The Fall-Out From Cooper v. Avian By Thomas M. Donnelly and Matthew - - PDF document

Chemical \Vaste Litigation Reporter

1601 Connecticut Avenue, N.W., Suite 602, Washington, DC 20009 • 202-462-5755· Fax 202-328-2430

The Fall-Out From Cooper v. Avian

By

Thomas M. Donnelly and Matthew K. Narensky*

civil to context means in the absence 107

cleanup efforts, and thus no longer have a claim for contribution under section 113, is that an implied right to contribution under section 107(a) remains

• viable. The following highlights the key post-Aviall

Services district court decisions. section but

13 the 'contours' section 107, so a claim for contribution requires the 'joint operation' of both sections."

• ld. quoting

In a recent case out of the Eastern District of California, Adobe Lumber v. Taecker, 2005 WL 1367065 (E.D. Cal. May 24, 2005), a landowner "voluntarily" commenced the cleanup of property that had been contaminated by a tenant dry-cleaning

• peration. 1

The landowner sued the dry-cleaning

• peration for cost recovery under CERCLA section

107(a), for contribution under section 113. Following the decision in Aviall Services, the dry- cleaner moved to dismiss these claims. Because the PRP admittedly initiated the cleanup effol1 the absence an underlying civil action under sections 106 or 107, and did not claim to be an landowner, the court dismissed both the section 113 claim for contribution and the section 107(a) claim for cost recovery. Relying on Pinal Creek, however, the court refused to dismiss the case entirely, holding that the landowner retained a viable claim for contribution pursuant to court noted that the enactment the SARA. amendments argument voluntarily undertaken

and chair of the in the San Ehrman LLP. Matthew the San Francisco office environmental regulation

The United States Supreme Court ruled last December, in Cooper Industries, Inc.

• v. Aviall

Services, Inc., 125 S.Ct. 577 (2004), that private parties in CERCLA litigation may not seek contribution toward cleanup costs they have incurred under CERCLA section 113(f)(l), unless a lawsuit has been filed against them under CERCLA section 106 or 107(a). Prior to this ruling, many Circuit Court of Appeals (including the Ninth Circuit in Pinal Creek Group

v.

Newmont Mining Corp., 118 F. 3d 1298 (9th Cir. 1997», had already determined that potentially responsible parties not seek joint and several cost recovery pursuant to CERCLA section 107(a), but were limited to section 113 contribution actions against other PRPs. The Supreme Court identified this well established body

• f federal case law, and recognized that in light of

these cases its decision raised the following question--do responsible parties who undertake voluntary cleanup efforts have any CERCLA remedies available

• utside of section

113 (in contribution or otherwise) to recover cleanup costs from other PRPs? The Court refused to resolve this critical issue (over a strong dissent), and remanded to the trial court to decide the issue.

Thomas M. Environmental Litj'gation Francisco office Heller Ehl'm2m

Chemical Waste Litigation Reporter

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Westem Properties Service Corp. v. Shell Oil Co., 358 F. 3d 678,685 (9th Cir. 2004). From this, the court reasoned that after Aviall Services a PRP's claim for contribution that is brought in the absence

• f a civil action under sections 106 or 107 should

be construed as it was before the congressional enactment of section 113, and thus allowed the case to proceed. See also Kotrous

v.

Goss-Jewett Company of Northem Califomia, Inc., 2005 WL 1417152 (ED. Cal. June 16, 2005) (employing a similar analysis in finding an implicit right to contribution under 107(a) was still viable). The Adobe Lumber decision illustrates the subtlety of the arguments surrounding this issue. While it is true that Pinal Creek recognized an implicit right of contribution in section 107(a), the Ninth Circuit also held that section 113 now "governs" and "regulates" that right. See Pinal Creek, 118 F. 3d at 1302. Adobe Lumber's somewhat strained reading

• f Pinal

Creek as providing for two distinct contribution remedies under CERCLA, one governed by section 113, and the other governed solely by section 107, is difficult to justify in light of the plain language in Pinal Creek. In Mercury Mall Associates, Inc.

• v. Nick's

Market, Inc., 368 F. Supp. 2d 513 (ED. Va. Feb. 28, 2005), the court also identified these same policy concerns, but reached the opposite result. As in Pinal Creek, the Fourth Circuit Court of Appeals, in Pneumo Abex Corp.

• v. High Point,

Thomasville & Denton R.R., 142 F. 3d 769, 776 (4th Cir. 1998), determined that section 113 must be used by potentially responsible parties seeking recoverj from other PRPs. In contrast to Adobe Lumber's reading of Pinal Creek, however, the district court in Mercury Mall determined that the previously implied right of action for contribution arising solely under section 107 was obviated by the addition of section 113 to CERCLA in 1986. See Mercury Mall, 368 F. Supp. 2d at 519. Thus, based on the combined operation of Aviall Services and Pneumo Abex, Mercury Mall held that the party who had initiated the voluntary cleanup effort was left without a remedy under CERCLA. The court described this result as "quixotic" contrary to the underlying purposes of CERCLA, but (contrary to Vine Street and Adobe Lumber) determined that "when the law is transparent, notwithstanding the logic underpinning it, this Court is bound to impose it." ld. Similarly, in Elementis Chemicals

• v. T H

Agriculture and Nutrition,

• C. (S.D.N.Y. Jan.

31,2005), the comt relied upon Bedford

v.

Sills, 156 F. 3d 416,425 (2d Cir. 1998), like Pinal Creek and Pneumo Abex, held a PRP is limited to a section 113 claim for COll1tnlbution. Bedford Affiliates points

• ut

that section 113 apportions liability based

• n

equitable considerations and has a three year statute of limitations, whereas section 107(a) has a six year statute of limitations. Thus, the Circuit reasoned, if a choose, 3 become a as a rec:()vi~rirHY would readily abandon 13 in generous provisions

• f

Affiliates, 156 at 424. district court rl",'c"",,,,;,,,,,,-j Services leaves a PRP that

en~!,aglcs

cleanup without a CERCLA renne{lv at *13; see also States of

2,

One possible motivation for Adobe Lumber's contrary decision could be the reluctance to foreclose a CERCLA remedy to a PRP that voluntarily engages in cleanup efforts. District courts in other circuits have more clearly identified such policy considerations. Vine Street LLC v. Keeling, 362 F. Supp. 2d 754 (ED. Tex. March 24, 2005), the court held that a PRP that does not have recourse to section 113 may nevertheless pursue a claim under Section 107(a)(4)(B). The court recognized that the "Fifth Circuit has not directly

ad(jresse~d

the

• f precisely who

a under Section 107(a)[.]" See id. at court examined Pinal Creek and other circuit court decisions had addressed this issue, concluding these courts "did not rule that a PRP without a section 113(f) cannot a claim under Section 107(a)." ld. at reading the was based

• n

public policy pmticularly that

PRP

vo!unl:arily works

<>,,,>nr'\!

to

Chemical Waste Litigation Reporter

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against other PRPs via section 113 in holding no CERCLA remedies available to a PRP that engages in a voluntary cleanup). Two district courts out of the Seventh Circuit have issued conflicting decisions on this point. City ofWaukesha v. Viacom International Inc., 362

• F. Supp. 2d 1025 (B.D. Wis. March 23, 2005), like

Elementis, determined that a PRP city that had undertaken voluntary cleanup efforts had no viable claims remaining under CERCLA after Aviall Services. In a straightforward analysis, the court determined that it was constrained by Akzo Coatings, Inc. v. Aigner Corp., 30 F. 3d 761, 764 (7th Cir. 1994), which (like Pinal Creek) held that a landowner who is liable in some measure for contamination must seek contribution under section 113(f). Therefore, because Aviall Services forecloses a section 113 contribution action in the absence an underlying section 106 or 107 claim, the court determined that no CERCLA claim was available to Conversely, in Metropolitan Water Reclamation District Greater Chicago v. Lake River C01p., 365

• Supp. 2d 913 (N.D. m. April 12, 2005), the

court tracked Aviall Services, holding that if the implied right to contribution existed before section 113 was added to CERCLA in 1986, and that right "vas not encompassed by section 113(f)(1), then it must still lie in section 107(a). This is especially true, reasoned the court, because the SARA amendments explicitly preserved all state and federal contribution rights that preexisted the amendment. Metropolitan Water did not address the holding in Akzo Coatings that governed the decision in City ofWaukesha, instead citing dicta in Key Tronic Corp. v. United States, 511 U.S. 809, 816 (1994), which states "[CERCLA] now expressly authorizes a cause

• f

action for contribution in § 113 and impliedly authorizes a similar and somewhat overlapping remedy in § 107." As a result, a PRP plaintiff that had voluntarily commenced cleanup efforts was permitted to maintain a contribution action against

• ther PRPs under section 107(a).

Many correctly predicted there would be a conflict in the district courts over whether a PRP who voluntarily undertakes a cleanup may seek contribution toward its costs under section 107. United Court answer this question directly the next time it faces it.