602 F.3d 204 (3rd Cir. 2010), 09-1814, Agere Systems, Inc. v. Advanced Environmental Technology Corp.

Docket Nº:09-1814.
Citation:602 F.3d 204
Opinion Judge:JORDAN, Circuit Judge.
Party Name:AGERE SYSTEMS, INC.; Cytec Industries, Inc.; Ford Motor Company; SPS Technologies, LLC; TI Group Automotive Systems, LLC v. ADVANCED ENVIRONMENTAL TECHNOLOGY CORPORATION; Ashland, Inc.; Carpenter Technology Corporation; Diaz Chemical Corporation; FCG Inc.; Handy & Harman Tube Co., Inc.; NRM Investment Company Carpenter Technology Corporation, Appel
Attorney:Robert D. Fox [argued], Neil S. Witkes, Kathleen B. Campbell, Manko, Gold, Katcher & Fox, LLP, Bala Cynwyd, PA, for Appellant. Glenn A. Harris [argued], Amy M. Trojecki, Ballard Spahr Andrews & Ingersol, LLP, Voorhees, NJ, for Appellees.
Judge Panel:Before: SLOVITER, JORDAN and GREENBERG, Circuit Judges.
Case Date:April 12, 2010
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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Page 204

602 F.3d 204 (3rd Cir. 2010)

AGERE SYSTEMS, INC.; Cytec Industries, Inc.; Ford Motor Company; SPS Technologies, LLC; TI Group Automotive Systems, LLC

v.

ADVANCED ENVIRONMENTAL TECHNOLOGY CORPORATION; Ashland, Inc.; Carpenter Technology Corporation; Diaz Chemical Corporation; FCG Inc.; Handy & Harman Tube Co., Inc.; NRM Investment Company

Carpenter Technology Corporation, Appellant.

No. 09-1814.

United States Court of Appeals, Third Circuit.

April 12, 2010

Argued Dec. 17, 2009.

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Robert D. Fox [argued], Neil S. Witkes, Kathleen B. Campbell, Manko, Gold, Katcher & Fox, LLP, Bala Cynwyd, PA, for Appellant.

Glenn A. Harris [argued], Amy M. Trojecki, Ballard Spahr Andrews & Ingersol, LLP, Voorhees, NJ, for Appellees.

Before: SLOVITER, JORDAN and GREENBERG, Circuit Judges.

OPINION

JORDAN, Circuit Judge.

Table of Contents
I. Background 211
A. EPA Actions at the Boarhead Site 211
i. The OU-1 Consent Decree 212
ii. The OU-2 Consent Decree 212
iii. Carpenter 213
B. Present Suit 213
i. Stipulations 214
ii. Bench Trial 214
II. Statement of Jurisdiction and Standard of Review 216
III. Discussion 216
A. Statutory Background Law 216
B. Issues on Appeal 218
C. Cytec, Ford, SPS, and TI's § 113(f) Claim for Reimbursement of Payments Made to the EPA for Past Costs 219
i. Background 219
ii. The Statute of Limitations to Recover Past Costs 219
iii. The Exceptions to the Three-Year Statute of Limitations Period 221
D. TI and Agere's § 107(a) Claims to Recover Costs Paid to Other Plaintiffs Pursuant to Settlement Agreements 224
i. Background 224
ii. Section 107(a) Cost Recovery Claims 225
E. The District Court's Equitable Allocation for the Plaintiffs' Costs of Performing Work Under the OU-1 and OU-2Consent Decrees 227
i. Background 227
ii. Sections 107(a) and 113(f) 227
iii. The District Court's Equitable Allocation Under § 113(f) 229
iv. The June 23rd Stipulation is Not an Admission that is Admissible Against Carpenter 231
v. Other Evidence Regarding Waste Volumes 233
F. Other Contentions Regarding the District Court's Equitable Allocation 234
i. NRM's Waste 234
ii. The Culpability and Lack of Cooperation of Settling Defendants 235
iii. Settlement Amounts 235
G. The Pennsylvania Hazardous Sites Cleanup Act 236
IV. Conclusion 236

Page 210 This appeal arises from nearly three decades of involvement by the Environmental Protection Agency (" EPA" ) at the Boarhead Farms Superfund Site in Bucks County, Pennsylvania (the " Boarhead Site" or the " Site" ). At issue in the underlying case was the disposal of millions of gallons of toxic waste, over a six-year time period, by more than twenty parties, with millions of dollars of cleanup costs at stake. Along with the factual issues born of that history, the case implicates the still developing distinctions between liability under § 107(a) and § 113(f) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 and the Superfund Amendments and Reauthorization Act of 1986 (" SARA" ), codified together at 42 U.S.C. §§ 9601-9675 (collectively " CERCLA" ). On June 18, 2002, five plaintiffs-Agere Systems, Inc. (" Agere" ), Cytec Industries, Inc. (" Cytec" ), Ford Motor Company (" Ford" ), SPS Technology, LLC (" SPS" ), and TI Automotive Systems LLC (" TI" ) (collectively " plaintiffs" or " appellees" )-filed the present suit against twenty-three defendants for cost recovery and contribution under CERCLA and the Pennsylvania Hazardous Sites Cleanup Act (" HSCA" ), 35 PA. STAT. ANN.. § 6020.101-104 et seq. , to recover costs that the plaintiffs had paid to the EPA pursuant to certain consent decrees or that they had provided as a consequence of the cleanup of hazardous substances at the Boarhead Site. All of the defendants except one, Carpenter Technology Corporation (" Carpenter" ), settled their liabilities with the plaintiffs or were otherwise dismissed from the suit after a bench trial. On August 22, 2008, the United States District Court for the Eastern District of Pennsylvania entered judgment against Carpenter, finding it liable for 80% of the costs paid by the plaintiffs as of December 31, 2007, plus prejudgment interest. The Court also entered a declaratory Page 211 judgment that Carpenter is liable for 80% of all cleanup costs that the plaintiffs may incur after January 1, 2008. The District Court denied Carpenter's motion to alter or amend the judgment, and Carpenter filed this appeal. For the following reasons, we will vacate the District Court's judgment and remand for proceedings consistent with this opinion. I. Background Beginning in 1972, DeRewal Chemical Corporation (" DCC" ), a business that removed, transported, and disposed of chemical waste generated by other companies, began illegally dumping its customers' waste at the Boarhead Site. The dumping continued until 1976, when DCC was enjoined from bringing any chemicals to the Site.1 A. EPA Actions at the Boarhead Site Between 1984 and 1986, the EPA completed an initial investigation of the contamination at the Boarhead Site. Based on the results of that investigation, the Site was added to the EPA's National Priorities List on March 13, 1989, 2 and thus became a Superfund site.3 Later that year, the EPA performed a remedial investigation of the Site to identify whether there were contaminants that posed a risk to human health and the environment. That investigation revealed a variety of hazardous substances in the soil, sediments, and groundwater. In response, the EPA conducted several small-scale cleanup actions 4 over the next three years to address immediate risks. A report of the remedial investigation was published in January 1997, and, by the following July, the EPA issued a feasibility study that defined objectives for a larger-scale response with additional remedial actions. 5 In January 1998, the EPA produced its proposed remedial action plan, based on both the remedial investigation and the feasibility study. Then, on November 18, 1998, it issued its Record of Decision (" ROD" ) respecting the Site.6 The Page 212 ROD was to be implemented in two stages, which, in the argot of the EPA, are referred to as " operable units." An operable unit is a " discrete action that comprises an incremental step toward comprehensively addressing site problems." 40 C.F.R. § 307.14. The two planned for the Boarhead Site were designated as Operable Unit One (" OU-1" ) and Operable Unit Two (" OU-2" ).7 i. The OU-1 Consent Decree On June 2, 2000, the EPA commenced a suit in the District Court against Cytec, Ford, and SPS, under § 107 of CERCLA, 42 U.S.C. § 9607,8 by filing a complaint along with a consent decree that those parties had executed (the " OU-1 Consent Decree" ). The District Court approved the OU-1 Consent Decree on September 28, 2000. Pursuant to the mandates of the decree, as well as an administrative order,9 Cytec, Ford, and SPS were required to do the work contemplated for OU-1 and to reimburse the EPA for its administrative and oversight costs in connection with the OU-1 cleanup. Cytec, Ford, and SPS subsequently entered into a separate settlement agreement with Agere, TI, and two other companies, whereby they all agreed to collectively fund and perform OU-1 work and to otherwise comply with the OU-1 Consent Decree. All seven of those companies, which, for convenience, we will call the " OU-1 group," have contributed to trust accounts from which various contractors have been paid and will continue to be paid to perform the work required by the OU-1 Consent Decree. ii. The OU-2 Consent Decree On December 6, 2001, the EPA commenced another suit in federal court under § 107 against Cytec, Ford, SPS, and TI, by filing a complaint and a second consent decree that those parties had executed (the " OU-2 Consent Decree" ). The District Court approved the OU-2 Consent Decree on March 14, 2002. Pursuant to that decree and, again, an administrative order,10 the Court ordered Cytec, Ford, Page 213 SPS, and TI to do four things: (1) do the work contemplated for OU-2; (2) reimburse the EPA for approximately $7 million in costs related to removal actions at the Boarhead Site that the EPA had incurred prior to July 2000; 11 (3) reimburse the EPA for a yet-to-be-determined amount of response costs incurred after July 2000; and (4) reimburse the EPA for its other future response costs in connection with OU-2 work. Ford, Cytec, SPS, and TI subsequently entered into a separate, private settlement with Agere whereby the parties agreed to collectively fund and perform OU-2 work and to otherwise comply with the OU-2 Consent Decree. Again for convenience, we will refer to those five companies as " the OU2 group." In a fashion similar to the OU-1 group, the five members of the OU-2 group contributed to group trust accounts from which they paid and will continue to pay various contractors to perform the work required by the OU-2 Consent Decree. On March 30, 2007, in exchange for $400,000, Agere (which had never itself been sued by the EPA), assigned to Cytec, Ford, SPS, and TI its claims to recover the approximately one million dollars it had paid into the OU-1 and OU-2 group trust accounts.12 iii. Carpenter DCC collected and disposed of waste...

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