New Jersey Dept. Environmental v. American Thermoplastics Corp

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
________________
Nos. 18-2865 & 19-2243
________________
NEW JERSEY DEPARTMENT OF
ENVIRONMENTAL PROTECTION;
ADMINISTRATOR, NEW JERSEY SPILL
COMPENSATION FUND
v.
AMERICAN THERMOPLASTICS CORPORATION;
BECKMAN INSTRUMENTS, INC.
a/k/a Beckman Coulter Inc.;
CADILLAC PLASTICS GROUP, INC. f/k/a/ Day
International Corporation
CWM CHEMICAL SERVICES, LLC;
CHESTER HILLS, INC.;
CHRYSLER CORPORATION;
COMPACTION SYSTEMS CORPORATION;
COMPACTION SYSTEMS CORPORATION OF
CONNECTICUT, INC.;
COMPTON PRESS, INC.;
CONNECTICUT RESOURCE
RECOVERY AUTHORITY, INC.;
EAGLE INDUSTRIES, INC.;
EASTERN ENVIRONMENTAL SERVICES, INC.;
EMERSON QUIET KOOL CORPORATION; FALCON
MANUFACTURING, INC.;
JOHN C. FILIBERTO, in his individual capacity;
JOSEPH B. FILIBERTO, in his individual capacity;
J. FILIBERTO SANITATION, INC.;
FLAIR CLEANERS OF MORRISTOWN, INC.;
GARBCO ASSOCIATES, INC.; JAMES P HORAN, INC.;
HOWMET CORPORATION
a/k/a Howmet Turbine Components Corporation;
RAYONIER, INC. f/k/a ITT Rayonier, Inc.;
KEUFFEL & ESSER COMPANY;
MARS, INC.; THE MENNEN COMPANY;
OCCIDENTAL PETROLEUM CORPORATION;
PHILLIPS PETROLEUM COMPANY, INC.;
POLICASTRO SERVICE, INC.;
PUBLIC SERVICE ELECTRIC & GAS COMPANY;
WARNER LAMBERT COMPANY, INC.;
WASTE MANAGEMENT OF NEW JERSEY, INC.,
f/k/a/ Waste Management of North Jersey, Inc.
COMPACTION SYSTEMS CORPORATION OF
CONNECTICUT, INC.;
COMPACTION SYSTESM CORPORATION
(a New Jersey Corporation),
Third Party Plaintiffs
v.
CARTER DAY INDUSTRIES, INC.;
COMBUSTION EQUIPMENT ASSOCIATES, INC.;
COMBE FILL CORPORATION,
Third Party Defendants
2
(D.C. No. 2-98-cv-04781)
UNITED STATES OF AMERICA
v.
BECKMAN COULTER, INC. f/k/a BECKMAN
INSTRUMENTS, INC.;
CADILLAC PLASTICS GROUP, INC.
f/k/a/ Day International Corporation f/k/a Dayco Corporation;
CWM CHEMICAL SERVICES, LLC;
f/k/a/ Chem-Trol Pollution Services Inc.
as successor R&R Sanitation, Inc.
CHESTER HILLS, INC.; CHRYSLER CORPORATION;
COMPACTION SYSTEMS CORPORATION;
COMPACTION SYSTEMS CORPORATION OF
CONNECTICUT, INC.
COMPACTION SYSTEMS CORPORATION
OF NEW JERSEY INC.;
CONNECTICUT RESOURCE
RECOVERY AUTHORITY, INC.;
EAGLE INDUSTRICAL PRODUCTS, INC.,
as successor to Falcon Manufacturing, Inc.;
EAGLE INDUSTRIES, INC.;
EASTERN ENVIRONMENTAL SERVICES, INC.;
as successor to West Milford Haulage, Inc. and
Frank Fenimore, Inc.;
FALCON MANUFACTURING, INC.;
JOHN C. FILIBERTO, in his individual capacity;
JOSEPH B. FILIBERTO, in his individual capacity;
GARBCO ASSOCIATES, INC.
f/k/a Filiberto Sanitation, Inc.;
HOWMET CORPORATION
3
a/k/a Howmet Turbine Components Corporation;
MARS, INC.; THE MENNEN COMPANY;
OCCIDENTAL PETROLEUM CORPORATION;
PHILLIPS PETROLEUM INC.; RAYONIER, INC.;
WARNER-LAMBERT COMPANY INC.;
WASTE MANAGEMENT OF NEW JERSEY, INC.,
as successor to J. Filiberto Sanitation, Inc.
(D.C. No. 2-98-cv-04812)
Compaction Systems Corporation
of Connecticut, Inc.;
Compaction Systems Corporation
(a New Jersey Corp.),
Appellants in No. 18-2865
United States of America,
Appellant in No. 19-2243
________________
Appeal from the United States District Court
for the District of New Jersey
(D.C. Civil Action Nos. 2-98-cv-04781/2-98-cv-04812)
District Judge: Honorable William H. Walls
________________
Argued June 1, 2020
Before: AMBRO, HARDIMAN,
and RESTREPO, Circuit Judges
4
(Opinion filed: September 8, 2020)
Jeffrey M. Pollock (Argued)
Fox Rothschild
997 Lenox Drive
Princeton Pike Corporate Center, Building 3
Lawrenceville, NJ 08648
Robert J. Rohrberger
Fox Rothschild
49 Market Street
Morristown, NJ 07960
Jonathan D. Brightbill
Eric Grant
Deputy Assistant Attorneys
Brian Toth
Andrea Berlowe (Argued)
Sarah Flanagan
James Bove
United States Department of Justice
Environmental & Natural Resources Division
P.O. Box 7415
Washington, DC 20044
Counsel for Appellants
Charles J. Dennen
Debra S. Rosen (Argued)
Maureen T. Coghlan
Anthony M. Fassano
5
Archer & Greiner
One Centennial Square
33 East Euclid Avenue
Haddonfield, NJ 08033
Counsel for Appellees
________________
OPINION OF THE COURT
________________
AMBRO, Circuit Judge
The Comprehensive Environmental Response,
Compensation, and Liability Act (“CERCLA”), 42 U.S.C.
§ 9601, et seq., promotes the timely cleanup of hazardous sites
by providing that Federal and State Governments cooperate
with one another to remediate the sites and later recover costs
from the parties responsible for polluting them. Although the
procedural history of this case is quite long, the parties present
a single legal question: Whether a polluting party’s settlement
with the State of New Jersey protects it from lawsuits seeking
contributions toward expenditures made by the Federal
Government on the same site? Our answer here is no.
I. BACKGROUND
A. Statutory Background
CERCLA “promote[s] the timely cleanup of hazardous
waste sites and [] ensure[s] that the costs of such cleanup
efforts [are] borne by those responsible for the contamination.”
CTS Corp. v. Waldburger, 573 U.S. 1, 4 (2014) (internal
quotation marks and citation omitted). The statute gives the
President, acting through the Attorney General or the United
6
States Environmental Protection Agency (“USEPA1”), the
power to identify and remediate contaminated sites. See 42
U.S.C. § 9604. To foster rapid cleanup, Congress adopted a
policy of delaying litigation about costs until after a
remediation plan is in place. “Thus, under CERCLA,
[responsible parties’] liability is not assessed until after the
[US]EPA has investigated a site, decided what remedial
measures are necessary, and determined which [parties] will
bear the costs.” In re Combustion Equip. Assocs., 838 F.2d 35,
37 (2d Cir. 1988).
“[S]tates play a critical role in effect[]ing the purposes
of CERCLA.” Niagara Mohawk Power Corp. v. Chevron
U.S.A., 596 F.3d 112, 126 (2d Cir. 2010). Section 104(d)
authorizes the USEPA to “enter into contract[s] or cooperative
agreement[s] with [a] State or political subdivision” to carry
out response activities at the hazardous site. 42 U.S.C.
§ 9604(d)(1)(A). Under these agreements, the State pays all
operation and maintenance expenses, subject to reimbursement
from the Federal Government of up to 90% of the State’s
expenditures. Id. § 9604(c)(3), (c)(5)(D). Both the State and
the Federal Governments may recover their clean-up costs
directly from Potentially Responsible Parties (“PRPs”) under
CERCLA Section 107(a). Id. § 9607(a)(4)(A). In fact,
“[u]nder CERCLA, [S]tates have causes of action independent
from the [F]ederal [G]overnment[,]” Niagara Mohawk Power
Corp., 596 F.3d at 126 (citing 42 U.S.C. § 9607(a)(4)(A)),
allowing them to act “as independent entities” without the
express authorization of the USEPA, id. at 127. Section
107(a)(4)(B) makes a PRP strictly liable for “any other
necessary costs of response incurred by any other person,” so
that the State and Federal Governments can recover fully from
1
This term, “Federal Government” and “United
States” are used interchangeably throughout our opinion.
7
a single PRP regardless of its share of the liability. Id.§ 9607(a)(4)(B).
To enable PRPs to redistribute these costs, Congress
amended CERLCA in 1986 to include Section 113, which
provides that PRPs can seek contribution for an equitable share
of response costs from other liable parties. See United States
v. Atl. Research Corp., 551 U.S. 128, 132 (2007) (citing
Superfund Amendments and Reauthorization Act of 1986,
Pub. L. No. 99-499, § 113, 100 Stat. 1613, 1647–52 (codified
at 42 U.S.C. § 9613)). In addition, to aid the recovery of clean-
up costs, Section 113(f)(2) gives PRPs that settle with the
Federal or State Government protection from other PRPs’
contribution claims as long as those claims and the settlement
address the same “matters.” 42 U.S.C. § 9613(f)(2).
This is the key provision at issue in our case.
Specifically, it provides that “[a] person who has resolved its
liability to the United States or a State in an administrative or
judicially approved settlement shall not be liable for claims for
contribution regarding matters addressed in the settlement.”
Id. This contribution protection leaves “PRPs who do not join
in a first-round settlement . . . with the risk of bearing a
disproportionate share of liability[,] . . . a technique which
promotes early settlements and deters litigation for litigation’s
sake . . . .” United States v. Charter Int’l Oil Co., 83 F.3d 510,
515 (1st Cir. 1996) (internal citation and quotation marks
omitted).
B. Factual and Procedural Background
1. The Combe Superfund Site
From 1948 until 1981, the Combe Fill South Landfill
Superfund Site (the “Site”), a 65-acre parcel located in Chester
and Washington Townships, New Jersey, functioned as a
8
municipal landfill, converting waste into the hazardous
substance “ECO-Fuel II.” In 1978, Carter Day Industries, Inc.
(“Carter Day”), then known as Combustion Equipment
Associates, Inc., purchased and ran the Site through its
subsidiary, the Combe Fill Corporation (“Combe Fill”), until it
closed. During this period, Combe Fill hired Compaction
Systems Corporation of Connecticut, Inc. and Compaction
Systems Corporation (collectively, “Compaction”) to conduct
operations at and transport hazardous materials to the Site.
This appeal pits appellants Compaction and the Federal
Government against appellee Carter Day.
In 1983, the USEPA added the Site to the National
Priorities List for long-term remedial evaluation and response.
As part of the cleanup effort, the USEPA and the New Jersey
Department of Environmental Protection (the “NJDEP”)
entered into a cooperative agreement (the “Cooperative
Agreement”) that continues today and designates the NJDEP
as the lead agency to oversee the Site’s cleanup. Under this
pact, the USEPA “contribute[d] one hundred percent (100%)
of the cost of managing and performing” the remedial
investigation and feasibility study and “ninety percent (90%)
of the cost of managing and performing the work specified in
[the remedial action],” with the NJDEP paying the other 10%.
S.A. 34. An amendment clarified that “[n]othing contained in
this Cooperative Agreement shall be construed to create . . . the
relationship of agency between [US]EPA and the State[,]” and
expressly “negated and denied” the authority of either party to
“attempt to negotiate on behalf of the other.” S.A. 39–40.
Over the decades, the USEPA incurred over $104
million in costs at the Site, while the NJDEP separately spent
$24 million.
2. Combe Fill’s and Carter Day’s Bankruptcy
Proceedings
9
In 1981, just as the Site was closing, Combe Fill filed
for Chapter 7 protection in the Bankruptcy Court for the
Southern District of New York. Both the United States and the
State of New Jersey filed claims in that case, which were
settled separately for $50,000 each. Combe Fill, its
bankruptcy, and its settled claims are not directly at issue here.
A year earlier, Carter Day filed in the same venue a
separate petition for Chapter 11 protection. The Bankruptcy
Court disallowed New Jersey’s claim there because only
Combe Fill was liable for the costs of cleaning up the Site
under New Jersey law. The United States did not file a claim
against Carter Day in its bankruptcy case.
In 1983, the USEPA notified Carter Day and roughly
190 other entities that they were PRPs for the Site’s cleanup
costs. Carter Day sought a declaratory judgment in the District
Court for the Southern District of New York that it had
discharged its CERCLA liability in its bankruptcy
reorganization. The District Court dismissed the case as
unripe. And on appeal the Second Circuit declined to exercise
its discretionary jurisdiction under the Declaratory Judgment
Act because, inter alia, the USEPA investigation of the Site
was at a preliminary stage and deciding the claim prematurely
would interfere with “Congress’s policy of expediting
cleanup.” In re Combustion Equip. Assocs., 838 F.2d at 40.
Accordingly, neither the NJDEP nor the USEPA’s claim
against Carter Day was fully resolved at that time.
3. The NJDEP Settlement with Carter Day
In 1990, Carter Day filed another adversary proceeding
in the SDNY Bankruptcy Court seeking a determination that
the NJDEP claim had been discharged in bankruptcy. It did
not name the USEPA as a defendant. The following year the
Bankruptcy Court approved a settlement between Carter Day
10
and the NJDEP that discharged “all claim[s] of [the] NJDEP
against Carter Day with respect to the [Site]” (the “NJDEP
Settlement”). J.A. 1339. The parties agreed that “the prior
disallowance of the NJDEP’s proof of claim in [Carter Day]’s
Chapter 11 case had res judicata effect and barred the NJDEP’s
claims.” Id. The NJDEP did not receive any additional money
under the Settlement, nor was the USEPA party to it.
4. The USEPA’s and the NJDEP’s Action against
24 PRPs
In 1998, the United States sued 24 PRPs—including
Combe Fill’s contractor, Compaction—in the District Court
for the District of New Jersey to recoup costs it incurred
remediating the Site. The NJDEP filed a similar lawsuit
against many of the same defendants, and the two cases were
consolidated before the District Court.
The United States and the NJDEP entered into a global
consent decree with the majority of the parties (including
Compaction) in 2009 for $62.6 million, with the United States
receiving 81.5% of the funds and the NJDEP receiving the
remainder (the “Consent Decree”). Compaction contributed
$11 million, including over $6.8 million plus interest to the
USEPA, over $1.5 million plus interest to the NJDEP, and over
$433,000 for natural resources damages payable to the NJDEP
as one of the natural resources trustees. In addition,
Compaction agreed to pay $900,000 per year in ongoing
operation and maintenance expenses at the Site for a 30-year
period. Finally, it consented to a judgment of $26 million (the
“Consent Judgment”), but is not obligated to pay any amount
of the Consent Judgment unless its recoveries from CERCLA
contribution actions against other PRPs exceeded at least $11
million plus certain attorneys’ fees. Carter Day was not a party
to either the Consent Decree or the Consent Judgment.
11
5. Compaction’s Contribution Action Against
Carter Day
Compaction filed an amended third-party complaint
seeking contribution from Carter Day in 2011. The latter
moved for summary judgment, and the District Court granted
its motion without oral argument, reasoning that the NJDEP
Settlement protected it from contribution. The Court relied on
our decision in Trinity Industries, Inc. v. Chicago Bridge &
Iron Co., 735 F.3d 131 (3d Cir. 2013). That case interpreted
the language “[a] person who has resolved its liability to the
United States or a State” in a different CERCLA provision,
Section 113(f)(3)(B), to govern the rights of PRPs that resolve
their liability with either the Federal or State Government
rather than requiring resolution with both to apply. Extending
that reasoning to Compaction’s claim, the Court ruled that
Carter Day’s settlement with the NJDEP barred Compaction
from seeking contribution for its federal liability from Carter
Day.
Compaction moved for reconsideration, and the United
States submitted a brief in support of that motion. They argued
that the Court failed to consider the effect of its holding given
CERCLA’s allocation of responsibility between the Federal
Government and the States, as well as the narrow scope of the
“matters addressed” in the NJDEP Settlement.
After determining that the parties did not satisfy the
standards for reconsideration, the District Court denied the
motion. Compaction and the United States appeal to us in
separate actions, consolidated here.
12
II. JURISDICTION & STANDARD OF
REVIEW
The District Court had jurisdiction under 42 U.S.C.
§ 9613(b) and 28 U.S.C. § 1331. We have jurisdiction to
review the District Court’s decision under 28 U.S.C. § 1291.
We review anew a district court’s grant of a party’s
motion for summary judgment. Jutrowski v. Twp. of Riverdale,
904 F.3d 280, 288 (3d Cir. 2018). We will affirm if, drawing
all inferences in favor of the nonmoving party, “the movant
shows that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a).
III. DISCUSSION
A. The Federal Government’s Article III Standing to
Appeal
Compaction no doubt may appeal. Carter Day
challenges, however, whether, under Article III of the United
States Constitution, the United States has standing to appeal
the District Court’s grant of Compaction’s motion for
summary judgment and denial of the latter’s motion to
reconsider, to which the United States filed a brief in support.2
2
The United States is a party to the consolidated case in
front of the District Court, but it never filed a formal motion to
intervene in Compaction’s third-party claim against Carter
Day. In portions of two footnotes in Carter Day’s appellate
brief it appears to argue the United States lacked statutory
standing to appeal because it had not intervened in this specific
matter. See Carter Day Br. 1 n.1, 3 n.3. As this argument was
13
Carter Day contends the Government’s potential recovery
under the $26 million Consent Judgment derives from
Compaction’s contribution actions and is contingent on
Compaction recovering at least $11 million in contribution
from other PRPs. It argues that such a contingent financial
interest does not confer standing.3
vaguely presented without factual or legal support, it is
forfeited for lack of development. See John Wyeth & Bro. Ltd.
v. CIGNA Int’l Corp., 119 F.3d 1070, 1076 n.6 (3d Cir. 1997)
(arguments made in passing, “such as, in a footnote,” are
forfeited); see also IPSCO Steel (Alabama) v. Blaine Const.
Corp., 371 F.3d 150, 154 (3d Cir. 2004) (explaining that
statutory standing to appeal is non-jurisdictional). Moreover,
we have not directly held that in these circumstances the
Federal Government needed to intervene. See Bank of Am.
Nat. Trust and Sav. Ass’n v. Hotel Rittenhouse Assocs., 800
F.2d 339, 341 n.2 (3d Cir. 1986); Devlin v. Scardelletti, 536
U.S. 1, 6–7 (2002) (holding that unnamed class members who
file a timely objection do not need to intervene to appeal); but
cf. Marino v. Ortiz, 484 U.S. 301, 304 (1988) (determining that
a group testifying before the district court, but did not
intervene, cannot appeal).
3
At oral argument, Carter Day also argued that even if
Compaction’s appeal is successful, it is impossible for
Compaction to recover at least $11 million from Carter Day in
order to permit the Government to recover any portion of the
$26 million Consent Judgment because, at a minimum, the
NJDEP Settlement barred Compaction from recovering on the
$1.5 million plus it paid the NJDEP. Thus Compaction’s
contribution claim against Carter Day is limited to the roughly
14
To establish standing, a party must have “(1) suffered
an injury in fact, (2) that is fairly traceable to the challenged
conduct of the defendant, and (3) that is likely to be redressed
by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136
S. Ct. 1540, 1547 (2016).
Carter Day asserts the Federal Government has not
established an injury in fact, “the [f]irst and foremost of
standing’s three elements,” id. (internal quotation marks and
citation omitted). To establish this prong, “a [litigant] must
show that he or she suffered ‘an invasion of a legally protected
interest’ that is ‘concrete [real, not abstract] and particularized’
[personal,] and ‘actual or imminent, not conjectural or
hypothetical.’” Id. at 1548 (quoting Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560 (1992)). This is to say the United
States must “possess a ‘direct stake in the outcome’ of the
case.” Hollingsworth v. Perry, 570 U.S. 693, 705 (2013)
(quoting Arizonans for Official English v. Arizona, 520 U.S.
43, 64 (1997)). “A purely speculative concern about the
eventual result of a co-party’s case is likewise insufficient.”
Morrison-Knudson Co. v. CHG Int’l, Inc., 811 F.2d 1209, 1214
(9th Cir. 1987) (citation omitted).4
$9.5 million it (Compaction) paid the USEPA. Compaction
counters that it is also entitled to recover the full $26 million
Consent Judgment from Carter Day and that it is seeking to
recover additional sums from other PRPs, which could be
added to moneys recovered from Carter Day. As explained in
below, we need not resolve these issues because the United
States clearly has a financial interest in Compaction’s
contribution actions.
4
Carter Day analogizes this case to our decision in
Residences at Bay Point Condo. Ass’n v. Standard Fire
15
The Supreme Court’s decision in Village of Arlington
Heights v. Metropolitan Housing Development Corp. is
instructive. There the Court held that Metropolitan, a
developer with a contract to build multi-family housing, had
shown an injury to itself even though it had yet to suffer any
direct economic harm from the Village’s re-zoning decision
(its contract to develop the property contained an out if it did
not receive zoning clearance). See 429 U.S. 252, 261 (1977).
The Court reasoned that, because the zoning was an absolute
bar to the development of property and Metropolitan’s
development plans were detailed and specific, it did not have
Insurance Co., 641 F. App’x 181 (3d Cir. 2016). We are not
bound by non-precedential decisions, I.O.P. 5.7, but we take
Carter Day’s point to be that a defendant lacks standing to
appeal a court’s dismissal of a co-defendant’s claim. While in
some circumstances such an appeal may present an injury too
speculative to confer standing, see, e.g., Morrison-Knudson,
811 F.2d at 1209, it is possible to assert an interest in another
party’s case that is sufficiently real to establish an injury in fact.
For example, in International Multifoods Corp. v. Commercial
Union Insurance Co., the Second Circuit held that Commercial
Union had standing to challenge the district court’s grant of its
co-defendant’s motion for summary judgment. See 309 F.3d
76, 89–90 (2d Cir. 2002). Even though the district court’s
order did not directly involve Commercial Union, it had “a
significant financial stake in whether [its co-defendant] c[ould]
be forced to cover any of Multifoods’ loss” because under New
York law it (Commercial Union) had the equitable right to
collect contributions from other insurers. Id. at 89. Similarly,
here the Consent Judgment directly linked the Federal
Government’s financial interest with the outcome of
Compaction’s contribution claim against Carter Day.
16
to engage in “undue speculation as a predicate for finding that
[Metropolitan] has the requisite personal stake in the
controversy.” Id. at 261–62.
Similarly, here the District Court’s ruling stands as a
barrier to the United States recovering on its $26 million
Consent Judgment against Compaction. If we grant the relief
the United States seeks, the barrier will be largely removed.
Thus the Federal Government has stated a traceable and
redressable claim. Though it is not certain that Compaction
will ultimately collect from other PRPs at least $11 million in
contribution actions, the court-approved Consent Decree
binding it and the Federal Government ensures that the latter’s
interest in this matter is not abstract. The $26 million Consent
Judgment also makes the United States’ interest in this appeal
individualized rather than a general grievance or a mere matter
of policy.
We thus proceed to the merits of its appeal alongside
that of Compaction.
B. CERCLA Section 113(f)(2) and Compaction’s
Contribution Claim
As discussed above, the District Court found that Carter
Day’s settlement with the NJDEP pertained to the entire Site;
hence it precluded contribution suits against Carter Day by
other PRPs under Section 113(f)(2) of CERCLA regardless
whether they sought recovery for Federal or State liability. To
repeat, that provision provides that “[a] person who has
resolved its liability to the United States or a State in an
administrative or judicially approved settlement shall not be
liable for claims for contribution regarding matters addressed
in the settlement.” 42 U.S.C. § 9613(f)(2). Compaction
acknowledges that Carter Day’s settlement with the NJDEP
precludes Compaction from seeking contributions for its
17
liability to that State agency, roughly $1.5 million plus interest.
Instead, Compaction’s sole contention is that the “matters
addressed” in the NJDEP Settlement with Carter Day do not
include claims by the USEPA, and thus Compaction can seek
contribution for that portion of its payments under the Consent
Decree. Accordingly, we must determine the scope of the
“matters addressed” in the NJDEP Settlement and whether it
covers Carter Day’s liability to the Federal Government.
1. The Scope of the “Matters Addressed”
But for the general instruction to “us[e] such equitable
factors as the court determines are appropriate” in resolving
contribution claims, 42 U.S.C. § 9613(f)(1), CERCLA does
not specify how to determine what matters are addressed by a
consent decree. Moreover, the NJDEP Settlement does not
include an explicit “matters addressed” section.5 “In the
absence of explicit language, . . . one must . . . look elsewhere
to determine ‘matters addressed.’” Charter Int’l Oil Co., 83
F.3d at 517. “[C]ourts have suggested that the ‘matters
addressed’ by a consent decree be determined with reference
to the particular location, time frame, hazardous substances,
and clean-up costs covered by the agreement.” Akzo Coatings,
Inc., v. Aigner Corp., 30 F.3d 761, 766 (7th Cir. 1994)
(collecting cases). This list is non-exhaustive, leaving a
consent decree’s scope “[to] be assessed in a manner consistent
5
In 1997, the USEPA and Justice Department published
guidance recommending that settlement agreements include an
explicit definition of “matters addressed” “that clarifies the
parties’ intent regarding the scope of contribution protection.”
U.S. Dep’t of Justice & U.S. Envtl Prot. Agency, Defining
“Matters Addressed” in CERCLA Settlements (Mar. 14,
1997), https://www.epa.gov/sites/production/files/2013-
09/documents/defin-cersett-mem.pdf.
18
with both the reasonable expectations of the signatories and the
equitable apportionment of costs that Congress has
envisioned.” Id. (citation omitted).
We have previously explained that “[i]n light of
Congress’s intent to induce settlements, all settlement[s]
should be presumed to afford to the settlors protection against
claims for contribution regarding an entire site, unless there is
an explicit provision to the contrary.” United States v. Se. Pa.
Transp. Auth., 235 F.3d 817, 823 (3d Cir. 2000) (quoting John
M. Hyson, CERCLA Settlements, Contribution Protection and
Fairness to Non–Settling Responsible Parties, 10 Vill. Envtl.
L.J. 277, 320 (1999)).
But this does not tell us which sovereigns are covered
by a settlement. That inquiry raises additional concerns
outside of inducing settlements. For example, in Akzo
Coatings, the Seventh Circuit addressed whether Section
113(f)(2) protected Aigner, a PRP that had settled with state
and federal agencies, from contribution actions for remedial
costs borne by Akzo, another PRP, outside of the governmental
spending. 30 F.3d at 764–70. In those circumstances, it
reasoned, reading the matters addressed in the settlement
broadly “would defeat the policy of CERCLA[,]” as neither the
Federal Government nor the party settling its claims had proper
incentive to protect another PRP’s contribution rights. Id. at
769 (citation omitted). Thus “it [is] prudent to require the
settling parties to be more explicit when they intend to bar
contribution for work” performed outside of those parties’
efforts. Id. at 768.
Applying Akzo’s logic here, we interpret the matters
addressed in an agreement narrowly when determining
whether settlement with one sovereign covers the claims of
another. Carter Day entered the NJDEP Settlement to cover all
claims “with respect to the [Site]” and those “arising out of or
19
related to the [Site].” J.A. 1339. Although this language is
broad, the Settlement, by its own terms, concerns only liability
to the NJDEP. Id. (“Carter Day was discharged . . . from all
liabilities to NJDEP[.]”). Thus, despite its broad language
referring to all remedial costs connected to the Site, the
agreement’s specific language regarding the NJDEP ties only
to the State’s expenditures.
In addition, looking to the reasonable expectations of
the parties, it is sensible to limit the protection under the
NJDEP Settlement to New Jersey’s claims. As Compaction
explains, the NJDEP Settlement “merely reflects a decision by
NJDEP to acquiesce to [Carter Day’s] position that [the
NJDEP] was barred from proceeding with any claims” as a
result of Carter Day’s bankruptcy case, in which the USEPA
took no part. Compaction Br. 29–30. It would have been
unreasonable for either the NJDEP or Carter Day to expect that
the NJDEP Settlement addressed any liability stemming from
the USEPA’s clean-up costs.6
6
Carter Day argues that the United States’ decision not
to pursue a claim against it over the past 30 years “indicates
that it too regarded any claims against [Carter Day] as
resolved.” Carter Day Br. 30. As the Federal Government was
not a party to the NJDEP Settlement, its decisions have no
bearing on the parties’ reasonable expectations. Further, just
because the United States had an opportunity to intervene in
the litigation between the NJDEP and Carter Day, see 42
U.S.C. § 9622(i) (requiring a public notice and comment
period before final settlement), and chose not to, does not mean
that its claim was resolved. That does not affect how we
interpret the matters addressed in the NJDEP Settlement or
those parties’ expectations. If anything, that the United States
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Further, allowing Carter Day to avoid liability for any
federal expenditures would not equitably apportion the
remedial costs. The USEPA bore the lion’s share of the Site’s
cleanup costs. It was responsible for the remediation and
investigation costs, and though the State pays all operation and
maintenance expenses, the Federal Government reimburses
90% of those costs as well. 42 U.S.C. § 9604(c)(3), (c)(5)(D).
Affirming the District Court would allow a party to avoid
massive liability by settling with an agency responsible for
10% of the total sticker price.
2. CERCLA’s Purpose and Procedures
“[T]he two major policy [goals] underlying CERCLA
are ensuring that prompt and effective clean-ups are put into
place and making sure that the PRPs responsible for the
hazards created bear their approximate share of the
responsibility.” Charter Int’l Oil Co., 83 F.3d at 522. In other
words, be quick and share the costs. To implement these goals,
CERCLA “also aims to induce those parties who settle earlier
to do so for higher amounts than they might otherwise by
assuring them the right to seek contribution protection from
those who have not as yet settled.” Id. (citation omitted).
Carter Day argues that construing narrowly the scope of
its settlement protection affronts CERCLA’s goal of
incentivizing early settlement. While we acknowledge that our
decision here could affect a PRP’s incentive to settle,
ultimately it vindicates CERCLA’s goal of equitably
distributing liability without extinguishing incentives to settle.
was not named in, and opted to stay out of, Carter Day’s
bankruptcy adds support to the argument that it and the parties
understood the matters addressed in the NJDEP Settlement to
relate only to the NJDEP’s portion of the remedial
expenditures.
21
As we indicated above, a settling-PRP is protected only insofar
as a consent decree and a contribution action address the same
matters. In effect, our decision encourages a PRP to settle with
both the relevant State and Federal Governments.
Further, construing the NJDEP Settlement to apply only
to NJDEP’s claims avoids creating perverse incentives for a
PRP to resolve those claims only in the hope of barring other
PRPs from seeking contribution on federal claims. As noted
above, that outcome would be a boon to industry, as the
statutory scheme allocates the vast majority of the clean-up
costs to the Federal Government.
Carter Day argues that we should not be worried about
these distortions because the District Court did not say that
NJDEP resolved the United States’ claims against it; thus the
USEPA could still seek to recover costs directly from it under
CERCLA Section 107(a). 42 U.S.C. § 9607 (providing a
government can recover from PRPs cleanup costs it incurred).
While that is true, it also runs afoul of the statute’s procedures.
The statutory scheme incentivizes the State and Federal
Governments to recover fully from a single PRP, after which
that PRP can litigate the proper allocation of liability among
other PRPs. This reduces litigation directly involving the
States and the Federal Government. If we were to affirm the
District Court, taxpayer-funded litigation by the Federal
Government would undoubtedly increase.
Finally, our decision aligns with CERCLA Section 104,
which outlines how the Federal Government is to work with
the States to coordinate remedial actions and makes clear that
costs borne by the United States and New Jersey are distinct.
42 U.S.C. § 9604(c). The USEPA-NJDEP Cooperative
Agreement for the Site reiterates the statutory allocation of
costs and states that the NJDEP cannot recover funds on behalf
of the USEPA, and vice versa. It defies reason and the plain
22
language of the Cooperative Agreement that the matters
addressed in the NJDEP Settlement with Carter Day could
include expenditures incurred—per statute and contract—
solely by the United States.
In addition, the breakdown of payments among PRPs in
the Consent Decree illustrates the separate nature of each
sovereign’s costs. Approximately $1.5 million of
Compaction’s $11 million settlement related, and was paid, to
the NJDEP. Thus, despite Carter Day’s contention that
requiring courts to distinguish between State and Federal
clean-up costs at a site “would put an almost impossible burden
on a district court to parse out what ‘type’ of claim was
made[,]” Carter Day Br. 35, we have no difficulty
distinguishing between State and Federal liability here.
* * * * *
Our interpretation of the scope for the “matters
addressed,” as well as CERCLA’s purpose and procedures, tell
us the NJDEP Settlement cannot protect Carter Day from
contribution actions by other PRPs related to federal liability.
The scope of the NJDEP Settlement resolves “all liabilities [of
Carter Day] to [the] NJDEP.” J.A. 1339. We do not believe it
discharged liabilities to the USEPA. Accordingly, we reverse
the District Court’s summary judgment order and its denial of
Compaction’s motion to reconsider, and remand the case for
further proceedings.
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