Sun Company, Inc. (R&m), a Delaware Corporation Texaco, Inc., a Delaware Corporation v. Browning-Ferris, Inc., a Delaware Corporation Ark Wrecking Company of Oklahoma, Inc. Housing Authority for the City of Tulsa Pedrick Labs John Doe D/B/A Pedrick Labs Art Weedin Beverage Products Corp. Cowen Construction, Inc. National Tank, Co. Peevy Construction Co. Inc. Monte Shipley Sun Chemical Corporation Ozark Mahoning Company the City of Sand Springs, Oklahoma Atlantic Richfield Company Public Service Company of Oklahoma Bancoff Oil Company Borg Industrial Group Inc., D/B/A American Container Services Consolidated Cleaning Service Co. Inc. Charles Forhan, D/B/A D & W Exterminating Oil Capital Trash Services, Inc. Steve Richey, D/B/A Richey Refuse Service Estate of John D. Shipley, Deceased Shipley Refuse Robert E. Sparks, D/B/A Tulsa Industrial Services Union Carbide Corp. Waste Management of Oklahoma, Inc., and Bank IV Oklahoma, N.A. Stan Doyle Flemings Roofing and Sheet Metal Company Grant Gill, D/B/A Gill Sanitat

Citation: 124 F.3d 1187Docket: 96-5222

Court: Court of Appeals for the First Circuit; August 14, 1997; Federal Appellate Court

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In the case of Sun Company, Inc. R&M and Texaco, Inc. (Plaintiffs-Appellants) against multiple defendants including Browning-Ferris, Inc. and several others (Defendants-Appellees), the Tenth Circuit Court of Appeals addresses issues related to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), specifically sections 107 and 113. This marks the third instance in recent years that the court has sought to clarify the interplay between these sections, as seen in previous cases such as United States v. Colorado Eastern R.R. and Bancamerica Commercial Corp. v. Mosher Steel of Kansas. The plaintiffs initiated the lawsuit to recover costs incurred in the cleanup of a hazardous waste site, invoking both sections of CERCLA. The case emphasizes ongoing legal interpretations surrounding liability and cost recovery in environmental cleanup efforts.

The district court granted partial summary judgment in favor of Defendants, ruling that Plaintiffs could not pursue a cause of action under CERCLA section 107. Additionally, the court determined that the limitations period for Plaintiffs' contribution claims under section 113 commenced when they incurred costs exceeding their fair share of remediation expenses, rendering most of their claims time-barred. The court affirmed its jurisdiction under 28 U.S.C. 1291.

The case involved an abandoned limestone quarry in Oklahoma, which operated as a landfill from 1972 to 1976, leading to hazardous materials contaminating surrounding soil and water. The EPA included the site on the National Priority List in 1984 and later issued a Record of Decision for remediation. Identified as Potentially Responsible Parties (PRPs), Plaintiffs were compelled by a Unilateral Administrative Order to cover remediation costs, which they completed by August 1991 at a total expense of $6.2 million.

In 1994, Plaintiffs sought to recover costs from other contributing parties, claiming under sections 107 and 113 of CERCLA. The district court ruled that Plaintiffs, as PRPs, were not entitled to a cost recovery claim under section 107, interpreting their action as one for equitable apportionment of costs—thus classified as a contribution action under section 113. The court established that the limitations period for such claims is three years, initiating either upon a judgment or certain administrative orders. However, since the Plaintiffs' cleanup costs arose from an EPA order that did not trigger those events, the court ruled that Plaintiffs' claims were limited by their payment date, which resulted in most being barred by the statute of limitations.

The district court determined that each payment made by the Plaintiffs should be considered individually, allowing them to seek contribution for any payments made within three years prior to filing their action. It acknowledged uncertainties regarding potential future costs due to the EPA's remediation order, which mandates thirty years of maintenance and review, and thus refrained from ruling on the Plaintiffs' request for declaratory action on the apportionment of those future costs, pending additional briefing which is currently on hold due to the appeal.

The review of the summary judgment motion is conducted de novo, following the same standard as the district court, as outlined in Fed. R. Civ. P. 56(c). Summary judgment is appropriate when no genuine issues of material fact exist, and the moving party is entitled to judgment as a matter of law. The court must also evaluate whether the district court correctly applied substantive law. The statutory provisions relevant to this case have been reviewed de novo.

In Colorado Eastern, the court clarified the relationship between cost recovery actions under section 107 and contribution actions under section 113 of CERCLA. Initially, CERCLA only allowed for cost recovery under section 107, imposing strict, joint, and several liability on potentially responsible parties (PRPs). PRPs could only avoid this liability if they could prove that the harm was divisible, which is often not feasible in cases involving hazardous waste. To address this issue, courts recognized an implicit right to contribution, later codified by the Superfund Amendments and Reauthorization Act of 1986 (SARA), which added sections 113(f) and (g) to CERCLA.

The court held that any action taken by a PRP in a cost recovery action constitutes a claim for contribution among jointly and severally liable parties. The Plaintiffs argue that their situation differs from Colorado Eastern because they incurred cleanup costs without a civil action under sections 106 or 107, suggesting they can assert a cost recovery claim under section 107 as well. However, the court is not convinced by this argument.

Plaintiffs, despite incurring cleanup costs under a unilateral administrative order, remain jointly and severally liable due to their contribution of hazardous waste to the Site. Their claim is for equitable apportionment among jointly liable parties and constitutes a request for contribution. While Plaintiffs acknowledge their liability, they distinguish their situation from that in Colorado Eastern, arguing that PRPs who have not been defendants in civil actions under sections 106 or 107 do not face a statute of limitations for contribution claims. Section 113(g)(3) sets a three-year limitation for such claims, but it only triggers if cleanup costs arise from a government civil action. Therefore, PRPs incurring costs through unilateral orders or voluntarily may have unlimited time to file contribution claims. The district court noted this potential gap and suggested applying a triggering event from other federal contribution laws, which Plaintiffs contest as unnecessary. Section 113(f) does not create new liabilities but facilitates the apportionment of costs defined under section 107, establishing that a contribution claim under section 113(f) is essentially an action under section 107. Although a section 113 contribution action is not strictly a 'cost recovery' action as it does not impose strict liability, it seeks to recover costs defined in section 107, governed by equitable principles established in section 113(f). Thus, PRPs' contribution actions are limited by the interplay of sections 107 and 113, with varying statutes of limitations for different contribution claims as clarified in section 113(g).

Potentially Responsible Parties (PRPs) facing civil actions under sections 106 or 107 and incurring cleanup costs can either have the case settled or proceed to judgment. In both scenarios, they are protected under section 113(f), which permits contribution claims during or after these civil actions. The three-year statute of limitations under section 113(g)(3) is triggered by either outcome: it begins upon judgment or the date of a settlement order or judicial approval, depending on the nature of the settlement. PRPs incurring costs outside of these civil actions are also covered by section 113(f) but do not trigger the limitations period or secure liability protections associated with civil actions. Nonetheless, section 113(g)(2) provides for the initiation of cost recovery actions, mandating that such actions for remedial costs must commence within six years of the physical construction of the remedy. The court clarifies that a section 113(f) contribution action constitutes the initial action for recovering costs under section 9607, and thus must adhere to the six-year limitation. The defendants' interpretation that section 113(g)(2) only applies to traditional cost recovery actions under section 107 is rejected, as the language encompasses any initial action for cost recovery, including contribution actions.

Defendants argue that section 113(g)(3) establishes a three-year limitations period for all contribution claims under CERCLA, asserting that the six-year period in section 113(g)(2) is inapplicable. Section 113(g)(3), titled 'Contribution,' specifies that actions for contribution regarding response costs or damages must be initiated within three years of one of four triggering events. However, the interpretation presented indicates that a contribution claim deemed the 'initial action' would not commence more than three years after these events, as such events would not arise. Conversely, if a contribution action follows a previous one, a triggering event will have occurred. This interpretation acknowledges two types of contribution actions, each governed by the equitable principles of section 113(f) but subject to different limitation periods. 

Under sections 107 and 113, any entity that incurs cleanup costs can recover from responsible parties (PRPs). Government entities can recover all expenses through a section 107(a) cost recovery action, while PRPs can seek to recoup a portion of their costs from other PRPs via section 113(f) contribution actions. Liability under section 107 is strict and joint, while under section 113(f), it is several and allows for equitable apportionment based on relevant factors. 

If a PRP incurs costs through a civil action under sections 106 or 107, it has three years from the judgment or settlement date to initiate a contribution claim. If incurred otherwise, the PRP has six years from the start of remediation or three years post-removal action completion to file. This interpretation ensures that all sections of the statute are effective and addresses concerns that allowing claims under section 107 could undermine the defenses available under section 113(f)(2), which protects parties who settle their liability with the government from subsequent contribution claims regarding settled matters.

Reading's challenge regarding our interpretation, which implies a 'section 107 contribution action' for certain potentially responsible parties (PRPs), stems from a misunderstanding of the relationship between sections 107 and 113. Our interpretation does not segregate contribution actions into section 113 and section 107 categories based on the plaintiff PRP's procedural posture; rather, it acknowledges that all actions among jointly and severally liable PRPs are treated as 'actions under section 107' for liability purposes, while still being governed as contribution actions by section 113(f). The contribution defense in section 113(f)(2) applies to any contribution claim, allowing any defendant PRP who has settled its liability with the government to invoke this defense. PRPs can recover costs exceeding their pro rata share from other PRPs, constituting a classic contribution claim governed by equitable principles under section 113(f). 

The contribution claim for PRPs incurring cleanup costs via a civil action under sections 106 or 107 is subject to a three-year limitation per section 113(g)(3), while claims arising from other actions, such as an EPA unilateral administrative order, are governed by section 113(g)(2). Consequently, we affirm the district court's dismissal of the Plaintiffs' cost recovery action under section 107, but reverse its decision regarding the section 113(f) contribution claims and remand for further proceedings. We do not opine on the potential for PRPs asserting innocence regarding site waste to recover costs under section 107. Section 113(f) of CERCLA allows contribution claims from any liable person during or after a civil action and mandates adherence to Federal law, permitting courts to allocate response costs equitably. 'Orphan shares' refer to waste responsibilities tied to PRPs who are insolvent or untraceable.