Atlantic Research Corp. v. U.S., 05-3152.

• Decision Date: 11 August 2006
• Docket Number: No. 05-3152.,05-3152.
• Parties: ATLANTIC RESEARCH CORP. Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 827

459 F.3d 827

ATLANTIC RESEARCH CORP. Appellant, v. UNITED STATES of America, Appellee.

No. 05-3152.

United States Court of Appeals, Eighth Circuit.

Submitted: March 16, 2006.

Filed: August 11, 2006.

COPYRIGHT MATERIAL OMITTED

Thomas Armstrong, argued, Milwaukee, WI (Floyd M. Thomas, Jr., El Dorado, AR, on the brief), for appellant.

Ronald M. Spritzer, Dept. of Justice, argued, Washington, D.C. (Greer S. Goldman and Michelle Walter of the Dept. of Justice, Washington, D.C. appeared on the brief), for appellee.

Before WOLLMAN and RILEY, Circuit Judges, and ROSENBAUM,¹ District Judge.

ROSENBAUM, District Judge.

Atlantic Research Corporation ("Atlantic") seeks partial reimbursement from the United States for costs incurred in an environmental cleanup. Atlantic's claim is based on the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. §§ 9601-9675 (2005), as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), Pub.L. No. 99-499, 100 Stat. 1613, 1615. The issue for consideration is whether CERCLA forbids a party such as Atlantic, which has voluntarily cleaned up a site for which it was only partly responsible, to recover part of its cleanup costs from another liable party.² For the reasons that follow, we hold that CERCLA § 107 permits such a cause of action.

I. Background

Atlantic retrofitted rocket motors for the United States from 1981 through 1986. It performed this service at its Camden, Arkansas, facility. The work included using high-pressure water spray to remove rocket propellant. Once removed, the propellant was burned. Residue from burnt rocket fuel contaminated the Arkansas site's soil and groundwater.

Atlantic voluntarily investigated and cleaned up the contamination, incurring costs in the process. It sought to recover a portion of these costs from the United States by invoking CERCLA §§ 107(a) and 113(f).³ Atlantic and the government began to negotiate in an effort to resolve these financial matters.

The negotiations ended with the United States Supreme Court decision in Cooper Industries, Inc. v. Aviall Services, Inc., 543 U.S. 157, 125 S.Ct. 577, 160 L.Ed.2d 548 (2004) ("Aviall"). In Aviall, the court found a party could only attempt to obtain § 113(f) contribution "during or following" a §§ 106 or 107(a) CERCLA civil action. Id. at 161, 125 S.Ct. at 580. As no action had been commenced against Atlantic under either §§ 106 or 107(a), the Aviall decision barred its § 113(f) contribution claim.

With its § 113(f) claim Aviall-foreclosed, Atlantic amended its complaint. The amended complaint relied solely on § 107(a) and federal common law. In lieu of answer, the government moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing this Court's pre-Aviall decision in Dico. Inc. v. Amoco Oil Co., 340 F.3d 525 (8th Cir.2003) ("Dico") foreclosed Atlantic's § 107 claim. The district court agreed. Atlantic appeals.

As will be discussed in more detail below, Dico held that a liable party could not bring an action under § 107. Dico, 340 F.3d at 531. We recognize the generally preclusive effect of a previous panel's ruling. United States v. Blahowski, 324 F.3d 592, 596-97 (8th Cir.2003). But this rule is not inflexible. Where the prior decision can be distinguished, or its rationale has been undermined, a subsequent decision can depart from the prior path.⁴ We are convinced Dico is such a case; it is clearly distinguishable from the case at bar, and its analytic is undermined by Aviall.

II. Analysis

As this case turns on the interpretation of CERCLA, a federal statute, our review is de novo. Iowa 80 Group, Inc. v. Internal Revenue Service, 406 F.3d 950, 952 (8th Cir.2005). We undertake this review, recognizing our obligation to effectuate the intent of Congress when interpreting federal statutes. Id. To resolve the question before us, we must briefly review the intertwined history of CERCLA §§ 107 and 113, and then analyze this history in light of Aviall.

A. CERCLA Cost Recovery and Contribution—Pre-Aviall

CERCLA is Congress's monumental attempt to "encourage the timely cleanup of hazardous waste sites," and "place the cost of that response on those responsible for creating or maintaining the hazardous condition." Control Data Corp. v. S.C.S.C. Corp., 53 F.3d 930, 935-36 (8th Cir.1995) (internal quotations and citations omitted). To achieve these ends, CERCLA effectively transformed centuries of real property and tort liability law by making those who contaminate a site strictly liable for the costs of subsequent cleanup by others. See Alexandra B. Klass, From Reservoirs to Remediation: The Impact of CERCLA on Common Law Strict Liability Environmental Claims, 39 Wake Forest L.Rev. 903 (2004); Ronald G. Aronovsky, Federalism & CERCLA: Rethinking the Role of Federal Law in Private Cleanup Cost Disputes, 33 Ecology L.Q. 1, 9 (2006).

When the federal or a state government conducts the cleanup, CERCLA permits the sovereign to recover its costs from whomever is liable for the contamination. § 107(a)(4)(A). CERCLA also provides three methods by which private parties may recover cleanup costs. The first is found at § 107(a)(4)(B), a part of the original statute in 1980. Congress added the others, §§ 113(f)(1) and 113(f)(3)(B), as part of SARA.⁵

Sections 107(a) and 113(f)(1) are central to our analysis. The Eighth, and many of its sister Circuits, have previously held that liable parties seeking reimbursement must use § 113(f)(1), and may not use § 107 for that purpose. Today, we consider whether this ruling remains viable in the post-Aviall world.

CERCLA's § 107(a) provides that "covered persons," which we will call "liable parties,"⁶ are liable for, among other things:

(A) all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe not inconsistent with the national contingency plan;

(B) any other necessary costs of response incurred by any other person consistent with the national contingency plan[.]

§ 107(a)(4)(A),(B). Courts have found in CERCLA's reference to "any other necessary costs of response" and "any other person," authority to allow private suits under § 107(a)(4)(B). See Walls v. Waste Resource Corp., 761 F.2d 311, 318 (6th Cir.1985) (collecting cases).

Section 113 contains a subsection entitled "Contribution," the first part of which states:

Any person may seek contribution from any other person who is liable or potentially liable under [§ 107(a)], during or following any civil action under [§§ 106 or 107(a)]. Such claims shall be brought in accordance with this section and the Federal Rules of Civil Procedure, and shall be governed by Federal law. In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate. Nothing in this subsection shall diminish the right of any person to bring an action for contribution in the absence of a civil action under [§§ 106 or 107].

§ 113(f)(1).

There is some similarity in the remedial responsibilities borne by liable parties under §§ 107(a) and 113(f). The Supreme Court has termed these sections' remedies "similar and somewhat overlapping," yet "clearly distinct." Compare Key Tronic Corp. v. United States, 511 U.S. 809, 816, 114 S.Ct. 1960, 1966, 128 L.Ed.2d 797 (1994) with Aviall, 543 U.S. at 163 n. 3, 125 S.Ct. at 582 n. 3. Each requires proof of the same elements. Redwing Carriers, Inc. v. Saraland Apartments, 94 F.3d 1489, 1496 (11th Cir.1996). They differ, however, in procedure and scope.

1. Section 107(a) Remedies

Section 107(a) has a six-year statute of limitations, and allows a plaintiff to recover 100% of its response costs from all liable parties, including those which have settled their CERCLA liability with the government. §§ 113(g)(2), 107(a). Prior to SARA's enactment, some courts implied a right to contribution from § 107, see Mardan Corp. v. C.G.C. Music, Ltd., 804 F.2d 1454, 1457 n. 3 (9th Cir.1986) (collecting cases), or as a matter of federal common law. United States v. New Castle County, 642 F.Supp. 1258, 1265-66 (D.Del.1986). The right initially was thought to be uncertain in light of the Supreme Court's traditional reluctance to imply rights of action in the context of other statutes. See, e.g., Texas Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 639-40, 101 S.Ct. 2061, 2066, 68 L.Ed.2d 500 (1981) (declining to imply an antitrust right of action for contribution).

2. Section 113 Remedies

Congress resolved the uncertainty when enacting SARA in 1986 by adding § 113 to "clarif[y] and confirm" a right to CERCLA contribution. United Technologies Corp. v. Browning-Ferris Indus., Inc., 33 F.3d 96, 100 (1st Cir.1994), citing S.Rep. No. 11, 99th Cong., 1st Sess. 44 (1985). Section 113's explicit right to contribution is more restricted than that afforded by § 107. Section 113's right is subject to a three-year statute of limitations; plaintiffs can recover only costs in excess of their equitable share, and may not recover from previously-settling parties. § 113(f)(1), (f)(2), (g)(3).

3. The Section 107(a)/Section 113 Conflict—Pre-Aviall

Congress's addition of § 113 posed a dilemma. Courts saw that CERCLA, as amended, created a situation where litigants might "quickly abandon section 113 in favor of the substantially more generous provisions of section 107," thus rendering § 113 a nullity. New Castle County v. Halliburton NUS Corp., 111 F.3d 1116, 1123 (3d Cir.1997).

To prevent § 107 from swallowing § 113, courts began directing traffic between the sections. See id.; United Techns., 33 F.3d at 101; Bedford Affiliates v. Sills, 156 F.3d 416, 424 (2d Cir.1998). As a result, regardless of which CERCLA section a plaintiff invoked, courts typically analyzed §§ 107 and 113 together, aiming to distinguish one from the other. See Bedford Affiliates, 156 F.3d at 424; Centerior...