Calm waters after Guam v. United States?

The U.S. Supreme Court holds that resolving liability under CERCLA means exactly that, and nothing more

On May 24, 2021, the U.S. Supreme Court issued its unanimous decision in Guam v. United States, 141 S. Ct. 1608 (2021), yet another key case in a line of decisions interpreting the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and, in particular, the interplay between section 107(a) and section 113(f)(3). The Court cleared up some of the murkiness between the two types of claims, holding that consent decrees and administrative orders between the United States and potentially responsible parties (PRPs) that do not expressly resolve liability CERCLA liability do not give rise to a contribution claim under section 113(f)(3). As a result, actions to recover amounts spent for expensive remediations under non-CERCLA settlements are no longer subject to a short three-year statute of limitations but instead can now take advantage of the much longer timeframes for cost recovery claims under section 107(a).

Sections 107(a) and 113(f)(3) of CERCLA

CERCLA, commonly known as Superfund, provides for the cleanup of hazardous waste sites, known as Superfund sites, and creates broad categories of parties potentially liable for a release or threatened release covered by CERCLA—PRPs. Generally, for any specific response action at a Superfund site, a party who has incurred costs responding to contamination will have a claim under either section 107(a) or section 113(f)(3), but not both. Under section 107(a), a party who voluntarily incurs costs to remediate a contaminated site may recover all its costs from other PRPs who are jointly and severally responsible for the contamination. Under section 113(f)(3)(B), in contrast, a party who has resolved its liability to the United States or a state may seek  contribution from other PRPs only to the extent of that PRP’s individual liability.

The distinctions between the two claims can be significant. Liability under section 107(a) is almost always joint and several, whereas under section 113(f)(3), a party may recover from a particular PRP only that PRP’s share of liability. The burden of proof is lower for a section 107(a) claim than a section 113(f)(3) claim. And most importantly, section 107(a) claims must be brought within three years of completion of a removal action or six years after initiation of construction of a remedial action, whereas section 113(g)(3) actions must be brought within three years of the date of the judgment or settlement. In the world of Superfund response actions, that difference could mean a statute of limitations a decade or more longer for a section 107(a) claim (but much shorter for a section 113(f)(3) claim).

The decision in Guam

The case before the Supreme Court involved a consent decree entered into in 2004 between Guam and the United States to resolve claims under the Clean Water Act with respect to discharges from the Ordot Dump, which the U.S. Navy has used to dispose of military wastes. In 2017, Guam brought suit against the Navy to recover its removal and remediation costs under CERCLA, and the Navy moved to dismiss, arguing that the 2004 consent decree was a settlement that triggered Guam’s contribution claim and, therefore, that it was time-barred.

The U.S. Court of Appeals for the District of Columbia Circuit, following the majority of circuits, agreed with the Navy. It held that section 113(f)(3) does not require resolution of CERCLA liability specifically, but, instead, simply requires that a settlement require the party to engage in removal or remediation that would be considered a response action under CERCLA. As a result, the district court dismissed Guam’s case.

The Supreme Court reversed and remanded. Acknowledging that, “[r]ather than requiring parties and courts to estimate whether a prior settlement was close enough to CERCLA, the far simpler approach is to ask whether a settlement expressly discharged a CERCLA liability.” Thus, the Court held that “[t]he most natural reading of § 113(f)(3)(B) is that a party may seek contribution under CERCLA only after settling a CERCLA-specific liability.” Thus, Guam’s action against the Navy was resuscitated.

The ripple effects of Guam

After Guam, one might have expected a spate of dismissal and summary judgment motions seeking to narrow pending litigation or a wave of new claims from performing PRPs who previously thought their claims were long dead. Seven months after the decision, that level of activity has failed to materialize. The parties in Atlantic Richfield Co. v. ASARCO, LLC, No. 20-1142 (S. Ct. 2020), promptly and jointly moved to dismiss the pending petition for writ of certiorari on the basis that Guam resolved the appeal, and, since then, there has been a dearth of sightings. Although 60 secondary sources refer to the opinion, there are only five decisions citing to it. Of those, only two address the substance of the decision, and only one, WASCO LLC v. Northrop Grumman Corp., No. 1:20-CV-00227-MR, 2021 WL 4509176 (W.D.N.C. Sept. 30, 2021), applies the holding in Guam to dismiss a pending section 113(f)(3) claim. Of course, the Guam opinion is still fresh; most certainly, opinions will eventually bubble up to the surface as more litigants urge trial and appellate courts to apply Guam the matters before them. Nevertheless, it would appear that the Supreme Court has succeeded, at least for now, in its objective of clarifying how courts should apply the statute of limitations in contribution cases.