Amicus Curiae Brief — Shell Oil Co. v. United States (Nos. 07-1607, 07-1601)
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No. 07-1607 —
MO? 4 2008
Jn ude OFFICE OF THE CLERK
7oupreme Court of the Hnited 7-tates
e
SHELL OIL COMPANY,
Petitioner,
vs.
UNITED STATES OF AMERICA, et al.,
Respondents.
°
On Writ Of Certiorari To The
United States Court Of Appeals
For The Ninth Circuit
¢
BRIEF AMICUS CURIAE OF INTERNATIONAL
ASSOCIATION OF DEFENSE COUNSEL IN
SUPPORT OF PETITIONER SHELL OIL COMPANY
+
Horvitz & LEVY LLP
MARY-CHRISTINE SUNGAILA
JEREMY B. ROSEN
BRADLEY S. PAULEY
FELIX SHAFIR*
*Counsel of Record
15760 Ventura Boulevard, 18th Floor
Encino, California 91436-3000
(818) 995-0800
Attorneys for Amicus Curiae
International Association of Defense Counsel
CUCKLE LAW BRIEF PRINTING CO (800) 225-6964
OR CALL COLLECT (402) 242.2831
“V0 & Ge
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES .........csssessscesssseeseseeesees iii
INTEREST OF AMICUS CURIAE -.0.esseccsessssseee0ee: 1
SUMMARY OF ARGUMENT ........c..scsessseessseessveen 1
a i a 3
THE COURT SHOULD HOLD THAT THOSE
WHO SELL NEW, USEFUL PRODUCTS ARE
NOT SUBJECT TO “ARRANGER” LIABILITY
SF EID: concscsscncnssenedneseesensovnninterenvminececs 3
A. CERCLA imposes “arranger” liability only
on those who arrange for the disposal or
i i siissniitcnictnepnertinitsttdititsipecerces 3
1. Under CERCLA’s plain language, “ar-
ranger” liability applies exclusively to
parties who arrange for the disposal or
ROUGE GE WIIED ois ccciscescvnccoctcesscescscess 3
2. Aminority of district courts have erro-
neously held that parties who sell any
hazardous substance, even if the mate-
rial is not waste, can be liable as “ar-
rangers.” Their decisions contravene
CERCLA’s plain language and legisla-
IE inc duiddchiiassatcnedetenbedionbcinatenidess 7
B. The Ninth Circuit erred in subjecting Shell
to “arranger” liability because parties who
manufacture and sell new, useful products
are not arranging for the disposal of
“waste” and thus cannot be held liable for
clean up costs under CERCLA.................... 12
il
TABLE OF CONTENTS - Continued
Page
1. The useful product doctrine distin-
guishes between wastes and useful
products and thereby protects those
who manufacture and sell new, useful
products from “arranger” liability ........ 12
2. The Ninth Circuit’s overly expansive
“arranger” liability standard in this
case disregards CERCLA’s waste re-
I ceietcaniectinctemsalintictnbiiiennisainns 18
C. Expanding “arranger” liability to manufac-
turers who sell useful products will have
severe and far-reaching ramifications ........ 21
CARAT sscisisicicioreihstnicendsonnsiiiinlinienbseventesivesinutens 26
ill
TABLE OF AUTHORITIES
Page
CASES
3550 Stevens Creek Assocs. v. Barclays Bank,
ORS FBS LSSS (Gti Cis. 2980) ....ccccsevcscssccocccccccsscccces 9
A & W Smelter & Refiners, Inc. v. Clinton, 146
F.3d 1107 (9th Cir. 1998)................... 5, 13, 16, 17, 21
AM Intl, Inc. v. Int'l Forging Equip. Corp., 982
TE NG. FITTED bascnrtnesinsssevecsevisccsmensesenend 6, 14
Amcast Indus. Corp. v. Detrex Corp., 2 F.3d 746
IE Ts isincishicainsigcensiannncsinisiiegh 6, 13, 14, 17, 19
Amoco Oil Co. v. Borden, Inc., 889 F.2d 664
eee ee ee See coe eery 10, 11
Artesian Water Co. v. Govt of New Castle
County, 851 F.2d 643 (3d Cir. 1988) ..................... 10
Bowsher v. Merck & Co., 460 U.S. 824 (1983)............. 8
Cal. Dept of Toxic Substances Control v. Alco Pac.,
Inc., 508 F.3d 930 (9th Cir. 2007) .......... 6, 7, 12, 14, 16
Cal. ex rel. Cal. Dep’t of Toxic Substances
Control v. Verticare Inc., 1993 WL 245544
3 eg ee enone 8, 10
Cal. ex rel. State Dep't of Toxic Substances v.
Summer del Caribe, Inc., 821 F. Supp. 574
I i nc cenieciihdinaieebinansiialgemsdioeialia 8, 9, 10
Canadyne-Georgia Corp. v. NationsBank, N.A.
183 F.3d 1269 (lith Cir. 1999)....................ccccccrceseeee 4
iv
TABLE OF AUTHORITIES — Continued
Page
Carson Harbor Vill., Ltd. v. Unocal Corp., 270
5 Rn: aT En 10
Centerior Serv. Co. v. ACME Scrap & Iron
Metal Corp., 153 F.3d 344 (6th Cir. 1998).............. 24
City of Tulsa v. Tyson Foods, Inc., 258
F. Supp. 2d 1263 (N.D. Okla. 2003)................ ee. 22
Commander Oil Corp. v. Barlo Equip. Corp.,
a i a chuniantineroneneouss 4
Courtaulds Aerospace, Inc. v. Huffman, 826
F. Supp. 345 (B.D. Cal. 1993) .................scssscssseseeees 5
Covalt v. Carey Canada, Inc., 860 F.2d 1434
a BEI cin ciiciidenpsisitnscsencasilindinathiadipigsilgininiiemmiecens 11
CP Holdings, Inc. v. Goldberg-Zoino & Assocs.,
Inc., 769 F. Supp. 432 (D.N.H. 1991)... eee 8
Dayton Indep. Sch. Dist. v. U.S. Mineral Prods.
Co., 906 F.2d 1059 (5th Cir. 1990) ...14, 15, 19, 21, 22
Differential Dev.-1994, Ltd. v. Harkrider Dis-
trib. Co., 470 F. Supp. 2d 727 (S.D. Tex. 2007) ...... 22
Douglas County, Neb. v. Gould, Inc., 871
F. Supp. 1242 (D. Neb. 1994)......................02008 13, 15
Exxon Corp. v. Hunt, 475 U.S. 355 (1986)................. 11
Fla. Power & Light Co. v. Allis Chalmers Corp..,
Se ee BP CRUE GARE BO Pecccccevecccccsecsesesscncesones 14
Freeman v. Glaxo Wellcome, Inc., 189 F.3d 160
SE SIN iaiencckincndesisennedsntsncdcnsscasmpuanapeel 6, 13, 15
G..). Leasing Co. v. Union Elec. Co., 54 F.3d 379
es I eichiiercsiciikerscisntersstintbnonatiarienetcindapabiimiad 21, 22, 23
v
TABLE OF AUTHORITIES — Continued
Page
Gould Inc. v. A & M Battery & Tire Serv., 933
BF. Depp. 451 CAL. Fe. 1GBB) nncccccaseccccessccecsosesescesses 14
ITT Indus., Inc. v. BorgWarner, Inc., 506 F.3d
Se Ge GD iastiicairtintihnincntididndanies 24
Karnb v. U.S. Coast Guard, 869 F. Supp. 793
Ue is Be idcicnnsiovctccnnicvincnaidisetitntiaimmmiadiianl 21, 22
King v. St. Vincent’s Hosp., 502 U.S. 215 (1991) ......... 9
Metro. Water Reclamation Dist. v. N. Am.
Galvanizing & Coatings, Inc., 473 F.3d 824
EEE ane mes ee R Te Fn, 11
Morton Int'l, Inc. v. A.E. Staley Mfg. Co., 343
ee ee IE SD scsscsccnissinteninncenciiiniiaaiieinitaiei 14
Otay Land Co. v. U.E. Lid. LP, 440
F. Supp. 2d 1152 (S.D. Cal. 2006)............0000.... 17, 21
Pneumo Abex Corp. v. High Point, Thomasville
& Denton R.R. Co., 142 F.3d 769 (4th Cir.
TTT kecctnssiiesiiitcssagncidlininenineininineseaisaaiaciaaiiaaanaia 3, 6, 13, 17
RSR Corp. v. Avanti Dev., Inc., 68 F. Supp. 2d
Re hs TRE, ID cinstctnsssicnseeseaccnieticigiiaaliaieastiiieidiaals 15
S. Fla. Water Mgmt. Dist. v. Montalvo, 84 F.3d
a tciiniintvcsneceiintiodioudeasiamiadmcnl 4
United States v. Aceto Agric. Chems. Corp., 872
ee re Ce Ge, I accccensscnsinnenntpitenennnnpiapiemeens 14
United States v. Bestfoods, 524 U.S. 51 (1998)............ 4
United States v. COMG Realty Co., 96 F.3d 706
GEESE. BPD cccccsosnconseccoiassdtenetscinaieadabiainnennanl 10
vi
TABLE OF AUTHORITIES — Continued
Page
United States v. Cello-Foil Prods., Inc., 100
ee I ED scesennnncionsonesonss 17
United States v. Conservation Chem. Co., 619
F. Supp. 162 (W.D. Mo. 1985) .............ccccccsceeseeeeeeeeees 8
United States v. Farber, 1988 WL 25427
SS, TEU, OE Ricccccccaccscdsccesscocbtecevscossssceses 7,10
United States v. Lyon, 2007 WL 4374167 (E.D.
I uoebsadonnne 22
United States v. Mottolo, 605 F.Supp. 898
EEE RES a CG A 11
United States v. Ne. Pharm. & Chem. Co., 810
I si eeenmnonsenonacnonss 8
United States v. Summit Equip. & Supplies,
Inc., 805 F. Supp. 1422 (N.D. Ohio 1992)................. 8
United States v. Wedzeb Enters., Inc., 844
F. Supp. 1328 (S.D. Ind. 1994)............. eee 13
Young v. United States, 394 F.3d 858 (10th Cir.
I a nsinonnonnaniion ll
STATUTES
EE ee 24
EE ne a ne 24
i ceisesnennbnniundell 5
SE TIE... 5. cncuvatenenccesoosecsonsecs 5, 8, 17, 19
A a NN 13
cis acdcitennadnetenddunenecndensdentdas 12,13
vii
TABLE OF AUTHORITIES — Continued
Page
I oa scthiedislleseidaiaeeialalehaall 5, 8
IT iininnnssnnscesoisiaseiediinetiedadiuatieieantl 1
i socncnscminccsissncensstebeconsseuees 5,9, 12
42 U.S.C. $§ 9604-9605 o.oo... cceccecceccccsecescecsecesseeceeces 24
A cciainatensnnesinaneiballl 2,4
ee I ods cecisnnintinteinicennnapammbesiieleneda 4,8
MISCELLANEOUS
Cindy Skrzycki, GE Ads Zap the EPA Over
PCB Cleanup, Wash. Post, July 24, 2001......... 23, 24
Gregory A. Robins, Note, Catellus Development
Corp. v. United States: A “Solid” Approach to
CERCLA “Arranger” Liability, or a “Waste” of
Natural Resources?, 47 Hastings L.J. 189
RB EESEPRIEEA SSUES oa cs SEES AS I RNIEEIO a AA OS 10
H.R. Rep. No. 96-1016(I) (1980), reprinted in
ee ee, A ciictinniniicinnntsanitsauntinnsscrenceseceos ll
Ian Erickson, Comment, Reconciling the CER-
CLA Useful Product and Recycling Defenses,
eee Tat BE Se ID victincsccncccsecsccnscsnsesecevscoes 5, 16
Jeffrey M. Gaba, [nterpreting Section 107(a)(3)
of CERCLA: When Has a Person “Arranged
for Disposal?”, 44 Sw. L.J. 1313 (1991) .........0........ 12
Michael Carter, Successor Liability Under
CERCLA: It’s Time to Fully Embrace State
Law, 156 U. Pa. L. Rev. 767 (2008) ........................ 24
Vili
TABLE OF AUTHORITIES — Continued
Michael L. Italiano et al., Environmental Due
Diligence During Mergers and Acquisitions,
10 Nat. Resources & Env’t 17 (1996) ..................... 23
National Institute of Standards and Technol-
ogy, General Infor:nation, http://www.nist.gov/
public_affairs/general2. htm.................cccccceeeeeeeeeeees 25
National Institute of Standards and Technol-
ogy, Hollings Manufacturing Extension Part-
nership, hltp://www.nist.gov/public_affairs/guide/
IR snceiicsccthersenininanidadsittadiniatbtagiiniginistianiideininnnanes 25
Press Release, U.S. Dep’t of Justice, W.R.
Grace to Pay for Cleanup of Asbestos Con-
tamination in Libby, Montana (Mar. 11,
2008), available at http://www.usdo}j.gov/opa/
pr/2008/March/08_enrd_194.html........................0. 23
Roger K. Ferland & Marilyn D. Cage, Using
RCRA to Interpret CERCLA Liability: What
is “Arranging for Disposal”?, 23 Ariz. St. L.J.
ee biitetedaeniheniictaiitithdtiiianidbiiiehntatiiitaatbisiteteidatniipsinncees 9
Tommy T. Henson II, What a Long, Strange
Trip It’s Been: Broader Arranger Liability in
the Ninth Circuit and Rethinking the Useful
Product Doctrine, 38 Envtl. L. 941 (2008)......passim
U.S. Census Bureau, 2005 Statistics of U.S.
Businesses — U.S., sectors, http://www2.census.
gov/csd/susb/2005/uslrg05.xls............00. cececeeeeeeeeeeee 25
ix
TABLE OF AUTHORITIES — Continued
Page
U.S. Dep’t of Commerce, Manufacturing in
America: A Comprehensive Strategy to Ad-
dress the Challenge to U.S. Manufacturers
(Jan. 2004), available at http://www.commerce.
gov/opa/press/Secretary_Evans/2004_Releases/
Manufacturing%20Report/DOC_MFG_Report_
ee i tihiiicrtnetisitcsinciinensivienssibinainitdbiiisaenmeanences 25
U.S. Environmental Protection Agency, Clean-
ing Up the Nation’s Waste Sites: Markets
and Technology Trends (Sept. 2004), avail-
able at http://www.clu-in.org/download/market/
| __ SELTE EMER. LIAS TE DRTC 23, 24
1
INTEREST OF AMICUS CURIAEF'
Amicus curiae International Association of De-
fense Counsel (“LADC” or “amicus”) is an association
of corporate and insurance attorneys whose practice
is concentrated on the defense of civil lawsuits. The
IADC is dedicated to the fair and efficient admini-
stration of civil justice and consistently seeks to
improve the civil justice system. Amicus supports a
justice system in which plaintiffs are fairly compen-
sated for genuine injuries, responsible defendants are
held liable only for appropriate damages, and non-
responsible defendants are exonerated without un-
reasonable cost.
SUMMARY OF ARGUMENT
The Comprehensive Environmental Response,
Compensation, and Liability Act (“CERCLA”), 42
U.S.C. §§ 9601-9675 (2006), sets out a statutory
scheme providing for the remediation of hazardous
waste sites. CERCLA allows the federal government
and states to recover the clean up costs inewrred for
this remediation from specified parties — including
' This brief was authored by amicus and its counsel bisted
on the front cover, and was not authored in whole or in part by
counsel for a party. No one other than amicus or its counsel has
made any monetary contribution to the preparation or submis-
sion of this brief. Amicus has the consent of the parties te file
this brief. Letters indicating their consent are being submitted
with this brief.
2
those who arranged for the disposal or treatment of
hazardous materials at the site. See 42 U.S.C.
§ 9607(a).
The government’s authority to recover clean up
costs from “arrangers” is not boundless, however.
Congress chose to impose “arranger” liability only on
a specific group: those who arrange for the disposal or
treatment of waste. Not every material qualifies as
“waste” and, notably, useful products do not fit within
the statutory definition. The distinction between
waste and useful products is critical, allowing manu-
facturers to sell innumerable useful products without
fear of potentially devastating CERCLA liability.
In this case, the Ninth Circuit disregarded CER-
CLA’s waste requirement, holding petitioner Shell Oil
Company (“Shell”) liable as an “arranger” for selling a
new, useful agricultural product. Left undisturbed,
the Ninth Circwit’s overly expansive “arranger”
liability standard could expose countless manufactur-
ers to the enormous costs of cleaning up others’
property pursuant to CERCLA even though these
manufacturers did not engage in the disposal of waste
when they made and sold new, useful products. The
Ninth Circuit’s improper expansion of “arranger”
liability in direct contravention of CERCLA’s plain
language threatens to discourage the manufacture
and sale of new, useful chemicals as well as many
other beneficial products containing hazardous sub-
stances.
3
This Court should adhere to CERCLA’s waste
requirement for “arranger” liability and hold that
manufacturers and sellers of new, useful products
cannot be liable as “arrangers” because such useful
products are not waste. Accordingly, this Court should
reverse the Ninth Circuit’s decision holding Shell
liable as an “arranger” for manufacturing and selling
a new, useful product.
@
ARGUMENT
THE COURT SHOULD HOLD THAT THOSE
WHO SELL NEW, USEFUL PRODUCTS ARE
NOT SUBJECT TO “ARRANGER” LIABILITY
UNDER CERCLA.
A. CERCLA imposes “arranger” liability only
on those who arrange for the disposal or
treatment of waste.
1. Under CERCLA’s plain language, “ar-
ranger” liability applies exclusively to
parties who arrange for the disposal or
treatment of waste.
In 1980, Congress enacted CERCLA “to provide
for the clean up of hazardous waste from polluted
sites throughout the United States.” Pneumo Abex
Corp. v. High Pomt, Thomasville & Denton R.R. Co.,
142 F.3d 769, 773 (4th Cir. 1998). Under CERCLA,
parties who are “potentially responsible for hazard-
ous-waste contamination may be forced” to help pay
4
for the clean up costs of a hazardous waste site.
United States v. Bestfoods, 524 U.S. 51, 56 n.1 (1998).
CERCLA does not automatically assign liability
to every person with an attenuated connection to a
hazardous waste site. Commander Oil Corp. v. Barlo
Equip. Corp., 215 F.3d 321, 327 (2d Cir. 2000); see S.
Fla. Water Mgmt. Dist. v. Montalvo, 84 F.3d 402, 409
(11th Cir. 1996) (“CERCLA liability ... is not bound-
less.”). Rather, clean up costs may be recovered only
from four statutorily-enumerated classes of poten-
tially responsible parties (PRPs). See 42 U.S.C.
§ 9607(a); Canadyne-Georgia Corp. v. NationsBank,
N.A., 183 F.3d 1269, 1273 (11th Cir. 1999) (“CERCLA
subjects only ‘covered persons’ to liability. There are
only four classes of potentially responsible par-
ties... .”).
One of the four classes of PRPs liable for clean
up costs are “arrangers,” whom section 107(a)(3) of
CERCLA (“section 107(a)\(3)”) defines as:
[AJny 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 sub-
stances owned or possessed by such person,
by any other party or entity, at any facility or
incineration vessel owned or operated by an-
other party or entity and containing such
hazardous substances. .. .
42 U.S.C. § 9607(aX3) (emphasis added). Thus, “ar-
ranger” liability exclusively applies to parties who
5
“arranged for [a] ‘disposal or treatment.....” A & W
Smelter & Refiners, Inc. v. Clinton, 146 F.3d 1107,
1112 (9th Cir. 1998).
‘CERCLA borrows its definition of “disposal” and
“treatment” from “section 1004 of the Solid Waste
Disposal Act” (“SWDA”) (codified, as amended by the
Resource Conservation and Recovery Act of 1976
(“RCRA”), at 42 U.S.C. § 6903 (2006)).* 42 U.S.C.
§ 9601(29). That SWDA provision defines “disposal”
as “the discharge, deposit, injection, dumping, spill-
ing, leaking, or placing of any solid waste or hazard-
ous waste into or on any land ... so that [it] may
enter the environment or be emitted into the air or
discharged into any waters, including ground wa-
ters.” Id. §6903(3) (emphases added). Similarly,
“treatment” refers to “any method, technique, or
process .. . designed to change the physical, chemical,
or biological character or composition of any hazard-
ous waste so as to neutralize such waste or so as to
render such waste nonhazardous, safer for transport,
amenable for recovery, amenable for storage, or
reduced in volume.” Jd. § 6903(34) (emphasis added).
A “disposal” or “treatment” therefore occurs only
when a party engages in the disposal or treatment of
waste. Id. §§ 6903(3), (34), 9601(29); see Ian Erickson,
Comment, Reconciling the CERCLA Useful Product
and Recycling Defenses, 80 N.C. L. Rev. 605, 612
* Courts use the terms SWDA and RCRA interchangeably.
Courtaulds Aerospace, Inc. v. Huffman, 826 F. Supp. 345, 349
n.4(E.D. Cal. 1993)
6
(2002) (“CERCLA’s definition of ‘disposal[]’ [is]
incorporated from the RCRA... |which]| requires the
disposal of a ‘waste’. . . .”).
The Second, Fourth, Sixth, and Seventh Circuits,
as well as the Ninth Circuit in other cases, have all
held that the “disposal or treatment” requirement for
“arranger” liability may only be satisfied by the
disposal or treatment of waste. See Cal. Dep’t of Toxic
Substances Control v. Alco Pac., Inc., 508 F.3d 930,
934 (9th Cir. 2007) (“A person may be held liable as
an ‘arranger’ ... only if the material in question
constitutes ‘waste’... .”); Freeman v. Glaxo Wellcome,
Inc., 189 F.3d 160, 164 (2d Cir. 1999) (“Because the
definition of ‘disposal’ refers to ‘waste,’ only transac-
tions that involve ‘waste’ constitute arrangements for
disposal within the meaning of CERCLA.”); Pneumo
Abex Corp., 142 F.3d at 774 (SWDA’s “definition of
‘treatment’ presupposes discard.... [A]s the legisla-
ture chose to use the SWDA definition of treatment
lin CERCLA] » d the presupposition inherent in the
definition, it is ..ot the role of this court to substitute
another definition.”); Amcast Indus. Corp. v. Detrex
Corp., 2 F.3d 746, 751 (7th Cir. 1993) (Posner, J.)
(“The words ‘arranged with a transporter for trans-
port for disposal or treatment’ appear to contemplate
a case in which a person or institution that wants to
get rid of its hazardous wastes hires a transportation
company to carry them to a disposal site.” (emphasis
added)); AM Int'l, Inc. v. Int'l Forging Equip. Corp.,
982 F.2d 989, 998 & n.9 (6th Cir. 1993) (““Disposal’
... 1s deemed to take place only at the point at which
7
there is a threat that hazardous wastes will be emit-
ted into the environment, air, soil, or groundwater.”
(emphasis added)).
2. A minority of district courts have erro-
neously held that parties who sell any
hazardous substance, even if the mate-
rial is not waste, can be liable as “ar-
rangers.” Their decisions contravene
CERCLA’s plain language and legisla-
tive history.
Notwithstanding the plain language of CERCLA
and the SWDA, a small minority of district courts
have held that those who sell hazardous substances
can be liable as “arrangers” even where those sub-
stances are not waste. These district courts incor-
rectly reason that section 107(aX(3) of CERCLA
applies to those who make arrangements involving
“hazardous substances,’” not necessarily waste.* United
States v. Farber, 1988 WL 25427, at *3-*5 (D.N.J. Mar.
* In this case, the Ninth Circuit did not expressly reject the
waste requirement, as did these earlier district court decisions.
Rather, as we explain below, the Ninth Circuit disregarded
CERCLA’s waste requirement by holding Shell liable as an
“arranger” for manufacturing and selling a new, useful product,
see Pet. App. 4a-5a, 44a-46a, 83a-87a, even though such a
product does not fit the statutory definition of waste. Aside from
its decision here, the Ninth Circuit has long recognized that only
parties who arrange for the disposal or treatment of waste, not
those who sell useful products, are subject to “arranger” liability.
Alco Pac., Inc., 508 F.3d at 934-37 (collecting Ninth Circuit
cases).
8
16, 1988) (quoting 42 U.S.C. § 9607(a)(3)); see also
United States v. Summit Equip. & Supplies, Inc., 805
F.Supp. 1422, 1431-32 (N.D. Ohio 1992); United
States v. Conservation Chem. Co., 619 F. Supp. 162,
237-41 (W.D. Mo. 1985), overruled on other grounds
by United States v. Ne. Pharm. & Chem. Co., 810 F.2d
726, 741 (8th Cir. 1986); cf. CP Holdings, Inc. v.
Goldberg-Zoino & Assocs., Inc., 769 F. Supp. 432, 436-
38 (D.N.H. 1991) (construing “disposal” requirement
for all PRPs “to include the disposal of all hazardous
substances” and not only waste).
These district courts’ interpretation of CERCLA’s
“disposal or treatment” requirement flouts a cardinal
rule of statutory construction. Courts “must give
effect, if possible, to every word of |a] statute.” Bow-
sher v. Merck & Co., 460 U.S. 824, 833 (1983). Under
section 107(a)3), “arranger” liability attaches only to
those who arrange for a “disposal” or “treatment,” 42
U.S.C. § 9607(a\(3), and CERCLA expressly defines
these terms with reference to the SWDA, id.
§ 6903(3), (34). “Congress could have defined ‘dis-
posal’ [and ‘treatment’] any way it chose; it chose to
import the meaning provided in [the] SWDA. That
“ Accord Cal. ex rel. State Dep't of Toxic Substances v.
Summer del Caribe, Inc., 821 F. Supp. 574, 579-80 (N.D. Cal.
1993); Cal. ex rel. Cal. Dep't of Toxic Substances Control v.
Verticare Inc., 1993 WL 245544, at *9 (N.D. Cal. Mar. 1, 1993).
These cases were both decided by California district courts
before the Ninth Circuit expressly announced that “arranger”
liability applies only where a party arranges for the disposal or
treatment of waste.
9
meaning is clear.” 3550 Stevens Creek Assocs. v.
Barclays Bank, 915 F.2d 1355, 1362 (9th Cir. 1990).
This Court should decline to give effect to the
phrase “hazardous substances” at the expense of the
teruns “disposal” and “treatment.” This Court can give
effect to all of the statute’s termus by holding that
parties are liable as arrangers under CERCLA only
where they arrange for the disposal or treatment of
waste containing hazardous substances. See Roger K.
Ferland & Marilyn D. Cage, Using RCRA to Interpret
CERCLA Liability: What is “Arranging for Disposal”?,
23 Ariz. St. L.J. 445, 477-79 (1991).
This approach complies with the “cardinal rule
that a statute is to be read as a whole, since the
meaning of statutory language, plain or not, depends
on context.” King v. St. Vincent’s Hosp., 502 U.S. 215,
221 (1991) (citation omitted). By construing section
107(aX3) consistently with C'RCLA’s provision
defining the terms “disposal” and “treatment,” 42
U.S.C. § 9601(29), this Court would simply recognize
that CERCLA as a whole generally deals with haz-
ardous substances only “at the point when they are
about to, or have become, wastes,” 3550 Stevens Creek
Assocs., 915 F.3d at 1362.
Some of the foregoing district courts also mistak-
enly maintain that CERCLA’s legislative history
supports the imposition of “arranger” liability on
parties who arranged for disposal or treatment re-
gardless whether the hazardous substance involved
constitutes waste. Summer del Caribe, inc., 821
10
F.Supp. at 579-80; see Verticare Inc., 1993 WL
245544, at *9-*10; Farber, 1988 WL 25427, at *4.
CERCLA’s legislative history, however, is widely
considered to be of little value in determining Con-
gress’s intent in enacting the statute. See United
States v. CDMG Realty Co., 96 F.3d 706, 713 n.2 (3d
Cir. 1996); see also Amoco Oil Co. v. Borden, Inc., 889
F.2d 664, 667 (5th Cir. 1989). That CERCLA’s legisla-
tive history does not offer clear guidance is unsurpris-
ing since “the bill that ultimately became [CERCLA]
was an eleventh-hour compromise hastily assembled”
and enacted “with only days remaining in a lame-
duck [Congressional] session.” Carson Harbor Vill.,
Ltd. v. Unocal Corp., 270 F.3d 863, 885 n.13 (9th Cir.
2001). CERCLA’s legislative history thus “furnishes
at best a sparse and unreliable guide to the statute’s
meaning.” Artesian Water Co. v. Gov't of New Castle
County, 851 F.2d 643, 648 (3d Cir. 1988).
Nonetheless, to the extent CERCLA’s legislative
history provides guidance, that history demonstrates
Congress meant to impose “arranger” liability only on
parties who arrange for the disposal or treatment of
waste. Congress enacted CERCLA “to fill gaps left” in
RCRA. Amoco Oil Co., 889 F.2d at 667. RCRA over-
hauled the SWDA by “establishing a prospective
scheme regulating the management and disposal of
hazardous wastes,” Gregory A. Robins, Note, Catellus
Development Corp. v. United States: A “Solid” Ap-
proach to CERCLA “Arranger” Liability, or a “Waste”
of Natural Resources’, 47 Hastings L.J. 189, 192
11
(1995), but RCRA “left inactive sites largely unmoni-
tored by the [Environmental Protection Agency]
unless they posed an imminent hazard,” Amoco Oil
Co., 889 F.2d at 667. Congress therefore enacted
CERCLA “to ‘establish a comprehensive response and
financing mechanism to abate and control the vast
problems associated with abandoned and inactive
hazardous waste disposal sites’... [and] to shift the
costs of cleanup” to those responsible for hazardous
waste contamination. Metro. Water Reclamation Dist.
v. N. Am. Galvanizing & Coatings, Inc., 473 F.3d 824,
827 (7th Cir. 2007) (quoting H.R. Rep. No. 96-1016(1),
at 22 (1980), reprinted in 1980 U.S.C.C.A.N. 6119,
6125); see Young v. United States, 394 F.3d 858, 862
(10th Cir. 2005); Covalt v. Carey Canada, Inc., 860
F.2d 1434, 1437 (7th Cir. 1988).°
* The House Report discussed in these cases addressed H.R.
7020. H.R. Rep. No. 96-1016(I1), at 1, reprinted in 1980
U.S.S.C.A.N. at 61119. Congress enacted CERCLA by passing “a
substitute bill ... as an amendment to H.R. 7020.” Exxon Corp.
v. Hunt, 475 U.S. 355, 365 n.8 (1986). The final bill itself “was
the product of [a] last-minute compromise between” H.R. 7020
and two competing Congressional bills, “and carries virtually no
direct legislative history.” United States v. Mottolo, 605 F. Supp.
898, 905 (D.N.H. 1985).
12
B. The Ninth Circuit erred in subjecting Shell
to “arranger” liability because parties who
manufacture and sell new, useful products
are not arranging for the disposal of
“waste” and thus cannot be held liable for
clean up costs under CERCLA.
1. The useful product doctrine distin-
guishes between wastes and useful
products and thereby protects those
who manufacture and sell new, useful
products from “arranger” liability.
CERCLA does not directly define which materials
qualify as “waste.” CERCLA, however, borrows its
definition of “hazardous waste” from the SWDA, 42
U.S.C. § 9601(29), thereby demonstrating that Con-
gress meant for courts applying CERCLA to rely on
the SWDA to determine when a substance is waste.
J
The SWDA defines waste in pertinent part as
“any garbage, refuse, sludge from a waste treatment
plant, water supply treatment plant, or air pollution
control facility and other discarded material... .” 42
* Congress’s intention to incorporate the SWDA’s definition
for waste into CERCLA is further confirmed by the fact that
CERCLA also borrows the definitions of “disposal” and “treat-
ment” from the SWDA and, as already discussed, the waste
requirement for “arranger” liability arises from those defini-
tions. See Alco Pac., Inc., 508 F.3d at 934; see also Jeffrey M.
Gaba, /nterpreting Section 107(a)(3) of CERCLA: When Has a
Person “Arranged for Disposal?”, 44 Sw. L.J. 1313, 1327 (1991).
13
U.S.C. § 6903(27).’ By thus defining waste as those
substances that have been cast aside because they
are deemed to be useless or worthless, see, e.g.,
United States v. Wedzeb Enters., Inc., 844 F. Supp.
1328, 1335-36 (S.D. Ind. 1994) (“‘glarbage’ is a
‘refuse of amy kind’” and “‘refuse’ is ‘the worthless or
useless part of something’”), the SWDA signals that
covered wastes are only those materials parties seek
to get rid wf because they are no longer useful or have
no value, see Douglas County, Neb. v. Gould, Inc., 871
F. Supp. 1242, 1245-47 (D. Neb. 1994) (disposal of
waste occurs where a party “merely getis!] rid of a
product which has no use” but not where a party sells
“a new useful product”); Wedzeb Enters., Inc., 844
F. Supp. at 1335-36 (“it is the worthlessness of an
object that makes it ‘refuse’ or ‘garbage’” under
CERCLA’s waste standard).
Accordingly, five federal appellate courts (includ-
ing the Ninth Circuit in earlier cases) have held that,
because “arranger” liability attaches only to parties
who arranged for the disposal or treatment of waste,
those who sell a useful product are not “arrangers.”
Freeman, 189 F.3d at 161-62, 164; A & W Smelter &
Refiners, Inc., 146 F.3d at 1112; Pneumo Abex Corp.,
142 F.3d at 774-76; Amcast Indus. Corp., 2 F.3d at
- The SWDA offers definitions for both “hazardous waste”
and “solid waste.” 42 U.S.C. § 6903(5), (27). Under the SWDA,
however, a “hazardous waste” is simply a subset of “solid waste.”
Id. § 690315).
14
751; AM Int'l, Inc., 982 F.2d at 999.° Courts refer to
this distinction between useful products and waste
“as the useful product doctrine.’” Alco Pac., Inc., 508
F.3d at 934.°
On occasion, courts disagree about the parame-
ters of the useful product doctrine. For example,
* Even federal appellate courts that have not expressly
decided whether “arranger” liability applies solely where there
is a disposal or .reatment of waste recognize that those who sell
useful products ure not arrangers. See Morton Int'l, Inc. v. A.E.
Staley Mfg. Co., 343 F.3d 669, 683-84 (3d Cir. 2003); Dayton
Indep. Sch. Dist. v. U.S. Mineral Prods. Co., 906 F.2d 1059, 1065
(5th Cir. 1990); Fla. Power & Light Co. v. Allis Chalmers Corp.,
893 F.2d 1313, 1317-18 (11th Cir. 1990); United States v. Aceto
Agric. Chems. Corp., 872 F.2d 1373, 1381 (8th Cir. 1989). As the
Fifth Circuit has explained, “there is no possible reasonable
interpretation of the term ‘disposal’ that could encompass the
commercial sale” of useful products. Dayton Indep. Sch. Dist.,
906 F.2d at 1065.
* Certain courts mistakenly refer to the useful product
doctrine as a defense. See, e.g., Gould Inc. v. A & M Battery &
Tire Serv., 933 F. Supp. 431, 436 (M.D. Pa. 1996). That charac-
terization is inaccurate because it implies a defendant bears the
burden of asserting and proving the useful product doctrine to
avoid “arranger” liability. In reality, the doctrine is simply a
shorthand method for invoking CERCLA’s waste requirement.
See Alco Pac., Inc., 508 F.3d at 934. Since “arranger” liability
does not exist unless the “material in question constitutes
‘waste,’” id., the party attempting to impose “arranger” liability
bears the burden of proving at the outset that the material at
issue constitutes waste, cf Tommy T. Henson II, What a Long,
Strange Trip It's Been: Broader Arranger Liability in the Ninth
Circuit and Rethinking the Useful Product Doctrine, 38 Envtl. L.
941, 955 (2008) (“The [useful product] doctrine is really a
principle to which the courts must adhere, rather than an
excuse to be asserted in defense of a claim.”).
15
courts disagree about whether materials must be sold
solely for use in conformance with their original
intended purpose before they can be considered a
useful product. See RSR Corp. v. Avanti Dev., Inc., 68
F. Supp. 2d 1037, 1044-45 (S.D. Ind. 1999) (“[T here is
some disagreement among the courts about what
constitutes usefulness. A few courts narrow the
application of the useful product defense only to those
products which may still be used for their originally-
intended purpose. . .. However, the majority of courts
refer to the useful product defense without reference
to original use. . . . [T]hese courts” examine whether a
transaction sought to discard a material “or to sell
valuable materials (not necessarily still fit for their
original use).”).
But despite these disagreements over the doc-
trine’s outer limits, courts agree that the sale of new
products for use in their original state unquestiona-
bly does not involve an arrangement for the disposal
of waste. See, e.g., Freeman, 189 F.3d at 164-65 (sale
of “virgin” chemicals for use in their unadulterated
form did not amount to an arrangement for the
disposal of waste); Dayton Indep. Sch. Dist., 906 F.2d
at 1061, 1064-66 (no “arranger” liability attaches for
merely manufacturing and selling new asbestos-
containing building materials for use by the construc-
tion industry); Douglas County, Neb., 871 F. Supp. at
1247 (“CERCLA liability will not attach if a transac-
tion involves the sale of a new useful product... .”);
see also Henson, supra, at 955 (no court has found the
manufacturer of a new product designed for use in its
i6
current state liable for contamination arising solely
from the disposal of the product by its purchaser).
These new products are “almost inevitably useful
products” by nature, Henson, supra, at 949-50, be-
cause they are created for a specific purpose and thus
derive value from and may be used in their present
form, id. at 955."
The useful product doctrine plays a critical role
when parties seek to recover clean up costs from
alleged “arrangers” because CERCLA’s “disposal”
requirement calls for a three-part inquiry. The
threshold question for whether a “disposal” occurred
is whether the material at issue is waste rather than
a useful product. See Alco Pac., Inc., 508 F.3d at 934
(a party cannot be liable as an “arranger” unless the
material at issue is waste); A & W Smelter & Refin-
ers, Inc., 146 F.3d at 1112 (same); see also Erickson,
supra, at 612 (“[W]hether a defendant transferred a
‘waste’ is an important first step in determining
whether a defendant made an arrangement for ‘dis-
posal.’” (emphasis added)). Therefore, unless the
material at issue is waste, the second inquiry —
whether the activity involving that waste falls within
the SWDA’s statutory definition of “disposal” — is
For these reasons - and because manufacturers of these
new products “plac(e) a beneficial material into the market” -
even commentators who contend the waste requirement should
be eliminated from the CERCLA analysis recognize that CER-
CLA liability should not apply to the manufacturer and seller of
a new product manufactured for use in its original state.
Henson, supra, at 949-50, 967-71.
17
irrelevant. See 42 U.S.C. § 6903(3) (defining “dis-
posal” exclusrvely as certain activities involving “solid
waste or hazardous waste”); see also Otay Land Co. v.
UE. Lid., L.P., 440 F. Supp. 2d 1152, 1175 (S.D. Cal.
2006) (“(T]here are at least two components to a
CERCLA ‘disposal.’ [First], the hazardows substance
must be waste.”)."’
' The third inquiry mandated by CERCLA’s “disposal”
requirement is whether the party intended to arrange for the
dispamal of waste. See United States v. Cello-Fotl Prods., Inc.,
100 F.3d 1227, 1231-32 (6th Cir. 1996) (CERCLA plain lan-
guage requires an intent to arrange for a dispesal); Ameeast
Indus. Corp., 2 F.3d at 751 (same). This “intent” inquiry cap
overlap with the “waste” inquiry where a particular material's
character as waste or a useful product is unclear (for example.
where a party sells used products for reprocessing or salvage). In
such cases, courts often examine a party’s intent to determime if
the party sold the material to discard it or, conversely, because
the material was useful and valuable. Pneumo Abex Corp., 142
F.3d at 774-75. Examining a seller’s intent to determine whether
the substance is waste typically also determines whether the
seller intended to arramge for a disposal. Amicus notes, however,
that this Court need not reach the intent question because it can
reverse based solely on the fact that Shell’s new, useful product
cannot be considered waste. A & W Smelter & Refiners, Inc., 146
F.3d at 1112 (useful product is not waste); see also Henson,
supra, at 949-50, 955 (new products manufactured for use in
their origina! form are inherently useful and valuable).
}
18
2. The Ninth Circuit’s overly expansive “ar-
ranger” liability standard in this case
disregards CERCLA’s waste requirement.
In this case, the Ninth Circuit disregarded CER-
CLA’s waste requirement by subjecting Shell to
arranger liability for manufacturing and selling a
new, useful product. The court held Shell liable as an
“arranger” here where Shell manufactured an ayri-
cultural soil fumigant designed to protect crops and
then sold this new product to Brown & Bryant, Inc.
(B & B), so that B & B could either sell the product to
local farmers or apply the fumigant to farmland for
them. See Pet. App. 4a-5a, 44a-46a, 83a-87a. The
Ninth Circuit so held even though the district court
expressly found Shell’s fumigant was not waste and
despite the fact that the Ninth Circuit agreed the
fumigant was a useful product. Pet. App. 45a-46a,
85a-86a.
A majority of the Ninth Circuit panel held Shell
liable as an “arranger” on the theory that B & B
employees leaked small amounts of the fumigant at B
& B’s facility while transferring it from common
carrier trucks that Shell hired to deliver the new
fumigant. See Pet. App. 5a-6a, 86a-87a, 116a-119a,
255a-257a. The majority’s decision reasoned that
“arranger” liability should apply because the SWDA
defines “disposal” to include “leaking” and, according
to the majority, Shell’s sale of its useful product
“necessarily and immediately result{ed] in the leak-
age” of the product. Pet. App. 44a-46a; see Pet. App.
85a. The Ninth Circuit thus implied that Shell's new,
19
useful product became waste simply by virtue of
being inadvertently leaked before it could be used for
its original intended purpose.’ See Pet. App. 5a-6a,
45a-46a.
In so holding, the Ninth Circuit effectively disre-
garded CERCLA’s waste inquiry. The Ninth Circuit’s
flawed analysis ignores the plain language of the
SWDA’s definition of “disposal,” which, as we ex-
plained earlier, first requires a court to examine
whether the substance at issue is waste and only then
asks whether the activity involving the vaste quali-
fies as a “disposal.” See 42 U.S.C. § 6903(3).
This Court should decline to endorse the Ninth
Circuit’s flawed and overly expansive test for “ar-
ranger” liability. As Judge Posner has explained,
nothing in CERCLA compels the extraordinary con-
clusion that those who sell and ship useful products
should be held strictly liable as arrangers when
mishaps involving their products occur as a result of
another party’s actions. Amcast Indus. Corp., 2 F.3d
at 747-48, 751. Simply stated, “Congress did not
intend CERCLA to target legitimate manufacturers
or sellers of useful products.” Dayton Indep. Sch.
Dist., 906 F.2d at 1065.
* The Ninth Circuit maintained that Shell “knew that some
leakage was likely” during the transfer process, Pet. App. 5a,
46a, but nothing in the court’s opinion indicates Shell, the
common carrier, or B & B actually meant for the fumigant to
leak before it could be used.
20
The Ninth Circuit’s evident approach of deter-
mining a new product’s usefulness, and hence its
character as waste, with reference to mishaps that
might occur would gut the distinction between waste
and useful products and would potentially expose all
manufacturers and sellers of new products containing
hazardous substances to CERCLA “arranger” liabil-
ity. Common sense dictates that there is always some
chance — given the potential for human error — that a
new product may leak or spill. But since Congress
chose to impose “arranger” liability exclusively on
those who arrange for the disposal or treatment of
waste, this Court should decline to hold manufactur-
ers of new, useful products liable for cleaning up
another’s property solely because small amounts of
those products were inadvertently leaked or spilled
on the property before they could be used. As Judge
Bea pointed out when he — joined by seven other
circuit judges — dissented from the Ninth Circuit’s
denial of rehearing en banc here, the Ninth Circuit’s
“arranger” standard in this case “stretches the mean-
ing of arranger liability beyond any cognizable limit.”
See Pet. App. 52a, 71a."
‘A majority of the Ninth Circuit panel also applied an
expansive “arranger” standard because the majority thought
Shell enjoyed sufficient control over the transfer process to be
considered an “arranger.” See Pet. App. 47a-49a. This court need
not address whether ownership or control is necessary to
establish “arranger” liability and, if contro! suffices, what degree
of control must be shown. Questions of ownership and control
need not be resolved until the threshold questions concerning
(Continued on following page)
21
C. Expanding “arranger” liability to manufac-
turers who sell useful products will have
severe and far-reaching ramifications.
Left undisturbed, the negative consequences of
the Ninth Circuit’s adoption of a standard imposing
“arranger” liability on manufacturers for selling
useful products will be far-reaching. Innumerable
businesses manufacture and sell useful products
containing hazardous substances. In fact, many
common products contain these substances. Lemons
contain citric acid, a hazardous substance. A & W
Smelter & Refiners, Inc., 146 F.3d at 1110. Firearin
ammunition often contains lead, Otay Land Co., 440
F. Supp. 2d at 1160; see Kamb v. U.S. Coast Guard,
869 F. Supp. 793, 795, 798 (N.D. Cal. 1994), as do
automobiles (the lead is located in the battery), G.J.
Leasing Co. v. Union Elec. Co., 54 F.3d 379, 384 (7th
Cir. 1995). “Lead in any amount is a hazardous
substance.” Otay Land Co., 440 F. Supp. 2d at 1160.
Hundreds of thousands of buildings th:oughout the
United States, if not more, were built with asbestos-
containing materials, yet another hazardous sub-
stance. G.J. Leasing Co., 54 F.3d at 384; see Dayton
Indep. Sch. Dist., 906 F.3d at 1061, 1065.
Moreover, it is commonly understood that many
business operations require products containing
the material’s character and the intent of the alleged PRP are
addressed. Ownership and control tell a court nothing about
whether the material at issue in a case is, by its nature, a waste
or useful product.
22
hazardous substances. Dry cleaners, for example,
regularly use a solvent that is a hazardous substance
to help them clean clothes. See United States v. Lyon,
2007 WL 4374167, at *1 (E.D. Cal. Dec. 14, 2007);
Differential Dev.-1994, Ltd. v. Harkrider Distrib. Co.,
470 F. Supp. 2d 727, 730-31 (S.D. Tex. 2007). Poultry
farms raise chickens, turkeys, and other poultry for
sale to consumers as food with the aid of litter that
contains a hazardous substance. See City of Tulsa v.
Tyson Foods, Inc., 258 F.Supp. 2d 1263, 1271-73,
1283-85 (N.D. Okla. 2003) (vacated following settle-
ment).
Indeed, it cannot be gainsaid that hazardous
substances are pervasive throughout our society.
Absent the distinction between wastes and useful
products, those who have manufactured and sold
automobiles, ammunition, building materials, and
dry cleaning solvent, to name a few examples, could
be liable as “arrangers” under CERCLA. See G.J.
Leasing Co., 54 F.3d at 384 (absent this distinction,
anyone who sells an automobile could be liable as an
arranger); Dayton Indep. Sch. Dist., 906 F.2d at 1065
(refusing to impose “arranger” liability on those who
sold new asbestos-containing building materials
precisely because they were “new useful and market-
able product|s|”); Lyon, 2007 WL 4374167, at *1-*2,
*4-*5 (applying the Ninth Circuit’s decision here to
indicate circumstances may exist where a manufac-
turer can be held liable as an “arranger” for selling
newly-manufactured solvent used in dry cleaning
operations); cf. Kamb, 869 F. Supp. at 798-99 (holding
23
the federal government and the State of California,
among others, liable as “arrangers” because their
personne] discharged firearms containing lead bullets
at a shooting range). As these examples confirin,
eliminating the distinction between waste and useful
products would lead to “preposterous results.” G.2J.
Leasing Co., 54 F.3d at 384 (Posner, J.).
The financial consequences of exposing countless
businesses to “arranger” liability for manufacturing
and selling useful products would be staggering. The
Environmental Protection Agency (“EPA”) estimates
that, on average, 294,000 hazardous waste sites “will
need to be cleaned up” at a total cost of $209 billion
over the next 30 to 35 years, and reports that most of
these costs will be borne by PRPs. U.S. EPA, Cleaning
Up the Nation’s Waste Sites: Markets and Technology
Trends, at viii (Sept. 2004), available at http://www.
clu-in.org/download/market/2004market.pdf (“EPA Re-
port”). Some commentators estimate that the average
cost to clean up a hazardous waste site ranges “be-
tween $25 million and $50 million.” Michael L. Itali-
ano et al., Environmental Due Diligence During
Mergers and Acquisitions, 10 Nat. Resources & Env’t
17, 17 (1996). The cost to clean up some sites may run
far higher. See, e.g., Press Release, U.S. Dep’t of
Justice, W.R. Grace to Pay for Cleanup of Asbestos
Contamination in Libby, Montana (Mar. 11, 2008),
available at http://www.usdoj.gov/opa/pr/2008/March/
08_enrd_194.html (announcing supplier of chemicals
would pay $250 million for clean up costs at a site in
Montana); Cindy Skrzycki, GE Ads Zap the EPA Over
24
PCB Cleanup, Wash. Post, July 24, 2001, at El (cost
to clean up the Hudson River estimated to be $460
million); see also Michael Carter, Successor Liability
Under CERCLA: It’s Time to Fully Embrace State
Law, 156 U. Pa. L. Rev. 767, 774 (2008) (“the average
cost of remedial action” at larger sites is $140 mil-
lion).
Given the crushing cost of CERCLA clean up
liability, determining “[wlho bears the burden for
hazardous waste cleanup costs is an issue of great
consequence.” Centerior Serv. Co. v. ACME Scrap &
Iron Metal Corp., 153 F.3d 344, 349 n.9 (6th Cir.
1998), abrogated on other grounds as recognized by
ITT Indus., Inc. v. BorgWarner, Inc., 506 F.3d 452,
457-58 (6th Cir. 2007). Placing that immense burden
on those who manufacture and sell useful products
would result in a significant, detrimental and unin-
tended impact on our nation’s economy.
‘* In this case, the Ninth Circuit expressed concern over the
possibility that ordinary taxpayers will unfairly bear the burden
of clean up costs. See Pet. App. 26a. The court’s fear is mis-
placed. The EPA reports that PRPs will pay for most clean up
costs. See EPA Report, supra, at viii. Moreover, it is not the
taxpayers per se who fund clean ups when solvent PRPs cannot
be located. Rather, Congress’s 1986 amendments to CERCLA
create a Superfund that funds clean up activities. See 26 U.S.C.
§ 9507 (2007); 42 U.S.C. §§ 9604-9605. This Superfund is
financed by a combination of appropriations, industry taxes, and
judgments obtained in legal actions to recover response costs.
See 26 U.S.C. § 9507(b).
25
According to the Census Bureau, there are
288,568 manufacturing firms in this country. U.S.
Census Bureau, 2005 Statistics of U.S. Businesses —
U.S., sectors, http://www2.census.gov/csd/susb/2005/
usirg05.xls (last visited Nov. 19, 2008). The National
Institute of Standards and Technology (NIST) pro-
vides a higher estimate, maintaining that small to
mid-size manufacturers number more than 350,000,
me’e up about 99 percent of our nation’s manufac-
turers, “account for more than half of the total value
of U.S. production[,] and employ nearly 12 million
people.” NIST, Hollings Manufacturing Extension
Partnership, http://www.nist.gov/public_affairs/guide/
mep.htm (last visited Nov. 19, 2008)."° As these statis-
tics underscore, manufacturers “are a cornerstone of
the American economy.” U.S. Dep’t of Commerce,
Manufacturing in America: A Comprehensive Strat-
egy to Address the Challenge to U.S. Manufacturers,
at 7 (Jan. 2004), available at http://www.commerce.gov/
opa/press/Secretary_Evans/2004_Releases/Manufacturing
%20Report/DOC_MFG_Report_Complete.pdf. The Ninth
Circuit’s decision in this case threatens to sweep these
manufacturers “into the web of arranger liability.”
Henson, supra, at 954. The Ninth Circuit’s overly
broad “arranger” liability standard is thus “beyond
* NIST is the federal agency within the United States
Department of Commerce whose “mission is to promote U.S.
innovation and industrial competitiveness. ...” NIST, General
Information, http://www.nist.gov/public_affairs/general2.htm (last
visited Nov. 19, 2008).
26
the reasonable bounds of CERCLA and discourages
the sale of useful products. . . .” Jd. at 955.
+
CONCLUSION
The Ninth Circuit’s excessively expansive “ar-
ranger” liability standard exposes manufacturers to
the enormous costs of CERCLA liability for doing
nothing more than making and selling new, useful
products. Amicus urges this Court to reverse the
Ninth Circuit’s decision and acknowledge what the
governing statutory language makes plain: manufac-
turers cannot be held liable as “arrangers” under
CERCLA for selling new, useful products.
November 21, 2008 Respectfully submitted,
Horvitz & LEvy LLP
Mary-CHRISTINE SUNGAILA
JEREMY B. ROSEN
BRADLEY S. PAULEY
FELIX SHAFIR*
*Counsel of Record
15760 Ventura Boulevard,
18th Floor
Encino, California 91436-3000
(818) 995-0800
Attorneys for Amicus Curiae
International Association
of Defense Counsel
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.