Supreme Court Clarifies CERCLA Provisions for Recouping Cleanup Costs

Supreme Court Clarifies CERCLA Provisions for Recouping Cleanup Costs

Legal Sidebari

Supreme Court Clarifies CERCLA Provisions
for Recouping Cleanup Costs
June 16, 2021
On May 24, 2021, the Supreme Court issued an opinion in Guam v. United States that could expand the
ability to recover cleanup costs under the Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA). CERCLA, the “Superfund” statute, provides two avenues for lawsuits to recoup
costs for the cleanup of contaminated sites. The Guam decision clarified the relationship between these
separate CERCLA provisions.
This Sidebar explains CERCLA’s framework for parties to recoup cleanup costs, discusses the Guam
decision, and considers the implications of the decision. As discussed below, the Court’s ruling allows the
Territory of Guam to proceed with its cost-recovery claim against the United States for costs associated
with cleaning up the Ordot Dump. More broadly, the ruling could expand parties’ ability to recover
cleanup costs, particularly from federal agencies that bear some responsibility for contaminating a given
site. It could also alter the scope and timing of settlement negotiations to resolve liability under CERCLA
and other environmental statutes.
Background on CERCLA
Congress enacted CERCLA to clean up the release of hazardous substances, pollutants, or contaminants
across the United States and to hold the parties connected to those sites responsible for cleanup costs.
CERCLA provides that “potentially responsible parties” (PRPs) may be compelled to perform or pay for
the cleanup of contaminated sites. The statute includes two provisions that allow parties that incur cleanup
costs to recoup all or part of their costs from PRPs: cost-recovery actions under Section 107(a)(4)(B), and
contribution actions under Section 113(f). A federal agency may face liability under either provision if its
connection to a site renders it a PRP.
First, Section 107(a)(4)(B) of CERCLA allows any person to sue a PRP to recover “any other necessary
costs of response” that that person has incurred. These lawsuits are known as “cost-recovery” actions.
Cost-recovery actions under Section 107(a) are subject to a six-year statute of limitations, which begins
upon the initiation of the remedial action (typically a long-term, permanent remedy for the contaminated
site).
Congressional Research Service
https://crsreports.congress.gov
LSB10609
CRS Legal Sidebar
Prepared for Members and
Committees of Congress

Congressional Research Service
2
Second, Section 113(f) allows a PRP that has been required to pay response costs to someone else to
assert a contribution claim against other PRPs in court to compel those PRPs to bear an equitable share of
those costs. As relevant to this case, Section 113(f)(3)(B) provides:
A person that has resolved its liability to the United States or a State for some or all of a response
action or for some or all of the costs of such action in an administrative or judicially approved
settlement may seek contribution from any person who is not party to a settlement referred to in
[Section 113(f)(2)].
Contribution actions under Section 113(f) are subject to a three-year statute of limitations, which begins
on “the date of judgment in any action under [CERCLA] for recovery of [response] costs” or the “entry of
a judicially approved settlement with respect to such costs.”
A party that may bring a Section 113(f) contribution action must proceed under Section 113(f), and is
barred from proceeding with a cost-recovery action under Section 107(a). Because a claim might be
timely under Section 107(a) but not under Section 113(f), parties in litigation over a site have sometimes
disputed the characterization of prior settlements to address contamination at that site in order to advance
arguments about whether a party’s claims are timely and thus may go forward.
The Guam Litigation
Guam v. United States concerns the cleanup of a site known as the Ordot Dump, which, until its closure in
2011, was the only public landfill on the island of Guam. From 1898 until 1950, the U.S. Navy had
jurisdiction over Guam, and deposited waste at the Ordot Dump, which lacked basic environmental
safeguards. After Guam was organized as a United States territory in 1950, the newly formed civilian
government accepted waste and stored it in open, unlined ravines at the Ordot Dump, and the Navy
continued to deposit waste at the dump as well. Over time, contaminants from the Ordot Dump leached
into a nearby river and its tributaries, which ultimately flow into the Pacific Ocean.
The U.S. Environmental Protection Agency (EPA) sued Guam in 2002, alleging that the discharge of
untreated leachate from the Ordot Dump violated the Clean Water Act. Guam and EPA resolved that
litigation in 2004 by entering into a consent decree that required Guam to pay a civil penalty and close
and cover the dump. The consent decree provided that Guam’s compliance with its terms would constitute
“full settlement and satisfaction” of the claims the United States alleged in the complaint. It also reserved
the United States’ ability to raise future claims other than those alleged in the complaint.
In 2017, Guam sued the United States under CERCLA, alleging that the Navy was responsible for the
contamination at the Ordot Dump. Guam asserted both a CERCLA Section 107(a) cost-recovery claim
seeking “removal and remediation costs” related to the landfill, and, in the alternative, a contribution
action pursuant to Section 113(f).
The U.S. District Court for the District of Columbia ruled that Guam could proceed with its cost-recovery
action. On interlocutory review, the D.C. Circuit reversed and remanded. The D.C. Circuit held that the
2004 consent decree triggered a contribution claim under Section 113(f) by resolving Guam’s liability to
the United States, thus also barring Guam from seeking cost recovery under Section 107(a). Although the
2004 consent decree resolved claims under the Clean Water Act, not CERCLA, the D.C. Circuit held that
Section 113(f)(3)(B) “does not require a CERCLA-specific settlement” before a party may pursue a
contribution claim (and therefore may not pursue a cost-recovery claim). In so holding, the D.C. Circuit
joined the Third, Seventh, and Ninth Circuits, and differed from the Second Circuit. Analyzing the terms
of the consent decree, the court ruled that the settlement required Guam to take action that qualified as a
“response action” under CERCLA and released Guam from liability for the Clean Water Act claim, thus
resolving Guam’s liability to the United States. Because the three-year statute of limitations for Guam’s

Congressional Research Service
3
Section 113(f) contribution claim began with the entry of the 2004 consent decree and thus had already
run, the D.C. Circuit held that Guam could not pursue a contribution claim against the United States.
The Supreme Court’s Decision
The Supreme Court granted certiorari to review two questions: (1) whether a non-CERCLA settlement
can form the basis for a Section 113(f)(3)(B) contribution claim, thereby precluding a Section 107(a) cost-
recovery claim; and (2) whether a settlement that includes liability disclaimers and reservations of rights
can trigger a Section 113(f)(B) contribution claim. In a unanimous opinion authored by Justice Thomas,
the Court reversed the D.C. Circuit’s judgment and remanded for further proceedings. As to the first
question, the Court held that a settlement must resolve a CERCLA-specific liability to trigger a Section
113(f)(3)(B) contribution action. Conversely, settlements that resolve liability under other environmental
statutes do not trigger contribution rights or foreclose Section 107(a) cost-recovery actions under
CERCLA. The Court determined that it only needed to address the first question to decide the case, and
thus declined to reach the second question.
The Court held that the text and structure of CERCLA and Section 113(f) tie contribution rights to
liability under CERCLA. Reviewing the “interlocking language and structure of the relevant text,” the
Court began by describing the key features of Section 113(f)’s three components. The Court explained
that Section 113(f) “centers on and is entitled ‘contribution.’” It ruled that a party’s entitlement to seek
contribution after resolving its liability through a settlement “does not stand alone,” but instead must be
read within the specific context of Section 113(f), which outlines the broader workings of CERCLA
contribution.
Next, considering the nature of contribution suits, the Court concluded that a party’s right to seek
contribution after resolving its liability through a settlement must remain “within the bounds of
CERCLA.” The Court explained that contribution suits “[do] not exist in a vacuum” but rather are a “tool
for apportioning the burdens of a predicate ‘common liability’ among” PRPs. The Court reasoned that
CERCLA presented the “most obvious place” to find the threshold liability that is apportioned through
contribution suits. The Court also observed that there is no “‘general federal right to contribution.’”
Instead, contribution suits “are virtually always a creature of a specific statutory regime.”
Reading each provision in Section 113(f) sequentially as “integral parts of a whole,” the Court concluded
that all three provisions either explicitly or implicitly presume that CERCLA liability is necessary to
trigger contribution rights. In particular, the Court pointed to the statement in Section 113(f)(3)(B) that
contribution is available “from any person who is not party to a settlement referred to in” Section
113(f)(2). The Court described Section 113(f)(2) as mirroring Section 113(f)(1)’s anchor provision, which
expressly contemplates a predicate CERCLA liability.
The Court determined that Section 113(f)(3)(B)’s use of the term “response action” further ties Section
113(f)(3)(B) to the CERCLA regime. The Court wrote that “response action” is “a familiar CERCLA
phrase that appears dozens of times throughout the Act.” While the Court agreed with the United States
that remedial measures taken under another environmental statute may resemble the steps taken in a
CERCLA “response action,” it concluded that such a functional overlap was not a sufficient basis for
interpreting Section 113(f)(3)(B) as providing a contribution claim whenever a party settles an
environmental liability that “might have been actionable under CERCLA.” The Court also considered the
requirement that a party have “resolved its liability” in order to trigger the availability of a contribution
action, specifying that the term “resolve” “conveys finality and certainty.” The Court reasoned that its
narrower reading would avoid the “rather odd” result that a party could have “resolved its liability” and
yet remain vulnerable to a CERCLA suit.

Congressional Research Service
4
Implications of the Court’s Decision
The immediate practical effect of the Supreme Court’s ruling is that Guam may now proceed with its
Section 107(a) cost-recovery claim in the district court because its Clean Water Act settlement did not
give rise to a contribution claim under Section 113(f)(3)(B). Notwithstanding the Court’s review, the case
is still in its early stages, and neither the Court’s opinion nor any lower-court decision to date has
addressed the merits of Guam’s claim. CERCLA provides many defenses to liability that could limit the
United States’ obligation to compensate Guam. Furthermore, although CERCLA provides for joint and
several liability—meaning that any single PRP may be held liable for all of the response costs associated
with a cleanup—a party may file a counterclaim for contribution under Section 113(f) to reduce the extent
of its financial obligation in the event it is found liable. In this instance, Section 113(f) may allow the
United States to file a counterclaim against Guam for an equitable apportionment of response costs, but
the United States has not yet filed any counterclaims in this litigation. Accordingly, it is not possible at
this time to determine whether Guam will succeed in establishing that the United States is liable—or, if
Guam succeeds, how much of its response costs (estimated at $160 million, or nearly one-fifth of Guam’s
annual budget) will be recovered from the United States.
The litigation with Guam arises out of the United States’ status as both an enforcer of federal
environmental laws (through EPA, in this case) and a possible PRP under CERCLA (in light of the
Navy’s historic involvement in the operation of the Ordot Dump). This posture is hardly unique to this
case. Currently, there are 159 current or proposed federal sites on the Superfund National Priorities List,
which identifies high-priority sites for investigation and cleanup. The federal government plays a dual
role at many of those sites across the country. During the proceedings before the Supreme Court,
commentators—including a group of 24 states, the Commonwealth of the Northern Mariana Islands, and
the District of Columbia, which filed an amicus brief in support of Guam—expressed concern that the
United States should not be able to craft settlements of federal enforcement actions under other statutes
that would allow federal PRPs to evade CERCLA liability. Following the Supreme Court’s ruling, if a
private party resolves its liability to the United States under a statute other than CERCLA for
environmental harm at a particular site, it may still be able to bring a cost-recovery action against the
United States under CERCLA in connection with the federal government’s involvement at a site.
As the Supreme Court acknowledged, there is sometimes a functional overlap between CERCLA
response actions and cleanup activities undertaken to resolve liability under environmental laws. The
Court described its interpretation of Section 113(f)(3)(B) as requiring that a prior settlement expressly
resolve CERCLA liability as “the far simpler approach” compared to a case-by-case analysis of whether
an earlier settlement was “close enough to CERCLA.” In the future, parties like Guam that are resolving
their non-CERCLA liability through settlement may need to consider an additional point: they may either
limit the scope of those non-CERCLA settlements, thereby leaving themselves vulnerable to additional
litigation, in order to protect their ability to bring a CERCLA cost-recovery claim later; or they may
resolve their liability more broadly, including any potential CERCLA liability, but foreclose their ability
to bring a future cost-recovery claim and begin the three-year period to bring a contribution claim. It is
also possible, as the United States warned in its brief, that a settling party invoking Section 107(a) could
choose when the statute of limitations period begins to run by deciding when to begin on-site construction
of a remedial action, which could delay the timely cleanup of and settlements regarding contaminated
sites. Such a delay may not be possible, however, if a non-CERCLA settlement requires the settling party
to take cleanup action within a specific timeframe.

Congressional Research Service
5
Considerations for Congress
Congress added Section 113 to CERCLA in the Superfund Amendments and Reauthorization Act of 1986
to clarify that parties that are “liable under CERCLA [can] seek contribution from other potentially liable
parties.” See H.Rept. 99-253, pt. 1, at 79 (1985). Since then, courts have struggled with the intersection of
CERCLA’s cost-recovery and contribution provisions, acknowledging that “the supposedly sharp
distinction” between the mutually exclusive causes of action “does not always play out in practice.” This
is the second Term in a row in which the Supreme Court has attempted to clarify technically detailed
questions about the interplay of different provisions in CERCLA.
Notwithstanding the Court’s ruling, if Congress believes the United States’ broader reading of Section
113(f)(3)(B) is the correct one, it could amend CERCLA to specify that a “response action” need not be
pursuant to CERCLA in order to trigger Section 113(f) contribution rights. Congress could also amend
CERCLA to address the question left unaddressed by the Court, i.e., whether a settlement that disclaims
liability or reserves a party’s rights can resolve liability sufficient to trigger Section 113(f)(3)(B).

Author Information

Kate R. Bowers

Legislative Attorney

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff
to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of
Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of
information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.
CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United
States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However,
as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the
permission of the copyright holder if you wish to copy or otherwise use copyrighted material.

LSB10609 · VERSION 1 · NEW