Petition for Writ of Certiorari — Carpenter Technology Corp. v. Agere Systems, Inc.
Supreme Court brief2010
Ask Donna
What actually matters in this document.
Text
Supreme Court, U.S.
FILED
O\ 10-279 AUG 20 2010
\0
OFFICE OF THE CLERK
No.
IN THE
SUPREME COURT OF THE UNITED STATES
CARPENTER TECHNOLOGY CORPORATION,
Petitioner,
‘EP
AGERE SYSTEMS, INC., CYTEC INDUSTRIES,
INC., FORD MOTOR COMPANY, SPS
TECHNOLOGIES, LLC AND Tl AUTOMOTIVE
SYSTEMS LLC,
Respondents.
ON PETITION FOR WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
PETITION FOR WRIT OF CERTIORARI
Robert D. Fox
Counsel of Record
Neil S. Witkes
Kathleen B. Campbe!l
Michael A. Carter
Manko, Gold, Katcher & Fox, LLP
401 City Avenue, Suite 500
Bala Cynwyd, Pennsylvania 19004
(430) 484-5700
QUESTIONS PRESENTED
iB United States v. Atlantic Research Corp.
resolved decades of conflicting lower court decisions,
and held that a party does not “incur” its own
response costs for purposes of § LO7(a) of CERCLA
when it pays to satisfy a settlement agreement. Did
the Third Circuit contradict Atlantic Research and
CERCLA when it held that a party “incurs” its own
response costs when its payments to satisfy a
settlement agreement are placed into a common
account used to fund an ongoing CERCLA cleanup?
2. The courts of appeals must enter
judgment for the defendant, and “cannot remand,”
when a plaintiff fails to meet its burden of proof at
trial. Did the Third Circuit ignore established
precedent fundamental to the adversarial process
when, sua sponte, it remanded to the district court to
allow plaintiffs that failed to meet their burden of
proof under § 113() of CERCLA to reopen the record
and relitigate their case?
CORPORATE DISCLOSURE STATEMENT
Petitioner Carpenter Technology Corporation
does not have a parent corporation, and no publicly
held company owns 10% or more of its stock
TABLE OF CONTENTS
TABLE OF Bus TORE iia S cv cceccescsvcvsessscscvsecseacsess \
PE ETOAC BEI WY ovnss csv skesvesGscstavsanscceseavcasns ee
AiG) this | Sy y | ol, re Ut Cet reece
aE Us Oe BO er Osan vo sso ssacdiansskedsesaeans
STATEMENT OF THE CASE ............. RANA RE has l
Lc FPRCCUIAL BECOMING oo cickscvinscnscesesscenessssees 4
BE FPOOCOOCIIS TOI aan sis csinscscancvecscasicasdanceadavens S
REASONS FOR GRANTING THE PETITION ..7
The Third Circuit’s Decision to Provide
a § 107(a) Cost Recovery Claim to
PRPs That Settle With Other PRPs
Warrants Immediate Review. .................0008- 7
A. Third Circuit’s “Payment Rule”
Conflicts With Atlantic Research. .......... 8
B. The Third Circuit’s “Payment Rule”
Conflicts With Sections 104 and 122
Ee ire hic ccoc aks since vekdnensecneeteawcseis 9
C. The Third Circuit’s “Payment Rule”
Will Discourage Settlements With
EPA and Frustrate CERCLA’s
Primary Goal of Prompt,
VWORIIGATY CONDITION oa. scciencsscicnsvescacecvecsxes 11
Ll
D. The Third Circuit’s “Payment Rule”
Invites Claim Manipulation. .................. L5
Il. The Third Circuit’s Order Remanding
the Case With Instructions That Allow
the District Court to Reopen the Record
Conflicts With Established Law
Regarding Both the Propriety of Remand
and the Waiver of Issues on Appeal............ 18
A. This Court’s Precedents Prohibit
Remand to Reopen the Record
When a Plaintiff Fails to Satisfy
Its Burden of Proof.
. The Third Circuit’s Remand Order
Also Violates Established Rules
Regarding the Waiver of Issues
on Appeal
Fe a RR PRIE EIEN cncaccsasstscsivovasses esekae eas pibiseane shacniones 31
Appendix A (April 12, 2010 Opinion of the
Court of Appeals)
Appendix B (August 18, 2008 Findings of
Fact and Conclusions of Law of the
District Court)
Appendix C (May 25, 2010 Order denying
Appellees’ Petition for Rehearing)
Appendix D (May 25, 2010 Order denying
Appellant’s Petition for Rehearing)
Appendix E (Relevant statutory provisions)...165a
TABLE OF AUTHORITIES
CASES
Burlington N. & Santa Fe Ry. Co. v.
United States, 556 U.S. __, 129S. Ct.
1870 (2009)
Concord Boat Corp. v. Brunswick Corp.,
207 F.3d 1039 (Sth Cir. 2000)............ccsccsseeeees 21
Cooper Industries, Inc. v. Aviall Services,
943 U.S. 157 (2004)
Duke Power Co. v. Greenwood County,
Re I © BI oo vaca dba deksvacessaedausouvakicvedones 21
Kw. DuPont de Nemours & Co. v. United
States, 460 F.3d 515 (3d Cir. 2006)
FEOC v. Westinghouse Elec. Corp.,
925 F.2d 619 (3d Cir. 1991)
Forged Steel Wheel Co. v. Lewellyn,
251 U.S. 511 (1920)
Gramegna v. Johnson,
S46 F.26 G75 (Lith Cir, 108B)..........ccccscsesceecss 26
Greenlaw v. United States.
554 U.S. 237, 128 S. Ct. 2559 (2008).......2
Huffman v. United Siates,
242 F.2d 835 (9th Cir. 1957)
Knowles v. lowa
y+, OR. Re BK Ok.) :) eee
Labor Relations Div. of Constr. Indus. OF
Mass. v. Teamsters Local 379,
156 F.3d 13 (1st Cir. 1998)
Lodge 1858, Am. Fed'n of Gov't Employees v
Paine, 436 F.2d 882 (D.C. Cir. 1970)
Lonberg v. City of Riverside, 571 F.3d
846 (9th Cir. 2010)
Mildred Cotler Trust v. United States,
184 F.3d 168 (2d Cir. 1999)..........
N. Am. Coal Co. v. Miller,
870 F.2d 948 (3d Cir. 1989)......
Neely v. Martin K. Eby Constr. Co., Inc.,
gh Ee i By p Sco ee Dp
Nevada Employees Ass'n, Inc. v. Keating,
903 F.2d 1223 (9th Cir. 1990)
New Castle County v. Halliburton NUS Corp.,
111 F.3d 1116 (3d Cir. 1997)
Parklane Hosiery Co. v. Shore,
439 U.S. 322 (1979)
Romero v. Pomona,
883 F.2d 1418 (9th Cir. 1989)
Singleton v. Wulff,
re OF ae Re CBT iv ceveckcvenxvssesudissmetsagessuiaenn
United States v. Atlantic Research Corp.,
551 U.S. 128 (2007)
United States v. Bergman,
699 F.3d 1142 (10th Cir. 2010)..........cccsscsccoece. y
United States v. Hagenow,
487 F.3d 539 (7th Cir. 2007)
United States v. Hayes,
515 U.S. 737 (1995)
United States v. Leonzo,
50 F.3d 1086 (D.C. Cir. 1995)
United States v. Martinez,
606 F.3d 1303 (11th Cir. 2010)
Unitherm Food Sys., Inc. v. Swift-Eckrich,
Inc., 546 U.S. 394 (2006)
Weisgram v. Marley Co.,
BSS U.S. BED CII) wvccesccsccccccsccescssececs 20,
Williams v. Leach,
938 F.2d 769 (7th Cir. 1991)
STATUTES AND RULES
28 U.S.C. § 1254(1)
28 U.S.C. §
28 U.S.C. §
42 U.S.C. §
42 U.S.C. §
42 U.S.C. §
42 U.S.C. §§
42 U.S.C. §
42 U.S.C. §
42, U.S.C. § 9613()(2) .
42 U.S.C. § 9613(2)(3) oo...
42 U.S.C. § 9622(a)
42 U.S.C. §
42 U.S.C. §
OTHER AUTHORITIES
Barry A. Miller, Sua Sponte Appellate Rulings
When Courts Deprive Litigants of an
Opportunity to Be Heard, 39 SAN DIEGO L
REV. 1253 (2002)
| Jack B. Weinstein & Margaret A. Berger
Weinstein's Federal Evidence, § 301.02
at n.8 (Matthew Bender ed. 2010) 19
U.S. GAO, Superfund: Litigation Has Decreased
and KPA Needs Better Information on Site
Cleanup and Cost Issues to Estimate Future
Funding Requirements (July 2009),
Carpenter Technology Corporation respectfully
prays that the United States Supreme Court grant a
writ of certiorari to review the judgment of the
United States Court of Appeals for the Third Circuit
OPINIONS BELOW
The opinion of the court of appeals is reported
at 602 F.3d 204 (3d Cir. 2010) and is reprinted in the
Appendix at la. The opinion of the district court wa
not published and is reprinted in the Appendix at
O3a.
JURISDICTION
The court of appeals entered judgment on
April 12, 2010 and denied Carpenter's timely petition
for rehearing en banc or panel rehearing on May 25,
2010. Respondents similarly filed a timely petition
for panel rehearing, also denied on May 25, 2010
The jurisdiction of this Court is invoked under 28
U.S.C. § 1254(1).
STATUTES INVOLVED
The relevant portions of Sections 104, 107, 113
and 122 of the Comprehensive Environmental
Response, Compensation, and Liability Act
(“CERCLA”), 42 U.S.C. $§ 9604, 9607, 9613, 9622,
and 28 U.S.C. § 2106, are set forth in the Appendix
at 165a.
STATEMENT OF THE CASE
Since 1986, there have been over 25 appellate
S 1986, tl have | 25 appellat
court decisions and over 100 district court decisions
addressing one central issue under CERCLA:
whether a party that is itself liable under CERCLA
has a cause of action to recover response costs from
other lrable parties, and if so, whether its claim ts for
complete cost recovery under § 107(a), 42 U.S.C
S 9607(a), or contribution under § 1131), 42 U.S.C
S 9613(f). These lower court decisions were
contradictory, and often failed to advance CERCLA’
primary purpose of promoting prompt, voluntary
cleanups of contaminated site:
In Cooper Industries, Inc. v. Aviall Service
Inc., 543 U.S. 157 (2004) and United States 1
Allantic Research Corp., 551 U.S. 128 (2007), the
Court resolved this decades-long dispute with
certainty and clarity. In Aviall, the Court held that a
l .
PRP* can bring a contribution action under
4
8 113(1)(1) only if it has first been sued under § 106
or § 107. 543 U.S. at 160-61. In Atlantic Research,
the Court held that a PRP can bring a cost recovery
action under § 107(a), but “only [for] the costs it has
‘incurred’ in cleaning up a site,” not when it “pays to
satisfy a settlement agreement or a court judgment
551 U.S. at 139 (quoting 42 U.S.C. § 9607(a)(4)(B))
The decision below undermines the Court’
resolution of this critical issue and will return
private parties and the United States back to year
of additional litigation over what should be settled
law. Specifically, the Third Circuit has created a
new rule whereby any PRP that settles by making
payment to another PRP toward an ongoing cleanup
at a CERCLA site can bring a § 107(a) claim for joint
and several liability to recover 100% of its cost
‘A“PRP”’ is a potentially responsible party, that is, a party
that may be hable under CERCLA. Auviall, 543 U.S. at 161
This new “payment rule” warrants the Court's
immediate review for four reasons. First, it conflicts
with how Atlantic Research defined “incurred” under
§$ 107(a) of CERCLA. Second, it is inconsistent with
the settlement provisions of CERCLA, which prohibit
a non-signatory to a consent decree from performing
the required cleanup, that is, from “incurring” its
own response costs. Third, it has the potential to
undermine CERCLA’s goal of promoting prompt,
voluntary cleanups of contaminated sites, by
providing PRPs with an incentive not to settle with
EPA: under the Third Circuit’s “payment rule,”
PRPs that settle with private parties receive more
generous cost-recovery claims (claims for joint and
several liability under § 107(a)) than those that do
settle with EPA (who are limited to more restrictive
§ 113() contribution claims). And finally, the ruling
invites PRPs to structure private settlements to
create § 107(a) claims when they otherwise would be
limited to § 113() claims, or have no claims at all,
thus undermining CERCLA’s purpose of providing
distinct claims to parties in “different procedural
circumstances.” Atlantic Research, 551 U.S. at 139
(internal quotation marks and citation omitted).
Also, this case presents important and
recurring questions of appellate procedure regarding
the circumstances under which a court of appeals
may order a remand to reopen the record when a
party fails to meet its burden of proof at trial. After
concluding that certain plaintiffs failed to meet their
burden of proof at trial, the Third Circuit, sua
sponte, remanded to the district court with
instructions permitting the district court to reopen
the record to provide the plaintiffs with another,
3
unrequested opportunity to prove their case. By
doing so, the Third Circuit violated established rules
of appellate procedure fundamental to our
adversarial process, which prohibit relitigating
issues on remand and arguing issues never raised at
trial or on appeal.
I. Factual Background
From 1972 through 1976, a waste disposal
company used what became known as the Boarhead
‘arms Superfund Site in Pennsylvania (the “Site”) as
an illegal dumping ground for hazardous wastes
generated by its customers. Carpenter was one of
those customers, along with over 20 other entities,
including several of the plaintiffs below. Following
several years of investigation, EPA selected a remedy
for the Site, which was to be implemented in two
stages, or “operable units” (““OU-1” and “OU-2”).
In June 2000, EPA commenced a civil action
against Cytec, Ford and SPS under § 107(a) of
CERCLA by simultaneously filing a complaint and
consent decree, which required Cytec, Ford and SPS
to complete the OU-1 remedial work (the “OU-1
Consent Decree”). Those parties subsequently
settled with TI and Agere, who agreed to contribute
funds to accounts established to perform the OU-1
remedial work.
In December 2001, EPA commenced another
civil action under § 107(a) against Cytec, Ford, SPS
and TI by filing a complaint and second consent
decree, which required Cytec, Ford, SPS and TI to
complete the OU-2 remedial work and to reimburse
4
EPA for approximately $7 million in past response
costs related to the Site (the “OU-2 Consent Decree”).
Those parties subsequently settled with Agere for
approximately $1 million to reimburse the consent
decree signatories for a portion of EPA’s past
response costs and to contribute to accounts
established to perform the OU-1 and OU-2 remedial
work. The signatories to the OU-2 Consent Decree
then repaid Agere $400,000 for an assignment. of
Agere’s claims
Il. Proceedings Below
In 2002, plaintiffs Agere, Cytec, Ford, SPS and
TI asserted claims in a private CERCLA action
against 23 defendants, including Carpenter, for cost
recovery under § 107(a) and contribution under
§ 113(f.* The district court held that Cytec, Ford,
SPS and TI (for the OU-2 costs) had both § 107(a)
and § 113(f) claims against Carpenter, and that
Agere and TI (solely for the OU-1 costs) had § 107(a)
claims against Carpenter.
For purposes of the § 113(f) contribution
claims, the district court concluded that the volume
of waste that each PRP disposed at the Site would
constitute the primary factor to guide its equitable
allocation. At trial, the only evidence that plaintiffs
introduced to establish the waste volumes for one of
the defendants and three of the plaintiffs was a
stipulation plaintiffs entered with that defendant,
’ The district court had subject matter jurisdiction under 28
U.S.C. § 1331.
but not with Carpenter (the “June 23rd stipulation”).
Carpenter specifically objected to the admission of
the June 23rd stipulation as evidence against it.
App. 52a. The district court entered judgment
against Carpenter, and relying exclusively on the
June 23rd stipulation as evidence of the waste
volumes of those four PRPs, determined Carpenter’s
equitable share based on its share of the total volume
of waste disposed of at the Site.
On appeal, the Third Circuit vacated the
judgment and remanded for further proceedings.
The Third Circuit held that Agere and TI (for the
OU-1 costs) could assert cost recovery claims under
§ 107(a) for the amounts paid pursuant to their
settlement agreements with the consent decree
signatories. App. 41a. The court of appeals reasoned
that TI and Agere “incurred” their own response
costs within the meaning of Atlantic Research by
putting “their money in the pot right along with the
money from the signers of the consent decrees.” App.
38a.
Consistent with Atlantic Research, the Third
Circuit also held that Cytec, Ford, SPS and TI (for
the OU-2 costs) were limited to contribution claims
under § 113(f) for the costs they paid pursuant to the
OU-1 and OU-2 Consent Decrees. App. 47a. The
Third Circuit then held that these plaintiffs failed to
meet their burden under § 113(f) to prove each
party’s “fair share” of liability at the Site because
“the June 23rd stipulation should not have been
admitted against Carpenter.” App. 55a. The
plaintiffs thus “did not rely on competent evidence as
to four of the parties’ waste volumes,” and “without a
6
mention of any other evidence of the matters covered
by the June 23rd stipulation, it was impossible for
the District Court to perform an equitable allocation
of waste volumes among Carpenter and the other
PRPs.” App. 55a-56a.
Despite its conclusion that the plaintiffs that
were properly limited to § 113(f) claims failed to meet
their burden of proof, the Third Circuit did not enter
judgment for Carpenter. Instead, the Third Circuit,
sua sponte, remanded these claims to the district
court with instructions permitting the district court
to reopen the record to allow plaintiffs to introduce
additional evidence to try to satisfy their burden of
proof. The Third Circuit did so even though
plaintiffs relied exclusively on the June 23rd
stipulation in the district court proceedings and
throughout Carpenter’s subsequent appeal, and even
though plaintiffs never requested a remand, and
Carpenter specifically requested judgment in its
favor for plaintiffs’ failure to satisfy their burden of
proof.
REASONS FOR GRANTING THE PETITION
I. The Third Circuit’s Decision to Provide a
§ 107(a) Cost Recovery Claim to PRPs That
Settle With Other PRPs Warrants Immediate
Review.
The Third Circuit has created a new rule
whereby any PRP not sued by the United States
under § 106 or § 107 that pays toward an ongoing
response action being performed by others has
“incurred” costs for which it can seek complete cost
7
recovery under § 107(a) of CERCLA. The Court
should review this “payment rule” because it conflicts
with this Court’s precedent and with the text and
policies of CERCLA, and creates an incentive for
parties that will produce undesirable consequences
in future CERCLA actions.
A. The Third Circuit’s “Payment Rule”
Conflicts With Atlantic Research.
Section 107(aX4)(B) of CERCLA provides a
cause of action for the recovery of “costs of response
incurred by any other person.” 42 U.S.C.
S$ 9607(a)4)(B). In Atlantic Research, the Court
defined what the term “incurred” means for purposes
of § 107(a), drawing a clear distinction between costs
of performance, on the one hand, and amounts paid
in settlement, on the other. Thus, when a PRP
actually performs a cleanup, and has not been sued
by the United States in a § 106 or § 107 action, it
“incurs” costs for which it can seek recovery under
§ 107(a). But when a PRP merely “pays to satisfy a
settlement agreement or a court judgment, it does
not incur its own costs of response,” and thus cannot
recover under § 107(a). Atlantic Research, 551 U.S.
at 139.°
* The Court in Atlantic Research also held that “any other
person” means any person other than the federal government,
including PRPs, and that a PRP can maintain a cost recovery
action under § 107(a) “only” to recover costs that the PRP “has
‘incurred’ in cleaning up a site.” Atlantic Research, 551 U.S. at
135, 139 (quoting 42 U.S.C. § 9607(a)(4)(B)).
8
On its face, the ruling below conflicts with
these principles. The Third Circuit held that Agere
and TI (for the OU-1 costs) have § 107(a) claims to
recover the amounts they contributed toward the
cleanup of the Site, “even though the payments were
made pursuant to settlement agreements” with the
other plaintiffs. App. 41a (emphasis added). In
reaching this conclusion, the Third Circuit created its
own, new interpretation of the meaning of “incurred”
under § 107(a), namely, to pay the bills “as a job gets
done.” App. 39a. Thus, the Third Circuit reasoned
that Agere and Tl “incurred” costs because they “put
their money in the pot right along with the money
from the signers of the consent decrees,” and the
costs sought were “payments made for on-going
work.” App. 38a-39a.
Under Atlantic Research, the proper
distinction is performance (without first being sued
by the United States under § 106 or § 107), not
payment. Thus, if PRPs (like Agere and TI) settle
with other PRPs and agree to pay into a common
fund a portion of the costs for future response action,
those PRPs do not “incur” their own costs under
§ 107(a). Rather, these payments — regardless of
their ultimate use ~ are made “to satisfy a settlement
agreement,” and are therefore not recoverable under
§$ 107(a). Atlantic Research, 551 U.S. at 139.
B. The Third Circuit’s “Payment Rule”
Conflicts With Sections 104 and 122 of
CERCLA.
In addition to conflicting with Atlantic
Research, the Third Circuit’s § 107(a) ruling is
9
inconsistent with CERCLA's settlement provisions.
Pursuant to Sections 104(a) and 122(a) of CERCLA,
the President (and by delegation, EPA) is granted
authority to enter into settlements with PRPs,
culminating in either a consent decree or an
administrative order. 42 U.S.C. §§ 9604(a), 9622(a).
Under these settlements, EPA may authorize a PRP
to perform a remedial action if EPA determines that
the cleanup “will be done properly and promptly” by
that PRP. 7d.
Further, under § 122(e)6) of CERCLA, a PRP
can perform a remedial action at a federal Superfund
site under investigation — and therefore “incur” its
own response costs — only if authorized by EPA:
When either the President, or a
potentially responsible party
pursuant to an administrative
order or consent decree under this
chapter, has initiated a remedial
investigation and feasibility study
for a particular facility under this
chapter, no potentially responsible
party may undertake any remedial
action at the facility unless such
remedial action has been
authorized by the President.
42 U.S.C. § 9622(e)(6) (emphasis added).
Thus, when, as here, a cleanup is governed by
a consent decree, PRPs that are not parties to the
consent decree, and have not been approved by EPA,
have no right or ability to perform the cleanup under
10
CERCLA, and cannot “incur” their own response
costs under § 107(a). Instead, they can merely settle
with the consent decree signatories for a portion of
the costs, past or future, that those other parties
“incur.”
»» The Third Circuit’s “Payment Rule” Will
Discourage Settlements With EPA and
Frustrate CERCLA’s Primary Goal of
Prompt, Voluntary Cleanups.
The Third Circuit chose to depart from this
Court’s interpretation of § 107(a) in Atlantic
Research because it was concerned that: (1) if non
settling PRPs did not have a § 107(a) claim, they
would be left with no remedy, see App. 39a (“If we
were to hold that Agere and TI cannot pursue
§ 107(a) claims for their settlement payments, they
would be completely barred from recovering those
amounts under CERCLA.”); and (2) if non-settling
PRPs had no remedy, CERCLA’s goal of encouraging
prompt cleanups would be thwarted. See App. 40a.
(“When a company ... has not yet been sued by the
EPA but appreciates that it bears some responsibility
for cleaning up hazardous waste, the language of
CERCLA, which is intended to encourage cleanup,
ought not be interpreted to discourage participation
in cleanup if a more consistent construction of the
statute is plausible.”).
But PRPs like Agere and TI are not without a
remedy. Instead, they have a choice. They can settle
with EPA, subject themselves to direct liability to
EPA, and retain a contribution claim under § 113(f)
against other non-settling PRPs for costs paid in
1]
excess of their fair share. Or, if they elect not to
settle with EPA, they can liquidate their liability for
contribution to those PRPs that do settle with EPA
and that do incur the response costs, but forego any
claims against other responsible third parties to
recover all or a portion of the amounts they paid in
settlement.
And while the Third Circuit thought it
necessary to provide PRPs like Agere and TI with a
§ 107(a) claim to encourage private party
participation in site cleanups,’ its holding actually
creates a disincentive for PRPs to settle with EPA by
committing to perform cleanups. Unquestionably,
one of CERCLA’s primary goals is to encourage PRPs
to settle with EPA to perform voluntary cleanups,
and CERCLA provides EPA with several tools to
encourage prompt settlements with it.°
* See App. 40a (stating that one of CERCLA’s primary goals
is “to encourage the timely cleanup of hazardous waste sites”)
(quoting W.R. Grace & Co. v. Zotos Int'l, Inc., 559 F.3d 85, 88
(2d Cir.2009)) (internal quotation marks omitted).
° In support of this goal, CERCLA expressly encourages
early settlements, see, e.g., 42 U.S.C. § 9622(a) (“[Tlhe President
shall act to facilitate agreements ... that are in the public
interest ... in order to expedite effective remedial actions and
minimize litigation.”), and provides a number of incentives for
PRPs to promptly settle their liability to EPA and undertake
cleanup responsibility at a site. See 42 U.S.C. § 9622()
(authorizing EPA to provide settling parties with a covenant not
to sue), § 9613(f)(1) (providing settling parties with the night to
seek contribution from non-settling PRPs), § 9613(f)(2)
(protecting settling PRPs from contribution claims from other
parties); see also E.1. DuPont de Nemours & Co. v. United
States, 460 F.3d 515, 536 (3d Cir. 2006) (noting that CERCLA’s
legislative history “reveals an express bent toward encouraging
12
Under the Third Circuit’s ruling, however, a
PRP that does not settle with EPA has a
“substantially more generous” remedy under § 107(a)
than a PRP that does settle with EPA, which is
limited to claims for contribution under § 113(f).
New Castle County v. Halliburton NUS Corp., 113
F.3d 1116, 1123 (3d Cir. 1997). Section 107(a) has up
to a six-year statute of limitations, 42 U.S.C
§ 9613(¢)(2); “allows for complete cost recovery under
a joint and several liability scheme,” App. 20a; and
offers a relaxed burden of proof whereby a plaintiff
need only prove that a defendant is liable under
CERCLA, Burlington N. & Santa Fe Ry. Co. v
United States, 556 U.S. _, 129 S. Ct. 1870, 1881
(2009). By contrast, § 113(f) has a three-year statute
of limitations, 42 U.S.C. § 9613(¢)(3); allows for
recovery only of those amounts spent in excess of the
plaintiff's own fair share of liability, Atlantic
Research, 551 U.S. at 138-39; and requires a plaintiff
to prove each party’s equitable share of liability,
including its own, App. 47a-48a, 55a.”
settlement”) (citations omitted), vacated on other grounds by,
551 U.S. 1129 (2007).
® As the decision below demonstrates, the difference:
between § 107(a) and § 113(f) claims can have case-dispositive
impacts. Cytec, Ford, SPS and TI (for OU-2 costs) were sued
under § 106 and § 107, and signed the consent decrees;
therefore, they were properly limited to claims for contribution
under § 113(f). It was thus their burden to prove each party’s
“fair share” of liability at the Site. App. 55a. They failed to do
so, and the Third Circuit properly vacated the judgment
previously entered in their favor. If those plaintiffs had
§ 107(a) claims for joint and several liability, they would not
have been required to prove an equitable allocation
13
Consequently, PRI’s that otherwise would
have settled with EPA and sought contribution from
other PRPs under § 113(f) now have considerable
incentive not to settle with EPA, and instead do what
Agere and TI did: remain on the sidelines and hope
other PRPs settle with EPA, privately agree to
participate in the cleanup with those settling partie:
(without assuming any direct responsibility to EPA),
and then seek complete cost recovery from othe:
PRPs under § 107(a)
This disincentive to settle with EPA could
have significant, practical ramifications for cleanups
at federal Superfund sites. And EPA depends on
voluntary settlements to implement CERCLA’s
fundamental purpose — to clean up contaminated
sites. According to a July 2009 Report prepared for
Congress by the United States Government
Accountability Office, through fiscal year 2007, “EPA
enforcement actions have resulted in an estimated
$29.9 billion in cost recoveries, commitments to
conduct site work, and other outcomes,” and “lallmost
80 percent of EPA’s completed actions at [National
Priorities List] sites resulted in agreements with
responsible parties to perform or pay for site cleanup
work.” U.S. GAO, Superfund: Litigation Has
Decreased and EPA Needs Better Information on Site
Cleanup and Cost Issues to Estimate Future funding
Requirements, GAQ-09-656, at 6 (July 2009). When
questioned about recent judicial decisions addressing
the interaction between § 107(a) and § 113(D, EPA
officials identified as their “key concern” whether
such decisions would “maintain the benefits of
settling with the government for responsible parties.”
Id. at 48-49.
i4
Rather than maintain the benefits of a
settlement with the government, the Third Circuit
ruling introduces an incentive for PRPs to eschew
settlement with EPA in favor of creating the right to
seek complete cost recovery under § 107(a)’s joint and
several liability scheme. This is in direct conflict
with CERCLA’s policies of promoting early
settlement and prompt cleanup, and warrants the
Court’s immediate review
D. The Third Circuit’s “Payment Rule”
Invites Claim Manipulation.
Finally, the Third Circuit has created a cost
recovery regime that has the potential to undermin¢
this Court’s CERCLA jurisprudence because it
invites both plaintiffand defendant PRPs to
structure private settlements to create § 107(a)
claims, when they otherwise would be limited to
§ 113() claims, or have no claims at all. Two
examples illustrate how PRPs can manufacture
S 107(a) claims in this way.
First, a plaintiff PRP that has been sued by
and has settled with EPA, and therefore would bi
limited to a claim for contribution under Aviall, could
convert that claim to one for joint and several
lability under § 107(a) by having another PRP
(essentially a straw party) pay the bills “as [the] job
gets done,” App. 39a, and then purchasing the straw
party’s claim. Indeed, that is what the consent
decree signatories did, in part, with Agere. Afte:
agreeing with the consent decree signatories to
contribute almost $1 million toward the cleanup of
the Site, Avere assivned its claims to them in
i
exchange for $400,000. App. 12a. As a result, when
they signed the consent decrees with HPA. avreeing
to perform the cleanup, Lhe consent decree
signatories had only a right to seek contribution
under § 113() for costs that they incurred. But by
the time of trial, they had received a net $600,000
payment from Avere, and under the Third Circuit’
ruling, acquired a § 107(a) claim to recover Agere’
$1 million “contribution” to the cleanup fund. The
acquisition of a § 107(a) claim also shifted the burden
of proof to the defendants and expanded the statuts
of limitations for plaintiffs’ newly-created cost
recovery claim
Second, the Third Circuit's ruling creates the
ability for still greater claim manipulation by PRP
defendants because it allows a § 107(a) cost recovery
claim as long as any portion of the private PRP
settlement is designated to pay for “on-going” work
Under the Third Circuit’s “payment rule,” any PRP
defendant in litigation that enters into a private
settlement could thus create a § 107(a) claim to
recover LOO% of its settlement payment simply by
fashioning the settlement in such a way that some
portion of the settlement is paid into a common fund
used to defray ongoing cleanup work. It is not
uncommon for CERCLA settlements to be structured
‘ Indeed, Age re! ettlement, p> iid into the OU-YZ fund
included a payment of $83,000 expressly for reimbursement of a
portion of EPA's past costs. The Third Cireuit acknowledged
that this payment “could arguably be considered reimbursement
rather than co-funding.” App. 4la n. 82. Yet, the Third Circuit
allowed Avere (or its assignee) to recover these costs in a
» 107(a) cost recovery action because it wus “content to pive the
benefit of the doubt to Aver ld
so that some portion of the settlement consists of a
commitment to pay a percentage of future site work.
The Third Circuit’s holding would allow a defendant
in a private party CERCLA action, which was subject
to private-party, contribution litigation after refusing
to settle with both EPA and the performing PRPs, to
have a § 107(a) claim for its entire settlement,
merely by agreeing in its settlement to pay a portion
of future costs. And further claim manipulation is
possible because a consent decree signatory could
insist as part of its private settlement on an
assignment of these newly-created § 107(a) claims.
After this Court carefully limited the universe
of PRPs eligible to assert a § 107(a) cost recovery
action to those that perform a cleanup without first
being sued by the United States, the Third Circuit’s
“payment rule” would make a § 107(a) cost recovery
action available to virtually all PRPs, as long as
those PRPs pay anything at any time towards an
ongoing CERCLA cleanup. The Third Circuit’s
“payment rule” thus has the potential to further
complicate and prolong CERCLA cost-recovery
litigation by converting settling defendants into
parties with § 107(a) claims. This Court’s
intervention is warranted to prevent these results,
and to clarify, consistent with Atlantic Research and
CERCLA, that a PRP must actually perform its own
cleanup, not merely pay for one being performed by
another, to “incur” costs under § 107(a).
17
II. The Third Circuit’s Order Remanding the
Case With Instructions That Allow the
District Court to Reopen the Record
Conflicts With Established Law Regarding
Both the Propriety of Remand and the
Waiver of Issues on Appeal.
The Third Circuit found that four plaintiffs
failed to satisfy their acknowledged burden of proof
under § 113(f) of CERCLA during the bench trial in
this case, yet nonetheless ordered a remand with
instructions that allow the district court to reopen
the record and give these plaintiffs a second
opportunity to prove their case. It did so without
citation to any unusual factual or legal
circumstances, and without any request by the
plaintiffs for remand. The Third Circuit’s remand
order, therefore, conflicts with well-established
principles of appellate procedure governing the
propriety of remand and the waiver of issues, and
deprived Carpenter of fair notice of the grounds on
which the court decided its appeal and a full and fair
opportunity to brief and argue this potentially-
dispositive issue. It also invites plaintiffs in future
cases to seek remand orders and prolong litigation in
an already overburdened federal judiciary. This
Court should exercise its supervisory powers to
correct the Third Circuit’s unwarranted departure
from the accepted and usual course of legal
proceedings, and also to give guidance to the lower
courts, which, as here, often honor the legal
principles governing remand and wavier only in the
breach.
18
A. This Court’s Precedents Prohibit Remand
to Reopen the Record When a Plaintiff
Fails to Satisfy Its Burden of Proof.
Few rules are more fundamental to our
adversarial system than the requirement that a
party satisfy its burden of proof, or the necessary
corollary that a failure to do so must result in a
judgment for the opposing party. See, e.g., 1 Jack B.
Weinstein & Margaret A. Berger, Weinstein's
Federal Evidence, § 301.02 at n.8 (Matthew Bender
ed. 2010) (“At trial the penalty for not producing
evidence when obliged to do so is nonsuit, dismissal,
or adverse finding, or when trial is by jury, directed
verdict.”). Permitting a litigant a second
opportunity to prove its case, moreover, runs
contrary to established principles that seek both to
protect parties from the burden of re-litigating issues
and to promote judicial economy. Cf. Parklane
Hosiery Co. v. Shore, 439 U.S. 322, 326 (1979) (when
a party had a “full and fair opportunity to litigate
lits] claims,” that party is not entitled to re-litigate
the issue).
For these reasons, under the decisions of this
Court and the courts of appeals, a plaintiffis not
entitled to a remand to reopen the record following
an appellate court’s determination that the plaintiff
failed to satisfy its burden of proof at trial, unless
some “special circumstance” exists that would make
entry of judgment for the defendant unfair. The
Third Circuit simply disregarded this well-
established rule of appellate procedure, as have other
courts of appeals in a too-sizeable minority of cases.
19
The courts of appeals undoubtedly possess
authority to direct entry of a judgment as a matter of
law for a defendant when a trial verdict for the
plaintiff has been set aside on appeal due to the
insufficiency of the plaintiffs evidence. Weisgram v.
Marley Co., 528 U.S. 440, 457 (2000); Neely v. Martin
Kk. Eby Constr. Co., Inc., 386 U.S. 317, 326 (1967).
Both this Court and the courts of appeals have
identified several factors that govern the decision
whether to direct entry of a judgment for the
defendant, or to remand a case for further
proceedings, following an appellate court’s
determination that the evidence was insufficient to
support a judgment for a plaintiff. These decisions
limit the circumstances in which a plaintiff that
failed to satisfy its burden of proof at trial may
obtain a remand to reopen the record only to those
when entry of judgment for the defendant would be
unfair for some reason outside the plaintiff's control.
When such special circumstances do not exist, a
remand to reopen the record is not appropriate.
For example, in Weisgram, this Court held
that a court of appeals properly reversed a trial
verdict and entered judgment as a matter of law for a
defendant when, following the court of appeals’
exclusion of expert testimony offered by the plaintiff,
the evidence was insufficient to support the verdict.
Weisgram, 528 U.S. at 455-56. There, the plaintiff
was not entitled to a remand because he had notice
throughout the proceedings that the defendant was
challenging his expert, yet made no attempt to
introduce additional evidence or offer grounds for a
new trial. /d. Similarly, in Neely, the court of
appeals concluded that the evidence was insufficient
20
to support a trial judgment for the plaintiff, and it
directed entry of a judgment for the defendant. This
Court affirmed because, in the proceedings before the
court of appeals, the plaintiff “suggested no grounds
for a new trial” or “that any other reason required a
remand to the District Court.” Neely, 386 U.S. at
329. The Third Circuit has also held that “remand
should not be ordered when ‘two bites of the apple’
would be given to a litigant who... has neglected to
produce evidence to support a desired finding and
has, therefore, failed to carry its requisite burden as
to a particular issue.” HEOC v. Westinghouse Elec.
Corp., 925 F.2d 619, 631 (3d Cir. 1991). See also
Concord Boat Corp. v. Brunswick Corp., 207 F.3d
1039, 1063 (8th Cir. 2000) (Plaintiffs “had a full and
fair opportunity to present their case, and the record
evidence was insufficient to justify the verdict.
[Defendant] is therefore entitled to judgment as a
matter of law... .”) (citing Weisgram, 528 U.S. at
444); Mildred Cotler Trust v. United States, 184 F.3d
168, 176 (2d Cir. 1999) (holding that a plaintiff that
failed to satisfy its burden of proof at trial had “no
right to a second opportunity on remand to try to
prove” its case).
Conversely, an appellate court may remand to
reopen the record to allow a plaintiff to supplement
its case only when the plaintiff was prejudiced by
some trial error, change in law, or intervening event.
See, e.g., Neely, 386 U.S. at 327 (suggesting that
remand may be appropriate when the trial court
“itself caused the insufficiency in plaintiff-appellee’s
case by erroneously placing too high a burden of
proof on him at trial”); Duke Power Co. v. Greenwood
County, 299 U.S. 259, 267-68 (1936) (remand
21
appropriate when intervening events require new
proceedings in light of changed factual situation);
Romero v. Pomona, 883 F.2d 1418, 1423 (9th Cir.
1989) (“change in law may warrant reopening a
case,” but not where the change “does not
substantially affect the burden of proof and was
reasonably anticipated by existing law”), overruled on
other grounds by Townsend v. Holman Consulting
Co., 929 F.2d 1358 (9th Cir. 1991) (en bance).
The Third Circuit’s determination to remand
this case conflicts with Weisgram and Neely as well
as with decisions in the Third Circuit and other
courts of appeals. Throughout the proceedings in the
lower courts, the plaintiffs asserted claims under
§ 113(f) and were aware that they may only have had
claims under § 113(f, and not also have claims under
§ 107(a).° Plaintiffs also knew that they bore the
burden of proof under § 113(f), that they relied
exclusively on the June 23rd stipulation to establish
the waste volume of four parties, and that Carpenter
challenged the admissibility of the June 23rd
stipulation, which the Third Circuit ultimately
deemed inadmissible against Carpenter. App. 55a.
But the plaintiffs nonetheless relied on no other
admissible evidence of waste volume for these four
parties to support their § 113(f claims, or even any
argument for a remand on appeal. The Third Circuit
did not so much as discuss the law governing the
propriety of remand or the facts that made this case
* Indeed, Carpenter opposed plaintiffs’ claims under
$107(a), and maintained throughout the trial court proceedings
that plaintiffs only had claims under §113(f), on which they bore
the burden of proof.
No
we)
so unusual as to warrant an unrequested remand.
See App. 57a (stating only that reopening of the
record may be appropriate “in the unusual
circumstances of this case,” without any explanation
or citation to facts or law).
In fact, this case involved a simple failure of
proof, solely within plaintiffs’ control and based upon
their tactical decisions to rely solely on the June 23rd
stipulation as evidence of waste volume for four
PRPs. Under those unexceptional circumstances —
as the Third Circuit itself previously recognized — an
appellate court “cannot remand” for further fact-
finding. KEOC, 925 F.2d at 628. The Third Circuit
apparently concluded otherwise in this case in an
unwarranted attempt to “do justice,” regardless of
the plaintiffs’ failure to prove their case. See App. at
53a (stating that “Carpenter gave the District Court
ample reason to view it as highly culpable”). But as
explained by this Court, “[clourts do not, or should
not, sally forth each day looking for wrongs to right.”
Greenlaw v. United States, 554 U.S. 237, ___, 128 S.
Ct. 2559, 2564 (2008) (quotations omitted).
A review of the case law, moreover, discloses
that the Third Circuit’s error is not without company,
and that this Court’s decisions governing remand
have been inconsistently applied, and even ignored,
by other courts of appeals. For example, in United
States v. Martinez, 606 F.3d 1303 (11th Cir. 2010),
the Eleventh Circuit held that the government failed
to satisfy its burden of proof on a sentencing
enhancement. Although it did not identify any
“special circumstances” to support its decision, the
court ordered a remand to allow the government to
23
reopen the record “even though it amounted to giving
the party a second bite at the apple.” 606 F.3d at
1305. But see United States v. Hagenow, 487 F.3d
539, 542 (7th Cir. 2007) (The government is not
entitled to a remand to reopen the record on a
sentencing enhancement where it “knew what it was
required to introduce to meet its burden, and... [it]
failed to do so.”); United States v. Leonzo, 50 F.3d
1086, 1088 (D.C. Cir. 1995) (same). Other courts of
appeals have similarly failed to heed this Court’s
guidance on the appropriate circumstances for a
remand. See, e.g., Lodge 1858, Am. Fed’n of Gov’t
Employees v. Paine, 436 F.2d 882, 898 (D.C. Cir.
1970) (holding that remand may be appropriate
“even to afford a litigant a second opportunity to do
something he should have done in the first place”
before the district court); Huffman v. United States,
242 F.2d 835, 836 (9th Cir. 1957) (remanding case to
reopen the record where plaintiff failed to prove facts
essential to its case, even though “[i]t would not be
unjust in the rough sense for appellant trustee to lose
his appeal because of the inadequacy of the record
presented here and to the district court”).
In light of these divergent holdings, the Court
should reaffirm the rule that when a court of appeals
finds that a plaintiff failed to satisfy its burden of
proof at trial, it “cannot remand” to reopen the record
absent the “special circumstances” discussed above,
which are not present here. Weisgram, 528 U.S. at
455-56; Neely, 386 U.S. at 329. A contrary rule
would invite appellees to present a request for a
remand in any appeal in which an appellant
challenges the sufficiency of the evidence in support
of a trial judgment. And allowing the Third Circuit’s
24
remand to stand here would invite courts of appeals
to remand cases under no standard, simply upon the
invocation of “unusual circumstances,” when none in
fact exist. A rule of appellate practice that permits
remands whenever the courts of appeals decide to,
undermines basic precepts of legal procedure crucial
to our adversarial system, including most
importantly the requirement that a plaintiff meet its
burden of proof.”
B. The Third Circuit’s Remand Order Also
Violates Established Rules Regarding the
Waiver of Issues on Appeal.
Just as it violated well-settled principles
regarding the propriety of remand, so too did the
Third Circuit violate established rules of appellate
procedure regarding the waiver of issues — another
set of rules that are inconsistently applied by the
courts of appeals. The Court also should exercise its
supervisory authority to bring the practices of the
courts of appeals, including the Third Circuit here,
into line with established precedent on appellate
waiver.
* The statutory power of the federal appellate courts to
order remands is rooted in 28 U.S.C. § 2106, which provides
that the “Supreme Court or any other court of appellate
jurisdiction may . . . require such further proceedings to be had
as may be just under the circumstances.” This Court has
explained that appellate courts must exercise that grant of
authority consistent with the requirements of the Constitution
and applicable rules of procedure. See Unitherm Food Sys., Inc.
v. Swift-Eckrich, Inc., 546 U.S. 394, 402 n.4 (2006).
295
44%
Although Carpenter argued at every
opportunity on appeal that the plaintiffs’ evidence
was insufficient to satisfy their burden of proof under
§ 113() — that is, in its opening brief, reply brief and
at oral argument — the plaintiffs never requested a
remand to reopen the record. Rather, they relied
solely on the argument that they had satisfied their
burden of proof. Litigants are required first to raise
available issues or arguments when a matter is
presented, and a failure to do so results in waiver of
the matter in subsequent proceedings.” See, e.g.,
Knowles v. Iowa, 525 U.S. 113, 116 n.2 (1998) (failure
to raise issue in brief in opposition to petition for writ
of certiorari constitutes waiver of issue); Singleton v.
Wulff, 428 U.S. 106, 120 (1976) (“It is the general
rule, of course, that a federal appellate court does not
consider an issue not passed upon below.”); Williams
v. Leach, 938 F.2d 769, 772 (7th Cir. 1991) (failure to
raise issue in appellate brief constitutes waiver).
By failing to request a remand to reopen the
record for additional evidence on their claims under
§ 113(), the plaintiffs waived any argument that
such a remand was appropriate. And the Third
Circuit, which did not address the waiver issue at all,
should not have sua sponte remanded with
instructions that could give plaintiffs an unrequested
and unwarranted second chance to prove their case
0 The waiver rule admits of few exceptions, none of which
were invoked by the Third Circuit here. See, e.g., United States
v. Hayes, 515 U.S. 737, 742 (1995) (challenge to subject matter
jurisdiction cannot be waived); Gramegna v. Johnson, 846 F.2d
675, 677 (11th Cir. 1988) (court may address otherwise waived
issue to prevent manifest injustice).
26
under § 113(f). This Court has so determined. Se
Forged Steel Wheel Co. v. Lewellyn, 251 U.S. 511,
515-16 (1920) (court of appeals properly reversed
trial verdict and directed judgment for defendant
without remand because there “was no objection
made to that action and no request for a remand of
the case” before the court of appeals), Neely, 386 U.S.
at 329 (same).
The plaintiffs also failed to timely raise any
argument before the Third Circuit (or the District
Court during post-trial submissions) that they could
meet their burden under § 113(f) through the
introduction of new evidence. In fact, plaintiffs
steadfastly maintained before the Third Circuit that
they satisfied their burden of proof to establish an
equitable allocation based on volume."' Accordingly,
had it followed settled law, the Third Circuit should
have concluded that plaintiffs waived their ability to
raise these arguments on remand. See Labor
Relations Div. of Constr. Indus. of Mass. v. Teamsters
'' The Third Circuit correctly found that plaintiffs offered no
evidence of the volumes of waste disposed at the Site of three
plaintiffs and one defendant that settled during trial. In
Appellees’ Brief and at oral argument, plaintiffs argued that
they satisfied their burden to prove these volumes with the
June 23rd stipulation, which the Third Circuit properly found
to be inadmissible against Carpenter, After oral argument,
plaintiffs submitted letters pursuant to Rule 28(j) of the Federal
Rules of Appellate Procedure, FED. R. App. P. 28(j), claiming
that certain invoices and purchase orders introduced at trial
proved plaintiffs’ own waste volume. The Third Circuit held
that these documents were “not evidence of the plaintiffs’ waste
volumes” and were not relied upon by plaintiffs or the District
Court. App. 51a n. 35.
2/
Local 379, 156 F.3d 13, 17 (1st Cir. 1998) (“When a
party could have raised an argument in his initial
appeal, and failed to do so, he has generally waived
his right to raise that argument on remand or on
appeal from remand.”).
The Third Circuit’s failure to abide by the
waiver rule is not an isolated incident, and the courts
of appeals too often disregard the waiver rule
without explanation or justification. See, e.g., United
States v. Bergman, 599 F.3d 1142, 1160 (10th Cir.
2010) (explaining that majority should not have
ordered remand for additional fact-finding where
appellee did not request remand) (Holmes, J.,
dissenting); Lonberg v. City of Riverside, 571 F.3d
846, 853 (9th Cir. 2010) (explaining that panel
majority ignored appellant’s double waiver of issue at
trial and appeal) (Silverman, J., dissenting). See also
Barry A. Miller, Sua Sponte Appellate Rulings: When
Courts Deprive Litigants of an Opportunity to Be
Heard, 39 SAN DIEGO L. REV. 1253, 1256 (2002)
(“[A]ppellate courts have failed to follow any
consistent practice about sua sponte holdings.”)
The waiver rule protects values that are
fundamental to our judicial system. The waiver rule
ensures that litigants have notice of the issues and
arguments relevant to a case. When, as here, a court
grants relief to a party on a basis it did not advance,
the court deprives the opposing party of the
opportunity to respond to the basis of the court’s
order, and the opposing party’s due process right to a
fair hearing is infringed. Cf. Nevada Employees
Ass'n, Inc. v. Keating, 903 F.2d 1223, 1225-1226 (9th
Cir. 1990) (holding that a district court’s sua sponte
28
application of claim preclusion doctrine was not
appropriate when the court did not allow briefing on
issue); N. Am. Coal Co. v. Miller, 870 F.2d 948, 949
(3d Cir. 1989) (holding that due process was denied
to a party that had no opportunity to respond to the
basis of administrative law judge’s award of relief
against it). See also Miller, supra, at 1290
(concluding that sua sponte determinations by
appellate courts deprive litigants of their due proce
rights to notice and an opportunity to be heard)
That is precisely what occurred in this appeal
Carpenter specifically requested both in its brief and
at oral argument that the Third Circuit reverse the
district court’s judgment, and enter judgment in
Carpenter's favor. Plaintiffs at no time, in briefing or
at oral argument, requested or even raised the
possibility of a remand if the Third Circutt held that
plaintiffs did not meet their burden of proof. The
Third Circuit’s remand despite plaintiffs’ failure to
raise or preserve this issue deprived Carpenter of
notice and an opportunity to defend itself on this
dispositive issue, and denied Carpenter’s due proc
rights.
The waiver rule also saleguards the
adversarial nature of our judicial process. As this
Court has explained, “our adversarial system is
designed around the premise that the parties know
what is best for them, and are responsible for
advancing the facts and arguments entitling them to
relief.” Greenlaw, 554 U.S. at 128 S. Ct. at 2564
(quotation omitted)
In um, the Court hould exercase it
upervisory authority to correct the Third Circuit
unwarranted departure from established law
reyvarding appellate waiver, and to reaffirm the
important function of the waiver rule in appellate
practice
CONCLUSION
For the foregoing reasons, the Petition for Writ
of Certiorari should be granted. The Third Circuit
contradicted Atlantic Research and CERCLA when it
held that plaintiffs “incur” their own response costs
for purposes of § 107 of CERCLA when they settle
with parties that have entered into consent decrees
with EPA to perform response actions at a Superfund
site. The Third Circuit also ignored established
precedent when, sua sponte, it remanded to allow
plaintiffs a second opportunity to meet their burden
of proof under § 113(f) of CERCLA for alleged
“unusual circumstances,” which simply did not exist.
Respectfully submitted,
Robert D. Fox
Counsel of Record
Neil S. Witkes
Kathleen B. Campbell
Michael A. Carter
Manko, Gold, Katcher & Fox, LLP
401 City Avenue, Suite 500
Bala Cynwyd, Pennsylvania 19004
(430) 484-5700
Counsel for Petitioner
Carpenter Technology Corp
Dated: August 20, 2010
APPENDIA
Supreme Court, U.S.
FILED
19-279 AUG 29 2010
roa OFFICE OF THE CLERK
No.
IN THE
SUPREME COURT OF THE UNITED STATES
CARPENTER TECHNOLOGY CORPORATION,
Petitioner,
v.
AGERE SYSTEMS, INC., CYTEC INDUSTRIES,
INC., FORD MOTOR COMPANY, SPS
TECHNOLOGIES, LLC AND TI AUTOMOTIVE
SYSTEMS LLC,
Respondent.
ON PETITION FOR WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
APPENDIX TO PETITION FOR WRIT OF
CERTIORARI
Robert D. Fox
Counsel of Record
Neil S. Witkes
Kathleen B. Campbell
Michael A. Carter
Manko, Gold, Katcher & Fox, LLP
401 City Avenue, Suite 500
Bala Cynwyd, Pennsylvania 19004
(430) 484-5700
APPENDIX A
PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No, 09-1814
AGERE SYSTEMS, INC.;
CYTEC INDUSTRIES, INC.; FORD MOTOR
COMPANY;
SPS TECHNOLOGIES, LLC; TI GROUP
AUTOMOTIVE
SYSTEMS, LLC
V.
ADVANCED ENVIRONMENTAL TECHNOLOGY
CORPORATION; ASHLAND, INC.; CARPENTER
TECHNOLOGY CORPORATION;
DIAZ CHEMICAL CORPORATION; FCG INC;
HANDY & HARMAN TUBE CO, INC.; NRM
INVESTMENT COMPANY
Carpenter Technology Corporation,
Appellant
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 02-cv-3830)
District Judge: Honorable Legrome D. Davis
Argued December 17, 2009
sefore: SLOVITER, JORDAN and GREENBERG.
Circuit Judges.
(Filed: April 12, 2010)
Robert D. Fox [ARGUED]
Neil S. Witkes
Kathleen B. Campbell
Manko, Gold, Katcher & Fox, LLP
401 City Avenue - #500
Bala Cynwyd, PA 19004
Counsel for Appellant
Glenn A. Harris [ARGUED]
Amy M. Trojecki
Ballard Spahr Andrews & Ingersol, LLP
Plaza 1000 - Ste. 500, Main Street
Voorhees, NJ 08043
Counsel for Appellees
OPINION OF THE COURT
IIT.
19
Table of Contents
Background... . 2
A. EPA Actions at the Boarhead Site. 3
l. The OU-1 Consent Decree 5
11. The OU-2 Consent Decree 6
11] Carpenter . si
B. Present Suit ...... 9
Stipulations. 10
il. Bench Trial.. . 1]
Statement of Jurisdiction and Standard of
Review. ..... ae hah ig Ae 14
Discussion... . io Se L5
A. Statutory Background Law L5
B. Issues on Appeal. .
a Cytec, Ford, SPS, and TI's $ 113(f)
Claim for Reimbursement of Payments
Made to the EPA for Past Costs. . . 21
Background. . Li
Hl. The Statute of Limitations to
Recover Past Costs.. . aoa ee
1) The Exceptions to the Three-Year
Statute of Limitations Period . 25
Tl and Agere’s § 107(a) Claims to
Recover Costs Paid to Other Plaintiffs
Pursuant to Settlement Agreements. . 32
Background ey ee re 3
1] Section 107(a) Cost Recovery
CeO. 6. 6 cc va vee een
The District Court’s Equitable Allocation
for the Plaintiffs’ Costs of Performing
Work Under the OU-1 and OU-2Consent
EPOCTONE v0 cus 4404804445488 8 ee
Background » , : of
Ll Sections 107(a) and 113(f). .... . 37
ii The District Court’s Equitable
Allocation Under $ 113(f). .
12
iv The June 23rd Stipulation is Not
an Admission that is Admissible
Against Carpenter........... 46
IV.
V Other kuidence Regarding Waste
1Y
Volume:
Other Contentions Regarding the
District Court's Equitable Allocation
l. NRM’'s Wasti
1 The Culpability and Lack of
Cooperation of Settling
Defendants
1). Settlement Amount
The Pennsylvania Hazardous Sit
Cleanup Act
Conclusion
JORDAN, Circuit Judge
This appeal arises from nearly three decade:
of involvement by the Environmental Protection
Agency (“EPA”) at the Boarhead Farms Superfund
Site in Bucks County, Pennsylvania (the “Boarhead
Site” or the “Site”). At issue in the underlying case
was the disposal of millions of gallons of toxic waste,
over a six-year time period, by more than twenty
parties, with millions of dollars of cleanup costs at
stake. Along with the factual issues born of that
history, the case implicates the still developing
distinctions between liability under § 107(a) and §
1134) of the Comprehensive’ Environmental
Response, Compensation, and Liability Act of 1980
and the Superfund Amendments and
Reauthorization Act of 1986 (“SARA”), codified
together at 42 U.S.C. §§ 9601-9675 (collectively
“CERCLA”).
On June 18, 2002, five plaintiffs Agere
Systems, Inc. (“Agere”), Cytec Industries, Inc.
(“Cytec”), Ford Motor Company (“Ford”), SPS
Technology, LLC (“SPS”), and TI Automotive
Systems LLC (“TI”) (collectively “plaintiffs” or
“appellees”) — filed the present suit against twenty
three defendants for cost recovery and contribution
under CERCLA and the Pennsylvania Hazardous
Sites Cleanup Act (“HSCA”), 35 PA. STAT. ANN. §
6020.101-104 et seqg., to recover costs that the
plaintiffs had paid to the EPA pursuant to certain
consent decrees or that they had provided as a
consequence of the cleanup of hazardous substances
at the Boarhead Site. All of the defendants except
one, Carpenter Technology Corporation
(“Carpenter”), settled their liabilities with the
plaintiffs or were otherwise dismissed from the sui
after a bench trial. On August 22, 2008, the United
States District Court for the Eastern District ol
Pennsylvania entered judgment against Carpenter
finding it liable for 80% of the costs paid by th
plaintiffs as of December 31, 2007, plus prejudgment
interest. The Court also entered a_ declarator
judgment that Carpenter is liable for 80% of all
cleanup costs that the plaintiff may incur atter
January l Z008 The District (Court denied
Carpenter's motion to alter or amend the judgment
and Carpenter filed this appeal. For the followiny
reasons, we will vacate the District Court iudyment
and remand for proceedings consistent with thi
OpInion
I. Background
Beginning in 1972 DeRewal Chemical
Corporation (“DCC”) a busimess that removed
transported, and _ disposed of chemical wast
generated by other companies, began illegally
dumping its customers’ waste at the Boarhead Sit
The dumping continued until 1976, when DCC wa
enjoined from bringing any chemicals to the Sits
Between 1973 and 1976 1 the Isuck Count
Department of Health filed over fifteen Waste Discharyr
Inspection Reports reyarding the Boarhead Site. On October 15
1976, an injunction was issued preventing DCC from bringing
any chemicals to the Site. In addition to the Boarhead Site
DCC disposed of its customers’ waste at two other sites, known
to the parties as the Ontario Street property and the
Wissinoming Industrial Park. The former was a rental property
that DCC took possession of on November 15, 1973, on Ontario
Street in Philadelphia, Pennsylvania. On June 13, 1975, the
Philadelphia Water Department sealed the lateral connection
between the Ontario Street property and the city sewer system
after the Department discovered that DCC was improperly
disposing of chemical waste into the city sewer system from the
Between 1984 and 1986, the EPA completed
an initial investigation of the contamination at the
oarhead§ Site Based on the” result of that
investivation, the Site wa added to the KHPA
National Priorities List on March 13, 19895 and thu
became a Superfund site.” Later that year, the IEPA
performed a remedial investigation of the Site to
identify whether there were contaminants that posed
amnsk to human health and the environment. That
Investigation revealed » vanety of hazardou:
ubstances in the soil, sediments, and proundwater
In response, the EPA conducted several small-scale
cleanup actions’ over the next three years to addr
immediate risk
propert On May 19/0). the whoer of DC mensed mother
ite throuvh it ubsidiary located ap thee Wissimmominy
Industrial Park in Philadelphia, DOC eventually ceased use of
that site as a result of concerns raised by the Philadelphia
Water Department the Philadelphia Polee Departinent, and
the IEPA. Those two di DO | its irre not the focu ot the
pore crit i pppoe i!
The NPI, National ly oritie Lost thie bist al
priority releuse lar lony-term reoeds ‘ ihusation mal
response 10 Cle S00. 425(b)
Superfund sit are those hazardou vaste ite listed
on the KPA National Prioritic Last Ser l
ENVIRONMENTAL PROTEC TIONAGI NC Y SUP
be I I: UJ N 1) http://ww W CP POV upertund/inds : htm (la I
isited March 5. 2010
‘In reneral when we use the 4 term ilion Uhrouphout
thi Opinion, we are using ilo refer to environmental cle mup
vor} and not a i ynonym for a lawsurlt
A report of the remedial investigation was
published in January 1997, and, by the following
July, the EPA issued a feasibility study that defined
objectives for a larger-scale response with additional
remedial actions.° In January 1998, the EPA
produced its proposed remedial action plan, based on
both the remedial investigation and the feasabilit
study. Then, on November 18, 1998, it issued its
Record of Decision (“ROD”) respecting the Site.” The
ROD was to be implemented in two stages, which, in
the argot of the EPA, are referred to as “operable
units.” An operable unit is a “discrete action that
comprises an incremental step toward
comprehensively addressing site problems.” 40 C.F.R.
§ 307.14. The two planned for the Boarhead Site
were designated as Operable Unit One (““OQU-1”) and
Operable Unit Two (““OU-2”)
See unfra note 29 regarding the detinitio ot re ed
actions and removal actions
“A ROD provides the justification for the remedial
action (treatment) chosen at a Superfund site. It also contain
site history, site description, site characteristics, community
participation, enforcement activities, past and = present
activities, contaminated media, the contaminants present, scope
and role of response action and the remedy selected for
cleanup.” U.S. ENVIRONMENTAL PROTECTION AGENCY,
SUPERFUND INFORMATION SYSTEMS, RECORD OF
DECISION SYSTEM, http:/www.epa.gov/superfund/sites/rod:
(last visited Dec. 30, 2009)
70U-1 addressed groundwater extraction, metal
precipitation, air stripping, the installation of wells, residential
water treatment, phytoremediation, and the installation of
institutional controls and monitoring for OU-1. OU-2 addressed
soil aeration and treatment of volatile organic compound
hotspots, the excavation and off-site disposal of buried drums,
and the implementation of institutional controls and monitoring
for OU-2
l. Phe OU-1 Consent Decree
On June 2, 2000, the EPA commenced a suit in
the District Court against Cytec, Ford, and SPS,
under § 107 of CERCLA, 42 U.S.C. § 9607,° by filing
a complaint along with a consent decree that those
parties had executed (the “OU-1 Consent Decree”).
The District Court approved the OU-1 Consent
Decree on September 28. 2000. Pursuant to the
mandates of the decree, as well as an administrative
order, Cytec, Ford, and SPS were required to do the
work contemplated for OU-1 and to reimburse the
EPA for its administrative and oversight costs in
connection with the OU-1 cleanup.
Cytec, Ford, and SPS subsequently entered
into a separate settlement agreement with Agere, TI,
and two other companies, whereby they all agreed to
collectively fund and perform OU-! work and to
otherwise comply with ihe OU-1 Consent Decree. All
seven of those companies, which, for convenience, we
will call the “OU-1 group,” have contributed to trust
accounts from which various contractors have been
paid and will continue to be paid to perform the work
required by the OU-1 Consent Decree
"As more fully discussed herein, § 107 authorizes the
United States or a state or “any other person” to seek
reimbursement for removal or remedial costs incurred in
responding to releases of hazardous substances as defined by
CERCLA, provided that those actions are consistent with the
national contingency plan. See 42 U.S.C. § 9607(a). The national
contingency plan has been called “the federal government’s
roadmap for responding to the release of hazardous substances.”
Niagara Mohawk Pwr. Corp. v. Chevron U.S.A., Inc., No. 08
3843-CV, 2010 WL 626064, at *3 (2d Cir. Feb. 24, 2010)
‘Plaintiffs Cytec, Ford and SPS are also signatories to
an EPA Administrative Order for Consent for Remedial Design
executed in February 2000
ue Lhe Ol } ? Consent Decree
On December 6, 2001, the EPA commenced
another suit in federal court under § 107 against
Cytec, Ford, SPS, and TI, by filing a complaint and a
second consent decree that those parties had
executed (the “OU-2 Consent Decree”). The District
Court approved the OU-2 Consent Decree on March
14, 2002. Pursuant to that decree and, again, an
administrative order,” the Court ordered Cytec,
Ford, SPS, and TI to do four things: (1) do the work
contemplated for OU-2; (2) reimburse the EPA for
approximately $7 million in costs related to removal
actions at the Boarhead Site that the EPA had
incurred prior to July 2000;'' (3) reimburse the EPA
for a yet-to-be-determined amount of response costs
incurred after July 2000; and (4) reimburse the EPA
for its other future response costs in connection with
OU-2 work.
Ford, Cytec, SPS, and TI subsequently entered
into a separate, private settlement with Agere
whereby the parties agreed to collectively fund and
perform OU-2 work and to otherwise comply with the
OU-2 Consent Decree. Again for convenience, we will
refer to those five companies as “the OU-2 group.” In
a fashion similar to the OU-1 group, the five
members of the OU-2 group contributed to group
trust accounts from which they paid and _ will
"Plaintiffs Cytec, 10 Ford, SPS, and TI are also
signatories to an KPA Administrative Order for Consent for
Remedial Design, executed on October 17, 2001
"The significance of July 2000 as a pivotal point in the
timing of EPA’s costs and calculations is not clear from the
record
continue to pay various contractors to perform the
work required by the OU-2 Consent Decree.
On March 30, 2007, in exchange for $400,000,
Agere (which had never itself been sued by the EPA),
assigned to Cytec, Ford, SPS, and TI its claims to
recover the approximately one million dollars it had
paid into the OU-1 and OU-2 group trust accounts.
DCC collected and disposed of waste at the
Boarhead Site from more than twenty customers
between 1972 and 1977. Carpenter was one of those
customers and is a Delaware corporation with its
principal place of business in Reading, Pennsylvania.
Carpenter received a notice from the EPA
concerning the Boarhead Site, dated September 28,
2000, asking it to resolve its potential liability to the
EPA for past cleanup costs and further asking that it
agree to perform work required by the EPA’s 1998
ROD, excluding the work outlined in the OU-]
“While none of the 12 parties has raised the issue, we
are left to wonder whether Agere has standing to bring the
present suit against Carpenter after having assigned to others
its right to recover the amounts it paid into the OU-1 and OU-2
group trust accounts. Whether or not Agere has standing,
however, we refer to the claims which orginated with it as
being “Agere’s claims,” since, whether held by Agere or
assignees, the claims themselves remain. On remand, the
District Court should determine who holds these claims and,
specifically, to what extent, if any, Agere retains standing. This
opinion and accompanying judgment order are, obviously, to be
understood as permitting recovery by the parties in interest
only
Consent Decree.’ The letter included a list of ten
previous recipients of similar letters from the EPA
concerning the Boarhead Site. Carpenter did not
comply with the requests in the letter.
B. Present Suit
On June 18, 2002, the five plaintiffs in this
suit Agere, Cytec, Ford, SPS, and TI filed their
original complaint in the District Court against
twenty-three defendants,'* seeking cost recévery and
contribution under CERCLA and under the HSCA
to recoup costs they had paid to the EPA pursuant to
one or more consent decrees or had reimbursed to
one another, all relating to the cleanup of hazardous
substances at the Boarhead Site. By January 21,
2008, the plaintiffs had filed a fifth amended
complaint and seven defendants remained.’ When
the bench trial commenced on June 23, 2008, only
~The basis for that exclusion has not been explained on
appeal
“The original defendants included the following parties
Advanced Environmental Technology Corporation; Ashland
Chemical Company; Boarhead Corporation; Carpenter; Crown
Metro, Inc.; Diaz Chemical Corporation; Etched Circuits, Inc.;
feg, Inc.; Globe Disposal Co., Inc.; Handy & Harman Tube
Company, Inc.; Knoll, Inc.; Merit Metals Products Corporation;
Novartis Corporation; NRM Investment Company; Plymouth
Tube Company; Quickline Design and Manufacturing Company;
Rahns Specialty Metals, Inc; Rohm and Haas Company; Simon
Wrecking Co., Inc.; Techalloy Co., Inc.; Thomas & Betts
Corperation; Unisys Corporation; and the United States of
America Department of Navy.
At the time of the fifth and final amended complaint,
the defendants included Advanced Environmental Technology
Corporation; Ashland Chemical Company; Carpenter; Diaz
Chemical Corporation; feg, Inc; Handy & Harman Tube
Company, Inc.; and NRM Investment Company
two defendants were left, Handy & Harman Tube
Company, Inc. (“H&H”) and Carpenter.'” After trial,
H&H was granted an unopposed motion to dismiss,
leaving Carpenter as the sole remaining defendant.
i. Stipulations
‘
The parties’’ entered into several stipulations
before and during trial, to narrow the factual and
legal issues before the District Court. First, they
signed a stipulation of background facts, many of
which have been noted here already.’° Second, on
June 19, 2008, they stipulated to the volume of waste
that DCC collected from fifteen other companies,
fourteen of which were defendants. Carpenter’s
waste was not included in that stipulation. Third, on
June 23, 2008, the plaintiffs and defendant H&H
stipulated to the volume of waste that DCC collected
from three of the plaintiffs — Cytec, Ford, and SPS —-
and from H&H. Importantly, Carpenter did not join
that stipulation. Finally, on July 1, 2008, the
plaintiffs, Carpenter, and H&H stipulated to the fact
that the waste described in the June 23 stipulation
was hazardous waste as defined by CERCLA. They
also stipulated that DCC had not hauled any waste
from TI or Agere to the Boarhead Site. Thus, while
"By the time of the bench trial, all of the other
defendants had either settled or had been granted unopposed
motions to dismiss or unopposed summary judgment motions.
From this point forward, references to “the parties” are
to the named plaintiffs in this suit and Carpenter, unless the
context dictates otherwise.
"The exact date on which the parties entered into this
stipulation is not entirely clear from the record. The signature
page, however, suggests that the date might have been June 18,
2008. (See App. at 14:A6390.)
l4a
the effect of the July Ist stipulation is contested, it is
undisputed that Carpenter never directly stipulated
to the volume of waste that Cytec, Ford, SPS, and
H&H had contributed to the Boarhead Site.
il. Bench Trial
Pursuant to CERCLA, the District Court’s
responsibility included “allocatling] response costs
among liable parties using such equitable factors as
the court determine|[d] [to be] appropriate.” 42 U.S.C.
§ 9613(fN(1). The Court decided that the parties’
various volumes of waste at the Boarhead Site
constituted the most equitable basis upon which to
allocate costs. Hence, the purpose of the bench trial,
held in July of 2008, was to figure out as a matter of
fact what those volumes were, including the volumes
attributable to Carpenter. The Court also held that
culpability and the degree of cooperation the parties
had demonstrated in dealing with the cleanup should
be considered in allocating response costs.
The District Court found that the plaintiffs
had incurred costs totaling $13,678,378.55 as of
December 31, 2007.’° The Court then concluded that
those costs had been incurred of necessity in
complying with the requirements of the ROD. The
Court also held that cleanup at the Boarhead Site
must continue until the organic and inorganic
contaminants in the’ groundwater’ reach = an
WwW 6
The costs broke down as follows:
Agere: $902,152.49
Cytec: $3,368,551.07
Ford: $3,354,122.22
SPS: $3,354,122.22
TI: $2,699,430.55
acceptable level as set forth by the EPA in the ROD.
Thus, the Court noted, the plaintiffs will continue to
incur costs for the foreseeable future
To prove the waste volumes at the Site, the
plaintiffs presented testimony from truck drivers
who had been employed by DCC. Based on that
testimony and the above-described stipulations, the
Court calculated the volume of waste that DCC
collected from each of the parties, and_ then
calculated what percentage of that waste was
disposed of at the Boarhead Site. Regarding
Carpenter's waste volumes, the Court also had the
benefit of Carpenter’s business’ records, which
confirmed parts of the testimony of the DCC drivers.
The Court found that Carpenter’s waste constituted
62.6% of the hazardous waste disposed of at the
Boarhead Site.”
The plaintiffs also presented evidence that in
1969 Carpenter hired two waste collection
companies, Revere Chemical Company (“Revere”)
and Echo, Inc. (“Echo”), to haul its waste acids.
Carpenter knew that Manfred DeRewal, who later
founded DCC, was the president of Revere and Echo.
The evidence showed that in 1970 Carpenter learned
that Revere and Echo were shut down for unlawful
“The 62.6% was calculated as follows: the Court found
that the volume of waste disposed of at the Boarhead Site from
all of the plaintiffs, and the settled and dismissed parties, as
well as Carpenter, was 1,594,668 gallons. The Court found that
the total volume of waste disposed of at the Boarhead Site by
Carpenter was 998,284 gallons. Thus, the Court determined
that Carpenter’s percentage share of the total volume was 62.6
‘é)
“€
polluting practices.“’ Nevertheless, in June 1973,
Carpenter hired DCC, which Carpenter knew was
owned by DeRewal, simply because DCC’s bid was
significantly below the competing bids. Because
“Carpenter relinquished its potent waste acids to a
known polluter,” and because Carpenter did not
cooperate with the EPA, the Court allocated to
Carpenter an additional 17.4% of the total clean-up
cost — 8.7% for repeatedly working with a known
polluter and 8.7% for not cooperating with the EPA
holding that “culpability is an appropriate equitable
factor in resolving contribution claims.” (App. at
1:A72.)-" In other words, the Court adjusted
Carpenter’s share of liability above what it had
determined to be Carpenter’s volumetric share of
waste, based on Carpenter’s significant culpability in
creating a Superfund site and its lack of cooperation
in cleaning it up.
On August 22, 2008, the District Court
entered judgment against Carpenter, finding it liable
for 80% (62.6% plus 8.7% plus 8.7%) of the
$13,678,378.55 paid by the plaintiffs as of December
31, 2007, plus prejudgment interest. That resulted in
a judgment of $10,942,702.84 against Carpenter. The
remaining 20% of lability was allocated to the
plaintiffs. The Court also entered a declaratory
judgment that Carpenter is liable for 80% of all
future costs, as measured from January 1, 2008, for
“'The record is not clear as to what regulatory authority
or authorities decided that Revere and Echo could no longer
operate
““We refer to the appendix on appeal by the volume
number followed by a colon and the page number on which the
cited material appears, followed by specific paragraphs, if
applicable.
response actions pursuant to the OL-1 and the OU-2
Consent Decrees. Finally, the Court found that
Carpenter's lability under the HSCA parallels its
liability under CERCLA.
Carpenter filed a motion to alter or amend the
judgment, which the District Court denied on
february 20, 2009. Carpenter then filed a timely
notice of appeal to our Court
II. Statement of Jurisdiction and Standard
of Review
The District Court had jurisdiction over the
plaintiffs CERCLA claims pursuant to 42 U.S.C. §
9613(b) and 28 U.S.C. § 1331. It had supplemental
jurisdiction over the HSCA claims under 28 U.S.C. §
1367. We have jurisdiction pursuant to 28 U.S.C. §
129]
“We may set aside ja] district court’s findings
of fact only if they are clearly erroneous.” MC Corp.
v. U.S. Dep't. of Commerce, 29 F.3d 833, 838 (3d Cir.
1994): cf. In re Fruehauf Trailer Corp., 444 F.3d 208,
210 (3d Cir. 2006) (explaining that “{flactual findings
may only be overturned if they are completely devoid
of a credible evidentiary basis or bear no rational
relationship to the supporting data” (citation
omitted) Gnternal quotation omitted)).
Hlowever, we review a_ district court’s
allocation of CERCLA response costs for abuse of
discretion. Beazer E., Inc. v. Mead Corp., 412 F.3d
429, 446 n.18 (3d Cir. 2005). “An abuse of discretion
occurs when ‘the district court’s decision rests upon a
clearly erroneous finding of fact, an errant conclusion
of law or an improper application of law to fact.” /d
(quoting Intl Union v. Mack Trucks, Inc., 820 F.2d
91, 95 (3d Cir. 1987))
Finally, we exercise plenary review over 2a
district court’s interpretation of CERCLA, including
statute of limitations issues. United States v. Se. Pa
Transp. Auth., 235 F.3d 817, 822 (3d Cir. 2000); see
also New Castle County v. Halliburton NUS Corp
111 F.3d 1116, 1120 (3d Cir. 1997) (explaining that
in approaching a statute of limitations issue, we
must “exercise plenary review over the district
court’s interpretation of the relevant CERCLA
provisions )
iit. Discussion
Statutor \ Ka
All of Carpenter contention on appeal
involve the viaintiffs’ claims under CERCLA § 107(a)
for cost recovery and § 113(f) for contmbution. Thu
we present a brief overview of those two statutory
remedies before addressing Carpenter pecili
contentions
CERCLA provides two mechanisms that allow
potentially responsible parties (“PRPs”) to recover
costs they have expended to decontaminate a
polluted site: § 107(a) cost recovery claims and
113() contribution claims. The first option, § 107(a),
provides that PRPs are liable for “any ... necessary
costs of response incurred by any other person”
consistent with CERCLA.” 42 U.S.C. § 9607(a)(4)(B)
Section 107(a) thus allows private parties to bring
cost recovery suits against other PRPs,“ and courts
have developed several principles for application in
such suits. 4 THE LAW OF HAZARDOUS WASTE &
14.01{2\||c] (Susan M. Cooke, ed., 2009). Significantly
S 107(a) allows for complete cost recovery under a
joint and several liability scheme. See N.J. Tpk
Auth. v. PPG Indus., Inc., 197 F.3d 96, 104 (3d Cir
1999). Initially, “[Wlhen CERCLA was first enacted,
[(§ 107 cost recovery] was the only remedy available,
and lclourts struggled with whether PRP:
(themselves liable for some of the cleanup) could
invoke § 107 for contribution from other PRPs for
their proportionate share of the costs as opposed to
full cost recovery.” Niagara Mohawk Pwr. Corp
2010 WL 626064, at *3
Congress ultimately provided the lanpuape
necessary to authorize contribution under CERCLA
when it added § 113 to the statutory scheme with the
passage of SARA. /d. at *3. Section 113(D specifically
is a second means of recouping cleanup costs, and it,
in turn, provides two avenues of relief. Under §
L13(f)(1), a PRP can seek contribution from another
Section 107( a) actually says “consistent with the
national contingency plan,” see 42 U.S.C. § 9607(a), which, as
noted above (supra note 8), is the federal government's plan for
responding to releases of hazardous substances. Niagara
Mohawk Pwr. Corp., 2010 WL 626064, at *3
“Section 107 also provides the EPA with a mechanism
to recover costs from PRPs, stating that PRPs are liable for “all
costs of removal or remedial action incurred by the United
States Government or a State or an Indian tmbe_ not
inconsistent with the national contingency plan.” 42 U.S.C, §
9607(aX4 (A). This aspect of § 107 is not at issue in the present
matter
PRP during or following a CERCLA suit brought
against the first PRP. 42 U.S.C. § 9613(01(1):; see also
United States v. All. Research Corp., 551 U.s. 128
139) (2007) (explaining that Istection = 113(1)01)
authorizes a contribution action to PRP with
common liability : temming from an action instituted
under [CKERCLA|]”). Likewise, under §113(0D(3)(B)
PRPs who resolve their liability to the United Stat
or an individual State through an administratively or:
judicially approved settlement can seek contribution
from another PRP. 42 U.S.C. § 9613(1)(3)(B): see also
Atl. Research Corp., 551 U.S. at 139 n.5 (“Similarly
113(1)(3)0B) permits a PRP to seek contribution afte:
it ‘has resolved its liability to the United States or a
tate in an administrative or judicially approved
ettlement ' (quoting 12 | + G6 131K 3)(B
in \tlantu Research Line Supreme Court
endeavored to clanfy the relationship between
107(a) cost recovery claims and §& 11314) contribution
claims, noting that those remedies are distinct. Se
Atl [ee search Corp D>] LJ + “al 13e Section
lO7(a) and 1131) provide two ‘clearly distinet
remedies. ‘CERCLA providels] for a right to cost
recovery in certain circumstances, § 107(a), and
separate nights Lo contribution in others
circumstances, 98 1138(1)(1), 118CD(3)(B) (quoting
Cooper Indus., Inc. v. Aviall Serv., Inc., 548 U.S. 157
163 n.3 (2004))). With regard to 9 1138(f contribution
claims, the Court held that a private party may not
bring a contribution claim unless it has been sued
under § 106 or § 107 of CERCLA.25” See Cooper
Section 106 authorizes the United Stat to bring a
uit seeking injunctive relief to abate “imminent = and
substantial endangerment” resulting from the release of a
hazardous substance. The section also authorizes the EPA to
Indu Lie 454 I if 16 explain (} f mares
authorize contribution bain) only durin Or
following a civil action unde 106 o1 1O/(a) ry
tlso Atl. Research Clorp 51 I itt 1.389 f ection
LV4(f01) authorize » contribution action. t Pith
it] common lability Leming iro if) CLIO
instituted under (Oh RCLA Wit! re id= |
lOVla) cost recovery claimm the Court held that
ri ibe parti who voluntarily undertake rcleanmti
iCcLION and iS therefore unable to sue under 11.3]
because tt remediated the hazardou iterial |
without the pudicial pul QO] 106 or lOy Can See)
recovery ol response « unde! lOV(a 4B
Viavpara Mohawk Pu ( } O10 WI, 686064. at
describing All. Research Corp Hl | it 149)
Phu : private party m recover under 1O%
Without any establishment of lability on it art ft
third party, including the vovernment. Atl. ft
(orp yl I at 1.39
In short, the ¢ Lhe di
follo
liihe remedu avi bie in hOs/la na
1 16301) complement each other 1)
providing cau ol action to person i)
different procedural circumstance
section 1 T.sCh 01) authorize ’
contribution action to PRPs with common
liability Lemminy irom an action
instituted unde: LO7(a). And LO/Ca
uc an administrative order to abut wh a conditios ve A
U0. 9606, see also 4 VHE LAW OF HAZARDOLI WAST I
14.02) 1lic] (Susan M. Cooke, ed., 2009
permits cost recovery (as distinct from
contribution) by a private party that has
itself incurred cleanup costs.
Id. (citations omitted) (internal quotations omitted).
Despite this clarification, navigating the interplay
between § 107(a) and § 113(f) remains a deeply
difficult task. See New York v. Solvent Chem. Co.,
Inc., No. 83-CV-1401-JTC, 2010 WL 376328, at *67
(W.D.N.Y. Jan. 26, 2010) (“[RJecent rulings have
done little to provide the lower courts with useful
guidance in determining which subsection’ of
CERCLA provides a cause of action for parties
seeking reimbursement of response costs in differing
Situations.”); see also id. at *64 (“Perhaps most
perplexing is the interplay between the two cost
recovery provisions which this court must apply in
resolving the difficult factual and legal issues.”). The
sometimes blurry relationship between § 107(a) cost
recovery claims and § 113(f) contribution claims is a
theme to which we will return repeatedly in this
opinion.
B. Issues on Appeal
The issues raised by Carpenter on appeal can
be grouped into six overarching contentions.
The first is that plaintiffs Cytec, Ford, SPS,
and TI cannot bring a § 113(f) contribution claim for
the approximately $7 million they paid to the EPA
under the OU-2 Consent Decree to reimburse the
EPA for its response costs because the EPA’s suit to
enforce the OU-2 Consent Decree was time-barred.
According to Carpenter, it does not share a common
liability with those plaintiffs because none of the
plaintiffs could have been sued by the EPA at the
time they chose to settle with the agency.
Second, Carpenter argues that Agere and TI
cannot bring a § 107(a) cost recovery claim for sums
they paid pursuant to private settlements with other
plaintiffs, as opposed to sums paid to the EPA
directly, because § 107(a) does not allow for the
recovery of such payments.
Third, Carpenter argues that those plaintiffs
who signed the OU-1 and OU-2 Consent Decrees
Cytec, Ford, and SPS — as well as TI, who signed the
OQU-2 Consent Decree only, do not have § 107(a) cost
recovery claims for costs expended pursuant to the
OU-1 and OU-2 Consent Decrees because, once a
party has been sued or has settled under CERCLA,
that party may pursue only a § 113(f contribution
claim. Thus, Carpenter contends, those plaintiffs
have nothing but § 113(f) available as a vehicle for
trying to recover the amounts they expended to
comply with the OU-1 and OU-2 Consent Decrees.
Fourth, recognizing that the District Court
proceeded under § 113(f) with regard to those claims,
and not under § 107(a), Carpenter argues that Cytec,
Ford, SPS, and TI failed to present evidence of the
total volume of waste disposed of at the Boarhead
Site and, therefore, the District Court’s allocation of
liability among the parties under § 113(f) cannot
stand. Specifically, Carpenter argues that, other
than the stipulation that it refused to sign, the
plaintiffs have failed to introduce any evidence of the
volume of waste for which Cytec, Ford, SPS, and
H&H are responsible. Without evidence as to those
parties, says Carpenter, it is impossible to know the
24a
total volume of waste disposed of at the Boarhead
Site.
Fifth, Carpenter argues that the District Court
erred in three ways in its cost allocation. First,
Carpenter contends that the Court miscalculated the
volumetric share of waste that former defendant
NRM sent to the Boarhead Site. Next, Carpenter
says that the Court did not consider other
defendants’ culpability or lack of cooperation with
the EPA to the same extent that it considered
Carpenter's lack of cooperation and culpability. As its
last cost allocation point, Carpenter contends that
the District Court wrongly considered the settling
defendants’ volumetric share of waste, rather than
the dollar amounts that the plaintiffs obtained from
those settling defendants, when the Court performed
its equitable allocation.
Sixth and finally, Carpenter argues that, since
‘
S$ 702(a\(3) of the HSCA mirrors .§ 107(a)(4)(B) of
CERCLA, the plaintiffs do not have a viable claim
under that section of the HSCA, for the same reasons
that Carpenter believes the plaintiffs do not have a
claim under 8 107 of CERCLA.
C. Cytec, Ford, SPS, and TI's $ 113(f)
Claim for Reimbursement of Payments
Made to the EPA for Past Costs
Background
The OU-2 Consent Decree obligated the
plaintiffs who signed it — Cytec, Ford, SPS, and TI
to reimburse the EPA for a percentage of past
response costs that the EPA had incurred in various
25a
removal efforts at the Boarhead Site, including work
related to the OU-1 Consent Decree. Specifically,
pursuant to the QU-2 Consent Decree, Cytec, Ford,
SPS, and TI agreed, among other things, to
reimburse the EPA for approximately $7 million in
response costs incurred and accounted for prior to
July 2000. In their fifth amended complaint, those
four plaintiffs asserted a contribution claim under §
113(f), seeking reimbursement from Carpenter for
that $7 million.
On appeal, Carpenter argues that’ the
plaintiffs cannot recover the $7 million because there
was no “common liability” among Carpenter and the
plaintiffs at the time the plaintiffs settled with the
KPA, as required by Atlantic Research. More
particularly, Carpenter contends that no common
liability exists because, when the EPA brought suit
against the plaintiffs on December 6, 2001 to enforce
the OU-2 Consent Decree, that suit, and therefore
any hypothetical suit against Carpenter, was time-
barred. The plaintiffs, of course, say that Carpenter
is mistaken about the statute of limitations.
The Statute of Limitations to
Recover Past Costs
Contribution claims under § 113() require a
“common liability’ among PRPs at the time the
underlying claim is resolved. See Atl. Research Corp.,
551 U.S. at 139 (“[A] PRP’s right to contribution
under § 113(f)(1) is contingent upon ... common
liability among liable parties.”); In re Reading Co.,
115 F.3d 1111, 1224 (3d Cir. 1997) (““Contribution, by
its own definition, requires a common liability for the
same injury.”), abrogation on other’ grounds
recognized by EWI. DuPont De Nemours & Co. v.
United States, 460 F.3d 515, 518 (3d Cir. 2006).
Thus, Carpenter correctly asserts that, in order for it
to be lhable under § 113(f), it must have had a
“common lability” with the plaintiffs at the time the
EPA filed suit to enforce the OU-2 Consent Decree.
In other words, the EPA claim must have been viable
against both the plaintiffs and Carpenter at the time
the EPA sought to enforce the OU-2 Consent Decree;
otherwise, there is no “common liability’ to serve as
the basis of a contribution action.” (Appellant’s Op.
Br. at 14.) Hence, this contention boils down to a
question about the applicable statute of limitations.
The timeliness of an EPA suit to recover costs
associated with a removal action is governed by §
113(2)2), which requires that any such suit be
brought “within 3 years after completion of the
removal action.” 42 U.S.C. § 9613(g)(2)(A). At the
same time, the statute provides for three exceptions
that extend the limitations period. Before addressing
those, however, we must describe more _ fully
Carpenter’s statute of limitations argument and an
essential flaw in the District Court’s decision.
Carpenter argues that the EPA’s claim is time
barred because the EPA completed its removal action
on November 18, 1998, but did not initiate its lawsuit
against the plaintiffs until December 6, 2001, more
than three years after the completion of the removal
action. As Carpenter sees it, since none of the
exceptions to the three-year statute of limitations
apply, the EPA’s lawsuit against the plaintiffs was
untimely, and, if Carpenter had been named as a
defendant, the EPA’s claims against it would have
been untimely too. Carpenter has rightly identified
the completion of the removal actioa as the point
from which the statute of limitations begins to run.
The District Court held that the EPA “conducted a
single ‘remeval action’ which ended, at the earliest,
on November 18, 1998, when EPA issued the ROD.”
(App. at 1:A64.) In an accompanying footnote in its
opinion, however, the Court said, “[ilt is more likely
that EPA’s removal action was ongoing as of
September 28, 2000.” (App. at 1:A64 n.38.) Despite
its “at the earliest” caveat when citing the November
18, 1998 date, and also despite its comment on the
“more likely” course of events, the District Court
went on to say that, in order to give Carpenter every
reasonable consideration, it would “select[]” the
November 18, 1998 date as the date that the EPA
completed the removal action. (/d.)
Given the magnitude and complexity of the
record, as well as the decades of EPA involvement at
the Boarhead Site, we can appreciate the difficulty in
determining the time frame within which the EPA
completed its removal action. Nevertheless, by
stating that it was “more likely” that removal work
was ongoing on September 28, 2000, but then
“selectling}” the earlier date of November 18, 1998 as
the date that work was completed, the Court has left
a legally significant ambiguity in the record. There is
no clear finding of fact as to a date or even a range of
dates within which the EPA’s removal work was
completed.
Of course, a court may, for analytical purposes,
assume facts in favor of a party to demonstrate that,
even under that party’s most advantageous view of
the record, legal relief is unavailable. That appears
to have been the District Court’s intention here.
28a
x
Nevertheless, the opinion is not entirely clear and
there is a strong implication that the completion date
of the EPA’s removal work was later than the
selected date, which, if true, is of real importance in
this case. If the removal work was ongoing as of
September 28, 2000, as indicated by the Court, then
the applicability of complicated exceptions to the
three year statute of limitations becomes irrelevant,
and the EPA’s suit was timely regardless of those
exceptions.
Because the District Court has not made a
factual finding sufficient to determine whether or not
the EPA’s December 6, 2001 enforcement suit for the
OU-2 Consent Decree was timely under the three-
year statute of limitations, we will vacate the
judgment and remand for the Court to make an
unequivocal finding as to the date or time period
within which the EPA completed its removal action,
if such a finding is possible.*° To the extent the
District Court needs to reopen the record in order to
resolve this ambiguity, it may do_ so, since
Carpenter’s statute of limitations defense makes the
date on which the EPA completed its removal action
a potentially claim-dispositive fact.’
*°We do not discount the 26 possibility that the District
Court did not make a definitive finding because the record
would not support one. Also, if the District Court’s finding of
fact turns out to be that the removal action ended sometime
after September 28, 2000, that will be sufficient, since, with
that finding, Cytec, Ford, SPS, and TI’s claims to recover for
their approximately $7 million reimbursement to the EPA for
past response costs would be timely, as is more fully discussed
herein. See infra Section IIL.C. iii.
*“’We also ask the District Court to make a definitive
finding as to the amount that the OU-2 plaintiffs paid to
reimburse the EPA for past costs. While the stipulated facts cite
the amount as $7 million in one place, in another place it
29a
The Exceptions to the Three-Year
Statute of Limitations Period
As the District Court rightly recognized, the
EPA’s suit to recover past costs could still be timely
even if the earlier November 18, 1998 date is correct,
assuming that an exception to the statute of
limitations applies. Though there are three
exceptions generally available, the only one possibly
of consequence is found in 42 U.S.C. § 9613(g¢)(2)(B),
which is the one the District Court applied.“
appears to be approximately $7.4 million, and Carpenter cites
the amount as é 7.4 million. (Compare App. at 14:A6379 { 40,
and App. At 14:A6383 J 59, with Appellant’s Op. Br. at 13.)
““The two other exceptions to the three-year statute of
limitations are of no practical effect. The first exception, the
“subsequent action” exception, is simply not applicable. That
exception pertains to situations in which the EPA has brought
more than one legal action (and here the term “action” is being
used as a synonym for “lawsuit”) against the plaintiffs to
recover costs. The statute provides that if the EPA’s suit is a
“subsequent action” to recover further response costs (1.e., there
has already been an “initial action” to recover response costs),
the suit must be commenced no later than 3 years after the date
of completion of the initial action. See 42 U.S.C. § 9613(g)(2). A
“subsequent” suit for further response costs can “be maintained
at any time during the response action, but [it] must be
commenced no later than 8 years after the date of completion of
the response action.” /d. § 9613(gX2)(B). The plaintiffs argue
that the EPA’s 2001 suit was a timely subsequent action,
because the three-year limitations period applies only to the
EPA’s initial action, which they identify as the EPA’s June 2,
2000 suit against Cytec, Ford, and SPS to enforce the OU-1
Consent Decree. Appellees contend that “{ijJt does not matter
that Carpenter was not a defendant in the 2000 EPA action”
because the statute does not indicate that the defendant must
have been a party to the initial action. (Appellees’ Ans. Br. at
23.) That argument fails. The EPA sued Cytec, Ford, and SPS
in 2000, but not Carpenter. Thus, the only parties against
which the EPA brought a subsequent action in 2001 are Cytec,
3Oa
Ford, and SPS. As a result, the “subsequent action” exception is
inapplicable here. See United States v. Navistar Intl Transp.,
152 F.3d 702, 710 (7th Cir. 1998) (“We believe that, from the
language and structure of the statute, a ‘subsequent action
for further response costs’ must be one brought against the
same party or parties against which an ‘initial action’ to recover
such costs has been maintained.” (quoting 42 U.S.C. §
9613(g2)).)
The second exception is an al ?*rnative limitations
period that may well be applicable here. ‘Inat exception states
that when the EPA grants a consistency waiver under §
104(cX1)C) to extend the removal action, the limitations period
is six years, rather than three years, from the date of a
determination to grant that waiver. See 42 USC. §
9613(g) 2A). In other words, the EPA must bring its suit
within six years of the grant of a consistency waiver, regardless
of when its removal action is completed. The parties have not
defined the term “consistency waiver,” but publicly available
information from the EPA indicates that a consistency waiver
“is an exemption to the statutory limits of two million dollars in
expenditures ... for removal actions.” Memorandum from Lon
Biasco, On-Scene Coordinator with the U.S. Envtl. Prot.
Agency, to Myron O. Knudson, Region 6 Superfund division Dir.
of the U.S. Envtl P ro t. Agency, g
http://www.epa.gov/region6/6sf/louisiana/ag_street/important d
ocuments/action_memo_agstreet.pdf. The EPA performed a
1992 removal action at the Site pursuant to a consistency
vaiver it had granted on September 4, 1992. Under §
113(g)(2XA), then, the EPA had to file its suit to recover those
costs no later than September 4, 1998, six years from the grant
of the waiver. Carpenter argues that since the EPA did not file
the OU-2 suit until after 1998, the suit is barred under the
“consistency waiver” exception. However, Carpenter concedes
that the EPA’s 1992 consistency waiver only appled to one
specific remedial action, which cost $4.3 million. All of the
EPA’s other costs are not subject to the “consistency waiver’
exception. Plaintiffs and Carpenter acknowledge that the EPA
incurred costs on the order of $14 million and only sought
reimbursement for $7.4 million. Thus, even accepting
Carpenter’s argument that $4.3 million of the EPA’s past costs
are time-barred, the EPA still has claims for approximately $10
million which are not time-barred under the consistency waiver
exception. Therefore, the EPA’s $7.4 million claim remains
recoverable.
Section 9613(¢g)(2)(B) states that removal costs may
be recovered as part of a remedial action suit, which
effectively extends the statute of limitations to six
years from the _ initiation of physical on-site
construction of the remedial action. However, to
recover such costs, the remedial action suit must be
initiated within three years after the completion of
the removal action.” Jd. In other words, the
“Removal actions are defined as
the cleanup or removal of released
hazardous substances from the
environment, such actions as may be
necessary taken in the event of the threat of
release of hazardous substances into the
environment, such actions as may be
necessary to monitor, assess, and evaluate
the release or threat of release of hazardous
substances, the disposal of removed
material, or the taking of such other actions
as may be necessary to prevent, minimize,
or mitigate damage to the public health or
welfare or to the environment, which may
otherwise result from a release or threat of
release. The term includes, in addition,
without being limited to, security fencing or
other measures to limit access, provision of
alternative water supplies, temporary
evacuation and housing of threatened
individuals not otherwise’ provided for,
action taken under section 9604(b) of this
title, and any emergency assistance which
may be provided under the Disaster Relief
and Emergency Assistance Act [42 U.S.C. §
5121 et seq.|
12 U.S.C. § 9601(23)
kKkemedial actions are defined as
those actions consistent with permanent
remedy taken instead of or in addition to
removal actions in the event of a release or
threatened release of a hazardous substance
into the environment, to prevent or
limitations period may be extended if the EPA
|
attempts to recover removal costs during a remedial
action suit, rather than in a removal action suit. See
id. But, if the EPA seeks to do so, it must bring that
remedial action suit “within 6 years after |the]
initiation of physical on-site construction of the
minimize the release of hazardous
substances so that they do not migrate to
cause substantial danger to present or
future public health or welfare or the
environment. The term includes, but is not
liamited to, such actions at the location of the
release as storage, confinement, perimeter
protection using dikes, trenches, or ditches,
clay cover, neutralization, cleanup of
released hazardous substances and
associated contaminated material:
recycling or reuse, diversion, destruction
segregation of reactive wastes, dredging o1
excavations, repair or replacement of
leaking containers, collection of leachat
and runoff, onsite treatment or incineration
provision of alternative water supplies, and
any monitoring reasonably required to
assure that such actions protect the public
health and welfare and the environment
The term includes the costs of permanent
relocation of residents and businesses and
community facilities where the President
determines that, alone or in combination
with other measures, such relocation 1
more cost-effective than and
environmentally preferable to the
transportation, storape, treatment
destruction, or secure disposition offsite of
hazardous substances, or may otherwise be
necessary to protect the public health or
welfare; the term includes offsite transport
and offsite storage, treatment, destruction
or secure disposition of hazardous:
substances and associated contaminate
material:
ld. § 9601(24)
remedial action,” and the remedial action must be
initiated within three years after the completion of
the removal action. /d. Given the language of &
9613(g)2)(B), we read the requirement that remedial
action (1.e., remedial work at the site) be “initiated”
within three years of completion of the removal
action (.e., removal work at the site) to mean that
the physical on-site construction of the remedial
action has to be initiated within that three-year tims
period. As Carpenter notes, any other interpretation
of that language would create two different meaning:
of the word “initiate” in § 9613(2)(2)(B), and, more
importantly would eviscerate the three-year statute
of limitations period for removal actions contained in
$9613(2)2)(A).” Thus, whether the § 9613(¢)(2)(B)
The text of the relevant provision 18 a foOllov
An initial action for recovery of cost must
be commenced (3) for a remedial action
within 6 years after initiation of physical on
ite construction of the remedial action, exc pt
that. if the remedial action is initiated within
3 years after the completion of the removal
ction, costs incurred in the removal action
may bo recove red if} the cost rCCOVCTY mcuLon
brought under this subparapraph
i2 U.S.C 9613( 2) 7). When the drafters first used a form of
the word “initiate” in thi ection, it 4 pecified as being the
initiation of physical n-site construction of the remedial
action.” ‘Thus, when the word “initiate” is used a second time, in
the very next entence, we re id the statute to araiIn mean the
initiation of physical on-site construction,” rather than the
initiation of some other environmental cleanup endeavor. A
Carpenter persuasively argues, to read the tatute otherwise
undermine the statute of limitation
lf KPA could use the Ix year limitation pert a
in § 113¢¢)2XB) simply by incurring any typ
of response costs after issuance of the ROD
but before mitiation of qr) ite construction ol
the remedial action. the three yvear limitatiol
’
exception appli rm te present cas wan
depe ndent upon the Lime tna thy } VPA compl 1 ¢ a 7
removal work
Carpenter argues that the EPA completed it
removal action on November 18, 1998, when it issued
the ROD, because case law supports the idea that, for
tatute of limitations purposes, a removal action |
complete upon the issuance of a ROD. (Se
Appellant’s Reply Br. at 9 (citing, inter alia, Kelley
IKI. DuPont de Nemours & Co... 17 F.3d 836. 834-44
(6 Cir. 1995)).) Plaintiffs, however, note that in the
OU-1 Consent Decree, filed September 2k POOO. the
KPA stated that it “conducted lal removal action at
the Site beginning in the year 1992 and continuing to
the present (App. at 5:A2132, 4 G.) Thu ry thie
plaintiffs, the ITPA has essentially affirmed that it
removal action wa ongoing a of eptember Z
2000
\yvain, a with tl ef] the thre
tatute of limitation we cannot ther th
exception applies because the District ¢
made a definitive factual findiny as to
cr mpleted if removal! action hu ¢ I
determine whether the IE. PA initiated on-site physi
construction of the remedial action with thy
vears ol thi completion of it emoval act
’ |
; ; | hi ' | j
(Appel! nt Keply IS it IZ hi cou
daetimition of initiats that the pilaimmtill Igvvest Cie neurrin
iny Lype of further re ponse cost the KIVA coul mov take
myvyone ota iriety of later Lep that at uid " '
"
aL Coryirree ¢ ' ent | ' i] Le!
in Lilli Live PA haw wuIL LO recovel pria i cost
vas timely if one of two circumstances is found to
exist: either the date or time period that the HPA
completed its removal action fell within three year:
of the IPA OU-2 enforcement uit, or the IcPA
mitiated on-site physical construction of the remedial
action within three year of the completion off if
removal action. If the first of these requirements |
met, the suit was timely under the three-year tatute
of limitation If the econd 3 met, the six-year
Latute§ ofl lpmitation exception contained in)
l1s( 2 )0b) would apply allowing the fhiing to be
mely
/'] f j ere LOS ( 7 ,} f
IX CUCT he { Pai / f Ohi Pla / {if}
}? iantl Si Phlevie f \ Ai ie
Is ; ‘
Wor WV i Mot a partly Lo ther the Of | oO!
(pI Y Consent Decres llowevel Apert entered
Ino private ettloment opreement with thie
plaintills who signed the OU-1l Consent Decree and a
econd mrivate ettlement agreement with the
pi motill who mned the QOU-2 Consent Deocres
Pursuant to those avreement Agere contributed to
roup trust accounts that funded the work associated
vith the consent decree Avert total cost from
mtributing to botl trust MCCOLTDT Veer? round toy bye
Ca) | 1%)
ni part to the O| CLonsent
} rare it j | i irt | | ( (>| | ( msent
settlement agreement with the plaintiffs who did
sign the OU-1 Consent Decree, and, pursuant to that
agreement, TI contributed to a group trust account
that funded the work required by the OU-1 Consent
Decree. TI’s total costs from contributing to the OU-1
group trust account were found to be $308,961.37.
In their fifth amended complaint, Agere and
TI asserted § 107(a) cost recovery claims for the
amounts that they had paid pursuant to their
settlement agreements with the other plaintiffs, and
the District Court held that Agere and TI did indeed
have such claims. On appeal, Carpenter argues that
the District Court erred in that conclusion and that
Agere and TI should be barred from recovering those
sums.”
ll. Section 107(a) Cost Recovery
Claims
The cost recovery available under § 107(a) is
founded on the statutory language providing that
PRPs shall be liable for “any other necessary costs of
response incurred by any other person” consistent
with CERCLA. 42 U.S.C. § 9607(a)(4)(B). The
Supreme Court has held that “$ 107(a) permits a
PRP to recover only the costs it has ‘incurred’ in
cleaning up a site.” Atl. Research Corp., 551 U.S. at
“'Plaintiffs argue that Carpenter waived this argument
by failing to raise it before the District Court. Even if Carpenter
had not raised the issue below, the District Court ruled on it
when it held that Agere and TI had § 107(a) claims for costs
they had contributed via the private settlement agreements.
More to the point, though, Carpenter adequately preserved the
issue when it argued, in its reply to the pleintiffs’ proposed
findings of fact and conclusions of law, that Agere and TI could
not bring those § 107(a) claims.
139 (quoting 42 U.S.C. § 9607(a)(4)(B)). The Court
has further explained that, “[w]hen a party pays to
satisfy a settlement agreement or a court
judgment, it does not incur its own costs of response.
Rather, it reimburses other parties for costs that
those parties incurred.” Jd.
Agere and TI are seeking to recoup costs that
each paid pursuant to private settlement agreements
with other plaintiffs — Tl with regard to the OU-1
Consent Decree and Agere with regard to both OU-1
and OU-2 Consent Decrees. Their payments under
the private settlement agreements were combined
into group trust accounts with money paid by the
signatories to the consent decrees, and those group
trust accounts were then used to fund the OU-1 and
OU-2 work. Carpenter argues that, in making those
payments into group trust accounts, Agere and TI
did not “incur” their own costs of response. Instead,
says Carpenter, Agere and TI paid into the group
trust accounts only to “satisfy a settlement
agreement,” and, pursuant to Aflantic Research,
those payments cannot be considered “costs
incurred,” as required under § 107(a).
We disagree and will affirm the District Court
in allowing Agere and TI to pursue § 10%(a) claims
for the amounts they have contributed to trust
accounts funding the OU-1 and OU-2 work. We do
not think the Supreme Court intended to deprive the
word “incurred” of its ordinary meaning. Agere and
TI put their money in the pot right along with the
money from the signers of the consent decrees. The
costs they paid for were incurred at the same time as
the costs incurred by the signers of the consent
decrees and for the same work. Those costs were
+?
r
/
as
~
incurred in the ordinary sense that a bill one
obligates onself to pay comes due as a job gets done.
While the Supreme Court in Atlantic Research did
hold that § 107(a) permits a PRP to recover only
costs it has “incurred,” and did suggest that costs
paid pursuant to a settlement agreement are not
such costs, those statements were not made in the
context of payments made for on-going work.
Moreover, the Court appears to have made its
statement about the unavailability of § 107(a) relief
on the assumption that “a PRP that pays money to
satisfy a settlement agreement ... may pursue a §
113() contribution.” Jd. In other words, while the
Court indicated that parties seeking reimbursement
for settlement payments do not have a § 107(a) claim,
a basic premise of that holding was that those parties
do have a § 113(f) contribution claim for their
settlement amounts. We do not believe that the
Court intended its holding to reach a circumstance
like this, where Agere and TI do not have § 1138(f)
contribution claims for the settlement sums because
those parties were never themselves sued for those
amounts by the EPA or by other PRPs. See Cooper
Indus., Inc., 543 U.S. at 168 (explaining that § 113(f
authorizes contribution claims only for PRPs who
have been subject to a civil action under CERCLA).
If we were to hold that Agere and TI cannot
pursue § 107(a) claims for their settlement
payments, they would be completely barred from
recovering those amounts under CERCLA. To accept
that outcome, one must imagine that Congress
intended to penalize cooperative cleanup efforts by
excluding from CERCLA’s broad recovery provisions
all PRPs who, lke Agere and TI, agree to come
39a
forward and assist in a cieanup even though they
have not been subjected to a cost recovery suit. Such
an intent is extremely unlikely, since the goal of
CERCLA is “to encourage private parties to assume
the financial responsibility of cleanup by allowing
them to seek recovery from others.” Key Tronic Corp.
v. United States, 511 U.S. 809, 819 n.13 (1994); see
also W.R. Grace & Co. v. Zotos Int'l, Inc., 559 F.3d 85,
88 (2d Cir. 2009) (“[I]t has now been over twenty-five
years since CERCLA’s enactment, and although
many of the provisions remain perplexing, the
statute’s primary purposes are axiomatic: (1) to
encourage the timely cleanup of hazardous waste
sites; and (2) to placle] the cost of that [cleanup] on
those responsible for creating or maintaining
the hazardous condition.” (alterations in original)
(citations omitted) (internal quotations omitted)).
When a company in the position of Agere and
Tl has not yet been sued by the EPA but appreciates
that it bears some responsibility for cleaning up
hazardous waste, the language of CERCLA, which is
intended to encourage cleanup, ought not’ be
interpreted to discourage participation in cleanup if a
more consistent construction of the statute is
plausible. Private actors are not likely to settle and
step forward unless they know that they can seek
some of the amounts they will contribute, just like of
those who have been sued by the EPA or a PRP, or
those who voluntarily clean up a site in the first
instance. To encourage participation in
environmental cleanup, the statute should be read in
a way that assures PRPs like Agere and TI that they
can later bring a § 107(a) cost recovery claim for the
amounts they pay to help with the cleanup, even if
those costs are related to a settlement obligation. Cf
40a
Steven Patrick, Superfund: Second Cireuit Says EPA
Settlement Approval Is Unnecessary to Trigger
Contribution Right, 41 Daily Envtl. Rep. (BNA) A-10
(Mar. 4, 2010) (citing a Department of Justice amicus
brief filed in Niagara Mohawk Pwr. Corp., stating
that “lilt is important that PRPs ... that ... engage in
response activities in settlements with states have
appropriate CERCLA claims for contribution
against other PRPs [because o]therwise PRPs will
decline to enter into administrative settlements and
instead wait for the filing of civil actions to ensure
they can sue tor contribution under Section
113((1).”). Our holding is buttr =sed by the
Supreme Court’s description o. »i(a) and § 113()
as “overlapping” remedies. Atl. Research Corp., 551
U.S. at 1389 n.6. It would be a stretch to describe the
remedies as “overlapping’ if they are actually
intended to exclude an entire group of PRPs from
both remedies.
Accordingly, we affirm the District Court’s
holding that TI (with regard te OU-1) and Agere
(with regard to OU-1 and OU-2)** have § 107(a) cost
recovery claims to recoup costs paid for cleanup
work, even though the payments were made
pursuant to settlement agreements. Those claims
may thus go forward on remand.
“We recognize that the OU-2 Consent Decree included a
lump payment of $7.4 million in “past costs” to the EPA, and
that Agere accepted responsibility for this amount as well.
Specifically, Agere’s share for these past costs was $83,000.
While this specific amount could arguably be considered
reimbursement rather then co-funding, the parties do not
address this issue explicitly. Particularly, in light of the policy
reasons outlined above, however, we are content to give the
benefit of the doubt to Agere and believe that it is entitled to
recover that amount.
4la
EF. The District Court’s Equitable Allocation
for the Plaintiffs’ Costs of Performing
Work Under the OU-l1 and OU-2
Consent Decrees
% Background
The District Court concluded that Cytec, Ford,
and SPS had both § 107(a) and § 113(f claims for the
costs of performing work pursuant to the OU-1 and
OU-2 Consent Decrees, and that Tl had such claims
with respect to the OU-2 Consent Decree. Carpenter
argues that those plaintiffs have § 113(f) claims only,
for the costs they incurred performing the work
required by the consent decrees. They do not have §
107(a) claims, Carpenter says, because once a party
has been sued or has settled under CERCLA its sole
avenue of relief is a § 113(f claim.
il. Sections 107(a) a.id 113(f)
The Supreme Court, in Atlantic Research, left
open the precise question raised by Carpenter’s
argument, namely, whether plaintiffs in the position
of Cytec, Ford, SPS, and TI can bring a §107(a) claim
in addition to a § 113(f) claim. The Court said,
We do not suggest that §§ 107(a)(4)(B)
and113(M have no overlap at all. For
instance, we recognize that a PRP may
sustain expenses pursuant to a consent
decree following a suit under ... § 107(a).
In such a case, the PRP does not incur
costs voluntarily but does not reimburse
the costs of another party. We do not
decide whether these compelled costs of
4? a
response are recoverable under § 113(f),
§ 107(a), or both. For our purposes, it
suffices to demonstrate that costs
incurred voluntarily are _ recoverable
only by way of § 107(a)(4XB), and costs
of reimbursement to another person
pursuant to a legal judgment or
settlement are recoverable only under §
113(f. Thus, at a minimum, neither
remedy swallows the other ... .
Id. (citations omitted); see also Key Tronic Corp. 511
U.S. at 816 (stating that the provisions provide
“similar and somewhat overlapping remedlies]”).
Claims by Cytec, Ford, and SPS for costs of
performing the OU-1 and OU-2 work, and TI’s costs
associated with OU-2, fall into the region of doubt
identified by the Supreme Court in Atlantic
Research. The costs were neither “incurred
voluntarily,” because the parties were in fact sued by
the EPA, nor were they “reimbursed to another
party,” because they were expended in performing
the OU-1 and OU-2 work directly. Rather, they .are
costs incurred pursuant to a consent decree following
a CERCLA suit. See W.R. Grace & Co., 559 F.3d at
93 n.7 (“As the Supreme Court suggested, it may well
be that a party who sustains expenses pursuant to a
consent decree following a suit under [CERCLA] may
have a cause of action under either section 113(f),
section 107(a), or both.”).
The District Court correctly recognized that
the claims of Cytec, Ford, SPS, and TI associated
with the consent decrees fall within an “open
question of law.” (App. at 1:A59). Without
explanation, the Court concluded that those plaintiffs
have both § 113(f) and § 107(a) claims. Thus, while it
43a
appears that the Court went on to allocate liability
under § 113(f),* we are squarely confronted with the
issue left open in Atlantic Research: whether, in
addition to §113(f) claims, plaintiffs such as these
have §107(a) claims for expenses sustained pursuant
to a consent decree following a CERCLA suit. This is
not simply a matter of academic interest. Were we to
find that these parties have § 107(a) claims in
addition to § 113(f) claims, the District Court could,
on remand, decide to allocate liability under § 107(a)
and potentially impose 100 percent of the liability on
Carpenter pursuant to the joint and several liability
available under that provision of the statute. For
that reason, the parties have heavily briefed and
vigorously argued the issue.
In Atlantic Research, immediately after setting
forth this unanswered question, and after suggesting
that there is, in fact, some “overlap” between § 107(a)
and § 113(f, the Supreme Court stated that “a
defendant PRP in such a § 107(a) [joint and several
liability] suit could blunt any inequitable distribution
of costs by filing a § 113() counterclaim.” 551 U.S. at
“We read the D 33 District Court’s opinion as
proceeding under § 113(f) for the following reasons. First, the
Court said as much when it held that “cooperation with the
government is also an appropriate equitable factor to consider
in allocating response costs under § 113(f).” (App. at 1:A73.)
Second, the Court spent two pages of its opinion outlining the
elements a plaintiff must prove under § 113(, and then
organized its analysis based on those elements. And, third, the
Court held that “[c]ulpability is an appropriate equitable factor
in resolving contribution claims” (App. at 1:A72), which, by use
of the word “contribution,” suggests that the District Court
allocated hability under § 113(f). In addition, despite arguing
that they have § 107(a) claims in addition to their § 113(f)
claims, the plaintiffs concede that “the District Court
determined the shares of each party without regard to those §
107(a) claims.” (Appellees’ Ans. Br. at 47.)
44a
140. The Court explained that any fear that “PRPs
will eschew equitable apportionment under § 113(f)
in favor of joint and several liability under § 107(a)”
is mitigated by the fact that “a § 113() counterclaim
would necessitate the equitable apportionment of
costs among the liable parties, including the PRP
that filed the § 107(a) action.” /d. at 138, 40.
Unfortunately, the potential for an inequitable result
remains in this case because Carpenter would not be
able to bring a § 113(f) counterclaim against Cytec,
Ford, SPS, and TI. Section 113(f)(2) would prevent it.
That subsection states that “la} 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.” U.S.C. § 9613(f)(2). Thus, if we allowed
Cytec, Ford, SPS, or TI to bring a § 107(a) claim here
and assert joint and _ several liability against
Carpenter, Carpenter would be barred from then
bringing a contribution counterclaim against them
because those plaintiffs have entered into consent
decrees, i.e., judicially approved settlements with the
KPA. As a result, those plaintiffs would be able to
recover 100 percent of their own costs against
Carpenter, even though they themselves are actually
responsible for, and have stipulated thet*they are
responsible for, a_ significant portion of the
contamination at the Boarhéad Site.
As Carpenter summarized it, “[Plaintiffs who
had entered into consent decrees with the EPA]
would not be subject to equitable allocation. They
would have no liability because they would be able to
assert joint and several liability against the other
parties.” (Oral Argument Tr. at 9-10.) This is a
45a
perverse result, since a primary goal of CERCLA is
to make polluters pay. Indeed, the Supreme Court
expressed concern about this very type of result
when it recognized that, without defendants having
the availability of a § 113(f) counterclaim, PRP
plaintiffs might “eschew equitable apportionment ...
in favor of joint and several liability under § 107(a).”
All .Research Corp., 551 U.S. at 138. The Court’s
explanation that the harshness of joint and several
liability is mitigated by the possibility of a § 113(f
counterclaim is of no comfort to defendants like
Carpenter.
Further, even under joint and several liability,
a district court is not supposed to fashion an award
that allows a plaintiff to recover from a defendant
costs associated with the cleanup of waste that the
plaintiff itself has contributed to the site. See THE
UNIFORM COMPARATIVE FAULT ACT § 2 cmt.
[hereinafter “U.C.F.A.”] (indicating that even when
imposing joint and several liability, courts must
nevertheless “set forth ....the equitable share of the
total obligation to the claimant for each party, based
on his established percentage of fault ... [so that]
each party should eventually be responsible for [that
amount] as a result of the rules of contribution.”).
That is to say, while joint and several liability allows
a plaintiff to collect from a single defendant the
collective liability of all defendants, it does not
permit a plaintiff to recover from a defendant the
costs to undo what the plaintiff itself has done. Yet
this is precisely what would occur if Carpenter were
barred from bringing a contribution counterclaim
against the plaintiffs after the plaintiffs recovered
from Carpenter under joint and several liability.
46a
Thus, we hold that plaintiffs in the position of
Cytec, Ford, SPS, and Tl, who if permitted to bring a
§ 107(a) claim would be shielded from contribution
counterclaims under § 113(f)(2), do not have any §
107(a) claims for costs incurred pursuant to consent
decrees in a CERCLA suit. Cf, Niagara Mohawk Pwr
Corp., 2010 WL 626064, at *8 (holding that a PRP
who had settled its CERCLA liability by consent
order with a state environmental agency had a §
113(1)(3)(B) claim but not a §& 107(a) claim, and
saying, “[cllearly, the two sections have differing
restrictions and different purposes.”). We need not
decide the contours of the overlap postulated in
Atlantic Research because, regardless of whether §
107(a) and § 113(f) remedies overlap at all, they
cannot properly be seen to overlap here
lil. The District Court's Equitabl
Allocation Under §$ 113(f)
As discussed above, Cytec, Ford, and SPS,
have only § 113(f) claims for costs they incurred
pursuant to the OU-1 and OU-2 Consent Decrees,
and TI is in the same position with its OU-2 costs
Because the District Court resolved those claims
under § 113(f) “by determining the equitable shares
of [all of the parties]” (App. at 1:A61), we must now
address the Court’s allocation of cleanup costs.
The plaintiffs concede that they had to “put on
evidence sufficient for the District Court to
determine which equitable factors were appropriate
and to apply those factors to the facts to determine
each party’s share.” (Appellees’ Ans. Br. at 38.) At
trial, the “[p]laintiffs’ theory of the case was that the
volume of each party’s waste disposed of at the Site
Ala
was the most appropriate cquitable factor for
allocation.” (Ud.) The District Court adopted that
theory, holding that the “[vlolume of waste disposed
at the Site is the most equitable manner of cost
allocation and the Court is not hesitant to use this a:
iis primary equitable factor.” (App. at 1:A70-A71.)
The Court further held that, “because culpability and
cooperation are significant equitable considerations
they will be considered in the allocation equation
(App. at 1:A71.)
On appeal, Carpenter argues that the only
evidence the plaintiffs introduced as to the volume of
waste attributable to parties other than NRM and
Carpenter consisted of the following — three
stipulations: (1) the June 19, 2008 stipulation among
all of the parties as to the waste that DCC collected
from fifteen of the defendants (not including
Carpenter’s, NRM’s, or H&H’s waste volumes);
(2)the June 23, 2008 stipulation between the
plaintiffs and H&H (that Carpenter did not sign) as
to the volume of waste that DCC collected from
plaintiffs Ford, Cytec, and SPS, and from former
defendant H&H:;: and (3) the July lL, 2008 stipulation
between the _ plaintiffs, Carpenter, and H&H,
stipulating to the fact that the waste described in the
June 23rd_ stipulation was CERCLA hazardous
waste. Carpenter asserts that the June 23rd
“stipulation is not competent evidence of the volumes
of waste that DCC acquired from [the] plaintiffs and
lfrom] H&H, because Carpenter, the only party
against whom it lis] being used, did not stipulate to
those volumes.” (Appellant’s Op. Br. at 43.) Thus,
“Despite the plaintiffs’ argument to the contrary
Carpenter preserved this argument at trial. During trial, when
4Xa
the argument runs, “if you don’t have the plaintiff
volume you dont know the total volume at thi
site. If you don't know the total volume at the sit
you cant allocate between all the parties.” (Oral
Argument Tr. at 17.)
The plaintiffs, in response, argue that the
offered sufficient evidence for the Court to determine
the volume of waste that cach party left at the site
since they “offerled] into evidence the stipulations of
all parties to the volumes of waste hauled by DCC
from each [p]laintiff and each |djefendant (other than
Carpenter and NRM) ” (Appellee’s Ans. Br. at 39.)
The plaintiffs contend that they “thus had only to
offer additional evidence sufficient for the District
Court to determine the volumes of Carpenter and
NRM waste that were disposed of at the Site, thereby
finding all of the facts necessary to apply its primary
equitable factor [i.e., waste volume}.” Ud. at 40
the plaintiffs moved to admit the June 23rd stipulation into
evidence, Carpenter objected by reminding the Court that it had
not joined in the stipulation. In response, the plaintiffs’ counse!
stated to the Court, “Your honor, we're not asking Delendant
Carpenter to stipulate to any of these facts.” (App. at 3:A119#
Carpenter then responded, “That's fine so long as it is not a
stipulation among all of the parties relating to the drawiny of
waste that was hauled by [DCC] from the same company.” (Ud
Moreover, when the Court confirmed that it was “a stipulatior
of limited scope which doesn’t involve [Carpenter],” Carpente:
responded, “|Wje’re just making a record that we do not agree or
stipulate or we’re not waiving any kind of objection " (App
At’ 3:A1199.) The Court then asked the plaintiffs’ counse!
whether he thought Carpenter had “waived any objection,” to
which the plaintiffs’ counsel responded, “No your Honor.” (/d. )
Finally, at oral argument before us, the plaintiffs’ counsel
conceded that “Carpenter chose not to agree” with the
stipulation, and that Carpenter had voiced its objection at trial
(Oral Argument Tr. at 28.) The issue was thus amply preserved
in the Distnct Court
Ya
,
pecitically Line plaintill arvue that haalll Ol Lhese
tipulations were properly admitted into the record
whether or not Carpenter was an orminal signatory
tothe dune 23rd stipulation.” Jd. at 42-45 1.14
lorced to contront the fact that Carpentes did
nol in the June 23, 2OOk# tipulation and thu
never stipulated to the plamtills’ and H&H'’s wast
olume the plaintiff advances Lhe followin theory
(oT) cApdpre al
Plaintiff and titctl Lipulated on June
24, 2008 as to the nature and volume of
H&li waste disposed of at the Site and
the volumes of wastell of Plaintilfs that
were hauled by DCC. Then Plaintill
Mda&tt, and Carpenter entered into a Jul
1, 2008 stipulation clarifying that the
June 23rd stipulation was intended (by
referencing no volumes for Tl and Agere
to include the conclusion that no waste
from Tl and Agere was hauled by DCC
and that the wastes of the other thre
Plaintifls referenced in the June 23
tipulation contained CikCLA
hazardou ubstance Ky exccutingp the
econd [July Ist] lipulattor (carpernte)
also joined in the first o
well
ld. (internal citations omitted emphasi pdded)
Phe plaintiffs thus argue that, because the July Ist
tipul mion re fey LO thie june Zz ira LIpulavior AAT
or ” : > oo
later one was “intended” to incorporate the earlier.
(Id.)
The District Court accepted that theory,
stating that “[allthough Carpenter did not enter into
[the June 23™ stipulation], it is nonetheless evidence
of plaintiffs volumetric shares.” (App. at 1:A71 n.43.)
From the Court’s opinion, it appears that the
stipulations were the only evidence the Court
considered with regard to the plaintiffs’ and H&H’s
waste. All other volume evidence discussed by the
District Court relates to Carpenter’s or NRM’s waste.
“After oral argument, the plaintiffs’ counsel sent a
letter to our Court pursuant to Fed. R. App. P. 28Q) to address
what he described as a “misstatement during oral argument ...
that Appellees did not introduce evidence at trial concerning the
volumes of Cytec’s, SPS’s, and Ford’s wastes that were disposed
of at the Boarhead Farms Superfund Site.” Letter from Glenn
A. Harris, Counsel for Plaintiffs, te Marcia M. Waldron, Clerk of
- United States Court of Appeals for the Third Circuit (Dec.
2009) (on file with the Court). Specifically, the plaintiffs’
pee points to several exhibite moved into evidence at trial,
including purchase orders from Ford and SPS to DCC, ee
invoices to Ford and SPS, and filings made with the New Jersey
Department of Environmental Protection that evidence certain
volumes of Cytec’s waste disposed of at the Site. (/d.) The
plaintiffs’ position is that “[t]he exhibits are in the trial record
and thus can be relied upon” by our Court. (/d.)
However, even if we were to consider those exhibits,
they are not evidence of the plaintiffs’ waste volumes
transported by DCC to the Boarhead Site during the relevant
time period. They appear to be only a collection of invoices and
purchase orders with no testimony to explain what they mean.
Moreover, plaintiffs have not directed us to anything indicating
that they ‘argued at trial that those documents were evidence of
their waste volumes. In fact, in the plaintiffs’ reply to
Carpenter’s proposed findings of fact, they stated that the
volume evidence for plaintiffs and H&H came from. the
stipulations. The District Court’s opinion reveals that the Court
relied solely on those stipulations to make findings of fact as to
the plaintiffs’ waste volumes and did not rely on the evidence
discussed in the recent 284) letter to our Court.
IV. The June 23rd Stipulation is Not
an Admission that ts Admissible
Against Carpenter
The June 23rd stipulation is the only one that
included the plaintiffs’ and H&H’s volumes of waste,
and Carpenter did not sign it. The July 1, 2008
stipulation does not incorporate by reference the
June 23, 2008 stipulation, nor does it even address
the volumes of waste in the earlher stipulation. It
reads, in relevant part, that “|tlhe waste from
Plaintiff companies referenced in paragraph 5 of the
June 23, 2008 [s]tipulation ... contained at least some
CERCLA hazardous substances. There were no
wastes hauled by [DCC] from |[TI, Agere,] or their
predecessors.” (App. at 14:A6398.) When plaintiffs
moved to admit the June 23rd stipulation at trial,
Carpenter pointedly objected, as it had before, to any
substantive use of the stipulation, stating “[wle’re
just making a record that we do not agree or
stipulate or we’re not waiving any kind of objection to
paragraph 5 of [the June 23rd] stipulation.” (App. at
3:A1199; see also supra note 34.)
It would be extraordinary, in light of
Carpenter’s decision not to sign the June 23rd
stipulation and its repeated and emphatic objections,
to allow the use of the stipulation to bind it, and to
permit the stipulation to become exactly what
Carpenter had a right to say it was not, namely
evidence against it of the volumes of waste at issue.
The District Court should not have decided the
plaintiffs’ and H&H’s volume of waste from a
stipulation that Carpenter did not join. Particularly
in a case like this, where the question is who bears °
Si
S
what share of the responsibility among those who are
culpable, it is no mere technical violation of the rules
of evidence to allow some parties to stipulate to their
share of responsibility and then later have that
stipulation be used as the basis of liability against
another party. No matter how culpable a_ polluter
may be — and in this instance, Carpenter gave the
District Court ample reason to view it as highly
culpable — hability can only be assigned on the basis
of procedures consistent with the Due Process Clause
of the Fifth Amendment of the United States
Constitution and the Federal Rules of Evidence. Cf.
Dawson v. Delaware, 503 U.S. 159, 178 (1992) (“The
Due Process Clause ... traditionally has regulated
questions about the improper admission — of
evidence.”).
Before us, plaintiffs’ counsel argued that the
stipulation was “properly admitted into evidence”
because it constitutes an admission by the
plaintiffs.“° This, of course, misapprehends the issue
“The argument went as follows:
Plaintiffs’ Counsel: [T]he stipulation is
admitted into evidence
as proof against my
chent of the three
entities’ volumes. They
could have disputed it.
But. its not that there's
no evidence.
The Court: Your argument is this
was, in_- effect, an
admission.
Plaintiffs’ Counsel: Exactly.
S3a
entirely. The question isn’t whether the stipulation is
an admission by the plaintiffs and therefore binding
as to them. The question is whether the plaintiffs’
self-serving stipulation can bind Carpenter.
Taking a stipulation that a party has chosen
not to sign and using it as evidence against the non-
signatory violates at least the rule against hearsay.
In general, hearsay “is a statement, other than one
made by the declarant while testifying at the trial or
hearing, offered in evidence to prove the truth of the
matter asserted.” FED. R. EVID. 801(c). Hearsay ts
not admissible unless it falls under one of the
exceptions to the hearsay rule contained in the
Federal Rules of Evidence. FED. R. EVID. 802. One
thing which the rules define as non-hearsay is an
admission by a party-opponent, defined as a “party’s
own statement, in. either = an_individua or
representative capacity” that is “offered against” that
party. FED. R. EVID. 801(d)(2)(A). Thus, whether a
statement constitutes inadmissible hearsay, or is
Plaintifts’ Counsel: That’s exactly correct.
We admitted and we
stipulated with [H&H]
that those are the
volumes for those three
companies. ... [I]t was
in evidence. The judge
used it. I mean he
counted on it. Look on,
look at the opinion. He
counts those volumes
against me.
(Orai Argument Tr. at 23-24.)
instead considered not to be hearsay at all because it
is an admission of a party-opponent, depends on both
who made the statement and whom it is being
offered against. Here, while the stipulation might
well be admissible non-hearsay if it were being
offered against the parties who signed it, it should
not have been admitted against Carpenter, since
Carpenter did not sign it and no exception to the
hearsay rule was advanced by the plaintiffs.°’ Cf
Brzozowski v. Corr. Physician Servs., Inc., 360 F.3d
173, 179 (3d Cir. 2004) (cautioning that a plaintiff
could not rely on a consent judgment against a party
because that party did not sign the “stipulation
and must be afforded the opportunity to defend itself
against the claim de novo.”).
Because the June 23rd stipulation should not
have been admitted against Carpenter, the District
Court did not rely on competent evidence as to four of
the parties’ waste volumes. As a result, Carpenter is
correct in its assertion that the Court did not
articulate an adequate basis for its decision as to the
total volume of waste at the Boarhead Site. The
plaintiffs concede, as they must, that it was their
burden to prove each party’s “fair share” or “size of
the pie.” (Oral Argument Tr. At 24-25.) They did not
meet that burden, and, without a mention of any
other evidence of the matters covered by the June
23™ stipulation, it was impossible for the District
Court to perform an equitable allocation of waste
“Although no exception 37 to the hearsay rule is
immediately apparent as being applicable here, we do not
decide that none applies to the June 23rd stipulation, since that
issue is not before us. We decide only that the June 23rd
stipulation was not incorporated into any stipulation Carpenter
did sign and that it is not admissible against Carpenter as an
admission because Carpenter admitted nothing by it.
volumes among Carpenter and the other PRPs. Thus,
the District Court’s volume allocation constitutes an
abuse of discretion and cannot stand.
Vv. Other Evidence Regarding Waste
Volumes
That conclusion, however, does not end the
matter. While the stipulations are inadmissible
unless a hearsay exception applies, there may well be
other evidence of record that could be dispositive as
to plaintiffs’ and H&H’s waste volumes. For example,
in a footnote, the District Court indicated that,
because the plaintiffs stated their volumes of waste
and other parties’ volumes of waste in answers to
contention interrogatories, and because Carpenter
moved those answers into evidence, “these answers
corroborate the volumes of plaintiffs’ waste disposed
of at the Site.” (App. at 1:A71 n.43; see also App. at
14:A6416-6498; 6485.) Carpenter concedes that it
did, indeed, introduce into evidence plaintiffs’
responses to contention interrogatories. (See
Appellant’s Reply Br. at 25.) Moreover, in another
part of its argument — concerning alleged error by
the District Court in determining defendant NRM’s
waste volumes — Carpenter relied, and continues to
rely, on those very same responses to argue its own
point.** (See App. at 1:A39 n.21; Appellant’s Reply
Br. at 25.) It thus may be that the answers to
contention interrogatories constitute admissions that
Carpenter has adopted.”
*8See infra Section II1.F.i.
An adoptive admission refers to “evidence of other
conduct of a party manifesting circumstantially the party’s
assent to the truth of a statement made by another.” 2
Soa
The District Court, which is far more familiar
with the context in which Carpenter moved to admit
those responses, and the ways in which Carpenter
argued their relevance, is in a better position to
consider that issue. The Court may also decide that,
in the unusual circumstances of this case, the record
will need to be reopened to consider the equitable
allocation again, and, in that context, it may review
any admissible evidence as to the plaintiffs’ and
H&H’s waste volumes. Since it may be necessary to
reopen the record to address other questions, like the
time period during which the EPA completed its
removal action, issues of waste volumes could be
addressed at the same time.
GEORGE E. DIX, ET AL., MCCORMICK ON EVIDENCE § 261
(Kenneth S. Broun, ed, 6" ed., 2009) [hereinafter
“McCormick”]. Adoptive admissions in federal courts are
governed by Federal Rule of Evidence 801(d)2XB), which
provides that a statement is non-hearsay if “[t]he statement is
offered against a party and is ... (B) a statement of which the
party has manifested an adoption or belief in its truth.” FED. R.
EVID. 801(dX2B). Here, Carpenter not only cited to plaintiffs’
responses to contention interrogatories, but it moved those
responses into evidence, relied on hem, and continues to rely on
them on appeal. In other words, Carpenter urged the District
Court — and now urges us — to rely on those responses as
competent evidence. Carpenter thus may be viewed as showing
its “assent to the truth of a statement made by another.”
MCCORMICK, supra at § 261 (explaining that “the introduction
of evidence by a party” may constitute an adoptive admission
“depend[ing] upon whether the particular circumstances
warrant the conclusion that adoption in fact occurred”).
However, we leave that determination to the [hstrict Court in
the first instance.
S7a
I. Other Contentions Regarding _ the
District Court’s Equitable Allocation
Carpenter contends that, in addition to the
improper admission of the June 23rd stipulation as
volume evidence for the plaintiffs and H&H, the
District Court erred in its equitable allocation
analysis in three other ways. First, Carpenter argues
that the Court miscalculated the volumetric share of
waste that former defendant NRM sent to the
Boarhead Site. Second, it argues that the District
Court did not consider other defendants’ culpability
and lack of cooperation with the EPA to the same
extent it considered Carpenter’s behavior. Finally,
Carpenter says that, in allocating liability, the Court
should have considered the dollar amounts that the
plaintiffs obtained from settling defendants, rather
than those defendants’ volumetric share of waste.
Each of those contentions is unpersuasive.
i. NRM’s Waste -
Because the parties did not stipulate to NRM’s
waste, the Court heard testimony from several DCC
drivers, all of whom were questioned about
transporting NRM’s waste to the Boarhead Site. The
testimony produced the following evidence. One
driver picked up waste from NRM but transported all
of it to another location, not the Boarhead Site. A
second driver never went to NRM to pick up waste.
Two other drivers transported all NRM waste to a
third location, not the Boarhead Site. June Stephens,
another driver, was unclear as to whether she had
driven a truck containing NRM waste, and, if she
had, whether or not she had disposed of that waste at
the Boarhead Site. Finally, a driver named Manfred
S8a
(“Freddie”) DeRewal, Jr. testified that he took six to
ten tankers of NRM waste to the Boarhead site, but
took the remainder of NRM’s waste to other
locations.
Based on that testimony, the District Court
found that 32,000 gallons of NRM’s waste was
disposed of at the Boarhead Site. According to the
Court,
Freddie DeRewal took six to ten tankers
of NRM waste to the [Site] ... . As a
tanker truck held approximately 4,000
gallons of waste, DCC disposed of
between 24,000 and 40,0006 gallons of
NRM waste at the Site ... . The Court
finds that DCC disposed of 32,000 gallons
of NRM waste at the Site during the Gap
Period.
(App. at 1:A36.) The District Court thus chose the
halfway point in the 24,000 and 40,000 gallon range.
Carpenter offers two specific contentions with
regard to the NRM waste figure. First, it argues that
the plaintiffs gave more definite figures in response
to contention interrogatories and that the Court
should have used those figures. Second, it argues
that June Stephens’s testimony demonstrates that
she did, in fact, collect waste from NRM. As to the
first point, there was nothing improper in the
District Court’s decision to give greater weight to
witness testimony than to contention interrogatory
answers. As to the second, Stephens stated explicitly
that, instead of the waste she collected being NRM’s,
it “could have been [waste belonging to] another one
59a
of these outfits.” (App. at 15:A878.) Given the
indecisiveness of Stephens’s testimony, the District
Court did not clearly err in interpreting her
testimony the way that it did. Considering the
testimony before it regarding the handling of NRM’s
waste, the District Court could properly determine
that 32,000 gallons of waste were fairly attributable
to NRM.
il. The Culpability and Lack of
Cooperation of Settling
Defendants
The District Court concluded that, in addition
to volume, culpability and cooperation with the
government should also be considered in allocating
response costs. Because “Carpenter relinquished its
potent waste acids to a known polluter,” (App. at
1:A72), and because Carpenter did not cooperate
with the EPA, the Court decided to allocate to
Carpenter an additional 17.4% of the total clean-up
cost: 8.7% for working with a known polluter and
8.7% for not cooperating with the EPA. (App. at
1:A73-A74.)
Carpenter does not dispute the District Court’s
findings of fact concerning its repeated business
dealings with DCC and related companies or the
refusal to participate in cleaning up the Boarhead
Site when asked to do so by the EPA. Rather,
Carpenter contends on appeal that the District Court
erred in ignoring the same kind of evidence with
regard to other parties.
We disagree. The District Court found that
Carpenter’s culpability was of a different character
60a
than any other defendant’s because Carpenter had
actual knowledge of DeRewal’s polluting activities
and yet twice chose to hire his companies to dispose
of toxic waste. Carpenter introduced no evidence
demonstrating that any other party acted with the
same callous disregard as it did in its dealings with
DeRewal’s companies or with the EPA. The record
reveals that Carpenter was particularly
contemptuous of the law and public safety in the way
it stonewalled participation in the government’s
cleanup efforts at the Boarhead Site. These are valid
bases for viewing Carpenter as occupying a category
of culpability all its own in this case. Thus, the
District Court’s decision to allocate an additional
17.4% of liability to Carpenter was certainly not an
abuse of discretion, and the increased liability need
not be revisited on remand,
LiL. Settlement Amounts
The District Court chose to use the waste
volumes of the settling defendants, rather than the
dollar amounts that those settling defendants paid,
as the primary equitable factor for its allocation. The
District Court explained that it was adopting the
U.C.F.A. to determine the settling parties’ shares of
liability. That Act states that “[tlhe claim of the
releasing person against other persons is reduced by
the released person’s equitable share of the
obligation ... .” U.C.F.A. § 6. Thus, the Court
concluded that, since it had used waste volumes to
determine the equitable shares of the remaining
PRPs, the settling defendants’ liability should be
“reduced by the settling party’s equitable share of the
liability, not by the dollar value of the settlement.”
(App. at 1:A71 n.43.) The District Court had in fact
6la
held four years before trial that “the liability of the
Non-Settlers [will be] determined without regard to
the dollar amounts of previous settlements.” (App. at
1:A85.)
Carpenter argues that the Court erred in
concluding that the dollar value of the settlements
were not relevant to the equitable allocation. But the
District Court did not err. First, practically speaking,
the settlement amounts are not of record and so the
District Court could not have used them as an
equitable factor. Second, as the District Court noted,
the plaintiffs have every incentive to settle for as
close to the settling parties’ shares as_ possible
because the plaintiffs bear the risk that those
parties’ shares of the cleanup costs may be greater
than the settlement amount. Thus, the volume
allocation likely reflects the dollar amounts. Finally,
to the extent waste volumes and settlement dollars
diverge, it was well within the Court’s discretion to
determine that the former, which are historical facts
developed before litigation, are a better measure of
fault than the latter, which are necessarily colored by
litigation concerns. In short, while the District Court
must revisit certain PRPs’ volumes for the reasons
described above, there was nothing wrong with its
choosing to use volume, rather than the dollar value
of the settlements, as the basis for allocating liability
among the parties.
G. The Pennsylvania Hazardous Sites
Cleanup Act
Lastly, Carpenter argues that plaintiffs Cytec,
Ford, SPS, and TI do not have viable cost recovery
claims under § 702(a) of the HSCA for the same
62a
reasons that they do not have a § 107(a) claim under
CERCLA. Neither party disputes that liability under
the HSCA mirrors liability under CERCLA and that
§ 702(a) of the HSCA mirrors § 107(a) of CERCLA.
Rather, Carpenter simply repeats its contentions as
to why it believes the District Court erred in holding
that Cytec, Ford, SPS, and T! have § 107(a) claims
for the costs they incurred under the OU-1 and/or
OU-2 Consent Decrees.
The District Court correctly held that
Carpenter’s liability “is neither greater nor lesser
under the HSCA.” (App. at 1:A76.) Indeed, the cost
recovery and contribution provisions in HSCA are
virtually identical to those in CERCLA. Compare 35
PA. STAT. ANN. §§ 6020.702(a)(3), 705(a), with 42
U.S.C. §§ 9607(aX4\(B), 9613(). Thus, on remand,
the District Court should continue to address the
CERCLA and HSCA issues in this case identically.”
IV. Conclusion
We recognize the many difficulties inherent in
adjudicating this highly complex and contentious
case and express appreciation for the clarity with
which the District Court set forth its reasoning in
support of the equitable allocation it determined.
“Carpenter also argues the 40 at even if the plaintiffs
could state a § 702(a) cost recovery claim under the HSCA, that
claim would be barred by HSCA’s statute of limitations
provision, contained in 35 PA. STAT. ANN. § 6020.1114. We
need not address that contention because no statute of
limitations argument has been made pertaining to § 107(a). All
the statute of limitations arguments that the parties have made
to us pertain to § 113(f.
63a
However, for the reasons discussed above, we must
vacate the judgment and remand the case.
In summary, first, we ask the District Court to
make a clear and unequivocal finding, if possible, as
to when the EPA completed its removal action. ‘To
the extent the District Court decides it must reopen
the record in order to make that finding, it may do
so. Such a finding will allow the District Court to
determine whether the EPA’s December 6, 2001
filing of the suit to enforce the OU-2 Consent Decree
was timely, and thus whether there is a time-bar to
plaintiffs’ recovering the approximately $7 million
they paid to reimburse the EPA for past costs.
further, if the District Court finds that the IPA
initiated “on-site physical construction” of the
remedial action within three years of the completion
of its removal action, it may apply the six-year
statute of limitations exception contained in §
113(¢)2)XB). If the District Court finds that the
EPA’s December 6, 2001 suit was not time-barred,
and that the plaintiffs are able to recover for past
costs, the Court should make a more exact finding as
the amount that the plaintiffs paid to reimburse the
EPA for past costs.
Second, the District Court should permit TI
(with regard to OU-1) and Agere” (with regard to
OU-1 and OU-2) to go forward with their § 107(a)
cost recovery claims to recoup costs paid as part of
the shared expense of cleaning up the Boarhead Site.
“Avain (see supra 41 n. 12), we note that the District
Court must determine on remand whether Agere’s claims are
held by it or by assignees.
644
Third, because we hold that Cytec, Ford, and
SPS, as well as TI (with regard to OU-2), are
shielded from contribution counterclaims under §
113(f)(2) and therefore do not have § 107(a) claims
for costs incurred pursuant to the consent decrees,
the District Court should again proceed solely under
§ 113() as to those claims.
Fourth, while proceeding under § 113({) to
allocate liability among the parties, the District
Court may not consider the June 23rd stipulation as
evidence against Carpenter, at least not without
addressing the evidentiary problems noted herein.
Beyond the stipulation, there may be evidence in the
record that the District Court can rely on to perform
its equitable allocation, but the District Court may
also reopen the record if it deems that necessary.
For the foregoing reasons, we vacate the
is BS
District Court’s judgment and remand for further
proceedings consistent with this opinion.
65a
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 09-1814
AGERE SYSTEMS, INC.;
CYTEC INDUSTRIES, INC.; FORD MOTOR
COMPANY; SPS TECHNOLOGIES, LLC; TI
GROUP AUTOMOTIVE SYSTEMS, LLC
V.
ADVANCED ENVIRONMENTAL TECHNOLOGY
CORPORATION; ASHLAND, INC.; CARPENTER
TECHNOLOGY CORPORATION; DIAZ CHEMICAL
CORPORATION; FCG INC; HANDY & HARMAN
TUBE CO, INC.; NRM INVESTMENT COMPANY
Carpenter Technology Corporation,
Appellant
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 02-cev-3830)
District Judge: Honorable Legrome D. Davis
Argued December 17, 2009
Before: SLOVITER, JORDAN and GREENBERG,
Circuit Judges.
JUDGMENT
66a
This cause came on to be considered on the
record from the Un
This text is long and has been trimmed here. Open the source document for the complete record.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.