Petition for Writ of Certiorari — American Cyanamid Co. v. O'Neil

Supreme Court brief1990

Ask Donna

What actually matters in this document.

Text

| | Supreme Court, U.S,

89-8 48 FILED

No. NOV 20 3889

ni sen i

IN THE —

Supreme Court of the United States

OCTOBER TERM, 1989

AMERICAN CYANAMID COMPANY

and

ROHM & HAAS COMPANY,

Petitioners,

Vv.

JAMES E. O’NEIL, in his capacity as Attorney General

for the State of Rhode Island,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

Of Counsel:

ELLEN FRIEDELL

Senior Counsel

ROHM & HAAS COMPANY

Independence Mall West

Philadelphia, Pennsylvania 19105

(215) 592-2582

MARGARET R. TRIBBLE

Legal Department

AMERICAN CYANAMID COMPANY

One Cyanamid Plaza

Wayne, New Jersey 07470

(201) 831-3641

E. BARRETT PRETTYMAN, JR.*

DAVID F. GRADY

Scott H. REISCH

HOGAN & HARTSON

555 Thirteenth Street, N.W.

Washington, D.C. 20004

(202) 637-5685

DEMING E. SHERMAN

MARK A. POGUE

EDWARDS & ANGELL

2700 Hospital Trust Tower

Providence, Rhode Island 02903

(401) 274-9200

Counsel for Petitioners

* Counsel of Record

WILSON - Eres PRINTING Co., INC. - 789-0086 - WASHINGTON, D.C. 20001

QUESTIONS PRESENTED

1. May a court hold de minimis parties jointly and

severally liable under the Superfund law for all out-

standing response costs, contrary to the intent of Con-

gress and the law expressed in other circuits, especially

where the injury was divisible and subject to apportion-

ment?

2. May the burden of proof be shifted to defendants

in a Superfund case, given that the statute does not pro-

vide for such a shift, particularly where the Government

has key facts peculiarly within its control?

3. Did the court below err in adopting a per se rule,

applicable to this and all other Superfund cases, that

groundwater contamination is an indivisible harm war-

ranting the imposition of joint and several liability upon

those found to have contributed to the contamination?

4. Does it violate the Ex Post Facto and Due Process

Clauses of the United States Constitution to impose Su-

perfund liability—and in particular, pre-enactment costs

—retroactively?

(i)

PARTIES TO THE PROCEEDINGS

Petitioners and defendants-appellants below are Amer-

ican Cyanamid Company and Rohm & Haas Company. A

listing of petitioners’ respective corporate subsidiaries and

affiliates is set forth in the appendix hereto at 77a-79a,

pursuant to Supreme Court Rule 28.1. Respondent and

plaintiff-appellee below is James E. O’Neil, in his capac-

ity as Attorney General for the State of Rhode Island.

TABLE OF CONTENTS

QUESTIONS PRESENTED ......0... ...........c.cccceeeecseeees

PARTIES TO THE PROCEEDINGS

TABLE OF AUTHORITIES ............000.0.0............ seinen

OPINIONS BELOW ................. ssssiaalinnnidiaiiainaneinsitnesiinnninnsiaanisan

Tar ciatnnsinisrmsanenssbesinbeasennadenannianssaeneen

PERTINENT STATUTORY AND

CONSTITUTIONAL PROVISIONS 000000... ee

STATEMENT OF THE CASE ......

REASONS FOR GRANTING THE WRIT ...............

Il.

ITT.

IV.

The Questions Raised by the Decision Below

Are Important and Recurring Problems Under

emma

The Decision Below Improperly Imposes Joint

and Several Liability on De Minimis Parties, in

Conflict with Congressional Intent and Case

ELI AE

The Decision Below Improperly Held that Peti-

tioners Have the Burden of Showing Apportion-

ability, and that Groundwater Contamination Is

Not Apportionable ............ en. pameananaaohin

The Decision Below Impermissibly Applied

CERCLA Retroactively in Violation of the Ex

Post Facto and Due Process Clauses, and

Impermissibly Allowed the Recovery of Pre

Enactment Costs by the State . _.... Hike on ai

TABLE OF CONTENTS—Continued

APPENDICES

Appendix A:

Appendix B:

Appendix C:

Appendix D:

Appendix E:

Appendix F:

Opinion of Court of Appeals

Opinion of District Court

Judgment of Court of Appeals

Stipulation filed May 15, 1987

Statutory and Constitutional Ad-

dendum

Statement Pursuant to Supreme

Court Rule 28.1

TABLE OF AUTHORITIES

CASES Page

American Cyanamid Co., et al. v. King Industries

et al., C.A. No. 87-0110 (D.R.I. 1988)... 6

Campbell v. United States, 365 U.S. 85 (1961) ...... 21

Cannon Vv. University of Chicago, 441 U.S. 677

SE UEEITTIED cuibchobidccsediaatcenctbpbecebiediteilsalisisetanietandlihaheti idole 26

Cummings V. Missouri, 71 U.S. (4 Wall.) 277

IRAE SOR EE clare Nek MOS eee ker a Rees nae CAE RNR 23, 24

Ex Parte Garland, 71 U.S. (4 Wall.) 333 (1867). 24

Greene V. United States, 376 U.S. 149 (1964)... 25

Hicks Vv. Feiock, 108 S. Ct. 1423 (1988) 2.000000... 24

Idaho V. Bunker Hill Co., 635 F. Supp. 665 (D.

IE STI sie schciciesinsich shea eceleddibahensiemitaggiii ie bdatiininaiinas 16

In the Matter of: Central Print and Body Shop,

Inc., USEPA Dkt. No. VIII-85-02; RCRA Ap-

peal No. 86-3; 1987 RCRA LEXIS 23 (Jan. 12,

| FEN 2 or oe dog RRP eee BEN nl 21

New York v. Shore Realty Corp., 21 E.R.C. 1430

5 5 np REE SS nb ee ee 16

Old Ben Coal Corp. Vv. Interior Board of Mine Op-

erations Appeals, 523 F.2d 25 (7th Cir. 1975)... 21

Pension Benefit Guaranty Corp. v. Gray & Co., 467

NGI ixenscint ica cleadcdsindiedeeeaiaaniidmaninen 24

Reynolds v. McArthur, 27 U.S. (2 Pet.) 417

SS BE RE EO a ee OMe. Be CIE 25

Russello v. United States, 464 U.S. 16 (1988) — 20

Society for the Propagation of the Gospel v.

Wheeler, 22 F. Cas. 756 (C.C.D.N.H. 1814) ...... 23

Union Pacific R.R. Co. v. Laramie Stock Yards

eR RE ee ere 25

United States v. A & F Materials Co., Inc., 578

Aa OR OR OR creer 15, 16

United States v. American Cyanamid Co. and

Rohm & Haas Co., C.A. No. 89-0565 (D.R.L.,

i RRR eee 12

United States v. Bliss, 667 F. Supp. 1298 (E.D.

RRR ECE oD NLT 16

United State v. Cannons Engineering Corp., C.A.

No. 88-1786 WF (D. Mass. Aug. 14, 1989)........ 12

TABLE OF AUTHORITIES—Continued

Page

United States v. Chem-Dyne Corp., 572 F. Supp.

8 Re a 13, 16

United States v. Conservation Chemical Co., 589

GQ 13

United States v. Conservation Chemical Co., 619

F. Supp. 162 (W.D. Mo. 1985).................. 15

United States v. Halper, 109 S. Ct. 1892 (1989) . 24

United States v. Hardage, 26 E.R.C. 1049 (W.D.

| ee - 16

United States v. Miami Drum Services, ‘Ine., 25

ATS FSS. 0 ee 15, 16

United States v. Monsanto Co., 858 F.2d 160 (4th

Cir. 1988), cert. denied, 109 S. Ct. 3156 (1989). 15

United States Vv. Mottolo, 695 F. Supp. 615 (D.N.H.

1988) siniamsaniecaneicniieaiialiae tain cae 11

United States Vv. Northeastern Pharmaceutical &

Chemical Co., Ine. (NEPACCO), 810 F.2d 726

(8th Cir. 1986), cert. denied, 484 U.S. 1008

TSI cisicetisideibsicnatastaniiieicitiaiethatiaaihaaieibictbainaiiabidend inte nons 26

United States v. Ottati & Goss, Inc., 24 E.R.C. 1152

REESE: CEP ence we ee 19

United States v. Ottati & Goss, Inc., 694 F. Supp.

2 | : & ere 19

United States v. Shell Oil Co.., 605 F. Supp. 1064

ee 26

United States v. Stringfellow, 20 E.R.C. 1905

(C.D, Cal, 1984)... 16

United States v. Wade, 20 E. R. Cc. 1849 (E. D. Pa.

1984) .. NE ee ee er | 26, 27

United States v. Wade, 577 F. Supp. 1826 (E.D.

Te A ACN eee 138, 15

Usery V. Turner Elkhorn Mining Co., 428 US. 1

CONSTITUTIONAL PROVISIONS, STATUTES

AND REGULATIONS

United States Constitution, art. I, § 9, cl. (3) 23

United States Constitution, amend. V 23

United States Constitution, amend. XIV 23

vii

TABLE OF AUTHORITIES—Continued

Page

Superfund Amendment and Reauthorization Act

of 1986, Pub. L. No. 99-499, 100 Stat. 1613

ES Se ae cae a 14

Resource Conservation and Recovery Act

‘we ' gs SE ORF TR Tae neeee 20

I le sete Loses 2

RR ae aR 2

42 U.S.C. § 9607 (a). Recsgiieumiidiansanienianaids 2

TE TE Ta.

42 U.S.C. § 9607(f) ........ eine italia naa Race 26

42 U.S.C. § 9613.......... iio slid jnsaidiniiiaiaataniilll 2, 8, 9, 10

Tee 2

TT CAE eS eee 17

TT RC CEE ONS. =e 17

42 U.S.C. § 9622(¢) iidsaenaodaiinteldietaas aE a Rea 8,17

42 U.S.C. § 9652 (a) ............. aididaneteninabbiadts 25

54 Fed. Reg. 41015 (October 4, 1989) . sajuiatioedaaaan 10

a ieenennbaseentain 10

CONGRESSIONAL MATERIAL

126 Cong. Rec. 24341 (1980)... cccnnnnnn. 13

126 Cong. Rec. 30932 (1980) .. ahi 13

Insurance Issues and Superfund, Hearing Before

the Committee on Environment and Public

Works, 99th Cong., Ist Sess. 18 (1985) ........... 15

Superfund Improvement Act of 1985: Hearings

on 8.51 Before the Committee on the Judiciary,

99th Cong., Ist Sess. 71 (1985)... 15

REPORTS

GAO, “Superfund: Extent of the Nation's Poten-

tial Hazardous Waste Problem Still Unknown,”

Report No. GAO/RCED-&8-44 (Dec. 1987)... 9

OTA, “Coming Clean: Superfund Problems Can

Be Solved .. .” (October 1989) —..........---00nn.... 10

OTHER AUTHORITY

J. Wigmore, 9 Evidence § 2486 (3d ed. 1940)... 21

Restatement (Second) of Torts § 433A (1965)... 19

viii

TABLE OF AUTHORITIES—Continued

Page

Restatement (Second) of Torts § 433B (1965) 17

Restatement (Second) of Torts § 881 (1965) 19

W. Keeton, D. Dobbs, R. Keeton & D. Owen,

Prosser and Keeton on Torts §52 (5th ed.

1984) : ‘ — 19

IN THE

Supreme Court of the United States

OCTOBER TERM, 1989

No.

AMERICAN CYANAMID COMPANY

and

RouM & HAAS COMPANY,

Petitioners,

Vv.

JAMES E, O’NEIL, in his capacity as Attorney General

for the State of Rhode Island,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

Petitioners American Cyanamid Company and Rohm

& Haas Company respectfully pray that a writ of cer-

tiorari issue to review the judgment and opinion of the

United States Court of Appeals for the First Circuit.

entered in the above-entitled proceeding on August 21,

1989.

OPINIONS BELOW

The opinion of the Court of Appeals for the First Cir-

cuit is reported at 883 F.2d 176, and reprinted in the

appendix hereto (“App.”") at la-l5a.

_The opinion of the District Court for the District of

Rhode Island (Pettine, J.) is reported at 682 F. Supp.

706, and is reprinted at App. 16a-67a.

JURISDICTION

Respondent brought suit in the District Court of Rhode

Island, invoking the jurisdictional provisions in the Com-

prehensive Environmental Response, Compensation and

Liability Act (“CERCLA”), 42 U.S.C. § 9613, commonly

referred to as the Superfund law.

Petitioners timely appealed from the District Court’s

March 8, 1988 decision pursuant to 28 U.S.C. § 1291, and

the Court of Appeals affirmed on August 21, 1989. App.

la-15a.

The jurisdiction of this Court to review the judgment

of the First Circuit is invoked under 28 U.S.C. § 1254(1).

PERTINENT STATUTORY AND

CONSTITUTIONAL PROVISIONS

Sections 107(a) & (b) and 113(f) of CERCLA, 42

U.S.C. §§ 9607(a) & (b), 9613(f), are relevant. to this

case. The pertinent texts of these provisions, as well as

the Ex Post Facto and Due Process Clauses of the United

States Constitution, are set forth at App. 72a-78a.

STATEMENT OF THE CASE

The Picillo family owned property in Coventry, Rhode

Island that was once used as a pig farm. In July of

1977, the Picillos entered into a contract with three mem-

bers of the Capuano family whereby the Picillos illegally

accepted hazardous wastes for burial on their property

at a price of $1 per barrel. The property thus became a

classic “midnight dump” site. Under this agreement, a

total of 20,000 to 25,000 55-gallon drums of waste plus

the contents of 18 tank trucks were disposed of in pits or

trenches on the property during the summer of 1977.

No records of the waste haulers using the site were

kept. However, one transporter, SCP, hauled at least

6800 drums to the site from New Jersey. As was stipu-

lated below (App. 69a-7la), none of the wastes trans-

ported to the site by SCP originated at the facilities of

petitioners, Rohm & Haas Company and American Cyan-

amid Company. The illegal dumping ended in September

of 1977 pursuant to an order of the State Fire Marshal,

following a blaze in one of the disposal trenches.

Petitioners are chemical manufacturers, and operate

research facilities in the northeastern United States.

During 1977, petitioners followed careful procedures for

the proper disposition of wastes generated at their facili-

ties. They used only licensed transporters and instructed

them to send materials only to permitted landfill facilities

(none of which was in Rhode Island) specified in the

hauling contracts. Indeed, the District Court found that

Rohm & Haas “took every precaution in the disposal of

its waste,” App. 44a, and that American Cyanamid was

diligent in packaging and labelling its wastes and in

selecting transporters to carry them away. App. 49a.

Neither Rohm & Haas nor American Cyanamid con-

signed any waste materials from their research facilities

to the Picillo property for disposal, either directly or in-

directly. Neither had any idea that its waste was being

illegally diverted from its intended destination. Both

companies first learned that wastes from their research

facilities had been disposed of at the Picillo property when

those materials were discovered during the cleanup of

the site.

That cleanup began in June of 1979 under the direc-

tion of the State of Rhode Island, and occurred in four

phases. Phase 0 consisted of initial cleanup activities;

Phase I addressed remediation of a trench in the north-

eastern part of the property in 1980; Phase II focused on

the northwest trench in 1981; and Phase III involved the

west and south trenches in 1982. The State spent a total

of $1,613,427.30 in connection with the remediation

activities.’

When the Picillo site closed, approximately 3,000 empty

drums were stockpiled there, apparently for recycling.

During the course of the cleanup, the State and EPA

contractors discovered and removed a total of anproxi-

mately 10,300 buried drums. Other than to determine

whether the liquid wastes in some drums were compatable

for mixing, the State performed no chemical analysis of

the substances removed during the cleanup, so that the

toxicity, if any, of the wastes excavated is unknown.”

Recordkeeping during the State’s cleanup activity was

either non-existent or deficient. For example, no records

were kept as to the markings, if any, on the 3,000 empty

1 The United States Environmental Protection Agency (“EPA”)

became involved in the cleanup of the site during Phases II and III,

and also expended funds in connection with those two phases of the

remediation effort. EPA is not a party to this litigation, but

recently has filed a separate action against petitioners. See page

12, infra.

2 The State’s cleanup effort at the site was marred by numerous

mishaps, particularly in Phase I. For example, the Phase I con-

tractor, Jet-Line, failed to use barrel grapplers to remove drums,

and instead relied on primitive techniques such as backhoes, earth

moving equipment, and dragging drums from the pits with metal

chains. This approach to cleanup, which the State acknowledged

was “crude,” “not a state-of-the-art type of operation,” and a

“major deficiency,” resulted in many drums being crushed or punc-

tured during removal, so that their contents were spilled onto the

ground. This problem may have been exacerbated by Jet-Line’s

contract, which called for payment on a per-drum basis, so that the

contractor had an incentive to remove drums quickly rather. than

prudently. The state of affairs caused by Jet-Line’s activities be-

came so bad that an EPA contractor labelled the cleanup method-

ology for Phase I as extremely unsafe and potentially hazardous.

See generally Stenographic Transcript of Trial (“Trial Tran-

script”), O’Neil v. Picillo, C.A. No. 83-0787P (D.R.I.) at 87-89,

101-102 (testimony of John Leo).

eae eateries

drums found at the site. Similarly, the State failed to

keep any records regarding which waste generators’

drums were discovered during Phase I. A State employee,

John Leo, grew concerned that the failure to keep records

meant that the government was literally throwing away

evidence against potential waste generators. Leo there-

fore began to record certain information from labels or

other markings on containers excavated ¢ uring Phases

II and III. This attempt at recordkeeping, however,

proved to be incomplete as well.

The State notified American Cyanamid in 1981 that

two or three drums that apparently had originated at

American Cyanamid facilities had been found. American

Cyanamid fully cooperated with the State following this

notification, and confirmed that the drums in question

probably originated at the company’s facilities. Alto-

gether, as the District Court concluded, a total of 10

drums from American Cyanamid were discovered at the

site. App. 49a.

In June of 1982, during Phase III of the cleanup, the

State advised Rohm & Haas that materials from one of

the company’s research laboratories had been uncovered

at the Picillo farm. The company promptly dispatched

two employees to the site for two weeks to assist the State

in identifying Rohm & Haas materials. Altogether, the

District Court concluded that 303 5-gallon pails and 49

55-gallon drums of the waste at the site, the equivalent

of 76 drums, were attributable to Rohm & Haas. App.

44a.

At its own expense of approximately $32,000, Rohm &

Haas arranged for the removal of all its materials un-

covered at the site and, literally as a favor to the State,

' even removed some materials generated by another com-

pany as well as materials of the State’s contractor. Trial

Transcript at 866-867 (testimony of Joseph I. Pawlikow-

ski). Throughout the investigation of the site, Rohm &

. ere.

Haas fully cooperated with the State, and Leo credited

the company with playing “a very important part” in

identifying wastes at the site. Jd. at 52-53 (testimony of

John Leo).

Thus, American Cyanamid’s and Rohm & Haas’ com-

bined contribution to the wastes found at the site

amounted to the equivalent of 86 55-gallon drums. As-

suming, conservatively, that a maximum of 20,000 55-

gallon drums were deposited at the site, petitioners’

combined percentage share of the site’s wastes amounted

to less than 0.5% of the total. American Cyanamid’s

share alone was only 0.05% of the total.

Invoking CERCLA, the State commenced litigation in

1983 against numerous defendants, including Rohm &

Haas and American Cyanamid. The litigation sought to

obtain reimbursement for funds already expended by the

State, and declaratory relief requiring the defendants to

pay for additional remediation activities at the site. The

defendants in this litigation constituted only some of the

generators whose waste was discovered. Ironically, while

companies such as American Cyanamid and Rohm & Haas

who cooperated with the State during its investigation

were sued, companies who were uncooperative were not

sued.* Petitioners sought to remedy this deficiency by

moving to add additional waste generators to the litiga-

tion as third-party defendants. The State, however, ob-

jected to this motion, and the District Court sustained

the objection. App. 60a.‘

3 The State’s dec sion not to sue one generator, M & T Chemicals,

Inc., is a case in point. When the State contacted M & T about

materials apparently from M & T which were found at the site,

M & T told the State, in the words of a state employee, “to go Jy

a kite.” See Trial Transcript at 461-467 (testimony of John Leo).

This uncooperative position was later rewarded when the State

opted not to sue M & T Chemicals.

* As a result, petitioners were compelled to file a separate lawsuit

against these additional generators. See American Cyanamid Co.,

et al. v. King Indus., et al., C.A. No. 87-0110 (D.R.I. 1988)

Prior to trial, the State settled with a number of the

defendants for approximately $2.3 million, plus an agree-

ment by them to undertake soil removal activities at the

site. EPA also participated in these settlements, the cash

proceeds of which were allocated between EPA and the

State on a 3-to-l basis. Several of the generators who

settled were not de minimis parties, but instead were

major customers of SCP who had a relatively large num-

ber of drums transported to the site. See App. 69a-71a.

In addition, the Capuanos, who masterminded use of the

property for illegal dumping, settled; they contributed

$2 million of the $2.3 million in payments.

Following these settlements, the State pursued litiga-

tion against five defendants for its claim of $1.6 million

in past response costs, plus interest—i.e., roughly the

same amount as the Capuanos paid. Yet all of these

remaining defendants, including petitioners, had only de

minimis connections with the site, in that the State’s

records attributed to them only a small handful of the

20,000 to 25,000 55-gallon drums disposed of.

Following trial, the District Court held Rohm & Haas,

American Cyanamid and a third defendant, Hydron

Laboratories, Inc., jointly and _ severally liable for

$991,937.30 in past state response costs, plus interest, as

well as all future response costs. App. 67a.° As noted

earlier, the court attributed 10 55-gallon drums to Ameri-

can Cyanamid and 49 drums and 303 5-gallon pails to

5 The trial court arrived at the $991,937.30 figure by reducing the

State’s original claim of $1,613,437.30 by $621,500, which repre-

sented the State’s portion of the cash settlements arrived at with

other defendants.

Hydron, which the District Court found liable for 21 drums

worth of waste materials, subsequently reached a settlement with

the State and EPA for $92,400. The District Court found the

other two defendants not liable because the State had failed to

show that their waste materials were hazardous within the meaning

of CERCLA.

g |

Rohm & Haas. But the court made no finding as to the

total volume of waste deposited at the site, and there-

fore did not address the issue of what fraction of the

wastes at the site were contributed by petitioners. In-

stead, the court imposed joint and several liability on

petitioners without deciding that question.*®

The Court of Appeals affirmed. Although it determined

that “Congress did not intend for joint and several lia-

bility to be imposed without exception” in CERCLA cases,

App. 10a, the court nevertheless upheld application of

the doctrine in this case. It reached this result by con-

cluding that petitioners had failed to meet their burden

of demonstrating the divisibility of the harm, and, “where

all of the contributing causes cannot fairly be traced,

Congress intended for those proven at least partially

culpable to bear the cost of the uncertainty.” App. 5a.

Hence, the court failed to address the small proportion of

the waste contributed by petitioners.

The First Circuit found that the potential harshness

of its decision was mitigated by two statutory provisions.

The court relied on the 1986 amendments to CERCLA,

which direct the government to offer early settlements to

de minimis parties. App. 5a (citing 42 U.S.C. § 9622

(g)). The court also relied on the fact that the same

amendments provide a statutory cause of action for

contribution, which allows companies found liable for

CERCLA cleanup costs in amounts disproportionate to

their actual contributions to the site to obtain relief from

other responsible parties. App. 6a (citing 42 U.S.C,

§ 9613).

With respect to future costs at the site, which involve

possible remediation of groundwater contamination, peti-

tioners contended that no finding of liability was appro-

®In reaching its decision, the District Court rejected, among

other things, petitioners’ claim that the retroactive application of

CERCLA violates the United States Constitution. App. 63a.

1 ee

priate, since there was no evidence that the groundwater

is—or ever will be—contaminated. The Court of Appeals

brushed this analysis aside, however, opining that “[wle

think it likely that the harm to the water will be indivis-

ible, and therefore, that [petitioners] could properly be

held jointly and severally liable for the costs of this

remedia' action.” App. 8a. Hence, the Court of Appeals

held petitioners liable for all such future response costs,

whatever they may turn out to be. /d.

Finally, the court summarily affirmed the District

Court’s previous rejection of petitioners’ other arguments,

including the challenge to the retroactive application of

CERCLA, which the Court of Appeals dispensed with in

a footnote. App. 14a n.12.

REASONS FOR GRANTING THE WRIT

I. The Questions Raised by the Decision Below Are Im-

portant and Recurring Problems Under CERCLA

The decision below is of extraordinary importance, com-

ing as it does in the middle of an explosion of Superfund

litigation. It raises the issue of the extremes to which the

government may go in seeking to impose liability under

CERCLA, since here parties with very minor connections

with the Picillo site have been saddled with major liabil-

ities.

The impact of the Court of Appeals’ decision to impose

joint and several liability even on de minimis parties is

not limited to the particular facts of this case, but ex-

tends to countless cases currently or prospectively pend-

ing in federal court. For it is virtually certain that

Superfund actions will account for increasingly large por-

tions of the federal courts’ dockets over the years to come:

the General Accounting Office has estimated that there

are over 425,000 potential Superfund sites around the

country."

7 See GAO, “Superfund: Extent of the Nation's Potential Haz-

ardous Waste Problem Stil] Unknown,” Report No. GAO/RCED-

The stakes in each Superfund case are enormous. In

EPA’s most recent analysis, the Agency has calculated

that the average cost of cleaning up a Superfund site

currently is approximately $19 million. See 54 Fed. Reg.

at 41024. This estimate is decidedly low; Superfund

cleanup costs can run into the hundreds of millions of

dollars at a site; some even exceed $1 billion.* Hence, the

harsh inequities that flow from holding de minimis par-

ties jointly and severally liable for Superfund cleanup

costs, as occurred in this case, will only grow over time.

The decision below, which otherwise will guide the grow-

ing volume of CERCLA litigation, should be corrected by

this Court to avert such an outcome.

The harshness of the Court of Appeals’ decision may

not be apparent from a quick reading. The court held,

however, that two parties who contributed a minuscule

portion of the waste at the Picillo site are jointly and

severally liable for past costs and all future costs, despite

the fact that there was a “rough justice” alternative for

apportionment of the harm. The court reached this out-

come because those two de minimis parties could not meet

the virtually impossible burden of accounting for the dis-

88-44 (Dec. 1987). To date, over 900 hazardous waste sites have

been formally designated for cleanup by EPA. See 54 Fed. Reg.

41015, 41025-37 (October 4, 1989) (EPA’s most recent update of

the National Priorities List of Superfund sites). The parties in-

volved in each and every one of these cases will, in due course,

have their liabilities resolved in the federal courts, either through

litigation or the approval of consent decrees. See 42 U.S.C.

§§ 9613, 9622.

8 It should be noted that the Office of Technology Assessment

calculates that over 4,000 sites may be on the National Priorities

List by the year 2000, and that total costs of cleanup could run in

the range of $500 billion over the next 50 years. See generally

OTA, “Coming Clean: Superfund Problems Can Be Solved .. .”

at 27, 85 (October 1989). These figures, taken together, trans-

late into an average cleanup cost of approximately $125 million per

site—several times EPA’s estimate.

position of all their waste after they had arranged for

its proper disposal by licensed contractors—a burden

which the statute does not impose on defendants in

CERCLA cases. Furthermore, the court imposed what

amounts to a per se rule of joint and several liability

as to groundwater contamination in every case. The

court’s decision also mandates the imposition of Super-

fund obligations retroactively—including for pre-enact-

ment costs—even though nothing in the Act sanctions

such a result. These rulings, which we address separately

below, are indefensible and have enormous implications

in the area of hazardous waste remediation under Super-

fund. This Court should grant certiorari to ensure that

CERCLA is applied in a way that is faithful to Con-

gress’ intent, is fair to all future parties, and does not

violate constitutional principles.

II. The Decision Below Improperly Imposes Joint and

Several Liability on De Minimis Parties, in Conflict

with Congressional Intent and Case Law Precedent

The central mistake of the court below was its failure

to recognize that this case presents precisely the kind of

situation to which Congress did not intend joint and sev-

eral liability to apply in CERCLA actions: a case in

which parties whose waste contribution amounted to only

a minuscule percentage of the total have been forced to

shoulder all outstanding remedial costs. This error is

compounded by the fact that CERCLA actions have been

held to be proceedings in which what the parties “seek

is essentially restitution, which is an equitable remedy.”

United States v. Mottolo, 695 F. Supp. 615, 626-627

(D.N.H. 1988). It is fundamental, of course, that in

equitable actions such as this case, there must be basic

fairness to the parties—fairness that is lacking here.

Thus, the decision below violates both Congress’ intent

and basic equity.

The extent to which the outcome below runs astray of

the statute and equity is illustrated by the facts. It is

uncontested on the record that a minimum of 20,000 55-

gallon drums of waste materials were disposed of at the

Picillo farm. The entire amount of wastes which the

State attributed to the petitioners amounted, collectively,

only to the equivalent of 86 drums. This means that the

petitioners’ combined waste volume amounted to less than

0.5% of the total volume.

By any rational standard, therefore, petitioners qualify

as de minimis contributors to the Picillo site.* Yet the

effect of the decision below is to impose upon them well

over 50% of the State’s past response costs—plus all fu-

ture costs. Moreover, the United States has recently

exacerbated the unfairness visited upon petitioners by

suing them—but no other parties connected with the site

—to recover $3.5 million of EPA’s past costs. See United

States v. American Cyanamid Co. and Rohm & Haas Co.,

C.A. No. 89-0565 (D.R.L., filed Oct. 16, 1989). Petitioners’

total exposure at this site has therefore ballooned to ap-

proximately $5 million—all for 86 drums out of over

20,000.

This highly inequitable result is contrary to Congress’

intent. CERCLA’s legislative history on the question of

measuring liability, while limited, makes clear that Con-

gress was troubled by the potentially harsh and unfair

effects of joint and several liability. Accordingly, Con-

gress refused to adopt a per se rule applying the doctrine,

lest de minimis parties such as petitioners be unfairly

penalized under the statute.

During Congress’ initial consideration of CERCLA in

1980, the compromise version of the statute that Congress

*It is common in Superfund cases to define de minimis parties

as those responsible for less than 1% of the site’s wastes. One

court recently upheld the reasonableness of such a 1%-cutoff. See

United States v. Cannons Eng'’a Corp., C.A. No. 88-1786 WF (D.

Mass. Aug. 14, 1989), slip op. at 38, 40. Here, even if petitioners’

volumetric shares were doubled, they would still qualify as de

minimis parties for the Picillo site under this standard.

ultimately enacted into law deleted earlier references in

Section 107 that had expressly embraced the concept of

joint and several liability. See 126 Cong. Rec. 30932

(1980) (statement of Sen. Randolph regarding the dele-

tion of joint and several liability as a part of the overall

compromise allowing enactment of CERCLA). The courts

called upon to assess the availability of joint and several

liability under CERCLA have uniformly determined that

Congress’ removal of any reference to the doctrine means

that “the term was omitted in order to have the scope of

liability determined under common law principles, where

a Court performing a case by case evaluation of the com-

plex factual scenarios associated with multiple-generator

waste sites will access the propriety of applying joint

anc several liability on an individual basis.”

Congressman Gore, a leading sponsor of the Act, ar-

ticulated Congress’ expectation that small-volume gen-

erators would not be subject to joint and several liability,

as follows:

One concern expressed about the imposing [of] joint

and several liability for cleanup of hazardous waste

sites is that a one-barrel dumper may be held liable

for millions of dollars in damages. Such concern is

completely unfounded * * *

For a defendant to be held liable for full damages

under joint and several liability * * * the particular

defendants’ actions must also have been a substantial

factor in bringing about the damage. [126 Cong.

Rec. 24341 (1980) (emphasis added). |}

1 United States v. Chem-Dyne Corp., 572 F. Supp. 802, 808

(S.D. Ohio 1983). See also United States v. Conservation Chemical

Co., 589 F. Supp. 59, 63 (W.D. Mo. 1984) (“the term was omitted

in order to have the scope of liability determined by the Court on

a case-by-case evaluation”); United States v. Wade, 577 F. Supp.

1326, 1339 (E.D. Pa. 1983) (deletion of references to joint and

several liability “helps to ameliorate the harshness of the liability

provisions of the statute”).

Thus, from the outset Congress intended that joint and

several liability would not apply across the board under

CERCLA, and that only defendants who had a “substan-

tial” reiationship in bringing about the damage would be

potentially subject to that liability standard.

Congress reemphasized its concern over the inequities

of joint and several liability under CERCLA during con-

sideration of the 1986 amendments to the Act (the Super-

fund Amendments and Reauthorization Act of 1986, Pub.

L. No. 99-499, 100 Stat. 1613 (1986)). Representatives

from both EPA and the Department of Justice assured

Congress that joint and several liability would not apply

to de minimis parties, as the following exchange illus-

trates:

The Chairman: [T]he critics of joint and several

liability contend that Government could sue the gen-

erator for a single drum of waste found at a massive

site for the entire cleanup. While this has not yet

occurred in practice, do you dispute that CERCLA

allows for such enforcement?

[EPA Administrator Lee M.} Thomas: Senator, I

think in theory, that would be allowed; but, clearly,

in practice it is not done. I do not think that it would

be done. 7 do not think even if we tried to do it, the

courts would allow us to do it.

The Chairman: Now, it is correct, then, that it is

only the Government’s prosecutorial discretion that

restrains it from suing the one drum generator?

[Assistant Attorney General F. Henry] Habicht:

Mr. Chairman, if I might respond to that, I think

it is fair to say it is a bit more than prosecutorial

discretion. We are concerned that if we apply joint

and several liability in that kind of extreme situa-

tion, a Court may very well find that it is not ap-

plicable in that sort of situation.

There may be a number of reasons for such a result.

Congress indicated in the legislative history in 1980

that joint and several liability was deleted expressly

from the statute because it should be left to the

courts to deal with on a case-by-case basis so that it

would not be oppressively or unfairly applied in in-

appropriate circumstances.

So I think it more than just prosecutorial discretion

* * * T would hope and expect that all prosecutors

will take guidance from Congress that joint and

several liability should not be abused. [Superfund

Improvement Act of 1985: Hearings on 8.51 Before

the Committee on the Judiciary, 99th Cong., Ist Sess.

71 (1985) (emphasis added)."']

The courts, too, have been troubled by the unfairness

of applying the joint and several liability doctrine to de

minimis parties. As one court put it, “both houses of

Congress were concerned about the issue of fairness, and

joint and several liability is extremely harsh and unfair

if it is imposed on the defendant who contributed only a

small amount of waste to a site.” United States v. A & F

Materials Co., Inc., 578 F. Supp. 1249, 1256 (S.D. Ill.

1984)."* Thus, the settled rule, at least until the decision

below, had been that joint and several liability should

apply only on a case-by-case basis,"* and should not be

imposed “where it would produce inequitable results.”

1! See also Insurance Issues and Superfund, Hearing before the

Committee on Environment and Public Works, 99th Cong., Ist

Sess. 13 (April 3, 1985) (Assistant Attorney General Habicht

advises the Senate that “we have not and don’t intend to and I

don’t think we can impose liability for 100% of the costs on a

de minimis contributor”).

Accord United States v. Wade, 577 F. Supp. at 1341.

'8“In each case, the court must consider traditional and evolving

principles of federal common law, which Congress has left to the

courts to supply interstitially.” United States vy. Mensanto Co..,

858 F.2d 160, 171 (4th Cir. 1988), cert. denied, 109 S. Ct. 3156

(1989). Accord, e.g., United States v. Miami Drum Services, Inc.,

25 E.R.C. 1469, 1472 (S.D. Fla. 1986); United States v. Conserva-

tion Chemical Co., 619 F. Supp. 162, 223-230 (W.D. Mo. 1985).

New York v. Shore Realty Corp., 21 E.R.C. 1430, 1431-

32 (E.D.N.Y. 1984) .™

If permitted to stand, the imposition of liability on

petitioners in the manner sanctioned by the courts below

would vitiate Congress’ stated concerns about imposing

joint and several liability on de minimis parties, since if

such liability applies on this record, it is difficult to con-

ceive of a case in which it would not apply. The Court

of Appeals, in short, undid the compromise Congress

struck when it enacted CERCLA and effectively has read

back into the statute that which Congress deliberately

took out: a per se rule that joint and several liability

will, for all practical purposes, be applied in every

CERCLA case. This Court should correct this judicial

contravention of legislative intent and action.”

14 Accord, e.g., United States v. Bliss, 667 F. Supp. 1298, 1312-13

(E.D. Mo. 1987); United States v. Miami Drum Services, Inc., 25

E.R.C. 1469, 1474 (S.D. Fla. 1986) (deletion of specific references

to joint and several liability in drafts of the CERCLA legislation

“indicated an intent [by Congress] to avoid its mandatory imposi-

tion in cases where the result would be inequitable”); United

States v. Hardage, 26 E.R.C. 1049 (W.D. Okla. 1987); Idaho v.

Bunker Hill Co., 635 F. Supp. 665, 676-677 (D. Idaho 1986) ;

United States v. Stringfellow, 20 E.R.C. 1905 (C.D. Cal. 1984) ;

United States v. A & F Materials, 578 F. Supp. 1249, 1256 (S.D.

Ill. 1984) (“The Senate expressed its sensitivity to the fairness

issue by rejecting a mandatory legislative standard in lieu of allow-

ing the Courts to impose joint and several liability on a case by

case basis’) ; United States v. Chem-Dyne Corp., 572 F. Supp. 802,

808 (S.D. Ohio 1983) (Congress deleted use of joint and several

liability “to avoid a mandatory legislative standard applicable in all

situations which might produce inequitable results in some cases”’).

15 Nor can the outcome below be justified as an appropriate step

in the evolution of federal common law on joint and several lia-

bility under CERCLA. In developing that common law, the courts—

including the Court of Appeals below, App. 4a—have relied upon

the Restatement (Second) of Torts for guidance in developing

jurisprudential principles to apply under the statute. The Restate-

ment expressly provides that in litigation the plaintiff has the

burden of showing “that it is more likely than not that the conduct

;

The unfairness of the result below is shown by two

assumptions the court made about the purported limits

of the decision’s impact, neither of which is valid. First,

the court asserted that any unfairness to petitioners would

be mitigated by their ability to seek contribution from

other liable parties, pursuant to Section 113(f) (1) of

CERCLA, 42 U.S.C. § 9613(f) (1). App. 6a. But this

analysis missed the point. Because Congress never in-

tended de minimis parties to be saddled with joint and

several liability in the first place, it certainly never in-

tended to place the burden of initiating a private contri-

bution action on such parties. Forcing the parties with

the least connection to a Superfund site to bear the ex-

pense of pursuing contribution from parties the govern-

ment chose not to sue (and, in some instances, as in this

case, went so far as to prevent from being named as third-

party defendants in the initial litigation) stands CERCLA

on its head and increases the unfair impact of the deci-

sion below.

Moreover, the court overlooked the fact that the stat-

ute elsewhere bars contribution actions against parties

who have entered into settlements with the government

for matters covered in those settlements. See CERCLA

Section 113(f) (2), 42 U.S.C. § 9613(f) (2). This hardly

guarantees that the grossly disproportionate obligations

imposed upon petitioners by the decision below will be

alleviated through subsequent contribution actions, as an-

ticipated by the Court of Appeals.

Second, the court below cited Section 122(g) of

CERCLA, 42 U.S.C. § 9622(g), as a mitigating factor.

of the defendant was a substantial factor in bringing about the

harm.” Restatement (Second) of Torts § 433B, comment a (em-

phasis added). The State cannot credibly claim that parties who

collectively contributed less than 0.5% of the waste materials at a

site were “substantial factors” in that site’s environmental prob-

lems; yet that conclusion is necessarily implicit in the decision

below. See also page 13 supra (statement of Rep. Gore).

This provision authorizes special settlements for de mini-

mis parties, and the court asserted in a footnote that the

petitioners “apparently were offered settlements, but chose

instead to try this case.” App. 5a n.3. This understand-

ing by the Court of Appeals is incorrect and has no sup-

port in the record: at no time has the government of-

fered petitioners the opportunity to settle their liabilities

in this case as de minimis parties under Section 122(g).

Hence, this purported mitigating factor is of no moment,

and the harsh impact of the decision below stands un-

relieved.

III. The Decision Below Improperly Held that Petitioners

Have the Burden of Showing Apportionability, and that

Groundwater Contamination Is Not Apportionable

Wholly apart from the Court of Appeals’ failure to

recognize the limits of the applicability of joint and sev-

eral liability under CERCLA, the decision below rests on

a second fundamental error: the conclusion that joint

and several liability is applicable at all in this case. Such

liability applies only when the harm involved is indivis-

ible and not capable of apportionment. The Court of Ap-

peals concluded that joint and several liability was appro-

priate in this case because petitioners had failed to show

that the Picillo site’s costs were capable of apportion-

ment. App. 12a-13a.

This conclusion was incorrect. As petitioners showed

the court, the record provides ample basis for calculating

the parties’ respective allocation amounts on an objective

basis. All of the wastes identified by the State as deriv-

ing from American Cyanamid were found exclusively

during Phase II of the cleanup; thus, the percentage of

the Phase II wastes those drums represented would be an

objective, reasonable measurement of liability for Amer-

ican Cyanamid.

Similarly, all of Rohm & Haas’ wastes were uncovered

during Phase III, and the combined volume of those

eo _

wastes as a proportion of the total Phase III wastes

would be a fair and rational measurement for Rohm

& Haas’ liability. This amount in turn should then

be reduced by the $32,000 that Rohm & Haas spent

to mitigate any alleged damages by removing its wastes

—as well as materials deposited by others—from the

site. See generally United States v. Ottati & Goss, Inc.,

694 F. Supp. 977, 999 (D.N.H. 1988) (authorizing ap-

plication of an “indirect credit or off-set” in computing

parties’ liabilities). The Court of Appeals failed even to

address this mitigation of damages by Rohm & Haas.'®

These facts, along with the data in the record as to

volumetric amounts at the site, provided ample opportu-

nity to apportion the harm—particularly since, under

applicable common law principles of apportionment, only

a “rough justice,” rather than statistical certitude, is

required. See generally United States v. Ottati & Goss,

Inc., 24 E.R.C. 1152, 1152 (D.N.H. 1986) (apportioning

liability on the basis of waste volumes sent to the site).

See also Restatement (Second) of Torts §§ 433A, 881;

W. Keeton, D. Dobbs, R. Keeton & D. Owen, Prosser and

Keeton on Torts § 52 (5th ed. 1984) (the burden of

showing a basis for apportionment is a relaxed one) ;

Restatement (Second) of Torts § 483A, comments b, d

(1965) (“rough estimate” or a “reasonable and rational

basis” will suffice to show divisibility). The decision be-

low against apportionment thus was plainly unjustified,

and set the stage for the inequitable outcome that fol-

lowed.

A linchpin of the Court of Appeals’ decision rejecting

apportionment was its determination that petitioners had,

16 The Court of Appeals also was in error when it asserted that,

even if overall waste volumes could be calculated, the record did

not permit apportionment of costs because the per-drum cost of

removal was unknown. App. 18a n.11. As noted earlier, Rohm &

Haas removed the equivalent of 76 drums for $32,000. This data

plainly provides a foundation for calculating removal costs on a

per-drum basis.

and failed to carry, the burden of showing that joint and

several liability was inappropriate because the harm could

be apportioned among the parties. App. 12a-13a. In do-

ing so, the court shifted the burden of proof away from

where it would normally be—on the State, as the moving

party—and placed it on petitioners.

Yet nothing in the statute evidences any intent by

Congress to authorize such burden-shifting. To the con-

trary, Congress elsewhere in CERCLA expressly listed

the affirmative defenses on which defendants have the

burden, such as acts of God or acts of third parties, and

imposed a “preponderance of the evidence” standard for

determining whether that burden is met. See Section

107(b) of CERCLA, 42 U.S.C. §9607(b) (App. 73a-

75a). Congress, then, obviously knew how to assign the

burden to defendants in Superfund cases—and chose not

to do so in connection with liability apportionment is-

sues.'7 This Court should not permit the lower court’s

unauthorized shifting of the burden to stand.

The decision to place the burden on petitioners also

violates the well-settled evidentiary principle that if one

party has relevant knowledge peculiarly within its con-

trol, then that party carries the burden of proof on issues

related to that knowledge. This rule squarely applies in

environmental cases. Thus, in an action involving the

handling of hazardous wastes under the Resource Con-

servation and Recovery Act (“RCRA”), 42 U.S.C. §$§ 6901

et seq., an EPA administrative law judge acknowledged

that

[i]Jn the absence of a statutory allocation of the bur-

den of proof, the general rule is that the burden of

proving a fact should be on the party whose means

17Cf. Russello v. United States, 464 U.S. 16, 23 (1983) (when

Congress includes language in one section of a statute but not

in another, it is presumed that Congress intended different mean-

ings for the two sections. )

ee ce

of knowledge about that fact are peculiarly within

its control. J. Wigmore, 9 Evidence § 2486 (3d ed.

1940) .{8)

This holding corresponds to this Court’s own determina-

tion that

the ordinary rule, based on considerations of fair-

ness, does not place the burden upon a litigant of

establishing facts peculiarly within the knowledge

of his adversary.'**!

As noted, CERCLA is silent as to the allocation of the

burden of proof concerning apportionment of liability

among defendants. However, when, as here, the State

has conducted a cleanup of a site and was the last party

able to determine the composition and sources of the

waste there, then the facts necessary to apportion lia-

bility for the harm are peculiarly within the State’s

control. This is particularly true in this case, in which

the site cleanup was already well underway by the time

petitioners were first notified of their potential connec-

tion with the site, and that cleanup was marred by

shoddy recordkeeping by the government. In these cir-

cumstances, the burden of demonstrating that the harm

is not divisible therefore properly falls on the State.

Not only did the court below improperly reject appor-

tionment for past costs as a result of its misapplication

of the burden of proof; as to future groundwater costs,

the court went on to preclude petitioners from even at-

tempting to show divisibility. This result stems from the

18 Jn the Matter of: Central Print and Body Shop, Inc., USEPA

Dkt. No. VIII-85-02; RCRA Appeal No. 86-3; 1987 RCRA LEXIS

23 (Jan. 12, 1987).

19 Campbell v. United States, 365 U.S. 85, 96 (1961). See also

Oid Ben Coal Corp. v. Interior Bd. of Mine Operations Appeals,

523 F.2d 25, 36 (7th Cir. 1975) (“the burden of proving a fact is

on the party who presumably has peculiar means of knowledge

enabling him to prove its falsity, if it is false’) (citing Wigmore,

9 Evidence § 2486 (3d ed.) ).

First Circuit’s decision to impose what amounts to a

broad per se rule that not only holds petitioners in this

case jointly and severally liable for these future costs—

whatever they may be—but also serves as potential prece-

dent at all other Superfund sites in support of automati-

cally imposing joint and several liability for groundwater

remedial costs. See App. 8a, 13a-14a.

The court’s determination on groundwater was im-

proper on two principal scores. First, the court in ef-

fect found petitioners liable for a blank check on the

basis of no evidence, since the nature and extent of

groundwater contamination at the site have yet to be

determined. Not willing to wait for those with ex-

pertise in the field to study the issue, however, the court

below summarily advanced its conclusion that any ground-

water contamination that is found will be indivisible, so

that petitioners must pay all cleanup costs associated

with it.

The court’s pronouncement on this point is cast in such

generic terms that it will no doubt be applied at all

Superfund sites with groundwater contamination. Since

there is nothing in the statute or its legislative history

indicating that Congress intended to carve out a ground-

water exception to the general rule against automatic

imposition of joint and several liability,?° this Court

20 As a general matter, several methods of apportionment poten-

tially could be applicable to groundwater at Superfund sites. For

example, if groundwater tests reveal that only certain contaminants

are in the water, then liability could be limited only to those com-

panies whose wastes contained those contaminants. Alternatively,

if a broad range of contaminants paralleling those found in the

soil characterize the groundwater as well, then apportionment

based on overall drum totals for the site may be appropriate.

Finally, if groundwater contamination is particularly severe near,

or attributable to, certain disposal trenches or areas at the site,

then apportioning most of the liability for groundwater to com-

panies whose wastes went to those trenches or areas may be in

order. The opinion below brushes aside these (and other) poten-

Re ain

—

ame tar od

should reverse the unwarranted per se application of such

liability by the Court of Appeals.

1V. The Decision Below Impermissibly Applied CERCLA

Retroactively in Violation of the Ex Post Facto and

Due Process Clauses, and Impermissibly Allowed the

Recovery of Pre-Enactment Costs by the State

Holding petitioners liable under CERCLA for the pre-

Act disposal of their wastes at the Picillo site violates

the Ex Post Facto and Due Process Clauses of the United

States Constitution.”* See U.S. Const., art. I, § 9, el. (3)

(Ex Post Facto Clause); id., amend. V (due process

clause); see also id., amend. XIV. Under the Ex Post

Facto clause, Congress may not enact a statute which

“imposes a punishment for an act not punishable at the

time it was committed, or imposes additional punishment

to that then prescribed.”” Cummings v. Missouri, 71 U.S.

(4 Wall.) 277, 325-326 (1867). As applied in this case,

CERCLA is both punitive and retroactive, and therefore

unconstitutional.

Under Justice Story’s classic formulation, a statute

applies retroactively when it “creates a new obligation,

imposes a new duty, or attaches a new disability in

respect to transactions or considerations already past

* * *” Society for the Propagation of the Gospel v.

Wheeler, 22 F. Cas. 756, 767 (C.C.D.N.H. 1814). The

facts of this case squarely meet this test, since the dis-

posal of petitioners’ wastes at the Picillo site in 1977

occurred before the enactment of CERCLA in 1980.”

tial methods of apportionment, however, in favor of a declaration

of indivisibility.

21 These arguments were raised and argued before the First

Circuit. See Brief of Appellants, O’Neil v. Picillo, No. 88-1551

(ist Cir., filed Aug. 25, 1988) at 39-43.

22 Although the First Circuit did not address the retroactivity

question in detail—instead relegating its discussion of it to a

Moreover, since Cummings v. Missouri, supra, and Ex

Parte Garland, 71 U.S. (4 Wall.) 333 (1867), pur-

portedly nonpenal or “regulatory” retroactive legisla-

tion may be held unconstitutional when it is essentially

punitive in character. Only last term, this Court con-

firmed in United States v. Halper, 109 S. Ct. 1892, 1902

(1989), that a nominally “civil” penalty must be con-

sidered punitive (for purposes of the Double Jeopardy

Clause) when the government’s proposed penalty sub-

jects a “small gauge offender * * * to a sanction over-

whelmingly disproportionate to the damages he has

caused.” ** In this case, the lower court’s imposition of

joint and several liability on petitioners is so grossly out

of proportion to their de minimis connection with the

site as to be clearly punitive.

In addition to the ex post facto issues, retroactive ap-

plication of the statute to the facts of this case raises

important due process concerns. Under this Court’s rul-

ings in Usery v. Turner Elkhorn Mining Co., 428 U.S. 1

(1976), and Pension Benefit Guaranty Corp. v. Gray &

Co., 467 U.S. 717 (1984), retroactive civil legislation

offends due process if it is “harsh and oppressive” or

“arbitrary and irrational.” In Turner Elkhorn, the Court

made clear that “[t]he retrospective aspects of legisla-

tion, as well as the prospective aspects, must meet the

test of due process, and the justifications for the latter

may not suffice for the former.” 428 U.S. at 17. Retro-

spective application of CERCLA to petitioners cannot

withstand this test. The State’s attempt to recover the

bulk of its past costs and all future costs from two par-

footnote (App. 14a n.12)—the court appears to have assumed that

the State’s interpretation of CERCLA required retroactive applica-

tion.

23 See also Hicks v. Feiock, 108 S. Ct. 1423, 1429 (1988) (“the

labels affixed either to the proceeding or to the relief imposed * * *

are not controlling and will not be allowed to defeat the applicable

protections of federal constitutional law’).

ties who collectively contributed less than one-half of one

percent of the waste found at the site is both arbitrary

and irrational.

But even if CERCLA properly applied to pre-enactment

acts—a proposition petitioners dispute—the statute plainly

does not apply to recovery of pre-enactment costs.2* In

light of the serious constitutional difficulties raised by

retroactive legislation, this Court has adopted a strong

presumption against applying statutes retroactively. The

Court has repeatedly stated that

the first rule of construction is that legislation must

be considered as addressed to the future, not to the

past * * * [and] a retrospective operation will not

be given to a statute which interferes with antece-

dent rights * * * unless such be “the unequivocal and

inflexible import of its terms, and the manifest in-

tention of the legislature.” [Greene v. United States,

376 U.S. 149, 160 (1964) (quoting Union Pacific

R.R. Co. Vv. Laramie Stock Yards Co., 231 U.S. 190,

199 (1913) ).]

Under this presumption, “laws by which human action

is regulated * * * are never to be construed retrospec-

tively unless the language of the act shall render such

construction indispensable.” Reynolds v. McArthur, 27

U.S. (2 Pet.) 417, 434 (1829). Neither the language nor

the legislative history of CERCLA, however, provides

that the Act is to be applied to pre-enactment response

costs. The liability provisions in Section 107(a) contain

no such authorization, while Section 302(a), quite to the

contrary, provides that “unless otherwise provided, all

provisions of this chapter shall be effective on December

11, 1980.” 42 U.S.C. § 9652(a) (1980).

The courts have split on the question of whether the

general presumption against retroactivity bars the gov-

24 In this case, $556,303 of the past response costs that the State

seeks to recover were incurred during Phrases 0 and I of the site

remediation, both of which preceded the enactment of CERCLA

on December 11, 1980.

ernment from recovering response costs incurred prior

to CERCLA’s effective date. Compare United States v.

Northeastern Pharmaceutical & Chemical Co., Ine.

(NEPACCO), 810 F.2d 726 (8th Cir. 1986), cert. denied,

484 U.S. 1008 (1988) (citing cases), with United States

Vv. Wade, 20 E.R.C. 1849 (E.D. Pa. 1984). In the deci-

sion below, the First Circuit dismissed petitioners’ past

cost retroactivity claims with a footnote citing the

NEPACCO decision, which in turn relied primarily upon

the analysis in United States v. Shell Oil Co., 605 F.

Supp. 1064 (D. Colo. 1985).

The Shell Oil court found support for a retroactive ap-

plication of the statute in the structure of the Act. In

particular, the court held that Congress had “implicitly

authorized” recovery of pre-enactment response costs in

general by affirmatively barring the retroactive recovery

of costs in the specific context of natural resource dam-

ages. Jd. at 1076 (citing 42 U.S.C. § 9607(f)). But this

analysis rests on the assumption that Congress was un-

aware of the presumption against retroactivity and be-

lieved that it needed to speak explicitly only to create an

exception to retroactivity, when in reality the opposite is

the case. It is implausible that Congress would be un-

familiar with such a fundamental principle, particularly

since this Court has repeatedly held that Congress is pre-

sumed to know the rules of law announced by the courts.”

The court in United States v. Wade, by contrast, prop-

erly recognized the presumption against retroactivity and

held that if Congress had intended to impose liability for

pre-enactment costs under CERCLA, it would have made

that intent clear in the language or legislative history of

the statute. 20 E.R.C. at 1851. The Wade court found

that, instead, there was no “clear indication that Congress

ever focussed on the issue of liability for pre-enactment

costs.” Jd. The court examined CERCLA’s structure and

% E.9., Cannon Vv. University of Chicago, 441 U.S. 677, 696-697

(1979).

noted that when combined with the statute of limitations

provision then in force, a retroactive application of the

cost recovery provisions would allow a plaintiff to recover

costs no matter how far back in the distant past they had

been incurred. Jd. Finally, the court rejected any in-

ference from the limitations on recovery of natural re-

source damages contained in Section 107(f) (and a re-

lated provision in Section 111(d)(1)), on the ground that

those provisions limited recovery based on the time at

which the damage occurred, and not on the time at which

funds are spent to remedy the damage. /d.

These conflicting decisions raise important issues re-

garding the type of evidence that is necessary in

CERCLA cases to overcome the general presumption

against retroactivity. The Court should grant the writ

in order to reaffirm either that the statute cannot consti-

tutionally be applied retroactively or that the rule re-

quiring Congress to speak clearly if it intends for a stat-

ute to be applied retroactively extends to Superfund

actions.

CONCLUSION

For the foregoing reasons, this Court should grant the

writ and reverse the decision of the court below.

Respectfully submitted,

Of Counsel: E. BARRETT PRETTYMAN, JR.*

ELLEN FRIEDELL Davip F. GRADY

Senior Counsel Scott H. RFIScH

Roum & Haas COMPANY HoGAN & HARTSON

Independence Mall West 555 Thirteenth Street, N.W.

Philadelphia, Pennsylvania 19105 | Washington, D.C. 20004

(215) 592-2582 (202) 637-5685

MARGARET R. TRIRRLE DEMING E. SHERMAN

Legal Department MARK A. POGUE

AMERICAN CYANAMID COMPANY Epwarps & ANGELL

One Cyanamid Plaza 2700 Hospital Trust Tower

Wayne, New Jersey 07470 Providence, Rhode Island 02903

(201) 831-3641 (401) 274-9200

Counsel for Petitioners

November 20, 1989 * Counsel of Record

APPENDICES

APPENDIX A

UNITED STATES COURT OF APPEALS

FIRST CIRCUIT

No. 88-1551

JAMES E. O’NEIL, In His Capacity As Attorney General

For The State Of Rhode Island,

Plaintiff, Appellee,

WARREN V. PICILLO, SR., et al.,

Defendants, Appellees.

APPEAL OF AMERICAN CYANAMID COMPANY and

ROHM & HAAS COMPANY,

Defendants, Appellants.

Heard Feb. 27, 1989

Decided Aug. 21, 1989

Deming E. Sherman, with whom Mark A. Pogue, Ed-

wards & Angell, Providence, R.I., Ellen Friedell, and

Margaret R. Tribble, Wayne, N.J., were on briefs for

appellants.

Gary Powers, Sp. Asst. Atty. Gen., Environmental

Advocate, with whom James E. O’Neil, Atty. Gen., Provi-

dence, R.I., was on briefs for appellee James E. O’Neil,

in his capacity as Atty. Gen. for the Siate of Rhode

Island.

William G. Ballaine, with whom Maria J. Litman and

Siff, Rosen & Parker, P.C., New York City, were on the

brief for appellees Daniel Capuano, Jack Capuano, Es-

tate of Anthony Capuano, United Sanitation, Inc., Sani-

tary Landfill, Inc. and A. Capuano Brothers.

Roger J. Marzulla, Asst. Atty. Gen., Carrick Brooke-

Davidson, Jacques B. Gelin and Anne S. Almy, Dept. of

Justice, Washington, D.C., on brief for the U.S., amicus

curiae. -

Before CAMPBELL, Chief Judge, COFFIN, Senior

Circuit Judge, and FUSTE,* District Judge.

COFFIN, Senior Circuit Judge.

In July of 1977, the Picillos agreed to allow part of-

their pig farm in Coventry, Rhode Island to be used as

a disposal site for drummed and bulk waste. That de-

cision proved to be disastrous. Thousands of barrels of

hazardous waste were dumped on the farm, culminating

later that year in a monstrous fire ripping through the

site. In 1979, the state and the Environmental Protec-

tion Agency (EPA) jointly undertook to clean up the

area. What they found, in the words of the district court,

were massive trenches and pits “filled with free-flowing,

multi-colored, pungent liquid wastes” and thousands of

“dented and corroded drums containing a veritable pot-

pourri of toxic fluids.” O’Neil v. Picillo, 682 F.Supp. 706,

709, 725 (D.R.1.1988).

This case involves the State of Rhode Island’s attempt

to recover the clean-up costs it incurred between 1979

and 1982 and to hold responsible parties liable for all

future costs associated with the site.! The state’s com-

* Of the District of Puerto Rico, sitting by designation.

1The EPA is not a party to this action, but has filed an amicus

brief. For the sake of simplicity, we will refer collectively to the

State and the EPA as the “government.” Where it is necessary to

distinguish between the two, we will do so.

plaint originally named thirty-five defendants, all but

five of whom eventually entered into settlements totalling

$5.8 million, the money to be shared by the state and

EPA. After a month-long bench trial, the district court,

in a thorough and well reasoned opinion, found three of

the remaining five companies jointly and severally liable

under section 107 of the Comprehensive Environmental

Response, Compensation, and Liability Act of 1980, 42

U.S.C. § 9601 et seg. (“CERCLA”) for all of the State’s

past clean-up costs not covered by settlement agreements,

as well as for all costs that may become necessary in the

future. The other two defendants obtained judgments

in their favor, the court concluding that the state had

failed to prove that the waste attributed to those com-

panies was “hazardous,” as that term is defined under

the Act.

Two of the three companies held liable at trial, Amer-

ican Cyanamid and Rohm and Haas, have taken this ap-

peal. Both are so-called “generators” of waste, as op-

posed to transporters or site owners. See § 107(a) (3),

42 U.S.C. § 9607. Neither takes issue with the district

court’s finding that some of their waste made its way to

the Picillo site. Rather, they contend that their contribu-

tion to the disaster was insubstantial and that it was,

therefore, unfair to hold them jointly and severally liable

for all of the state’s past expenses not covered by settle-

ments. They further contend that it was error to hold

them liable for all future remedial work because the state

has not demonstrated that such work ever will be neces-

sary. With far less vigor, they also raise a series of equi-

table defenses, claiming that their liability should be re-

duced, either in whole or part, because (1) much of the

damage to the site resulted from the government’s sloppy

handling of barrels; (2) the government’s clean-up proce-

dures were not cost-efficient as required by the Act, see

§107(a); and (3) their waste ended up at the site

through the acts of wholly unrelated third parties, see

§ 107(b) (3). Finally, they argue that the Act should

not be applied retroactively and that it was inappropri-

ate for the district court to award the government pre-

judgment interest in this case. After a careful review

of the record, we conclude that none of these arguments

suffices to warrant reversal of the judgment below.

We need not spend time outlining the general factual

and statutory background of this case. As we noted

above, the district court’s opinion is thorough and we

see no reason to repeat what was said there. See 682

F.Supp. 706. Nor do we think it necessary to respond in

detail to all of appellants’ claims, as we could add little

to the district court’s reasoning or existing case law.

We therefore confine our discussion to appellants’ argu-

ments concerning the unfairness of holding them jointly

and severally liable for the government’s past and future

clean-up costs.*

Joint and Several Liability

Statutory Background

It is by now well settled that Congress intended that

the federal courts develop a uniform approach governing

the use of joint and several liability in CERCLA actions.

The rule adopted by the majority of courts, and the one

we adopt, is based on the Restatement (Second) of Torts:

damages should be apportioned only if the defendant can

demonstrate that the harm is divisible. See, e.g., United

States v. Chem-Dyne Corp., 572 F.Supp. 802, 809-11

(S.D.Ohio 1983); United States v. Monsanto Co., 858

F.2d 160, 171-73 (4th Cir.1988) ; United States v. Bliss,

667 F.Supp. 1298, 1312-13 (E.D.Mo.1987).

The practical effect of placing the burden on defendants

has been that responsible parties rarely escape joint and

2 During the course of the trial, the district court resolved nu-

merous statutory questions concerning CERCLA’s scope. We, of

course, take no position on any ruling not contested on appeal.

several liability, courts regularly finding that where

wastes of varying (and unknown) degrees of toxicity and

migratory potential commingle, it simply is impossible to

determine the amount of environmental harm caused by

each party. See, e.g., United States v. Chem-Dyne, 572

F.Supp. at 811; Monsanto, 858 F.2d at 172-73. It has not

gone unnoticed that holding defendants jointly and sever-

ally liable in such situations may often result in defen-

dants paying for more than their share of the harm. Cf.

United States v. Monsanto, 858 F.2d at 173. Neverthe-

less, courts have continued to impose joint and several

liability on a regular basis, reasoning that where all of

the contributing causes cannot fairly be traced, Congress

intended for those proven at least partially culpable to -

bear the cost of the uncertainty. See, e.g., United States

v. Chem-Dyne, 572 F.Supp. at 809-810.

In enacting the Superfund Amendments and Reauthor-

ization Act of 1986 (“SARA”), Congress had occasion to

_examine this case law. Rather than add a provision deal-

ing explicitly with joint and several liability, it chose to

leave the issue with the courts, to be resolved as it had

been—on a case by case basis according to the predomi-

nant “divisibility” rule first enunciated by the Chem-

Dyne court. See, e.g., United States v. Monsanto, 858

F.2d at 171 n. 23 (Chem-Dyne decision endorsed by Con-

gress); Cf. Garber, Federal Common Law of Contribu-

tion Under the 1986 CERCLA Amendments, 14 Eco.L.Q.

365, 374-75 (1987). Congress did, however, add two im-

portant provisions designed to mitigate the harshness of

joint and several liability. First, the 1986 Amendments

direct the EPA to offer early settlements to defendants

who the Agency believes are responsible for only a small

portion of the harm, so-called de minimis settlements.

See § 122(g).8 Second, the Amendments provide for a

statutory cause of action in contribution, codifying what

8’ Appellants apparently were offered settlements, but chose in-

stead to try this case.

most courts had concluded was implicit in the 1980 Act.

See §113(f) (1). Under this section, courts “may allo-

cate response costs among liable parties using such equi-

table factors as the court determines are appropriate.”

We note that appellants already have initiated a contri-

bution action against seven parties before the same dis-

trict court judge who heard this case.

While a right of contribution undoubtedly softens the

blow where parties cannot prove that the harm is divis-

ible, it is not a complete panacea since it frequently will

be difficult for defendants to locate a sufficient number

of additional, solvent parties. Moreover, there are sig-

nificant transaction costs involved in bringing other re-

sponsible parties to court. If it were possible to locate all

responsible parties and to do so with little cost, the issue

of joint and several liability obviously would be of only

marginal significance. We, therefore, must examine care-

fully appellants’ claim that they have met their burden

of showing that the harm in this case is divisible.‘

* Before we can turn to the divisibility issue, however, we must

first resolve a threshold question raised by appellants. Citing the

Restatement (Second) of Torts § 433B, appellants contend that be-

fore joint and several liability may be imposed, the government

has the initial burden of showing that the defendants were a “sub-

stantial” cause of the harm. If the government cannot prove that

the defendants were substantial contributors, then joint and several

liability may not be imposed and the defendant’s burden of demon-

strating the harm is divisible never arises. We reject this approach.

Even assuming that a strict application of the Restatement rule

would allow appellants to escape joint and several liability in a situ-

ation such as this—something which is far from clear, appellants

having provided us with no common law tort precedents to support

their reading of the Restatement formulation—we would nonthe-

less decline to place this threshold burden on the government in

CERCLA actions. As we noted earlier, Congress intended for the

federal courts to develop a uniform approach to govern the use of

joint and several liability. The Restatement is one source for us

to consult. While courts generally have looked to the Restatement

for guidance, they have declined to place the burden of showing

that defendants are “substantial” contributors on the government,

Divisibility

The district court issued two rulings on joint and sev-

eral liability. First, the court held appellants jointly and

severally liable for all of the state’s past costs not covered

by settlements, roughly $1.4 million including prejudg-

ment interest. According to appellants, this money was

spent exclusively on “removal” costs or “surface cleanup”

(e.g., sampling the waste, contacting responsible parties,

and ultimately, removing the barrels and contaminated

soil), and not on remedying the alleged damage to ground-

water and other natural resources (“remedial” costs) .°

Second, the district court held appellants jointly and sev-

erally liable for all future removal costs to be incurred

by the state, as well as for all cost-efficient remedial ac-

tion the state (and EPA) may deem necessary after con-

ducting further tests. The parties discuss the two hold-

ings separately and we shall do likewise.

I. Past Costs

Appellants begin by stressing that the state’s past costs

involved only surface cleanup. They then argue that

because it was possible to determine how many barrels

of waste they contributed to the site, it is also possible

to determine what proportion of the state’s removal ex-

recognizing Congress’ concern that cleanup efforts not be held

hostage to the time-consuming and almost impossible task of tracing

all of the waste found at a dump site. See, e.g., United States v.

Chem-Dyne, 572 F.Supp. at 809-11; United States v. Monsanto, 858

F.2d at 171-73. As we also noted earlier, in passing the 1986

Amendments Congress chose not to dismantle the existing approach,

but instead, to add provisions dealing with de minimis settlements

and contribution actions. It is at these stages, then, that the ques-

tion of “substantiality” should be considered, and not at the point

of determining liability to the government.

5 Appellant’s entire argument rests en this point. We assume,

therefore, that if the $1.4 million in past expenses did cover more

than “removal” costs, the government would have alerted us to this

fact.

penses are attributable to each of them simply by esti-

mating the cost of excavating a single barrel. The EPA

advances two reasons why this approach is incorrect.

First, it claims that it was not possible to determine how

many barrels were traceable to appellants, nor was it

possible to determine how much of the contaminated soil

removed by the state was attributable to each appellant,

and therefore, that it is impossible to apportion the state’s

removal costs. Second, it argues that even if it were pos-

sible to determine what proportion of the state’s removal

costs are attributable to appellants, joint and several

liability still would have been proper because the “harm

to be apportioned is not the cost but the environmental

contamination that prompts the response action.” We

shall discuss the EPA’s two arguments in reverse order.*

We state at the outset that we have some trouble with

the EPA’s second argument. Assuming the government

ultimately undertakes remedial action to clean the ground-

water in the area and then seeks to recover the costs of

doing so, it will have in effect submitted two separate

bills, one for the cost of removing the barrels and soil;

and one for cleaning the water. We think it likely that the

harm to the water will be indivisible, and therefore, that

appellants could properly be held jointly and severally

liable for the cost of this remedial action. But simply

because the costs associated with cleaning the ground-

water cannot be apportioned does not mean that we should

decline to apportion the costs of removing the barrels

and soil if those costs are in fact divisible. This would

seem to follow from the basic common law principle that

defendants not be held responsible for those costs trace-

able to others. We think that the EPA would have to

accept as much. Nonetheless, the Agency adheres to the

position that it is irrelevant whether or not the costs of

removal can be apportioned.

® The state essentially advances the same two arguments.

The reason the Agency takes this position is not, then,

because the environmental harm that actually occurred

was indivisible, but because the additional environmental

harm that the government averted would have been in-

divisible had it occurred. This argument gives us pause

because it appears to contravene the basic tort law prin-

ciple that one pays only for the harm that was, and not

for the harm that might have been.

Assume that it costs the government $1 million to re-

move all of the barrels from a site, but of this million,

only $300,000 were spent removing the defendant’s bar-

rels. Also assume that had the barrels not been removed,

the additional damage to the environment would have

been $5 million and that this five million would not have

been divisible. The government certainly would not take

the position that it could recover $5 million in such a

situation. Instead, it would ask only for the $1 million

that it actually spent. Yet when it comes to apportioning

that million, the Agency argues that we should look to

whether the $5 million of averted harm would be divisible.

If we were to accept the EPA’s “averted harm” argu-

ment, it appears that apportionment would be appropriate

only in the highly unlikely event that (1) all of the bar-

rels were empty and no further environmental harm was

possible; (2) the individual barrels were sufficiently far

apart that even if further spillage occurred, there would

be no commingling of wastes and thus no difficulty deter-

mining whose waste caused what damage; or (3) every

barrel contained precisely the same type of waste so that

even if there was further spillage and commingling, the

environmental harm could be apportioned according to the

volumetric contribution of each defendant. As the EPA

undoubtedly recognizes, it rarely, if ever, will be the case

that one of these three conditions is present. As a prac-

tical matter, then, joint and several liability will be im-

posed in every case.

10a

Because we believe Congress did not intend for joint

and several liability to be imposed without exception, we

are troubled by the practical implications of the Agency’s

argument, the more so because it seems to find no support

in common law tort principles, which were to be one of

our benchmarks in developing a uniform approach to

govern the imposition of joint and several liability. At

oral argument, the Agency did not claim, however, that

its theory fit within the common law framework of joint

and several liability, but instead, took the position that

these CERCLA cases are not standard tort suits. Al-

though we recognize that Congress deviated from certain

tort principles, see New York v. Shore Realty Corp., 759

F.2d 1032, 1044 (2d Cir.1985), we had thought that on

the issue of joint and several liability we were to take

our lead from evolving principles of common law. It

would seem incumbent upon the Agency, then, to demon-

strate that on this particular question of joint and several

liability, Congress intended for us to abandon the common

law.

Having said all that, we choose not to resolve the issue

in this case. Had appellants met their burden of showing

that the costs actually incurred by the state were capable

of apportionment, we would have had no choice but to

address the EPA’s theory. But because we do not believe

appellants have done so, we can, and do, choose to leave

the question for another day. We turn now to the EPA’s

first contention that the state’s removal costs are not

capable of apportionment.

Removal Costs

The state’s removal efforts proceeded in four phases

(0-3), each phase corresponding roughly to the cleanup

of a different trench. The trenches were located in dif-

ferent areas of the site, but neither party has told us

the distance between trenches. Appellants contend that it

is possible to apportion the state’s removal costs because

there was evidence detailing (1) the total number of bar-

lla

rels excavated in each phase, (2) the number of barrels

in each phase attributable to them, and (3) the total cost

associated with each phase. In support of their argument,

they point us to a few portions of the record, but for the

most part are content to rest on statements in the dis-

trict court’s opinion. Specifically, appellants point to the

following two sentences in the opinion: (1) “I find that

[American Cyanamid] is responsible for ten drums of

toxic hazardous material found at the site;” and (2) as

to Rohm and Haas, “I accept the state’s estimate [of 49

drums and 303 five-gallon pails].”” Appellants then add,

without opposition from the government, that the ten

barrels of American Cyanamid waste discussed by the dis-

trict court were found exclusively in Phase II, and that

the 303 pails and 49 drums of Rohm and Haas waste

mentioned by the court were found exclusively in Phase

III. They conclude, therefore, that American Cyanamid

should bear only a minute percentage of the $995,697.30

expended by the state during Phase II in excavating ap-

proximately 4,500 barrels and no share of the other

phases, and that Rohm and Haas should be accountable

for only a small portion of the $58,237 spent during Phase

III in removing roughly 3,300 barrels and no share of the

other phases. We disagree.

The district court’s statements concerning the waste

attributable to each appellant were based on the testimony

of John Leo, an engineer hired by the state to oversee

the cleanup. We have reviewed Mr. Leo’s testimony care-

fully. Having done so, we think it inescapably clear that

the district court did not mean to suggest that appellants

had contributed only 49 and 1 %arrels respectively, but

rather, that those amounts were all that could be posi-

tively attributed to appellants.

Mr. Leo testified that out of the approximately 10,000

barrels that were excavated during the four phases, only

“three to four hundred of the drums contained markings

which could potentially be traced.” This is not surprising

12a

considering that there had been an enormous fire at the

site, that the barrels had been exposed to the elements

for a number of years, and that a substantial amount of

liquid waste had leaked and eaten away at the outsides

of the barrels. Mr. Leo also testified that it was not

simply the absence of legible markings that prevented the

state from identifying the overwhelming majority of

barrels, but also the danger involved in handling the bar-

rels. Ironically, it was appellants themselves who, in an

effort to induce Mr. Leo to lower his estimate of the

number of barrels attributable to each defendant, elicited

much of the testimony concerning the impossibility of

accurately identifying all of the waste."

In light of the fact that most of the waste could not

be identified, and that the appellants, and not the govern-

ment, had the burden to account for all of this uncer-

tainty, we think it plain that the district court did not

err in holding them jointly and severally liable for the

state’s past removal costs. Perhaps in this situation the

only way appellants could have demonstrated that they

were limited contributors would have been to present spe-

cific evidence documenting the whereabouts of their waste

at all times after it left their facilities.. But far from

T Appellants contend that the state’s record keeping was subpar.

Mr. Leo testified that because a cleanup effort of this magnitude

had never before been undertaken in this country, it was natural

that the state made mistakes. He also intimated, however, that

there appeared to be little excuse for the state’s complete failure to

keep records during Phase I. We also are troubled by the state's

poor effort during this stage of the cleanup. Absent a finding that

the state acted in bad faith, however, we do not believe this is a

sufficient reason to reverse the district court. In the context of this

case, the state’s failure to document its work during Phase I was

harmless error since Mr. Leo testified that even when the state

made an effort to identify the barrels, it could rarely do so.

8 Appellants also might have proven that they were limited con-

tributors by documenting that they had generated only a small

amount of waste and then had ceased operations.

13a

doing so, appellants deny all knowledge of how their waste

made its way to the site.* Moreover, the government pre-

sented evidence that much of Rohm and Haas’ waste

found at the site came from its laboratory in Spring

House, Pennsylvania and that during the relevant years,

this lab generated over two thousand drums of waste, all

of which were consigned to a single transporter.'"® Under

these circumstances, where Rohm and Haas was entrust-

ing substantial amounts of waste to a single transporter

who ultimately proved unreliable, we simply cahnot con-

clude, absent evidence to the contrary, that only a hand-

ful of the 2,000 or more barrels reached the site."

II. Future Liability

The district court held appellants jointiy and severally

liable for all further removal costs taken by the state,

as well as for all necessary remedial actions. Appellants

have two principal objections. First, they claim that it

was error to hold them responsible for the removal of

certain piles of soil because the settling parties had

agreed to undertake this cost. The state represents to

*CERCLA is a strict liability scheme and it was therefore

possible to hold appellants liable without such knowledge.

1° Similar evidence was presented about American Cyanamid.

11 Even if it were possible to determine how many barrels each

appellant contributed to the site, we still would have difficulty

concluding that the state’s removal costs were capable of apportion-

ment. To apportion the cost of removing the over 10,000 barrels,

we would have to know the cost of removing a single barrel. Ap-

pellants have proceeded on the assumption that the cost of removing

barrels did not vary depending on their content. This assumption

appears untenable given the fact that the state had to take added

precautions in dealing with certain particularly dangerous sub-

stances, including those traceable to Rohm and Haas. Moreover, in

addition to excavating barrels the state had to remove large amounts

of soil. Because there was substantial commingling of wastes, we

think that any attempt to apportion the costs incurred by the state

in removing the contaminated soil would necessarily be arbitrary.

l4a

us that these parties have now taken care of the piles

and we therefore find the issue moot.

Second, appellants contend that it was improper to

hold them liable for future remedial action because the

state has not shown that such work will ever be needed.

They do not claim, however, that if remedial action is

shown to be necessary, it would be a mistake to assume

that their waste contributed to the damage. We see no

problem with the court giving the state (and EPA) time

to conduct further tests. If after conducting the neces-

sary tests, the government concludes that there was in

fact no harm to the area’s groundwater, then appellants

will have nothing to worry about. Moreover, the district

court ruled that under section 107 of the Act, the state

may take only such measures as are cost-efficient. Ap-

pellants, therefore, will have an opportunity to challenge

the state’s chosen remedial measures at the appropriate

time.

Conclusion

Appellants have argued ably that they should not have

been held jointly and severally liable. In the end, how-

ever, we think they have not satisfied the stringent bur-

den placed on them by Congress. As to all other issues,

we affirm substantially for the reasons set out by the

district court.’* Appellants should now move on to their

contribution action where their burden will be reduced

and the district court will be free to allocate responsi-

bility according to any combination of equitable factors

12 One of these other issues concerns the constitutionality of ap-

plying CERCLA retroactively. The district court held that CERCLA

may be applied to pre-enactment conduct. Appellants contend, how-

ever, that even if the statute may be applied to pre-enactment

conduct, it may not be applied constitutionally to pre-enactment

costs incurred by the government, in this case the costs associated

with Phases 0 and 1. We disagree and find persuasive the Eighth

Circuit’s reasoning in United States v. Northeastern Pharmaceutical

& Chemical Co., 810 F.2d 726, 734-37 (8th Cir. 1986) (citing cases).

15a

it deems appropriate. Indeed, there might be no reason

for the district court to place any burden on appellants.

If the defendants in that action also cannot demonstrate

that they were limited contributors, it is not apparent

why all of the parties could not be held jointly and

severally liable. However, we leave this judgment to the

district court. See, e.g., Developments, Toxic Waste Liti-

gation, 99 Harv.L.Rev. 1458, 1535-43 (1986).

Affirmed.

Costs to appellees.

16a

APPENDIX B

UNITED STATES DISTRICT COURT

D. RHODE ISLAND

Civ. A. No. 83-0787 P

JAMES E. O’NEIL, In his Capacity as Attorney General

of the State of Rhode Island

WARREN V. PICILLO, SR., et al.

March 8, 1988

Gary Powers, Asst. Atty. Gen., Providence, R.I., for

plaintiff.

Warren Picillo, Jr., pro se.

James H. Russell, Baker & Hostetler, Orlando, Fla.,

John Cuzzone, Jr., Richard Boren, Howard Lipsey, Provi-

dence, R.I., for Morton-Thiokol Corp.

Christopher Little, Providence, R.I., for Nat’l Starch

Corp.

Leif Sigmond, pro se.

S. Paul Ryan, Providence, R.I., William G. Ballaine,

Siff & Newman, New York City, C. Russell Bengston,

Richard T. Linn, Providence, R.I., for United Sanitation,

17a

Inc., Daniel Capuano, A. Capuano Bros., Inc., Jack

Capuano, Sanitary Landfill, Inc., and Anthony Capuano.

A. Lauriston Parks, James T. Murphy, Providence,

R.I., for Advanced Environmental Technology Corp.

Barbara §. Cohen, Anthony Muri, Providence, R.I., for

Monsanto Co.

Gregory L. Benik, Providence, R.I., for Olin Corp.

Dominick Presto, Presto & Barbire, Rutherford, N.J.,

for Scientific Control Processing & Scientific Environ-

mental Control Systems.

John F. Bomster, David J. Oliveira, Providence, R.I.,

for Hydron Lab.

Deming S. Sherman, Providence, R.I., for Exxon Re-

search & Engineering Co., Rohm & Haas Co., American

Cyanamid Co.

Alden C. Harrington, Providence, R.I., for Warren

Picillo, Jr.

Harold E. Krause, Providence, R.I., for Michael

Musillo.

Harold Hestnes, Hale & Dorr, Boston, Mass., Benjamin

B. White, III, Providence, R.I., for GAF.

John F. Dolan, Rice Dolan & Kershaw, Dean Temkin,

Willey & Leroy, Providence, R.I., Richard Ricci, Roseland,

N.J., for Rutgers University.

John Baglini, Providence, R.I., for M & T Chemicals.

Richard Galli, Providence, R.I., for Hydron Labora-

tories, Inc.

Robert Canty, Csaplar & Bok, Boston, Mass., for

Hercules, Inc.

Charles D. Wick, Providence, R.J., for Mack Barnes.

18a

OPINION

PETTINE, Senior District Judge.

The State of Rhode Island (“State”) seeks to hold the

defendants jointly and severally liable for one million six

hundred and thirteen thousand four hundred and thirty-

seven dollars and thirty cents ($1,613,437.30) it expended

in cleaning up a hazardous waste site in Coventry, Rhode

Island known as the Picillo Pig Farm; it also asks this

Court to declare that the defendants must respond in

damages for all remedial costs it may incur in the future

in the investigation and remediaton of damages to the

State’s natural resources allegedly resulting from the

waste disposal by these defendants at said site.

The action is brought pursuant to the Comprehensive

Environmental Response Compensation and Liability Act

of 1980 (“CERCLA”) as amended by the Superfund

Amendments and Reauthorization Act of 1986 (“SARA”)

42 U.S.C. sections 9601-9675.

The complaint originally named thirty-five defendants

who were either owner/operators of the site, parties who

allegedly transported waste there, parties alleged to have

arranged for their waste to be transported to the site,

and parties alleged to have produced waste deposited at

the site. However, on the day designated for trial, the

State and the United States Environmental Protection

Agency (“EPA’’), a non-party, settled with all the de-

fendants except Olin Corporation (“Olin”), Hydron

Laboratories, Inc. (“Hydron’”’), American Cyanamid Com-

pany (“American Cyanamid’’), Exxon Research and En-

gineering Company (“Exxon”), and Rohm & Haas Com-

pany (“Rohm & Haas’). The settlements totaled 5.8

million dollars and included various agreements to per-

form specific remedial action. The State has represented

that it will receive 25 percent of the settlement with the

remaining 75 percent going to the federal agency.

19a

These remaining defendants claim that the State has

failed to prove that the materials in question were haz-

ardous; they also argue that joint and several liability

which the State seeks to impose is not appropriate in this

case, and that they have the right to interpose several

defenses, equitable and legal, which preclude recovery

against them.

For the reasons which follow, I find for the plaintiff.

Prolixity is not a commendable hallmark of a legal

opinion; the extent of the footnotes here indicate this

paper deserves just such an unenviable stamp. In the

margin I have substantially quoted from prior opinions

rendered in this case; I do so because they set forth the

dispositive law of vital legal issues and so I incorporate

the same as part of this ruling. Colloquy took place

throughout the trial as though certain of these issues had

not been rendered; none of it was meaningful enough to

cause me to change my position.

I. FACTUAL BACKGROUND

As an overall, with greater specificity being recited at

appropriate points in the discussion of the legal issues,

I repeat what I stated in my Opinion and Order of

November 20, 1986, Violet v. Picillo, 648 F.Supp. 1283

(D.R.1.1986) ruling on Olin’s Motion for Summary

Judgment:

This case arises from the chemical catastrophe of

the Picillo pig farm in Coventry, Rhode Island. State

environmental authorities discovered this chemical

wasteland in 1977 after combustible chemicals caused

a dramatic explosion and towering flames to rip

through the waste disposal site. After the fire, state

investigators discovered large trenches and pits filled

with free-flowing, multi-colored, pungent liquid

wastes; they also excavated approximately 10,000

20a

barrels and containers in varying states of decay

containing hazardous chemical wastes.

Id. at 1286.

In this case, the plaintiff claims the following materials

found at the site were specifically traced to the defend-

ants: 303 five-gallon cans and 49 fifty-five gallon drums

to Rohm & Haas; 21 fifty-five gallon drums to Hydron;

15 fifty-five gallon drums to Exxon; 3 fifty-five gallon

lab packs and 11 fifty-five gallon drums to Olin; and 10

fifty-five gallon drums to American Cyanamid.

II. JURISDICTION

In the pre-trial stages of this action, defendants Exxon

and Hydron filed motions for dismissal pursuant to Fed.

R.Civ.P. 12(b) (2) for lack of in personam jurisdiction.

Each disavowed any knowledge of how waste allegedly

generated by them came to rest at the Picillo site, and

each claimed to lack any significant links to the state of

Rhode Island independent of the present litigation. In

Violet v. Picillo, 6138 F.Supp. 1563 (1985), I set forth a

lengthy and detailed discussion of the jurisdictional as-

pects of this case and I repeat the same here in the

margin.’ I concluded by saying: ;

1 Rule 4(f) of the Federal Rules of Civil Procedure provides in

pertinent part that:

All process other than a subpoena may be served anywhere

within the territorial limits of the state in which the district

court is held, and, when authorized by a statute of the United

States or by these rules, beyond the territorial limits of that

state.

Under the framework created by the Rules, the jurisdictional reach

of a federal district court is coextensive with that of the courts

of the state in which it sits, unless a specific federal statute, or

separate rule, permits nationwide service of process. See generally

Johnson Creative Arts v. Wool Masters, 743 F.2d 947, 950 (ist

Cir. 1984); 4 Wright & Miller, Federal Practice and Procedure

section 1125 (1969 & 1984 supp.).—No separate Rule applies here.

[Continued }

2la

1 [Continued] ’

The inquiry, thus, is whether CERCLA is such an authorizing

statute.

The state offers two theories in support of its claim that CERCLA

authorizes federal process to run throughout the nation. It argues

first that CERCLA’s express terms supply the required authority,

and alternatively that implying such a provision is necessary to

effectuate the statutory purposes.

Turning first to the state’s textual argument, I find that CERCLA

is altogether silent as to personal jurisdiction and service of process,

and find that the language of the statute will not bear plaintiff’s

contrary interpretation. Section 9613(b), subtitled “Jurisdiction;

venue,” provides:

Except as provided in subsection (a) of this section, the

United States district courts shall have exclusive original ju-

risdiction over all controversies arising under this chapter,

without regard to the citizenship of the parties or the amount

in controversy. Venue shall lie in any district in which the

release or damages occurred, or in which the defendant resides,

may be found, or has his principal office. For the purposes of

this section, the Fund shall reside in the District of Columbia.

42 U.S.C. section 9613(b). In urging that this section authorizes

national service of process, the state appears to confuse subject

matter jurisdiction with personal jurisdiction. The language con-

ferring exclusive original jurisdiction in the federal district courts

“without regard to the citizenship of the parties or the amount

in controversy”—language seized upon by the state—is relevant

to subject matter jurisdiction in actions brought under the statute.

Consistent with the language of Article III of the Constitution, and

established canons of federal jurisdiction, the effect of this sentence

is simply to place actions brought under CERCLA within the fed-

eral courts’ federal question, and not diversity, jurisdiction. It

strikes the Court as too clear to require further articulation that

this language does not purport to govern questions of personal

jurisdiction.

And, while the presence of language in section 9613 regarding

venue demonstrates that Congress saw fit to fashion special venue

rules for CERCLA actions, the absence of any parallel language

regarding nationwide service of process suggests to the Court that

Congress provided no special! rule for personal jurisdiction. This is

especially apparent in the face of the fact that the numerous other

federal statutes authorizing nationwide service of process typically

contain clear and express language extending the jurisdictional

reach of the federal courts. See, e.g., 15 U.S.C. section 5 (actions

22a

by United States under Sherman Antitrust Act); 15 U.S.C. section

25 (actions by United States under Clayton Act); 15 U.S.C. section

77v(a) (actions under Securities Act of 1933); 15 U.S.C. section

78a (actions under Securities Exchange Act of 1934); 28 U.S.C.

sections 1335, 1397, 2361 (actions under federal interpleader act).

It is true that express statutory language is not an absolute sine

qua non for finding nationwide service of process, for courts have

occasionally implied such authority in the absence of clear lanugage.

See, e.g., United States v. Congress Construction Co., 222 U.S. 199,

32 S.Ct. 44, 56 L.Ed. 163 (1911); F.T.C. v. Browning, 425 F.2d 96

(D.C.Cir. 1970). In these cases, however, and others that followed

their teachings, the federal statutes involved laid venue in only one

district, such that a failure to imply authority for extra-territorial

process would deprive any federal court of the power to adjudicate

cases under the statute, absent the fortuitous circumstance that a

defendant enjoyed the necessary minimum contacts with the sole

district in which venue was proper. No similar problem is posed

here, for CERCLA lays venue “in any district in which the release

or damages occurred, or in which the defendant resides, may be

found, or has his principal office,” 42 U.S.C. section 9613(b). The

state has not cited, and the Court has not discovered, any case in

which nationwide service of process was implied where venue was

not laid exclusively in one district. Nor has the state cited, or the

Court discovered, any direct reference in the Act’s legislative

history to personal jurisdiction in CERCLA actions, or to con-

gressional contemplation of a special rv‘e of national jurisdiction.

Nonetheless, plaintiff’s belief that a nationwide service of process

provision must be implied in CERCLA to further the statute’s aims

is not without strong appeal. Without analyzing the statutory

scheme with any precision, it is clear that CERCLA’s principal

purpose is “to initiate and establish a comprehensive response and

financing mechanism to abate and control the vast problems associ-

ated with abandoned and inactive hazardous waste sites.” H.R.

Rep. No. 96-1016, Part I, 96th Cong., 2d Sess., at 22 (reprinted in

1980 U.S.Code Cong. & Ad. News 6119, 6125, (hereinafter “1980

U.S.C.C. & A.N.”). In service of its goal, Congress created, by

last minute compromise in the waning hours of the 96th Congress,

a “Superfund,” to be jointly financed by industry and the federal

government, to provide a ready source of financing for prompt

clean-up of waste sites, 42 U.S.C. sections 9631, 9632, 9641; see

1980 U.S.C.C. & A.N., supra, at 6134-6135. Congress also created,

inter alia, a federal cause of action in strict liability, through which

owner-operators of hazardous waste sites, as well as disposal and

transport arrangers, and generators of waste, 42 U.S.C. section

28a

9607 (a) (1)-(4), are made liable, subject only to limited statutory

defenses, id. at section 9607(b) (1)-(4), for removal, remedial and

response costs, id. at section 9607(a) (4) (A)-(B), and for certain

specified environmental damages, id. at section 9607(a) (4) (C),

when “there is a release, or a threatened release which causes the

incurrence of response costs, of a hazardous substance,” id. at sec-

tion 9607 (a) (4).

Placing CERCLA in the context of its purposes, it is anomalous,

indeed, to conclude that Congress meant to allow CERCLA defen-

dants to interpose personal jurisdiction defenses. This is so for at

least three reasons.

First, allowing CERCLA defendants to invoke the traditional

minimum contacts doctrine, which looks largely to the extent to

which a nonresident has chosen to affiliate itself with a particular

forum, see, e.g., Worldwide Volkswagen Corp. v. Woodson, 444 U.S.

286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980), or at least with

the stream of interstate commerce, id. at 297-98, 100 S.Ct. at 567,

is at odds with the substantive liability provisions of the Act. Un-

der the latter provisions, liability may generally attach to a de

fendant who has itself taken no deliberate action with respect to

a particular site, but whose activities contributed to the release

of hazardous substances at that site. The purpose of this “very

stringent standard of liability,” U.S. v. Price, 577 F.Supp. 1103,

1114 (D.N.J. 1983), is to further Congress’ stated goals of “cost-

spreading and assurance that responsible parties bear the cost of

their clean up,” id. at 1114; see 1980 U.S.C.C. & A.N. at 6119-6120;

126 Cong.Rec. $15,003 (daily ed. Nov. 24, 1980) (remarks of Sen.

Chafee).

Bringing waste generators within the ambit of the Act’s lia-

bility provisions was, as a practical matter, an especially important

part of CERCLA’s objective of appropriate cost allocation. The

legislative history of CERCLA indicates that the Environmental -

Protection Agency estimated in 1980 that perhaps only ten percent

of the 77.1 billion pounds of waste annually generated are disposed

of in an environmentally sound manner. 1980 U.S.C.C. & A.N. at

6124. Calling waste generators to account for the consequences

flowing from the disposal of their toxic waste products, generally

without regard to whether they were themselves directly at fault

in disposing of their wastes, represents a congressional decision

to look for compensation to those economic actors who have par-

ticipated in, and benefited from, an industry historically pervaded

by irresponsible practices at various levels in the chain of disposal.

See, e.g., 1980 U.S.C.C. & A.N. at 6120 (discussing “massive prob-

lem” of “tragic consequences of improperly, negligently, and reck-

24a

lessly [sic] hazardous waste disposal practices”) ; id. at 6121 (Con-

gressional finding that “{ulnsafe design and disposal methods are

widespread”); id. at 6128 (Congressional finding that “improper

hazardous waste disposal has occurred throughout the country

[and] the locations of many hazardous waste sites are unknown”) ;

126 Cong.Rec. $14,963 (daily ed. of Nov. 24, 1980) (remarks of

Sen. Randolph) (discussing history of disposal practices and fact

that numerous generators used haulers “to take wastes to unknown

locations”).

Significant among the pervasive industrial practices recognized

by Congress is the problem of dumping wastes at improper, illegal

or inappropriate sites, and the associated problem of “midnight,”

or clandestine dumping of chemical wastes at abandoned, remote or

hidden locations. See, e.g., 1980 U.S.C.C. & A.N. at 6121-22 (de

scribing various practices at selected sites) ; 126 Cong.Rec. $14,973

(daily ed. Nov. 24, 1980) (remarks of Sen. Tsongas) (describing

practices of “‘midnight dumpers’ who dispose of toxic chemicals

and hazardous materials in quarries, in streams, in forests, or

spread them on open roads .. .”); id. at 14,973 (remerks of Sen.

Ford). And, legislators recognized that the problem of “midnight

dumping” frequently involves waste that is transported over state

lines. See, e.g., 126 Cong.Rec. H9,461 (daily ed. Sept. 23, 1980)

(remarks of Rep. Martin) (“because of the nature of clandestine

dumping operations [a] State . .. which does not generate a large

volume of toxic waste, has been victimized as a dumping ground

for waste from other States”) ; 126 Cong.Rec. H11,798 (remarks of

Rep. Edgar) (daily ed. Dec. 3, 1980) (“ ‘midnight dumpers’ [have]

trucked wastes from all over the Eastern Seaboard and dumped

them illegally at various sites through [Pennsylvania]"); 126

Cong.Rec. H9,448 (remarks of Rep. LaFalce) (daily ed. Sept. 23,

1980) (noting interstate scope of problem). This unfortunate

history attests to the existence of a vast, unmonitored secondary

toxic disposal market—one which, according to CERCLA’s legis-

lative history, weaves across state lines and reaches to every corner

of this nation.

In the face of such a history, it is surely reasonable to assume

that CERCLA actions may often involve generator defendants who

arrange with an intermediary for waste disposal, and who lack

direct knowledge as to how their waste may have to come to arrive

in a foreign state—and lack, as well, independent contacts with

that state. It thus strikes the Court as incongruous to permit de-

fendants to seek dismissal upon a showing that they did not delib-

erately affiliate themselves with a particular forum state. And while

25a

defendants in this case rightly point out that amenability to suit

in a particular forum should not be confused with liability under

the Act, the factors I discuss below suggest that there is an espe-

cially peculiar inconsistency between jurisdictional and liability

rules in the case at hand.

Second, if the party suing to recover response costs and damages

for cleaning up a single site is forced to bring several actions, in

several states, in order to reach all those whose products may have

been dumped at that site (but who may have few or no other con-

tacts with the state), the increased litigation costs will obviously

diminish that party’s ultimate recovery and undermine the com-

pensatory purposes of the statute. This is especially so where, as

here, a state government, and not the EPA, is the party plaintiff,

for states obviously lack the national litigation capacity of the

federal government. Indeed, state governments faced with the

prospect of maintaining multiple actions in multiple states may well

forego suit against foreign defendants who cannot be haled into

the forum. Reducing or eliminating the recovery available to states

under CERCLA would be especially unfortunate because, as Con-

gress recognized, it is state and local governments who have been

historically saddled with the costs of cleaning up abandoned sites

where no solvent owner can be found. See 1980 U.S.C.C. & A.N.,

at 6123. And, even where the federal government is suing, the

increased costs of multiple lawsuits will necessarily diminish the

amount of its recovery, and will consequently diminish the sum

available to replenish the Superfund. See 1980 U.S.C.C. & A.N.

at 6186 (“[t)he purpose of [the Act’s liability provisions] is to

provide a mechanism for prompt recovery of monies expended for

the costs of such action from the [Superfund] from persons re-

sponsible therefor . . .”); Note, Generator Liability Under Super-

fund for Clean-Up of Abandoned Hazarous Waste Dumpsites, supra,

at 1232 (discussing importance, in statutory scheme, of replenish-

ing the Superfound).

Third, in CERCLA actions in which muitiple defendants are

involved, there will invariably be—as there are in this case—

numerous cross-claims among the defendants, and litigation as to

the proper scope of joint and several liability, see State of New

York v. Shore Realty, 759 F.2d 1032, 1042 and n. 1 (2nd Cir. 1985)

(discussing judicial role in formulating rules governing joint and

several liability under the Act); contribution, indemnification, see

42 U.S.C. section 9607(e); and the like. If some defendants are

not subject to the jurisdiction of the court in which the main

action is brought, however, and fractionated proceedings in other

26a

states ensue, the proper resolution of these issues will inevitably

be complicated and impeded.

As these observations suggest, I am of the view that a rule of

nationwide service of process under CERCLA has much to commend

it, and would be the rule most consistent with Congress’ objectives.

I am also mindful, however, that the decision whether to allow

extraterritorial process is for the Congress, and not the courts,

to make. For this is not simply a case of statutory construction

where it falls to a court to interpret statutory ambiguity, or silence,

in the manner suggested by the statute’s legislative history and

its purpose. Rather, by virtue of the approach prescribed by the

Federal Rules of Civil Procedure regarding personal jurisdiction in

federal question cases, this is an instance where congressional

silence is assigned a presumptive meaning—namely, that the fed-

eral district court will observe the territorial limits of the re

spective states in which they sit. Absent any compelling reason to

inquire further, as was present in the cases involving statutes that

laid venue in only one district, I am constrained to find that Con-

gress has not authorized nationwide service of process in CERCLA

actions. In reaching this result, I am in accord with the Magis-

trate’s decision, and with the only other federal decision of which

I am aware on this question. See Wehner v. Syntexr Agribusiness,

No. 83-642 (E.D.Mo. April 1, 1985), at 2 (concluding without

discussion that CERCLA “does not authorize nationwide service

of process”).

B. Minimum Contacts

The absence of a rule authorizing national jurisdiction does not,

of course, end the inquiry. I must next decide whether, under

governing standards of personal jurisdiction, the four defendants

before me are subject to the jurisdiction of a Rhode Island court.

Whether this Court has jurisdiction over the . . . defendants

depends upon whether it would comport with the “traditional no-

tions of fair play and substantial justice,” /nternational Shoe Co.

v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95

(1945) (citations omitted), rooted in the due process clause of the

Fourteenth Amendment, to compel these parties to defend this liti-

gation here. Because Rhode Island has extended its longarm stat-

ute to the extent permitted by the federal Constitution, R.I.G.L.

section 9-5-33; see Roger Williams General Hospital v. Fall River

Trust Co., 423 A.2d 1384 (R.I. 1981), there are no separate state

statutory requirements for the exercise of jurisdiction. The fun-

damental question here is, thus, whether “the-defendant’s con-

27a

duct and connection with the forum State are such that he should

reasonably anticipate being haled into court there.” World-Wide

Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567,

62 L.Ed.2d 490 (1980). In judging whether sufficient minimum

contacts exist to make an exercise of jurisdiction reasonable, “a

court properly focuses on ‘the relationship among the defendant,

the forum and the litigation.’” Calder v. Jones, 465 U.S. 783, 104

S.Ct. 1482, 1486, 79 L.Ed.2d 804 (1985) (quoting Shaffer v. Heit-

ner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2579, 53 L.Ed.2d 683 (1977) ).

By way of guidance to courts charged with the task of evaluating

this critical relationship, the Supreme Court has further explained

that:

Implicit in this emphasis on reasonableness is the under-

standing that the burden on the defendant, while always a

primary concern, will in an appropriate case be considered in

light of other relevant factors, including the forum State’s

interest in adjudicating the dispute, see McGee v. International

Life Ins. Co., 355 U.S. 220, 223, 78 S.Ct. 199, 201, 2 L.Ed.2d

223 (1957); the plaintiff's interest in obtaining convenient and

effective relief, see Kulko v. Californa Superior Court, supra,

436 U.S. [84] at 92, 98 S.Ct. [1690] at 1697 [56 L.Ed.2d 132

(1978) | at least when that interest is not adequately pro-

tected by the plaintiff’s power to choose the forum, cf. Shaffer

v. Heitner, 433 U.S. 186, 211, n. 37, 97 S.Ct. 2569, 2583, n. 37,

53 L.Ed.2d 683 (1977); the interstate judicial system's inter-

est in obtaining the most efficient resolution of controversies;

and the shared interest of the several States in furthering

fundamental substantive social policies, see Kulko v. California

Superior Court, supra, 436 U.S., at 98, 98, 98 S.Ct., at 1697,

1700.

World-Wide Volkswagen v. Woodson, supra, 444 U.S. at 292, 100

S.Ct. at 564.

Determining whether, upon application of these general princi-

ples, it is “fair’’ and “reasonable” to subject defendants .. . to

the jurisdiction of this Court, raises novel and difficult questions.

Although a body of law has developed to guide courts in deciding

jurisdictional questions where a nonresident manufacturer, dis-

tributor or merchant of a product is sued for injuries caused by

the product in the forum state, see generally World-Wide Volks-

wagen, supra; 4 Wright & Miller, Federal Practice and Procedure,

section 1067, at 28-44 (1984 Supp.), I have discovered few cases

applying these principles to nonresident generators, transporters

or handlers of hazardous waste products, who are called to answer

28a

in the forum state for damage caused by the disposal of their

wastes there. Believing that the precedents dealing with product

manufacture and sales nonetheless offer the closest analogy, I look

primarily to those cases for guidance.

In World Volkswagen the Court held that Oklahoma could not

predicate jurisdiction over a New York automobile dealer and a

New York automobile distributor (whose market was confined to

New York, New Jersey and Connecticut), upon the fact that a car

sold by these parties in New York was driven to Oklahoma and was

involved in an accident there. Given the fact that these defendants

had a “total absence of affiliating circumstances” with Oklahoma

444 U.S. at 294, 100 S.Ct. at 565, and had in no way sought, them-

selves or “indirectly, through others,” id., to serve the Oklahoma

market, the Court held that it would violate due process to base

jurisdiction on such a single fortuitous circumstance. If merchants

serving only a limited market were subject to suit wherever a

product sold by them happened to be taken and cause injury,

“Telvery seller of chattels would in effect appoint the chattel his

agent for service of process. His amenability to suit would travel

with the chattel,” id. at 296, 100 S.Ct. at 566.

The Court in the World-Wide Volkswagen case was not directly

confronted with the question whether jurisdiction in the action was

proper over the international and national distributors of the car

involved in the accident, for those parties, while defendants in

that case, did not contest their amenability to suit. In dictum,

however, the Court contrasted the situation of such distributors

with that of local seller, and made clear that jurisdiction could be

asserted over these distributors, explaining:

if the sale of a product of a manufacturer or distributor such

as Audi or Volkswagen is not simply an isolated occurrence,

but arises from the efforts of the manufacturer or distributor

to serve directly or indirectly, the market for its product in

other States, it is not unreasonable to subject it to suit in one

of those States if its allegedly defective merchandise has there

been the source of injury to its owner or to others. The forum

State does not exceed its powers under the Due Process Clause

if it asserts personal jurisdiction over a corporation that de-

livers its products into the stream of commerce with the ex-

pectation that they will be purchased by consumers in the

forum State. Cf. Gray v. American Radiator & Standard Sani-

tary Corp., 22 Ill.2d 432, 176 N.E.2d 761 (1961).

Id. at 297-298, 100 S.Ct. at 567. As subsequent courts developing

this pivotal distinction have explained, the key factors justifying

a different jurisdictional rule are twofold.

[ Continued }

29a

1 [Continued ]

First, unlike local merchants, such interstate distributors have

an “interest in reaching as broad a market as” possible, Bean

Dredging Corp. v. Dredge Technology Corp., 744 F.2d 1081, 1085

(5th Cir. 1984) and place their products into the stream of com-

merce with either the subjective intention, see, e.g., Stabilisierungs-

fonds Fur Wein v. Kaiser, 647 F.2d 200, 203 (D.C.Cir. 1981), or

objective reason to know, see, e.g., Oswalt v. Scripto, 616 F.2d 191,

200-201 (5th Cir. 1980) that their products will be sold “to a nation-

wide market, that is, in any or all states,” id. at 200. Thus, even

if their “products were sold indirectly through importers or dis-

tributors with independent sales and marketing schemes,” DeJames

v. Magnificence Carriers, Inc., 654 F.2d 280, 285 (3d Cir.), cert.

den., 454 U.S. 1085, 102 S.Ct. 642, 70 L.Ed.2d 620 (1981), (citations

omitted)—independent parties whom the defendant distributors

do not directly control, Nelson by Carson v. Park Industries, 717

F.2d 1120, 1126 (7th Cir. 1983),. cert. den. 465 U.S. 1024, 104

S.Ct. 1278, 79 L.Ed.2d 682 (1984)—and even if their products are

sold to an intermediary with “ ‘no indication whatsoever as to

their ultimate destination,’” Bean Dredging Corp. v. Dredge Tech-

nology Corp., supra, 744 F.2d at 1085 (quoting party’s brief),

the fact that these manufacturers or distributors place their prod-

ucts in a stream of commerce destined for sale through a broad

interstate market, and reap the attendant benefits, renders them

properly subject to suit in one of the states comprising that market.

The second important distinguishing factor is that, unlike local

merchants serving a self-circumscribed market, who “ordinarily

[have] no control over where the buyer takes the product after it

is sold,” Comm. of Puerto Rico v. S.S. Zoe Colcotroni, 628 F.2d 652,

669 (1st Cir. 1980), cert. den. 450 U.S. 912, 101 S.Ct. 1350, 67

L.Ed.2d 336 (1981), parties operating on a broad interstate scale

can act “to limit the states in which [their products will] be sold,”

Bean Dredging Corp., supra, 744 F.2d at 1085, and can thereby

protect themselves against suit in an undesired forum. See World-

Wide Volkswagen v. Woodson, supra, 444 U.S. at 297, 100 S.Ct. at

567 (potential defendants can “structure their primary conduct

with some minimum assurance as to where that conduct will and

will not render them liable to suit’) ; Oswalt v. Scripto, supra, 616

F.2d at 200 (distributor could have limited the states in which its

products would be sold); Rockwell International Corp. v. Costruz-

iont Aeronautiche, 553 F.Supp. 328, 333 (E.D.Pa. 1982) (manu-

facturer could have limited the states in which its products would

be sold).

Applying these teachings to the case before me, I find that

jurisdiction is proper over ... Hydron. Although those defendants

80a

attempt to liken themselves to the local sellers in these products

liability cases, on the record before me, defendants are more prop-

erly analogized to the interstate distributors and manufacturers. I

fully recognize that applying these principles to generators of

hazardous wastes requires some extension of these principles beyond

the context in which they were originally developed, but I believe

that such an extension is warranted, indeed required, here.

The factual circumstances present here strongly indicate that...

defendant should have known, if it did not, in fact know, that it

was dispatching its hazardous chemical wastes into a stream of

commerce broad enough to include “any or all states,” Rockwell

Intern. Corp. v. Costruzioni Aeronautiche, supra, 553 F.Supp. at

333 (emphasis in original). In substance, what. . . defendant did

was to place its wastes in the hands of an intermediary—one who,

according to the record, quite literally operated in mofe than one

state—with no reasonable expectation as to where these materials

were destined for disposal, and with no attempt to specify the

location, or even the state, in which its wastes were to be disposed.

This chosen course of conduct must be viewed in the context of a

hazardous waste disposal industry recognized by Congress to be

permeated, on a national scale, by problems of improper waste

disposal, and in particular by problems of dumping wastes—fre-

quently taken across state lines—at illegal, inappropriate or re-

mote sites. When so viewed, each defendant’s decision to send its

toxic wastes on a virtual one-way journey to anywhere represents

a decision to avail itself of the benefits of a potentially boundless

national disposal market.

Certainly, benefits flowed to the defendant[] as a result of [its]

chosen means of disposing of [its] wastes. [It] transferred from

[itself] to a third party the burdens of properly transporting

and locating hazardous waste for disposal, and of ensuring safe

and environmentally sound disposal. Because disposal of wastes

that are the by-products of defendants’ commercial (or research)

activities is a necessary predicate for continued activity, the

benefits of these transferred burdens are significant. To be sure,

the benefits inuring to these waste generators are not precisely

like in kind to those enjoyed by the ordinary interstate distribu-

tor or manufacturer, whose profits grow as its market enlarges,

and who seeks deliberately to reach as broad a market as pos-

sible. Yet, while these generator defendants may not have had

a discrete commercial interest in spreading their toxic wastes

through as broad a disposal network as possible, there can be

no doubt, and Congress recognized as much, that the continued

3la

availability, and expansion, of a secondary, substandard disposal

market has carried economic benefit for the industry as a whole.

Moreover, this is not a situation in which the product placed in

the stream of commerce is an ordinary one. Rather, these defend-

ants dispatched into that stream volatile and dangerous toxic

substances—-and did so without determining where these substances

would come to rest. As other courts have recognized, and as com-

mon sense suggests, where a defendant deals in such inherently

dangerous products, a lesser showing than is ordinarily required

will support jurisdiction. See Poyner v. Erma Werke GMBH, 618

F.2d 1186, 1192 (6th Cir. 1980); Velandra v. Regie Nationale Des

Usines Renault, 336 F.2d 292, 298 (6th Cir. 1964); cf. Valve En-

gineering Co. v. Gisell, 140 Ga.App. 44, 230 S.E.2d 29 (1976). This

is especially so where, as here, the defendant(s) engage[d] in

heavily regulated activities, such that it is reasonable for [it] to

foresee, given their chosen course of conduct, having to litigate

in a distant forum. See generally G.R.M. v. Equine Inv. and Man.

Group, 596 F.Supp. 307, 317 (S.D.Tex. 1984).

Nor [was] defendant(s) powerless to protect [itself] from hav-

ing to litigate in Rhode Island. Rather than engaging an inter-

mediary, and giving that intermediary what appears on this record

to be complete discretion in locating its wastes for disposal, [the]

defendant could have handled its own waste. Alternatively, [it]

could have selected, or participated in selecting, a disposal site,

could have contractually required that its wastes be disposed there,

and could have acted to ascertain that its waste was, in fact,

finally deposited_at this predetermined site. By choosing, instead,

an open-ended course, the defendant(s), like the interstate dis-

tributors and manufacturers in the previously discussed cases,

did not take steps, as [it] could have, so as to “be reasonably cer-

tain that [it] would not be haled into court in an undesired forum.”

Comm. of Puerto Rico v. S.S. Zoe Colcotroni, supra, 628 F.2d at

670 (insurer with no direct business contacts in Puerto Rico is

subject to jurisdiction there in suit for environmental damage

caused by tanker oil spill, where it chooses to insure vessels that

travel to Puerto Rico; “[b]y limiting its coverage to specified

jurisdictions, [the insurer] could be reasonably certain it would

not be haled into court in an undesired forum... an insurer is not

at the mercy of the insured owner’s unilateral choice of destinations

in the same way a seller of chattels is at the mercy of the buyer”).

Without regard to whether any state or federal law required [it]

to undertake such steps—a question I need not and do not con-

sider—I find that having failed to structure [its] primary conduct

32a

to provide [itself] with minimal assurance as to where [it] would

be compelled to defend hazardous waste litigation, defendant(s)

may not now reasonably claim unfair surprise or undue burden in

being called to answer in a state where [its] hazardous substances

are alleged to have caused harm.

This conclusion is buttressed by the fact that all of the other

factors enumerated by the World-Wide Volkswagen court as bearing

on the reasonableness of jurisdiction strongly favor a Rhode Island

forum.

Certainly Rhode Island’s interest in adjudicating this suit could

hardly be more compelling. In addition to the state’s recogwized

“significant interest in redressing inquiries that actually occur

within the State,” Keeton v. Hustler Magazine, 465 U.S. 770, 104

S.Ct. 1473, 1479, 79 L.Ed.2d 790 (1984), Rhode Island has an

extraordinarily strong sovereign interest in providing a forum

for actions concerning injury to land within its borders, and for

actions which seek recovery of public monies expended to protect

such land. Likewise the interest of the plaintiff state government

“in obtaining convenient and effective relief,” World-Wide Volks-

wagen, supra, 444 U.S. at 292, 100 S.Ct. at 564, fairly depends upon

its being able to litigate this action in a single forum. In such

multiparty, potentiaily labrynthine litigation, it will no doubt sub-

stantially burden the state to force it to proceed in parallel or

piecemeal actions—and doubly so in light of the limited litigation

resources available to a state government.

The interests of “the interstate judicial system . . . in obtaining

the most efficient resolution of” this dispute, id., would plainly be

served by a single adjudication of the questions raised here—all of

which pertain to the same series of events at the Picillo farm. Given

the matrix of cross-claims and defenses raised, and likely to be

raised here, see Infra, at 723-724, considerations of economy and

justice alike weigh heavily in favor of a Rhode Island forum... .

Lastly, the several states of this nation surely share an im-

portant substantive interest in furthering policies designed to

mitigate the wide-spread effects of improper management and

disposal of hazardous chemical wastes. Each state’s ability to

utilize its own legal tools in this area, as well as those provided

by the federal government, depends significantly on each state’s

ability to reach parties whose disposal activities have harmed its

environment and its population. Because state (and local) trea-

suries have shouldered the greatest financial burden in cleaning up

toxic waste sites where no solvent responsible party is locally

RN Sc AOE Sy Ae ELBA LB Tit «ve is PBR Ai 2 mth wet gb

33a

I emphasize that only a prima facie showing of

jurisdiction has been made here... .

the final determination of the key fact issues bearing

on jurisdiction over the person will be made at trial.

If they are decided in a way that defeats jurisdiction

as to [any] defendant, as to that defendant plaintiff’s

action will then be subject to dismissal for want of

jurisdiction over the person.

Id. at 1579 n. 17 (citing North American Video v. Leon,

480 F.Supp. 213, 216 (D.Mass.1979) ).

Hydron renews its motion post-trial nourished by the

testimony of David Rappaport, a director and Vice Presi-

dent (legal) ; he testified that: a

Hydron was a Delaware corporation;

Its principal place of business in 1977 was New

Brunswick, New Jersey;

It never had any other principal place of business,

or any other place of business;

It has never had an office in Rhode Island; To his

knowledge, and based on a search of Hydron’s rec-

ords the only contact with the State of Rhode Island

was the delivery in 1976, by mail, of a free sample

of one ounce of a chemical to a Rhode Island firm

which had requested that the sample be sent;

Hydron did not sell or ship any other products into

the State of Rhode Island;

Hydron never qualified to do business in Rhode

Island;

It never nominated any agent for service of process

in Rhode Island.

It placed no ads in Rhode Island.

available, there can be no doubt that this shared substantive in-

terest is a powerful one.

Accordingly, for the foregoing reasons, I hold that a prima facie

showing has been made that defendants . . . are properly subject

to the jurisdiction of this court.

34a

In Violet, ruled that non-resident generators of hazardous

wastes were akin to national distributors who placed their

products into the stream of commerce through intermedi-

aries. 613 F.Supp. at 1576. I held that because these

generators “should have known, if [they] did not, in fact

know, that it was dispatching its hazardous wastes into a

stream of commerce broad enough to include any and all

states” it did not offend due process to subject them to

suit in one of the states comprising its “market.” Jd. at

1576-77 (citations omitted).

I am not diverted from my original holding by Hydron’s

proffered evidence. The analysis of jurisdiction in Violet

was premised upon a theory of specific judisdiction. See

id. at 1575 n. 12. A court exercises specific jurisdiction

when the plaintiff’s claims “arise out of” or are “directly

related” to defendant’s contacts with the forum state.

DuPont Tire Serv. v. North Stonington Auto-Truck Pl.,

Inc., 659 F.Supp. 861, 863 (D.R.1.1987) (J. Lagueaux).

- General jurisdiction, however, arises where plaintiff’s

claims do not arise out of or are not directly related to

defendant’s claims. Jd. Consequently, my only concern in

Violet was whether the shipment of hazardous wastes into

Rhode Island through intermediaries was a sufficient “con-

tact”? with the state for purposes of jurisdiction. Because

Hydron’s evidence relates to contacts unrelated to the

cause of action, that is, contacts relevant to the concept

of general jurisdiction, I see no reason to reconsider my

earlier position.

I am moved, however, to reconsider my opinion in

Violet for another reason. The holding in that case was

predicated on the “stream of commerce” doctrine seem-

ingly sanctioned in World-Wide Volkswagen Corp. v.

Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490

(1980). There, the Supreme Court observed that “[t]he

forum state does not exceed its powers under the Due

Process Clause if it asserts personal jurisdiction over a

corporation that delivers its products into the stream of

35a

commerce with the expectation that they will be purchased

by consumers in the forum state.” Jd. at 297-98, 100

S.Ct. at 567.

While Violet was the first case to use this analysis in

toxic waste cases, other courts confronted with the issue

found it suitable as well. See e.g., Allied Towing v. Great

Eastern Petroleum Corp., 642 F.Supp. 1339, 1355-56 (E.D.

Va. 1986); U.S. v. Conservation Chemical Co., 619 F.

Supp., 162, 247-50 (W.D.Mo.1985). Since Violet and

these other cases were decided, the Supreme Court and

the First Circuit Court of Appeals handed down signifi-

cant opinions concerning the continued vitality of the

“stream of Commerce” doctrine. While neither of these

opinions were raised by the parties, they must be examined

for their effect on the instant litigation.

In Asahi Meial Ind. v. Super. Ct. of Cal., Solano Cty.,

— US. , 107 S.Ct. 1026, 94 L.Ed.2d (1987), Asahi

Metal, a Japanese manufacturer of tire valves, sold its

products to a Taiwanese tire manufacturer, who distributed

its tires to the United States. A product liability suit was

brought in California state court against the Taiwanese

tire producer arising from a motorcycle accident allegedly

eaused by a defect in a tire. The Taiwanese company

thereupon filed a cross-complaint against Asahi Metal,

seeking indemnification.

Asahi argued that it was not properly before the Cali-

fornia courts. The California Supreme Court disagreed.

lt held that Asahi’s intentional act of placing its valves

into the stream of commerce by delivering them to the

Taiwanese tire manufacturer, coupled with its awareness

that some of them would end up in California, were suffi-

cient contacts to support jurisdiction.

The United States Supreme Court reversed. In a divided

opinion, the plurality of four justices held:

36a

The placement of a product into the stream of com-

merce, without more, is not an act of the defendant

purposefully directed to the forum state. Additional

conduct of the defendant may indicate an intent or

purpose to serve the market in the forum state, for

example, designing the product for the market in a

forum state, establishing channels for providing regu-

lar advice to customers in the forum state, or market-

ing the product through a distributor who has agreed

to serve as the sales agent in the forum state. But a

defendant’s awareness that the stream of commerce

may or will sweep the product into the forum state

does not convert the mere act of placing the product

into the stream into an act purposefully directed

toward the forum state.

Id. at 1033. Although the plurality’s renunciation of a

doctrine that had acquired a substantial pedigree among

the lower federal courts was soundly criticized by five

justices in two concurring opinions, it must be considered

the last word on this aspect of minimum contacts doctrine.

See Dupont Tire Service Center, Inc., supra, 659 F.Supp.

at 863.

The First Circuit also had occasion to discuss the

“stream of commerce” doctrine in Dalmau Rodriguez v.

Hughes Aircraft Co., 781 F.2d 9 (1st Cir.1986). In that

case, Hughes Aircraft company, a Delaware corporation

with offices in California, manufactured helicopters which

it sold to an intermediary who had a contract to supply

helicopters to the Puerto Rico police department. An al-

leged defect in the helicopters injured two police officers,

who brought suit against Hughes. While Hughes argued

lack of minimum contacts, plaintiffs argued that because

Hughes knew that its helicopters were to be delivered to

Puerto Rico, stream of commerce doctrine permitted juris-

diction. The first circuit, however, rejected this argu-

ment:

* 7

37a

Assuming that Hughes knew that the destination of

the helicopters was Puerto Rico, we do not think that

the sale of two helicopters to a police department can

be the source of a stream of commerce. This is not

like opening up a particular territory for sales to the

general public. . . . There is nothing in the record

showing that Hughes advertised regularly in maga-

zines circulated in Puerto Rico or aimed its adver-

tising at Puerto Rico.

We do not think that whether Hughes knew that the

helicopters were being sold to Puerto Rico police de-

partment has any jurisdictional significance: The

test is not knowledge of the ultimate destination of

the product, but whether the manufacturer has pur-

posely engaged in forum activities so it can reason-

ably expect to be haled into court there. ...

Id. at 15.

I believe that the extra conduct seemingly required by

the Asahi and Rodriguez courts is not necessarily required

in cases of the kind presented here. It has long been

acknowledged, and it was unanimously reaffirmed by the

Court in Asahi, that “the determination of the reasonable-

ness of the exercise of jurisdiction in each case” will de-

pend, not only on an evaluation of the defendant’s con-

nection with the forum state, but also on an evaluation of

“the interests of the forum state, and the plaintiff’s in-

terest in obtaining relief.” 107 S.Ct. at 1033-34 (section

joined by unanimous Court). As the first circuit has

stated, “[p]art of the due process equation involved in

the minimum contacts standard is whether a defendant’s

activities relating to a particular state are such as to give

that state a legitimate interest in holding a defendant

answerable on a claim related to those activities.” John-

son Creative Arts, Inc. v. Wool Masters, Inc., 743 F.2d

947, 951 (1st Cir.1984). It is apparent from this, and

it has generally been recognized, that the nature and sig-

38a

nificance of the state’s interest may have a bearing on

the nature and extent of the necessary contacts. See

Hanson v. Denckla, 857 U.S. 235, 252, 78 S.Ct. 1228,

1239, 2 L.Ed.2d 1283 (1958) ; see also Chattanooga Corp.

v. Klinger, 528 F.Supp. 372, 378 (S.D.Tenn.1981) (in

applying the minimum contacts test the requisite amount

of contacts should vary according to the state’s interest) ;

Comment, Federalism, Due Process, and Minimum Con-

tacts: World-Wide Volkswagen Corp. v. Woodson, 80

Colum.L.Rev. 1341, 1851-52 (1980).

As I stated in Violet:

Certainly Rhode Island’s interest in adjudicating this

suit could hardly be more compelling. In addition to

the state’s recognized “significant interest in redress-

ing injuries that actually occur within the State,”

Rhode Island has an extraordinarily strong sovereign

interest in providing a forum for actions concerning

injury to land within its borders, and for actions

which seek recovery of public monies expended to

protect such land.

613 F.Supp. at 1579 (citations omitted). Enhancing this

interest is the fact that we are not here dealing with an

ordinary product. The defendants dispatched volatile and

inherently dangerous toxic substances. “Injuries caused

by inherently dangerous articles imported through inde-

pendent distributors certainly fall within that class of

litigation with which the forum state has a deep interest

in adjudicating.” Poyner v. Erma Werke GMBH, 618

F.2d 1186, 1192 (6th Cir.) cert. denied, 449 U.S. 841,

101 S.Ct. 121, 66 L.Ed.2d 49 (1980); See Klinger, supra,

528 F.Supp. at 378 (“contacts may be minimized if the

claim involves the placing of dangerous instrumentality

in commerce”); see also Asahi Metal Ind., 107 S.Ct. at

1038 (Stevens, J., White, J., and Blackmun, J., concur-

ring) (“Whether or not . .. conduct rises to the level

of purposeful availment requires a constitutional determi-

nation that is affected by the volume, the value, and the

39a

hazardous character of the components.) (emphasis

added).

Additionally, the fact that the non-resident generators

operate in a nationally regulated industry increases the

significance of the contact with the forum. As one court

has put it, “under CERCLA, a generator-defendant can

reasonably anticipate being haled into court in any state

in which [its] hazardous substances ... are found.” U.S.

v. Conservation Chemical Co., 619 F.Supp. 162, 249 (D.

Mo.1985) ; see also Allied Towing Corp. v. Great Eastern

Petroleum Corp., 642 F.Supp. 1339, 1856 (E.D.Va.1986)

(“the scope of ‘foreseeability’ broadens when the enter-

prise giving rise to the action is subject to pervasive

federal regulation”). Moreover, simply as a matter of

elemental fairness, it is not unreasonable to expect a per-

son engaged in a highly regulated activity “to suffer the

consequences of being sued in a distant place.” Oxford

First Corp. v. PNC Liquidating Corp., 372 F.Supp. 191,

202 (E.D.Pa.1974). As the Supreme Court has recog-

nized:

[ W jhen an entrepreneur embarks upon [certain types

of] business activities, he has voluntarily chosen to

subject himself to a full arsenal of governmental

regulation. ...

[B]usinessmen engaged in such federally licensed and

regulated enterprises accept the burdens as well as

the benefits of their trade. . . . The businessman in

a regulated industry in effect consents to the restric-

tions placed upon him.

Marshall v. Barlow’s Inc., 436 U.S. 307, 314, 98 S.Ct.

1816, 1821, 56 L.Ed.2d 305 (1978).

Finally, as I stated in Violet, the interests of the plain-

tiff state government “in obtaining convenient and effec-

tive relief,” World-Wide Volkswagen, —s 444 USS. at

292, 100 S.Ct. at 564,

40a

fairly depends upon its ability to litigate this action

in a single forum. In such multiparty, potentially

labyrnthine litigation, it will no doubt substantially

burden the state to force it to proceed in parallel or

piecemeal actions—and doubly so in light of the

limited litigation resources available to the state.

613 F.Supp. at 1579.

Accordingly, I find that this court has the requisite

jurisdiction.

II. LIABILITY

I discussed generator liability at length in Violet, 648

F.Supp. at 1288-90; I now incorporate that discussion as

part of this ruling.’

2 Generator Liability Under CERCLA Section 107. Section 107 of

CERCLA defines liability for purposes of the CERCLA statute.

Under section 107, four classes of individuals may be held liable

for cleanup costs associated with hazardous waste control: 1) the

owner and operator of a vessel or facility; 2) owners or oe ators

of facilities at which hazardous wastes are disposed; 3) an) ‘erson

who by contract, agreement, or otherwise arranged for transport

to or disposal or treatment of hazardous wastes at a facility owned

by another; and 4) any person who accepts or accepted any haz-

ardous substance for transport to disposal or treatment facilities.

The liability of generator defendants is covered in the third cate-

gory of liable parties. The precise language of section 107(a) (3)

states:

~ Notwithstanding any other provision or rule of law, and

subject only to the defenses set forth in subsection (b) of this

section—

(3) any person who by contract, agreement, or otherwise

arranged for disposal or treatment, or arranged with a trans-

porter for transport for disposal or treament, of hazardous

substances owned or possessed by such person, by any other

party or ertity, at any facility owned or operated by another

party or entity and containing such hazardous substances .. .

(4) ... from which there is a release, or a threatened re-

lease which causes the incurrence of response costs, of a haz-

ardous substance, shall be liable for—

4la

(A) all costs of removal or remedial action incurred by the

United States Government or a State not inconsistent with

the national contingency plan;

(B) any other necessary costs of response incurred by any

other person consistent with the national contingency plan; and

from such a release.

42 U.S.C. section 7607 (a) (3) (1982).

The ambiguity of this provision is apparent upon close inspection.

As one court has noted, the literal terms of the statute could be

interpreted to impose liability on a waste generator who arranges

for waste disposal by contract or agreement, but who never actually

delivers the waste to a disposal facility. See United States v. Wade,

577 F.Supp. 13826, 1832 (E.D.Pa. 1983). CERCLA is a hastily-

drawn statute quickly passed through a lame-duck Congressional

session. See Developments, Toxic Waste Litigation, 99 Harv.L.Rev.

1458, 1465 & n. 1 (1986); U.S. v. Price, 577 F.Supp. 11038, 1107

(D.N.J. 1983); United States v. Mottolo, 605 F.Supp. 898, 902

(D.N.H. 1985) (“CERCLA has acquired a well-deserved notoriety

for vaguely-drafted provisions and an indefinite, if not contra-

dictory, legislative history.”). Nonetheless, Congress intended

broad judicial interpretation of CERCLA in order to give full

effect to two important legislative purposes: to give the federal

government thé tools necessary for a prompt and effective response

to hazardous waste problems and to force those responsible for

creating hazardous waste problems to bear the cost oi their actions.

See S.Rep. No. 848, 96th Cong., 2d Sess. 13 (1980), reprinted in

1 A Legislative History of the Comprehensive Environmental Re-

sponse, Compensation, and Liability Act of 1980 (Superfund), at

320 (1983); H.R.Rep. No. 1016, 96th Cong., 2d Sess. pt. 1, 25

(1980), reprinted in 2 A Legislative History of the Comprehensive

Environmental Response, Compensation and Liability Act of 1980

(Superfund), at 56 (1983); United States v. Reilly Tar & Chemical

Corp., 546 F.Supp. 1100, 1122 (D.Minn. 1982).

After stripping section 107(a) (3) of its excess verbiage, Courts

have generally held that liability under section 107(a) (3) requires

proof of four basic elements: 1) that the generator disposed of

hazardous substances; 2) at a facility which contains at the time

of discovery hazardous substances of the kind the generator dis-

posed; 3) there is a release or a threatened release of that or any

hazardous substance; 4) which triggers the incurrence of response

costs. See United States v. Wade, 577 F.Supp. 1826, 1833 (E.D.Pa

1988); United States v. Conservation Chemical Co., 619 F.Supp.

162, 190 (W.D.Mo. 1985); United States v. South Carclina Re-

42a

cycling and Disposal, Inc., (“SCRDI’) 14 Envtl.L.Rep. (Envtl.

L.Inst.) 20272, 20274 (D.S.C. Feb. 23, 1984); see also United

States v. Ward, 618 F.Supp. 884, 893-94 (E.D.N.C. 1985).

Courts have universally acknowledged that in enacting section

107 Congress created a strict liability scheme. See New York v.

Shore Realty Corp., 759 F.2d 1032, 1044 (2d Cir. 1985) (liability

under CERCLA is unequivocally strict liability) ; United States v.

Conservation Chemical Co., 619 F.Supp. at 204; United States v.

Ward, 618 F.Supp. at 893; United States v. Northeastern Pharma-

ceutical and Chemical Co., (“NEPACCO”) 579 F.Supp. 823, 844

(W.D.Mo. 1984); SCRDI, 14 Envtl.L.Rep. at 20274, United States

v. Chem-Dyne Corp., 572 F.Supp. at 805; City of Philadelphia v.

Stephan Chemical Co., 544 F.Supp. 1135, 1140 n. 4 (E.D.Pa. 1982).

I am in accord with the conclusion of these courts. CERCLA sec-

tion 101(32) defines CERCLA liability as being consistent with the

liability standards governing section 311 of the Clean Water Act,

88 U.S.C. section 1321 (1982). See 42 U.S.C. section 9601(32)

(1982). Courts have interpreted Section 311 of the Clean Water

Act to define a standard of liability with fault. See, e.g., United

States v. LeBoeuf Bros. Towing Co., 621 F.2d 787, 789 (5th Cir.

1980); Stewert T'rans. Co. v. Allied Towing Corp., 596 F.2d 609,

613 (4thCir. 1979); United States v. Tex-Tow, Inc., 589 F.2d 1310,

1313 (7th Cir. 1978); Burgess v. M/V Tamano, 564 F.2d 964, 982

(Ist Cir. 1977), cert. denied, 435 U.S. 941, 98 S.Ct. 1520, 55

L.Ed.2d 537 (1978); United States v. Bear Marine Services,

509 F.Supp. 710, 714 (E.D.La. 1980). Moreover, the legisla-

tive history is clear that Congress understood judicial inter-

pretations of section 311 to impose strict liability and intended

that standard to be incorporated as the liability standard under

CERCLA. See S.Rep. No. 848, 96th Cong., 2d Sess. 34 (1980), re-

printed in 1 A Legislative History of the Comprehensive Environ-

mental Response, Compensation, and Liability Act of 1980 (Super-

fund), at 341 (1983) (S. 1480—the CERCLA bill in the Senate—

represents an attempt to fill gaps left by other federal strict liabil-

ity statutes—including section 311 of CWA—which respond to and

compensate victims of hazardous substance release) ; 126 Cong. Rec.

$14964 (daily ed. Nov. 24, 1980) (remarks of Sen. Randolph)

(“[W]e have kept strict liability in the compromise, specifying the

standard of liability under section 311 of the [CWA]; that is,

strict liability.””). Thus, if the plaintiff is able to prove at trial the

statutory elements of section 107(a) (3), Olin may be held liable

without proof of knowledge or intent; CERCLA section 107 is a

strict liability scheme.

{ Continued }

ee Pe

43a

2 [Continued]

C. Defenses to Liability under CERCLA Section 107

1. Statutory Defenses

CERCLA section 107(b) enumerates the only defenses to

CERCLA liability provided within the statute itself. Only three

statutory defenses are available to a defendant otherwise liable

under CERCLA. Section 107(b) provides: ;

There shall be no liability under sub-section (a) of this sec-

tion for a person otherwise liable who can establish that the

release or threat of release of a hazardous substance and the

damages resulting therefrom were caused solely by—

(1) an act of God;

(2) an act of war;

(3) an act or omission of a third party other than an em-

ployee 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 character-

istics of such hazardous substance, in light of all relevant facts

and circumstances, and (b) he took precautions against fore-

seeable acts or omissions of any such third party and the conse-

quences that could foreseeably result from such acts or omis-

sions; or (4) any combination of the foregoing paragraphs.

42 U.S.C. section 9607(b) (1982). In essence, the affirmative de-

fenses outlined in section 107(b) will allow a defendant to evade

liability if the release and damage are caused solely by an act of

God, or war, or by acts of third parties outside a contractual rela-

tionship with the defendant. A defendant may only defend based

on the acts of a third party if the defendant has exercised due care

in the respect to the hazardous substances concerned and took pre-

cautions against any acts or omissions of the third party and any

consequences foreseeably flowing from those acts or omissions.

This final defense, known as “the third-party defense,” incorporates

general principles of vicarious liability into the CERCLA liability

scheme. See Developments, Toxic Waste Litigation, 99 Harv.L.Rev.

1458, 1548 (1986).

The defenses provided in section 107(b) are very narrow de-

fenses; they require that the release and damage be caused solely

by acts of God, war, or acts of omissions of a third party. These

44a

Rohm & Haas Company

It is clear that this major chemical company took every

precaution in the disposal of its wastes; it was separated

into categories, packed into 58 gallon metal, open-head

drums (“lab packs”)* cushioned with vermiculite and

absorbent materials, and disposed of through a licensed

transporter. During 1976-1977, the pertinent period here,

it contracted with Jonas Waste Removal (“Jonas”), to

transport its waste exclusively to licensed disposal sites in

Pennsylvania and New Jersey with directions stating,

“TdJjisposal of these waste materials is not to be in viola-

tion of an ordinance, regulation or law of responsibility

for safe delivery and disposal of the material after leav-

ing the premises).”’ And as the defendant states, it is

uncontradicted that at no time was any material consigned

to Rhode Island. However, during this period approxi-

mately 4,800 fifty-five gallon lab packs were consigned to

Jonas and the state claims 303 five-gallon drums of this

total were found at the Picilio site; the defendant argues

that this is an uncorroborated statement nowhere to be

found in the record, The fact remains that this defendant

agreed to have its materials removed. The record shows it

“paid the State’s contractor aproximately $32,000 as the

costs for handling the removal of Rohm & Haas ma-

terials.” Certainly this is an indication of the quantity of

waste removed. The removal and identification of this

material was with the assistance of a Mr. Joseph Pawli-

kowski of Rohm & Haas, who was the superior responsible

for that company’s waste disposal.

affirmative defenses essentially serve to shift the burden of the

proof of causation to the defendants. This causation scheme en-

courages defendants to mark and dispose of their hazardous wastes

with the greatest care; the defenses discourage defendants from

carelessly allowing their wastes to run into one large, unidentifiable

morass at the waste site, confident in the knowledge that the gov-

ernment must identify the wastes and prove causation. See id.

at 1544.

3 Laboratory packs (“lab packs”) are 55 gallon drums packed

with smaller containers (e.v., vials, jars) surrounded and cushioned

by an absorbent material such as vermiculite or “speedy dry-’

SOSA ROMY: MN IF ake et ere neat

Ps ily ai

eee

iit isso a

45a

In mitigation, the defendants point out that 20 drums,

which were segregated in one area, were intact without

any observable leakage. However, this was disputed by

John Leo, an employee of the State Department of En-

vironmental Management. The defendant also points to

Mr. Leo’s testimony that Rohm & Haas, “removed all of

their toxic waste that could be removed.”’ The defendant

did not go far enough because Mr. Leo also stated, in

answer to a question as to what was left, “[wlhich left

the contaminated soil from the broken bottles that had

leaked out into the pit from their lab packs. That, of

course, was lost in the environment which would have

added to the contmaination in the groundwater.” He

further said that he personally saw- removed from the pit

“at least four or five drums” containing liquid which was

spilled because the drum heads were crushed and had holes

on the side caused by the bulldozer. ‘They were eventually

shown to be Rohm & Haas material... [t]hose drums

were Rohm & Haas drums.” One of the drums contained

allyl aleohol, which is a flammable, extremely poisonous

material; “[T]hey [representatives from Rohm & Haas]

were shown the barrel that contained nothing but this

allyl aleohol . . . this material is extremely poisonous... .

a class B poison and by DOT regulations as class B poison

is extremely dangerous material.”

The material spilled into the ground was removed as

contaminated soil. Mr. Leo could not state what quantum

of soil was contaminated by this defendant; though he

did know the total amount of soil removed; but, “[h]ow

much is actually responsible from Rohm & Haas or what-

ever other companies are involved I can’t tell you. I mean

we didn’t proportion out the soil.”

I accept the State’s estimate as to the quantum of ma-

terial found at the dump and that it was toxic hazardous

waste. Accordingly, this defendant is liable to the state

as set forth, infra.

46a

Exxon Research and Engineering Company

The State contends that 15 Exxon drums were exca-

vated; Mr. Leo so testified; however, he also acknowl-

edged that the number was based on his recollection and

not his records, which identified only one Exxon “lab

pack”; this single drum was rusted and dented without

any evidence of spillage. When pressed fo

This text is long and has been trimmed here. Open the source document for the complete record.

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.