Amicus Curiae Brief — United States v. Atlantic Research Corp.

od *

No. 06-562

al

IN THe

Supreme Court of the United States

UL ATTED STATES OF AMERICA,

Petitioner.

. #

ATLANTIC RESEARCH CORPORATION,

Respondent.

On Writ of Certiorari

to the United States Court of Appeals

for the Eighth Circuit

BRIEF OF CONSOLIDATED EDISON COMPANY OF

NEW YORK, INC., AS AMICUS CURTAE IN SUPPORT

OF RESPONDENT

Wooby N. PLIERSON CARTER G. PHILLIPS

Davin. EL KIND ANGUS MACBETH

JOSEPEER. BERGER STEPHEN BL KINNAIRD*

DICKSTEIN SHAPIRO LEP SIDLEY AUSTIN ELP

1825 Lve Street. NW 1501 K Street. NW

Washington, DC 20006 Washington. DC 20005

(202) 420-2200 (202) 736-8000

RICHARD W. BABINECZ MARGARET RL SOBOTA

Pi reR PL GARAM SIDELY ALSTINGE EP

MICHAEL AL WIECKEN One South Dearborn

CONSOLIDATED EDISON Chicago, IL. 60603

COMPANY OF NIW YORK.LING. (312) 853-7000

4 Irving Place

New York NY 10003-3502

(212) 460-3383

Attorneys for Amicus Curiae

April 4. 2007 *Counsel of Record

PSS

Wit SON-EPES PRINTING CO INC. — (202) 789-0096 — WASHINGTON, D C. 20002

RULE 29.6 STATEMENT

Amicus Curiae Consolidated Edison of New York, Inc. is a

wholly owned subsidiary of Consolidated Edison, Inc. No

other publicly held corporation owns 10% or more of the

stock of Consolidated Edison, Inc.

TABLE OF CONTENTS

PRIS GE PARTIE sctcesnsncnconiesnonensnnsteseensetnensitoen

CIs Ge RAF CURIE CUNIN ccrereccceccesesensseenssccenscsses pconiase

STATEMENT OF INTEREST OF AMICUS CURIAE...

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II.

THE PLAIN LANGUAGE OF SECTION 107(a)

OF CERCLA GRANTS POTENTIALLY RE-

SPONSIBLE PARTIES A RIGHT TO SEEK

RECOVERY OF THEIR COSTS ........ eee eeeeeeees

A. Section 107(a) Specifically Authorizes “Any”

Private Person To Recover “Necessary Costs

Of Response” Frous PRPS.........0csccccssccsssesecsesseses

B. The Government’s Contrary Reading Of Sec-

tion 107(a) Is Irreconcilable With The Plain

Language, Eviscerates The Section 113 Rem-

THE CREATION OF EXPRESS REMEDIES IN

SECTION 113 DID NOT WHOLLY ELIMI-

NATE SECTION 107(a) RIGHTS OF ACTIONS

ESET en erence nT nmnT nee ce SEO

A. State Environmental Agencies Regulate Haz-

ardous Waste Clean-Up At Most Sites......:........

(iit)

iv

TABLE OF CONTENTS - continued

Page

B. Courts Have Interpreted Section 113(f(3)B)

Narrowly To Provide A Contribution Remiedy

Only For The Limited Federal Liability Of A

Se isncscasiitninnnitienaninsbidiiiaibidsigeiaiin 22

C. The Express Contribution Remedies Of Sec-

tion- 113(f) Are Complementary To The Im-

plied Rights Of Action Under Section 107(a)..... 25

D. Recognition Of An Implied Right Of Action

For PRPs Under Section 107(a) Creates No

TE ictaiurtaesininniianeniniacenininsnineiionindiuadiininiuitiinbiidiites 28

NN natisiiiciiashiaiihaesibiassnieniessncnineuiniesinuaiiesdatsiaiimeieaiin 30

Vv

TABLE OF AUTHORITIES

CASES Page

Alexander v. Sandoval, 532 U.S. 275 (2001).......... 15

Allied Corp. v. Acme Solvents Reclaiming, Inc.,

691 F. Supp. 1100 (N.D. Ill. 1988)... 29, 30

In re Bell Petroleum Servs., Inc., 3 F.3d 889 (Sth

GR. GD vellcneseectemananapisavinieasiiapmeamaaiiaes 9

City of Bangor v. Citizens Commc'ns Co., 437 F.

Supp. 2d 180 (D. Me. 2006) ............ cece eeeeeeeeteeees 24

City of Waukesha v. Viacom Int'l Inc., 404 F.

Supp. 2d 1112 (E.D. Wis. 2005)... eee eeeees 23

Consolidated Edison Co. of N.Y., Inc. v. UGI

Utils., Inc., 423 F.3d 90 (2d Cir. 2005), petition

for cert. filed, 74 U.S.L.W. 3600 (Apr. 14,

Ss GR ee wricecnnenniienisiininiomaiiainaial passim

Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S.

Pe Ga ei ccsiccescnsennsenniccteniiiebiniiaiaiipmuiiaaa 7, 8, 25, 29

Differential Dev.-1994, Ltd. v. Harkrider Distrib.

Co., No. H-05-3375, 2007 WL 87661 (S.D.

Pa, FA, Dy, BPG Prccevstnccticisuanisisisissinaiimpiinaiaiiiaanis 23

General Time Corp. v. Bulk Materials, Inc., 826

F. Supp. 471 (M.D. Ga. 1993) wee cee ceeeeeeees 23

Key Tronic Corp. v. United States, 511 U.S. 809

CEP ee scicdctininsearsnpeseduiiasisitainnseietiiibitaiiaibiinidiinidiamiaaiadatal passim

Metropolitan Water Reclamation Dist. v. North

Am. Galvanizing & Coatings, Inc., 473 F.3d

tg __, STD rn eT te 9,10

Preiser v. Rodriguez, 411 U.S. 475 (1973)........... 15

Raytheon Aircraft Co. v. United States, 435 F.

Supp. 2d 1136 (D. Kan. 2006)..................... 14, 23, 24

Texas Indus., Inc. v. Radcliff Materials, Inc., 451 |

a Ge eed ixcnncenencenesssitenisenininssaianioninsianiaans 25

Transamerica Mortg. Advisors, Inc. (TAMA) v.

Lewis, 444 U.S. 11 (1979) .....crceseccosessccesecocsescres 16

Vi

TABLE OF AUTHORITIES — continued

Page

UGI Utils., Inc. v. Consolidated Edison Co. of

N.Y., Inc., No. 05-1323 (U.S. filed Apr. 14,

eee ae l

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

Supp. 1249 (S.D. Ill. 1984)... cece neiiengenes 30

United States v. Bestfoods Corp., 524 U.S. 51

TT tained dteinatnidbecpatemanetienveccsen 6

United States v. Fausto, 484 U.S. 439 (1988)......... 15

United States v. Gonzales, 520 U.S. 1 (1997)......... 10

United States v. Hardage, 116 F.R.D. 460 (W.D. _

EERE REE een 30

United States v. Morton, 467 U.S. 822 (1984)........ 1]

United States v. Simon Wrecking, Inc., No. 06-

928, 2007 WL 789189 (E.D. Pa. Mar. 14,

STITT ihe aainneennstinanentetanigetepnenemnguecenens 14

Viacom, Inc. v. United States, 404 F. Supp. 2d 3

I tater celintnsatenmitiniemgnaae 24

W.R. Grace & Co. v. Zotos Int'l, Inc., No. 98-CV-

838S(F), 2005 WL 1076117 (W.D.N.Y. May 3,

Tati liad aati tncenintndananptinannsenseminenemnesnantinte 23

STATUTES AND REGULATIONS

Superfund Amendments and Reauthorization Act

of 1986, Pub. L. No. 99-499, 100 Stat. 1613....... 8

Small Business Liability Relief and Brownfields

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

SE aI IEE ncn ccencsncenconconensesssenecescssssccassoseset 13

|, nc 9, 10, 12, 25, 27

Ee SETI ndiitnsinesnnnicemsenesscsssaseccssannsosseane 17

Sir IE hchintenapamscnddenendsoemegneses a F »

a IIT esseunneerenennenencceectnenenaseeseeneumntesnneses passim

ET prinicticasatescdnsnesnnseteesensesssescesenaceete passim

SP EIIITIITiccenstendeicneccnerssussnannenssensencescees ~ 14

A 24, 27

Vii

TABLE OF AUTHORITIES — continued

Page

ey as SF TT cs iecinccnincinicsintoneansdapabiiaiiaaiiigisinn 21

N.J. Stat. Ann. § 13:1 K-6 ef $€q .0.......:ccccesseeeseeseeeees 19

i ee aticssddeasiininiinitinniadninianiiphiialionien 19

po SF | ee 19

TUT cittclensetiinenncenteneninscentns 19

§ 58:10-23.1 1g(c)(1)..........ccceceereees 19

Bp Cee Wiiicininscnnncasenentenecnennenti 19

Ee cciictcinantatntepencenennncns 19

ee ti hiandecetiivcnncmtenanntneasees 19

N.Y. Envtl. Conserv. Law § 27-1301 ef seq............ 19

} 0 20

§ 27-1401 ef seq. ........... 20

ee eo I Ps CN OF UMD ccccteretiencnnsstenmmteetenntennies 20

Pr a as CE RE UU ciicsicsenicennintneeaciieientiinnieane 20

ee 14

National Oil and Hazardous Substances Pollution

Contingency Plan, 59 Fed. Reg. 47384 (Sept.

Soeiay Sarai cusisistcieninteiiensiashiaiiceaitaeaitaitinedeaaiiintiainsante 14

N.Y. Comp. Codes R. & Regs. tit. 6, § 375-2.2...... 20

RULES

> GAN Ue: CaM iicnisciscrsnitesitticinnansediinnenesemacnnidimante 28

ui ii iciseidciictainaitinnsihiaiaabaiasibihidebiitioniadanpiten 29

LEGISLATIVE HISTORY

S. Rep. No. 107-2 (2001) ..........ccccscccoscesees 17, 18, 21, 22

H.R. Rep. No. 96-1016, pt. 1 (1980) 0.0.0... eee 17

No. 99-253, pt. 1 (1985)..........00060. 15, 17, 25

4 - ) _) eee 25

SCHOLARLY AUTHORITY

2 Michael 8. Gerrard, Brownfields Law & Prac-

Vii

TABLE OF AUTHORITIES - continued

OTHER AUTHORITIES Page

Envtl. L. Inst., An Analysis of State Superfund

Programs: 50-State Study, 2001 Update (Nov.

2002), available at http://www.elistore.org/

reports detail.aps?7ID=10746...........ccseeeeeeeneee 18, 19

EPA, Superfund National Accomplishments

Summary Fiscal Year 2006 (Mar. 2007), at

http://www.epa.gov/superfund/action/process/

ED cinircieiitenicsidsisiaibieiiiiinaniiniianicineiimaiiisipeas 18

NYSDEC, Annual Remedial Programs Report for

State Fiscal Year 2004-05 (2005), available at

http://www.dec.state.ny.us/website/der/2005

i iictsitesisciicniceiincicianisiiiininitiniittaiinsasinaes 21

NYSDEC, Annual Remedial Programs Report for

State Fiscal Year 2005-06 (2006), available at

http://www.dec.state.ny.us/website/der/2006

STATEMENT OF INTEREST OF AMICUS CURIAE'

Amicus curiae Consolidated Edison Company of New

York, Inc. (“Con Edison”) is the respondent in a petition that

is being held pending disposition of this case. See UG/ Uitils.,

Inc. v. Consolidated Edison Co. of N.Y., Inc., No. 05-1323

(U.S. filed Apr. 14, 2006). Con Edison is thus directly inter-

ested in the Court’s resolution of the question presented re-

garding the availability to potentially responsible parties

(PRPs) of a private right of action under section 107(a) of the

Comprehensive Environmental Response, Compensation, and

Liability Act of 1980 (“CERCLA”).

Con Edison and its predecessors formerly owned or oper-

ated in New York a number of manufactured gas plants

(which produce gas from coal, oil, and other sources). Con-

solidated Edison Co. of N_Y., Inc. v. UGI Utils., Inc., 423 F.3d

90, 92-93 (2d Cir. 2005), petition for cert. filed, 74 U.S.L.W.

3600 (U.S. Apr. 14, 2006) (No. 05-1323). In October, 1999,

the New York State Department of Environmental Conserva-

tion (“NYSDEC”) contacted Con Edison regarding the inves-

tigation and clean-up of hazardous substances at former

manufactured gas plant sites. /d. at 93. On September 20,

2001, Con Edison filed a complaint against UGI Utilities, Inc.

seeking to recover under CERCLA its response costs at cer-

tain of the sites, on the grounds that UGI was liable as the

successor to “person{s] who at the time of disposal of any

hazardous substance owned or operated any facility at which

such hazardous substances were disposed of.” 42 U.S.C.

§ 9607(a)(2). On August 15, 2002, Con Edison entered into a

Voluntary Cleanup Agreement (“VCA”) with NYSDEC to

' No person or entity other than Consolidated Edison Company of New

York Inc. or its counsel made a monetary contribution to the preparation

or submission of this brief, and no counsel for a party authored this brief

in whole or in part. Both petitioner and respondent have consented to the

filing of this brief, and the letters of consent have been filed with the

Clerk.

2

investigate and clean up, with NYSDEC oversight, more than

100 properties comprising the former grounds of manufac-

tured gas plants that Con Edison or its predecessors once

owned or operated. Consolidated Edison, 423 F.3d at 93.

Once Con Edison completes its obligations under the VCA, it

will receive releases and covenants-not-to-sue from NYS-

DEC.

The district court granted summary judgment to UGI, but

the Second Circuit reversed. It held that Con Edison was not

entitled to a contribution remedy under section 113(f)(3) of

CERCLA as “[a] person who has resolved its liability to the

United States or a State for some or all of a response action.”

42 U.S.C. § 9613(f)(3)(B). The Second Circuit construed the

release and covenant-not-to-sue that Con Edison was to re-

ceive from the NYSDEC under the VCA to encompass only

state law claims, and not to resolve fully and finally Con Edi-

son’s federal liability to the State of New York under CER-

CLA. Consolidated Edison, 423 F.3d at 95-97. However, the

court of appeals held that section 107(a) does grant PRPs like

Con Edison a private right of action against other PRPs to re-

cover response costs. /d at 97-103. The Eighth Circuit

adopted the same rule below, which the Government has chal-

lenged.

Con Edison believes that this brief will be useful to the

Court because it presents the perspective of the many PRPs

who conduct hazardous waste clean-ups in cooperation with

state authorities and who would improperly be denied recov-

ery under the Government’s interpretation of section 107(a).

BRIEF OF AMICUS CURIAE

The Government’s proposed statutory interpretation — that

section 107(a) of CERCLA affords a private right of action

for cost recovery only to “innocent” parties, Petr. Br. 11 —

offends both the plain language and policies of CERCLA.

Ironically, the Government principally defends its position as

3

necessary to encourage PRPs to enter into settlements with

federal and state authorities, id. at 40, but adoption of the

Government’s position would likely have precisely the oppo-

site effect. As the Government concedes, “[a]t a substantial

number of contaminated sites, States have primary responsi-

bility for cleanup or monitoring.” /d. at 4 n.3. Given the nar-

row judicial construction of the contribution remedy provided

in section 113(f)(3)(B), countless parties like Con Edison that

clean up hazardous substances at sites in good faith under

voluntary agreements with state authorities would have no

recourse to recover costs from the actual polluters if section

107(a) is narrowed in the manner the Government suggests.

Accordingly, if the Court were to accept the Government’s

construction, PRPs may be inclined to force the State to liti-

gate site clean-up — rather than cooperate with the State — to

preserve their rights to recover response costs. The Govern-

ment’s position is bereft of any basis in text or policy.

To avoid duplication of respondent’s brief, Con Edison will

not engage in a point-by-point rebuttal of the Government’s

arguments, but will focus on two issues that most directly im-

plicate Con Edison’s interests: (1) the irreconcilability of the

Government’s construction of section 107(a) with the plain

language of the statute, and (2) the relationship of sections

107(a) and 113, and the critical need for this Court to interpret

section 107(a) in light of the dominant presence of state

abatement and oversight activities in this field.

SUMMARY OF ARGUMENT

The Government’s proposed construction of section 107(a)

has no force. The statute provides that PRPs are liable for

“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,” and for

“other necessary costs of response incurred by any other per- |

son consistent with the national contingency plan.” 42 U.S.C.

§ 9607(a)(4)(A) & (B) (emphases added). The phrase “any

4

other person” is meant to distinguish between the two catego-

ries of expressly identified persons incurring such costs, and

thus plainly refers to any person other than “the United States

Government or a State or an Indian tribe.” Pet. App. 30a.

The Government’s claim that “any other person” refers in-

stead to a person who is not a PRP is an unnatural reading of

the text, and indeed it is contrary to the interpretation of this

provision in EPA regulations.

Equally fundamentally, the Government’s construction

cannot be adopted because it eviscerates the contribution

remedy of section 113(f)(1). The Government fails to heed

the central teaching of this Court in Key Tronic Corp. v.

United States, 511 U.S. 809 (1994), that the text of section

107(a) defines the persons /iable, not the plaintiffs entitled to

enforce that liability. /d at 818 & n.11. Under the Govern-

ment’s reading of the phrase “any other person” in section

107(a)(4)(B), a PRP “shall be /iable” for the “necessary re-

sponse costs incurred by” innocent parties (but not by other

PRPs). If that were correct, a PRP also could not seek contri-

bution from another PRP under section 113(f). Section

113(f)(1) only authorizes a person to “seek contribution from

any other person who is liable or potentially liable under sec-

tion 9607(a) of this title.” 42 U.S.C. § 9613(f)(1) (emphasis

added). However, if no PRP is “liable” under section 107(a)

for response costs incurred by another PRP (as the Govern-

ment insists), no PRP could ever have a contribution remedy

under section 113(f)(1) to recover those costs against a PRP

(since contribution may be sought under that provision only

against parties with liability for those costs under section

107(a)). That is plainly untenable, and the Government’s

strained construction of the statute should be rejected.

The Government’s arguments are unfounded not only in the

text but also in the policy of CERCLA. The Government

paints a simple picture for the Court where any PRP need

only settle with federal or state authorities and thereby gain a

contribution remedy under section 1 13(f)(1) or (f)(3)(B). The

5

Government neglects the prevailing judicial construction of

section 113(f)(3)(B). That statute makes a contribution rem-

edy available to a person “who has resolved its liability to the

United States or a State for some or all of a response action or

for some or all of the costs of such action in an administrative

or judicially approved settlement.” Jd. § 9613(f)(3)(B) (em-

phasis added). Courts have interpreted that phrase to require

resolution of federal liability to a State under CERCLA.

However, CERCLA creates federal liability of PRPs to States

only for the response costs that a State incurs itself. States

have no federal power to order abatement or other response

actions under CERCLA, and state law governs the liability of

a PRP to a State to perform clean-up of hazardous wastes.

Courts have denied section 113(f)(3)(B) remedies to PRPs

who clean up sites in cooperation with state authorities under

State law, ruling instead that the proper remedy is a cost-

recovery action under section 107(a). The Government’s

crabbed construction of section 107(a) would deprive PRPs

who cooperate with state authorities of any ability to recover

costs from other PRPs (including more culpable parties di-

rectly responsible for the hazardous wastes), even though the

vast majority of clean-ups occur under state supervision. The

Government’s position does not reward parties who settle

with federal and state authorities, as it claims; at least as to

the many PRPs incurring response costs in cooperation with

(and under the supervision of) state authorities, it leaves them

without any remedy at all.

Congress enacted the express contribution remedies of sec-

tion 113(f) as a complement to the implied cost-recovery ac-

tions of section 107(a), which are available whenever no ex-

press remedy is granted to promote the expeditious clean-up

of hazardous wastes in this country. This Court should affirm

the decision below.

_

ARGUMENT

I. THE PLAIN LANGUAGE OF SECTION 107(a) OF

CERCLA GRANTS POTENTIALLY RESPONSI-

BLE PARTIES A RIGHT TO SEEK RECOVERY

OF THEIR COSTS.

“In 1980, CERCLA was enacted in response to the serious

environmental and health risks posed by industrial pollution.”

United States v. Bestfoods Corp., 524 U.S. 51, 55 (1998).

“Two of its primary goals include encouraging the timely

cleanup of hazardous waste sites, and placing the cost of that

cleanup on those responsible for creating or maintaining the

hazardous condition.” Consolidated Edison, 423 F.3d at 94

(internal quotation marks and brackets omitted).

In CERCLA, Congress attacked the problem of hazardous

wastes by granting federal abatement powers to the President

and creating a scheme of private and public liability for re-

sponse costs. “Sections 104 and 106 provide the framework

for federal abatement and enforcement actions that the Presi-

dent, the EPA as his delegated agent, or the Attorney General

initiates.” Key Tronic Corp., 511 U.S. at 814. Section 105 -

directs the President to formulate a national contingency plan

(“NCP”) that would include “procedures and standards for

responding to releases of hazardous substances, pollutants,

and contaminants,” and would prioritize sites for remedial or

response actions. 42 U.S.C. § 9605(a).

Given the extraordinary expense of cleaning up the many

thousands of the nation’s hazardous-waste sites, Congress

created strict liability (subject to specific statutory defenses)

for four kinds of PRPs: (1) the current owner and operator of

a vessel or a facility; (2) the owner or operator of a vessel or a

facility at the time of disposal of the hazardous substance; (3)

any person who arranged for disposal or treatment of hazard-

ous substances he owned or possessed at another’s vessel or

facility; and (4) a transporter who selected a vessel or facility

7

from which hazardous substances were released. I/d

§ 9607(a). Those PRPs

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 contin-

gency plan;

(C) damages for injury to, destruction of, or loss of natu-

ral resources, including the reasonable costs of assessing

_ such injury, destruction, or loss resulting from such a re-

lease; and

(D) the costs of any health assessment or health effects

study carried out under section 9604(i) of this title.

Id. :

In Key Tronic, this Court recognized that Ҥ 107 unques-

tionably provides a cause of action for private parties to seek

recovery of cleanup costs.” Key Tronic, 511 U.S. at 818. In-

deed, all nine Justices agreed on that point. But whereas the

dissent construed the foregoing language as “the express crea-

tion of a right of action,” id. at 822 (Scalia, J., dissenting), the

majority construed section 107(a) as “only impliedly au-

thoriz[ing] suit,” id. at 818. The majority reasoned that “Sec-

tion 107 ... merely says that ‘A shall be liable’ without re-

vealing to whom A is liable.”. /d. at 818 n.11 (emphasis omit-

ted).

This Court addressed the relationship of sections 107(a) and

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

U.S. 157 (2004). Under CERCLA, as originally enacted,

courts had long held that “a private party that had incurred

response costs, but that had done so voluntarily and was not

itself subject to suit, had a cause of action for cost recovery

8

against other PRPs,” but there was uncertainty as to whether

“a private entity that had been sued in a cost recovery action

(by the Government or by another PRP) could obtain contri-

bution from other PRPs.” /d. at 161-62. Congress amended

CERCLA in the Superfund Amendments and Reauthorization

Act of 1986 (SARA), Pub. L. No. 99-499, 100 Stat. 1613, to

provide express rights of action for contribution. Section

113(f)(1) authorized “[a]ny person [to] seek contribution from

any other person who is liable or potentially liable under sec-

tion [107(a)] of this title, during or following any civil action

under section [106] of this title or under section [107(a)] of

this title.” 42 U.S.C. § 9613(f)(1). Section 113(f)(3)(B) fur-

ther authorized a contribution remedy for “[a] person who has

resolved its liability to the United States or a State for some or

all of a response action or for some or all of the costs of such

action in an administrative or judicially approved settlement.”

Id. § 9613(f)(3)(B).

In Cooper, this Court held that, under the plain terms of the

statute, the express section 113(f)(1) contribution remedy

could only be pursued “during or following” a section 106

abatement action or a section 107(a) cost-recovery action.

543 U.S. at 168. This Court declined to resolve the relation-

ship of sections 107(a) and 113, id. at 168-71, other than to

recognize that the remedies created by those sections, while

“clearly distinct,” “both allow private parties to recoup costs

from other private parties,” id. at 163 n.3.

A. Section 107(a) Specifically Authorizes “Any”

Private Person To Recover “Necessary Costs Of

Response” From PRPs.

The meaning of section 107(a) is clear. It provides that

PRPs are liable for “a// 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,” and for “other necessary costs of response incurred by

any other person consistent with the national contingency

plan.” 42 U.S.C. § 9607(a)(4)(A) & (B) (emphases added).

9

The purpose of these two subsections is to assign different

liability to PRPs for response costs incurred by governmental

entities as opposed to response costs incurred by private per-

sons.’ Under subsection 107(a)(4)(A), “the defendant has the

burden of proving that the government’s costs are inconsistent

with the NCP,” whereas “under § 107(a)(4)(B), nongovern-

mental entities are required to prove that their response costs

are necessary and consistent with the NCP.” Jn re Bell Petro-

leum Servs., Inc., 3 F.3d 889, 906 n.23 (Sth Cir. 1993).

Accordingly, the plain meaning of the phrase “any other

person” in context is to distinguish between the two cost-

incurring groups to whom different liability is owed: the

higher liability standard applies to costs incurred by any per-

son “other” than “the United States Government or a State or

an Indian tribe.” Pet. App. 30a; Metropolitan Water Recla-

mation Dist. v. North Am. Galvanizing & Castings, Inc., 473

F.3d 824, 835 (7th Cir. 2007) (“we read the two subsections,

and the reference to ‘any other person,’ simply as the statute's

way of relaxing the burden of proof for governmental entities

as opposed to private parties”). “Person” is a defined term

under CERCLA that encompasses the United States Govern-

ment, States, and Indian tribes, 42 U.S.C. § 9601(21), and so

the term “any other person” necessarily refers to any person

within the definition “other” than the three governmental enti-

ties: i.e., any “individual, firm, corporation, association, part-

nership, consortium, joint venture, commercial entity, ... mu-

nicipality, commission, political subdivision of a State, or any

? The costs of removal and remedial actions referenced in subsection

107(a)(4)(A) are the same as the “costs of response” referenced in section

107(a)(4)(B). See 42 U.S.C. § 9607(a)(4)(A) & (B); id § 9601(25) (The

terms ‘respond’ or ‘response’ means remove, removal, remedy, and reme-

dial action; all such terms (including the terms ‘removal’ and ‘remedial

action’) include enforcement activities related thereto.”); see also id.

§ 9601(23) & (24) (defining “remedy” and “remedial action” and “re-

move” and “removal”).

10

interstate body.” Id? Section 107(a)(4)(B) thus provides that

a PRP “shall be liable” to any person other than the specified

governmental persons (including, without limitation, other

PRPs) for “necessary costs of response ... consistent with the

national contingency plan.” Jd. § 9607(a)(4)(B); United States

v. Gonzales, 520 U.S. 1, 5 (1997) (“Read naturally, the word

‘any’ has an expansive meaning, that is, ‘one or some indis-

criminately of whatever kind.’”) (quoting Webster’s Third

New International Dictionary 97 (1976)).

Because PRPs have liability for necessary response costs

incurred by private PRPs, it takes the smallest leap of impli-

cation for this Court to determine who may bring a judicial

action to enforce that liability. The Act’s creation of liability

necessarily implies that there must be some means for parties

incurring the costs to enforce the liability of PRPs, or else

section 107(a) would be ineffectual; indeed, this is why the

three dissenting justices in Key Tronic deemed the language

“shall be liable” in section 107(a) “the express creation of a

right of action” in favor of those incurring the costs. 511 U.S.

at 822 (Scalia J., dissenting). But, even under the rule of the

Key Tronic majority (where rights of action must be implied),

it follows that every person who has incurred necessary re-

sponse costs for which a PRP is liable must have a right of

action to enforce that liability, and such a right of action must

be implied where the Act does not provide an express remedy

(such as a contribution remedy under section 113(f)). The

Second, Seventh, and Eighth Circuits have properly so con-

cluded. Consolidated Edison, 423 F.3d at 100 (“Section

107(a) makes its cost recovery remedy available, in quite

simple language, to any person that has incurred necessary

costs of response ....”); Metropolitan Water Reclamation

Dist., 473 F.3d at 834; Pet. App. 14a (an action under section

107(a) is available to “parties who have incurred necessary

* The definition of “person” explicitly includes the United States Gov-

ernment and a State, and an Indian tribe is an association. 42 U.S.C.

§ 9601(21).

11

costs of response, but have neither been sued nor settled their

liability under §§ 106 or 107”).

B. The Government’s Contrary Reading Of Section

107(a) Is Irreconcilable With The Plain Lan-

guage, Eviscerates The Section 113 Remedy,

And Departs From The EPA’s Interpretation.

Anxious to avoid response cost actions against it when it is

a PRP, the Government advances a narrow construction of

section 107(a). It contends that the phrase “any other person”

in section 107(a) excludes all PRPs previously enumerated in

that section. Petr. Br. 15. That is not the natural reading of

the statutory text. As noted above, the designation of “any

other person” incurring response costs is meant to exclude the

gevernmental entities — United States, States, and Indian

tribes — who also incur response costs, but whose costs are

subject to different treatment in subsection 107(a)(4)(B). In

any event, even if arguendo the phrase “any other person”

serves to distinguish the person who has the liability for re-

sponse costs from the person who incurred them, that would

not avail the Government. Section 107(a) provides that cer-

tain individual PRPs “shall be liable” for response costs:

namely, “the owner and operator of a vessel or a facility” or

“any person” who meets the other enumerated stautory crite-

ria. 42 U.S.C. § 9607(a)(1)-(4). The phrase “any other per-

son” to whom that individual PRP is liable would include

other PRPs, since, as the Government concedes, PRPs are

“persons” as defined in CERCLA. /d. Moreover, “any other

person” means just that; it does not mean “any other person

not in the same category” as the liable party. Clearly, for ex-

ample, a PRP who is the current owner and operator of a fa- -

cility would not be the same person as a former owner and

operator of the facility. The Government’s self-serving inter-

pretation cannot be squared with the language of section 107,

even when that section is read in isolation.

But statutes are read not in isolation but rather as a whole.

United States v. Morton, 467 U.S. 822, 828 (1984). Therein

12

lies a central flaw in the Government’s argument: its reading

of section 107(a) would eviscerate the section 113 contribu-

tion remedy that the Government claims is always available

to private PRPs after they have been sued or entered into a

settlement with federal or state authorities (Petr. Br. 26-31).

In its haste to narrow the class of potential PRP plaintiffs, the

Government fails to heed the central teaching of Key Tronic:

namely, that the text of section 107(a) defines the persons /i-

able, not the plaintiffs entitled to enforce that liability. 511

U.S. at 818 & n.3. Under the Government’s reading of the

phrase “any other person” in section 107(a)(4)(B), a PRP

“shall be /iable” for the “necessary response costs incurred

by” innocent parties (but not by other PRPs). But, if that

were correct, a PRP also could not seek contribution from an-

other PRP under section 113(f). That is because section

113(f)(1) only authorizes a person to “seek contribution from

any other person who is liable or potentially liable under sec-

tion 9607(a) of this title.” 42 U.S.C. § 9613(f)(1) (emphasis

added). According to the Government, a PRP is never liable

under section 107(a) for the response costs incurred by an-

other PRP (but only for those incurred by innocent parties). If

so, no PRP could seek to recover its response costs in contri-

bution from another PRP under section 113(f){1), since the

latter would have no liability (or potential liability) for those

costs under section 107(a).

The Government’s house of cards falls down. It cannot in-

sist that PRP “A” has no liability for the costs incurred by

PRP “B” under section 107(a), and at the same time insist that

after judgment or settlement PRP “B” can seek to recover its

costs from PRP “A” in contribution under section 113(f)(1).

- Other flaws plague the Government’s construction. The

Government claims that the phrase “any other person” refers

to “innocent parties” like “‘a landowner forced to clean up

hazardous materials that a third party spilled onto its property

or that migrated there from adjacent lands,’” Pet. Br. 16

(quoting dicta from Akzo Coatings, Inc. v. Aigner Corp., 30

13

F.3d 761, 764 (7th Cir. 1994)), or a person who qualifies as a

“bona fide prospective purchaser” (“BFPP”) under 42 U.S.C.

§§ 9601(40) and 9607(r)(1) and is not a PRP by operation of

law. Petr. Br. 16. But a landowner whose property is con-

taminated by releases from neighboring lands is a PRP except

in the narrow circumstance where a statutory defense applies;

the contaminated property would be a “facility” under CER-

CLA, a term which is defined to include “any site or area

where a hazardous substance has been deposited, stored, dis-

posed of, or placed, or otherwise come to be located.” 42

U.S.C. § 9601(9)(B). The owner of contaminated property in

the Government’s example is the “owner and operator of ... a

facility,” id. § 9607(a)(1), and thus a PRP.

While the Government is correct that a BFPP is not a PRP

if he does not impede response actions, id. § 9607(r)(1), the

BFPP exception was not enacted until 2002. Pub. L. No. 107-

118, § 222(b), 115 Stat. 2356, 2368, 2371 (2002). So under

the Government’s reading, from the passage of CERCLA in

1980 until 2002, the private parties entitled to institute a cost-

recovery action under section 107(a) formed almost a null set.

The Government has not cited a single case of an “innocent”

private party who has brought suit under section 107(a), but,

if there are any, it is inarguably a minuscule number. It is

implausible to surmise that Congress created this central fea-

ture of CERCLA to provide only these rare parties with a

remedy.

Indeed, the label “innocent” party is itself a misnomer. Be-

cause CERCLA creates strict liability and does not require

wrongdoing, Pet. App. 4a, a PRP is often innocent in any or-

dinary sense of the word. PRPs include current site owners

who did not release hazardous substances and may not even

have known of their existence. But the Government’s posi-

tion would mean that the current owner — who is often the

party who voluntarily cleans up hazardous substances on his

or her property (rather than wait to be sued or approached for

settlement by federal or state authorities) — has no recourse to

14

recover costs against persons whose culpability for the haz-

ardous waste release is far greater. That could not have been

Congress’s intent.

Furthermore, the Government’s current litigating position —

that only so-called innocent parties may bring a section

107(a) action for cost recovery — is directly contrary to EPA’s

construction in its regulations. ‘he applicable regulation

(promulgated after SARA, see 59 Fed. Reg. 47384, 47452

(Sept. 15, 1994)) provides that, absent a statutory prohibition,

“any person may undertake a response action to reduce or

eliminate a release of a hazardous substance, pollutant, or

contaminant,” 40 C.F.R. § 300.700(a), and under section

107(a) “any person may receive a court award of his or her

response costs, plus interest, from the party or parties found to

be liable,” id. § 300.700(b)(1).4 Discussion of that regula-

tion — which follows the natural interpretation of section

107(a) — is conspicuously absent from the Government’s

brief. The Government’s construction of section 107(a) is

unsound.°

* The Government’s construction of section 107 would also bar PRPs

working under an EPA-issued Unilateral Administrative Order (““UAO”)

from recovering clean-up costs from other responsible parties. Lower

courts have held that UAOs are not civil actions for purposes of contribu-

tion claims under section 113(f)(1), thereby barring an action under that

section. Raytheon Aircraft Co. v. United States, 435 F. Supp. 2d 1136 (D.

Kan. 2006). However, recognizing the inequity in such a holding, that

court allowed the PRP to pursue an action to recover its costs under sec-

tion 107, exactly the type of action the Government’s position here would

foreclose.

* The Government has successfully taken the manifestly unfair position

that it has a section 107(a) remedy to recover costs it incurs not in its gov-

ernmental capacity but as a PRP, United States v. Simon Wrecking, Inc.,

No. 06-928, 2007 WL 789189, at *4 (E.D. Pa. Mar. 14, 2007), even

though the statute requires that its provisions apply “both procedurally and

substantively” in the same manner to the federal government and private

parties, 42 U.S.C. § 9620(a)€1).

15

Il. THE CREATION OF EXPRESS REMEDIES IN

SECTION 113 DID NOT WHOLLY ELIMINATE

SECTION 107(a) RIGHTS OF ACTION FOR PRPs.

As the foregoing demonstrates, section 107(a) implies a pri-

vate right of action in favor of PRPs to recover response costs

from other PRPs. A subsequent amendment to a statute, how-

ever, may alter the implications to be drawn from an existing

statute. Petr. Br. 26; United States v. Fausto, 484 U.S. 439,

453 (1988). SARA created express contribution remedies for

private parties in 1986, and there is no longer a need to imply

a remedy under section 107(a) in circumstances where PRPs

have an express remedy under section 113. Pet. App. 17a

(“liable parties which have been subject to §§ 106 or 107 en-

forcement actions are still required to use § 113, thereby en-

suring its continued vitality”); see Alexander v. Sandoval, 532

U.S. 275, 290-91 (2001); Preiser v. Rodriguez, 411 U.S. 475,

489 (1973) (express remedies exclusive where they “clearly

appl[y]”).°

But that does not mean, as the Government suggests, that

the enactment of section 113 eliminated a// preexisting sec-

tion 107(a) remedies for PRPs. Section 113(f) was enacted

only to eliminate doubt as to whether section 107(a) implied a

right to seek contribution once federal CERCLA liability is

established. Either section 113 created a wholly new and

complementary remedy (if the implied action under section

107(a) never extended to contribution remedies), or alterna-

tively section 113 displaced the implied section 107(a) reme-

dies pro tanto. H.R. Rep. No. 99-253, pt. 1, at 79 (1985)

(“[Section 113(f)] clarifies and confirms the right of a person

held jointly and severally liable under CERCLA to seek con-

tribution from other potentially responsible parties.”); see also

Key Tronic Corp., 511 U.S. at 816 (noting that after SARA,

° The language of section 113 indicates that it is the exclusive remedy

for contribution claims within its purview, mandating that “[s]uch claims

shall be brought in accordance with this section.” 42 U.S.C. § 9613(f(1)

(emphasis added).

-

16

CERCLA “expressly authorizes a cause of action for contri-

bution in § 113 and impliedly authorizes a similar and some-

what overlapping remedy in § 107”). There is no cause to

infer that Congress intended to displace all existing section

107 remedies of PRPs.

Furthermore, the Government’s primary policy-based ar-

gument in support of its wholesale displacement theory has

no force. The Government argues that SARA embodies con-

gressional intent to discourage “unsupervised cleanups” by

giving PRPs a right of cost recovery only in contribution un-

der section 113, thus encouraging PRPs to settle with the

government. Petr. Br. 13. But, perversely, the Government’s

position would foreclose any action for cost recovery by most

PRPs that have conducted clean-up under the supervision of

state authorities, even recovery against those actually respon-

sible for the contamination. Given the predominance of state

agency oversight in hazardous-waste clean-ups, such an intent

cannot be imputed to Congress.

This Court must analyze the proper relationship of section

107(a) and section 113 in light of the respective roles of fed-

eral and state law in regulating clean-up of sites contaminated

with hazardous substances. See Transamerica Mortg. Advi-

sors, Inc. (TAMA) v. Lewis, 444 U.S. 11, 19-20 (1979) (im-

plied rights of actions are to be determined by analysis of ex-

press remedies). State environmental agencies supervise

clean-up at the vast majority of such sites. Those state au-

thorities have abatement powers not from CERCLA but only

pursuant to state law. Congress clearly did not intend to deny

cost recovery to PRPs who clean up hazardous wastes under

the supervision of state authorities, as even the Government

would apparently concede (see Petr. Br. 36-40). This Court

cannot reasonably adopt a construction that would have that

result.

17

A. State Environmental Agencies Regulate Hazard-

ous Waste Clean-Up At Most Sites.

Any interpretation of CERCLA must begin with recogni-

tion of the sheer magnitude of the problem that confronted

Congress in the late seventies. “In 1979 the EPA estimated

that as many as 30,000 to 50,000 sites existed, of which be-

tween 1,200-2,000 present[ed] a serious risk to public health.”

H.R. Rep. No. 96-1016, pt. 1, at 18 (1980). Only six years

later, as Congress was considering the Superfund Amend-

ments and Reauthorization Act, there were an estimated

10,000 Superfund sites posing a serious risk to public health.

H.R. Rep. No. 99-253, pt. 1, at 55. Because Congress recog-

nized that the “EPA will never have adequate monies or man-

power to address [all hazardous waste sites],” it anticipated

that federal enforcement would concentrate on high priority

sites. Jd. To that end, section 105 requires the EPA to estab-

lish criteria for determining the priority of response actions,

based on the relative risk to public health and the environ-

ment. 42 U.S.C. § 9605(a)(8)(A)-(B). Congress envisioned

that EPA would respond directly only to “the nation’s worst

sites.” S. Rep. No. 107-2, at 2 (2001).

The principal mechanism by which Congress promotes

clean-up of hazardous wastes at other sites is through the

creation of strict private liability for response costs under sec-

tion 107. Cf. H.R. Rep. No. 96-1016, pt. 1, at 17 (noting the

dual purpose of Congress to encourage prompt clean-up of

hazardous-waste sites and to hold responsible parties liable

for clean-up costs).

Importantly, CERCLA does not grant direct federal en-

forcement or abatement authority to the States, nor does the

statute provide for general delegation of the program to the

States. Under section 104, EPA may (but only rarely does)

delegate federal authority to conduct response actions to any

State capable of carrying out actions under that section, upon

execution of a site-specific cooperative agreement with the

EPA. 42 U.S.C. § 9604(d)(1). Finally, section 107(a) allows

18 -

a State to recover any clean-up costs it has incurred from a

PRP. Id. § 9607(a)(4)(A). But States have no power under

CERCLA to obtain money from the Superfund or to compel

PRPs to conduct clean-up activities. Hence, Congress recog-

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

Nation will not be cleaned up by the Superfund program. In-

stead, most sites will be cleaned up under State authority.” S.

Rep. No. 107-2, at 15.’

Various state laws create an extensive network of authority

governing hazardous-waste site clean-up.’ In a single year,

States supervised more than four times as many clean-ups un-

der various state laws as the EPA has supervised pursuant to

CERCLA since its enactment in 1980.” This discrepancy re-

sults from the EPA’s focus on a limited number of high prior-

ity sites; while the NPL contains about 1,200 sites, States

have identified about 63,000 known or suspected sites. Envtl.

L. Inst., supra, at 15. While laws vary from state to state, the

majority of states have authorities analogous to the EPA’s

authority under CERCLA. /d. at 13. The various state pro-

grams generally provide for some combination of the follow-

ing: emergency response actions, permanent remediation, a

’ States sometimes bring judicial actions with mixed abatement and

cost-recovery claims under both state and federal law, without differentiat-

ing under which law its abatement authority arises. But States clearly

have no authority to compel response actions under CERCLA.

* All 50 states, as well as the District of Columbia and Puerto Rico,

have laws providing for authority over hazardous-waste sites. Envtl. L.

Inst., An Analysis of State Superfund Programs: 50-State Study, 2001 Up-

date 54-59 -(Nov. 2002), available at http://www.elistore.org/reports_

detail.asp?1ID=10746.

* During fiscal year 2000, states completed more than 4,500 cleanups.

Envtl. L. Inst., supra, at 7. By the end of FY 2000, states had conducted

approximately 29,000 total cleanups. /d. Meanwhile, as of December

2006, the EPA had completed cleanup-phase construction at only 1,006

NPL sites. EPA, Superfund National Accomplishments Summary Fiscal

Year 2006 (Mar. 2007) at http://www.epa. Spey

numbers06.htm.

19

fund or other financing mechanism, abatement authority to

order PRPs to take action, and procedures providing for pub-

lic participation. /d.

New Jersey was at the forefront of hazardous-waste site

clean-up legislation. In 1976, the Spill Compensation and

Control Act was codified.'® N.J. Stat. Ann. § 58:10-23.11 ef

seq. The Act created a comprehensive scheme for cleaning

up hazardous-waste sites and holding responsible parties li-

able. As is generally true under CERCLA, dischargers'' are

subject to strict, joint, and several liability. Under the Act,

the State maintains a list of known contaminated sites, similar

to CERCLA’s NPL. /d. § 58:10-23.16. The Act creates a

fund which the New Jersey Department of Environmental

Protection (“NJDEP”) may use to respond to discharges of

hazardous waste. /d. § 58:10-23.11i. The NJDEP may then

recover fund expenditures from dischargers. Jd. § 58:10-

23.11q. Finally, the Act allows one discharger to sue another

for contribution. Jd. § 58:10-23.11f.'7

New York’s law governing hazardous-waste site clean-up

mirrors CERCLA in many respects. N.Y. Envtl. Conserv.

Law § 27-1301 et seg. Indeed, the New York legislature en-

acted this statute as a complement to CERCLA, finding that

“federal legislation would rely on state programs for the iden-

'° This New Jersey law was the model for CERCLA. Envtl. L. Inst.,

supra, at 11.

'' Dischargers are defined as “any person who has discharged a hazard-

ous substance, or is in any way responsible for any hazardous substance.”

N.J. Stat. Ann. § 58:10-23.11g(c)(1).

'? In addition to the CERCLA-like Spill Act, New Jersey has a number

of other laws relating to the cleanup of hazardous-waste sites. The Indus-

trial Site Recovery Act requires owners or operators of an industrial estab-

lishment to obtain NJDEP approval before transferring industrial property

or closing operations, effectively requiring cleanup of industrial properties

before transfer. NJ. Stat. Ann. § 13:1K-6 ef seg. In 1998, New Jersey

enacted the Brownfields and Contaminated Sites Remediation Act. /d.

§ 58:10B. The Act allows the NJDEP to oversee and approve cleanup

activities at sites that are not on state or federal priority lists. /d.

20

tification and management of inactive sites,” and recognizing

the need “to ensure that state and local governments will be

prepared to implement those federal programs.” 1979 N.Y.

Sess. Laws 599, 600. The law provides for listing of priority

sites, for financing of clean-ups with state funds, and for joint

and several liability among PRPs. N.Y. Envtl. Conserv. Law

§ 27-1305; N.Y. State Fin. Law § 97-b; N.Y. Comp. Codes R.

& Regs. tit. 6, § 375-2.2. However, like the majority of

states,'> New York does not have statutory provisions allow-

ing private parties to bring contribution or cost recovery ac-

tions. Instead, only the New York State Department of Envi-

ronmental Conservation can pursue an action against a PRP.

See 2 Gerrard, supra § NY.04[2]. In addition to its state

superfund law, New York oversees hazardous-waste site

clean-up under its Brownfield Cleanup Program. N.Y. Envitl.

Conserv. Law § 27-140. et seq.

Under New York’s Superfund and Brownfield Cleanup

Programs, remediation programs are selected by the NYS-

DEC (with input from the New York State Department of

Health) based on the same criteria and hierarchy of preferred

remedial strategies as CERCLA National Priority List sites.

The NYSDEC is aggressive in its clean-up and enforcement

efforts under the State Superfund law. Since state fiscal year

1985/1986, New York has issued a total of 1,128 orders on

consent, requiring responsible parties to pay for or conduct

remedial activities. See NYSDEC, Annual Remedial Pro-

grams Report for State Fiscal Year 2005-06, at iii (2006),

' Many states enacted analogous statutes governing hazardous-waste

site clean-up in the wake of CERCLA, although fewer than 15 states have

statutory contribution provisions. See generally 2 Michael B. Gerrard,

Brownfields Law & P: actice §§ AL.OI-WY.08 (2006) (state-specific

chapters discussing state superfund laws). States presumably have not

enacted such cost-recovery laws because PRPs were deemed to have full

recourse under CERCLA. The following states provide some statutory

right of action for private parties to recover cleanup costs: Arkansas, Cali-

fornia, Delaware, Georgia, Hawaii, Indiana, Louisiana, Minnesota, Mon-

tana, New Hampshire, New Jersey, Oregon, Pennsylvania, and Utah. /d.

21

available at http://www.dec.state.ny.us/website/der/2006an-

nualreport.pdf; NYSDEC, Annual Remedial Programs Report

for State Fiscal Year 2004-05, at iv (2005), available at

http://www.dec.state.ny.us/website/der/200Sannualreport.pdf.

As of March 31, 2006, the NYSDEC had completed remedia-

tion at a total of 487 sites listed on the State’s priority list,

with responsible parties contributing an estimated 68 percent

of the costs — approximately $4.51 billion. NYSDEC, supra,

at 111 (2006). Additionally, cost-recovery actions brought by

the State against PRPs during state fiscal year 2005/2006 ac-

counted for $17.9 million in revenue for the NYSDEC. /d. at

4.

The importance of state direction and oversight in the

clean-up of hazardous-waste sites is substantiated in the 2002

CERCLA amendments. Congress recognized the limitations

of federal oversight under CERCLA when it adopted those

amendments, noting that the “intent of the bill is to direct

more public and private resources toward restoring contami-

nated properties that are not likely to be addressed by the

Federal Government.” S. Rep. No. 107-2, at 4. The Small

Business Liability Relief and Brownfields Revitalization Act

amended CERCLA in several important respects. The

amendments added section 128, which prohibits the EPA

from using its section 106 or section 107(a) authorities when

a clean-up is being conducted pursuant to a qualified state

program, with certain -limited exceptions. 42 U.S.C.

§ 9628(b\(1 (A) & (B).'* The amendments also added new

section 10S(h). /d. § 9605(h). Under that section, the EPA

must defer listing a site on the NPL, at a State’s request, if the

site is undergoing clean-up activities pursuant to state law.

'* The EPA may use its abatement powers if (1) the state requests EPA

assistance; (2) the contamination has crossed state lines; (3) a release or

threatened release may present an imminent and substantial danger to pub-

lic health or the environment and additionat-actions are necessary to ad-

dress the release; or (4) new information shows that the contamination

poses a threat requiring further action. 42 U.S.C. § 9628(b)(1)(B).

22

Id. This provision was intended to “create a strong incentive

for parties to agree to work with State authorities to clean up

a site.” S. Rep. No. 107-2, at 20 (emphasis added). These

provisions evince Congress’s intent that federal supervision

pursuant to CERCLA be limited to high priority sites, while

States oversee the vast majority of clean-up activities.

B. Courts Have Interpreted Section 113(f)(3)(B)

Narrowly To Provide A Contribution Remedy

Only For The Limited Federal Liability Of A

PRP To A State.

The Government attempts to draw support for its position

from section 113(f)(3)(B), which grants a contribution rem-

edy to “[a] person who has resolved its liability to the United

States or a State for some or all of a response action or for

some or all of the costs of such action in an administrative or

judicially approved settlement.” 42 U.S.C. § 9613(f)(3)(B).

The Government argues that Congress intended section 113 to

be the exclusive remedy for PRPs, so as to encourage settle-

ments with federal and state governments. Petr. Br. 26, 36-

43. Indeed, the Government suggests that if a property owner

wishes to recover clean-up costs from another PRP, it “need

only enter into a settlement with the federal or state govern-

ment,” and then proceed under section 113(f)(3)(B). /d. at 43.

The Government neglects the prevailing judicial construction

of section 113(f)(3)(B), which would not provide the vast ma-

'S The Government repeatedly refers to “unsupervised cleanups,” Petr.

Br. 39, or “‘wholly voluntary, unsupervised, sua sponte cleanup opera-

tion{s],"" id at 41. This characterization of clean-up activities as pure

voluntarism is misleading. While there are undoubtedly cleanups con-

ducted with no government oversight or approval, state laws addressing

hazarcous-waste site cleanup are extensiv:, as discussed above, and the

major ty of cleanups (including the clean-up performed by Con Edison in

the Consolidated Edison case before the Second Circuit) are conducted

with state agency oversight. Precluding those PRPs working under a state

settlement or cooperation agreement—with comprehensive state supervi-

sion—from maintaining a cost recovery action would not encourage such

settlements.

23

jority of PRPs who settle or otherwise cooperate with state

authorities any remedy to recover response costs.

Despite the prevalent role of states in hazardous waste

clean-up, many courts have interpreted this section narrowly

to allow contribution actions only when a PRP has resolved

its federal CERCLA liability to a State. See, e.g., Consoli-

dated Edison, 423 F.3d at 95-96; Differential Dev.-1994, Ltd.

v. Harkrider Distrib. Co., No. H-05-3375, 2007 WL 87661

(S.D. Tex. Jan. 9, 2007); Raytheon Aircraft Co. v. United

States, 435 F. Supp. 2d 1136 (D. Kan. 2006); W.R. Grace &

Co. v. Zotos Int'l, Inc., No. 98-CV-838S(F), 2005 WL

1076117 (W.D.N.Y. May 3, 2005); City of Waukesha v. Via-

com Int'l Inc., 404 F. Supp. 2d 1112 (E.D. Wis. 2005); Gen-

eral Time Corp. v. Bulk Materials, Inc., 826 F. Supp. 471

(M.D. Ga. 1993).

Courts adopting this view have reasoned that “the right to

contribution under section 113(f)(3)(B) is defined by the

scope of the liability resolved.” Raytheon, 435 F. Supp. 2d at

1144. They have disallowed a section 113(f)(3)(B) action

when the clean-up was conducted pursuant to a voluntary

state program, Differential Dev.-1994, 2007 WL 87661, at *8-

9, and prohibited contribution actions where federal CERCLA

liability is not resolved in the state settlement agreement,

General Time, 826 F. Supp. at 474-76. The Second Circuit

based its narrow interpretation of section 113(f)(3)(B) on the

statutory use of the term “response action.” Consolidated

Edison, 423 F.3d at 95-96. The court reasoned that because a

response action is a “CERCLA-specific term,” and such an

action is a prerequisite to a contribution action under section

113(f)(3)(B), only settlements resolving federal CERCLA

liability to a State may provide the basis for a section

113(f)(3)(B) suit. Jd.

If section 113(f)(3)(B) grants a PRP a right in contribution

to recover only the response costs for which it has federal li-

ability to a State under CERCLA, it is a very narrow remedy.

As discussed above, a PRP is liable to a State under CERCLA

24

only when the State itself expends resources in conducting a

clean-up. 42 U.S.C. § 9607(a)(4)(A) (PRPs are liable for “all

costs of removal or remedial action incurred by ... a State ...

not inconsistent with the national contingency plan”) (empha-

sis added). The State has no abatement power under CER-

CLA, and thus a PRP has no liability under CERCLA to a

State comparable to the PRP’s liability under section 106 to

the United States. See id. § 9622(c)(1) & (2). Thus, under

the prevailing judicial interpretation that section 113(f)(3)(B)

applies only to a PRP’s settlement of its federal liability to a

State (i.e., only to its liability for response costs that have

been or would be incurred by the State itself), the contribution

remedy of section 113(f)(3)(B) is extremely limited. There

would be no section 113(f)(3)(B) contribution remedy for the

many PRPs who (like Con Edison) incur their own response

costs pursuant to voluntary cooperation agreements or settle-

ments with state regulatory agencies under state law. Indeed,

the Second Circuit so held in ruling that the release and cove-

nant-not-to-sue in Con Edison’s VCA resolved only state law

liability, and thus Con Edison had no remedy under section

113(f)(3)(B). Consolidated Edison, 423 F.3d at 92-93.

In spite of the Second Circuit’s narrow interpretation of

section 113(f), it did not bar Con Edison from recovering its

costs from UGI; rather it is one of a number of courts that

have allowed PRPs to recover clean-up costs under section

107(a). Jd. at 97-100; Raytheon Aircraft, 435 F. Supp. 2d at

1145-51; Viacom, Inc. v. Uniied States, 404 F. Supp. 2d 3, 6-

7 (D.D.C. 2005); City of Bangor v. Citizens Commc'ns Co.,

437 F. Supp. 2d 180, 220 (D. Me. 2006). Indeed, this Court

has noted that section 107(a) “unquestionably provides a

cause of action for private parties to seek recovery of cleanup

costs.” Key Tronic Corp., 511 U.S. at 818. The section

107(a) cause of action “impliedly authorizes private parties to

recover cleanup costs from other PRP’s.” /d. (emphasis

added). Based on the plain language of section 107(a), the

Second Circuit held that Con Edison could maintain a cost

25

recovery action against UGI because Con Edison is a person

for purposes of CERCLA, 42 U.S.C. § 9601(21), and it in-

curred “costs of response” associated with a “removal” and

“remedial action.” Consolidated Edison, 423 F.3d at 99. If

the Government’s contrary position carries the day, and PRPs

are barred from instituting cost recovery actions under section

107(a), those PRPs working with state authorities to clean up

contaminated sites will be left with no avenue to collect their

response costs from other PRPs.

C. The Express Contribution Remedies Of Section

113(.. Are Complementary To The Implied

Rights Of Action Under Section 107(a).

The right answer is the one arrived at by the court of ap-

peals below. Section 107(a) allows PRPs to maintain a pri-

vate right of action to recover response costs, and the section

113 remedies are complementary to section 107(a) remedies

(displacing them only pro tanto). Pet. App. 17a. In enacting

SARA, Congress dispelled uncertainty over whetiyer the im-

plied private right of action of section 107(a) included an im-

plied right of contribution once a PRP’s CERCLA liability

has been established by judgment or settlement, since contri-

bution remedies are not readily implied in federal statutes.

Cooper, 543 U.S. at 162; Texas Indus., Inc. v. Radcliff Mate-

rials, Inc., 451 U.S. 630, 638-47 (1981). Congress’s intent in

SARA was to broaden the availability of cost recovery ac-

tions, not to restrict them.

In this vein, the Government’s wholly misconceives the

legislative history regarding SARA’s promotion of negotiated

clean-ups. The Government is right that SARA was meant to

“encourage private party settlements and cleanups. ... Pri-

vate parties may be more willing to assume financial respon-

sibility for some or all of the cleanup if they are assured that

they can seek contribution from others.” H.R. Rep. No. 99-

253, pt. 1, at 80. But Congress achieved that goal by giving

certainty to private parties that settling with state or federal

authorities would not extinguish their nght to cost recovery

26

from other PRPs. To eliminate doubt as to whether an im-

plied right of contribution under section 107(a) exists in that

circumstance, Congress created an express right of action in

section 113(f) for contribution. See H.R. Rep. No. 99-253, pt.

3, at 20 (1985) (Congress specifically “included this provision

to encourage settlements and to avoid problems that might

otherwise arise due to the courts’ reluctance to imply new

private rights of action under federal statutes”) (discussing the

need for an explicit provision allowing a settlor to seek con-

tribution from a non-settlor). Section 113(f) ensured that no

PRP settling with federal or state authorities would have to

bear the entire burden of response costs for which another

PRP is justly held responsible in part.

If the Court adopts the correct view of section 113 as com-

plementary to section 107(a) — either creating a new remedy

where one could not be implied under section 107(a), or dis-

placing existing section 107(a) remedies pro tanto — it need

not at this time resolve the substantive scope of section

113(f(3)(B). Every PRP would have a private right of action

to recover response costs, either under section 107(a) or

(when it applies) section 113(f). The boundaries between

107(a) and 113(f) would be a matter for the lower courts.

However, if this Court were to contemplate the Govern-

ment’s narrow construction of section 107(a) (despite the

flaws outlined above, supra at 11-14), it must grapple with

the substance of the express remedy of section 113(f)(3)(B).

It is unfathomable that Congress would have intended a

highly restrictive implied right of action under section 107(a)

and a highly restrictive express right of contribution under

section 113(f)(3)(B). There is simply ino plausible interpreta-

tion of CERCLA that would exclude PRPs working closely

with state authorities under a voluntary clean-up or settlement

agreement from maintaining cost-recovery actions against

other PRPs.

If arguendo the Government were correct that section

107(a) affords a private right of action only to “innocent” par-

27

ties, at a minimum that could only be so if section

113(f)(3)(B) conferred a broad contribution remedy on set-

tling parties. As noted above, supra at 23, courts that have

construed section 113(f)(3)(B) restrictively have generally

read the phrase “person who has resolved its liability to the

United States or a State for some or all of a response action,”

42 U.S.C. § 9613(f(3)(B) (emphases added), to refer to the

PRP’s CERCLA liability. See, e.g., Consolidated Edison, 423

F.3d at 95 (“We read section 113(f)(3)(B) to create a contri-

bution right only when liability for CERCLA claims, rather

than some broader category of legal claims, is resolved.”).

But that is by no means a necessary or even a preferred read-

ing of the statutory language. When Congress meant to refer

strictly to federal liability under CERCLA, it knew how to do

so with specificity. See, e.g, 42 U.S.C. § 9613(f)(1) (refer-

ring to persons “liable or potentially liable under section

9607(a) of this title”); id. § 9622(c)(2)(A) (noting that provi-

sion does not affect “[t}he liability of any person under sec-

tion 9606 or 9607 of this title”); id. § 9622(f)(1) (referring to

covenants not to sue “concerning any liability to the United

States under this chapter”). Section 113(f)(3)(B), however,

refers only to the resolution of “liability,” without any qualifi-

cation as to the legal basis for the liability. Given Congress’s

awareness that most hazardous waste clean-up would occur

under state law, the natural reading of this section is that

Congress granted an express contribution remedy to any one

who has resolved “some or all” of his liability to a State, re-

gardless of the type of claim that the State could have brought

to enforce that liability. /d § 9613(f)(3)(B). Section

113(f(3)(B) allows a person potentially liable in a state

abatement action to enter into an agreement with a State to

“respond” to a hazardous-waste site by performing a “re-

moval” or “remedial action” under CERCLA, id. § 9601(23)-

(25), and then seek contribution for those response costs from

another responsible party.

28

This Court need not venture down this path of construing

section 113(f), because (for all the foregoing reasons) the

Government’s construction of section 107(a) is too flawed to

command allegiance. The proper interpretation of sections

107(a) and 113(f) — and all that is necessary to resolve this

case — is that they afford complementary remedies, and the

latter displaces the former only pro tanto.

D. Recognition Of An Implied Right Of Action For

PRPs Under Section 107(a) Creates No Anoma-

lies.

The Government seeks to defeat this common-sense con-

struction of CERCLA by arguing that recognizing an implied

right of action in favor of PRPs would create various anoma-

lies. None of its arguments has force.

First, the Government argues that recognition of a section

107(a) implied right of action would nullify the section 113(f)

remedy because the former has a longer statute of limitations.

Petr. Br. 30-31; see 42 U.S.C. § 9613(g)(2) & (3). But that

argument is based on the Government’s false supposition that

a PRP who qualifies for a section 113(f) remedy may elect to

proceed under section 107(a) as an alternative. See Petr. Br.

32-33. There is no warrant for implying a right of action

where Congress has given a specific express remedy. A PRP

only has a section 107(a) remedy until a section 113(f) rem-

edy accrues: i.e., until there is a “judgment in any action un-

der this chapter for recovery of such costs or damages,” or

“an administrative order” under section 122 or “a judicially

approved settlement with respect to such costs or damages.”

42 U.S.C. § 9613(g)(3)(A) & (B).'® A PRP cannot rely on the

'° A claim for contribution may be asserted “during or following any

civil action under section 9606 of this title or under section 9607(a) of this

title.” 42 U.S.C. § 9613(f(1). A contribution claim brought by a PRP

“during” a civil action against it — but prior to any judgment or settlement

of liability against that PRP — would be a contingent counterclaim, cross

claim, or third-party claim anticipating the possibility of a subsequent

judgment or settlement of liability. See Fed. R. Civ. P. 13(a), (b), (c) &

29

longer statute of limitations for section 107(a) actions once a

section 113(f) right of action accrues.

Second, the Government suggests that recognition of a sec-

tion 107(a) action in favor of PRPs is unfair to other PRPs at

the site who have already settled with the government. “A

person who has resolved its liability to the United States or a

State in an administrative or judicially approved settlement

shall not be liable for claims for contribution regarding mat-

ters addressed in the settlement.” /d. § 9613(f)(2). The Gov-

ernment reasons that the section 1 13(f)(2) settlement bar only

applies to contribution actions under section 113(f)(1) or (3),

but not section 107(a) cost-recovery actions; therefore the lat-

ter should not be implied. Petr. Br. 31. Even if arguendo the

Government’s interpretation of section 113(f)(2) — which is

controversial and beyond the scope of this brief — were cor-

rect, the federal courts have latitude in section 107(a) to rec-

ognize an implied settlement bar defense parallel to section

113()(2) if necessary to the proper implementation of CER-

CLA.

Third and finally, the Government contends that it would be

anomalous “to permit a PRP to pursue an action against an-

other PRP for joint and several liability under Section 107(a)

in lieu of an action under Section 113(f), which permits re-

covery only for an equitable share of the costs.” /d But this

Court has not held that joint and several liability is inexorably

applied in section 107(a) actions, Cooper Industries, 543 U.S.

at 169-70 (leaving open whether a plaintiff “may pursue a

§ 107 cost recovery action for some form of liability other

than joint and several”), and indeed, in the years after CER-

CLA was enacted, courts have rejected a rigid application of

joint and several liability under section 107. See Allied Corp.

14(a) (discussing claims that another party “may be liable”).

'’ Moreover, this argument does not aid the Government. Under its

theory of section !13(f){2), the section 107 actions it endorses (those

brought by innocent parties) could likewise be brought against settling

PRPs, and the prior settlement could not be invoked as a defense.

30

v. Acme Solvents Reclaiming, Inc., 691 F. Supp. 1100, 1116

(N.D. Ill. 1988) (“regardless of the indivisibility of the harm,

where the peculiar facts of the case point to a more fair appor-

tionment of liability [the court may reject application of joint

and several liability].”) (emphasis added); United States v.

Hardage, 116 F.R.D. 460, 465-66 (W.D. Okla. 1987); United

States v. A & F Materials Co., 578 F. Supp. 1249, 1256 (S.D.

Ill. 1984). Recognizing that small contributors may not be

able to prove divisible harm, one court held that compulsory

application of joint and several liability “must be avoided be-

cause both Houses of Congress were concerned about the is-

sue of fairness, and joint and several liability is extremely

harsh and unfair if it is imposed on a defendant who contrib-

uted only a small amount of waste to the site.” /d. (applying

so-called “Gore Amendment” factors to apportion liability);

see also Allied Corp., 691 F. Supp. at 1116-18 (citing use of

Gore factors with approval). Thus, in adjudicating implied

rights of action for cost recovery under section 107a, courts

have modified joint-and-several liability to permit a just ap-

portionment of damages consistent with the novel legal liabil-

ity regime created by CERCLA.

The only true anomaly would be the one created by the

Government’s position, where PRPs who incur costs reme-

diating or removing hazardous substances are barred in many

circumstances from recovering those costs even from more

culpable parties who are equally liable under CERCLA.

CONCLUSION

This Court should affirm the judgment below.

Woopy N. PETERSON

DAVID L. ELKIND ~

JOSEPH R. BERGER

DICKSTEIN SHAPIRO LLP

1825 Eye Street, NW

Washington, DC 20006

(202) 420-2200

RICHARD W. BABINECZ

PETER P. GARAM

MICHAEL A. WILCKEN

CONSOLIDATED EDISON

COMPANY OF NEW YORK, INC.

4 Irving Place

New York, NY 10003-3502

(212) 460-3383

Respectfully submitted,

CARTER G. PHILLIPS

ANGUS MACBETH

STEPHEN B. KINNAIRD*

SIDLEY AUSTIN LLP

1501 K Street, NW

etn ae 20005

(202) 736-8000

MARGARET R. SOBOTA

SIDLEY AUSTIN LLP

One South Dearborn

Chicago, IL 60603

(312) 853-7000

Attorneys for Amicus Curiae

April 4, 2007

* Counsel of Record

\