Atlantic Richfield Co. v. American Airlines, Inc.

• Decision Date: 16 October 1996
• Docket Number: 94-5062,Nos. 94-5061,94-5079 and 94-5099,s. 94-5061
• Citation: 98 F.3d 564
• Court: U.S. Court of Appeals — Tenth Circuit
• Parties: , 65 USLW 2263, 27 Envtl. L. Rep. 20,318 ATLANTIC RICHFIELD COMPANY, Plaintiff-Appellee/Cross-Appellant, v. AMERICAN AIRLINES, INC., Baker Hughes Incorporated, Borgwarner Corporation, Burgessnorton Mfg. Co., Chief Chemical & Supply, Inc., Cintas Corporation, Inc., Crane Carrier Corp., Dover Corporation, Groendyke Transport, Inc., Jerry Inman Trucking, Inc., Kansas Industrial Environmental Services, Inc., McDonnell Douglas Corporation, MK & O Coach Lines, Paccar, Inc., Phillips Petroleum Company, Ramsey Winch Company, Ryder Truck Rental, Inc., The Uniroyal Goodrich Tire Company, Webco Industries, Whirlpool Corporation, (Group I Defendants), Sand Springs Home, Container Products of Oklahoma, Defendants-Appellants/Cross-Appellees, United States of America, Amicus Curiae.

Page 564

98 F.3d 564

44 ERC 1170, 65 USLW 2263, 27 Envtl.

L. Rep. 20,318

ATLANTIC RICHFIELD COMPANY, Plaintiff-Appellee/Cross-Appellant, v. AMERICAN AIRLINES, INC., Baker Hughes Incorporated Borgwarner Corporation, Burgessnorton Mfg. Co., Chief Chemical & Supply, Inc., Cintas Corporation, Inc., Crane Carrier Corp., Dover Corporation, Groendyke Transport, Inc. Jerry Inman Trucking, Inc., Kansas Industrial Environmental Services, Inc., McDonnell Douglas Corporation, MK & O Coach Lines, Paccar, Inc., Phillips Petroleum Company, Ramsey Winch Company, Ryder Truck Rental, Inc., The Uniroyal Goodrich Tire Company, Webco Industries, Whirlpool Corporation, (Group I Defendants), Sand Springs Home Container Products of Oklahoma, Defendants-Appellants/Cross-Appellees United States of America, Amicus Curiae.

Nos. 94-5061, 94-5062, 94-5079 and 94-5099.

United States Court of Appeals, Tenth Circuit.

Oct. 16, 1996.

Claire V. Eagan (Michael D. Graves and Susan L. Gates with her on the brief), of Hall, Estill, Hardwick, Gable, Golden & Nelson P.C., Tulsa, OK, for appellants/cross-appellees.

James M. Harris (Larry G. Gutterridge and Alan Au with him on the brief), of Sidley & Austin, Los Angeles, CA, for appellee/cross-appellant.

Lois J. Schiffer, Assistant Attorney General; David C. Shilton and John T. Stahr, Department of Justice, Environment and Natural Resources Division; and Charles Openchowski, Office of General Counsel, United States Environmental Protection Agency, for amicus curiae.

Before HENRY, SETH, ^* and BRISCOE, Circuit Judges.

BRISCOE, Circuit Judge.

Atlantic Richfield Co. (ARCO), one of several parties responsible for a hazardous waste site, settled a lawsuit brought by the Environmental Protection Agency (EPA) and then brought these consolidated contribution actions against other responsible parties to recover a share of the cleanup costs under § 113(f) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. §§ 9601-9657. Several defendants appeal the district court's judgment that ARCO is entitled to contribution for the money it must pay to the EPA for that agency's oversight of the cleanup and for attorney fees incurred in negotiating the consent decree with the EPA. ARCO cross-appeals the court's failure to award ARCO attorney fees incurred in locating potentially responsible parties, and the court's apportionment of fees paid to the settlement judge.

We affirm the district court's ruling that ARCO is entitled to recover for its payment of the EPA's oversight costs, but reverse the judgment allowing recovery of attorney fees incurred by ARCO in negotiating the consent decree. On the cross-appeal, we affirm the district court's ruling on attorney fees and the court's apportionment of the fees paid to the settlement judge.

Facts

The hazardous waste site that is the subject of this appeal is a 6.2 acre tract near Tulsa, Oklahoma, known as the Glenn Wynn site. It is part of a larger tract that was the site of a Sinclair Refining Company refinery until 1952. ARCO acquired a portion of the refinery site in a merger with Sinclair in 1969, and sold it in 1987. The Glenn Wynn site was leased to a waste oil reclamation business from 1964 through mid-1982, and defendants-appellants are among the parties who generated waste materials that were delivered to the site during that time.

In 1986, the EPA identified the entire refinery site as a Superfund site under CERCLA and placed it on the National Priorities List. The EPA and the Oklahoma State Department of Health conducted a Remedial Investigation and Feasibility Study, after which the EPA issued a Record of Decision requiring excavation and off-site thermal destruction of sludges from the Glenn Wynn site, and stabilization and solidification of sludges from the rest of the refinery site.

The EPA and ARCO negotiated a consent decree, which was filed in May 1989, under which ARCO agreed to implement the entire remedy for the Glenn Wynn site subject to oversight by the EPA, to pay the costs incurred by the EPA in response to the site contamination, and to pay for the EPA's future oversight of ARCO's implementation of the remedy. The sludge at the Glenn Wynn site was cleaned up to the EPA's satisfaction by June 1993.

ARCO brought these consolidated contribution actions to recover from other responsible parties a share of the costs it incurred in cleaning up the Glenn Wynn site. Among the defendants were appellants, companies whose waste oil was delivered to the Glenn Wynn site and who were designated as Group I. ¹ The Group I defendants include the following: Baker Hughes Incorporated; Borg-Warner Corporation; Burgess-Norton Manufacturing Co. (a Division of Amsted Industries Incorporated); Chief Supply Corporation (sued as Chief Chemical Supply and Chief Chemical & Supply, Inc.); Crane Carrier Corp.; Dover Corporation; Groendyke Transport, Inc.; H.W. Allen Co., f/k/a MK & O Coach Lines; Jerry Inman Trucking, Inc.; Kansas Industrial Environmental Services, Inc.; McDonnell Douglas Corporation; Paccar, Inc.; Phillips Petroleum Company; Ramsey Winch Company; Ryder Truck Rental, Inc. (for itself and as successor to Wilco Truck); The Uniroyal Goodrich Tire Company; Webco Industries, Inc.; and Whirlpool Corporation. Appellants stipulated to liability for their proportionate share of the costs of cleaning up the site, but contended some of the costs sought by ARCO were not recoverable under CERCLA.

Appellants moved for summary judgment, contending ARCO was not entitled to recover its attorney fees and the costs of EPA oversight of the cleanup. The district court ruled that ARCO could not recover attorney fees incurred in the litigation, but could recover any nonlitigation attorney fees that were necessary to the cleanup. The court also ruled that whether ARCO could recover the EPA oversight costs it was obligated to pay under the consent decree was a question of fact.

After trial, the district court found ARCO had incurred $9,007,069.56 in reasonable and necessary costs of response for the Glenn Wynn site. This sum included nonlitigation attorney fees in the amount of $29,108.60 and the costs of EPA oversight of ARCO's cleanup in the amount of $420,765, but did not include litigation attorney fees. The court also found ARCO was entitled to prejudgment interest of $155,943. However, the court did not enter a money judgment in favor of ARCO because it had received $9,607,744.16 in settlements with defendants other than appellants. The court ruled appellants would be liable for 90% of any future costs beyond the overage, less credits for remediation costs already paid by four defendants, and that ARCO would be liable for the remaining 10%.

EPA Oversight Costs

Appellants contend the district court erred in ruling that ARCO was entitled to contribution for the money it must pay to the EPA for the agency's oversight of ARCO's cleanup of the site. Relying on United States v. Rohm & Haas Co., 2 F.3d 1265 (3d Cir.1993), they argue the costs of EPA oversight of a private party cleanup are not costs for which they can be held liable under § 107(a) of CERCLA, and are therefore not recoverable by ARCO under § 113(f). We disagree.

Under CERCLA, the government may either conduct cleanups itself or permit or require responsible parties to do so. CERCLA §§ 104(a) and 106 (42 U.S.C. §§ 9604(a) and 9606). Liability for costs incurred by the government or a private party in cleaning up a site is imposed by § 107(a)(4) (42 U.S.C. § 9607(a)(4)), which provides responsible parties are liable for "(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; [and] (B) any other necessary costs of response incurred by any other person consistent with the national contingency plan." Under § 113(f) (42 U.S.C. § 9613(f)), "[a]ny person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title."

The terms "response," "removal," and "remedial action" are defined in CERCLA § 101(42 U.S.C. § 9601). Responses consist of removals and remedial actions and "enforcement activities related thereto." CERCLA § 101(25). In general, a "removal" is a short-term response and a "remedial action" is a long term response. See CERCLA § 101(23) and (24); Daigle v. Shell Oil Co., 972 F.2d 1527, 1533-34 (10th Cir.1992). Under § 113(f), ARCO can recover a share of the EPA oversight costs it must pay under the consent decree only if those costs are costs of removal or remedial action for which responsible parties are liable under § 107.

In Rohm & Haas, the court held costs incurred by the EPA in overseeing a private party cleanup were not costs of removal and could not be recovered under § 107(a). 2 F.3d at 1271. The court based its conclusion that government oversight of a private party removal is not a removal action largely on National Cable Television Ass'n v. United States, 415 U.S. 336, 94 S.Ct. 1146, 39 L.Ed.2d 370 (1974), as explained in Skinner v. Mid-America Pipeline Co., 490 U.S. 212, 109 S.Ct. 1726, 104 L.Ed.2d 250 (1989). Rohm & Haas, 2 F.3d at 1273. In Skinner, 490 U.S. at 224, 109 S.Ct. at 1734, the Supreme Court stated: "Congress must indicate clearly its intention to delegate to the Executive the discretionary authority to recover administrative costs not inuring directly to the benefit of regulated parties by imposing additional financial burdens, whether characterized as 'fees' or 'taxes' on those parties."

In Rohm & Haas, the court concluded the costs incurred by the government in monitoring a private party's cleanup were administrative costs not inuring directly to the benefit of that party, but rather to the benefit of the public at large. 2 F.3d at 1273. Accordingly, the court stated:

We will not presume Congress to have intended a statute to create the dramatic and unusual...