Ford Motor Company et al v. Michigan Consolidated Gas Company

Filing 148

OPINION AND ORDER denying 120 Motion to Dismiss. Signed by District Judge Paul D. Borman. (DTof)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
FORD MOTOR COMPANY, and
SEVERSTAL NORTH AMERICA, LLC,
Plaintiffs/Counter-Defendants,
v.

Case No. 08-13503
Paul D. Borman
United States District Court

MICHIGAN CONSOLIDATED GAS
COMPANY (“MICHCON”)
Defendant/Counter-Plaintiff,
Cross-Plaintiff,
v.
UNITED STATES OF AMERICA,
Defendant/Cross-Defendant.
_________________________________/
OPINION AND ORDER DENYING
UNITED STATES’ MOTION TO DISMISS MICHCON’S THIRD PARTY COMPLAINT
AGAINST THE UNITED STATES (Dkt. No. 120)

I. INTRODUCTION AND PROCEDURAL HISTORY
Now before the Court is the United States’ Motion to Dismiss the Third-party Complaint
pursuant to Rule 12(b)(6) filed by Michigan Consolidated Gas Company (“MichCon”). (Dkt.
No. 120). MichCon filed its Response to the United States’ Motion to Dismiss on February 11,
2013. (Dkt. No. 123). The United States filed its Reply on February 21, 2013. (Dkt. No. 124).
Plaintiffs Ford Motor Company and Severstal North America, LLC. (collectively “Plaintiffs”)
also filed a Reply entitled “Joinder in the United States’ Request for Certification under Fed. R.

Civ. P. 54(b).” (Dkt. No. 125). A hearing on this matter was held on December 6, 2013.1
The underlying CERCLA action was originally filed by Plaintiffs Ford and Severstal
against MichCon on August 13, 2008. (Dkt. No. 1). MichCon then filed a Counterclaim against
both Plaintiffs. (Dkt. No. 40). Thereafter, United States District Judge Robert H. Cleland
granted Plaintiffs’ Motion to Partially Dismiss MichCon’s Counterclaim. (Dkt. No. 55).
MichCon then filed a Motion for Reconsideration (Dkt. No. 58) seeking leave to Amend the
Counterclaim, and sought leave to file a Third-Party Complaint. Judge Cleland granted this
Motion for Reconsideration on May 5, 2011. (Dkt. No. 69). Accordingly, Defendant MichCon
filed its Amended Counterclaim against Plaintiffs and a Third-Party Complaint against the
United States on May 11, 2011. (Dkt. Nos. 70 & 71).
In an earlier, separate case before Judge Bernard A. Friedman, Ford Motor Co. v. United
States, No. 04-72018 (“Ford I”), Ford and the United States were engaged in settlement
negotiations regarding the Rouge Manufacturing Complex (“RMC”). Eventually, Severstal was
also included in the negotiations. (See Dkt. No. 115, Opinion and Order Granting Consent
Decree, at 6). These negotiations in Ford I also revealed issues related to MichCon’s potential
liability regarding the Schaefer Road Area (“SRA”). (Id.). Thereafter, Plaintiffs filed the
underlying action against MichCon (“Ford II”). (Id.).
Plaintiffs contend that MichCon was involved in the mediation and given the same
“factual SRA Settlement Area information that Ford, Severstal and the United States had
exchanged in earlier mediations.” (Id. at 6-7). Thus, two proposed consent decrees were agreed

1

Pursuant to the Court’s instructions at the hearing, this Opinion and Order does not
address the issue of certification pursuant to Fed. R. Civ. P. 54(b). This issue will be addressed
separately.
2

upon by Ford, Severstal and the United States. (Id. at 7). While the first consent decree
regarding the RMC was approved and entered by Judge Friedman in Ford I, he declined to enter
the second consent decree regarding the SRA (“SRA CD”) because it is the subject of this
litigation and directed the parties to file the SRA CD in this action. (Id.).
Thereafter, Plaintiffs filed a Second Amended Complaint (Dkt. No. 100) and then on
December 21, 2011, Plaintiffs filed a Third Amended Complaint in this matter (both pursuant to
stipulations). (Dkt. No. 105). Both the Second and the Third Amended Complaints asserted
claims by Plaintiffs against the United States, in addition to MichCon. Plaintiffs then filed a
Motion for Entry of a Consent Decree (the SRA CD). (Dkt. No. 106). MichCon opposed the
entry of the SRA consent decree in a Response and Sur-Reply. (Dkt. Nos. 110 &113).
On September 28, 2012, Judge Cleland issued an Opinion and Order granting Plaintiffs’
Motion for Entry of a Consent Decree. (Dkt. No. 115). The Consent Decree was entered on
October 9, 2012. (Dkt. No. 116).
The United States filed the present motion seeking to dismiss MichCon’s Third-party
Complaint on January 17, 2013. (Dkt. No. 120). On March 20, 2013, Judge Cleland entered an
Order of Disqualification in this matter and the case was transferred to this Court. (Dkt. No.
128).
II. BACKGROUND
A. History of The Rouge Manufacturing Complex and The Schaefer Road Area
In the late 1910s, Ford Motor Company (“Ford”) built the Rouge Manufacturing
Complex (“RMC”) in Dearborn, Michigan. The RMC was a vertically integrated automotive
production plant. The operations at the plant were “comprehensive and encompassed all phases

3

of production, from the processing of raw materials through the manufacture and assembly of
finished products.” (Third-party Complaint (“T-P Complaint”), Dkt. No. 71, ¶ 8).
Among other things, the RMC engaged in coke oven production (utilizing up to 183 coke
ovens) involving the destructive distillation of coal from 1919 through 1987. (T-P Compl. ¶ 10).
The operation of these coke ovens resulted in the production of gas and by-products. (T-P
Compl. ¶ 10). Currently, the RMC is being regulated as an “active and ongoing corrective
action facility under the Resource Conservation and Recovery Act (“RCRA”) and the Natural
Resources and Environmental Protection Act (“NREPA”). (T-P Compl. ¶ 11).
MichCon, or its predecessor, once owned a parcel of land located immediately west of
the RMC and the original River channel. (T-P Compl. ¶ 12). From 1968 until 1973, the Army
Corps of Engineers (“Army Corps”) rechanneled the River in response to a 1947 flood. (T-P
Compl. ¶ 14). In 1968, prior to the River being rechanneled, MichCon sold 22 acres of its land
parcel to Ford. (T-P Compl. ¶ 13). Prior to the rechanneling project, these 22 acres were
located on the west side (the “MichCon” side) of the original River channel, however, the
rechanneling caused those acres to be relocated on the east side (the “Ford” side) of the new
River channel. (T-P Compl. ¶ 14). The 22 acres are now part of a larger area known in this
litigation as the Schaefer Road Area (“SRA”).2 (T-P Compl. ¶ 13). MichCon retains ownership

2

Although “SRA” is used in MichCon’s Third-party Complaint, it is not defined.
However, MichCon attaches and refers to Plaintiffs’ First Amended Complaint in its Third-party
Complaint as Exhibit A. (See T-P Compl. ¶ 23, Ex. A). As the First Amended Complaint
defines the SRA, the Court relies upon that definition for purposes of this motion. “The [SRA]
Property, which is the principal property at issue in this litigation, is approximately 48 acres, is
entirely on the east side of the new River channel, and includes the original river channel and a
portion of the former [Manufactured Gas Plant] site. The 48 acres consists of the 26 acres Ford
acquired in 1938 [] and the 22 acres acquired in 1968 [].” (Pls.’ First Amend. Compl. ¶ 18).
4

of the land to the west of the new River channel. (T-P Compl. ¶ 15).
MichCon alleges that during the rechanneling of the River, the Army Corps “excavated
through an open dump operated by the City of Melvindale, a portion of MichCon’s former waste
water ponds, sediments in the former River channel, and one of Ford’s SRA sludge ponds that
Ford had operated since 1954.” (T-P Compl. ¶ 16). MichCon contends that the Army Corps’
activities “disrupted, displaced, and relocated substantial volumes of contaminated material” and
that contaminated material was then used as “fill” in other areas of the SRA. (T-P Compl. ¶ 16).
MichCon further alleges that the Army Corps installed a concrete channel, pea gravel bed,
dewatering pipe and pressure relief vents that created a “preferential pathway” which allowed
contamination to more easily migrate. (T-P Compl. ¶ 17). MichCon asserts that due to the
detection of hazardous substances and metals being detected on the SRA in excess of applicable
cleanup criteria, the SRA is a “facility” under CERCLA, § 101(9).
MichCon alleges that it has incurred and will continue to incur “necessary response
costs” including the retention of environmental consultants who have: (1) analyzed the SRA
property; (2) analyzed nearby properties; (3) analyzed the extent of the contamination at or
emanating from the SRA and nearby properties; (4) investigated and evaluated the releases and
the causes of contamination at the SRA and nearby properties requiring the remediation as a
result of releases by the United States and other parties; (5) evaluated any migration to
MichCon’s current property; (6) analyzed potential remedial measures; (7) analyzed response
activities proposed by Ford and Severstal, and (8) provided comments to the Michigan
Department of Natural Resources and Environment on the scope and adequacy of the
investigations and effectiveness of the Proposed Remedy. (T-P Compl. ¶¶ 37, 39).

5

B.

Ford and Severstal’s Claims against MichCon and the United States
Currently Ford and Severstal North America, Inc. (“Severstal”) are involved in designing

a permanent remedy for the contamination of the SRA and are under the oversight of the
Michigan Department of Environmental Quality (“MDEQ”). (T-P Compl. ¶¶ 39, 40). Ford and
Severstal are incurring and will continue to incur costs as a result these activities. (T-P Compl.
¶ 23; see also Ex. A, Pl.’s First Amend. Compl.). As a result, Ford and Severstal filed the
underlying action against MichCon seeking cost recovery and contribution from MichCon under
CERLCA §§ 107(a) and 113(f) and NREPA for these costs. (Id.). In response to Ford and
Severstal’s suit, MichCon filed a Counterclaim against them and also this Third-party Complaint
against the United States seeking “contribution” under CERCLA, § 113(f) towards MichCon’s
potential liability to Ford and Severstal and “cost recovery” under CERCLA, § 107(a). (T-P
Compl. ¶¶ 25-30).
In 2004, Ford also sought to recover response costs from the United States in the separate
but related case mentioned supra, Ford I, No. 04-72018. A consent decree between Ford,
Severstal and the United States was entered in Ford I on October 19, 2011. (United States’ Br.,
Ex. 2). The Ford I consent decree resolved the United States’ liability as to all liability
regarding contamination at or emanating from the RMC except for the liability attributable to the
Army Corps’ rechanneling project. (United States’ Br., Ex. 2).
On October 9, 2012 the SRA CD was entered in this action between the United States,
Ford and Severstal. (Dkt. No. 116; see also United States’ Br., Ex. 3). The SRA CD resolved all
claims (whether asserted or not) by the Plaintiffs against the United States regarding the SRA in

6

Ford II.3 (Id.).
III. LEGAL STANDARD
FED. R. CIV. P. 12(b)(6) allows for the dismissal of a case where the complaint fails to
state a claim upon which relief can be granted. When reviewing a motion to dismiss under Rule
12(b)(6), a court must “construe the complaint in the light most favorable to the plaintiff, accept
its allegations as true, and draw all reasonable inferences in favor of the plaintiff.” DirectTV, Inc.
v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007). But the court “need not accept as true legal
conclusions or unwarranted factual inferences.” Id. (quoting Gregory v. Shelby County, 220 F.3d
433, 446 (6th Cir. 2000)). “[L]egal conclusions masquerading as factual allegations will not
suffice.” Eidson v. State of Term. Dep’t of Children's Servs., 510 F.3d 631, 634 (6th Cir. 2007).
The Supreme Court explained that “a plaintiff's obligation to provide the ‘grounds' of his
‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of
the elements of a cause of action will not do. Factual allegations must be enough to raise a right
to relief above the speculative level....” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555
(2007) (internal citations omitted). Dismissal is only appropriate if the plaintiff has failed to
offer sufficient factual allegations that make the asserted claim plausible on its face. Id. at 570.
In Ashcroft v. Iqbal, 556 U.S. 662 (2009) the Supreme Court clarified the concept of
“plausibility” stating, “[a] claim has facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the defendant is liable for the

3

The Court notes that “[i]n the SRA CD, the SRA Settlement Area is larger than simply
the SRA. It also includes ‘other small portions of land not currently or previously owned by
Ford or Severstal, and the segment of the Rouge River adjacent to the 48-acre parcel.’” (Dkt.
No. 116, Opinion and Order Granting Plaintiff’s Motion for Entry of a Consent Decree, at 5
(citation omitted).
7

misconduct alleged. The plausibility standard is not akin to a ‘probability requirement,’ but it
asks for more than a sheer possibility that a defendant has acted unlawfully. Id. at 678 (internal
citations omitted).
Thus, “[t]o state a valid claim, a complaint must contain either direct or inferential allegations
respecting all the material elements to sustain recovery under some viable legal theory.”
Bredesen, 500 F.3d at 527 (citing Twombly, 550 U.S. at 562).
Defendant has brought its motion pursuant to Rule 12(b)(6) but both parties refer to
documents attached to the parties’ briefs and the Third-party Complaint. All of these attached
documents: Plaintiffs’ First Amended Complaint, SRA CD, and the RMC Consent Decree are
documents that are available on the public docket. “[D]ocuments that a defendant attaches to a
motion to dismiss are considered part of the pleadings if they are referred to in a plaintiff’s
complaint and are central to her claim.” Weiner v. Klais and Co., Inc., 108 F.3d 86, 89 (6th Cir.
1997). Further, in a motion to dismiss, a court may also rely upon matters of public record. See
Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007); Bassett v. Nat’l
Collegiate Athletic Ass’n, 528 F.3d 426, 430 (6th Cir. 2008). Therefore, these attached
documents are properly considered in evaluating this motion to dismiss pursuant to FED. R. CIV.
P. 12(b)(6).
IV. ANALYSIS
MichCon’s Third-party Complaint sets forth two claims under the Comprehensive
Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. § 9601, et
seq. The first claim is a claim for contribution under § 113(f), and the second is a claim for

8

recovery of costs under § 107(a).4 In its Response to the United States’ Motion to Dismiss,
MichCon concedes its contribution claim, pursuant to § 113(f), is barred by the October 9, 2012
Consent Decree entered in this action between Plaintiffs and the United States. (MichCon’s Br.
at 1). Therefore, the only matter before the Court is whether MichCon’ cost recovery claim
pursuant to § 107(a) should be dismissed.
A.

CERCLA History and Framework
The Sixth Circuit has explained that CERCLA, “facilitates cleanup and remediation of

contaminated lands, and shifts the financial burden of such environmental response actions to the
parties responsible for releasing hazardous substances.” ITT Industries, Inc. v. BorgWarner,
Inc., 505 F.3d 452, 456 (6th Cir. 2007) (citation omitted). To this end, § 107(a) of CERCLA
imposes strict liability for environmental contamination based on four categories of parties
subject to liability (also commonly referred to as potentially responsible parties, or “PRPs”):
(1) the owner and operator of a vessel or a facility; (2) any previous owner or
operator during any time in which hazardous substances were disposed at a waste
facility; (3) any person who arranged for disposal or treatment of hazardous
substances at the waste facility; and (4) any person who transported hazardous
substances to a waste facility.
Id., (citing Centerior Serv. Co. v. Acme Scrap Iron & Metal Corp., 153 F.3d 344, 347 n. 8 (6th
Cir. 1998)); see also Burlington N. and Santa Fe Ry. Co. v. United States, 556 U.S. 599, 608
(2009) (recognizing that the liability imposed by CERCLA is “strict”). Section 107(a) further
provides that those PRPs “shall be liable” for “all costs of removal or remedial action incurred
by the United States Government or State or an Indian Tribe” and also for “any other necessary
costs of response incurred by an other person.” CERCLA, § 107(a)(4)(A)-(B). Therefore, under

4

Except otherwise noted, section references are to the provisions of CERCLA.
9

§ 107(a)(4)(A) the government can recoup costs from PRPs while subsection (B) creates “an
implied private right of action to recover ‘necessary costs of response.’” ITT Industries, 506 F.3d
at 456 (citation omitted).
As CERCLA was originally enacted, there was no provision which explicitly provided
for a right of action for contribution. However, a number of courts held that although “CERCLA
did not mention the word ‘contribution’ such a right arose either impliedly from provisions of
the statute, or as a matter of federal common law.” Cooper Industries, Inc. v. Aviall Serv., Inc.,
543 U.S. 157, 162 (2004) (collecting cases and noting that such a conclusion was “debatable”
given the Supreme Court’s refusal to recognize other implied rights to contribution in other
federal statutes). CERCLA was amended in 1986 with the passage of the Superfund
Amendments and Reauthorization Act of 1986 (“SARA”). Id. This amendment provided an
express cause of action for contribution in certain circumstances, codified as CERCLA §
113(f)(1) and § 113(f)(3)(B). Therefore, “after SARA, CERCLA provided for a right to cost
recovery in certain circumstances, § 107(a), and separate rights to contribution in other
circumstances, §§ 113(f)(1), 113(f)(3)(B).” Id. at 163.
However, courts interpreting CERCLA after the passage of SARA began to expand the
reach of § 113(f) by providing an exclusive remedy to PRPs and shrink the parameters of §
107(a) by providing cost recovery only to those ‘innocent parties’. United States v. Atlantic
Research Corp., 551 U.S. 128, 132 (2007) (citation omitted). “But as courts prevented PRPSs
from suing under § 107(a), they expanded § 113(f) to allow PRPs to seek ‘contribution’ even in
the absence of a suit under § 106 or § 107(a).” Id.
In more recent case law, the Supreme Court attempted to flesh out the interplay between

10

CERCLA provisions § 107(a) and § 113(f) which are so often at loggerheads. In Cooper
Industries, the Supreme Court held that pursuant to the plain language of the statute, a private
party may only pursue contribution under § 113(f)(1) from other PRPs subject to certain
conditions, namely “during or following” a civil action under § 106 or § 107. Cooper Industries,
543 U.S. at 161, 166. The Supreme Court’s narrow reading of the § 113(f)(1) caused certain
courts to “revisit” the issue of whether PRPs could sue for cost recovery under § 107(a) or
whether a PRP’s exclusive cause of action was through § 113(f). Atlantic Research, 551 U.S. at
133 (citations omitted).
Three years later, in Atlantic Research, the Supreme Court addressed the issue and held
that Ҥ 107(a) provides so-called potentially responsible parties (PRPs) [] with a cause of action
to recover costs from other PRPs.” Id. at 131. The Supreme Court explained that “costs
incurred voluntarily are recoverable only by way of § 107(a)(4)(B), and costs of reimbursement
to another person pursuant to a legal judgment or settlement are recoverable only under § 113(f).
Thus, at a minimum, neither remedy swallows the other...” Id. at 139 n. 6.
The Atlantic Research decision did not, however, resolve the tension between § 107(a)
and § 113(f) but rather created a new playing field for these issues to unfold. Indeed, the
Supreme Court left at least three critical questions unanswered in Atlantic Research: (1) the
Supreme Court “assume[d] without deciding that § 107(a) provides for joint and several
liability” (Id. at 140 n. 7); and (2) the Supreme Court declined to decide whether a PRP who
sustains expenses pursuant to a consent decree or following a § 106 or § 107(a) suit (described as
“compelled costs”) could recover those costs through §§ 107(a), 113(f) or both (Id. at 139 n. 6.);
and (3) the Supreme Court noted that “[b]ecause § 107(a) expressly permits PRPs to seek cost

11

recovery, we need not address the alternative holding of the Court of Appeals that § 107(a)
contains an additional implied right to contribution for PRPs who are not eligible for relief under
§ 113(f)” (Id. at 141 n. 8).
B.

Claim for Cost Recovery
The Court now turns to the instant case and the novel issue presented: whether

MichCon’s claim for cost recovery under § 107(a) is barred by the SRA CD, which does not bar
cost recovery claims by its plain terms. The SRA CD, states in relevant part:
The Parties agree, and by entering this Consent Decree this Court finds, that the
United States is entitled, as of the Effective Date, to protection from Contribution
actions or claims as provided by Section 113(f)(1) of CERCLA, 42 U.S.C.
9613(f)(1), or as may be otherwise provided by law, for “matters addressed” in
this Consent Decree. The “matters addressed” in this Consent Decree are Covered
Matters as defined in Paragraph 4(b) hereof. Any rights the United States may
have to obtain contribution or otherwise recover costs or damages from persons
not party to this Decree are preserved.
(Dkt. No. 116, SRA CD, ¶7, emphasis added). “Covered Matters” are then defined in the SRA
CD as:
any and all past or future claims, including any contractual or Tort Claims, that
were, could now be or hereafter could be asserted against the United States, to the
extent that they arise from or are directly related to BOTH:
(A)

(B)

Activities conducted by the Army Corps of Engineers in the
Schaefer Road Settlement Area on or before the Effective Date;
AND
Pollutants, contaminants, solid wastes, Hazardous Wastes, and
Hazardous Substances: (1) at or on the Schaefer Road Settlement
Area on or before the Effective Date; (2) at or on the Schaefer
Road Settlement Area on or before the Effective Date, but which
have come to be, or will after the Effective Date ... come to be,
located in any [other] place; or (3) that arise out of any conditions
at the Schaefer Road Settlement Area, on or before the Effective
Date.

(SRA CD, ¶4(b)).
12

As explained above, MichCon concedes that Count I of its Third-party Complaint which
seeks contribution under § 113(f) is barred due to the plain language of the SRA CD. However,
MichCon maintains that it has a viable claim against the United States for the voluntary costs it
incurred in relation to the SRA property under § 107(a).
As an initial matter, the Court notes that the United States has not asserted that MichCon
fails to set forth a prima facie claim for cost recovery.5 Rather, the pertinent issue before the
Court is whether a consent decree between the United States and Plaintiffs can foreclose a §
107(a) claim for voluntary costs incurred by MichCon for the reason that such a claim “shares
sufficient attributes of common law contribution claims to fall within the scope of the []
“Protection Against Claims” provision of the [SRA CD]”. (United States Br. 14 n.5). The Court
finds that it does not.
Not surprisingly, the issue at hand is one regarding the rights of a PRP under § 107(a)
and § 113(f)(1). Unlike the other multitude of cases which attempt to reconcile (or skirt) the
overlap between § 107(a)(4)(B) and § 113(f)(1), the added wrinkle in this case is whether the
United States can bar a cost recovery claim on the basis of a consent decree that prohibits
contribution claims by non-settlors.
The United States contends that MichCon’s status as a PRP (ergo liable under CERCLA)
prevents it from invoking joint and several liability under § 107(a) for the costs it incurred. The

5

To assert a prima facie claim for cost recovery pursuant to § 107(a), a party must set
forth four elements: (1) the property at issue is a “facility”; (2) there has been a “release” or
“threatened release” of a hazardous substance; (3) the release has caused the plaintiff to incur
“necessary costs of response” that are “consistent” with the NCP [National Contingency Plan];
and (4) the defendant is in one of four categories of potentially responsible parties.” Reg’l
Airport Auth. of Louisville v. LFG, LLC, 460 F.3d 697, 703 (6th Cir. 2005). There is no dispute
that all four of these elements have been set forth in MichCon’s Third-party Complaint.
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United States argues “the [§ 107] claim fundamentally remains one for contribution because
MichCon admits its own liability for the contamination being addressed that it shares with other
PRPs for the Schaefer Road Area, which is being cleaned up at the behest of, and under the strict
oversight of, the MDEQ.”6 (United States Br. at 12). Therefore, the United States concludes
that any costs MichCon seeks to recover (voluntary or otherwise) must be apportioned among all
PRPs and cannot be recovered from just one party through § 107(a). The United States’
argument can be reduced to this: (1) MichCon’s § 107(a) claim must be construed as a
contribution claim because its status as PRP mandates that it cannot invoke joint and several
liability and (2) therefore MichCon’s claim is barred by the SRA CD which prohibits a
contribution claim “as may otherwise provided by law”.
The reasoning behind United States’ argument is inapposite to the holding in Atlantic
Research. The Supreme Court recognized in Atlantic Research that under certain circumstances
PRPs can recover under both § 107(a)(4)(B) and § 113(f)(1) but the two sections “provide two
clearly distinct remedies.” Id. at 137-38 (internal quotation marks and citation omitted).
Specifically, “CERCLA provide[s] for a right to cost recovery in certain circumstances, §
107(a), and separate rights to contribution in other circumstances, §§ 113(f)(1), 113(f)(3)(B).”
Id. at 138 (emphasis in original) (quotation marks and citation omitted). The Supreme Court has
explained:

6

The Court recognizes that MichCon vigorously disputes that it has admitted liability
under CERCLA. However, whether MichCon’s allegations in its Third-party Complaint
amount to an admission of liability under CERCLA’s strict liability framework is not an issue
that need be decided at this time because even assuming MichCon’s liability, the United States’
argument fails (discussed infra). See Burlington N., 556 U.S. at 608 (recognizing that the
liability imposed by CERCLA is “strict”).
14

the remedies available in §§ 107(a) and 113(f) complement each other by
providing causes of action “to persons in different procedural circumstances.”
Section 113(f)(1) authorizes a contribution action to PRPs with common liability
stemming from an action instituted under §106 or §107(a). And § 107(a) permits
cost recovery (as distinct from contribution) by a private party that has itself
incurred cleanup costs. Hence, a PRP that pays money to satisfy a settlement
agreement or a court judgment may pursue a § 113(f) contribution. But by
reimbursing response costs paid by other parties, the PRP has not incurred its own
costs of response and therefore cannot recover under § 107(a). As a result,
though eligible to seek contribution under §113(f)(1), the PRP cannot
simultaneously seek to recover the same expenses under § 107(a).
Id. at 139 (internal quotation marks and citations omitted). Therefore, a PRP that who alleges it
voluntarily incurred cleanup costs can recover those expenses “only by way of § 107(a)(4)(B)”,
while “costs of reimbursement to another person pursuant to a legal judgment or settlement are
recoverable only under § 113(f).” Id. at 139 n.6.
In this action, the United States relies upon a string of cases (all issued prior to Atlantic
Research) for the proposition that PRP remedies under § 107(a)(4)(B) sound in “contribution.”
(United States Br. at 12 n.4). The primary case the United States relies on for this proposition is
Centerior, a CERCLA case in which the United States Court of Appeals for the Sixth Circuit
held a party seeking an apportionment of costs attributable to contamination for which all parties
were liable was a “quintessential” claim for contribution. Id., 153 F.3d at 351. The Sixth Circuit
explained in Centerior that cost recovery actions under § 107(a) brought by PRPs were
“necessarily action for contribution, and are therefore governed by the mechanisms set forth in §
113(f).” Id. at 350. However, as Judge Cleland explained in a previous Opinion and Order in
this case the analysis in Centerior “does not survive” Atlantic Research, and therefore, to
determine whether a party’s claim was one of contribution, a court must look to what type of
cost was incurred rather than the nature of the liability at issue. (Dkt. No. 36 at 13-14) (emphasis

15

added). Further, the Sixth Circuit has recognized the abrogation of Centerior in a more recent
decision, explaining that,
contrary to Centerior’s interdependent construction of [CERCLA], Atlantic
Research reiterated that the remedies provided under CERCLA are ‘clearly
distinct.’ Therefore, the appropriateness of a § 107(a) cost recovery or § 113(f)
contribution action varies depending on the circumstances leading up to the
action, not the identity of the parties.
ITT Indus., 506 F.3d at 458. Therefore, the United States’ argument that MichCon’s cost
recovery claim must be recast as one for contribution is based on an argument that did not and
cannot survive the analysis in Atlantic Research.
Further, the Supreme Court noted in Atlantic Research that the government “use[d] the
word ‘contribution’ as if it were synonymous with any apportionment of expenses among PRPs
... [and] [t]his imprecise usage confuses the complementary yet distinct nature of the rights
established in §§ 107(a) and 113(f).” Atlantic Research, 551 U.S. at 138 (internal citations
omitted). This “imprecise usage” is at the heart of the United States’ current (and apparently
recycled) argument that MichCon’s very status as a PRP (liable under CERCLA) prohibits it
from asserting a cost recovery claim against another PRP. Following the United States’
reasoning, any action by a PRP against another PRP will be one that “sounds” in contribution,
where all PRPs are strictly liable under the framework of CERCLA. See CERCLA § 107(a)(1)(4); see Atlantic Research, 551 U.S. at 138 (noting same parenthetically). As Atlantic Research
held a PRP can bring a cost recovery claim pursuant to § 107(a) against another PRP this
reasoning is no longer sound. Therefore, the United States’ contention that this Court should
restyle MichCon’s cost recovery claim into a claim for contribution due to the fact MichCon
shares liability with other PRPs would obviate any distinction between a § 107(a) claim and a

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contribution claim under § 113(f).
After arguing that the § 107(a) claim must be found to be a contribution claim
masquerading in a sheep’s clothing (or as a cost recovery claim as it were), the United States
goes on to argue that the Protection Against Claims Provision in the SRA CD bars such a claim
and that to allow otherwise would wrongfully deprive it of the primary benefit of settling with
Plaintiffs. (United States’ Br. at 16). The United States relies upon federal common law to
make this connection contending that the language “or as may be otherwise provided by law, for
‘matters addressed’ in this Consent Decree” recognizes “the common law protection affirmed in
the Protection Against Claims Provision”.7 (United States’ Reply Br. at 4). The United States
relies upon the maritime case of McDermott, Inc. v. Amclyde, 511 U.S. 202, 210-11 (1994) for
the proposition that federal common law provides that private settlements between less than all
the defendants and set forth in consent decrees offer protection against contribution claims
regarding matters addressed in those settlements.8

7

There is no dispute that MichCon’s claim would fall within the “matters addressed” in
the SRA CD.
8

The Court notes that McDermott is a maritime case upon which the Sixth Circuit has
never relied for any point of federal common law. Further, the Court notes that there is no case
law, binding or otherwise, on point for this particular issue (that a CERCLA consent decree may
bar a cost recovery claim asserted by a non-settling party). In McDermott, the issue presented
was whether “the liability of the nonsettling defendants should be calculated with reference to
the jury’s allocation of proportionate responsibility, or by giving the nonsettling defendants a
credit for the dollar amount of the settlement.” Id. at 204. The Supreme Court evaluated three
alternative approaches to determining the liability and held that following the proportionate
approach was the correct path. Id. As the United States accurately describes, the Supreme Court
did reject a settlement approach that would have preserved the rights to a contribution claim for
nonsettling defendants, finding that “it discourages settlement, because settlement can only
disadvantage the settling defendant.” Id. at 210-11. Further, the Supreme Court noted the
claims for contribution would burden the courts with additional litigation. Id. The Supreme
Court went on to find that the although the other two approaches (pro tanto and proportionate
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The inconvertible fact remains that MichCon’s claim is not a contribution claim, but one
for cost recovery. The United States’ argument that federal common law works to bar
MichCon’s claim hangs on the assumption that the Court can refashion MichCon’s cost recovery
claim into a contribution claim. As set forth supra, the United States’ argument based on
MichCon’s alleged status as a PRP cannot bridge that gap. Therefore, to the extent that the
United States argues that MichCon’s § 107(a) claim must be found to be a “contribution” claim
because of MichCon’s status as a PRP, the argument is rejected.9
V. CONCLUSION

share) were closely matched, the proportionate share approach won the day because it was more
consistent with a previous maritime decision, United States v. Reliable Transfer Co., 421 U.S.
387, 409 (1975). Id. at 217 (The Court also recognized that it had previously abandoned the rule
of “divided damages” in Reliable Transfer, therefore, being consistent with this new case law
was one of the “paramount” considerations in evaluating the possible alternatives.).
While the Court recognizes that there are CERCLA cases which bar contribution claims
of parties against private settling defendants based on judicial economy and consistency with
CERCLA’s objectives to obtain quick cleanups, the United States did not cite and this Court
could not find, any case law in any district barring cost recovery claims of private settling
defendants for these reasons. See Resp. Envtl. Solutions Alliance v. Waste Mgmt., Inc., No. 04013 2001 WL 382617 (S.D. Ohio, Feb. 3, 2011); Foamseal, Inc. v. Dow Chem. Co., 991 F. Supp.
883 (E.D. Mich. 1998).
9

MichCon has asserted in its Third-party Complaint that its costs were voluntary such
that the costs are not the result of a judgment, settlement or administrative order regarding the
SRA. (Compl. 22). The United States argues that MichCon’s costs were not actually voluntarily
incurred because they are in response to Ford and Severstal’s cleanup which is compelled
pursuant to a state administrative order. (United States Br. at 14). This issue is one that
implicates a question left open by the Supreme Court in Atlantic Research; whether costs
compelled by an administrative order or judicial settlement are recoverable under §§ 107(a),
113(f) or both. Atl. Research, 551 U.S. at 139 n.6. To the extent the United States argues that
the costs should be viewed as compelled rather than voluntary, this inquiry is not well suited to a
motion to dismiss. This ruling is not on a motion for summary judgment and the Court will not
become involved in the weighing of allegations regarding the necessity of these costs. MichCon
has pled that these costs were necessary and Judge Cleland specifically rejected Plaintiffs’
arguments to the contrary. (See Dkt. No. 69).
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For all these reasons, the Court DENIES the United States’ Motion to Dismiss the Thirdparty Complaint (Dkt. No. 120).
IT IS SO ORDERED.

s/Paul D. Borman
PAUL D. BORMAN
UNITED STATES DISTRICT JUDGE
Dated: January 23, 2014

CERTIFICATE OF SERVICE
The undersigned certifies that a copy of the foregoing order was served upon each attorney or
party of record herein by electronic means or first class U.S. mail on January 23, 2014.

s/Deborah Tofil
Case Manager

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