Petition for Writ of Certiorari — 3550 Stevens Creek Associates v. Barclays Bank of California

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Supreme Court, US.

90-1857 | Fire»

2 FEB 27 1991

No. “qerice OF THE CLERK

In The =

Supreme Court of the United States

October Term, 1990

3550 STEVENS CREEK ASSOCIATES,

Petitioner,

BARCLAYS BANK OF CALIFORNIA,

Respondent.

Petition For A Writ Of Certiorari

To The United States Court Of

Appeals For The Ninth Circuit

PETITION FOR A WRIT OF CERTIORARI

KENNETH A. MANASTER

(Counsel of Record)

c/o School of Law

Santa Clara University

Santa Clara, California 95053

Telephone: (408) 554-4140

BERNARD S. GREENFIELD

Marcia E. GERSTON

Levy, GREENFIELD & DAvIDOFF

One Almaden Boulevard

San Jose, California 95113

Counsel for Petitioner

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT 402) 342-2831

sit ARN tenth Wasa aetna

QUESTION PRESENTED

Can a cause of action be stated under § 107(a)(2)(B; of

the Comprehensive Environmental Response, Compensa-

tion, and Liability Act of 1980, which creates private

rights for recovery of hazardous substance cleanup costs,

by the owner of a commercial building against the prior

owner who placed the hazardous substance asbestos in

the facility for insulation and fire protection purposes?

LIST OF PARTIES

3550 Stevens Creek Associates is a California limited

partnership with its principal place of business in San

Jose, California. The partnership was the plaintiff in this

matter before the United States District Court for the

Northern District of California and the appellant in the

United States Court of Appeals for the Ninth Circuit.

Barclays Bank of California, a California banking cor-

poration, was the defendant and appellee below. In 1988

Barclays Bank of California merged with Wells Fargo

Bank, N.A.

In the Court of Appeals the United States, through

the Department of Justice, submitted a brief as Amicus

Curiae and participated in oral argument in support of

3550 Stevens Creek Associates.

ill

TABLE OF CONTENTS

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

THE DECISION BELOW MANIFESTS SUCH AN

EXTREME DEPARTURE FROM THIS COURT'S

RULES OF STATUTORY INTERPRETATION AS

TO WARRANT THE EXERCISE OF THIS

COURT’S POWER OF SUPERVISION...........

A. THE MAJORITY’S INTERPRETATION OF

“DISPOSAL” IN SECTION 107 OVERLOOKS

THE PERVASIVE CERCLA STATUTORY

REFERENCES TO “HAZARDOUS SUB-

STANCE” AND IMPROPERLY RENDERS

BE re

B. THE MAJORITY’S INTERPRETATION OF

CERCLA SECTION 107 OVERLOOKS THE

LANGUAGE AND PURPOSES OF SECTION

104(a)(3)-(a)(4) AND IMPROPERLY RENDERS

THOSE PROVISIONS SURPLUSAGE .........

TABLE OF CONTENTS - Continued

Page

C. THE MAJORITY DISREGARDS ITS OBLIGA-

TION TO ACCORD SUBSTANTIAL DEFER-

ENCE TO LONG-STANDING EPA

INTERPRETATIONS OF CERCLA AS IT

APPLIES TO HAZARDOUS SUBSTANCES

SETS FD FOO oc ccccsecsccsdecseces 12

2. THE DECISION BELOW CONFLICTS IN PRIN-

CIPLE WITH DECISIONS OF OTHER CIRCUITS

ON IMPORTANT QUESTIONS OF FEDERAL

LAW Ue CUE occ ccc cscccscccveccnnes 13

A. THE MAJORITY’S RESTRICTION OF

CERCLA TO HAZARDOUS WASTES IS

CONTRARY TO THE UNDERSTANDING

AND APPLICATION OF CERCLA IN

CPENGE GRIENEL 6 ve cpewccccestansadconss 13

B. THE MAJORITY’S REFUSAL TO APPLY

CERCLA TO ASBESTOS IN BUILDINGS

CONFLICTS IN PRINCIPLE WITH THE

DECISION OF THE ELEVENTH CIRCUIT IN

UNITED STATES v. FLEET FACTORS....... 15

CONCLUSION

BERRA OR Salen Ke mre ener Hany App. 1

TABLE OF AUTHORITIES

Page

Cases

Consumer Product Safety Commission v. GTE Syl-

GUNN, GOP GT. TE CUS cs ckvonncccsae. seenennzes 7

Edward Hines Lumber Co. v. Vulcan Materials Co.,

ig 8: 2, fe &, Baar errr 14

First United Methodist Church of Hyattsville v. U.S.

Gypsum Co., 882 F.2d 862 (4th Cir. 1989), cert.

denied, __-: US. __, 110 S.Ct. 1113 (1990)......... 15

Florida Power & Light Co. v. Allis Chalmers Corp.,

OPS FAs BSED CUTER Cie. BORED. 2. cnc csccccccsccenss 14

Green v. Bock Laundry Machine Co., 490 U.S. 504

CUD 60 i 60d 0A ORDD IR EER SADR R SES ORDO AEEOR RTL NGIES 6

Griffin v. Oceanic Contractors, Inc., 458 U.S. 565

CUED sc cpicdspeecdcddedeussavcketessRlakaseentie 17

Pennsylvania v. Union Gas Co., 491 U.S. 1 (1989)

<suasspcuantvecdnVanraeeevdancasesadlanweeee 7, 11, 14

Pennsylvania Department of Public Welfare v. Daven-

port, _. US. __, 190 SCL. 2I26 CIS)... .. sss 8

Public Citizen v. United States ers of Justice,

GPS Sh. Re GO oc bic ds nceeek senarbersesanads 9, 11

Tanglewood East Homeowners v. Charles-Thomas Inc.,

OUP Fie Saee Gee CU. Wes ao mss hxc sce saeansaness 14

3550 Stevens Creek Associates v. Barclays Bank of

California, 915 F.2d 1355 (9th Cir. 1990) ....... passim

United States v. Fleet Factors Corp., 901 F.2d 1550,

reh’g denied, 911 F.2d 742 (11th Cir. 1990), cert.

denied, __ U.S. __, 111 S.Ct. 752 (1991)....... 13-17

Wilshire Westwood Associates v. Atlantic Richfield

Corp., 861 F.2d 801 th Cir. 1909) ............2.%. 12

TABLE OF AUTHORITIES - Continued

Page

STATUTES

Be Wee, BEZSED) 2.0 n cc cccccnecccscccccccesscessonss 2

Comprehensive Environmental vir toe” Com-

pensation, and Liability Act, 42 U.S.C. §§9601 et

DOR hace ccccccccscccccccncccccossecesccceceses passim

Solid Waste Disposal Act, 42 U.S.C. §6903(3)....... 2, 8

OTHER AUTHORITIES

50 Fed. Reg. 37627 (1985). .............0-eeeeeeeeeee 12

Brief for the United States as Amicus Curiae....... 5, 11

No.

In The

Supreme Court of the United States

October Term, 1990

—

3550 STEVENS CREEK ASSOCIATES,

Petitioner,

BARCLAYS BANK OF CALIFORNIA,

Respondent.

—>

Petition For A Writ Of Certiorari

To The United States Court Of

Appeals For The Ninth Circuit

PETITION FOR A WRIT OF CERTIORARI

Petitioner 3550 Stevens Creek Associates respectfully

prays that a writ of certiorari issue to review the judg-

ment and majority opinion of the United States Court of

Appeals for the Ninth Circuit entered in the above-

entitled proceeding on October 3, 1990.

OPINIONS BELOW

The majority and dissenting opinions of the United

States Court of Appeals for the Ninth Circuit are reported

at 915 F.2d 1355 and are reprinted in the appendix hereto

(“App.”) at App. 1-31. The District Court’s Order Grant*

ing Defendant’s Motion for Judgment on the Pleadings

(filed September 28, 1988) and the Judgment based

thereon (filed October 17, 1988) are unreported and are

reprinted at App. 32-36.

JURISDICTION

Petitioner brought this action in the Northern District

of California pursuant to the Comprehensive Environ-

mental Response, Compensation, and Liability Act, 42

U.S.C. §§9607, 9613. On September 28, 1988 the District

Court granted the defendant’s Motion for Judgment on

the Pleadings, and the court then entered Judgment dis-

missing the action on October 17, 1988.

The United States Court of Appeals for the Ninth

Circuit rendered judgment against petitioner on October

3, 1990. App. 1. A majority of the panel denied Peti-

tioner’s request for a rehearing on November 29, 1990.

App. 37.

The jurisdiction of this Court is invoked under 28

U.S.C. §1254(1). %

STATUTES INVOLVED

The pertinent provisions of the Comprehensive Envi-

ronmental Response, Compensation, and Liability Act of

1980, as amended by the Superfund Amendments and

Reauthorization Act of 1986, are the definitions in

§§101(9), (14), and (29); the limitation on government

authority, and the exception thereto, in 104(a)(3)(B) and

(a)(4); and the private cost recovery rights in 107(a)(2)(B).

42 US.C. §§9601(9), (14), (29); 9604(a)(3)(B)-(a)(4);

9607(a)(2)(B). Also relevant is the definition in §1004(3) of

the Solid Waste Disposal Act, as amended by the

Resource Conservation and Recovery Act. 42 US.C.

§6903(3). These provisions are set forth in full in the

majority opinion of the Ninth Circuit Court of Appeals

reprinted in the appendix hereto at App. 1-25.

STATEMENT OF THE CASE

This is a civil action brought by 3550 Stevens Creek

Associates (“Stevens Creek”) to recover response costs

which it has expended to clean up asbestos from an office

building which was previously owned by Barclays Bank

of California (“Barclays”) and its predecessors-in-interest.

Additionally, Stevens Creek seeks a declaratory judgment

that Barclays is liable for necessary response costs which

may yet be incurred by Stevens Creek with respect to the

asbestos. This case was filed on October 9, 1987 in the

United States District Court for the Northern District of

California pursuant to §§107(a)(2)(B) and 113(b) of the

Comprehensive Environmental Response, Compensation,

and Liability Act of 1980 (“CERCLA”), as amended by the

Superfund Amendments and Reauthorization Act of 1986

(“SARA”).* 42 U.S.C. §§9607(a)(2)(B), 9613(b). The com-

plaint and answer are reprinted in the appendix hereto at

App. 38-52.

Barclays filed a motion for judgment on the plead-

ings or, in the alternative, for summary judgment. United

States District Judge Robert P. Aguilar granted it as a

motion for judgment on the pleadings. The Order Grant-

ing Defendant’s Motion for Judgment on the Pleadings,

and the attendant Judgment, are reprinted in the appen-

dix hereto at App. 32-36.

The District Court accurately summarized the main

factual allegations of the complaint as follows: “The sub-

ject building, located at 3550 Stevens Creek Bouleva.d,

was constructed in 1963 by First Valley Corporation. The

building contained asbestos insulation, as well as fire

retardants. In 1969, Barclays Bank acquired First Valley's

assets and First Valley Corporation was dissolved in 1971.

Barclays then acquired title to the property, and sold said

title to Plaintiff in 1984. From 1984 through 1986, Plaintiff

remodeled the building, expending over $100,000 in

* Unless otherwise indicated, all references to CERCLA

herein are to the terms of that statute as amended by SARA.

removing asbestos from the building.” App. 33. As

required by CERCLA §107, the complaint alleged that the

response costs Stevens Creek had incurred were neces-

sary and consistent with the National Contingency Plan.

App. 42.

Although the District Court opinion declared that

there “can be no dispute that asbestos is a hazardous

substance” covered by CERCLA, the court found that “no

authority exists for the award of such relief” as Stevens

Creek is seeking. App. 33, 35. The District Court opinion

contains passing references to Barclays’ argument that it

“did not dispose of hazardous waste material at the site.”

App. 33-34. The opinion rests most heavily, however,

upon the court’s view of CERCLA §104(a)(3)(B), 42 U.S.C.

§9604(a)(3)(B), which is a partial limitation on federal

authority to respond to hazardous substances such as

asbestos “within[] residential buildings or business or

community structures.” The court considered it

“unlikely” that Congress would have intended to con-

strain federal government responses to asbestos in build-

ings, without similarly limiting private responses. The

court also declared that “even assuming that Congress

did intend precisely such a result, that intent is not clear

and is not expressed in the statute.” App. 34.

Stevens Creek filed a Notice of Appeal to the United

States Court of Appeals for the Ninth Circuit. The United

States, through the Department of Justice, filed a brief

amicus curiae on behalf of Stevens Creek. The Court of

Appeals heard argument on November 14, 1989 and, on

October 3, 1990, a majority of the panel affirmed the

judgment of the District Court. App. 1-25. A dissenting

opinion was filed by Circuit Judge Harry Pregerson. App.

25-31. Stevens Creek’s petition for rehearing was denied

by a majority of the panel on November 29, 1990. App.

37.

In response to the District Court’s reliance upon

§104(a)(3)(B) as the ground of its decision, both Stevens

Creek and the United States concentrated upon that pro-

vision before the Court of Appeals. The United States

rejected the District Court’s view and declared, “A funda-

mental premise of CERCLA was that the massive problem

posed by releases of hazardous substances into the envi-

ronment could not be addressed unless the limited public

funds devoted to the Superfund were supplemented with

private cleanup efforts, supported by private cost recov-

ery actions.” Brief for the United States as Amicus Curiae

(“U.S. Brief”) at 7. The government also examined the

§104(a)(4) emergency exception to the (a)(3)(B) limitation

and stated that “Congress expected that private parties

would respond to the releases covered by Subsection

(a)(3), thus preserving the Fund for emergencies where

no other party could respond.” To bar such private

actions would be “contrary to the obvious congressional

desire to encourage private cleanups in order to preserve

the Fund.” Id. at 11.

The government also rejected “the faulty premise

that CERCLA was only intended to deal with the problem

of inactive and abandoned hazardous waste disposal

sites.” It documented the Environmental Protection

Agency’s “consistent agency interpretation” that

CERCLA “extends beyond inactive hazardous waste

sites.” Id. at 15-16. The government urged remand to the

District Court to determine whether Stevens Creek’s case

satisfies the numerous components of a CERCLA cause of

action. Id. at 16-17.

The majority opinion seems to agree with Stevens

Creek and the United States that “section 104(a)(3)(B) by

its terms applies only to the President and not to private

parties,” although the majority also says it is unnecessary

to decide the point. App. 20 n.18; App. 23-24 n.19. The

majority construed the District Court opinion as deter-

mining that §107 itself does not extend to Stevens Creek’s

claim. App. 20 n.18. The majority concluded that the

word “disposal” as used in §107 restricts private cost

recovery actions only to situations involving hazardous

“waste,” rather than the broader category of hazardous

“substances.” Viewing the asbestos in this case as build-

ing material, rather than “waste,” the majority concluded

‘that this cause of action could not stand under §107. App.

16-18, 21.

The dissenting opinion declaimed that the majority’s

“numbing, highly technical analysis” overlooks the “very

language of the statute which refers repeatedly to the

‘disposal of hazardous substances.’” App. 25, 27 n.5.

Furthermore, Judge Pregerson urged the sound policy

benefits under CERCLA of recognizing “an effective, stat-

utory remedy for dealing with asbestos clean-up costs in

private structures.” App. 30. The dissent would let the

case proceed on remand to the District Court for deter-

mination of whether Stevens Creek can prove the various,

specific requirements of a §107 private cost recovery

action which it has pleaded.

REASONS FOR GRANTING THE WRIT

1. THE DECISION BELOW MANIFESTS SUCH AN

EXTREME DEPARTURE FROM THIS COURT’S

RULES OF STATUTORY INTERPRETATION AS TO

WARRANT THE EXERCISE OF THIS COURT’S

POWER OF SUPERVISION.

Justice Scalia noted not long ago that a brief submit-

ted to the Court had treated statutory language as sec-

ondary to legislative history. He lamented that a legal

culture may be developing in which such an assertion by

counsel “was not beyond the pale.” Green v. Bock Laundry

Machine Co., 490 U.S. 504, 530 (1989) (Scalia, J., concur-

ring). A similar corruption of the role of statutory lan-

guage would have been no more beyond the pale had

counsel addressed one of the CERCLA provisions at issue

here as follows:

In any event we believe it is unnecessary .. . to

decide whether section 104(a)(3)(B) is a limita-

tion on private parties as well as the govern-

ment. We simply consider it along with all other

relevant legislative history.

This astonishing statement, however, was not made by

counsel in this case. It was made in the majority opinion.

App. 24 n.19 (emphasis added).

The majority’s statement reduces major language of

the statute to the subordinate, explanatory role of legisla-

tive history. The statement is but one of many aspects of

the majority opinion which reflect an egregious disregard

of the proper role of the judiciary in the interpretation of

Congressional statutes. What might not be beyond the

pale when uttered by counsel surely must become so

when uttered by a panel majority in a United States Court

of Appeals, subject to the supervisory power of this

Court.

A. THE MAJORITY’S INTERPRETATION OF

“DISPOSAL” IN §107 OVERLOOKS THE PEP.-

VASIVE CERCLA STATUTORY REFERENCES

TO “HAZARDOUS SUBSTANCE” AND

IMPROPERLY RENDERS THEM SUR-

PLUSAGE.

This Court has repeatedly affirmed “the familiar

canon of statutory construction that the starting point for

interpreting a statute is the language of the statute itself.

Absent a clearly expressed legislative intention to the

contrary, that language must ordinarily be regarded as

conclusive.” Consumer Product Safety Commission v. GTE

Sylvania, 447 U.S. 102, 108 (1980). This canon and admoni-

tion were not respected in the decision below.

The majority opinion overlooks a “cascade of plain

language” in CERCLA. Pennsylvania v. Union Gas Co., 491

U.S. 1, __, 109 S.Ct. 2273, 2279 (1989). CERCLA repeat-

edly declares that it applies to “hazardous substances.”

See, e.g., 42 U.S.C. §§9604-9607 passim. The majority

would limit the application of CERCLA rights and

remedies to the narrower category of “hazardous wastes”

addressed in the Solid Waste Disposal Act (“SWDA”), 42

U.S.C. §§6901 et seq. Because CERCLA §101(29) incorpo-

rates by reference the SWDA definition of “disposal,” the

majority construes the term to apply even in CERCLA

only to the placement of “hazardous wastes.” As the

dissenting judge says, “This proposition fails to take into

account the very language of the statute which refers

repeatedly to the ‘disposal of hazardous substances.’ ”

App. 27 n.5.

By overlooking this statutory language, the majority

renders it surplusage. If “hazardous substance” in §107

only means “hazardous waste,” there is no reason for

Congress to have included the former phrase at all. Sim-

ilarly, the definition of “hazardous substance” in

§101(14), which identifies “hazardous waste” as a subset

of the broader field of “hazardous substances,” becomes

virtually meaningless.

This Court’s cases “express a deep reluctance to

interpret a statutory provision so as to render super-

fluous other provisions in the same enactment.” Pennsyl-

vania Department of Public Welfare v. Davenport, __ US.

__, 110 S.Ct. 2126, 2133 (1990). An interpretation which

gives meaning to the “whole act” is not only available

here, but is compelled by the logic and purposes of the

statute: CERCLA adopts a definition of “disposal” bor-

rowed from the solid waste statute not so as to nullify

CERCLA’s own references to “hazardous substances,” but

simply to identify the broad range of physical activities

which constitute “disposal” of the broad category of

“hazardous substances” CERCLA itself addresses. Such

activities include the “discharge, deposit, injection, .. . or

placing” of hazardous substances. 42 U.S.C. §6903(3).

Even apart from these elements of the borrowed

SWDA definition of disposal activities, CERCLA contains

other explicit indications of the kinds of activities that are

covered. Thus the definition of “facility” in §101(9) refers

to any site where “a hazardous substance has been depos-

ited, stored, disposed of, or placed...” 42 USC.

§9601(9). Similarly, §101(35)(A) addresses “the disposal or

placement of the hazardous substance on, in, or at the

facility.” 42 U.S.C. §9601(35)(A). By construing the word

“disposal” to apply only to discarded, waste materials,

the majority renders as surplusage the statute’s repeated

references to the broad universe of Congress’s concern —

hazardous substances.!

Ignoring plain and pervasive statutory language, and

relying on inapt precedent, the majority wrongly con-

cludes that “disposal of any hazardous substance” in

CERCLA §107 only applies to disposal of “wastes” as

defined by the SWDA. The majority thus indulges in “the

unhealthy process of amending the statute by judicial

interpretation.” Public Citizen v. U.S. Department of Justice,

491 U.S. 440, __, 109 S.Ct. 2558, 2574 (1989) (Kennedy, J.,

concurring).

B. THE MAJORITY’S INTERPRETATION OF

CERCLA §107 OVERLOOKS THE LANGUAGE

AND PURPOSES OF §104(a)(3)-(a)(4) AND

IMPROPERLY RENDERS THOSE PROVI-

SIONS SURPLUSAGE.

The majority’s interpretation of “disposal” overlooks

the language and purposes of §104(a)(3)(B)-(a)(4). If the

majority view were correct, and §107 were wholly inap-

plicable to asbestos-containing materials used in build-

ings, §104(a)(3)(B)-(a)(4) also would be meaningless. if

asbestos in buildings is simply beyond the scope of this

law, and no cost recovery actions pertaining to it can be

brought by anyone under §107, there would have been

' While attempting to buttress its reading of “disposal”

through tangential case law, the majority overlooks major dif-

ferences between this §107(a)(2) case, against a person who

owned the facility at the time the hazardous substance was

placed there, and the 107(a)(3) “disguised products liability”

cases brought against manufacturers and sellers of hazardous

products which someone else later placed at the contaminated

facility. App. 18 n.16. As petitioner will explain in its brief if

the writ is granted, the meaning of “disposal” is not the issue

in the (a)(3) cases.

no need for Congress to say anything more on the sub-

ject.?

Indeed the maiority asserts that “Section 107 could

have, but did not, explicitly provide for the problem of

the release of asbestos fibers from materials that are part

of the structure of a building.” App. 19. The majority

concludes that the absence of such a provision in §107

amounts to the absence of such a provision in the entire

statute. This overlooks both the broad, inclusive terms of

§107 itself and also §104(a)(3)(B)-(a)(4) in which Congress

through SARA did so “provide.” As the United States

forcefully urged below, “Clearly, the statute authorizes

EPA to respond to releases or threatened releases of

asbestos from buildings in an emergency.” U.S. Brief at

11.

If the majority were correct, Congress would have

had no need to address — as it plainly did — the circum-

stances in which the federal government may act and

expend public funds to clean up releases or threatened

releases “from products which are part of the structure

of, and result in exposure within, residential buildings or

business or community structures.” Under the majority’s

view, Congress addressed in §104 cleanup powers which

under §107 do not exist.

? The majority suggests that CERCLA does not apply to

the escape of asbestos fibers within buildings. App. 11 n.9. This

flies in the face of §104(a)(3)(B)’s reference to “exposure

within” buildings. The majority also assumes that any hazard

resulting from friable asbestos in this case solely “is within the

building.” App. 16. This assumption is speculative, given that

petitioner has had no opportunity to present proof of facts

which could support the allegations of the complaint.

3 Any suggestion that these provisions of §104 are wholly

independent of §107 would lead to the illogical conclusion

that, in contrast with all other government cleanup activities

under CERCLA, on the single subject of asbestos in buildings,

Congress authorized the government to spend public funds for

(Continued on following page)

Similarly, under the majority’s reading there would

have been no need for Congress to refer in §104(a)(4) to

any “other person with the authority and capability to

respond.” That reference on its face encompasses a pri-

vate party who undertakes a cleanup of asbestos in such

a structure and who then has cost recovery rights under

§107. This understanding of §104 gives full, logical signif-

icance to all the words Congress has used.* As this Court

recognized in the Union Gas case, 491 U.S. at__, 109 S.Ct.

at 2285, private cleanups and cost recovery remedies are

an integral part of the CERCLA scheme because of the

limits on available resources of the federal Superfund. As

the United States pointed out below, “Congress expected

that private parties would respond to the releases cov-

ered by Subsection (a)(3), thus preserving the Fund for

emergencies” and promoting “the obvious congressional

desire to encourage private cleanups... .” U.S. Brief at

11.

“Reluctance to working with the basic meaning of

words in a normal manner undermines the legal process.”

Public Citizen v. U.S. Department of Justice, 491 U.S. at __,

109 S.Ct. at 2574 (Kennedy, J., concurring). The majority’s

attempt to make 104(a)(3)-(4) disappear, or somehow

recede into the background with “other relevant legisla-

tive history,” should be seen for what it is. It is an

(Continued from previous page)

cleanups under 104 but without any cost recovery recourse

against responsible parties under 107. It is difficult to imagine

such a deviant legislative choice, and there is no basis for

inferring it.

4 It might be suggested that the statutory language should

be disregarded in this case because a literal reading would

“compel an odd result.” See Public Citizen v. U.S. Department of

Justice, 491 U.S. 440, __, 109 S.Ct. 2558, 2566 (1989). Such a

suggestion would disregard not only the limited domain of the

“odd” or “absurd” result cases as this Court has viewed them,

but also the sound policy and logic supporting the analyses of

the dissenting opinion and the United States as amicus below.

extreme departure from the accepted and usual course of

judicial proceedings involving statutes enacted by the

United States Congress, and it should not be tolerated by

this Court.

C. THE MAJORITY DISREGARDS ITS OBLIGA-

TION TO ACCORD SUBSTANTIAL DEFER-

ENCE TO LONG-STANDING EPA

INTERPRETATIONS OF CERCLA AS IT

APPLIES TO HAZARDOUS SUBSTANCES

SUCH AS ASBESTOS.

The majority briefly acknowledges this Court's

admonition that “[t]he interpretation of an agency

charged with the administration of a statute is entitled to

substantial deference. ... ” App. 23 n.19. The majority

then charts a separate course, declaring that “we feel no

such obligation in this case.” Id. The majority dismisses

the “litigation arguments of the United States” as not

constituting an “agency interpretation.” Whether or not

this casting aside of amicus views is proper, there is other

evidence of applicable CERCLA interpretations by the

EPA, the federal agency which enforces CERCLA. The

Ninth Circuit in other cases has recognized that “consid-

erable deference” should be accorded EPA's interpreta-

tions of CERCLA. See, e.g., Wilshire Westwood Associates v.

Atlantic Richfield Corp., 881 F.2d 801, 810 (9th Cir. 1989).

Here the majority wrongly chose not to consider perti-

nent EPA views and actions.

First, both Stevens Creek and the United States had

called to the attention of the Court of Appeals the EPA’s

unwavering view that “CERCLA does not limit response

to hazardous waste sites.” See, e.g., 50 Fed. Reg. 37627,

37631-32 (Sept. 16, 1985). This comment was made

regarding an EPA proposal to place a residential structure

with high levels of radiation on the National Priorities

List for EPA action under CERCLA. In response it had

been argued that CERCLA was intended only for hazard-

ous waste sites, not residential structures. The EPA dis-

agreed and placed the residence on the List. The decision

below wholly ignores this agency interpretation as the

majority seeks to restrict CERCLA to “inactive and aban-

doned hazardous waste disposal sites.” App. 19.

Second, the majority opinion overlooks the directly

pertinent EPA interpretation in United States v. Fleet Fac-

tors, 901 F.2d 1550, 1553, reh’g denied, 911 F.2d 742 (11th

Cir. 1990), cert. denied, __ U.S. __, 111 S.Ct. 752 (1991).

There the EPA, acting under CERCLA, incurred costs in

1984 of nearly $400,000 in cleaning up hazardous sub-

stances at a facility in Georgia. Included were “forty-four

truckloads of material containing asbestos” that formerly

had been on pipes connected to equipment or machinery

at the facility. 724 F.Supp. 955, 959 (S.D.Ga. 1988). EPA, in

short, cleaned up asbestos from inside a building and

spent Superfund money to do so.

Although EPA’s action in Fleet Factors is not a written

administrative interpretation, at least as much, if not

more, attention should be paid to what EPA did there,

especially since neither a litigant nor the Eleventh Circuit

questioned it. In a court of law, as well as elsewhere in

American life, actions speak louder than words, espe-

cially when the government has put money where its

mouth might have been. The majority has given Fleet

Factors only a cursory citation and has completely over-

looked this strong, albeit implicit, agency interpretation

that CERCLA applies to the cleanup of asbestos installed

inside a building. App. 9 n.6.

2. THE DECISION BELOW CONFLICTS IN PRINCI-

PLE WITH THE DECISIONS OF OTHER CIRCUITS

ON IMPORTANT QUESTIONS OF FEDERAL LAW

UNDER CERCLA.

A. THE MAJORITY’S RESTRICTION OF CERCLA

TO HAZARDOUS WASTES IS CONTRARY TO

THE UNDERSTANDING AND APPLICATION

OF CERCLA IN OTHER CIRCUITS.

The majority quotes approvingly from an official

study under CERCLA to the effect that “hazardous

substances are generally dealt with at the point when they

are about to, or have become, wastes.” App. 17 (emphasis

added). Obviously the major thrust of CERCLA, and of

most of the cases decided under it, is the problems associ-

ated with hazardous waste sites. The fact that this is

“generally” what CERCLA treats, however, does not

mean it is exclusively what CERCLA covers.

In seeking to transform the mainstream of CERCLA

coverage into the totality of it, the majority departs from

case law in other Circuits which explicitly recognizes that

CERCLA applies broadly to “hazardous substances.”®

Although many courts, including even this Court, have

tended to use “hazardous substances” and “hazardous

wastes” interchangeably,® some Circuits’ decisions clearly

indicate that “hazardous substances” cover more than

discarded, waste materials.

For example, the Eleventh Circuit in Fleet Factors

applied CERCLA not just to the EPA’s removal of

asbestos but also to its removal of hundreds of large

drums of dyes and chemicals used for textile printing

purposes. 901 F.2d 1550 (11th Cir. 1990). See also Florida

Power & Light Co. v. Allis Chalmers Corp., 893 F.2d 1313

(11th Cir. 1990) (electrical transformers containing PCBs).

Similarly, the Seventh Circuit in Edward Hines Lumber Co.

v. Vulcan Materials Co., 861 F.2d 155 (7th Cir. 1988), con-

sidered cleanup liabilities arising from releases of useful,

wood preservative chemicals. The Fifth Circuit applied

CERCLA to a residential subdivision in Tanglewood East

5 In further briefing if the writ is granted, petitioner will

show that the legislative history is fully supportive of the

broad scope of CERCLA’s application to hazardous substances.

Petitioner will also show that the majority misconstrues the

portions of the SARA legislative history upon which it relies.

6 In Pennsylvania v. Union Gas Company, 491 U.S. at __, 109

S.Ct. at 2285, the Court notes that “Congress had tried to solve

the problem posed by hazardous substances,” yet in the same

paragraph the Court refers broadly to “hazardous-waste con-

tamination.”

Homeowners v. Charles-Thomas, Inc., 849 F.2d 1568, 1573

(5th Cir. 1988). Even the Fourth Circuit, although wrongly

rejecting CERCLA’s application to asbestos in buildings,

aptly stated:

We also recognize that the statute reaches far

more than hazardous waste sites; in fact, it has

been said that through CERCLA, ‘Congress

sought to deal with every conceivable area

where hazardous substances come to be

located. ...* State of N.Y. v. General Elec. Co., 592

F.Supp. 291, 296 (N.D. N.Y. 1984).

First United Methodist Church v. U.S. Gypsum Co., 882 F.2d

862, 867 (4th Cir. 1989), cert. denied, US. __,110S.Ct.

1113 (1990).

On the question of whether CERCLA covers only haz-

ardous waste sites, as the Ninth Circuit now says, or a

broader category of facilities containing hazardous sub-

stances, as these other Circuits say, there is now conflict.

Unless this Court resolves the conflict, both governmental

and private cleanup efforts will face serious obstacles. When

CERCLA cleanup or cost recovery is attempted in cases like

those just noted, a potentially responsible party can interpose

the Ninth Circuit’s view that the cleanup is not authorized

by the statute because the materials in question, however

hazardous they may be, are not “wastes” but rather useful

building materials or process chemicals. In order to avoid the

confusion that EPA, state governments, and private parties

will face amidst this conflict among the Circuits, and in order

to promote the uniform and salutary cleanup policies

CERCLA embodies, this Court should resolve the conflict.

B. THE MAJORITY’S REFUSAL TO APPLY

CERCLA TO ASBESTOS IN BUILDINGS CON-

FLICTS IN PRINCIPLE WITH THE DECISION

OF THE ELEVENTH CIRCUIT IN UNITED

STATES v. FLEET FACTORS.

As noted, the EPA in Fleet Factors had cleaned up

hazardous substances in a building, including large

amounts of asbestos-containing materials which had been

on pipes connected to machinery and equipment inside

the building. No dispute was raised in Fleet Factors as to

whether asbestos in buildings is covered by CERCLA.

Instead the case proceeds on the implicit assumption that

CERCLA cleanup liability extends to that substance in

that type of facility.

The Eleventh Circuit’s opinion also explicitly com-

ments upon liability for asbestos cleanup under

§107(a)(2), the same provision presented here. In discuss-

ing liability of the secured lender, the Eleventh Circuit

said, “Indeed, Fleet’s involvement would pass the thresh-

old for operator liability under §9607(a)(2).” 901 F.2d at

1560. The court’s footnote at that point is striking: It

quotes an exchange between Judge Kravitch, the deci-

sion’s author, and counsel for Fleet Factors during oral

argument in which “counsel for Fleet virtually conceded

operator liability for its conduct with respect to the facil-

ity when he discussed Fleet's potential for liability were it

to have fixed a hole in the roof” of the building and

found “in fixing the roof that there is some asbestos that

is being dislodged.” Id. at 1560 n.15. The clear import of

the quoted exchange is that CERCLA liability would

attach under §107(a)(2) “as to that asbestos.” /d.

This exchange, and the appurtenant statement in the

text that Fleet could be liable under §107(a)(2), embody

an opinion of the Eleventh Circuit that conflicts in princi-_

ple with the conclusion of the majority opinion in the

instant case. This conflict should be resolved by this

Court as it affects an important question of federal law

Asbestos in commercial buildings poses a wide-

spread hazard. As part of the national effort to address it,

owners such as Stevens Creek should be permitted to

pursue the rights Congress has granted them. Asbestos

contamination will not go away if causes of action such as

this are disallowed, but the incentives CERCLA provides

for prompt cleanup would be reduced. Furthermore,

unlike the myriad of other hazardous substance problems

in which CERCLA promotes fair sharing of cleanup costs

among present and past responsible parties, current

property owners alone would bear the full cleanup bur-

den.

It may well be that very few CERCLA cases such as

this are likely to arise. Current building owners who

purchased at lower prices because of known asbestos

contamination would have little or no reason to pursue

this remedy against prior owners. Even the defendant's

answer in this case recognizes that the ultimate result

here would be an equitable allocation of cleanup lia-

bilities under §§107 and 113(f). App. 51-52. If, however,

there prove to be many similar suits which could be

brought if this cause of action stands, this Court's

reminder regarding statutory claims is apt: “The remedy

for any dissatisfaction with the results in particular cases

lies with Congress and not with this Court. Congress may

amend the statute; we may not.” Griffin v. Oceanic Con-

tractors, Inc., 458 U.S. 565, 576 (1982).

As the United States noted below, to discourage pri-

vate asbestos cleanup efforts is ultimately to make it

“more likely that Superfund monies would have to be

spent under §104(a)(4)’s emergency exception.” U.S. Brief

at 11. That outcome is directly contrary to the strong

Congressional policy favoring private action in the first

instance. By resolving the conflict in principle among the

Circuits and permitting Stevens Creek's cause of action to

proceed, the Court can promote this Congressional policy

as well as the broad environmental health and safety

objectives of CERCLA.

CONCLUSION

For the foregoing reasons, a writ of certiorari should

issue to review the decision of the Ninth Circuit Court of

Appeals.

Respectfully submitted,

KENNETH A. MANASTER

(Counsel of Record)

c/o School of Law

Santa Clara University

Santa Clara, California 95053

Telephone: (408) 554-4140

BERNARD S. GREENFIELD

Marcia E. GEeRSTON

Levy, GREENFIELD & DAVIDOFF

One Almaden Boulevard -

San Jose, California 95113

Counsel for Petitioner

February 1991

App. 1

3550 STEVENS CREEK ASSOCIATES,

a Limited Partnership,

Plaintiff-Appellant,

Vv.

BARCLAYS BANK OF CALIFORNIA,

Defendant-Appellee.

No. 88-15503.

United States Court of Appeals,

Ninth Circuit.

Argued and Submitted Nov. 14, 1989.

Decided Oct. 3, 1990.

Bernard S. Greenfield and Marcia E. Gerston, Levy,

Greenfield & Davidoff, San Jose, Cal., Kenneth A. Manas-

ter, Los Altos, Cal., for plaintiff-appellant.

Timothy M. Flaherty, Jordan, Keeler & Seligman, San

Francisco, Cal., for defendant-appellee.

Donald A. Carr, Anne S. Almy and David C. Shilton,

U.S. Dept. of Justice, Washington, D.C., for amicus.

Appeal from the United States District Court for the

Northern District of California.

Before FARRIS, PREGERSON and RYMER, Circuit

Judges.

RYMER, Circuit Judge:

3550 Stevens Creek Associates appeals the entry of

judgment on the pleadings in its action for recovery of

costs incurred in the voluntary removal of asbestos dur-

ing remodeling of a commercial building against Barclays

Bank of California, a predecessor-in-interest who owned

the building at the time materials containing asbestos

App. 2

were installed. The United States as Amicus Curiae has

filed a brief on behalf of Stevens Creek. The question on

appeal is whether a private party may recover its

response costs for clean-up of asbestos installed in a

commercial building under section 107(a)(2)(B) of the

Comprehensive Environmental Response, Compensation,

and Liability Act of 1980, 42 U.S.C. § 9607 (CERCLA). We

hold that CERCLA does not permit such an action, and

affirm.

In 1963, First Valley Corporation constructed a build-

ing, located at 3550 Stevens Creek Boulevard in San Jose,

California, which contained asbestos insulation and fire

retardants. In 1969, Barclays Bank acquired First Valley's

assets. First Valley Corporation was dissolved in 1971,

when Barclays acquired title to the property. Barclays

sold the property to Stevens Creek in 1984. From 1984

through 1986, Stevens Creek remodeled the building,

spending more than $100,000.00 in removing asbestos.

Stevens Creek brought this suit in district court

under CERCLA, 42 U.S.C. §§ 9601-9657. It sought dam-

ages under section 107(a), 42 U.S.C. § 9607(a) for removal

costs incurred. On Barclay’s motion the district court

granted judgment on the pleadings, holding that no

authority exists for the award of such relief.

A judgment on the pleadings is a decision on the

merits which we review de novo. General Conference Corp.

App. 3

of Seventh-Day Adventists v. Seventh-Day Adventist Congre-

gational Church, 887 F.2d 228, 230 (9th Cir.1989), cert.

denied, __ US. __, 110 S.Ct. 1134, 107 L.Ed.2d 1039

(1990); McGlinchy v. Shell Chem. Co., 845 F.2d 802, 810 (9th

Cir.1988). Judgment on the pleadings is proper when

there are no issues of material fact, and the moving party

is entitled to judgment as a matter of law. Fed.R.Civ.P.

12(c). The district court’s interpretation of CERCLA is

also reviewed de novo. Idaho v. Hanna Mining Co., 882

F.2d 392, 395 (9th Cir.1989). We may affirm the district

court’s decision on any ground supported by the record.

Marino v. Vasquez, 812 F.2d 499, 508 (9th Cir.1987); Hatch v.

Reliance Ins. Co., 758 F.2d 409, 414 (9th Cir.), cert. denied,

474 U.S. 1021, 106 S.Ct. 571, 88 L.Ed.2d 555 (1985).

Il]

CERCLA was enacted to “provide for liability, com-

pensation, cleanup, and emergency response for hazard-

ous substances released into the environment and the

cleanup of inactive hazardous waste disposal sites.”

Pub.L No. 96-510, 94 Stat. 2767 (1980). It generally

imposes strict liability on owners and operators of facili-

ties at which hazardous substances were disposed. 42

U.S.C. § 9607(a); Hanna, 882 F.2d at 394. To promote these

objectives, Congress created a private claim for certain

“response costs” against “various types of persons who

contributed to the dumping of hazardous waste at a site.”

Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1152

(9th Cir.1989) (citations omitted).

CERCLA employs a bifurcated mechanism to pro-

mote the cleanup of hazardous waste sites, hazardous

App. 4

spills, and releases of hazardous substances into the envi-

ronment. Through the creation of Superfund, the federal

government is empowered to respond to hazardous waste

disposal. 42 U.S.C. §§ 9604-05, 9611-12. The statute also

authorizes private parties to institute civil actions to

recover the costs involved in the cleanup of hazardous

wastes from those responsible for their creation. 42 U.S.C.

§ 9607(a)(1-4). See Wickland Oil Terminals v. Asarco, Inc.,

792 F.2d 887, 890-92 (9th Cir.1986); Dedham Water Co. v.

Cumberland Farms Dairy, Inc., 805 F.2d 1074, 1081 (1st

Cir.1986); Walls v. Waste Resource Corp., 823 F.2d 977,

980-81 (6th Cir.1987); Prudential Ins. Co. of America v.

United States Gypsum, 711 F.Supp. 1244, 1251 (D.N.J.1989);

United States v. Reilly Tar and Chem. Corp., 546 FSupp.

1100, 1112 (D.Minn.1982); H.R. Rep. No. 1016 at 22,

reprinted in 1980 U.S. Code Cong. & Admin. News 6119,

6125.

A private party may recover its “response costs”! for

cleanup of hazardous wastes from a liable party under

' Section 101(25) of CERCLA, 42 U.S.C. § 9601(25), pro-

vides:

(25) The terms ‘respond’ or ‘response’ means

[sic] remove, removal, remedy, and remedial action;

all such terms (including the terms ‘removal’ and

‘remedial action’) include enforcement activities

related thereto.

“Remove” and “removal” are defined at Section 101(23) of

CERCLA, 42 U.S.C. § 9601(23):

(23) The terms ‘remove’ or ‘removal’ means [sic]

the cleanup or removal of released hazardous

(Continued on following page)

App. 5

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

107(a) provides:

(a) Notwithstanding any other provision

of rule of law, and subject only to the defenses

set forth in subsection (b) of this section -

(1) the owner and operator of a vessel or a

facility,

(2) 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,

(3) any person who by contract, agree-

ment, or otherwise arranged for disposal or

treatment, of hazardous substances owned or

possessed by such person, by any other party or

entity, at any facility or incineration vessel

(Continued from previous page)

substances from the environment, such actions as

may be necessary taken in the event of the threat of

release of hazardous substances into the environ-

ment, such actions as may be necessary to monitor,

assess, and evaluate the release or threat of release of

hazardous substances, the disposal of removed

material, or the taking of such other actions as may

be necessary to prevent, minimize, or mitigate dam-

age to the public health or weifare or to the environ-

ment, which may otherwise result from a release or

threat of release. The term includes, in addition,

without being limited to, security fencing or other

measures to limit access, provision of alternative

water supplies, temporary evacuation and housing

of threatened individuals not otherwise provided

for, action taken under section 104(b) of this Act, and

any emergency assistance which may be provided

under the Disaster Relief Act of 1974.

App. 6

owned or operated by another party or entity

and containing such hazardous substances, and

(4) any person who accepts or accepted

any hazardous substances for transport to dis-

posal or treatment facilities, incineration vessels

or sites selected by such person, from which

there is a release, or a threatened release which

cause the incurrence of response costs, of haz-

ardous substance, shall be liable for -

(A) all costs of removal or remedial action

incurred by the United States Government or a

State or an Indian tribe not inconsistent with the

national contingency plan;

(B) any other necessary costs of response

incurred by any other person consistent with the

national contingency plan;

loss of natural resources, including the reason-

able costs of assessing such injury, destruction,

or loss resulting from such a release; and

(D) the costs of any health assessment or health

effects study carried out under section 104(i).

There is no question that section 107(a)(2)(B)

“expressly creates a private cause of action.” Wickland Oil

Terminals, 792 F.2d at 890. Accord Walls, 823 F.2d at 980-81.

To prevail in a private cost recovery action, a plaintiff

must establish that (1) the site on which the hazardous

substances are contained is a “facility” under CERCLA’s

definition of that term, Section 101(9), 42 U.S.C.

§ 9601(9);2 (2) a “release” or “threatened release” of any

2 Section 101(9) of CERCLA, 42 U.S.C. § 9601(9), provides:

(9) The term ‘facility’ means (A) any building,

structure, installation, equipment, pipe or pipeline

(Continued on following page)

App. 7

“hazardous substance” from the facility has occurred, 42

U.S.C. § 9607(a)(4); (3) such “release” or “threatened

release” has caused the plaintiff to incur response costs

that were “necessary” and “consistent with the national

contingency plan,” 42 U.S.C. §§ 9607(a)(4) and (a)(4)(B);

and (4) the defendant is within one of four classes of

persons subject to the liability provisions of Section

107(a). Ascon Properties, 866 F.2d at 1152.

Stevens Creek argues that it has sufficiently pleaded

all the allegations necessary for a claim under section 107,

and that its cause of action is properly brought under the

actual language of that section. In its view section 107 is

not subject to any relevant limitations, particularly to a

limitation on governmental responses to release from

products which are part of the structure of a building set

out in section 104(a)(3). Barclays contends that its prede-

cessors-in-interest did not “dispose” of a hazardous sub-

stance within the meaning of section 107, and that

the response limitations in section 104 are persuasive

authority that removal of building materials containing

asbestos is outside the scope of CERCLA.

(Continued from previous page)

(including any pipe into a sewer or publicly owned

treatment works), well, pit, pond, lagoon, impound-

ment, ditch, landfill, storage container, motor vehi-

cle, rolling stock, or aircraft, or (B) any site or area

where a hazardous substance has been deposited,

stored, disposed of, or placed, or otherwise come to

be located; but does not include any consumer prod-

uct in consumer use or any vessel.

3 Barclays also contends that it is not an “owner or opera-

tor” of the property, arguing that its acquisition of the Stevens

(Continued on following page)

App. 8

We agree with Stevens Creek that the limitation on

governmental response in section 104 is not dispositive.

At the same time, there is no authority recognizing a

private right to relief for the voluntary removal of

asbestos from a commercial building. The cases upon

which Stevens Creek and the EPA rely concern the dis-

posal or dumping of hazardous substances as waste, and

not the removal of asbestos or any other building mate-

rial from a commercial buiiding.* Even those cases which

do involve asbestos relate to its disposal as waste rather

than its use as a building material,5 and no federal court

(Continued from previous page)

Creek property resulted from a purchase of assets which does

not result in successor liability under CERCLA. See Smith Land

& Improvement Corp. v. Celotex Corp., 851 F.2d 86, 91 (3d

Cir.1988), cert. denied, ___ U.S. ___, 109 S.Ct. 837, 102 L.Ed.2d

969 (1989). Because this is a factual question and is irrelevant

to our disposition of this appeal, we do not consider it.

4 See, e.g., Walls, 823 F.2d 977 (removal of waste dumping

ground); Dedham, 805 F.2d at 1075 (removal of “high concentra-

tions of volatile organic compounds” illegally discharged into

wells); Wickland Oil Terminals, 792 F.2d at 889 (removal of

“hazardous concentrations of various metals” deposited in

ground on site of former smelting operation); New York v. Shore

Realty, 759 F.2d 1032, 1037 (2d Cir.1985) (removal of “hazard-

ous waste disposal site”); Pinole Point Properties v. Bethlehem

Steel Corp., 596 F.Supp. 283, 285 (N.D.Cal.1984) (discharge of

hazardous substances into pond by steel company); New York v

General Elec. Co., 592 F.Supp. 291, 293 (N.D.N.Y.1984) (disposal

of “used transformer oil” containing PCBs); Reilly Tar & Chem.,

546 F.Supp. at 1105 (D.Minn.1982) (chemical waste contamina-

tion of groundwater by refinery).

5 See Smith Land, 851 F.2d at 87-88 (“Clean-up of a hazard-

ous waste site” consisting of “large waste pile” accumulated

(Continued on following page)

App. 9

which has considered the placement of asbestos as part of

the structure of a building has concluded that it falls

within the scope of Section 107(a).®

We therefore begin by considering the plain language

of the statute. American Tobacco Co. v. Patterson, 456 U.S.

63, 68, 102 S.Ct. 1534, 1537, 71 L.Ed.2d 748 (1982). To be

liable under Section 107(a)(2)(B), there must have been a

“release” or “threatened release” of a hazardous sub-

stance, and the defendant must be a person “who at the

time of disposal of any hazardous substance owned or

operated any facility at which such hazardous substances

were disposed of.” 42 U.S.C. § 9607(a)(2) and (4).

“Release” is defined in section 101(22) as “any spill-

ing, leaking, pumping, pouring, emitting, emptying,

(Continued from previous page)

“in the course of manufacturing asbestos products”); United

States v. Metate Asbestos Corp., 584 F.Supp. 1143, 1145

(D.Ariz.1984) (removal of “asbestos mine and mill wastes”).

Co., 882 F.2d 862, 867-69 (4th Cir.1989), cert. denied, U.S. __,

110 S.Ct. 1113, 107 L.Ed.2d 1020 (1990); Retirement Community

Developers, Inc. v. Merine, 713 F.Supp. 153, 156-58 (D.Md.1989);

Prudential, 711 F.Supp. at 1253-56; Corporation of Mercer Univ. v.

National Gypsum Co., No. 85-126-3-MAC (N.D.Ga. March 9,

1986), 24 Env’t Rep. Cas. (BNA) 1953. Cf. United States v. Fleet

Factors Corp., 724 F.Supp. 955 (S.D.Ga.1988) (denying defen-

dants’ motion for summary judgment in action by Environ-

mental Protection Agency to recover response costs for

removal of asbestos-containing material and barrels of hazard-

ous chemicals), aff'd, 901 F.2d 1550 (11th Cir.1990).

App. 10

discharging, injecting, escaping, leaching, dumping, or

disposing into the environment... . “7 The “environ-

ment” includes surface and ground waters and “ambient

air within the United States.”® Other courts considering

7 Section 101(22) of CERCLA, 42 U.S.C. 9601(22), provides

in full:

(22) The term ‘release’ means any spilling,

leaking, pumping, pouring, emitting, emptying, dis-

charging, injecting, escaping, leaching, dumping, or

disposing into the environment (including the aban-

donment or discarding of barrels, containers, and

other closed receptacles containing any hazardous

substance or pollutant or contaminant), but excludes

(A) any release which results in exposure to persons

solely within a workplace, with respect to a claim

which such persons may assert against the employer

of such persons, (B) emissions from the engine

exhaust of a motor vehicle, rolling stock, aircraft,

vessel, or pipeline pumping station engine, (C)

release of source, byproduct, or special nuclear mate-

rial from a nuclear incident, as those terms are

defined in the Atomic Energy Act of 1954, if such

release is subject to requirements with respect to

financial protection established by the Nuclear Regu-

latory Commission under section 170 of such Act, or,

for the purposes of section 104 of this title or any

other response action, any release of source

byproduct, or special nuclear material from any pro-

cessing site designated under section 102(a)(1) or

302(a) of the Uranium Mill Tailings Radiation Con-

trol Act of 1978, and (D) the normal application of

fertilizer.

® Section 101(8) of CERCLA, 42 U.S.C. 9601(8), provides in

full:

(8) The term ‘environment’ means (A) the navigable

waters, the waters of the contiguous zone, and the

(Continued on following page)

App. 11

this language have concluded that the “environment”

referred to in the statute “includes the atmosphere, exter-

nal to the building,” but not the air within a building. See

Prudential, 711 FSupp. at 1255 n. 3 (citing First United

Methodist Church, 882 F.2d at 867 & n. 5); Knox v. AC & S,

Inc., 690 F.Supp. 752, 757 (S.D.Ind.1988); Electric Power Bd.

of Chattanooga v. Westinghouse Elec. Corp., 716 F.Supp.

1069, 1080-81 (E.D.Tenn.1988). See also Covalt v. Carey

Canada Inc., 860 F.2d 1434 (7th Cir.198¢ ; United States v. A

& F Materials Co., 582 FSupp. 842, 845 (S.D.111.1984).?

“Facility” is a “building [or] structure . . . where a

hazardous substance has been deposited, stored, dis-

posed of, or placed, or otherwise come to be located.” 42

U.S.C. § 9601(9). Barciays does not contend that a struc-

ture built with asbestos insulation and fire retardants is

not a “facility” within the meaning of CERCLA.'°

(Continued from previous page)

ocean waters of which the natural resources are

under the exclusive management authority of the

United States under the Fishery Conservation and

Management Act of 1976, and (B) any other surface

water, ground water, drinking water supply, land

surface or subsurface strata, or ambient air within

the United States or under the jurisdiction of the

United States.

* Although not contested in this proceeding, courts which

have addressed this language have determined that the escape

of asbestos fibers within a building falls outside the intended

objectives of CERCLA. See First United Methodist Church, 882

F.2d at 867 & n. 5; Prudential, 711 FSupp. at 1255 n. 3.

'© In a sense it is more accurate to say that asbestos insula-

tion and fire retardants are the building, than to suppose they

(Continued on following page)

App. 12

“Hazardous substance” is defined in section 101(14),

42 U.S.C. § 9601(14)."! That section, in turn, refers to both

(Continued from previvus page)

have have [sic] “come to be located” in the building. However,

the term “facility” has been broadly construed by the courts,

such that “in order te show that an area is a ‘facility, the

plaintiff need only show that a hazardous substance under

CERCLA is placed there or has otherwise come to be located

there.” Metate Asbestos, 584 F.Supp. at 1148; see also Shore Realty,

759 F.2d at 1043 n. 15; Knox, 690 F.Supp. at 756; United States »

Bliss, 667 F.Supp. 1298, 1305 (E.D.Mo.1987); General Elec. Co.,

592 F.Supp. at 295.

'"! Section 9601(14), 42 U.S.C. § 9601(14), defines “hazard-

ous substance”:

(14) The term ‘hazardous substance’ means (A)

any substance designated pursuant to section

311(b)(2) A) of the Federal Water Pollution Control

Act, (B) any element, compound, mixture, solution,

or substance designated pursuant to section 102 of

this Act, (C) any hazardous waste having the charac-

teristics identified under or listed pursuant to sec-

tion 3001 of the Solid Waste Disposal Act (but not

including any waste the regulation of which under

the Solid Waste Disposal Act has been suspended by

Act of Congress), (D) any toxic pollutant listed under

section 307(a) of the Federal Water Pollution Control

Act, (E) any hazardous air pollutant listed under

section 112 of the Clean Air Act, and (F) any immi-

nently hazardous chemical substance or mixture

with respect to which the Administrator has taken

action pursuant to section 7 of the Toxic Substances

Control Act. The term does not include petroleum,

including crude oil and any fraction thereof which is

not otherwise specifically listed or designated as a

hazardous substance under sub-paragraphs (A)

through (F) of this paragraph, and the term does not

include natural gas, natural gas liquids, liquefied

natural gas, or synthetic gas usable for fuel (or mix-

tures of natural gas and such synthetic gas).

App. 13

the Clean Water Act, 33 U.S.C. § 1317, and the Clean Air

Act, 42 U.S.C. § 7412. Asbestos is classified as a “toxic

pollutant” under the Clean Water Act and a “hazardous

air pollutant” under the Clean Air Act. 33 U.S.C. § 1317;

42 USC. § 7412; see 40 C.FR. Part 122, App. D, Table V

(1987); 40 C.F.R. § 401.15 (1987); 40 C.F.R. Part 61, Subpart

M (1987). It is also designated as a hazardous substance

for purposes of sections 102 (authorizing Administrator

to designate hazardous substances) and 105 (providing

for the national contingency plan) of CERCLA. See 40

C.FR. § 302.4, Table 302.4 (1987).'2 The district court

found, and we assume, that asbestos is a “hazardous

substance”; however that fact is insufficient to establish

that its placement as part of the structure of a building

constitutes “disposal of any hazardous substance” under

CERCLA.

“Disposal” is defined by reference to the Solid Waste

Disposal Act.'? SWDA section 1004 defines “disposal” as:

12 See also Prudential Ins. Co., 711 F.Supp. at 1252; Knox, 690

F.Supp. at 755; Metate Asbestos, 584 F.Supp. at 1146-48. The

statutes and regulations make no distinction between these

waste forms of asbestos and asbestos in solid form employed

as a building material.

'S Section 101(29) of CERCLA, 42 U.S.C. § 9601(29), pro-

vides:

(29) The terms ‘disposal’, ‘hazardous waste’,

and ‘treatment’ shall have the meaning provided in

section 1004 of the Solid Waste Disposal Act.

Section 1004 of the Solid Waste Disposal Act, 42 U.S.C.

§ 6903, provides, in pertinent part:

(Continued on following page)

App. 14

the discharge, deposit, injection, dumping, spill-

ing, leaking, or placing of any solid waste or

(Continued from previous page)

(3) The term ‘disposal’ means the discharge,

deposit, injection, dumping, spilling, leaking, or

placing of any solid waste or hazardous waste into

or on any land or water so that such solid waste or

hazardous waste or any constituent thereof may

enter the environment or be emitted into the air or

discharged into any waters, including ground

walers.

(5) The term ‘hazardous waste’ means a solid

waste, or combination of solid wastes, which because

of its quantity, concentration, or physical, chemical,

or infectious characteristics may —

(A) cause, or significantly contribute to an increase

in mortality or an increase in serious irreversible, or

incapacitating reversible, illness; or

(B) pose a substantial present or potential hazard to

human health or the environment when improperly

treat, stored, transported, or disposed of, or other-

wise managed.

* * *

(27) The term ‘solid waste’ means any garbage,

refuse, sludge from a waste treatment plant, water

supply treatment plant, or air pollution control facil-

ity and other discarded material, including solid,

liquid, semisolid, or contained gaseous material

resulting from industrial, commercial, mining, and

agricultural operations, and from community activ-

ities, but does not include solid or dissolved material

in domestic sewage, or solid or dissolved materials

in irrigation return flows or industrial discharges

which are point sources subject to permits under

(Continued on following page)

App. 15

hazardous waste into or on any land or water so

that such solid waste or hazardous waste or any

constituent thereof may enter the environment

or be emitted into the air or discharged into any

waters, including ground waters.

“Solid waste” is “any garbage, refuse, sludge, . . . and

other discarded material... .” 42 U.S.C. § 6903(27), and

“hazardous waste” is that subset of “solid waste” which

poses a particularly great threat to human health or the

environment, see 42 U.S.C. § 6903(5). Regulations issued

by the Environmental Protection Agency similarly define

“solid waste” as “any discarded material” which is

“abandoned, ... recycled, ... or inherently wastelike.” 40

C.FER. § 261.2(a). The terms do not include materials

which are “used or reused as ingredients in an industrial

process to make a product. ...” 40 C.F.R. § 261.2(e)(1)(i).

(Continued from previous page)

section 1342 of Title 33, or source, special nuclear, or

byproduct material as defined by the Atomic Energy

Act of 1954, as amended (68 Stat. 923 [42 U.S.C.

§ 2011 et seq.]).

(34) The term ‘treatment’, when used in con-

nection with hazardous waste, means any method,

technique, or process, including neutralization,

designed to change the physical, chemical, or biolog-

ical character or composition of any hazardous waste

sO as to neutralize such waste or so as to render such

waste nonhazardous, safer for transport, amenable

for recovery, amenable for storage, or reduced in

volume. Such term includes any activity or process-

ing designed to change the physical form or chemi-

cal composition of hazardous waste so as to render it

nonhazardous.

App. 16

On its face “disposal” pertains to “solid waste or

hazardous waste,” not to building materials which are

neither. There is no suggestion that Barclays or its prede-

cessors-in-interest discarded asbestos insulation and fire

retardants; rather they were used to construct the build-

ing. Nor can the construction of a building using these

materials fit into “the discharge, deposit, injection, . . . or

placing into or on any land or water” specified in the

definition. There is no question that the asbestos mate-

rials in this case were built into the structure, not placed

“into or on any land or water.” Finally, there is no indica-

tion that materials containing asbestos installed as part of

the structure of a building, as here, are such that asbestos

fibers “may enter the environment or be emitted into the

air.” Even when action is taken that makes the asbestos

friable, the resulting hazard is within the building.

Stevens Creek argues that the specific reference to

“disposal of hazardous substances” in section 107 overrides

the definition of “disposal” limited to “hazardous

wastes” borrowed from the Solid Waste Disposal Act. It

also argues that because the phrases “hazardous subs-

tance” and “hazardous waste” are used interchangeably,

the definitions of “waste” are irrelevant.

This reasoning is unpersuasive for two reasons. First,

Congress could have defined “disposal” for purposes of

CERCLA any way it chose; it chose to import the mean-

ing provided in SWDA. That meaning is clear. All

CERCLA definitions, including for “disposal,” are set

forth in section 101 and apply to all subsequent sections,

some of which also speak of “hazardous substances.” No

reason appears in the statutory scheme to give a term one

meaning for one section but another for another. Second,

App. 17

the fact that “hazardous substance” and “hazardous

waste” may be used interchangeably goes to show that

asbestos in non-waste form, such as insulation, was not

meant to be covered: “both the terms hazardous substance

and hazardous wastes are used, and their use is often

interchangeable, because in the context of CERCLA, haz-

ardous substances are generally dealt with at the point

when they are about to, or have become, wastes.” Injuries

And Damages From Hazardous Wastes — Analysis And

Improvement Of Legal Remedies: A Report To Congress In

Compliance With Section 301(e) of [CERCLA] By The “Super-

fund Section 301(e) Study Group”, Part 1, p. 26.14

Stevens Creek points to no authority construing “dis-

posal” as it suggests. However, courts in other circuits

have construed “disposal” for purposes of section

107(a)(3)'5 as referring only to an affirmative act of dis-

carding a substance as waste, and not to the productive

'4 The interpretation of CERCLA given by the “distin-

guished panel of lawyers” who comprised the 301(e) Study

Group has been accorded substantial weight by other federal

courts. See Covalt v. Carey Canada, Inc., 860 F.2d 1434, 1437 (7th

Cir.1988); see also Electric Power Bd. of Chattanooga, 716 F.Supp.

at 1080 & n. 3.

15 Section 107(a)(3) makes liable

“any person who by contract, agreement, or oth-

erwise arranged for disposal or treatment, or

arranged with a transporter for transport for dis-

posal or treatment, of hazardous substances owned

or possessed by such person, by any other party or

entity, at any facility or incineration vessels owned

or operated by another party or entity and contain-

ing such hazardous substances... . ”

App. 18

use of the substance. See, e.g. Prudential, 711 F.Supp. at

1253-56 (sale of asbestos building materials is not “dis-

posal” of asbestos under CERCLA); Jersey City Redevelop-

ment Auth. v. PPG Indus., 655 FSupp. 1257, 1260-61

(D.C.N.J. 1987), aff’d, 866 F.2d 1411 (3d Cir.1988) (transac-

tion involving transfer of hazardous substance is not

“disposal” if it involved the sale of a product); Edward

Hines Lumber Co. v. Vulcan Materials Co., 685 F.Supp. 651,

654 (N.D.II1.1988), aff'd, 861 F.2d 155 (7th Cir.1988) (sale of

hazardous substance for use in wood treatment process

does not constitute arranging disposal or treatment of

hazardous substance, even where process run-off contain-

ing that substance had been placed at the site); United

States v. Westinghouse Elec. Corp., 22 E.R.C. (BNA) 1230

(S.D.Ind.1983) (sale of product containing toxic chemical

for use in manufacturing does not constitute “disposal”).

Because the definition applicable to actions under

§ 107(a)(2) and (a)(3) is the same, and there is no mean-

ingful difference for purposes of CERCLA between a

party who sells or transports a product containing or

composed of hazardous substances for a productive use,

and a party who actually puts that product to its con-

structive use, we see no reason to adopt a different defini-

tion in this case.'®

'6 Stevens Creek’s contention that actions under section

107(a)(3) differ from 107(a)(2) actions in that they are essen-

tially disguised products liability suits is unhelpful, because it

fails to explain why one definition of “disposal” should apply

in actions under section 107(a)(3), and another in actions under

107(a)(2).

App. 19

Stevens Creek argues that CERCLA is to be broadly

construed and that private remedies were intended to

supplement, indeed supplant, governmental response to

environmental threats. We agree that the Act is to be

given a broad interpretation to accomplish its remedial

goals. See First United Methodist Church, 882 F.2d 862; see

also Wickland Oil Terminals v. Asarco, 792 F.2d 887, 891, 892

(9th Cir.1986). However we must reject a construction

that the statute on its face does not permit, and the

legislative history does not support.

CERCLA was designed to deal with the problem of

ir .ctive and abandoned hazardous waste disposal sites.

U.S.Code Cong. & Admin.News 1980, at 6119, 6125; State

of New York v. Shore Realty Corp., 759 F.2d 1032, 1040 (2d

Cir.1985) (quoting F. Anderson, D. Mandelker, & A. Tar-

lock, Environmental Protection: Law and Policy 568 (1984)).

Necessarily it was the product of many compromises.

Shore Realty, 759 F.2d at 1040. Section 107 could have, but

did not, explicitly provide for the problem of the release

of asbestos fibers from materials that are part of the

structure of a building.

The legislative history shows that Congress intended

just what CERCLA provides on its face. Id.

CERCLA directly addresses the issue of removal of

substances which are part of the structure of buildings in

only one place: section 104(a)(3)(B) limits the authority of

the President to respond “to a release or threat of

release . . . from products which are part of the structure

of, and result in exposure within, residential buildings or

App. 20

business or community structures.”!7 By its terms, section

104 is a limitation on governmental actions; section

104(a)(3)(B) refers to “the President” and applies to

responses only “under this section.”18

17 Section 104(a)(3)(B), 42 U.S.C. 9604(a)(3)(B), provides, in

pertinent part:

(3) Limitations on Response — The President

shall not provide for a removal or remedial action

under this section in response to a release or threat

of release —

(B) from products which are part of the structure

[of], and result in exposure within, residential build-

ings or business or community structures;

(4) Exception to Limitations — Notwithstanding

paragraph (3) of this subsection, to the extent autho-

rized by this section, the President may respond to

any release or threat of release if in the President's

discretion, it constitutes a public health or environ-

mental emergency and no other person with the

authority and capability to respond to the emergency

will do so in a timely manner.

18 Both Stevens Creek and Amicus argue that the district

court erroneously concluded that section 104(a)(3)(B) is a lim-

itation on private actions under section 107(a). While we agree

that section 104(a)(3)(B) by its terms applies only to the Presi-

dent and not to private parties, we do not read the district

court’s order as holding to the contrary. The district court

determined that “the provisions of CERCLA do not provide for

the recovery of costs in this situation,” then discussed section

104(a)(3)(B) before concluding that “it is unlikely that Congress

would have intended to preclude the President from taking a

specific action, while allowing private parties to respond by

that precise action.” We read the court as suggesting that the

limitation in section 104(a) reinforces its determination that

section 107 does not extend to Stevens Creek’s claim.

App. 21

Stevens Creek argues that since section 104(a)(3)(B)

limits only governmental authority to respond to the

presence of asbestos in the structure of a building, by

inference, Congress intended that private parties would

be able to recover under section 107(a). By the same

token, it contends, the exception to the limitation pro-

vided in section 104(a)(4) that permits the President to act

only if “no other person” is able to respond to a release or

threatened release makes sense only if private parties are

permitted to respond to these situations even if the fed-

eral government usually cannot.

We disagree. Congress has effectively precluded pri-

vate party response actions through its “disposal”

requirement in sections 107(a)(2) and (4). Even apart from

this, there is no basis for inferring Congress’ intent to

create such a far-reaching private cause of action under

section 107(a).

The only discussion of asbestos removal in the legis-

lative history of CERCLA occurred during consideration

of the Superfund Amendments and Reauthorization Act

(SARA), Pub.L. No. 99-499, 1986 U.S.Code Cong. &

Admin.News (100 Stat.) 1613, which was enacted in 1986.

.,.uon 112(b) of Senate Bill S. 51 contained the language

now codified as Section 104(a)(3)(B) of CERCLA. The

Senate Report prior to adoption of the SARA amend-

ments to CERCLA discussed the extent of remedial or

removal actions under the Bill:

“CERCLA response authorities are extremely

broad, but there are nevertheless situations,

some of which may be lifethreatening, which are

not within the law’s scope. The [Environmental

App. 22

Protection] Agency has encountered some diffi-

culties, primarily political, in restraining

CERCLA responses to the scope of the law. For

this reason, [the Senate Bill] proposes to make

more explicit certain areas which the law does

not cover.

Specifically, [the Bill] makes clear the exclu-

sion from remedial or removal action of a

release or a threat of a release . . . — from

products which are part of the structure of, and

result in exposure within a facility. . . . The

Environmental Protection Agency has received

requests to take removal or remedial action in

situations where the contamination was from

building materials used in the structure and was

creating an indoor hazard. This section would

clarify that such situations are not subject to

remedial or removal action.”

S.Rep. No. 11, 99th Cong., Ist Sess. 16-17 (1985), reprinted

in 1986 U.S.Code Cong. & Admin.News 2835.

A similar provision limiting response to releases of

materials used in the structure of buildings appeared in

§ 117 of H.R. 2817, a bill passed by the House of Repre-

sentatives on December 20, 1985. See Cooke, The Law of

Hazardous Waste - Management, Cleanup, Liability and Liti-

gation § 12.04[4][e] at 12-68 (1988); see also H.R.Rep. No.

253, 99th Cong., Ist Sess. 91, reprinted in 1986 U.S.Code

Cong. & Admin.News 2835, 2873. After the bills were

resolved in conference, the Conference Report discussed

the limitation in terms specific to the President and to

Section 104:

Section 112(b) prohibits the President from

undertaking a response action under section 104

in response to a release . . . from products which

are part of the structure of residential buildings

App. 23

or businesses or community structures which

result in exposure in such structures.

2.Conf.Rep. No. 962, 99th Cong., 2d Sess. (Joint Explana-

tory Statement of Conference Committee) 190 (1986);

reprinted in 1986 U.S.Code Cong. & Admin.News 3276. As

the committee report also indicated, the committee

adopted the exact language of § 112(b) of Senate Bill S. 51,

without indicating that it intended to modify the original

meaning in any way. Id.

Whether o7 not Senate Report No. 11 is an authorita-

tive guide to the legislative intent underlying this sec-

tion,'? the legislative history is devoid of evidence of a

'9 See First United Methodist Church, 882 F.2d at 868-69 & n.

9, concluding that section 104(a)(3)(B) is a substantive limita-

tion on the breadth of CERCLA itself. Given the fact that

CERCLA provides that response costs are not recoverable

unless they are “consistent with the national contingency

plan,” 42 U.S.C. § 9607(a)(4)(B), and the national contingency

plan provides that a response action will be consistent if the

person taking it acts in circumstances warranting removal con-

sistent with § 300.65, which governs federal removal actions,

40 C.F.R. § 300.71(a)(2), it may be argued that there is some

relationship between private party and government removal

actions.

The United States, appearing as Amicus Curiae, urges us

to take the opposite view, and conclude that section 104(a)

limits only the federal government's ability to respond.

Even though as a general matter, “[t]he interpretation of an

agency charged with the administration of a statute is entitled

to substantial deference, if it is a sensible reading of the statu-

tory language, . . . and if it is not inconsistent with the legisla-

tive history,” Lawrence Co. v. Lead-Deadwood School Dist., 469

U.S. 256, 262, 105 S.Ct. 695, 83 L.Ed.2d 635 (1985), we feel no

(Continued on following page)

App. 24

Congressional intent to authorize a private cause of

action for the recovery of response costs for the removal

of asbestos from a building. In the absence of clear evi-

dence of Congress’ intent to create a private cause of

action, we decline to imply one.

To recognize a private cause of action under Section

107(a)(2) for the voluntary removal of asbestos from a

commercial building would have substantial and far-

reaching legal, financial, and practical consequences. As

the Fourth Circuit has observed:

[tlo extend CERCLA’s strict liability scheme to

all past and present owners of buildings con-

taining asbestos as well as to all persons who

manufactured, transported, and installed

asbestos products into buildings, would be to

shift literally billions of dollars of removal cost

liability based on nothing more than an improv-

ident interpretation of a statute that Congress

never intended to apply in this context. Cer-

tainly, if Congress had intended for CERCLA to

address the monumental asbestos problem, it

(Continued from previous page)

such obligation in this case. As counsel for Amicus conceded

during argument, the EPA has not formulated an official inter-

pretation of section 107(a)(2)(B) as it applies to the removal of

asbestos from the structure of a commercial building. The

litigation arguments of the United States in its amicus brief,

which lists an EPA lawyer as “of counsel,” are not an “agency

interpretation” of CERCLA such as to invoke the customary

rule of deference.

In any event we believe it is unnecessary for us to decide

whether section 104(a)(3)(B) is a limitation on private parties as

well as the government. We simply consider it along with all

other relevant legislative history.

App. 25

would have said so more directly when it pas-

sed [the 1986 “Superfund” amendments to

CERCLA].

First United Methodist Church, 882 F.2d at 869 (citation and

footnote omitted). Accord Retirement Community Devel-

opers v. Merine, 713 F.Supp. 153, 158 (D.Md. 1989).

AFFIRMED.

PREGERSON, Circuit Judge, dissenting:

I dissent. The majority’s opinion is based on a

numbing, highly technical analysis of CERCLA defini-

tions and provisions. “CERCLA is essentially a remedial

statute designed by Congress to protect and preserve

public health and the environment.” Dedham Water Co. v.

Cumberland Farms Dairy, Inc., 805 F.2d 1074, 1081 (1st Cir.

1986). Congress enacted CERCLA “to provide a compre-

hensive response to the problem of hazardous substance

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

887, 890 (9th Cir.1986). The purposes underlying this

remedial statute should not be frustrated by the narrow

interpretations inflicted on it by the majority opinion.

CERCLA provides several complementary mecha-

nisms to effectuate hazardous substance removal.' The

legislation also addresses the problems of compensation

and liability in the wake of a release or threatened release

' The federal government may conduct its own removal of

hazardous substances or remedial actions necessary for such

removal by using moncy from the Superfund. 42 U.S.C. § 9604.

In certain instances the federal government may compel the

parties responsible for the release of hazardous substances to

clean up the site where the hazardous substances are found. 42

U.S.C. § 9606.

App. 26

of a hazardous substance.? Private cost recovery actions

for clean up costs are a central part of CERCLA.* The

availability and independence of these causes of action

are now Clearly recognized by the courts. See id. at 892

(“private enforcement actions under section 107(a)

.. . [are] independent of governmental actions financed

by Superfund”).

Section 107(a)(2) remedies apply only to a narrow

private class of property owners who may be held

responsible for the effects of a hazardous substance they

caused to be placed on their property and failed to

remove when they later sold the property. As argued by

the United States in its amicus brief, the government has

an interest in encouraging private parties to respond to

releases of hazardous substances, because private

cleanups conserve the resources of EPA and the Super-

fund, and enhance EPA’s effort to deal with the massive

problem of improper disposal of hazardous substances.*

? Either the federal government or a private party may

recover the costs of response action from parties determined to

be liable under section 107 of the Act. 42 U.S.C. § 9607.

* “(T]he liability provisions of section 107 are an essential

part of the structure established by CERCLA because the

resources of the Fund alone are simply insufficient to provide

an adequate remedy to the national problem of hazardous

waste disposal.” Dedham Water Co. v. Cumberland Farms Dairy,

Inc., 805 F.2d 1074, 1082 (1st Cir.1986).

* “Asbestos is a known human carcinogen that causes lung

cancer, mesothelioma (a cancer of the chest and abdominal

lining) and is also linked to other cancers. It has been esti-

mated that 3,300 to 12,000 cancer cases a year occur in the

United States as a result of past exposure to asbestos; almost

(Continued on following page)

App. 27

I cannot agree that Congress “effectively precluded

private party response actions through its ‘disposal’

requirement.” Majority opinion at 12527.5 The “disposal”

(Continued from previous page)

all of these cancer cases are fatal. In addition, asbestos causes

asbestosis (a serious lung disorder). About 65,000 persons in

the United States are estimated to be suffering from asbestosis

today.” 51 Fed.Reg. 3738 (1986) (introduction to proposed rule

on ban of asbestos products),

Because of the health risks presented by the release of

asbestos fibers into the environment, the EPA has for the first

time used its authority under section 6 of the Toxic Substances

Control Act to place a comprehensive ban on a dangerous subs-

tance. See 20 Env’t Rep. (BNA) 534 (July 14, 1989) (reporting

EPA Administrator William K. Reilly’s remarks at a press con-

ference announcing the ban) (emphasis added). Determining

that “piecemeal control of the risks [presented by airborne

asbestos fibers] is not satisfactory; only elimination of asbestos

to the extent feasible will produce acceptable reduction of

risks,” 51 Fed.Reg. 3738, the EPA has issued a rule which will

prohibit the manufacture and distribution of asbestos in this

country tor 94% of present asbestos product uses by 1996. 20

Env’t Rep. (BNA) 534 (July 14, 1989); see 40 C.F.R. Part 763.

> The majority bases its analysis on the questionable prop-

osition that “disposal” refers only to the placement of “hazard-

ous wastes,” not of “hazardous substances.” This proposition

fails to take into account the very language of the statute which

refers repeatedly to the “disposal of hazardous substances.”

See §§ 107(a)(2), (a)(3) and (a)(4). The specific reference in the

section to hazardous substances overrides the borrowed Solid

Waste Disposal Act's limited definition of disposal. See Hart-

igan, Asbestos Abatement Cost Recovery Under the Comprehensive

Environmental Response, Compensation, and Liability Act, 14

Harv.Envtl.L.Rev. 253, 258-60 (1990) (contending that recovery

of costs for removal of asbestos from buildings properly fits

within the plain language and congressional intent of

(Continued on following page)

App. 28

requirement does not clearly show that Congress

intended to preclude private party liability for installing

the hazardous substance — asbestos — within private

structures. Interpretation of the term “disposal” to

include installation of asbestos insulation and fire retar-

dants in private buildings lies at the heart of the issue of

potential liability under 107(a)(2). Depending on the

facts, the installation of asbestos in private structures

could fall within the definition of “disposal” and thus

result in potential liability under section 107(a)(2) for

clean up cost recovery. Because the district court never

addressed this issue, we should remand the matter with

directions to determine whether the facts of this case

satisfy the “disposal” requirement.

(Continued from previous page)

CERCLA). Case law also tends to use the terms “hazardous

waste” and “hazardous substance” interchangeably when

referring to CERCLA requirements. See New York v. General

Elec. Co., 592 F.Supp. 291, 296 (N.D.N.Y.1984) (“[I]t appears

that Congress sought to deal with every conceivable area

where hazardous substances come to be located. .. .”) (emphasis

added); Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805

F.2d 1074, 1081 (1st Cir.1986) (“[A liberal] reading of the statute

serves . . . congressional purposes by preserving the limited

resources of the Fund and by ensuring that liability will be

apportioned among parties responsible for the release of haz-

ardous substances whenever possible.”) (emphasis added); Cad-

illac Fairview/California v. Dow Chemical Co., 840 F.2d 691, 693

(9th Cir.1988) (“Section 107(a)(2)(B) expressly creates a private

claim against any person who owned or operated a facility at

the time hazardous substances were disposed of at the facility

for recovery of necessary costs of responding to the hazardous

substances incurred consistent with the national recovery

plan.”) (emphasis added).

App. 29

The widespread use of asbestos in private building

structures presents an extensive problem for which there

is no common law remedy.® Precisely because of the

widespread nature of the problem, government Super-

fund resources are not sufficient to deal with these clean-

up costs. Thus, without recognition of a statutory remedy

of a private cause of action under section 107(a)(2), there

will be no effective remedy for the damage and injury

caused by the existence of asbestos in private structures.

Underlying the majority’s refusal to recognize section

107(a)(2) private actions in the context of asbestos

removal from private structures is the argument that

there is no case !aw to support the action. Given that this

is an issue of first impression in the circuits, and one not

at all settled among the district courts, this argument

carries little water. If recent cases are any example, nei-

ther the courts nor the litigants are clear about how to

sector is uncertain. Where exposure to friable asbestos has

caused personal injury, individual parties have been abie to sue

asbestos manufacturers under traditional tort theories. See, e.g.,

Beshada v. Johns-Manville Prods. Corp. 90 N.J. 191, 447 A.2d 539

(1982); Borel v. Fibreboard Paper Prods. Corp., 493 F.2d 1076 (5th

Cir.1973), cert. denied, 419 U.S. 869, 95 S.Ct. 127, 42 L.Ed.2d 107

(1974). But tort litigation for property damages and economic

loss due to asbestos installations is more problematic. Gener-

ally speaking, the problem of “rooting out the asbestos that is

now an unwelcome resident in thousands of structures

throughout the United States,” W. Rogers, Environmental Law:

Pesticides and Toxic Substances § 6.8, at 460 (1988), does not

fall within the classic tort parameters of culpable party and

innocent victim.

App. 30

proceed when private structure asbestos clean up issues

arise under CERCLA. Some of the cases are brought

under common law tort and property theories, using

CERCLA language as a guide to liability. See, e.g., First

United Methodist Church v. United States Gypsum Co., 882

F.2d 862 (4th Cir. 1989), cert. denied, US. ___,110S.Ct.

1113, 107 L.Ed.2d 1020 (1990); Elec. Power Bd. v. Westing-

house Elec. Corp., 716 F.Supp. 1069 (E.D.Tenn.1988). Others

merely announce a CERCLA private cause of action as

one of several claims against a potentially liable defen-

dant. See, e.g., Mercer Univ. v. Nat'l Gypsum Co., 258 Ga.

365, 368 S.E.2d 732 (1988).

Finally, the majority’s concern that a finding of pri-

vate liability under section 107(a)(2) would cause far-

reaching financial and practical problems is misplaced.

The extensive use of asbestos materials in commercial

properties has already had a “profound, continuing eco-

nomic impact on the real estate industry.” 19 Env’t Rep.

(BNA) 1154 (Oct. 7, 1988) (remarks of H.L. Van Varick,

executive vice president of the American Savings Bank of

New York City to Senate Environment and Public Works

Subcommittee on Hazardous Wastes and Toxic Subs-

tances). “Asbestos is a deal killer.” 19 Env’t Fep. (BNA)

1664 (Dec. 16, 1988) (remarks of Robert Andre of the

Seattle law firm of Ogden, Ogden, Murphy & Wallace).

Recognition of an effective, statutory remedy for dealing

with asbestos clean-up costs in private structures could at

least give the parties to a real estate transaction a tool for

apportioning clean up responsibilities.

I believe section 107(a)(2) creates a private cause of

action in certain situations for the recovery of clean up

costs of asbestos installed in the structure of private

App. 31

buildings. The issue whether 3550 Stevens Creek Associ-

ates has satisfied the requirements of the section and can

prevail in the private action should be remanded to the

district court.

App. 32

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

3550 STEVENS CREEK ) NO. C-87-20672-RPA

ASSOCIATES, a Limited )

Partnership, ) ORDER GRANTING

Plaintiff, DEFENDANT’S MOTION

‘ _) FOR JUDGMENT ON

VS. ) THE PLEADINGS

BARCLAYS BANK OF

CALIFORNIA, a California

banking corporation,

FILED SEP 28 1988

Defendant.

The Court has received, read, and considered defen-

dant’s motion for judgment on the pleadings, or, in the

alternative, motion for summary judgment, and the oppo-

sition thereto. The Court also heard the oral arguments

presented by counsel at the hearing held on September

16, 1988. GOOD CAUSE appearing therefor, the Court

finds and orders as follows.

Rule 12(c) of the Federal Rules of Civil Procedure

provides that any party may move for judgment on the

pleadings, but that, if on such motion, matters are pre-

sented outside the pleadings, then the motion shall be

treated as a motion for summary judgment. However, in

the instant case, it does not appear necessary to rely upon

matters outside of the pleadings. Therefore, the Court

shall treat this motion as a motion for judgment on the

pleadings, rather than as a motion for summary judg-

ment.

App. 33

Plaintiff has filed this action pursuant to 42 U.S.C.

§ 9607(a)(2)(B), which provides that a former owner or

operator of any facility at which hazardous substances

were disposed of is liable for necessary costs of response

incurred by another person, as long as such costs are

consistent with the national contingency plan.

There can be no dispute that asbestos is a hazardous

substance, covered under the provisions of the Compre-

hensive Environmental Response Compensation and Lia-

bility Act of 1980. Rather, the controversy in the present

case stems from the statutory language, “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 of,....” 42 U.S.C. § 9607(a}(2).

Defendant contends that it did not dispose of any

hazardous material. Rather, defendant owned a commer-

cial building which was composed of asbestos material,

which plaintiff chose to remove after purchasing the

building from defendant.

The subject building, located at 3550 Stevens Creek

Boulevard, was constructed in 1963 by First Valley Corpo-

ration. The building contained asbestos insulation, as

well as fire retardants. In 1969, Barclays Bank acquired

First Valley’s assets and First Valley Corporation was

dissolved in 1971. Barclays then acquired title to the

property, and sold said title to plaintiff in 1984.

From 1984 through 1986, plaintiff remodeled the

building, expending over $100,000.00 in removing

asbestos from the building. Plaintiff now seeks, pursuant

to CERCLA, the costs of this removal from defendant.

Defendant claims that it is not liable for the voluntary

App. 34

removal costs which plaintiff incurred, due to the fact

that defendant did not dispose of hazardous waste mate-

rial at the site.

Defendant is correct in asserting that the provisions

of CERCLA do not provide for the recovery of costs in

this situation. CERCLA was enacted to “provide a com-

prehensive response to the problem of hazardous sub-

stance release.” Wickland Oil Terminal v. Asarco, Inc., 792

F.2d 887, 890 (9th Cir. 1986). However, the statute does

not directly address the problem of removal of asbestos

from buildings. Section 9604 of the Act, which discusses

the responses to be taken by the President, does state,

The President shall not provide for a removal or

remedial action under this section in response to

a release or threat of release -

. (B) from products which are part of the

structure of, and result in exposure within, resi-

dential buildings or business or community

structures; .. .

Although this Section addresses only the actions

which the President shall and shali not take, rather than

the response which private parties may or may not take,

the Court finds that it is unlikely that Congress would

have intended to preclude the President from taking a

specific action, while allowing private parties to respond

by that precise action.

In any event, even assuming that Congress did

intend precisely such a result, that intent is not clear and

is not expressed in the statute. Accordingly, this Court is

not prepared to grant the plaintiff in the instant case

App. 35

relief pursuant to the provisions of CERCLA, when no

authority exists for the award of such relief.

Based upon the foregoing, the Court hereby GRANTS

defendant’s motion for judgment on the pleadings and

DISMISSES this action with prejudice.

IT IS SO ORDERED.

DATED: September 28, 1988

/s/ Robert P Aguilar

ROBERT P. AGUILAR

United States District Judge

App. 36

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

3550 STEVENS CREEK ) No. C 8720672 RPA

ASSOCIATES, a Limited )

Partnership, ) JUDGMENT

Rae )

Plaintiff, ) FILED OCT 17 1988

VS.

BARCLAYS BANK OF

CALIFORNIA, a California

Banking Corporation,

Defendant.

Defendant Barclays Bank of Califernia having moved

for Judgment on the Pleadings pursuant to Rule 12(c) and

Rule 56 of the Federal Rules of Civil Procedure, and the

said motion having come on for hearing before the Hon-

orable Robert P. Aguilar, United States District Judge, and

the Court thereafter on September 28, 1988, hal ing

handed down its opinion granting the said motion\and

dismissing this action with prejudice, it is,

ORDERED, ADJUDGED, AND DECREED, that the

complaint be and is hereby dismissed on all counts, and

that defendant recover its costs from plaintiff.

DATED: October 17, 1988

/s/ Robert P. Aguilar

Robert P. Aguilar

United States District Judge

App. 37

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

3550 STEVENS CREEK )

ASSOCIATES, a Limited ) No. 88-15503

aaa in ) D.C. No. CV-87-

Plaintiff-Appellant, ) 20672-RPA

V. ) ORDER

BARCLAYS BANK ; FILED NOV 29 1990

OF CALIFORNIA,

)

Defendant-Appellee. )

)

Before: FARRIS, PREGERSON and RYMER, Circuit

Judges

A majority of the panel has voted to deny the petition

for rehearing and to reject the suggestion for rehearing en

banc.

The full court has been advised of the suggestion for

en banc rehearing, and no judge of the court has

requested a vote on the suggestion for rehearing en banc.

Fed. R. App. P. 35(b).

The petition for rehearing is denied and the sugges-

tion for_rehearing en banc is rejected.

App. 38

BERNARD S. GREENFIELD

DAVID L. AINBENDER

LEVY, GREENFIELD & DAVIDOFF

80 South Market Street, Third Floor

[408] 995-5600

Attorneys for Plaintiff

3550 STEVENS CREEK ASSOCIATES

A Limited Partnership

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

No: ;

ASSOCIATES, A Limited ) COMPLAINT FOR

Partnership, ) DAMAGES PURSUANT

ate ) TO C.E.R.C.LA.

Plaintiff, ) [42 US.C. §9607];

vs. ) DECLARATORY RELIEF

BARCLAYS BANK OF ) rine TO

CALISORNIA, A Colievete ? ce cae

Banking Corporation, [42 U.S.C. §9613];

‘ Jury Trial Demanded

) FILED OCT 09 1987

Defendant.

JURISDICTION

1. This action arises under Title 42 of the United

States Code §§9607 and 9613. Jurisdiction and venue are

conferred on this Court under Title 28 of the United

States Code §§1331, 1343, and 1391(b), and 42 U.S.C.

§9613(b).

App. 39

PARTIES

2. Plaintiff 3550 STEVENS CREEK ASSOCIATES, a

limited partnership, is, and at all times relevant hereto

was, a California limited partnership, with its principal

place of business within this judicial district.

3. Defendant BARCLAYS BANK OF CALIFORNIA,

a California banking corporation (hereinafter “BAR-

CLAYS”), is, and at all times relevant hereto was, a Cali-

fornia banking corporation, duly licensed by the

California State Banking Department, with its principal

place of business in San Francisco, California.

GENERAL ALLEGATIONS

4. Plaintiff is informed and believes and thereon

alleges that at all relevant times alleged herein, First

Valley Bank was a California corporation, duly qualified

to transact business in California. Plaintiff is informed

and believes and thereon alleges that First Valley Bank at

all times relevant herein managed, operated, and owned

all of the stock of a wholly owned subsidiary corporation

known as First Valley Corporation, a California corpora-

tion.

5. Plaintiff is informed and believes and thereon

alleges that in or about 1963 and 1964, First Valley Corpo-

ration owned, managed, and completed the construction

of a certain office building located at 3550 Stevens Creek

Boulevard, San Jose, California. During the construction,

materials hazardous to human health in the form of

asbestos insulation and fire retardant materials, were

pumped, poured, injected, and otherwise installed into

App. 40

said structure by virtue of its being sprayed on steel

columns and floor supports throughout the building.

6. Plaintiff is informed and believes and thereon

alleges that in or about the latter half of 1969, pursuant to

an Agreement for Purchase and Sale of Assets dated May

27, 1969, Defendant BARCLAYS purchased the assets of

First Valley Bank, said assets including, but not limited

to, the entire shareholding of First Valley Bank in its

wholly owned subsidiary corporation, First Valley Corpo-

ration. A true and correct copy of said Agreement is

attached hereto as Exhibit “A”. Pursuant to and by the

terms of said Agreement, Plaintiff is further informed and

believes and thereon alleges that BARCLAYS expressly

and impliedly assumed all of the liabilities, obligations

and commitments of First Valley Bank. Plaintiff is further

informed and believes and thereon alleges that said lia-

bilities assumed include, but are not limited to, First

Valley Bank’s liabilities for the acts and omissions of its

wholly owned subsidiary, First Valley Corporation.

7. Plaintiff is informed and believes and thereon

alleges that sometime after the execution of said Agree-

ment, First Valley Bank changed its corporate name to

FVB Corporation, a California corporation, and thereafter

dissolved. On or about January 14, 1970, FVB Corporation

filed with the Office of the Secretary of State of the State

of California a “Certificate of Winding Up and Dissolu-

tion of FVB Corporation.”

8. On or about September 30, 1971, First Valley Cor-

poration, a Califorria corporation, filed with the Office of

the Secretary of State of the State of California a “Certifi-

cate of Winding Up and Dissolution of First Valley

App. 41

Corporation, a California Corporation.” Said document

provides, among other things, that all of the known assets

of First Valley Corporation have been distributed to its

shareholders. Plaintiff is informed and believes and

thereon alleges that at or about the time of the filing of

said Certificate, Defendant BARCLAYS was the sole

shareholder of First Valley Corporation, and that it

received all of the assets of First Valley Corporation,

thereby resulting in a merger, or de facto merger, of First

Valley Corporation into Defendant BARCLAYS. As a

result of said merger, or de facto merger, BARCLAYS

assumed all of the liabilities of First Valley Corporation.

9. Plaintiff is informed and believes and thereon

alleges that on or about October 1971, a transfer of title to

the real property and improvements thereon located at

3550 Stevens Creek Boulevard, San Jose, California, from

First Valley Corporation to BARCLAYS was recorded in

the County of Santa Clara. Plaintiff is further informed

and believes and thereon alleges that said transfer of

record title to BARCLAYS from First Valley Corporation

was incident to the dissolution of First Valley Corpora-

tion.

10. On or about April 11, 1984, Emo Biagini, and

Theodore J. Biagini, entered into a written contract for the

purchase of said building located at 3550 Stevens Creek

Boulevard, San Jose, California. A true and correct copy

of said written agreement is attached hereto as Exhibit

“B.” Thereafter, Emo Biagini and Theodore J. Biagini

assigned said written agreement to plaintiff, and said

individuals were, and are, general partners of the plain-

tiff. Subsequently, at the time of the close of escrow for

said transaction, on or about May 1, 1984, title to said

App. 42

building was transferred to plaintiff, 3550 STEVENS

CREEK ASSOCIATES, a limited partnership.

11. In or about the fall of 1984, and, thereafter, in or

about the summer of 1985, and the fall of 1986, plaintiff

undertook substantial expenditures and efforts to

respond (as defined in 42 U.S.C. §9601(25)) to the exis-

tence of the hazardous materials in the form of asbestos

which had previously been installed in the building dur-

ing its construction.

12. Such response costs were necessary and consis-

tent with the National Contingency Plan, and amounted

to a sum in excess of $100,000.00.

13. In addition to such response costs, plaintiff also

suffered damages in the approximate sum of $12,000.00.

As a direct and proximate result of the measures under-

taken by plaintiff in or about fall 1984 to respond to the

presence of the hazardous material in the form of

asbestos in the structure, plaintiff was unable to deliver

up timely possession to one of its tenants in the building,

resulting in a rental offset in the approximate sum of

$12,000.00.

FIRST CAUSE OF ACTION

[C.E.R.C.L.A. - 42 U.S.C. §9607]

14. Plaintiff hereby incorporates by reference as

though fully set forth herein paragraphs 1 through 13,

inclusive, of the Complaint.

15. As alleged herein, the response costs were nec-

essary and consistent with the National Contingency

Plan.

App. 43

16. Such response costs amounted to a sum in

excess of $100,000.00.

17. Asa result of the facts and transactions alleged

herein, BARCLAYS has become and is now liable to plain-

tiff under 42 U.S.C. §9607 for the necessary costs of

response incurred by it consistent with the National Con-

tingency Plan as alleged herein.

WHEREFORE, plaintiff prays for judgment as hereaf-

ter set forth.

SECOND CAUSE OF ACTION

[Declaratory Relief - 42 U.S.C. §9613]

18. Plaintiff hereby incorporates by reference as

though fully set forth herein paragraphs 1 through 13,

inclusive, and paragraphs 15 through 17, inclusive, of the

Complaint.

19. An actual controversy has arisen and now exists

between plaintiff and defendant BARCLAYS concerning

their respective rights and duties in that plaintiff con-

tends that defendant is liable for all response costs and

damages suffered by plaintiff, including future response

costs and damages, whereas defendant BARCLAYS main-

tains that it is not so liable for either previously incurred

response costs or response costs to be incurred by plain-

tiff in the future.

20. Plaintiff desires a judicial determination of its

rights and duties, and a declaration that defendant is

liable for all response costs and damages suffered by

plaintiff, such declaratory judgment to be binding in any

App. 44

subseanent action or actions against defendant to recover

further response costs or damages.

21. A judicial declaration is necessary and appropri-

ate at this time in order that plaintiff may ascertain its

rights and duties with respect to responding to the exis-

tence and threat of the hazardous materials in the form of

asbestos currently in the building, so that it may, among

other things, take appropriate action to respond in the

future thereto; and, is further required by 42 U.S.C.

§9613(g)(2).

WHEREFORE, plaintiff prays for judgment against

defendant as follows:

1. For damages in an amount in excess of

$100,000.00, and as according to proof representing the

response costs incurred by plaintiff as alleged herein;

2. For a judicial declaration that defendant is liable

to plaintiff for all response costs previously incurred by

plaintiff, and all response costs to be incurred by plaintiff,

with respect to the subject property;

3. For costs of suit incurred herein; and

4. For such other and further relief that the Court

may deem proper.

Dated: October 9, 1987.

Levy, Greenfield & Davidoff

By BERNARD S. GREENFIELD

BERNARD S. GREENFIELD

Attorneys for Plaintiff

3550 STEVENS CREEK ASSOCIATES

[Exhibits omitted]

App. 45

J. MORROW OTIS

PAUL R. KENNEY

JEREMY W. KATZ

JORDAN, KEELER & SELIGMAN

One Maritime Plaza

1400 Alcoa Building

San Francisco, California 94111

(415) 397-4600

Attorneys for Defendant

BARCLAYS BANK OF CALIFORNIA

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

3550 STEVENS CREEK NO. C 87 20672 RPA

ASSOCIATES, ANSWER OF

A Limited Partnership, DEFENDANT BARCLAYS

Plaintiff BANK OF CALIFORNIA

TO COMPLAINT FOR

DAMAGES PURSUANT

TO C.E.R.C.L.A. AND FOR

DECLARATORY RELIEF

BARCLAYS BANK OF

CALIFORNIA,

A California Banking ot TO

Corporation, ELK. ; ; 7

Defendant. Jury Trial Demanded

ee ee ee ee

Defendant Barclays Bank of California (“Barclays”)

answers plaintiff's Complaint as follows:

JURISDICTION AND VENUE

1. Answering paragraph 1, Barclays admits that

jurisdiction and venue are conferred on this court under

28 U.S.C. §§ 1331 and 1391(b), and 42 US.C. § 613(b).

App. 46

Except as expressly admitted herein Barclays lacks infor-

mation or belief sufficient to enable it to answer the

allegations contained therein, and therefore denies gener-

ally and specifically each and every allegation contained

therein.

PARTIES

2. Answering paragraph 2, Barclays lacks informa-

tion or belief sufficient to enable it to answer the allega-

tions contained therein, and therefore denies generally

and specifically each and every allegation contained

therein.

3. Answering paragraph 3, Barclays admits that it is

a California banking corporation, duly licensed by the

California State Banking Department, with its principal

place of business in San Francisco, California. Except as

expressly admitted, Barclays lacks information or belief

sufficient to enable it to answer the allegations contained

therein and therefore denies generally and specifically

each and every allegation contained therein.

GENERAL ALLEGATIONS

4. Answering paragraph 4, Barclays admits that

First Valley Bank was a California Corporation duly qual-

ified to transact business in California. Barclays further

admits that First Valley Corporation, a California Corpo-

ration, was a wholly owned subsidiary corporation of

First Valley Bank. Except as expressly admitted, Barclays

lacks information or belief to enable it to answer the

App. 47

allegations contained therein and therefore denies gener-

ally and specifically each and every allegation contained

therein.

5. Answering paragraph 5, Barclays lacks informa-

tion or belief sufficient to enable it to answer the allega-

tions contained therein, and therefore denies generally

and specifically each and every allegation contained

therein.

6. Answering paragraph 6, Barclays admits that it

purchased certain of the assets of First Valley Bank and

that it entered into an Agreement for Purchase and Sale

of Assets in substantially the form attached to the Com-

plaint as Exhibit “A” incident to said purchase. Barclays

further admits that it assumed certain, but not all, of First

Valley Bank’s tiabilities in connection with said purchase.

Except as expressly admitted, Barclays lacks information

or belief sufficient to enable it to answer the allegations

contained therein and therefore denies generally and spe-

cifically each and every allegation contained therein.

7. Answering paragraph 7, Barclays admits that

First Valley Bank changed its corporate name to FVB

Corporation, a California corporation, and thereafter dis-

solved. Barclays further admits that on or about January

14, 1970, FYB Corporation filed with the Office of the

Secretary of State of the State of California a “Certificate

of Winding Up and Dissolution of FVB Corporation.”

8. Answering paragraph 8, Barclays admits that on

or about September 30, 1971, First Valley Corporation, a

California corporation, filed with the Office of the Secre-

tary of State of the State of California, a “Certificate of

Winding Up and Dissolution of First Valley Corporation,

App. 48

a California Corporation.” Barclays further admits that

the document states that all of the known assets of First

Valley Corporation have been distributed to the share-

holders. Except as expressly admitted, Barclays lacks

information or belief sufficient to enable it to answer the

allegations contained therein and therefore denies gener-

ally and specifically each and every allegation contained

therein, and Barclays specifically denies that any merger

or de facto merger ever occurred between Barclays and

First Valley Corporation.

9. Answering paragraph 9, Barclays lacks informa-

tion or belief sufficient to enable it to answer the allega-

tions contained therein and therefore denies generally

and specifically each and every allegation contained

therein.

10. Answering paragraph 10, Barclays admits that

Emo Biagini and Theodore I. Biagini executed a written

contract in substantially the form attached to the Com-

plaint as Exhibit “B” for the vurchase of the property

known as 3550 Stevens Creek Boulevard, San Jose, Cali-

fornia. Except as expressly admitted, Barclays lacks infor-

mation or belief sufficient to enable it to answer the

allegations contained therein and therefore denies gener-

ally and specifically each and every allegation contained

therein.

11. Answering paragraph 11, Barclays denies that

any alleged expenditures or efforts of plaintiff are a

“response” within the meaning of 42 U.S.C. § 9601(25).

Barclays lacks information or belief sufficient to enable it

to answer the other allegations contained therein and

App. 49

therefore denies generally and specifically each and every

such allegation.

12. Answering paragraph 12, Barclays denies gener-

ally and specifically each and every allegation contained

therein.

13. Answering paragraph 13, Barclays lacks infor-

mation or belief sufficient to enable it to answer the

allegations contained therein and therefore denies gener-

ally and specifically each and every allegation contained

therein. Further, Barclays specifically denies that plaintiff

suffered damages in the approximate sum of $12,000.00,

or in any sum, or at all.

FIRST CAUSE OF ACTION

[C.E.R.C.L.A. - 42 U.S.C. § 9607]

14. Answering paragraph 14, Barclays refers to and

by such reference incorporates as if fully set forth herein

its previous responses to each of the paragraphs referred

to in paragraph 14 of plaintiff's Complaint.

15. Answering paragraph 15, Barclays denies gener-

ally and specifically each and every allegation contained

therein.

16. Answering paragraph 16, Barclays lacks infor-

mation or belief sufficient to enable it to answer the

allegations contained therein, and therefore denies gener-

ally and specifically each and every allegation contained

therein.

17. Answering paragraph 17, Barclays denies gener-

ally and specifically each and every allegation contained

therein.

App. 50

SECOND CAUSE OF ACTION

[Declaratory Relief - 42 U.S.C. § 9613]

18. Answering paragraph 18, Barclays refers to and

by such reference incorporates as though fully set forth

herein its previous responses to each of the paragraphs

referred to in paragraph 18 of plaintiff's Complaint.

19. Answering paragraph 19, Barclays admits that

an actual controversy has arisen and now exists between

plaintiff and Barclays concerning their respective rights

and duties. Barclays further admits that it contends that it

is not liable for any response costs or damages incurred

or to be incurred by plaintiff. Except as expressly admit-

ted, Barclays lacks information or belief sufficient to

enable it to answer the allegation contained therein and

therefore denies generally and specifically each and every

allegation contained therein.

20. Answering paragraph 20, Barclays lacks infor-

mation or belief sufficient to enable it to answer the

aliegations contained therein and therefore denies gener-

ally and specifically each and every allegation contained

therein.

21. Answering paragraph 21, Barclays denies gener-

ally and specifically each and every allegation contained

therein.

FIRST AFFIRMATIVE DEFENSE

(FAILURE TO STATE A CLAIM FOR RELIEF)

22. Plaintiff’s Complaint and each of the alleged

claims for relief therein, fails to state a claim upon which

relief may be granted.

App. 51

SECOND AFFIRMATIVE DEFENSE

(STATUTE OF LIMITATIONS)

23. Plaintiff's Complaint, and each and every claim

for relief stated therein, is barred by the appropriate

Statute of Limitations, to-wit, 42 U.S.C. § 9613(g)(2).

THIRD AFFIRMATIVE DEFENSE

(ESTOPPEL)

24. Plaintiff is precluded from asserting the within

claims for relief against Barclays in that plaintiff’s claims

for relief are barred by the doctrine of estoppel.

FOURTH AFFIRMATIVE DEFENSE

(ACTS OR OMISSIONS OF THIRD PARTIES)

25. Plaintiff is precluded from asserting the within

claims for relief against Barclays in that the acts or omis-

sions complained of by plaintiff were in fact acts or

omissions of third parties other than employees or agents

of Barclays, and which acts or omissions did not occur in

connection with any contractual relationship existing

directly or indirectly with Barclays.

FIFTH AFFIRMATIVE DEFENSE

(UNCLEAN HANDS)

26. Some or all of plaintiff's claims for relief are

barred by the doctrine of unclean hands.

SIXTH AFFIRMATIVE DEFENSE

(APPORTIONMENT OF LIABILITY)

27. if Barclays is liable for response costs under 42

U.S.C. § 9607(a) then plaintiff is also liable for such costs,

;

App. 52

and the parties’ respective liability must be apportioned

between the parties using such equitable factors as the

Court determines to be appropriate and any recovery

should be reduced according to such apportionment.

WHEREFORE, Barclays prays as follows:

1. That plaintiff take nothing by its complaint

herein and that the same be dismissed with prejudice;

2. That judgment be entered in favor of Barclays,

with costs of suit, including reasonable attorney fees; and

iat the Court award such further relief as it

deems just and proper.

Dated: November 23, 1987

JORDAN, KEELER & SELIGMAN

J. MORROW OTIS

PAUL R. KENNEY

JEREMY W. KATZ

By /s/ Jeremy W. Katz

Jeremy W. Katz

Attorneys for Defendant

Barclays Bank of

California

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.