City of Colton v. American Promotional Events

Aug 2: In the U.S. Court of Appeals, Ninth Circuit, Case No. 06-56718. The Appeals Court says, "We must decide, among other things, whether the City of Colton, California, can recover response costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) allegedly incurred as a result of perchlorate contamination in its water supply."

 

    Numerous defendants filed a motion for summary judgment, arguing that Colton could not recover its wellhead treatment program costs under CERCLA. In its opposition, Colton argued that the defendants were liable for not only its wellhead treatment program costs, but also costs associated with a future Basin-wide cleanup estimated to cost between $55 and $75 million. The district court granted summary judgment for the defendants on Colton's federal claims and declined to exercise supplemental jurisdiction over Colton's state law claims. The district court held that Colton could not recover its costs associated with the wellhead treatment program because it failed to show that such costs were necessary and consistent with the NCP; furthermore, because Colton could not show that it was entitled to recover any of its past costs, its claim for declaratory relief as to its future costs necessarily failed.

 

    The Appeals Court said, "Colton first seeks reversal of the district court's summary judgment denying recovery of its past response costs. Colton challenges the district court's conclusion that the wellhead treatment program was unnecessary because there was no immediate threat to the public health or environment. See 42 U.S.C. § 9607(a)(4)(B). Colton concedes, however, that it failed to comply with the national contingency plan in its past response action. Because Colton's concession is a sufficient ground upon which to affirm the summary judgment with respect to past response costs, we decline to review the merits of the district court's conclusion that such costs were unnecessary."

 

    Colton also contends that the district court erred in granting summary judgment denying its claim for declaratory relief as to its future response costs. . . The Appeals Court said, "Colton argues that its failure to incur recoverable response costs in the past has no bearing on whether it will incur such costs in the future. Therefore, Colton contends that it should still be allowed to seek declaratory relief as to liability for its future costs. Whether a CERCLA plaintiff's failure to establish liability for its past costs necessarily dooms its bid to obtain a declaratory judgment as to liability for its future costs appears to be an issue of first impression in this circuit. Our sister circuits have taken divergent approaches to this issue." The Appeals Court cites cases from the Eighth, Second, Third, First and Tenth Circuits.

 

    In affirming the district court's summary judgment, the Appeals Court ruled in part, "We conclude that CERCLA's purposes would be better served by encouraging a plaintiff to come to court only after demonstrating its commitment to comply with the NCP and undertake a CERCLA-quality cleanup. Upon establishing liability under section 107, the plaintiff can 'obtain reimbursement for [its] initial outlays, as well as a declaration that the responsible party will have continuing liability for the cost of finishing the job.' Dant & Russell, 951 F.2d at 249-50. Such a declaration would allow the plaintiff to avoid costly and time-consuming relitigation of liability once it has already been established. See Kelley v. E.I. DuPont de Nemours & Co., 17 F.3d 836, 844 (6th Cir. 1994) ('Congress included language [in section 113(g)(2)] to insure that a responsible party's liability, once established, would not have to be relitigated . . . .'). Where, as here, the plaintiff fails to establish section 107 liability in its initial cost-recovery action, no declaratory relief is available as a matter of law."

 

    Access the complete opinion (click here).