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CITIZEN SUIT WATCH: Ninth Circuit Rejects CERCLA Citizen Suit Jurisdiction Over Pursuit of UAO Penalties

June 24, 2011

On June 1, 2011, the U.S. Court of Appeals for the Ninth Circuit upheld the dismissal of a citizen suit against a Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) responsible party seeking civil penalties for that responsible party's failure to comply with a unilateral administrative order.  The decision, Pakootas v. Teck Cominco Metals, Ltd., is the latest iteration of the notable dispute regarding the contamination of the Upper Columbia River in Washington from an industrial facility in Canada.  In upholding the lower court's dismissal, the Ninth Circuit delivered the first federal appellate ruling on whether CERCLA Section 113(h) bars citizen suits seeking penalties for failing to comply with a CERCLA Section 106 unilateral administrative order.  Upholding the logic of the CERCLA enforcement litigation scheme, the court held that such suits are barred.

Case Background

The defendant in this case, Teck Cominco Metals, Ltd. ("Teck Cominco"), owns a smelter in Trail, British Columbia.  Historically, slag from the smelter was disposed of in the Columbia River at a site ten miles north of the international border with Washington.  Due to the downstream migration of pollution into Washington, EPA designated the Upper Columbia River eligible for inclusion on the National Priorities List in 2003.  When attempts to reach a voluntary cleanup agreement between EPA and Teck Cominco failed, EPA issued a unilateral administrative order requiring Teck Cominco to conduct a remedial investigation and feasibility study, and subsequently remediate the site.  However, Teck Cominco did not comply with the order, and EPA did not attempt to enforce it. 

Two citizen plaintiffs sued Teck Cominco under CERCLA's citizen suit provision, 42 U.S.C. § 9659, to enforce the EPA order.  The citizen plaintiffs sought the following relief: 1) a declaration that Teck Cominco was in violation of EPA's order; 2) an injunction compelling compliance with the order; 3) penalties for failure to comply with the order; and 4) attorneys' fees and costs.1  Teck Cominco moved to dismiss for lack of subject matter and personal jurisdiction and for failure to state a claim upon which relief could be granted.  One of Teck Cominco's notable arguments was that the citizen suit was an extraterritorial application of CERCLA.  The district court denied the motion to dismiss, but certified its order to the Ninth Circuit for interlocutory appeal.  On appeal (Pakootas I),2 the Ninth Circuit determined that the citizen suit was not an extraterritorial application of CERCLA, and upheld the district court's denial of the motion to dismiss.

While the appeal in Pakootas I was pending, EPA and Teck Cominco entered into a settlement agreement that the two parties termed a "contractual agreement," which obligated the company to perform the remediation at the Upper Columbia River site.  EPA agreed not to sue the company for non-compliance with the unilateral administrative order if Teck Cominco fulfilled its obligations under the agreement.  In return, Teck Cominco consented to jurisdiction in federal district court in the event EPA brought a suit to enforce the contractual agreement and seek penalties for noncompliance with the unilateral administrative order.  Upon execution of the agreement, EPA withdrew the unilateral administrative order, declining to collect penalties for the 892 days that Teck Cominco failed to comply with the order.

Meanwhile, Teck Cominco unsuccessfully petitioned the Supreme Court for certiorari from the Ninth Circuit's decision in Pakootas I that the lawsuit was not an extraterritorial application of CERCLA.  Following the denial of certiorari, the citizen plaintiffs amended their complaint to seek only civil penalties for noncompliance with the unilateral administrative order and for attorneys' fees and costs.  Teck Cominco moved to dismiss the amended complaint.  The district court granted the motion and dismissed the citizen plaintiffs' claims for lack of subject matter jurisdiction because the lawsuit was barred by CERCLA's pre-enforcement review provision, Section 113(h).3  The citizen plaintiffs appealed, and the case again went up to the Ninth Circuit.

Pakootas II

In a two part holding, the Ninth Circuit determined that a citizen suit seeking penalties for noncompliance with a unilateral administrative order was barred by CERCLA's pre-enforcement review provision, Section 113(h).4  The court first determined that Section 113(h) is a limitation on jurisdiction and not solely a limitation on the timing of judicial review.  Next, the court determined that the plaintiffs' action for penalties was barred by Section 113(h) because (1) the lawsuit qualified as a "challenge" under Section 113(h), and (2) a citizen suit did not qualify for the penalty exception to Section 113(h).5 

CERCLA Section 113(h) is Jurisdictional

Plaintiff Pakootas argued that CERCLA Section 113(h) only governs the timing of when an action challenging removal or remedial actions or cleanup orders can be brought, and that it is not a limitation on jurisdiction.  The Ninth Circuit relied on a 2006 Supreme Court opinion, Arbaugh v. Y & H Corp.,6 and its progeny to dispose of this argument.  Arbaugh established a common-sense, bright-line test for determining whether a statutory provision should be considered jurisdictional: if the statute clearly states that a threshold limitation is jurisdictional, it should be considered a jurisdictional limitation; if not, it should be considered a non-jurisdictional limitation.  As Section 113(h) plainly states at the outset that "[n]o Federal court shall have jurisdiction. . .", the Ninth Circuit concluded that under Arbaugh's bright-line test, Section 113(h) clearly qualified as a jurisdictional limitation.

CERCLA Section 113(h) Barred the Citizen Suit

After determining that CERCLA Section 113(h) qualified as a jurisdictional bar, the court considered whether Pakootas' citizen suit claim for penalties was precluded by Section 113(h).  The first part of this determination involved deciding whether the plaintiff's case qualified as a "challenge" to a removal or remedial action or order, as that is the class of lawsuits that Section 113(h) precludes.  Pakootas took the position that the claims did not challenge any aspects of the remedial action being carried out under the contractual agreement, but rather that they only sought to recover penalties for previous failure to comply with the unilateral administrative order.

Plaintiffs' Suit Was a "Challenge" Under CERCLA Section 113(h)

The court noted that Congress's purpose in creating the Section 113(h) prohibition on pre-enforcement review was to prevent lawsuits that would interfere with the expeditious cleanup of contaminated sites.  The Court acknowledged that the plaintiffs did not seek to modify any of the requirements of the cleanup, but still determined that the lawsuit was a challenge under Section 113(h).  First, the court pointed out that the lawsuit was a challenge because it interfered with the contractual agreement to perform the cleanup that EPA and Teck Cominco entered into.  The court reasoned that one of the bargaining chips in the contractual agreement was the fact the EPA waived the 892 days of penalties under the unilateral administrative order on the condition that Teck Cominco satisfactorily conduct that remediation.  Thus, if Teck Cominco does not perform its obligations under the contractual agreement, EPA's leverage to force Teck Cominco to take action is the threat of bringing an action to recover the 892 days of penalties.  EPA would be deprived of this "hammer" – as the court termed the threat of penalty recovery – if citizen plaintiffs were allowed to bring an action to recover the penalties. 

Additionally, the court highlighted the risk of Teck Cominco deciding to undertake an "efficient breach" of the contractual agreement if they paid the penalties owed to the citizen plaintiffs and subsequently decided it was in their best economic interests to shirk their cleanup obligations.  In sum, the citizen lawsuit disturbed EPA's ability to enforce the contractual agreement.

Further, if Teck Cominco were forced to pay a large penalty for its past noncompliance, the company's ability to fund the remainder of the cleanup effort could be in jeopardy.  The court reasoned that Teck Cominco faced up to $24 million in penalties plus attorneys' fees if Pakootas prevailed in the case.  Although the court did not consider Teck Cominco's ability to pay in the event it lost the lawsuit for penalties, the court reasoned that it was certainly possible that a judgment of that magnitude could interfere with a performing party's ability to pay for a cleanup.  Thus, a suit of this nature conflicts with Congress's rationale behind the pre-enforcement review prohibition: ensuring the expeditious cleanup of contaminated sites.

Lastly, the court distinguished a prior Ninth Circuit CERCLA case7 that held that a lawsuit seeking access to cleanup-related documents was not a "challenge" under Section 113(h).  The Ninth Circuit held that the ARCO court only held that a request for documents was not a challenge – it did not by inference stand for the proposition that only a lawsuit that sought to impose specific conditions for a cleanup qualified as a challenge under Section 113(h). 

Plaintiffs' Suit Did Not Qualify for the Exceptions to CERCLA Section 113(h)

The citizen plaintiffs' second argument that the pre-enforcement bar did not apply was that their suit qualified for one of the enumerated exceptions to Section 113(h).  Specifically, the citizen plaintiffs invoked Section 113(h)(2), which exempts actions "to enforce an order issued under section 9606 (a) of this title or to recover a penalty for violation of such order8" from the pre-enforcement bar.  The citizen plaintiffs argued that they were seeking to recover penalties for violations of the withdrawn administrative order, and based on the plain language of the exception, the pre-enforcement bar did not apply to their action. 

The court conducted a plain-language analysis of Section 113(h)(2) and concluded that although the plaintiffs were indeed seeking penalties in their suit, they were not seeking to recover penalties.  The court reasoned that the penalties available under Section 106(a) are payable to EPA and the Superfund, not to citizen plaintiffs.  Therefore, citizen plaintiffs cannot recover money that the statute does not entitle them to.  The court squared this conclusion with the purpose of the pre-enforcement bar, which is to prevent interference with ongoing cleanups.  The court reasoned that it was only logical for EPA to have this compliance-enforcing capability that can be wielded while a cleanup is still underway. 

Lastly, the court applied the statutory construction rule of expressio unius (to include one thing implies the exclusion of the other) to bolster its conclusion that a citizen suit does not qualify for the Section 113(h)(2) exemption.  The court pointed out that Section 113(h) already contains a citizen suit exception (at (h)(4)) that allows that citizens to bring suit alleging that a removal or remediation is in violation of any requirement of CERCLA.9  The court made the inference that since one of the five exemptions in Section 113(h) expressly calls for citizen suits, that impliedly the Section 113(h)(2) exemption does not apply to citizen suits.


Considering the volume of CERCLA litigation in the last thirty years, it is somewhat surprising that this issue has not already been decided by a court.  That said, the affirmance of the CERCLA litigation scheme, which seeks to preserve EPA's ability to ensure and enforce prompt cleanups, helps bring further certainty to CERCLA responsible parties that deals struck with EPA are not easily disturbed by third party citizen plaintiffs.  Further, the "contractual agreement" struck between Teck Cominco and EPA presents an interesting model for negotiations with EPA in the face of a Section 106 unilateral administrative order, in that it lifted the burdens of a Section 106 order while also preserving a "hammer" for EPA to ensure compliance with the subsequent remedial action agreement. 


1 Both the Colville Reservation and the State of Washington intervened in the litigation seeking the same relief as the citizen plaintiffs as well as the anticipated costs of the CERCLA recovery and assessment and declaratory relief relating to the costs of natural resource damages assessment.  The Reservation and the State's additional claims are still pending in the U.S. District Court for the Eastern District of Washington.  

2 Pakootas v. Teck Cominco, 452 F.3d 1066 (9th Cir. 2006). 

3 "No Federal court shall have jurisdiction under Federal law other than under section 1332 of title 28 (relating to diversity of citizenship jurisdiction) or under State law which is applicable or relevant and appropriate under section 9621 of this title (relating to cleanup standards) to review any challenges to removal or remedial action selected under section 9604 of this title, or to review any order issued under section 9606 (a) of this title[.]"  42 U.S.C. §  9613(h).

4 42 U.S.C. § 9613(h).

5 "No Federal court shall have jurisdiction under Federal law. . . in any action except one of the following . . . (2) An action to enforce an order issued under section 9606 (a) of this title or to recover a penalty for violation of such order[.]"  42 U.S.C. § 9613(h)(2). 

6 546 U.S. 500 (2006).

7 ARCO Environmental Remediation, LLC v. Montana Dept. of Health and Envt'l Quality, 213 F.3d 1108 (9th Cir. 2000).

8 42 U.S.C. § 9613(h)(2). 

9 42 U.S.C. § 9613(h)(4). 

For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

Kirsten L. Nathanson
Partner – Washington, D.C.
Phone: +1.202.624.2887
David Chung
Partner – Washington, D.C.
Phone: +1.202.624.2587