Blasland, Bouck & Lee, Inc. v. City of North Miami

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
MARCH 01, 2002
No. 00-14975 THOMAS K. KAHN
CLERK
________________________

D.C. Docket No. 97-01484 CV-DTKH

BLASLAND, BOUCK & LEE, INC.,
a New York Corporation,

Plaintiff-Counter
Defendant-Appellee-
Cross-Appellant,
versus

CITY OF NORTH MIAMI, a
municipal corporation of the State
of Florida,

Defendant-Counter-
Claimant-Appellant-
Cross-Appellee.

__________________________

Appeal from the United States District Court for the
Southern District of Florida
_________________________
(March 1, 2002)

Before CARNES, BARKETT and KRAVITCH, Circuit Judges.
CARNES, Circuit Judge:

The City of North Miami hired Blasland, Bouck and Lee (Blasland), an

environmental engineering firm, to clean up a polluted parcel of land owned by the

City. The City was required to clean up the land by a consent decree it had entered

into with the United States Environmental Protection Agency in settlement of a

lawsuit the EPA had brought against the City under the Comprehensive

Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C.

§§ 9601 et seq. Midway through the cleanup job, the City terminated Blasland’s

contract. Blasland believed that the City had terminated the contract without cause

and had failed to pay all the money owed under the contract; the City believed that

Blasland was not entitled to payment because it had been negligent in doing the

work. This litigation is the fruit of their disagreement.

Blasland sued the City to recover the money owed under their contract,

asserting theories of recovery that included breach of contract and CERCLA cost

recovery. The City counterclaimed for professional negligence, breach of contract,

and CERCLA contribution. All of the claims but the CERCLA claims were tried

to a jury, which found in favor of Blasland on its breach of contract claim and in

favor of the City on its professional negligence (malpractice) and breach of

contract counterclaims. The CERCLA claims were then tried to the court, which

2
ruled in favor of Blasland and against the City. That ruling provided an alternate

ground of support for the damage award the jury had returned for Blasland, but it

did not add to the total award. After the verdicts, the court also ordered that the

City’s counterclaim award be set off by amounts the City had recovered in a

previous CERCLA contribution suit against the companies that had shipped the

waste to the landfill. That setoff reduced the City’s counterclaim award to zero,

and the court entered judgment for Blasland in the full amount awarded it by the

jury, plus prejudgment interest on that amount.

The City appeals, raising three points of error. Blasland cross-appeals,

raising its own four points of error, including one point that requires us to confront

an issue of first impression in this circuit about the availability of defenses to a

CERCLA suit. For the reasons discussed below, we affirm in part, reverse in part,

and remand.

I. BACKGROUND

A. FACTS

In 1970 the City acquired a tract of land along Biscayne Bay. In 1972 it

leased the land to a private company, Munisport Incorporated, for development as

a golf complex, and then in 1974 it amended the lease to allow the site to be used

3
as a landfill. Solid waste was dumped at the Munisport site from 1974 to 1980. In

1983 EPA put the site on its National Priorities List1 of hazardous release sites and

conducted a series of studies that revealed that the buried waste was decomposing

and causing ammonia to leach into the underlying groundwater. That

contaminated groundwater was, in turn, polluting an adjacent mangrove preserve in

Biscayne Bay.

In 1990 the EPA compiled the results of its studies in a Record of Decision

document, developed a cleanup plan for the site, and filed a CERCLA complaint

against the City to force it to clean up the Munisport site. The EPA and the City

settled that suit by a consent decree, under which the City agreed to clean up the

Munisport site according to the EPA plan in return for the EPA’s covenant not to

sue. Attached to the consent decree was a document, called a Scope of Work, that

outlined the EPA’s vision of how the City should study the pollution problem,

design a more detailed cleanup plan, and put that plan into effect. The EPA plan

required the City to: 1) breach a causeway between the adjacent mangrove preserve

and Biscayne Bay, allowing more tidal circulation into the preserve; 2) construct
1
The National Priorities List is a list of polluted sites compiled by the EPA. CERCLA
requires the EPA to compile the list. Placement of a site on the list makes the site eligible to be
cleaned up through the expenditure of money from the Superfund, a fund financed through a
combination of appropriations, EPA fees, and industry taxes, which was also established by
CERCLA. 42 U.S.C. § 9605; see also United States v. Hercules, Inc., 247 F.3d 706, 715 (8th
Cir.), cert. denied, 122 S.Ct. 665 (2001).

4
groundwater-pumping wells at the borders of the landfill to intercept contaminated

water before it entered the preserve, thereby forming a “hydraulic barrier” between

the site and the preserve; 3) construct a treatment system for the intercepted

groundwater; and 4) perform the hydrogeological studies necessary to design the

hydraulic barrier and treatment system.

At roughly the same time as it settled the EPA suit, the City entered into an

agreement with the Florida Department of Environmental Regulation (DER), under

which the Department agreed to reimburse the City for the study and cleanup of the

pollution at the Munisport site, and the City agreed to cleanup the landfill and then

close it. DER’s payment was conditioned on its approving the cleanup work, and

its approval was neither conditioned on nor triggered by EPA approval.

In July 1992 the City hired Blasland, an engineering firm, to do the studies

and coordinate the cleanup work at the site.2 The City-Blasland contract provided

that Blasland’s work must be done to the satisfaction of both EPA and DER, and it

specifically referenced the terms of both the consent decree and the agreement

between the City and DER. By referencing the consent decree, the contract

incorporated the terms of the attached Scope of Work. The Scope of Work laid

2
Blasland had already been working at the site at the time it was hired to coordinate the
cleanup job. When the City released its erstwhile prime contractor from the job, the City moved
Blasland up from sub to prime contractor, or, in CERCLA terminology, the “Response Action
Coordinator.”

5
out a multi-step process for studying the contamination problem and then

designing and implementing a solution. EPA approval was necessary at each step.

The City was required to cure any deficiencies identified by the EPA, which had

authority to order the City to redo any study or test that the EPA judged had not

been properly performed.

The contract between Blasland and the City contained a “pay-when-paid”

clause in recognition of the fact that the City was depending on reimbursement

from DER to pay Blasland for the cleanup work. Under the pay-when-paid clause,

the City only became obligated to pay Blasland on a given invoice after DER had

cleared that invoice and reimbursed the City for it.

Payment for the main cleanup job was to be a fixed price of $1.4 million. In

addition, the contract included an extra-work clause, under which the City could

have Blasland perform additional “out of scope” tasks at the site that were not part

of the EPA cleanup. Payment for those tasks was to be based on Blasland’s normal

hourly rate.

While Blasland was coordinating the CERCLA-cleanup work, it was also

doing other work at the site under the contract’s extra-work clause. In particular,

one extra task Blasland performed was supervising another contractor’s placement

of fill dirt at the site. Unfortunately, that contractor illegally dumped fill into

6
wetlands, causing additional cleanup costs and prompting notices of violation from

federal and state agencies.

The primary work under the contract, however, was the “in scope work” of

cleaning up the Munisport landfill according to the EPA plan. Once the City and

Blasland signed the contract, Blasland began work on that job, with the EPA

providing oversight to assess compliance with the consent decree and its Scope of

Work. The first few phases of the plan went through without a hitch, as Blasland

devised a plan to study the pollution, conducted studies, and began using the

studies to develop a plan for the actual cleanup work. Problems arose, however, in

the design of the planned hydraulic barrier. To build that barrier, Blasland first had

to conduct a “pump test” to determine how many pumps it would need to

effectively prevent water from seeping into the mangrove preserve. Blasland

deficiently performed one of the pump tests,3 and then it used the results of that test

to design of the barrier. The EPA deemed that design unacceptable, and it sent

Blasland and the City a letter identifying deficiencies in the design and instructing

the City to revise its cleanup plan.

3
The district court found as a fact that Blasland’s performance of that test was deficient,
and Blasland has not challenged that factual finding in this appeal.

7
 In June 1995, approximately one month after the EPA instructed the City to

revise the plan, the City terminated Blasland’s contract. The City refused to pay

Blasland for some of its work, which the City claimed had been improperly

invoiced. About three-quarters of the work for which the City refused to pay was

out-of-scope work.

The City then replaced Blasland with another firm, Secor International,

which prepared and implemented its own cleanup plan for the site. In September

1997, the EPA amended its Record of Decision document to one of “No Further

Action,” meaning that no further cleanup work at the site was required of the City,

and in 1999 the site was removed from the National Priorities List.

While it was having the site cleaned up by Blasland, and then by Secor, the

City also sought to recover the costs of that cleanup from those who had caused the

pollution in the first place. In 1992, soon after signing the consent decree with the

EPA, the City brought a CERCLA contribution lawsuit against the former

operators of the landfill, seeking to recover “the past and future costs associated

with the cleanup and remediation” of the site. City of North Miami v. Berger, 828

F. Supp. 401, 403 (E.D. Va. 1993). The City settled that case, receiving from the

defendants $900,000 and title to a tract of land.

8
 Later, in 1995, the City brought a second CERCLA contribution lawsuit, this

time against the towns and companies that had sent their garbage to the landfill.

See City of North Miami v. A&E Constr., Inc., No. 95-0545-CIV-MARCUS (S.D.

Fla.). In that second lawsuit (“the A&E lawsuit”), the City, according to

deposition testimony its manager gave in the present case, sought to recover “as

much money on the cost of the closure and Superfund remediation at the site as we

were legally entitled to under CERCLA . . . and all these other acronyms that are

out there. . . .” The City settled the A&E lawsuit in June 1997 and received just

over one million dollars.

B. PROCEDURAL HISTORY

In May 1997, Blasland sued the City for failure to pay for some of the work

Blasland had performed under the contract. Blasland’s theories of recovery

included breach of contract, account stated, quantum meruit, CERCLA, and

Florida Statutes § 376.313 (a state cleanup-cost-recovery statute). The City

brought counterclaims for professional malpractice, breach of contract, and

CERCLA contribution.

9
 Blasland’s state statutory and contract claims, as well as the City’s contract

and professional malpractice counterclaims, were tried to a jury. The jury found

for Blasland on its contract claim, awarding it roughly $380,000. The jury found

for the City on Blasland’s state statutory claim, and for the City on its counterclaim

that Blasland had breached the contract by committing professional malpractice,

awarding the City $114,000. Of that $114,000 award, $50,000 was for Blasland’s

malpractice in performing its in-scope work, and $64,000 was for Blasland’s

negligence in performing the out-of-scope work of supervising the contractor who

had illegally placed fill in wetlands areas.

The CERCLA claims were then tried separately to the court. The court

ruled in favor of Blasland, finding that it should recover roughly $375,000, but that

amount was included in, instead of being in addition to, the $380,000 awarded to

Blasland by the jury on the contract claim. That $375,000 figure did not include

approximately $110,000 the City had failed to pay Blasland, because the City had

not been reimbursed for that amount by DER. The district court concluded that the

pay-when-paid clause in the contract prevented Blasland from recovering that

$110,000, even under CERCLA.

After the jury and bench trials, Blasland filed a motion to set off against the

City’s counterclaim award the amounts the City had previously received in the

10
Berger and A&E settlements. The district court granted the motion as to the A&E

settlement, and because the amount of the A&E settlement was well in excess of

the City’s counterclaim award, that award was zeroed out. The district court also

granted Blasland’s motion to tax prejudgment interest on the total amount it was

awarded on its claims against the City. Interest came to roughly $176,000,

bringing the total judgment for Blasland to approximately $556,000. After final

judgment was entered, Blasland filed four motions for judgment as a matter of law,

including one raising a statute of limitations argument against the City’s

malpractice counterclaim. The court denied all four motions, denying the statute

of limitations motion on the ground that Blasland had waived it by not raising it at

trial.

The City has appealed both the setoff that eliminated its counterclaim award

and the award of prejudgment interest. Blasland has cross-appealed both the

district court’s failure to grant it a judgment as a matter of law on its statute of

limitations defense to the City’s malpractice counterclaim, and the court’s refusal

to include in Blasland’s CERCLA claim award the $110,000 covered by the

contract’s pay-when-paid clause.4
4
Both the City and Blasland press other issues in this appeal. The City contests an
evidentiary ruling, while Blasland complains about parts of the jury instructions. Blasland also
contends that the district court erred in failing to grant it judgment as a matter of law on the
wetlands-dumping portion of the City’s counterclaim. As to all of these issues, after careful
consideration of the parties’ briefs, their oral arguments, and the record, we affirm the district

11
 II. THE CITY’S APPEAL ISSUES

A. SETOFF

After the conclusion of the trials, Blasland moved to set off against the

City’s counterclaim award the sum the City had recovered when it settled its

previous CERCLA lawsuit against the A&E defendants, who had shipped waste to

the Munisport site while it was being used as a landfill. Specifically, Blasland

sought the setoff under Florida Statutes § 46.015(2), which allows for setoff in

non-tort cases. (The parties agree that Florida law controls the setoff issue.) The

City opposed Blasland’s setoff motion on the ground that the prior settlement

represented a separate recovery for a different injury than the injury the City

suffered as a result of Blasland’s professional negligence. As a separate recovery

for a separate injury, the City argued, it’s a&E settlement proceeds should not be

set off against its counterclaim award. The district court held a hearing and heard

argument on the setoff question before issuing its order.

The A&E record showed that, in response to an interrogatory in that

litigation, the City had included in a list of the damages it sought in that lawsuit all

sums the City had paid to Blasland to implement the EPA cleanup plan, as well as

court without further discussion. See 11th Cir. R. 36-1.

12
the money to be paid to Secor in the future to finish the job.5 Further, during a

deposition in the present case, the City Manager explained that, in the A&E

litigation, the City had sought to recover “as much money on the cost of the closure

and Superfund remediation at the site as we were legally entitled to under

CERCLA . . . and all these other acronyms that are out there. . . .” Finally, at oral

argument on the setoff motion, the City’s lawyer conceded that, in the A&E suit,

the City “was seeking as much money as it could get from any source for all the

money it was obligated to pay out. It was seeking as much as it could possibly get.”

In ruling on the setoff motion, the district court first noted that “there is no

precise way for the court to determine what amount, if any, the City recovered [in

prior litigation] from others for damages attributed by the jury in this case to

[Blasland].” Nonetheless, the district court granted the setoff motion, concluding

that the sums sought by the city in the A&E suit “logically included money paid to

[Blasland].” The setoff wiped out the City’s entire counterclaim award, which

included both the $50,000 jury award on the City’s professional malpractice

counterclaim, and the $64,000 jury award on its separate counterclaim that

5
The City argues at length that the list of costs produced in response to the interrogatory
was merely a compilation of expenditures, not a list of its damages. However, as Blasland points
out, the document was submitted by the City as part of its sworn answers to interrogatories
inquiring about damages. Therefore the district court was justified in treating the list as evidence
of the damages sought by the City in the A&E litigation. At the least, the district court’s finding
in that respect was not clearly erroneous.

13
Blasland’s negligent supervision had led to the contractor’s illegally dumping fill

in protected wetlands.6

The City advances two principal arguments that the district court erred in

granting Blasland’s motion for setoff. In considering those arguments, we review

the district court’s interpretation of the state statute de novo, see Salve Regina Coll.

v. Russell, 499 U.S. 225, 231, 111 S. Ct. 1217, 1221 (1991), and its factual

determinations for clear error, see Fed. R. Civ. P. 52(a). The City’s first argument

against the setoff is that Blasland failed to comply with the plain language of the

Florida setoff statute. The statute provides that:

At trial, if any person shows the court that the plaintiff . . . has delivered
a written release or covenant not to sue to any person in partial
satisfaction of the damages sued for, the court shall set off this amount
from the amount of any judgment to which the plaintiff would be
otherwise entitled at the time of rendering judgment.

Fla. Stat.§ 46.015(2).

The City’s position is that the statute’s plain language requires the party

seeking a setoff to introduce a copy of the release from the prior litigation. It bases

this position on the statutory limitation that a setoff is available only “if any person

shows the court that the plaintiff . . . has delivered a written release or covenant not

6
Blasland in its motion had also sought a setoff of the settlement from the prior Berger
litigation, which was filed in 1992 and settled in 1993. The district court, however, set off only
the A&E settlement amount, and Blasland does not complain about the court’s decision not to set
off the Berger settlement amount.
14
to sue to any person in partial satisfaction of the damages sued for. . . .” Fla. Stat.

§ 46.015(2). Blasland did not introduce the settlement document from the prior

litigation as evidence to support its motion for setoff.7 According to the City,

Blasland’s failure to introduce the settlement documents from the A&E case

violated the technical requirements of the statute, meaning that the district court’s

decision to grant the setoff was error.

However, the plain language of the statute does not contain any requirement

that the party seeking a setoff introduce the written settlement into evidence. The

statute merely says that a setoff is required “if any person shows the court. . .” that

there was a release delivered in a prior lawsuit. Fla Stat. § 46.015(2) (emphasis

added). Introducing the release itself is one way of showing the court it exists, but

not the only way; neither the statute nor Florida case law requires the introduction

of the release itself. In this case, both the fact and amount of the A&E settlement

were before the district court and were undisputed by the parties. This was enough

to satisfy the statute’s “show the court” requirement.

The City’s second argument that the setoff was error is somewhat more

persuasive, but not enough so. The argument is that under Florida law Blasland

was not entitled to a setoff because the City’s recovery against Blasland did not

7
The parties disagree as to whether Blasland was ever given a copy of the settlement
agreement by the City. It does not matter, because, as we explain, Blasland was not required to
introduce the document in order to qualify for a setoff under the Florida statute.
15
duplicate the City’s recovery in the A&E litigation. Because the City’s argument

depends on the interaction of Florida setoff law and CERCLA liability law, before

proceeding with our analysis we first provide some background.

We begin with Florida law. Under it, the purpose of a setoff is to prevent a

party from recovering twice for the same damages. See, e.g., Kingswharf, Ltd. v.

Kranz, 545 So. 2d 276, 278 (Fla. 3d DCA 1989). Therefore, when a party seeks

recovery for the same injury in two separate lawsuits, a defendant in the second

lawsuit is “entitled to a credit for any amount paid to the claimant in settlement for

the injury.” Baudo v. Bon Secours Hosp./ Villa Maria Nursing Ctr., 684 So. 2d

211, 214 (Fla.3d DCA 1996) (quotation and citation omitted). This is true even

when co-defendants are held liable for the same injury under different theories of

liability. See Raben Builders, Inc. v. First Am. Bank & Trust Co., 561 So. 2d

1229, 1230-31 (Fla. 4th DCA 1990). It is not true, however, when the first and

second lawsuits seek recovery for different injuries altogether. See Fla. Corvette

Calipers, Inc. v. Cincinnati Milacron Mktg. Co., 670 So. 2d 1203, 1203 (Fla. 4th

DCA 1996); Gordon v. Rosenberg, 654 So. 2d 643, 645 (Fla. 4th DCA 1995).

Finally, in cases in which a set off of the recovery in prior litigation is in order, the

entire amount of the prior recovery must be setoff against the current award, unless

the release from the prior litigation specifically allocates sums among the various

16
claims being settled. See Dionese v. City of West Palm Beach, 500 So. 2d 1347,

1351 (Fla. 1987) (“The only proper method of ensuring against duplicate

recoveries in an undifferentiated lump sum settlement situation is to set-off the

total settlement funds [from the first case] against the total jury award [in the

second case].”).

Now, some background about CERCLA liability. The City’s prior

lawsuit—the A&E suit—alleged a CERCLA contribution claim. CERCLA’s cost

recovery provisions allow a plaintiff in a contribution lawsuit to recover only costs

of work that is “consistent with the national contingency plan.” 42 U.S.C. §

9607(a)(B); see also Redwing Carriers, Inc. v. Saraland Apts., 94 F.3d 1480, 1496

(11th Cir. 1996). The national contingency plan “is a series of regulations,

promulgated by the [EPA], that establish the procedures and standards for

government and voluntary response actions to hazardous substances . . . .”

Marriott Corp. v. Simkins Indus., 929 F. Supp 396, 403 (S.D. Fla. 1996). Those

regulations provide that a remedial action is consistent with the national

contingency plan if it results in a “CERCLA quality cleanup.” 40 C.F.R. §

300.700(c)(3)(ii). A “CERCLA-quality cleanup,” in turn, is defined as a cleanup

that is “protective of human health and the environment . . . and . . . cost effective.”

55 Fed. Reg. 8666, 8793 (1990). Remedial actions that are “carried out in

17
compliance with the terms of . . . a consent decree entered into pursuant to . . .

CERCLA” are presumed to be “consistent with the” national contingency plan. 40

C.F.R. § 300.700(c)(3)(i).

It is against this backdrop of Florida law and CERCLA that the City’s anti-

setoff argument plays out. The argument begins with the premise that, under

Florida setoff law, duplication between awards exists only if what has been

awarded in the present case rightfully could have been recovered in the prior

litigation. Because the City’s claim against the A&E defendants was a CERCLA

cost-recovery claim, in that lawsuit the City was entitled to recover only the costs

of work that was of “CERCLA quality,” which includes the requirement that the

work have been cost effective. But, says the City, Blasland’s work was negligently

performed (the jury determined that at least some of it was), meaning that it could

not have been “cost effective” and therefore was not “CERCLA-quality.”

Accordingly, the City argues, it was not entitled to recover in the A&E lawsuit the

monies it had paid to Blasland. This means, in turn, that the City’s counterclaim

award against Blasland for its non-“cost effective” work was necessarily an award

for a different injury than the one for which the City received it’s a&E settlement.

In the first lawsuit, against the A&E defendants, the City’s injury for which the

City was seeking compensation was paying for a “CERCLA-quality” clean up of

18
the Munisport site.8 In the second lawsuit, this one involving Blasland, the City’s

injury was the money it lost because of Blasland’s breach of its contractual

promise to do a “CERCLA-quality” cleanup job. Thus, concludes the City,

because its counterclaim award against Blasland was an award for a different

injury than the one for which it was compensated in the A&E suit, there was no

duplication of awards and should have been no setoff.

The City’s argument is a fine polysyllogism, with flawlessly connected

episyllogisms, but its initial premise is flawed. The flawed premise is that, under

Florida setoff law, duplication of awards only exists if what has been awarded in

the present case rightfully could have been recovered in the prior litigation. That is

not Florida law. In deciding whether what the City obtained in the A&E lawsuit

duplicated its counterclaim award against Blasland in this case, it does not matter

whether in the A&E lawsuit the City was entitled to recover under CERCLA the

sums it had paid to Blasland. Instead, what matters is that the City sued for those

sums in the A&E lawsuit, and the defendants in that lawsuit paid the City to settle

it. The Florida setoff statute allows an award to be reduced by a setoff of

compensation “of the damages sued for,” Fla. Stat. § 46.015(2), not just for

damages a party was entitled to recover. Florida law does not limit the availability

8
To be picky about it, the injury for which the City sought compensation was that portion
of the cleanup cost that exceeded the City’s equitable share of the expenses.
19
of a setoff to situations in which the injury compensated in the second lawsuit

duplicates the injury for which the party would have been entitled to compensation

in the first lawsuit had it gone to trial. In a similar vein, the Restatement (Second)

of Torts provides that a prior settlement should be setoff against a second judgment

for the same injury “whether or not the person making the payment [in the prior

suit] is [actually] liable to the injured person.” Restatement (Second) of Torts §

885(3) (1977).

If a plaintiff seeks damages for an injury in a lawsuit, settles that suit, and

then attempts to recover for the same injury in a second lawsuit, under Florida law

the settlement amount from the first lawsuit should be set off against any award in

the second one regardless of what the result in the first lawsuit would have been if

it had been litigated to conclusion on the merits. A contrary rule requiring the

second court to decide whether the party who recovered the money in the first

lawsuit was entitled to it, would undermine some of the advantages of the

settlement. It would force the second court to decide the very issues the parties in

the first case chose to settle rather than litigate to conclusion. The correct approach

under Florida law, in deciding whether awards are duplicative and therefore subject

to setoff, is to determine whether any injury alleged in the first lawsuit is

duplicated by the injury for which an award has been won in the second lawsuit.

20
 Employing this approach, the district court found that the damages the City

had sought in the A&E suit did overlap with its counterclaim award in this lawsuit.

We agree. In the A&E lawsuit, the City included in its list of the damages it was

seeking both the sums it had paid to Blasland and the sums it would have to pay

Secor to fix Blasland’s errors and finish the job. By the time the City compiled

that list of damages, it knew of the deficiencies in Blasland’s work, which is why it

had fired Blasland and hired Secor, and it still included in its CERCLA claim

against the A&E defendants the sums it had paid to Blasland. The City therefore

was alleging in the A&E lawsuit that it could recover under CERCLA the money it

had paid Blasland, and the statements of the City’s representatives in both the A&E

lawsuit and this one confirm that was the City’s position. When, in this lawsuit,

the City was awarded on its counterclaim sums it had paid to Blasland, that award

covered some of the same loss for which it had sought recovery in the first lawsuit.

Blasland therefore was entitled to a setoff of the settlement the City had recovered

in the A&E lawsuit.9

B. PREJUDGMENT INTEREST

9
There is a somewhat different way of looking at this issue, which leads to the same
conclusion. Under Dionese, because the A&E settlement did not allocate sums between the
City’s payments to Blasland and its payments to Secor, the entire A&E settlement amount had to
be setoff against the City’s counterclaim award against Blasland. Dionese, 500 So. 2d at 1351.
This is what the district court did.

21
 After the verdicts, Blasland filed a motion to tax prejudgment interest, which

the court granted over the City’s opposition. The City contends that the district

court should not have awarded any prejudgment interest to Blasland, or in the

alternative, that it awarded too much.

Under Florida law, which the parties agree applies, the general rule in

contract cases is that the prevailing party receives prejudgment interest on its

award, and that is so even if the losing party is the State or one of its subdivisions.

See Broward County v. Finlayson, 555 So. 2d 1211, 1213. (Fla. 1990); see also

Public Health Trust of Dade County v. State, 629 So. 2d 189, 190 (Fla. 3d DCA

1993); City of Cooper City v. PCH Corp., 496 So. 2d 843, 847 (Fla. 4th DCA

1986); Broward County v. Sattler, 400 So. 2d 1031, 1032-33 (Fla. 4th DCA 1981).

When a court is deciding whether to award prejudgment interest, however,

“the law is not absolute and may depend on equitable considerations.” Finlayson,

555 So. 2d at 1213; see also State v. Family Bank of Hallandale, 623 So. 2d 474,

479 (Fla. 1993). One such consideration is that “‘[i]n choosing between innocent

victims . . . it would not be equitable to put the burden of paying interest on the

public.’” Hallandale, 623 So.2d at 479 (quoting Flack v. Graham, 461 So. 2d 82,

84 (Fla. 1984)). Another consideration is that it is inequitable to allow an award of

prejudgment interest when the delay between injury and judgment is the fault of

22
the prevailing party. Id. at 480. An additional one is that it is inequitable to award

prejudgment interest to a party who could have, but failed to, mitigate its damages.

Id. The weight of equitable considerations may foreclose any award of

prejudgment interest at all, see id. at 480; Flack, 461 So. 2d at 84, or may simply

warrant a reduction in the amount to be awarded, see Finlayson, 555 So. 2d at

1213-14 (restricting the time for computing prejudgment interest to the time since

demand for payment was first made, and citing other cases that had done the

same).

The decision whether to refuse or reduce prejudgment interest, that is, how

to balance the equities, is within the trial court’s sound discretion. Accordingly, we

review the decision to grant prejudgment interest only for an abuse of that

discretion. Cf. Parker Towing Co. v. Yazoo River Towing, Inc., 794 F.2d 591, 594

(11th Cir. 1986) (stating, in an admiralty case, that the district court’s decision

whether equitable factors warrant not awarding prejudgment interest is reviewed

by this court for abuse of discretion). When a district court has discretion, there

are usually a range of choices it may make and still be affirmed; there is not only

one right choice for the court to make. See In re Rasbury, 24 F.3d 159, 168 (11th

Cir. 1994). Accordingly, in determining whether a district court has abused its

discretion, we sometimes will affirm even though, had the case been ours to decide

23
in the first instance, we would have reached a different result than the district court.

Id. (pointing out “[t]hat is how an abuse of discretion standard differs from a de

novo standard of review.”).

The City argues that, in deciding to award prejudgment interest to Blasland,

the district court erroneously ignored, or failed to properly weigh, four equitable

factors that point in the City’s favor. The City says those four factors are that: 1)

the City paid substantial sums to Blasland under the contract and only withheld

final payment due to inadequate invoicing by Blasland; 2) the City promptly paid

the jury award after the district court ruled on the CERCLA claims; 3) Florida law

disfavors placing the burden of paying interest on taxpayers; and 4) the City had a

well-founded claim that Blasland had committed malpractice.

As to the four equitable factors the City invokes, the first and second are

makeweights. It does not matter that the City paid Blasland a lot of money if it

paid less than it owed.10 And the City should not get bonus points for promptly

paying the judgment against it, which is no more than it was legally required to do.

As to the third factor – the public policy that “in choosing between innocent

victims” taxpayers should not bear the burden of paying interest, see Flack, 461
10
As to deficiencies in the invoices, the district court specifically found that any
deficiencies in the invoices were remedied by Blasland’s submission of revised invoices, and the
court calculated prejudgment interest only from the time those revised invoices were submitted.
Thus, flaws in the invoices had no effect on the City’s failure to pay during the time the interest-
clock was running.
24
So. 2d at 84 – that factor does not apply here. The City was not an “innocent

victim,” because it breached the contract. That distinguishes this case from

Hallandale, where the court emphasized that the party seeking to recover

prejudgment interest against the State did not have a contract with the State.

Hallandale, 623 So. 2d at 479. In this case, of course, the City and Blasland did

have a contract. Indeed, the dispute between them is primarily a breach of contract

disagreement of the sort for which, as the district court noted, “interest is nothing

more than compensation for loss.” Generally, in breach of contract cases the time

value of money calls for awarding prejudgment interest.

That leaves the City’s fourth, and most persuasive, equitable factor, which is

that it had a well-founded malpractice claim against Blasland. While the city was

not an “innocent party,” Blasland was not entirely innocent either; the jury found it

guilty of professional malpractice. It is true that professional malpractice is not the

same as a failure to mitigate damages or unwarranted procedural delay, which are

two of the equitable factors recognized in Hallandale. 623 So.2d at 480. However,

it is somewhat like them because those two factors focus on the fault of the victim

in either creating the damages or causing delay in recovering them. Blasland’s

professional malpractice in performing some of its work under the contract played

a role in precipitating the City’s breach and in prolonging the City’s refusal to pay

25
for the work that was properly done. For that reason the delay in Blasland’s

getting the money it should have was partially Blasland’s own fault.

Considering all of four factors together with the circumstances of this case,

if we were deciding the matter initially we might deny prejudgment interest to

Blasland altogether. Or we might not. That is not, however, the question before

us. Instead, the question is whether the district court’s decision not to deny

prejudgment interest altogether is within the range of legitimate choices open to

that court given the applicable law and the circumstances of this case. See

Rasbury, 24 F.3d at 168. We conclude that it is.

We turn now to the different question of whether the district court abused its

discretion in not reducing the amount of prejudgment interest. The City argues the

sum on which the court awarded prejudgment interest should have been reduced by

the amount the City was awarded on its counterclaim against Blasland for

professional malpractice, an award that was wiped out by the setoff caused by

payments from a different group of defendants in another case. The district court

noted this argument of the City’s was “not unpersuasive, particularly because

[Blasland] fortuitously escaped the consequences of its own negligence” by virtue

of the setoff. The court nonetheless concluded that prejudgment interest “should

26
rise and fall with the award itself,” and so taxed interest on Blasland’s entire

award.

We agree with the district court that the City’s argument on this point is

strong. It is inequitable for Blasland to have its liability for botching a job

fortuitously erased because of a setoff, and then demand interest on the portion of

its judgment that would have been negated by an award against it but for the

serendipitous setoff. Florida allows a court to take such equities into account, and

neither the district court nor Blasland has suggested any good reason why Blasland

should receive what amounts to interest on the damages its own negligence caused.

If the purpose of prejudgment interest is to provide the prevailing party with

the time value of the money it should have had at the time it was wronged – to

restore the party to an unwronged position – the only money that Blasland

equitably should have had since the time it was wronged was the value of the

award to it minus the value of the City’s counterclaim award against it. Blasland is

equitably entitled to prejudgment interest only on the net wrong it suffered, not the

gross wrong. Setoff law dictates that Blasland recover the full amount of its

award, but the law relating to prejudgment interest cares more for equitable

considerations and does not require that Blasland’s good fortune regarding the

27
setoff be increased by prejudgment interest on the amount of the setoff. Blasland

is not entitled to a windfall on its windfall.

Although awarding prejudgment interest to Blasland was within the

legitimate range of choices open to the district court, awarding prejudgment

interest for the full amount of the award was not. The maximum amount on which

prejudgment interest should have been awarded is the portion of Blasland’s award

it would have recovered if the City’s counterclaim had been subtracted from that

award instead of being erased by the setoff. We will remand so that the district

court can adjust the figures accordingly.

III. BLASLAND’S CROSS-APPEAL ISSUES

A. STATUTE OF LIMITATIONS

Blasland contends that the City’s counterclaim for professional malpractice

was barred by the statute of limitations, and that the district court erred in failing to

grant Blasland’s motion for judgment as a matter of law on that basis.11 Blasland

raised the statute of limitations as an affirmative defense in its answer and included

it in the parties’ pretrial stipulation, but failed to raise that defense at trial or at any

11
Our holding that the district court properly granted a setoff, which zeroed out the City’s
counterclaim award, does not moot this issue. Because of our other holding that Blasland is not
entitled to prejudgment interest to the extent of the City’s counterclaim award, whether the City
should have gotten that award to begin with does matter.
28
time before the entry of final judgment. Instead, after the district court had entered

final judgment, Blasland filed a motion for judgment as a matter of law asserting

the statute of limitations defense. The district court denied the motion, ruling that

Blasland had waived the defense by not raising it earlier.

For a court to be obligated to consider a post-trial motion for judgment as a

matter of law, the moving party must have made a motion for such a judgment

under Rule 50(a) at the close of all the evidence. See SEC v. Adler, 137 F.3d 1325,

1331 n.18 (11th Cir. 1998); see also Austin-Westshore Constr. Co. v. Federated

Dep’t Stores, Inc., 934 F.2d 1217, 1222 (11th Cir. 1991); Fed. R. Civ. P. 50(b). By

failing to make a motion for judgment as a matter of law at the close of all the

evidence, Blasland forfeited its right to have the court consider its post-trial motion

for judgment as a matter of law.

Even though the motion was procedurally improper, however, we may

review the issue if the district court’s failure to hold the City’s counterclaim barred

on statute of limitations grounds was plain error. That is not much of a reprieve

for Blasland, though, because “[p]lain error review is an extremely stringent form

of review.” Farley v. Nationwide Mut. Ins. Co., 197 F.3d 1322, 1329 (11th Cir.

1999). One of the requirements of the plain error test is that the error, if any, must

have been plain under existing law. Id.

29
 Without cluttering up this opinion with an extraneous discussion of the

niceties of Florida statute of limitations law, we focus on one point that is fatal to

Blasland’s argument. Even assuming that the City did bring its counterclaim after

the statute of limitations had run, under Florida law that counterclaim would not be

time-barred if it was a compulsory counterclaim for recoupment of money

damages. See, e.g., Allie v. Ionata, 503 So.2d 1237, 1239 (Fla. 1987); cf. Rybovich

Boat Works, Inc. v. Atkins, 585 So. 2d 270, 271 (Fla. 1991). Blasland does not

contend otherwise. At a minimum, then, to show plain error Blasland would have

to demonstrate that the City’s counterclaim plainly was not compulsory. It has

not done so.

A counterclaim is compulsory when it arises out of the same transaction or

occurrence as the claim it is countering. See Londono v. Turkey Creek, Inc., 609

So. 2d 14, 19 (Fla. 1992). Both Blasland’s claim and the City’s counterclaim arose

out of the same contract, out of related work, performed at the same site, during the

same period of time. Both the claim and counterclaim made allegations about in-

scope work and allegations about out-of-scope work – even if the particular

allegations are different.12 For these reasons, it is not plain that the City’s
12
The particular tasks for which Blasland sought payment under the contract were not
exactly the same tasks that the City claimed Blasland had performed negligently. The district
court recognized this when it said about the CERCLA claims and counterclaim that “[t]he work
for which [Blasland] has not been paid is unrelated to the work forming the basis of the City’s
counterclaim for professional malpractice. . . .” Despite Blasland’s contentions to the contrary,
30
counterclaim was not compulsory. Because the plainness requirement of the plain

error test is not met, we will not decide Blasland’s statute of limitations contention

on the unfiltered merits, i.e., whether the counterclaim was actually compulsory,

which is the issue we would have decided if it had been properly raised and

preserved in the district court.

B. CERCLA AND THE PAY-WHEN-PAID CLAUSE

Blasland’s other cross-appeal contention is that the district court erred in

preventing it from recovering money under CERCLA on the basis of the contract’s

pay-when-paid clause. As we have mentioned, the contract between Blasland and

the City contained what the parties referred to as a “pay-when-paid” clause, which

stated that: “[Blasland] recognizes that CITY’s obligation of payment of

compensation is specifically contingent upon CITY’s receipt of funding from the

D.E.R. for payment of such fees, costs and expenses of [Blasland].” The City was

not reimbursed by DER for approximately $110,000 of the work done by Blasland.

The pay-when-paid clause clearly prevented Blasland from recovering that money

in a suit for breach of the contract, because it specifically and explicitly made the

City’s contractual liability contingent on DER reimbursement. Blasland also
however, the court did not make that observation in the context of conducting a compulsory-
counterclaim analysis, but instead in the context of analyzing whether Blasland’s own
negligence prevented it from recovering under CERCLA. That is a different matter.
31
sought that money, however, in its CERCLA claim against the City. The district

court found that the pay-when-paid clause also prevented Blasland from recovering

the $110,000 under CERCLA. According to the district court, the contractual pay-

when-paid clause provided the City with a valid defense from CERCLA liability to

Blasland to the extent that the City did not receive funding from D.E.R. for that

work. We disagree.

To understand our reasoning, it is necessary to understand the CERCLA

liability scheme. CERCLA provides two possible avenues for a party to recover

monies it spends cleaning up a polluted site. One is a suit for direct cost recovery

based on section 107(a) of the statute. 42 U.S.C. § 9607. Direct cost recovery is

available only to so-called “innocent parties,” that is, “[p]arties who are not

themselves liable or potentially liable for response costs under § 107(a) of

CERCLA . . . .” Redwing Carriers, Inc. v. Saraland Apartments, 94 F.3d 1489,

1513 (11th Cir. 1996). In most instances, the only “innocent party” is the

government agency that is forced to cleanup the land: “the typical section 107(a)

action is brought by a governmental plaintiff that has expended taxpayer dollars in

cleaning up a facility.” Id. It “is possible that a private party may qualify as an

‘innocent’ plaintiff enabling it to bring a cost recovery action based on Section

107(a) alone ,” id., but, in practice, it is rare. Kaufman and Broad-South Bay v.

32
Unisys Corp., 868 F. Supp 1212, 1216 (N.D. Cal. 1994) (“a CERCLA plaintiff,

other than the government, will rarely be ‘innocent’ and thus permitted to sue

under [section 107]”). But see OHM Remediation Services v. Evans Cooperage

Co., 116 F.3d 1574, 1581-82 (5th Cir. 1997) (allowing a private contractor to

proceed as a plaintiff under section 107(a)). In this case, the district court

concluded after the bench trial of the CERCLA claims that Blasland was an

“innocent party” entitled to bring a direct cost recovery action. The City has not

contested that conclusion on appeal, so we will assume for the purpose of

reviewing the district court’s decision that Blasland is an innocent party. See

Allstate Ins. Co. v. Swann, 27 F.3d 1539, 1542 (11th Cir. 1994).

The second avenue of recovery under CERCLA is a contribution suit under

section 113 of the statute. 42 U.S.C. § 9613(f). A section 113 suit allows “guilty”

parties– “responsible parties” in CERCLA-decision jargon – who are liable for

some of the cleanup costs, but have paid more than their fair share of those costs,

to recover the amount of their excess payments from other parties who are also

responsible for the pollution. See Redwing Carriers, 94 F.3d at 1513.

Contribution suits are the only avenue of recovery available to a responsible party,

which under CERCLA includes an owner of a facility where waste was dumped,

an operator of a facility, an “arranger” of the disposal or treatment of hazardous

33
waste at a facility, or an acceptor of waste for transportation or disposal. 42 U.S.C.

§ 9607(a). In this case, the City, as owner of the Munisport site, was a responsible

party.

In either a section 107 direct cost recovery action or a section 113

contribution action, the elements of the plaintiff’s prima facie case are the same.

To establish one, the plaintiff must show: 1) that the site is a CERCLA “facility”;

2) that there was a release or threatened relase of a hazardous substance; 3) which

caused the plaintiff to incur response costs consistent with the National

Contingency Plan; and 4) the defendant is a statutorily liable person, i.e., a

responsible party, as described above. Redwing Carriers, 94 F.3d at 1496-97. In

this case, the district court found that Blasland had proved its prima facie case, and

the City does not contest that determination. The dispute is not over the

requirements of the prima facie case, but instead over the availability of defenses.

Once a prima facie case is proven there are, according to section 107(a) of

the statute, three and only three defenses to liability. Specifically, that section

provides that liability is “[n]otwithstanding any other provision or rule of law, and

subject only to the defenses set forth in subsection (b) of this section.” 42 U.S.C. §

9607(a) (emphasis added). The defenses set forth in subsection (b) are that the

pollution was caused entirely by either: 1) an act of God; 2) an act of war; or 3) an

34
act of a third party unconnected to the defendant. Id. § 9607(b). It is undisputed

that none of the 107(b) defenses apply to this case.

Section 107, read by itself, indicates that the only defenses to a CERCLA

cost recovery action are the three defenses listed in section 107(b). The Sixth

Circuit has said that section 107(b) “set[s] forth the universe of defenses to section

107 liability.” Velsicol Chem. Corp. v. Enenco, Inc., 9 F.3d 524, 530 (6th Cir.

1993). Yet the exclusivity language of section 107(a) is belied by a passel of

defenses explicitly provided in other sections of CERCLA. There are statutes of

limitations, each applicable to a different type of cost recovery claim. 42 U.S.C. §

9613(g). See Smith Land & Imp. Corp. v. Celotex Corp., 851 F.2d 86, 89 (3d Cir.

1988). And various specific sorts of substances are exempted from the coverage of

the statute. See, e.g., 42 U.S.C. § 9601(14) (petroleum exclusion); 42 U.S.C. §

9607(i) (pesticide exclusion). So, too, are secured creditors who might otherwise

be considered “owners” under CERCLA, 42 U.S.C. § 9601(20)(E)(1), and

“innocent landowners,” 42 U.S.C. § 9601(35). And, in contribution suits, the

defendant may escape liability either by virtue of an indemnification or a hold

harmless agreement with the plaintiff, 42 U.S.C. § 9607(e), or by proving it has

already settled its liability to the government, see 42 U.S.C. § 9613(f)(2). If, as

the Sixth Circuit said, section 107(b) sets out the “universe of defenses” to

35
CERCLA liability, then the statute contains alternate universes. The existence of

additional enumerated CERCLA defenses elsewhere in the statute contradicts

section 107(a)’s statement that section 107(b) provides the exclusive set of

defenses to CERCLA. However, the pay-when-paid clause does not fall into any

of these other enumerated defenses either.13

Instead, the pay-when-paid clause at issue in this case is, or at least is closely

akin to, an equitable defense. The City claims that because Blasland agreed that

the City’s contractual liability would be contingent on DER reimbursement,

Blasland should not be allowed to conduct an end-run around the contract using

CERCLA. This sounds like an equitable estoppel argument that runs along the

following lines: Although Blasland did not release the City from CERCLA

liability, it did release the City from contractual liability, and it would be unfair to

allow Blasland to circumvent that release with a CERCLA suit. The City claims its

pay-when-paid defense is really a legal not an equitable argument, and that not
13
The City suggests that its contractual pay-when-paid clause is similar enough to either a
consent decree or release, which are CERCLA-enumerated ways of resolving liability, to be
enforceable under CERCLA. It is true that under CERCLA the government (the usual
“innocent party”) can enter into a consent decree with a polluter and thereafter be bound by that
settlement. It also is true that CERCLA expressly allows responsible parties to allocate liability
among themselves via releases and indemnification agreements. The City claims that, just as
CERCLA makes consent decrees and releases effective to release liability, its contract with
Blasland should be effective to release the City’s liability. But the pay when-paid-clause did not
purport to release CERCLA liability, or any liability other than contractual liability; it speaks of
the City’s obligation to pay “compensation” under the contract not of liability for contribution
under CERCLA. It therefore is not one of the defenses based on release of liability enumerated
in CERCLA itself.
36
enforcing the clause would permit Blasland to retain the benefits of its contract

while disregarding those burdens it now finds undesirable. Legally speaking, this

is incorrect, because Blasland never assumed the “burden” of foregoing CERCLA

recovery; the terms of the clause do not mention CERCLA liability. It is only in

equity that the City’s argument has a good ring to it. Thus the City’s invocation of

the pay-when-paid clause is, or is at least materially similar to, an equitable

defense.

A majority of the circuits that have considered the issue have found that

107(a) bars defendants in CERCLA suits from raising equitable defenses to

liability. See Town of Munster, Ind. v. Sherwin-Williams Co., 27 F.3d 1268, 1270

(7th Cir. 1994) (“CERCLA does not permit equitable defenses to § 107 liability”);

Velsicol, 9 F.3d at 530 (holding that the doctrine of laches may not bar a CERCLA

cost recovery action); Gen. Electric v. Litton Indus. Automation Systems, 920 F.2d

1415, 1418 (8th Cir.1990) (holding that CERCLA does not provide for an unclean

hands defense to liability), cert. denied, 499 U.S. 937, 111 S. Ct. 1390 (1991);

Smith Land, 851 F.2d at 90 (concluding that under CERCLA the doctrine of caveat

emptor is not a defense to liability for contribution).

Courts denying the availability of equitable defenses to CERCLA liability

have done so for two reasons. The first, of course, is the plain language of section

37
107(a) which explicitly limits defenses to those three enumerated in section 107(b).

See, e.g., Veliscol, 9 F.3d at 530; Town of Munster, 27 F.3d at 1271. The second

reason is the Congressional intent behind the statute, which was to have pollution

cleaned up as quickly as possible and to see that the responsible polluters are made

to pay for the cleanup. See Monarch Tile, Inc. v. City of Florence, 212 F.3d 1219,

1221 (11th Cir. 2000) (“CERCLA is a broad, remedial statute animated by a

sweeping purpose to ensure that those responsible for contaminating American soil

shoulder the costs of undoing that environmental damage.”); United States v.

Navistar Intern. Transp. Corp., 152 F.3d 702, 707 n.7 (7th Cir. 1998) (recognizing

that one of CERCLA’s purposes is “prompt clean up of polluted cites”) (citation

omitted)). Recognizing non-enumerated defenses to CERCLA liability would

frustrate Congress’s intent by giving responsible parties an incentive to delay

cleaning up a polluted site, in the hopes of escaping liability and passing the

buck(s) to someone else. For these two reasons, courts have generally rejected

attempts to impress equitable defenses into the ranks of defenses to CERCLA

liability.

We agree that CERCLA’s section 107(a) bars equitable defenses. Section

107(a) imposes liability “[n]otwithstanding any other provision or rule of law, and

subject only to the defenses set forth in subsection (b) of this chapter.” Although

38
this statement may be contradicted by other defenses provided elsewhere in the

statute, that does not mean this Court has the same power as Congress to create

exceptions to section 107(a)’s bar on other defenses based on our own sense of

what would be good policy. The plain language of section 107 indicates that

Congress wanted defenses to suits brought by an innocent party to be narrowly

circumscribed. Recognizing unenumerated equitable defenses would widen too far

the circle of exemption from CERCLA liability, and invite defendants in suits

brought by an innocent party (usually the EPA) to raise such defenses in the hopes

of persuading the court that although the defenses were not enumerated in

CERCLA, they should have been. Therefore, defenses, including equitable ones,

that are not enumerated in the statute cannot thwart the imposition of CERCLA

liability.14

14
We recognize that the Seventh Circuit has speculated in dicta that, while CERCLA does
bar equitable defenses, there still may be viable defenses to CERCLA liability that are not
enumerated either in section 107(b) or anywhere else in the statute. Town of Munster, 27 F.3d at
1272. As the Seventh Circuit explained:
[T]hough we need not (and do not) decide the matter, we doubt seriously that res
judicata, collateral estoppel, accord and satisfaction, and statutes of limitation are
“defenses” as CERCLA employs that term. While the statute does not define the
term, we read the defenses enumerated in §§ 107(b) as addressing the causation
element of the underlying tort and negating the plaintiff's prima facie showing of
liability. A defendant who claims that he already has litigated the same matter
(res judicata), reached agreement on and paid for its damages (accord and
satisfaction), or was not sued within the relevant limitations period does not
contest whether the plaintiff can establish liability under §§ 107; rather he
interposes a legal or statutory shield against having to litigate (or relitigate) the
issue or case.
Id. (citations omitted). In this case, the district court looked to Town of Munster as persuasive
39
 Section 107(a) bars the assertion of all equitable defenses to CERCLA

liability. The pay-when-paid clause is more like an impermissible equitable

defense than any of the permissible defenses enumerated in CERCLA. We

therefore hold that the pay-when-paid clause in the contract between Blasland and

the City was not enforceable under CERCLA to bar Blasland from recovering

under that statute any money owed it by the City for which the City had not been

paid by DER.15 Thus the district court erred in deciding that the pay-when-paid

clause in the contract between Blasland and the City prevented Blasland from

recovering the $110,000 that it was owed by the City, but for which the City had

not been repaid by DER.

This result may seem unfair, but, as the Eighth Circuit has said in discussing

107(a)’s exclusion of non-enumerated defenses: “We realize this [provision] can

and does lead to harsh results, but we are obliged to enforce the law as Congress

authority to guide its analysis of the pay-when-paid clause, and found that the clause was just the
sort of viable “legal shield” defense envisioned by the Town of Munster court. We offer no
views on the persuasiveness of the Seventh Circuit’s musings, however, because they are
irrelevant to this case. The pay-when-paid clause is simply not a defense-in-bar (or “legal
shield”) of the sort that the Seventh Circuit suggested may still be available under CERCLA.
15
Had this been a contribution suit between two responsible parties, the pay-when-paid
clause might well have been considered in deciding a equitable allocation of liability between
Blasland and the City. See Redwing Carriers, 94 F.3d at 1513. We need not decide that,
however, because the district court found Blasland was an innocent party, not within any of
CERCLA’s categories of liable or potentially liable parties, and the City does not challenge that
ruling. Therefore, the district court could not equitably allocate liability between the City, a
responsible party, and Blasland, an innocent party.

40
has written it, unless, of course, such law violates some provision of the

Constitution.” United States v. Mexico Feed and Seed Co., 980 F.2d 478, 484 n.5

(8th Cir. 1992); see also United States v. Price, 577 F. Supp. 1103, 1114 (D. N.J.

1983) (“Though strict liability may impose harsh results on certain defendants, it is

the most equitable solution in view of the alternative–forcing those who bear no

responsibility for causing the damage . . . to shoulder the full cost of the clean

up.”). The result may be particularly harsh in a case like this one, which is not the

normal CERCLA “innocent plaintiff” case. Blasland was not cleaning up the site

with taxpayer funds as a public service; it was doing so for profit, and it did not

even do an entirely competent job. Nonetheless, the result we reach is compelled

by the combination of the district court’s uncontested finding that Blasland was an

innocent party and CERCLA’s provisions on the availability of defenses.

IV. CONCLUSION

The district court’s judgment is AFFIRMED, except in these two respects:

(1) the award of prejudgment interest is REVERSED insofar as it awards interest

that Blasland would not have recovered if there had not been a setoff of the City’s

counterclaim award; and (2) its decision on Blasland’s CERCLA claim is

REVERSED insofar as it relied on the contractual pay-when-paid clause as a

41
ground for denying Blasland recovery of its CERCLA costs from the City. The

case is REMANDED for further proceedings consistent with this opinion.

42