U.S.A v. Aerojet Gen. Corp.

Citation606 F.3d 1142
Decision Date02 June 2010
Docket NumberNo. 08-55996.,08-55996.
PartiesUNITED STATES of America; California Department of Toxic Substances Control, Plaintiffs-Appellees,APW North America; Cardinal Industrial Finishes; Eemus Manufacturing Corp.; International Medication Systems, Ltd.; Norf James Jebbia Testamentary Trust; Roc-Aire Corporation; Janneberg Marital Trust; Smittybilt, Inc.; Southern California Edison Company; Andruss Family Trust, Defendants-Appellees,v.AEROJET GENERAL CORP.; Art Weiss, Inc.; Astro Seal, Inc.; Del Ray Industrial Enterprises, Inc.; Shelley Linderman, as Trustee of the Linderman Trust; M & T Company; Multi Chemical Products Inc.; Quaker Chemical Corporation; Time Realty Investments Inc.; Don Tonks; Roy Tonks; Tonks Properties; Art Weiss, Intervenors-Appellants.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

M. Alice Thurston, Lisa Elizabeth Jones, U.S. Department of Justice, Washington, D.C., Elizabeth Ann Rushton, Office of the California Attorney General, Los Angeles, CA, for plaintiffs-appellees.

Brian Donald Langa, Demetriou, Del Guercio, Springer & Francis, Los Angeles, CA, Catherine Mitchell Wieman, Peter A. Nyquist, Alston & Bird, Los Angeles, CA, Robert Stephen Niemann, Seyfarth Shaw, San Francisco, CA, Carla Margolis Blanc, Southern California Edison Company, Rosemead, CA, for defendants-appellees.

James Carlyle MacDonald, Thomas Jay Bois, II, Bois & MacDonald, Irvine, CA, Bradley L. Bunch, Law Offices of McCollum & Bunch, Fresno, CA, Stephen Robert Onstot, Walsworth Franklin Bevins & McCall, Los Angeles, CA, Stephen Arthur Tuggy, Locke Lord Bissell & Liddell, Los Angeles, CA, Lawrence Allen Hobel, Covington & Burling, San Francisco, CA, for intervenors-appellants.

Appeal from the United States District Court for the Central District of California, Audrey B. Collins, Chief District Judge, Presiding. D.C. No. 2:07-cv-06873-ABC-RC.

Before: CYNTHIA HOLCOMB HALL, W. FLETCHER and RICHARD R. CLIFTON, Circuit Judges.

WILLIAM A. FLETCHER, Circuit Judge:

The Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§ 9601-9675 (“CERCLA”), requires certain polluters to pay for cleaning up contaminated sites. After identifying a contaminated site, the federal Environmental Protection Agency (“EPA”) and state environmental agencies typically negotiate with potentially responsible parties (“PRPs”) over their shares of comparative responsibility for cleanup (“response”) costs. CERCLA allows PRPs to seek contribution from one another in order to apportion response costs equitably. But CERCLA bars contribution claims against PRPs that have obtained administratively or judicially approved settlements with the government. CERCLA thus provides an incentive for PRPs to settle by leaving non-settling PRPs liable for all of the response costs not paid by the settling PRPs.

We consider a question that has split the federal courts: May a non-settling PRP intervene in litigation to oppose a consent decree incorporating a settlement that, if approved, would bar contribution from the settling PRP? We join the Eighth and Tenth Circuits in holding that the answer is “yes.”

I. Background
A. Investigation and Negotiation

The San Gabriel Basin is a groundwater reservoir in eastern Los Angeles County that serves as a source of drinking water for more than one million people. In 1979, the EPA discovered groundwater contamination in the basin. In 1984, it designated much of the basin as a site on the CERCLA National Priorities List for investigation and cleanup. The EPA divided the site into eight “Operable Units.” The South El Monte Operable Unit (“SEMOU”) covers approximately eight square miles in the south central portion of the San Gabriel Basin.

The EPA's initial investigation determined that SEMOU groundwater contained volatile organic compounds (“VOCs”) that required containment and remediation. Throughout the 1990s, the EPA sent Notice of Liability Letters to PRPs, requesting that they participate in a Remedial Investigation and Feasibility Study (“RI/FS”). Thirty-three PRPs participated in the RI/FS process. By 1999, the EPA had completed the RI/FS and had identified numerous industrial facilities in the SEMOU that were potential sources of the VOCs.

In September 2000, the EPA issued an Interim Record of Decision (“IROD”) based on the RI/FS. The IROD prescribed a 30-year remedial plan to clean contaminants from the groundwater and stop their spread. As part of the plan, local water providers (“Water Entities”) would pump the contaminated water, clean the water, and then sell the treated water to their customers. The EPA projected the estimated cost of VOC cleanup at $14 million, plus an additional $14 million for costs incurred by the state and federal governments.

In March 2002, the EPA sent Special Notice Letters pursuant to § 122(e) of CERCLA, 42 U.S.C. § 9622(e), to 67 PRPs it had identified as current or former owners or operators of facilities in the basin that had used hazardous substances. The letters asked the PRPs to present good faith offers to comply with the IROD remedial plan and to pay the EPA's past costs in the SEMOU.

In the meantime, the Water Entities sought to require the PRPs to pay for the water treatment response costs. After lengthy negotiations, in July 2002 the Water Entities and thirteen PRPs (“Group of 13”) entered into an agreement (“G13 Agreement”). The G13 Agreement provided that the Group of 13 would pay $4.7 million to fund VOC cleanup in exchange for a standstill agreement under which the Water Entities would agree not to bring suit against the group during the period that the funds were being used. The Water Entities also agreed to “use good faith efforts” to support efforts of the Group of 13 to obtain an approved settlement that would bar contribution claims by other PRPs against Group of 13 members.

On August 28, 2003, the EPA issued a unilateral administrative order to 41 PRPs that had not yet entered into agreements or made good faith offers, requiring each of them to take remedial action.

The remedial plan contained in the 2000 IROD addressed only VOC contamination. Soon after the issuance of the IROD, the EPA detected perchlorate in SEMOU groundwater at concentrations higher than the state's drinking water advisory levels. In 2005, the EPA issued an Explanation of Significant Differences (“ESD”) to update the IROD remedial plan to address perchlorate contamination.

By 2007, estimated response costs had increased substantially. The EPA's VOC response cost estimate had increased from $14 million to $26 million. The ESD estimated an additional $46 million for perchlorate remediation. The estimated costs incurred by the state and federal governments had also increased from $14 million to $15 million. The total cost to clean up VOC and perchlorate contamination in the SEMOU groundwater was now estimated at $87 million.

B. Suits by the Water Entities ( SEMOU Cases )

While they were negotiating the agreement with the Group of 13, the Water Entities filed four suits in the Central District of California against other PRPs (the SEMOU Cases ).1 On March 31, 2003, the district court consolidated the four cases.

Under the terms of the G13 Agreement, the Water Entities could not sue the Group of 13. However, the PRP defendants in the SEMOU Cases were not so bound. The defendants filed third-party complaints against the Group of 13, as well as against other PRPs not sued by the Water Entities. Their third-party complaints sought contribution from the Group of 13 and the other PRPs. The defendants also filed counterclaims against the Water Entities. The district court appointed a Special Master to facilitate settlement. In October 2004, the district court stayed discovery while the parties focused on settlement discussions.

C. Agreement among the EPA, the Water Entities, and the Group of 10

In March 2007, ten PRPs from the Group of 13 (“Group of 10”) entered into an agreement with the Water Entities, the EPA, and the state (“G10 Agreement”). The Group of 13 had become the Group of 10 when two members applied successfully for “ability to pay” status see CERCLA § 122(g)(7), 42 U.S.C. § 9622(g)(7), and a third member declined to participate. The Group of 10 agreed to provide an additional $3.4 million to pay for cleanup of perchlorate contaminants in the SEMOU.

D. Appeal in This Case

In October 2007, the EPA filed a suit in the Central District of California against the Group of 10, lodging a proposed consent decree incorporating both the G13 Agreement of 2002 and the G10 Agreement of 2007. The consent decree, if approved by the court, would protect the Group of 10 from contribution claims by non-settling PRPs. The PRP defendants in the SEMOU Cases were not parties to the EPA's suit.

The Department of Justice published notice of the proposed consent decree in the Federal Register on November 8, 2007 and provided a thirty-day public comment period. See Notice of Lodging of Two Consent Decrees, 72 Fed.Reg. 63,185 (Nov. 8, 2007). A group of PRPs, including most of the defendants in the SEMOU Cases, submitted comments objecting to the proposed consent decree. We will call this group “Applicants.” Applicants did not include any of the Group of 13 or the Group of 10. Applicants complained that the EPA had not provided sufficient information about the proposed consent decree's allocation of cleanup costs. Applicants further complained that they were “unaware as to whether [a Non-Binding Preliminary Allocation of Responsibility] has been prepared by EPA.” In December 2007, Applicants submitted Freedom of Information Act requests to the EPA. They received some information in response on February 19, 2008.

In March 2008, Applicants moved to intervene as of right in the EPA's suit against the Group of 10 under Federal Rule of Civil Procedure 24(a)(2) and § 113(i) of CERCLA, 42 U.S.C. § 9613(i). The...

To continue reading

Request your trial
63 cases
  • Dep't of Fair Employment v. Lucent Technologies Inc.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • 26 Abril 2011
    ...omitted). Similarly, “[w]e review de novo a district court's denial of a motion to intervene as of right.” United States v. Aerojet Gen. Corp., 606 F.3d 1142, 1148 (9th Cir.2010). The denial of permissive intervention, however, is reviewed for abuse of discretion. Perry v. Proposition 8 Off......
  • Chubb Custom Ins. Co. v. Space Systems/Loral, Inc.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • 15 Marzo 2013
    ...Sundowner Offshore Servs., Inc., 523 U.S. 75, 79, 118 S.Ct. 998, 140 L.Ed.2d 201 (1998)); see also United States v. Aerojet Gen. Corp., 606 F.3d 1142, 1151 (9th Cir.2010) (declining to be persuaded by policy arguments where CERCLA statutory provisions are unambiguous). Nevertheless, given t......
  • State v. City of Tucson
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • 1 Agosto 2014
    ...such agreements have standing to intervene in CERCLA actions to oppose the entry of CERCLA consent decrees. United States v. Aerojet Gen. Corp., 606 F.3d 1142, 1150–53 (9th Cir.2010).3. Standard of Review In order to approve a CERCLA consent decree, a district court must concludethat the ag......
  • Asarco, LLC v. Union Pac. R.R. Co.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • 8 Agosto 2014
    ...of consent decree and remanding to allow other responsible parties to intervene); accord, e.g., United States v. Aerojet Gen. Corp., 606 F.3d 1142, 1149–50 (9th Cir.2010); United States v. Albert Inv. Co., 585 F.3d 1386, 1399 (10th Cir.2009). Asarco did not intervene before entry of the con......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT