February 2, 2009
A recent ruling from the Western District of Washington highlights the uncertainty facing litigants as district courts continue to struggle to apply the guidance found in the Supreme Court’s two landmark CERCLA decisions, Cooper Industries v. Aviall Services, Inc., 543 U.S. 147 (2004) and United States v. Atlantic Research, 127 S. Ct. 2331 (2008).
In Port of Tacoma v. Todd Shipyards, the Western District of Washington initially ruled that plaintiffs can file a contribution action under Section 113(f)(1) of CERCLA as long as any party at the site had been the subject of a prior Section 106 or 107 suit. On January 14, 2009, the district court reversed itself and held that Section 113(f)(1) of CERCLA requires would-be plaintiffs to themselves have been the subject of a Section 106 or 107 action in order to state a claim for contribution. See Port of Tacoma v. Todd Shipyards Corp., No. C08-5132BHS, 2009 WL 113852 (W.D. Wash. Jan. 14, 2009); Port of Tacoma v. Todd Shipyards Corp., No. C08-5132BHS, 2008 WL 4454136 (W.D. Wash. Sept. 30, 2008).
In Port of Tacoma, the Port sued Todd Shipyards, among others, for contribution for the costs of cleanup at a former shipbuilding site pursuant to Section 113(f)(1) of CERCLA. Todd Shipyards, in turn, sought to bring the United States into the CERCLA litigation as a contribution defendant because it alleged that the United States was also a former operator, owner or arranger at the site (i.e., a potentially responsible party (“PRP”)) and was contractually obligated to pay for certain of Todd’s costs. The United States moved to dismiss Todd Shipyards contribution cause of action. Among other arguments, it asserted that Todd Shipyards was precluded from bringing a contribution claim against it–or anyone else–pursuant to Section 113(f)(1) because Todd Shipyards had not been itself the subject of a Section 106 or 107 claim. The United States relied on Cooper Industries in which the Supreme Court held that a PRP who voluntarily incurred cleanup costs–there was no order compelling the PRP to cleanup and no civil action pending–could not bring suit under Section 113(f)(1) because that section permitted contribution only “‘during or following’ a specified civil action [i.e., a Section 106 or 107 action].” 543 U.S. at 166.
In its first ruling, the Western District of Washington rejected the narrow construction of Section 113 advanced by the United States. The court was satisfied that “the underlying action”–the federal enforcement action against the Port of Tacoma–giving rise to Todd Shipyards’ potential liability and its contribution claim were brought pursuant to Section 107. The court supported this conclusion with a passage from Atlantic Research in which the Supreme Court noted that Section 113(f)(1) “authoriz[es] a contribution action to PRPs with common liability stemming from an action instituted under [Section 106 or 107].” The court reasoned that Todd Shipyards’ claim against the United States, as an alleged PRP, stemmed from the underlying action and involved the common liability of all PRPs at the site. This interpretation is arguably consistent with the text of Section 113(f)(1) which permits a contribution action “during or following any civil action” under Section 106 or 107.
Ruling on a motion for reconsideration filed by the United States, the Western District of Washington concluded that in so holding it had committed “manifest error.” The United States persuaded the Court that Cooper and CERCLA definitively establish that no Section 113(f)(1) contribution action may be brought in the absence of a Section 106 or 107 action directly against the would-be contribution plaintiff. The court also noted that Todd Shipyards will not risk paying more than its equitable share even if the United States were not a party because, as a matter of law, the Port may only seek Todd Shipyards’ equitable share of damages under Section 113(f)(1).
Should other courts adopt this view of Section 113, the impact on the dynamics of PRP CERCLA litigation could be significant. The ruling vests significant power in two classes of people: the plaintiff instigating CERCLA litigation (e.g., a government enforcement authority or a PRP who voluntarily cleaned up the site) and the first tier of PRP defendants like the Port in Port of Tacoma. In some cases, these persons could constrain the ability of other parties to pursue cleanup costs under CERCLA. Another potentially troubling aspect of this rule is the United States’ dual role in CERCLA litigation. It is unclear what influence, if any, the United States’ interests as a CERCLA defendant will have on its choice of targets for enforcement actions. And, although the court in Port of Tacoma dismissed the potential inequity of preventing a contribution defendant from pursuing additional PRPs because, in theory, a defendant to a contribution action should only be liable for its own equitable share of cleanup, that theory has yet to be tested or applied.
Gibson, Dunn & Crutcher has particular experience in environmental litigation, including the pursuit and defense of actions pursuant to CERCLA. In amicus briefs prepared by Washington, D.C. office partners Miguel Estrada, Raymond Ludwiszewski, and Michael K. Murphy on behalf of Lockheed Martin Corporation, Gibson Dunn urged the Supreme Court to conclude, as it did in Atlantic Research, that CERCLA provides a cause of action for PRPs.
To learn more about the firm’s Environmental Litigation and Mass Tort practice group, please contact the Gibson Dunn attorney with whom you work, or any of the following:
Jeffrey D. Dintzer (213-229-7872, [email protected]
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