The Court of Appeals for the Eleventh Circuit joined the 2nd,3rd and 8th Circuits in holding that a PRP that incurs response costs pursuant to a consent decree may only recover its costs through a section 113(f) contribution action and may not bring a 107 cost recovery action.
In Solutia v McWane, 2012 U.S.App. LEXIS 4634 (11th Cir. 3/6/12), EPA brought an enforcement action against Solutia and Pharmacia to address contamination at the Anniston PCB and Lead sites. Monsanto Company had produced PCBs at the Anniston plant from 1929 to 1971. In 1997, Monsanto spun off Solutia which now owns and operates the Anniston plant. In 2000, Monsanto and Pharmacia & Upjohn merged and resulted in the creation of Pharmacia Corporation.
In 2003, Solutia and Pharmacia entered into a Partial Consent Decree (PCD) in 2003 where the companies agreed to address the Anniston sites. As is typical with CERCLA settlements, the PCD reserved the rights of Solutia and Pharmacia to bring CERCLA contribution actions. Nearly two years later, EPA entered into a separate settlement agreement with the Foothills Community Partnership (Foothills) that provided contribution protection to Foot. Solutia & Pharmica filed a motion to with the district court that had approved the settlement arguing that the Foothill settlement undermined their contribution rights. The District Court agreed that the EPA had repudiated the PCD and indicated that, upon motion, he would suspend Solutia & Pharmacia obligations under the consent order. Solutia & Pharmacia never took the District Court up on its offer and in July 2006 they entered into a Stipulation that clarified specified geographical areas where the parties would remediate lead contamination.
In the meantime, Solutia & Pharmacia filed a contribution under § 113(f) costs incurred at the Anniston Lead and PCB sites along with a § 107 cost recovery action for response costs incurred at the Anniston Lead Site. The parties to the Foothills settlement moved for for summary judgment on the § 107(a) recovery and § 113(f) contribution claims. Two other PRPs who were not parties to the Foothills settlement also moved for summary judgment on the § 107(a) recovery claims.
In June 2008, a magistrate judge for the district court for the northern district of Alabama granted summary judgment to the settling defendants on the § 113(f) contribution claims because of the contribution protection provided by the settlement. However, the judge ruled that Solutia & Pharmacia could proceed with their § 107 cost recovery claim against all defendants.
Following the United States Supreme Court decision in U.S v. Atlantic Research Corp, the Defendants filed motions for reconsideration. The Magistrate Judge vacated his prior order and entered summary judgment against Solutia & Pharmacia on their § 107(a) claims. The Judge ruled that because the PCD and the Stipulation granted Solutia & Pharmacia contribution rights under § 113(f) for certain costs, they could not choose to bring their claims under § 107(a) for those same costs.
Solutia & Pharmacia appealed to the 11th Circuit, arguing that there was no language in either § 107 or § 113 to suggest that § 107(a) and § 113(f) were mutually exclusive remedies. However, the court said that if a party subject to a consent decree could simply repackage its § 113(f) claim for contribution as one for recovery under § 107(a), this would destroy CERCLA’s statutorily-created settlement incentive. Moreover, the court said that if parties like Solutia & Pharmacia were able to bring 107 cost recovery actions, settling defendants would be barred from asserting any § 113(f) counterclaims since the plaintiffs would have already entered into a judicially approved settlement with the EPA.