CERCLA’s Three Year Statute of Limitations for Contribution Applies To Non-CERCLA Settlements

Parties which settle environmental liability in a judicially approved settlement have three years from the date of that settlement in which to seek contribution even if the settlement is not a CERCLA settlement.  That is the holding in a recent federal case in Montana, ASARCO LLC v. Atlantic Richfield Company.  There, ASARCO had entered into a 1998 consent decree under RCRA and the Clean Water Act to remediate a contaminated site that for over a century had been used as a lead smelting facility.  In 2005 ASARCO filed for bankruptcy and in 2009 entered into a new settlement, this time said to be a CERCLA settlement, to pay almost $100 million to remediate the lead smelting site.

When ASARCO sought contribution under its CERCLA settlement against another PRP which had also conducted operations on the site, that other PRP claimed that those contribution claims  were barred by CERCLA’s three year statutue of limitation since the 2009 CERCLA settlement imposed no different obligations than those in the 1998 non-CERCLA settlement.   The court agreed.   In a well-reasoned decision, the court found that the contribution claim was time-barred, rejecting ASARCO’s argument that its CERCLA contribution claim could only have arisen from a judicially approved CERCLA settlement.  Acknowledging that there was a split between the Second and Third Circuits,  the court found that contribution claims under Section 113(f)(1) of CERCLA were not limited to settlements that resolved only CERCLA liability.  As the  the court explained, the language of Section 113(f)(1) is not limited to CERCLA settlements but applies whenever a party’s liability for “response actions” is resolved in a judicially approved settlement.  Given that Section 113(f)(1) speaks of resolving “liability” in contrast to Section 107(a) which speaks of “CERCLA liability”, the court concluded that Congress had not intended to restrict contribution under Section 113(f)(1) to only CERCLA settlements.

Plainly, this decision may produce statute of limitations problems for settling parties who delay for more than three years in asserting their contribution claims.   In the end, though, the decision has the salutary effect of establishing that a party which settles its environmental liability under state Superfund laws or under federal environmental statutes other than CERCLA can still pursue contribution under Section 113(f)(1) of CERCLA.

 

Topics:  CERCLA, Consent Decrees, Contribution Claims, Environmental Liability, Judicial Settlement Agreements, Statute of Limitations

Published In: Civil Procedure Updates, General Business Updates, Environmental Updates, Commercial Real Estate Updates, Toxic Torts Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Foley Hoag LLP - Environmental Law | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »