511 U.S. 809 (1994), 93-376, Key Tronic Corp. v. United States

Docket Nº:No. 93-376
Citation:511 U.S. 809, 114 S.Ct. 1960, 128 L.Ed.2d 797, 62 U.S.L.W. 4441
Party Name:KEY TRONIC CORP. v. UNITED STATES et al.
Case Date:June 06, 1994
Court:United States Supreme Court
 
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511 U.S. 809 (1994)

114 S.Ct. 1960, 128 L.Ed.2d 797, 62 U.S.L.W. 4441

KEY TRONIC CORP.

v.

UNITED STATES et al.

No. 93-376

United States Supreme Court

June 6, 1994

Argued March 29, 1994

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Syllabus

Petitioner Key Tronic Corporation, one of several parties responsible for contaminating a landfill, settled a lawsuit filed by the Environmental Protection Agency (EPA) and then brought this action against the Air Force and other responsible parties to recover a share of its cleanup costs, including attorney's fees for legal services in connection with (1) the identification of other potentially responsible parties (PRP's), (2) the preparation and negotiation of the settlement agreement with the EPA, and (3) the prosecution of this litigation. The District Court held, inter alia, that all of the attorney's fees were recoverable under § 107 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), as amended by the Superfund Amendments and Reauthorization Act of 1986 (SARA). The Court of Appeals disagreed as to each type of fees and reversed.

Held:

CERCLA § 107 does not provide for the award of private litigants' attorney's fees associated with bringing a cost recovery action. Pp. 814-821.

(a) Under the longstanding "American rule," attorney's fees generally are not a recoverable cost of litigation absent explicit congressional authorization. See, e.g., Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240. The relevant provisions of CERCLA do not expressly mention the recovery of such fees, although § 107(a)(4)(B) imposes private liability for the "necessary costs of response" to the release of a hazardous substance, while § 101(25), as amended by SARA, defines "response" to include "enforcement activities." Pp. 814-816.

(b) The fees for prosecuting this action against the Air Force are not recoverable "necessary costs of response" under § 107(a)(4)(B) because the "enforcement activities" included in § 101(25) do not encompass a private party's action to recover cleanup costs from other PRP's. First, although § 107 unquestionably provides such a cause of action, that cause is not explicitly set out in the section's text, but was inferred in numerous District Court cases interpreting the statute. To conclude that a provision that only impliedly authorizes suit nonetheless provides for attorney's fees with the clarity required by Alyeska would be unprecedented. Second, Congress' inclusion of two express fee awards provisions elsewhere in the SARA amendments, and its omission of a similar

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provision either in § 107 or in § 113, which expressly authorizes contribution claims, strongly suggest a deliberate decision not to authorize such awards in the kind of private cost recovery action that is at issue. Third, it would stretch the plain terms of the phrase "enforcement activities" too far to construe it as encompassing such an action. Pp. 816-819.

(c) Unlike litigation-related fees, the component of Key Tronic's claim covering activities performed in identifying other PRP's constitutes a "necessary cos[t] of response" recoverable under § 107(a)(4)(B). Such work might well be performed by engineers, chemists, private investigators, or other professionals who are not lawyers, and fees for its performance are clearly distinguishable from litigation expenses governed by the American rule under Alyeska. The District Court recognized the role such efforts played in uncovering the Air Force's disposal of wastes at the site and in prompting the EPA to initiate enforcement action against the Air Force. Tracking down other responsible solvent polluters increases the probability that a cleanup will be effective and get paid for. Key Tronic is therefore quite right to claim that these activities significantly benefited the entire cleanup effort and served a statutory purpose apart from the reallocation of costs. Pp. 819-820.

(d) However, fees for the legal services performed in connection with the negotiations between Key Tronic and the EPA that culminated in the consent decree do not constitute "necessary costs of response." Although studies that Key Tronic's counsel prepared or supervised during those negotiations may indeed have aided the EPA and may also have affected the cleanup's ultimate scope and form, such work must be viewed as primarily protecting Key Tronic's interests as a defendant in the proceedings that established the extent of its liability. Pp. 820-821.

984 F.2d 1025, affirmed in part, reversed in part, and remanded.

Stevens, J., delivered the opinion of the Court, in which Rehnquist, C. J., and O'Connor, Kennedy, Souter, and Ginsburg, JJ., joined. Scalia, J., filed an opinion dissenting in part, in which Blackmun and Thomas, JJ., joined, post, p. 821.

Mark W. Schneider argued the cause for petitioner. With him on the briefs were James R. Moore, Michael Himes, and Kathryn L. Tucker.

Deputy Solicitor General Wallace argued the cause for the United States. With him on the briefs were Solicitor General Days, Acting Assistant Attorney General Schiffer,

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Ronald J. Mann, Anne S. Almy, David C. Shilton, and M. Alice Thurston.[*]

Justice Stevens delivered the opinion of the Court.

Petitioner Key Tronic Corporation, one of several parties responsible for contaminating a landfill, brought this action to recover a share of its cleanup costs from other responsible parties. The question presented is whether attorney's fees are "necessary costs of response" within the meaning of § 107(a)(4)(B) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), as amended by the Superfund Amendments and Reauthorization Act of 1986 (SARA), 100 Stat. 1613, and therefore recoverable in such an action.

I

During the 1970's Key Tronic and other parties, including the United States Air Force, disposed of liquid chemicals at the Colbert Landfill in eastern Washington State. In 1980 the Washington Department of Ecology (WDOE) determined that the water supply in the surrounding area had been contaminated by these chemicals. Various lawsuits ensued, including formal proceedings against Key Tronic, the Air Force, and other parties.

Two of those proceedings were settled. In one settlement with WDOE and the Environmental Protection Agency (EPA), Key Tronic agreed to contribute $4.2 million to an EPA cleanup fund. In the other, the Air Force agreed to pay the EPA $1.45 million. The EPA subsequently released the Air Force from further liability pursuant to CERCLA § 122(g)(5), 42 U.S.C. § 9622(g)(5), which provides that a

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party that has resolved its liability to the United States shall not be liable for contribution claims regarding matters addressed in the settlement.[1]

Key Tronic thereafter brought this action against the United States and other parties seeking to recover part of its $4.2 million commitment to the EPA in a contribution claim under CERCLA § 113(f), 42 U.S.C. § 9613(f), and seeking an additional $1.2 million for response costs that it incurred before the settlements in a cost recovery claim under CERCLA § 107(a)(4)(B), 42 U.S.C. § 9607(a)(4)(B). The $1.2 million included attorney's fees for three types of legal services: (1) the identification of other potentially responsible parties (PRP's), including the Air Force, that were liable for the cleanup; (2) preparation and negotiation of its agreement with the EPA; and (3) the prosecution of this litigation.[2]

The District Court dismissed Key Tronic's $4.2 million contribution claim against the Air Force when Key Tronic conceded that § 122(g)(5) precluded it from recovering any part of the consent decree obligation.[3] Key Tronic's claim for $1.2 million of additional response costs could be pursued under CERCLA § 107(a)(4)(B), 42 U.S.C. § 9607, the court held, because it related to matters not covered by the Air

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Force's settlement with the EPA. 766 F.Supp. 865, 868 (ED Wash. 1991). Section 107(a) provides that responsible parties are liable for "any. . . necessary costs of response incurred by any other person consistent with the national contingency plan."[4] 42 U.S.C. § 9607(a)(4)(B). CERCLA's definitional § 101(25), as amended by SARA, provides that "response" or "respond" "means remove, removal, remedy, and remedial action" and that "all such terms (including the terms 'removal' and 'remedial action') include enforcement activities related thereto." 42 U.S.C. § 9601(25). Construing §§ 107 and 101(25) "liberally to achieve the overall objectives of the statute," 766 F. Supp., at 872, the District Court concluded that a private party may incur enforcement costs and that such costs include attorney's fees for bringing a cost recovery action under § 107.Id., at 871. The court went on to decide that attorney's fees encompassed within Key Tronic's PRP search costs also were recoverable as an enforcement activity under CERCLA, id., at 872, and that the costs Key Tronic's attorneys incurred in negotiating the agreement with the EPA were recoverable as necessary response costs under § 107.[5]

The Court of Appeals reversed. 984 F.2d 1025, 1028 (CA9 1993). Relying on its decision in Stanton Road Associates v. Lohrey Enterprises, 984 F.2d 1015 (CA9 1993), which prohibited a litigant in a private response cost recovery action from obtaining attorney's fees from a party responsible for the pollution, the court held that the District Court lacked authority to award attorney's fees in this case. 984 F.2d, at 1027. The court concluded that Stanton Road likewise precluded an award of attorney's fees for Key Tronic's search

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for other responsible parties and for negotiating the consent decree. "Because Congress has not explicitly authorized private litigants to recover their legal expenses incurred in...

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