Environmental Law
| Publication year | 2013 |
Environmental Law
Travis M. Trimble
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In 2012,1 the United States Court of Appeals for the Eleventh Circuit, deciding an issue of first impression, held that a party that enters a consent order to settle potential liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)2 is not entitled to pursue a cost recovery action against other potentially responsible parties under section 1073 of the Act, but may only seek contribution from those parties under section 113(f)4 of the Act.5 The court also affirmed a decision by the Bureau of Ocean Energy Management to approve an exploration plan for oil and gas drilling in the Gulf of Mexico after the Deepwater Horizon oil rig disaster without requiring an Environmental Impact Statement.6 The petitioners' challenge under the National Environmental Policy Act7 and the Endangered Species Act8 was rejected by the court.9 Finally, the court held that the United States Fish & Wildlife Service's decision not to designate a critical habitat for the endangered Florida panther was exclusively within the discretion of the agency and thus not a violation of the Endangered Species Act.10 District courts in the Eleventh Circuit also issued two
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significant decisions under the Clean Water Act11 in 2012. The United States District Court for the Northern District of Florida upheld the Environmental Protection Agency's determination that water quality criteria to limit nutrient pollution in Florida waters should be numeric rather than narrative.12 The court went on to uphold parts of the Final Rule setting out numeric criteria applicable to lakes, but struck down criteria applicable to streams and certain streams entering unimpaired lakes, concluding that they were arbitrary and capricious.13 Finally, the United States District Court for the Middle District of Georgia held that Georgia's state law water quality protection scheme was sufficiently different from that of the federal Clean Water Act and parties entering consent orders with the state to settle potential liability under Georgia's scheme are not protected from citizen suits under the Clean Water Act for the same violations.14
Deciding an issue of first impression, the United States Court of Appeals for the Eleventh Circuit held in Solutia, Inc. v. McWane, Inc.,15 that a party obligated to remediate a hazardous site under a consent decree with the Environmental Protection Agency (EPA) may seek reimbursement for its costs of remediation from other potentially responsible parties (PRPs) only in a contribution action under § 113(f) of CERCLA,16 and, under § 107(a) of CERCLA,17 may not pursue cost recovery.18 The plaintiffs, Solutia & Pharmacia (S&P), were successors in interest to the Monsanto Company, which produced polychlorinated biphenyls (PCBs) at a plant in Anniston, Alabama, from 1929 to 1971. In 2002, EPA named S&P as defendants in a CERCLA enforcement action in the United States District Court for the Northern District of Alabama, seeking remediation of PCB and lead contamination at two sites in the Anniston area known as the PCB Site and the Lead Site. In June 2003, S&P filed the present case in the same court, seeking reimbursement of their costs of remediation in two counts: first, under § 113(f) for contribution as to costs they incurred at both the PCB Site
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and the Lead Site; and second, for cost recovery under § 107 as to costs they incurred at the Lead Site only. In August 2003, to settle the original enforcement action EPA entered into a Partial Consent Decree (PCD) with S&P, under which S&P were obligated to remediate both the PCB Site and the Lead Site, and under which they reserved the right to seek contribution from other PRPs for their costs of remediating the Lead Site.19
In 2005, EPA entered into a separate CERCLA settlement agreement with Foothills Community Partnership, a group of PRPs, for reimbursement of EPA's costs of remediating lead contamination in the Anniston area, including some areas that overlapped with areas addressed in the S&P PCD. Members of this PRP group were also defendants in the present case in district court. S&P filed a motion in the original enforcement case seeking to have its obligations under the PCD suspended on the ground that EPA, by entering into the 2005 agreement, had undermined S&P's right to seek contribution from the PRPs, who were parties to the 2005 agreement.20 The district court agreed to suspend S&P's obligations under the PCD provided they filed a motion requesting that relief; but instead S&P resolved this issue with EPA in July 2006 by entering into a stipulation clarifying the original PCD. The stipulation required S&P to remediate four specified geographical zones around Anniston, which included areas containing lead contamination. The stipulation also preserved S&P's right to bring an action for contribution against other PRPs for costs related to the remediation.21
Subsequently, the defendants in S&P's cost recovery and contribution action who were parties to the 2005 settlement agreement (Settling Defendants) moved for summary judgment as to both the § 107 cost recovery claim and the § 113(f) contribution claim. Additionally, two defendants in the case who had not settled with EPA in 2005 (Non-Settling Defendants) moved for summary judgment only as to the § 107 claim. In June 2008, the magistrate judge deciding that case granted summary judgment to the Settling Defendants as to S&P's § 113(f) contribution claim because § 113(f)(2) bars a contribution claim against a party who has resolved its liability to the United States in an administrative or judicially approved settlement, which the 2005 agreement was. The magistrate also initially ruled that S&P could proceed with their § 107 cost recovery claim against all defendants, but
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upon motions to reconsider vacated that part of its order in December 2009, and in July 2010 granted summary judgment to all defendants as to S&Fs § 107 claim.22 S&P appealed.23
The Eleventh Circuit, based on its holding in Atlanta Gas Light Co. v. UGI Utilities, Inc.,24 first held that S&P had a contribution claim under § 113(f) for costs it incurred in complying with the PCD and stipulation.25 The court then held that S&P were not entitled to seek cost recovery under § 107 for the same costs.26 The court relied on two recent United States Supreme Court cases—Cooper Industries, Inc. v. Aviall Services, Inc.,27 and United States v. Atlantic Research Corp.28 —which explained and clarified the difference between a § 107 cost recovery action and a § 113(f) contribution action.29 Based on these cases, the Eleventh Circuit noted that cleanup costs incurred by a party voluntarily and directly (that is, not incurred in reimbursing another party) are recoverable only under § 107(a), even if the party incurring the costs is not an innocent party.30
In contrast, a party forced to reimburse another party (such as EPA) for cleanup costs may only seek reimbursement from other PRPs for those costs in a § 113(f) contribution action.31 Unlike the joint and several liability imposed by § 107, liability in a § 113(f) contribution
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action may be apportioned according to fault.32 Furthermore, parties who have settled their liability to the government through an administrative or judicial settlement are protected from § 113(f) contribution actions by other PRPs, but not from § 107 cost recovery actions.33
Because of these differences, the court concluded that § 113(f) should be the only remedy for a party obligated to undertake remediation under a consent decree, even though that party would incur those costs directly rather than being required to reimburse a third party.34 The court explained that:
[i]f a party subject to a consent decree could simply repackage its § 113(f) claim for contribution as one for recovery under § 107(a), then the structure of CERCLA remedies would be completely undermined. For example, parties[,] . . . like Solutia & Pharmacia, could thwart the contribution protection afforded to parties that settle their liability with the EPA, like the Settling Defendants. This, in turn, would destroy CERCLA's statutorily-created settlement incentive.35
The court also pointed out that allowing a § 107 recovery action for costs incurred pursuant to a consent order would allow the plaintiff in that action to hold the defendants jointly and severally liable, and those defendants in turn would be barred from seeking proportional allocation of those costs in a § 113(f) counterclaim because the plaintiff would have the protection of § 113(g),36 barring such a claim.37 As a result the plaintiff, itself likely not an innocent party, could potentially recover one hundred percent of its incurred costs complying with the consent order.38
The opinion did not discuss whether the § 113(f) contribution claim, which the court held that S&P had against the Settling Defendants, survived those defendants' settlement with EPA in 2005, but presumably it did not. Although the PCD and subsequent stipulation purported to preserve S&P's right to seek contribution from other PRPs for costs S&P incurred complying with the PCD, and the court held that S&P indeed had the right to a § 113 claim generally for those costs, the Settling
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Defendants would also have the statutory protection from contribution claims under § 113(g) as to any costs for which they and S&P could both be liable.39 This would mean that S&P would be left without any claim at all against the Settling Defendants, and would be left with contribution claims only against the Non-Settling Defendants.
In Florida Wildlife Federation, Inc. v. Jackson,40 the United States District Court for the Northern District of Florida issued several holdings related to EPA's...
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