Home » Case Summaries » 2017 » Asarco LLC v. Atlantic Richfield Co., 866 F.3d 1108 (9th Cir. 2017).


Asarco LLC v. Atlantic Richfield Co., 866 F.3d 1108 (9th Cir. 2017).


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In 2012, Asarco LLC (Asarco) brought an action for contribution against Atlantic Richfield Company (Atlantic Richfield) for cleanup costs ordered by the United States Environmental Protection Agency (EPA) under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).[1] The United States District Court for the District of Montana granted summary judgment for Atlantic Richfield, holding that Asarco’s contribution claim was time barred.[2] The district court found that Asarco entered into a settlement agreement with the United States under the Resource Conservation and Recovery Act (RCRA)[3] in 1998, which triggered the three-year statute of limitations for bringing a contribution claim under CERCLA. The United States Court of Appeals for the Ninth Circuit reviewed the district court’s grant of summary judgment de novo. After ruling on three matters of first impression, the Ninth Circuit vacated and remanded, concluding that Asarco’s claim was timely.

This case arose out of the contamination of the East Helena Superfund Site (the Site), an industrial area located in Lewis and Clark County, Montana. Asarco operated a lead smelter plant at the Site from 1888 until 2001, which resulted in the discharge of toxic compounds into the air, soil, and water. Atlantic Richfield’s predecessor operated a nearby zinc fuming plant from 1927 to 1972. In the late 1980s, after adding the Site to the National Priories List under CERCLA, EPA identified Asarco and Atlantic Richfield’s predecessor as potentially responsible parties (PRPs) for the contamination. EPA sought contribution only from Asarco.

In 1998, the United States brought claims against Asarco for civil penalties and injunctive relief under RCRA and the Clean Water Act (CWA).[4] Asarco settled the case with the United States. This settlement agreement (1998 RCRA Decree) assessed civil penalties against Asarco and also required Asarco to take remedial actions. However, Asarco failed to meet its cleanup obligations under the 1998 RCRA Decree and subsequently filed for bankruptcy in 2005. The United States and Montana filed proofs of claim in the bankruptcy proceeding, asserting joint and several liability claims under CERCLA. In 2009, the bankruptcy court entered a consent decree under CERCLA (CERCLA Decree) between Asarco, the United States, and Montana. Under the agreement, Asarco paid $99.294 million, which fully resolved and satisfied Asarco’s obligations under the 1998 RCRA Decree.

In 2012, Asarco brought this action against Atlantic Richfield pursuant to CERCLA § 113(f)(3)(B),[5] seeking contribution for its financial liability under the CERCLA Decree. Atlantic Richfield filed a motion for summary judgment, arguing that the 1998 RCRA Decree triggered the three-year statute of limitations under § 113. The district court entered summary judgment for Atlantic Richfield,[6] concluding that the plain language of § 113(f)(3)(B) does not require settlement agreements to be entered into under CERCLA. Therefore, the 1998 RCRA Decree triggered the statute of limitations because it required a response action and Asarco incurred response costs as a result.

The Ninth Circuit addressed three novel issues. First, whether a settlement agreement entered into under an authority other than CERCLA may give rise to a CERCLA contribution action. Second, whether a corrective measure under RCRA qualifies as a response action under CERCLA. Third, what it means for a party to resolve its liability in a settlement agreement, as a precondition for bringing a contribution action under CERCLA § 113(f)(3)(B).

On the first issue, the Ninth Circuit began with the language of the statute to determine whether CERCLA § 113(f)(3)(B) applies to non-CERCLA settlement agreements. The Ninth Circuit first observed that the plain text requires an administrative or judicially approved settlement to impose a “response” action. While a response action is a statutorily defined term, it is not clearly a CERCLA-exclusive term. Further, while settlement agreements must be “administratively or judicially approved,” the text says nothing about whether the agreement must settle CERCLA claims in particular. Expanding its analysis to the broader context of the statute, the Ninth Circuit observed that the companion provision, § 113(f)(1), expressly requires a CERCLA predicate.[7] Section 113(f)(1) allows PRPs to seek contribution from other PRPs during or following civil actions brought under CERCLA §§ 106 or 107(a) specifically.[8] Since Congress expressly required a CERCLA predicate in the companion provision but not in § 113(f)(3)(B), the Ninth Circuit concluded that Congress intended no such predicate in the latter.[9] The Ninth Circuit therefore held that a non-CERCLA settlement agreement may form the necessary predicate for a contribution action under CERCLA § 113(f)(3)(B).[10]

Second, the Ninth Circuit determined that the 1998 RCRA Decree required Asarco to take “response” actions within the meaning of CERCLA § 113(f)(3)(B). The Ninth Circuit found that the agreement clearly required Asarco to take “response” actions to clean up hazardous waste. The 1998 RCRA Decree specifically required Asarco to take “corrective action,” which RCRA expressly defines as a type of “response measure.”[11]

Third, the Ninth Circuit determined whether Asarco had resolved its liability under the 1998 RCRA Decree, which is the final condition necessary for triggering a contribution action under § 113(f)(3)(B). On this issue, Asarco argued that the 1998 RCRA Decree did not resolve its liability.[12] In addressing this argument, the Ninth Circuit analyzed at length what it means for a party to “resolve its liability” within the meaning of § 113(f)(3)(B). Beginning with the plain text of the statute, the Ninth Circuit reasoned that the common dictionary definitions of “resolve” imply an element of finality.

However, the Ninth Circuit observed that the question of whether liability may be resolved with the requisite degree of finality by a settlement agreement is further complicated by statutory provisions that allow the government to preserve future enforcement actions. For example, CERCLA § 122(f) allows EPA to include a covenant not to sue in a settlement agreement, conditioned by a PRP’s completed performance.[13] Further, parties to settlement agreements often expressly refuse to concede liability. The Ninth Circuit noted that the Sixth Circuit and Seventh Circuit decided the reservation of rights in this context should be weighed against findings that a party has resolved its liability. Observing inconsistencies in the case law, however, the Ninth Circuit adopted a different approach. The court held that for a party to resolve its liability, the settlement agreement must determine a PRP’s compliance obligations with “certainty and finality.”[14] Further, the resolution of liability is not defeated by the government’s preservation of rights to reserve future enforcement actions, covenants not to sue, releases from liability that are conditioned on completed performance, or a PRP’s refusal to concede liability.[15]

Applying this test to the facts of the case, the Ninth Circuit determined that the 1998 RCRA Decree failed to resolve Asarco’s liability for any of its response actions or costs. First, although the 1998 RCRA Decree contained a release from liability, that release was expressly limited to the government’s claim for civil penalties and did not cover response actions mandated by the agreement. Second, the 1998 RCRA Decree contained numerous references to Asarco’s continued legal exposure. Finally, the 1998 RCRA Decree expressly provided that Asarco would not be released from liability under CERCLA, even if Asarco fully complied with the agreement. Thus, the Ninth Circuit held that Asarco could not have brought a contribution action pursuant to the 1998 RCRA Decree, and therefore, the statute of limitations did not run with that decree.

In its consideration of the 2009 CERCLA Decree, however, the Ninth Circuit held that Asarco had resolved its liability.[16] The CERCLA Decree set forth a covenant not to sue that was effective immediately and covered all of Asarco’s response obligations. The covenant further provided that Asarco was released from liability for all response obligations under prior settlements, including the corrective measures under the RCRA Decree, so long as Asarco funded the custodial trust accounts for the cleanup of the Site.[17] The CERCLA Decree also had not reserved the right to hold Asarco liable under any authority with respect to then-existing contamination, beyond its obligations under the decree, and capped Asarco’s total financial obligations for past contamination. Lastly, the CERCLA Decree protected Asarco against contribution actions by non-settling parties. Under CERCLA § 113(f)(2), contribution protection applied only to parties that had resolved liability pursuant to a settlement agreement, providing further evidence that Asarco had resolved its liability.[18] Since the CERCLA Decree constituted a firm decision with the requisite degree of finality about Asarco’s liability, the court found Asarco had resolved its liability under that agreement.

In sum, because Asarco met the three-year statute of limitations deadline in filing the action, the CERCLA Decree imposed response actions and costs, and the CERCLA Decree resolved Asarco’s liability, the Ninth Circuit held that Asarco’s contribution action was timely. It therefore remanded to the district court for further proceedings to determine whether Atlantic Richfield must pay contribution to Asarco. The Ninth Circuit also established a new test for determining whether a settlement agreement has resolved a party’s liability within the meaning of CERCLA § 113(f)(B)(3), finding this to be so where a settlement agreement decides “with certainty and finality” a PRP’s obligations for response actions. Neither covenants not to sue, releases from liability, nor a settling party’s refusal to concede liability undermine the resolution.


Footnotes    (↵ returns to text)

  1. Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. §§ 9601–9675, 9613(f)(3)(B) (2012).
  2. Asarco LLC v. Atl. Richfield Co., 73 F. Supp. 3d 1285, 1286 (D. Mont. 2014).
  3. Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§ 6901–6992k (2012) (amending Solid Waste Disposal Act, Pub. L. No. 89-272, 79 Stat. 992 (1965)).
  4. Federal Water Pollution Control Act, 33 U.S.C. §§ 1251–1387 (2012).
  5. 42 U.S.C. § 9613(f)(3)(B).
  6. Asarco LLC, 73 F. Supp. 3d at 1286.
  7. 42 U.S.C. § 9613(f)(1).
  8. Id.
  9. The Ninth Circuit further reasoned that this interpretation is consistent with CERCLA’s broad remedial purpose, which is to expedite the settlement and cleanup process. An interpretation which would undercut a private party’s incentive to settle would defeat this purpose without any possible benefit.
  10. The Ninth Circuit noted that this interpretation aligns with the EPA’s own view that non-CERCLA claims fit within § 113(f)(3)(B) so long as the settlement involves a cleanup activity that qualifies as a response action. Niagara Mohawk Power Corp. v. Chevron, U.S.A., Inc., 596 F.3d 112, 126 n.15 (2nd Cir. 2010).
  11. 42 U.S.C. § 6928(h) (2012).
  12. Atlantic Richfield contended that Asarco waived this argument by not raising it in the district court. The Ninth Circuit acknowledged that Asarco failed to raise the issue in the district court, but reached the issue in order to prevent a miscarriage of justice and further because the issue presented was purely one of law.
  13. 42 U.S.C. § 9622(f)(3) (2012).
  14. Asarco LLC v. Atl. Richfield Co., 866 F.3d 1108, 1125 (9th Cir. 2017).
  15. The court reasoned that if a covenant not to sue negates resolution of liability, then it is unlikely that a settlement agreement could ever resolve a party’s liability. Moreover, this approach is consistent with congressional intent. The court cited legislative history in which the House had expressed an intent to authorize EPA to preserve future enforcement actions in crafting settlements. A PRP’s refusal to concede liability also does not defeat CERCLA’s purpose in encouraging prompt settlements, so long as the PRP commits to taking action. Conversely, requiring PRPs to concede liability in order to establish finality would discourage PRPs from entering into settlements.
  16. On this issue, Asarco argued that the CERCLA Decree unequivocally resolved its liability for all of its response costs. Atlantic Richfield contended that the CERCLA Decree merely served as a funding mechanism for Asarco’s pre-existing commitments under the 1998 RCRA Decree. Therefore, Atlantic Richfield argued, holding that Asarco’s contribution claim was timely would be unjust because it would essentially allow Asarco to incur cleanup obligations, sit on its rights, and then pursue a stale claim through bankruptcy. While the Ninth Circuit sympathized with Atlantic Richfield’s position, it could not agree with Atlantic Richfield’s conclusion. That Asarco was liable under RCRA did not change the fact that the agreement did not give rise to a right of contribution under CERCLA.
  17. Asarco asserted that it did in fact fund the trust accounts and Atlantic Richfield conceded that point.
  18. 42 U.S.C. § 9613(f)(2).
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