Respondents Brief — United States v. Atlantic Research Corp.

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bec eS

orp” No. 06-562

In The

Supreme Court of the Anited States

UNITED STATES OF AMERICA,

Petitioner.

ATLANTIC RESEARCH CORPORATION,

Respondent.

On Writ Of Certiorari To The

United States Court Of Appeals

For The Eighth Circuit

BRIEF FOR RESPONDENT

ATLANTIC RESEARCH CORPORATION

FRANK L. STERVES

OWEN THOMAS ARMSTRONG, JR.

(Counsel of Record)

VON BRIESEN & ROPER, S.C.

411 E. Wisconsin Ave.. Suite 700

Milwaukee, WI 53202

(414) 276-1122

Attorneys for Respondent

Atlantic Research Corporation

Cem WEE LAW BEER POINTING. Gb som 4nd

Cre NOG CCE tert or Psd

QUESTIONS PRESENTED

Whether a party that is potentially responsible for the

cost of cleaning up property contaminated with haz-

ardous substances under the Comprehensive Envi-

ronmental Response, Compensation, and Liability Act

(CERCLA), 42 U.S.C. 9601 et seg., but that does not

satisfy the requirements for bringing an action for

contribution under Section 113(f) of CERCLA, 42

U.S.C. 9613(f), may bring an action against another

potentially responsible party for cost recovery under

Section 107(a), 42 U.S.C. 9607(a).

In the alternative, if the aforementioned potentially

responsible party has no express cause of action un-

der Section 107(a) to recover a portion of the response

costs incurred, whether the party has an implied

right to contribution afforded by Section 107(a).

‘

RULE 29.6 STATEMENT

There is no parent corporation or any publicly held

corporation that owns 10% or more of Respondent’s stock.

ili

TABLE OF CONTENTS

. Page

pF Be Fiat | Vv

ERNIE sicinihnctancsiicncendenesucipiiinisinieapidintiinenndensiiiiin 1

SUMMARY OF ARGUMENT. ................cccsessseesesesesseeeees 3

FTE ceciitiiapisetiatiiitainninnsinniibingdaiiniiinigntanuanmie 7

I. THE GOVERNMENT’S INTERPRETATION

OF “ANY OTHER PERSON” IN § 107(a)(4)(B)

IS INCONSISTENT WITH: (A) THE PLAIN

MEANING OF THE PROVISION AND OVER

25 YEARS OF CERCLA JURISPRUDENCE;

(B) A PARALLEL AND COMPLEMENTARY

PROVISION IN CERCLA; (C) THE EPA'S

OWN INTERPRETATION OF § 107(a)(4)(B);

(D) A RATIONAL LIABILITY SCHEME UN-

DER CERCLA; AND (E) THE PRIMARY

PURPOSES OF CERCLA ..............ssccssssesssseseeees 7

A. The Plain Meaning Of The Phrase

“Any Other Person” Is To Differentiate Be-

tween Governmental Entities And Non-

Governmental Entities, Including PRPs..... 7

B. The Government’s Interpretation Of

§ 107(a)(4)(B) Conflicts With § 111(a)......... 20

C. The Government’s Interpretation Of

§ 107(a)(4)(B) Conflicts With The EPA's

Interpretation Of That Provision................ 21

D. Acceptance Of The Government’s Interpre-

tation Of § 107(a)(4)(B) Would Have Un-

reasonable Consequences .............0.sssseeeeeeees 23

E. The Government’s Interpretation Of

§ 107(a)(4)(B) Also Undermines The Prin-

cipal Purposes Underlying CERCLA........... 26

TABLE OF CONTENTS - Continued

Page

II. VOLUNTARY REMEDIATORS, SUCH AS ARC,

HAVE A VIABLE COST RECOVERY ACTION

UNDER § 107(a)(4)(B)........ccccssessssosscerrereseeeessees

Allowing A Voluntary Remediator To Pro-

ceed Under § 107(a)(4)(B) Has No Effect On

The Applicable Statute Of Limitations .........

Nothing In CERCLA Requires Courts To

Impose Joint And Several Liability In All

Cost Recovery Actions Brought Under

IED cxtirsecitsninininntnntinnsenneiininnsiantents

Courts Retain The Power To Protect Set-

Ee i aiinstisninntnccsncinseninmmncianeiitannmneimarees

The Availability Of § 107(a)(4)(B) Cost

Recovery Claims Will Not Deter Settle-

SID cecesecsnceicnccscssssseccenesevececnseesuresuecnsevessess

The Government’s Reliance On Pre-Aviall

Case Law Is Misplaced.................:ccseeeeeeeeeee

Ill. ALTERNATIVELY, IF ARC IS NOT ENTI-

TLED TO RECOVER A PORTION OF ITS RE-

SPONSE COSTS UNDER § 107(a)(4)(B), IT IS

ENTITLED TO SEEK RECOVERY PURSU-

ANT TO AN IMPLIED RIGHT OF CONTRI-

BUTION AFFORDED BY § 107(a)(4)(B)............

ee versesctnerinmeciesnennemspeennnmmvednnmneenenveeneonen

TABLE OF AUTHORITIES

Page

CASES

Adhesives Research v. American Inks & Coatings,

Corp., 931 F. Supp. 1231 (M.D. Pa. 1996)................ 10, 34

Akzo Coatings Inc. v. Aigner Corp., 30 F.3d 761 (7th

SA FED cerccccenencnsictitionnansnevitenmennsaisiennenimnitaiieiabadieiiens 37

Allied Chemical Corp. v. Acme Solvents Reclaiming,

Inc., 691 F. Supp. 1100 (N.D. Ill. 1988)... 35, 39

Artesian Water Co. v. New Castle County, 605

F. Supp. 1348 (D. Del. 1985) ...........ccccccscsrrrssssssreseees 10, 26

Atlantic Research Corp. v. United States, 459 F.3d

re ere i evccsnsenssenernsserintsisnstencsnnincnsnetnniiaaienel passim

Barton Solvents, Inc. v. Southwest Petro-Chem, Inc.,

1993 U.S. Dist. LEXIS 14337, 38 E.R.C. 1022 (D.

BERI, TITUS venteecsrevnensenatnaininenounnnnndianeesniiaminnanaal 10, 35

Bedford Associates v. Sills, 156 F.3d 416 (2nd Cir.

PEED wernivesseresscenssesmmnnnnnniaiiniamanal 41

In the Matter of Bell Petroleum Services, Inc., 3 F.3d

Ge Fe ccectsinserssevissenusnnimniinisitiiiamaginiiaaeanss 35

Bulk Distribution Centers, Inc. v. Monsanto Co.,

589 F. Supp. 1437 (S.D. Fla. 1984)......c.ccccccssesseseseees 10, 26

Cannon v. Univ. of Chicago, 441 U.S. 677 (1979).......... 20

Centerior Serv. Co. v. Acme Scrap Iron & Metal

Corp., 153 F.3d 344 (6th Cir. 1998)... eee passim

Charter Township of Oshtemo v. Am. Cyanamid

Co., 898 F. Supp. 506 (W.D. Mich. 1995)..............eseeeee 36

Charter Township of Oshtemo v. The Upjohn Co.,

910 F. Supp. 332 (W.D. Mich. 1995)................csseceeeeeeees 34

TABLE OF AUTHORITIES - Continued

Page

Chesapeake & Potomac Tel. Co. of VA. v. Peck Iron

& Metal Co., Inc., 814 F. Supp. 1269 (E.D. Va.

EERE een nO eT 10, 34, 36

City of New York v. Exxon Corp., 633 F. Supp. 609

TIT: TIIITTT ica aicarsdeinpepntnnenncaielbennepnenenesneeienneets 10

City of Philadelphia v. Stepan Chemical Co., 544

F. Supp. 1135 (E.D. Pa. 1982) ..............sscccseesesseecereee 8, 10

Clark v. Martinez, 543 U.S. 371 (2005) ..........cccccceceeeeeeeees 12

Colorado v. ASARCO, Inc., 608 F. Supp. 1484 (D.

SII TIT i seni ied patnarineteBasiundatnnntedmgdceieseconnen 16, 17, 26

Consolidated Edison Co. v. UGI Utilities, 423 F.3d

I nti sincelditeeiariainiatnenteninnnmnsnaet passim

Control Data Corp. v. S.C.S.C., 53 F.3d 930 (8th

iT I iiienestiteaesnpehdpineungntengenbaneapeneennemmecnngnemmapeneneen 10

Cooper Industries, Inc. v. Aviall Services, Inc., 543

SE a TIT tend rpeaniariaentenneneentinnmensenpientnerenssaceen passim

Cos. for Fair Allocation v. Axil Corp., 853 F. Supp.

EEE ee ae 10, 34

E. I. du Pont de Nemours & Co. v. United States,

460 F.3d 515 (3rd Cir. 2006)...............cceeceeeeeeeeees 28, 40, 43

Exxen Corp. v. Hunt, 475 U.S. 355 (1986).............ceeeeeeeeee 20

Idlywoods Assoc. v. Mader Capital, Inc., 915 F. Supp.

i ican cetannnsinannnnonnenbennenetes 10

Jama v. Immigration & Customs Enforcement, 543

Ee. aE 12

Key Tronic v. United States, 511 U.S. 809 (1994)........ 26, 28

Martin v. Hadix, 527 U.S. 343 (1999)...........ccccssserreeseerees 11

vil

TABLE OF AUTHORITIES — Continued

Page

Metropolitan Water Reclamation Dist. of Greater

Chicago v. North Amer. Galvanizing and Coating,

Inc., 473 F.3d 824 (7th Cir. 2007).......ccccccereeeeeeees passim

New Castle County v. Halliburton NUS Corp., 111

A BERG Gar Ga BIG F) cccccccsccevcsccssccsccssssanseseses 16, 18, 28

New York v. Shore Realty Corp., 648 F. Supp. 255

SET site iccassecespivensccansmmntapepntadlinedantenbintes 16, 47, 48

Pinal Creek Group v. Newmont Mining Corp., 118

oe 17, 31

Pinole Point Properties Inc. v. Bethlehem Steel

Corp., 596 F. Supp. 283 (N.D. Cal. 1984)................. 10, 39

In the Matter of Reading Co., 115 F.3d 1111 (3rd

Sand Springs Home v. Interplastic Corp., 670 -

F. Supp. 913 (D. Okla. 1987)................ccsssseseees 10, 16, 17

Sayreville v. Union Carbide Corp., 923 F. Supp. 671

STE SIND cinccoscnsemassseiiveniananiniidinsanienaunteaannuenee 10

Schaefer v. Town of Victor, 457 F.3d 188 (2nd Cir.

oui ccneeducseegecienseccerpntdatapeisecnnienintimnetigtenaianiaimammemnenes 41

Sun Co. Inc. v. Browning-Ferris, Inc., 124 F.3d 1187

GGG SUITE cnccevetienenanictivendenntunidabicimerandsanennniei 18, 31

Town of Windsor v. TESA Tuck, Inc., 919 F. Supp.

ie. SU nnnncnnncccuncnntanncenenintncnptniienncinntdcinaen 36

Transportation Leasing Co. v. California, 961

B, Geum. OB1 (C.D. Cal. 190 eccceccscncccocccsnoccercocovesessoses 34

Udall v. Tallman, 380 U.S. 1 (1965)... ceeeeeeeeteeeeeeees 23

United States v. A & F Materials Co., Inc., 578

F. Supp. 1249 (S.D. Ill. 1984) ..................ccccecereeeeeeees 34, 35

eee

TABLE OF AUTHORITIES - Continued

United States v. ASARCO, Inc., 814 F. Supp. 951

Se Ga Te ctcccinsitncsnctnncnsemntnmnnisscvsniniabingpinemenicenesiain 17

United States v. Burlington Northern & Santa Fe

Ry. Comm., No. 03-17169, *3224-3229 (9th Cir.,

Ne Sis Slee cceviennernncunensonsvebidenstnntennnemnianiinneninmtinnenens 35

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

RD CUD cicdecniiiseidlbccnitaseninnicnnidiontindaiadeiiieiinmnndiminniogute 33

United States v. Conservation Chem. Co., 619

F. Supp. 162 (W.D. Mo. 1985)............cccceseeeeeeeeees 16, 17, 34

United States v. Davis, 31 F. Supp. 45 (D.R.I. 1998)........ 36

United States v. Kramer, 757 F. Supp. 397 (D.N.J.

Fa ncceusnascendacnssannienemeenesdnndethentietiensteipdmmmmnmatennennns 34

United States v. Mottolo, 605 F. Supp. 898 (D.N.H.

ar eccssnciteeinshecciniesiacitiiedaassiaentabanianeneaaniiainddiaianiiiaiiaaaibiedbones 34

United States v. New Castle County, 642 F. Supp.

RINE, SII cinssteccinncnioiniesienanniinnninan 10, 13, 14, 15

United States v. Northeastern Pharmaceutical &

Chemical Co., Inc., 579 F. Supp. 823 (W.D. Mo.

Sa eiccineiidntingitcpecastecsuannadengiansinnieiniiianastaiiiiidsmieitiinemeininennes 8

United States v. South Carolina Recycling and ;

Disposal, Inc., 653 F. Supp. 984 (D.S.C. 1984)............... 8

United States v. Taylor, 909 F. Supp. 355 (M.D.N.C.

UTE ivesstincincnilicadaasenainttnciienannniemmeiiinanicananadaiatinedeii 10, 31, 34

United States v. Ward, 618 F. Supp. 884 (E.D.N.C.

[iia ccnscsiiasieieiicepimnmingntanntasinninisniiceiiameniinueiiaiinidiiiebianemenaanans 8

United States v. Westinghouse Elec. Corp., IP 83-9-

C, 1983 WL 160587 (S.D. Ind. June 29, 1983)......... 16,17

Wickland Oil Terminals v. ASARCO, Inc., 792 F.2d

ee EE ee iviteretensinnictiinditcinecneiituaiiesitniatinanibeianiaiten 10, 39

TABLE OF AUTHORITIES ~ Continued

Page

STATUTES

Comprehensive Environmental Response, Compen-

sation, and Liability Act (CERCLA), 42 U.S.C.

9601 et seq.

es Sie CEs TINIE ccincciessinicenoctntanienneseneetnnintenenieiaet 3, 11

OB A ee 2, 22, 41, 48, 49

§ 107, 42 U.S.C. 9607 coteteseseeenssensesessesecessecersseseeseesPOSSLM

ay Sees UE TTEAMITTTTETT icine 20, 21, 39

ety ee Ea CI cxscnnriicabhniciceteiensientetitastadiiiiiammagsinuld passim

ee ee Sets SNE asrccciieeptensnecncinnenegpinnenscndntudnmetnipmntenn’ 24

ie Sas Ge EEE TET catsinieninnnsierenicntvndmanniienmnicinimaditienias 22

Superfund Amendments and Reauthorization Act of

1986, Pub. L. 99-499, 100 Stat. 1613 .............csceseeeneeees 1

OTHER AUTHORITIES

Se ets Sts LSID UlPiicesictceeiiieieneansinontipieienaennapeiiaieaieatindiiite 49

BSE Come. Bec. BETES (BBBB)....nccccecocesseccecsecesccesscesscocesssece 26

rs ee EE ceisccnarrcnsnionenanatnintabintinntinii 21, 22, 39

a citar cieiicaiiaiadatearsitiaainaraiantitaiiasiaiaaiae 21

50 Fed. Reg. 5862 (1985)........ccccccsccesessssescsescscsesraceeeees 22, 47

Se rs a cictereeirteiietatetapeahiaecinniteainlahildaaiaitiaman 48

Exec. Order No. 12580, 52 Fed. Reg. 2923 (Jan. 23,

riE i cccsdacendaitiisintiidaaniaaitiapiientinnsinenmmpnebtanimiiibminnesimmbiniimeninien 24

H.R. Rep. No. 96-1016 (1980) ...............ccesscessseeeseceseeeeeenes 26

JAMES T. O'REILLY & CAROLINE BROWN, RCRA AND

SUPERFUND: A PRACTICE GUIDE, § 14.58.....................0.. 36

INTRODUCTION

The issue in this case is whether, under CERCLA,

§ 107(a)(4)(B), 42 U.S.C. 9607(a)(4)(B), a company that is

potentially responsible for cleaning up a contaminated site

or paying for a cleanup, a so-called “PRP,” and that does so

voluntarily, may recover an equitable share of its costs

from other PRPs. A voluntary cleanup occurs where there

is no order, judgment or settlement compelling the PRP to

clean up a site, nor is there any pending civil action

seeking to compel such a cleanup.

If partial cost recovery is denied to PRPs that volun-

tarily clean up contaminated sites, not only would respon-

dent Atlantic Research Corporation (“ARC”) be unfairly

forced to absorb substantial cleanup costs which, in large

part, are attributable to activities of the Department of

Defense, but other PRPs will forego voluntary cleanups

altogether. Also, if partial cost recovery is unavailable, the

government will be substantially insulated from having to

shoulder its share of responsibility for contaminating

numerous sites throughout the country, despite having

waived its sovereign immunity. These results would

undermine CERCLA’s twin goals of promoting prompt,

voluntary remediation of hazardous waste sites, and

requiring PRPs, such as the Department of Defense, to

assume their fair share of cleanup costs.

ARC submits that PRPs that voluntarily clean up

contaminated sites have always been entitled to recover

an equitable share of their response costs from other

PRPs. In the period dating from CERCLA’s enactment

in 1980 until passage of the Superfund Amendments

and Reauthorization Act of 1986, Pub. L. 99-499, 100

Stat. 1613 (“SARA”), courts unanimously held that

§ 107(a)(4)(B) expressly provided PRPs that voluntarily

clean up sites with the right to obtain partial cost recovery

from other PRPs. The only issue prior to SARA was

whether a PRP that was compelled to clean up a site, or to

pay for site cleanup, had a right to contribution under

CERCLA - a right not expressly provided by the Act.

These pre-SARA courts concluded that a right to contribu-

tion could be implied from the Act or existed as a matter of

federal common law.

_ SARA was enacted in. 1986 to confirm and codify this

right to contribution. SARA did not purport to even

address, much less modify, curtail or withdraw, the well-

established and separate right of partial cost recovery

afforded by § 107(a)(4)(B) to PRPs that voluntarily cleaned

up contaminated sites. Indeed, no contribution issue was

involved in those cleanups because they were not per-

formed under compulsion, nor were the PRPs voluntarily

performing them jointly liable with any other PRP, both

necessary elements of contribution.

Although many post-SARA appellate courts concluded

that partial cost recovery claims by PRPs that voluntarily

cleaned up sites were actually contribution claims to be

brought under § 113(f), the reason courts did so was their

mistaken view that all claims for partial cost recovery

could and should be maintained as § 113(f) actions, an!

that § 107(a)(4)(B) claims necessarily resulted in joint and

several liability for indemnity - a remedy reserved for

non-PRPs.

In Cooper Indus. Inc. v. Aviall Services, Inc., 543 U.S.

157 (2004), this Court corrected the first of the above

misconceptions, holding that § 113(f) does not permit all

PRPs to seek partial cost recovery — but only those that

have been sued in a § 106 or § 107(a) civil action, or those

PRPs that have resolved their CERCLA liability by

settlement with the United States or a State. This case

presents the Court with the occasion to correct the second

misconception embraced by many post-SARA courts — that

§ 107(a)(4)(B) is not a source of partial cost recovery for

PRPs that voluntarily clean up a contaminated site, but is

reserved exclusively for non-PRPs that are entitled to

recover indemnity from PRPs on a joint and several

liability basis. Indeed, the Second, Seventh and Eighth

Circuits have now repudiated those erroneous post-SARA,

pre-Aviall decisions, correctly holding that PRPs volun-

tarily cleaning up contaminated sites have a viable

§ 107(a)(4)(B) claim for partial cost recovery.

SUMMARY OF ARGUMENT

CERCLA liability is governed by § 107(a)(4), providing

that a “covered person” — a “PRP,” “shall be liable for (A)

all costs of removal or remedial] action incurred by the

United States Government or a State or an Indian tribe

not inconsistent with the national contingency plan; (B)

any other necessary costs of response incurred by any other

person consistent with the national contingency plan;... .”

(emphasis added). What this means is that a PRP cannot

be liable to another for a claim under CERCLA unless and

until: (1) a governmental entity incurs “costs of removal or

remedial action” at a particular site, or (2) a private party

incurs “costs of response” at a given site.’

' “Response costs” include all costs associated with “removal of

hazardous substances” and “remedial action,” §§ 101(23) and (24), and

also include all “enforcement activities related thereto.” Section

101(25). Of course, “response costs” may be incurred by a PRP that

would not render any other PRP “liable,” 1.e., if there were a viable

defense to liability under § 107(b), or if the response costs incurred were

unnecessary or inconsistent with the national contingency plan.

(Continued on following page)

For ease of reference, where no response costs have

been incurred by any person other than a given PRP that

has voluntarily incurred them — i.e., not under the com-

pulsion of any order, judgment or settlement, or a civil

action seeking to compel a cleanup, the PRP will be re-

ferred to herein as a “voluntary remediator.” Conversely,

where a PRP has been compelled to clean up a site or to

pay for a cleanup, either by order, judgment or settlement,

the PRP will be referred to as a “compelled remediator.”

In the present case, ARC is a “voluntary remediator.”

The government claims that all PRPs are excluded

from the term “any other person” in § 107(a)(4)(B), and

thus must confine their partial cost recovery claims to

contribution actions under § 113(f). Stated another way, the

government contends that only “innocent parties,” i.e., non-

PRPs, are included within the term “any other person” in

§ 107(a)(4)(B). Alternatively, the government argues that

even if PRPs are “other persons” within § 107(a)(4)(B),

§ 113(f) still provides the exclusive source of cost recovery

(contribution) to all PRPs, including both voluntary

remediators and compelled remediators. The government

insists that only “innocent parties” are entitled to seek

response costs under § 107(a)(4)(B).

ARC will establish that a// PRPs are included within

the term “any other person” in § 107(a)(4)(B). The govern-

ment’s contrary claim: (1) makes no grammatical sense

and has been rejected by every court interpreting and

applying § 107(a)(4)(B); (2) is inconsistent with a parallel

However, a necessary condition for the accrual of any cause of action

asserting CERCLA liability under § 107(a) is the incurrence of response

costs, including “an enforcement activity,” by the party bringing the

suit.

and complementary provision in CERCLA; (3) is contrary to

the EPA’s own interpretation of § 107(a)(4)(B); (4) would

lead to unreasonable and unjust consequences; and (5)

would conflict with the core principles underlying CERCLA.

ARC will also establish that the government’s fall-

back argument —- that even if § 107(a)(4)(B) includes PRPs,

voluntary remediators have no viable claim under that

provision and must sue under § 113(f) — is equally flawed.

First, the government ignores the critical difference

between a compelled remediator that is liable under

CERCLA for cleaning up a contaminated site, or paying

for that cleanup, and a voluntary remediator that, al-

though potentially responsible for site cleanup, is not

actually liable under CERCLA for cleaning up a site, but

does so despite the absence of any order, judgment or

settlement compelling cleanup, and without any CERCLA

civil action seeking to compel cleanup.”

Indeed, although the government now conveniently

ignores this distinction, less than one year ago, in an

amicus curiae brief filed in Metropolitan Water Reclama-

tion Dist. of Greater Chicago v. No. Amer. Galvanizing and

Coating, Inc., 473 F.3d 824 (7th Cir. 2007), the government.

emphasized its importance in determining whether a

party could proceed with a § 107(a)(4)(B) cost recovery

claim:

* This distinction between compelled remediators and voluntary

remediators is significant for purposes of contribution, which requires,

inter alia, compelled payment by one sharing a joint or common liability

with another. See, e.g., Centerior Sebvice-Co=v- Acme Scrap Iron &

Metal Corp., 153 F.3d 344, 350-51 (6th Cir. 1998), see also § 113(f)(1),

providing that cost allocation in CERCLA contribution actions occurs

only “among liable parties....” (emphasis added) Thus, compelled

remediators may seek partial cost recovery under § 113(f), while

voluntary remediators do not — the latter obtain partial cost recovery

under § 107(a)(4)(B).

Under [§ 107(a)(4)(B)], persons who are not them-

selves liable may cleanup contaminated property

and then invoke [§ 107(a)(4)(B)] to seek reim-

bursement from the same four categories of PRPs

that are subject to government cleanup or cost

recovery actions.

(Gov't. Amicus Br., pp. 7, 10) (emphasis added). Because -

voluntary remediators such as ARC are not “liable” under

CERCLA when they voluntarily undertake cleanups, even

under the government’s view of § 107(a)(4)(B), articulated

in Metropolitan Water, they may invoke that provision “to

seek reimbursement from the same ... PRPs that are

subject to government cleanup or cost recovery actions.”

Second, the government’s objection to voluntary

remediators recovering a portion of their response costs

under § 107(a)(4)(B) is based upon a flawed premise — that

cost recovery under this provision necessarily results in

joint and several liability for indemnity only, a remedy

reserved for non-PRPs. The government insists that

because all voluntary remediators are still PRPs, they

necessarily bear some responsibility for contamination at a

given site, and thus may not impose joint and several

liability for indemnity upon any other PRP. Instead, the

government argues, partial cost recovery is the only

available remedy to voluntary remediators, and that

remedy is afforded solely by § 113(f).

The problem with the government’s argument is that

nothing in CERCLA requires joint and several liability for

indemnity be imposed upon PRPs under § 107(a)(4)(B).°

Rather, in cases such as this one, involving the United

* This Court implicitly recognized this fact in Aviall, supra, 543

U.S. at 171, n.6: “We do not address whether a § 107 cost recovery

action ... may seek some form of liability other than joint and several.”

States as a PRP, § 107(a)(4\\B) permits a voluntary reme-

diator to recover a portion of its costs, i.e., to impose

several liability only, just as in the contribution remedy

provided by § 113(f). The liability of the United States in

all such § 107(a)(4)(B) actions should be several only

because it would be inappropriate to hold taxpayers jointly

liable for the contamination caused by all other PRPs

responsible for contaminating a site. ARC, a voluntary

remediator, seeks to recover only its equitable share of

response costs from the United States as a result of ARC’s

having voluntarily incurred first instance response costs

at the Camden, Arkansas site. ARC’s cost recovery action

against the United States is authorized by § 107(a)(4)(B);

ARC is not confined to a non-existent contribution claim

under § 113(f), as the government claims.

ARGUMENT

I. THE GOVERNMENT’S INTERPRETATION OF

“ANY OTHER PERSON” IN § 107(a)(4)(B) IS IN-

CONSISTENT WITH: (A) THE PLAIN MEANING

OF THE PROVISION AND OVER 25 YEARS OF

CERCLA JURISPRUDENCE; (B) A PARALLEL

AND COMPLEMENTARY PROVISION IN CER-

CLA; (C) THE EPA’S OWN INTERPRETATION

OF § 107(a)(4)(B); (D) A RATIONAL LIABILITY

SCHEME UNDER CERCLA; AND (E) THE PRI-

MARY PURPOSES OF CERCLA.

A. The Plain Meaning Of The Phrase “Any

Other Person” Is To Differentiate Be-

tween Governmental Entities And Non-

Governmental Entities, Including PRPs.

Contrary to the government’s claim that the word

“other” in § 107(a)(4)(B) refers to, and thereby excludes,

PRPs (Gov't. Br., pp. 11, 15), the purpose of the phrase

“any other person” is to differentiate the nature, scope and

conditions of cost recovery by governmental entities under

§ 107(a)(4)(A), from the nature, scope and conditions of

recovery by private entities under § 107(a)(4)(B). Not only

do governmental entities recover all of their response

costs, as opposed to necessary costs of response recoverable

by non-governmental entities, but it is undisputed that, as

the government has argued for years, the purpose of the

phrase “not inconsistent with the national contingency

plan” (“NCP”) is to make clear that when governmental

entities seek to recover response costs, it is presumed the

costs incurred are consistent with the NCP, thereby

imposing upon PRPs the burden of proving otherwise.

Under § 107(a)(4B), however, private parties bear the

burden of proving the costs incurred were consistent with

the NCP. See, e.g., United States v. Northeastern Pharma-

ceutical & Chemical Co., Inc., 579 F. Supp. 823, 850-51

(W.D. Mo. 1984); United States v. Ward, 618 F. Supp. 884,

899-900 (E.D.N.C. 1985); United States v. South Carolina

Recycling and Disposal, Inc., 653 F. Supp. 984, 1008-09

(D.S.C. 1984). :

The government’s interpretation of § 107(a)(4)(B) has

been rejected repeatedly by courts considering the issue.

In one of the earliest CERCLA cases, City of Philadelphia

v. Stepan Chemical Co., 544 F. Supp. 1135, 1141-42, (E.D.

Pa. 1982), the City, a voluntary remediator, argued that

defendants were liable for a portion of the City’s necessary

costs of response under § 107(a)(4)(B). The defendant

PRPs contended, however, as the government argues here,

“that the term ‘any other person’ as used in 42 U.S.C.

§ 9607(a)(4)(B) does not include a party which itself is

subject to liability under the act.” The district court

rejected the argument, holding that although § 107(a)(4)(B)

was not “a model of clarity, the provision does not specifi-

cally exclude parties that may be liable ... nor does its

language support such a construction.”

In the latest case addressing the government’s

claim, Metropolitan Water, supra, the Seventh Circuit also

rejected the government’s interpretation of § 107(a)(4)(B):

Nothing in subsection (B) indicates that a poten-

tially liable party ... should not be considered

‘any other person’ for purposes of a right of ac-

tion.

Certainly, as the EPA points out, the word ‘other’

in that phrase should be given meaning as a dis-

tinguishing term. Yet, we disagree that the word

‘other’ distinguishes ‘any other person’ from the

four categories of potentially responsible parties

listed earlier in subsections (1) through (4) of

§ 107(a). Rather, we read ‘other’ as distinguish-

ing ‘any other person’ from the ‘United States

Government,’ a ‘State’ or an ‘Indian tribe,’ the

parties listed in the immediately preceding sub-

section. Jd. These parties, as subsection (A)

states, may recover costs ‘not inconsistent with

the national contingency plan.’ Jd. § 9607(a)(4)(A)

(emphasis added). By contrast, ‘any other person’

is limited to recovery of those costs ‘consistent

with the national contingency plan.’ Id.,

§ 9607(a)(4)(B) (emphasis added). Thus, we read

the two subsections, and the referenced ‘any

other person’ simply as the statute’s way of relax-

ing the burden of proof for governmental entities

as opposed to private parties.

473 F.3d at 835. Indeed, in the 25 years between Stepan

and Metropolitan Water, every court addressing the

government’s proffered interpretation of § 107(a)(4)(B) has

rejected it,’ and every court interpreting § 107(a)(4)(B) has

held that PRPs are among the “other persons” referenced

in that provision.*

Despite these facts, the government makes two

additional arguments to support its strained interpreta-

tion of § 107(a)(4)(B). First, the government claims that

legislative history underlying § 107(a)(4)(B) indicates

that PRPs are not included in the term “any other per-

son.” This is because an initial 1980 draft provision of

§ 107(a)(4)(B) read “any person,” purportedly including

PRPs, but was later changed to read “any other person,”

* See, e.g., Wickland Oil Terminals v. ASARCO, Inc., 792 F.2d 887,

890-91 (9th Cir. 1986); Artesian Water Co. v. New Castle County, 605

F. Supp. 1348, 1357 n.11 (D. Del. 1985); City of New York v. Exxon

Corp., 633 F. Supp. 609, 617 (S.D.N.Y. 1986); Chesapeake & Potomic Tel.

Co. of Va. v. Peck Iron & Metal Co, Inc., 814 F. Supp. 1269, 1277 (E.D.

Va. 1992); United States v. Taylor, 909 F. Supp. 355, 362-63 (M.D.N.C.

1995); Adhesives Research v. American Inks & Coatings Corp., 931

F. Supp. 1231, 1246 (M.D. Pa. 1996); Cos. for Fair Allocation v. Axil

Corp., 853 F. Supp. 575, 579 (D. Conn. 1999); Control Data Corp. v.

S.C.S.C., 53 F.3d 930, 936, n.9 (8th Cir. 1986); Idlywoods Assoc. v.

Mader Capital, Inc., 915 F. Supp. 1290, 1313 (W.D.N.Y. 1996); Sayre-

ville v. Union Carbide Corp., 923 F. Supp. 671, 679-80 (D.N.J. 1996);

Consolidated Edison Co. v. UG] Utilities, Inc., 423 F.3d 90, 99-100 (2nd

Cir. 2005); Atlantic Research Corp. v. United States, 459 F.3d 827, 835

(8th Cir. 2006).

* See, eg., Wickland, supra, 792 F.2d at 890-91; Pinole Point

Properties, Inc. v. Bethlehem Steel Corp., 596 F. Supp. 283, 290-91 (N.D.

Cal. 1984), United States v. New Castle County, 642 F. Supp. 1258,

1262-64 (D. Del. 1986), Stepan, supra, 544 F. Supp. 1135 at 1143; Sand

Springs Home v. Interplastic Corp., 670 F. Supp. 913, 916-17 (D. Okla.

1987); Bulk Distribution Centers, Inc. v. Monsanto Co., 589 F. Supp.

1437, 1443 (S.D. Fla. 1984), Adhesives Research, supra, 931 F. Supp. at

1238 (citing cases); Artesian Water, supra, 605 F.Supp. at 1356;

Centertor, supra, 153 F.3d at 349-50; Barton Solvents, Inc. v. Southwest

Petro-Chem, Inc., 1993 U.S. Dist. LEXIS 14337, *8-9, 38 E.R.C. 1022

(D. Kan. 1993); Con. Ed., supra, 423 F.3d 99-100; Atlantic Research,

supra, 459 F.3d at 835.

thereby signifying their deletion — at least as the govern-

ment sees it. (Gov't. Br., pp. 18-19). The government’s claim

finds no support in the legislative commentary, and is easily

explained by the fact that use of “any person” in proposed

§ 107(a)(4)(B) would have overlapped § 107(a)(4)(A). Be-

cause § 107(a)(4)(B) imposes liability for response costs

incurred by governmental entities, “persons” as defined in

§ 101(21), the originally-proposed § 107(a)(4)(B) would

have provided different remedies with different conditions

for “any person,” including both private parties and the

government. Congress added the word “other” to preclude

that duplication. There is no basis for the government’s

speculation that the change from “any person” to “any

other person” was meant to exclude PRPs that would have

been included in the preliminary draft.*

_ The government’s second argument is that there was

no need for Congress to distinguish governmental entities

from private parties by use of the term “any other person”

because the antecedent term “any other necessary costs

of response” in § 107(a)(4B) did so — i.e., those costs,

recoverable by private parties, are different from “all costs

of removal or remedial! action” recoverable by governmen-

tal entities under § 107(a)(4)(A). (Gov't. Br., p. 20.) If

the government were correct, § 107(a)(4)(B) would have

provided “any other necessary costs of response consistent

with the NCP.” This is a hopelessly confusing sentence

* In any evert, as the government concedes, Gov't. Br., p. 19, the

legislative history does not reveal the reason for the change and is not

inconsistent with the fact that PRPs qualify as “other persons” in

§ 107(aX4)(B). See, ¢.g., Martin v. Hadix, 527 U.S. 343, 357 (1999)

(“(T]he inference respondents draw from the legislative history is

speculative ... [because] it rests on [an] assumption [about] the reason

[for the amendment]”) (emphasis in original).

because it requires the reader to infer that “private par-

ties” are the subject of this sentence, rather than govern-

mental entities, and it creates confusion concerning the

nature of, and conditions to recovering, the referenced

response costs.’

Moreover, there are additional problems with the

government’s hypothesis. The government impermissibly

gives the word “other” two different functions in the same

clause: “other” in “other necessary costs” refers to

§ 107(a)(4A), while “other” in “any other person” refers

not to § 107(a)(4)(A), but to § 107(a)(1)-(4), which lists the

four categories of PRPs. Such inconsistencies must be

avoided if possible; repetition of language in a statute

should serve identical functions. See, e.g., Clark v. Marti-

nez, 543 U.S. 371, 378 (2005).

Additionally, the government’s interpretation of “any

other person” conflicts with the rule of the last antecedent,

which states that “a limiting clause or phrase should

ordinarily be read as modifying only the noun or phrase

that it immediately follows.” Jama v. Immigration &

Customs Enforcement, 543 U.S. 335, 343 (2005). The phrase

“any other person” distinguishes those parties entitled to

use § 107(a)(4\(B) from the immediately preceding list of

government entities authorized to use § 107(a)(4)(A).

Finally, if it meant to prevent all PRPs from inclusion

in § 107(a)(4)(B), Congress surely would have done so in

1986, when it added SARA. Instead, Congress confirmed

" Indeed, under the government’s reasoning, its interpretation of

“other” in “other necessary costs” would itself be superfluous. If only

non-PRPs are included in § 107(aX4)B), as the government argues,

those persons cannot recover the costs recoverable by government

entities under § 107(a)(4A), meaning that there is no need for “other”

preceding “costs of response.”

and ratified the interpretation that courts uniformly had

given CERCLA in the period 1980-1986 — holding that

PRPs were included in § 107(a)(4)(B). Indeed, it was the

very fact that § 107(a)(4)(B) rendered PRPs liable to other

PRPs for response costs they incurred, i.e., that PRPs were

included as “other persons” in § 107(a)(4)(B), that led pre-

SARA courts to hold that where a compelled remediator

incurred response costs, that party had an implied right to

seek contribution from other PRPs.

For example, in United States v. New Castle County,

642 F. Supp. 1258 (D. Del. 1986), the court held that while

voluntary remediators had an express right under

§ 107(a)(4)(B) to seek partial cost recovery from other

PRPs for voluntarily incurred first instance response costs,

the issue was not so clear where a compelled remediator

was involved. Because there was some question whether

compelled payments constituted “response costs” at all

under § 107(a)(4)(B), and whether the “any other person”

referenced in § 107(a)(4)(B) included compelled remedia-

tors, and because Congress had not expressly provided

contribution rights for those compelled remediators, the

issue was whether contribution rights could be “implied”

from § 107(a)(4)(B):

The court agrees with the weight of authority

and holds that a private right of action is au-

thorized under CERCLA pursuant to section

107(a)(4)(B). The right of action emanates from

the plain language of the section and provides re-

lief to any person incurring response costs for

which another person is otherwise liable under

the Act.

... Defendant/Third Party Plaintiffs argue that

the same plain language of section 107(a)(4)(B)

which supports a private right of action necessar-

ily authorizes the right of a responsible party

once sued to recover from another responsible

party. This result, however, is not mandated by

the plain language of section 107(a)(4)(B). Two

phrases within section 107(a)(4)(B) raise serious

questions as to the applicability of that provision

as authority for a right to contribution. First, it is

not clear that once a responsible party has been

sued his monetary expenditures to abate an en-

vironmental hazard qualify as ‘necessary costs of

response’ under the Act. Second, it is unclear

whether the phrase ‘any other person’ in section

107(a)(4XB) means only individuals engaged in

voluntary cleanup or whether it also includes in-

dividuals who are CERCLA Defendants engaged

in cleanup compelled by the threat of imminent

statutory liability.

The courts are in basic agreement on the funda-

mental question of whether a right to contribu-

tion exists under CERCLA. Most courts have

held that the right does exist. Still, they have

been unable to agree on the source of that au-

thority. ...

New Castle County, 642 F. Supp. at 1262.

The court proceeded to find that contribution was

available to compelled remediators because § 107(a)(4)(B)

expressly authorized cost recovery by one PRP against

another, and because the legislative history underlying

CERCLA disclosed that Congress authorized courts to

determine a PRP’s right to contribution as a matter of

federal common law. Indeed, to support its conclusion that

compelled remediators had a right to contribution under

§ 107(a)(4)(B), the court referenced the reasons for the

pending SARA amendments, which were reflected in the

legislative commentary:

New subsection 113(f)(1) of CERCLA [contribu-

tion] also ratifies current judicial decisions that

the courts may use their equitable powers to ap-

portion the costs of clean-up among the various

responsible parties involved with the site. Courts

should resolve claims for apportionment on a

case-by-case basis pursuant to Federal common

law, taking relevant equitable considerations into

account. ...

The amendment is necessary because the Su-

preme Court, in recent decisions, has refused to

imply a right of contribution under other statutes

unless expressly stated. These decisions could

create doubt regarding the existence of a right of

contribution under [CERCLA], despite several

recent district court cases correctly confirming

that we intend the law to confer such a right... .

... All of the expert witnesses appearing before

the Committee agree that the right to contribu-

tion should be codified in order to encourage re-

sponsible parties to engage in clean-up and

settlement. The committee proposal would codify

the right and, retaining current law, would allow

a judge the discretion and flexibility to best man-

age the contribution issues in a lawsuit... .

As with joint and several liability issues, contri-

bution will be resolved pursuant to Federal

common law.

New Castle County, 642 F. Supp. at 1267-68, citing 131

Cong. Rec. H11083 (daily ed. Dec. 5, 1985); 131 Cong. Rec.

S11855, 11857 (daily ed. Sep. 20, 1985); S. Rep. No. 11,

99th Cong., 1st Sess. 44 (1988) (emphasis added)."

* In Aviall, supra, 543 U.S. at 162, the Court observed: “After

CERCLA’s enactment in 1980, litigation arose over whether § 107 ...

allowed a PRP that had incurred response costs to recover costs from

(Continued on following page)

The decision in New Castle County is especially

significant because it held that a compelled remediator’s

right to contribution was dependent upon the fact that, as

previous courts had concluded, PRPs had potential re-

sponse cost liability to other PRPs as “other persons”

under § 107(a)(4)(B). This same conclusion was reached by

every pre-SARA court dealing with the issue of a com-

pelled remediator’s implied or common law right to contri-

bution. See, e.g., New York v. Shore Realty Corp., 648

F. Supp. 255, 260 (E.D.N.Y. 1986) (“As a private party,

however, Shore [a compelled remediator] must base its

third party action for contribution from past owners and

operators of the site ... on section 107(a)(4)(B) of CER-

CLA, which allows recovery of response costs ‘consistent

with the [NCP}’”); Sand Springs Home, supra, 670 F. Supp.

at 916-17; Colorado v. ASARCO, Inc., 608 F. Supp. 1484,

1492 (D. Colo. 1985); United States v. Conservation Chem.

Co., 619 F. Supp. 162, 226 (W.D. Mo. 1985).”

other PRPs. More specifically, the question was whether a private party

that had incurred response costs voluntarily and was not itself subject

to suit, had a cause of action for cost recovery against other PRPs.

Various courts held that § 107(a)(4)(B) ... authorized such a cause of

action. [citing Wickland and Stepan, supra] .. . (Litigation also ensued

over the separate question whether a private entity that had been sued in

a cost recovery action (by the Government or by another PRP) could

obtain contribution from other PRPs.” (Emphasis added). Thus, this

Court recognized that the issue of contribution for compelled remedia-

tors was a wholly different issue from whether voluntary remediators

could recover under § 107(a)(4)(B), which pre-SARA courts uniformly

held they could. See also Con. Ed., supra, 423 F.3d at 97-98.

* The government contends that in United States v. Westinghouse

Elec. Corp., IP 83-9-C, 1983 WL 160587 (S.D. Ind. June 29, 1983), the

district court held that PRPs had no implied right to contribution

(Gov't. Br., pp. 5, 27). Notably, Westinghouse did not even mention

§ 107(a)(4)(B) in its decision, and certainly did not hold that PRPs could

not be held liable for response costs incurred by voluntary remediators

(Continued on following page)

Not surprisingly, after SARA’s passage in 1986, which

confirmed and codified a compelled remediator’s implied

right to contribution under § 107(a)(4)(B), courts unani-

mously held that a PRP’s right to contribution in § 113(f)(1)

flowed solely from the fact that under § 107(a)(4)(B), PRPs,

as “other persons,” were liable to other PRPs that incurred

recoverable response costs — that § 113(f) created no new

rights, but provided only the “machinery” for permitting

compelled remediators to obtain contribution from other

PRPs, which had its source in § 107(a)(4)(B). See, e.g.,

Pinal Creek Group v. Newmont Mining Corp., 118 F.3d

1298, 1301-02 (9th Cir. 1996) (“[T]he Pinal Group ... as

‘any other person’ under § 107, can hold other PRPs

liable.... While § 107 creates the right of contribution,

the ‘machinery of § 113’ governs and regulates such ac-

tions, providing the details and explicit recognition that

were missing from the text of § 107.”); United States v.

ASARCO, Inc., 814 F.Supp. 951, 956 (D. Colo. 1993)

(“Section 113(f) ... does not create the right of contribu-

tion — rather, the source of a contribution claim is § 107(a).

Section 107(a) governs liability, while § 113(f) creates a

mechanism for apportioning that liability among responsi-

ble parties.”); Jn the Matter of Reading Co., 115 F.3d 1111,

1118-19 (3rd Cir. 1997) (“The ‘any other costs of response’

language within § 107(a)(4)(B) forms the basis for [plain-

tiff’s] claim for [partial] recovery under that section....

under that provision. Indeed, the plaintiff in Westinghouse based its

implied contribution claim not upon § 107(a), but rather upon § 106.

This was because the defendant in Westinghouse was not even a PRP.

Courts have repeatedly held that, for these reasons, Westinghouse is of

no precedential import. See, e.g., ASARCO, supra, 608 F. Supp. at 1492;

Sand Springs, supra, 670 F. Supp. at 917; Conservation Chem., supra,

619 F. Supp. at 228.

The language of § 113(f), permitting contribution, replaced

the judicially-created right to contribution under

§ 107(a)(4)(B).”); New Castle County v. Halliburton NUS

Corp., 111 F.3d 1116, 1122 (3rd Cir. 1997) (“Section 113

does not in itself create any new liabilities, rather it

confirms the right of a [PRP] under § 107 to obtain contri-

bution from other [PRPs].”); Sun Co. Inc. v. Browning-

Ferris, Inc., 124 F.3d 1187, 1191 (10th Cir. 1997) (“ ...

§ 113(f) did not create a new cause of action, nor did it

create any new liabilities. ... It is no more than a ‘mecha-

nism’ for apportioning CERCLA-defined costs .. . [While a

§ 113 contribution action is not a “cost recovery” action

under § 107... because it does not impose strict joint and

several liability on the defendant PRPs, it ts an action for

recovery of the costs referred to in § 107 ... [A] PRP’s

contribution action seeks to recover costs referred to in

§ 107 from PRPs whose liability is defined by § 107”);

Centerior Service Co., supra, 153 F.3d at 350 (“The gov-

ernment asserts that ... § 107 provides the basis and the

elements of the claim for recovery of response costs and

lists the parties who are liable, as well as defenses to

liability, ... that a § 113(f) action is an action to recover

the necessary costs of response by any other person, as

referred to in § 107. The action only happens to be an

action for contribution. We agree.”).

The holdings in each of these cases was premised

upon the fact that absent a PRP’s right to sue another

PRP for response costs under § 107(a)(4)(B), as one of the

“other persons” referenced therein, there never would

have been an implied right to contribution in the first

place. Stated another way, if, in 1980, Congress had not

authorized PRPs to seek cost recovery from other PRPs in

§ 107(a)(4)(B), as the government now contends Congress

did not, pre-SARA courts would have never overridden

that Congressional intent by implying a right of contribu-

tion from § 107(a)(4)(B).

The government now asks the Court to overrule 25

years of precedent to hold that PRPs are not included in

§ 107(a)(4)(B), and to find that § 113(f) created an exclu-

sive cost recovery remedy for all PRPs, which did not exist

prior to 1986. The government makes this claim despite

the fact that it not only argued in Centerior, supra, that

§ 107(a)(4)(B) is the source of all § 113(f) contribution

rights, but it did the same as an amicus curiae in Aviall:

“Section 107(a)(4)(B)’s reference to ‘any person’ is broad

enough to allow one jointly liable party to sue another for

the former’s response costs.” (Gov’t. Amicus Br., pp. 20-21.)

The Court should reject the government’s volte face.

To adopt the government’s new interpretation of § 107(a)(4)(B)

as excluding PRPs would not only ignore Congress’s intent

in enacting CERCLA and SARA, but would discard the

well-reasoned decisions of countless courts holding just the

opposite. Prior to SARA, courts unanimously held that

voluntary remediators had an express right to seek partial

cost recovery under § 107(a)(4)(B), and compelled remedia-

tors had an implied right to seek contribution. Congress

added §113(f) to remove any doubt about this latter

implied right to contribution. However, Congress left

intact the universally-recognized right of voluntary reme-

diators to seek partial cost recovery under § 107(a)(4)(B).

As the Court of Appeals noted below, if Congress had

intended SARA to withdraw the well-established right of

voluntary remediators to recover a portion of their re-

sponse costs under § 107(a)(4)(B), Congress would have

done so explicitly. 459 F.3d at 836." Not only did Congress

not do so, but it emphasized that SARA was intended to

confirm and ratify pre-SARA decisions interpreting

§ 107(a)(4)(B). Both prior to and after SARA, PRPs were

and are among the “other persons” referenced in

§ 107(a)(4)(B).

B. The Government’s Interpretation Of

§ 107(a)(4)(B) Conflicts With § 111(a).

In addition to providing parties with the opportunity

to recover response costs from other PRPs, CERCLA

created the so-called “Superfund” to help pay for cleanup

costs. The primary purposes for which the Superfund was

created were to finance “governmental response” and to

pay “claims.” Exxon Corp. v. Hunt, 475 U.S. 355, 360

(1986). To this end, § 111(a) provides, inter alia:

The President shall use the money in the Fund

for the following purposes:

(1) Payment of governmental response costs in-

curred pursuant to § 9604 of this title ... [i.e.,

costs incurred by the United States to investigate

and clean up sites].

(2) Payment of any claim for necessary re-

sponse costs incurred by any other person as a

result of carrying out the national contingency

plan... . (emphasis added).

This fact is consistent with this Court’s characterization of the

SARA amendments. Aviall, supra, 543 U.S. at 162-63, and n.8, supra.

Also, as this Court has made clear, “it is not only appropriate but also

realistic to presume that Congress was thoroughly familiar with these

unusually important precedents ... and that it expected its enactment

to be interpreted in conformity with them.” Cannon v. Univ. of Chicago,

441 U.S. 677, 699 (1979).

The § 111(a)(1) and (a)(2) language closely parallels

the § 107(a)(4)(A) and (B) language: compare “payment of

governmental response costs incurred pursuant to § 9604

of this title” (§ 111(a)(1)) to “all costs of removal or reme-

dial action incurred by the United States Government...

not inconsistent with the [NCP]” (§ 107(a)(4)(A)), and

“payment of any claim for necessary response costs in-

curred by any other person as a result of carrying out the

[NCP]” (§ 111(a)(2)) to “any other necessary costs of re-

sponse incurred by any other person consistent with the

{NCP]” (§ 107(a)(4)(B)). This statutory parallelism estab-

lishes that the phrase “any other person” in § 111(a)(2)

refers to any person other than a governmental entity, and

the same phrase in § 107(a)(4)(B) has the same meaning.

Because PRPs are included in the term “any other person”

in § 111(a)(2), see 40 C.F.R. § 300.700(d)(5) and 307.22(b)

(permitting PRPs to recover from the Superfund), PRPs

are included in the same “any other person” language in

§ 107(a)(4)(B).

C. The Government’s Interpretation Of

§ 107(a)(4)(B) Conflicts With The EPA’s In-

terpretation Of That Provision.

If the government’s position is that § 107(a)(4)(B)

clearly excludes PRPs, one has to ask why the EPA itself,

for over 20 years, has consistently taken the position that

the phrase “any other person” in § 107(a)(4)(B) refers to

persons “other than a governmental entity,” not “other

than a PRP.” When the EPA proposed amendments to the

NCP in 1985, it specifically stated that PRPs could bring

claims under § 107(a)(4)(B): “The new § 300.71 addresses

the requirements the NCP imposes on parties other than

the lead agency (including responses by responsible

parties, other private parties and Federal and State gov-

ernments).” 50 Fed. Reg. 5862, 5870 (1985) (emphasis

added). Because a “responsible party’s” satisfying the NCP

is relevant only if that party may recover response costs

under § 107(a)(4)(B), the EPA’s directive necessarily means

that, in the EPA’s view, § 107(a)(4)(B) includes PRPs

within its scope.

If there were any doubt, it is resolved by the current

C.F.R. provisions, which unequivocally provide that “any

person,” including PRPs, may recover response costs under

§ 107(a)(4)(B). 40 C.F.R. § 300.700, which addresses NCP

requirements for “other persons,” states:

(2) Responsible parties shall be liable for neces-

sary costs of response actions to releases of haz-

ardous substances incurred by any other person

consistent with the NCP.

(3) For purposes of cost recovery under

§ 107(a)(4)(B) of CERCLA:

(ii) any response action carried out in compli-

ance with the terms of an order issued by EPA

pursuant to § 106 of CERCLA, or a consent de-

cree entered into pursuant to § 122 of CERCLA,

will be considered ‘consistent with the NCP’.

Because only PRPs may be the subject of a § 122

consent decree or a § 106 order, the EPA has acknowledged

that PRPs are “other persons” under § 107(a)(4)(B). The

government’s claim that PRPs are excluded from that

provision cannot be reconciled with the regulations en-

acted by the agency designated to enforce CERCLA. As

this Court has repeatedly recognized, an agency’s interpre-

tation of its regulations is “of controlling weight unless it

is plainly erroneous or inconsistent with the regulations.”

Udall v. Tallman, 380 U.S. 1, 16-17 (1965), quoting Bowles

v. Seminole Rock & Sand Co., 325 U.S. 410, 414 (1945).

The government’s recent about-face is inconsistent with

EPA’s longstanding and justified interpretation of its own

regulations.

D. Acceptance Of The Government’s Inter-

pretation Of § 107(a)(4)(B) Would Have

Unreasonable Consequences.

The government’s premise that Congress intended to

provide PRPs that are compelled to engage in response

a * ons, or to pay for them, with the right to obtain partial

cost recovery under § 113(f), but to deny cost recovery to

all voluntary remediators, is manifestly unreasonable and

contrary to public policy. As the Court of Appeals observed

below: “We discern nothing in CERCLA’s words suggesting

Congress intended to establish a comprehensive contribu-

tion and cost recovery scheme encouraging private cleanup

of contaminated sites, while simultaneously excepting —

indeed penalizing — those who voluntarily assume such

duties.” 459 F.3d at 836. The fact is SARA did not disturb

the well-recognized right of PRPs that voluntarily incur

first instance response costs in cleaning up contaminated

sites to obtain partial cost recovery under § 107(a)(4)(B).

See pp. 15, 19-20 and nn.8 and 10, supra. SARA was

enacted to address contribution issues only, and confirmed

the right to contribution for compelled remediators. The

§ 107(a)(4)B) right to partial cost recovery by voluntary

remediators was explicit and well-established; it needed

no Congressional confirmation. As the Court of Appeals

observed in this case, “[I)f Congress intended Section 113

to completely replace Section 107 in all circumstances,

even where a plaintiff was not eligible to use Section 113,

it would have done so explicitly.” 459 F.3d at 836.

Finally, the government's interpretation of § 107(a)(4)(B)

would produce uniquely unreasonable results at the many

thousands of sites — including the site at issue in this case

— that have been contaminated by departments and

agencies of the United States itself. These include not just

the sites actually owned and operated by the United

States, but also the many private sites to which the United

States has contributed hazardous waste. If the govern-

ment’s interpretation of § 107(a)(4B) were correct, absent

state action at a site, the government is effectively insu-

lated from liability because no voluntary remediator, such

as ARC, can ever recover response costs from the govern-

ment.

Section 120(a)(1) of CERCLA provides that the United

States is liable “in the same manner and to the same

extent ... as any non-governmental entity, including

liability under [§ 107].” Significantly, EPA has long been

prohibited from proceeding against other federal agencies

under CERCLA (see Exec. Order No. 12580, § 4(a), 52 Fed.

Reg. 2923 (Jan. 23, 1987)). Thus, the government’s inter-

pretation of § 107(a)(4)(B) necessarily means that unless a

State sues a PRP, or enters into a settlement agreement

with a PRP, including the United States, the latter can

avoid all CERCLA liability by simply deciding not to sue,

or to enter into any settlement agreement with, a PRP.

This result undermines the Congressional purpose of

§ 120(a), i.e., placing the United States on an equal footing

with private PRPs. This is particularly problematic be-

cause the United States, unlike private PRPs, cannot be

sued under state law in state courts.

While none of these facts was terribly significant prior

to Aviall because a pending or completed CERCLA civil

action was not a §113(f) prerequisite for recovering

response costs, after Aviall, the absence of any enforce-

ment action by the United States would effectively provide

the government with a “get out of jail free card,” unless a

given state takes action to remediate a site. It was this

claim to quasi-immunity by the government that lead the

Eighth Circuit to characterize the government’s claim that

voluntary remediators have no cost recovery claim under

§ 107(a)(4)(B) as “bizarre:”

A contrary ruling, barring [ARC] from recovering

a portion of its costs, is not only contrary to

CERCLA’s purpose, but results in an absurd and

unjust outcome. Consider: in this, of all cases,

the United States is a liable party (who else has

rocket motors to clean?). It is, simultaneously,

CERCLA’s primary enforcer at this, among other

Superfund sites. ... -

If we adopted the Government’s reading of § 107,

the government could insulate itself from re-

sponsibility for its own pollution by simply

declining to bring a CERCLA cleanup action

or refusing a liable party’s offer to settle. This

bizarre outcome would eviscerate CERCLA

whenever the government, itself, was partially

responsible for a site’s contamination.

The Court, then, concludes Congress resolved the

question of the United States’ liability 20 years

ago. It did not create a loophole by which the Re-

public could escape its own CERCLA liability by

perversely abandoning its CERCLA enforcement

power. Congress put the public’s right to a clean

and safe environment ahead of the sovereign’s

traditional immunities.

459 F.3d at 837 (emphasis added). This Court should

similarly reject the government’s irrational interpretation

_of § 107(a)(4)(B).

E. The Government’s Interpretation Of

§ 107(a)(4)(B) Also Undermines The Prin-

cipal Purposes Underlying CERCLA.

For 25 years, courts have repeatedly recognized

CERCLA’s principal purposes are to achieve the swift,

effective and voluntary clean up of contaminated sites and

to make those responsible for the contamination pay for

the cleanups. See, e.g., H.R. Rep. No. 96-1016, pt. 1, at 16-

17 (1980) (CERCLA “would also establish a federal cause

of action ... to induce such persons voluntarily to pursue

appropriate environmental response actions.”); 131 Cong.

Rec. 24725, 24730 (1985) (“The goal of CERCLA is to

achieve effective and expedited cleanup.... One impor-

tant component ... must be the encouragement of volun-

tary cleanup actions or funding without having the

President rely on the panoply of administrative and

judicial tools available.”). See also Key Tronic v. United

States, 511 U.S. 809, 815, n.6 (1994); Artesian Water Co.,

supra, 605 F. Supp. at 1356; Bulk Distribution Centers,

supra, 589 F. Supp. at 1443-44; Colorado v. ASARCO, Inc.,

supra, 608 F. Supp. at 1491.

The government’s interpretation of § 107(a)(4)(B)

would defeat rather than advance the Congressional

purposes underlying CERCLA. First, by excluding PRPs

from § 107(a)(4)(B), the government would discourage

PRPs from undertaking prompt cleanups on a voluntary

basis; PRPs would have a disincentive to clean up contami-

nated sites. Second, the government’s interpretation of

§ 107(a)(4)(B) violates the “polluter pays” principle. Here,

although both ARC and the United States (Department of

Defense) are responsible for the contamination, ARC bears

100% of the cost, and the United States avoids liability

- altogether.

This clash with the principal purposes of CERCLA,

among other reasons, prompted the Second, Seventh and

Eighth Circuits to reject the government’s interpretation

of § 107(a)(4)(B). As the Seventh Circuit observed in

Metropolitan Water, supra, 473 F.3d at 836:

... [W]e are concerned that prohibiting suit by a

voluntary plaintiff like Metropolitan Water may

undermine CERCLA’s twin aims of encouraging

expeditious, voluntary environmental cleanups

while holding responsible parties accountable for

the response costs that their past activities

induced. As Consolidated Edison, Atlantic Re-

search, and several post-Cooper Industries dis-

trict court decisions have recognized, in order to

further CERCLA’s policies, potentially responsi-

ble parties must be allowed to recover response

costs even before they have been sued themselves

under CERCLA or have settled their CERCLA li-

ability with a government entity. Were a cost re-

covery action unavailable in these circumstances,

the Second Circuit reasoned, ‘such parties would

likely wait until they are sued to commence

cleaning up any site for which they are not exclu-

sively responsible because of their inability to be

reimbursed for cleanup expenditures in the ab-

sence of a suit.’ Consol. Edison, 423 F.3d at 100.

As the court concluded, this result ‘would under-

cut one of CERCLA’s main goals, encouraging

private parties to assume the financial responsi-

bility of cleanup costs by allowing them to seek

recovery from others.’

| See also dissenting opinion of Judge Sloviter in E. J. du

Pont de Nemours & Co. v. United States, 460 F.3d 515,

547-49 (3rd Cir. 2006)."

The government’s proffered interpretation of

§ 107(a)(4)(B), excluding PRPs from its scope, undermines

CERCLA’s goals as it will inevitably discourage and delay

cleanups. PRPs at the vast majority of contaminated sites

where there is no governmental suit or settlement will

escape having to pay anything because there will be no

CERCLA mechanism to provide cost recovery to PRPs who

want to do the right thing and voluntarily clean up con-

taminated sites. Moreover, the government can largely

avoid its responsibility for cleaning up a site simply by

taking no enforcement action. Such results cannot be

countenanced; a// PRPs unquestionably fall within “other

persons” language in § 107(a)(4)(B), as every court consid-

ering the issue for the last 25 years has held.

II. VOLUNTARY REMEDIATORS, SUCH AS ARC,

HAVE A VIABLE COST RECOVERY ACTION

UNDER § 107(a)(4)(B).

Because PRPs are included in the term “any other

person” in § 107(a)(4)(B), application of that provision in

this case results in the following statutory directive: “[The

United States] shall be liable for ... necessary costs of

response incurred by [ARC] consistent with the [NCP].”

Regardless of whether this language is deemed to create

an express cause of action or only an implied one in favor

of ARC,” it undisputedly creates a cause of action. The

" These recent observations are nothing new. As far back as 1986,

in New Castle County, supra, 642 F. Supp. at 1264-65, the court came to

the very same conclusions.

" See Key Tronic, supra, 511 U.S. at 818 and n.11, 822.

only remaining question is whether that cause of action

may be asserted under § 107(a)(4)(B), or whether it must

be asserted exclusively under § 113(f), as the government

maintains.

Section 113(f), as its heading denotes, governs actions

for contribution. As previously observed, contribution is a

remedy available to persons who are jointly liable to a

third party, and one of the jointly-liable parties is com-

pelled to pay more than its fair share of that liability. See

Centerior, supra, 153 F.3d at 350-51; Con. Ed., supra, 423

F.3d at 97-98. Prior to § 113(f) becoming a part of CERCLA

in 1986, courts were confronted with two separate and

distinct issues relating to cost recovery by PRPs: (1)

whether voluntary remediators could recover a portion of

their response costs from other PRPs directly under

§ 107(a)(4)(B), and (2) whether compelled remediators

could recover a portion of their response costs from other

PRPs as “contribution” under CERCLA.

The first issue was easily resolved — courts unani-

mously held that voluntary remediators had a right to

obtain partial cost recovery under § 107(a)(4)(B). See

supra, pp. 13-20. Contribution was not even an issue in ~

these cases because plaintiff PRPs were not compelled to

undertake any cleanup action or to pay for any such action

undertaken by others, and there was no joint liability with

any other PRP. Indeed, voluntary remediators, while

potentially responsible for cleaning up a site or paying for

a cleanup, were not actually liable under CERCLA at all;

this was because no other person had incurred any re-

sponse costs at the site (including the absence of enforce-

ment activities) — a necessary condition for the accrual of

any CERCLA liability. Thus, the issue of contribution did

not even arise in these cases.

The issue not so easily resolved was whether com-

pelled remediators had a right to contribution from other

PRPs, a right not expressly found in § 107(a)(4)(B). These

compelled remediators had been required to perform a

response action or to pay for a response action and were

jointly liable with other PRPs. Pre-SARA courts held that

a right to contribution could be implied from the provi-

sions in § 107(a)(4)(B), and the “savings clause” in

§ 107(e)(2). See pp. 15-20, 23-24, supra. Section 113(f) was

added in 1986 to confirm and codify this right to contribu-

tion. It is undisputed that Congress did not intend to

modify, curtail or withdraw any other right of cost recovery

provided in § 107(a), such as the right voluntary remedia-

tors had to obtain partial cost recovery under

§ 107(a)(4)(B). Id.

Although post-SARA appellate decisions erroneously

determined that all claims for partial cost recovery could

be maintained under § 113(f), i.e., claims by voluntary

remediators and compelled remediators alike, which Aviall

corrected, there is no question but that this “correction”

did not disturb the fact that, as all pre-SARA courts had

held, voluntary remediators have a right to seek partial

cost recovery from other PRPs. Now, as was the case prior

to the post-SARA courts’ misdirecting all claims for partial

cost recovery to § 113(f), the source of partial cost recovery

for voluntary remediators is § 107(a)(4)(B). See Con. Ed.,

supra, 423 F.3d at 100. The government’s arguments to the

contrary not only repudiate the position it took as an

amicus curiae in Metropolitan Water, to the effect that

§ 107(a)(4)(B) permits cost recovery by parties who per-

form a cleanup without having any actual CERCLA

liability or obligation to do so, see pp. 5-6, supra, but the

government’s arguments do not withstand analysis in any

event.

A. Allowing A Voluntary Remediator To Pro-

ceed Under § 107(a)(4)(B) Has No Effect

On The Applicable Statute Of Limitations.

The government first argues that if § 107(a)(4)(B) is-

interpreted to permit voluntary remediators to initiate

cost recovery actions, it would allow them to avoid the

shorter 3-year statute of limitations applicable to contribu-

tion claims brought pursuant to §§113(f)(1) and

113(f(3)(B), which is contained in § 113(g)(3) — that it

would inappropriately enable voluntary remediators to

“elect” the longer 6-year statute of limitations for cost

recovery actions contained in § 113(g)(2). (Gov't. Br., p. 30-

31.) This is untrue.

There is no “option” afforded any PRP to “elect” which

statute of limitations applies. Rather, the applicable

statute of limitations is defined by the language in

§§ 113(g)(2) and (g)(3). Even a cursory reading of those

provisions discloses that the 3-year statute of limitations

in § 113(g)(3) applies only to contribution actions by PRPs

seeking reimbursement for response costs they have been

compelled to pay to another party, either by way of judg-

ment or by settlement. The 3-year statute of limitations

provision does not apply to first instance response costs.

Courts have repeatedly held that all actions for first

instance response costs, whether asserted in a cost recov-

ery claim under § 107(a)(4)(B), i.e., by a voluntary reme-

diator, or in a contribution action under § 113(f)(1), i.e., by

a compelled remediator, are not governed by the 3-year

statute of limitations in § 113(gX3), but by the 6-year

statute of limitations in § 113(g)2). See, e.g., Taylor, supra,

909 F. Supp. at 365; Centerior, supra, 153 F.3d at 355; Sun

Co. Inc., supra, 124 F.3d at 1192-93; Pinal Creek, supra,

118 F.3d at 1305, n.7."" Recognizing that voluntary reme-

diators have a viable § 107(a)(4)(B) action does not provide

them with any “option” to elect a more favorable statute of

limitations.

B. Nothing In CERCLA Requires Courts To

Impose Joint And Several Liability In

All Cost Recovery Actions Brought Under

§ 107(a)(4)(B).

Next, the government contends that if voluntary

remediators may assert § 107(a)(4)(B) claims against other

PRPs, the former would be able to impose joint and several

liability for indemnity upon the latter, thus rendering

them liable for contamina-ion caused by every other PRP,

including those no longer in existence or no longer solvent

(i.e., for so-called “orphan shares” of liability). According to

the government, this is inappropriate because voluntary

remediators must bear some responsibility for contamina-

tion at a site, and thus can recover only an equitable share

of response costs, a “quintessential contribution claim”

governed by § 113(f). The result, according to the govern-

ment, is that § 113(f) is the sole source of a voluntary

remediator’s right to partial cost recovery. (Gov't. Br., pp.

13, 31-34, 37.) There are a number of flaws in the govern-

ment’s characterization of § 107(a)(4)(B) and § 113(f).

* Notably, a PRP’s settlement with the United States or a State,

which may lead to a contribution action under § 113(f{3)(B), includes

settlements involving “costs of a response action,” i.e., compelled “cost

reimbursement,” and, sepxrately, settlements resulting in the PRP’s

undertaking a compelled first-instance response action, i.e., “for some or

all of a response action.”. A contribution action filed after this latter

type of settlement is necessarily governed by the 6 year statute of

limitations in § 113(g)(2).

First, a claim for partial cost recovery is not a “quin-

tessential claim for contribution.” Contribution always

requires compelled payment by a party sharing a common

or joint liability with another. See, e.g., Centerior, supra,

153 F.3d at 350-51; Con. Ed., supra, 423 F.3d at 97-98.

While several liability, as opposed to joint and several

liability, is a result of a successful contribution claim, it is

not an element of that claim. The fact that a plaintiff is

entitled to impose only several liability upon another party

does not convert the claim into one for contribution.”

Second, nothing in CERCLA requires the imposition of

joint and several liability under § 107(a)(4)(B). As the

Court of Appeals held below, “ ... § 107 is not limited to

parties seeking to recover 100% of their costs.” 459 F.3d at

835. Rather, the issue of whether joint and several liability

is appropriate under § 107(a)(4)(B) was intended by

Congress to be determined by the courts on a case-by-case

basis, employing principles of equity and fulfilling the

purposes of CERCLA.

Beginning in 1983, in United States v. Chem-Dyne

Corp., 572 F. Supp. 802 (S.D. Ohio 1983), courts have held,

with unanimity, that § 107(a)(4)(A) cost recovery actions

by governmental entities result in joint and several

liability requiring indemnity. These courts reasoned that

joint and several liability was necessary to promote the

effective enforcement of CERCLA by governmental! enti-

ties, and best enabled the United States to recover its own

expenditures and replenish the Superfund. Chem-Dyne,

“ Significantly, issues of joint and several liability versus several

liability only arise where there are multiple sources of liability. If there

is only one liable party, the plaintiff’s contributory responsibility for

harm is typically the subject of an affirmative defense, much like

contributory negligence.

supra, 572 F. Supp. at 808; United States v. Kramer, 757

F. Supp. 397, 416-17 (D.N.J. 1991); United States v. A& F

Materials Co., supra, 578 F. Supp. 1249, 1255.”

With little analysis, most courts also held that

§ 107(a)(4)(B) actions would result in joint and several

liability for indemnity, subject to a contribution counter-

claim. See, e.g., Taylor, supra, 909 F.Supp. at 364-66;

- Kramer, supra, 757 F. Supp. at 416-17; Chesapeake, supra,

814 F. Supp. at 1278-79; Adhesives Research, supra, 931

F. Supp. at 1243-44; Charter Township of Oshtemo v. The

Upjohn Co., 910 F. Supp. 332, 337 (W.D. Mich. 1995); Cos.

for Fair Allocation, supra, 853 F. Supp. at 579-80; Trans-

portation Leasing Co. v. California, 961 F. Supp. 931, 938

(C.D. Cal. 1992). The principal reason given was the

perceived need to provide a sufficient incentive for PRPs to

voluntarily clean up sites. The courts believed that absent

the financial incentive provided by joint and several

liability for indemnity, governmental entities would be

forced to expend their limited resources to either perform

the cleanups themselves or to compel them — an undesir-

able result. Jd. :

A number of courts, however, observed that joint and

several liability is not necessarily appropriate in all

§ 107(a)(4)(B) actions — that there may be policy reasons

or equitable considerations precluding its application. In

A&F Materials, supra, 578 F. Supp. at 1255-56, after a

“ Governmental entities recovering under § 107(aX4)(A) would be

subject to contribution counterclaims or contribution-type equitable

offsets. See, e.g., United States v. Mottolo, 605 F. Supp. 898, 910-11

(D.N.H. 1985); Kramer, supra, 757 F. Supp. at 412-17; Conservation

Chemical, supra, 619 F. Supp. at 205; Taylor, supra, 909 F. Supp at 362.

Also, “orphan shares” would be subject to allocation in that counter-

claim. See n.16, infra.

thorough review of CERCLA’s legislative history, the court

concluded that Congress intended courts to determine

the scope of liability on a case-by-case basis, and that

§ 107(a)(4)(B) claims, in appropriate cases, could result in

several liability only.

A & F was followed by Allied Chemical Corp. v. Acme

Solvents Reclaiming Inc., 691 F. Supp. 1100, 1115-16 (N.D.

Til. 1988):

Though the amendments under SARA are silent

on the scope of liability under Section 107, the

House did comment on the issue. In its report,

the House stated that it ‘fully subscribes to the

reasoning of the court in the seminal case of U.S.

uv. Chem-Dyne ... which established a uniform

federal rule allowing for joint and several liabil-

ity in appropriate CERCLA cases.’ (emphasis

added.)

The court in Allied held that a “moderate approach” to

joint and several liability, adopted in A & F, was appropri-

ate:

The moderate approach involves employing the

Chem-Dyne-Restatement rule as a general rule

susceptible to exceptions. Under the moderate

approach, if the court finds that the injury is in-

divisible, the court has the discretion to hold the

defendants jointly and severally liable. The court

may, on the other hand, reject joint and several

liability, regardless of the indivisibility of the

harm, where the peculiar facts of the case point

to a more fair apportionment of liability.

691 F. Supp. at 1116-18; see also Barton Solvents, Inc. v.

Southwest Petro-Chem, Inc., 1993 U.S. Dist. LEXIS 14337,

38 E.R.C. 1022 (D. Kan. 1993); In the Matter of Bell

Petroleum Services, Inc., 3 F.3d 889, 895-902 (5th Cir.

1993); United States v. Burlington Northern & Santa Fe

- 36

Ry. Comm., No. 03-17169, *3224-3229 (9th Cir., March 16,

2007).”°

While, hypothetically, there might be some circum-

stances justifying the imposition of joint and several

li.ulity for indemnity in § 107(a)(4)(B) actions, typically,

the relief should be several liability — a contribution-like

remedy permitting partial cost recovery. In any event, the

issue is immaterial here. This is because ARC acknowl-

edges that where a § 107(a)(4)(B) action is brought against

the United States as a PRP, liability should be several -

only. There is no compelling policy reason supporting the

imposition of joint and several liability upon the United

States in cases such as this one; while the United States

should be financially responsible for its own share of the

contamination at a given site, taxpayers should not have

to assume the liability of all other enterprises contributing

to the contamination.

Because ARC does not seek to impose joint and sev-

eral liability for full cost recovery against the United

States, the so-called “joint and several liability” issue

identified by the government is immaterial to the outcome

of this case — all that ARC could ever expect to recover

from the United States are the costs ARC has incurred

exceeding its own fair share of responsibility.

* The apportionment of so-called orphan shares, if any, would be

resolved in apportionment proceedings. Under § 107(a4\B), courts can

and have allocated orphan shares among PRPs, including a plaintiff

PRP. See, e.g., Charter Township of Oshtemo v. Am. Cyanamid Co., 898

F. Supp. 508-09 (W.D. Mich. 1995); United States v. Davis, 31

F. Supp. 2d 45, 62 (D.R.I. 1998); Chesapeake & Potomac, supra, 814

F. Supp. at 1277-78; Town of Windsor v. TESA Tuck, Inc., 919 F. Supp.

662, 681-82 (S.D.N.Y. 1996); JAMES T. O'REILLY & CAROLINE BROWN,

RCRA AND SUPERFUND: A PRACTICE GUIDE, § 14.58 (citing cases)

(“(Njothing in CERCLA prohibits allocating portions of the orphan

shares to [PRPs].”).

C. Courts Retain The Power To Protect Set-

tling PRPs.

The government next contends that if voluntary

remediators are allowed to bring cost recovery actions

under § 107(a)(4)(B), they would be able to eviscerate the

§ 113(f)(2) contribution protection afforded compelled

remediators that have resolved their liability to the United

States or a State in an administrative or judicially-

approved settler>-xt. (Gov't. Br., pp. 13, 37-39.) Once

again, the government invents a problem that does not

exist.

The contribution bar in § 113(f)(2) applies to settle-

ments with the United States or a State “regarding mat-

ters addressed in the settlement.” The reach of the

settlement agreement, then, is limited by what comes

within the definition of “matters addressed.” Parties other

than the settling governmental entity may assert claims

under § 107(a)(4)(A) and § 107(a)(4)(B) against a settling

party where the claim is not one coming within the “mat-

ters addressed” in the settlement. See, e.g., Akzo Coatings

Inc. v. Aigner Corp., 30 F.3d 761, 765-70 (7th Cir. 1994). If

the settlement only resolves costs incurred, or to be

incurred, by the settling governmental entity, the scope of

the contribution protection would not protect the settling

party from a voluntary remediator’s § 107(a)\4)(B) claim

for partial cost recovery — that would not constitute a

benefit the compelled remediator received as part of

“settling its liability.” However, if the settling party re-

solved its liability for response costs incurred by any

person, including costs incurred by voluntary remediators,

the contribution protection arguably would extend to

§ 107(a)(4)(B) claims by voluntary remediators. Jd.

The fact that § 107(a)4)(B) claims by voluntary.

remediators are not contribution claims per se, does not,

however, enable voluntary remediators to avoid the effect

of the contribution bar where the compelled remediator’s

settlement with the governmental entity actually provides

that protection. This is because, as previously noted, joint

and several liability is not mandated for all § 107(a)(4)(B)

actions by voluntary remediators. Rather, courts may

always protect settling parties, where appropriate, by

limiting the liability of the settling party to the liability it

has discharged in its settlement agreement with the

governmental entity. In this manner, compelled remedia-

tors will receive precisely the same settlement protection

they would obtain in any contribution claim against them.

Recognizing a voluntary remediator’s right to obtain

partial cost recovery under § 107(a)(4)(B) will not permit it

to make an end-run around the § 113(f)(2) settlement

protection afforded settling parties as the government

maintains.

D. The Availability Of § 107(a)(4)(B) Cost Re-

covery Claims Will Not Deter Settlements.

Next, the government claims that if voluntary reme-

diators are allowed to bring cost recovery actions under

§ 107(a)(4)(B), there would be no incentive for those

entities to enter into settlements with the United States or

a State, because that would relegate them to seeking

contribution from other PRPs under § 113(f)(3\B). Accord-

ing to the government, this disincentive results from the

“fact” that § 107(a)(4)(B) provides more generous remedies,

including a longer statute of limitations, joint and several

liability, indemnity, the ability to avoid the statutory bar

precluding contribution actions against settling parties,

etc. (Gov't. Br., pp. 13-14, 31, 36-43.) Also, the government

suggests that negotiated settlements are necessary to

allow the government to directly control and supervise

cleanups. (Gov’t. Br., pp. 41-43.) Once again, the govern-

ment is mistaken.

As previously noted, none of the government’s so-

called “advantages” of § 107(a)(4)(B) claims actually exists.

Moreover, the availability of a § 107(a)(4)(B) cost recovery

claim for voluntary remediators will not deter settlements;

PRPs in ARC’s position will still have a strong incentive to

settle with the government because absent such a settle-

ment, they may later become the subject of a government

enforcement action or a cost recovery action. Also, settling

parties enjoy the contribution immunity afforded by

§ 113(f)(2), and whenever a party undertakes a first

instance response action pursuant to settlement with the

government, the costs of such an action are deemed

consistent with the NCP, thereby precluding the settling

party from having to establish compliance with the NCP in

order to recover response costs from others. See 40 C.F.R.

§ 300.700(c)(3ii). Establishing compliance with the NCP

is both critical and onerous, however, when a voluntary

remediator seeks cost recovery under § 107(a)(4B). See

§ 300.700(c)\(3)i) and 300.700(c)(5) and (6).

While the government may view cleanups undertaken-

pursuant to settlements as “preferable” to unsupervised

voluntary cleanups, CERCLA manifestly does not require

government approval in actions brought pursuant to

§ 107(a)(4)(B), as in the case where a party seeks recovery

from the Superfund under § 111(a)(2). See, e.g., Wickland,

supra, 792 F.3d at 891-92; Pinole Point, supra, 596

F. Supp. at 289-90; Allied Chemical, supra, 691 F. Supp. at

1106-08; 40 C.F.R. § 300.700(d) (requiring pre-authorization

from the EPA). Even the government concedes that sua

sponte cleanups are better than no cleanup (Gov't. Br., pp.

41-42.). Indeed, as Judge Sloviter, dissenting in E. I. du

Pont, supra, 460 F.3d at 549, recognized, it is one thing to

encourage settlements, it is another to require them as a

condition to obtaining partial cost recovery.

The EPA’s expressed concerns about the quality of

voluntary cleanups, referenced in the government’s brief,

pp. 40-43, hardly means that the EPA was suggesting to

throw the baby out with the bath water - rather, instead

of requiring settlements with government entities, which

the government cannot be compelled to conclude, EPA

encouraged settlements to avoid later problems with

establishing that the remedial action complied with the

NCP - otherwise, voluntary remediators have to carefully

tailor their response activities to ensure compliance. The

EPA also suggested, not mandated, some government

involvement to ensure that site closure could be accom-

plished, and so that voluntary remediators would be able

to obtain partial cost recovery from other PRPs, rather

than face potential enforcement action by the government.

E. The Government’s Reliance On Pre-Aviall

Case Law Is Misplaced.

Finally, in arguing that § 113(f) is the sole cost recov-

ery remedy available to voluntary remediators, the gov-

ernment relies on pre-Aviall cases holding that PRPs could

only sue for cost recovery allocation under § 113(f), not

§ 107(a)(4)(B). (Gov't. Br., pp. 6, n.5, 30-31.) The essential

predicate wnderlying all of trese decisions was the mis-

taken view that § 107(a)(4)(B) necessarily imposed joint

and several liability for indemnity, whereas § 113(f)

provided the sole statutory basis for partial cost recovery,

i.e., several liability, and that § 113(f) permitted partial

cost recovery by all PRPs, regardless of whether any § 106

or § 107(a) action had been filed, regardless of whether

any given PRP was jointly liable with anyone, and regard-

less of whether response costs had been compelled by

order, judgment or settlement. The courts’ collective

erroneous view of § 113(f) led them to conclude that

§ 113(f) would be rendered superfluous if partial cost

recovery or “several liability” claims were recognized

under § 107(a)(4)(B) — meaning that only non-PRPs could

use that provision, as only non-PRPs are entitled to full

cost recovery or indemnity. See cases cited in Gov't. Br., p.

6, n.5. As the Eighth Circuit described it, this “traffic

directing” by pre-Aviall courts, compelling all PRPs to use

§ 113(f) to obtain partial cost recovery, “dramatically

narrowed § 107 by judicial fiat.” 459 F.3d at 832.

The first court to reject the flawed premise underlying

the pre-Aviall cases was the Second Circuit Court of

Appeals, in Con. Ed., supra, holding that voluntary reme-

diators have a right to assert a § 107(a)(4)(B) cost recovery

claim, whereas compelled remediators are confined to

§ 113(f) contribution actions. 423 F.3d at 100-102. The

court distinguished its pre-Aviall decision in Bedford

Affiliates v. Sills, 156 F.3d 416, 424 (2nd Cir. 1998), on the

ground that the PRP seeking cost recovery in that case

had incurred response costs only after having entered into

a consent decree, i.e., only after resolving its liability as a

compelled remediator.” Jd. See also Schaefer v. Town of

" The court in Con. Ed. held that to the extent that § 107(a4)(B)

permitted full cost recovery, the PRP defendart could file a § 113(f\1)

counterclaim for contribution, thereby reducing the plaintiff PRP’s

recovery by its allocated share of responsibility. 423 F.3d at 100, n.9.

The court did not mention the issue of joint and several liability.

(Continued on following page)

Victor, 457 F.3d 188 (2nd Cir. 2006) (holding that response

costs incurred before entering into a consent order were

recoverable under § 107(a)(4)(B) because the plaintiff was

a voluntary remediator at that time).

After Con. Ed., the Eighth Circuit Court of Appeals in

the present case agreed with the Second Circuit, holding

that voluntary remediators may seek partial cost recovery

under § 107(a)(4)(B), and also holding that this provision

is not confined to claims seeking full cost-recovery or

indemnity:

We recognize that § 107 allows 100% cost recov-

ery. Some pre-Aviall cases justified denying li-

able parties access to § 107, reasoning Congress

would not have intended them to recover 100% of

their costs and effectively escape liability . . .

But § 107 is not limited to parties seeking to cover

100% of their costs. To the contrary, the text of

§ 107(a4)(B) permits recovery of ‘any other neces-

sary costs of response ... consistent with the na-

tional contingency plan.’ While these words may

‘suggest full recovery,’ .. . they do not compel it... .

CERCLA, itself, checks overreaching liable parties:

If a plaintiff attempted to use § 107 to recover more

of its fair share of reimbursement a defendant

would be free to counterclaim for contribution un-

der § 113(f). Consolidated Edison, 423 F.3d at 100,

n.9; Redwing Carriers, 94 F.3d at 1495. Accord-

ingly, we find that allowing Atlantic’s claim for di-

rect recovery under § 107 is entirely consistent

with the text and purpose of CERCLA.

459 F.3d at 835.

Because § 107(a)(4B) does not compel application of joint and several

hability upon the United States, no contribution counterclaim is needed.

The court correctly concluded that to accept the

government’s claim that § 113(f) provided the sole source

of cost recovery for voluntary remediators would mean

that SARA withdrew the prior universally-recognized right

of voluntary remediators to recover a portion of their

response costs under § 107(a)(4)(B), which not only had no

factual support, but directly conflicted with the legislative

intent underlying SARA, i.e., to ratify and confirm the pre-

SARA interpretation given § 107(a)(4)(B): “[I]f Congress

intended Section 113 to completely replace Section 107 in

all circumstances, even where a plaintiff was not eligible

to use Section 113, it would have done so explicitly.” 459

F.3d at 836.

The Third Circuit came to the opposite conclusion in

E. I. du Pont, supra. E. I. du Pont voluntarily undertook to

clean up a site that formerly had been owned and alleg-

edly contaminated by the United States, and then brought

a CERCLA cost recovery action against the United States. In

a 2-to-1 decision, the court concluded that Aviall did not give

it cause to reconsider its pre-Aviall precedents which held

that all PRPs were limited to contribution claims under

§ 113(f). The court held that § 107(a)(4)(B) provided no basis

for E. I. du Pont, as a voluntary remediator, to obtain partial

cost recovery because that provision was limited to joint and

several liability claims for indemnity, whereas § 113(f) was

the source of all partial cost recovery claims:

[Bjecause § 107 imposes strict, joint and several

liability on all PRPs for the costs of a cleanup, a

PRP allowed to bring a cost recovery claim action

under § 107 against another PRP ‘could recoup

all of its expenditures regardless of fault — which

... Strains logic.’

E. I. du Pont, 460 F.3d 521-22. Much like its pre-Aviall

counterparts, the court totally ignored the fact that contri-

bution is available only to jointly liable parties, one of

which is compelled to pay more than its fair share of that

common liability. Also, as in many pre-Aviall cases, the

court erroneously conclided that § 107(a)(4)(B) provides

joint and several liability for indemnity only.

Finally, and most recently, the Seventh Circuit de-

cided Metropolitan Water, supra. Like Consolidated Edison

and ARC, Metropolitan Water was a voluntary remediator

because no person other than Metropolitan Water had

incurred any response costs at the site involved — no

enforcement action had been undertaken. The court, as in

Con. Ed. and Atlantic Research, expressly rejected the

interpretation of § 107(a)(4)(B) proffered by the govern-

ment here, i.e., that “any other person” does not include

PRPs, and adopted the reasoning in Con. Ed. and Atlantic

Research, holding that voluntary remediators may seek

partial cost recovery under § 107(a)(4)(B). The court

observed that beeause Metropolitan Water had conducted

the cleanup when no other party had taken remedial

action, there was no common liability with any other PRP,

an essential element of contribution: “Therefore, Metro-

politan Water’s action under § 107 is characterized more

appropriately as a cost recovery action than as a clai.a for

contribution.” Jd., 473 F.3d at 836 n.17.

ARC submits that Con. Ed., Atlantic Research, and

Metropolitan Water, respectively, correctly concluded that

voluntary remediators, such as ARC, may pursue

§ 107(a)(4)(B) cost recovery claims against other PRPs,

such as the United States. While none of these cases

specifically addressed the issue of joint and several liabil-

ity, where the United States is a PRP subject to a

§ 107(a)(4)(B) action by a voluntary remediator, the United

States’ potential liability should be several only. The Con.

Ed., Atlantic Research and Metropolitan Water decisions

are consistent with the language of § 107(a)(4)(B) which,

in this case, effectively provides that the United States is

liable for a portion of the necessary costs of response

incurred by ARC consistent with the NCP. The liability of

the United States exists under § 107(a)(4)(B), not § 113(f),

and is several only, permitting ARC to recover an equitable

share of the cleanup costs it has incurred at the Camden,

Arkansas site. To hold otherwise would effectively write

§ 107(a)(4)(B) out of CERCLA for those PRPs that volun-

tarily engage in site cleanup, and would virtually immu-

nize the United States from assuming its fair share of

responsibility for contaminating sites all over the country.

Such a result is contrary to both the language and pur-

poses of CERCLA.

Ill. ALTERNATIVELY, IF ARC IS NOT ENTITLED

TO RECOVER A PORTION OF ITS RESPONSE

COSTS UNDER § 107(a)(4)(B), IT IS ENTITLED

TO SEEK RECOVERY PURSUANT TO AN

IMPLIED RIGHT OF CONTRIBUTION AF-

FORDED BY § 107(a)(4)(B).

In the event that ARC is somehow deemed a “com-

pelled remediator,” precluding its right to maintain a

partial cost recovery action against the United States

under § 107(a)(4)(B), ARC submits that, as the Court of

Appeals held below, it has an implied right to seek contri-

bution under CERCLA, a right left undisturbed by the

enactment of SARA in 1986. Significantly, the government

does not dispute the fact that the savings clause in

§ 113(f)(1) “preserves the ability of a PRP to bring an

action for contribution, (as that term is traditionally

defined) ... ,” apart from § 113(f). (Gov't. Cert. Pet., pp.

19-20.) However, the government maintains that this

retained right to seek contribution is defined in its “tradi-

tional” sense:

Even if § 107(a) did contain an implied right to

contribution, moreover, it would not help respon-

dent, because § 107(a) would at most contain an

implied right to ‘contribution’ in its ‘traditional’

sense, l.e., a claim by one party to recover an

amount from a jointly liable party after the first

party had extinguished a disproportionate share

of their common liability to a third party.

(Gov't. Br., p. 23) (emphasis added). Because there has

been no discharge of all liability at the Camden site, i.e.,

cleanup is ongoing, the government claims that ARC may

not recover contribution because “traditional” contribution

principles preclude recovery. (Gov’t. Br., pp. 11-12, 21-26.)

The government is wrong.

Prior to the enactment of SARA, courts unanimously

held that compelled remediators had an implied right to

seek contribution from other PRPs based upon the legisla-

tive history underlying CERCLA, as well as the language

in § 107(a)(4)(B) and § 107(e)(2). These courts concluded

that, as Congress had expressly indicated, the nature and

scope of a PRP’s contribution rights were to be developed

by the courts as a matter of CERCLA common law; CER-

CLA’s common law of contribution allowed compelled

remediators to recover contribution from other PRPs for

response costs incurred.

Significantly, there was no requirement under CER- -

CLA’s common law of contribution requiring the contribu-

tion plaintiff to have discharged all of the liability of the

contribution defendant, as would be required under

“traditional” common law contribution principles. The

reason was obvious; because the cost required for a given

PRP to completely clean up a contaminated site is often

monumental, if not unattainable, contribution under

CERCLA did not require a complete cleanup or discharge

of all common liability at the site. See, e.g., Shore Realty,

supra, 648 F. Supp. at 262. Indeed, this fact is evidenced

by the EPA’s own view of CERCLA contribution, which is

quoted by the government at p. 25 of its brief:

[I]n a guidance document issued shortly before

the enactment of the express contribution provi-

sion in Section 113(f) ... [EPA emphasized] ‘con-

tribution among responsible parties is based on

the principle that a jointly and severally liable

party who has paid all or a portion of a judgment

or settlement may be entitled to reimbursement

from other jointly or severally liable parties.’

Citing 50 Fed. Reg. 5038 (1985) (emphasis added).”

This CERCLA common law contribution principle was

confirmed and codified in § 113(f)(3)(B), providing that

where a compelled remediator has settled its liability with

the United States or a State, the PRP may recover contri-

bution from another PRP “for some or all of a response

action or for some or all of the costs of such action” — that

is, regardless of whether cleanup has been completed.

Moreover, EPA has consistently taken pains to state that

PRPs who clean up sites may recover a portion of their

costs before completing those cleanups because “requiring

a party to incur all costs before bringing a cost recovery

action may discourage and delay cleanups, contrary to the

* Notably, contribution availability does not necessarily depend

upon payment pursuant to a judgment or settlement, as the govern-

ment claims, Gov't. Br., pp. 12, 25-26, but payment must be compelled.

See Centerior, supra, 153 F.3d at 350-51.

— ey

intent of Congress that sites be cleaned up expeditiously.”

55 Fed. Reg. 8666, 8798 (1990). Finally, the savings clause

in § 113(f1) preserved not only traditional common law

contribution claims that PRPs might have in the absence

of a § 106 or § 107(a) action, but also those CERCLA

common law contribution claims that existed prior to

SARA, but were not asserted in or following a § 106 or

§ 107(a) civil action. As this Court observed in Aviall, 543

U.S. at 166-67:

The sole function of [this] sentence is to clarify

that § 113(f)(1) does nothing to ‘diminish’ any

cause(s) of action for contribution that may exist

independently of § 113(f)(1). In other words, the

sentence rebuts any presumption that the ex-

press right of contribution provided by the ena-

bling clause is the exclusive cause of action for

contribution available toa PRP.

Accordingly, the enactment of SARA in 1986 did not

withdraw the previously recognized right of compelled

remediators to seek CERCLA contribution from other

PRPs if, as here, the party seeking contribution had

incurred response costs, even if those response costs did

not result in a complete cleanup. However, if no response

costs had been incurred, the only means of seeking contri-

bution was via § 113(f)(1) or § 113(f)(3)(B), allowing the

contribution claim to be maintained in the context of a

§ 106 or § 107(a) civil action, or after a settlement, regard-

less of whether the defendant PRP had incurred any

response costs.” Each of these sources of contribution

* Pre-SARA courts, almost without exception, held that a PRP

must have incurred response costs in order to seek contribut‘on. See

Shore Realty, supra, 648 F. Supp. at 261-62 (citing cases). Section

113(f1) permitted PRPs to assert contribution claims during or after

(Continued on following page)

rights are compatible and do not result in § 113(f) being

superfluous. As the Court of Appeals held below:

We must next ask whether, in enacting § 113,

Congress intended to eliminate the preexisting

right to contribution it had allowed for court de-

velopment under § 107. We conclude it did not.

The plain text of § 113 reflects no intent to elimi-

nate other rights to contribution; . . . This view is

further supported by examining § 113’s legisla-

tive history reflecting Congress’s intention to

clarify and confirm, not to supplant or extin-

guish, the existing right to contribution. ... We

conclude therefore that if Congress intended

§ 113 to completely replace § 107 in all circum-

stances, even where a plaintiff was not eligible to

use § 113, it would have done so explicitly. Ac-

cordingly, we consider the plain language of

CERCLA to be consistent with an implied right

to contribution for parties such as Atlantic.

459 F.3d at 836.

Because ARC has incurred response costs, it is enti-

tled to seek CERCLA contribution from the United States,

even though site cleanup is on-going, a right implied from

§ 107(a)(4B) and § 107(e)(2), and preserved by SARA.

Therefore, ARC is entitled to proceed with its partial

cost recovery claim against the United States even if,

arguendo, ARC were not entitled to maintain its

§ 107(a)(4)(B) direct cost recovery action as a voluntary

remediator under CERCLA.

§ 106 and § 107(a) civil actions even if no response costs had been

incurred, thereby expanding the CERCLA common law right to seek

contribution. Compare Rule 14, Fed. R. Civ. P.

CONCLUSION

For each of the above reasons, ARC respectfully

submits that the decision of the Court of Appeals should be

affirmed.

Respectfully submitted,

FRANK L. STEEVES

OWEN THOMAS ARMSTRONG, JR.

(Counsel of Record)

VON BRIESEN & ROPER, S.C.

411 East Wisconsin Avenue,

Suite 700

Milwaukee, WI 53202

(414) 276-1122

Attorneys for Respondent

Atlantic Research Corporation

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