US Supreme Court: Settlement of CERCLA-Specific Liability Needed to Give Rise to CERCLA Contribution Claim

May 28, 2021

Reversing the US Court of Appeals for DC Circuit, a unanimous US Supreme Court held that Guam’s settlement of Clean Water Act liabilities did not give rise to and trigger the statute of limitations to bring a Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) contribution claim.

Just four weeks after oral arguments, the US Supreme Court issued a unanimous decision in Guam v. United States, No. 20-382 (May 24, 2021) holding that a contribution claim under CERCLA’s Section 113(f)(3)(B) only arises when the settlement of underlying environmental liabilities specifically resolves CERCLA liability.

The Court concluded that the text and structure of Section 113(f), along with the broader CERCLA statutory scheme confirm that Section 113(f)(3)(B) requires a settlement of CERCLA liability before a CERCLA contribution action can be commenced—and before the three-year statute of limitations on such actions is triggered.

Because the DC Circuit held to the contrary—that the settlement of liability under other environmental liabilities laws was sufficient—the Supreme Court reversed the DC Circuit and remanded the case for further proceedings.


CERCLA’s Cost Recovery Provisions

Recognizing the costly nature of cleaning up superfund sites, CERCLA provides parties different paths to seek recoupment of costs from other responsible or potentially responsible parties.

Relevant to Guam, CERCLA imposes liability for “necessary costs of response incurred by any other person consistent with the national contingency plan” on persons who accepted “hazardous substances for transport to disposal or treatment facilities, incineration vessels or sites selected by such person, from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance[.]” 42 U.S.C. §9607(a)(4)(B) (Section 107(a)). Cost-recovery claims under Section 107(a) are subject to a six-year statute of limitations. 42 U.S.C. § 9613(g)(2)(B).

Separately, CERCLA allows for a contribution claim against “any other person who is liable or potentially liable under section 9607(a) of this title, during or following any civil action under section 9606 of this title or under section 9607(a) of this title.” 42 U.S.C. § 9613(f)(1) (Section 113(f)). “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 from any person who is not party to a settlement” as defined in statute. 42 U.S.C. § 9613(f)(3)(B) (Section 113(f)(3)(B)). Contribution claims under Section 113(f)(3)(B) are subject to a three-year statute of limitations. 42 U.S.C. § 9613(g)(3).

Guam Litigation

The Guam litigation arose as a result of the costs Guam incurred in remediating the Ordot Dump—a facility constructed on the island by the US Navy in the 1940s and allegedly used by the Navy to deposit toxic military waste for decades. The facility was transferred to Guam in 1950, and Guam used the dump as a public landfill. After Guam allegedly failed to comply with the US Environmental Protection Agency (EPA) directives to clean up the dump, the United States sued Guam under the Clean Water Act for discharging pollutants into “waters of the United States” without a permit. The suit settled in 2004 with the United States and Guam entering into a consent decree, wherein Guam agreed to pay a civil penalty, close and cover the dump. The consent decree resolved all claims the United States alleged in its complaint, but the United States retained the right to pursue claims not specifically addressed in the consent decree.

In 2017, Guam filed suit against the United States under both Section 107(a) and Section 113(f)(3)(B) of CERCLA, seeking cost recovery for the Navy’s disposal of wastes at the dump. The United States moved to dismiss the suit, arguing (1) Section 113(f)(3)(B) provided the exclusive contribution remedy and (2) Section 113(f)(3)(B)’s three-year statute of limitations barred Guam from pursuing the action. The district court disagreed, holding that Guam was permitted to pursue its Section 107(a) claim against the United States because Section 113(f)(3)(B) is only triggered if the “settlement” specifically resolves CERCLA liability. Since Guam settled with the United States under the Clean Water Act, the court concluded the settlement did not resolve CERCLA liability.

The DC Circuit reversed. At the outset, the DC Circuit held that Section 107(a) and Section 113(f)(3)(B) of CERCLA provide mutually exclusive remedies, and Guam could not pursue both. It then held that Guam could have asserted a claim under Section 113(f)(3)(B) because its settlement with the United States under the Clean Water Act was sufficient to “resolve” liability for response costs and give rise to a claim under CERCLA Section 113(f)(3)(B). Because Guam filed its suit more than three years after the Clean Water Act settlement, the DC Circuit concluded that Guam’s Section 113(f)(3)(B) claim was barred by the three-year statute of limitations for bringing such a claim. As a result, Guam did not have a viable claim under CERCLA to pursue recovery of costs from the United States for the Navy’s alleged disposal of wastes in the Ordot Dump.

Guam appealed the case to the United States Supreme Court, arguing (1) that it never had a viable contribution claim under Section 113(f)(3)(B) because such a claim can only arise if the settlement resolved liability under CERCLA, and (2) even if non-CERCLA settlements could trigger a contribution claim, the consent decree did not resolve Guam’s liability because Guam did not admit responsibility and United States was permitted to pursue future enforcement actions.


The Supreme Court held that a settlement must specifically resolve CERCLA liability before a party has a Section 113(f)(3)(B) contribution claim. Because that conclusion was dispositive the Court and declined to address the second argument Guam raised on appeal.

Writing for the unanimous court, Justice Clarence Thomas explained that the text of Section 113(f), which governs CERCLA contribution actions, should be read in its totality. The Supreme Court then outlined the language used in subsection (f): Subsection (f)(1), described as the “anchor provision”, permits parties to seek contribution from other liable or potentially liable persons under Section 107(a) “during or following any civil action under section 9606 of this title or under section 9607(a) of this title”; subsection (f)(2) outlines how settlements can insulate a party from liability; and subsection (f)(3) discusses liability for parties who are not part of a subsection (f)(2) settlement.

The Supreme Court explained that the purpose of a contribution suit—to allocate common liability among responsible parties—necessarily implicates CERCLA liability as the obvious place to determine what liability should be allocated would be the CERCLA-imposed duties and liabilities. The Court further concluded that requiring a CERCLA-specific settlement is consistent with the principle that a contribution action is “virtually always a creature of a specific statutory regime” as there is no general federal right to contribution.

The Court then delved into the language and structure of Section 113(f)—noting that its interlocking nature further suggests Congress’s intent to have contribution actions refer to CERCLA liability. Specifically, the Court explained that subsection (f)(1), the anchor provision, clearly relies on a predicate of CERCLA liability as it only allows contribution “during or following any civil action under” Sections 106 or 107. The Court then outlined how subsections (f)(2) and (f)(3) more indirectly presume CERCLA liability is a necessary predicate. Subsection(f)(2) discusses potentially liable persons, which necessitates referral to the anchor provision that requires CERCLA liability as a predicate. Subsection (f)(3)(B) in turn references subsection (f)(2), which requires reference to the anchoring provision. Subsection (f)(3)(B) also relies on the phrase “response action”, which further confirms a reliance on the CERCLA statutory regime as “response action” appears throughout the Act. Thus, based on the phrasing and context of these provisions, the Court concluded that the provisions are “best ‘understood only with reference’ to the CERCLA regime.”

The Supreme Court then addressed the government’s arguments in support of the DC Circuit’s decision. The government argued that steps taken under non-CERCLA environmental statutes may resemble CERCLA “response actions”, which the Court acknowledged as true. However, the Court explained that relying on functional overlaps rather than the text of the statute “would stretch the statute beyond Congress’ actual language.” Further, the Court noted that the government’s interpretation would undermine the statute’s use of the word “resolve” which “conveys certainty and finality”—under the government’s approach, a party could “resolve” its liability and trigger the CERCLA contribution provision, but still be susceptible to CERCLA liability. Such an approach would also require courts to determine whether the non-CERCLA settlement was “close enough” to a CERCLA “response action” to trigger the contribution provision. As the Court explained, “the far simpler approach is to ask whether a settlement expressly discharged a CERCLA liability.”

The government also argued that the differences within subsection (f) suggests Section 113(f)(3)(B) should be read differently than the others since it does not expressly require a predicate CERCLA action. The Court refused to adopt this interpretation, explaining that Section 113(f)(3)(B) uses the same “response action” phrase, cross-references subsection (f)(2), and its placement within the broader statutory scheme all counseled against severing the subsection from the rest of the Act.

Finally, the government argued requiring CERCLA-specific settlements for subsection (f)(3)(B) would create a surplusage issue because subsection (f)(1) allows for a contribution claim during or following a civil action under CERCLA. The Court was unpersuaded. The Court explained that such a belt-and-suspenders approach, expressly providing for a CERCLA contribution claim under (f)(3)(B) following a settlement of CERCLA liability, is not unusual and does not warrant ignoring the text of the statute and the broader statutory scheme.

Ultimately, the Court concluded that the natural reading of Section 113(f)(3)(B) requires settlement of CERCLA liability before a party can seek contribution from other responsible parties under this provision.


The Supreme Court’s decision revives Guam’s cost-recovery claim under CERCLA Section 107(a), allowing Guam to pursue recovery of nearly $160 million from the US Navy, a claim the DC Circuit had held was barred by the existence of contribution claim, albeit a time-barred contribution claim, under Section 113 (f)(3)(B). Beyond Guam, the Court’s decision could revive claims against others under CERCLA previously thought to be to be resolved by the settlement of environmental liabilities under non-CERCLA statutory schemes, such as state law remediation statutes. The Court does not address the question directly, but the Court’s reasoning strongly suggests that a settlement, release, and covenant not to sue under statutes other than CERCLA will not be viewed as resolving CERCLA liability. The Court’s decision further suggests (but does not decide) that parties such as Guam who have settled their liability for response costs under statutes other than CERCLA may pursue a cost-recovery claim under Section 107(a), which is subject to a six-year statute of limitations and allows for recovery of “all costs of [a] removal or remedial action” from any liable party – a remedy that is far preferable to a contribution claim under Section 113, which is subject to a three-year statute of limitations and is limited to recovery a liable party’s “fair share” of response costs.


If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

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John McGahren
Stephanie Feingold
Laurie Matthews

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