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

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6330

33P 7

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 AMICUS CURIAE

OF THE METROPOLITAN WATER

RECLAMATION DISTRICT OF GREATER CHICAGO

IN SUPPORT OF RESPONDENT

FREDERICK M. FELDMAN HARVEY M. SHELDON

Attorney Counsel of Record

CARLTON LOWE JOEL D. BERTOCCHI

Head Assistant Attorney CHARLES F. HELSTEN

THE METROPOLITAN PHILIP R. KUJAWA

WATER RECLAMATION STEPHEN R. SWOFFORD

DISTRICT OF HINSHAW & CULBERTSON LLP

GREATER CHICAGO 222 North LaSalle Street

100 East Erie Street Chicago, Illinois 60601

Chicago, Illinois 60611 (312) 704-3000

(312) 751-6579

Midwest Law Printing Company’ Photex — Chicago — (312) 431-0185

TABLE OF CONTENTS

PAGE

INTEREST OF THE AMICUS CURIAE ............. 1

SUMMARY OF ARGUMENT ...........ccccccceees 3

6 i NE ee a 4

Ol.

THE METROPOLITAN WATER RECLAMATION

DISTRICT AND A HOST OF OTHER UNITS OF

LOCAL GOVERNMENT HAVE A SERIOUS NEED

FOR COST RECOVERY RIGHTS ............... 4

A. Cost recovery rights will enhance the abilities of a

myriad of special purpose agencies and districts in

the United States that own contaminated property

tp clonm wp Ghat property... 2... ccc ccccccess 4

B. CERCLA’s “Brownfield” reclamation programs,

while helpful to the economy and environment

generally, do not supplant or assuage the need for

“cost recovery” rights for agencies owning contami-

es Sit Gi ea adie d ok aw tee oe 7

DENIAL OF A COST RECOVERY RIGHT TO PRPS

THAT VOLUNTARILY INCUR RESPONSE COSTS

WOULD PERPETUATE ENVIRONMENTAL PROB-

LEMS AND SERVES NO WORTHY PUBLIC OR

GOVERNMENTAL PURPOSE ................. 9

A. Giving the United States and the States the sole

power to control and approve the remediation

of hazardous substance contamination unwisely

and unnecessarily increases government power

over a huge amount of troubled real estate nation-

RPE ES Aer Pepene pee een re ange eres on ee eer Fae 9

B. Sections 107 and 113 define two different causes of

action with two disparate sets of fundamental

elements that a successful plaintiff must

C. Any suggestion that voluntary cleanups are some-

how “unsupervised’and therefore less worthy or

suspect is contrary to actual practice ....... 13

D. It would be folly to suppose that many prospective

“innocent” Section 107 plaintiffs exist that will

expend a lot of money on cleanups without a vested

interest in a given property, such as the interests

rr co uadubeeees Mane ous 15

E. The United States’ contention that settlement will

be discouraged and enforcement impaired by the

existence of a cost recovery right for PRPs

that volunteer is unrealistic................ 16

Il. THE SEVENTH CIRCUIT RECENTLY RULED IN A

CORRECT AND CONVINCING MANNER ON THE

QUESTION BEFORE THIS COURT ........... 20

A. The United States’ reading of the statute is un-

grammatical and does violence to Section

i ire ots ae edduriwaibetdeaee ee 21

B. Section 107 expressly allows “cost recovery” to be

sought by “any other person,” without limiting to

non-PRPs the class of plaintiffs that fall within that

broadest of phrases. No judicial deference to the

United States’ limited reading of “any” is required

EE cd candciuscdesvddncvenenet , 22

C. Congress intended to encourage those involved with

polluted sites to clean them up themselves rather

than await government enforcement action... 22

CONCLUSION

TABLE OF AUTHORITIES

Case Law PAGE(S)

Akzo Coatings Inc. v. Aigner Corp.,

BP ee Ce CPN, ID oc cc ceca cccessceces 18

Atlantic Research Corp. v. United States,

459 F.3d 827 (8th Cir. 2006), cert. granted,

i ee. cock Oe engeecisadecese tes 15

Bedford Affiliates v. Sills,

Fe EF) 7. fo | creer 16

Browning Ferris Industries of Illinois, Inc. v. Ter Maat,

Do ei ne ee ade ner ene ee 16

Consolidated Edison Co. of New York v. UGI

Utilities, Inc.,

ee Pe I, ED ov occ cevcccvuseoscece 12

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

REISE CEPR ee een rte 22

FMC Corp. v. Aero Industries, Inc.,

ee oe uN ee eked eas 23

Jones-Hamilton Co. v. Beazer Materials & Services, Inc.,

973 F.2d GBB (th Cir. 1902) ... ccc ccc cee eces 6

Key Tronic Corp. v. U.S.,

511 U.S. 809, 114 S.Ct. 1960 (1994) .............. 23

Metropolitan Water Reclamation Dist. v.

North Am. Galvanizing & Coatings, Inc..,

473 F.3d 824 (7th Cir. 2007) ............ 2, 20, 23-24

PMC, Inc. v. Sherwin-Williams Co.,

151 F.3d 610 (7th Cie. 1906) ...... 0... cece cneee 16

United States v. Bestfoods,

4 > Sf rr reer tr 5

United States v. Hercules, Inc.,

247 F.3d 706 (8th Cir.),

cert. denied 534 U.S. 1065 (2001) ................. 6

United States v. Mead Corp.,

gk epee cry ree 22

United States v. R.W. Meyer, Inc.,

932 F.2d 568 (Gth Cir. 1991) ..........2cccccees 16

Tnited States v. SCA Services of Indiana, Inc.,

827 F.Supp. 526 (N.D. Ind.1993) ............... 17

United States v. USX Corp.,

be Fite at | reer Se 18

Statutes and Federal Regulations

Comprehensive Environmental Response Compensation

and Liability Act (“CERCLA”),

TD UA. Bee GOOEE, ccc cud jwusieusceoees passim

Small Business Liability Relief and Brownfields

Revitalization Act (Public Law 107-118) .......... 7

Code of Federal Regulations, 40 C.F.R. Part 300

(http://www.epa.gov/oilspill/pdfs/40cfr300.pdf) .... 12

ORG WEED: ..ci 14

42 CFR § 300.430(eXS)GiiiM(B) .. 2 ee ee ee 14

GEGP GS SEV oo ce cdcdciuvsvcesnneeeneoes 14

EE ee 14

rr oii chee eeeé beens ebereses 14

ees ee eee bhakégyet.eeves 14

i tise eee ee ehh s 8 66ee enn cex seuseines 1

Other Authorities

126 CONG. REC. 26,338 (1980) .......... cece ee eees 23

126 CONG. REC. EY 6s cee deeesasecewe 18

126 CONG. REC. 31,965 (1980) .............000eeeee 18

BROWNFIELDS: A COMPREHENSIVE GUIDE TO

REDEVELOPING CONTAMINATED PROPERTY

(T. Davis ed. 2002), American Bar Association

EE 7,15

EPA: APPLICABLE OR RELEVANT AND APPROPRIATE

REQUIREMENTS

(http://www.epa.gov/superfund/action/guidance/

Te ee ke ce eeseeee ee 14

EPA: FINAL NATIONAL PRIORITIES LIST (NPL) SITES—BY

STATE (March 2007),

(http://www.epa.gov/superfund/sites/query/

GREE RE 11

EPA: PROPOSAL GUIDELINES FOR BROWNFIELD S

ASSESSMENT, REVOLVING LOAN FUND, AND CLEANUP

GRANTS (http://www.epa.gov/oswer/docs/grants/

epa-oswer-obcr-07-Ol.pdf) ...............-.0005. 8

vii

EPA: THE NEW BROWNFIELDS LAW (October 2002),

EPA 500-F-02-134

(http://www.epa.gov/brownfields/pdf/ ©

iD . cctucdebaeeanesebeeeheees 7

EPA: SUPERFUND’S 25TH ANNIVERSARY: CAPTURING THE

PAST, CHARTING THE FUTURE

(http://www.epa.gov/superfund/25anniversary/

a ee eeu dieweeekent ll

GAO REPORT TO THE CHAIRMAN, COMMITTEE ON

ENVIRONMENT AND PUBLIC WORKS, U.S. SENATE:

“SECURING WASTEWATER FACILITIES,” GAQ-06-390 . 4

“GAO REPORT, SUPERFUND: BARRIERS TO BROWNFIELD

REDEVELOPMENT, GAO/RCED-96-125 ........... 15

H.R. REP. No. 96-1016(1) , 96th Cong., 2nd Sess. (1980),

1980 U.S.C.C.A.N. 6119, 1980 WL 12937 .......... 23

M. LESTER & L. BEASON, THE MCGRAW-HILL HANDBOOK

OF ENGLISH GRAMMAR AND USAGE (2005)

i ok da een eeeeeene 21

RESTATEMENT (SECOND) OF TORTS §886(A) .......... 13

S. REP. 107-2, S. Rep. No. 2, 107th Cong., 1st Sess.

0 BK Fe ee ee ee 11

St 7 : o é : .

Ae eee a > = ——— oer

5 . o .

INTEREST OF THE AMICUS CURIAE

The Metropolitan Water Reclamation District of Greater

Chicago (“MWRD” or “Amicus’”) is one of the largest unified

metropolitan sewerage and storm water control districts in

the world.’ It is a special purpose district that is a body

corporate and politic and a unit of local government under

Illinois law, principally as set forth in the Metropolitan

Water Reclamation District Act, 70 ILCS 2605. It is gov-

erned by an elected Board of Commissioners.

With a budget for 2007 of approximately $1 billion,

MWRD collects and treats wastewater from more than five

million people and the industrial equivalent of an addi-

tional 4.5 million people in Cook County, Illinois. There are

129 municipalities and 30 townships within its territorial

boundaries, including the City of Chicago. MWRD also

provides stormwater management for all of Cook County.

MWRD exercises regulatory control of discharges from

industry and residential properties to its sewers and

treatment system, imposes fees for use of the system, levies

and collects taxes for its operations and maintenance, and

may issue bonds for capital improvements needed for its

operational purposes. It has the power of eminent domain.

MWRD is also the owner of more than twenty-five

thousand acres of land, much of it lying along the banks of

' Amicus respectfully submits that, as a local government entity,

it is “similar” to those listed in Supreme Court Rule 37.4 and is

thus permitted to file this brief without consent. However, out of

courtesy and precaution, pursuant to Supreme Court Rule 37.3,

Amicus also has obtained consent of the parties. Their letters of

consent to this filing are being submitted to the Clerk of this

Court simultaneously with this brief. Pursuant to Supreme Court

Rule 37.6, Amicus avers that no counsel for a party has authored

this brief in -vhole or in part, and that no person or entity other

than the Amicus or its counsel has made a monetary contribution

to the preparation or submission of this brief.

waterways devoted to commerce and stormwater control.

This land presents various environmental issues for

MWRD. Some of it is used by MWRD, but uses of other

MWRD-owned land range from parks, recreation and

education to heavy industry. Over fifteen hundred acres

owned by MWRD are leased to business and industry. In

recent decades, standards for good environmental manage-

ment have increasingly been incorporated in lease terms,

but in some old leases still in effect the language and terms,

while favorable to MWRD, are not fully satisfactory to

assure that a tenant will be absolutely and fully responsive

to environmental issues. Moreover, sometimes tenants can

become financially unable to absorb the cost of clean-up.

Third parties may contaminate its properties, as well.

When environmental contamination of any of its property

occurs due to acts of others and there is either no tenant or

no responsive or financially responsible tenant, any cleanup

conducted by MWRD would require the expenditure of

public funds. If MWRD cannot recoup those funds from an

actively responsible party, the taxpaying public either pays

the bill, or MWRD and the public are left with a blighted

and sometimes vacated parcel.

MWRD has a very real and continuing interest in having

the right to cost recovery under Section 107 of the Compre-

hensive Environmental Response and Liability Act

(CERCLA), 42 U.S.C. §9607. Without such rights it may be

unable to recover public funds it expends to clean up

contaminated properties it owns or controls from the

persons or parties that were directly responsible for the

contamination. In addition, in Metropolitan Water Reclama-

tion District of Greater Chicago v. North American Galva-

nizing and Coatings, Inc., 473 F.3d 824 (7th Cir. 2007), the

United States Court of Appeals for the Seventh Circuit

recently ruled in MWRD’s favor on essentially the same

question presented in this case. The Seventh Circuit found

that Section 107 provides this important cost recovery right

to parties that voluntarily incur response costs.

SUMMARY OF ARGUMENT

Your Amicus and numerous other special purpose local

government agencies own land that can become contami-

nated by acts of others. They have a real need for a right to

recover the public monies they may spend to clean up these

properties from those who actively polluted them. Unless a

right to cost recovery is available, innocent taxpayers will

wind up footing the cleanup bill on the many acres owned

by public agencies that are deemed by the statute to be in

the class of so-called “potentially responsible parties,” or

“PRPs.”

The interpretation of Section 107 of CERCLA that the

United States advances in favor of excluding “potentially

responsible parties” from ability to gain cost recovery for

clean-ups they undertake is contrary to the statute and

serves no worthy public purpose. Denial of a cost recovery

right to private and public PRPs who volunteer will de-

crease the number of properties that are properly addressed

by remediation, and the concept that the “polluter pays” will

not operate against non-volunteers except where there is a

case of direct enforcement by the States or the United

States.

The plain language of Section 107 creates a right of action

for all “other persons” beyond the United States or a State,

and supports no exclusion of entities like MWRD. The

United States’ interpretation of the language of Section 107

of CERCLA deserves no judicial deference. Moreover, it is

ungrammatical and contrary to the express provisions and

the remedial! purposes of the law.

4 .

ARGUMENT

I.THE METROPOLITAN WATER RECLAMATION

DISTRICT AND A HOST OF OTHER UNITS OF

LOCAL GOVERNMENT NATIONALLY HAVE A

SERIOUS NEED FOR COST RECOVERY RIGHTS.

A. Cost recovery rights will enhance the abilities of

a myriad of special purpose agencies and districts in

the United States that own contaminated property to

clean up that property and reduce the burden on

innocent taxpayers and site users.

There are thousands of publicly owned wastewater

agencies like MWRD in this country. Each is charged with

the collection, treatment, reclamation and discharge of

wastewaters from residential, commercial and industrial

sources throughout their respective jurisdictions. Roughly

200 million people, or 67 per cent of this country’s popula-

tion, are served by publicly owned treatment works. Their

operations are financed by taxes, fees, federal government

loans and bonds. As a rule, these agencies are hard-pressed

to meet the demands for wastewater reclamation service.

They are challenged by aging infrastructure, increasing

regulatory requirements, security comerns (such as for

chlorine tanks and storage) and population growth. Gener-

ally they are “under funded.””

In addition to wastewater agencies like MWRD, numerous

other special purpose agencies of local government exist

nationwide that cannot readily divest themselves of envi-

ronmentally troubled properties. Included among such

agencies that generally own real estate are airport authori-

ties, port districts, exposition authorities, highway authori-

ties, school distriets, park districts, and public transit

? See GAO REPORT TO THE CHAIRMAN, COMMITTEE ON ENVIRON-

MENT AND PUBLIC WORKS, U.S. SENATE: “SECURING WASTEWATER

FACILITIES,” GAO-06-390 (p.5).

agencies. Many own properties that are used or occupied by

parties other than the agency, and those parties can cause

hazardous substances to be released in almost any way

imaginable. Since by mere fact of “ownership” these agen-

cies become “potentially responsible parties,” they would be

barred absolutely from relief under Section 107 if the

United States’ position in this case were to be accepted. In

turn, unless they seek to have themselves sued by or

otherwise resolve their liability with the United States or

their state government, they would not even have a “contri-

bution” remedy under CERCLA Section 113, 42 U.S.C.

§ 9613.

All of these agencies need cost recovery rights. The need

for a claim for cost recovery under Section 107 arises for

special purpose agencies in the obvious scenario where, as

in the case recently decided by the Seventh Circuit in favor

of your Amicus, there is a release of hazardous substances

by a person other than the agency to lands owned by the

agency. For wastewater agencies, there is the additional

danger that unpermitted hazardous substances could be

released into their collection systems, resulting in damage

to their equipment and real property. While there may

indeed be other common law and statutory remedies

available to a specific plaintiff in a given situation, the

ability to expend public funds and then get recovery from a

“responsible party” would at least be useful, and in some

cases may be the only way to get cleanup accomplished and

obtain appropriate compensation.

While not every case or situation will present a finan-

cially capable defendant available and demonstrably

“responsible,” the reach of CERCLA responsibility extends

beyond tenants or operators per se and includes (for exam-

ple) a parent company whose “veil” may be pierced if shown

to have abused the corporate form or that actively directs or

causes polluting activities, (Cf. United States v. Bestfoods,

524 U.S. 51, 55 (1998)), as well as so-called “arrangers” of

hazardous substance releases, such as companies that

contracted for chemical formulation or repackaging at a

site. Cf. United States v. Hercules, Inc., 247 F.3d 706 (8th

Cir.), cert. denied, 534 U.S. 1065 (2001); Jones-Hamilton Co.

v. Beazer Materials & Services, Inc. 973 F.2d 688 (9th Cir.

1992). CERCLA cost recovery would also enable agencies

like MWRD to sue those of its customers or midnight

dumpers who release hazardous substances in unpermitted

amounts into the MWRD collection system, where the

release would cause broader environmental damage.

Preserving this critical “reach” in the form of cost recovery

rights for “private” parties, and especially tax-funded ones,

could often determine whether a given site will be cleaned

up anytime soon, if at all.

Public PRPs are spending the dollars of innocent taxpay-

ers or site users whose fees are supposed to obtain public

services. Unless public agencies have a cost recovery right,

the burden of remediating dangerous sites will fall on

innocent taxpayers or customers uninvolved with the

pollution of those sites, the very group of persons that the

Congress sought to free of liability on the principle of “the

polluter pays.” Thus the “equities” favor indemnity of such

voluntary expenditures.

If accepted by the Court, the United States’ reading of

CERCLA would discourage voluntary responses and greatly

reduce the number of instances in which “the polluter pays.”

The United States’ position will greatly inhibit private

cleanup generally and reduce the likelihood that polluters

will pay for their actions, because the United States and the

States generally use enforcement effort only at the most

egregious sites.

B. CERCLA’s “Brownfield” reclamation programs,

while helpful to the economy and environment

generally, do not supplant or assuage the need for

“cost recovery” rights for agencies owning contami-

nated land.

In 2002, President Bush signed into law the Small

Business Liability Relief and Brownfields Revitalization Act

(P.L. 107-118). It amended CERCLA by expanding EPA’s

so-called “Brownfields” program, boosted funding for

assessment and cleanup, enhanced roles for State and

Tribal response programs, and clarified Superfund liability.

A “Brownfield” property is “real property, the expansion,

redevelopment, or reuse of which may be complicated by the

presence or potential presence of a hazardous substance,

pollutant, or contaminant.”®

As salutary as these revisions to CERCLA are, the “Catch

22” is that public agencies and others that already own

troubled sites are ipso facto “potentially responsible parties”

that cannot participate in the “Brownfields” grant process.

Additionally, if a site has had operations on it that were

subject to hazardous waste permits under the Resource

Conservation and Recovery Act, or to certain Clean Air Act,

Clean Water Act, or Toxic Substances Act permits, the site

is ineligible.‘ The revised and expanded “Brownfields”

programs thus miss an entire universe of PRPs, both public

and private, by making them ineligible for grants or bona

fide purchaser status. See, e.g., 42 U.S.C. §9601(40).

> See brochure published by EPA: THE NEW

BROWNFIELDS LAW (October 2002), EPA 500-F-02-

134 (http://www.epa.gov/brownfields/pdf/bflawbrochure.pdf).

* See 42 U.S.C. §9601(39)(B), CERCLA Section 101(39)(B); see

also Update: Federal Legislation at p. xxxv-liii, in BROWNFIELDS:

A COMPREHENSIVE GUIDE TO REDEVELOPING CONTAMINATED

PROPERTY (T. Davis ed. 2002), American Bar Association (ISBN 1-

57073 -961-7).

~ 8

EPA has published guidance making this ineligibility

clear. For example, it has advised grant applicants that:

No part of a grant or loan can be used to pay re- _

sponse costs at a brownfield site for which the

recipient of the grant or loan is potentially liable

under CERCLA §107. This means that applicants

are not eligible for grants or loans at sites for which

they are liable parties under CERCLA. Under

CERCLA § 107, current owners and operators of a

facility, owners and operators of a facility at the

time of disposal of a hazardous substance, parties

that arranged for the treatment or disposal of

hazardous substances, and parties that accepted

hazardous substances for transport to disposal or

treatment facilities are potentially liable for

cleanup or paying the cost of cleaning up a site.

Thus, an owner of contaminated land may be liable

under CERCLA § 107 even though he/she did not

cause or contribute to the contamination at the

site.®

Thus, despite the adoption since the original enactment

of CERCLA of generally beneficial programs that will shield

new investors from liability Gf they agree to a rigorous

property cleanup), there is no relief for the existing land-

owner that voluntarily or involuntarily continues to own

property contaminated by others.

° EPA: PROPOSAL GUIDELINES FOR BROWNFIELDS ASSESSMENT,

REVOLVING LOAN FUND, AND CLEANUP GRANTS

(http://www.epa.gov/oswer/docs/grants/epa-oswer-obcr-07-01.pdf)

(emphasis added).

Il. DENIAL OF A COST RECOVERY RIGHT TO PRPS

THAT VOLUNTARILY INCUR RESPONSE COSTS

WOULD PERPETUATE ENVIRONMENTAL

PROBLEMS AND SERVES NO WORTHY PUBLIC

OR GOVERNMENTAL PURPOSE.

A. Giving the United States and the States the

exclusive power to control and approve the

remediation of hazardous substance contamination

unwisely and unnecessarily increases government

power over a huge amount of troubled real estate

nationwide.

Inherent in the United States’ argument is the sense that

the only good cleanup is a government-supervised one.® If

this position is accepted by this Court, the result will be an

effective power grab utterly unintended by any language of

the law. Because the possibility of enforcement action by

the State or the United States against a contaminated

property always exists, acceptance of the United States’

position would effectively place a sort of tacit lien or

question mark on thousands of acres of polluted real estate

around the United States that could then only be cured by

a governmental agency review and imprimatur. Indeed one

almost gets the sense from the United States that persons

rendered “potentially responsible parties” by the historic

fact of passage of CERCLA are considered to be untrustwor-

thy to undertake honest remediation work.

The United States does not really address the effec‘ of its

position on the private marketplace in its brief. It is

difficult, indeed, to understand why the United States

should care that an independent private right of action

exists. The result of this Court’s adopting the United States’

position respecting the meaning of sections 107 and 113

would generally be to remove from the federal courts the

® See, e.g., negative reference to “unsupervised” cleanup, Br. for

United States at 13.

jurisdiction and authority to hear and determine CERCLA

suits for cost recovery by or contribution among private

PRPs for the polluted condition of a site or facility, except

in those relatively rare cases when that the United States,

a State, an Indian Tribe, or a party not classifiable as a

PRP gets actively involved with a site. Since a category of

such plaintiffs that cannot be deemed PRPs is more to be

wished for than real, only the highest priority sites are

likely to be chosen by government regulators for future

CERCLA remediation and enforcement.

Such a result would not only discourage voluntary

proactive cleanups; it would also mean that many polluters

will not be brought to court and forced to pay for the mess

they have made The result of the United States’ reading

would be that, in general, either a landowner finds it

worthwhile to clean up a site at its own expense or the site

sits in polluted condition, often unused, for years. Some

landowners, would, no doubt, try to interest the EPA in

pursuing PRPs other than themselves, but absent a critical

public health threat at a given site, the likelihood of success

in such an effort is small given the United States’ limited

resources for this program.’

Limiting claims to the circumstances described in Section

113(f), as the United States urges (Br. for United States at

26-32), will undercut CERCLA’s essential purposes. PRPs

would be motivated to wait until they have been sued, or

7 “Superfund faces constraints” is one of several statements that

the EPA has published on its official Web Site concerning the

Superfund program it conducts. “In Fiscal Year 2005, 50 percent

of Superfund obligations for construction and post-construction

activities went to 11 sites.. . . Due to EPA’s priority to fund

ongoing work, less funding was available for new construction

projects, and EPA did not have enough resources to fund 9 new

construction projects evaluated by the National Priority

Panel and that were ready for construction.” URL:

http://www.epa.gov/superfund/action/process/numbers05.htm.

until they are able to negotiate a Section 113(f)(3)(B)

settlement with the government (assuming they will ever be

able to do so), before undertaking cleanup. Most impor-

tantly, 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 no longer

be a CERCLA mechanism to provide cost recovery to

plaintiff PRPs who want to do the right thing and clean up.°

The effect of this disincentive will be profound; of the

hundreds of thousands of sites that are deemed contami-

nated, fewer 1 .n 1,300 are currently on the National

Priorities list, and only around 300 have been addressed

and removed from the list since the enactment of CERCLA

over twenty-five years ago.°

® As stated in the 2002 Senate Report on the so-called

Brownfields amendments to CERCLA:

“The vast majority of contaminated sites across the

Nation will not be cleaned up by the Superfund

program ..... [Wjhile there are an estimated 450,000

brownfield sites, there are fewer than 1,300 NPL sites.”

S. REP. 107-2, S. Rep. No. 2, 107th Cong., 1st Sess. 2001, at 15,

2001 WL 254419.

° USEPA’s Web Site on the National Priorities List declares

“1243 Sites as of March 20, 2007.” FINAL NATIONAL

PRIORITIES List (NPL) SITES—BY STATE (March 2007)

(http://www.epa.gov/superfund/sites/query/queryhtm/nplfin. htm).

According to EPA: “As of December 2005, construction work was

complete at 966 or 62% of Superfund private and federal sites, and

work was underway at an additional 422 sites.” SUPERFUND’S

25TH ANNIVERSARY: CAPTURING THE PAST, CHARTING THE FUTURE

(http://www.epa.gov/superfund/25anniversary/index.htm).

B. Sections 107 and 113 define different causes of

action with differing sets of elements that a success-

ful plaintiff must prove.

“Contribution” and “cost recovery” under CERCLA are in

fact distinct causes of actions with different elements. Both

Section 107 and Section 113 plaintiffs do have to prove the

existence of a “facility” at which “hazardous substances”

were released that create a harm or threat of harm, and

that the defendant is responsible for the release and harm.

The identity of the two causes of action ends there, how-

ever. A Section 107 plaintiff must also allege and prove that

1) it has made an expenditure that is an environmental

response or remedial expenditure, and 2) that the expendi-

ture and the action it paid for were “consistent with” the

National Oil and Hazardous Substances Pollution Contin-

gency Plan, 42 CFR, Subchapter J, Part 300 (known as the

“National Contingency Plan” or “NCP”). But a Section 113

plaintiff need not make or prove any past expenditure

whatsoever, much less any conformity with the NCP.

Instead, it must prove 1) that it is either a qualified plain-

tiff, having either been sued or been the subject of an order,

or that it has settled or otherwise resolved its liability to

the United States or a State per Section 113(f), and 2) that

it has incurred or will thereby incurred an obligation in

excess of its equitable share if defendant is not made to

contribute. Thus the issue of NCP “consistency” does not

arise at all in a Section 113 case. Indeed, since the United

States and the States bear the easier burden of showing

only that their expenditures were “not inconsistent” with

the NCP, it is possibie for a Section 113 plaintiff to estab-

lish a defendant's liability for funds that were not expended

strictly “by the book” in accordance with the NCP.

Given that the entire tort law premise of a contribution

claim is that the party plaintiff seeking contribution has

satisfied an obligation that is jointly an obligation of the

party defendant, Section 107 rights cannot be equated to

“contribution” claims.'° In the present case, the existence of

the Plaintiff's obligation in fact and law to a state or to the

United States is a mere surmise or assumption in the

absence of either a section 107 judgment, a section 106

order, or eligible Section 113 settlement. It is not a judi-

cially or administratively determined fact or legal liability.

Cf. Consolidated Edison Co. of New York v. UGI Utilities,

Inc., 423 F.3d 90, 98 (n.8) (2d Cir. 2005); and also the

Eighth Circuit in its opinion in this case (Atlantic Research

Corp. v. United States, 459 F.3d 827, 831 (8th Cir. 2006),

cert. granted, 127 S.Ct. 1144 (2007)).

C. Any suggestion that voluntary cleanups are

somehow “unsupervised” and therefore less worthy

or suspect is contrary to actual practice.

One might infer from the United States’ Opening Brief

that privately conducted remedial actions may generally be

of poorer quality than those conducted under United States

or state supervision. This notion smacks of arrogance and

does not recognize what is required of a plaintiff to succeed

in proving that its actions have been “consistent with the

National Contingency Plan” under CERCLA Section 107(a)

and 42 CFR § 300.700(c)\(3). In actual practice, the require-

ment of consistency with the NCP mandates a sophisticated

process that involves employment of well-qualified engi-

neers, provision of both notice and opportunity for comment

and, quite commonly, state agency review.

The NCP is no shrinking violet of a regulation. It fills 276

pages of the Code of Federal Regulations."' Its robust and

10 See RESTATEMENT (SECOND) OF TORTS, Section 886(A); accord

Metropolitan Water Reclamation District v. North American

Galvanizing & Coatings, 473 F3d 824, 836 n. 17 (7th Cir. 2007).

“The complete NCP text is available at:

(continued...)

serious nature is obvious from both its length and its

detailed requirements respecting the process of carrying out

a remedial action. The process a person seeking cost

recovery must follow includes, e.g., providing notice and the

opportunity for comment at all critical stages of work, see 42

CFR § 300.700(c)(6), a remedial investigation that meets

minimum standards and a feasibility study that compares

various remedial options, see 42 CFR §§ 300.430 and

300.700(c)(4), compliance with all “applicable or relevant

and appropriate regulations” (so-called “ARARs’), see, e.g.,

42 CFR § 300.430(e)(9)(iii)(B),"* and the presentation of

result data that satisfies extensive standards, see 42 CFR

§ 300.915.

As a practical matter, a great many private clean-ups are

now being conducted under so-called “voluntary

remediation” programs run by the States. These programs

incorporate the key scientific and engineering elements of

the NCP. This process of state review began under some

state laws well over two decades ago, but its importance

and use was increased by the amendments to CERCLA in

2002, which provided a degree of protection from enforce-

ment to parties and sites that are enrolled in the state

programs. Together with the adoption of risk-based assess-

ment of alternatives and remediation goals, these programs

offer promise of practical and relatively cost-effective

cleanup approaches for landowners addressing their self-

made problems and for “Brownfield” developers.”

(...continued)

http://www.epa.gov/oilspill/pdfs/40cfr300.pdf.

"See USEPA public explanation of ARARS at

http://www.epa.gov/superfund/action/guidance/remedy/arars.htm.

“ARARs are identified on a ite-by-site basis for all on-site

response actions where CERCLA authority is the basis for

cleanup.”

'® A full explication of the NCP process and the State Voluntary

(continued...)

The state programs are available irrespective of whether

“cost recovery” is going to be sought, and they do not

themselves provide for “cost recovery.” However, they are

an excellent practical means of helping a Section 107

Plaintiff assure itself and the Court that its approach to a

site is “consistent with the NCP,” because they generally

contain the needed elements of the NCP analysis and

provide means of ratification of otherwise private engineer-

ing effort.

D. It would be folly to suppose that many prospec-

tive “innocent” Section 107 plaintiffs exist that will

expend a lot of money on cleanups without a vested

interest in a given property, such as the interests

possessed by an owner.

The average CERCLA site cleanup cost as reported by

GAO exceeded $26 million a decade ago."* This amount,

which likely understates current costs, is hardly going to be

collected by a typical local civic group. While there may be

a community-minded organization or an environmentally

conscious group here and there that has the willingness and

capability to fund a given cleanup costing hundreds of

thousands, if not millions, of dollars, such groups are pretty

scarce. But the party with the most obvious vested interest

in a property is the owner. In practice, landowners that

have been involved in CERCLA actions brought by the

government are generally not allocated more than a minor

(...continued)

Cleanup pros rams would take too much text and time away from

the issues before the Court. However, an excellent and pretty

comprehensive study of the state programs is published in

BROWNFIELDS: A COMPREHENSIVE GUIDE TO REDEVELOPING

CONTAMINATED PROPERTY (T. Davis ed. 2002), American Bar

Association (ISBN 1-57073-961-7).

1 GAO REPORT, SUPERFUND: BARRIERS TO BROWNFIELD REDEVEL-

OPMENT, GAO/RCED-96-125, at p. 3.

percentage of responsibility compared to active polluters.

And, although there is no hard and fast rule, anecdotal

experience with CERCLA cases over the last three or so

decades suggests that, as a rule, landowners that are

passive and do not reap significant economic benefits from

the polluting activity are generally allocated a minority

share of the cost of cleanup.” This is true for a number of

reasons, but the basic reason is that it is an equitable

result. As the Seventh Circuit has observed, “polluters differ

in the blameworthiness of the decisions or omissions that

led to the pollution, and blameworthiness is relevant to an

equitable allocation of joint costs.” Browning Ferris Ind. of

Ill., Inc. v. Ter Maat, 195 F.3rd 953, 959 (7th Cir.1999), cert.

denied, 529 U.S. 1098 (2000).

By contrast, where owners are significant actors and

causes of the problem, they will get hit with as much as the

entire allocation. In any event, the inherent equitable power

of the trial court to fashion an equitable remedy and the

ability of a defendant to counterclaim under Section 113 are

fully adequate protection against unfair results from

Section 107 cases. x“

E. The United States’ contention that settlement

will be discouraged and enforcement impaired by the

existence of a cost recovery right for PRPS that

volunteer is unrealistic.

The United States’ position in its opening brief is that

allowing PRPs a cost recovery right under section 107 would

undermine or even “emasculate” the effectiveness of

sections 113(f)(1) and 113(f)(3)(b). See Br. for United States

at 30-3land 39-41. MWRD submits that these claims lack

real world substance. Section 113(f)(3)(b) allows those who

Sherwin-Williams Co., 151 F.3d 610, 616 (7th Cir. 1998), United

States v. R.W. Meyer, Inc., 932 F.2d 5€., 571-72 (6th Cir-1991),

and Bedford Affiliates v. Sills, 156 F.3d 416 (2d Cir. 1998).

settle with the Government to sue non-settlers. It seems

elementary that nothing in this subsection would prohibit

a suit by a settler against a volunteer PRP who remediates

a site. Certainly that volunteer might answer with a

counterclaim, but in the end, nothing inherent in the fact

that a volunteer is a volunteer would prevent a fair alloca-

tion of responsibilities and costs. And Section 113(f)(1)

allows PRP contribution suits “during or after” a section 106

or 107 action. Again, how does a volunteer’s cleanup activity

interfere with a PRP’s right to sue?

Moreover, section-113(f)(2) provides that:

A person who has resolved its liability to une United

States or a State in an administrative or judicially

approved settlement shall not be liable for claims

for contribution regarding matters addressed in the

settlement. Such settlement does not discharge any

of the other potentially liable persons unless its

terms so provide. . .

This provision does not appear seriously to limit the

United States and settling parties in determining what

“matters” are “addressed” in a settlement agreement.

Surely the United States is not suggesting that a court

could be required to make a settling party pay more than

what is fair if a volunteer PRP cleans up the site and sues

that party. Indeed, District Courts have found it fair and

appropriate to bar suits by non-settlers under such circum-

stances, recognizing the effect of the settlement. See, e.g.,

United States v. SCA Services of Indiana, Inc., 827 F.Supp. ~

526 (N.D. Ind.1993). In any event, that is not the case

before the Court.

If a PRP voluntarily expends funds for remedial action in

a manner consistent with the NCP, that can only preserve

the limited monies in the Superfund and elsewhere that

might be used for another site. If that PRP in turn sues

other PRPs for recovery of costs, those PRPs are hurt only

if the courts refuse to take into consideration whatever

cooperation with or payments they may have already made

in dealing with the United States. The latter notion as-

sumes that courts will not see themselves as having

equitable or common law power to be fair and give credit

where credit is due. But that outcome is most unlikely given

the courts’ acknowledged powers to attend to the details of

CERCLA liability in accordance with “traditional and

evolving principles of common law.” 126 CONG. REC. 31,965

(1980) (statement of Rep. Florio); see also, United States v.

USX Corp., 68 F.3d 811, 824 (3d Cir. 1995).’* But having

common law principles govern the size of a cost recovery

award is virtually meaningless if cost recovery rights are

limited to only innocent parties in the first place. Indeed,

since the United States’ or State’s response need only be

proven “not inconsistent” with the NCP, while a private

response must be proven “consistent” with the NCP, one has

to wonder under what scenario the NCP, much less a court

considering it under CERCLA, would allow some sort of

double recovery. No situation comes to mind where this is

likely.

The United States can bring overwhelming power to bear

on private parties that it considers liable for CERCLA sites.

It may order parties to do work at these sites under Section

106, and it may recover treble damage civil penalties for

unreasonable refusals. And no rational party is going to

dishonor a Section 106 order without being very confident

it is an unlawful one; as the Seventh Circuit has observed,

“[a] party served with a unilateral order under section 106

has little or no choice but to comply.” Akzo Coatings Inc. v.

one chamber of Congress. In the Senate, the Hon. Jenaings

Randolph indicated plainly: “It is intended that issues of liability

not resolved by this act, if any, shall be governed by traditional

and evolving principles of common law.” 126 Cong. Rec. 30,932

(1980).

Aigner Corp., 30 F.3d 761, 769 (7th Cir. 1994). Thus the

situation hardly is one of weakness or lack of ability to work

the sovereign’s will. If a PRP acts as a renegade, could it

not be ordered to desist from work in the right situation

(assuming it even has a right to enter the site and do the

remedy)? Could the United States not sue it along with

other PRPs and force a hashing out of fair shares? The

United States can do all these things and more. The United

States may also sue parties under section 107, not only for

future work but for past costs it has properly expended.

The United States’ assertion that ability to achieve

settlement will be undermined is fanciful. See, e.g., Br. for

United States at 37-38. Section 113(f)(2) is not at all limited

by its terms to the settlement of claims made under section

113. The scope of “matters covered” by a settlement under

section 113 can include any renegade PRP, and it is unclear

wiry the United States would not simply sue as a PRP every

PRP it considers significantly responsible in the first place.

For that matter, if the Court were to uphold a volunteer

plaintiff's right of cost recovery under section 107 and also

indicate that such a right of cost recovery is enforceable in

practice in the manner of a “contribution” right or only to

the extent of a defendant’s just share, the “problem” the

United States asserts would entirely disappear even as a

abstract proposition, because all that any voluntary PRP

plaintiff seeking cost recovery could ever expect to recover-

would be expenditures in excess of those reflecting its own

fair share of the problem.

Additionally unconvincing is the United States’ sugges-

tion that allowing cost recovery actions under Section 107

would somehow “undermine” enforcement of Section 113.

Br. for United States at 30. Indeed, the sections’ respective

limitations periods are triggered by different events,

making the Congressionally-prescribed set of remedies and

their limitations periods somewhat less seamless than the

United States suggests. For contribution claims filed under

Section 113, the three-year limitation period set forth in

Section 133(f) runs from a date certain, i.e., either the date

of the filing of initial suit against the PRP or the settlement

date. But an action for removal cost recovery under Section

107 must, under Section 113(g)(2), be filed within three

years of the completion of the removal action, and for

remediation must be filed within six years of the initiation

of a remedial action. But nothing about these differing

limitations schemes, set forth within the same statutory

section (Section 113), supports a restrictive reading of who

may pursue one of the remedies so limited.

If Congress prescribed different elements for the two

causes of action (contribution and cost recovery), why could

it not prescribe different limitations periods for the two as

well? Indeed, it is not hard to imagine why Congress would

be more “generous” in prescribing limitations periods

applicable to potential volunteer PRPs facing alone the

difficult burdens of maintaining “consistency with the NCP”

without the enforcement powers and expertise of the United

States or a State (and, for many landowners including those

like MWRD that are taxpayer-funded, without the ready

resources as well).

Ill. THE SEVENTH CIRCUIT RECENTLY RULED

IN A CORRECT AND CONVINCING MANNER

ON THE QUESTION BEFORE THIS COURT

The United States attacks the Seventh Circuit’s recent

reading of Section 107(a) in the case it decided wherein

Amicus is the plaintiff. See Br. for United States at 19,

citing Metropolitan Water Reclamation Dist. v. North Am.

Galvanizing & Coatings, Inc., 433 F.3d 824 (7th Cir. 2007).

Given this direct attack on MWRD’s very own case, your

Amicus will respectfully address a few of the points made by

the Seventh Circuit in properly rejecting the position

advanced in that court by the United States as amicus

curiae.

A. The United States’ reading of the statute is

ungrammatical and does violence to Section

107(a)(1)-(4).

The United States concedes, as it must, that Section

107(a)(1)-(4)(B) provides a cause of action for cost recovery

to “any other person” that incurs costs in responding. With

this concession (which is plainly correct on the law) the

issue of whether the right of cost recovery is “express” or

“implied” becomes a proverbial “red herring.” Were there

not such a cause of action for “any other person,” in clause

B of Section 107(a)(1)-(4), there would be no grammatical

sense in permitting the United States itself to bring cost

recovery actions under clause (A) of the very same section

of the statute.

The United States’ suggested limitation on subsection

107(a)-(4)(B) plaintiffs stems from a reading that is not

grammatical. The phrase “by any other person” is a preposi-

tional phrase that is answering the question “who?”, and it

functions as a modified noun that identifies and distin-

guishes a class of plaintiffs in subsection (B) from a previ-

ous plaintiff class expressly denominated in the immedi-

ately antecedent subsection (A).'’ The result urged by the

United States is a reading that would improperly amend

the law through the use of bad grammar.

? See, e.g., M. LESTER & L. BEASON, THE MCGRAW-HILL HAND-

BOOK OF ENGLISH GRAMMAR AND USAGE (2005) (ISBN 0-07-

144133-6) Chapter 2, at 23-24 and 37-38.

—

B. Section 107 expressly allows “cost recovery” to

be sought by “any other person,” without limiting to

non-PRPs the class of plaintiffs that fall within that

broadest of phrases. No judicial deference to the

United States’ limited reading of “any” is required or

appropriate.

The basis of the Court’s decision in Cooper Industries, Inc.

v. Aviall Services Inc., 543 U.S. 157, 166 (2004), was the

straightforward “natural meaning” of the statute itself.

Reading subsection 107(a)(1)-(4)(B) in the identical spirit

demonstrates that the phrase “any other person” identifies

a class of persons who may seek cost recovery under a

distinct and more difficult standard of proof than the

“persons” identified in the preceding subsection 107(a)(1)-

(4)(A). The meaning of subsection (B) is thus plain: “any

other person” than a just-specified subsection (A) plaintiff

has the right of action and bears the burden of proof set

forth in subsection (B). Any other meaning would be

unnatural.

There are no fancy terms of art or environmental science

involved in construing subsection 107(a)(1)-(4)(B). No

agency rule or policy statement is involved. In fact, the

issue has not been left to agency discretion 1n any manner.

Deference to a government agency’s interpretation of

federal court jurisdiction is thus not appropriate in these ~

circumstances. See United States v. Mead Corp., 533 U.S.

218, 233-34 (2001).

C. Congress intended to encourage those involved

with polluted sites to clean them up themselves

rather than await government enforcement action.

CERCLA was meant to encourage “persons” involved with

polluted sites to clean them up without invariably waiting

for the Government to undertake a cleanup itself, issue a

cleanup order or file a lawsuit. The availability of a mght to

contribution was viewed as a major incentive to liable

parties to undertake early cleanup action, with an under-

standing that a fair share of the response costs they

incurred could be recovered from other responsible parties.

See, e.g., H.R. REP. NO. 96-1016(1), at 17 (1980), 1980

U.S.C.C.A.N. 6119, 6120, 1980 WL 12937. (“The legislation

would also establish a federal cause of action. . . to induce

such persons voluntarily to pursue appropriate environmen-

tal response actions with respect to inactive hazardous

waste sites”); 126 CONG. REC. 26,338 (1980) (remarks of

Rep. Florio; CERCLA’s liability scheme “creates a strong

incentive both for preventicn of releases and voluntary

cleanup of releases by responsible parties”); cf. Key Tronic

Corp. v. United States, 511 U.S. 809, 819 n.13 (1994) (“We

recognize that CERCLA is designed to encourage private

parties to assume the financial responsibility of cleanup by

allowing them to seek recovery from others,” quoting FMC

Corp. v. Aero Industries, Inc., 998 F.2d 842, 847 (10th Cir.

1993)).

The Seventh Circuit, in the case in which your Amicus

was the appellee, correctly perceived that Congress’ desire

to encourage voluntary cleanup actions would be equally

well served by holding that cost recovery rights are avail-

able to PRPs. After adopting the plain reading of Section

107 urged by MWRD, the court added:

In addition, we are concerned that prohibiting suit

by a voluntary plaintiff like [MWRD] may under-

mine CERCLA’s twin aims of encouraging expedi-

tious, voluntary environmental cleanups while

holding responsible parties accountable for the

response costs that their past activities induced. As

Consolidated Edison, Atlantic Research and several

post-Cooper Industries district court decisions have

recognized, in order to further CERCLA’s policies,

potentially responsible parties must be allowed to

recover response costs even before they have been

sued themselves under CERCLA or have settled

their CERCLA liability with a government entity.

Were a cost recovery 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 exclusively responsible because of their inabil-

ity to be reimbursed for cleanup expenditures in the

absence of a suit.” Consol. Edison, 423 F.3d at 100.

As the [Second Circuit] concluded, this result

- “would undercut one of CERCLA’s main goals,

‘encourag[ing] private parties to assume the finan-

cial responsibility of cleanup costs by allowing them

to seek recovery from others.” Id. (quoting Key

Tronic, 511 U.S. at 819 n.13 (internal quotation

marks omitted)).

433 F.3d at 836.

The Seventh Circuit thus correctly rejected the forced

reading of Section 107 advanced by the United States as

inconsistent both with CERCLA’s plain language and its

animating legislative policies. The knowledge that such

rights are available will, as in the case of MWRD, play a

crucial role for any PRP, but especially for the many

governmental entities that, like MWRD, own land used by

others and depend on taxpayers to finance their operations

and activities. Effectuation of both CERCLA’s letter and

spirit thus require that the decision below be affirmed.

CONCLUSION

Your Amicus respectfully submits that the statute speaks

for itself on the legal question before the Court. Also, not

only would the remedial and “polluter pays” principles of

CERCLA be weakened considerably by adopting the United

States’ view of the law, but the resulting policy would be

bad for the economy and the environment. The Court should

affirm.

Respectfully submitted,

METROPOLITAN WATER RECLAMATION DISTRICT

OF GREATER CHICAGO