Petition for Writ of Certiorari — Litton Industrial Automation Systems, Inc. v. General Electric Co.

Supreme Court brief1991

Ask Donna

What actually matters in this document.

Text

jUs1T2BP4a BILED

eal YAN 31 199)

QUOSNPH F. SPANIOL, J

. OLERK

IN THE

SUPREME COURT OF THE UNITED S i

October Term. 1990

LITTON INDUSTRIAL AUTOMATION SYSTEMS. INC.

and LITTON INDUSTRIES. INC..

Petitioners

GENERAL ELECTRIC COMPANY.

Respondent

On Writ of Certiorari to the United States

Court of Appeals for the Eighth Circuit

PETITION FOR WRIT OF CERTIORARI

Bruce W. Kauffman

Counsel of Record

Sheryl L. Auerbach

Mark J. Levin

DILWORTH, PAXSON, KALISH

& KAUFFMAN

2600 The Fidelity Building

Philadelphia, PA 19109

215) 875-7000

Theodore F. Crave

Mark Stanga

Litton Industries. Ine

Attorneys for Petitioners

PACKARD PRESS LEGAL DIVISION, 1617 JFK BOULEVARD, PHILA, PA. 19103 (215) 563-9000

QUESTIONS PRESENTED

1. Whether under the Comprehensive Environmental Re-

sponse, Compensation and Liability Act (“CERCLA”), 42

U.S.C. §§9601 et seqg., a voluntary cleanup of property by a

private party that

— does not involve an imminent threat of harm to public

health or the environment

— spans more than one year and permanently cleans up the

property using an unnecessarily expensive remedial

alternative and

— is caused solely by the private party's desire to reap a

windfall profit and avoid fraud claims by a third party

constitutes a “removal action”, enabling the private party to

recover its total cleanup costs from a former owner of the

property without satisfying the public participation and cost-

effectiveness requirements applicable to a “remedial action”.

2. Whether a prevailing plaintiff in a private party cost

recovery action under Section 107(a) of CERCLA, 42 U.S.C.

§9607(a), is entitled to recover its attorneys’ fees from a defen-

dant where Congress, in CERCLA, expressly authorized fee-

shifting only in Section 104(b) federal government cost recovery

actions and Section 310 private party citizens’ suits but not in

Section 107(a) private party cost recovery actions.

PARTIES TO THE PROCEEDING BELOW

AND RULE 29.1 STATEMENT

The parties to the proceeding below were petitioners Litton

Industrial Automation Systems, Inc. and Litton Industries, Inc.

and respondent General Electric Company. The parent com-

pany of petitioner Litton Industrial Automation Systems, Inc. is

petitioner Litton Industries, Inc. There are no subsidiaries of

petitioners Litton Industrial Automation Systems, Inc. or Litton

Industries, Inc. which are not wholly owned.

TABLE OF CONTENTS

PURSE MAING PURMOMIN ERED occ ccc ecesesccccceccs

PARTIES TO THE PROCEEDING BELOW AND RULE

I on 6 bie bo wwe ce ne ssn 668s renee

Te SLs ecscnbatapaceneonves

a Gs Ir

DRPRREOMEEeEe ER GOW BREE CADE 2... ccc ccc cc cccccnss

Pe I sc cca cscncnssacsecsanscn

1. “Removal Action” versus “Remedial Action” ....

ee chink sce ka ee ce nes

C. The Court of Appeals Decision .................

REASONS FOR GRANTING THE WRIT ............

A. THE DECISION BELOW RAISES QUESTIONS

OF EXCEPTIONAL IMPORTANCE CONCERN-

ING FEDERAL ENVIRONMENTAL LAW

WHICH SHOULD BE SETTLED BY THIS

B. THE DECISION BELOW THAT GE’S VOLUN-

TARY CLEANUP WAS A REMOVAL ACTION

CONFLICTS IN PRINCIPLE WITH CONTROL-

LING DECISIONS OF THIS COURT AND THE

LOWER FEDERAL COURTS.................

C. THE DECISION BELOW THAT GE CAN RE-

COVER ITS ATTORNEYS’ FEES CONFLICTS IN

PRINCIPLE WITH CONTROLLING DECISIONS

OF THIS COURT AND WITH THE HOLDINGS

OF THE OVERWHELMING MAJORITY OF

FEDERAL DISTRICT COURTS ...............

iil

TABLE OF CONTENTS -- (Continued)

Page

CEE DiGuteaeecdonscau sevens eles teeuseews 20

APPENDIX:

Opinion of the United States Court of Appeals for the

Eighth Circuit dated December 12, 1990........... A-1

Order of the United States Court of Appeals for the

Eighth Circuit dated January 9, 1991 ............. A-15

Opinion of the United States District Court, Western

District of Missouri, dated June 20, 1989.......... A-16

Order of the United States District Court, Western

District of Missouri, dated August 7, 1989......... A-44

Order of the United States District Court, Western

District of Missouri, dated October 24, 1989....... A-48

Order of the United States District Court, Western

District of Missouri, dated November 1, 1989...... A-55

Relevant Provisions of the Comprehensive Environmen-

tal Response, Compensation and Liability Act

8k Roe. re A-56

RE, ee A-56

GR UIA. BN Is 6 ho nk 5 cece scnsiseccas A-57

42 U.S.C. Section 9604(b)........... chien ag A-57

Oe Tr. EI. 6 6 66 oak on ce sedcscneden A-58

RE ee eee eee ee Tee eee A-60

Oe By els I 4-05 6 0 Ses scare cien tiwies A-62

Relevant Provisions of the 1985 National Oil and Haz-

ardous Substances Pollution Contingency Plan

BD Ga is NE Cs bw a net hedeacessasscens A-65

40 C.F.R. Section 300.67(d).................0000- A-69

TABLE OF CONTENTS — (Continued)

Page

SP Ro as DO ee 6 08 6-0 heeds eee eis ecees A-69

ee ee Perrerr ere rerrrer TT Torr A-79

Relevant Provisions of the 1990 National Oil and Haz-

ardous Substances Pollution Contingency Plan

ELF is DO BO Pe on dkscccevecestcuaatas A-82

GF PO BN 6 0 Feo deca ckckenscunuan A-83

46 C.F... SRG BR iv ccecccccccdanvececs A-83

40 C.F.R. Section 300.400(c)(1), (4),(5), (7), (e), (g) . . A-85

40 C.F.R. Section 300.405(b), (c), (d)............. A-87

GO C.F Th. DOCG TG oak civ cicevsccctacies A-88

Uae as CE NED 0.6.0 ke eN bs cccesuccebaecs A-90

46 C.F... Sectom FOOD occ cc cecseesccwccwens A-97

40 C.F .R. Section FOO.40O 2 occ cece cesccesnes A-100

40 C.F.R. Section 300.435(c) ............. 0c A-121

40 C.F.R. Section BOO. 70S) 2. ccc cc wc cas ses A-122

TABLE OF AUTHORITIES

ASES: Page

Alabama v. USEPA, 871 F.2d 1548 (11th Cir. 1989), cert.

Gemiod, 120: S. Ge. GB Cees ook bce cccieied sevens 13

Alyeska Pipeline Co. v. Wilderness Society, 421 U.S. 240

i Tee re eer ree 7, 8, 15, 19

Amland Properties Corp. v. Aluminum Co. of America, 711

PF. Qe TG Gs BE ob ce eidancscecaccaccces 14

Cadillac Fairview/California, Inc. v. Dow Chemical Co.,

840 F.2d 691 (9th Cir. 1988) .................005. 18

Exxon Corp. v. Hunt, 475 U.S. 355 (1986) ... 5, 8, 12, 13, 14

Fallowfield Development Corp. v. Strunk, No. 89-8644

48 BO | Be ee ee 16, 17

Forrest Paint Co. v. Iverson, No. 87-6040-E (D. Or. June

Ss eee POO 16

General Electric Company v. Litton industrial Automation

Systems, Inc. and Litton Industries, Inc., No. 89-

2845, slip op. (8th Cir. Dec. 12, 1990)............. l

General Electric Company v. Litton Industrial Automation

Systems, Inc. and Litton Industries, Inc., 715 F.

a BS. A GE eee 2

Hemingway Transport, Inc. v. Kahn, 108 B.R. 378 (Bankr.

GA. SE, in so. 5'05.60500040s0neeennsenhsbeunen 16

Mesiti v. Microdot, Inc., 739 F. Supp. 57 (D.N.H. 1990) 16

National Railroad Passenger Corp. v. National Association

of Railroad Passengers, 414 U.S. 453 (1974) ........ 19

Natural Resources Mefense Council, inc. v. Thomas, 801

~ § gl 2 eer rrr Te 16

Reardon v. United States, No. 90-1319 (1st Cir. Dec. 20,

GE Kok van xneneaste8ee ase tek ckie eee 13, 17

Regan v. Cherry Corp., 706 F. Supp. 145 (D.R.I.

DED 6 6.0. 0Nc0s cbRGaeae 0 beees thee eee 16, 19

TABLE OF AUTHORITIES — (Continued)

CASES: Page

Runyon v. McCrary, 427 U.S. 160 (1976) ....... 7, 8, 15, 19

State of New York v. SCA Services, Inc., No. 83 Civ. 6402

(S.D.N.Y. Jan. 9, 1991).............ceeeeeeeceees 16

State of New York v. Shore Realty Corp., 759 F.2d 1032

Se SEEN GidGGu be RAMU NTAS Ewe teekeeness ease 14

T &E Industries, Inc. v. Safety Light Corp., 680 F. Supp.

OR MER OI aia vce nc cncscindeedas sh 16

Touche Ross & Co. v. Redington, 442 U.S. 560 (1979). 11, 19

United Savings Association of Texas v. Timbers of Inwood

Forest Associates, Lid., 484 U.S. 365 (1988)........ 18

United States v. Hardage; No. CIV-86-1401-P (W.D. Okl.

ee er es 16

United States v. Northeastern Pharmaceutical and Chem-

ical Co., 801 F.2d 726 (8th Cir. 1986), cert. denied,

ork i ec cecakccsidavessanees 14

United States v. Western Processing Co., No. C89-214-M

Cf BS, | ee eee rs rere 16

Wickland Oil Terminals v. Asarco, Inc., 792 F.2d 887 (9th

eg St a a a 18

STATUTES:

CERCLA

4B U.S.C. Goctiom GEOR 2... cw ccc scncccssce 2, 5, 18

42 U.S.C. Section SGO1(G4) ... 0... ccc eee ees 2,5, 13

42 U.S.C. Section 9G01(@5).. .. 0.26... cen. 2, 7, 16, 17

4B U.S.C. Goctieth GORGE. ow ccc cc cccsccss 2, 6, 7, 16

RR ee re 2, 4,

7, 8, 11, 12, 15, 16, 17, 18

Vii

TABLE OF AUTHORITIES — (Continued)

STATUTES: Page

ep ns HE s Bs oc ecccccccccctacecaceee 2, 10

GB U.B.L.. Gertie GOO. wn cece ccacceses 2, 7, 17, 18, 19

FEDERAL REGULATIONS:

National Contingency Plan (1985)

4) C.F .. Geetha SHE OF OO 2. nc cc ccscsscesescs 2,5

BD ic cs I ID hn oo cece ecccccnctsccccns 2,5

SOC Te, BU ts ook ccc cccccccusccascs 2,6

Sp ie is EE EEE a ono 6 ce ccccenasnceecesec 2,6

Gy Rates UID FTEs 6 cave vccccecacscsces 2, 6, 15

National Contingency Plan (1990)

ee TTT eee 2

@ C.F. Soatiam SOO.TTS . www cece sec cssccsaces 2

Se Sa ie, BD Co occ ewe necacecnnnencis 2

40 C.F.R. Section 300.400(c)(1), (4), (5), (7), (e), {g).. = 2

40 C.F.R. Section 300.405(b), (c), (d)...........66. 2

TGA tee CID GI a acc ene cucenascvcsasas 2

sa es UE NE aw veces insccnnseccvaes 2,6

TP Sack ci, ED IP 5 on sc nsusnsesccsctance 2

SP Ge as PD I no 5 Saw SSS cs nic cdese ss 2,6

40 C.F .R. Section S00.439Ble)... . 2. cc ccc cee anes 2,6

GP Gp cies ED UU vc cad can cincccvcabee. 2,6

OTHER AUTHORITIES:

Annual Report of the Director of the Administrative

Office of the United States Courts (1986)........... ll

Vili

TABLE OF AUTHORITIES — (Continued)

OTHER AUTHORITIES: Page

Annual Report of the Director of the Administrative

Office of the United States Courts (1989)........... 12

Environmental Law Reporter (Environmental Law

ED IN i, CED 656 a csc occkccucexdecnsess )

Environment Reporter (BNA) (December 21, 1990) 9

Federal Contracts Report (BNA) (December 24, 1990) 9

55 Federal Register (March 8, 1990)............. 10, 13

Hazardous Waste Litigation Reporter (Andrews) (De-

SE ED can ea acai hin keane ce ecee enon )

House Report No. 253, Part 1, 99th Cong., Ist Sess.

Ra ee re eee Vials a's ala hin beet by Wk ke 17

Inside EPA, Environmental Policy Alert (Inside

Wash. Pub.) (January 9, 1991)................. ek

Inside EPA, Superfund Report (Inside Wash. Pub.)

Ee: SE ncn hn bn bia Geen eae ese 4d new’ 9

Litigation Reports: Superfund (Mealey) (December

EG eG ero eo eee eer ce gala wet hanes bs < Y

Toxics Law Reporter (BNA) (December 19, 1990)... 9

59 United States Law Week 1101, 2396 (January 8,

DE RA RR ACUREA EK SS ORCS CS DELS RAST ERene eee g

The Wall Street Journal (December 14, 1990) ...... 9g

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1990

LITTON INDUSTRIAL AUTOMATION SYSTEMS, INC.

and LITTON INDUSTRIES, INC.,

Petitioners

vz.

GENERAL ELECTRIC COMPANY,

Respondent

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF

APPEALS FOR THE EIGHTH CIRCUIT

Petitioners Litton Industrial Automation Systems, Inc. and

Litton Industries, Inc. (collectively “Litton” or “petitioners’)

respectfully pray that a writ of certiorari issue to review the

judgment and opinion of the United States Court of Appeals for

the Eighth Circuit entered in the above-captioned proceeding

on December 12, 1990.

OPINIONS BELOW

The opinion of the United States Court of Appeals for the

Eighth Circuit, General Electric Company v. Litton Industrial

Automation Systems, Inc. and Litton Industries, Inc., No.

89-2845, slip op. (8th Cir. 1990), is not yet officially reported and

is reproduced in the Appendix at A-1 to A-14. The order of the

Eighth Circuit dated January 9, 1991 is not officially reported

and is reproduced in the Appendix at A-15.

The opinion of the Honorable Russell G. Clark, United

States District Court for tHe Western District of Missouri, dated

June 20, 1989, is reported at 715 F. Supp. 949 (W.D. Mo. 1989)

and is reproduced in the Appendix at A-16 to A-43. The orders

of Judge Clark dated August 7, 1989, October 24, 1989 and

November 1, 1989 are not officially reported and are reproduced

in the Appendix at A-44 to A-55. —

JURISDICTION

The judgment of the Court of Appeals was entered on

December 12, 1990. On January 9, 1991, the Court of Appeals

stayed the issuance of its mandate until February 1, 1991. The

jurisdiction of this Court is invoked under 28 U.S.C. §1254(1).

STATUTES INVOLVED

Sections 101(23), 101(24), 101(25), 104(b), 107(a), 117 and

310 of CERCLA, 42 U.S.C. §§9601(23), 9601(24), 9601(25),

9604(b), 9607(a), 9617 and 9659; 40 C.F.R. §§300.65, 300.67(d),

300.68 and 300.71 (1985); and 40 C.F.R. §§300.150, 300.155,

300.160, 300.400(c)(1), (4), (5), (7), (e), (g), 300.405(b), (c), (d),

300.410, 300.415(b)(4)(i), (m), 300.420, 300.430(c), (f) (i)(ii)(D),

(2), (3), (6), 300.435(c) and 300.700(c)(5), (6) (1990) are set forth

in pertinent part in the Appendix at A-56 to A-124.

STATEMENT OF THE CASE

A. Factual Background

In 1959, Royal McBee Corporation (“Royal”) opened a

typewriter plant on a 40-acre tract of land in Springfield,

Missouri. Between 1959 and 1962, residues from the plant's

metal plating and heat treatjng operations were lawfully depos-

ited on a small part of an unused portion of the property. In

1965, Royal merged into Litton, which sold the tract to respon-

dent General Electric Company (“GE” or “respondent’”) as an

industrial property in 1970.

In 1984, GE contracted to sell the property at a large profit

to a group of local real estate developers (“Enterprise Park”) who

intended to upgrade its use from industrial to commercial.

Deliberately concealing any information about the residues, GE

represented in the contract of sale that it was not aware of any

condition which would render the property unsuitable for

commercial development. |

In March 1985, GE consummated the sale of the property

to Enterprise Park, realizing a profit of $1 million. The Missouri

Department of Natural Resources thereafter proposed to plate

the property on the Missouri Registry of Confirmed, Aban-

doned, or Uncontrolled Hazardous Waste Disposal Sites (the

“Registry’). The Registry provides public notice that certain

material is present at a property. Listing a property on the

Registry does not denote that there is a threat of harm to public

health or the environment, ror does registering a property

necessarily require anyone to clean it up. Nevertheless, because

the proposed registration of the property complicated its devel-

opment plans, Enterprise Park threatened to file a fraud com-

plaint seeking millions of dollars in damages on the ground that

GE knew about the residues when it sold the property.

The 20-year-old residues had never contaminated the

groundwater or had any other adverse effect, nor did they

present an imminent threat of harm to public health or the

environment. The only potential risk ever identified was the

remote possibility that someone might dig in the precise location

where residues were buried, uncover them and eat soil contain-

ing residues on a continuous basis.

There were remedies far less drastic and far less costly than

excavation to prevent the affected soil from being ingested.

However, in December 1985, GE and Enterprise Park entered

into a Settlement Agreement in which CE, without even

considering mcre cost-effective alternatives, agreed to excavate

the soil so that the property would not be listed on the Registry.

If GE failed to keep the property off the Registry, it was

obligated to repurchase it (forfeiting its $1 million sale profit)

plus pay a $1 million penalty to Enterprise Park. !

1. After GE committed itself in the Settlement Agreement to excavate

the soil, its consultants prepared a report which identified possible remedial

alternatives other than excavation. However, GE had previously told its

consultants that it considered excavation to be the only viable option.

Therefore, the report was tailored to fit this preordained conclusion and did

The excavation of the soil, which was a permanent remedy,

spanned more than one year and was an unnecessarily expensive

remedial alternative motivated solely by GE’s quest for a profit

and not to protect the environment. In early 1988, as a result of

the voluntary cleanup, the proposed listing of the property on

the Registry was withdrawn. Prior to committing to soil excava-

tion in its Settlement Agreement with Enterprise Park, GE

failed to provide any opportunity for the public to participate in

the selection of a cleanup remedy. It did not solicit public input

or hold any public meetings concerning more cost-effective

remedial alternatives.

On June 18, 1987, GE instituted the present action against

Litton seeking recovery of cleanup costs solely under Section

107(a) of CERCLA, 42 U.S.C. §9607(a). Jurisdiction was

founded on 42 U.S.C. §9613 and 28 U.S.C. §1331. On June 20,

1989, after a four-day bench trial, the United States District

Court for the Western District of Missouri held Litton liable and

subsequently awarded GE $940,843.23 in literally unrestricted

cleanup costs, $161,945.65 in prejudgment interest and

$419,464.95 in attorneys’ fees and expenses. Litton appealed to

the United States Court of Appeals for the Eighth Circuit, which

affirmed on December 12, 1990. The Eighth Circuit later

awarded GE $100,000.00 in attorneys’ fees and other costs and

expenses relating to the appeal.

B. The Statutory Scheme

1. “Removal Action” versus “Remedial Action”

Section 107(a) of CERCLA permits private parties who

incur response costs caused by a release or threatened release of

hazardous substances to recover from responsible parties the

“necessary costs of response . . . consistent with the national

contingency plan [NCP]”. 42 U.S.C. §9607(a). The NCP, a set of

NOTES (Continued)

not seriously consider more cost-effective remedial alternatives. Further as a

result of the Settlement Agreement and to keep the property off the Registry,

GE and Enterprise Park voluntarily entered into a Consent Decree for the

cleanup with the Missouri Department of Natural Resources even though no

regulatory authority had ever ordered any cleanup of the property.

Te |

regulations promulgated by the Environmental Protection

Agency (“EPA”), establishes detailed procedures for the selec-

tion and implementation of economical and environmentally

sound responses. See 40 C.F.R. §§300.1 et seq.2

CERCLA defines two entirely different types of response

actions — “removal actions” and “remedial actions” — each of

which is governed by distinct NCP requirements. As this Court

recognized in Exxon Corp. v. Hunt, 475 U.S. 355, 360 (1986),

removal actions are short-term responses to immediate environ-

mental threats or emergency situations, while remedial actions

are long-term responses which effect a permanent environmen-

tal solution.4 The 1985 NCP classifies government response

actions which last longer than six months as remedial actions. 40

C.F.R. §300.65(b)(3).

Since Congress intended that removal actions respond to

immediate threats, the applicable NCP provisions are simple

and truncated. Remedial actions, by contrast, must comply with

more detailed procedural and substantive NCP provisions. In

particular, the 1985 NCP does not require that the public be

permitted to participate in the private party’s choice of removal

action. See 40 C.F.R. §§300.65, 300.71(a)(2)(i). However, there

must be an opportunity for the public to participate in the

2. The cleanup in the present case was governed by the version of the

NCP which took effect in 1985 (“1985 NCP”). A revised version of the NCP

became effective in 1990 (“1990 NCP”).

3. A removal action is statutorily defined in pertinent part as: “[T]he

cleanup or removal of . . . hazardous substances fiom the environment, . . .

the disposal of removed material, or the taking of such other actions as . . .

necessary to. . . mitigate damage to the public health . . . . The term includes

. . without being limited to . . . fencing, . . . provision of alternative water

supplies, [and] temporary evacuation and housing of threatened individu-

als... .” 42 U.S.C. §9601(23).

4. A remedial action is statutorily defined in pertinent part as: “[C]on-

sistent with permanent remedy taken instead of or in addition to removal

actions .. . . The term includes, but is not limited to, such actions . . . as

storage, confinement, . . . neutralization, cleanup of . . . contaminated mate-

rials, recycling, . . . diversion, destruction, . . . dredging or excavations, . . .

[and] onsite treatment. . . . [T]he term includes offsite transport and offsite

storage, treatment, destruction, or secure disposition of hazardous substances

.... 42 U.S.C. §9601(24)(emphasis added).

private party’s selection of a remedial alternative. Id.

§§300.67(d), 300.71(a)(2)(ii)(D).5 In addition, private party reme-

dial actions are required to be “cost-effective”. Id.

§§300.68(i)(1), 300.71(a)(2)(ii)(C).®

2. Attorneys’ Fees

CERCLA does not expressly authorize an award of attor-

neys’ fees to the prevailing plaintiff in a Section 107(a) private

party cost recovery action. By contrast, Congress certainly knew

how to provide for the recovery of attorneys’ fees in two other

CERCLA contexts. First, pursuant to Section 104(b), 42 U.S.C.

§9604(b), the United States Government is expressly permitted

to recover its legal fees in a cost recovery action.’ Second,

pursuant to Section 310, 42 U.S.C. §9659, fee-shifting is explic-

itly permitted in a citizens’ suit brought against the EPA or other

5. As mandated in the 1985 NCP: “[Fleasibility studies that outline

alternative remedial measures must be provided to the public for review and

comment for a period of not less than 21 calendar days. Such review and

comment shall precede selection of the remedial response. Public meeting(s)

shall, in most circumstances, be held during the comment period.” 40 C.F.R.

§300.67(d). Public participation is so seminal to the statutory scheme that in

the 1990 NCP, even certain private party removal actions are subject to some

public participation provisions. See 40 C.F.R. §300.415(m). Those provisions,

however, are abbreviated compared to the provisions governing private party

remedial actions, which continue to be subject to extensive public participa-

tion requirements including the holding of public meetings. See 40 C.F.R.

§§300.430(c), 300.430(f)(2), (3), (6), 300.435(c), 300.700 (c) (6) (ii).

6. While “cost” is one of the factors to be evaluated in certain private

party removal actions under the 1990 NCP, private party remedial actions

continue to be subject to an express “cost-effectiveness” mandate. See 40

C.F.R. §§300.415(b)\4)(i), 300.430(f)(1)(ii)(D), 300.700(c)(5)(v). Thus, as is the

case with the 1985 NCP. the provisions governing removal actions in the 1990

NCP are far less extensive than the provisions governing remedial actions.

7. Section 104(b) of CERCLA provides in pertinent part that “the

President may undertake such planning, legal, fiscal, economic, engineering,

architectural, and other studies or investigations as he may deem necessary or

appropriate to plan and direct response actions, to recover the costs thereof,

and to enforce the provisions of this chapter.” 42 U.S.C. §9604(b)(1) (emphasis

added).

enumerated parties to perform a mandatory legal duty or ensure

statutory compliance.

When CERCLA was enacted in 1980, Congress was already

on notice of this Court’s holdings in Alyeska Pipeline Co. v.

Wilderness Society, 421 U.S. 240, 247 (1975) and Runyon v.

McCrary, 427 U.S. 160, 185-86 (1976), that attorneys’ fees

cannot be recovered absent explicit congressional authorization.

Nevertheless, Congress chose to enact Section 107(a) of CER-

CLA conspicuously devoid of any fee-shifting language, while at

the same time it enacted Section 104(b) which expressly provides

for fee-shifting in federal government cost recovery actions.

Further, when as part of the Superfund Amendments and

Reauthorization Act of 1986, Congress added Section 310, which

expressly permits fee-shifting in private party citizens’ suits, it

chose not to amend Section 107(a) to permit fee-shifting in

private party cost recovery actions.®

C. The Court of Appeals Decision

The Court of Appeals found that GE’s non-emergent

cleanup took “more than a year” and “totally and permanently”

cleaned up the property. App. A-8. It further recognized that

“CERCLA’s definition of remedial action lists excavations as a

remedial example, and its definition of removal action does not

explicitly mention excavations”. App. A-7. The Court of Appeals

did not find that the cleanup involved an imminent threat of

harm or an emergency situation.

8. Section 310 of CERCLA provides in pertinent part that “[t]he court,

in issuing any final order in any action brought pursuant to this section . . .

may award costs of litigation (including reasonable attorney and expert witness

fees) to the prevailing or the substantially prevailing party whenever the court

determines such an award is appropriate. . . .” 42 U.S.C. §9659(f).

9. Section 107(a) merely permits eligible private parties to recover their

“costs of response”. As part of the 1986 amendments, the definition of the term

“response” in Section 101(25) of CERCLA, 42 U.S.C. §9601(25), was modified

to include the words “enforcement activities”. However, no reference to

aitorneys’ fees was added, nor was the term “enforcement activities” defined

in CERCLA. See also pages 17-19 infra.

Ss -

Nevertheless, the Court of Appeals held that the cleanup

was a “removal action” as to which the public participation and

cost-effectiveness requirements for remedial actions did not

apply. Although the question of whether GE’s cleanup was a

“removal action” or a “remedial action” was outcome-

determinative, the Court of Appeals merely observed, based

upon a fleeting reference to the NCP, that “an excavation is not

beyond the pale of a removal action.” App. A-7. The Court

relegated the remainder of its discussion to two footnotes.

There, it summarily concluded that it was not constrained by

this Court’s analysis in Exxon Corp. v. Hunt, supra, to find that

GE’s total and permanent cleanup of the property was a

remedial action. App. A-8. It further announced that it would

not even address the central issue in this case — whether GE

complied with the public participation, cost-effectiveness and

other requirements applicable to “remedial actions’:

“Having found that GE’s response was a removal action, we

do not need to reach the issue of whether the response met

the NCP remedial action guidelines. Similarly, as Litton’s

claim that it was denied due process is predicated on the

assertion that GE’s action was a remedial action, this claim

also becomes moot.” App. A-10.!°

Despite this Court’s holdings in Alyeska Pipeline and

Runyon v. McCrary, supra, that attorneys’ fees cannot be

recovered without explicit congressional authorization, the

Eighth Circuit held — for the first time by a federal court of

appeals — that a prevailing plaintiff in a Section 107(a) private

party cost recovery action can recover attorneys’ fees from a

defendant. Rejecting the holdings of the overwhelming majority

10. The Court of Appeals acknowledged that a private party can recover

its response costs “only if the response was necessary and consistent with the

NCP” and that “[i]f the response is deemed to be a remedial action, then it

must .. . be cost-effective and provide for public comment. . . .” App. A-6

(emphasis added). Nevertheless, holding that the motivation for a cleanup is

“irrelevant”, App. A-5, the Court totally disregarded the fact that GE's

unnecessarily expensive cleanup was motivated solely by its desire to avoid a

fraud suit by Enterprise Park and realize a windfall profit.

of federal district courts that such fees are not recoverable, the

Court of Appeals strained to find in CERCLA’s definition of

“response” a “sufficient degree of [statutory] explicitness” to

support an award of fees. App. A-13. Nowhere in its result-

oriented analysis did the Court even acknowledge that Congress

elsewhere in CERCLA (but not in the private party cost

recovery section) had expressly provided for the recovery of

attorneys fees.

REASONS FOR GRANTING THE WRIT

A. The Decision Below Raises Questions of Exceptional Im-

portance Concerning Federal Environmental Law Which

Should Be Settled by This Court

The importance of the decision below! is highlighted by

the participation of the EPA in the Court of Appeals briefing. On

appeal, the EPA contended that the District Court’s decision

“belittles the importance of the public participation contem-

plated by the NCP”. Ironically, by holding that GE’s non-

emergent cleanup was a “removal action” rather than a “re-

medial action”, the Eighth Circuit accorded the public partici-

pation requirement even less significance than had the District

Court and effectively wrote a blank check for even the least

cost-effective, voluntary and non-urgent cleanups.!2

11. The Eighth Circuit's decision has been widely reported in the legal

press. See, e.g., 59 U.S.L.W. 1101 (Jan. 8, 1991) (first page of “Summary and

Analysis” section); 59 U.S.L.W. 2396 (Jan. 8, 1991); Haz. Waste Lit. Rep.

(Andrews), Dec. 17, 1990 at 20,172 (lead article); Env’t Rep. (BNA), vol. 21,

no. 34, at 1579-81 (Dec. 21, 1990) (lead article in “Current Developments”

section); Fed. Cont. Rep. (BNA), vol. 54, no. 25, at 885-87 (Dec. 24, 1990);

Toxics L. Rep. (BNA), vol. 5, no. 29, at 915-17 (Dec. 19, 1990) (lead article);

Env't L. Rep. (Env't L. Inst.), vol. 21, no. 2, at 1 (Jan. 21, 1991); Inside EPA,

Env Policy Alert (Inside Wash. Pub.), vol. 8, no. 1, at 25 (Jan. 9, 1991); Inside

EPA, Superfund Rep. (Inside Wash. Pub.), vol. v, no. 1, at 13 (Jan. 2, 1991)

(lead article in “Litigation” section); Lit. Rep.: Superfund (Mealey), vol. 3,

issue 18, at 3-5 (Dec. 26, 1990) (lead article). See also Wall St. J., Dec. 14,

1990, at B2.

12. The EPA's ultimate conclusion that the District Court's decision

should nevertheless be affirmed was based upon the mistaken belief that GE’s

The EPA reemphasized the importance of the public

participation requirement just last year. Referring specifically to

private party cleanups, the EPA stated:

“Public participation is an important component of a

CERCLA-quality cleanup, and of consistency with the

NCP. The public — both PRP’s and concerned citizens —

have a strong interest in participating in cleanup decisions

that may affect them, and their involvement helps to ensure

that these cleanups — which are performed without gov-

ernmental supervision — are carried out in an environmen-

tally sound manner. Thus, EPA has decided that providing

public participation opportunities should be a condition for

cost recovery under CERCLA.” 55 Fed. Reg. 8795 (March

8, 1990).

Cf. Section 117 of CERCLA, 42 U.S.C. §9617 (reflecting

congressional recognition of the importance of public participa-

tion in government-sponsored cleanups).

Reversal of the decision below is necessary to send a strong

and unmistakable message that the public participation compo-

nent of CERCLA cannot be ignored or avoided by strategy or

artifice. Unless there is a reversal, CERCLA’s public participa-

tion requirements will be severely undermined since a private

party will be able to eschew them either entirely or in large

measure simply by characterizing a non-emergent, permanent

cleanup as a “removal action” — a classification made much

easier to attain by the Eighth Circuit's decision.'*

NOTES (Continued)

cleanup was completed “in less than 2 months” and was therefore a “short-

term” removal action. In fact, both the District Court and the Court of Appeals

found that the non-emergent cleanup spanned more than one year.

13. Indeed, if the cleanup in this case can be considered a “removal

action”, the definition of a removal action wil! become so broad that few, if any,

cleanups will ever again be classified as remedial. Hence, with respect to

cleanups governed by the 1985 NCP, which does not require any public

participation in the selection of removal action, the Eighth Circuit's decision

effectively eliminates the public participation component from CERCLA. The

impact of the Eighth Circuit's decision with respect to cleanups governed by

the 1990 NCP is likewise substantial. Under the 1990 NCP, classifying a

Reversal of the decision below will also forcefully discour-

age private parties from using the Eighth Circuit's “removal

action” decision as a device for circumventing the “cost-

effectiveness” requirement applicable to remedial actions. The

“cost-effectiveness” requirement ensures that scarce resources

will be judiciously allocated so as to maximize response capabil-

ity at the largest number of sites instead of squandering those

limited resources at only a few sites. At a time when the national

economy can least afford additional strain, it is particularly

important to remember that Congress, in CERCLA, did not

intend for environmental cleanups to saddle private parties or

the public with unbridled costs.

The Eighth Circuit's novel appellate decision to permit

prevailing Section 107(a) private party plaintiffs to recover their

attorneys’ fees without explicit congressional authorization

squarely conflicts with the express holdings of the overwhelming

majority of federal district courts that have decided this impor-

tant issue. In awarding attorneys’ fees to GE, the Eighth Circuit

disregarded the plain language of the statute, the commands of

this Court and the obvious congressional intent not to permit

such fees to be recovered. Congress did expressly provide for

the award of attorneys’ fees in two other CERCLA contexts, but

it chose not to provide for the award of fees in Section 107(a)

private party cost recovery actions. Therefore, the Eighth

Circuit's imposition of fee-shifting amounted to impermissible

judicial legislation.'* The Eighth Circuit's ruling will encourage

a plethora of lawsuits, increasing the already considerable

burden of environmental cases on the federal court system,'5

NOTES (Continued)

cleanup as a “removal action” still permits the private party to avoid the

far-more-extensive public participation and cost-effectiveness requirements

applicable to remedial actions. See notes 5 and 6, supra.

14. See Touche Ross & Co. v. Redington, 442 U.S. 560, 578-79 (1979)

(“The ultimate question is one of congressional intent, not one of whether this

Court thinks that it can improve upon the statutory scheme that Congress

enacted into law . . . . [W]e are not at liberty to legislate”).

15. Between 1982 and 1989, the number of federal civil actions filed

involving “environmental matters” more than doubled, surging from 394 to

938. See 1986 Ann. Rep. of the Dir. of the Admin. Off. of the U.S. Cts., at 179:

and will serve as a dangerous precedent for overriding congres-

sional intent to create a right to attorneys’ fees in other

substantive areas.

Each of the erroneous holdings of the court below will have

a substantial and widespread impact. Considered together, their

effect is dramatically compounded. Coupling the curtailment of

the requirements for public participation and cost-effectiveness

with the newly minted right to recoup legal fees expended in an

unnecessarily extravagant cleanup encourages financial profli-

gacy during both cleanups and subsequent cost recovery litiga-

tion. The Eighth Circuit has handed a blank check to anyone

who cleans up a property, even if the cleanup is non-emergent

and motivated wholly by greed or by some other ulterior motive

of the party performing the cleanup. Such a result contravenes

the statutory and regulatory scheme. '®

Congress intended that CERCLA protect the public inter-

est, not enhance the balance sheet of a sophisticated corpora-

tion. As this Court instructed in Exxon Corp. v. Hunt, supra,

the statute does not “compensate private parties for economic

harms that result from discharges of hazardous substances.” 475

U.S. at 359. Recovery of necessary response costs is permitted

only where a private plaintiff complies with CERCLA and the

NCP, not where a non-emergent cleanup has been ordered by

no regulatory body and has been caused solely by unrelated

NOTES (Continued)

1989 Ann. Rep. of the Dir. of the Admin. Off. of the U.S. Cts., at 181.

16. This case demonstrates the fallacy of assuming that persons who clean

up a site would have a financial incentive to select the most economic remedial

alternative even if compliance with the NCP were not required. Here, solely

in order to avoid fraud claims and keep its windfall profit from the sale of the

property, GE contractually obligated itself before considering any other

alternatives to undertake an unnecessarily expensive cleanup remedy. Even

though the cleanup was caused solely by GE's economic self-interest, GE was

rewarded with its cleanup costs and attorneys’ fees by the Court of Appeals,

which held (erroneously) that “[w]e will not look at the impetus behind a

plaintiff's decision to begin the cleanup process” because “the motives of the

private party attempting to recoup response costs . . . [under Section 107(a)]

are irrelevant”. App. A-5.

economic self-interest. The Eighth Circuit's misreading of CER-

CLA permits GE to profit handsomely from its alleged fraud and

distorts the environmental objectives of the statute.

B. The Decision Below that GE’s Voluntary Cleanup Was a

Removal Action Conflicts in “Principle with Controlling

Decisions of This Court and the Lower Federal Courts

As discussed above, there is a clear distinction in CERCLA

and its regulations between “removal actions” taken in short-

term response to an immediate threat to public health or the

environment and “remedial actions” providing a long-term or

permanent solution to a non-emergent problem. 42 U.S.C.

§§9601(23), (24). In Exxon Corp. v. Hunt, supra, this Court

recognized that “removal” under CERCLA means “short-term

cleanup,” while “remedial” means “measures to achieve a

‘permanent remedy’ to a particular hazardous waste problem.”

475 U.S. at 360. The EPA reaffirmed this distinction just last

year:

“Although all removals must be protective of human health

and the environment within their defined objectives, re-

movals are distinct from remedial actions in that they may

mitigate or stabilize the threat rather than comprehensively

address all threats at a site. ... Removal authority is

mainly used to respond to emergency and time-critical

situations where long deliberation prior to response is not

feasible. . . . [A]s stated above, removals are intended to

be responses to near-term threats, with the ability to

respond quickly when necessary. . . .” 55 Fed. Reg. 8695-

96 (March 8, 1990) (emphasis added).

Consistent with the plain language of CERCLA and the

analysis of this Court and the EPA, the federal courts of appeals

and district courts have uniformly classified short-term or in-

terim measures taken to abate an immediate threat to the public

as “removal actions’ and long-term or permanent cleanups

involving non-urgent situations as “remedial actions”. See, e.g.,

Reardon v. United States, No. 90-1319 (1st Cir. Dec. 20, 1990)

(1990 WESTLAW 209207 at 2); Alabama v. USEPA, 871 F.2d

1548, 1551 n.1 (11th Cir. 1989), cert. denied, 110 S. Ct. 538

(1990); United States v. Northeastern Pharmaceutical & Chem-

ical Co., 810 F.2d 726, 731 (8th Cir. 1986), cert. denied, 484

U.S. 848 (1987); State of New York v. Shore Realty Corp., 759

F.2d 1032, 1040 (2d Cir. 1985); Amland Properties Corp. v.

Aluminum Co. of America, 711 F. Supp. 784, 795 (D.N.J. 1989).

In the present case, GE’s voluntary and unnecessarily

expensive cleanup was caused solely by unrelated economic

considerations which dictated the method and extent of cleanup.

The only “urgency” involved was the desire of GE, which had

known about the residues for at least five years before selling the

property, to retain its windfall profit from the sale and avoid a

fraud suit by the purchaser. There was never any groundwater

contamination or other adverse effect from the 20-year-old

residues, nor was there an imminent threat of harm to public

health or the environment. Moreover, the gold-plated cleanup

method selected by GE before consideration of any other

alternative, excavation and off-site disposal of a vast quantity of

non-hazardous soil, was a permanent remedy and an unneces-

sarily expensive alternative which took more than one year to

complete.

Disregarding these critical indicia, which mandated that

GE’s cleanup be classified as a “remedial action”, the Eighth

Circuit branded the cleanup a “removal action” — an aberrant

conclusion of law which flies in the face of the express language

of CERCLA and the analysis adopted by every other federal

court, including this Court in Exxon. Instead of seeking to

reconcile its result-oriented opinion with the analysis articulated

in Exxon, the Court of Appeals merely dismissed Exxon as not

establishing “that an excavation that totally and permanently

cleans up a hazardous waste site never can be classified as a

removal action.” App. A-8.

Had the Eighth Circuit correctly characterized GE’s

cleanup as a “remedial action”, it would necessarily have

concluded that GE was not entitled to recover its excessive

response costs because it failed to satisfy the public participation

and cost-effectiveness requirements which apply to remedial

actions. GE selected an unnecessarily costly remedy without

presenting any remedial alternatives to the public for review and

comment and without holding any public meetings to discuss

proposed remedial alternatives.!7 GE’s failure to solicit input

from the public and its voluntary selection of a non-cost-effective

remedial alternative rendered its action fatally inconsistent with

the NCP and barred its recovery of cleanup costs from Litton.!*

C. The Decision Below that GE Can Recover Its Attorneys’

Fees Conflicts in Principle with Controlling Decisions of

this Court and with the Holdings of the Overwhelming

Majority of Federal District Courts

It is axiomatic that in the United States, a prevailing party

is not entitled to recover attorneys’ fees from the losing party

unless specifically provided by statute. Alyeska Pipeline Co. v.

Wilderness Society, supra, 421 U.S. at 247. There must be

“explicit congressional authorization” — above and beyond

mere “generalized commands” — to support an award of

attorneys fees. Runyon v. McCrary, supra, 427 U.S. at 185-

86.' “Unless Congress has expressly authorized a court to shift

17. The fact that three meetings were held by a state commission in

connection with the proposed listing of the property on the Registry did not

satisfy the NCP public participation requirements because proposed remedial

alternatives were never presented or discussed at those meetings.

18. The 1985 NCP provides an alternative method for satisfying the

public participation requirement: compliance with state regulatory provisions

which provide “a substantially equivalent opportunity for public involvement

in the choice of remedy”. 40 C.F.R. §300.71(a)(2)(ii)(D). However, GE cannot

successfully contend that it satisfied this alternative method by complying with

“legally applicable or relevant and appropriate state requirements”

(“ARARS”). Indeed, in the proceedings below, the EPA contended in its

amicus brief that any suggestion by the District Court that public comment

was not required even if GE’s cleanup was a “remedial action” because GE

complied with ARARS was “troubling”, “wrong” and “erroneous” since “it

belittles the importance of the public participation contemplated by the NCP.”

19. Both Alyeska Pipeline and Runyon v. McCrary were decided by this

Court shortly before CERCLA was enacted in 1980. Since Congress knew

when it promulgated CERCLA that attorneys’ fees could not be recovered

unless the statute so expressly provided, the absence of fee-shifting provisions

in Section 107(a) private party cost recovery actions must be viewed as

deliberate. This is particularly true since Congress, when it enacted Section

the cost of attorney's fees from one party to another, each party

is generally expected to pay his own attorney.” Natural Re-

sources Defense Council, Inc. v. Thomas, 801 F.2d 457, 460

(D.C. Cir. 1986) (citation omitted).

Paying only lip service to these fundamental precepts, the

Eighth Circuit held that a prevailing plaintiff in a CERCLA

Section 107(a) private party cost recovery action can recover its

attorneys fees from the losing party despite the absence of

express statutory language so providing. This novel holding, the

first by a federal court of appeals, squarely conflicts with the

holdings of the overwhelming majority of federal district courts

that have decided this important issue. See State of New York v.

SCA Services, Inc., No. 83 Civ. 6402 (S.D.N.Y. Jan. 9, 1991)

(1991 U.S. Dist. LEXIS 291); United States v. Hardage, No.

CIV-86-1401-P (W.D. Okl. Oct. 16, 1990) (1990 WESTLAW

163434 at 54); Fallowfield Development Corp. v. Strunk, No.

89-8644 (E.D. Pa. April 23, 1990) (1990 WESTLAW 52745 at

5-6); Mesiti v. Microdot, Inc., 739 F. Supp. 57, 62-63 (D.N.H.

1990); Regan v. Cherry Corp., 706 F. Supp. 145, 149 (D.R.I.

1989); United States v. Western Processing Co., No. C89-214-M

(W.D. Wash. Nov. 17, 1989); T&E Industries, Inc. v. Safety

Light Corp., 680 F. Supp. 696, 707 (D.N.J. 1988); Forrest Paint

Co. v. Iverson, No. 87-6040-E (D. Or. June 8, 1987); Heming-

way Transport, Inc. v. Kahn, 108 B.R. 378, 383 (Bankr. D.

Mass. 1989).2°

The Eighth Circuit’s holding is fundamentally flawed in

three principal respects. First, the Court erred in straining to

expand the language of Section 101(25) of CERCLA to find “a

sufficient degree of explicitness” to support an award of attor-

neys fees:

NOTES (Continued)

107(a) in 1980, at the same time enacted Section 104(b) of CERCLA expressly

providing for fee-shifting in federal government cost recovery actions.

20. By contrast, the Eighth Circuit cited only two district court decisions

which permitted an award of attorneys’ fees in Section 107(a) private party cost

recovery actions. App. A-13. Both of those decisions relied on the erroneous

decision of the District Court herein.

“{Section] 9607(a)(4)(B) allows private parties to recover

‘necessary costs of response. . . .. [Section] 9601 (25) defines

‘response as ‘remove, removal, remedy, and remedial

action; all such terms (including the terms “removal” and

“remedial action”) include enforcement activities related

thereto.’ (Emphasis added.). A private party cost-recovery

action such as this one is an enforcement activity within the

meaning of the statute . . . . Attorney fees and expenses

necessarily are incurred in this kind of enforcement activ-

ity... .”° App. A-12, A-13.

The Eighth Circuit’s heavy reliance on Section 101(25) —

which does not even refer to attorneys’ fees even though it was

modified in 1986 at the very same time that Congress expressly

chose to provide in Section 310 of CERCLA for the recovery of

attorneys fees in private party citizens’ suits (see note 9 and

accompanying text, supra) — was entirely misplaced. The

legislative history of that section establishes that Congress was

referring to “enforcement activities” by the EPA, not private

parties, when it modified the definition of the term “response”

in the 1986 amendments to CERCLA. See H.R. Rep. No. 253,

99th Cong., Ist sess., pt. 1, at 66-67 (1985), reprinted in 1986

U.S. Code Cong. & Admin. News 2835, 2848 (the modification

of the definition of “response” to include “enforcement activi-

ties” is intended to “confirm the EPA’s authority to recover costs

for enforcement actiors taken against responsible parties”) (em-

phasis added). This affirmative evidence of congressional intent

has driven many federal courts to reject the minority view

followed by the Eighth Circuit. See, e.g., Fallowfield Develop-

ment Corp. v. Strunk, supra, No. 89-8644 (E.D. Pa. April 23,

1990) (1999 WESTLAW 52745 at 5-6). See also Reardon v.

United States, supra, No. 90-1319 (1st Cir. Dec. 20, 1990) (1990

WESTLAW 209207 at 3) (“enforcemert” in CERCLA “appears

specifically to refer to the measures that may be imposed to force

compliance with EPA-ordered removal and remedial actions’).

By contrast, nothing in the legislative history of CERCLA

suggests that Congress intended the term “enforcement activi-

ties” to encompass voluntary private party cost recovery actions

or be used as a springboard for creating a new right to attorneys

fees in Section 107(a) cases. “Such a major change in the existing

rules would not likely have been made without specific provision

in the text of the statute . . .; it is most improbable that it would

have been made without even any mention in the legislative

history.” United Savings Association of Texas v. Timbers of

Inwood Forest Associates, Ltd., 484 U.S. 365, 380 (1988).?!

Second, just as it disregarded the dispositive legislative

history, the Eighth Circuit totally ignored that Congress, in

CERCLA, expressly provided for fee-shifting in two other

contexts. See notes 7-9 and accompanying text, supra. In

particular, in Section 310 of CERCLA, Congress expressly

permitted private parties bringing citizens’ suits to recover

attorneys fees if they prevail. Thus, Congress spoke to the very

subject of private parties recovering attorneys fees by permit-

ting Section 310 private parties to recover them. That it

remained silent with respect to Section 107(a) private parties is

compelling evidence that it did not intend to create fee-shifting

in actions such as the present.22 As this Court instructed in

21. Instead of scrutinizing the pertinent legislative history, the Eighth

Circuit cited Cadillac Fairview/California, Inc. v. Dow Chemical Co., 840

F.2d 691 (9th Cir. 1988) and Wickland Oil Terminals v. Asarco, Inc., 792 F.2d

887 (9th Cir. 1986) to support its conclusion that the term “enforcement

activities’ encompasses private party cost recovery actions. App. A-12.

However, neither of those cases involved the issue of attorneys’ fees, and the

language upon which the Eighth Circuit relied was mere dicta. Ironically, the

analysis in Cadillac Fairview provides analogous support for Litton’s position

regarding attorneys’ fees. There, the Ninth Circuit held that Section 107(a) of

CERCLA does not provide private parties with a right to injunctive relief.

Contrasting Section 107(a), which does not mention injunctive relief, with

Section 106(a), which expressly grants the President the right to seek

injunctive relief, the Ninth Circuit emphasized: “Sections 106(a) and 107(a)

indicate that when Congress wished to provide for injunctive relief under

CERCLA, it knew how to do so and did so expressly.” 840 F.2d at 697. The

same is true as to attorneys’ fees. See notes 7-9 and accompanying text, supra.

22. This conclusion is reinforced by the fact that Section 310, which

expressly provides for the recovery of fees in citizens’ suits, was added to

CERCLA by amendment in 1986. Congress therefore had an opportunity (and

obviously knew how) to amend CERCLA to provide for fee-shifting but

declined to do so in Section 107(a) private party cost recovery actions. See

Touche Ross & Co. v. Redington, supra, 442 U.S. at 572:

“Obviously, then, when Congress wished to provide a

private damage remedy, it knew how to do so and did so

expressly’ (citations omitted).

See also National Railroad Passenger Corp. v. National Associ-

ation of Railroad Passengers, 414 U.S. 453, 458 (1974) (“[a]

frequently stated principle of statutory construction is that when

legislation expressly provides a particular remedy or remedies,

courts should not expand the coverage of the statute to subsume

other remedies’).

Finally, the Eighth Circuit's observation that fee-shifting

should be judicially created as an incentive for private parties to

clean up waste sites, App. A-13, echoes the theory that attor-

neys fees should be awarded even absent congressional autho-

rization to litigants who vindicate important public interests.

However, that theory was discarded by this Court more than 15

years ago in Alyeska Pipeline and Runyon v. McCrary, supra. In

Alyeska Pipeline, this Court emphasized:

“{C]ongressional utilization of the private-attorney-general

concept [in certain statutes] can in no sense be construed as

a grant of authority to the Judiciary to jettison the tradi-

tional rule against nonstatutory allowances to the prevailing

party and to award attorneys’ fees whenever the courts

deem the public policy furthered by a particular statute

important enough to warrant the award. . . . [CJourts are

not free to fashion drastic new rules with respect to the

allowance of attorneys’ fees to the prevailing party in federal

litigation . . . and to award fees . . . depending upon the

courts’ assessment of the importance of the public policies

involved in particular cases.” 421 U.S. at 263, 269.

NOTES (Continued)

notes 7-9 and accompanying text, supra. Furthermore, because the types of

relief available in Section 310 citizens’ suits and Section 107(a) private party

cost recovery actions are mutually exclusive, there is no basis for extending the

right of private parties to recover attorneys’ fees beyond that expressly

provided in Section 310. See Regan v. Cherry Corp., supra, 706 F. Supp. at

147-50.

In any event, such a theory has no application in the present

case since GE was anything but a “private attorney general”; it

voluntarily acted solely for its own economic self-interest, not for

the benefit of the public. Accordingly, if attorneys’ fees are to be

awarded in Section 107(a) private party cost recovery actions,

they are for Congress, not the Eighth Circuit, to legislate.

CONCLUSION

For each of the foregoing reasons, a writ of certiorari should

issue to the United States Court of Appeals for the Eighth

Circuit.

Respectfully submitted,

Bruce W. Kauffman

(Counsel of Record)

Sheryl L. Auerbach

Mark J. Levin

DILWORTH, PAXSON, KALISH

& KAUFFMAN

2600 The Fidelity Building

Philadelphia, PA 19109

(215) 875-7000

Theodore F. Craver

Mark Stanga

Litton Industries, Inc.

Attorneys for Petitioners

APPENDIX

ade we

ori

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

No. 89-2845

GENERAL ELECTRIC COMPANY,

Appellee,

LITTON INDUSTRIAL AUTOMATION SYSTEMS, INC., AND LITTON

INDUSTRIES, INC.,

Appellants.

Appeal from the United States District Court for the Western

District of Missouri.

Submitted: October 8, 1990

Filed: December 12, 1990

Before BOWMAN, Circuit Judge, FLOYD R. GIBSON, Senior

Circuit Judge, and WOLLMAN, Circuit Judge.

BOWMAN, Circuit Judge.

This is an action brought by General Electric (“GE”)

pursuant to the Comprehensive Environmental Response,

Compensation and Liability Act (CERCLA) of 1980, §107(a), 42

U.S.C. §9607(a) (1988). The District Court! ordered Litton to

pay GE for certain cleanup costs incurred by GE and also ruled

that GE was entitled to recover its attorney fees. Litton appeals.

For the reasons set forth below, we affirm.

1. The Honorable Russell G. Clark, United States District Judge for the

Western District of Missouri. Judge Clark's opinion is published as General

Elec. Co. v. Litton Business Sys., Inc., 715 F. Supp. 949 (W.D. Mo. 1989).

A-l

A-2

In 1959, Royal McBee Corporation opened a typewriter

plant on a forty-acre plot in Springfield, Missouri.? From 1959 to

1962, Royal McBee dumped cyanide-based electroplating

wastes, sludge, and other pollutants onto part of the forty-acre

tract. Over time, these wastes migrated from the original

dumping location, contaminating a larger area of land.

In 1965, Royal McBee merged with Litton Industries, Inc.,

and Litton became the surviving corporation. The typewriter

plant was closed in 1969, and in 1970 GE bought the plant and

the surrounding land. In 1980, the Missouri Department of

Natural Resources (“MDNR”) learned of the hazardous sub-

stances that had been dumped at the site and GE was notified.

The MDNR and GE concluded in 1981 that there was no

potential for groundwater contamination, and performed no

cleanup work at the site.

In 1984, GE agreed to sell the vacant nineteen acres at the

site (where the dumping had occurred) to Enterprise Park, a real

estate concern that intended to develop the property for com-

mercial purposes. In July 1985 the MDNR changed course and

decided to propose that the site be placed on Missouri's Registry

of Abandoned and Uncontrolled Hazardous Waste Sites of

Missouri. GE appealed this proposed registry, while Enterprise

Park notified both GE and Litton of potential CERCLA claims.

On three separate occasions from September 1985 to March

1986, the Missouri Hazardous Waste Commission held public

meetings to discuss, among other things, the proposed registry

of the GE site. In October 1985, the Missouri Department of

~ Health (*MDOH”) stated that the contaminants in the soil at the

2. This land will be referred to in this opinion as “the site.”

3. Royal McBee’s assets were acquired by a wholly-owned subsidiary of

Litton which later was merged into a surviving corporation called Litton

Industrial Automation Systems, Inc. For purposes of this opinion, “Litton”

refers to both Litton Industries, Inc. and Litton Industrial Automation

Systems, Inc. The judgment of the District Court as amended November 1,

1989, runs against both of these corporations.

A-3

site posed “a significant health threat and . . . should be

removed.” Appellants’ Appendix, vol. VIII, §58, at 1861.

During that same month, GE hired OH Materials Com-

pany to investigate the site and conduct any response actions

deemed necessary. In December 1985, the Environmental

Protection Agency (“EPA”) decided that Missouri should take

enforcement action for the site and stated that the 1981 MDNR

findings, in light of improved scientific knowledge, were erro-

neous. On December 16, 1985, GE and Enterprise Park

entered into a Settlement Agreement. The Agreement essen-

tially held GE liable for any cleanup costs incurred at the site

and called for GE to attempt to keep the site off the Registry.

In late 1985 and early 1986 GE, the MDNR, and Enter-

prise Park negotiated a Consent Decree. The Decree called for

the development and implementation of a cleanup plan for the

site. It required any cleanup action to be consistent with the

National Contingency Plan (“NCP”) , EPA Superfund Programs,

400 CFR §300 et. seq. (1986), and required MDNR approval of

all action.

Pursuant to their site investigation, OH Materials produced

an analysis of several possible cleanup actions. Although the

most expensive alternative, excavation was chosen as the best

and most effective response action. Excavation began on Octo-

ber 13, 1986. On that day, three large drums were discovered

buried at the site. Shortly thereafter, a trench was discovered,

along with a fourth drum. This drum contained extremely

hazardous substances. Excavation continued until December 7,

1986, when work was halted pending further site analysis. More

excavation was performed in May 1987 and the cleanup was

completed in December 1987.

Most of the soil was disposed of as a nonhazardous waste,

minimizing cleanup cests. The drums and the more-

contaminated soil were disposed of as hazardous wastes. In early

1988 the MDNR approved the cleanup of the site, withdrew the

proposed registry, and stated that the site had been properly

cleaned.

Even though Litton had been notified by both GE and

Enterprise Park in 1985 about its potential CERCLA liability,

A-4

Litton never participated in any of the investigation, evaluation,

or cleanup of the site. In March 1987, while the cleanup was still

in progress, GE made a formal demand on Litton asking it to

indemnify GE for the cleanup costs. In June 1987 GE filed suit,

seeking to recover its response costs for cleaning up the site. In

August 1988 GE filed an amended complaint, seeking te recover

its cleanup costs pursuant to §107(a) of CERCLA, 42 U.S.C.

§9607(a).

Following a four-day bench trial in May 1989, the District

Court found that there had been a release of hazardous sub-

stances, that Litton was responsible for the release, that GE’s

response was necessary, and that GE’s cleanup actions met the

provisions of CERCLA and the NCP. The District Court

ordered Litton to pay GE more than $940,000 as reimbursement

for the response costs incurred. The District Court also ruled

that attorney fees were recoverable, and ordered Litton to pay

GE more than $419,000 in attorney fees and expenses.

On appeal, Litton claims that 1) GE should not be allowed

to recover its cleanup costs because the cleanup was induced by

the threat of a lawsuit; 2) GE’s response was not consistent with

the NCP; 3) the District Court erred in not apportioning some of

the response costs to GE; and 4) the District Court erred in

allowing GE to recover its attorney fees.

II.

42 U.S.C. §9607(a) holds the party responsible for a haz-

ardous substance release liable for cleanup costs incurred as a

result of the release. It allows a private party who incurs such

costs to recoup its cleanup expenses from the responsible party.

42 U. S. C. §9607 (a) (4) (B). In order for a private party to

recover these costs from the responsible party, the release of

hazardous substances must have “caused” the incurrence of the

costs. Litton claims that a release of pollutants did not “cause”

GE’s response, but rather, the threat of a lawsuit “caused” GE’s

response.

Although couched in terms of causation, this argument is

really an “unclean hands” defense to GE’s CERCLA claim.

A-5

Litton asserts that GE failed to tell Enterprise Park of the known

contaminants at the site when it sold the property to Enterprise

Park in 1984, even though GE knew of the problem by 1980 at

the latest. Litton claims that only after Enterprise Park found

out about the contaminants, and threatened GE with a lawsuit,

did GE begin its response. Therefore, according to Litton, the

response was “caused” by GE’s reaction to the possible lawsuit,

not by the release of pollutants.

This argument is without merit. CERCLA is a strict liability

statute, with only a limited number of statutorily-defined de-

fenses available. United States v. Aceto Agric. Chem. Corp., 872

F.2d 1373, 1377-78 (8th Cir. 1989) ; State of New York v. Shore

Realty Corp., 759 F.2d 1032, 1042 (2nd. Cir. 1985). The

available defenses are that the release was caused solely by an

“act of God [or] war,” or that the release was caused solely by a

third party whose actions were not foreseeable by the defen-

dant, who was exercising due care with respect to the hazardous

substance. 42 U.S.C. §9607(b). The third party must not be an

employee or agent of the defendant, nor have entered into a

contractual relationship with the defendant. 42 U.S.C. §9607(b).

CERCLA does not provide for an “unclean hands” defense; the

liability imposed by 42 U.S.C. §9607(a) is subject only to the

defenses noted above. Thus, the motives of the private party

attempting to recoup response costs under 42 U.S. C. §9607 (a)

(4) (B) are irrelevant. The purpose of allowing a private party to

recover its response costs is to encourage timely cleanup of

hazardous waste sites. This purpose would be frustrated if a

plaintiff's motives were subject to question. We will not look at

the impetus behind a plaintiff's decision to begin the cleanup

process; we will look only to see if there has been a release or

threatened release for which the defendant is responsible. 42

U.S.C. §9607(a). Undoubtedly such a release occurred at the

site. As found by the District Court, “(f)rom 1958 to 1963, [the]

defendant dumped 500 gallons per year of waste chemicals on

the ground in question. Additionally, . . . a trench was used to

bury a barrel which contained . . . toxic material.” General Elec.

Co. v. Litton Business Sys., Inc., 715 F. Supp. 949, 957 (W.D.

A-6

Mo. 1989). GE’s response was “caused” by Litton’s release, and

therefore meets this criterion of CERCLA.

Il.

Litton next argues that the mandate of 42 U.S.C.

§9607(a)(4)(B), that the response be “consistent with the national

contingency plan,” was not met by GE. This section allows a

private party to recover its response costs from the responsible

party only if the response was necessary and consistent with the

NCP. 40 CFR §300.71, entitled “Other Party Responses,”

details the response actions that are considered to be consistent

with the NCP. If the response is characterized as a removal

action, then it must be taken in circumstances warranting

removal and be consistent with 40 CFR §300.65. If the response

is deemed to be a remedial action, then it must be consistent

with 40 CFR §300.68, as well as be cost-effective and provide for

public comment, or a substantially equivalent opportunity for

public involvement. 40 CFR §300.71 (a) (2). In addition, private

party responses must comply with all applicable Federal, state,

and local requirements. 40 CFR §300.71(a)(4).

The decision whether to characterize a response action as a

“removal” action or a “response” action is determined by 42

U.S.C. §§9601(23) and (24). A removal action is defined as

the cleanup or removal of . . . hazardous substances from

the environment, . . . the disposal of removed material, or

the taking of such other actions as . . . necessary to...

mitigate damage to the public health . . . . The term

includes . . . without being limited to . . . fencing, . . .

provision of alternative water supplies, [and] temporary

evacuation and housing of threatened individuals. . . .

42 U.S.C. §9601(23). A remedial action is defined as one

consistent with permanent remedy taken instead of or in

addition to removal actions. . . . The term includes, but is

not limited to, such actions . . . as storage, confinement,

A-7

. . neutralization, cleanup of . . . contaminated materials,

recycling, ... diversion, destruction, ... dredging or

excavations, . . . [and] onsite treatment... . [T]he term

includes offsite transport and offsite storage, treatment,

destruction, or secure disposition of hazardous sub-

SIGMCSS. . . «

42 U.S.C. §9601(24).

We agree with the District Court’s determination that GE’s

action can be characterized as a removal action. General Elec. v.

Litton, 715 F. Supp. at 960. GE’s excavation of soil and buried

drums is undoubtedly a “removal of hazardous substances from

the environment.” 42 U.S.C. §9601(23). Although CERCLA’s

definition of remedial action lists excavations as a remedial

example, and its definition of removal action does not explicitly

mention excavations, an excavation is not beyond the pale of a

removal action. See 40 CFR §300.65(c), which lists “(r)emoval of

highly contaminated soils” and “(r)emoval of drums” as removal

actions. Any distinction between “excavation” of contaminated

soils and “removal” of contaminated soils is one that eludes us.

We therefore conclude that it is proper to evaluate GE’s

response using the NCP guidelines for a removal action.‘

4. Litton argues that the removal action issue was never introduced by

GE, nor decided upon by the District Court. On the second point, Litton is

clearly wrong, as evidenced by the following passage: “The Court finds that

'GE’s action was consistent with the NCP as a removal action.” General Elec.

v. Litton, 715 F. Supp. at 960. Regarding Litton’s claim that GE never argued

that its response was a removal action, GE’s First Amended Complaint

repeatedly refers to GE’s “response action,” which encompasses both removal

actions and remedial actions. Appellants’ Appendix, vol. I, §2, at 30. Litton

also argues that only short-term, temporary responses can be considered

removals and that GE’s response was neither. See Exxon Corp. v. Hunt, 475

U.S. 355, 360 (1986); United States v. Northeastern Pharmaceutical & Chem.

Co., 810 F.2d 726, 731 (8th Cir. 1986) (“NEPACCO”). The NCP, however,

specifically contemplates excavations as appropriate removal actions, 40 CFR

A-8

As stated earlier, in order for removal action costs to be

recoverable under 42 U.S.C. §9607(a) (4) (B) the action must be

consistent with 40 CFR §300.65. That section of the NCP states

that for a removal action, the following be done: 1) a site

assessment be performed; 2) an effort be made to involve the

responsible party, if known; 3) an evaluation be made of possible

responses, based on the following factors: a) exposure to people;

b) contamination of water; c) barrels that pose a threat of release;

d) contaminated soil that may migrate; e) weather conditions

that may affect the contaminants; f) threat of fire; and g) other

factors; 4) the cleanup action begin as soon as possible in an

appropriate manner; and 5) contaminated soil and barrels of

contaminants be removed, where removal will reduce the

spread of contamination and the likelihood of exposure to

humans. 40 CFR §300.65.5

We agree with the District Court’s determination that GE

“implemented the removal action consistent with §300.65.”

General Elec. v. Litton, 715 F. Supp. at 961. First, the site was

evaluated in 1981 by the MDNR and GE, and again in 1985 by

the MDOH, OH Materials, the MDNR, and GE. General Elec.

v. Litton, 715 F. Supp. at 951-952. Second, both GE and

Enterprise Park notified Litton of the potential cleanup to take

place at the site.6 GE is not required to force Litton to

NOTES (Continued)

§§300.65(c) (6) and (7). We hold that GE’s response was not too time-

consuming to be considered a removal, as the cleanup took a little more than

a year, with work performed in three segments over a span of five different

months. We do not read either Hunt or NEPACCO as establishing that an

excavation that totally and permanently cleans up a hazardous waste site never

can be classified as a removal action.

5. 40 CFR §300.65(b) (3) requires removal actions to end after either one

million dollars has been obligated or six months have elapsed from the date of

the initial response. However, 40 CFR §300.65(i) exempts private party

responses such as GE’s from these limitations.

6. We note that after Litton/Royal McBee stopped dumping the chemical

wastes at the site in 1962, it dumped the same wastes at the Fulbright Landfill

in Springfield from 1962 to 1968. See General Elec. v. Litton, 715 F. Supp. at

951. As a result of this dumping activity, Litton entered into an Administrative

A-9

participate in the evaluation and cleanup process; it is required

only to attempt to involve the responsible party in the process.

This requirement was satisfied.

Third, an evaluation of potential response actions was

prepared by OH Materials for GE. The District Court found

that “OH Materials produced a Remedial Alternatives Evalua-

tion for the site (“RATE report”] . . . which analyzed several

alternative response actions.” General Elec. v.- Litton, 715 F.

Supp. at 953. The District Court also found that the evaluations

performed by OH Materials and the MDOH “considered points

of exposure, population, environmental and welfare concerns at

risk, amount, concentration, hazardous properties, hydrogeolo-

gical factors, and the extent to which the contamination levels

exceeded the State standards.” General. Elec. v. Litton, 715 F.

Supp. at 953. The evaluation resulted in a determination that

excavation was appropriate.

We are satisfied that the thorough evaluation that was

performed here is consistent with the NCP; specifically, with 40

CFR §300.65(b)(2). The site evaluation does not have to comply

strictly with the letter of the NCP, but only must be consistent

with its requirements. NL Indus. Inc., v. Kaplan, 792 F.2d 896,

898-99 (9th Cir. 1986). It is not necessary that every factor

mentioned by the NCP be dealt with explicitly; thus, for

instance, a failure to consider explicitly the weather conditions

factor is not fatal to an evaluation’s consistency with the NCP. As

a matter of law, the evaluation performed for GE by OH

Order and Consent Decree with the EPA and the MDNR in March 1986.

Appellants’ Appendix, vol. IX, §107. The Decree dealt with the same chemical

wastes dumped at the typewriter plant site, and included an acknowledgement

by Litton that the wastes were hazardous substances. General Elec. v. Litton,

715 F. Supp. at 958. The Decree also obligated Litton to reimburse the EPA

for its cleanup costs incurred pursuant to CERCLA and the NCP. Appellants’

Appendix, vol. IX, §107, at 2631. Thus, when Litton was informed of the

potential CERCLA claims at the typewriter plant site by GE and Enterprise

Park, it knew or should have known of the process that was likely to follow.

Based on this prior or simultaneous knowledge, Litton cannot claim to have

been shut out of the evaluation and cleanup process unfairly. Thus, GE’s

notification actions, coupled with Litton’s prior knowledge, satisfied the NCP

requirement that an effort be made to involve the responsible party.

A-10

Materials was consistent with the NCP requirements concerning

a removal action.

GE’s response time also was consistent with the NCP’s

removal action guidelines. The MDNR proposed registry of the

site on the hazardous waste sites listing in July 1985. In

December 1985 the EPA found that the wastes at the site

constituted a threat to the environment. By this time GE had

hired OH Materials to assess the site and develop possible

alternative responses. The RATE report was completed in

February 1986. After further consultation with the state, the

excavation began in October 1986. We hold that such a response

time is consistent with the NCP’s requirement to begin the

cleanup in an appropriate manner as soon as possible.

Finally, excavation of the site is consistent with the NCP, as

40 CFR §§300.65(c)(6) and (7) explicitly list removal of contam-

inated soils and drums containing hazardous substances as

appropriate removal actions.

We hold that GE’s response can be characterized properly

as a removal action, was warranted by the hazardous conditions

at the site, and was consistent with the NCP guidelines govern-

ing removal actions. Therefore, the costs associated with GE’s

response action are recoverable under 42 U.S.C. §9607(a)(4)(B).7

IV.

Litton argues that even if it can be held liable under 42

U.S. C. §9607 (a) (4) (B) , it should not be held responsible for

all of the costs incurred by GE. Instead, Litton asserts that

liability for the cleanup costs should be apportioned between

Litton and GE, with GE responsible for all “non-necessary”

costs.® Litton argues that some of the cleanup costs were not

7. Having found that GE’s response was a removal action, we do not

need to reach the issue of whether the response met the NCP remedial action

guidelines. Similarly, as Litton’s claim that it was denied due process is

predicated on the assertion that GE’s action was a remedial action, this claim

also becomes moot.

8. Litton’s related apportionment argument based on 42 U.S.C.

§9613/f)(1) cannot succeed, because that section, allowing for apportionment of

costs between liable parties, does not apply to GE. GE would be a section 9613

A-11

“necessary” under CERCLA, but were incurred instead by GE

solely to upgrade the site and realize a profit on its sale to

Enterprise Park. It is this portion of the cleanup costs that Litton

asserts should be apportioned to GE, because 42 U.S.C.

§9607(a) (4) (B) allows a private party to recover only its

“necessary costs of response.

As noted earlier 40 CFR §300.71, governing private party

responses, requires such responses to comply with “all other-

wise legally applicable or relevant and appropriate Federal,

State, and local requirements, including permit requirements.”

40 CFR §300.71(a) (4). During the course of the site evaluation

and cleanup, the MDNR established a set of cleanup levels for

the site. In order for the site to be considered cleaned properly,

the levels of various elements (such as lead, arsenic, and nickel)

in the soil could not exceed these state-imposed standards.

These standards were not met until after the final cleanup

performed in November 1987. Even then, one “grid” at the site

did not meet the MDNR levels, even though that area had been

excavated down to the bedrock and further excavation was not

possible.

It was not until after the final cleanup work was performed

in November 1987 that the site met the state-imposed standards

and the state approved the cleanup. All of the cleanup work

performed was necessary to meet the state standards. Since 40

CFR §300.71(a) (4) incorporates applicable state requirements

into the requirements of an NCP-consistent response action, the

cleanup performed by GE was “necessary” under 42 U.S.C.

§9607(a)(4)(B). To be consistent with the NCP, GE’s response

action had to comply with the state standards, which it did.

There is no evidence of any response action taken over and

above that required to satisfy the state standards. GE simply

met the standards imposed by the state.? Thus, GE is not

(f) (1) liable party only if it owned the site at the time the wastes were dumped

or was responsible otherwise for the dumped wastes. See 42 U.S.C. §9607(a).

Since that 1s not the case, GE is not a liable party and cannot be held liable

under 42 U.S.C. §9613(f\‘1).

9. Litton argues that CE went “above and beyond the call of duty” when

cleaning the site to satisfy its Settlement Agreement obligations to Enterprise

A-12

subject to an apportionment of “non-necessary” costs, because

there were no “non-necessary” costs.

Finally, Litton argues that the District Court erred in

awarding GE attorney fees and expenses. Litton asserts that

CERCLA does not allow explicitly for private parties to recover

litigation expenses and therefore, under the American rule, each

side must pay its own litigation costs.

The general rule is that “the prevailing litigant is ordinarily

not entitled to collect a reasonable attorneys’ fee from the loser.”

Alyeska Pipeline Co. v. Wilderness Soc’y, 421 U.S. 240, 247

(1975). “(A)bsent explicit congressional authorization, attorneys’

fees are not a recoverable cost of litigation.” Runyon v. Mc-

Crary, 427 U.S. 160, 185 (1976). Thus, in order to uphold an

award of attorney fees, we look to the language of CERCLA. We

must find more than “generalized commands,” Runyon v.

McCrary, 427 U.S. at 186; there must be a clear expression of

Congress’ intent.

As noted earlier, 42 U.S.C. §9607(a)(4)(B) allows private

parties to recover “necessary costs of response . . . consistent

with the national contingency plan.” 42 U.S.C. §9601(25) de-

fines “response” as “remove, removal, remedy, and remedial

action; all such terms (including the terms ‘removal’ and ‘reme-

dial action’) include enforcement activities related thereto.”

(Emphasis added.). A private party cost-recovery action such as

this one is an enforcement activity within the meaning of the

statute. See Cadillac Fairview/California, Inc. v. Dow Chem.

Co., 840 F.2d 691, 694 (9th Cir. 1988); Wickland Oil Terminals

v. Asarco, Inc., 792 F.2d 887; 892 (9th Cir. 1986). Attorney fees

NOTES (Continued)

Park. That agreement, however, only obligated GE to clean the site so that it

would not be placed on the state hazardous site registry. Appellants’ Appendix,

vol. VII, §35, at 1581. To keep the site off of the registry, CGE had to meet the

state cleanup standards, which is what 40 CFR §300.71(a)(4) required. Thus,

the agreement did not obligate GE to clean the site past what CERCLA and

the NCP required.

A-13

and expenses necessarily are incurred in this kind of enforce-

ment activity and it would strain the statutory language to the

breaking point to read them out of the “necessary costs” that

section 9607(a)(4)(B) allows private parties to recover. We

therefore conclude that CERCLA authorizes, with a sufficient

degree of explicitness, the recovery by private parties of attor-

ney fees and expenses. This conclusion based on the statutory

language is consistent with two of the main purposes of CER-

CLA — prompt cleanup of hazardous waste sites and imposition

of all cleanup costs on the responsible party. These purposes

would be undermined if a non-polluter (such as GE) were forced

to absorb the litigation costs of recovering its response costs from

the polluter. The litigation costs could easily approach or even

exceed the response costs, thereby serving as a disincentive to

clean the site. :

Litton also questions whether the attorney fees awarded

here are reasonable in amount. We give great deference to the

District Court’s judgment in the award of attorney fees, because

“the district court is best equipped to determine whether hours

were reasonably expended [and] whether the attorneys’ hourly

rates are within the general rates charged . . . in the relevant

community .. .” Moore v. City of Des Moines, 766 F.2d 343,

346 (8th Cir. 1985), cert. denied, 474 U.S. 1060 (1986). Finding

no abuse of discretion, we affirm the award.

Based on our reading of the statute, we find no error in the

ruling of the District Court that CERCLA allows a private party

to recover its attorney fees and expenses incurred in bringing a

cost-recovery action pursuant to 42 U.S.C. §9607(a)(4)(B).!° We

10. We are not aware of any other circuit court ruling on this issue. We

note that various district courts have split on this question. Besides the District

Court in this case, this issue was decided in Pease & Curren Ref., Inc. v.

Spectrolab, Inc., 744 F. Supp. 945, 949-52 (C.D. Cal. 1990) (holding that

attorney fees are recoverable in a private party CERCLA action); Shapiro v.

Alexanderson, 741 F. Supp. 472, 480 (S.D. N.Y. 1990) (recoverable) ; United

States v. Hardage, 1990 WL 163434, *54 (W.D. Okl. 1990) (not recoverable);

Fallowfield Dev. Corp. v. Strunk, 1990 WL 52745, *5-*6 (E. D. Pa. 1990) (not

recoverable) ; Mesiti v. Microdot, Inc., 739 F. Supp. 57, 62-63 (D. N.H. 1990)

(not recoverable); Regan v. Cherry Corp., 706 F. Supp. 145, 149 (D. R.I.

A-14

are satisfied that the District Court's award was legally correct

and reasonable in amount and that it should not be disturbed.

VI.

We affirm the judgment of the District Court awarding GE

the reasonable and necessary costs of its cleanup, including the

attorney fees and expenses incurred in bringing this cost-

recovery action.

A true copy.

Attest:

Clerk, U. S. Court of Appeals,

Eighth Circuit

NOTES (Continued)

1989) (not recoverable); T & E Ind. v. Safety Light Corp., 680 F. Supp. 696,

708 (D. N.J. 1988) (not recoverable); BCW Assoc. v. Occidental Chem. Corp.,

1988 WL 102641, *23 (E.D. Pa. 1988) (not recoverable); and Hemingway

Transp., Inc. v. Khan, 108 B. R. 378, 383 (Bkrtcy. D. Mass. 1989) (not

recoverable).

A-15

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

No. 89-2845WM

GENERAL ELECTRIC COMPANY,

Appellee,

vs.

LITTON INDUSTRIAL AUTOMATION SYSTEMS, INC.

AND LITTON INDUSTRIES, INC..,

Appeilants

Appeal from the United States District Court for the

Western District of Missouri

After consideration of the court, appellee's application for

attorney fees, expenses, and interest in the amount to which the

parties have stipulated, namely, $100,000 is granted.

Appellants’ motion to stay the mandate pending application

to the Supreme Court for a writ of certiorari is also granted.

January 9, 1991

ORDER ENTERED AT THE DIRECTION OF THE COURT

Lbet-D. MM. Yous

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT

A-16

GENERAL ELECTRIC COMPANY,

Plaintiff,

LITTON BUSINESS SYSTEMS, INC.,

Defendant

No. 87-3333-CV-8-4.

United States District Court,

W.D. Missouri, $.D.

June 20, 1989.

ORDER

RUSSELL G. CLARK, District Judge.

Plaintiff brought this action against defendant for recovery

of costs pursuant to 42 U.S.C. §9607(a) of the Comprehensive

Environmental Response, Compensation & Liability Act of 1980

(CERCLA). This case was tried to the Court without a jury from

May 15, 1989 through May 18, 1989. Pursuant -to Rule 52,

Fed.R.Civ.P., the Court makes the following findings of fact and

conclusions of law.

FINDINGS OF FACT

1. Litton Industrial Automation Systems, Inc., Litton Busi-

ness Systems, Inc., and Litton Industries, Inc., are successors

by merger to Royal McBee Corporation, a New York corpora-

tion, and its subsidiary Royal Typewriter (hereinafter jointly

referred to as “Royal McBee’).

2. Royal McBee operated a typewriter manufacturing facil-

ity at 2401 East Sunshine Street, Springfield, Missouri, between

1959 and 1965.

3. In 1965, pursuant to an agreement of merger, Royal

McBee merged with Litton Industries, Inc. (“Litton”), a Dela-

ware corporation, and Litton became the surviving corporation.

4. At about the same time, the assets and liabilities of Royal

McBee were acquired by the Royal Typewriter Company, Inc.,

A-17

a division and wholly owned subsidiary of Litton which contin-

ued to operate the typewriter manufacturing business at the

same location until approximately July 1967.

5. In approximately July 1967, Litton merged its wholly-

owned subsidiary, Royal Typewriter Company, Inc., into some

other Litton wholly-owned subsidiaries, the survivor of which

became known as Litton Business Systems, Inc. (“LBSI”), a

New York corporation.

6. LESI closed the Royal business at 2401 East Sunshine

Street in 1969. GE purchased the Royal McBee building at 2401

East Sunshine in March, 1970.

7. During the period from 1958 through March, 1970,

Royal McBee, Royal Typewriter Company, Inc. and LBSI also

owned a tract of vacant land immediately north of Sunshine and

adjoining the Royal McBee typewriter facility to the immediate

west. In March, 1970, LBSI conveyed this tract (Sunshine

property) to GE as part of the transaction involving the manu-

facturing plant.

8. Effective August 1, 1988, Litton merged LBSI into

Litton Industrial Automation Systems, Inc. (“LIASI’), a Dela-

ware corporation, and LIASI assumed all of the obligations and

liabilities of LBSI.

9. Litton and LIASI currently are both duly authorized and

existing corporations under the laws of the State of Delaware.

10. In 1958 Royal McBee purchased land near the inter-

section of Sunshine and Glenstone Streets in Springfield, Mis-

souri for a plant. Royal McBee used its plant to manufacture

Royal typewriters.

11. As a byproduct of its manufacturing process, Royal

McBee generated cyanide-based electroplating wastes, sludge

from the bottom of electroplating tanks and spent plating bath

solution.

12. As a part of their duties, Royal McBee employees

poured, emptied and dumped the electroplating sludge, tank

bottoms and spent plating solution onto the soil surface of the

vacant western portion of the Sunshine property during the

period 1959-1962 in an area near a “turn-around” at the end of

an old construction road on the property.

A-18

13. Over time, the metals and cyanide from the wastes

dumped by Royal McBee leached and migrated outward and

downward from the original dumping location, thus accounting

for the larger area ultimately cleaned up.

14. Currently, the vacant western portion of the property

containing the site is adjacent to an apartment complex on the

west, a housing development on the north, and GE’s (formerly

Royal McBee’s) building on the east. The vacant western portion

of the property containing the site fronts on Sunshine Street, a

major east/west thoroughfare in Springfield and was one of the

last pieces of vacant property on Sunshine between Glenstone

Avenue and Highway 65. There is commerce, including retail,

manufacturing, restaurant, and housing all around the property.

Since the site has been cleaned up, the property has been

subdivided and is currently scheduled to be commercial, retail

and light industrial property. The gradient of the contaminated

area of the site is southwest toward the treeline and apartment

complex.

15. The same wastes which were disposed of on the site

from 1959-1962 were disposed of by Royal McBee and Litton at

the Fulbright landfill in Springfield, Missouri beginning in 1962

when the Fulbright landfill opened (Plaintiffs Zxhibit No. 99).

16. There is no evidence that GE dumped any electroplat-

ing wastes, or wastes containing the chemicals listed above on

the site or the property.

17. In the summer of 1980, when the Missouri Department

of Natural Resources (“MDNR”) was investigating the defen-

dant’s Fulbright dumping activities, GE first learned of Royal

McBee’s dumping of hazardous wastes on the site. MDNR

investigators sought and received GE’s permission to interview

former Royal McBee workers whom GE then employed. During

these interviews at GE’s plant, the employees described how

they dumped Royal McBee’s cyanide-based electroplating solu-

tions and residues on the ground at the Fulbright landfill and on

the Sunshine property.

18. In 1981, based on testing done by the MDNR and GE,

and the then present technology and health assessments, it was

GE’s and MDNR’s opinion that there was no potential for

A-19

contamination of the groundwater at the site. In 1984 GE agreed

to sell the vacant tract of the property including the site

(approximately 19 acres) to an investment group which subse-

quently assigned the property to Enterprise Park.

19. On July 19, 1985, the MDNR proposed registry of the

GE site on Missouri's Registry of Abandoned and Uncontrolled

Hazardous Waste Sites in Missouri. On August 16, 1985, GE

appealed the proposed registry of the site on Missouri's Registry

of Abandoned and Uncontrolled Hazardous Waste Sites. Litton

was notified of potential CERCLA claims in August, 1985, but

did not participate in any of the negotiations.

20. Pursuant to statute, the Missouri Hazardous Waste

Commission reviews the status of all sites proposed for the

registry which have been appealed. The GE site was discussed

at the Hazardous Waste Management Commission meeting on

at least three occasions both before and during the course of the

clean-up at the site. These Hazardous Waste Management

Commission meetings were public meetings of which there was

prior published public notice and at which members of the

public attended. See plaintiffs Exhibit No. 248.

21. On October 15, 1985, John Crellin, Director of the

Bureau of Epidemiology of the Missouri Department of Health

(“DOH”), stated that the concentrations of metal in the soil at

the Site “represent[ed] a significant health threat and contami-

nated soil should be removed.” Dr. Crellin’s health assessment

also stated that “current concentrations of chromium, copper,

zinc, nickel and arsenic at the General Electric site represent a

significant health risk to the public's health. . . . Cleanup at this ©

site should be concerned with removal of soil to reduce concen-

trations of these contaminants to below the recommended safe

soil level.” (Plaintiffs Exhibit No. 1).

22. In October 1985, GE hired OH Materials Company of

Findlay, Ohio, an experienced environmental services com-

pany, to investigate, assess, monitor and conduct any response

actions which were determined to be necessary.

23. On December 20, 1985 the Environmental Protection

Agency (“EPA”), found that enforcement action was needed by

Missouri for the GE site and that “review of old data revealed

cian ea aaa eae

A-20

that what was considered to be trace amounts in 1981 are now

acknowledged as representing a threat to human health and the

environment.” (Plaintiffs Exhibit No. 220).

24. Throughout the latter part of 1985 and 1986, GE and

MDNR engaged in extensive studies of the site and negotiations

over its remediation. These discussions culminated in a Consent

Decree entered into before the Missouri Hazardous Waste

Management Commission which set forth the circumstances and

requirements for ongoing remediation of the site. The Decree

was executed by GE, by Enterprise Park, by the Missouri

Attorney General's office, and by Frederick A. Brunner, Ph.D.,

the Director of MDNR. In general, the Decree was imple-

mented “to protect the public health and environment from

releases or threatened releases of waste materials, if any, from

the site through the development, design and implementation of

a remedial action plan.” (Plaintiffs Exhibit No. 158).

25. The Consent Decree required all remedial action for

the site to be “consistent with the National Contingency Plan

(“NCP”].” The Consent Decree required MDNR approval of all

remedial action.

26. Testing of the soil at the Sunshine property showed

that the concentration of metals from three feet deep to the soil

surface were considerably above the background levels (i.e.

normal soil levels) for the site and many times higher than the

safe soil levels determined by the Department of Health. Test

results from all of the testing which was performed at the site

confirmed that the metals found on the site — copper, chrome,

nickel, zinc, lead, and cyanide — were not there from natural

causes but were elevated, concentrated and associated with one

another, thus indicating that the property was a disposal site,

and that the levels of these heavy metals were greater than

background levels.

27. GE had OH Materials investigate a range of alterna-

tives for response actions at the site, to insure the response

actions ultimately taken would be consistent with the NCP and

Consent Decree.

28. OH Matcrials produced a Remedial Alternatives Eval-

uation for the site (hereinafter referred to as the “RATE report’)

A-21

which analyzed several alternative response actions. (Plaintiff s

Exhibit No. 5). The costs and benefits of those various alterna-

tives were estimated and outlined in the RATE report of

February, 1986. The most expensive remedy was excavation and

removal of the soil and disposal of it as a hazardous waste in a

hazardous waste landfill. Clay capping was seen to be the next

most expensive remedy, followed by excavation and removal as

a nonhazardous waste. Fencing and guarding was initially seen

as the least expensive remedy; however, guarding at a cost of

one hundred thousand dollars a year was seen as necessary given

the substantial risk outlined by the DOH and the likelihood that

any fence would be breached by children or others from the

surrounding apartments or residential areas. Guard service in

perpetuity drove the cost of that alternative up over all other

proposed remedies.

29. Evaluation of the site by OH Materials and the DOH

considered points of exposure, population, environmental and

welfare concerns at risk, amount, concentration, hazardous

properties, hydrogeological factors, and the extent to which the

. contamination levels exceeded the State standards.

30. The OHM personnel who performed the remediation

of this site, Messrs. Ossi, Haag, Edinger and Stevens, have

participated in scores of environmental projects under CERCLA

and the NCP, and have expertise in geology, hydrogeology,

engineering, and site remediation activities. Their Company has

numerous emergency response contracts with various state

governments as well as the '/SEPA. They and their company

were well qualified for the retiediation work they undertook on

behalf of the plaintiff. Each of them testified forthrightly and

credibly. Mr. Ossi testified as to the analytical results found at

the site, levels which the Court recognizes were well in excess

of those permitted by the Department of Health. Mr. Haag

testified as to his “ECA analysis,” which found by virtue of

elevation, concentration and association of various chemicals

that hazardous waste had been placed at the site. The area of

contamination identified by Mr. Haag’s ECA analysis coincided

with the dumping areas described by Messrs. Carroll and

McKinnis when Mr. Haag’s transparencies were placed on the

A-22

aerial photographs in evidence. Remediation was necessary

within the area defined by Mr. Haag; unnecessary areas were

not excavated; and the area of contamination was properly

identified.

31. Defendants presented no evidence of any less costly

alternatives for remediation of the site which would have met

the State clean-up levels.

32. Pursuant to the Missouri Superfund statute and regu-

lations, the MDNR stated that GE could clean up the site to the

less stringent of DOH standards or the background levels of

metals in the soil.

33. The original remedial levels were established by the

MDNR and incorporated into the Work Plan prepared by OH

Materials. These levels were: nickel—10 ppm; chromium and

lead —50 ppm; copper — 20 ppm; cyanide — 840 ppm; and zinc —

1,000 ppm. Arsenic was established as the higher of 4 ppb or

background levels to be later determined and approved bv the

MDNR.

34. The site was marked into fifty foot grids offsetting by

twenty-five feet the old sample locations so that the old sample

locations were in the center of each new grid. The soil was

excavated from grid to grid and samples were taken after grids

were excavated to determine if further excavation was neces-

sary. Excavation began October 13, 1986 and continued until

December 7, 1986, when it was terminated pending receipt of

analytical results.

35. On the first day of excavation, three 55-gallon drums

were discovered buried under the soil surface. On November

19, 1986 an apparent trench was discovered which contained a

fourth drum. The fourth drum contained substances which were

tested and found to be EP-toxic (characteristically hazardous).

36. The EP-toxic soil and the drums were removed from

the site during remediation and were transported to Chemical

Waste Management at Emelle, Alabama on or about November

3, 1987 and disposed of in a hazardous waste landfill.

37. Asa result of the discovery of the first three drums,

the MDNR required the Work Plan to be modified to provide

A-23

for a metal scan of the remedial area, which was performed

December 3, 1986.

38. Based on analytical results obtained from the work

done at the site, on February 17, 1987, GE requested from

MDNR and DOH a revision of the remedial levels to 150 ppm

for lead, 150 ppm for chrome, 20 ppm for arsenic and 20 ppm for

nickel, based on revised estimated background levels. The

MDNR and DOH subsequently revised and approved clean-up

levels of 230 ppm for lead, 230 ppm for chrome and 230 ppm for

arsenic based on a revised health assessment by the Department

of Health. The MDNR also later revised and approved the

remedial level for nickel to 15 ppm.

39. On November 17, 1987 analytical results indicated

that all remedial levels were reached in all grids except one

which was at bedrock. With the exception of the one grid which

was at bedrock, all grils were below the remedial levels

required by the Consent Decree with the MDNR and Work

Plan.

40. As the most cost effective method that achieved the

remedial objectives, GE had recommended disposing of the

excavated soil as a nonhazardous waste, or Missouri “special

waste,” in a sanitary landfill rather than a hazardous waste

landfill permitted under the Resource Conservation and Recov-

ery Act (“RCRA”). The MDNR agreed and allowed the waste to

be disposed of as a special waste, thus saving a great deal of

expense in transportation and disposal charges.

41. The MDNR approved all the response activities of GE

both before and after completion of the response actions.

MDNR personnel who reviewed, approved and/or were person-

ally present on site during remediation include Suzanne Mar-

cell—On Scene Coordinator, Greg Schoen — Field Technician,

Burt McCollough — Super Fund Unit Chief, Keith Schardein —

Super Fund Section Chief and Frederick A. Brunner, Ph.D. —

Director of the MDNR. On February 8, 1988, after final testing,

MDNR Director Frederick A. Brunner, Ph.D. issued an ap-

proval of GE’s Certificate of Completion of all Site Remediation.

42. Theodore F. Craver, an in-house environmental at-

torney and vice president for Litton, testified that on behalf of

A-24

Litton he received written notice of potential CERCLA claims

concerning the site on or about August 28, 1985, prior to the

incurrence of any response costs by GE. (See also plaintiff's

Exhibit No. 134). Mr. Craver also admitted that very shortly

thereafter he received a telephone call from GE’s in-house

counsel concerning potential Litton and GE cooperation in

clean-up of the site, also before GE began its investigation or

incurred any response costs. Mr. Craver received a subsequent

telephone call from GE’s in-house counsel in November of 1986,

approximately one month after the GE’s site remediation had

been commenced. Litton, and specifically Mr. Craver, has

experience in the environmental area dealing with hazardous

waste sites and was subsequently involved in the investigation of

the Fulbright landfill in Springfield during the entire period of

time GE investigated and cleaned up the Sunshine site.

43. GE spent $84,182.39 on the investigation, sampling,

analysis and development of the remedial investigation/feasi-

bility (“RI/FS”) study which were called in this case the Site

Data Report (RI) and the Remedial Alternatives Analysis (FS).

This cost also included the development of the Work Plan.

These costs represent out of pocket costs to third parties and

include no allocation of GE personnel costs and expetises

(Plaintiffs Exhibit No. 21).

44. The actual cost of the response actions exceeded the

original estimate due to several factors, but mostly due to the

unexpected presence of buried drums and the fact the nearby

landfill which had agreed to take the soil backed out at the last

minute due to local publicity. The closest permitted landfill

which would then accept contaminated soil was in St. Louis.

45. The actual cost of the clean-up, excavation, transpor-

tation, disposal of the hazardous soil and the analytical and

report preparation for the actual removal was $851,560.84.

Additionally, GE incurred $5,100 in telephone and utility fees.

These costs represent out of pocket costs to third parties and

include no allocation of GE personnel costs and expenses.

46. The response costs charged by OH Materials and paid

by GE were the ordinary and reasonable fees charged by OH

Materials for the work performed. The total reasonable and

A-25

necessary response costs on the site which were consistent with

the NCP was $940,843.23.

47. General Electric has incurred attorney’s fees in both

the administrative and litigation phases of this matter.

48. In March of 1987 GE made formal written demand on

Litton requesting that Litton indemnify GE for all past and

future response costs incurred in cleaning up the site.

CONCLUSIONS OF LAW

This suit was brought under the Comprehensive Environ-

mental Response, Compensation and Liability Act of 1980

(“CERCLA”), 42 U.S.C. §9601 et seg. This Court has jurisdic-

tion over the subject matter and parties and venue is proper. 42

U.S.C. §9613, 28 U.S.C. §1331. Any person, who at the time of

disposal of any hazardous substance owned or operated any

facility at which such hazardous substances were disposed of,

shall be liable for any other necessary costs of response incurred

by any other person consistent with the national contingency

plan, including interest on the amounts recoverable. 42 U.S.C.

§9607. In the instant case, GE’s prima facie claim for cost

recovery under §107(a)(4)(B) consists of the following elements:

1. Litton Business Systems, Inc. or Litton Indus-

tries, Inc. must fall within one of the four categories of

“covered persons.”

2. There must have been a release or a threatened

release of hazardous substances from the site.

3. The release or threatened release must have

caused General Electric Company to incur costs.

4. GE’s costs must be necessary costs of response.

5. GE’s response actions must be consistent with the

national contingency plan.

See Artesian Water Co. v. Government of New Castle County,

659 F.Supp. 1269, 1278-9 (D.Del. 1987) affd 851 F.2d 643 (3rd

Cir. 1988). Initially, defendant claims that plaintiffs action is

barred by the equitable doctrine of unclean hands. Defendant

A-26

also contends that there was not a release or threatened release

of hazardous substances from the site and that any costs incurred

were “not necessary” nor “consistent with the national contin-

gency plan.” Litton also argues that GE acted as a volunteer and

was not liable under CERCLA and therefore GE should not be

allowed recovery.

Unclean Hands Defense

Defendant contends that plaintiff is barred from recovering

the costs of the clean-up because subsequent to the discovery of

the wastes, GE sold the property without disclosure of the

previous dumping. The Court finds that the principle of unclean

hands is not applicable to the facts of this case. This is not a suit

between GE and a subsequent purchaser; this is a suit between

GE (the subsequent innocent purchaser of Litton) and Litton,

the party that dumped the materials. It is only when plaintiffs

improper conduct is the source or part of the source of his

equitable claim that he is to be barred because of the conduct.

What is material is not that the plaintiff's hands are dirty but that

he dirties them in acquiring the right he now asserts. Kay v.

Vatterott, 657 S.W.2nd 80, 83 (Mo.App. 1983). An application

of the unclean hands doctrine to the facts in this case would be

an injustice.

Furthermore, it is doubtful whether the doctrine is appli-

cable in CERCLA cases. Smith Land and Import Corporation v.

Celotex Corp., 851 F.2d 86, 90 (3d Cir. 1988), cert. denied

ntti; th , 109 S.Ct. 837, 102 L.Ed.2d 969 (1989) [quoting

Chemical Waste Management v. Armstrong World Industries,

669 F.Supp. 1285, 1291 n. 7 (E.D. Pa. 1987).] “Unclean hands”

is not available as a defense in a suit at law. Middleton

Enterprises, Inc. v. Churm, 618 F.Supp. 477, 479 (D.C. Mo.

1985) The fundamental purpose of CERCLA is to provide for the

expeditious and efficacious clean-up of hazardous waste sites.

United States v. Conservation Chemical Company, 628 F.Supp.

391, 404 (W.D. Mo. 1985). Congress intended and anticipated

that potential responsible persons would accept and assume the

responsibility to effect clean-up. Id. One legislative incentive for

ee ee

A-27

doing so was availability of a private cause of action under §107

for response costs. Id. In this action. Litton has not been injured

nor prejudiced by any actions of GE regarding the subsequent

sale of the property. Application of the unclean hands defense in

this context would turn congressional intent on its head. Id. The

Court rejects defendant’s contentions regarding the unclean

hands defense.

Covered Person

Defendant contends that GE may not recover because GE

was a “volunteer” not a covered person under CERCLA.

Defendant misconstrues the statute. It is the defendant who

must be a “covered person.” A covered person is liable to “any

other person.” See 42 U.S.C. §9607. A covered person is any

person who at the time of disposal of any hazardous substance

owned or operated any facility at which such hazardous sub-

stances were disposed. 42 U.S.C. §9607(a)(2). At the time of the

disposal, the site was owned by Royal McBee. The parties

provided the following stipulation to the Court:

i. The Royal McBee Corporation (“Royal McBee’),

operated a typewriter manufacturing facility at 2401 East

Sunshine Street, Springfield, Missouri, between 1959 and

1965.

2. In 1965, pursuant to an agreement of merger,

Royal McBee merged with Litton Industries, Inc.

(“Litton”), a Delaware corporation, and Litton became the

surviving corporation.

3. The Royal Typewriter Company, Inc., a wholly

owned subsidiary of Litton, acquired the assets and liabil-

ities of Royal McBee and continued to operate the type-

writer manufacturing business at the above-referenced

location from the date of the said merger in 1965 to

approximately July 1967.

4. In approximately July 1967, Litton merged its

wholly owned subsidiary, Royal Typewriter Company,

Inc., into some other Litton wholly-owned subsidiaries, the

A-28

survivor of which became known as Litton Business Sys-

tems, Inc. (“LBSI’).

5. During the period from 1959 through March,

1970, Royal McBee, Royal Typewriter Company, Inc. or

LBSI owned the approximate 19 acre tract of vacant land

immediately north of Sunshine and adjoining the Royal

McBee typewriter facility to the immediate West. In

approximately March, 1970, LBSI conveyed this tract to

General Electric Company.

6. The Royal business at 2401 East Sunshine Street

was closed by LBSI in 1969.

7. Effective August 1, 1988, Litton merged LBSI into

Litton Industrial Automation Systems, Inc., a Delaware

corporation (“LIASI”).

8. Litton and LIASI currently are both duly autho-

rized and existing corporations under the laws of the State

of Delaware.

Plaintiff substituted Litton Industrial Automation System, Inc.

as defendant in the current case.

A person is defined as an individual, firm, corporation,

association, partnership, consortium, joint venture, commercial

entity. . . . 42 U.S.C. §9601(21). The disposal and the current

action occurred between 1958 and 1963. Therefore, LIASI is a

person who owned or operated a facility at the time of disposal,

and, as such, is the proper defendant in this action.

Release of Hazardous Substance From the Site

“Hazardous substance” means . . . (C) any hazardous waste

having the characteristics identified under or listed pursuant to

§3001 of the Solid Waste Disposal Act [42 U.S.C. §6921]. 42

U.S.C. §9601(14). The Solid Waste Disposal Act has been

amended and §3001 may be found at 42 U.S.C. §6921 “identi-

fication and listing of hazardous waste.” Section 6921 provides

that the administrator (of the EPA) shall promulgate regulations

identifying the characteristics of hazardous waste and listing

A-29

particular hazardous waste. 42 U.S.C. §6921(b)(1). A solid waste

is a hazardous waste if:

(1) it is not excluded from regulation as a hazardous

waste under 261.4(b); and

(2) it meets any of the following criteria:

(i) it exhibits any of the characteristics of hazard-

ous waste identified in subpart (c).

(ii) it is listed in subpart (d) and has not been

excluded from the list in subpart (d) under sections

260.20 and 260.22 of this chapter.

40 C.F.R. §261.3 (7/1/86 edition).

Subpart (c) defines characteristically hazardous substances

— those which have the characteristics of ignitability, corrosiv-

ity, reactivity and EP toxicity. 40 C.F.R. §261.20 (7/1/86

edition). Subpart (d) contains lists of hazardous wastes. Except

for the fourth drum, at issue in this case are the listed materials

in subpart (d). Spent cyanide plating bath solutions from elec-

troplating operations, plating bath residues from the bottom of

plating baths from electroplating operations, where cyanides are

used in the process, and spent stripping and cleaning bath

solutions from electroplating operations, where cyanides are

used in the process, are listed hazardous waste from nonspecific

sources. 40 C.F.R. §261.31, FOO7-FOOS9 (7/1/86 edition). [The

Court is using the Code of Federal Regulations which was in

effect at the time of the clean-up, however, the Court notes that

the current edition of the Code of Federal Regulations contains

FOO7-FOOS.

The evidence in this case indicates that cyanide was used in

the plating operations of Royal McBee. Two witnesses, Frank

Carroll and Harold McKinnis, specifically recall depositing

barrels with acid, bleach, cadmium plated sludge, chrome, zinc

.and cyanide products on the land in question in this suit. The

witnesses personal recollection is confirmed by the extensive

testing which was completed by OH Materials on the composi-

tion of the land where the dumping occurred. Additionally, the

analysis done by the MDNR indicated elevated levels ef metals

A-30

and cyanide. The MDNR indicated that “current conceatrations

of chromium, copper, zinc, nickel and arsenic at the GE site

represent a significant health threat and contaminated soil

should be removed.” The substance which was dumped on the

GE site was a listed hazardous waste pursuant to subpart (d).

A “release” means any spilling, leaking, pumping, pouring,

emitting, emptying, discharging, injection, escaping, leaching,

dumping or disposing into the environment. 42 U.S.C.

§9601(22). From 1958 to 1963, defendant dumped 500 gallons

per year of waste chemicals on the ground in question. Addi-

tionally, as was ascertained at trial, a trench was used to bury a

barrel which contained E.P. toxic material. A release of hazard-

ous substances occurred.

The site is a “facility” because it is an area where hazardous

substances have been deposited or come to be located. A facility

is defined at §101(9) as “any site or area where a hazardous

substance has been deposited, stored, disposed of, or placed or

otherwise come to be located.” 42 U.S.C. §9601(9).

Defendant spent considerable time arguing that the sub-

stances are not “hazardous” by today’s standards and should not

have been considered hazardous in 1985. However, it would be

improper for this Court to second-guess the listings propounded

by the administrator of the EPA. This Court and the parties to

this action were bound by the law as passed by Congress and the

regulations as set forth in the Code of Federal Regulations.

There would be no consistency in clean-ups if each court were to

assess whether the EPA is correct in its regulations. If parties

waited for a court to determine which waste is hazardous, any

necessary clean-up would be delayed. in the present case, there

would have been no clean-up or use of the present site four years

after the MDNR declared “a significant health risk.” The

opinions of defendant's expert, Dr. Tardiff, are better suited for

testimony before Congress or the EPA. For the purposes of this

case, the cyanide plating bath solutions, residues, and the drums

are defined as hazardous substances under CERCLA.

Defendant faults the plaintiff tor not engaging its own

toxicologist to dispute the standards as set by the Missouri

Department of Natural Resources; however, employment of a

A-31

toxicologist was not necessary to comply with the National

Contingency Plan. As noted above, the standards, which were

set by the Missouri Department of Health, and relied upon by

the MDNR, and finally acted upon by the plaintiff, cannot now

be changed by this Court. In arguing that Missouri standards

were followed by the plaintiff and not federal standards, the

defendant overlooks the complex scheme of CERCLA which

directly provides for state input. MDNR was the state agency

which reports to the federal EPA. The EPA also adopted the

MDNR recommendation as evidenced in plaintiff's Exhibit 220.

The promulgated Missouri Hazardous Waste Management

Law, R.S.Mo. §260.350 et seq. (referred to as the “Missouri

Superfund Statute”), including the provisions dealing with

abandoned and uncontrolled sites, R.S.MO. §§260.435 through

260.550, and the regulations promulgated thereunder, 10

C.S.R. §25.10, are laws and regulations which were applicable

or relevant and appropriate to the site and were therefore

ARARs for the site. Clean-up levels for MDNR approved

remedial actions under 10 C.S.R. §25-10.010(3) are set by the

Missouri Department of Health (DOH) pursuant to the statutory

delegation of powers in R.S.Mo. §260.445.5 which provides that

the MDNR “shall utilize the department of health [DOH] when

assessing the effects of an abandoned or uncontrolled site on

human health.” See plaintiffs Exhibit No. 253.

Finally, the Court notes the consent agreement between

defendant and the EPA on the Fulbright/Sac River landfill. The

credible testimony was that the same wastes were released on

the Sunshine site and the Fulbright/Sac site. In particular, the

Court finds that Mr. Theodore Craver, Litton’s corporate rep-

resentative in this case, executed an Administrative Order on

Consent which contains numerous “Findings of Fact” and

“Conclusions of Law” which are relevant herein. In particular,

the Administrative Order on Consent, in evidence as plaintiff's

Exhibit 254, provides in pertinent part:

5. The Royal McBee business, and its successor busi-

ness(es), which operated at 2401 E. Sunshine Street in

Springfield, Missouri disposed of or caused the disposal of

A-32

hazardous substances at the Fulbright Landfill between

approximately 1962 and 1968 and at the Sac River

Landfill... .

6. The hazardous substances which were disposed of

at the Landfills by the Royal McBee business and/or its

successor business(es) included spent acids and plating

residues, among others. . . .

Release or Threatened Release Must Have Caused

GE to Incur Costs

Although there is considerable debate over the necessity

and amount of response costs, there does not appear to be a

serious debate whether the release or threatened release of the

hazardous substance caused GE to incur some costs. “The terms

‘respond’ or ‘response’ means remove, removal, remedy and

remedial action, all such terms (including the terms ‘removal’

and ‘remedial’ action) include enforcement activities related

thereto.” 42 U.S.C. §9601(25). Plaintiff is claiming the cost of

investigation, planning, monitoring and implementing the re-

sponse actions as well as costs, attorney's fees and prejudgment

interest. It was the intent of Congress that CERCLA be given a

broad interpretation so as not to restrict the liability of those

responsible parties. United States v. Northeastern Pharmaceu-

tical and Chemical Company, Inc., 579 F.Supp. 823, 852

(W.D.Mo.1984). An award of prejudgment interest is not for-

eign to actions involving environmental statutes. Id. (citations

omitted). Additionally, CERCLA specifically allows for the

recovery of attorney's fees. At trial, defendant argued that GE

had not presented a proper claim for attorney's fees. In the

amended complaint filed on August 15, 1988, GE prayed for the

following relief, “that this Court enter judgment in favor of

General Electric and against Litton . . . in the amount of the

costs of response incurred by General Electric, including inter-

est and attorney's fees.” Therefore, attorney's fees and predjug-

ment interest will be properly recoverable as response costs.

A-33

Response Must Be Necessary and Consistent with NCP

Defendant's primary contention is that the response costs

incurred by General Electric were neither necessary nor con-

sistent with the National Contingency Plan.

Section 300.71 provides:

(a)(1) Any person may undertake a response action to

reduce or eliminate the release or threat of release of

hazardous substances, or pollutants or contaminants. Sec-

tion 107 of CERCLA authorizes persons to recover certain

response costs consistent with this Plan from responsible

parties.

(2) For purposes of cost recovery under section 107 of

CERCLA, . . . aresponse action will be consistent with the

NCP if the person taking the response action:

(i) Where the action is a removal action, acts in

circumstances warranting removal and implements removal

action consistent with §300.65.

(ii) Where the action is a remedial action:

(A) Provides for appropriate site investigation and

analysis of remedial alternatives as required under §300.68;

(B) Complies with the provisions of paragraphs (e)

through (i) of §300.68;

(D) Provides an opportunity for appropriate public

comment concerning the selection of a remedial action

consistent with paragraph (d) of §300.67 unless compliance

with the legally applicable or relevant and appropriate State

and local requirements identified under paragraph (a)(4) of

this section provides a substantially equivalent opportunity

for public involvement in the choice of remedy (emphasis

added).

* * *

A-34

(4) Persons performing response actions that are nei-

ther Fund-financed nor pursuant to action under section

106 of CERCLA shall comply with all otherwise legally

applicable or relevant and appropriate Federal, State and

local requirements, including permit requirements.

Thus, a response action may be consistent with the NCP in

either of two ways: as a removal or remedial action. Primarily,

Litton argues that GE did not comply with the criteria for a

remedial action. Litton argues that GE should have provided for

public comment and that the remedy was too broad for the

health risks involved. Defendant further argues that had a

proper assessment been done, a more cost effective method,

such as encapsulating the soil, would have been chosen.

The National Contingency Plan can be found at 40 C.F.R.

300.61 et seq. The National Contingency Plan specifically pro-

vides that no federal approval of any kind is a prerequisite to a

cost recovery under §107. 50 Fed.Reg. 47934 (Nov. 20, 1985)

(preamble to NCP). The NCP is a rule that presents the federal

government's general plan or framework for responding to

hazardous substances releases. The NCP is not intended to

provide complex and detailed site-specific decisionmaking cri-

teria. 50 Fed.Reg. 47920 (Nov. 20, 1985) (preamble to NCP).

While some of the subpart is oriented toward federally funded

response actions, the subpart may be used as guidance concern-

ing methods and criteria for response actions by other parties

under other funding mechanisms. 40 C.F.R. 300.61(e)(2). Ex-

cept as provided in §300.71, nothing in this part limits the rights

of any person to seek recovery of response costs frorn responsi-

ble parties pursuant to CERCLA §107. Id.

The Court finds that GE’s action was consistent with the

NCP as a removal action. Section 300.64 provides:

(a) A preliminary assessment of a release or threat of a

release identified for possible CERCLA response pursuant

to §300.65 shall, as appropriate, be undertaken by the lead

agency as promptly as possible. The lead agency shall, as

appropriate, base the assessment on readily available infor-

mation. This assessment may include but is not limited to:

A-35

(1) Identification of the source and nature of the

release or threat of release;

(2) Evaluation by HHS or by other sources (e.g., State

public health agencies) of the threat to public health;

(3) Evaluation of the magnitude of the potential threat;

(4) Evaluation of factors necessary to make the deter-

mination of whether a removal is necessary; and

(5) Determination if a non-Federal party is undertak-

ing proper response.

* * *

the OSC or lead agency determines:

(1) There is no release or threat of release;

(2) The source is neither a vessel nor a facility;

(3) The release does not involve a hazardous sub-

stance, nor a pollutant or contaminant;

(4) The amount, quantity, and concentration released

does not warrant Federal response;

(5) A party responsible for the release, or any other

person, is providing appropriate response, and on-scene

monitoring by the government is not required; or

(6) The assessment is completed.

In this action it is clear that the state public health agencies

responsible for the evaluation of the threat to public health (the

MDNR and DOH) concluded that the concentration of chro-

mium, copper, zinc, nickel and arsenic at the General Electric

site represented a significant health risk to the public’s health.

(Plaintiffs Exhibit 1). As the “lead agency”, the MDNR also

ascertained that health effects may occur as a result of exposure

through ingestion of contaminated soils.

A-36

Defendant strenuously argues that the Missouri Depart-

ment of Health assessment (Dr. Crellin’s report) was an inaccu-

rate assessment of the health risk. As noted above, those

arguments are better addressed to the legislature, the Missouri

Department of Natural Resources or the Missouri Department

of Health. Section 300.65 provides that the lead agency shall

first review the preliminary assessment and then have the

responsible parties perform the necessary removal actions.

DOH provided the preliminary assessment, DNR reviewed the

assessment and GE performed the removal.

The regulations further provide:

(b)(1) At any release, regardless of whether the site is

included on the National Priorities List, where the lead

agency determines that there is a threat to public health or

welfare or the environment, based on the factors in para-

graph (b)(2) of this section, the lead agency may take any

appropriate action to abate, minimize, stabilize, mitigate,

or eliminate the release or threat of release, or the threat

resulting from the release or threat of release.

(2) The following factors shall be considered in deter-

mining the appropriateness of a removal action pursuant to

this subsection:

(i) Actual or potential exposure to hazardous sub-

stances or pollutants or contaminants by nearby popula-

tions, animals, or food chain;

(ii) Actual or potential contamination of drinking water

supplies or sensitive ecosystems;

(iii) Hazardous substances or pollutants or contami-

nants in drums, barrels, tanks, or other bulk storage

containers, that may pose a threat of release;

(iv) High levels of hazardous substances or pollutants

or contaminants in soils largely at or near the surface, that

may migrate;

A-37

(v) Weather conditions that may cause hazardous sub-

stances or pollutants or contaminants to migrate or be

released;

(vi) Threat of fire or explosion;

(vii) The availablity of other appropriate Federal or

State response mechanisms to respond to the release [not

applicable to private party responses];

(viii) Other situations or factors which may pose

threats to public health or welfare or the environment.

40 C.F.R. 300.65

Again, as noted above, in this action the lead agency

determined that there was a threat to the public health or

welfare based upon the actual or potential exposure to hazardous

substances primarily due to the high levels of hazardous sub-

stances or pollutants in soils at or near the surface. The agency

determined that the “appropriate action” was to eliminate the

release or threat of release. The Missouri Department of Natural

Resources noted that with unrestricted land use a potential for

future exposure does exist at that site and the “[c]lean-up at this

site should be concerned with removal of soil to reduce concen-

trations of these contaminants to below the recommended safe

soil level.” It is clear to this Court that plaintiff implemented the

removal action consistent with §300.65.

Next, defendant contends that plaintiff failed to comply

with the remedial action provision of the NCP by not holding

public hearings. Public hearings are not mandated in the NCP

when compliance with legally applicable or relevant and appro-

priate state requirements provides a substantially equivalent

opportunity for public involvement. The property in question

was being developed for unrestricted land use. A consent decree

was entered between MDNR and plaintiff. The MDNR moni-

tored the appropriateness of the action throughout the clean-up.

Additionally, the EPA found that enforcement action was

needed by Missouri for the GE site and that “[R]eview of old

data revealed that what was considered to be trace amounts in

A-38

1981 are now acknowledged as representing a threat to human

health and environment.”

It is clear to the Court that no public hearing was required

due to the fact that GE was complying with legally applicable or

relevant and appropriate state requirements that the waste be

removed. Furthermore, if notice to the public is a requirement,

the input of the Missouri Department of Natural Resources

serves as a substitute for public comment. Defendant was

specifically notified that a clean-up was necessary and that

defendant was considered a responsible party. Statutes such as

CERCLA which were enacted for the protection and preserva-

tion of public health are to be given an extremely liberal

construction for the accomplishment of their beneficial objec-

tives. Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805

F.2d 1074, 1081 (ist Cir. 1986). “Courts will not interpret

section 9607(a) in any way that apparently frustrates the statute's

goals, in the absence of a specific congressional intent other-

wise.” United States v. Aceto Agricultural Chemical-Corp., et

al., 872 F.2d 1373 (8th Cir. 1989) (quoting Dedham).

Furthermore, plaintiff complied with §300.71(1)(2)(i) by

providing an appropriate site investigation and analysis of reme-

dial alternatives as required under 300.68 when they hired OH

Materials to do their site investigation. Defendant’s claim that

the site investigation done by OH Materials was not consistent

with 300.65 has no merit. The regulations provide that a

remedial investigation/feasible study (RI/FS) shall be under-

taken by the lead agency to determine the nature and exteut of

the threat presented by the release and evaluate proposed

remedies. 40 C.F.R. §300.68(d). That study is to include

sampling, monitoring and exposure assessment. OH Materials

provided an extensive sampling of the soil contained at the site.

(See plaintiffs Exhibits 3, 4 and 5). The regulations specifically

provide that during the remedial investigation, the original

scoping of the project may be modified based upon the factors in

§300.68(e). Modifications were made during the remediation.

Section 300.68(e) provides that the lead agency, in cooper-

ation with the states, will examine available information and

determine the type of response that may be needed te remedy

A-39

the release based upon the factors in Paragraph (e)(2) of §300.68.

Subsection (e)(2) provides that the factors should be considered

as appropriate. Defendant argued that several of the factors

were not considered by the plaintiff in the scoping of response

actions. For instance, defendant claims that the plaintiff did not

consider the climate. The Court finds that the plaintiff consid-

ered all of the appropriate factors as evidenced by plaintiffs

Exhibits 1 and 3 through 11. Furthermore, as evidenced in the

preamble to the National Contingency Plan, the NCP “is a rule

that presents the federal government’s general pian or frame-

work for responding to hazardous substance releases. The NCP

in «ot intended to provide complex and detailed site-specific

decisionmaking criteria. EPA has developed guidance on the

feasibility study process and is developing additional addenda to

that guidance to more fully detail the information to be consid-

ered in decision-making.” 50 Fed.Reg. (Nov. 20, 1985) (pre-

amble to NCP) (p. 43 Westlaw). EPA intends that the decision-

making process to be used at each site to determine applicable

or relevant and appropriate requirements should be, insofar as

possible, straightforward enough to lead private parties to select

remedies that protect public health and the environment. Id. at

43-44.

Consistency with the National Contingency Plan does not

necessitate strict compliance with its provisions. NL Industries,

Inc. v. Kaplan, 792 F.2d 896, 898-99 (9th Cir. 1986). Congress

intended and anticipated that potentially resvonsible persons

would accept and assume the responsibility to effect clean-up.

Conservation Chemical Company, 628 F. Supp. at 405. Neither

EPA approval nor national priorities listings are prerequisites for

private recovery of response costs which are otherwise consis-

tent with the NCP. Conservation Chemical Co. at 405. Because

one of the major purposes of CERCLA is “to induce such

persons voluntarily to pursue appropriate environmental re-

sponse actions with respect to inactive hazardous waste sites,” a

private party need not await a government mandate or govern-

mental approval to respond to a hazardous waste site. United

States v. Newcastle County, 642 F. Supp. 1258, 1264 (D. Del.

1986) (emphasis in original) (quoting H. R. Rep. 1016, 96th

ee Tre

A-40

Cong. 2d Sess. 17, reprinted in 1980 U.S. Code Cong. Ad.

News 6119, 6120).

In response to contaminated soil or waste — actions to

remove, treat, or contain the soil or waste to reduce or eliminate

the potential for hazardous substances or pollutants or contam-

inants to contaminate other media (ground water, surface water,

or air) and to reduce or eliminate the potential for such

substances to be inhaled, absorbed or ingested are considered

appropriate actions. 40 C.F.R. §300.68(j)(3). An alternative that

far exceeds the cost of other alternatives evaluated and that does

not provide substantially greater public health or environmental

protection or technical reliability shali usually be excluded from

further consideration. However, an alternative that meets or

exceeds applicable or relevant and appropriate federal public

health and environmental requirements provides substantially

greater protection than do alternatives that do not meet such

requirements. 40 C.F.R. §300.68(g)(1). The analysis done by

OH Materials showed that at the time the decision to remove

the contaminants was made, not only was removal the most cost

effective, it was mandated by the state standard. As noted

above, under §300.71 plaintiff was obligated to comply with all

otherwise legally applicable or relevant anc appropriate federal,

state and local requirements. EPA’s policy statement was that

compliance with applicable or relevant and appropriate require-

ments is necessary to provide adequate protection of human

health and the environment. 50 Fed. Reg. 47916 (Nov. 20, 1985)

(preamble to NCP). Any remedial action lesser than clean-up to

background or DOH standards by removing the soil would not

have been consistent with the NCP. “[T]he fact chat [GE] sought

and obtained the approval of DNR before beginning the clean-

up and bringing this action indicates that [GE’s] costs were

consistent with the national contingency plan.” Anheuser-Busch

v. Chas. Todd Corp., No. 85-236C(A) slip op. at 10 (E.D. Mo.

November 4, 1987).

The credible evidence presented at trial convinces the

Court that plaintiff engaged in a proper assessment of the

potential hazard and evaluation of the alternative modes of

remediation. Plaintiff then selected the remedy that was the

A-41

most cost effective in the long run. In making that decision, GE

certainly considered that the land was to be used for develop-

ment of an industrial park and that the contaminated area was

thought to be relatively minor. GE was not aware that a trench

had been dug and barrels had been buried on the site, neces-

sitating an even greater clean-up. GE was realistic in its

assessment that a clay cap would have been a temporary solution

making the land unusable as an industrial park. Defendant had

every opportunity to participate in the clean-up but failed to do

so. Therefore, the Court finds that the plaintiff met its burden in

showing that the defendant is a covered person, that a release of

hazardous substance from the site occurred, that the release or

threatened release caused plaintiff to incur costs, that those costs

were necessary costs of the response and that the response

actions were consistent with the NCP.

The NCP lists remedial actions which generally are appro-

priate for a given type of site. Furthermore, equity and the law

dictate that the party responsible for the contamination be

liable. The defendant, therefore, will be held liable for the

cleanup on the “Sunshine” property.

Cost Analysis

Plainitiff presented documentation which indicates costs

incurred by the plaintiff for the assessment and clean-up in the

amount of $940,843.23. (Plaintiff spent $84,182.39 on the initial

assessment, $5,100 on utility costs and $851,560.84 for the

clean-up.) Under CERCLA prejudgment interest accrues “from

the later of (i) the date payment of a specified amount is

demanded in writing, or (ii) the date of the expenditure

concerned.” 42 U.S.C. §9607(a). The plainitiff made written

demand for its previously incurred response costs, excluding

attorney's fees and court costs, at the initiation of its action

against defendant, which was on June 19, 1987. All additional

response costs, excluding attorney's fees and court costs, were

incurred by September 9, 1988. Accordingly, these are the dates

when interest commenced accruing.

A-42

Plaintiff submitted and defendant has not challenged the

appropriate prejudgment interest. The Court accepts the calcu-

lations provided in Appendix A of plaintiffs post-trial brief for

the appropriate interest rate. The total amount of interest is

$134,788.87. The total amount of response costs, excluding

attorney's fees and court costs with prejudgment interest to June

20, 1989 is $1,075,632.10.

Defendant argues the collateral benefit rule applies to this

case. Assuming however that the “Collateral Benefit Rule” is a

legally cognizable rule with potential application te GE, the

Court finds its application to be factually unsupported. The

apparent linchpin of Litton’s “collateral benefit” argument is

Litton’s contention that GE knew at the time it purchased the

subject property that it was acquiring industrial property with a

dump prominently located thereon. The trial evidence failed to

support this. There is no evidence in the record that the

property was being used as a dump site at the time GE

purchased the property in 1970. Moreover, Litton’s dumping

took place in a grassy field behind the row of trees which ran east

and west across the property. There is no evidence that such

dumping activities could have been viewed due to the high

grasses, the location of the tree line, and the fact that the area of

the dump was not visible from most points around the plant due

to the tree line and grasses.

On June 6, 1989, defendant filed a document entitled

“Constitutional Objections To the Issues Raised By Plaintiff.”

Defendant filed no suggestions in favor of the motion nor

support at trial for the motion. The motion will be denied.

Accordingly, for the reasons set forth above, it is hereby

ORDERED that plaintiff shall within thirty (30) days from

the entry of this order submit an itemization of the attorney's

fees and costs incurred by plaintiff after June 19, 1987 at which

time defendant shall be granted twenty (20) days to respond to

plaintiff's itemization of costs incurred; and it is further

ORDERED that upon a determination of the amounts of

attorney's fees and costs to which plaintiff is entitled to recover,

judgment will be entered in favor of plaintiff and against

defendant; and it is further

A-43

ORDERED that defendant's constitutional objections are

denied for failure to comply with Local Rule 13(B).

A-44

IN THE UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF MISSOURI

SOUTHERN DIVISION

No. 87-3333-CV-S-4

GENERAL ELECTRIC COMPANY,

Plaintiff,

vs.

LITTON INDUSTRIAL AUTOMATION

SYSTEMS, INC., et al.,

Defendants.

ORDER

Before the Court is the verified application of plaintiff for

attorney's fees, expenses and prejudgment interest. Defendants

filed suggestions in opposition to plaintiffs request for attorney's

fees and, in the alternative, in support of a motion to produce.

Defendants also have a motion to stay execution of judgment to

waive the requirements of posting a supersedeas bond and a

motion to consider constitutional objections to issues raised by

plaintiff. Plaintiff has filed suggestions in opposition to the

motion to produce, requesting a protective order, and sugges-

tions in opposition to the motion to stay execution of judgment.

Defendants’ motion to stay execution of the judgment and

to waive the requirement of posting a supersedeas bond will be

denied. Plaintiffs motion for protective order regarding defen-

dants’ document request for attorney fee documents will be

granted. Defendants’ motion to produce will be denied. Defen-

dants will be ordered to provide the Court with an affidavit of

defendants’ attorney fee information, as set forth below. The

Court would suggest the defendants use the very detailed

application by plaintiff's attorneys including the hours billed per

A-45

month, the hours billed per person, the hourly rate, and activity

breakdown and a breakdown of fees.

Defendants’ motion to stay the execution of judgment to

waive the requirement of posting a supersedeas bond argues

that the defendants have sufficient assets as shown by the annual

report of Litton to satisfy any judgment or portion thereof if

affirmed on appeal. Defendants cite no case law or rules to

support their position. When an appeal is taken the appellant by

giving a supersedeas bond may obtain a stay subject to the

exceptions contained in subdivision (a) of this rule.

Fed.R.Civ.P. 62(d). It has always been this Court's position that

the plaintiff who has won at trial should not be put to the

expense of defending a judgment on appeal unless the defen-

dants take reasonable steps to assure that the judgment will be

paid if it is affirmed. This case would be particularly ill-suited to

waiving the requirement of a supersedeas bond when the

evidence at trial showed a complicated series of corporate

reorganizations and mergers. Therefore defendants’ motion to

stay the execution of judgment will be denied unless a superse-

deas bond is posted. The Court cannot assess the amount of the

bond until the attorney's fees are ascertained, however, the

parties are advised that the bond shall be for the satisfaction of

the whole amount of judgment, together with costs on appeal,

interest and dangpges for delay.

Defendants filed a motion to produce all itemized bills

submitted to plaintiff by its attorneys for attorneys fees and

expenses, all time slips or any other written records supporting

such bills, all vouchers and supporting documents indicating

expenses paid, all cancelled checks indicating payment by

plaintiff to its attorneys, the contract of employment between

piaintiff and plaintiffs attorney relating to this case and all

documents which itemize or detail any work done by plaintiff's

experts in this case. Defendants claim that they are entitled to

examine the documents requested so that they might analyze

and if necessary contest the amount of attorney's fees and

expenses claimed. Clearly, defendants’ motion is overly broad.

Defendants cite no cases for the proposition that defendants’

counsel should be entitled to examine each and every document

A-46

and time slip and cross-examine plaintiffs counsel for justifica-

tion of each hour claimed. Contrary to defendants’ assertion that

this case was not complicated, the Court notes that extensive

discovery occurred, that defendants did not stipulate until the

time of trial as to the successorship of the Litton corporations,

and just weeks before trial, defendants informed the Court of

their intentions to raise several issues which ultimately were not

allowed at trial.

Attorneys are generally required to submit detailed affida-

vits which itemize and explain their fee claims. Grunin v.

International House of Pancakes, 513 F.2d 114, 127 (8th Cir.),

cert. denied, 423 U.S. 864 (1975). Furthermore, the district

courts should not become the inevitable haven for adversary

proceedings concerning attorney's fees. Moore v. City of Des

Moines, lowa, 766 F.2d 343, 346 (8th Cir. 1985), cert. denied,

474 U.S. 1060 (1986). In this case it is clear that plaintiffs have

complied with the Grunin criteria. Any further disclosure by the

plaintiff could compromise plaintiffs position in further appeals.

Therefore, defendants must produce to this Court affidavits

supporting their contention that the attorney’s fees are excessive

and out of line for the work involved in this type of case. If, after

reviewing defendants’ affidavits, the Court feels that additional

discovery is warranted, then both parties may be asked to

produce documents in camera. Therefore, within ten days of the

date of this order defendants’ counsel must supply the Court

with affidavits of the total number of hours and hourly rates

charged by defendants’ attorneys, paralegals and any expenses

claimed by defendants.

Defendants have also filed a document entitled “Motion to

Consider Consitutional Objections to Issues Raised by Plaintiff.’

Defendants state that the purpose of the motion is to preserve

the constitutional objections set forth during the trial. It is not

entirely clear to the Court what specific facts or law the

defendants are objecting to, however, defendants have supplied

the Court with no cases to substantiate their “constitutional”

objections. Defendants’ assertion that “the facts upon which the

constitutional objection was raised absolutely unique” [sic] has

no merit. If the defendants are concerned about preserving their

A-47

constitutional objection, the Court finds that the defendants

have not made clear the specific constitutional objections. If,

during the trial, defendants did make appropriate constitutional

objections, the Court will stand on the rulings made at that time.

Finally, the Court will amend the order entered on June

20, 1989 which names only Litton Business Systems, Inc. (LBSI)

as a defendant to reflect that defendants, Litton Industries, Inc.

(Litton) and Litton Industrial Automation Systems, Inc. (LIASI)

are the appropriate defendants. Accordingly, it is

ORDERED that plaintiffs motion for protective order is

granted; and it is further

ORDERED that defendants’ motion to produce is denied;

and it is further

ORDERED that defendants’ motion to stay execution of

judgment and to waive the requirement of posting a supersedeas

bond is denied; and it is further

ORDERED that defendants produce affidavits reflecting

the total-amount, the total number of hours, and the charge per

hour for all attorney's fees, paralegal fees and expenses for any

attorney involved in this litigation; and it is further

ORDERED that the Clerk of Court substitute LIASI for

LBSI and add Litton Industries, Inc. as party defendants.

D STATES DISTRICT COURT

Dated: August 7, 1989

A-48

IN THE UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF MISSOURI

SOUTHERN DIVISION

No. 87-3333-CV-S-4

GENERAL ELECTRIC COMPANY,

Plaintiff,

vs.

LITTON INDUSTRIAL AUTOMATION

SYSTEMS, INC., et al.,

Defendants.

ORDER

Before the Court is plaintiffs application for attorneys’ fees,

expenses and prejudgment interest. Plaintiffs application will

be granted as set forth below.

On June 20, 1989, the Court entered an order in the

above-captioned case stating that upon a determination of the

amount of attorneys’ fees and costs plaintiff is entitled to

recover, judgment would be entered in favor of plaintiff.

General Electric Co. v. Litton Business Systems, Inc., 715

F.Supp. 949, 964 (W.D. Mo. 1989). The Court gave plaintiff

thirty days to submit an itemization of attorneys’ fees and costs

incurred by plaintiff after June 19, 1987. Id. Plaintiff has

submitted such an itemization requesting attorneys’ fees and

expenses, plus interest, both prior and subsequent to the filing

of this suit on June 19, 1987.

Post-Filing Attorneys’ Fees

Plaintiff argues that it is entitled to attorney's fees for

services performed subsequent-to the filing of suit pursuant to

42 U.S.C. § 9607(a)(4)(B), or, in the alternative, pursuant to

Fed.R.Civ.P. 11 and 37 (c). This Court has previously deter-

mined that attorneys’ fees are recoverable by the United States

A-49

government in a cost recovery action. United States v. North-

eastern Pharmaceutical and Chemical Co., Inc., 579 F.Supp.

§23, 851-52 (W.D. Mo. 1984), aff'd in part, 810 F.2d 726 (8th

Cir. 1986), cert. denied, 484 U.S. 848 (1987). Defendant re-

sponds that attorneys fees are not recoverable pursuant to 42

U.S.C. § 9607(a)(4)(B) in a private cost recovery action under

CERCLA. The Court has previously determined that attorneys’

fees are properly recoverable by plaintiff as response costs.

General Electric Co., 715 F.Supp. at 958-59.

_ Plaintiff seeks to recover $269,475.57 in attorneys’ fees for

services performed subsequent to the filing of suit. In determin-

ing the proper amount of reasonable attorneys’ fees the Court

must consider the twelve factors enumerated in Johnson v.

Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir.

1974), that have been adopted and expressly followed by the

Eighth Circuit. E.g., Hardman v. Board of Education of

Dollarway, Arkansas School District, 714 F.2d 823, 825 (8th

Cir. 1983). The Court must determine if the number of hours

claimed and the hourly rate charged are reasonable. Plaintiff

requests attorneys’ fees for 2,663.03 hours expended by part-

ners, associates, of counsel attorneys, legal assistants, law clerks,

and librarians. See Plaintiffs Verified Application for Attorneys’

Fees, Expenses, and Prejudgment Interest (“Plaintiffs Applica-

tion”) at Exhibits C, D. The Court finds that the hours listed by

plaintiff are reasonable for a complex CERCLA case where the

Court has previously acknowledged that “extensive discovery

occurred, that defendants did not stipulate until the time of trial

as to the successorship of the Litton corporations, and just weeks

before trial, defendants informed the Court of their intentions to

raise several issues which ultimately were not allowed at trial.”

General Electric Co., Order of August 7, 1989, at 3; see

Plaintiff s Application at Exhibits F, G, H. Therefore, the Court

will approve the 2,663.03 hours listed by plaintiff as reasonable.

The hourly rates claimed by plaintiff vary from $25 per hour for

an assistant librarian to $195 per hour for a partner. Id. at

Exhibit E. The Court finds that the hourly rates charged for

partners George P. Coughlin, John J. Yates and Paul Scott

Kelly, Jr., for 1989 are excessive. Mr. Coughlin was billed at

A-50

$143 per-hour, Mr. Yates at $150 per hour and Mr. Kelly at $195

per hour. Id. The Court will approve an hourly rate of $135 for

these three partners. The Court finds that the hourly rates

charged for the remaining persons for this complex CERCLA

case are reasonable for the Springfield, Missouri, area. See id. at

Exhibits D, E. Therefore, the Court will approve the hourly

rates as modified above as reasonable. As a result, the Court will

award plaintiff attorneys’ fees in the amount of $269,406.52 for

services performed subsequent to the filing of suit.

Pre-Filing Attorneys’ Fees

Plaintiff seeks $42,536.80 in attorneys fees for services

performed prior to the filing of this suit on June 19, 1987, in

connection with the administrative proceedings before the

Missouri Department of Natural Resources and legal advice to

guide the site cleanup. The Court has previously acknowledged

that plaintiff incurred such attorneys’ fees. General Electric Co.,

715 F.Supp. at 955. Once liability has been established under

CERCLA, a covered person “shall be liable for . . . any other

necessary costs of response incurred by any other person

consistent with the national contingency plan.” 42 U.S.C.

§ 9607(a)(4)(B). “Response” is defined as “removal, remedy, and

remedial action, all such terms (including the terms ‘removal’

and ‘remedial action’) include enforcement activities related

thereto.” Id. § 9601(25) (emphasis added). Thus, the “costs of

response’ recoverable under 42 U.S.C. § 9607(a)(4)(B) include

enforcement activities related to removal or remedial action,

which would allow recovery of pre-filing attorneys’ fees as

enforcement activities related to removal or remedial action. See

BCW Associates, Ltd. v. Occidental Chemical Corp., No.

86-5947, slip op. at 55 n.4 (E.D. Pa. Sept. 24, 1988)

(WESTLAW, DCT database); Bulk Distrinution Centers, Inc. v.

Monsanto Co., 589 F.Supp. 1437, 1452 (S.D. Fla. 1984).

Because of the complexity of site evaluation and cleanup under

CERCLA, substantial attorneys’ fees may be incurred prior to

the actual filing of a CERCLA cost recovery action. “Congress

A-51

has determined that the persons who bore the fruits of hazard-

ous waste disposal also bear the costs of cleaning it up.”

Northeastern Pharmaceutical, 579 F.Supp. at 848. Such costs

include attorneys’ fees prior to the filing of a lawsuit. Because

the Court is “obligated to construe [CERCLA’s] provisions

liberally to avoid frustration of the beneficial legislative pur-

poses,” Dedham Water Co. v. Cumberland Farms Dairy, Inc.,

805 F.2d 1074, 1081 (1st Cir. 1986) (citations omitted), the Court

finds that plaintiff is entitled to recover pre-filing attorneys’ fees.

Plaintiff seeks to recover $42,536.80 in attorneys’ fees for

services performed prior to the filing of suit. Plaintiff requests

attorneys fees for 415.26 hours expended by partners, associ-

ates, of counsel attorneys and librarians. Plaintiff's Application at

Exhibits K, L. The Court finds that the hours listed by plaintiff

are reasonable for complex pre-litigation CERCLA activities.

See id. at Exhibits 0, P. Therefore, the Court will approve the

415.26 hours listed by plaintiff as reasonable. The hourly rates

claimed by plaintiff vary from $25 for an assistant librarian to

$165 per hour for a partner. Id. at Exhibit M. The Court finds

that the hourly rate of $165 charged for Mr. Kelly is excessive.

The Court will once again approve an hourly rate of $135 for Mr.

Kelly. Mr. Kelly billed .5 hours at $165 per hour for a total bill

of $82.50. Id. at Exhibits L, M. At a rate of $135 per hour the bill

would be $67.50, resulting in a $15 reduction of plaintiffs

attorneys’ fee claim. The Court finds that the hourly rates

charged for the remaining persons for the complex pre-litigation

CERCLA activities are reasonable for the Springfield, M-ssouri,

area. See id. at Exhibit M. Therefore, the Court will approve the

hourly rates as modified above as reasonable. As a result, the

Court will award plaintiff attorneys’ fees in the amount of

$42,521.80 for services rendered prior to the filing of suit.

Post-Filing Expenses

Plaintiff seeks $75,974.09 in expenses incurred subsequent

to the filing of suit. Id. at Exhibit S$. The request includes

A-52

expenses for air courier, computer research, depositions, fac-

simile transmissions, long distance telephone calls, photo-

graphs, exhibit preparation, photocopies, postage, travel, wit-

ness fees and other miscellaneous expenses. Id. The Court finds

such expenses are reasonable for a complex CERCLA case. As

the Court has previously determined that plaintiff is entitled to

recover post-filing attorneys’ fees, the Court will allow plaintiff

to recover expenses in the amount of $75,974.09 for expenses

incurred subsequent to the filing of suit.

Pre-Filing Expenses

Plaintiff seeks $4,201.32 in expenses incurred prior to the

filing of suit. Id. at Exhibit T. The request includes expenses for

air courier, computer research, long distance telephone calls,

photocopies, postage, travel and other miscellaneous expenses.

Id. The Court finds such expenses are reasonable for complex

pre-litigation CERCLA activities. Once again, as the Court has

previously determined that plaintiff is entitled to recover pre-

filing attorneys’ fees, the Court will allow plaintiff to recover

expenses in the amount of $4,201.32 for expenses incurred prior

to the filing of suit.

Prejudgment Interest

Previously, this Court awarded plaintiff prejudgment inter-

est on response costs. General Electric Co., 715 F.Supp. at 963.

As the Court has defined “response costs” to include attorneys’

fees and expenses previously in this order, the Court will award

plaintiff prejudgment interest on attorneys fees and expenses.

The Court has awarded plaintiff attorneys’ fees totaling

$311,928.32 and expenses totaling $80,175.41. Under CERCLA

prejudgment interest accrues “from the later of (i) the date

payment of a specified amount is demanded in writing, or (ii) the

date of the expenditure concerned.” 42 U.S.C. § 9607(a). As a

result, the Court disagrees with plaintiffs prejudgment interest

calculations regarding pre-filing attorneys’ fees and expense

payments by plaintiff. See Plaintiffs Application at Exhibits U,

A-53

V. Plaintiff calculates prejudgment interest from the date pay-

ment was made by plaintiff. Plaintiff made written demand for

previously incurred response costs, which includes attorneys’

fees and expenses, when this action was filed on June 19, 1987.

Therefore, this date is later than “the date of the expenditure

concerned” regarding pre-filing payments of attorneys’ fees and

expenses by plaintiff and, pursuant to 42 U.S.C. § 9607(a), is the

controlling date for calculation of prejudgment interest on these

amounts. Plaintiff's prejudgment interest calculations regarding

post-filing attorneys’ fees and expense payments are correct, as

the later date is “the date of the expenditure concerned.”

Accordingly, plaintiff will be awarded $27,361.22 in prejudg-

ment interest on attorneys’ fees and expenses for a total attor-

neys fees and expenses award of $419,464.95.

Other Response Costs

This Court previously determined that judgment would be

entered in favor of plaintiff against defendant upon a determi-

nation of the amount of attorneys’ fees and costs which plaintiff

is entitled to recover. General Electric Co., 715 F.Supp. at 964.

Plaintiff incurred $940,843.23 in response costs, excluding at-

torneys’ fees and expenses. Judgment will now be entered

accordingly. Id. at 963. In addition, plaintiff will be awarded

prejudgment interest in the amount of $161,945.65 for a total

award of $ 1,102,788.88 excluding attorneys’ fees and expenses.

Accordingly, it is hereby

ORDERED that plaintiffs verified application for attor-

neys fees, expenses and prejudgment interest is granted as set

forth in this order; and it is further

ORDERED that plaintiff is awarded $419,464.95 in attor-

neys fees, and expenses, including prejudgment interest; and it

is further

A-54

ORDERED that judgment be entered in favor of plaintiff

for response costs i

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.