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October 2nd, 2017
environmental
NINTH CIRCUIT PROVIDES GUIDANCE ON CERTAINTY AND FINALITY REQUIREMENTS IN CERCLA CONTRIBUTION ACTIONS

The Ninth Circuit Court of Appeals vacated a District Court’s summary judgment in favor of the defendant in a contribution action under CERCLA, finding mining company Asarco timely brought a claim to recoup compensation from Atlantic Richfield.  Asarco, LLC v. Atlantic Richfield Co., No.14-35723 (9th Cir., August 10, 2017).   CERCLA § 113(f) provides that after a party has, pursuant to a settlement agreement, resolved its liability for a “response” action or the costs of such an action, that party may seek contribution from any person who is not a party to the settlement. 

The Court’s opinion addresses three issues of first impression in the Ninth Circuit regarding contribution litigation under CERCLA.  First, the Court agreed with the District Court’s holding that a settlement agreement entered into under an authority other than CERCLA may give rise to a CERCLA contribution action.  Second, the Court upheld the District Court’s finding that the settlement agreement, which was entered into pursuant to a 1998 RCRA Decree, qualified as a “response” under CERCLA. 

However, the Court reversed the District Court’s finding that the claims were barred by three-year statute of limitations.  The Court found Asarco did not resolve its liability for response costs at the site pursuant to the 1998 RCRA Decree with “certainly and finality.” As such, Asarco could not have brought its contribution action in 1998, and the statute of limitations did not begin to run with entry of the 1998 RCRA Decree. The Court found that a later, 2009 CERCLA decree entered into between Asarco and the United States in Asarco’s bankruptcy proceedings did resolve Asarco's liability.  Since Asarco filed its contribution action within the three-year limitations period, it is timely.

In reaching its decision, the Court noted the terms of the RCRA Decree resolved liability for civil penalties only and reserved all authority of the U.S. to take other actions under CERCLA and other statutes.  The Court, contrary to decisions in the Sixth and Seventh Circuits, also held that a party’s non-admission of liability does not prevent a finding of certainty and finality.   While the Court’s opinion clarified what it would require by way certainty and finality, the test of certainty and finality will require a case by case analysis.

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