Arconic, Inc. v. APC Inv. Co.
| Decision Date | 10 August 2020 |
| Docket Number | No. 19-55181,19-55181 |
| Citation | 969 F.3d 945 |
| Parties | ARCONIC, INC., FKA Alcoa, Inc.; Applied Micro Circuits Corp.; BASF Corporation; Baxter Healthcare Corporation; Cal-Tape & Label Co.; California Hydroforming Company, Inc.; Cintas Corporation; Columbia Showcase & Cabinet Company, Inc.; County of Los Angeles; Crosby & Overton, Inc.; Disney Enterprises, Inc.; FHL Group; Forenco, Inc.; General Dynamics Corporation; Hexcel Corporation; Hercules, Inc.; Honeywell International, Inc.; International Paper Company; Los Angeles County Metropolitan Transportation Authority; Mattel, Inc.; Masco Corporation of Indiana; Merck Sharp & Dohme Corporation; Pilkington Group Limited; Quest Diagnostics Clinical Laboratories, Inc.; Raytheon Company; Soco West, Inc.; Sparton Technology, Inc.; The Boeing Company; The Dow Chemical Company; Regents of the University of California; TriMas Corporation; Univar USA, Inc.; Safety-Kleen Systems, Inc., Plaintiffs-Appellants, v. APC INVESTMENT CO.; Associated Plating Company; Associated Plating Company, Inc.; Gordon E. McCann; Lynnea R. McCann; Darrell K. Golnick; Clare S. Golnick; Bodycote Thermal Processing, Inc.; Powerine Oil Company; Claudette Earl; Earl Mfg. Co., Inc. ; Ferro Corp.; Fireman's Fund Insurance Company; Federal Insurance Company; Palley Supply Company; Foss Plating Company, Inc. ; Kekropia, Inc.; Palmtree Acquisition Corporation; Phibro-Tech, Inc.; First Dice Road Company, Inc. ; Union Pacific Railroad Company; Halliburton Affiliates, LLC; Cheryl A. Golnick, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
E. Joshua Rosenkranz (argued) and Elizabeth R. Cruikshank, Orrick Herrington & Sutcliffe LLP, New York, New York; Brian P. Goldman, Easha Anand, and Karim J. Kentfield, Orrick Herrington & Sutcliffe LLP, San Francisco, California; Nancy Sher Cohen and Ronald A. Valenzuela, Lathrop Gage LLP, Los Angeles, California; for Plaintiffs-Appellants.
Thomas R. McCarthy (argued), Consovoy McCarthy PLLC, Arlington, Virginia; David E. Cranston, Greenberg Glusker, Los Angeles, California; for Defendant-Appellee Union Pacific Railroad Company.
James B. Harris, Thompson & Knight LLP, Dallas, Texas; for Defendant-Appellee Bodycote Thermal Processing, Inc.
Robert P. Doty (argued) and Cathy T. Moses, Cox Castle & Nicholson LLP, San Francisco, California, for Defendant-Appellee Palmtree Acquisition Corporation.
No appearances by remaining Defendants-Appellees.
Matthew R. Oakes (argued) and Jennifer Scheller Neumann, Attorneys; Eric Grant, Deputy Assistant Attorney General; Environment and Natural Resources Division, United States Department of Justice, Washington, D.C.; Michael Massey, Attorney, United States Environmental Protection Agency; for Amicus Curiae United States.
Xavier Becerra, Attorney General; Sally Magnani, Senior Assistant Attorney General; Edward H. Ochoa, Supervising Deputy Attorney General; Olivia W. Karlin and James Potter, Deputy Attorneys General; Office of the Attorney General, Los Angeles, California; for Amicus Curiae California Department of Toxic Substances Control.
Timothy T. Coates and Marc J. Poster, Greines Martin Stein & Richland LLP, Los Angeles, California, for Amicus Curiae Former United States Department of Justice Official Stephen D. Ramsey.
Before: Consuelo M. Callahan and Jacqueline H. Nguyen, Circuit Judges, and Dana L. Christensen,* District Judge.
The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) requires parties to pursue contribution for their cleanup costs within three years of the "entry of a judicially approved settlement with respect to such costs." 42 U.S.C. § 9613(g)(3)(B). This appeal asks whether, to trigger this limitations period, a settlement must impose costs on the party seeking contribution—a question we answer in the affirmative. Because the district court relied on a contrary reading of the statute in holding the plaintiffs’ claims time-barred, we reverse its grant of summary judgment in the defendants’ favor.
The Omega Chemical Corporation recycled solvents and refrigerants at its facility in Whittier, California, from 1976 to 1991. The company's mishandling of these substances caused them to spill and leak from drums, tanks, and pipes, severely contaminating nearby soil and groundwater. In 1999, the U.S. Environmental Protection Agency (EPA) placed the Omega facility on the National Priorities List, a list of the most contaminated sites in the nation. 64 Fed. Reg. 2942, 2945 (Jan. 19, 1999). The agency then set about developing a long-term remedial plan for cleaning up the site, splitting the process into manageable phases, or "operable units." See 40 C.F.R. § 307.14 (). EPA first turned toward cleaning up the soil and groundwater contamination in the immediate vicinity of the Omega plant. It dubbed this Operable Unit 1 (OU-1).
EPA negotiated the cleanup of OU-1 with a group of Omega's customers, who formed the Omega Chemical Potentially Responsible Parties Organized Group (OPOG). The discussions proved fruitful, with OPOG agreeing to lead the remedial efforts with EPA oversight. To give a district court authority over that agreement and to trigger OPOG's right to seek contribution, the United States simultaneously lodged a complaint against OPOG with a proposed consent decree resolving that complaint. The consent decree required OPOG to contain and remediate the groundwater contamination around the Omega plant. It also required OPOG to reimburse the United States for its cleanup costs. The court entered the consent decree a few months later, in early 2001, thereby resolving OPOG's liability as to OU-1.
Under the applicable statute of limitations, 42 U.S.C. § 9613(g)(3)(B), the entry of the consent decree gave OPOG three years to seek contribution for its OU-1 costs. So in 2004 OPOG sued various other entities that had sent hazardous waste to the Omega plant. By and large, these defendants had contributed relatively small amounts of waste. They were, in EPA parlance, "de minimis " parties. See 42 U.S.C. § 9622(g) (). OPOG's complaint alleged that it had incurred $6.5 million in cleaning up the site, and it asserted that the de minimis parties were liable for their share of OPOG's past and future cleanup costs.
The de minimis parties agreed to settle OPOG's claims for $1.7 million. In exchange, OPOG assumed their "responsibilities" for the site, including their cleanup costs. This assumption was not limited to costs associated with OU-1; it included any Omega-site claims that the United States or another party might, in the future, assert against the de minimis parties. In essence, the settlement allowed these parties to walk away from the site effectively immune from further pursuit. The court approved that settlement in 2007.
EPA was meanwhile investigating Operable Unit 2 (OU-2). The agency had learned that chemicals from the Omega plant had migrated through groundwater and comingled with hazardous waste released from other facilities, forming a toxic plume extending over four miles downgradient of OU-1. In 2011, once EPA better understood the extent of the OU-2 plume, it selected a remedy: an extensive "pump-and-treat" system that would draw contaminated water from the ground and strip it of chemicals.
As it had with OU-1, OPOG agreed to spearhead the cleanup efforts for OU-2. The parties formalized their arrangement in 2016, with the United States again lodging a complaint and corresponding consent decree the same day.1 This time, though, the litigation concerned the downgradient plume. The consent decree committed OPOG to finance and implement the OU-2 pump-and-treat system. It further obligated OPOG to post a $70 million performance guarantee and reimburse the United States for its past and future OU-2 costs. The court approved the consent decree in 2017, thereby resolving OPOG's liability as to that portion of the site.
Several years earlier, in 2014, having already undertaken some OU-2 work, OPOG brought this suit seeking to recover the costs of that work from APC Investment Company and other entities (collectively, the APC defendants) who purportedly had contributed to the plume but not its cleanup. Once OPOG entered into the OU-2 consent decree, it amended its complaint to drop the cost-recovery claim and assert one for contribution in its stead. OPOG also sought a declaration as to the APC defendants’ liability "for their respective equitable shares" of the obligations OPOG had incurred under the OU-2 consent decree.
Some of the APC defendants moved for summary judgment, arguing that OPOG's 2007 settlement with the de minimis parties triggered CERCLA's three-year statute of limitations for contribution claims. The district court agreed, holding that the 2007 settlement was "with respect to" the same costs sought in this litigation and that, as a result, OPOG's claims were time-barred. Observing that the settlement resolved OPOG's and the de minimis parties’ site-wide claims against each other, the court reasoned that OU-2 necessarily fell within the scope of their agreement. The court also noted that OPOG was likely estopped from arguing that it could not previously seek contribution for OU-2 costs, since it asserted just such a claim in its 2004 complaint against the de minimis parties. The court entered judgment, and OPOG timely appealed. We have jurisdiction under 28 U.S.C. § 1291 and reverse.
We review de novo the grant of summary judgment and interpretation of CERCLA. Asarco LLC v. Celanese Chem. Co. , 792 F.3d 1203, 1208 (9th Cir. 2015). We also interpret CERCLA settlements de novo but defer to the district court's factual findings unless they are clearly erroneous. Id. And finally, we revi...
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CASE SUMMARIES.
...for further proceedings. Comprehensive Environmental Response, Compensation, and Liability Act Arconic, Inc. v. APC Investment Co., 969 F.3d 945 (9th Cir. Omega Chemical Potentially Responsible Parties Organized Group (OPOG) (8) brought an action against APC Investment Company and other ent......