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May 24, 2021

Supreme Court Decides Guam v. United States

On May 24, 2021, the U.S. Supreme Court decided Guam v. United States, holding that contribution under CERCLA does not arise until there is a CERCLA-specific liability, even if there is a settlement that resolves liability under other environmental laws.

The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”) establishes a complex statutory scheme for responding to and resolving environmental hazards. As relevant here, CERCLA also establishes two remedies for states and territories seeking to share the cost of resolving environmental hazards. First, Section 107(a) provides states and territories with a “cost-recovery” remedy, entitling them to recover the costs of removing or remediating environmental hazards from former owners or operators of hazardous sites. Second, Section 113(f)(3)(B) entitles a state or territory 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 [a] settlement” to seek contribution from other responsible individuals. Pertinent here, there is a three-year statute of limitations for contribution.

In the 1940s, the United States Navy constructed the Ordot Dump in Guam and allegedly deposited toxic military waste there for several decades. Eventually, the United States ceded control of the dump to Guam, which continued using the site as a landfill. In the late 20th century, the Environmental Protection Agency (“EPA”) determined that the Ordot Dump posed an ecological hazard and directed Guam to remediate the site. When Guam failed to do so, the EPA sued Guam under the Clean Water Act. Guam and the EPA resolved the Clean Water Act litigation in 2004 with a consent decree pursuant to which Guam paid a civil penalty and closed and covered the Ordot Dump. Guam’s compliance with the decree would operate to fully release Guam’s liability under the Clean Water Act, but other potential liability expressly remained open.

Thirteen years later, Guam sued the United States under CERCLA, seeking to recover the costs of remediating the Ordot Dump, either pursuant to the cost-recovery provision under section 107(a) or, in the alternative, contribution under section 113(f)(3)(B). The D.C. Circuit held that the existence of a viable contribution claim negated the basis for a cost-recovery claim and concluded that the 2004 consent decree satisfied the statutory predicate for a contribution claim. It nevertheless ordered Guam’s suit dismissed because it determined that Guam’s contribution claim was barred by CERCLA’s three-year statute of limitations. Guam then sought certiorari, arguing that it had never possessed a valid contribution claim because CERCLA dictates that only a settlement of CERCLA-specific environmental liability gives rise to a contribution claim under section 113(f)(3)(B).

The Supreme Court agreed, reversing the D.C. Circuit and holding that the 2004 consent decree did not give rise to a CERCLA contribution claim because that consent decree resolved only Clean Water Act claims, not CERCLA claims. The Court noted that section 113(f)(3)(B) is within a subsection of CERCLA contribution remedies that are “concerned only with the distribution of CERCLA liability.” The Court also noted that contribution remedies are generally “creature[s] of a specific statutory regime,” making it difficult “to treat § 113(f)(3)(B) as a free-roving contribution right for a host of environmental liabilities arising under other laws.” Finally, the Court noted that section 113(f)(3)(B)’s reference to a “settlement” is naturally understood “only with reference” to other CERCLA subsections that “require[] a predicate CERCLA liability.”

The Court rejected the government’s argument that section 113(f)(3)(B)’s use of the term “response action” was broad enough to capture settlement of non-CERCLA-specific liability, noting that “response action” “is a familiar CERCLA phrase that appears dozens of times throughout” the statute, further tying a section 113(f)(3)(B) contribution action to predicate liability under CERCLA.

Justice Thomas authored the opinion for a unanimous Court.

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