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In Georgia-Pacific Consumer Products LP v. NCR Corporation, the Sixth Circuit confronted a novel question concerning CERCLA’s statutes of limitations: whether a bare declaratory judgment on liability triggers the Section 113(g)(3) three-year limitations period for a contribution claim brought under Section 113(f)(1). The first circuit court to address this issue, the Court answered in the affirmative.
For a CERCLA case, the factual and procedural histories here are fairly straightforward. After EPA designated the Kalamazoo River a Superfund Site, the State of Michigan entered into an Administrative Order on Consent with the Kalamazoo River Study Group (KRSG), which included paper mill operator Georgia Pacific (GP), to conduct a site-wide remedial investigation and feasibility study. In 1995, the KRSG brought a Section 107 action against several firms, seeking a declaratory judgment that they were liable for future response costs it incurred to remediate PCB contamination. Those firms counterclaimed, arguing KRSG was fully responsible. The federal district court held a trial in 1998, and it entered a declaratory judgment under Section 113(g)(2) holding GP liable. Importantly this judgment was on liability only; the total costs for the Site were yet unclear.
Fast forward to 2010: GP brought a Section 113(f) action against NCR Corporation, who had not previously been involved in the prior litigation. NCR moved for summary judgment, arguing that GP’s claim was time barred. Specifically, the 1998 declaratory judgment triggered the three-year limitations period, and thus GP’s lawsuit was nine years late. The federal district court disagreed, relying on res judicata principles rather than CERCLA caselaw.
On appeal, the Sixth Circuit reversed the district court, guided by the principle underlying CERCLA’s limitations periods of “ensur[ing] that the responsible parties get to the bargaining—and cleanup—table sooner rather than later.” The Court explained that the issue before it had two complicating factors. The first was that NCR was not a party to the litigation that resulted in a declaratory judgment against GP. The Court held that “113(g)’s statute of limitations should bar an action against a nonparty beyond the statutory period.” The inquiry under CERCLA focuses on what was the subject of the judgment—not what entities were involved. Since GP was held liable for the costs for which it later sought contribution from NCR, that later effort was untimely.
The second complication was the declaratory judgment was “bare bones”—that is, it did not address what the future response costs would be, only that GP was liable for them. To address this issue the Court turned to the text of CERCLA. Section 113(g)(2) states that “the court shall enter a declaratory judgment on liability for response costs or damages that will be binding on any subsequent action or actions to recover further response costs or damages.” Section 113(g)(3)(A), which establishes the limitations period, says that “[n]o action for contribution for any response costs or damages may be commenced more than 3 years after . . . the date of judgment in any action under this chapter for recovery of such costs or damages.” The Court reasoned that the similar italicized language suggested a link between the sections, such that a declaratory judgment under Section 113(g)(2) qualifies as a “judgment in any action for response costs” under Section 113(g)(3)(A). And this reading is faithful to CERCLA’s goal of accelerating the cleanup process. Thus, the Court held that the 1998 declaratory judgment triggered the three-year statute of limitations in which GP had to sue for contribution.
Again, this is the first circuit court to decide the impact of a bare declaratory judgment on CERCLA’s limitations period. With PRPs in the shoes of NCR now armed with an appellate decision allowing them to avoid liability, this area of CERCLA is sure to see further development in the near future.