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Government of Guam v. United States

United States District Court, District of Columbia

February 28, 2019

GOVERNMENT OF GUAM, Plaintiff,
v.
UNITED STATES OF AMERICA, Defendant.

          MEMORANDUM OPINION

          KETANJI BROWN JACKSON UNITED STATES DISTRICT JUDGE

         On September 30, 2018, this Court issued an Order denying a motion to dismiss that the United States had filed in the instant matter, which is a case that involves cost-recovery and contribution claims that the government of Guam has brought against the United States. See Gov't of Guam v. United States, 341 F.Supp.3d 74 (D.D.C. 2018). (See also Order, ECF No. 37.) Guam's complaint maintains that, “because the United States substantially contributed to the environmental contamination at [Guam's] Ordot Landfill, the United States should pay the full $160, 000, 000 cost of cleaning up the dump under [the Comprehensive Environmental Response, Compensation, and Liability Act's (‘CERCLA's')] section 107(a)'s cost-recovery mechanism, or should at least pay its fair share of the cleanup costs under CERCLA's section 113(f)(3)(B)'s contribution mechanism[.]” Id. at 76-77 (internal citations omitted).[1] In its motion to dismiss, the United States argued that (1) Guam cannot proceed on its section 107(a) cost-recovery claim, because Guam “resolved its liability for th[e] cleanup” as part of a past settlement agreement with the United States and, as a result, a section 113(f)(3)(B) contribution claim is the exclusive CERCLA remedy available to Guam at present, Id. at 80; and (2) Guam cannot proceed on any section 113(f)(3)(B) contribution claim against the United States because such a claim is now time-barred, see Id. This Court disagreed with the proposition that Guam is precluded from bringing a section 107(a) cost-recovery claim, based on the plain language of the settlement agreement and the Court's interpretation of section 113(f)(B)(3), and thus, the Court denied the United States' Rule 12(b)(6) motion. See Id. at 97 (concluding that “Guam's right to contribution under section 113(f)(3)(B) has not yet been triggered, which means that it is not precluded from proceeding via a cost-recovery action under section 107(a)”).

         Before this Court at present is another motion that the United States has presented for this Court's consideration: a motion to certify for interlocutory appeal this Court's Order denying the motion to dismiss, in accordance with section 1292(b) of Title 28 of the United States Code, and to stay all district court proceedings pending a decision by the D.C. Circuit on appeal. (See Mem. in Supp. of Def.'s Mot. to Certify Dismissal Orders for Interlocutory Appeal (“Def.'s Mem.”), ECF No. 49-1, at 6.)[2]Because this Court finds that there is a substantial ground for difference of opinion regarding at least one controlling issue of law that the United States has identified, and that allowing the United States to appeal at this stage in the litigation could materially advance the litigation, see 28 U.S.C. § 1292(b), it concludes that the legal standard for certifying the prior Order for interlocutory appeal has been met. The Court further finds that a stay of the district court proceedings would benefit judicial economy and would not subject the parties to hardship during the pendency of the requested appeal. Therefore, the United States' motion for certification will be GRANTED, and all district court proceedings will be STAYED pending the D.C. Circuit's resolution of the United States' appeal. A separate Order consistent with this Memorandum Opinion will follow.

         I.

         The facts and procedural history of this case are recited in full in the Memorandum Opinion that this Court issued in conjunction with its Order denying the United States' motion to dismiss. See Gov't of Guam, 341 F.Supp.3d at 78-81. As relevant to the instant motion, that Opinion notes that “Guam served as a central base of operations for the United States Navy in the South Pacific” for the better part of 50 years, beginning in 1898, Id. at 76 (citation omitted), and that during this period of use, the Navy “established the Ordot Landfill to dispose of the waste being generated on the island[, ]” Id. at 78 (citation omitted). When the United States transferred ownership of the landfill to the newly-formed civilian government of Guam in 1950, Guam “continued to operate the Ordot Landfill as a dump until the facility was officially closed in 2011.” Id. (citation omitted). Notably, even while it was in operation, the Ordot Landfill had more than its share of maintenance issues; indeed, “[t]he [Environmental Protection Agency (‘EPA')] ha[d] been aware of . . . environmental problems with the Ordot Landfill for many decades[, ]” and the EPA “regularly ordered Guam to devise a feasible plan for containing and disposing of the waste at the landfill[.]” Id. at 78-79.

         In 2002, “[t]he EPA finally filed a lawsuit against Guam”; the agency specifically claimed that “leachate was discharging from the Ordot Landfill into the Lonfit River and two of its tributaries in violation of the [Clean Water Act].” Id. at 79 (internal quotation marks and citation omitted). To resolve this legal action, in 2004, Guam and the EPA “entered into a consent decree” that “required Guam to pay a relatively modest civil penalty; mandated that Guam close the Ordot Landfill and cease the discharge of pollutants into the Lonfit River; and required Guam to construct a new municipal landfill to replace the Ordot Landfill.” Id. (internal citations omitted). “[T]he Consent Decree [also] specifically provided that the agreement was based on the pleadings, before taking testimony or adjudicating any issue of fact or law, and without any finding or admission of liability against or by the Government of Guam.” Id. (alteration, internal quotation marks, and citation omitted). Furthermore, the written agreement expressly stated that “nothing in this Consent Decree shall limit the ability of the United States to enforce any and all provisions of applicable federal laws and regulations for any violations unrelated to the claims in the [EPA's ] Complaint or for any future events that occur[.]” Id. (alteration and citation omitted).

         Following entry of the 2004 Consent Decree, “remediation and closure work began[, ]” at Guam's expense. Id. at 80 (alteration, internal quotation marks, and citation omitted). At present, “Guam expects costs of remediation to exceed approximately $160, 000, 000.” Id. (internal quotation marks, ellipsis, and citation omitted). “Guam filed the instant CERCLA action against the United States [in 2017] to recoup its landfill-closure and remediation costs.” Id. (See also Am. Compl., ECF No. 7.)[3]

         A.

         The United States filed a motion to dismiss Guam's complaint under Federal Rule of Civil Procedure 12(b)(6) on November 27, 2017. (See Def.'s Mot. to Dismiss, ECF No. 27.) In that motion, the United States maintained that Guam cannot state a claim for either cost recovery or contribution under the CERCLA as a matter of law. (See Id. at 2-3.) The United States reasoned, first, that because “Guam resolved its liability for that cleanup in the 2004 Consent Decree, ” it “cannot recover its costs for remediating the Ordot Landfill under section 107(a)[.]” Gov't of Guam, 341 F.Supp.3d at 80 (citation omitted); see also Id. (quoting the United States as arguing that “the exclusive CERCLA remedy for the costs a liable party is compelled to incur pursuant to a judicially-approved settlement with the United States” is a contribution claim under section 113(f)(3)(B)). The United States then asserted that Guam cannot maintain a contribution claim under section 113(f)(3)(B) either, because the statute of limitations has long run on any such claim. See Id. (explaining the United States' view that “Guam [has] waited far too long after settling its liability in 2004 to bring its alternative claim for contribution”).

         In response, Guam argued that it was legally entitled to maintain a full cost-recovery action under CERCLA section 107(a) because

its right to maintain a contribution action under section 113(f)(3)(B) was never triggered [given that] Guam had not ‘resolved its liability for a response action or for some or all of the costs of such action in the context of ‘an administrative or judicially approved settlement' as the text of section 113(f)(3)(B) requires.

Id. (citation, ellipsis, and alterations omitted). To be specific, “Guam insist[ed] that the parties ‘did not resolve response cost liability' in the 2004 Consent Decree, ” given that “the provisions of that agreement left Guam fully exposed to future liability under CERCLA.” Id. (citation omitted). Guam also asserted that “because the 2004 Consent Decree was ‘expressly limited to the [Clean Water Act],' . . . it does not qualify as a ‘settlement agreement' giving rise to a cause of action for contribution under CERCLA's section 113(f)(3)(B).” Id. at 81 (citations omitted).

         B.

         In ruling on the United States' motion to dismiss, this Court acknowledged that “cost-recovery claims under CERCLA section 107(a) and contribution claims under CERCLA section 113(f)(3)(B) are exclusive of one another, such that Guam is permitted to proceed against the United States for full cost recovery under section 107(a) only if Guam's right to contribution under section 113(f)(3)(B) has not been triggered.” Id. at 84 (footnote omitted). The Court therefore assessed “whether the 2004 Consent Decree resolved Guam's liability for the response action or response costs that Guam undertook with respect to the Ordot Landfill and also qualifies as a ‘settlement' within the meaning of section 113(f)(B)(3) [of CERCLA].” Id. (internal quotation marks, citation, and alterations omitted).

         The Court's resolution of this issue rested on several significant legal determinations. First, the Court concluded that liability “is not ‘resolved' simply and solely because interested parties have ‘signed a settlement agreement' concerning the response actions that will be taken at the site, or because one or more [potentially responsibly parties (‘PRPs')] have ‘cut a check' made payable to the United States.” Id. at 85 (alteration and citations omitted). Rather, “‘the nature, extent, or amount of a PRP's liability must be decided, determined, or settled, at least in part, by way of agreement with the EPA.'” Id. (quoting Bernstein v. Bankert, 733 F.3d 190, 212 (7th Cir. 2013)) (emphasis in original). The Court then explained that in order to determine whether an agreement has “decided, determined, or settled the nature, extent, or amount” of a party's liability, Id. (internal quotation marks and citation omitted), “a court must ‘look to the specific terms of the agreement' and ascertain whether, based on the provisions in the settlement agreement, the parties intended to resolve the plaintiff's liability within the meaning of section 113(f)(3)(B)[, ]” Id. (quoting Fla. Power Corp. v. FirstEnergy Corp., 810 F.3d 996, 1001 (6th Cir. 2015)).

         Significantly for present purposes, the Court also specifically noted that “the courts of appeals diverge . . . with respect to how one best interprets agreement language that expressly eschews liability and reserves the right to sue, ” Id. at 86 (emphasis in original), and it joined the Sixth and Seventh Circuits in concluding that “contracts containing non-admissions of liability, broad reservations of rights, and conditional covenants not to sue do not resolve liability[, ]” Id. (capitalization altered). Turning to the settlement agreement at issue in this case-which contained a “clear disclaimer of liability, [a] conditional release of liability for the claims the United States had brought against Guam in a [Clean Water Act] complaint, and two complementary reservation-of-rights clauses[, ]” Id. at 92-this Court ultimately “conclude[d] ...


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