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The cleanup costs a defense contractor sought to collect against the US Government were not precluded because of previous litigation, according to the Ninth Circuit.
The costs under CERCLA were, according to the federal court, separate from the damages that had previously been collected in another suit which was brought by a downstream water agency. As a result, the costs were not subject to preclusion.
Footing the Bill?
Plaintiff Whittaker was a defense contractor responsible for testing and manufacturing munitions at a government facility in Santa Clarita, California. The site had previously been owned and occupied by the explosives manufacturer Bermite Powder Company. BPC had been operating the site for the greater part of the latter half of the twentieth century. When Whittaker took over testing, about 90 percent of the munitions and manufacturing testing was done under contracts with the US Government.
In 2000, Castiac Lake Water Agency sued Whittaker for costs associated with cleanup of their water contaminated by chemicals under the federal law CERCLA. Whittaker's insurers and Castiac settled for the costs to clean up the water and purchase replacement water. Under the settlement, Whittaker was found liable for specific damages, but was not ordered to clean up the site. Then Whittaker brought its own suit against the government for contribution.
At the district level, the court found that Whittaker had no right to seek contribution (offset amounts), but could only seek reimbursement for amounts greater than it should have paid in the first place. Whittaker appealed.
The Ninth's reversal highlighted the procedure down at the district level. At that proceeding, Whittaker could but did not seek contribution for costs of cleanup. Under traditional preclusion doctrine, the right to plead but the failure to do so amounts to a waiver of rights as to that issue. The Ninth found that Congress did not intend CERCLA to require plaintiffs to bring all of their claims in an accelerated contribution format.
"If the right to contribution were so broad, there would be no reason for courts to evaluate different sets of expenses separately in deciding whether a party has a contribution claim, yet evaluating expenses separately is precisely what courts have done," the court said.