In this article, Professor Alfred R. Light examines the history of the superfund law, concluding that Congress did not intend to create contribution claims and counterclaims separate from the original cost recovery action. While the government continues to assert that parties compelled to conduct a cleanup are limited to a contribution claim under CERCLA Sec. 113, Professor Light says the legislative history shows that Congress meant to allow a defendant in a cost recovery action to reduce the plaintiff's recovery by an equitable share if the plaintiff is shown to be liable. This, the author says, applies to all parties, including the government as plaintiff or potentially responsible party.By Alfred R. Light
Alfred R. Light is a professor of law at the St. Thomas University School of Law, Miami Gardens, Florida, and a member of the Board of Advisors of Toxics Law Reporter. He can be reached at firstname.lastname@example.org.
InUnited States v. Atlantic Research Corp.,1 Justice Thomas stated that a way for the U.S. Government as a defendant in a private CERCLA cost recovery action to keep cleanup costs incurred by the original plaintiff who is also a potentially responsible party on that plaintiff is to file a “§ 113(f) [contribution] counterclaim.”2 As we explain below, this is a contradictio in adjecto.3 Like “square circle,” “deafening silence,” “boiling snow,” “hard liquid,” and the Germanic “wooden iron,” a contribution counterclaim is a contradiction in terms, a logical inconsistency, in short an oxymoron.4 There is no such thing as a contribution counterclaim under the Federal Rules of Civil Procedure.5 This is true for a CERCLA cost recovery claim as well as any other claim brought “in accordance with the Federal Rules of Civil Procedure.”6 In any event, as we also show below, the legislative history of the Superfund Amendments and Reauthorization Act (SARA) plainly indicates that CERCLA is supposed to follow the Federal Rules of Civil Procedure with respect to contribution claims. As a result, even if the Government's partial defense to a private PRP's cost recovery claim is viewed as a counterclaim, it is a compulsory counterclaim that must be asserted in the PRP's private cost recovery action or is forever barred.
CERCLA decisions and commentators have been confusing three different types of assertions that a defendant may present in an Answer to a plaintiff's complaint stating claims for the recovery of response costs under CERCLA.7
First, a defendant may make assertions about the plaintiff's own responsibility for the costs the plaintiff has incurred as a means to reduce or eliminate the defendant's liability to the plaintiff for the very costs which the plaintiff asserts in its complaint against that defendant. This first type of assertion by the defendant really is not a counterclaim at all within the meaning of the Federal Rules. It is not a “claim for relief” within the meaning of Rule 8(a).8
It is instead an affirmative defense, either total or partial. In an early private cost recovery case against the Government, a district court explained, [A] counterclaim for indemnity or contribution is illogical. For example, if A sues B, A has the burden of proving B's liability and the amount thereof in A's case in chief. B, in its defense, might show limitations on its liability or amount thereof. As a result, in the trial on A's complaint against B, the relative responsibility for A's loss will be litigated. If B counterclaimed against A for indemnity or contribution, B would be making a claim against A to shift to or share with A any loss B incurs as a result of A's suit against B. However, any basis that could exist for B's counterclaim must be litigated on A's complaint and B's defenses thereto. As a result, any shifting or sharing of the loss is litigated on A's complaint and no basis exists for B's counterclaim.9
Ordinarily there is little significance under the Federal Rules if a party mistakenly designates a defense as a counterclaim, because the Rules expressly provide that “the court must, if justice requires, treat the pleading as though it were correctly designated, and may impose terms for doing so.”10
Second, a defendant may assert claims arising out of the same transaction and occurrence, such as its own cost recovery claim for expenses incurred by the defendant in response to the same release to which the plaintiff alleges it also responded. These are claims for costs which are NOT the same costs asserted by the original plaintiff. Instead, the defendant is using its claim for its own costs in order to reduce or eliminate the claims of the plaintiff against the defendant. If the defendant's claim only reduces the amount that may be recovered by the plaintiff, these are usually called recoupment claims.11 If the defendant's claim is for an amount greater than the plaintiff's original claim, the defendant is seeking a judgment for actual recovery of the excess. In either event, the defendant's counterclaim is a compulsory counterclaim under Rule 13(a).12
Third, the defendant may assert a claim against the plaintiff which does not arise out of the same transaction or occurrence as the plaintiff's claim but nonetheless may be asserted as a permissive counterclaim under Rule 13(b) in order to reduce the plaintiff's claim. These are usually referred to as setoff claims.13
In my first-year Civil Procedure course, our discussion of contribution claims occurs almost exclusively in the portion of the class dealing with “derivative” claims under Rule 13(g), cross-claims, and Rule 14, third-party claims.14 Properly understood, contribution and indemnity claims are the type of claim where “[a] defending party” claims against one “who is or may be liable to it for all or part of the claim against it.”15 These claims are not compulsory.16 The defending party may choose to assert the claim or wait until after judgment and assert it in a separate action. The Rules say “may,” not “must” with respect to these claims.17 Rule 14 clarifies that even where such claims are asserted, “Any party may move to strike the third-party claim, to sever it, or to try it separately.”18 Such claims are logically distinct from compulsory counterclaims under Rule 13(a).
It is mostly this possibility of severance for separate trials and the entry of separate judgments on the main claim and on the related contribution claims that has led parties in CERCLA cases to mask these hornbook distinctions and to offer up oxymorons such as “contribution counterclaim” to our federal courts. Both private PRPs and the Government have deliberately masked these distinctions in the interests of their respective clients.
A couple of examples should suffice. Shortly after Atlantic Researchwas decided, this Reporter published a private attorney's analysis of the decision.19 The author complained that “the Court created a significant disincentive to settlement by holding that the § 113 contribution bar does not bar claims under § 107.”20 That is, because a PRP who partially cleans up a site voluntarily (or perhaps even under administrative compulsion under § 106) has a private § 107 claim, other liable PRPs must settle or litigate that § 107 claim with that plaintiff and cannot avoid such negotiations or litigation by settling with the Government with respect to the Government's § 107 claims at the same site. Despite acknowledging potential constitutional problems associated with providing this type of “contribution protection,”21 this PRP commentator complained of “a new level of uncertainty which PRPs will need to face and which EPA and the courts will need to address” resulting from the Court's holding that contribution protection “is now unlikely to protect settling parties from § 107 claims … since these are not contribution claims.”22
The Government seems to have encouraged PRP attorneys to consider, or at least hope, that a settlement with the Government might extinguish claims asserted by another PRP who undertakes a private cleanup. Within the terms of the statute, the theory is that somehow “a person who has resolved its liability to the United States” might extinguish “claims for contribution” beyond those contribution claims derived from the claims for costs incurred by the United States.23 The settling party's pipedream is that “matters addressed in the settlement” with the United States could include claims of other PRPs who incurred response costs at the same site unrelated to the costs incurred by the United States.24
The logic upon which such an overbroad settlement rests is a definition of “contribution” which ranges beyond the actual cost recovery claim of the United States as plaintiff. If a contribution claim were somehow broader than that claim, then the statute, if constitutional, might permit the United States to extinguish private cost recovery claims in addition to its own by addressing such claims in its settlement.25 In such an Alice in Wonderland world, absent a settlement a “contribution counterclaim” could make sense because the defendant's “contribution” counterclaim might range beyond a partial defense to the plaintiff's claim against it.
The Government's incentives to muddy the traditional definition of contribution claims go beyond its purported ability to compromise someone else's claim without the nuisance of a trial or settlement with those parties who have that claim. The additional incentives largely have to do with the availability and timing regarding the assertion of those claims. Prior to Atlantic Research, the Government broadly argued that no PRP could bring an action against any other PRP except “during or following” a lawsuit which the Government had itself brought.26 Where the Government itself was a PRP, it thus could avoid its own day of reckoning before the courts simply by not suing at a site.27 Under this interpretation, because of CERCLA’s bar on pre-enforcement judicial review, no anxious PRP was able to bring a declaratory judgment action to force the Government’s hand.28 Under the Government’s theory, EPA also had authority to settle with its potentially liable agencies (e.g., the armed forces or the Energy Department) and extinguish its own liability through interagency settlement without litigation and the above-described miracle of “contribution protection.”29 Other PRPs could only observe such machinations, even if there were sweetheart deals in which the agency paid less than its fair share.30 Even better from its point of view, because of the statute's preclusion of pre-enforcement judicial review, the Government could force PRPs to undertake cleanup through unilateral exercise of its administrative order authority, subjecting the recipient to the risk of punitive damages and daily penalties for any violation, without going to court where the terms of the order might be reviewed by an impartial judge.31
Atlantic Research should have destroyed the Government's delusions in this regard. Since a private PRP with a cost recovery claim may sue the Government as another PRP, the Government as defendant wishing to keep the costs on a private PRP plaintiff must litigate its fair allocation by bringing a “§ 113(f) counterclaim” in the PRP’s cost recovery suit.32 Even if the defendant's partial defense is denominated a “counterclaim,” as a claim derivative of the plaintiff's original claim clearly it would be a compulsory counterclaim that would have to be asserted in the plaintiff's lawsuit or lost forever under applicable principles of claim preclusion.33 When a private party decides to seek recovery of its cleanup costs, therefore, the Government PRP defendant should not be able to postpone its day of reckoning with regard to the adjudication of its own equitable share of CERCLA liability.
The Government, however, has refused to recognize these fairly obvious implications of Atlantic Research. After the decision, it continues to argue that “parties who have been 'compelled’ to perform cleanup work by the government under a consent decree or other enforcement mechanism are limited to a CERCLA § 113(f) contribution claim.”34 Under this view, a PRP, threatened but not sued by the Government, who undertakes a cleanup and then sues the Government for reimbursement has no § 107 claim. The Government explains, “The PRP does not incur its own costs of response because it is being compelled by the government to perform the cleanup. Instead, these are response costs the government has avoided by compelling performance of the PRP, thus, making those costs functionally equivalent to and legally indistinguishable from response costs reimbursed to the government by a PRP for work performed by the government.”35 In other words, the Government simply will not abandon its view that only persons who “voluntarily” undertake cleanup have a private cause of action under § 107. Apparently, in its view the Government can extinguish the private PRP's § 107 cause of action merely by threatening the PRP with suit, perhaps through a unilateral administrative order, which its does not then seek to enforce in court. In this manner, it maintains the best of both worlds--(1) cleanup by the PRP and (2) avoidance of any cost recovery responsibility properly borne by the Government itself because the PRP's § 113(f) contribution claims may only be filed “during or following” the Government's civil suit which it will never bring.36
This conflation of § 113(f) contribution claims and § 107 cost recovery claims confuses (1) defendant's assertions to reduce its share of plaintiff's costs based on the plaintiff's own liability with (2) defendant's claim to recover cleanup costs the defendant itself initially incurred. With respect to the first type of assertion, it is logically impossible to separate the plaintiff's claim from the defendant's assertion. That assertion simply relates to the amount of damages the plaintiff should be able to recover with respect to the costs it has incurred. Under the Federal Rules, the plaintiff's own liability is an issue that must be resolved as part of the calculation of the judgment for plaintiff. It is not possible to sever the issue under Rule 54(b) as a partial final judgment because the issue is a defense, not a “claim.” 37 Without resolution of the defense, the amount of damages recoverable is not certain, and there is no way partial final judgment can be entered for the plaintiff because no “claim” has been resolved.
The second matter, however, is logically distinct--whether the claim is compulsory or permissive, the defendant sues for its own costs. The latter matter is a claim that can be severed within the discretion of the trial court and for which partial final judgment may be entered under Rule 54(b).38 The Government has guarded its prerogatives under CERCLA to control the timing of the adjudication of its own cost recovery claims. In the absence of a private cost recovery action, a PRP cannot force the Government into court by seeking a declaratory judgment regarding its liability because of the preclusion of pre-enforcement judicial review under § 113(h).39 The PRP must wait for the Government to sue or for the CERCLA cost recovery statute of limitations to expire.40
Where a PRP brings a private cost recovery case against the Government, though, it is less certain whether the Government can delay its cost recovery action, even in this second situation. Rule 13(a) indicates that the defendant “must” assert its claims “arising out of the same transaction or occurrence” as the plaintiff's claim.41 Absent some argument that the Government's cleanup does not arise out of the same occurrence, e.g., a different release, the Government may have to litigate its claims before it otherwise would.42 On the other hand, once asserted, the court has the authority to sever for separate trial under Rule 42(b).43 To avoid these principles, the Government argues that CERCLA § 113(h) “supersedes Rule 13(a).”44 Under this approach, the Government maintains that its counterclaim must “be treated as if it were permissive such that the United States would be free to reassert the claim in a separate action in any event.”45 Its policy argument is that “Congress, through specific CERCLA provisions, clearly evidenced an intent for EPA to be able to be able to bring a claim for cost recovery after the completion of cleanup activities and provided the EPA with broad discretion in determining when, after cleanup, to file its claim.”46 Justice Thomas' characterization of the partial defense as a “counterclaim for contribution,” and the Government's continued conflation of cost recovery and contribution claims, has continued confusion over the opportunities for the Government to delay or defeat the hearing of claims against it under CERCLA.
This continuing struggle in CERCLA litigation suggests that we should take a closer look at the legislative history regarding CERCLA's contribution provision, added by SARA, to determine whether Congress actually intended to supersede the Federal Rules that otherwise would apply to the assertion and litigation of contribution claims.
The “legislative history” of CERCLA's contribution provision is part of the SARA amendments of 1986. The Reagan Administration in 1985 initially proposed that contribution claims must be brought in a separate action from the Government's suit. It proposed that “claims for contribution or indemnity shall be brought only after entry of judgment or date of settlement in good faith.”47 It further provided that “any defendant held liable may bring a separate action for contribution against any other person liable or potentially liable” within the meaning of CERCLA.48 It also provided that any person who “has resolved its liability to the United States or a State in a judicially approved good-faith settlement” should not be liable for claims for contribution, but that contribution claims against non-settling parties “reduces the claim against the others to the extent of any amount stipulated by the settlement.”49 In this manner, had this provision been enacted into law, the Government presumably would have been able to completely avoid having anything to do with either the newly-established contribution claims under CERCLA or indemnity claims under other law, e.g., insurance contracts. Moreover, the Government could favor with “contribution protection” those with whom it had settled by virtue of stipulations in its settlement agreements.
The Senate Environment and Public Works Committee held a hearing on February 23, 1985, the day after the Government's proposal was introduced by request. After this one day hearing, it held a three-day markup and reported the bill on March 1.50 The Committee added the Government's proposal to its Committee bill, S. 51, virtually unchanged.51 Unusually, even though the Committee had already reported the bill, it held another hearing two months later to address concerns of the domestic insurance industry about CERCLA.52 The insurance industry attacked the application of joint and several liability to minor contributors, and upon Senator Mitchell's questioning the assistant attorney general testified that the standard was not a “hard and fast rule” and that he did not believe that “we can impose liability for 100 percent of the costs on a de minimis generator.”53
As important, Mitchell pointed out to the Government the insurance industry's objections “to the amendment dealing with contribution which this committee adopted recently at the request of the administration.”54 Mitchell reported that “[t]hey contend that this provision prohibits one party from impleading another, and that this is contradictory to existing Federal Rules of Civil Procedure.”55 Mitchell confronted the assistant attorney general, demanding, “What is the explanation of this?”56 Based on the Government's responses, Mitchell, a former federal district judge, lambasted the provision, “That if the Government sues 5 or 500 parties that they feel may be responsible and sues 1 of them or 2 of them or something less than the total, those who are sued cannot, under this amendment, could not seek to bring into the process others who are equally or may be more responsible in their judgment until after the case has been tried and judgment entered.”57 Both the Justice Department witness, Assistant Attorney General Habicht, and the EPA witness, Gene Lucero, wilted under Mitchell's interrogation and admitted that the effect of the provision would encourage those not targeted by the Government “to hang out and not get sued for a very long period of time,” and that Mitchell's criticisms of the provision were “absolutely correct.”58
By the time of the Senate Judiciary Committee hearings on Superfund amendments in June 1985, EPA and Justice Department witnesses had abandoned the language of the contribution amendment which it had slipped by the Senate Environment Committee without contemporaneous debate. The Reagan Administration had not, at that time, approved any modification of the Government's position on the matter.59 The witnesses, however, offered up a draft revision of its proposal, which would have allowed impleader of third-party defendants into the Government's case but required that “all proceedings on claims in the nature of contribution or indemnification shall be stayed pending entry of judgment or settlement on the claim of the United States or the State….”60 The Republican majority on the Senate Judiciary Committee would have none of it. The criticism began with the Chairman, Senator Strom Thurmond, who confronted Habicht with the conflict between the Government's position and the Federal Rules of Civil Procedure, asking, “In your opinion, have the courts shown a reluctance or an inability to handle joinder or third-party defendants under the guidelines set out in the Federal Rules of Civil Procedure, and what evidence do you have to support your conclusion?”61 Habicht admitted that the provision “may slightly change those rules.”62 Senator after senator on the Judiciary Committee hammered away at the conflict. Senator Simpson exclaimed that delaying contribution claims until the conclusion of the case in chief “runs absolutely counter to everything we see in the philosophy of the Federal Rules of Civil Procedure, the aim of which is to promote total judicial efficiency through bringing together every single claim which is related to a specific set of facts.”63 Simpson also raised “the issues with regard to mandatory counterclaims under the Federal rules in the face of S.51, because there is another divergence.”64 Senator Hatch asked, “Would not this provision… precluding contribution claims until that time inhibit settlements and place unfair burdens on the first party sued?”65 After an extensive colloquy about the revised position of the Government witnesses, Hatch astutely observed, “The problem with what you are suggesting is, as I understand it, under your contribution proposal it would only allow EPA to authorize contribution.”66 Senator Specter, after carefully reviewing the witnesses' prior testimony retreating to its revised amendment, astutely observed that even the revised provision was “going to make a legislative change on the sequence of issues to bind a Federal judge in how he is going to try one of these complex cases.”67
After the Government witnesses had testified in the Senate Judiciary Committee, and had been lambasted regarding the contribution provision, the testimony of subsequent witnesses critical of the provision was anti-climactic. George Freeman's prepared statement criticized the original provision as contrary to Rule 14 of the Federal Rules of Civil Procedure” as well as the compulsory counterclaim rule, Rule 13(a) and the Government's proposed revision as making “only cosmetic changes and continues to force courts and defendants into a wasteful second trial on many of the same issues.”68 But his oral testimony on this issue needed to do no more than to recommend that the Committee “[d]elete EPA's contribution deferral provision because it is inconsistent with the Federal Rules of Civil Procedure, as Senator Specter brought out.”69 Testimony of the American Petroleum Association the following day argued that “S.51 as reported will foster needless litigation and amend the Federal Rules of Civil Procedure,”70 and of Chevron Inc. that the provision “would abrogate the primary functions of Rules 14, 19, 20 and 42 of the Federal Rules of Civil Procedure by virtually prohibiting both the joinder of involved parties and the filing of counterclaims and cross-claims during the case in chief.”71 In dialogues with various witnesses critical of the provision, Senator Specter summarized that “the Department of Justice backed right down on this issue on Friday.”72 Discussing the matter with representatives of the insurance industry, Specter concluded, “I think we have your point on the desirability of having the actions together, and I think from the tone of what the Department of Justice and EPA had to say last Friday, that they do not have a serious disagreement on that point.”73
Following these hearings, the Senate Judiciary Committee offered its substitute amendment on the Senate floor as part of a package of amendments introduced by Senator Thurmond, which he referred to as the “Thurmond-DOJ-EPA package.”74 Senator Thurmond represented on the Senate floor that both agencies supported his package. This is the same language found in Section 113(f) expressly affirming that the Federal Rules of Civil Procedure apply to CERCLA contribution claims. In addition, the “contribution protection” language was changed to indicate that a partial settlement reduced the non-settlor's “potential liability” by the “amount” of the settlement rather than by any amount “stipulated by” the settlement.75 In the House of Representatives, Administration witnesses affirmed that they had modified their position in response to the concerns of members of the Senate Judiciary Committee.76 This work product are the provisions now found in CERCLA Section 113(f).77
In short, it is crystal clear from SARA's legislative history that Congress did not intend to supersede the Federal Rules of Civil Procedure with respect to the management of contribution claims or counterclaims. In fact, that legislative history is flatly to the contrary. In SARA, Congress intended to reject the Government's proposal to separate contribution claims and counterclaims from the original cost recovery action. Congress did not intend to permit the Government to control or delay contribution claims in contravention of the Federal Rules of Civil Procedure.
In Atlantic Research, Justice Thomas used ordinary principles of statutory construction and principles applicable to ordinary tort law in deciding whether there was a private cost recovery action under § 107 and deciding how that cause of action related to contribution claims under § 113(f).78 Though he may have misstepped in denominating the partial defense of the cost recovery defendant based on the plaintiff's liability as a “§ 113(f) [contribution] counterclaim,” his basic approach relying on relevant background principles from tort law and civil procedure is correct. SARA's legislative history indicates that Congress intended for the management of CERCLA claims to follow the Federal Rules of Civil Procedure rather than to supersede those Rules for the convenience of the Government and its affiliates. Congress did not intend to supersede the compulsory counterclaim Rule 13(a). So, even if the partial affirmative defense is viewed as a contribution counterclaim, the Government as a PRP defendant must assert in the private cost recovery action against it or be barred from suit.
As those Rules require, in any cost recovery action where a defendant shows the CERCLA liability of the plaintiff, the plaintiff's recovery must be reduced by an amount reflecting the plaintiff's equitable share of the liability prior to entry of judgment for the plaintiff. This applies to the Government whether it is a plaintiff or a PRP defendant, or both, the same as any other person.
1 United States v. Atlantic Research Corp., 127 S. Ct. 2331 (2007).
2 Id. at 2339.
3 Contradiction in adjecto, http://en.wikipedia.org/wiki/Contradictio_in_adjecto (last visited June 22, 2008).
4 Oxymoron literally combines the Greek word for “sharp”-- oxy--with the Greek word for “dull”--moros Oxymoron, http://en.wikipedia.org/wiki/Oxymoron#Delibrate_oxymorons (last visited June 22, 2008).
5 Cf. Fed. R. Civ. P. 13(a) (compulsory counterclaim), 13(b) (permissive counterclaim), 13(g) (crossclaim), 14(a) (third-party practice).
6 CERCLA § 113(f)(1), 42 U.S.C. § 9613(f)(1).
7 CERCLA § 107(a), 42 U.S.C. § 9607(a).
8 Fed. R. Civ. P. 8(a).
9 Mola Development Corp. v. U.S., No. CV 82-0819-RMT(JRx), slip op., at 2 (C.D Cal. May 6, 1986): see generally Alfred R. Light, Contribution Protection, Review Preclusion, and the Government Defendant, 19 Toxics L. Rep. (BNA) 538 (June 10, 2004).
10 Fed. R. Civ. P. 8(c)(2).
11 See 3-13 Moore's Federal Practice--Civil § 13.11 (“Recoupment Claims Are Compulsory.”).
13 Id. Setoff claims can be important where the original plaintiff is the United States because courts have permitted counterclaims against the United States to be setoff to reduce the Government's recovery even where sovereign immunity prevents the defendant from obtaining affirmative relief in the form of an actual money judgment from the U.S. treasury. E.g., United States v. Forma, 42 F.3d 759, 762 (2d Cir. 1994). This is important because the decision by the United States to sue on a claim generally does not constitute waiver of sovereign immunity as to counterclaims above those claims for which the United States is suing. This result applies even if the counterclaim arises out of the same transaction or occurrence as the complaint brought by the United States. United States v. Johnson, 853 F.2d 619, 621 (8th Cir. 1988). Congress, however, has abrogated the sovereign immunity of the United States for cost recovery claims under CERCLA. CERCLA §120(a), 42 U.S.C. § 9620(a).
14 Fed. R. Civ. P. 13(g), 14(a).
15 Fed. R. Civ. 14(a).
16 3-13 Moore's Federal Practice--Civil § 13.70 (“A cross-claim is a permissive claim, and if the pleader chooses not to raise it in the original action it will not be barred in a subsequent separate action.”).
17 Fed. R. Civ. P. 13(g); 14(a).
18 Fed. R. Civ. P. 14(a)(4).
19 Albert M. Cohen, Atlantic ResearchClarifies the Right of Voluntary PRPs to Sue but Still 'Contributes' to the Confusion, 22 Toxics Law Reporter (BNA) 724 (Aug. 23, 2007).
20 Id. at 726.
21 Id. at 727 (“Thus, it is not clear that a Court has any authority to take away a § 107 statutory claim enacted by Congress.”).
22 Id. at 728.
23 CERCLA § 113(f)(2), 42 U.S.C. § 9613(f)(2).
25 There are serious constitutional issues associated with taking a person's cause of action without that person's participation in the action or settlement supposedly extinguishing that cause of action.
26 42 U.S.C. § 9613(f)(1);see generallyCooper Indus., Inc. v. Aviall Serv. Inc., 543 U.S. 157 (2004).
27 This resulted from the conjunction of exclusive federal court jurisdiction over CERCLA claims established in 42 U.S.C. § 9613(b), the preclusion of pre-enforcement judicial review in federal court established in 42 U.S.C. § 9613(h), and the Avialldecision preventing contribution actions except “during or following” a civil action within the discretion of the Government to bring or not to bring. Cooper Indus., Inc. v. Aviall Serv. Inc., 543 U.S. 157 (2004).
28 E.g., Voluntary Purchasing Groups, Inc. v. Reilly, 839 F.2d 1380, 1387-8 (5th Cir. 1989); see generally Alfred R. Light & M. David McGee, Preenforcement, Preimplementation, and Postcompletion Preclusion of Judicial Review under CERCLA, 22 Envtl. L. Rep. (Envtl. L. Inst.) 10397 (1992).
29 42 U.S.C. § 9613(f)(2); see generally Alfred R. Light, CERCLA’s Snark: Contribution Protection, Review Preclusion, and the Government Defendant, 19 Toxics L. Rep. (BNA) 538 (2004). Apparently, the Government has been having a hard time recently in reaching this secret interagency agreement, however. See “DOD Asks OMB to Settle Dispute With EPA Over Cleanup Enforcement,”Inside EPA's Superfund Report, June 2, 2008, at 1, 6.
30 See Alfred R. Light, The Importance of “Being Taken”: To Clarify and Confirm the Litigative Reconstruction of CERCLA's Text,18 B.C. Envtl. Aff. L. Rev. 1, 12-20, 25-26 (1990).
31 42 U.S.C. § 9606(b), 9607(c)(3); see Solid State Circuits Inc. v. EPA, 812 F.2d 383 (8th Cir. 1987).
32 127 S.Ct. at 2339 (“In any event, a defendant PRP in such a § 107(a) suit could blunt any inequitable distribution of costs by filing a § 113(f) counterclaim.”); Fed. R. Civ. P. 13(a). The Government has sovereign immunity if PRPs seek to join it as a necessary party plaintiff under Fed. R. Civ. P. 19(a). E.g., In re: Hemingway Transp., Inc, 70 B.R. 549, 25 Env’t Rep. Cas. (BNA) 1791 (D. Mass. 1987); Missouri v. Indep. Petrochemical Corp., 12 Chem. Waste Lit. Rep. 1084 (E.D. Mo. Oct. 16, 1984). Thus, while it may be unwise for the United States not to join a private cost recovery action at a site where the Government has also incurred response costs because of the risk of a persuasive precedent against it on PRP liability issues in the private suit, nonetheless it may choose not to join. This only applies, however, where the Government is not itself a PRP. There sovereign immunity is waived pursuant to 42 U.S.C. § 9620.
33 Baker v. Gold Seal Liquors Inc., 417 U.S. 467, 469 n.1 (1974) (“A counterclaim which is compulsory but is not brought is thereafter barred.”); American Mills Co. v. American Surety Co., 260 U.S. 360 (1922); New York Life Insurance Co. v. Deshotel, 142 F.3d 873, 882 (5th Cir. 1998) (“It is well settled that a failure to plead a compulsory counterclaim bars a party from bring a later independent action on that claim.”).
34 Solutia Inc. v. McWane Inc., No. CV 03-PWG-1345-E (N.D. Ala. June 10, 2008), slip op. at 18 (quoting defendants and United States, as amicus curiae).
35 Id.(quoting defendants and United States, as amicus curiae) (emphasis in original).
36 The magistrate in Solutia rejected the Government's view and refused to dismiss a § 107 claim by PRPs undertaking a cleanup under a consent decree against other PRPs. Id.
37 Fed. R. Civ. P. 54(b) (“When an action presents more than one claim for relief--…the court may direct entry as to one or more, but fewer than all, claims…”).
38 Id.; see 10-54 Moore's Federal Practice--Civil § 54.22 (“Accordingly, before Rule 54(b) may be validly applied, there must be at least two claims presented by the action…The judgment entered under the rule must completely dispose of at least one of those claims…”).
39 42 U.S.C. § 9613(h).
40 The Government cannot wait forever. CERCLA's cost recovery statute of limitations requires suit within three years of completion of a removal action or six years from “initiation of physical onsite construction” of a remedial action, except where the limitations of removal have been exceeded, in which case the statute runs earlier. CERCLA § 113(g)(2), 42 U.S.C. § 9613(g)(2). See Alfred R. Light, CERCLA's Cost Recovery Statute of Limitations: Closing the Books or Waiting for Godot? 16 Se. Envtl. L.J. 245 (2008).
41 Fed. R. Civ. P. 13(a).
42 If the Government has not yet incurred response costs but intends to do so, it can bring an action for declaratory relief. See 3-13 Moore's Federal Practice--Civil § 13.41 (“A counterclaim may request declaratory relief if the requirements for pleading the existence of a 'case or controversy’ between the parties are otherwise met.”).
43 Fed. R. Civ. P. 13(I), 42(b).
44 Raytheon Aircraft Co. v. United States, 532 F. Supp. 2d 1316, 1319 (D. Kan. 2008).
45 532 F. Supp. 2d at 1318.
46 532 F. Supp. 2d at 1318.
47 S. 494, 99th Cong., 1st Sess., § 202 (adding § 107(k)(1)).
48 S. 494, 99th Cong., 1st Sess. § 202 (adding § 107(k)(2)).
49 S. 494, 99th Cong., 1st Sess. §202 (adding § 107(k)(3)).
50 S. Hrng. 99-60, at 1-2.
51 S. Rep. No. 99-11, at 103-104 (proposed § 107(l)).
52 S. Hrng. 99-61, at 1.
53 S. Hrng. 99-61, at 13.
54 S. Hrng. 99-61, at 21.
57 Id., at 22.
59 S. Hrng. 99-415, at 99-101 (Habicht acknowledging under questioning from Sen. Specter that modifications of the Government's position on the provision had not yet been approved by the Justice Department.).
60 S. Hrng. 99-415, at 65 (Attachment to Habicht written testimony entitled, “Draft Revision to Contribution Language”).
61 S. Hrng. 99-415, at 73.
62 Id., at 74.
63 S. Hrng. 99-415, at 77-78.
64 Id., at 78.
65 Id., at 91.
66 Id., at 93.
67 Id., at 100.
68 S. Hrng. 99-415, at 148-151.
69 Id., at 111.
70 S. Hrng. 99-415, at 452-453.
71 Id., at 474.
72 Id., at 538.
73 Id., at 539.
74 131 Cong. Rec. S11857-59 (daily ed. Sept. 20, 1985).
75 Compare S. 494, 99th Cong. § 202 (proposed § 107(k)(3), (k)(4) (Administration bill) with 131 Cong. Rec. S11,835 (daily ed. Sept. 20, 1985) (proposed § 107(l)(3)) (Thurmond-DOJ-EPA package).
76 Superfund Reauthorization: Judicial and Legal Issues, Oversight Hearings Before the Subcomm. on Admin. Law and Governmental Relations of the House Comm. on the Judiciary, 99th. Cong. (1985), at 245.
77 42 U.S.C. § 9613(f).
78 See United States v. Atlantic Research Corp., 127 S.Ct. 2331, 2336 (2007) (“Statutes must be 'read as a whole.’”); id. (“The Government’s interpretation makes little textual sense.”); id.,at 2337 (“It is appropriate to tolerate a degree of surplusage rather than adopt a textually dubious construction that threatens to render the entire provision a nullity.”); id.(“Because the plain terms of § 107(a)(4)(B) allows a PRP to recover costs from other PRPs, the statute provides Atlantic Research with a cause of action.”); Cooper Indus. v. Aviall Services Inc., 125 S.Ct. 577, 583 (2004) (focusing on the text “during or following” in 42 U.S.C. § 9613(f), giving “may” its “natural meaning”); id. (“There is no reason why Congress would bother to specify conditions under which a person may bring a contribution action, and at the same time allow contribution actions absent those conditions.”).
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