ASARCO, LLC v. Celanese Chem. Co.

• Decision Date: 10 July 2015
• Docket Number: No. 12–16832.,12–16832.
• Parties: ASARCO, LLC, Plaintiff–Appellant, v. CELANESE CHEMICAL COMPANY, Defendant–Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

792 F.3d 1203

ASARCO, LLC, Plaintiff–Appellant

v.CELANESE CHEMICAL COMPANY, Defendant–Appellee.

No. 12–16832.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Oct. 8, 2014.

Filed July 10, 2015.

Linda R. Larson (argued), Russell C. Prugh, and Meline G. MacCurdy, Marten Law PLLC, Seattle, WA; Gregory Evans and James G. Warren, Integer Law Corporation, Los Angeles, CA, for Plaintiff–Appellant.

John D. Edgcomb (argued) and Michael A.G. Einhorn, Edgcomb Law Group, LLP, San Francisco, CA, for Defendant–Appellee.

Appeal from the United States District Court for the Northern District of California, William Alsup, District Judge, Presiding. D.C. No. 3:11–cv–01384–WHA.

Before: WILLIAM A. FLETCHER and PAUL J. WATFORD, Circuit Judges, and KEVIN THOMAS DUFFY, District Judge.^*

OPINION

DUFFY, District Judge:

Plaintiff–Appellant ASARCO, LLC (“ASARCO”) appeals the district court's grant of summary judgment in favor of Defendant–Appellee CNA Holdings, LLC¹ (“CNA”) in ASARCO's suit for contribution under § 113(f)(3)(B) of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. § 9613(f)(3)(B).² The district court ruled that ASARCO's contribution action was time-barred and dismissed the complaint. For the reasons that follow, we affirm the judgment of the district court.

FACTS AND PROCEDURAL HISTORY

ASARCO is the corporate successor to a company that owned and operated a silver and lead smelter on a 66–acre industrial site (the “Selby Site”) on San Pablo Bay in Contra Costa, California. The smelter operated until 1970, depositing smelting byproducts on its property and the tideland ASARCO leased from the California State Lands Commission (“State Lands”) abutting the property. The smelter was closed after it was named as the likely source of lead pollution that caused livestock deaths nearby. After the smelter closed, ASARCO leased a 1.33 acre parcel of the Selby Site containing a sulfur dioxide plant (“Plant”) that ASARCO had previously operated to Virginia Chemicals, a corporate predecessor to CNA. CNA leased and operated the Plant from 1972 until September 1977. As a result of the Plant operations that occurred before and during CNA's leasehold, the soil in the Selby Site area was contaminated with sulfuric acid, as discovered by the San Francisco Bay Regional Water Quality Control Board (the “RWQCB”) in April 1976. RWQCB issued a cleanup and abatement order in August 1976, amended the order in November 1976, and conditionally rescinded the order in April 1977.

After the Plant shut down, and long after smelting had ceased, Wickland Oil Company (“Wickland”) purchased ASARCO's Selby Site property in October 1977, and leased the tidelands from State Lands in July 1981 to build and operate a marine fuel terminal. Wickland learned from the California State Department of Health Services (“California DHS”) that the Selby Site contained hazardous substances, and that further investigation and remediation efforts were required across much of the site. California DHS had identified the presence of toxic metals in the slag pile, with high concentrations of lead, zinc, arsenic, and cadmium. The Selby Site was placed on the California State Superfund list. Wickland incurred environmental response costs and looked for other responsible parties to share those costs.

In 1983, Wickland filed a cost-recovery lawsuit under CERCLA § 107 against ASARCO, as the former owner of part of the Selby Site and operator of the entire Selby Site, and State Lands, as the former owner of the remainder of the Selby Site that permitted and encouraged the disposal by ASARCO of hazardous substances on the Selby Site. In its lawsuit, Wickland sought to establish ASARCO's liability for response costs at the Selby Site to address metals leaching from the slag and causing groundwater contamination. Wickland sought reimbursement of no less than $400,000 in past response costs and a declaration that ASARCO and State Lands were liable for all future response costs at the Selby Site. After the district court rendered summary judgment in favor of ASARCO and State Lands in the 1983 case on the grounds that (1) the cost recovery claim was not ripe and (2) the claims for declarative and therefore injunctive relief were not ripe, we reversed the district court's judgment and remanded the case so that Wickland could pursue its claims. Wickland Oil Terminals v. Asarco, Inc., 792 F.2d 887, 892–93 (9th Cir.1986).

In February 1989, Wickland, ASARCO, and State Lands (collectively, the “Settling Parties”) entered into the Wickland Agreement, an “Agreement for Entry of Consent Judgment” to “settle and compromise the [district court lawsuit], and to establish a procedure for allocating past and future costs attributable to the events and conditions underlying the [district court lawsuit].” State Lands entered into the agreement as the former owner of part of the Selby Site, not as a “Government Agency.” Although the Settling Parties knew that Virginia Chemicals had been named in the 1976 RWQCB Order and repeatedly referred to in the Wickland lawsuit, Virginia Chemicals had never been brought into the lawsuit as a party, and was not a party to the Wickland Agreement. The district court entered a consent judgment based on the Wickland Agreement on March 13, 1989, and retained jurisdiction over the parties in order to enforce or amend the terms of the Agreement.

In August 2005, sixteen years after the Wickland Agreement settled the Selby Site litigation, ASARCO filed a Chapter 11 voluntary petition in the United States Bankruptcy Court for the Southern District of Texas. State Lands, C.S. Land, Inc. (“CSLI,” Wickland's successor in interest), and California Department of Toxic Substances Control (“DTSC,” California DHS's successor as the administrating regulatory agency) asserted claims for ASARCO's share of past and future Selby Site environmental costs in July 2006 (and amended the claims in 2007). DTSC's proof of claim indicated that remediation of the conditions addressed by ASARCO's interim remedial measures was not complete and sought to recover costs to implement a final remedy at the Selby Site.

In January 2008, ASARCO moved in the bankruptcy court for approval of a settlement (“2008 Bankruptcy Settlement”) of the response cost claims asserted by State Lands, CSLI and DTSC. Notably, ASARCO's parent company filed an objection to the settlement, contending that the settlement included costs to remediate contaminated groundwater that ASARCO had nothing to do with. ASARCO's parent withdrew the objection after negotiating a stipulation and clarification with the parties regarding $33 million ASARCO was to pay DTSC under the 2008 Bankruptcy Settlement. The bankruptcy court approved the 2008 Bankruptcy Settlement on March 31, 2008.

On March 23, 2011, ASARCO filed a new lawsuit against CNA to seek contribution under CERCLA § 113(f). CNA moved for summary judgment on the ground that ASARCO's suit was barred by the statute of limitations under CERCLA § 113(g)(3)(B), and on June 6, 2012, the district court entered summary judgment in favor of CNA. The district court decided that the statute of limitations for contribution claims following a “judicially approved settlement” under CERCLA § 113(g)(3)(B) applied to any judicially approved settlement, whether between private parties or between a private party and the United States or a State. The district court determined that the statute of limitations applied to the Wickland Agreement and that ASARCO's time to file a contribution claim pursuant to the Wickland Agreement had expired. The district court also determined that 2008 Bankruptcy Settlement did not present any new costs not contemplated in the Wickland Agreement, and therefore a new contribution claim had not accrued as a result of the 2008 Bankruptcy Settlement. This appeal followed.

STANDARD OF REVIEW

Summary judgment in CERCLA cases is reviewed de novo. Carson Harbor Vill., Ltd. v. Unocal Corp., 270 F.3d 863, 870 (9th Cir.2001) (en banc). The district court's interpretation of CERCLA is reviewed de novo. City of Emeryville v. Robinson, 621 F.3d 1251, 1261 (9th Cir.2010). “Interpretation of a settlement agreement is a question of law subject to de novo review, but we defer to any factual findings made by the district court in interpreting the settlement agreement unless they are clearly erroneous.” Id. (internal citation omitted).

DISCUSSION

I. Introduction

The issues before us hinge on a question of statutory interpretation: Under CERCLA, may a settlement agreement between private parties to a CERCLA § 107 cost-recovery lawsuit create a cause of action for contribution under CERCLA § 113(f)(1) that is excepted from the three-year statute of limitations in CERCLA § 113(g)(3)? As we have previously noted, CERCLA is a complex statute with a “ ‘maze-'like structure and ‘baffling language.’ ” California ex rel. Cal. Dep't of Toxic Substances Control v. Neville Chem. Co., 358 F.3d 661, 663 (9th Cir.2004) (quoting Carson Harbor Vill., 270 F.3d at 880, 883 ). While the statutory language may be baffling and the structure maze-like, the statute clearly indicates that any contribution claim for particular remedial costs is subject to a three-year statute of limitations once liability for a potentially responsible party (“PRP”) becomes recognized through a judicially approved settlement. 42 U.S.C. § 9613(g)(3)(B).

At oral argument in this case, ASARCO admitted that it could have filed a contribution claim against CNA following the entry of the Wickland Agreement. At issue in this appeal is (1) whether or not a CERCLA contribution claim, once it has accrued, may be excepted from the statute of limitations based on the type of settlement that underlies the claim, and (2) if the claim is subject to the statute of limitations and the time to file has expired, whether the claim may be revived by a subsequent event. We hold that a judicially approved...