# Record and brief — Burlington N. & S. F. R. Co. v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385015_0097%3A0 ## Record - **Collection:** Supreme Court brief - **Document type:** Record and brief - **Published:** January 1, 2009 - **Citation:** 556 U.S. 599 ## Text Docket for 07-1601 Page | of 3 No. 07-1601 Vide 07-1607 Title: Burlington Norther and Santa Fe Railway Company, et al., Petitioners v. United States, et al. Docketed: June 25, 2008 Lower Ct: United States Court of Appeals for the Ninth Circuit Case Nos.: (03-17125, 03-17153, 03-17169) Decision Date: March 25, 2008 Questions Presented ~~~Date~~~ ~~~~~~~Proceedings and Orders~~~~~~~~~~~~~~~~~~~~~ Jun 23 2008 Petition for a writ of certiorari filed. (Response due July 25, 2008) Jun 23 2008 Appendix of Burlington Northern and Santa Fe Railway Company, et al. filed. Jul 11 2008 Order extending time to file response to petition to and including August 25, 2008, for all respondents. Jul 25 2008 Brief amici curiae of Chamber of Commerce of the United States, et al. filed. VIDED. Jul 25 2008 Brief amicus curiae of Association of American Railroads filed. Aug 25 2008 Brief of respondents United States, et al. in opposition filed. VIDED. Sep 9 2008 Reply of petitioners Burlington Northern and Santa Fe Railway Company, et al. filed. (Distributed) Sep 10 2008 DISTRIBUTED for Conference of September 29, 2008. Oct 12008 Petition GRANTED and consolidated with No. 07-1607, and a total of one hour is allotted for oral argument. Oct 31 2008 Consent to the filing of amicus briefs, in support of either party or neither party, received from counsel for the petitioners in 07-1601. VIDED. Nov 3 2008 Consent to the filing of amicus briefs, in support of either party or neither party, received from counsel for the petitioners in case 07-1607. VIDED. Nov 17 2008 Joint appendix filed. Statement of costs received. VIDED. Nov 17 2008 Brief of petitioners Burlington Northern and Santa Fe Railway Company, et al. filed. VIDED. Nov 21 2008 Brief amicus cunae of Product Liability Advisory Council, Inc. filed. VIDED. Nov 24 2008 Brief amicus curiae of Association of American Railroads filed. VIDED. Nov 24 2008 Brief amici curiae of Chamber of Commerce of the United States, et al. filed. VIDED. Nov 24 2008 Brief amici curiae of Newmont USA Limited and CanadianOxy Offshore Production Co filed. VIDED. Nov 24 2008 Brief amicus curiae of Civil Justice Association of California filed. Nov 24 2008 Brief amicus curiae of General Electric Company filed. VIDED. Nov 24 2008 Brief amicus curiae of Washington Lega! Foundation filed. VIDED. Dec 5 2008 CIRCULATED. Dec 8 2008 SET FOR ARGUMENT ON Tuesday, February 24, 2009 Dec 16 2008 The time for respondent Department of Toxic Substances Control within which to file the brief on the merits is extended to and including December 22, 2008 VIDED Dec |7 2008 Brief of respondent United States filed. VIDED. (Distributed) Docket for 07-1601 Page 2 of 3 Dec 22 2008 Brief of respondent California filed. VIDED. (Distributed) Dec 23 2008 Joint motion for divided argument filed by petitioners. VIDED. Dec 24 2008 Record received from the U.S.C.A. for the 9th Circuit. (1 envelope) Dec 31 2008 Record received from the U.S.D.C. for the Eastern District of California. (25 boxes) This record was sent by the U.S.C.A. for the 9th Circuit. Jan 12 2009 Motion for divided argument filed by petitioners GRANTED. VIDED. Jan 162009 Reply of petitioners Burlington Northern and Santa Fe Railway Company, et al. filed. VIDED. (Distributed) Feb 24 2009 Argued. For petitioner in No. 07-1607: Kathleen M. Sullivan, New York, N.Y. For petitioners in No. 07-1601: Maureen E. Mahoney, Washington, D.C. For respondents: Malcolm L. Stewart, Deputy Solicitor General, Department of Justice, Washington, D.C. ee ~~Name~~~ ~ ~~ ~~~~~~~Address ~~Phone~~~ Attorneys for Petitioners: Maureen E. Mahoney Latham & Watkins LLP (202) 637-2200 Counsel of Record 555 11th Street, NW Suite 1000 Washington, DC 20004 Maureen.Mahoney@LW .com Party name: Burlington Northern and Santa Fe Railway Company, et al. Attorneys for Respondents: Kenneth P. Alex Senior Assistant Attorney General (510) 622-2137 Counsel of Record 1515 Clay Street, 20th Floor P.O. Box 70550 Oakland, CA 94612-0550 Party name: California Edwin S. Kneedler Acting Solicitor General (202) 514-2217 Counsel of Record United States Department of Justice 950 Pennsylvania Avenue, N W Washington, DC 20530-0001 Party name: United States. et al Other: Fred J. Lliestand 1121 L Street (916) 448-5100 Suite 404 Sacramento, CA 95814 Party name’ Civil Justice Association of California Thomas C. Jackson Baker Botts L.L.P. (202) 639-7700 1299 Pennsylvania, Ave, N.W. Washington, DC 20004-2400 Docket for 07-1601 Page 3 of 3 Party name: Chamber of Commerce of the United States, et al. Charles H. Moellenberg Jr. Jones Day (412) 391-3939 500 Grant Street, Suite 4500 Pittsburgh, PW 15219-2502 Party name: Product Liability Advisory Council, Inc. Joel W. Nomkin Perkins Coie Brown & Bain 602351800 2901 N. Central Avenue Suite 2000 Phoenix, AZ 85012-2788 jnomkin@perkinscoie.com Party name: Newmont USA Limited, and CanadianOxy Offshore Production Co Carter G. Phillips Sidley Austin LLP (202) 736-8600 1501 K Street, N.W. Washington, DC 20005 cphillips@sidley com Party name: Association of American Railroads Lawrence A. Salibra Il 1638 Berkshire Road (440) 336-4129 Gates Mill, OH 44040 Party name: Washington Legal Foundation Laurence H. Tribe Houser Hall 420 (617) 495-4621 1575 Massachusetts Avenue Cambridge, MA 02138 Party name: General Electric Company PETITION FOR WRIT OF CERTIORARI q7 ) wnets it i _ b. 071601 JUN 23 2008 No. OFFICE OF THE CLERK In the Supreme Court of the Gnited States THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, and UNION PACIFIC RAILROAD COMPANY, PETITIONERS, v. UNITED STATES OF AMERICA AND DEPARTMENT OF TOXIC SUBSTANCES CONTROL, STATE OF CALIFORNIA, RESPONDENTS. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT PETITION FOR A WRIT OF CERTIORARI CHARLES G. COLE MAUREEN E. MAHONEY BENNETT EVAN COOPER Counsel of Record STEPTOE & JOHNSON J. SCOTT BALLENGER LLP ERICA GOLDBERG 1330 CONNECTICUT Avk. LATHAM & WATKINS LLP WASHINGTON, DC 20036 595 LITH STREET, NW SUITE 1000 WASHINGTON, DC 20004 (202) 637-2200 Counsel for Petitioners QUESTION PRESENTED The Comprehensive, Environmental, Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. §9601 et seq., allows the government to obtain reimbursement for the costs of remediating hazardous waste sites from the owners and operators of land on which a disposal of hazardous substances has occurred. Because even passive landowners may be subjected to CERCLA liability, Congress removed language from early CERCLA bills mandating joint and several liability for multiple defendants who own or operate a particular site. In the present case, the Ninth Circuit nevertheless imposed joint and several liability for the entire cost of a facility’s remediation on two landlords, even though they owned only a portion of the overall site for a fraction of its period of operation, and the parcel they owned required no remediation. The question presented is: Whether the Ninth Circuit erred by reversing the district court’s reasonable apportionment of responsibility under CERCLA, and by adopting a standard of review and proof requirements that depart from common law principles and conflict with decisions of other circuits. ‘i LIST OF PARTIES AND RULE 29.6 STATEMENT BNSF Railway Company (“BNSF”), whose name changed from The Burlington Northern and Santa Fe Railway Company, is the successor in interest to the Atchison Topeka and Santa Fe Railway Company. BNSF has publicly traded debt securities listed on the New York Stock Exchange. BNSF is also a wholly- owned subsidiary of Burlington Northern Santa Fe Corporation, which is a publicly held corporation whose common stock is listed on the New York Stock Exchange, Chicago Stock Exchange, and Pacific Exchange. Approximately 18.5% of the stock of Burlington Northern Santa Fe Corporation is owned by Berkshire Hathaway Inc. Union Pacific Railroad Company (“UPRR”) was formerly known as Southern Pacific Transportation Company. Union Pacific Corporation owns 62.6% of UPRR’s stock, and also wholly owns Southern Pacific Rail Corporation. Union Pacific Corporation has issued publicly traded securities, and UPRR has issued publicly traded debt securities. Aiso petitioning from the decision below, by separate petition for certiorari, is: Shell Oil Company (“Shell”), a wholly owned subsidiary of Shell Petroleum, Inc. TABLE OF CONTENTS Page RE Es sy: | eR i LIST OF PARTIES AND RULE 29.6 ali rinasntciseecepeedacannbceuneensiandensteneniak ii I ic crscrncssstcseccccssacusncssosansosanessen iii SE Ge EES ID ovnccccscevnccsscccssosessctnsonsenstesnes Vv ia ac ict esteneiinntonh 1 ETS A SR 1 CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED...................ccc.cccececeesees 1 pw ey | 4 td) Lo! \ | SEC 1 REASONS FOR GRANTING THE WRIT................. 18 I THE NINTH CIRCUITS DECISION CONFLICTS WITH GOVERNING COMMON LAW PRINCIPLES AND THE DECISIONS OF OTHER CIRCUITS ................ 20 A. The Ninth Circuit’s Proof Requirements Are Inconsistent With Restatement Principles ......................... 20 B. The Ninth Circuit’s Reasoning Conflicts With Decisions Of Other RESP actor eee Ne a neeewenT TT 26 C. The Circuits are Further Divided on The Appellate Standard of EERE ar ea SN ee oe ae ee 30 iv TABLE OF CONTENTS—Continued Page II. THIS CASE PRESENTS ISSUES OF NATIONAL IMPORTANCE THAT REQUIRE GUIDANCE FROM THIS SE heii cesnnindpinaienpnaneiinilnreiienndeniinisniiaianiceiaiil 32 SINT isinecisiccsvcnititstcnninssousiiaventsiiiumeddgeiimasiicttaadiiian 35 APPENDIX United States v. Burlington Northern & Santa Fe Railway Co., 520 F.3d 918 (9th Cir. Mar. 25, 2008)..............0.ccc0eee la United States v. Atchison, Topeka & Santa Fe Railway Co., Nos. CV-F-92-5068 OWW, CV-F-96-6226 OWW, CV-F-96-6228 OWW, 2003 WL 25518047 (E.D. Cal. July 15, 2008) ..................00e 82a United States v. Burlington Northern & Santa Fe Railway Co., 502 F.3d 781 (9th Cir. Sept. 4, 2007)...............0.. 263a Oe rs I ncincctccscicinscincatsencssecnnieionanens 3lla Sr IIIT sci aciciasiincnhcsnncneninintniindesindiiiniidencinnitvaiali 317a Vv TABLE OF AUTHORITIES Page(s) CASES Continental Title Co. v. Peoples Gas Light & Coke Co., 959 F’. Supp. 893 (N.D. Ill. 1997) .............cccccscssssseeees 23 Cooper Industries, Inc. v. Aviall Services, Inc., Se FED cetineviniseniseserenstersmnesnnntitinenainiaenit 34 Eastern Enterprises v. Apfel, eI aici ccnsicnictncniicctannesnemninenbiesnsetadidaebanin 23 Federal Savings & Loan Insurance Corp. v. Reeves, SES FBG 190 GEER Ce. 1967) n..ccrccccccccnsscnrsccssconsseseses 30 General Electric Co. v. AAMCO Transmissions, Inc., O62 F.2d 281 (2d Cir. 1902)........0ccecccccsoceserecsecesees 25, 26 In re Bell Petroleum Services, Inc., 3 F.3d 889 (Sth Cir. 1993) ....................-cscsessees passim Northern States Power Co. v. Fidelity & Casualty Co. of New York, 523 N.W.2d 657 (Minn. 1994) .0..............cccsccsseecesseeeees 34 O’Neil v. Picillo, BD Fe BI Cate Ce. Ba ccccsesesencvcencsnssessnstossnsenness 35 Sauer v. Burlington Northern Railroad Co., 106 F.3d 1490 (10th Cir. 1996) .................cccccccccesceeees 29 vi TABLE OF AUTHORITIES United States v. Alcan Aluminum Corp., oo LL 31 United States v. Atlantic Research Corp., ee 4, 34 United States v. Chem-Dyne Corp., 572 F. Supp. 802 (S.D. Ohio 1983) ...........c..000 4, 5, 32 United States v. Gencorp, Inc., 93 F. Supp. 928 (N.D. Ohio 1996) ............0...-cceceeeeeees 34 United States v. Hercules, Inc., 247 F.3d 706 (8th Cir.), cert. denied, 534 U.S. rn 18, 29, 30 United States v. Kramer, 19 F. Supp. 2d 273 (D.N.J. 1998) ........ccccceeeceeseeeseeeees 34 United States v. Southeastern Pennsylvania Transportation Authority, i Se 34 United States v. Township of Brighton, 153 F.3d 307 (6th Cir. 1998) ...........ccsrserererecsrseees 29, 30 STATUTES AND REGULATIONS iI 28 U.S.C. §$1254(1). eee ee ee 1 TABLE OF AUTHORITIES SD UNIO reading: Shell was deeply involved in the delivery process: The district court found that Shell determined and arranged for the means and methods of delivery of D-D to the Arvin plant and detailed loading and unloading procedures. It also found that the trucking companies with which Shell contracted for delivery did the transfers for most of the relevant period. It was only in the early 1980s that Shell dictated that B & B personnel should instead do the unloading. 2. Renumber footnote 7 on page 792 as footnote 8 and replace its text with . 3. In the last paragraph on page 792, replace with . 4. In the first paragraph on page 793, replace with . 4a 5. In the first full paragraph on page 794, replace with . 6. Replace with in the second-to-last sentence of footnote 16 on page 795. 7. Replace the paragraph beginning on page 795 and continuing to page 796 with: The question, then, is what the uniform federal law should be. Once again, all the circuits that have addressed this question have followed Chem-Dyne, holding that the appropriate starting point for a common law rule of apportionment applicable to CERCLA cases is Section 433A of the Restatement of Torts. See Hercules, 247 F.3d at 716 & n. 9, 717 (noting that courts support the divisibility doctrine as borrowed from the Restatement); Bell Petroleum, 3 F.3d at 895 (relying on the Restatement); Chem Dyne, 572 F.Supp. at 810 (establishing this method). We agree that harm may be apportioned when “there exists a reasonable basis for divisibility” of a single harm or when several “distinct harms” are _ present. Hercules, 247 F.3d at 717.18 18 We of course agree with our sister circuits that, if adequate information is available, divisibility may be established by “volumetric, chronological, or other types of evidence,” Hercules, 247 F.3d at 719 (citing Bell Petroleum, 3 F.3d at 895-96), including appropriate geographic considerations, see United States v. Township of Brighton (“Brighton IT’), 282 F.3d at 919-20 (6th Cir.2002), Beli Petroleum 3 F.3d at 903-04. We hold only that, in this case, Shell and the Railroads failed to show that “expert testimony and other evidence establishes a factual basis for making a reasonable estimate that will fairly apportion liability.” Bell Petroleum, 3 F.3d at 903. “{A}pproaches to divisibility will 5a Because CERCLA’s statutory liability scheme differs from the common law in important respects, however, our sister circuits have recognized that its principles must be somewhat modified to fit the CERCLA context. See, e.g., Bell Petroleum, 3 F.3d at 902 (“Restatement principles must be adapted, where necessary, to implement congressional intent with respect to liability under the unique statutory scheme of CERCLA.”); Hercules, 247 F.3d at 717 (The Restatement is “the starting point ....[but] only to the extent that it is compatible with the provisions of CERCLA.”). We concur in this general conclusion and acknowledge, in particular, that there are two areas where the Restatement approach is a somewhat poor fit and requires slight modifications to ensure that its approach comports with the liability and remediation scheme of CERCLA. First, as we describe infra, there are important distinctions between causation as conceived in the Restatement and causation in the context of CERCLA. Unlike the Restatement’s common law causation, CERCLA affixes liability based upon its PRP provisions, which define classes of liable parties based upon a party’s statutorily-defined nexus to the contaminated site. And second, the concept of “harm” in the Restatement as actual injury does not correspond easily to CERCLA’s priorities. Contamination and the cost of remediation are both relevant for the “harm” analysis under CERCLA. Finally, we recognize that the vary tremendously depending on the facts and circumistances of each case,” Hercules, 247 F.3d at 717, and approaches that were inappropriate or inadequately supported in this case may be available in other circumstances. 6a Restatement’s emphasis on objective considerations to determine whether apportionment is justified in a given case comports with CERCLA’s strict liability scheme. Equitable considerations may play a role in a later contribution action amongst liable parties, but not in an action such as this where the only relevant issue is whether there is a reasonable basis, founded in record evidence, to apportion damages amongst defendants. 8. In the first full paragraph on page 796, replace with . 9. Add before in the paragraph beginning on page 796 and continuing to page 797. 10.In the second full paragraph on page 797, replace with: The statute thus departs from Restatement principles by abjuring the traditional “causation” principles in favor of a nexus concept defined by its PRP provisions. Where, as here, the pertinent PRP status is as landowner, the landowner can establish divisibility by demonstrating a reasonable basis for concluding that a certain proportion of the contamination did not originate on the portion of the facility that the landowner owned at the time of the disposal. 11. Add the following text after the last full paragraph on page 798: In so holding, we begin from the fundamental difference between apportionment and contribution. Apportionment, which is_ the relevant question in this case, looks to whether Ta defendants may avoid joint and several liability by establishing a fixed amount of damage for which they are liable. Section 433A of the Restatement speaks to this issue. Contribution is a distinct concept. If there is insufficient evidence to support apportionment, jointly and severally liable PRPs may still seek to recover from each other in a later contribution action. See, e.g. RESTATEMENT (THIRD) OF TORTS § 23(a) (2000) (“When two or more persons are or may be liable for the same harm and one of them discharges the liability of another by settlement or discharge of judgment, the person discharging the liability is entitled to recover contribution from the other, unless the other previously had a valid settlement and release from the plaintiff.”). As we explain below, CERCLA permits equitable considerations to be taken into account in a contribution action amongst PRPs, but CERCLA’s strict liability scheme does not permit equitable considerations to have any bearing in an action to determine whether defendants have presented sufficient evidence to apportion liability. 12. Beginning on page 798 and continuing to page 799, replace with: Section 9613(, added to CERCLA in 1986, provides for contribution actions among PRPs once liability to the plaintiffs has been determined. That provision describes, quite generally, the considerations applicable in a contribution action for determining whether one PRP can collect from another a portion of the costs for which it has been held liable: “In resolving contribution claims, the court may 8a allocate response costs among liable parties using such equitable factors as the court determines are appropriate.” §9613(f) (emphasis added).26 In contrast, CERCLA contains no _ provision explicitly providing for initial apportionment of liability. And § 433A(1)(b) of the Restatement and the appended commentary concerning divisibility are silent as to equitable considerations.27 As noted, this circuit heretofore has not addressed divisibility analysis. But the implication from our cases deciding § 9613(f contribution issues is that the proper time to focus on such factors is at the contribution phase, not the liability phase. See, e.g., Carson Harbor Vill., 270 F.3d at 871 (noting that the “contribution provision aims to avoid a variety of scenarios by which a comparatively innocent PRP might be on 26 Among the equitable factors used in CERCLA contribution cases are the so-called “Gore factors.” See Hercules, 247 F.3d at 718. Those factors are derived from the amendment that then- Representative Gore introduced in 1980 to alleviate the harshness of mandatory apportionment, which at that time was a part of the bill. See 126 CONG. REC. 26782 (1980) (statement of Rep. Gore). Although these factors are appropriate in contribution cases, they are not, for the reasons discussed in the text, appropriate considerations at the liability stage. 27 The only mention of equity in Restatement § 433A is in comment h, regarding “[e)xeceptional cases.” Comment h suggests that im cases of insolvent defendants, when an “innocent plaintiff would be forced to bear the share of the loss due to the defendant from whom he could not collect damages,” courts may refuse to allocate harm to avoid “injustice to the plaintiff.” Because we determine that there is no reasonable basis for apportioning the defendants’ harm, we do not reach the question of whether the considerations of comment h are applicable here 9a the hook for the entirety of a large cleanup bill’’); Pinal Creek, 118 F.3d at 1301 (“A PRP’s contribution liability will correspond to that party’s equitable share of the total liability and will not be joint and several.”). Other circuits have been careful to delineate the difference between the equitable considerations pertinent to contribution under §9613(f) and the objective considerations pertinent to divisibility under §9607(a). See Hercules, 247 F.3d at 718; Township of Brighton, 153 F.3d at 318; Bell Petroleum, 3 F.3d at 901. As the Sixth Circuit has noted, divisibility analysis, unless carefully limited, has the potential to eviscerate the strict liability principles of CERCLA entirely, “because defendants who can show that the harm is divisible, and that they are not responsible for any of the harm” could whittle their liability to zero. 13. In the paragraph beginning on page 799 and continuing to page 800, replace with . 14. In the second full paragraph on page 801, strike . 15. In the second full paragraph on page 801, replace with 16. In the paragraph beginning on page 801 and continuing to page 802, replace . Ca 10a 17. Renumber footnote 27 on page 802 as footnote 29 and replace with . 18. Add a new footnote 30 on page 803 following reading: In its discussion of the Railroads’ apportioned liability, the district court found that B & B used the Railroad parcel as part of its total agricultural-chemical operations, and it earlier cited approvingly to documents describing the land as “an integral part of the adjacent farm chemical distribution facility.” The dissent from denial of rehearing en banc therefore wrongly characterizes our description of the site as “appellate fact-finding.” See Dissent at 2914-16 [520 F.3d 958-960}. 19. In the first full paragraph on page 804, replace with . 20. Renumber footnote 32 on page 811 as footnote 35, strike following , and add after 21. Renumber all footnotes in sequential order. exe * * No further petitions for rehearing or rehearing en banc will be entertained. The mandate shall issue in due course. lla OPINION BERZON, Circuit Judge: A now-defunct company, Brown & Bryant, Inc. (B & B), owned and operated a facility at which toxic chemicals were stored and distributed. Part of the land on which the chemical operation was located was owned by two railroad companies (the Railroads), and some of the chemicals used by B & B were supplied and delivered to the facility by Shell Oil Company (Shell). Because toxic chemicals remaining at the facility threatened groundwater and may continue to do so in the future, the United States Environmental Protection Agency (EPA) and the State of California’s Department of Toxic Substances Control (DTSC) spent a considerable amount of money to clean up the site and may need to spend more in the future. The two agencies sought to recover these response costs under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 USC. §§ 96019675, (CERCLA), but the district court held the Railroads and Shell liable for only a minor portion of the total cleanup costs. B & B was defunct by that time, and so could not contribute to the cleanup costs. The agencies were thus left holding the bag for a great deal of money. Seeking to hold the Railroads and Shell jointly and severally liable for the entire judgment, the agencies appeal. Shell cross-appeals, claiming that it was not an “arranger” under CERCLA, § 9607(a)(3), and therefore is not a party on whom | Unless otherwise noted, all statutory citations are to Title 42 and the 2000 edition of the U.S. Code. 12a any cleanup liability can be imposed. We reverse the portion of the judgment that declined to impose full joint and several liability on the Railroads and Shell and affirm the portion of the judgment that imposed liability on Shell as an arranger.? I. Background Beginning in 1960, B & B operated an agricultural chemical storage and distribution facility in Arvin, California on a 3.8-acre parcel of land (the B & B parcel). In 1975, B & B’s agricultural chemical distribution business outgrew that parcel, and B & B began leasing a 0.9-acre parcel of land adjacent to its own parcel. The 0.9-acre parce) (the Railroad parce!) was jointly owned by the Railroads—Atchison, Topeka & Santa Fe Railroad Co., the predecessor in interest to Burlington Northern & Santa Fe Railway Co., and Southern Pacific Transportation Co., the predecessor in interest to Union Pacific Transportation Co.B & B used the Railroad parcel principally to park fertilizer rigs. The Railroad parcel comprised the western portion of the Arvin site.2 Directly to the east of the Railroad parcel sat B & B’s warehouse. The Railroad parcel, like the rest of the Arvin site, was graded toward a drainage pond on the B & B parcel. 2 The Railroads have requested judicial notice of the EPA proceedings concerning their suit for reimbursement from the government and of the stay of those proceedings pending the determination of joint and several liability in this case. These proceedings do not “have a direct relation to matters at issue.” United States ex rel. Robinson Rancheria Cilizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir.1992) (citation omitted). We therefore deny the Railroads’ request for judicial notice 3 We refer to the B & B and Railroad parcels together as the “Arvin site.” “a 13a B & B used the Railroad parcel as an integral part of its overall agricultural chemical facility. From its facility B & B sold local growers agricultural chemical products produced by various manufacturers. In particular, B & B purchased, received delivery of, stored on the Arvin site, and distributed two Shell- produced agricultural chemicals: the soil fumigants D- D and Nemagon. D-D and Nemagon—members of a class of chemicals called nematocides—are designed to kill nematodes, microscopic worms that attack the roots of crops. Nematocides work by penetrating the soil and then dispersing. B & B also stored on the Arvin site dinitro (dinoseb) weed killer, purchased from Dow Chemical Company. During the 1960s and 1970s, Shell strongly encouraged its customers, including B & B, to purchase D-D in bulk, a policy requiring customers to maintain large storage tanks. Shell delivered the bulk D-D to B & B “FOB Destination” via common carrier trucks.4 When the trucks carrying D-D arrived at the Arvin facility, the contents of the trucks were transferred to B & B’s large tanks by hoses. The process was quite messy, with frequent spills. 4 “FOB Destination” means “free on board” and “when the term is F.O.B. the place of destination, the seller must at his own expense and risk transport the goods to that place and there tender delivery of them.” U.C.C. § 2-319(1)(b) (2003). 5 Shell was deeply involved in the delivery process: The district court found that Shell determined and arranged for the means and methods of delivery of D-D to the Arvin plant and detailed loading and unloading procedures. It also found that the trucking companies with which Shell contracted for delivery did the transfers for most of the relevant period. It was only in the early 1980s that Shell dictated that B & B personnel should instead do the unloading. l4a To apply D-D to growers’ fields, B & B used rigs loaded with the chemical. The rigs were stored on the Railroad parcel, as were bulk containers of dinoseb and, occasionally, empty fertilizer cans. Chemicals also reached the Railroad parcel through water flow from the B & B parcel. In 1978, after a windstorm destroyed the bulk D-D storage tank used to store Shell D-D, B & B began using converted stainless steel milk trailers to store the bulk D-D. The chemical, which is highly corrosive and eats through steel, can cause leakage in steel tanks only a few years old. B & B kept these leak-prone tanks all over the Arvin facility, including on the Railroad parcel. D-D, when it leaks, evaporates quickly if exposed to air but is highly soluble in water. When D-D infiltrates the ground, it moves through the soil by molecular diffusion, dispersing in all directions. A slight pull from gravity, however, makes the chemical a bit more likely to flow downward into groundwater than laterally through the soil. Dinoseb, similarly, tends to move to the groundwater table if there is water movement in that direction. No toxic chemicals can reach the groundwater level currently used as a source of drinking water becuse of an impermeable layer of soil. The next highest '+ el, however, is a potential source of drinking water, a* contamination can reach that level. After more than twenty years of leakage and dissemination of hazardous materials, the DTSC in 1983 found B & B in violation of several hazardous waste laws. The EPA investigated separately and found evidence of substantial soil and groundwater contamination at B & B’s Arvin facility. The EPA and DTSC (the Governments) began to remedy the contamination pursuant to their cleanup authority under CERCLA, incurring substantial remediation 15a costs. In 1991, the EPA ordered the Railroads to take specific preventative steps on the Railroad parcel, including installing groundwater monitoring wells. None of the contamination requiring immediate remediation was on the Railroad parcel. In 1992, the Railroads filed an action against B & B and certain of its principals for contribution for costs incurred in the EPA-ordered cleanup. Four years later, the Governments each filed CERCLA actions against B & B, the Railroads, and Shell for reimbursement of their investigation and cleanup costs.6 The district court consolidated the three cases and, after a twenty-seven day bench trial, issued an exceedingly detailed 185-page Findings of Fact and Conclusions of Law, thereafter slightly amended.’ The district court found the Railroads liable as owners of the Arvin facility and as persons who “at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of.” § 9607(a)(1), (2). Shell was held liable as a “person who ... arranged for disposal ... of hazardous substances.” § 9607(a)(3). Turning to whether the Railroads and Shell were liable for all or only a portion of the cleanup costs, the district court found that the harm to the Arvin site was capable of apportionment and proceeded to apportion it. The Railroads and Shell had, by acknowledging no liability at all, taken what the district court termed a “scorched earth,’ all-or-nothing approach to liability,” and so 6 The relevant statutory sections covering contribution and reimbursement actions, § 9613() and § 9607, are quoted later in this opinion. 7 Quotations from and discussion of the district court’s ruling in this opinion concern the district court’s Amended Findings of Fact and Conclusions of Law unless otherwise noted. l6a provided little assistance on the apportionment issue. The district court nonetheless proceeded to “perform the equitable apportionment analysis demanded by the circumstances of the case.” For the Railroads, the court multiplied three proportions: (1) the percentage of the overall site that was owned by the Railroads, 19.1%;8 (2) the percentage of time that the Railroads leased the parcel in relation to B & B’s total operations, 45%;9 and (3) the fraction of hazardous products attributable to the Railroad parcel, 66%.19 This calculation resulted in a determination of 6% liability. Then, to account for any “calculation errors,” the district court assumed 50% error and raised the Railroads’ proportion of the total liability to 9%. For Shell, the district court approximated the percentages of leakage from various activities attributable to Shell and multiplied them together to set Shell’s proportion of the total liability at 6%.!! Shell was also assigned, in the contribution action, 6% 8 0.9 acres / 4.7 acres = 0.191 (19.1%). 9 B & B began operations in 1960. The Railroad parcel was leased starting in 1975. In 1988, B & B ceased its operations at Arvin. Thus, the Railroad parcel was part of the Arvin site for 13 of 29 years, or 45% of ithe time B & B operated the facility. 10 There were three pertinent chemicals: D-D, Nemagon, and dinoseb. The district court found that although there was some D- D contamination attributable to the Railroad parcel, that “slight contamination is offset by the fact that the [Arvin] Site is graded towards the southeast pond [on the B & B parcel] and the levels of chemical contamination on the B & B parcel are substantially higher than the reported detections on the Railroad parcel.” On that reasoning, the district court removed all D-D from the equation. \l B & B, albeit insolvent, was assigned 100% joint and several liability. % i 17a of the costs incurred by the Railroads in their cleanup effort.12 DTSC and the EPA timely appealed the district court’s judgment. Shell timely cross-appealed the finding that it was liable as an “arranger” under CERCLA. II. Standards of Liability Under Cercla CERCLA was enacted in 1980 to provide for effective responses to health and environmental threats posed by hazardous waste sites. See generally Mardan Corp. v. C.G.C. Music, Ltd., 804 F.2d 1454, 1455 (9th Cir.1986). Under CERCLA, state and federal governments can first begin the cleanup of toxic areas, see § 9604(a)-(d), and then sue potentially responsible parties (PRPs) for reimbursement, see § 9607(a). A key purpose of this scheme is “shift[ing] the cost of cleaning up environmental harm from the taxpayers to the parties who benefited from the disposal of the wastes that caused the harm.” EPA v. Sequa Corp. (In the Matter of Bell Petroleum Servs., Inc.), 3 F.3d 889, 897 (5th Cir.1993) (citing United States v. Chem-Dyne Corp., 572 F.Supp. 802, 805-06 (S.D.Qhio 1983)). In accord with this purpose, CER ’.A creates a system of strict liability. Under its provisions, parties can be liable for cleaning up toxic chemicals if they fit into one or more of the four PRP categories set out in § 9607(a): (1) the owner and operator of ... a facility, (2) any person who at the time of disposal of any hazardous substance owned or operated any 12 The Railroads do not challenge the percentage of liability assigned to Shell. 18a facility at which such hazardous substances were disposed of, (3) any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person ..., and (4) any person who accepts or accepted any hazardous substances for transport to disposal or treatment facilities... A “facility” is defined in § 9601(9)(B) as “any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located; but does not include any consumer product in consumer use or any vessel.”!5 The statute’s basic liability provision, in turn, provides that “subject only to the defenses set forth in subsection (b) of this section [PRPs shall be liable for|}—(A) all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe not inconsistent with the national contingency plan ....” § 9607(a). Thus, PRPs can be responsible for the costs of cleaning up hazardous waste sites without any finding that they were negligent or that they caused the contamination, unless they can establish the third- party defense set out in § 9607(b)(3).14 13 The district court found that the entire Arvin site, including the Railroad parcel, was a single facility for the purposes of § 9607. The Railroads do not appeal that finding. 14 Section 9607(b) reads: There shall be no liability under subsection (a) of this section for a person otherwise liable who can establish by a preponderance of the evidence that the release or threat of release of a hazardous substance and the damages resulting therefrom were caused solely by— 19a A. Validity of Apportionment CERCLA does not address the question whether, as between PRPs who are liable for cleanup costs, liability is joint and several—meaning that each PRP responsible for all cleanup costs at a facility is liable for such costs—or severable—meaning that cleanup costs at a single facility can be apportioned among PRPs on some basis. In this circuit, liability is joint and several when the harm is indivisible. Fireman’s Fund Ins. Co. v. City of Lodi, 302 F.3d 928, 945 (9th Cir.2002); see also Carson Harbor Vill., Ltd. v. Unocal Corp., 270 F.3d 863, 871 (9th Cir.2001) (en banc). Thus, a defendant “may be held fully liable for the entire clean-up costs at a site despite the fact that the defendant PRP was in fact responsibie for only a fraction of the contamination.” Fireman’s Fund, 302 F.3d at 945. We have also referred in general terms to the possibility of apportioning liability. See id. (noting the use of “federal common law principles” of (3) an act or omission of a third party other than an employee or agent of the defendant, or than one whose act or omission occurs in connection with a contractual relationship, existing directly or indirectly, with the defendant (except where the sole contractual arrangement arises from a published tariff and acceptance for carriage by a common carrier by rail), if the defendant establishes by a preponderance of the evidence that (a) he exercised due care with respect to the hazardous substance concerned, taking into consideration § the characteristics of such hazardous substance, in light of all relevant facts and circumstances, and (b) he took precautions against foreseeable acts or omissions of any such third party and the consequences that could foreseeably result from such acts or omissions. (Emphasis added). Section 9607(b) also provides defenses for “an act of God” and “an act of war.” § 9607(b)(1), (2). 20a apportionment); Carson Harbor Vill., 270 F.3d at 871 (stating that once liability has been found, “the defendant may avoid joint and several liability by establishing that it caused only a divisible portion of the harm”). Yet, in none of our cases has there been an actual dispute regarding whether liability should be apportioned among the liable PRPs. This case squarely presents that question. To determine whether the district court was correct to apportion liability in this case, we thus must address, initially, the general propriety of severability.!© In line with every 15 The major cases addressing division of PRP liability under CERCLA in the Ninth Circuit instead have been contribution cases among PRPs, decided after joint liability was established, see, e.g., Carson Harbor Vill., 270 F.3d at 871;Pinal Creek Group v. Newmont Mining Corp., 118 F.3d 1298, 1301 (9th Cir.1997), or have addressed a different issue entirely, see, eg., Fireman’s Fund, 302 F.3d at 945 (analyzing the possibility that CERCLA preempts state laws). 16 DTSC argues that the apportionment question is not properly before us because it was not properly raised in the pretrial order, but we do not agree. To preserve a claim, a party must put forward a position in the pretrial statement in a manner sufficient to put the opposing party on notice and allow the trial court to consider its merits. See Cripe v. City of San Jose, 261 F.3d 877, 886 n. 9 (9th Cir.2001) (refusing to hold that defendants had waived an affirmative defense by mislabeling it, because the court and plaintiffs were on notice of the real issue); Arizona v. Components Inc., 66 F.3d 213, 217 (9th Cir.1995) (moting that argument must be raised sufficiently for the court to rule on it). Notice to the district court is not an issue in this case, as the final decision addresses apportionment. While the Governments claim to have been unaware that they needed to address the apportionment issue, their assertion is not supported by the record. Both the Railroads and Shell directly addressed the apportionment issue in their pretrial orders. The Railroads “denfied] that they are jointly and severally liable for the response costs claimed by the Government” but argued that, if liable, they 2la circuit that has addressed the issue, we hold that apportionment is available at the liability stage. In so ruling we rely, a have the other circuits that have analyzed the issue, on a seminal case decided in 1983 in the Southern District of Ohio, Chem-Dyne. | After reviewing the evolution of the statute, Chem- Dyne concluded that liability under § 9607(a) may be joint and several even though the statute does not | expressly so provide. Chem-Dyne, 572 F.Supp. at 810. Suggesting that Congress intended to leave the matter to the usual common law rules, adjusted to CERCLA as necessary, Chem-Dyne held that courts should look to the Restatement (Second) of Torts, as well as to other sources of federal common law, for the principles of joint and several liability applicable under CERCLA. See id. at 809-10. Later, circuit court cases | endorsed this approach. See Chem-Nuclear Sys., Inc. | v. Bush, 292 F.3d 254, 259-60 (D.C.Cir.2002); United States v. Hercules, Inc., 247 F.3d 706, 717 (8th Cir.2001); United States v. Township of Brighton, 153 F.3d 307, 318 (6th Cir.1998); Bell Petroleum, 3 F.3d at 895-96; United States v. Alcan Aluminum Corp. (Alcan-P.AS), 990 F.2d 711, 721-22 (2d Cir.1993); United States v. Alcan Aluminum Corp. (Alcan- Butler), 964 F.2d 252, 268-69 (3d Cir.1992); United | States v. Monsanto Co., 858 F.2d 160, 171-72 (4th : Cir.1988). As Chem-Dyne persuasively recounts, the history of § 107(a) of CERCLA, 42 U.S.C. § 9607(a), indicates that although Congress declined to mandate joint and should only be responsible for that fraction of the total mass of groundwater contamination proven to be traceable to their parcel. Shell noted that joint and several liability is not mandatory and cited cases regarding apportionment. As a result, we conclude that the issue of apportioning liability was not waived and is properly before us. q % = 22a several liability, it did net intend by doing so “a rejection of joint amd severable liability.” Chem-Dyne, 572 F.Supp. at 808. Instead, recognizing the difficulties inherent “ ‘in prescrifmg in statutory terms liability standards which will be applicable in individual cases,” id. at. 806 (qwoting 126 CONG. REC. $14964 (Nov. 24, 1980) (remarks of Sen. Randolph)), Congress meant “to have the scope of liability determined under common law principles, where a court performing a case by case evaluation of the complex factual scenarios associated .. Will assess the propriety of applying joint and several liability on an individual basis,” id. at 808. We agree with this account of Congress’s intent and hold that apportionment can be appropriate under CERCLA. B. Standards for Apportionment Because we hold that apportionment is available at the liability stage in CERCLA cases, we must determine the appropriate standards for determining when apportionment is available and, when it is, how to ascertain the proper division of damages among defendants. Again, we draw on the experience of our sister circuits. The circuits that have addressed these questions have looked to common law principles of tort in general, and the Restatement in particular, for guidance as to when and how to impose joint and several liability under § 9607(a). We agree that this approach is proper and adopt it here. We also follow Chem-Dyne and all of the courts of appeals that have addressed the question in holding that the resulting standard must be a uniform federal rule. See, e.g., Aviall Servs., Inc. v. Cooper Indus., Inc., 312 F.3d 677, 684 (5th Cir.2002) (holding that apportionment of CERCLA liability “is ... a matter of federal common law”), reversed on other grounds by 543 U.S. 157, 125 23a S.Ct. 577, 160 L.Fd.2d 548 (2008); United States ». Burlington N.R. Co., 200 F.3d 679, 697 (10th Cir.1999) (same); Township of Brighton, 153 F.3d at 329 (same); Monsanto Co., 858 F.2d at 172 (same). As Chem-Dyne noted, the legislative history of CERCLA supports such an approach, as does its pelicy favoring national uniformity so as to discourage “illegal dumping in states with lax liability laws.” Chem-Dyne, 572 F.Supp. at 809.17 The question, then, is what the uniform federal law should be. Once again, all the circuits that have addressed this question have followed Chem-Dyne, holding that the appropriate starting point for a common law rule of apportionment applicable to CERCLA cases is Section 483A of the Restatement of Torts. See Hercules, 247 F.3d at 716 & n. 9, 717 (noting that courts support the divisibility doctrine as 17 The parties here have assumed that the apportionment standard must be one of uniform federal common law. As stated above, every federal circuit to address the issue, including those decided after O'Melveny & Myers v. FDIC, 512 U.S. 79, 114 S.Ct. 2048, 129 L.Ed.2d 67 (1994), and Atherton v. FDIC, 519 US. 213, 117 S.Ct. 666, 136 L.Ed.2d 656 (1997), has shared that understanding. Although Atchison, Topeka & Santa Fe Ry. Co. v. Brown & Bryant, Inc., 159 F.3d 358, 362-64 (9th Cir.1997), questioned whether O’Melveny & Myers and Atherton upset Ninth Circuit law with regard to the adoption of uniform federal common law regarding successor liability under CERCLA, very different considerations govern with respect to apportionment. In_ Atchison, resolution of the question of successor liability would resolve who was liable under CERLA, an inquiry with roots in state corporate law. Here, the inquiry diverges from state law completely. As we explain in this section, the reach of CERCLA liability is sui generis, so there is no state law directly applicable. The resulting apportionment analysis therefore requires a similarly unique set of considerations, married to the statute’s functions and purpose. Ee 24a borrowed from the Restatement); Bell Petrolewm, 3 F.3d at 895 (relying on the Restatement); Chem-Dyne, 572 F.Supp. at 810 (establishing this method). We agree that harm may be apportioned when “there exists a reasonable basis for divisibility” of a single harm or when several “distinct harms” are present. Hercules, 247 F.3d at 717.18 Because CERCLA’s statutory liability scheme differs from the common law in important respects, however, our sister circuits have recognized that its principles must be somewhat modified to fit the CERCLA context. See, e.g., Bell Petroleum, 3 F.3d at 902 (“Restatement principles must be adapted, where necessary, to implement congressional intent with respect to liability under the unique statutory scheme of CERCLA.”); Hercules, 247 F.3d at 717 (The Restatement is “the starting point .... [but] only to the extent that it is compatible with the provisions of CERCLA.”). We concur in this general conclusion and acknowledge, in particular, that there are two areas where the Restatement approach is a somewhat poor fit and requires slight modifications to ensure that its 18 We of course agree with our sister circuits that, if adequate information is available, divisibility may be established by “volumetric, chronological, or other types of evidence,” Hercules, 247 F.3d at 719 (citing Bell Petroleum, 3 F.3d at 895-96), including appropriate geographic considerations, see United States v. Township of Brighton (“Brighton II “), 282 F.3d at 919-20 (6th Cir.2002), Bell Petroleum 3 F.3d at 903-04. We hold only that, in this case, Shell and the Railroads failed to show that “expert testimony and other evidence establishes a factual basis for making a reasonable estimate that will fairly apportion liability.” Bell Petroleum, 3 F.3d at 903. “{A)pproaches to divisibility will vary tremendously depending on the facts and circumstances of each case,” Hercules, 247 F.3d at 717, and approaches that were inappropriate or inadequately supported in this case may be available in other circumstances. 25a rts with the liability and remediation — of CE ROLA. First, as we describe infra, there are important distinctions between causation as conceived in the Restatement and causation in the context of CERCLA. Unlike the Restatement’s common law causation, CERCLA affixes liability based upon its PRP provisiems, which define classes of liable parties based upon a party's statutorily-defined nexus t the contaminated site And second, the cencept of “harm” in the Restatement as actual injury dees not corréspond easily to CERCLA’s priorities. Contamination and the cost of remediation are both relevant for the “harm” analysis under CERCLA. Finally, we recognize that the Restatement’s emphasis on objective considerations to determine whether apportionment 1s justified in a givem case comports with CERCLA’s strict liability scheme. Equitable considerations may play a role im a@ later contribution action amongst liable parties, but met im an action such as this where the only relevamé issue is whether there is a reasonable basis, founded in record evidence, to apportion damages amongst defendants. 1. Causation Section 483A of the Restatement allows for apportionment of damages where “‘(a) there are distinct harms,"” or () there is a reasonable basis for 19 Comment b of section 433A notes: ) Distinct harms. There are other results which, by their ) nature, are more capable of apportionment. If two defendants independently shoot the plaintiff at the same time, and one wounds him in the arm and the other in the leg, the ultimate result may be a badly damaged plaintiff in the hospii.!, but it is still possible, as a logical, reasonable, and practical matter, to regard the two wounds as separate injuries, and as distinct wrongs. The mere coincidence in time does not make the two wounds a single harm, or the conduct of the two defendants lll EEE EO OO So —— = 168 gallons of D-D.” 32 There is something of a circuit split on the degree of specificity of proof necessary to establish the amount of liability apportioned to each PRP. According to some courts, proving up the precise proportion attributable to each PRP is a “very difficult proposition,” Control Data Corp. v. S.C.S.C. Corp., 53 F.3d 930, 934 n. 4 (8th Cir.1995), requiring “concrete and specific” evidence in support of any proposed apportionment, Hercules, 247 F.3d at 718. The defendant cannot rely on a “chain of possible inferences.” Chem-Nuclear, 292 F.3d at 260. In contrast, other courts have permitted informal estimates or data rather than more exact calculations. See Bell Petroleum, 3 F.3d at 903-04 (allowing estimation of the proportion of contamination produced by each of 47a Again, Shell’s harm was capable of apportionment. Shell could have provided data showing the volume of chemicals shipped to B & B every year, or more precise estimates of the average volume of leaked chemicals during the transfer process. Data connecting the properties of the various chemicals leaked at the site to the likelihood that they contributed to the contamination could have been presented and considered. But the record before us provides none of that information, most likely because Shell put its eggs in the no-liability basket. In the end, the district court’s apportionment analysis with regard to Shell came closer to meeting the legal standard than the method it used with respect to the Railroads. We hold, nonetheless, that on the facts of this case as the district court found them, there was no reasonable basis for apportioning the pertinent harm caused by Shell. B. “Arranger” Liability Under CERCLA, “any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person” is a series of successive operators of a facility, where reliable approximations were simple because there was a single chemical produced by the successive operators each of whom operated the facility similarly); see also Hercules, 247 F.3d at 719 (relying on Bell Petroleum, 3 F.3d at 895-96, and holding that the defendant need not show that there was no possibility that it contributed to the harm, because certain approximations can suffice). Aside from noting, as we have, supra n. 27, that logical, supportable inferences from the record facts are, as always, permissible, we need not weigh in on this dispute, as the district court’s extrapolations could not be upheld under even a forgiving standard. 48a hable. § 9607(a)(3). Shell claims that (1) the district court applied the wrong legal standard in determining whether Shell was an “arranger” under § 9607(a); (2) the “useful product” doctrine precludes imposition of “arranger” liability on Shell; (3) Shell lacked ownership and control over the chemicals at the time of the transfers and thus the district court could not find that it had arranged them; and (4) because D-D evaporates or disperses rather than remaining in toxic form in the soil, the district court erred when it determined that Shell contributed to the groundwater contamination. We reject these contentions and affirm the district court’s ruling on the “arranger” issue. We review the district court’s interpretation of CERCLA to determine the legal standard for arranger liability as a question of law, reviewed de novo. Carson Harbor Vili., 270 F.3d at 870. We review the district court’s factual determinations regarding Shell’s operations for clear error. W. Prop. Serv. Corp. v. Shell Oil Co., 358 F.3d 678, 685 (9th Cir.2004). 1. Requirements for “Arranger” Liability CERCLA does not define “arrange[ ].” We have avoided giving the term “arranger” too narrow an interpretation to avoid frustrating CERCLA’s goal of requiring that companies responsible for the introduction of hazardous waste into the environment pay for remediation. Pakootas v. Teck Cominco Metals, Ltd., 452 F.3d 1066, 1081 (9th Cir.2006); Cadillac Fairview/Cal., Inc. v. United States, 41 F.3d 562, 565 n. 4 (9th Cir.1994) (per curiam) (czting with approval United States v. Aceto Agric. Chems. Corp., 872 F.2d 1373, 1380 (8th Cir.1989)); see also Jones- Hamilton Co. v. Beazer Materials & Servs., Inc., 973 F.2d 688, 694-95 (9th Cir.1992) (discussing Aceto, 872 F.2d at 1384). Accordingly, we have recognized, in addition to “direct” arranger liability, a “broader” 49a category of arranger liability, see United States v. Shell Oil Co., 294 F.3d 1045, 1054-55 (9th Cir.2002), in which disposal of hazardous wastes is a foreseeable byproduct of, but not the purpose of, the transaction giving rise to PRP status. “Direct” arranger liability—also referred to as “traditional’ direct” arranger liability—involves transactions in which the central purpose of the transaction is disposing of hazardous wastes. See id.; see, eg., Cadillac Fairview, 41 F.3d at 563-65 (involving rubber companies that _ transferred contaminated styrene to Dow Chemical for reprocessing); Catellus Dev. Corp. v. United States, 34 F.3d 748, 749-50 (9th Cir.1994) (involving a company that sold used automotive batteries to a lead reclamation plant). In contrast, “broader” arranger liability involves transactions that contemplate disposal as a part of, but not the focus of, the transaction; the “arranger” is either the source of the pollution or manages its disposal. See Shell Oil, 294 F.3d at 1058. In the “broader” arranger liability cases, such as Shell Oil, we examined the connection between the alleged arranger transaction and the disposal and decided whether the transaction necessarily constituted an arrangement for disposal of hazardous substances, whatever immediate form it may have taken. These broader arranger cases can _ involve situations, like the present one, in which the alleged arrangers did not contract directly for the disposal of hazardous substances but did contract for the sale or transfer of hazardous substances, which were tnen disposed of. See, e.g., Fla. Power & Light Co. v. Allis Chalmers Corp., 893 F.2d 1313, 1315, 1818 (11th Cir.1990) (involving purchaser and recycler that sued manufacturer of transformers for cleanup costs from later disposal); Mathews v. Dow Chemical Co., 947 50a F.Supp. 1517, 1519-20 (D.Colo.1996) (involving neighbors of chemical company who sued manufacturer of paint thinner for contamination resulting from packaging paint thinner); Cowrtaulds Aerospace, Inc. v. Huffman, 826 F.Supp. 345, 347-48, 353-54 (E.D.Cal.1993) (involving neighbor of smelting plant who sued companies that contracted with plant for burning and smelting of copper wire for resulting contamination). There are no Ninth Circuit cases in this category.*8 The inclusion of such circumstances within the “arranger” concept, however, accords with the statutory language and structure as a whole. To be an “arranger,” one must “arrange[{ ] for disposal or treatment, or arrange [ | with a transporter for transport for disposal or treatment, of hazardous substances ....” § 9607(a)(3). CERCLA’s definition of “disposal,” in turn, includes “the discharge, deposit, injection, dumping, spilling, leaking, or placing of any solid waste or hazardous waste into or on any land or water so that such solid waste or hazardous waste or constituent thereof may enter the environment or be ... discharged into any waters, including ground waters.” 33 Although Shell Oil involved “broader” arranger liability, it concerned “arranger” liability of a customer, rather than a producer, of hazardous materials. 294 F.3d at 1056. There, the defendant oil companies sought to hold the United States liable as an “arranger” because the federal government had purchased large quantities of high octane fuel for military use; the process used by the oil companies to refine the fuel resulted in toxic waste that the oil companies later dumped at a site in California. /d. Because the United States was the end purchaser, never owned the intervening toxic products used in the refining process, and did not contract out the crucial, waste-producing intermediate step, we held that it was not an arranger under § 9607(a)(3). Jd. at 1056-59. 5la § 6903(3) (referred to by § 9601(29)). That “disposal” includes such unintentional processes as “leaking” indicates that “disposal” need not be purposeful. See Carson Harbor Vill., 270 F.3d at 880 (holding that “leaking” may not “require affirmative ... conduct” (internal quotation marks omitted) (quoting and adopting interpretation of United States v. CDMG Realty Co., 96 F.3d 706, 714 (8d Cir.1996))). Thus, an entity can be an arranger even if it did not intend to dispose of the product. Arranging for a transaction in which there necessarily would be leakage or some other form of disposal of hazardous substances is sufficient. 2. “Useful Product” Doctrine While adopting a generally expansive view of arranger liability, we have _ refused to _ hold manufacturers liable as arrangers for selling a useful product containing or generating hazardous substances that later were disposed of. See, e.g., 3550 Stevens Creek Assocs. v. Barclays Bank of Cal., 915 F.2d 1355, 1362-65 (9th Cir.1990). As Stevens Creek and other “useful product” cases recognize, liability cannot extend so far as to include all manufacturers of hazardous substances, on the theory that there will have to be disposal of the substances some time down the line, after it is used as intended. See, e.g., Stevens Creek, 915 F.2d at 1362-65 (refusing to hold manufacturer liable for costs of removing asbestos from building); Fla. Power & Light, 893 F.2d at 1318-19 (refusing to hold manufacturer of transformers liable for subsequent release of chemicals upon disposal of transformers). Also, the asserted liability in “useful product” cases generally involved only the normal use of those chemicals. See, eg., Jordan v. S. Wood Piedmont Co., 805 F.Supp. 1575, 1577 (S.D.Ga.1992) (involving the sale of chemicals to treat wood and the [F 52a contamination from the wood treatment process); Edward Hines Lumber Co. v. Vulcan Materials Co., 685 F.Supp. 651, 653 (N.D.II1.1988) (same). The useful product cases have no applicability where, as here, the sale of a useful product necessarily and immediately results in the leakage of hazardous substances. In that circumstance, the leaked portions of the hazardous substances are never used for their intended purpose. See Zands v. Nelson, 779 F.Supp. 1254, 1262 (S.D.Cal.1991) (stating that “gasoline is no longer a useful product after it leaks into, and contaminates, the soil”); see also Aceto, 872 F.2d at 1381 (rejecting application of the useful product doctrine where “waste is generated and disposed of contemporaneously with the process” (emphasis added)). Here, although Shell sold B & B a useful product, leakage of some of that product before B & B could use it was both inherent in the transfer process arranged by Shell and contemporaneous with that process.*4 Shell arranged for delivery of the substances to the site by its subcontractors; was aware of, and to some degree dictated, the transfer arrangements; knew that some leakage was likely in the transfer process; and provided advice and supervision concerning safe transfer and storage. Disposal of a hazardous substance was thus a necessary part of the sale and delivery process. 34 For this reason, we also reject Sheli’s argument that, because manufacturers are taxed to provide money for the Superfund, Congress could not, without more, have intended for them to be subject to liability as arrangers. See 26 U.S.C. §§ 4661, 4662. Shell’s liability derives not from its role as a manufacturer of a useful product but rather from its role in leakage prior to use. The Superfund tax is wholly irrelevant to the latter imposition of liability and certainly does not bar it. a 53a Put another way, the district court did not assign arranger liability to Shell for contamination resulting from the application of Shell’s useful products to the soil as fertilizers or fumigants, or for disposal of contaminated soil after the products were used. Instead, the district court assigned arranger liability on the portion of product that never made it to the fields for its intended use but was disposed of prior to use. Because Shell’s liability here stems from the leaked chemicals rather than the fertilizer that was used as fertilizer, the useful product doctrine is not applicable. 3. Control and Ownership Much of the district court’s analysis relies on the factual determination that spills would necessarily occur during the transfer of Shell’s chemicals to B & B. Shell maintains that this finding was inadequate, because Shell did not itself transport the chemicals or participate in transferring the chemicals to B & B’s containers. Central to this contention is Shell’s insistence that it lacked ownership and control of the - chemicals at the time of transfer and so could not be an “arranger.” We do not agree that the district court’s findings about Shell’s involvement were insufficient to support “arranger” liability. There was evidence before the district court that: (1) Spills occurred every time the deliveries were made; (2) Shell arranged for delivery and chose the common carrier that transported its product to the Arvin site; (3) Shell changed its delivery process so as to require the use of large storage tanks, thus necessitating the transfer of large quantities of chemicals and causing leakage from corrosion of the large steel tanks; (4) Shell provided a rebate for improvements in B & B’s bulk handling and safety facilities and required an inspection by a qualified engineer; (5) Shell regularly 54a would reduce the purchase price of the D-D, in an amount the district court concluded was linked to loss from leakage; and (6) Shell distributed a manual and created a checklist of the manual requirements, to ensure that D-D tanks were being operated in accordance with Shell’s safety instructions. The parties vigorously dispute whether, given these facts, Shell owned the pesticide during the transfer and controlled the transfer process. Although the district court addressed these questions and resolved them against Shell, we do not enter this controversy. The text of the statute does not require that the arranger own the hazardous wastes, either at the time the “arranger” arranged for the transaction or at the time of transfer of ownership. See Pakootas, 452 F.3d at 1081. Indeed, to require ownership at the time of disposal “would make it too easy for a party, wishing to dispose of a hazardous substance, to escape by a sale its responsibility to see that the substance is safely disposed of.” Catellus, 34 F.3d at 752. Nor is control a statutory requirement, Cadillac Fairview, 41 F.3d at 565, although it has been viewed as a pertinent consideration in cases quite different from this one. Where an owner of hazar:ous substances directly “arranges” for disposal—by, for example, using a hazardous substance disposal company—that owner is plainly an “arranger” even if it has nothing more to do with disposal. See, eg., Catellus, 34 F.3d at 752. In “broader” arranger liability cases, however, we have tended to view control as a “crucial element” in determining whether the party arranged for disposal. Shell Oil, 294 F.3d at 1055. We also have viewed ownership of hazardous substances at the time of disposal as an important factor in nontraditional, indirect arranger liability cases. See Jones-Hamilton, 973 F.2d at 695 (relying on Aceto, 872 F.2d at 1380). oda None of these cases, however, indicates that ownership or control at the time of transfer are the sine qua non of nontraditional arranger liability. Instead, ownership and control at time of disposal are useful indices or clues toward the end of “look[ing] beyond defendants’ characterizations to determine whether a transaction in fact involves an arrangement for the disposal of a hazardous substance.” Aceto, 872 F.2d at 1381. In Shell Oil, for example, the government never owned the chemicals before disposal occurred, so control over the substances was an important factor in determining whether or not the government could have “arranged” for disposal. Shell Oil, 294 F.3d at 1057-59. Here, ownership at the time of disposal is not an informative consideration, and control is informative only in light of additional considerations. Unlike in Shell Oil, where the absence of any ownership or control was a clue concerning whether the sales transaction necessarily contemplated disposal as an inherent part of the transaction, Shell here owned the chemicals at the time the sale was entered into. The statute requires nothing more in terms of ownership. We therefore need not determine the precise moment when ownership transferred to B & B. As to the control question, the district court’s findings, recited above, demonstrate that Shell had sufficient control over, and knowledge of, the transfer process to be considered an “arranger,” within the meaning of CERCLA, for the disposal of the chemicals that leaked. 4. Groundwater Contamination Shell, finally, contends that the court erred when it determined that it contributed to the groundwater contamination, maintaining thet D-D evaporates or disperses rather than remaining in toxic form in the soil. The district court’s analysis on this issue is factually complex and based on several weeks of 56a testimony. The district court made specific findings that D-D can indeed enter groundwater. Those findings are based on the testimony of experts whom the court found persuasive. In light of the complexity of the science and the substantial expert evidence supporting the finding, the _ district court’s determination was not clearly erroneous. IV. Conclusion The district court erred in determining that the harm in this case could be apportioned on this record. Given the district court’s erroneous approach and the paucity of record evidence, there is no reasonable basis for apportioning the damages attributable to the Railroads’ activity. Shell’s liability is a closer call, but the evidence on the record in that regard is also insufficient to support apportionment. The district court followed the proper analysis in finding that Shell is liable as an arranger. Shell arranged for the sale and transfer of chemicals under circumstances in which a known, inherent part of that transfer was the leakage, and so the disposal, of those chemicals. We therefore reverse as to the district court’s finding on apportionment. We affirm the district court’s findings regarding both the Railroads’ and Shell’s liability. The Railroads and Shell are jointly and severally liable for the harm at the Arvin site, except with regard to the so-called “Dinoseb hot spot.”55 We 35 The district court found that the “Dinoseb hot spot” was a discrete area contaminated by Dinoseb (a Dow product) as the result of a major spill in 1983, that Shell did not manufacture or ship that product, and that Shell thus bore no responsibility for any part of the $1.3 million cost of cleaning up this discrete spill. The governments did not challenge this finding on appeal. That finding therefore stands, and the district court should not include 57a remand for further proceedings not inconsistent with this opinion. REVERSED in part and AFFIRMED in part. BEA, Circuit Judge, with whom KOZINSKI, Chief Judge, O’SCANNLAIN, KLEINFELD, GOULD, TALLMAN, CALLAHAN, and N.R. SMITH, Circuit Judges, join, dissenting from the order denying the petition for rehearing en banc: The panel applies CERCLA! in a novel and unprecedented way to impose impossible-to-satisfy burdens on CERCLA defendants. The panel’s interpretation of CERCLA “arranger” liability? creates intra- and inter-circuit conflicts in an area of the law where uniformity among circuits is of paramount importance. See Panel Op. at 935-36 (noting CERCLA’s “policy favoring national uniformity so as to discourage illegal dumping in states with lax liability laws” (citation omitted)). Further, the panel’s unreasonable application of CERCLA apportionment law imposes joint and several liability on CERCLA defendants where Congress did not so intend. the $1.3 million cleanup costs for the “Dinoseb hot spot” in the calculation of Shell’s liability. Because we therefore do not hold Shell liable for this Dow product, the dissent from denial of rehearing en banc is wrong when it claims we err by holding Shell liable for “contamination from products Shell did not sell to B & B.” Dissent at 962-63 n. 22. 1 Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), 42 U.S.C. §§ 9601-9675. 2 Under CERCLA, an entity that “arrangefs] for disposal or treatment ... of hazardous substances” is strictly liable for the clean-up costs. 42 U.S.C. § 9607(a)(3). 58a Our national policy on toxic spills or disposals is quite clear; it does not allow for dithering. Anyone who owned or used the land when or after the pollution entered it is potentiall:, liable for its clean-up.* It does not matter how the toxic materials entered the land; that others may also be potentially liable or that reasonable stewardship was exercised are simply not defenses. But “potentially liable’ does not mean “totally liable.” Just as CERCLA allows the landowner or the land user to prove the pollution entered the land before he had anything to do with the land, he can also prove others caused the pollution, in whole or in part,‘ and that he is liable only for his apportioned share of the pollution. The panel’s recent amendments to its opinion do take a step in the right direction by aligning the Ninth Circuit with our sister circuits on CERCLA apportionment law.® As the amended panel opinion notes, courts follow Restatement (Second) of Torts (“Restatement”) principles in apportioning the harm between defendants held strictly liable under 3 In addition, CERCLA imposes liability on persons who “arranged for disposal or treatment ... of hazardous substances,” and persons who accepted “hazardous substances for transport to disposal or treatment facilities.” 42 U.S.C. § 9607(a)(3), (4). 4 See 42 U.S.C. § 9607(b)(3). 5 Henceforth, CERCLA apportionment in the Ninth Circuit will be governed—not by a test that allows a landowner to avoid joint and several liability only with “perfect information” that portions of the contamination are “in no respect traceable” to its land—but by a “reasonable basis” test under the Restatement (Second) of Torts § 433A(1)(b). Sze Panel Op. at 938 (holding a landowner can “establish divisibility by demonstrating a reasonable basis for concluding that a certain proportion of the contamination did not originate” on its facility (emphasis added)). 59a CERCLA. See Panel Op. at 939. Under the Restatement, and now the amended panel opinion, apportionment is permissible so long as the evidence allows the court to make “a reasonable estimate that will fairly apportion liability.” Jd. at 936 n. 18 (citation omitted). But although the panel’s amended opinion pays lip- service to the Restatement test, the panel then proceeds effectively to disregard it. Purporting to require only a “reasonable’ estimate” for apportionment, the panel imposes joint and several liability for the entire clean-up cost of a contaminated facility on an absentee landlord who leased a parcel: (1) that constituted 19.1% of the facility that caused the contamination; (2) for only 13 of the 29 years during which the contamination occurred (45% of the time); and (3) the contamination on which could have caused no more than 10% of the overall contamination. See United States v. Atchison, Topeka & Santa Fe Ry. Co., Nos. CV-F'-92-5068 OWW, CV-F-96-6226 OWW, CV-F- 96-6228 OWW, 2003 WL 25518047, at *88 (E.D.Cal. July 15, 2003). If this evidence does not provide a “reasonable estimate” for apportionment of liability, I do not see how—short of “perfect information” sufficient to trace every molecule of pollution to the landlord’s parcel’—apportionment could ever be possible under CERCLA. The panel’s amendments thus go only half way by adopting the correct prism through which to look at the evidence. But it is not 6 For the same result, albeit with a different, and now abandoned, verbal formulation, see the panel’s original opinion: United States v. Burlington Northern & Santa Fe Ry. Co., 502 F.3d 781, 801 (9th Cir.2007) (allowing CERCLA apportionment only with proof by “perfect information” “that portions of the contamination are in no respect traceable” to the landowner’s facility), amended by order denying petition for rehearing en banc. es 60a enough to use new spectacles. One must still look at the evidence. The fact remains, and as the panel expressly holds, the district court did not commit clear error in finding a reasonable basis for apportionment of liability. See Panel Op. at 943 (“[W]e do not fault the district court’s factfinding ....”). Regardless, the panel rejects the meticulous apportionment determinations of the district court, issued in a 191-page opinion, as “legally insufficient” for relying on “the simplest of considerations.” Jd. at 943, 945. To denigrate by adjectives is not to reason, much less to explain. Holding the district court’s calculations are “simple” does not even begin to determine whether those calculations were clear error, or whether the calculations provide a “reasonable estimate” to apportion liability. As Justice Oliver Wendell Holmes, Jr., said, “I would not give a fig for the simplicity this side of complexity, but I would give my life for the simplicity on the other side of complexity.”’? The panel turns Justice Holmes’s eloquent statement on its head: Instead of commending the district court for finding simplicity after navigating 191 pages of complexity, the panel rebukes the district court, contending that the district court’s careful findings of fact—though not clear error—are not worth a fig. While at it, the panel imposes “arranger” liability on Shell Oil for agricultural fertilizers that were spilled on the site by the buyer of Shell’s product, shipped by a common carrier in non-defective truck tankers, F.O.B. delivery point.8 The panel’s imposition of arranger 7 http:// en. wikiquote. org/ wiki/ Oliver Wendell Holmes’ Jr. 8 “FOB” means “free on board” and “when the term is F.O.B. the place of destination, the seller must at his own expense and risk transport the goods to that place and there tender delivery of them.” U.C.C. § 2-319(1)(b). 6la liability on a mere seller, which relinquished control over its products upon delivery and before spillage occurred, goes far beyond the statutory language and creates inter- and intra-circuit splits. See AM Int'l, Inc. v. Int'l Forging Equip. Corp., 982 F.2d 989, 999 (6th Cir.1993) (“[CJourts ... have consistently held that the mere sale of a product is not ‘arranging for disposal’ under [(CERCLA|].”); United States v. Shell Oil Co. (“McColl“), 294 F.3d 1045, 1055, 1057 (9th Cir.2002) (requiring “actual control” over the hazardous products as a “crucial element” of arranger liability). The panel further holds Shell jointly and severally liable for the entire contamination on the facility—including contamination from products Shell did not even sell. See Panel Op. at 945-48. True, the land on which the facility operator spilled the toxic fluids encompassed only 4.7 acres. But the panel’s legal errors will spread over this Circuit’s nine states and 1.3 million square miles, to lots large and sinall. I respectfully dissent from our decision not to rehear this case en banc. 1. This case involves environmental contamination caused by a now-defunct company, Brown & Bryant (“B & B”), which owned and operated an agricultural chemical distribution facility (“B & B parcel”) from 1960 to 1989. Panel Op. at 930. In 1975, fifteen years into its operation, B & B leased from the Defendant- Railroads (“the Railroads”) a contiguous parcel of land (“the Railroad parcel”) located west of the B & B parcel. Jd. at 930. The B & B parcel comprised 3.8 acres; the Railroad parcel comprised 0.9 acres. Jd. At its facility, B & B stored the chemicals D-D, Nemagon, and Dinoseb. Atchison, 2003 WL 25518047, at *4. 62a Throughout its operation, B & B_ discharged contaminated wastewater into a sump that was used to wash agricultural equipment and into a pond, both of - which were located on the B & B parcel. /d. at *12, *16. Neither the sump nor the pond were, at first, lined so as to be impervious. See id. at *8. The government asserted B & B’s activities on the Railroad parcel may have contaminated’ the groundwater through: (1) focused infiltration of contaminants into the groundwater; and (2) drainage from the Railroad parcel onto the pond located on the B & B parcel. Jd. at *10-12. As to the first theory, the government could not identify any areas on the Railroad parcel where infiltration into the groundwater actually occurred. Id. at *11. Indeed, it was “undisputed that the pond, the sump, and the dinoseb spill area, all of which are located on the B & B parcel, ‘were and are the primary sources of the groundwater contamination.” Jd. at *12. As to the second theory, the district court found a “substantial dispute” remained over whether rainfall was “sufficient to generate the quantity of runoff that would have been necessary” for drainage of chemicals from the Railroad parcel to the B & B parcel. 7d. at *11. The district court found “(t]he levels of chemical contamination on and under B & B parcel are substantially higher than any of the _ reported detections on and under the Railroad parcel.” /d. Specifically, the district court found: [RJjeleases at the Railroad parcel could not have contributed more than ten [percent] (10%) of the overall site contamination given the fact that the predominant activities conducted on the Railroad parcel through the years were storage and some washing and iam 63a rinsing of tanks, other receptacles, and chemical application vehicles. Mixing, formulating, loading, and unloading of ag- chemical hazardous’ substances, which contributed most of the liability causing releases, were predominantly carried out by B & B on the B & B parcel. Id. at *88. B & B purchased the agricultural product D-D from Shell pursuant to a non-exclusive marketing agreement for the resale of Shell D-D. Jd. at *4-5. Shell shipped D- D to the B & B facility by common carrier trucks “FOB Destination.” Jd. at *5. There was no evidence the transportation caused any leakage or that the tanks carried by the trucks leaked. Upon arrival, the contents of the trucks were transferred to B & B’s storage tanks, during which D-D spills regularly occurred. /d. at *20. The district court found the “stewardship” of D-D passed to B & B when the common carrier arrived at the B & B facility, and before the transfer of D-D was attempted to B & B’s storage tanks.2 Jd. at *23. Nevertheless, the panel holds Shell exercised control over the transfer process. Pursuant to their authority under CERCLA, the California Department of Toxic Substances Control 9 The amended panel opinion notes the common carrier, and not B & B employees, transferred the D-D from the trucks to the storage tanks before the early 1980s. See Panel Op. at 931 n. 5. The panel states it was only in the early 1980s that B & B employees started conducting the transfer themselves. Id. This is of no material consequence. If, as the district court found, the stewardship of the D-D passed to B & B before the transfer occurred, it is irrelevant whether B & B employees or the common carrier employees executed the transfer. In either case, B & B, not Shell, retained “stewardship” over the D-D and the transfer process. 64a (“DTSC”) and the U.S. Environmental Protection Agency (“EPA”) cleaned up the contamination on the B & B facility. Panel Op. at 931-32. “None of the contamination requiring immediate remediation was on the Railroad parcel.” ld. Thereafter, EPA and DTSC filed this CERCLA action against B & B, the Railroads, and Shell for reimbursement of their clean-up costs. The district court held the Railroads and Shell liable under CERCLA. The district court apportioned 9% of the clean-up costs to the Railroads based on the following: (1) the Railroad parcel constituted 19.1% of the entire B & B facility; (2) the Railroad parcel was leased to B & B for 13 of the 29 years the B & B facility operated, or 45% of the time; and (3) the fraction of the hazardous products attributable to the Railroad parcel was 66%. Id. at 932. The multiplication of these three proportions, rounded upwards, resulted in 6% liability. Id. at 932-33. To account for any error, the district court assumed a 50% error rate and raised the Railroads’ liability to 9%.!° Jd. at 932-33. The district court fixed Shell’s liability at 6%, which represented the proportion of D-D spills that occurred during deliveries to the total amount of D-D spills on the facility. Id. at 932-33. DTSC and EPA appealed. Jd. Shell cross-appealed the district court’s holding that it was liable under CERCLA as an “arranger.” Jd. The Railroads did not contest their liability on appeal. The panel affirmed Shell’s liability under CERCLA as an “arranger” but reversed the district court’s apportionment of liability, holding the Railroads and Shell jointly and severally liable for the entire clean-up cost. /d. at 930. 10 Thus, if anything, the district court was over-generous to the government in its apportionment calculations. 65a II. The panel first holds the contamination on the B & B facility is theoretically capable of apportionment. Id. at 942. The panel reasons that some of the contamination occurred before the Railroads leased their parcel to B & B. Id. Further, “[oJnly some of the toxic substances were stored on the Railroads’ parcel, and only some of the water on the facility washed over the Railroads’ site.” Id. Second, the panel addresses whether the district court clearly erred in finding that the Railroads actually established a basis for apportionment. See id. at 942 (“(W]le review for clear error whether the defendant submitted evidence sufficient to establish a reasonable basis for the apportionment of liability.”). The panel does not hold that the district court’s findings are clearly erroneous. See id. at 943 (“[W]Je do not fault the district court’s factfinding ....”); id. at 945 (“[Mjany of the district court’s calculations were factually correct....”). Nevertheless, while baiting it would review for clear error whether the district court found sufficient evidence to justify apportionment, the panel switches, by characterizing the issues as legal, to apply de novo review. The panel achieves this sleight of hand by holding, without any citation of authority, that the district court’s reliance on “the simplest of considerations” (i.e., “percentages of land area, time of ownership, and types of hazardous products”) is “legally insufficient” to support apportionment under the Restatement’s reasonable basis test. Jd. at 942, 945. Not so fast. Aren’t these so-called “simplest of considerations” precisely the considerations the panel’s amended opinion itself holds are _ sufficient for apportionment?: “We ... agree ... [that] divisibility may be established by volumetric, chronological, or other 66a types of evidence, including appropriate geographic considerations.” Jd. at 936 n. 18 (citations omitted). Percentage of land ownership (a “geographic” consideration) and period of ownership § (a “chronological” consideration) provide a “reasonable basis” to apportion liability to the Railroads, which is all the Restatement, our sister circuits, and indeed the panel’s amended opinion itself require. As the district court observed: The concept that a passive owner of a contiguous parcel, not representing more than 19% in area of a CERCLA site, operated less than 44% of the time, where substantially smaller volumes of hazardous substance releases occurred, should be strictly liable for the entire site remediation, because no other responsible party is judgment-worthy, takes strict liability beyond any rational limit. Atchison, 2003 WL 25518047, at *87. This evidence is not good enough for the panel. Instead, the panel requires “adequate records” detailing “the amount of leakage attributable to activities on the Railroad parcel, how that leakage traveled to and contaminated the soil and groundwater under the [B & B facility], and the cost of cleaning up that contamination.”!! Panel Op. at 944. In a feat of self-deprecating candor, the panel then admits, “records that separate out, with any precision, the amount of toxic chemicals stored on one part of a facility as opposed to another would have had little 11“. cost of cleaning up that contamination.”? How could B & B, Railroads, or Shell have kept such records when it was the government agencies that cleaned up the contamination, rather than the facility operator, the partial lessor, or the materials seller? 67a utility to B & B, the operator of the facility, and none to the Railroads, the owners of the parcel.” See id. at 944. Even though the panel recognizes “the failure to keep these records is quite understandable,” the panel nonetheless saddles the defendants with joint and several liability for lack of such records.!2 See id. at 944. A. First, the panel holds that the district court’s reliance on the percentage of the B & B facility owned by the’ Railroads (19.1%) cannot support apportionment. /d. at 943-44. The panel reasons that 12 Tie panel also notes, “[wJhile it may seem unfair to hold a partial owner liable for all of the contamination cleanup costs, that perceived unfairness is the result of CERCLA’s expansive statutory liability scheme.” Panel Op. at 940-41. The panel is incorrect. CERCLA’s “expansive” liability scheme, as the panel itself admits, is silent as to whether defendants held strictly iiable under the statute are also jointly and severally liable for the entire harm, or only severally liable for the harm attributable to them. Id. at 934-35. As the panel correctly notes, Congress declined to mandate joint and several liability in CERCLA and intended. courts to follow Restatement principles in apportioning the harm between defendants held strictly liable. /d. In this case, the panel was not asked to determine whether the Defendant-Railroads were liable. Instead, the panel was charged with deciding whether the Defendant-Railroads, who were strictly liable under CERCLA, should be held jointly and severally liable for the entire cleanup cost. By conflating the establishment of liability and apportionment of liability questions, the panel disregards a basic tort principle: Strict liability is not mandatorily joint and several liability. Thus, the “unfairness” of holding a partial owner liable for the entire clean-up cost results, not from CERCLA’s strict liability scheme, but the panel’s unreasonable application of the Restatement apportionment principles to the facts of this case, affected perhaps by its confusion between strict (negligence free) liability and joint and several (apportionment free) liability. 68a percentage of ownership does not “provide a minimally reliable basis for tracing [the activities on the Railroad parcel to] the proportion of leakage” associated with the entire parcel because the B & B facility, including the Railroad parcel, is an inseparable facility with a “dynamic, unitary operation.” Jd. at 944. The panel’s conclusions are erroneous for two reasons. First, the panel got the law wrong: The district court’s reliance on percentage of land ownership as a proper factor in apportioning damages finds support from the Restatement and our sister circuits. A comment to Restatement (Second) of Torts § 433A(1), which has been relied on by other circuits to apportion CERCLA liability!’ and which the panel itself quotes, Panel Op. at 937 n. 20, describes an analogous scenario: There are other kinds of harm which, while not so clearly marked out as severable into distinct parts, are still capable of division upon a reasonable and rational basis, and of fair apportionment among the causes responsible. Thus where the cattle of two or more owners trespass upon the plaintiff's land and destroy his crop, the aggregate harm is a lost crop, but it may nevertheless be apportioned among the owners of the cattle, on the basis of the number owned by each, and the reasonable assumption that the respective harm done is proportionate to that number. Restatement (Second) of Torts § 433A(1) emt. d. 13 See, e.g., In re Bell Petroleum Servs., 3 F.3d 889, 903 (5th Cir.1993) (relying on this Restatement comment to reject the argument that absolute certainty is required for apportionment of CERCLA liability). 69a Even though it is not possible to determine the precise harm caused by each animal (e.g., one owner’s cattle might have idly stood by while the rest destroyed the crops; one owner’s cattle might have more heavy-footed bulls, and less light-footed heifers), the Restatement would permit apportionment because there is a reasonable basis (i.e., the number of cattle owned) to apportion liability.'4 See Bell Petroleum Servs., 3 F.3d at 903. Importantly, the Restatement, unlike the panel, does not require “adequate records” of the harm caused by each animal; the farmer is not required to stand by his crop at all times and meticulously record each step taken by each animal, to trace the harm done back to the individual cattle owners.}5 Indeed, this is precisely what the “reasonable basis” standard is designed to avoid: The 14 The Restatement specifically contemplates the use of the cattle hypothetical in the context of pollution damages: Such apportionment is commonly made in cases of private nuisance, where the pollution of a stream, or flooding, or smoke or dust or noise, from different sources, has interfered with the plaintiff's use or enjoyment of his land. Thus where two or more factories independently pollute a stream, the interference with the plaintiffs use of the water may be treated as divisible in terms of degree, and may be apportioned among the owners of the factories, on the basis of evidence of the respective quantities of pollution discharged into the stream. Restatement (Second) of Torts § 433A(1) emt. d. 15 Under the Restatement, the burden is on the plaintiff (i.e., the farmer) to prove each defendant was a “substantial factor” in causing a single harm. See O’Neil v. Picillo, 883 F.2d 176, 179 n. 4 (1st Cir.1989). Under CERCLA, our sister circuits have placed the burden of showing a reasonable basis for apportionment on the defendant. /d. Nevertheless, that the burden rests with the CERCLA defendant to establish a reasonable basis for apportionment, has no bearing on what the apportionment test is and whet proof is required to meet that test. 70a whole point of Restatement § 433A is that no specific evidence is required for apportionment so long as the evidence and method used are “reasonable.”!6 Further, the Restatement embraces “simple” considerations rejected by the panel—the number of cattle owned is a “simple,” yet sufficient, basis for apportionment. Even though it is impessible to determine the exact proportion of the contamination attributable to the Railroad parcel, the percentage of land ownership, like the number of cattle, provides one reasonable factor upon which to apportion liability under’ the Restatement. See United States v. Twp. of Brighton, 282 F.3d 915, 919-20 (6th Cir.2002) (holding that geographic divisibility may provide a basis for apportionment of CERCLA liability); United States v. Hercules, Inc., 247 F.3d 706, 717-18 (8th Cir.2001) (same). Second, the panel got its facts wrong, or more precisely, invented convenient facts. The district court’s findings of fact, which the panel does not find to be clearly erroneous, contradict the panel’s appellate factfimaing that the B & B facility was a “dynamic, unitary operation.” See Panel Op. at 944; see also Amadeo v. Zant, 486 U.S. 214, 228, 108 S.Ct. 1771, 100 L.Ed.2d 249 (1988) (rebuking the appellate court for ignoring the dictates of the clear error standard and engaging in “impermissible appellate factfinding”). 16 “Records” are not a required type of proof for apportionment under the Restatement, unlike other areas of substantive law where specific evidence is required—e.g., for conveyance of an interest in land, a memorandum in writing signed by the party to be charged is required, see, e.g., Cal. Civ-Code § 1624, and treason requires the testimony of two witnesses to the same overt act, U.S. Const. art. III, § 3, cl. 1. Tla The panel’s labeling the operations on the B & B facility as “dynamic” and “unitary” is a convenient blanket under which to hide the failure to look the facts in the face. The facts found by the district court show quite different operations took place on the Railroad parcel: Relatively fewer activities that could result in releases were conducted on the Railroad parcel. Daily operations that resulted in releases of hazardous substances occurred on the B & B parcel. Past releases at the Railroad parcel could not have contributed more than ten [percent] (10%) of the overall site contamination given the fact that the predominant activities conducted on the [0.9 acre] Railroad parcel through the years were storage and some washing and rinsing of tanks, other receptacles, and chemical application vehicles. Mixing, formulating, loading, and unloading of ag-chemical hazardous substances, which contributed most of the liability causing releases, were predominantly carried out by B & B on the [3.8 acre] B & B parcel. Atchison, 2003 WL 25518047, at *88 (emphasis added). The district court’s findings not only undermine the panel’s assertion that the B & B site was an inseparable facility with a “dynamic, unitary operation,” but also provide a reasonable basis for separating the Railroad parcel from the rest of the facility to apportion liability..7 The appendix, an 17 The panel contends apportionment is not possible because the district court found “B & B used the Railroad parcel as part of its total agricultural-chemical operations.” Pane] Op. at 944 n. 30. That is painting with a broad brush over the details; the details 72a overhead image of the B & B facility, tellingly shows how, as the district court found, substantially fewer contamination-causing activities were conducted on the Railroad parcel (labeled “Leased Property”), as compared to the B & B parcel (labeled “Brown & Bryant Property’). I also note the panel’s original opinion held that the B & B parcel “is distinct from the portion leased from the Railroads,” which further supports the district court’s apportionment calculations on the basis of percentage of land ownership. See Burlington Northern, 502 F.3d at 801. Recognizing, no doubt, that this finding undermines its position, the panel excises this finding from its amended opinion, without explanation. Second, the panel holds that the period the Railroads leased their parcel (13 years) as compared to the entire period of contamination (29 years) is a legally insufficient basis for apportionment. Panel Op. at 944, 945. The panel reasons there is an “evidentiary vacuum” about the contamination attributable to the pre-lease period, and no _ evidence’ suggests contamination was constant over the entire period. /d. at 945. The panel errs in concluding there is an “evidentiary vacuum” regarding the pre-lease give the true picture. The panel’s contention merely begs the apportionment question. That B & B used the Railroad parcel as part of its operations says nothing about whether liability may be apportioned between the Railroad parcel and the B & B parcel. The answer to that question lies in the undisputed findings of the district court that different operations took place on each parcel and the contamination on the Railroad parcel could have caused no more than 10% of the overall contamination. See Atchison, 2003 WL 25518047, at *88. 73a contamination. The panel itself notes some contamination occurred before B & B leased the Railroad parcel. Jd. at 942. Further, B & B implemented procedures to reduce contamination after it leased the Railroad parcel.'!® Thus, the district court’s assumption of constant contamination over the entire period not only provides a reasonable basis to apportion liability, but, if anything, overestimates the contamination attributable to the Railroad parcel. Further, the district court’s reliance on period of ownership finds support from the’ -Restatement hypothetical discussed above. Just as it is reasonable to assume that each of the cattle caused an equal amount of harm even though some of the cattle may have done no harm to the land, it is also reasonable to assume that each year of ownership caused an equal amount of contamination, even though the contamination may have been worse in some years than in others. See also Bell Petroleum Servs., 3 F.3d at 903-04 (holding apportionment is possible among the sequential owners of a chrome-plating site, even though the records of the chrome-plating activities were incomplete); Hercules, 247 F.3d at 718 (noting apportionment is possible where “two defendants, independently operating the same plant, pollute a stream over successive periods of time” (citation omitted)). Thus, the panel also errs in rejecting 18 In the first twenty years of its operations (from 1960 to 1980), B & B “took almost no precaution to prevent the release of hazardous agricultural chemicals into the environment.” Atchison, 2003 WL 25518047, at *26. At trial, a B & B executive testified that in 1980, B & B lined the sumps with concrete boxes, and in 1984, B & B built a contained area for rinsing equipment to prevent chemicals from draining to the sumps. 74a apportionment based on period of ownership.!9 In sum, despite two bases for apportionment of liability approved by the Restatement and our sister circuits— percentage of land ownership and period of ownership—the panel erroneously imposes joint and several liability on the Railroads for the entire clean-up cost of the B & B facility. Ill. Unlike the Railroads, Shell contested its liability on appeal. The panel holds Shell liable as an “arranger,” which is defined as any person who “arranged for disposal or treatment... of hazardous substances owned or possessed by such person.” 42 U.S.C. § 9607(a)(3) (emphases added). CERCLA does not define “arranged for.” We have interpreted “arranged for” to rest on two alternate bases for liability: “direct” and “broader” arranger liability. McColl, 294 F.3d at 1054-55. The latter is at issue here because no one claims Shell directed the dumping of hazardous substances onto the B & B facility. Under “broader” arranger liability, an entity need not have direct involvement in an arrangement for the disposal of waste; liability may be imposed if the entity had “sufficient control over the process that created the waste.” Jd. at °055. We have no clear test for establishing broader arranger liability. Jd. at 1055-56. 19 The only clear error the panel finds is the district court’s exclusion of D-D from the contamination attributable to the Railroad parcel. Panel Op. at 945. The panel so holds because there was evidence that D-D leaked on the Railroad parcel and no evidence that it did not. /d.; see Atchison, 2003 WL 25518047, at *90. I do not disagree with this holding, but note that this error merely alters the proportion of liability attributable to the Railroads and perhaps may be a basis for remand. It has no impact on the ultimate conclusion that the Railroads cannot be jointly and severally liable for the entire clean-up cost. 75a Nevertheless, “actual control” over the hazardous substance is a “crucial element” of broader arranger liability, and mere “authority to control,” were it actually established by the evidence, simply does not suffice. See id. at 1055, 1057. The panel imposes arranger liability on Shell as a seller of the agricultural product D-D to B & B, which then contaminated its facility in part with Shell’s product. The panel notes that because unintentional practices like “leaking” are included within the definition of “disposal” under CERCLA, “disposal” need not be purposeful. Panel Op. at 949. Thus, according to the panel, “an entity [like Shell] can be an arranger even if it did not intend to dispose of the product.” Jd. at 949. The panel’s_. statutory’ interpretation is unpersuasive. Even though the definition of “disposal” may include unintentional practices, mere “disposal” does not constitute arranger liability. Instead, arranger liability requires the defendant to have “arranged for” such disposal (not just arranged for the sale). This connotes an intentional action toward achieving the purpose: disposal. See Webster’s Third New International Dictionary 120 (1993) (defining “arrange” as “to make preparations for”). It is an oxymoron for an entity wnintentionally to make preparations for disposal. Further, the statutory definition of “disposal” does not cover the “sale” of a hazardous substance, which was the exclusive purpose of the contract between Shell and B & B. That leakage may occur during the transfer of D-D from the common carrier to B & B’s storage tanks cannot mean that Shell, as a seller, 76a arranged for such leakage.2° By imposing arranger liability on a mere seller, the panel stretches the meaning of arranger liability beyond any cognizable limit and creates inter-circuit splits. See, e.g., AM Int'l, 982 F.2d at 999 (“(C]Jourts ... have consistently held that the mere sale of a product is not ‘arranging for disposal’ under [CERCLA].”); Fla. Power & Light Co. v. Allis Chalmers Corp., 893 F.2d 1313, 1317 (11th Cir.1990) (“If a party merely sells a product, without additional evidence that the transaction includes an ‘arrangement’ for the ultimate disposal of a hazardous substance, CERCLA liability {can]not be imposed.”). Even assuming a defendant can be held liable as an arranger for the mere sale of a product, the panel’s holding is inconsistent with McColl, which requires actual control over the hazardous product as a crucial element of arranger liability. See McColl, 294 F.3d at 1055. In McColl, the United States was sued under CERCLA for the clean-up costs of a site contaminated with fuel. The site was used to manufacture war supplies for the United States under government contracts, and the United States was aware that waste was being produced. /d. at 1050-51. We held the United States could not be liable as an arranger because it did not exercise actual control over the disposal of fuel, even though it had the authority to control such disposal. Jd. at 1057-58. The panel creates an intra-circuit conflict by reducing McColl’s actual control requirement from a “crucial element” for arranger liability to a mere “pertinent consideration,” 20 The panel’s conclusion is tantamount to saying that a bartender “arranges for the disposal” of bourbon onto the bar when he sells a glass of bourbon F.O.B. patron, who, while carelessly lifting the glass, spills the bourbon. 77a which is “informative only in light of additional considerations.” Panel Op. at 950-51.2! The panel holds Shell liable as an arranger because: (1) {D-D] [s]pills occurred every time the deliveries were made; (2) Shell arranged for delivery and chose the common carrier that transported its product to the Arvin site; (3) Shell changed its delivery process so as to require the use of large storage tariks, thus necessitating the transfer of large quantities of chemicals and causing leakage from corrosion of the large steel tanks; (4) Shell provided a_ rebate for improvements in B & B’s bulk handling and safety facilities and required an inspection by a qualified engineer; (5) Shell regularly would reduce the purchase price of the D-D, in an amount the district court concluded was linked to loss from leakage; and (6) Shell distributed a manual and created a checklist of the manual requirements, to ensure that D-D tanks were being operated in accordance with Shell’s safety instructions. Id. at 950-51 (emphasis in original). This is insufficient to establish Shell’s “actual control” of the D-D transfer from the tank-trucks to B 21 The pancl’s attempt to sidestep McColl is inapposite. The panel notes that McColl viewed control as a “crucial element” of arranger liability only because the United States in that case, unlike Shell here, never owned the hazardous substances before disposal. Panel Op. at 951. Even though the panel may have wished it were otherwise, McColl’s holding is not so limited: “We agree with the Oil Companies and the district court that control is a crucial element of the determination of whether a party is an arranger under § 9607(a)(3).” McColl, 294 F.3d at 1055 (emphasis added). 78a & B’s storage tanks. This evidence at best establishes Shell’s inflwence over the transfer process (e.g., through rebates, the provision of manuals and checklists, etc.), which falls far short of the actual control required by McColl. Shell did not own or operate the B & B facility, nor did any Shell employees play a role in the D-D transfer. The evidence in fact establishes that Shell relinquished control over the D- D once the common carrier arrived at the B & B site and before the transfer of D-D. The district court found, and the panel does not dispute, “stewardship” of D-D passed to B & B when the common carrier arrived at the B & B facility. Atchison, 2003 WL 25518047, at *23. The Conditions of Sale stated B & B would “furnish and maintain facilities for receiving and storing all Products delivered, which are safe, adequate and in compliance with all applicable governmental requirements and shall unload each delivery promptly and at Buyer’s own risk and expense.” See id. at *68 (emphasis added). Thus, Shell did not have “actual control” over the transfer of D-D and cannot be held liable as an arranger.= 22 The panel also imposes joint and several liability on Shell, rejecting as legally insufficient the district court’s apportionment calculations based on the amount of D-D spilled during the transfer process. Panel Op. at 945-48. Even assuming Shell can be held liable as a CERCLA arranger, the panel errs in holding Shell jointly and severally liable for the entire contamination, including contamination from products Shell did not sell to B & B. The panel notes it does not hold Shell liable for the clean-up of the “Dinoseb hot spot,” a discrete area on the east side of the B & B parcel that was contaminated by a major Dinoseb (a Dow product) spill in 1983. See id. at 952 & n. 35. According to the panel, this means Shell is not liable for contamination from products it did not sell. Jd. The panel is quite incorrect. First, the 79a IV. En banc rehearing was necessary because the panel’s broad definition of arranger liability and its erroneous application of CERCLA apportionment principles impose CERCLA liability where Congress did not intend. The panel decision creates disorder in CERCLA jurisprudence by causing intra. and inter- circuit conflicts in an area where uniformity over the interpretation of the federal statutory law, based on commonlaw principles, is of the utmost importance. Under the panel’s CERCLA apportionment analysis, a landowner who leases a lot to an outfit that contaminates the land while going broke will be stuck with the entire clean-up bill—notwithstanding the leased lot’s size compared to the overall facility at which pollution disposal occurred, the length of the lease compared to the period of the contamination, or the contamination actually attributable to the leased lot. That is, the lessor will pay all clean-up costs unless he comes up with records that show how much was spilled, where, and when—although the panel candidly acknowledges that no one could be expected to keep such records. The lessor will also pay unless he can pane! still holds Shell liable for Dinoseb spills outside the discrete “Dinoseb hot spot” and elsewhere on the B-& B facility, even though Shell did not manufacture or sell Dinoseb. See Atchison, 2003 WL 25518047, at *91 (“Thle] [EX PA’s] removal action [on the “Dinoseb hot spot”] was intended to remediate only the [D]inoseb that contaminated the [“Dinoseb hot spot”), not the entire site.”); Panel Op. at 945-48. Second, Shell’s arranger liability is premised solely on the D-D spills, not spills of Nemagon or Dinoseb. See Panel Op. at 945-51. Regardless, the panel holds Shell jointly and severally liable for the contamination resulting from all three products—Nemagon, Dinoseb, and D & D—spilled on the B & B facility. See id. at 945-48. 80a come up with records of the cleanup and the cost thereof, even if he did not do the clean-up. Further, under the panel’s novel definition of “arranger” liability, sellers of chemical products will be saddled with the entire clean-up cost of a facility contaminated in part with their products, even if they lacked control over the products spilled following the sale. Accordingly, I respectfully dissent from the denial of rehearing en banc. 8la APPENDIX Stte Map 82a UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA UNITED STATES of America and Department of Toxic Substances Control of the State of California, Plaintiffs, We The ATCHISON, TOPEKA & SANTA FE RAILWAY COMPANY et al., Defendants. and Related Cross-Claims and Third Party Actions. Nos. CV-F-92-5068 OWW, CV-F-96-6226 OWW, CV-F-96-6228 OWW. July 15, 2003. 2003 WL 25518047 AMENDED FINDINGS OF FACT AND CONCLUSIONS OF LAW Fed.R.Civ.P. 52(a) OLIVER W. WANGER, United States District Judge. A bench trial was held in the above entitled matter between March 3-May 14, 1999 in Fresno, California. Plaintiff United States EPA was represented by James MacAyeal, Esq., Victoria Lang, Esq. and Stephanie Johnson, Esq. Plaintiff State of California DTSC was represented by Reed Sato, Esq. Defendants Southern Pacific Transportation Co. and the Atchison, Topeka & Sante Fe Railroad Co. (“Railroads”) were represented by Ike Lasater, Esq., Nance F. Becker, Esq., and Mare 83a A. Zeppetello, Esq. Defendant Shell Oil was represented by Randall Heldt, Esq., Michael Johnson, Esq., and David Earle, Esq. On May 24, 2002 the court issued Findings of Fact and Conclusions of Law pursuant to Fed.R.Civ.P. 52(a). On August 22, 2002 the court issued an Order to Modify Findings of Fact and Conclusions of Law, and then on September 26, 2002 the court issued an Order amending the Findings of Fact and Conclusions of Law based on a stipulation by the parties. The parties subsequently filed various motions to amend the court’s Findings of Fact and Conclusions of Law under Fed.R.Civ.P. 52(b) and 59(a). On May 28, 2003 the court issued a Memorandum Opinion and Order ruling on the parties’ motions to amend the Findings of Fact and Conclusions of Law, granting in part and denying in part the parties’ motions. On June 13, 2003, the court issued an errata Order on defendants’ motions to amend. The following amended findings of fact and conclusions of law are made pursuant to Fed.R.Civ.P. d2(a). I. BACKGROUND In 1975, Brown & Bryant, Inc. (“B & B”). began leasing an acre of land adjacent to a four acre parcel it owned in order to complement its agricultural chemical distribution business in Arvin, California. The leased acre was jointly owned by the Defendant Southern Pacific Transportation Co. and the Atchison, Topeka & Sante Fe Railroad Co. B & B commenced business at the Arvin property in 1960 and ceased operations in 1989. B & B used the leased acre (“Railroad Parcel”) over the lease term to park the fertilizer and chemical spray rigs used to transport various chemicals to its 84a customers, until 1989. In 1983, the State of California’s Department of Health Services (““DTSC”) found Brown & Bryant in violation of several hazardous waste laws. A separate United States Environmental Protection Agency (“EPA”) investigation found evidence of substantial soil and groundwater contamination at B & B’s Arvin operations. Pursuant to cleanup authority under the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq. (CERCLA), the EPA and DTSC incurred remediation costs. A bench trial was held before the court from March 30, 1999 to May 14, 1999. B & Bis bankrupt. Its default has been entered. B & B did not appear at trial. The state and federal governments seek to recoup their costs from the Railroads and Shell. All parties submitted proposed Findings of Fact and Conclusions of Law on July 19, 1999. All parties responded to the proposed facts and conclusions by August 18, 1999. Closing arguments were held before the court on September 28, 1999. Il. PRELIMINARY MATTERS A. Legal Standard In trials without juries, Fed.R.Civ.P. 52(a) requires a court to “find the facts specially and state separately its conclusions of law thereon.” See Barnett v. Sea Land Service, 875 F.2d 741, 744 (9th Cir. 1989). B. Judicial Notice Both the Railroads and Shell move for judicial notice of EPA responses to June 1999 Freedom of Information Act requests regarding the chemical 1, 2, 3-trichloropropane. Federal Rule of Evidence 201 provides in pertinent part: A judicially noticed fact must be one not subject to reasonable dispute in that it is either (1) generally 85a known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned. A court shall take judicial notice if requested by a party and supplied with the necessary information. The EPA documents sought to be judicially noticed state that EPA has concluded 1, 2, 3-trichloropropane is not a hazardous substance under CERCLA and that its listing in the Code of Federal Regulations was an error. The letters are judicially noticed as to their existence and the finding of non-hazardousness as to 1, 2, 3-trichloropropane. I. FINDINGS OF FACT A. B & B’s Arvin, California Operations 1. B & B first began operating a fertilizer and agricultural chemical storage, distribution and custom ag-chemical applicator facility at 600 S. Derby Street, Arvin, California in 1960 on a leased parcel of land previously used as farmland. See Ex. G-1; Ex. G-2, Pre-Trial Order, March 2, 1999, Undisputed Fact 1. 2. The B & B plant ultimately came to include two parcels: (1) the original parcel leased in 1960 and later purchased by B & B in 1976 (the B & B parcel); and (2) a smaller adjoining parcel to the west of the first parcel owned jointly by The Atchison, Topeka & Santa Fe Railway (now known as the Burlington Northern and Santa Fe Railway Company) and the Southern Pacific Transportation Company (now known as the Union Pacific Transportation Cornpany) (the “Railroads”) (the Railroad parcel). See Ex. G-l; Ex. G-2. 3. The overall size of B & B’s Arvin operations was 4.7 acres: the Railroad parcel is 0.9 acres and the adjoining B & B parcel is 3.8 acres. See Ex. G-6, at 4(B 86a & B parcel is 3.8 acres); Ex. G-3, at 1 (B & B Arvin Plant is 4.7 acre site). 4. Before the 1975 lease, the Railroads and B & B entered into a 1960 rail spur agreement allowing B & B to construct and use a rail spur along the west side of the warehouse. See Ex. G-1; Testimony of John H. Brown at 779 (“Brown”). 5. Generally, any property to the west of the warehouse is Railroad parcel. Jd. at 778; Ex. G-28.2. 6. The exclusive purpose of the 1975 lease between the Railroads and B & B was for parking “fertilizer rigs.” See Ex. G-19. A “fertilizer rig” is a generic term that refers to any application rig, whether for ag-chemicals, weed killer or fertilizer. Brown at 1003. 7. During the lease, the Railroads inspected the plant and knew that B & B was in the business of distributing chemicals other than fertilizers and that B & B used the leased parcel as a part of its total agricultural chemical operations. See Ex. G-28.1 (“Fenced open storage of farm chemicals and miscellaneous equipment. This leased area was fully used as an integral part of the adjacent farm chemical distribution facility.”); Ex. G-28.2 (“active site fully used for handling & storage of farm chemicals”); Brown at 1004 (Railroads inspected property); /d(B & B’s logo, prominently displayed on the large UN-32 tank, stated: “Brown & Bryant Agricultural Chemicals”); J. Stuart Ondeck Dep. at 67 (Railroad inspector noted in 1978: “Fenced open storage of farm chemicals and miscellaneous equipment. This leased area is fully used as an integral part of the adjacent farm chemical distribution facility.”). 87a B. [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385015_0097%3A0. Public record. Not legal advice.