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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1991
- **Citation:** 500 U.S. 917

## Text

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

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3550 STEVENS CREEK ASSOCIATES,

Petitioner,

BARCLAYS BANK OF CALIFORNIA,
Respondent.

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Petition For A Writ Of Certiorari
To The United States Court Of
Appeals For The Ninth Circuit

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PETITION FOR A WRIT OF CERTIORARI

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4

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 ...........

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...........

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 .........

9

iv

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)

Petition For A Writ Of Certiorari
To The United States Court Of
Appeals For The Ninth Circuit

+

PETITION FOR A WRIT OF CERTIORARI
+o

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

2

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.

3
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

5

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

6

‘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).

7

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

8

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

9

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.

10

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)

11

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.

12

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

13

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

14

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.”

15

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

16

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

17

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.

18
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.

I

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.

II

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;

(C) damages for injury to, destruction of, or
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).®

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”).

© See First United Methodist Church v. United States Gypsum
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

B

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

© Recovery for damages caused by asbestos in the private
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

6

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
San Jose, CA 95113 ©

[408] 995-5600

Attorneys for Plaintiff
3550 STEVENS CREEK ASSOCIATES
A Limited Partnership
UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

No: ;
3550 STEVENS CREEK ) © ©®” 20672 RPA
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

v.
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

i

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

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385009_1726%3A1. Public record. Not legal advice.