Reply Brief — Key Tronic Corp. v. United States

In the

Supreme Court of the United States

October Term, 1993

KEY TRONIC CORPORATION .

Petitioner,

Vv.

UNITEDSTATES, ETAL.,

Respondent.

ON A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT

REPLY BRIEF OF PETITIONER

SS SO OOOO

James R. Moore

Counsel of Record

Mark W. Schneider

Michael Himes

PERKINS COIE

1201 Third Avenue

Seattle, WA 98101-3099

(206) 583-8888

Attorneys for Petitioner

a ee,

(i)

QUESTIONS PRESENTED

Whether under the federal Superfund statute, a private

party may recover attorneys’ fees as response costs when fees

are incurred to (a) prepare and negotiate a reasonable scope

of work and consent decree related to cleanup of

contaminated property; (b) search for and identify other

parties responsible for the contamination; and (c) litigate

cost-recovery actions against other responsible parties to

compel their participation in the remediation.

III.

IV.

(ii)

TABLE OF CONTENTS

SUMMARY OF ARGUMENT ............::ccceceeeeeeees

ARGUMENT...

A. THECERCLA STATUTE. ...ccccccosscsscsccsssssseee

B. “ENFORCEMENT ACTIVITIES”

MEANS ATTORNEYS’ FEE. .............2.00++

C. ATTORNEYS’ FEES ARE NOT

LIMITED TO THE UNITED STATEG.........

D. PRIVATE PARTIES ENFORCE

CERCLA...

ATTORNEYS’

FEES ARE OTHERWISE

RECOVERABLE. .0..-.ccccsscossssocsssesssossoosesssesssossossn

CONCLUSION

COCR H EEE H EHH

2

6

(iii)

TABLE OF AUTHORITIES

Cases

Alyeska Pipeline Service Co. v.

Wilderness Society, 421 U.S. 240

rT rldiadadindehctireeeeeetientdictnetsdensasceunsneceseneenees 5,6,12,15

Cargill, Inc. v. Monfort of Colorado,

ge ies WO BR icccccccccscceseccccssceccccescssecsseese 12,13

Donahey v. Bogle, 987 F.2d 1250 (6th

Cir.), cert. denied, 126 L. Ed. 2d

EEE EE TCT 16

Exxon Corp. v. Hunt, 475 U.S.355

FMC Corp. v. Aero Industries, Inc., 998

EY WIEPD cxcceccacsecsssssencescesessssenscsssseccseses 18

FTC v. Brown Shoe Co., 384 U.S. 316

General Electric Co. v. Litton Industrial

Automation Systems, Inc., 920 F.2d

1415 (8th Cir. 1990), cert. denied,

EE 10, 16,18

Key Tronic Corp. v. United States , 766

F. Supp. 865 (E.D. Wash. 1991),

rev'd, 984 F.2d 1025 (9th Cir.), cert.

granted, 126 L. Ed. 2d 592 (1993) 0.0.0... cccccccccceeceees 9,17

Kungys v. United States, 485 U.S. 759

TT A 7

(iv)

Marek v. Chesny, 473 U.S. 1 (1985)..........ccccccccceeseeeeeeeeeeees 16

Pennsylvania v. Union Gas Co., 491

BE, Be cecntncrntensnscninenmpsenemnneniennememnmnen 5,11

Ratzlafv. United States, 1148. Ct. 655

Thunder Basin Coal Co. v. Reich, 114 ,

EE, OEE cechsscsiieitaiiepranntinhiesidtatnsiiignaneeninicmenadnicinitemnasinein 12

United States v. Conservation Chemical

Co.,619F. Supp. 162 (W.D. Mo.

United States v. Northeastern

Pharmaceutical & Chemical Co.,

579 F. Supp. 823 (W.D. Mo. 1984),

aff'd in part and rev'd in part, 810

F.2d 726 (8th Cir. 1986), cert.

I iiitertemennmmen 7

United States v. Ron Pair Enterprises,

Ee 9,15

United States v. South Carolina

Recycling & Disposal, Inc. , 653 F .

Supp. 984 (D.S.C. 1984), affdin

part and vacated in part, 858 F.2d

160 (4th Cir. 1988), cert. denied, 490

SD. 8 BGG BID cesscesesesusssavesesssssecuscassesnscscenseesensessaseeaes 7

Wilson v. Key Tronic Corp., 701 P.2d

OG re Gre, FID, Fe ctccsensccnmnemscsensssereenscssmmnemnees 9

(v)

Regulations and Rules

a ae 16

Statutes

PT TLLIIn 1 ciarsiciieiertiheinatiesiinnteiiiiintaanaaiaacaataeeeatita a 12

IT witeiechnnticnsiininimranretainiatiabitsetitiainieaseenes passim

Sei tcrsiecscntiesinateccrineniciiieinanenspiiduniimmmaiiasls passim

|) _____ L a E T passim

ee iciarescicihcineccinsnestiniennntideanttitiasttatitininaaentiaaiiaaiiiinet 6

gn inrttierinsenntrieindiiinpeiaizstaanitiniacaniaeaticiia ines 13

EE ED 6

Other Authorities

H.R. Rep. No. 99-253 (III), 99th Cong.,

2d Sess. 15 (1985), reprinted in

EE 10

H.R. Conf. Rep. No. 99-962, 99th

Cong., 2d Sess. 185 (1986),

reprinted in 1986 U.S.C.C.A.N.

Jae reeicaadeitirneceeenianieinietiiitiineterertieceintncentansaaniesasiaaie 14

H.R. Rep. No. 99-253(1), 99th Cong.,

2d Sess., pt. 1 (1985), reprinted in

FP Oecd tts AED cennscsseccnnsssenseeteeennsenseastnscsnnies 14

(vi)

H.R. Rep. No. 99-253(V), 99th Cong.,

2d Sess., pt. 1 (1985), reprinted in

1986 U.S.C.C.A.N.3124

I. SUMMARY OF ARGUMENT

Key Tronic Corporation’s (“Key Tronic”) argument is

straightforward. In 1986, Congress enacted the Superfund

Amendments and Reauthorization Act (“SARA”) to amend

the 1980 Comprehensive Environmental Response,

Compensation, and Liability Act (“CERCLA”), 42 U.S.C.

§ 9601 ef seg. Through the SARA amendment to 42 U.S.C.

§ 9601(25) (“Section 101(25)”), a definitional section of

general application, Congress explicitly authorized all

persons entitled to recover costs of “response” under

42 U.S.C. § 9607(a) (“Section 107(a)”) to recover costs of

their “enforcement activities.” That definitional section

plainly applies to Key Tronic’s action to recover its

“response” costs from the Air Force under Section 107(a).

The amended language of Section 101(25) manifests

Congress’ intent that attorneys’ fees be awarded as costs of

“response.” That intent must control. Because the United

States fails to show that application of the plain meaning of

the statute produces a result demonstrably at odds with

Congress’ intent, the Court should apply the statute’s plain

meaning and reverse the judgment of the Ninth Circuit.

II. ARGUMENT

A. THECERCLASTATUTE

CERCLA provides an express right of action to any

person who has incurred costs to clean up a hazardous waste

site to recover those costs from any other person liable under

CERCLA. Section 107(a)(4)(A) and (B) provide:

Covered persons. . . shall be liable for—

(A) all costs of removal or remedial action

incurred by the United States Government or a

2.

State or an Indian tribe not inconsistent with

the national contingency plan;

(B) any othe; necessary costs of response

incurred by any other person consistent with

the national contingency plan.

42 U.S.C. §9607(a)(4)(A), (B).

CERCLA defines “response” as follows:

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.

42 U.S.C. § 9601(25) (emphasis added). The emphasized

language was added by the 1986 SARA amendments. Thus,

the definition of “response” in Section 101(25), as amended

by SARA, plainly applies to actions brought to recover

“necessary costs of response” under Section 107(a)4)(B)

(emphasis added).

B. “ENFORCEMENT ACTIVITIES” MEANS

ATTORNEYS’ FEES.

The United States offers no meaning of “enforcement

activities” that does not encompass attorneys’ fees.

Respondent’s Brief at 12 (emphasis added) states:

Contrary to the suggestion of petitioner's

amicus, the term “enforcement activities” in

CERCLA Section 101(25) does not refer only

to attorney fees, much less imply that ail

attorney fees are recoverable. For example,

environmental regulators engaged in

rx

enforcement activity might incur substantial

fees to third-party professionals (other than

attorneys) for technical services ... The term

“enforcement activities” was added to the

statute in 1986 to clarify that the government

can recover its enforcement costs, not to

establish a general right for prevailing parties

inall CERCLA contexts.

The United States here reveals what it is unwilling to state

plainly: Congress intended “enforcement activities” to

encompass attorneys’ fees.!

The only meaning, in addition to attorneys’ fees, offered

by the United States is that Congress intended to provide for

recovery of costs of “technical services” under

Section 101(25)’s provision for “enforcement activities.” Jd.

In making this argument the United States implicitly

concedes that Congress meant “enforcement activities” to

include attorneys’ fees. Further, the United States’ proffered

additional meaning for “enforcement activities”—‘“technical

‘Similarly, the United States implicitly agrees that “enforcement

activities” encompasses attorneys’ fees within its meaning when it states:

At the time that amendment [Section 101(25)]

was made, there was contemporaneous

litigation regarding the government's ability to

recover the costs of attorney time expended in

enforcement activity.... [T}hat lack of clarity

had the potential to be quite detrimental to the

funding of EPA’s costly mission under

CERCLA. The amendment neatly resolved that

issue by expressly including ‘enforcement

activities’ within the definition of ‘response.’

Respondent's Brief at 22-23 (emphasis added).

-4-

services”—is superfluous; CERCLA already provided for

recovery of costs of “technical services” prior to the

amendment of Section 101(25). For example, 42 U.S.C.

§ 9601(23) provided, and still provides, for recovery of the

cost of taking “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 damage to the public health or

welfare or to the environment.”? Even more clearly, 42

U.S.C. §9604(b) (emphasis added) (“Section 104(b)”),

heavily relied upon by the United States, provides:

the President may undertake such planning,

legal, fiscal, economic, engineering,

architectural, and other studies. or

investigations as he may deem necessary or

appropriate to plan and direct response actions,

to recover the costs thereof, and to enforce the

provisions of this chapter.

The phrase “enforcement activities” was not added to

CERCLA to assure recovery of “technical services” costs.?

2Since CERCLA was enacted in 1980, the term “response” has been

defined to mean “remove, removal, remedy, and remedial action.”

Section 101(25) (emphasis added). The 1986 SARA amendment to

Section 101(25) did not limit this definition; it expanded it to include

“enforcement activities related thereto.”

3Since CERCLA was enacted in 1980, there has been no challenge

to the proposition that “technical services” are recoverable as “response”

costs. It is virtually unimaginable that any cleanup could be done

without such costs being incurred.

-5-

Despite the United States’ implicit agreement that

attorneys’ fees are encompassed by Congress’ express

provision for recovery of costs of “enforcement activities,”

the United States argues that this language should not be

given effect under Runyon v. McCrary, 427 U.S. 160 (1976),

and Alyeska Pipeline Service Co. v. Wilderness Society, 421

U.S. 240 (1975). Neither Runyon nor Alyeska countenance a

result that defeats Congress’ intent. CERCLA’s language

may be “inartful,” Exxon Corp. v. Hunt, 475 U.S. 355, 363

(1986), and may fail to use “magic words,“ Pennsylvania v.

Union Gas Co., 491 U.S. 1, 13 n.4 (1989), but the Court has

previously given effect to Congress’ intent, as manifested by

CERCLA’s language. Neither Alyeska nor Runyon compel a

different result in this case.‘

In Alyeska and Runyon, there was no statutory language

even remotely suggesting that Congress intended attorneys’

fees to be awarded. The United States, without discussion or

analysis, simply ignores the differences between the statutory

‘The United States continues to argue that the United States is

provided, pursuant to Section 104(b\1)’s provision for the United States

to recover its costs of “legal... studies,” the right to recover its

attorneys’ fees for bringing a cost-recovery action under Section 107(a).

The United States suggests that this language is “adequate” to explicitly

provide for its attorneys’ fees under Alyeska and Runyon. Respondent's

Brief at 22 n.23. In making this argument, the United States implicitly

agrees with Key Tronic’s position that “magic words,” Union Gas, 491

U.S. at 13 n.4, are not necessary to conclude under Alyeska and Runyon

that Congress intended attorneys’ fees to be awarded.

Key Tronic submits that the United States cannot plausibly contend

that recovery of attorneys’ fees incurred in litigation under the rubric

“legal ... studies” meets Runyon and Alyeska but “enforcement

activities” does not. If “enforcement activities” encompasses attorneys’

fees, as Key Tronic submits, and as the United States implicitly agrees,

there is no basis to find it has that meaning for the United States alone.

&

language at issue in this case and the statutory language

construed in Runyon and Alyeska. In this case, Congress’

language providing for the recovery of attorneys’ fees, as

costs of “enforcement activities,” may be inartful, yet even

the United States implicitly agrees that Congress intended to

include attorneys’ fees within the scope of that language.

Thus, unlike the statutes at issue in Runyon and Alyeska,

Congress’ intent that attorneys’ fees be awarded is manifested

in Section 101(25)’s express language and that intent must be

giveneffect.‘

C. ATTORNEYS’ FEES ARE NOT LIMITED TO THE

UNITED STATES.

At bottom, the United States implicitly argues that

Section 101(25) includes attorneys’ fees, but that it has that

meaning only for the United States. The definition of

“response,” which provides for attorneys’ fees as costs of

“enforcement activities,” plainly and unambiguously applies

5The United States also argues that “enforcement activities” does

not encompass fees in light of CERCLA’s citizens suit and

“whistleblower” provisions, which provide for an award of “attorney’s

fees” or “attorney ... fees.” 42 U.S.C. § 9610(c) (whistleblowers); 42

U.S.C. § 9659(f) (citizens suits). These provisions shed no light on the

issue before the Court. As discussed in Petitioner’s Brief at 26, citizens

suit plaintiffs do not incur “response” costs and therefore are ineligible

for attorneys’ fees as costs of “response.” In this light, Congress was

required to provide for recovery of “attorney fees” to citizens suit

plaintiffs to meet the tests set forth in Runyon and Alyeska. The United

States ignores this distinction between citizens suit plaintiffs and persons

such as Key Tronic who are entitled to fees as “response” costs.

Likewise, because “whistleblowers” do not incur “response” costs and

because the “whistleblower” attorneys’ fee provision was contained in

CERCLA as originally enacted, the “whistleblower” fee provision sheds

no light on whether attorneys’ fees are encompassed by the “enforcement

activities” language added by SARA in 1986.

x %

to Key Tronic, which sought recovery under

Section 107(a)(4)(B) for its costs of “response.” Key Tronic

submits that this plain meaning controls. The Court should

reject the United States’ argument that a single term,

“enforcement activities,” has different meanings in the same

statute. Ratzlaf v. United States, 114 S. Ct. 655, 660 (1994) (a

statutory term, especially a term appearing only once, must be

applied “the same way each time it is called into play”).

In an attempt to avoid that rule of statutory construction,

the United States argues that Congress did intend

“enforcement activities” to encompass attorneys’ fees, but

that it intended merely to confirm the United States’

preexisting statutory authority to recover fees under

Section 104(b)(1). Respondent’s Brief at 22-23. This

argument is unpersuasive. The courts had already uniformly

concluded before the 1986 SARA amendments that the

United States had the statutory authority, under

Section 104(b)(1), to recover its fees for bringing a Section

107(a) cost-recovery action. The United States thus seems

to argue that Congress took the trouble to amend CERCLA in

a superfluous manner. Cf, Kungys v. United States, 485 U.S.

759, 778 (1988) (statutes should not be construed to render

any part superfluous).

To avoid a construction of Section 101(25) that renders it

superfluous, the United States contends that Congress acted

®United States v. Northeastern Pharmaceutical & Chemical Co.,

579 F. Supp. 823, 851 (W.D. Mo. 1984), aff'd in part and rev'd in part,

810 F.2d 726 (8th Cir. 1986), cert. denied, 484 U.S. 848 (1987); United

States v. Conservation Chemical Co., 619 F. Supp. 162, 186 (W.D. Mo.

1985); United States v. South Carolina Recycling & Disposal, Inc., 653

F. Supp. 984, 1009 (D.S.C. 1984), aff'd in part and vacated in part, 858

F.2d 160 (4th Cir. 1988), cert. denied, 490 U.S. 1106(1989).

to amend Section 101(25) in order to resolve “controversy,”

Respondent’s Brief at 8, regarding whether the United States

was entitled, pursuant to Section 104(b), to attorneys’ fees for

bringing a Section 107(a) cost-recovery action.’ The United

States cites three cases to suggest a “controversy” that it

claims necessitated congressional action. Each of those

cases held that Section 104(b) provided authority to award

fees to the United States when it brought a Section 107(a)

cost-recovery action. Each of those cases was decided in

1984 or 1985, well before the 1986 SARA amendments to

CERCLA. In the two cases appealed, the opinions are silent

on the issue of fees and that issue does not appear to have

been raised on appeal. The other case was never appealed.

Key Tronic submits that unanimous and unappealed rulings

construing Section 104(b)(1) in favor of the United States are

hardly evidence of controversy necessitating congressional

action.

Even assuming, arguendo, that Congress amended

Section 101(25) in response to such controversy, Congress

responded by amending a definitional section that plainly and

unambiguously applies to a// cost-recovery actions in which a

party seeks recovery of “response” costs, including actions

brought under Section 107(a)(4)(B). The United States

unpersuasively argues that Congress amended a definitional

section plainly applying to all persons but that Congress

intended to provide attorneys’ fees only to the United States.

If Congress had so intended, it would have manifested that

intent by limiting recoverability of attorneys’ fees to the

7As discussed above, the United States implicitly concedes that

Congress intended that attorneys’ fees be awarded as a cost of

“enforcement activities” when making this argument.

8The three cases are the same three cited in footnote 6, above.

-9-

United States, either by expressly so stating in

Section 101(25) or adding the “enforcement activities”

language that provides for fees to Section 107(a)(4)(A),

which is not a definitional section of general application.

Congress did not do so. The plain meaning of the statute

controls. United States v. Ron Pair Enterprises, Inc., 489

U.S.235, 242 (1989).

D. PRIVATE PARTIES ENFORCE CERCLA.

Common usage would suggest that when a person brings

a cost-recovery action to establish that someone else is liable

for cleanup costs under CERCLA, the person is “enforcing”

the statute. To avoid the statute’s plain meaning, the United

States argues that even though the definition of “response”

plainly applies to Key Tronic, and even though it implicitly

concedes that the “enforcement activities” language of that

definition evinces Congress’ intent that fees be recovered,

that definition does not apply to Key Tronic because it did

not “enforce” CERCLA.® The United States constructs this

9The United States does not contest that it paid $1.45 million to the

EPA as a result of Key Tronic’s efforts to enforce CERCLA, including

its efforts to enforce CERCLA’s liability scheme. Pet. Cert.

Appendix B-14 n.4, Key Tronic Corp. v. United States, 766 F. Supp. 865,

872 n.4 (E.D. Wash. 1991), rev'd, 984 F.2d 1025 (9th Cir.), cert.

granted, 126 L. Ed. 2d 592 (1993). The United States asserts, however,

that Key Tronic began to take steps to enforce CERCLA only “after

various neighbors of the site sued petitioner.” Respondent’s Brief at 2.

The United States cites nothing in the record for that proposition. There

is nothing. To the contrary, the record demonstrates that Key Tronic took

steps to clean up the environment and to protect the health of people near

the Colbert Landfill immediately after pollution was discovered in 1980,

before suit was filed in Wilson v. Key Tronic Corp. , 701 P.2d 518 (Wash.

Ct. App. 1985). See, e.g., CR 40, Ex. 11, Request for Admission No. 10

(Operator of Landfill, William Schmidt, admits that “Plaintiff Key

Tronic has spent money since 1980 to fund a cleanup of the groundwater

-10-

argument from its “reading,” Respondent’s Brief at 15 n.12,

that Key Tronic’s Section 107(a) cost-recovery action does

not further CERCLA’s “primary goals.” /d. at 17. This

argument should be rejected.

CERCLA’s legislative history is clear:

CERCLA has two goals: (1) to provide for

clean-up if a hazardous substance is released

into the environment or if such release is

threatened, and (2) to hold responsible parties

liable for the costs of these clean-ups.

H.R. Rep. No. 99-253 (III), 99th Cong., 2d Sess. 15 (1985),

reprinted in 1986 U.S. Code Congressional and

Administrative News (U.S.C.C.A.N.) 3038. In accord with

this legislative history, the Court has recognized both of

CERCLA’s goals:

contamination emanating from Colbert Landfill.”); CR 40, Ex. 12

(Alumax defendants admit that “Plaintiff Key Tronic has spent money

since 1980 investigating whether, and to what extent, hazardous

substances have been released into and from the Colbert Landfill.”).

Accord CR 40, Ex. 14, at 94, 97 (trial testimony of Spokane County

employee, Mr. Taam, regarding Key Tronic’s early cleanup efforts);

CR 40, Ex. 17, at 8, State of Washington v. County of Spokane, C-89-

033-RJM (Consent Decree indicating same).

Key Tronic notes that even had the Wilson suit been filed before

Key Tronic began to enforce CERCLA, which it was not, it is of no

significance because a party’s motives in enforcing CERCLA are

irrelevant. General Electric Co. v. Litton Industrial Automation Systems,

Inc., 920 F.2d 1415, 1418 (8th Cir. 1990), cert. denied, 499 U.S. 937

(1991). What matters is what a party actually does, i.e., enforce

CERCLA by cleaning up the environment and enforcing CERCLA's

liability scheme requiring all polluters to pay.

Congress did not think it enough, moreover, to

permit only the Federal Government to recoup

the costs of its own cleanups of hazardous-

waste sites; the Government’s resources being

finite, it could neither pay up front for all

necessary cleanups nor undertake many

different projects at the same time. Some help

was needed, and Congress sought to encourage

that help by allowing private parties who

voluntarily cleaned up hazardous-waste sites to

recover a proportionate amount of the costs of

cleanup from the other potentially responsible

parties.

Union Gas, 491 U.S. at 21-22 (plurality opinion).

The United States ignores CERCLA’s twin goals and

simply chooses to designate one of those goals as “primary”

to suit its argument. Key Tronic submits that there is no basis

for claiming that one of CERCLA’s goals is “primary” and,

presumably, the other “secondary.” Even were there a basis

to distinguish “primary” and “secondary” goals, which there

is not, the United States offers no reason why enforcing a

secondary goal is any less of an “enforcement activity” than

the enforcement of a “primary” goal.'°

“Indeed, the United States’ argument is undercut by the legislative

history it quotes, which states that prior to SARA the “primary

responsibilities for cleanup and enforcement are vested in the President.”

Respondent's Brief at 17 n.14 (quoting H.R. Rep. No. 253, 99th Cong.,

2nd Sess., Pt. V, at 5 (1985)). This history implies that a// persons have

a role in “cleanup and enforcement,” while the President has a “primary”

role. Moreover, it summarizes then-existing law, i.e., the CERCLA law

before SARA. The Court acknowledged in Union Gas that SARA

increased the government's reliance on private persons to carry out

CERCLA's goals. Union Gas, 491 U.S. at 21-22. Thus, far from

-12-

The United States, citing Thunder Basin Coal Co. v.

Reich, 114 S. Ct. 771 (1994), argues that “enforcement” of

statutes that provide for regulatory enforcement should be

understood to mean enforcement by governmental regulators.

Nothing in that case even remotely suggests that private

parties who bring suit under an express private right of action

do anything other than enforce such a statute. In advancing

this argument, unsupporte Sy Thunder Basin Coal, the

United States ignores the ourt’s prior decision in Cargill,

Inc. v. Monfort of Colorado, Inc., 479 U.S. 104, 109 (1986).

In Cargill, the Court stated that an express statutory right of

action provides the “vehicle for private enforcement” of the

laws. Jd. (discussing private right of action in context of

antitrust laws). See also Alyeska, 421 U.S. at 263 (noting that

statutes providing for award of fees generally suggest that

Congress has “opted to rely heavily on private enforcement to

implement public policy”). (Emphasis added) The United

States has no response to and does not address these

authorities.!!

The United States next cites “numerous” references in

CERCLA to forms of the word “enforce” that refer to

governmental enforcement Respondent’s Brief at 18-21. In

this regard, Key Tronic does not deny, and has never denied,

that the United States also enforces CERCLA. In any event,

the United States’ argument that the definitional term

supporting the United States’ argument, this history supports Key

Tronic’s arguments that it enforcedCERCLA.

'\Interestingly, governmental regulators in the Federal Trade

Commission also enforce the Sherman Act, 15 U.S.C. § 1 ef seq., see,

e.g., FTC v. Brown Shoe Co., 384 U.S. 316 (1966), the same Act that

provides for “private enforcement” pursuant to its private right of action.

Cargill, 479 U.S. at 109.

-13-

“enforcement activities” is limited to governmental regulators

fails because the United States concedes that only a

“preponderance” of the references supports its argument.

Respondent’s Brief at 20. Most importantly, the United States

concedes that the particular statutory provision at issue,

Section 101(25), “could be construed to include activities by

[non-governmental] parties.” Respondent’s Brief at 20. See

also 42 U.S.C. § 9622(f(6\C) (contemplating that “future

enforcement action under section 106 or 107 of this title”

may be taken by the government or by a private party that

settles with the government). Moreover, the United States’

statement that “whistleblowers” and citizens suit plaintiffs

“enforce” CERCLA, Respondent’s Brief at 15 n.12,

demonstrates that governmental regulators are not the only

enforcers of CERCLA. Like Key Tronic, those persons

enforce CERCLA pursuant to the private right of action

granted them in the statute. Cf Cargill, 479 U.S. at 109. The

United States has no persuasive argument that Key Tronic did

not “enforce” CERCLA by carrying out CERCLA’s twin

goals of cleaning up the environment and assuring that all

persons who pollute must pay for the cleanup. !2

Last, the United States relies upon a committee report to

make two incompatible arguments that Key Tronic did not

“enforce” CERCLA. The report provides:

The section also modifies the definition of

“response action” to include __ related

enforcement activities. The change will

'2The United States suggests that Key Tronic does not argue that

attorneys’ fees it expended in negotiating the Consent Decree are

recoverable as costs of “enforcement activities.” Respondent's Brief at

16 n.13. The United States is mistaken; Key Tronic made exactly that

argument in its Opening Brief. See Petitioner’s Brief at 20.

-14-

confirm the EPA’s authority to recover costs

for enforcement actions taken against

responsible parties.

H.R. Rep. No. 99-253(I), 99th Cong., 2d Sess., pt. 1, at 66-67

(1985), reprinted in 1986 U.S.C.C.A.N. 2835, 2848-49. On

the one hand, the United States seemingly contends that this

report demonstrates that Congress actually intended to amend

the meaning of “response action,” a term used in

Section 104(b), but mistakenly amended Section 101(25)

instead. Respondent’s Brief at 23 n.25, 25 n.28. A casual

review of the entire committee report demonstrates, however,

that Congress intended to amend the definition of “response,”

the term in Section 101(25), not “response action,” the term

used in Section 104(b\(1). Accord H.R. Conf. Rep. No. 99-

962, 99th Cong., 2d Sess. 185 (1986), reprinted in 1986

U.S.C.C.A.N. 3276, 3278; H.R. Rep. No. 99-253(V), 99th

Cong., 2d Sess., pt. 1, at 5-6 (1985), reprinted in 1986

U.S.C.C.A.N. 3124, 3129. The United States’ argument is

thus factually meritless and is contrary to the statute’s plain

language.

On the other hand, based upon this same committee

report, the United States inconsistently argues that Congress

did intend to amend Section 101(25), but that it intended its

amendment of that definitional section to benefit only the

United States.'2 Key Tronic submits that the committee

report supports the United States’ argument, if at all, only by

negative inference. Such a negative inference from a single

'3Key Tronic agrees that Section 101(25), a definitional section,

applies to the EPA. A committee report noting this unremarkable fact,

however, in no way excludes application of a definitional section to other

persons in the statute. Cf Ratzlaf, 114 S. Ct. at 660 (single term should

have single meaning throughout statute).

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sentence of a committee report is insufficient to overcome

Section 101(25)’s plain language, which unambiguously

applies to all persons seeking to recover costs of “response.”

The United States fails to show that application of the

statute’s plain language produces results demonstrably at

odds with Congress’ express language. Accordingly, the

statute’s plain meaning must control. Ron Pair Enterprises,

489 U.S. at 242.

Key Tronic submits that the United States’ arguments

seeking to avoid application of the .atute’s plain language

are unpersuasive and should be rejected. Section 101(25)’s

definition of “response” applies to Key Tronic’s action

against the Air Force and that definition evinces Congress’

intent that fees be awarded. The United States does not meet

Key Tronic’s argument that such a reading of the statute is

supported by and furthers CERCLA’s underlying policies.

Respondent’s Brief at 9 n.6 (dismissing Key Tronic’s

discussion of CERCLA’s policy as of “little relevance.”).'4

In this regard, Key Tronic has not argued that CERCLA’s

policy mandates the award of fees. Instead, Key Tronic

submits that the interpretation of the statutory language to

provide for an award of fees as enforcement activities is

completely consistent with and furthers CERCLA’s

underlying policies.

The argument of the Sand Springs Superfund PRP Group

that the award of fees will encourage intransigent litigation

'4Indeed, while the United States sees these arguments as of “little

relevance” when they favor Key Tronic’s interpretation, the United

States itself offers policy arguments to support its interpretation that

Section 104(b\(1) (providing for recovery of “legal . . . studies” costs)

provides it with a statutory basis to recover its fees under Runyon and

Alyeska. Respondent's Brief at 14-15.

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positions is neither persuasive nor well taken. The question

before the Court is what Congress intended. In this regard,

the “enforcement activities” language manifests Congress’

intent that fees be recovered as “response” costs. Moreover,

as more than one court has observed, that intent is furthered

by providing attorneys’ fees to persons who enforce

CERCLA’s goals. See Donahey v. Bogle, 987 F.2d 1250,

1256 (6th Cir.), cert. denied, 126 L. Ed. 2d 594 (1993);

General Electric, 920 F.2d at 1422.'5

As discussed fully above, Congress manifested its intent

that attorneys’ fees be awarded as costs of “enforcement

activities” to persons who bring suit to recover their

“response” costs. That manifest intent is paramount and

controls. Accordingly, the Ninth Circuit erred when it failed

to give effect to Congress’ intent, and its judgment should be

reversed.

Il. ATTORNEYS’ FEES ARE OTHERWISE

RECOVERABLE.

Even if the American Rule is held to bar recovery of

attorneys’ fees expended in the actual cost-recovery

litigation, Key Tronic should still be entitled to recover

'SEven were there instances where awarding attorneys’ fees might

conceivably encourage intransigence by a cost-recovery plaintiff, a

district court has ample means to address such problems if they arise.

For example, under CERCLA, the district court is to award only

“necessary” costs of response under Section 107(aX4\(B). Independent

of that control on attorneys’ fees, Fed. R. Civ. P. 68 also provides

protection to defendants. See Marek v. Chesny, 473 U.S. 1, 11 (1985)

(“In a case where a rejected settlement offer exceeds the ultimate

recovery, the plaintiff—although technically the prevailing party—has

not received any monetary benefits from the post-offer services of his

attorney.”)

AF

nonlitigation attorneys’ fees as part of its “response” costs.

There is no record support for the United States’ contention

that nonlitigation fees were incurred by Key Tronic to

“criticiz[e] and oppos[e] a remedy proposed by the applicable

government agency,” and to “resist{] EPA’s attempt to

enforce the statute.” Respondent’s Brief at 28. Those factual

contentions are insupportable. '6

The district court found as follows:

The court finds that the attorneys’ fees and

executive’s opportunity costs in negotiating

Key Tronic’s consent decree are necessary

response costs in cleaning up the Colbert

landfill. The court cannot accept the

Government’s argument that such costs are not

recoverable solely because attorneys (as

opposed to engineers) carried out work

necessary to solving the problems at Colbert.

The court further notes that the Government

does not contend that these fees are recoverable

only as “enforcement activities.” Because these

expenses were necessary response costs, the

'6There is nothing in the record to support these factual statements.

As set forth in Petitioner’s Statement of Facts, Petitioner’s Brief at 2-7,

Key Tronic immediately admitted its responsibility for pollution at the

Colbert Landfill and immediately took steps to address the harm to the

environment and to ameliorate health hazards. The United States, on the

other hand, did nothing and only belatedly met a portion of its CERCLA

obligations, paying $1.45 million toward the cleanup costs in its “de

minimis” settlement with the EPA against $4.2 million from Key Tronic,

on account of Key Tronic’s efforts to enforce CERCLA. Additionally,

contrary to the United States’ suggestion, Respondent's Brief at 3, Key

Tronic objected to the Air Force’s settlement with another federal

agency, the EPA. CR23, Ex. 2.

court finds that these costs are recoverable

under CERCLA.

Pet. Cert. App. B-14, Key Tronic, 766 F. Supp. at 872-73.!7

CERCLA provides for the recovery of costs incurred “to

prevent, minimize, or mitigate damage to the public health or

welfare or to the environment.” 42 U.S:C. § 9601(23). The

FMC Corp. conclusion that nonlitigation fees are recoverable

costs of response, independent of the American Rule, is

supported by the courts’ construction of what constitute

CERCLA response costs. See, e.g., General Electric Co., 715

F. Supp. 949, 954-55 (W.D. Mo. 1989) (awarding attorneys’

fees related to the “administrative” phase of the matter and

consultant fees related to preparation of the Remedial

Investigation and Feasibility Study and work plan), aff'd, 920

F.2d 1415 (8th Cir. 1990), cert. denied, 499 U.S. 937 (1991).

This case is very similar to General Electric Co.. In both

cases, the plaintiff took steps to ensure the “prompt cleanup

of [a] hazardous waste site” 920 F.2d at 1422. In both cases,

the defendant did not “participate{] in any of the

investigation, evaluation, or cleanup of the site.” Jd. at 1417.

In short, the FMC Corp. rationale for awarding

nonlitigation attorneys’ fees as costs of response is wholly

'7Not only was this issue presented to and decided by the district

court, the recoverability of nonlitigation attorneys’ fees is also fairly

subsumed within the questions presented on petition for writ of certiorari,

as well as having been raised before the Ninth Circuit Brief of Key

Tronic Corporation, at 25-28, Key Tronic Corp. v. United States, Ninth

Circuit No. 91-36021 (filed Mar. 13, 1992). Thus, Key Tronic’s

recovery of attorneys’ fees under the rationale of FMC Corp. v. Aero

Industries, Inc., 998 F.2d 842 (10th Cir. 1993), is properly before the

Court and a remand is appropriate if the Court adopts the FMC

reasoning.

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consistent with CERCLA’s providing for recovery of

response costs incurred to investigate contamination and

implement cleanups. Key Tronic submits that if litigation

attorneys’ fees are not recoverable, under the American Rule,

that nonlitigation fees are nonetheless recoverable as

response costs and a remand for entry of a modified award

under the parties’ stipulation is appropriate.

IV. CONCLUSION

For the reasons stated, the Court should reverse the

judgment of the Ninth Circuit and remand with instructions to

(1) reinstate the district court judgment, (2) award fees and

costs on appeal, and (3) calculate interest on the district court

judgment.

PERKINS COIE

By

James R. Moore

Counsel of Record

Mark W. Schneider

Michael Himes

Attorneys for

Key Tronic

Corporation