GOVERNMENT OF GUAM, APPELLEE v. UNITED STATES OF AMERICA, APPELLANT
No. 19-5131
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 12, 2019. Decided February 14, 2020.
Rachel Heron, Attorney, U.S. Department of Justice, argued the cause for appellant United States of America. With her on the briefs were Eric Grant, Deputy Assistant Attorney General, and Evelyn Ying and Michael Augustini, Attorneys.
John D.S. Gilmour argued the cause for plaintiff-appellee. With him on the brief were Bezalel A. Stern, William J. Jackson, and Mark Donatiello. Fabio Dworschak entered an appearance.
Before: HENDERSON and TATEL, Circuit Judges, and GINSBURG, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge TATEL.
I.
Congress enacted CERCLA,
Although multiple entities may be responsible for a superfund site, only one may have actually “incurred” “costs of response“—a necessary predicate to bringing a section 107 claim.
Congress addressed this gap in the statutory scheme when it amended CERCLA through the Superfund Amendments and Reauthorization Act of 1986, Pub. L. 99–499, 100 Stat. 1613. Specifically, it added a new section to the Act—section 113—which “provide[d] two express avenues for contribution.” Cooper, 543 U.S. at 167. The first, section 113(f)(1), provides that “[a]ny person may seek contribution from any other person who is liable or potentially liable under section [107(a)] of this title, during or following any civil action under section [107(a)] of this title.”
The upshot is that CERCLA now offers two potential causes of action for an entity seeking recovery from a PRP: a section 107 “cost-recovery” action, available for recoupment of cleanup costs, and a section 113(f) “contribution” action, available for recoupment of funds paid out pursuant to a section 107 action, a settlement, or another contribution action. Central
II.
Nearly a century before CERCLA‘s passage, the United States captured the island of Guam following the Spanish-American War. See Paul Carano & Pedro C. Sanchez, A Complete History of Guam 169–83 (1964) (describing how Guam became an American possession). From 1903 until World War II, the United States treated Guam as a US Naval ship—the “USS Guam“—and maintained military rule until the passage of the Guam Organic Act in 1950. Robert F. Rogers, Destiny‘s Landfall: A History of Guam 126, 226 (1995). That act marked the formal transfer of power from the United States to Guam‘s newly formed civilian government, id. at 226, but until the 1960s, visiting Guam required a military security clearance, see Exec. Order No. 11045, 3 C.F.R. 238, 238-39 (1962) (discontinuing the Guam Island Naval Defensive Sea Area and Guam Island Naval Airspace Reservation). Guam remained, as it had been since the Treaty of Paris in 1898, an “unincorporated territory of the United States.”
Against this colonial backdrop, the Navy constructed and operated the Ordot Dump for the disposal of municipal and military waste sometime in the 1940s. Even after relinquishing sovereignty over the island, however, the Navy continued to take advantage of the dump. Throughout the Korean and Vietnam Wars, the Navy used the Ordot Dump for the disposal of munitions and chemicals, allegedly including Dichlorodiphenyltrichloroethane—DDT—and Agent Orange, Am. Compl. ¶ 11. It was “the only sited and operational dump
Despite its extensive use, the Ordot Dump lacked basic environmental safeguards. “[U]nlined on its bottom and uncapped at its top,” the landfill absorbed rain and surface water, which percolated through the landfill and mixed with contaminants. Am. Compl. ¶ 12. These contaminants released into the nearby Lonfit River, which flows into the Pago River, and ultimately into the Pacific Ocean at Pago Bay. Id.
The Ordot Dump has long attracted the attention of the United States as regulator. EPA added the Ordot Dump to its National Priorities List in 1983, and, in 1988, issued a Record of Decision designating the Navy as a potentially responsible party for the site. Id. ¶ 13. But having relinquished sovereignty over the island, the Navy no longer owned and operated the Ordot Dump—Guam did. And, beginning in 1986, EPA repeatedly ordered Guam to devise plans for containing and disposing of waste at the landfill.
Unsatisfied with Guam‘s remediation attempts, EPA sued Guam in 2002 under the Clean Water Act,
Rather than litigate these claims, Guam and EPA entered into a consent decree in 2004, which the District Court of Guam approved. See Consent Decree, United States v. Guam, No. 02-00022 (D. Guam) (Consent Decree), J.A. 90. That Decree required Guam, among other things, to pay a civil penalty, close the Ordot Dump, and design and install a “dump cover system.” Id. at 5–12, J.A. 94–101. The Decree expressly states that it “shall apply and be binding upon the Government of Guam . . . and on the United States on behalf of U.S. EPA,” and was “based on the pleadings, before taking testimony or adjudicating any issue of fact or law, and without any finding or admission of liability against or by the Government of Guam,” id. at 3, J.A. 92. Although cleanup continues, Guam officially closed the Ordot Dump in 2011 pursuant to the Decree.
Guam initiated this action against the United States in 2017, arguing that the Navy was responsible for the Ordot Dump‘s contamination and seeking to recoup its landfill-closure and remediation costs. Alleging that the costs of the Ordot Dump‘s required remediation would “exceed approximately $160,000,000,” Am. Compl. ¶ 15, Guam brought two causes of action relevant here: a CERCLA section 107(a) claim seeking “removal and remediation costs” related to the landfill, id. ¶ 25, and, “[i]n the alternative,” a section 113(f) contribution action, id. ¶ 31.
The district court, accepting the premise that “Guam is permitted to proceed against the United States for full cost recovery under section 107(a) only if Guam‘s right to contribution under section 113(f)(3)(B) has not been triggered,” explained that “the key question[] that the pending motion to dismiss presents is whether the 2004 Consent Decree ‘resolve[d] [Guam‘s] liability’ for the response action or response costs that Guam undertook with respect to the Ordot Landfill and also qualifies as a ‘settlement’ within the meaning of” CERCLA‘s contribution provision. Guam v. United States, 341 F. Supp. 3d 74, 84 (D.D.C. 2018) (quoting
The United States sought interlocutory appeal of the district court‘s order pursuant to
III.
The first question we must decide, as it underlies this dispute, is whether CERCLA sections 107 and 113 are mutually exclusive. That is, if a party incurs costs pursuant to a settlement and therefore has a cause of action under section 113, is it precluded from seeking cost-recovery under section 107?
While the differences between CERCLA sections 107 and 113 seem clear in theory, the supposedly sharp distinction between cost-recovery and contribution does not always play out in practice. Although the two actions are separate, some situations ostensibly fall under both CERCLA provisions. As the Supreme Court explained in United States v. Atlantic Research Corp., 551 U.S. 128 (2007), “a PRP may sustain
In Atlantic Research, the Supreme Court “d[id] not decide whether these compelled costs of response are recoverable under § 113(f), § 107(a), or both.” Id. To date, neither have we. But “every federal court of appeals to have considered the question since Atlantic Research . . . has said that a party who may bring a contribution action for certain expenses must use the contribution action, even if a cost recovery action would otherwise be available.” Whittaker Corp. v. United States, 825 F.3d 1002, 1007 (9th Cir. 2016); see id. at 1007 n.5 (collecting cases).
Today we join our sister circuits. The entire purpose of section 113(f)(3)(B) is to “permit[] private parties to seek contribution after they have settled their liability with the Government.” Atlantic Research Corp., 551 U.S. at 132 n.1. Allowing a PRP that has settled with the government to instead seek recoupment through a section 107 cost-recovery claim would render section 113(f)(3)(B) superfluous; if a PRP could choose whether to sue under section 107 or section 113, “a rational PRP would prefer to file an action under § 107(a)[] in every case.” Hobart Corp. v. Waste Management of Ohio, Inc., 758 F.3d 757, 767 (6th Cir. 2014). Like any statute, CERCLA must be “read as a whole,” King v. St. Vincent‘s Hospital, 502 U.S. 215, 221 (1991), and we decline to interpret section 113(f)(3)(B) as providing superfluous relief to a party that has settled with the United States or a State.
Having concluded that section 113(f)(3)(B) and section 107 are mutually exclusive, we must address one more threshold issue. Section 113(f)(3)(B) reads: “A person who has resolved its liability to the United States . . . for some or all of a response action or for some or all of the costs of such action in a[] . . . judicially approved settlement may seek contribution from any person who is not party to a settlement referred to in paragraph (2).”
CERCLA “is not a model of legislative draftsmanship,” Exxon Corp. v. Hunt, 475 U.S. 355, 363 (1986), and, read literally, section 113(f)(3)(B)‘s “not party to a settlement” language could create nonsensical results. For example, imagine hypothetical Company X settles with EPA for the costs of response actions for a contaminated site in California in 1990. By virtue of becoming “party to a settlement,” Company X would gain immunity from any future section 113(f)(3)(B) action, even if that action were to arise decades
The United States offers two alternative interpretations. First, it argues that reading sections 113(f)(2) and 113(f)(3)(B) together demonstrates that the phrase “any person who is not party to a settlement referred to in paragraph (2)” simply means any person not insulated from such a contribution claim by a section 113(f)(2) settlement. Appellant‘s Suppl. Br. 7. Alternatively, it argues that, even if the phrase means that a contribution action could not be brought against any party to any settlement whatsoever, it does not matter here because the Consent Decree was a settlement between Guam and the EPA and Guam‘s contribution action is against the Navy—a different federal agency. Id. at 7-9. Because we agree with the first alternative, we need not address the second.
Congress enacted Section 113(f) to bring PRPs “to the bargaining table at an early date.” Asarco LLC v. Atl. Richfield Co., 866 F.3d 1108, 1117 (9th Cir. 2017) (quoting Whittaker Corp., 825 F.3d at 1013 (Owens, J., concurring)). Section 113(f) accomplishes this goal by providing two benefits to such PRPs: a “defensive benefit” to PRPs who decide to resolve their liability by entering a settlement with the United States or with a State and are thereby protected against contribution
Reading these two sections in pari materia, we interpret the phrase “any person who is not party to a settlement referred to in paragraph (2)” in section 113(f)(3)(B) to mean that one benefit does not cancel out the other. See Motion Picture Association of America, Inc. v. F.C.C., 309 F.3d 796, 801 (D.C. Cir. 2002) (“Statutory provisions in pari materia normally are construed together to discern their meaning.“). Section 113(f)(3)(B) provides that a person who has resolved its liability with the United States or a State can pursue a contribution action against any person but it notes that the right to seek contribution does not erase the protection provided under section 113(f)(2). For example, if Company A resolves its liability for a response action with the United States, it is protected under section 113(f)(2) from future contribution actions related to its settlement with the United States. The fact that Company B subsequently also resolves its liability to the United States in a related action—and can thereby initiate a contribution action against “any person” under section 113(f)(3)(B)—cannot mean that Company A‘s protection under section 113(f)(2) is forfeited, leaving it vulnerable to a contribution suit by Company B. This is what the phrase “any person who is not party to a settlement referred to in paragraph (2)” clarifies. Another way to view the two provisions working in tandem is to think of the above hypothetical in reverse. As the Third Circuit has explained, “[i]t appears that the statute allows the government to immunize a late settlor from an early settlor‘s contribution suit by settling with the government.” United States v. Alcan Aluminum, Inc., 25 F.3d 1174, 1186 (3d Cir. 1994); see also J. Whitney Pesnell, The Contribution Bar
This interpretation is supported by the fact that Congress chose to reference “paragraph (2)” within section 113(f)(3)(B). “[W]e are obliged to give effect, if possible, to every word Congress used.” Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979). In section 113(f)(3)(B), Congress did not state “any person who is not party to a settlement” alone; instead, it specifically stated “any person who is not a party to a settlement referred to in paragraph (2).”
Here, the “any person who is not a party” language in section 113(f)(3)(B) does nothing to prohibit Guam‘s contribution action. Guam is not attempting to pursue a contribution action against a PRP that has already resolved its
A.
In order to trigger CERCLA section 113(f)(3)(B), a party must have “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 a[] . . . judicially approved settlement.”
“Whether a non-[CERCLA] settlement agreement may give rise to a contribution action has split the circuits,” three to one. Asarco, 866 F.3d at 1119. As the Ninth Circuit recently explained, both it and the Third Circuit have concluded that “Congress did not intend to limit § 113(f)(3)(B) to response actions and costs incurred under CERCLA settlements,” and that “a non-[CERCLA] settlement agreement may form the necessary predicate for a § 113(f)(3)(B) contribution action.” Id. at 1120–21; see also Trinity Industries, Inc. v. Chicago Bridge & Iron Co., 735 F.3d 131, 136 (3d Cir. 2013) (same). The Seventh Circuit has recently concluded the same. See Refined Metals Corp. v. NL Industries Inc., 937 F.3d 928, 932 (7th Cir. 2019) (“[Section] 113(f)(3)(B) . . . does not limit covered settlements to those that specifically mention
We agree with the Third, Seventh, and Ninth Circuits that section 113(f)(3)(B) does not require a CERCLA-specific settlement. As the Seventh and Ninth have pointed out, another provision of section 113—paragraph (f)(1)—expressly requires that a party first be sued under CERCLA section 106 or 107 before pursuing contribution. See
B.
But that conclusion gets us only so far. The fact that a non-CERCLA settlement can trigger section 113(f)(3)(B) tells us
We begin with CERCLA‘s text. The phrase “resolved its liability” is nowhere defined in the statute, meaning our interpretation of these words should start “with their ordinary meaning.” BP American Production Co. v. Burton, 549 U.S. 84, 91 (2006). The word “resolve” usually means “to deal with successfully,” “reach a firm decision about,” or “work out the resolution” of something. Resolve, Merriam-Webster‘s Collegiate Dictionary 997 (10th ed. 1997). Our sister circuits have likewise concluded that in the context of section 113(f)(3)(B), “resolved” means “decided, determined, or settled—finished, with no need to revisit,” Bernstein, 733 F.3d at 211, that is, a “firm decision” that is no longer “susceptible to further dispute or negotiation,” Asarco, 866 F.3d at 1122 (internal quotation marks omitted). The word “liability,” in turn, means an “obligat[ion] according to law or equity.” Liability, Merriam-Webster‘s Collegiate Dictionary 670 (10th ed. 1997); see also Liability, Black‘s Law Dictionary (11th ed. 2019) (“the quality, state, or condition of being legally obligated or accountable; legal responsibility to another or to
So far, so good—but liability for what? Recall that section 113(f)(3)(B) kicks in where a party has resolved its liability for “some or all of a response action” or for some or all “of the costs of such action.”
By its plain terms, the 2004 Consent Decree “resolve[d]” Guam‘s liability for “some . . . of a response action.” The Consent Decree provides that it “shall be in full settlement and satisfaction of the civil judicial claims of the United States against the Government of Guam as alleged in the Complaint filed in this action.” Consent Decree ¶ 45, J.A. 112. EPA‘s Complaint, in turn, sought an injunction requiring Guam to comply with the Clean Water Act, by, among other things, “submit[ting] plans and a compliance schedule for a cover system for the Ordot Landfill” and for “complet[ing] construction of the cover system to eliminate discharges of untreated leachate.” CWA Complaint ¶ 29, J.A. 86. The Consent Decree further obligates Guam to design and install a “dump cover system.” Consent Decree ¶ 8, J.A. 94. Construction and installation of a cover falls squarely within the definition of a “remedial action,” which includes the “confinement” of substances and the “repair or replacement of leaking containers.”
C.
Despite the clarity of the Consent Decree, Guam insists that, for several reasons, the Decree did not “resolve” Guam‘s liability to the United States. We are unpersuaded.
Guam first argues that because “the US broadly and unconditionally reserved all of its rights, including its rights to pursue CERCLA claims,” the Consent Decree is “replete with ongoing legal exposure for Guam” and therefore “did not resolve liability with the requisite finality to trigger a Section 113(f)(3)(B) contribution claim.” Appellee‘s Br. 25; 28–29. True, the Consent Decree provides that “[n]othing . . . shall limit the ability of the United States to enforce any and all provisions of applicable federal laws and regulations.” Consent Decree ¶ 46, J.A. 112. But that provision applies only to “violations unrelated to the claims in the Complaint.”
Guam next contends that the Consent Decree cannot have triggered section 113(f)(3)(B) because “it only releases Guam from . . . liability upon full implementation of the settlement‘s requirements, and performance is ongoing.” Appellee‘s Br. 19. Such a reading, however, would nullify section 113(f)(3)(B) in a host of cases. According to section 113‘s statute of limitations, a party must bring a contribution action “no more than 3 years after . . . entry of a judicially approved settlement.”
Next, Guam directs us to the Consent Decree‘s disclaimer of liability, which provides that the parties’ agreement is
Guam nonetheless asserts that the consent decree falls outside CERCLA‘s provisions because the statute covers “[c]ontamination involving ‘hazardous substances‘” and the Clean Water Act violations alleged in EPA‘s Complaint concerned “non-CERCLA pollutant discharges only.” Appellee‘s Br. 42. But the Complaint demanded that Guam “complete construction of [a] cover system to eliminate discharges of untreated leachate,” CWA Compl. ¶ 29, and
And finally, Guam argues that denying it the right to seek recovery under section 107 presents constitutional concerns. “[A]s to non-settling PRPs,” Guam insists, “the right to contribution is a property interest, which cannot be extinguished without due process of law.” Appellee‘s Br. 49 (internal quotations omitted). Because a qualifying section 113(f)(3)(B) settlement insulates Guam from further contribution suits, Guam argues that other PRPs lack notice, and “[a]llowing the [Clean Water Act] and [Consent Decree] at issue here to trigger contribution rights equates to silently extinguishing the property interest of anyone who might have a potential claim against a settling party without due process of law.” Id. Although it is far from clear whether Guam could assert this claim on behalf of absent third parties, because Guam failed to raise it in the district court, “it is forfeited.” Keepseagle v. Vilsack, 815 F.3d 28, 36 (D.C. Cir. 2016). And as to Guam‘s own rights, Guam lost the ability to bring a contribution claim not because it was deprived of due process, but because the statute of limitations ran.
IV.
From Guam‘s perspective, the result we reach today is harsh. “[A]ccept[ing] as true,” as we must at this stage, “all material allegations of the complaint,” Barker v. Conroy, 921 F.3d 1118, 1121 (D.C. Cir. 2019) (internal quotations omitted), the United States deposited dangerous munitions and chemicals at the Ordot Dump for decades and left Guam to foot the bill. The practical effect of our decision is that Guam cannot now seek recoupment from the United States for that contamination because its cause of action for contribution expired in 2007. Unfortunately for Guam, however, “where a
For the foregoing reasons, we reverse the district court‘s denial of the United States’ motion to dismiss and remand with instructions to dismiss the complaint.
So ordered.
