Supplemental Brief — Norcal Waste Systems, Inc. v. Abraham

Supers Court US

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OFBICE OF THE CLERK

No. 01-1187 Sense eianod

IN THE

Supreme Court of the United States

Norcac Waste Systems, INc. and Norcat WasTE SysTEMs, INC.

EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST,

Petitioners,

v.

JuLio ABRAHAM, et al.,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

Unitep States Court OF APPEALS FOR THE NINTH CIRCUIT

SUPPLEMENTAL BRIEF IN RESPONSE TO BRIEF FOR

THE UNITED STATES AS AMICUS CURIAE

JEROME B. FALK, Jr. DeBorAH S. BALLATI

Counsel of Record KAREN P. KIMMEY

BARBARA A. WINTERS FARELLA, BRAUN

Douctas A. WINTHROP & Marte, LLP

KEITH KESSLER 235 Montgomery St.

Howarb, Rice, NEMEROVSKI, San Francisco, CA 94110

CANADY, FALK & RABKIN (415) 954-4400

A PROFESSIONAL CORPORATION

Three Embarcadero Ctr., 7th FI.

San Francisco, CA 94111-4065

(415) 434-1600

PauL J. ONDRASIK, JR.

STEPTOE & JOHNSON, LLP

1330 Connecticut Ave., N.W.

Washington, DC 20005

(202) 429-3000

Counsel for Petitioner

Norcal Waste Systems, Inc.

Counsel for Petitioner

Norcal Waste Systems, Inc.

Employee Stock Ownership

Plan and Trust

STATEMENT PURSUANT TO RULE 29.6

Petitioner Norcal Waste Systems, Inc. set forth its

corporate disclosure statement at page ii of its Petition for a

Writ of Certiorari, and it has no amendments to that

statement.

ii

TABLE OF CONTENTS

Statement Pursuant To Rule 29.6 ...............

Table of Content .....<scesnkaceasee eae

Table of Cited Authorities .......cccccccccccces

A. The Government All But Concedes That

ERISA Preempts The Breach Of Fiduciary

Duty Claim. . . <ivee Gaon ee ee eeeea eens

B. ERISA Completely Preempts The Claim As

Well. .....0503 000 a eae

C. The Ninth Circuit's Complete-Preemption

Analysis Conflicts With That of Other

Circuits. ....:.606 605605 eee

Page

4

af

iii

TABLE OF CITEDAUTHORITIES

Cases

Allis-Chalmers Corp. v. Lueck, 471 U.S. 202

RS i 5S Seid eu Ca cee a eae es

Bartholet v. Reishauer A.G. (Zurich), 953 F.2d 1073

Si. Co. cUiy s 65a ave bd ses bale

Bldg. Trades Council (San Diego) v. Garmon,

es NEED 6 vb case ee esses ceneeeeas

Caterpillar, Inc. v. Williams, 482 U.S. 386 (1987)

See ee €ee eoeeenegeeeceae eee 026 8 6 6'O@ 666888 O88 8468 86 6

Dudley Supermarket, Inc. v. Transamerica Life Ins.

& Ann. Co., 302 F.3d 1 (1st Cir. 2002) ........

Franchise Tax Bd. v. Constr. Laborers Vacation Trust,

i De ce an ecsb ae seweee ome

Gieger v. Unum Life Ins. Co. of Am., 213 F. Supp.

eee re

Guardsmark, Inc. v. Blue Cross & Blue Shield,

169 F. Supp. 2d 794 (W.D. Tenn. 2001) .......

Hull v. Fallon, 188 F.3d 939 (8th Cir. 1999) ......

Kalo v. Moen Inc., 93 F. Supp. 2d 869 (N.D. Ohio

ee en ee

Little v. UNUMProvident Corp., 196 F. Supp. 2d 659

RR eer ne

Page

iv

Cited Authorities

Page

Martin v. Feilen, 965 F.2d 660 (1992) ........... 10

Met. Life Ins. Co. v. Taylor, 481 U.S. 58 (1987) ... 2

Pegram v. Herdrich, 530 U.S. 211 (2000) ........ 10

Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987) .. 4

Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (1983) ... 9

Smith vy. Dunham-Bush, Inc., 959 F.2d 6 (2d Cir.

SE. Seu sdatewkned laces ee eae 6, 7,8

Smith v. Provident Bank, 170 F.3d 609 (6th Cir

SOG cn iae st cdawabe dee cabanas 6,7

Statutes

Employee Retirement Income Security Act of 1974

© FRA, Be BS RERIND cccniscececnces 5

Labor-Management Relations Act * 1947 § 301,

SP a RU + Ho ween iakGh sh ncncineawe 3

WORM. SRDEE ioicevcciucvoss theses 2

Other Authorities

H. Comm. On Epuc. & Lasor, H. Rep. No. 93-533

(1974), reprinted in 1974 U.S.C.C.A.N. 4639 .. 5

l

The Government all but concedes that the Ninth Circuit’s

major premise—that ERISA did not preempt the ESOP

participants’ breach of fiduciary duty claim against the ESOP

fiduciaries—is wrong. Yet the Government argues that the

decision need not be reviewed because its other holding—that

the claim was not completely preempted—is correct.

The Government cites no relevant authority to support its

assertion, and it is mistaken. Both of the Ninth Circuit’s rulings

are wrong, and the issues merit review by this Court.

A. The Government All But Concedes That ERISA

Preempts The Breach Of Fiduciary Duty Claim.

The Government concedes, as it must, that ERISA compels

a plan fiduciary to “act solely in the interests of plan participants

to the extent the fiduciary is making decisions . . . subject to

ERISA’s requirements.” U.S. 12; Pet. 6, 11. ERISA preempts

any state law that would impose different standards on an ERISA

fiduciary’s investment decisions.!

Respondents’ breach of fiduciary duty claim would do just

that. It asserts that the fiduciaries managing the ESOP owed a

state law duty to them, as noteholders, to disapprove the disputed

mergers because they would imperil respondents’ payment on

the notes. However, ERISA instructs fiduciaries that their sole

concern in making investment decisions must be whether a

proposed transaction is in the best interests of a plan and its

participants. Thus, as the Government all but concedes, ERISA

must preempt any state law that would prohibit plan fiduciaries

from approving an investment transaction that their ERISA

fiduciary duties require them to approve, because they find it to

be in the best interests of the plan. U.S. 13-14 (noting conflict

1. Parts of the Government’s brief attack straw men, not contentions

we have ever made. The brief notes that when plan fiduciaries do things

like “investing in securities, leasing property, [or] lending money,”

they “are not free to ignore” generally applicable laws. U.S. 12.

ERISA does not tell plan fiduciaries how to maintain a plan’s real estate

assets or make loans, so it cannot preempt local laws that do. But ERISA

does supply the standards that govern fiduciaries’ investment decisions.

2

with regulation requiring fiduciaries “‘not [to] subordinate

the interests of the participants and beneficiaries in their

retirement income to unrelated objectives’” (quoting 29 C.F.R.

2509.94-2)).

B. ERISA Completely Preempts The Claim As Well.

The ESOP participants could have sued (and did sue) the

ESOP fiduciaries in federal court under ERISA for breaching

their ERISA fiduciary duties. Pet. 9. But the participants also

sued the fiduciaries in state court to challenge the same

investment decisions under a state-law standard. This ERISA

does not allow. Indeed, the whole point of complete preemption

is to override any such attempt by a party with ERISA standing

to challenge ERISA-regulated conduct in state court by suing

in an alternate state-law “capacity.”

Much of the Government’s brief merely recapitulates the

Ninth Circuit’s view that plaintiffs can choose between suing

in their ERISA or their state-law “capacities.” E.g., U.S. 9

(respondents “brought [their] claims in their capacities as former

shareholders . . . and current note-holders’’). Our Petition showed

the error of that view. Pet. 12-16.

The Government also asserts a novel theory, for which it

cites no relevant authority, that ERISA may preempt yet not

completely preempt a plan participant's state law claim for

breach of fiduciary duty against a plan fiduciary. Yet the

Government also recognizes the guiding principle of complete

preemption: ““Congress may so completely pre-empt a particular

area, that any civil complaint raising this select group of claims

is necessarily federal in character.’” U.S. 7 (quoting Met. Life

Ins. Co. v. Taylor, 481 U.S. 58, 63-64 (1987)). That is precisely °

what we have here: ERISA participants assert state-law claims

challenging ERISA fiduciaries’ investment decisions about plan

assets. Because ERISA exclusively defines what a fiduciary must

do and not do in managing plan assets, there is no more

compelling example of a ‘particular area” Congress has

“so completely pre-empt[ed]. . . .”

3

To support its theory that ERISA might preempt but not

completely preempt such a claim, the Government notes that,

“had the case been brought solely by the 103 [non—ESOP

participants], it clearly would not be completely preempted.”

U.S. 9. That statement is true, but unhelpful. It merely illustrates

the undisputed rule that ERISA completely preempts a claim

only if the plaintiff is a party (participant, beneficiary,

or fiduciary) whom Section 502(a) empowers to bring ERISA

claims. Franchise Tax Bd. v. Constr. Laborers Vacation Trust,

463 U.S. 1, 26-27 (1983) (“FTB”).

The Government also contends that Caterpillar, Inc. v.

Williams, 482 U.S. 386 (1987), supports its theory (U.S. 10);

it dees not. Caterpillar concerned complete preemption under

Section 301 of the Labor-Management Relations Act of 1947

(“LMRA”), which affords federal jurisdiction over any

suit for violation of a collective bargaining agreement (“CBA”).

Section 301 also completely preempts state-law claims; its

preemptive force “is so powerful as to displace entirely any

state cause of action ‘for violation of contracts between an

employer and a labor organization.’ Any such suit is purely a

creature of federal law, notwithstanding the fact that state law

would provide a cause of action in the absence of § 301.”

FTB, 463 U.S. at 23. The force of that preemption is matched

by its focus: the sole touchstone of Section 301 preemption is

whether a state-law claim requires a court to interpret a CBA.

See Caterpillar, 482 U.S. at 394-95; Allis-Chalmers Corp. v.

Lueck, 471 U.S. 202, 220 (1985).

In Caterpillar, plaintiff employees belonged to a bargaining

unit subject to a CBA; they had previously had managerial jobs

outside the CBA’s scope, under individual employment

contracts. 482 U.S. at 388-90. In suing Caterpillar in state

court for breaching the latter, they avoided relying on the CBA.

Id. at 394-95. But Caterpillar argued that the CBA superseded

their individual contracts, so that their claims required

interpretation of the CBA and were thus completely preempted

by Section 301. /d. at 390.

4

The Court disagreed. It acknowledged that plaintiffs,

as bargaining unit members, had “substantial rights under the

[CBA] and could have brought suit under § 301”; however,

“they chose not to.” Jd. at 395. The claims they did bring, for

breach of individu:ii contracts, did not “substantially depend{]

upon interpretation of the [CBA].” Jd. Caterpillar effectively

holds that Section 301 neither preempted nor completely

preempted the claims.’ It thus does not support a theory that

ERISA might preempt but not completely preempt claims by

plan participants against plan fiduciaries.

In citing Caterpillar, the Government ignores the fact that,

in passing Section 301, Congress occupied only part of the field

of workplace relations. See 482 U.S. at 396 n.10. In passing

ERISA, by contrast, Congress intended to ““establish pension

plan regulation as exclusively a federal concern.’” Pilot Life

Ins. Co. v. Dedeaux, 481 U.S. 41, 46 (1987) (citation omitted).

In fact, within the field of pension-plan regulation, Congress

especially intended to occupy the subfield of fiduciary duties.

2. The Court did note that the National Labor Relations Act

(NLRA) might preempt plaintiffs’ claims without transforming them

into claims arising under federal law and subject to removal.

482 U.S. at 397-98 & n.12. Contrary to the Government’s suggestion

(U.S. 11), that is not an example of a statute preempting yet not

completely preempting a claim brought by a plaintiff with standing to

sue under the statute. Unlike Section 301, which did not completely

preempt or preempt the claims in Caterpillar, none of the NLRA

preemption doctrines there at issue can entail complete preemption and

removal, for the simple reason that state-law claims preempted by the

NLRA cannot be heard in any court, as they concern matters committed

to the jurisdiction of the NLRB. See Bldg. Trades Council (San Diego)

v. Garmon, 359 U.S. 236, 244-45 (1957). There is no such thing as

complete-preemption removal from state court to the NLRB. As for

Section 301, Caterpillar says only that the affirmative defense that the

CBA superseded the individual contracts could not warrant removal,

although resolving that defense would require applying federal law to

interpret the CBA. 482 U.S. at 398-99. In this case, the ESOP fiduciaries

did not raise a defense requiring application of ERISA fiduciary

standards, but showed that the ESOP participants’ purported state-law

claims can actually arise only under ERISA.

5

A primary goal of ERISA was to replace a welter of

inconsistent state trust laws, whose application to pension plans

was uncertain, with a uniform set of strict federal standards.

See H. Comm. On Epuc. & Labor, H. Rep. No. 93-533 (1974),

reprinted in 1974 U.S.C.C.A.N. 4639, at 4641-46, 4649-51.

Congress thus gave federal courts exclusive jurisdiction over

claims for breach of ERISA fiduciary duties, as opposed to the

concurrent jurisdiction it afforded over claims for improper

denial of benefits (28 U.S.C. § 1132(a)), and had afforded in

the LMRA over claims for violations of CBAs (Lueck, 471 U.S.

at 209 n.5).

ERISA thus preempts any claim that would impose state-

law duties on an ERISA fiduciary when deciding how to invest

or manage plan assets. If the claim is made by a proper plaintiff,

ERISA completely preempts it. Nothing in ERISA limits the

scope of that complete preemption like Congress’ desire, in

passing Section 301, to preserve much of the States’ power to

regulate workplace relations.

C. The Ninth Circuit’s Complete-Preemption Analysis

Conflicts With That of Other Circuits.

Our Petition’s main point is that the plaintiffs in the cited

cases had distinct state-law relationships with the defendants

(bank-depositor, employer/promisor-employee/promisee)

at least as colorable as those asserted by the ESOP participants

here (former shareholder—director, noteholder-obligor).

But because those plaintiffs challenged acts done by defendants

as part of their ERISA fiduciary or administrative roles, ERISA

completely preempted their state-law claims, denying them the

right to choose the “capacity” in which to sue.

The Government disagrees, arguing that even if a state-law

claim (1) challenges an “act ... governed solely by ERISA,”

(2) is subject to a preemption defense, and (3) is brought by an

ERISA participant (4) against an ERISA fiduciary, the claim

will escape complete preemption if it is based on “state-law

rights ... the origins of which predated and which remain

independent of the rights [plaintiffs] later acquired as ESOP

6

participants.” U.S. 11. The Government thus sees no circuit split,

arguing that the claims in the cases we cite “arose from ...

relationship[s}] governed by ERISA,” not “pre-existing and

independent state-law duties.” Jd. 17.

This attempt to explain away the circuit split fails.

No Circuit has espoused the Government’s unworkable and

arbitrary “pre-existing and independent rights” rationale, and

the Second Circuit’s Smith v. Dunham-Bush opinion is flatly

inconsistent with it. The Circuits whose opinions we cite rejected

plan participants’ invocation of state-law duties not because the

duties were not “pre-existing and independent,” but because

the defendants did the acts at issue while performing ERISA

fiduciary or administrative functions.

In discussing Smith v. Provident Bank, 170 F.3d 609

(6th Cir. 1999), the Government notes plaintiff's state-law claim

“that a bank had breached a fiduciary duty under state law when

it took stock out of the plaintiff’s ERISA plan account.”

U.S. 17 (citing 170 F.3d at 612). It must then confront the holding

that “[a] claim for breach of fiduciary duty against the fiduciary

of an ERISA plan necessarily presents a federal question.”

170 F.3d at 614. To avoid that holding’s plain import, the

Government simply adds a crucial word, contending the court

“mean(t] only that a claim for breach of an ERISA fiduciary

duty ... necessarily presents a federal question.” U.S. 18.

Its reading is strained, for the very next sentence addresses

“{Plaintiff’s] state-law fiduciary duty claim.” 170 F.3d at 614

(emphasis added). In fact, the entire paragraph concerns claims

for breach of state-law duties that are recharacterized under

ERISA. /d. at 613-14.

~ Even could one read the quoted passage as the Government

urges, the conflict would remain. Provident Bank as a whole

aggressively applies complete preemption to state-law claims

for fiduciary breach. Pet. 20-22. Indeed, the case has already

become a hornbook citation in the Sixth Circuit for an

unqualified rule that ERISA completely preempts state law

claims for breach of fiduciary duty. See Gieger v. Unum Life

Ins. Co. of Am., 213 F. Supp. 2d 813, 815 (N.D. Ohio 2002);

Little v. UNUMProvident Corp., 196 F. Supp. 2d 659, 666, 672

(S.D. Ohio 2002); Guardsmark, Inc. v. Blue Cross & Blue Shield,

169 F. Supp. 2d 794, 802 (W.D. Tenn. 2001); Kalo v. Moen

Inc., 93 F. Supp. 2d 869, 873 (N.D. Ohio 2000).

Nor does anything in Provident Bank suggest that the key

issue is the vintage of the state-law relationship, i.e., whether it

“pre-dated” (U.S. 11) that under ERISA. Nor do the opinions

we cited from the Third, Seventh, or Eighth Circuits mention

this supposedly vital distinction. Even the Ninth Circuit never

suggested that the age of respondents’ state-law rights is what

saved them from preemption. And Smith v. Dunham-Bush, Inc.,

959 F.2d 6 (2d Cir. 1992), squarely refutes any theory that a

“pre-existing and independent rights” exception might

harmonize the cases cited in our Petition. The state-law

relationships in Dunham-Bush, employment and an oral

promise, both predated—the former by decades—Smith’s

participation in the ERISA plan (id. at 7), yet ERISA completely

preempted his claims. The facts of Bartholet v. Reishauer A.G.

(Zurich), 953 F.2d 1073 (7th Cir. 1992) (Easterbrook, J.),

are basically the same.

Viewed in light of the “pre-existing rights” hypothesis,

Dunham-Bush and this case have very similar facts. In each,

plaintiff(s) had economic rights from a decades-long

employment relationship—respondents’ stock, and Smith’s

British pension. Their employers asked them to trade those rights

for a set of new ones including (1) participation in an ERISA

plan and (2) a promise of other funds (respondents’ promissory

notes, and Smith’s promised additional benefits). Each brought

state-law claims for breach of the promise (and in this case,

a penumbral fiduciary relationship); defendants argued that the

claims were completely preempted because they sought to apply

state law to ERISA activities (making fiduciary investment

decisions, and calculating benefits).

The Second Circuit agreed, noting the need for uniform

plan administration, which requires courts to recharacterize

8

under ERISA’s exclusive civil-enforcement scheme any claim

that would apply state law to benefit claims. 959 F.2d at 10-11;

id. at 12 n.5 (noting “particular danger to ERISA’s policy of

uniform regulation should a plan be subject to inconsistent or

conflicting substantive [state] laws’’). The court conceded that

Smith’s state-law relationship had not only predated but Jed to

the ERISA relationship. But the need for uniformity made that

a temporal distinction without a difference: “Although Smith

may have been induced to relocate ... [by] Dunham-Bush’s

unenforceable oral assurance, that does not significantly

distinguish him from other ... plan participants seeking to

supplement their pension plans with orally promised benefits.”

Id. at 10. The facts of the case thus belie the Government’s

contention that “the state-law rights asserted in Dunham-Bush,

unlike those in this case, arose directly from the employee’s

status as a plan participant.” U.S. 19. Smith’s state-law rights

arose not from his status as plan participant, but from his

pre-existing status as employee, and from the employer’s prior

promise.

Nor can the Government’s “pre-existing rights” theory

survive scrutiny on its merits. When plan participants sue in

alternate capacities, using state law to impose on plan

administrators and fiduciaries duties beside those imposed by

ERISA, complete preemption ensures that their claims are

recharacterized under ERISA’s carefully balanced civil-

enforcement scheme and resolved by federal courts experienced

in applying that scheme. This spares plan fiduciaries from having

to satisfy multiple duties when making investment decisions,

and plan administrators from having to balance ERISA and state

law in processing benefit claims.

Complete preemption thus secures the efficiency of uniform

administration and, by minimizing their exposure to liability,

preserves the willingness of employers to form, and individuals

to manage, ERISA plans. A “pre-existing rights” exception

would harm those goals by requiring plan administrators and

fiduciaries to decide, case by case, when participants’ state-law

rights arose sufficiently prior to and independently of their

9

participation in a plan to entitle them to special treatment.

That enterprise would serve no useful purpose, and its costs are

obvious. See Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 107-08

(1983) (“[t]he administrative impracticality of permitting

mutually exclusive pockets of federal and state jurisdiction

within a plan is apparent”).

Those costs are most acute in cases, like this, that threaten

personal liability for plan fiduciaries. A “pre-existing rights”

exception would burden plan administrators by precluding

uniformity in handling benefit claims, but the resultant problems

could usually be resolved: some participants would receive

greater benefits under state law, but the plan could still function

(if it was not bankrupted). But the problems for plan fiduciaries

in deciding how to invest and manage plan assets would often

be, as in this case, irresolvable.

That is because a fiduciary must make binary investment

choices on behalf of a plan as a whole. If ERISA dictates one

choice, which best serves the interests of all participants gua

participants, but state law dictates the opposite choice with

regard to a subset of participants-with-preexisting-state-law-

rights, the fiduciary faces a dilemma. This case is a fine example:

the ESOP fiduciaries could not approve the disputed mergers

on behalf of the non-noteholder participants and simultaneously

disapprove them on behalf of the noteholder participants.

They could only cause the ESOP to do one thing. Whichever

they chose, they would be personally liable under ERISA or

state law. That outcome is as inequitable for them as it is

unworkable for the plan.

Finally, in trying to harmonize the other cases cited in our

Petition, the Government asserts that the claims therein arose

more “directly” from the ERISA than the state-law relationships.

U.S. 19-20. These passages make no point not made by

respondents and the Ninth Circuit.? The one new opinion the

3. In discussing Hull v. Fallon, 188 F.3d 939 (8th Cir. 1999), the

Government does make a telling aside: “Nor did Hull question the Eighth

(Cont'd)

10

Government cites in fact reinforces our view. See Dudley

Supermarket, Inc. v. Transamerica Life Ins. & Ann. Co.,

302 F.3d 1 (1st Cir. 2002) (ERISA completely preempts claims

against fiduciary investment advisor) (cited in U.S. 8 n.3).

After noting that ERISA would completely preempt any

state law claim that “in fact charged Transamerica with

breach of fiduciary duty while acting as an ERISA fiduciary”

(302 F.3d at 3 (emphasis added)), the court stated its

methodology in terms that squarely contradict the Ninth Circuit’s

approach here: “A court must [determine] whether an entity

acted in a fiduciary capacity with respect to the alleged

wrongdoing not on the basis of a plaintiff’s characterization of

the activity but rather on the basis of the functions the entity

performed and its relationship to the plaintiff.” /d. at 5.

The Ninth and Fifth Circuits’ opinions thus conflict with

those cited in our Petition, which should be granted.

(Cont'd)

Circuit’s prior recognition in Martin v. Feilen, 965 F.2d 660, 667 (1992)

... that fiduciaries of an ESOP have both duties under ERISA and state-

law duties as corporate stockholders.” U.S. 19. This misreads Feilen,

which in fact carefully applies to ESOP fiduciaries the principle of

Pegram v. Herdrich, 530 U.S. 211 (2000): one may act at some times as

an ERISA fiduciary and at others in a different capacity, but each act is

subject to ERISA or to state law, not both. Pet. 13-14. The Feilen

defendants were directors, controlling shareholders, and fiduciaries of

the ESOP of a failed company. 965 F.2d at 662-64. The key issue was

whether their ERISA fiduciary duties applied to their acts as directors

or shareholders. /d. at 665. The Eighth Circuit’s analysis echoes that of

our Petition: after noting that “‘ERISA does not prohibit an employer

from acting in accordance with its interests as employer when not

administering the plan or investing its assets,” it held that ERISA

fiduciary duties “attach only to transactions that involve investing the

ESOP '’s assets or administering the plan.” Id. at 665-66 (citations

omitted; emphases added). In reviewing the record, the court carefully

avoided holding that defendants had had both ERISA and state-law

fiduciary duties in any one transaction. E.g., id. at 666-67.

Respectfully submitted,

JEROME B. FALK, JR.

Counsel of Record

BARBARA A. WINTERS

Douc.Las A. WINTHROP

KEITH KESSLER

Howarp, Rice, NEMEROVSKI,

CANADY, FALK & RABKIN

A PROFESSIONAL CORPORATION

PAuL J. ONDRASIK, JR.

STEPTOE & JOHNSON, LLP

Counsel for Petitioner

Norcal Waste Systems, Inc.

DEBORAH S. BALLATI

KAREN P. KIMMEY

FARELLA, BRAUN & MARTEL

Counsel for Petitioner

Norcal Waste Systems, Inc.

Employee Stock Ownership

Plan and Trust