Opposition Brief — UGI Utilities, Inc. v. Consolidated Edison Edison Co. of New York, Inc. (No. 05-1323)

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FILED

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No. 05-1323 OFFICE OF THE CLERK

IN THE

Supreme Court of the United States

UGI UTILITIES, INC.,

Petitioner,

CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Second Circuit

BRIEF IN OPPOSITION

RICHARD W. BABINECZ Woopy N. PETERSON *

ASSOCIATE GENERAL COUNSEL DAVID L. ELKIND

AND GENERAL ATTORNEY ANDREW C. COOPER

CONSOLIDATED EDISON COMPANY JOSEPH F.. BERGER

OF NEW YORK, INC. DICKSTEIN SHAPIRO MORIN

4 Irving Place & OSHINSKY LLP

New York, NY 10003-3502 2101 L Street, NW

(212) 460-2477 Washington, DC 20037-1526

(202) 785-9700

* Counsel of Record Attorneys for Respondent

Sie A AOE ANN OAT EE: i I ER AACN

WILSON-EPES PRINTING Co., INC. — (202) 789-0096 — WASHINGTON, D. C. 20001

COUNTERSTATEMENT OF QUESTION PRESENTED

Last Term, in Cooper Industries, Inc. v. Aviall Services,

Inc., 543 U.S..157 (2004), this Court found it “prudent to

withhold judgment” (id. at 170) on an array of issues in-

volving §§ 107 and 113 of the Comprehensive Environ-

mental Response, Compensation, and Liability Act of 1980

(“CERCLA”), as amended by the Superfund Amendments

and Reauthorization Act of 1986 (“SARA”), principally be-

cause none of the issues had been raised or considered below.

The question presented is:

Whether the Court should take up questions reserved in

Aviall by reviewing the lone post-Aviall court of appeals

decision, a decision that reached only one of the questions,

answered that question sua sponte, and did not “confront

the relationship between §§ 107 and 113” (Aviall, 543 U.S.

at 170).

(1)

RULE 29.6 STATEMENT

Respondent Consolidated Edison Company of New York,

Inc. is a wholly owned subsidiary of Consolidated Edison,

Inc. No other publicly held corporation owns 10% or more of

respondent’s stock.

TABLE OF CONTENTS

Page

COUNTERSTATEMENT OF QUESTION

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EFA EEA FEE Dict ccssotrisntibissoniinariasineviatnasiniete l

COUNTERSTATEMENT OF THE CASE .................. l

REASONS FOR DENYING THE PETITION ............. 3

I. NO ISSUE RESERVED IN AVIALL WAS

EE AIT wiehisiisirbininniioncsek zuolonsaninlakianlii 3

Il. NO POST-AVIALL CIRCUIT CONFLICT

See Wieden bx siipinicertinlidigaiidaciethbasadinianssasasnailaiach 5

Ill. NO EXCEPTIONAL CIRCUMSTANCE SUP-

FRAG NO ORES TEI TT einkccesindctistgranescinaocncinebutpavessaueas 7

RIE APOE ivxnirninpincnsivssiisibhivocseveicctninsaesinsasbeitiansanigigihladi 9

(iit)

TABLE OF AUTHORITIES

CASES Page

Adarand Constructors, Inc. v. Mineta, 534 U.S.

WD EEL) CE CRIMI ya ovis icv ne suenincevsoncncitasves 5

Adobe Lumber, Inc. v. Hellman, 415 F. Supp. 2d

1070 (E.D. Cal. 2006), petition for permission

to appeal granted, No. 06-80026 (9th Cir. May

FG EE iscsabidahsciakendkoveislanseeinhetieai increas 6

Atl, Research Corp. v. United States, No. 05-

3152 (8th Cir. filed Aug. 8, 2005) (argued

is ete IE piss sein tlaaatstedkcktbinss saeedictah ndanacenaes 6

Bedford Affiliates v. Sills, 156 F.3d 416 (2d Cir.

PUN issn iacitdestnttavacpuiemncacentaretisidad, amueuieibon, 2,4,7

City of Rialto v. United States Department of

Defense, No. EDCV 04-00079-VAP (SSx),

2005 U.S. Dist. LEXIS 26941 (C.D. Cal. Aug.

Sy NR iatnaceanieceecanktaiteneusnon de omdveuieaainaapendias 6

City of Rialto v. U.S. Dep't of Def., No. 05-56749

(Sth Cw. filed Nov. 22, ZOOS) q...5......nesscseasseacene 6

Commander Oil Corp. v. Barlo Equip. Corp.,

BRS Oe ES CA, BRED sash stesninintnwscnancnnacts 5

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

ae Ra BT CD ciniigingceinaden ae eieas passim

EJ. DuPont de Nemours & Co. v. United States,

No. 04-2096 (3d Cir. filed Apr. 27, 2004)

(AEE AOR: 17, BOE tccesitarninnianins 6

"MC Corp. v. U.S. Dep't of Commerce, 29 F.3d

BSS Ga. FI cinicanichinainincinmicas 8

Kotrous v. Goss-Jewett Co. of N. Cal., Inc., No.

06-15162 (9th Cir. filed Feb. 1, 2006)... 6

Matsushita Elec. Indus. Co. v. Epstein, 516 U.S.

BANE CUR. casiivdien cariavividiahaiasceatcobianasdaeae ese 5

McDonaid v. Sun Oil Co., 423 F. Supp. 2d 1114

CER EIR. Ge terkinsh anh etetiaticiiaemmreiakiues 6

TABLE OF AUTHORITIES—-Continued

Page

N. Am. Galvanizing & Coatings, Inc. v. Metro.

Water Reclamation Dist. of Greater Chicago,

No. 05-3299 (7th Cir. filed Aug. 8, 2005)

SRPMS FUR. By HOOD cates xvensssaessandasiainvncsicnennens 6

Pinal Creek Group v. Newmont Mining Corp.,

OS BSG 1296 COU Cer, 1997) ovcsssssirccssssosnssnsnns 6

Seneca Meadows, Inc. -v. ECI Liquidating, Inc.,

No. 95-CV-6400L, 2006 WL _ 1030321

OR eee 5 PRIME OR, AMM a cekseonkspecxonasvnixesaateiess 4

Sunnyside Dey. Corp. v. Opsys U.S. Corp., No.

C 05-01447 SI, 2006 WL 1128039 (N.D. Cal.

BU a 6

Syms v. Olin Corp., 408 F.3d 95 (2d Cir. 2005)... 4

STATUTES

Comprehensive Environmental Response, Com-

pensation, and Liability Act of 1980

De Ge Sey MIRE vacésnsidsuscdstandinessdsabivonecs passim

ee ay ee Ree OF SPEDE alscnshsecesnenssadinsassacnaccucasn passim

MISCELLANEOUS

Bricf of Amicus Curiae United States Chamber

of Commerce, Raytheon Aircraft Co. v. United

States (D. Kan. Feb. 24, 2006) (No. 05-2328

JWL), Toxics L. Rep. (BNA) 239 (Mar. 2,

J.B. Wolverton, Sovereign Immunity and Na-

tional Priorities: Enforcing Federal Facilities’

Compliance with Environmental Statutes, 15

raarv. Bovil. L. Rev. 565 €1991).......ccccccccsesososees 7-8

IN THE

Supreme Court of the Anited States

No. 05-1323

UGI UTILITIES, INC.,

Petitioner,

CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Second Circuit

BRIEF IN OPPOSITION

STATUTES INVOLVED

The last sentence of the “Statutes Involved” section of

petitioner UGI Utilities, Inc.’s (“UGI”) petition (at 4) notes

that the statutes involved, CERCLA §§ 107 and 113, 42

U.S.C. §§ 9607 and 9613, are set out in the appendix to the

petition at 103a-142a. The remainder of the section essen-

tially consists of statutory exegesis and argument that do not

comport with the requirements of Rule 14(1)(f) of this Court.

Respondent Consolidated Edison Company of New York,

Inc. (“Con Edison’) therefore does not respond to them.

COUNTERSTATEMENT OF THE CASE

The facts are as stated in the opinion of the court of appeals

(Pet. 2a-4a). As the opinion notes, Con Edison’s First

Amended Cemplaint rests solely on § 113(f)(1), and seeks to

—

recover from UGI a portion of the costs Con Edison incurred

in cleaning up environmental! contamination. (Pet. 4a, 25a.)

The case was briefed and argued in the district court and the

court of appeals on the § 113(f)(1) jurisdictional basis.

After this Court’s Aviall decision: came down, the court of

appeals asked the parties to file supplemental briefs on the

question whether the court continued to have jurisdiction.

UGI asserted that jurisdiction no longer attached; Con Edi-

son contended that jurisdiction continued to exist under

§ 113(f)(3)(B). (Pet. 7a.) Neither party briefed any issue

arising under § 107, as both assumed Bedford Affiliates v.

Sills, 156 F.3d 416 (2d Cir. 1998), foreclosed such a claim.

The court of appeals rejected the parties’ arguments, dis-

tinguished the case from Bedford Affiliates, and, in answer

to one of the § 107 questions reserved in Aviall, concluded

that a person potentially responsible for environmental con-

tamination (“PRP”) that voluntarily cleans up the contami-

nation on its own initiative can pursue a cost recovery claim

under § 107(a). The Second Circuit did not decide any of the

other open Avial/ issues, nor address the “significant issue”

of the relationship between §§ 107 and 113 (Aviall, 543 U.S.

at 169).

The court of appeals remanded the case to the district court

for further proceedings. Con Edison has not yet amended its

complaint in the district court to state a § 107 claim, nor

decided whether “to frame its § 107 claim on remand as

an implied right of contribution (as opposed to a nght of

cost recovery)” (Aviall, 543 U.S. at 170-71), or in some

other fashion.

REASONS FOR DENYING THE PETITION

I. NO ISSUE RESERVED IN AVIALL WAS

RAISED BELOW

In Aviall, the Court flagged a host of § 107 and § 113

questions that had not been raised or decided below: whether

a party potentially liable under CERCLA (1) can recover

costs under § 107(a)(4)(B); (2) can pursue a § 107(a) action

for joint and several liability; (3) can pursue a cost recovery

action under § 107(a) for some form of liability other than

joint and several; (4) has an express or implied right of

contribution under § 107; and (5) has “any judicially implied

right of contribution [that] survived the passage of SARA.”

543 U.S. at 168-71. The Court also cited the relationship

between § 107 and § 113 as “a significant [undecided] issue

in its own right.” Jd. at 169. Concluding that these issues

“merit full consideration by the courts below,” the Court

remanded them to the Fifth Circuit. /d. at 169, 171."

In Aviall, neither the district court, the panel, nor the en

banc court reached any § 107 question, either because Aviall

had not pressed a § 107 claim in the first instance or had

waived it, or because it was unnecessary to reach a § 107

claim regardless of whether it was presented. Aviall, 543 U.S.

at 168. The Second Circuit’s decision here comes to this

Court in much the same posture on the merits as the Fifth

Circuit’s decision did. Indeed, the only difference between

them is that the Second Circuit considered one of the

gucstions reserved in Aviall.

The Second Circuit did not take up the other Aviall

questions for procedural reasons somewhat analogous to

those that resulted in the Fifth Circuit’s not reaching any

' The Fifth Circuit in turn remanded the case to the District Court for

the Northern District of Texas, which presently has motions for partial

summary judgment on these issues under advisement.

of them. In the present case, Con Edison based its First

Amended Complaint only on § 113(f)(1), on the theory that

Bedford Affiliates foreclosed a concurrent § 107 claim. Aviall

was decided after the district court below had ruled and the

partics had submitted their briefs to the Second Circuit. The

court of appeals subsequently directed the parties to file

supplemental briefs addressing the impact of Aviall upon Con

Edison’s § 113(f)(1) claim. The parties did not brief any

§ 107 issue, on the incorrect assumption that the court of

appeals’ pre-Aviall decision in Bedford Affiliates precluded

the panel from revisiting § 107. The Second Circuit’s

decision below accordingly addressed only one of the § 107

questions left open, in Aviall.” These issues remain in flux in

the Second Circuit.’

To be sure, the questions left unanswered in Aviall are

important, as was the onc the Court did decide. But that is no

reason for the Court to deviate from its ordinary course of not

deciding “‘in the first instance issues not decided below.”

? UGI effectively concedes as much. (Pet. 18.) Indeed, UGI cites the

court of appeals’ failure to reach and decide these questions as a reason

why this Court should decide them (id.), a course the Court expressly

declined to follow in Aviall. To the extent UGI also invites the Court to

review issues UGI suggests were implicitly or impliedly decided by the

court of appeals, the Court should decline that invitation as well. Cf

Aviall, 543 U.S. at 170 (“‘Questions which merely lurk in the record,

neither brought to the attention of the court nor ruled upon, are not to be

considered as having been so decided as to constitute precedents.’

Webster v. Fall, 266 U.S. 507, 511 (1925).”).

> For example, in Syms v. Olin Corp., 408 F.3d 95, 106-07 (2d Cir.

2005), the Second Circuit declined to determine whether the mle an-

nounced in Bedford Affiliates remained viable after Aviall. The parties had

not fully briefed or argued the impact of Avial/ on Bedford Affiliates, and

the court of appeals concluded that the best course was to allow the

district court to address the issue in the first instance.Jd. at 107: see also

Seneca Meadows, Inc. y. ECT Liquidating, Inc., No. 95-CV-6400L, 2006

WL 1030321, at *4 (W.D.N.Y. Apr. 20, 2006) (noting that “the waters in

this area still remain somewhat murky” in the Second Circuit).

Aviall, 543 U.S. at 168-69 (quoting Adarand Constructors,

Inc. v. Mineta, 534 U.S. 103, 109 (2001) (per curiam)).

With the judgment below coming to the Court in this ana-

lytical and procedural posture, it remains “more prudent” to

“withhold judgment on these matters.” Aviall, 543 U.S. at

170. Denial of the petition would allow Aviall itself to pro-

ceed in the normal remand course through the district court

and the court of appeals. See, e.g., Adarand, 534 U.S. at 105-

07, 110-11 (tracing the remand route followed in a case

involving a racial classification issue “of fundamental

national importance calling for final resolution by this

Court’). Such an approach likewise would allow these ques-

tions to be given “full consideration” (Aviall, 543 U.S. at 169)

by the various courts of appeals which now or soon will have

the issues before them.* Perhaps most importantly, it would

permit this Court to play its role as “‘a court of final review

- and not first view.’” Adarand, 534 U.S. at 110 (quoting Mart-

sushita Elec. Indus. Co. v. Epstein, 516 U.S. 367, 399 (1996)

(Ginsburg, J., concurring in part and dissenting in part)).

Il. NO POST-AVIALEL CIRCUIT CONFLICT

EXISTS

This Court decided Avial/ less than eighteen months ago. It

is thus not surprising that only one court of appeals—the

Second Circuit—has had an opportunity to consider the many

questions left open in Avia//, and even that court addressed

but one of them.

All of the cases UGI cites for the proposition that there is a

circuit split (Pet. 10-11) were reached before this Court’s

decision in Aviall, and four of them are currently being

* Further examination of these issues by the lower courts would be

particularly beneficial given the “miasmatic” nature of CERCLA’s pro-

visions. Commander Oil Corp. v. Barlo Equip. Corp., 215 F.3d 321, 326 .

(2d Cir. 2000).

revisited by the respective court of appeals. The questions are

sub judice before the Eighth and the Third Circuits,° and in

the briefing stage in the Seventh and the Ninth Circuits.°

Moreover, as the Second Circuit found, the cases to which

UGI points are in any event inapposite, because they “‘con-

sidered plaintiffs that [unlike Con Edison] had either been

held liable—or, because they had been sued, might immin-

ently be held liabie—under an administrative or court order

or judgment.” (Pet. 20a.)’ Finally, all but two of the post-

* Atl. Research Corp. v. United States, No. 05-3152 (8th Cir. filed Aug.

8, 2005) (argued Mar. 16, 2006); EJ. DuPont de Nemours & Co. v.

United States, No. 04-2096 (3d Cir. filed Apr. 27, 2004) (argued Apr. 17,

2006).

° N. Am. Galvanizing & Coatings, Inc. v. Metro. Water Reclamation

Dist. of Greater Chicago, No. 05-3299 (7th Cir. filed’ Aug. 8, 2005)

(argued Jan. 20, 2006); City of Rialto v. U.S. Dep't of Def., No. 05-56749

(9th Cir. filed Nov. 22, 2005); Kotrous v. Goss-Jewett Co. of N. Cal., Inc.,

No. 06-15162 (9th Cir. filed Feb. 1, 2006).

’ The Second Circuit did view its conclusion as at odds with the Ninth

Circuit’s pre-Aviall decision in Pinal Creek Group v. Newmont Mining

Corp., 118 F.3d 1298 (9th Cir. 1997), but it is unclear if that is in fact the

case. Of the eight post-Avial/ district court decisions in the Ninth Circuit,

six have ruled that Pinal Creek does not pose an obstacle to a § 107 claim

by a PRP. See the four Ninth Circuit cases cited at Pet. 28 & n.15;

Sunnyside Dev. Corp. v. Opsys U.S. Corp., No, C 05-01447 SI, 2006 WL

1128039 (N.D. Cal. Apr. 27, 2006); McDonald v. Sun Oil Co., 423 F.

Supp. 2d 1114, 1133 (D. Or. 2006). The court in Adobe Lumber, Inc. v.

Hellman thought that Pinal Creek may well preclude such a § 107 claim,

but declined to dismiss plaintiffs claim for contribution, because the court

had “difficulty imagining that the Ninth Circuit would prevent PRPs from

pursuing contribution claims for clean up costs incurred voluntarily.” 415

F. Supp. 2d 1070, 1078-79 (E.D. Cal. 2006), petition for permission to

appeal granted, No. 06-80026 (9th Cir. May 26, 2006). Only City of

Rialto v. United States Department of Defense, No. EDCV 04-00079-

VAP (SSx), 2005 U.S. Dist. LEXIS 26941 (C.D. Cal. Aug. 16, 2005),

relied on Pinal Creek to reyect a § 107 contribution claim by a PRP. City

of Rialto is on appeal to the Ninth Circuit, which will decide if Pinal

Creek ever was at odds with the ruling below and, if so, whether it should

remain so in light of Aviall.

Aviall district court decisions cited by UGI have reached the

same conclusion as the Second Circuit did here. (See Pet. 27,

28 & n.15.) The other two district courts found that they

could not reach the issue, given existing pre-Aviall precedent

analogous to Bedford Affiliates in their respective circuits.

(See Pet. 28.)

When only one court of appeals has reached any issue left

open in Aviall, there by definition can be no “split” in the

circuits, let alone one worthy of this Court’s attention at this

early juncture."

Hil. NO EXCEPTIONAL CIRCUMSTANCE SUP-

PORTS REVIEW

As shown in Parts I and II, no question left open in Aviall

was raised below, the court of appeals reached only one, and

did so sua sponte, and there is no circuit conflict. Moreover,

not even UGI asserts that any “exceptional circumstance”

warrants deviation from the Court’s settled rule of not

resolving in the first instance issues not decided below.

Aviall, 543 U.S. at 168-69. Indeed, here, as in Aviall, “the

circumstances . . . cut against resolving the § 107 claim.”

Id. at 169.”

* In light of the state of pre-Aviall law, and the posture of post-Aviall

litigation in the various circuits, the Second Circuit’s decision hardly

“risks disrupting the settled CERCLA construction in every other circuit”

and creating “nationwide uncertainty” (Pet. 10, 25). The other circuits in

any event will make their own decisions independently, just as they would

have if the Second Circuit had ruled otherwise, or not at all.

” Even if these considerations governing review on certiorari did not

weigh heavily against granting the petition, but were in equipoise, the

federal government's litigation tactics in cases in which it has been sued

as a PRP (see Pet. 22-25) would not tip the scales the other way. These

cases arise because “[mJuch of the worst pollution in the United States

emanates from facilitics owned and operated by the federal government.”

J.B. Wolverton, Sovereign Immunity and National Priorities: Enforcing

Federal Facilities’ Compliance with Environmental Statutes, 15 Harv.

We therefore do not extend this brief by responding to

petitioner’s arguments as to why the court of appeals’ ruling

on the issue it did reach was erroneous.'” We likewise do not

engage in the Alice in Wonderland exercise of defending the

Second Circuit from UGI’s attacks on analyses the court of

appeals never undertook, rationales it never embraced, or

answers it never gave to questions it never reached. (See,

e.g., Pet. 13-18 (taking the Second Circuit to task over such

issucs).) We instead confine ourselves here to a portion of

Justice Ginsburg’s dissent in Aviall:

In Key Tronic Corp. v. United States, 511 U.S. 809, 818

(1994), ail Members of this Court agreed that § 107 of

[CERCLA] “unquestionably provides a cause of action

for [potentially responsible persons (PRPs)] to seek

recovery of cleanup costs.” The Court rested that deter-

mination squarely and solely on § 107(a)(4)(B), which

allows any person who has incurred costs for cleaning

up a hazardous waste site to recover all or a portion

of those costs from any other person liable under

CERCLA.

The Key Tronic Court divided, however, on the

question whether the right to contribution is implicit in

Envtl. L. Rev. 565, 565 (1991). For that reason, when the federal govern-

ment is a polluter, it enjoys no sovereign immunity and is no different

from any other PRP under CERCLA. See, e.g., FMC Corp. v. U.S. Dep't

of Commerce, 29 F.3d 833, 840 (3d Cir. 1994).

That the government as a PRP defendant has chosen to argue that

contribution rights should be restricted is thus no more surprising, and

entitled to no more attention, than the fact that private PRPs like UGI

have done so. In fact, it may be even less remarkable if, as has been

suggested, the government’s tactics in such cases are part of a broader

litigation strategy designed to avoid paying cleanup costs altogether. See

Brief of Amicus Curiae United States Chamber of Commerce § III(B).

Raytheon Aircrafi Co. v. United States (D. Kan. Feb. 24, 2006) (No. 05-

2328 JWL), Toxics L. Rep. (BNA) 239, 245-46 (Mar. 2, 2006).

'° Should the Court grant the petition, Con Edison will rebut these

contentions fully and at length in its brief on the merits.

§ 107(a)’s text, as the majority determined, or whether

§ 107(a) expressly confers the right, as the dissenters

urged. . . . But no Justice expressed the slightest doubt

that § 107 indeed did enable a PRP to sue other covered

persons for reimbursement, in whole or part, of cleanup

costs the PRP legitimately incurred.

Aviall, 543 U.S. at 172 (Ginsburg, J., dissenting) (second

alteration in original) (footnote omitted).

We do not quote the above passage to argue that the views

there expressed commanded a majority of the Court or dis-

posed of the question the Second Circuit did decide. Rather,

we do so because the views alone suffice to refute petition-

er’s contention that the Second Circuit’s ruling on the

§ 107(a)(4){B) issue departs so far from the statutory text and

this Court’s jurisprudence that this Court must immediately

intervene to prevent other courts of appeals from consider-

ing this, and the other outstanding Avia// issues, in the

ordinary course.

CONCLUSION

The petition should be denied.

Respectfully submitted,

RICHARD W. BABINECZ WOODY N. PETERSON *