Fireman's Fund Ins. Co. v. City of Lodi, Cal.

296 F. Supp. 2d 1197, 58 ERC (BNA) 1062, 2003 U.S. Dist. LEXIS 23440, 2003 WL 23095489

• Court: District Court, E.D. California
• Decided: December 22, 2003
• Docket: CIV.S 98-1489 FCD JFM
• Status: Published

Opinion

MEMORANDUM AND ORDER

DAMRELL, District Judge.

Plaintiff Fireman’s Fund Insurance Company (“plaintiff’) brought suit alleging that defendant City of Lodi’s (“Lodi”) ordinance, the Comprehensive Municipal Environmental Response and Liability Ordinance (“MERLO”), violates the Supremacy Clause of the United States Constitution because MERLO is preempted by the federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. §§ 9601-9675. 1

This matter is before the court on plaintiffs motion for (1) partial summary judgment on its preemption claim asserted pursuant to -42 U.S.C. § 1983 and (2) a permanent injunction prohibiting Lodi from further enforcing MERLO. Plaintiffs motion follows a remand from the Ninth Circuit Court of Appeals. See Fireman’s Fund Ins. Co. v. City of Lodi, 302 F.3d 928, 934-35 (9th Cir.2002), cert. denied, — U.S. —, 123 S.Ct. 1754, 155 L.Ed.2d 512 (2003). The parties presented oral argument on October 10, 2003.

BACKGROUND 2

A. Contamination Discovered within the City

In April, 1989, Lodi first detected tetrachloroethene (“PCE”) in a water sample from a new water tank. Subsequent testing found PCE contamination in the groundwater and several Lodi water wells. In March, 1992, the Central Valley Regional Water Quality Control Board (“RWQCB”) issued a report identifying a cleaning business insured by plaintiff as one potential source of PCE-contaminated wastewater discharged into Lodi’s sewer lines and suspected as a source of the soil and groundwater contamination.

In 1993, the California State Department of Toxic Substance Control (“DTSC”) commenced an investigation of the contamination. In 1994, DTSC initiated an administrative action against selected potentially responsible parties, including Lodi, to address the soil and groundwater contamination.

B. 1997 Cooperative Agreement

At a meeting on May 6,1997, Lodi’s City Council authorized the City Manager to execute a “Comprehensive Joint Cooperative Agreement” (“Cooperative Agreement” or “Agreement”) with the DTSC concerning the investigation and abatement of hazardous substance contamination within the City. Fireman’s Fund, 302 F.3d at 935. Under the Agreement, DTSC was required to act with Lodi in a consolidated effort, providing the oversight, consultation, and cooperation necessary and appropriate to ensure the contamination site was remediated in a timely, competent, and cost-effective manner. Id. at 950 n. 21. In exchange for DTSC’s “ongoing and substantial services,” the DTSC received in excess of one million dollars. Id.

Since the discovery of the contamination, Lodi has faced the issue of potential liability. Indeed, Agreement expressly stated that DTSC may have certain claims against Lodi for the design, construction, operation, and maintenance of its sewer system. Id. at 936. Despite this acknowledgment of potential liability, the Agreement specifically designated Lodi the “lead enforcement entity,” in place of the DTSC, and obligated Lodi to “cause a prompt, comprehensive, and cost-effective investigation and remediation” of the ground and soil contamination. (Cooperative Agreement, in Ex. D to Deck of Thomas Hixson (“Hixson Deck”), at 1); see Fireman’s Fund, 302 F.3d at 935.

C.MERLO

To support Lodi’s lead enforcement role, the Agreement also required the “prompt enactment and enforcement of a comprehensive municipal environmental response ordinance.” 3 (Cooperative Agreement, in Ex. D to Hixson Deck, at 5.) Just ninety days later, on August 6, 1997, Lodi’s City Council enacted the Comprehensive Municipal Environmental Response Ordinance (“MERLO”), which sets forth a remedial liability scheme partially modeled on CERCLA. MERLO is the subject of plaintiff’s preemption claim and present motion.

MERLO provides Lodi with municipal authority to investigate and remediate existing or threatened environmental nuisances affecting the City and to hold responsible parties or their insurers liable for the cost of Lodi’s nuisance abatement activities. Id. MERLO incorporated many of CERCLA’s standards. Id. Specifically, MERLO borrowed CERCLA’s definition of (1) who may be considered a “potentially responsible party” (“PRP”), 4 (2) who may avoid liability by proving certain affirmative defenses, 5 and (3) who may impose joint and several liability on responsible parties. 6 Id. However, in significant departures from CERCLA, MERLO’s liability scheme did not provide a mechanism for responsible parties to impose costs upon Lodi for its share of any attributable costs but did provide Lodi recovery for a broad range of “action abatement costs,” including attorney’s fees. See id.

Plaintiffs Fireman’s Fund Insurance Company and Unigard brought actions in this court to prevent Lodi from invoking or enforcing MERLO against its insureds. Id. at 934. Both insurers asserted MER-LO was preempted by CERCLA based upon field and conflict preemption. In separate rulings, this court granted .Lodi’s motion to dismiss Unigard’s federal preemption claim and denied Fireman’s Fund’s motion for partial summary judgment and permanent injunction. Both insurers appealed. The Ninth Circuit consolidated the appeals of the insurers and issued the Fireman’s Fund decision on August 6, 2002.

ANALYSIS

I. The Remand

The Ninth Circuit described MERLO as a “comprehensive ■ remedial liability scheme modeled on CERCLA and [state environmental law] ... [which] specifically provides Lodi with municipal authority to investigate and remediate existing or threatened environmental nuisances affected the City, and to hold PRPs or their insurers liable for the cost of the City’s nuisance abatement activities.” Id. at 936 (citing MERLO §§ 8.24.010-8.24.090). After a lengthy analysis of MERLO and its relationship to CERCLA, the Ninth Circuit concluded “several sections of MER-LO are preempted by state and federal law under the doctrine of conflict preemption ...” Id. at 957. In particular, the Ninth Circuit remanded the two cases and instructed that, if Lodi is a PRP, portions of MERLO would be- preempted “to the extent” it legislatively insulated Lodi (1) from contribution liability, 7 or (2) from bearing its share of responsibility, 8 and, (3) granted Lodi the right to recover “action abatement costs,” including attorney’s fees. 9 See Fireman’s Fund, 302 F.3d at 946, 947, 953.

II. Fireman’s Fund and CERCLA Policy

A. PRP Status under CERCLA

CERCLA section 107(a) imposes strict, joint and several liability on parties falling within one of the four categories “subject only to the defenses set forth in subsection (b) of this section.” 42 U.S.C. § 9607(a) 10 ; see Morrison Enters, v. McShares, Inc., 302 F.3d 1127, 1132 (10th Cir.2002) (“Liability attaches to four categories of individuals [under CERCLA section 107(a) ] ... [CERCLA 107(b) ] provides very limited defenses to liability.”). In other words, section 107(a) defines the “four classes of persons subject to the liability provisions” of CERCLA. Carson Harbor Village Ltd. v. Unocal Corp., 270 F.3d 863, 871 (9th Cir.2001) (en banc), cert. denied, 535 U.S. 971, 122 S.Ct. 1437, 152 L.Ed.2d 381 (2002); Centerior Serv. Co. v. Acme Scrap Iron & Metal Corp., 153 F.3d 344, 347 (6th Cir.1998); see Pinal Creek Group v. Newmont Mining Corp., 118 F.3d 1298, 1300 n. 1 (9th Cir.1997). Those persons are “potentially responsible parties” or “PRPs.” Carson Harbor, 270 F.3d at 874 (“Those four categories of persons [subject to liability under 42 U.S.C. §§ 9607(a) ] are ‘potentially responsible parties’ or ‘PRPs.’ ”); Centerior, 153 F.3d at 347 n. 8 (“There are four categories of PRPs ... under 42 U.S.C. §§ 9607(a)(1)-(4)”); Pinal Creek, 118 F.3d at 1300 n. 1; New Castle County v. Halliburton NUS Corp., 111 F.3d 1116, 1120 (3rd Cir.1997); accord 42 U.S.C. § 9613(f)(l)(“Any person may seek contribution from any other person who is liable or potentially liable under section 9607(a) ...”); 40 C.F.R. § 304.12 (defining potentially responsible party, or PRP, as “any person who may be liable pursuant to section 107(a) of CERCLA.”). Thus, determining PRP status under sec tion 107(a) is wholly distinct from application of the narrowly-defined, causation-based affirmative defenses to CERCLA liability in section 107(b) or proving the elements of a claim for cost recovery or contribution under CERCLA.

B. Lodi’s Interpretation of PRP Status

Lodi asserts that a municipal PRP with a claimed defense under section 107(b) may proceed as a party without CERCLA liability by enforcing its own municipal environmental ordinance. 11 However, Lodi has never articulated how this construction of PRP status is consistent with CERCLA’s structure or policies. It appears such an approach is dramatically at odds with CERCLA’s PRP cost- allocation scheme, which encourages the prompt and voluntary cleanup of hazardous waste sites before protracted litigation by imposing, at a very early stage, the costs of cleanup on parties .potentially responsible for the contamination.

Under CERCLA, Congress intended to impose strict joint and several liability upon PRPs because “their actions contribute to the release of contaminated material and increase the cost of remedial action.” Kaiser Aluminum & Chem. Corp. v. Catellus Dev. Corp., 976 F.2d 1338, 1343 (9th Cir.1992) (citing H.R.Rep. No. 1016, 96th Cong., 2d Sess. 33 (1980), reprinted in 1980 U.S.C.C.A.N. 6119, 6136); see United States v. Union Corp., 277 F.Supp.2d 478, 488 (E.D.Pa.2003) (finding plaintiff City of Philadelphia a potentially responsible party under CERCLA despite its claimed affirmative defense under 107(b) based upon releases from its sewers); Lincoln Properties, Ltd. v. Higgins, 823 F.Supp. 1528, 1538 (E.D.Cal.1992) (“In short, as a matter of law, the County may be liable for releases from its facilities — viz, its portion of the sewer and its wells.”). In this case, Lodi, though now adjudged a PRP, relies upon the possible success of a section 107(b) defense in a related, but separate, liability case, City of Lodi v. M & P Investments, CV 00-2441 FCD/GGH (“the M & P case”), in order to prevent the prompt and orderly application of CERCLA’s cost allocation scheme. To permit a municipal PRP to await the outcome of its alleged section 107(b) defense before being subject to the restrictions and limitations of CERCLA, undermines the CERCLA process that Congress mandated. The problem here, however, is further compounded by MERLO and Lodi’s imaginative legal stratagems employed regarding its legal status.

Acting outside the parameters of CERCLA, first, as the “People of the State of California,” 12 then, as a municipality enforcing state nuisance laws, Lodi has continued to assert lead enforcement authority. As a result, years of litigation have been consumed in efforts to either divine or obscure its true legal status and the justification for its lead enforcement authority. Consequently, ' important remediation efforts have been brought.to a grinding halt. 13

Such a result undermines the primary CERCLA objective of “effectuating] quick cleanups of hazardous waste sites” 14 and “encouraging voluntary private action to remedy environmental hazards.” 15 Moreover, to adopt Lodi’s position would ignore the express remand of Fireman’s Fund and impermissibly allow any potentially responsible municipality, armed with a similar ordinance, to impose its liability on others, thus rendering the congressional goal of prompt remediation of hazardous waste sites a nullity. See Fireman’s Fund, 302 F.3d at 948-49.

III. Lodi is a PRP under CERCLA § 107(a)

A. Admission

The court has previously found that Lodi is a PRP within the meaning of CERCLA section 107(a) in the “M & P” case, based upon counsel’s admission in open court. 16 (See Mem. and Order, filed Mar. 31, 2003 in M & P, at 17-18.) 17

Lodi now asserts that its admission is not dispositive of MERLO’s preemption because there are issues of fact (1) regarding the maintenance of Lodi’s sewer sys-tern and (2) “where, if anywhere, the City is a ‘PRP’ with or without a defense to CERCLA liability.” (Lodi Opp. at 12-17) (emphasis in original.) Neither assertion is persuasive. The court addresses each in turn.

In light of the court’s previous finding in M & P, Lodi’s evidence regarding the condition of its sewer system is irrelevant to MERLO preemption because, as plaintiff points out, such evidence “pertains, if at all, to Lodi’s ability to assert the third-party defense under CERCLA § 107(b)(3)” in the M & P case. (Reply at 13.) The Ninth Circuit’s remand plainly requires evidence that Lodi is within one of the four classes of persons subject to the liability provisions of CERCLA. See Fireman’s Fund, 302 F.3d at 946, 947, 953. In short, Lodi’s alleged entitlement to an affirmative defense under section 107(b) has no bearing on whether Lodi is a PRP or whether MERLO is preempted.

Lodi also contends that “the widespread, regional nature of the contamination problem in Lodi” means that plaintiff must prove liability with respect to each “particular site or plume” within the area of contamination. 18 (Lodi Opp. at 17.) Thus, Lodi argues, if plaintiff “proves the [sic] that the City is a responsible party with respect to a specific sewer line in the southern section of the City, such proof will not preempt MERLO with respect to a separate plume in the northern section of town.” (Lodi’s Opp. at 17.) Lodi’s construction of PRP status is undermined by the text and purpose of CERCLA’s cost allocation structure.

Contrary to Lodi’s assertion, section 107(a) does not impose a requirement that plaintiff trace specific contaminants within the overall hazardous waste site to a particular location where Lodi’s sewers released hazardous substances. “Although it is true that PRP status, by itself, does not generate liability,” once Lodi admitted it was a PRP, the legal consequences of that status took hold without respect to the “location” of the release within the contamination site. See Pinal Creek, 118 F.3d at 1305. Indeed, section 107 does not even “require a plaintiff to show any direct causal link between the waste each defendant sent to the site and the environmental harm.” Kalamazoo River Study Group v. Menasha Corp., 228 F.3d 648, 655 (6th Cir.2000).

Under Lodi’s interpretation, its PRP status within the “northern” section of the contamination site would not limit enforcement of MERLO in the “southern” section of the contamination site. Enforcement of MERLO in this manner would allow Lodi to be a PRP for one fractional “region” of contamination while simultaneously being considered the lead enforcement agency within a another fractional “region” of the site. This anomaly is completely at odds with CERCLA. Under CERCLA, liability attaches “despite the fact that the defendant PRP was in fact responsible for only a fraction of the contamination.” Fireman’s Fund, 302 F.3d at 945; see Morrison, 302 F.3d at 1133. 19 Thus, Lodi’s construction is “not supported by CERCLA’s text, is inconsistent with the traditional doctrine of contribution, entails a significant risk of producing unfair results, and runs the risk of creating procedural chaos.” Pinal Creek, 118 F.3d at 1303.

Accordingly, Lodi’s various proffered arguments notwithstanding, the court reaffirms its previous finding that Lodi is a PRP. {See Mem. and Order, filed Mar. 31, 2003, at 17-18.)

B. Cooperative Agreement

Although the court has previously found that Lodi is a PRP, plaintiff asserts an alternate ground based upon the Cooperative Agreement which establishes Lodi’s PRP status. The court will address this alternate ground.

According to plaintiff, Lodi’s 1997 Cooperative Agreement with the DTSC confers PRP status upon Lodi as a matter of law. Specifically, plaintiff asserts the Cooperative Agreement is an administrative settlement within the meaning of CERCLA section 113(f)(3)(B) 20 because “DTSC covenanted not to sue Lodi, nor pursue administrative action against Lodi, for claims relating to releases of the PCE/ TCE contamination at issue from the Lodi sewers, in exchange for approximately $1 million in payments for DTSC’s past and future response costs.” (Mot. for Summ. Judgment at 21.) As a result, plaintiff argues, Lodi is a PRP' because “a party that settles some of its CERCLA liability is by definition a PRP.” (Reply at 20.)

Aside from invoking Rule 408 of the Federal Rules of Evidence, discussed below, Lodi does not address plaintiffs argument that the Cooperative Agreement gives rise to PRP status. (Lodi Opp. at 17.)

1. Admissibility of Agreement

Relying upon Rule 408 of the Federal Rules of Evidence and the court’s now-vacated Memorandum and Order of December 31, 2002, in the M & P case, Lodi asserts the Cooperative Agreement is inadmissible to prove liability, fault, or PRP status. 21

Rule 408 of the Federal Rules of Evidence prohibits the introduction of evidence concerning the “(1) furnishing or offering or promising to furnish, or (2) accepting or offering or promising to accept, a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount,” in order to “prove liability for or invalidity of the claim or its amount.” Fed.R.Evid. 408 (emphasis added). 22 However, Rule 408 “does not re-

quire exclusion when the evidence is offered for another purpose, such as proving bias or prejudice of a witness, negativing a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution.” Fed.R.Evid. 408. “The use of the phrase ‘such as’ [in Rule 408] implies that the ensuing list is not exhaustive, but is only illustrative.” United States v. Technic Servs., Inc., 314 F.3d 1031, 1045 (9th Cir.2002).

In this case, plaintiff does not assert a claim of liability against Lodi and, thus, the Cooperative Agreement is not being introduced to prove Lodi’s liability. Indeed, plaintiffs present motion is premised upon its claim under 42 U.S.C. § 1983 alleging MERLO violates the Supremacy Clause of the United States Constitution. Lodi’s ultimate liability is simply not relevant to this motion. However, its legal status under CERCLA is.

A potentially responsible party under CERCLA may or may not be found ultimately liable for contamination. However, the statutory and judicial restraints imposed by CERCLA upon such a party is quite another matter. Here, the issue before the court is whether Lodi’s legal status under CERCLA was altered by the Cooperative Agreement with the DTSC and, thus, the Agreement is admissible for that purpose.

Accordingly, the court finds Rule 408 is inapplicable and overrules Lodi’s-objection. See Fed.R.Evid. 408.

2. Delegation Aspects of the Agreement

The Ninth Circuit interpreted the Cooperative Agreement to “require DTSC to act with Lodi in a consolidated effort, providing the oversight, consultation, and cooperation necessary . and appropriate to ensure the Lodi Groundwater Site is remediated in a timely, competent, and cost-effective manner.” Fireman’s Fund, 302 F.3d at 950 n. 21. In exchange for DTSC’s “ongoing and substantial services,” the DTSC received “the consideration enumerated in the Cooperative Agreement.” Id.

Although the stated purpose of the Cooperative Agreement is to “resolve all liability which may be asserted against the City of Lodi” based upon Lodi’s “design, construction, operation or maintenance of the commercial, industrial and residential storm and sanitary sewer systems,” it simultaneously delegates DTSC’s authority 23 to Lodi by conferring upon it the status of “lead enforcement entity.” As part of this delegation, the Cooperative Agreement requires the “prompt enactment and enforcement of a comprehensive municipal environmental response ordinance.” In essence, the parties agreed to reallocate the state’s authority to enforce environmental laws to a municipality which settled its liability to the state. Thus, at the outset, the Cooperative Agreement must be viewed as much more than an “administrative settlement” of liability under section 113(f).

The DTSC is entitled to proper deference in carrying out its statutory duties, however, the Cooperative Agreement must still be “fair, reasonable, and faithful” to the objectives of CERCLA. United States v. Cannons Eng’g Corp., 899 F.2d 79, 84 (1st Cir.1990). Neither the DTSC, nor Lodi, have the authority to execute an agreement that “conflict[sj or interferefs] with the accomplishment and execution of CERCLA’s full purpose and objective,” by circumventing the legal limitations placed upon PRPs. Fireman’s Fund, 302 F.3d at 943. The court need not find, at this time, that the Agreement “conflicts” or “interferes” with CERCLA because DTSC’s delegation of authority to Lodi is ancillary to a determination, of Lodi’s PRP status. Nevertheless, the court observes that such delegation of authority is a critical component of the strategy which led to the enactment of MERLO and Lodi’s assertion of lead enforcement authority.

3. Consequences of CERCLA § 113© Settlement

The court of appeals declined to decide whether Lodi, as a settling municipality, was a PRP as a result of the Agreement and, instead, left it to this court “to consider this argument in the first instance.” Id. at 958 n. 30. To answer this question, the court must analyze the Agreement’s substantive terms and practical effect. See Cannons Eng’g Corp., 899 F.2d at 85 (district court reviewing proposed CERCLA settlement must “satisfy itself that the settlement is reasonable, fair, and consistent with the purposes that CERCLA is intended to serve.”) (quoting H.R.Rep. No. 253, Pt. 3, 99th Cong., 1st Sess. 19 (1985) reprinted in 1986 U.S.C.C.A.N. 3038, 3042).

CERCLA section 113 is designed to “maximize the participation of responsible parties” in hazardous waste cleanup and expedite that cleanup by “encouraging early settlement, thus reducing the time and expense of enforcement litigation.” 24 Alcan, 25 F.3d at 1184. Such settlements further the purpose of CERCLA by providing immediate funds “to enhance environmental protection, rather than the expenditure of limited resources on protracted litigation.” In re Acushnet River & New Bedford Harbor, 712 F.Supp. at 1029. A party benefits from early settlement with the United States, or a State, because, by operation of section 113(f)(2), such a party becomes immune from contribution claims asserted by other potentially responsible parties for “matters addressed” in the settlement. Centerior, 153 F.3d at 348; Halliburton, 111 F.3d at 1124 n. 8; Alcan, 25 F.3d at 1186. However, that party is also limited by CERCLA section 113(f) to asserting claims for contribution. See Centerior, 153 F.3d at 352 (finding CERCLA section 113(f) permitted only a contribution claim, not a cost recovery claim, where “a potentially responsible party has been compelled to pay for response costs for which others are also liable” and then seeks to recover “reimbursement for such costs.”); Akzo Coatings, Inc. v. Aigner Corp., 30 F.3d 761, 764 (7th Cir.1994) (a party entering into consent decree with EPA is itself liable “in some measure for the contamination” and, consequently, “its claim [against other PRPs] remains one by and between jointly and severally liable parties for an appropriate division of the payment one of them has been compelled to make,” and such suits are governed by CERCLA section 113(f)).

Under CERCLA section 113(f)(3)(B), a “person who has resolved its liability” to a state for “some or all of a response action or for some or all of the costs of such action” in an “administrative” settlement “may seek contribution from any person who is not party to a [CERCLA section 113(f) ] settlement ...” 42 U.S.C. § 9613(f)(3)(B). In New Castle County v. Halliburton NUS Corp., 111 F.3d 1116 (3d Cir.1997), the Third Circuit Court of Appeals interpreted CERCLA section 113(f)(3)(B) to require a potentially responsible person who has resolved its liability in an administrative settlement to “use section 113, and only section 113, to obtain an equitable redistribution of liability among other potentially responsible persons.” Halliburton, 111 F.3d at 1124 n. 8; see Centerior, 153 F.3d at 351 (plaintiffs compelled by EPA administrative order to cleanup hazardous waste could not assert cost recovery claims against defendant PRPs because plaintiffs were themselves PRPs and were limited to contribution claims governed by section 113(f)); Akzo, 30 F.3d at 764 (treating claims by party entering into consent decree with EPA as “one by and between jointly and severally liable parties for an appropriate division of the payment one of them has been compelled to make” governed by CERCLA section 113(f)). 25

The interpretations of section 113(f) in Halliburton, Centerior, Akzo, and various district courts relied upon (1) the implicit limitations placed upon settling parties in CERCLA’s structure 26 and (2) application of common law principles governing joint tortfeasors to CERCLA. On the latter point, it is important to note that parties compelled to initiate a hazardous site cleanup may not themselves assert joint and several cost recovery claims but are, instead, limited to contribution claims. 27

In this case, the Cooperative Agreement partially resolved Lodi’s liability to the state 28 for past and future response costs. Because Lodi resolved its liability to an agency of the state for some of its response costs based upon the design, construction, and operation of Lodi’s sewers, the court finds the Agreement is an “administrative settlement” within the meaning of CERCLA section 113(f)(3)(B). 42 U.S.C. § 9613(f)(3)(B);. Halliburton, 111 F.3d at 1124 n. 8.-

The court further finds the Cooperative Agreement provides an alternate ground for Lodi’s PRP status because Lodi (1) incurred substantial liability for the past and future response costs based upon its contribution to contamination at the site, (2) continues to be under the threat of legal compulsion to perform remedial work, and (3) accepted responsibility for cleaning up the contamination site. Halliburton, 111 F.3d at 1124 n. 8; Signature Combs, 248 F.Supp.2d at 747; Compaction, 88 F.Supp.2d at 351; Borough of Sayreville, 923 F.Supp. at 679; see Centerior, 153 F.3d at 351. 29

IV. The Impact of Lodi’s PRP Status . on Preemption of MERLO

A. Overview

In light of the court’s finding that Lodi is a PRP, the next issue is whether the portions of MERLO challenged by plaintiff are preempted by CERCLA.

As mentioned above, the Cooperative Agreement required “the prompt enactment and enforcement” of a municipal environmental ordinance “to appropriately supplement ” Lodi’s authority under federal, state and local law. (Cooperative Agreement, in Ex. D to Hixson Deck, at 5) (emphasis added.) However, MERLO did not merely “supplement” CERCLA; it far exceeded the reach of CERCLA.

After settling its liability with the DTSC, Lodi enacted an ordinance that effectively launched a variety of highly complex and sophisticated litigation strategies designed to deter any examination of its own liability. During the years of the litigation, Lodi has repeatedly sought numerous injunctive and dispositive orders and continual reconsiderations and appel late reviews of this court’s orders in order to overturn, delay, or deflect rulings on Lodi’s legal status. 30

B. Conflict Preemption

“Under the Supremacy Clause of the United States Constitution, state laws that ‘interfere with, or are contrary to the laws of Congress’ are preempted and are therefore invalid.” Fireman’s Fund, 302 F.3d at 941 (emphasis added) (quoting Gibbons v. Ogden, 22 U.S. (9 Wheat) 1, 211, 6 L.Ed. 23 (1824)). Whether federal law preempts state law is governed by congressional intent. Fireman’s Fund, 302 F.3d at 941.

Preemption is compelled where Congress intends and “Congress’ command is explicitly stated in the statute’s language or implicitly contained in its structure and purpose.’ ” Id. (citation omitted). “CERCLA permits both states and their political subdivisions to enact hazardous waste regulations and pursue additional remedies, as long as those remedies do not conflict or interfere with the accomplishment and execution of [CERC-LA’s] full purpose and objective.” Fireman’s Fund, 302 F.3d at 943 (emphasis added).

C. Contribution Rights under MER-LO

Plaintiff argues that MERLO conflicts with CERCLA because, under CERCLA, a PRP who has incurred response costs may seek contribution from other PRPs whereas under MERLO, Lodi cannot be sued for contribution. Lodi asserts that, assuming it is found to be a PRP, issues of fact preclude summary judgment for plaintiff because the court must still find that MERLO “actually protects Lodi from contribution.” (Lodi Opp. at 12) (emphasis in original.)

MERLO § 8.24.090(D)(1) provides:

Any person alleged by the city to be jointly and severally liable pursuant to this chapter who has entered into an 'effective settlement, administrative settlement or judicially approved settlement shall not be liable for claims for contribution, equitable indemnity, or partial or comparative equitable indemnity regarding matters addressed in the settlement.

MERLO § 8.24.090(D)(1) (emphasis added). In addition, MERLO § 8.24.090(D)(4)(b) provides that a party settling its MERLO liability with Lodi may seek contribution from others under state law. 31

Plaintiff contends that MERLO insulates Lodi from contribution claims because, under the scheme, Lodi is a necessary party to any settlement and, as a result, it cannot be sued for contribution. In Fireman’s Fund, the Ninth Circuit agreed and stated: “If Lodi is indeed a PRP, it cannot simply legislate away this potential liability under state and federal law. For these reasons, we find that MERLO is preempted to the extent that it legislatively insulates Lodi from contribu tion liability under state and federal law.” Fireman’s Fund, 302 F.3d at 946.

Here, MERLO § 8.24.090(D)(1) and MERLO § 8.24.090(D)(4)(b) conflict and interfere with the accomplishment and execution of CERCLA’s purpose and objective. Specifically, the lack of contribution rights available under MERLO against Lodi inappropriately insulates Lodi, a PRP, from contribution claims arising out of response costs at the site. Such an outcome runs counter to CERCLA because parties subject to MERLO’s enforcement scheme would be liable for a municipal PRP’s full response costs. In contrast, CERCLA section 113(f)(1) operates to limit PRPs to contribution claims where a PRP “has been compelled to pay for response costs for which others are also liable” and then seeks “reimbursement for such costs.” Centerior, 153 F.3d at 352.

By enforcing MERLO’s one-sided cost recovery provisions outside of CERCLA’s cost allocation scheme, MERLO directly thwarts congressional intent to “effectuate quick cleanups of hazardous waste sites” 32 and encourage voluntary private action to remedy environmental hazards. See Lincoln Properties, 823 F.Supp. at 1537.

Accordingly, the court finds MERLO § 8.24.090(D)(1) and MERLO § 8.24.090(D)(4)(b) improperly insulate Lodi from contribution liability under CERCLA and, therefore, are preempted. Fireman’s Fund, 302 F.3d at 946.

D. Joint and Several Liability under MERLO

Plaintiff challenges a second portion of MERLO which permits Lodi, a PRP, to impose joint and several liability for the entire cleanup cost onto any one PRP. Plaintiff asserts this conflicts with CERCLA which does not permit a PRP to impose joint and several liability on other PRPs. Lodi argues, again, that issues of fact preclude summary judgment because the court must still ascertain whether MERLO “actually legislatively insulates Lodi from bearing its share of responsibility.” (Lodi Opp. at 12) (emphasis in original.)

The challenged provision, MERLO § 8.24.040(E), provides in relevant part:

The scope of liability [under MERLO] ... is joint and several for any person who has caused, created, contributed to, or maintained a single indivisible harm to public health, welfare or the environment resulting from, or which may result from, in whole or in any part, an environmental nuisance and for which there is no reasonable and reliable basis of apportioning the harm among the responsible parties.

MERLO § 8.24.040(E) (emphasis added).

After analyzing this provision of MER-LO, the Fireman’s Fund court held:

[I]f the district court determines that Lodi is a PRP, Lodi may not escape its share of responsibility by imposing all the costs of cleanup on others. Allowing it do so would interfere with CERCLA’s PRP cost allocation scheme, and would implicate the same policy concerns relied upon by this court in Pinal Creek in rejecting a § 107 cost recovery action for PRPs. For these reasons, we find that MERLO is preempted to the extent that it legislatively insulates Lodi from bearing its share of responsibility by imposing joint and several liability on other PRPs.

Fireman’s Fund, 302 F.3d at 947.

MERLO § 8.24.040(E) allows the municipal PRP to impose joint and several liability on others for all of its response costs. However, such full cost recovery is permitted under CERCLA by non-PRPs, such as the EPA or the DTSC. Lodi is not such a party. . Nevertheless, MERLO § 8.24.040(E) permits Lodi, a PRP, to “escape its share of responsibility by imposing all the costs of cleanup on others” outside of CERCLA’s process. Id. Such an unprecedented assumption of power by a PRP directly “interfere[s] with CERCLA’s PRP cost allocation scheme” causing inefficiency and delay in the remediation process and prolongation of a litigation process. See Fireman’s Fund, 302 F.3d at 947; Pinal Creek, 118 F.3d at 1303.

Accordingly, the court finds MERLO § 8.24.040(E) conflicts and interferes with CERCLA’s cost allocation scheme and, therefore, is preempted. Fireman’s Fund, 302 F.3d at 947.

E. Attorney’s Fees and “Action Abatement Costs” under MERLO

Plaintiffs final challenge is to certain MERLO provisions allowing Lodi to collect attorney’s fees and “action abatement costs.” Lodi contends issues of fact preclude summary judgment for plaintiff because the court must still determine whether MERLO “actually gives Lodi a litigation advantage with respect to the ability to collect attorneys’ fees.” (Lodi Opp. at 12) (emphasis in original.)

1. Attorney’s Fees

MERLO § 8.24.040(A)(9)(a) grants Lodi a right to collect attorney’s fees and “action abatement costs.” It provides in relevant part:

Any person ... who has contributed to or is contributing to the past or present handling, storage, treatment, transportation or disposal of any hazardous substance or pollutant which presents an environmental nuisance ... shall be liable for:

a. All abatement action costs incurred by the city ....

MERLO § 8.24.040(A)(9)(a) (emphasis added).

MERLO defines “action abatement costs” expansively to include: (a) “any and all legal, technical or administrative fees and costs,” (b) “interest and other costs of financing incurred by the city,” (c) “expert assistance in health, law, engineering and environmental science,” (d) “expert witness services,” (e) “legal fees (including, but not limited to, internal costs of the city attorney’s office or outside legal counsel deemed necessary at the sole discretion of the city),” and (f) “costs of issuing, servicing, and retiring of any financing instruments authorized by -the city council.” MERLO §§ 8.24.010(2)(a)-(h).

“Under section 9607(a)(4)(B), a private party 33 may recover the ‘necessary costs of response.’ ” FMC Corp. v. Aero Indus. Inc., 998 F.2d 842, 847 (10th Cir. 1993). “CERCLA defines ‘response’ to include ‘enforcement activities related thereto.’ ” Id. (quoting 42 U.S.C. § 9601(25)). “CERCLA § 107 does not provide for the award of private litigants’ attorney’s fees associated with bringing a cost recovery action.” Key Tronic Corp. v. United States, 511 U.S. 809, 819, 114 S.Ct. 1960, 128 L.Ed.2d 797 (1994); see United States v. Chapman, 146 F.3d 1166, 1173-75 (9th Cir.1998) (distinguishing between recovery of attorney’s fees by government and private litigants under CERCLA). Thus, CERCLA plaintiffs are “confined to recovery of ‘necessary costs,’ which do not include attorney’s fees.” Fireman’s Fund, F.3d at 953 (citing 42 U.S.C. § 9607(a)(4)(B)).

In Fireman’s Fund, the Ninth Circuit interpreted MERLO’s provision permitting recovery of attorney’s fees and held:

[A] city that is also a PRP should not be able to avail itself of this advantage. If the district court finds that Lodi is indeed a PRP, it may not legislate for itself a litigation advantage by granting itself the right to collect attorney’s fees.

Fireman’s Fund, 302 F.3d at 953. 34

MERLO’s provision allowing Lodi, despite its PRP status, to recover attorney’s fees in the midst of hazardous waste litigation finds no support in CERCLA’s text or in judicial precedent. Clearly, the impermissible recovery of legal fees by Lodi is a distinct litigation advantage which frustrates CERCLA’s purpose of effectuating prompt remediation and resolution of disputes.

The Ninth Circuit has noted, “[T]he ability to recover litigation-related attorney’s fees does not necessarily advance the pace of cleanup because it may encourage ambitious litigation.” Fireman’s Fund, 302 F.3d at 953. Indeed, as a result of MER-LO’s extraordinary legislative largesse, it would seem that Lodi’s attorneys, unimpeded by CERCLA or typical economic constraints, have often produced unnecessarily voluminous or redundant filings 35 and imaginative ploys that have sent this litigation needlessly down paths from the goals of CERCLA. It is obvious that, unlike CERCLA, MERLO § 8.24.040(A)(9)(a) promotes the very “ov-erlawyering” Congress intended to eliminate in these types of cases.

Accordingly, the court finds MERLO § 8.24.040(A)(9)(a), granting Lodi a right to collect attorney’s fees outside of CERC-LA, is preempted. Id.

2. “Action Abatement Costs”

The court must next determine whether MERLO’s broad definition of “action abatement costs” conflicts with the “necessary costs of response” permitted under CERCLA section 107(a). See Fireman’s Fund, 302 F.3d at 954. In Fireman’s Fund, the Ninth Circuit declined “to pass judgment” on “action abatement costs” and, instead, left it “to the district court to determine if these costs are recoverable under the standard of ‘necessary costs of response’ if Lodi should prove to be a PRP.” Id 36

As outlined above, MERLO provides Lodi the right to recover extensive categories of ill-defined costs that are not supported by CERCLA’s text and cannot be reconciled with Key Tronic’s interpretation of permissible “necessary costs of response” under CERCLA. In Key Tronic Corp. v. United, States, 37 the United States Supreme Court held that CERCLA section 107 did not “provide for the award of private litigants’ attorney’s fees associated with bringing a cost recovery action.” Key Tronic, 511 U.S. at 819, 114 S.Ct. 1960.

In determining the types of costs recoverable under CERCLA, the Key Tronic court indicated that costs which are “closely tied to the actual cleanup may constitute a necessary cost of response in and of itself under the terms of § 107(a)(4)(B).” Id. at 820, 114 S.Ct. 1960 (emphasis added). The Court noted that such costs may include “work performed in identifying other PRP’s,” or work “performed by engineers, chemists, private investigators, or other professionals who are not lawyers,” because “tracking down other responsible solvent polluters increases the probability that a cleanup will be effective and get paid for” which “significantly benefited [sic] the entire cleanup effort and served a statutory purpose ...” Id.

In contrast, the Supreme Court instructed that fees incurred as “litigation expenses” or “in pursuing litigation” are not properly included in recoverable CERCLA costs. Id. (emphasis added). For example, recoverable costs did not include “legal services performed in connection with the negotiations between Key Tronic and the EPA that culminated in the consent decree,” or “[s]tudies that Key Tronic’s counsel prepared or supervised during those negotiations” because such work “primarily protected] Key Tronic’s interests as a defendant in the proceedings that established the extent of its liability.” Id. at 820, 114 S.Ct. 1960. “As such, these services do not constitute ‘necessary costs of response’ and are not recoverable under CERCLA.” Id.

Clearly, Congress intended that cost recovery be limited to cleaning up the environment, not provide an opportunity to profit at the expense of the environment. Unfortunately, MERLO provides just such an opportunity.

MERLO’s definition of “action abatement costs” permits recovery of costs associated with Lodi’s financing scheme for its litigation. Such costs include: “interest and other costs of financing incurred by the city,” or “costs of issuing, servicing, and retiring of any financing instruments authorized by the city council.” MERLO § 8.24.010(2); MERLO § 8.24.010(2)(h)(ii). Apparently such a scheme was implemented “in order to avoid municipal finance mechanisms that would make Lodi’s ratepayers responsible (at least initially) for principal and interest costs.” Fireman’s Fund, 302 F.3d at 954. The scheme, contrary to federal environmental law, was designed to pay “lawyers to build a case for the recoverability of costs,” rather than directing “energy and resources toward cleaning up the site,” 38 and to “pursu[e] litigation,” rather than pay costs “closely tied to the actual cleanup.” Key Tronic, 511 U.S. at 820, 114 S.Ct. 1960.

Similarly, the remaining balance of “action abatement costs” permitted under MERLO include categories of fees and costs that are not permitted by CERCLA. Such fees and costs include, “any and all legal, technical or administrative fees and costs,” “expert assistance in health, law, engineering and environmental science,” “expert witness services,” and “legal fees (including, but not limited to, internal costs of the city attorney’s office or outside legal counsel deemed necessary at the sole discretion of the city).” See MERLO §§ 8.24.010(2). The above “action abatement costs” go far beyond recognized recoverable response costs under CERCLA because they are not carefully defined or limited to costs “closely tied to the actual cleanup” and include many costs incurred “in pursuing litigation.” Key Tronic, 511 U.S. at 820, 114 S.Ct. 1960.

Indeed, MERLO’s cost recovery scheme generates the opportunity for a financial windfall for some few fortunate professionals, as well as Lehman Brothers, Inc., an investment bank, which has no interest in cleaning up the contaminated site. 39 This profit-seeking concept of cost recovery is the polar opposite of CERCLA and is in direct violation of the goals and objectives set by Congress. See Fireman’s Fund, 302 F.3d at 953.

Accordingly, the court finds the “action abatement costs” defined by MERLO §§ 8.24.010(2)(a)-(h) are preempted by CERCLA because such costs are clearly broader than the definition and judicial interpretation of recoverable “necessary costs of response.” See 42 U.S.C. § 9607(a)(4)(B); Key Tronic, 511 U.S. at 819, 114 S.Ct. 1960; Fireman’s Fund, F.3d at 953-54.

F. Conclusion of Analysis

In sum, CERCLA is a comprehensive settlement process designed by Congress to further the efficient environmental cleanup and prompt resolution of disputes. In contrast, MERLO advances different priorities. Importantly, MERLO is carefully designed to make Lodi impervious to the consequences of CERCLA. In effect, MERLO elevates the financial interests of Lodi, its attorneys, and others, above the priorities of environmental cleanup and the prompt resolution of disputes. Such a legislative scheme is in direct conflict with the express goals and objectives of Congress and, thus, violates the Supremacy Clause of the United States Constitution.

V. Preemption

Because the court has held portions of MERLO are preempted by CERCLA, those provisions are invalid. See Fireman’s Fund, 302 F.3d at 941. Plaintiff requests that the court enter an order permanently enjoining Lodi and its officers from enforcing or invoking any of the preempted provisions against any person who is a PRP for the contamination at the site. 40

Based upon the court’s findings of preemption, the court makes the following orders:

1. Lodi and its officers are enjoined from enforcing or invoking MERLO § 8.24.090(D)(1) and MERLO § 8.24.090(D)(4)(b) against any person who is a PRP at the site of contamination, as that site is defined by this order;

2. Lodi and its officers are enjoined from enforcing or invoking MERLO § 8.24.040(E)’s provision for joint and several liability against any person who is a PRP at the site of contamination, as that site is defined by this order;

3. Lodi and its officers are enjoined from enforcing or invoking MERLO § 8.24.040(A)(9)(a) to collect attorney’s fees against any person who is a PRP at the site of contamination, as that site is defined by this order;

4. Lodi and its officers are enjoined from enforcing or invoking MERLO §§ 8.24.010(2) to collect “action abatement costs” against any person who is a PRP at the site of contamination, as that site is defined by this order.

CONCLUSION

Based upon the above, plaintiff Fireman’s Fund’s motion for partial summary judgment is GRANTED and a permanent injunction is issued against defendant City of Lodi in accordance with the above orders.

IT IS SO ORDERED.

1 . In the related case, Unigard v. City of Lodi, CV S 98-1712 FCD/JFM, 1999 WL 33454809, plaintiffs Unigard Insurance Company and Unigard Security Company (collectively ''Uni-gard”) brought a motion for summary judgment and permanent injunction on its complaint and adopted Fireman's Fund’s briefing. Accordingly, the findings of preemption and the issuance of a permanent injunction shall apply with equal force to plaintiff Unigard in the related case.

2 . The Background is drawn from the complaint and the Ninth Circuit's decision in Fireman’s Fund, 302 F.3d at 934-38. A more detailed history describing the contamination within the City of Lodi is recounted in Fireman’s Fund, 302 F.3d at 934-35.

3 . Under the Cooperative Agreement, Lodi's "enforcement activities” include "the prompt enactment and enforcement of a comprehensive municipal environmental response ordinance which shall enact into municipal law additional legal authorities to appropriately supplement the City of Lodi’s ... authority under federal, state and local law.” (Cooperative Agreement, in Ex. D to Hixson Deck, at 5.)

4 . MERLO §§ 8.24.040(A)(l)-(9) (defining nine categories of "persons” who "shall be liable” under Lodi's municipal liability scheme).

5 . See MERLO §§ 8.24.040(B)(l)-(4)("There shall be no liability under subsection A of this section for a person otherwise liable who can establish by clear and convincing evidence that” the environmental nuisance was caused by (1) an act of God, (2) an act of War, (3) a third party meeting certain requirements, or (4) any combination of the three defenses) (emphasis added).

6 . See MERLO § 8.24.040(E) (“The scope of liability in this chapter is joint and several for any person who has caused, created, contributed to, or maintained a single indivisible harm to public health, welfare or the environment resulting from, or which may result from, in whole or in any part, an environmental nuisance and for which there is no reasonable and reliable basis of apportioning the harm among the responsible parties.”) (emphasis added).

7 ."If Lodi is indeed a PRP, it cannot simply legislate away this potential contribution liability under state and federal law. For these reasons, we find that MERLO is preempted to the extent that it legislatively insulates Lodi from contribution liability under state and federal law.” Fireman’s Fund, 302 F.3d at 946.

8 . "[I]f the district court determines that Lodi is a PRP, Lodi may not escape its share of responsibility by imposing all the costs of cleanup on others.... For these reasons, we find that MERLO is preempted to the extent that it legislatively insulates Lodi from bearing its share of responsibility by imposing joint and several liability on other PRPs.” Id. at 947.

9 . "[A] city that is also a PRP should not be able to avail itself of this advantage. If the district court finds that Lodi is indeed a PRP, it may not legislate for itself a litigation advantage by granting itself the right to collect attorney's fees." Id. at 953.

10 . CERCLA section 107(a) provides:

(a) Notwithstanding any other provision or rule of law, and subject only to the defenses set forth in subsection (b) of this section-

(1) the owner and operator of a vessel or a facility,

(2) any person who at the time of disposal of any hazardous substance owned or operated anj' facility at which such hazardous substances were disposed of,

(3) any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at any facility or incineration vessel owned or operated by another party or entity and containing such hazardous substances, and

(4) any person who accepts or accepted any hazardous substances for transport to disposal or treatment facilities, incineration vessels or sites selected by such person, from which there is a release, or a threatened release which causes the in-currence of response costs, of a hazardous substance, shall be liable ...

CERCLA § 107(a); 42 U.S.C. § 9607(a)(em-phasis added).

11 .Lodi also argues in its opposition that a ruling on preemption is premature because it has appealed (in a related case) the issue of whether a PRP with a claimed defense to CERCLA liability may wield joint and several liability. However, the Ninth Circuit has subsequently upheld this court's interpretation of PRP status. See People of the State of California v. M & P Invs., 83 Fed.Appx. 895, 895 (9th Cir.2003) (unpublished memorandum).

12 . See California v. M & P Invs., 213 F.Supp.2d 1208, 1217 (E.D.Cal.2002), aff'd in part, dismissed in part on juris, grounds, 46 Fed. Appx. 876 (9th Cir.2002)(mem. unpublished decision).

13 . The court notes that several months ago the DTSC took action to initiate remediation. On May 30, 2003, the DTSC issued an "Imminent and Substantial Endangerment Determination and Order and Remedial Action Order” (the "RAO”) to eight entities, seven of which are defendants in the M & P case. The RAO requires each entity to conduct an extensive set of investigations and implement appropriate removal actions or face penalties of up to $25,000 per day. The DTSC apparently has assumed a degree of authority that it previously delegated to Lodi, though the court makes no findings in this regard.

14 . Transtech Indus., Inc. v. A & Z Septic Clean, 798 F.Supp. 1079, 1082 (D.NJ.1992), appeal dismissed, 5 F.3d 51 (3d Cir.1993), cert. denied, 512 U.S. 1213, 114 S.Ct. 2692, 129 L.Ed.2d 823 (1994).

15 . Lincoln Properties, Ltd. v. Higgins, 823 F.Supp. 1528, 1537 (E.D.Cal.1992).

16 . The relevant portion of Lodi's admission in open court reads as follows:

MR. DONOVAN: [I]f the question is, does the City of Lodi fall within the definition of a party under 107(a) without regard to any other statutes ... the answer would be yes.

(Rep. Tr., Feb. 28, 2003 inM & P, atp. 71:11— 14.)

In later colloquies and arguments to the court Lodi has sought to limit its admission. (See Joint Pretrial Statement, filed Nov. 14, 2003 in M & P, at 44-45.) However, Lodi's admission has not been subsequently limited by the court.

17 . As a result of Lodi's PRP admission, the court ruled in M & P that Ninth Circuit authority precluded it from imposing preliminary injunctive relief on other alleged potentially responsible parties. (See Mem. and Order, filed Mar. 31, 2003, in AÍ & P, at 17-18.)

18 . The "area of contamination" has been defined by the DTSC as an area within the City of Lodi, California, that is "bordered approxi mately by the Mokelume River to the north, Beckman Road to the east, Harney Lane to the south, and Mills Avenue to the west and the surrounding commercial and residential area from which Hazardous Substances have been, or are threatened to be, released or where Hazardous Substances have or may come to be located.” (Cooperative Agreement, Section IV.(K), in Ex. D to Hixson Decl., at 4.) In addition, Lodi's complaint in the M & P case provides a broad definition of "site," which includes “the environment at, around and in the vicinity of Lodi’s central business district and peripheral commercial and residential community.” (Compl. in M & P, ¶3.)

19 . Lodi's recent version of compartmentalized "regions” of contamination is at odds with two definitions it has previously utilized to describe the same hazardous waste site. Specifically, the definition used in the Cooperative Agreement, which gave rise to Lodi’s "lead enforcement” role, defines the “site” broadly without reference to distinct “regions” or "plumes” of contamination. {See Cooperative Agreement, Section IV.(K), in Ex. D to Hixson Decl., at 4) (quoted supra note 16.) Similarly, Lodi’s complaint in the M & P case does not describe distinct "regions” of contamination. {See Compl. in M & P, ¶ 3) (quoted supra note 16.)

20 . CERCLA section 113(f)(2)-(3), 42 U.S.C. §§ 9613(f)(2)-(3), provides in relevant part:

(2) Settlement

A person who has resolved its liability to the United States or a State in an administrative or judicially approved settlement shall not be liable for claims for contribution regarding matters addressed in the settlement. [...]

(3) Persons not party to settlement

(A) If the United States or a State has obtained less than complete relief from a person who has resolved its liability to the United States or the State in an administrative or judicially approved settlement, the United States or the State may bring an action against any person who has not so resolved its liability.

(B) A person who has resolved its liability to the United States or a State for some or all of a response action or for some or all of the costs of such action in an administrative or judicially approved settlement may seek contribution from any person who is not party to a settlement referred to in paragraph (2). [...]

42 U.S.C. §§ 9613(f)(2)-(3).

21 . In M & P, the court previously analyzed whether the Cooperative Agreement could be introduced by defendant Guild Cleaners, Inc. ("Guild”) in order to prove Lodi’s liability for environmental contamination and, consequently, preclude Lodi from imposing joint and several liability. The court rejected "Guild’s attempt to use the language of the Cooperative Agreement to prove the City’s PRP status” because it ran "counter to Rule 408 and violates the strong public policy favoring negotiated resolution of disputes.” (Mem. and Order, filed Dec. 31, 2002 in M & P, at 21) (emphasis in original.) On March 31, 2003, the court vacated the December 31, 2002, decision based upon Ninth Circuit authority precluding Lodi from imposing joint and several liability through preliminary in-junctive relief following its admission of PRP status. (See Mem. And Order, filed Mar. 31, 2003 in M&P, at 19.)

22 .Rule 408 provides:

Evidence of (1) furnishing or offering or promising to furnish, or (2) accepting or offering or promising to accept, a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount. Evidence of conduct or statements made in compromise negotiations is likewise not admissible. This rule does not require the exclusion of any evidence otherwise discoverable merely because it is presented in the course of compromise negotiations. This rule also does not require exclusion when the evidence is offered for another purpose, such as proving bias or prejudice of a witness, negativing a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution.

Fed.R.Evid. 408.

23 . Under California Health and Safety Code section 25355.5(a)(1)(C), the DTSC has authority to enter into "agreements” with PRPs that "require[] the party to take necessary corrective action to remove the threat of the release, or to determine the nature and extent of the release and adequately characterize the site, prepare a remedial action plan, and complete the necessary removal or remedial actions, as required in the approved remedial action plan.” Cal. Health & Safety Code § 25355.5(a)(1)(C); see Fireman's Fund, 302 F.3d at 935 n. 6.

24 . CERCLA’s PRP cost allocation scheme- creates an incentive to settle before litigation because all CERCLA defendants are generally . jointly and severally liable and, as a result, non-settlors must make up the difference between the settlor's resolved liability alid the remaining liability since the potential liability of the others is reduced "by the amount of settlement,” not by the settlor's proportionate share of damages it caused. See In re Acushnet River & New Bedford Harbor, 712 F.Supp. 1019, 1027 (D.Mass.1989)

25 .Several district court decisions have reached the same result. See Signature Combs, Inc. v. United States, 248 F.Supp.2d 741, 747 (W.D.Tenn.2003) (plaintiffs entering into consent decrees with United States and Arkansas without admitting liability were PRPs because (1) they were compelled to pay for hazardous waste cleanup and (2) continued to be subject to fines and penalties and, thus, were limited to contribution claims under CERCLA as joint tortfeasors); United States v. Compaction Sys. Corp., 88 F.Supp.2d 339, 351 (D.N.J.1999) (party limited to contribution claims after entering into consent decree with the United States because, by agreeing to incur substantial costs for its own liability, party satisfied liability requirements of CERCLA section 107(a) and, consequently, was considered a joint tortfeasor); Borough of Sayreville v. Union Carbide Corp., 923 F.Supp. 671, 679 (D.N.J.1996) (plaintiff, an admitted PRP, limited to contribution claims and could not rely upon settlement agreement with state environmental agency to assert CERCLA section 107(a) cost recovery claims); Transtech, 798 F.Supp. at 1086 (“The clear import of [CERCLA section 113(f)(1)] ... is to allow persons situated like plaintiffs in this case to gain reimbursement for their clean-up expenditures from other PRPs — the point of Section 113(f)(1) is to share the costs among the blameworthy parties.”).

26 . See Centerior, 153 F.3d at 352 (PRP that has been compelled to pay for response costs for which others are also liable and then seeks to recover "reimbursement for such costs” is limited by section 113(f)(1) to contribution claims); Halliburton, 111 F.3d at 1124 n. 8 ("Application of section 113 does not rest upon a finding of liability, however; a potentially responsible person who has 'resolved its liability to the United States' in a 'judicially approved settlement’ may seek contribution.”) (citing CERCLA § 113(f)(3)(B), 42 U.S.C. § 9613(f)(3)(B)).

27 . See Signature Combs, 248 F.Supp.2d at 747 (settling plaintiffs were PRPs limited to con tribution claims under CERCLA as joint tort-feasors); Compaction, 88 F.Supp.2d at 351 (party limited to contribution claims after entering into consent decree with the United States); Borough of Sayreville, 923 F.Supp. at 679 (plaintiff, an admitted PRP, could not rely upon settlement agreement to assert cost recovery claims); cf. Centerior, 153 F.3d at 351 (plaintiffs compelled by EPA could not assert cost recovery claims because plaintiffs had acted under legal compulsion and were thus PRPs limited to contribution claims); Tran-stech, 798 F.Supp. at 1086 (CERCLA section 113(f)(1) governs cost allocation claims among liable parties).

28 . The Cooperative Agreement obligated Lodi to pay $450,000 to the DTSC within 30 days of entering the Agreement to cover DTSC's past response costs “arising from or related to” the contamination site. (Cooperative Agreement, in Ex. D to Hixson Decl., at 6.) Lodi is also liable to DTSC for up to $1,024,649.55 in past and future response costs, to the extent Lodi cannot recover those from funds from other PRPs. {Id. at 7.) In addition, if Lodi is unable to compel other PRPs to commence remedial work within 24 months from the effective Date of tire Cooperative Agreement, Lodi is required to “promptly undertake in the first instance, at its Sole Cost and in the sole discretion of the DTSC,” certain "interim work.” {Id. at 6-7) (emphasis in original.)

29 . As a third ground for proving Lodi’s status as a PRP, plaintiff offers evidence that allegedly demonstrates Lodi released hazardous substances into the environment from its sewers. Because the court has already found Lodi's admission and the Cooperative Agreement establish Lodi's PRP status, the court does not address plaintiff's evidence of alleged releases from Lodi's sewers as a separate basis for PRP status.

30 . In the related litigation matters, Lodi has filed eight appeals to the Ninth Circuit and two petitions to United States Supreme Court.

31 . MERLO § 8.24.090(D)(4)(b) provides:

A person who has resolved its liability imposed pursuant to this chapter to the city for some or all of an abatement action or other obligation imposed pursuant to this chapter or for some or all of abatement action costs in an administrative or judicially approved settlement may seek contribution pursuant to the general laws of the state of California from any person who has not obtained valid contribution protection for some or all of the liability imposed under this code or pursuant to federal law or the general laws of the state of California.

MERLO § 8.24.090(D)(4)(b) (emphasis added).

32 . Transtech, 798 F.Supp. at 1082.

33 . Congress did not intend municipalities to recover their response costs pursuant to CERCLA’s government cost recovery provision, section 107(a)(4)(A), 42 U.S.C. § 9607(a)(4)(A), because CERCLA's definition of "state” does not include municipalities. City of Philadelphia v. Stepan Chem. Co., 713 F.Supp. 1484, 1488 (E.D.Pa.1989) ("CERC-LA’s definition of the term 'state' does not include the word 'municipality.' The entities that are included — states, the District of Columbia, Puerto Rico, Guam, Samoa, the Virgin Islands, the Marianas, and United States territories and possessions — differ so vastly from villages, towns, boroughs, townships, counties, and cities as to be words of exclusion. Even accepting the broad remedial purpose of CERCLA, there is simply nothing in the statute to suggest that Congress intended to allow municipalities to recover their response costs by proceeding under section 107(a)(4)(A) rather than by proceeding as a private party under section 107(a)(4)(B).”); see 42 U.S.C. § 9601(27); City of Toledo v. Beazer Materials and Servs., Inc., 833 F.Supp. 646, 651-52 (N.D.Ohio 1993) (relying upon Stepan to conclude municipalities are not "states” under CERCLA).

34 . The Ninth Circuit also noted that it "did not interpret the Cooperative Agreement to allow Lodi to recover its attorney’s fees, nor do we necessarily believe that it could bestow on Lodi the right to recover all of its attorney’s fees under the circumstances of this case.” Fireman's Fund, 302 F.3d at 953.

35 . As an example, both this court and the court of appeals have had considerable difficulty reigning in Lodi's counsel’s insatiable appetite to file briefs that far exceed reasonable page limits.

36 .The Ninth Circuit noted MERLO's definition of "action abatement costs” reflected a Lodi strategy to recover "costs related to a financing scheme upon which it has embarked in order avoid municipal finance mechanisms that would make Lodi's ratepayers responsible (at least initially) for principal and interest costs.” Firemans Fund, 302 F.3d at 954.

37 . 511 U.S. 809, 114 S.Ct. 1960, 128 L.Ed.2d 797 (1994).

38 . See Fireman’s Fund, 302 F.3d at 950.

39 . In its request for reconsideration of the Magistrate Judge's ruling relating to documents regarding the financing of Lodi's litigation in the M & P case, non-party Lehman Brothers, Inc. stated: "Lehman invested solely out of a desire to profit from its investments.” (Non-Party Lehman Brothers, Inc.’s Req. for Reconsideration by the Dist. Ct. of Mag. Judge’s Ruling, filed May 19, 2003 in M & P, at 7) (emphasis added.)

40 . Despite the rulings above, the court finds that the unchallenged portions of MERLO remain valid because the invalid provisions are easily severable from the remainder of the ordinance, and MERLO § 8.24.090(A) contains a severability clause, which provides:

If any provision of this chapter or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the chapter which can be given effect without the invalid provision or application. To this end, the provisions of this chapter are severable. The city council declares that it would have adopted the ordinance codified in this chapter irrespective of the invalidity of any particular portion thereof.

MERLO § 8.24.090(A); see Fireman’s Fund, 302 F.3d at 957.