In another post-Aviall ruling, the U.S. District Court for the Northern District of Indiana barred the City of Gary, Indiana from bringing a contribution claim under section 113 of CERCLA before completely settling its liability with the government. (City of Gary v. Shafer, N.D. Ind., No. 07-56, 10/04/07). The City of Gary sought contribution from a former operator of an automotive salvage business that supposedly contaminated property with heavy metals. The suit was dismissed by the district court because the voluntary remediation agreement entered into by the State of Indiana and the City of Gary allowed for potential future claims to be filed by the EPA. The City of Gary asserted that it had settled its liability with the State of Indiana. The Court, however, concluded that the City of Gary had not settled its liability because the Voluntary Agreement Plan it entered into with the state left open the possibility of suit by the EPA.
Before a section 113 claim can be brought under CERCLA, one of two prerequisites must be met. The party bringing the claim must have either (1) completely settled its liability with a government entity or (2) been sued either for costs under section 107(a) or compliance under section 106. In this case, the EPA had agreed with the State of Indiana that it would not bring any action against a party that had completed a voluntary remediation plan and received a certificate of completion;, however, this agreement left open the potential for suit under “exceptional circumstances.” As the court noted, section 113 of CERCLA is concerned with potential CERCLA liability, and any possibility of CERCLA liability must be resolved prior to seeking contribution under this section.