Ohm Remediation Services, Plaintiff-Counter Defendant-Cross v. Evans Cooperage Co., Inc., Defendant-Third Party Plaintiff-Counter Claimant-Cross Counter Louisiana Oil Recycle/reuse, Inc. Coastal Leasing Services, Inc. Henrietta McCrary Francis' Drilling Fluid, Inc. Power Tool Repair Service, Inc. American Inspection and Testing Laboratories, Inc. American Manufacturing Company, Inc. Atlas Processing Co. Aviation Laboratories Inc. Boassa International Inc. Cabot Corporation Caleb Brett USA Castrol Inc. Catalyst Recovery of Louisiana Inc. Cherry Picker Parts & Service Company, Inc. Cheyenne Services, Inc. Conoco Inc. Daniel Oil Tools Co. De Nova Oil and Gas, Drilling Measurements Inc. Dravo Lime Company Dresser Industries Inc. Dwaca Enterprises Ebasco Services, Inc. Fruehauf Trailer Corporation Howell Industries Iew Systems Inc. Independent Tank Cleaning Services Inc. Ingersoll Rand Co. Koch Service Inc. Krc Southern Inc. L & B Transportation Louisiana Bulk Carriers Inc. Matlack Inc. Quality Diesel Service Inc.

Citations: 116 F.3d 1574; 27 Envtl. L. Rep. (Envtl. Law Inst.) 21318; 44 ERC (BNA) 2025; 1997 U.S. App. LEXIS 18200; 1997 WL 370843Docket: 96-30714

Court: Court of Appeals for the Third Circuit; July 22, 1997; Federal Appellate Court

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In the case of OHM Remediation Services v. Evans Cooperage Co. Inc., the United States Court of Appeals for the Fifth Circuit addressed multiple parties involved as appellants and appellees, including OHM Remediation Services as the plaintiff and Evans Cooperage Co. Inc. as the defendant. Numerous third-party defendants were also listed, including various corporations and services related to oil, drilling, and manufacturing. The case was filed under No. 96-30714 and was decided on July 22, 1997. The parties were represented by a range of legal counsel from various law firms in Louisiana. Key legal issues were likely centered around environmental law and liability, although specific details of the claims or defenses were not included in the excerpt.

Jarman, Baton Rouge, LA, represents Cedar Chemical Corp., Deep South Chemical, DSI Transports, Inc., International Paper Co., Occidental Chemical Corp., and Oxy USA, Inc. Multiple attorneys from various firms represent other companies involved in the case, including Cherry Picker Parts Service Co., Conoco, Inc., and Constar Plastics, Inc., among others. The document notes appeals from the United States District Court for the Middle District of Louisiana, presided over by Circuit Judges Emilio M. Garza, Parker, and Dennis.

OHM Remediation Services appeals the dismissal of its action to recover response costs under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). The case presents two novel issues regarding CERCLA's response cost recovery and contribution provisions, leading to a reversal and remand by the court.

The facts indicate that Louisiana Oil Recycle and Reuse operated a Baton Rouge facility for recycling nonhazardous waste. During a two-year period, Evans Cooperage sent over 450,000 gallons of waste to Louisiana Oil. Subsequently, hazardous substances escaped from the facility, prompting the Louisiana Department of Environmental Quality (DEQ) to order immediate remediation. OHM was contacted and effectively contained the release, securing the site. Throughout this process, OHM maintained a purely contractual relationship with Louisiana Oil, possessing no ownership or leasehold interest in the facility.

The DEQ ordered the shutdown of Louisiana Oil after determining that the spilled materials were hazardous waste, specifically hazardous washwater containing corrosivity, chromium, and lead. Following the shutdown, Louisiana Oil went out of business, leaving its insurance unable to cover OHM's $3 million clean-up costs. Consequently, OHM filed a lawsuit against Evans under CERCLA section 107(a) for recovery of these costs. Evans responded by naming several potentially responsible parties (PRPs) as third-party defendants, leading to a total of seventy co-defendants, including OHM, which had delivered ten drums of waste to Louisiana Oil in 1991. Although OHM did not admit that its materials were hazardous or that it was liable under CERCLA, it pursued a contribution action against the third-party defendants under section 113(f).

Evans moved to dismiss the claims, which the district court converted to a summary judgment motion and granted. The court dismissed OHM's section 107(a) claims, ruling that OHM lacked a "protectable interest" in the clean-up site, thus barring recovery of response costs. Additionally, the court dismissed OHM's section 113(f) claims on two grounds: first, OHM failed to demonstrate that the defendants were "liable or potentially liable" based on its initial section 107(a) claim; second, OHM needed to admit joint and several liability as a potentially responsible party to pursue a contribution claim. OHM subsequently appealed the decisions.

CERCLA, enacted in 1980 and amended in 1986 by SARA, aims to ensure the prompt cleanup of hazardous waste sites and to transfer the financial burden of such clean-ups from taxpayers to the parties responsible for the hazardous substances. Section 107(a) allows for the recovery of response costs from responsible persons, including both remedial and removal actions, which can be undertaken by various entities, including the federal government, states, tribes, or any other person.

CERCLA identifies four classes of 'covered persons' liable for response costs associated with hazardous substance releases: current and former owners/operators of contaminated facilities, generators of hazardous substances, and certain transporters. The statute imposes strict liability, meaning plaintiffs must only show that the defendant is a 'covered person,' without needing to prove causation. Liability can be joint and several when harm is indivisible, and responsible parties are liable for various expenses, including cleanup costs and damages to natural resources.

The National Contingency Plan (NCP), developed by the Environmental Protection Agency, outlines guidelines for site cleanup, performance standards, and investigation methods. Additionally, CERCLA section 113(f) allows for cost recovery from other liable parties and enables courts to allocate response costs based on appropriate factors.

A legal review is underway regarding whether recovery of response costs under section 107(a) requires claimants to possess a 'protectable interest' in the cleanup site. The district court dismissed a claim by OHM, asserting that the statutory causation requirement necessitates a connection to the property. This interpretation could limit recovery under section 107(a) to parties with direct interests, potentially excluding independent contractors like OHM from claiming costs associated with response actions.

The requirement of a "protectable interest" for recovery of response costs under section 107 of CERCLA is not supported by the statute's text or legislative history. Section 107(a)(4)(A) specifies that recovery is available to the United States Government, states, or Indian tribes, while section 107(a)(4)(B) allows recovery by "any other person," indicating broad eligibility for recovery without a protective interest prerequisite. Reading the term "causes" to necessitate a protectable interest misinterprets the statute, as it applies equally to costs incurred by both the government and private parties. The court has historically not required such an interest for recovery actions, as demonstrated in Bell Petroleum, where the EPA recovered costs without a protectable interest in the site. Additionally, the argument that a contract with Louisiana Oil, rather than the spill, caused OHM's response costs seeks to impose an unwarranted limitation on causation under CERCLA. The spill is deemed to have directly caused OHM's response costs, and the statute does not require a deeper relationship to the property for recovery. Ultimately, section 107(a) does not impose a protectable interest limitation, aligning with Congressional intent to allow any person to recover response costs, a stance not previously taken by any court of appeals.

Section 113(f) contribution actions require that the party seeking contribution must be liable or potentially liable under section 107(a). The district court initially dismissed OHM's section 113(f) claim against third-party defendants after dismissing OHM's section 107(a) claim, highlighting that contribution actions can only follow an established liability under section 107(a). However, this dismissal was reversed on appeal, allowing OHM's section 107(a) claim to proceed, thus negating the first reason for the dismissal of the section 113(f) claim.

The district court also held that only parties with liability under the statute can initiate a section 113(f) claim. OHM disputes any admission of liability regarding the waste it deposited, asserting that non-Potentially Responsible Parties (non-PRPs) can bring section 113(f) actions. The interpretation of the term "other" in section 113(f) is crucial; if it is seen as modifying only “person,” it would allow any individual to seek contribution from anyone else, regardless of their liability. Conversely, if “other” modifies “person who is liable or potentially liable,” it implies that the claimant must also hold some liability. The district court's interpretation aligns with the latter understanding, necessitating that any party seeking contribution under section 113(f) also be liable or potentially liable.

Contribution actions under section 113 of CERCLA are exclusively for resolving disputes among potentially responsible parties (PRPs), with courts tasked to allocate response costs based on equitable factors. Contribution rights are limited to defendants who have not settled their liability through an administrative or judicial process. The legislative history of CERCLA reinforces that only PRPs may initiate contribution actions, as the original statute did not allow for cost apportionment, leading to the recognition of an implicit federal common law right to contribution. The SARA amendments clarified and confirmed this right, allowing PRPs held jointly and severally liable to seek contribution from others when they believe their share of cleanup costs exceeds their equitable share. The objective was to mitigate the harshness of joint and several liability, rather than duplicating provisions of section 107(a). A notable case, Companies for Fair Allocation v. Axil Corp., suggested that the statute’s language permits any person to sue for contribution, although it restricts the parties from whom contribution can be sought to those who are liable or potentially liable.

In United Technologies v. BFI, the First Circuit determined that under section 113 of CERCLA, "contribution" is understood as a legal term referring to actions among potentially responsible parties (PRPs) to recover costs exceeding their pro rata share. The court emphasized that only parties deemed liable or potentially liable under CERCLA can initiate contribution actions. The definition of "contribution" aligns with the principle that a party who has settled a common liability can seek proportional recovery from other liable parties.

The ruling highlighted that OHM, which disputes its liability and claims it is not a PRP, risks losing its section 113(f) contribution claims due to its own pleadings. The court clarified that the terms "liable or potentially liable" and "PRP" are not statutorily defined but determined that being sued under CERCLA constitutes potential liability. This allows a defendant to counterclaim for contribution without admitting liability. The interpretation promotes the timely identification and joinder of PRPs, facilitating efficient settlement and cost apportionment.

Consequently, the court concluded that OHM qualifies as a PRP simply by being a defendant in the case, allowing it to pursue contribution claims under section 113(f). The district court's dismissal of OHM's claims was reversed, and the case was remanded for further proceedings.

Evans presents three grounds for summary judgment against OHM's revived section 107(a) claim: (1) OHM, as a potentially responsible party (PRP), cannot bring an action under section 107(a) due to its actual liability; (2) OHM's ability to recover response costs is disputed since the Louisiana Oil project is not considered a 'CERCLA quality' cleanup; and (3) the work performed is claimed to be inconsistent with the National Contingency Plan (NCP). The court refrains from addressing these factual issues, emphasizing that they should be resolved by the district court with a more complete record. Consequently, the court reverses the district court's dismissal of OHM's section 107(a) and section 113(f) contribution claims, remanding both for further proceedings. The court does not opine on whether a PRP can hold other parties jointly liable under section 107(a) or whether a party may be considered a PRP before being sued under CERCLA. It acknowledges potential overlap between OHM's contribution and response cost claims but clarifies that CERCLA does not prohibit multiple recovery grounds. Furthermore, it interprets that being sued under CERCLA establishes a party's potential liability, allowing for contribution claims even prior to a liability determination. Thus, OHM is deemed a PRP under CERCLA as a defendant in the case, permitting it to pursue contribution actions.

The appellate court reversed the district court's dismissals of OHM's section 113(f) contribution claims and section 107(a) claims, remanding both for further proceedings. Evans presented three independent grounds for summary judgment against OHM's section 107(a) claim, arguing that OHM, as a potentially responsible party (PRP), cannot pursue this action, that the Louisiana Oil project does not qualify as a "CERCLA quality" cleanup, and that the cleanup work was inconsistent with the National Contingency Plan (NCP). However, the appellate court determined these issues involve complex factual questions that should be resolved by the district court with a more complete record. The court refrained from expressing opinions on whether a PRP can hold other parties jointly liable under section 107(a) or the timing of PRP designation in relation to legal action under CERCLA. It acknowledged potential overlaps between OHM's contribution and response cost claims but clarified that CERCLA allows multiple recovery grounds. The court noted that if the district court finds OHM not liable for response costs, it would no longer be considered a liable party.