Background

In Guam, the Territory of Guam sought to compel the US Navy to pay for the remediation of the Ordot Dump, a Superfund site where the Navy allegedly disposed of toxic waste for decades.

The Ordot Dump was placed on CERCLA’s National Priorities List for cleanup in 1983 by the Environmental Protection Agency. In 1988, the EPA recognized the Navy as a potentially liable party for the site because it was the former owner.

The federal government filed a Clean Water Act lawsuit against Guam in 2002 to prevent pollutants from the dump from reaching a nearby river. Guam reached a settlement of the Clean Water Act claims with EPA in 2004 that required the Territory to stop water pollution by closing and burying the landfill.

The Litigation

LAWSUIT FILED

Guam filed a lawsuit against the Navy in 2017 after determining that the cost of remediation might be as high as $160 million. Guam asserted claims under two CERCLA provisions. CERCLA §107(a) allows recovery of costs for a “removal or remedial action” from “any person who at the time of disposal of any hazardous substance owned or operated any facility at which hazardous substances were disposed of.” CERCLA §113(f)(3)(B) allows a person to seek contribution if it 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 a[]… judicially approved settlement agreement [with the United States or a state].”

CERCLA

The US Court of Appeals for the District of Columbia Circuit ruled that cost-recovery actions under §107(a) and contribution proceedings under §113(f)(3)(B) are mutually exclusive. The DC Circuit held that because Guam had a CERCLA §113 claim, it could not pursue a CERCLA §107 claim. Guam’s contribution action was blocked by a three-year statute of limitations that began on the day of the settlement with EPA, according to the court. Taken together, this decision left Guam with no CERCLA remedy. From Guam’s perspective, the court’s decision was harsh because the Navy “deposited deadly armaments and chemicals in the Ordot Dump for decades and left Guam to foot the tab.”

Guam argued before the Supreme Court that because its Clean Water Act agreement with the EPA was not a settlement of CERCLA-specific liabilities, it could not trigger CERCLA’s §113 three-year statute of limitations. The government contended that the reference to “response expenses” in §113(f)(3)(B) might refer to cleanups under any environmental statute.

The Decision

The Court agreed with Guam that only CERCLA-specific settlements may trigger a §113 claim. While the Court acknowledged that, “as the Government points out, remedial measures that a party takes under another environmental statute might resemble steps taken in a formal CERCLA ‘response action’”, it held that relying on “functional overlap” to interpret §113 goes beyond Congress’ actual language.

The Court’s decision in Guam resolved an issue that has been a headache for environmental litigators for years. We can expect future litigation concerning the level of detail needed to qualify for a “CERCLA-specific” settlement.