(Reuters) - The U.S. territory of Guam will urge the U.S. Supreme Court on Monday to overturn a lower court ruling that has left the island on the hook for the $160 million cleanup of a former U.S. Navy landfill leaking toxic chemicals into the Pacific Ocean.

The high court will hear oral arguments in a challenge by the island territory who says an appellate court got it wrong when it ruled that Guam waited too long to sue the United States to seek contributions for the Ordot Dump's remediation under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) because a previous settlement under a different statute had triggered a CERCLA statute of limitations.

Circuit courts have been split over the question of whether or not a non-CERCLA settlement can give rise to a contribution claim. Four have ruled against, and one in favor.

A group of two dozen states has warned in an amici brief that a victory by the United States would allow it to "dodge liability" and burden states with a disproportionate share of cleanup costs under CERCLA.

Guam sued the United States in Connecticut federal court in 2017, making CERCLA claims to recoup some of the anticipated costs of cleaning up the dump, which the Navy opened during World War II to discard munitions and toxic waste including Agent Orange. Guam took over the landfill when its newly-established civilian government replaced the U.S. military one in 1950.

After a federal district court refused to dismiss the lawsuit, the U.S. Circuit Court for the D.C. Circuit reversed that ruling last year. The court reasoned that Guam could only seek moneys for the cleanup under CERCLA's contribution provision, whose three-year statute of limitations had long expired.

It denied Guam's claim that it could alternatively seek to recoup the cost of cleanup, estimated at $160 million, through another CERCLA mechanism known as the cost-recovery provision. The court reasoned that both methods are "mutually exclusive."

Guam, which is represented by Gregory Garre of Latham & Watkins, has told the high court in filings that the appeals court erred in concluding that a decade-old consent decree settling a lawsuit the United States brought against it under the Clean Water Act (CWA) triggered the three-year statute of limitations.

The 2004 decree settled U.S. allegations that Guam had violated the CWA at the site by discharging pollutants, unpermitted, into federal waters. It required Guam to pay a fine and close the dump.

Pollution at the unlined Ordot Dump contaminated water by leaking toxic chemicals into a river that empties into the ocean until Guam closed the landfill in 2011.

In filings with the high court, Guam argues that the consent decree did not trigger the three-year statute of limitations tied to contribution actions under the Superfund law because it makes no mention of CERCLA liability.

"Therefore, the 2004 CWA Consent Decree could not possibly resolve any CERCLA liability," Guam says.

The United States argues that the appeals court was right when it "adopted the majority view."

The case is Territory of Guam v. United States, U.S. Supreme Court, No. 20-382. For Territory of Guam: Gregory Garre of Latham & Watkins. For United States: Elizabeth Prelogar for U.S. Department of Justice.