In November, the Third Circuit Court of Appeals affirmed a granting of summary judgment by the District Court for the District of New Jersey. The Court of Appeals determined that the current property owner’s claim for contribution pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) was untimely because the statute of limitations for contribution claims begins to accrue when the party seeking contribution administratively settles its liability. That decision, Cranbury Brick Yard, LLC v. United States of America, fills one of the statutory gaps that exists in CERCLA.

The site in the case was a weapons manufacturing facility in Cranbury, New Jersey. During World War II and the Korean War, Unexcelled Manufacturing Co. manufactured bombs, anti-aircraft ammunition, grenade fuses, and other high-powered weapons for the U.S. Military. Following an investigation of the site by the New Jersey Department of Environmental Protection (NJDEP), a directive identified several responsible parties, including the former owner of the site and the U.S. Navy.

In 2005, the then owner and the former operator of the site entered into a Consent Order with NJDEP. Pursuant to the Consent Order, the owner and former operator agreed to clean up the site, NJDEP agreed not to sue either party to the Consent Order. This Consent Order was considered an administrative settlement within the meaning of CERCLA thereby resolving the liability of the site’s owner and former operator. In 2006, Cranbury Brick Yard (Cranbury Brick) purchased the site and joined in the 2005 Consent Order. In 2013, Cranbury Brick began cleaning up the site. Then, in April 2015, Cranbury Brick sued the federal government seeking, among other things, contribution under CERCLA.

Following discovery, both sides moved for summary judgment and the District Court granted the government’s motion and denied Cranbury Brick’s. In granting the government’s motion for summary judgment, the District Court held, among other things, the applicable statute of limitations is three years from when all parties to the 2005 Consent Order signed it. Cranbury Brick brought its action for contribution nine years after signing onto the 2005 Consent Order and, therefore, its claim was barred by the applicable statute of limitations.

In affirming the District Court’s granting of summary judgment in favor of the government, the Third Circuit reasoned that pursuant to Section 9613(g)(3) “no action for contribution … may be commenced more than three years after” the occurrence of certain events (e.g., the date of entry of a judicially approved settlement with respect to costs or damages). All parties agreed that events that trigger the three-year statute of limitations for contribution pursuant to Section 9613(g)(3) were inapplicable in the case. As such, the Third Circuit found that a statutory gap existed and borrowed what it found to be the “most suitable statute or other rule of timeliness”, the rule established by Section 9613 of CERCLA.

Looking to the construction of Section 9613(f), the Third Circuit reasoned that a contribution claim accrues when a litigant formally recognizes its CERCLA liability. In applying that reasoning to the case at hand, the Third Circuit held that Cranbury Brick’s claim accrued in 2006, when it executed an amendment to the 2005 Consent Order to join it. By executing the amendment to the 2005 Consent Order, Cranbury Brick recognized its potential liability, settled it, and acknowledged its “right to seek contribution” from other polluters, including the United States Government, pursuant to Section 9613(f)(3)(B). Because Cranbury Brick waited nine years to commence its action for contribution from other potentially responsible parties, including the government, its claim was barred by the applicable statute of limitations. Accordingly, the Third Circuit’s recent decision fills one of the few gaps in CERCLA.