covered ”). tained.' Seahawk’s reference loss, peril California and excluded combine to cause the Liemsakul, Guarantee Insurance Association and until even recoverable unless (Ct. Cal.App.3d Cal.Rptr. complies insured with the concurrent-cause conclusion; App.1987), change does doctrine. proposition for the uncontroversial stands * rehearing Judge grant Suhrheinrich would "recovery that "recoverable” means the reasons stated in his dissent. might possible” have been rather than *2 Cincinnati, LLP, &
Stettinius Hollister Clement, Ohio, Paul D. Appellant. Meehan, Hicks, Taylor Ban- George W. PLLC, D.C., Washington, Ronald S. croft A. & An- Lopez, Roetzel Kopp, Jessica *3 Ohio, dress, LPA, Akron, Appellee. for Before: SUHRHEINRICH GRIFFIN, Judges; and Circuit STAFFORD, Judge.** District J., GRIFFIN, opinion delivered the D.J., STAFFORD, the court in which SUHRHEINRICH, (pp. joined. J. 1010- 19), separate dissenting delivered opinion.
OPINION
GRIFFIN,
Judge.
Circuit
seventy years ago, plaintiffs pre-
Almost
operated
in interest owned and
decessor
In
plants
coal
in Florida.
gasification
two
2003,
plaintiff entered
Ad-
1998 and
(“AOCs”)
by
ministrative Orders
Consent
Protection
with
U.S. Environmental
feasibility of
Agency to assess the
remedi-
contamination
ation
environmental
At
is the
those sites.
issue
this case
question
narrow
those
legal
whether
constitute “administrative settle-
Comprehensive
purposes
ments” for
Response, Compensation,
Environmental
(“CERCLA”),
Act
Liability
of 1980
seq.
9601 et
they
We hold that
do
U.S.C
not.
therefore reverse the district
We
plaintiffs
court’s dismissal of
contribution
action based on the statute of limitations
proceedings.
for
and remand
further
Taft,
Nalbandian,
B.
ARGUED: John
Cincinnati,
LLP,
& Hollister
Stettinius
I.
Clement,
Ohio,
Paul D.
Appellant.
for
PLLC,
D.C.,
plants,
two
Ap-
This case involves
Florida
Washington,
Bancroft
Nalbandian,
B.
in Sanford and the other
Orlando.
pellee. ON BRIEF:
John
one
Lawless, Taft,
Burke,
discovering hazardous contaminants
Kim
Matthew D.
After
K.
**
Stafford, Jr.,
Florida, sitting
designation.
by
William H.
Sen-
ern District
The Honorable
Judge
ior
States District
for the North-
United
1990s,
sites,
con- operator
sites in the
the EPA
those
was liable for future
plaintiff
Corpo-
plaintiff
Florida Power
cluded that
costs that
would incur.
ration, along
previous
motion,
of Upon
with other
owners
defendant’s
the case was
sites, was
those
liable
costs associated
transferred to the Northern District of
with removal
remediation of contami- Ohio. Defendant moved for judgment on
plaintiff
pleadings
nation.
entered into
under Federal
of Civil
Rule
12(c)
“Administrative Order
Consent for Re- Procedure
on the basis
Investigation/Feasibility
Study”
medial
and 2003
triggered
AOCs had
CERCLA’s
(“San-
three-year
for the Sanford
site
statute
plain-
of limitations and
AOC”).
ford
into a
entered
tiffs claims were therefore barred.
Ini-
similar
of the same
tially,
title
the district court denied the motion
(“Orlando AOC”).
site
grounds
Orlando
on the
that the Sanford AOC was
*4
agreement
a settlement
it
because
did
AOCs,
plaintiff
Under
terms of
any
release
party
any liability
agreed
implement
conduct
and
a reme-
preserved
and
right
the EPA’s
to sue
investigation
study
dial
feasibility
and
for
plaintiff for
Regard-
CERCLA violations.
investigation
each site. The remedial
was
AOC,
ing the Orlando
the court ruled that
intended to determine the nature and ex-
plaintiff
only bring
could
a
recovery
cost
public safety
tent of the
threat.
feasi-
“by
terms,
action because the AOC
its own
bility study
designed
identify
was
and
a
agreement.”
was not
settlement
options
evaluate
for remedial action. The
plan
implementa-
AOCs established a
for
However,
reconsideration,
following
monetary penalties
tion
set
and
for violat- our decision in
v. Waste
ing
plan.
agreed
pay
Plaintiff also
Ohio,
Management
Inc.,
sent plaintiff decree between and the II.
for actual remediation A. site. Regarding Sanford the Orlando
site, a plaintiff submitted draft Remedial “The district court’s decision re Assessment, Investigation Report, Risk garding judgment a motion for on the and Remedial Alternative Mem- Technical pleadings pursuant to Federal Rule of Civ orandum that was review 12(c) il analyzed using Procedure litigation. EPA at the time of this employed de same novo standard review 2011, 30, plaintiff
On December for motion dismiss filed a under Rule 12(b)(6).” recovery cost Middleburg-Legacy and contribution CERCLA Tucker v. 545, (6th Cir.2008). Place, action in the Middle District of 539 F.3d 549 Florida sought costs It well-pleaded related both sites. also We take as true all material defendant, declaratory judgment plead a allegations opposing party’s ings, grant a to a affirm district successor interest former owner- court’s 1000 cleanup another PRP costs in- only moving party if the sue motion judgment as matter law. removal or remedial action.”
entitled to
curred
Bank,
190,
Winget,
Bankert,
N.A. v.
JPMorgan Chase
733 F.3d
201
Bernstein
(6th Cir.2007).
577,
(7th Cir.2013)
510 F.3d
581
(citing
v. Atl.
United States
128, 127
Corp., 551 U.S.
S.Ct.
Research
“facili
speaking, CERCLA
Broadly
(2007)).
2331,
The second
CERCLA two to a hazardous site itself and then entered cost-shifting actions for costs incurred in agreement plaintiff a to settlement a remediating a site. Under the “cost recov government for its re compensate 107(a)(4), ery” § provision CERCLA Indus., sponse Cooper costs. 543 U.S. at against the EPA may bring an action 577; Hobart, 167, 125 758 F.3d at S.Ct. “all PRPs to recover costs removal or may proceed a plaintiff 768. that by remedial action incurred the United against parties PRPs other who were States 42 Government.” if “has 9607(a)(4)(A). plaintiff the settlement re § A up PRP that cleans a liability to solved its the United States ... may site a bring recovery likewise cost response or all of a action or for against some action other PRPs. See id. Indus., 9607(a)(4)(B); § some or all the costs of such action in an ITT F.3d at 506 judicially 456. administrative or “grants approved This cause of action one PRP set § rights party same as an innocent to tlement.” 42 U.S.C.
1001
Recovery
by
and contribution ac
should be
a
In-
decided
universal rule.
proce
stead,
apply
“persons
different
it
a
requires
tions
look at the
terms
circumstances,” Atl.
dural
Research
case-by-case
settlement
a
basis.”
139,
2331,
“pro Bernstein,
at
127 S.Ct.
551 U.S.
bring
against
contribution
B.
PRPs,
recovery
not a cost
action.
Plaintiff
dis
maintains
trict
concluding
court erred in
date of a settlement
effective
statute of limitations
its
barred
contribu
113(f)(3)(B)
agreement under CERCLA
tion action
because
Sanford and Orlan
*6
triggers
running
three-year
the
of a
stat
do
plaintiffs liability
AOCs do not resolve
ute
a
of limitations for
contribution action.
Plaintiff
argues
EPA.
the
However,
To determine whether the 455. before liability, three-year expired, a of limitations resolves PRP’s we statute agree plaintiff the filed a recov- specific look to the terms of the lawsuit cost ar- ery plaintiff Id. at not liabili and ment. 770. “Whether or contribution. Id. ty through simply gued a settlement that the AOC was an “administrative is resolved of a question purposes the can or settlement” for contribution sort of which recovery Circuit the dis- actions. The Seventh Like
action under
AOC,
the 2002
but
agreed
respect
with
to
disagreed,
that the
court,
holding
trict
we
first, it held that the
not the 1999 AOC:
any
plaintiffs
did not resolve
AOC
a
contribution
plaintiffs had
time-barred
First,
reasons.
at least two'
based on the 1999 AOC because
action
to
rights
its
broadly
reserved
plain-
at
AOC resolved
least some
adjudicate
plain-
to
legal action
take
performance
liability upon complete
tiffs’
comply
with the
liability for failure
tiffs
(the
EPA’s approval),
in 2000
date of the
AOC,
(past, present,
of response
for costs
thereby
limita-
triggering the statute of
injunctive relief or
future),
costs of
or
Second, regarding
Id. at 978-81.
tions.
enforcement,
other
criminal
AOC,
held that
court
Second,
plaintiff
at
damages.
Id.
459.
yet
begun
of limitations had not
statute
of its liabili-
question
had
conceded
Specifically,
observed that
run.
the court
that the
expressly
AOC
stated
ty,
meaningful argument”
“there can be no
“participation
this Consent
plaintiffs
the plaintiffs’
that the 2002 AOC resolved
an admission of
not constitute
Order does
ongoing
because
was
liability.”
Id.
litigation
EPA ex-
at
time of
case, Bernstein,
Circuit
Seventh
conditioned its covenants not
pressly
it involved
especially illuminating because
“upon
or take administrative
sue
stages
at different
two distinct AOCs
satisfactory performance by
complete and
There,
plaintiffs entered
performance.
obligations
of their
[plaintiffs]
[the
“Administrative
by
Order
Consent”
977,
at
983.
AOC].” Id.
at a
study
in 1999
removal alternatives
Bern-
request,
At
defendants’
site in Indiana and estab-
contaminated
granted panel rehearing
stein
EPA for
to reimburse the
lished
trust
clarify
raised
the EPA as amicus
issues
costs,
oversight
as well
past
respect
parties may
with
curiae
whether
at
oversight costs. 733 F.3d
as future
structure
an administrative
Bankert,
196-97;
also
see
Bernstein
immediately
the EPA to
lia-
resolve
(7th Cir.2012),
opinion
bility.
resulting
In its
196.
rehearing,
superseded
amended and
explained that
opinion, the Seventh Circuit
fully per-
plaintiffs
ted). C. Applying principles, these Seventh Like the agreements in ITT and Bern- held that again
Circuit
AOC did stein, the Sanford and Orlando AOCs do
plaintiffs’
not resolve the
for two not resolve plaintiffs liability because res-
First,
reasons.
the court
that
observed
olution of
plain-
conditioned on
plaintiffs
refused to
consider
AOC
tiffs
and does not take im-
citing
be an admission
a mediate
In
effect.
both the Sanford and
provision of the AOC
that it “shall
stating
AOCs,
broadly
Orlando
the EPA
reserved
any
constitute
admission
its “right
any
to take
enforcement action
(or all)
any
plaintiffs].”
Id. at 203-
[the
pursuant
any
to CERCLA or
other avail-
Second,
only
“the EPA
condition-
legal authority
able
any
...
violation
ally
plaintiffs]
promised
release [the
of law or this Consent Order.” This lan-
liability” upon complete performance
guage
AOC,
resembles that of the ITT
of such prom-
AOC and certification
“right
which reserved the EPA’s
to take
(emphasis
original).
ise.
at 212
Id.
any
legal
equitable
other
or
action as it
court
conditionality
reasoned
appropriate
necessary.”
deems
ITT
meant
if resolution of
was
AOC,
It
also
reflects
AOC
intended,
per-
it “would not occur until
Bernstein, which
conditionally
the EPA
complete,
formance
is the first
was
which
plaintiffs]
not to sue
“covenanted]
[the
any
time at which the covenant
have
would
judicial
or
imposition
damages
pen-
civil
support
reading,
effect.”
Id.
its
alties or
take
administrative action
“expressly
observed
the EPA
against
any
plaintiffs] for
failure to
[the
right to
legal
equitable
reserved its
seek
Order,”
perform
agreed
actions
to in this
relief
to enforce the terms of
Order at
further, “in
and upon
consideration
any time before those covenants went into
plaintiffs’] payment
[the
of the EPA’s re-
(internal quotation
effect.” Id. at 212-13
costs,
sponse
...
not to sue
covenanted]
omitted).
marks and alterations
In mak-
against
or take administrative action
[the
observation,
ing this
the court clarified
107(a)
plaintiffs] under Section
of CERC-
that, “if
the EPA had included
immedi-
Bernstein,
LA.”
Our illustrate like the in ITT than the ASAOC conclusion that the Sanford Orlando AOC plaintiffs liability AOCs do not Hobart. resolve *10 argues the Finally, defendant that
D. contracts, by an are characterized bilateral contrary the arguments Defendant’s exchange to do promises of mutual some- posi- It is defendant’s unconvincing. are thing in and enforceable at the the future at some resolved least tion that the AOCs the exchange, opposed time of the a plaintiff “cut plaintiffs once of dissenting opin- The performance. time past response costs. the EPA for check” to further, arguing simple argument ion takes this two reasons. disagree We cases, com- First, argument prior does not one defendant’s that of our RSR AOCs, the which language Co., (6th the port with F.3d 552 Commercial Metals liability on the conditions resolution Cir.2007), binding precedent “pre- that complete partial performance. cludes distinction between immediate [a] —not — provision, exam- rights reservation effectiveness as a basis for conditional re- plaintiff “shall have ple, states that agreement'has re- determining whether “following liability to EPA” solved [its] liability.” dissent is solved a PRP’s requirements of this satisfaction of the suggest the first that RSR Order,” any single require- Consent dispositive. added.) And the cove- (Emphasis ment. In plaintiff the entered the upon not to sue are “conditioned nants [by complete satisfactory performance judicially approved a consent decree under this Or- plaintiff] obligations of [its] it the EPA for agreed which reimburse Second, we are doubtful that der.” costs, and future finance and past to the EPA distin- tendering of a check at contaminated perform remedial work a guishes this from the aforementioned case site, undertake additional future re- plaintiffs agreed every cases. return, sponse actions. Id. at 554. In in- past EPA for costs reimburse the agreed not to sue take administra- In ITT and curred. against plaintiff that tive action would pay” to the agreed “[plaintiffs] shall impose plaintiff further receiving specified upon EPA certain costs right received the to seek contribution 15; AOC, a EPA. ITT at bill from the against other PRPs. Id. More than three ¶ Bernstein, ASAOC, later, years plaintiff a contribu- filed specific plain- AOC included a amount: the defendant, against tion action which $112,799.53 tiff within agreed pay moved to dismiss the as barred days of the AOC. of the effective date At the statute of limitations. Id. issue AOC, reason at 20. There no Bernstein that case was whether three- CERCLA’s plaintiff to believe that Bernstein year statute of limitations on contribution by the payment failed to tender deadline six-year period actions or limitations failed to plaintiff pay or that the ITT judicial recovery governed cost actions it partial EPA when received bill. And consent decree. Id. 555-56. After no dif- to have made seems statutory detailed discussion of CERCLA’s Bernstein, perform- ference in in which framework, plaintiffs we concluded ongoing ance AOC was governed action was one for contribution if litigation. Accordingly, time even by three-year statute limitations. Id. did not contravene argument defendant’s Only briefly then did we address AOCs, we would not language of argument reply RSR’s raised its brief trans- payment conclude that of some costs its “could have resolved into an administrative formed AOC to the United States in the consent decree settlement. completion before the of the remedial ac- ... did not take effect until the remedial *11 that, complete, tion.” Id. at 558. We observed action was the statute of limita- tions for contribution actions runs from the promise RSR’s of future ‘entry’ ..., of the settlement not from the very it gave was the consideration in provision date that each of that settlement exchange for the States’ United cove- clear, takes effect.” Id. To be we do not damages. nant not seek further RSR fault the Corp. RSR court declining in other its co-defendants words consider parties whether the intended the liability resolved their to the United consent decree to resolve RSR’s liability, by agreeing States all liability assume appears that (vis-a-vis States) issue was not the United for future squarely before the court. Where that if remedial actions. And even the cove- leaves us this:- we have least two regarding nant future response costs did cases, Hobart, Sixth Circuit ITT and not take until effect the remedial action the Seventh Bernstein, Circuit case of that was of complete, the statute limitations are applicable more than Corp. RSR We for contribution actions runs from the disagree thus Corp. RSR forecloses settlement, 42 “entry” of the our resolution of this case. § 9613(g)(3)(B), not from the date that each provision of that settlement takes Corp., Since RSR both Seventh Cir- effect. cuit in Bernstein and this in circuit Hobart rejected Id. attempt We thus RSR’s to have distinguished the consent decree in three-year evade the of statute limitations. Corp. RSR from contracts at in issue Notably, RSR Corp. interpret did Bernstein, those In cases. the Seventh provisions the various of the consent de- Circuit Corp. concluded RSR was dis- determining cree for purposes whether tinguishable on based “obvious and dispos- parties intended to liability by resolve itive in differences the facts”: way decree, ITT, of the consent as did Corp.], In [RSR the consent order con- fact, and Bernstein. In it is far an immediately tained effective release opinion from clear from our that RSR even case, from In it did not. parties contested that the intended to re- fact, immediately far from resolving liability by way solve its consent liability, all our immediately AOC re- assumed, decree. Corp., RSR we “[i]n So, solved none. in consideration view of apportionment Corp.] [RSR was an immediate release past and future among costs in liability; consideration States, United RSR and its co-defendants case was a conditional promise re- [that] the consent decree was cost-recov- lease from if perform- and when 122(h) ery settlement under as well as a completed. ance was Given the nature 122(d)(1) cleanup agreement under [and] statutory trigger, that distinction consent [b]ecause the decree established clearly warrants different result. RSR’s its contribution action re- Bernstein, (citation garding those ‘costs’ on the accrued date of F.3d at omit- 12, 1999) ted). Likewise, Hobart, (April consent decree court our ob- expired years Only three later.” Id. after served that the ASAOC in that like we observed that the decree consent had consent decree in RSR went engaging resolved effect on the date of effective —without provisions ASAOC, various plaintiff the consent decree— whereas Bernstein did we reason “even if the covenant “had to certain prerequisites meet before provision of the settlement takes 758 F.3d date each into effect.” went [AOC] words, Id. In the Bernstein effect.” other- distinguished reasonably between maintains that dissenting opinion “immediately re- case in which erred and Hobart courts Bernstein liability” promises fu- based solved] the consent decree interpretation their promise ture action “a conditional un- Specifically, the dissent RSR perform- if release from and when underlying judicial consent earths the Bernstein, completed.” ance was decree, in the deci- quoted *12 of the former is an effect
sion, was to that the consent decree show immediately liability effective release of immediately prelimi- effective. As not (as agreement) of of the the effective date matter, clear Bern- it is not that the nary is and the effect of the latter no resolution cove- or court erred. The stein Hobart liability. true the Ho- The same is Corp. in provision the RSR nant not sue court, on same bart which relied dis- provides: consent decree tinction. will of the actions that In consideration payments that will importantly, if assume performed
be even we More Settling un- by made Defendants be and Hobart courts mis- that the Bernstein ... decree, of the Consent Decree der terms Corp. read the RSR consent RSR not sue covenants United States Corp. preclude not a distinction be- does against to take administrative tween immediate conditional effective- Settling cove- [T]hese Defendants.... published ness because our more recent upon to sue shall take effect nants not in adopts decision Hobart and ratifies this by payments EPA receipt Regardless of the actual lan- distinction. lia- respect to future required.... With decree, guage of the RSR consent to sue shall bility, these covenants not a bright our court’s 2014 decision draws upon Comple- take effect Certification in line between cases which the resolution by tion of Action EPA. Remediation liability immediately is effective and subject liability the resolution of Decree, Quot- when is at 79.1 RSR Consent prece- what the dissent calls a “condition ing provision the Bernstein part, in Hobart, distinguished dent.” court probably characterizing erred immediately agreement reading, agree “The Parties to sue as effec- covenant not - tive, in inter- necessarily Agreement but not err this Settlement consti- did liability as preting pur- the resolution of imme- tutes an administrative settlement 113(f)(3)(B) effective, diately especially poses when read of Section of CERCLA pursuant have, light interpretation plaintiffs] of our ... to which [the court’s Date, as of the Effective their consent decree RSR resolved Work, and its co- liability 558. We observed United States for the Costs,” agreed Response defendants had resolve and Future 758 F.3d at AOC, assume all for fu- re- agreeing to from Bernstein which and, actions, quired prerequi- ture “even if the covenant the PRP “to meet certain order of regarding future costs did sites before the administrative effect,” id,.; effect until action was consent went see also take the remedial Bernstein, then the statute of limitations for con- 733 F.3d at It ex- complete, from date ‘en- that where plained tribution actions ran was settled ..., date, try’ “liability definitively the effective was (record Shane, (S.D.Ohio) 436). entry 1. United 3:89-cv-383 States settled,” sent,” “factually is distinct” from which as “Administrative Settlement Agreement Consent,” cases in there were prerequisites which Order on liability. settling recognizes referred to the document dissent as a “settlement agreement.” Mem., passim. that there a difference cases in It between also subject provision inserted a stating par- which resolution of to a that the “agree ties this Settlement opposed Agree- “condition to a precedent,” ment constitutes an subsequent,” administrative “condition but asserts that settle- 113(f)(3)(B) ment for purposes of Section represent distinction “does not a ra- CERCLA, 9613(f)(3)(B), tional for resolving basis” Be- pursuant [specified have, which PRPs] recently published cause our decision in as of Date, the Effective their resolved says legally sig- difference liability to Work, the United States for nificant, must disagree we the dis- Costs, Response Past and Future Re- sent. sponse Costs.” Id. at 5. In a case Finally, acknowledge we dissent’s ASAOC, involving a 2006 our court found “inconsistency” concerns about our *13 language modified significantly proba- agreements circuit’s analysis tive of an intent the resolve PRP’s 113(f). § under CERCLA historical Some liability. F.3d at 758 768-69. The addi- background helps explain develop tion of these explains modifications thus ment of our case law. the EPA cases, departure prior our from separating revised its model Susan AOCs. See E. pre-2005 that provide AOCs do not for Gelber, Bromm & Bruce S. U.S. EPA & resolution of on the effective date DOJ, U.S. Interim Revisions CERCLA post-2005 those ASAOCs that do. Removal, and RD AOC Models to RI/FS say This is not to that universally we will Clarify Rights Contribution and Protec all post-2005 conclude that ASAOCs re- 3, 2005). tion 113(f) (Aug. Under Section liability, solve a pre-2005 PRP’s or that all Although defendant asks us consider not, AOCs do but develop- this historical the EPA’s in interpreting memorandum explain ment “inconsistency” serves to in this AOCs our court has al mentioned the dissent. It also rein- ready held that the “EPA memorandum is forces pre-2005 our conclusion that evidence, parol which can be consulted AOCs in are this case more like the 2002 only limited certain circumstances [and] AOCs, ITT and Bernstein affirms [t]his situation does not fall within one of relevance provisions detailing the EPA’s exceptions.” those narrow 758 rights, sue, reservation of covenant not to 770-71; F.3d at see also Duval Motors Co. plaintiffs and the of liabili- non-admission (Fla.Dist.Ct. Rogers, v. 73 So.3d ty. Ultimately, light guidance (“As rule, App.2011) a general evidence Bernstein, available to in ITT us we outside language, the contract which is cannot with agree that dissent evidence, may known as parol be consid justifies in our “inconsistency” ease law ered only language when the contract con conclusion plaintiffs AOCs resolve tains a ambiguity.”). latent We therefore plain- Because we rule in favor do not consult EPA’s for memorandum tiff argument, on its statute limitations AOCs, purposes interpreting but we remaining we need not its claims of reach do acknowledge, background, historical error. significant changes the EPA made its AOCs III. revisions,
Among reasons, those retitled For we the judg- these reverse its model “Administrative ment Order Con- of the district court remand for in ITT and Bern do AOCs and AOCs consistent with proceedings
further
(7th
Bankert,
Cir.
stein
opinion.
2013),
respective ruling
of which the
both
SUHRHEINRICH,
Judge,
Circuit
courts found
to be administrative set
dissenting.
however,
my opinion,
tlements.
two
critical features of the
this court is wheth
question before
Sanford/Orlando
with the
align
closely
Administrative
them more
and Orlando
AOCs
er the Sanford
(“Sanford/Orlando
Corp. agreements by demon
by Consent
Orders
Hobart/RSR
AOCs”)
“administrative settle
strating
parties’ intent to enter
an
constitute
meaning
First,
of CERCLA—
within the
the San
ments”
administrative settlement.
is,
they
[plaintiff
“resolved
whether
phrase
include the
“re
AOCs
ford/Orlando
liability to the United
Progress Energy’s]
liability” from 42
solved their
a response
...
some or all of
States
9613(f)(3)(B),
reference to
deliberate
or all of
or for some
the costs
authorizing a contribution ac
the statute
42 U.S.C.
such action....”
significant.
tion that Hobart found
Sec
con
Although the
AOCs
Sanford/Orlando
ond,
exchange
express
Industries,
ITT
provisions
tain several
that RSR
resolved
promises
ruled
Inc.,
BorgWarner,
Inc. v.
liability:
Energy agreed to reim
Progress
(6th Cir.2007),
and Hobart
v. Waste
per
the EPA’s
costs and
burse
Ohio, Inc.,
I further dissent because liability to EPA shall have resolved their law identified this Circuit’s case factors for the that is agreement re- to determine whether an RI/FS subject re arbitrary “[H]ave are immateri- this' Order.” solves liability” solved their mirrors U.S.C. al. 9613(f)(3)(B), “person § which entitles a Import The of the AOCs’ “Resolved A. has to the United who resolved its Liability” Language Ex- Their judicial in an States ... administrative or change Future for Per- Promises ly approved settlement” to a contribution formance This inclusion of 42 action. 9613(f)(3)(B)’s distinguishes § language majority primarily bases its decision from AOCs on similarities between the Sanford/Orlando Sanford/Orlan potentially [a must re- dealt with an administrative settle- settlements "resolve 1. Hobart ment, ("PRP”)’s] liability judi- sponsible party whereas RSR addressed to a contri- cially approved adminis- United States” entitle PRP settlement. Both judicially approved 42 U.S.C. bution action. trative settlements As the agreements. governing Ho awareness of the statute and an ITT/Bernstein noted, ITT lack bart court AOC’s align intent their with the any “explicit statement that ITT Indus statutory Hobart, See framework. its liability” tries had resolved distin 768; Maj. at atOp. 1004-05. The guished it from Hobart Administrative may not AOCs label Sanford/Orlando (“AS- Settlement and Consent Order settlements,” themselves “administrative AOC”)’s explicit statement “the Re they but come by mirroring close the stat spondents have, Date, the Effective utory language that defines an administra Hobart, liability.” resolved their 758 F.3d tive settlement: “Respondents shall have 770; ASAOC, Therefore, resolved their liability.” With this con Hobart, explicit an AOC’s acknowl- scious use of statutory language, the edgement liability represents of resolved parties deliberately manifested their intent at least one of an indication administrative to enter into an administrative settlement. settlement. Consistent this reason ing from the district court viewed Corp.’s Binding 2. RSR Precedent Re- explicit AOCs’ resolu Sanford/Orlando garding Exchange of Promises key tion of as a indication that for Future Performance and a Con- both AOCs were administrative settle ditional Not to Covenant Sue ments. majority acknowledges that The AOCs’ reference the' AOCs contain language Sanford/Orlando 9613(f)(3)(B) language only sepa indicating Progress Energy “shall have re- rates them from agree the ITT/Bernstein solved their liability,” but reasons that the ments but also reflects intent to enter language does not in Progress fact resolve into an administrative settlement with all Energy’s liability since the resolution is statutory its attendant consequences. Al upon Progress Energy’s conditioned per- though language resolving liability Maj. formance. Op. opin- As the the Hobart ASAOC differs verb tense out, ion points further the EPA’s cove- language resolving liability in the nants not to sue in the Sanford/Orlando AOCs, they share a delib Sanford/Orlando only upon Progress take effect En- erate statutory language reference to the *15 ergy’s payment past of future re- entitling settling potentially responsible sponse costs and of upon issuance (“PRP”) party to a contribution action. EPA’s notice of completion verifying Prog- Hobart, According to such a deliberate ress Energy’s performance of the work reference to the statute manifests an in Maj. addressed order. Op. consent tent to form an administrative settlement. at 1005-06. The analysis contrasts these See 758 at 768-69. Both F.3d provisions conditional with immediate- majority Hobart court and weight lend ly liability effective resolution of and cove- to the Hobart inclusion ASAOC’s of “ad nant not to sue in the Hobart ASAOC. ministrative in its settlement” title as well Maj. Op. problem, at The 1005-06. howev- acknowledgement its of itself as “an er, is that the earlier-decided RSR purposes administrative for settlement of 113(f)(3)(B) precludes Section this distinction between of CERCLA.” immedi- See id. 768-69; ASOAC, 31; at ate and conditional as a Maj. effectiveness basis Op. for aspects determining agreement at 1004-05. an These of the whether has AS- significant liability. AOC are they not because resolved a PRP’s See satis Darrah v. fy any Park, (6th City technical requirement but rather Oak F.3d 309 255 of Cir.2001) they because parties’ demonstrate (quoting Sec’y Salmi Health
1012
(6th
Decree,
Servs.,
at 79.2 The RSR
689
RSR Consent
& Human
any provisions
did not contain
Cir.1985))
three-judge pan-
(holding that a
addressing
of RSR’s
explicitly
resolution
earli-
of an
the decision
el cannot overrule
“
42
liability under
U.S.C.
Supreme
States
panel
‘unless United
er
modification
requires
decision
that the consent decree was
argued
Court
RSR
sitting
judicially approved
banc overrules
be-
en
not a
Court
”).
RSR could not have resolved its
cause
prior decision’
ac-
completing the remedial
before
Corp.,
plaintiff
filed
RSR
the EPA’s covenant not
triggered
tion
than
suit more
contribution
CERCLA
Corp.,
RSR
for future
to sue
entering
judicially
into a
years
three
after
rejected
argu-
F.3d
with the United
approved consent decree
ment,
the EPA ex-
finding RSR and
Corp., States. RSR
promises
performance
changed
future
oth-
required RSR and the
consent decree
enforceable,
bilateral con-
that created
settling defendants
reimburse
er
tract:
past
response
for
and future
United States
that it
not have re-
RSR insists
could
on a
perform remedial work
costs and to
its
to the United States
solved
site. Id. The consent decree
contaminated
the comple-
in the consent decree before
not to
covenant
included the United States’
remedial
But RSR’s
tion
action.
against
sue or take administrative action
future
was the
promise of
settling defendants.
RSR and the other
very
gave
exchange
consideration
in full in RSR
Id.
not
Although
quoted
not to
United States’ covenant
agreement’s
covenant
damages.
seek further
RSR and its co-
to sue states:
defendants resolved their
to assume all
by agreeing
not to sue
United States covenants
United States
[T]he
States)
(vis-a-vis
the United
against
or to take administrative
future
And even if the
remedial actions.
pursuant
to Sec-
Settling Defendants
future
107(a)
regarding
covenant
CERCLA....
tions
until
costs did not take effect
the reme-
liability,
to future
Except
respect
the statute of
complete,
dial action was
take
not to sue shall
these covenants
actions runs
limitations
contribution
pay-
upon
receipt
effect
settlement,
“entry”
from the
Paragraph
of Sec-
required by
ments
9613(g)(3)(B),
from the
(Reimbursement
Response
tion XVI
provision of that
date that each
settle-
Costs).
to future
respect
With
ment takes effect.
take
covenants not to sue shall
these
omitted).
(internal
Ultimately,
Id.
Completion
citation
upon
effect
Certification
consti-
by EPA.
the court held
consent decree
of Remedial Action
*16
case).
interpret
holding
Corp.
available
ent case
of that
2. The
Consent Decree is
RSR
Although
appropriate only
judicial notice is
on
District of Ohio’s electronic
the Southern
3:89-cv-383,
subject
not
case
is
and
when
fact "is
reasonable
docket. The
number
Omnicare,
201(b);
may
dispute,”
R.436.
Fed.R.Evid.
In re
decree
be found at
consent
455,
Litigation,
Although
I
Inc. Securities
465-
the record
Cir.2014),
(6th
language
judicial
Corp.
of the RSR
notice of the RSR
66
would take
subject
public
Corp.
part
record of
Consent Decree is not
to reason-
Consent Decree
Contracting
dispute
capable of
Scotty’s
&
because it
accurate
case. See
able
different
States,
Stone,
ready
public
from the
789
and
determination
Inc. v. United
Cir.2003)
(6th
Scotty's,
(taking judicial
docket of the court of record. See
& n.
notice
1.
a differ-
The contractual RSR addressing the resolution closely consent decree resembles the Corp. non-binding, stating, “it is far from clear promises mutual in the Sanford/Orlando from opinion our that RSR even contested AOCs, including the EPA’s conditional intended to resolve liabili- RSR, Progress covenant not to sue. Like ty.” Maj. Op. at 1007. The opinion, in made Energy promises several under each fact, directly recognized the issue as dis- implement to conduct an AOC: RI/FS puted: “RSR insists that is could not have site, pay for each the EPA for past resolved its to the United States ” site, response costs incurred at each and to the consent decree.... Corp., RSR reimburse the EPA for future response only F.3d at 558.3 Not did the court rec- overseeing costs incurred in ognize RI/FS’s argument, and address this it was return, implementation. necessary to rule on argument to de- promised in both Corp. RSR and this case cide the case. Had the court accepted settling recovery not to sue the PRP for position RSR’s that the consent decree did compel these costs or to work further of not liability, resolve its RSR could have in the agreement, sort described but by avoided the time-bar on its action ei- 1) only promised once the EPA received the ther: taking advantage six-year of the completion funds certified of the statute of limitations for cost recovery ac- 2) agreed-upon Corp., 556-58, work. RSR 9613(g)(2)(B), F.Bd tions id. at or 554; Decree, RSR Consent at 79. calculating Be- the statute of limitations from cause the RSR court found that the completed date RSR the remedial ac- contingent promise nature of the EPA’s tion allegedly liability, resolved its preclude did not the resolution of RSR’s rather than the earlier date of the consent liability, decree, panel neither should this decide see id. 557-58. Under ei- route, the conditional nature of the EPA’s ther RSR’s action would not have promise not to sue in the been time-barred. Yet the court held Sanford/Orlando 1) their AOCs undercuts status as RSR’s action was adminis- time-barred because: 2) trative settlements. Corp.’s Under RSR RSR did resolve its it did logic, Progress Energy’s promise by “agreeing to under- so to” enter consent take future stages clean-up process by decree—not completing the actions in exchange for the EPA’s conditional promised cov- the consent decree. Id. at enant not binding sue established a 557-58.4 argument provision Just because this was one of sev- from the date that each of the set- eral raised RSR does not mean the issue tlement takes effect.” RSR 496 at 558. words, squarely “was In other even if the RSR before the court” or other- accepted argument Maj. that RSR did not re- inconsequential. Op. wise completed perform- solve its until it ance, majority 4. Even if the is correct ruled still would have RSR’s contri- Corp.’s statement on resolution of via bution action time-barred because the statute exchange promises non-binding entry runs the date limitations re- inapplicable, gardless otherwise I would still dissent at of when the PRP resolves *17 rule, part. Corp. According Progress Energy’s least in RSR held that “the stat- to this con- 'entry arising ute of limitations runs from the of the tribution action for costs under settlement,' § 9613(g)(3)(B), Progress 42 U.S.C. not Sanford AOC is time-barred. Ener- Corp. what ues to treat the RSR consent decree as accepting
Rather than
RSR
face,
majority
bearing
follows
from
a simi-
says
agreements
on its
different
Corp.
interpretation
exchange
per-
of RSR
lar
for future
misguided
promises
in formance,
Seventh Circuit
by
articulated
one
cove-
of them conditional
in
later-
by
sue,
this Court
Bernstein and
later-
simply
nant not
because the
court
Hobart.
Bernstein
decided
and
so.
decided Bernstein
Hobart did
decree
distinguished the RSR consent
Maj. Op. at 1007-08.5
by
at issue in that case
from
AOC
fact,
above, the
as shown
RSR cove-
mistakenly construing RSR’s covenant not
immediately
to sue
nant not
was not
effec-
“immediately effective.” Bern-
to sue as
tive,
upon
rather conditioned
the set-
but
stein,
appears
at 213.
It
to the EPA and
tling
payment
defendants’
faulty con-
Bernstein court reached this
completion
EPA’s
of the
certification
by
partial quote
on a
relying
clusion
just like
in
the covenants not
sue
work—
quoted
Corp.
Corp.
only part
RSR
RSR
case. Yet the
court did
this
RSR
not to
of the consent decree’s covenant
not view this conditional covenant not to
sue,
agreed
stating, “the United States
resolving liability
sue as a barrier to
under
action’
‘not
sue or take administrative
To
42 U.S.C.
the con-
additional
impose
that would
trary,
argument
the court addressed the
(quot-
at 554
Corp.,
RSR.” RSR
496 F.3d
Energy
presented
Progress
lia-
—that
Decree,
79).
ing RSR Consent
bility cannot be resolved under
condition-
quoted
passage
as
Bernstein court
until complete per-
al covenant
to sue
con-
support
position
for its
that the RSR
rejected
grounds
formance—and
it on the
immediately
included “an
ef-
sent decree
interpretation
that such
inconsistent
that,
turn,
to sue”
promise
fective
principles and
with contractual
with set-
immediately
re-
established “an
effective
ting the statute of limitations from the
Bernstein,
liability.”
lease from
entry
judicially approved
date of
of a
set-
adopted
at 213.
Bern-
The Hobart
(or,
tlement
as in this
from the date
understanding
stein’s mistaken
settlement).
of an administrative
See RSR
agreement’s terms
thus of RSR
RSR
and
Corp.,
because the explic- AOCs Sanford/Orlando
itly
Progress Energy
state that
“shall have
Rights
1. Reservation of
resolved their
to the EPA” and
Analogizing the
Sanford/Orlando
exchange
include a bilateral
promises
AOCs based on the
ITT/Bernstein
performance,
for future
I would affirm the
rights
EPA’s broad reservation of
falls
district
holding
court’s
the San-
squarely
analytical
within this
ap
Court’s
Progress
AOCs resolved
En-
ford/Orlando
proach.
ITT
highlighted
ergy’s liability and triggered the statute of
ITT
broad
rights
AOC’s
reservation of
limitations for its contribution action.
holding that the AOC did not resolve liabil
ITT,
ity.
vation the. as “much than the ITT ITT, rights narrower” agreements clarifies and Bernstein Perhaps F.3d at 770. AOC’s. 758 in legal to take action ability the EPA’s bring did not ASAOC’s by the not matters covered rights to the court’s broad reservation of satisfactory imple- PRP’s to ensure the attention, or the court perhaps found in clean-up addressed mentation of the unimportant light in provision of the AS- rights does reservation of agreement. The indicating a other terms resolution AOC’s take to legal action not allow liability, including of those EPA added or Energy other PRPs compel Progress model in 2005 if the (although to its AOCs they already performed undertake actions majori- latter scenario as was agreement. settlement pursuant ty suggests, say Hobart court not did contemplated Because the so). reason, Regardless of the Hobart’s AOCs not en- does Sanford/Orlando of disregard the ASAOC’s broad reserva- un- steps clean-up all of compass possible an rights exposes inconsistency tion of CERCLA, AOCs the EPA der leave analysis case of our law’s settlement parts clean-up authority to order of with agreements But by agreement. not addressed presence of a reser- authority should not affect reserved rights the Hobart provision vation an as administrative status agreement’s give should at least ASAOC this Court because U.S.C'. continuing about pause the wisdom 9618(f)(3)(B) requires only a resolution provision such a as unre- treat indicative of action. for “some” liability. solved Therefore, factor should not lead us hold the in this case are not admin- Liability 2. Non-Admission of istrative settlements. Both ITT emphasized and Bernstein liability by non-admission of the PRP as a
Moreover, relying on reservation of respective reason the AOCs did not re- rights is in ten- find unresolved Bernstein, 212; liability. solve F.3d at with outcome Hobart. Al- sion ITT, 506 F.3d on the Reliance though publish- Hobart’s addressed Orlando8 AOC’s similar non-admission of opinion binding thus not on this ed liability to conclude the AOC is not Court, noteworthy it the Hobart administrative settlement thus rests on rights contained a reservation of ASAOC7 precedential ground. firm ITT, Bernstein, parallel to that in the AOCs. The Hobart AS- however, questionable, Sanford/Orlando It is that a re- states, identically AOC to the ITT almost fusal to admit denotes unresolved AOC, 1003-04, Maj. Op. see that “noth- liability. Admitting liability ing EPA ... prevent herein shall U.S. as resolving Compare same Ad- taking legal mission, (10th or equitable other Law Dictionary Black’s necessary.” ed.2014), appropriate deems at Thomson Reuters available (“a ASAOC, provi- Hobart at 28. Given this in which Westlaw statement someone sion, why it is true puzzling something admits or that he Decree, majority 7. As with I the RSR Consent 8. The excludes Sanford AOC judicial would take notice of the Hobart AS- comparison from this because. the Sanford part public AOC as in a different record liability by silent AOC is as to admission reasonably subject dispute. case that is not Progress Energy. Scotty's, See F.3d at 789 & n. 1. something wrong”), agreements or she has done with tlement brought before this (10th Resolve, Dictionary Black’s Law inconsistency Court. This should lead the ed.2014), available at Thomson Reuters Court to reexamine the use of this factor (“to acceptable find an or even Westlaw in determining whether agreements are (a satisfactory way dealing prob- administrative settlements. *20 difficulty)”). A can person agree lem or a to undertake actions to resolve claim 3. Conditional Covenant Not to Sue it against admitting without to the factu- Reliance on the AOCs’ Sanford/Orlando legal purportedly underlying
al or truth conditional covenant not to sue to show agreements that claim. Settlement liability accurately unresolved frequently other contexts include such follows Ho- bart, non-admission clauses. distinguished See Defense which the ASAOC at (2015), § Equal Employment Claims 14:8 issue in that case with the ITT AOC available at Thomson Reuters Westlaw noting “the covenant not to sue took effect (observing the “common” use of non-ad- case,” immediately this whereas the by employers settling mission clauses “required] ITT AOC payment first.” Ho- claims). employment discrimination bart, 758 F.3d at explained 770. As earli- implicitly recognizes itself CERCLA this er, this Circuit’s distinction between Ho- distinction between admission resolu- bart’s immediately effective covenant not liability governing tion of in the section to sue and a conditional covenant not to agreements by providing, “the sue like in the AOCs mis- Sanford/Orlando by any party in participation process interprets Corp. But RSR even if it did under this section shall not be considered not, problematic the distinction is because an any pur- admission of places Hobart ASAOC its own condi- 9622(d)(1)(B). pose.” 42 Al- U.S.C. tion on its covenant not to sue. The Ho- case though provides law our Circuit a provides, bart ASAOC “This covenant not firm treating basis for a non-admission of to sue shall take effect upon the Effective a sign of unresolved Date upon and is conditioned the com- there is no logical connection between plete satisfactory performance by Re- admitting and resolving liability. There- spondents obligations all under fore, a non-admission should ASAOC, Agreement.” Settlement Hobart upon be relied to find the Orlando added). (emphasis published at 28 not an AOC is administrative settlement. opinion in acknowledge Hobart does not Moreover, using a non-admission of lia- language, this conditional and therefore bility to hold the Orlando AOC is not an any binding Court cannot infer rule of administrative settlement against cuts law from Hobart’s on this matter. silence Corp. results in Al- Hobart. But the omission reveals a lack of substan- though not published discussed either analysis tive of conditional covenants not opinion, agreements in both those they to sue and whether from im- differ an eases contained a non-admission of liabili- mediately yet effective still conditional ty, ASAOC, 1; at RSR Consent covenant not to for purposes sue of resolv- Decree, 3, yet agreements both resolved ing liability. Whatever the reason for the hardly This discussion (possibly court’s silence because the par- ruling matters because of the in RSR ties failed to bring term to the court’s fully that even conditional covenants attention or because the court considered immaterial), may not to sue resolve But be- the omission demonstrates application an uneven differing interpretation this factor to set- cause a of RSR they carry if out not to fail to their conditional covenant divestment Corp. and agreement with the EPA.” part worth con- in this it is prevailed sue Zuber, Dravo immediately effective sidering whether (8th Cir.1994). sue The covenant not to sue is covenant but conditional still appears in the Sanford/Orlando fully a condi- substantively different subject precedent, to a condition whereas tional one. not to sue in the Hobart the covenant concept contractual A condition appears subject condition ASAOC duty to render negates “triggers The main difference be- subsequent. Condition, performance.” a promised not to sue these two covenants tween (10th ed.2014), Dictionary Black’s Law ability under the the EPA’s theoretical Thomson Reuters Westlaw. available while the AOCs to sue Sanford/Orlando an obli- precedent A where condition *21 Energy’s perform- Progress contractual con- take effect until the gation does not ongoing.9 ance is Condition, Black’s Law dition occurs. said, being That it is doubtful whether (10th ed.2014), available at Dictionary actually types the two of conditions differ In the Thomson Reuters Westlaw. liability” under 42 “resolving in terms of context, where a settlement CERCLA permanent ef- prece- are obligations a condition PRP’s not to fectiveness of both covenants sue sue, the EPA’s covenant not dent to depends upon complete PRP’s sat- right up until has “the to sue the EPA Therefore, isfactory performance. both completed its point when PRP uncertain covenants not sue remain be- George A. NCR v. obligations.” complete per- contingency cause of the (7th 682, Whiting Paper, formance.10 The PRP under the condition Cir.2014). contrast, is sub- In a condition subsequent is to renewed susceptible legal takes effect sequent obligation where incomplete action in the event of or dissa- discharged upon is immediately but tisfactory performance just as the PRP Condition, happening condition. suscepti- precedent under the condition (10th ed.2014), Dictionary Black’s Law implicit case ble. Our law’s distinction Thomson Reuters Westlaw. available at confusing two is between the therefore not to sue of an covenant terms agree- entering into a settlement “the subject subsequent, addition, to a condition it ap- ment under CERCLA. are with the presently statutory purpose defendants vested to overlook the pears statute, protections subject three-year to later statute of limitations con- difference, however, 9. wanes in im- 10. Even if the covenant not to sue Even this EPA’s all, portance the limitation of the contrac- under no the EPA contained condition at could dealing, duty good faith which tual and fair a PRP for contract if still sue breach of failing by interfering with or party violates perform obligations PRP failed to its under performance. cooperate party's other agreement. damages the settlement (Second) § 205. As of Contracts Restatement theoretically not such an action would be good long making as a PRP reasonable significantly brought different from an action performance, steps complete faith towards Thus, directly under CERCLA. even a uncon- per- bringing suit middle of the EPA in the arguably covenant ditional not to sue resolves likely inter- would be a deliberate formance fully liability to the same extent as a condi- ability to fulfill the ference with PRP’s sue, covenant not since both tional terms (i.e. complete per- precedent its condition formance). (for the EPA different still allow to sue causes scenario, In such the EPA action) non-performance. in the event of rely prece- on the condition could failed obligation avoid its not to dent to contractual 7AAm.Jur.2d 687. sue. See Contracts arising tribution actions out of settlement ESQUIVEL-QUINTANA, Juan
agreements:
responsi-
“to ensure that the
Petitioner,
parties get
bargaining
ble
—and
than
clean-up
sooner rather
later.”
—table
Delaying
to sue versus conditional covenants sue, repre-
not to this distinction does not deciding
sent a rational basis for which agreements give rise to a con-
tribution 42 U.S.C. *22 9613(f)(3)(B). Therefore, such a factor
should not be used determine whether the Progress AOCs resolved
Sanford/Orlando
Energy’s liability.
Conclusion
I would affirm the decision of the dis-
trict court because Sanford/Orlando agreements resemble demonstrating and Hobart
parties’ intent to enter into an administra- settlement, thereby
tive triggering the
three-year Prog- statute of limitations for Energy’s
ress contribution action.