Opposition Brief — Litton Industrial Automation Systems, Inc. v. General Electric Co.

No. 90-1221

IN THE -

Supreme Court of the United States

OCTOBER TERM, 1990

LITTON INDUSTRIAL AUTOMATION SYSTEMS, INC.

and LITTON INDUSTRIES, INC.,

Petitioners,

V.

GENERAL ELECTRIC COMPANY,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Eighth Circuit

RESPONDENT’S BRIEF IN OPPOSITION

CARTER G. PHILLIPS JAMES L. MOELLER *

SIDLEY & AUSTIN WILLIAM F. ForpD

1722 Eye Street, N.W. LINDA GILL TAYLOR

Washington, D.C. 20006 GAGE & TUCKER

(202) 429-4000 2345 Grand Avenue

RICHARD M. RITTENBERG Post Office Box 4] 8200

General Electric Company Kansas City, MO 64141

1635 Broadway (816) 474-6460

Ft. Wayne, IN 46801

Counsel for Respondent

March 4, 1991 * Counsel of Record

eatin

WILSON - Eres PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

BEST AVAILABLE COPY

QUESTIONS PRESENTED

1. Whether the courts below erred in finding that

GE’s excavation and disposal of hazardous substances

at a particular site constituted a “removal” action within

the meaning of the now-superseded 1985 National Con-

tingency Plan.

2. Whether Section 107 of the Comprehensive Environ-

mental Response, Compensation, and Liability Act of

1980, as amended (“CERCLA”), which expressly author-

izes recovery of the costs of “enforcement activities” as

an element of the total “response costs” incurred in re-

moving hazardous substances, permits GE to recover at-

torneys fees reasonably incurred in obtaining reimburse-

ment.

(i)

ii

RULE 29.1 STATEMENT

The respondent in these proceedings is the General

Electric Company, which has no parent corporation and

no subsidiaries that are not wholly owned.

TABLE OF CONTENTS

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STATEMENT

DISCUSSION

CONCLUSION

(iii)

12

iv

TABLE OF AUTHORITIES

CASES Page

Exxon Corp. V. Hunt, 475 U.S. 355 (1986) ........... 6

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

Co., 840 F.2d 691 (9th Cir. 1988) .....000000 11

Pease & Curren Ref., Inc. V. Spectrolab, Inc., 744

F. Supp. 945 (C.D. Cal. 1990)

Shapiro v. Alexanderson, 741 F. Supp. 472, reh’g

denied, 743 F. Supp. 268 (S.D.N.Y. 1990) -........ 10

Wickland Oil Terminals v. Asarco, Inc., 792 F.2d

ne a siiaestcanienbiasids achioane 8,11

STATUTES AND REGULATIONS

Superfund Amendments and Reauthorization Act

of 1986, Pub. L. No. 99-499, 100 Stat. 1613

(1986) (“SARA”) (codified as amended at 42

RS SEER passim

42 U.S.C. § 9601(25) (1982)

48 U.S.C. §$ 9601 (35) (1968) ..................................... 9,10

a ciainsatnineanneninabinns

42 U.S.C. § 9067 (a) (4) (B)

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re I ia csesiccttnncenecee

a cients...

40 C.F.R. § 300.64 (1988)

on esuscmnntamensmane

40 C.F.R. § 300.65 (b) (1) (1988)

40 C.F.R. § 300.65 (c) (6) (1988)

40 C.F.R. § 300.65 (c) (7) (1988)

Pe of E ) __, em NE

40 C.F.R. §§ 300.65-.67 (1985) .......:.......0000000000.. 0.2...

650 Fed. Reg. 47,980 (1985) ........................000...........

LEGISLATIVE MATERIALS

H.R. Conf. Rep. 962, 99th Cong., 2d Sess. 4, re-

printed in 1986 U.S. Code Cong. & Admin. News

BRR O RSIS “TEN re re 10

DHANINANAHWMWMHAAWHW

I er erry Hse

IN THE

Siypreme Court of the United States

OCTOBER TERM, 1990

No. 90-1221

LITTON INDUSTRIAL AUTOMATION SYSTEMS, INC.

and LITTON INDUSTRIES, INC.,

Petitioners,

V.

GENERAL ELECTRIC COMPANY,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Eighth Circuit

RESPONDENT’S BRIEF IN OPPOSITION

General Electric Company (“GE”) hereby opposes the

petition for a writ of certiorari filed in this case.

STATEMENT

1. This case involves GE’s cleanup of hazardous wastes

that were dumped in a field in Springfield, Missouri, dur-

ing 1959-1962 by a company that was purchased and

operated by petitioners. Specifically, petitioners are solely

responsible for concentrations of “copper, chrome, zinc,

lead and cyanide” that were placed at the site as wastes

2

from a typewriter factory they operated. Pet. App. A20.

Although petitioners repeatedly (Pet. 3, 14) dismiss as

trivial the environmental risks for which they are respon-

sible, it is undisputec that the wastes were located a few

hundred feet from residential neighborhoods to the north,

apartment complexes to the west and a major street to

the south. Pet. App. A138. Moreover, both the Missouri

Department of Health and the courts below found that

the site posed a substantial health risk to children and

others in those areas. Pet. App. A3, A19, A21, A30.

In March 1979, GE purchased the site from petition-

ers. Petitioners did not disclose their dumping to GE

and GE did not become aware of it until the summer

of 1980. Initially, both GE and the state’s environ-

mental agency, the Missouri Department of Natural Re-

sources (“MDNR”), concluded that there was no signifi-

cant health risk that required cleanup work at the site.

Pet. App. A2. However, in 1985, after GE arranged

to sell the site to a third party, the MDNR conducted a

new investigation and concluded that a significant health

threat did exist. As the Environmental Protection

Agency explained, “what was considered to be trace

amounts in 1981 are now acknowledged as representing

a threat to human health and the environment.” Pet.

App. A19-A20.

In response, GE employed an environmental engineer-

ing firm to study the site and to make recommendations

concerning the proper response. GE then “engaged in a

proper assessment of the potential hazard and evaluation

of the aiternative modes of remediation,” and “selected

the remedy that was the most cost effective in the long

run.” Pet. App. A40-A41.

During this period both GE and the purchaser of the

property notified petitioners of the problem at the site

and strongly encouraged petitioners to participate in

both the planning and implementation of the site cleanup.

In response, petitioners refused to “participate[] in any

3

of the investigation, evaluation, or cleanup of the site.”

Pet. App. A3-A4. Accordingly, GE entered into a consent

decree with the site purchaser and the MDNR to develop

and implement a cleanup plan that would be consistent

with the National Contingency Plan (“NCP”) of 1985,

which implemented CERCLA until recently. 40 C.F.R.

§ 300 et seg. (1986). Under the decree, the planning

and performance of GE’s cleanup was fully monitored

and approved by the MDNR.’

GE then proceeded to clean up the site pursuant to the

decree, beginning in October 1986. Almost immediately

after excavation began, GE found several drums buried

just below the surface, one of which contained ‘‘extremely

hazardous substances.” Pet. App. A3. Cleanup was dis-

continued in December 1986, to permit additional site

analysis after the drums were discovered, and excavation

was not resumed until May 1987. The removal process

was completed in December 1987. Pet. App. A3. When

GE’s cleanup was complete, MDNR determined that GE

had complied fuily with the decree and the work plan

MDNR had approved, and the MDNR declared the site

safe for future development and use. Pet. App. A23.

2. GE filed the instant lawsuit pursuant to Section 107

of CERCLA, 42 U.S.C. § 9607, seeking to recover from

petitioners the cost of cleaning up the hazardous wastes

for which petitioners were solely responsible. Petitioners’

primary argument was that GE’s action had constituted a

“remedial action” and not a “removal” action, and that

GE had not complied strictly with all of the NCP require-

ments for a remedial action. In particular, petitioners

'The MDNR held three public meetings of the Missouri Haz-

ardous Waste Management Commission concerning the site during

the course of its assessment. The third meeting was held after

the excavation option had been tentatively selected but before it

had been formally approved and before the consent decree was

entered. In fact, public input caused a change in the method

selected for disposing of the removed wastes. Pet. App. A24,

4

argued that greater public participation should have been

required. Accordingly, they argued that GE was not en-

titled to recover its costs under Section 107.

After a four-day bench trial, the district court heid

that all of the costs were properly recoverable under Sec-

tion 107. The court found that the cleanup did constitute

a “removal” within the meaning of the statute, but also

held that whether GE’s action was labeled as removal or

remedial was irrelevant because, under either approach,

GE’s actions were consistent with the 1985 NCP. The

court also found that every cost incurred by GE was

necessary to comply with MDNR requirements. Pet. App.

A22. Finally, the district court awarded GE its attorneys

fees in prosecuting the action as recoverable “enforce-

ment” costs permitted under Section 107. Pet. App. A16-

A43.

The court of appeals affirmed unanimously. Pet. App.

Al-Al4. The court of appeals based its decision on the

district court’s findings that the cleanup was a removal

and that GE had complied completely with the NCP re-

quirements for removal of wastes. Pet. App. A7, A9.

In analyzing the issue this way, the court of appeals fol-

lowed the course proposed by the United States as amicus

curiae. The government expressed some concern about

what type of public participation would be sufficient when

a cleanup is pursued as a remedial action, but argued

that the court of appeals did not have to address the issue

because GE’s action properly was found to have been a

removal action in conformity with the 1985 NCP. App.,

infra at 17a. Accordingly, the United States urged the

court of appeals to affirm.

2 Petitioners have seriously distorted the thrust of the United

States’ brief before the court of appeals. But, instead of engaying

in a lengthy rebuttal, which would merely beg the question of

which party was accurately describing the brief, GE has reproduced

the United States’ brief in full as an appendix to this Opposition.

Suffice it to say, however, that “the importance for this Court of

ET ES EEE

5

The court of appeals also held that GE was entitled to

attorneys fees. It reasoned that “it would strain the

statutory language to the breaking point to read [attor-

neys fees] out of the ‘necessary costs’ that [CERCLA]

allows private parties to recover.” Pet. App. A13.

DISCUSSION

1. Petitioners argue initially that the courts below

erred in finding that GE’s excavation constituted a “re-

moval” within the meaning of the statute. But this argu-

ment is inherently factbound. Moreover, the holding on

this issue is correct, conflicts with no decision of any

other court and accordingly does not warrant further

review. Even if the issue otherwise seemed worthy of

review, this would be the wrong case in which to decide it.

First, the specific question posed here has extremely lim-

ited prospective significance because it depends upon GF’s

compliance with the 1985 NCP, which has been superseded

by a 1990 plan. Additionally, petitioners are hardly the

proper party to press the public interest claims they assert

in this Court.

a. It is difficult to imagine an issue less worthy of

review by this Court than the narrow question of whether

GE’s excavation of a site in Springfield, Missouri consti-

tuted a “removal” within the meaning of CERCLA.

Nevertheless, in trying to convert this into an issue of

broader significance, petitioners argue that there are two

absolute pre-conditions to a removal which were ignored

by the court of appeals. First, they assert that removal is

only appropriate in response to an “imminent threat” of

harm. Second, they argue that there is an absolute one-

the decision below” is not enhanced simply because the government

appeared solely for the purpose of persuading that court to do

precisely what it did. To the contrary, the court’s willingness to

adopt the government’s analysis merely “highlights” (Pet. 9) the

eorrectness of that holding.

6

year time limit for accomplishing a removal. Neither

assertion has merit.

First, contrary to petitioners’ claim, neither CERCLA

nor the 1985 NCP contains any requirement of “immi-

nent” risk. The NCP expressly authorizes a removal ac-

tion whenever any health threat exists. 40 C.F.R. § 300.65

(b)(1) (1988) (Pet. App. A66) (removal action authorized

where “a threat to public health or welfare” exists).

Indeed, at the time EPA adopted the 1985 NCP, the EPA

specifically rejected an effort to require an “imminent

threat” as a condition of initiating a removal action. See

50 Fed. Reg. 47,930 (1985) (explaining why “imminent

danger” comments were not adopted). In the 1985 NCP,

the EPA abandoned the standards and procedures for

“immediate” and “planned” removal actions that existed

under the 1982 NCP, 40 C.F.R. §§ 300.65-.67 (1985),

in favor of a single unified and more flexible “removal”

action triggered by the “threat to public health” standard

in the 1985 NCP.

Under the proper “threat to public health” standard,

it is clear that the decision approving this removal was

correct. The court of appeals, the district court, the EPA,

and the Missouri administrative agencies all have care-

fully reviewed the evidence and have unanimously con-

cluded that the wastes petitioners dumped on this site

constituted a hazard sufficient to warrant GE’s removal

action.

Second, petitioners cite nothing for the unbending rule

that an excavation that is forced to continue beyond a set

period of time is necessarily converted into a remedial

action. The NCP explicitly exempts private party removal

actions, such as GE’s here, from such limitations. 40

C.F.R. § 300.65(i) (1988) (Pet. App. A68-A69). Nor is

there any case or regulatory support for such a rule.

Instead, the cases cited by petitioners (Pet. 13-14) merely

indicate that, in general, removals are of a shorter dura-

tion than remedial actions. See, ¢.g., Exxon Corp. v. Hunt,

7

475 U.S. 355 (1986) (general description of regulatory

scheme in case involving unrelated issue of preemption).

Nothing in the decision below conflicts with those state-

ments.

This case well illustrates, however, why an unbending

rule, such as the one petitioners propose, makes no sense.

The removal here would clearly have been completed in a

much shorter period of time if GE had not discovered

drums and additional hazardous wastes once the excava-

tion began. For that reason, and with MDNR approval,

GE halted the removal process to assess more fully the

environmental risks. After that assessment, GE proceeded

to complete the removal. The entire process lasted longer

than a year, but the actual excavation and removal por-

tions of the cleanup took a considerably shorter time and

one that the courts below correctly found was fully con-

sistent with a removal action. See page 3, supra.

Finally, petitioners’ effort categorically to exclude GE’s

cleanup from the definition of removal is completely

undermined by the regulation defining that term. The

1985 NCP removal provision expressly declares removal

of contaminated drums and highly contaminated soils,

which are at issue here, to be “as a general rule, appro-

priate” for a removal action. 40 C.F.R. § 300.65(c) (6)

& (7) (1988) (Pet. App. A67) (emphasis supplied). In

sum, there is nothing in the decision on removal in this

case that transcends the Springfield, Missouri site.

b. Even if the removal issue were arguably incorrectly

decided and somehow presented a legal issue, it is clear

that the holding concerning compliance with the 1985 NCP

has limited prospective significance. In response to the

1986 SARA amendments,’ the EPA has promulgated a

new 1990 NCP that substantially alters the provisions of

% Superfund Amendments and Reauthorization Act of 1986, Pub.

L. No. 99-499, 100 Stat. 1613 (1986) (“SARA”) (codified as

amended at 42 U.S.C. § 9601 et seq.).

8

the 1985 NCP in the very areas on which petitioners now

focus—removal and remedial actions.‘ Because the NCP

in effect at the time response costs are incurred will gov-

ern the recoverability of those costs, Wickland Oil Ter-

minals v. Asarco, Inc., 792 F.2d 887, 891 (9th Cir. 1986),

any interpretation by this Court of the now superseded

NCP would be of limited applicability for future cases.

ce. Finally, petitioners’ arguments extolling the virtues

of public participation in the cleanup of hazardous wastes

are disingenuous. Petitioners basically argue that GE

made the site too clean, and that greater public involve-

ment was important to increase the likelihood that a less

effective method of cleanup might have been adopted. It

is nonsense for petitioners to suggest that the public might

have urged a /ess protective or effective remedy than that

approved by the state agencies responsible for protecting

the public health and welfare.®

Nor was greater opportunity for public participation

necessary to ensure that petitioners themselves were in-

formed about GE’s cleanup efforts. As the district court

4 As a result of the EPA’s revisions to the NCP, the 1990 NCP

imposes new substantive requirements for both removals and re-

medial actions, in the types of assessments preceding each, in the

standards applied to each, and in the public participation associated

with each. Compare, e.g., 40 C.F.R. §§ 300.64 and 300.65 (1988)

(Pet. App. A65) with 40 C.F.R. §§ 300.410 and 300.415 (1990) (Pet.

App. A88-A96).

5 Petitioners’ repeated assertions that GE somehow acted im-

properly in its sale of the site to a third party and that GE engaged

in gold plating in its removal actions are completely contradicted by

the findings of the lower courts. With respect to the sale, the dis-

trict court pointedly found that petitioners have “not been injured

nor prejudiced by any actions of GE regarding the subsequent sale

of the property.” Pet. App. A27. Moreover, all of the costs were

found to have been necessary to effect compliance with the 1985

NCP as enforced by the state agency. Pet. App. All, A40-A41.

Petitioners simply have no factually supported basis for complaining

about the ultimate costs of a removal in which they refused to

participate.

9

pointedly observed, petitioners already “had every oppor-

tunity to participate in the clean-up but failed to do so.”

Pet. App. A41. Under these circumstances, petitioners’

claim that interests in public participation were somehow

impaired by the removal in this case is completely hollow.

2. Petitioners argue that the courts below erred in

holding that attorneys fees are recoverable under Section

107 by a party such as GE—which has incurred all of the

costs of removal of hazardous wastes and which seeks

nothing more than reimbursement—from the party who

is responsible for the wastes and who has refused to par-

ticipate in any way in the cleanup. The holding of the

Eighth Circuit, however, is based squarely on the text

of the statute and unquestionably promotes the essential

purposes of CERCLA. Moreover, petitioners acknowledge

that the decision of the court of appeals is the first appel-

late decision on this question. Thus, even if the holding

were less clearly correct, the issue still would not warrant

review now.

There is a clear textual authorization for the fee re-

covery in the statute. Under Section 107 of CERCLA,

liable parties such as petitioners are liable for any nec-

essary “costs of response.” 42 U.S.C. § 9607(a) (4) (B).

Under Section 101 of CERCLA, the term “response”

means “remove, removal, remedy, and remedial action,

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

dial action’) include enforcement activities related

thereto.” 42 U.S.C. § 9601(25) (1988) (emphasis added).

As both courts below concluded, “enforcement activities”

was a reference to activities to enforce CERCLA’s cost

recovery provisions, including attorneys fees and ex-

penses.® As another court has held,

® The “enforcement activities” language was added to CERCLA

by the SARA amendments. Prior to 1986, the term “response” was

defined as meaning “remove, removal, remedy, and remedia! action.”

42 U.S.C. 9601(25) (1982). The 1986 SARA amendments added on

the end of that definition that “[a]ll such terms (including the

10

Congress intended for “enforcement activities” to in-

clude attorneys fees expended to induce a responsible

party to comply with the remedial actions mandated

by CERCLA. This court cannot ascertain any other

logical interpretation which would give effect to this

phrase. If this court were to rule otherwise, the

phrase ‘enforcement activities’ would be superflu-

ous.

Pease & Curren Ref., Inc. v. Spectrolab, Inc., 744 IF.

Supp. 945, 949-52 (C.D. Cal. 1990). Accord Shapiro v.

Alexanderson, 741 F. Supp. 472, 480, reh’g denied, 743

F. Supp. 268 (S.D.N.Y. 1990).

Even petitioners seem to concede that Congress in-

serted the term “enforcement activities” to make certain

that the recovery of attorneys fees, which had been upheld

in a few government cost recovery cases, would continue.

Pet. 17. However, citing irrelevant legislative history,’

petitioners incorrectly argue that Congress only intended

for the government to recover attorneys fees, and not for

private parties to do so.

This argument is refuted by the statute itself. The

SARA amendments placed the “enforcement” language

in a general definitional section which applies to all par-

ties—both governmental and private—acting under Sec-

tion 107 of CERCLA. Had Congress intended to limit the

recovery of attorneys fees io the government, Congress

terms ‘removal’ and ‘remedial action’) include enforcement activities

related thereto.” 42 U.S.C. § 9601(25) (1988) (emphasis added).

‘

7 Petitioners argue that Congress intended the “enforcement”

language to cover attorneys fees, but only the EPA’s attorneys fees.

Petitioners’ sole support for this argument is a House Report, H.R.

Rep. No. 253, which stated that the SARA amendment related to

EPA’s cost recovery. Pet. 17. However, this Report was attached

to a bill that did not become law, H.R. 2817, see 1986 U.S. Code

Cong. & Admin. News 2835, and the conference report to the bill

which did become law has no such EPA-restricted language. H.R.

Conf. Rep. 962, 99th Cong., 2d Sess. 4, reprinted in 1986 U.S. Code

Cong. & Admin. News 3276.

11 ‘

would not have placed the amendment in a provision of

general applicability. Congress could have placed the

amendment in a CERCLA section applicable only to the

government," or it could have expressly qualified the

right. There is, however, nothing inherent in the phrase

“enforcement activities’ to suggest it should be limited

to governmental, as opposed to private, enforcement ac-

tivities: courts have repeatedly characterized private

party CERCLA cost-recovery actions as “private enforce-

ment.” Wickland Oil Terminals, 792 F.2d at 892 (“pri-

vate enforcement actions under section 107(a)”’) ; Cadillac

Fairview/California, Inc. v. Dow Chem. Co., 840 F.2d

691, 694 (9th Cir. 1988) (“private enforcement

actions”).

GE invoked Section 107 in precisely the same way

the United States does when it seeks to collect CERCLA

response costs. Given that private parties have the right

to bring cost-recovery actions under CERCLA, that both

the government and private parties look to the same

provision for recovery of response costs, and that the defi-

nition of “response” is the same for all parties pursuing

an action under Section 107, petitio: srs cannot reason-

ably contend that there is no authority for recovery of

attorneys fees. Accordingly, because the attorneys fee

award in this case is fully supported by the statutory

language and by the articulated Congressional purposes

of encouraging voluntary cleanups and settlements, the

petition should be denied.

Finally, even if the statutory authorization for fee re-

covery was not as clear as it is, there are relatively few

8 Section 104, cited by petitioners, authorizes the Government

to perform environmental responses, to incur expenses in connection

therewith, and to pursue cost recovery actions for reimbursement.

When the Government files such actions, however, it does so under

Section 107, the section which defines cost recovery actions and cre-

ates the liability for “any other necessary costs of response.” The

relief obtainable flows from Section 107, as defined in Section

101(25), and is the same relief available to private parties when

they act under this provision.

12

cases interpreting this statute and no case other than

this one has reached a court of appeals. Until such time

as an appellate court rejects the persuasive reasoning of

the Eighth Circuit, it is clearly premature for this Court

to consider the issue.

* * * *

At the end of the day, this is a case that should never

have required litigation. Petitioners were responsible for

all of the hazardous wastes; they had complete knowledge

of both their responsibility and GE’s proposed course of

action. GE performed the response action effectively and

included no unnecessary costs. Petitioners simply ignored

the problem. What they should have done was to reach

some agreement with GE (either before or after removal)

with respect to these costs. Instead, petitioners have

fought, now all the way to this Court, to avoid their

responsibility. The fight should end now; the petition

should be denied.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted,

CARTER G. PHILLIPS JAMES L. MOELLEF *

SIDLEY & AUSTIN WILLIAM F. ForpD

1722 Eye Street, N.W. LINDA GILL TAYLOR

Washington, D.C. 20006 GAGE & TUCKER

(202) 429-4000 2345 Grand Avenue

RICHARD M. RITTENBERG Post Office Box 418200

General Electric Company Kansas City, MO 64141

1635 Broadway (816) 474-6460

Ft. Wayne, IN 46801

Counsel for Respondent

March 4, 1991 * Counsel of Record

APPENDIX

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la

APPENDIX

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

No. 89-2845 WM

GENERAL ELECTRIC COMPANY,

Plaintiff-Appellee,

v.

LITTON BUSINESS SYSTEMS, INC.,

Defendant-A ppellant

On Appeal From the United States District Court

for the Western District of Missouri

BRIEF FOR THE UNITED STATES, AMICUS CURIAE

RICHARD B. STEWART

Assistant Attorney General

DAVID C. SHILTON

MAUREEN M. KATz

Of Counsel: JACQUES B. GELIN

ANDREW GORDON Attorneys,

LAWRENCE E. STARFIELD Department of Justice

Office of General Counsel Land and Natural

HELEN KENNEDY Resources Division

Office of Enforcement and Washington, D.C. 20530

Compliance Monitoring (202) 633-2762

Environmental Protection Agency

Washington, D.C. 20460

2a

SUMMARY AND REQUEST FOR ORAL ARGUMENT

In this case, General Electric Company (GE) filed a

private cost recovery action against Litton Business Sys-

tems under Section 107(a) of the Comprehensive Environ-

mental Response, Compensation, and Liability Act of 1980

(CERCLA), 42 U.S.C. 9607(a). GE sovght recovery of

nearly $1 million in costs incurred in removing hazardous

substances from a site GE bought from Litton in 1970.

After a trial, the district court (Clark, J.) found Litton

liable for all response costs incurred by GE. 715 F. Supp.

949. The court rejected Litton’s contention that GE had

not complied with the public comment requirement of the

National Contingency Plan, and determined that GE’s

“compliance with legally applicable or relevant appropri-

ate state requirements provides a substantially equivalent

opportunity for public involvement” (id. at 961), stating

that “if notice to the public is a requirement, the input

of the Missouri Department of Natural Resources serves

as a substitute for pubiic comment.” Jd, Based on GE’s

documented cooperation with the State, the court con-

cluded that GE’s actions were “ccasistent with the NCP.”

Id. at 961; see id. at 963. The court also rejected Litton’s

“unclean hands” defense, ruling that the equitable princi-

ple did not apply in this case because GE’s alleged mis-

conduct neither injured nor prejudiced Litton (id. at

955) ; it questioned whether that principle could ever ap-

ply in an action under CERCLA. Ibid.

Litton now appeals from that judgment. Since the

United States is appearing solely as amicus curiae, we

express no view with regard to oral argument.

3a

INDEX

Page

Summary and Request for Oral Argument ....................

ID IID Girnnsscencenseisdiinsniinishnanentntrentapenheetanioteasinnienisuti [6a]

Statement of Jurisdiction .................... geet telat aga eae [6a]

ea ananiniannaenenanie [6a]

Statutory and Regulatory Provisions Involved ............ [7a]

Interest of the United States and Summary of

I iii ener inalaieitadacldt denies iacianaeiligan tinea [Ta]

ls nddeiinaeenebaeells [10a]

1. Statutory and regulatory framework .................. {10a]

2. The facts of this controversy ................................ [14a]

Standard of Appellate Review .......................-.....-..-0:0--++ [16a]

ARGUMENT:

I. The 1985 National Contingency Plan does not

Specifically Require that Private Parties Pro-

vide for Oppurtunities for Public Comment in

Formulation and in Conducting a “Removal”

pI Reset CGO oe Ise Oe ae ee [17a]

II. Compliance with State, Regulatory Provisions

Pertaining to the Cleanup of a Hazardous Waste

Site Satisfies the “Public Participation” Require-

ments of the 1985 NCP for a “Remedial” Action

Only if the State Regulatory Opportunity for

Public Involvement in the Choice of the

aa en cudecgmaaneseedehabied [19a]

III. Wnclean Hands is not Available as a Defense

in CERCLA Private Party Actions _..................... [21a]

RRR LAr a ae cee Ree Soe Ee POR PE Pe Ere [22a]

447

4a

CITATIONS

Cases: Page

Amland Properties Corp. v. Aluminum Co. of

America, 711 F. Supp. 784 ...................... [13a, 14a, 20a]

Artesian Water Co. v. Gov. of New Castle County,

659 F. Supp. 1269, aff’d on other grounds, 851

an IG As IRICEN ORD OOF ae, SA Nx [12a]

Bulk Distrib. Centers, Inc. v. Monsanto Co., 589

rs I 5 ceccesthinsd.ntocanaesanssuiumcncnidnibieamcianensices [12a]

Dedham Water Co. v. Cumberland Farms Dairy,

I I a sic eacemeecaicen [9a, 10a, 12a]

Exxon v. Hunt, 475 U.S. 356 .......................- [8a, 10a, 12a]

Lone Pine Steering Committee v. EPA, F.2d 882,

UE I CI Fs I ikke cepcieeccerneprerccensicns [10a]

New York v. Shore Realty Corp., 648 F. Supp. 255.. [12a]

Smith Land & Improvement Corp. v. Celotex Corp.,

851 F.2d 86, cert. denied, 109 S. Ct. 837 _....... {[lla, 22a]

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

United States v. Northeastern Pharmaceutical &

Chem. Co., Inc., 810 F.2d 726, cert. denied, 484

RE IT Reoaeenee secs rele ere SN ISON RO [12a]

U.S. v. Aceto Agricultural Chemicals Corp., 872

OE a OPE SE a es ee eae Noe! [10a, 1la, 22a]

Versatile Metals, Inc. v. Union Corp., 693 F. Supp.

cen ea ccasacomnaeeineoiraanehn [14a]

Walls v. Waste Resources Corp., 761 F.2d 311......... [12a]

Statutes, Rules and Regulations:

The Hazardous Substance Superfund,

I as adasiaieslivcsinnn one [lla]

Se I I ida rcecrcectinitnees si elpapanbesies peas [6a]

I cata psterssocaceusobenncecs haclsiaeticlagetddiaabancei lad [6a]

Sn a a caitiies [6a]

Comprehensive Environmental Response, Compen-

sation, and Liability Act of 1980 (CERCLA),

94 Stat. 2796, 42 U.S.C. 9601 et seq., as amended

by the Superfund Amendments and Reauthori-

zation Act of 1986 (SARA), 100 Stat. 1613:

Section 101 (23), 42 U.S.C. 9601 (23) ............ (7a, 13a]

Section 101 (24), 42 U.S.C. 9601 (24) ............. [7a, 13a]

5a

Statutes, Rules and Regulations—Continued: Page

Section 104, 42 U.S.C. 9604 000. [lla]

Section 104(c) (1), 42 U.S.C. 9604 (c) (1) ........ [13a]

Section 105, 42 U.S.C. 9605 ...000 ee. ... [10a]

Section 106, 42 U.S.C. 9606.00. [lla]

Section 107 (a) (1), 42 U.S.C. 9607 (a) (1)........ [lla]

Section 107 (a) (2), 42 U.S.C. 9607 (a) (2) ........ [lla]

Section 107 (a) (3)-(4), 42 U.S.C. 9607 (a) (3)-

Ree dk LSA ee .... [lla]

Section 107 (a) (4) (A), 42 U.S.C. 9607 (a) (4)

| ERAS. Rr airy op eee eee eae [9a, lla, 12a]

Section 107 (a) (4) (B), 42 U.S.C. 9607 (a) (4)

OM ERE. ER oe ee [ passim |

Section 107 (b), 42 U.S.C. 9607(b) 20... [22a]

Section 107 (f), 42 U.S.C. 9607 (f) 000... . [12a]

Section 111 (a) (1), 42 U.S.C. 9611 (a) (1)......... [lla]

Section 111 (a) (2), 42 U.S.C. 9611(a) (2)... [11a]

Section 113 (a), 42 U.S.C. 9613 (a)... .. [12a]

Section 113(f) (1), 42 U.S.C. 9613(f) (1) ........ [lla]

mecteee ae, G2 UBC. GORI .........-2----0000000-00-0------- [lla]

cesses ccncnenrecasenssrorscevenexe [7a, 12a}

Poe 2 {Feats OSE IAS ARIE ts [passim }

es MD na ooo ccocecenescsscosvesaconucs [13a]

Rae te PERE ERO es [i3a]

I nn [13a]

asad cca easecensnnanecksvatourectoncs he [7a}

ok fe Se eee ee [14a, 17a, 18a]

ee I i. cccencnersannasenssbvocssasious [18a]

I a seshuwnnapabaneoecsibenas [7a]

ne ND CI OD cis iccvccrnninvceanvnweesendunsere [13a]

40 C.F.R. 300.71 (a) (2) (ii) (D) ..........................[14a, 19a]

ee in ccceue me [12a]

Miscellaneous:

“Developments in the Law Toxic Waste Litiga-

tion,” 99 Harv. L. Rev. 1458 (1986)... [9a}

6a

No. 89-2845 WM

UNITED STATES COURT OF APPEALS

: FOR THE EIGHTH CIRCUIT

GENERAL ELECTRIC COMPANY,

Plaintiff-Appellee

V.

LITTON BUSINESS SYSTEMS, INC.,

Defenaant-A ppellant

On Appeal From the United States District Court

for the Western District of Missouri

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE

OPINION BELOW

The opinion of District Judge Russell G. Clark appears

at Joint Appendix 5 and is reported at 715 F. Supp. 949.

STATEMENT OF JURISDICTION

The judgment was entered on June 20, 1989, and a

timely notice of appeal was filed by Litton Business Sys-

tems, Inc. on November 13, 1989, pursuant to 28 U.S.C.

2107 and Fed. R. Civ. P. 4(a) (1). The jurisdiction of

this Court rests on 28 U.S.C, 1291.

ISSUE PRESENTED

Whether compliance with state regulatory provisions

concerning removing hazardous substances from a par-

ticular site satisfies the prerequisites for recovering re-

sponse costs for actions under Section 107(a) (4) (B) of

7a

the Comprehensive Environmental Response, Compensa-

tion, and Liability Act of 1980 (CERCLA), as specified

in the “National Contingency Plan” (NCP) adopted by

the Environmental Protection Agency, 40 C.F.R. 300.1

et seq., including any applicable public participation re-

quirements.

STATUTORY AND REGULATORY

PROVISIONS INVOLVED

Due to their length, Sections 107(a), 101/23) and

(24) of CERCLA, 94 Stat. 2796, as amended, 42 U.S.C.

9607(a)}, 9601(23) and (24), and 40 C.F.R. 300.65,

300.71 and 300.67(d), are reproduced as an Addendum

to this brief.

INTEREST OF THE UNITED STATES AND

SUMMARY OF ARGUMENT

The United States agrees that the district court reached

the correct result on the public participation issue in this

case. Based upon the evidence available to it, the United

States believes that the record in this case indicates that

the General Electric Co. (GE) action may have been a

“removal” action (CERCLA Section 101(23)) to which

no public participation requirements attach, and that

even if the action were considered to be a “remedial”

action (CERCLA Section 101(24)), the record supports a

conclusion that GE substantially complied with the NCP’s

requirement for “public comment.” We also believe that

the court properly rejected defendant Litton’s unclean

hands argument. The chief reason of the United States

for participating in this appeal is to assist this Court in

developing a sound rationale for this result.

We are uneasy about the district court’s articulation

of the standards for a private party’s compliance with

the pertinent NCP public participation requirements for

remedial actions. The district court concluded, first, that

no public hearing was required because GE complied with

the legally applicable or relevant and appropriate state

8a

requirements (ARARs) that the substances be removed.

715 F. Supp. at 961. Second, the court proffers an alter-

native ground for NCP compliance by stating that the

state’s “input” on GE’s response action served as a sub-

stitute for public comment. Ibid. To the extent that the

district court’s opinion may be read as suggesting that

compliance with substantive state regulatory waste-

removal provisions alone satisfies the public participation

requirements for remedial actions, this conclusion is wrong

hecause it belittles the importance of the public participa-

tion contemplated by the NCP. Accordingly, the United

States wishes to emphasize that compliance with a state

regulatory provision may satisfy the federal NCP re-

quirement for public participation during selection of a

remedial action, but only if that provision in fact offers

“substantially equivalent” opportunities for public com-

ment.

It is established policy under CERCLA to enccurage

private parties to perform voluntary cleanups. See L'xxon

v. Hunt, 475 U.S. 355, 359 (1986). Cleanups which are

undertaken and financed by private parties serve to en-

hance the enforcement efforts of EPA and to preserve

the resources of the Superfund for use at sites without

identified or financially viable responsible parties. Accord-

ingly, it is important that technical obstacles not prevent

these parties from recovering their response costs from

those who are responsible for the contamination. The

application of a rigid, formalistic test to a party’s com-

pliance with the public comment requirement for remedial

actions would, in the view of the United States, serve as

a disincentive to voluntary cleanups.’ Nevertheless, this

policy must be balanced against the interest that the pub-

lic has in participating in the selection of a response

1 Additionally, The United States could be prejudiced if technical

inconsistencies with the NCP precluded recovery by the Environ-

mental Protection Agency (EPA) in its enforcement actions. 42

U.S.C. 9607 (a) (4) (A).

9a

action, and the interest of the public in assuring that an

environmentally sound cleanup occurs.

The United States believes that this Court, in resolv-

ing this matter, should not apply an overly restrictive

test for compliance with the public comment require-

ment for remedial actions. One of Congress’ principal

purposes in enacting CERCLA was to place the costs and

responsibility for remedying harmful conditions caused by

hazardous waste disposal on those responsible for the

problem. See, e.g., Dedham Water.Co. v. Cumberland

Farms Dairy, 805 F.2d 1074, 1081 (1st Cir. 1986).

Similarly, the United States does not want to discourage

private parties from cleaning up hazardous waste sites

by elcouraging excessive formalism; the Environmenta!

Protection Agency believes that private party cost re-

covery should be allowed where it proceeds in “substan-

tial” compliance with EPA’s regulations, including the

requirement that concerned parties be allowed to review

and evaluate proposed remedial-actions. The 1985 NCP

was designed to encourage more private sector cleanups

—cleanups that had been discouraged by courts’ restric-

tive readings of Section 107(a) (4) (B)’s requirement of

consistency with the NCP. See Note, “Developments in

the Law—Toxic Waste Litigation,” 99 Harv. L.Rev.

1458, 1503 (1986) (by including the public comment re-

quirement concerning the selection of a remedial action,

the NCP “prevents the streamlined response that should

be the primary advantage of private party cleanups.”).

For these reasons, the United States has determined to

participate as amicus in this case to assist this Court in

defining the rules for private party compliance with the

NCP public participation requirements.

In this brief, we will first clarify what distinguishes a

“removal” from a “remedial” action, and explain what

public participation standards are applicable to both

types of actions under the NCP. We will point out,

first, that there would be no applicable public partici-

10a

pation requirements if this clean up were viewed as a

removal rather than a remedial action (see supra at

9). Second, if the cleanup is considered a remedial ac-

tion, there must be opportunities for public participation

substantially equivalent to those called for in the NCP

(supra at 16). Finally, we will explain why “unclean

hands” is not an available defense to liability in CERCLA

cost recovery actions.

STATEMENT

1. Statutory and regulatory framework.—Congress

enacted CERCLA, 94 Stat. 2796, 42 U.S.C. 9601 et seq.,

as amended by the Superfund Amendments and Reau-

thorization Act of 1986 (SARA), 100 Stat. 1613, as a

legislative response to the growing problem of toxic

wastes, many of which were disposed of before their

dangers were widely known and had contaminated land

and water resources. The statute attempts to create a

coherent answer to two related problems: the emergency

abatement of releases of hazardous substances into the

environment and the response, both short- and long-term,

to the presence of hazardous substances in existing dis-

posal sites. See Lone Pine Steering Committee v. EPA,

777 F.2d 882, 886 (3d Cir. 1985), cert. denied, 476 U.S.

1115 (1986). Many of these sites had been abandoned

by any party who could be held accountable for the

cleanup. Whenever possible, however, CERCLA places

the ultimate financial burden of toxic waste cleanup on

those responsible for creating the harmful conditions.

See Exxon Corp. v. Hunt, 475 U.S. 355, 359 (1986);

U.S. v. Aceto Agricultural Chemicals Corp., 872 F.2d

1373, 1377 (8th Cir. 1989).

Section 105 of CERCLA authorizes the President to in-

_ corporate into the national contingency plan (NCP)

“procedures and standards for responding to releases of

hazardous substances.” 42 U.S.C. 9605. Section 221 es-

tablished the Hazardous Substance Response Trust Fund,

lla

popularly known as the “Superfund.” 42 U.S.C. 9631.

Superfund monies finance response measures by the En-

vironmental Protection Agency that are consistent with

the national contingency plan. CERCLA Sections 104

and 111(a) (1), 42 U.S.C. 9604 and 9611(a) (1). They

also finance private response costs that are approved

under the NCP and are federally certified. Section 111

(a) (2), 42 U.S.C. 9611(a) (2). In addition, under Sec-

tion 106 the federal government may seek injunctive re-

lief from the actual or threatened release of a hazardous

substance. 42 U.S.C. 9606. Section 107(a) (4) (A)

makes certain parties responsible for the presence of

hazardous substances liable to federal and state govern-

ments and Indian tribes for response costs. 42 U.S.C.

9607(a) (4) (A). For example, current owners and op-

erators of the property are liable under Section 107(a)

(1), while former owners and operators such as Litton

are liable under Section 107(a) (2). Other categories of

liable persons include “transporters” and “generators” of

hazardous substances. 42 U.S.C. 9607(a) (3)-(4). U.S.

v. Aceto Agricultural Chemicals Corp., 872 F.2d at 1377.

Similarly, Section 107(a) (4) (B), makes responsible par-

ties liable to private persons for response costs. 42

U.S.C. 9607(a) (4) (B). In those situations in which the

party seeking recovery is also statutorily liable the claim

may be one for contribution which is authorized under

Section 113(f) (1). 42 U.S.C. 9613(f) (1). See Smith

Land and Improvement Corp. v. Celotex Corp., 851 F.2d

86, 88-89 (3rd Cir. 1988), cert. denied, 109 S. Ct. 837

(1989).

CERCLA Section 107(a)(4)(B), the focal point of

this case, expressly creates a private cause of action

against Section 107(a)-responsible parties for the re-

covery of “necessary costs of response incurred by any

other person consistent with the national contingency

2 Repealed by SARA; the Hazardous Substance Superfund is

currently established under 26 U.S.C. 9507.

12a

plan [NCP}.” 42 U.S.C. 9607(a) (4)(B).2 (The NCP

is the set of regulations promulgated by the EPA that

govern response actions for hazardous substance releases

and provide appropriate guidelines for state and federal

agencies. See 40 C.F.R. 300.1 et seq.) *

The statute was designed primarily to facilitate the

prompt cleanup of hazardous substances sites. It accom-

»lishes this purpose by placing the ultimate financial

responsibility for cleanup on those responsible for the

hazardous wastes. Exxon v. Hunt, supra; Walls v. Waste

Resources Corp., 761 F.2d 311, 318 (6th Cir. 1985).

Allowing a private action to recover response costs from

3 An actien for natural resource damages may be brought only

by the United States, a state government, or an Indian tribe. 7d.

Section 107(f), 42 U.S.C. 9607(f). Response actions taken by the

United States, a state government, or an Indian tribe are presumed

to be “not inconsistent with the national contingency plan” under

Section 107(a) (4) (A); the defendant has the burden of proving

otherwise. United States v. Northeastern Pharmaceutical & Chem.

Co., Inc., 810 F.2d 726, 747 (8th Cir. 1986), cert. denied, 484 U.S.

848 (1987). Conversely, private plaintiffs have the burden of prov-

ing that their response actions are “consistent with the national

contingency plan” under Sectior 107(a)(4)(B). Artesian Water

Co. v. Gov. of New Castle County, 659 F. Supp. 1269, 1277 n.8

(D. Del. 1987) (citations omitted); aff’d on other grounds, 851

F.2d 643 (3d Cir. 1988); New York v. Shore Realty Corp., 648

F. Supp. 255, 268 (E.D. NY. 1986); Bulk Distrib. Centers, Inc. v.

Monsanto Co., 589 F. Supp. 1437, 1444 (S.D. Fla. 1984).

4 The NCP constitutes EPA’s national regulations adopted under

Section 105 of CERCLA appearing at 40 C.F.R. 300.1-300.81. The

regulations describe methods of responding to hazardous substance

releases and set forth guidelines for the appropriate roles of state

and federal agencies and private parties. Judicial review of these

regulations can be had only by filing a petition for review in the

District of Columbia Circuit under Section 113(a) of CERCLA,

42 U.S.C. 9613(a). The NCP cannot be challenged in district court

in the context of a cost recovery action. On February 2, 1990, the

EPA Administrator signed a final rule revising the NCP; that rule

will take effect 20 days after publication in the Federal Register.

Publication is expected by the end of February.

13a

responsible parties under Section 107(a)(4)(B) is thus

consistent with both the language of that Section and the

congressional purpose underlying CERCLA as a whole.

CERCLA delineates two types of response actions—

“removal” and “remedial” actions, see Section 101(23)

and (24), each of which must comply with certain re-

quirements under the NCP. Removal actions are gen-

erally short-term environmental responses. Remedial

actions, on the other hand, are generally long-term re-

sponses. Amland Properties Corp. v. Aluminum Co. of

America, 711 F. Supp. 784, 795 (D. N.J. 1989).5 For

removal actions, the NCP provides for relatively simple

procedural prerequisites. See 40 C.F.R. 300.65. Section

300.65 of the NCP sets forth no requirements for oppor-

tunities for public comment for private party removal

actions (except to the extent such opportunities are re-

quired by legaliy applicable or relevant and appropriate

state requirements (ARARs) and are practicable) .°

With respect to remedial actions, however, the NCP

provides for substantially more detailed procedural and

5 For example, the 1985 version of the NCP that applies here,

with a number of exceptions, sets a $1 million limit or a six-month

deadline for a Superfund-financed “removal action.” 40 C.F.R.

300.65(b) (3). On October 17, 1986, the Superfund Amendment

and Reauthorization Act extended the limits to 1 vear and $2 million

for a CERCLA removal action. 42 U.S.C. 9604(c) (1). The statute

also allows exceptions to these limits.

® The NCP does require that removal actions taken “pursuant

to section 300.65” include a formal community relations plan for

actions extending beyond 45 days and have a spokesperson to in-

form the community of actions taken and respond to inquiries. 40

C.F.R. 300.67. While this requirement appears to apply to state,

federal lead or tribal removals, private party actions are not taken

“pursuant to section 300.65” and thus are not specifically required

to meet these same requirements; rather, 40 C.F.R. 300.71 (a) (2) (i)

simply requires private party actions to be “consistent with” Sec-

tion 300.65. (To the extent the requirement in 40 C.F.R. 300.67(b)

is found to apply, the public meetings at which the site was dis-

cussed appear to satisfy the requirement.)

l4a

ubstantive requirements. See 40 C.F.R. 300.68. In par-

cieular, the NCP requires, among other things, that a

private party contemplating the undertaking of a re-

medial action must first provide an opportunity for

“appropriate public comment” unless compliance with a

state regulatory provision “provides a substantially equiv-

alent opportunity for public involvement on the choice of

remedy.” 40 C.F.R. 300.71 (a) (2) (ii) (D).

The distinction between public participation regula-

tions for removal as opposed to remedial actions is im-

portant because removal actions need comply only with the

relatively simple NCP requirements set forth at 40

C.F.R. 300.65, whereas remedial actions must comport

with “more detailed procedural and substantive provisions

of the NCP” set forth at 40 C.P.R. 300.68. Amland,

supra (citations omitted) ; Versatile Metals, Inc. v. U nion

Corp., 693 F. Supp. 1568, 1577-1578 (E.D. Pa. 1988).

2. The facts of this controversy—tIn this case, GE

brought a private party recovery action pursuant to

Section 107(a) (4) (B) of CERCLA against Litton Busi-

ness Systems, Inc. (Litton). GE sought recovery of costs

incurred in cleaning up cyanide-based electroplating solu-

tions and residues at a Springfield, Mo., site which it

purchased from Litton in 1970. Litton is the successor by

merger to Royal McBee Corporation, which, through its

subsidiary, Royal Typewriter, operated a manufacturing

facility at the site between 1959 and 1965. Litton con-

tinued the business until 1969 when operations were shut

down. A byproduct of the manufacturing process was

cyanide-based electroplating waste which was dumped on

a vacant portion of the site, “hich adjoins apartment

complexes and retail, commercial, and manufacturing

properties.

After a four-day bench trial, the district court found

Litton liable for all response costs incurred by GE. 715

F. Supp. 949. The court also awarded GE prejudgment

lda

interest and attorneys’ fees. In so doing, the court re-

jected Litton’s argument that GE’s public participation

activities were not consistent with the NCP and, thus,

that its costs were not recoverable in accordance with

Section 107(a) (4) (B) of CERCLA.

In its opinion, the district court found that there was

no evidence that GE had dumped any waste containing

the chemicals later found to be the source of contamina-

tion. 715 F. Supp. at 951. The court found that GE

had worked with the State to develop a remediation plan,

entered into an administrative consent decree under State

law, and conducted and financed the cleanup. Jd. at 951-

954. Although GE gave Litton early notice of its

CERCLA claim, Litton chose not to participate in the

remediation effort. Jd. at 952.

The court addressed in summary fashion each element

of CERCLA liability and found Litton liable. In particu-

lar, based on GE’s close cooperation with state authorities,

the court found that GE’s public participation activities

were “consistent with the NCP.” Jd. at 961 and 963.

For example, in rejecting Litton’s challenge to GE’s re-

covery on the ground that GE failed to comply with the

public hearing requirement of the NCP, the court found

that GE implemented a removal action consistent with

the NCP and Section 300.65 (id. at 960 and 961), and

that GE’s “compliance with legally applicable or relevant

and appropriate state requirements provides a substan-

tially equivalent opportunity for public involvement,” id.

at 961. Furthermore, the court stated that “if notice to

the public is a requirement, the input of the Missouri

Department of Natural Resources serves as a substitute

for public comment.” Jbid.

The court rejected Litton’s defense that GE should be

barred from recovering because of unclean hands. /d. at

955, Litton had areued that GE should he barred from

recovering because several vears after discovery of the

l6a

contamination, but before the cleanup, GE agreed to sell

the site to a third party, allegedly without disclosing Lit-

ton’s dumping. The court held that the principle of un-

clean hands was inapplicable to the facts because Lition

was not injured or prejudiced by GE’s alleged improper

conduct. Jbid. In dicta, the court also stated that it is

“doubtful” whether the doctrine is applicable in CERCLA

cases. Ibid.

Finally, the court disposed of Litton’s argument that

the “Collateral Benefit Rule” should bar GE from bene-

fiting by having Litton pay for the cleanup because, al-

legedly, GE knew about the dumping when it purchased

the site in 1970. Jd. at 963. The court ruled that the

evidence failed to support Litton’s argument that the

property was being used as a dump when GE bought it,

or that GE could have seen such dumping activities since

they were not visible from the plant.

This appeal followed.

STANDARD OF APPELLATE REVIEW

The questions (1) whether GE, removing hazardous

waste from a particular site, satisfied the prerequisites

for a private recovery of response costs under CERCLA,

as specified in the “National Contingency Plan” adopted

by the Environmental Protection Agency, including any

applicable public participation requirements, and (2)

whether the defense of unclean hands bars private re-

covery actions under CERCLA, are both issues of law

reviewable de novo in this Court. Wells v. Walker, 852

F.2d 368 (8th Cir. 1988), cert. denied, 109 S. Ct. 1121

(1989).

17a

ARGUMENT

|

THE 1985 NATIONAL CONTINGENCY PLAN

DOES NOT SPECIFICALLY REQUIRE THAT

PRIVATE PARTIES PROVIDE FOR

OPPORTUNITIES FOR PUBLIC COMMENT IN

FORMULATING AND IN CONDUCTING A

“REMOVAL” ACTION

As an initial matter, it_is important to decide whether

GE conducted a “removal” or “remedial” action. The

distinction is important because, as we have explained

(supra at 9), GE’s compliance with the NCP’s public

participation requirement is relevant only if GE’s response

action was, in fact, a remedial action.

The district court explicitly found that “GE’s action

was consistent with the NCP as a removal action” (715

F. Supp. at 960) and stated further that “plaintiff imple-

mented the removal action consistent with § 300.65

[which governs removal actions]” (id. at 961), strongly

suggesting that the district found the action to be a re-

moval. Further, the action was “short-term,” as it was

completed in less than 2 months (id. at 953) and at a

cost (with interest) of approximately $1 million (id. at

$63). Indeed, the court concluded that “no public hear-

ing was required due to the fact that GE was comply-

ing with legally applicable or relevant and appropriate

state requirements that the waste be removed.” Id. at

961 (emphasis supplied). However, at the same time, the

court found that GE provided a “site investigation and

analysis of remedial alternatives as required under 300.68

|which governs remedial actions],” /d. and the court

also discussed at length the requirements of 300.68. /d.

at 961-62. This raises some question as to whether the

18a

district court firmly decided if GE’s action was a removal

or a remedial action under CERCLA.’

Overall, the court’s findings of fact suggest that the

record would support the conclusion that GE conducted

only a “removal” action. (“Court finds that GE’s action

was consistent with the NCP as a removal action” 715

F. Supp. at 960, and “[ilit is clear to this Court that

plaintiff [GE] implemented the removal action consistent

with § 300.65” id. 961.) As set forth above, if GE’s re-

sponse at the site was a “removal” action, the 1985

NCP sets forth no specific requirements for public com-

ment opportunities (except to the extent such opportuni-

ties are required by ARARs and are practicable). 40

C.F.R. 300.65.5. Thus, if GE’s action was a “removal”

under the 1985 NCP, then the court’s discussion of GE’s

compliance with the NCP’s public participation require-

ment may be presumed to be dicta, in response to Litton’s

claims, and is not necessary to the court’s holding. (Note

that Litton’s brief clearly treats GE’s action as remedial,

subject to the full panoply of procedures mandated by

< 300.68. |

reé

7 We note that a Remedial Investigation/Feasibility Study (RI/

RS) was performed at the GE site. Such studies generally precede

remedial actions, although in many cases a removal may be per-

formed based on finding in an RI/FS. Also, soil removal can be

an appropriate action to be taken in the context of a remedial ac-

tion. 40 C.F.R. 300.68 (j) (3).

5 See footnote 6.

ed

19a

II

COMPLIANCE WITH STATE REGULATORY

PROVISIONS PERTAINING TO THE CLEANUP

OF A HAZARDOUS WASTE SITE SATISFIES THE

“PUBLIC PARTICIPATION” REQUIREMENTS OF

THE 1985 NCP FOR A “REMEDIAL” ACTION

ONLY IF THE STATE REGULATORY PROVISIONS

PROVIDE FOR A SUBSTANTIALLY EQUIVALENT

OPPORTUNITY FOR PUBLIC INVOLVEMENT

IN THE CHOICE OF THE “REMEDY”

Assuming, however, that GE’s response constituted a

“remedial” action, the United States regards as troub!-

ing the court’s conclusion that no public comment was

required because GE was complying with legally appli-

cable or relevant and appropriate state requirements

(ARARs) “that the waste be removed.” Jd. at 961.

If GE’s action were a remedial action no public hear-

ing would have been required if GE had been complying

with ARARs that “provide[d] a substantially equivalent

opportunity for public involvement in the choice of rem-

edy.” 300.71(a) (2) (ii)(D). Compliance with a sub-

stantive ARAR governing the extent and results of rem-

edy action, however, does not necessarily satisfy the pub-

lic participation requirement of the NCP. The district

court’s statement could be read to suggest that such sub-

stantive compliance would be sufficient, since it refers to

the ARAR standard for remedial actions.’ The district —

court may have concluded, sub silentio, that compliance ©

with one or more ARARs provided “substantially equiv-

alent” opportunities for public involvement, but the opin-

® The court’s statement may also be read to reflect a finding that

no public hearing was required because the state requirement “that

the wastes be removed” identifies GE’s response as a “removal”

action.

20a

ion lacks such an analysis.’° The United States submits

that compliance with a state ARAR satisfies the public

participation requirements of the 1985 NCP for a re-

medial action only if that ARAR includes procedural

provisions that afford “substantially equivalent” oppor-

tunities for public involvement. The district court’s opin-

ion here does not show how compliance with a specific

state ARAR with procedural elements afforded “sub-

stantially equivalent” opportunities for public participa-

t'on and thus satisfied the requirements for remedial ac-

tions in the 1985 NCP.

The district court’s additional statement that the

State’s input in the remedy selection “serves as a sub-

stitute for public comment,” is, in the view of the United

States, erroneous. The United States submits that a pri-

vate party taking remedial action must either provide

some opportunity for public comment on the alternatives

from which a remedial action will be selected, or comply

with a state or local ARAR that includes substantially

equivalent opportunities for public participation in the

seiection of the remedy. The involvement of the state is

simply not a substitute for public participation rights."

Of course, even assuming that GE’s response was in-

deed a remedial action, the record in this case may well

support the conclusion that there was substantial com-

plianece with the public participation requirement. For

example, the opinion indicates that the State Hazardous

Waste Commission held three meetings in which the GE

10 There are findings of fact showing public participation (see,

e.g., finding 20, id. at 952), but these findings are not referenced

in the public participation discussion.

1! Recently, for instance, in Amland Properties Corp. v. Aluminum

Co. of America, 711 F. Supp. 784 (D. N.J. 1989), the court rejected

the contention that the participation of state and local officials,

and the participation of the state environmental agency in the

tandard-setting process obviated the need for a public comment

period. 7d. at 801.

pede

Zla

site was discussed. Jd. at 952. The district court found

that these public hearings were held “both before and

during the course of the cleanup at the site[,]” that pub-

lie notice was provided, and that the public attended the

meetings. IJd.'* Litton cannot convincingly assert that

the public was not involved in the cleanup process in the

face of the court’s finding that changes in the response

actions were made because of “local publicity.” Jd. at

954. If the public had an opportunity to discuss the re-

mediation plans at these hearings, then GE’s response

actions may well have been consistent with the public par-

ticipation requirements of the 1985 NCP, even those for

remedial actions.’* If this was indeed the case, then the

federal government’s concerns about sustaining the in-

tegrity of the public participation process would be sat-

isfied.

III

UNCLEAN HANDS IS NOT AVAILABLE AS A

DEFENSE IN CERCLA PRIVATE PARTY ACTIONS

While Litton does not directly raise the defense of

“unclean hands” in its opening brief, it did so below, and

here it attacks GE’s motives and tactics in this contro-

versy. It is thus worth pointing out that “unclean

hands” is not an available defense to liability in a

CERCLA cost recovery action under Section 107(a), al-

12 Tn addition to the fact that public meetings were held to dis-

cuss the GE site, the district court specifically found that Litton

was directly advised of GE’s potential CERCLA claims prior to

the time that they were incurred, but chose not to cooperate with

GE in negotiating with regard to the cleanup (an issue which

Litton’s brief on appeal does not address). /t. at 952 and 954.

Thus, Litton clearly had an opportunity to participate in the response

action, and no other member of the public has asserted a denial of

a similar opportunity for involvemert. Litton’s notice of GE’s

actions, while not determinative of GE’s compliance of the NCP’s

public participation requirements, is arguably a factor to be con-

sidered in aliocating the parties’ equitable shares of response costs.

13 We have been advised that no transcripts were made offthese

state commission meetings.

22a

though the courts may equitably allocate response costs

as they determine to be appropriate when both plaintiff

and defendant are liable entities and the suit is thus for

contribution. Smith Land & Improvement Corp., 851

F.2d at 88-89. The district court properly rejected Lit-

ton’s unclean hands argument: CERCLA is a strict lia-

bility statute, State of New York v. Shore Realty Corp.,

759 F.2d 1032, 1042 (2d Cir 1985); U.S. v. Aceto Agri-

cultural Chemical Corp., 872 F.2d at 1377. The statute,

in Section 107(b) allows only a limited set of defenses

against liability, 42 U.S.C. 9607(b). Equitable defenses,

such as “unclean hands,” are not among the defenses

Congress authorized in Section 107(b). However, it may

be apropriate for a court to consider equitable defenses

similar to unclean hands in apportioning costs under

CERCLA Section 113(f). See Smith Land & Improve-

ment Corp., supra.

CONCLUSION

For the foregoing reasons, the judgment of the district

court should be affirmed.

Respectfully submitted,

RICHARD B. STEWART

Assistant Attorney General

DAVID C. SHILTON

MAUREEN M. KATz

Of Counsel: JACQUES B. GELIN

LAWRENCE E. STARFIELD Attorneys,

ANDREW GORDON Department of Justice

‘Office of General Counsel Land and Natural

Resources Division

Office of Enforcement and Washington, D.C-20530

Compliance Monitoring (202) 633-2762

Environmental Protection Agency

Washington, D.C. 20460

FEBRUARY 1990

90-11-2-550

HELEN KENNEDY

23a

CERTIFICATE OF SERVICE

I hereby certify that all parties required to be served

have been served copies of the Brief for the United

States, Amicus Curiae by mail, properly addressed and

— postage prepaid on February 16, 1990 to:

James L. Moeller

William F. Ford

GAGE & TUCKER

2345 Grand Avenue

P.O. Box 418200

Kansas City, Missouri 64141

Bruce W. Kauffman

Sherly L. Auerbach

DILWORTH, PAXSON, KALISH & KAUFFMAN

2600 The Fidelity Building

Philadelphia, Pennsylvania 19109-1094

Mathew W. Placzek

JOYNER, PLASZEK & FRANCIS

1722 South Glenstone, Suite J

Springfield, Missouri 65808-0108

Theodore F. Craver

Mark Stanga

Litton Industries, Inc.

490 L’Enfant Plaza

Suite 8206

Washington, D.C. 20024

/s/ Jacques B. Gelin

JACQUES B. GELIN

Attorney, Department of Justice

Washington, D.C. 20530

(202) 633-2762