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Commonwealth v. Lockheed Martin Corporation

United States District Court, M.D. Pennsylvania

January 30, 2015

COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF ENVIRONMENTAL PROTECTION, Plaintiff and Counterclaim Defendant,
v.
LOCKHEED MARTIN CORPORATION, Defendant and Counterclaim Plaintiff and Third-Party Plaintiff
v.
THE UNITED STATES OF AMERICA, Judge Sylvia H. Rambo Third-Party Defendant.

MEMORANDUM

SYLVIA H. RAMBO, District Judge.

In this action for "equitable contribution" for unreimbursed remediation expenditures incurred by Plaintiff related to the cleanup of a hazardous substance at the Quehanna Wild Area Nuclear Site, Third-Party Defendant has moved for summary judgment on the grounds that a settlement agreement between itself and Plaintiff affords it protection from contribution claims brought by Third-Party Plaintiff pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act. The principal issue raised in the instant motion is whether a settlement agreement between the plaintiff-state and a potentially responsible third-party defendant that was neither judicially approved nor subject to administrative review operates to bar the original potentially responsible defendant's Section 113(f)(1) contribution claim. For the following reasons, the court holds that such an agreement does not conclusively afford the third-party defendant protection from any claim for contribution under Section 113(f)(1) when the proper response costs allocation method remains to be determined and will, therefore, deny the instant motion for summary judgment.

I. Background

The background surrounding the Quehanna Wild Area Nuclear Site, including the ownership and the use of radioactive material at the Site, was extensively recited by this court upon resolution of Lockheed Martin Corporation's motion to dismiss, see Pennsylvania v. Lockheed Martin Corp., 684 F.Supp.2d 564 (M.D. Pa. 2010), and by the Third Circuit Court of Appeals, see 681 F.3d 503 (3d Cir. 2012). Thus, for the purposes of resolving the instant motion, the court believes that the following factual recitation is sufficient to place the matter into context.

a. Facts

This action arises out of response costs incurred by the Pennsylvania Department of Environmental Protection ("PADEP") in its cleanup of Strontium-90 ("Sr-90"), a radioactive isotope and hazardous nuclear byproduct material, from the Quehanna Wild Area Nuclear Site in the Quehanna Wild Area of the Moshannon State Forest in Clearfield County, Pennsylvania ("Site"). The predecessor of Defendant Lockheed Martin Corporation ("LMC"), Martin-Marietta Corporation, was the last known user of Sr-90 at the Site.

The Site was constructed in 1957 by the Commonwealth of Pennsylvania ("Commonwealth") for the purpose of creating a research facility. From 1962 through 1967, the Site was leased by Martin-Marietta Corporation from the Pennsylvania State University, to conduct work at the Site involving Sr-90 for the United States Atomic Energy Commission ("AEC"), the predecessor agency to the Nuclear Regulatory Commission ("NRC").[1] (Doc. 98, p. 3 of 13.) Sr-90 was present at the Site when Pennsylvania State University obtained a byproduct materials license for Sr-90 after LMC ceased operations at the Site in 1967. (Doc. 98, ¶¶ 4, 5.)

In the 1990s, the NRC ordered the Commonwealth, PADEP, and the Pennsylvania Department of Conservation and Natural Resources to decommission the facility. This process required removal of any residual Sr-90 as well as demolition of the facilities and monitoring and sampling. As a result, PADEP and, by extension, the Commonwealth have incurred more than $35 million in out-of-pocket expenditures.[2]

PADEP initiated the underlying action against LMC to recover costs incurred in its remediation efforts pursuant to Section 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended 42 U.S.C. §§ 9601-9675 ("CERCLA"), as well as by certain state environmental statutes. LMC filed both a counterclaim, alleging that PADEP is liable under CERCLA as a past owner and operator of the Quehanna Facility, [3] and a third-party complaint against, inter alia, the United States, alleging that LMC is entitled to contribution from the United States pursuant to Section 113(f)(1) in the event LMC is held liable to PADEP under Section 107(a).[4] ( See Doc. 32.)

Sometime between 2000 and 2003, the United States and PADEP commenced negotiations for the purposes of addressing the United States's liability for response costs at the Site. As a result of those negotiations, the United States and the Commonwealth entered into an Interim Agreement in 2003 (Doc. 98-1) and a Final Agreement in 2004 (Doc. 98-2). In the Interim Agreement, the United States, without admitting liability, agreed to pay to the Commonwealth $7 million for the purposes of reimbursing the Commonwealth for carrying out response actions at the Site. (Doc. 98-1, ¶ 2.1.) In the Final Agreement, the United States agreed to pay the Commonwealth an additional $3 million in return for a release and covenant not to sue, which provided as follows:

The Commonwealth hereby forever releases, discharges, and covenants and agrees not to assert (by way of the commencement of an action, the joinder of the United States in an existing action or in any other fashion) any and all claims, causes of action, suits or dem ands of any kind whatsoever in law or in equ ity which it may have had, or hereafter have, including, but not limited to, claims under CERCLA Sections 107 and 113, against the United States, for Covered Matters.

(Doc. 98-2, Final Agreement, ¶ 14.) The Commonwealth and the United States also agreed that the payment operated to provide the United States with contribution protection by including the following language:

The parties acknowledge and agree that the paym ent to be made by the United States pursuant to this Agreem ent, and which the Commonwealth has agreed to accept, discharges the United States from any andall Covered Matters addressed in the Agreement. With reg ard to any claims for costs, damages or other claims against the United States for Covered Matters under or addressed in this Agreement, the Parties agree that the United States is entitled to, as of the Effective Date of this Agr eement, contribution protection pursuant to CERCLA Section113(f), 42 U.S.C. § 9613(f), the Uniform Comparative Fault Act, and any other applicable provision of federal or state law, whether by statute or common law, extinguishing the United States' liability under CERCLA to persons not party to this Agreement. Any rights the United States or the Commonwealth may have to obtain contribution or otherwise recover costs or dam ages from persons not party to this Agreement are preserved.

( Id. at ¶ 15.) Significantly, the agreement was not filed as a proposed consent decree and public ...


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