Justices Hold CWA Settlement Does Not Start the Clock on CERCLA Limitations

June 1, 2021 | Insights



By Dan Vineyard, Lindsey Moorhead, & Carolyn Campion

In Territory of Guam v. United States, the Supreme Court unanimously held that claims for contribution under Section 113(f)(3)(B) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) require the resolution of a CERCLA-specific liability. Accordingly, settlements or consent decrees under different environmental statutes will not start the clock on a party’s CERCLA claims for limitations purposes. For parties, like Guam, who have not been sued under CERCLA (a statutory requirement for bringing Section 113 CERCLA contribution claim), the Act provides a remedy in the form of a cost recovery claim under CERCLA Section 107(a).

Background

The island of Guam served as an operations base for the U.S. Navy in the Pacific. To dispose of waste being generated on the island, the Navy constructed the Ordot Dump where toxic military wastes were allegedly deposited for several decades. In 1950, the Navy relinquished control of Guam and the Dump, which became a public landfill that continued to receive waste. As a territory of the United States, Guam and the Dump remained in the U.S. Environmental Protection Agency’s (EPA) purview.

In 2002, EPA sued Guam, asserting that the Dump was discharging pollutants in violation of the Clean Water Act. To resolve this lawsuit, Guam entered into a consent decree with EPA in 2004, which required Guam to pay a penalty, close the Dump, end the leaching of pollutants, and to construct a new municipal landfill. Following the Dump’s closure, costly remediation work began.

Over a decade later and still incurring costs, Guam sued the United States in 2017 for cost recovery under CERCLA Section 107(a), and for contribution under CERCLA Section 113(f)(3)(B), to recover landfill closure and remediation expenses. In response, the United States filed a motion to dismiss, arguing that the three-year statute of limitations on Guam’s CERCLA contribution claim had passed because Guam had resolved its liability for the Dump in the 2004 consent decree. CERCLA cost recovery and contribution claims are generally exclusive of one another, so if Guam could have but failed to bring a timely contribution claim, Guam would have forfeited its recovery rights under the Act. The trial court sided with Guam, holding that the Clean Water Act consent decree did not resolve Guam’s liability for purposes of its CERCLA claims. On appeal, the D.C. Circuit reversed the trial court’s decision and held that a CERCLA contribution claim did not require a CERCLA specific settlement.

Aftermath of Supreme Court Ruling

The Supreme Court’s recent decision in Guam reversed the D.C. Circuit’s holding. In an opinion by Justice Clarence Thomas, the Court’s analysis focuses on the textual placement and statutory language of CERCLA Section 113(f)(3)(B). The specific use of “response action” and reference to response cost in Section 113(f)(3)(B) is a cross-reference to another CERCLA provision, and suggests that a unified interpretation of the Act is appropriate.

Based on this decision, Guam may proceed with bringing a CERCLA cost recovery claim against the U.S. Navy for cleanup costs associated with the Dump, despite the fact that Guam previously entered into the consent decree with the EPA.

Going forward, this case may influence the language and scope of consent decrees negotiated between private parties and EPA, especially where the United States is a potentially responsible party at a Superfund Site. Parties who have not entered into a CERCLA-specific settlement but have incurred CERCLA-recoverable costs also need not second guess themselves when considering a CERCLA cost recovery claim.

The opinions expressed are those of the authors and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice.


In This Story

Carolyn Campion
Associate, Houston

Lindsey C. Moorhead
Partner, Houston

Daniel E. Vineyard
Partner, Houston

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