Petition for Writ of Certiorari — Thomas v. United States

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Supreme Court, U.S

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O27 2795 nov 10 1997

OFFICE OF THE CLERK

In The

Supreme Court of the United States

October Term, 1997

ae senniat

THE PINAL CREEK GROUP, consisting of

CYPRUS MIAMI MINING CORPORATION,

INSPIRATION CONSOLIDATED COPPER COMPANY,

and BHP COPPER INC.,

Petitioners,

NEWMONT MINING CORPORATION, OCCIDENTAL

PETROLEUM CORPORATION, CANADIANOXY

OFFSHORE PRODUCTION COMPANY, and

ATLANTIC RICHFIELD COMTI... JY,

Respondents.

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

PETITION FOR A WRIT OF CERTIORARI

NicHotas J. WALLWoRK*

Frepric D. BELLAMY

MucHMore & WA LLwork, P.C.

2700 North Central Avenue,

Suite 1225

Phoenix, Arizona 85004

Telephone (602) 240-6699

*Counsel of Record for Petitioners

QUESTION PRESENTED

Section 107(a) of the Comprehensive Environmental

Response, ‘Compensation, and Liability Act of 1980

(CERCLA) creates a cost recovery remedy under which

the government and “any other person” who incurs qual-

ified environmental cleanup costs may recover those

costs from any party liable under the Act. The question

presented is:

Whether CERCLA § 107(a)’s private cost recovery

remedy is available to:

(1) Only persons who incur the cost of conducting a

qualified environmental cleanup, but are neither liable

nor potentially liable under the Act's strict liability stan-

dard,

(2) Only persons who, though liable or potentially

liable under the Act's strict liability standard, are them-

selves “blameless” of actual fault, or

(3) Any persons who incur the cost of conducting a

qualified environmental cleanup, even if they themselves

are liable or potentially liable under the Act?

LIST OF PARTIES

The Petitioners, Plaintiffs-Appellees below, are

Cyprus Miami Mining Corporation, BHP Copper Inc.,

and Inspiration Consolidated Copper Company. These

companies formed the Pinal Creek Group, an unincorpo-

rated association, to coordinate their efforts in conducting

an environmental cleanup in the drainage basin of the

Pinal Creek, located in an historic mining district near

Globe, Arizona.

The parent, subsidiary and affiliated entities of the

Petitioners (not including wholly owned subsidiaries) are

as follows:

(1) Cyprus Miami Mining Corporation is an indirect

subsidiary of Cyprus Amax Minerals Company. An affili-

ate or subsidiary of Cyprus Amax Minerals Company is

Amax Gold, Inc.

(2) BHP Copper Inc., formerly known as Magma

Copper Company, is a subsidiary of The Broken Hill

Proprietary Company, Ltd.

(3) Inspiration Consolidated Copper Company is

affiliated with Terra Industries, Inc.

The Respondents, Defendants-Appellants below, are

Newmont Mining Corporation, Occidental Petroleum

Corporation, CanadianOxy Offshore Production Com-

pany, and Atlantic Richfield Company (ARCO).

iil

TABLE OF CONTENTS

Page

Question Presented ..........- 0 sere eee eee renee i

ee cow bee dk hea hee eae ewes es ii

ee Ny Coa ene tev ee saanans Vv

Opinions Below ..........-0+2sseeee ee eeee teers ees 1

Jurisdictional Statement..........-- 2-60 ee eee e eee 2

nme SEDI EL POC Te ee EEE ELE 3

ee CO Wie © BOS) iiss cae secre beste eer sesess 3

Reasons for Granting Writ...........5--+eee eee eee 7

A. The Court Should Issue Certiorari to Resolve

Conflicts of Authority Regarding the Availability

of CERCLA § 107(a)’s Cost Recovery Remedy for

Potentially Liable Parties Who Conduct Environ-

mental Cleanups .........---+ see eeeeeeeeeeeees 10

1. Conflicts Exist Regarding the Fundamental

Nature of CERCLA § 107(a) and § 113(f)

Among the Circuits That Limit the Availabil-

ity of CERCLA § 107’s Private Cost Recovery

Remedy ........ccccccere cn rececensencccces 13

a) A Conflict Exists Between the Dichot-

omous Construction of CERCLA

§ 107(a) and § 113(f) Adopted by Some

Circuits and the Overlapping Con-

struction Adopted by Other Circuits 14

b) The Seventh Circuit's Fault-Based

Construction of CERCLA § 107(a)’s

Private Cost Recovery Remedy Con-

flicts with Other Circuits’ Construc-

tions That Disregard Fault........... 18

TABLE OF CONTENTS - Continued

Page

The Foregoing Conflicts Do Not Exist Among

the Courts that Adhere to the Plain Language

Construction of CERCLA § 107({a) That

Allows “Any Person” Who Conducts a

Cleanup to Use the Section’s Cost Recovery

PEST ee Perey Cre eee ee ere

B. The Court Should Grant this Petition to Resolve

the Conflicts of Authority Because the Existing

Legal Uncertainty Frustrates the Congressional

Purposes Gehind The Act... 66 os divas esaws

a ne a a Ae ay an ae

APPENDICES

A - Opinion of the Court of Appeals.......... App.

B - Opinion of the District Court ............. App.

C — Order of the Court of Appeais Denying Peti-

tion for Rehearing and Suggestion for

Resear. EG FON iiss is iss es cha eV ies App.

D - Pertinent Statutory Provisions............. App.

TABLE OF AUTHORITIES

Page

CASES

Adhesives Research Inc. v. American Inks & Coatings

Corp., 931 F. Supp. 1231 (M.D. Pa. 1996) ....--: 23, 24

AM Int'l, Inc. v. Datacard Corp., 106 F.3d 1342 (7th

or ig ROE Teoh eA det coe ten 20

Amcast Indus. Corp. 0. Detrex Corp., 2 F.3d 746 (7th

Cir. 1993), cert. denied, 510 U.S. 1044 (1994) ....18, 19

Barmet Aluminum Corp. 0. Brantley & Sons, Inc., 914

F. Supp. 159 (WD. Ky. 1995)... 20 ses ceescnar asses’ 25

Bates v. United States, No. 96-7185, 1997 U.S. LEXIS

E9OE (Noy. €, I9F7) sae sane enee saree: 22

Beazer East, Inc. v. United States Navy, No. 96-1736,

1997 U.S. App. LEXIS 6746 (4th Cir. Apr. 11,

Bennett v. Spear, 117 S. Ct. 1154 (1997) .....ce eens 23

Bethlehem Iron Works, Inc. v. Lewis Indus., Inc., 891

F. Supp. 221 (E.D. Pa. 9005). 65 iscvaereess Coretta 8

Cadillac Fairview/Cal., Inc. Vv Dow Chem. Co., 840

F.2d 691 (9th Cir. | ORR EE SS kg i 3

Charter Township of Oshtemo v. American Cyanamid

Co., 910 F. Supp. 332 (W.D. Mich. 1995)....--+++>> 26

Chesapeake and Potomac Tel. Co. v. Peck Iron & Metal

Co., 814 F. Supp. 1269 (E.D. Va. 1992)....---eeeee 24

Crofton Ventures Ltd. Partnership v. G & H Partner-

ship, No. MJG-96-1378, 1997 U.S. Dist. LEXIS

R067 (D. Md. Jan. Sl, TIR7) + <cence creer tereseee® 8, 24

Idylwoods Assocs. 0. Mader Capital, Inc., 915 F.

Supp. 1290 (W.D.N.Y. 1996) ..20s<cccrenctenerrenes 26

TABLE OF AUTHORITIES ~ Continued

Page

In re Hemingway Transp., Inc., 993 F.2d 915 (1st Cir.

SPO vy i.6's'nd bec Cake had CARAS Wee LNAAS OTe eee 10

In re Reading Co., 115 F.3d 1111 (3d Cir. 1997)....... 17

Kelly v. Thomas Solvent Co., 790 F. Supp. 710 (W.D.

DOL, SPP 65h cee CLE aha ees pe eden ee eae wits 25

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

¢\ 4 0 | Re rarer inn tier Se seem gry ce To Rie 1D) 26

Mead Corp. v. United States, No. C-2-92-326, 1994

U.S. Dist. LEXIS 14261 (S.D. Onio 1994). ........:: 25

National R.R. Corp v. BP] Int'l, No. 95-5674 (9th Cir.

Us Fey 9, THT HMMA: co cs cared eehiedeeeeeeosens 6

New York v. Shore Realty Corp., 759 F.2d 1032 (2d

Cae. TOBS) o svcvs ecw even ee tea coun eaeneeee te CIsaGMn 26

Nurad Inc. v. William E. Hooper and Sons Co., 966

Pieme OSF CG Cle. 2982) ec isan deans reba Jane 25

OHM Remediation Serv. v. Evans Cooperage Co., Inc.,

$06 FS 2574 (Sth Cis. WPF bes icc ches neaseweewass 14

Pinal Creek Group v. Newmont Mining Corp., 118

Roe. toe CO Cie. 1907 hs voc ia ca ceatee eerie ness 6, 15

Pinal Creek Group v. Newmont Mining Corp., 926 F.

ne. 1690 UL). Arid. WG). cbs css nesses dies passim

Pneumo Abex Corp. v. Bessemer & Lake Erie R.R. Co.,

921 FP. SUDO. JIG (Ea). VAL TPPOE voc kek veer sakeeas 24

Price v. United States Navy, 39 F.3d 1011 (9th Cir.

RPPG) ck oe vbe ean ke PUR e Wek eRe RARE eRe e Le eee 1]

Reichhold Chem. Inc. v. Textron, Inc., 888 F. Supp.

ESIG. GND. Fin. YOR} oaks eves vawnleeausd feawhens 18

Vii

TABLE OF AUTHORITIES - Continued

Page

Richland-Lexington Airport Dist. v. Atlas Props., Inc.,

901 F.2d 1206 (4th Cir. 1990). ......-- 0c eee cece eee 25

Rumpke of Ind., Inc. v. Cummins Engine Co., 107 F.3d

1235 (7th Cir. 1997).......-.cceeeeeecceenes 18, 19, 27

Russello v. United States, 464 U.S. 16 (1983)........-.. 22

Sun Co. v. Browning-Ferris, Inc., 124 F.3d 1187 (10th

rc RS TERS rere gree 16, 17, 20

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

i Ermey yin? Port rey 24, 25

United Techs. Corp. v. Browning-Ferris Indus., Inc.,

33 F.3d 96 (1st Cir. 1994), cert. denied, 513 U.S.

S508 (ASO cic havea erence ee vena s 10, 11, 15, 16

Velsicol Chem. Corp. v. Enenco, Inc., 9 F.3d 524 (6th

Che SOUS) noc cxedbwnan de vg eee etonee aes sates. 25, 26

STATUTES

2B US.C. § 12541) (1994)... 6... cc ebecceeecccenecenes 3

28 U.S.C. § 1292(b) (1994) ..... eee eee cere ee eens: ‘oe

28 U.S.C. § 1331 (1994) ....... cece cece reer eee eeeees 3

28 U.S.C. § 2201 (1994) ....... cece cece eee e eee eeeeees 3

28 U.S.C. § 1292(b) (1994) ......- eee rece ee eeees i, 3,6

42 U.S.C. § 9606(b)(2)(C) (1994) ......-.-.-----3, UL, 22

42 U.S.C. § 9607(a)(1-4)(A) and (B) (1994)....3, 11, 21, 22

42 U.S.C. § 9613(b) (1994) ...... cece eee ee eee eens 3

42 U.S.C. § 9613(f)(2) (1994) 0... cece eee eee eee ee Sd, 12

42 USC. 6 GIMME) TID 66si oc 3

Vili

TABLE OF AUTHORITIES — Continued

Page

G2 USA... SB DIONE) CAG PR hs vis cee kceneeewenake 16, 18

GE TK aces CEPR bhv obo Re eee es eee 16

LEGISLATIVE History

Superfund Reauthorization: Judicial and Legal Issues:

Oversight Hearings Before the Subcomm. on Admin.

Law and Gov't Relations of the Comm. on the Judi-

ciary, 99th Cong., 14 (1985) (statement of Mr.

Lee Thomas, Administrator of EPA)............... 29

Fi. Hep. ING. Fredas, OF. F (LPOG ices cals cnke cases 28

131 Conc. Rec. $51 (daily ed. Sept. 18, 1985) (stute-

NT OR TO TIN eo 655 6h bk ER ees 27

Court RUuLEs

ee te RE | Pa” 8 Ge an ere errr ne Guay Se 2

a ky SR rere, re eg eee ere ret s- 2

a ON oer rrr tee yee er ory pe ene 2

PO. ee Gee Re Pee Kh aN ba eared een Rawk Hen 3

OTHER AUTHORITIES

Ann Alexander, Standing Under Superfund §§ 107

and 113: Avoiding the Error of the Blind Men and

the Elephant, Toxics L. Rptr. (BNA) 155 (July 12,

|) Ee ee APP Re Ry Eanes r tiny pare oma 8

Daniel R. Avery, Statutory Right or Statutory Prohi-

bition? Reconciling CERCLA’s Contribution Protec-

tion with the Private Response Cost Recovery

Action, %2 Ve. Gavi. LJ. FEF COGS) 0 vc icecenvevins 9

TABLE OF AUTHORITIES - Continued

Daniel D. Barnhizer, Recent Development, Joint and

Several Liability and Contribution Under CERCLA

Sections 107(a)(4)(B) and 113(f), 18 Harv. Envtl.

lL Rev. 563 (1994) ..ccccccsercncserccuveceres

Ivy Barton-Wagner, Comment, Setting CERCLA

Straight: A Solution to the Dispute over Actions by

Liable Remediators Under 107 and 113, 14 Temp.

Envtl. L. & Tech. J. 207 (1995) .....--- eee eeees

Richard Buckley, Jr., Comment, Making a Case for

Statutory Amendment to the Comprehensive Envi-

ronmental Response, Compensation, and Liability

Act (CERCLA): Solving the Section 107/Section

113 Cause of Action Controversy, 31 Tulsa L.]. 851

ODE) asic Wb ie ct Sis 5d Neen ne Feeney ee Er

Steven DeGeorge, Seventh Circuit Decisions Further

Confuse the Availability and Significance of

CERCLA § 107 Standing 9 Envtl. Litig. Comm.

Newsl. (A.B.A. Sec. Litig., Chicago, Ill.) No. 1

td RC ESET OU Eee ert e hes b et

Stephen Ferry, Allocation and Uncertainty in the Age

of Superfund: A Critique of the Redistribution of

CERCLA Liability, 3 N.Y.U. Envtl. L. J. 36 (1994)

Michael V. Hernandez, Cost Recovery or Contribu-

tion: Resolving the Controversy Over CERCLA

Claims Brought by Potentially Responsible Parties,

21 Harv. Envtl. L. Rev. 83 (1997).......-++++5:

Mark A. Stach, Only “Innocent” Parties Need Apply:

The Death of Private Cost Recovery Actions Under

Superfund?, 20 Wm. & Mary Envtl. L. & Pol’y

Rev. 33 (1995) ..... ccc cece eee cence rr eceeseeees

U.S. General Accounting Office, Superfund — EPA

Has Opportunities to Increase Recoveries of Costs,

GAO/RCED-94-196 (Sept. 1994)...----+ssse55:

Page

PETITION FOR WRIT OF CERTIORARI

The Petitioners, the members of the Pinal Creek

Group, consisting of Cyprus Miami Mining Corporation,

Inspiration Consolidated Copper Company, and BHP

Copper Inc., respectfully pray that a writ of certiorari

issue to review the judgment of the United States Court

of Appeals for the Ninth Circuit, entered in the above-

entitled proceeding on July 2, 1997.

OPINIONS BELOW

The opinion of the United States District Court for

the District of Arizona is reported at 926 F. Supp. 1400

(1996) and is reproduced as Appendix B, from pages App.

22-59. The opinion and order denied Respondents’

motion to dismiss Petitioners’ CERCLA § 107(a) cost

recovery claims. Respondents’ motion urged that Peti-

tioners, as potentially liable parties, could not assert cost

recovery claims under § 107(a). The district court certified

its order for an interlocutory appeal pursuant to 28 U.S.C.

§ 1292(b) (1994).

The opinion of the United States Court of Appeals for

the Ninth Circuit is reported at 118 F.3d 1298 (1997) and is

reproduced as Appendix A, from pages App. 1-21. The

court of appeals granted the petition for interlocutory

appeal, reversed the district court's order, and remanded

with instructions to grant Respondents’ motion to dis-

miss. 118 F.2d at 1306.

The Ninth Circuit held that Petitioners’ CERCLA cost

recovery claims must be dismissed because “[t]he text of

§ 107 leads to the conclusion that only a claim for contri-

bution lies between [potentially liable parties].” Id. at

1301. Stating that “§ 113 should be applied to claims

brought by a [potentially liable party], whenever possi-

ble,” the court held that “while § 107 created the right of

contribution, the ‘machinery’ of § 113 governs and regu-

lates such actions.” Id.

The court explained that § 113 thus “provid[es] the

details and explicit recognition that were missing from

the text of § 107.” Id. In reaching its decision to reverse,

the court concluded that Petitioners created their own

contribution liability against themselves by conducting

an environmental cleanup:

Although it is true that [potentially responsible

party (PRP)] status, by itself, does not generate

liability, the Pinal Group ignores the “necessary

costs of response incurred by [it] consistent with

the national contingency plan.” Prior to its

expenditure, the Pinal Group was not yet liable

because no one, not the government, not any

other PRPs or any non-PRP private parties had

yet incurred any costs under § 107. However,

once the Pinal Group undertook those “neces-

sary costs of response,” it, along with all PRPs

associated with the Pinal Creek site, became

partly responsible for those costs.

Id. at 1305-06 (citations omitted).

JURISDICTIONAL STATEMENT

The judgment of the United States Court of Appeals

for the Ninth Circuit was entered on July 2, 1997. On July

15, 1997, Petitioners filed a timely petition for rehearing

and suggestion for rehearing en banc, which the court of

appeals denied on August 11, 1997. See Appendix C, p.

App. 60. Ninety days after that date is November 9, 1997,

which fell on a Sunday. Petitioners have filed this petition

on the following Monday, November 10, 1997. Therefore,

this petition is timely. See Sup. Ct. R. 13.1, 13.3 and 30.1.

This Court's jurisdiction is invoked pursuant to 28

U.S.C. § 1254(/) (1994). The United States Court of

Appeals for the Ninth Circuit had jurisdiction pursuant

to the procedures for a discretionary certified interlocu-

tory appeal set forth at 28 U.S.C. § 1292(b) (1994). The

United States District Court for the District of Arizona

has jurisdiction over this matter pursuant to 28 U.S.C.

§ 1331, 28 U.S.C. § 2201, and 42 U.S.C. § 9613(b) (1994).

STATUTES INVOLVED

The statutory provisions involved in this case are: 42

U.S.C. § 9607(a), 42 U.S.C. § 9613(f), 42 U.S.C. § 9613(g), and

42 US.C. § 9606 (1994). The pertinent text of these provisions

is set out as Appendix D, from pages App. 61-80.

STATEMENT OF THE CASE

For many years, Petitioners have been conducting an

extensive and complicated environmental cleanup of

groundwater contaminated by a century of mineral pro-

cessing in one of the Nation’s largest and most histeric

mining districts, near Globe, Arizona.! In 1990,

1 The United States District Court for the District of

Arizona, the court of first instance, has jurisdiction over this

action pursuant to 28 US.C. § 1331, 28 U.S.C. § 2201, and 42

U.S.C. § 9613(b) (1994). Petitioners alleged the facts pertinent to

this petition in the Second Amended Complaint in the action

pending before the district court. This petition arises from the

court of appeals’ reversal of the denial of a motion to dismiss

(and motion for judgment on the pleadings) challenging claims

alleged in the Second Amended Complaint. Therefore, the facts

alleged therein are assumed to be true. Sec Cadillac Fairview/Cal.,

Inc. v. Dow Chem. Co., 840 F.2d 691, 693 (9th Cir. 1988) (stating

that all allegations in the complaint must be accepted as true for

purposes of resolving a motion under Fed. R. Civ. P. 12).

Petitioners formed the Pinal Creek Group to coordinate

their efforts in conducting this cleanup.

If left unabated, the contaminated groundwater

would reach the perennially flowing segment of the Pinal

Creek and, from there, the Salt River and ultimately

Roosevelt Lake, a major water source for the Phoenix

metropolitan area. Petitioners, however, have taken

interim remedial measures to prevent this problem from

occurring. Petitioners have devoted millions to these

measures and, through careful study, have developed a

plan for a permanent cleanup of the problem. Petitioners

estimate that the total cost of implementing a permanent

cleanup will well exceed $100 million.

Each Respondent (or its predecessors) conducted or con-

trolled mining or mineral processing that contributed to the

contamination. Accordingly, the Arizona Department of

Environmental Quality (ADEQ) asked Petitioners (two of

which are current operators of mining properties in the

district) and each of the Respondents (which ADEQ identi-

fied as former owners or operators of mining properties in

the district) to help remediate this long-standing pollution.

However, Respondents, Atlantic Richfield Company

(ARCO), Occidental Petroleum Corporation, CanadianOxy

Offshore Production Company, and Newmont Mining Cor-

poration, all denied any liability and declined to help with

the cleanup work or otherwise to respond to the environ-

mental threat.

In 1991, Petitioners filed an action to recover cleanup

costs from Respondents. Petitioners alleged, inter alia, a cost

recovery claim against Respondents under CERCLA § 107(a).

Petitioners also sought contribution from Respondents under

CERCLA § 113(f) for the monies that Petitioners have reim-

bursed to the State of Arizona to cover ADEQ’s expenses in

overseeing the cleanup. Respondents alleged counterclaims

against Petitioners for contribution under CERCLA § 113(f).

On September 18, 1995, Respondent ARCO moved to

dismiss Petitioners’ cost recovery claims under CERCLA

§ 107(a). The remaining Respondents joined ARCO’s motion

and also moved for judgment on the pleadings on the same

grounds. In their joint motions, Respondents argued that cost

recovery claims under CERCLA § 107(a) may be brought

only by so-called “innocent” parties — meaning parties that

are not themselves liable or potentially liable under

CERCLA’s strict liability scheme. Respondents contended

that Petitioners could bring claims only for contribution

pursuant to CERCLA § 113(f).

The United States District Court for the District of Ari-

zona denied Respondents’ motions. The district court con-

cluded that the “plain language” of CERCLA “clearly and

unequivocally” grants standing to “any person,” even a

potentially liable party, who incurred necessary response

costs to assert a cost recovery claim against any other poten-

tially liable parties. Pinal Creek Group v. Newmont Mining

Corp., 926 F. Supp. 1400, 1405-06 (D. Ariz. 1996). Accordingly,

the district court held that Petitioners are entitled to invoke

CERCLA § 107(a)’s private cost recovery remedy to recover

their properly incurred cleanup costs from Respondents. See

id.

Respondents disputed this ruling and moved to have

the district court certify its order for an interlocutory appeal

to the United States Court of Appeals for the Ninth Circuit.

Respondents observed that the order presented a question of

law that they described as “hotly debated and inconsistently

resolved both within the Ninth Circuit and around the coun-

try,” and one that is of critical significance “to the parties in

this and other private CERCLA actions.” (Motion to Amend

this Court’s March 28, 1996 Order to Include a Statement

Certifying the Order for Immediate Interlocutory Appeal

Pursuant to 28 U.S.C. § 1292(b) at 3, Pinal Creek Group v.

Newmont Mining Corp., 926 F. Supp. 1400 (D. Ariz. 1996) (No.

91-CV-1764-ROS)). Respondents further noted that “substan-

tial differences of opinion . . . already exist across the country

on this issue,” and that “so polar are the positions that every

new opinion on the subject, whether officially published or

not, is widely distributed to the environmental law commu-

nity and added to the running tally.” Id. at 7.

The district court granted Respondents’ motion and cer-

tified the legal issue presented in this petition to the court of

appeals. By order filed on July 15, 1996, the Ninth Circuit

granted Respondents’ petition for an interlocutory appeal to

resolve an intra-circuit conflict regarding whether potentially

liable parties may bring private cost recovery claims under

CERCLA § 107(a).

In reversing the district court (and remanding with an

instruction to grant Respondents’ motion to dismiss), the

court of appeals concluded that potentially liable parties may

not bring private cost recovery claims under CERCLA

§ 107(a), and that the Act limits potentially liable parties to

claims for contribution governed by CERCLA § 113(f). The

Ninth Circuit issued an opinion and entered judgment on

July 2, 1997. See Pinal Creek Group v. Newmont Mining Corp.,

118 F.3d 1298, 1306 (9th Cir. 1997).2

On July 15, 1997, Petitioners filed a petition for rehear-

ing and suggestion for rehearing en banc, which the court of

appeals denied on August 11, 1997. Petitioners timely filed

this Petition for a Writ of Certiorari on November 10, 1997.

2 Indeed, in a companion case, the court of appeals

reversed another district court, which had reached a holding

similar to that reached here. See Judgment Reversing Order of

the District Court, National R.R. Corp v. BP] Int'l, No. 95-5674

(9th Cir. filed July 9, 1997) (mem.).

REASONS FOR GRANTING WRIT

The purely legal question presented by this petition -

who is entitled to use CERCLA § 107(a)’s cost recovery

remedy — has been the focus of the most heated legal

debate regarding CERCLA since this Court’s decision

three years ago in Key Tronic Corp. v. United States, 511

U.S. 809 (1994). In Key Tronic, the Court addressed

whether private parties who conduct environmental

cleanups may recover attorneys’ fees under the private

cost recovery remedy created by CERCLA § 107(a). Id. at

811.5

The question presented here - which is related to, but

far more fundamental than, the question addressed in Key

Tronic - is whether potentially liable parties may invoke

the private cost recovery remedy under § 107(a). As a

threshold matter in Key Tronic, the Court necessarily

addressed the issue now specifically raised here, and

implicitly concluded that Key Tronic, a liable party, could

pursue its “cost recovery claim under CERCLA

§ 107(a)(4)(B).” 511 U.S. at 812.

The Court’s opinion, however, did not forestall con-

troversy over the rights of potentially liable and liable

parties who, like Key Tronic, conduct an environmental

cleanup and avail themselves of CERCLA’s private

remedies. As the Fourth Circuit noted earlier this year in

a vast understatement, “the ability of [potentially liable

parties] to bring § 107 actions is the subject of consider-

able debate.” Beazer East, Inc. v. United States Navy, No.

3 The Court held that the private cost recovery remedy

under CERCLA § 107(a) enabled Key Tronic to recover its

attorneys’ fees directly related to its environmental cleanup

efforts, including fees incurred in identifying other potentially

liable parties from which to seek cleanup costs. Id. at 820.

96-17368, 1997 U.S. App. LEXIS 6746, *6 n.1 (4th Cir. Apr.

11, 1997).

To date, over sixty reported opinions from the lower

federal courts address the question of whether a poten-

tially liable party may use CERCLA § 107(a)’s private cost

recovery remedy. Rather than developing any kind of con-

sensus or uniform approach, however, these opinions have

reached widely divergent conclusions and have merely

fueled the controversy over the question presented.4

Echoing the very substantial concerns expressed in

the case law, one commentator recently called the federal

decisions on the question presented ‘..uddled and con-

flicting.” Michael V. Hernandez, Cost Recovery or Contri-

bution: Resolving the Controversy Over CERCLA Claims

Brought by Potentially Responsible Parties, 21 Harv. Envtl. L.

Rev. 83, 135 (1997).5 “[P]rompt resolution of this issue is

* Multiple courts have noted the existing conflict of

authority regarding the issue described in the question

presented. See, e.g., Crofton Ventures Limited Partnership v. G & H

Partnership, No. MJG-96-1378, 1997 U.S. Dist. LEXIS 8067, *8 (D.

Md. Jan. 31, 1997) (noting that “[f]ederal courts are divided” on

this issue); Pinal Creek Group v. Newmont Mining Corp., 926 F.

Supp. 1400, 1403 (D. Ariz. 1996) (describing this issue as “a

hotly debated legal question”); Bethlehem Iron Works, Inc. v.

Lewis Indus., Inc., 891 F. Supp. 221, 223 (E.D. Pa. 1995) (stating

that “courts have reached different conclusions concerning

when, if ever, a PRP has a right of action pursuant to § 107(a)”).

5 Another environmental commentator compared the federal

courts’ confusion with the parable of the “blind men and the

elephant” — suggesting that courts have been blindly trying to

define CERCLA § 107(a) by looking disjointedly at only discrete

sub-issues. Ann Alexander, Standing under Superfund §§ 107 and 113:

Avoiding the Error of the Blind Men and the Elephant, Toxics L. Rptr.

(BNA) 155 (july 12, 1995) (analyzing the “firestorm” of litigation

over the relationship between CERCLA §§ 107(a) and 113(f)).

vital,” noted another observer, because the “almost ad

hoc determination of a remediating plaintiff's rights has

resulted in much unpredictability.” Ivy Barton-Wagner,

Comment, Setting CERCLA Straight: A Solution to the Dis-

pute over Actions by Liable Remediators Under 107 and 113,

14 Temp. Envtl. L. & Tech. J. 207, 208 (1995).6

The Court should take this opportunity to resolve this

confusion because, as long as this judicial contradiction

reigns, the fundamental intent of Congress to promote settle-

ment and cleanup under CERCLA will be frustrated. By

addressing the question presented, this Court can provide

much needed national guidance regarding the remedies that

® There are numerous additional articles regarding the

controversy over the question presented. See, e.g., Daniel R.

Avery, Statutory Right or Statutory Prohibition? Reconciling

CERCLA’s Contribution Protection with the Private Response Cost

Recovery Action, 12 Va. Envtl. L.J. 367 (1993); Daniel D.

Barnhizer, Recent Development, Joint and Several Liability and

Contribution Under CERCLA Sections 107(a)(4)(B) and 113(f), 18

Harv. Envtl. L. Rev. 563 (1994); Richard Buckley, Jr., Comment,

Making a Case for Statutory Amendment to the Comprehensive

Environmental Response, Compensation, and Liability Act

(CERCLA): Solving the Section 107/Section 113 Cause of Action

Controversy, 31 Tulsa L.J. 851 (1996); Steven DeGeorge, Seventh

Circuit Decisions Further Confuse the Availability and Significance

of CERCLA § 107 Standing, 9 Envtl. Litig. Comm. Newsl. (A.B.A.

Sec. Litig., Chicago, Ill.) No. 1, at 5 (1997); Stephen Ferry,

Allocation and Uncertainty in the Age of Superfund: A Critique of the

Redistribution of CERCLA Liability, 3 N.Y.U. Envtl. L. J. 36 (1994);

Aaron A. Garber, The PRP. the Section 106 Administrative Order,

the Contribution Claim, and CERCLA’s Statute of Limitations: A

Complete Statutory Analysis, 16 Temp. Envtl. L. & Tech. J. 115

(1997); Mark A. Stach, Only “Innocent” Parties Need Apply: The

Death of Private Cost Recovery Actions Under Superfund?, 20 Wm.

& Mary Envtl. L. & Pol’y Rev. 33 (1995).

CERCLA provides to potentially liable and liable parties who

conduct environmental cleanups.

The Court previously denied certiorari to decide this

issue two years ago.” Since that time, however, these con-

flicts have not been resolved, but rather have expanded to

multiple conflicting circuit views, as explained below.

Beyond question, the conflicts will not resolve themselves

without guidance from this Court. Based on facts presumed

to be true — with all relevant dispositive factual elements

present — this case presents the ideal opportunity to resolve

this now mature controversy.

A. The Court Should Issue Certiorari to Resolve

Conflicts of Authority Regarding the Availabil-

ity of CERCLA § 107(a)’s Cost Recovery Rem-

edy for Potentially Liable Parties Who Conduct

Environmental Cleanups.

Resolving this conflict is critical because CERCLA is one

of the Nation’s most important civil liability laws, whether

measured by public expectations, its far-reaching effects on

commercial relationships in the United States, or its sheer

monetary impact. Congress’s “primary objective” in adopt-

ing CERCLA was to promote “spontaneous private cleanup

initiatives.” In re Hemingway Transp., Inc., 993 F.2d 915, 921

(1st Cir. 1993).

7 In United Technologies Corp. v. Browning-Ferris Industries, Inc.

33 F.3d 96, 103 (1st Cir. 1994), cert. denied, 513 U.S. 1183 (1995), the

First Circuit held that potentially liable parties cannot bring private

cost recovery claims under § 107(a), but rather must rely on their

express contribution remedy in CERCLA § 113(f).

8 The total liability imposed under CERCLA has already

run into the billions of dollars. See U.S. General Accounting

Office, Superfund - EPA Has Opportunities to Increase Recoveries of

Costs, GAO/RCED-94-196 (September 1994) at 18.

Indeed, to ensure that private parties, rather than the

government, conduct and pay for environmental

cleanups, Congress established § 107 to permit parties

who cleanup contaminated sites to recover the costs of

that cleanup from parties who are liable under CERCLA’s

Strict liability scheme. See Price v. United States Navy, 39

F.3d 1011, 1015 (9th Cir. 1994) (explaining that CERCLA’s

private action for recovery of response costs is one of the

mechanisms Congress created to achieve its purpose of

promoting private environmental cleanups).

CERCLA 107(a) provides that parties who either par-

ticipated in the creation of an environmental pollution

problem, or have some legal responsibility for the prop-

erty where the problem exists, 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.” 42 U.S.C.

§ 9607(a)(1-4)(A). CERCLA also provides that responsible

parties are liable for “any other necessary costs

of response incurred by any other person consistent

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

§ 96U7(a)(1-4)(B).

Courts have generally considered CERCLA § 107(a)

to impose joint-and-several liability, though this phrase is

not used in the statute nor even necessary to it. Rather,

under the express statutory language, recovery is avail-

able without limitation for “costs of response.” See United

Techs. Corp. v. Browning-Ferris Indus., Inc., 33 F.3d 96, 100

(Ist Cir. 1994), cert. denied, 513 U.S. 1183 (1995) (noting

that the description, “ ‘[a]ctions for recovery of costs,’

suggests full recovery”). Congress also provided for only

Strictly circumscribed defenses, not including contribu-

tory conduct. See 42 U.S.C. § 9607(b) (1994).

By amendment in 1986, Congress established that

anyone found liable for another’s response costs under

CERCLA could seek contribution, subject to certain pow-

erful limitations. See 42 U.S.C. § 9613(f)(2). As a result,

Petitioners urge and the plain language provides that a

liable CERCLA defendant must pay all the plaintiff’s

response costs, but then may seek to recover a portion of

them from others, including a liable plaintiff, by pros-

ecuting contribution counterclaims, cross-claims, or third-

party claims.

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

(1994), this Court examined the relationship between the

Original private cost recovery remedy created by

CERCLA § 107(a) and the newly added express contribu-

tion remedy codified as CERCLA § 113(f). As the Court

explained, § 113(f) merely added a new and “somewhat

overlapping” express contribution remedy to the Act’s

liability scheme:

The 1986 [SARA] amendments included a provi-

sion — CERCLA § 113(f) - that expressly created

a cause of action for contribution. See 42 U.S.C.

§ 9613(f). Other SARA provisions, moreover,

appeared to endorse the judicial decisions rec-

ognizing a cause of action under § 107 by pre-

supposing that such an action existed. An

amendment to § 107 itself, for example, refers to

“amounts recoverable in an action under this

section.” 42 U.S.C. § 9607(a)(4)(D). The new con-

tribution section also contains a reference to a

“civil action... under section 107(a).” 42 U.S.C.

§ 9613(f)(1). Thus the statute now expressly autho-

rizes a cause of action for contribution in § 113 and

impliedly authorizes a similar and somewhat over-

lapping remedy in § 107.

Id. at 816. (emphasis added).

econ

se SARA RS Ai a Hatta ~

Notwithstanding the Court's explanation, a plethora

of judicial opinions since Key Tronic has generated multi-

ple inconsistent and irreconcilable constructions of

CERCLA’s cost recovery and contribution remedies. As a

result, the substantive and procedural elements of a pri-

vate citizen’s remedies under CERCLA differ signifi-

cantly from jurisdiction to jurisdiction.

1. Conflicts Exist Regarding the Fundamental

Nature of CERCLA § 107(a) and § 113(f)

Among the Circuits That Limit the Avail-

ability of CERCLA § 107’s Private Cost

Recovery Remedy.

The United States District Court for the District of

Arizona held in this case that CERCLA § 107(a) “clearly

and unequivocally” creates a private cost recovery rem-

edy that, by CERCLA’s “plain language,” may be used by

“any ... person” — including a potentially liable person —

who incurs costs in properly conducting an environmen-

tal cleanup. Pinal Creek Group v. Newmont Mining Corp.,

926 F. Supp. 1400, 1405 (D. Ariz. 1996).

The Ninth Circuit, however, rejected the district

court's plain language construction of CERCLA § 107(a)’s

Private cost recovery remedy and ordered the dismissal

of Petitioners’ cost recovery claims under § 107(a). See

Pinal Creek Group v. Newmont Mining Corp., 118 F.3d 1298,

1306 (9th Cir. 1997). The court of appeals held that Peti-

tioners, as potentially liable parties under CERCLA, may

bring only claims governed by the express contribution

remedy in CERCLA § 113(f). Id.

At first blush, the Ninth Circuit's decision appears

merely to fall in line with decisions from the First, Third,

Seventh, Tenth and Eleventh Circuits, which have explicitly

rejected the plain language construction of CERCLA

§ 107(a).?

On prudent analysis, however, substantial conflicts are

revealed even among the decisions in these circuits. As

discussed below, there is a conflict between the plain lan-

guage construction and all of the multiple competing con-

structions, as well as conflicts among the competing

constructions themselves. Moreover, the opinions devising

the competing constructions have led to textbook examples

of the inevitable confusion that results from loose statutory

construction.

a) A Conflict Exists Between the Dichot-

omous Construction of CERCLA § 107(a)

and § 113(f) Adopted by Some Circuits

and the Overlapping Construction

Adopted by Other Circuits.

Among the circuits that reject the plain language

construction, a fundamental conflict of authority exists

regarding the relationship between CERCLA § 107(a) and

§ 113. As explained in the next section, all these conflicts

are unnecessary; none occurs under the plain language

construction. Yet, once courts depart from the plain lan-

guage construction, confusion and conflict abound.

° The United States Court of Appeals for the Fifth Circuit

acknowledged that the “text of section 107 does not limit the

class of plaintiffs who may recover response cost,” and that the

language of section 107 “evidences congressional intent that

anyone is eligible to recover response costs.” OHM Remediation

Serv. v. Evans Cooperage Co., Inc., 116 F.3d 1574, 1579 (5th Cir.

1997). The court, however, “express[ed] no opinion on the

separate question . . . [of] whether a PRP may seek to hold other

parties jointly and severally liable under section 107(a) for

response costs.” Id. at 1582 n.1.

fe asic Higher eRS SUP & Sedowiag,

The Ninth Circuit in this case stated that “while § 107

created the right of contribution, the ‘machinery’ of § 113

governs and regulates such actions.” Ping] Creek Group v.

Newmont Mining Corp., 118 F.3d 1298, 1302 (1997). In

contrast, the First Circuit has described the remedies

under CERCLA § 107(a) and 113(f) as “distinct, non-

overlapping anodynes.” See United Techs. Corp. v. Brown-

ing-Ferris Indus., Inc., 33 F.3d 96, 103 (Ist Cir. 1994), cert.

denied, 513 U.S. 1183 (1995).

Thus, while the Ninth Circuit's description implies

that the boundaries of § 107(a) and § 113(f) are blurred

and overlap, the First Circuit’s description holds that

they are fixed, and that the remedies are wholly separate.

These conceptual differences regarding the relationship

between § 107(a) and § 113(f) are not merely academic.

Rather, they affect the rights of potentially liable Parties

directly in important and concrete ways.

Under the First Circuit's dichotomous Statutory con-

struction, the cost recovery remedy under CERCLA

§ 107(a) and the contribution remedy under § 113(f) are

distinct. See United Techs. Corp., 33 F.3d at 100. Only non-

liable parties — or, in the parlance of the First Circuit,

“innocent” parties - may use § 107(a)’s cost recovery

remedy. See id. at 99. Consequently, all potentially liable

parties are relegated to the separate contribution remedy

in CERCLA § 113(f). See id.

Importantly, the First Circuit’s interpretation of

CERCLA § 113(g)’s provisions, which establishes

CERCLA’s statutes of limitations, clearly reflects the

court’s construction of CERCLA § 107(a) and § 113(f) as

creating two non-overlapping remedies. Section 113(g)

sets forth two sets of statutes of limitations. Section

113(g)(2) establishes a six-year statute of limitations for

“[a]ctions for recovery of costs” incurred in a remedial

action. 42 U.S.C. § 9613(g)(2) (1994).?° Section 113(g)(3), in

contrast, establishes a three-year statute of limitations for

actions for contribution. See 42 U.S.C. § 9613(g)(3) (1994).

Based on the parallel limitations provisions in

CERCLA § 113(g) and on the court’s notion of completely

separate remedies, the First Circuit held that “the shorter

prescriptive period, contained in 42 U.S.C. § 9613(g)(3),

governs actions brought by liable parties.” United Techs.

Corp., 33 F.3d at 99. On the other hand, according to the

First Circuit, “the longer statute of limitations, contained

in 42 U.S.C. § 9613(g)(2), addresses actions brought by

innocent parties that have undertaken cleanups.” Id.

In contrast to the First Circuit’s rigidly dichotomous

construction, an overlapping construction of the relation-

ship between §§ 107(a) and 113(f) has enabled other

courts to apply the CERCLA § 113(g) limitations periods

in a wholly different manner. Illustratively, in Sun Co. v.

Browning-Ferris, Inc., 124 F.3d 1187, 1192-93 (10th Cir.

1997), the court of appeals reversed an order that applied

the three-year statute of limitations to a potentially liable

party’s CERCLA claim.

Like the Ninth Circuit in this case, the Tenth Circuit

concluded that a potentially liable party’s contribution

claim arises under § 107(a), but is governed by § 113(f).

Sun Co., 124 F.3d at 1191. Accordingly, the Tenth Circuit

in Sun Co. reasoned that the six-year limitations period in

CERCLA § 113(g)(3) applies to an initial claim to seek

recovery of costs, even if § 113(f) otherwise governs that

claim because it is brought by a potentially liable party.

10 Section 113(g)(2) also provides for a three-year

limitations period for removal actions, unless a remedial action

is initiated within three years of the removal action, in which

case the costs for the removal action can be sought within six

years. See 42 U.S.C. § 9613(g)(2).

See id. at 1192. The foregoing comparisons starkly reveal

that similarly situated parties may face different limita-

tions periods governing their CERCLA claims, depending

solely on which jurisdiction’s Statutory construction

applies.

The conflict of authority regarding the relationship

between CERCLA § 107(a) and § 113(f) directly affects

other statutory provisions as well. CERCLA § 113(f)(2),

for example, provides that a party that has resolved its

liability to the government receives contribution protec-

tion regarding the matters addressed in a qualified settle-

ment. See 42 U.S.C. § 9613(f)(2). Under a dichotomous

Statutory construction, no potentially liable party can

have any claim under CERCLA § 107(a). Therefore, no

such party can allege a claim under § 107(a) to evade a

settling party’s contribution protection under § 113(f)(2).

The Third Circuit subscribed to exactly this reasoning

in endorsing a dichotomous statutory construction of

CERCLA § 107(a) and § 113(f). The Third Circuit stated

that allowing a potentially liable party to “seek contribu-

tion under § 107(a)(4)(B) . . . would throw the proverbial

monkey wrench into the” contribution protection mecha-

nism. In re Reading Co., 115 F.3d 1111, 1119 (3d Cir. 1997).

The Third Circuit’s In re Reading Co. opinion prompted

the Tenth Circuit, which views all CERCLA contribution

claims as arising under § 107(a), openly to acknowledge

the rift between the circuits’ conflicting interpretations.

The Tenth Circuit bluntly stated: “[W]e believe the Third

Circuit’s concern reflects a misconception of the relation-

ship between §§ 107 and 113.” Sun Co., 124 F.3d at 1193.

The conflicts of authority among the circuits also

atfect whether potentially liable parties may be entitled to

certain forms of relief available for claims under § 107(a).

CERCLA § 113(g)(2) authorizes declaratory relief in

actions under CERCLA § 107(a), and § 107(a) itself autho-

rizes awards of prejudgment interest for actions under

that section. See 42 U.S.C. §§ 9613(g)(2), 9607(a). Yet,

absent clear guidance regarding the proper interpretation

of § 107(a) and § 113(f), the availability of these forms of

relief to potentially liable parties will remain problemat-

ical.?!

b) The Seventh Circuit’s Fault-Based Con-

struction of CERCLA § 107(a)’s Private

Cost Recovery Remedy Conflicts with

Other Circuits’ Constructions That Dis-

regard Fault.

Uniquely among the circuits, the United States Court

of Appeals for the Seventh Circuit has engrafted a fault-

based test onto the construction of CERCLA § 107(a)’s

private cost recovery remedy.!? See Rumpke of Ind., Inc. v.

11 Given that a liable party’s contribution claim cannot be

pursued under CERCLA § 107(a) in some circuits, the

prejudgment interest authorized for claims brought pursuant to

§ 107(a) presumably is unavailable to liable parties in the

jurisdictions subscribing to the dichotomous construction of

§ 107(a) and § 113(f). Similarly, the declaratory relief that is

specifically authorized for cost recovery actions may not be

available in those jurisdictions. See, e.g., Reichhold Chem. Inc. v.

Textron, Inc., 888 F. Supp. 1116, 1124 (N.D. Fla. 1995) (holding

that the liable party was limited to the remedy in § 113(f) and

was not entitled to declaratory relief because “[b]y its explicit

language, [113(g)(2)] applies only to cost recovery actions under

§ 107”).

12 In creating this fault-based test, the court inexplicably

has failed to address the conflict between recent decisions and

the court’s opinion in Amcast Indus. Corp. v. Detrex Corp., 2 F.3d

746 (7th Cir. 1993), cert. denied, 510 U.S. 1044 (1994). In Amcast,

Chief Judge Posner stated that the “statute is clear that whoever

AN Ae ia lI Cathe bk CELE A SETI

Cummins Engine Co., 107 F.3d 1235 (7th Cir. 1997). This

fault-based test opens yet another split of authority

among the circuits regarding who may use CERCLA

§ 107(a)’s cost recovery remedy. Again, as explained in

the next section, such a conflict is avoided under the

plain language construction.

The Seventh Circuit has explicitly disagreed with

other courts’ interpretations of CERCLA that limit

§ 107(a)’s cost recovery remedy to only “truly innocent”

private plaintiffs. Id. at 1241. Under the Seventh Circuit’s

fault-based test, a potentially liable party may use

§ 107(a)'s cost recovery remedy, but only if the party

alleges that it is “blameless” of actual fault for polluting

the cleanup site. See id. at 1240.

According to Rumpke, under CERCLA’s strict liability

scheme, a party can be liable but “blameless” if, for

example, the party purchased contaminated property

either knowingly or without making due inquiry. The

Seventh Circuit held that liable landowners “who allege

that they did not pollute the site in any way may sue for

their direct response costs under § 107(a).” Id. at 1241.

The Seventh Circuit expressed its fear that, absent

such an exception for “blameless but liable” parties, the

CERCLA § 107(a) private cost recovery remedy would be

eviscerated. Id. The court warned, “li]Jf one were to read

§ 107(a) as implicitly denying standing to sue even to

(like Amcast [the plaintiff]) incurs costs in cleaning up a

contaminated site can seek to recover them from any

responsible person, and if the responsible person believes as

[the defendant] does that his contribution to the mess was

trivial and wants the point established promptly he can

counterclaim for as large a percentage of the costs as he thinks

he can prove was due to the plaintiff’s own conduct.” Id. at 748.

landowners like Rumpke who did not create the hazard-

ous conditions, this would come perilously close to read-

ing § 107(a) itself out of the statute.” Id.

It is unclear what degree of blameworthy conduct is

necessary under the Seventh Circuit’s construction to

foreclose a potentially liable party from bringing a cost

recovery claim under CERCLA § 107(a). Of course, the

strict liability statute is silent on the issue. In AM Interna-

tional, Inc. v. Datacard Corp., 106 F.3d 1342 (7th Cir. 1997),

the plaintiffs were liable parties under CERCLA because

they owned the contaminated property. Although the

plaintiffs alleged that they were not at fault for the con-

tamination, they bought the property knowing about the

contamination and presumably had paid less because of

it. Id. at 1347. The court conceded that “this may have

rendered [the plaintiffs] a little less ‘innocent,’” but

nonetheless allowed the plaintiffs to invoke the cost

recovery remedy in § 107(a). Id.

The Tenth Circuit has specifically criticized the type

of procedural mechanics implicit in the Seventh Circuit's

construction, which enables the plaintiffs to determine

whether the claim falls under § 107(a) or § 113(f) based on

their mere allegation of blamelessness. See Sun Co. v.

Browning-Ferris, Inc., 124 F.3d 1187, 1193 (10th Cir. 1997).

Implicitly acknowledging a circuit split, the Tenth Circuit

observed that “our construction of the statute does not

divide contribution actions into § 113 actions and § 107

actions depending on the procedural posture of the plain-

tiff [potentially liable party].” Id.

By declining to address the soundness of the Seventh

Circuit’s fault-based construction and by dismissing the

impact of its own construction on critical elements of a

potentially liable party’s remedy, the Ninth Circuit failed

to recognize the fundamental nature of its misconstruc-

tion and the conflict it perpetuated.

2. The Foregoing Conflicts Do Not Exist

Among the Courts that Adhere to the Plain

Language Construction of CERCLA § 107(a)

That Allows “Any Person” Who Conducts a

Cleanup to Use the Section’s Cost Recovery

Remedy.

Consistent with the statutory text, the district court

in this case construed CERCLA § 107(a) as allowing the

government and literally “any other person” to invoke

the section’s cost recovery remedy to seek reimbursement

for their qualified cleanup costs. See Pinal Creek Group v.

Newmont Mining Corp., 926 F. Supp. 1400, 1406 (1996).

Given the clear statutory text, the court refused “to

engraft the word ‘innocent’ onto the phrase ‘any .. .

person’ set forth in Section 107(a)(4)(B).” Id. at 1407.

In reaching this conclusion, the district court joined

numerous other courts around the country that have

adopted this plain language construction of CERCLA

§ 107(a). The district court in this case explained that such

a plain language construction of CERCLA § 107(a) not

only conforms to the statutory text, but also directly

furthers its congressional purpose. See id. (stating that its

decision “is supported by an analysis of CERCLA policy

and case law”).

The plain text of CERCLA § 107(a) does not distinguish

between liable and non-liable parties. See 42 U.S.C. § 9607(a).

The only distinction in the text of § 107(a) is between sover-

eign governments and all other plaintiffs: Under CERCLA

107(a)’s cost recovery remedy, the government plaintiffs

receive a presumption that their expenditures are spent in

compliance with the applicable federal regulations establish-

ing approved cleanup procedures. All other CERCLA plain-

tiffs must actually prove such compliance. Compare 42 U.S.C.

§ 9607(a)(1-4)(A) with § 9607(a)(1-4)(B).

Critically, omission of any language limiting who is

entitled to the CERCLA § 107(a)’s private cost recovery

remedy should be viewed as deliberate. When Congress

intended to limit a private remedy in CERCLA to non-

liable persons, Congress did so expressly. Illustratively,

CERCLA § 106 creates a private remedy for parties who

conduct cleanups pursuant to an EPA order. This remedy

allows such parties to recover their cleanup costs from

the “Superfund,” the federal trust fund established by

CERCLA to pay for hazardous waste cleanups. See 42

U.S.C. § 9606(b)(2)(C).

Congress, however, expressly limited this cost recov-

ery remedy to any person who can “establish by a pre-

ponderance of the evidence that it is not liable for

response costs under section 9607(a).” See id. In direct

contrast, Congress did not draft language that limits the

parties entitled to the cost recovery remedy in § 107. This

fact suggests that Congress intended that literally “any

person” who conducts a proper cleanup is entitled to that

remedy.

Unlike the district court the Ninth Circuit disre-

garded the plain language. The court of appeals should

not have done so because, as this Court recently reaf-

firmed, “where Congress includes particular language in

one section of a statute but omits it in another section of

the same Act, it is generally presumed that Congress acts

intentionally and purposely in the disparate inclusion or

exclusion.” Bates v. United States, No. 97-7185, 1997 U.S.

LEXIS 6704, *13 (Nov. 4, 1997) (quoting Russello v. United

States, 464 U.S. 16,23 (1983)).

A plain language construction of CERCLA § 107(a)’s

text is straightforward and powerful, and it provides a

number of legal incentives for potentially liable parties to

act to meet CERCLA’s objectives. Indeed, the practical

implications of the plain language construction of

ooo

en AL oat Spa

§ 107(a) are critical, shifting tremendous risks to those

parties who are liable but who do not perform cleanups.

As the district court stated:

[A]llowing [potentially liable parties] to proceed

under Section 107 creates several incentives for

early cleanup and settlement. These incentives

include: (1) shifting the difficult burden of proof

concerning the allocation of cleanup costs from

plaintiffs to defendants; (2) relieving plaintiffs

of the risk of being held liable for “orphan

shares” . . . (3) minimizing plaintiffs’ transac-

tions costs involved in tracking down and suing

every [potentially liable party]; (4) limiting the

range of available defenses to those enumerated

in Section 107(b); and (5) giving parties who

initiate cleanups the benefit of a longer statute

of limitations.

Pinal Creek Group v. Newmont Mining Corp., 926 F. Supp.

1400, 1407-08 (D. Ariz. 1996).

The district court’s opinion explained clearly how a

plain language construction of CERCLA § 107(a) effectu-

ates the congressional purposes behind the Act and

avoids problems resulting from competing constructions.

Id. at 1407-09. Not surprisingly, therefore, recent deci-

sions from other jurisdictions have endorsed that opin-

ion, finding it persuasive and “particularly well-

reasoned.” E.g., Adhesives Research Inc. v. American Inks &

Coatings Corp., 931 F. Supp. 1231, 1243 (M.D. Pa. 1996)

(citing Pinal Creek Group v. Newmont Mining Corp., 926 F.

Supp. 1400 (D. Ariz. 1996)).

Those courts that adhere to a plain language con-

struction that interprets the words “any person” in

CERCLA § 107(a) literally have acted consistently with

this Court’s interpretations of similar provisions in other

federal environmental statutes. For example, in Bennett v.

Spear, 117 S. Ct. 1154, 1162 (1997), the Court stated that in

the absence of explicit congressional language limiting or

qualifying the phrase “any person,” it should be taken

readily at “face value.”

Considerable authority supports the plain language

construction, though the apposite circuit authority is not

always explicit. A clear majority of decisions from within

the Fourth Circuit have endorsed the plain language con-

struction of CERCLA § 107(a).!° Against this backdrop,

13 In United States v. Taylor, 909 F. Supp. 355, 364 (M.D.N.C.

1995), the court held that a PRP need not be “an innocent or noble

volunteer” to state a cost recovery claim under CERCLA § 107(a). Id.

(quoting Chesapeake and Potomac Tel. Co. v. Peck Iron & Metal Co., 814

F. Supp 1269, 1272 (E.D. Va. 1992)). The court concluded that

restricting CERCLA § 107(a)’s cost recovery remedy “ignores the

plain language of the statute,” and “would require a party to prove

its innocence before utilizing Section 107, an extraordinary burden

to place on a plaintiff.” Id. at 363. Likewise, in Pneumo Abex Corp. v.

Bessemer & Lake Erie R.R. Co., 921 F. Supp. 336, 347 (E.D. Va. 1996),

the district court joined the majority of district courts in the Fourth

Circuit in adhering to the plain language construction of CERCLA

107(a)’s private cost recovery remedy. The court noted that

“{nJothing on the face of the statute indicates” that a liable party “is

liable under § 107 only to the United States, a state, an Indian tribe,

or any other ‘innocent’ person.” Id. (emphasis added). Recently,

another district court in the Fourth Circuit specifically cited the

district court’s opinion in this case and rejected the contention that

the “phrase ‘any other person’ [in CERCLA § 107(a)] should be read

to mean ‘any other innocent person.’ ” Crofton Ventures Ltd.

Partnership v. G & H Partnership, No. MJG-96-1378, 1997 U.S. Dist.

LEXIS 8067, *10 (D. Md. Jan. 31, 1997). The court explained, “As the

Pinal Creek court noted, prohibiting PRPs from bringing cost

recovery actions under § 107 ‘would turn the CERCLA incentive

scheme on its head.’ ” Id. at *12 (quoting Adhesives Research Inc. v.

American Inks & Coatings, 931 F. Supp. 1231, 1244 (D. Pa. 1996) citing

Pinal Creek Group v. Newmont Mining Corp., 926 F. Supp. 1400, 1408

(D. Ariz. 1996)).

aca ct caer

——

PO aE A EAA EG! Lh Rt, SINAC SE PIA Ile abe.

DE MR OL

;

the United States Court of Appeals for the Fourth Circuit

has not revisited the issue since its earlier cases allowing

potentially liable parties to use the cost recovery remedy

under § 107(a). See, e.g., Nurad Inc. v. William E. Hooper &

Sons Co., 966 F.2d 837, 841 (4th Cir. 1992); Richland-Lex-

ington Airport Dist. v. Atlas Props., Inc., 901 F.2d 1206 (4th

Cir. 1990).14 Under the circumstances, one district court

expressly “predict[ed] that the Fourth Circuit would

decline to follow those cases which hold that a PRP may

never utilize Section 107.” United States v. Taylor, 909 F.

Supp. 355, 366 (M.D.N.C. 1995).15

In using a plain construction of § 107, district courts

in the Sixth Circuit have been guided by the court of

appeals’ decision in Velsicol Chemical Corp. v. Enenco, Inc.,

‘4 The Fourth Circuit recently assumed arguendo that a

potentially liable party can maintain an action under § 107, but

observed “that the ability of PRPs to bring § 107, actions is the

subject of considerable debate.” See Beazer East, Inc. v. United

States Navy, No. 96-1736, 1997 U.S. App. LEXIS 6746, *5-6, 6 n.1

(4th Cir. Apr. 11, 1997).

'S Similarly, in Barmet Aluminum Corp. v. Brantley & Sons,

Inc., 914 F, Supp. 159, 164 (W.D. Ky. 1995), the district court held

“that a liable, or potentially liable party, such as Plaintiff is

alleged to be, is not limited to a contribution action under [113],

but may also bring an action to recover its response costs under

[107].” Likewise, in Mead Corp. v. United States, No. C-2-92-326,

1994 U.S. Dist. LEXIS 1426, *26 (S.D. Ohio Jan. 14, 1994), the

court concluded that “there is nothing in the statute to indicate

that a [potentially liable party] cannot initiate an action under

section 107.” Another court reached the same conclusion in

Kelly v. Thomas Solvent Co., 790 F. Supp. 710, 717 (W.D. Mich.

1990).

9 F.3d 524 (6th Cir. 1993).16 In Velsicol, the United States

Court of Appeals for the Sixth Circuit allowed a poten-

tially liable party to proceed with a cost recovery claim

under CERCLA § 107(a). See id. at 531 (reviewing issue

regarding statute of limitations). By recognizing the right

of potentially liable parties to invoke the cost recovery

remedy created by CERCLA § 107(a), the foregoing juris-

dictions have perpetuated a clear conflict among the fed-

eral courts regarding the question presented. Prior circuit

decisions in the Fourth and Sixth Circuits, as well as this

Court’s holding in Key Tronic, have guided district courts

in those circuits to permit potentially liable parties to

invoke CERCLA § 107(a) cost recovery remedy. In light of

the plain statutory language of CERCLA § 107(a), this

result should not be surprising.

By adhering to a plain language construction of

CERCLA § 107(a)’s cost recovery remedy, courts in the

16 Appellate decisions in the Second and Sixth Circuits

support the district court decisions in those jurisdictions that

endorse the plain language construction of CERCLA § 107(a).

For example, in Idylwoods Associates v. Mader Capital, Inc., 915 F.

Supp. 1290, 1313 (W.D.N.Y. 1996), held that if Congress “wished

to require a PRP to utilize only § 113 in seeking reimbursement

of response costs, it could easily have said so.” The district

court's opinion is supported by a decision of the Second Circuit

wherein the court of appeals held that under CERCLA

§ 107(a)(4)(B) “ ‘any ... person’ who is acting consistently with

the requirements of the NCP may recover ‘necessary costs of

response.’ ” New York v. Shore Realty Corp., 759 F.2d 1032,

1041-42 (2d Cir. 1985). Similarly, the court in Charter Township of

Oshtemo v. American Cyanamid Co., 910 F. Supp. 332, 337-38 (W.D.

Mich. 1995), explained that “[t]he decision to permit

[potentially liable parties] to proceed with their action under

CERCLA § 107, instead of forcing the action to be amended to be

one for contribution under section 113, appears to be more

consistent with the Sixth Circuit and Supreme Court opinions.”

Second, Fourth, and Sixth Circuits have avoided the laby-

rinthine conflicts that have resulted from other courts’

departure from the straightforward interpretation of the

section. The Court should resolve these conflicts by

granting this writ to reverse the Ninth Circuit and adopt

the plain language construction of CERCLA § 107(a).

B. The Court Should Grant this Petition to

Resolve the Conflicts of Authority Because the

Existing Legal Uncertainty Frustrates the Con-

gressional Purposes Behind The Act.

The Court should grant this petition to protect funda-

mental goals behind CERCLA that have been frustrated

by conflicts over the question presented in this case. In

1986, Congress enacted the Superfund Amendments and

Reauthorization Act (SARA), Pub. L. No. 99-499, 1986

U.S.C.C.A.N. (100 Stat.) 1613 (1988) to address the pre-

vailing concern that too much money was being spent

litigating CERCLA claims rather being devoted to

cleanups. Echoing a now familiar concern, one Senator

expressed his exasperation by suggesting that instead of

“Superfund,” CERCLA should be called “the lawyers’

Slush fund.” 131 Cone. Rec. $11658 (daily ed. Sept. 18,

1985) (statement of Sen. Symms).

Given the currently fractured state of the law, poten-

tially liable private parties face tremendous legal uncer-

tainty regarding the availability of CERCLA § 107(a) as a

remedy by which they can recover their cleanup costs.

Absent a clear remedy with predictable effectiveness,

business judgment aggressively counsels against volun-

tarily undertaking what one court described as the

“astronomical sums needed to restore [polluted] sites.”

Rumpke of Ind., Inc. v. Cummins Engine Co., Inc., 107 F.3d

1235, 1236 (7th Cir. 1997). Faced with uncertain prospects

for recovery and unpredictable legal risks, many poten-

tially liable parties instead will direct their resources

toward litigation to limit liability rather than voluntarily

initiating cleanups.

Whenever potentially liable parties hesitate in initiat-

ing environmental cleanups, CERCLA’s goals have been

frustrated. Encouraging prompt private cleanups is cru-

cial to CERCLA because the Superfund cannot cover

more than a fraction of the costs of cleaning the nation’s

most heavily polluted sites. As stated in CERCLA’s legis-

lative history, “[vJoluntary cleanups are essential to a

successful program for cleanup of the Nation’s hazardous

substance pollution problem.” H.R. Rep. No. 99-253, pt. 5,

at 58 (1985) (letter from U.S. Reps. Augustus Hawkins

and Joseph Gaydos).

The need for private cleanups extends even more

urgently to state and local cleanup programs that rely on

CERCLA. In the State of Arizona’s amicus brief in sup-

port of Petitioners in the district court, the Attorney

General of Arizona explained: “The State has a vital

interest in this issue because the State must rely on the

willingness of private parties to conduct remediation of

contaminated sites. The State does not have a fund of $5

billion like the Environmental Protection Agency.” (Join-

der of the State of Arizona to the Memorandum of Amicus

Curiae City of Phoenix at 1.) Similarly, the City of Phoenix

warned, “unless liable parties continue to undertake

prompt remediation themselves, the system will grind to

a halt.” (Memorandum of Amicus Curiae City of Phoenix

Regarding Cost Recovery Under CERCLA at 3).

Recovering costs of conducting these cleanups, how-

ever, presents onerous evidentiary burdens at most sites.

As EPA explained to Congress:

Site records are frequently deficient. It is often

difficult to determine with any certainty who

sent wastes to the site, what the wastes were

nt 3

and in what quantities, and where they were

placed. Dozens and even hundreds of parties

may have been involved.

Superfund Reauthorization: Judicial and Legal Issues: Over-

sight Hearings Before the Subcomm. on Admin. Law and Gov't

Relations of the Comm. on the Judiciary, 99th Cong. 14

(1985) (statement of Mr. Lee Thomas, Administrator of

EPA).

By initially allowing the parties conducting the

cleanup to collect a full recovery from any defendant,

CERCLA § 107(a)’s cost recovery remedy mitigates these

evidentiary burdens. In a private cost recovery action, the

non-working defendants will have the burden of tracking

down and allocating the cleanup costs among all liable

parties through claims under CERCLA § 113(f). See Pinal

Creek Group v. Newmont Mining Corp., 926 F. Supp. 1400,

1407-08 (D. Ariz. 1996). If a working party must rely on

§ 113(f) for a remedy, then the party conducting the

cleanup will instead face these difficult burdens.

Without a doubt, the availability of the cost recovery

remedy in CERCLA § 107(a) heavily influences the deci-

sions of private parties weighing whether to conduct

environmental cleanups. Potentially liable parties will

weigh the evidentiary difficulties under CERCLA § 113

and estimate the overall degree of litigation risk before

deciding whether to initiate a cleanup or sit back and

wait and see if the government or another PRP will step

forward to do the work.

Relegating all potentially liable parties to CERCLA

§ 113(f)’s remedy — the same remedy a party would have

as a non-working defendant — dramatically increases the

practical and legal risks that a potentially liable party

assumes in conducting a cleanup. Thus, by restricting

parties such as Petitioners to a contribution remedy

under § 113 on the ground that such parties render them-

selves liable when they commence a cleanup, the Ninth

Circuit turned congressional intent on its head.

Resolution of the question presented in this petition,

therefore, will have far-reaching consequences for the

swiftness with which voluntary cleanups are begun, and

for the demand on public funds needed to carry out

cleanup actions where no one has stepped forward.

Almost a generation after enactment, CERCLA’s cleanup

and settlement incentives languish amid conflicting

authority. When the district court certified its order for an

interlocutory appeal and the court of appeals granted

review of that order, both courts recognized the impor-

tance of resolving the fundamental question of statutory

interpretation presented in this petition. By granting this

Petition for a Writ of Certiorari, this Court can resolve the

unremitting national uncertainty regarding this critical

issue.

CONCLUSION

For the foregoing reasons, the Petition for a Writ of

Certiorari should be granted to review the judgment of

the United States Court of Appeals for the Ninth Circuit,

and thereby resolve the conflicts of authority among the

federal courts regarding the question presented herein.

Respectfully submitted,

NicHotas J. WALLWORK*

Frepric D. BELLAmMy

MucHmore & WALLwork, P.C.

2700 North Central Avenue,

Suite 1225

Phoenix, Arizona 85004

Telephone (602) 240-6699

*Counsel of Record for Petitioners

App. 1

APPENDIX A

The PINAL CREEK GROUP, consisting of

Cyprus Miami Mining Corporation, Inspira-

tion Consolidated Copper Company, and

Magma Copper Company, Plaintiff-Appellee,

Vz.

NEWMONT MINING CORP.; Occidental

Petroleum Corporation; Canadianoxy Offshore

Production Company; Atlantic Richfield Com-

pany; Phelps Dodge Corporation, Defendants-

Appellants.

No. 96-16334.

United States Court of Appeals,

Ninth Circuit.

Argued and Submitted Dec. 12, 1996.

Decided July 2, 1997.

Group composed of three mining companies engaged

in voluntary cleanup of hazardous waste site brought

action under Comprehensive Environmental Response,

Compensation, and Liability Act (CERCLA) against other

potentially responsible parties (PRPs), asserting claim for

totality of its cleanup costs and seeking imposition of

joint and several liability. Defendants moved to dismiss

claim for joint and several liability. The United States

District Court for the District of Arizona, Roslyn O. Sil-

ver, J., 926 F.Supp. 1400, denied motion but certified order

for immediate interlocutory appeal. After granting peti-

tion for interlocutory review, the Court of Appeals, Tas-

hima, Circuit Judge, held that: (1) CERCLA claim by one

PRP against another PRP necessarily is one for contribu-

tion; (2) group was not entitled to recover, jointly and

severally, totality of its response costs from other PRPs;

and (3) under CERCLA, PRP does not have claim for

App. 2

recovery of totality of its cleanup costs against other

PRPs, and PRP cannot assert claim against other PRPs for

joint and several liability.

Reversed and remanded.

Shane R. Swindle, Dalton, Gotto, Samson & Kilgard,

Phoenix, AZ, for Newmount [sic] Min. Corp.

Michael D. Young, Tiffany Hedgpeth, McClintock,

Weston, Benshoof, Rochefort, Rubalcava & MacCuish

LLP, Los Angeles, CA, for Phelps Dodge Corp.

Michael J. Gallagher, Davis, Graham & Stubbs,

Denver, CO, for ARCO.

Michael P. Berman, Kim E. Williamson, Lowe & Ber-

man, Phoenix, AZ, for Occidental Petroleum and Cana-

dianoxy.

Nicholas J. Wallwork, Muchmore & Wallwork, Phoe-

nix, AZ, for Plaintiff-Appellee.

Jeremy Heep, Environment and Natural Resources

Division, United States Department of Justice, Washing-

ton, DC, for amicus curiae United States.

Tamara L. Huddleston, Assistant Attorney General,

Phoenix, AZ, for amicus curiae State of Arizona.

Craig J. Reece, Assistant City Attorney, Hugh H.

Marthinsen, Squire, Sanders & Dempsey, Phoenix, AZ, for

amicus curiae City of Phoenix, AZ.

Barbara R. Goldberg, Assistant City Attorney, Scotts-

dale, AZ, for amicus curiae City of Scottsdale, AZ.

Karen S. Gaylord, Assistant City Attorney, Tempe,

AZ, for amicus curiae City of Tempe, AZ.

6 aa ASD, Bete Ne AAR SBS OE

eH adie ey

AO ah

frou hb hd pee 1. <0 achat lee

App. 3

Appeal from the United States District Court for the

District of Arizona; Roslyn O. Silver, District Judge, Pre-

siding. D.C. No. CV-91-01764-ROS.

Before: GOODWIN, FERGUSON and TASHIMA, Cir-

cuit Judges.

TASHIMA, Circuit Judge:

This case requires us to decide whether the Compre-

hensive Environmental Response, Compensation, and

Liability Act, 42 U.S.C. §§ 9601-9675 (“CERCLA”), pro-

vides a party who is partly liable for the cleanup of a

hazardous waste site with a claim against other poten-

tially responsible parties (“PRPs”) for the joint and sev-

eral recovery of the totality of its cleanup costs. We

answer in the negative.

I. BACKGROUND

“CERCLA was a response by Congress to the threat

to public health and the environment posed by the wide-

spread use and disposal of hazardous substances. Its

purpose was to ensure the prompt and effective cleanup

of waste disposal sites, and to assure that parties respon-

sible for hazardous substances bore the cost of remedying

the conditions they created.” Mardan Corp. v. C.G.C.

Music, Ltd., 804 F.2d 1454, 1455 (9th Cir.1986).

Plaintiff is composed of three mining companies who

have engaged in the voluntary cleanup of the Pinal Creek

Drainage Basin, a hazardous waste site located in Ari-

zona. In order to coordinate cleanup efforts, plaintiff

companies formed the Pinal Creek Group (collectively,

the “Pinal Group”). The Pinal Group commenced this

App. 4

action in an effort to recover all (or, alternatively, some)

of its cleanup costs from other PRPs.

Although the Pinal Group has admitted that it is

partly responsible for a portion of these cleanup costs, it

has asserted a claim for the totality of these costs and

seeks to impose joint and several liability on defendants

for that amount. The Pinal Group contends that defen-

dants would then be entitled to assert a contribution

claim against it (the Pinal Group) to recover that portion

of the costs for which the Pinal Group would be responsi-

ble.

All defendants moved to dismiss the claim that

sought to impose on them joint and several liability for

all response costs incurred by the Pinal Group. The dis-

trict court denied defendants’ motion to dismiss. How-

ever, it certified its order for an immediate interlocutory

appeal, pursuant to 28 U.S.C. § 1292(b). We granted the

petition for interlocutory review. Thus, we have jurisdic-

tion under 28 U.S.C. § 1292(b), and we reverse.

II. DISCUSSION

A. Overview

The district court’s interpretation of a statute is a

question of law which we review de novo. Parravano v.

Babbitt, 70 F.3d 539, 543 (9th Cir.1995), cert. denied, ___

U.S. __, 116 S.Ct. 2546, 135 L.Ed.2d 1066 (1996). Our

appellate jurisdiction under 28 U.S.C. § 1292(b) applies to

the order certified to us and is not “tied to the particular

question formulated by the district court.” Yamaha Motor

Corp., U.S.A. v. Calhoun, _.. US. __, __, 116 S.Ct. 619,

AE Ee ae tM

Vere,

evi Setar sy Tee hy een a

App. 5

623, 133 L.Ed.2d 578 (1996). As the Seventh Circuit has

stated, “it is the order that is before us on appeal, rather

than the questions themselves.” Rumpke of Ind., Inc. v.

Cummins Engine Co., 107 F.3d 1235, 1239 (7th Cir.1997)

(citing Yamaha).

Section 107(a) of CERCLA, 42 U.S.C. § 9607(a), autho-

rizes suits against certain “statutorily defined ‘responsi-

ble parties’ to recover costs incurred in cleaning up

hazardous waste disposal sites.” Mardan, 804 F.2d at 1455.

Under § 107, each such PRP! shall be liable for:

(A) all costs ... incurred by the United States

Government or a State or an Indian

tribe .. . [and]

(B) any other necessary costs of response

incurred by any other person. . .

42 U.S.C. § 9607(a)(4)(A) & (B).

Because CERCLA originally did not explicitly recog-

nize a claim for contribution, Congress amended it in

1986 to clarify and confirm that CERCLA did incorporate

such a claim. Key Tronic Corp. v. United States, 511 US.

809, 814-18, 114 S.Ct. 1960, 1965-66, 128 L.Ed.2d 797

(1994); United Tech. Corp. v. Browning-Ferris Indus., Inc., 33

F.3d 96, 100-01 (1st Cir.1994). Section 113(f) was thus

Section 107(a) sets forth specifically who is a PRP liable

under that provision. The Pinal Group concedes that its

members are PRPs under § 107(a). Our use of the term PRP, and

our opinion today, does not cover those “person[{s] otherwise

liable” under § 107(a) who can establish they are not liable by

virtue of the defenses set forth in § 107(b). See 42 U.S.C.

§ 9607(b).

App. 6

enacted, explicitly recognizing and regulating contribu-

tion claims under CERCLA.? The Pinal Group argues

that, under § 107, it is entitled to recover, jointly and

severally, the totality of its response costs from defen-

dants (the “Newmont PRPs”). The Pinal Group relies on

the language of § 107 which makes all PRPs liable for

“any .. . necessary costs of response incurred by any

other person.” 42 U.S.C. § 9607(a)(4)(B).

The Newmont PRPs counter that, even if the Pinal

Group is free to assert a claim under § 107, their liability

2 (1) Contribution

Any person may seek contribution from any

other person who is liable or potentially liable under

section [107(a)], during or following any civil action

under section [106] or under section [107(a)]. Such

claims shall be brought in accordance with this

section and the Federal Rules of Civil Procedure, and

shall be governed by Federal law. In resolving

contribution claims, the court may allocate response

costs among liable parties using such equitable

factors as the court determines are appropriate.

Nothing in this subsection shall diminish the right of

any person to bring an action for contribution in the

absence of a civil action under section [106] or section

[107].

(2) Settlement

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 matters addressed

in the settlement. Such settlement does not discharge

any of the other potentially liable persons unless its

terms so provide, but it reduces the potential liability

of the others by the amount of the settlement.

42 U.S.C. § 9613(f)(1) & (2).

es Napa ee:

‘See

App. 7

to the Pinal Group would be for contribution under the

combined effect of §§ 107 and 113. Accordingly, the New-

mont PRPs argue that the liability of each of them would

be several, and not joint, and would extend only to each

party's own equitable share of the costs incurred by the

Pinal Group. We agree.

Because all PRPs are liable under the statute, a claim

by one PRP against another PRP necessarily is for contri-

bution. A PRP’s contribution liability will correspond to

that party’s equitable share of the total liability and will

not be joint and several.* CERCLA simply does not pro-

vide PRPs who incur cleanup costs with a claim for the

joint and several recovery of those costs from other PRPs.

As discussed below, our holding today is mandated by

the text, structure, and legislative history of §§ 107 and

113, as well as by precedent.

B. Analysis

The text of § 107 leads to the conclusion that only a

claim for contribution lies between PRPs. Under the lit-

eral language of § 107, the Pinal Group, as a PRP, is partly

responsible for its cleanup costs and, as “any other per-

son” under § 107, can also hold other PRPs liable for a

portion of those same costs. This duality is best imple-

mented by permitting a PRP who has incurred cleanup

costs to assert only a contribution claim against other

3 We do not foreclose the possibility that a court could find,

after balancing the equities as required by § 113, that a

particular PRP’s equitable share of the total liability should be

zero.

App. 8

PRPs. Viewed in that way, the Pinal Group is responsible

only for that portion of the liability which it equitably

should bear anyway, while being entitled to hold other

PRPs severally liable for each of their, respective, equita-

ble shares of the total costs. That is the essence of a claim

for contribution which, albeit implicitly, is imbedded in

the text of § 107.

This conclusion — that § 107 implicitly incorporates a

claim for contribution — is unremarkable; most courts had

so held even before Congress settled the issue by enact-

ing § 113(f). Key Tronic, 511 U.S. at 809, 814-15 & 816 n. 7,

114 S.Ct. at 1960, 1965 & 1965 n. 7 (recognizing that

“numerous cases” interpreted § 107 “to impliedly autho-

rize such a cause of action”); United Tech., 33 F.3d at 100

(same); Mardan, 804 F.2d at 1457 n. 3 (same).

The legislative history behind § 113(f) also supports

the conclusion that, in enacting that provision, Congress

was only confirming and clarifying an existing claim for

contribution under § 107. H.R.Rep. No. 99-253, pt. 3, at

18-19 (1985), reprinted in 1986 U.S.C.C.A.N. 3038, 3041

(section 113 “clarifies the availability of judicial review

regarding contribution claims”); S.Rep. No. 99-11, at 43

(1985) (bill “clarifies and confirms existing law” by

adding contribution provision); see also United Tech., 33

F.3d at 100-01 (citing extensively to legislative history in

support of same proposition).

Together, §§ 107 and 113 provide and regulate a

PRP’s right to claim contribution from other PRPs. Key

Tronic, 511 U.S. at 814-18, 114 S.Ct. at 1965-66 (remedies in

§§ 107 and 113 described as “similar and somewhat over-

lapping”). The contours and mechanics of this right are

Z ve -ieiesatiecnnmmenllll

App. 9

now governed by § 113. Put another way, while § 107

created the right of contribution, the “machinery” of

§ 113 governs and regulates such actions, providing the

details and explicit recognition that were missing from

the text of § 107.

Two other circuits, as well as a number of district

courts, have explicitly agreed with our conclusion that

§§ 107 and 113 work together - the first section creating

the claim for contribution between PRPs, and the second

qualifying the nature of that claim. New Castle County v.

Halliburton NUS Corp., 111 F.3d 1116, 1122 (3d Cir.1997)

(“section 113 does not in itself create any new liabilities;

rather, it confirms the right of a[PRP] under section 107 to

obtain contribution from other [PRPs]”); United Tech., 33

F.3d at 102 n. 10; United States v. Bay Area Battery, 895

F.Supp. 1524, 1533 (N.D.Fla.1995) (“section 113(f) quali-

fies the broad cause of action created in section 107(a)”);

Boeing Co. v. Cascade Corp., 920 F.Supp. 1121, 1132

(D.Or.1996) (“[uJnder CERCLA, where a responsible

party brings a Section 107 action, Section 113 applies”)

(citing In re Dant & Russell, Inc., 951 F.2d 246, 249 (9th

Cir.1991)). The relationship between the two sections has

been aptly described, thusly:

Section 113(f), however, does not create the right

of contribution - rather the source of a contribu-

tion claim is section 107(a). Under CERCLA’s

scheme, section 107 governs liability, while sec-

tion 113(f) creates a mechanism for apportioning

that liability among responsible parties.

United States v. ASARCO, Inc., 814 F.Supp. 951, 956

(D.Colo.1993) (citations omitted).

App. 10

Our interpretation of the statute is also consistent

with our own precedent, Dant & Russell. As relevant here,

the teaching of Dant & Russell is that § 113 should be

applied to claims brought by a PRP, whenever possible.

951 F.2d at 249. In that case, a PRP, Burlington Northern,

asserted a claim against another PRP for all of the

response costs it incurred in cleaning up a particular site.

Burlington Northern argued that, because its claim was

asserted under § 107, the court could not apportion lia-

bility, but instead had to grant it the totality of its

response costs. Id. at 247 & 249. We expressly rejected that

argument. Id. at 249. Instead, we treated Burlington

Northern’s claim as one for contribution and applied

§ 113(f) to it. Id. Accordingly, we upheld an award for

approximately one-half of Burlington Northern’s

incurred cleanup costs. Id. In short, Dant & Russell fore-

closes a PRP from asserting a CERCLA claim for the

totality of its response costs.

The Pinal Group attempts to distinguish Dant &

Russell by first noting that only two PRPs were involved

in that case. It then argues that Dant & Russell recognized

a claim by a PRP for the totality of its costs under § 107

and then apportioned liability on the basis of an

unasserted contribution counterclaim brought by the

defendant PRP.

The argument does not find support in our opinion.

Perhaps recognizing as much, the Pinal Group points to a

footnote in Burlington Northern’s reply brief in that case.

In that footnote, Burlington Northern argued that we

could only apportion liability by first recognizing its

claim as one for the totality of its costs under § 107 and

then relying on our “equitable power” to recognize an

App. 11

“unasserted counterclaim in contribution” by the defen-

dant PRP. However, by apportioning liability through the

direct application of § 113(f) to Burlington Northern’s

purportedly-pure § 107 claim, we clearly chose not to rely

on that rationale. In fact, the Pinal Group’s citation of that

footnote strengthens the argument, supported by the

plain language of the opinion, that we consciously

rejected Burlington Northern’s (and the Pinal Group’s)

contention that a PRP is entitled to bring an action to

recover all of its response costs under § 107.

The majority of courts faced with this issue, in con-

texts identical to the case at bench, have also concluded

that a PRP is not entitled to recover all its response costs

from other PRPs, but instead is limited to asserting a

claim for contribution. SC Holdings, Inc. v. A.A.A. Realty

Co., 935 F.Supp. 1354, 1362-65 (D.N.J.1996) (citing Dant &

Russell and collecting other cases); see, e.g., T H Agric. &

Nutrition Co. v. Aceto Chem. Co., 884 F.Supp. 357, 360-362

(E.D.Cal.1995); Kaufman v. Unisys Corp., 868 F.Supp. 1212,

1214-16 (N.D.Cal.1994); Ciba-Geigy Corp. v. Sandoz Ltd.,

Civ. No. 92-4491, 1993 WL 668325 at *4-*7 (D.N J. Jun.17,

1993); see also Stearns & Foster Bedding Co. v. Franklin

Holding Corp., 947 F.Supp. 790, 798-801 (D.N.J.1996); Boyce

v. Bumb, 944 F.Supp. 807 (N.D.Cal.1996).

As is the case traditionally in contribution actions

between tortfeasors, CERCLA’s claim for contribution

creates several-only liability among PRPs. Accordingly,

the Pinal Group is foreclosed from imposing joint and

several liability on any of the Newmont PRPs, even with

tespect to any amount that may exceed the Pinal Group’s

own equitable share of the cleanup costs. A contrary

ais -

App. 12

approach is not supported by CERCLA’s text, is inconsis-

tent with the traditional doctrine of contribution, entails a

significant risk of producing unfair results, and runs the

risk of creating procedural chaos.

The “joint and several” approach would be contrary

to the statutory scheme created by CERCLA. If a group of

defendant-PRPs is held jointly and severally liable for the

total response costs incurred by a claimant-PRP, reduced

by the amount of claimant-PRP’s own share, those defen-

dant-PRPs would end up absorbing all of the cost attribu-

table to “orphan shares” — those shares attributable to

PRPs who either are insolvent or cannot be located or

identified. There is no statutory support for such a rule,

which would immunize the claimant-PRP from the risk of

orphan-share liability and would restrict substantially the

ability of courts to apportion costs equitably pursuant to

§ 113(f). Immunizing PRPs who have directly paid for

cleanup operations from the risk of sharing the cost asso-

ciated with orphan shares would undermine the ability of

courts to allocate costs between all PRPs “using such

equitable factors as the court determines are appropri-

ate.” 42 U.S.C. § 9613(f)(1).4 Under § 113(f)(1), the cost of

4 Of course, in equitably allocating responsibility between

PRPs, courts are free to consider, together with other relevant

factors, the fact that a PRP has itself engaged in cleanup efforts

and the circumstances surrounding those efforts. 42 U.S.C.

§ 9613(f)(1); H.R.Rep. No. 99- 253, pt. 3, at 19 (1985), reprinted in

1986 U.S.C.C.A.N. 3038, 3042 (in apportioning costs, courts may

consider “the degree of cooperation of the parties with

government officials to prevent any harm to public health or the

environment”); Central Me. Power Co. v. F.J. O'Connor Co., 838

F.Supp. 641, 646-47 (D.Me.1993) (“degree of cooperation with

government officials to prevent any harm to... the

App. 13

orphan shares is distributed equitably among all PRPs,

just as cleanup costs are.

Moreover, even a modified rule, in which the joint

and several liability of defendant-PRPs is reduced by that

portion of the orphan shares which the claimant-PRP

should equitably bear, could result “in a chain reaction of

multiple, and unnecessary lawsuits.” Ciba-Geigy, 1993 WL

668325 at *7. Such a joint and several approach would

“guarantee[_] inefficiency, potential duplication, and pro-

longation of the litigation process in a CERCLA case.” T

H Agric., 884 F.Supp. at 361.

Our holding today is consistent wit'. statements by

the Supreme Court, and by five other circuits, recogniz-

ing in contexts similar to this one, that a CERCLA claim

by a PRP against another PRP is necessarily for contribu-

tion. Key Tronic, 511 U.S. at 818 n. 11, 114 S.Ct. at 1966 n.

11 (implying that claim by a PRP under § 107 would be

“for contribution against those treated as joint

tortfeasors”); United Tech., 33 F.3d at 99 n. 8 & 100 z.

party who himself is liable [can] only seek . . . contri-

bution rather than complete indemnity”); New Castle

County, 111 F.3d at 1120 (agreeing with “conclusion

reached by [other] circuits” that an “action brought by a

[PRP] is by necessity a section 113 action for contribu-

tion”); Redwing Carriers, Inc. v. Saraland Apartments, 94

F.3d 1489, 1496 (11th Cir.1996); United States v. Colorado &

environment” is a “very important” factor “in the contribution

analysis”).

App. 14

E. R.R. Co., 50 F.3d 1530, 1536 (10th Cir.1995); Amoco Oil

Co. v. Borden, Inc., 889 F.2d 664, 672-73 (5th Cir.1989).5

In addition, three circuits have expressly rejected an

argument nearly identical to the one advanced by the

Pinal Group. In essence, those courts were faced with

attempts by “working PRPs” to circumvent the contribu-

tion provisions of § 113. As discussed in more detail

below, in those cases, the working PRP asserted a claim to

apportion costs between all PRPs. However, to avoid the

effect of § 113, the working PRP asserted that its claim

was not really a “contribution” claim controlled by § 113,

but rather a “cost recovery” claim under § 107 which, as

such, was not subject to the limiting provisions of § 113.

Likewise, the Pinal Group seeks to avoid the effect of

§ 113. By trying to obtain the totality of its costs imme-

diately (subject to subsequent contribution counter-

claims), it seeks to avoid the delay (and burden-of-proof

rules) implicit in § 113(f)’s mechanism for the equitable

allocation of costs among PRPs. In addition, by arguing

5 The Seventh Circuit has adopted an exception to the

general rule that a PRP is limited to a contribution action under

§§ 107 and 113, which excepts PRPs who have not polluted the

site in any way. Rumpke of Ind., 107 F.3d at 1241. Because the

Pinal Group consists of parties who are admittedly partly

responsible for the contamination at issue here, that exception

would not apply to this case. We, therefore, do not reach that

issue.

6 A “working PRP” is a convenient label for a PRP that

actually conducts cleanup operations, as opposed to one that

reimburses a third party for the cost of the latter’s cleanup

efforts. The First Circuit has referred to costs incurred by a non-

working PRP as “reimbursed costs” and to costs incurred by a

working PRP as “first instance costs.” United Tech., 33 F.3d at 97.

Oe RR Ee eM

App. 15

for joint and several liability, the Pinal Group attempts to

avoid bearing any part of the cost attributable to orphan

shares; however, § 113(f) mandates the equitable alloca-

tion of all costs among PRPs, without establishing any

special per se rules.

Both the Seventh and Tenth Circuits rejected a work-

ing PRP’s attempt to avoid the effect of § 113(f)(2) by

rejecting the argument that the PRP’s claim was governed

exclusively by § 107. Colorado & E. R.R., 50 F.3d at

1534-36; Akzo Coatings, Inc. v. Aigner Corp., 30 F.3d 761,

764 (7th Cir.1994) (citing Dant & Russell). Section 113(f)(2)

provides that a party who has settled with the govern-

ment is immune from “contribution” suits regarding mat-

ters addressed in the settlement. 42 U.S.C. § 9613(f)(2).

The working PRPs in Colorado & E. R.R. and Akzo tried

unsuccessfully to hold liable a PRP who had settled with

the government by arguing that § 113(f)(2) did not apply

because their claim was for “cost recovery” under § 107,

not for “contribution” under § 113(f). Colorado & E. R.R.,

50 F.3d at 1536; Akzo, 30 F.3d at 764.

Similarly, in United Technologies, 33 F.3d at 101-03, the

First Circuit rejected a working PRP’s attempt to avoid

the statute of limitations that applies to contribution

actions. Section 113(g)(3) establishes a three-year statute

of limitations for “contribution” actions, while § 113(g)(2)

generally establishes a six-year statute of limitations for

“cost recovery” actions brought under § 107. 42 U.S.C.

§ 9613(g). The PRP in United Technologies argued that only

claims seeking apportionment of reimbursed costs are

“contribution” claims subject to the shorter period of

§ 113(g)(3) and that, since its claim sought apportionment

App. 16

of first-instance costs, it really was asserting a cost recov-

ery action subject to the longer limitation period of

§ 113(g)(2). As did the Seventh and Tenth Circuits, the

First Circuit rejected this artificial distinction between

working and non-working PRPs and applied the three-

year statute of limitations to the working PRP’s claim.

United Tech., 33 F.3d at 101-03.

Finally, we address three additional arguments

advanced by the Pinal Group. First, it contends that our

holding would hamper CERCLA’s policy of promoting

rapid and voluntary environmental responses by private

parties to the threat posed by hazardous waste sites. We

reject this argument because it is based on policy consid-

erations which we cannot consider in light of the control-

ling text, structure, and logic of CERCLA and of our own

precedent in Dant & Russell.

In any event, we are not convinced that the policy of

promoting rapid voluntary cleanups would be under-

mined to any significant degree by our holding. As dis-

cussed above, courts may take into account the degree of

cooperation shown by a PRP when equitably allocating

liability among PRPs under § 113(f)(1). See 42 U.S.C.

§ 9613(f)(1); H.R.Rep. No. 99-253, pt. 3, at 19 (1985),

reprinted in 1986 U.S.C.C.A.N. 3038, 3042; Central Me.

Power, 838 F.Supp. at 646-47 (“degree of cooperation” is a

“very important” factor “in the contribution analysis”). In

addition, other incentives exist for PRPs to conduct

cleanup operations promptly. For example, a PRP who

(like the Pinal Group) conducts business at a contami-

nated site would, by engaging in cleanup operations

itself, protect its on-going operations and be better able to

App. 17

control its cleanup costs, than if it waited for the govern-

ment to intervene.

Second, the Pinal Group argues that our holding

would result in the absence of a statute of limitations for

a contribution action by a PRP who incurs response costs

without governmental action in the form of a settlement,

an order, a consent decree, or a judgment. The Pinal

Group notes that § 113(g)(3) establishes a three-year lim-

itations period for contribution actions, but that the pro-

vision uses as triggering dates events which would not

occur when the cleanup proceeds without prior coercive

government action. It then argues that the other limita-

tions provision would not apply to such claims either

because they are contribution claims and § 113(g)(2)

applies only to the “recovery of costs referred to in sec-

tion [107].” 42 U.S.C. § 9613(g)(2).

No statute of limitations issue is before us in this case

and we decline the Pinal Group’s invitation to opine on it

indirectly. Suffice it to say that the federal courts are often

faced with determining which statute of limitations gov-

erns claims created by Congress. See, e.g., Wilson v. Garcia,

471 U.S. 261, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985) (bor-

rowing analogous state statute of limitations for 42 U.S.C.

§ 1983 claim); DelCostello v. International Bhd. of Teamsters,

462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983) (bor-

rowing federal statute of limitations for claims of breach

of collective bargaining agreement). The court directly

faced with the issue must determine whether § 113(g)(3),

§ 113(g)(2), or some other statute should apply. See United

Tech., 33 F.3d at 99 n. 8 (expressing uncertainty as to

which of the two periods would apply in this context).

However, the need eventually to choose which statute of

App. 18

limitations governs contribution claims certainly should

not drive our interpretation of the substantive provisions

of CERCLA.”

Third, the Pinal Group argues that, if not allowed to

bring a “cost recovery” claim for the totality of its

cleanup costs, it would be left with no claim to assert

against the Newmont PRPs. The Pinal Group asserts it

would not be entitled to assert a contribution claim under

§ 113(f) against the Newmont PRPs because it has not

incurred any liability which would trigger such an action.

Specifically, it contends that the requisite liability only

attaches if the government incurs response costs, arguing

that before then, no liability exists under § 107(a), and

that the Pinal Group’s status as a PRP, by itself, does not

give rise to a claim for contribution.

We reject this argument because it is wrong as well as

internally inconsistent. As the Newmont PRPs have con-

ceded, the Pinal Group is entitled to assert a contribution

claim here. Although it is true that PRP status, by itself,

does not generate liability, the Pinal Group ignores the

“necessary costs of response incurred by [it] consistent

with the national contingency plan.” 42 U.S.C. § 9607(a).

Prior to its expenditure, the Pinal Group was not yet

7 We also note that the Pinal Group’s argument is based on

the incorrect premise that a contribution action is not brought

under § 107. Thus, the choice presented by this premise,

between a contribution action created and governed exclusively

by § 113, on the one hand, and an independent “cost recovery

action” available to working PRPs exclusively under § 107, on

the other, is a false one. As we have concluded above, a PRP’s

contribution action finds implicit recognition in § 107; § 113

merely regulates its implementation.

}

App. 19

liable because no one, not the government, not any other

PRPs or any non-PRP private parties, had yet incurred

any costs under § 107.

However, once the Pinal Group undertook those

“necessary costs of response,” it, along with all PRPs

associated with the Pinal Creek site, became partly

responsible for those costs.8 This resulted in a situation

where all PRPs, including the Pinal Group, bear some

responsibility for those cleanup costs. Under § 107, the

Pinal Group’s responsibility for its own equitable share of

the cleanup costs is generated independently of any lia-

bility that might arise from response costs incurred by the

government. Kaufman, 868 F.Supp. at 1214-16 (contribu-

tion action recognized in circumstances identical to those

present here); Ciba-Geigy, 1993 WL 668325 at *4-*7 (same);

Cf. United Tech., 33 F.3d at 99 n. 8 (suggesting that “a PRP

who spontaneously initiates a cleanup without govern-

mental prodding might be able to pursue an implied right

of action for contribution”). :

The argument also is inconsistent with the Pinal

Group’s own position that, after recovering its cleanup

costs from the Newmont PRPs under § 107, the Newmont

PRPs would have a contribution counterclaim against the

Pinal Group under § 113(f). The Pinal Group fails to

explain how contribution can lie in one direction, but not

the other, or how it, while not liable before recovering

® In admitting that the Newmont PRPs would have a

contribution claim against it, should it be able to recover its

entire cleanup costs, the Pinal Group acknowledges explicitly

that it is partly responsible for the cleanup costs incurred by it.

App. 20

from the Newmont PRPs, becomes liable after said recov-

ery. By its nature, contribution only occurs between co-

liable parties and flows in either direction, depending on

which co-liable party has paid more than its fair share.

Satisfaction of the cost recovery claim by the Newmont

PRPs cannot make the Pinal Group liable (and thus sub-

ject to a contribution counterclaim) if it previously were

not liable (and thus not able to assert a contribution

claim).

Of course, this inconsistency disappears when it is

recognized that the Pinal Group initially does have a

contribution claim under §§ 107 and 113. Kaufman, 868

F.Supp. at 1214-16 (contribution action recognized in cir-

cumstances identical to those present in instant case);

Ciba-Geigy, 1993 WL 668325 at *4-*7 (same).

II. CONCLUSION

Because a claim asserted by a PRP under § 107

requires the application of § 113, a PRP is limited to a

contribution claim governed by the joint operation of

§§ 107 and 113. Therefore, we hold that, under CERCLA,

a PRP does not have a claim for the recovery of the

totality of its cleanup costs against other PRPs, and a PRP

cannot assert a claim against other PRPs for joint and

several liability.

The judgment of the district court, denying defen-

dants’ motion to dismiss plaintiff’s “First Claim for

Relief,” is therefore reversed, and the case is remanded

App. 21

with instructions to grant that motion and for further

proceedings consistent with this opinion.

REVERSED and REMANDED.

° The district court also denied a motion filed by some of

the defendants for judgment on the pleadings as to plaintiff's

First Claim for Relief. Because we conclude that this claim

should have been dismissed, it is unnecessary to address the

denial of the motion for judgment on the pleadings as to that

claim.

App. 22

APPENDIX B

The PINAL CREEK GROUP, consisting of

Cyprus Miami Mining Corporation, Inspira-

tion Consolidated Copper Company, and

Magma Copper Company, Plaintiffs,

NEWMONT MINING CORPORATION,

et al., Defendants.

CIV-91-1764-PHX-ROS.

United States District Court,

D. Arizona.

March 27, 1996.

Potentially responsible parties (PRPs) under Compre-

hensive Environmental Response, Compensation and Lia-

bility Act (CERCLA) brought action against present and

former owners or operators of mining facilities, seeking

to recover under CERCLA and under state law expendi-

tures involved in remediating groundwater contamina-

tion. On defense motions to dismiss and for judgment on

pleadings, the District Court, Silver, J., held that: (1) PRPs

had standing to bring claims under CERCLA’s cost recov-

ery provision, and were not limited to actions for contri-

bution; (2) PRPs had standing to bring cost recovery

claim under state statute providing that “any other per-

son” in addition to state could bring action to recover

remediation costs; and (3) corporate PRP was not inap-

propriately attempting to pierce its own corporate veil in

connection with its claims against successor of corpora-

tion which once held interest in corporate PRP.

Motions denied.

App. 23

Charles J. Muchmore, Nicholas J. Wallwork,

Muchmore & Wallwork PC, Phoenix, AZ, for Pinal Creek

Group.

Gerald S. Maltz, Miller Pitt & McAnally PC, Tucson,

AZ, Shane Ray Swindle, Karl M. Tilleman, Dalton Gotto

Samson & Kilgard PLC, Phoenix, AZ, Scott W. Rodgers,

Osborn Maledon, PA, Phoenix, AZ, for Newmont Mining

Corporation.

Michael P. Berman, John Dunning Titus, Lowe &

Berman PA, Phoenix, AZ, for Occidental Petroleum Corp.

and Canadianoxy Offshore Production Co.

Steven B. Weatherspoon, Chandler Tullar Udall &

Redhair, Tucson, AZ, Michael John Gallagher, Davis

Graham & Stubbs, Denver, CO, Sherry Marie Purdy,

Atlantic Richfield Co., Denver, CO, for Atlantic Richfield

Company.

John Marquette Rochefort, Patrick Ward Dennis,

Michael David Young, Tiffany R. Hedgpeth, McClintock

Weston Benshoof Rochefort Rubalcava & MacCuish, Los

Angeles, CA, for Phelps Dodge Corp.

ORDER

SILVER, District Judge.

The Pinal Creek Group (“Plaintiffs”) filed this action

to recover expenditures involved in remediating ground-

water contamination in the Pinal Creek drainage basin in

Gila County, Arizona. Plaintiffs’ Second Amended Com-

plaint (“Complaint”) contains three counts: Count I - cost

recovery and declaratory relief pursuant to Section 107 of

App. 24

the Comprehensive Environmental Response, Compensa-

tion and Liability Act of 1980 (“CERCLA”), 42 U.S.C.

§ 9607; Count II — cost recovery and declaratory relief

under the Arizona Environmental Quality Act, A.R.S.

§ 49-285; and Count III - contribution pursuant to Section

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

The following motions are pending before the Court:

Defendant ARCO’s Motion to Dismiss Plaintiffs’ Cost

Recovery Claims,! Defendants Newmont Mining Corpo-

ration, Occidental Petroleum Corporation, and Cana-

dianOxy Offshore Production Company’s Motion for

Judgment on the Pleadings as to Plaintiffs’ Cost Recovery

Claims, and Defendant ARCO’s Motion to Dismiss Inspi-

ration’s Contribution Claim. Having considered the par-

ties’ briefs and oral arguments, the Court denies these

motions.

Factual Background

The Pinal Creek drainage basin is located near the

towns of Globe and Miami, Arizona. Mining and mineral

processing activities have occurred in the Globe-Miami

area since approximately 1883. These activities resulted in

the production of hazardous substances, which have con-

taminated the groundwater in the shallow aquifer under-

lying Pinal Creek. Left unabated, the contaminated

groundwater could reach the perennially flowing seg-

ment of Pinal Creek, and then the Salt River, and from

1 All other Defendants have joined ARCO’s cost recovery

motion.

App. 25

there Roosevelt Lake, a major water source for residents

of Maricopa County.

On May 8, 1989, the Director of the Arizona Depart-

ment of Environmental Quality (“ADEQ”) executed a

Decision Record authorizing the use of monies from the

Arizona Water Quality Assurance Revolving Fund “for

Purposes related to the investigation and remediation of

the Pinal Creek site,” in accordance with the Arizona

Environmental Quality Act, A.R.S. §§ 49-281 to 49-287.

The Decision Record states that this action was taken in

response to “contamination of groundwater with acid

mine drainage, containing acids and heavy metals, in the

Pinal Creek Area.”

On November 20, 1989, Plaintiff Cyprus Miami Min-

ing Company (“Cyprus”) provided ADEQ with a pro-

posed interim Remedial Action Plan (“RAP”) describing

preliminary measures for responding to the contamina-

tion. ADEQ approved the RAP in May 1990.

On May 17, 1990, Cyprus entered into a “Group

Agreement” with Plaintiffs Magma Copper Company and

Inspiration Consolidated Copper Company, pursuant to

which the “Pinal Creek Group” was formed and the

individual group members agreed to share remediation

costs. With the approval and under the Oversight of

ADEQ, Plaintiffs began implementing the RAP. incurring

costs relating to sampling and analytical tests and ser-

vices, time of Group personnel, costs of expert consul-

tants, legal representation, identification of potentially

responsible parties, investigation, and reimbursement of

ADEQ for oversight costs. Plaintiffs have spent more than

App. 26

$1 million.? They will continue to incur response costs,

possibly running into the millions of dollars, arising out

of the cleanup.

ADEQ has asked Defendants — who, like Plaintiffs,

presently or in the past have owned or operated mining

facilities in the Pinal Creek area — to participate in the

cleanup and reimburse ADEQ for investigative and over-

sight costs. To date, Defendants have refused to partici-

pate in the cleanup or reimburse the state.

Plaintiffs filed this action on November 5, 1991.

Defendants asserted contribution counterclaims pursuant

to 42 U.S.C. 9613(f).

Governing Legal Principles

In considering a motion to dismiss for failure to state

a claim upon which relief can be granted, all factual

allegations in the complaint are taken as true and all

reasonable inferences are drawn in the plaintiff's favor.

Iolab Corp. v. Seaboard Sur. Co., 15 F.3d 1500, 1504 (9th

Cir.1994). A complaint may be dismissed pursuant to

Fed.R.Civ.P. 12(b)(6) only if the plaintiff can prove no set

of facts which would entitle it to relief. Conley v. Gibson,

355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957).

Similarly, in considering a motion for judgment on

the pleadings, all factual allegations in the nonmovant’s

2 Plaintiffs allege that these costs were incurred in a

manner consistent with the National Contingency Plan

established by the United States Environmental Protection

Agency (“EPA”) pursuant to 42 U.S.C. § 9607(a)(4)(B), and

consistent with the rules and procedures adopted by ADEQ

under A.R.S. § 49-282(E).

App. 27

pleadings are assumed to be true and all contravening

assumptions in the movant’s pleadings are taken to be

false. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896

F.2d 1542, 1550 (9th Cir.1989). Judgment on the pleadings

is proper where the moving party clearly establishes on

the face of the pleadings that no material issue of fact

remains to be resolved and that it is entitled to judgment

as a matter of law. Id.

Standing to Assert Cost Recovery Claims

Defendants’ cost recovery motions turn on the reso-

lution of a hotly-debated legal question: May Plaintiffs,

who are potentially responsible for groundwater contam-

ination in the Pinal Creek basin, proceed under

CERCLA’s cost recovery provision, Section 107 (codified

as 42 U.S.C. § 9607), or are they limited to an action for

contribution pursuant to Section 113(f) (codified as 42

U.S.C. § 9613(f))?3

The resolution of this issue will have a significant

impact on this litigation. Under Section 107, liability is

* This issue is the subject of a pending appeal in the Ninth

Circuit from a case in the Central District of California. National

American Railroad Passenger Corp. v. BP] Int'l, et al., U.S. Court of

Appeals Docket No. 95-56734, Lower Court Docket No.

CV-92-2818-WMB. The Ninth Circuit scheduling order indicates

that briefing will not be complete until May 1996. Presumably, a

decision will not be rendered for several months thereafter.

Plaintiffs and Defendants have urged the Court to resolve the

issue now rather than await a decision from the Ninth Circuit.

The parties argued, in part, that the Ninth Circuit’s decision

may not be controlling, because the facts of the instant dispute

vary from those before the appellate court. Accordingly, the

Court agreed to hear argument and rule on the motions.

App. 28

joint and several, the range of possible defenses is

sharply limited, and the statute of limitations is six years.

In contrast, under Section 113(f), liability is several only,

an array of equitable defenses are permitted, and the

limitations period is three years.

To resolve the parties’ dispute, the Court will first

provide an overview of CERCLA’s text and history. The

Court will then summarize the parties’ contentions and

evaluate them according to CERCLA’s text, policies and

other important factors.

I CERCLA Overview

CERCLA Section 107(a)(4)(A) provides a cause of

action for the government and Indian tribes to recover

costs incurred in responding to environmental contam-

ination. Section 107(a)(4)(B) allows the recovery of “any

other necessary costs of response incurred by any other

person consistent with the national contingency plan...”

(Emphasis added.) The latter provision creates an implied

cause of action for private parties to seek recovery of

cleanup costs. Key Tronic Corp. v. United States, 511 U.S.

809, __, 114 S.Ct. 1960, 1966, 128 L.Ed.2d 797 (1994).

A cost recovery action under either provision may be

brought against any potentially responsible party

(“PRP”), defined as a party falling into one of the follow-

ing classes: (1) the owner and operator of the facility; (2)

any person who owned or operated the facility at the

time of disposal of any hazardous substance; (3) any

person who by ‘contract, agreement, or otherwise

arranged for disposal or treatment of hazardous sub-

stances owned or possessed by that person; and (4) any

App. 29

person who accepted any hazardous substances for the

transport to disposal or treatment sites selected by that

person. 42 U.S.C. § 9607(a)(1)-(4).

Cost recovery actions are subject only to three enu-

merated defenses: (1) an act of God; (2) an act of war; (3)

an act or omission of a third party. 42 U.S.C.

§ 9607(b)(1)-(4). See Velsicol Chem. Corp. v. Enenco, Inc., 9

F.3d 524, 530 (6th Cir.1993) (equitable defenses do not

apply to Section 107 actions because Congress explicitly

limited available defenses to those provided in Section

107(b)).

Section 107 defendants are strictly liable — that is,

liability may be imposed without proof of causation — if

there was a release or threat of release of a hazardous

substance at a facility and a person incurred necessary

response costs consistent with the National Contingency

Plan. 42 U.S.C. § 9607(a); 42 U.S.C. § 9601(32); United

States v. Monsanto Co., 858 F.2d 160, 167 (4th Cir.1988),

cert. denied, 490 U.S. 1106, 109 S.Ct. 3156, 104 L.Ed.2d 1019

(1989).

The scope of PRP liability is not defined by the text of

Section 107. The legislative history, however, indicates

that the federal courts should establish a uniform rule of

liability in accordance with “traditional and evolving

principles of law.” United States v. Chem-Dyne Corp., 572

F.Supp. 802, 806-807 (S.D.Ohio 1983) (quoting statement of

Rep. Florio, CERCLA’s sponsor in the United States

House of Representatives) (reprinted in 126 Cong.Rec.

H11787 (Nov. 24, 1980)). With near unanimity, courts have

found that section 107 liability is joint and several unless

the defendant can demonstrate that the harm is divisible.

App. 30

E.g., United States v. Alcan Aluminum Corp., 964 F.2d 252,

268-69 (3d Cir.1992).

To alleviate the potentially unfair burden that joint

and several liability may cause, courts in CERCLA’s early

years created an implied cause of action for contribution.

E.g., United States v. South Carolina Recycling and Disposal,

Inc., 653 F.Supp. 984, 995 n. 8 (D.S.C.1984). This allowed

defendants to sue other parties to obtain an equitable

allocation of the costs of an environmental cleanup.

Congress codified the right of contribution in the Super-

fund Amendments and Reauthorization Act of 1986

(“SARA”), Pub.L. No. 99-499, 100 Stat. 1613 (1986) (codified

in scattered sections of 42 U.S.C.). The contribution provi-

sion, CERCLA Section 113(f), provides in pertinent part:

Any person may seek contribution from any

other person who is liable or potentially liable

under section 9607(a) of this title, during or

following any civil action . . . under section

9607(a) of this title... . In resolving contribution

claims, the court may allocate response costs

among liable parties using such equitable fac-

tors as the court determines are appropriate.

Nothing in this subsection shall diminish the

right of any person to bring an action for contri-

bution in the absence of a civil action under...

section 9607 of this title.

42 U.S.C. § 9613(f). The House Energy and Commerce

Committee report states: “This section clarifies and con-

firms the right of a person held jointly and severally

liable under CERCLA to seek contribution from other

potentially liable parties, when the person believes that it

has assumed a share of the cleanup or cost that may be

greater than its equitable share under the circumstances.”

H.R.Rep. No. 253, 99th Cong., 2d Sess., pt. 1, at 79,

App. 31

reprinted in 1986 U.S.C.C.A.N. 2835, 2861 (citing United

States v. South Carolina Recycling and Disposal, Inc., supra ).

Instead of clarifying and confirming the right of con-

tribution, however, these amendments “ignited a fire-

storm” of litigation and judicial controversy. Ann

Alexander, Standing Under Superfund §§ 107 and 113:

Avoiding the Error of the Blind Man and the Elephant, Toxics

L.Rptr. (BNA) 155 (July 12, 1995) (hereinafter Standing

Under Superfund). The chief source of this controversy

was the fact that the amendments added several new

provisions to CERCLA - including Section 113 - without

specifically clarifying their relationship to Section 107. Id.

One of the most frequently litigated issues arising from

this controversy concerns the problem of PRP standing

under section 107.4

II. The Parties’ Contentions

Defendants argue that Plaintiffs lack standing to

bring a cost recovery action pursuant to Section

107(a)(4)(B). They contend that the cost recovery action,

with its judicially-fashioned provision for joint and sev-

eral liability, was intended for use only by governmental

* Interpretational problems involving various provisions in

CERCLA confronted the federal courts even before the

enactment of the SARA amendments. E.g., United States v.

Mottolo, 605 F.Supp. 898, 902 (D.N.H.1985) (recognizing that

“CERCLA has acquired a well-deserved notoriety for vaguely

drafted provisions and an indefinite, if not contradictory,

legislative history”). These problems stem, in part, from the fact

that the enacted version of CERCLA was the result of several

last- minute legislative compromises. See Walls v. Waste Resource

Corp., 761 F.2d 311, 318 (6th Cir.1985).

App. 32

and “innocent” private parties. Because Plaintiffs are

potentially responsible parties, they should not be

allowed to impose joint liability upon other PRPs.

Instead, their action should be recognized for what it is —

a “quintessential” claim for contribution arising under

CERCLA Section 113(f).

Plaintiffs argue that the plain language of Section 107

“ not “any innocent person,”

to bring a cost recovery action, so long as that person has

incurred cleanup costs. They contend that this position is

consistent with the language and policies of CERCLA.

authorizes “any . . . person,

lll. Discussion

An examination of the statutory language, policy,

and case law demonstrates that Plaintiffs have standing

under Section 107.

A. Statutory Text

The Court begins its task of interpreting CERCLA

Section 107(a)(4)(B) by reviewing two critical cannons of

statutory interpretation. First, in interpreting a statutory

provision, a court must look to the statute’s plain lan-

guage. Caminetti v. United States, 242 U.S. 470, 485, 37

S.Ct. 192, 194, 61 L.Ed. 442 (1916). Where the language of

the statute is plain and unambiguous on its face, “the sole

function of the courts is to enforce it according to its

terms.” Id. See also United States v. Behnezhad, 907 F.2d 896,

898 (9th Cir.1990).

Second, when a court is construing a remedial stat-

ute, it must construe the statutory language broadly in

App. 33

order to give effect to the statute’s remedial purposes.

See, e.g., Wilshire Westwood Assocs. v. Atlantic Richfield

Corp., 881 F.2d 801, 803 (9th Cir.1989) (courts are obli-

gaied to construe CERCLA provisions liberally because it

is a remedial statute designed to protect and preserve

public health and the environment).

The plain language of CERCLA’s private party stand-

ing provision, 42 U.S.C. § 9607(a)(4)(B), clearly and

unequivocally grants standing to “any . . . person” who

has incurred necessary response costs consistent with the

National Contingency Plan. The text does not read “any

innocent person.”

Likewise, the provision conferring standing upon

governmental and tribal entities creates no distinction

between innocent and non-innocent plaintiffs. See 42

U.S.C. § 9607(a)(4)(A). Given the parallel language of

these provisions, it would be anomalous to suggest that

Congress intended to limit private party standing to

“innocent” plaintiffs, while permitting standing for inno-

cent and non-innocent governmental plaintiffs.5

° Defendants argue that governmental entities are treated

differently, because, as “enforcers” of the law, they are entitled

to bring cost recovery actions regardless of culpability.

Defendants cite no case authority for this proposition. The

Court, however, has located a case that explicitly rejects this

argument. See Town of Wallkill v. Tesa Tape Inc., 891 F.Supp. 955,

960 (S.D.N.Y.1995) (even if a potentially responsible plaintiff

was not a governmental entity, it still would be able to seek joint

and several liability for response costs under section 107). Like

the Southern District of New York, this Court refuses to rewrite

section 107 by carving out a distinction between governmental

and private party plaintiffs.

App. 34

Similarly, the enumerated defenses set forth in Sec-

tion 107(b) make no distinction between innocent and

non-innocent plaintiffs, and courts have consistently held

that the narrow language of Section 107(b) precludes

defenses based on a plaintiff’s status as a potentially

responsible party. See General Electric Co. v. Litton Indus.

Automation Sys., Inc., 920 F.2d 1415, 1418 (8th Cir.1990)

(“CERCLA does not provide for an ‘unclean hands’

defense”), cert. denied, 499 U.S. 937, 111 S.Ct. 1390, 113

L.Ed.2d 446 (1991); Hassayampa v. State of Arizona, No.

CIV 89-0188 PHX RCB, 1989 WL 248273, at *10-11, 1989

U.S.Dist. LEXIS 17411, at *27-29 (D.Ariz. Dec. 27, 1989)

(rejecting unclean hands defense).

In light of the explicit language of Section 107, this

Court finds that Section 107 confers standing upon any

party who has incurred response costs — regardless of

culpability. See Bethlehem Iron Works, Inc. v. Lewis Indus-

tries, Inc., 891 F.Supp. 221, 225 (E.D.Pa.1995) (plain lan-

guage of Section 107 indicates that Congress intended

cost recovery standing to sweep broadly). The plain lan-

guage of the statute draws no distinction between inno-

cent and non-innocent plaintiffs, or between public and

private plaintiffs; ie only distinction drawn is that

between parties whv have incurred response costs and

those who have not.

Nothing in the SARA amendments explicitly quali-

fies the plain language of Section 107. Section 113(f)(1)

provides a right of contribution for private parties. How-

ever, this section does not provide that contribution is the

exclusive remedy for potentially liable parties. Id. at 225.

App. 35

This conclusion is supported by a comparison of the

statutes of limitations for cost recovery and contribution

actions added by the SARA amendments. The three-year

statute of limitations for contribution claims begins to run

on the date of judgment, administrative order, or entry of

a judicially-approved settlement concerning costs or

damages. 42 U.S.C. § 9613(g)(3). In contrast, the six-year

statute of limitations for a claim to recover remediation

costs begins to run after initiation of physical on-site

construction. 42 U.S.C. § 9613(g)(2). If parties who volun-

tarily clean up are limited to suing under Section 113(f), it

would appear that no statute of limitations applies to

them. Bethlehem Iron Works, 891 F.Supp at 225. This statu-

tory anomaly suggests that the SARA amendments do not

bar PRPs from pursing [sic] cost recovery claims.®

® Defendants argue that, under Plaintiffs’ interpretation of

the statute, the three year statute of limitations for contribution

actions would be swallowed by the longer limitations period for

cost recovery actions. Several courts have endorsed this

argument. E.g., United Technologies Corp. v. Browning-Ferris

Indus., Inc., 33 F.3d 96, 101 (1st Cir.1994), cert. denied, re

— 115 S.Ct. 1176, 130 L.Ed.2d 1128 (1995).

This argument was convincingly answered in United States

v. J.M. Taylor, 909 F.Supp. 355, 365 (M.D.N.C.1995), where the

court stated:

Section 113(g)(3) clearly contemplates that a party

bringing a contribution action will have been

subjected to a judgment or a court approved

settlement. . . . However, a PRP which conducts an

environmenta! cleanup will not necessarily have

suffered a judgment or court approved settlement

and, thus, cannot bring a contribution action — and

this includes one subjected to a Section 106

administrative order. A party which completes a

App. 36

Furthermore, substantial weight should be given to

the fact that Congress expressly intended Section 113 to

confirm preexisting case law. That case law generally

interpreted Section 107 broadly to afford a cause of action

to liable and non-liable parties alike.’

Defendants argue that allowing Plaintiffs Section 107

standing would frustrate contribution protection, a provi-

sion added by the SARA amendments to protect persons

who have settled with the government from contribution

claims regarding matters addressed in the settlement. 42

removal or remedial action as referenced in Section

113(g)(2) arguably needs the extra time of the six-year

period because it is busy doing the cleanup. On the

other hand, a party which has incurred fixed liability

would arguably need only the shorter three-year

period from the time such liability was imposed.

The Taylor court correctly perceived that an action for

contribution must be preceded by a judgment, settlement or

administrative order which fixes a party’s total liability. This

statutory prerequisite means that the three-year statute of

limitations for contribution actions will not necessarily be

consumed by allowing non-innocent parties to sue under

section 107.

7 See Wickland Oil Terminals v. Asarco, Inc., 792 F.2d 887,

889-90 (9th Cir.1986) (allowing potentially responsible party to

bring cost recovery suit under section 107). Accord, NL Indus. v.

Kaplan, 792 F.2d 896, 897-98 (9th Cir.1986); United States v. New

Castle County, 642 F.Supp. 1258, 1264 (D.Del.1986); Pinole Point

Properties v. Bethlehem Steel Corp., 596 F.Supp. 283, 290

(N.D.Cal.1984); United States v. Ward, No. 83-63-CIV-5, 1984 WL

15710, at *1-2 (E.D.N.C. May 14, 1984); Bulk Distribution Ctrs.,

Inc. v. Monsanto Co., 589 F.Supp. 1437, 1443 (S.D.Fla.1984); Jones

v. Inmont Corp., 584 F.Supp. 1425, 1428-29 (S.D.Ohio 1984); City

of Philadelphia v. Stepan Chemical Co., 544 F.Supp. 1135, 1143

(E.D.Pa.1982).

App. 37

U.S.C. § 9613(f)(2). Defendants contend that Plaintiffs

might abuse this provision by settling with the govern-

ment for the entire cost of the cleanup, thereby insulating

themselves from Defendants’ contribution counterclaims.

Early settlement, however, does not constitute an

abuse of the statute. Instead, prompt settlement is pur-

posefully encouraged by CERCLA’s regulatory scheme,

which subjects non-settling parties to the risk of dispro-

portionate liability. See Atlantic Richfield Co. v. American

Airlines, Inc., 836 F.Supp. 763, 775 (N.D.Okla.1993) (risk of

disproportionate liability created by contribution protec-

tion creates strong incentives for early or universal settle-

ment). See also United States v. Cannons Eng’g Corp., 899

F.2d 79, 89 (1st Cir.1990) (“rewarding PRPs who settle

sooner rather than later is completely consonant with

CERCLA’s makeup”); Arizona ex rel. Woods v. Nucor Corp.,

825 F.Supp. 1452, 1463 (D.Ariz.1992) (risk of excess lia-

bility is integral part of CERCLA), aff'd, Arizona v. Compo-

nents Inc., 66 F.3d 213 (9th Cir.1995).

Moreover, any potential for abuse emanating from a

settlement between Plaintiffs and the government is sub-

stantially mitigated by the fact that any settlement must

be approved by the Court. City of New York v. Exxon, 697

F.Supp. 677, 692 (S.D.N.Y.1988) (court must review settle-

ments for fairness, reasonableness, and consistency with

the Constitution and the mandate of Congress).

Based on the foregoing analysis, the Court refuses to

engraft the word “innocent” onto the Phrase “any .. .

person” set forth in Section 107(a)(4)(B). This decision is

supported by an analysis of CERCLA policy and case law,

to which the Court now turns.

App. 38

B. CERCLA Policy

Courts have characterized CERCLA’s goals as two-

fold: encouraging the prompt and voluntary cleanup of

hazardous wastes; and imposing the costs of cleanup on

responsible parties. E.g., Wickland Oil Terminals v. Asarco,

Inc., 792 F.2d 887, 891 (9th Cir.1986); Bethlehem Iron Works,

891 F.Supp. at 225; United States v. SCA Services of Indiana,

Inc., 849 F.Supp. 1264, 1284 (N.D.Ind.1994).§

Under Plaintiffs’ reading of Section 107, potentially

responsible plaintiffs who initiate an environmental

cleanup may sue for cost recovery and initially shift the

cost of the cleanup to other PRPs. See United States v.

Kramer, 757 F.Supp. 397, 416 (D.N.J.1991) (under Section

107 a PRP may “go in, clean up the mess, pay the bill, then

collect all its costs not inconsistent with the NCP from

other responsible parties”). Where plaintiffs are also liable

parties, however, defendants may assert counterclaims

pursuant to Section 113(f), ensuring that plaintiffs do not

escape from paying an equitable share of the cleanup cost.

Id. at 416 (“Any PRP is entitled under Section 113 to bring

a contribution action against other PRPs - including the

PRP who previously cleaned up the mess and was paid for

its trouble through a Section 107 proceeding — to apportion

costs equitably among all the PRPs.”).

This two-step framework satisfies both of CERCLA’s

goals: it provides an array of incentives for private par-

ties to initiate prompt environmental cleanups; and it

8 See also Velsicol Chem. Corp. v. Enenco, Inc., 9 F.3d 524, 529

(6th Cir.1993) (noting that “the legislative history underlying

SARA echoes the recurring theme of facilitating prompt

cleanups with greater force than that underlying CERCLA’s

original enactment in 1980.”).

App. 39

ensures that cleanup costs will be equitably allocated

among responsible parties.

Specifically, allowing PRPs to proceed under Section

107 creates several incentives for early cleanup and settle-

ment. These incentives include: (1) shifting the difficult

burden of proof concerning the allocation of cleanup costs

from plaintiffs to defendants; (2) relieving plaintiffs of the

risk of being held liable for “orphan shares” — cleanup

costs that would otherwise be charged to insolvent or

absent parties; (3) minimizing plaintiffs’ transaction costs

involved in tracking down and suing every PRP; (4) limit-

ing the range of available defenses to those enumerated in

Section 107(b); and (5) giving parties who initiate cleanups

the benefit of a longer statute of limitations. See United

States v. Atlas Minerals & Chems., Inc., No. 91-5118, 1995

WL 510304, at *99, 1995 U.S.Dist. LEXIS 13097, at *222

(E.D.Pa. Aug. 22, 1995); Allied Corp. v. Acme Solvents

Reclaiming, Inc., 691 F.Supp. 1100, 1118 (N.D.111.1988), over-

ruled sub silentio by Akzo Coatings v. Aigner Corp., 30 F.3d

761 (7th Cir.1994). In combination, these factors provide

private parties with strong incentives to initiate voluntary

cleanups of hazardous waste sites.

These incentives work in tandem with disincentives

targeted at PRPs who resist Participating in cleanups or

settlements. Illustratively, in Atlantic Richfield Co., 836

F.Supp. at 775 (“ARCO”), the court permitted ARCO, the

plaintiff in a cost recovery action, to impose joint and

several liability upon certain defendants in order to

encourage them to settle with ARCO. The court noted

that “[s]ince non-settling parties remain jointly and sever-

ally liable, they pay the balance owed to plaintiff regard-

less of whether any settling defendant has paid more or

App. 40

less than its proportionate share. The practical effect in a

case where the total cost of the remediation has not been

finally fixed is to increase the risk the longer a defendant

stays in the suit, creating a strong incentive for earlier

and/or universal settlement.” [d.°

If Plaintiffs are not allowed to seek joint and several

liability, the foregoing incentive scheme would be turned

on its head. In a contribution action, Plaintiffs would bear

the burden of proving that they had assumed more than

their fair share of cleanup costs in remediating the Pinal

Creek site. To recover monies expended in excess of their

fair share, they might have to track down and sue every

potentially responsible party, incurring considerable

transaction costs. They would also risk being stuck with

cleanup cost shares attributable to absent or insolvent

parties. Moreover, Plaintiffs would not be able to wield

the threat of disproportionate liability against Defendants

to encourage early settlement.

As a result, Plaintiffs would face several barriers in

attempting to recoup their cleanup costs. This result is at

war with CERCLA policy, because Plaintiffs would be

less likely to voluntarily perform a lengthy and costly

cleanup if the prospect of recovering their costs is remote

and expensive. Standing Under Superfund, supra. Plaintiffs

might even choose to contest their liability rather than

initiate a cleanup. Id.

° Defendants have argued that the possibility of settlement

in this case will significantly increase if the Court dismisses

Plaintiffs’ cost recovery claims. Given the adversarial and

zealous litigation stance of the parties up to this point, the Court

finds this argument unconvincing.

App. 41

However, by mitigating the risks involved in private

party remediation of hazardous waste sites, affording

PRPs Section 107 Standing furthers the fundamental

CERCLA goal of promoting expeditious voluntary

cleanups. See Mem. of Amicus Curiae City of Phoenix

Regarding Cost Recovery under CERLA at 4 (“Private

parties who come forward, enter settlements, clean up

sites, and seek to recover their costs from PRPs that were

unwilling to share responsibility must receive some bene-

fit for their labors and costs. By no means should they

suffer greater exposure and higher risk than PRPs that do

nothing and wait to be sued.”).

In their Amici Curiae briefs, the City of Phoenix and

the State of Arizona underscore another important policy

consideration: if PRPs are not allowed to sue under Sec-

tion 107, then the viability of the CERLCA program itself

will be jeopardized. (Mem. of Amicus Curiae City of

Phoenix Regarding Cost Recovery under CERCLA at 2.)

The Amici Curiae point out that there are currently fifty-

six federal and state Superfund sites in Arizona. In light

of the enormous financial burden involved in cleaning up

these sites, they argue:

Absent PRP contribution, the federal Superfund

would be wholly insufficient to pay for remedia-

tion of NPL [National Priority List] sites, much

less other impacted areas. The situation is more

dire in Arizona, where the limited WQARF

resources frequently preclude ADEQ from even

suing PRPs to initiate cleanup, much less doing

the work itself. . . . In short, unless liable parties

continue to undertake prompt remediation

themselves, the system will grind to a halt.

App. 42

Id. These statements indicate that a narrow construction

of Section 107 standing would eviscerate the govern-

ment’s ability to carry out the statutory purposes of

CERCLA. While this argument is not necessary to the

Court’s holding, it lends strong support to Plaintiffs’

position.

Finally, the absence of countervailing policy concerns

supports Plaintiffs’ in this case. Where a plaintiff brings a

Section 107 claim merely to circumvent contribution pro-

tection granted by the government to another party pur-

suant to Section 113(f)(2), or to avoid the shorter statute

of limitations for contribution actions, CERCLA policy

militates against allowing Section 107 standing. See

Bethlehem Iron Works, 891 F.Supp. at 225. However, Plain-

tiffs are not seeking to circumvent contribution protection

or to avoid the shorter limitations period. Instead, they

are attempting to shift many of the legal and financial

risks associated with their cleanup to Defendants, who

have so far refused to assist in the cleanup. These circum-

stances support allowing Plaintiffs to utilize Section 107

here.

C. Defendants’ Common Law Argument

Instead of analyzing the parties’ dispute from the

standpoint of CERCLA policy, Defendants argue that the

dispute should be analyzed with reference to the ordi-

nary legal meaning of the term “contribution.” Defen-

dants cite Section 886A(1) of the Restatement (Second) of

Torts (1979), which provides that “[w]hen two or more

persons become liable in tort to the same person for the

same harm, there is a right of contribution among them,

App. 43

even though judgment has not been recovered against all

or any of them.” Defendants argue that Plaintiffs’ lawsuit

is in substance an action for contribution, as that word is

defined in the Restatement.10

Implicit in Defendants’ reasoning is the assumption

that Plaintiffs and Defendants stand on an equal legal

footing because, as PRPs, they could be co-defendants in

a cost recovery action brought by a third Party.

This assumption ignores the fact that CERCLA Sec-

tion 107 differentiates between responding and non-

responding parties and confers Significant legal advan-

tages upon litigants in the former category. Under

CERCLA Section 107(a)(4)(A)-(B), any person who incurs

response costs may sue for cost recovery, simply because

that person is acting to address the threat to human

health and the environment posed by hazardous wastes.

Here, Plaintiffs are currently involved in cleaning up the

Pinal Creek basin. Defendants are doing nothing. Conse-

quently, Plaintiffs and Defendants do not stand in an

equal legal relationship with each other under the terms

of the statute.

This analysis is consistent with traditional Principles

of common law. The Principle of indemnity, which signif-

icantly pre-dates that of contribution, allowed a

tortfeasor to recover from another the entire cost of a

107 on the basis of this line of reasoning. E.g., City of Fresno v. NL

indus., Inc., No. CV-F 93-5091 REC/DLB, 1995 WL 641983, *2-5,

1995 U.S.Dist. LEXIS 15534, *15-19 (E.D.Cal. July 13, 1995)

(collecting cases).

App. 44

joint liability.!! Traditionally, whether indemnity or con-

tribution applied in an action among joint tortfeasors

usually turned upon an assessment of the blameworthi-

ness of the parties. According to comment a of Restate-

ment (Second) of Torts (1979) § 886B:

The explanation apparently lies in the utiliza-

tion of the Latin maxim, In pari delicto potior est

conditio defendentis (In equal guilt, the position

of the defendant is the stronger). A suit for

contribution is brought for the recovery of a

proportionate part of the sum paid by the plain-

tiff,.on the ground that the parties were both

guilty of negligence and should share the cost;

the parties being equally guilty, the maxim

applies. A suit for indemnity is brought to

recover the total amount of payment by the

plaintiff, on the ground that the plaintiff’s con-

duct was not as blameworthy as the defen-

dant’s; the parties not being in pari delicto, the

maxim does not apply.

The distinction drawn in CERCLA Section 107 between

responding and non-responding parties recognizes that

responding parties are less blameworthy than other PRPs

because they have began [sic] to assist in a cleanup.

Under traditicnal common law analysis, Plaintiffs, as

11 The Restatement (Second) of Torts (1979) defines

indemnity between tortfeasors in section 886B(1) as follows:

If two persons are liable in tort to a third person for

the same harm and one of them discharges the

liability of both, he is entitled to indemnity from the

other if the other would be unjustly enriched at his

expense by the discharge of liability.

App. 45

responding parties, are not in pari delicto with Defen-

dants, and therefore are entitled to recover (at least in the

first instance) their entire cleanup costs.

This reasoning is supported by pre-SARA case law,

which Congress sought to “clarify and confirm” by enact-

ing Section 113. Early CERCLA case law generally recog-

nized the right of culpable private Parties to obtain

indemnification and/or contribution from recalcitrant par-

ties for remediation costs. See United States v. Ward, No.

83-63-CIV-5, 1984 WL 15710, at *1-2 (E.D.N.C. May 14,

1984) (recognizing PRP’s cost recovery action as one for

indemnity or contribution); Bulk Distribution Ctrs., Inc. v.

Monsanto Co., 589 F.Supp. 1437, 1443 (S.D.Fla.1984)

(same).

Moreover, pre-SARA case law recognized that a

plaintiff’s PRP status did not obliterate the Statutory dis-

tinction between responding and non-responding parties.

In City of Philadelphia v. Stepan Chemical Co., 544 F.Supp.

1135, 1143 (E.D.Pa.1982), the City of Philadelphia, a PRP

and an owner of a hazardous waste disposal site, brought

a section 107 action against various defendants who had

dumped waste at the site. Defendants filed a motion for

judgment on the pleadings, arguing that the “any other

person” language of Section 107(a)(4)(B) referred to per-

sons other than those designated as potentially responsi-

ble parties under the statute. Id. at 1142.

The court rejected this contention. It noted that

CERCLA was designed to encourage prompt cleanups,

and that Section 107 “is an integral part of the statute’s

method of achieving this goal for it gives a private party

the right to recover its response costs from responsible

App. 46

third parties which it may choose to pursue rather than

claiming against the [federal Superfund].” Id. at 1143.

The court then held that the City should be allowed

to recover its response costs despite its status as a PRP. Id.

It stated: “I cannot conclude that the City’s right to main-

tain this action is barred by the hypothetical possibility

that had the federal or state government brought this

suit, the City too would be liable. . . . The simple fact is

that. . . . a party which has incurred response costs seeks

to recover them from responsible parties, an action

expressly authorized by CERCLA.” Id.

Accordingly, the Court finds that u :Jitional legal

principles support PRP standing under Section 107.!?

D. The Case Law

There is a split of authority in this and other Circuits

regarding the issue of PRP standing under Section 107.

The recent trend holds that PRPs lack Section 107 stand-

ing. Nevertheless, this Court finds that the most persua-

sive cases support PRP standing. A survey of the relevant

case law follows.

12 Evolving legal principles also support this conclusion. In

Arizona, for instance, the state legislature chose to abolish

traditional joint and several liability by enacting the Uniform

Contribution Among Joint Tortfeasors Act, A.R.S. §§ 12-2501 to

12-2509. However, the legislature expressly created an

exception for environmental actions. See A.R.S. § 12-2506(D)(2)

(“Nothing in this section prohibits the imposition of joint and

several liability in a cause of action relating to hazardous wastes

or substances or solid waste disposal sites.”).

App. 47

1. Supreme Court

In Key Tronic Corp. v. United States, 511 US. 809, 114

S.Ct. 1960, 128 L.Ed.2d 797 (1994), the Supreme Court

addressed the question of whether attorney’s fees are

“necessary costs of response” within the meaning of

CERCLA Section 107(a)(4)(B). The petitioner, one of sev-

eral parties responsible for contaminating a landfill, had

brought a Section 107 action to recover its cleanup costs

from other responsible parties. The court concluded that

a party suing under Section 107 may recover attorney’s

fees for the identification of other potentially responsible

parties, but may not recover fees for the preparation and

negotiation of an agreement with a government agency or

for the prosecution of CERCLA litigation. Id. at __, 114

S.Ct. at 1967.

The Key Tronic decision was based, in part, on the

assumption that a liable party may prosecute a cost

recovery action under Section 107. This assumption lends

some support to Plaintiffs’ argument. However, because

the Supreme Court did not squarely confront the issues

underlying this assumption, Key Tronic is of limited value

in deciding the issue before this Court.

2. Circuit Courts of Appeal

Defendants assert that “[e]very Court of Appeals,

including the Ninth Circuit, to consider the question has

held that liable parties may sue under CERCLA only for

contribution, regardless of whether the claim is pled

under Section 107(a) or Section 113(f)(1).” (Joint Reply at

4.) (Emphasis omitted.) This assertion is inaccurate and

misleading.

App. 48

The First, Seventh, and Tenth Circuit Courts of

Appeal have issued opinions supporting Defendants’

position. See United Technologie: Corp. v. Browning-Ferris

Indus., Inc., 33 F.3d 96, 98-103 (1st Cir.1994), cert. denied,

__ U.S. ___, 115 S.Ct. 1176, 130 L.Ed.2d 1128 (1995); Akzo

Coatings v. Aigner Corp., 30 F.3d 761, 764-65 (7th Cir.1994);

United States v. Colorado & Eastern R.R. Co., 50 F.3d 1530,

1535-36 (10th Cir.1995).!%

The Seventh Circuit, however, has not spoken with

one voice. In Amcast Indus. Corp. v. Detrex Corp., 2 F.3d 746,

748 (7th Cir.1993), cert. denied, 510 U.S. 1044, 114 S.Ct. 691,

126 L.Ed.2d 658 (1994), Judge Posner recognized that

CERCLA Section 107(a)(4)(B) “permits one responsible

person to recover all or part of its response costs from

another.” The Akzo decision does not cite or discuss

Amcast.

The Sixth and Eighth Circuit Courts of Appeal have

decided cases supporting Plaintiffs’ position. See Velsicol

13 These cases are distinguishable because they each

involved the presence of “a direct external legal compulsion in

the form of a government order or enforcement action.” (Pls.’

Resp. to Def. ARCO’s Mot. to Dismiss Pls.’ Cost Recovery

Claims and Joinders of Other Defs. at 29.) According to

Plaintiffs, the element of external legal compulsion is lacking

here, because the ADEQ did not formally order Plaintiffs to

initiate the cleanup. Defendants contest this characterization of

the facts; nevertheless, on motions to dismiss and for judgment

on the pleadings, the facts as Plaintiffs have stated them must be

taken as true. In addition, Plaintiffs’ characterization finds

support in In re Dant & Russell, Inc., where the court considered

BN’s decision to undertake the long-term cleanup of its

property as voluntary despite the EPA’s order directing BN to

take initial emergency cleanup measures. 951 F.2d 246, 248-49

(9th Cir.1991).

App. 49

Chem. Corp., 9 F.3d at 529 (6th Cir.1993) (PRP may sue

under section 107(a)(4)(B)); General Electric Co., 920 F.2d

at 1421 (8th Cir.1990) (liable party entitled to recover

response costs under Section 107(a)(4)(B)). However, the

Eighth Circuit has recently decided a case which appears

to support Defendants. See Control Data Corp. v. S.C.S.C.

Corp., 53 F.3d 930, 934 n. 4 (8th Cir.1995)

Some language in Amoco Oil Co. v. Borden, Inc., 889

F.2d 664 (5th Cir.1989) Supports Defendants. However,

the Amoco court merely endorsed the application of Sec-

tion 113(f) in discussing the allocation of cleanup costs

among the parties, after liability itself had already been

adjudicated. Nothing in Amoco Suggests that the court

dismissed the PRP plaintiffs’ cost recovery claims.

The only Ninth Circuit case discussing the relation-

ship between CERCLA Sections 107 and 113 is In re Dant

& Russell, Inc., 95] F.2d 246 (9th Cir.1991) (“Dant &

Russell”). Plaintiffs and Defendants each claim this case

Supports their respective Positions.

Dant & Russell concerned a Section 107 cost recovery

claim brought by Burlington Northern (“BN”) against the

bankruptcy estate of Dant & Russell (“D & R”). BN’s

claim involved Property it owned since 1958 and had

leased to D & R from 1971-1983. In 1985, the EPA ordered

BN to conduct “Immediate Removal and Stabilization

Activities” of hazardous wastes on the property. BN spent

approximately $1 million complying with the order. In

1985, BN filed its Section 107 claim in D & R’s bankruptcy

case, requesting reimbursement in the amount of $14

million for past and future cleanup expenses. The

App. 50

bankruptcy court awarded BN approximately $7 million,

and the district court affirmed.

On appeal, the Ninth Circuit considered two issues: (1)

whether BN’s claim was barred by Section 502(e)(1)(B) of the

Bankruptcy Code; and (2) whether the bankruptcy court

erred by apportioning liability between BN and D & R.

Section 502(e)(1)(B) of the Bankruptcy Code provides,

in part, that a bankruptcy claim for reimbursement or

contribution will be disallowed if “the party asserting the

claim is liable with the debtor on the claim of a creditor.”

Dant & Russell, Inc., 951 F.2d at 248. The Ninth Circuit

concluded that BN’s claim was not barred because the

“co-liability” requirement of Section 502(e)(1)(B) was not

present. Id.

In particular, the court found that the co-liability

requirement did not exist because “third parties are not

competing over D & R’s funds for cleanup. BN’s claim

against these funds arises from no external legal compulsion

- there is no third party creditor here.” Id. (Emphasis

added.) The court derived this conclusion from an anal-

ysis of BN’s CERCLA claim. It noted that BN’s claim

arose under CERCLA Section 197(a)(4)(B), a “private

right of action [which] encourages voluntary private

action to remedy environmental hazards. . . . [and] fur-

thers CERCLA’s goal of responding to hazardous situa-

tions quickly.” Id. The court further noted that while BN

had initially incurred some cleanup costs pursuant to an

EPA order, it had voluntarily embarked on further

cleanup operations without “EPA arm-twisting.” Id.

Therefore, there was no third party to whom both BN and

D & R were “liable with” for the costs of BN’s cleanup,

App. 51

and BN’s claim was not barred by the Bankruptcy Code.

Id. at 249.

The court next considered whether the bankruptcy

court erred by allocating liability between the Parties,

instead of shifting the entire liability to D & R. For

Purposes of allocating liability, the court held that

CERCLA Section 113(f)(1) applied to BN’s claim. It stated:

“This section applies in this case for at least three rea-

sons: (1) BN has admitted CERCLA liability; (2) this is a

civil action under § 9607(a); and (3) D& Ris arguing that

BN should contribute to the cleanup operations.” Id. The

court therefore affirmed the Bankruptcy Court's alloca-

tion of liability between BN and D & R. Id.

While the Dant & Russell opinion is not a model of

clarity, it appears to Support Plaintiffs’ argument that

PRPs have Standing to assert Section 107 cost recovery

claims. The court based its holding that Section

502(e)(1)(B) of the Bankruptcy Code did not bar BN’s

claim on the fact that BN’s claim was for cost recovery,

not contribution. If BN’s claim had arisen under CERCLA

Section 113(f) in the first instance, then BN and D&R

would have been co-liable to a third party. Cf. 42 U.S.C.

§ 9613(g)(3) (statute of limitations for contribution actions

begins to run after entry of judgment, administrative

order, or settlement). The existence of co-liability would

have barred BN’s bankruptcy claim. Therefore, the

court’s holding depends on the characterization of BN’s

claim as one for cost recovery. !4

'4 Defendants suggested at oral argument that the Ninth

Circuit’s opinion directly approved the reasoning of the District

App. 52

Defendants urge this Court to draw a contrary princi-

ple from Dant & Russell: That when one PRP sues another,

Court, which held that cleanup costs could be allocated between

BN and D & R because “regardless of how BN characterized its

CERCLA claim, the claim should be evaluated according to

equitable principles of contribution.” (In re Dant & Russell, Inc.,

CV 86-0746-PA, at 11 (D. Oregon May 8, 1989), copy attached to

Defs.’ Joint Reply.) In particular, counsel pointed to the

following language in In re Dant & Russell, Inc., 951 F.2d 246, 249

(9th Cir.1991): “For the reasons cited by the district court, we

hold that the bankruptcy court did not abuse its discretion in

this equitable apportionment of liability.”

Counsel reads too much into this statement. The statement

followed a review of the lower courts’ apportionment of costs

between BN and D & R, thereby indicating the Ninth Circuit's

approval of the lower courts’ allocation methodology. The

statement does not indicate approval for the District Court's

reasoning in applying contribution principles. Instead of merely

adopting the District Court’s reasoning, the Ninth Circuit set

forth its own explanation of why CERCLA section 113(f)

applied to the parties’ dispute. That explanation indicates that

the Ninth Circuit treated D & R’s request for an allocation of

costs as an implied contribution counterclaim. See In re Dant &

Russell, Inc., 951 F.2d at 249 (applying section 113(f) in part

because D & R argued that BN should contribute to the cleanup

costs).

In addition, the Ninth Circuit did not follow the District

Court’s reasoning concerning the issue of whether BN’s claim

was barred by section 502(e)(1)(B) of the Bankruptcy Code.

Instead of finding (as the District Court did) that the claim was

not barred because it was not contingent, the Ninth Circuit held

that the claim was not barred because - due to the nature of

BN’s CERCLA section 107 claim - BN and D & R were not co-

liable to a third party. Therefore, if the Ninth Circuit had

approved the District Court's analysis of BN’s claim as one that

could be analyzed according to contribution principles, that

approval would conflict with the Ninth Circuit’s bankruptcy

analysis.

App. 53

the action is for contribution. The Court cannot accept

this reading, because it is inconsistent with the logic of

the Ninth Circuit’s opinion. Accordingly, this Court does

not follow cases that have read Dant & Russell in a pro-

defendant manner. See, e.g., Akzo, 30 F.3d at 761 (7th

Cir.1994) (citing Dant & Russell for the Proposition that

CERCLA claims brought by liable parties are “quintes-

sential” contribution claims).

Cases such as Akzo, in addition to misreading Dant &

Russell, engage in gross oversimplification when they

State that a PRP’s cost recovery action is in substance a

mere claim for contribution. These cases fail to give due

weight to statutory distinction between PRPs who incur

response costs and those who do not - a distinction

recognized by the Ninth Circuit in its discussion of the

nature of BN’s Section 107 claim. Dant & Russell, Inc., 951

F.2d at 248. In addition, these cases fail to recognize that

PRPs who are foreclosed from suing under Section 107

will be strongly discouraged from initiating cleanups - a

result plainly inconsistent with CERCLA’s fundamental

goals. Accordingly, this Court finds such cases unpersua-

sive and refuses to follow them.

3. District Courts

Federal district courts - both in the Ninth Circuit and

elsewhere — have split on the issue of whether an action

brought by one potentially responsible party against

another may proceed under Section 107. Compare Trans-

portation Leasing Co. v. State of California, 861 F.Supp. 931,

938 (C.D.Cal.1993) (“CERCLA permits [PRP] plaintiffs to

sue under § 107. Section 113 does not abrogate § 107 but

App. 54

instead codifies the efforts of federal courts to imply a

contribution remedy to assist those held jointly and sev-

erally liable.”); Pinole Point Properties, Inc. v. Bethlehem

Steel Corp., 596 F.Supp. 283, 291 (N.D.Cal.1984); Idylwoods

Assoc. v. Mader Capital, Inc., 915 F.Supp. 1290, 1312-14

(W.D.N.Y.1996); United States v. ].M. Taylor, 909 F.Supp.

355, 366 (M.D.N.C.1995) (whether a party may utilize

Section 107 depends on whether it has incurred “neces- |

sary costs of response,” not on whether that party is

potentially responsible); Barmet Aluminum Corp. v.

Brantley & Sons, Inc., 914 F.Supp. 159, 161 (W.D.Ky.1995);

Town of Wallkill v. Tesa Tape Inc., 891 F.Supp. 955, 960

(S.D.N.Y.1995) (“even if the Town were not a govern-

mental plaintiff, it would be entitled to maintain both

§ 107 and § 113 claims”); Bethlehem Iron Works, 891

F.Supp. at 225 (permitting plaintiffs to raise Section 107

claims comports with CERCLA’s goal of encouraging

prompt voluntary private party cleanups; any unfairness

that might result from the imposition of joint and several

liability will be remedied through the resolution of defen-

dant’s contribution counterclaim); United States v. Atlas

Minerals and Chem., Inc., No. 91-5118, 1995 WL 510304, at

*76-81, 1995 U.S.Dist. LEXIS 13097, at *211-230 (E.D.Pa.

Aug. 22, 1995); Companies for Fair Allocation v. Axil Corp.,

853 F.Supp. 575, 580 (D.Conn.1994); with, Catellus Dev.

Corp. v. L.D. McFarland Co., 910 F.Supp. 1509, 1513-16

(D.Or.1995) (PRPs are joint tortfeasors; therefore they can-

not impose joint and several liability on defendants under

Section 107); City of Fresno v. NL Indus., Inc., No. CV-F

93-5091 REC/DLB, 1995 WL 641983, at *5, 1995 U.S.Dist.

LEXIS 15534, at *19-20 (E.D.Cal. July 12, 1995); T H Agri-

culture & Nutrition Co., Inc. v. Aceto Chemical Co., Inc., 884

ee eee ee

App. 55

F.Supp. 357, 360 (E.D.Cal.1995) (weight of authority sup-

ports finding that PRP may only seek contribution for

response costs); Kaufman & Broad-South Bay v. Unisys

Corp., 868 F.Supp. 1212, 1216 (N.D.Cal.1994); Kamb v. U.S.

Coast Guard, 869 F.Supp. 793, 799 (N.D.Cal.1994) (In re

Dant & Russell dictates that action brought by PRP sounds

in contribution); Plaskon Elec. Materials, Inc. v. Allied-Sig-

nal, Inc., 904 F.Supp. 644, 652 (N.D.Ohio 1995) (PRP’s

Section 107 claim must be construed as a contribution

action); New Castle County v. Halliburton NUS Corp., 903

F.Supp. 771, 779 (D.Del.1995); The Ekotek Site PRP Comm.

v. Self, 881 F.Supp. 1516 (D.Utah 1995). For the reasons set

forth above, the Court finds persuasive those cases favor-

ing Plaintiffs’ position.

Accordingly, Defendants’ Motion to Dismiss and

Motion for Judgment on the Pleadings concerning Plain-

tiffs’ federal cost recovery claims are denied.

State Law Cost Recovery Claims

Defendants also seek dismissal of Plaintiffs’ state law

cost recovery claims. These claims arise under A.R.S.

§ 49-285(A), which provides that “any other person” in

addition to the state may bring an action to recover

remediation costs. Nothing in this or any other related

statutory provision suggests that the Arizona legislature

intended this cause of action to be limited to only “inno-

cent” persons. The Court must construe the plain lan-

guage of the statute to allow Plaintiffs to state their cost

recovery claims under A.R.S. § 49-285. See Janson v. Chris-

tensen, 167 Ariz. 470, 808 P.2d 1222, 1223 (1991) (“the most

reliable index of a statute’s meaning is its language and

App. 56

when the language is clear and unequivocal it is deter-

minative of the statute’s construction”). Accordingly,

Defendants’ Motion to Dismiss and Motion for Judgment

on the Pleadings concerning Plaintiffs’ state law cost

recovery claims are denied.

Parag ae

ARCO’s Motion to Dismiss Inspiration’s

Contribution Claim

In a separate motion, ARCO seeks dismissal of Plain-

tiff Inspiration Consolidated Copper Company’s (“Inspi-

ration”) cost recovery and/or contribution claims against

ARCO. ARCO contends that Inspiration is attempting to

shift its corporate liabilities to ARCO merely because a

corporate predecessor to ARCO once held

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