Home » Case Summaries » 1997 » Pinal Creek Group v. Newmont Mining Corp.

 
 

Pinal Creek Group v. Newmont Mining Corp.

 

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Three mining companies collectively known as the “Pinal Creek Group” engaged in the voluntary cleanup of the Pinal Creek Drainage Basin near the towns of Globe and Miami, Arizona. In 1991, the Pinal Creek Group filed suit against other potentially responsible parties (PRPs), bringing cost recovery and contribution actions under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA).[1] The defendants moved to dismiss the claims, which sought to impose on them joint and several liability for all response costs incurred by the Pinal Group, but the district court denied the motion. However, the court certified its order for an immediate interlocutory appeal. The Ninth Circuit granted the petition and reversed the lower court’s denial of the motion to dismiss.

The Ninth Circuit reviewed the district court’s interpretation of CERCLA de novo. On appeal, the Ninth Circuit held that section 107 is the source of CERCLA liability, while section 113 creates a mechanism for apportioning that liability among responsible parties. Thus, a PRP’s claim for recovery of cleanup costs is necessarily one for contribution, and that party’s liability will correspond to its equitable share of the total liability. The court acknowledged that the statutory text creates a duality by first making a PRP liable for its cleanup costs, and then allowing “any other person” to hold other PRPs liable for those same costs. The court concluded that this duality should be implemented by permitting a PRP who has incurred cleanup costs to assert only a contribution claim against other PRPs. The court found support for this conclusion by examining the legislative history behind section 113(f), which includes comments that Congress, in enacting the provision, was only confirming and clarifying an existing claim for contribution.[2] The court also noted that even before Congress enacted section 113(f), most courts had held that section 107 implicitly incorporates a claim for contribution.[3] Further, the Supreme Court and five federal circuits have reached similar conclusions that a CERCLA claim among PRPs is necessarily one for contribution.[4] At the least, other courts have held that a PRP conducting cleanup operations can not avoid the effects of section 113(f), including its delay, burden of proof rules, statute of limitations, and equitable allocation of orphan shares.[5]

Practically speaking, the Ninth Circuit pointed out that if it holds a group of defendant-PRPs jointly and severally liable, that group would end up absorbing all of the costs attributable to orphan shares (shares attributable to PRPs who are insolvent or cannot be located or identified). This would substantially restrict the court’s ability to apportion costs equitably among all PRPs. In contrast, under section 113(f)(1), the court can equitably distribute the costs of orphan shares among all PRPs, as is done with cleanup costs.[6]

In addition, the court expressed concern that even a modified rule of joint and several liability of defendant-PRPs (where orphan shares are borne equally) would result in a chain reaction of multiple and unnecessary lawsuits. Such an approach, in its view, would guarantee inefficiency, potential duplication, and prolonged litigation. Finally, the court rejected policy considerations of promoting rapid and voluntary environmental responses by private parties in light of the test, structure, and logic of CERCLA, and the precedent set in In re Dant & Russell, Inc.,[7] a case in which the Ninth Circuit held that a PRP could only assert a claim of contribution. The court also named other incentives for PRPs to promptly conduct cleanup operations, namely, maintaining ongoing operations and asserting control over cleanup costs. Thus, the Ninth Circuit rejected joint and several liability for PRPs and reversed the district court’s holding that PRPs could assert cost recovery actions other than those for contribution.


[1]42 U.S.C. §§ 9601-9675 (1994).

[2]See H.R. Rep. No. 99-253 pt. 3, at 18-19 (1985), reprinted in 1986 U.S.C.C.A.N. 3038, 3041; S. Rep. No. 99-11, at 43 (1985); United Tech. Corp. v. Browning-Ferris Indus., Inc., 33 F.3d 96 (1st Cir. 1994) (citing to the extensive legislative history).

[3]See, e.g., Key Tronic Corp. v. United States, 511 U.S. 809, 814-15 (1994); United Tech. Corp., 33 F.3d at 100; Mardan Corp. v. C.G.C. Music, Ltd., 804 F.2d 1454, 1457 n.3 (9th Cir. 1986).

[4]See Key Tronic Corp., 511 U.S. at 818 n.11; United Tech. Corp., 33 F.3d at 99 n.8, 100; New Castle County v. Halliburton NUS Corp., 111 F.3d 1116, 1120 (3d. Cir. 1997); Redwing Carriers, Inc. v. Saraland Apartments, 94 F.3d 1489, 1496 (11th Cir. 1996); United States v. Colorado & E. R.R. Co., 50 F.3d 1530, 1536 (10th Cir. 1995); Amoco Oil Co. v. Borden, Inc., 889 F.2d 664, 672-73 (5th Cir. 1989).

[5]See Akzo Coatings, Inc. v. Aigner Corp., 30 F.3d 761, 764 (7th Cir. 1995) and Colorado & E.R.R., 50 F.3d 1534, 1534-36 (10th Cir. 1995) (rejecting a working PRP’s attempt to hold another PRP liable who had settled with the government by arguing that section 113(f)(2) did not apply because their claim was for “cost recovery” under section 107, not for “contribution” under section 113(f)).

[6]In footnote 4, however, the court conceded that in equitably allocating responsibility, courts can consider the fact that a PRP has itself engaged in cleanup efforts.

[7] 951 F.2d 246 (9th Cir. 1991).

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