Eighth Circuit "clarifies" issues left unresolved in U.S. Supreme Court's Atlantic Research and Cooper Industries opinions

Eighth Circuit "clarifies" issues left unresolved in U.S. Supreme Court's Atlantic Research and Cooper Industries opinions

In 1983, the City sought to restore a long closed well for use as a drinking water resource.  It received complaints re taste and odor.  The State of Nebraska and EPA investigated, and ultimately the site was added to the NPL in 1986.  EPA determined that the VOC contamination originated from seven source areas (or subsites), 3 of which were at issue in the 8th Cir. opinion noted below.  Hazardous substances from each of the subsites entered the City's groundwater and were remediated in part by the operation of a groundwater extraction and treatment system located down-gradient of the three subsites. 

In 1985 and 1986, the EPA notified a number of entities, including Morrison Enterprises, the City of Hastings, and Dravo Corp., that they were potentially liable under CERCLA for releases and threatened releases of hazardous substances at the Site.  At two of the subsites the PRP entered into a consent decree.  At the third, EPA issued a unilateral administrative order, followed by a Section 107 CERCLA lawsuit, ultimately followed by a consent decree.  Later, lawsuits were filed alleging CERCLA 107 claims, 113(g)(2) dec relief, a multiple common law and statutory claims under state law, and breach of contract.  Cross-claims followed eventually.  The District Court granted summary judgment to the operator on the cost-recovery claims. Appellants then sought review.

In Morrison Enters., LLC v. Dravo Corp., 2011 U.S. App. LEXIS 6821 (8th Cir. 4/5/11), the Eighth Circuit addressed the issues raised.  A key issue was one left unresolved by the U.S. Supreme Court in its Atlantic Research and Cooper Industries opinions.  The Court reiterated that the Supreme Court had held that the right to bring a cost-recovery action under Section 107 "is available to parties who have incurred necessary costs of response, but have neither been sued nor settled their liability under Sections 106 or 107... [L]iable parties which have been subject to Section 106 or 107 enforcement actions are still required to use Section 113."  The Court noted that Appellants and the site operator had been found liable for releases of hazardous substances and had incurred costs related to contaminated groundwater.  The parties had entered into settlement agreements with the Environmental Protection Agency requiring them to remediate the contamination.

As a result the Court found that a contribution action under 42 U.S.C. § 9613(f) provided appellants' exclusive remedy with regard to operation of a treatment system at issue because they had been subject to enforcement actions under 42 U.S.C. §§ 9606 and/or 9607.  Appellants did not "voluntarily" clean up contamination for which the operator was legally liable, since they were obligated so to do under the "settlement agreements."  Thus, the Appellants and the operator shared liability for contaminating the groundwater and for operating the treatment system, which was sufficient to support a § 9613(f) contribution claim.

The city's claims arising from relocation of its water supply system were deemed untimely under § 9613(g)(2); the relocation was deemed a remedial action rather than a removal action, as the work lacked the immediacy and relatively short duration of a removal, nor did the claim qualify as a subsequent action.