Supreme Court Clarifies CERCLA Provisions for Recouping Cleanup Costs

Legal Sidebari

Supreme Court Clarifies CERCLA Provisions

for Recouping Cleanup Costs

June 16, 2021

On May 24, 2021, the Supreme Court issued an opinion in Guam v. United States that could expand the

ability to recover cleanup costs under the Comprehensive Environmental Response, Compensation, and

Liability Act (CERCLA). CERCLA, the “Superfund” statute, provides two avenues for lawsuits to recoup

costs for the cleanup of contaminated sites. The Guam decision clarified the relationship between these

separate CERCLA provisions.

This Sidebar explains CERCLA’s framework for parties to recoup cleanup costs, discusses the Guam

decision, and considers the implications of the decision. As discussed below, the Court’s ruling allows the

Territory of Guam to proceed with its cost-recovery claim against the United States for costs associated

with cleaning up the Ordot Dump. More broadly, the ruling could expand parties’ ability to recover

cleanup costs, particularly from federal agencies that bear some responsibility for contaminating a given

site. It could also alter the scope and timing of settlement negotiations to resolve liability under CERCLA

and other environmental statutes.

Background on CERCLA

Congress enacted CERCLA to clean up the release of hazardous substances, pollutants, or contaminants

across the United States and to hold the parties connected to those sites responsible for cleanup costs.

CERCLA provides that “potentially responsible parties” (PRPs) may be compelled to perform or pay for

the cleanup of contaminated sites. The statute includes two provisions that allow parties that incur cleanup

costs to recoup all or part of their costs from PRPs: cost-recovery actions under Section 107(a)(4)(B), and

contribution actions under Section 113(f). A federal agency may face liability under either provision if its

connection to a site renders it a PRP.

First, Section 107(a)(4)(B) of CERCLA allows any person to sue a PRP to recover “any other necessary

costs of response” that that person has incurred. These lawsuits are known as “cost-recovery” actions.

Cost-recovery actions under Section 107(a) are subject to a six-year statute of limitations, which begins

upon the initiation of the remedial action (typically a long-term, permanent remedy for the contaminated

site).

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Second, Section 113(f) allows a PRP that has been required to pay response costs to someone else to

assert a contribution claim against other PRPs in court to compel those PRPs to bear an equitable share of

those costs. As relevant to this case, Section 113(f)(3)(B) provides:

A person that has resolved its liability to the United States or a State for some or all of a response

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

settlement may seek contribution from any person who is not party to a settlement referred to in

[Section 113(f)(2)].

Contribution actions under Section 113(f) are subject to a three-year statute of limitations, which begins

on “the date of judgment in any action under [CERCLA] for recovery of [response] costs” or the “entry of

a judicially approved settlement with respect to such costs.”

A party that may bring a Section 113(f) contribution action must proceed under Section 113(f), and is

barred from proceeding with a cost-recovery action under Section 107(a). Because a claim might be

timely under Section 107(a) but not under Section 113(f), parties in litigation over a site have sometimes

disputed the characterization of prior settlements to address contamination at that site in order to advance

arguments about whether a party’s claims are timely and thus may go forward.

The Guam Litigation

Guam v. United States concerns the cleanup of a site known as the Ordot Dump, which, until its closure in

2011, was the only public landfill on the island of Guam. From 1898 until 1950, the U.S. Navy had

jurisdiction over Guam, and deposited waste at the Ordot Dump, which lacked basic environmental

safeguards. After Guam was organized as a United States territory in 1950, the newly formed civilian

government accepted waste and stored it in open, unlined ravines at the Ordot Dump, and the Navy

continued to deposit waste at the dump as well. Over time, contaminants from the Ordot Dump leached

into a nearby river and its tributaries, which ultimately flow into the Pacific Ocean.

The U.S. Environmental Protection Agency (EPA) sued Guam in 2002, alleging that the discharge of

untreated leachate from the Ordot Dump violated the Clean Water Act. Guam and EPA resolved that

litigation in 2004 by entering into a consent decree that required Guam to pay a civil penalty and close

and cover the dump. The consent decree provided that Guam’s compliance with its terms would constitute

“full settlement and satisfaction” of the claims the United States alleged in the complaint. It also reserved

the United States’ ability to raise future claims other than those alleged in the complaint.

In 2017, Guam sued the United States under CERCLA, alleging that the Navy was responsible for the

contamination at the Ordot Dump. Guam asserted both a CERCLA Section 107(a) cost-recovery claim

seeking “removal and remediation costs” related to the landfill, and, in the alternative, a contribution

action pursuant to Section 113(f).

The U.S. District Court for the District of Columbia ruled that Guam could proceed with its cost-recovery

action. On interlocutory review, the D.C. Circuit reversed and remanded. The D.C. Circuit held that the

2004 consent decree triggered a contribution claim under Section 113(f) by resolving Guam’s liability to

the United States, thus also barring Guam from seeking cost recovery under Section 107(a). Although the

2004 consent decree resolved claims under the Clean Water Act, not CERCLA, the D.C. Circuit held that

Section 113(f)(3)(B) “does not require a CERCLA-specific settlement” before a party may pursue a

contribution claim (and therefore may not pursue a cost-recovery claim). In so holding, the D.C. Circuit

joined the Third, Seventh, and Ninth Circuits, and differed from the Second Circuit. Analyzing the terms

of the consent decree, the court ruled that the settlement required Guam to take action that qualified as a

“response action” under CERCLA and released Guam from liability for the Clean Water Act claim, thus

resolving Guam’s liability to the United States. Because the three-year statute of limitations for Guam’s

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Section 113(f) contribution claim began with the entry of the 2004 consent decree and thus had already

run, the D.C. Circuit held that Guam could not pursue a contribution claim against the United States.

The Supreme Court’s Decision

The Supreme Court granted certiorari to review two questions: (1) whether a non-CERCLA settlement

can form the basis for a Section 113(f)(3)(B) contribution claim, thereby precluding a Section 107(a) costrecovery claim; and (2) whether a settlement that includes liability disclaimers and reservations of rights

can trigger a Section 113(f)(B) contribution claim. In a unanimous opinion authored by Justice Thomas,

the Court reversed the D.C. Circuit’s judgment and remanded for further proceedings. As to the first

question, the Court held that a settlement must resolve a CERCLA-specific liability to trigger a Section

113(f)(3)(B) contribution action. Conversely, settlements that resolve liability under other environmental

statutes do not trigger contribution rights or foreclose Section 107(a) cost-recovery actions under

CERCLA. The Court determined that it only needed to address the first question to decide the case, and

thus declined to reach the second question.

The Court held that the text and structure of CERCLA and Section 113(f) tie contribution rights to

liability under CERCLA. Reviewing the “interlocking language and structure of the relevant text,” the

Court began by describing the key features of Section 113(f)’s three components. The Court explained

that Section 113(f) “centers on and is entitled ‘contribution.’” It ruled that a party’s entitlement to seek

contribution after resolving its liability through a settlement “does not stand alone,” but instead must be

read within the specific context of Section 113(f), which outlines the broader workings of CERCLA

contribution.

Next, considering the nature of contribution suits, the Court concluded that a party’s right to seek

contribution after resolving its liability through a settlement must remain “within the bounds of

CERCLA.” The Court explained that contribution suits “[do] not exist in a vacuum” but rather are a “tool

for apportioning the burdens of a predicate ‘common liability’ among” PRPs. The Court reasoned that

CERCLA presented the “most obvious place” to find the threshold liability that is apportioned through

contribution suits. The Court also observed that there is no “‘general federal right to contribution.’”

Instead, contribution suits “are virtually always a creature of a specific statutory regime.”

Reading each provision in Section 113(f) sequentially as “integral parts of a whole,” the Court concluded

that all three provisions either explicitly or implicitly presume that CERCLA liability is necessary to

trigger contribution rights. In particular, the Court pointed to the statement in Section 113(f)(3)(B) that

contribution is available “from any person who is not party to a settlement referred to in” Section

113(f)(2). The Court described Section 113(f)(2) as mirroring Section 113(f)(1)’s anchor provision, which

expressly contemplates a predicate CERCLA liability.

The Court determined that Section 113(f)(3)(B)’s use of the term “response action” further ties Section

113(f)(3)(B) to the CERCLA regime. The Court wrote that “response action” is “a familiar CERCLA

phrase that appears dozens of times throughout the Act.” While the Court agreed with the United States

that remedial measures taken under another environmental statute may resemble the steps taken in a

CERCLA “response action,” it concluded that such a functional overlap was not a sufficient basis for

interpreting Section 113(f)(3)(B) as providing a contribution claim whenever a party settles an

environmental liability that “might have been actionable under CERCLA.” The Court also considered the

requirement that a party have “resolved its liability” in order to trigger the availability of a contribution

action, specifying that the term “resolve” “conveys finality and certainty.” The Court reasoned that its

narrower reading would avoid the “rather odd” result that a party could have “resolved its liability” and

yet remain vulnerable to a CERCLA suit.

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Implications of the Court’s Decision

The immediate practical effect of the Supreme Court’s ruling is that Guam may now proceed with its

Section 107(a) cost-recovery claim in the district court because its Clean Water Act settlement did not

give rise to a contribution claim under Section 113(f)(3)(B). Notwithstanding the Court’s review, the case

is still in its early stages, and neither the Court’s opinion nor any lower-court decision to date has

addressed the merits of Guam’s claim. CERCLA provides many defenses to liability that could limit the

United States’ obligation to compensate Guam. Furthermore, although CERCLA provides for joint and

several liability—meaning that any single PRP may be held liable for all of the response costs associated

with a cleanup—a party may file a counterclaim for contribution under Section 113(f) to reduce the extent

of its financial obligation in the event it is found liable. In this instance, Section 113(f) may allow the

United States to file a counterclaim against Guam for an equitable apportionment of response costs, but

the United States has not yet filed any counterclaims in this litigation. Accordingly, it is not possible at

this time to determine whether Guam will succeed in establishing that the United States is liable—or, if

Guam succeeds, how much of its response costs (estimated at $160 million, or nearly one-fifth of Guam’s

annual budget) will be recovered from the United States.

The litigation with Guam arises out of the United States’ status as both an enforcer of federal

environmental laws (through EPA, in this case) and a possible PRP under CERCLA (in light of the

Navy’s historic involvement in the operation of the Ordot Dump). This posture is hardly unique to this

case. Currently, there are 159 current or proposed federal sites on the Superfund National Priorities List,

which identifies high-priority sites for investigation and cleanup. The federal government plays a dual

role at many of those sites across the country. During the proceedings before the Supreme Court,

commentators—including a group of 24 states, the Commonwealth of the Northern Mariana Islands, and

the District of Columbia, which filed an amicus brief in support of Guam—expressed concern that the

United States should not be able to craft settlements of federal enforcement actions under other statutes

that would allow federal PRPs to evade CERCLA liability. Following the Supreme Court’s ruling, if a

private party resolves its liability to the United States under a statute other than CERCLA for

environmental harm at a particular site, it may still be able to bring a cost-recovery action against the

United States under CERCLA in connection with the federal government’s involvement at a site.

As the Supreme Court acknowledged, there is sometimes a functional overlap between CERCLA

response actions and cleanup activities undertaken to resolve liability under environmental laws. The

Court described its interpretation of Section 113(f)(3)(B) as requiring that a prior settlement expressly

resolve CERCLA liability as “the far simpler approach” compared to a case-by-case analysis of whether

an earlier settlement was “close enough to CERCLA.” In the future, parties like Guam that are resolving

their non-CERCLA liability through settlement may need to consider an additional point: they may either

limit the scope of those non-CERCLA settlements, thereby leaving themselves vulnerable to additional

litigation, in order to protect their ability to bring a CERCLA cost-recovery claim later; or they may

resolve their liability more broadly, including any potential CERCLA liability, but foreclose their ability

to bring a future cost-recovery claim and begin the three-year period to bring a contribution claim. It is

also possible, as the United States warned in its brief, that a settling party invoking Section 107(a) could

choose when the statute of limitations period begins to run by deciding when to begin on-site construction

of a remedial action, which could delay the timely cleanup of and settlements regarding contaminated

sites. Such a delay may not be possible, however, if a non-CERCLA settlement requires the settling party

to take cleanup action within a specific timeframe.

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Considerations for Congress

Congress added Section 113 to CERCLA in the Superfund Amendments and Reauthorization Act of 1986

to clarify that parties that are “liable under CERCLA [can] seek contribution from other potentially liable

parties.” See H.Rept. 99-253, pt. 1, at 79 (1985). Since then, courts have struggled with the intersection of

CERCLA’s cost-recovery and contribution provisions, acknowledging that “the supposedly sharp

distinction” between the mutually exclusive causes of action “does not always play out in practice.” This

is the second Term in a row in which the Supreme Court has attempted to clarify technically detailed

questions about the interplay of different provisions in CERCLA.

Notwithstanding the Court’s ruling, if Congress believes the United States’ broader reading of Section

113(f)(3)(B) is the correct one, it could amend CERCLA to specify that a “response action” need not be

pursuant to CERCLA in order to trigger Section 113(f) contribution rights. Congress could also amend

CERCLA to address the question left unaddressed by the Court, i.e., whether a settlement that disclaims

liability or reserves a party’s rights can resolve liability sufficient to trigger Section 113(f)(3)(B).

Author Information

Kate R. Bowers

Legislative Attorney

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