Jump to Navigation
Jump to Content

TDY Holdings, LLC v. United States

ELR Citation: 47 ELR 20121
Nos. 15-56483, (9th Cir., 10/04/2017)

The Ninth Circuit reversed a district court decision that allocated 100% liability under CERCLA to a government contractor seeking contribution from the U.S. government. For 60 years the contractor operated a manufacturing facility where it manufactured aircrafts primarily for the U.S. government. For 40 of those years the U.S. government owned equipment at the site pursuant to government programs intended to finance and oversee the construction and outfitting of government-owned industrial facilities leased to private companies. For nearly 30 years the contractor billed the government for indirect costs of environmental remediation of PCB contamination at the plant. In 2004 the San Diego Unified Port District brought CERCLA claims against the contractor. After a settlement was reached the contractor filed suit against the government for contribution. A district court allocated 100% liability to the contractor. The appellate court held the district court erred in its analysis as the government’s contracts with the contractor required the use of two of the three chemicals at issue beginning in the 1940s, when the hazardous nature of the substances and the need to take precautionary steps to minimize their release were unknown. The contractor's prompt adoption of practices to reduce the releases into the environment once the hazards became known further undercuts the lower court decision. Additionally, the district court did not consider adequately the parties’ lengthy course of dealings in which the government repeatedly agreed to share in environmental cleanup costs from this site. The case was reversed and remanded.