New Castle County v. Halliburton NUS Corp.

• Decision Date: 03 June 1997
• Docket Number: No. 96-7443,96-7443
• Citation: 111 F.3d 1116
• Parties: , 65 USLW 2759, 27 Envtl. L. Rep. 21,159 NEW CASTLE COUNTY; Rhone-Poulenc, Inc., Zeneca, Inc., Appellants, v. HALLIBURTON NUS CORP.
• Court: U.S. Court of Appeals — Third Circuit

Page 1116

111 F.3d 1116

44 ERC 1513, 65 USLW 2759, 27 Envtl.

L. Rep. 21,159

NEW CASTLE COUNTY; Rhone-Poulenc, Inc., Zeneca, Inc., Appellants, v. HALLIBURTON NUS CORP.

No. 96-7443.

United States Court of Appeals, Third Circuit.

Argued March 11, 1997.

Decided May 2, 1997.

Rehearing Denied June 3, 1997.

M. Edward Danberg, Julie M. Sebring, New Castle Law Department, Wilmington, DE , for Appellant, The Government of New Castle County, Delaware.

George J. Weiner (argued), Patrick O. Cavanaugh, McCutchen, Doyle, Brown & Enersen, Washington, D.C., for Appellants.

Kenneth J. Warren (argued), Michael M. Meloy, John F. Gullace, Manko, Gold & Katcher, Bala Cynwyd, PA, Phebe S. Young, Bayard, Handelman & Murdoch, P.A., Wilmington, DE, for Appellee Halliburton NUS Corporation.

Daniel M. Steinway, Thomas C. Jackson, Kelley, Drye & Warren, Washington, D.C., for Amicus-Appellee The Hazardous Waste Action Coalition, Camp, Dresser & Mckee, Inc.; Ch2M Hill; Montgomery Watson, Inc.; And Sverdrup Environmental, Inc.

Lois J. Schiffer, Assistant Attorney General, Anne S. Almy, John T. Stahr, Department of Justice, Environment and Natural Resources Division, Washington, D.C. (Earl Salo, Alexander Schmandt, Office of General Counsel, United States Environmental Protection Agency, Washington, D.C., of counsel), for United States as Amicus Curiae in Partial Support of Appellee.

Before: MANSMANN and LEWIS, Circuit Judges, and DUPLANTIER, District Judge. ^*

OPINION OF THE COURT

MANSMANN, Circuit Judge.

We must decide whether a person who is potentially responsible for the clean-up of a hazardous waste site under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq., may bring a cost recovery claim against other potentially responsible persons under CERCLA section 107(a)(4)(B), id. § 9607(a)(4)(B), separate from a contribution claim under section 113(f) of the Superfund Amendments and Reauthorization Act (SARA), id. § 9613(f). We conclude that a potentially responsible person may not bring a section 107 cost recovery claim against another potentially responsible person, and we will therefore affirm the judgment of the district court.

I.

This appeal arises from efforts to clean up the Tybouts Corner Landfill, a hazardous substance site located in Delaware. In 1980, the United States filed suit against New Castle County, the owner and operator of the landfill, and against the predecessor of Rhone-Poulenc, Inc., who arranged for the disposal of hazardous substances at the landfill. The case was originally brought under the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., but the complaint was amended in 1984 to add counts under CERCLA. The CERCLA counts sought to have the defendants conduct remedial action and reimburse the EPA for its response costs. The amended complaint also added as a defendant the predecessor of Zeneca, Inc., an arranger for disposal at the landfill.

On April 19, 1989, the EPA entered into a series of consent decrees with New Castle County, Rhone-Poulenc and Zeneca (collectively "New Castle") and others, requiring them to finance and implement remedial action at the landfill. Prior to entry of the consent decrees, the EPA contracted with Halliburton NUS Corporation ("NUS") to perform a Remedial Investigation/Feasibility Study to determine appropriate response actions. As part of that determination, NUS installed several monitoring wells in areas where refuse had been placed during the landfill's operation. One of the wells, TY-311, was installed to assess the "Merchantville Formation," a clay strata separating a shallow formation containing groundwater impacted by landfill material and a formation containing groundwater used by New Castle County as drinking water. NUS reported that the Merchantville Formation was missing in the vicinity of TY-311.

According to New Castle, NUS improperly constructed well TY-311 such that (1) NUS' conclusion about the missing formation was incorrect and (2) NUS' construction of the well improperly opened a "window" between the two groundwater formations. New Castle learned of these alleged mistakes on the part of NUS in a report dated October 28, 1991. On October 26, 1993, New Castle filed this lawsuit against NUS. In Count II, New Castle asserted that NUS was liable under CERCLA section 107(a)(4)(B) for all or part of the response costs incurred by New Castle in connection with the landfill. Count I asserted common law negligence, and Count III asserted claims under Delaware environmental laws.

NUS moved for summary judgment as to Count II on the ground that it actually constituted a claim for contribution under CERCLA section 113(f)(1), and that the claim was therefore time-barred under section 113's three-year statute of limitations (unlike a section 107 cost recovery action, which is generally governed by a six-year statute of limitations).

The district court held that Count II constituted a claim for contribution under section 113. New Castle County v. Halliburton NUS Corp., 903 F.Supp. 771, 780 (D.Del.1995). ¹ The court also determined that New Castle's cause of action accrued on the date of the consent decrees. Id. at 777.

The district court further concluded that the limitations period on New Castle's contribution action was not equitably tolled and thus expired three years after the consent decrees were entered. The court dismissed Count II with prejudice. New Castle County v. Halliburton NUS Corp., No. 93-504-LON (D. Del. June 7, 1996). The court dismissed Counts I and III without prejudice to refiling them in state court. Id.; see 28 U.S.C. § 1367(c)(3). New Castle filed this timely appeal. We have jurisdiction pursuant to 28 U.S.C. § 1291.

II.

CERCLA and SARA together create two different kinds of legal actions by which parties can recoup some or all of the costs associated with clean-ups: section 107 cost recovery actions, see 42 U.S.C. § 9607(a), and section 113 contribution actions, see id. § 9613(f)(1).

Section 107 of CERCLA provides that certain enumerated parties--"potentially responsible persons"--

shall be liable for ... all costs of removal or remedial action incurred by the United States Government ...; [and] any other necessary costs of response incurred by any other person consistent with the national contingency plan....

Id. § 9607(a). ² Cost recovery actions are generally subject to a six-year statute of limitations. Id. § 9613(g)(2).

Section 113 of SARA provides that "[a]ny person may seek contribution from any other person who is liable or potentially liable under [section 107], during or following any civil action under [section 107]." Id. § 9613(f)(1). "No action for contribution for any response costs or damages may be commenced more than 3 years after ... the date of ... entry of a judicially approved settlement with respect to such costs or damages." Id. § 9613(g)(3).

The primary question in this appeal is whether New Castle's action against NUS is a cost recovery action or a contribution action. If it is a cost recovery action, it is timely; if it is a contribution action and we do not apply the discovery rule or equitable tolling, the action is not timely. We exercise plenary review over the district court's interpretation of the relevant CERCLA and SARA provisions.

Every court of appeals that has examined this issue has come to the same conclusion: a section 107 action brought for recovery of costs may be brought only by innocent parties that have undertaken clean-ups. An action brought by a potentially responsible person is by necessity a section 113 action for contribution. See Redwing Carriers, Inc. v. Saraland Apartments, 94 F.3d 1489, 1496 (11th Cir.1996); United States v. Colorado & Eastern R.R. Co., 50 F.3d 1530, 1536 (10th Cir.1995); United Technologies Corp. v. Browning-Ferris Indus., Inc., 33 F.3d 96, 99 (1st Cir.1994); Akzo Coatings, Inc. v. Aigner Corp., 30 F.3d 761, 764 (7th Cir.1994); see also Amoco Oil Co. v. Borden, Inc., 889 F.2d 664, 672 (5th Cir.1989). We agree with the conclusion reached by our sister courts.

A section 107 cost recovery action imposes strict liability on potentially responsible persons for costs associated with hazardous waste clean-up and site remediation. United States v. Alcan Aluminum Corp., 964 F.2d 252, 259 (3d Cir.1992); see also United States v. CDMG Realty Co., 96 F.3d 706, 712 (3d Cir.1996); Colorado & Eastern, 50 F.3d at 1535 ("it is now well settled that § 107 imposes strict liability on [potentially responsible persons]"); Tippins Inc. v. USX Corp., 37 F.3d 87, 92 (3d Cir.1994); H.R.Rep. No. 99-253(I), at 74 (1985), reprinted in 1986 U.S.C.C.A.N. 2835, 2856 ("liability under CERCLA is strict, that is, without regard to fault or willfulness"). ³

In general, a section 107 cost recovery action also imposes joint and several liability on potentially responsible persons. Alcan Aluminum, 964 F.2d at 268; see also Rumpke of Indiana, Inc. v. Cummins Engine Co., Inc., 107 F.3d 1235, 1240 (7th Cir.1997); Colorado & Eastern, 50 F.3d at 1535 ("It is also well settled that § 107 imposes joint and several liability on [potentially responsible persons] regardless of fault."); United Technologies, 33 F.3d at 100 (recognizing "presumed existence of joint and several liability"); United States v. Rohm & Haas Co., 2 F.3d 1265, 1280 (3d Cir.1993). ⁴

If New Castle is correct, a potentially responsible person found liable under section 107 could bring a section 107 action against another potentially responsible person and could recoup all of its expenditures regardless of fault. ⁵ This strains logic. "[I]t is sensible to assume that Congress intended only innocent parties--not parties who were themselves liable--to be permitted to recoup the whole of their expenditures." United Technologies, 33 F.3d at 100.

In contrast, the term "contribution" is a standard legal term that refers to a claim "by and between jointly and...