Case preview

Is it too late for Guam to sue the Navy to pay for the cleanup of its dumpsite?

On Monday the Supreme Court will hear a dispute between the U.S. Navy and the territory of Guam that turns on interpretation of the Comprehensive Environmental Response, Compensation and Liability Act, also known as CERCLA or the Superfund statute. Guam is a 30-mile-long island located in the Pacific Ocean 3,800 miles west of Hawaii. Its 170,000 residents are citizens of the United States. Because Guam lies west of the International Date Line, the island’s airport welcomes visitors with a sign reading “Guam: Where America Starts Its Day.” A short distance southwest of the airport lies the Ordot Dump, a Superfund site that triggered the case before the court, Guam v. United States.

Factual and legal background

Guam was captured by the United States in June 1898 during the Spanish-American War. In the Treaty of Paris that formalized the end of that war, Spain ceded Guam to the U.S. effective April 1899. The U.S. Navy governed Guam until December 1941, when it was seized by the Japanese in an attack launched four hours after the bombing of Pearl Harbor. In 1944, Guam was recaptured by the U.S. and returned to the Navy after a bloody battle that left more than 20,000 dead.

The Navy then began dumping toxic waste in a valley that became the Ordot Dump. In 1950, Congress adopted the Guam Organic Act, transferring the island (and the dump) from the Navy to a new civilian government. Guam used the Ordot Dump as the island’s sole waste disposal site, and the Navy continued to dump toxic waste (including DDT, Agent Orange and discarded munitions) there through both the Korean and Vietnam wars. The dump expanded over time from a four-acre site to more than 40 acres. When the dump ultimately was closed in 2011, what once had been a valley had become a 280-foot mountain of toxic waste and garbage. Without any cover or liner, the dump absorbed rainwater and leached contaminants into the Lonfit River, which flows into the Pago River and ultimately the Pacific Ocean.

In December 1980, Congress enacted CERCLA to remediate releases of hazardous substances, particularly from dumpsites. Section 107(a) of CERCLA imposes liability for the costs of remediating dumpsites on their current owners, past owners and those who arranged to dispose of or transport hazardous substances to the sites. The liability is strict — it requires no showing of fault – and it applies retroactively, even to potentially responsible parties whose waste was dumped prior to enactment of the statute. The liability is also joint and several, meaning any one party theoretically can be held liable for all the cleanup costs. To soften the harshness of this liability, Congress amended CERCLA in 1986. It added Section 113 to allow those who believe they have paid more than their fair share of cleanup costs to bring contribution actions against other potentially responsible parties.

In 1983, the Environmental Protection Agency listed the Ordot Dump on CERCLA’s National Priorities List for cleanup. Five years later, the EPA named the Navy as a potentially responsible party for the site. Rather than using federal Superfund money to clean up the site, the federal government in 2002 sought to use the Clean Water Act to require Guam to do so – even though Guam’s government argued that it could not afford to pay for such a cleanup. In 2004, Guam settled with the EPA by entering into a consent decree requiring the territory to close and cover the Ordot Dump. The decree stated that it was entered into “without any finding or admission of liability against or by the Government of Guam.”

After Guam failed to comply with the decree, the district court appointed a receiver, who closed the Ordot Dump in 2011. Estimating that the cost of cleaning up the dump could run as high as $160 million, Guam in 2017 sued the Navy seeking contribution for cleanup costs. Because the Navy was a potentially responsible party under CERCLA Section 107(a) as a former owner of the dump, Guam sought cost recovery pursuant to that section or, in the alternative, for contribution under Section 113(f)(3)(B), which authorizes contribution actions by 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 a[] … judicially approved settlement agreement [with the U.S. or a state].”

The U.S. Court of Appeals for the District of Columbia Circuit held that Section 107(a) cost-recovery actions and Section 113(f)(3)(B) contribution actions are mutually exclusive. The court held that because the 2004 consent decree was a settlement that had triggered Guam’s right to contribution under Section 113(f)(3)(B), only the latter action could be brought. However, the court held that Guam’s contribution action was barred by a three-year statute of limitations that ran from the date of the settlement. The court acknowledged that the result it reached was “harsh” from Guam’s perspective because the Navy “deposited dangerous munitions and chemicals at the Ordot Dump for decades and left Guam to foot the bill.” It also noted that the EPA has now revised its model settlement language to provide expressly which settlements trigger Section 113(f)(3)(B). Guam appeals that ruling in this case.

Arguments of the parties and their supporters

Before the Supreme Court, Guam argues that because its 2004 consent decree with EPA had settled a Clean Water Act enforcement action, and not a CERCLA case, Section 113(f)(3)(B) was not triggered by the settlement. That provision, the territory maintains, cannot be triggered by non-CERCLA settlements at all – and so Guam should be allowed to pursue its cost-recovery action under Section 107(a). The very concept of “contribution,” it argues, requires that parties share a common source of liability that a non-CERCLA settlement lacks. Guam argues that language in Section 113(f)(3)(B) referring to “response action” and “response costs” suggests that only CERCLA-specific settlements should trigger its provisions. If the justices agree, Guam states, the court can avoid interfering with other regulatory schemes to address environmental contamination. Guam also argues that the 2004 consent decree could not have “resolved” any of its CERCLA liability because it expressly disclaimed liability, provided only a conditional release, and included a reservation-of-rights clause.

The United States argues that even non-CERCLA-specific settlements can trigger Section 113(f)(3)(B) because Congress designed CERCLA to work in conjunction with other federal and state environmental laws to clean up waste sites. It maintains that Section 113(f)(3)(B)’s references to “response actions” can include legally binding directives imposed under other laws to take actions to clean up dumpsites. Thus, it makes no difference that the 2004 consent decree was issued under the Clean Water Act because it required Guam to take actions to clean up the Ordot Dump. The federal government argues that Guam’s failure to admit liability in the settlement is immaterial because the statute does not require such an admission, but rather only a resolution of liability for some of a response action.

An amicus brief filed in support of Guam by attorneys general from 24 states, the District of Columbia and the Northern Mariana Islands is extraordinary because the states are evenly divided between red states and blue states and large states and small states, from all regions of the nation. The AGs maintain that only settlements that conclusively resolve CERCLA liability can trigger Section 113(f)(3)(B)’s statute of limitations. They argue that the D.C. Circuit’s decision “disincentivizes settlement and makes for slower, pricier cleanup contrary to CERCLA’s purpose and antithetical to States’ interests.” They maintain that the United States, which operates military bases often associated with toxic contaminants, should not be able to saddle states and territories with a disproportionate financial burden by evading CERCLA liability. They also maintain that the decision below conflicts with “fundamental principles of federalism” because it could restrict states’ ability to use state law to facilitate cleanup of contaminated sites.

Last term in Atlantic Richfield Co. v. Christian, the court rejected an invitation by Atlantic Richfield, the owner of an enormous Superfund site, to use CERCLA to preempt all state law remediation actions. Atlantic Richfield has now filed an amicus brief supporting the United States in the Guam case because a three-year statute of limitations would bar another company (Asarco) from recovering millions from Atlantic Richfield in a contribution action. The brief argues that Guam’s approach would “allow settling parties to delay indefinitely before pursuing contribution, prejudicing non-settling [parties] and jeopardizing the evidence necessary to fairly determine parties’ relative contributions.” Atlantic Richfield argues that Guam’s position “would create massive opportunities for gamesmanship and sandbagging.”

In its reply brief, Guam argues that the federal government’s position would discourage settlements “across a broad spectrum of other environmental laws.” It states that defendants “in non-CERCLA actions will be less likely to settle if, despite their continued possible exposure to CERCLA liability, the settlement suddenly triggers an exclusive three-year timer to discover the full extent of the problem, identify all other responsible parties, and bring suits against them — or else forfeit any possible CERCLA recovery down the road.”

Guam v. United States shows that, more than 40 years after CERCLA was enacted, courts still are wrestling with legal questions not clearly resolved by the statutory language. In the Atlantic Richfield decision, Justice Samuel Alito’s opinion concurring in part and dissenting in part described Section 113 as “a puzzle with pieces that are exceedingly difficult, if not impossible, to fit together.” On Monday, the court will examine another piece of that puzzle.