South Carolina Department of Health & Environmental Control v. Commerce & Industry Insurance

Filed: July 2, 2004

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 03-1329
(CA-00-1582-2-12)

SOUTH CAROLINA DEPARTMENT OF HEALTH AND
ENVIRONMENTAL CONTROL; AMERISTEEL; ROANOKE
ELECTRIC STEEL CORPORATION; OWENS ELECTRIC
STEEL; NUCOR STEEL; NUCOR YAMATO; THE FEDERAL
METAL COMPANY; I. SCHUMANN & COMPANY; CP
CHEMICALS, INCORPORATED; KERR-MCGEE CHEMICAL
LLC; LUCENT TECHNOLOGIES, INCORPORATED;
MUELLER BRASS COMPANY,

Plaintiffs - Appellants,

and

GASTON COPPER RECYCLING CORPORATION,

Plaintiff,

versus

COMMERCE AND INDUSTRY INSURANCE COMPANY;
UNITED STATES FIRE INSURANCE COMPANY;
JEFFERSON INSURANCE COMPANY; THE SOUTH
CAROLINA PROPERTY AND CASUALTY INSURANCE
GUARANTY ASSOCIATION, a/k/a Mutual Fire
Marine and Inland Insurance Company,

Defendants - Appellees.

-------------------------

COMPLEX INSURANCE CLAIMS LITIGATION ASSOCIATION,

Amicus Supporting Appellees.
 O R D E R

The Court amends its opinion filed June 8, 2004, as follows:

On page 15, first line of text, the word “breath” is

corrected to read “breadth.”

For the Court - By Direction

/s/ Patricia S. Connor
Clerk
 PUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

SOUTH CAROLINA DEPARTMENT OF 
HEALTH AND ENVIRONMENTAL
CONTROL; AMERISTEEL; ROANOKE
ELECTRIC STEEL CORPORATION; OWENS
ELECTRIC STEEL; NUCOR STEEL;
NUCOR YAMATO; THE FEDERAL
METAL COMPANY; I. SCHUMANN &
COMPANY; CP CHEMICALS,
INCORPORATED; KERR-MCGEE
CHEMICAL LLC; LUCENT
TECHNOLOGIES, INCORPORATED;
MUELLER BRASS COMPANY,
Plaintiffs-Appellants,
and
GASTON COPPER RECYCLING
CORPORATION,
Plaintiff,  No. 03-1329

v.
COMMERCE AND INDUSTRY INSURANCE
COMPANY; UNITED STATES FIRE
INSURANCE COMPANY; JEFFERSON
INSURANCE COMPANY; THE SOUTH
CAROLINA PROPERTY AND CASUALTY
INSURANCE GUARANTY ASSOCIATION,
a/k/a Mutual Fire Marine and Inland
Insurance Company,
Defendants-Appellees.

COMPLEX INSURANCE CLAIMS
LITIGATION ASSOCIATION,
Amicus Supporting Appellees.

2 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS.

Appeal from the United States District Court
for the District of South Carolina, at Charleston.
C. Weston Houck, District Judge.
(CA-00-1582-2-12)

Argued: December 3, 2003

Decided: June 8, 2004

Before WIDENER and KING, Circuit Judges, and
Richard D. BENNETT, United States District Judge
for the District of Maryland, sitting by designation.

Affirmed by published opinion. Judge King wrote the opinion, in
which Judge Widener and Judge Bennett joined.

COUNSEL

ARGUED: David Oscar Ledbetter, HUNTON & WILLIAMS, Rich-
mond, Virginia, for Appellants. Brian Christopher Coffey, COHN &
BAUGHMAN, Chicago, Illinois, for Appellees. ON BRIEF: Andrea
W. Wortzel, HUNTON & WILLIAMS, Richmond, Virginia; Law-
rence J. Bracken, II, HUNTON & WILLIAMS, Atlanta, Georgia;
James L. Werner, ELLZEY & BROOKS, L.L.C., Columbia, South
Carolina; Claron A. Robertson, III, ROBERTSON & HOLLINGS-
WORTH, Charleston, South Carolina; Jacquelyn S. Dickman, Office
of General Counsel, DEPARTMENT OF HEALTH & ENVIRON-
MENTAL CONTROL, Columbia, South Carolina, for Appellants.
Michael J. Baughman, COHN & BAUGHMAN, Chicago, Illinois; R.
David Howser, Andrew E. Haselden, HOWSER, NEWMAN & BES-
LEY, L.L.C., Columbia, South Carolina; Timothy A. Domin, CLAW-
SON & STAUBES, L.L.C., Charleston, South Carolina; Richard S.
Kuhl, Ngoc H. Lam, JACKSON & CAMPBELL, P.C., Washington,
D.C.; Charles J. Baker, Davis S. Yandle, BUIST, MOORE, SMYTHE
& MCGEE, Charleston, South Carolina, for Appellees. Laura A. Fog-
gan, Gary P. Seligman, WILEY, REIN & FIELDING, L.L.P., Wash-
ington, D.C., for Amicus Curiae.
 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS. 3
OPINION

KING, Circuit Judge:

The appellants, consisting of South Carolina’s Department of
Health and Environmental Control, Kerr-McGee Chemical LLC, and
certain businesses involved in the manufacture and transportation of
fertilizer production materials, seek reinstatement of their civil action
against four liability insurers for cost recovery, contribution, restitu-
tion, and declaratory relief. By its Judgment Order of February 14,
2003, the district court for South Carolina dismissed the lawsuit’s two
direct action claims against the insurers, one seeking cost recovery
and one seeking contribution, for failure to state claims upon which
relief can be granted. See Fed. R. Civ. P. 12(b)(6). The court also dis-
missed the appellants’ common law claim for restitution, and it
declined to exercise jurisdiction over two declaratory judgment
claims. S.C. Dep’t of Health & Envtl. Control v. Commerce & Indus.
Ins. Co., No. 2:00-1582-12 (D.S.C. Feb. 14, 2003).

This appeal concerns the application and interplay of two major
federal environmental protection statutes. The first is the Resource
Conservation and Recovery Act ("RCRA"), which authorizes the pur-
suit of civil actions directly against insurers1 who have provided
RCRA-mandated evidence of financial responsibility to owners and
operators of RCRA-regulated hazardous waste facilities. 42 U.S.C.
§ 6901 et seq. The second is the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA," commonly
known as "Superfund"), which in proper circumstances authorizes the
pursuit of claims for cost recovery and contribution against parties
potentially responsible for contaminating CERCLA-regulated facili-
ties. 42 U.S.C. § 9601 et seq. In their complaint, the appellants rely
on the direct action provision of RCRA (42 U.S.C. § 6924(t)(2)) to
seek cost recovery and contribution under CERCLA. The primary
issue in this appeal is whether RCRA’s direct action provision may
1
A direct action is simply a lawsuit directly against an insurer rather
than indirectly through an insured tortfeasor. Black’s Law Dictionary 371
(abridged 7th ed. 2000); see also Searles v. Cincinnati Ins. Co., 998 F.2d
728, 730 (9th Cir. 1993) (observing that, in direct action, plaintiff is enti-
tled to bring suit directly against tortfeasor’s liability insurer).
4 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS.

be utilized to pursue these CERCLA claims. The appellants contend
that it can be so utilized and that the district court, in dismissing their
complaint, misconstrued the RCRA direct action provision. As
explained below, we affirm.

I.

A. The Resource Conservation and Recovery Act

RCRA was enacted in October 1976, and it is codified as Chapter
82 (entitled "Solid Waste Disposal") of Title 42 of the United States
Code. RCRA mandates the Environmental Protection Agency (the
"EPA") to develop permitting requirements for hazardous waste facili-
ties.2 RCRA § 3004(a)(6); 42 U.S.C. § 6924(a)(6). One of those
requirements is that, in seeking a permit, an owner or operator of such
a hazardous waste facility must provide financial assurance to the
EPA for liability relating to closure, postclosure, or corrective activi-
ties at the facility.3 40 C.F.R. § 264.140 et seq. (establishing standards
regarding applicability of financial requirements for owners and oper-
ators of hazardous waste facilities); 40 C.F.R. § 265.140 et seq.
(establishing interim status standards regarding applicability of finan-
cial requirements for owners and operators of hazardous waste facili-
ties). In demonstrating to the EPA that they possess RCRA-mandated
2
RCRA requires that a permit be obtained for the treatment, storage,
or disposal of any "hazardous waste" identified or listed in 40 C.F.R. Part
261. 40 C.F.R. § 270.1(c). A hazardous waste facility consists of "all
contiguous land, and structures, other appurtenances, and improvements
on the land, used for treating, storing, or disposing of hazardous waste."
40 C.F.R. § 260.10.
3
"Closure" is "[t]he procedure that a solid or hazardous waste manage-
ment facility undergoes to cease operations and ensure protection of
human health and the environment in the future." EPA, RCRA Orienta-
tion Manual 137 (Jan. 2003), available at http://www.epa.gov/epaoswer/
general/orientat (the "Orientation Manual"). "Postclosure" is the period
after closure "during which owners and operators of solid or hazardous
waste disposal units conduct monitoring and maintenance activities in
order to preserve the integrity of the disposal system." Id. Finally, a "cor-
rective action" is a "program to address the investigation and cleanup of
contamination from solid waste facilities, hazardous waste facilities, and
[underground storage tanks]." Id.
 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS. 5
financial responsibility for the closure and postclosure care of such
facilities (40 C.F.R. §§ 264.143, 264.144), such owners and operators
are obliged to provide for the compensation of third parties for certain
injuries or damages resulting from spills and accidental occurrences.
Id. § 264.147. The financial responsibility mandate is designated in
the regulations as "financial assurance," id. §§ 264.143, 264.145,
264.147, and, according to RCRA, it may be established "by any one,
or any combination, of the following: insurance, guarantee, surety
bond, letter of credit, or qualification as a self-insurer." 42 U.S.C.
§ 6924(t)(1).

In November 1984, the scope and requirements of RCRA (Chapter
82 of Title 42) were amended by the Hazardous and Solid Waste
Amendments, and a right of direct action was included in RCRA. See
42 U.S.C. §§ 6991-6991i. Pursuant to RCRA’s direct action provision
(the "RCRA Provision"):

In any case where the owner or operator is in bankruptcy
. . . , any claim arising from conduct for which evidence of
financial responsibility must be provided under [42 U.S.C.
§ 6924 (RCRA’s financial responsibility provision)] may be
asserted directly against the guarantor providing such evi-
dence of financial responsibility.

RCRA § 3004(t)(2); 42 U.S.C. § 6924(t)(2).4

B. The Comprehensive Environmental Response,
Compensation, and Liability Act

CERCLA was enacted in December 1980, and it is codified as
Chapter 103 (entitled "Comprehensive Environmental Response,
Compensation, and Liability") of Title 42. 42 U.S.C. § 9601 et seq.
CERCLA was a congressional response to public concern over the
4
Under RCRA, a "guarantor" is "any person, other than the owner or
operator, who provides evidence of financial responsibility for an owner
or operator [of a hazardous waste facility] under [42 U.S.C. § 6924]." Id.
§ 6924(t)(4). And evidence of financial responsibility, as required under
42 U.S.C. § 6924, may be established by insurance coverage. Id.
§ 6924(t)(1).
6 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS.

improper disposal of hazardous waste, and its two primary goals have
been recognized as (1) the promotion of prompt and effective cleanup
of hazardous waste sites, and (2) the sharing of financial responsibil-
ity among those "parties who created the hazards." Aviall Servs., Inc.
v. Cooper Indus., Inc., 312 F.3d 677, 681 (5th Cir. 2002). In order to
attain these goals, CERCLA "generally imposes strict liability on
owners and operators of facilities" from which hazardous substances
were released, and it authorizes civil actions against certain
statutorily-defined "responsible parties" to recover the costs incurred
in cleaning up hazardous waste disposal sites. 3550 Stevens Creek
Assocs. v. Barclays Bank, 915 F.2d 1355, 1357 (9th Cir. 1990). Sig-
nificantly, any party incurring response costs consistent with the
statutorily-mandated and EPA-created National Contingency Plan
("NCP")5 is authorized to seek recovery of those costs from other
potentially responsible parties by way of a CERCLA cost-recovery
claim. 42 U.S.C. § 9607(a).

A cost-recovery claim may be asserted under section 107 of CER-
CLA by a government or private entity seeking to recover from a
responsible party any response costs incurred in remediating a hazard-
ous waste facility. R.M. Hall, Jr., et al., Superfund Manual: Legal and
Management Strategies 4-13 (3d ed., Gov’t Insts., Inc., 1988). Under
CERCLA, the term "potentially responsible party" ("PRP") is deemed
by the EPA to be "[t]he person or persons who may be held liable for
hazardous substance contamination under CERCLA. PRPs may
include the owners and operators, generators, transporters, and dis-
posers of the hazardous substances." Orientation Manual, app. D. In
October 1986, CERCLA was amended by the Superfund Amend-
ments and Reauthorization Act, which was also codified in Chapter
103 of Title 42. As a result, Chapter 103 now expressly authorizes a
CERCLA cause of action for contribution. 42 U.S.C. § 9613(f). Pur-
suant thereto, any party incurring response costs consistent with the
NCP may seek its cleanup costs from other PRPs by way of a CER-
CLA contribution claim. Id.
5
The NCP, codified at 40 C.F.R. Part 300, constitutes the EPA’s
implementation of the CERCLA response process and provides informa-
tion about the roles and responsibilities of the EPA, the various states,
and private parties regarding the release of hazardous substances and the
remediation of areas impacted by such a release.
 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS. 7
Furthermore, CERCLA (Chapter 103 of Title 42), like RCRA
(Chapter 82 of Title 42), contains a direct action provision. The CER-
CLA direct action provision authorizes a party to assert any claim
authorized by § 9607 or § 9611 "directly against any guarantor pro-
viding evidence of financial responsibility" under CERCLA.6 42
U.S.C. § 9608(c)(2). Although the EPA has promulgated regulations
giving effect to the RCRA Provision by establishing financial respon-
sibility requirements thereunder, see 40 C.F.R. § 264.140 et seq.
(establishing RCRA’s financial responsibility requirements), no
financial responsibility regulations have been promulgated by the
EPA to implement the CERCLA direct action provision with respect
to "onshore" CERCLA facilities (such as the facility at issue here).
CERCLA required the promulgation of regulations establishing mini-
mum levels of financial responsibility for the operation of hazardous
waste facilities under CERCLA. 42 U.S.C. § 9608(b)(1). Although
the executive was mandated to promulgate those regulations "not ear-
lier than five years after December 11, 1980," id., no such regulations
have been promulgated.

C. Factual Background

From 1978 to 1992, Stoller Chemical Company operated a fertil-
izer manufacturing facility (the "Facility") in Jericho, South Carolina.
Pursuant to RCRA subsection 3006(b), the EPA may authorize a state
to administer and enforce its own hazardous waste program, so long
as the state program is equivalent to and consistent with the EPA’s
6
Pursuant to CERCLA’s direct action provision:
In the case of a release or threatened release from a facility, any
claim authorized by section 9607 or 9611 of this title may be
asserted directly against any guarantor providing evidence of
financial responsibility under subsection (b) of this section, if the
person liable under section 9607 of this title is in bankruptcy
....
42 U.S.C. § 9608(c)(2). Under CERCLA, a "guarantor" is "any person,
other than the owner or operator, who provides evidence of financial
responsibility for an owner or operator under this chapter." Id.
§ 9601(13) (emphasis added). Thus, CERCLA’s direct action provision
can only be used if financial responsibility was required and provided
under Chapter 103 of Title 42.
8 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS.

program. 42 U.S.C. § 6926(b). In November 1985, South Carolina
became an EPA-authorized state and assumed primary responsibility,
i.e., "primacy," for implementing its hazardous waste program.
Although the state’s hazardous waste regulations applied to the Facil-
ity, the EPA retained its full enforcement authority under RCRA in
South Carolina. See Fla. Power & Light Co. v. EPA, 145 F.3d 1414,
1416-17 (D.C. Cir. 1998) (discussing cooperative federalism and state
authorization under RCRA). Both the EPA and the Department of
Health and Environmental Control ("DHEC") classified the Facility,
pursuant to RCRA and the South Carolina Hazardous Waste Manage-
ment Act, as a hazardous waste treatment, storage, and disposal facil-
ity. Because of this classification, the Facility’s operations were
regulated under both federal and state law.

In the early 1980s, Stoller was granted several operating permits by
DHEC under which it was authorized to operate the Facility as a
RCRA-regulated hazardous waste facility. In order to secure these
permits, Stoller provided to DHEC the RCRA-mandated financial
assurance that it could protect third parties from damages or injuries
caused by operation of the Facility. 42 U.S.C. § 6924(t)(2); S.C. Code
§ 44-56-60(c). In their amended complaint (the "Complaint"),7 the
appellants allege, inter alia, that the defendant insurers (the "Insur-
ers") had filed RCRA-mandated Certificates of Liability Insurance
with DHEC, certifying that they provided insurance coverage to Stol-
ler satisfying RCRA’s financial assurance requirements.8 Complaint
¶¶ 48-58. The Complaint also alleges that the policies cover the costs
incurred by DHEC and the other appellants, as "required by Federal
and South Carolina law," Complaint ¶ 12; that the claims arise from
7
The appellants’ initial complaint was filed on April 4, 2000. Their
amended complaint was filed on December 23, 2002, and constitutes the
operative complaint for purposes of this appeal. S.C. Dep’t of Health &
Envtl. Control v. Commerce & Indus. Ins. Co., No. 2:00-1582-18, ¶¶ 48-
58 (D.S.C. Dec. 23, 2002).
8
The four Insurers are: Commerce and Industry Insurance Company,
United States Fire Insurance Company, Jefferson Insurance Company,
and the South Carolina Property and Casualty Insurance Guaranty Asso-
ciation (the fiduciary for Planet Insurance Company, a division of Reli-
ance Insurance Company, which entered into liquidation in October
2001).
 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS. 9
conduct for which RCRA-mandated insurance was obtained from the
Insurers, Complaint ¶ 21; and that the policies satisfy the applicable
South Carolina law and regulations, "which implement[ ] the require-
ments of RCRA and its regulations." Complaint ¶ 48. Additionally,
the appellants admit that the Insurers did not provide insurance cover-
age to Stoller pursuant to CERCLA’s financial assurance require-
ments. See Appellants’ Reply Br. at 11 (acknowledging CERCLA’s
financial assurance provision not applicable to Facility).

In March 1992, Stoller ceased operations at the Facility and filed
for Chapter 7 bankruptcy protection in Texas. Shortly thereafter, the
EPA investigated the Facility and determined that its real property
was contaminated. Because Stoller had filed for bankruptcy and was
insolvent, the EPA and DHEC initiated CERCLA enforcement pro-
ceedings in the District of South Carolina against Kerr-McGee, which
owned the Facility from 1962 to 1978, and against certain of the
appellants who had been involved in the manufacture and transporta-
tion of fertilizer production materials used at the Facility (the "Corpo-
rate Claimants").9 In those CERCLA enforcement proceedings, the
EPA and DHEC sought remediation — that is, the environmental
cleanup — of the Facility.10 Complaint ¶ 6.

In 1994, as a result of these enforcement proceedings, the Corpo-
rate Claimants, the EPA, and DHEC entered into a comprehensive
settlement agreement, by which they resolved each PRP’s CERCLA
liability for costs associated with remediating the Facility. By Order
of June 13, 2002, the district court approved the settlement agree-
ment. S.C. Dept. of Health & Envtl. Control v. Atl. Steel Indus., Inc.,
No. 2:97-726-12 (D.S.C. June 13, 2002). Pursuant thereto, the Corpo-
9
The Corporate Claimants are: Ameristeel Corporation; CP Chemicals,
Inc.; I. Schumann & Company; Kerr-McGee Chemical LLC; Lucent
Technologies Inc.; Mueller Brass Company; Nucor Corporation; Nucor-
Yamato Steel Company Inc.; Roanoke Electric Steel Corporation; Owen
Electric Steel Company of South Carolina, Inc.; and The Federal Metal
Company.
10
A "remedial action" under CERCLA is an activity consistent with
permanently remedying the release of hazardous substances into the
environment so as to prevent danger to the public health or the environ-
ment. See 42 U.S.C. § 9601(24).
10 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS.

rate Claimants are in the process of remediating the Facility, and they
have agreed to complete it. The Corporate Claimants have also agreed
to reimburse DHEC for its remediation expenses and for all costs
associated with its administration of the remediation process. Com-
plaint ¶ 8.

D. Procedural History

By their Complaint, the appellants seek to recover from the Insur-
ers their past remediation costs and the costs they have agreed to pay
for future remediation of the Facility. Complaint ¶ 20. In Count One,
the appellants seek to recover their remediation costs directly from the
Insurers, pursuant to section 107 of CERCLA. 42 U.S.C. § 9607.
Count Two, initiated on behalf of the Corporate Claimants only, seeks
contribution directly from the Insurers, pursuant to section 113 of
CERCLA. Id. § 9613. In Count Three, the appellants seek common
law restitution directly from the Insurers. In Count Four, the Corpo-
rate Claimants seek a declaration that each Insurer is obliged to pay
for all future damages, losses, and costs incurred in remediating the
Facility. Finally, in Count Five, DHEC seeks a declaration that the
Insurers must pay all future costs resulting from the Facility’s
remediation.

On January 10, 2003, the Insurers moved to dismiss the Complaint.
With respect to Counts One and Two, they maintained that the appel-
lants could not proceed directly against them to recover costs already
expended in remediating the Facility because:

(1) the appellants’ claims for the recovery of remediation
costs arise under CERCLA, rather than RCRA;

(2) RCRA and CERCLA contain separate and distinct
direct action provisions;

(3) in order to initiate a CERCLA cause of action directly
against an insurer, a claimant must rely on CERCLA’s direct
action provision, rather than on the RCRA Provision;

(4) CERCLA’s direct action provision authorizes suit
directly against an insurer to recover cleanup costs only if
 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS. 11
the insurer provided evidence of financial responsibility
pursuant to CERCLA; and

(5) the Insurers provided financial assurance to Stoller
pursuant to RCRA, not CERCLA.

In sum, the Insurers maintained that Counts One and Two failed to
state claims upon which relief can be granted, see Fed. R. Civ. P.
12(b)(6), because the RCRA Provision cannot be utilized to pursue a
remedy under CERCLA. The court agreed with the Insurers and dis-
missed those claims, ruling that the RCRA provision may not be used
to pursue a CERCLA claim against insurers of hazardous waste facili-
ties.

In seeking the dismissal of Count Three, the Insurers contended
that it was a CERCLA claim mischaracterized as a claim for common
law restitution. They maintained that Count Three is indistinguishable
from the claims asserted in Counts One and Two and that it was sub-
ject to dismissal on the same basis. The Insurers also contended that
Count Three was defective because, under South Carolina law, a
direct action may not be pursued on a restitution claim. The court
agreed with the Insurers, deciding that Count Three is a CERCLA
claim in disguise and that South Carolina law does not authorize a
restitution claim to be asserted directly against an insurer.

Finally, the court declined to exercise jurisdiction over Counts Four
and Five. First, it determined that it could not resolve the declaratory
judgment claims without declaring Stoller’s rights under the policies.
And it concluded that, because Stoller was not a party to the proceed-
ings, the court could not declare those rights. Second, the court
decided that interests of judicial economy required it to decline juris-
diction over the declaratory judgment claims. On February 14, 2003,
it entered an order dismissing the Complaint.11 S.C. Dep’t of Health
11
In their briefs in this appeal, the parties assert that the Complaint was
dismissed "with prejudice." The court’s February 14, 2003, Judgment
Order, however, simply provides that the plaintiffs’ action "is hereby dis-
missed." The court based the dismissal of Counts Four and Five on its
decision not to exercise jurisdiction over those claims. In so ruling, the
court did not pass on the merits of those counts. The district court’s dis-
missal of Counts Four and Five was thus without prejudice. See, e.g.,
Greening v. Moran, 953 F.2d 301, 304 (7th Cir. 1992).
12 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS.

& Envtl. Control v. Commerce & Indus. Ins. Comp., No. 2:00-1582-
12 (D.S.C. Feb. 14, 2003). The appellants have timely appealed, and
we possess jurisdiction pursuant to 28 U.S.C. § 1291.

II.

We review de novo the dismissal of a complaint for failure to state
a claim, viewing the complaint in the light most favorable to the
plaintiff and accepting as true all well-pleaded allegations. Franks v.
Ross, 313 F.3d 184, 192 (4th Cir. 2002). We review for abuse of dis-
cretion a district court’s decision not to rule on a claim for declaratory
relief, and we afford the court "great latitude" in determining whether
to exercise jurisdiction in such matters. Aetna Cas. & Sur. Co. v. Ind-
Com Elec. Co., 139 F.3d 419, 421-23 (4th Cir. 1998).

III.

A.

In Counts One and Two, the appellants assert CERCLA cost-
recovery and contribution claims directly against the Insurers. 42
U.S.C. § 9607 (cost recovery); id. § 9613 (contribution). On appeal,
they maintain that the district court erred in concluding that they
could not meld the procedural direct action right authorized by
RCRA, id. § 6924(t)(2), with substantive rights of recovery autho-
rized under CERCLA. The appellants contend that nothing in the
RCRA Provision precludes their pursuing CERCLA claims, on the
basis of the RCRA Provision, directly against the Insurers. The appel-
lants also maintain that the national policy underlying the adoption of
RCRA supports their use of the RCRA Provision. We reject these
contentions for the following reasons: first, by its plain language, the
RCRA Provision applies only to claims concerning present and future
threats to human health and the environment; second, the appellants’
reliance on the RCRA Provision is an effort to circumvent CER-
CLA’s more specific direct action provision; and third, the national
policy underlying RCRA indicates that Congress intended to limit the
RCRA Provision to claims concerning present and future threats to
human health and the environment. We discuss in turn each of these
bases for our conclusion.
 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS. 13
1.

First, the plain language of the RCRA Provision convinces us that
it applies only to claims concerning present and future threats to
human health and the environment, as opposed to claims seeking to
recover the costs of environmental cleanup activities. In resolving
issues of statutory construction, we are obliged to begin with the lan-
guage of a statute. If the statute is clear, "judicial inquiry into the stat-
ute’s meaning, in all but the most extraordinary circumstances, is
finished." Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 475
(1992). We decide whether statutory language is plain by assessing
"the language itself, the specific context in which that language is
used, and the broader context of the statute as a whole." Robinson v.
Shell Oil Co., 519 U.S. 337, 341 (1997). As explained below, the
RCRA Provision, viewed in its broader context, precludes its being
used to pursue Counts One and Two.

a.

In order to evaluate the RCRA Provision in its broader context, we
must understand the distinct goals of RCRA and CERCLA. Although
the aims of RCRA and CERCLA are related, each serves a separate
and unique purpose.12 Westfarm Assocs. Ltd. P’ship v. Wash. Subur-
ban Sanitary Comm’n, 66 F.3d 669, 679 (4th Cir. 1995) ("‘RCRA is
preventative; CERCLA is curative.’" (quoting B.F. Goodrich Co. v.
Murtha, 958 F.2d 1192, 1202 (2d Cir. 1992))). According to Con-
gress, RCRA "established this nation’s basic hazardous waste man-
agement system . . . , and provided complementary authority to
encourage the conservation and recovery of valuable materials and
energy." H.R. Rep. No. 98-198, pt. 1, at 19 (1984), reprinted in 1984
U.S.C.C.A.N. 5576, 5577. As a result, RCRA is preventative in
nature — "[i]t attempts to deal with hazardous waste before it
becomes a problem by establishing minimum federal standards for the
generation, treatment, storage, transportation, and disposal of hazard-
12
According to the EPA, "CERCLA is designed to remedy the mis-
takes in hazardous waste management made in the past, while the RCRA
waste management standards are concerned with avoiding such mistakes
through proper management in the present and future." Orientation Man-
ual VI-9.
14 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS.

ous waste, and the permitting of facilities to treat hazardous waste."
Envtl. Tech. Council v. Sierra Club, 98 F.3d 774, 779 (4th Cir. 1996).
Indeed, as the Supreme Court has observed, RCRA is not principally
designed to "compensate those who have attended to the remediation
of environmental hazards." Meghrig v. KFC W., Inc., 516 U.S. 479,
483 (1996).

CERCLA, on the other hand, serves goals that are remedial and
curative rather than preventative. Westfarm Assocs., 66 F.3d at 679.
As we have observed, "CERCLA establishes a cleanup program for
hazardous waste which has already been disposed of improperly."
Envtl. Tech. Council, 98 F.3d at 779. Although RCRA serves CER-
CLA’s remedial purpose by preventing the creation of future Super-
fund sites, see H.R. Rep. No. 98-198, pt. 1, at 20 (1984), reprinted
in 1984 U.S.C.C.A.N. 5576, 5579 (observing that "in the absence of
[enforcement of RCRA], little more will be done than to contribute
to future burdens on the ‘Superfund’ program, which is the remedial
program charged to EPA under [CERCLA]"), RCRA does not autho-
rize the prosecution of civil actions seeking the recovery of cleanup
costs. Meghrig, 516 U.S. at 483. We recognize that both RCRA and
CERCLA address issues relating to the management of hazardous
wastes. Each statute serves discrete and unique purposes, however,
and we are constrained to assess the RCRA Provision within this
broader context.

b.

Rather than analyzing the RCRA Provision in its broader context,
the appellants inappropriately focus on the term "any claim," as con-
tained therein. Relying on this term, they maintain that nothing in the
RCRA Provision restricts its use to claims arising under RCRA. In so
contending, however, they misapprehend the context in which the
term "any claim" is used. Read in context, the term "any claim" refers
to any claim arising from conduct for which the insurer provided evi-
dence of financial responsibility. 42 U.S.C. § 6924(t)(2) (providing
that "any claim arising from conduct for which evidence of financial
responsibility must be provided under this section may be asserted
directly against the guarantor providing such evidence of financial
responsibility").
 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS. 15
The breadth of the RCRA Provision necessarily relates to the extent
to which insurance coverage is mandated by RCRA’s financial
responsibility requirement. Under the appellants’ interpretation of the
RCRA Provision, an injured party could pursue any claim arising
from the operation of a RCRA-regulated facility directly against an
insurer providing RCRA-mandated coverage to the facility. If this
position were valid, then Congress has also authorized the RCRA
Provision to be used, inter alia, to pursue negligence claims arising
from auto accidents resulting from the operation of such facilities.
And because such direct-action negligence claims would be main-
tained under RCRA, they could be pursued in federal court. See 28
U.S.C. § 1331. There is nothing in the text of RCRA, however, or in
its legislative history, indicating that Congress intended such an
absurd result. In these circumstances, we can only conclude that the
RCRA Provision authorizes a direct action against an insurer only to
the extent that the insurer was required by RCRA to provide financial
assurance.

As to Counts One and Two, therefore, we must assess whether
those claims arise from conduct for which the Insurers were required,
pursuant to RCRA, to provide evidence of financial responsibility. In
RCRA, Congress mandated the EPA to promulgate regulations
requiring owners and operators of hazardous waste facilities to pro-
vide evidence of their financial responsibility (i.e., provide financial
assurance). 42 U.S.C. § 6924(a)(6). Because the EPA has granted pri-
macy to South Carolina with respect to its RCRA hazardous waste
management program, the RCRA-regulated hazardous waste facilities
in that state must comply with South Carolina’s financial responsibil-
ity provision (the "S.C. Provision"). South Carolina: Decision on
Final Authorization of State Hazardous Waste Management Program,
50 Fed. Reg. 46,437 (Nov. 8, 1985). Therefore, we must decide
whether the insurance coverage required by the S.C. Provision
included Stoller’s conduct giving rise to the claims asserted in Counts
One and Two. Two parts of the S.C. Provision define the ambit of the
financial assurance required for an owner or operator to obtain a
RCRA permit from DHEC. First, subsection (c)(2) provides that
DHEC may not issue a permit to an owner or operator of a hazardous
waste facility unless such owner or operator has provided DHEC
with:
16 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS.

[e]vidence of financial assurance in the form and amount as
[DHEC] may determine to be necessary to ensure that, upon
abandonment, cessation, or interruption of the operation of
a facility or site, all appropriate measures are taken to pre-
vent present and future damage to the public health and
safety and to the environment.

S.C. Code § 44-56-60(c)(2) (emphasis added). Thus, the coverage
mandated by this part of the S.C. Provision is expressly limited to
claims for "present and future" damage to public health, safety, and
the environment.

A separate subsection of the S.C. Provision requires that, before
issuing a permit to an owner or operator of a hazardous waste facility,
DHEC shall require "[e]vidence of other financial assurance in such
forms and amounts as [DHEC] determines to be necessary to ensure
the adequate availability of funds for clean-up costs and restoration
of environmental impairment arising from the facility." S.C. Code
§ 44-56-60(c)(3). Although the scope of coverage required by this
part of the S.C. Provision is not expressly limited to present and future
damage, the scope of such coverage is identical to that mandated by
the federal requirements. South Carolina: Final Authorization of State
Hazardous Waste Management Program Revision, 68 Fed. Reg.
52,126 (Sept. 2, 2003) (observing that South Carolina’s RCRA-
authorized hazardous waste program has no requirements more strin-
gent or broader in scope than those required by federal law). The
insurance coverage mandated by the S.C. Provision is therefore
restricted to present and future threats to human health and the envi-
ronment —— insurance coverage for cost-recovery and contribution
is not mandated by the S.C. Provision. See supra Part III.A.1.a.; infra
Part III.A.3.

In this dispute, Counts One and Two seek reimbursement for costs
the appellants incurred in remediating past environmental harms; i.e.,
cleaning up the Facility. See Complaint ¶¶ 18-19, 64, 69 (alleging that
appellants are entitled to reimbursement for costs they incurred in
addressing environmental contamination at Facility). The S.C. Provi-
sion, however, requires financial assurance only to ensure that "all
appropriate measures are taken to prevent present and future damage
to the public health and safety and to the environment." S.C. Code
 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS. 17
§ 44-56-60(a)(2) (emphasis added). Thus, on the basis of the RCRA
Provision, analyzed in concert with the S.C. Provision, the district
court properly ruled that Counts One and Two fail to satisfy Rule
12(b)(6). The appellants are thus unable to rely on the RCRA Provi-
sion to pursue their CERCLA cost-recovery and contribution claims
directly against the Insurers.

2.

In seeking to use the RCRA Provision to assert their CERCLA
claims directly against the Insurers, the appellants are undertaking to
circumvent CERCLA’s direct action provision.13 Pursuant to elemen-
tary principles of statutory construction, unless the legislature has
indicated that it intends otherwise, a specific statutory provision con-
trols a more general one. See Guidry v. Sheet Metal Workers Nat’l
Pension Fund, 493 U.S. 365, 375 (1990) ("It is an elementary tenet
of statutory construction that ‘[w]here there is no clear intention oth-
erwise, a specific statute will not be controlled or nullified by a gen-
eral one . . . .’" (quoting Morton v. Mancari, 417 U.S. 535, 550-51
(1974))); see also Warren v. N.C. Dep’t of Human Res., 65 F.3d 385,
390 (4th Cir. 1995) ("It is an elementary principle of statutory con-
struction that a specific statutory provision controls a more general
one."). Importantly, the CERCLA provision limits the circumstances
under which it may be used to assert CERCLA claims directly against
a liable party’s insurer.

On appeal, the appellants acknowledge that the limitations of CER-
CLA’s direct action provision preclude its use with respect to their
CERCLA claims.14 The appellants’ effort to use the more general
13
RCRA and CERCLA constitute separate Chapters in Title 42, and
they contain separate provisions and requirements. The appellants, how-
ever, seek to maintain direct actions against the insurers using a proce-
dure from Chapter 82 (RCRA) to seek remedies provided for under
Chapter 103 (CERCLA).
14
The appellants are unable to rely on CERCLA’s direct action provi-
sion because that provision may only be used to assert claims against
guarantors providing evidence of financial responsibility pursuant to
CERCLA, 42 U.S.C. § 9608(c)(2), and as the appellants acknowledge,
the Insurers are RCRA — not CERCLA — guarantors.
18 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS.

RCRA Provision to assert their CERCLA claims directly against the
Insurers must fail because nothing in the statutes or legislative history
of either CERCLA or RCRA indicates that Congress intended to
authorize a party to rely on the RCRA Provision to the exclusion of
the more specific statutory requirements of CERCLA. The district
court therefore correctly concluded that the appellants must rely on
the narrowly-tailored provision of CERCLA, rather than on the more
general RCRA Provision, to assert their CERCLA claims directly
against the Insurers.

3.

Finally, the appellants maintain that the national policy underlying
the enactment of RCRA supports their use of the RCRA Provision in
pursuing Counts One and Two directly against the Insurers. On the
contrary, however, the national policy underlying RCRA’s enactment
supports the district court’s dismissal of Counts One and Two. In
enacting RCRA, Congress declared that:

the generation of hazardous waste is to be reduced or elimi-
nated as expeditiously as possible. Waste that is neverthe-
less generated should be treated, stored, or disposed of so as
to minimize the present and future threat to human health
and the environment.

42 U.S.C. § 6902 (setting forth policy under RCRA in provision titled
"National Policy") (emphasis added). The Eighth Circuit, relying in
part on the national policy underlying RCRA, concluded that
"RCRA’s goal is to prevent the creation of hazardous waste sites,
rather than to promote the cleanup of existing sites." Furrer v. Brown,
62 F.3d 1092, 1098 (8th Cir. 1995). Significantly, the Supreme Court
has observed that RCRA was principally designed to "reduce the gen-
eration of hazardous waste and to ensure the proper treatment, stor-
age, and disposal of that waste which is nonetheless generated, ‘so as
to minimize the present and future threat to human health and the
environment,’" rather than "to compensate those who have attended
to the remediation of environmental hazards." Meghrig, 516 U.S. at
483 (quoting 42 U.S.C. § 6902(b)) (emphasis added). The national
policy underlying RCRA’s enactment, as well as the court decisions
relating thereto, indicate that RCRA-mandated insurance provides
 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS. 19
coverage for occurrences arising from present harm and prospective
threats to public health and the environment, rather than for cost-
recovery or contribution claims springing from past cleanup efforts.
42 U.S.C. § 6902; Meghrig, 516 U.S. at 483; Furrer, 62 F.3d at 1098.

B.

The appellants next contend that Count Three, the South Carolina
common law restitution claim, was also improperly dismissed.
Although recognizing that South Carolina authorizes a cause of action
for restitution, see, e.g., Player v. Chandler, 382 S.E.2d 891 (S.C.
1989), the appellants’ analysis fails to distinguish a "typical" common
law restitution claim from a restitution effort pursued directly against
an insurer. A direct action against an insurer cannot be maintained
under South Carolina law unless one of two criteria is satisfied: (1)
privity of contract between the claimant and the insurer; or (2) an
express statutory grant of the right to restitution. Major v. Nat’l
Indem. Co., 229 S.E.2d 849, 850 (S.C. 1976); see also Swinton v.
Chubb & Son, Inc., 320 S.E.2d 495, 496 (S.C. 1984) (rejecting direct
action against insurer because no express grant of right to restitution
by legislature). Here, the Complaint does not allege privity between
the appellants and the Insurers, nor has the South Carolina legislature
provided statutory authorization for a direct action. Even if we
assumed that, because of South Carolina’s primacy status, the RCRA
provision may provide the basis for a restitution claim, the dismissal
of Count Three would be appropriate because the national policy
underlying RCRA suggests that it was not intended for use by parties
seeking compensation for past cleanup of environmental contamina-
tion. See supra Part III.A.3. Because the RCRA Provision does not
authorize cost recovery or compensation for past cleanup costs, a
cause of action for restitution cannot be maintained directly against
the Insurers. Thus, the district court’s dismissal of Count Three, pur-
suant to Rule 12(b)(6), was also proper.

C.

Turning finally to Counts Four and Five, the appellants seek a judi-
cial declaration that each Insurer is obliged to pay for all damages,
losses, and costs the appellants may incur with respect to future envi-
ronmental remediation at the Facility. The district court concluded
20 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS.

that it was appropriate, for two reasons, to dismiss those two claims.
First, because Stoller was not a party, the court reasoned that any
rights stemming from Stoller’s insurance policies may be indetermin-
able. Second, the court expressed concern over the piecemeal nature
of the litigation and the potential adverse impact retaining jurisdiction
over Counts Four and Five could have on judicial economy. The
appellants maintain that the dismissal of Counts Four and Five on
these two bases was an abuse of discretion because: (1) CERCLA
expressly provides for declaratory relief concerning cost-recovery
claims; (2) courts have repeatedly confirmed the availability of
declaratory relief to CERCLA contribution plaintiffs; and (3) nothing
in the RCRA Provision precludes its use in pursuing declaratory judg-
ment relief under CERCLA for present or prospective harm.

A district court possesses broad discretion on whether to exercise
its jurisdiction in declaratory judgment proceedings, and we are
obliged to accord deference to the exercise of such discretion.15 Aetna
Cas. & Sur. Co. v. Quarles, 92 F.2d 321, 325 (4th Cir. 1937). As we
have consistently observed, the decision to grant or deny a petition for
declaratory relief "is a matter resting in the sound discretion of the
trial court." Id.; Doby v. Brown, 232 F.2d 504, 506 (4th Cir. 1956);
Am. Fid. & Cas. Co. v. Serv. Oil Co., 164 F.2d 478, 481 (4th Cir.
1947). Although a trial court has great latitude in determining whether
to assert jurisdiction over declaratory judgment actions, we have
nonetheless enumerated certain factors, including judicial efficiency,
to be utilized in the exercise of such discretion. See Ind-Com Elec.
Co., 139 F.3d at 422 (enumerating several factors to guide court’s
exercise of discretionary jurisdiction over declaratory judgments);
Mitcheson v. Harris, 955 F.2d 235, 237-40 (4th Cir. 1992) (observing
that court may consider judicial efficiency in deciding whether to
exercise discretionary jurisdiction).

15
The Declaratory Judgment Act provides that a district court "may
declare" the rights of interested parties. 28 U.S.C. § 2201(a) (emphasis
added). We have held that the "may declare" language provides a district
court with discretionary authority to hear and determine declaratory
judgment cases. United Capitol Ins. Co. v. Kapiloff, 155 F.3d 488, 493
(4th Cir. 1998).
 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS. 21
With these principles in mind, we first assess the contention that,
because Stoller is neither a necessary nor an indispensable party to
this action, the court erred in deciding that its non-party status was an
adequate basis for dismissal of the declaratory judgment claims. Con-
gress created the RCRA Provision so that a party injured by a bank-
rupt RCRA-regulated facility could proceed directly against those
insurers providing financial assurance pursuant to RCRA, obviating
the procedural complexities associated with pursuing an insured in
bankruptcy proceedings. RCRA’s statutory right of direct action
would be eviscerated if, in situations where reliance on the RCRA
Provision is authorized, such reliance is conditioned upon the bank-
rupt entity being a party to the proceeding. See Searles v. Cincinnati
Ins. Co., 998 F.2d 728, 730 (9th Cir. 1993) (observing that direct
action is one in which plaintiff is entitled to bring suit against tortfea-
sor’s liability insurer without joining insured). Thus, Stoller’s absence
as a party to this proceeding was, in itself, an inadequate basis for the
dismissal of Counts Four and Five.

The appellants’ contention that judicial economy was not an ade-
quate basis for the dismissal of their declaratory judgment claims is
another matter. In that regard, the appellants maintain that the court’s
concerns regarding judicial economy arose from its erroneous dis-
missal of Counts One through Three, and they contend that these con-
cerns would be eliminated by the reinstatement of those Counts. Our
resolution of this appeal with regard to Counts One through Three,
however, undermines the appellants’ position on this point.

Because the court’s decision not to exercise jurisdiction over
Counts Four and Five rested on the court’s discretion and is supported
by its concern about piecemeal litigation, we need not reach the issue
of whether the RCRA Provision may be used to pursue a CERCLA
declaratory judgment claim for present or prospective harm. Irrespec-
tive of whether the assertion of such a CERCLA claim is statutorily
authorized, we are unable to say that the court abused its discretion.
White v. Nat’l Union Fire Ins. Co., 913 F.2d 165, 168 (4th Cir. 1990)
(noting legitimacy of concern for judicial economy in assessing
whether jurisdiction should be exercised in declaratory judgment pro-
ceeding). In these circumstances, the district court did not err in dis-
missing, without prejudice, Counts Four and Five.
22 S.C. DEP’T OF HEALTH v. COMMERCE AND INDUS. INS.

IV.

For the foregoing reasons, we affirm the judgment of the district
court.

AFFIRMED