Amicus Curiae Brief — Cooper Industries, Inc. v. Aviall Services, Inc.

Supreme Court, U.S

FILED

APR 8 = 70104

yr ™

wa”

No. 02-1192 —

Inu the Supreme Court of the United States

COOPER INDUSTRIES, INC., Petitioner,

Vv.

AVIALL SERVICES, INC., Respondent.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

BRIEF FOR ATLANTIC RICHFIELD COMPANY,

BLUEWATER NETWORK, FEDERAL MOGUL

CORP., CRANE CO., LFR, INC., THE SOURCE

GROUP, INC., AND GEOQMATRIX CONSULTANTS,

INC. AS AMICI CURIAE SUPPORTING RESPONDENT

ALBERT M. COHEN JOEL M. GROSS

SMILAND & KACHIGIAN Counsel of Record

601 South Fifth Street THOMAS H. MILCH

Seventh Floor THOMAS I. ANDERSON

Los Angeles, CA 90071 ARNOLD & PORTER LLP

(213) 891-1010 555 Twelfth Street, N.W.

Washington, D.C. 20004

(202) 942-5000

Attorneys for Amici Curiae

ATLANTIC RICHFIELD

COMPANY, ET AL.

am

TABLE OF CONTENTS

EIU R Eee Ss OF ARGICT CURIA .ncccccccccccsccccssccsscnssecssesessosssocosees |

DURGA Gi ARIIUIGIIING ccccccsccscosesscvsscssscscovsevssssscsssseoseess 2

I. THE POSITION ARGUED FOR BY

PETITIONER WOULD SUBSTANTIALLY

UNDERMINE THREE IMPORTANT POLICY

ee BEG Be Ce SDS cecncsreccsccrsccocscscscsecscencsnccencsees 4

A. The Enforcement Objectives of

IIIT caticisesitdaiiaeninssiceidbiaiescdsiddiguciaieindseepiensieniocnel 4

l. Encouraging Private Party Cleanup........ 5

2. Reducing Litigation and Transaction

- Ett nsicsanissctnnemantetetiidenesciapenbeisinterimninenenes 7

3. Facilitating Fairness.................:cssseeseeees 8

B. Petitioner's Position Undermines These

Se icnncisnesecsdussncitnnntasconeeseuianinastsenscenmmnenes 9

1. Voluntary Cleanup ..............:..s:sceseseee0+ 10

2. Respondents to Section 106 Orders......14

3. Demand Recipients ............cccccccesssssseeses 16

Il. PETITIONER’S INTERPRETATION IS

CONTRARY TO THE PLAN STATUTORY

Os GI Cet crectenieccccnsnnesencctenmenscensencnces 18

A. The Plain Language of CERCLA § 107............. 18

B. The Law Before and After SARA ..............:00004. 19

od The Effect of Section 113(f)...............0cc..s0000000 21

(i)

D. The United States’ Changing Position............... 22

E. Resolution of Sections 107 and 113 .................. 26

F. Distinction from Common Law

Cat... .ccccccoscsecssenctiitsesenniemaaa 28

COI FIG noccccococsccccenscnconsesentssentanssnseaiiaamaanee 30

(11)

TABLE OF AUTHORITIES

Page(s)

CASES

Amcast Indus. Corp. Vv. Detrex Corp.,

SS 18

263 F. 3d 134 (Sth Cir. 2001) .......ccccccccccccsesceseeeeeeeens 15

312 F. 3d 677 (Sth Cir. 2002).........ccccccccceceeeeeeee 15, 20

l _v. ] il Co.,

191 F.3d 409 (4th Cir. 1999)... cccccccccccseeeeeeen 21, 22

156 F. 3d 416 (2d Cir. 1998)... ccccccccccccscsceeeeeeeeeen 22

589 F. Supp. 1437 (S.D. Fla. 1984) ........ccccccccceeeee 19

Corp., 153 F.3d 344 (6th Cir. 1998)............. 21, 24, 25

441 U.S. 600 (1979) ....ccccccccccccccccscscsessesesesesssseseeeees 10

544 F. Supp. 1135 (E.D. Pa. 1982) .......cccccccecceeeseeees 19

608 F.Supp. 1484 (D. Colo. 1985) ..............cccccceeees 9

ST 10

Gniffin v. Ocew ic Contractors, Inc..,

EE 10

3 F.3d 889 (Sth Cir. 1993)... ccccccccccccccscscescereeseneens 17

115 F.3d 1111 (3d Cir. 1997) ...cccccccccccccceeseceeeeeeen 27

TT 3, 5, 18, 27

(iii)

302 F.3d 1127 (10th Cir. 2002)............cccccceceeeees 13, 28

Ni ete ee Ea

—_ US. 77 (1981) os arti 9

118 F.3d 1298 (9th Cir. ESTATES 21, 24

Rodriguez v. United States,

ail age iia See 19

San Francisco v. Assessment Appeals Bd.,

122 F.3d 1274 (9th Cir. 1997) .....c.cccccccceseseeceseseseevees 19

it v. -

572 F. Supp. 802 (S.D. Ohio ES 8

613 F.Supp. 1563 (D.R.L. 1985) ..........cccecccceseseeeeeeees 20

W. Props. Serv. Corp. v. Shell Oil Co.,

358 F. 3d 678 (9th Cir. 2004)..0......cccccccceceseseseeseeeeen 28

Watt v. Alaska,

Se aes 26

Wickland Oil Terminals v. Asarco, Inc.,

792 F. 2d 887 (9th Cir. 1986).............eceseceseceseeeeees 19

STATUTES

Small Business Liability Relief and Brownfields

Revitalization Act, Pub. L. No. 107-118, 115

SD, a cnnisnninicentnnncninenaniiitnaninineniaiieaiinnsl 6

Clean Air Act, 42 U.S.C. § 7604(€) .............cccccceccceseceeseeeenes 27

Comprehensive Environmental Response,

Compensation, and Liability Act (CERCLA),

fe passim

ee Be cnenccnnnsnnitaiennintenainiinn 11

ie Fe ricctsnrnsnnmmnteniniiiticitiuniniiidnainitinl 11

Ee 16

GGG Beceem enannsini 16

42 U.S.C. § 9607(a)(4)(A)-(B)....cccccceccescesseecessesseesesseeneeneeees 18

(iv)

42 U.S.C. § 9607(a)4)(B)...cccceccccccsvveessssssveseecsvereceseneeen 13, 26

eT arcrncrcssienininnstinnninccnpdeaamaimnnineninaateceas 16

a is Se rrnnsintscscneneranntesenneneeenmsemmiennn 21, 26

ee I ccrvensirstuntecenienenmpctennienninseempimmememes 28

NS EN 27

Sp pe i rorcenreenennnememnieemmcnmmemnemesenas 12

Uniform Comparative Fault Act ..................cceccecceseeceseeeeeees 15

Uniform Contribution Among Tortfeasors Act........ 15, 29-30

REGULATIONS AND

ADMINISTRATIVE MATERIALS

re Be Fe rerenenscennanentenensnenseianinseamennesnnes 14

50 Fed. Reg. 47,912, 47,934 (Nov. 20, 1985).............ccc00000 19

53 Fed. Reg. 51,394, 51,462 (Dec. 21, 1988) ..................00+. 14

55 Fed. Reg. 8666, 8792-93 (Mar. 8, 1990).............-eceeeee. 13

EPA, Documentation of Reason(s) for Not Issuing

CERCLA Section 106 UAOs to All Identified

PRPs (Aug. 2, 1996),

http://www.epa.gov/compliance/resources/

policies/cleanup/superfund/reason-cer 1 06-

EPA, Interim CERCLA Settlement Policy, 50 Fed.

I OU Oe 29

EPA, Interim Guidance on Orphan Share

Compensation for Settlors of Remedial

Design/Remedial Action and Non-Time-

Critical Removals (June 3, 1996),

http://www.epa.gov/compliance/resources/pol

icies/cleanup/superfund/orphan-share-rpt.pdf............ +

EPA, Model RD/RA Consent Decree (May 2001),

www.epa. gov/compliance/resources/policies/

cleanup/superfund/mod-rdra-cd.pdf.......................-.. 12

Notice of Availability of Final Draft Guidance for

Developing Superfund Memoranda of

Agreement (MOA) Language Concerning

State Voluntary Cleanup Programs, 62 Fed.

Reg. 47,495 (Sept. 9, 1997)....cc.ccccccsssssssseveesseee

LEGISLATIVE MATERIALS

CG GO, GE. BE eee Ce ccnsscccsnensernsnsmnssseesensssesessese

Comm. on Public Works and Transp., 99th Cong.,

|” “ESB eal TP eA

H.R. Doc. No. 99-32, at 73 (1985)...ccccccccccssssssssssseeeseeen

H.R. Rep. No. 99-253, pt. 1, at 80 (1985) ....cccccccssssese-

H.R. Rep. No. 253, 99th Cong., at 18-19 (1985)...........

Reauthorization of Superfund, Hearings Before the

House Subcomm. on Water Res. of the

Comm. on Public Works and Transp., 99th

Se

S. Rep. No. 99-11, af 44 (1985) ...............ccccseccoccesseserees

Se a, Gee G8 BP Ge cercrennenseemmnneen

Oversight Hearings Before the House Subcomm. on

Admin. Law and Governmental Relations,

Comm. on the Judiciary, 99th Cong., 51

Superfund Improvement Act of 1985, Hearing

Before the Senate Comm. on Env't and Public

Works, 99th Cong., at 52-53 (1985)...

Superfund Reauthorization: Judicial and Legal

Issues, Oversight Hearing before the House

Subcom. on Admin. Law and Governmental

Relations, Comm. on the Judiciary, 99th

SG "ER aid ReneS

MISCELLANEOUS

Environmental Law Institute, An Analysis of State

Superfund Programs, 34 (2002)...

Inside EPA Environmental Policy Alert, Aviall May

Divert Superfund Enforcement Fund, EPA

Official Says (February 4, 2004) o.0...0....cccccccccsese.

Prosser, Law of Torts § 50 (4th ed. 1982)..0.00...-ccccccesse.

(vii)

ju the Supreme Court of the United States

COOPER INDUSTRIES, INC., Petitiorer,

Vv.

AVIALL SERVICES, INC., Respondent.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

BRIEF FOR ATLANTIC RICHFIELD COMPANY, ET

AL. AS AMICI CURIAE SUPPORTING RESPONDENT

INTEREST OF AMICI CURIAE’

Amici have diverse interests in cleanup of contaminated

property under the Comprehensive Environmental Response,

Compensation, and Liability Act (“CERCLA”), 42 U.S.C.

9601 et seq., but all share the view that CERCLA should be

interpreted to encourage and not penalize responsible parties

who step forward to undertake prompt and environmentally

protective cleanups of contaminated sites. All share an

interest in an interpretation of CERCLA that is consistent

with its language and purpose and the long-standing policy

and practice of the United States Environmental Protection

Agency (“EPA”).

' In accordance with Rule 37.6, amici curiae ify that counsel for a

party did not author this brief in whole or in part that no entity other

than the amici, their members, or their counsel made a monetary

contribution to the preparation or submission of the brief.

Atlantic Richfield Company, Federal Mogul Corporation

and Crane Company are potentially responsible parties at

numerous CERCLA sites, and have frequently expended

funds to clean up contaminated property in reliance on the

right to seek contribution from other responsible parties

under CERCLA. Accordingly, these corporations have a

substantial interest in prompt, efficient and effective

cleanups under CERCLA, without the requirement of

unnecessary litigation, and in the availability of contribution

for responsible parties who have incurred cleanup costs.

Amicus Bluewater Network is an _ environmental

organization with membership throughout the United States

dedicated to championing innovative solutions and inspiring

individuals to protect the earth's finite and vulnerable

ecosystem. It and its members have an interest in ensuring

that responsible private parties will continue to undertake

cleanups of contaminated sites that protect the environment.

Amici LFR, Inc., the Source Group, Inc., and Geomatrix

Consultants, Inc. are engineering and consulting firms that

regularly conduct and oversee cleanup of contaminated

properties under CERCLA. They have a substantial concern

that the position advanced by Petitioner could result in a less

efficient cleanup process under CERCLA.

SUMMARY OF ARGUMENT

The overarching objective of CERCLA is to facilitate the

prompt cleanup of contaminated sites at which there have

been releases of hazardous substances, so as to protect

human health and the environment. CERCLA Sections

107(a) and 113(f) encourage private persons to undertake

prompt cleanup action by allowing persons who incur

cleanup costs to seek contribution from parties who also

have liability for contamination at the site, but who have not

acted in the same timely manner. Petitioner argues that

contribution should only be available to persons who wait for

the government to bring an enforcement action against them,

or who have settled with the government. If this position

were adopted, it would severely undermine CERCLA’s core

objectives by discouraging private parties from undertaking

prompt, high-quality cleanups of contaminated sites. It

would instead encourage those parties to-delay cleanup until

the government files suit, so that they do not lose their ability

to seek cost recovery or contribution from any other parties

who may be liable for cleanup costs at the same site. This

would lead to unnecessary litigation, which would both

divert scarce governmental resources from more pressing

needs and increase the cost of the Superfund process for

parties who have, until now, been willing to undertake

cleanups without litigation. And the result would

compromise the overall fairness of the CERCLA liability

scheme by penalizing those who undertake cleanups

voluntarily and rewarding those who do not.

Not only is Petitioner’s position at odds with the

objectives of CERCLA, it is also at odds with the statute’s

specific terms. When viewed in the context of the entire

statute, this interpretation is premised on a tortured reading

of CERCLA, which ignores the plain language of Section

107 allowing any private party who undertakes cleanup to

recover costs from other liable parties. It is also at odds with

this Court’s decision in Key Tronic Corp. v. United States,

511 U.S. 809, 812 (1994), which makes clear that private

parties undertaking cleanup can rely on Section 107 and that

Sections 107 and 113 must be read together. A review of the

history of the these provisicns demonstrates quite clearly that

Congress was seeking to create a broad cost recovery and

contribution scheme, not the very narrow and wholly

illogical one argued for by Petitioner.

Further, the position taken here by the United States as

amicus is both incorrect as a matter of law, and also directly

contrary to positions it has taken again and again in briefs,

including to this Court, in regulations, and in other public

pronouncements.

Accordingly, the Court should “affirm the en banc

decision of the Fifth Circuit, which is fully consistent with

4

both the words Congress wrote and the objectives it sought

to achieve in enacting and amending CERCLA.

ARGUMENT

I. THE POSITION ARGUED FOR BY

PETITIONER WOULD SUBSTANTIALLY

UNDERMINE THREE IMPORTANT POLICY

OBJECTIVES OF CERCLA

A. The Enforcement Objectives of CERCLA

In 23 years since CERCLA’s enactment, three

fundamental goals have provided the basis for EPA’s

implementation of the statute, and each of these goals is

reinforced repeatedly in the text of the statute, its legislative

history, and judicial decisions. These three goals have been

(1) to promote rapid and effective cleanup of contaminated

property by private parties, (2) to provide greater fairness in

the joint and several liability scheme of CERCLA, and (3) to

reduce litigation and transaction costs. See, e.g., EPA,

Interim Guidance on Orphan Share Compensation for

Settlors of Remedial Design/Remedial Action and Non-

Time-Critical Removals (June 3, 1996), http://www.epa.gov/

compliance/resources/policies/cleanup/superfund/orphan-

share-rpt.pdf (stating that goals of enforcement policy reform

are “to provide greater fairness, reduce litigation and

transaction costs, and promote private party cleanup of

Superfund sites.”). Each of these three goals, long

recognized as integral parts of the statutory purpose, would

be substantially undermined if Petitioner's narrow

interpretation of CERCLA contribution rights were accepted

by this Court.

In this section, we first expand on each of these three

purposes and its fundamental importance to the effective

implementation of CERCLA, and then demonstrate how

each would be severely harmed if Petitioner’s interpretation

of the statute were adopted.

1. Encouraging Private Party Cleanup

Of the three CERCLA enforcement purposes discussed

here, promoting prompt and effective cleanup of sites by

private parties is in many ways the most important, because

cleanup of contaminated sites is why CERCLA exists. And

it is no surprise that this purpose has been reiterated again

and again, because Congress emphasized the importance of

encouraging private party cleanup in the initial 1980

enactment of CERCLA by clearly providing for recovery of

response costs by private parties under Section 107. See Key

Tronic, 511 U.S. at 816.

Congress also emphasized the goal of encouraging

private party cleanup when debating the 1986 SARA

amendments, which amended CERCLA Section 113 to

expressly provide a right of contribution. Legislative

sponsor Representative Lent stated: “I am especially proud

of a key groundbreaking structural reform that will

encourage responsible parties to come forward and take

responsibility for cleaning up the toxic waste sites they

helped create.” 131 Cong. Rec. 16573 (1985). The House

Report states that a goal of the new provisions is to

“encourage private party settlements and cleanups.” H.R.

Rep. No. 99-253, pt. 1, at 80 (1985).

During Congressional hearings on the SARA

amendments, Assistant Attorney General Habicht also

articulated the importance of encouraging private party

cleanups and encouraging persons to undertake cleanup

without an EPA enforcement lawsuit:

As the Government’s goals in this enforcement

process become clear, we’re confident that the

reasonable parties around the country, who’ve already

demonstrated a recognition of what the rules are and

what the goals of the Government are, will come

forward and will become participants in the cleanup

process.

Reauthorization of Superfund, Hearings Before the House

Subcommittee on Water Res. of the Comm. on Public Works

6

and Transp., 99th Cong. 549 (1985) (“Water Resources

Hearings”). :

Congress recently reemphasized the goal of encouraging

private party cleanup when it passed the Small Business

Liability Relief and Brownfields Revitalization Act. See

Pub. L. No. 107-118, 115 Stat. 2356 (2002). These

amendments to CERCLA sought, among other things, to

stimulate voluntary cleanup programs at the state and local

level by providing grants to facilitate private party cleanup of

so called “brownfield” sites, contaminated properties with

the potential for productive reuse and development. Id. at

§ 211. The Senate committee report accompanying this

legislation recognized the significance of voluntary cleanup

to the overall contaminated property problem, observing that

“(t]he vast majority of contaminated sites across the Nation

will not be cleaned up by the Superfund program.” S. Rep.

No. 107-2, at 15 (2001).

That same Senate committee report referred with

approval to existing EPA policy for reaching Memoranda of

Agreement (“MOA”) with states on voluntary cleanup

programs. Id. In 1997 guidance on drafting MOA with

states, EPA clearly indicated its belief that the availability of

contribution under CERCLA was an important component of

voluntary cleanup programs. See Notice of Availability of

Final Draft Guidance for Developing Superfund Memoranda

of Agreement (MOA) Language Concerning State Voluntary

Cleanup Programs, 62 Fed. Reg. 47,495 (September 9,

1997). The guidance demonstrates EPA’s position that a

private party taking action under a state voluntary cleanup

program can bring a contribution claim against other liable

parties under CERCLA Section 113, as long as cleanup

complied with the National Contingency Plan (“NCP”): “The

MOA should make clear to any private party that recovery of

response costs under CERCLA will require that the cleanup

action meet the requirements outlined in the National

Contingency Plan.” Id. at 47,499.

As this EPA guidance indicates, a broad right of

contnbution is essential for encouraging safe and effective

private party cleanup of CERCLA sites. As with the other

policy objectives discussed here, this goal is not new. The

necessity of broad contribution was emphasized when

President Reagan transmitted his administration’s proposed

Superfund amendment bill, a precursor to SARA, to

Congress in 1985. In the explanatory material

accompanying the bill, it was acknowledged that “[p]rivate

parties may be more willing to assume the financial

responsibility for cleanup if they are assured that they can

seek contribution from others.” H.R. Doc. No. 99-32, at 73

(1985).

2. Reducing Litigation and Transaction Costs

Reducing litigation and transaction costs has long been

another important objective of the CERCLA enforcement

scheme. During hearings that led to the SARA amendments

in 1986, members of Congress expressed concern about the

rising legal and transaction costs of the Superfund program.

For example, there was the following exchange between

Senator Simpson and Assistant Attorney General Habicht:

Senator Simpson: On this question of transaction

costs at sites, which is the lovely phrase which I guess

refers to legal and other fees expended during the

process, transaction costs, are we seeing the point that

legal fees are greater than cleanup costs at some of

those sites already? If that is so, is that a good use of

our national resources, and what does it imply about

the success of Superfund if that is happening.

Mr. Habicht: Senator, I don’t have the exact costs of

the litigation. I think it is absolutely fair to say, and |

feel strongly and I know it represents the

administration’s view, that litigation is not the most

desirable way of resolving issues... .

Superfund Improvement Act of 1985, Hearing Before the

Senate Comm. on Env’t and Public Works, 99th Cong., at

52-53 (1985).

This theme is repeated throughout the SARA legislative

history. For example, Mr. Habicht also testified that the

success of the Superfund enforcement program rested in part

on its ability to “discourage unnecessary and costly

litigation.”” Superfund Reauthorization: Judicial and Legal

Issues, Oversight Hearing before the House Subcom. on

Admin. Law and Governmental Relations, Comm. on the

Judiciary, 99th Cong., 38 (1985). Furthermore, the views

expressed by the Administration were shared by

congressional sponsors of the legislation, such as

Representative Lent, who described the House bill as one

“that will take the toxic waste cleanup effort out of the

courtrooms of America and to the abandoned waste sites

where it belongs.” 131 Cong. Rec. 16573 (1985).

3. Facilitating Fairness

The government has long argued that CERCLA can

impose liability that is joint and several, and that the

government can seek to hold a subset of the potentially liable

parties at a site responsible for all of the cleanup costs. See,

United States v. Chem-Dyne Corp., 572 F. Supp. 802 (S.D.

Ohio 1983). While the government has argued that joint and

several liability, while not explicitly set out in the statute, is

necessary to achieve programmatic goals, there has also been

a recognition that a broad night of contribution was necessary

for a fair enforcement process. Assistant Attorney General

Habicht emphasized in his Congressional testimony on

SARA that “an enforcement process has to be fundamentally

fair.” | Water Resources Hearing at 546. In other

Congressional testimony, Mr. Habicht elaborated on the

centrality of contribution nights to the statute’s fairness,

“ While a broad night of contribution could, in theory, also increase

litigation, the expectation is that most contribution claims can be

resolved without protracted litigation. If some litigation is necessary to

fairly allocate cleanup costs between numerous responsible private

parties, such litigation furthers the overall goals of CERCLA with little,

if any, added expense to the government.

[eee ese ee 882 7 €& | eee eee

9

stating very simply: “[t]he fairness of a joint and several

liability scheme depends upon the clear availability of

contribution.” Oversight Hearings Before the House

Subcomm. on Admin. Law and Governmental Relations,

Comm. on the Judiciary, 99th Cong. 51 (1985).

Similarly, judicial decisions have long recognized the

importance of contribution to the fairness of a joint and

several liability scheme. For example, in Oo V.

ASARCO, Inc., 608 F. Supp. 1484 (D. Colo. 1985), a

decision that preceded the 1986 SARA amendments adding

Section 113(f), the district court found that there was a right

to contribution under CERCLA and that such a right was

essential to the fairness of the liability scheme created. The

court cited Dean Prosser’s recognition that, “contribution is

an integral component of joint and several liability.” Id. at

1490 (citing Prosser, Law of Torts § 50 (4th ed. 1982)). The

court in ASARCO also cited this Court’s recognition of the

fairness of allowing contribution among parties who have

joint and several liability. Id. (citing Northwest Airlines, Inc.

v. Transport Workers Union of Am. 451 U.S. 77 (1981)).

B.

The interpretation argued for by Petitioner would result

in a CERCLA enforcement scheme that substantially

diminishes incentives for voluntary cleanups by private

parties, increases litigation costs, and is less fair. The United

States does not dispute these points, but instead contends (at

pp. 26-28) that, given what it perceives as clear statutory

language, these arguments should be made to Congress in

the context of a possible legislative enhancement, not to this

Court in deciding the interpretation of the existing statute.

But in interpreting the statutory language, the overarching

objectives of the statute are of great significance. It is a

black Jetter rule of statutory construction that a statute should

not be interpreted in a manner that would be irrationally at

odds with the very purposes of the statute. See, e.g.,

v. Engle, 464 U.S. 206, 217

(1984) (“Our duty then is ‘to find that interpretation which

10

can most fairly be said to be imbedded in the statute, in the

sense of being most harmonious with its scheme and with the

general purposes that Congress manifested.’”); Gniffin_v.

Oceanic Contractors, Inc., 458 U.S. 564, 575 (1982) (“It is

true that interpretations of a statute which would produce

absurd results are to be avoided if alternative interpretations

consistent with the legislative purpose are available.’’);

Chapman v. Houston Welfare Rights Org., 441 U.S. 600,

608 (1979) (“As in all cases of statutory construction, our

task is to interpret the words of [the statute] in light of the

purposes Congress sought to serve.”). Petitioner’s view of

the statute is exactly such an irrational interpretation.

In examining the effect of Petitioner’s position—that

contribution is only available under CERCLA to parties who

have been sued or who have settled with EPA—it is useful to

consider three very different contexts where this

interpretation would produce absurd results that could not

possibly have been intended by Congress.

1. Voluntary Cleanups

The first category is the type of situation presented by the

facts of this case: a party that cleans up a site without first

being sued by the United States to undertake the cleanup.

Such a cleanup might be undertaken by a private party for

any number of reasons: the party knows it is liable for some

part of the contamination and desires to promptly reduce

risks to human health or the environment; the party desires to

conduct the cleanup before the situation is exacerbated by

contaminant migration or the passage of time; the party

desires to avoid liabilities to third parties who may be

affected by migrating contamination; or the party wants to

take advantage of incentives available for participation in a

State voluntary cleanup program. All of these reasons reflect

goals that were specifically articulated by Congress and

reinforced by EPA policy, and they all support CERCLA’s

ultimate goal of achieving prompt cleanup. Yet in all of

these situations, the party undertaking cleanup would, in

11

Petitioner’s view, have no ability to recover its costs or seek

contnbution from other liable parties under CERCLA.

Such a result is on its face not fair. The party doing the

cleanup may have been only a small contributor to the

environmental conditions at the site, or may have liability as

the present site owner without having contributed to the

contamination at all.’ Yet despite the fact that there may be

other clearly liable and viable parties from whom

contribution for the cleanup costs could be sought, under

Petitioner’s view the party actually doing the cleanup has no

ability to sue those other parties. The entire costs of the

cleanup would fall on the party who voluntarily remediates

the site, and the other parties could escape responsibility

altogether. This may be an example of the expression “no

good deed goes unpunished.” It is certainly not an example

of a fair enforcement scheme.

Petitioner’s interpretation would also inevitably result in

an increase of litigation and transaction costs. A party who

wants to preserve its contribution rights would have a strong

incentive to wait to do the cleanup until it has been sued, at

which point both it and the government would have to incur

legal costs. The government would be forced to use its

scarce resources to develop a case and be prepared to litigate

it, and a party that was willing to do the cleanup without

government compulsion would be forced to wait for

litigation before taking any cleanup action. While it might

seem that the litigation would be simple, and settlement

would quickly follow, experience teaches that such litigation

is rarely simple, and once it commences the interest of the

> Present owners of contaminated sites are often liable for those sites

even if their actions did not contribute to the contamination in any way.

While there are defenses to liability available for some owners of

contaminated property, those defenses are not always viable, even for

owners who have done nothing to contribute to the contamination. See

42 U.S.C. §$§ 9601 (35), (40).

Although a state remedy might be available, that option is limited, as

discussed further in Sectica LB-2, note 7, infra.

12

government and all parties to protect their legal positions can

lead them down a road far away from, not toward, cleanup

and settlement. Petitioner’s interpretation would compel the

government to litigate against defendants who simply want

the ability to seek contribution from other-liable parties.

Litigation would be complicated and more expensive for the

government than a voluntary cleanup, and it would

inevitably delay the cleanup process.

Alternatively, a party wanting to undertake a cleanup

could try to enter into an administrative settlement with the

United States, but that process will also result in an increase,

perhaps significant, in negotiation and other transaction costs

to that party and the United States. Settlements under

CERCLA are not pro forma matters, but are governed by the

detailed requirements of Section 122 of the statute, 42 U.S.C.

§ 9622, which impose limitations and _ procedural

requirements on how EPA enters into such entitlements.

EPA also utilizes complex and lengthy model settlement

documents that cannot be negotiated simply and

inexpensively.”

Senior EPA officials have recognized that there would be

increased transaction costs and adverse effects were

Petitioner’s position adopted. For example, Bill Muno, who

has served for many years as the Superfund Director for

EPA’s largest regional office, has publicly stated that a

ruling from this Court adopting Petitioner’s position could

force EPA to divert limited Superfund enforcement money to

sites that liable parties are already remediating voluntarily,

thus harming Superfund enforcement and the goal of

achieving site cleanups. See Inside EPA Environmental

> For example, EPA’s Model Consent Decree for agreements to

implement remedial action is over 50 pages long with 127 separate

provisions. See EPA, Model RD/RA Consent Decree (May 2001),

www.epa.gov/compliance/resources/policies/cleanup/superfund/mod-

rdra-cd.pdf.

13

Policy Alert, Aviall May Divert Superfund Enforcement

Fund, EPA Official Says (February 4, 2004).

Finally, the most unfortunate effect of the acceptance of

Petitioner’s position would be that fewer voluntary cleanups

would be done. Parties who now have an incentive to do

cleanups without being sued will analyze the costs and

benefits of doing such cleanups differently, and in many

cases will not do them. If Petitioner prevails, the net effect

will be that there will be more contaminated sites in the

United States three, five, and ten years from now than if

Respondent prevails.

Such a result would also have a devastating effect on the

formal voluntary cleanup programs that many states have

adopted with encouragement from EPA, like the Texas

program that was utilized by Respondent in this case.

Moreover, as mentioned above, EPA has long made it clear

that parties participating in such programs should be able to

seek recovery of costs from other liable parties under

CERCLA. See 55 Fed. Reg. 8666, 8792-93 (Mar. 8, 1990)

(“EPA believes that it is important to encourage private

parties to perform voluntary cleanups of sites, and to remove

unnecessary obstacles to their ability to recover their costs

from the parties that are liable for the contamination.””). That

the United States has decided in this case to completely

undermine EPA’s long-standing position will greatly weaken

EPA’s ability to encourage voluntary cleanups under any

program.

Not only is the availability of contribution an important

incentive for private parties to conduct cleanups, but it is also

a powerful incentive for them to conduct good and thorough

cleanups. CERCLA provides that a private party can only

recover response costs that are “consistent with the national

contingency plan.” 42 U.S.C. § 9607(a)(4)(B); see also,

Mormison Enter. v. McShares, Inc., 302 F.3d 1127, 1135-36

(10th Cir. 2002). The NCP is part of CERCLA's

implementing regulations, and it contains detailed

requirements for how cleanups are to be conducted. See 40

14

C.F.R. pt. 300. A party that knows it will have to have to

demonstrate compliance with the NCP to recover its costs

from other liable parties has a strong incentive to conform to

the NCP, which helps ensure that the cleanup is protective of

human health and the environment. A party that knows it

cannot recover its costs under CERCLA will not have the

same incentive to comply with the NCP.

In 1988, EPA recognized this incentive and added

provisions to the NCP that were intended to make it easier

for a private party undertaking cleanup to know how to

comply with the NCP. EPA stated “that providing a list of

requirements to be complied with in order to be consistent

with the NCP will enhance the probability of a successful

cost recovery action, thus providing an incentive to other

persons to undertake response actions.” 53 Fed. Reg.

51,394, 51,462 (Dec. 21, 1988).

2. Respondents to Section 106 Orders

Section 106 of CERCLA allows EPA to issue orders to

liable parties to undertake cleanup. This is a powerful tool,

and one that EPA uses frequently. EPA guidance encourages

the use of such orders so that liable parties and not EPA will

undertake cleanup. EPA guidance also encourages the

issuance of such orders to a subset of all the liable parties at

a site, based on an assertion of joint and several liability, so

that enforcement of the order by EPA will be manageable.

See EPA, Documentation of Reason(s) for Not Issuing

CERCLA Section 106 UAQOs to All Identified PRPs (Aug. 2,

1996), _ http://www.epa.gov/compliance/resources/policies/

cleanup/superfund/reason-cer106-rpt.pdf. © What happens,

then, if there are 60 liable parties at a site, EPA issues such

an order to 30 of those, and only 10 of those agree to comply

with the order and in fact undertake the entire cleanup? Can

those 10 sue the 20 non-compliers and the 30 non-recipients

for contribution?

The Fifth Circuit panel decision recognized the absurdity

of denying contribution in such a case, and held that a

Section 106 administrative order would qualify as a civil

15

action for purposes of Section 113(f), thereby providing a

predicate for contribution. See Aviall Servs., Inc. v. Cooper

Indus., Inc., 263 F. 3d 134, 140 n.5 (Sth Cir. 2001). But the

United States in its amicus brief here (at 22, n. 11) argues

that such an order is not a civil action, meaning the

compliers would have no CERCLA contribution claim. It is

inconceivable how Congress could have intended such a

result.°

Certainly it is grossly unfair. A small group of compliant

parties would be forced to shoulder the entire burden of the

cleanup, and the non-compliers and those whom EPA chose

not to pursue at all would get a free ride. The result would

be even more unfair, and quite strange, if the United States

were to sue the non-compliers in federal court and they were

ordered by the court to comply with the Section 106 order

and participate in the cleanup. Those initial non-compliers—

who only performed the cleanup after being sued and

ordered by a court to do so—would have a contribution

claim for their costs against the non-recipients. And the

original compliers, who did precisely what EPA wanted

them to do, would have no federal contribution claim.

It is true that in such a situation the compliers with the

order might have a contribution claim under state law. But

the availability of such a remedy is limited and varies by

state.’ Even if such a remedy were available, the

° This position also represents an uivocal reversal of arguments the

United States has repeatedly advanced before, as discussed further below.

” As the en banc court of appeals recognized below, the availability of

contribution under state law varies widely. See Aviall Servs., Inc. v.

Cooper Indus., Inc., 312 F. 3d 677, 690 n. 28 (Sth Cir. 2002) (en banc).

Some states allow contribution claims only after judgment has been

entered on the underlying liability in a judicial proceeding. Id. Although

many states have adopted some version of one of two uniform

contribution acts, the Uniform Contribution Among Tortfeasors Act and

the Uniform Comparative Fault Act, the availability of such claims will

vary greatly depending on the particular state law and the facts of each

case. Furthermore, a recent nationwide survey of state Superfund

Footnote continued on next page

16

contribution claims of the compliers would be adjudicated

under state law in the state court, and the contribution claims

of the non-compliers would be decided in federal court under

federal law, a recipe for total confusion.

Again, the result argued for by Petitioner could increase

litigation and transaction costs, as Section 106 order

recipients would have an incentive to disobey the order and

wait for the United States to sue them. In doing so, they

would run the risk of claims for penalties and punitive

damages under provisions which were intended to encourage

compliance. See 42 U.S.C. §§ 9606(b), 9607(c)(3). Surely,

a party should not be put in a position where it is penalized

and subject to punitive damages for failure to comply with

an order, and also penalized, by loss of its contribution

nights, when it fully complies. with the same order.

Compliance should not trigger a penalty.

3. Demand Recipients

A third situation which would be impacted by

Petitioner’s argument is that of potentially liable parties who

receive cost demands from EPA, where EPA undertakes

cleanup itself, and pay the amount demanded. EPA is

encouraged by CERCLA to issue such demands, because

interest on costs EPA has incurred only begins to run once

demands are issued. See 42 U.S.C. § 9607(a) (interest runs

from the later of “the date payment of a specified amount is

demanded in wniting” and the date of the expenditure); see

also, In re Bell Petroleum Services, Inc., 3 F.3d 889, 908 (Sth

Cir. 1993).

Footnote continued from previous page

programs by the Environmental Law Institute found that of the 36 states

employing a joint and several liability scheme for contaminated property

cleanup costs similar to CERCLA, only 11 provide an explicit right to

allocate cleanup costs to other liable parties. See Environmental Law

Institute, An Analysis of State Superfund Programs, 34 (2002). Because

of barriers such as these, contribution under state statutes often will not

provide an adequate remedy.

17

As with Section 106 orders, the party that cooperates

with EPA would be penalized by losing its contribution

rights because it paid before it was sued. Thus, the party that

does what the government has asked it to do loses an

important right of contribution, while the parties who do not

pay the demand and are instead sued retain a contribution

right. Such a result, again, would increase litigation and

transaction costs. And while it will not reduce private party

cleanups, it will delay the return of money to the Superfund

that could be used to clean up other sites.

KEES

The following chart summarizes how, in these three

situations, Petitioner’s interpretation would deny

contribution nghts to those who behave the way the

government wants them to, and allow contribution for those

who do not:

Contribution No Contribution

Available Available

Voluntary Ignore Clean up property

Cleanup contamination

EPA § 106 Order | Disobey until sued | Comply with order

EPA Cost | Refuse until sued | Pay the demand

Demand

Petitioner’s proposed interpretation asks this Court to

hold that Congress intended these illogical results. Surely, if

there were any reading of the statute to avoid such a result,

that would be the preferred reading. As the next section

shows, not only is there such a reading, it is the best reading

of the statute, and one that the United States has previously

endorsed.

18

II. PETITIONER’S INTERPRETATION IS

CONTRARY TO THE PLAIN STATUTORY

LANGUAGE OF CERCLA

A. The Plain Language of CERCLA § 107

The plain meaning of Section 107 permits the

government or “any other person” to bring a cost recovery

claim under CERCLA. See 42 U.S.C. § 9607(a)(4)(A)-(B).

As Judge Posner has put it, “(t]he statute is clear that

whoever...incurs costs in cleaning up a contaminated site

can seek to recover them from any responsible person...”

Amcast Indus. Corp. v. Detrex Corp., 2 F.3d 746, 748 (7th

Cir. 1993). This Court recognized as much in Key Tronic,

when it held that Ҥ 107 unquestionably provides a cause of

action for private parties to seek recovery of cleanup

costs....” Key Tronic, 511 U.S. at 818. In Key Tronic, the

Court allowed a private party not only to seek contribution

for costs it paid the government, but for costs it had itself

incurred in locating other potentially liable parties. Id. at

819-20. Although the opinion of the Court was that this

private right of action was implied, Justice Scalia argued in

dissent, based on “the plain language of these provisions,”

that private litigants clearly have an express cause of action

under Section 107. Id. at 821-22 (J. Scalia dissenting in part,

joined by J. Blackmun and J. Thomas).

This could well be the end of the inquiry. CERCLA

allows private parties who undertake cleanup to sue liable

parties for cost recovery, and the statute does not restrict

those who can assert such claims to parties who are not

themselves liable under Section 107. Section 107 refers to

costs incurred by any other person, and a liable party is

certainly that. Petitioner’s argument depends on the

proposition that Section 107 should be read contrary to its

language to prohibit liable parties from seeking cost

recovery, and Section 113(f)(1) should be read to exclude

contribution claims by parties who haven not been sued.

19

Before addressing this argument, it is useful to review the

state of the law when SARA was enacted.

B. The Law Before and After SARA

It was clear, prior to the enactment of SARA in 1986,

that liable parties who conducted cleanup could successfully

sue other liable parties pursuant to Section 107(a)(4). For

example, in City of Philadelphia v. Stepan Chemical Co.,

544 F. Supp. 1135 (E.D. Pa. 1982), the City of Philadelphia,

itself a liable party, sued other liable parties under- Section

107(a)(4) for the City’s costs in cleaning up a landfill. The

defendants argued that because the City was liable, it was

precluded from relying on Se*tion 107. The district court

rejected that argument, “[bJecause such preclusion is not

compelled by the language of CERCLA, by its legislative

history, or by the environmental objectives which it is

designed to achieve...” Id. at 1142. Other courts that

recognized a pre-SARA right of liable parties to sue other

liable parties under Section 107 include Wickland Oil

Terminals v. Asarco, Inc., 792 F. 2d 887 (9th Cir. 1986); NL

Indus., Inc. v. Kaplan, 792 F. 2d 896 (9th Cir. 1986); and

Bulk Distribution Ctrs., Inc. v. Monsanto Co., 589 F. Supp.

1437 (S.D. Fla. 1984). EPA also recognized such a right in

its pre-SARA promulgation of the NCP. See 50 Fed. Reg.

47,912, 47,934 (Nov. 20, 1985) (discussing NCP

requirements for private party cost recovery).

When Congress amended CERCLA in 1986, it was

concerned, as discussed above, about increasing incentives

for private party cleanup, and there is not the slightest

indication that it intended to take away the existing right of

private party cost recovery under Section 107. To adopt

Petitioner’s view would be to hold that Section 113(f)(1)

implicitly repealed an existing right under 107. However,

repeals by implication are not favored, and the intent of

Congress to repeal must be manifest. See Rodriguez v.

United States, 480 U.S. 522, 524 (1987); San Francisco v.

Assessment Appeals Bd., 122 F.3d 1274, 1276 (9th Cir.

1997).

20

Far from expressing an intent to narrow the nghts of

parties who conducted or financed cleanups, Congress in

enacting SARA was interested in expanding those rights.

One issue that had arisen pre-SARA was whether a party that

was sued for cost recovery or to conduct a cleanup, but had

not itself undertaken a cleanup, had a right to contribution,

and some pre-SARA courts had found such a night to exist.

See, e.g., Violet v. Picillo, 613 F.Supp. 1563, 1573 (D.R.I.

1985). In SARA, Congress added explicit contribution

language simply to clarify and confirm that existing right.

See S. Rep. No. 99-11, at 44 (1985); H.R. Rep. No. 253, 99th

Cong., at 18-19 (1985). See also, Aviall, 312 F. 3d at 684

(citing Congressional reports).

In this process, much attention was given to the question

of when that contribution nght could be asserted. The

United States was initially concerned about having a

contribution action appended to its enforcement action,

which would complicate and delay the resolution of the

government’s claims. Therefore, the initial administration

proposal provided that “[i]n any civil or administrative

action under [Section 107 or 113], any claims for

contribution or indemnification shall be brought only after

entry of judgment or date of settlement in good faith.” H.R.

Doc. No. 99-32, at 23 (1985). As proposed, this change

would have allowed “the government to limit the number of

parties in its actions, so that litigation could be conducted in

a more efficient and expeditious manner.” Id. at 74.

Eventually, the proposed legislation was changed to make it

clear that a defendant sued under CERCLA could seek

contribution even in the same action in which it itself was

sued—in other words, the contribution claim could be

brought “during or following” the government’s action. But

again, there is no indication that this reference to “during or

following” was intended to limit contribution nghts. To the

contrary, Section 113(f)(1) makes clear that it does not

“diminish the nght of any person to bring an action for-

21

contribution in the absence of a civil action under section

[106 or 107].” 42 U.S.C. § 9613 (f)(1).

In other words, Congress initially created an incentive for

private party cleanups by creating a right of private party

cost recovery in 1980, and then it expanded the rights of

cooperating private parties with the 1986 SARA

amendments.

C. The Effect of Section 113(f)

Petitioner asserts that Congress eliminated private party

cost recovery nghts by the promulgation of Section

113(f)(1). This argument, and that of the United States, is

premised on the fact that most courts of appeals have

interpreted the statute to prohibit parties who themselves are

potentially liable under CERCLA from suing other liable

parties solely under Section 107, and have instead required

that they proceed under Section 113(f). See, e.g., Pinal

Creek Grp. v. Newmont Mining Corp., 118 F.3d 1298, 1306

(9th Cir. 1997); Centerior Serv. Co. v. Acme Sc

Metal Corp., 153 F.3d 344, 356 (6th Cir. 1998); Axel

Johnson, Inc. v. Carroll Carolina Oil Co., 191 F.3d 409, 415

(4th Cir. 1999).

This judicial interpretation of Section 107, which finds

no direct support in the statutory language, has been based

almost entirely on the premise that Congress intended such

parties to recover cleanup costs from other liable parties

through a contribution claim under Section 113. But in these

cases, the concern of the courts has been uniformly how such

liable parties could seek cost recovery, not whether they

could at all. Courts have been concerned that calling such a

cost recovery action something other than “contribution”

could allow for assertion of joint and several liability by such

liable parties or could allow circumvention of the protection

from contribution claims given to settlers under section

113(f)(2). See, Axel Johnson, 191 F.3d at 415-16; Centerior

Service, 153 F.3d at 352, n.11. But none of these decisions

suggested that by recasting the claim as a contribution claim,

the claim would be lost altogether. To the contrary, in these

22

cases that precluded direct Section 107 actions by liable

parties, the courts assume that Section 113(f) actions are

available. See, Bedford Affiliates v. Sills, 156 F. 3d 416,

425 (2d Cir. 1998) (“Bedford instead must rely on a claim

for contribution provided for in CERCLA § 113 (f)(1)”);

Pinal Creek, 118 F. 3d at 1301 (“{t]his duality [between

Sections 107 and 113] is best implemented by permitting a

PRP who has incurred cleanup costs to assert only a

contribution claim against other PRPs”); Axel Johnson, 191

F. 3d at 415 (private parties “who are potentially responsible

for cleanup costs under § 107 cannot bring § 107 cost

recovery actions; rather, such parties ‘must seek

contribution’ under § 113”). These courts provide no

indication that they intended to eliminate substantive nghts

under CERCLA for entire categories of private plaintiffs by

characterizing cost recovery claims as contribution claims.

D. The United States’ Changing Position

The United States notes that it has consistently argued in

favor of this prevailing counter-textual interpretation of

Section 107. See Brief of United States at 20, n.9 (citing

Brief of United States as Amicus Curiae in Support of

Defendants-Appellants in Pinal Creek at 10 (9th Cir. 1996)

(“Ninth Circuit Pinal Creek Brief’)). However, the United

States has advanced this argument in the past based on the

express argument that all liable parties who incurred cleanup

costs were entitled to seek contribution under Section 113.

The Ninth Circuit Pinal Creek Brief is very illuminating.

Pinal Creek was a cost recovery action brought by a liable

party that had performed a voluntary cleanup—essentially

the same situation as that presented here. The United States

argued that such a party could seek contribution under

Section 113 of CERCLA. The United States asserted that

the issue before the court was “the nature of action available

to an admittedly liable party that has incurred CERCLA

response costs without any judgment, administrative order or

settlement compelling cleanup.” Ninth Circuit Pinal Creek

Brief at 10. The United States closed the summary of its

23

argument by stating that “[t}he Superfund statute already has

built-in incentives to encourage voluntary cleanups: they are

less expensive, involve less government control and may

result in fair share allocations through Section 113

contribution actions.” Id. at 12.

When opposing the petition for writ of certiorari to this

Court in Pinal Creek, the United States again made its

position clear that a party performing voluntary cleanup

could bring a CERCLA contribution claim. In its brief to

this Court, the United States stated that “(t]he court of

appeals was properly skeptical of the contentions, pressed by

petitioners and their amici, that its holding would discourage

voluntary cleanups.” Brief of United States as Amicus

Curiae Opposing Granting of Certiorari in Pinal Creek at 14

(U.S. 1998). The United States further emphasized this point

by asserting that “[t)he right to contribution provides a strong

additional incentive to engage in a voluntary cleanup,” and

that, “[a]s the court of appeals recognized, the courts are

authorized to take into account a responsible party’s

cooperation with cleanup efforts when equitably allocating

liability among responsible parties under Section 113(f)(1).”

Id. at 15.

In the Centerior Service case, the United States again

asserted that a liable party could not sue under Section 107.

The liable party had received a Section 106 administrative

order from EPA, but it had not been sued in a civil action.

The United States, while asserting that there should be no

Section 107 cost recovery action for such a party,

acknowledged that there would certainly be a contribution

action under Section 113. In its brief, the United States

framed the question before the court of appeals as “the

nature of the action available to a potentially responsible

party that has incurred CERCLA response costs pursuant to

an uncontested CERCLA § 106(a) Administrative Order.”

Brief of Defendants-Appellees Secretary of Defense,

Secretary of Veterans Affairs, and Administrator of National

Aeronautics and Space Administration in Centerior Service,

24

at 6 (6th Cir. 1997) (“Centerior Service Brief”). The answer

to this question, as the United States saw it then, was that

“such parties are limited to an action for contribution

governed by CERCLA § 113.” Id. And as in Pinal Creek,

the United States argued that “CERCLA also authorizes

private parties to bring an action to recover response costs

which they incur at a site, voluntarily or under compulsion

by the government.” Id. at 2.

In fact, the plaintiffs in Pinal Creek and Centerior

Service each directly raised the very question at issue here,

whether they might actually be precluded from seeking

contribution under Section 113 because they had undertaken

cleanup voluntarily or pursuant to a unilateral EPA

. administrative order. See Pinal Creek, 118 F.3d at 1305;

Centerior Service, 153 F.3d at 351. The Pinal Creek court

concluded that parties undertaking voluntary cleanup were

permitted to seek contribution under Section 113, as the

United States had argued in its amicus brief and would

repeat again in opposing certiorari. See Pinal Creek, 118

F.3d at 1304-05 (echoing United States’ Ninth Circuit Pinal

Creek Brief at 12, supra). In Centerior Service, the United

States flatly rejected the plaintiff's suggestion that it could

not bring a CERCLA contribution claim except “during or

following a civil action” under Sections 106 or 107. See

Centerior Service Brief at 28. As the United States saw it

then, “{tJhe plain language of CERCLA § 113(f)(1) is not

restrictive, i.e., it does not say that a contribution action may

only be brought during or following a civil action under

CERCLA.” Id. (emphasis in original). The United States

further argued that such a restrictive construction of Section

113 was particularly untenable in light of the provision that

nothing therein “shall diminish the nght of any person to

bring an action for contribution in the absence of a civil

action under” Sections 106 or 107. Id. at 28-29 (emphasis in

original). Accordingly, the court of appeals in Centerior

Service ruled that a Section 106 administrative order was

sufficient to trigger contribution rights under CERCLA,

25

stating that it was “disingenuous at best for the plaintiffs,

who have not challenged their status as PRPs, to claim their

action is not one for contribution simply because the EPA

was not forced to take them to court.” Centerior Serv., 153

F.3d at 352.° ,

| The plaintiff's argument in Centerior Service may have

nghtly seemed disingenuous at the time, when the United

States was clearly and unequivocally arguing that the plain

language of the statute allowed a CERCLA contribution

claim for parties who engaged in cleanup without being

sued. Yet today, the United States takes precisely the

Opposite position, arguing (at p. 22-23, n.11) that a liable

party must wait for EPA to take them to court before

contribution is available under CERCLA.

However, the plaintiffs in Pinal Creek and Centerior

Service prophetically foresaw the nightmare scenario that

might face the willing party who was deemed too culpable to

bring a claim under Section 107, which by its plain language

is available to any person, but not culpable enough, because

it had not forced litigation, to seek contribution under

Section 113. The United States directly argued that this

scenario would not come to pass because voluntary and

administratively compelled cleanup expenditures could be

recovered in CERCLA contribution suits, and°the courts of

appeals accepted this argument when interpreting the statute.

Now the United States has reversed its position, and not only

does that reversal reflect bad policy that contradicts

CERCLA’s express language and widely recognized goals,

but it upsets the expectations of private parties and federal

courts that relied on the previous representations of the

8 :

eee Se Unik Stes’ pusttion on Geo tesue was clear tn tts tniel

Centerior Service court e y reserved j on the

or S' xpressl udgment question

addressed in Pinal Creek, whether a party undertaking cleanup without

any government compulsion whatsoever was entitled to seek contribution

under CERCLA. See Centerior Service, 153 F.3d at 351, n.10.

26

United States when interpreting the statute. Given this

recent change in position, the United States’ latest

interpretation of the statute should not be given any special

deference. See Watt v. Alaska, 451 U.S. 259, 272-73 (1981).

In fact, deference should be given to the initial position of

the United States, which parties and courts relied on for

many years as an authoritative interpretation of the statute.”

E. Resolution of Sections 107 and 113

The counter-textual result that this collective

interpretation of Sections 107 and 113 would compel,

entirely denying recovery under CERCLA to an entire class

of private parties, can be resolved in one of two ways. The

simplest way is to reject Petitioner’s construction of Section

113(f) and conclude, as the United States argued in Centerior

Service and the full court of appeals concluded here, that the

first sentence of Section 113(f) has no limiting effect because

it does not say that a party may only bring a contribution

claim “during or following” another civil action under

CERCLA. This provision simply clarifies that a contribution

* The Pinal Creek and Centerior Service briefs are but two examples of

the long line of cases in which the United States has argued the exact

opposite of what it is arguing here. For example, in the Axel Johnson

case, the United States asserted in its brief to the court of appeals that

“[w)hen PRPs conduct the cleanup of a site, they may seek to recover

some portion of their necessary costs of response form other PRPs. See

42 U.S.C. 9607(a4\(B); 9613(f(1) (providing right of contribution. )”

Brief of United States as Amicus Curiae Urging Partial Reversal in Axel

Johnson at 3 (6th Cir. 1999) (“Axel Johnson Brief’). This stands in

contrast to the statement made by the United States in its brief here

(at p. 26) that “CERCLA does not create a federal cause of action under

which responsible parties may sue each other at any time for costs they

have incurred in cleaning up hazardous substances.”

The United States acknowledges in its brief (at p. 26) that it may have

“nurtured” the assumption that it in essence agreed with Respondent with

“erramt language” that is at odds with its position here. But these prior

inconsistencies in briefs filed in multiple courts of appeals and in this

Court are not “errant language.” The reality, as demonstrated here, is

that the United States is reversing its position, but continues to cite to

precedents obtained based in part on its previous use of “errant

language.”

27

claim can be brought during a Section 106 or 107 action, and

need not wait for the conclusion of the government suit.

The final sentence of Section 113(f)(1) further reinforces

this conclusion by providing that nothing in the subsection

should be read to preclude “an action for contribution in the

absence of” a claim under Sections 106 or 107. 42 U.S.C. §

9613(f)(1). This language differs markedly from savings

clauses found in other statutes, that preserve remedies under

other laws, in that it does not refer specifically to any other

laws and it explicitly refers to the availability of “an action

for contribution” without a prior claim under Section 106 or

107.'° See also, In re Reading Co., 115 F.3d 1111, 1120 (3d

Cir. 1997) (“113(f)(1) specifically permits an action for

contribution to be brought ‘in the absence of a civil action

under. ..section [107]”). Again, the United States recognized

this premise in its Centerior Service Brief.

With this provision viewed in its proper context, it is

clear that Congress intended Section 113(f)(1) to preserve

the clear nght to recovery of cleanup costs expended by any

private party, which this Court recognized in Key Tronic.

What are being “saved” are not only state causes of action,

but also the nghts created under Section 107 itself. This

interpretation of the statute is entirely consistent with the

statutory language and purpose, and it is also fully consistent

with this Court’s decision in Key Tronic, which held that

Sections 107 and 113 created overlapping remedies that must

be read together. See Key Tronic, 511 U.S. at 816. This

interpretation would also avoid the numerous adverse policy

implications discussed above, which Congress plainly could

not have intended.

However, if the Court concludes that Petitioner’s

interpretation of the “during or following” language is

° For example, a a a in the citizen suit section of the

Pfr yd “{njothing in Section 304 shall restrict any

right which any person ...may have under any statute or common

law...to seek any other relief...” 42 U.S.C. § 7604(e).

28

correct, it should clarify that a potentially liable private party

who has been subject to a state or federal administrative

cleanup order or undertaken cleanup voluntarily, but has not

been sued under Section 106 or 107 of CERCLA, can

recover costs from other liable parties under the “any other

person” language of Section 107.'' This construction would

preserve the plain intent of Congress to provide a cause of

action for any person that incurs cleanup costs, and it would

also resolve confusion among the courts of appeals as to

which parties are entitled to bring claims under Section 107.

See Morrison Enter. v. McShares, Inc., 302 F.3d at 1134-35

(noting disagreement in courts of appeals).

F. Distinction from Common Law Contribution

The United States contends (at p. 18) that allowing

contribution here would be problematic because Section 113

is premised on the common law night of contribution, and

under common law, to bring a contribution claim, a party

would have to extinguish the liability of the contribution

defendant to the primary plaintiff. The United States is

wrong. That may have been the prevailing common law

rule, but it is certainly not the rule that underlies CERCLA.

Section 113(f)(3) of CERCLA, 42 U.S.C. § 9613(f)(3),

explicitly provides that a liable party can be sued in

contribution even if its liability to the government has not

been extinguished. When a party settles with the

government for some, but not all, of the government’s

m Alternatively, the Court could determine, as the Ninth Circuit recently

did, that the action seeking contribution can itself be viewed as an action

under Section 107, and therefore it falls within the contours of the first

sentence of Section 113(f)(1). See W. Props. Serv. Corp. v. Shell Oil

Co., 358 F. 3d 678, 685 (9th Cir. 2004). Although this seems a less

direct way to reach the same result, it is consistent with the United

States’ argument to the court of appeals in the Axel Johnson case, where

the United States stated that “[{t]echnically, all CERCLA actions for cost

recovery are brought under section 107, which provides the elements of a

claim for cost recovery and lists the liable parties and the defenses to

liability. Section 113(f)(1) supplements section 107....” Axel Johnson

Brief at p. 7, n.6.

29

response costs, the government may seek the remainder of its

costs from non-settlors and the settlors may seek

contribution from the non-settlors. Both claims may proceed

simultaneously, with the sole proviso being that the

government’s claims have priority in payment. In other

words, a party that unequivocally has not discharged another

party’s liability—the other party is still being sued by the

government—continues to have a contribution claim under

CERCLA.

That CERCLA deviates from earlier common law rules

is not surprising. That is precisely what the United States

had argued for prior to SARA’s enactment. This can be seen

by comparing the United States’ position here to its position

in 1985.

Present position: The United States now cites

approvingly (at p. 18) to the Restatement of Torts: “As

the Third Restatement of Torts explains, the right to

contribution depends on the resolution of the underlying

liability: “A person seeking contribution must extinguish

the liability of the person against whom contribution is

sought for that portion of the liability, either by

settlement with the plaintiff by satisfaction of

judgment.’” The United States also cites approvingly (at

p. 18, n.8) to Section 1(b) of the Uniform Contribution

Among Tortfeasors Act (““UCTA”).

Position in 1985: On February 5, 1985, EPA

published in the Federal Register its l.terim CERCLA

Settlement Policy. See 50 Fed. Reg. 5034 (Feb. 5, 1985).

This policy was issued jointly with the Department of

Justice, and makes clear that a settlement with EPA will

only release the liability of the settling party. Because

that could preclude the settling party from having a

contribution claim under common law rules, the policy

opposed adoption of such rules or application of Section

1 of the UCTA, the very provision the United States now

cites approvingly: “We do not support adopting section 1-

of the Uniform Act as a Federal rule of decision. Section

30

1 would preclude settlors from seeking contribution from

non-settlors unless the settlors financed or performed 100

percent cleanup at a site.” Id. at 5043.

As the language of SARA makes clear, Congress

followed the government’s 1985 position. What this

demonstrates is that CERCLA contribution nghts are not

premised on the narrow rules that existed under common

law, but instead were intended to displace ngid common law

contribution rights. The right of contribution created under

CERCLA is broad and robust, precisely to encourage parties

to undertake cleanup and pay governmental costs, with the

promise that they in tum can sue other liable parties to

recoup some of their expense.

CONCLUSION

The decision of the court of appeals should be affirmed.

Respectfully submitted,

JOEL M. GROSS

Counsel of Record

THOMAS H. MILCH

THOMAS I. ANDERSON

ARNOLD & PORTER LLP

555 Twelfth Street, N.W.

Washington, D.C. 20004

(202) 942-5000

ALBERT M. COHEN

SMILAND & KACHIGIAN

601 South Fifth Street

Seventh Floor

Los Angeles, CA 90071

(213) 891-1010