United States v. Alcan Aluminum, Inc.

Opinions of the United
1994 Decisions States Court of Appeals
for the Third Circuit

5-25-1994

United States of America v. Alcan Alum. Inc., et al.
Precedential or Non-Precedential:

Docket 93-1099

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 UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

___________

No. 93-1099
___________

UNITED STATES OF AMERICA

v.

ALCAN ALUMINUM, INC.;
CHAMPION AUTO GENERATOR SERVICE, INC.;
INTERNATIONAL FLAVORS AND FRAGRANCES, INC.;
KALAMA CHEMICAL, INC.; SCHULTZ ELECTROPLATING, INC.;
S&W WASTE, INC.; McADOO ASSOCIATES, INC.;
PAYSO, INC.; EDWARD L. PAYER; NOREEN PAYER

v.

AT&T TECHNOLOGIES, INC.;
CPS CHEMICALS COMPANY, INC.;
EAST COAST POLLUTION CONTROL, INC.;
KNOLL INTERNATIONAL, INC.;
LEHIGH STRUCTURAL STEEL COMPANY;
JOHN E. POTOCHNY; BEATRICE/HUNT WESSON, INC.;
PROCTER & GAMBLE MANUFACTURING COMPANY;
21 INTERNATIONAL, INC.; SPECIAL METALS CORPORATION;
ACTIVATED METALS & CHEMICALS, INC.;
TELEDYNE VASCO, A Division of Teledyne Industries, Inc.;
TELEDYNE WAH CHANG HUNTSVILLE,
A Division of Teledyne Industries, Inc.;
WITCO CORPORATION, on behalf of itself
and the RICHARDSON COMPANY;
CBP RESOURCES; FIRST VALLEY BANK

The Trustees of the McAdoo Associates
Site Trust Fund ("the Trustees"),
proposed intervenors,
Appellants

_______________________________________________

On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil Action No. 88-04970)
___________________

1
2
 Argued December 2, 1993

Before: SCIRICA and ALITO, Circuit Judges
and BASSLER, District Judge*

(Filed May 25, l994 )

ANTOINETTE R. STONE, ESQUIRE (Argued)
Buchanan Ingersoll
1200 Two Logan Square
18th and Arch Streets
Philadelphia, Pennsylvania 19103

Attorney for Appellants

JOHN T. STAHR, ESQUIRE (Argued)
United States Department of Justice
P.O. Box 23985
L'Enfant Plaza Station
Washington, D.C. 20026

EVELYN YING, ESQUIRE
United States Department of Justice
P.O. Box 23795
L'Enfant Plaza Station
Washington, D.C. 20026

Attorneys for Appellee, United States of America

DOUGLAS F. SCHLEICHER, ESQUIRE (Argued)
Saul, Ewing, Remick & Saul
3800 Centre Square West
Philadelphia, Pennsylvania 19102

Attorney for Appellee,
International Flavors and Fragrances, Inc.

ROBERT B. McKINSTRY, JR., ESQUIRE (Argued)
Ballard, Spahr, Andrews & Ingersoll
1735 Market Street, 51st Floor
Philadelphia, Pennsylvania 19103

Attorney for Appellee, First Valley Bank

3
*The Honorable William G. Bassler, United States District Judge
for the District of New Jersey, sitting by designation.

4
JOEL SCHNEIDER, ESQUIRE
Manta & Welge
One Commerce Square, 37th Floor
2005 Market Street
Philadelphia, Pennsylvania 19103

Attorney for Appellee, Kalama Chemical, Inc.

ALLEN E. ERTEL, ESQUIRE
Allen E. Ertel & Associates
30 West 3rd Street, Suite 301
Williamsport, Pennsylvania 17701

Attorney for Appellee, Schultz Electroplating, Inc.

MARK N. COHEN, ESQUIRE
Margolis, Edelstein & Scherlis
The Curtis Center, 4th Floor
Sixth and Walnut Streets
Philadelphia, Pennsylvania 19106

Attorney for Appellee, S&W Waste, Inc.

HOWARD M. KLEIN, ESQUIRE
Conrad, O'Brien, Gellman & Rohn
1515 Market Street, 16th Floor
Philadelphia, Pennsylvania 19102

Attorney for Appellee, AT&T Technologies, Inc.

DAVID E. LODER, ESQUIRE
Duane, Morris & Heckscher
4200 One Liberty Place
Philadelphia, Pennsylvania 19103-7396

Attorney for Appellee, Lehigh Structural Steel Company

RODNEY B. GRIFFITH, ESQUIRE
JANICE V. QUIMBY-FOX, ESQUIRE
Schnader, Harrison, Segal & Lewis
1600 Market Street, Suite 3600
Philadelphia, Pennsylvania 19103

Attorneys for Appellee, Beatrice/Hunt Wesson, Inc.

5
6
THEODORE L. GARRETT, ESQUIRE
Covington & Burling
1201 Pennsylvania Avenue, N.W.
P.O. Box 7566
Washington, D.C. 20044

FREDERICK W. ROM, ESQUIRE
Lavin, Coleman, Finarelli & Gray
10000 Midlantic Drive, Suite 300 West
Mount Laurel, New Jersey 08054

Attorneys for Appellee, Procter & Gamble Manufacturing Company

RANDALL L. SAROSDY, ESQUIRE
Akin, Gump, Strauss, Hauer & Feld
1333 New Hampshire Avenue, N.W.
Suite 400
Washington, D.C. 20036

Attorney for Appellee, 21 International, Inc.

__________________

OPINION OF THE COURT
__________________

SCIRICA, Circuit Judge.

In this appeal we must decide whether a party who has

entered into a consent decree with the Environmental Protection

Agency for the cleanup of a superfund site may intervene in

subsequent litigation over the same site. We believe that,

provided it can demonstrate it has a protectable interest, an

early settlor may intervene in the later litigation as of right.

On these facts, however, the right to intervene hinges on whether

the applicant had a protectable interest at risk. Because it is

unclear from the record whether the intervenor's interest was

7
affected by the subsequent consent decree, we will vacate the

district court's orders denying the motion to intervene and

approving the subsequent consent decree, and remand for a

determination of whether the second consent decree affected the

intervenor's rights under the first decree.

I.

FACTS & PROCEDURE

This appeal arises out of the cleanup of the McAdoo

site, a parcel of land in Schuylkill County, Pennsylvania. Once

used for strip mining, the McAdoo site was used for waste

incineration and recycling from 1975 until it closed in 1979. At

that time there were approximately 6,800 storage drums and

several 10,000 and 15,000 gallon storage tanks of hazardous waste

at the site.

The Air Products Litigation

In 1987 the United States began proceedings over the

release and threatened release of hazardous material at the

McAdoo site.0 On June 3, 1988, the government entered into a

consent decree with 65 Potentially Responsible Parties (PRPs),

the "Air Products defendants," who agreed to reimburse the

government for approximately $790,000 of past costs and to

undertake a remedial program to prevent any future release of

hazardous substances.0 They also agreed to pay all of the long

0
Pennsylvania's Department of Environmental Resources later
intervened as a plaintiff.
0
The Air Products defendants' consent decree did not address
surface or ground water contamination at the McAdoo Site. EPA
has notified the parties that future litigation may be necessary
to address this problem.

8
term operations and maintenance costs. In exchange, the

government agreed not to seek reimbursement for any of its past

remedial costs and to allow the Air Products defendants to seek

reimbursement for as much as 25% of their clean-up costs,

provided the government could successfully recover those costs

from other non-settling PRPs.0

The agreement contained two other notable provisions.

First, it contained a provision reserving the Air Products

defendants' right to sue all non-settling parties for

contribution. Second, it contained a provision stating the

government's "present intent" not to include in any future

settlement over the McAdoo site a covenant not to sue that was

broader than the one contained in the Air Products consent

decree.

The Alcan Litigation

On June 23, 1988 the government began proceedings

against another group of PRPs, the "Alcan defendants." In this

action, the government sought reimbursement for costs it had

previously incurred and a declaration that the Alcan defendants

were liable for future response costs. The Alcan defendants and

the government reached an agreement in January, 1992. The

resultant consent decree was filed in the district court on

August 10, 1992, and notice was published in the Federal Register
on August 19, 1992. 57 Fed. Reg. 37,556 (1992).

0
The Air Products defendants agreed not to seek reimbursement
from the government for any part of the costs of operations and
maintenance.

9
 Under the terms of the consent decree the Alcan

defendants agreed to reimburse approximately $2 million of the

government's response costs. In exchange, the government agreed

not to sue the Alcan defendants for: (1) any work covered in the

Air Products consent decree, (2) any of the government's

oversight costs, (3) response costs incurred before June, 1990,

and (4) the government's enforcement costs.0

As required by CERCLA, the district court reserved

approval of the consent decree to allow for public comment. 42

U.S.C. § 9622(d)(2)(1988). On September 16, 1992, the Trustees

of the McAdoo site, on behalf of the Air Products defendants,

objected to the consent decree on the grounds that it would

extinguish their right to sue the Alcan defendants for

contribution. They also argued the covenant not to sue First

Valley Bank over surface or ground water contamination violated a

provision in the Air Products consent decree where the government

stated its intention not to give any other PRP a covenant not to

sue broader than the one contained in the Air Products consent

decree.

The Trustees also moved to intervene in the

government's suit against the Alcan defendants under CERCLA

§113(i), 42 U.S.C. § 9613(i)(1988), and Federal Rule of Civil

0
In addition, the government agreed not to sue First Valley Bank
in connection with either surface or ground water contamination
because it believed First Valley's only ownership interest in the
site was as a secured creditor and secured creditors are exempt
from liability. See 42 U.S.C. §9607(a)(1)(1988) (imposing
liability on a facility's owners), and 42 U.S.C. §
9601(20)(A)(1988) (exempting secured creditors from the
definition of owner).

10
Procedure 24(a).0 On November 24, 1992, the district court

denied the Trustees' motion, holding that § 113(i) was

inapplicable, and that the Rule 24 application was untimely and

did not reflect "a substantial and direct protectable interest in

the litigation." This timely appeal followed.

The district court had jurisdiction under 42 U.S.C.

§§9607 and 9613(b). We have jurisdiction under 28 U.S.C. § 1291

(1988) because the denial of a motion to intervene is a final,

appealable order. See McKay v. Heyison, 614 F.2d 899, 903 (3d

Cir. 1980); Pennsylvania v. Rizzo, 530 F.2d 501, 504 (3d Cir.),

cert. denied, sub nom. Fire Officers Union v. Pennsylvania, 426

U.S. 921 (1976). We review the denial of a motion to intervene

as of right for abuse of discretion. However, our review "is

`more stringent' than the abuse of discretion review we apply to

a denial of a motion for permissive intervention." Brody v.

Spang, 957 F.2d 1108, 1115 (3d Cir. 1992) (quoting Harris v.

Pernsley, 820 F.2d 592, 597 (3d Cir.) (internal citation and

quotation omitted), cert. denied, sub nom. Castille v. Harris,

484 U.S. 947 (1987)). We will reverse only if we find the

district court "has applied an improper legal standard or reached

a decision we are confident is incorrect." Id. (quoting Harris,
820 F.2d at 597).

II.

DISCUSSION

0
The Trustees also sought permissive intervention under Federal
Rule of Civil Procedure 24(b). Because we are unable to
determine whether the Trustees' interest is at stake in the Alcan
litigation we do not reach this issue.

11
 In 1986 Congress passed the Superfund Amendment and

Reauthorization Act ("SARA"), Pub. L. 99-499; 100 Stat. 1613

(codified in scattered sections of 42 U.S.C.), which amended

CERCLA, 42 U.S.C. §§ 6911, 6911a, 9601-75. Congress' intent in

passing SARA was to ensure rapid and thorough cleanup of toxic

waste sites. See H.R. Rep. No. 253, 99th Cong., 2d Sess. 55

reprinted in 1986 U.S.C.C.A.N. 2835, 2837. Because Congress

believed it could never provide EPA with adequate money or

manpower, the new law tried to maximize the participation of

responsible parties in the cleanup. Id.

A. Claims under § 113(i).

Among the sections added to CERCLA in 1986 was §113(i),

which permits interested parties to intervene as of right in

actions under CERCLA or the Solid Waste Disposal Act. 42 U.S.C. §

9613(i).0 The government challenges the Trustees' ability to

intervene in its suit against the Alcan defendants arguing that,

under § 113(i), intervention is restricted to persons who wish to

0
Section 113(i) provides:

In any action commenced under this
chapter or under the Solid Waste Disposal Act
in a court of the United States, any person
may intervene as a matter of right when such
person claims an interest relating to the
subject of the action and is so situated that
the disposition of the action may, as a
practical matter, impair or impede the
person's ability to protect that interest,
unless the President or the State shows that
the person's interest is adequately
represented by existing parties.

42 U.S.C. § 9613(i) (1988).

12
raise health or environmental concerns. Agreeing with the

government, the district court held the Trustees could only

challenge the consent decree through CERCLA's public comment

provision, § 122(d)(2). See United States v. Alcan Aluminum,

Inc., No. 88-4970, at 2 n.1 (E.D. Pa. Dec. 1, 1992) (order

denying motion to intervene).

When interpreting a statute we look first to the

language itself. See Reves v. Ernst & Young, 113 S.Ct. 1163, 1169

(1993). Section 113(i) states, without qualification, that "any

person" who meets § 113(i)(2)'s four requirements can intervene

as of right in "any action" commenced under CERCLA. We do not

believe Congress would have used the phrase "any person may

intervene" or "any action under this chapter" if it had intended

to restrict intervention to only those persons raising a

particular, but unidentified, claim.

Moreover, § 113's language mirrors the language in

Federal Rule of Civil Procedure 24(a).0 That language was added

0
Federal Rule of Civil Procedure 24(a) provides in part:

Upon timely application anyone shall be
permitted to intervene in an action . . . (2)
when the applicant claims an interest
relating to the property or transaction which
is the subject of the action and the
applicant is so situated that the disposition
of the action may as a practical matter
impair or impede the applicant's ability to
protect that interest, unless the applicant's
interest is adequately represented by
existing parties.

Fed. R. Civ. P. 24(a) (West 1993).

13
to the rule in 1966 to relax the interest requirement and "to

foster more flexible, pragmatic judicial treatment of

intervention as of right." Carl Tobias, Standing to Intervene,

1991 Wis. L. Rev. 415, 430 (1991); see James W. Moore, 3B Moore's

Federal Practice, ¶ 24.09-1[2], at 24-301 ("The liberalization of

Rule 24(a) was not aimed at revising the nature of the

applicant's interest, but was focused mainly on relaxing the

requirement that the applicant would be bound . . . ). Thus, the

same language the government here claims restricts intervention

was added to Rule 24 to facilitate intervention. See Fed. R. Civ.

P. 24, Notes of Advisory Committee on Rules 1966 Amendment at

100-01 (West 1993); New Orleans Public Serv. Inc. v. United Gas

Pipe Line Co., 732 F.2d 452, 463 (5th Cir.) (en banc), cert.

denied, sub nom. Morial v. United Gas Pipe Line Co., 469 U.S.

1019 (1984). We do not believe Congress would have used the same

language in § 113(i) as was used in Rule 24(a) if it had intended

to reach such a different result.

Pointing to the legislative history, the government

asks us to find a more limited meaning behind the statute's broad

language.0 "But we do not resort to legislative history to cloud

0
The House Judiciary Committee report, states:
Finally, the Committee amendment adds a new
subsection 113[i] to CERCLA to provide that
any person may intervene as a matter of right
when that person claims a direct public
health or environmental interest in the
subject of a judicial action allowed under
this section, and when the disposition of the
action may impair or impede the person's
ability to protect that interest.

14
a statutory text that is clear." Ratzlaf v. United States, 114

S.Ct. 655, 662 (1994); see also Negonsott v. Samuels, 113 S.Ct.

1119, 1122-23 (1993) ("[W]here [Congress's] will has been

expressed in reasonably plain terms, that language must

ordinarily be regarded as conclusive.") (quoting Griffin v.

Oceanic Contractors, Inc., 458 U.S. 564, 570 (1982)). Thus,

although we recognize a House report suggests a more limited

construction, we cannot ignore the clarity of § 113's language.

Consequently, we believe that any interested party can intervene

under § 113(i).

B. Intervention under Rule 24(a) and § 113(i).
Because of their similarity, courts apply essentially
the same test when determining whether to grant an application
for intervention under both Rule 24(a) and § 113(i). See, e.g.,
Utah v. Kennecott Corp., 801 F. Supp. 553, 571-72 (D. Utah 1992);
Arizona v. Motorola, Inc., 139 F.R.D. 141, 144 (D. Ariz. 1991);
United States v. Acton Corp., 131 F.R.D. 431, 433 (D.N.J. 1990).0
As we explained in Brody and Harris, cases under Rule 24(a), an
applicant can intervene as of right where:

(1) the application for intervention is
timely; (2) the applicant has a sufficient
interest in the litigation; (3) the interest
may be affected or impaired, as a practical
matter by the disposition of the action; and
(4) the interest is not adequately
represented by an existing party in the
litigation.

H.R. Rep. No. 253, 99th Cong., 1st Sess., pt. 3, at 24 (1985)

reprinted in 1986 U.S.C.C.A.N. at 3047.
0
Although inapplicable in this case, there is one difference
between the two tests. Under Rule 24 the burden of proving all
four parts of the test falls on the applicant. Under § 113(i)
the existing parties must show the applicant's interest is being
adequately represented in order to prevent intervention. United
States v. Pitney Bowes, Inc., 1994 U.S. App. Lexis 1318, at *9
(2d Cir. Jan. 26, 1994); Motorola, 139 F.R.D. at 144.

15
Brody, 957 F.2d at 1115; Harris, 820 F.2d at 596.

The district court denied the Trustees' motion to

intervene because it found their motion was untimely, and it

believed the Trustees did not have a protected interest at stake

in the litigation. The Trustees claim their application was

timely because it was filed less than two months after they

learned the consent decree might jeopardize their right to sue

for contribution, and because the government persuaded them to

refrain from intervening earlier by giving them false assurances

that the Alcan consent decree would not compromise their rights.

They also claim their right to seek contribution is a legally

protectable interest which the consent decree, if approved, would

extinguish.

16
 1. Timeliness

The Alcan litigation began on June 23, 1988. The

consent decree was filed on August 9, 1992 and the Trustees moved

to intervene on September 22, 1992. Arguing the Trustees waited

more than four years before moving to intervene, the government

claimed the Trustees' motion was untimely. The district court

also believed the Trustees' motion was untimely, stating, "upon

consideration of the current status of the litigation and the

knowledge of the Trustees regarding the discussions leading up to

the current consent decree, the motion is untimely." We

disagree.

The government misconstrues the timeliness requirement.

As used here, timeliness is not just a function of counting days;

it is determined by the totality of the circumstances. See NAACP

v. New York, 413 U.S. 345, 366 (1973). See generally, James W.

Moore, 3B Moore's Federal Practice § 24.13 (timeliness is not

merely a function of when the motion was filed relative to the

filing of the action). Although the point to which the

litigation has progressed is one factor to consider, it is not

dispositive. NAACP, 413 U.S. at 366; National Wildlife Fed'n v.
Burford, 878 F.2d 422, 433 (D.C. Cir. 1989), rev'd. on other

grounds, sub nom. Lujan v. National Wildlife Fed'n, 497 U.S. 871

(1990). Moreover, the timeliness requirement is "`an elemental

form of latches or estoppel.'" Stallworth v. Monsanto, 558 F.2d

257, 266 (5th Cir. 1977) (citation omitted). As such, timeliness

should not prevent intervention where an existing party induces

the applicant to refrain from intervening. Cf. id. at 267 ("Since

17
the plaintiffs urged the district court to make it more difficult

for the appellants to acquire information about the suit early

on, we do not think they should now be heard to complain that the

appellants should have . . . appreciated its significance

sooner."). Consequently, where a party takes reasonable steps to

protect its interest, its application should not fail on

timeliness grounds. Cf. NAACP, 413 U.S. at 367.

This occurred here. The record demonstrates that the

Trustees were aware of the Alcan litigation, and kept in touch

with the government's counsel in order to protect their rights.

On November 18, 1991, the Trustees' counsel wrote a letter to the

government attorney handling the case, confirming the content of

their November 1, 1991 telephone conversation. That letter

indicates that when, during the course of their conversation, the

Trustees' counsel voiced concerns about the possibility of the

Alcan consent decree destroying the Trustees' contribution right,

the government's attorney assured him that the consent decree

would not compromise the Trustees' claim.0 That letter, which

0
The letter states in part:

In addition, as we have discussed, the
settlement of the Non-Settlors' Litigation
which the United State[s] currently
contemplates will not protect any of the Non-
Settlors from claims for contribution for
costs related to the Operation and
Maintenance ("O&M") of the Site remedy. In
short, O&M will not be a covered matter in
any such settlement. . . . If the United
States should change its position with
respect to any Non-Settlor and that Non-
Settlor's liability for O&M, please let me
know promptly. In the meantime, I look

18
the government does not challenge, demonstrates the Trustees'

intent to contest any consent decree that compromised their right

to contribution and that the Trustees refrained from taking

earlier action, in part, because of assurances given by the

government.

Under these circumstances, the Trustees had no reason

to believe they should try to intervene because the government

led them to believe their interests were not at stake in the

litigation.0 Since the government induced the Trustees to

refrain from intervening earlier, and the Trustees reasonably

relied on that representation, the government cannot credibly

complain the motion was untimely. Stallworth, 558 F.2d at 267.

We also believe that, to the extent there is a temporal

component to the timeliness inquiry, it should be measured from

the point which an applicant knows, or should know, its rights

are directly affected by the litigation, not, as the government

contends, from the time the applicant learns of the litigation.

In so holding, we are breaking no new ground. The Court of

forward to hearing from you once any Consent
Decree between the Non-Settlors and the
United States is ready to be executed by the
parties to it.

Letter from Robert Frank to Arnold Rosenthal (Nov. 18, 1991).
0
Because the Trustees demonstrated their intent to challenge the
consent decree if the decree jeopardized their contribution right
and the government does not dispute that the letter accurately
reflects the assurances it gave to the Trustees, this case is
distinguishable from NAACP, 413 U.S. at 367-68, where the Court
held it was not an abuse of discretion to deny a motion to
intervene where the applicant had failed to take steps to protect
its interest after it became aware of the litigation. Id.

19
Appeals for the District of Columbia Circuit came to the same

conclusion in National Wildlife Federation v. Burford, 878 F.2d

422 (D.C. Cir. 1989), rev'd. on other grounds, sub nom. Lujan v.

National Wildlife Fed'n, 497 U.S. 871 (1990). There, ASARCO, a

company that had staked mining claims on lands affected by a

Bureau of Land Management policy sought to intervene in

litigation challenging the implementation of that policy.

ASARCO's motion was filed 3 years after the litigation began,

but, due to a change in the way the agency construed its policy,

only 73 days after ASARCO learned its interests were directly

affected. Id. at 433-34. After the district court denied

ASARCO's motion to intervene on timeliness grounds the District

of Columbia Circuit reversed stating:
the salient factor is not when ASARCO's
motion to intervene was filed with respect to
the filing of NWF's original suit . . . .
Rather, the relevant time from which to
assess ASARCO's right of intervention is when
ASARCO knew or should have known that any of
its rights would be directly affected by this
litigation.

Id. at 433-34.
The Court of Appeals for the Fifth Circuit came to the

same conclusion in Stallworth v. Monsanto Co., 558 F.2d 257 (5th

Cir. 1977). There, a group of black employees sued Monsanto over

civil rights violations resulting from Monsanto's seniority

system. When the two sides began settlement negotiations

Monsanto sought court approval to alert its white employees to

the possible impact the proposed settlement would have on them.

The plaintiffs opposed Monsanto's motion and the court agreed.

20
Id. at 260-61. When a group of white employees eventually sought

to intervene under Rule 24(a) the plaintiffs opposed arguing the

motion was untimely. Id. at 262, 267. When the district court

denied the motion to intervene, the Fifth Circuit reversed.

Holding that timeliness should be measured from the point an

applicant knows, or should know, of the risk to its rights, the

court explained:

[A] rule making knowledge of the pendency of
the litigation the critical event would be
unsound because it would induce both too much
and too little intervention. It would
encourage individuals to seek intervention at
a time when they ordinarily can possess only
a small amount of information concerning the
character and potential ramifications of the
lawsuit, and when the probability that they
will misjudge the need for intervention is
correspondingly high. Often the protective
step of seeking intervention will later prove
to have been unnecessary, and the result will
be needless prejudice to the existing parties
and the would-be intervenor if his motion is
granted, and purposeless appeals if his
motion is denied. In either event, scarce
judicial resources would be squandered, and
the litigation costs of the parties would be
increased.

558 F.2d at 264-65.

We agree. To the extent the length of time an

applicant waits before applying for intervention is a factor in

determining timeliness, it should be measured from the point at

which the applicant knew, or should have known, of the risk to

its rights. The point at which the applicant should have known

its rights were at risk is usually a factual determination.

Nonetheless, where a party induces an applicant to refrain from

21
intervening and there is reasonable reliance, the applicant's

motion should not fail on timeliness grounds.

Here, the Trustees moved to intervene 43 days after

notice of the lodging of the consent decree, the point at which

they became aware of the potential risk to their contribution

claim. On these facts we believe their application was timely.
2. Air Products Defendants' Interest in the
Litigation.

We next address whether the Air Products' defendants

had a sufficient interest in the litigation, the second prong of

the intervention test. The district court held "[the Trustees]

do not have a substantial and direct protectable interest in this

litigation since the Trustees' claim to contribution is not

involved." The Trustees contend they have a statutory right to

sue for contribution which approval of the consent decree would

extinguish. The government claims the district court was correct

because the right to contribution is not a substantive legal

right, but instead is merely a contingency.

a. Sufficient legal interest.

Section 113(f)(1) gives early settling parties a right

to sue other PRPs for contribution.0 The Trustees contend their

contribution right is sufficient to support a motion to
0
42 U.S.C. § 9613(f)(1) provides in part:

Any person may seek contribution from any
other person who is liable or potentially
liable under section 9607(a) of this title,
during or following any action under section
9606 of this title or under section 9607(a)
of this title. . . .

22
intervene. In response, the government points to several cases

in which courts have found the right to sue for contribution to

be merely a contingency rather than a substantive legal right.

See, e.g., Travelers Indem. Co. v. Dingwell, 884 F.2d 629, 638-41

(1st Cir. 1989); Arizona v. Motorola, Inc., 139 F.R.D. 141;

United States v. Vasi, 22 Chem. Waste Litig. Rep. 218 (N.D. Ohio

1991); United States v. Browning-Ferris Industries, 19 Chem.

Waste Litig. Rep. 436 (M.D. La. 1989); United States v. Wheeling

Disposal Serv., Inc., No. 92-0132-CV-W-1, slip. op. (W.D. Mo.

Oct. 1, 1992). But see United States v. Acton Corp., 131 F.R.D.

431, 433-34 (D.N.J. 1990) ("[T]he . . . defendants are not

asserting only an economic interest; they seek to protect a

statutory right that later may be extinguished.").

With the exception of United States v. Browning-Ferris

Industries, 19 Chem. Waste Litig. Rep. 436 (discussed infra at

note 14), however, none of the cases cited by the government is

analogous because they involve either non-settling parties

attempting to intervene in the consent decree of parties who are

settling, see Acton, 131 F.R.D. at 432-33; Vasi, 22 Chem. Waste

Litig. Rep. at 219; Wheeling Disposal, No. 92-0132-CV-W-1, Slip
Op. at 1-3, or non-interested intervenors asserting the rights of

third parties, see New Orleans Public Service Inc. v. United Gas

Pipe Line Co.("NOPSI"), 732 F.2d 452, 466 (5th Cir.) (en banc)

(city asserting the rights of its power supplier), cert. denied,

sub nom. Morial v. United Gas Pipe Line Co., 469 U.S. 1019

(1984); Dingwell, 884 F.2d at 638-41 (insurer asserting the
rights of its insured). Where the proposed intervenor has not

23
yet settled with the government, it is unclear what, if any,

liability it will have. Thus, any contribution right it might

have depends on the outcome of some future dispute in which the

applicant may, or may not, be assigned a portion of liability. In

that situation, courts have properly found the interest of non-

settlor applicants to be merely contingent.0

Here, the applicants have already settled with the

government. When a PRP settles with the government it accepts a

specific liability. Unlike the interest of an applicant who has

not yet settled, which is contingent in the sense that it may

never ripen, the interest of an applicant who has already settled

is contingent only in the sense that it cannot be valued.

However, the fact that the interest cannot be valued does not

mean it does not exist. The act of settling transforms a PRP's

contribution right from a contingency to a mature, legally

protectable interest.0

0
For its part, an applicant who raises the rights of a third-
party has no interest at all.
0
In United States v. Browning-Ferris Industries, 19 Chem. Waste
Litig. Rep. 436 (M.D. La. 1989), the only other court to rule on
a similar set of facts came to a different conclusion. There, as
here, the applicant had previously signed a consent decree with
the government and maintained that a subsequent consent decree,
if approved, would cut off its right to sue non-settling PRPs for
contribution. Id. at 437. The court held the applicant had no
interest in the litigation because §113(f)(3)(C) subordinates the
rights of all others to the rights of the government. Id. at 439.
We agree that § 113(f)(3)(C) subordinates a settlor's
contribution right to the government's right to recover response
costs, but we disagree with the decision in BFI. Section
113(f)(3)(C) makes the settlors' claim subject to the
government's claim, but it does not affect either the creation or
extinction of the settlors' right to sue for contribution.
Therefore, § 113(f)(3)(C) is not helpful in determining whether
an interest exists.

24
 Our conclusion is in line with the policies behind the

SARA amendments. Congress amended CERCLA because it wanted to

encourage early settlement. See United States v. Cannons

Engineering Corp., 720 F. Supp. 1027, 1048 (D. Mass. 1989),

aff'd, 899 F.2d 79 (1st Cir. 1990); Motorola, 139 F.R.D. at 148

("Congress created CERCLA to encourage settlement, thereby

reducing `the time and expense of enforcement litigation that

necessarily diverts time and money from cleanup and

restoration.'") (citation omitted). SARA, therefore, gives

preference to early settlors by exposing a non-settling PRP to

liability for the rest of the cleanup cost even if that exposure

exceeds the amount the non-settlor's actions added to the overall

cost of the cleanup. Cannons Engineering, 720 F. Supp. at 1040

(the statutory scheme is designed to discourage `free riders' by

imposing a greater share of clean-up costs on those who delay

agreeing to contribute to remedial action.); see also, Daniel R.

Avery, Enforcing Environmental Indemnification Against A Settling

Party Under CERCLA, 23 Seton Hall L. Rev. 872, 886 (1993) ("The

shifting of responsibility for settlement shortfall to not-

settling PRPs therefore provides a real and meaningful incentive

for PRPs to settle, and creates `a corresponding detriment to

their more recalcitrant counterparts.'").

Permitting intervention should encourage settlements. A

PRP, when deciding whether or not to settle, knows the settlement

will cap its liability. See 42 U.S.C. § 9613(f)(2); Motorola,

139 F.R.D. at 145. It also knows it may be able to reduce its

liability by suing a non-settling PRP for contribution. See 42

25
U.S.C. § 9613(f)(1). Given Congress' intent in amending CERCLA,

and the development of the interest requirement under Rule 24(a),

we believe early settlors have a sufficiently protectable

interest in the litigation to permit their intervention.

The government also contends the Trustees' interest is

merely economic and is insufficient to support a motion to

intervene. Some courts have stated a purely economic interest is

insufficient to support a motion to intervene. See NOPSI, 732

F.2d at 464 ("It is plain that something more than an economic

interest is necessary"); Motorola, 139 F.R.D. at 146 (remote

economic interest is not enough to support intervention). But

the Air Products defendants have more than just an economic

interest.

For example, in NOPSI the Court of Appeals for the

Fifth Circuit rejected the City of New Orleans' application to

intervene in a settlement between its power supplier, NOPSI, and

one of NOPSI's suppliers, United Gas Pipe Line Co. Id. at 455.

The Fifth Circuit found the city's interest in the litigation was

only economic because the City's only concern in the litigation

was to ensure its power costs would not be increased by an

adverse decision against NOPSI. Id. at 464-66. By way of

explanation, the court described the type of interest that would

support a motion to intervene, stating:
What is required is that the interest be one
which the substantive law recognizes as
belonging to or being owned by the applicant.
This is reflected by the requirement that the
claim the applicant seeks intervention in
order to assert be a claim as to which the
applicant is the real party in interest. The

26
 real party in interest requirement . . .
`applies to intervenors as well as
plaintiffs' as does also the rule that `a
party has no standing to assert a right if it
is not his own.'"

Id. at 464 (quoting United States v. 936.71 Acres of Land, 418

F.2d 551, 556 (5th Cir. 1969)).

The same is true of Arizona v. Motorola, Inc., 139

F.R.D. 141. There, the U.S. District Court for the District of

Arizona denied the application of Motorola, a defendant in a suit

brought by the State of Arizona and the City of Phoenix, when it

moved to intervene in a second lawsuit brought by the State of

Arizona against the City of Phoenix. Citing the Fifth Circuit's

analysis in NOPSI, the court held Motorola's interest was only

contingent because Motorola was not the real party in interest.

Id. at 144-46.

The rule that emerges from these cases is that a party

has more than an economic interest where it is the real party in

interest and where the applicant would have standing to raise the

claim. NOPSI, 732 F.2d at 464. This rationale favors

intervention here because the Trustees are the true party in

interest with respect to the right to sue non-settlors for

contribution.0 Because we believe the right to seek contribution

0
In order to prove an interest is impeded, the third part of the
intervention test, the applicant must demonstrate "a tangible
threat to [its] legal interest." Brody, 957 F.2d at 1123
(internal quotation marks and citation omitted). We believe that
if, on remand, the district court determines the operations and
maintenance which the Air Products defendants agreed to pay is
addressed in the Alcan consent decree, the Air Products
defendants will have met this burden because § 113(f)(2) makes a
party that settles with the government immune from any future
contribution action "regarding matters addressed in the

27
under § 113(f)(3)(B) is a legally cognizable interest we must

next determine whether that interest is involved in this

litigation.

b. Interest in this litigation.

Under CERCLA, one of the benefits of settling with the

government is that a party becomes immune from contribution

claims "regarding matters addressed in the settlement." 42 U.S.C.

§ 9613(f)(2)(1988).0 It appears the statute allows the

government to immunize a late settlor from an early settlor's

contribution suit by settling with the government. Id.0 It

settlement." 42 U.S.C. § 9613(f)(2)(1988). Since, under those
circumstances, approval of the consent decree might extinguish
the Trustees' right to sue for contribution, this constitutes a
sufficient threat to their interest to permit intervention.
Similarly, we believe the Air Products defendants'
interests are not being adequately represented in this
litigation, the fourth part of the intervention test. An
applicant's rights are not adequately represented where: (1) the
interest of the applicant so diverges from those of the
representative party that the representative party cannot devote
proper attention to the applicant's interest; (2) there is
collusion between the existing parties; or (3) the representative
party is not diligently prosecuting the suit. Brody, 957 F.2d at
1123. We believe that where, as here, neither party represents
the applicant's interests and the existing parties contest
intervention it cannot be said the applicant's interests are
being diligently prosecuted.
0
42 U.S.C. § 9613(f)(2) provides:

A person who has resolved its liability to the
United States or a State in an administrative or
judicially approved settlement shall not be liable for
claims for contribution regarding matters addressed in
the settlement. Such settlement does not discharge any
of the other potentially liable persons unless its
terms so provide, but it reduces the potential
liability of the others by the amount of the
settlement.
0
There is some indication in the legislative history that
Congress intended § 113(f) to protect settlors from contribution

28
would appear that if the Alcan consent decree covered the

operations and maintenance which the Air Products defendants

agreed to pay, the Air Products defendants could not sue for

contribution. See supra note 15. Thus, whether the Air Products

defendants have an interest at stake in this litigation depends

on whether the Alcan consent decree addresses operations and

maintenance.

The district court did not expressly determine whether

operations and maintenance was addressed in the Alcan consent

decree. Instead, it stated, "the Trustees may not intervene as

claims by non-settlors, see H.R. Rep. No. 253, 99th Cong., 1st
Sess., pt. 3, at 19, reprinted in 1986 U.S.C.C.A.N. at 3042
(settlement under § 113(f)(2) "gives the settling party
protection from the contribution claims of other potentially
liable parties . . . ."), while retaining settlors' right to sue
for contribution. It is possible that Congress never considered
the prospect of a late settlor asserting § 113(f)(2)'s protection
against an earlier settlor, but the parties have not pointed to
any authority or legislative history on this point. In view of
the clear and unambiguous language of § 113(f)(2), however, the
statute's plain language must be considered conclusive. Reves,
113 S.Ct. at 1169.
If early settlors have no real opportunity to protect
their contribution right, i.e., no opportunity to intervene, we
expect that PRPs may discount the right to sue for contribution
under § 113(f)(1). This may have the unfortunate effect of
removing an incentive to settle early. Although this result may
prove unsatisfactory, we cannot ignore the clear and unambiguous
language of § 113(f)(2). Any change in the statutory scheme must
come from Congress.
We do not believe § 122(d) -- CERCLA's public comment
provision -- adequately protects an early settlor's contribution
right. The right to intervene gives parties, among other things,
the right to participate in discovery, see Fed. R. Civ. P.
26(b)(1), and the right to appeal an adverse judgment, see Bell
Atlantic Corp. v. Bolger, 2 F.3d 1304, 1307 (3d Cir.
1993)("Generally, `only parties to a lawsuit, or those that
properly become parties, may appeal an adverse judgment.'"
(quoting Marino v. Ortiz, 484 U.S. 301, 304 (1988)(per curiam)),
neither of which accompanies the ability to comment.

29
of right under [Rule] 24(a) since they do not have a substantial

and direct protectable interest in this litigation since the

Trustees' claim to contribution is not involved." Order at 2 n.1.

The district court's statement could be interpreted as an

implicit declaration that operations and maintenance is not

covered by the Alcan consent decree, i.e., the Trustees'

contribution claim is not involved in the Alcan litigation

because operations and maintenance is not a part of the consent

decree.

We are hesitant to impose this interpretation, however,

because neither party who negotiated the Alcan consent decree

supports it. The Alcan defendants vigorously challenge this

interpretation. They claim operations and maintenance is a

matter addressed in the consent decree, and approval of the

decree will immunize them from any future contribution claim

regarding operations and maintenance. Under their reading of the

district court's order, the Air Products defendants have an

interest in the litigation, it is simply not a legally

protectable interest. The government, both in its brief and at

oral argument, was unwilling to give an opinion on the issue.

On these facts, the right to intervene hinges on

whether operations and maintenance is addressed in the Alcan

consent decree. But on the record before us we are unable to

make this determination. Moreover, we are uncertain whether the

district court's decision to deny intervention was based on a

belief that the Trustees' interest was not at stake or that the

Trustees' interest, while at stake, was not sufficiently

30
protectable to warrant intervention. Therefore, we will remand

the case to the district court for the purpose of determining

whether operations and maintenance is an issue addressed in the

Alcan consent decree.0

If on remand the district court determines operations

and maintenance is covered in the Alcan consent decree, we

believe the Air Products defendants have a sufficient interest in

the Alcan litigation to warrant intervention.0 On the other

hand, if the district court finds operations and maintenance is

not covered in the Alcan consent decree we do not believe the Air

Products defendants would have the right to intervene since their

interest would not be at issue in the Alcan litigation. We

express no opinion on their right to seek contribution in a later

action.

III.

Conclusion

For the foregoing reasons, we will vacate the district

court orders denying intervention and approving the Alcan consent

decree. We will also remand the case for the district court to

0
The Alcan consent decree does not expressly address operations
and maintenance. Rather, its covenant not to sue makes
references to section V of the Air Products consent decree, the
section which requires the Air Products defendants to pay
operations and maintenance. On remand the district court may
wish to open the record to new evidence. That decision, however,
is within the discretion of the district judge, and we express no
opinion on it.
0
Although we believe the Air Products defendants' interest would
be protectable for intervention purposes, we do not rule out the
possibility that § 113(f)(2) could extinguish their contribution
right if the Alcan consent decree is approved as written.

31
determine whether operation and maintenance, as covered in the

Air Products consent decree, is addressed by the Alcan consent

decree.

32