United States v. Alcan Aluminum, Inc. Champion Auto Generator Service, Inc. International Flavors and Fragrances, Inc. Kalama Chemical, Inc. Schultz Electroplating, Inc. S & W Waste, Inc. McAdoo Associates, Inc. Payso, Inc. Edward L. Payer Noreen Payer v. At & T Technologies, Inc. Cps Chemicals Company, Inc. East Coast Pollution Control, Inc. Knoll International, Inc. Lehigh Structural Steel Company John E. Potochny Beatrice/hunt Wesson, Inc. Procter & Gamble Manufacturing Company 21 International, Inc. Special Metals Corporation Activated Metals & Chemicals, Inc. Teledyne Vasco, a Division of Teledyne Industries, Inc. Teledyne Wah Chang Huntsville, a Division of Teledyne Industries, Inc. Witco Corporation, on Behalf of Itself and the Richardson Company Cbp Resources First Valley Bank, the Trustees of the McAdoo Associates Site Trust Fund ("The Trustees"), Proposed Intervenors

Citations: 25 F.3d 1174; 28 Fed. R. Serv. 3d 1075; 24 Envtl. L. Rep. (Envtl. Law Inst.) 20980; 38 ERC (BNA) 1833; 1994 U.S. App. LEXIS 11952Docket: 93-1099

Court: Court of Appeals for the First Circuit; May 25, 1994; Federal Appellate Court

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The case, United States of America v. Alcan Aluminum, Inc. et al., addresses the right of a party that has entered into a consent decree with the Environmental Protection Agency (EPA) regarding a superfund site to intervene in subsequent litigation related to that site. The court determined that an early settlor can intervene as a matter of right if they can demonstrate a protectable interest. However, the decision on intervention is contingent on whether the intervenor's interests were affected by a subsequent consent decree. The district court's orders denying the motion to intervene and approving the new consent decree were vacated, and the case was remanded to clarify whether the new decree impacted the intervenor's rights under the original decree. The appeal pertains to the McAdoo site in Schuylkill County, Pennsylvania, which had a history of hazardous waste storage and incineration activities.

In 1987, the U.S. initiated legal proceedings regarding hazardous material at the McAdoo site. A consent decree was reached on June 3, 1988, with 65 Potentially Responsible Parties (PRPs), known as the "Air Products defendants," who agreed to reimburse approximately $790,000 in past costs and implement a remedial program to prevent future hazardous releases. They also committed to covering long-term operations and maintenance costs. In return, the government would not pursue reimbursement for past costs and allowed the defendants to seek up to 25% reimbursement for cleanup costs if these were recovered from non-settling PRPs. Key provisions included the defendants' right to sue non-settling parties for contribution and a government intention to limit future covenants not to sue to those similar to the Air Products agreement.

Subsequently, on June 23, 1988, the government began proceedings against another group of PRPs, the "Alcan defendants," to recover past costs and establish future liability. An agreement was reached in January 1992, culminating in a consent decree filed on August 10, 1992. The Alcan defendants agreed to reimburse approximately $2 million of the government's incurred response costs, while the government agreed not to sue them for work covered by the Air Products decree, oversight costs, response costs before June 1990, or enforcement costs.

Following a public comment period mandated by CERCLA, the Trustees of the McAdoo site, representing the Air Products defendants, objected to the Alcan decree, claiming it would negate their right to seek contribution and violated the government's stated intent regarding covenants not to sue. The Trustees sought to intervene in the suit against the Alcan defendants, but on November 24, 1992, the district court denied their motion, determining that the statutory provision was inapplicable and their application under Rule 24 was untimely and lacked a substantial interest in the case. An appeal followed.

The district court had jurisdiction over the case under 42 U.S.C. §§ 9607 and 9613(b), while appellate jurisdiction exists under 28 U.S.C. § 1291 due to the finality of the order denying a motion to intervene. The standard of review for such a denial is for abuse of discretion, but it is more stringent than that applied to permissive interventions. Reversal occurs only if the district court has applied an incorrect legal standard or reached a clearly erroneous decision.

The Superfund Amendment and Reauthorization Act (SARA) of 1986 amended the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) to facilitate the cleanup of toxic waste sites by increasing participation from responsible parties. Specifically, Section 113(i) allows any interested party to intervene as of right in CERCLA actions, contingent on meeting four specified criteria. The government contested the Trustees' right to intervene in its suit against the Alcan defendants, arguing that Section 113(i) limits intervention to those raising health or environmental concerns. The district court agreed, asserting that the Trustees could only challenge the consent decree through a public comment provision.

However, the interpretation of Section 113(i) indicates that "any person" who meets its requirements can intervene in "any action" under CERCLA, suggesting no intent to limit intervention to specific claims. The statutory language parallels that of Federal Rule of Civil Procedure 24(a), which was amended to allow broader intervention rights. This alignment suggests that Congress did not intend to impose restrictions on intervention that differ from those established in procedural rules, emphasizing a more flexible approach to judicial intervention.

The government argues for a narrower interpretation of the statute, citing legislative history; however, the court emphasizes that the clear language of the statute must prevail, referencing key case law. While a House report hints at a limited construction, the unequivocal wording of Section 113 is decisive, allowing any interested party to intervene under Section 113(i). 

Regarding intervention under Rule 24(a) and Section 113(i), courts apply a similar standard for granting applications. An applicant may intervene as of right if (1) the application is timely, (2) the applicant has a sufficient interest in the litigation, (3) that interest may be practically affected by the case's outcome, and (4) the interest is not adequately represented by existing parties. 

The district court denied the Trustees’ intervention motion, deeming it untimely and asserting the absence of a protected interest. The Trustees argue that their motion, filed less than two months after realizing the consent decree could jeopardize their rights, was timely, and they were misled by the government’s assurances regarding the consent decree’s impact. The court notes that although the consent decree was filed on August 9, 1992, and the Trustees moved to intervene on September 22, 1992, the government contends this delay renders the motion untimely, which the court disputes.

Timeliness in legal proceedings is defined by the totality of circumstances, not simply by the number of days elapsed since filing. Relevant case law, including NAACP v. New York and National Wildlife Federation v. Burford, emphasizes that while the progress of litigation is a factor, it is not the sole determinant. Timeliness relates to the doctrines of laches or estoppel, suggesting that intervention should not be barred if an existing party has encouraged potential intervenors to delay their involvement. In the present case, the Trustees were aware of the Alcan litigation and communicated with the government's counsel to protect their rights. A letter from the Trustees’ counsel to the government confirmed that the government assured them their interests would not be compromised by the consent decree. This assurance led the Trustees to reasonably delay their intervention. Consequently, because the government induced this delay through its representations, it cannot argue that the Trustees' motion to intervene was untimely.

Timeliness for intervention in litigation should be assessed from the moment an applicant knows or should know their rights are directly affected, rather than from when they learn about the litigation, as argued by the government. This position aligns with precedents from the D.C. Circuit in *National Wildlife Federation v. Burford*, where intervention was deemed timely based on when ASARCO became aware of the impact on its interests, not the original filing date. Similarly, the Fifth Circuit's decision in *Stallworth v. Monsanto Co.* emphasized that measuring timeliness from knowledge of rights at risk prevents unnecessary interventions and protects judicial resources. The current case supports this approach, as the Trustees filed to intervene just 43 days after being notified of the consent decree, indicating their application was timely based on their awareness of risk to their contribution claim. Additionally, if a party's actions lead an applicant to delay intervention, reasonable reliance should allow for a timely application despite the elapsed time.

The Air Products defendants' interest in the litigation was evaluated concerning their right to intervene, specifically whether they possess a sufficient legal interest. The district court ruled that the Trustees lacked a substantial and direct protectable interest since their claim for contribution was not directly involved. The Trustees argued they have a statutory right to sue for contribution, which would be extinguished if the consent decree is approved, while the government maintained that this right is merely a contingency and not a substantive legal right.

Section 113(f)(1) allows early settling parties to sue other potentially responsible parties (PRPs) for contribution. The Trustees believe this gives them a sufficient basis to intervene. However, the government cited precedents where courts deemed the right to sue for contribution as contingent rather than substantive. Notably, the cases referenced by the government generally involved non-settling parties or those asserting third-party rights, which differ from the current situation where the applicants have settled with the government.

The key distinction lies in the nature of the interest: applicants who have settled accept specific liability, transforming their contribution right from a mere contingency into a legally protectable interest. This perspective aligns with the legislative intent behind the SARA amendments to CERCLA, which sought to promote early settlements to minimize litigation and facilitate cleanup efforts. Thus, while the interest of a non-settling party remains contingent, a settled party possesses a mature interest, even if its exact value is indeterminate.

Permitting intervention in legal proceedings encourages settlements, as potentially responsible parties (PRPs) understand that settling will limit their liability under 42 U.S.C. Sec. 9613(f)(2) and may allow them to seek contribution from non-settling PRPs under 42 U.S.C. Sec. 9613(f)(1). Early settlers possess a protectable interest that justifies their intervention. The government's argument that the Trustees only have economic interests, which some courts consider insufficient for intervention, is countered by the fact that the Air Products defendants possess more than an economic interest. 

In the NOPSI case, the Fifth Circuit denied a city's intervention request, finding its interest purely economic, focused only on power cost implications. The court emphasized that a legitimate interest must be recognized by substantive law, requiring applicants to be the real parties in interest. Similarly, in Arizona v. Motorola, intervention was denied because Motorola's interest was deemed contingent and not part of the real party in interest.

The principle established is that a party has a more substantial interest when it is the real party in interest and can assert a claim. This supports intervention for the Trustees, who are the true parties in interest regarding claims against non-settlors for contribution. The right to seek contribution under Sec. 113(f)(3)(B) is recognized as a legally cognizable interest. 

Under CERCLA, settling with the government provides immunity from contribution claims related to the settlement, indicating that the government can protect a late settlor from claims by an early settlor. The Air Products defendants' interest hinges on whether the Alcan consent decree includes provisions for operations and maintenance, which would affect their ability to pursue contribution claims.

The district court did not clarify whether operations and maintenance were included in the Alcan consent decree, stating that the Trustees could not intervene as they lacked a substantial and direct protectable interest. This implies that operations and maintenance may not be part of the decree, but the interpretation is contested by the Alcan defendants, who assert that such matters are indeed covered, claiming immunity from future contribution claims related to operations and maintenance. The Air Products defendants also argue they have an interest in the litigation, although it may not be legally protectable. The government refrained from taking a position on this issue. 

The right to intervene hinges on whether operations and maintenance are addressed in the Alcan consent decree, but the current record does not allow for a determination. The reasons behind the district court's denial of intervention remain unclear, necessitating a remand to ascertain if operations and maintenance are part of the Alcan consent decree. If found to be covered, the Air Products defendants would possess sufficient interest to warrant intervention; if not, they would lack the right to intervene as their interests would not be relevant to the Alcan litigation. The decision also indicates no opinion on their right to seek contribution in future matters. Consequently, the order denying intervention and approving the Alcan consent decree will be vacated, and the case will be remanded for further examination. 

Additionally, the excerpt references a related case that concluded a similar applicant had no interest in litigation due to the subordination of rights under Section 113(f)(3)(C), but the current analysis disagrees with that decision, suggesting the section does not extinguish a settlor's right to pursue contribution claims.

To demonstrate an impeded interest under the intervention test, the applicant must show a tangible threat to its legal interest. If the district court finds that the Air Products defendants' obligations fall within the Alcan consent decree, their liability might be shielded under 42 U.S.C. § 9613(f)(2), which grants immunity from future contribution claims regarding matters in the settlement. This potential immunity could threaten the Trustees' right to sue for contribution, justifying their intervention in the case.

Furthermore, the Air Products defendants' interests are inadequately represented in the current litigation, as their specific interests diverge from those of the existing parties, who contest the intervention. The criteria for inadequate representation include a lack of attention to the applicant's interests, collusion among parties, or insufficient prosecution of the suit. Given that neither party effectively represents the applicant's interests, the intervention is warranted.

Section 9613(f)(2) protects parties that settle with the government from future contribution claims related to the settled matters, although it does not discharge other potentially liable parties unless specified. Legislative history suggests that Congress intended to shield settling parties from claims by non-settling parties while allowing them to retain their rights to sue for contribution. However, the possibility of late settlers invoking this protection against early settlers has not been clearly addressed in existing authority. The explicit wording of § 9613(f)(2) is decisive, and any potential inequity for early settlers lacking intervention opportunities must be addressed by Congress, as current provisions, including CERCLA’s public comment provision, do not sufficiently safeguard their contribution rights.

The right to intervene allows parties to engage in discovery and appeal adverse judgments, as established in Federal Rule of Civil Procedure 26(b)(1) and the case Bell Atlantic Corp. v. Bolger. Generally, only parties involved in a lawsuit or those who properly intervene can appeal judgments, as noted in Marino v. Ortiz. The Alcan consent decree lacks explicit provisions for operations and maintenance, instead referencing the Air Products consent decree, which mandates that the Air Products defendants cover these costs. On remand, the district court may consider admitting new evidence, but this decision rests with the district judge, and no opinion is expressed on the matter. While the Air Products defendants have a protectable interest for intervention, there is uncertainty regarding whether Section 113(f)(2) could eliminate their contribution rights if the Alcan consent decree is approved without changes.