Contribution Claims Under Section 113(f)(1) of CERCLA: Preconditions, Elements of Liability, and Entitlement to Relief

John M. Hyson

[Editors' Note: This Article will appear as a chapter in a forthcoming monograph by Professor Hyson, to be published by the Environmental Law Institute in the spring of 2002. The monograph will thoroughly discuss private cost recovery actions under the Comprehensive Environmental Response. Compensation, and Liability Act (CERCLA). Although there has been a significant decrease in the number and scope of government enforcement actions under CERCLA, a marked increase in private cost recovery actions is occurring. Only in recent years have the courts begun to straighten out the relationship between CERCLA's imposition of liability for private response costs and CERCLA's provision of a right to contribution. But the courts are still struggling with a number of questions involving the relationship between CERCLA's liability provision, § 107, and the statute's contribution provision, § 113(f). These and other issues are comprehensively addressed in the monograph; in addition, Professor Hyson goes beyond the difficult substantive legal issues to provide guidance to practitioners and courts who deal with the complexities and high transition costs of contribution litigation. Throughout the work, Professor Hyson focuses on procedures that might be used to reduce transaction costs. For more information on the monograph, please visit www.eli.org or call 1-800-433-5120 or 202-939-3844.]

John Hyson is a Professor of Law at Villanova Law School.

[32 ELR 10151]

The federal courts are in agreement¹ that an action by a potentially responsible party (PRP) against another PRP to recover privately incurred response costs is a claim for contribution in which the plaintiff is limited to the relief that is available under § 113(f)(1)² of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).³ This Article considers: (1) the preconditions for the assertion of contribution claims under § 113(f)(1); (2) the plaintiff's burden in establishing a defendant's liability; and (3) the plaintiff's burden in establishing entitlement to relief.

Preconditions to the Assertion of Contribution Claims Under § 113(f)(1)

CERCLA contains an express precondition to the assertion of a contribution claim under § 113(f)(1)—the requirement in § 113(l) of notice to the U.S. Attorney General and the Administrator of the U.S. Environmental Protection Agency (EPA). In addition, and as discussed below, the Fifth Circuit, in two decisions, has concluded that § 113(f)(1) itself limits the circumstances in which a contribution claim may be asserted.

The Notice Requirement of § 113(l)

Section 113(l) provides:

Whenever any action is brought under this chapter in a court of the United States by a plaintiff other than the United States, the plaintiff shall provide a copy of the complaint to the Attorney General of the United States and to the Administrator of [EPA].⁴

Since the notice requirement of § 113(l) applies to "any action under this chapter" by a plaintiff other than the United States, it is applicable not only to a contribution claim by a PRP but also to a private cost recovery action by a non-liable private party.⁵

The only reported decision that discusses the consequence of a plaintiff's failure to provide the notice required by § 113(l) is Greene v. Product Manufacturing Corp.⁶ In Greene, the defendant sought dismissal of the plaintiffs' action to recover privately incurred response costs because of the plaintiffs' failure to provide the notice required by § 113(l). The court stated that dismissal would be an "overly harsh" sanction for failure to comply with § 113(l).⁷ Rather, the court emphasized, "the appropriate inquiry, in our judgment, is whether the plaintiffs' failure to provide timely notice [under § 113(f)] caused prejudice to [the defendant]."⁸ The court noted that the defendant had contended, without any evidentiary support, that plaintiffs' failure to notify EPA under § 113(l) could expose the defendant to double liability. The court directed the parties to "depose an EPA employee with the authority to settle the issue of the EPA's involvement, if any, and the correlative issue of PMC's potential exposure to double liability."⁹

[32 ELR 10152]

No court has held that the notice requirement of § 113(l) is jurisdictional in nature; that is, no court has held that the failure of a plaintiff to provide the notice required by § 113(l) would deprive a federal court of jurisdiction to entertain an action to recover privately incurred response costs. If the purpose of the notice requirement is to protect a defendant from double liability for response costs—as suggested in Greene—it would seem that, if the defendant does not raise the issue of a plaintiff's failure to provide the required notice, the defendant has waived any right that it has to the protection afforded by § 113(l). And, if a defendant does raise the issue of a plaintiff's failure to provide notice, there is nothing in § 113(l) that suggests that a plaintiff could not satisfy the notice requirement at that time. In sum, there is nothing in § 113(l) that supports a conclusion that the notice required by that section is an absolute precondition to a plaintiff's right to recover privately incurred response costs.

Limitation of Contribution Claims to Liable or Potentially Liable Parties

In OHM Remediation Services v. Evans Cooperage Co.,¹⁰ the Fifth Circuit held that § 113(f)(1) contribution claims may be brought only by those who are liable or potentially liable under § 107(a). The court grounded this holding upon its interpretation of the first sentence of § 113(f)(1). Although that sentence provides that a contribution claim may be brought by "any person," the court stated that this language must be read in conjunction with the statute's description of who is liable: "Any other person who is liable or potentially liable under section 9607(a) of this title."¹¹ The court concluded that the word "other" modifies "person who is liable or potentially liable" under § 107(a) and thus "implies that the person seeking contribution must be liable also."¹² As the court stated: "Such a reading construes the statute to say, 'Any person who is liable or potentially liable may seek contribution from any other person who is liable or potentially liable.'"¹³

The court's interpretation of § 113(f)(1) is compelling but, at first blush, of no practical significance.¹⁴ It precludes a § 113(f) contribution claim by a person who is neither liable nor potentially liable under § 107(a). But if such a person—one who could not possibly be determined to be liable under § 107(a)—wished to recover privately incurred response costs, it could bring (and would prefer to bring) a direct cost recovery action under § 107(a)(4)(B) in which the liability of defendants is thought to be joint and several.¹⁵

The holding in OHM has potential significance because of the court's statements as to how it is to be determined whether a person bringing a § 113(f) contribution claim is "potentially liable" under § 107(a). There is little difficulty in determining whether a § 113(f) plaintiff is "liable" under § 107(a). A person is not "liable" until there has been a judicial determination of liability. There is ambiguity, however, with respect to when it can be said that a person is "potentially liable." The court in OHM recognized this ambiguity:

The terms "liable or potentially liable" and "potentially responsible party" (or PRP) are not defined in the statute. However, after examining the text and the structure of CERCLA, we think that the most sensible reading of the statute demands that, even before any determination of actual liability, a party may be "potentially liable" simply by being sued under the statute. . . . The courts may eventually clear a CERCLA defendant or third-party defendant from liability; but, until it does, such a defendant is at least potentially liable.

This interpretation of potential liability under [§] 113 allows parties to bring contribution actions at least as soon as they are sued under CERCLA.¹⁶

At the end of this statement, the court, in a footnote, stated: "We express no opinion as to whether a party may be considered a PRP [i.e., a "potentially liable" party] before being sued under CERCLA."¹⁷

In spite of the court's express reservation of the question whether a plaintiff would be "potentially liable" before "being sued under CERCLA," it would seem that the court's interpretation of § 113(f)(1) would require an affirmative answer. The court, as previously explained, concluded that § 113(f)(1), properly interpreted, provides that "any person [who is liable or potentially liable under § 107(a)] may seek contribution from any other person who is liable or potentially liable under [§ 107(a)]." In other words, the class of those who may sue under § 113(f)(1) is co-extensive with the class of those who may be sued. If so, since it is clear that a party may be sued as "potentially liable" even if it has not been previously sued under CERCLA, it follows that a party may sue under § 113(f)(1) even if it had not been previously sued under CERCLA.¹⁸

Thus, after all is said and done, the OHM court's explanation of when a person is "potentially liable" under § 107(a)—and therefore eligible to bring a contribution claim under § 113(f)(1)—has little practical significance. Under the court's explanation, a person who is clearly not liable under § 107(a) could not bring a claim under § 113(f)(1); but that is of little significance because such a person could [32 ELR 10153] bring a direct cost recovery action under § 107(a). A "potentially liable" person can bring a claim under § 113(f)(1) and, under the court's reasoning, it is not necessary for a person to have been previously sued under CERCLA in order for that person to be "potentially liable."

Availability of § 113(f)(1) Contribution Claims for Recovery of Voluntary Cleanup Costs

In Aviall Services Inc. v. Cooper Industries Inc.,¹⁹ the Fifth Circuit held that § 113(f) contribution claims may be brought only by persons who have been named as defendants in an action under § 107(a) or who have incurred response costs in implementing a cleanup order under § 106(a).²⁰ In arriving at this holding, the court focused upon a clause in § 113(f)(1) that had not been examined in OHM. That clause provides that a person may bring a contribution claim "during or following any civil action under [CERCLA § 106] of this title or under [CERCLA § 107(a)] of this title." According to themajority opinion in Aviall,²¹ this clause acts as a limitation upon when contribution claims may be brought under § 113(f)(1). Specifically, the majority concluded that a person could bring a contribution claim under § 113(f)(1) only if that person had been sued in an action under § 107(a) or if it had been subject to a cleanup order under § 106(a).²²

The Aviall majority's interpretation of § 113(f)(1), if up-held,²³ is significant because it precludes contribution claims under § 113(f)(1) by persons who have incurred response costs voluntarily or in complying with a state cleanup order. Persons who have incurred response costs in such circumstances must look to state law in order to recover their costs against other private entities. In precluding a federal contribution action by such persons, the Aviall majority opinion tends to discourage voluntary cleanups.²⁴

At the end of its opinion, the majority in Aviall recognized the implications of its ruling:

Aviall makes a general policy argument that the district court's ruling [affirmed in the majority opinion] would discourage voluntary cleanups because parties would not be able to seek contribution unless they were actually sued or faced EPA administrative order. Some courts have conceded this disincentive, but have nevertheless ruled that Congress required this result. . . . We agree that the text trumps policy preferences, and that we cannot substitute Congress' wishes with our own.²⁵

With this last statement, the majority made it clear that its holding was grounded upon its interpretation of the text of § 113(f)(1).

Before Aviall, no court of appeals had directly addressed the issue presented in that case.²⁶ Indeed, as Judge Jacques L. Wiener stated in his dissent, the majority acknowledged that there have been a "string of cases" in which courts of appeals have addressed the merits of § 113(f)(1) contribution claims brought by parties that had not been subject to CERCLA actions under § 106 or § 107(a)²⁷—actions which, under the Aviall majority's interpretation of § 113(f)(1), were not authorized federal contribution actions. In some of these cases, the plaintiff had incurred response costs in complying with a state agency directive; in others, the plaintiff had incurred response costs "voluntarily"—that is, without any directive from a government agency. In these actions, the courts and the parties had assumed, contrary to the holding in Aviall, that the plaintiffs were entitled to bring contribution actions under § 113(f)(1). As Judge Wiener observed in his dissent, "that phenomenon [i.e., the fact that other courts of appeals had not addressed the issue decided by the majority] only underscores the common understanding among courts and litigants alike that the plain language of § 113(f)(1) does not require a PRP to wait until it is haled into court to seek contribution under the statute."²⁸

The holding of the Aviall majority is grounded primarily upon its interpretation of the text of § 113(f)(1). The majority began its analysis with the assertion that "[a] plain language reading of the statute requires a PRP seeking contribution from other PRPs to have filed a § 113(f)(1) claim 'during or following' a federal action against it."²⁹ The majority's [32 ELR 10154] "plain language reading" contained two distinct and independent components: its interpretation of the term "contribution" and its interpretation of the first sentence of § 113(f)(1) as limiting the availability of federal contribution claims to those asserted "during or following any civil action under [§ 106] or under [§ 107(a)]." The majority concluded that Aviall's claim could not be asserted under § 113(f)(1) on two grounds: (1) Aviall's claim was not a claim for "contribution"; and (2) even if its claim was a contribution claim, it was not asserted "during or following any civil action under [§ 106] or under [§ 107(a)]."³⁰

In its interpretation of the term "contribution," the majority relied upon a definition of that term, in Black's Law Dictionary, as the "right of one who has discharged a common liability to recover of another also liable . . . . Under principle of 'contribution,' a tort-feasor against whom a judgment is rendered is entitled to recover proportional shares of judgment from other tort-feasors."³¹ The majority goes on to assert that "we believe that the commonly accepted definition of the term contribution requires a tortfeasor to first face judgment before it can seek contribution from other parties."³²

In his dissent, Judge Wiener looked to various authorities as supporting the conclusion that the term "contribution" is not limited to claims asserted after judgment has been rendered against the plaintiff asserting the claim.³³ The differing definitions identified by Judge Wiener undercut the majority's assertion that its interpretation is required by the "plain language" of § 113(f)(1). The term "contribution" does not have the one plain meaning ascribed to it by the majority.

The most compelling argument against the majority's interpretation of the term "contribution" is the point, made by Judge Wiener, that "the 'during or following' language in § 113(f)(1) confirms that a PRP need not wait until it is hit with a judgment in a court of law to seek contribution from other PRPs for CERCLA liability."³⁴ The majority's interpretation of the term "contribution" as limited to claim asserted after judgment is untenable because it cannot be reconciled with the express authorization, in § 113(f)(1), of contribution claims "during" actions under § 106 or § 107(a).³⁵

The second "plain language" reason that the majority offers in support of the dismissal of Aviall's claim is the fact that the claim—even if viewed as a "contribution" claim—was not brought "during or following a civil action under [§ 106] or under [§ 107(a)]." This reason is grounded upon the majority's "plain language" interpretation of the first sentence of § 113(f)(1) as limiting the circumstances in which federal contribution claims may be asserted under that section. Briefly stated, the majority identified the following "key question" in interpreting the first sentence of § 113(f)(1):

Whether the use of the word "may" signifies an exclusive means for contribution (as in a party "may only" or "must" seek contribution during or following a CERCLA action), or a non-exclusive means for contribution (as in a party "may choose one of several ways" to seek contribution, and one way is during or following a CERCLA action).³⁶

The majority concluded that the former interpretation is required based upon the following reasoning:

In our case, the word "may" is used in the context of empowering a contribution action. Simply put, when a statute creates a cause of action, we must narrowly read the word "may" as establishing an exclusive enabling provision.³⁷

In his dissent, Judge Wiener adopted the second interpretation identified by the majority; he interpreted the first sentence of § 113(f)(1) as permissive, not limiting, in character. That is, he interpreted the first sentence as permitting contribution claims to be asserted "during" as well as "following" a civil action under § 106 or § 107(a). Judge Wiener argued that the majority's interpretation of the first sentence as limiting the assertion of contribution claims was inconsistent with the savings clause set forth in the fourth sentence of § 113(f)(1). That clause provides that "nothing in this subsection shall diminish the right of any person to bring a claim for contribution in the absence of a civil action under [§ 106] of this title or [§ 107(a)] of this title." The two sentences together supported the conclusion that nothing in the first sentence precluded the assertion of a § 113(f)(1) contribution claim in circumstances other than those described in the first sentence.

The majority and the dissent took fundamentally different approaches in interpreting the first and fourth sentences of § 113(f)(1). In interpreting the first sentence, the majority ignored the savings clause in the fourth sentence. Only after interpreting the first sentence as limiting federal contribution claims to those asserted "during or following" actions under § 106 or § 107(a) did the majority turn to an interpretation of the savings clause in the fourth sentence. Locked into its interpretation of the first sentence, the only way that the majority can make sense of the savings clause is by interpreting that clause as saving the rights of persons to bring contribution claims under state law in the absence of civil [32 ELR 10155] actions under § 106 or § 107(a).³⁸ Judge Wiener, in contrast, looked to the savings clause (in the fourth sentence) for guidance in interpreting the first sentence.

The majority's method is inconsistent with basic principles of statutory construction. Statutory provisions are to be interpreted in context, not in isolation.³⁹ The majority's reasoning in interpreting the first sentence as limiting the availability of federal contribution claims may have some force—if that sentence is interpreted in isolation. But the majority's failure to consider the savings clause when interpreting the first sentence of § 113(f)(1) is judicial interpretation with blinders. Instead of interpreting the first sentence in light of the savings clause, the majority interprets the savings clause in a way that reconciles the permissive nature of that clause with the majority's blindered interpretation of the first sentence. The consequence is an "interpretation" of the savings clause that requires the majority to add language in concluding that the clause saves only the right to bring contribution claims under state law.⁴⁰

As previously noted, the Aviall majority purported to ground its decision upon the text of § 113(f)(1). Nevertheless, the majority argued, in separate parts of its opinion, that "the legislative history of CERCLA reinforces our analysis of the statutory text"⁴¹; that "the majority of the courts addressing § 113(f)(1) have agreed with our textual analysis"⁴²; and that "our interpretation is wholly consistent with the policy goals of CERCLA."⁴³ Judge Wiener disagreed with the majority with respect to each contention.

With respect to legislative history, Judge Wiener charged that "the majority fecklessly relies on House and Senate reports that address markedly different, and ultimately abandoned, versions of what would later become the enacted version of § 113(f)(1)."⁴⁴ And he stated that "the language of the statute ultimately enacted by Congress is more permissive than either of the more restrictive versions on which the legislative history cited by the majority comments."⁴⁵ The majority opinion made no effort to rebut Judge Wiener's assessment of the legislative history relied upon by the majority.

With respect to the decisions of other courts, Judge Wiener demonstrated that only one district court opinion directly supported the majority's interpretation and that several district court opinions disagreed.⁴⁶ Insofar as the courts of appeals are concerned, there was only dicta from the Seventh Circuit that supported the majority interpretation.⁴⁷

Finally, the majority's brief effort, at the end of its opinion, to demonstrate that its holding "is wholly consistent with the policy goals of CERCLA" is half-hearted and unpersuasive. The majority simply asserted that "Congress did not intend to create an expansive federal cause of action" when it enacted § 113(f)(1).⁴⁸ And it speculated that "it seems unlikely that Congress intended enacted a contribution right broad enough to encompass Aviall's situation, where neither the federal government nor any private party has filed a CERCLA action against it."⁴⁹ But stacked against these views is an oft-expressed basic goal of CERCLA to encourage voluntary cleanups of contaminated sites.⁵⁰ With respect to this goal, the majority expresses "doubt that our interpretation of § 113(f)(1) will necessarily discourage voluntary cleanups" since a party incurring costs in a voluntary cleanup may be able to seek recovery of its cleanup costs under state law.⁵¹ But the majority's statement fails to explain why a Congress, bent on encouraging voluntary cleanups, would relegate cost recovery actions by volunteers to state courts.⁵²

In sum, for the reasons given, the alternative bases for the holding in the majority opinion in Aviall do not withstand analysis. The majority is unpersuasive in its contention that the plain meaning of "contribution" limits the availability of § 113(f)(1) to PRPs that have "faced judgment." And the majority's assertion that the first sentence of § 113(f)(1) limits federal contribution claims to those who have been sued under [32 ELR 10156] § 107(a) or subjected to a cleanup order under § 106(a) is the product of the majority's failure to interpret that sentence in light of the savings clause in the fourth sentence. If the panel majority opinion is not set aside by the Fifth Circuit en banc, it is unlikely that the opinion will be followed by other circuits.

Elements of Liability in a Contribution Claim Under § 113(f)(1)

There are two circumstances in which a private party may seek to recover its response costs under CERCLA. In one, the plaintiff is not itself a liable party and thus is not limited to a contribution claim under § 113(f)(1); rather, a non-liable plaintiff may base its claim upon § 107(a)(4)(B), which implicitly authorizes private actions for response costs. In the other, the plaintiff is itself a liable party and thus is limited to the relief authorized in § 113(f)(1)—an order requiring each liable defendant to pay its equitable share of the plaintiff's response costs. But § 113(f)(1) makes it clear that liability in a contribution claim under § 113(f)(1) is governed by § 107(a). Section 113(f)(1) provides that "any person may seek contribution from any person who is liable or potentially liable under [§ 107(a)]."⁵³

In spite of the clear language of § 113(f)(1), some courts have held that a PRP plaintiff in a contribution claim must, in order to establish a defendant's liability, prove more than the elements of liability set forth in § 107(a). In Farmland Industries, Inc. v. Morrison-Quirk Grain Corp.,⁵⁴ the Eighth Circuit stated that "a private party cannot predicate a claim for contribution or indemnity solely upon [§ 107(a)] liability to the government, but must also prove causation."⁵⁵ The court held that the plaintiff must prove that a defendant caused the plaintiff to incur response costs. The court acknowledged that liability "to the government" was not dependent upon proof that a defendant had caused the government to incur response costs.⁵⁶ But the court concluded that a private plaintiff seeking to recover its response costs in a contribution action had to prove not only liability to the government but also causation.

There is no support in the text of CERCLA to support the distinction that is the basis for the holding in Farmland Industries. As previously explained, the language of § 113(f)(1) makes it clear that § 107(a) defines the elements of liability in both a cost recovery action (by a government entity or a private plaintiff) and a private party contribution claim. The Sixth Circuit expressed this point clearly in Kalamazoo River Study Group v. Menasha Corp.⁵⁷:

The district court's imposition of a requirement that plaintiffs in contribution actions show causation in order to establish a defendant's liability was erroneous. The liability standard for contribution claims is the same as the standard for cost recovery claims. This conclusion is clear from the plain language of § 113, which states that any person may seek contribution "from any other person who is liable or potentially liable under section 9607(a) of this title." 42 U.S.C. § 9613(f)(1) (emphasis added). As we have explained, "parties seeking contribution under § 113(f) must look to § 107 to establish the basis and elements of the liability of the defendants." Centerior, 153 F.3d at 350; see also Redwing Carriers, Inc. v. Saraland Apartments, 94 F.3d 1489, 1496 [27 ELR 20028] (11th Cir. 1996) ("Whether [a plaintiff] brings its claims under § 107(a) or § 113(f) does not matter insofar as establishing the [defendant's] liability. The elements of a claim under both sections are the same." (footnote omitted)). Because causation is not an element of liability under § 107, and because § 107 defines the liability standard applicable in actions brought pursuant to § 113, then a § 113 plaintiff need not prove causation in order to establish a defendant's liability.⁵⁸

In the preceding statement, the Sixth Circuit is making two distinct points. First, the question of liability in a § 113(f)(1) contribution claim is governed by § 107(a). Second, there is nothing in § 107(a) that conditions liability upon proof that a defendant caused a plaintiff to incur response costs.

The first conclusion is grounded upon the languageof § 113(f)(1), which states that any person may seek contribution from any person "who is liable or potentially liable under [§ 107(a)]." There is no ambiguity here. Liability in a § 113(f)(1) contribution claim is governed by § 107(a). The second conclusion is grounded upon the language of § 107(a). There is nothing in § 107(a) that conditions liability upon proof that a defendant caused the plaintiff to incur response costs. Section 107(a) does require proof of "causation"—but all that is required is proof that a release (or threatened release) caused the plaintiff to incur response costs.⁵⁹ Again, to establish a defendant's liability under § 107(a), there is no requirement that a plaintiff prove that the defendant's actions caused the plaintiff to incur response costs.⁶⁰

[32 ELR 10157]

There is confusion in the case law because of the failure of some courts to appreciate the distinctions set forth in the preceding paragraphs.⁶¹ For example, in Farmland Industries, the Eighth Circuit relied in part upon a statement in its earlier decision in General Electric Co. v. Litton Industrial Automation Systems.⁶² In General Electric, a private plaintiff sought to recover privately incurred response costs in a contribution claim under § 113(f)(1). At the beginning of its analysis, the court stated: "In order for a private party to recover these [response] costs from the responsible party, the release of hazardous substances must have 'caused' the incurrence of the costs."⁶³ This statement is soundly grounded upon the language of § 107(a). It thus provides no support for the holding in Farmland Industries that "a private party cannot predicate a claim for contribution or indemnity solely upon [§ 107(a)] liability to the government, but must also prove causation."⁶⁴

The Eighth Circuit's statement in General Electric was simply a statement of what was necessary to establish liability under § 107(a). Though General Electric involved a contribution claim under § 113(f)(1), nowhere did the court suggest that the elements of liability in such a claim differed, or went beyond, the elements of liability set forth in § 107(a). Rather, the court in General Electric was simply describing the extent to which § 107(a) requires proof of causation. The court correctly stated that § 107(a) requires proof that the plaintiff's response costs were caused by a release of a hazardous substance. But this statement provides no support for the proof of "causation" required in Farmland Industries—proof that the plaintiff's response costs were caused by the defendant.

In sum, the holding in Farmland Industries is a consequence of the court's misreading of its prior decision in General Electric and, more fundamentally, the court's failure to examine the plain language of §§ 113(f)(1) and 107(a). That language is correctly interpreted and applied by the Sixth Circuit in Kalamazoo River.

It is unfortunate that, in a more recent decision, Bob's Beverage, Inc. v. Acme, Inc.,⁶⁵ the Sixth Circuit has undercut the clarity of its explanation in Kalamazoo River. In Bob's Beverage, the district court had determined that a past owner of a contaminated site was not liable for a private plaintiff's response costs because it found that "any release that occurred during the ownership of the [past owner] did not cause the incurrence of the [plaintiffs'] response costs."⁶⁶ The Sixth Circuit affirmed, relying upon a statement in its earlier decision in Control Data Corp. v. S.C.S.C. Corp.⁶⁷ In Control Data, the court had stated that "CERCLA focuses on whether the defendant's release or threatened release caused harm to the plaintiff in the form of response costs."⁶⁸ In Bob's Beverage, the Sixth Circuit stated "this is exactly the inquiry that the district court undertook [in the present case]. It found that there was no evidence that any release that occurred during the ownership of [the defendants] caused any increase in the response costs later incurred by the [plaintiffs]."⁶⁹ The Sixth Circuit went on to hold that "because [plaintiffs] have failed to demonstrate that a release by [the defendants] affected the [plaintiffs'] response costs, [plaintiffs] have failed to prove their cost recovery cause of action."⁷⁰

Like the Eighth Circuit in Farmland Industries, the Sixth Circuit in Bob's Beverage failed to recognize two distinct "causation" questions; more specifically, the court failed to recognize that the causation question presented in Control Data differed from the causation question that was the basis for the district court's decision in Bob's Beverage. Control Data was a two-site case in which the question was whether a release of hazardous substances from one site had caused the incurrence of response costs at another site. In that situation, the court addressed the causation issue that is an element of a liability determination under § 107(a)—whether a release or threatened release has caused the plaintiff to incur response costs. In two-site cases, it may be clear that a plaintiff has incurred response costs but it is often unclear whether the plaintiff's response costs were caused by a particular off-site release (or threatened release) of a hazardous substance. Such was the situation in Control Data. Thus, the court in Control Data properly focused upon "whether the defendant's release or threatened release [i.e., the off-site release] caused harm to the plaintiff in the form of response costs [incurred at the cleanup site]."⁷¹

In Bob's Beverage, a one-site case, there was no question that a release of hazardous substances at the contaminated site had caused the plaintiff to incur response costs. The causation issue addressed by the district court—whether a past owner had caused the release and the resulting response costs—is not relevant to the liability of a past owner under § 107(a)(2). A past owner is liable under § 107(a)(2) if it owned the site "at the time of disposal of any hazardous substance."⁷² It is irrelevant, for purposes of liability under § 107(a), whether the hazardous substances disposed of during the period of the past ownership caused a release and any resulting response costs.

In both Control Data and Bob's Beverage, the Sixth Circuit was insensitive to the precise language of § 107(a) and, in Bob's Beverage, the court was also insensitive to the language used in Control Data. The causation issue presented by the language of § 107(a) is whether "a release, or threatened release . . . causes the incurrence of response costs." In Control Data, the court incorrectly stated that "CERCLA focuses upon whether the defendant's release caused harm to the plaintiff in the form of response costs."⁷³ That is not what § 107(a) says. In the two-site context of Control Data, the question is whether a release from one-site (the site for which the defendant is a responsible party) caused the incurrence of response costs at another site (the plaintiff's site, or [32 ELR 10158] the cleanup site). In that context, where a defendant is responsible for a release at one site and where the plaintiff has incurred response costs at another site, one can understand how the court could say that the question regarding liability is whether "the defendant's" release (that is, a release from a site for which the defendant is a responsible party) caused the plaintiff's response costs. But the inquiry under § 107(a) is whether a release (or threatened release) caused the plaintiff to incur response costs. Section 107(a) imposes liability irrespective of whether a defendant, who fits within one of the four categories of liability, caused a release of a hazardous substance and any resulting response costs. Thus, it is inconsistent with the language of § 107(a) to state that CERCLA focuses upon whether "the defendant's release caused harm to the plaintiff in the form of response costs."

The court in Bob's Beverage failed to appreciate that the actual inquiry in Control Data was whether a release from one site caused the incurrence of response costs at another site. The language used by the court in Control Data, though somewhat unfaithful to the precise language of § 107(a), reflected that focus. The court in Bob's Beverage, however, took that language and transformed it to support a quite different proposition: that, in a one-site case, a plaintiff seeking to recover response costs in a contribution action must demonstrate that "a release by [the past owner] affected" the response costs incurred by the plaintiff. Section 107(a) imposes liability where "a release . . . of a hazardous substance" has caused the plaintiff to incur response costs; there is no requirement that the plaintiff prove that the release causing the incurrence of response costs was a particular defendant's release.⁷⁴

Like the Eighth Circuit in Farmland Industries, the Sixth Circuit in Bob's Beverage ignored the language of §§ 113(f)(1) and 107(a). In addition, it misapplied its earlier decision in Control Data and it failed to mention, much less discuss, its conflicting holding in Kalamazoo River that "causation [i.e., proof that a defendant caused plaintiff to incur response costs] is not an element of liability under § 107."⁷⁵

The holding in Kalamazoo River is faithful to the language of §§ 113(f)(1) and 107(a). Under that language, a defendant is liable in a contribution claim if it is liable under § 107(a). And there is nothing in § 107(a) that conditions liability upon proof that a defendant caused the plaintiff to incur response costs.⁷⁶

Entitlement to Relief in a Contribution Claim Under § 113(f)(1)

In a contribution claim under § 113(f)(1), "the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate." There are a number of decisions in which courts have stated that the plaintiff in a contribution claim has the burden of proving that there are "equitable factors" that support the allocation of a portion of the plaintiff's response costs to a defendant. In the absence of such proof, the plaintiff is not entitled to relief.

The denial of relief in such circumstances is not grounded upon the plaintiff's failure to establish that the defendant is a liable party under § 107(a). Rather, the entry of judgment is grounded upon a determination that, though the defendant may be a liable party, the plaintiff is not entitled to relief against that defendant. Though a plaintiff is not required, in order to establish a defendant's liability in a contribution claim, to prove that the defendant caused the plaintiff to incur response costs,⁷⁷ a court might conclude that it would not be "equitable" to grant relief against a defendant in such circumstances and therefore decline to allocate any of the plaintiff's response costs to the defendant.

The preceding distinction was explicitly recognized by the Sixth Circuit in Kalamazoo River⁷⁸ In that case, the district court had entered judgment for a defendant in a contribution claim under § 113(f)(1). On appeal, the Sixth Circuit held that the district court had erred in its reason for granting judgment for the defendant. The district court had concluded that a plaintiff in a contribution action had to establish, as a matter of liability, that a defendant had caused the plaintiff to incur response costs. Although the Sixth Circuit, as previously explained, concluded that the district court's reasoning was inconsistent with the language of § 113(f)(1) and § 107(a), the court nevertheless considered whether the district court's action could be affirmed on other grounds. The Sixth Circuit put the question this way:

It has been suggested that the district court's decision could be affirmed on the basis that the court's "threshold of significance standard," rather than reflecting a determination as to liability, may simply have been a determination based on the exercise of its equitable powers under § 113(f) that, even if the defendants were liable, they should nevertheless bear a zero allocation of costs.⁷⁹

It was undoubtedly the defendant who made the "suggestion" described by the court. Presumably the defendant, as appellee in the court of appeals, argued that the district court had not erred in its reasoning with respect to liability. But, as a fallback argument, the defendant "suggested" that, even if the district court had erred in its conclusion that the defendant was not liable, the district court's action, in granting judgment for the defendant, could be affirmed on the ground that the district court had implicitly determined that the plaintiff had not shown "equitable factors" that would support an allocation of any of the plaintiff's response costs to the defendant.

The Sixth Circuit rejected this alternative basis for affirming the entry of judgment for the defendant because, in [32 ELR 10159] the matter before it, the district court had entered judgment after "the liability phase of a bifurcated trial" and "any exercise of its equitable powers at this stage of a bifurcated trial would have been improper."⁸⁰ But the court implicitly recognized that, in the absence of a bifurcated trial, a final judgment for a defendant in a § 113(f)(1) contribution action could be justified on either of two grounds: (1) the plaintiff's failure to establish the defendant's liability; or (2) the plaintiff's failure to prove "equitable factors" entitling it to relief against the defendant. And the court suggested that, in appropriate circumstances, a district court might properly deny relief in a contribution claim under § 113(f)(1), where there is no evidence that the defendant's actions caused the plaintiff to incur response costs.⁸¹ In making such a decision, the district court would not be entering judgment for the defendant because of the plaintiff's failure to establish the defendant's liability; rather, the court would be entering judgment for the defendant because of the defendant's failure to establish "equitable factors" that entitled the plaintiff to relief—that is, an allocation of a portion of the plaintiff's response costs to the defendant.

1. See, e.g., Bedford Affiliates v. Sills, 156 F.3d 416, 423-24, 29 ELR 20229, 20231 (2d Cir. 1998); Centerior Serv. Co. v. Acme Scrap Iron & Metal Corp., 153 F.3d 344, 354, 29 ELR 20065, 20069 (6th Cir. 1998); Pneumo Abex Corp. v. High Point, Thomasville & Denton R.R., 142 F.3d 769, 776, 28 ELR 21261, 21263 (4th Cir. 1998); Sun Co. v. Browning-Ferris, Inc., 124 F.3d 1187, 1194, 27 ELR 21465, 21468 (10th Cir. 1997); Pinal Creek Group v. Newmont Mining Corp., 118 F.3d 1298, 1301-02, 27 ELR 21211, 21212-13 (9th Cir. 1997); New Castle County v. Halliburton NUS Corp., 111 F.3d 1116, 1126, 27 ELR 21159, 21164 (3d Cir. 1997); Redwing Carriers, Inc. v. Saraland Apartments, Ltd., 94 F.3d 1489, 1513-14, 27 ELR 20028, 20039-40 (11th Cir. 1996).

2. 42 U.S.C. § 9613(f)(1), ELR STAT. CERCLA § 113(f)(1).

3. Id. §§ 9601-9675, ELR STAT. CERCLA §§ 101-405.

4. Id. § 9613(l), ELR STAT. CERCLA § 113(l).

5. For a discussion of the distinction between such claims, see the author's monograph (Envtl. L. Inst. forthcoming 2002).

6. 842 F. Supp. 1321, 24 ELR 20923 (D. Kan. 1993).

7. Id. at 1324, 24 ELR at 20925.

8. Id.

9. Id.

10. 116 F.3d 1574, 27 ELR 21318 (5th Cir. 1997).

11. Id. at 1581, 27 ELR at 21321.

12. Id. (emphasis in original).

13. Id. at 1582, 27 ELR at 21321 (emphasis in original).

14. The court in OHM recognized that "few cases have addressed the specific question of whether a non-PRP has a cause of action under [§] 113(f)." Id. The court noted that there was only one case "directly on point." Id. In Companies for Fair Allocation v. Axil Corp., 853 F. Supp. 575, 24 ELR 21581 (D. Conn. 1994), the court held that, under the plain language of § 113(f)(1), "any person" could sue for contribution, so a plaintiff need not be a liable or potentially liable party.

15. The question of the nature of a defendant's liability in a private cost recovery action by a non-liable party is discussed in the author's monograph (Envtl. L. Inst. forthcoming 2002).

16. 116 F.3d at 1582, 27 ELR at 21321-22 (emphasis in original) (internal footnote omitted).

17. Id. at 1582 n.2., 27 ELR at 21322 n.2. The court did not have to address this question because it concluded that OHM "was a defendant in this suit." Id. at 1583, 27 ELR at 21322. In OHM, the defendant had asserted a claim back against OHM in which the defendant alleged that OHM was a liable party under § 107(a).

18. This reading of OHM is confirmed by the court's later decision in Aviall Servs. Inc. v. Cooper Indus. Inc., 263 F.3d 134, 32 ELR 20069 (5th Cir. 2001). In Aviall, a § 113(f)(1) contribution claim was brought by a party that had not been sued under § 107(a) and had not been subjected to a cleanup order under § 106(a). Although the Fifth Circuit held in Aviall that the plaintiff was not entitled to bring a contribution action under § 113(f)(1), this holding was not grounded upon a determination that the plaintiff was not "potentially liable" under § 107(a). Rather, the court held that the plaintiff had not asserted a claim "during or following" a CERCLA action against it. If the court believed that the plaintiff in Aviall was not "potentially liable"—and therefore not entitled to bring a § 113(f)(1) contribution claim—it would have dismissed the plaintiff's contribution claim on that ground. For a discussion of Aviall, see infra notes 19-52 and accompanying text.

19. 263 F.3d 134, 32 ELR 20069 (5th Cir. 2001).

20. Under CERCLA § 106(a), 42 U.S.C. § 9606(a), ELR STAT. CERCLA § 106(a), the Administrator is authorized to issue "such orders as may be necessary to protect public health and welfare and the environment."

21. The majority opinion was authored by Judge Emilio M. Garza (the author of the panel opinion in OHM) and joined by Judge Rhesa H. Barksdale. The third member of the panel, Judge Jacques L. Wiener, dissented.

22. "In short, we hold that, as a matter of statutory text and structure, CERCLA requires a party seeking contribution to be, or have been, a defendant in a § 106 or § 107(a) action." 263 F.3d at 140, 32 ELR at 20071 (internal footnote omitted).

23. A petition for rehearing en banc was granted on December 19, 2001.

24. Even if a person that has voluntarily incurred cleanup costs may bring an action to recover those costs under state law, the state law may be more restrictive than a contribution claim for private response costs under § 113(f)(1).

25. 263 F.3d at 144, 32 ELR at 20072. After recognizing that its holding might serve as a disincentive to voluntary cleanups, the majority asserted that its interpretation of § 113(f)(1) was "wholly consistent with the policy goals of CERCLA." Id. It stated that "Congress wanted only a limited right of contribution when parties are found or alleged to be liable under CERCLA" and that "it seems unlikely that Congress enacted a contribution right broad enough to encompass Aviall's situation, where neither the federal government nor any private party has filed a CERCLA against it, and the EPA has not designated Aviall's Facilities as contaminated sites." Id. And the majority expressed "doubt that our interpretation will necessarily discourage voluntary cleanups" because "parties may be able to rely on state environmental laws to recover costs from other liable parties." Id. at 145, 32 ELR at 20072.

26. In Rumpke of Ind., Inc. v. Cummins Engine Co., 107 F.3d 1235, 27 ELR 20596 (7th Cir. 1997), the Seventh Circuit had suggested, in dicta, that "a § 106 or § 107(a) action apparently must either be ongoing or already completed before § 113(f)(1) is available." Id. at 1241, 27 ELR at 20599.

27. Judge Wiener referred, in particular, to the Fourth Circuit's recent decision in Crofton Ventures Ltd. Partnership v. G&H Partnership, 258 F.3d 292, 31 ELR 20841 (4th Cir. 2001). As Judge Wiener explained:

In Crofton . . . , the Fourth Circuit . . . allowed a § 113 suit by a PRP who, just like Aviall, had notified a state environmental agency of the contamination and then cleaned up the facility. It was of no moment in Crofton that neither an administrative charge nor a § 106 or § 107 action had been brought against the plaintiff in that case.

263 F.3d at 152, 32 ELR at 20075.

28. 263 F.3d at 152.

29. Id. at 138, 32 ELR at 20070.

30. Id.

31. Id. (quoting BLACK'S LAW DICTIONARY 329 (6th ed. 1990)). Judge Garza, the author of the majority opinion in Aviall, had relied upon this same definition in OHM to support the court's conclusion that a non-liable party could not assert a claim for contribution under § 113(f)(1). OHM Remediation Servs. v. Evans Cooperage Co., 116 F.3d 1574, 1582, 27 ELR 21318, 21321 (5th Cir. 1997).

32. 263 F.3d at 138, 32 ELR at 20070.

33. The sources relied upon by Judge Wiener included Black's Law Dictionary, the Restatement (Second) of Torts, and case law. Id. at 148-49, 32 ELR at 20074. The definition of "contribution" in these sources lead Judge Wiener to the following conclusion:

None of these authorities require, as a condition precedent, that a party be sued or adjudged liable before seeking contribution; rather, the right to seek contribution arises independently when one tort-feasor, acting under a legal duty, discharges more than his fair share of a liability shared by other joint tort-feasors.

Id. at 149, 32 ELR at 20074.

34. Id. Judge Wiener went on to state that "far from restricting the right to seek contribution, the 'during or following' language [in § 113(f)(1)] embraces the more expansive Restatement view that a tort-feasor may seek contribution from joint tort-feasors 'even though judgment has not been recovered against all or any of them.'" Id. (quoting RESTATEMENT (SECOND) OF TORTS, § 886A (1997)).

35. The majority made no effort to reconcile its restrictive interpretation of "contribution" with the express authorization, in § 113(f)(1), of contribution claims "during" actions under § 106 or § 107(a).

36. 263 F.3d at 138, 32 ELR at 20070.

37. Id.

38. The fact that the majority interpreted the first sentence in isolation is clearly revealed by the majority's assertion that "if we adopted Aviall's interpretation [of the savings clause], it would render super-fluous the first sentence of § 113(f)(1), the enabling clause." Id. at 139, 32 ELR at 20070. The majority interpreted the first sentence and only then turned to the question of how to interpret the savings clause in the fourth sentence. Since the majority interpreted the first sentence in a way that ignored the permissive, i.e., nonrestrictive, message of the savings clause, it would naturally follow that giving effect to the nonrestrictive message of that clause would "render superfluous" the first sentence of § 113(f)(1), as interpreted by the majority. The asserted inconsistency between the savings clause and the first sentence is a product of the majority's failure to consider the savings clause in interpreting the first sentence. The only way that the majority could eliminate the inconsistency (that its interpretation of the first sentence had created) was to add limiting language to the savings clause—to interpret the savings clause as saving only the right to bring contribution claims under state law.

39. Judge Wiener made this point clearly at the beginning of his opinion, stating that "we cannot simply analyze statutory terms in a vacuum . . . but are constrained to consider them in the context of the statute as a whole." Id. at 145, 32 ELR at 20073. In support of this assertion, Judge Wiener relied upon Gade v. National Solid Wastes Management Ass'n, 505 U.S. 88, 99, 22 ELR 21073, 21076 (1992) ("We must not be guided by a single sentence or member of a sentence, but look to the provisions of the whole law.") (citation omitted).

40. The majority's approach to interpreting the first and fourth sentences of § 113(f)(1) is inconsistent. In interpreting the savings clause in the fourth sentence, the majority recognized that it must interpret that sentence in light of the first sentence. Indeed, the majority's interpretation of the fourth sentence—as saving only contribution claims under state law—was driven by the first sentence (as interpreted by the majority). But, in interpreting the first sentence, the majority ignored the savings clause in the fourth sentence.

41. Part III(B) of the majority opinion, 265 F.3d at 140-41, 32 ELR at 20071.

42. Part III(C) of the majority opinion, id. at 141-44, 32 ELR at 20071.

43. Part III(D) of the majority opinion, id. at 144-45, 32 ELR at 20072.

44. 263 F.3d at 151, 32 ELR at 20075.

45. Id. Judge Wiener caustically stated that:

If, despite the absence of ambiguity in the statute, the majority would invoke legislative history (generally perceived to be a sign of weakness in a proposed reading of a statute), it should at least limit its relevance to that part of the history that addresses the version of the legislation that Congress actually adopted into law.

Id.

46. Id. at 151-55, 32 ELR at 20075-77.

47. See supra note 26.

48. 263 F.3d. at 144, 32 ELR at 20072.

49. Id.

50. As Judge Wiener stated in his dissent, "the overarching goal of CERCLA is to create strong incentives for responsible parties to perform cleanups of sites without waiting for the hammer of litigation to drop." Id. at 155

51. Id. at 145, 32 ELR at 20072.

52. The half-hearted nature of the majority's policy argument is revealed by its assertion that, even if there is a strong policy argument against its interpretation of § 113(f)(1), "text trumps policy preferences, and . . . we cannot substitute Congress' wishes with our own." Id. at 144, 32 ELR at 20072.

53. 42 U.S.C. § 9613(f)(1), ELR STAT. CERCLA § 113(f)(1).

54. 987 F.2d 1335, 23 ELR 20869 (8th Cir. 1993)

56. In Farmland Industries, the question of a contribution plaintiff's burden of proof with respect to liability came up in the context of whether a determination of a defendant's liability in an earlier government cost recovery action should be accorded collateral estoppel effect in a subsequent action brought by a private party. In the later action, the private party plaintiff, Farmland Industries, sought a declaratory judgment that the defendant would be liable for any response costs incurred by the plaintiff in cleaning up a contaminated site. The plaintiff asked for a ruling that the determination of the defendant's liability in the earlier government cost recovery action should have collateral estoppel effect with respect to the defendant's liability in the second action. The district court denied the requested ruling and the Eighth Circuit affirmed, based upon its determination that "a private party cannot predicate a claim for contribution or indemnity solely upon [§ 107(a)] liability to the government, but must also prove causation." 987 F.3d at 1340, 23 ELR at 20871.

57. 228 F.3d 648, 31 ELR 20169 (6th Cir. 2000).

58. Id. at 656, 31 ELR at 20171 (internal footnote omitted). As the court's citations make clear, the Eleventh Circuit has also concluded that "the elements of a claim" under both § 107(a) and § 113(f) "are the same." Redwing Carriers, Inc. v. Saraland Apartments, Ltd., 94 F.3d 1489, 1496, 27 ELR 20028, 20030-31 (11th Cir. 1996).

59. Section 107(a) imposes liability upon various categories because of their relationship to a site "from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance." 42 U.S.C. § 9607(a), ELR STAT. CERCLA § 107(a).

60. The language of § 107(a) that supports this assertion is examined in Chapter 4 of the author's monograph (Envtl. L. Inst. forthcoming 2002).

61. For a more complete discussion of the distinct causation questions that have been presented in CERCLA litigation, see John M. Hyson, The Plaintiff's Burden in CERCLA Contribution Actions: Unscrambling the First Circuit's Acushnet Decision, 31 ELR 10180, 10188-195 (Feb. 2001).

62. 920 F.2d 1415, 21 ELR 20453 (8th Cir. 1990).

63. Id. at 1417, 21 ELR at 20454.

64. 987 F.2d at 1340, 23 ELR at 20871.

65. 264 F.3d 692, 32 ELR 20006 (6th Cir. 2001).

66. Id. at 696, 32 ELR at 20007.

67. 53 F.3d 930, 25 ELR 21378 (6th Cir. 1995).

68. Id. at 935, 25 ELR at 21379.

69. 264 F.3d at 696, 32 ELR at 20007.

70. Id.

71. For a discussion of the nature of the plaintiff's burden, in two-site cases, to prove that a particular off-site release (or threatened release) causes the incurrence of a plaintiff's response costs, see Chapter 6 of the author's monograph (Envtl. L. Inst. forthcoming 2002).

72. 42 U.S.C. § 9607(a)(2), ELR STAT. CERCLA § 107(a)(2).

73. 53 F.3d at 935, 25 ELR at 21379 (emphasis added).

74. The decision in Bob's Beverage illustrates an unfortunate tendency on the part of many courts to discuss "causation" without referring to the language of § 107(a) and without recognizing that there are distinct issues of causation under CERCLA. As a result, the courts fail to recognize that a holding requiring proof of "causation" in one situation is not relevant to a case that presents a different issue of causation.

75. Kalamazoo River Study Group v. Menasha Corp., 228 F.3d 648, 656, 31 ELR 20169, 20171-72 (6th Cir. 2000).

76. Even though it is irrelevant, for purposes of determining a defendant's liability in a contribution claim, whether the defendant caused the plaintiff to incur response costs, such evidence would constitute an "equitable factor" that the court may consider in determining the extent to which the court will allocate any of the plaintiff's response costs to a defendant. For a discussion of the relevance of such evidence of"causation" in allocating response costs, see Chapter 8 of the author's monograph (Envtl. L. Inst. forthcoming 2002).

77. See discussion beginning at supra note 53 and accompanying text.

78. 228 F.3d at 648, 31 ELR at 20169.

79. Id. at 657, 31 ELR at 20172 (emphasis added).

80. Id. at 657-58, 31 ELR at 20172 (internal footnote omitted).

81. For a discussion of the significance of "causation" in determining the "equitable factors" that warrant relief in a § 113(f)(1) contribution claim, see Chapter 8 of the author's monograph (Envt). L. Inst. forth-coming 2002).