CALLAHAN, Circuit Judge:
Section 113(f)(3)(B) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA") allows persons who have taken actions to clean up hazardous waste sites to seek monetary contribution from other parties who are also responsible for the contamination. 42 U.S.C. § 9613(f)(3)(B). The provision provides that a person that has "resolved its liability" for "some or all of a response action or for some or all of the costs of such action" pursuant to a settlement agreement with the government "may seek contribution from any person who is not party to a settlement." Id. In other words, "a [potentially responsible party] that pays money to satisfy a settlement agreement ... may pursue § 113(f) contribution." United States v. Atl. Research Corp., 551 U.S. 128, 139, 127 S.Ct. 2331, 168 L.Ed.2d 28 (2007). CERCLA imposes a three-year statute of limitations after entry of a judicially approved settlement, during which a party may bring a contribution action. 42 U.S.C. § 9613(g)(3).
This case presents three issues of first impression in our circuit. First, we must decide whether a settlement agreement entered into under an authority other than CERCLA may give rise to a CERCLA contribution action. Second, we must decide whether a "corrective measure" under a different environmental statute, the Resource Conservation and Recovery Act ("RCRA"), qualifies as a "response" action under CERCLA. And third, we must decide what it means for a party to "resolve[ ] its liability" in a settlement agreement — a prerequisite to bringing a § 113(f)(3)(B) contribution action. Our answers to these legal questions guide our inquiry into whether a 1998 settlement agreement under RCRA (the "1998 RCRA Decree") between Appellant Asarco LLC ("Asarco") and the United States, which was approved and entered by a federal district court, triggered the three-year statute of limitations for Asarco to bring a § 113(f)(3)(B) contribution action.
In this contribution action against Appellee Atlantic Richfield Company ("Atlantic Richfield"), the district court answered the first two questions in the affirmative but did not address the third. On Atlantic Richfield's motion for summary judgment, the district court concluded that Asarco's action accrued with entry of the 1998 RCRA Decree. Because Asarco brought its action in 2012 — well beyond the three-year statute of limitations under CERCLA — the district court determined that its claim was time-barred.
We agree with the district court on the first two issues but, as to the third, conclude that Asarco did not "resolve[ ] its liability" under the 1998 RCRA Decree. Asarco therefore could not have brought its contribution action in 1998, and the statute of limitations did not begin to run with entry of the 1998 RCRA Decree. By contrast, a later, 2009 agreement, on which Asarco bases its present contribution action, did resolve Asarco's liability. And because Asarco filed that action within the
The East Helena Superfund Site (the "Site") is located in and around an industrial area in Lewis and Clark County, Montana. The Site includes the City of East Helena, Asarco's former lead smelter, and a nearby zinc fuming plant that was operated by Atlantic Richfield's predecessor, Anaconda Mining Company ("Anaconda"), and later by Asarco.
The Site has been a locus of industrial production for more than a century, resulting in decades of hazardous waste releases. The lead smelter, which Asarco operated from 1888 until 2001, discharged toxic compounds into the air, soil, and water, such as lead, arsenic, and other heavy metals. Asarco alleges that the zinc fuming plant, which Anaconda operated from 1927 to 1972, also contributed to the contamination. Asarco purchased the zinc fuming plant in 1972 and apparently ceased operations in 1982.
In the late 1980s, EPA identified Asarco and Anaconda as potentially responsible parties ("PRPs") under CERCLA, meaning — in CERCLA vernacular — that they bore at least some responsibility for the contamination. See 42 U.S.C. § 9607(a). EPA sought remedial action only from Asarco, which resulted in three CERCLA settlements between Asarco and the United States in the late 1980s and early 1990s. Those early settlements are not at issue in this litigation.
In 1998, the United States brought claims against Asarco for civil penalties and injunctive relief under RCRA and the Clean Water Act ("CWA"). The complaint alleged that Asarco had illegally disposed of hazardous waste at the Site, and sought an order requiring Asarco to, inter alia, "conduct corrective action pursuant to Section 3008(h) of RCRA, 42 U.S.C. § 6928(h)...." A "corrective action" under RCRA is a type of "response measure" necessary to protect human health or the environment, see 42 U.S.C. § 6928(h), and is "designed to clean up contamination," J. Stanton Curry, James J. Hamula, Todd W. Rallison, The Tug-of-War Between RCRA and CERCLA at Contaminated Hazardous Waste Facilities, 23 Ariz. St. L.J. 359, 369 (1991).
Asarco settled the case with the United States. The settlement agreement was approved by the federal district court in Montana, and entered on the court's docket as a consent decree. The 1998 RCRA Decree assessed civil penalties against Asarco and also required Asarco to take certain remedial actions to address past violations. Those actions included "[c]orrective [m]easures" to, inter alia, "remediate, control, prevent, or mitigate the release, potential release or movement of hazardous waste or hazardous constituents into the environment or within or from one media to another."
Despite the 1998 RCRA Decree's lofty goals, Asarco failed to meet its cleanup obligations. Further complicating matters, in 2005 Asarco filed for Chapter 11 bankruptcy
On June 5, 2012, Asarco brought an action against Atlantic Richfield under CERCLA § 113(f)(3)(B), seeking contribution for its financial liability under the CERCLA Decree. Atlantic Richfield filed a motion for summary judgment, arguing that Asarco's action was untimely because the three-year statute of limitations under § 113 began running with the 1998 RCRA Decree. Asarco countered that "RCRA, a statute that does not authorize contribution claims, [cannot] trigger the limitations period under another law, CERCLA." Asarco also argued that the CERCLA Decree created "new" and "different" work obligations from the 1998 RCRA Decree, thereby triggering a new statute of limitations period for at least the costs associated with those new obligations.
The district court granted summary judgment for Atlantic Richfield and dismissed the case. It concluded that the plain language of CERCLA § 113(f)(3)(B) requires only that a settlement agreement address a "response action," not that it be entered into under CERCLA. The court also determined that Asarco had incurred response costs under the 1998 RCRA Decree, and therefore held that the 1998 RCRA Decree provided the necessary predicate for a CERCLA contribution action. Finally, the court rejected Asarco's argument that the CERCLA Decree contained matters not addressed by the 1998 RCRA Decree. Accordingly, it held that the CERCLA Decree did not reset the statute of limitations for any response costs incurred under that agreement, and deemed Asarco's claim for contribution untimely. Asarco appealed.
Congress enacted CERCLA in 1980 with two goals in mind: (i) to encourage the "`expeditious and efficient cleanup of hazardous waste sites,'" and (ii) to ensure that those responsible for hazardous waste contamination pay for the cleanup. Carson Harbor Vill., Ltd. v. Unocal Corp., 270 F.3d 863, 880 (9th Cir. 2001) (en banc) (quoting Pritikin v. Dep't of Energy, 254 F.3d 791, 795 (9th Cir. 2001)); see S. Rep. No. 96-848, at 13 (1980). Hazardous waste sites — also known as Superfund sites — contain toxic substances often deposited by multiple entities. See 42 U.S.C. § 9607(a)(1)-(4). In order to spread responsibility among those entities, Congress included a provision in CERCLA providing for reimbursement of costs incurred by the government or a liable PRP. Section 107(a) provides a cause of action for a "cost recovery" claim against PRPs for a wide range of expenses, including "`any ... necessary costs of response incurred'" that result from a release of a hazardous substance. Whittaker Corp. v. United States, 825 F.3d 1002, 1006 (9th Cir. 2016) (quoting 42 U.S.C. § 9607(a)).
"Response" is a term of art under CERCLA and means "remove, removal, remedy, and remedial action." 42 U.S.C. § 9601(25). Congress even gave those defining terms their own definitions. A "removal" means, inter alia, "the cleanup or
Section 107(a) is limited to recovery of response costs the suing PRP itself directly incurred. See Atl. Research, 551 U.S. at 139, 127 S.Ct. 2331 ("[Section] 107(a) permits recovery of cleanup costs but does not create a right to contribution."). At the time of enactment, CERCLA included no express right to contribution for a PRP that did not itself incur response costs, but that reimbursed another party that did incur response costs. See Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157, 162, 125 S.Ct. 577, 160 L.Ed.2d 548 (2004). Such a situation arises under two circumstances: (i) where the PRP is the defendant in a CERCLA § 106 or § 107(a) action and a money judgment issues against it; or, as with the CERCLA Decree in the matter before us, (ii) where the PRP pays the United States' or a State's response costs pursuant to a settlement agreement. See id. at 160-61, 125 S.Ct. 577; Atl. Research, 551 U.S. at 138-39, 127 S.Ct. 2331; Whittaker, 825 F.3d at 1006-07.
Congress added an express right to contribution with the Superfund Amendments and Reauthorization Act of 1986 ("1986 CERCLA Amendments"), Pub. L. No. 99-499, to address these two circumstances. See Atl. Research, 551 U.S. at 132, 127 S.Ct. 2331. Section 113(f)(1) captures the first, and provides that "[a]ny person may seek contribution from any other person who is liable or potentially liable under [§ 107(a)] of this title, during or following any civil action ... under [§ 106 or § 107(a)] of this title." 42 U.S.C. § 9613(f)(1). Section 113(f)(1) is not at issue in the instant matter, but, as discussed infra in Part IV.A, it is relevant to resolving the first issue we must decide: whether the 1998 RCRA Decree may give rise to a CERCLA contribution action. Section 113(f)(3)(B), which is directly at issue, captures the second scenario, and provides that
Id. § 9613(f)(3)(B). In other words, "a PRP that pays money to satisfy a settlement agreement or a court judgment may pursue § 113(f) contribution." Atl. Research, 551 U.S. at 139, 127 S.Ct. 2331; see Cooper, 543 U.S. at 163, 167, 125 S.Ct. 577 (recognizing that § 113(f)(1) and § 113(f)(3)(B) set forth separate rights of contribution).
While § 107(a) cost recovery actions and § 113(f) contribution actions offer "complementary yet distinct" remedies, there is overlap between them. Atl. Research,
Sections 107(a) and 113(f) have different statutes of limitations periods. An action for "recovery of ... costs" under § 107(a) "must be commenced ... within 6 years after initiation of physical on-site construction of the remedial action" or "within 3 years after the completion of the removal action." 42 U.S.C. § 9613(g)(2)(A), (B). An action for contribution of "response costs or damages" under § 113(f), by contrast, "may be commenced" no more than "3 years after ... the date of ... entry of a judicially approved settlement with respect to such costs or damages." Id. § 9613(g)(3)(B).
Asarco's action is untimely if it could have brought a contribution action after judicial approval and entry of the 1998 RCRA Decree. Such would be the case if three conditions are met: (i) a non-CERCLA authority may give rise to a CERCLA contribution action, (ii) Asarco took a response action or incurred response costs under the 1998 RCRA Decree, and (iii) the 1998 RCRA Decree resolved Asarco's liability for at least some of those response actions or costs. The district court analyzed the first two conditions but not the third. We evaluate all three issues.
Our review of the district court's grant of summary judgment is de novo, as is our review of the court's determination that Asarco's contribution claim under the CERCLA Decree is barred by the statute of limitations. Hernandez v. Spacelabs Med. Inc., 343 F.3d 1107, 1112 (9th Cir. 2003). Our review of the district court's interpretation of the RCRA and CERCLA Decrees is also de novo, except that we defer to any factual findings unless they are clearly erroneous. City of Emeryville v. Robinson, 621 F.3d 1251, 1261 (9th Cir. 2010).
We begin by considering whether § 113(f)(3)(B) applies to non-CERCLA settlement agreements. "As in any case of statutory construction our analysis begins with the language of the statute." Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 438, 119 S.Ct. 755, 142 L.Ed.2d 881 (1999) (internal quotation marks omitted). But it does not end there. We must heed the "fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme." FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000) (internal quotation marks omitted). "A statutory provision that may seem ambiguous in isolation is often clarified by the remainder of the statutory scheme ... because only one of the permissible meanings produces a substantive effect that is compatible with the rest of the law." Util. Air Regulatory Grp. v. EPA, ___ U.S. ___, 134 S.Ct. 2427, 2442, 189 L.Ed.2d 372 (2014) (alteration in original and internal quotation marks omitted).
The plain text of § 113(f)(3)(B) is unilluminating. A "response" action is a defined term under CERCLA, but it is unclear from the text of § 113(f)(3)(B) whether it is a CERCLA-exclusive term. See 42 U.S.C. § 9601(25). In the same vein, § 113(f)(3)(B) requires a PRP to enter into a settlement agreement that is "administrative[ly] or judicially approved," but the text says nothing about whether the agreement must settle CERCLA claims in particular. See id. § 9613(f)(3)(B).
Expanding our analysis to the broader context of the statute, we consider § 113(f)(3)(B)'s companion provision, § 113(f)(1). That section expressly requires a CERCLA predicate by providing that "[a]ny person may seek contribution from any other person who is liable or potentially liable under [§ 107(a)] of this title, during or following any civil action under [§ 106] of this title or under [§ 107(a)] of this title." Id. § 9613(f)(1) (emphasis added). "Where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress
Our understanding of § 113(f)(3)(B) is consistent with CERCLA's broad remedial purpose. "In ascertaining the meaning of an ambiguous [statutory] term, we may use canons of statutory construction, legislative history, and the statute's overall purpose to illuminate Congress's intent." Probert v. Family Centered Servs. of Alaska, Inc., 651 F.3d 1007, 1011 (9th Cir. 2011) (internal quotation marks omitted). With the 1986 CERCLA Amendments, Congress sought to get parties to the negotiating table early to allocate responsibility for cleaning up contaminated sites. H.R. Rep. No. 99-253, pt. 1, at 80. Granting a settling party a right to contribution from non-settling PRPs provides a strong incentive to settle and initiate cleanup. Congress gave no indication that it matters whether the authority governing the settlement is CERCLA or something else. Its focus was, instead, on cleaning up hazardous waste sites. An interpretation that limits the contribution right under § 113(f)(3)(B) to CERCLA settlements would undercut private parties' incentive to settle (except, of course, where the agreement was entered into under CERCLA), thereby thwarting Congress' objective and doing so without reaping any perceptible benefit.
Our interpretation also aligns with EPA's own view. In Niagara Mohawk Power Corp. v. Chevron, U.S.A., Inc., 596 F.3d 112 (2d Cir. 2010), EPA argued that "`settlement of federal and state law claims other than those provided by CERCLA fits within § 113(f)(3)(B) as long as the settlement involves a cleanup activity that qualifies as a "response action" within the meaning of CERCLA § 101(25), 42 U.S.C. § 9601(25).'" Id. at 126 n.15 (quoting Brief for the United States as Amicus Curiae Supporting Appellant at 15). "[EPA's] views, as expressed in [its amicus] brief, are persuasive because [its] reasoning is consistent with the statutory language," statutory context, and CERCLA's overall structure and purpose. See Van Asdale v. Int'l Game Tech., 763 F.3d 1089, 1093 (9th Cir. 2014) (deferring to the Secretary of Labor's amicus brief). Its interpretation therefore merits some deference. See Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 S.Ct. 124 (1944) (deference to an agency's interpretation depends on "the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all [other] factors which give it power to persuade"); see also Fed. Exp. Corp. v. Holowecki, 552 U.S. 389, 401-02, 128 S.Ct. 1147, 170 L.Ed.2d 10 (2008) (according an agency's non-binding interpretation Skidmore deference where the interpretation was "consistent with the statutory framework" and the statute was susceptible to "[n]o clearer alternatives").
Whether a non-CERLCA settlement agreement may give rise to a contribution action has split the circuits. In Trinity Industries, Inc. v. Chicago Bridge & Iron Co., 735 F.3d 131 (3d Cir. 2013), the Third Circuit arrived at the conclusion we adopt here in evaluating a settlement agreement entered into under state law, reasoning that "Section 113(f)(3)(B) does not state that the `response action' in question must have been initiated pursuant to CERCLA." Id. at 136. Trinity relied on that court's prior holding in United States v.
Id. at 1275.
The Second Circuit has gone the other way. In Consolidated Edison Co. of N.Y., Inc. v. UGI Utilities, Inc., 423 F.3d 90, 95 (2d Cir. 2005), the court held that § 113(f)(3)(B) creates a "contribution right only when liability for CERCLA claims... is resolved." That case, like Trinity, involved a party's § 113(f)(3)(B) contribution action to recoup costs spent pursuant to a settlement agreement under state law. Id. at 96. But unlike Trinity, the Second Circuit read the term "response action" to be a "CERCLA-specific term," and relied on a House of Representatives Committee report for the 1986 CERCLA Amendments creating § 113. Id. at 95-96. That report states that § 113 "`clarifies and confirms the right of a person held jointly and severally liable under CERCLA to seek contribution from other potentially liable parties.'" Id. (quoting H.R. Rep. No. 99-253, pt. 1, at 79) (emphasis in opinion).
The Second Circuit's approach is not persuasive and may be shifting. First, the court misreads the pertinent legislative history. Consolidated Edison relied on a portion of the House report that is specific to § 113(f)(1) for the proposition that Congress intended to require a CERCLA predicate under § 113(f)(3)(B). See 423 F.3d at 96; H.R. Rep. No. 99-253, pt. 1, at 79. But, as previously noted, those two provisions diverge in a crucial way: § 113(f)(1) expressly requires that a party first be sued under CERCLA before bringing a contribution action, whereas § 113(f)(3)(B) makes no reference to CERCLA at all. Second, in a subsequent case, Niagara Mohawk, the Second Circuit indicated agreement with EPA's position that a CERCLA-specific settlement agreement is not necessary to maintain a § 113(f)(3)(B) contribution action. 596 F.3d at 126 n.15. While the court addressed a distinct issue, and so did not have an opportunity to revisit its holding in Consolidated Edison, it commented that EPA "understandably takes issue with our holding in Consolidated Edison." Id.
We agree with the Third Circuit. Consideration of CERCLA's statutory context, structure, and broad remedial purpose, combined with EPA's reasonable interpretation, lead us to the inexorable conclusion that Congress did not intend to limit § 113(f)(3)(B) to response actions and costs incurred under CERCLA settlements. We therefore hold that a non-CERLCA
The second condition necessary for the 1998 RCRA Decree to have triggered Asarco's ability to bring a § 113(f)(3)(B) contribution action is that the agreement required Asarco to take response actions or incur response costs. Asarco suggests that the 1998 RCRA Decree did not actually require any response actions, but was instead focused on assessing penalties for RCRA violations, such as noncompliance with RCRA's land disposal restrictions. Asarco argues that the agreement "at best" only resolved "Asarco's liability for civil penalties stemming from alleged operating violations." The district court barely acknowledged this issue.
Asarco dramatically understates the scope of its obligations under the Decree. The agreement clearly required Asarco to take response actions to clean up hazardous waste at the Site. Specifically, the 1998 RCRA Decree obligated Asarco to:
The agreement's requirement that Asarco take various "corrective measures" is particularly noteworthy because RCRA expressly defines "corrective action" as a type of "response" action: Under RCRA, EPA "may issue an order requiring corrective action or such other response measure as [it] deems necessary to protect human health or the environment."
The third condition necessary for the 1998 RCRA Decree to have triggered Asarco's ability to bring a § 113(f)(3)(B) contribution action is that the agreement "resolved its liability to the United States or [Montana] for some or all of" its response action or the "costs of such action" in the 1998 RCRA Decree. See 42 U.S.C. § 9613(f)(3)(B). Asarco argues that it did not, and therefore the statute of limitations to bring the instant action did not expire three years later, in 2001.
Atlantic Richfield contends that Asarco waived this argument by not raising it in the district court, and that we should therefore not consider it. Atlantic Richfield is correct that Asarco failed to raise this precise issue below. Waiver, however, is not an absolute bar to our consideration of arguments on appeal. See In re Mercury Interactive Corp. Sec. Litig., 618 F.3d 988, 992 (9th Cir. 2010). We may reach an otherwise waived issue in three circumstances: (i) to prevent a miscarriage of justice or preserve the integrity of the judicial process, (ii) when a new issue arises on appeal because of a change in the law, and (iii) "`when the issue presented is purely one of law and either does not depend on the factual record developed below, or the pertinent record has been fully developed.'" Id. (quoting Bolker v. Comm'r, 760 F.2d 1039, 1042 (9th Cir. 1985)).
Determining whether Asarco "resolved its liability" under the 1998 RCRA Decree falls into the first and third categories. If Asarco did not, as it contends, resolve its liability under the 1998 RCRA Decree, then justice would not be served by upholding the district court's decision. The correct interpretation of the phrase "resolved its liability" is also a pure question of law. While deciding whether Asarco "resolved its liability" requires application of the law to the particular terms of the 1998 RCRA Decree, those terms are not in dispute and the record requires no further development. Moreover, deciding this issue will bring certainty to the state of the law in the Ninth Circuit and thereby "`preserve the integrity of the judicial process.'" Id. We therefore proceed to the merits.
As we did in Part IV.A, supra, we begin our analysis with the plain text of the statute. Hughes, 525 U.S. at 438, 119 S.Ct. 755. Where Congress has not defined specific statutory terms, we look to their ordinary meanings. Carcieri v. Salazar, 555 U.S. 379, 388, 129 S.Ct. 1058, 172 L.Ed.2d 791 (2009). The commonly understood meaning of "resolve" is "to deal with successfully," "reach a firm decision about," or to "work out the resolution of" something. Resolve, Merriam-Webster Online Dictionary, https://www.merriam-webster.com/dictionary/resolve (last accessed July 13, 2017). Black's Law Dictionary similarly defines the term to mean "to find an acceptable or even satisfactory way of dealing with (a problem or difficulty)." Resolve, Black's Law Dictionary 1504 (10th ed. 2014). Implicit in these definitions is an element of finality. If the parties reach a "firm decision about" liability, then the question of liability is not susceptible to further dispute or negotiation. As the Seventh Circuit explained in interpreting the same statutory provision, "[a]n issue which is `resolved' is an issue which is decided, determined, or settled — finished, with no need to revisit." Bernstein, 733 F.3d at 211. "To meet the statutory trigger for a contribution action under § 9613(f)(3)(B), the nature, extent, or amount of a PRP's liability must be decided, determined, or settled, at least in part, by way of agreement with the EPA." Id. at 212 (emphasis in original).
But even if an agreement decides with finality the scope of a PRP's legal exposure and obligations, is its liability "resolved" where the government reserves certain rights, or where the party refuses to concede liability? For example, the statutory provision setting forth EPA's settlement authority allows EPA to include a covenant not to sue in a settlement agreement. 42 U.S.C. § 9622(f). But such covenant must be conditioned on a PRP's completed performance. Section 122(f)(3) provides that
Id. § 9622(f)(3). EPA must therefore preserve its ability to bring an enforcement action even after the settlement agreement is executed. This requirement is reflected in EPA's model CERCLA consent decree, which provides that "covenants not to sue are conditioned upon the satisfactory performance by Settling Defendants of their obligations under this Consent Decree." Superfund Program; Revised Model CERCLA RD/RA Consent Decree, 60 Fed. Reg. 38,817, 38,833 (July 28, 1995). Similarly, EPA has, in the past, included in settlement agreements releases from liability that are conditioned on a PRP's completed performance. See, e.g., Bernstein, 733 F.3d at 212-13; Florida Power Corp. v. FirstEnergy Corp., 810 F.3d 996, 1004 (6th Cir. 2015); RSR, 496 F.3d at 558. Furthermore, parties often expressly refuse to concede liability under a settlement agreement, even while assuming obligations consistent with a finding of liability.
The Sixth and Seventh Circuits have decided that these reservations of rights tip the scales against a finding that a party has resolved its liability. In Bernstein, the Seventh Circuit held that settling PRPs had not resolved their liability where (i) the agreement expressly stated that the PRPs had not conceded liability; (ii) EPA reserved its right to "seek legal [ ] or equitable relief to enforce the terms of the [agreement]"; and (iii) EPA only "conditionally promised to release the [PRPs] from liability" upon the PRPs' "complete performance, as well as certification thereof." 733 F.3d at 212-13 (emphasis in original). In rejecting the PRPs' argument that the agreement's covenant not to sue amounted to the requisite resolution, the court reasoned that because the release from liability was conditioned on completed performance, the covenant could only take effect when "performance was complete." Id. at 212.
The Sixth Circuit conducted a similar analysis in ITT Industries. 506 F.3d 452. The court found no resolution of liability where (i) EPA reserved its right to bring legal action for failure to comply with the agreement or for past, present, or future response costs; and (ii) the agreement expressly stated that the PRP did not concede liability. Id. at 459-60. And more recently, in Florida Power, the Sixth Circuit found no resolution where (i) EPA reserved its right to bring a CERCLA enforcement action for violations of the agreement; (ii) the agreement expressly stated that the PRP "shall have resolved [its] liability to EPA" only "[f]ollowing satisfaction of the requirements of this Consent Order"; (iii) the agreement provided that "participation of [the PRP] in this Order shall not be considered an admission of liability"; and (iv) the agreement was not titled an "administrative settlement." 810 F.3d at 1004.
By comparison, in Hobart Corp. v. Waste Management of Ohio, Inc., 758 F.3d 757 (6th Cir. 2014), the Sixth Circuit held that a PRP had resolved its liability where the agreement (i) stated that, "for purposes of Section 113(f)(3)(B) ... [the PRPs] have, as of the Effective Date, resolved their liability to the United States"; (ii) immunized the settling parties from contribution actions as of the Effective Date; (iii) included the title, "Administrative Settlement Agreement"; and (iv) contained a covenant prohibiting EPA from suing under CERCLA "[i]n consideration of the actions that will be performed and the payments that will be made by [the PRPs] under the terms of th[e] Settlement Agreement." Id. at 768-69 (emphasis added and omitted). Yet, as pointed out by the
Further complicating the law in the Sixth Circuit is an earlier case, RSR, in which the court held that the PRP's promise of future performance "resolved [its] liability to the United States" because RSR "agree[d] to assume all liability (vis-à-vis the United States) for future remedial actions." 496 F.3d at 558 (emphasis in original). But, as noted again by the dissent in Florida Power, the agreement at issue in RSR also included a covenant not to sue conditioned on a Certification of Completion of Remediation Action issued by EPA. Florida Power, 810 F.3d at 1012 (Suhrheinrich, J., dissenting); see id. (contemplating that the covenant might "not take effect until the remedial action was complete"). The RSR court indicated that a promise of future performance in an agreement suffices to constitute resolution of liability. See 496 F.3d at 558.
We adopt a meaning of the phrase "resolved its liability" that falls somewhere in the middle of these various cases. We conclude that a settlement agreement must determine a PRP's compliance obligations with certainty and finality. See Bernstein, 733 F.3d at 211-12 ("An issue which is `resolved' is an issue which is decided, determined, or settled — finished, with no need to revisit."); see also Florida Power, 810 F.3d at 1002-03. However, we disagree with the Sixth and Seventh Circuits' holdings in Florida Power and Bernstein that the government must divest itself of its ability to enforce an agreement's terms. If a covenant not to sue conditioned on completed performance negated resolution of liability, then it is unlikely that a settlement agreement could ever resolve a party's liability. That is because CERCLA prevents a covenant not to sue from "tak[ing] effect until the President certifies that remedial action has been completed...." 42 U.S.C. § 9622(f)(3); see 60 Fed. Reg. at 38,833 (model consent decree, conditioning a covenant not to sue on completed performance).
Nor do we agree — as the court held in Bernstein — that a release from liability conditioned on completed performance defeats "resolution." An agreement may "resolve[ ]" a PRP's liability once and for all without hobbling the government's ability to enforce its terms if the PRP reneges. This reasoning applies equally to a covenant not to sue conditioned on completed performance.
Moreover, unlike the court in Florida Power, we conclude that it matters not that a PRP refuses to concede liability in a settlement agreement. Congress' intent in enacting § 113(f)(3)(B) was to encourage prompt settlements that establish PRPs' cleanup obligations with certainty and finality. A PRP's refusal to concede liability does not frustrate this objective so long as the PRP commits to taking action. Indeed, requiring a PRP to concede liability may discourage PRPs from entering into settlements because doing so could open the PRP to additional legal exposure. See 42 U.S.C. § 9607(a) (setting forth obligations of liable PRPs).
In sum, an examination of § 113(f)(3)(B)'s plain language, with due consideration for CERCLA's structure and purpose, leads us to the conclusion that a PRP "resolve[s] its liability" to the government where a settlement agreement decides with certainty and finality a PRP's obligations for at least some of its response actions or costs as set forth in the agreement. A covenant not to sue or release from liability conditioned on completed performance does not undermine such a resolution, nor does a settling party's refusal to concede liability. Whether this test is met depends on a case-by-case analysis of a particular agreement's terms.
Turning to the 1998 RCRA Decree, we conclude that it fails to resolve Asarco's liability for any of its response actions or costs. First, the Decree's release from liability covers none of the "corrective measures" — i.e., response actions — mandated by the agreement. Paragraph 209, under "Effect of Decree," states that
1998 RCRA Decree ¶ 209 (emphasis added). The release is expressly limited to liability with regards to the United States' claims for civil penalties. Yet the complaint that prompted the parties to reach the agreement specifically sought both civil penalties and injunctive relief — only the latter of which could "require ASARCO to conduct corrective action."
Second, the 1998 RCRA Decree is replete with references to Asarco's continued legal exposure. For example, in paragraph 122, under the header "Off-Site Access," the agreement states unequivocally that "[n]othing in this section shall be construed to limit or otherwise affect ASARCO's liability and obligation to perform corrective measures...." Similarly, in setting forth a limited covenant not to sue, paragraph 214 states that the
Because paragraph 209 does not address — let alone resolve — the United States' claims for injunctive relief, the covenant not to sue does not restrict the United States' authority to bring an action under CERCLA §§ 106 or 107, which could result in additional response obligations. 42 U.S.C. §§ 9606, 9607.
Lest there be any doubt, the Decree makes the point at least three more times. Paragraph 216 states that "except as specifically provided in Paragraph 209," compliance with the Decree "shall be no defense to any action commenced" under federal or state law. 1998 RCRA Decree ¶ 216. And the next paragraph provides that
Id. ¶ 217 (emphasis added). Finally, paragraph 137 states that Asarco's CERCLA liability for response costs would not be released even if Asarco fully complied with the Decree:
Simply put, the 1998 RCRA Decree did not just leave open some of the United States' enforcement options, it preserved all of them. Because the Decree did not settle definitively any of Asarco's response obligations, it did not "resolve[ ] [Asarco's] liability." See 42 U.S.C. § 9613(f)(3)(B). Accordingly, Asarco could not have brought a contribution action pursuant to the 1998 RCRA Decree and the corresponding limitations period did not run with that agreement.
The district court held that Asarco's contribution claim for response costs incurred under the 2009 CERCLA Decree was time-barred based on the erroneous conclusion that Asarco could have brought its action under the 1998 RCRA Decree. Asarco argues the district court erred because it brought its action no more than three years after entry of the June 2009 CERCLA Decree, which it argues "resolved its liability" for the first time, and therefore its action is timely. We agree with Asarco.
Asarco has a timely contribution claim under the CERCLA Decree if three conditions are met. First, Asarco must have brought its action within three years after the date the settlement was judicially approved. 42 U.S.C. § 9613(g)(3)(B). Second, the CERCLA Decree must cover response actions or costs of response. Id. § 9613(f)(3)(B). And third, the CERCLA Decree must "resolve[ ]" Asarco's liability for at least some response actions or costs. Id.
Even if Atlantic Richfield did not abandon this claim, we would conclude Asarco's claim is timely. Under § 113(g)(3), the day of the event that triggers the period is excluded for purposes of computing the period's end date. See Asarco, LLC v. Union Pac. R.R. Co., 765 F.3d 999, 1007-08 (9th Cir. 2014). Therefore, the first day of the period would be June 6, 2009, and the last day for filing would be June 5, 2012. See id. at 1007. Asarco met this deadline.
We agree with Asarco and hold that the CERCLA Decree "resolved" its liability for all of its response costs at the Site.
CERCLA Decree ¶¶ 28-29. Thus, so long as Asarco funds the Custodial Trust Accounts,
Other parts of the Decree are similarly all-encompassing. For example, the section setting forth reservations of rights by the government is, in pertinent part, limited to Asarco's "future acts." Under that provision, the United States and Montana "specifically
The agreement also caps Asarco's "total financial obligations" for past contamination at the amount specified in the agreement. CERCLA Decree ¶ 8.h. While it leaves open the possibility that Asarco may owe certain additional costs, those costs do not include response costs. Id. In other words, Asarco's financial liability was "resolved" — i.e., determined with finality — under the agreement itself; the agreement did not expose Asarco to future liability for past hazardous waste releases.
The agreement also provides Asarco with protection against contribution actions by non-settling parties, as provided under CERCLA § 113(f)(2), 42 U.S.C. § 9613(f)(2). CERCLA Decree ¶ 43. Contribution protection applies only to "[a] person who has resolved its liability ... in an administrative or judicially approved settlement." 42 U.S.C. § 9613(f)(2) (emphasis added). The agreement's incorporation of that provision is further evidence that Asarco "resolved its liability" under the agreement. See Hobart, 758 F.3d at 768-69 (incorporation of provision immunizing a settling PRP from contribution weighed in favor of finding that the agreement resolved its liability).
Finally, we consider Atlantic Richfield's concern that deeming Asarco's contribution claim timely would allow Asarco to benefit from its own alleged neglect under the RCRA Decree. We sympathize with Atlantic Richfield's position but cannot agree with its conclusion. Whether a right of contribution is available does not depend on whose ox gets gored: the fact that Asarco and not some other party was liable under the RCRA Decree does not change the fact that that agreement did not give rise to a right of contribution, whereas the CERCLA Decree did.
In sum, the CERCLA Decree constitutes a "firm decision about" Asarco's liability that lends it the requisite degree of finality. See Bernstein, 733 F.3d at 211 n.12. We therefore hold that Asarco has a cognizable claim for contribution under CERCLA § 113(f)(3)(B) because it brought a timely action under an agreement that resolved its liability.
We hold that the 1998 RCRA Decree did not resolve Asarco's liability for at least some of its response obligations under that agreement. It therefore did not give rise to a right to contribution under CERCLA § 113(f)(3)(B). By contrast, the 2009 CERCLA Decree did resolve Asarco's liability, and Asarco has brought a timely action for contribution under that agreement. We therefore vacate the district court's grant of summary judgment and remand for further proceedings consistent with this opinion. On remand, the district court should determine whether Asarco is entitled to any financial contribution from Atlantic Richfield and, if so, how much.
H.R. 2817, 99th Cong. § 113 (June 20, 1985).
