The Third Circuit Parts Ways with the Second Circuit When it Comes to Contribution Rights Under CERCLA

In Trinity Industries, Inc. v. Chicago Bridge & Iron Co., the Third Circuit Court of Appeals held that a party that has resolved its environmental liability only under state law may nevertheless pursue contribution from other responsible parties under the federal CERCLA statute, at least in some instances.

Trinity was the owner of an industrial property from 1988 to 2000. In 2006, the State of Pennsylvania initiated an enforcement action against Trinity, which prompted the former property owner to enter a Consent Order with the State’s Department of Environmental Protection (“DEP”) pursuant to Pennsylvania’s Hazardous Sites Cleanup Act (“HSCA”) and Land Recycling and Environmental Remediation Standards Act (“LRA”). Under the Consent Order, Trinity agreed to fund and conduct response actions at the property, but expressly reserved its right to pursue cost recovery and contribution against other responsible parties. Subsequently, Trinity brought a contribution action against Chicago Bridge & Iron Co. (“CB&I”), also a former property owner, under § 113(f)(3)(B) of the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”).

Following precedent from the Second Circuit, the District Court for the Western District of Pennsylvania granted CB&I’s motion for summary judgment and dismissed Trinity’s CERCLA claim. The District Court reasoned that a party in Trinity’s position could seek contribution under § 113(f)(3)(B) only after it had resolved its CERCLA liability. Since the Consent Order only resolved Trinity’s liability under state law, the District Court held that Trinity had no right to seek contribution under CERCLA.

The Third Circuit Court of Appeals rejected the District Court’s interpretation and, in so doing, parted ways with the Second Circuit’s precedent on this issue. Looking to the express language of the statute, the Third Circuit noted that Section 113(f)(3)(B) requires only a resolution of liability “to the United States or a State for some or all of a response action.” The statute does not specify that the response action in question must have originated under CERCLA. The Court found further support for its holding in the fact that the state statutes referred to in the Consent Order “bear a strong resemblance” to CERCLA. Indeed, specific provisions in the LRA not only reference CERCLA, but specifically state that the LRA’s remediation standards are applicable, relevant and appropriate requirements under CERCLA, and that compliance with those standards relieves a party of further liability for remediation under CERCLA. Thus, the Circuit Court concluded, “remediation pursuant to the LRA is remediation under CERCLA.” Accordingly, the Circuit Court vacated and remanded the District Court’s grant of summary judgment as to the CERCLA § 113(f)(3)(B) claim.

It is unclear to what extent the similarity between state and federal statutes will be a determinative factor in any future disputes of this nature. What is clear is that the Third Circuit’s decision removes, for sites within their circuit, a limitation that has been read into the statute by at least some courts (i.e., the requirement that a party first resolve its CERCLA liability in particular), with respect to contribution actions under § 113(f)(3)(B).

Adam C. Arnold is an Associate in the Gibbons Real Property & Environmental Department.
Print