Solutia, Inc. v. McWane, Inc.

• Decision Date: 06 March 2012
• Docket Number: No. 10–15639.,10–15639.
• Citation: 672 F.3d 1230,23 Fla. L. Weekly Fed. C 819
• Parties: SOLUTIA, INC., Pharmacia Corporation, Plaintiffs–Counter–Defendants–Appellants, v. McWANE, INC., aka Union Foundry, aka M & H Valve, United States Pipe and Foundry Company, Inc., Meadwestvaco Corporation, fka Mead Corporation, fka Union Foundry, fka Woodward Iron, fka Alabama Pipe Company, fka Lynchburg Foundry, fka Standard Foundry, fka Anniston Foundry, FMC Corporation, fka Kilby Steel, United Defense, LP, et al., Defendants–Counter–Claimants–Appellees,Huron Valley Steel Corporation, Tull Chemical Company, Inc., Ransom Industries, Defendants–Appellees,US Castings, et al., Defendants.
• Court: U.S. Court of Appeals — Eleventh Circuit

23 Fla. L. Weekly Fed. C 819

672 F.3d 1230

SOLUTIA, INC., Pharmacia Corporation, Plaintiffs–Counter–Defendants–Appellants,

v.McWANE, INC., aka Union Foundry, aka M & H Valve, United States Pipe and Foundry Company, Inc., Meadwestvaco Corporation, fka Mead Corporation, fka Union Foundry, fka Woodward Iron, fka Alabama Pipe Company, fka Lynchburg Foundry, fka Standard Foundry, fka Anniston Foundry, FMC Corporation, fka Kilby Steel, United Defense, LP, et al., Defendants–Counter–Claimants–Appellees,Huron Valley Steel Corporation, Tull Chemical Company, Inc., Ransom Industries, Defendants–Appellees,US Castings, et al., Defendants.

No. 10–15639.

United States Court of Appeals, Eleventh Circuit.

March 6, 2012.

Mark G. Arnold, Michael K. Alston, William J. Curtis, Uyless M. Dewberry, Jr., Jason A. Flower, Megan Paletta Fuchs, Charles Ron Hobbs, II, Richard P. Jacobs, Charles E. Merrill, Joseph G. Nassif, Alan E. Popkin, John Terry, Michael H. Wetmore, Husch Blackwell LLP, Saint Louis, MO, Ryan W. Mitchem, Husch, Blackwell, Sanders, LLP, Chattanooga, TN, J. Mark White, White, Arnold & Gowd, PC, Birmingham, AL, for Plaintiffs–Counter–Defendants–Appellants.

Michael D. Freeman, Steven G. McKinney, Balch & Bingham, LLP, John Winston Scott, Scott, Dukes & Geisler, PC, Alfred F. Smith, Jr., Bainbridge, Mims, Rogers & Smith, LLP, Jarred O. Taylor, II, E. Bryan Nichols, John Alan Truitt, D. Bart Turner, H. Thomas Wells, Jr., Christopher James Williams, Maynard, Cooper & Gale, PC, Charles E. Sharp, Joel Alan Williams, Friedman, Leak, Dazzio, Zulanas & Bowling, PC, Eddie Leitman, Lynne Stephens O'Neal, Jim H. Wilson, Leitman, Siegal Payne & Campbell, PC, Richard Eldon Davis, Starnes, Davis, Florie, LLP, Kimberly Wood Geisler, Josua S. Thompson, Scott Dukes & Geisler, PC, Mark T. Waggoner, Hand Arendall, LLC, Birmingham, AL, Douglas S. Arnold, Sarah T. Babcock, Meaghan Goodwin Boyd, Shelly Jacobs Ellerhorst, Jody M. Rhodes, Beverlee Ellen Silva, Alston & Bird, LLP, Robert Mowrey, Mowrey, Meezan, Coddington, Cloud, LLP, Douglas, A. Henderson, Jeffrey J. Hayward, Lynette Eaddy Smith, Troutman Sanders, LLP, Atlanta, GA, Wendlene M. Lavey, James Van Carson, Lianne Renae Mantione, Christopher D. Thomas, Squire, Sanders & Dempsey (US), LLP, Cleaveland, OH, C.E. Isom, Isom & Stanko, LLC, Anniston, AL, John Patrick Elwood, Kevin A. Gaynor, Benjamin Scott Lippard, Vinson & Elkins, LLP, Michael Bailey Heister, John Barton Seitz, Steven L. Leifer, Baker Botts, LLP, Michael D. Goodstein, Stacey H. Myers, Hunsucker, Goodstein & Nelson, PC, Washington, DC, Robert Schick, Vinson & Elkins, LLP, Houston, TX, Jack D. Shumate, Angela Boufford, Karen Mysliwiec Pilat, Butzel Long, PC, Bloomfield Hills, MI, for Defendants–Counter–Claimants–Appellees.

Nicholas DiMascio, U.S. Dept. of Justice, Environment & Natural Res. Div., Washington, DC, for Amici Curiae.Appeal from the United States District Court for the Northern District of Alabama.Before MARTIN, HILL and EBEL,^* Circuit Judges.PER CURIAM:

Plaintiffs–Appellants Solutia, Inc. and Pharmacia Corporation (Solutia & Pharmacia) appeal the District Court's grant of summary judgment against their claims under § 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).¹ Solutia & Pharmacia also appeal the District Court's denial of their Federal Rule of Civil Procedure 59(e) motion to clarify or amend the summary judgment order. The appeal requires this Court to decide, as a matter of first impression, whether parties subject to a consent decree may file claims for cost recovery under § 107(a) of CERCLA, or whether their remedies are limited to filing claims for contribution under § 113(f) of CERCLA.

I. BACKGROUND

As the Magistrate Judge noted in his thorough ruling granting summary judgment, “[t]his case is complex, in terms of its underlying facts, its litigation history, and the legal issues it presents.” Monsanto Company produced polychlorinated bipheyls (PCBs) at a plant near downtown Anniston, Alabama from 1929 to 1971.² Monsanto's operations caused and contributed to environmental contamination of the areas surrounding the Anniston plant. In 1997, Monsanto spun off Solutia, which now owns and operates the Anniston plant. In 2000, the merger of Monsanto and Pharmacia & Upjohn Inc. resulted in the creation of Pharmacia Corporation.

In 2002, the United States Environmental Protection Agency (EPA) filed a cleanup enforcement action under CERCLA in the District Court for the Northern District of Alabama against Solutia & Pharmacia (the Enforcement Case). The EPA and Solutia & Pharmacia resolved the Enforcement Case in August 2003 by entering into a Partial Consent Decree (PCD), which imposed joint and several obligations on the companies to finance and perform specified cleanup operations. The PCD and its incorporated documents referenced two areas of contamination that are the subject of this appeal—the “Anniston PCB Site” and the “Anniston Lead Site.” The PCD reserved the right of Solutia & Pharmacia to seek contribution from other potentially responsible parties (PRPs) ³ for cleanup costs associated with the Anniston Lead Site.⁴

Nearly two years after the District Court approved the PCD, the EPA entered into a separate CERCLA settlement agreement with the Foothills Community Partnership. The settlement required the Partnership to reimburse the EPA for its past and future costs in cleaning up lead contamination in the Anniston area. Almost all Defendants in the present appeal (“Settling Defendants”), with the exception of Southern Tool LLC and Scientific Atlanta (“Non–Settling Defendants”), were parties to this CERCLA settlement.

Solutia & Pharmacia believed that the EPA's settlement with the Partnership undermined their right, as delineated in the PCD, to seek contribution from other potentially responsible parties for cleanup costs relating to the Anniston Lead Site. Seeking to vindicate this position, they filed a motion in the Enforcement Case. The District Court agreed that the EPA had repudiated the PCD and indicated that, upon motion, he would suspend Solutia & Pharmacia's obligations under the consent order. However, Solutia & Pharmacia never took the District Court up on its offer, thus leaving the PCD in effect. Then, in July 2006 the EPA and Solutia & Pharmacia entered into a Stipulation Clarifying the Partial Consent Decree (Stipulation). In it, Solutia & Pharmacia agreed to clean up specified geographical areas around Anniston—Zones A, B, C, and D—including areas that involved lead contamination.

II. PROCEDURAL HISTORY

In June 2003, Solutia & Pharmacia filed this action in the District Court for the Northern District of Alabama against the Defendants–Appellees as potentially responsible parties under CERCLA. In Count I of their Amended Complaint, Solutia & Pharmacia asserted claims for contribution under § 113(f) of CERCLA (codified as 42 U.S.C. § 9613(f)) for cleanup costs incurred at the Anniston Lead Site and Anniston PCB Site. In Count II, Solutia & Pharmacia asserted claims for recovery under § 107(a) of CERCLA (codified as 42 U.S.C. § 9607(a)) for cleanup costs incurred at the Anniston Lead Site only.

The Settling Defendants moved for summary judgment on the § 107(a) recovery and § 113(f) contribution claims. Southern Tool and Scientific Atlanta, the Non–Settling Defendants, moved for summary judgment only on the § 107(a) recovery claims. In June 2008, the Magistrate Judge granted Settling Defendants summary judgment on Count I—the § 113(f) contribution claims—because the claims were precluded under § 113(f)(2), which provides, “[a] person who has resolved its liability to the United States or a State in an administrative or judicially approved settlement shall not be liable for claims for contribution regarding matters addressed in the settlement.” 42 U.S.C. § 9613(f)(2). As to Count II, the Judge ruled that Solutia & Pharmacia were entitled to proceed against all Defendants on claims seeking cost recovery under § 107(a) with regard to the Anniston Lead Site.

However, after the Defendants filed motions to reconsider in December 2009, the Magistrate Judge vacated his prior order and entered summary judgment against Solutia & Pharmacia on their § 107(a) claims in July 2010. The Judge based his July 2010 order on cases decided in the wake of United States v. Atlantic Research Corp., 551 U.S. 128, 127 S.Ct. 2331, 168 L.Ed.2d 28 (2007), as well as the July 2006 Stipulation between the EPA and Solutia & Pharmacia, which had not been presented to the Court at the time of its June 2008 order. The Judge ruled that because the PCD and the Stipulation granted Solutia & Pharmacia contribution rights under § 113(f) for certain costs, they could not choose to bring their claims under § 107(a) for those same costs.

Solutia & Pharmacia filed a Rule 59(e) motion to clarify or amend the July 2010 order, requesting that the Magistrate Judge reinstate their § 107(a) claims for response costs that they had incurred prior to entry of the Partial Consent Decree. The Judge denied the motion, because Solutia & Pharmacia relied on arguments in their Rule 59(e) motion that they had not previously raised.

III. SOLUTIA & PHARMACIA'S § 107(a) CLAIMS

Solutia & Pharmacia argue that the Magistrate Judge erred, because the plain language of CERCLA allows them to recover cleanup costs that they directly incurred, even if those costs are the subject of a consent decree between them and the EPA.

Whether § 107(a) of CERCLA grants parties a right to recover cleanup costs that they directly incur in complying with a consent decree is a matter of statutory interpretation subject to de novo review. United States v. Murrell, 368 F.3d 1283, 1285 (11th Cir.2004).

At the center of this dispute are two CERCLA provisions—§ 107(a) and § 113(f) (codified as 42 U.S.C. §§ 9607(a), 9613(f)). The United States Supreme Court has explained in two recent decisions that each...