Back in July of last year, in the case of Hobart Corp. v. Waste Management of Ohio, 758 F.3d 757 (6^th Cir. 2014), held that the statute of limitations for a contribution action following the execution of an Administrative Settlement Agreement and Order on Consent (“AOC”) that settles an entity’s liability to the government begins to run as of the effective date of the AOC.  To the extent that anyone might have thought that the Sixth Circuit would reconsider this holding, those hopes have been dashed.  On January 24, 2015, in LWD PRP Group v. Alcan Corp., ___ F.3d ___ (6^th Cir. 2015), the Sixth Circuit stood fast, finding that it lacked “power to reverse [Hobart,] reversing the district court’s denial of a motion to dismiss certain counterclaims.

The issue in both cases was whether the statute of limitations for removal actions performed pursuant to a voluntary settlement with the United States should run from the from the completion of the removal pursuant to CERCLA §113(g)(2) or the date of the settlement pursuant to CERCLA §113(g)(3).  Section 113(g)(2) provides the limitations period for Section 107 actions and expressly provides that claims can be brought within a three year period “after completion of the removal action.”  On the other hand, Section 113(g)(3) provides the limitations period for judgments, certain specified administrative orders and judicially approved settlements, and holds that the three year period runs from the date of the issuance or entry of such orders.  But Administrative Orders on Consent fall into none of these categories, and it has long been contended that since such settlements result in voluntary action by the settling parties, the more liberal limitations period of Section 113(g)(2) is appropriate.   However, the Sixth Circuit has now firmly disagreed, holding that when AOCs resolve liability to the government it is analogous to the types of orders covered by Section 113(g)(3) and therefore the limitations period runs from the effective date of the AOC.

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