ELR Citation: ELR 21533
No(s). 97-3829 (7th Cir. Aug 12, 1998)

The court holds that Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) §113 bars the federal and Indiana governments' actions to recover cleanup costs incurred at the Maumee River site in Fort Wayne, Indiana. The governments initially sued the owner and operator of the site. Subsequently, a consent decree was entered into providing for payment of the governments' response costs. In order to recover response costs not covered by the consent decree, the governments later filed suit against third-party defendants to the original suit.

The court first holds that the appropriate limitations period under CERCLA is the six-year period for initial actions. The court agrees with the governments that nothing in CERCLA, its history, or the case law makes the entry of a declaratory judgment a prerequisite for a subsequent action. However, a subsequent action against a party can be brought only after an initial action has been brought against that party. Here, the governments' actions against the third-party defendants were the first claims they brought against these defendants to recover response costs. The court next holds that the governments' actions filed on September 19 and 20, 1996, were filed more than six years after the initiation of physical on-site construction of the remedial action, and, therefore, they are time barred under CERCLA §113(g)(2)(B). The court refuses to adopt a bright-line rule that the initiation of construction can never begin until the U.S. Environmental Protection Agency (EPA) issues final, written approval of the remedial design for the site at issue. If Congress had intended to require EPA to issue its final approval of the remedial design in order for a remedial action to begin within the meaning of CERCLA §113(g)(2)(B)—a contention unsupported by the definition of "remedial action"—Congress surely would have provided a more explicit direction to that effect. In crafting the state of limitations, Congress specifically made the initiation of physical on-site construction of the remedial action the triggering event. Moreover, it cannot be disputed that the placement of a clay cap on September 18, 1990, was a physical action. It is further undisputed that the remedial action for the site called for the construction of a permanent clay cap. Although it is true that the initial clay placed on the site was deemed inadequate to satisfy certain specifications required for the clay cap, the court does not consider that fact relevant because CERCLA does not indicate that the initial construction must be successful.

The court also holds that the six-year statute of limitations under CERCLA applies to Indiana's action under state law for recovery of response costs. The plain language of the Indiana statute indicates that the provisions defining liability under CERCLA provides the basis for the scope of liability under the Indiana cause of action. In addition, the court thinks it likely that CERCLA's statute of limitations would be the one the Indiana Supreme Court would adopt if it was faced with this question. Consequently, the court holds that the state action is time barred as well.

A dissenting judge would hold that the six-year statute-of-limitations period was not triggered until EPA provided written approval of the final design for remedial action.

Counsel for Plaintiffs
David C. Christensen
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendants
Mary R. Alexander
Latham & Watkins
Sears Tower
233 S. Wacker Dr., Ste. 5800, Chicago IL 60606
(312) 876-7672/7700

Before Kanne and Evans, JJ.