Critical Third Circuit Decision on CERCLA Contribution Claims

The Third Circuit’s recent decision in Cranbury Brick Yard, LLC v. United States, No. 18-3287, 2019 WL 6223747 (3d Cir. Nov. 22, 2019), could have significant impacts on a party’s ability to pursue contribution claims under Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) for contaminated sites in New Jersey. The Court found that an amended consent order between the New Jersey Department of Environmental Protection (“NJDEP”) and the subsequent purchaser (the “Appellant”) of the brownfield site was a settlement resolving potential CERCLA liability in exchange for contribution-claim immunity, which precluded the Appellant from bringing cost-recovery claims against other potentially responsible parties. For the reasons set forth in Agere Sys., Inc. v. Advanced Envtl. Tech Corp., 602 F.3d 204, 229 (3d Cir. 2010), the Court held that the Appellant could only bring contribution claims under CERCLA to recover an equitable allocation of its’ remedial costs. While CERCLA does not explicitly provide a statute of limitations period for administrative consent orders that are not “judicially approved”, the Court applied the same three (3) year statute of limitations period prescribed in 42 U.S.C. § 9613(g)(3). This statute of limitations period begins to run when a party administratively settles its liability, not when the cleanup actually occurs. As a result, the Court held that the Appellant’s contribution claim was time-barred because it failed to file the action within three (3) years of the amended consent order with NJDEP.

Claims for contribution against other potentially responsible parties should be considered prior to entering into an administrative settlement with NJDEP, which resolves potential CERCLA liability in exchange for contribution-claim immunity, or risk losing those claims forever.