Alert

Sixth Circuit Clarifies CERCLA Statute of Limitations

May 22, 2025

On May 12, 2025, the U.S. Court of Appeals for the Sixth Circuit issued a pivotal decision addressing the timing of contribution claims under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as Superfund.

The court held that a declaratory judgment establishing liability for response costs triggers the three-year statute of limitations for contribution actions, even if the judgment does not allocate specific costs among potentially responsible parties (PRPs).

Background

The case centers on the Kalamazoo River Superfund site in Michigan, contaminated with polychlorinated biphenyls (PCBs) from historical paper mill operations. In 2010, a large paper company filed a contribution action against other manufacturers, seeking recovery of over $100 million in past cleanup costs and a declaratory judgment for future costs estimated between $600 million and $850 million.

In 2018, the district court allocated past costs among the parties and issued a declaratory judgment on future liability. However, in 2022, the Sixth Circuit reversed the allocation for two defendants/appellants, ruling that the plaintiff’s claims were time-barred under CERCLA’s three-year statute of limitations for contribution actions. The court emphasized that the limitations period commenced with the 1998 declaratory judgment establishing liability, not with the incurrence of specific costs or the entry of a cost allocation.

Key Findings

• Triggering of statute of limitations: The Sixth Circuit clarified that a declaratory judgment establishing liability for response costs, even without cost allocation, initiates the three-year statute of limitations for contribution claims under CERCLA Section 113(f)(1) .
• Impact on non-party defendants: The order affirmed that argument, specifically citing the appellate court’s 2014 ruling in Hobart Corp. v. Waste Management of Ohio, Inc., a prior court order which found that a party already subject to a judgment for cleanup costs — in this instance the initial judgment under CERCLA section 113 — “cannot proceed with a § 107(a)(4)(B) cost-recovery action.” This means that PRPs must be vigilant in pursuing contribution claims promptly, even against parties not involved in earlier litigation .
• District court’s response: On remand, the district court maintained its prior declaratory judgment holding all four parties liable for future response costs, finding this consistent with the Sixth Circuit’s mandate and a practical approach to avoid re-litigating liability determinations not addressed on appeal.

Implications for PRPs

This decision underscores the importance of PRPs engaging counsel to consider the following courses of action:

• Acting promptly: Initiate contribution actions within three years of any judgment establishing liability for response costs, regardless of cost allocation status.
• Monitoring judgments: Recognize that even “bare bones” declaratory judgments can trigger the statute of limitations.
• Assessing potential liability: Evaluate the potential liability of other parties connected to a CERCLA site early in the process to avoid missing the window for contribution claims.

Conclusion

The Sixth Circuit’s ruling  serves as a critical reminder for PRPs to be proactive in managing their CERCLA liabilities. By clarifying when the statute of limitations begins, the court has set a precedent that emphasizes the need for timely legal action in environmental cleanup cost recovery efforts.

Reprinted with permission from the American Bar Association’s Business Law Today May 2025, Month-In-Brief: Business & Regulated Industries.