ORDER
FRANCIS J. BOYLE, Chief Judge.
This matter was heard on October 19, 1992,' on Plaintiffs’ objection to the Report and Recommendation of Magistrate Judge Boudewyns dated August 12, 1992, which recommended that summary judgment be entered against the Plaintiffs. After hearing thereon and upon consideration of the memo-randa of the parties and the Report and Recommendation, it is hereby ORDERED:
1. The Report and Recommendation (attached hereto ■ ■ as
Appendix A)
is adopted and summary judgment is granted against Plaintiffs in favor of the ■ Defendants listed in
Appendix B. ■
2. With respect to the recommendation in the Report and Recommendation that this Court impose Rule 11 sanctions on the Plaintiffs, the Court finds that sanctions are not warranted.
REPORT AND RECOMMENDATION
TIMOTHY M. BOUDEWYNS, United States Magistrate Judge.
This matter is before the Court for' review of the defendants’ motions pursuant to Federal Rule of Civil Procedure (FRCP) 56 for summary judgment.
The defendants have moved for summary judgment because, they argue, there are no material facts in dispute and they are entitled to judgment as a matter of law.
This matter has been referred to me for preliminary review, findings and rec
ommended disposition.
Procedural history
In S~ptember 1983, the United States Environmental Protection Agency (the "EPA") placed the Landfill and Resource Recovery landfill site (the "Site") located in North Smithfield, Rhode Island on its National Priorities List of most hazardous sites. The EPA determined that both the plaintiffs and the defendants in this case were potentially responsible parties ("PRPs") due to their disposal of hazardous substances at the Site.
After negotiations with the EPA, on February 26, 1991, the majority of the defendants signed the Administrative Order by Consent ("AOC") which represents the settlement they reached with the EPA. The plaintiffs have not settled with the EPA, which has, because of this, ordered them to conduct the cleanup at the site under a Unilateral Administrative Order ("IJAO").
On August 2, 1991, the plaintiffs filed suit against forty-eight defendants
pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA")
. On December 30, 1991, the plaintiffs filed against four .additional defendants,
the Allied Group, also under CERC-LA. The two cases were consolidated. On February 14, 1992, the plaintiffs amended their first Complaint, seeking, among other things, to recover "all costs of response incurred by plaintiffs including interest, and associated costs and fees."
For the follo~,ving rèásons I recommend that summary judgment be entered against the plaintiffs.
Facts of the case
The EPA placed the landfill Site in question on its National Priorities List in September 1983 because it determined that a release or threat of release of hazardous substances occurred at or from the Site. The EPA also concluded that both the plaintiffs and the defendants in this case disposed of hazardous wastes at the Site, thus, making all of them responsible for clean up.
On September 29, 1988, the EPA issued a Record of Decision stipulating a remedy for clean-up of the Site. The EPA calculated the volume of hazardous material each PRP allegedly sent to the Site, using information provided by the PRPs and the State of Rhode Island. According to the EPA, the defendants in this suit are the "de minimis" parties because each contributed less than 1% of the total volume of hazardous substances at the Site. The EPA has determined that the plaintiffs (and those they claim to represent-Truk--Away of Rhode Island, Inc., Landfill & Resource Recovery, Inc. David J. Wilson and Charles S. Wilson-collectively referred to as the "Truk-Away Group") have contributed over 87% of the hazardous waste at the Site.
After lengthy negotiations, the majority of the defendants signed the AOC, on February 26, 1991, which consists of the settlement they reaèhed with the EPA.
Each of the de minirnis settlors agreed to pay into the EPA Superfund an amount equal to their fair share of the past and estimated future response costs for the Site plus an additional 56% as a settlement premium.
Although the
de minimis
settlors
contributed only 10.56% of the waste at the Site, they are paying 16% of the total anticipated response costs at the Site, which totals nearly three million dollars. The EPA has ordered the plaintiffs, who have not settled, to conduct the cleanup at the site under a UAO.
In early August 1991, the plaintiffs filed their original complaint against the first forty-eight defendants pursuant to CERCLA.
On September 3, 1991, the EPA published the AOC in the Federal Register
in order to begin the 30-day public notice and comment period required by EPA regulations. Only the plaintiffs and the Truk-Away Group submitted comments on the propos'ed settlement. The EPA weighed these comments and concluded that no modification of the
de minimis
settlement was necessary. The AOC became final on January 30, 1992. '
The AOC includes a provision protecting the settling parties from actions for contribution:
The United States agrees that by entering into and carrying out the terms of this Consent Order, each Settling Party will have resolved its liability for Covered Matters .to EPA •... within the meaning of Sections 113(f)(2) and 122(g)(5) of CERC-LA ... The Settling Parties and Federal Settling Parties shall be entitled to the protections from actions for contribution afforded by those provisions and shall not be liable for claims of contribution afforded by those provisions and shall not be liable for claims for contribution for Covered Matters, as provided by Sections 113(f)(2) and 122(g)(5) of CERCLA.
The defendants argue that precisely because of this protection the plaintiffs cannpt sue them for response costs incurred at the Site.
On December 30, 1991, the plaintiffs filed suit against four additional defendants. This second suit (CA-91-0690B) and the.plaintiffs’ first suit were fundamentally the same, therefore, the two were consolidated to CA-91-0383B.
On February 14, 1992, the plaintiffs filed an Amended Complaint, seeking, among other things, to recover “all costs of response incurred by plaintiffs ... including interest, and associated costs and fees.”
Issues .
Are any or all of the defendants entitled to summary judgment? And, if so, are the federal settling defendants entitled to judgment the same as the rest of the settling defendants?
Discussion
The defendants’ motions for summary judgment are made pursuant to FRCP 56(c), which states:
The judgement sought shall be rendered forthwith if the pleadings, depositions, answers or interrogatories, and admissions of file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgement as a matter of law.
Summary judgment is appropriate then when “there is no genuine issue as to any material fact and ... the moving party is entitled to judgement as a matter of law.”
Once the movant avers “an absence of evidence to support the non-moving party’s case,”
the latter must adduce specific facts establishing the existence of at least one issue that is both “genuine” and “material.” The mere existence of a factual dispute, of course, is not enough to defeat summary judgment. The evidence relied upon must be “significantly probative” of specific facts,
and “material”
in the sense that the dispute over them necessarily "affect[s] the outcome of the suit."
In other words, the ~arty Opposing summary judgment must demonstrate that there are bona fide factual issues which "need to be resolved before the related legal issues can be decided."
The First Circuit has concluded that an issue is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party."
The court's function in ruling on a motion for summary judgment is to determine whether or not such a genuine issue exists, and not to resolve such existing factual issues.
First, the plaintiffs here do not dispute the material facts for this motion.
Second, the plaintiffs' claim is statutorily barred and the settling defendants are entitled to judgment as a matter of law.
Congress enacted CERCLA in 1980 in response tp the severe environmental and public health damage caused by the disposal of hazardous substances. The statute'schief purpose is the expedient cleanup of hazardous waste contaminated sites.
CEROLA empowers the EPA to respond to actual and threatened releases of "any hazardous substance" and "any pollutant or contaminant which may present an imminent and substantial danger to the public health or welfare."
When the EPA determines that response action is needed at a contaminated site, the statute provides several alternatives: first, the EPA may issue an administrative order directing the responsible parties to respond to the contamination;
second, the EPA may petition the district court for an injunction to compel the responsible parties to take steps to lessen an actual release of hazardous substances or to prevent a threatened release;
third~, the EPA may use its own resources to respond to the contamination, and then sue the responsible parties for reimbursement of the Superfund.
Response costs
can be incurred by the EPA, individual states or by private parties, depending on who pays for the removal or remedial activities.
CERCLA's Section 107(a) provides for recovery of response costs from PRPs in several distinct types of actions:. the federal government, state gov
ernment (or Indian tribe) and the private party response recovery actions.
The private party response recovery action, set forth in Section 107(a)(4)(B), provides that:
Notwithstanding any other provision or rule of law, and subject only to the defenses set forth in subsection (b) of this section — [owners, operators, generators and transporters] shall be liable for — (B) any other necessary costs of response incurred by any other person consistent, with the national contingency plan.
If a private party cleans up a site, it may incur response costs and obtain the right to recover these costs from others.
Prior to the addition of Section 113(f) to CERCLA in 1986, the right of contribution (the right of
liable
parties to sue each other under Section 107) had not been explicitly provided. Many courts had found the right of contribution to be implied under Section 107’s phrase “any other person”.
Congress added Section 113(f) to clarify and confirm liable parties’ rights to use Section 107 to seek contribution from each other for response costs.
- Thus, with Section 113, Congress did not add a new cause of action, but showed that it was only affirming and making clear an existing cause of action for contribution under Section 107. Congress did not demonstrate in any way in the statute or in the legislative' history that Section 113(f) was intended to -be an independent, alternative cause'of action distinct from the Section 107 cost recovery action.
Accordingly, there is no basis for the plaintiffs’ attempt to distinguish between a cause of action under Section 107 and one under Section 113.
Contribution Protection
.
In general, CERCLA seeks to encourage the EPA to enter into settlements in order to hasten cleanup and reduce litigation.
CERCLA’s
de minimis
settlement provision
specifically serves to encourage early settlements in appropriate circumstances.
The
de minimis
settlement provision instructs the EPA to enter into an “expedited final settlement” with responsible parties as quickly as possible whenever the EPA has concluded that: (1) the settlement is “practicable and in the public interest”; (2) the settlement consist of only a small part of the total response costs at the site and (3) the waste contributed by the settling party is minor in comparison to other hazardous substances at the facility, both in terms of amount and toxicity.
CERCLA provides protection to settling parties via two specific provisions. First, CERCLA Section 113(f)(2) states, in pertinent part:
A person who has resolved its liability to the United States or a State in an adminis-. trative or judicially approved settlement shall not be liable for claims for contribution regarding matters addressed in the settlement.
:
Second, CERCLA Section 122(g)(5), addressing
de minimis
settlements, maintains:
A party who has resolved its liability to the United States under this subsection shall not be liable for claims for contribution regarding matters addressed in the settlement.
A suit by one PRP against another to obtain reimbursement is a claim for contribution and is barred by the contribution protection provisions of CERCLA if the defendant PRP has resolved its liability in a settlement with EPA.
These CERCLA provisions are meant to encourage settlements and to provide settling parties with “a measure of finality in return for their willingness to settle.”
Contribution protection is a vital part of a
de minimis
settlement because the legal fees and other costs of negotiating and litigating with the United States, compounded by the potential costs of defending against actions for contribution by other PRPs, .could often surpass the amount such minimal contributors would be responsible for paying. As a result, CERCLA provides
de minimis
PRPs with the capacity to pay an amount proportionate to their responsibility at a site and allows them to be discharged from further negotiations and litigation with a minimum expenditure of energy, time, and resources. Congress intended that this result favor settling parties over nonsettling parties.
Contribution Claims Are Clearly Barred by CERCLA
A claim for contribution is a claim in which one liable party seeks to recover from another liable party for the latter party’s share of a common liability.
Under CERCLA, when one PRP sues another to recover a share of the response costs incurred by the first, that suit is a claim for contribution.
Contribution claims against the de minimis settlors are strictly prohibited by the plain language of the contribution protection provisions of CERCLA as discussed above.
Congress enacted sections 113(f)(2) and 122(g)(5) for the purpose of encouraging settlement.
CERCLA’s goals are furthered when the EPA is able to focus its resources on cleaning up sites rather than litigating with PRPs. To achieve this end, Congress gave the EPA a “carrot and stick” to obtain settlements.
The EPA can offer the “carrot” of allowing settlors to pay once and then be protected from having to pay another time to a non-settlor. The “stick” that EPA wields against non-settlors is the risk that the settlors’ payment will be less than the settlors’ relative share of the total costs at the site and that the non-settlors will have to make up the difference.
Is the Plaintiffs’ Claim a Claim For Contribution?
Plaintiffs claim that there are .fundamental differences between response costs recovery and contribution actions within CERCLA
and, thus, base their claim solely on Section 107. As discussed above, however, plaintiffs’ claim must be based on both Sections 107 and 113(f).
The plaintiff PRPs have sued other PRPs (including the
de, minimis
settlors) seeking to recover a portion of the response costs that the plaintiffs claim they will bear in cleaning up the Site. Plaintiffs will incur response costs only as a result of work that they are compelled to do under the EPA’s UAO.
While it may be true that the plaintiffs’ claim is an action for response costs, it is a claim for
.contribution
from the defendants for response costs. It is clear from the analysis of CERCLA and the history behind it that the plaintiffs’ claim, whatever it’s called, is one for contribution.
Case law also supports this conclusion. In
United States v. Cannons Engineering Corp.,
the United States and the states of New Hampshire and Massachusetts brought an action against non-settling PRPs seeking previously incurred clean-up costs. The plaintiffs also moved for entry of a consent decree with contribution protections for settling PRPs. Non-settling defendants brought cross-claims for contribution and implied indemnity. The First Circuit determined that Congress specifically provided that contribution actions could not be maintained against settlors.
As in
Cannons,
in this case, non-settling PRPs are suing those PRPs who have settled with the EPA for causing hazardous contamination at a waste disposal site. The settling defendants here, like those in
Cannons,
are entitled to contribution protection under CERCLA from any non-settlor’s claims of liability which attempt to circumvent Congress’
obvious
intent to protect settlors.
A recent ease,
United States v. Alexan
der,
so held that
de minimis
PRPs who settled their CERCLA liability to the Government are protected from contribution and indemnity claims. In
Alexander,
some
de minimis
PRPs reached a settlement with the Government and paid money in exchange for guaranties that they would not be subject, to further liability at the site. One of the non-settling PRPs filed an action against the settlors seeking contribution under federal and state law. The court found that under Sections 113 and 122 of CERCLA, contribution claims against
de minimis
settlors were prohibited as a matter of law. In so holding, the
Alexander
court stated:
The parties' in the instant case are all subject to CERCLA and have resolved any liability thereunder by joining in the Partial Consent Decree. It- is this exact scenario that Congress had in mind when it decided to protect these parties from any further liability, including claims for contribution or indemnity. Therefore, it is clear that [the non-settlors] cannot reach them for
any
type of contribution.
As well, the non-settling PRPs in this case cannot reach the
de minimis
PRPs for any type of contribution, including contribution for response costs.
On July 31, 1992, Judge Harold Ackerman of the United States District Court for the District of New Jersey issued his opinion in
Transtech Industries, Inc. v. A & Z Septic Clean, et
al.
In
Transtech Industries,
non-settling plaintiffs brought a CERCLA Section 107 action against over two hundred settling defendants, among others, seeking reimbursement for their EPA ordered cleanup activities at a contaminated waste disposal site. The settling defendants' argued that the consent decree they entered into with the EPA protected them from suits for contribution.
Judge Ackerman rejected the plaintiffs argument that Section 107 response actions
and Section 113 contribution actions are distinct; “when propérly construed, the two sections work together, one governing liability and the other governing contribution from those found liable.”
Thus, the plaintiff failed in its argument that “since its claim is authorized under Section 107, it is not subject to a Section 113(f)(2)
defense.”
Judge Ackerman also noted:
... even if I accepted plaintiffs distinction between response costs and contribution costs, I find that plaintiffs are being facetious at best in their argument that it acted voluntarily, privately, and in keeping with the goals of CERCLA and not as a result of government threats.
Although, the defendants were not afforded contribution protection for all site costs,
Judge Ackerman’s analysis of Sections 107 and 113 of CERCLA are on point for the instant case. The plaintiffs here, too, fail in their argument that a, Section 107 claim is distinct from a Section 113(f)(1) contribution claim. In addition, even if the plaintiffs’ arguments were accepted, clearly, they have not acted “voluntarily, privately and in keeping, with the goals of CERCLA and not as a result of government threats.”
In
Key Tronic Corporation v. United
States
, according to the plaintiffs, the court asked, “whether the contribution protection provided a settling PRP by 42 U.S.C. § 9622(g)(5) bars a direct action by another PRP under 42 U.S.C. § 9607(a)(4)(B) to recover initial response costs privately incurred.”
The
Key Tronic
court distinguished the
United States v. Cannons Engineering
Corp.
and
Central Illinois Public Service Co. v. Industrial Oil Tank & Line Cleaning
Service
cases (cited by one of the settling parties) as inapplicable to the direct claim by Key Tronic. The court said:
Cannons
and
Industrial Oil Tank
must be distinguished from the present ease. In those cases, nonsettling PRPs sought indemnity from settling PRPs for prospective liability to the United States. Thus, the indemnity claims fell squarely within the situation that apparently prompted
Congress to pass section 9622. Here, Key Tronic seeks to recover a portion of the costs it
incurred, directly, at its own initiative, in responding to the release
at [the site]. That factual distinction makes the rationale in
Cannons
and
Industrial Oil Tank
inapplicable to this case.
This same language, however, also distinguishes
Key Tronic
from the present case. Key Tronic sought to recover a portion of the costs it had incurred directly, at its own initiative, in responding to the release at the site. Here, the plaintiffs are seeking to obtain response costs not yet fully incurred, for an action taken not at its own initiative, but in response to an order by the.Government. This claim falls “squarely within the situation that apparently prompted Congress to pass” Section 122.
In
United States v.
Hardage,
the Government submitted a
de minimis
consent-decree which claimed to provide protection to the settlors from the independent private response- costs of the Hardage Steering Committee (“HSC”) PRPs. When the- United States moved the court to enter the -decree, the HSC defendants opposed the entry of the decree, arguing that the decree illegally attempted to cut off their independent right to recover their response costs under CERCLA Section 107(a)(4)(B).
The court approved the order, but interpreted it to have no effect on the HSC PRPs’ independent response cost' claims.
Finding a distinct difference between a contribution claim and a response cost claim under CERCLA, the court found that the Government had no statutory authority to shield the
de minimis
defendants from the HSC’s independent response cost claims.
As applied to this case, first, the plaintiffs’ response costs cannot be called “independent” even under the
Hardage
definition. The EPA has ordered the plaintiffs to clean up the Site pursuant to its authority under CERCLA. If the plaintiffs do not fully comply" with this order, they will be subject to fines of up to $25,000 per day.
The plaintiffs cannot accurately describe their cleanup as “independent” in these circumstances.
Second, the plaintiffs err by claiming that their response costs do not originate from their liability under CERCLA. As discussed above, the EPA may require a PRP to satisfy its liability at' a site in a number of ways. No matter which alternative the EPA utilizes, the costs incurred by the PRP (whether paid to EPA as reimbursement or paid to contractors hired directly by the PRP itself) are incurred to. satisfy the PRP’s liability under CERCLA.
If the PRP seeks to recover a portion of the costs that it has incurred at a later time, the PRP’s suit is derivative of its liability under CERCLA and is a claim for contribution.
In this case, EPA has required the plaintiffs to complete the cleanup pursuant to an order under CERCLA Section 106.
The response costs that will be incurred by the plaintiffs result directly from the plaintiffs’ liability at the site; accordingly, the plain: tiffs’ suit is a derivative claim in which the plaintiffs seek to shift to a third party some of the liability asserted against- it= by the EPA. Thus, even under the
Hardage
definition of contribution, the plaintiffs’ suit to obtain reimbursement for a portion of their response costs is a suit to obtain contribution from other PRPS.
SHOULD THE FEDERAL DEFENDANTS BE TREATED DIFFERENTLY FROM THE MAJORITY OF THE DEFENDANTS WITH REGARDS TO SUMMARY JUDGMENT?
There is no basis
for
plaintiffs’ argument that federal agencies should receive less protection from the contribution protection provisions than a non-government entity. CERCLA section 113(f)(2) provides that “persons” who resolve their liability are protected from contribution claims.
The term “person” as defined by CERCLA Section 101(21) expressly includes the United States.
Aso, CERCLA section 120(a)(1) provides:
Each department, agency, and instrumentality of the United States ... shall be subject to, and comply with, this chapter in
the same manner and to the same extent,
both procedurally and substantively as any nongovernmental entity, including liability under 9607 of this title.
It is this waiver and definitional provision in CERCLA that waives the United States’ sovereign immunity to claims from private parties like the plaintiffs. The plaintiffs cannot demand that the United States be a “person” for the purposes of the liability provision in CERCLA but not a “person” for the purposes of the contribution protection provisions.
The legislative history of CERCLA shows that Congress intended to provide contribution protection to federal agencies who were involved in
de minimis
settlements. Representative Glickman, in discussing the
de min-imis
settlement provision, stated:
Athough [the
de minimis
settlement provision at section. 122(g) ] .is primarily directed toward private parties who are minimal contributors of waste or who are otherwise minimally related to the hazardous substance problems at a facility, federal agencies may also' satisfy the
de minimis
criteria at particular facilities. Thus, when federal agencies fall within the criteria of [the
de minimis
provision], they too should be treated as
de minimis
parties.
•
The settlement terms for the federal PRPs are exactly the same as the other
de minimis
settlors. The calculation of the federal defendants’ settlement payments are on the same basis and include the same 56% settlement premium that the private
de minimis
settlors paid.
Conclusion
The effect of plaintiffs’ argument, if accepted, would be to create disincentives for settlement because settlors would be required to pay twice: once to the EPA in the settlement and then again to nonsettling parties who sue for contribution. This result would punish the
de minimis
parties for settling and paying their fair share early,
and reward the non-settlors for holding out. The result would be fewer settlements and increased litigation. The express purpose of CERCLA Sections 113(f) and 122 would be undermined. While the result may be harsh to the plaintiffs, such was Congress’ clear intent.
Plaintiffs are seeking contribution for their response costs, therefore, I recommend that the motion for summary judgment be entered against the plaintiffs.
In addition, because CERCLA is so clear and conclusive that claims of contribution cannot be brought, I recommend that this Court impose Rule 11 sanctions on the plaintiffs. The defendants who settled did so, in part, to avoid the
high
costs
of
litigation. CERCLA’s settlement provisions were intended to provide “a measure of finality [to the settling parties] in return for their will
ingness to settle.”
Thus, the settling defendants in this case deserved the right to be insulated from this dispute once they settled with the EPA. Instead, they have incurred legal fees and other costs in defending against this action for contribution by the plaintiffs.
The court in
United States v. Alexander, supra,
found that the non-settling defendant in that case was subject to Rule 11 sanctions for filing a claim for contribution against the settling defendants.
In imposing sanctions, the court stated, “[t]his Court is genuinely shocked at [the non-settlor’s] blatant disregard for binding statutory law- and applicable and controlling Rules of Procedure. [The non-settlor’s] persistent assertion of its claims for contribution from the
de minimis
defendants in the face of clearly prohibiting statutory authority is a blatant expression of its bad faith and a per se violation of Rule 11.”
The
Alexander
court then ordered that the non-settlor pay sanctions of $10,-000.00 and that its counsel also pay sanctions of $10,000.00. • The non-settlor and its counsel were also held jointly and severally liable for all reasonable fees and expenses incurred by any
de minimis
party who had to respond to the non-settlor’s action for contribution.
The Court should consider imposing sanctions and holding the plaintiffs jointly and severally liable for all reasonable fees and expenses incurred by the settling defendants who responded to this action.
Any objection to this Report and Recommendation must be specific and must be filed with the Clerk of Court within ten (10) days of its receipt.
Failure to file specific objections in a timely' manner constitutes a waiver of the right to review by the district court.
August 12, 1992