SCOTUS to Resolve Circuit Split Regarding CERCLA Liability

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On January 8, 2021, the Supreme Court of the United States (SCOTUS) granted the Government of Guam’s petition for a writ of certiorari in a Superfund cost recovery case in which Guam faces a $160 million cleanup bill for a landfill leaking toxic waste at a site that the U.S. Navy created in the 1940s. The case, Government of Guam v. United States, Docket No. 20-382, presents two longstanding circuit splits before SCOTUS, which address CERCLA’s settlement provisions and their impact on a settling party’s ability to share cleanup costs with other responsible parties.

The conflict arises out of two CERCLA provisions that permit a party to recoup cleanup costs from another responsible party. Section 113(f)(3)(B) of CERCLA allows a responsible party that has resolved its liability to the United States or a state in a settlement to “seek contribution” from other responsible parties. Once a settlement triggers this section of CERCLA, it bars an otherwise available claim for recoupment under CERCLA’s Section 107(a), because Section 113(f)(3)(B) has a shorter statute of limitations.

Guam v. U.S. addresses two splits over when a settlement triggers Section 113(f)(3)(B). First, there is a circuit split over whether a non-CERCLA settlement can trigger a CERCLA contribution claim under Section 113(f)(3)(B). Next, the circuits are also divided over whether a settlement that explicitly disclaims a determination of liability and leaves the settling party exposed to future liability can trigger Section 113(f)(3)(B).

In Guam, the site at issue was under exclusive control of the U.S. Navy in the 1940s, which created a dump for the disposal of municipal and military waste. The waste was not contained and ultimately flowed into the Pacific Ocean. Although the United States transferred ownership of the site to Guam in 1950, it continued to use the dump for decades thereafter. The site was added to the Superfund list in 1983; however, in 1988 the EPA declined to remediate the site under CERCLA, instead determining that the Clean Water Act was more appropriate, which insulated the U.S. from cleanup responsibilities. Eventually the parties entered into a consent decree in 2004, which required Guam to pay penalties and remediate the site.

Faced with financial constraints arising out of the consent decree, Guam sued the United States in 2017 for cost recovery under CERCLA Section 107(a), and contribution under CERCLA Section 113(f)(3)(B). The United States moved to dismiss the complaint arguing that the consent decree triggered a contribution claim that was time-barred, and that the cost recovery claim should be dismissed because the contribution claim was Guam’s exclusive remedy under CERCLA. The district court determined that the consent decree did not resolve liability within the meaning of a CERCLA contribution claim, and as a result, Guam could pursue the cost recovery claim as well. The D.C. Circuit granted interlocutory review and reversed, holding that Section 107(a) and 113(f) are mutually exclusive, and that a party who may bring a contribution claim must do so, even if a cost recovery action would be otherwise available. The appellate court also rejected the district court’s conclusion that the consent decrees express disclaimer of liability, conditional release of claims, and reservation-of-rights clauses precluded a finding that it resolved Section 113(f)(3)(B) liability.

Therefore, SCOTUS had a compelling reason to grant certiorari in this case because in addition to addressing the harsh result of the consequence of the 2004 consent decree between Guam and the United States, the decision of the high court could seek to promote settlements that provide a measure of finality and clarity as to the extent of any potential future CERCLA liability.