On September 20, 2019, hitting a trifecta of commonly-litigated CERCLA issues, Judge Nancy J. Rosenstengel, Chief Justice of the United States District Court for the Southern District of Illinois, partially denied and partially granted Defendants’ Motion to Dismiss in The Premcor Refining Group Inc., v. Apex Oil Company, Inc., et. al., No. 17-cv-738-NJR-MAB (S.D. Ill.). The Court held (a) Premcor had adequately pled fact to withstand a defense that the petroleum exclusion barred the claims; (b) Premcor could not simultaneously plead 107 and 113 claims, dismissing its cost recovery claims inasmuch as Premcor had settled its claims with the State of Illinois; and (c) the contribution protection Apex Oil obtained in its settlement with the State of Illinois included CERCLA claims barred Premcor’s claims.

The facts of the case, at least as set forth in the opinion, are fairly simple. The State of Illinois had sued Premcor and Apex Oil seeking the clean-up of a refinery property in Hartford, Illinois. Apex Oil settled its liability to the State in 2016 by entering into a Consent Order, paying the State over ten million dollars in exchange for a release of the State’s claims under “all Environmental Laws.” At that same time, Premcor’s contribution claims against Apex were dismissed with prejudice. Subsequently, Premcor entered into its own Consent Order in the state litigation, agreeing to undertake remediation of the site. The instant suit was brought by Premcor to recover the costs of such remediation from prior owners and operators of the refinery, including Apex.

The first issue addressed by the Court was the Defendants’ assertion that CERCLA’s “petroleum exclusion,” which exempts petroleum, as well as other natural gas, natural gas liquids, and liquefied natural gas, from CERCLA’s definition of hazardous substances, mandated dismissal of the suit. The Court denied Defendants’ Motion on this ground because the Complaint’s allegations that the petroleum releases comingled with other hazardous substances were sufficient to overcome the defense at the pleading stage.

The Court next dismissed the Plaintiff’s Section 107 claims because Premcor had entered into a Consent Order with the State of Illinois pursuant to which it was undertaking the clean-up, and which explicitly resolved its liability under CERCLA. In this regard, the Court noted that although the Defendants had objected to the Consent Order at the time it was entered, they had not appealed it, and hence it was final, leaving Premcor with only a contribution claim.

Finally, the Court also dismissed Premcor’s contribution claim under Section 113(f) against Apex. In dismissing the contribution claim, the Court reasoned that Apex’s settlement agreement with the State of Illinois, which released Apex from all claims “arising under any Environmental Laws,” necessarily included related CERCLA claims notwithstanding the fact that it did not explicitly mention CERCLA. Among other things, the Court pointed out that no CERCLA claims were expressly reserved, and Illinois law does not require enumeration of all released claims. The Court also rejected Premcor’s assertion that not all liabilities were resolved because Premcor did not admit liability and the State reserved its rights to enforce the agreement.

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