Petition for Writ of Certiorari — GenCorp, Inc. v. Olin Corp.

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Supreme Court, U.S.

FILED

05-11 JUN 27 2005

No. —— OFFICE OF THE cic

In the

Supreme Court of the United States

GENCORP INC.,

Petitioner,

Vv.

OLIN CORPORATION,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals for the Sixth Circuit

PETITION FOR A WRIT OF CERTIORARI

Rosert J. JONKER* MICHAEL Harpy

JoHN V. ByL KEELY J. O'BRYAN

DEAN F. PAciFic Thompson Hine LLP

Warner Norcross & Judd LLP 3900 Key Center

900 Fifth Third Center 127 Public Square

111 Lyon Street, N. W. Cleveland, OH 44114-1291

Grand Rapids, MI 49503 (216) 566-5500

(616) 752-2000 Counsel for Petitioner

Counsel for Petitioner

June 27, 2005 * Counsel of Record

Becker Gallagher Legal Publishing, Inc. 800.890.5001

ey 2

POR TROT NEAR,

Ca a as San Ga on cn ee

QUESTIONS PRESENTED

1. Is a unilateral administrative order a “civil action” that

triggers a right of contribution under section 113(f)(1) of

CERCLA, 42 U.S.C. § 9613(f)(1), a question this Court

reserved in Cooper Industries, Inc. v. Aviall Services,

Inc., 125 S. Ct. 577 (2004)?

2. Can a party who neither -“owned [nJor possessed”

hazardous substances be liable for arranging for disposal

of those substances under section 107(a)(3) of CERCLA,

42 U.S.C. § 9607(a)(3)?

3. Cana party that did not actually arrange for disposal of

hazardous substances be liable under section 107(a)(3) of

CERCLA, 42 U.S.C. § 9607(a)(3), despite this Court’s

unanimous holding in United States v. Bestfoods, 524

U.S. 51 (1998), requiring actual operation of disposal

facilities for liability under section 107(a)(2) of CERCLA,

42 U.S.C. § 9607(a)(2)?

PARTIES TO THE PROCEEDING AND

RULE 29.6 STATEMENT

The only parties to this proceeding are Petitioner GenCorp

Inc. and Respondent Olin Corporation. Pursuant to Supreme

Court Rule 29.6, Petitioner GenCorp Inc. states that it has no

parent corporation.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ...........-.------ i

PARTIES TO THE PROCEEDING AND

RULE 29.6 STATEMENT ............------- ii

J FS v

PETITION FOR A WRIT OF CERTIORARI ....... l

rr 1

bra, he Sv eee exne l

STATUTORY PROVISIONS INVOLVED ......... l

ee ee pep aae nee hee 2

STATEMENT OF THECASE ...........----- 4

tts isis a ee ae & oalbie 6 4-678 4

II. The Trial Court Imposes Liability Under Section

113(f(1) On GenCorp ........2-22-20ee-, 5

Ill. The Sixth Circuit Affirms Even Though GenCorp

Did Not Own Or Possess Olin’s Hazardous Waste

And Did Not Actually Arrange For Its Disposal . 6

IV. The Sixth Circuit Does Not Address The Effect Of

Cooper Industries, Inc. v. Aviall Services, Inc. . 7

«ata acca

REASONS FOR GRANTING THE PETITION ...... 8

I. This Court Should Grant The Petition To Address

The Issue Reserved In Cooper Industries ..... 9

Il. The Sixth Circuit’s Decision Conflicts With

Relevant Decisions Of This Court .......... 14

A. The imposition of arranger liability under

CERCLA conflicts with this Court’s analysis

in Dole Food Co. v. Patrickson ......... 14

B. The Sixth Circuit’s decision nullifies the

CERCLA liability limits this Court established

in United States v. Bestfoods ........... 16

CAME 6. as cw e555 4a bbs need ese ea 18

APPENDIX

Appendix A - 3/29/05 - Sixth Circuit Order

FE Pe re terre la

Appendix B - 11/22/04 - Sixth Circuit Opinion .. . . 3a

Appendix C - 7/14/99 - District Court

Memorandum and Opinion ................ 33a

;

TABLE OF AUTHORITIES

Page

Cases

Atkinson v. Sinclair Refining Co.,

SIO U.S. TICE ao ws vine ws ca eens eeees 9

Barrows v. American Airlines, Inc.,

164 F. Supp. 2d 179(D. Mass. 2001) ........--. 13

Blue Chip Stamps v. Manor Drug Stores,

PviGie @ rift. c> Sere. . Terroir. 9

Bradley v. United States,

PY & Yi, ot ere ere a 2 9

Brogan v. United States,

S22 GE SURG 06 hhc ae eaten 15

Carter-Jones Lumber Co. v. Dixie Distribution Co..,

166 F.3d 840 (6th Cir. 1999) ............-. 6, 16

Complete Auto Transit, Inc. v. Reis,

451 UB, 401 CISED) 20 ce sr sete: yer te

Cooper Industries, Inc. v. Aviall Services, Inc.,

495.6. Cx. S77 Gk oc a ed dhe ee passim

Dole Food, Inc. v. Patrickson,

$38 U.S. 468 GGUS) uc cc ce sae a ce eees passim

Good Samaritan Hospital v. Shalala,

~ SiR 8). Seer ee 15

Herman & MacLean v. Huddleston,

GP Uae SOP UREEED ke vawdineedbienwesauen 9

In re Hinote, |

179 F.R.D. 335 (S.D. Ala. 1998) ............ 13

Lawrence v. Chater,

FeO Ul Bae Clee 0 steeds wennsneee 11, 12

N.V. Philips’ Gloeilampenfabrieken v. AEC,

316 F.26 460 GD. Cir. TSG cccccccvcccces 13

th li a ars

Oppenheim v. Campbell,

$71 F.2d 660 (D.C. Cir. 1978) .............. 13

Pharmacia Corp. v. Clayton Chemical Acquisition LLC,

No. 02-CV-0428, 2005 WL 615755

C.D. Ti. Hat. G, See 6.604 dee 10, 13

Raytheon Constructors, Inc. v. Asarco,

368 F.36 2254 CHG. BOO 6 cbt csc decane 17

Riley v. Kurtz,

361 F.3d 906 (6th Cir. 2004) ............2..- 13

Stutson v. United States,

is SY...) Peweerr yy 12

United States v. Bestfoods,

Tae UD. Fa Gee s ba ak oaee saunas passim

United States v. Northeastern Pharmaceutical &

Chemical Co., 810 F.2d 726 (8th Cir. 1986) ..... 15

2 L——

vil

United States v. Shell Oil Co.,

294 F.3d 1045 (9th Cir. 2002)......

Warden, Lewisburg Penitentiary v. Marrero

417 U.S. 653 (1974) ..........--

Statutes

Oe OU be isi oyesee ss

28 U.S.C. § 1603(b)(2)......-------

28 U.S.C. §240\(a) ........------

42 U.S.C. $905 .........---005-

BUSO BONE. oi. cicvecvess.

42 U.S.C. § 9607(aX3) ....---------

42 U.S.C. $ 9613(f) .......-----6--

42 U.S.C. § 9613(f(1) ....- 2. - ee ee

42 U.S.C. § 9613(g)3).....--------

Miscellaneous

Black’s Law Dictionary, 29 (7th ed. 1999)

FRR ers

1) one PR pC

PETITION FOR A WRIT OF CERTIORARI

Petitioner, GenCorp Inc. (“GenCorp”), respectfully

petitions this Court to review the judgment of the United

States Court of Appeals for the Sixth Circuit.

OPINIONS BELOW

The opinion of the Sixth Circuit (App. 3a-22a) is reported

at 390 F.3d 433 (6th Cir. 2004). The opinions of the trial

court are unreported. The liability decision of the trial court

is reproduced at App. 33a-109a.

JURISDICTION

The Sixth Circuit’s judgment was entered on November

22, 2004. (App. 3a.) The Sixth Circuit denied GenCorp’s

petition for rehearing and suggestion for rehearing en banc on

March 29, 2005. (App. la.) This Court has jurisdiction

under 28 U.S.C. § 1254(1).

STATUTORY PROVISIONS INVOLVED

Section 113(f)(1) of the Comprehensive Environmental

Response, Compensation, and Liability Act (“CERCLA”), 42

U.S.C. § 9613(f)(1), provides in relevant part:

Any person may seek contribution from any other

person who is liable or potentially liable under section

9607(a) of this title, during or following any civil

action under section 9606 of this title or under section

9607(a) of this title. Such claims shall be brought in

accordance with this section and the Federal Rules of

Civil Procedure, and shall be governed by Federal

law. ...

Section 107(a)(3) of CERCLA, 42 U.S.C. § 9607(a),

provides in relevant part that persons who are liable under

CERCLA include the following:

[A]Jny person who by contract, agreement, or

otherwise arranged for disposal or treatment, or

arranged with a transporter for disposal or treatment,

of hazardous substances owned or possessed by such

person, by any other party or entity, at any facility or

incineration vessel owned or operated by another

party or entity and containing such hazardous

substances... .

INTRODUCTION

This case involves an issue of national importance that this

Court specifically reserved in Cooper Industries, Inc. v.

Aviall Services, Inc., 125 S. Ct. 577 (2004): whether a

unilateral administrative order (“UAO”) issued by the United

States Environmental Protection Agency (“EPA”) under

section 106 of CERCLA, 42 U.S.C. § 9606, is a “civil

action” that permits a party subject to the UAO to bring a

contribution action under CERCLA. In Cooper Industries,

this Court held that a party cannot maintain a contribution

action under section 113 of CERCLA, 42 U.S.C. § 9613(f),

unless the party was previously sued in a “civil action” under

section 106 or section 107(a) of CERCLA. This Court

specifically reserved the question of whether a UAO is a

“civil action,” because the question was not presented by the

facts of Cooper Industries. The present dispute squarely

presents that question, because the vast majority of the more

than $60 million of environmental response costs that

Tae RRO De ha BE a tet Sta

Respondent Olin seeks to recover from Petitioner were

incurred under UAOs.

There are nearly 1,000 UAOs presently pending in forty-

seven states, involving billions of dollars of cleanup expenses.

See United States Environmental Protection Agency,

Superfund Information Systems, CERCLIS Database,

available at http://cfpub.epa.gov/supercpad/cursites/srchsies.

cfm. (Last visited May 10, 2005). In this case, as in

numerous others, a party subject to a UAO has sought

contribution from other potentially responsible parties under

section 113(f)(1) of CERCLA. But following this Court’s

reasoning in Cooper Industries, section 113(f)(1)’s plain,

unambiguous statutory language does not allow a contribution

action to be maintained based solely ona UAO. Accordingly,

this Court should grant certiorari to resolve this important

issue or, in the alternative, grant certiorari, vacate the Sixth

Circuit’s decision, and remand for further consideration

consistent with Cooper Industries.

This case also raises important questions regarding the

scope of liability under section 107(a)(3) of CERCLA. The

Sixth Circuit decided to impose liability under CERCLA

against Petitioner GenCorp, which did not own or possess and

which did not actually arrange for the disposal of hazardous

substances, as section 107(a)(3) plainly requires. Instead, the

Sixth Circuit imposed liability based on a “control” test that

does not appear anywhere in the statutory language. The

Sixth Circuit’s decision squarely conflicts with this Court’s

analysis of analogous statutory language in Dole Food, Inc. v.

Patrickson, 538 U.S. 468 (2003). It also conflicts with the

carefully crafted liability limitations this Court announced in

United States v. Bestfoods, 524 U.S. 51 (1998), which made

clear that CERCLA only imposes direct liability on a party

for the party’s own actions, not for the alleged “control” of

other parties.

The CERCLA liability issues raised in this dispute present

recurring questions of national significance as the country’s

efforts to remediate environmental contamination continue,

and the lawsuits those efforts invariably spawn persist. The

importance of the questions presented counsels in favor of this

Court’s grant of the petition.

STATEMENT OF THE CASE

: Overview.

In the 1960s, Petitioner GenCorp, then known as General

Tire and Rubber Company, manufactured urethane foam for

mattresses and other products. (App. 5a.) GenCorp’s

process for producing the foam required the chemical toluene

di-isocyanate (“TDI”). (/d.) Respondent Olin had developed

a proprietary process for the commercial production of TDI

and was looking for customers. (App. 5a, 35a.)

Olin and GenCorp negotiated a supply contract in 1962 by

which Olin would sell TDI to GenCorp. (App. 5a.) Under

the contract, Olin built a plant to produce TDI on land owned

by GenCorp. (/d.) Olin owned and operated the plant,

manufactured the TDI, owned the hazardous waste created by

the plant, and made arrangements with a local transporter to

haul Olin’s hazardous waste to a landfill known as “Big D.”

(App. 6a.) GenCorp was Olin’s customer, agreeing to buy

half of the TDI Olin manufactured at its TDI plant. (Jd.)

GenCorp also secured an option to purchase the plant from

Olin (App. 45a), although the option was never exercised and

Olin owned and operated the plant until Olin dismantled it.

(App. 9a, 52a.)

Olin acknowledged environmental problems at Big D in

1970 (App. 9a.), and the EPA issued a UAO against Olin for

the cleanup of the TDI plant site, known as the Fields Brook

site, on March 22, 1989. (App. 58a, 68a.) A year later, the

EPA issued a UAO against Olin for the cleanup of the Big D

site. (App. 10a, 59a, 68a.) GenCorp was not named in the

UAOs. Olin claims it incurred more than $65 million in

remediation and response costs. (App. 9a, 62a.)

Importantly, the EPA never initiated a judicial proceeding to

impose the cleanup plan or require Olin to fund it.’

Il. The Trial Court Imposes Liability Under Section

113(f)(1) On GenCorp

After “completely exclud{ing] GenCorp from more than

a decade of negotiations with the US EPA,” Olin belatedly

targeted GenCorp by asserting that GenCorp was liable to

Olin for contribution under section 113(f)(1) of CERCLA.

(App. 98a.) After a bench trial, the trial court concluded that

GenCorp was liable under section 113(f)(1) for having

arranged for the disposal of Olin’s hazardous waste (App.

12a, 91a-92a), even though the trial court did not find that

GenCorp ever owned or possessed the hazardous waste

disposed at issue. The trial court imposed on GenCorp 40%

of the cleanup costs for the Fields Brook site and 30% of the

cost for the cleanup associated with the Big D dump site.

(App. 12a, 108a.)

! Both the EPA and the Ohio Environmental Protection Agency did

sue Olin under section 107(a) of CERCLA to recover oversight

costs. Olin settled these suits and agreed to reimburse these

government agencies for their administrative costs. These costs are

distinct from the costs Olin incurred to remediate its pollution of the

TDI plant and Big D sites.

Ili. The Sixth Circuit Affirms Even Though GenCorp

Did Not Own Or Possess Olin’s Hazardous Waste

And Did Not Actually Arrange For Its Disposal.

The Sixth Circuit affirmed the trial court decision on

November 22, 2004. (App. 4a.) The Sixth Circuit concluded

that even though Olin, not GenCorp, actually arranged for

disposal of the hazardous waste, and Olin, not GenCorp,

owned and possessed the hazardous waste, GenCorp could be

held liable as an arranger under CERCLA. (App. 4a, 20a,

21a-28a.)

The Sixth Circuit began by refusing to apply what the

Sixth Circuit had previously referred to as the “Bestfoods

requirement” that a defendant “be actively involved in the

arrangements for disposal.” See Carter-Jones Lumber Co. v.

Dixie Distrib. Co., 166 F.3d 840, 846-47 (6th Cir. 1999).

Instead, the Sixth Circuit limited this Court’s reasoning in

Bestfoods to the proposition “that CERCLA does not alter the

common-law principle that, in the absence of a valid reason

for piercing the corporate veil, a parent corporation is not

liable for the acts of subsidiaries.” (App. 23a.) The court

concluded that GenCorp, as a large Olin customer, had a

generalized intent to dispose of the hazardous waste at issue

even though GenCorp was not actually involved in making

arrangements for disposal of the waste.

The Sixth Circuit compounded its limitation of Bestfoods

by concluding that GenCorp could be liable for arranging for

the disposal of hazardous substances that it never “owned or

possessed.” Instead, the court affirmed liability based solely

on alleged “control” of the hazardous substances owned and

possessed by Olin. (App. 26a-28a.) In effect, the court

concluded that control of hazardous waste was an adequate

substitute for the statutory requirement of ownership or

possession.

IV. The Sixth Circuit Does Not Address The Effect Of

Cooper Industries, Inc. v. Aviall Services, Inc.

On December 6, 2004, GenCorp filed a timely petition for

rehearing and suggestion for rehearing en banc. In its

petition, GenCorp advised the Sixth Circuit of this Court’s

pending decision in Cooper Industries, Inc. v. Aviall Services,

Inc. While GenCorp’s petition was pending, the Court issued

its decision in Cooper Industries, holding that CERCLA’s

plain language requires that a party be subject to a civil action

under section 106 or 107(a) of CERCLA before that party can

seek contribution from other potentially responsible parties

under section 113(f)(1). Cooper Indus., Inc. v. Aviall Servs.

Inc., 125 S. Ct. 577 (2004). GenCorp sought and received

leave to file a reply brief to address the effect of the Cooper

Industries decision on this case.

In its reply brief, GenCorp explained that Olin’s claims

should be barred after Cooper Industries because Olin was not

subject to a civil action under section 106 or 107(a) of

CERCLA. Instead, Olin incurred remediation and response

costs complying with UAOs issued by the EPA. Because the

issue of whether a UAO is a “civil action” under section

113(f)(1) was specifically reserved by this Court in Cooper

Industries, 125 S. Ct. at 584 n.5, GenCorp urged the Sixth

Circuit to grant its petition and vacate judgment in favor of

Olin so that either the Sixth Circuit or the district court could

consider whether a unilateral administrative order was a civil

action. The Sixth Circuit denied GenCorp’s petition for

rehearing without comment and without addressing the effect

of this Court’s decision in Cooper Industries. (App. la.)

REASONS FOR GRANTING THE PETITION

This case presents a question of national legal importance

that this Court specifically reserved in Cooper Industries:

whether an administrative order is a “civil action” that

permits a party to maintain a contribution claim under section

113(f)(1) of CERCLA. The Sixth Circuit did not address that

issue, leaving in flux the status of CERCLA contribution

actions involving the nearly 1,000 UAOs that are currently

pending across the country. This Court should grant the

petition and either address the merits of GenCorp’s appeal, or

summarily vacate and remand for reconsideration in light of

Cooper Industries.

This case also presents questions of national import

regarding the scope of arranger liability under CERCLA.

The Sixth Circuit’s decision broadens the scope of liability

under CERCLA beyond the plain language of the statute itself

to impose liability on a party that did not “own” or “possess”

hazardous substances and did not actually arrange for the

disposal of that waste. The decision below thus conflicts with

this Court’s decisions in United States v. Bestfoods, 524 U.S.

512 (1998), and Dole Food, Inc. v. Patrickson, 538 U.S. 468

(2003). Indeed, the decision below effectively imposes

arranger liability on customers simply for purchasing products

with knowledge that the production process will create

hazardous substances that must be disposed, an unprecedented

expansion of CERCLA liability _ rewrites CERCLA’s

liability requirements.

This Court may, of course, allow the issues in this case to

“percolate” in the lower courts until a conflict among the

courts of appeals develops. But in view of the inevitably

recurring nature of the issues, the prospects are high that a

circuit split will emerge. The ensuing percolation is likely to

—-— > Oe ee,

impose a substantial cost on an already overtaxed federal

judiciary. Not only are there a substantial number of

potential plaintiffs who may have an incentive to bring suits

like Olin’s, but those suits are inherently complex, involving

expert testimony and scientific inquiry about site conditions.

In short, if GenCorp is correct that CERCLA does not

authorize contribution following a UAO or based solely on

alleged “control,” then allowing such litigation to go forward

will result in a wasteful expenditure of time and resources for

all concerned. These questions are sufficiently important to

warrant resolution now, just as this Court resolved the

companion question in Cooper Industries.

I. This Court Should Grant The Petition To Address

The Issue Reserved In Cooper Industries.

This Court has often granted certiorari to consider issues

that it specifically reserved in earlier decisions. E.g.,

Herman & MacLean v. Huddleston, 459 U.S. 375, 379-80 &

n.6 (1983) (noting that certiorari had been granted to consider

an issue the Court had previously reserved in Blue Chip

Stamps v. Manor Drug Stores, 421 U.S. 723, 752 n.15

(1975)); Complete Auto Transit, Inc. v. Reis, 451 U.S. 401,

402 (1981) (explaining that certiorari was granted to decide an

“important question of federal labor law” reserved in

Atkinson v. Sinclair Refining Co., 370 U.S. 238, 249 n.7

(1962)). Indeed, this Court has even granted certiorari to

consider issues reserved during the preceding term. Warden,

Lewisburg Penitentiary v. Marrero, 417 U.S. 653, 656 (1974)

(deciding a question that was specifically reserved in Bradley

vy. United States, 410 U.S. 605 (1973)). The present dispute

presents a question this Court reserved in Cooper Industries,

and that issue should be decided now.

In Cooper Industries, this Court granted certiorari to

address whether a party may maintain an action for

contribution under section 113(f)(1) of CERCLA in the

absence of a prior civil action under CERCLA sections 106

or 107(a). Respondent Aviall brought suit under section

113(f)(1), seeking contribution for expenses Aviall incurred

responding to a state agency’s cleanup demands. 125 S. Ct.

at 582. This Court explained that Aviall could not maintain

an action under section 113(f)(1), because Aviall’s suit was

not brought “during or following any civil action under

section 9606 . . . or under section 9607(a) ... .” Jd. at 583;

42 U.S-C. § 9613(f)(1). Aviall was not subject to an

administrative order under section 106, however, so this

Court reserved the issue of “whether such an order would

qualify as a ‘civil action under section 9606 . . . or under

section 9607(a)’ of CERCLA.” Cooper Indus., 125 S. Ct. at

584 n.5 (quoting 42 U.S.C. § 9613(f)(1)). The importance of

the issue this Court appropriately reserved in Cooper

Industries is underscored by the fact that within months of the

decision, a district court had already dismissed claims under

section 113(f)(1) where the plaintiff incurred cleanup

expenses in response to a section 106 UAO. Pharmacia

Corp. v. Clayton Chem. Acquisition LLC, No. 02-CV-0428,

2005 WL 615755, at *11 (S.D. Ill. Mar. 8, 2005).

Here, Respondent Olin similarly incurred almost all of the

costs at issue under two of the EPA’s nearly 1,000 pending

UAOs. Olin did not incur any remediation or response costs

for the Big D and TDI plant sites related to any past or

pending civil action under section 106 or section 107(a) of

CERCLA.’ Accordingly, Olin cannot maintain its claims

? Olin’s contribution action seeks contribution for remediation and

response costs related to three contaminated sites: Big D, Fields

}

‘

against GenCorp under section 113(f)(1) unless the two UAOs

are “civil actions.”

This Court granted certiorari to Cooper Industries on

January 9, 2004, after the substantive briefing in the present

case was already complete. The Sixth Circuit’s decision _

below was entered on November 22, 2004, a few weeks

before this Court issued its decision in Cooper Industries.

Accordingly, GenCorp advised the Sixth Circuit of the

potential impact of the Court’s pending Cooper Industries

decision in its petition for rehearing and suggestion for

rehearing en banc. After the Cooper Industries decision was

issued, GenCorp obtained leave from the Sixth Circuit to file

a reply brief that addressed the effect of Cooper Industries on

this case.2 GenCorp noted that this Court specifically

reserved the issue of whether a UAO can be considered a civil

action to justify a contribution claim under section 113(f)(1).

The Sixth Circuit denied GenCorp’s petition for rehearing

without acknowledging Cooper Industries. (App. la-2a.)

This case is therefore ripe for an order granting certiorari,

vacating the Sixth Circuit’s decision, and remanding the case

for further consideration (“GVR”). The Court explained its

practice of issuing GVR orders in Lawrence v. Chater:

Brook, and the Reserve Environmental Site (CRES”). The vast

majority of the more than $60 million for which Olin seeks

contribution was not subject to any judicial proceeding under

section 106 or section 107(a), and was incurred by Olin under the

EPA’s UAOs for the cleanup of the Big D and Fields Brook sites.

3 GenCorp also raised the question in the district court between the

time of the Fifth Circuit’s panel and en banc decisions, and before

this Court granted certiorari in Cooper Industries.

—————a

Where intervening developments, or _ recent

developments that we have reason to believe the court

below did not fully consider, reveal a reasonable

probability that the decision below rests upon a

premise that the lower court would reject if given the

opportunity for further consideration, and where it

appears that such a redetermination may determine the

ultimate outcome of the litigation, a GVR order is, we

believe, potentially appropriate.

Lawrence v. Chater, 516 U.S. 163, 167 (1996). The most

common reason for issuing a GVR order is “a postjudgment

decision of this Court . . . [that] has cast doubt upon the

judgment rendered by a lower . . . court.” Stutson v. United

States, 516 U.S. 163, 181 (1996) (Scalia, J. dissenting from

the grant of certiorari in Stutson as well as Lawrence) (citing

cases); see Lawrence, 516 U.S. at 166. GVR orders are

especially appropriate where, as here, the Court of Appeals

writes no opinion showing whether and how it considered -

precedent of this Court that the district court did not have any

opportunity to consider. See id. at 169.

This Court’s decision in Cooper Industries is an

intervening development that neither the Sixth Circuit nor the

district court had opportunity to consider. It occurred after

the Sixth Circuit issued its decision on GenCorp’s appeal.

Moreover, the Sixth Circuit’s decision denying rehearing fails

to show whether and how that court considered the Cooper

Industries decision. Instead, the Sixth Circuit’s order

peremptorily denied GenCorp’s petition for rehearing without

substantive comment.

Moreover, Cooper Industries should have outcome-

determinative effect on Olin’s contribution claim. As the

United States District Court for the Southern District of

TE a OP

Illinois explained in Pharmacia, the phrase “civil action” in

section 113(f)(1) must mean “a non-criminal judicial

proceeding.” Pharmacia, supra at *7. See also Riley v.

Kurtz, 361 F.3d 906, 914 (6th Cir. 2004) (quoting Black's

Law Dictionary, 29 (7th ed. 1999)) (“Black's Law Dictionary

defines [the term ‘action’] as ‘any judicial proceeding, which,

if conducted to a determination, will result in a judgment or

decree.’”). And interpreting the term “civil action” in section

113(f)(1) to refer solely to judicial proceedings is consistent

with the interpretation given that term in other contexts. For

example, Federal Rule of Civil Procedure 3 states “a civil

action is commenced by filing a complaint with the court.”

Likewise, the term “civil action” as used in 28 U.S.C.

§ 2401(a) “‘is a term of art judicially and statutorily defined

as one “commenced by filing a complaint with [a] court,” not

an executive board’.” Oppenheim v. Campbell, 571 F.2d

660, 663 (D.C. Cir. 1978) (quoting N.V. Philips’

Gloeilampenfabrieken v. AEC, 316 F.2d 401, 406 (D.C. Cir.

1963)) (alteration in original). See also In re Hinote, 179

F.R.D. 335, 336 (S.D. Ala. 1998) (removal under 28 U.S.C.

§ 1441 applies only to a “civil action” and accordingly

requires the filing of a complaint in court); Barrows v. Am.

Airlines, Inc., 164 F. Supp. 2d 179, 182 (D. Mass. 2001)

(same).

Likewise, interpreting “civil action” to exclude UAOs is

consistent with section 113(g)(3), which establishes a three-

year statute of limitations for contribution actions under

section 113(f)(1) that starts to run at “judgment.” 42 U.S.C.

§ 9613(g)(3). As the Pharmacia court explained, “no

judgment exists as to an administrative order.” Pharmacia,

supra at *7. If, a UAO is not a “civil action” as required by

section 113(f)(1), then Olin cannot maintain a contribution

claim against GenCorp under section 113(f)(1).

Because the Sixth Circuit and the district court did not

have the opportunity to assess the effect of Cooper Industries

on this case, and because the Sixth Circuit gave no indication

whether and how it addressed the decision in its order denying

rehearing, this case is ideal for a GVR order. Alternatively,

the national importance of the issue this Court reserved in

Cooper Industries counsels in favor of granting GenCorp’s

petition for certiorari and resolving the issue on the merits.

Il. The Sixth Circuit’s Decision Conflicts With

Relevant Decisions Of This Court.

A. The imposition of arranger liability under

CERCLA conflicts with this Court’s analysis in

Dole Food Co. v. Patrickson.

Section 107(a)(3) of CERCLA imposes liability on

persons “who . . . arranged for disposal . . . of hazardous

substances owned or possessed by such person.” 42 U.S.C.

§ 9607(a)(3) (emphasis added). The Sixth Circuit affirmed

the trial court’s decision to impose liability on GenCorp even

though GenCorp did not own or possess the hazardous waste

because GenCorp had some measure of “control over the

hazardous waste.” (App. 27a.) The lower courts’ decisions

are contrary to this Court’s analysis of similar statutory

language in Dole Food Co. v. Patrickson, 538 U.S. at 476-

77.

In Dole Food, this Court addressed whether Israel’s

“considerable control” over two corporations made those

corporations instrumentalities of Israel under the Foreign

Sovereign Immunities Act (“FSIA”). Jd. at 477. The FSIA

defines “instrumentality” to be “any entity . . . a majority of

whose shares or other ownership interest is owned by a

foreign state.” 28 U.S.C. § 1603(b)(2). Israel did not own

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the corporations, but two defendants claimed that Israel’s

“considerable control” over the companies’ operations should

fulfill the statute’s ownership requirement. Dole Food, 538

U.S. at 477.

The Court explained that control and ownership are

“distinct concepts,” and held that “the terms of [the FSIA] are

explicit and straightforward . . . ownership . . . not control,

is the benchmark of instrumentality status.” /d. at 477

(emphasis added).

Section 107(a)(3) plainly and unambiguously requires

ownership or possession of the hazardous waste to impose

liability on a defendant. 42 U.S.C. § 9607(a)(3). Courts that

have imposed arranger liability based on control, rather than

the statutorily required possession or ownership, have done so

based on the theory that “requiring proof of personal

ownership or actual physical possession of hazardous

substances . . . would be inconsistent with the broad remedial

purposes of CERCLA.” (App. 26a); United States v.

Northeastern Pharm. & Chem. Co., 810 F.2d 726, 743 (8th

Cir. 1986). See also United States v. Shell Oil Co. , 294 F.3d

1045, 1056, 1058 (9th Cir. 2002). But such policy

considerations cannot trump the plain language of a statute.

Brogan v. United States, 522 U.S. 398, 408 (1998). See also

Good Samaritan Hosp. v. Shalala, 508 U.S. 402, 409 (1993)

(“The starting point in interpreting a statute is its language. ”).

Accordingly, the Sixth Circuit’s decision to import a control-

based standard into a statute that requires ownership or

possession conflicts with this Court’s analysis in Dole Food.

‘

B. The Sixth Circuit’s decision nullifies the CERCLA

liability limits this Court established in United

States v. Bestfoods.

The analysis for imposing arranger liability under section

107(a)(3) is analogous to that for imposing “operator liability”

under section 107(a)(2). In United States v. Bestfoods, 524

U.S. 51 (1998), this Court applied the plain language of the

statute to limit direct operator liability. The courts of appeals

have subsequently applied the reasoning in Bestfoods to limit

arranger liability under section 107(a)(3) to parties who are

“actively involved in the arrangements for disposal.” Carter-

Jones Lumber Co. v. Dixie Distrib. Co., 166 F.3d 840, 846-

47 (6th Cir. 1999); see also Raytheon Constructors, Inc. v.

Asarco, 368 F.3d 1214, 1220 (10th Cir. 2003). The decision

below effectively nullifies the limits on CERCLA liability

recognized in Bestfoods, because it imposes liability on a

party that had only a generalized intent to purchase a product

from a supplier that would necessarily generate a hazardous

waste stream while making the product, not because of any

actual involvement in arranging for disposal of the waste.

In Bestfoods, the Court rejected the trial court’s

“participation and control” standard for imposing direct

liability. See Bestfoods, 524 U.S. at 67-69. Rather, the

Bestfoods Court held that direct liability under CERCLA may

attach only if the parent company actually operates the

polluting facility, not merely because the parent has the ability

to control, or even actually controls, the subsidiary. /d. at

64.

When applied to claims of arranger liability under section

107(a)(3), the Court’s Bestfoods analysis indicates that

knowledge of disposal by others, and even control or

influence over disposal decisions by others, does not satisfy

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the statutory requirement for arranger liability. Instead,

Bestfoods requires that a party be actively involved in

arranging for disposal.

The Sixth Circuit’s decision below to impose liability

based solely on GenCorp’s generalized intent that waste

would be disposed of thus conflicts with Bestfoods. The

decision would permit a parent corporation that is shielded

from CERCLA liability by Bestfoods to be liable as an

arranger, permitting an end run around the Bestfoods liability

limits. Indeed, if the panel’s analysis is correct, then the

parent company in Bestfoods would have to be liable as an

arranger based on its knowledge of and involvement in its

subsidiary’s waste disposal. In every case where Bestfoods

precludes CERCLA liability, liability could nevertheless be

imposed under the panel’s analysis. Without the limits of

Bestfoods, virtually every customer that purchases significant

quantities of products from a manufacturer that has to

generate and dispose of hazardous waste ‘v ill face potential

liability for cleanup costs the supplier later incurs. This Court

should grant certiorari and address these important issues of

federal environmental law.

CONCLUSION

The petition for a writ of certiorari should be granted or, in

the alternative, the Court should grant the writ of certiorari,

vacate the Sixth Circuit’s decision, and remand the case to the

Sixth Circuit to address the effect of the Court’s decision in

Cooper Industries.

June 27, 2005 Respectfully submitted,

ROBERT J. JONKER*®

JOHN V. BYL

DEAN F. PACIFIC

Warner Norcross & Judd LLP

900 Fifth Third Center

111 Lyon Street, N.W.

Grand Rapids, MI 49503

(616) 752-2000

Counsel for Petitioner

*counsel of record

MICHAEL HARDY

KEELY J. O’BRYAN

Thompson Hine LLP

3900 Key Center

127 Public Square

Cleveland, OH 44114-1291]

(216) 566-5500

Counsel for Petitioner

4) WLR A eA &

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Nos. 03-3019/3211

[Filed March 29, 2005]

Defendant-Appellee/Cross-Appellant.

GENCORP, INC., )

Plaintiff-Appellant/Cross-Appellee, )

)

v. )

)

OLIN CORPORATION, )

)

BEFORE: MARTIN and SUTTON, Circuit Judges; and

WILLIAMS,’ District Judge.

ORDER

The court having received a petition for rehearing en

banc, and the petition having been circulated not only to the

* Hon. Glen M. Williams, Senior United States District Judge

for the Western District of Virginia, sitting by designation.

original panel members but also to all other active’ judges of

this court, and no judge of this court having requested a vote

on the suggestion for rehearing en banc, the petition for

rehearing has been referred to the original panel.

The panel has further reviewed the petition for rehearing

and concludes that the issues raised in the petition were fully

considered upon the original submission and decision of the

cases. Accordingly, the petition is denied.

ENTERED BY ORDER OF THE COURT

/s/

Leonard Green, Clerk

Judge Moore recused herself from participation in this

. ruling.

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Nos. 03-3019/3211

[Filed November 22, 2004]

GENCORP, INC.,

Plaintiff-Appellant/Cross-Appellee,

OLIN CORPORATION,

Defendant-A ppellee/Cross-Appellant.

Nee ee eee ae ee

BEFORE: MARTIN and SUTTON, Circuit Judges; and 4

WILLIAMS,’ District Judge. :

Appeal from the United States District Court

for the Northern District of Ohio at Cleveland

No. 93-02269

David S. Perelman, Magistrate Judge

* Hon. Glen M. Williams, Senior United States District Judge

for the Western District of Virginia, sitting by designation.

OPINION

SUTTON, Circuit Judge. In the 1960s, GenCorp, Inc. and

Olin Corporation began a business relationship that defies

easy categorization. By agreement of the parties, Olin built a

manufacturing plant with GenCorp’s assistance that for more

than a decade supplied GenCorp with a chemical used to

produce urethane foam. The manufacturing plant also

produced hazardous waste. Plant operators hauled the waste

to an offsite landfill, which eventually landed on the EPA’s

National Priority List of hazardous waste facilities and which

generated clean-up costs of more than $ 65 million.

Olin sued GenCorp under the Comprehensive

Environmental Response, Compensation and Liability Act

(CERCLA), 42 U.S.C. § 9601 et seqg., to recover a

percentage of the clean-up costs and to obtain a declaratory

judgment that GenCorp bore responsibility for that same

percentage of future costs. The district court granted the

relief, concluding that GenCorp was a “[c]overed person{]”

under § 9607(a) of the statute because it “arranged for

disposal . . . of hazardous substances” and concluding that it

was responsible for 70% of the clean-up costs at the landfill.

We agree with that conclusion and reject each of the parties’

other challenges to the district court’s decision except one:

Olin’s claim that a declaratory judgment should have been

entered. Accordingly, we affirm the district court’s judgment

as to GenCorp’s contribution liability and the apportionment

of liability between the parties but remand the case to

consider Olin’s request for a declaratory judgment.

During the 1960s, GenCorp (once known as “General

Tire and Rubber Company”) manufactured urethane foam—a

material used in carpets and mattresses, among other

products—at a plant (the “PVC Plant”) located in Ashtabula,

Ohio. Among other ingredients, the production of the foam

required toluene di-isocyanate (“TDI”), which is a “critical”

chemical ingredient in the process. JA 1319. To minimize the

financial risks of urethane production, GenCorp sought a

reliable and cost-effective source of TDI.

Olin Corporation claimed to have a supply answer ta-this

demand. Having developed a cost-effective process for

producing TDI, which involved highly toxic chemicals,

including phosgene or “mustard” gas, it began discussions

with GenCorp about building and operating a plant for

manufacturing the chemical (the “TDI Plant”). On June 21,

1962, after lengthy negotiations, the parties concluded a final

agreement (the “1962 Agreement”).

As the contractual cornerstone of the 1962 Agreement,

Olin agreed to “erect or cause to be erected, at its sole cost

and expense” the TDI Plant. JA 660. The parties agreed to

locate the plant on land owned by GenCorp, which was

adjacent to GenCorp’s own PVC Plant (where the TDI from

Olin’s new plant would eventually be converted into urethane

foam), and agreed that Olin would pay GenCorp $10 a year

for the lease of the land. Olin also agreed to build a second

plant at its own expense to produce toluene di-amine or

“TDA”—a chemical needed in the TDI manufacturing

process—and to supply enough TDA to meet the TDI Plant's

requirements.

In return, GenCorp agreed to purchase 50% of the TDI

Plant’s output at cost, which included variable costs, fixed

costs for the TDI Plant and “related facilities,” and a “charge-

in” for the TDA supplied by Olin to the plant. JA 671. Both

parties remained free to sell TDI to third parties without

sharing any profits from these sales. GenCorp also agreed to

purchase hydrochloric acid—an additional byproduct of the

TDI manufacturing process—from Olin and to supply steam

from its PVC Plant to meet the TDI Plant requirements.

Olin initially retained title to the TDI Plant under the 1962

Agreement and “owned and operated” the plant. JA 660, 663.

The parties agreed that at some later date Olin would “sell,

convey and transfer” title to the TDI Plant to GenCorp at

Olin’s then-current book value for the plant. JA 678-79.

GenCorp agreed to advance Olin up to one half of its total

capital costs for the plant as “earnest money [] towards its

obligation to purchase and acquire the TDI Plant.” JA 680.

That amount, it was agreed, would be “credited by Olin

against the ultimate sale and purchase price” due at the future

sale. Id. The parties affirmed in a separate agreement that

GenCorp had a “definite obligation to take title” to the TDI

Plant and had committed itself to this purchase through a

“substantial deposit against the ultimate purchase price.” JA

699. In accordance with these future plans for ownership of

the plant, the engineering specifications for the plant were

“subject to the approval” of both GenCorp and Olin, JA 662,

and Olin agreed not to make any capital expenditures without

GenCorp’s approval after the plant’s start-up. Olin also

agreed to insure the TDI Plant for “all risk of loss, liability

and damage to property and facilities.” JA 679.

To the ends of “oversee[ing] the construction, operation

and management of the TDI plant,” the contract created a

four-member committee (the “TDI Committee”) composed of

two representatives of GenCorp and two representatives of

Olin. In consultation with the committee, Olin agreed to select

a Plant Manager and other staff “to supervise the day-to-day

operation of the plant.” JA 663. Olin also agreed to appoint

a Committee Manager, who was the sole party authorized to

instruct the Plant Manager on behalf of the Committee. The

1962 Agreement contained no guidelines for committee

governance--i.e., specifying whether decisionmaking would

occur by consensus or by majority vote, or how a deadlock

would be resolved—but rather allowed the Committee to

devise its own management rules (which apparently were

never created).

Although not detailed in the agreement, GenCorp supplied

all of the TDI Plant’s hourly workers, keeping them on its

own payroll and negotiating a collective bargaining agreement

for them. Olin, on the other hand, supplied and paid many of

the plant’s salaried, supervisory employees, including the

Plant Manager and other departmental heads, although

GenCorp filled some management positions with its own

employees. All employees ultimately reported to the Olin-

appointed Plant Manager.

The 1962 Agreement did not address hazardous waste

disposal. The TDI manufacturing process generated at least

two byproducts that amount to “hazardous waste” for

CERCLA purposes: a tar-like residue waste and spent

vacuum-pump oils, both of which contain the toxic chemicals

TDI, TDA and chlorobenzene. Early plant designs

contemplated generation and disposal of the TDI residue. The

TDI Plant engineer told Phillip Sayre, a GenCorp employee

who reviewed the design specifications, that the TDI chemical

residue would be “drum[med] [] off and bur[ied].” JA 1323.

Despite Sayre’s concerns about the dangers of this plan,

which he conveyed to his supervisors at GenCorp, GenCorp

approved the plant designs and capital appropriation requests

by Olin. Jd.

After approving the plant designs, the TDI Committee

discussed TDI residue disposal and the GenCorp committee

members researched and recommended offsite locations for

disposal sites in view of their greater familiarity with the

Ashtabula area. D. Ct. Op. of July 14, 1999, at 40

{hereinafter D. Ct. Op.]. TDI employees disposed of some

waste at the plant site itself, which the parties agree caused a

“release” into the waterway known as “Fields Brook” that ran

between the TDI and PVC Plants on GenCorp’s land (a site

that is the subject of this litigation but not this appeal). Jd.

Benjamin Brenkus, a hauler apparently hired by the Olin Plant

Manager, carried other waste offsite. From the beginning of

plant operations in 1964 through February 1976, Brenkus

hauled waste to the Big D site, all of which the TDI Plant

hourly employees had placed in metal drums and loaded onto

Brenkus’ truck for disposal. D. Ct. Op. at 41. Payment for

Brenkus’ hauling efforts required completion of a service

requisition form, which on occasion GenCorp employees in

intermediate management positions signed. /d.

Over the years of the TDI Plant’s operation, the

Committee addressed the issue of waste disposal in a variety

of ways. TDI residue disposal (i.e., the hauling costs)

appeared as a line item on Olin’s budget for the TDI Plant,

which the Committee approved, and which GenCorp paid for

as part of the variable costs incorporated into the TDI price.

The Committee approved (apparently without dissension)

capital expenditures aimed at reducing the volume of waste

generated by the plant. D. Ct. Op. at 41. GenCorp Committee

member Robert Laundrie visited the Big D site more than

once, and he issued his criticisms of disposal methods to

Olin’s Plant Manager, id. at 40-41 (although the record

contains no evidence as to whether Olin acted upon these

concerns). And GenCorp and Olin jointly funded “Golden

TDI” research, a program aimed (fruitlessly, it turns out) at

finding commercial uses for the TDI residue in order to

reduce the amount of waste shipped offsite. /d. at 41.

Despite the title-transfer provision of the 1962 Agreement,

GenCorp never purchased the TDI Plant from Olin. Instead,

on September 27, 1971, the parties signed a new agreement

(the “1971 Agreement”) that terminated the 1962 Agreement

effective October 1, 1973. In the new agreement GenCorp

relinquished its right to purchase the TDI Plant in exchange

for a $ 1.65 million payment from Olin as reimbursement for

its earlier “earnest money.” JA 929. GenCorp also extended

its lease of the land on which the plant was located for three

additional twenty-year terms. In a separate agreement signed

on the same day, the parties agreed that GenCorp would

purchase “not less than 80%” of its yearly TDI requirements

at a price determined under a new formula supplied by the

agreement (essentially the lesser of market price or cost). JA

931. At the same time they signed these new agreements, the

parties unwound earlier employment arrangements by

transferring the GenCorp employees working at the TDI Plant

to Olin’s payroll and by dissolving the TDI Committee. D.

Ct. Op. at 15.

In the late 1970s, Olin began investigating toxic

contamination at the Big D site, identifying the property as an

“area of concern requiring further study.” D. Ct. Op. at 16.

In May of 1980, the Ohio EPA requested information from

Olin about disposal of waste from the plant. And in June of

1981, the matter came before the federal EPA, after Olin filed

a notification required by CERCLA that it had disposed of

10a

28,000 tons of waste at the Big D site. The TDI Plant ceased

operations later that year, and Olin began dismantling the

facilities as well as performing clean up and decontamination

of the plant site.

At its own initiative, but in consultation with state

environmental officials, Olin performed an erosion-control

project at the Big D site in 1982. The project increased the

slope gradient of the landfill through the addition of topsoil

and clay in order to redirect storm water run-off, at a cost of

over $780,000, D. Ct. Op. at 18—none of which Olin seeks

to recover from GenCorp. Olin informed the state and federal

environmental agencies about its efforts, claiming that “the

[Big D site] is not a significant threat to human health or the

environment and no further corrective action is required or

warranted.” JA 1110.

The federal EPA disagreed with this assessment. On

September 8, 1983, after a notice-and-comment period, it

placed both the Big D and Fields Brook sites on the National

Priority List for clean-up. In 1985, the federal agency notified

Olin that it was a “potential responsible party” for the site and

requested that Olin provide information concerning the site

and conduct a “remedial investigation and feasibility study”

for the landfill. /d.; D. Ct. Op. at 19. Negotiations for a

remedial action plan for Big D took place during 1989 and

1990. When Olin refused to yield on certain points in the

negotiations, the federal EPA issued a_ unilateral

administrative order on March 27, 1990, under CERCLA

§ 106, 42 U.S.C. § 9606, requiring Olin to implement the

agency’s remedial action plan for the site. D. Ct. Op. at 20-

21. Olin formed a “Big D Site team” and in late 1992 began

implementing the remedial action plan. /d. at 21-23.

lla

Anticipating that Olin would seek contribution for these

remediation costs, GenCorp filed a declaratory judgment

action against Olin on October 25, 1993, in the United States

District Court for the Northern District of Ohio. GenCorp

sought a declaration that it was not liable under CERCLA for

the clean-up costs at Big D and Fields Brook, among other

sites. Olin counterclaimed, seeking its own declaration either

that GenCorp was jointly and severally liable with Olin for

the response costs or owed Olin contribution for at least one

half of the costs. The parties voluntarily dismissed GenCorp’s

claim in 1995, but continued litigating Olin’s counterclaim.

GenCorp eventually amended its response to Olin’s

counterclaim, claiming “breach of contract to insure” the TDI

plant, among other claims. JA 161.

By consent of the parties, the district court transferred the

case to Magistrate Judge David Perelman for trial. The court —

initially denied both parties’ motions for summary judgment,

determining that genuine issues of fact precluded any pre-trial

disposition of the claims. Before trial, however, the district

court reconsidered its decision in light of intervening case law

and entered summary judgment against Olin on one of its

counterclaims. It determined that Olin could not maintain its

claim for joint and several liability under CERCLA § 107

because it was a potentially liable party itself and thus could

seek only contribution from GenCorp. See D. Ct. Mem. &

Order of Feb. 23, 1999, at JA 387; Centerior Serv. Co. v.

Acme Scrap Iron & Metal Corp., 153 F.3d 344, 356 (6th Cir.

1998).

With respect to Olin’s remaining contribution claim under

§ 113(f), the district court conducted trial proceedings in three

phases. Phase I dealt with the initial question of liability;

Rae SE Bchons Din pth nee Sans es Bag Ki re Se MAP ATL Rit Joe

Fs a See Serie stioe Halse RS 2 ¢ ee eae

12a

Phase II allocated liability between the parties on a percentage

basis; and Phase III assigned a dollar amount to these

percentages. After a bench trial addressing the Phase I and II

issues, the district court determined that GenCorp was liable

as an “arranger” of hazardous waste disposal under CERCLA

either by virtue of its affiliation with Olin in an “association”

or “commercial entity” (but not a joint venture)--such that the

two companies constituted a single “person” under 42 U.S.C.

§ 9601—or by virtue of its activities carried out in its own

name. D. Ct. Op. at 47. The court also determined that

GenCorp was liable as an “owner” and an “operator” of the

land on which the plant was built. /d. at 42-43. In addressing

the parties’ respective shares of liability, the district court

concluded that GenCorp should bear 30% of the costs of Big

D (and Olin 70%) and GenCorp should bear 40% of the costs

of the Fields Brook site (and Olin 60%). D. Ct. Op. at 60.

During Phase III, the district court determined that these

liability shares translated into costs to GenCorp of

approximately $19 million (plus more than $9 million in

prejudgment interest) and entered a judgment in that amount.

D. Ct. Op. of May 10, 2002 at 77-78; Judgment Order at JA

597.

The district court did not finally resolve GenCorp’s

breach-of-contract claims based on Olin’s alleged promise to

insure. It tabled the ultimate resolution of the claim in light of

a pending dispute in the Southern District of New York

between Olin and its insurers over the insurers’ responsibility

to pay for the hazardous waste clean-up costs. The court

determined that Olin had satisfied its contractual obligation to

GenCorp, and if Olin obtained any recovery from its insurers

in the New York proceeding, that recovery would “inure to

the benefit of . . . [GenCorp]” as well. D. Ct. Op. of May

10, 2002, at 77. Because that parallel proceeding had not

concluded, the district court “held in abeyance a

13a

determination as to what share of any recovery [in the New

York litigation] would be GenCorp’s,” but entered a final

judgment in the remainder of the suit under Federal Rule of

Civil Procedure 54(b). Id.

The appeal and cross-appeal from the district court’s

judgment raise a host of questions: (1) does this Court have

jurisdiction over the suit? (2) does the statute of limitations

bar Olin’s claim? (3) is GenCorp liable for response costs

related to the Big D site as an “arranger” for the disposal of

hazardous waste generated by the TDI Plant? (4) did the

district court abuse its discretion in determining each parties’

proportionate responsibility for the clean-up costs? (5) did the

district court err in awarding prejudgment interest? and (6)

should the district court have granted Olin’s request for

declaratory relief regarding future clean-up costs?

il.

As a matter of first priority, the Court has jurisdiction

over this appeal. Under Rule 54(b) of the Federal Rules of

Civil Procedure, a district court may, “[w]hen more than one

claim for relief is presented in an action, . . . direct the entry

of a final judgment as to one or more but fewer than all of the

claims,” provided that the court makes “an express

determination that there is no just reason for delay and upon

express direction for the entry of judgment.” Compliance with

the rule permits immediate appellate review of a district

court’s judgment even though the lawsuit contains unresolved

claims. See Gen. Acquisition, Inc. v. GenCorp, Inc., 23 F.3d

1022, 1026 (6th Cir. 1994).

To comply with the rule, a district court initially must

expressly “direct the entry of final judgment as to one or

more but fewer than all of the claims” in the case. /d. It then

14a

must determine whether “the needs of the parties” outweigh

the efficiency of having one appeal at the conclusion of the

case in its entirety, and it must spell out its reasons for

concluding that prompt review is preferable. /d. at 1027. On

appeal, we review compliance with the first requirement de

novo, id. at 1027, and compliance with the second

requirement for an abuse of discretion, id.; see also Curtiss-

Wright Corp. v. Gen. Elec. Corp., 446 U.S. 1, 10, 100S. Ct.

1460, 64 L. Ed. 2d 1 (1980).

As to the first requirement, this case involves more than

one claim and the district court permissibly entered final

judgment as to all but one of the claims—GenCorp’s contract

claim that Olin failed to obtain insurance for the TDI Plant.

A “claim” under Rule 54(b) “denotes the aggregate of

operative facts which give rise to a right enforceable in the

- courts” even if the party has raised different theories of relief.

Gen. Acquisition, 23 F.3d at 1028 (quotation marks omitted).

In this case, the district court had before it Olin’s contribution

claim as well as GenCorp’s breach-of-contract and other

claims. Olin’s contribution claim arises under CERCLA while

GenCorp’s contract claim arises under state law governing

contractual rights and fiduciary responsibilities. The claims

also do not share a single “aggregate of operative facts.”

Olin’s CERCLA claim arises from the disposal of hazardous

waste at the Big D landfill, while GenCorp’s claim arises out

of Olin’s alleged duty to insure for risks related to the TDI

Plant. Nor does the fact that Olin’s recovery on its claim

could be set off in full or in part by GenCorp’s recovery on

its cfaim impede the separability of these claims for appeal

purposes. See Curtiss-Wright, 446 U.S. 1, 100 S. Ct. 1460,

64 L. Ed. 2d 1 (reversing court-of-appeals determination that

certification of claim was improper because pending

counterclaim could ultimately provide set-off to liability).

Lastly, the district court’s resolution of the CERCLA claim

15a

satisfies the finality requirement of Rule 54(b) and 28 U.S.C.

§ 1291, as the court provided an “ultimate disposition” of the

claim and addressed all forms of relief requested by Olin.

Compare Liberty Mut. Ins. Co. v. Wetzel, 424 U.S. 737, 96

S. Ct. 1202, 47 L. Ed. 2d 435 (1976) (concluding that district

court’s finding of liability, which did not address any of the

relief requested by the plaintiff, did not satisfy Rule 54(b));

Gen. Acquisition, 23 F.3d at 1027 (determining that district

court’s judgment resolving damages issue but not liability was

not “final”).

As to the second requirement, the district court did not

~ abuse its discretion in concluding that it would be efficient

presently to dispose of all of the claims, save for GenCorp’s

insurance-contract claim. In arguing to the contrary, GenCorp

contends that the district court “failed to make the required

findings or to balance the. . . factors that should be

considered.” GenCorp’s Mot. to Dismiss at 2. In fact,

however, the district court did explain why there was no “just

reason for delay.” D. Ct. Op. of Nov. 21, 2002, at 10. And

its explanations for certifying the partial judgment for appeal

in this decade-long suit made ample sense given that the only

question remaining on GenCorp’s claim was one that would

be resolved by another court and given the likelihood that

GenCorp would appeal its CERCLA liability (in view of its

possible preclusive effect) even if the amount owed was

wholly offset by an insurance recovery.

Il.

GenCorp next argues that Olin failed to comply with the

applicable statute of limitations in bringing its CERCLA

contribution claim. We disagree.

16a

As an initial point of reference, the parties share common

ground that § 113(g)(2) of CERCLA, 42 U.S.C.

§ 9613(g)(2), applies to this action. They agree with the

district court that § 113(g)(2)—not § 113(g)(3) (entitled

“Contribution”)—applies to this case because Olin incurred

clean-up costs at Big D not as the result of a court judgment

or settlement with the government but as the result of a

unilateral administrative order issued by the EPA under

§ 9606. For this reason, the district court concluded, Olin’s

counterclaim constituted “an initial action for recovery of []

costs” under § 113(g)(2). See D. Ct. Op. at 25-27; Sun Co.

v. Browning-Ferris, Inc., 124 F.3d 1187 (10th Cir. 1997)

(deciding that where a party bringing a contribution suit

incurs clean-up costs by means other than a judgment or

settlement, e.g., a unilateral administrative order, that suit is

the “initial action” for recovery of costs under § 113(g)(2));

see also Geraghty & Miller, Inc. v. Conoco Inc., 234 F.3d

917, 924-25 (Sth Cir. 2000) (adopting rationale of Sun);

Centerior, 153 F.3d at 355 (agreeing in dicta with Sun).

Having agreed that § 113(g)(2) governs this case, the

parties dispute which portion of § 113(g)(2) applies. Section

113(g)(2) contains two different time limitations, and

provides:

An initial action for recovery of [] costs . . . must be

commenced-- (A) for a removal action, within 3 years

after completion of the removal action . . .; and

(B) for a remedial action, within 6 years after

initiation of physical on-site construction of the

remedial action, except that, if the remedial action is

initiated within 3 years after the completion of the

removal action, costs incurred in the removal action

may be recovered in the cost recovery action.

17a

42 U.S.C. § 9613(g)(2). In GenCorp’s view, the actions

taken by Olin in the early 1980s at the Big D site—changing

the slope of the land and adding topsoil at a cost of

$780,000—triggered the “initiation” of “remedial action” for

the statute of limitations, which means that the time for

bringing a remedial-recovery lawsuit has long since passed.

In Olin’s view, the limitations period did not begin running in

the 1980s (1) because these earlier efforts constituted

“removal” but not “remedial” actions and (2) because the

work done in the early 1980s was “separate and distinct from,

and could not start the limitations period for, the work done

in the 1990s in response to the EPA’s orders” even if the

earlier work was “remedial” in nature. Olin Br. at 53. (Olin

also argues that GenCorp waived its statute-of-limitations

defense, but we need not reach that question.)

In resolving this issue, the district court looked to the

National Contingency Plan regulations defining removal

actions, and determined that Olin’s “work performed in the

early 1980s falls within the parameters of removal actions.”

D. Ct. Op. at 28. The district court noted that the short

duration of the project and its relatively low cost indicated

that the action constituted removal, not remediation. Id. The

work done in the 1980s, the court added, did not meet the test

for remedial actions because it took place before the

“remedial investigation and feasibility study” and before the

EPA’s unilateral administrative order implementing the final

plan for the site. Id. at 29.

We agree with this analysis—with one elaboration. The

salient point here is that CERCLA’s definition of “remedial

action” imposes a separate requirement on the term:

“remedial action” encompasses only “those actions consistent

with [the] permanent remedy taken . . . to prevent or

minimize the release of hazardous substances,” and unless

18a

“remedial action” meeting this requirement has begun, the

statute-of-limitations-triggering event cannot occur. 42 U.S.C.

§ 9601(24) (emphasis added). Critically, Olin’s earlier actions

at the landfill were not consistent with the “permanent

remedy” for the site—namely, the final remedial plan

implemented by the federal EPA. Indeed, in adding topsoil

and clay covers to prevent soil erosion and in changing the

slope gradient of the site, Olin’s interim measure was

inconsistent with the federal EPA’s remedial p' un. The final

plan called for Olin to dismantle its previous work at the site

by removing the clay cap, excavating the site and removing

and incinerating waste and contaminated soil from the site.

D. Ct. Op. at 29. For this reason, “the prior work was not

‘permanent’ as would be required for a remedial action, nor

was it consistent with the remedy mandated by the EPA in the

1990 [unilateral order].” Jd.

In addressing this issue, the Ninth Circuit has concluded

that “the initiation of physical on-site construction of the

remedial action” under 42 U.S.C. § 9601(24) and

§ 9613(g)(2) “can only occur after the final remediation plan

is adopted” and that action taken before the plan adoption

cannot constitute “remedial action” for statute-of-limitations

purposes. California ex rel. Cal. Dep’t of Toxic Substances

Control v. Neville Chem. Co., 358 F.3d 661, 667 (9th Cir.

2004) (emphasis added); see also 42 U.S.C. § 9617 (outlining

procedures for proposing and adopting a final remedial action

plan). While other circuits have rejected this bright-line rule,

they adhere to the principle that for a “remedial action” to

begin, the work must be “consistent with [the] permanent

remedy.” See Geraghty & Miller, 234 F.3d 917; United

States v. Navistar Int’l Transp. Corp., 152 F.3d 702 (7th Cir.

1998). We need not decide today whether to adopt the Ninth

Circuit’s bright-line rule because it would not affect the

outcome of this case. In this instance, Olin’s work in the

Rey eed Be re Ba

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19a

1980s at Big D was not consistent with the EPA-ordered final

remedial plan, irrespective of the timing of the work, and

GenCorp offers no argument otherwise. Under these

circumstances, Olin’s actions in the 1980s did not trigger the

statute of limitations for recovery of its costs related to its

“remedial” actions over a decade later.

IV.

Turning to Olin’s contribution claim, the parties agree that

several preconditions for CERCLA liability have been

established: (1) the Big D site is a “facility” under 42 U.S.C.

§ 9601(9); (2) a “release” of “hazardous substances” (the TDI

residue) occurred; and (3) the release caused Olin to incur

“necessary costs of response,” see 42 U.S.C. § 9607(a). See

Stip. of Parties at JA 121; Centerior, 153 F.3d at 347-48. The

only element of CERCLA liability in dispute is whether

GenCorp falls into one of four categories of “potentially

responsible parties” described in CERCLA § 107(a)(1)-(4).

Invoking § 107(a)(3) of CERCLA, the district court

concluded that GenCorp was an “arranger” of hazardous

waste disposal: a “person who by contract, agreement, Or

otherwise arranged for disposal or treatment, or arranged with

a transporter for transport for disposal or treatment, of

hazardous substances owned or possessed by such person, by

any other party or entity, at any facility or incineration vessel

owned or operated by another party or entity and containing

such hazardous substances.” 42 U.S.C. § 9607(a)(3). In

reaching this conclusion, the district court embraced two

alternative theories of “arranger” liability: (1) that the

relationship Olin formed with GenCorp created a single

“person” under 42 U.S.C. § 9601(21)—as an “association”

or a “commercial entity” —such that Olin’s actions regarding

hazardous waste disposal could be attributed to GenCorp; and

20a

(2) GenCorp “arranged for disposal” of hazardous waste in its

own right as a separate er liable “person.” D. Ct.

Op. at 30, 47.

GenCorp challenges each of these conclusions on appeal.

Because we conclude that GenCorp “arranged for” hazardous

waste disposal in its own capacity, we need not address the

separate question whether the two companies formed an

“association” or “commercial entity” under 42 U.S.C.

§ 9601(21).

CERCLA imposes liability on any person who

“arrange[s]” “by contract, agreement or otherwise” for the

“disposal or treatment . . . [or] for transport for disposal or

treatment” of “hazardous substances” that is “owned or

possessed” by that person. 42 U.S.C. § 9607(a)(3). While the

legislation does not define what it means to “arrange” for

disposal of waste, traditional definitions of the word, its

statutory context and case law supply ample clues. To

“arrange” for something means to “plan or prepare” for it,

though not necessarily to implement the plan. Webster’s II

New College Dictionary 62 (2001). Making such preparations,

moreover, does not require a formal disposal agreement, as

the statute provides that a person may arrange for hazardous

waste disposal “by contract, agreement or otherwise.” 42

U.S.C. § 9607(a)(3) (emphasis added). Neither must the

arrangements for waste disposal stem from a discrete event;

they may arise from a broader “transaction.” See United

States v. Cello-Foil, Prods., Inc., 100 F.3d 1227, 1231 (6th

Cir. 1996).

Circuit precedent also makes clear that one may not

become an arranger through inadvertence. The party must

2la

have some intent to make preparations for the disposal of

hazardous waste, though that intent goes to the matter of

disposing waste generally, not to disposing of it in a particular

manner or at a particular location. See id. at 1231-32

(“[O]nce it has been demonstrated that a party possessed the

requisite intent to be an arranger, the party cannot escape

liability by claiming that it had no intent to have the waste

disposed in a particular manner or at a particular site.”);

United States v. Aceto Agricultural Chems. Corp., 872 F.2d

1373, 1380 (8th Cir. 1989); see also CPC Int'l, Inc. v.

Aerojet-Gen. Corp., 759 F. Supp. 1269, 1279 (W.D. Mich.

1991); cf. United States v. Township of Brighton, 153 F.3d

307, 315 (6th Cir. 1998) (noting that it is “no defense” to.

operator liability that the “actor [was not] responsible for a

particular hazard”). The requisite intent may be “inferred

from the totality of the circumstances,” Cello-Foil, 100 F.3d

at 1231, and need not depend on the parties’ own

characterizations of their transactions, Aceto, 872 F.3d at

1381—all of which makes this inquiry highly fact-driven,

Cello-Foil, 100 F.3d at 1231.

Measured by these requirements, the district court

correctly concluded that GenCorp arranged for the disposal of

hazardous waste from the TDI Plant. GenCorp and Olin

entered into the 1962 Agreement to build a manufacturing

plant that would convert TDA (which Olin would produce)

into TDI (which GenCorp would purchase and use in its own

production of urethane foam). The generation of toxic waste

was a natural byproduct of this manufacturing process. And

even if GenCorp somehow did not realize that this process

would generate hazardous waste when it entered into the

contract (because Olin held the patent for the process), it

necessarily appreciated this reality when it approved the plant

design specifications and capital expenditure requests. The

construction plans specifically provided that the hazardous

a po et chs ind ont vane Be

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22a

waste generated by the TDI Plant would be placed in drums

and buried at an offsite location.

Other facts found by the district court show that the

parties’ business arrangements for the TDI Plant encompassed

plans or preparations for waste disposal: (1) the TDI

Committee (whose membership included equal numbers of

representatives from Olin and GenCorp) discussed TDI

residue disposal; (2) GenCorp Committee members in

particular researched and recommended waste disposal

locations; (3) the TDI Committee approved methods to reduce

the volume of waste sent offsite (i.e., to the Big D landfill)

through capital improvements to the plant; and (4) Olin and

GenCorp both funded research aimed at further reducing the

volume of residue waste that needed to be disposed offsite.

See D. Ct. Op. at 45-46. Considered together, these facts

amply show that GenCorp “intended to” (and actually did)

“enter into a transaction that included an ‘arrangement for’

the disposal of hazardous substances.” Cello-Foil, 100 F.3d

at 1231; accord Carter-Jones Lumber Co. v. Dixie

Distributing Co., 166 F.3d 840, 845 (6th Cir. 1999).

GenCorp’s arguments to the contrary amount to variations

on two themes: (1) GenCorp did not actively participate in

arranging for the waste disposal at Big D and (2) GenCorp did

not “own or possess” the hazardous waste. Neither argument

is convincing.

In advancing its first argument, GenCorp leans heavily on

United States v. Bestfoods, 524 U.S. 51, 118 S. Ct. 1876,

141 L. Ed. 2d 43 (1998), and this Court’s interpretation of

the decision in Carter-Jones, 166 F.3d 840, and in Township

of Brighton, 153 F.3d 307. To GenCorp’s way of thinking,

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23a

Bestfoods, Carter-Jones and Township of Brighton require a

party “to actually dispose of hazardous waste,” something

that GenCorp allegedly never did. GenCorp Br. at 24.

This trio of cases does not bear the weight that GenCorp

places on them. Bestfoods dealt with a parent company’s

potential liability under 42 U.S.C. § 9607(a)(2) as an

“operator” of a polluting facility owned and operated by its

subsidiary. 524 U.S. at 55. The Court rejected the proposition

that a parent corporation’s participation in and control over its

subsidiary’s operations “without more” sufficed for operator

liability. Jd. The Court instead held that for liability to attach

either the corporate veil must be pierced or the parent must

independently meet the test for operator liability through

actions in its own capacity, not its subsidiary’s. Id.

Carter-Jones took the logical next step of extending

Bestfoods to an individual corporate shareholder facing

potential arranger liability under CERCLA § 107(a)(3). 166

F.3d at 846-47. In doing so, it concluded that the district

court’s findings “satisf[ied] the Bestfoods requirement that an

officer be actively involved in the arrangements for disposal

before individual liability may be imposed.” Jd.

Township of Brighton applied the Bestfoods principle in

the context of a governmental entity’s potential liability as an

“operator” of a waste facility. It concluded that “we apply the

same plain-meaning standard articulated in Bestfoods to any

context, whether the defendant is acting in a corporate,

governmental, or any other capacity.” 153 F.3d at 314 n.7.

The central lessons of these cases are (1) that CERCLA

does not alter the corporate-law principle that, in the absence

of a valid reason for piercing the corporate veil, a parent

corporation is not liable for the acts of its subsidiaries, and

24a

(2) an alleged violator must independently satisfy the test for

CERCLA liability—whether for operator liability, as in

Bestfoods, or for arranger liability, as in Carter-Jones. The

cases, however, do not alter the basic principles for

ascertaining “arranger” liability. The references in these cases

to “active involvement” or “actual control” relate either to the

substantive standard for operator liability, Bestfoods, 524

U.S. at 66-67; Township of Brighton, 153 F.3d at 314, or

refer to the notion that an entity must itself be involved as an

“operator” or an “arranger,” Carter-Jones, 166 F.3d at 846-

47. Nowhere in these cases is there any suggestion that a

party must have been “actively involved” in arranging to

dispose of hazardous waste at a particular location and in a

particular manner. All of this means that even if Olin rather

than GenCorp specifically engaged Benjamin Brenkus’

hauling services to carry the hazardous waste to Big D, see

GenCorp Br. at 30-31, that fact does not insulate GenCorp

from liability for “arrang[ing] for” the disposal of hazardous

waste.

GenCorp’s second argument fares no better. In claiming

that it cannot be liable as an “arranger” unless it “owned or

possessed” the hazardous waste (the contaminated residue and

vacuum-pump oils), GenCorp points out that the district court

never found that it had title to or physically held the waste but

found only that it had a “nexus” to the waste. As an initial

matter, however, the company bears some responsibility for

this omission (if indeed it was an omission). GenCorp did not

squarely join this issue at the district court level, and it cannot

fairly criticize the district court for failing to address an issue

it never directly raised. See GenCorp Post-Trial Br. at JA

222-24 (arguing that disposal activities of hourly TDI Plant

employees on its payroll did not satisfy arranger liability

requirements); PACAAR Inc. v. TeleScan Technologies,

L.L.C., 319 F.3d 243, 258 (6th Cir. 2003).

25a

The legal argument, at any rate, is mistaken. Section

107(a)(3) of CERCLA, it is true, imposes liability on “any

person who . . . arranged for disposal . . . of hazardous

substances owned or possessed by such person.” 42 U.S.C.

§ 9607(a)(3) (emphasis added). But to say that the statute

requires ownership or possession of the waste does not

establish what evidence will satisfy the requirement or, more

particularly, whether constructive ownership or possession

will suffice.

When Congress enacted CERCLA in 1980, it did so

against a statutory and common-law backdrop that had long

dignified constructive ownership as a legitimate means by

which to establish criminal and other forms of liability for

individuals and entities that did not have title to or physically

possess certain items. See, é.8., United States v. Crippen, 459

F.2d 1387, 1388 (3d Cir. 1972) (“constructive”

possession— “dominion and control over the {[]

substance”—may satisfy the possession requirement in 21

U.S.C. § 841); United States v. Hutchinson, 488 F.2d 484,

488 (8th Cir. 1973) (possession in § 841 may be “actual or

constructive”); United States v. Poore, 594 F.2d 39, 43 (4th

Cir. 1979) (accepting constructive possession as satisfying 26

U.S.C. § 5861(d)’s possession requirement); State v. Wolery,

46 Ohio St. 2d 316, 348 N.E.2d 351, 360 (Ohio 1976) (“The

prevailing rule at common law and in most jurisdictions is that

actual physical possession is not a requisite of receiving

[stolen property]. Possession may be constructive.”)

(quotation marks omitted); People v. Mumford, 60 Mich.

‘App. 279, 230 N.W.2d 395, 396-97 (Mich. App. 1975)

(“possession” element in a drug offense “is to be construed in

its commonly understood sense and may encompass both

actual and constructive possession”); Duchac v. State, 505

S.W.2d 237, 240-41 (Tenn. 1973) (it “appears to be the

general rule throughout the United States” that “effective

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26a

control” over burglary tools satisfies the possession

requirement for that offense).

Under these circumstances, courts quite appropriately

infer that Congress meant the phrase “ownership or

possession” to include constructive ownership or possession.

See Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730,

739, 109 S. Ct. 2166, 104 L. Ed. 2d 811 (1989) (“[W]here

Congress uses terms that have accumulated settled meaning

under . . . the common law, a court must infer, unless the

statute otherwise dictates, that Congress means to incorporate

the established meaning of these terms.”) (quotation omitted);

cf. Overstreet v. North Shore Corp., 318 U.S. 125, 63 S. Ct.

494, 87 L. Ed. 656 (1943) (interpreting statutory phrase by

reference to its meaning in another statute); see generally 2B

Norman J. Singer, Sutherland on Statutory Construction

§ 53.03 (Sth ed. 1992) (“It is well established that the

interpretation of a doubtful statute may be influenced by

language of other statutes which are not specifically related,

but which apply to similar persons, things, or relationships. ”).

In imposing arranger liability on companies under

CERCLA, other circuits have accepted less than legal title or

physical possession. See United States v. Sheli Oil Co., 294

F.3d 1045, 1058 (9th Cir. 2002) (accepting the premise that

“parties who did not literally own or physically possess

hazardous waste at the time it was disposed of or released”

may be liable); Catellus Dev. Corp. v. United States, 34 F.3d

748, 752 (9th Cir. 1994) (considering ownership or control to

be “evidence” of, but not a precondition for, arranger

liability); United States v. Northeastern Pharm. & Chem. Co.,

Inc., 810 F.2d 726, 743 (8th Cir. 1986) (“[R]Jequiring proof

of personal ownership or actual physical possession of

hazardous substances . . . would be inconsistent with the

broad remedial purposes of CERCLA.”); see also Geraghty

27a

& Miller, 234 F.3d at 929 (stating that a “nexus”—l.é., an

obligation to control the hazardous waste—must exist). As

these cases indicate, control over the hazardous waste may

suffice where literal ownership or possession falls short. See

Shell Oil, 294 F.3d at 1058 (summarizing that courts have not

imposed arranger liability without either ownership of the -

waste or “authority to control or duty to dispose of”

hazardous waste) (citing United States v. Iron Mt. Mines,

Inc., 881 F. Supp. 1432, 1451 (E.D. Colo. 1995));

Northeastern Pharm., 810 F.2d at 743-44 (individual

corporate officer’s “actual control” satisfied the statute’s

possession requirement); CPC Int’l, 759 F. Supp. at 1278

(“section 107(a)(3) requires the assumption of responsibility —

for or control over the disposition of hazardous waste” rather

than legal title).

For several reasons, GenCorp’s control over the

hazardous waste suffices to establish constructive ownership

and possession. First, even if GenCorp never held title to the

TDI Plant, it had an active interest in the facility through its

option to buy the plant, secured by its “earnest money” —its

contribution of one half of the construction costs. Second,

GenCorp had equal representation on the Committee that

oversaw “the construction, operation and management of the

TDI Plant.” Third, the Committee approved the design plans,

capital appropriations requests and the budgets of the TDI

Plant, all of which contemplated continued offsite waste

disposal. Indeed, on the basis of these facts, among others,

the district court permissibly concluded that GenCorp was an

“operator” of the TDI Plant by “managing, directing, or

conducting operations specifically related to pollution,” D.

Ct. Op. at 42-43. Surely a person who “manages” activities

“specifically related to pollution” at a plant exercises control

over the waste disposa! process.

28a

These facts and the district court’s fact finding also show

that GenCorp and Olin did not have a traditional buyer-seller

relationship. Contrary to GenCorp’s concerns, in other

words, our decision does not mean that mere customers of

waste-generating manufacturers or processors will face

“arranger” liability under CERCLA—unless, that is, they

exercise control over_the hazardous waste and its disposal as

GenCorp did in implementing this unique business

relationship. See Morton Int’l, Inc. v. A.E. Staley Mfg., Co.,

343 F.3d 669, 683 (3d Cir. 2003); Shell Oil, 294 F.2d at

1057; Concrete Sales & Servs., Inc. v. Blue Bird Body Co.,

211 F.3d 1333, 1339 (11th Cir. 2000); Gen. Electric Co. v.

AAMCO Transmissions, Inc., 962 F.2d 281, 287 (2d Cir.

1992).

GenCorp, lastly, appears to argue that even if the

evidence establishes its “arranger” status under the 1962

Agreement with Olin, the evidence does not support the

district court’s finding of arranger liability after the parties

unwound the agreement (effective October 1, 1973). See

GenCorp Br. at 40. While that argument may weil have

force—particularly since GenCorp’s involvement in oversight

of the TDI Plant ended in 1973—GenCorp does not address

the district court’s conclusion that post-1973 activities would

not have made a material difference to the cost allocation in

view of the extent of contamination at Big D that had already

taken place by that time. See D. Ct. Op. at 55. Accordingly,

we reject this claim.

Both parties challenge the district court’s allocation of

costs. In its cross-appeal, Olin challenges the district court’s

allocation of liability for the Big D clean-up (70% Olin, 30%

GenCorp), claiming that it should have evenly divided the

29a

costs between the two companies. According to Olin, the

district court abused its discretion in allocating costs, by

improperly considering two factors: (1) Olin’s several-year

delay in giving notice to GenCorp of the federal EPA’s

involvement at the Big D site, and (2) Olin’s relatively greater

authority over the TDI Plant under the parties’ 1962

Agreement.

Olin must run uphill in making this argument. Abuse-of-

discretion review applies to the district court’s allocation of

costs. See United States v. Consolidation Coal Co., 345 F.3d

409, 412 (6th Cir. 2003). And the statute augments that

discretion by saying that the court “may allocate response

costs . . . using such equitable factors as the court determines

are appropriate,” 42 U.S.C. § 9613(f)(1) (emphasis added).

Even if Olin is correct that it had no legal duty to notify

GenCorp before beginning to clean up the site, see Olin Br.

at 63, the district court permissibly considered the fact that

“Olin foreclosed GenCorp from cooperating with the

regulatory authorities during years of negotiation . . . and

then, after extensive clean-up work was underway . . . called

upon GenCorp to be a partner in cost-sharing as a fait

accompli.” D. Ct. Op. at 53. The nature of the remediation

plan and the costs associated with it assuredly could have been

affected by the participation of a third party who knew the

facility first hand. That we will never know the answer to that

question with certitude, however, is precisely why the defense

of laches exists and why this factor bears a similarity to that

“equitable” defense. See United States v. R. W. Meyer, Inc.,

932 F.2d 568, 572 (6th Cir. 1991) (noting that under

CERCLA § 113(f)(1) a court may consider “any factor it

deems in the interest of justice in allocating contribution

recovery . . . . No exhaustive list of criteria . . . should be

formulated . . . . [but] [a] court may consider . . . any

traditional equitable defenses”) (emphasis added).

30a

GenCorp similarly challenges the district court’s allocation

of liability with respect to the Fields Brook site (60% Olin,

40% GenCorp). But because GenCorp raised this issue for the

first time in its reply brief and because GenCorp failed even

to develop the argument there, we need not consider it here.

See Priddy v. Edelman, 883 F.2d 438, 446 (6th Cir. 1989).

VI.

GenCorp next argues that even if we affirm the district

court’s judgment as to its contribution liability (which we do),

we must reverse the award of prejudgment interest to Olin. In

doing so, it raises two challenges to the district court’s

analysis: (1) the trial court erroneously believed that

prejudgment interest in a CERCLA contribution action is

mandatory, and (2) Olin’s “inexplicable delay” in bringing

the suit “eliminate[d]” its claim for such interest. GenCorp

Br. at 60.

The terms of the statute and recent case law foreclose both

arguments. An award of prejudgment interest—whether in a

joint and several liability action under § 107 or a contribution

action under § 113 of CERCLA—is mandatory and the statute

makes no exception for late claims. See 42 U.S.C. § 9607(a)

(“The amounts recoverable in an action under this section

shall include interest on the amounts recoverable under [other

provisions].”) (emphasis added); Consolidation Coal, 345

F.3d at 415 (deciding, in the context of a contribution action,

that “[a]n award of prejudgment interest . . . is mandatory”);

see also Township of Brighton, 153 F.3d at 321 (interest is

mandatory in a § 107 action). The district court accordingly

did not abuse its discretion in awarding prejudgment interest

on this claim.

3la

Vil.

In its cross-appeal, Olin also claims that the district court

should have “entered a declaratory judgment finding

[GenCorp] liable for Olin’s allowable response costs incurred

after December 31, 1999, at the previously-determined

percentage share for each site.” D. Ct. Op. of Jan. 22, 2003,

at JA 602. Section 113(g)(2), the relevant statute, provides as

follows: “In any [] action described in this subsection, the

court shall enter a declaratory judgment on liability for

response costs or damages that will be binding on any

subsequent . . . actions to recover further response costs or

damages.” 42 U.S.C. § 9613(g)(2) (emphasis added). Case

law confirms that the words mean what they say. In the

context of a § 107 action, this Court has held that “the entry

of declaratory judgment as to liability is mandatory.” Kelley

v. EL. DuPont De Nemours & Co., 17 F.3d 836, 844 (6th

Cir. 1994). GenCorp responds that whether declaratory relief

as to future liability in a contribution suit is mandatory is an

open question in this circuit—one on which other courts have

divided—and that awarding declaratory relief is inherently a

“discretionary” function of district courts. GenCorp Reply

Br. at 53.

We agree with Olin insofar a8 it claims that requests for

declaratory judgments concerning future response costs in

§ 107 and § 113(f) suits must be treated alike. The sections

governing contribution “work in conjunction” with the

liability provisions of § 107(a), as “parties seeking

contribution” must turn to “ § 107 to establish the basis and

elements of liability of the defendants.” Centerior, 153 F.3d

at 350; see also Dent v. Beazer Materials & Servs., Inc., 156

F.3d 523, 531-32 (4th Cir. 1998) (determining, in a

contribution action, that a court must enter declaratory relief

as to future response costs where liability for existing costs is

32a

~ established); AlliedSignal v. Amcast Int’l Corp., 177 F. Supp.

2d 713, 757 (S.D. Ohio 2001).

Entry of a declaratory judgment, however, cannot be fully

mandatory. Under Article III of the United States

Constitution, “Congress cannot create a right of action where

no case or controversy otherwise exists.” Kelley, 17 F.3d at

844. In order to satisfy the “case or controversy”

requirement, “a party seeking declaratory relief must allege

facts to support a likelihood” that it will incur future costs

recoverable under CERCLA. /d. at 845. Based on the record

before us, we are unable to find sufficient evidence of future

response costs to satisfy the “case or controversy”

requirement. Therefore, we remand this jurisdictional issue to

the district court for initial consideration of whether a “case

or controversy” exists, and if so, for the entry of a

declaratory judgment for future response costs.

Vill.

For these reasons, we affirm the district court’s judgment

as to GenCorp’s contribution liability and its (and Olin’s)

relative shares of the remediation costs. We remand,

however, for a determination by the district court whether a

“case or controversy” exists with respect to continuing clean-

up costs, and if that jurisdictional requirement is satisfied, for

the entry of a declaratory judgment.

APPENDIX C

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF OHIO

EASTERN DIVISION

CASE NO. 5:93CV2269

[Filed July 14, 1999]

GenCorp, Inc.,

Plaintiff/Counter-defendant

Olin Corporation,

Defendant/Counter-plaintiff

i a a a a a a

Magistrate Judge David S. Perelman

34a

MEMORANDUM OPINION AND ORDER

Currently pending are the remaining counter-claims' of

Olin Corporation (hereinafter “Olin”) filed against GenCorp,

Inc. (hereinafter “GenCorp”)’ under Section 107(a) of the

Comprehensive Environmental Response, Compensation and

Liability Act of 1980, 42 U.S.C. § 9607(a) (CERCLA) as

amended by the Superfund Amendments and Reauthorization

Act of 1986 (SARA) seeking contribution from GenCorp

under Section 113(f) of CERCLA, 42 U.S.C. § 9613(f) and

29 U.S.C. § 2201, “for at least fifty percent of the response

costs incurred by Olin” as well as a declaratory judgment that

pursuant to CERCLA §§ 107(a) and 113(f) “GenCorp is

jointly and severally liable for all damages and response

costs” (Count IV), and under CERCLA Section 113(g), 42

U.S.C. § 9613(g)(2) and 29 U.S.C. § 2201, seeking a

declaratory judgment that “GenCorp is liable for at least fifty

' Count I of the complaint, which sought to compel arbitration

of the issues raised herein, was nullified by an order entered by

Judge George W. White on January 20, 1994 in which he denied

the motion of Olin to compel arbitration and held that the parties

were “enjoined from any further arbitration of this matter.” Count

II was dismissed in an order dated February 24, 1999, in which this

Court held that parties who themselves are PRPs potentially liable

under CERCLA and compelled to initiate a hazardous waste site

cleanup may not bring an action for joint and several cost recovery

and are limited to actions for contribution governed by the

mechanisms set forth in CERCLA § 113(f).

? For ease of reference herein GenCorp, Inc., which was

formerly known as the General Tire and Rubber Company will be

referred to as “GenCorp” and Olin Corporation, which was

formerly known as Olin Mathieson Chemical Corporation, will be

referred to as “Olin.”

35a

percent of the response costs incurred and to be incurred by

Olin” (Count IIl).

The factual and procedural background of this case are as

follows.

GenCorp’s manufacturing of urethane foam in the 1960’s

required as a critical ingredient large amounts of toluene di-

isocyanate (“TDI”), and GenCorp investigated potential

suppliers in an attempt to reduce its manufacturing costs. In

so doing, it entered into negotiations with Olin, as Olin had

developed and held patents on a more cost-effective process

for manufacturing TDI. That process was considered to be

complex and dangerous, as it involved the use of toxic

phosgene gas, commonly know as “mustard gas.”

On December 1, 1961, the parties entered into an

agreement calling for protection of certain business secrets

which would be disclosed during discussions to be undertaken

in pursuit of a “joint enterprise” for the manufacture of TDI.

On December 12, 1961 they entered into another agreement

(“the 1961 Agreement”) which basically provided that the

parties would share the costs of jointly constructing a TDI

Plant and each would have a 50% undivided interest in the

plant, as illustrated in the following contract language.

Article II. Section A: ...[eJach party shall have a

50% undivided interest in the plant and in all related

facilities erected or acquired jointly by the parties and

shall bear 50% of all costs entailed in the design,

construction, or acquisition and start-up of such plant

and facilities.

Article IV. Section A: ...the TDI Plant will be

operated for the benefit and account of General and

36a

Olin until the parties agree upon termination of the

joint operations or until otherwise terminated as

provided herein. A committee (the Committee)

consisting of an equal number of representatives of

General and Olin will have responsibility for the

management of the construction and operation of the

TDI Plant. The Committee will adopt and be governed

by its own rules of procedure. The chairmanship of

the Committee will rotate annually between General

and Olin. The Committee will select a plant manager

and a staff to supervise the day-to-day operations of

the plant. Full-time plant personnel will be on the

payroll of General or Olin respectively and will be

entitled to the normal employee benefits of the

particular employer which makes their services

available.

That agreement further provided that each party would be

entitled to 50% of the production capacity of the TDI Plant,

with variable costs to be allocated in proportion to the TDI

removed from the plant by each party. While the agreement

provided for the parties to jointly expand the plant, to the

extent that only one party sought to do so that party would

bear the costs of expansion.

With regard to disposal of the waste by-product of

manufacturing TDI, which included hazardous substances

such as hydrochloric acid, the agreement provided:

{T]he parties will use their best efforts to arrange for

the economical disposition of the hydrochloric

acid....Proceeds or costs of such disposal of acid will

be allocated to the parties during any year in the ratio

in which the parties take TDI during such year.

37a

During the course of the next six months, the parties

exchanged drafts of revisions to the aforementioned

agreement, beginning with the following (in which the

revisions are underlined and replacement language appears in

parenthesis):

A. Olin will erect or cause to be erected, at its cost

and expense, at a location adjacent to General’s PVC

plant at Ashtabula, Ohio, a plant for the production of

Toluene Di-Isocyanate (TDI) from Toluene.

(IV A) Il. OWNERSHIP OF PLANT (OPERATION)

(Except as specifically other wise provided

herein, the TDI Plant will be operated for the

benefit and account of General and Olin until

the parties agree upon termination of joint

operations or until otherwise terminated as

provided herein.) A. the TDI Plant will be

A, UY iS SOOO

owned and operated by Olin until such time as

General takes title thereto as hereinafter

provided. Olin agrees to train and teach

General’s assigned personnel in the know-how

of Olin’s process for producing from TDA in

the TDI Plant, and in the operation and

management of the TDI Plant. See old IV A.

(A) Olin will establish a consulting committee

(the Committee) consisting of an equal number

of representatives of Olin and General (will

have responsibility for the management of the

construction and operation) to oversee _the

construction, operation and management of the

TDI Plant to the end_ that General's

nt. staff and workmen assi

the TDI Plant ion wil

familiar with the Olin process and _ the

38a

operation and management of the TDI Plant.

The committee will adopt and be governed by

its own rules of procedure. (The Chairmanship

of the Committee will rotate annually between

General and Olin.) Olin (The Committee) will

select a (Plant) Manager for the plant and a

staff to supervise the day-to-day operation of

the plant, consulting with the Committee. Full-

time plant personnel will be (on the payroll of)

supplied by General and Olin (respectively)

and will remain on the payroll of, and will be

entitled to the normal employee benefits of the

(particular) respective employer (Company

which makes their services available) as the

case_may be. All such costs, (for such

personnel) including (costs of) fringe benefits,

will be charged to the (operation) cost of the

TDI Plant operation. B. The parties

contemplate that (each of them) General may

be requested to furnish certain services (such

as maintenance, accounting and purchasing)

required in connection with the operation of

the TDI Plant, (if it should appear that such

services can be performed more economically

in this manner.) (The cost of such services

would be subject to negotiation between the

parties.) Any such services rendered or made

available by General shall be at General’s cost.

Another revision sent by Olin to GenCorp on or about

May 29, 1962, included a provision that the plant would be

constructed at the sole expense of Olin and another stating

that the real estate taxes on the property would also be Olin’s

responsibility. Another significant change to the contract

language appeared in Article IV, with GenCorp now

39a

purchasing TDI from Olin with the purchase price to be based

upon 50% of the fixed cost of the plant. The revised Article

IV was as follows:

IV. OUTPUT OF TDI

A. For the period of time that title to the TDI

Plant remains in Olin as herein elsewhere specified,

Olin agrees to make available to General, for

purchase, fifty per cent (50%) of the actual output

capacity of the TDI Plant. General will be entitled to

purchase any capacity not utilized at any time by Olin.

For purposes of this Article, actual capacity is

assumed to be 20,000,000 pounds per year. If the

actual capacity should be more or less than

20,000,000 pounds, the figures which appear below

will be adjusted to reflect this difference.

B. The parties will agree upon the classification of

all costs into the categories of fixed or variable costs.

C. General agrees to pay a purchase price for the

TDI computed as follow: Prior to the time the TDI

Plant goes on stream, an amount equal to one half of

all operating expense of the TDI Plant and related

facilities. After the TDI Plant goes on stream, an

amount equal to fifty per cent (50%) of the fixed

costs, including depreciation, in any contract year in

which neither General purchases or Olin takes more

than 10,000,000 pounds of TDI from the TDI Plant.

After the TDI Plant does on stream, if General

purchases more than 10,000,000 pounds during any

contract year, General will pay a purchase price in

cash to Olin as a use charge an amount equal to an

additional one per cent (1%) for quantities of less than

40a

200,000 pounds. After the plant goes on stream, if

Olin should take more than 10,000,000 pounds of TDI

from the TDI Plant during any contract year, General

will be relieved of its requirement to pay as _a

purchase price fifty per cent (50%) of the fixed costs

to the extent of one per cent (1%) of the total fixed

costs for such year for each additional 200,000 pounds

of TDI taken by Olin and an appropriate fraction of

one per cent (1%) for quantities of less than 200,000

pounds.

Article II, Section A was revised to read in part:

..-Olin will establish a committee (the Committee)

consisting cf two (2) representatives each of Olin and

General for construction, production and financial

responsibility of the TDI Plant to the end that

General’s staff and workmen assigned to the TDI

Plant operation will be thoroughly familiar with the

Olin process and operation of the TDI Plant...Olin, in

connection with the Committee, will select a manager

for the plant and a staff to supervise the day-to-day

operation of the plant.

Another proposed draft from GenCorp dated, June 1, 1962

and marked “final,” included in part the following revisions

to Article II, Section A:

..-Olin will establish a committee (the Committee)

consisting of two (2) representatives each of Olin and

General to supervise and control construction and

operation of the TDI Plant. Olin agrees General’s staff

and workmen assigned to the TDI Plant operation will

be made thoroughly familiar with the Olin process and

the operation of the TDI Plant...Olin, in conjunction

4la

with the Committee, will select a manager for the

plant and a staff for the day-to-day operation of the

plant.

That was not to be the final draft, as Olin sent to GenCorp

further amendment: to the proposed contract language, dated

June 14, 1962. Olin’s new proposed contract language

omitted the Committee’s obligation to “supervise and control”

the construction and operation of the plant and substituted the

responsibility to “oversee” the construction, operation and

management of the plant. Most significantly, the new

language would empower Olin to independently select the

management of the plant, provided that there had been

“consultation” with the Committee. Article II. Section A was

revised in part as follows:

Olin will establish a committee (the Committee)

consisting of an equal number of representatives of

Olin and General to oversee the construction,

operation, and management of the TDI Plant. Olin

agrees that General’s staff and workmen assigned to

the TDI Plant operation will be made thoroughly

familiar with the Olin process and the operation and

management of the TDI Plant... Olin, after consulting

with the Committee, will select a manager for the

plant and a staff to supervise the day-to-day operation

of the plant.

Final agreement was reached on June 21, 1962 (“the 1962

Agreement”). The final version of Article Il, Section A

paralleled the language of the June 14th draft which omitted

the Committee’s ability to “supervise and control” the

construction and operation of the TDI Plant. In addition, Olin

was to select a Plant Manager, as well as staff to supervise the

42a

day-to-day operations of the plant. The 1962 Agreement

provided in pertinent part:

I. LOCATION AND CAPACITY OF PLANT

A. Olin will erect or cause to be erected, at its sole

cost and expense, at a location adjacent to General’s

PVC plant at Ashtabula, Ohio, a plant for the

production of Toluene Di-Isocyanate (TDI) from

Toluene Di-Amine (TDA), having an annual design

capacity of 20,000,000 pounds of TDI, at an estimated

cost of $4,500,000, exclusive of steam.

B. The TDI Plant will be located on land owned

by General, which site shall be suitable for erection

and operation of the TDI Plant and of sufficient size to

allow for future expansion (shown on Exhibit “A”

attached)...Real estate taxes and special assessments

assessed against the land licensed herein and the

improvements being placed thereon shall be charged

to Olin from the signing hereof until the transfer

date....

FHKKKX

Il. OWNERSHIP OF PLANT

A. The TDI Plant will be owned and operated by

Olin until such time as General takes title thereto as

hereinafter provided. Olin agrees to train and teach

General’s assigned personnel in the know-how of

Olin’s process for producing TDI from TDA in the

TDI Plant, and in the operation and management of

the TDI Plant. Olin will establish a committee (the

Committee) consisting of an equal number of

43a

representatives of Olin and General to oversee the

construction, operation and management of the TDI

Plant. Olin agrees that General’s staff and workmen

assigned to the TDI plant operation will be made

thoroughly familiar with the Olin process and the

operation and management of the TDI Plant. The

Committee will adopt and be governed by its own

rules of procedure. Olin, after consulting with the

Committee, will select a manager for the plant and a

staff to supervise the day-to-day operation of the plant.

Full-time plant personnel will be supplied by General

and Olin and will remain on the payroll of and will be

entitled to the normal employee benefits of the

respective employer, as the case may be. All such

costs, including fringe benefits, will be charged to the

cost of the TDI Plant operation...

KKK

IV. OUTPUT OF TDI

A. For the period of time that title to the TDI

Plant remains in Olin as herein elsewhere specified,

Olin agrees to make available to General, for

purchase, fifty per cent (50%) of the actual output

capacity of the TDI Plant. General will be entitled to

purchase any capacity not utilized at any time by Olin.

For purposes of this Article, actual capacity is

assumed to be 20,000,000 pounds per year. If the

actual capacity should be more or less that 20,000,000

pounds, the figures which appear below will be

adjusted to reflect this difference.

HEKK*E

44a

C. Prior to the time the TDI Plant goes on stream

General agrees to purchase fifty per cent (50%) of the

actual output of TDI produced therein at a purchase

price equal to one-half (%2) of all Olin’s operating

expenses (including start-up) of the TDI Plant and

related facilities. After the TDI Plant goes on stream,

General agrees to pay Olin, during such time as title

to the TDI Plant remains in Olin, in addition to the

variable costs of what-ever quantities of TDI General

may purchase from Olin, an amount equal to fifty per

cent (50%) of the fixed costs of the TDI Plant and

related facilities (including amortization), in any

contract year in which neither General purchases nor

Olin takes more than 10,000,000 pounds of TDI from

the TDI Plant. After the TDI Plant goes on stream, if

_General purchases more than 10,000,000 pounds

during any contract year, General will, in addition,

pay in cash to Olin as a use charge an amount equal to

an additional one per cent (1%) of the total fixed costs

for such contract year for each additional 200,000

pounds of TDI purchased by General and an

appropriate fraction of one per cent (1%) for

quantities of less than 200,000 pounds. After the TDI

Plant goes on stream, if Olin should take more than

10,000,000 pounds of TDI from the plant during any

contract year, General will be relieved of its

requirement to pay fifty per cent (50%) of the fixed

costs to the extent of one per cent (1%) of the total

fixed costs for such contract year for each additional

200,000 pounds of TDI taken by Olin and an

appropriate fraction of one per cent (1%) for

quantities of less than 200,000 pounds.

While GenCorp agreed to purchase fifty percent of the TDI

Plant output, which Olin would sell at its cost, Olin had the

45a

right to sell the remaining fifty percent to other purchasers at

a cost within Olin’s discretion, and had no obligation to share

the profits from such sales with GenCorp.

The 1962 Agreement further provided that GenCorp

would advance to Olin one-half of Olin’s capital cost as

earnest money consequent to its promise to purchase the plant

within three to five years, with GenCorp to earn interest on

that advance. In the event that the anticipated transfer of the

plant did not occur, GenCorp was to be reimbursed. Until the

time of transfer of title to the TDI Plant Olin was obligated to

“insure the TDI Plant for all risk of loss, liability and damage

to property and facilities in accordance with Olin’s normal

policy and mutually agreed between the parties[.]” The plant

was to be constructed on land owned by GenCorp adjacent to

GenCorp’s PVC plant located in Ashtabula, Ohio.

Pursuant to the 1962 Agreement Olin was also obligated

to construct a Toluene Di-Amine (“TDA”) plant which would

supply TDA to the TDI Plant.* While Olin was obligated to

disclose to GenCorp information “on the economics of its

process for the manufacture of...TDA,” there was no

obligation to provide to GenCorp actual process information

relating to TDA. Prior to the contemplated transfer of

ownersiip of the TDI Plant TDA would be “charge[d] in” by

Olin to the TDI Plant operations and after the date of transfer

Olin would sell TDA to GenCorp, while remaining free to sell

TDA to third parties.

3 TDA is a critical component in the manufacturing of TDI.

Olin was to construct a 16.5 million pound capacity TDA Plant at

another location, which turned out to be Doe Run, Kentucky, to

supply the TDA requirements of the TDI Plant.

46a

Until GenCorp acquired title of the TD} Plant, it was

obligated to purchase from Olin “the entire output of

hydrochloric acid from the TDI Plant,” to the extent that it

could be used in the production of vinyl chloride monomer at

GenCorp’s Ashtabula PVC plant.* Any leftover hydrochloric

acid was to be “neutralized or sold by Olin[,]” and the cost of

doing so was to be “allocated to the parties during any contact

year in the ratio in which the parties purchase and take TDI

during such year.”

As regarded Olin’s expertise in the TDI process, Olin

agreed to turn over information as to its “first TDI process,”

as well as a process under development at the time of the

1962 Agreement. Specifically, Olin was to “[SJupply to the

Engineers all process specifications and design data for its

TDI process to enable the Engineers to prepare full-scale

engineering drawings required for the construction and

operation of a TDI Plant embodying said process.”

Consistent with Article II A of the 1962 Agreement, the

parties entered into a side agreement for the purpose of

establishing a TDI Committee “to oversee the construction,

operation and management of the TDI Plant.” The four-

person committee consisted of two members from Olin and

two from GenCorp. The Committee Manager, who was to be

appointed by Olin, was the only person authorized by the

Committee to direct the Plant Manager.

As a consequence of the large quantities of residue wastes

generated by the TDI Plant, some of which were “hazardous”

(including TDI distillation and spent vacuum pump oils),

“In fact, GenCorp purchased the hydrochloric acid by-product

from the TDI Plant until approximately November 29, 1968.

47a

waste disposal became a concern in the early 1960’s. In an

effort to alleviate disposal issues GenCorp and Olin jointly

funded a research program referred to as the “Golden TDI”

project, the purpose of which was to develop a commercial

use for TDI residue waste. Ultimately the research was

unproductive and off-site waste disposal continued.

The TDI Plant was constructed pursuant to the 1962

Agreement and became operational in 1964.

On or about July 23, 1965 Olin and GenCorp entered into

an agreement (“1965 Agreement”) whereby GenCorp agreed

to lease to Olin, for a nominal sum of ten dollars per year, the

property upon which the TDI Plant was constructed.

Particulars of that agreement included the following:

Real estate taxes and such assessments assessed

against the leased premises and any improvements

placed thereon by [Olin] during the term or any

extension or extensions hereof, shall be paid for by

[Olin].

During the term or any extension or extensions

hereof, [Olin] shall, at its own cost and expense,

maintain:

(a) any and all insurance coverages it deems

desirable and/or necessary for its

improvements on the leased premises, and

otherwise, and

(b) the leased premises and the improvements

placed thereon by [Olin], in reasonably good

condition and repair.

48a

It is mutually agreed between [General Tire] and

[Olin] that all improvements placed on the leased

premises by [Olin] are and shall remain the property

of [Olin] during the term of this lease or any extension

or extensions hereof.

The 1965 Agreement paralleled the provision in the 1962

Agreement which described how prior to the date of transfer _

of the TDI Plant to GenCorp Olin would charge-in the TDA

supplied to the TDI Plant and after the transfer would sell the

TDA to GenCorp.* This new agreement specified a formula

meant to lower the costs of TDA so that the overall cost of

producing TDI would also be reduced. Trial testimony also

reflected that this charge-in procedure was a cost-reducing

measure, not a typical purchase/sale of TDA.°

During the period of operation of the TDI Plant residue

wastes and spent vacuum oils were transported to, and

deposited and placed onto, an off-site location referred to in

these proceedings by a number of names including “the Big

D Site,” ‘““the Big D Superfund Site,” “the Big D

Campground,” “the Dreslinski property,” “the Brenkus

landfill,” and “the Creek Road Site.”’ The TDI Plant ceased

the disposal of spent vacuum oils to this off-site location at the

> The prefatory language to the charge-in provision was “For

the purposes of computing Olin’s costs of TDI made available to

{[GenCorp] for purchase in accordance with the provisions of

Article IV below....”

® That would also hold true for the TDA pricing side letters

submitted into evidence.

’ For ease of reference in this opinion the site will be referred

to as the Big D Site.

——

49a

end of 1975, and did the same with regard to TDI residues at

the end of January of 1976.

In April of 1965, Mr. Robert Laundrie, GenCorp’s

| representative on the TDI Committee, inspected the Big D

Site and was sufficiently concerned with the conditions he

observed there that he wrote a letter to Mr. George Palmer,

the TDI Plant Manager, stating in pertinent part:

Wednesday, April 7, 1965, Mr. Valentich and myself

toured the area where the refuse from the TDI Plant is

dumped.

The following inadequacies were noted:

1. The refuse is not covered daily.

2. Liquid refuse is being dumped whereas only solids

were originally contemplated.

3. The coverage by earth is unsatisfactory. Drums

stick out from the covered portions and parts just

never are covered.

4. The slope of the dumping area is such that liquids

flow toward the river. Suitable dams would

prevent this flow toward the river.

5. There are no warning signs to ward off errant

children.

6. The nearest dwelling is about 500 feet from the

area.

50a

7. The odor of MCB was heavy. No CO CL2 was

noted, but masking by MCB might preclude noting

small quantities.

8. The odor of TDI was evident.

From 1964 through October 1, 1973 ail State of Ohio

Water Pollution Control Board (hereinafter “WPCB”) permits

pertaining to the TDI Plant were applied for and granted in

the name of Olin. In addition, requests for authorization of the

expenditure of capital funds at the TDI Plant were prepared

by Olin as “capital appropriations requests” (hereinafter

“CARs”) and submitted to the TDI Committee for approval,

and according to evidence of record, were never denied.

In 1970 a distillation column was installed at the TDI

Plant to reduce the “ortho content” of the TDA supplied by

Olin’s TDA plant which, in turn, would reduce the amount of

TDI residue waste. Ortho-TDA, a known hazardous

substance, caused TDI to be turbid, or milk-like in

appearance. Any unsold ortho-TDA was taken to GenCorp’s

PVC plant and burned in boilers. The new distillation column

was functioning by June, so that the residue waste was

reduced as of that time.

On September 29, 1970 Olin issued a press release

announcing plans for a new TDI Plant at a location in Lake

Charles, Louisiana. Construction began in August of 1971,

but no TDI was manufactured at that plant until August of

1973.

Mr. Laundrie inspected the Big D Site again in 1971, after

which he submitted an inter-organization memorandum stating

in part:

S5la

Approximately 600,000 pounds of residue per month

is being buried in this landfill. The vacuum oil is

buried in drums at a rate of 5 to 10 drums per month.

The amount of ground cover could not be determined

but the hauler claims at least 2 feet of cover. Whether

or not leaching from this dump could cause a problem

in the future is unknown but the close proximity to the

creek must be considered. The landfill being used is

not a state approved landfill operation.

A program is underway to make use of the residue as

a by-product for sale; however, I don’t expect this to

reach fruition for another year.

In April of 1971, Mr. Steven Cupach, TDI Plant

Manager, participated on behalf of Olin in a federal grand

jury investigation of the pollution of Fields Brook. On May

18th, Olin was indicted for alleged unlawful discharges of

suspended solids and chromates into Fields Brook. Two days

later, Olin entered a plea of “not guilty” to those charges.

Pursuant to discussions in a meeting held on June 3, 1971,

attended by Olin representatives as well as representatives of

the WPCB, Olin submitted a written proposal dated July 15,

1971 for the installation of equipment to reduce water

pollution discharge from the TDI Plant. Those plans were

approved by the WPCB on July 30, 1971.

In an agreement dated September 27, 1971 (hereinafter

“1971 Agreement”), Olin and GenCorp agreed that the 1962

Agreement would be terminated as of October 1, 1973.

Essentially, Olin bought out GenCorp’s right to purchase the

Ashtabula TDI Plant, for a sum of $1,650,000.00. Thus,

GenCorp was reimbursed its “earnest money,” with interest

52a

upon that sum already having been paid to GenCorp on a

monthly basis. Olin retained ownership of the TDI Plant and

GenCorp extended the lease agreement for the property upon

which the plant was located for three additional twenty year

terms at the same annual rental rate of ten dollars. That

agreement included the following language:

WHEREAS, Olin is the present owner and

operator of industrial facilities for the production of

Toluene Di-Isocyanate (TDI) at Ashtabula, Ohio

(Plant)...

On that same date the parties entered into a separate

agreement, the “TDI Product Sales Agreement,” or “TPS

Agreement,” which was to become effective October 1, 1973,

in which GenCorp agreed to purchase, on a yearly basis, “not

less than 80% of [GenCorp’s] requirements but in no event

more that 40,000,000 pounds per annum, unless mutually

agreed, of [TDI]...meeting the specifications...” attached to

the agreement. The TDI was to be shipped to GenCorp’s

operations in Indiana, Georgia, California and other mutually

agreed upon locations.

The TPS Agreement also provided that all TDI Plant

employees on GenCorp’s payroll would be removed and

transferred to Olin’s payroll, and the TDI Committee would

cease to exist. The agreement terminated GenCorp’s

obligation to purchase half of the plant production and, by the

end of 1973 GenCorp was no longer Olin’s largest customer.

GenCorp was to continue to supply steam to the TDI Plant at

cost, on a “first priority basis,” and to provide purchasing

services by way of a local purchasing agent (Mr. Neil

Gouhin) with the understanding that he functioned only with

Olin’s authority.

53a

The TDI Plant continued to generate wastes in the

production of TDI after the effective date of the TPS

Agreement, which remained in effect until October 1, 1978

when the parties entered into yet another sales agreement.

On June 28, 1971 and September 28, 1971, Olin filed

applications with the U.S. Army Corps of Engineers for a

discharge permit for the TDI Plant as required by the Refuse

: Act.

On November 30, 1971, Olin representative L.W. Roznoy

met with Mr. John Earl Richards, Chief of the Division of

Engineering of the Ohio Department of Health, to address

Olin’s plans to discontinue operations at the TDI Plant after

December 31, 1973. Those plans prompied Olin to request,

on July 15, 1971, a release from pollution abatement plans of

action previously submitted by Olin. On February 9, 1972

Mr. Roznoy forwarded a “Revised Water Pollution Plan of

Action” notifying the State of Ohio that the TDI Plant would

cease operations by December 31, 1973 and requesting

release of Olin’s prior commitment on pollution control

actions.

The WPCB issued a proposed “cease and desist order,”

dated April 14, 1972, to Olin and other companies on Fields

Brook, not including GenCorp, and denied the pending

applications for renewal of water pollution discharge permits.

The 1971 federal water pollution indictment was resolved

on October 27, 1972 by Olin’s entry of a nolo plea on three

counts and payment of a $1500 fine, with twelve other counts

having been dismissed.

During 1974, Mr. Larry Hinson, TDI Plant Manager,

prepared two operating reports in which he listed as

SE ene Ng

54a

problematic the disposal of TDI residue and spent vacuum

pump oil from the TDI Plant. Toxicity testing of TDI residue

was performed by Olin during 1975.

Well sampling on the Big D Site was performed by Olin

as a result of a recommendation made by TDI Plant Manager

William McGlasson on August 11, 1978. Less than a week

later, the Environmental Affairs Department of Olin’s

Chemicals Group initiated an investigation of current and past

solid waste disposal practices of Chemicals Group facilities.

Disposal of chemical wastes from the TDI Plant upon the Big

D Site was deemed to be an “area of concern requiring

further study.” In conducting such further investigation Olin

hired Harza Engineering to determine whether any leaching

was occurring at the site.

On November 7, 1978 the Ohio Environmental Protection

Agency (hereinafter “OEPA”) informed Plant Manager

McGlasson that mercury had been discovered in water

discharged from the TDI Plant. Upon further investigation

Olin identified its Niagara Falls plant as a possible source of

that contamination.

In December of 1978, Olin once again hired Harza

Engineering to conduct tests to determine whether there had

been soil and groundwater contamination at the TDI Plant and

the Big D Site.

In August of 1979 the Big D Site was referred to in an

internal memorandum of the Olin Chemicals Group

Environmental Affairs Department as a disposal site with a

“serious problem requiring action” as a result of “potential

leachate contamination of the adjacent creek and

groundwater.” Corrective action was recommended.

55a

As required under Section 8(e) of the Toxic Substance

Control Act a “substantial risk report” pertaining to the Big

D Site was filed on April 14, 1980 by Mr. Coles Phinizy of

Olin. That report prompted Olin to convene a substantial risk

task force meeting. The task force decided to continue

monitoring ground water at the site.

In a letter dated May 21, 1980 the OEPA requested that

Olin provide information pertaining to “solid waste streams

and volumes of such wastes disposed of by the Olin Ashtabula

Plant.”

Several months later, in July of 1980, Olin installed dirt

on the former fill area at the Big D Site to correct a slope

erosion problem.

On June 9, 1981, Olin filed notification required by § 103

of CERCLA that an estimated 28,000 tons of waste had been

dumped at the Big D Site.

In October of that same year, Olin ceased operations at

the TDI Plant and began cleanup and decontamination of plant

equipment and property as well as dismantling of plant

facilities.

In a letter dated March 8, 1982 the OEPA requested that

Olin provide groundwater monitoring data obtained from the

Big D Site.

On March 15, 1982, the US EPA notified Olin (with

respect to the TDI Plant), GenCorp (with respect to the PVC

plant) and others that they were PRPs at Fields Brook and

requested them to advise of their willingness to undertake

_voluntary action to investigate Fields Brook.

56a

On July 15, 1982 the US EPA approved an interim status

hazardous waste closure plan submitted by Olin for the TDI

Plant Site. Several months later, on October 4, 1982, the

OEPA also approved such a plan for that site.

On November 1, 1982, pursuant to an agreement between

Olin and GenCorp, Olin turned over to Pinkerton Guard

Service and to GenCorp the “keys and [TDI] plant premises,”

as reflected in a letter dated November 3, 1982 from Olin

Acting Plant Manager, Mr. Bruce Jacobsen, to Mr. Roy L.

Jackson of GenCorp. In that letter Olin reserved the right to

engage in specific activities on the property for a limited

period of time, including the “right to continue earthen

excavation where and when it is deemed necessary to alleviate

environmental hazards.” Olin also informed GenCorp that as

regards the spill basin and pond areas, “Olin’s certified

engineer...along with Ms. Chris Frazier of the OEPA,”

conducted an inspection and agreed that work upon them had

been completed thus “allowing [GenCorp] to utilize as long

as all OEPA personnel have been notified{.]” (Emphasis

added.)

During 1982 Olin conducted an erosion control project at

the Big D Site at a cost of approximately $780,000.

Monitoring data collected during that project was sent to the

OEPA. OEPA representatives were consulted prior to

commencement of the project and visited the site during

construction.

On December 30, 1982, the US EPA proposed the Fields

Brook and Big D Sites for the National Priority List

(hereinafter “NPL”) under CERCLA. Olin opposed that

proposal in a submission to the US EPA dated March 1,

1983. Two weeks later, in a letter dated March 16, 1983,

Olin informed the US EPA of corrective actions taken at the

ee ee

57a

Big D Site. On March 29, 1983 Olin notified and certified to

the US EPA and OEPA that it had implemented the approved

closure plan for the TDI Plant Site.

The US EPA placed the Fields Brook and Big D Sites on

the NPL as of September 8, 1983. _

Groundwater sampling was conducted by Olin during

1984 as part of a hydrogeological study at the Big D Site. In

a letter dated February 25, 1985 Mr. Richard S. Hendey,

Olin’s Manager of Regional Environmental Affairs, provided

a chronology of hydrogeological investigation of the Big D

Site and requested a joint meeting to discuss the status of the

_ site prior to a decision by either the OEPA or US EPA on

expenditure of funds for Remedial Investigations and

Feasibility Studies (hereinafter “RI/FS”) for the site.

On April 15, 1985 the US EPA notified Olin that it was

a PRP for the Big D Site and requested that Olin provide

specific information pertaining thereto and notify as to its

willingness to conduct an RI/FS for the site. Two days later,

representatives of Olin and OEPA met to address Olin’s

participation in the voluntary study and remediation of the

site. The meeting participants agreed that the US EPA would

prepare and submit to Olin a draft RI/FS workplan and would

meet again to discuss any additional measures to be taken by

Olin to fulfill the requirements of an RI/FS.

On July 15, 1985, pursuant to § 104(e) of CERCLA, Olin

responded to the US EPA request for information on the Big

D Site.

Between November of 1985 and the beginning of April,

1986 the US EPA and Olin engaged in negotiations regarding

the technical details of the work to be performed for the

| 58a

RI/FS. In response to an Olin letter memorializing the

negotiations, EPA Region V Administrator Vladas Adamkus

gave Olin until May 5, 1986 to sign a consent order agreeing

to perform the RI/FS.

In an April 4, 1986 letter to Mr. Adamkus, Mr. Verrill

M. Norwood, Vice President of Environmental Affairs at

Olin, discussed the fact that the US EPA and Olin had been

negotiating the terms of a consent order for Olin to perform

the RI/FS, but noted that the EPA had withdrawn from

negotiations in response to Olin’s refusal to sign a draft

consent order. In Mr. Adamkus’ response on behalf of the US

EPA, dated May 2, 1986, he rejected Olin’s reasons for not

signing a consent order and reaffirmed the May 5, 1986

deadline for signing. Approximately one and one half months

after the expiration of that deadline, in a letter dated June 24,

1986, Olin reiterated its position that the RI/FS Scope of

Work was overbroad and an unwise expenditure of funds, and

again declined to sign the proposed consent order, although

the desire for further negotiations was also communicated.

Shortly thereafter, as promised, the US EPA hired a

contractor to perform the RI/FS.

On June 23, 1986 Olin responded to a US EPA request,

made pursuant to § 104(e) of CERCLA, for information on

Fields Brook and, in so doing, for the first time named

GenCorp as a co-operator of the plant.

US EPA requests for information on Fields Brook

addressed to GenCorp pertained solely to its PVC plant, not

the TDI Plant, and GenCorp’s responses thereto were

submitted on June 19, July 31, and August 26, 1986.

On March 22, 1989 the US EPA issued a Unilateral

Administrative Order (hereinafter “UAO”) for the

ipeeieeueies

59a

implementation of remedial design and pre-design activities,

as well as RI/FS activities, for the Fields Brook Site. In July

the US EPA gave public notice of a plan for proposed clean-

up of the Big D Site in a draft Record of Decision (hereinafter

“ROD”), which provided a 30 day period for public comment

thereon. A public meeting to discuss the findings was held on

August 8, 1989. On August 25, 1989 Olin directed its written

comments to the US EPA findings. The final version of the

ROD for the Big D Site was entered on September 29, 1989.

Negotiations between representatives of the US EPA, the

OEPA, and Olin were held on November 15, 1989, January

25, 1990 and April 18, 1990 for the remedial design and

remedial action (hereinafter “RD/RA”) work to be performed

at the Big D Site, but the time period set forth by the US EPA

as to resolution of the issues pertaining to implementation of

the RD/RA work expired without the US EPA receiving from

Olin what it believed to have been “a good faith offer,”

causing the US EPA to issue a UAO, dated March 27, 1990,

for the implementation of RD/RA for the Big D Site. Only

Olin and Mr. Andrew Dreslinski, the original property owner

of the Big D Site, were named as PRPs in this administrative

order.

On March 26, 1990 Olin formed a “Big D Site team.”

In a letter dated January 18, 1991 the US EPA notified

Olin of its disapproval of the RD/RA work plans submitted by

Olin and its determination that Olin had not complied with the

terms of the UAO of March 27, 1990.

On March 21, 1991 the US EPA approved a revised plan

submitted by Olin for the RD/RA at Big D.

60a

Olin inter-office memoranda from mid-1990 reveal that

Olin’s legal departmerit-was instructed to determine whether

“[GenCorp] [had] any liability as a PRP for the Big D Site

remediation costs because of the Olin-General Tire joint

venture arrangement at Ashtabula that existed from mid-1960s

through the early 1970s.” It was not until receiving letters

dated July 29, 1991, written by Olin legal counsel Kevin R.

Condon to Mr. Bruce H. Brubaker, Environmental Counsel

of GenCorp, and to Mr. William A. Simon, Jr., Assistant

General Counsel of GenCorp, that GenCorp was notified of

Olin’s contention that GenCorp had liability for its “share of

the proper allocation of response and remediation costs

incurred and to be incurred” at the Big D and Fields Brook

GenCorp’s response, included in a letter written by Mr.

Simon to Mr. Condon dated November 7, 1991, was that

there had been no joint venture between Olin and GenCorp so

that-any claim that GenCorp was potentially liable along with

Olin was baseless.

On November 11, 1991 Olin entered into an agreement

with Andrew and Barbara Dreslinski for the purchase of their

property upon which the Big D Site was located. The parties

exchanged releases from any claims which may have arisen

prior to the signing of such agreement.

During that same month Olin submitted a post closure

permit application to the US EPA for the TDI Plant Site, in

which Olin informed that ground water monitoring and post-

closure care would be continued at the site.

On August 6, 1992 a Consent Decree was approved in this

district court in United States v. GenCorp, Inc., et al., Case

No. 5:89CV1866. Olin and the other signatory defendants

6la

agreed to (and did) reimburse the United States for response

costs incurred by the United States at the Fields Brook Site,

plus interest.* In complying with that order Olin has incurred

costs for monitoring, assessing and evaluating the release or

threat of release of hazardous substances, as well as

conducting specified remedial design and _ remedial

investigation and feasibility studies at the Fields Brook Site.

Those actions taken pursuant to the Fields Brook Order are

ongoing.

Olin’s excavation at the Big D Site began on September

18, 1992 and, in February of 1993, incineration of excavated

soils and drum contents at the Big D Site began, test burn

results having been approved. During the excavation activities

conducted as part of the remedial action at the Big D Site Olin

determined that the US EPA had underestimated the volume

projections of the 1989 ROD, considering that: (1) the size of

the landfill was larger than had been estimated previously; (2)

significantly more drums of vacuum pump oil were buried at

the site; (3) no one had been aware that drums of TDI residue

were buried at the site; (4) few of the drums could be

removed intact; and (5) in several areas the landfill was

deeper than originally determined in the RI/FS. In fact, by the

time Olin’s excavation of the Big D Site had been completed

approximately twice as many tons of waste and three to four

times as many drums had been excavated and incinerated than

had been projected in the ROD. An additional 15,000 tons of

waste was incinerated during demobilization.

GenCorp initiated this action seeking a declaratory

judgment that it is not liable in contribution or otherwise for

® The parties have stipulated that the Fields Brook Site includes

not only the brook, but also the TDI Plant Site.

62a

Olin’s past and future response costs to remove and remediate

hazardous wastes from the TDI Plant which were disposed of

at, and transported to, off-site facilities. GenCorp alleged that

it did not jointly operate or own the TDI Plant which

generated the hazardous wastes, nor did it jointly arrange for

the disposal of waste from the TDI Plant.

Olin counterclaimed seeking a declaratory judgment that

GenCrop is liable for at least one-half of all costs incurred

and to be incurred by Olin for “assessment, containment,

response, removal, and remediation” at the sites at which the

TDI Plant waste was released/disposed of, on the basis that

GenCorp and Olin jointly owned and operated the TDI Plant

or that GenCorp was a common member of an association,

consortium or other commercial entity which generated and

arranged for disposal of hazardous wastes at sites in and

around the plant. Olin claims in excess of $65 million in

response costs.

As the parties agreed to dismissal under Rule 41(a)(1) of

the Federal Rules of Civil Procedure of GenCorp’s complaint

the action is proceeding solely on Olin’s counterclaim.’

* Olin’s counterclaim sought recovery for response costs at

another site, the Summit National Superfund Site, but that claim

was dismissed without prejudice pursuant to Rule 41(a)(2) upon the

oral motion of Olin at the outset of the Phase I proceedings. Olin’s

counterclaim also sought recovery for legal costs pertaining to five

other sites: New Lyme Landfill, Brenkus Shop, Doherty’s Landfill,

Universal Trucking, and Reserve Environmental Services. While it

was true that the Sixth Circuit permitted recovery of such costs at

the time of filing, the United States Supreme Court renounced such

recovery in Key Tronic Corp v. United States, 114 S.Ct. 1960

(1994). On February 13, 1995, Olin asked GenCorp to stipulate to

a voluntary dismissal of these claims and, upon GenCorp’s refusal

63a

CERCLA was enacted by Congress to “initiate and

establish a comprehensive response and financing mechanism

to abate and control the vast problems associated with

abandoned and inactive hazardous waste disposal sites.” H.R.

1016, 96th Cong., 2nd Sess., pt. 1, at 22, reprinted in 1980

U.S.C.C.A.N. 6119, 6125. The underlying purpose of the

Act was to achieve cost effective and environmentally sound

clean-up of contaminated sites.

In order to recover in a CERCLA private cost recovery

cause of action, a plaintiff must prove the following:

(1) that the site in question is a “facility” as defined in

42 U.S.C. § 9601(9);

(2) that there has been a “release” or threatened

release of a hazardous substance at that facility;

(3) that the defendant falls within the definition of

“liable parties” found in 42 U.S.C. § 9607(a); and

(4) that the “release” or threatened release caused the

plaintiff to incur “necessary response costs” consistent

with the National Contingency Plan, 40 C.F.R. § 300

et seq.

Struhar v. City of Cleveland, 7 F.Supp.2d 948, 951

(N.D.Ohio 1998).

In this case a major dispute between the parties focuses on

the definition of “liable parties.”

to do so, moved for dismissal pursuant to Rule 41(a)(2) or to amend

its counterclaim to delete these sites.

64a

Before addressing that issue this Court must consider

GenCorp’s argument that Olin’s CERCLA § 113(f) action is

time-barred as having been filed beyond the limitations period

provided in § 113(g).

The statute of limitations to be applied in actions brought

pursuant to CERCLA are found within § 113(g), which

provides in pertinent part that cost recovery actions under

§ 107 of CERCLA, 42 U.S.C. § 9607, are subject to a six-

year statute of limitations for remedial actions and a three-

year statute of limitations for removal actions, as specified in

42 U.S.C. § 9613(g)(2), whereas contribution actions under

§ 113, 42 U.S.C. § 9613(f)(1) must be initiated within 3 years

of the date of either a judgment for recovery of costs or

damages or “the date of an administrative order...or entry of

a judicially approved settlement with respect to such costs or

damages,” as specified in 42 U.S.C. § 9613(g)(3).

Pursuant to the holding of the Sixth Circuit Court of

Appeals in Centerior Service Co. v. Acme Scrap Iron & Meial

Corp., 153 F.3d 344 (6" Cir. 1998), this Court granted

GenCorp’s motion for partial summary judgment on Count II

of Olin’s counterclaim and held that as a PRP Olin could not

bring a separate claim for joint and several cost recovery but

is limited to an action for contribution governed by the

mechanisms set forth in CERCLA § 113(f). Sections 107(a)

and 113(f) are intertwined, in that a § 113(f) contribution

action “is an action to recover the necessary costs of response

by any other person, as referred to in § 107.” Jbid. Thus,

while liability is defined by § 107, including what parties are

liable and what defenses may be employed, this contribution

action is controlled by equitable apportionment principles set

forth in § 113(f). Zbid.

65a

As regards the applicable statue of limitations, in

Centerior the Sixth Circuit noted that although there was no

question before that court as to the statute of limitations to be

applied to contribution claims where a party incurs response

costs pursuant to a § 106 administrative order, it would

nonetheless be inclined to follow the holding of the 10°

Circuit in Sun Co., Inc. v. Browning-Ferris, Inc., 124 F.3d

1187, 1192 (10th Cir. 1997), cert. denied, 118 S.Ct. 1045

(1998), that the plaintiff PRPs, whose cause of action was one

for contribution under § 113(f), had to have initiated their

case within the limitations period of § 113(g) which provides

that “[a]n initial action for recovery of the costs referred to in

section 9607 of this title must be commenced. ..for remedial

action, within 6 years after initiation of physical on-site

construction of the remedial action....” The case pending

before that court was deemed as “the ‘initial action’ for

recovery of such costs.” /bid.

GenCorp argues that in light of the fact that Olin’s

contribution action constituted the “initial action” for

recovery of response costs referred to in § 107 it is barred as

untimely under § 113(g) because it was filed more than six

years after Olin initiated physical on-site activities at the TDI

Plant and Big D Sites.

Olin counters that any assertion of time-bar pertaining to

the § 113 contribution claim has been waived by Olin in light

of GenCorp’s counsel’s representation at the Phase Il trial

that, “Our position is not that Olin has blown the statute of

limitations for contribution under the statute for contribution.

Our theory was statute of limitations on the 107 claim for cost

recovery and also our thereby is...the laches argument....”

(Transcript, p.1190.)

66a

Waiver aside, Olin argues that the limitations period had

not expired at the point of initiating its claims against

GenCorp for each of the following reasons: (1) Olin does not

seek recovery for work done in the early 1980s, as that work

was not undertaken in compliance with the NCP"®; (2) the

work performed by Olin at Big D and the TDI Plant in the

early 1980s was “removal,” and not “remedial,” work, so

that the statute did not begin to run upon completion of that

work; (3) “remedial” work under CERCLA is work

undertaken pursuant to a “permanent site remedy,” which

type of work was not begun by Olin until the 1990s in

response to the 1989 determination by the US EPA that the

removal work performed by Olin in 1982 at the Big D Site

had not remedied the contamination therein and that the work

had to be dismantled; and (4) even if that work had been

considered remedial in nature, the subsequent work

performed in the 1990s was sufficiently removed in time to

have separated it from work performed in the 1980s and,

therefore, began a new limitations period.

In this Court’s opinion, it is pivotal to the issue of waiver

of the limitations defense that GenCorp had previously

challenged the timeliness of Olin’s causes of action. That

challenge placed Olin on notice that timeliness was in issue,

so that at this stage in the proceedings Olin would not be

prejudiced by a limitations defense. In light of that fact, as

well as the fact that the Centerior opinion (and the Sun

Company decision upon which the court relied) were decided

after the Phase II trial, but prior to the instant opinion, this

Court does not deem the statute of limitations defense to have

been waived.

'° That was conceded by GenCorp’s counsel at the Phase II trial

(Transcript, p. 1935).

67a

That having been said, the defense is unpersuasive for

each of the following reasons.

First, while this Court could have been persuaded that an

action to recover costs incurred in the early 1980’s was time-

barred, Olin is not pursuing recovery for those expenditures

and the work performed in the early 1980’s was separate from

that undertaken in the 1990’s.

In the early 1980’s Olin deposited topsoil onto eroded

portions of the Big D landfill, then deposited clay on top of

the landfill, stabilized a slope and took actions to prevent

water from migrating offsite. GenCorp has stipulated that

such work was preformed in order to prevent soil erosion. At

the TDI Plant Site Olin removed hazardous wastes, including

contaminated soil and sludges, and contaminated sediments

from Fields Brook.

The NCP defines removal actions to include:

(2) Drainage controls, for example, run-off or run-on

diversion — where needed to reduce migration of

hazardous substances or pollutants or contaminants

off-site or to prevent precipitation or run-off from

other sources, for example, flooding, from entering

the release area from other areas;

(3) Stabilization of berms, dikes, or impoundments or

drainage or closing of lagoons — where needed to

maintain the integrity of the structures;

(4) Capping of contaminated soils or sludges — where

needed to reduce migration of hazardous substances or

pollutants or contaminants into soil, ground or surface

water, or air;

68a

KAKKX

(6) Excavation, consolidation, or removal of highly

contaminated soils from drainage or other areas —

where such actions will reduce the spread of, or direct

contact with, the contamination....

40 C.F.R. § 300.415(d).

Clearly, the aforementioned work performed in the early

1980’s falls within the parameters of removal actions. The

fact that the work was performed within a relatively short

time after a clean-up was initiated and was relatively low in

cost at both sites is also indicative of a removal, as opposed

to remedial,"' action. See, Barmet Aluminum Corp. v. Reilly,

927 F.2d 289, 291 (6th Cir. 1991); BCW Assocs., Ltd. v.

Occidental Chemical Corp., 1988 U.S. Dist. LEXIS 11275,

at *51 (E.D.Pa. 1988). A permanent remedy is initiated after

issuance of an RI/FS, as proposed remedies set forth therein

must be selected and approved before being implemented.

H.R. Rep. No. 99-253 Part 3, 99th Cong., Ist Sess. 21

(1985); Kelley v. E.I.DuPont de Nemours & Co., 17 F.3d

836, 843 (6th Cir. 1994). In this case in March of 1989 ine

US EPA issued its UAO for the implementation of remedial

design and pre-design activities, as well as RI/FS activities,

for the Fields Brook Site. Approximately one year later, on

March 27, 1990, the EPA issued its UAO for the

implementation of RD/RA for the Big D Site. It would follow

'' CERCLA defines “remedial action” as “consistent with

permanent remedy taken instead of or in addition to removal actions

in the event of a release or threatened release of a hazardous

substance into the environment....” 42 U.S.C. § 9601(24).

69a

that any permanent remedy would have been implemented

subsequent thereto.

That conclusion is further augmented by the fact that in

the 1989 ROD for the Big D Site the EPA determined that

earlier work performed by Olin at that site failed to remedy

the problems there and the work had to be dismantled. In that

vein, the 1990 UAO ordered Olin to tear off the clay cap that

had been deposited over the landfill and to take the measures

set forth in the ROD. The resulting work, which began in

1991 (almost a decade after the initial work), included

removal of the clay cap, excavation of the site, and removal

and incineration of wastes and contaminated soils from the

landfill and south slope. Thus, the prior work was not

“permanent” as would be required for a remedial action, nor

was it consistent with the remedy mandated by the EPA in the

1990 UAO.

Based upon the foregoing this Court finds Olin’s claims

for relief to be timely filed.

Having addressed the issue of timeliness this Court now

turns to questions pertaining to liability.

Olin urges this Court to find GenCorp to be a “person”

within the meaning of sections 107(a)(2) and (3) of CERCLA,

42 U.S.C. §§ 9607(a)(2) and (3), and thus liable for clean-up

costs at the Big D and Fields Brook (which includes the TDI

Plant) Sites.'

2 Sections 107(a)(2) and (3) impose liability for costs and

damages upon:

(2) any person who at the time of disposal of any hazardous

i einai

70a

As regards the Big D Site, Olin argues that GenCorp

became a liable “person,” as contemplated under CERCLA,

by reason of having formed a “joint venture,” an

“association” or a “commercial entity,” which arranged for

the disposal of TDI residue wastes at the Big D Site. As an

alternative position, Olin claims that GenCorp, on its own,

arranged for the disposal of TDI residue at Big D.

With regard to the Fields Brook Site, Olin asserts that

GenCorp is a liable person, again by reason of its “joint

venture” or “association” with Olin, as an owner or operator

of the site who disposed of hazardous waste at the Fields

Brook Site, or, in the alternative, solely as an equitable owner

or operator of the TDI Plant which manufactured the

hazardous substances disposed of at the Fields Brook Site.

The parties have expended a great deal of effort grappling

with the issue of whether there was a joint venture or

association between Olin and GenCorp which served to

substance owned or operated any facility at which such -

hazardous substances were disposed of.

(3) any person who by contract, agreement, or otherwise

arranged for disposal or treatment, or arranged with a

transporter for transport for disposal or treatment of

hazardous substances owned or possessed by such person,

by any other party or entity, at any facility or incineration

vessel owned or operated by another party or entity and

containing such hazardous substances....

Tila

confirm status upon GenCorp as a “person” under

CERCLA.”

The section defining “person” has been broadly

interpreted by the Sixth Circuit Court of Appeals to include

“all known forms of business and commercial enterprises.”

Anspec Co. v. Johnson Controls, Inc., 922 F.2d 1240, 1247

(6th Cir. +991). Although liability under CERCLA is a

federal question, state law is applied to determine whether a

particular business relationship existed and whether it, in turn,

was a CERCLA “person.” /bid.

Under Ohio law, a joint venture requires the following

five elements: (1) an agreement to engage in a business

undertaking, whether express or implied; (2) an intent by the

parties to associate themselves as joint adventurers, which.can

be assessed by application of ordinary rules of contract

interpretation; (3) a community of interest in the endeavor;

(4) equal authority or right to direct the movements and

conduct of each other; and (5) sharing of profits and losses.

Silver Oil Co. v. Limbach, 44 Ohio St.3d 120, 541 N.E.2d

612, 615 (1989); Ford v. McCue, 163 Ohio St. 498, 127

N.E.2d 209, 212-13 (1955). it has also be held that “each

coadventurer shall stand in the relation of principal, as well as

agent, as to each of the other coadventurers....” Matter of

Sluss, 56 B.R. 575, 579 (Bankr.S.D.Ohio 1986). The parties

must also have the right of joint proprietorship to the extent

that each joint adventurer has control of the means used to

carry out the goal of the endeavor. 13 Ohio Jurisprudence 3d,

'3 The term “person” is defined in part in § 101(21), 42

U.S.C. § 9601(21), as “an individual, firm, corporation,

association, partnership, consortium, joint venture, [or] commercial

entity...”

72a

Business Relationships, Sections 1094-98 (1979 and 1987

Supp.)

In the present case, Olin argues that by the terms of the

1962 Agreement the parties entered into a joint venture as

defined under Ohio law. As interpreted by Olin that

agreement created a joint venture by virtue of providing: for

the parties to pool their resources and share profits and losses;

for GenCorp to provide laborers and “many of the managers”

to operate the plant; for the parties to share in the costs of

constructing the plant, as well as the fixed and variable costs

of operating the plant, and to share the TDI they produced as

well as the profits from the sales of the by-product from

making TDI; for Olin to provide management personnel and

expertise in manufacturing TDI; and for the parties to

participate equally in plant operations by reason of the TDI

Committee.

On the other hand, GenCorp asserts that while the 1961

Agreement between the parties contemplated the parties

jointly owning and operating the TDI Plant, that agreement

was nullified and replaced by the 1962 Agreement which

altered their relationship in several key particulars and, in so

doing, negated any joint venture status.'*

This Court finds that while there were some elements of

a joint venture under the terms of the 1962 Agreement there

was no joint venture created by that agreement. Overall, the

1962 Agreement, especially when read in conjunction with the

'* The testimony of Mr. James Wetzel at the Phase I trial was

that Olin precipitated the change due to “antitrust worries on Olin’s

part.” (Tr. 3464-65)

73a

1961 Agreement and its draft revisions, fails to evidence an

intent to form a joint venture.

A comparison of pertinent language in the 1961 and 1962

Agreements, set forth previously herein, reflects that the

responsibilities of the TDI Committee changed from having

been granted - “responsibility” over the TDI Plant to

“over[sight oij the construction, operation and management

of the plant.” In fact, in a draft of the 1962 Agreement

submitted as evidence at trial the TDI Committee had been

empowered to “supervise and control” operations of the plant,

but the final version opted to have the Committee

“overseeing” the operation of the plant.

In a significant change involving the process for selecting

a Plant Manager the TDI Committee would no longer make

that selection. Instead, Olin would make its decision

independently after merely “consulting with” the Committee.

While chairmanship of the TDI Committee had rotated

between Olin and GenCorp under the 1961 Agreement there

was no such parallel provision under the 1962 agreement.

Instead, the new agreement called for Olin to appoint a

“Committee Manager” who, with instructions from the

Committee, was the only person authorized by the Committee

to direct the Plant Manager. The Plant Manager was also to

be selected by Olin as was the supervisory staff over the day-

to-day operation of the plant. Other full-time plant personnel

were to be supplied by both Olin and GenCorp, with those

employees to remain on the payroll of, and to receive normal

employee benefits from, their respective employer. -

Another major change from the 1961 to the 1962

Agreements which provides evidence of the parties’ intent

was the provision stating that the TDI Plant would not be

jointly owned and operated but would be owned and operated

74a

solely by Olin until the time of title transfer as provided in the

agreement. The new agreement also required Olin to

construct the plant at its sole cost and expense,’ and provided

that Olin was responsible for obtaining insurance coverage for

the TDI Plant for all liability and property damage.

Further evidence that the parties did not intend to form a

joint venture can be found in the requirement that GenCorp

purchase fifty percent of the TDI Plant output, which Olin

would sell at its cost, while at the same time Olin had the

right to sell the remaining fifty percent to other purchasers at

a cost within its discretion, without any obligation to share the

profits from such sales with GenCorp. GenCorp was also

required to purchase from Olin any hydrochloric acid by-

product from the TDI Plant which could be used in

GenCorp’s PVC plant.'°

'S In effect Olin did so, considering that the monies paid by

GenCorp as “earnest money” towards the purchase of the plant

were returned to GenCorp.

between the parties. Olin’s profit was to come from the sale of TDI

to GenCorp and others, whereas GenCorp’s profits were to come

from use of TDI in its manufacturing of PVC products. The Ohio

Supreme Court in Ford v. McCue, supra at 503, specifically held

that in determining whether a joint venture existed the profits from

the endeavor must be “joint and not several.” In a similar vein,

although the cost-reducing measures of the 1965 Agreement were

aimed at increasing profits to Olin from its sale of TDI and to

GenCorp from the lower cost of TDI which would be incorporated

into the manufacture of PVC products, once again those profits

would be several and not joint.

75a

In sum, the fact that there was not complete community of

interest in the endeavor, that the parties did not have equal

authority or right to direct the movements and conduct of each

other, that there was no right of joint proprietorship to the

extent that each joint adventurer had control of the means

used to carry out the goal of the endeavor and, finally, that

there was no sharing of profits, lead this Court to conclude

that the parties did not intend to enter into a joint venture.

The case relied upon by Olin as controlling on this issue

of the existence of a joint venture, Bulgrin v. Madison Gas &

_ Electric Co. , 125 Wis.2d 405, 373 N.W.2d 47 (Wisc.Ct. App.

1985), review denied, 378 N.W.2d 291 (Wisc. 1985), does

not convince this Court otherwise.

That case is distinguishable for a number of reasons, not

the least of which is that it was the parties to the joint venture

agreement who were asserting the existence of a joint venture

in a case initiated by an injured utility company employee

who collected worker’s compensation benefits from his

employer, that being his exclusive remedy against the

company, but who also sought to recover against two other

companies which, along with his employer, jointly owned,

operated and maintained the Columbia Energy Center, the

location of his injuries. 373 N.W.2d at 49-50. According to

the plaintiff the other two companies were negligent in

selecting his employer company to supervise and operate the

facility. Jbid. The two other companies argued that as joint

venturers in the facility at which the injuries occurred they

were also the plaintiff's employers and, therefore, having

previously collected worker’s compensation, the plaintiff had

no remedy against them. /bid.

The Wisconsin appellate court reversed the lower court’s

dismissal of plaintiff's case against the other two companies,

76a

and held that the affidavits and documentary evidence

demonstrated at least a prima facie showing of the existence

of a joint venture, with the other two companies surrendering

the right to control the facility to the company which

employed plaintiff, and that a genuine issue of material fact

existed as to whether the employee could be deemed an

employee of the other t

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