Better Safe Than Sorry: CERCLA Contribution Actions And The Operative Statute Of Limitations

The Comprehensive Environmental Response Compensation and Liability Act (CERCLA)1 is a dynamic, constantly evolving area of law. Because of this, interpretations of the statute can vary drastically from jurisdiction to jurisdiction. Thus, it is imperative that practitioners are aware of how certain areas of CERCLA are interpreted in different jurisdictions across the country. One important example of a divergence in CERCLA law is whether judicially approved settlements of environmental liabilities that do not specifically resolve CERCLA liability trigger the statute of limitations for CERCLA contribution claims. The Second Circuit Court of Appeals and Third Circuit Court of Appeals have reached starkly different conclusions on this issue, and are the only two circuits to have addressed this issue. In the Second Circuit, the statute of limitations for a contribution action under Section 113(f)(3)(B) of CERCLA does not begin to run if a settlement with a state does not mention CERCLA and only resolves liability for state law claims. The Second Circuit's decision conflicts with the Third Circuit, which has ruled that the statute of limitations for a contribution action under Section 113(f)(3)(B) of CERCLA begins to run when a party settles its state law environmental cleanup liability, even if the settlement does not expressly mention and resolve CERCLA liability.

Many circuits have not addressed when judicially approved settlements trigger the statute of limitations for CERCLA contribution actions, leaving a great deal of uncertainty. Plainly, attorneys must be cognizant of this issue or face statute of limitations problems.

Background

When CERCLA originally was passed in 1980, it contained neither a contribution provision nor a statute of limitations. In 1986, Congress sought to address these omissions with the passage of the Superfund Amendments and Reauthorization Act (SARA).2 SARA provides that "[a] person who 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..."3 SARA further set forth a statute of limitations for CERCLA contribution claims. Under SARA, contribution claims must be filed no more than three years after the date of: 1) judgment for response costs; 2) an administrative order for de minimis settlement under Section 9622(g); 3) an administrative order for cost recovery settlement under Section 9622(h); or 4) a judicially approved settlement under Section 9622(h).4

The authors believe one of the problems with the way Congress drafted SARA is that it does not address whether the judicially approved settlement must resolve CERCLA liability in order to trigger the running of the statute of limitations. Likely as a result of this omission, a clear circuit split has arisen between the Second Circuit and Third Circuit regarding whether a judicially approved settlement requires resolution of CERCLA liability.

The Circuit Split

The Second Circuit has taken a restrictive view of the...