A federal judge in California has ruled that CERCLA cost recovery claims involving perchlorate and trichloroethylene contamination of the Rialto-Colton Groundwater Basin are subject to Federal Rule of Civil Procedure 13(a), which “bars a party who failed to assert a compulsory counterclaim in one action from instituting a second action in which that counterclaim is the basis of the complaint. City of Colton v. Am. Promotional Events, Inc., No. 09-1864 (C.D. Cal. 8/10/10). The current lawsuit is a consolidated action that comprises six individual cases.

Litigation over this contamination began in 2004 when the City of Rialto sued the U.S. Department of Defense (DOD) and several other parties over contamination at the former 2,800-acre Rialto Ammunition Storage Point. DOD asserted counterclaims for contribution under CERCLA section 113(f) and declaratory relief for contribution under section 113(g) to the 2004 Rialto lawsuit. In 2005, the City of Colton sued many of the same parties, but not DOD. Like the Rialto litigation, the 2005 Colton lawsuit sought response costs and declaratory relief under CERCLA and injunctive relief under RCRA. DOD was added as a crossdefendant, but it did not counter- or cross-claim.  

The court later issued an order in Colton that deemed all defendants, except cross-defendants, to have asserted cross-claims for section 107(a) response costs, contribution and declaratory relief against each other defendant, including DOD. DOD was deemed to deny those claims and to assert contribution cross-claims against the crossclaimants. In 2006, the court entered summary judgment against the City of Colton because it had incurred no response costs when the suit was filed and dismissed the counterclaims and cross-claims without prejudice.  

In 2006, the City of Colton filed a follow-up lawsuit that was consolidated with the 2004 Rialto case, again seeking response costs. A defendant filed a third-party complaint against the United States for recovery of response costs under sections 107 and 113 of CERCLA. In 2007, another party filed a similar third-party complaint against DOD. The United States did not include in its answers any counterclaims for recovery of response costs. In an order consolidating the cases in 2007, the court deemed that all defendants’ answers, except DOD’s, included cross-claims for section 107(a) recovery of response costs.

After the parties failed to reach a settlement and began filing the more recent individual actions consolidated before the court, the United States filed a complaint seeking to recover response costs under section 107 “for the first time in approximately six years of litigation.” Defendants filed a motion to dismiss under Federal Rule of Civil Procedure 13(a), arguing that the U.S. claim was barred by inaction on the government’s part in the earlier cases. The United States argued that CERCLA provided an exemption from Rule 13(a)’s compulsory counterclaim requirement by giving the United States “significant flexibility in determining when to bring § 107 claims.”  

The court agreed with the defendants, ruling that the government’s section 107 claim was compulsory in the prior actions and that nothing in CERCLA trumps the Federal Rules of Civil Procedure. According to press reports, the government is currently reviewing the decision and weighing its options. See LAW360, August 11, 2010.