Arconic, Inc. v. Apc Investment Co. ( 2020 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ARCONIC, INC., FKA Alcoa, Inc.; No. 19-55181
APPLIED MICRO CIRCUITS CORP.;
BASF CORPORATION; BAXTER D.C. No.
HEALTHCARE CORPORATION; CAL- 2:14-cv-06456-
TAPE & LABEL CO.; CALIFORNIA GW-E
HYDROFORMING COMPANY, INC.;
CINTAS CORPORATION; COLUMBIA
SHOWCASE & CABINET COMPANY, OPINION
INC.; COUNTY OF LOS ANGELES;
CROSBY & OVERTON, INC.; DISNEY
ENTERPRISES, INC.; FHL GROUP;
FORENCO, INC.; GENERAL DYNAMICS
CORPORATION; HEXCEL
CORPORATION; HERCULES, INC.;
HONEYWELL INTERNATIONAL, INC.;
INTERNATIONAL PAPER COMPANY;
LOS ANGELES COUNTY
METROPOLITAN TRANSPORTATION
AUTHORITY; MATTEL, INC.; MASCO
CORPORATION OF INDIANA; MERCK
SHARP & DOHME CORPORATION;
PILKINGTON GROUP LIMITED; QUEST
DIAGNOSTICS CLINICAL
LABORATORIES, INC.; RAYTHEON
COMPANY; SOCO WEST, INC.;
SPARTON TECHNOLOGY, INC.; THE
BOEING COMPANY; THE DOW
CHEMICAL COMPANY; REGENTS OF
THE UNIVERSITY OF CALIFORNIA;
2 ARCONIC V. APC INVESTMENT
TRIMAS CORPORATION; UNIVAR
USA, INC.; SAFETY-KLEEN
SYSTEMS, INC.,
Plaintiffs-Appellants,
v.
APC INVESTMENT CO.; ASSOCIATED
PLATING COMPANY; ASSOCIATED
PLATING COMPANY, INC.; GORDON
E. MCCANN; LYNNEA R. MCCANN;
DARRELL K. GOLNICK; CLARE S.
GOLNICK; BODYCOTE THERMAL
PROCESSING, INC.; POWERINE OIL
COMPANY; CLAUDETTE EARL; EARL
MFG. CO., INC.; FERRO CORP.;
FIREMAN’S FUND INSURANCE
COMPANY; FEDERAL INSURANCE
COMPANY; PALLEY SUPPLY
COMPANY; FOSS PLATING COMPANY,
INC.; KEKROPIA, INC.; PALMTREE
ACQUISITION CORPORATION;
PHIBRO-TECH, INC.; FIRST DICE
ROAD COMPANY, INC.; UNION
PACIFIC RAILROAD COMPANY;
HALLIBURTON AFFILIATES, LLC;
CHERYL A. GOLNICK,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
George H. Wu, District Judge, Presiding
ARCONIC V. APC INVESTMENT 3
Argued and Submitted March 3, 2020
Pasadena, California
Filed August 10, 2020
Before: Consuelo M. Callahan and Jacqueline H. Nguyen,
Circuit Judges, and Dana L. Christensen, * District Judge.
Opinion by Judge Callahan
SUMMARY **
Environmental Law
The panel reversed the district court’s grant of summary
judgment in favor of defendants and remanded for further
proceedings in an action seeking contribution for cleanup
costs under § 113(f) of the Comprehensive Environmental
Response, Compensation, and Liability Act.
The panel held that to trigger the CERCLA limitations
period, requiring parties to pursue contribution for their
cleanup costs within three years of the “entry of a judicially
approved settlement with respect to such costs,” a settlement
must impose costs on the party seeking contribution. The
panel explained that a party can obtain contribution only for
costs incurred in excess of its own liability. A settlement,
*
The Honorable Dana L. Christensen, United States District Judge
for the District of Montana, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
4 ARCONIC V. APC INVESTMENT
then, starts the limitations period on a § 113(f) claim for
response costs only if it imposed such costs and serves as the
basis for seeking contribution. The panel concluded that
here, plaintiffs’ settlement with certain de minimis parties
did not start the limitations period for contribution claims
against different polluters.
The panel further held that plaintiffs were not judicially
estopped from seeking contribution for their costs.
COUNSEL
E. Joshua Rosenkranz (argued) and Elizabeth R.
Cruikshank, Orrick Herrington & Sutcliffe LLP, New York,
New York; Brian P. Goldman, Easha Anand, and Karim J.
Kentfield, Orrick Herrington & Sutcliffe LLP, San
Francisco, California; Nancy Sher Cohen and Ronald A.
Valenzuela, Lathrop Gage LLP, Los Angeles, California; for
Plaintiffs-Appellants.
Thomas R. McCarthy (argued), Consovoy McCarthy PLLC,
Arlington, Virginia; David E. Cranston, Greenberg Glusker,
Los Angeles, California; for Defendant-Appellee Union
Pacific Railroad Company.
James B. Harris, Thompson & Knight LLP, Dallas, Texas;
for Defendant-Appellee Bodycote Thermal Processing, Inc.
Robert P. Doty (argued) and Cathy T. Moses, Cox Castle &
Nicholson LLP, San Francisco, California, for Defendant-
Appellee Palmtree Acquisition Corporation.
No appearances by remaining Defendants-Appellees.
ARCONIC V. APC INVESTMENT 5
Matthew R. Oakes (argued) and Jennifer Scheller Neumann,
Attorneys; Eric Grant, Deputy Assistant Attorney General;
Environment and Natural Resources Division, United States
Department of Justice, Washington, D.C.; Michael Massey,
Attorney, United States Environmental Protection Agency;
for Amicus Curiae United States.
Xavier Becerra, Attorney General; Sally Magnani, Senior
Assistant Attorney General; Edward H. Ochoa, Supervising
Deputy Attorney General; Olivia W. Karlin and James
Potter, Deputy Attorneys General; Office of the Attorney
General, Los Angeles, California; for Amicus Curiae
California Department of Toxic Substances Control.
Timothy T. Coates and Marc J. Poster, Greines Martin Stein
& Richland LLP, Los Angeles, California, for Amicus
Curiae Former United States Department of Justice Official
Stephen D. Ramsey.
6 ARCONIC V. APC INVESTMENT
OPINION
CALLAHAN, Circuit Judge:
The Comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA) requires parties
to pursue contribution for their cleanup costs within three
years of the “entry of a judicially approved settlement with
respect to such costs.” 42 U.S.C. § 9613(g)(3)(B). This
appeal asks whether, to trigger this limitations period, a
settlement must impose costs on the party seeking
contribution—a question we answer in the affirmative.
Because the district court relied on a contrary reading of the
statute in holding the plaintiffs’ claims time-barred, we
reverse its grant of summary judgment in the defendants’
favor.
I.
A.
The Omega Chemical Corporation recycled solvents and
refrigerants at its facility in Whittier, California, from 1976
to 1991. The company’s mishandling of these substances
caused them to spill and leak from drums, tanks, and pipes,
severely contaminating nearby soil and groundwater. In
1999, the U.S. Environmental Protection Agency (EPA)
placed the Omega facility on the National Priorities List, a
list of the most contaminated sites in the nation. 64 Fed.
Reg. 2942, 2945 (Jan. 19, 1999). The agency then set about
developing a long-term remedial plan for cleaning up the
site, splitting the process into manageable phases, or
“operable units.” See 40 C.F.R. § 307.14 (defining
“operable unit” as “a discrete action that comprises an
incremental step toward comprehensively addressing site
problems”). EPA first turned toward cleaning up the soil and
ARCONIC V. APC INVESTMENT 7
groundwater contamination in the immediate vicinity of the
Omega plant. It dubbed this Operable Unit 1 (OU-1).
EPA negotiated the cleanup of OU-1 with a group of
Omega’s customers, who formed the Omega Chemical
Potentially Responsible Parties Organized Group (OPOG).
The discussions proved fruitful, with OPOG agreeing to lead
the remedial efforts with EPA oversight. To give a district
court authority over that agreement and to trigger OPOG’s
right to seek contribution, the United States simultaneously
lodged a complaint against OPOG with a proposed consent
decree resolving that complaint. The consent decree
required OPOG to contain and remediate the groundwater
contamination around the Omega plant. It also required
OPOG to reimburse the United States for its cleanup costs.
The court entered the consent decree a few months later, in
early 2001, thereby resolving OPOG’s liability as to OU-1.
Under the applicable statute of limitations, 42 U.S.C.
§ 9613(g)(3)(B), the entry of the consent decree gave OPOG
three years to seek contribution for its OU-1 costs. So in
2004 OPOG sued various other entities that had sent
hazardous waste to the Omega plant. By and large, these
defendants had contributed relatively small amounts of
waste. They were, in EPA parlance, “de minimis” parties.
See 42 U.S.C. § 9622(g) (characterizing de minimis parties
by the quantity and toxicity of their waste). OPOG’s
complaint alleged that it had incurred $6.5 million in
cleaning up the site, and it asserted that the de minimis
parties were liable for their share of OPOG’s past and future
cleanup costs.
The de minimis parties agreed to settle OPOG’s claims
for $1.7 million. In exchange, OPOG assumed their
“responsibilities” for the site, including their cleanup costs.
This assumption was not limited to costs associated with
8 ARCONIC V. APC INVESTMENT
OU-1; it included any Omega-site claims that the United
States or another party might, in the future, assert against the
de minimis parties. In essence, the settlement allowed these
parties to walk away from the site effectively immune from
further pursuit. The court approved that settlement in 2007.
EPA was meanwhile investigating Operable Unit 2
(OU-2). The agency had learned that chemicals from the
Omega plant had migrated through groundwater and
comingled with hazardous waste released from other
facilities, forming a toxic plume extending over four miles
downgradient of OU-1. In 2011, once EPA better
understood the extent of the OU-2 plume, it selected a
remedy: an extensive “pump-and-treat” system that would
draw contaminated water from the ground and strip it of
chemicals.
As it had with OU-1, OPOG agreed to spearhead the
cleanup efforts for OU-2. The parties formalized their
arrangement in 2016, with the United States again lodging a
complaint and corresponding consent decree the same day. 1
This time, though, the litigation concerned the downgradient
plume. The consent decree committed OPOG to finance and
implement the OU-2 pump-and-treat system. It further
obligated OPOG to post a $70 million performance
guarantee and reimburse the United States for its past and
future OU-2 costs. The court approved the consent decree
in 2017, thereby resolving OPOG’s liability as to that portion
of the site.
1
In 2010, the United States also sued and settled with OPOG for
work concerning OU-1 soil contamination.
ARCONIC V. APC INVESTMENT 9
B.
Several years earlier, in 2014, having already undertaken
some OU-2 work, OPOG brought this suit seeking to recover
the costs of that work from APC Investment Company and
other entities (collectively, the APC defendants) who
purportedly had contributed to the plume but not its cleanup.
Once OPOG entered into the OU-2 consent decree, it
amended its complaint to drop the cost-recovery claim and
assert one for contribution in its stead. OPOG also sought a
declaration as to the APC defendants’ liability “for their
respective equitable shares” of the obligations OPOG had
incurred under the OU-2 consent decree.
Some of the APC defendants moved for summary
judgment, arguing that OPOG’s 2007 settlement with the de
minimis parties triggered CERCLA’s three-year statute of
limitations for contribution claims. The district court agreed,
holding that the 2007 settlement was “with respect to” the
same costs sought in this litigation and that, as a result,
OPOG’s claims were time-barred. Observing that the
settlement resolved OPOG’s and the de minimis parties’ site-
wide claims against each other, the court reasoned that OU-2
necessarily fell within the scope of their agreement. The
court also noted that OPOG was likely estopped from
arguing that it could not previously seek contribution for
OU-2 costs, since it asserted just such a claim in its 2004
complaint against the de minimis parties. The court entered
judgment, and OPOG timely appealed. We have jurisdiction
under 28 U.S.C. § 1291 and reverse.
II.
We review de novo the grant of summary judgment and
interpretation of CERCLA. Asarco LLC v. Celanese Chem.
Co., 792 F.3d 1203, 1208 (9th Cir. 2015). We also interpret
10 ARCONIC V. APC INVESTMENT
CERCLA settlements de novo but defer to the district court’s
factual findings unless they are clearly erroneous. Id. And
finally, we review a district court’s application of the
doctrine of judicial estoppel for an abuse of discretion. MK
Hillside Partners v. Comm’r of Internal Rev., 826 F.3d 1200,
1203 (9th Cir. 2016).
III.
A.
Congress enacted CERCLA to “promote the timely
cleanup of hazardous waste sites and to ensure that the costs
of such cleanup efforts [are] borne by those responsible for
the contamination.” Burlington N. & Santa Fe Ry. Co. v.
United States, 556 U.S. 599, 602 (2009) (internal quotation
marks and citation omitted); accord S. Rep. No. 96-848,
at 13 (1980). To that end, the statute provides two
mechanisms for private parties to recoup their cleanup costs:
cost-recovery actions under § 107(a), 42 U.S.C. § 9607(a),
and contribution actions under § 113(f), id. § 9613(f). These
related but distinct provisions “complement each other by
providing causes of action to persons in different procedural
circumstances.” United States v. Atl. Research Corp.,
551 U.S. 128, 139 (2007) (internal quotation marks and
citation omitted).
Section 107(a) enables parties to recover their directly
incurred “response”—i.e., cleanup—costs from those liable
for the contamination. 42 U.S.C. § 9607(a); see Key Tronic
Corp. v. United States, 511 U.S. 809, 819 n.13 (1994)
(explaining that CERCLA “encourage[s] private parties to
assume the financial responsibility of cleanup by allowing
them to seek recovery from others” (internal quotation marks
and citation omitted)). The provision imposes strict liability,
and a successful § 107(a) claim generally results in the
ARCONIC V. APC INVESTMENT 11
defendant being held jointly and severally liable for all
cleanup costs sought in the suit, even those attributable, at
least in part, to others. Arizona v. City of Tucson, 761 F.3d
1005, 1011 (9th Cir. 2014). Consequently, a cost-recovery
defendant often faces a disproportionate share of liability for
a site’s contamination.
That is where § 113(f) comes in. It provides parties with
a right of contribution “to recover expenses paid under a
settlement agreement or judgment.” Whittaker Corp. v.
United States, 825 F.3d 1002, 1009 (9th Cir. 2016). Parties
subjected to suit under § 107(a) or § 106—which empowers
the United States to order certain cleanups—can file for
contribution, 42 U.S.C. § 9613(f)(1), as can parties that settle
their liability with the United States or a state, id.
§ 9613(f)(3)(B). Hence, a claim for contribution, unlike one
for cost recovery, turns on a party first facing or incurring
liability to a third party. Atl. Research, 551 U.S. at 139–40.
If that liability exceeds the particular polluter’s portion of
responsibility for a cleanup, § 113(f) serves to force others
to shoulder their share of the burden. Id. at 139.
CERCLA imposes a three-year statute of limitations on
§ 113(f)(1) contribution claims. 42 U.S.C. § 9613(g)(3).
The clock starts to run not when the claims accrue, but upon
the occurrence of certain statutory triggering events. As
relevant here, the statute bars parties from filing for
contribution “for any response costs . . . more than three
years after . . . [the] entry of a judicially approved settlement
with respect to such costs.” Id. § 9613(g)(3)(B). We must
decide whether the 2007 settlement, which imposed no
liability on OPOG but transferred to it the de minimis parties’
responsibilities for the Omega site, triggered this provision.
12 ARCONIC V. APC INVESTMENT
B.
Starting, as we must, with the statute’s text, Lamie v. U.S.
Trustee, 540 U.S. 526, 534 (2004), we find the limitations
provision’s applicability to claims for “contribution” largely
dispositive. Because “[n]othing in § 113(f) suggests that
Congress used . . . ‘contribution’ in anything other than [its]
traditional sense,” the term refers to the “tortfeasor’s right to
collect from others responsible for the same tort after the
tortfeasor has paid more than his or her proportionate share.”
Atl. Richfield, 551 U.S. at 138 (quoting Black’s Law
Dictionary (8th ed. 2004)); accord Whittaker, 825 F.3d at
1008. A CERCLA contribution claim, in other words, is by
definition predicated upon “an inequitable distribution of
common liability among liable parties.” 2 Atl. Richfield,
551 U.S. at 139.
2
The Restatement elaborates:
A person seeking contribution must extinguish the
liability of the person against whom contribution is
sought for that portion of liability, either by settlement
with the plaintiff or by satisfaction of judgment. As
permitted by procedural rules, a person seeking
contribution may assert a claim for contribution and
obtain a contingent judgment in an action in which the
person seeking contribution is sued by the plaintiff,
even though the liability of the person against whom
contribution is sought has not yet been extinguished.
Restatement (Third) of Torts § 33 cmt. b (citations omitted); see also
Friedland v. TIC-The Indus. Co., 566 F.3d 1203, 1206 (10th Cir. 2009)
(defining a CERCLA contribution claim as “a claim by and between
jointly and severally liable parties for an appropriate division of the
payment one of them has been compelled to make” (internal quotation
marks and citation omitted)).
ARCONIC V. APC INVESTMENT 13
Bearing that in mind, interpreting the limitations
provision is fairly straightforward. It provides that a party
must pursue contribution following the entry of a “settlement
with respect to such costs.” The term “such costs” plainly
refers to the response costs sought in the contribution action.
And since a party can obtain contribution only for costs
incurred in excess of its own liability, an action under
§ 113(f)(1) is necessarily for another’s share of the costs
faced or imposed under § 106 or § 107(a). See Am.
Cyanamid Co. v. Capuano, 381 F.3d 6, 13 (1st Cir. 2004)
(“‘[S]uch costs’ . . . refers to the judgment mentioned earlier
in the sentence and identifies a particular claim or
payment.”). A settlement, then, starts the limitations period
on a § 113(f)(1) claim for response costs only if it imposed
those costs and serves as the basis for seeking contribution.
It is therefore inaccurate to characterize the 2007
settlement as covering the costs at issue here merely because
it foresaw the remediation of the OU-2 groundwater plume.
OPOG’s claims do not concern OU-2 in the abstract. Rather,
OPOG seeks the APC defendants’ share of the liability it
assumed in the 2017 OU-2 consent decree. The 2007
settlement did not address those costs. It resolved neither
who would pay for OU-2’s remediation nor what that effort
would entail. Nor did it impose on OPOG any response costs
or remedial obligations. That OPOG agreed to forego
further contribution from the de minimis parties and, in
effect, to indemnify them for future cleanup work bears no
relation to the APC defendants’ responsibility for the site.
The 2007 settlement, after all, did not extinguish OPOG’s
and the APC defendants’ common liability to the United
States for OU-2. Accordingly, that agreement did not start
the limitations period.
14 ARCONIC V. APC INVESTMENT
C.
The APC defendants disagree, of course. They point out
that “with respect to” is broad qualifying language, and that
the limitations provision mentions costs alone—not
obligations, liabilities, or responsibilities. They advise
against reading into the statute any such requirement,
especially since Congress expressly required a resolution of
liability in § 113(f)(3)(B), which authorizes contribution
claims upon settling with the government. Thus, in the APC
defendants’ view, any settlement starts the clock so long as
it relates in some way to the general category of costs at issue
in the contribution action.
But we construe statutory language in context, Celanese,
792 F.3d at 1210, and we limit otherwise capacious terms
when that context “tug[s] . . . in favor of a narrower reading,”
Mellouli v. Lynch, 135 S. Ct. 1980, 1990 (2015) (some
alterations omitted) (quoting Yates v. United States, 574 U.S.
528, 539 (2015)). Here, we see no reason why a settlement
cashing out minor polluters from future involvement with a
site would trip the limitations period for contribution claims
against different polluters. Section 113(f) instead confirms
that the clock starts ticking only upon the entry of a judgment
or settlement resolving an underlying § 106 or § 107(a)
claim and imposing liability on a polluter, who then has three
years to seek contribution for those imposed costs.
To begin with, the APC defendants’ position
contravenes not only the central tenet of common-law
contribution, but also the “standard rule” that a limitations
period does not run—let alone expire—before a party can
assert the associated claim. Green v. Brennan, 136 S. Ct.
1769, 1776 (2016); see also Asarco LLC v. Atl. Richfield
Co., 866 F.3d 1108, 1124 n.8 (9th Cir. 2017) (construing
CERCLA to avoid this very inconsistency). A party’s right
ARCONIC V. APC INVESTMENT 15
to seek contribution extends only to the costs for which it is
potentially or actually liable, as bounded by the operative
complaint, settlement, or judgment. See Whittaker, 825 F.3d
at 1012. So if a party is never sued and never deemed liable
for a particular subset of a site’s cleanup costs, then those
costs are not recoverable under § 113(f)(1). Under the APC
defendants’ broad construction of “settlement” and “costs,”
however, the limitations period could expire prior to the
filing of a § 106 or § 107(a) claim.
This case illustrates the point. The United States’ 2000
complaint sought from OPOG the “reimbursement of certain
costs” and the “performance of certain response actions”
needed to clean up a “portion” of the Omega site. It did not
address site-wide liabilities. And even if it had, the consent
decree filed alongside the 2000 complaint dispels any doubt
as to the scope of OPOG’s then-existing contribution rights.
See id. (basing a party’s § 113(f)(1) rights on the liability
imposed in the resolved § 107(a) action rather than faced in
the complaint underlying that action). That agreement dealt
only with OU-1. It resolved the pending suit but left open
the prospect of the United States later pursuing OPOG for
liability arising from other parts of the site. Once the court
entered the OU-1 consent decree, OPOG had three years to
seek reimbursement under § 113(f) for the costs therein
incurred. But it had no right to contribution outside of that. 3
3
The APC defendants argue that the 2001 consent decree did not
limit OPOG’s contribution rights because § 113(f)(1) allows a party to
seek contribution “during or following” the underlying § 106 or § 107(a)
action. We rejected a nearly identical argument in Whittaker, explaining
that although “the statute permits a party to initiate a contribution action
while a § 107 . . . suit is pending, actual recovery under § 113(f)(1) is
limited to the expenses for which the party is found liable.” 825 F.3d
at 1012. This comports with “how contribution claims traditionally
work.” Id. (citing Restatement (Third) of Torts § 23(b) & cmt. b). So
16 ARCONIC V. APC INVESTMENT
See id. at 1008–09; Celanese, 792 F.3d at 1209 (“[Section
113(f)(1)] remains open while the [§ 106 or § 107(a)]
lawsuit is unresolved.”). Not until 2016, when the United
States sued OPOG for the downgradient plume, could it
pursue contribution for its OU-2 costs. Yet the APC
defendants’ reading of the statute would mean that the
limitations period on that claim expired six years earlier, in
2010, which strikes us as nonsensical. 4
The APC defendants’ focus on the 2007 settlement also
ignores CERCLA’s symmetrical scheme for pursuing
contribution claims. With § 113(f)(1), Congress paired the
events opening the door to contribution with the events
closing it. See Cooper Indus., Inc. v. Aviall Servs., Inc.,
543 U.S. 157, 167 (2004) (noting § 113(g)(3)’s
“corresponding” limitations periods). A contribution claim
accrues when a party is sued under § 106 or § 107(a), and
then “the statute of limitations begins to run once that
litigation settles or ends by judgment.” Celanese, 792 F.3d
at 1209 (emphasis added); see also id. at 1210 (reiterating
the same idea). This framework clearly contemplates that
the underlying § 106 or § 107(a) suit will lead to the
defendant’s liability: being sued anticipates that liability,
here, following resolution of the United States’ 2000 suit, OPOG could
have sought contribution only for “the costs for which [it] was held
liable” in that suit. Id. Other costs were recoverable by way of § 107(a).
See id. at 1009; Agere Sys., Inc. v. Advanced Envtl. Tech. Corp., 602 F.3d
204, 225–26 (3d Cir. 2010) (holding that the parties could pursue
incurred costs under § 107(a) but not § 113(f) “because those parties
were never themselves sued for those amounts”).
4
For similar reasons, the 2010 litigation concerning soil
contamination, see supra n.1, likewise failed to give rise to a contribution
claim for OU-2 costs. That is especially true given that the United States
filed that suit after the limitations period on OPOG’s pending claims
purportedly expired.
ARCONIC V. APC INVESTMENT 17
and the resulting settlement or judgment establishes it. The
statute of limitations sensibly starts then, once the defendant
knows the scope of its obligations. But the 2007 settlement
arose well before that point. It resolved no suit against
OPOG and stemmed instead from OPOG’s own claims
against the de minimis parties. Having the limitations period
run from such agreements would make a mess of both
§ 113(f) and the traditional workings of contribution. The
better reading is that the provision’s reference to settlements
means the agreement imposing the costs in question. 5
Indeed, our case law supports, if not compels, this
conclusion. Celanese, for example, also involved two
settlements concerning the cleanup of a contaminated site.
There we looked to which settlement underlay the plaintiff’s
5
We note in this respect that, in addition to judgments and
settlements, two other events trigger CERCLA’s statute of limitations
for contribution claims: administrative—i.e., EPA—settlements with de
minimis parties, and administrative settlements for cost recovery.
42 U.S.C. § 9613(g)(3). Each imposes liability on the party pursuing
contribution, so we construe “judicially approved settlements”
similarly—as referring to agreements requiring a party to clean up a site
under § 106 or pay response costs under § 107(a). See Beecham v.
United States, 511 U.S. 368, 371 (1994) (“[S]everal items in a list
shar[ing] an attribute counsels in favor of interpreting the other items as
possessing that attribute as well.”).
The legislative history is in accord. The House report explains that
Congress added § 113(f) to confirm “the right of a person held jointly
and severally liable under CERCLA to seek contribution from other
potentially liable parties, when the person believes that it has assumed a
share of the cleanup or cost that may be greater than its equitable share.”
H.R. Rep. No. 99-253(I), at 79 (1985) (emphasis added). The report
adds, in this vein, that “[p]arties who settle for all or part of a cleanup or
its costs, or who pay judgments as a result of litigation, can attempt to
recover some portion of their expenses and obligations in contribution
litigation.” Id. at 80; accord S. Rep. No. 99-11, at 43 (1985).
18 ARCONIC V. APC INVESTMENT
§ 113(f) contribution claim. 792 F.3d at 1210. We held the
claim time-barred because it was for “exactly the same
liability” assumed in the much earlier agreement. Id.
at 1214. Critically, that initial agreement comprehensively
“define[d] who [would] pay for the work and the nature of
the work to remediate” the site. Id. at 1213 (likening the
earlier agreement to “a proportionate liability declaratory
judgment”). The later settlement may have fixed those costs,
we explained, but it imposed no new ones. Id. at 1214. We
further noted that nothing prevented “a party in an early
settlement from seeking contribution related to a later
settlement, as long as those settlements cover separate
obligations.” Id. at 1215 (emphasis added).
In contrast to the underlying settlement in Celanese, the
2007 settlement neither imposed any costs on OPOG nor
obligated it to clean up OU-2. True, the 2007 settlement
transferred to OPOG the de minimis parties’
“responsibilities” for the site, including any of their
prospective future costs for the groundwater plume. 6 But
that is of no moment, as the settlement did not create any
liability on OPOG’s part. What is more, OPOG’s release of
the de minimis parties had no impact on the APC defendants’
share of responsibility for the plume, which remained
outstanding.
While the 2007 settlement fell short of triggering the
limitations period, the 2017 consent decree fits the bill. It
resolved the United States’ § 106 and § 107(a) claims
against OPOG for OU-2. In doing so, it established OPOG’s
6
In 2007, EPA was years away from selecting a remedy for the
plume, and no party was yet liable for its remediation. To date, OPOG
is the only entity to have pursued any CERCLA claim against the de
minimis parties with respect to the Omega site.
ARCONIC V. APC INVESTMENT 19
response obligations for that portion of the site and burdened
OPOG with the APC defendants’ share of liability to the
United States. It, therefore, is the settlement that is “with
respect to” the costs OPOG now seeks. And because OPOG
filed this suit within three years of the entry of that consent
decree, its claims are timely.
D.
Mooring the limitations provision to the settlement
giving rise to the contribution costs also serves CERCLA’s
remedial objectives. As this case amply demonstrates, the
cleanup of contaminated sites can span many years and
involve scores of litigants. Settling with de minimis parties
plays an important role in streamlining this process. Cashing
out minor contributors can supply a needed influx of funds
for cleanup work, and releasing them from future liability
can reduce the number of parties involved, simplifying
litigation and reducing transaction costs.
The APC defendants’ reading of the limitations
provision as including settlements untethered to resolved or
pending § 106 or § 107(a) claims would throw a wrench into
this process. It would dissuade major polluters from
providing a complete release to any party, however minor
that party’s role in contributing to a site’s contamination.
That is because any such release would require major
polluters to then file all possible contribution claims
concerning the site, even when the bounds of site-wide
liability remain undefined. The parties to such a suit would,
in turn, have to fight over their respective equitable shares of
response costs that the United States or another party may
never pursue. Here, OPOG would have had to sue for
contribution for OU-2 despite EPA having yet to select a
remedy for the plume. While § 113(f)(1) was intended to
“bring[] all . . . responsible parties to the bargaining table at
20 ARCONIC V. APC INVESTMENT
an early date,” Whittaker, 825 F.3d at 1013 (Owens, J.,
concurring) (quoting H.R. Rep. No. 99-253(I), at 80 (1985)),
it does not operate to prohibit the phased and orderly
resolution of response obligations for complex sites.
The APC defendants protest that, to avoid tripping the
limitations provision, major polluters can always cabin their
releases to particular parts of a site, similar to how the United
States proceeded in iterative stages with OPOG. Yet this
approach would undo much of the benefit derived from de
minimis settlements in the first place. As EPA guidance
explains, the legal fees and other transaction costs of
negotiating with de minimis parties often dwarf their
ultimate share of site-wide liability. 52 Fed. Reg. 24,333,
24,334 (June 30, 1987). The early dismissal of these parties
thus serves the interests of all involved. Repeatedly
dragging them to the table, on the other hand, would bog
down negotiations, increase costs, and discourage
settlement, given the lack of finality and certainty otherwise
afforded by a complete release. See United States v.
Cannons Eng’g Corp., 899 F.2d 79, 89 (1st Cir. 1990)
(discussing some of the benefits associated with de minimis
settlements). Such an outcome neither hastens cleanups nor
ensures that responsible parties bear the costs.
IV.
Finally, we conclude that OPOG is not judicially
estopped from seeking contribution for its OU-2 costs.
“Judicial estoppel is an equitable doctrine that precludes a
party from gaining an advantage by asserting one position,
and then later seeking an advantage by taking a clearly
inconsistent position.” Hamilton v. State Farm Fire & Cas.
Co., 270 F.3d 778, 782 (9th Cir. 2001) (first citing Rissetto
v. Plumbers & Steamfitters Local 343, 94 F.3d 597, 600–01
(9th Cir. 1996); then citing Russell v. Rolfs, 893 F.2d 1033,
ARCONIC V. APC INVESTMENT 21
1037 (9th Cir. 1990)). According to the APC defendants,
OPOG successfully pursued contribution for OU-2 costs in
its 2004 suit against the de minimis parties, so it cannot now
contend that such a claim arose only recently, upon entry of
the OU-2 consent decree.
This argument is largely beside the point. Even if OPOG
had obtained from the de minimis parties contribution for
OU-2, the 2007 settlement did not start the limitations period
because it did not impose on OPOG the APC defendants’
share of liability for the downgradient plume. Furthermore,
we discern no clear inconsistency in OPOG’s position. The
2004 litigation necessarily involved a § 113(f) claim for the
costs OPOG had assumed under the 2001 OU-1 consent
decree, and a § 107(a) claim for the other costs OPOG had
incurred but for which it had not, at that point, been sued.
Although OPOG’s complaint labeled the claims as for
“contribution,” it cited to § 107(a) in addition to § 113(f).
Moreover, OPOG’s 2006 motion for judicial approval of the
resulting settlement was clearer in this regard. It explained
that the claims were for contribution and cost recovery. 7 See
Neighbors of Cuddy Mountain v. Alexander, 303 F.3d 1059,
1064 n.2 (9th Cir. 2002) (looking to a claim’s substance
rather than its caption). OPOG’s current position is thus
7
Prior to the Supreme Court holding in 2007 that potentially
responsible parties could proceed under § 107(a), Atl. Research,
551 U.S. at 141, this circuit took the view that any action between such
parties was “necessarily for contribution.” See Kotrous v. Goss-Jewett
of N. Cal., 523 F.3d 924, 932 (9th Cir. 2008) (overruling this position).
It therefore makes sense that OPOG would have so styled its claims.
22 ARCONIC V. APC INVESTMENT
consistent with its earlier one, and the district court erred in
concluding otherwise. 8
V.
In sum, we hold that Congress incorporated into
CERCLA basic precepts of common-law contribution.
Chief among those precepts is that contribution turns on a
party having incurred an inequitable share of another’s
liability. CERCLA’s limitations period, 42 U.S.C
§ 9613(g)(3)(B), runs upon the entry of the settlement
imposing that liability, but not before. The statutory text
supports this reading, as does its purpose. We therefore
reverse the district court’s holding that OPOG’s claims are
untimely and remand the case for further proceedings
consistent with this opinion.
REVERSED AND REMANDED.
8
Contrary to the APC defendants’ contention, OPOG did not forfeit
its right to rebut this argument at two hearings and in its supplemental
summary judgment briefs. We may review any matter passed upon by
the district court, Ahanchian v. Xenon Pictures, Inc., 624 F.3d 1253,
1260 n.8 (9th Cir. 2010) (citing Blackmon-Malloy v. U.S. Capitol Police
Bd., 575 F.3d 699, 707 (D.C. Cir. 2009)), and, in any event, OPOG did
discuss the issue. At the first hearing OPOG argued that estoppel was
inextricably tied to the characterization of the 2007 settlement. At the
second hearing the APC defendants broached estoppel only in asking for
a clear ruling on the matter. And as for the supplemental briefs, estoppel
was not among the matters the district court had ordered addressed.