Beazer East, Inc. v. Mead Corporation

May 13: In the U.S. Court of Appeals, Third Circuit, Case No. 06-4993. The Appeals Court explains that this is the third appeal in this long-running contribution claim under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA). After the second appeal was decided, defendant Mead moved for judgment for failure to state a claim or for lack of subject-matter jurisdiction. The District Court denied the motions, but certified a controlling question of law under 28 U.S.C. § 1292(b) raising the issue of whether the effect of Cooper Indus. v. Aviall Servs., Inc., 543 U.S. 157 (2004), is to deny subject-matter jurisdiction over plaintiff Beazer’s contribution claims under § 113(f)(1) of CERCLA, 42 U.S.C. § 9613(f)(1). Also implicated is the denial of Mead’s motion to dismiss for failure to state a claim under § 113(f)(1).

The Appeals Court ruled, "We conclude that the District Court has subject-matter jurisdiction. We will also affirm the denial of the motion for judgment on the pleadings and will remand for further proceedings."

In this on-going case, Mead filed this interlocutory appeal. After it was docketed and the briefs were filed, but before oral argument, the Supreme Court decided United States v. Atlantic Research Corp., 127 S. Ct. 2331 (June 11, 2007), holding that a “potentially responsible party” (PRP) may recover against another PRP for cleanup costs under § 107(a) [See WIMS 6/12/07]. Mead contends that because the § 107 claim was dismissed in 1996 by the District Court, Beazer’s only remaining means of recovery is under § 113(f)(1), a claim that is fatally flawed in light of Cooper. Mead argues that because Beazer has not “been sued under § 106 or § 107(a) . . . [it may not] obtain contribution under § 113(f)(1) from other liable parties.”

In its conclusion, the Appeals Court said, "We do not lightly invoke waiver, but as the Supreme Court has cautioned, '[t]here must be an end to litigation someday, and free, calculated, deliberate choices are not to be relieved from.' Ackermann v. United States, 340 U.S. 193, 198 (1950). This case has been ongoing since 1991. Mead’s liability under § 113(f)(1) was established by the time of the District Court’s orders in 2002 – well before this Court’s June 23, 2005, opinion in Beazer II. Allowing Mead to renew its argument at this late point in the litigation would seriously impair the finality of the rulings of this Court and the District Court. Mead must live by its long-standing and considered decision not to pursue its § 113(f) objection.

"We agree with the District Court that Mead waived its challenge to the applicability of § 113(f)(1) and the Court has subject-matter jurisdiction. Accordingly, we again remand this case to the District Court to hold an equitable allocation proceeding in accordance with Beazer II."

Access the complete opinion (click here).