Whittaker Corporation v. United States

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
WHITTAKER CORPORATION, a No. 14-55385
Delaware corporation,
Plaintiff-Appellant, D.C. No.
2:13-cv-01741-FMO-JC
v.
UNITED STATES OF AMERICA, OPINION
Defendant-Appellee.
Appeal from the United States District Court
for the Central District of California
Fernando M. Olguin, District Judge, Presiding
Argued and Submitted March 10, 2016
Pasadena, California
Filed June 13, 2016
Before: Stephen Reinhardt, Mary H. Murguia,
and John B. Owens, Circuit Judges.
Opinion by Judge Murguia;
Partial Concurrence by Judge Owens
2 WHITTAKER CORP. V. UNITED STATES
SUMMARY*
CERCLA
The panel reversed the district court’s dismissal of
Whittaker Corporation’s lawsuit against the United States
under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 to recover expenses
that Whittaker incurred since the 1980s from investigating
and cleaning the Bermite Site, a munitions facility in Santa
Clarita, California.
The district court dismissed the case based on its
conclusion that because Whittaker had been sued in Castaic
Lake Water Agency v. Whittaker Corp., 272 F. Supp. 2d 1053,
1069 (C.D. Cal. 2003), it could bring only a CERCLA
contribution action – not a cost recovery action – against the
United States, and the statute of limitations for a contribution
claim had expired.
Whittaker was found liable to the Castaic Lake plaintiffs
for the expenses specifically related to removing perchlorate
from the plaintiffs’ wells and replacing water; in this case,
Whittaker sought reimbursement from the government for a
different set of expenses for which Whittaker was found not
liable in Castaic Lake.
The panel held that because Whittaker sought to recover
expenses that were separate from those for which Whittaker’s
liability was established or pending, Whittaker was not
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
WHITTAKER CORP. V. UNITED STATES 3
required to bring this suit as a claim for CERCLA § 113(f)
contribution. The panel concluded that Whittaker was not
barred on this basis from bringing a CERCLA § 107(a) cost
recovery action against the United States.
Judge Owens concurred in all but Part III D because in his
view the case law has drifted from Congress’s intent when it
passed and amended CERCLA in the 1980s.
COUNSEL
Kevin M. Fong (argued), Pillsbury Winthrop Shaw Pittman
LLP, San Francisco, California; Reynold L. Siemens, Mark
E. Elliott, and Caroline L. Plant, Pillsbury Winthrop Shaw
Pittman LLP, Los Angeles, California, for Plaintiff-
Appellant.
Nicholas A. DiMascio (argued), Attorney, Environment and
Natural Resources Division, United States Department of
Justice, Denver, Colorado; Aaron P. Avila and Michael C.
Augustini, Attorneys; Sam Hirsch, Acting Assistant Attorney
General; Environment and Natural Resources Division,
United States Department of Justice, Washington, D.C.; for
Defendant-Appellee.
4 WHITTAKER CORP. V. UNITED STATES
OPINION
MURGUIA, Circuit Judge:
When two or more people have been found liable for
someone’s injury, and one of them pays more than her fair
share, the law often lets the person who paid too much
recover from the others, in order to even things out. This is
called the right to “contribution,” and it has deep roots in our
statutory and common law. See Nw. Airlines, Inc. v. Transp.
Workers Union of Am., AFL-CIO, 451 U.S. 77, 86–88 (1981).
CERCLA, a federal environmental statute, also allows people
who pay to clean up pollution recover their costs from the
polluters.1 See 42 U.S.C. § 9607(a). The plaintiff in this
case, Whittaker, is a company that was both found liable for
injuries caused by its pollution and that also paid to clean
pollution up. Whittaker now seeks reimbursement of its
cleanup expenses from other polluters. We must decide
whether Whittaker is limited to seeking contribution from
other polluters, or whether Whittaker may instead recover its
cleanup expenses in a CERCLA cost recovery action. We
hold that Whittaker’s liability in a prior case did not limit it
to seeking contribution for all of its expenses, so Whittaker
may use a CERCLA cost recovery action to seek
reimbursement for the cleanup costs at issue in this case.
1
“CERCLA” stands for the “Comprehensive Environmental Response,
Compensation, and Liability Act of 1980.” See generally 42 U.S.C.
§§ 9601–75.
WHITTAKER CORP. V. UNITED STATES 5
I
Whittaker Corporation is a defense contractor that
manufactures and tests munitions for the U.S. military.2 In
1967, Whittaker acquired a munitions facility in Santa
Clarita, California, from the Bermite Powder Company (the
Bermite Site). Between 1954, when the Bermite Powder
Company was in charge, until 1987, when Whittaker ceased
operations, approximately 90 percent of the munitions
manufacturing and testing at the Bermite Site was done under
contracts with the U.S. military.
Whittaker began investigating the release of hazardous
substances at the Bermite Site in the early 1980s. In 2000,
Whittaker was sued by the Castaic Lake Water Agency and
other water providers (the Castaic Lake plaintiffs) under
CERCLA and various state laws. The Castaic Lake plaintiffs
were in the business of pumping water out of ground wells
near the Bermite Site. They alleged that their water supplies
were contaminated by a pollutant called perchlorate and other
hazardous chemicals as a result of Whittaker’s operations.
Specifically, the Castaic Lake plaintiffs alleged:
Plaintiffs, and each of them, are injured by the
contamination (including, without limitation,
the perchlorate contamination) caused by
Defendants on a continuing basis. In addition,
Plaintiffs, and each of them, have incurred
2
Because we are reviewing the district court’s decision on a motion to
dismiss, we take the factual allegations in the complaint as true and
construe them in the light most favorable to Whittaker. See Chubb
Custom Ins. Co. v. Space Sys./Loral, Inc., 710 F.3d 946, 956 (9th Cir.
2013).
6 WHITTAKER CORP. V. UNITED STATES
and will continue to incur costs in responding
to the contamination (including, without
limitation, the perchlorate contamination)
caused by Defendants’ activities at the Site.
Until the contamination problems caused by
the Site are stopped, Plaintiffs will continue to
incur substantial costs for the indefinite
future.
In their CERCLA causes of action, the Castaic Lake plaintiffs
sought to recover the “costs of response” they had incurred.
The Castaic Lake plaintiffs also alleged causes of action for
negligence, nuisance, trespass, and ultra-hazardous activity,
and in those causes of action, they sought an injunction
ordering Whittaker to “remediate and abate all contamination
and threats of contamination caused by the Site.”
The district court in Castaic Lake granted summary
judgment to the Castaic Lake plaintiffs on their CERCLA
claim based on perchlorate contamination in the plaintiffs’
wells. Castaic Lake Water Agency v. Whittaker Corp., 272 F.
Supp. 2d 1053, 1069 (C.D. Cal. 2003). Whittaker and its
insurers subsequently settled with the Castaic Lake plaintiffs
in 2007. Under the terms of the settlement, Whittaker and its
insurers agreed to reimburse the Castaic Lake plaintiffs for
costs the plaintiffs had incurred to remove perchlorate
pollution from their water wells, and to purchase replacement
water. The result of Castaic Lake was that Whittaker was
found liable for a specific set of the plaintiffs’ costs of
responding to Whittaker’s pollution; Whittaker was never
ordered in Castaic Lake to clean up the Bermite Site.
In 2013, Whittaker initiated this CERCLA lawsuit against
the United States to recover expenses Whittaker incurred
WHITTAKER CORP. V. UNITED STATES 7
since the 1980s from investigating and cleaning the Bermite
Site. Whittaker alleged that these expenses included costs for
soil sampling, borings, excavations, surveys, groundwater
sampling, and remedial operations addressing chlorinated
solvents and heavy metals. Whittaker explicitly alleged that
these expenses were separate from the costs for which it was
liable under the Castaic Lake settlement.
The United States moved to dismiss Whittaker’s
complaint, arguing that because Whittaker had been sued in
Castaic Lake, it could bring only a CERCLA contribution
action—not a cost recovery action—against the United States,
and that the statute of limitations for a contribution claim had
expired. The district court agreed with the United States.
The district court concluded that, pursuant to CERCLA
§ 113, the Castaic Lake lawsuit triggered Whittaker’s right to
bring an action for contribution (i.e., reimbursement for
paying more than its fair share), and that the instant lawsuit
sought expenses that could have been reimbursed through
such a contribution action. Because Whittaker could have
brought a contribution action, the district court concluded
under our case law that Whittaker could not bring a cost
recovery action (i.e., reimbursement from a polluter for
cleanup costs). And because Whittaker only brought a cost
recovery action, the district court dismissed the complaint.
Whittaker filed this timely appeal. We have jurisdiction
under 28 U.S.C. § 1291, and we reverse.
II
We review the district court’s decision to grant a motion
to dismiss de novo. Chubb Custom Ins. Co. v. Space
Sys./Loral, Inc., 710 F.3d 946, 956 (9th Cir. 2013). We take
8 WHITTAKER CORP. V. UNITED STATES
the factual allegations in the complaint as true and construe
them in the light most favorable to the plaintiff. Id.
“Dismissal is proper when the complaint does not make out
a cognizable legal theory or does not allege sufficient facts to
support a cognizable legal theory.” Id. We review the
district court’s interpretation of a statute de novo. Id.
III
A
Congress enacted CERCLA in 1980 to facilitate the
remediation of hazardous waste sites and the resolution of
liability for the related costs, especially through negotiated
settlements. Chubb Custom, 710 F.3d at 956. One of the
ways CERCLA achieves these goals is by allowing a party
who remediates a hazardous waste site to obtain
reimbursement of its expenses from those responsible for the
pollution. See id. at 956–57.
As relevant to this case, CERCLA provides two
mechanisms for private parties to recover their environmental
cleanup expenses from other parties. First, CERCLA
§ 107(a) allows parties to bring “cost recovery” actions
against polluters for a wide range of expenses, including “any
. . . necessary costs of response incurred” and “damages for
injury to, destruction of, or loss of natural resources,
including the reasonable costs of assessing such injury,
destruction, or loss resulting from such a release [of a
hazardous substance].” 42 U.S.C. § 9607(a)3; United States
3
Adopting the convention of the litigants and other courts, the body of
this opinion refers to CERCLA’s Public Law sections, but citations are
provided to the sections in Title 42 of the United States Code.
WHITTAKER CORP. V. UNITED STATES 9
v. Atl. Research Corp., 551 U.S. 128, 139 (2007). In the
lingo of CERCLA litigation, a polluter who might be liable
under a § 107 cost recovery action is called a “potentially
responsible party” or “PRP.” See Chubb Custom, 710 F.3d at
956.
The other mechanism to recover cleanup expenses,
§ 113(f), allows a party to seek “contribution” in two
circumstances. Section 113(f)(1) provides, in relevant part:
Any person may seek contribution from any
other person who is liable or potentially liable
under [§ 107(a)] of this title, during or
following any civil action . . . under [§ 107(a)]
of this title. . . . In resolving contribution
claims, the court may allocate response costs
among liable parties using such equitable
factors as the court determines are
appropriate.
42 U.S.C. § 9613(f)(1). And § 113(f)(3)(B) provides:
A person who 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 . . . .
Id. § 9613(f)(3)(B). In short, § 113(f) generally allows a
polluter to bring a contribution claim against other polluters
if the polluter has been sued in a § 107 cost recovery action
or settled with the government.
10 WHITTAKER CORP. V. UNITED STATES
CERCLA does not define “contribution.” See id. § 9601.
However, the Supreme Court provided a definition in United
States v. Atlantic Research, another CERCLA case:
Contribution is defined as 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, the shares
being determined as a percentage of fault.”
Nothing in [CERCLA] § 113(f) suggests that
Congress used the term “contribution” in
anything other than this traditional sense.
551 U.S. at 138 (quoting Black’s Law Dictionary 353 (8th ed.
2004)).
The Supreme Court has made clear that “cost recovery”
and “contribution” are “two ‘clearly distinct’ remedies.” Id.
(quoting Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S.
157, 163 n.3 (2004)). The Court explained the distinction as
follows:
[T]he remedies available in §§ 107(a) and
113(f) complement each other by providing
causes of action to persons in different
procedural circumstances. Section 113(f)(1)
authorizes a contribution action to PRPs with
common liability stemming from an action
instituted under . . . § 107(a). And § 107(a)
permits cost recovery (as distinct from
contribution) by a private party that has itself
incurred cleanup costs. Hence, a PRP that
pays money to satisfy a settlement agreement
or a court judgment may pursue § 113(f)
WHITTAKER CORP. V. UNITED STATES 11
contribution. But by reimbursing response
costs paid by other parties, the PRP has not
incurred its own costs of response and
therefore cannot recover under § 107(a). As
a result, though eligible to seek contribution
under § 113(f)(1), the PRP cannot
simultaneously seek to recover the same
expenses under § 107(a).
Id. at 139 (internal quotation marks and citations omitted). A
party uses contribution to get reimbursed for being made to
pay more than its fair share to someone else, and uses cost
recovery to get reimbursed for its own voluntary cleanup
costs. See id. at 139 n.6.
However, problems with this distinction arise when a
party is ordered to incur its own cleanup costs. Such a party
is not reimbursing someone else, but neither are its own costs
“voluntary.” Because the procedural requirements and the
remedies for cost recovery and contribution claims are
distinct,4 every federal court of appeals to have considered the
question since Atlantic Research, including this Court, has
said that a party who may bring a contribution action for
certain expenses must use the contribution action, even if a
cost recovery action would otherwise be available. See, e.g.,
Kotrous v. Goss-Jewett Co. of N. Cal., 523 F.3d 924, 932 (9th
4
Several courts have recognized that, given the choice, plaintiffs would
generally prefer to proceed under a § 107 cost recovery action, rather than
a § 113 contribution action, due to the § 107 cost recovery action’s
different statute of limitations, its provision for strict liability, its limited
defenses, and its opportunity for joint and several recovery. See, e.g.,
NCR Corp. v. George A. Whiting Paper Co., 768 F.3d 682, 690 (7th Cir.
2014); Solutia, Inc. v. McWane, Inc., 672 F.3d 1230, 1236–37 (11th Cir.
2012).
12 WHITTAKER CORP. V. UNITED STATES
Cir. 2008) (“A PRP cannot choose remedies, but must
proceed under § 113(f)(1) for contribution if the party has
paid to satisfy a settlement agreement or a court judgment
pursuant to an action instituted under . . . § 107 [for cost
recovery].”).5
Under our precedent, if Whittaker could bring its claim in
this case as a contribution action, it is required to do so. See
id. The government argues, and the district court determined,
that Whittaker’s right to bring its claim in contribution was
triggered by the Castaic Lake lawsuit, barring Whittaker from
bringing this cost recovery action. It is clear that the Castaic
Lake suit triggered Whittaker’s ability to bring a contribution
claim for at least the costs it was found liable for in that case.6
See id. The determinative question here is whether Whittaker
could, and therefore must, also bring a contribution action for
costs for which it was not found liable in Castaic Lake, after
the entry of judgment in that case.
5
See also NCR, 768 F.3d at 690–92; Hobart Corp. v. Waste Mgmt. of
Ohio, Inc., 758 F.3d 757, 767 (6th Cir. 2014) (“CERCLA’s text and
structure lead us to conclude that PRPs must proceed under § 113(f) [for
contribution] if they meet one of that section’s statutory triggers.”);
Bernstein v. Bankert, 733 F.3d 190, 206 (7th Cir. 2012); Solutia, 672 F.3d
at 1237; Morrison Enters., LLC v. Dravo Corp., 638 F.3d 594, 603 (8th
Cir. 2011) (holding “that § 113(f) [contribution] provides the exclusive
remedy for a liable party compelled to incur response costs pursuant to an
administrative or judicially approved settlement under . . . [§] 107 [for cost
recovery]”); Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc.,
596 F.3d 112, 124–28 (2d Cir. 2010) (“In our view, only § 113(f)(3)(B)
[contribution] provides the proper procedural mechanism for [the
plaintiff’s] claims.”).
6
We do not here decide whether Whittaker’s contribution claim based
on its liability in Castaic Lake belongs solely to Whittaker’s insurers.
WHITTAKER CORP. V. UNITED STATES 13
B
CERCLA allows a party to bring a contribution claim in
two circumstances: “during or following” being sued in a
§ 107 cost recovery action, and after the party “has resolved
its liability to the United States or a State . . . in an
administrative or judicially approved settlement.” 42 U.S.C.
§ 9613(f)(1), (3)(B). Although CERCLA sets forth these
procedural triggers to bring a contribution claim, the statute
does not actually define “contribution,” as noted above. See
id. § 9601. The government argues that, once one of the
procedural triggers for a party’s contribution claim has
occurred, the party’s right to contribution extends to all of the
party’s expenses at the site, regardless of whether those
expenses were at issue in the triggering litigation or
settlement. However, the government’s argument
mischaracterizes the contribution remedy.
Not all of a party’s expenses related to remediating a site
fall within the scope of contribution. In Atlantic Research,
the Supreme Court explained that “costs incurred voluntarily
are recoverable only by way of § 107(a)(4)(B), and costs of
reimbursement to another person pursuant to a legal judgment
or settlement are recoverable only under § 113(f).” 551 U.S.
at 139 n.6; see also id. at 138 (rejecting the government’s
argument that contribution is “synonymous with any
apportionment of expenses among PRPs”). Although the
Supreme Court has not explicitly held that a party’s right to
contribution in a CERCLA case is limited to the costs for
which the party has been found liable, the Court’s reasoning
in Atlantic Research strongly supports that interpretation:
Contribution is defined as the “tortfeasor’s
right to collect from others responsible for the
14 WHITTAKER CORP. V. UNITED STATES
same tort after the tortfeasor has paid more
than his or her proportionate share, the shares
being determined as a percentage of fault.”
. . . [A] PRP’s right to contribution under
§ 113(f)(1) is contingent upon an inequitable
distribution of common liability among liable
parties.
By contrast, § 107(a) permits recovery of
cleanup costs but does not create a right to
contribution. A private party may recover
under § 107(a) without any establishment of
liability to a third party.
...
Section 113(f)(1) authorizes a contribution
action to PRPs with common liability
stemming from an action instituted under . . .
§ 107(a).
Id. at 138–39 (citation omitted). The Supreme Court’s
statement that the right to contribution is “contingent upon an
inequitable distribution of liability” indicates that a party has
a right to recover contribution only for those costs for which
it has been found liable; other costs can be recovered in a
§ 107 cost recovery action “without any establishment of
liability.” See id. This is consistent with the traditional
notion of contribution. See Restatement (Third) of Torts
§ 23(b) (2000) (“A person entitled to recover contribution
may recover no more than the amount paid to the plaintiff in
excess of the person’s comparative share of responsibility.”).
WHITTAKER CORP. V. UNITED STATES 15
Following Atlantic Research, we have also explained that
a private party must use a § 113(f) contribution action to
recover expenses paid under a settlement agreement or a
judgment. Kotrous, 523 F.3d at 932. “If, however, the
private party has itself incurred response costs, it may seek
recovery under [a cost recovery action pursuant to] § 107.”
Id.
The two other circuits to have considered the question
have held that, even where one of the statutory triggers for a
contribution claim has occurred for certain expenses at a site,
a party may still bring a cost recovery action for its other
expenses. In Bernstein v. Bankert, the Seventh Circuit
confronted a case where some of a plaintiff’s cleanup
expenses at a site were incurred pursuant to a 1999 finalized
settlement with the EPA, and other expenses were incurred
pursuant to a 2002 consent decree that was not yet final.
733 F.3d 190, 202–03 (7th Cir. 2012). The plaintiff in
Bernstein, the Third Site Trust Fund (the Trust), was
established by a group of companies that were potentially
responsible for pollution at a hazardous waste site. Id. at 196.
For the expenses the Trust incurred under the finalized 1999
settlement, the Seventh Circuit held that the Trust was
required to bring a contribution action, since the settlement
“resolved its liability” and triggered § 113(f)(3)(B). Id. at
204–06. However, the Seventh Circuit also held that the non-
final 2002 consent decree did not resolve the Trust’s liability
for those separate costs, and therefore the 2002 decree did not
trigger a right to contribution. Id. at 207–08. The Seventh
Circuit held that the Trust could bring a cost recovery action
under § 107 for the expenses it incurred under the 2002
decree, because, “[t]o the extent that the Trustees’ suit seeks
to recover expenses arising out of their performance of the
16 WHITTAKER CORP. V. UNITED STATES
2002 [consent decree], it is not a contribution action.” Id. at
207.
In NCR Corp. v. George A. Whiting Paper Co., the
Seventh Circuit reaffirmed Bernstein’s approach of separately
evaluating different sets of costs, but arrived at a slightly
different outcome. 768 F.3d 682, 690–92 (7th Cir. 2014). In
NCR, the plaintiff company, NCR, sought reimbursement for
cleanup expenses it had incurred at a site under three separate
orders from the EPA and the Wisconsin Department of
Natural Resources issued in 2001, 2004, and 2007. Id. at 691.
NCR argued it could bring a cost recovery action for these
expenses, and that it was not limited to a contribution action.
Id. Applying Bernstein, the Seventh Circuit held that each
order triggered NCR’s right of contribution for the expenses
covered by that order. Id. at 691–92. NCR conceded that its
expenses incurred under the 2001 order triggered its right to
contribution. Id. at 691. The Seventh Circuit held that
NCR’s expenses incurred under the 2004 order were also
required to be reimbursed through contribution, because that
order “resolved NCR’s liability” for those expenses,
triggering § 113(f)(3)(B). Id. at 692. And finally, the
Seventh Circuit held that NCR’s expenses under the 2007
order were also required to be brought in contribution,
because the government brought an action in 2010 to enforce
that order, and a contribution action is available “during or
following” an enforcement action. Id. at 691–92 (citing
42 U.S.C. § 9613(f)(1)). The Seventh Circuit rejected NCR’s
argument that the expenses it incurred under the 2007 order
before the government’s 2010 enforcement action were not
covered by NCR’s right of contribution: “Such slicing and
dicing of costs incurred under the same administrative order
makes little sense when a party’s liability for all of those
WHITTAKER CORP. V. UNITED STATES 17
costs will ultimately be determined in the enforcement
action.” Id. at 692.
In Agere Systems, Inc. v. Advanced Environmental
Technology Corp., the Third Circuit held that a party who had
been sued in a § 107 cost recovery action could still bring its
own cost recovery action for expenses separate from the
liability established by the prior suit, because § 113 had not
been triggered for those separate costs and a contribution
action was therefore unavailable. 602 F.3d 204, 225 (3d Cir.
2010). One of the plaintiffs in Agere, TI Automotive Systems
LLC (TI), had paid into a trust fund with other potentially
responsible parties to cover a certain set of expenses at a site
(the “Operational Unit One” expenses), even though TI had
not been sued for those expenses. Id. at 212. TI had also
previously been sued by the EPA in a cost recovery action
under § 107 for a different set of expenses (the “Operational
Unit Two” expenses), resulting in a consent decree requiring
TI to pay those separate expenses. Id. at 212–13. The Third
Circuit held that TI was not required to use a contribution
action for all of its claims, and could bring a § 107 cost
recovery action to recover its share of the Operational Unit
One expenses, even though TI had been sued by the EPA
under § 107 for the Operational Unit Two expenses. Id. at
225–26. The Third Circuit also held that another plaintiff,
Agere Systems, Inc. (Agere), could bring a cost recovery
action because it had not been sued by the EPA for the
expenses related to either Operational Unit. Id. The Third
Circuit explained that “Agere and TI do not have § 113(f)
contribution claims for the settlement sums because those
parties were never themselves sued for those amounts by the
EPA or by other PRPs.” Id. at 225 (emphasis added).
18 WHITTAKER CORP. V. UNITED STATES
Bernstein, NCR, and Agere each demonstrate that a
party’s right to contribution for some of its expenses at a site
does not necessarily mean that the party loses its right to
bring a cost recovery action for other expenses. Both
Bernstein and Agere held that plaintiffs could bring cost
recovery actions for expenses separate from those for which
the plaintiffs had a right of contribution. And NCR held that
the plaintiff was required to bring all of its claims in
contribution because each set of expenses was covered by an
order triggering the right to contribution.7
Considering the closely related issue of whether a party’s
right to contribution for some of its expenses triggers the
statute of limitations for contribution for all of its other
expenses, the First Circuit has held that the limitations
periods for separate sets of expenses are triggered
independently. Am. Cyanamid Co. v. Capuano, 381 F.3d 6,
13–15 (1st Cir. 2004). In American Cyanamid, a hazardous
waste site required both soil and groundwater remediation.
Id. at 10–11. In previous litigation, a potentially responsible
party called the Rohm & Haas Company (R&H) was held
liable in a § 107 cost recovery action for expenses related to
7
The Seventh Circuit’s statement regarding the “slicing and dicing” of
costs under the 2007 administrative order is consistent with our analysis.
The statement refers to “slicing and dicing of costs incurred under the
same administrative order,” where NCR’s “liability for all of those costs
will ultimately be determined in the enforcement action.” 768 F.3d at 692
(emphasis added). It is apparent that the Seventh Circuit did not find it
generally problematic to consider different sets of expenses separately,
because the court separately evaluated NCR’s expenses under each of the
three orders. Instead, the Seventh Circuit found it problematic to further
divide NCR’s expenses under the 2007 order, when NCR’s liability for all
of those expenses would be determined in the government’s enforcement
action.
WHITTAKER CORP. V. UNITED STATES 19
the soil cleanup. Id. at 10. R&H also entered into a separate
consent decree with the United States related to the
groundwater cleanup. Id. at 11. R&H later brought a
CERCLA contribution action against other potentially
responsible parties for its groundwater cleanup expenses. Id.
The First Circuit upheld R&H’s contribution action over the
defendants’ argument that the statute of limitations for
contribution for the groundwater expenses had been triggered
by R&H’s earlier liability for the soil expenses. Id. at 13.
The First Circuit explained that CERCLA’s statute of
limitations for contribution claims bases the timeliness of an
“action for contribution for any response costs or damages”
on “the date of judgment in any action . . . for recovery of
such costs or damages.” Id. (quoting 42 U.S.C.
§ 9613(g)(3)). The First Circuit held that the phrase “‘such
costs or damages’ refers to the costs or damages contained in
the ‘judgment.’” Id. (emphasis added). “[A] PRP has three
years to seek contribution for costs contained within a
judgment. The statute of limitations, however, is not
triggered for costs not contained within the judgment.” Id. at
15; see also ASARCO, LLC v. Celanese Chem. Co., 792 F.3d
1203, 1215 (9th Cir. 2015) (“[T]here is no limit in the statute
to prevent a party in an early settlement from seeking
contribution related to a later settlement, as long as those
settlements cover separate obligations.”); RSR Corp. v.
Commercial Metals Co., 496 F.3d 552, 557 (6th Cir. 2007)
(“Rather than focus on who settled the cost-recovery action,
in short, the statute asks us to focus on what was settled.”).
Although these cases considered statute of limitations
questions, their reasoning confirms that a party’s right to
contribution is limited to the expenses for which it has been
found liable.
20 WHITTAKER CORP. V. UNITED STATES
In this case, Whittaker was found liable to the Castaic
Lake plaintiffs for the expenses specifically related to
removing perchlorate from the plaintiffs’ wells and replacing
their water. Whittaker now seeks reimbursement from the
government for a different set of expenses, for which
Whittaker was not found liable in Castaic Lake.8 Following
the guidance of the Supreme Court and the other circuit
courts, we hold that Whittaker was not required to bring its
claims in this case in a § 113(f) contribution action after its
liability was resolved in Castaic Lake.
C
The government presents two text-based arguments for
why a party who has been sued in a § 107 cost recovery
action for expenses related to pollution at a site should be
limited to a contribution action for all of the party’s expenses
at the site, regardless of whether the expenses are covered by
the liability established by the prior § 107 suit. We find
neither argument persuasive.
First, noting that § 113(f)(1) allows a contribution action
to be brought “during or following” a cost recovery action
under § 107, see 42 U.S.C. § 9613(f)(1), the government
argues that a party’s right to contribution cannot be limited to
the liability established by the § 107 cost recovery action.
After all, it would not make sense to permit a party to recover
contribution before its liability is established if the party’s
right to contribution is limited to its established liability.
However, the Supreme Court has explained that:
8
Nor is Whittaker’s own liability for the expenses it seeks in this case
pending in any other litigation, as far as we are aware.
WHITTAKER CORP. V. UNITED STATES 21
The statute authorizes a PRP to seek
contribution “during or following” a suit
under . . . § 107(a). Thus, § 113(f)(1) permits
suit before or after the establishment of
common liability. In either case, a PRP’s
right to contribution under § 113(f)(1) is
contingent upon an inequitable distribution of
common liability among liable parties.
By contrast, § 107(a) permits recovery of
cleanup costs but does not create a right to
contribution. A private party may recover
under § 107(a) without any establishment of
liability to a third party.
Atl. Research, 551 U.S. at 138–39 (emphasis added; citation
omitted). While the statute permits a party to initiate a
contribution action while a § 107 cost recovery suit is
pending, actual recovery of contribution under § 113(f)(1) is
limited to the expenses for which the party is found liable.9
See Bernstein, 733 F.3d at 207 (“To the extent that the
Trustees’ suit seeks to recover expenses arising out of their
performance of the 2002 [consent decree], it is not a
contribution action.”); United States v. Davis, 261 F.3d 1, 46
(1st Cir. 2001) (“This [statutory] language anticipates that a
defendant in a § [107] cost recovery action may initiate a
contribution action before its own liability is established.
Consistent with this scheme, a § [107] defendant whose
liability has been established may be awarded declaratory
9
A party may also be able to obtain a declaratory judgment in a
contribution action, in order to assign proportionate liability for any
uncertain future expenses. See Boeing Co. v. Cascade Corp., 207 F.3d
1177, 1191–92 (9th Cir. 2000).
22 WHITTAKER CORP. V. UNITED STATES
relief before that liability has been fully discharged.”). This
is how contribution claims traditionally work. See
Restatement (Third) of Torts § 23(b) & cmt. b.10 For this
reason, it was not the terms of the Castaic Lake complaint
that determined Whittaker’s right to recover contribution, but
rather the extent of the costs for which Whittaker was held
liable in that case.
Second, noting that § 113(f)(1) allows a contribution
action to be brought against “any other person who is liable
or potentially liable” under § 107, see 42 U.S.C. § 9613(f)(1),
the government argues that, once a contribution claim has
been triggered, the scope of expenses recoverable in
contribution is coextensive with the scope of potential
liability under § 107, including “any . . . necessary costs of
response incurred” by a party, see id. § 9607(a)(4)(B). If the
right to contribution were so broad, there would be no reason
for courts to evaluate different sets of expenses separately in
deciding whether a party has a contribution claim, yet
evaluating expenses separately is precisely what courts have
done. See, e.g., NCR, 768 F.3d at 690–92; Bernstein,
10
As explained in the comment:
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 § 23 cmt. b (citations omitted).
WHITTAKER CORP. V. UNITED STATES 23
733 F.3d at 207–08; Agere Sys., 602 F.3d at 225–26; Am.
Cyanamid, 381 F.3d at 14–16. Section 113(f)(1)’s reference
to § 107’s potentially responsible parties indicates from
whom contribution may be sought, not the scope of expenses
that are recoverable in contribution.
D
Finally, our holding is consistent with CERCLA’s
purposes. As noted above, CERCLA was intended to
incentivize both environmental cleanup efforts and negotiated
settlements of liability. Chubb Custom, 710 F.3d at 956.
Allowing a party who has incurred substantial environmental
response costs over a span of decades to recover from other
potentially responsible parties serves these dual goals. See
Fireman’s Fund Ins. Co. v. City of Lodi, Cal., 302 F.3d 928,
948 (9th Cir. 2002) (“Potential purchasers of abandoned or
underutilized contaminated properties are often deterred from
purchasing and cleaning up these properties by exposure to
unbounded and uncertain liability.”); Bernstein, 733 F.3d at
214 (“[T]he cost recovery action is subject to a longer statute
of limitations, making it arguably the preferable recovery
vehicle for a PRP embarking on what might well be a decade-
long cleanup effort, and thus actually creating a further
positive incentive to settle.”).
We recognize that CERCLA’s goal of encouraging
prompt settlement may also be served by interpreting the
right of contribution broadly, because the imposition of a
shorter statute of limitations would incentivize parties to
initiate lawsuits sooner. See 42 U.S.C. § 9613(g); ASARCO,
792 F.3d at 1211. Yet such a broad interpretation of
“contribution” is inconsistent with the balance struck by
Congress and with the Supreme Court’s interpretation of the
24 WHITTAKER CORP. V. UNITED STATES
term. We do not believe that Congress mandated parties who
have been sued in § 107 cost recovery actions to bring all of
their own CERCLA claims in the form of a contribution
action, on an accelerated timeframe, regardless of the merit
or the result of the § 107 cost recovery suit.
IV
Because Whittaker seeks to recover expenses that are
separate from those for which Whittaker’s liability is
established or pending, Whittaker was not required to bring
this suit as a claim for contribution. Whittaker therefore is
not barred on this basis from bringing a cost recovery action
against the United States.
REVERSED and REMANDED.
OWENS, Circuit Judge, concurring in all but Part III D:
The Court’s opinion persuasively follows current
Supreme Court and circuit law interpreting the relevant
statutory provisions, so I concur. Yet I do not join Part III D,
as the case law, in my view, has drifted from what Congress
intended when it passed and amended CERCLA in the 1980s.
See Chubb Custom Ins. Co. v. Space Sys./Loral, Inc.,
710 F.3d 946, 956 (9th Cir. 2013).
Requiring all related contribution claims to be “dealt with
in a single action” would “encourage private party settlements
and cleanup” because the threat of being sued “as a third-
party defendant, concurrent with the original litigation, has
the effect of bringing all such responsible parties to the
WHITTAKER CORP. V. UNITED STATES 25
bargaining table at an early date.” H.R. Rep. No. 99-253, pt.
1, at 80 (1985), reprinted in 1986 U.S.C.C.A.N. 2835, 2862.
Rather than dining at the same table for one big CERCLA
feast, our holding—dictated in my view by language in
Atlantic Research—permits adversaries to fight for
generations over moldy leftover crumbs. Good for lawyers,
but bad for the environment and the communities affected by
the contamination.
I urge Congress to take a second look at this aspect of
CERCLA.