This dispute presents an issue of apparent first impression regarding the federal Comprehensive Environmental Response, Compensation, and Liability Act (“CERC-LA”). The defendant, a landowner, paid a general contractor for costs associated with the cleanup of a contaminated parcel of land that the defendant owned. The general contractor failed, however, to remit those payments to the plaintiff, a subcontractor who had performed work on the site. The plaintiff then sought payment directly from the defendant landowner. The sole question presented on appeal is whether CERCLA grants the subcontractor a right of recovery against the landowner in these circumstances, effectively requiring the landowner to pay twice for the same work performed — once to the contractor and once to the subcontractor. We conclude that it does not. Accordingly, we reverse the district court’s grant of partial summary judgment to the plaintiff subcontractor and remand the case with instructions to grant summary judgment in favor of the defendant.
BACKGROUND
The principal facts underlying this lawsuit are undisputed. At all relevant times, the defendant Norampac Industries, Inc., owned a parcel of land in Erie County, New York. After Norampac discovered that soil at the site contained levels of lead and other contaminants that exceeded máximums set by the New York State Department of Environmental Conservation (“DEC”), the company entered into a Brownfield Site
In October 2007, pursuant to its cleanup obligations under the Agreement, Noram-pac contracted with AAA Environmental, Inc., a contractor located in upstate New York, to perform remedial work, including the excavation and removal of contaminated soil. The contract required that No-rampac make “progress payments” to AAA Environmental at regular intervals based on the amount of work completed. The agreement between Norampac and AAA Environmental required the contractor to furnish performance and payment bonds in amounts equal to the total contract price, but these requirements were waived in a contract addendum.
In December 2007, AAA Environmental subcontracted with Price Trucking to transport from the site and dispose of the contaminated soil. Throughout the following year, Price Trucking hauled the soil to licensed disposal facilities.
AAA Environmental initially paid Price for this service, but on or about October 6, 2008, the payments stopped. Once AAA Environmental refused to pay outstanding invoices, Price Trucking stopped working on the project, insisting that Norampac first agree to pay Price Trucking directly for its portion of all subsequent services performed. Norampac agreed to this ar
As of September 19, 2008, the parties had substantially finished work on the site, and the DEC subsequently certified completion. By that time, Norampac had paid AAA Environmental more than $3 million for services related to the cleanup effort, in addition to the payments that Norampac had made directly to Price Trucking pursuant to the arrangement noted above. But Price was unable to recover the balance of the payments due to it from AAA Environmental. Other subcontractors who worked on the site also complained that they had not been paid in full. The parties agree that Price completed its work in compliance with the Agreement, the contract between Norampac and AAA, the subcontract between AAA and Price, and all applicable laws and regulations, and that Price received no objections from AAA Environmental, Norampac, or the DEC regarding its work.
On November 16, 2009, Price Trucking instituted this lawsuit against Norampac in the United States District Court for the Western District of New York, seeking $780,204.08 in unpaid bills for its work regarding the site. Price’s sole theory of recovery in this action was premised on CERCLA’s liability provision, codified at 42 U.S.C. § 9607, the relevant provisions of which are discussed below.
On March 31, 2010, Price moved for partial summary judgment against Noram-pac on the issue of liability. Norampac cross-moved for summary judgment and an order dismissing the lawsuit. On June 17, 2010, Magistrate Judge Hugh B. Scott recommended that the district court rule in favor of Price Trucking on both motions. Price Trucking Corp. v. Norampac Indus., Inc., No. 09-cv-990A,
Instead of litigating the issue of damages, the parties stipulated that if there were liability, the damages were equal to the outstanding sum owed to Price Trucking: $631,257.02, plus interest. This amount is less than that stated in the complaint, reflecting, among other things, amounts recovered by Price Trucking in one of two related state court lawsuits, although the suits were pending at the time this appeal was brought.
In the first such state-court action, Price Trucking sought to foreclose on a mechanic’s lien imposed on Norampac’s real property. See Second Am. Verified Compl. & Supplemental Summons, ¶¶ 27-35, Price Trucking Corp. v. Norampac Indus., Inc., No. 001547/2009 (N.Y.Sup.Ct. Erie Cnty. Nov. 12, 2009) (now consolidated in Case No. 000116/2009). In the same action, Price Trucking brought claims against AAA Environmental and its owner on theories of, inter alia, breach of contract, quantum meruit, unjust enrichment, and breach of trust. Id. ¶¶ 36-72. It appears that Price Trucking has so far been unable to recover from AAA directly; Norampac has asserted that AAA is out of business. But Price Trucking did recover $131,576.27 plus interest from Norampac on its lien-foreclosure claim.
In light of the pendency of the state proceedings, the parties prepared a consent order setting out the amount that would be the subject of this appeal and providing that any additional amounts recovered in state court would further reduce the amount of the federal claim. The district court adopted this order, and, on June 24, 2011, entered final judgment in favor of Price Trucking.
Norampac appeals.
DISCUSSION
The sole question presented by this appeal is whether CERCLA creates direct liability between owners and subcontractors with respect to cleanup on a CERC-LA site when the owner has paid a general contractor in full for the subcontractor’s work. The district court concluded that CERCLA does impose such liability. For the reasons stated below, we disagree.
“We review a district court’s decision grant of summary judgment de novo, viewing the evidence in the light most favorable to the non-moving party and drawing all inferences and resolving all ambiguities in its favor.” CILP Assocs., L.P. v. PriceWaterhouse Coopers LLP,
I. CERCLA
CERCLA’s “primary purposes are axiomatic: (1) to encourage the timely cleanup of hazardous waste sites; and (2) to place the cost of that cleanup on those responsible for creating or maintaining the hazardous condition.” W.R. Grace & Co-Conn. v. Zotos Int’l, Inc.,
CERCLA imposes liability for response costs incurred both by the government and by private parties. 42 U.S.C. § 9607(a)(4)(A)-(B); Marsh,
To make out a prima facie case for liability under the Act, a plaintiff must establish that: (1) the defendant is an “owner” or is otherwise liable under 42 U.S.C. § 9607(a)(l)-(4); (2) the site is a “facility” as defined by 42 U.S.C. § 9601(9); (3) there has been a release or threatened release of hazardous substances at the facility; (4) the plaintiff incurred costs responding to the release or the threat; and (5) the costs and response conform to the National Contingency Plan. Prisco v. A & D Carting Corp.,
The parties have stipulated for the purposes of this litigation that Norampac owned the site at issue, that the site was a “facility” within the meaning of the statute, and that there were releases or threatened releases of hazardous substances at the site. We also assume without deciding that Price Trucking’s actions were consistent with the National Contingency Plan.
There is no serious question as to whether the cost of removing contaminated soil constituted “response costs” within the meaning of CERCLA.
The parties phrase their arguments in terms of whether the payments demanded by Price from Norampac constitute “necessary costs of response.” But, in simple terms, the issue in this case is not whether CERCLA requires Norampac to pay for the cleanup. The sole question is whether — under the circumstances presented here — CERCLA also requires Norampac to ensure that Price is made whole for its work.
II. Analysis
A. Text ofí2 U.S.C. § 9607(a)
Although CERCLA defines “response” to encompass a range of activities, it does not define the term “response costs.” See 42 U.S.C. § 9601(23) — (25); Gussaek Realty Co. v. Xerox Corp.,
The statute provides that the term “ ‘liability’ ... shall be construed to be the standard of liability which obtains under section 311 of the Federal Water Pollution Control Act.” 42 U.S.C. § 9601(32). But this cross-reference has been read, correctly we think, to mean “no more than that CERCLA, like the FWPCA, is a strict liability statute.” Town of Munster, Ind. v. Sherwin-Williams Co.
Even bearing in mind that “response costs are liberally construed under CERC-LA,” W.R. Grace,
B. Purpose of the Liability Provision
“Congress passes legislation with specific purposes in mind. When the ordinary tools of statutory construction permit us to do so, we must attempt to discover those purposes from the text, structure and history of the acts in question.” N.Y.C. Health & Hosps. Corp. v. Perales,
CERCLA accomplishes that purpose in two relevant ways. First, it imposes liability on a range of persons, including not only the property owner who might have been responsible for environmental damage, but other owners, operators, arrangers, or transporters. 42 U.S.C. § 9607(a)(l)-(4); B.F. Goodrich Co.,
By clearing the path to liability of any obstacles or inconsistencies imposed by varying state laws, CERCLA “eneour-age[s] private parties to assume the financial responsibility of cleanup by allowing them to seek recovery from others.” Key Tronic Corp. v. United States,
And if the responsibility-assigning function of CERCLA will facilitate cost recovery by private parties in most cases, it need not and does not do so in every case. In the typical private cost-recovery action, an injured landowner undertakes a cleanup effort and then brings suit against a responsible facility owner or operator under CERCLA. By holding the defendant liable in such a case, CERCLA ensures that defendant owners and operators “bear the cost of their actions.” Schiavone,
CERCLA’s purposes are served when landowners and others who profit from hazardous activities are made to bear the costs of accidents on their land. See, e.g., Commander Oil Corp. v. Barlo Equip. Corp.,
We note, finally, that state law provides a well-developed, if not necessarily effective, system for resolving disputes like this one. “It is well settled that a subcontractor may not assert a cause of action to recover damages for. breach of contract against a party with whom it is not in privity.” Perma Pave Contracting Corp. v. Paerdegat Boat & Racquet Club, Inc.,
In light of our conclusion that CERCLA does not expressly create the liability that the plaintiff seeks to impose, we have no reason to suppose, that Congress meant to upend by inference the longstanding principles of common law that bar direct recovery for breach of contract against a party not in privity with the claimant. See Isbrandtsen Co. v. Johnson,
Here, Price Trucking has pursued its remedies under state law with some, albeit limited, success. Norampac has not disputed Price’s right, as a subcontractor, to recover unpaid bills by placing a mechanic’s lien directly on Norampac’s property, at least insofar as payments from Noram-pac to AAA Environmental remain outstanding. Indeed, as already noted, Price was able to recover more than $130,000
Although CERCLA’s liability provision may have been designed to impose a uniform standard of strict liability for specified costs, neither its terms nor the legislative history contain a comparable suggestion that the statute is meant to provide a substitution for the usual manner in which contractors and subcontractors are paid. The statute’s drafters were doubtless aware that CERCLA responses would be carried out through public and private contracts. See, e.g., 42 U.S.C. § 9619(e)(1) — (2); 40 C.F.R. § 300.400(d)(3). CERCLA contains specific provisions for hens in favor of the United States government for unpaid response costs, 42 U.S.C. § 9607(i), and provisions relating to surety bonds in public contracts, 42 U.S.C. § 9619(g). In light of the explicit instructions contained in these provisions regarding public contracts, it seems to us unlikely that the legislators would have displaced only implicitly the existing state law rules regarding contractors and subcontractors working for private parties.
Norampac urges us to go further, and to find that CERCLA does not permit cost-recovery actions by private contractors and subcontractors.
* * *
The purpose of CERCLA’s liability provisions is to ensure that actors responsible for creating or maintaining hazardous environmental conditions bear the costs of their actions. In this case, that purpose was served when Norampac accepted responsibility for cleaning the Erie County site, ensured that the cleanup was completed as planned, and made payments under its contract with AAA Environmental for the removal of contaminated soil. To the extent that Norampac paid for Price Trucking’s activities either through direct payments or through payments to its general contractor, it satisfied its responsibility to bear response costs under
CONCLUSION
For the foregoing reasons, we REVERSE the judgment of the district court, and we REMAND the case with instructions to deny the plaintiffs motion for summary judgment and to grant summary judgment in favor of the defendant.
Notes
. The New York Environmental Conservation Law, pursuant to which this agreement was entered into, defines a "Brownfield site” as "any real property, the redevelopment or reuse of which may be complicated by the presence or potential presence of a contaminant.” N.Y. Envtl. Conserv. Law § 27-1405(2); see also 42 U.S.C. § 9601(39)(A) (setting out a similar definition under CERC-LA).
. Pursuant to the general contract, Norampac withheld five percent of each progress payment, pending completion of the entire project (the "Retention”). In the state court proceedings, Norampac acknowledged that it had retained nearly $200,000 in this manner,
. The National Contingency Plan "providefs] the organizational structure and procedures for preparing for and responding to discharges of oil and releases of hazardous substances, pollutants, and contaminants,” and is promulgated by the Environmental Protection Agency. National Contingency Plan, 40 C.F.R. §§ 300.1-2.
. The parties agree that the cleanup was conducted in compliance with all applicable regulations, which would include the National Contingency Plan. Norampac nonetheless argued before the magistrate judge that Price Trucking's costs were not within the plan, because only Norampac, and not its contractors, could be considered a responder within the meaning of the plan. Price Trucking,
. Under CERCLA, “response” refers to any removal or remedial action. 42 U.S.C. § 9601(25). The term "remedial action,” in turn, "includes offsite transport and offsite storage, treatment, destruction, or secure disposition of hazardous substances and associ
. If Price Trucking had stated a prima facie case for recovery of necessary costs, then we would have to ask whether Norampac could nonetheless escape liability by invoking a statutory or extra-statutory defense. Because we answer the threshold question in the negative, we need not reach the issue of defenses.
. As we have observed, "CERCLA was hastily enacted and was a combination of three other toxic waste and oil spill cleanup bills that had not passed.” Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc.,
. In this respect, we have previously noted that CERCLA’s cost-recovery function is not absolute. The statute does not "automatically assign liability to every party with any connection to a contaminated facility," Commander Oil Corp. v. Bario Equip. Corp.,
. This conclusion is consistent with the statutory language, which makes clear that the persons in 42 U.S.C. § 9607(a)(l)-(4)—as distinguished from victims, third parties, and the government—"shall be liable for” response costs. 42 U.S.C. § 9607(a)(4). It does not state that a landowner “shall be liable to” every contractor, subcontractor, employee, and material supplier who assists in the response. Cf. Key Tronic,
. Other jurisdictions may permit greater recovery by unpaid subcontractors. See generally 53 Am.Jur.2d Mechanics’ Liens § 9 (distinguishing the "New York system" from the "Pennsylvania system,” which may permit liens for the fulL amount of the subcontract, regardless of the balance due to the general contractor).
. In Marsh, we were asked to craft a rule of federal common law under CERCLA that would have displaced Delaware law regarding actions against dissolved corporations. Marsh,
. Norampac argues that Price Trucking's actions were a "response" only to its subcontract with AAA Environmental, and not directly to the discovery of contaminated soil at the site. This argument would have the practical effect of foreclosing contractors’ recourse to CERCLA's cost-recovery provisions, insofar as a contractor's only involvement with the site is as a participant in the response effort.
. Insurance is apparently widely available in the form of a payment bond, which guarantees payment to subcontractors. See generally H. Bruce Shreves, Payment Bonds, in Construction Law Handbook § 36.09 (Robert F. Cushman & James J. Myers eds. 1999) (describing a payment bond as "often the last, best hope of recovery where the claimant does not receive payment due to contractor insolvency”). The form contract between AAA Environmental and Norampac provided for a payment bond. Remediation of Contaminated Materials Contract, Standard General Conditions, § 5.01, at J.A. 213. That requirement was waived. See Addendum No. 1 to Remediation of Contaminated Materials Contract, § 3, at J.A. 253. Although Price Trucking was not a party to the contract in which the bond requirement was waived, it presumably could have demanded a payment bond as a condition of its agreement to the subcontract. We suspect that maintaining the bond requirement would have, in this case, avoided years of litigation.