Petition for Writ of Certiorari — Columbia Falls Aluminum Company, LLC, Petitioner v. Atlantic Richfield Company

Supreme Court briefJun 12, 2023

Ask Donna

What actually matters in this document.

Text

No. ______

In the

Supreme Court of the United States

COLUMBIA FALLS ALUMINUM CO., LLC,

Petitioner,

ATLANTIC RICHFIELD CO.,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

SAMIR DEGER-SEN

PETER TROMBLY*

LATHAM & WATKINS LLP

1271 Avenue of the

Americas

New York, NY 10020

GREGORY G. GARRE

Counsel of Record

LATHAM & WATKINS LLP

555 Eleventh Street, NW

Suite 1000

Washington, DC 20004

(202) 637-2207

gregory.garre@lw.com

Counsel for Petitioner

QUESTION PRESENTED

Whether a district court’s equitable allocation of

environmental response costs pursuant to Section

113(f)(1) of the Comprehensive Environmental

Response, Compensation, and Liability Act

(CERCLA), 42 U.S.C. § 9613(f)(1), is properly

reviewed on appeal only for clear error, as the Fourth,

Fifth, and Ninth Circuits have held, or for abuse of

discretion, as the First, Second, Third, Sixth,

Seventh, Tenth, and D.C. Circuits have held.

CORPORATE DISCLOSURE STATEMENT

Petitioner Columbia Falls Aluminum Co., LLC is

a wholly owned, indirect subsidiary of Glencore plc, a

publicly held company.

iii

RELATED PROCEEDINGS

The following proceedings are directly related to

this petition:

Columbia Falls Aluminum Co., LLC v. Atlantic

Richfield Co., No. 21-36042, United States Court of

Appeals for the Ninth Circuit, judgment entered

January 31, 2023, rehearing denied March 14, 2023.

Columbia Falls Aluminum Co., LLC v. Atlantic

Richfield Co., No. 9:18-cv-0131, United States District

Court for the District of Montana, findings of fact and

conclusions of law entered, August 25, 2021,

judgment entered September 27, 2021, motion to

amend or correct granted in part, November 23, 2021,

amended judgment entered, November 23, 2021.

TABLE OF CONTENTS

Page

QUESTION PRESENTED ......................................... i

CORPORATE DISCLOSURE STATEMENT ........... ii

RELATED PROCEEDINGS ..................................... iii

TABLE OF AUTHORITIES .................................... vii

OPINIONS BELOW ....................................................1

JURISDICTION ..........................................................1

STATUTORY PROVISIONS INVOLVED .................1

INTRODUCTION .......................................................2

STATEMENT OF THE CASE ....................................4

A. Statutory Background ..................................4

B. Factual Background .....................................6

C. Proceedings Below ........................................9

REASONS FOR GRANTING THE PETITION .......15

The Courts Of Appeals Are Irreconcilably

Divided On The Question Presented ................16

II.

The Question Presented Is Exceptionally

Important ..........................................................23

III. The Ninth Circuit’s Rule Is Wrong ..................27

CONCLUSION ..........................................................36

TABLE OF CONTENTS—Continued

Page

APPENDIX

Opinion of the United States Court of Appeals

for the Ninth Circuit, Columbia Falls

Aluminum Company, LLC v. Atlantic

Richfield Company, No. 21-36042, 2023

WL 1281669 (9th Cir. Jan. 31, 2023), ECF

No. 48-1 ...............................................................1a

Findings of Fact and Conclusions of Law of the

United States District Court for the

District of Montana, Columbia Falls

Aluminum Company, LLC v. Atlantic

Richfield Company, No. CV 18-131, 2021

WL 3769886 (D. Mont. Aug. 25, 2021), ECF

No. 148 ................................................................7a

Order Granting Motion to Amend Judgment in

Limited Part, Columbia Falls Aluminum

Company, LLC v. Atlantic Richfield

Company, No. CV 18-131 (D. Mont. Nov.

23, 2021), ECF No. 167 ...................................154a

Amended

Judgment,

Columbia

Falls

Aluminum Company, LLC v. Atlantic

Richfield Company, No. CV 18-131 (D.

Mont. Nov. 23, 2021), ECF No. 168 ...............157a

Order Denying Petition for Rehearing,

Columbia Falls Aluminum Company,

LLC v. Atlantic Richfield Company,

No. 21-36042 (9th Cir. Mar. 14, 2023), ECF

No. 52 ..............................................................158a

42 U.S.C. § 9607(a)................................................160a

TABLE OF CONTENTS—Continued

Page

42 U.S.C. § 9613(b), (f) ..........................................162a

vii

TABLE OF AUTHORITIES

Page(s)

CASES

Albemarle Paper Co. v. Moody,

422 U.S. 405 (1975) ..............................................30

Alston v. NCAA (In re NCAA Athletic

Grant-in-Aid Cap Antitrust

Litigation),

958 F.3d 1239 (9th Cir. 2020), aff’d,

141 S. Ct. 2141 (2021)..........................................17

American Cyanamid Co. v. Capuano,

381 F.3d 6 (1st Cir. 2004) ..............................18, 20

AmeriPride Services Inc. v. Texas

Eastern Overseas Inc.,

782 F.3d 474 (9th Cir. 2015)................................18

Amphibious Partners, LLC v. Redman,

534 F.3d 1357 (10th Cir. 2008)............................31

ASARCO LLC v. Atlantic Richfield Co.,

LLC,

975 F.3d 859 (9th Cir. 2020), cert.

dismissed, 141 S. Ct. 2843 (2021) .................17, 18

Astoria Federal Savings & Loan

Association v. Solimino,

501 U.S. 104 (1991) ..............................................29

Atlantic Research Corp. v. United

States,

459 F.3d 827 (8th Cir. 2006), aff’d,

551 U.S. 128 (2007) ..............................................26

viii

TABLE OF AUTHORITIES—Continued

Page(s)

Atlantic Richfield Co. v. Christian,

140 S. Ct. 1335 (2020)..........................................25

Baptist Health v. Smith,

536 F.3d 869 (8th Cir. 2008)................................31

Bedford Affiliates v. Sills,

156 F.3d 416 (2d Cir. 1998),

abrogated on other grounds by

Cooper Industries, Inc. v. Aviall

Services, Inc., 543 U.S. 157 (2004) ......................20

Biden v. Texas,

142 S. Ct. 2528 (2022)..........................................30

BladeRoom Group Ltd. v. Emerson

Electric Co.,

20 F.4th 1231 (9th Cir. 2021) ..............................32

Boeing Co. v. Cascade Corp.,

207 F.3d 1177 (9th Cir. 2000)............ 16, 17, 19, 22

Braxton v. United States,

500 U.S. 344 (1991) ..............................................16

Burlington Northern & Santa Fe

Railway Co. v. United States,

556 U.S. 599 (2009) .................................... 2, 19, 20

Burton v. Burton,

21 P. 847 (Cal. 1889) ............................................29

California Public Employees’ Retirement

System v. ANZ Securities, Inc.,

582 U.S. 497 (2017) ..............................................29

TABLE OF AUTHORITIES—Continued

Page(s)

Cooper Industries, Inc. v. Aviall Services,

Inc.,

543 U.S. 157 (2004) ..............................................24

Cooter & Gell v. Hartmarx Corp.,

496 U.S. 384 (1990) ..............................................32

Cozard v. Cozard,

92 P. 935 (Wash. 1907) ........................................29

Curran v. Georgia Loan & Trust Co.,

30 S.E. 886 (Ga. 1898) .........................................29

eBay Inc. v. MercExchange, LLC,

547 U.S. 388 (2006) ..............................................28

Elementis Chromium L.P. v. Coastal

States Petroleum Co.,

450 F.3d 607 (5th Cir. 2006)................................22

Encino Motorcars, LLC v. Navarro,

579 U.S. 211 (2016) ..............................................31

Evans v. Secretary, Department of

Corrections,

703 F.3d 1316 (11th Cir.), cert.

denied, 569 U.S. 1008 (2013) ...............................24

FCC v. Fox Television Stations, Inc.,

556 U.S. 502 (2009) ........................................30, 31

Florida Power Corp. v. Ocklawaha

Reclamation Farms,

112 So. 616 (Fla. 1927) ........................................29

TABLE OF AUTHORITIES—Continued

Page(s)

Goodrich Corp. v. Town of Middlebury,

311 F.3d 154 (2d Cir. 2002), cert.

denied, 539 U.S. 937 (2003) ............... 18, 19, 20, 28

Halo Electronics, Inc. v. Pulse

Electronics, Inc.,

579 U.S. 93 (2016) ................................................31

Jackson v. Los Lunas Community

Program,

880 F.3d 1176 (10th Cir. 2018)............................32

Kenemer v. Kenemer,

26 Ind. 330 (1866) ................................................29

Key Tronic Corp. v. United States,

511 U.S. 809 (1994) ..............................................23

Krupski v. Costa Crociere S.p.A.,

560 U.S. 538 (2010) ..............................................27

Lamps Plus, Inc. v. Varela,

139 S. Ct. 1407 (2019)..........................................27

Lockheed Martin Corp. v. United States,

833 F.3d 225 (D.C. Cir. 2016) .................. 19, 20, 21

Lonchar v. Thomas,

517 U.S. 314 (1996) ..............................................30

McLane Co. v. EEOC,

581 U.S. 72 (2017) ...................................... 4, 25, 31

Metal Jeans, Inc. v. Metal Sport, Inc.,

987 F.3d 1242 (9th Cir. 2021)..............................31

TABLE OF AUTHORITIES—Continued

Page(s)

Minerva Surgical, Inc. v. Hologic, Inc.,

141 S. Ct. 2298 (2021)..........................................29

Monasky v. Taglieri,

140 S. Ct. 719 (2020)............................................25

National Cable & Telecommunications

Association v. Brand X Internet

Services,

545 U.S. 967 (2005) ..............................................31

NCR Corp. v. George A. Whiting Paper

Co.,

768 F.3d 682 (7th Cir. 2014)..........................19, 21

New York v. Solvent Chemical Co.,

453 F. App’x 42 (2d Cir. 2011) .............................21

Niagara Mohawk Power Corp. v.

Chevron USA, Inc.,

596 F.3d 112 (2d Cir. 2010) .................................26

Nikko Materials USA, Inc. v. NavCom

Defense Electronics, Inc.,

291 F. App’x 67 (9th Cir. 2008) ...........................17

Old Chief v. United States,

519 U.S. 172 (1997) ..............................................27

PCS Nitrogen Inc. v. Ashley II of

Charleston LLC,

714 F.3d 161 (4th Cir.) ........................................22

Pierce v. Underwood,

487 U.S. 552 (1988) .................................. 27, 28, 29

xii

TABLE OF AUTHORITIES—Continued

Page(s)

Redwing Carriers, Inc. v. Saraland

Apartments,

94 F.3d 1489 (11th Cir. 1996)..............................20

SEC v. American Trailer Rentals Co.,

379 U.S. 594 (1965) ..............................................24

Smiley v. Citibank (South Dakota),

N.A.,

517 U.S. 735 (1996) ..............................................32

Spectrum Sports, Inc. v. McQuillan,

506 U.S. 447 (1993) ..............................................27

Spinks v. Raison,

139 S.W. 811 (Ky. 1911) ......................................29

State v. Norrell,

53 P. 610 (Utah 1898) ..........................................30

Taylor v. Baldwin,

10 Barb. 626 (N.Y. Gen. Term 1851)...................29

TDY Holdings, LLC v. United States,

885 F.3d 1142 (9th Cir. 2018)..............................18

Territory of Guam v. United States,

141 S. Ct. 1608 (2021)................................ 2, 23, 24

Teva Pharmaceuticals USA, Inc. v.

Sandoz, Inc.,

574 U.S. 318 (2015) ..............................................25

Thompson v. Keohane,

516 U.S. 99 (1995) ................................................24

xiii

TABLE OF AUTHORITIES—Continued

Page(s)

Tosco Corp. v. Koch Industries, Inc.,

216 F.3d 886 (10th Cir. 2000)..............................19

Trinity Industries, Inc. v. Greenlease

Holding Co.,

903 F.3d 333 (3d Cir. 2018) ...........................19, 21

U.S. Bank National Association ex rel.

CWCapital Asset Management LLC

v. Village at Lakeridge, LLC,

138 S. Ct. 960 (2018)................ 3, 25, 28, 31, 32, 33

United States v. Alcan Aluminum

Corp.,

990 F.2d 711 (2d Cir. 1993) .................................17

United States v. Atlantic Research

Corp.,

551 U.S. 128 (2007) .......................... 2, 5, 17, 24, 28

United States v. Brown,

453 F.3d 1024 (8th Cir. 2006)..............................32

United States v. Christensen,

828 F.3d 763 (9th Cir. 2015), as

amended (July 8, 2016), cert. denied,

580 U.S. 1049 (2017) ............................................13

United States v. Consolidation Coal Co.,

345 F.3d 409 (6th Cir. 2003)................................19

United States v. Hercules, Inc.,

247 F.3d 706 (8th Cir.), cert. denied,

534 U.S. 1065 (2001) ............................................19

xiv

TABLE OF AUTHORITIES—Continued

Page(s)

United States v. Oakland Cannabis

Buyers’ Co-operative,

532 U.S. 483 (2001) ..............................................28

United States v. R.W. Meyer, Inc.,

932 F.2d 568 (6th Cir. 1991)................................20

United States v. Shell Oil Co.,

294 F.3d 1045 (9th Cir. 2002), cert.

denied, 537 U.S. 1147 (2003) ...............................17

United States EPA v. Sequa Corp. (In re

Bell Petroleum Services, Inc.),

3 F.3d 889 (5th Cir. 1993)....................................17

Von Duprin LLC v. Major Holdings,

LLC,

12 F.4th 751 (7th Cir. 2021) ................................21

Westport Insurance Co. v. California

Casualty Management Co.,

916 F.3d 769 (9th Cir. 2019)................................31

STATUTES

28 U.S.C. § 1254(1)......................................................1

42 U.S.C. § 9607(a)(1) .................................................5

42 U.S.C. § 9607(a)(2) .................................................5

42 U.S.C. § 9607(a)(3) .................................................5

42 U.S.C. § 9607(a)(4) .................................................5

42 U.S.C. § 9613(b)....................................................25

TABLE OF AUTHORITIES—Continued

Page(s)

42 U.S.C. § 9613(f) ......................................................5

42 U.S.C. § 9613(f)(1) .............................. 2, 5, 6, 27, 33

42 U.S.C. § 9613(f)(3)(b) ..............................................5

OTHER AUTHORITIES

Benjamin N. Cardozo, The Nature of the

Judicial Process (1921) ........................................24

EPA, National Priorities List (NPL)

Sites – by State (Apr. 5, 2023),

https://www.epa.gov/superfund/

national-priorities-list-npl-sites-state ...................4

EPA, Superfund Accomplishments Report

FY 2021 (2022),

https://semspub.epa.gov/work/HQ/

100003048.pdf ........................................................4

EPA, Superfund Remedy Decisions

Estimated to Cost $50 Million or More

(Aug. 11, 2021), https://perma.cc/954F5QUF ......................................................................5

Henry J. Friendly, Indiscretion About

Discretion, 31 Emory L.J. 747 (1982) ..................32

Owen W. Gallogly, Equity’s

Constitutional Source, 132 Yale L.J.

1213 (2023) ...........................................................29

H.R. Rep. No. 99-253, pt. 1 (1985) .............. 5, 6, 23, 26

xvi

TABLE OF AUTHORITIES—Continued

Page(s)

Justin R. Pidot & Dale Ratliff, The

Common Law of Liable Party CERCLA

Claims, 70 Stan. L. Rev. 191 (2018)....................23

Restatement (Second) of Torts (May 2023,

Westlaw)...............................................................28

Sup. Ct. R. 10(a) ........................................................23

Tod I. Zuckerman, et al., Environmental

Liability Allocation: Law & Practice

(Dec. 2022, Westlaw) ...........................................21

PETITION FOR A WRIT OF CERTIORARI

Petitioner Columbia Falls Aluminum Co., LLC

(CFAC), respectfully petitions this Court for a writ of

certiorari to review the judgment of the United States

Court of Appeals for the Ninth Circuit in this case.

OPINIONS BELOW

The opinion of the court of appeals (App. 1a-6a) is

available at 2023 WL 1281669. The court’s order

denying rehearing en banc (App. 158a-59a) is not

reported. The district court’s findings of fact and

conclusions of law (App. 7a-153a) are available at

2021 WL 3769886. The district court’s order granting

in part the motion to amend the judgment (App. 154a56a) is not reported.

JURISDICTION

The court of appeals entered its judgment on

January 31, 2023, and denied rehearing on March 14,

2023. This Court has jurisdiction under 28 U.S.C.

§ 1254(1).

STATUTORY PROVISIONS INVOLVED

Pertinent statutory provisions are reproduced at

App. 160a-63a.

INTRODUCTION

This petition presents a deep and acknowledged

circuit conflict over the standard of review for an

equitable allocation of costs under one of the nation’s

most important environmental statutes.

CERCLA addresses “the serious environmental

and health risks posed by industrial pollution,”

Burlington N. & Santa Fe Ry. Co. v. United States,

556 U.S. 599, 602 (2009), and the “crucial question” of

“[w]ho pays” for remediation, Territory of Guam v.

United States, 141 S. Ct. 1608, 1611 (2021). At the

heart of CERCLA is a contribution regime that

ensures that all parties responsible for pollution at a

Superfund site pay an “equitable” share of

remediation costs. United States v. Atlantic Research

Corp., 551 U.S. 128, 140 (2007); 42 U.S.C. § 9613(f)(1).

But the courts of appeals are intractably divided over

the role of an appellate court in reviewing a district

court’s equitable allocation of cleanup costs. While

seven circuits hold that a district court’s decisions are

subject to the abuse-of-discretion standard that

typically attends a lower court’s discretionary

balancing of equitable factors, three circuits—

including the Ninth Circuit below—hold that such

determinations are subject only to the clear-error

standard normally reserved for factual findings.

That acknowledged conflict warrants this Court’s

review. Applying the clear-error standard to an

equitable balancing decision deprives parties of

meaningful appellate review of an important

determination under CERCLA. Clear-error review in

this context has no basis in Section 113(f)(1)’s text, the

history of appellate practice, or common sense. As

this Court has explained, clear-error review puts “a

serious thumb on the scale” in favor of the district

court’s finding.

U.S. Bank Nat’l Ass’n ex rel.

CWCapital Asset Mgmt. LLC v. Village at Lakeridge,

LLC, 138 S. Ct. 960, 966 (2018). Moreover, applying

the

clear-error

standard

equitable

determination that requires a balancing of factors is

like putting a square peg in a round hole. And it not

only makes no sense, but has real consequences for

the administration of CERCLA. The clear-error

standard insulates allocations that are inconsistent,

irrational, and unexplained, so long as some evidence

supports the allocation. Not surprisingly, then,

equitable allocations are virtually always rubber

stamped under the clear-error standard.

The decision below starkly illustrates how the

clear-error standard can lead to perverse results in

this context. The district court found that Atlantic

Richfield Co. (ARCO) was primarily responsible for

groundwater contamination at the CERCLA site at

issue, and made nearly twice the profits at the Site as

CFAC. Yet the court allocated 65% of CERCLA

response costs to CFAC—and only 35% to ARCO—

reasoning that the parties’ Acquisition Agreement

shifted responsibility for these costs to CFAC. That

ruling not only defied the court’s finding that ARCO

was primarily responsible for contamination at the

Site, but rested on a fatal inconsistency. Earlier in its

opinion, the court expressly found that “neither the

language of the Agreement nor the . . . extrinsic

evidence” showed that the Agreement shifted

CERCLA liability. App. 43a. The court never

acknowledged, much less explained, this flagrant

contradiction. The court also failed to explain other

critical leaps in its decision that defied its own

findings. Yet, reviewing the district court’s “equitable

allocation” only for “clear error,” the Ninth Circuit

perfunctorily affirmed. App. 1a-6a.

This Court regularly intervenes when circuits

divide on the appropriate standard of review. See,

e.g., McLane Co. v. EEOC, 581 U.S. 72, 79 (2017).

Such intervention is needed here. The Ninth Circuit

is home to hundreds of CERCLA sites, more than all

but one other circuit. See EPA, National Priorities

List (NPL) Sites – by State, (Apr. 5, 2023),

https://www.epa.gov/superfund/national-prioritieslist-npl-sites-state.

The circuit with the most

CERCLA sites (the Third, id.) applies the abuse-ofdiscretion standard. The Ninth Circuit’s unsupported

and unworkable clear-error standard for allocation

determinations jeopardizes the proper functioning of

CERCLA’s contribution mechanism, on which billions

of dollars turn. And there is no sensible reason for the

scope of judicial review of cost allocation awards

under CERCLA to vary based simply on geography.

This Court’s intervention is warranted.

STATEMENT OF THE CASE

A. Statutory Background

CERCLA establishes a comprehensive framework

for cleaning up the Nation’s hazardous waste sites.

Cleaning up such Superfund sites is expensive.

Private and public parties have paid or committed to

pay over $48 billion in cleanup costs since CERCLA’s

inception.1 And between October 2017 and July 2021

alone, EPA ordered a final remedy expected to cost

over $50 million at 32 different sites across the

EPA, Superfund Accomplishments Report FY 2021 at 27

(2022), https://semspub.epa.gov/work/HQ/100003048.pdf.

country.2 CERCLA seeks to ensure that liability for

these costly cleanups is fairly allocated among all

responsible parties.

Section 107(a) of CERCLA “defines four categories

of” potentially responsible parties (PRPs), Atlantic

Research, 551 U.S. at 131-32 (citing 42 U.S.C.

§ 9607(a)(1)-(4)), including a site’s past or present

owners or operators, 42 U.S.C. § 9607(a)(1)-(2). In

1986, Congress added an express cause of action for

contribution in CERCLA Section 113(f), 42 U.S.C.

§ 9613(f). Under Section 113(f)(1), “[a]ny person may

seek contribution from any other person who is liable

or potentially liable under [Section 107(a)], during or

following any civil action under [Section 106] or

[Section 107(a)].”

Id. § 9613(f)(1); see also id.

§ 9613(f)(3)(B) (authorizing contribution claims

following settlement with a federal or state

government).

Section 113(f)(1) thus established a PRP’s “right to

collect from others responsible for the same tort after

the [PRP] has paid more than his or her proportionate

share.” Atlantic Research, 551 U.S. at 138 (citation

omitted). This provision was meant to “encourage

private party settlements and cleanups.” H.R. Rep.

No. 99-253, pt. 1 at 80 (1985). By “assur[ing] [PRPs]

that they can seek contribution from other[]” PRPs,

Section 113(f) sought to make “[p]rivate parties . . .

more willing to assume the financial responsibility for

some or all of [a] cleanup.” Id.

Section 113(f)(1) provides that, “[i]n resolving

contribution claims, the court may allocate response

EPA, Superfund Remedy Decisions Estimated to Cost

$50 Million or More (Aug. 11, 2021), https://perma.cc/954F5QUF.

costs among liable parties using such equitable

factors as the court determines are appropriate.” 42

U.S.C. § 9613(f)(1). Congress thus authorized “courts

. . . to resolve such claims on a case-by-case basis,

taking

into

account

relevant

equitable

considerations.” H.R. Rep. No. 99-253, pt. 1 at 80.

B. Factual Background

1. This case concerns the allocation of

potentially more than $50 million of CERCLA

liability for contamination over several decades at an

aluminum smelting facility in Columbia Falls,

Montana. ARCO owned and operated the Site from

1955 to 1985. During that period, ARCO produced

over 3.2 million tons of aluminum and generated $565

million in profits. App. 19a, 147a. This, in turn,

generated hazardous byproducts, including cyanide,

fluoride, and sodium.

Id. at 44a-45a.

These

contaminants seeped into the paste lining the steel

pots in which aluminum was heated, eventually

causing the pots’ lining to swell and fail. Id.

Contaminated “spent potliner” was then removed and

discarded. Id. From 1960 to 1980, ARCO disposed of

129,000 to 135,000 tons of toxic spent potliner in

unlined landfills, including 61,800 tons in the West

Landfill. Id. at 44a-45a, 57a.

As the district court found (and ARCO did not

contest on appeal), ARCO’s spent potliner is the

primary cause of groundwater contamination at the

Site. Id. at 138a-39a. Rainwater at the Site passed

through unlined landfills unimpeded, picking up

cyanide and fluoride present in the spent potliner and

depositing those contaminants into the Site’s

groundwater. Id. at 45a, 57a. Illustrating this

phenomenon, the area immediately downhill from the

unlined West Landfill not surprisingly displays the

highest

concentration

contaminants

groundwater at the Site. Id. at 57a-58a, 72a-75a.

3-ER-496.

2. By 1984, ARCO’s aluminum production

operation was “los[ing] money,” App. 147a-48a, and

ARCO had begun to explore selling or liquidating the

Site, id. at 32a. After struggling to find a buyer,

ARCO sold the Site to CFAC for $1 in 1985—a

transaction that saved ARCO over $7 million in

liquidation costs. Id.

The resulting Acquisition Agreement contained

cross-indemnification provisions. ARCO agreed to

indemnify CFAC “from and against . . . [a]ll damages

. . . caused by or arising out of obligations or liabilities

relating to the Smelter Business resulting from

events or conditions in existence prior to the Closing

Date [September 17, 1985].” Id. at 25a, 127a. CFAC

in turn agreed to indemnify ARCO “from and against

. . . [a]ll damages . . . arising out of . . . obligations or

liabilities, contingent or otherwise relating to the

operation of the Smelter Business after the Closing

Date, other than obligations or liabilities as to which

Seller is obligated to indemnify Buyer.” Id. at 25a.

ARCO was well aware of CERCLA at the time it

entered into the Agreement. By 1985, ARCO was “the

subject of several CERCLA lawsuits” and “deemed” a

PRP “at 24 sites by EPA and/or individual states.” Id.

at 43a. But, significantly, neither indemnification

provision referred to liability under CERCLA.

3. From 1985 to 2008, CFAC produced over 2.8

million tons of aluminum at the Site and gained $279

million in profits—about half of ARCO’s profits at the

Site. Id. at 20a, 147a-49a. But unlike ARCO, CFAC

never placed spent potliner in unlined landfills.

Instead, CFAC disposed of spent potliner in a lined

landfill from 1985 to 1990 and shipped spent potliner

offsite from 1990 onward, which seriously reduced

contamination at the Site. Id. at 45a.

Indeed, compared to ARCO’s disposal of spent

potliner, CFAC’s contribution to contamination was a

drop in the bucket. It was undisputed at trial that

ARCO contributed more than 50 times the amount of

cyanide and fluoride into the Site’s groundwater that

CFAC did. See id. at 76a-77a. Like ARCO before it,

CFAC occasionally disposed of leachate containing

trace amounts of contaminants in the Wet Scrubber

Sludge Pond, a landfill containing an inert substance.

Id. at 58a-60a. CFAC also deposited pot diggings—an

aluminum production byproduct—into the Wet

Scrubber Sludge Pond; but, upon learning that they

contained hazardous material, CFAC promptly

removed the pot diggings under the supervision of

state environmental authorities. Id. at 60a-62a.

CFAC discontinued aluminum production in 2009

and announced the facility’s permanent closure in

2015. Id. at 20a-22a. The same year, EPA invited

ARCO and CFAC, as PRPs for the Site, to “voluntarily

negotiate a consent order” providing for the Site’s

remediation. Id. at 82a-84a (citation omitted). ARCO

did not dispute that it was a PRP but simply “declined

to participate” in settlement talks. Id. at 83a-84a.

Rather than cooperate with environmental

authorities, “ARCO has fought tooth-and-nail” to

avoid paying cleanup costs. Id. at 143a-44a.

CFAC, by contrast, cooperated. It negotiated an

Administrative Order on Consent with EPA that

resolved CFAC’s liability for the costs of a Remedial

Investigation and Feasibility Study for the Site, as

well as future response costs associated with

implementing the agreement. Id. at 83a-84a. EPA

has not yet selected a final remedy for the Site.

C. Proceedings Below

Because ARCO had refused to assume any

responsibility for its contamination of the Site, CFAC

sued ARCO in 2018 for contribution under Section

113(f)(1) and cost recovery under Section 107(a).

After extensive discovery, the case proceeded to a

bench trial on the amount of recoverable costs CFAC

had incurred and the proper allocation of past and

future cleanup costs between ARCO and CFAC.

1. The district court found that ARCO was

“responsible for the lion’s share of the groundwater

contamination” that required remediation, App. 139a;

ARCO had earned more than twice the profits as

CFAC at the Site (almost $300 million more), id. at

147a, 149a; and, whereas CFAC had cooperated with

EPA throughout the remedial process, ARCO had

declined to cooperate with authorities, id. at 143a44a. Nevertheless, the district court ultimately made

an equitable allocation that assigned 65%

responsibility for past and future cleanup costs at the

Site to CFAC and just 35% to ARCO. Id. at 150a.

a. At the outset, the district court addressed

ARCO’s argument that the Acquisition Agreement

itself made CFAC responsible for the costs of ARCO’s

own environmental harm. After carefully reviewing

the text of the Agreement and extrinsic evidence, the

district court categorically rejected this argument,

holding that “neither the language of the Agreement

nor the parties’ intent as distilled from extrinsic

evidence shows that CFAC agreed to forego a

CERCLA claim related to environmental conditions.”

Id. at 43a; see also id. at 30a-31a. That ruling was the

crux of the initial part of the court’s analysis.

b. After determining which costs already

incurred by CFAC were recoverable, the district court

engaged in an equitable allocation under Section

113(f)(1). Id. at 129a-30a. In doing so, the court chose

to apply the so-called “Gore factors,” a common

framework for CERCLA contribution allocations that

considers:

(1) the ability of the parties to

demonstrate that their contribution to a

discharge, release or disposal of a

hazardous waste can be distinguished;

(2) the amount of the hazardous waste

involved;

(3) the degree of toxicity

hazardous waste involved;

the

(4) the degree of involvement by the

parties

the

generation,

transportation, treatment, storage, or

disposal of the hazardous waste;

(5) the degree of care exercised by the

parties with respect to the hazardous

waste concerned, taking into account the

characteristics of such hazardous waste;

and

(6) the degree of cooperation by the

parties with the Federal, State or local

officials to prevent any harm to the

public health or the environment.

See id. at 130a.

Taking the first four Gore factors together, the

district court assessed “the amount and nature of the

hazardous waste disposed of by the parties.” Id. at

138a. The court initially found that ARCO’s disposal

of spent potliner was the “primary driver” of

groundwater contamination. Id. at 138a-40a. But the

court nevertheless concluded that these factors did

not “weigh in favor of either party” because a proposed

final remedial measure—a slurry wall that would

divert the flow of clean groundwater around

contaminated areas—would encompass both the West

Landfill contaminated by ARCO and the Wet

Scrubber Sludge Pond contaminated by both parties.

Id. The court did not explain, however, how a

remedial measure addressing contamination “linked

to” a part of the Site used by both parties could

possibly cancel out ARCO’s responsibility for the

“lion’s share of the groundwater contamination.” Id.

at 139a-40a.

The lack of an explanation was

particularly jarring because the court’s reasoning on

this point was irreconcilable with its other findings:

ARCO’s disposal of spent potliner in the West Landfill

is the reason a remedy for groundwater

contamination is necessary at all. See id. at 80a. And

such a remedy needed to address the Wet Scrubber

Sludge Pond because the contaminated groundwater

beneath it had flowed downhill from the West

Landfill. See supra at 6-7; App. 73a-75a.

The district court held that the fifth and sixth Gore

factors balanced one another out. App. 140a-44a.

c. Finally, the district court considered two

additional factors. First, it revisited the parties’

contractual intent, which it now described as the

“most important” factor governing the allocation of

costs. Id. at 144a. Even though the court had already

held, in no uncertain terms, that the parties did not

intend the Acquisition Agreement to shift CERCLA

costs, the district court inexplicably reversed course

in its allocation decision and invoked the contract to

shift costs to CFAC on the premise that the

Agreement covered “the very environmental

liabilities that are the subject of this case.” Id. at

145a. The court did not acknowledge, much less

attempt to explain, this flat contradiction.

Next, the district court considered the parties’

relative economic benefits. The court found that

ARCO’s aluminum production profits at the Site

doubled CFAC’s. Id. at 147a-49a. And the court

rejected ARCO’s argument that its higher level of

capital investment than CFAC favored allocating

more costs to CFAC, noting that “the facility lacked

value as a going concern.” Id. at 148a. Nevertheless,

the court concluded that this factor was “neutral”

because CFAC bought property for $1 in 1985 that

would be worth an estimated $2.25 million after final

remediation. Id. at 149a-50a. The court did not

acknowledge that at least $50 million in spending

would be necessary before the Site reached a $2.25

million value. See id. at 89a. Nor did the court

explain how a potential economic benefit of $2.25

million could possibly cancel out ARCO’s $280 million

profits advantage.

Based on these allocation factors, the district court

deemed an allocation of 65% of response costs to

CFAC and 35% to ARCO a “fair and equitable”

result—again without any explanation as to how it

reached that relative distribution. Id. at 150a.

2. A panel of the Ninth Circuit affirmed.

a. In accordance with circuit precedent, the

panel reviewed the district court’s 65-35 equitable

allocation in ARCO’s favor only “for clear error.” App.

2a. The panel explained that “‘[a] finding of fact is

clearly erroneous only where it is “(1) illogical,

(2) implausible, or (3) without support in inferences

that may be drawn from the facts in the record.”’” Id.

(quoting United States v. Christensen, 828 F.3d 763,

779 (9th Cir. 2015), as amended (July 8, 2016), cert.

denied, 580 U.S. 1049 (2017)). And, the court noted,

“[i]f there are two reasonable interpretations” of the

underlying “evidence,” then “‘the factfinder’s choice

between them cannot be clearly erroneous.’” Id.

(citation omitted).

b. Applying that standard, the panel overlooked

the district court’s failure to acknowledge or explain

its contradictory contractual rulings. According to the

panel, the district court’s initial ruling that the

contract did not shift CERCLA liabilities “rested

solely” on the district court’s finding that the

Agreement’s text and extrinsic evidence were not

“sufficiently clear” to shift CERCLA liability under

Montana law. Id. at 3a (emphasis added). But this

reasoning is absent from the district court’s decision.

The district court did not find that the parties’ intent

as to CERCLA liability was not clear enough; rather,

it held that “neither the language of the Agreement

nor the parties’ intent as distilled from extrinsic

evidence shows that CFAC agreed to forego a

CERCLA claim” or shift CERCLA liability—period.

Id. at 43a. The panel also declined to grapple with the

district court’s about-face from saying that the

Agreement evinced no intent to shift CERCLA

liability to saying that it was the “most important”

factor for doing just that. Id. at 144a.

c. Next, the panel held that the district court did

not clearly err in assessing “the amount and nature of

hazardous waste” disposed of by the parties. Id. at

4a-5a.

Although ARCO was undisputedly the

“primary contributor” to contamination at the Site, id.

at 139a, the panel found no clear error in the district

court’s determination that this factor was “neutral”

because a slurry wall “was occasioned by both”

ARCO’s decades of spent potliner disposal and

CFAC’s handful of disposals of leachate and pot

diggings in the Wet Scrubber Sludge Pond, id. at 5a.

The panel acknowledged that the district court’s

explanation on this crucial point was lacking,

observing that, “[i]deally, the district court would

have explained more fully each party’s relative

contribution to the need for this joint remedial

measure.” Id. But instead of faulting the district

court for inadequately explaining this key point, the

panel simply held it could not “say based on the

evidence . . . that the district court clearly erred.” Id.

d. Finally, the panel upheld the district court’s

economic-benefit analysis. Id. at 6a. In doing so, the

panel emphasized ARCO’s expenditures on the Site

and the $1 purchase price as “other forms of economic

benefit” CFAC experienced. Id. But the panel did not

acknowledge, much less address, a blatant flaw in the

district court’s reasoning—its lack of explanation as

to how these considerations could possibly offset

ARCO’s $280 million profits advantage or be

reconciled with the court’s finding that CFAC

purchased a practically worthless Site. Instead,

under clear-error review, the panel simply stated that

“the district court did not err in concluding that the

totality of the economic picture was neutral.” Id.

3. CFAC petitioned for rehearing en banc,

arguing that the Ninth Circuit’s clear-error standard

for CERCLA contribution allocations conflicts with

other circuits’ abuse-of-discretion standard, and that

the

district

court’s

internally

inconsistent,

unexplained, and irrational decision could not stand

under the abuse-of-discretion standard. Reh’g Pet. 813, ECF No. 49; see also CA9 Appellant Br. 30 n.6,

ECF No. 20 (noting circuit split). The Ninth Circuit

denied rehearing. App. 158-59a.

REASONS FOR GRANTING THE PETITION

The Ninth Circuit’s decision implicates an

acknowledged circuit conflict on a recurring question

of undeniable importance to federal environmental

law. That conflict interferes with the administration

of CERCLA, and impacts the allocation of billions of

dollars of response costs among responsible parties.

The Ninth Circuit’s clear-error standard cannot be

reconciled with Section 113(f)(1)’s text, historical

practice, or common sense, all of which require review

for abuse of discretion. And this case is an ideal

vehicle to resolve this conflict. The Ninth Circuit

repeatedly invoked the clear-error standard to justify

affirmance of an inconsistent, irrational, and

unexplained allocation that could not withstand

genuine abuse-of-discretion review. The Court should

grant certiorari and resolve the entrenched division

in the circuits on this important question.

I. The Courts Of Appeals Are Irreconcilably

Divided On The Question Presented

An entrenched circuit split exists over the proper

standard of review for a district court’s ultimate

equitable allocation of contribution liability pursuant

to Section 113(f)(1). As this Court has noted many

times, its “primar[y]” responsibility is resolving

circuit conflicts “concerning the meaning of provisions

of federal law.” Braxton v. United States, 500 U.S.

344, 347-48 (1991). The Ninth Circuit’s adherence to

a clear-error standard in this case—over CFAC’s

petition for rehearing asking the Ninth Circuit to

reconsider its position on this issue—reinforces just

such a conflict and demands this Court’s intervention.

1. The decision below reviewed the district

court’s ultimate “equitable allocation . . . for clear

error.” App. 2a. In so doing, the panel followed the

standard adopted in Boeing Co. v. Cascade Corp., 207

F.3d 1177, 1187 (9th Cir. 2000).

There, in a

contribution action between two companies that

contaminated the same aquifer, the Ninth Circuit

observed that Section 113(f)(1)’s “language gives

district courts discretion to decide what factors ought

to be considered, as well as the duty to allocate costs

according to those factors.” Id. But the court

translated this statutory text into two separate

standards of review: (1) abuse of discretion for the

“select[ion]” of factors and (2) clear error for “the

allocation according to those factors.” Id.3 The court

did not ground the latter standard in the law of

contribution or equity practice. Rather, Boeing relied

on a decision holding that the “actual apportionment

of damages is a question of fact” in a cost recovery

action under a different provision—Section 107(a).

Id. at 1187 n.33 (citing U.S. EPA v. Sequa Corp. (In re

Bell Petroleum Servs., Inc.), 3 F.3d 889, 896 (5th Cir.

1993)).4

Clear-error review is sharply limited. As the

Ninth Circuit has itself observed, a finding is not

“clearly erroneous unless it ‘strike[s] [the panel] as

wrong with the force of a five-week-old,

unrefrigerated dead fish.’” Alston v. NCAA (In re

NCAA Athletic Grant-in-Aid Cap Antitrust Litig.),

958 F.3d 1239, 1253 (9th Cir. 2020), aff’d, 141 S. Ct.

2141 (2021) (first alteration in original) (citation

omitted). Under this standard, the Ninth Circuit lets

allocations stand even though a district court’s

“discussion of the nexus between its factual findings

The Ninth Circuit has routinely applied this standard.

See, e.g., United States v. Shell Oil Co., 294 F.3d 1045, 1060 (9th

Cir. 2002), cert. denied, 537 U.S. 1147 (2003); Nikko Materials

USA, Inc. v. NavCom Def. Elecs., Inc., 291 F. App’x 67, 70 (9th

Cir. 2008); ASARCO LLC v. Atlantic Richfield Co., LLC, 975

F.3d 859, 868 (9th Cir. 2020), cert. dismissed, 141 S. Ct. 2843

(2021).

Cost-recovery actions allow a PRP to seek costs it “has

itself incurred” to clean up a site. Atlantic Research, 551 U.S. at

139. Apportionment is a defense to joint and several liability for

cost-recovery damages, and requires proof that a harm is

“capable of division upon a reasonable and rational basis.” In re

Bell Petroleum, 3 F.3d at 895 (citation omitted). Courts view

apportionment as “an intensely factual determination.” United

States v. Alcan Aluminum Corp., 990 F.2d 711, 722 (2d Cir.

1993).

and the [selected equitable] factors” lacks clarity,

ASARCO LLC v. Atlantic Richfield Co., 975 F.3d 859,

869 (9th Cir. 2020) (rejecting ARCO’s challenge to

adequacy of district court’s explanation of allocation),

or, as here, “[i]deally . . . would have [been] explained

more fully,” App. 5a. Rather than looking for such

lapses, the Ninth Circuit’s standard emphasizes

quantity of factual findings. ASARCO, 975 F.3d at

869 (noting that district court’s “ninety-five page

order” included “extensive findings” about a site).

And when a district court identifies some evidence

implicating a PRP, the Ninth Circuit’s clear-error

standard makes any allocation of liability to that PRP

virtually unassailable on appeal.

Underscoring the limited nature of clear-error

review, the Ninth Circuit has apparently never

reversed a district court’s equitable allocation based

on inadequate consideration of a selected factor.5

2. In direct conflict with the Ninth Circuit, seven

other circuits review for abuse of discretion both a

district court’s selection of equitable factors and its

ultimate allocation of contribution liability under

Section 113(f)(1).

American Cyanamid Co. v.

Capuano, 381 F.3d 6, 19 (1st Cir. 2004); Goodrich

Instead, the Ninth Circuit has only reversed an

allocation under Section 113(f)(1) when reviewing the selection

of equitable factors for abuse of discretion—underscoring the

importance of the distinction between the two standards of

review. TDY Holdings, LLC v. United States, 885 F.3d 1142,

1149 (9th Cir. 2018) (reversing allocation of 100% of liability to

one party where district court misinterpreted precedent and

ignored relevant factors); AmeriPride Servs. Inc. v. Texas E.

Overseas Inc., 782 F.3d 474, 489 & n.9 (9th Cir. 2015) (reversing

where district court did not “explain the equitable factors it

considered” or how it arrived at allocation).

Corp. v. Town of Middlebury, 311 F.3d 154, 168-69,

171 (2d Cir. 2002), cert. denied, 539 U.S. 937 (2003);

Trinity Indus., Inc. v. Greenlease Holding Co., 903

F.3d 333, 356 (3d Cir. 2018); United States v.

Consolidation Coal Co., 345 F.3d 409, 412-13, 415

(6th Cir. 2003); NCR Corp. v. George A. Whiting Paper

Co., 768 F.3d 682, 700-01 (7th Cir. 2014); Tosco Corp.

v. Koch Indus., Inc., 216 F.3d 886, 894-95 (10th Cir.

2000); Lockheed Martin Corp. v. United States, 833

F.3d 225, 234-35 (D.C. Cir. 2016).

For example, in Goodrich, the Second Circuit

rejected a PRP’s argument that clear error

constituted the proper standard of review for a

CERCLA contribution allocation. 311 F.3d at 169-70.

Instead of viewing “the allocation of response costs

under § 113(f) [a]s a question of fact,” the Second

Circuit explained that “it is an equitable

determination based on the district court’s

discretionary selection of the appropriate equitable

factors in a given case.” Id. at 170. In so holding, the

Second Circuit expressly rejected the Ninth Circuit’s

decision in Boeing adopting the clear-error standard

as “unpersuasive” because it relied on the

“inapposite” standard for apportionment of damages

in a cost recovery action. Id. at 170 n.16 (citing

Boeing, 207 F.3d at 1187-88 & nn.33, 39).

Indeed, as the Second Circuit has explained, id.,

Boeing’s uncritical use of the apportionment standard

to review equitable allocations conflates “conceptually

distinct” inquiries, United States v. Hercules, Inc., 247

F.3d 706, 718 (8th Cir.), cert. denied, 534 U.S. 1065

(2001). Apportionment “looks to whether defendants

may avoid joint and several liability by establishing a

fixed amount of damage for which they are liable.”

Burlington N. & Santa Fe Ry. Co. v. United States,

556 U.S. 599, 615 n.9 (2009) (citation omitted).

“Equitable considerations play no role in [that]

analysis . . . .” Id. By contrast, equitable allocations

under Section 113(f) “allow . . . PRPs to recover from

each other on the basis of equitable considerations,”

id., and “[d]ivisibility of the harm . . . is not a

prerequisite to making [an] allocation,” Redwing

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

1514 (11th Cir. 1996). Thus, as the Second Circuit

has held, apportionment is “‘an intensely factual

determination’” that should be reviewed for clear

error, and allocation is an “equitable determination”

that should be reviewed for abuse of discretion.

Goodrich, 311 F.3d at 170 & n.16 (citation omitted).

Unlike the Ninth Circuit, the Second Circuit—and

the other courts that apply abuse of discretion—

derive the standard of review from Section 113(f)’s

text and its equitable underpinnings. See, e.g.,

Bedford Affiliates v. Sills, 156 F.3d 416, 429 (2d Cir.

1998), abrogated on other grounds by Cooper Indus.,

Inc. v. Aviall Servs., Inc., 543 U.S. 157 (2004). These

circuits have explained that Section 113(f)(1)’s

“expansive language” invests a district court with

“broad discretion to balance the equities in the

interests of justice.” Id.; see also American Cyanamid,

381 F.3d at 19 (similar). And courts have recognized

that Section 113(f)(1) “invoke[s] the tradition of equity

under which the court must construct a flexible

decree.” United States v. R.W. Meyer, Inc., 932 F.2d

568, 572-73 (6th Cir. 1991); see also Lockheed Martin,

833 F.3d at 234 (similar). Because Section 113(f)(1)

confers equitable discretion, these courts review

contribution allocations for abuse of discretion.

Accordingly, as commentators have recognized, these

circuits reject the Ninth Circuit’s clear-error

standard. See Tod I. Zuckerman, et al., Env’t Liab.

Allocation: L. & Prac. §§ 3:199-200 (Dec. 2022,

Westlaw).

Abuse-of-discretion review still affords significant

deference to the district court’s allocation. See, e.g.,

Lockheed Martin, 833 F.3d at 234-35. But it demands

not only evidentiary support for a cost allocation, but

a cogent explanation as well. Under an abuse-ofdiscretion standard, an allocation cannot stand where

“the reasons the court gave” for an allocation “do not

appear to be consistent with its stated rationale” or it

does “not explain why [a particular] fact was

important” for purposes of cost allocation. NCR, 768

F.3d at 703. And, importantly, even where a district

court writes “an admirably thorough opinion,”

Trinity, 903 F.3d at 347, a court reviewing for abuse

of discretion will “‘not simply “rubber stamp” a

district court’s equitable allocation,’” id. at 360-61

(quoting Lockheed Martin, 833 F.3d at 234). Instead,

when a district court’s allocation violates principles of

reasoned decision-making, these circuits reverse for

abuse of discretion6—a marked contrast from the

See, e.g., New York v. Solvent Chem. Co., 453 F. App’x 42,

49 (2d Cir. 2011) (vacating allocation where district court’s

“finding that the remedy was driven primarily by” chemical

produced by both PRPs “remove[d] the foundation” for allocation

of 94% of costs to one PRP and court offered insufficient

explanation); Trinity, 903 F.3d at 356, 361-62 (vacating

allocation where district court found lack of contractual intent to

allocate CERCLA liability but then awarded equitable deduction

based on contract); NCR, 768 F.3d at 701-03 (vacating allocation

where court did not explain prioritization of parties’ knowledge

as allocation factor or assessment of record evidence); Von

Duprin LLC v. Major Holdings, LLC, 12 F.4th 751, 768 (7th Cir.

2021) (vacating allocation where district court “mentioned

Ninth Circuit’s near universal affirmance rate in

applying its clear-error standard. Supra at 18.

3. Siding with the Ninth Circuit, two other

circuits part with the majority view and review

ultimate allocation determinations only for clear

error. But neither circuit has provided a reasoned

basis for adopting a clear-error standard.

Relying on Ninth Circuit precedent, the Fourth

Circuit reviews “a district court’s choice of factors for

abuse of discretion, and its ultimate allocations of

liability for clear error” in CERCLA contribution

claims. PCS Nitrogen Inc. v. Ashley II of Charleston

LLC, 714 F.3d 161, 186 (4th Cir.) (citing Boeing, 207

F.3d at 1187), cert. denied, 571 U.S. 990 (2013). In

PCS Nitrogen, the Fourth Circuit recognized that

Section 113(f)(1)’s “plain language grants a court

significant discretion to choose which factors to

consider in determining equitable allocation of

liability.” Id. Nevertheless, the court restricted its

bottom-line inquiry to whether “the [district] court

clearly erred by allocating too much liability” to

certain parties. Id.

The Fifth Circuit does the same. Where a party

challenges a percentage allocation of response costs,

the Fifth Circuit treats that determination as a

“finding[] of fact” reviewable “only for clear error.”

Elementis Chromium L.P. v. Coastal States Petroleum

Co., 450 F.3d 607, 613 (5th Cir. 2006).

Unsurprisingly, neither the Fourth or Fifth Circuits

appear to have ever reversed a district court’s decision

on the ground that its assessment of a selected factor

was irrational. These circuits’ adoption of the clearequitable factors that it considered” without explaining how it

allocated costs using those factors).

error standard deepens the divide and underscores

the need for this Court’s guidance.

This entrenched, 7-3 circuit conflict on the

standard of review for equitable allocations under

CERCLA warrants certiorari. Sup. Ct. R. 10(a).

II. The Question Presented Is Exceptionally

Important

The question presented is also frequently

recurring and tremendously important. As Congress

and this Court have recognized, Section 113(f)’s

contribution provision is critical to “encourag[ing]

private party settlements and cleanups.” H.R. Rep.

No. 99-253, pt. 1, at 80 (1985); Key Tronic Corp. v.

United States, 511 U.S. 809, 819 n.13 (1994)

(“CERCLA is designed to encourage private parties to

assume the financial responsibility of cleanup by

allowing them to seek recovery from others.”).

Allocations of CERCLA contribution liability affect

billions of dollars of remediation costs at sites across

the country. This case cleanly presents the question

regarding the appropriate standard for reviewing

such allocations, providing this Court with an

excellent vehicle to resolve the circuit conflict.

1. Section 113(f) is central to resolving “the

crucial question in a remedial action” under

CERCLA: “Who pays?” Territory of Guam v. United

States, 141 S. Ct. 1608, 1611 (2021). At a single

Superfund site, the answer can shift tens or hundreds

of millions of dollars of response costs from one party

to another. See Justin R. Pidot & Dale Ratliff, The

Common Law of Liable Party CERCLA Claims, 70

Stan. L. Rev. 191, 200 & nn.37, 40-41 (2018). These

stakes alone make proper review of allocations under

Section 113(f)(1) undeniably important.

In light of contribution’s crucial role in CERCLA’s

statutory scheme, this Court has repeatedly

intervened to clarify the proper interpretation of

Section 113(f) where circuits have split on its

meaning. See Guam, 141 S. Ct. at 1612 (resolving

circuit split); United States v. Atlantic Research Corp.,

551 U.S. 128, 131-33 (2007) (resolving circuit split);

Cooper Indus., 543 U.S. at 160-61 (granting review

without circuit split). This case presents a welldeveloped conflict regarding a critical feature of the

contribution provision that likewise warrants

resolution by this Court.

2. The fact that this conflict concerns the proper

standard of review further strengthens the case for

certiorari. As this Court has often noted, appellate

review is a vital bulwark against arbitrary decisionmaking, ensuring that “the same question” is not

decided “one way between one set of litigants and the

opposite way between another.” SEC v. American

Trailer Rentals Co., 379 U.S. 594, 620 (1965) (quoting

Benjamin N. Cardozo, The Nature of the Judicial

Process 33 (1921)). “Standards of review are critical

to the business of judging, and can often be outcome

determinative.” Evans v. Secretary, Dep’t of Corr.,

703 F.3d 1316, 1336 (11th Cir.) (en banc) (Jordan, J.,

concurring), cert. denied, 569 U.S. 1008 (2013). The

striking contrast in results under the majority and

minority positions on the standard of review at issue

here illustrates the standard’s importance. Supra at

17-18, 21-22 & n.6.

It is no surprise, then, that this Court routinely

intervenes to establish “uniformity among federal

courts” on standards of review.

Thompson v.

Keohane, 516 U.S. 99, 106 (1995) (resolving circuit

split on standard of review for state courts’ “in

custody” determinations); see also, e.g., Monasky v.

Taglieri, 140 S. Ct. 719, 726 (2020) (child’s habitual

residence under Hague Convention); U.S. Bank Nat’l

Ass’n ex rel. CWCapital Asset Mgmt. LLC v. Village at

Lakeridge, 138 S. Ct. 960, 965 (2018) (bankruptcy

court’s determination of non-statutory insider status);

McLane Co. v. EEOC, 581 U.S. 72, 79 (2017)

(enforcement of EEOC subpoena); Teva Pharms.

USA, Inc. v. Sandoz, Inc., 574 U.S. 318, 324 (2015)

(findings related to patent claim construction).

Here, it is especially “important to clarify the

standard of review” that appellate courts “must

apply” to CERCLA contribution allocations. Teva,

574 U.S. at 324. It is undeniable that, because of this

circuit conflict, some litigants benefit from

meaningful review of allocation decisions, and others

do not. Accordingly, a litigant’s choice between

seeking contribution in the “district in which the

release or damages occurred” or the district “in which

the defendant resides” could potentially alter the

standard of review. 42 U.S.C. § 9613(b). This Court’s

intervention is needed to ensure that the standard of

review for CERCLA contribution allocations does not

turn on geographic happenstance.

3. This conflict also has major ramifications for

the administration of CERCLA, because it impedes

the effective negotiation of settlements. As this Court

recently observed, “[s]ettlements are the heart of the

Superfund statute.”

Atlantic Richfield Co. v.

Christian, 140 S. Ct. 1335, 1355 (2020). Much of the

“cleanup work currently underway” is performed

pursuant to settlement agreements. Id. And EPA

prefers to proceed by settlement “instead of issuing an

order or paying for [a cleanup] and recovering the

cleanup costs later.” Id. (citation omitted).

Because CERCLA does not function without

settlements, “[c]ontribution is crucial to CERCLA’s

regulatory scheme.”

Atlantic Research Corp. v.

United States, 459 F.3d 827, 836 (8th Cir. 2006), aff’d,

551 U.S. 128 (2007). As courts have recognized, “the

statutory right to contribution in § 113(f)” exists “in

part to encourage settlements and further CERCLA’s

purpose as an impetus to efficient resolution of

environmental hazards.” Niagara Mohawk Power

Corp. v. Chevron USA, Inc., 596 F.3d 112, 138 (2d Cir.

2010). Indeed, Congress expressly anticipated that

“assur[ing]” parties who take on “financial

responsibility for some or all of the cleanup” that

“they can seek contribution from others” would

“encourage private party settlements and cleanups.”

H.R. Rep. No. 99-253, pt. 1, at 80. In other words, the

promise of fair contribution in the future makes PRPs

more inclined to settle now.

For PRPs to have confidence in CERCLA’s

contribution mechanism, however, appellate review

must provide a meaningful backstop against

irrational or unexplained allocations of liability. The

requirement for reasoned decision-making that the

abuse-of-discretion standard demands thus promotes

CERCLA’s goals of remediating contaminated sites

and making responsible parties pay, without

protracted litigation. At the same time, permitting

diverging interpretations of CERCLA’s contribution

provision to alter settlement incentives based on the

happenstance of geography is untenable.

4. This case is an excellent vehicle to address the

circuit conflict. The panel below expressly invoked

the Ninth Circuit’s clear-error standard in deciding

this appeal, and the Ninth Circuit declined to revisit

that standard by denying rehearing en banc.

Moreover, as explained below, the blatant

inconsistency and unexplained leaps at the heart of

the district court’s decision bear the hallmarks of an

abuse of discretion. Yet, under the clear-error

standard, the Ninth Circuit overlooked those flaws

and rubber stamped the district court’s allocation

decision in a summary opinion. This case thus

illustrates precisely why the standard of review

matters in reviewing equitable allocations under

CERCLA.7

III. The Ninth Circuit’s Rule Is Wrong

The Ninth Circuit’s position that equitable

allocations under CERCLA are reviewed only for clear

error also is indefensible on the merits.

1. The inquiry into the appropriate standard of

review starts with “the language and structure of the

governing statute.” Pierce v. Underwood, 487 U.S.

552, 559 (1988). Section 113(f)(1) provides that, “[i]n

resolving contribution claims, the court may allocate

response costs among liable parties using such

equitable factors as the court determines are

appropriate.” 42 U.S.C. § 9613(f)(1). This is an

“explicit statutory command” to exercise discretion,

The fact that the decision below is unpublished poses no

barrier to review because it applies a “line of” Ninth Circuit

precedent that “conflicts with holdings of courts in other

Circuits.” Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 453

(1993) (reversing unpublished opinion); see also, e.g., Lamps

Plus, Inc. v. Varela, 139 S. Ct. 1407, 1413 (2019) (granting

certiorari to reverse unpublished opinion implicating “a conflict

among the Courts of Appeals”); Krupski v. Costa Crociere S.p.A.,

560 U.S. 538, 546 (2010) (same); Old Chief v. United States, 519

U.S. 172, 177 (1997) (same). CFAC pointed out this circuit

conflict in both its Ninth Circuit merits brief and its rehearing

petition.

which alone counsels strongly in favor of review for

abuse of that discretion. Pierce, 487 U.S. at 558.

Once the court decides the relevant factors, the

balancing of those factors requires the exercise of a

district court’s discretionary judgment. It is wellsettled that “an act of equitable discretion by the

district court” becomes “reviewable on appeal for

abuse of discretion.” eBay Inc. v. MercExchange, LLC,

547 U.S. 388, 391 (2006). This rule controls here.

“Contribution is a remedy that developed in equity,”

Restatement (Second) of Torts § 886A(2) cmt. c (May

2023, Westlaw), and Section 113(f)(1) incorporates

contribution’s “traditional” definition, Atlantic

Research, 551 U.S. at 138. To determine a tortfeasor’s

equitable share of liability, the district court must

exercise its “‘sound discretion,’” as “courts of equity

have” done “[f]or ‘several hundred years.”’ United

States v. Oakland Cannabis Buyers’ Co-op., 532 U.S.

483, 496 (2001) (citation omitted).

By contrast, nothing in Section 113(f)(1)’s text

suggests that an allocation of CERCLA contribution

liability should be construed as a finding of fact,

subject to clear-error review. The statute does not

simply ask a court to find “who did what, when or

where, how or why.” U.S. Bank, 138 S. Ct. at 966.

Rather, Section 113(f)(1) requires a judgment based

on a “discretionary” balancing of “equitable factors in

a given case.” Goodrich, 311 F.3d at 170. Clear-error

review is thus plainly “inapposite.” Id. at 170 n.16.

Indeed, it is hard to understand how any decision

striking a particular balance could be described as

“clear error”—unless it is based on erroneous factual

findings. But the text of Section 113(f)(1) plainly

contemplates review of a district court’s decision

beyond the underlying facts. A clear-error standard

is thus ultimately an incoherent fit for the type of

inquiry Section 113(f)(1) mandates.

2. A “long history of appellate practice”—against

which Congress enacted CERCLA—also favors

reviewing equitable determinations, such as

contribution allocations, for abuse of discretion.

Pierce, 487 U.S. at 558. And that history makes clear

that abuse-of-discretion review imposes meaningful

constraints on equitable decision-making. Absent a

statement to the contrary, Congress is presumed to

adopt such background principles. See, e.g., Minerva

Surgical, Inc. v. Hologic, Inc., 141 S. Ct. 2298, 2307

(2021) (citing Astoria Fed. Sav. & Loan Ass’n v.

Solimino, 501 U.S. 104, 108 (1991)) (assignor

estoppel); California Pub. Emps.’ Ret. Sys. v. ANZ

Sec., Inc., 582 U.S. 497, 507-08 (2017) (equitable

tolling).

A variety of equitable determinations have long

been reviewed for abuse of discretion. See, e.g.,

Burton v. Burton, 21 P. 847, 848 (Cal. 1889) (probate);

Florida Power Corp. v. Ocklawaha Reclamation

Farms, 112 So. 616, 616 (Fla. 1927) (per curiam)

(temporary restraining order); Curran v. Georgia

Loan & Tr. Co., 30 S.E. 886, 886-87 (Ga. 1898)

(interlocutory injunction); Kenemer v. Kenemer, 26

Ind. 330, 332 (1866) (alimony); Spinks v. Raison, 139

S.W. 811, 812 (Ky. 1911) (ordering resale of property);

Taylor v. Baldwin, 10 Barb. 626, 630-31 (N.Y. Gen.

Term 1851) (lien enforcement); Cozard v. Cozard, 92

P. 935, 936 (Wash. 1907) (division of community

property).

Just as courts’ power to exercise equitable

discretion is older than this Nation, so too are

constraints on that discretion. See Owen W. Gallogly,

Equity’s Constitutional Source, 132 Yale L.J. 1213,

1245-56

(2023)

(describing

English

equity

jurisprudence’s development of “a set of rules to

constrain [Chancellors’] discretion”). The abuse-ofdiscretion standard looks to whether a court’s

reasoning was not just supported by the record, but

internally consistent. See, e.g., State v. Norrell, 53 P.

610, 610 (Utah 1898) (explaining that, under the

abuse-of-discretion standard, “findings of fact,

conclusions of law, and decree must all stand

together, and be consistent with each other.”). And

apart from demanding consistency, the abuse-ofdiscretion

standard

requires

adequate

explanation. See, e.g., Biden v. Texas, 142 S. Ct. 2528,

2543-44 (2022) (explaining that an agency’s “exercise

of discretion within [a] statutory framework must be

reasonable and reasonably explained”); FCC v. Fox

Television Stations, Inc., 556 U.S. 502, 515 (2009)

(emphasizing “the requirement that an agency

provide reasoned explanation for its action”).

This Court also has explained that “when

Congress invokes” a court’s equitable powers, it

requires “the principled application of standards

consistent with [statutory] purposes.” Albemarle

Paper Co. v. Moody, 422 U.S. 405, 417 (1975); see also

Lonchar v. Thomas, 517 U.S. 314, 323 (1996)

(reviewing courts should protect against “arbitrary

and uncertain” rulings akin to “measuring distance by

the length of each chancellor’s foot”). Accordingly,

even where “the court’s discretion is equitable in

nature,” that “hardly means that [such discretion] is

unfettered by meaningful standards or shielded from

thorough appellate review.” Albemarle, 422 U.S. at

416. Such limits on equitable decision-making stand

in stark contrast to the “serious thumb on the scale”

given to “factual findings [that] are reviewable only

for clear error.” U.S. Bank, 138 S. Ct. at 966.

Contribution allocations outside of the CERCLA

context uniformly receive abuse-of-discretion review.

See, e.g., Baptist Health v. Smith, 536 F.3d 869, 872

(8th Cir. 2008); Amphibious Partners, LLC v.

Redman, 534 F.3d 1357, 1362 (10th Cir. 2008).

Indeed, the Ninth Circuit itself reviews for abuse of

discretion other equitable allocations, see Westport

Ins. Co. v. California Cas. Mgmt. Co., 916 F.3d 769,

778 (9th Cir. 2019), and a host of different equitable

determinations, see Metal Jeans, Inc. v. Metal Sport,

Inc., 987 F.3d 1242, 1244-45 (9th Cir. 2021). This

history firmly supports reviewing CERCLA

contribution allocations for abuse of discretion as

well.

3. Finally, “basic principles of institutional

capacity counsel in favor of” abuse-of-discretion

review. McLane Co., 581 U.S. at 81. Appellate courts

are well-situated to police the boundary between

“[d]iscretion” and “whim” by applying abuse-ofdiscretion review, and frequently do. Halo Elecs., Inc.

v. Pulse Elecs., Inc., 579 U.S. 93, 103 (2016)

(alteration in original) (citation omitted).

As this Court has repeatedly explained in

reviewing agency action, inconsistencies and the lack

of a “reasoned explanation” are the hallmarks of an

abuse of discretion.

Encino Motorcars, LLC v.

Navarro, 579 U.S. 211, 221-22 (2016); Fox, 556 U.S.

at 515-16 (“[A] reasoned explanation is needed for

disregarding facts and circumstances that underlay

or were engendered by the prior policy.”); National

Cable & Telecommc’ns Ass’n v. Brand X Internet

Servs., 545 U.S. 967, 981 (2005) (“Unexplained

inconsistency is . . . a reason for holding an

interpretation to be an arbitrary and capricious

change

from

agency

practice

under

the

Administrative Procedure Act.”); Smiley v. Citibank

(South Dakota), N.A., 517 U.S. 735, 742 (1996)

(“Sudden and unexplained change . . . may be

‘arbitrary, capricious [or] an abuse of discretion’”

(alteration in original) (citation omitted)).

Circuit courts likewise hold that a district court

decision that is internally inconsistent or

inadequately explained constitutes an abuse of

discretion. See, e.g., BladeRoom Grp. Ltd. v. Emerson

Elec. Co., 20 F.4th 1231, 1247-48 (9th Cir. 2021)

(holding that court abused discretion by “flipp[ing] its

reasoning twice without explaining why”); Jackson v.

Los Lunas Cmty. Program, 880 F.3d 1176, 1205 (10th

Cir. 2018) (holding that court abused discretion by

finding facts demonstrating changed circumstances

but “conclud[ing], without adequate explanation,” the

opposite); United States v. Brown, 453 F.3d 1024,

1026 (8th Cir. 2006) (holding that sentencing court

abused discretion based on “internally inconsistent”

reasoning regarding witness credibility); see also

Henry J. Friendly, Indiscretion About Discretion, 31

Emory L.J. 747, 778 (1982) (explaining that a

discretionary determination that fails to adhere to

“equitable principles” or “adequately articulate[] . . .

reasons” for its result should not “stand”).

To be sure, district courts are best-positioned to

find facts that bear on CERCLA contribution

allocations. U.S. Bank, 138 S. Ct. at 966. Such

subsidiary findings of fact therefore receive no less

deference under abuse-of-discretion review.

See

Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 399401 (1990) (explaining that abuse of discretion and

clear-error

standards

treat

historical

facts

identically). But reviewing ultimate allocations for

abuse of discretion recognizes that a CERCLA

contribution allocation is the product of a

discretionary balancing of factors.

42 U.S.C.

§ 9613(f)(1). In other words, a flexible, equitable

determination should not get the same significant

deference as a finding of “historical” fact about how

many tons of waste a party put in a landfill. U.S.

Bank, 138 S. Ct. at 966. And neither the Ninth

Circuit nor any other court has offered a considered

rationale for treating an equitable allocation as a

finding of fact. Supra at 16-17, 22.

4. The district court’s decision in this case

illustrates the shortcomings of the clear-error

standard in reviewing equitable allocations. Under

the clear-error standard, the Ninth Circuit

disregarded the blatant inconsistency infecting the

district court’s reliance on the parties’ contract in

shifting liability to CFAC and the district court’s

failure to explain key leaps in its decision.

First, the Ninth Circuit excused the district court’s

stark inconsistency on the applicability of the

Acquisition Agreement in shifting CERCLA liability.

At the outset of its analysis, the district court, in

rejecting ARCO’s threshold contractual argument,

held that the Agreement’s text “unambiguous[ly]” did

not make CFAC responsible for ARCO’s CERCLA

liability and that the parties’ “conduct” and “extensive

correspondence” reinforced this conclusion. App. 30a,

42a-43a. Yet, one hundred pages later, the district

court expressly relied on the Agreement as the “most

important factor” in allocating CFAC 65% of CERCLA

liability for the Site. Id. at 144a-46a, 150a. This

blatant inconsistency lay at the heart of the court’s

decision.

The district court did not directly

acknowledge or explain this about-face.

Instead of reviewing the district court’s reasoning

for an abuse of discretion, the Ninth Circuit panel

tried to paper over this inconsistency by

hypothesizing that the district court found that the

Agreement was “not sufficiently clear” to shift

CERCLA liability. Id. at 3a (emphasis added). But

that reasoning is refuted by what the district court

actually said. It did not find that the Agreement

suggested that CERCLA costs could be shifted, but

simply was not clear enough to meet some additional

hurdle under state law. Rather, the district court

concluded that the Agreement “unambiguously” did

not shift CERCLA liability. Id. at 30a-31a, 43a.

Second, the district court failed to explain its

bizarre finding that, even though ARCO was the

“primary contributor” to Site contamination—a huge

factor weighing in CFAC’s favor—the need to

construct a “slurry wall” around the Wet Scrubber

Sludge Pond to contain that contamination somehow

offset this critical finding. That made no sense. The

district court found that ARCO was the “primary

contributor” to contamination at the Site—period.

While CFAC contributed some contamination at the

Wet Scrubber Sludge Pond, that Pond was downhill

of the unlined landfill that ARCO contaminated, and

could not reasonably have canceled out ARCO’s

primary contamination of the Site, or the need to

remediate that contamination. Supra at 6-7. Even

the panel observed that “[i]deally, the district court

would have explained more fully each party’s relative

contribution to the need for” a slurry wall. App. 5a.

Yet it didn’t. That gaping lack of explanation on this

critical issue is a quintessential abuse of discretion.

Third, the district court also failed to explain its

head-scratching conclusion that a $2.25 million

benefit to CFAC (what it projected to be the postremediation value of the Site) somehow wiped out the

$280 million advantage in profits that ARCO enjoyed

at the Site—a 2-to-1 advantage over CFAC’s profits.

Once again, the district court utterly failed to explain

this nonsensical leap.

The panel, however,

disregarded the lack of any explanation of this key

point. Instead, the panel again tried to backfill the

reasoning by pointing to other underlying facts, such

as ARCO’s greater capital investment in “the facility’s

construction and upgrades to mitigate environmental

contamination,” CFAC’s purchase of the facility “for

$1.00,” and the “substantial profits earned by both

parties.” Id. at 6a. But the district court itself

rejected capital investment as a basis for offsetting

ARCO’s profits advantage and evaluating relative

benefit. Id. at 147a-48a. And, although CFAC

purchased the property for $1, ARCO saved $7 million

in liquidation costs from the sale. Once again,

therefore, the district court’s decision lacked the

critical requirement to survive abuse-of-discretion

review—reasoned decision-making. Yet this was

irrelevant under the Ninth Circuit’s clear-error test.

These are just a few examples of the obvious flaws

in the district court’s decision that would require

reversal under the abuse-of-discretion standard

applied by the strong majority of circuits. But none of

this mattered under the clear-error standard that the

Ninth Circuit applied in summarily affirming the

district court’s equitable allocation in this case. The

acknowledged conflict in the standard of review for

such allocations warrants this Court’s review.

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted,

SAMIR DEGER-SEN

PETER TROMBLY*

LATHAM & WATKINS LLP

1271 Avenue of the

Americas

New York, NY 10020

GREGORY G. GARRE

Counsel of Record

LATHAM & WATKINS LLP

555 Eleventh Street, NW

Suite 1000

Washington, DC 20004

(202) 637-2207

gregory.garre@lw.com

Counsel for Petitioner

June 12, 2023

Admitted to practice in Virginia only.

APPENDIX

TABLE OF CONTENTS

Page

Opinion of the United States Court of Appeals

for the Ninth Circuit, Columbia Falls

Aluminum Company, LLC v. Atlantic

Richfield Company, No. 21-36042, 2023

WL 1281669 (9th Cir. Jan. 31, 2023), ECF

No. 48-1 ...............................................................1a

Findings of Fact and Conclusions of Law of the

United States District Court for the

District of Montana, Columbia Falls

Aluminum Company, LLC v. Atlantic

Richfield Company, No. CV 18-131, 2021

WL 3769886 (D. Mont. Aug. 25, 2021), ECF

No. 148 ................................................................7a

Order Granting Motion to Amend Judgment in

Limited Part, Columbia Falls Aluminum

Company, LLC v. Atlantic Richfield

Company, No. CV 18-131 (D. Mont. Nov.

23, 2021), ECF No. 167 ...................................154a

Amended

Judgment,

Columbia

Falls

Aluminum Company, LLC v. Atlantic

Richfield Company, No. CV 18-131 (D.

Mont. Nov. 23, 2021), ECF No. 168 ...............157a

Order Denying Petition for Rehearing,

Columbia Falls Aluminum Company,

LLC v. Atlantic Richfield Company,

No. 21-36042 (9th Cir. Mar. 14, 2023), ECF

No. 52 ..............................................................158a

42 U.S.C. § 9607(a)................................................160a

42 U.S.C. § 9613(b), (f) ..........................................162a

[2023 WL 1281669]

FILED

JAN 31, 2023

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

COLUMBIA FALLS

ALUMINUM COMPANY,

LLC,

Plaintiff-counterdefendant-Appellant,

No. 21-36042

D.C. No. 9:18-cv00131-DWM

MEMORANDUM*

ATLANTIC RICHFIELD

COMPANY,

Defendant-counterclaimant-Appellee.

Appeal from the United States District Court

for the District of Montana

Donald W. Molloy, District Judge, Presiding

This disposition is not appropriate for publication and is not

precedent except as provided by Ninth Circuit Rule 36-3.

Argued and Submitted December 5, 2022

San Francisco, California

Before: WATFORD and SANCHEZ, Circuit Judges,

and BENITEZ,** District Judge.

Appellant Columbia Falls Aluminum Co., LLC

(“CFAC”) appeals the district court’s equitable

allocation of environmental cleanup costs between

CFAC and Appellee Atlantic Richfield Co. (“ARCO”)

under the Comprehensive Environmental Response,

Compensation, and Liability Act (“CERCLA”). We

review the equitable factors considered for abuse of

discretion, and the equitable allocation of those

factors for clear error. TDY Holdings, LLC v. United

States, 885 F.3d 1142, 1146–47 (9th Cir. 2018). “A

finding of fact is clearly erroneous only where it is

‘(1) illogical, (2) implausible, or (3) without support in

inferences that may be drawn from the facts in the

record.’” United States v. Christensen, 828 F.3d 763,

779 (9th Cir. 2015) (quoting United States v. Pineda–

Doval, 692 F.3d 942, 944 (9th Cir. 2012)). If there are

two reasonable interpretations of the evidence, “the

factfinder’s choice between them cannot be clearly

erroneous.” Christensen, 828 F.3d at 779 (quoting

United States v. Working, 224 F.3d 1093, 1102 (9th

Cir. 2000) (en banc)). We affirm.

From 1955 to 1985, ARCO owned and operated an

aluminum smelting site in Columbia Falls, Montana

(the “Site”). In 1985, ARCO sold the Site to CFAC for

$1.00, and CFAC operated the Site until 2009. Both

** The Honorable Roger T. Benitez, United States District

Judge for the Southern District of California, sitting by

designation.

ARCO and CFAC generated substantial profits in

their respective operations and over the years,

hazardous waste was disposed of throughout the Site,

resulting in environmental contamination.

The transfer of the Site from ARCO to CFAC was

governed by a written agreement (the “Agreement”)

containing cross-indemnity provisions.

1. The district court’s equitable allocation of

CERCLA costs and reliance on the Agreement is

consistent with its other findings. The district court

relied on the Agreement when allocating 65 percent

of CERCLA costs to CFAC versus 35 percent to

ARCO. The court found that the Agreement was not

drafted with the specificity required under Montana

law to effectuate a waiver of the right to sue under

statutes such as CERCLA. The court also found that

the extrinsic evidence of the parties’ intent was not

sufficiently clear to overcome the lack of specificity in

the Agreement’s text. Therefore, unlike in Trinity

Indus., Inc. v. Greenlease Holding Co., 903 F.3d 333,

361 (3d Cir. 2018), the district court’s refusal to

enforce the Agreement rested solely on the fact that

the high bar set by state law was not met.

Given the court’s finding that the parties did

intend the Agreement to cover non-statutory liability

for the very environmental conditions at issue in this

case, the court was within its discretion to consider

the Agreement for purposes of equitable allocation

under CERCLA. As the court noted, “[e]ven if the

indemnity provisions are not enforceable as a matter

of contract law to bar CFAC’s claims, the evidence

shows that the parties intended for CFAC alone to

have an indemnification obligation to ARCO after

August 31, 1990.” Accordingly, the district court did

not err in refusing to enforce the Agreement as a

matter of law but considering it when equitably

allocating costs. See Cadillac Fairview/California,

Inc. v. Dow Chemical Co., 299 F.3d 1019, 1025 (9th

Cir. 2002) (equitably allocating 100 percent of

CERCLA cleanup costs to the government based on

an indemnity clause that was not enforceable as a

matter of law); Kerr-McGee Chem. Corp. v. Lefton Iron

& Metal Co., 14 F.3d 321, 326 (7th Cir. 1994) (holding

the district court erred in allocating cleanup costs by

not considering contractual arrangements, which

reflected an intent to indemnify).1

2. The district court did not err in applying the

Gore Factors focused on the amount and nature of

hazardous waste.2 Despite CFAC’s contention that

CFAC also challenges the district court’s 65-35 allocation as

arbitrary and speculative. However, the court found the Gore

Factors and respective economic benefits to be neutral, relying

on the Agreement to tip the scales in favor of ARCO. Because

courts “need not allocate response costs to a mathematical

certainty . . . ,” there is no error here. See ASARCO LLC v. Atl.

Richfield Co., LLC, 975 F.3d 859, 869 (9th Cir. 2020), cert.

dismissed sub nom. Atl. Richfield Co. v. Asarco LLC, 141 S. Ct.

2843 (2021); Nikko Materials USA, Inc. v. NavCom Def. Elecs.,

Inc., 291 F. App’x 67, 70 (9th Cir. 2008) (“The district court . . .

acted within its discretion in reducing the level of contribution

from sixty-six percent to sixty percent based on the contractual

relationship between the parties and . . . [the] aggressive

conduct during negotiations . . . .”).

These Gore Factors include: “(1) the ability of the parties to

demonstrate that their contribution to a discharge, release or

disposal of a hazardous waste can be distinguished; (2) the

amount of the hazardous waste involved; (3) the degree of

toxicity of the hazardous waste involved; [and] (4) the degree of

involvement by the parties in the generation, transportation,

treatment, storage, or disposal of the hazardous waste . . . .”

TDY Holdings, 885 F.3d at 1146 n.1 (quoting Kerr-McGee Chem.

Corp., 14 F.3d at 326 n.4).

the district court was required to allocate costs based

on each party’s respective contamination of the Site,

the text of CERCLA clearly and unambiguously

states that “[i]n resolving contribution claims, the

court may allocate response costs among liable

parties using such equitable factors as the court

determines are appropriate.”

42 U.S.C.A.

§ 9613(f)(1). While the Gore factors are certainly

relevant and have been used by other courts, they are

“neither an exhaustive nor exclusive list.” Env’t

Transp. Sys., Inc. v. ENSCO, Inc., 969 F.2d 503, 509

(7th Cir. 1992). Here, the district court considered the

Gore Factors but found the first four to be neutral,

taking into consideration the practical effect of the

proposed remedial measure—a slurry wall that would

encompass the West Landfill and the Wet Scrubber

Sludge Pond (“WSSP”).

Considering CFAC’s contamination of the WSSP,

along with the fact that a large portion of the slurry

wall would contain the WSSP, the district court did

not err in considering the proposed remedial measure

alongside the Gore Factors. See Boeing Co. v. Cascade

Corp., 207 F.3d 1177, 1188 (9th Cir. 2000)

(illustrating how in certain circumstances where the

cost of remedial measures does not equate to the

volume of contamination, it would be inappropriate to

look to contamination alone). Ideally, the district

court would have explained more fully each party’s

relative contribution to the need for this joint

remedial measure. See Akzo Nobel Coatings, Inc. v.

Aigner Corp., 197 F.3d 302, 305 (7th Cir. 1999). But

we cannot say based on the evidence before us that

the district court clearly erred in finding that the

slurry wall was occasioned by both ARCO’s and

CFAC’s contamination.

3. The district court did not err in its economic

benefits analysis. Both parties realized hundreds of

millions of dollars in profits during their respective

operations. Although ARCO earned more profit than

CFAC, ARCO expended over $1 billion dollars on the

Site—including the facility’s construction and

upgrades to mitigate environmental contamination—

while CFAC spent only $95 million on Site

improvements. The district court also considered that

CFAC received the facility and everything ARCO put

into it for $1.00. Recognizing these other forms of

economic benefit and the substantial profits earned

by both parties, the district court did not err in

concluding that the totality of the economic picture

was neutral. Cf. Lockheed Martin Corp. v. United

States, 35 F. Supp. 3d 92, 132 (D.D.C. 2014), aff’d, 833

F.3d 225 (D.C. Cir. 2016) (“Although LPC may not

have reaped large profits from its contracts with the

government, it helped its parent corporation

Lockheed Aircraft Corporation establish a foothold in

the rocket propulsion field, a position that Lockheed

retains to this day.”).

AFFIRMED.

[2021 WL 3769886]

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MONTANA

MISSOULA DIVISION

COLUMBIA FALLS

ALUMINUM COMPANY,

LLC,

Plaintiff,

vs.

CV 18-131-M-DWM

FINDINGS OF

FACT AND

CONCLUSIONS

OF LAW

ATLANTIC RICHFIELD

COMPANY,

Defendant.

The trial in this case arises out of a dispute

between Plaintiff Columbia Falls Aluminum

Company, LLC (“CFAC”) and Defendant Atlantic

Richfield Company (“ARCO”) over the parties’

respective environmental liabilities at an aluminum

smelter in Columbia Falls, Montana (“the Site”). In

July 2018, CFAC sued under the Comprehensive

Environmental Response, Compensation, and

Liability Act (“CERCLA”) and its state analog (the

Montana Comprehensive Environmental Cleanup

and Responsibility Act, or “CECRA”), seeking cost

recovery and contribution for its liability as the

current owner and operator of the Site. ARCO

counterclaimed and argues that the parties’ 1985

Acquisition Agreement bars suit and that, even if it

did not, CFAC cannot recover under either CERCLA

or CECRA.

A 7-day bench trial took place in Missoula,

Montana beginning on June 28, 2021. CFAC

presented seven witnesses:

- Andrew Baris, remediation expert;

- David Batson, allocation expert;

- John Stroiazzo, a Glencore consultant at the

Columbia Falls facility;

- William Muno, cleanup cost expert;

- Andrew Otis, CFAC’s regulatory counsel;

- Jeffrey Dunn, rebuttal financial expert; and

- Kraig Kosena, rebuttal appraisal expert.

ARCO presented six witnesses:

- Brian Johnson, strategy manager for ARCO;

- Marcia Williams, industrial site closure expert;

- Peter Jewett, remediation expert;

- David Hall, financial expert;

- Thomas Stevens, appraisal expert; and

- Gayle Koch, cleanup cost expert.

The parties also presented deposition testimony of:

- Steven Wright, CFAC’s only employee and Site

Manager;

- Subodh Das, ARCO environmental manager in

the 1980s; and

- John R. Lucas, ARCO attorney involved in

1985 acquisition.

Notably, neither party deposed or called Brack Duker

as a witness in the case even though he was a critical

player in disposing of ARCO’s assets and negotiating

the 1985 Acquisition Agreement in favor of his new

company.

Based on the evidence and testimony presented at

the trial, and further considering the applicable law

and the parties’ written submissions, the following

findings of fact and conclusions of law are made

pursuant to Federal Rule of Civil Procedure 52.

TABLE OF ACRONYMS

ARCO

Atlantic Richfield Company

CECRA

Comprehensive Environmental

Cleanup and Responsibility Act

CERCLA Comprehensive Environmental Response,

Compensation, and Liability Act

CFAC

Columbia Falls Aluminum Company,

LLC

EPA

United States Environmental

Protection Agency

MDEQ

Montana Department of

Environmental Quality

MDHES

Montana Department of Health and

Environmental Sciences

MPDES

Montana Pollutant Discharge

Elimination System

PAH

polyaromatic hydrocarbon

PCB

polychlorinated biphenyl

PRP

Potentially Responsible Party

RCRA

Resource Conservation and Recovery

Act

SPL

Spent Potliner

WSSP

Wet Scrubber Sludge Pond

10a

[Table of Contents omitted]

I. OPERATIONAL HISTORY

Defendant Atlantic Richfield Company

(“ARCO”) is a corporation organized under the laws of

the state of Delaware, with its principal place of

business in Texas. (Agreed ¶ 1.)

Plaintiff

Columbia

Falls

Aluminum

Company, LLC (“CFAC”) is a limited liability

company organized under the laws of the state of

Delaware, with its principal place of business in

Columbia Falls, Montana. (Agreed ¶ 2.)

The former aluminum reduction facility

that CFAC owns, located near Columbia Falls,

Flathead County, Montana (“The Site”), is located at

2000 Aluminum Drive, two miles northeast of

Columbia Falls, Montana, and lies north of the

Flathead River, west of Teakettle Mountain, south of

Cedar Creek Reservoir, and east of Cedar Creek.

(Agreed ¶ 3.)

11a

(Ex. 260 at 9.)

ARCO, including its corporate predecessors,

Anaconda Aluminum Company and Anaconda Copper

Mining Company (together “Anaconda”), owned real

property and/or conducted industrial operations at

the Site from 1955 to 1985. (Agreed ¶ 5.) ARCO is

now part of bp, or British Petroleum. (Johnson.)

In 1955, Anaconda completed construction

of the aluminum reduction facility and began

12a

production of aluminum at the Site. (Agreed ¶ 7; see

also Ex. 230 at 6.)

(Ex. 230 at 118.)

CFAC—through its corporate predecessors,

Montana Aluminum Investors Corp. and Columbia

Falls Aluminum Company, a Montana Corporation—

acquired the Site from ARCO in September 1985,

conducted industrial operations at the Site including

operating the aluminum reduction facility during the

period of 1985 to 2009, and currently owns the Site.

(Agreed ¶ 6.) Glencore is CFAC’s parent company.

(Stroiazzo.)

The industrial ownership timeline for the

Site is as follows:

1951 to 1978:

Anaconda

1978 to 1985:

ARCO

13a

1985 to 1999:

Montana Aluminum Investors

Corp.

1999 to present:

CFAC

(Ex. 134 at 45.) References herein to ARCO include

actions and operations of Anaconda and references to

CFAC include the actions and operations of Montana

Aluminum Investors Corp.

The operational area of the Site, commonly

known as the Anaconda Aluminum Co. Columbia

Falls Reduction Plant, occupied approximately 953

acres. (Ex. 26 at 8.) The following site features map

depicts the location of different Site operational areas

which are addressed in more detail below:

14a

(Agreed ¶ 4; Ex. 848 at 2; see also Ex. 134 at 304.)

15a

Both ARCO and CFAC produced aluminum

at the Site using the Hall-Héroult process and vertical

stud Soderberg aluminum cell technology. In this

process, aluminum was produced in an aluminum

production “pot,” a steel vessel which was lined with

carbon paste, or “potliner.” Each pot was charged

with a mixture of powdered alumina (aluminum

oxide) and cryolite (sodium fluoride), to which a high

electric current was applied through an anode (made

of petroleum coke and pitch) at the top of the mixture.

The current passed from the anode through

alumina/cryolite bath to the potliner, which acted as

a cathode and completed a circuit. The application of

current also created high heat in each pot (1760° F

(960° C)). As a result, aluminum ions in alumina were

reduced to aluminum metal, forming molten

aluminum at the bottom of the pot. The molten

aluminum was periodically tapped from the pot and

transported to the Site’s Cast House, where it was

cast into ingots for offsite shipment. Over the years,

as part of the casting process, various alloys and

ingots were produced at the facility. (Agreed ¶ 8; Ex.

134 at 45.) Diagrams of the aluminum production

process are provided below:

16a

(Ex. 1278 at 7; Ex. 230 at 52.)

10.

Initially in 1955, ARCO built two potlines

with 120 pots in each potline and a nominal capacity

of 67,500 metric tonnes per year. A third potline of

17a

120 pots was added in 1965, and the fourth and fifth

potlines, also having 120 pots each, were added in

1968, increasing total aluminum production capacity

at the Site to 180,000 metric tonnes per year. (Ex. 134

at 45; Ex. 230.)

18a

(Ex. 1278 at 8.)

19a

11.

Prior to 1980, the average life of a

cathode/pot was short (3 to 4 years). (See Ex. 230 at

126; Ex. 294 at 9.) Technological improvements,

including the installation of “Sumitomo” technology

in the early 1980s, extended the lifespan of a potliner

to seven to nine years. (Ex. 294 at 9; Ex. 260 at 15.)

An image of the pot line from the Site is provided

below, (Ex. 230 at 126):

12.

ARCO

produced

estimated

7,104,464,396 lbs. (3,222,531 metric tonnes) of

aluminum between 1955 and September 1985, when

it sold the Site to CFAC. (Agreed ¶ 9; see also Exs.

283, 720.)

20a

13.

CFAC produced an estimated 6,319,833,296

lbs. (2,866,628 metric tonnes) of aluminum between

October 1985 and 2009, when it stopped producing

aluminum. (Agreed ¶ 10; see also Exs. 283, 720.)

14.

The aluminum production volumes (in lbs.)

are detailed below:

Atlantic Richfield

1955- Sep. 1985

CFAC

Oct. 1985-2009

Year

Production

(lbs.)

Year

Production

(lbs.)

1955

29,600,731

Oct.

1985Dec.

1985

91.525,427

1956

123,461,000

1986

367,594,000

1957

104,403,000

1987

371,200,000

1958

100,588,000

1988

366,104,000

1959

102,320,000

1989

369,366,000

1960

114,142,000

1990

370,264,000

1961

126,770,000

1991

370,292,000

1962

135,107,000

1992

374,864,000

1963

136,017,000

1993

284,475,420

1964

138,919,000

1994

279,758,900

1965

163,366,000

1995

331,606,716

1966

213,461,000

1996

372,290,190

1967

213,127,000

1997

377,474,544

21a

Year

Production

(lbs.)

Year

Production

(lbs.)

1968

211,694,000

1998

373,220,977

1969

356,485,000

1999

372,355,263

1970

358,877,000

2000

350,319,829

1971

346,610,000

2001

13,564,835

1972

357,304,000

2002

148,659,588

1973

304,064,000

2003

106,649,215

1974

342,028,000

2004

74,536,594

1975

257,660,000

2005

73,339,813

1976

294,011,000

2006

74,688,639

1977

309,641,000

2007

199,995,579

1978

309,420,000

2008

167,942,952

1979

315,462,000

2009

37,744,815

1980

332,043,000

Total

6,319,833,296

1981

335,830,000

1982

215,617,000

1983

170,990,000

1984

318,809,000

Jan. –

Sep.

1985

266,637,665

Total

7,104,464,396

(Agreed ¶ 11; Ex. 720.)

15.

Around 2001, CFAC temporarily ceased

aluminum production, shutting down the facility so it

22a

could instead sell electricity into the West Coast

wholesale electricity market. (See Ex. 283 at 99, 105.)

16.

CFAC announced the permanent closure of

the facility in 2015 and completed the

decommissioning and removal of the industrial

buildings and related structures in the third quarter

of 2019. (Agreed ¶ 12; Ex. 134 at 44.)

II. PARTY ARGUMENTS

CFAC

17.

According to CFAC, from approximately

1960 through approximately 1980, ARCO alone

disposed of an estimated 129,000 to 135,000 tons of

spent potliners (“SPL”), a principal waste generated

by aluminum reduction which contained cyanide and

fluoride in two unlined landfills: the West Landfill

and the Center Landfill. ARCO alone also disposed of

another waste from its aluminum production

operations—sludge from wet scrubbers that was

composed of 80 percent calcium fluoride—in the Wet

Scrubber Sludge Pond (“WSSP”) from the beginning

of ARCO’s operations at the Site through

approximately 1979.

18.

These onsite SPL and fluoride disposals by

ARCO are primarily (if not in fact exclusively)

responsible for the elevated concentrations of cyanide

and fluoride observed in groundwater downgradient

from these disposal areas. The SPL and fluoride

disposals by ARCO, and the elevated groundwater

concentrations, led the United States Environmental

Protection Agency (“EPA”) to list the Site on the

CERCLA National Priorities List in September 2016.

The cyanide and fluoride leaching from the SPL

disposed of by ARCO, and calcium fluoride sludge

disposed of by ARCO, are the principal drivers for the

23a

need to select and implement a cleanup remedy at the

Site.

ARCO

19.

According to ARCO, the present suit is

foreclosed by the parties’ 1985 Acquisition

Agreement. But even if it is not, CFAC seeks to

recover costs that are either not recoverable under

CERCLA or for which it agreed to indemnify ARCO.

Finally, to the extent any costs are recoverable, CFAC

should be allocated greater responsibility for those

costs based on the Acquisition Agreement, CFAC’s

failure to exercise due care in its operation and

closure of the facility, CFAC’s own discharges of

hazardous materials, and the economic benefit CFAC

realized or will realize from the Site.

III. CONTRACTUAL LIMITIONS ON SUIT

20.

As a threshold matter, the parties dispute

whether CFAC is contractually barred from bringing

this action against ARCO. Based on the evidence

presented at trial, the contractual bone of contention

is resolved in CFAC’s favor. Even so, the proof at trial

supports allocating a majority of the Site cleanup

costs to CFAC under CERCLA’s equitable allocation

process, which is discussed below.

21. State law “provide[s] the general content of

federal law on the validity of releases of claims of costrecovery under CERCLA.” Mardan Corp. v. C.G.C.

Music, Ltd., 804 F.2d 1454, 1460 (9th Cir. 1986).

Accordingly, Montana law governs the interpretation

of the parties’ agreements here.

24a

The Agreements

22.

The parties entered into three agreements

in the 1980s: the 1985 Acquisition Agreement, the

1985 Supplemental Agreement, and the 1988

Settlement. While all three are discussed below, the

parties’ dispute focuses primarily on the 1985

Acquisition Agreement.

1. The Acquisition Agreement

23.

On September 10, 1985, ARCO and

Montana Aluminum Investors Corp., CFAC’s

predecessor, entered into the Acquisition Agreement.

(Ex. 1; Lucas.)

24.

Through the Agreement, ARCO transferred

to Montana Aluminum Investors Corp. the “Assets of

the Smelter Business,” as such term is defined in the

Acquisition Agreement and sold all stock to Montana

Aluminum Investors Corp. for the purchase price of

$1.00. (Ex. 1 at § 2(c).)

25.

The Acquisition Agreement defines “Assets

of the Smelter Business” as “those assets of Seller

relating to the Smelter Business wherever they may

be located,” but excluding certain assets not relevant

here, and explains “[a]s used herein, the phrase

‘relating to the Smelter Business’ when used with

respect to any asset or liability of Seller is intended to

designate those assets or liabilities that have been

used or are associated with the conduct of the Smelter

Business.” (Agreed ¶ 57; Ex. 1 § 1(a).)

26. The Acquisition Agreement contains

indemnity provisions in favor of both ARCO, as Seller,

and Montana Aluminum Investors Corp. (or CFAC),

as Buyer. (Ex. 1, Section 10.) ARCO insists that

pursuant to those provisions, CFAC agreed not to sue

ARCO for environmental conditions at the Site after

25a

1990 and/or assumed all environmental liability for

the Site as of 1990, foreclosing the present action. The

specific language of the indemnity provisions is

provided below.

27. The Acquisition Agreement required Seller

(ARCO) to “indemnity and hold Buyer harmless from

and against: . . . (iii) All damages, losses, and out-ofpocket expenses (including attorneys’ fees) caused by

or arising out of obligations or liabilities relating to

the Smelter Business resulting from events or

conditions in existence prior to the Closing Date.”

(Agreed ¶ 58; Ex. 1 § 10(a), (a)(iii).)

28.

The Acquisition Agreement requires Buyer

(CFAC) to “indemnify and hold Seller harmless from

and against . . . (iii) All damages, losses, and out-ofpocket expenses arising out of . . . obligations or

liabilities, contingent or otherwise, relating to the

operation of the Smelter Business after the Closing

Date, other than obligations or liabilities as to which

Seller is obligated to indemnify Buyer pursuant to

Section 10(a)(iii).” (Agreed ¶ 60; Ex. 1 § 10(b)(iii).)

29.

The

Acquisition

Agreement

further

provides: “Buyer’s obligation to indemnity Seller with

respect to the liabilities and obligations referred to in

clauses (ii) and (iii) of this Section 10(b) will be

continuing.” (Agreed ¶ 61; Ex. 1 § 10(b)(iii).) But

“Buyer may not make a claim with respect to . . . (B)

Seller’s indemnity referred to in clause (iii) of this

Section 10(a) at any time after August 31, 1990,

except with respect to any such claim relating to the

tax matters referred to in Article VIII . . . .” (Agreed

¶ 59; Ex. 1 § 10(a)(iii).)

26a

2. The Supplemental Agreement

30.

ARCO and Montana Aluminum Investors

Corp. also entered into a “Supplemental Agreement”

on September 10, 1985. Under the Supplemental

Agreement, ARCO agreed to pay $4 million into an

escrow account, which Montana Aluminum Investors

Corp. was authorized to draw upon for the purpose of

paying certain operating expenses or liquidating

expenses of the aluminum smelter facility for a period

not to exceed five years. (Ex. 2: Lucas.)

31.

If Montana Aluminum Investors Corp.

earned an aggregate amount of $10 million or more

from its operations of the facility during the ensuing

five-year period, the Supplemental Agreement

required it to repay to ARCO the $4 million deposited

into the escrow account out of Montana Aluminum

Investors Corp.’s subsequent earnings. (Ex. 2 at ¶ 4;

Lucas.)

32.

In approximately November 1988, Montana

Aluminum Investors Co. repaid the $4 million

because it had hit the $10 million benchmark (Ex. 9;

Lucas.)

3. 1988 Settlement

33.

On November 16, 1988, ARCO and

Montana Aluminum Investors Corp. entered into a

settlement agreement to “to compromise and settle

certain matters which were in dispute between the

two companies with respect to the operation of the

[1985] Acquisition Agreement . . . .” (Ex. 1216.)

34.

Among other things, the 1988 Settlement

addressed an asbestos encapsulation program

undertaken by Montana Aluminum Investors Corp.

at the Site. (Ex. 1216 at ¶ 2.) ARCO agreed to pay

one-half of the $310,000 expended by Montana

27a

Aluminum

Investors

Corp.

for

asbestos

encapsulation. In exchange for that $155,000

payment, Montana Aluminum Investors Corp. agreed

it would “continue to remain solely responsible for

compliance with all environmental, health, safety and

other regulations applicable to the operation of the

Columbia Falls smelter with reference to the presence

of asbestos containing materials.” (Ex. 1216 at ¶ 2.)

CFAC also agreed to “defend and hold ARCO

harmless against any claims which might be brought

by any person with respect to or arising out of, the

asbestos encapsulation program,” and “to waive and

hereby release[ ] ARCO from any and all claims which

Montana Aluminum Investors Corp. may presently

have, or may have in the future, with respect to the

presence of asbestos containing material at the

Columbia Falls smelter.” (Ex. 1216 at ¶ 2.)

35.

ARCO transmitted the check for $155,000

to CFAC on November 16, 1988. (Ex. 1216 at 1.)

36.

CFAC therefore waived and released ARCO

from any claims with respect to the presence of

asbestos containing materials at the Site, including

claims for costs associated with asbestos removal

from the plant buildings and any cleanup or capping

of the asbestos landfills at the Site. (See Ex. 1216.)

37.

Consequently, CFAC cannot recover

contribution for past costs of $2.85 million related to

asbestos abatement of the former Main Plant

Building nor future costs for remedial action related

to the Asbestos Landfills. Accordingly, ARCO’s Rule

52 motion is GRANTED as to CFAC’s asbestos costs.

Section 10

38.

ARCO presents two defenses based on the

language contained in Section 10 of the Acquisition

28a

Agreement. ARCO first argues that Section 10(a) acts

as a covenant not to sue, barring CFAC’s claims for

contribution and recovery under CERCLA and

CECRA.1 Failing that, ARCO argues that Section

10(b) shifted liability for pre-closing environmental

conditions to CFAC at the time of the sale. These

arguments are discussed in turn.

1. Covenant Not to Sue

39.

Pursuant to Section 10(a), CFAC agreed

that it “may not make a claim with respect to . . .

(B) Seller’s indemnity referred to in clause (iii) of this

Section 10(a) at any time after August 31, 1990.” As

mentioned above, § 10(a)(iii) states that ARCO agreed

to “indemnify and hold [CFAC] harmless from and

against: . . . (iii) All damages, losses, and out-of-pocket

expenses (including attorneys’ fees) caused by or

arising out of obligations or liabilities relating to the

Smelter Business resulting from events or conditions

in existence prior to the Closing Date.”

40.

ARCO characterizes this provision as a

covenant not to sue, insisting that it applies to

existing environmental liabilities prior to closing.

(See Ex. 1 § 10(a)(iii); Doc. 128 at 10–13.) In response,

CFAC argues that the covenant—to the extent there

is one—is limited to CFAC’s contractual right to seek

indemnity, not its ability to pursue a statutory right

to recovery or contribution under CERCLA or

CECRA. CFAC has the better argument.

41.

In interpreting a contract under Montana

law, a court’s job “is simply to ascertain and declare

what is in the terms or substances contained therein,

not to insert what has been omitted or omit what

ARCO did not make this argument in its pretrial motion

for judgment on the pleadings. (See Doc. 128 at 8 n.3.)

29a

has been inserted.” Ohio Farmers Ins. Co. v. JEM

Contracting, Inc., 386 P.3d 613, 616 (Mont. 2016).

“The role of a court interpreting a contract provision

is to ascertain and effectuate the parties’ mutual

intentions[,]” which is reflected in “[t]he clear and

explicit language of the contract.” A.M. Welles, Inc. v.

Mont. Materials, Inc., 342 P.3d 987, 989 (Mont. 2015);

AWIN Real Estate, LLC v. Whitehead Homes, Inc.,

472 P.3d 165, 169 (Mont. 2020). “[A]n ambiguity

exists only if the language is susceptible to at least

two reasonable but conflicting meanings.” Mary J.

Baker Revocable Tr. v. Cenex Harvest Sts., Coops, Inc.,

164 P.3d 851, 857 (Mont. 2007). “[I]f the language of

a contract is ambiguous, a factual determination must

be made as to the parties’ intent in entering into the

contract.” Id. “[E]vidence of the circumstances under

which the contract was made and the matter to which

it relates may [also] be considered.” Id. “However,

such evidence . . . is not admissible to add to, vary, or

contradict the terms of the contract.” Id.

42.

The plain language of § 10(a) states that

CFAC will not make a claim “with respect to” ARCO’s

“indemnity” as defined under the Agreement. As both

sides agree, CFAC is not making a claim under the

indemnification provision here. (See Doc. 128 at 11.)

Rather, CFAC’s claims are based on independent

statutory obligations that could form the basis of suit

regardless of whether CFAC had a contractual right

of indemnity against ARCO. ARCO therefore argues

that “claim” covers any type of claim so long as it is

related to the matters covered by the indemnity

provision. CFAC, on the other hand, insists “claim” is

limited to an indemnification claim under the

Agreement. Because only CFAC’s interpretation is

30a

reasonable, the provision is not ambiguous and does

not foreclose the present suit.

43.

ARCO relies on several out of jurisdiction

authorities to argue that “with respect to” must be

broadly construed to include any related matter. (See

Doc. 128 at 10–12.) In doing so, however, ARCO

ignores the fact that it is essentially arguing that

CFAC waived its statutory right to bring a suit under

CERCLA. To be sure, statutory rights created for a

private benefit can be waived by contract. See

Collection Bureau Servs., Inc. v. Morrow, 87 P.3d

1024, 1028 (Mont. 2004); Mont. Code Ann. § 1–3–204.

But the waiver of statutory rights requires specificity

as “waiver is the intentional and voluntary

relinquishment of a known right, claim or privilege.”

Morrow, 87 P.3d at 1028–28.

44.

Thus, to bar CFAC’s claims, the language

“with respect to” must be read to specifically waive

independent statutory claims beyond those arising

from

the

indemnification

provision

itself.

Considering ARCO’s own argument that “with

respect to” broadens, rather than narrows, the scope

of contractual language, such a reading is not tenable.

45.

Because the broad waiver envisioned by

ARCO is not sufficiently pointed to effectuate a

waiver of CFAC’s right to sue for recovery or

contribution under CERCLA or CECRA under the

plain language of the provision, § 10(a) does not bar

the present lawsuit.

46.

Although

the

plain

language

unambiguous, even if the Agreement’s “with respect

to” language was sufficient to create an ambiguity,

the extrinsic evidence shows that CFAC did not waive

its statutory rights. The parties’ conduct shows that

31a

CFAC believed it needed to bring an indemnification

claim by 1990, not necessarily any claim.

47.

“Where an ambiguity in a contract exists,

the court may turn to extrinsic evidence to determine

the intent of the parties.” Ophus v. Fritz, 11 P.3d

1192, 1196 (Mont. 2000). At trial, the parties

presented evidence surrounding the Acquisition

Agreement. More specifically, ARCO presented

testimony of John Lucas, a former ARCO in-house

lawyer, and Subdoh Das, a former ARCO

environmental manager. CFAC did not present any

witnesses on this issue. Both parties offered several

documentary exhibits, including correspondence

leading up to the 1985 sale and following the

acquisition between 1985 and 1990. That evidence is

described below. As stated earlier, neither party

sought proof from a critical witness both as to the

CFAC acquisition and the contracts at issue, Brack

Duker.

The Sale

48.

The signatories to the 1985 Acquisition

Agreement were Claude Goldsmith on behalf of

ARCO and Brack Duker on behalf of Montana

Aluminum Investors Corp. (Agreed ¶ 56; Ex. 1.)

Claude Goldsmith is deceased and no one remaining

at ARCO has personal knowledge of the Acquisition

Agreement. (Johnson.) While Duker is alive, (see

Doc. 42 at 29), he was not called as a witness at trial.

49.

Duker, who became a principal of Montana

Aluminum Investors Corp. and later CFAC, was in

charge of divesting the Columbia Falls smelter when

he worked at ARCO. (Das; Lucas.)

50.

At the time of the sale, there were other

companies potentially interested in acquiring the

32a

Site, such as Reynolds and Kaiser (other aluminum

smelters). (Das.) While Das did not have any direct

contact with Duker, Das got the impression that

Duker actively tried to discourage a third-party sale

in order to acquire the facility as a new going concern.

(Das.)

51.

That new concern included several existing

ARCO employees, such as Jerome Broussard, Thomas

Payne, Donald Ryan, and Ken Reick. (Compare Ex.

30 (details the organizational structure under ARCO)

with Ex. 1225 (details the organizational structure

under CFAC).)

52.

ARCO ultimately sold the facility to

Montana Aluminum Investors Corp., its former

employees, for $1.00. (See Exs. 241, 243, 244.)

53.

The sale was not without benefit to ARCO,

however, as the company had decided to “withdraw

from the primary aluminum business” and was going

to either sell or liquidate the facility. (See Exs. 244,

245.) Despite the sale price of $1.00, ARCO would

have lost more money liquidating the facility than

selling it to Montana Aluminum Investors Corp. (See

Ex. 112 at 5, 10 (projecting savings of $7 million).)

54.

Because the Agreement was between ARCO

and its own divestiture team, there is no basis for

construing the provisions at issue for or against a

particular party. AWIN Real Estate, LLC, 472 P.3d

at 171 (rejecting principle that contract should be

construed against drafter as an “absolute rule”).

ii. Subsequent Conduct

55.

Other than the above, much of the extrinsic

evidence presented at trial regards the parties’ postcontract conduct, that from 1985 to 1990. More

specifically, ARCO presented evidence that CFAC

33a

(1) sought to amend the Acquisition Agreement in

1986 and (2) made several environmentally related

indemnification demands prior to 1990.

56.

“Where the language of a contract is

doubtful and ambiguous, the conduct of the parties

under the contract is one of the best indications of

their true intent.” Waiters v. City of Billings, 451 P.3d

60, 67 (Mont. 2019) (cleaned up); see also Ophus, 11

P.3d at 1196 (“The practical interpretation of a

contract, which the parties placed upon it by their

course of conduct, is entitled to great, if not

controlling influence in ascertaining what they

understood by its terms.”).

57.

In this case, CFAC’s post-contract conduct

shows that while it believed it could not bring an

indemnification claim against ARCO after 1990, it did

not necessarily believe it was barred from bringing a

statutory claim.

58.

In 1986, CFAC sought to amend the

Acquisition Agreement to “waive ARCO’s August 31,

1990 deadline for [CFAC] making of claims under

§ 10(a)(iii) of the Agreement for all claims related to

environmental hazards,” among other things. (Ex. 3;

Lucas.)

59.

The proposed amendment also requested

that ARCO “acknowledge[ ] and accept[ ]” the

environmental claims CFAC had been attempting to

assert against ARCO under the terms of the

indemnification provision. (Ex. 3; Lucas.) The draft

amendment required ARCO to accept such claims

even if “the nature, scope and extent” of the claim was

not known by the August 31, 1990 deadline

and no actual claim had been made against CFAC

before August 31,1990. (Ex. 3; Lucas.) The proposed

34a

amendment specifically references government and

state ordered remediation, (see Ex. 3 at 4), but stops

short of addressing statutory obligations. To the

contrary, the references therein once again cite the

parties’ contractual indemnification obligations.

60.

Lucas, who received the draft amendment

from CFAC, testified that the proposed amendment

was “completely inconsistent with the fundamental

nature of the” Acquisition Agreement, which was that

ARCO’s liability ended on August 31, 1990. Thus,

ARCO did not agree to the amendment. (Lucas.)

61.

From 1985 through 1990, CFAC also made

a series of indemnification demands on ARCO,

specifically attempting to assert indemnity claims for

costs related to SPL in the landfills, cyanide and

fluoride in the groundwater, and other environmental

issues that are the subject of the current lawsuit.

(Lucas.)

62.

The primary person who responded to these

indemnification demands for ARCO was Lucas and

the primary persons who made these indemnification

demands for CFAC were Duker and Payne. (Lucas;

see Ex. 4.)

63.

On January 4, 1988, Payne, on behalf of

CFAC, sent a letter to ARCO, copying Lucas, advising

ARCO that EPA had visited the Site and discussed

“past practices and closed disposal practices” with

individuals at CFAC. (Ex. 5 (letter is misdated as

1987); Lucas.) Payne also stated that “per section

10(a)(iii), we will look to ARCO to indemnify

[Montana Aluminum Investors Corp.] and CFAC for

any expenses from this matter which result from

conditions in existence prior to September 10, 1985.”

(Ex. 5; Lucas.) In this letter, CFAC took the position

35a

that the Acquisition Agreement’s indemnification

obligations extended to pre-1985 environmental

liabilities. (Lucas.)

64.

On April 12, 1988, Payne, on behalf of

CFAC, sent a letter to ARCO, copying Lucas, stating

that it was “providing ARCO” with notice “concerning

potential Superfund cleanup requirements” at the

Site “[i]n accordance with the” Acquisition

Agreement. (Ex. 6; Lucas.) Specifically, the letter

advised that a consultant with EPA requested

information about CFAC’s “waste streams prior to

their ‘sampling [of] the plant’ ” and that EPA was

planning a site investigation. (Ex. 6; Lucas.)

65.

On April 18, 1988, Don Ryan of CFAC sent

a letter to EPA regarding the potential listing of the

Site on the National Priority List, stating, “Any

liability for these sites would be the responsibility of

ARCO.” (Ex. 7; Lucas.)

66.

On April 29, 1988, Lucas wrote to Payne to

dispute contentions CFAC had made to EPA that all

environmental liability for the Site would be ARCO’s

responsibility, stating that “[a]ny potential liability

on ARCO’s part will depend upon a combination of the

factual context as it evolves,” but that he did “not wish

to leave an impression that ARCO does not intend to

meet its contractual obligations to Montana

Aluminum Investors Corp. or that it is, at this point,

disclaiming all responsibility with respect to future

enforcement obligations which may be instituted with

respect to the Columbia Falls site.” (Ex. 8; Lucas.)

67.

On November 29,1988, Payne again wrote a

letter to ARCO, copying Lucas, advising it that

pursuant to the Acquisition Agreement, “[Montana

Aluminum Investors Corp.] is providing ARCO with

36a

notice of EPA activities regarding spent potliner

wastes” at the Site and that EPA had now listed SPL

from primary aluminum reduction as a hazardous

waste. (Ex. 10; Lucas.) Lucas testified that Payne

was “once again, giving notice of a possible indemnity

claim to [ARCO] based on the spent potliner that

[ARCO] may have disposed of at the site.”

68.

On August 24, 1990, days before the August

31, 1990 expiration of ARCO’s indemnity, Duker

copied Lucas on a letter to ARCO in which CFAC

stated it was “making a claim for damages, losses, and

out-of-pocket expenses (including attorneys’ fees)

caused by or arising out of the Columbia Falls

Aluminum Reduction Facility resulting from events

or conditions in existence prior to September 10, 1985

relating to environmental hazards which have been

identified at the plant site in Columbia Falls.” (Exs.

11, 12; Lucas.)

69.

After comparing the indemnity claims that

Duker made in his August 24, 1990 letter with

CFAC’s complaint in this case, Lucas confirmed that

many of the claims concerned the same

environmental issues, including cyanide and fluoride

in groundwater, cyanide and fluoride under the Wet

Scrubber Sludge Pond (“WSSP”), SPL in the West

Landfill, and contamination of the North and South

Percolation Ponds. (Lucas; compare Ex. 12 with Doc.

1 at ¶¶ 85–87, 99–100, 116–18, 108–12, 130.)

70.

On September 14, 1990, Floyd George, on

behalf of ARCO, wrote Duker a letter in response to

the August 24 indemnification demand. (Ex. 14.)

George was the individual tasked with keeping track

of divested assets that ARCO had sold in previous

years and he was monitoring the CFAC Agreement.

(Lucas.) Lucas assisted in drafting this letter for

37a

George’s signature. (Lucas.) In that letter, ARCO

explained that “[t]o be a claim under the Agreement,

it is necessary that by August 31, 1990, CFAC have

sustained damages, losses, or out-of-pocket expenses

caused by or arising out of an obligation or liability

relating to the smelter business resulting from

conditions existing as of the time of the sale.” (Ex. 14;

Lucas.) Because no such damages were listed in the

letter, ARCO asserted that CFAC had no valid claim.

(Ex. 14; Lucas.) The letter further explained that:

Such a potential, contingent environmental

risk or hazard, even if it were to occur in the

future, is not a claim covered within the

provisions of Section 10(a).

The indemnity sought by your letter is of an

entirely different type than that contained

in the [Acquisition] Agreement. Essentially,

CFAC is seeking indemnity for all liabilities

which might at any time arise out of conditions

existing at the site as of the date of sale. This

would be a continuing obligation of much

broader scope than that bargained for by the

parties. It would have required vastly different

language in the indemnifying clause. Instead,

what Montana Aluminum Investors Company

[sic] received was a limited indemnity designed

to protect it during the first five years of

operations against losses and other expenses

arising out of liabilities and obligations

resulting from conditions existing as of the time

of sale. This is entirely consistent with the

basic nature of the arrangement, whereby

ARCO sold the Columbia Falls assets for one

dollar. . . .

38a

The items identified in your letter do not

constitute claims within the meaning of the

Agreement and are not properly chargeable to

ARCO under the Agreement . . . .

(Ex. 14: Lucas.) This letter shows that ARCO did not

believe certain future environmental contingencies

were covered by the indemnification agreement.

71.

Nor did ARCO believe that CFAC was going

to honor the five-year expiration of the

indemnification terms. Das was the environmental

manager for ARCO when ARCO sold the CFAC plant

and was charged with assessing the potential

environmental liabilities that CFAC might assert

during the five-year period during which ARCO had

promised to indemnify CFAC. (Das.)

72.

Das’s conversations with his bosses during

this time (1988–89) indicated a concern that CFAC

would not take the five-year environmental

responsibility seriously but would continue to return

to ARCO for things it had agreed to forego. Das

therefore asked his coworkers to take copious notes

regarding all the facts and figures at that time. (Das;

see Ex. 76.)

73.

When ARCO’s indemnification obligation

expired on August 31, 1990, Das authored a

memorandum to ARCO’s management advising that:

“There should be a letter written by ARCO to [CFAC]

effectively giving notice that the five (5) year

obligation on environmental concerns has ended

effective August 31, 1990.” (Ex. 75; Das.) Based on

the proof presented at trial, no such letter was written

despite ARCO’s knowledge of CFAC’s contrary

understanding of its rights and obligations under the

Agreement.

39a

74.

And, unsurprisingly, CFAC continued to

make demands after 1990. On several occasions after

1990, CFAC sent letters to ARCO seeking

indemnification for environmental issues, for

example “the leaching of cyanide into the

groundwater from the spent pot liner placed in the

landfill.” (Ex. 274 (May 23, 1994); see also Ex. 269

(Apr. 8, 1993).) ARCO rejected these indemnification

demands for the same reasons articulated in the

September 14, 1990 letter. (See Exs. 1269, 1270.)

75.

Ultimately, however, CFAC did not assert a

right to sue ARCO under any theory other than for

indemnity under the Acquisition Agreement until the

run-up to this lawsuit. To the contrary, when the

parties discussed CERCLA or CECRA liability, it was

in the context of the non-transferrable liability that

the statute authorized regulators to impose rather

than a private-party claim. (See, e.g., Ex. 271, at

CFAC0442020; Ex. 269.)

iii. Knowledge

Environmental

Conditions

76.

In addition to the evidence discussed above,

documents related to the sale show that both sides

were equally aware of the outstanding environmental

conditions. For example, the following documents

were prepared by the ARCO Divestiture team, under

Duker:

a. A 1984 Offering Memorandum, which

stated: “Two waste landfills are currently on the

facility property. Spent pot linings from the

reduction process are the main waste disposed onsite. As a result of the Bevel [sic] Amendment, a

mining waste exemption from the Resource

Conservation and Recovery Act (RCRA), these

40a

spent pot linings are considered non-hazardous.”

(Ex. 231 at 15.)

b. A 1984 document titled “Columbia Falls

Divestiture Review: Environmental, Safety and

Health Summary” stated: “Two on-site landfills

are currently in operation: one is a sanitary

landfill for non-hazardous wastes; the second is for

the disposal of spent cathodes. (Spent cathode

materials are likely to receive future classification

as hazardous wastes by EPA.) Three closed on-site

landfills are present: the first was a sanitary

landfill; the second contains spent cathodes; and

the third is believed to have been used for the

disposal of all plant wastes, possibly including

hazardous wastes. An open, but inactive, calcium

fluoride sludge pond is also present.” (Ex. 1181.)

c. A 1984 Due Diligence Review Report of the

operations at the plant conducted by the ARCO

Divestiture team found: “One groundwater

monitoring well (#TW1) has elevated levels of

cyanide and fluoride . . . . Two on site landfills are

currently in operation . . . . The second is for the

disposal of spent cathodes from the potlines. This

material is currently classified as non-hazardous

but is expected to be reclassified as hazardous at

some future date . . . . There are three closed

landfills at the facility . . . the second contains

spent cathode materials.” (Ex. 71 at 7–8; Das.)

77.

Publicly available documents also described

the environmental issues at the Site. For example,

the August 10, 1984 public notice of the issuance of

the Montana Groundwater Pollution Control System

Permit for the Site stated: “The groundwater under

the facility may be somewhat contaminated with

41a

cyanide and fluoride from historic operations at the

site.” (See Ex. 1192 at 10.)

iv. Conclusion

78.

The plain language of the Agreement

cannot be read as broadly as ARCO insists because

waivers of statutory rights must be specific under

Montana law. As a result, “claims” as outlined in

§ 10(a) do not include independent, statutory claims.

79.

But even if ARCO’s reading were tenable,

making the provision ambiguous, the extrinsic

evidence shows only that while the parties were both

aware of the environmental conditions of the Site and

environmental conditions fell within the Agreement,

CFAC took every opportunity to attempt to hold

ARCO liable under the terms of the indemnification

provision for the existing environmental conditions at

the Site. That evidence does not show that either side

intended the Agreement to foreclose all future

statutory claims.

80.

As a result, ARCO’s claimed covenant not to

sue does not foreclose the present claims.

2. Assumption

Environmental

Liabilities

81.

ARCO’s second defense is that Section 10(b)

shifted liability for pre-closing environmental

conditions to CFAC at the time of the sale.

82.

In 2019, ARCO sought judgment on the

pleadings on the ground that CFAC assumed all

environmental liabilities at the Site once ARCO’s

indemnification obligation expired. (See Doc. 34

at 11.) While ARCO correctly argued that such an

assumption of liability was permissible under the law,

(see Doc. 49 at 5–6), it was previously determined that

the Agreement was ambiguous concerning whether

42a

its reference to costs “relating to the operation and

Smelter Business” included environmental liabilities

and whether CFAC assumed those liabilities after

ARCO’s indemnity obligation expired, (see id. at 12–

14). That finding meant that extrinsic evidence was

necessary to ascertain the intent of the parties. (Id.

at 15.)

83.

Under Montana law, an indemnity

agreement is interpreted like any other contract and

a court’s job “is simply to ascertain and declare what

is in terms or in substance contained therein, not to

insert what has been omitted or to omit what has been

inserted.” Ohio Farmers Ins. Co., 386 P.3d at 616

(quoting Mont. Code Ann. § 1-4-101). “To the extent

that there is ambiguity, indemnity clauses generally

should be liberally construed in favor of the party

intended to be indemnified.” A.M. Welles, Inc., 342

P.3d at 989 (internal quotation marks omitted).

84.

As shown above, the evidence confirms the

parties intended the indemnity provisions in Article

10 of the Acquisition Agreement to cover

environmental liabilities. The remaining question is

whether the parties also intended to shift all liability

for environmental conditions that existed at the time

of the sale but resulted in damages, losses, and outof-pocket expenses to CFAC after August 31, 1990.

85.

Neither ARCO nor CFAC presented

extrinsic evidence on this point. But, contrary to

ARCO’s position, that absence weighs in favor of

CFAC. As explained in this Court’s previous order,

despite Montana’s admonition to liberally construe

indemnification provisions, see A.M. Wells, Inc., 342

P.3d at 989, a party cannot assume CERCLA liability

passively; either the contract must specifically

provide for such an assumption or it must be so broad

43a

as to leave no question as to that assumption. This

Agreement does neither. To the contrary the evidence

shows that there was extensive correspondence

between ARCO and Montana Aluminum Investors

Corp. (via Duker) in 1985 that evaluated a variety of

costs, liabilities, and savings under both a

shutdown/liquidation scenario and the terms of

Duker’s offer; however, that correspondence made no

mention whatsoever of existing, future, or contingent

environmental liabilities. (See Exs. 112, 237, 238,

240, 241, 242, 243, 849.)

86.

Moreover, in 1985, ARCO was a

sophisticated party and the subject of several

CERCLA lawsuits, including at least one in Montana,

and had also been deemed a CERCLA potentially

responsible party (“PRP”) at 24 sites by EPA and/or

individual states. (See Ex. 1017 at ARC-0000565253.)

87.

While the evidence shows both parties were

aware of the environmental conditions at the Site,

neither the plain language of the Agreement nor the

parties’ conduct shows that they intended for CFAC

to assume all the environmental liabilities for the Site

as part of its post-closing operations.

3. Conclusion

88.

Because neither the language of the

Agreement nor the parties’ intent as distilled from

extrinsic evidence shows that CFAC agreed to

forego a CERCLA claim related to environmental

conditions or assumed all such liability, resolution

on the merits can proceed.

Nevertheless, the

circumstances surrounding the 1985 Agreement

support allocating the greater cleanup responsibility

to CFAC.

44a

IV.

SITE OVERVIEW

Waste Streams

89.

Several different waste streams were

created during the course of aluminum production at

the Site. Approximately 40 chemicals were identified

as contaminants of potential concern. (Ex. 134 at

25.)2 Of primary concern here are cyanide and

fluoride in the groundwater, (Ex. 134 at 25–26), as

well as polycyclic hydrocarbons (“PAHs”) and

polychlorinated biphenyls (“PCBs”) in the soils, (Ex.

134 at 27–28). (See also Ex. 868 at 33–39.)

90.

Cyanide, fluoride, arsenic, and PAHs are

each “hazardous substances” pursuant to 42 U.S.C.

§ 9601(14). (Agreed COL ¶ 6.)

1. Spent Potliners (“SPL”)

91.

Over the lifetime of an aluminum pot,

sodium in the cryolite bath gradually penetrated the

potliner in the pots, causing the carbon to swell and

eventually fail. Periodically, a pot was taken out of

production and the spent potliner (“SPL”) was

removed from its steel shell and insulating brick layer

and replaced with a new carbon lining. (Agreed ¶ 13;

Ex. 134 at 45–46.)

92.

The SPL consisted of a thick layer of carbon

bonded to an insulating brick layer that had become

contaminated with cyanide, fluoride, sodium, and

aluminum by the time of its removal. The fluoride

and sodium in the SPL came from the sodium fluoride

At the time the parties filed their proposed findings of fact

and conclusions of law, the Final Feasibility Study had not yet

been approved. (See Ex. 868.) As a result, many of the citations

in their proposed findings are to the Remedial Investigation

Report. The findings in the two documents are, with minor

exception, consistent with one another.

45a

(cryolite) bath, and the cyanide formed in the cathode

as a side chemical reaction during aluminum

production. (Agreed ¶ 14; Ex. 134 at 45–46.) When

exposed to rainwater, the cyanide and fluoride in the

SPL can leach into the groundwater. (Baris.)

93.

EPA first proposed SPL for listing as a

hazardous waste pursuant to the federal Resource

Conservation and Recovery Act, 42 U.S.C. §§ 6901 et

seq. (“RCRA”) in 1980, but before that listing became

effective EPA suspended the listing of SPL because it

determined SPL was excluded from regulation under

the recently enacted Solid Waste Disposal Act

Amendments of 1980. (Ex. 855.) EPA then relisted

SPL as a hazardous waste in September 1988, (Ex.

1271), which became effective in Montana when the

State of Montana classified SPL as K088 hazardous

waste under RCRA, effective March 15,1991, (see Ex.

258). (Agreed ¶ 15.)

94.

Between approximately 1960 through

approximately 1980, ARCO disposed of between

129,000 and 135,000 tons of SPL in two unlined

landfills: the West and Center Landfills. (Baris; Ex.

90; Ex. 226 at 2.) Both ARCO and CFAC also disposed

of SPL in a lined landfill, the East Landfill, from 1980

to 1990. (See Ex. 275 at 2.) After 1990, SPL was

shipped off-Site for disposal. (Baris; Ex. 134 at 46; see

also Exs. 254, 255.)

95.

SPL at the Site was sampled at various

times. Samples taken during ARCO’s tenure in 1980

showed 36 milligrams per liter (mg/L) of cyanide in

pot bottoms from a landfill, 16 mg/L of cyanide in SPL

from a carbon pile face, and 0.42 mg/L of cyanide in

crushed pot bottom extract. (Ex. 126 at 67.) During

CFAC’s tenure, samples of “typical” SPL at the Site

were taken in January 1988 and March 1992 which

46a

were found to contain 0.1 percent cyanide and 16

percent fluoride. (Exs. 249, 261; Baris.)

2. Wet Scrubber Sludge

96.

Operations of the aluminum reduction pots

generated air emissions containing fluoride, PAHs,

and other contaminants.

For example, PAHs

associated with the electrolytic process would migrate

out from the potline building into the atmosphere.

From there, they would disperse across the Site and

be deposited on soil. ARCO controlled emissions from

potlines using wet scrubbers until the late 1970s,

when it replaced them with dry scrubbers. (Baris; Ex.

134 at 46.) Unlike with the wet scrubbers, residue

from the dry scrubbers was recycled back into the

aluminum reduction process. (Ex. 1177 at ARC00002803.)

97.

It is not possible to distinguish between

PAHs produced during either the ARCO or CFAC

period. (Baris).

98.

ARCO landfilled the sludge generated from

its wet scrubbers at the Wet Scrubber Sludge Pond

(“WSSP”). An analysis of the sludge indicated that it

contained approximately 80 percent calcium fluoride

on a dry-weight basis, and also contained calcium

oxide, magnesium oxide, sodium oxide, and iron

oxide. (Agreed ¶ 16; Ex. 134 at 46.) ARCO disposed

of sludge from approximately 1955 until 1977, when

the wet scrubbers were decommissioned. (Wright.)

ARCO did not dispose of SPL in the WSSP. (Wright.)

3. Soaking Pits

99.

Between approximately 1964 and 1977, as

part of its SPL removal process, ARCO constructed

pits at the Site at the northern end of the Main Plant

Area in which it placed spent pots and filled them

47a

with water to help loosen and release the SPL

(holding each pot for about 8 hours to also cool them).

Water used to release the liner, which became

contaminated with cyanide and fluoride, was drained

to the Northeast and Northwest Percolation Ponds

(“North Percolation Ponds”). (Exs. 122A, 122B, 814,

815, 827; see also Ex. 250 at 16.)

100. ARCO processed an estimated 1,800 pots

through the soaking pits, using about 100,000 gallons

of water for each pot. As a result, roughly 180 million

gallons of water passed through the soaking pits to

the North Percolation Ponds during their

approximately 14 years of operation. (Ex. 815; see

also Ex. 260 at 22.)

101. This water contained hazardous substances

including cyanide, fluoride, and PAHs. Given

attenuation and groundwater flows, however, the

water ARCO disposed of in the North Percolation

Ponds is no longer contributing cyanide and fluoride

to the groundwater today. (Baris; Otis.)

4. Other Wastes

102. Besides the SPL and the wet scrubber

sludge, operations at the Site resulted in the

generation of a variety of wastes which were disposed

of at different areas, including the North Percolation

Ponds, the Industrial Landfill, the Asbestos Landfills,

Soils North of Main Plant Building and immediately

adjacent to the landfills, and the South Percolation

Ponds. Additionally, drummed liquid wastes were

stored in the Former Drum Storage Area prior to

offsite shipment and disposal. (Agreed ¶ 17; Ex. 134

at 28–30.)

103. Liquid waste generated as a result of the

aluminum reduction process and stormwater were

48a

discharged to the North Percolation Ponds. (Agreed

¶ 18; Ex. 134 at 46.)

104. Throughout the Site’s operations, landfills

at the Site were used to dispose of plant wastes,

including aluminum dross, solvents, potliner

refractory wastes (non-hazardous)—likely the scrap

calcined petroleum coke, ore, cryolite (including

aluminum fluoride), brick, concrete, scrap metal,

wood, used oil, and plant trash and other municipal

solid waste. (Ex. 134 at 46.) Additionally, spills

sometimes occurred during the transportation and

transfer of industrial material for use at the facility,

and of waste products. (Williams; Batson.)

5. Technological Advancements

105. ARCO made several upgrades to the facility

between 1977 and 1981 that improved its

environmental performance.

106. In 1980, ARCO completed a major capital

expenditure program at the facility, at a cost of $32

million, to reduce fluoride emissions to meet revised

emissions standards, and it made an additional

capital expenditure of $5 million for the installation

of a dry scrubbing system to maintain compliance

with the standards. (Williams: Ex. 231.)

107. ARCO also completed the installation of

Sumitomo process technology at the aluminum

reduction plant in 1981 at a cost of approximately $42

million, which substantially reduced air emissions

and power consumption, improved materials

handling, and reduced the volume of SPL generated

by the facility. (Williams; Ex. 1177 at ARC-00002803;

Ex. 18 at 9; see also Exs. 221, 222, 224, 225, 228.)

49a

6. Permitted Discharges

108. During historical facility operations,

wastewater generated because of the aluminum

reduction process was discharged to several surface

impoundments at the Site, from which it then

discharged indirectly to groundwater.

These

discharges were undertaken in accordance with

several permits issued by the Montana Department of

Health and Environmental Sciences (“MDHES”),

subsequently renamed the Montana Department of

Environmental Quality (“MDEQ”). (Wright.)

109. ARCO applied for a groundwater discharge

permit sometime in or before May 1983. (See Ex. 825.)

MDHES inquired about the source of “elevated

cyanide and fluoride levels in some of the test wells,”

(Ex. 826), and was informed it was likely from the

“past practice” of discharging pot soaking to the North

Percolation Ponds, (Ex. 827).

110. On September 17, 1984, MDHES issued

Ground Water Pollution Control System Permit

Number MGWPCS-0005 to ARCO, allowing certain

discharges to the surface impoundments and

indirectly to groundwater, prohibiting degradation of

groundwater beyond the property boundary, and

requiring, among other things, submission of a

hydrogeologic report within one year that would

summarize groundwater conditions at the Site and

make recommendations regarding the existing

monitoring system and continuing management of

wastes present at the Site. (Ex. 1218; Ex. 134 at 46;

see also Ex. 250 at 16.) Related to this permit and

discussed in more detail below, both parties

discharged leachate onto the WSSP during their

respective tenures. ARCO did so twice, and CFAC did

so three times.

50a

111. In 1993, CFAC applied for a Montana

Pollutant Discharge Elimination System (“MPDES”)

permit for the groundwater contaminated by

historical SPL disposal practices, released via a seep

to the Flathead River. On May 1, 1994 MDHES

issued Permit No. MT-0030066, which authorized

process wastewater discharges to specified receiving

ponds and to groundwater. The permit included

specific conditions requiring CFAC to cap the West

Landfill and investigate Site hydrology to track the

cyanide concentrations in groundwater from the

landfill to the Flathead River. (Wright; Ex. 272; Ex.

134 at 46.) CFAC placed a synthetic cap on the West

Landfill

and

continued

track

cyanide

concentrations in groundwater. (Wright; Ex. 134 at

52; Ex. 275.)

112. Permit No. MT-0030066 was reissued in

1999, (Exs. 272, 273), and terminated in 2019,

(Wright; Ex. 285).

113. Related to the 1999 permit, in August 1991,

MDEQ performed a groundwater inspection at the

Site, which concluded that groundwater was

contaminated and that elevated levels of cyanide were

present in the seeps that were discharging from the

Site into the Flathead River, which MDEQ

determined was an unauthorized discharge of

pollutants by CFAC. (Ex 62 at 1; Wright.) While

CFAC agreed to increase monitoring and install new

sampling wells, those seeps remained active. As a

result, on December 4, 1996, EPA issued a Notice of

Violation to CFAC for violation of Section 301(a) of the

federal Clean Water Act for the unauthorized

discharge of cyanide-contaminated seepage from

the Site into the Flathead River. (Ex. 64; Wright.)

And, on January 13, 1997, MDEQ issued a Notice

51a

of Violation to CFAC for violation of the Montana

Water Quality Act, Mont. Code Ann. § 75-5-605,

for the unpermitted discharge of industrial waste

to the Flathead River. (Ex. 64; Wright.) Instead of

addressing the cyanide-contaminated seeps, CFAC

requested and obtained permission from MDEQ to

modify its MPDES permit to allow for a “mixing zone”

in the Flathead River, wherein MDEQ would allow

cyanide concentrations in the Flathead River to

exceed State water quality standards as a result of

the discharge of cyanide-contaminated seepage from

the CFAC Site. (Ex. 1242; Wright.)

114. On July 25, 2014, MDEQ issued a revised

MDPES permit to CFAC that effectively eliminated

the mixing zone that would have allowed CFAC’s

exceedances of the cyanide water quality standard

in the Flathead River to continue (Ex. 66 at ¶ 125–27;

Wright.)

CFAC appealed, but the permit was

terminated on April 17, 2019 because of the closure

of the facility. (Ex. 217; Wright.) However, the

discharge of cyanide-contaminated seepage from the

Site into the Flathead River continues today.

(Wright.)

115.

Site

Area

West

Landfill

Site Conditions

There are eleven Site-specific areas at issue:

User:

Years of

Operation

ARCO:

approx.

1960-1980

Construction Use /

Type of

Waste

Unlined

Used for

bottom

disposal

Earthen cap

of: SPL

1981

(1960Clay cap 1992 1970)

52a

Site

Area

User:

Years of

Operation

Center

Landfill

ARCO:

approx.

1970-1980

East

Landfill

ARCO:

1980-1985

CFAC:

1985-1990

Wet

Scrubber

Sludge

Pond

(“WSSP”)

ARCO:

approx.

1955-1979;

discrete

disposal

events

between

1983-1984

CFAC:

discrete

disposal

events

Construction Use /

Type of

Waste

Synthetic cap Sanitary,

municipal

1994

solid waste

(steel, wood,

strapping,

scrap from

shops)

Unlined

Used for

bottom Clay

disposal of

SPL,

cap 1980

sanitary,

scrap from

shops

Clay liner

Used for

disposal of

bottom

SPL (1980Clay cap &

synthetic cap 1990)

1990

Unlined

User for

bottom

disposal of:

Earthen cap

calcium

fluoride wet

1981

scrubber

sludge

(approx.

1955-1979);

leachate

(1983, 1984,

1987, 1989,

1994); pot

diggings

53a

Site

Area

Former

Drum

Storage

Area

South

Percolation

Ponds

Northeast

Percolation

Ponds

User:

Years of

Operation

between

1987-1994

Construction Use /

Type of

Waste

(1993-1994,

partially

excavated

1998)

ARCO:

Earthen

Used as

approx.

unlined

storage

area for

1980-1985

storage pad

drums of

CFAC: 1985RCRAunknown

listed

(before

wastes for

1996)

shipment

offsite

ARCO:

Unlined

Used to

receive

1955-1985

bottom

wastewater

CFAC:

from:

1985-2009

sewage

treatment,

cooling of

equipment

ARCO:

Unlined

Used to

receive

1955-1985

bottom

wastewater

CFAC:

from

1985-2009

operations

in Main

Plant Area,

including

water from

SPL

54a

Site

Area

User:

Years of

Operation

Northwest

Percolation

Ponds

ARCO:

1970s-1985

CFAC:

1985-2009

Soils

North of

Main

Plant

Building

ARCO:

1955-1985

CFAC:

1985-2009

Industrial ARCO:

Landfill 1980-1985

CFAC:

1985-2009

Construction Use /

Type of

Waste

soaking

operations

(1964-1977)

Assumed

Used to

unlined

receive

wastewater

bottom

from

operations

in Main

Plant Area,

including

water

from SPL

soaking

operations

(1964-1977)

(Soils near

Used as

operations

facility

area; not an

operations

intended

area (no

disposal area) intentional

disposal)

Assumed

Used for

unlined

disposal of:

scrap

bottom

metal,

Closed 2009

wood,

municipal

solid

waste

55a

Site

Area

User:

Years of

Operation

Asbestos ARCO: late

Landfills 1970s-1985

(North

CFAC:

1985-2009

South)

Construction Use /

Type of

Waste

Assumed

Used for

unlined

disposal of:

bottom

asbestos

Closed 2009

(earthen cap)

(Ex. 868 at 76.) These individual areas are discussed

in more detail below.

1. West Landfill

116. The West Landfill is located in the northern

portion of the Site, north of and adjacent to the WSSP:

56a

(Agreed ¶ 27; Ex. 848 at 7; see also Ex. 134 at 304.)

57a

117. The West Landfill comprises approximately

7.8 acres, with areal dimensions of approximately 615

feet by 600 feet. (Agreed ¶ 28; Ex. 868 at 21.) The

landfill is unlined, extends approximately 15 to 22

feet below surrounding grade and rises approximately

13 to 20 feet above grade. (Ex. 868 at 21.) Impacted

soil beneath the landfill, however, could be as thick as

115 feet. (See Ex. 868 at 21.)

118. Groundwater levels around the West

Landfill range from approximately 36 feet to 87 feet

below surrounding grade. (Ex. 868 at 21.)

119. The West Landfill was used to dispose of

SPL and other wastes (sanitary, industrial, and

reportedly solvents) through 1980, (Agreed ¶ 29),

although SPL disposal reportedly ended in 1970, (Ex.

134 at 52). The landfill was closed in 1981 with a clay

cap and a synthetic cap was added in accordance with

CFAC’s MPDES Permit No. MT-0030066 in 1994.

(Baris; Ex. 134 at 52; Ex. 868 at 21; Ex. 272.)

120. By June 11, 1980, ARCO had disposed of

approximately 61,800 tons of SPL (carbon plus

refractory) in the West Landfill. (Baris; Ex. 226 at 2.)

And, as of July 1980, detectable amounts of cyanide

and fluoride had traveled from the SPL in the West

Landfill into underlying soils. (See Ex. 1081 at 44.)

121. By April 22, 1981, ARCO had disposed of

approximately 68,000 tons of “total material” in the

West Landfill, including 410 tons of cyanide and

13,000 tons of sodium fluoride. (Baris, Ex. 90.)

122. Although no soil or groundwater samples

have been collected beneath the West Landfill, the

long-term persistence of cyanide in groundwater

directly downgradient of the landfill coupled with a

low-permeability cap in place since 1994 indicates

58a

that impacted material likely extends into and

beneath the seasonal high-water table and is serving

as a continuing source of contamination. (Baris; Ex.

868 at 22.) This is discussed in more detail in the

“Groundwater” section.

123. EPA has indicated that it is not feasible to

either leave the West Landfill as is or simply upgrade

the cap. (Baris.) Rather, the Final Feasibility Study

Report recommends a range of alternatives from the

construction of a slurry wall to excavation of the

landfill with onsite consolidation. (Ex. 868 at 150.)

2. Wet

Scrubber

Sludge

Pond

(“WSSP”)

124. The WSSP is located directly south of and

adjacent to the West Landfill. (Agreed ¶ 30; Ex. 134

at 304.)

125. The WSSP is approximately 10.8 acres in

size with areal dimensions of approximately 750 feet

by 580 feet. (Agreed ¶ 31; Ex. 134 at 52.) The total

depth of the waste material is approximately 30 feet,

half of which is above grade. (Ex. 868 at 22.)

Groundwater levels beneath the WSSP range from 60

to 105 feet below grade. (Ex. 868 at 22.)

126. The WSSP received waste material from the

wet scrubbers under ARCO from 1955 to 1980, when

they were replaced with dry scrubbers that produced

less waste. (Baris; Otis; Wright; Ex. 134 at 139.)

During this period, ARCO disposed of an estimated

450,000 cubic yards of calcium fluoride sludge or wet

scrubber sludge in the WSSP. (Baris; Ex. 88 at 7.)

127. This calcium fluoride sludge contained

fluoride but did not contain cyanide. (Wright.)

Specifically, the sludge was approximately 80 percent

calcium fluoride (CaF2) on a dry weight basis, with

59a

small amounts of calcium oxide (CaO), magnesium

oxide (MgO), sodium oxide (Na2O), and iron oxide

(Fe2O3). (Ex. 134 at 139.)

128. The WSSP is unlined, (Baris), but was

capped with an earthen cap in 1981 and revegetated,

(Ex. 868 at 22).

129. Aside from the sludge disposed of by ARCO,

two other types of disposals into the WSSP implicate

future cleanup costs. First, both ARCO and CFAC

transferred leachate to the WSSP at discrete times

to prevent overflow of the Leachate Ponds. Second,

CFAC disposed of pot digging into the WSSP in 1993

or 1994. These discharges are discussed in more

detail below.

i. Leachate

130. SPL contains cyanide and fluoride, which,

when exposed to rainwater, can generate “leachate”

containing those constituents that can then migrate

into other surface or groundwater. (Baris.)

131. After construction and expansion of

the East Landfill and its associated Leachate Ponds

in 1980–82, ARCO discovered that, despite their

capacity of 900,000 gallons, heavy seasonal

precipitation could cause the Leachate Ponds

to overflow.

(Baris; Ex. 89 at 2.)

To avoid

contamination of the groundwater during an

overflow, transfer of the extra leachate to the WSSP

was viewed as a more environmentally sound option.

(Baris.)

132. Evidence suggests that ARCO disposed of

excess leachate this way at least twice, likely in 1983

and 1984. (Baris; Exs. 99, 102; see also Exs. 51, 840;

Ex. 89 at 2.) Documents conflict as to whether these

leachate disposal events totaled 800,000 gallons of

60a

leachate each time, (Ex. 99 at 12), or totaled 80,000

gallons on one occasion and 80,000 or 100,000 gallons

on the other, (Ex. 102). There is no trial witness

with personal knowledge of the 1983 or 1984 leachate

disposal events. (Wright.)

133. ARCO did not inform the State of Montana

about its leachate disposals. But CFAC disclosed

them to MDHES, in November 1985, approximately

two months after CFAC acquired the facility. (Ex. 99

at 1.)

134. CFAC disposed of excess leachate into

the WSSP on three occasions: 1987, 1989, and 1994.

The 1987 disposal involved approximately 400,000

gallons with a cyanide contamination level of

0.479 mg/L, (Exs. 52, 53), the 1989 disposal involved

approximately 150,000 gallons with a cyanide

contamination of 3 mg/L, (Ex. 56 at 1), and the 1994

disposal involved approximately 400-500,000 gallons

with a cyanide contamination of 0.44 mg/L, (Ex. 57 at

1). CFAC received MDEQ approval for all three

discharges. (Wright; but see Williams (opining that

1994 disposal was not properly authorized).)

135. Both ARCO and CFAC used methods to

reduce contamination, such as aeration, bleach, and

UV. (Williams; Wright.) Percolation of the leachate

through the calcium fluoride sludge was also effective

in reducing both cyanide and fluoride concentrations

in the leachate disposed of by both parties. (Baris; see

Ex. 54.)

ii. Pot Diggings

136. Around 1993 or 1994, CFAC conducted an

experiment to improve pot operation, which involved

opening approximately 120 of the facility’s 600 pots to

remove “muck” consisting of undissolved alumina ore

61a

and anode carbon dust. (Baris; Ex. 58 at 4.) CFAC

then planned to “reuse” material dug out from the

pots. (Baris.) Other than these specific pots, during

this period CFAC was sending its SPL off-Site for

disposal. (Wright.)

137. In this process, a backhoe was used to

remove the material from the pots and some of the pot

diggings material (clean cryolite bath) was recycled

back into the pots. Pot digging material that could

not be re-used at the time was transported to

the closed WSSP. (Ex. 58 at 4.) These materials,

however, were not supposed to contain SPL as pot

diggings are not generally considered hazardous.

CFAC did not put a liner under the pot diggings when

they were placed, nor did CFAC put a cover on the

diggings. (Wright.) This experiment was abandoned

after digging 120 pots when it was determined the

improvements in pot operations did not justify the

efforts. (Wright.)

138. On November 12, 1997, CFAC personnel

discovered pieces of carbon in the pot diggings

material, which upon closer inspection was found to

contain both anode carbon and cathode carbon. CFAC

investigated the origin of the carbon and concluded

that, although care was used when digging the pots,

the backhoe inadvertently removed pieces of cathode

carbon pot liner along with the muck. (Wright; Ex. 58

at 4.)

139. The next day, November 13, 1997, CFAC

reported its discovery of the cathode carbon to MDEQ.

(Ex. 58 at 5.) CFAC paid a fine and was given a

violation. (Wright.)

140. Sampling results indicated that total

cyanide content of the cathode carbon was below the

62a

detectable limit of 0.05 mg/L. CFAC estimated the

size of the total pot diggings material to be 1,800 cubic

yards. However, the carbon material deemed by

MDEQ to meet the definition of K088 SPL, a listed

hazardous waste, was estimated to have a volume of

between four and six cubic yards and a total weight of

14,340 lbs. (Baris; Wright; Ex. 58 at 5.)

141. On February 23, 1998, in coordination with

MDEQ, CFAC began excavating the carbon material

from the pot diggings, completing the excavation on

April 16, 1998, and notifying MDEQ of completion.

(Baris; Ex. 58 at 5.)

142. Results of cyanide sampling at the pot

diggings location around the time of the carbon

excavation ranged from a “non-detect” result to a

maximum of 2.1 milligrams per kilogram. (Baris;

Exs. 58, 59, 60.) These cyanide concentrations are

consistent with concentrations in soil across the Site

that did not have any contamination. (Baris.) MDEQ

did not request analysis of fluoride levels. (Baris.)

143. On

October

14,

1998,

MDEQ—in

correspondence copying EPA—notified CFAC and

EPA that “the State will require no further clean-up

action for the waste pile material or soil under the

pile.” (Ex. 60; Baris.)

3. Center Landfill

144. The Center Landfill is located east of the

West Landfill, south of the Sanitary Landfill, and

west of the East Landfill. (Agreed ¶ 32; Ex. 134 at

304.) The Center Landfill is unlined. (Baris.)

145. The Center Landfill is approximately 1.8

acres in area, in a circular shape, with a diameter of

approximately 330 feet. The Center Landfill was

historically referred to as the carbon mound or carbon

63a

pile. The landfill was constructed above grade and is

approximately 15 feet above surrounding grade. The

geophysical survey indicates an approximate

thickness between 15 and 30 feet of landfill material.

Groundwater levels around the Center Landfill range

from approximately 57 feet to 139 feet below

surrounding grade. (Ex. 868 at 22.)

146. By 1980, according to internal ARCO

records, ARCO had disposed of approximately 67,200

tons of SPL at the unlined, uncapped Center Landfill.

(Ex. 226 at 2; see also Ex. 90.)

147. Around 1980, concurrent with or shortly

after construction of the East Landfill, a clay cap was

placed on the Center Landfill, as was approximately

18 inches of till. (Agreed ¶ 33; Ex. 134 at 53.)

148. Although not a primary source, the Center

Landfill is considered a secondary source of cyanide

and fluoride contamination of the groundwater. (Ex.

134 at 30; Ex. 868 at 56.)

4. East Landfill

149. The East Landfill is located on the

northeastern border of the Superfund site, directly

East of the Cedar Creek Reservoir Overflow Ditch.

It was built along with, and sits between, the lined

North Leachate and South Leachate Ponds. (Agreed

¶ 38; Ex. 868 at 23.)

150. The

East

Landfill

encompasses

approximately 2.4 acres and is 330 feet by 730 feet.

(Ex. 868 at 23.) It is approximately 30 feet above

grade, with an approximated depth of 40 feet.

(Ex. 868 at 23.) Groundwater levels around the

East Landfill are approximately 109 to 130 feet below

grade. (Ex. 868 at 23.)

64a

151. The East Landfill was built with a clay liner

and capped with a 6-inch clay layer, a synthetic cap,

and an 18-inch vegetated cover. (Baris, Ex. 868 at 23.)

152. The East Landfill was operated from 1980

to 1990 for disposal of SPL. (Ex. 134 at 53.) Both

ARCO and CFAC each disposed of SPL at this

location for approximately five years and it is

estimated that the volume of SPL in the landfill

totaled approximately 65,042 tons. (Ex. 275 at 2.)

153. However, unlike the other two landfills

where SPL was historically disposed (the West and

Center Landfills), the East Landfill is not a

contributing source to cyanide and fluoride in

groundwater. (Baris.) The cyanide and fluoride

concentrations in groundwater to the east and

northeast of the West Landfill and WSSP, and

immediately downgradient of the East Landfill,

Leachate Ponds, and Sanitary Landfill, are generally

orders of magnitude lower than those downgradient

of the West Landfill and WSSP. (Agreed ¶ 39; Ex. 134

at 140.)

154. For example, the maximum cyanide and

fluoride concentrations in groundwater immediately

downgradient of the East Landfill were 203 μg/L3 and

736 (μg/L, respectively, both in monitoring well

CFMW-023. Immediately downgradient of the West

Landfill and WSSP, cyanide concentrations ranged

from 2,060 μg/L to 11,500 μg/L and fluoride

concentrations ranged from 4,110 μg/L to 55,300 μg/L.

(Ex. 134 at 140–41.)

155. The East Landfill was also built with two

lined leachate collection ponds. (Ex. 868 at 23.)

Micrograms per liter.

65a

156. The North Leachate Pond is approximately

0.6 acres in size and has a Hypalon liner. This pond

received stormwater runoff and leachate from the

East Landfill and was hydraulically connected to the

WSSP by a drainage pipe. The pond was aerated to

reduce concentrations of cyanide and then closed in

1994. (Ex. 868 at 23.)

157. The South Leachate Pond is approximately

0.9 acres in size and was also constructed to receive

stormwater runoff and leachate from the East

Landfill. It was also hydraulically connected to

the WSSP.

The pond was aerated to reduce

concentrations of cyanide and then emptied in 1990

and dried, capped, and closed in 1993. (Ex. 868 at 23.)

5. Industrial Landfill

158. The Industrial Landfill is an inactive,

uncovered landfill of unknown depth located in the

northern portion of the Site, northwest of the West

Landfill and North Asbestos Landfills. (Baris; Agreed

¶ 44.) It encompasses approximately 12.4 acres. (Ex.

868 at 23.)

159. Based on aerial photography, the Industrial

Landfill began operations in the 1980s and received

non-hazardous waste and debris until landfilling

operations ceased in October 2009. (Ex. 868 at 23.)

160. The Industrial Landfill is contaminated

with PAHs. (Ex. 134 at 141.) Although the Industrial

Landfill may potentially be contributing to the PAH

detections in groundwater at the Site, fluoride

and cyanide concentration levels immediately

downgradient of the Industrial Landfill indicate that

it is not a significant contributing source to the

cyanide and fluoride in groundwater at the Site.

(Baris; Ex. 134 at 141.)

66a

161. The Industrial Landfill has been identified

as a potential remediation location to place other onsite soils after excavation. (Baris.)

6. Asbestos Landfill

162. Two areas within the Site were identified as

being former asbestos landfills: one north of the West

Landfill and one south of the East Landfill. They

were constructed in the late 1970s or early 1980s and

were used from 1993 to 2009. There is evidence of an

engineered cap or liner. (Ex. 868 at 24.)

163. Superficial sampling of surface soils shows

“there is no potential exposure for asbestos by human

receptor activity in the area.” (Ex. 134 at 141.)

However, soil-disturbing activities may expose

asbestos. (Ex. 134 at 141.)

7. Former Drum Storage Area

164. The Former Drum Storage Area was 250

feet by 200 feet and located west of the WSSP.4 (Ex.

209 at 63.)

165. The Former Drum Storage Area was used

for the temporary storage of drums of RCRA-listed

hazardous substances, primarily spent solvents, for

shipment offsite beginning in 1980. (Agreed ¶ 42; Ex.

209 at 63.) There is no indication that SPL was ever

stored in this area. (Baris.) This area was no longer

used by 1996. (Agreed ¶ 43; Ex. 1251 at 20.)

166. The surface soil of the Former Drum

Storage Area is contaminated with PAHs, metals,

cyanide, and fluoride. (Agreed ¶ 41.) However, the

decrease in concentration with depth and the absence

A smaller size of 60 square feet was discussed at trial. (See

testimony of Williams). The discrepancy may be attributed to

the difference in size between the area overall and the size of the

paved asphalt pad.

67a

of any observed waste materials suggest that this

area is not a primary contributor to groundwater

contamination. (Ex 868 at 56; Baris.) The cyanide

concentration levels in the soil briefly peaks

approximately 0.5 to 2 feet below surface level before

dropping off. (Baris.)

167. Potential remediation would require only

the excavation and removal of soil to other onsite

locations, such as the Industrial Landfill. (Baris.)

8. Soil North of Main Plant Buildin

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.