By David J. Scriven-Young

In an opinion issued on January 17, 2007, the United States Court of Appeals for the Seventh Circuit ruled that a potentially responsible party (PRP) can bring a claim for contribution against another PRP under § 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) in certain circumstances.  Metro. Water Reclamation Dist. v. N. Am. Galvanizing & Coatings, Inc., No. 05-3299, 2007 U.S. App. LEXIS 913 (7th Cir. Jan. 17, 2007).

In the late 1940s, Metropolitan Water entered into a lease with Lake River Corporation, a wholly owned subsidiary of North American.  Lake River developed the property by constructing a facility to store, mix, and package industrial chemicals.  Over the course of Lake River’s tenancy, certain aboveground storage tanks allegedly spilled close to 12,000 gallons of industrial chemicals into the soil and groundwater.  After spending approximately $1.8 million in remedying the contamination allegedly caused by Lake River, Metropolitan Water sued Lake River and North American under CERCLA §§ 107(a) and 113(f) to recoup those costs.  North American moved to dismiss; the District Court dismissed the § 113(f) claim but ruled that Metropolitan Water could proceed on the § 107(a) claim.

The Seventh Circuit affirmed the District Court’s dismissal of the § 113(f) claim.  CERCLA   § 113(f), 42 U.S.C. § 9613(f), provides that a PRP can make a claim for contribution against another PRP, but only “during or following any civil action under section 106 or under section 107(a)”.  Citing the U.S. Supreme Court’s opinion in Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157 (2004), the Seventh Circuit ruled that Metropolitan Water cannot bring suit under   § 113(f) “because it has not been the subject of an action for damages or compliance under CERCLA.”  Metro. Water, 2007 U.S. App. LEXIS 913 at *18.  In other words, the Seventh Circuit ruled that, although Metropolitan Water was a PRP (because it was the owner of the contaminated property), it could not bring a § 113(f) contribution claim because it incurred the clean-up costs voluntarily without being sued under CERCLA.

The Seventh Circuit also affirmed the District Court’s ruling that Metropolitan Water could proceed on the § 107(a) claim.  CERCLA § 107(a), 42 U.S.C. § 9607(a), provides that four statutorily defined categories of parties “shall be liable for” the government’s remedial and removal costs, and for “any other necessary costs of response incurred by any other person consistent with the national contingency plan.”  The Seventh Circuit ruled that § 107(a) authorizes a cause of action by PRPs in Metropolitan Water’s situation.  The Court based its ruling on “the Supreme Court’s continued recognition of an implied cause of action in § 107(a), coupled with that subsection’s plain language”.  Metro. Water, 2007 U.S. App. LEXIS 913 at *31.  In so ruling, the Court followed similar rulings by the U.S. Court of Appeals for the Second and Eighth Circuit, and it rejected the opposing view of the U.S. Court of Appeals for the Third Circuit.  See Consol. Edison Co. of N.Y., Inc. v. UGI Utilities, Inc., 423 F.3d 90 (2d Cir. 2005) (allowing certain PRPs to bring contribution claims under CERCLA § 107(a)); Atl. Research Corp. v. United States, 459 F.3d 827 (8th Cir. 2006) (same); E.I. DuPont de Nemours & Co. v. United States, 460 F.3d 515 (3d Cir. 2006) (ruling that PRPs can only make contribution claims under § 113(f)).

The Seventh Circuit cautioned that its ruling would not apply to contribution claims under § 107(a) “by and between jointly and severally liable parties for an appropriate division of the payment one of them has been compelled to make”; these claims must be made under § 113(f).  Metro. Water, 2007 U.S. App. LEXIS 913 at *34.  Therefore, the Court was not required to revisit its opinion in Akzo Coatings, Inc. v. Aigner Corp., 30 F.3d 761 (7th Cir. 1994), in which the Court held that a contribution claim must be made under § 113(f) (and not § 107(a)), where the plaintiff, before bringing suit against another PRP, had been the subject of an EPA administrative order under § 106 requiring the plaintiff and several other liable persons to conduct emergency removal activities.  The Metropolitan Water Court distinguished the two cases in the following manner: “Here . . . there has been no EPA order and no proceeding apportioning necessary costs of response to Metropolitan Water.  Thus, unlike in Akzo, Metropolitan Water had not been compelled to initiate cleanup or repay the EPA, and Metropolitan Water’s action against North American is not an action for an appropriate division of the payment one of them has been compelled to make.”  Metro. Water, 2007 U.S. App. LEXIS 913 at *34-35.

David J. Scriven-Young is an attorney with the Chicago, Illinois office of McDermott Will & Emery LLP practicing environmental, energy, natural resources, products liability, and mass tort law (dscriven-young@mwe.com).  He is chair of the YLD Environment, Energy, and Resources Law Committee and YLD Liaison to the ABA Standing Committee on Environmental Law.