# E Bay Muni Util Dist v. COMM

> Court of Appeals for the D.C. Circuit · May 1, 1998

URL: https://www.frixlaw.com/law-library/cases/184535

## Case

- **Court:** Court of Appeals for the D.C. Circuit
- **Decided:** May 1, 1998
- **Precedential status:** Published
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/184535

## How later opinions describe it (automated extraction)

- declining to infer "control" from non-producer's right to inspect and from pro- ducer's obligation to keep plant in compliance with environ- mental rules

## Opinion text

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 17, 1998 Decided May 1, 1998

No. 97-5079

East Bay Municipal Utility District,

Appellant

v.

United States Department of Commerce, et al.,

Appellees

Appeal from the United States District Court

for the District of Columbia

(No. 93cv01715)

Andrew L. Lipps argued the cause for appellant. With
him on the briefs were Leonard A. Miller and William J.
Mertens.

Joan M. Pepin, Attorney, U.S. Department of Justice,
argued the cause for appellees. With her on the brief were
Lois J. Schiffer, Assistant Attorney General, Edward J. Sha-

waker and Martin F. McDermott, Attorneys. John T. Stahr,
Attorney, entered an appearance.

Before: Williams, Henderson and Garland, Circuit
Judges.

Opinion for the Court filed by Circuit Judge Williams.

Williams, Circuit Judge: The East Bay Municipal Utility
District (the "District") found itself saddled with the costs of
cleaning up hazardous waste from an abandoned mine site,
Penn Mine, in Northern California. As owner of part of the
site, which it acquired in developing its reservoir system,
the District had become responsible for these costs under
CERCLA, the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. s 9601 et seq.
Understandably interested in finding another source of funds
to share the burden, the District claimed that the federal
government was responsible for the waste as an "operator" of
the mine, pursuant to CERCLA s 9607(a)(1), or alternatively
as an "arranger" of the mine's wastes, pursuant to
s 9607(a)(3). Although hands-on control of the mine was
exercised at all relevant times by Eagle Shawmut Mine
("Shawmut"), a partnership that leased the mine from Penn
Mining Company, the District claims that the government
stepped into the "operator" and "arranger" roles through a
variety of measures it employed during and shortly after
World War II, all aimed at assuring the production of zinc, a
critical ingredient in armaments.

The government's activities are set forth in great detail in
the district court opinion, East Bay Mun. Util. Dist. v.
United States Dep't of Commerce, 948 F. Supp. 78 (D.D.C.
1996), and we will return to them later. For now it is enough
to say that its interventions took two fundamental forms.
First, it offered Shawmut incentives, in the form of a pur-
chase agreement at premium prices (prices in excess of
otherwise applicable wartime price controls), accompanied by
a loan to finance the mine's reopening. Second, it lowered
the opportunity costs of operating the mine as a zinc supplier
by restricting the alternative use of both natural and human
resources needed for production. This second class of inter-

ventions included strict limits on the use of mines for produc-
tion of gold and regulations tending to lock workers into the
mining industry generally and to funnel them specifically
towards favored facilities such as Penn Mine.

The United States defended on the grounds that
CERCLA's provision for waiver of the federal government's
sovereign immunity, s 9620(a)(1), precluded considering any
of its regulatory activities--i.e., the price and labor controls,
the restrictions on gold mining--in the calculus of whether it
had been an operator. The government also argued that,
even if its regulatory activities were considered, its involve-
ment in the mine did not place it in the role of an operator or
arranger. On cross-motions for summary judgment based on
jointly agreed facts, the district court rejected the govern-
ment's narrow construction of the waiver but nonetheless
found it not to have become an operator or arranger. 948
F. Supp. at 79. The District appeals the denial of the
operator liability claim.

We affirm. We hold that the waiver of immunity contained
in s 9620(a)(1) is coextensive with the scope of the substan-
tive liability standards of CERCLA. Here, however, the
government's actual involvement did not constitute "oper-
at[ion]" of Penn Mine under either the prevailing "actual
control" or the alternative "authority to control" interpreta-
tion of that term.

* * *

CERCLA's waiver of immunity for the federal government,
located in a section dealing with "Federal facilities," provides
that:

Each department, agency, and instrumentality of the
United States (including the executive, legislative, and
judicial branches of government) shall be subject to, and
comply with, this chapter in the same manner and to the
same extent, both procedurally and substantively, as any
nongovernmental entity, including liability under section
9607 of this title.

42 U.S.C. s 9620(a)(1). In turn, s 9607(a)(2) establishes lia-
bility for all remediation costs resulting from the release of a
hazardous substance, for "any person who at the time of
disposal of any hazardous substance owned or operated any
facility at which such hazardous substances were disposed of."
Thus, CERCLA clearly exposes the federal government to
suit and potential liability for at least some cases in which it
operated a facility that discharged hazardous waste. See
Pennsylvania v. Union Gas Co., 491 U.S. 1, 10 (1989),
overruled on other grounds by Seminole Tribe of Florida v.
Florida, 517 U.S. 44 (1996).

The District contends that s 9620's waiver of sovereign
immunity extends to any instance in which the federal gov-
ernment may be deemed to have operated a facility, regard-
less of whether the government acted in a regulatory or in a
proprietary capacity. The government reads the waiver as
leaving it immune for acts performed in a regulatory capacity.
This alleged residual immunity, of course, is relevant only for
acts that are otherwise "operational," i.e., acts that would
make a private actor an "operator" of a facility. On the
government's theory, Congress has waived immunity under
CERCLA only for those activities which could be performed
by "any nongovernmental entity," but has retained immunity
for such "uniquely and inherently sovereign" activities as
imposing the price and labor regulations which are part of the
basis of the District's operator claim here. It relies on the
general principle that waivers of sovereign immunity are to
be construed narrowly, including waivers likening the govern-
ment's liability to that of a private party. See, e.g., Library
of Congress v. Shaw, 478 U.S. 310, 318 (1986) (saying, in
analysis of clause making the government liable for costs "the
same as a private person," that "we must construe waivers
strictly in favor of the sovereign, and not enlarge the waiver
beyond what the language requires") (internal citations and
punctuation omitted); Laird v. Nelms, 406 U.S. 797 (1972)
(construing FTCA waiver of immunity under which the gov-
ernment, "if a private person, would be liable," not to reach
ultrahazardous strict liability claims, although private party
would be liable under common law).

Because the terms of the government's consent to be sued
in any court "define that court's jurisdiction to entertain the
suit," United States v. Sherwood, 312 U.S. 584, 586 (1941), the
claim of immunity is jurisdictional. Here, however, the waiv-
er clause does not preclude our jurisdiction to entertain the
suit, for as the government acknowledges, and as is plain, the
clause waives the government's immunity at least insofar as
the District's claim is grounded in such typically private
activities as the financing of the mine and the purchasing of
zinc.

Our circuit has sometimes been ready to resolve a suit on
the merits against a party asserting jurisdiction, where the
merits issue was a no-brainer and the jurisdictional issue
quite difficult. See, e.g., Cross-Sound Ferry Services, Inc. v.
I.C.C., 934 F.2d 327, 333 (D.C. Cir. 1991); but see id. at 339
(Thomas, J., concurring) (rejecting majority's choice to dis-
pose of claim on merits rather than to treat threshold juris-
dictional issue). The Supreme Court has recently rejected
that practice. See Steel Company v. Citizens for a Better
Environment, 118 S. Ct. 1003, 1012-16 (1998). We are
uncertain whether Steel Company's holding requires us to
resolve the government's waiver claim first, when, as here,
even the merits evidence that would be excluded under the
government's waiver theory comes nowhere near establishing
liability, and when we are certain of our jurisdiction over the
suit itself. Nonetheless, the more cautious approach is first
to tackle the government's theory on the limits of the immuni-
ty waiver.

It is true that there is a potential ambiguity in
s 9620(a)(1)'s qualifying clause, "in the same manner and to
the same extent ... as any nongovernmental entity." "[A]s
any nongovernmental entity" can either be read broadly, to
deprive the government of any immunity or defense not
enjoyed by a nongovernmental entity that otherwise meets
the criteria of s 9607; or, it can be read narrowly, as the
government contends, so that it is liable for actions that

trigger liability under s 9607--owning or operating a facility,
or arranging for waste disposal--only when it performs those
actions through the "proprietary" powers it shares with pri-
vate entities, such as by exercising contractual or property
rights.

Under the government's view, it would be liable when it
exercised the sort of direct and detailed control that renders
someone an operator through contract and property arrange-
ments but not when it exercised identical control powers
through coercive, administrative measures. As we under-
stand this position, the government would be liable in the
proprietary case even if (as would be typical, we suppose) its
ability to exercise the controls through proprietary means
ultimately flowed from its use of the sovereign tax power to
fund the acquisition of the pertinent property rights or the
fulfillment of its contract obligations.

But the language of s 9620(a)(1) does not welcome the
government's reading. By providing that the government is
liable "in the same manner and to the same extent, both
procedurally and substantively, as any nongovernmental enti-
ty" whenever it satisfies the criteria of s 9607, it does not on
its face suggest a distinction between the exercise of private
(what we are calling "proprietary") and regulatory powers.

Further, CERCLA's strong tendency to focus on the sub-
stance of the government's (or any entity's) activities, rather
than their form, cuts against the government's view. This
comparative disregard for the formal relationships between
the potentially responsible party and the facility is manifest in
the very imposition of liability upon the category of "opera-
tors," whose role is defined functionally, not in terms of "the
legal structure of ownership." See United States v. Kayser-
Roth Corp., Inc., 910 F.2d 24, 26 (1st Cir. 1990); see also
Schiavone v. Pearce, 79 F.3d 248, 253-54 (2d Cir. 1996).1
Similarly, CERCLA excludes from "owner or operator" liabil-
ity a secured creditor who holds "indicia of ownership" pri-

__________
1 The Supreme Court is now considering the criteria for a parent
corporation's liability as "operator" where primary operational con-

marily to protect its security interest but does not "partic-
ipat[e] in the management of a vessel or facility," 42 U.S.C.
s 9601(20)(A); participation in management is in turn defined
as "actually participating in the management or operational
affairs of a vessel or facility." 42 U.S.C. s 9601(20)(E), (F)(i)
(emphasis added), as amended by Asset Conservation, Lend-
er Liability, and Deposit Insurance Protection Act of 1996,
Pub. L. No. 104-208, Tit. II, s 2502(b), 110 Stat. 3009-464;
see also In re Bergsoe Metal Corp., 910 F.2d 668, 672 (9th
Cir. 1990) (interpreting pre-amendment definition to same
effect).

A difficulty with anything other than a straightforward
reading of the immunity waiver is the uncertainty entailed by
the government's reading. As the Supreme Court has noted
in the context of the Federal Tort Claims Act, 28 U.S.C.
s 2680, it is "hard to think of any governmental activity on
the 'operational level,' 2 ... which is 'uniquely governmental,'
in the sense that its kind has not at one time or another been,
or could not conceivably be, privately performed." Indian
Towing Co. v. United States, 350 U.S. 61, 68 (1955). The
converse is also true--it is hard to imagine any act that might
lead to a finding of government "operator" liability that could
not be recharacterized at a higher level of abstraction as a
uniquely governmental activity. For example, in reading
s 9620(a)(1) to provide only a limited waiver of the govern-
ment's immunity, the dissent in FMC Corp. v. United States
Dep't of Commerce, 29 F.3d 833 (3d Cir. 1994), defined the
government's activities at issue there as uniquely governmen-
tal, characterizing them in terms of the ultimate purpose for
which they were performed--"winning a war." Id. at 847.

__________
trol is exercised by a subsidiary. See United States v. Cordova
Chemical Co. of Mich., 113 F.3d 572 (6th Cir. 1997), cert. granted
sub nom. United States v. CPC Int'l, Inc., 118 S. Ct. 621 (1997).

2 The term "operational" is used by the Court here in contradis-
tinction to activities excluded from liability by the "discretionary
function" exception to the FTCA's waiver. See, e.g., United States
v. Gaubert, 499 U.S. 315 (1991).

We do not wish to overstate this point; the special treatment
of state governments' proprietary activities under the nega-
tive commerce clause, see, e.g., South-Central Timber v.
Wunnicke, 467 U.S. 82 (1984), appears to have proven worka-
ble. But the FMC case at least suggests a nontrivial poten-
tial for confusion.

Furthermore, s 9607(d)(1) of the Act confers a defense on
"all persons" "for costs or damages as a result of actions
taken or omitted in the course of rendering care, assistance,
or advice in accordance with the National Contingency Plan,"
but does "not preclude liability for costs or damages as the
result of negligence." As it appears that such activities are
primarily or exclusively governmental, creation of the defense
suggests a congressional assumption that immunization of
specific purely governmental activities required a specific
provision. See 42 U.S.C. s 9605(a)(4); see also 40 CFR
ss 300.110, 300.115(b) (identifying membership of national
and regional "response teams")

Section s 9607(d)(2) affords modest additional light. It
gives state and local governments a partial defense against
claims arising from their emergency remediation efforts, lim-
iting their liability to cases of gross negligence or intentional
misconduct. Both the majority and dissent in FMC reasoned
that this provision bolstered their interpretations. But both
assumed a proposition that was already embedded in Third
Circuit law, that the federal government waiver does not
embrace pollution caused by the federal government's hazard-
ous waste "clean-up" efforts. Compare 29 F.3d at 841 with
id. at 848 n.2. We have never addressed that issue, so our
circuit law contains no such premise, and resolving the issue
would carry us far from this case. Thus the differing analy-
ses voiced in the Third Circuit do not seem relevant in our
context. We think the special exception tends to cut against
the government's theory. CERCLA abrogates state and
local government immunity in terms virtually identical to the
waiver of federal immunity, see 42 U.S.C. s 9601(20)(D), so

the exclusion of liability for emergency remediation efforts
seems to imply a background assumption that the waiver
would otherwise extend to such a typical governmental activi-
ty.

Finally, although the precise meaning of s 9620(a)(1)'s
waiver language was not directly before the Court in Union
Gas Co., 491 U.S. 1, it characterized s 9601(20)(D), the almost
identically worded provision subjecting states to liability, as
"unequivoca[l]" and "unqualified," 491 U.S. at 10, indicating
that the statute's most authoritative reader may not be
inclined to view the waiver as hedged by unwritten excep-
tions.

In reaching this conclusion we do not at all rely on one
argument urged by the District, namely, that the "remedial"
nature of CERCLA warrants broad governmental liability.
Compare FMC, 29 F.3d at 840-41. We have recently ex-
pressed our general doubts about the canon that "remedial
statutes are to be construed liberally," since virtually any
statute is remedial in some respect. See Ober United Travel
Agency, Inc. v. United States Dep't of Labor, 135 F.3d 822,
825 (D.C. Cir. 1998). To paraphrase Judge Bork, who was
referring to the "scarcity" rationale for broadcast regulation:

Since [remedial character] is a universal fact, it can
hardly explain [liberal construction] in one context and
not another. The attempt to use a universal fact as a
distinguishing principle necessarily leads to analytical
confusion.

Telecommunications Research and Action Center v. FCC,
801 F.2d 501, 508 (D.C. Cir. 1986). Moreover, the canon
appears to assume a unidirectional statutory purpose, so that
the "liberal" interpretation would be the one best effecting
that sole purpose. But in fact statutes necessarily reflect a
legislative balancing of competing purposes. See, e.g., Rodri-
guez v. United States, 480 U.S. 522, 525-26 (1987). Here, for
example, it is unclear why shifting part of the clean-up cost
from one pocket (the District) to another (the United States)
is especially "liberal." Of course proliferation of accessible
pockets might help clean up hazardous waste and spread risk;

the federal government's pockets are deep and it is a risk-
spreader without peer. But in some situations the statute
explicitly calls for reimbursement of the United States for
clean-up costs it incurs, see 42 U.S.C. s 9607(a)(A), making
clear the presence of additional purposes. Cf. Edward Hines
Lumber Co. v. Vulcan Materials Co., 861 F.2d 155, 157 (7th
Cir. 1988).

We thus at last reach the question of whether the govern-
ment's acts in relation to Penn Mine, including the regulatory
and the potentially private acts pointed to by the District,
made the government the mine's operator.

* * *

CERCLA defines "owner or operator" at s 9601(20)(A)(ii),
as "in the case of an onshore facility or an offshore facility,
any person owning or operating such facility." As the Sev-
enth Circuit has said of this virtually circular definition, "the
statutory terms have their ordinary meanings rather than
unusual or technical meanings." Hines Lumber Co., 861 F.2d
at 156. Standard dictionary representations of ordinary lan-
guage tell us that to "operate" means to "direct the working
of; to manage, conduct, work (a railway, business, etc.)," or
"to manage and put or keep in operation whether with
personal effort or not." The Oxford English Dictionary (2d
ed. 1989); Webster's Third New International Dictionary
(1967). These match our own understandings. The appear-
ance of "manage" in both definitions is unsurprising, and
conjures up a person or party exercising hands-on control.

The dominant explication of the language, adopted by the
First, Second, Third, Fourth, Sixth, Seventh, Eighth, Ninth,
and Eleventh Circuits, has looked to actual control, seeing an
"operator" as someone actively involved in running the facili-
ty, typically on a day-to-day, managerial basis. See, e.g.,
United States v. Cordova Chemical Co. of Mich., 113 F.3d
572, 579-81 (6th Cir. 1997); Redwing Carriers, Inc. v. Sara-
land Apts., 94 F.3d 1489, 1504-05 (11th Cir. 1996); Schia-
vone, 79 F.3d 248, 253-54 (2d Cir. 1996); United States v.
Gurley, 43 F.3d 1188, 1193 (8th Cir. 1994); John S. Boyd Co.,
Inc. v. Boston Gas Co., 992 F.2d 401, 408 (1st Cir. 1993);
Lansford-Coaldale Joint Water Auth. v. Tonolli Corp., 4 F.3d

1209, 1220-22 (3rd Cir. 1993); Joslyn Manuf. Co. v. T.L.
James & Co., Inc., 893 F.2d 80, 83 (5th Cir. 1990); Hines
Lumber Co., 861 F.2d at 157-59 (7th Cir. 1988); cf. In re
Bergsoe Metal Corp., 910 F.2d 668, 672 (9th Cir. 1990)
(addressing secured creditor provision). But the Fourth Cir-
cuit has opted for a broader interpretation of "operator,"
taking it to include not only those persons with actual control
over a facility, but also "a party who possessed the authority
to abate the damage caused by the disposal of hazardous
substances but who declined to actually exercise that authori-
ty by undertaking efforts at a cleanup." Nurad, Inc. v.
Langrall & Sons, 966 F.2d 837, 842 (4th Cir. 1992). As we
shall explain, we find the District's claim inadequate even
under the authority-to-control test, and thus need not make a
final choice between the two interpretations.

Looking first for the exercise of any managerial control, we
find none. The detailed facts are set forth, as we have said,
in the district court's opinion, and also in the Revised Joint
Statement of the Parties ("R.S."). First, the price restric-
tions imposed by the government on the zinc market, while
intended (in part) to protect its own efforts to acquire zinc for
munitions production, did not amount to operation of any
mining facility. This is not changed by the fact that the
government allowed increments above the base controlled
price for production in excess of the controlled levels. These
steps represent a standard governmental device for reconcil-
ing an interest in keeping prices low (here, to make the war
effort cheaper) with the conflicting interest in generating an
adequate supply. They are, of course, variations on the ways
a private buyer might offer special price advantages to gener-
ate a supply that would otherwise be unavailable, but they do
not bring the government as buyer one whit closer to mana-
gerial control.

Second, the government's regulations governing labor mo-
bility and hours, while they may have made continuation of

operations easier for the mine operators by reducing the
miners' potential rewards in alternative fields, and conceiv-
ably by extracting more work per dollar than would otherwise
have been extractable, did not give the government the kind
of direct managerial or supervisory authority over Penn's
workforce that is a crucial component of operator liability
under the actual control test. See United States v. Vertac
Chemical Corp., 46 F.3d 803, 809 (8th Cir. 1995); Hines
Lumber Co., 861 F.2d at 158; United States v. Dart Indus.,
Inc., 847 F.2d 144, 146 (4th Cir. 1988). Compare FMC, 29
F.3d at 843 (majority asserting government "participat[ion] in
the management and supervision of the labor force") with id.
at 853 (dissent asserting that government merely helped
employees overcome shortages of housing and community
services and assisted the firm in reducing labor strife and
absenteeism).

Third, the government's financial backing of the mine,
which appears to have been made as an advance against
Shawmut's sales, was not sufficient to suggest control. Sec-
tion 9601(20)(A)'s exemption from owner liability for non-
managing security interest holders is again relevant here.
Without "actually participating in the management or opera-
tional affairs of a vessel or facility," s 9601(20)(F)(i)(I), no
mere financial backer--even one holding title to a facility as
security for debt--is liable under CERCLA; see also In re
Bergsoe Metal Corp., 910 F.2d at 671. Mere unsecured
credit, unaccompanied by the "actual" managerial control
needed for a secured creditor, clearly cannot give rise to
operator liability.

Fourth, entering into an output contract does not make the
government an operator. The output contract between the
U.S. and Penn Mine merely reflected the monopsonistic war-
time market and the willingness of the government to pay
substantial premiums in order to meet its metals needs.
Hines Lumber Co. is pertinent again. An operating compa-
ny, itself clearly responsible under CERCLA, sought to bring
into the ring of CERCLA liability the firm that had supplied

it with its key chemical input. The supplier had the contrac-
tual power to inspect the production process for quality
control purposes, since the product was to be sold under that
firm's trademark. But the supplier had no control of the
work, no right to choose employees or to direct their activi-
ties. It thus had no operating control. 861 F.2d at 158.

Whether taken severally or jointly, these factors do not
support the District's claim of actual governmental control.

We now return to the possibility of liability through mere
authority to control. There are two aspects of the relation-
ship between the government and Shawmut from which one
might spin such a theory. First, the War Production Board
had contingent authority to seize any production facilities. In
the early phases of World War II this was limited to facilities
that refused to supply goods or refused to do so at reasonable
prices; authority was later added to seize facilities that failed
to produce because of labor stoppages. See R.S. WW 28-33.
(Here we assume, in favor of the District, the correctness of
its analysis of the controlling statutes.3) But whatever the
scope or statutory validity of an "authority to control" test,
we do not see how (subject to a qualification discussed below)
it could encompass a contingent authority that was never
triggered.

Alternatively one could devise an "authority" claim from
provisions in the purchase-and-loan contract between the

__________
3 In fact the District's reading seems correct. Section 9 of the
Selective Training and Service Act of 1940, Ch. 720, 54 Stat. 892
(1940), imposed on firms an obligation to comply with the Presi-
dent's orders "for such product or material as may be required,"
and authorized him to seize plants that refused to produce or
refused to do so at reasonable prices. This authority was expanded
in 1943 to include authority to seize facilities useful to the war effort
in case of labor stoppage. War Labor Disputes Act, Ch. 144, 57
Stat. 164, s 3 (1943).

United States (in the guise of the Metals Reserve Corpora-
tion) and Shawmut. But that contract granted the govern-
ment only the right "to inspect said Mine and said Mill and to
examine and audit, or cause to have examined and audited,
any of [Shawmut's] books and records." These inspection
rights carried with them no managerial prerogatives or au-
thority. Further, the contract explicitly assigned to Shawmut
full responsibility for the mine's "dewatering," "rehabilita-
tion," "conversion," and "operat[ion]," in conformity with
"good mining and engineering practice." True, the contract
also states that Shawmut's performance of these duties will
be "in conformity with [its] proposals therefor heretofore
submitted to and approved by the War Production Board."
But a contractual right to ensure that a producer follows
some agreed plan is hardly authority to control operations.
Cf. Hines Lumber Co., 861 F.2d at 158 (declining to infer
"control" from non-producer's right to inspect and from pro-
ducer's obligation to keep plant in compliance with environ-
mental rules).

Under either the "authority" or the conventional "actual
control" theory, one might assign CERCLA responsibility on
the basis of duress. Suppose one party, without itself exer-
cising day-to-day control, wielded such power over a hands-on
operator that the operator was merely its pawn. The Mafia,
for example, might exercise such power over a legally inde-
pendent firm, so that the Mafia might properly be held liable
for the firm's acts just as any party is held liable for the acts
of its agents. For our purposes, one might try to ground
such a duress theory in two factors--the War Production
Board's contingent power to seize the mine if it refused to
supply goods (or refused to do so at reasonable prices), or
from the government's order closing gold mines. But an
argument from duress does not work on the record here.

First, consider the gold mining restriction. If a mine could
be used for gold or zinc, and the government forbade gold
mining, there might be some situations where the ban left the

owner no choice but to produce zinc or suffer serious out-of-
pocket losses. But it appears that the Penn Mine had no
potential function as a gold mine, so that the gold-mining ban
did not put Shawmut in any such bind. In fact Shawmut
operated a gold mine elsewhere. Let us suppose, for a
moment, that the gold-mining ban had induced Shawmut to
close this mine. The availability of equipment and miners
released from the gold mine might well have made it easier to
mine zinc at Penn Mine, and conceivably evidence about
market conditions for mining equipment might prove that its
displacement from gold mining placed Shawmut in the kind of
bind we considered for the hypothetical mine that could
produce either gold or zinc. But the District offered no such
evidence. This is no surprise: in fact Shawmut continued to
produce gold at its gold mine through the war. R.S. p 71.
No duress claim can be grounded in the evidently ineffectual
gold-mining ban.

Similarly, one can imagine a party so threatened by the
War Production Board's seizure power as to have been driven
to produce against its will. But no such threat seems ever to
have loomed here. The district court summarized the record
as showing that Shawmut's production efforts were the result
of consensual agreement with the government, 948 F. Supp.
at 90, and the District does not dispute the finding. Indeed,
it appears from the record that Shawmut sought out govern-
ment financing on its own initiative in order to reopen Penn
Mine. This view of the operations as consensual is of course
further confirmed by the government's offers of increased
prices; the carrot prevailed, not the stick. The differences
between the government's actions here, and those of any
buyer who is very determined to elicit a supplier's production,
are not enough to make it an operator under CERCLA.

* * *

The judgment of the district court is

Affirmed.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/184535. Public record. Not legal advice.