Petition for Writ of Certiorari — Detrex Corp. v. Amcast Industrial Corp.

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Text

93-VSz

No.

“

IN THI =

Siuypreme Court of the United States

OCTOBER TERM, 1993

DETREX CORPORATION.

Petitioner,

AMCAST INDUSTRIAL CORPORATION and

ELKHART PRODUCTS CORPORATION.

Respondents.

Petition for Writ of Certiorari to the

United States Court of Appeals

for the Seventh Circuit

PETITION FOR WRIT OF CERTIORARI

JOHN GERALD GLEESON

MICHAEL VY. SUCAET

Counsel of Record for Petitioner

HOWARD & HOWARD

The Pinehurst Office Center

Suite 250

1400 North Woodward Avenue

FERD J. CHMIELNICKI Bloomfield Hills, MI 48304

ROBERT M. CURRIE (313) 645-1483

Of Counsel for Petitioner Counsel for Petitioner

* Counsel of Record

WILSON - EPES PRINTING Co.. INC. - 789-CO96 - WASHINGTON. D.C. 20001

QUESTIONS PRESENTED FOR REVIEW

Whether the bulk delivery of useful hazardous sub-

Stances by Petitioner in tanker trucks to Respondents’

manufacturing plant falls within the scope of the ex-

ception to the definition of “facility” which excludes

consumer products in consumer use or in vessels found

in the Comprehensive Environmental Response, Com-

pensation and Liability Act, 42 U.S.C.A. $$ 9601

through 9675?

Is a cost recovery lawsuit by a potentially responsible

party against other liable parties under 42 U.S.C.A.

S 9607(a) of the Comprehensive Environmental Re-

sponse, Compensation and Liability Act an action for

contribution requiring district courts to equitably ap-

portion responsibility among the litigants after strict

and joint and several liability is imposed?

(i)

THE PARTIES

Petitioner is Detrex Corporation the only remaining

Defendant before the District Court for the Northern

District of Indiana and the Appellant before the United

States Court of Appeals for the Seventh Circuit. Detrex

is a Michigan corporation. Respondents Amecast Indus-

trial Corporation and Elkhart Products Corporation were

Plaintiffs before the District Court and Appellees before

the United States Court of Appeals for the Seventh Cir-

cuit. Amcast Industrial Corporation, an Ohio corporation,

is the parent of Elkhart Products Corporation, an Indiana

corporation.

With respect to non-wholly owned subsidiaries, Detrex

Corporation owns 100% of The Elco Corporation, an

Ohio corporation, which in turn owns 85% of Harvel

Plastics, Inc., a Pennsylvania corporation.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW i

THE PARTIES ii

TABLE OF AUTHORITIES s dcmaidaloneeaiiecaandas Vv

OPINIONS OF THE DISTRICT COURT AND THE

COURT OF APPEALS 7 ae 1

JURISDICTIONAL STATEMENT a eae 2

THE STATUTORY PROVISIONS INVOLVED 2

STATEMENT OF THE CASE 2

INTRODUCTION 2

1. Respondents Own and Operate a Manufacturing

Facility Which is Extensively Contaminated

With Hazardous Substances ___ oe ae 3

2. Procedural History of the Case and Jurisdic-

tional Statement =o CRI Raa 5

3. CERCLA Contains a Variety of Liability Ex-

ceptions oa ts AD 57 MeO 7

REASONS FOR GRANTING THE PETITION oa 10

I. DETREX IS NOT LIABLE UNDER CERCLA

BECAUSE ITS TRUCKS WERE NOT FACIL-

ITIES disdain . 11

A. The Definitional Exception Refers to Facili-

ties That Contain Consumer Products . 11

B. The Interpretation of § 9601(9) Presents an

Important Question of Federal Law _. 17

C. There is a Split of Authority Among the Cir-

cuits Concerning the Scope of the Exception 18

(ili)

TABLE OF CONTENTS—Continued

D. The Court has the Opportunity to State a

Complete and Understandable Rule of Law.

Il. CERCLA LAWSUITS BETWEEN PARTIES

UNDER § 9607(a) ARE ACTIONS FOR CON-

TRIBUTION REQUIRING AN EQUITABLE

ALLOCATION ..._.. jisnicccbbinidsaraaaad mapa asdiousettanee

A. Detrex was Entitled to an Equitable Alloca-

tion After the Imposition of Joint and Sev-

le I carer er ee

B. This Petition for a Writ of Certiorari Should

be Granted Because There is a Split of Au-

COE GM TE TI inc ists kevenemnecseics

C. This Issue Presents an Important Question

of the Proper Interpretation of a Federal

Environmental Statute ........0...00..00.00 0.

D. This Issue Should be Resolved with an Un-

complicated Rule of Law .................................

Ey SR mR LS OTN PEL BEE NT IN PON

Fg knee SOLED ENONEN, MEO NIY ELA, OORT IIENS a! SES,

Page

Vv ‘

TABLE OF AUTHORITIES

CASES: Page

Amoco Oil Co. v. Borden, Inc., 889 F.2d 664 (5th

Ce PD cctencesestanitacscicun WOM EERE Oe ks ic 22, 23, 26

Ardestani v. INS, —— U.S. ——, 116 L. Ed. 2d

Ape, 11S S. CE Bae COO) osc 13

Avnet, Inc. v. Allied-Signal, Inc., 825 F. Supp.

pes ee 8 Re, ; NUE he ey Ie 24

County Line Inv. Co. v. Tinney, 933 F.2d 1508

COE COR. FIED vcsteceacn ee 24, 25

CP Holdings, Inc. v. Goldberg-Zoino & Assocs.,

Inc., 769 F. Supp. 482 (D.N.H. 1991) ............. 20

Davis v. Michigan Dept. of Treas., 489 U.S. 803,

103 L. Ed. 2d 891, 109 S. Ct. 1500 (1989) _...... 15

Dayton Indep. Sch. Dist. v. United States Mineral

Prods., Co., 906 F.2d 1059 (5th Cir. 1990)... 12, 18,

19, 20

Demarest v. Manspeaker, 498 U.S. 184, 112

L. Ed. 2d 608, 111 S. Ct. 599 (1991) _...... 13

Electric Power Bd. of Chattanooga v. Westing-

house Electric Corp., 716 F. Supp. 1069 (E.D.

BOM. TEP ossicakdce eee 20

First United Methodist Church v. United States

Gypsum Co., 882 F.2d 862 (4th Cir. 1989),

cert. denied, 493 U.S. 1070, 107 L. Ed. 2d 1020,

110 SS. C2. S536 fee 8

Freytag v. Commissioner of Int. Rev., —— U.S.

, 115 L. Ed. 2d 764, 111 S. Ct. 2631 (1991). 13

Ginsberg & Sons, Inc. v. Popkin, 285 U.S. 204, 76

L. Ed. 704, 62 S. Ct. 328 (1981) .......................... 13

Howe v. Smith, 452 U.S. 473, 69 L. Ed. 2d 171, 101

ms. CO, S068 €ISGh). .....0 eee 13

In re Dant & Russell, Inc., 951 F.2d 246 (9th Cir.

j |; | Pea eenoumenienmeoe a Beto AL son iS hee 0) 23, 26

Reading Co. v. City of Philadelphia, 823 F. Supp.

Saee (Ee Fe See ous ee 20

United States v. Alean Aluminum Corp., 964 F.2d

ame. Cae RRs PID ence 11, 23, 26

United States v. Asarco, Inc., 814 F. Supp. 951

CR. Cals. S908) «000 Se ee 23

TABLE OF AUTHORITIES—Continued

Page

United States v. Constantine, 296 U.S. 287, 80

L. Ed. 233, 56 S. Ct. 228 (1985) 20

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

U.S. 235, 1038 L. Ed. 2d 290, 109 S. Ct. 1026

(1989) data 13

Vernon Village, Inc. v. Gottier, 755 F. Supp. 1142

(D. Conn. 1990) . 20

Weinberger v. Hynson, Westcott & Dunning, 412

U.S. 609, 37 L. Ed. 2d 207, 93 S. Ct. 2469

(1973) . lols ae 13, 14

Weyerhaeuser Co. v. Koppers Co., 771 F. Supp.

1420 (D. Md. 1991) RAR SPE ee ee, BY 23

Wilshire Westwood Assoc. v. Atlantic Richfield

Corp., 881 F.2d 801 (9th Cir. 1989) 8

STATUTES:

28 U.S.C.A. § 1254(1) 2

28 U.S.C.A. § 1331. 5

Be Ue is BIOS dicisdneteett 5

42 U.S.C.A. $§ 9601 through 9675 ) 2

42 U.S.C.A. g DE CPD ccknvecnbesecs bs seceesecececeseceeeeePASSim

42 U.S.C.A. § 9601 (14) ; J 8

42 U.S.C.A. § 9601(20) (B) . % 9,16

42 U.S.C.A. § 9601(20) (CC)... Sle . 9,16

412 U.S.C.A. § 9601 (22 9

42 U.S.C.A. § 9607 .. 18

42 U.S.C.A. § 9607 (a) passim

42 U.S.C.A. § 9607 (a) (1) 000. 5, 6,12

42 U.S.C.A. § 9607 (a) (3) 5, 6

42 U.S.C.A. § 9607 (b) 7

42 U.S.C.A. § 9613(b) NA 5

42 U.S.C.A. § 9613(f) . 10, 23, 24, 25

42 U.S.C.A. § 9613(f) (1)... passim

42 U.S.C.A. § 9613 (f) (2). . : 27, 28

42 U.S.C.A. § 9613 (f) (3) (B) 24

42 U.S.C.A. § 9656 . eae 9,15

42 U.S.C.A. § 9656 (a) _. - 16

42 U.S.C.A. § 9656 (b) 9,15

49 U.S.C.A. §§ 1801, et seq. ns 9, 15, 16

D UBS Re A: DOE cntnnaidinkn eee farina 17

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S30949 (d ed. Nov. 24. 1980)

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LSND ity SIATISTICAI HANDBOOK

JI-2 (1), 99th ¢ ong.. 2d Sess. 59

te 1986 U.S.C.C.A.N. 2861

Dut ‘ CERCLA J cia

*>*)

IN THE

Supreme Court of the United States

OCTOBER TERM, 1993

No.

DETREX CORPORATION,

. Petitioner,

AMCAST INDUSTRIAL CORPORATION and

ELKHART PRODUCTS CORPORATION.

Respondents.

Petition for Writ of Certiorari to the

United States Court of Appeals

for the Seventh Circuit

PETITION FOR WRIT OF CERTIORARI

OPINIONS OF THE DISTRICT COURT

AND THE COURT OF APPEALS

The District Court issued two Memoranda and Orders

granting the summary judgment motions of Amcast In-

dustrial Corporation and Elkhart Products Corporation

(“Respondents”). The initial decision of the District

Court is reported at 779 F. Supp. 1519 (N.D. Ind. 1991)

and, for the convenience of the Court. is set out in the

Appendix at 33a through 8la. Also, the District Court’s

second Memorandum and Order is reported at 822

F. Supp. 545 (N.D. Ind. 1992) and is at lla through

32a of the Appendix.

The opinion of the United States Court of Appeals for

the Seventh Circuit, entered on August 12, 1993, is at fa

through 10a of the Appendix. On appeal, the decisions

of the District Court were affirmed in part, reversed in

part, and the case was remanded for further proceedings.

JURISDICTIONAL STATEMENT

The judgment of the United States Court of Appeals

for the Seventh Circuit was also entered on August 12,

1993. Petitioner Detrex Corporation (“Detrex”) timely

filed a Motion to Stay Issuance of the Mandate with the

United States Court of Appeals for the Seventh Circuit.

Significantly, the motion was granted and issuance of the

mandate was stayed until November 12, 1993. The Court

has jurisdiction to review the judgment of the United

States Court of Appeals for the Seventh Circuit (“Seventh

Circuit”) by writ of certiorari pursuant to 28 U.S.C.A.

§ 1254(1).

THE STATUTORY PROVISIONS INVOLVED

This case concerns the interpretation of several provi-

sions of the Comprehensive Environmental Resporse,

Compensation and Liability Act (“CERCLA”), 42

U.S.C.A. $$ 9601 through 9675, as amended. The

CERCLA sections at issue, $ 9601(9), $ 9607(a), and

§ 9613(f)(1). are set out at 82a through 84a of the

Appendix for the convenience of the Court.

STATEMENT OF THE CASE

INTRODUCTION

This lawsuit concerns Detrex’s delivery of an industrial

solvent, trichloroethylene (“TCE”), to Respondents’ man-

ufacturing facility located in Elkhart, Indiana. TCE was

occasionally spilled in small amounts during some of the

deliveries. Respondents filed suit to recover response costs

expended in cleaning up all of the soil and groundwater at

its manufacturing facility and included in their complaint

two counts under CERCLA. Detrex is not a proper de-

fendant under CERCLA because the statutory definition

of facility cannot be met. TCE was a “consumer product

in consumer use or any vessel.” Because Detrex was not

the owner or operator of a facility from which there was

a release of hazardous waste, it could not be liable under

CERCLA. Respondents, however, may have had recourse

under other common law or statutory theories. At the

very least. Detrex was entitled to an equitable allocation

of the liability of the parties.

1. Respondents Own and Operate a Manufacturing Facil-

ity Which is Extensively Contaminated With Hazard-

ous Substances.

The Respondents own and operate a large manufactur-

ing plant in Elkhart, Indiana which is the subject matter

of this lawsuit. Since at least the early 1950s, Respond-

ents have manufactured copper fittings from copper pipe

at the facility. The soil and groundwater at the facility

are contaminated with hazardous substances. including

TCE and 1-1-1 trichloroethane (“TCA”). TCE and TCA

have been widely used by industries as solvents for decades.

The chemicals are used to remove lubricants applied dur-

ing manufacturing because they are effective cleaning

agents.

The manufacturing process of the Respondents required

the extensive use of degreasing solvents including TCE

and TCA. During the manufacturing process, copper fit-

tings were covered with heavy oil for lubrication. The

heavy oil was removed from the copper fittings with TCE

and TCA in a machine called a degreaser. Respondents

had two large degreasers within the manufacturing facil-

ity. TCE was piped into the degreasers within the plant

from two above-ground storage tanks which were located

just outside the building.

For years the Respondents repeatedly purchased, used.

and disposed of thousands of gallons of TCE which were

delivered into the two above-ground storage tanks. There

were several suppliers of TCE and TCA to Respondents

including Inland Chemical, Van Waters & Rogers, and

Hoosier Solvents. Detrex supplied only TCE to Respond-

ents and did not regularly supply that chemical until

1978. Deliveries of TCE to Respondents were made by

both Detrex and Transport Service Company (“Trans-

port”), an independent common carrier hired by Detrex.

Between 1978 and 1986, Detrex sold TCE to Respond-

ents on approximately 34 occasions. Detrex made 19 de-

liveries of TCE and Transport made 15. Detrex’s truck

drivers received training in delivery techniques and were

careful to avoid spilling during deliveries. Nevertheless,

this case concerns alleged delivery spills of TCE by both

Transport and Detrex drivers. As the Seventh Circuit

succinctly phrased the point “[t]here is evidence that both

Detrex’s and Transport Services’ [sic] drivers sometimes

spilled TCE accidentally on” the manufacturing facility.

Appendix at 2a.

Respondents are responsible for the vast majority of

TCE and ail of the TCA contamination at the manufac-

turing facility. The Seventh Circuit concluded that “Elk-

hart is admittedly a ‘responsible person,’ as an entity

liable for response costs” under CERCLA. Appendix at

3a. Respondents were reckless with TCE because they

did not consider it environmentally hazardous. TCE

dripped onto the plant floor during the manufacturing

process. Virgin TCE was used for cleaning tools at the

facility. TCE was used by Respondents to scrub floors

within the plant. Black TCE sludge was produced by

Respondents as a waste product of their manufacturing

process and was stored in drums at several locations at

the facility. TCE sludge leaked out of the drums. Rain-

water got into the uncovered storage drums and forced

TCE sludge out over the top.

TCE contamination was first detected in groundwater

beneath Miles, Inc., a neighboring landowner, in June of

1984. The environmental report prepared on behalf of

Miles, Inc. concluded that the source of the TCE pollution

was Respondents’ manufacturing facility. Respondents

hired their own environmental consultant who concluded

that the soil and groundwater at the manufacturing facility

were contaminated with TCE and related organic

chemicals.

Detrex hired a groundwater hydrogeologist to assess its

potential liability who calculated that the maximum

amount of TCE which Detrex could have spilled on de-

livery was 49 gallons out of almost 800 total gallons in

the soH and groundwater. He also concluded that spilled

TCE evaporated and could not have impacted the en-

vironment. Several other activities of the Respondents

were identified by the hydrogeologist as probably causing

contamination including: a TCE sludge storage area, a

waste disposal pit, a waste water treatment plant, under-

ground piping from the tanks into the degreasers, and use

of TCE to clean plant floors and tools.

2. Procedural History of the Case and Jurisdictional

Statement.

Respondents commenced this lawsuit with the filing of

a 13 count complaint on October 13, 1988. This lawsuit

was properly initiated in the United States District Court

for the Northern District of Indiana. The District Court

possessed jurisdiction over this lawsuit pursuant to 28

U.S.C.A. $1331, the federal question statute, and 28

U.S.C.A. § 2201, the declaratory judgment act. Section

9613(b) states that district courts enjoy exclusive juris-

diction over all CERCLA controversies. The counts

within the complaint included negligence, breach of con-

tract, trespass, abnormally dangerous activity, and others.

The core of the complaint, however, was two CERCLA

counts. Count I claimed that Detrex was a potentially

responsible party under § 9607(a)(1) of CERCLA as

an owner and operator of a facility. Additionally, Count

II alleged that under § 9607(a)(3) of CERCLA, Detrex

was liable as an arranger for disposal of hazardous sub-

stances at the manufacturing facility. Respondents assert

that Detrex is liable under CERCLA because it spilled

TCE during deliveries.

This lawsuit was decided in the District Court based

upon two summary judgment motions filed by Respond-

ents and one submitted by Detrex. After discovery con-

cluded, Respondents sought summary indgment against

Detrex under §$ 9607(a)(1) of CERCLA. Detrex’s sum-

mary judgment motion requested dismissal of all conts

within Respondents’ complaint. These initial motions

were resolved by the District Court in a Memorandm

and Order dated November 18, 1991. Appendix at 33a

through 8la. Detrex, according to the District Court.

was liable under § 9607(a)(1) of CERCLA as an owner

and operator of a facility. The only bases for concluding

that Detrex was a liable party under CERCLA were al-

leged small delivery spills and an open valve spill. Appen-

dix at 59a and 69a. With respect to Respondents’ claim

under § 9607(a)(3),. Detrex argued that the sale of virgin

TCE, a useful manufacturing chemical and not a waste

product, was not an arrangement for disposal giving rise

to CERCLA liability.

In the second Memorandum and Order, dated April 9.

1992, Appendix at lla through 32a, the District Court

concluded that Detrex was also liable under $ 9607(a) (3)

of CERCLA. See Appendix at 15a. Detrex was held

severally liable for all of the Respondents’ past and future

response costs then totalling $1.197,082.42. A judgment

was issued that same day by the District Court against

Detrex.

The Seventh Circuit’s opinion is dated August 12, 1993.

Detrex argued to the Seventh Circuit that it was not liable

under § 9607(a)(1) of CERCLA because the definition

of facility excludes “any consumer product in consumer

use or any vessel.” 42 U.S.C.A. § 9601(9). The Seventh

Circuit disagreed concluding that “[t]he exception is for

facilities that are consumer products in consumer use, not

for consumer products contained in facilities.” Appendix

at 8a.

With respect to the second isstte on appeal here,

Detrex argued that it was entitled to an equitable alloca-

tion of liability. Respondents’ action under $ 9607(a) of

CERCLA is a claim for contribution because they too

are liable under the statute. Private CERCLA lawsuits

between parties under § 9607(a) are contribution actions

and the District Court should have determined the respec-

tive liability percentages of Detrex and Respondents after

imposing strict and joint and several liability. The Seventh

Circuit rejected Detrex’s apportionment argument. Judge

Posner concluded that a defendant in a CERCLA law-

suit can counterclaim in the initial action and obtain an

allocation of liability percentages or file a second action.

According to the Seventh Circuit, absent such a counter-

claim, an equitable allocation is not appropriate in a

§ 9607(a) CERCLA action. Thus, if a CERCLA de-

fendant does not file a counterclaim in a § 9607(a)

lawsuit, it will not receive a liability apportionment.

The judgment of the Seventh Circuit was also issued

on August 12, 1993, affirming in part, reversing in part,

and remanding the case to the District Court. Detrex

timely moved for an order to stay issuance of the mandate

by the Seventh Circuit. On September 3, 1993, Judge

Posner granted Detrex’s motion staying issuance of the

mandate until November 12, 1993. By granting Detrex’s

motion, the Seventh Circuit recognized the significance

of the issues presented by this case.

3. CERCLA Contains a Variety of Liability Exceptions.

CERCLA imposes strict liability upon parties. Liabil-

ity under CERCLA, however, is not absolute. The statute

contains sundry exceptions or exclusions from liability.

The most obvious or common of these are the four de-

fenses expressly stated in §$ 9607(b). Liability under

CERCLA does not exist if the contamination was caused

solely by:

1. an act of God;

2. an act of war;

an act or omission of a completely unrelated

third party; and

4. any combination of the above.

In addition, there are several other liability exclusions

which are much broader in their application. These exclu-

sions negate one or more of the requisite elements neces-

sary to establish CERCLA liability, thereby, preventing

recovery under the statute. The phrase “hazardous sub-

stance” is very broadly defined under CERCLA. 42

U.S.C.A. § 9601(14). Yet, Congress carved out a huge

exception for petroleum and related products. In Wilshire

Westwood Assoc. v. Atlantic Richfield Corp., 881 F.2d

801, 810 (9th Cir. 1989), it was held “that the petro-

leum exclusion in CERCLA does apply to unrefined and

refined gasoline even though certain of its indigenous com-

ponents and certain additives during the refining process

have themselves been designated as hazardous substances

within the meaning of CERCLA.” Benzene is a constitu-

ent of petroleum and is known to cause cancer.

CERCLA does not apply to removal actions involving

asbestos which also causes cancer. In First United Meth-

odist Church v. United States Gypsum Co., 882 F.2d 862

(4th Cir. 1989), cert. denied, 493 U.S. 1070, 107 L. Ed.

2d 1020, 110 S. Ct. 1113 (1990), the Court refused to

expand CERCLA to cover asbestos abatements. It held

that “it is made clear that § 9604(a)(3)(B) represents

much more than a procedural limitation on the President’s

authority; instead, it is a substantive limitation of the

breadth of CERCLA itself.” First United, 882 F.2d at

868.

Congress was concerned with how CERCLA would

impact transporters of useful hazardous subtances. Accord-

ingly, there are at least two provisions within CERCLA

which negate liability with respect to the transportation

of useful hazardous substances. Sections 9656 and 9601

(20)(B) and (C), have not been judicially construed.

Section 9656(b) provides that common or contract car-

riers are not liable under CERCLA but may be liable

under other law for damages stemming from the release

of hazardous substances during the course of transporta-

tion. There are other statutory laws which could have

application to spills during transportation. For example.

the Hazardous Materials Transportation Act (“HMTA”).

49 US.C.A. §§ 1801, ef seq., is intended to “protect the

Nation adequately against the risks to life and property

which are inherent in the transportation of hazardous

materials in commerce.” 49 U.S.C.A. § 1801. Common

law theories, of course, may also have application. Ship-

pers are excluded from liability in certain circumstances

under § 9601(20)(B). Also, § 9601(20)(C) exempts a

common or contract carrier from CERCLA liability where

the release was caused by circumstances or conditions

beyond its control.

The definition of release found at § 9601(22) also con-

tains exclusions. Workplace releases, combustion engine

emissions, and certain releases of nuclear material are

CERCLA exempt.

Unquestionably, while the statute imposes liability with-

out regard to fault, Congress did not intend for CERCLA

to apply to every release of a useful hazardous substance.

The many exceptions to liability within the statute make

this clear. Statutes which impose strict liability necessarily

limit the scope of their application. This case focuses

upon the exception inserted by Congress into the defini-

tion of facility.

REASONS FOR GRANTING THE PETITION

Detrex would raise two arguments on appeal. The first

issue is whether Detrex’s deliveries of TCE to Respond-

ents’ above-ground storage tanks are exempted from

CERCLA liability by virtue of the “consumer product in

consumer use or in any vessel” exception to the definition

of facility. Detrex believes that the Seventh Circuit in-

correctly interpreted $ 9601(9) of CERCLA. Certiorari

should be granted on this issue because: 1) the interpre-

tation of § 9601(9) presents an important federal ques-

tion of concern to all chemical manufacturers and sup-

pliers and to all transporters of useful hazardous sub-

stances; and 2) there is a split of authority concerning

the proper interpretation of this exception. The Court

should fashion a clear rule of law on how this provision

of CERCLA should be interpreted and applied because

of the sheer volume of useful hazardous substances de-

livered every day by truck, rail, and ship in the United

States.

The second issue raised by Detrex is whether a

CERCLA defendant is entitled to an equitable allocation

in a § 9607(a) action without a formal count invoking

§ 9613(f). The Seventh Circuit has imposed a technical

requirement upon CERCLA defendants by holding that a

formal counterclaim or a second lawsuit is necessary

before such an allocation can be made. Detrex asserts

that this conclusion, too, is erroneous. Certiorari should

be allowed on this issue because the decision of the

Seventh Circuit directly conflicts with three other circuit

court decisions. See infra Section II. The issue also pre-

sents an important question of federal law concerning the

proper allocation of response costs among those persons

responsible for contamination. The issue is a straight-

forward one and, therefore, its resolution need not be

complex.

On the eve of the reauthorization of CERCLA in 1994,

Detrex requests that the Court provide guidance concern-

ing these two important and recurring CERCLA issues.

Answering these questions now will likely help promote

cleanup efficiency. If these issues do not have to be

litigated in the future, the attention of the parties may

focus upon remediation and not litigation. Certainly, the

goal of more and prompt cleanups is worth pursuing.

I. DETREX IS NOT LIABLE UNDER CERCLA BE-

CAUSE ITS TRUCKS WERE NOT FACILTIES.

A. The Definitional Exception Refers to Facilities

That Contain Consumer Products.

CERCLA authorizes private parties to recover response

costs expended in cleaning up environmental contamina-

tion. Before such a recovery can be obtained, the de-

fendant must be determined a liable party under CERCLA.

To establish CERCLA liability, a plaintiff must satisfy

four elements:

1. the defendant must fall within one of the four

categories of liable parties under § 9607(a);

2. the hazardous substances must be released from

a facility or come to be located at a facility;

3. there must be a release or threatened release of

hazardous substances from a facility into the

environment; and

4. the release must cause the incurrence of response

costs consistent with the National Contingency

Plan.

See United States v. Alcan Aluminum Corp., 964 F.2d

252, 258-259 (3d Cir. 1992) and the decision of the

District Court, Appendix at 57a. If any element is not

satisfied, CERCLA liability does not attach. If liability

is not imposed under CERCLA, the plaintiff is not entitled

to recover response costs.

Detrex argues that Respondents are not entitled to

recover response costs from it because the second element

cannot be met i.e., the Detrex trucks which delivered the

TCE were not facilities by definition. When the TCE was

being delivered by Detrex’s truck drivers, the vehicles were

not facilities because the TCE contained in them was a

consumer product in consumer use or in a vessel. When

the TCE was spilled onto Respondents’ property, it was

in their facility and Detrex was no longer responsible for

it under‘ CERCLA. In short, Detrex argues that it was

not an owner or operator of a facility under CERCLA

$9607(a)(1). Judge Posner succinctly summarized

Detrex’s argument at 7a-8a in the Appendix.

This issue concerns the proper interpretation of the

definition of facility in § 9601(9) of CERCLA. The first

provision of the definition lists various physical objects,

including pipes, storage containers, and motor vehicles,

which contain or store hazardous substances. The second

portion of the definition is a catchall phrase intended to

include any site or area where a hazardous substance

exists. Congress chose to include within this definition an

exception so that the term facility does not include “any

consumer product in consumer use or any vessel.”

The analysis of the Seventh Circuit addresses this issue

in terms of whether the language of the exception should

be read literally or not. Judge Posner, while not agreeing

with the end result of Detrex’s analysis, concurred with

some of the underlying reasoning. The Seventh Circuit

concluded that the TCE was a consumer product by con-

concurring with the decision in Dayton Indep. Sch. Dist.

v. United States Mineral Prods., Co., 906 F.2d 1059 (Sth

Cir. 1990). Appendix at 6a-7a. Consequently, the TCE

at issue here was a consumer product. The Seventh Cir-

cuit went on to hold that only consumer products that are

themselves facilities are exempted from liability. Under

the interpretation advanced by Detrex, the liability ex-

clusion refers to facilities that contain or store hazardous

substances like tanker trucks. The Seventh Circuit held

that “[t]he exception is for facilities that are consumer

os)

yroducts in consumer use, not for consumer products con-

ained in facilities. Although read as it is written the ex-

ception is narrow, it is not meaningless, for the statute

defines ‘facility’ so broadly that it could be thought to

include a can of lye.” Appendix at 8a. The decision of

the Seventh Circuit is not correct because Judge Posner

failed to consider the last three words of the exception.

‘

This Court has pronounced several rules concerning stat-

utory interpretation which have application here. Inter-

pretation of statutes must begin with the language of the

law itself. Ardestani v. INS, ——— U.S. ——, 116 L. Ed.

2d 496, 112 S. Ct. 515 (1991). The Court will not look

to extraneous sources to aid in the interpretation of an

unambiguous statute. Freytag v. Commissioner of Int.

Rev., —— U.S. ——, 115 L. Ed. 2d 764, 111 S. Ct.

2631 (1991). “When we find the terms of a statute un-

ambiguous, judicial inquiry is complete except in rare and

exceptional circumstances.” Demarest v. Manspeaker, 498

U.S. 184, 190, 112 L. Ed. 2d 608, 111 S. Ct. 599

(1991) (citations omitted). Thus, judicial inquiry is not

necessary when the statutory language at issue is unam-

bicuous. Howe v. Smith, 452 U.S. 473, 69 L. Ed. 2d

171. 101 S. Ct. 2468 (1981) Reference to legislative

history is not necessary where the language of a statute

is clear. United States v. Ron Pair Enterprises, Inc., 489

U.S. 235, 241, 103 L. Ed. 2d 290, 109 S. Ct. 1026

(1989).

For scores of years, it has been recognized that every

word. clause. and part of a statute must be given effect.

Ginsbere & Sons, Inc. v. Popkin, 285 U.S. 204, 208. 76

L. Ed. 704, 52 S. Ct. 322 (1931). More recently. in

Weinberger v. Hynson, Westcott & Dunning, 412 US.

609, 633, 37 L. Ed. 2d 207, 93 S. Ct. 2469 (1973), the

Court reiterated “the well-settled rule of statutory con-

struction that all parts of a statute, if at all possible, are

to be given effect.” (citations omitted).

With these principles in mind, the holding of the Sev-

enth Circuit cannot stand. The Seventh Circuit held that

the exception applies to facilities that are themselves con-

sumer products in consumer use, as opposed to facilities

that contain consumer products. Judge Posner concluded

that § 9601(9) is unambiguous having not relied upon

legislative history or other sources for his interpretation.

Detrex agrees that the definition and its exception are

clear. There was error, however, because the interpreta-

tion of the Seventh Circuit renders meaningless the last

three words of the exception to the definition of facility

contrary to the well established rule that every word and

phrase of a statute must be given effect. Weinberger, 412

U.S. at 633. Judge Posner did not consider the last phrase

of the exception “or any vessel.”

The exception unambiguously provides that any con-

Sumer product in consumer use or in any vessel does not

fall under the definition of facility. As framed by the Sev-

enth Circuit, the issue is whether the exception applies

to hazardous substances or upon the physical objects in

which these materials are contained in or transported in

such as a tanker truck. The disjunctive language of the

statute clearly establishes that the exception applies to

facilities and vessels that contain hazardous substances.

The exception excludes “any consumer product in con-

sumer use” or “any consumer product in . . . any vessel.”

The alternative construction of the phrase is to read the

exception as excluding all vessels. Congress could not

have intended to exclude all vessels from the definition

of facility. Therefore, the exception applies to consumer

products in consumer use or consumer products in any

vessel. The Seventh Circuit’s opinion to the contrary was

erroneous.

Judge Posner indicated that a can of lye is an example

that would fall under the exception. Under the interpreta-

tion of the Seventh Circuit, it is the can that would not

be a facility by definition and, therefore, fall under the

exception. The can is not the environmental concern, it

is the lye inside the can that impacts the environment and

not the can itself. Under CERCLA, there is no logical

distinction, other than quantity, between a can of lye and

a tanker truck full of TCE or some other useful albeit

hazardous chemical. Since the can and the truck them-

selves do not pose threats to the environment, the intent

of the exception must necessarily focus on the hazardous

substance contained within the facility or vessel.

The statutory scheme and other provisions of CERCLA

Support Detrex’s position that the exception applies on

these facts. Statutory provisions cannot be read in a

vacuum. This Court has held that “[i]t is a fundamental

canon of statutory construction that the words of a stat-

ute must be read in their context and with a view to their

place in the overall statutory scheme.” Davis v. Michi-

gan Dept. of Treas., 489 U.S. 803, 809, 103 L. Ed. 2d

891, 109 S. Ct. 1500 (1989).

Liability under CERCLA is not absolute and, as dis-

cussed, there are a variety of exceptions to liability. F

example, spills of petroleum, no matter how large or smail,

are not covered by CERCLA. Additionally, the courts

have concluded that asbestos is not within CERCLA’s

domain. Several other statutory provisions enforce De-

trex’s argument that delivery spills of a useful consumer

product which also happens to be a hazardous substance

do not give rise to CERCLA liability. Such spills of haz-

ardous substances may give rise to liability under other

statutes like the HMTA or under common law theories.

Further, while there are no cases interpreting $ 9656 of

CERCLA, it is instructive on this issue. Section 9656(b)

of CERCLA provides that:

1. acommon or contract carrier is not liable under

CERCLA:

2. for a release of a hazardous substance during

the course of transportation;

3. if the transportation began prior to the effective

date of the listing and regulation of the substance

under the Hazardous Materials Transportation

Act, 49 U.S.C.A. $$ 1801, ef seq.:; or

4. for substances listed pursuant to § 9656(a), prior

to the effective date of such listing.

In addition, the definition of owner and operator in

$$ 9601(20)(B) and (C) provides transporter liability

exceptions. Common or contract carriers are exempted

from CERCLA liability under certain conditions. The

legislative history of CERCLA is replete with statements

of concern about the application of CERCLA “to trans-

portation and commerce and the burdens which such

application would impose.” 126 Conc. REc. S$30949

(daily ed. Nov. 24, 1980) (statement of Sen. Cannon).

Detrex cites these provisions and statements not for

the purpose of arguing their application to this case, but

rather, to demonstrate, in part, the statutory scheme of

CERCLA. CERCLA has exceptions to liability, several

of which apply to the transportation of hazardous sub-

stances. The exception applicable here, taken in context,

negates CERCLA liability as to Detrex because it was

transporting a useful consumer product. The application

of this exception is supported by other provisions within

CERCLA. The other provisions reflect a Congressional

intent to negate liability of common or contract carriers

for spills during the course of transportation. That cir-

cumstance, spills during transportation, does not give rise

to CERCLA liability; however, other causes of action may

be applicable. Similarly, Detrex argues that the exception

found in § 9601(9) negates its liability under CERCLA,

although liability may have existed under other statutory

or common law theories.

B. The Interpretation of § 9601(9) Presents an Impor-

tant Question of Federal Law.

This case presents important questions of national sig-

nificance to a wide range of the environmentally-regulated

business community. Because of the importance of this

case to chemical manufacturers and suppliers, shippers,

common and contract carriers, and ultimately the con-

sumer, the Court should grant this petition. The issue

here concerns useful chemicals consumer products which

also happen to be regulated hazardous substances. These

materials have become indispensable to every facet of our

lives. For example, chemicals are used to make auto-

mobiles and textiles. They are also used in the health

care and education professions and in a multitude of

other industries.

Tons of chemicals consumer products are transported

every day in the United States. “[T]he Department of

Transportation estimates that approximately 4 billion

tons of regulated hazardous materials are transported each

year and that approximately 500,000 movements of haz-

ardous materials occur each day.”' It is estimated that

about 520 million tons of chemicals and allied products

were shipped by truck, rail, ship, and other means in

1992." Chemical transportation is economically signifi-

cant.” Useful chemicals, which are also regulated haz-

ardous substances, are moved by truck, rail, and over

water.” A large segment of the environmentally regulated

'49 U.S.C.A. App. § 1801 HiIstToRICAL AND STATUTORY NOTES,

Congressional Findings: 1990 Amendment.

* CHEMICAL MANUFACTURERS ASSOCIATION, U. S. CHEMICAL IN-

DUSTRY STATISTICAL HANDBOOK 151 (1993).

*“The volume of chemical and allied products moved within the

United States is important to the transportation services industry,

generating nearly $10 billion in revenues for trucking companies,

railroads, barge operators, and other carriers.” /d.

4 For example:

About 52 percent of all chemicals and allied products tonnage

is shipped by trucks. In 1992, an estimated 269 million tons

community has more than a passing interest in how the

definition of facility is to be interpreted.

C. There is a Split of Authority Among the Circuits

Concerning the Scope of the Exception.

The decision of the Seventh Circuit is in direct conflict

with another federal circuit court decision. In Dayton

Indep., plaintiffs brought suit to recover response costs

incurred in removing ceiling and fireproofing products

which contained asbestos from school buildings. Accord-

ing to the plaintiffs, § 9607 granted them a cause of action

against the generator-suppliers manufacturers who released

the asbestos by placing it in the building materials which

found its way into the schools.

After discussing the term disposal, the Fifth Circuit

focused upon the definition of facility and its exception.

It held that:

| T]he provision expressly exempts consumer products

from the definition of facility for purposes of

determining liability under the statute. 42 U.S.C.

S$ 9601(9). Appellants assert that this exemption

were shipped via this mode. About 65 percent of the chemicals

shipped via trucks is by truckloads for hire and about 5 percent

is via less-than-truckload for hire. The U.S. chemical industry

generates about $4.4 billion in revenues to the trucking indus-

try. The remaining 30 percent of chemicals shipped via trucks

is by private carriers (i.e. chemical companies. )

Over the past several decades, trucks have taken market share

from the railroads in transporting chemicals because of the

flexibility and quick delivery that this mode of transport offers.

This has become increasingly important with the advent of

lean manufacturing and just-in-time (JIT) inventory manage-

ment techniques. Trucks have increasingly been used for bulk

shipments of intermediate chemicals, although trucking is most

widely used for small-volume packaged chemical products.

Trucks are the most common mode of transport used in ship-

ping industrial gases and consumer products.

Id.

applies to the “facility” into which they allegedly dis-

posed of the asbestos—the building materials. Since

the building materials are without a doubt consumer

products, they cannot be held liable for disposing of

asbestos “at a facility”.

. .. The provision exempting consumer products

obviously was meant to protect from liability those

who engage in production activities with a useful

purpose, as opposed to those engaged in the disposal

of hazardous substances. It is clear that Congress did

not intend CERCLA to target legitimate manufac-

turers or sellers of useful products. Rather, taken in

context, the provision reflects Congress’ desire to hold

liable those who would attempt to dispose of hazard-

ous wastes or substances under various deceptive

guises in order to escape liability for their disposal.

Dayton Indep., 906 F.2d at 1065-1066 (footnote omitted ).

There are many important legal and factual similarities

between Dayton Indep. and this case. Both lawsuits in-

volved the recovery of response costs under $ 9607(a) of

CERCLA. The TCE and the asbestos containing build-

ing materials were both consumer products and useful

products not hazardous wastes. The plaintiffs in both

actions claimed that the suppliers and manufacturers were

liable for the disposal of a hazardous substance. Also.

the Fifth Circuit and the Seventh Circuit both squarely

addressed the scope of the application of the exception

to the definition of facility. Detrex believes that the Fifth

Circuit would have favored its interpretation of the ex-

ception. There is little. if any, distinction to be made

between the sale and delivery of the asbestos containing

building materials supplied by the defendants in Dayton

Indep. and the sale and delivery of TCE by Detrex.

Most importantly, the two courts differed concerning

what the focus or intent of the exception is. The Seventh

Circuit equated the consumer product to a tacility i.e¢., the

exception applies to facilities that are consumer products.

For Judse Posner, the exception applies to the physical

object which contains the hazardous substance: if it is a

consumer product, the exception applies. The approach

of the Fifth Circuit is diametrically opposed. In Dayton

Inden., the decision hinged upon the asbestos containing

building products themselves: according to that Court.

legitimate manutacturers and sellers of useful products

were not the target of Congress when it enacted CERCLA.

For the Fifth Circuit, the focus is upon the alleged con-

taminant contained within the facility: if the pollutant

i.e.. asbestos containing building materials are consumer

products, the exception applies. The same argument by

Detrex was rejected by the Seventh Circuit. By analogy,

the test of the Seventh Circuit centers on the can which

contains the lye, while the Fifth Circuit focuses upon the

lye within the can.

The district courts have also been struggling with this

issue and are likely to continue to do so unless this Court

resolves it. Detrex respectfully directs the Court’s atten-

tion to the decisions in Verno» Village, Inc. v. Gottier,

755 F. Supp. 1142 (D. Conn. 1990) and Electric Power

Bd. of Chattanooga v. Westinghouse Electric Corp., 716

F. Supp. 1069 (E.D. Tenn. 1988) in support of its argu-

ment. Respondents are relying on cases like Reading Co.

v. City of Philadelphia, 823 F. Supp. 1218 (E.D. Pa.

1993) and CP Holdings, Inc. v. Goldberg-Zoino & Assocs.,

Inc., 769 F. Supp. 432 (D.N.H. 1991).

The Court grants petitions for certiorari based upon

confiicts among district courts. In United States v. Con-

stantine, 296:0.S& 287, 290, 80 L.Ed. 233, 56 $. Ct. 223

(1935). the Court granted a petition for writ based upon,

iri part. “the many other cases pending in which action is

awaiting authoritative settlement of the question pre-

sented.” The Court is requested to again follow this

precedent.

D. The Court has the Opportunity to State a Com-

plete and Understandable Rule of Law.

This issue is a straightforward one involving conflicting

interpretations of an unambiguous definition in CERCLA.

The Court can resolve this argument with a clear rule on

$ 9601(9) and its exception. Does the exception apply

to. deliveries of useful consumer products which also

happen to be hazardous substances and_thus exempt these

materials from CERCLA liability? Or, does the exception

have no application, leaving Detrex and other commercial

suppliers and transporters liable under CERCLA because

the definition of facility includes accidental delivery spills

of these consumer products from tanker trucks, rail cars.

and ships?

II. CERCLA LAWSUITS BETWEEN PARTIES UNDER

§9607(a) ARE ACTIONS FOR CONTRIBUTION

REQUIRING AN EQUITABLE ALLOCATION.

A. Detrex was Entitled to an Equitable Allocation

After the Imposition of Joint and Several Liability.

This issue involves two closely related provisions of

CERCLA, specifically § 9607(a) and 8& 9613(f)(1).

Section 9607(a) is the liability provision within CERCLA

which creates certain categories of responsible parties.

By creating four categories of strictly liable parties under

§ 9607(a), Congress intended for the section to further

its chief goal of prompt cleanups. This section of

CERCLA was a part of the original 1980 enactment and

gave the United States Environmental Protection Agency

a strong enforcement tool. Section 9613(f)(1) was added

to CERCLA in 1986 to reduce the harsh effects of strict

and joint and several liability. Equitable apportionment

is accomplished via § 9613(f)(1) in the nature of con-

tribution by which the liability percentage of each party

is established. The purpose of § 9613(f)(1) was to codify

the already existing right of CERCLA parties to gain

contribution under § 9607(a).°

In the Seventh Circuit, Detrex argued that a second

lawsuit should not be required to obtain an apportion-

ment. These two sections work in tandem, they do not

create separate causes of action. Liability is imposed

under § 9607(a) and liability percentages are assigned

using $ 9613(f)(1) for guidance. Respondents’ lawsuit

against Detrex was filed under only § 9607(a) of

CERCLA and is technically one for contribution. If a

non-governmental party files a CERCLA § 9607(a) ac-

tion, both liability and apportionment should be deter-

mined in the same proceeding. The Seventh Circuit

rejected this analysis reasoning that Detrex could have

filed a separate counterclaim and not be out of pocket

more than its fair share. Detrex attempted to file such

a counterclaim, however, the District Court denied the

motion as untimely. The practical effect of the Seventh

Circuit’s opinion is to deny an allocation unless a formal

claim is made under § 9613(f)(1). Pure § 9607(a)

claims, in the Seventh Circuit, now result in CERCLA

defendants being liable for all cleanup costs unless a

counterclaim or second lawsuit is filed.

Nothing in the express language of CERCLA prevents

both liability and contribution issues from being ad-

dressed in $ 9607(a) lawsuits. Private actions between

CERCLA litigants are for contribution.” The case law also

overwhelmingly favors Detrex’s position. In Amoco Oil

Co. v. Borden, Inc., 889 F.2d 664 (Sth Cir. 1989), plain-

° H.R. REP. No. 99-253(1), 99th Cong., 2d Sess. 59 (1986), re-

printed in 1986 U.S.C.C.A.N. 2861. “This section clarifies and con-

firms the right of a person held jointly and severally liable under

CERCLA to seek contribution from other potentially liable parties,

when the person believes that it has assumed a share of the cleanup

or cost that may be greater than its equitable share under the

circumstances.”

6 Russo, Contribution Under CERCLA: Judicial Treatment After

SARA, 14 CoLuM. J. ENVTL. L. 267, 273 (1989).

casa eccemaaaa eta ccmeaeareacerareemmmmmmmammmammaamaa ial

tiff brought suit to recover response costs under CERCLA.

After concluding that the plaintiff was jointly and severally

liable with the defendant for response costs, the Fifth

Circuit held that “[wJhen one liable party sues another

to recover its equitable share of the response costs, the

action is one for contribution, which is specifically recog-

nized under CERCLA. See § 9613(f).” Amoco Oil, 889

F.2d at 672. The Third Circuit agrees with this holding.’

In Jn re Dant & Russell, Inc., 951 F.2d 246 (9th Cir.

1991), the Court provided further support for Detrex’s

position that liability percentages should be assigned in

§$ 9607(a) lawsuits. The plaintiff filed an action “under

§ 9607(a)(4)(B)” for past and future response costs.

In re Dant & Russell, 951 F.2d at 247. The Ninth Cir-

cuit expressly held that $ 9613(f)(1) was applicable be-

cause the lawsuit was a claim under § 9607(a) of

CERCLA. Equitable apportionment under § 9613(f)(1)

was explicitly authorized after liability was established un-

der § 9607(a). In re Dant & Russell, 951 F.2d at 249.

A substantial number of district court opinions have

also apportioned liability in § 9607(a) lawsuits. In

Weyerhaeuser Co. v. Koppers Co., 771 F. Supp. 1420

(D. Md. 1991), the Court allocated damages in a § 9607

(a) lawsuit between two strictly liable parties. The Court

in United States v. Asarco, Inc., 814 F. Supp. 951, 956

7In United States v. Alcan Aluminum Corp., 964 F.2d 252, 270

n.29 (3d Cir. 1992), the Third Circuit explained that:

[I]n a sense, the “contribution” inquiry involves an analysis

similiar to the “divisibility” inquiry, as both focus on what

harm the defendant caused. However, we believe that this

inquiry, to the extent that it is the same as that discussed in

above-noted cases, is best resolved at the initial liability phase

and not at the contribution phase since it involves precisely

relative degrees of liability. Thus, if the defendant can prove

that the harm is divisible and that it only caused some portion

of the injury, it should only be held liable for that amount.

In our view, the logical consequence of delaying the apportion-

ment determination may well be drastic ....

(D. Colo. 1993) concluded “that where parties are jointly

and severally liable under CERCLA, response costs can

only be shifted by one party to another by way of con-

tribution.” In Avnet, Inc. v. Allied-Signal, Inc., 825 F.

Supp. 1132, 1139 (D.R.I. 1992), the District Court held

that “[i]t is clear from the analysis of CERCLA and the

history behind it that the plaintiffs’ claim, whatever it’s

called, is one for contribution.”

Respondents’ lawsuit was filed under § 9607(a) of

CERCLA for the recovery of response costs requiring a

two step analysis. The first step of the analysis is to de-

termine if liability exists under § 9607(a). Both Re-

spondents and, arguably, Detrex are liable under § 9607

(a). Therefore, the second step of the analysis should

require a liability allocation between the two parties in-

stead of severally imposing all response costs upon

Detrex. This lawsuit is a dramatic example of why equi-

table allocation issues under $ 9613(f)(1) should be con-

sidered in § 9607(a) actions. Although Detrex denies

CERCLA liability, the most it can be responsible for ts

a very small percentage of all the TCE at the facility.

Despite what is at worst an extremely minor and localized

contribution, Detrex is liable for all past and future re-

sponse costs totalling millions of dollars. Assigning li-

ability percentages could have prevented this inequitable

result.

The Tenth Circuit, in County Line Inv. Co. v. Tinney,

933 F.2d 1508 (10th Cir. 1991), explored the close re-

lationship between § 9607(a) and § 9613(f)(1). In

County Line, the owners of a landfill brought an action

under § 9607(a) of CERCLA against a former owner

for the recovery of response costs. In addition, the plain-

tiffs filed a count under § 9613(f)(3)(B). The District

Court dismissed plaintiffs’ § 9613(f) claim on the basis

that the remedial action at the site was not consistent with

the National Contingency Plan (“NCP”). The NCP is

a set of regulations which governs how environmental

remediations must be performed. Plaintiffs argued on ap-

peal that consistency with the NCP was not an element

of a claim under § 9613(f); they asserted that they could

seek contribution without reference to $ 9607(a). County

Line, 933 F.2d at 1516. The Tenth Circuit rejected plain-

tiffs’ argument concluding that § 9607(a) is the source

of a party’s claim for contribution. County Line, 933

F.2d at 1516. After briefly reviewing some of the legisla-

tive history of § 9613(f), the Tenth Circuit heid that

“[njothing in this language suggests that Congress in-

tended to do anything more than create a mechanism for

apportioning CERCLA-defined costs when it added sec-

tion 113(f) to the statute.” County Line, 933 F.2d at

1517.

The decision of the Seventh Circuit on this issue is

contrary to CERCLA’s unambiguous provisions and its

statutory scheme. Detrex was entitled to an equitable

apportionment in this § 9607(a) lawsuit. Sections 9607

(a) and 9613(f)(1) must be construed together because

the latter does not create a separate cause of action. The

analysis proceeds in two steps: 1) strict and joint and

several liability is imposed on the CERCLA parties un-

der § 9607(a): and 2) because of the imposition of joint

and several liability, a right to contribution exists as pro-

vided for in § 9613(f)(1). Section 9613(f)(1) was in-

tended to provide for equitable allocations after CERCLA

liability is imposed in § 9607(a) actions. Both liability

and contribution issues should be addressed in § 9607(a)

lawsuits.

B. This Petition for a Writ of Certiorari Should be

Granted Because There is a Split of Authority on

This Issue.

The Seventh Circuit rejected Detrex’s argument in this

regard and, thus, allocation issues are not addressed in

$ 9607(a) actions unless a counterclaim is filed. That

formality should not be required and is contrary to the

opinions of at least four other circuits, several district

courts, and one commentator. In the Fifth Circuit under

the Amoco Oil decision, when one party sues another,

it is an action for contribution. In Alcan Aluminum, the

Third Circuit held that the contribution inquiry should be

addressed at the initial liability phase under § 9607(a).

Section 9613(f)(1) must be applied in § 9607(a) claims

in the Ninth Circuit as decided in Jn re Dant & Russell.

The decisions of the Third, Fifth, Ninth, and Tenth

Circuits directly conflict with Judge Posner’s opinion.

Only in the Seventh Circuit are allocation percentages

not assigned in § 9607(a) actions. In the Seventh Circuit,

a formal counterclaim or even a second lawsuit is neces-

sary to obtain an assessment of liability shares. No such

technical requirement exists in any of the other four

circuits which have addressed the issue. The Seventh

Circuit’s interpretation of the relationship between § 9607

(a) and § 9613(f)(1) directly conflicts with the decisions

in four other circuits. Because a conflict exists among the

circuits, Detrex’s petition for a writ of certiorari should

be granted.

C. This Issue Presents an Important Question of the

Proper Interpretation of a Federal Environmental

Statute.

The interpretation of the relationship between § 9607

(a) and § 9613(f)(1) is of great significance to virtually

all CERCLA parties because of the allocation issue which

concerns who pays how much for remediations. The

practical effect of the Seventh Circuit’s opinion eliminates

the right of litigants to obtain an equitable allocation of

liability unless a formal claim is made. Such a result was

not intended by Congress when it added § 9613(f)(1)

to CERCLA in 1986.

According to the Seventh Circuit, an assessment of

each litigant’s liability is not appropriate in a § 9607(a)

action unless a formal counterclaim or a second lawsuit

is filed. Under this approach, CERCLA plaintiffs can

————— eee

obtain a recovery of all past and future response costs

under §$ 9607(a) and be immune from a claim for con-

tribution effectively eliminating an allocation of liability.

Stated hypothetically, the Respondents herein could have

entered into a settlement, embodied in a consent decree,

with the United States Environmental Protection Agency

or the Indiana Department of Environmental Manage-

ment. The terms of the consent decree would dictate the

requirements of the remediation. Respondents would in-

cur response costs in conducting the investigation and re-

mediation.

By virtue of the settlement with the government, how-

ever, Respondents could then be entitled to contribution

protection under § 9613(f)(2) of CERCLA. Section

9613(f)(2) immunizes parties who settle with the govern-

ment from contribution actions by others “regarding mat-

ters addressed in the settlement.” Thus, had the Respond-

ents settled with the government for the investigation and

cleanup of their facility, they could have received contri-

bution protection.

Continuing with this hypothetical, Respondents could

then file suit against Detrex for the recovery of response

costs pursuant to § 9607(a). Under the Seventh Circuit’s

interpretation of this issue, Respondents would be able

to recover all of their response costs from Detrex in that

proceeding. According to Judge Posner, Detrex could

avoid being out of pocket by filing a counterclaim or a

second lawsuit under § 9613(f)(1). Detrex, however,

would be precluded from doing so because the Respond-

ents would have contribution protection by operation of

S$ 9613(f)(2). Respondents could recover all of their

response costs from Detrex under § 9607(a). Detrex

would have no right of contribution against Respondents

because of $ 9613(f)(2)’s preclusive effect.

Such a result could not have been intended by Con-

gress. The goals of CERCLA are prompt cleanups and

fair-share liability allocations among those responsible for

the contamination. Under the Seventh Circuit’s rationale,

parties will enter into settlements with the government and

be able to recover all response costs under § 9607(a) and

be immune from contribution claims. Because of the real

danger presented by the opinion of the Seventh Circuit,

allocation issues must be addressed in § 9607(a) actions.

If the decision of the Seventh Circuit stands, CERCLA

defendants nationwide will be jointly and severally liable

to settling parties for all cleanup costs and unable to

obtain contribution. This very real circumstance justifies

granting Detrex’s petition for a-writ of certiorari.

D. This Issue Should be Resolved with an Uncompli-

cated Rule of Law.

The resolution of this issue is not complex. Simply, the

issue is whether private CERCLA parties are entitled to

an equitable allocation of liability in § 9607(a) actions.

The language of CERCLA and many court decisions favor

an affirmative answer to this issue. To hold otherwise

invites an injustice because subsequent contribution actions

can be negated by virtue of the contribution protection

afforded under § 9613(f)(2). This petition for a writ

of certiorari should be granted because the Court can

provide clear guidance on this issue.

CONCLUSION

Detrex’s petition for a writ of certiorari should be

granted with respect to both issues. The facility issue is of

vital significance to a very large section of the Nation’s

economy. The decision of the Seventh Circuit is in direct

conflict with at least three other circuits with respect to the

allocation issue. If the Court decides to consider this case,

it could fashion clear and necessary rules of law and pos-

sibly promote cleanup efficiency. For all of the reasons

detailed in this petition, Detrex respectfully requests that

this case be heard.

Respectfully submitted,

JOHN GERALD GLEESON *

MICHAEL V. SUCAET

Counsel of Record for Petitioner

HOWARD & HOWARD

The Pinehurst Office Center

Suite 250

1400 North Woodward Avenue

FERD J. CHMIELNICKI Bloomfield Hills, MI 48304

ROBERT M. CURRIE (313) 645-1483

Of Counsel for Petitioner Counsel for Petitioner

* Counsel of Record

Dated: November 5, 1993

sal

APPENDICES

APPENDIX A

IN THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

No. 92-2365

AMCAST INDUSTRIAL CORPORATION and

ELKHART PRropuctTs CORPORATION,

Plaintiffs-A ppellees,

DETREX CORPORATION,

Defendant-A ppellant.

Appeal from the United States District Court for the

Northern District of Indiana, South Bend Division

No. 88 C 620—Robert L. Miller, Jr., Judge

ARGUED JANUARY 4. 1993—_DeEcIDED AucustT 12, 1993

Before Posner, FLAUM, and KANNE, Circuit Judges.

POSNER, Circuit Judge. This appeal requires us to

explore the outer limits of the “Superfund” statute—the

Comprehensive Environmental Response, Compensation

and Liability Act (CERCLA). 42 U.S.C. §§ 9601 et seg.

We must decide whether. as the district court concluded.

the Act extends to any chemical spill that creates an

environmental hazard. This is an important question that

has not until now been the Subject of an appellate case.

Our conclusion is that the spiller, but not the shipper of

the chemical that spilled, is within the Act’s long reach.

The facts are simple enough, and we shall make them

even simpler where we can do so without affecting the

analysis. The principal plaintiff Elkhart (Amcast is its

parent, and can be ignored), manufactures copper fittings

at a plant in Indiana. One of the chemicals that it uses in

the manufacturing process is the solvent trichloroethylene

(TCE). Elkhart used to buy TCE in liquid form from a

number of chemical manufacturers, including the defend-

ant, Detrex. Detrex sometimes delivered the solvent in

its own tanker trucks and sometimes hired a common

carrier, Transport Services, to deliver it. In 1984, TCE

was discovered in the groundwater beneath a pharmaceu-

tical plant adjacent to Elkhart’s plant. There is evidence

that both Detrex’s and Transport Services’ drivers some-

times spilled TCE accidentally on Elkhart’s premises while

trying to fill Elkhart’s storage tanks and that some of this

spillage found its way into the groundwater beneath the

pharmaceutical plant, although an expert hired by Detrex

has estimated that out of almost 800 gallons of TCE that

have been found in the soil and groundwater beneath the

pharmaceutical plant, no more than 49 came from these

delivery spills, the rest having leaked from the storage

tanks or a waste-disposal pit or the plant itself or been

spilled by other suppliers’ drivers.

The Superfund statute, so far as bears on this case, im-

poses liability for “response costs” (the costs of eliminat-

ing an environmental hazard) on the “owner and operator

of a... facility” from which a hazardous substance has

been released, § 9607(a)(1), and on “any person who by

contract . . . arranged for disposal or treatment, or ar-

ranged with a transporter for transport for disposal or

treatment, of hazardous substances owned or possessed by

such person.” § 9607(a)(3). “Facility” is broadly defined

as “(A) any building, structure, installation, equipment,

pipe or pipeline . . . , well, pit, pond, lagoon, impound-

ment, ditch, landfill, storage container, motor vehicle, roll-

ing stock, or aircraft, or (B) any site or area where a

hazardous substance has been deposited, stored, disposed

of, or placed, or otherwise come to be located.” § 9601(9).

Elkhart is admittedly a “responsible person,” as an entity

liable for response costs is called; but the statute permits

one responsible person to recover all or part of its response

costs from another. § 9607(a)(4)(B). Having spent

more than $1 million on cleaning up the contamination

caused by the spillage of TCE from its facility, Elkhart

brought this suit to establish that Detrex was a responsi-

ble person, too, and to shift Elkhart’s response costs

(that is, the $1 million it had incurred in cleaning up the

contamination) from itself to Detrex.

A potentially responsible person who, like Detrex., has

been sued is entitled to seek, by way of counterclaim.

contribution from the plaintiff for the amount of response

costs fairly attributable to the conduct of the plaintiff as

district from that of the defendant. § 9613(f). Rather

than file a counterclaim against Elkhart. Detrex argued to

the district judge that in the course of adjudicating Elk-

hart’s claim he had to apportion responsibility for the costs

between the parties. The judge rejected this argument,

together with Detrex’s more fundamental argument that

it is not a responsible person within the meaning of the

Statute. and entered judgment in favor of Elkhart for the

entire response costs that Elkhart had incurred. Eventu-

ally Detrex filed a separate action for contribution from

Elkhart; that suit is pending in the district court. § 9613

(f)(1): United States v. R.W. Mever, Inc., 932 F.2d 568.

S71 n. 2 (6th Cir. 1991). Detrex was entitled to proceed

in that fashion. The statute is explicit that a counterclaim

for response costs is not compulsory, §§ 9613(f)(1),

(g)(3)(A), a result consistent with general law. Detrex’s

claim against Elkhart, dependent as it was on Elkhart’s

establishing Detrex’s liability to it, had not matured when

Elkhart’s suit was filed. Fed. R. Civ. P. 13(a): Harbor

Ins. Co. v. Continental Bank Corp., 922 F.2d 357, 360

(7th Cir. 1990); 6 Charles Alan Wright, Arthur R. Miller

& Mary Kay Kane, Federal Practice and Procedure § 1411

at p. 83 (2d ed. 1990).

The argument that the judge had to apportion liability

between Detrex and Elkhart in Elkhart’s suit makes no

sense, so we dispatch it at the outset. The statute is clear

that whoever (like Elkhart) incurs costs in cleaning up a

contaminated site can seek to recover them from any re-

sponsible person, and if the responsible person believes as

Detrex does that his contribution to the mess was trivial

and wants the point established promptly he can counter-

claim for as large a percentage of the costs as he thinks

he can prove was due to the plaintiff's own conduct. United

States v. RW. Meyer, Inc., supra, 932 F.2d at 571 n. 2;

United States v. Mexico Feed & Seed Co., 764 F. Supp.

565, 573 (E.D. Mo. 1991), rev’d in part on other grounds,

980 F.2d 478 (8th Cir. 1992). The counterclaim if

- promptly filed will doubtless be tried at the same time as

the main claim, so the defendant will at no time be out of

pocket by more than the share of the response costs at-

tributable to his own conduct. Obviously Detrex could

have counterclaimed without giving up its main argument—

that it is not a responsible person and therefore is not

liable for any part of the response costs. We do not know

why it waited and filed a separate suit.

The difficult question is whether Detrex is within the

grasp of the Superfund law at all; if not, Elkhart’s suit

must fail irrespective of any division of responsibilities be-

tween Elkhart and Detrex. Elkhart argues that Detrex

has forfeited this ground of appeal by failing to present

it to the district court. Detrex had argued to the district

court on a variety of grounds that it was not liable to

the plaintiff under that law, and one of these grounds was

that it was not an arranger for disposal or treatment. The

fact that it did not marshal in support of this ground all

the relevant legislative provisions and history did not work

a forfeiture. Dawson v. General Motors Corp., 977 F.2d

eee

369, 372 n. * (7th Cir. 1992); Locke v; Bonello, 965

F.2d 534, 536 n. 1 (7th Cir. 1992): cf. Bellotti v. Baird,

428 U.S. 132, 143 n. 10 (1976); but see Elder y. Hollo-

way, 975 F.2d 1388, 1392-93 (1991), rehearing en banc

denied, 984 F.2d 991 (9th Cir. 1993) (per curiam), cert.

granted, 61 U.S.L.W. 3868 (U.S. June 29. 1993). But

Detrex tacitly conceded in the district court that it was,

though not an arranger for disposal. an owner of a facility,

within the meaning of the statute. Detrex thus conceded

a ground that it now seeks to raise with us, that it was not

an owner of a facility; and failure to have presented to the

district court a ground on which reversal is being urged is

a more serious matter than failing to Support a ground

with the arguments or authorities that the appellate court

finds persuasive. The rule in civil cases is that except with

regard to jurisdictional issues and issues involving comity—

the mutual respect owed by sovereigns and quasi-sover-

eigns, such as the states—a ground not raised in the dis-

trict court cannot be used to reverse that court. Old Re-

public Ins. Co. v. Federal Crop Ins. Corp., 947 F.2d 269.

276-77 (7th Cir. 1991): Zharaz y. Hartigan, 763 F.2d

1532, 1544 (7th Cir. 1985), aff’d by an equally divided

Court under the name Hartigan v. Zharaz, 484 U.S. 171

(1987). The Supreme Court has told us. however, that

the rule is not absolute, Singleton v. Wulff, 428 U.S. 106.

121 (1976); see also Arcadia v. Ohio Power Co., 498 USS.

73, 77 (1990); id. at 86 (concurring opinion); U.S. Na-

tional Bank vy. Independent Insurance Agents of America,

Inc., 113 S. Ct. 2173, 2178-79 (1993). a point upon

which we have built in carving an exception for plain

errors in civil cases. (The civil rules contain no counter-

part to Rule 52(a) of the criminal rules, which allows

reversal on the basis of plain errors even if they had not

been drawn to the attention of the trial court.) Deppe v.

Trippe, 863 F.2d 1356. 1362 (7th Cir. 1988). Occa-

sional flat statements in our cases that there is no plain

error doctrine in civil cases, e.g., United States y. Caputo,

978 F.2d 972, 974 (7th Cir. 1992), which puzzled the

court in Hudak v. Jepsen of Illinois, 982 F.2d 249, 251

n. | (7th Cir. 1992), implicitly refer to error in jury

instructions, a setting to which Rule 51 of the civil rules

has been interpreted to make the doctrine of plain error

inapplicable. Deppe v. Trippe, supra, 863 F.2d at 1361-62.

Forfeiture is a sanction, and sanctions should be re-

lated to harm done or threatened. In the rare case in

which failure to present a ground to the district court

has caused no one—not the district judge, not us, not

the appellee—any harm of which the law ought to take

note, we have the power and the right to permit it to be

raised for the first time to us. Rosser v. Chrysler Corp.,

864 F.2d 1299, 1306 n. 7 (7th Cir. 1988); Charlton v.

United States, 743 F.2d 557, 561 n. 5 (7th Cir. 1984)

(per curiam). This is a suitable case in which to exercise

our power of lenity. The new ground is fully argued in

the brief of the appellant, so that Elkhart had—and it

took—a full opportunity to respond. The ground rests

entirely on a pure issue of statutory interpretation, as

to which the district judge’s view, while it would no doubt

be interesting, could have no effect on our review which

is plenary on matters of law. It is unrealistic to think

that if Detrex had made the argument to the district court

and prevailed, there would have been no appeal. The

appeal just would have been filed by Elkhart rather than

by Detrex. The issue having been fully briefed and argued,

there is no reason to defer its resolution to another case.

There will be no better time to resolve the issue than

now.

Each of the tanker trucks owned by Detrex in which it

delivered TCE to Elkhart constituted prima facie a “facil-

ity” within the meaning of the Superfund law. § 9061

(9)(A), contained a hazardous substance, namely TCE,

and “disposed of” it when the truck spilled it, because

the statute defines disposal to include spilling. $$ 6903(3),

9601(29). The statutory definition of facility excludes,

however, a “consumer product in consumer use.”

§ 9601(9). Neither party suggests that the term ‘“con-

sumer product” is limited to products used by consumers

as distinct from ones consumed by business firms and

other institutions. Dayton Independent School District vy.

U.S. Mineral Products Co., 906 F.2d 1059, 1065-66 (5th

Cir. 1990), holds correctly in our view, that asbestos

products incorporated into walls and ceilings of school

buildings are consumer products within the meaning of

the Superfund law. The difficult question is whether the

reference to consumer product in section 9601(9), the

definition of “facility,” is to be read literally.

If it is read literally, the only consumer product ex-

empted by the statute is the consumer product that is

a facility. The alternative is to read the exemption as re-

ferring to facilities that contain consumer products. Under

this alternative reading, as long as Elkhart was using TCE

in its plant in the ordinary course, with no spills or leaks,

it was not the owner of a “facility” within the meaning

of the statute. The Dayton decision even suggests that

the school buildings themselves might have been consumer

products within the meaning of the statute, 906 F.2d at

1065 n. 4, and likewise Elkhart’s plant, so long as it was

merely manufacturing useful products and not creating

hazardous wastes. That, however, would be an extraor-

dinarily strained reading of “consumer product.”

Once Elkhart finished using the TCE in its manufac-

turing process—once consumer use passed over into waste

disposal, as happened when Elkhart dumped the used

TCE into a waste-disposal pit on its premises—Elkhart

became, if the statutory reference to a facility that is a

consumer product is interpreted to mean a facility that

contains a consumer product, a responsible person, as a

facility owner no longer sheltered by the exception for

consumer products in consumer use. Continuing with

this interpretation of the consumer-product exception, and

assuming reasonably enough that the transportation of a

consumer product to the customer is as much a consumer

use as the consumption of the product in the customer’s

manufacturing process (the trucks themselves might be

thought consumer products. within the extended meaning

attached to this term in the Dayton footnote, but we reject

sO strained an interpretation of the term), we would con-

clude that until the TCE transported in Detrex’s trucks

spilled, it was a consumer product in consumer use. It

ceased to be in consumer use when it spilled; but the

spilled TCE was no longer in the trucks or any other

property owned by Detrex, and when it hit the ground it

was in premises owned by Elkhart, and Elkhart thus be-

came the facility owner and a responsible person.

This approach does excessive violence to the statutory

language. The exception js for facilities that are consumer

products in consumer use, not for consumer products con-

tained in facilities. Although read as it is written the

exception is narrow, it is not meaningless, for the stat-

ute defines “facility” so broadly that it could be thought

to include a can of lye. Since Detrex, not Elkhart, was

responsible for the environmental damage resulting from

the spillage of TCE from Detrex’s trucks, there is no

anomaly, so far as the purpose of the Superfund statute is

concerned, in deeming Detrex a responsible person along

with Elkhart. A literal interpretation that furthers the

statute’s purpose is hard to beat.

Irrespective of the issue of consumer product and con-

sumer use, however, Detrex was a responsible person with

respect to the TCE that was spilled by trucks owned by

Transport Services only if by hiring Transport Services

to carry the stuff to the Elkhart plant Detrex “arranged

with a transporter for transport for disposal or treatment”

of TCE. § 9607(a)(3). Detrex hired a transporter, all

right, but it did not hire it to spill TCE on Elkhart’s

premises. Although the statute defines disposal to include

spilling, the critical words for present purposes are “ar-

ranged for.” The words imply intentional action. The

only thing that Detrex arranged for Transport Services

——————

to do was to deliver TCE to Elkhart’s storage tanks. It

did not arrange for spilling the stuff on the ground. No

one arranges for an accident, except in the sinister sense,

not involved here, of “staging” an accident—that is,

causing deliberate harm but making it seem accidental.

Statutes sometimes use words in nonstandard senses,

and do so without benefit of a definitional section. (The

Superfund statute does not define “arrange for.”) Elkhart

argues that we can tell that Congress was doing that here

because the provision in question speaks of “disposal” and

we know that “disposal” includes accidentally spilling. But

since context determines meaning, the same word can mean

different things in different sentences—to monopolize a

conversation doesn’t mean the same thing as to monop-

olize the steel industry—even in the same statute, espe-

cially when the statute does not attempt to impose a

single meaning by defining the word. In the context of

the operator of a hazardous-waste dump, “disposal” in-

cludes accidental spillage; in the context of the shipper

who is arranging for the transportation of a product,

“disposal” excludes accidental spillage because you do not

arrange for an accident except in the AZsopian sense illus-

trated by the staged accident.

The words “arranged with a transporter for transport

for disposal or treatment” appear to contemplate a case

in which a person or institution that wants to get rid of

its hazardous wastes hires a transportation company to

carry them to a disposal site. If the wastes spill en route,

then since spillage is disposal and the shipper had ar-

ranged for disposal—though not in that form—the shipper

is a responsible person and is therefore liable for clean-up

costs. But when the shipper is not trying to arrange for

the disposal of hazardous wastes, but is arranging for the

delivery of a useful product, he is not a responsible per-

son within the meaning of the statute and if a mishap

occurs en route his liability is governed by other legal

doctrines. It would be an extraordinary thing to make

10a

shippers strictly liable under the Superfund statute for

the consequences of accidents to common carriers or other

reputab'e transportation companies that the shippers had

hired in good faith to ship their products. /ndiana Harbor

Belt R.R. v. American Cyanamid Co., 916 F.2d 1174,

1180-81 (7th Cir. 1990). The language of the statute per-

mits but does not compel such a result, and we can find

no evidence that it was intended.

This conclusion does not create a regulatory void. Apart

from common law liability of transportation companies

for chemical spills, noted in our /ndiana Harbor Belt

R.R. decision, there are a variety of direct regulatory con-

trols over the transportation of hazardous substances, il-

lustrated by the Hazardous Materials Transportation Act,

49 U.S.C. App. $$ 1801 et seg. And Elkhart was respon-

sible for the cost of cleaning up the contamination result-

ing from the spillage from Transport Service’s trucks if

it couldn't find any other responsible persons to whom

to shift that cost in whole or in part.

We conclude that Detrex was liable under the Super-

fund statute for the spillage from its own trucks (though

it may be able to shift some of that liability back to E’k-

hart by means of the counterclaim) but not the spillage

from the trucks of the common carrier that it hired. The

judgment for Elkhart is therefore affirmed in part and

reversed in part and the case remanded to the district

court for further proceedings consistent with this opinion.

AFFIRMED IN PART,

REVERSED IN PART,

AND REMANDED.

A true Copy:

Teste:

Clerk of the United States Court of

Appeals for the Seventh Circuit

lla

APPENDIX B

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF INDIANA

SOUTH BEND DIVISION

Cause No. S88-620 (RLM)

AMCAST INDUSTRIAL CORPORATION, et al.,

Plaintiffs,

VS,

DETREX CORPORATION,

Defendant.

MEMORANDUM AND ORDER

Following the order of November 18. 1991 granting

in part and denying in part the parties’ cross-summary

judgment motions, the court continued the trial and af-

forded the plaintiffs, Amcast Industrial Corporation and

Elkhart Products Corporation (collectively “Amcast’),

until December 16 to move for partial summary judgment

on the issue of damages. Amcast has filed its motion, and

the briefing is now complete. The court assumes familiar-

ity with the facts set forth in the November 18 order

and with the procedural history of this case.

The court acknowledges both parties’ requests for oral

argument on this motion, but declines to hold an oral

argument in light of the court’s heavy calendar between

now and the scheduled trial and the court’s familiarity

with the case.

At the pretrial conference held on November 25, 1991,

the plaintiffs indicated that they would dismiss their negli-

12a

gence and punitive damages claims without prejudice if

this second motion for partial summary judgment is

granted; if the motion is denied, these claims are scheduled

for trial on May 11, 1992. In this motion, Amcast asks

the court to grant summary judgment as to the liability

of defendant Detrex Corporation (“Detrex”) in Count II

of the complaint pursuant to 42 U.S.C. § 9607(a)(3),

as to the amount of response costs Amcast is entitled to

recover under Counts I and II of the complaint, and as

to Detrex’s liability for Arcast’s future costs in respond-

ing to the trichloroethylene (“TCE”) contamination at

the Elkhart Products Corporation (“EPC”) facility.

I. THE MOTION TO AMEND AND

ADD A COUNTERCLAIM

As a preliminary matter, on February 7, 1992, Detrex

moved for leave to amend its answer to include a counter-

claim under 42 U.S.C. §$ 9613. Trial is scheduled to com-

mence on May 11, and the suit has been pending for four

and a half years. Leave to amend is to be freely given

when justice so requires, Fed. R. Civ. P. 15(a), but deter-

mination of the requirements of justice rest within the

trial court’s discretion. Campbell v. Ingersoll Milling Ma-

chine Co., 893 F.2d 925, 927 (7th Cir.), cert. denied

111 S.Ct. 127 (1990). Delay alone is not a sufficient

basis for denial of a requested amendment, Feldman v.

Allegheny Int'l, Inc., 850 F.2d 1217, 1225 (7th Cir.

1988), but a presumption against amendment grows with

delay. Tamari v. Bache & Co. S.A.L., 838 F.2d 904,

908 (7th Cir. 1988).

The burden to the judicial system can justify a denial

of a motion to amend “even if the amendment would

cause no hardship at all to the opposing party.” Be-

cause substantive amendments shortly before trial

serve to defeat the public’s interest in speedy resolu-

tion of legal disputes, “[a] district court judge is en-

titled, in such circumstances, to refuse to allow a

plaintiff's amendment,”

l3a

Perrian v. O’Grady, No. 90-1267, slip op. at 5 (7th Cir.,

March 19, 1992) (citations omitted).

The motion to amend was made three months before

trial, after years of discovery and the filing of serial sum-

mary judgment motions. As is discussed below, denial

of the amendment will not prejudice Detrex’s right to pur-

sue its would-be counterclaim in a separate action. Ac-

cordingly, while amendment to these pleadings would

jeopardize the trial date of a suit in its fifth year of

pendency, the motion’s denial will prejudice nobody.

For these reasons, the court now denies the motion to

amend.

Il. AMCAST’S SUMMARY JUDGMENT MOTION

A. Count Il

Amcast claims that it is entitled to summary judgment

on Detrex’s liability in Count II because the court has

already found that Detrex arranged for the disposal of

hazardous substances on the EPC site. In a cost recovery

action under 42 U.S.C. § 9607(a) (4) (B), a private party

must show that: (1) the defendant is a covered person

under 42 U.S.C. § 9607(a); (2) there has been a release

or threatened release of a hazardous substance from the

defendant’s facility; (3) the plaintiffs incurred response

costs as a result of the release or threatened release; and

(4) the plaintiffs’ response costs were necessary and con-

sistent with the national contingency plan (“NCP”).

Dedham Water Co. v. Cumberland Farms Dairy, Inc., 889

F.2d 1146, 1150 (1st Cir. 1989); B.F. Goodrich Co. v.

Murtha, 754 F. Supp. 960, 963-64 (D. Conn. 1991);

Artesian Water Co. v. Government of New Castle County,

659 F. Supp. 1269, 1278-79 (D. Del. 1987), affirmed,

851 F.2d 643 (3d Cir. 1988). Amcast notes that

CERCLA liability is strict. Dedham Water Co. v. Cum-

berland Farms Dairy, Inc., 889 F.2d at 1150; Amoco Oil

Co. v. Borden, Inc., 889 F.2d 664, 670, n.8 (Sth Cir.

l4a

1989); Rodenbeck v. Marathon Petroleum Co., 742

F. Supp. 1448, 1456 (N.D. Ind. 1990). The elements

of a prima facie case are straightforward and several

courts have found that liability may be resolved in a

summary judgment motion. United States v. Bliss, 667

F. Supp. 1298, 1308-09 (E.D. Mo. 1987).

Amcast claims that each element of a prima facie case

for Detrex’s liability under 42 U.S.C. § 9607(a)(3) (ar-

ranging for disposal of hazardous substances) has been

established by the November 18, 1991 order. Detrex was

found to have released hazardous substances into the envi-

ronment, and Amcast was found to have incurred costs

that were necessary and consistent with the NCP. Detrex

cannot avail itself of the statutory defenses to liability:

the environmental contamination did not result from an

act of God, an act of war, or an act of a completely

independent third party. The November 18 order found

that Detrex’s drivers or Detrex’s—contractor, Transport

Services, were responsible for spills which occurred be-

tween 1978 and 1986; therefore, Detrex is a responsible

party within the meaning of 42 U.S.C. § 9607(a)(3).

Further, Detrex “disposed” of a hazardous waste when it

spilled TCE at the EPC site. Amcast contends that the

law of the case establishes the remaining elements of

CERCLA liability. The November 18 order determined

that Amcast incurred cleanup costs that were necessary

and consistent with the NCP.

Detrex responds that Amcast’s motion for summary

judgment on Count II goes beyond the order of Novem-

ber 25. That order allowed the plaintiffs until Decem-

ber 16, 1991 to file a motion as to damages, but did not

allow the plaintiffs to file another motion for summary

judgment on liability. Therefore, Detrex asks the court

to ignore the portion of the motion which requests sum-

mary judgment as to liability under Count II.

Amcast suggests that the motion for summary judgment

on Count II is made in the interest of judicial economy,

EE ——

ean l5a

as it would tie up loose ends in this litigation and allow

for the presentation of a complete record on appeal.

Amcast also claims that a finding of Detrex’s liability

under Count II would not affect Detrex’s liability for

damages; whether Detrex is liable under Count I or II or

both, it is jointly and severally liable for Amcast’s re-

sponse costs.

In the alternative, Detrex asks the court to reconsider

the November 18 order and grant summary judgment in

Detrex’s favor on Count II. However, a motion for re-

consideration should not be used to relitigate matters

upon which the court has ruled. Evans, Inc. v. Tiffany

& Co., 416 F. Supp. 224, 244 (N.D. Ill. 1976). If the

motion for reconsideration does not demonstrate manifest

error of law or fact or present newly discovered evidence,

it should be denied. Dresser Industries, Inc. v. Pyrrhus

Ag, 936 F.2d 921, 936 (7th Cir. 1991). Detrex’s argu-

ments as to Count II do not demonstrate manifest error

or present newly discovered evidence. Therefore, the court

will not reconsider Detrex’s motion for summary judg-

ment as to Count IT.

The court finds that, in light of the order of November

18, 1991, summary judgment should be granted in the

plaintiffs’ favor as to Count II, except as to any allega-

tions related to an overfill spill.

B. Count!

1. Joint and Several Liability

Detrex argues that CERCLA liability may be several

rather than joint and several, and that Detrex should be

allowed to show either the divisibility of the harm or the

degree of harm caused by Detrex. Detrex cites United

States v. Hardage, 116 F.R.D. 460, 465-66 (W.D. Okla.

1987), in which the court stated:

A careful review of the legislative history of

CERCLA establishes Congress wished to avoid man-

l6a

datory joint and several liability. The Court may

impose joint and several liability where the harm its

single and indivisible. However, defendants must be

given the opportunity to demonstrate the divisibility

of the harm and the degrees to which each defendant

is responsible. This determination of liability turns

on whether the harm caused .. . is “divisible” or “in-

divisible.” The Court notes that imposition of joint

and several liability is permissive, but not mandatory.

Congress intended issues of liability under CERCLA,

including joint and several liability, to be determined

under traditional and evolving principles of federal

common law. The Court may also apportion dam-

ages according to “the degree of involvement by the

parties in the generation, transportation, treatment,

storage, or disposal of the hazardous wastes,” and

“the degree of care exercised by the parties with re-

spet to the hazardous waste concerned.” United

States v. A & F Materials Co., 578 F.Supp. 1249,

1256 (S.D.Ill. 1984).

(citation omitted).

Detrex suggests applying a case-by-case evaluation of

the facts in order to determine whether to impose joint

and several liability. State of Idaho v. Bunker Hill Co.,

635 F. Supp. 665, 676 (D. Idaho 1986). The Fourth

Circuit applied joint and several liability in a case in

which the environmental harm was indivisible among

multiple generators of hazardous wastes. However, the

court stated:

While CERCLA does not mandate the imposition

of joint and several liability, it permits it in cases of

indivisible harm. In each case, the court must con-

sider traditional and evolving principles of federal

common law, which Congress has left to the courts

to supply interstitially.

Under common law rules, when two or more

persons act independently to cause a single harm for

i 17a

which there is a reasonable basis of apportionment

according to the contribution of each, each is held

liable only for the portion of harm that he causes.

United States v. Monsanto Co., 858 F.2d 160, 171 (4th

Cir. 1988) (citations and footnote omitted), cert. denied,

490 U.S. 1106 (1989).

Detrex acknowledges that it has the burden of demon-

strating that a reasonable basis for apportionment of

damages exists, United States v. Alcan Corp., 755 F.Supp.

531 (N.D.N.Y. 1991); Kelly v. Thomas Solvent Co., 727

F. Supp. 1532, 1552 (W.D. Mich. 1989), and claims

that it can do so. Detrex submits the affidavit of Mark

Rowland, a groundwater hydrologist, to demonstrate that

the harms caused by Detrex are distinct from those caused

by other parties. There were, at one point, 783 gallons

of TCE in the soil and groundwater beneath the EPC

facility. Detrex claims that none of this TCE is at-

tributable to the delivery spills for which it is held liable.

Mr. Rowland believes that the TCE which spilled during

deliveries did not reach the soil, but evaporated without

causing harm to the soil or groundwater.

Mr. Rowland states that the maximum amount of TCE

spilled during deliveries was 49.3 gallons. This constitutes

a small percentage (6.296%) of the TCE found in the

soil and groundwater. If Detrex is not responsible for all

of the delivery spills, then it is responsible only for the

2.8 gallons of spillage from Detrex trucks, or .358% of

the 783 gallons of TCE. Therefore, Detrex asserts that

there is a reasonable basis for apportionment of damages.

This case involved but one contaminant, unlike the

multiwaste cases in which apportionment was unreason-

able because of the synergistic effect of commingling con-

taminants. In Kelly v. Thomas Solvent Co., 727 F. Supp.

at 1553-54, the court found joint and several liability

proper because the defendants presented no evidence

demonstrating that the environmental harm was divisible.

In one of the contaminated sites, a mixture of pollutants

18a

had migrated from the defendants’ facilities. See also

O'Neil v. Picillo, 682 F. Supp. 706 (D.R.I. 1988), af-

firmed, 883 F.2d 176 (1st Cir. 1989), cert. denied, 493

U.S. 1071 (1990).

Detrex distinguishes this case from United States v.

Ottati & Goss, Inc., 630 F. Supp. 1361, 1395-96 (D.N.H.

1985), in which the hazardous waste was buried in drums

throughout the site. In the case at hand, Detrex main-

tains, the TCE contamination resulting from delivery

spills was limited to the delivery area of the EPC facility.

Detrex claims that the court can apportion liability in

this case based on the quantity of TCE spilled during

delivery compared to the total TCE contamination found.

In O’Neil v. Picillo, 682 F. Supp. at 725, the court found

it impossible to determine which defendant’s waste con-

tributed in a specific manner to the contamination, because

different substances of differing levels of toxicity could

commingle and have a synergistic effect. However, the

court noted: “There is no question that the number of

drums may be an appropriate criterion for apportioning

liability if all of the drums contained identical wastes.”

See also United States v. Monsanto Co., 858 F.2d at

172, n.27.

For these reasons, Detrex asks the court to conduct a

trial to allow it to establish the negligible amount of dam-

ages arising from its “several” liability.

Amcast cites United States v. R. W. Meyer, Inc., 889

F.2d 1497 (6th Cir. 1989), cert. denied, 494 U.S. 1057

(1990), in which the court noted that the responsible

parties bear the burden of proving the divisibility of harm,

and that “CERCLA has been interpreted to impose joint

and several liability when the environmental harm is in-

divisible . . . and to allow for apportionment when two

or more persons independently are responsible for a single

harm that is divisible.” 889 F.2d at 1507 (citing United

States v. Monsanto Co., 858 F.2d 160, 171-73 (4th Cir.

1988)). The court went on to state that CERCLA per-

EEE

19a

mits actions for contribution among parties who are found

jointly and severally liable. 889 F.2d at 1507. Amcast

claims that although imposing joint and several liability

may result in some defendants paying more than their

Share of the harm, it would further Congressional intent

for “those proven at least partially culpable to bear the

cost of the uncertainty.” O’Neil v. Picillo, 883 F.2d

at 179.

Amcast notes that the volume of TCE alone is an in-

sufficient basis upon which to find the harm divisible,

citing United States v. Monsanto, 858 F.2d. at 172-73.

However, more than one contaminant was found to have

caused environmental harm in the Monsanto case:

Common sense counsels that a million gallons of

certain substances could be mixed together without

significant consequences, whereas a few pints of others

improperly mixed could result in disastrous conse-

quences. Under other circumstances proportionate

volumes of hazardous substances may well be proba-

tive of contributory harm. In this case, however.

volume could not establish the effective contribution

of each waste generator to the harm at the . . . site.

858 F.2d at 172-173 (footnotes omitted).

Amcast also submits the affidavit of its expert witness.

John Mundell. to show that volume alone is an insufficient

basis to divide the harm. Mr. Mundell states that the

environmental harm is indivisible because “distinct areas

indicating separate spill events are not apparent.” Further.

the soil and groundwater diffuse chemical spills from the

source point, making it impossible to determine whether

response costs can be attributed to a particular spill.

Amcast claims that to avoid joint and several liability.

Detrex must demonstrate a reasonable basis for appor-

tionment in addition to demonstrating the divisibility of

the harm. In United States v. South Carolina Recycling

and Disposal, Inc., 653 F. Supp. 984 (D.S.C. 1984),

i i i

20a

affirmed in part and vacated in part, United States v.

Monsanto, 858 F.2d 160 (4th Cir. 1988), cert. denied,

490 U.S. 1106 (1989), the district court determined that

the apportionment of costs of responding to environmental

harm could not be based solely on the volume of wastes

each party generated. In that case, however, unlike the

case at hand, there were several types of hazardous wastes

that were leaking from containers and commingling, so it

was impossible to ascertain the degree of harm caused by

each generator.

Although only one contaminant is involved in this action,

unlike those cases in which the court expressed concern

over commingling of contaminants, the court is not con-

vinced that the harm caused at the EPC site is readily

divisible or that there is a reasonable basis for apportion-

ment. In light of Mr. Mundell’s affidavit, it appears that

the TCE contamination caused by Detrex is not limited

to a single area; the earlier summary judgment holdings

concerning the “open valve” spill support that conclusion.

Further, the TCE spilled during deliverties was less resist-

ent to mobilization through the soil than stillbottoms cre-

ated during EPC’s processing and spilled by EPC em-

ployees. The TCE delivered by Detrex was also more

concentrated than the TCE in stillbottoms. Therefore, the

amount spilled by EPC employees. compared to the

amount spilled by Detrex employees, even if it can be

determined. may not be a reasonable basis for apportion-

ment of response costs.

In the usual case, equitable apportionment of damages

comes into play in a contribution action or claim pursuant

to 42 U.S.C. § 9613 after joint and several liability is

imposed in a cost recovery action pursuant to 42 U.S.C.

§ 9607. Detrex asserts, however, that in some CERCLA

cases between private parties who are potentially responsi-

ble for response costs, it is appropriate to try liability and

apportion damages in the same action.

2la

Detrex claims that it would overlook Congressional

intent to require it to reimburse Amcast for one hundred

percent of its costs. Congress did not intend for minor

contributors to fund the entire Cleanup of a hazardous

Waste cite. United States v. A & F Materials Co., Inc.,

578 F. Supp. 1249, 1256 (S.D. Ill. 1984). See also

O'Neil v. Picillo, 682 F. Supp. at 725-26.

Detrex notes that in Amoco Qi] Co. v. Borden, 889

F.2d at 672, the court recognized that in a cost recovery

Suit between private Parties, “the action is one for con-

tribution, which js specifically recognized under CERCLA.

See § 9613(f). Under that Provision, a court has con-

siderable latitude in determining each party’s equitable

share.” In that case. however, the court concluded that

the environmental harm was indivisible and that the plain-

tiff ‘owner of the property shared joint and several liability

with the defendant/vendor of the property.

In Shapiro y. Alexanderson, 741 F. Supp. 472, 478-79

(S.D.N.Y. 1990), the court determined that the plaintiff

who was responsible for environmental harm could re-

cover contribution from other parties for response costs

based on their degree of responsibility. The Shapiro court

cid not suggest, however. that the plaintiff's right to re-

cover in the § 9607 action should be delayed while the

Parties litigated the degree of culpability of each party.

In Environmental Transportation Systems, Inc. v. Ensco,

Inc., 763 F. Supp. 384 (C.D. Il. 1991), the court stated:

Section 9613(f)(1) of CERCLA states that. “fijn

resolving contribution claims. the court may allocate

response costs among liable parties using such equita-

ble factors as the court determines are appropriate.”

Thus, it is apparent that a finding that a defendant

is a “responsible party” under § 9607(a). as this

Court decided ENSCO was . . . 1s only the initial

inquiry. Finding that a defendant IS a responsible

party and thus strictly liable for contribution under

§ 9607(a) does not mean that all parties are equally

99a

responsible and should share costs on a pro rata basis.

Rather, such a finding means only that a defendant

is potentially liable for contribution under CERCLA

depending upon the relevant fault of the parties.

Once a defendant is found to be a responsible party

under § 9607(a), the question shifts to how much

is that defendant responsible for under the provisions

in §$ 9613(f)(1). Thus, ETS’s request for pro rata

assessment is rejected as patently inconsistent with the

dictates of CERCLA.

Section 9613 contemplates a court’s assessing the

“relative culpability of each responsible party in de-

termining the proportionate share of costs each must

bear.” United States v. Monsanto Co., 858 F.2d 160,

170 n.29 (4th Cir. 1988).

Environmental Transportation Systems, Inc. v. Ensco, Inc.,

763 F. Supp. at 388 (emphasis in original). Detrex con-

tends that the court should allocate fault in this action

without Detrex having to bring a separate contribution

action pursuant to § 9613. Amcast claims that equitable

apportionment is only applicable in suits for contribution

brought pursuant to 42 U.S.C. § 9613(f), and not in this

action, noting that Detrex did not assert a contribution

claim. Detrex initially denied all liability. Ameast sug-

gests that Detrex should have to abide by the decision

it made earlier in this action not to bring a contribution

claim.

Amcast cites United States v. Pretty Products, Inc.,

780 F. Supp. 1488, 1403 (S.D. Ohio 1991) (“Compara-

tive fault has no place in a 9607 suit, although it certainly

may be relevant in a suit for contribution under 9613.”).

In O'Neil v. Picillo, 682 F. Supp. at 725-26, the court

determined that apportionment should await an action for

contribution.

1 am not insensitive to the possible unfairness

involved in holding a few relatively small contributors

rr ren

23a

jointly and severally liable for the entire harm. In-

deed, there is no question that in CERCLA actions,

like other actions involving joint tortfeasors, a court

may consider equitable factors to apportion damages

and mitigate the effects of joint and several liability.

I believe. however, that issues of fairness and equita-

ble apportionment may be more properly addressed

in a subsequent contribution action... . .

This is consistent with CERCLA’s key objective

of “facilitat[ing] the prompt cleanup of hazardous

dumpsites by providing a means of financing both

governmental and private responses, and by placing

the ultimate financial burden upon those responsible

for the danger.” City of Philadelphia v. Stephan

Chemical Co., 544 F.Supp. 1135, 1142-43 (E.D.Pa.

1982). By delaying thorny considerations of equita-

ble apportionment to a later contribution proceeding,

the government is provided immediate funds after the

initial liability hearing to take prompt remedial ac-

tion at the earliest opportunity. In most instances.

immediate response to potential disasters caused by

Seepage and migration can forestall the accrual of

considerably higher compensation costs.

(citation omitted). See also United States v. Stringfellow,

661 F. Supp. 1053, 1060 (C.D. Cal. 1987).

In United States v. Kramer, 757 F. Supp. 397, 412

(D.N.J. 1991), the court noted that a contribution claim

may be brought during the pendency of a cost recovery

action under 42 U.S.C. § 9607. The court allowed the

plaintiff, in that case the federal government, to recover

its response costs, regardless of its own potential liability

for contribution. United States y. Kramer, 757 F. Supp.

at 414. The court further reasoned that $ 9607 and

§ 9613 have different purposes.

Collapsing the distinction between section 107 [42

U.S.C. § 9607] and section 113 [42 U.S.C. § 9613]

24a

ignores the clear language and structure of the stat-

ute. Section 107 imposes liability “[n]Jotwithstanding

any other provision or rule of law and subject only

to” the defenses set forth in section 107(b). Con-

gress enacted section 113 as a separate section to

address contribution.

[I]t would be “anomalous” to permit apportion-

ment of clean-up costs among PRPs in a section 113

action and not to permit apportionment in a section

107 action, but only if defendants in a section 107

action could not seek contribution in a section 113

action. But the structure of CERCLA does not pre-

clude consideration of equitable factors, including

the liability of a PRP who was (or is) plaintiff in a

section 107 action. Rather, CERCLA separates

those equitable factors from section 107 and con-

siders them in a section 113 contribution action... .

.. . CERCLA was enacted to facilitate cleanup

of the tens of thousands of hazardous waste sites in

this country. Section 107 permits the Government

or a private party to go in, clean up the mess, pay

the bill, then collect all its costs not inconsistent with

the NCP from other responsiblz parties—even if

plaintiff was also responsible for the contamination.

Any PRP is entitled under section 113 to bring a

contribution action against other PRPs—including

the PRP who previously cleaned up the mess and

was paid for its trouble through a section 107 pro-

ceeding—to apportion costs equitably among all the

PRPs. Practically speaking, section 107 permits a

PRP, including the Government, to collect all its

response costs, even those that that same PRP may

be required to pay back to other PRPs as its equita-

ble share in a section 113 proceeding.

What might be called a windfall for a_ plaintiff

PRP in a section 107 action serves as .an incentive

for private parties to clean up hazardous waste sites,

25a

to risk their own capital initially, knowing that by

then prevailing in a section 107 action, they will be

reimbursed perhaps in excess of what might be shown

in a section 113 action to have been their equitable

Share. If the courts collapse the distinction between

a section 107 and 113 proceeding, there will be less

incentive for private parties to initiate cleanup, since

they would lose the use of that temporary windfall

gained in a section 107 action.

United States v. Kramer, 757 F. Supp. at 416-17 (em-

phasis in original) (footnote omitted ).

Many of the cases upon which Detrex relies analyzed

contribution claims under &§ 9613, e.g., Amoco Oil vy.

Borden, Inc., 889 F.2d at 672; Shapiro v. Alexanderson,

741 F. Supp. at 479, n.5. In In re Dant & Russell, Inc.,

951 F.2d 246 (9th Cir. 1991), the court applied § 9613

to apportion liability in a § 9607 action, but relied in

part on the fact that the party seeking response costs had

admitted CERCLA liability. Amcast has made no such

admission. Further, the Dant & Russell court apportioned

liability within the context of a proof of claim in a bank-

ruptcy case.

Detrex cites FMC Corp. v. Northern Pump Co., 668

F. Supp. 1285 (D. Minn. 1987), in which the plaintiff

brought a § 9607 claim and there was no § 9613 counter-

claim. In that case, the district court determined that one

of the potentially responsible persons was not liable. The

court noted that two factors were necessary to impose

liability for response costs: CERCLA liability and account-

ability for disposal of hazardous wastes. The court found

that one party was potentially liable under CERCLA, but

it was not accountable for disposal of hazardous wastes.

The court’s decision was based in part on the fact that

the party had been released from liability by agreement,

and that the party had not disposed of hazardous wastes

at the site. FMC Corp. v. Northern Pump Co., 668 F.

Supp. at 1290-91. In this case, Detrex has not been re-

26a

leased from liability, and Detrex was found to have re-

leased TCE at the EPC site.

The court finds the reasoning of United States v.

Kramer, 757 F. Supp. 397, persuasive. CERCLA’s intent

is better realized when the apportionment of liability takes

place in a claim under § 9613. Section 9607 does not

provide for apportionment of liability, and has only a

limited number of defenses that do not apply to this

action. Therefore, the court concludes that it should not

engage in equitable apportionment of the parties’ liability

in this case. Apportionment will have to await Detrex’s

filing of an action against § 9613.

Detrex argues that Amcast’s earlier settlement with

former shareholder defendants should be considered in

this court’s apportionment. The plaintiffs in this action

received $1 million from the former shareholder defend-

ants. In Comerica Bank-Detroit v. Allen Industries, Inc.,

769 F. Supp. 1408 (E.D. Mich. 1991), the court applied

comparative fault to a CERCLA action settlement. Under

§$ 6 of the Uniform Comparative Fault Act, the plaintiffs’

recovery against the non-settling defendants is reduced by

the settling defendants’ equitable share of fault. There-

fore, Detrex claims, before assigning a percentage of fault

against Detrex, the court should determine the fault of

Detrex, the plaintiffs, and the former shareholders. Detrex

has submitted a considerable amount of evidence in this

motion and in its previous motion for summary judgment,

indicating that the Elkhart Products Corporation employ-

ees were responsible for some of the TCE contamination.

Many of the areas where contamination occurred were

separate from the delivery area, where Detrex’s spills

occurred.

For the reasons stated above, the court will not appor-

tion liability in this case. Even if apportionment were

applied against Amcast, the court would not apportion

the liability of the former shareholder defendants, as the

order of November 14, 1990 determined that the former

27a

shareholders were not liable. The plaintiffs are entitled

to recover their response costs from Detrex.

2. Additional Costs

Amcast claims that it is entitled to recover all of its

response costs, including its attorney fees, against Detrex

in light of the court’s finding of liability on Count I. As

of November 22, 1991, Amcast had incurred $1.197,-

082.42 in costs which it now seeks to recover. CERCLA

provides that private parties may recover “any . . . neces-

sary costs of response incurred . . . consistent with the

national contingency plan.” 42 U.S.C. § 9607(a)(4)(B).

Amcast claims that its response costs include expenses

incurred in storage, confinement, treatment, transport, and

disposal of hazardous waste, and monitoring the effective-

ness of the response. Ascon Properties, Inc. v. Mobile

Oil Co., 866 F.2d 1149, 1154 (9th Cir. 1989), discusses

the scope of the term “response cost”.

CERCLA does not define the term “response cost.”

However, in its definitional section, CERCLA does

define “response” as “remove, removal. remedy, and

remedial action.” 42 U.S.C. § 9601(25). These

four terms are defined in the two immediately pre-

ceding subsections, §§ 9601(23) & (24). Section

9601(23) makes clear that “removal” includes “the

cleanup . . . of released hazardous substances from

the environment.”

(citation omitted). Amcast’s response costs include the

cost of investigating the release of a hazardous substance,

as well as evaluating and producing methods to address

the release. 42 U.S.C. §§ 9601(23), (24); Tanglewood

East Homeowners v. Charles-Thomas, Inc., 849 F.2d

1568, 1575 (Sth Cir. 1988); Cadillac Fairview ‘California,

Inc. v. Dow Chemical Co., 840 F.2d 691, 695 (9th Cir.

1988).

28a

a. Indirect Costs

Amcast also contends that in addition to recovering

the costs directly related to addressing the TCE con-

tamination, it is entitled to recover such indirect costs as

labor expenses and office supplies attributable to its re-

sponse action. Of the $1,197,082.42 of costs incurred

as of November 22, 1991, $55,992.28 constituted in-

direct employee labor costs.

In T & E Industries, Inc. v. Safety Light Corp., 680

F. Supp. 696, 706-07 (D.N.J. 1988), the court found

that recoverable costs under 42 U.S.C. § 9601(23) en-

compassed the value of the time the company president

spent in evaluating and mitigating the contamination prob-

lem. See also United States v. R. W. Meyer, Inc., 889

F.2d 1497 (6th Cir. 1989), cert. denied, 494 U.S. 1057

(1990); and United States v. Hardage, 733 F. Supp.

1424, 1437 (W.D. Okla. 1989) (the government was

entitled to recover its indirect response costs).

Detrex contends that employee labor is not a response

cost recoverable in a CERCLA action, citing Artesian

Water Co. v. Government of New Castle County, 659

F. Supp. 1269, 1285-96 (D. Del. 1987), aff'd, 851 F.2d

643 (3rd Cir. 1988), which noted that Congress chose

not to provide recovery for income loss. Detrex also cites

In re Hemingway Transport, Inc., 126 Bankr. 656, 663

(D. Mass. 1991), aff'd, 954 F.2d 1 (1st Cir. 1992),

which stated that CERCLA does not provide recovery

for employee time spent in cleanup efforts. The court

agrees with Amcast that the indirect costs of employee

labor and overhead expenses are recoverable, as such

costs are “part and parcel of all costs of the removal

action, which are recoverable under CERCLA.” United

States v. R. W. Meyer, Inc., 889 F.2d at 1503.

29a

b. Attorney Fees

Amcast seeks its attorney fees incurred in connection

with its response actions and this cost recovery suit,

citing 42 U.S.C. § 9601(25), which states that “[t]he

terms ‘respond’ or ‘response’ means [sic] remove, re-

moval, remedy, and remedial action, all such terms (in-

cluding the terms ‘removal’ and ‘remedial action’) include

enforcement activities related thereto.” In Pease & Cur-

ren Refining, Inc. v. Spectrolab, Inc., 744 F. Supp. 945,

951 (C.D. Cal. 1990), and in General Electric Co. v. Lit-

ton Business Systems, Inc., 715 F. Supp. 949, 959 (W.D.

Mo. 1989), aff'd, 920 F.2d 1415 (8th Cir. 1990), cert.

denied, 111 S. Ct. 1390 (1991), the courts determined

that attorney fees were recoverable response costs.

Detrex claims that attorney fees are not recoverable

response costs. Case law is inconsistent. Several cases

have denied attorney fees in private CERCLA actions.

State of New York v. SCA Services, Inc., 754 F. Supp.

995, 1000 (S.D.N.Y. 1991), stated that the prevailing

rule is that attorneys fees are not recoverable in private

CERCLA actions and that if Congress had intended to

allow recovery of attorney fees it would have so provided

See also Mesiti v. Microdot, Inc., 739 F. Supp. 57, 62

(D.N.H. 1990); Regan v. Cherry Corp., 706 F. Supp.

145, 149 (D.R.I. 1989).

In Pease & Curren Refining, Inc v. Spectrolab, Inc.,

744 F. Supp. at 950-51, the court concluded that allow-

ing attorney fees as recoverable response costs would

further CERCLA’s intent to provide prompt and effective

cleanup of waste disposal sites and insure that those re-

sponsible for the release of hazardous substances bore

the cost of response, citing Mardan Corp. v. C.G.C. Music,

Ltd., 804 F.2d 1454, 1455 (9th Cir. 1986). See also

General Electric Co. v. Litton Automation Systems, 920

F.2d at 1422. In allowing recovery of attorney fees and

litigation expenses in a cost recovery action, the court

30a

in Bolin v. Cessna Aircraft Co., 759 F. Supp. 692, 710

(D. Kan. 1991), stated:

By providing private parties with a federal cause of

action for the recovery of necessary expenses in the

cleanup of hazardous wastes, Congress intended § 107

as a powerful incentive for these parties to expend

their own funds initially without waiting for the re-

sponsible persons to take action. ... The court can

conceive of no surer method to defeat this purpose

than to require private parties to shoulder the finan-

cial burden of the very litigation that is necessary to

recover these costs. Thus, to the extent that any

litigation costs incurred by the plaintiffs fall within

the meaning of the “necessary costs’ authorized under

§ 9607(a)(4)(B), plaintiffs are entitled to recover

such costs.

See also Key Tronic Corp. v. United States, 766 F. Supp.

865, 871-72 (E.D. Wash. 1991). This court finds the

Bolin court’s position persuasive and well-taken. It would

defeat the express purpose of CERCLA to require plain-

tiffs seeking to recover response costs to incur attorney

fees in connection with their actions to recover response

costs. Enforcement activities recoverable under § 9607

necessarily include attorney fees, and, therefore, Amcast

may recover its attorney fees in this action.

C. Declaratory Relief

Amcast requests a declaratory judgment pursuant to 42

U.S.C. § 9613(g)(2) that Detrex is liable for any future

costs it incurs in cleaning up the TCE contamination,

claiming that such a judgment is appropriate as to future

costs because the court cannot award costs until they are

incurred. United States v. Hardage, 733 F. Supp. at

1439; Williams v. Allied Automotive Autolite Division,

704 F. Supp. 782, 784° (N.D. Ohio 1988); Rockwell In-

ternational Corp. v. I U International Corp., 702 F. Supp.

1384, 1388 (N.D. Ill, 1988).

3la

Detrex claims that Amcast is not entitled to declara-

tory relief as to the plaintiffs’ future response costs because

a trial is necessary to determine each party’s liability.

CERCLA provides for a declaratory judgment on liability

for response costs in § 9607 actions. 42 U.S.C. § 9613

(g)(2). InIn re Dant & Russell, Inc., 951 F.2d at 249-

50, the court explained the propriety of declaratory re-

lief as to future response costs in a CERCLA action:

[Sections 9607 and 9613(g)(2)] envision that,

before suing, CERCLA plaintiffs will spend some

money responding to an environmental hazard. They

can then go to court and obtain reimbursement for

their initial outlays, as well as a declaration that the

responsible party will have continuing liability for

the cost of finishing the job.

This system strikes a balance between a number

of considerations. By requiring a plaintiff to take

some positive action before coming to court,

CERCLA insures that the dispute will be ripe for

judicial review. On the other hand, by not requiring

plaintiffs to perform full cleanup before coming to

court, and by expressly providing for declaratory

judgments, CERCLA substantially reduces the risk

involved in performing the cleanup. This encourages

private response.

(citation omitted). See also United States v. Kramer, 757

F. Supp. at 412.

The court agrees, and concludes that the plaintiffs are

entitled to a declaratory judgment as to their future re-

sponse costs.

III. CONCLUSION

For the foregoing reasons, the court hereby DENIES

the defendants’ motion to amend, and GRANTS the plain-

tiffs’ motion for partial summary judgment. In light of

the plaintiffs’ representation that they will dismiss their

32a

common law negligence claim in Count VI and their

claim for punitive damages, it appears that no issues

remain in this case, and the clerk is directed to enter

judgment in accordance with this order and the order of

November 18, 1991.

Judgment shall be entered for the plaintiffs on Counts

I, Il, IV, V, VIl, VUI, (X, and XIII of the plaintiffs’

complaint in the amount of $1,197,082.42 as response

costs incurred as of November 22, 1991, plus attorneys

fees, litigation expenses and prejudgment interest in sums

to be determined hereafter pursuant to District Rule 43.

Interest shall accrue on the amount of the judgment as

allowed by law. Declaratory judgment shall be entered

for the piaintiffs as to defendant Detrex’s liability for all

future response costs incurred by plaintiffs in responding

to the TCE contamination at plaintiff Elkhart Products’

plant in Elkhart, Indiana. The future response costs for

which defendant Detrex and its successors or assigns are

liable include attorneys fees, litigation and expenses and

prejudgment interest.

SO ORDERED.

ENTERED: April 9, 1992

/s/ Robert L. Miller, Jr.

ROBERT L. MILLER, JR.

United States District Court

Judge

33a

APPENDIX C

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF INDIANA

SOUTH BEND DIVISION

Cause No. $88-620 (RLM)

AMCAST INDUSTRIAL CORPORATION, et al.,

Plaintiffs

Vs.

DETREX CORPORATION, et al.,

Defendants

MEMORANDUM AND ORDER

This is a CERCLA case in which the plaintiff seeks

to recover response costs against a supplier of a hazardous

substance, whose drivers are claimed to have spilled the

substances during deliveries. The cause comes before the

court on the motion by defendant Detrex Corporation’s

for summary judgment, the plaintiffs’ motion for partial

summary judgment, and Detrex’s first and second motions

to strike portions of the documentary evidence submitted

in support of the plaintiffs’ partial summary judgment

motion. The parties’ briefing, which consisted as much

of disparagement of the others’ arguments as positive argu-

ments of their own, began on August 19 and appears to

have come to a close on November 8.

The court acknowledges the plaintiffs’ request for oral

argument on their motion for partial summary judgment

and on the first motion to strike. However, the parties’

thorough memoranda sufficiently aid the court that oral

34a

argument will not be necessary, particularly in recognition

of the proximity of the December 2 trial date.

I. FACTS

Plaintiff Elkhart Products Corporation (“EPC”) op-

erates a manufacturing plant in Elkhart, Indiana. EPC is |

a wholly owned subsidiary of plaintiff Amcast Industrial

Corporation (“Amcast”). Detrex manufactures chemi-

cals for industrial uses, including a solvent known as

trichloroethylene (“TCE”), a hazardous substance as de-

fined in 42 U.S.C. § 9601(14). TCE is a mutagen and

a suspected carcinogen, and human exposure to this sub-

stance may cause eye and skin irritation, headaches, heart

disease, and liver damage.

Detrex marketed its chemicals to Indiana customers

through its Gold Shield Solvents Division in Indianapolis.

Detrex sold TCE to EPC between 1978 and 1986, making

approximately thirty-four deliveries to the Elkhart site.

Detrex was EPC’s sole supplier of TCE during those

years. Detrex employed five drivers to deliver the solvent.

However, for fifteen of the thirty-four deliveries, Detrex

used the services of an independent common carrier, Trans-

port Services Company (“Transport”).

The plaintiffs contend that TCE was spilled when it

was delivered by Detrex or Transport drivers, contam-

inating the soil and groundwater. The plaintiffs assert that

the drivers spilled two to five gallons of TCE with each

delivery, and twice spilled greater quantities. One occasion

involved an overfilling of EPC’s tank, resulting in a 200

to 300 gallon spill that destroyed the asphalt pavement

surrounding the tank. The other incident involved the

driver’s failure to close the valve of his truck, causing

a two inch siream of TCE to be discharged from the truck

as it left the EPC site.

EPC learned of the TCE groundwater contamination

in the 1980s, following an investigation of a complaint

35a

that TCE was traveling from the groundwater beneath

EPC’s plant and polluting the grovndwater beneath Miles

Laboratories, a pharmaceutical manufacturer located

across the street.

The plaintiffs further allege that they expended more

than $1 million to monitor the release of TCE into the

environment, take short term action to eliminate risks,

and design and install a permanent remedy. EPC claimed

that its remedial action will cost nearly $1.5 million and

that it sustained $1 million in property damage.

In a letter dated August 27, 1986, EPC’s president de-

manded that Detrex reimburse EPC for the cost of the

remedial measures. Detrex did not reimburse EPC. Am-

cast and EPC brought this action pursuant to the Com-

prehensive Environmental Response, Compensation, and

Liability Act (“CERCLA”), as amended, 42 U.S.C.

S§ 9601 et seq., and the Declaratory Judgment Act, 28

U.S.C. § 2201. The plaintiffs also sought common law

tort and contractual remedies.

Il. SUMMARY JUDGMENT STANDARD

A party seeking summary judgment must demonstrate

that no genuine issue of fact exists for trial and that the

movant is entitled to judgment as a matter of law. Fed.

R. Civ. P. 56(c); Certain Underwriters of Lloyad’s vy.

General Accident Ins. Co. of America, 909 F.2d 228,

231 (7th Cir. 1990). If that showing is made and the

motion’s opponent would bear the burden at trial on

the matter that forms the basis of the motion, the op-

ponent must come forth with evidence to show what facts

are in actual dispute. Lujan v. National Wildlife Federa-

tion, 110 S.Ct. 3177, 3186 (1990); Celotex Corp. v.

Catrett, 477 U.S. 317 (1986); Sims v. Mulcahy, 902

F.2d 524, 540 (7th Cir.), cert. denied 111 S.Ct. 249

(1990). If he fails to do so, summary judgment is proper.

Fitzpatrick v. Catholic Bishop of Chicago, 916 F.2d 1254

36a

1256 (7th Cir. 1990); Tatalovich v. City of Superior,

904 F.2d 1135, 1142 (7th Cir. 1990). A genuine fac-

tual issue exists only when there is sufficient evidence for

a jury to return a verdict for the motion’s opponent.

Harbor House Condominium Ass'n v. Massachusetts Bay

Ins. Co., 915 F.2d 316, 320 (7th Cir. 1990); Hines v.

British Steel Corp., 907 F.2d 726, 728 (7th Cir. 1990).

Summary judgment should be granted if no reasonable

jury could return a verdict for the motion’s opponent.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986);

Visser v. Packer Engineering Associates, Inc., 924 F.2d

655, 660 (7th Cir. 1991).

The parties cannot rest on mere allegations in the plead-

ings, Hughes v. Joliet Correctional Center, 931 F.2d 425,

428 (7th Cir. 1991); McCarthy v. Kemper Life Ins. Com-

panies, 924 F.2d 683, 687 (7th Cir. 1991), or upon

conclusory allegations in affidavits. Mestayer v. Wiscon-

sin Physicians Service Ins. Corp., 905 F.2d 1077, 1079

(7th Cir. 1990). The court must construe the facts as

favorably to the non-moving party as the record will

permit, Brennan v. Daley, 929 F.2d 346, 348 (7th Cir.

1991); Soldal v. County of Cook, 923 F.2d 1241, 1245

(7th Cir. 1991), and draw any permissible inferences

from the materials before it in favor of the non-moving

party, Matsushita Electrical Industrial Co. v. Zenith Ra-

dio Corp., 475 U.S. 574 (1986); Illinois Bell Telephone

Co. v. Hanes and Co., Inc., 905 F.2d 1081, 1087 (7th

Cir. 1990), as long as the inferences are reasonable.

Bank Leumi Le-Israel, B.M. v. Lee, 928 F.2d 232, 236

(7th Cir. 1991). The non-moving party must show that

the disputed fact is material, or outcome-determinative,

under applicable law. Johnson v. Pelker, 891 F.2d 136,

138 (7th Cir. 1989).

The court will address the parties’ motions for summary

judgment with these standards in mind.

37a

Ill. THE MOTIONS TO STRIKE

The plaintiffs and Detrex each seek summary judgment

on count I, which alleges that Detrex and its drivers are

strictly liable for the plaintiff's response costs under 42

U.S.C. § 9607(a)(1) because Detrex is the owner or

operator of a facility from which there was a release of

hazardous substances. Detrex also moves for summary

judgment in its favor as to Counts II, IV, V, VI, VII,

VIII, IX, and XIII and the request for punitive damages

in the complaint. Count II alleges that Detrex is Strictly

liable under 42 U.S.C. $ 9607(a)(3) for response costs

because Detrex arranged for the disposal of a hazardous

substance which caused contamination at the site.

Count IV of the complaint alleges that an implied term

existed in the contract betwen Detrex and the plaintiffs

that required Detrex to deliver TCE without spillage and

without causing environmental damage; the plaintiffs

claim that Detrex breached this implied term. Count V

asserts that Detrex committed a trespass when it spilled

TCE at the site. Count VI alleges negligence by the

drivers who delivered TCE, and Count VII alleges that

Detrex negligently hired and trained its delivery drivers.

Count VIII asserts Detrex is strictly liable for damages

because its delivery of TCE constituted an “abnormally

dangerous activity.”' Count IX asserted a nuisance claim

and Count XIII asserted an indemnity claim, but the

plaintiffs have withdrawn those counts of the complaint.

A. Evidence of the Spills

The proposition that Detrex caused TCE to be spilled

is common to each of the counts. If there were no spills,

Detrex engaged in no “release” (Count I), engaged in no

“disposal” (Count II), breached no implied “anti-spillage”

? The plaintiffs claimed in Count VIII that Detrex was engaged

in an “ultrahazardous activity”. However, the parties now agree

that the modern term is “abnormally dangerous activity”.

38a

provision in the contract (Count IV), did not exceed -

the scope of its invitation so as to commit a trespass

(Count V), and engaged in no abnormally dangerous

activity (Count VIII). If there were no spills, the plain-

tiff suffered no damages due to the negligence of Detrex’s

drivers (Count VI) or Detrex’s negligence in training or

retaining those drivers (Count VII). Detrex argues that

the plaintiffs have no admissible evidence to prove any

TCE spillage by Detrex, and has moved to strike several

portions of depositions that the plaintiffs seek to use as

proof.

Detrex argues that the court must exclude, on hearsay

grounds, see Fed. Rr. Ev. 802, the portions of the testi-

mony of Clifton Cartwright, Henry Copenhaver, Gary

Emerson, John Graber, Ed Hosea, Richard Mann, Robert

Patterson, Dennis Selner, David Smith, and Robert Todd

in which the deponents relate that they heard about TCE

spills trom others. Detrex cites Visser v. Packer Engineer-

ing Associates, Inc., 924 F.2d 655, 659 (7th Cir. 1991),

in which the Seventh Circuit noted that affidavits offered

in opposition to a summary judgment motion were not

based on personal knowledge. The court stated that Fed.

R. Civ. P. 56(e) incorporates Fed. R. Ev. 602, and that

evidence offered on summary judgment must be based

on the affiant’s or deponent’s observation or other first-

hand experience. 924 F.2d at 659. See also Price v.

Rochford, No. 90-1179, slip op. at 7 (7th Cir., Nov. 8,

1991) (“The court believed the articles to be inadmissible.

... If so, they fail to meet the requirements of Rule 56

(e)”).

The plaintiffs respond that the court should give some

leeway as to evidence submitted at the summary judgment

stage because of the preliminary nature of the proceeding,

citing McFeely v. United States, 700 F. Supp. 414, 418,

n.l (S.D. Ind. 1988); and Reed v. Ford Motor Co., 679

F. Supp. 873 (S.D. Ind. 1988). Although each of those

cases contain the broad language on which the plaintiffs

rely, 700 S. Supp. at 418 n.1 (“Some leeway is given at

rea enamel

39a

summary judgment because of the preliminary nature of

the proceedings”); 679 F. Supp. at 875 (“the court will

not exclude evidence at this stage on grounds of hearsay,

irrelevance, or undue prejudice”), the cases’ holdings do

not support an overly broad reading of Fed. R. Civ. P.

56(e).

The McFeely court, which appears to have raised the

issue sua sponte, considered deposition testimony under

Fed. R. Civ. P. 804(b)(1) despite the absence of a show-

ing of the deponent’s unavailability, but described its

decision as “generous”, and noted that, “Hearsay evidence

that does not qualify under any of the hearsay exceptions

may not be considered by the courts in ruling on a motion

for summary judgment.” 700 F. Supp. at 417-18. The

Reed court considered unauthenticated documents at-

tached to an attorney’s affidavit, with the understanding

that the documents would be the subjects of trial stipula-

tions. These cases deal with unique circumstances. To-

gether, they support the proposition that doubts as to

admissibility should be resolved in favor of admissibility

at the summary judgment stage, but they do not support

a proposition that a summary judgment court may entirely

disregard evidentiary rules governing admissibility at trial.

Accordingly, the court turns to the deposition portions

that Detrex challenges. By way of introduction, the plain-

tiffs contend that the spills fall into three categories:

—the delivery spills: small quantities of a gallon or

more routinely spilled during all or most deliveries

of TCE;

—the overfill spill: an incident in which a storage

tank was overfilled, causing 200 to 300 gallons of

TCE to spill and destroy asphalt; and

—the open-valve spill: an incident in which a truck

left the storage tank with the truck’s valve open,

spilling twenty-five to fifty gallons of TCE.

40a

1. Clifton Cartwright

Mr. Cartwright is EPC’s plant engineer. In his deposi-

tion, he testified that Gary Emerson and Bob Todd told

him of each of the spillage incidents, although Bob Todd

had learned of the overflow spill from another person.

Mr. Cartwright investigated the spills, talking to every-

body he could think of. Detrex argues that since Mr.

Cartwright knows no more than what he was told, his

deposition testimony is inadmissible. Fed. R. Ev. 602,

802.

The plaintiffs respond with several arguments. First,

they argue that the Cartwright testimony is not hearsay

because it is not offered to prove the truth of the matter

asserted. Mr. Cartwright’s testimony as to the purpose of

his investigation following a spill that damaged the as-

phalt, the plaintiffs contend, is offered to prove that the

plaintiffs conducted an investigation pursuant to 40 C.F.R.

§ 300.71(a) (2) (11) (A) (1988), an essential element of

the plaintiffs’ claim in Count I. They also seem to argue

that Mr. Cartwright’s testimony is admissible under Fed.

R. Ev. 803(24). They argue that his testimony is mate-

rial and probative, and that its trustworthiness is not

seriously contested.

The court agrees that Mr. Cartwright’s testimony, if

limited to showing the conduct of the investigation, is

not hearsay. See Fed. R. Ev. 801(c); United States vy.

Blandina, 895 F.2d 293, 300-301 (7th Cir. 1989). If so

limited, his deposition testimony is not proof of any spill.

Spills may be proven only if the residual exception estab-

lished by Rule 803(24) applies.’

2 Fed. R. Ev. 803(24) provides:

A statement not specifically covered by any of the [other]

exceptions [to the hearsay rule] but having equivalent circum-

stantial guarantees of trustworthiness, if the court determines

that (A) the statement is offered as evidence of a material

fact; (B) the statement is more probative on the point for

which it is offered chan any other evidence which the proponent

4la

Admissibility under the residual exception established

by Rule 803(24) requires that “the statement must be

sufficiently trustworthy, material, probative, in the inter-

ests of justice, and given to opposing parties with the

proper notice.” F.T.C. v. Amy Travel Service, Inc., 875

F.2d 564, 576 (7th Cir.), cert denied, 110 S.Ct. 366

(1989). At this point, the court affords the plaintiffs the

leeway discussed in McFeely and Reed: the record con-

tains no suggestion that Detrex was given notice that the

plaintiffs intended reliance on Rule 803(24), see United

States v. Wilkus, 875 F.2d 649, 655 (7th Cir.) cert.

denied, 110 S.Ct. 184 (1989), but at the summary judg-

ment stage, the court will consider the statements’ ad-

missibility under the remaining tests.

District courts have considerable discretion in applying

the residual exception. United States v. Mokol, 939 F.2d

436, 438 (7th Cir. 1991); United States v. Doerr, 886

F.2d 944, 954 (7th Cir. 1989); United States v. York,

852 F.2d 221, 224 (7th Cir. 1988); United States v.

Howard, 774 F.2d 838, 845 (7th Cir. 1985). The re-

sidual exception is “intended to be used rarely, and only

in exceptional circumstances.” United States v. Moore,

791 F.2d 566, 573 (7th Cir. 1986); Huff v. White Motor

Corp., 609 F.2d 286, 291 (7th Cir. 1979).

Among the factors considered in determining whether

to apply the residual exception are the declarant’s dis-

interest, United States v. Jackson, 780 F.2d 1305, 1316

(7th Cir. 1986); United States v. Howard, 774 F.2d at

845, the declarant’s motivation to lie, United States v.

York, 852 F.2d at 225, whether the statement was made

under oath, United States v. Hooks, 848 F.2d 785, 797

(7th Cir. 1988); United States v. Guinan, 836 F.2d 350,

355 (7th Cir.), cert. denied, 487 U.S. 1218 (1988);

United States v. Boulahanis, 677 F.2d 586, 588 (7th

can procure through reasonable efforts; and (C) the general

purposes of these rules and the interests of justice will best be

served by admission of the statement into evidence,

42a

Cir.), cert. denied 459 U.S. 1016 (1982), the declarant’s

probable motivation in making the statement, United

States v. Marshall, 856 F.2d 896, 901-902 (7th Cir.

1988); United States v. Guinan, 836 F.2d at 355; Cook

v. Hoppin, 783 F.2d 684, 691 (7th Cir. 1986), the extent

of the declarant’s personal knowledge of the events re-

counted in the statement, United States v. Doerr, 886

F.2d at 956; F.T.C. v. Amy Travel Service, Inc., 875 F.2d

at 576; United States v. Snyder, 872 F.2d 1351, 1356

(7th Cir. 1989), the probable accuracy of the witness’s

recounting of the declarant’s statement, United States v.

Hooks, 848 F.2d at 797, a testifying witness’s knowledge

of the statement’s contents, United States v. Peters, 791

F.2d 1270, 1293 (7th Cir.), cert. denied sub nom, Odonen

v. United States, 479 U.S. 847 (1986), the declarant’s

age, United States v. York, 852 F.2d at 225, the declar-

ant’s character for truthfulness and honesty, United States

v. Snyder, 872 F.2d at 1355, the frequency with which

the declarant made similar statements, United States v.

Vretta, 790 F.2d 651, 659 (7th Cir.). cert. denied, 479

U.S. 851 (1986); United States v. Howard, 774 F.2d at

846, whether the declarant recanted the statement, United

States v. Moore, 936 F.2d 1508, 1517 (7th Cir. 1991),

the statement’s temporal proximity to the event related,

United States v. Vretta, 790 F.2d at 659, and the exist-

ence of sufficient corroborative evidence, United States v.

York, 852 F.2d at 225; accord, United States v. Mokol,

939 F.2d at 440 (“where the testimony is critical to the

case, the trial court may require a high degree of cor-

roboration” ).

The court also must consider whether more probative,

admissible evidence exists, United States v. Powell, 894

F.2d 895, 901 n.5 (7th Cir.) cert. denied, 110 S.Ct. 2189

(1990); United States v. Wilkus, 875 F.2d 649, 655

(7th Cir.) cert. denied, 110 S.Ct. 184 (1989); United

States v. Vretta, 790 F.2d at 658-659; Huff v. White

Motor Corp., 609 F.2d at 295, although sheer need alone

43a

does not justify admission. United States v. Snyder, 872

F.2d at 1355.

The court cannot find that Mr. Cartwright’s testimony

is admissible under Rule 803(24) to prove the truth of

what he was told about the spills. The cases discussed

above indicate that with very rare exceptions, the declar-

ants’ identities and the basis of the declarants’ knowledge

must be known. Without such knowledge, the court can-

not evaluate the declarants’ disinterest, motivation, per-

sonal knowledge, general truthfulness, or consistent repe-

tition. For example, in Cook v. Hoppin, 783 F.2d at 691,

the court found error in admission of statements under

Rule 803(24) when the declarants’ identities were un-

known, and the declarants themselves may have based

their statements on hearsay. Under such circumstances,

the court held, an analysis cannot even begin as to

whether the statements have the requisite circumstantial

guarantees of trustworthiness.

Mr. Cartwright was asked the names of the persons

with whom he spoke, and he provided six names. He was

unable, however, to recall what he was told by each of

them. Accordingly, the analysis required by Rule 803(24)

cannot be satisfied.

Mr. Cartwright’s deposition testimony may be consid-

ered, but only insofar as it is offered to establish that the

plaintiffs engaged in an investigation of the spills. It is

inadmissible, and so may not be considered on summary

judgment, to establish that spills occurred.

2. Gary Emerson

Mr. Emerson testified to having seen TCE end up on

the ground when trucks filled the tanks on ten to fifteen

occasions from the “late seventies up through early

eighties”, although he could not provide exact dates. The

earliest such occasion was about 1978. Detrex moves to

strike Mr. Emerson’s testimony as irrelevant because he

44a

did not identify the delivery company, so the spills can-

not be attributed to Detrex. Detrex argues that this un-

certainty causes the potential for unfair prejudice to sub-

stantially outweigh the testimony’s probative value. The

court disagrees.

The record indicates that Detrex was the plaintiffs’ sole

supplier of TCE from 1978 to 1986, the years encom-

passing Mr. Emerson’s observations. That Detrex em-

ployed Transport drivers on fifteen deliveries does not

render Mr. Emerson’s testimony unduly prejudicial, be-

cause Detrex may be liable under 42 U.S.C. § 9607(a) (3)

for arranging transport for disposal of a hazardous sub-

stance.

Detrex’s motion to strike Mr. Emerson’s deposition

testimony must be denied.

3. John Graber

Mr. Graber testified that in the early to mid-1980s, he

“heard about a spill out in the back” “from different

people around the plant here, talking about it.” He heard

that somebody fell asleep while filling the tank, causing

en overflow. Detrex objects on hearsay grounds.

The plaintiffs first respond that the Graber testimony

is offered only to corroborate other evidence of the over-

flow spill. If the testimony is offered to prove the fact

of the spill, however, it is hearsay. The plaintiffs then

argue that the evidence is admissible to establish the

time of the overflow spill, placing it in the years in which

Detrex was the plaintiffs’ sole supplier of TCE. The

plaintiffs offer no authority for this use of the evidence.

Finally, the plaintiffs argue that Mr. Graber’s testimony

is admissible under Rule 803(24). Mr. Graber’s testi-

mony provides no basis for evaluating the declarant, how-

ever; the sources of his information are completely un-

identified. Accordingly, for the reasons set forth in the

discussion with respect to Mr. Cartwright’s testimony,

Rule 803(24) provides no vehicle for admissibility.

45a

Detrex’s motion to strike the deposition testimony of

Mr. Graber must be granted.

4. Ed Hosea

Mr. Hosea testified to the overflow spill that destroyed

the asphalt. He testified that he was not at the plant on

the day it occurred, but was told when he got back. He

was told by “somebody” to look at the asphalt, and

“they said” a Detrex driver had failed to hook his equip-

ment up properly. He was unable to recall the date.

Detrex moves to strike on hearsay grounds. The plain-

tiffs respond with the first and third arguments raised

with respect to Mr. Graber’s testimony. For the reasons

discussed above, those arguments must fail.

Detrex’s motion to strike Mr. Hosea’s testimony must

be granted.

5. Richard Mann

Mr. Mann testified to having heard of the overflow

spill and to having seen delivery spills, although he could

not specify the time period in which he observed the de-

livery spills. Detrex moves to strike the testimony con-

cerning the overflow spill as hearsay, and moves to strike

the testimony concerning the delivery spills under Rule

403.

Mr. Mann’s testimony about the delivery spills has

substantial probative value that outweighs any risk of

unfair prejudice. His testimony that the time period about

which he spoke was before the second TCE storage tank

was installed, an event that occurred after Detrex became

sole supplier, makes his observations relevant, and the

risk of unfair prejudice is negligible at the summary judg-

ment stage.

With respect to the testimony about the overflow spill,

the plaintiffs again seek refuge in Rule 803(24). Unlike

most of the other declarants at issue in the motion to

strike, Mr. Mann identified the source of his information:

46a

he said he heard about spill from Mr. Todd and night

watchman Dewel Abner. As is discussed below, Mr.

Todd says his information came in part from Mr. Mann;

testimony that seeks its requisite foundation of personal

knowledge from declarants who each disclaim personal

knowledge cannot be said to bear sufficient circumstantial

guarantees of trustworthiness.

The case for admissibility is stronger to the extent

Mr. Mann was relating what he learned from Dewel

Abner, who has not (in this record) denied personal

knowledge. Mr. Mann’s attribution is, however, the only

mention of Mr. Abner that the court has found in the

record before it. The record contains nothing to suggest

a basis for a determination of Mr. Abner’s character for

truthfulness, the consistency of his statements, or even

the basis of his knowledge. Accordingly, the court must

conclude that Mr. Mann’s testimony about the overfill

spill is inadmissible hearsay.

The motion to strike Mr. Mann’s testimony about the

delivery spills should be denied. The motion to strike

Mr. Mann’s testimony about the overfill spills must be

granted.

6. Robert Todd

Mr. Todd was EPC’s plant engineer. He testified to

having observed the open-valve spill. He also testified to

having been told of the overflow spill by John Graber,

Dick Mann (and perhaps others), having seen the over-

flow spill’s aftermath on the asphalt parking lot, and

having suggested that the repair bill be sent to Detrex.

Detrex objects to Mr. Todd’s testimony about what

caused the damage to the asphalt.

The plaintiffs respond by noting that shortly after the

overflow spill, Mr. Todd wrote a memo, now lost, about

the incident. The memo was based on information he

had received from an EPC employee with first-hand

knowledge of the incident. The memo, the plaintiffs ar-

gue, satisfied all requirements for a record of regularly

47a

conducted activity, and hence would be admissible under

Fed. R. Ev. 803(6); accordingly, they conclude, Mr.

Todd should be able to testify to the memo’s contents in

light of its unavailability. See Fed. R. Ev. 1004.

The court’s research has disclosed no case that ad-

dresses the admissibility of verbal recollection of a lost

business record prepared eleven years earlier, and the

parties’ research presumably has been equally fruitless.

The cases cited by the plaintiffs relate to lost written

instruments upon which suit was based, rather than writ-

ten accounts of allegedly negligent acts. Assuming that

Mr. Todd would be allowed to testify to the content of

the lost memorandum, however, he did not do so. The

deposition contains no suggestion that he was recounting,

or was asked to recount, the content of the lost memo-

randum; he was testifying to his recollection of what

others told him. That he may have made a contem-

poraneous memorandum does not render his recollection

of what others told him admissible over a hearsay objec-

tion.

The plaintiffs also argue that Mr. Todd’s testimony is

admissible under Rule 803(24). They point to the cir-

cumstantial guarantees of trustworthiness present when

one reports to his superiors, citing Litton Systems, Inc.

v. American Telephone and Telegraph Co., 700 F.2d

785, 818 (2nd Cir. 1983), cert. denied, 464 U.S. 1073

(1984). Mr. Todd, however, testified that his informa-

tion about the overflow spill came from John Graber

and Dick Mann. Mr. Mann, however, testified that he

learned of the overflow spill from Mr. Todd, and Mr.

Graber testified that he learned of the overflow spill from

unidentified persons. Given that both identified sources

of Mr. Todd’s information disclaim personal knowledge

of the overflow spill (although Mr. Todd also may have

acquired information from others not identified, whose

personal knowledge cannot be evaluated), the court can-

not find that Mr. Todd’s testimony bears sufficient cir-

48a

cumstantial guarantees of trustworthiness for admissibility

under Rule 803(24).

Detrex also moves to strike the portions of Mr. Todd’s-

testimony in which he stated that the damage to the

asphalt was caused by TCE. The court is not willing to

hold that Mr. Todd lacks sufficient experience and train-

ing to testify that the damage he personally observed was

consistent with a spillage of TCE. Even accepting the

testimony to that extent, however, Mr. Todd has demon-

strated no basis, other than inadmissible hearsay, for any

opinion that the damage was caused by an overfill spill

or by Detrex’s negligence.

The motion to strike Mr. Todd’s testimony concerning

the overfill spill must be granted.

7. Henry Copenhaver

Mr. Copenhaver, an EPC employee, testified in his

deposition that Bob Todd had told him “that there was

a spill and that we should contact whoever was involved

in it and make them aware.” He does not recail speaking

to any supplier, although he identified the purchase or-

ders for asphalt repair. Detrex moves to strike Mr.

Copenhaver’s testimony about the conversation with Mr.

Todd.

The plaintiffs argue that Mr. Copenhaver’s testimony

is admissible to show notice to Detrex and is admissible

under Rule 803(24). As discussed with respect to the

Cartwright testimony, if the testimony is offered only to

show notice, it is not hearsay. Mr. Copenhaver’s iesti-

mony does not, however, show notice to Detrex; Mr.

Copenhaver denied any recollection of notifying Detrex

or any other supplier. The plaintiffs point to the testt-

mony of Stan Miles of Detrex, who testified that Mr.

Copenhaver called him and said there had been a spill

and that Mr. Copenhaver would check into it. The Miles

testimony is probative of notice, but the Copenhaver tes-

timony is not.

49a

The Copenhaver testimony is not admissible under

Rule 803(24). Mr. Copenhaver knows no more about

the overfill spill than Mr. Todd told him, and Mr. Todd’s

knowledge cannot be traced to anyone with personal

knowledge of the overfill spill.

Accordingly, Detrex’s motion to strike the Copenhaver

testimony must be granted.

8. Robert Peterson

Mr. Peterson described the overflow spill. He dis-

claimed any personal knowledge of the spill; he heard

about it from Mr. Todd. He also testified that when he

was presented with the invoice to replace the asphalt

parking lot, someone (he does not recall who) told him

of the spill, and he relayed the information to Detrex.

Detrex moves to strike on hearsay grounds.

The plaintiffs make several arguments in support of

admissibility. First, thye note that evidence introduced

to show why a person acted as he did is not hearsay,

citing United States v. Amahia, 825 F.2d 177, 181 (8th

Cir. 1987). This argument is correct, although it would

preclude the court from viewing Mr. Peterson’s testimony

as substantive proof of the overflow spill. See United

States v. Martinez, 939 F.2d 412, 415 (7th Cir. 1991).

The plaintiffs also argue that Mr. Peterson’s testimony

falls within Rule 803(24). Everything Mr. Peterson re-

lated about the overflow spill, however, came from Mr.

Todd who, in turn, testified that his information came

entirely from persons who disclaim personal knowledge

of the overflow spill or unidentified persons. Notwith-

standing the presence of some guarantees of trustworthi-

ness inherent in a process of reporting within a business,

the evidence nonetheless amounts to a totem pole of

hearsay of undetermined length: Mr. Peterson relates

what he was told by Mr. Todd, who relates what he was

told by Messrs. Graber and Mann, who related what

50a

they were told by others, whose personal knowledge is

uncertain.

Finally, the plaintiffs argue that Mr. Peterson’s testi-

mony is against his pecuniary interest, Fed. R. Ev. 804

(b)(3), noting that Mr. Peterson was a defendant in the

plaintiffs’ parallel state court action. While such an argu-

ment might * render Mr. Peterson’s statements admissible.

it would not render admissible statements other persons

made to Mr. Peterson; Detrex’s motion to strike is ad-

dressed to the statements of others. See Fed. R. Ev. 805.

9. Dennis Selner

Mr. Selner testified to having seen the damage to the

asphalt after the overfill spill. What he knows about the

spill is what Mr. Todd told him. Detrex moves to strike

his testimony about the cause of the spill on hearsay

grounds. Again, the plaintiffs argue for admissibility

under Rule 803(24). As discussed above, Mr. Todd

(Mr. Selner’s source of information) had no _ personal

knowledge about the overfill spill, and acquired his in-

formation either from unidentified persons or from per-

sons who also lacked personal knowledge. For the rea-

sons discussed above, the court cannot find Mr. Selner’s

challenged tetsimony to be admissible under Rule 803

(24).

The motion to strike Mr. Selner’s testimony about the

overfill spill must be granted.

10. David Smith

Mr. Smith testified to what Mr. Todd told him about

the overfill and open-valve spills, to having seen the

asphalt the day following the overfill spill, and to Mr.

Todd having told him about Mr. Copenhaver’s contact

with Detrex about the incident. Detrex moves to strike

3 The plaintiffs would have to provide a further explanation of

why Mr. Peterson’s challenged testimony was against his pecuniary

interest, a ,oint not immediately apparent from the deposition

excerpt.

————————————OOEeEeEeEeEeEeEeEeEeEeEe——EE——Eee

Sla

these portions of Mr. Smith’s deposition testimony as

hearsay.

The plaintiffs argue that Mr. Smith’s testimony is ad-

missible under Rule 803(24). They stress the consistency

of Mr. Smith’s testimony about the overfill spill with the

accounts of others. Although consistency may be perti-

nent to determining admissibility under Rule 803(24),

it is not determinative: repetition does not render hearsay

admissible. More persuasive is the absence of any person

shown to have personal knowledge of the overfill spill.

If, as decided above, Mr. Todd cannot testify to what

he was told about the overflow spill, Mr. Smith cannot

testify to what Mr. Todd told him.

Because the summary judgment record already contains

Mr. Todd’s deposition testimony (based on_ personal

knowledge) about the open valve spill and Mr. Miles’s

testimony about the conversation with Mr. Copenhaver,

the motion to strike the remaining challenged portions of

Mr. Smith’s testimony is moot.

The motion to strike Mr. Smith’s testimony must be

granted insofar as it relates to the overfill spill.

11. Conclusion

Following ruling on the pertinent portions of the mo-

tion to strike, the court agrees with Detrex in part. There

is no evidence in compliance with Federal Rule of Civil

Procedure 56(e) with respect to the overfill spill. To

the extent the plaintiffs’ claims arise from that allega-

tion, Detrex is entitled to summary judgment. There is,

however, evidence of compliance with Federal Rule of

Civil Procedure 56(e) with respect to the delivery spills

and the open-valve spill; to the extent the plaintiffs’ claims

arise from those allegations, the claims survive. CERCLA

imposes no quantitative requirement on a release. Lou-

isiana-Pacific Corp. v. Asarco, Inc., 735 F. Supp. 358,

361-362 (W.D. Wash. 1990).

ae ao eee

52a

B. Second Motion to Strike

Detrex’s second motion to strike addresses a document

the plaintiffs submitted as an attachment to their reply to

Detrex’s response to the plaintiffs’ partial summary judg-

ment motion. Because that attachment neither strengthens

the plaintiffs’ case with respect to the overfill spill nor

weakens the case with respect to the delivery spills and

the open-valve spill, the issue is moot. The court is com-

pelled to add, however, that Detrex’s argument that the

submission offends the district rules on summary judg-

ment motions does not impress the court.

District Rule 13 requires one opposing a summary

judgment to identify the fact issues the opponent believes

are in genuine dispute. Detrex has not done so, despite

repeated reminder by the plaintiffs. As the plaintiffs

note, the failure to comply with such a rule may consti-

tute grounds for granting the summary judgment motion.

See, e.g., Appley v. West, 929 F.2d 1176 (7th Cir.

1991). The court has declined to follow that course in

this case because Detrex has opposed the plaintiffs’ mo-

tion vigorously, relying on the inadmissibility and ab-

sence of the plaintiffs’ proof. Detrex’s papers adequately

identify those issues pertinent to summary judgment. The

court believes it inappropriate, however, for a party who

has ignored the rules to move to strike an adversary’s

submissions for failure to comply with the rules.

C. Evidence of Compliance with NCP

Detrex also moves to strike an exhibit to the plaintiffs’

summary judgment motion and the deposition testimony

of John Mundell.

Exhibit | to the plaintiffs’ memorandum in support of

summary judgment consists of a report prepared by

ATEC Associates, Inc., entitled Review of Investigation

and Remedial Activity Consistency with the National Oil

and Hazardous Substances Pollution Contingency Plan.

Exhibit 13 is a portion of the deposition testimony of

53a

John Mundell, an ATEC employee. Plaintiffs’ counsel

contacted Mr. Mundell to review the documents and ac-

tivities associated with the EPC site and determine

whether the plaintiffs’ investigative and remedial activi-

ties complied with the NCP. The report reviews the in-

vestigations of soil and groundwater contamination and

remediation efforts at the EPC site and concludes that

these efforts complied with the NCP.

Detrex asserts that the ATEC Report and Mr. Mun-

dell’s testimony are inadmissible expert opinions on a

question of law. The plaintiffs argue that their consist-

ency with the National Contingency Plan is a question of

fact, and expert opinion is, therefore, appropriate.

Both parties cite County Line Investment Co. v. Tin-

ney, 933 F.2d 1508, 1512 (10th Cir. 1991),

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