Supreme Court Overturns U.S. Government's Effort to Insulate Navy from Liability to Territory of Guam for Landfill Cleanup

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[author: Edward Mahaffey, Law Clerk]

On May 24, 2021, in an opinion written by Justice Thomas, a unanimous Supreme Court ruled that Guam’s lawsuit against the US Navy was not barred by CERCLA, thus restoring the Territory’s claim for recovery of costs to remediate a dumpsite the Navy had created, operated and used beginning in the 1940s.

In the case of Guam v. United States, Guam had sued the Navy in 2017 seeking cost recovery under CERCLA section 107. Alternatively, Guam sought contribution from the Navy under CERCLA section 113(f). The federal government countered that a 2004 Clean Water Act (CWA) settlement with U.S. EPA requiring that Guam pay a civil penalty, and close and cover the landfill, had resolved Guam’s liability for a CERCLA response action under section 113(f)(3)(B), thus limiting Guam to a contribution claim as its exclusive remedy under CERCLA. The government further asserted that Guam’s contribution claim was time-barred by a three-year statute of limitations and sought dismissal of the case.

On interlocutory appeal, the D.C. Circuit agreed with the federal government that a party who may bring a contribution claim for certain expenses must exclusively pursue that action, even if a cost recovery claim would otherwise be available. The court determined that the CWA settlement had "resolve[d] Guam’s liability for some…of a response action within the meaning of CERCLA section 113(f)(3)(B), triggering that section and precluding Guam from seeking cost recovery under section 107." Having found that Guam’s cause of action for contribution expired in 2007, the D.C. Circuit reversed and remanded with instructions to dismiss Guam’s complaint.

The Supreme Court granted Guam’s writ of certiorari to address the question, as Justice Thomas wrote for the Court, "whether a party must resolve a CERCLA-specific liability in order to trigger this [contribution] right, or whether a broader array of settlements involving environmental liability will do." The Supreme Court took the former view, "hold[ing] that CERCLA contribution requires resolution of a CERCLA-specific liability."

As the Court pointed out, a "contribution suit does not exist in a vacuum, but rather is a tool for apportioning the burdens of a predicate 'common liability' among the responsible parties." Moreover, "the familiar principle that a federal contribution action is virtually always a creature of a specific statutory regime…is difficult to reconcile with the United States’ invitation to treat §113(f )(3)(B) as a free-roving contribution right for a host of environmental liabilities arising under other laws." Thus, Guam’s position that a party may seek contribution under CERCLA only after settling a CERCLA-specific liability was "[t]he most natural reading of §113(f)(3)(B)." In light of its finding that EPA’s CWA consent decree with Guam was not a settlement of a "CERCLA-specific liability," the Court reversed the D.C. Circuit’s favorable judgment for the government.

The Supreme Court’s decision will enable Guam to pursue its cost recovery claim against the Navy under CERCLA section 107, which provides a six-year statute of limitations that has not yet expired. The parties also may seek to negotiate an appropriate allocation of the $160 million estimated cleanup. If not, the trial court will make that decision.

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.

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