Cranbury Brick Yard, LLC v. United States

943 F.3d 701
Court of Appeals for the Third Circuit·Decided November 22, 2019·No. 18-3287·Published·Cited by 54 cases

Opinion

PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

No. 18-3287

CRANBURY BRICK YARD, LLC, Appellant

v.

UNITED STATES OF AMERICA;

THE UNITED STATES DEPARTMENT OF THE NAVY; THE UNITED STATES DEPARTMENT OF THE ARMY

On Appeal from the United States District Court for the District of New Jersey (D.C. No. 3-15-cv-02789)

District Judge: Honorable Brian R. Martinotti

Argued September 10, 2019

Before: HARDIMAN, GREENAWAY, JR., and BIBAS, Circuit Judges.

(Filed: November 22, 2019)

John McGahren [ARGUED] Stephanie R. Feingold Morgan, Lewis & Bockius 502 Carnegie Center Princeton, NJ 08540

Counsel for Appellant

Jeffrey Bossert Clark Allen M. Brabender Avi Kupfer [ARGUED] United States Department of Justice Environment & Natural Resources Division P.O. Box 7415 Washington, D.C. 20044

Heather E. Gange United States Department of Justice Environment & Natural Resources Division P.O. Box 7611 Washington, DC 20044

Counsel for Appellees

OPINION OF THE COURT

BIBAS, Circuit Judge.

Cleaning up pollution is both essential and expensive. But polluters often frustrate cleanups, blaming one another to shift their fair share of the costs. The Comprehensive Environmental

Response, Compensation, and Liability Act (CERCLA) tries to fix this problem by forcing them all to pay: A government or person who incurs cleanup costs can sue a site’s polluters to recover those costs in a “cost recovery” action. If the plaintiff prevails, the polluters are held strictly as well as jointly and severally liable. Then, the polluters can ask a court to split the bill among them equitably in a “contribution” action.

If a polluter first settles its liability with the government, CERCLA immunizes that polluter from contribution liability to other polluters. But this immunity comes with a cost: a polluter who has settled with the government may bring a contribution claim against other polluters, but not a cost-recovery claim.

Appellant Cranbury Brick Yard, LLC, brings both cost-

recovery and contribution claims against the federal government . It seeks to recover money that it spent cleaning up a longabandoned weapons-manufacturing facility that the U.S. military and others contaminated. But Cranbury Brick Yard settled its potential CERCLA liability with the State of New Jersey before the cleanup. That gave it immunity from contribution claims, which extinguishes its cost-recovery claim. This left only its contribution claim against the federal government. But that claim is untimely because Cranbury Brick Yard sued nine years after joining the settlement. So we will affirm.

I. CERCLA, BRIEFLY EXPLAINED CERCLA is “notorious for its lack of clarity and poor draftsmanship.” Lansford-Coaldale Joint Water Auth. v.

Tonolli Corp., 4 F.3d 1209, 1221 (3d Cir. 1993); accord Giovanni v. U.S. Dep’t of the Navy, 906 F.3d 94, 117 (3d Cir. 2018) (“CERCLA is not the Mona Lisa of statutes.”). Still, its broad contours are easy enough to grasp.

CERCLA gives private litigants two causes of action: cost recovery under section 107(a) and contribution under section 113(f)(1). 42 U.S.C. §§ 9607(a), 9613(f)(1). The two are distinct, but they “complement each other” by applying “ ‘to persons in different procedural circumstances.’ ” United States v. Atl. Research Corp., 551 U.S. 128, 139 (2007) (quoting Consol. Edison Co. of N.Y. v. UGI Utils., Inc., 423 F.3d 90, 99 (2d Cir. 2005)); see Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157, 163 n.3 (2004). We discuss each in turn.

A. Cost recovery Anyone who cleans up a brownfield may sue the site’s polluters to recover “any . . . necessary costs of response.” 42 U.S.C. § 9607(a)(4)(B). If a cost-recovery suit succeeds, the defendants are strictly as well as jointly and severally liable. Pa. Dep’t of Envtl. Prot. v. Trainer Custom Chem., LLC, 906 F.3d 85, 89–90 (3d Cir. 2018). For “remedial action[s]” (that is, “those actions consistent with permanent remedy”), the statute of limitations for a cost-recovery action is six years from when the cleanup begins. 42 U.S.C. §§ 9601(24), 9613(g)(2)(B).

Four kinds of “potentially responsible part[ies]” may be liable for cost recovery, including the site’s current owner and anyone who owned the site “at the time of disposal of any hazardous substance.” Id. § 9607(a)(1)–(2); 40 C.F.R. § 304.12(m). But an owner is immune from liability if it bought the site as a

“bona fide prospective purchaser.” 42 U.S.C. §§ 9601(40), 9607(r)(1). To qualify, the owner must show (among other things) that “[a]ll disposal of hazardous substances . . . occurred before [it] acquired the facility.” Id. § 9601(40)(B)(i).

B. Contribution If a polluter is or may be liable under CERCLA or has settled its liability with a state or the federal government, it may sue other polluters for “contribution.” Id. § 9613(f)(1), (3)(B). Contribution is a “tortfeasor’s right to collect from others responsible for the same tort after the tortfeasor has paid more than his or her proportionate share, [with] the shares being determined as a percentage of fault.” Atl. Research, 551 U.S. at 138 (quoting Contribution, Black’s Law Dictionary 353 (8th ed. 2004)). So a contribution action lets a court “allocate response costs among liable parties using . . . equitable factors.” 42 U.S.C. § 9613(f)(1).

C. Resolving the overlap Cost recovery and contribution are “similar and somewhat overlapping remed[ies].” Key Tronic Corp. v. United States, 511 U.S. 809, 816 (1994). That overlap became an issue after the Supreme Court’s decision in Atlantic Research, which held that polluters could bring both kinds of claims against one another . 551 U.S. at 141. Since then, we and our sister circuits have clarified the relationship between the two kinds of claims.

1. The price of contribution-claim immunity. A polluter who settles its CERCLA liability with the federal government or a state government enjoys immunity under § 9613(f)(2) from contribution claims. In Agere Systems, we held that if a polluter

is immune from contribution claims, it cannot bring cost- recovery claims. Agere Sys., Inc. v. Advanced Envtl. Tech. Corp., 602 F.3d 204, 229 (3d Cir. 2010). Instead, it can bring only contribution claims. Id.

Six other circuits have reached this issue. All agree. See Whittaker Corp. v. United States, 825 F.3d 1002, 1007 & n.4 (9th Cir. 2016); Hobart Corp. v. Waste Mgmt. of Ohio, Inc., 758 F.3d 757, 768 (6th Cir. 2014); Bernstein v. Bankert, 733 F.3d 190, 202 (7th Cir. 2013); Solutia, Inc. v. McWane, Inc., 672 F.3d 1230, 1236–37 (11th Cir. 2012) (per curiam); Morrison Enters. v. Dravo Corp., 638 F.3d 594, 603 (8th Cir. 2011); Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., 596 F.3d 112, 127–28 (2d Cir. 2010).

2. Why the Agere Systems rule is necessary. An example may help show (a) the normal interplay between cost-recovery and contribution claims, (b) why contribution-claim immunity under § 9613(f)(2) encourages CERCLA settlements, and (c) how the Agere Systems rule helps apportion cleanup costs equitably by keeping polluters from using their immunity as both sword and shield.

Imagine a cleanup of comic proportions: Years ago, Wayne Enterprises and LexCorp ran a chemical factory together. After it shut its doors, the site remained contaminated with hazardous substances. Now, Gotham City owns the vacant, polluted brownfield. Responding to mounting public pressure, the City spends $1 billion cleaning up the site. Then it sues both companies for cost recovery.

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Cranbury Brick Yard, LLC v. United States, 943 F.3d 701 (3d Cir. 2019).

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