A recent decision in a matter litigated by SPR fills an important gap in Superfund law by establishing that suits by parties settling with a state brought under CERCLA’s contribution provision[1] must be brought within three years of the date of the settlement of liability. The District Court’s decision in Chitayat v. Vanderbilt Associates, et al., 03-5314-cv, Memo & Order (E.D.N.Y. March 22, 2010) also reinforces many of the emerging rules governing suits amongst private Superfund litigants.
The plaintiff in the case sought recovery of costs incurred under a 1998 consent order which required him to reimburse the New York State Department of Environmental Conservation (“DEC”) for its costs of cleaning up tetrachloroethene (“PCE”) which had been discovered at 100 Oser Avenue site in Hauppauge, NY (the “Site”). Costs incurred, and expected to be incurred, amounted to several million dollars.
Plaintiff alleged a claim for cost recovery pursuant to CERCLA § 107, and contribution under CERCLA § 113(f)(3)(B). The Court ruled that the plaintiff’s 107(a) cost recovery claim failed because pursuant to his consent order plaintiff was, “not required to expend his own funds to remediate the Site” but instead had to “‘reimburse’ the DEC for the DEC’s response costs.” (Slip. Op. at 14.) Accordingly, plaintiff had not incurred costs of response within the meaning of CERCLA § 107 and could not assert a claim under that section.
With respect to plaintiff’s contribution claim under CERCLA § 113(f)(3)(B), the court held that while plaintiff was entitled to assert the claim, it was timebarred by a 3-year statute of limitations which began to run upon issuance of the consent order. Plaintiff filed his suit approximately 5 years after the date of his consent order.
The Court’s holding on contribution is notable for two reasons. First, the Court determined that the consent order had resolved plaintiff’s liability for purposes of § 113(f)(3)(B) despite the fact that plaintiff was required to pay back DEC costs in yearly installments over many years. Plaintiff would not receive a release from liability unless he continued to pay and comply until all DEC’s costs were reimbursed. Such a result could be decades away, and may never occur. The Court nonetheless held that under Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., – F.3d –, 2010 WL 626064 (2d Cir. Feb. 24, 2010), plaintiff’s consent order created a contribution claim under § 113(f)(3)(B).
The most significant aspect of the ruling relates to the statute of limitations which applies to § 113(f)(3)(B) contribution claims. The Court noted a gap in the statute, the, “lack of a triggering event in § 113(g)(3) encompassing a state administrative order or a unilateral EPA order under § 106,” but held that in light of recent Supreme Court precedents, a three-year statute of limitations applies to contribution claims arising from settlements of liability with a state. (Slip. Op. at 23.) In this context, the “triggering event should be the date of the ‘settlement’ of that liability,”—here, the date of plaintiff’s consent order. In so holding the Court rejected alternative theories that a six year limitations period, or no limitations period applies. (Id. at 21-23.) This holding clarifies a complex issue of statutory construction that has vexed courts for many years, and provides useful guidance to future litigants.
The following Sive Paget & Riesel litigators represented three defendants in the case: Daniel Riesel, Dan Chorost and Ashley S. Miller.
- A copy of the decision is available here (pdf)
[1] Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. § 9613(f)(3)(B).
