ASARCO LLC v. Atl. Richfield Co.

• Decision Date: 26 August 2014
• Docket Number: No. CV 12–53–H–DLC.,CV 12–53–H–DLC.
• Citation: 73 F.Supp.3d 1285
• Parties: ASARCO LLC, a Delaware corporation, Plaintiff, v. ATLANTIC RICHFIELD COMPANY, a Delaware corporation, Defendant.
• Court: U.S. District Court — District of Montana

73 F.Supp.3d 1285

ASARCO LLC, a Delaware corporation, Plaintiff

v.ATLANTIC RICHFIELD COMPANY, a Delaware corporation, Defendant.

No. CV 12–53–H–DLC.

United States District Court, D. Montana, Helena Division.

Signed Aug. 26, 2014.

Gregory Evans, James G. Warren, Daphne Hsu, Laura G. Brys, Integer Law Corporation, Los Angeles, CA, William Adam Duerk, Rachel H. Parkin, Milodragovich Dale Steinbrenner, Missoula, MT, for Plaintiff.

Benjamin B. Strawn, Kenzo Kawanabe, William J. Duffy, Davis Graham & Stubbs, LLP, Elizabeth H. Temkin, Temkin Wielga & Hardt LLP, Denver, CO, Jason T. Hungerford, Norton Rose Fulbright LLP, England, Randy J. Cox, Mary Cile Glover Rogers, Randy J. Tanner, Boone Karlberg, P.C., Missoula, MT, for Defendant.

ORDER

DANA L. CHRISTENSEN, Chief Judge.

Before the Court is Defendant Atlantic Richfield Company's (“Atlantic Richfield”) motion for summary judgment, the resolution of which hinges on two issues. First, does a consent decree ASARCO entered into with the United States in 1998 trigger CERCLA's 3–year statute of limitations for contribution actions despite the fact that the decree does not expressly address CERCLA liability. This issue has not been addressed by the Ninth Circuit Court of Appeals, and in the two circuits which have addressed this issue, the Second and Third, conflicting conclusions were reached. Second, to what extent does a 2009 consent decree between ASARCO and the United States create new cleanup costs or obligations not covered in the 1998 consent decree. For the reasons articulated herein, the Court finds that the 1998 consent decree did trigger the statute of limitations, and that the 2009 consent decree extended ASARCO's obligations no further than the 1998 decree. The Court grants summary judgment in favor of Atlantic Richfield.

Factual Background

ASARCO operated a lead smelter at the East Helena Site (“Site”) from 1888 until 2001. Atlantic Richfield's predecessor, the Anaconda Company, constructed and operated a zinc fuming plant on land leased from ASARCO at the site from 1927 to 1972. ASARCO purchased the zinc plant from Anaconda in 1972 and continued to operate it until 1982. Operations at the site released numerous hazardous substances, causing the Environmental Protection Agency (“EPA”) to add the site to the National Priorities List under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), more commonly known as “Superfund,” in 1984.

ASARCO and the EPA entered into several consent decrees, including one dated May 5, 1998 (“1998 Decree”) that resolved claims EPA had brought against ASARCO for multiple violations of the Resource Conservation and Recovery Act (“RCRA”) and the Clean Water Act (“CWA”). Under this Decree, jurisdiction over all Site-related cleanup was transferred from the CERCLA program to the RCRA program. While the contents and scope of this Decree are addressed at length below, suffice it to say that the Decree was comprehensive, and required ASARCO to conduct a wide range of activities regarding the contamination.

In 2005, ASARCO filed for Chapter 11 bankruptcy protection. The United States and the State of Montana (collectively referred to as “governments”) filed proofs of claim in the bankruptcy proceeding for cleanup of the Site. During the bankruptcy proceeding, ASARCO and the governments entered two settlements regarding the East Helena Site, the second of which was a judicially approved consent decree entered into in June of 2009 (“2009 Decree”). The June 2009 Decree is the subject of the instant motion. It resolved ASARCO's environmental liabilities to the governments at several sites, including East Helena, and created a custodial trust and trust account for each of the Montana properties. The 2009 Decree also required ASARCO to transfer all property rights and interests in the East Helena Site to the trust, and pay $99.294 million into the trust account for that Site, The Montana Environmental Trust Group (“METG”) was appointed custodial trustee to oversee the trust and trust account for the Site. The bankruptcy court approved ASARCO's plan of reorganization in November of 2009.

ASARCO filed its Complaint in this case in June of 2012, which it amended on September 11, 2012. ASARCO seeks contribution pursuant to CERCLA for the $99.294 million it paid under the 2009 Decree. Atlantic Richfield now seeks summary judgment, arguing that CERCLA's 3–year statute of limitations for such contribution claims began to run upon entry of the 1998 Decree, and that the 2009 Decree does not create any specific or new obligations as to the East Helena Site that were not covered in the 1998 Decree.

Summary Judgment Standard

Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The movant bears the initial burden of informing the Court of the basis for its motion and identifying those portions of “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (internal quotation marks omitted), The movant's burden is satisfied when the documentary evidence produced by the parties permits only one conclusion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251–52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Where the moving party has met its initial burden, the party opposing the motion “may not rest upon the mere allegations or denials of his pleading, but ... must set forth specific facts showing that there is a genuine issue for trial,” Id. at 248, 106 S.Ct. 2505 (internal quotation marks omitted).

Analysis

In response to widespread public outcry following the Love Canal tragedy in Niagara Falls, New York, Congress enacted CERCLA in 1980 to facilitate the prompt cleanup of hazardous waste sites. CERCLA is a unique and powerful statute, imposing strict and joint and several liability on countless parties for contamination reaching back to the Nineteenth Century. It grants the federal and state governments broad power to effectively and efficiently remediate hazardous contamination, and creates incentives for parties to actively participate in removal and remedial actions.

In 1986, Congress passed the Superfund Amendments and Reauthorization Act (“SARA”), which amended CERCLA and created mechanisms by which parties that have taken certain specific affirmative actions to address contamination can seek contribution against other potentially liable parties. This motion hinges on one such mechanism, CERCLA § 113(f)(3)(B), which provides:

A person who has resolved its liability to the United States or a State for some or all of a response action or for some or all of the costs of such action in an administrative or judicially approved settlement may seek contribution from any person who is not party to a settlement referred to in paragraph (2).

42 U.S.C. § 9613(f)(3)(B). Contribution claims based on judicially approved settlements are subject to a 3–year statute of limitations. 42 U.S.C. § 9613(g)(3)(B) (“No action for contribution for any response costs or damages may be commenced more than 3 years after ... entry of a judicially approved settlement with respect to such costs or damages”).

Neither the law nor common logic supports the concept that a statute of limitations could run on a claim that has not yet accrued. Atlantic Richfield's argument that the 3–year statute of limitations has run is predicated on its assertion that the court's approval of the 1998 Decree—which admittedly makes no express reference to CERCLA liability—gave rise to a contribution claim under § 113(f)(3)(B).¹ This is a multi-faceted question that involves a novel question of law that has yet to be resolved by the Ninth Circuit and a fact specific inquiry as to the 1998 and 2009 Decrees.

The Court first considers whether CERCLA § 113(f)(3)(B) provides a contribution claim where a party has not expressly settled its CERCLA liability. While the Ninth Circuit has yet to address this issue, as previously stated the Second and Third Circuits have. Unfortunately, although not surprisingly given the widely-shared opinion that CERCLA is not a model of legislative draftsmanship,² those courts have taken opposing positions.

The Second Circuit interprets § 113(f)(3)(B) “to create a contribution right only when liability for CERCLA claims, rather than some broader category of legal claims, is resolved.” Consolidated Edison Co. of New York, Inc. v. UGI Utilities, Inc., 423 F.3d 90, 95 (2d Cir.2005). In Consolidated Edison, Con Ed sued UGI Utilities to recover costs it had incurred and would incur in cleaning up several sites on which UGI allegedly operated manufactured gas plants. Con Ed alleged that UGI was liable for remedial costs under CERCLA, as well as under New York State law. After filing suit, Con Ed entered into a voluntary agreement with the New York State Department of Environmental Conservation (“NYDEC”), in which it agreed to cleanup over 100 sites, including those subject to its suit against UGI, as a means to resolve its liability under state law. The court did not discuss the issue at length, basing its holding on § 113(f)(3)(B)'s requirement that the party seeking contribution must have resolved its liability for “response action[s],” which it characterized as a “CERCLA-specific term describing an action to clean up a site or minimize the release of contaminants in the future.” Id. at 95–96, The court also looked to SARA's legislative history, quoting from the report of the House Committee on Energy and Commerce that § 113 “ ‘clarifies and confirms the right of a person held jointly and severally liable under CERCLA to seek contribution from other potentially liable parties.’ ” Id. at 96 (citing and quoting ...