# Joint Appendix — Key Tronic Corp. v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Joint Appendix
- **Published:** January 1, 1994
- **Citation:** 511 U.S. 809

## Text

No. 93-376

In the
Supreme Court of the United States

October Term, 1993

KEY TRONIC CORPORATION,
Petitioners,
Vv.
UNITEDSTATES, ETAL.,
Respondents.

ON A WRIT OF CERTIORARI TO
THE COURT OF APPEALS
FOR THE NINTH CIRCUIT

JOINT APPENDIX

James R. Moore

Drew S. Days, Iil

(Counsel of Record) (Solicitor General)

Mark W. Schneider Department of Justice
Michael Himes Washington, D.C. 20530
PERKINS COIE (202)514-2217

1201 Third Avenue Counsel for Respondents

Seattle, WA 98101-3099
(206) 583-8888
Counsel for Petitioner

Petition for Writ Of Certiorari Filed September 3, 1993

Certiorari Granted December 13, 1993

JOINT APPENDIX
TABLE OF CONTENTS

Relevant District Court Docket Entries
Relevant Circuit Court Docket Entries
Affidavit of David L. Powers, filed June 25, 1990

August 9, 1990 Order re Motions for Summary
Judgment, filed August 9, 1990

Supplemental Declaration of David L. Powers, filed
February 6, 1991

Stipulation between Key Tronic and United States,
filed June 21, 1991

Order Granting Petition for Certiorari

7 The following opinions have been omitted in printing this
joint appendix because they appear on the following pages in
the appendix to the printed Petition for Certiorari:

Opinion of the United States District Court for the

Eastern District of Washington, dated March 19, 1991, as
amended August 12, 1991 B-1

Opinion of the United States Court of Appeals for the
Ninth Circuit, dated January 28, 1993 A-1

. Order of the United States Court of Appeals for the Ninth
Circuit Denying Petition for Rehearing, and Suggestion for
Rehearing En Banc, entered June 7, 1993 E-1

2

RELEVANT DISTRICT COURT
DOCKET ENTRIES—-KEY TRONIC
CORPORATION v. UNITED STATES,
ET AL., NO. 89-CV-694 (E.D. Wa.)

DocketNo. Description

l. COMPLAINT (Summons(es) issued) (sw)[Entry date

10/17/89]

9. ANSWER by defendant USA, defendant USAF (dg)
[Entry date 12/21/89]

22. MOTION by USA to dismiss (Im)

44 Statement of material facts by plaintiff Key Tronic Corp
in support of Key Tronic’s Opposition to Defendant
Schmidt's Motion for Summary Judgment

67. ORDER Re: Motions for Summary Judgment, Inter Alia

by Chief Judge Justin L. Quackenbush (pitf’'s Second,
Third & Fourth Claims for Relief are DISMISSED
WITH PREJUDICE against defts U.S., the Air Force
and Rice; the First Claim for Relief is DISMISSED
WITH PREJUDICE against these defts w/respect to any
costs or obligation incurred by pitf pursuant to the
Consent Decree entered in DOE and EPA v. County of
Spokane And Key Tronic Corp., C-89-033-RJM; these
defts motion to dismiss the First Claim for Relief is
DENIED w/ respect to pitf’s action to recover private
response costs under 42 U.S.C. 9607; the Complaint and
all Claims therein against deft William Schmidt are
DISMISSED WITH PREJUDICE; Key Tronic’s motion
for partial summary judgment is GRANTED IN PART
and DENIED IN PART; the Court grants summary
judgment establishing the liability of the Air Force
under 42 U.S.C. 9607; in all other respects, Key
Tronic’s

92.

115.

125.

134.
137.

138.

3

motion for partial summary judgment is denied; Key 140.

Tronic’s motion to compel discovery from the Air Force
is granted; the Air Force’s motion for a protective order
is DENIED) (cc: all counsel) COB-101-10 (Im)

CONSENT DECREE by Chief Judge Justin L. 146.

Quackenbush (resolving USA’s liability to Key Tronic
for certain claims; USA shall pay to Key Tronic
$185,000.00; see decree for other claims still disputed)
(cc: all counsel) COB- 103-78 (sw)

MOTION by plaintiff Key Tronic Corp for partial
summary judgment that response costs are recoverable
(sw)

USA’s opposition to motion for partial summary
judgment that response costs are recoverable and ‘
supplemental motion to dismiss (sw) :

ORDER re: Pitf’'s Motions for Summary Judgment by
Chief Judge Justin L. Quackenbush (denying motion to
stay as moot [1 13-1]; granting motion for enlargement
of time [107-1]; denying as moot motion for partial
summary judgment that Alumax is a “covered person”
[103-1]; denying as moot motion for partial summary
judgment re contribution claim against Alumax [99-1 };
granting motion for partial summary judgment that
response costs are recoverable [94-1]: Case mgmt ddl set
4/18/91 parties to submit stipulation as to damages
within 30 days of entry of this order) 9cc: all counsel)
(sw)

Stipulation (lm)

ORDER of Final Judgment by Chief Judge Justin L.
Quackenbush (granting motion for entry of final
judgment [135-1]; the Clerk of the Court is directed to
enter a judgment against the United States, the United
States Air Force and Donald B. Rice in favor of Key
Tronic in the amount of $155,500.00) (cc: all counse})
COB-106-23 (im)

JUDGMENT (cc: all counsel!) COB- 106-24 (Im)

4

NOTICE OF APPEAL by defendant Donald B. Rice,
defendant USAF, defendant USA from Dist. Court
decision [137-1] (cc: all counsel and 9CCA) (lan) [Entry
date 09/10/91}

Mandate (CCA: 91-36021] from 9CCA (It is now here
Ordered & adjudged by this Crt, that the judgment of the
said District court in this cause be and hereby is
REVERSED; ) [140-1] (cc: all counsel) (vr)

Docketing
Date

9/24/91

10/1/92

10/13/92

11/2/92

5
RELEVANT CIRCUIT COURT

DOCKET ENTRIES—KEY TRONIC
CORPORATION v. UNITED STATES,

ET AL, NINTH CIRCUIT
NO. 91-36021

Description

DOCKETED CAUSE AND ENTERED
APPEARANCES OF COUNSEL. Sent
appellant(s) civil appeals docketing
statement, setting schedule as follows: CADS
due 10/8/91 for Eileen T. McDonough;
appellant’s designation of RT is due 9/9/91, ,;
appellee’s designation of RT is due 9/18/91;
appellant shall order transcript by 9/30/91, ,;
court reporter shall file transcript in DC by
10/29/91; certificate of record shall be filed
by 11/5/91; appellant’s opening brief is due
12/16/91,,; appellees’ briefis due 1/14/92;
appellants’ reply briefis due 1/28/92, ,; [91-
36021] (rv)

CALENDARED: San Francisco 1 1/2/92 1:30
p.m. Courtroom 2 [91-3602 1] (dd)

Filed, as of 1/13/92, certified record on
appeal in 10 Vols. (total); 10 Clerks Rec, 0
RTs (ORIGINAL) [91-36021] [91-3602] |

(mag)

ARGUED AND SUBMITTED TO Joseph T.
SNEED, ArthurL. ALARCON, William C.
CANBY [91-36021] (ch)

1/28/93

2/11/93

6/7/93

6/15/93

9/17/93

12/20/93

6

FILE OPINION: REVERSED (Terminated
on the Merits after Oral Hearing; Reversed;
Written, Signed, Published. Joseph T.
SNEED; Arthur L. ALARCON, author;
William C. CANBY, dissenting.) FILED
AND ENTERED JUDGMENT. [91-36021]
(ck)

Filed original and 40 copies Appellee Key
Tronic Corp petition for rehearing with
suggestion for rehearing banc 8 p. pages,
served on 2/10/93 (PANEL AND ALL
ACTIVE JUDGES) [91-36021] (sf)

Filed order (Joseph T. SNEED, Arthur L.
ALARCON, William C.CANBY,): The
petition for rhrg is denied & the suggestion
for en banc rhrg is rejected. [91-3602 1] (mhf)

MANDATE ISSUED [91-36021 ] (sf)

Received notice from Supreme Court:
petition for certiorari filed Supreme Court
No. 93-376 filed on 9/7/93. [91-3602 1] (sf)

Filed Supreme Court order (SC Date:
12/13/93) granting certiorari petition to
(PANEL). [2429836-1] [91-36021] (jr)

7

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF

WASHINGTON

KEY TRONIC CORPORATION,

a Washington corporation, NO. C-89-694-JLQ
Plaintiff. AFFIDAVIT OF DAVID

L.POWERS
v.

UNITED STATES OF AMERICA;

THE UNITED STATES AIR

FORCE; DONALDB. RICE, THE

SECRETARY OF THE UNITED

STATES AIR FORCE, inhis
individual capacity; ALUMAX,
INC., a Delaware corporation;
ALUMAX FABRICATED
PRODUCTS, INC., a Delaware
corporation; and WILLIAM
SCHMIDT, an individual,

Defendants.

STATE OF WASHINGTON )

)ss.
COUNTY OF SPOKANE )

DAVIDL. POWERS, being first duly sworn, upon
oath, deposes and says:

1. Iam the Vice President, General Counsel and
Secretary of Key Tronic Corporation. I have held that
position since July 19, 1988. From August 5, 1987 until Jul
18,1988, 1 held the position of General Counsel and :
Secretary. Prior to that time, I held the position of Acting

General Counsel and Assistant Secretary. I have been
responsible for implementing and supervising the potentially
responsible party (“PRP”) search regarding the Colbert
Landfill and negotiating the consent decree.

2. Key Tronic acknowledged that it had taken waste
solvents and other waste chemicals to Colbert Landfill
whenever asked about that issue by county or state officials
over the years. A good example is the survey conducted by
Damon Taam of the county in early 1980, the results of
which are set forth in the letter of June 4, 1980, attached as
Exhibit A to this affidavit. However, other entities that
landfilled chemicals at Colbert Landfill were not, and have
not been, as forthcoming. When it became clear in 1986 that
potential Superfund liability for cleaning up the landfill and
groundwater contaminated by it would be extraordinarily
expensive, Key Tronic began an effort to identify other
entities that contributed to the problem.

3. | With the assistance of the Popham Haik law firm
from Minneapolis, local counsel, Goss, Moe & Sampson, and
A&A Properties, an investigation of potentially responsible
parties wasbegunin__ of 1986. This involved
undertaking numerous witness interviews, filing contribution
lawsuits against various entities believed to have landfilled
chemical wastes at Colbert, and conducting discovery to
determine the extent of responsibility of these entities. The
PRP investigative costs associated with these activities
during 1986 and 1987 were $121,589.36 for Popham Haik
and $9,464.52 for Goss, Moe & Sampson. These costs are
summarized on Exhibit B. Key Tronic does not seek, in this
motion, to recover the fees paid to A&A Properties.

4. Inlate 19861 was promoted to the position of
Acting General Counsel and Assistant Secretary for Key
Tronic. Thereafter, I made the decision to employ the Perkins
Coie law firm and new local counsel, MacGillivray & Jones,
to continue the PRP investigative effort. After familiarizing
themselves with the evidence already gathered, and

9

conducting additional witness interviews, the investigation
was narrowed to several PRPs, including Fairchild Air Force
Base, Alumax and its predecessor companies, William
Schmidt, and several additional private entities (United Paint
which was in bankruptcy, Husky Oil, and Williams
Trucking). The investigation continued via both the
discovery process in the pending state and federal landowner
contribution cases (depositions and document production
from the Air Force and Alumax) and witness interviews
conducted by Perkins Coie lawyers and Robert Bailor, a
private investigator.

>

5. ThePRP investigative fees and costs associated
with the Perkins Coie effort are estimated to have been
$62,492.18. These were estimated by Perkins Coie based
upon a breakout of PRP investigation fees and expenses from
other fees and expenses relating solely to other matters. The
fees and expenses for Robert Bailor were $2,462.21. These
costs are summarized on Exhibit B. Key Tronic does not
seek, in this motion, to receive fees paid to McGillivray &
Jones.

6. In1988, the information developed through this
investigation was shared with US EPA. As aresult, EPA
issued Superfund notice letters to the Air Force and
Alumax—something it had declined to do prior to 1988.

7. During 1987 and 1988, Perkins Coie was also
retained to represent Key Tronic in negotiating a settlement
of the potential Colbert Superfund cleanup case anticipated
to be brought by EPA and DOE to accomplish a final
remedial action at the site. Assisting in that effort on
technical issues were, first, the engineering firm of Dames
and Moore, and later the firm of Landau Associates, Inc.
Landau Associates, Inc. reviewed the reports of EPA and
DOE, conducted independent analyses, evaluated the
efficiency of the proposed remedy, and met with EPA and
DOE officials. The negotiation process culminated in the
Consent Decree executed in 1988, by EPA, DOE, Key

TA —

10

Tronic, and Spokane County. The Air Force participated in
those discussions but concluded its settlement with EPA ina
separate Interagency Agreement finalized in February 1990.

8. The fees and expenses associated with the Perkins
Coie effort with respect to settlement of the case with EPA
and DOE are estimated to have been $160,641.23. These
were estimated by Perkins Coie based upona breakout of
settlement-related fees and expenses from other fees and
expenses relating solely to other matters. The fees and
expenses for Dames and Moore amounted to $22,323.09.
The fees and expenses for Landau Associates amounted to
$126,270.53. These costs are summarized on Exhibit B.

9. Key Tronic has paid $1.3 million to date pursuant
to the Consent Decree. Key Tronic is obligated to pay a total
of $4.2 million under the Consent Decree.

10. Asthecompany executive supervising the PRP
search and negotiation of the Consent Decree I spent
approximately 70% of my professional time from the fall of
1986 to July 1988 and 40% of my professional time from
July 1988 to February 1989 on these and related matters. My
salary in the fall of 1986 was $2710.00 per month. Change of

salary:

1/11/87 -$2940.00 per mo.
4/16/87 -$3195.00 permo.
7/12/87 -$3465.00 per mo.
10/18/87 -$3810.00 per mo.
1/10/88 -$4377.00 per mo.
4/03/88 -$4814.70permo.
6/26/88 -$5296.17 permo.

11. Allofthe above-referenced costs are summarized
on Exhibit B. The underlying cost records have been
maintained and are available for review.

ll

12. Allofthese costs were paid for by Key Tronic.
None of these costs were incurred or paid by the federal
government, EPA or USAF.

13. Thestate, through Carol Thompson, Carol
Kraege, Mike Blum, and Fred Gardner of DOE, and federal
government, through Neil Thompson of EPA, were advised
of Key Tronic’s efforts described above.

14. The public was informed ofand involved in the
response actions undertaken by Key Tronic through various
public meetings held in the Colbert community, in Spokane
at the Washington State Department of Social and Health
Services, inthe County Courthouse’s Commissioners’ public
meeting rooms, through the newspaper and TV media,
newsletters, and through the regularly scheduled Colbert
Cleanup Committee meetings.

15. Theresponse actions described above were cost
effective.

16. Thedefendants were advised of Key Tronic’s
actions and were asked to participate through legal counsel.

/s/

David L. Powers

SUBSCRIBED ANDSWORN tobeforemethis __
day of June, 1990.

Betty A. Traband /s/

NOTARY PUBLIC inand for the State of
Washington, residing at Spokane

My Commission Expires: March 15, 1994

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12

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF

WASHINGTON
KEY TRONIC
CORPORATION, NO. C-89-694-JLQ
a Washington corporation,
ORDER RE: MOTIONS FOR
Plaintiff, SUMMARY JUDGMENT, INTER
ALIA
Vv.
UNITED STATES OF i
AMERICA;
etal.,
Defendants.

On Friday, July 20, 1990, the Court heard oral
argument of the motions discussed below. Kathryn L. Tucker
and Mark W. Schneider represented plaintiff Key Tronic
Corporation. Eileen McDonough appeared on behalf of the
defendants United States, United States Air Force and
Donald B. Rice. Dennis Smith was present for defendant
William Schmidt, and Leslie C. Nellermoe represented
defendants Alumax, Inc. and Alumax Fabricated Products,
Inc. This Order sets forth in formal manner the court’s oral
rulings on the various motions.

I. Factual Background:'

From 1968 to 1986 Spokane County maintained the
Colbert Disposal Site (“Colbert”) in Spokane County,

|“Facts” set forth as background information are either undisputed or are
immaterial to resolution of the various motions before the Court. Where
pertinent, the parties’ specific factual contentions are discussed below.

13

Washington. From the early 1970’s through 1980, the
County contracted to have defendant William Schmidt do the
work necessary to construct, improve and complete the
landfill. In that capacity, Schmidt accepted and disposed of
refuse at Colbert. Key Tronic alleges that between 1975 and
1980, Schmidt accepted liquid chemicals from the United
States Air Force (“USAF”); Alumax Fabricated Products,
Inc. and Alumax Mill Products, Inc. (hereafter collectively
“Alumax”); and Key Tronic Corporation. This Court has
previously found that the USAF disposed of hazardous
chemicals at Colbert.?

In 1980, drinking water wells around Colbert were
found to be contaminated by various chemicals, including
“TCA.” Key Tronic alleges that it incurred, at its own
initiative, expenses totaling $1 ,271,511.10 responding to that
discovery.’

The Washington Department of Ecology (“DOE”) and
the United States Environmental Protection Agency (“EPA”)
also responded to the Colbert situation. These events
culminated in the simultaneous entry of a Complaint and
Consent Decree in DOE and EPA v. County of Spokane and

2See, Key Tronic v. United States, C-87-20-JLQ(E.D. Wa.), transcript
dated November 7, 1989; Ex. | to Plaintiffs Motion for Partial Summary
Judgment (“Plaintiff's Motion”), p. 3.

3$pecifically, Key Tronic alleges that it spent:
1. $115,788.07 investigating the extent and level of contamination;

2. $580,479.99 to provide temporary and then permanent alternative
sources of drinking water to residents of the contaminated area;

3. $196,008.27 in order to locate other entities that disposed of hazardous
waste at Colbert;

4. $70,000.00 in the opportunity cost of Key Tronic’s executive's time;
and

5. $309 234.85 onconsultation and attorneys’ fees to negotiate the
Consent Decree and Scope of Work and to comment on the Remedial
Investigation and Feasibility Study.

r PT ee ee

é
,
4

14

Key Tronic Corp. , C-89-033-RJM(E.D. WA), on January 9,
1989. In the Consent Decree, Spokane county agreed to
implement and finance a final remedial action plan, which
Key Tronic agreed to help fund in the amount of $4.2
million.‘

Concurrent with the entry of the Consent Decree, the
EPA entered an Administrative Order on Consent and
Interagency Agreement (“Order/Agreement”) with the
USAF .5 The Order/Agreement was issued as an “Expedited
Final Settlement” under 42 U.S.C. § 9622, which permits the
EPA to enter into an agreement with potential responsible
parties (“PRPs”) whose proportional contribution to a release
of hazardous substances is deemed by the EPA to have been
de minimis in terms of quantity and relative toxicity. 42
U.S.C. §9622(g)(1 (A). Under the Order/Agreement, the
USAF agreed to pay $1.45 million to the Colbert clean-up
fund. In return, the EPA released the USAF from further
liability. Additionally, the EPA granted the USAF the
“contribution protection” authorized by 42 U.S.C.

§ 9622(g)(5).

In October 1989 Key Tronic filed the instant action.
The Complaint alleges that the USAF, Alumax and Schmidt
are liable to Key Tronic for a portion of the costs Key Tronic

4s discussed below, the Consent Decree also provides that “EPA,
Spokane County and Key Tronic hereby covenant not to sue each other as to all
matters alleged or which could have been alleged in the Complaint with regard to
the Site, ...” The covenant not to sue applies “only to Spokane County and Key
Tronic, including its respective divisions, officials, officers, directors, principals,
agents, servants, employees, successors, and assigns, and not any parent
corporation, subsidiaries and affiliates of the County and Key Tronic.” Ex. 17 to
Plaintiff s Statement of Facts, pp. 55-56.

5See Ex. A. to United States’ Motion to Dismiss.

15

incurred in the Colbert clean-up.® Specifically, the Complaint
alleges that defendants are liable to Key Tronic under three
causes of action:

l. The First Claim for Relief requests damages
under 42 U.S.C. § 9607(a)(4)(B), which
establishes a private right of action against
responsible parties for “any other necessary
costs of response incurred by any other person
consistent with the national contingency
plan”;

2. The Second Claim for Relief seeks
contribution under 42 U.S.C. § 9613(f(1),
which provides that: “[a]ny person may seek
contribution from any other person who is
liable or potentially liable under [42 U.S.C.

§ 9607] during or following any civil action
under [42 U.S.C. §§ 9606 or 9607)”; and

3. The Third Claim for Relief seeks contribution
under Washington law; RCW 4.22.040
(contribution among parties jointly and
severally liable) and RCW 70.105C.040 (joint
and several liability among parties liable fora
hazardous release).

Finally, the Fourth Claim for Relief seeks a declaratory
judgment that defendants are liable for future costs incurred
by Key Tronic in responding to the Colbert release.

The Court shall address the parties’ various motions in
the order in which they were presented.

As discussed above, Key Tronic alleges that it incurred response costs in
two different ways. First, Key Tronic spent $1.2 million in its initial private
response to the release. Second, Key Tronic obligated itself to contribute
$4.2 million to the clean-up trust fund established by the EPA.

oo eee ee oe? OR ee hae

16

Il. The United States’ Motion to Dismiss

The United States, the USAF, and Rice (hereafter
collectively “the USAF”) move for dismissal under the
“contribution protection” provision of 42 U.S.C. § 622(g)(5).

42 U.S.C. §622(g)(1) authorizes the EPA to enter de
minimis settlements with a PRP where the EPA finds both
that (1) the amount of hazardous substances contributed to a
site by the PRP; and (2) the toxic effects of those substances,
are minimal relative to the other hazardous substances at the
site. 42 U.S.C. §622(g)(5) provides: “A party who has
resolved its liability to the United States under this
subsection shall not be liable for claims for contribution
regarding matters addressed in the settlement.” The USAF
notes that the Order/Agreement includes the required
findings, and specifically provides the following contribution

protection:

Subject to the “Reservation of Rights...
of this Consent Order and Agreement, [EPA]
agrees that by entering into and carrying out
the terms of this Consent Order and
Agreement, the Respondent Air Force will
have completely resolved its liability to the
United States of America for Covered Matters
pursuantto...42U.S.C. 9622(g)(5), and
shall not be liable for claims for contribution
for Covered Matters by any other person.

(Order/Agreement, p. 14.)

The Order/Agreement defines “Covered Matters” to
“include any and all civil liability for reimbursement of
response costs or for injunctive relief pursuant to...

42 U.S.C. 9606 or 9607(a), or. ..42 U.S.C. §6973, with
regard to the Site.”

17

The USAF argues that Key Tronic’s claim for
contribution under 42 U.S.C. § 9613(f) is expressly
prohibited by section 9622(g). Additionally , the USAF
argues that Key Tronic’s claim for response costs under
section 9607 is similarly barred by implication, because the
claim is in reality nothing more than an attempt to obtain
contribution under a different guise.

In response to the USAF’s motion to dismiss, Key
Tronic concedes that section 9622(g) prohibits its claim to
recover any portion of the $4.2 million Consent Decree
obligation, under 42 U.S.C. § 9613(f) (contribution), or
42 U.S.C § 9607(a)(4)(B) (private response cost recovery).
Therefore, Key Tronic’s claims against the USAF should
be dismissed with prejudice with respect to the
$4.2 million Key Tronic must pay pursuant to the
Consent Decree.

With respect to its First Claim for Relief, however, Key
Tronic argues that section 9622(g) does not bar its direct
cause of action against the USAF under 42 U.S.C.

§ 9607(a)(4)(B), to recovera portion of the $1.2 million Key
Tronic spent in its initial private response to the Colbert
release. Thus, the issue presented by the USAF’s motion is
whether the contribution protection provided a settling PRP
by 42 U.S.C. § 9622(g)(5) bars a direct action by another
PRP under 42 U.S.C. § 9607(a)(4)(B) to recover initial
response costs privately incurred.

The pertinent language of CERCLA provides some
guidance for resolving the issue before the court. Section
9607(a)(4)(B) provides a private right of action to “any other
person” who incurs “necessary costs of response” to a release
ofa hazardous substance. Section 9622(g)(5) provides that a
PRP “who has resolved its liability to the United States...
shall not be liable for claims for contribution regarding
matters addressed in the settlement.” (Emphasis supplied.)
Thus, to the extent the statutory language is instructive, it
does not favor the USAF’s motion—section 9622(g)(5)

-
:

18

pertains to “liability to the United States” and to “claims for
contribution.” Key Tronic’s action under section
9607(a)(4)(B) is a direct action to recover its own response
costs—it is not technically acontribution claim, nor does it
involve liability to the United States.

The USAF anticipates this quandary , and attempts to
meet it by arguing that the contribution protection provided
by section 9622 must be construed to apply to a PRP’s action
to recover private response costs under section 9607 in order
to effectuate Congress's purpose in empowering the EPA to
give contribution protection to de minimis PRPs who settle.
As stated in SARA, that purpose was “to expedite effective
remedial actions and minimize litigation.” 42 U.S.C.

§ 9622(a). The USAF argues that the EPA’s “carrot” of
contribution protection would be rendered meaningless if
other PRPs could avoid it by simply restyling contribution
actions as actions to recover “response costs” under section
9607. The USAF cites two cases which it claims support this
argument: United States v. Cannons Eng'g Corp., 720F.
Supp. 1027 (D. Mass. 1989), aff'd, 899 F.2d 79 (1stCir.
1990), and Central Ill. Pub. Serv. Co. v. Industrial Oil
Tank & Line Cleaning Serv. , 730 F.Supp. 1498 (W.D. Mo.
1990).

In Cannons, the court considered an indemnification
cross-claim by several nonsettling PRPs against a group of
PRPs that had settled with the EPA and received contribution
protection. Granting a motion to dismiss the cross-claim, the
court stated:

[T]he contribution protection provisions serve
the important function of encouraging early
settlements. Failure to provide similar
protection against suits for equitable
indemnity would encourage defendants to re-
cast their contribution claims as indemnity
claims and injure, if not destroy, the goals to

19

be served by the express contribution
protection provisions of CERCLA.

Id. 720 F. Supp. at 1051-52. The First Circuit Court of
Appeals affirmed under a similar rationale. 899 F.2d at 92.

Industrial Oil Tank also holds that a nonsettling PRP
may not maintain an equitable indemnity claim against a
settling PRP who has obtained contribution protection. The
court adopted the rationale in Cannons verbatim. Id. 730 F .
Supp. at 1506-07.

Cannons and Industrial Oil Tank must be distinguished
from the present case. In those cases, nonsettling PRPs
sought indemnity from settling PRPs for prospective liability
to the United States. Thus, the indemnity claims fell squarely
within the situation that apparently prompted Congress to
pass section 9622. Here, Key Tronic seeks to recovera
portion of the costs it incurred directly, at its own initiative,
in responding to the release at Colbert. That factual
distinction makes the rationale in Cannons and Industrial Oil
Tank inapplicable to this case.

The provision in CERCLA that contribution actions
cannot be maintained against settlor PRPs “was designed to
encourage settlements and provide PRPs a measure of
finality in return for their willingness to settle.” United States
v. Cannons Eng'g Corp., supra, 899 F.2d at 92, citing H.R.
Rep. No. 99-253, Part, 90th Cong., Ist sess. 80(1985),
reprinted in 1986 U.S. Code Cong. & Admin. News 2835,
2862. With respect to a contribution claim by one PRP
against another PRP for liability to the EPA, the effect of
contribution protection is not inconsistent with the overal]
purposes behind CERCLA. Those purposes are (1) to
facilitate prompt cleanup of hazardous releases, and (2) to
place the ultimate burden ofacleanup upon those responsible
for creating the hazard. See Private Response Cost Recovery
Actions Under CERCLA, 34 Kan. L. Rev. 109, 119(1985).
As to liability to the EPA, contribution protection is

20

consistent with CERCLA’ s objectives because all PRPs have
the same incentive to promptly settle the EPA’s claims
against them, and the procedures for EPA settlement tend to
insure a proper allocation of responsibility upon the parties.
See generally, 42 U.S.C. § 9622.

When applied to an action under section 9607(a)-(4)(B)
to recover private response costs, however, the effects of
contribution protection are not necessarily consistent with
CERCLA’s primary objectives.

First, if contribution protection is applied to preclude
recovery of privately incurred response costs, PRPs will be
discouraged from taking initiatives to clean up hazardous
releases. Instead, PRPs would be encouraged to respond only
via EPA settlements, since costs incurred in private response
actions may not be even partially recovered against other
PRPs who do nothing on their own, yet settle with the EPA
and obtain contribution protection.

Second, the application of contribution protection to
private response cost actions would work against proper
allocation of the clean-up burden. Because liability under
CERCLA is joint and several, see United States v. Ottati &
Goss, Inc., 630 F. Supp. 1361, 1395 (D. N.H. 1985), the EPA
might have little incentive to investigate further once it
locates one solvent PRP. Application of contribution
protection to actions for recovery of private investigation
costs will eliminate the incentive 42 U.S.C. § 9607(a)-(4)(B)
provides PRPs to identify and locate other PRPs.

The Court also notes that the USAF’s argument is
founded upon an assumption that may not be valid in the
context of this case. The USAF argues that “[i]f Key Tronic
could evade the contribution protection provided by
[section 9622(g)(5)] simply by styling its claim as a cost
recovery action under [section 9607], instead ofa
contribution action under [section 9613}, section [9622(g)-
(5)] would be deprived of any practical significance and

21

hence any utility to EPA.” (USAF’s Memo., p. 12). Here, the
validity of that argument is not self-evident. Even if actions
to recover private response costs under section 9607 are
permitted, a PRP s/il/ has an incentive to settle with the EPA
under section 9613 or 9622. Settlement with the EPA still
offers the auvantages of avoiding litigation, fixing liability
and precluding contribution vis a vis costs incurred by the
EPA. The facts here are a case in point—the USAF need not
worry about a contribution claim by Key Tronic with respect
to the $4.2 million EPA-Key Tronic settlement. Alumax and
Schmidt, on the other hand, who did not settle, are subject to
Key Tronic’s contribution claim. Thus, the incentives a PRP
has to settle with the EPA under section 9622 are not
necessarily “eliminated” by recognition of the private cause
of action provided in 42 U.S.C. § 9607(a)(4)(B).

From the above, it is evident that the USAF’s argument
imputes an effect to section 9622 that runs contrary to the
overall purposes of CERCLA. Further, the USAF’s position
would create an unnecessary inconsistency between the
various sections of CERCLA. Both of these results are to be
avoided. This court must strive to interpret and apply section
9622 so that it is consistent with the language of CERCLA’s
other sections and with the purposes of the entire statute
considered as a whole. Adams v. Howerton, 673 F.2d 1036,
1040-41 (9th Cir. 1982), cert. denied, 458 U.S. 1111 (1982).

Aside from the analysis above, there is little to assist
the court in deciding the issue before it. It has been noted that
CERCLA as originally passed by Congress was “an
eleventh-hour piece of legislation” drawn in the “final days
ofa lame-duck session.” Private Response Cost Recovery
Actions Under CERCLA, supra, 34 Kan. L. Rev. at 109. “In
general, CERCLA’s sketchy legislative history limits its
interpretative usefulness.” /d., pp. 118-19. Nor does the
legislative history of SARA (which introduced de minimis
settlements and contribution protection under section 9622),
provide any assistance with regard to the issue before the
court. See, Settlement Policy Under the Superfund

}

22

Amendments and Reauthorization Act of 1986, 58 U. Colo.
L. Rev. 599 (1988). It appears that the potential interplay
between sections 9607 and 9622 was not considered by
Congress. See id. (discussing legislative history of SARA).
However, at the time Congress passed SARA, at least two
courts had recognized a private right of action under section
9607(a\(4)(B). See Jones v. Inmont Corp., 584 F. Supp. 1425
(S.D. Oh. 1984); New York v. EXXON Corp. , 633 F. Supp.
609 (S.D.N.Y. 1986) (action by a PRP). It does not seem
reasonable that Congress would intend to eliminate a
recognized direct cause of action for one class of persons
(PRPs) by providing for contribution protection in another
section that applies to settlement with the EPA.

This last point raises yet another issue. Since the USAF
concedes that section 9607 creates a private right of action
for recovery of response costs incurred by a PRP, it must also
confront the logical conclusion of its position—that by
enacting section 9622(g)(5) Congress granted the EPA the
administrative power to eliminate a person’s right to recover
response costs, without even requiring a hearing procedure to
which the affected person is a party. The USAF attempts to
meet that issue by arguing that the Supreme Court “has
established that Congress can foreclose successive litigation
by nonparties pursuant to statutory remedial programs.”
(USAF Memo., p. 15). However, the cases the USAF cites to
support this statement are not on point. Martin v. Wilks, 109
S. Ct. 2180 (1989), recognizes in dicta an exception to the
“general rule” that a “judgment or decree among parties to a
lawsuit resolves issues as among them, but it does not
conclude the rights of strangers to those proceedings.” /d. at
2184. The Court states in a footnote that “where a special
remedial scheme exists expressly foreclosing successive
litigation by nonlitigants, as forexample in bankruptcy or
probate, legal proceedings may terminate pre-existing rights
if the scheme is otherwise consistent with process.” /d. n.2.
Martin cites NLRB v. Bildisco & Bildisco, 465 U.S. 513
(1984), and Tulsa Professional Collection Servs., Inc. v.
Pope, 485 U.S. 478 (1988), which both involve nonclaim

23

statutes (bankruptcy and estate, respectively). These cases do
not suffice to resolve the questions of fairness raised by the
USAF’s argument. In this regard, the court notes that
legislative enactments should never be construed as
establishing statutory schemes thatare illogical, unjust or
capricious. Bechtel Constr., Inc. v. United Bhd. of
Carpenters & Joiners, 812 F.2d 1220, 1225 (9th Cir. 1987).

I find that 42 U.S.C. § 9622(g)(5) does not bar an
action by a PRP under 42 U.S.C. § 9607 (a)(4)(B) to recover
privately incurred initial response costs from a settlor PRP
who has obtained contribution protection from the EPA for
the final clean-up costs. The section 9607 action is not one
for “contribution” of “liability to the United States.”
Construction of the statute to permit such action is consistent
with the overall purposes of CERCLA and SARA, and
avoids internal inconsistencies otherwise drawn into the
statutory scheme. Finally, this construction prevents the
statute from being applied in an unfair, and potentially
unconstitutional, manner. Thus, the USAF’s motion to
dismiss the First Claim for Relief against it should be denied
with respect to the $1.2 million Key Tronic allegedly
incurred in initial private response costs.

Ill. Key Tronic’s State Law Claims
Against the USAF

The USAF contends that Key Tronic’s state law claims
against it are barred by sovereign immunity. Key Tronic did
not dispute that argument in its brief, and conceded the
appropriateness of dismissal at oral argument. Therefore,
Key Tronic’s Third Claim for Relief should be dismissed
with prejudice as against the USAF.

IV. Key Tronic’s Claim for Declaratory Relief

Counsel for Key Tronic stated at oral argument that its
Fourth Claim for Relief, fora declaratory judgment under
CERCLA, pertained only to Consent Decree payments to be

24

made in the future. Because Key Tronic has conceded that
the USAF is not liable for any further costs incurred under
the Consent Decree, the Fourth Claim for Relief should be
dismissed with prejudice as against the USAF.

V. Defendant Schmidt’s Motion for Summary Judgment
of Dismissal

From 1971 to 1983, defendant William Schmidt
(“Schmidt”) contracted with Spokane County to “do all work
and furnish all tools, materials and equipment necessary to
construct, improve and complete” Colbert. (Exhibit B to
Schmidt’s Statement of Material Facts, hereafter “the
Contract.”) Plaintiff alleges that Schmidt’s performance of
the contract qualifies him as an “operator” of Colbert under
CERCLA, as defined in 42 U.S.C. § 9601(20)(A).
(Complaint, #9 8, 14 and 29.) Plaintiff alleges that Schmidt’s
status as an operator of Colbert subjects him to liability under
42 U.S.C. §§ 9607(a) (response cost recovery) and 961 3(f)
(contribution), and under Washington law, RCW 4.22.040
(contribution among joint tort feasors) and RCW
70.105D.040 (parties responsible for a release of hazardous
substances are jointly and severally liable).

Schmidt seeks summary judgment of dismissal based
upon the terms of the Consent Decree between the EPA and
the DOE, onthe one hand, and Spokane County and Key
Tronic, on the other, (Washington Dept. of Ecology v.
Spokane Cy., C-89-033-RJM, E.D. WA). The Consent
Decree provides:

Exceptas specifically provided hereafter, ...
Spokane County and Key Tronic hereby
covenant not to sue each other as to all
matters alleged or all matters which could
have been alleged in the Complaint with
regard to the Site. . . . This covenant not to
sue applies only to Spokane County and Key
Tronic, including its respective divisions,

25

officials, officers, directors, principals, agents,
servants, employees, successors, and assigns,
and not any parent corporation, subsidiaries
and affiliates of the County and Key Tronic.”

(Exhibit 1 to Complaint, pp. 55-56.) Schmidt alleges that he
operated Colbert as Spokane County’s agent, and that
plaintiffs claims against him here pertain to matters which
were or could have been alleged in the previous complaint.
Thus, Schmidt argues that Key Tronic may not maintain this
action against him.

Schmidt avers the following facts to establish his
agency: The contract specified in great detail the operating
instructions for the landfill, including the hours of operation,
the manner of refuse disposal, and the required equipment.
(Defendant’s Statement of Material Facts, 3.) Further,
Spokane County employees inspected Colbert up to five
times a week to insure that Schmidt complied with the
contract’s performance specifications. County employees,
not Schmidt, had responsibility for determining the type of
waste accepted. (/d. J] 5-7.) Also, Schmidt disposed of
refuse at Colbert as directed by Spokane County. (/d.,

{J 8-10, 16.) Finally, the contract expressly provides that
Schmidt operated Colbert subject to Spokane County’s
control. The contract provides:

4. The maintenance and operations of the
disposal site shall be under the control of
Spokane County and all work and methods
performed by the contractor pursuant to this
agreement shall be subject to inspection,
approval and direction of the county engineer
or his agents at any time.

(/d., Ex. B, p.4, citing, Specifications for Operation of
Colbert Disposal Site, § IX. 94, p. 6.)

—

26

Key Tronic disputes Schmidt’s agency claim by an
allegation that Spokane County’s inspectors “did not have
the power to order Mr. Schmidt to take any specific actions,
and Mr. Schmidt retained the right to dispute any of the
inspector’s findings.” (Plaintiffs Statement of Material
Facts, 7.) That allegation, however, is not supported by Key
Tronic’s citations to the record, i.e., Contract, Section IX.”7

7For example, paragraph | of Section [X of the contract specifications
provides that “[c]el! ,ocation, alignment and excavation shall be done in
accordance with the direction of the engineer.” Paragraph 28 of Section IX
provides:

If the engineer finds that the contractor has failed to
perform properly any of the provisions of this contract and
failed to correct such performances within twenty-four (24)
hours after verbal or written notice to the contractor or his
designated agents has been notified to do so [sic], the
engineer may order the contractor to cease all work at the
site and/or may arrange for the necessary work at the site to
be done by others and the cost of so doing shall be deducted
from payments then due or coming due the contractor,
however, in the case of unauthorized fires, the above action
may be ordered if such fires are not extinguished within two
(2) hours after verbal notification to do so by the engineer. In
the case of insufficient or no daily cover, the engineer need
not give the contractor twenty-four (24) hours notice but may
arrange for the needed cover of the refuse by others to
commence any time after 12 o’clock noon on the day
following the improper covering of refuse. At the engineer's
option, a penalty of one hundred dollars ($100) may be
deducted from payments due or coming due for each day or
part thereof in which any improper performance of the
contract is left uncorrected in excess of 24 hours from the
engineer’ § determination time of such improper performance,
except that a fifty dollar ($50) deduction may be made for
insufficient or no daily cover. If the contractor fails to execute
the work described in the provisions of Section IX, the
engineer may terminate this contract as provided by Chapter

1-08.10 of the State of Washington Standard Specifications
for Road and Bridge Construction of 1969.

Taken as a whole, the contract is clear that Schmidt was to “operate” Colbert at
the direction and control of Spokane County.

27

The parol evidence Key Tronic offers in support of its
assertion is similarly unavailing. Key Tronic cites the
following deposition testimony of Mike Senske, an engineer
for Spokane County, who assisted in drafting the contract.
(See Senske Depo., p. 18.)

Q. “You indicated [County landfill inspector]
Howard Hay had daily control over landfill
operation. What exactly do you mean by
‘control’?”

A. If[Hay] saw the contractor had
inadequately performed his duties that were
required the previous day, he had the authority
to tell him you will do this today or you will
do that. Obviously, the contractor had the
right to tell him, you go right to you
know.”

(Senske Depo., p. 26.) This equivocal testimony does not
suffice to create a “genuine”’® issue of fact as to who
controlled the operation of Colbert. That conclusion is
buttressed by the fact that this was the only evidence Key
Tronic could offer on this issue. A quick review of the
balance of Senske’s deposition reveals the true context of the
parties’ relationship as one where Schmidt acted subject to
Spokane County’s control.

8See, Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574 (1986). In
Matsushita, the Supreme Court stated that when the moving party has carried its
burden under Rule 56(c) “its opponent must do more than simply show that there
is some metaphysical doubt as to the material facts.” Jd. at 586. “[I]f the factual
context renders respondent’s claim implausible. . . respondents must come
forward with more persuasive evidence to support their claim than would
otherwise be necessary.” Jd. at 587.

9Senske also testified, inter alia, that “the contract specifically required
that the contractor at that site was to maintain a hazardous waste disposal area”
(p.15); Spokane County decided what substances could be accepted at a particular
landfill (p. 16); Schmidt “was simply retained as a contract employee” (p.18); one
time when Schmidt complained about some “liquid” in drums that was taking

28

Under Washington law, the undisputed facts establish
that Schmidt operated Colbert as Spokane County’s agent.!°
“[A]n agency relationship results from the manifestation of
consent by one person that another shall act on his behalf and
subject to this control, with a correlative manifestation of
consent by the other party to act on his behalf and subject to
his control.” Moss v. Vadman, 77 Wn.2d 396, 402-03, 463
P.2d 159 (1969). See also Matsumura v. Eilert, 74 Wn.2d
362, 368, 444 P.2d 806 (1968) (same); Uni-Com North West
v. Argus Publishing, 47 Wn. App. 787, 796, 737 P.2d 304
(1987) (right of control is the “crucial factor”); Zoda v.
Eckert, Inc., 36 Wn. App. 292, 296, 674 P.2d 195 (1983)
(right of control is “one of the primary requisites” of an
agency).

Key Tronic focuses upon the alleged absence of
another indicium of agency—the “power to alter the legal
relations between the principal and third persons”—to argue
that Schmidt was not an agent of Spokane County. See, Zoda
v. Eckert, Inc., 36 Wn. App. at 296. The simple answer to
that argument is that Schmidt had such power, and exercised
it daily by collecting fees and accepting refuse. (See Schmidt
Depo. Ex. 2 to Plaintiff’ s Statement of Facts, p.3, 16.)

Finally, Key Tronic argues that neither it nor Spokane
County intended the covenant not to sue to apply to Schmidt.
That argument, however, ignores a basic tenet of contract
construction—that the parties’ intent must be gleaned first
from the terms of the agreement. Only ifa contract is
ambiguous may extrinsic evidence of intent be considered.

paint off his equipment, he was told to accept the material, he had no say in the
matter (p.21); and that, with respect to Schmidt’s performance of the contract,
Spokane County was “more than satisfied. He went the extra mile in all ways.”
(p.25).

1 The existence of a principal-agent relationship is a question of fact

unless the facts are undisputed.” Uni-Com N. W. v. Argus Publishing, 47 Wn. App.
787, 796, 737 P.2d 304 (1987).

29

Hastings v. Continental Food Sales, Inc.,60 Wn.2d 820,
823, 376 P.2d 436 (1962); McCombs Constr., Inc. v. Barnes,
37 Wn. App. 91, 93, 678 P.2d 837 (1984). The existence of
ambiguity is a question of law for the court. R.A. Hanson Co.
v. Aetna Ins. Co.,26 Wn. App. 290, 295, 612 P.2d 456
(1980).

Key Tronic’s argument would require the court to first
find ambiguity in the provision of the Consent Decree
releasing Spokane County’s “agents.” The court may not so
find. There is nothing in the Consent Decree to suggest that
the parties intended the word “agents” to have any meaning
other than that ordinarily given it by Washington law. Absent
such an indication, a word’s ordinary meaning must be given
effect. Cobray v. Stevenson, 98 Wn.2d 410, 415, 656 P.2d
473 (1982).

Under the unambiguous terms of the consent decree,
Key Tronic agreed not to sue Spokane County’s agents “as to
all matters alleged or which could have been alleged in the
Complaint with regard to” Colbert. Key Tronic does not
argue that its instant claims against Schmidt could not have
been alleged in the prior complaint. Because Schmidt was
Spokane County’s agent with regard to the operation of
Colbert, Key Tronic’s claims against him may not be
maintained. The Complaint and all Claims therein against
defendant William Schmidt should be dismissed with
prejudice.

VI. Key Tronic’s Motion for Partial Summary Judgment

Key Tronic moves for summary judgment establishing
that all defendants are liable under CERCLA. Key Tronic
also seeks to establish the amount of each defendant’s
exposure. In light of the Court’s rulings above, only the
following issues need be addressed:

30

A. TheUSAF
(i) Liability

Key Tronic moves for partial summary judgment that
the USAF is liable under 42 U.S.C. § 9607(a)(4)(B) fora
portion of the $1.2 million in costs Key Tronic privately
incurred in responding to the Colbert release.

This court has previously held that the USAF disposed
of hazardous waste at Colbert. (Oral Findings of Fact and
Conclusions of Law, Key Tronic Corp. v. United States,
C-88-041-JLQ and C-87-20-JLQ(E.D. WA, Nov. 3, 1989),
p. 2; Ex. 1 to Plaintiff's Statement of Facts.) This fact
establishes the USAF as a “person who... arranged for
disposal or treatment . . .of hazardous substances owned or
possessed by such person...” 42 U.S.C. § 9607(a)-(3). Itis
undisputed that Colbert is a “facility” within the definition of
42 U.S.C. § 9601(9), and that a “release” has occurred at
Colbert within the definition of 42 U.S.C. § 9601(22). Thus,
under 42 U.S.C. § 9607(a)-(4)(B), the USAF is liable fora
portion of “any other necessary costs of response incurred by
any other person consistent with the national contingency
plan.” Key Tronic’s motion for partial summary
judgment that the USAF is liable under 42 U.S.C. § 9607
should be granted.

(ii) Exposure

As discussed above, the USAF is not liable for any
portion of the $4.2 million Key Tronic is obligated to pay
under the terms of the Consent Decree. Therefore, the
question presented here is whether Key Tronic is entitled to
partial summary judgment establishing the amount of its
private cost recovery claim at $1 ,271,511.10.

In order to prevail on this issue, Key Tronic must prove
by undisputed facts that its claimed costs were
(1) “necessary” and (2) “consistent with the national

31

contingency plan.” City of Philadelphia v. Stepan Chemical,
713 F. Supp. 1484, 1490(E.D. Pa. 1989). Necessity and
consistency are questions of fact. Cadillac-
Fairview/California v. Dow Chemical, 840 F.2d 691, 695
(9th Cir. 1988).

Key Tronic’s response cost claim is disputed on several
grounds. Defendants assail the propriety under CERCLA of
several categories of costs claimed, the legitimacy of the
claims made here even if the type of cost is not per se
improper, and the amounts of various cost claims. More
importantly, both the USAF and Alumax argue that they
have been provided no discovery regarding Key Tronic’s
response cost claim. The discovery cut-off date in this action
is December 31, 1990. Defendants should have an
opportunity to examine the nature and amount of the costs
claimed. Therefore, Key Tronic’s motion for partial
summary judgment establishing the amount of its private
cost recovery claim should be denied without prejudice to
renew after reasonable discovery.

B. Alumax
(i) Liability

Key Tronic alleges that Alumax disposed of liquid
chemical wastes, including TCA and TCE, at Colbert
between 1972 and 1980. (Plaintiff's Statement of Facts, 4 3.)
Key Tronic supports this allegation with the testimony of two
former Alumax employees, Russell Parish and Vernon
Peters. Key Tronic asserts that Parish and Peters have
testified that they personally took hazardous waste to
Colbert. (See Ex. 5 & 6 to Plaintiff's Statement of Facts.)
Thus, Key Tronic argues that it has established Alumax’s
liability under State and Federal law.

Alumax disputes plaintiffs allegation by presenting the
declaration of Les Wright, the foreman of Alumax’s “plating
shop.” Wright’s declaration details how he operated a

32

“degreasing vat.” When the vat was full of waste, Wright
would have it cleaned, and the waste would be disposed of.
Wright declares: “During the eleven years that I worked for
Alumax, as far as | know, all of the waste from the vapor
degreaser was taken to the Mica Landfill. I know of none
going to the Colbert Landfill.” (Wright Decl., p. 3.)

The Court notes that Wright’s testimony is not an
affirmative declaration that “I know that none of the vapor
degreaser waste was taken to the Colbert Landfill.” However,
as Alumax points out, Parish’s testimony may be
impeachable, and Peters’s testimony is equivocal (“I believe”
I hauled chemicals to Colbert “once or twice, but I’m not for
sure.”) In light of the fact that Key Tronic bears the burden
of proofon this issue , summary judgment is not appropriate.
Therefore, Key Tronic’s motion for partial summary
judgment that Alumax is liable should be denied.

VII. Discovery Motions

The USAF moved for a protective order pending
disposition of its motion to dismiss discussed above. Key
Tronic countered with a motion to compel the USAF to
answer the discovery.

The USAF’s memoranda on the discovery issue merely
offer excuses for its failure to respond on time (counsel was
sick, substitute counsel was unaware of the outstanding
discovery, etc.) The substantive propriety of the discovery is
not contested.

Key Tronic’s motion to compel should be GRANTED,
and the USAF’s motion for a protective order should be
DENIED. Because the USAF has had the outstanding
discovery requests for over 7 months, the court orally
ordered it to respond thereto by August 9, 1990.

The court finds no substantial justification for the
USAF’ s failure to provide discovery. Therefore, Key Tronic

33

is awarded the reasonable costs and attorneys’ fees of its
motion to compel. Key Tronic may file a statement of its
costs and fees on the motion. The USAF shall have 10 days
from receipt thereof to respond to or oppose the amount
claimed. The court will then determine a reasonable amount.

Based upon the foregoing, IT IS HEREBY
ORDERED:

1. Plaintiff's Second, Third and Fourth Claims for
Relief are DISMISSED WITH PREJUDICE against
defendants United States, the Air Force and Rice. The First
Claim for Relief is DISMISSED WITH PREJUDICE
against these defendants with respect to any costs or
obligation incurred by plaintiff pursuant to the Consent
Decree entered in DOE and EPA v. County of Spokane and
Key Tronic Corp., C-89-033-RJM(E.D. WA, Jan. 9, 1989).
These defendants’ motion to dismiss the First Claim for
Relief is DENIED with respect to plaintiff s action to
recover private response costs under 42 U.S.C. § 9607.

2. The Complaint and all Claims therein against
defendant William Schmidt are DISMISSED WITH
PREJUDICE.

3. Key Tronic’s motion for partial summary
judgment is GRANTED IN PART and DENIED IN
PART. The Court grants summary judgment establishing the
liability of the Air Force under 42 U.S.C. § 9607. In all other
respects, Key Tronic’s motion for partial summary judgment
is DENIED.

4. Key Tronic’s motion to compel discovery from
the Air Force is GRANTED; the Air Force’s motion fora
protective order is DENIED.

34

IT ISSO ORDERED. The Clerk is hereby directed to
enter this Order and furnish copies to counsel.

DATED this 9th day of August, 1990.

/s/

JUSTIN L. QUACKENBUSH
UNITED STATES DISTRICT JUDGE

35

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF

WASHINGTON
KEY TRONIC CORPORATION, a
Washington corporation, NO. C-89-694-JLQ
Plaintiff, SUPPLEMENTAL
AFFIDAVIT OF DAVID L.
v. POWERS
UNITED STATES OF AMERICA;
THE UNITED STATES AIR
FORCE; DONALDB. RICE, THE
SECRETARY OF THE UNITED

STATES AIR FORCE, inhis
individual capacity; ALUMAX, INC.,
a Delaware corporation; ALUMAX
FABRICATED PRODUCTS, INC., a
Delaware corporation,

Defendants.

STATE OF WASHINGTON )

) ss.
COUNTY OF SPOKANE _)

DAVIDL. POWERS, being first duly sworn upon oath,
deposes and says:

1. This Affidavit supplements the affidavit I
executed in June 1990 (“June Affidavit”) in support of Key
Tronic’s previous Motion For Partial Summary Judgment

(“June Motion”). A copy of the June Affidavit is attached as
Exhibit P.

36

2. Attachedas Exhibit A is asummary of the costs
that Key Tronic has incurred or will incur in connection with
the Colbert Landfill for which it seeks summary judgment.

3. Inmy June Affidavit I described the efforts
undertaken by Key Tronic and its attorneys, consultants and
investigator to: 1) identify other Potentially Responsible
Parties; and 2) develop and shape the final remedy for
Colbert. I also identified the costs Key Tronic had incurred
related to these efforts. The identification of costs was based
on my review of the supporting cost documentation which
the company has maintained.

4. Subsequent to the June Motion, Key Tronic was
asked by Alumax to produce all of its cost documentation
supporting its response cost claims. I authorized the
production of these documents and had them sent to Key
Tronic’s counsel, Perkins Coie.

5. Thecostdocuments were further reviewed by
Perkins Coie prior to production. Portions of the documents
reflecting fees and expenses paid to Popham, Haik were
redacted by Perkins Coie, and certain of the documents
reflecting the fees and expenses paid to Goss, Moe &
Sampson were not produced. This was done so that the
produced documents and costs identified in the documents
include only those costs unquestionably linked to the PRP
and Consent Decree efforts. This review and redaction
process resulted in a net reduction in the amount of costs
sought to be recovered in this motion.

6. Priorto the preparation of my June Affidavit and
the conduct of my deposition, I had reviewed the cost
documentation on which I relied to prepare the June
Affidavit. After my deposition and in preparation for this
affidavit, I reviewed the documents that Perkins Coie had
redacted and produced. Based on this review, I believe that
the costs identified in the produced and redacted documents
are the lowest conceivable amount of costs attributable to the

37

PRP and Consent Decree efforts. I continue to believe that
the figures set forth in my June Affidavit are accurate and
properly attributable to the PRP and Consent Decreé work,
but the lower figures were selected for this motion to ensure
that there would be no issue of fact to preclude summary
judgment. In other words, costs sought in the instant motion
are the result of a much more conservative approaeth of
identifying costs attributable to the PRP and Consent Decree
efforts than was used for my June Affidavit.

7. Forpurposes of this motion, Key Tronic seeks to
recover $47,126.12 in fees and expenses for the work
performed by Popham Haik relating to the PRP search. In my
June Affidavit, Popham Haik costs for the PRP effort were
identified as $121,589.36. While $121,589.36 is the amount
of costs actually incurred by Key Tronic for Popham Haik’s
work relating to the PRP effort, we have, for purposes of this
motion, reduced the figure to $47,126.12. This figure
includes only those costs which are specifically, directly and
unquestionably linked to the PRP effort. The Popham Haik
redacted documents which have been produced identify those
PRP costs for which we seek reimbursement. The costs
sought are based on the amount of attorney and legal
assistant time worked on the PRP matter, multiplied by the
hourly billing rate of the individual concerned.

Attached as Exhibit B to this affidavit is asummary of
the fees and expenses sought to be recovered for each
Popham Haik invoice. Attached as Exhibit C are the Popham
Haik invoices and Key Tronic payment records on which the
summary is based.

8. Here is one example of why the figure for
Popham Haik has been reduced. In my June Affidavit, |
included Popham Haik fees and expenses associated with the
preparation of a complaint for contribution. In my view, the
preparation of the complaint was a necessary step so that Key
Tronic could conduct formal discovery against certain PRPs.
The revised figure excludes Popham Haik fees and expenses

38

associated with the complaint. This was done to preclude any
argument that the complaint fees were not recoverable
because the complaint may have served purposes other than
the PRP search. I still believe that such fees are properly
recoverable as PRP search costs, but have not sought such
fees in this motion.

9. lamofthe view that all of Popham Haik’s work
contributed at least indirectly to identification of PRPs. They,
along with Goss, Moe & Sampson, did the first investigation
of PRPs at the Colbert site, identified entities that were likely
to have taken chemical wastes to Colbert, filed complaints in
state and federal court against those entities (including
Alumax and the Air Force), and engaged in substantial
investigation and discovery regarding whether and in what
amounts chemical costs were taken by those entities to
Colbert. Arguably, all of the legal research and drafting
associated with that effort contributes to PRP identification.
Nevertheless, it is possible to take a more narrow view of the
PRP investigative effort and include only those costs directly
associated with investigation, discovery, and document
analysis. For purposes of this motion, we are seeking only
reimbursement of costs specifically and directly related to
such efforts.

10. Key Tronic seeks summary judgment with respect
to $5,215.48 in fees and expenses for the work performed by
Goss, Moe & Sampson relating to the PRP search. In my
June Affidavit, the Goss, Moe costs for the PRP search were
identified as $9,464.52. While $9,464.52 is the amount of
costs actually incurred by Key Tronic for Goss, Moe’s work
related to the PRP search, we have, for purposes of this
motion, reduced the figure to $5,215.48. Again, this figure
includes only those costs which are specifically and directly
linked to the PRP effort. This reflects the same conservative
approach that was taken with respect to the Popham Haik
costs discussed in paragraphs 6 through 9 above. It is based
on the amount ofattorney and paralegal time worked on the

39

PRP matter, multiplied by the hourly billing rate of the
individual concerned.

Goss, Moe documents were not redacted, but only those
invoices which referenced services unquestionably related to
the PRP effort were produced. Even the figures on the
produced invoices were sometimes reduced. For example, the
July 29, 1986 invoice had billed Key Tronic for fees of
$3,086.25 and expenses of $555.26. The amount sought in
this motion for that invoice is only $1,000 in fees and $0 in
expenses. This was done because certain of the entries on the
invoice do not explicitly reference PRP work. The reduction
to $1,000 is the lowest possible amount attributable to PRP
work. A similar reduction and analysis were used for the
August 25, 1986 invoice.

The amounts sought for each of the produced Goss,
Moe invoices are identified in the documents produced.
Attached as Exhibit D is asummary of the fees and expenses
sought to be recovered foreach Goss, Moe invoice. Attached
as Exhibit E are the Goss, Moe invoices and Key Tronic
payment records on which the summary is based.

11. Forpurposes of this motion, Key Tronic seeks to
recover $62,492.18 in fees and expenses relating to Perkins
Coie’s PRP search, and $160,641.23 in fees and expenses
relating to Perkins Coie’s efforts in negotiating the Consent
Decree. These are the same figures that were identified in the
June Affidavit. The figures are based on the amount of
attorney or paralegal time worked on PRP or Consent Decree
matters, multiplied by the hourly billing rate of the individual
concerned.

Each produced invoice identifies the amount of fees
and expenses sought for that invoice. Attached as Exhibit F
is asummary of the fees and expenses sought to be recovered
for each invoice. Attached as Exhibit G are the supporting
Perkins Coie invoices on which the summary is based.

40

The identification of the Perkins Coie costs was
conducted using the same conservative approach that was
used for the Popham Haik costs described above. The
redaction and production were done by Perkins Coie. Based
on my review of the redacted and produced documents, |
agree with the conservative approach taken and believe that
the amounts sought are the lowest possible amounts
attributable to the PRP and Consent Decree efforts.

12. Forpurposes of this motion, Key Tronic seeks to
recover $2,512.24 in fees and expenses for the PRP work
performed by Robert Bailor, an investigator. In my June
Affidavit, the Bailor costs were identified as $2,462.21. The
current figure reflects the total of the charges to Key Tronic
as set forth on all of the Bailor invoices that were produced.
The invoices reference the amounts chargeable to Key Tronic
and the County and the fact that Key Tronic, in most
instances, paid one-half of the invoiced amounts. On one
occasion, Key Tronic paid the entire amount. The change
from $2,462.21 to $2,512.24 resulted from an inadvertent
failure to include one of the Bailor invoices in the June total.

Attached as Exhibit H is asummary of the invoices
which total $2,512.24. Attached as Exhibit I are the Bailor
invoices and Key Tronic payment records on which the
summary is based.

13. Forpurposes ofthis motion, Key Tronic seeks to
recover $129,447.31 in fees and expenses for the work
performed by Landau Associates, Inc. relating to the
negotiation of the Consent Decree and Scope of Work. In my
June Affidavit, the Landau costs were identified as
$126,270.53. Additional review of the documents has
resulted in a higher figure.

The figure of $129,447.31 was arrived at as follows.
The Landau invoices for Colbert which were produced total
$133,139.08. However, Key Tronic is following the same
conservative approach with respect to the Landau costs as it

41

has with respect to other costs. We are not now seeking
recovery for two pieces of work performed by Landau which
related indirectly to the Consent Decree. Subtracting the cost
for those pieces of work from $133,139.08 amounts to
$129,447.31.

Attached as Exhibit J is asummary of the Landau
Associates, Inc. invoices which total $129,447.31. Attached
as Exhibit K are the supporting Landau Associates, Inc.
invoices and Key Tronic payment records on which the
summary is based.

14. Forpurposes of this motion, Key Tronic seeks to
recover $20,903.35 in fees and expenses for the work
performed by Dames & Moore. In my June Affidavit, the
Dames & Moore costs were identified as $22,323.09.
Additional review of the documents has resulted in a lower

figure.

The figure of $20,093.35 was arrived at as follows. The
total amount of fees and expenses identified inthe Dames &
Moore produced invoices was $41,164.69, of which Key
Tronic paid $21,297.75. Key Tronic received acredit from
Dames & Moore of $394.40 because it had paid too much for
one invoice. Subtracting the $394.40 credit from Key
Tronic’s payments of $21,271.75 amounts to $20,903.35.
This is the amount that Key Tronic seeks to recover for the
work performed by Dames & Moore.

In my deposition, I could not recall the nature of the
work performed by Dames & Moore or the sequence of
events leading up to our hiring of Dames & Moore. I have
since reviewed the Dames & Moore documents and have
refreshed my recollection. My refreshed recollection is as
follows. Dames & Moore reviewed the Remedial
Investigation, the Feasibility Study and the reports prepared
by Maddox and Donahue which were issued prior to the
Remedial Investigation and Feasibility Study. Dames &
Moore analyzed the various remedial alternatives proposed in

ae

42

the Remedial Investigation and Feasibility Study to
determine whether the reports included the most cost-
effective remedy. Dames & Moore further analyzed each
alternative set forth in the RI/FS to determine whether the
cost projections for each such alternative were accurate.
After this work was performed, Dames & Moore then
assisted Key Tronic in preparing comments to the United
States and State of Washington on the RI/FS. Those
comments recommended that the United States and State of
Washington select the most cost-effective remedy. The
United States and State of Washington ultimately selected
this remedy.

Attached as Exhibit L is asummary of the Dames &
Moore invoices which indicate the amounts billed and
amounts paid. Attached as Exhibit M are the Dames &
Moore invoices and Key Tronic payment records on which
the summary is based.

15. Key Tronic is obligated to pay $4.2 million
pursuant to the Consent Decree with the United States
Environmental Protection Agency, Washington Department
of Ecology and Spokane County. In my June Affidavit, I said
that Key Tronic had paid $1.3 million pursuant to the
Consent Decree. Key Tronic has now paid $2.25 million
pursuant to the Consent Decrée. Attached as Exhibit N is a
summary of the documents reflecting the payment of
$2.25 million. Attached as Exhibit O are the documents on
which the summary is based.

/s/
DAVIDL. POWERS

43 44

SUBSCRIBED AND SWORN to before me this Ist 7 UNITED STATES DISTRICT COURT
day of February, 1991. FOR THE EASTERN DISTRICT OF
WASHINGTON
Betty A. Traband/s/_ KEY TRONIC CORPORATION
NOTARY PUBLIC in and for the State of ashington corporati -89-694-
Washington, residing at Spokane. ies sie —
My Commission Expires: March 15, 1994. Plaintiff, STIPULATION

Te

UNITED STATES OF AMERICA; THE
UNITED STATES AIR FORCE;
DONALDB. RICE, THESECRETARY
OF THE UNITED STATES AIR
FORCE, in his official capacity;
ALUMAX, INC., a Delaware
corporation; ALUMAX FABRICATED
PRODUCTS, INC., a Delaware
corporation; and ALUMAX MILL
PRODUCTS, INC., a Delaware

corporation,
Defendants.

WHEREAS, Key Tronic Corporation (“Key Tronic”)
has filed this action, pursuant to sections 107(a) and 1 13 of
the Comprehensive Environmental Response, Compensation,
and Liability Act (“CERCLA”), 42 U.S.C. §§ 9607(a) and
9613, against several defendants, including the United States,
the United States Air Force, and Donald Rice, Secretary of
the Air Force (hereinafter referred to jointly as “the United
States”) seeking to recover removal and interim remediation
costs Key Tronic alleges to have incurred in connection with
the remediation of the release of hazardous substances at
Colbert Landfill, Spokane, Washington;

45

WHEREAS, the United States and Key Tronic
previously executed the Consent Decree entered by this
Court on January 11, 1991, in order to resolve the United
States’ liability to Key Tronic for certain of the claims Key
Tronic has asserted;

WHEREAS, the Paragraph 3 of the Consent Decree
provided that the following claims (“the excepted claims”)
remained in dispute between the parties:

A. Costs and fees incurred by attorneys
and investigators for Key Tronic during Key
Tronic’s search for additional potentially
responsible parties and costs and fees incurred
by attorneys related to the negotiation of the
Consent Decree between Key Tronic, the
United States, and the State of Washington in
The State of Washington v. County of
Spokane, Civ. No. 89-033-RJM;

B. The salary of David Powers, Key
Tronic’s General Counsel and Secretary, in
the amount of $70,000, for time spent
supervising the search for additional
potentially responsible parties and negotiating
the Consent Decree identified in A;

C. Attorneys’ fees and costs incurred by

Key Tronic in the prosecution of this action:
and

D. Prejudgment interest on excepted
claims.

WHEREAS, on March 19, 1991, the Court issued a
decision holding that Key Tronic is entitled to recover on the
excepted claims as a matter of law;

46

WHEREAS, the United States and Key Tronic have
entered into this Stipulation to further narrow the issues in
this litigation;

NOW, THEREFORE, it is agreed and stipulated that:

1. The Court shall enter judgment on the excepted
claims in the amount of $155,500.

2. This agreement extends to the quantum of
recovery alone; the United States preserves all rights to
appeal an adverse judgment with respect to the issue of
whether any or all of the excepted claims are recoverable as a
matter of law.

3. Key Tronic reserves the right to seek to recover
attorneys’ fees incurred after June 17, 1991, and interest on
the excepted claims accrved after June 17, 1991, should the
United States appeal this matter.

4. Nothing in this agreement shall affect the rights or
obligations of the United States or Key Tronic established in
the Consent Decree with respect to any issue other than the
quantum of recovery to be awarded on the specified excepted
claims in paragraph | above.

SO AGREED:

RICHARD B. STEWART
Assistant Attorney General

/s/

EILEEN T. MCDONOUGH
Environmental Defense Section
U.S. Department of Justice

10th St. & Pennsylvania Ave.,
N.W.

Washington, D.C. 20530
(202) 514-3126

Counsel for United States

DATED: June 17, 1991

47

/s/

JAMES R. MOORE
Perkins Coie

1201 Third Avenue

40th Floor

Seattle, Washington 98101
(206) 583-8888

Counsel for Key Tronic

DATED: June 19, 1991

*

48

No. 93-376

In the
Supreme Court of the United States

KEY TRONIC CORPORATION,
Petitioner,
v.
UNITEDSTATES, etal.

and

STANTON ROAD ASSOCIATES.
Petitioner,
Vv.
LOHREY ENTERPRISES, INC., ET AL.

ORDER ALLOWING CERTIORARI
Filed December 13, 1993.

The petition herein for writ of certiorari to the United
States Court of Appeals for the Ninth Circuit is granted.

December 13, 1993

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385013_0451%3A07. Public record. Not legal advice.