Opposition Brief — Dico, Inc. v. United States

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No. 01-1223

Jn the Supreme Court of the Gnited States

APR Lea Alby

Dico, INC., PETITIONER

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

THEODORE B. OLSON

Solicitor General

Counsel of Record

THOMAS L. SANSONETTI

Assistant Attorney General

GREER S. GOLDMAN

KATHERINE J. BARTON

JOHN T. STAHR

Attorneys

Department of Justice

Washington, D.C. 20530-0001

(202) 514-2217

QUESTIONS PRESENTED

Section 107(a) of the Comprehensive Environmental

Response, Compensation, and Liability Act (CERCLA)

provides that persons responsible for hazardous sub-

stance contamination are liable for “all costs of removal

or remedial action incurred by the United States

Government * * * not inconsistent with the national

contingency plan.” 42 U.S.C. 9607(a). The questions

presented are:

1. Whether the court of appeals correctly concluded

that the district court did not abuse its discretion in

denying petitioner’s motion to exclude the testimony of

an expert witness under Federal Rule of Evidence 702.

2. Whether the court of appeals correctly ruled that

the United States was entitled to recover: (a) the costs

it incurred in overseeing remedial activities conducted

by private parties; (b) its indirect costs of the remedial

action; and (c) litigation expenses associated with the

remedial action.

(I)

et a a a

i LLL LED

TABLE OF CONTENTS

Opinions below ..........-ssssssssseeeeeeessssnsnnnnsnsseecsenensnnennnnnnnss ee eee

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TABLE OF AUTHORITIES

Cases:

Atlantic Richfield Co. v. American Airlines, Inc.,

O8 F.3d 564 (LOth Cir. 1996) ......s.seceseseeneersrsenenennenensnnensncenens

B.F. Goodrich v. Betkoski, 99 F.3d 505 (2d Cir.

1996), cert. denied, 524 U.S. G26 (1998) .....cccceeseeeesesereenens

Bell Petroleum Servs., Inc., In re, 3 F.3d 889

(Bth Cir. 1993) ......cccsceseeceereeseeeeernsnssnensenennees ssiesiaisaniaanauenuaindion

Black v. Cutter Labs., 351 U.S. DOP (1956) ......ccceeeeeeeeeeeeees

Breidor v. Sears, Roebuck & Co., 722 F.2d 1134

(Bd Cir. 193) ........0-scnscrsessensnonsseosesasacrsssecsnsssnsssssssnensossonsneoseees

Daubert v. Merrell Dow Pharms., Inc., 509 USS.

BETO) CBGIB) ..aencccesosccceecaracsonorsceessnsenncncassesenosacscanssascnsnaessasesecennes

FEA v. Algonquin SNG, Inc., 426 U.S. 548 (1976) ......-+.

Hose v. Chicago N.W. Transp. Co., 70 F.3d

OGS (Btbs Cir. 1995) .....-.cecssececeesesessnencssnsssnsnsnensnsnsusrorennscscorsess

Jones v. Otis Elevator Co., 861 F.2d 655 (11th Cir.

SE eanasemnidinnenenenissonssnnseeniseenenansanettiensiannnlenenenaene

Key Tronic Corp. Vv. United States, 511 U.S. 809

MITT cinnindanneeiammanntanensecnsseamnacsennennaincnsnatansanennaneens

Kumho Tire Co. v. Carmichael, 526 U.S. 137

CI ccccuscthcgnsenneecnncennsenenvestiiinasnieniemnineneatenesnnanansnentnneeerr

Mistretta v. United States, 433 U.S. 361 (1989) .....---.e0+

National Cable Television Ass’n v. United States,

ALS U.S. 386 (1974) .n.nceccsscassesesssessnsesersnsensnsessnsnsessnsnconsnsonsnees

New York v. Shore Realty Corp., T59 F.2d

10332 (2d Cir. 1985) .......ssscececsscsssssersessenencasenencanensnsensssnnensnensess

(IIT)

IV.

Cases—Continued: Page

Pennsylvania v. Union Gas Co., 491 U.S. 1 (1989) ......... 2

Skinner v. Mid-America Pipeline Co., 490 U.S. 212

(IFIED ennccscnsinisssansinnensniiienelahaiiteicninniiianashanecntnicnntinnninaninieitahicsinnmicnitann 13

Stewman v. Mid-South Wood Prods. of Mena,

Inc., 993 F.2d G46 (Gth Cir. 1993) 222........cc.ccccssscssrsesssscsassess

United States v. Bestfoods, 524 U.S. 51 (1998) 0... 2.3

United States v. Chapman, 146 F.3d 1166 (9th Cir.

REID <csvsssinsinseenniasticnesidileiniaiitetcnteasisstiinnhediaiiadanibtanhdpiihsaianaaesaiiney 17

United States v. Chromalloy Am. Corp., 158 F.3d

Is CR FD aiatitcitcssnitanieesceinitesiamnntsoniiasiiiessicinn 16

United States v. Hardage, 750 F. Supp. 1460 (W.D.

Okla. 1990), aff’d in part and rev’d in part on other

grounds, 982 F.2d 1436 (10th Cir. 1992), cert.

SE TD TE. BE CRD eee ccencitnneatintenneiitesinsinrcasions 16

United States v. Hyundai Merchant Marine, 172

F.3d 1187 (9th Cir.), cert. denied, 528 U.S. 963

i SRS eS CE SEER ONTEN SNP DOE NURSERY ESCM Ee SEN TaN 15

United States v. L.E. Cooke Co., 991 F.2d 336 (6th

EE rey eaaheeaspadien lcsendatsar teats caasetlceaiaiiaeaesldipiiaalaedeenasaeaiuanamaabies 10

United States v. Lowe, 118 F.3d 399 (5th Cir.

TED ciccculibccticilan behics tacbehsncese sche nahriapiedionssaataadasicneiisciabdialicdstiaibadilisatiines 14, 15

United States v. Northeastern Pharm. &

Chem. Co., 810 F.2d 726 (8th Cir. 1986), cert.

I Ch SUED wiiihdaceeetdeidcnehcabineteaenictineniced 4-5

United States v. Ottati & Goss, 900 F.2d 429 (1st

an A, SI secre raieaseaecbisaeeasiiechiatcancailalgheiaeaaeilaldasalabaiaaiacs 16

United States v. R.W. Meyer, Inc., 889 F.2d 1497

(6th Cir. 1989), cert. denied, 494 U.S. 1057 (1990) ........... 4,16

United States v. Rohm & Haas Co., 2 F.3d 1265

Ga, TID siceitcschcincniistntiinesietcplasiinianiiei 11, 12, 16

Weiss v. United States, 510 U.S. 163 (1994) oe 13

Statutes, regulations and rule: Page

Comprehensive Environmental Response, Compen-

sation and Liability Act, 42 U.S.C. 9601 et seq. «0... 2

§ 101(23), 42 U.S.C. 9601(28) .........cccscscererseeeesees 3,4, 12, 14

§ 101024), 42 U.S.C. BOOZE) secicssccrcaissrsessssscssresesesessanesens 4,14

§ 101(25), 42 U.S.C. QGO1(2D) ........ceecscccsseccerecessssssseesonsnse 4,17

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§ 105, 42 U.S.C. GODS ccccrcasssrssessccssssssccsssocisssseorssesessasenssaass 3

§ 106(a), 42 U.S.C. 9606) .....cccrcorscsssscccsscerenssssssssssssseerens 3

§ 107, 42 U.S.C. QGOT ....crrccccrsrscccsdacccoscsssecsrcssscassrssscssvesssnes 6

§ 107(a), 42 U.S.C. 9607 (a) ...scsccerercrereressesestssecenerscssssseeees 3,7

§ 107(a)(4)(A), 42 U.S.C. 9607(a)(4)(A) oneererererereeeees 3, 12,17

§ 107(a)(4)(B), 42 U.S.C. 9607(a)(4)(B) ..eccsesserereerereneee 17

Independent Offices Appropriation Act, 1952, ch. 376,

Tit. 5, GB Stat. 2O0 2..ncncacasssronsasssosasnsnsorcssanasscesransesnssssonsossassass 12

Superfund Amendments and Reauthorization Act

of 1986, Pub. L. No. 99-499, 100 Stat. 1613 0... eee 2

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Exec. Order No. 12,580, 3 C.F.R. 193 (1987) .......cccceeeeeeees 2

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In the Supreme Court of the Cited States

No. 01-1223

Dico, INC., PETITIONER

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 2a-29a)

is reported at 266 F.3d 864. The district court’s order

on liability (Pet. App. 45a-79a) and its order on

response costs (Pet. App. 32a-44a) are unreported.

JURISDICTION

The judgment of the court of appeals was entered on

September 19, 2001. A petition for rehearing was de-

nied on November 27, 2001 (Pet. App. la). The petition

for a writ of certiorari was filed on February 19, 2002.

The jurisdiction of this Court is invoked under 28

U.S.C. 1254(1).

(1)

STATEMENT

The United States brought this action against peti-

tioner Dico, Inc., under the Comprehensive Environ-

mental Response, Compensation, and Liability Act

(CERCLA), 42 U.S.C. 9601 et seq., to recover the gov-

ernment’s costs in responding to petitioner’s release of

hazardous substances that caused groundwater con-

tamination and threatened the public water supply of

Des Moines, lowa. The United States District Court

for the Southern District of lowa ruled that petitioner

was liable for the government’s response costs and

entered judgment in the amount of $4,129,426.67. See

Pet. App. 43a. The court of appeals affirmed. /d. at 3a.

1. Congress enacted CERCLA “in response to the

serious environmental and health risks posed by indus-

trial pollution.” United States v. Bestfoods, 524 U.S. 51,

55 (1998). That statute, which Congress revised and

expanded through the Superfund Amendments and

Reauthorization Act of 1986 (SARA), Pub. L. No. 99-

499, 100 Stat. 1613, “grants the Preside>t broad power

to command government agencies and private parties

to clean up hazardous waste sites.” Key Tronic Corp. v.

United States, 511 U.S. 809, 814 (1994). CERCLA

“both provides a mechanism for cleaning-up hazardous

waste sites, and imposes the costs of the cleanup on

those responsible for the contamination.” Pennsylva-

nia v. Union Gas Co., 491 U.S. 1, 7 (1989) (citations

omitted); see Bestfoods, 524 U.S. at 55-56 & n.1.

CERCLA provides the President (acting primarily

through the Environmental Protection Agency (EPA),

see Exec. Order No. 12,580, 3 C.F.R. 193 (1987)) with

several alternatives for cleaning up hazardous sub-

stance sites. Under Section 104, EPA can itself under-

take response actions, using the Hazardous Substances

ee ©

Superfund. See 42 U.S.C. 9604; see also 26 U.S.C. 9507;

Bestfoods, 524 U.S. at 55. In such cases, EPA can

recover its response costs from responsible parties

under Section 107(a) through a cost recovery action.

42 U.S.C. 9607(a). Alternatively, under Section 106(a),

EPA can seek, through an administrative order or a

request for judicial relief, to compel the responsible

parties to undertake response actions, which the gov-

ernment then monitors. See 42 U.S.C. 9606(a).

Section 107 of CERCLA, 42 U.S.C. 9607, “sets forth

the scope of the liabilities that may be imposed on

private parties and the defenses that they may assert.”

Key Tronic, 511 U.S. at 814. Under Section

107(a)(4)(A), responsible parties are liable for “all costs

of removal or remedial action incurred by the United

States Government * * * not inconsistent with the

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

The national contingency plan (NCP), which EPA

promuigated as a regulation pursuant to Section 105 of

CERCLA, 42 U.S.C. 9605, prescribes methods for

investigating the nature and extent of releases or

threatened releases, and for planning and selecting

response actions. See 40 C.F.R. Pt. 300.

Section 101(23) of CERCLA defines the terms “re-

move” and “removal” to include, among other things:

the cleanup or removal of released hazardous sub-

stances from the environment, * * * such actions

as may be necessary to monitor, assess, and evalu-

ate the release or threat of release of hazardous

substances, * * * or the taking of such other

actions as may be necessary to prevent, minimize, or

mitigate damage to the public health or welfare or

to the environment, which may otherwise result

from a release or threat of release.

42 U.S.C. 9601(23). Section 101(24) defines the terms

“remedy” and “remedial action” to include, among other

things:

those actions 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 * * *.

The term includes, but is not limited to, such actions

at the location of the release as storage, confine-

ment, * * * cleanup of released hazardous sub-

stances * * *, and any monitoring reasonably

required to assure that such actions protect the

public health and welfare and the environment.

42 U.S.C. 9601(24). The terms “remove,” “removal,”

“remedy,” and “remedial action” describe “response”

actions, and all such terms “include enforcement activi-

ties related thereto.” CERCLA § 101(25), 42 U.S.C.

9601(25). eee

In establishing that a responsible party is liable for

response costs, the United States need not prove that

the party is the only source of the contamination or that

the releases occurred in any particular amount. See,

e.g., Stewman v. Mid-South Wood Preds. of Mena, Inc., -

993 F.2d 646, 649 (8th Cir. 1993). The responsible

party’s liability to the government is joint and several,

except to the extent that a defendant can establish, by a

preponderance of the evidence, that there is a “rea-

sonable basis” on which to apportion liability or to es-

tablish distinct harms. See, e.g., Jn re Bell Petroleum

Servs., Inc., 3 F.3d 889, 902-903 (5th Cir. 1993); United

States v. R.W. Meyer, Inc., 889 F.2d 1497, 1507 (6th Cir.

1989), cert. denied, 494 U.S. 1057 (1990); United States

v. Northeastern Pharm. & Chem. Co. (NEPACCO), 810

F.2d 726, 732 n.3 (8th Cir. 1986), cert. denied, 484 U.S.

848 (1987).

2. The United States brought this action against

petitioner to recover the government’s response costs

associated with the remediation of groundwater con-

taminated by trichloroethylene (TCE) that was re-

leased from petitioner’s manufacturing facility. Pet.

App. 3a. The government specifically sought recovery

of costs associated with “Operable Unit 1” (OU-1) of the

Des Moines TCE Site. Jd. at 3a, 5la-58a. Following a

bench trial, the district court entered findings of fact

and conclusions of law holding petitioner liable for the

government’s response costs. Jd. at 45a- 75a. The court

thereafter concluded that the government was entitled

to the full amount of costs that it had requested. /d. at

32a-44a,

The district court based its liability ruling on exten-

sive scientific evidence submitted at trial respecting the

migration of TCE from petitioner’s facility into the

groundwater supply. That ruling sets out findings of

facts describing petitioner’s use and release of TCE,

Pet. App. 46a-51la, EPA’s discovery and investigation of

the contamination, id. at 5la-53a, and the scientific evi-

dence linking petitioner’s activities with the ground-

water contamination, id. at 54a-58a. Based on those

findings, the district court concluded that petitioner’s

spillage and disposal of TCE caused the groundwater

contamination that led to the government’s incurrence

of response costs. /d. at 58a-75a. The district court

specifically rejected petitioner’s contention that scien-

tific testimony from the government’s expert witness,

John Robertson, should have been excluded as insuffi-

ciently reliable under Daubert v. Merrell Dow Pharma-

ceuticals, Inc., 509 U.S. 579 (1993). See Pet. App. 64a-

70a. To the contrary, the court “f[ound] his testimony

to be both accurate and persuasive.” Jd. at 70a. See

also id. at 58a (finding that the government’s expert

witness “presented logical, well-supported theories of

liability” while petitioner’s expert witness was “far less

credible”).

The district court ruled that the government was

entitled to $4,129,426.67 in response costs based on the

government’s submission of affidavits and other docu-

ments setting out its expenditures for the response

activities associated with the OU-1 portion of the Des

Moines TCE Site. See Pet. App. 33a-38a. Relying ona

prior ruling that constituted law of the case, the district

court rejected petitioner’s contention that oversight

costs, indirect costs, and costsof attorneys’ time are not

recoverable under Section 107 of CERCLA as a matter

of law. Jd. at 39a. The district court further concluded

that petitioner had failed to produce admissible evi-

dence to counter the government’s cost submissions or

otherwise show that they were inaccurate. /d. at 39a-

43a.

3. The court of appeals affirmed the district court’s

rulings on liability and response costs in their entirety.

Pet. App. 2a-29a. The unanimous court rejected all of

petitioner’s numerous challenges to the district court’s

decisions. Jbid. Only two of the court of appeals’

rulings are relevant to the petition for writ of certiorari.

First, the court of appeals held that the district court

had properly denied petitioner’s motion, under Dau-

bert, to exclude the testimony of the United States’

expert witness. Pet. App. 6a-12a. The court of appeals

found that petitioner “has not pointed to any deficiency

in the reliability of Robertson’s testimony that would

lead us to conclude the District Court abused its discre-

tion.” Jd. at 12a. Rather, petitioner’s objections merely

“amount to an argument that the District Court should

(

have given more weight to [its] expert’s interpretation

- of the data at issue.” /d. at lla-12a.

Second, the court of appeals rejected petitioner’s

contentions that Section 107(a) of CERCLA does not

authorize the government to recover certain categories

of response costs that were included within the district

court’s award. The court specifically concluded that

Section 107(a) entitled the government to recovery of:

(a) $730,060.74 in government oversight costs for reme-

dial actions conducted by responsible persons at the

government’s direction; (b) $508,284.76 in indirect costs,

such as overhead expenses of the Superfund program,

attributable to the remedial actions at the site; and (c)

$370,453.57 in costs of attorneys’ time and other litiga-

tion expenses associated with recovering response costs

at the site. Pet. App. 20a-27a.

ARGUMENT

The court of appeals correctly rejected petitioner's

challenges to the district court’s exercise of discretion

in admitting expert testimony and to its determination

of recoverable categories of CERCLA response costs.

The challenged rulings are consistent with established

law, do not conflict with any decision of this Court or

another court of appeals, and do not present issues

otherwise warranting this Court’s review.

1. Petitioner claims (Pet. 12-21) that the court of

appeals erred in finding that the district court acted

within its discretion in admitting the testimony of the

United States’ expert witness. Petitioner does not

contend that the court of appeals’ decision conflicts with

any decision of this Court of any other court of appeals.

Instead, petitioner seeks review based on a fact-specific

challenge to the district court’s exercise of discretion in

this particular case. That challenge plainly does not

present an issue of general importance warranting

review by this Court. In any event, the court of appeals

properly affirmed the district court’s decision.

In determining the admissibility of expert witness

testimony under Fed. R. Evid. 702, the district court

must ensure that scientific or other technical testimony

is relevant and reliable. Daubert, 509 U.S. at 589. The

district court must specifically determine whether the

expert “is proposing to testify to (1) scientific knowl-

edge that (2) will assist the trier of fact to understand

or determine a fact in issue.” /d. at 592. “This entails a

preliminary assessment of whether the reasoning or

methodology underlying the testimony is scientifically

valid and of whether that reasoning or methodology

properly can be applied to the facts in issue.” Jd. at 592-

593. The district court has “considerable leeway” in

deciding how to determine the reliability of expert

testimony, and its ruling on whether to permit expert

testimony is reviewed for an abuse of discretion. See

Kumho Tire Co. v. Carmichael, 526 U.S. 1387, 152

(1999).

In this case, the district court correctly concluded

that the expert testimony clearly exceeded the Daubert

threshold. See Pet. App. 66a. The government’s ex-

pert applied established and accepted scientific con-

cepts and methodologies to the issues in dispute. /bid.

Petitioner challenges the reliability of the government

expert’s conclusions, but the district court expressly

found the government’s expert “presented logical, well-

supported theories of liability,” while petitioner’s

expert was “far less credible.” Jd. at 58a. Indeed, the

arguments that petitioner sets out in its request for

review demonstrate that petitioner’s supposed Daubert

challenge simply “amount{s] to an argument that the

District Court should have given more weight to

[petitioner’s] expert’s interpretation of the data at

issue.” 7d. at lla-12a.

a. Petitioner contends that Robertson programmed

his computer model to exclude the possibility of con-

tamination from properties north of petitioner’s manu-

facturing facility and that the court of appeals improp-

erly failed to address that error by wrongly concluding

that Robertson’s computer model did not form the basis

for his conclusion that TCE contamination originated

from petitioner’s property. Pet. 138-14. Petitioner

is mistaken. As the district court correctly found,

Robertson properly accounted for flowage from the

north by programming it into the model as recharge or

rainfall. Pet. App. 66a. Furthermore, the court of

appeals correctly recognized that Robertson did not use

that model to support his opinion that petitioner caused

at least some of the contamination. /d. at 8a. Rather,

he used that model to support his opinion on the per-

centage of contamination for which petitioner was

liable, in order to determine whether liability could be

apportioned between petitioner and other parties. /d.

at 62a n.1. Petitioner did not appeal the district court’s

ruling that liability was not divisible, and the court of

appeals correctly concluded that Robertson’s use of the

computer model was immaterial to petitioner’s appeal.

Indeed, the court of appeals properly rejected in its

entirety petitioner’s claim that Robertson had failed to

consider whether the contamination came wholly from

north of petitioner’s property, finding that Robertson’s

testimony “shows that he considered each piece of data

that [petitioner] alleges he ignored.” Jd. at 8a.

b. Petitioner wrongly contends that Robertson’s

opinion—that “dense non-aqueous phase liquid”

(DNAPL) beneath petitioner’s property provided the

source of continuing high concentrations of TCE—was

not credible. Pet. 15-16; see Pet. App. 54a, 68a

(describing the significance of DNAPL). The district

court correctly found that, in one test sample, DNAPL

was found in concentration levels of about one percent

which, under then-current professional standards,

indicated that DNAPL was present. /d. at 64a. The

court of appeals properly refused to disturb the district

court’s determination, additionally noting that Robert-

son’s conclusions regarding the presence of DNAPL in

the soil were supported by tests run by petitioner’s own

consultant and were consistent with that consultant’s

conclusion that DNAPL was probably present. /d. at

10a-11a.

c. Petitioner also asserts that data from deep-soil

boring samples were insufficient to support Robert-

son’s conclusion that there was continuous contamina-

tion from the soil surface to the groundwater. Pet. 18-

19. That assertion, even if true, does not support peti-

tioner’s claim that Robertson’s testimony should have

been excluded. Both the district court and the court of

appeals found that Robertson did not rely on those

borings to support his opinion that releases from peti-

tioner’s operations contributed to the groundwater

contamination. Pet. App. 10a, 69a. -The district court

concluded that the government established causation

even in the absence of the testimony on the deep soil

borings. /d. at 69a. Furthermore, the court of appeals

correctly held that petitioner’s challenges to Robert-

son’s conclusions went to credibility and not to admissi-

bility and therefore were matters for the trier of fact to

decide. Jd. at 10a. See, e.g., Hose v. Chicago N.W.

Transp. Co., 70 F.3d 968, 974 (8th Cir. 1995); United

States v. L.E. Cooke Co., 991 F.2d 336, 342 (6th Cir.

1993); Jones v. Otis Elevator Co., 861 F.2d 655, 663

ple Salat bs ‘“

(11th Cir. 1988); Breidor v. Sears, Roebuck & Co., 722

F.2d 1134, 1138-1139 (3d Cir. 1983).

d. Petitioner improperly seeks to challenge the

admissibility of Robertson’s expert opinion regarding

the penetration of TCE from sludge spread on the

ground. Pet. 16-18. Petitioner argues that Robertson’s

opinion was contradicted by petitioner’s expert and

that Robertson offered no data for his conclusion that

TCE penetrated the degreasing vat and concrete con-

tainment pit to contaminate the soil below. See ibid.

Petitioner did not raise those issues in its Daubert

challenge in the court of appeals. Instead, petitioner

simply contended that the United States failed to meet

its burden of proving that TCE from petitioner's

operations contaminated the soil, a question it does not

ask this Court to consider. See Pet. App. 15a-18a. In

any event, the court of appeals correctly concluded that

record evidence contradicted the testimony of peti-

tioner’s expert regarding the penetration of TCE into

the soil and that petitioner did not demonstrate that the

district court clearly erred in crediting Robertson’s

testimony over the conflicting testimony of petitioner’s

expert. Jd. at 17a-19a.

9 Petitioner contends (Pet. 22-29) that the court of

appeals’ “imposition of indirect and oversight costs” in

this case conflicts with the Third Circuit’s decision in

United States v. Rohm & Haas Co., 2 F.3d 1265 (1993).

Petitioner is mistaken. The court of appeals disagreed

with the Third Circuit’s analytical approach to over-

sight costs, but it determined that this case presented a

distinguishable issue and that the same result would

obtain in this case, in any event, under the Third Cir-

cuit’s analysis. Pet. App. 21a-24a. The court of appeals

also correctly rejected petitioner’s arguments respect-

ing recovery of indirect costs and litigation expenses,

id. at 24a-26a, and those rulings do not present any

basis for alleging a conflict among the courts of appeals.

a. CERCLA entitles the government to collect

“all costs of removal or remedial action incurred by

the United States Government * * * not inconsistent

with the national contingency plan.” CERCLA §

07(a)(4)(A), 42 U.S.C. 9607(a)(4)(A) (emphasis added).

he Third Circuit nevertheless ruled in Rohm & Haas

that CERCLA’s definition of a “removal” action, see

CERCLA § 101(23), 42 U.S.C. 9601(23) (set out at p. 3,

supra), does not include government oversight of a

private party’s removal activities. That court conclud-

ed that the courts should interpret the term “removal”

in light of the so-called “clear statement” doctrine

arising from National Cable Television Association v.

United States, 415 U.S. 336 (1974). The Third Circuit

held, based on its reading of National Cable, that

Congress was required to clearly state that oversight

costs are recoverable, and that “ary ambiguity must be

resolved in favor of the defendants.” 2 F.3d at 1275.

Applying that standard, Rohm & Haas held that

CERCLA’s definition of “removal” does not include

EPA oversight of a private party’s removal actions. /d.

at 1278."

1 The Third Circuit’s decision reflects an-expansive view of

National Cable that this Court has not embraced. In National

Cable, this Court addressed the Independent Offices Appropria-

tion Act, 1952, ch. 376, Tit. 5, 65 Stat. 290, which authorized the

heads of federal agencies to prescribe fees for “any work, service

. . . benefit, . . . license, . . . or similar thing of value”; and pro-

vided that the fee was “to be fair and equitable taking into consid-

eration direct and indirect cost to the Government, value to the

recipient, public policy or interest served, and other pertinent facts

. .” 415 U.S. at 337 (quoting statute). The Court held that, “to

avoid constitutional problems” of improper delegation of taxing

The court of appeals in this case “disagree[d] with the

Third Circuit’s analysis.” Pet. App. 23a. It noted that

the National Cable case involved the FCC’s attempt,

without specific congressional authorization, to impose

user fees on parties regulated by the agency that were

in the nature of tax assessments. See ibid. The court

correctly recognized that the principle articulated in

National Cable does not apply to a liability statute,

such as CERCLA, that is expressly “designed to make

parties responsible for introducing hazardous waste

into the environment pay for cleaning up the messes

they have created.” Ibid. The court of appeals noted

authority, it was necessary to construe the Act narrowly, to permit

fees based solely on “value to the recipient.” Jd. at 342-344. Since

then, this Court has limited the application of National Cable to

the specific context of potentially unconstitutional grants of reve-

nue generating authority. See Skinner v. Mid-America Pipeline

Co., 490 U.S. 212, 224 (1989) (National Cable “stand[s] only for the

proposition that Congress must indicate clearly its intention to

delegate to the Executive the discretionary authority to recover

administrative costs not inuring directly to the benefit of regulated

parties by imposing additional financial burdens, whether charac-

terized as ‘fees’ or ‘taxes,’ on those parties.”); Mistretta v. United

States, 488 U.S. 361, 373 h.7 (1989) (citing National Cable in

stating that “{iJn recent years, our application of the nondelegation

doctrine principally has been limited to the interpretation of

statutory texts, and, more particularly, to giving narrow construc-

tions to statutory delegations that might otherwise be thought to

be unconstitutional”); FEA v. Algonquin SNG, Inc., 426 U.S. 548,

560 n.10 (1976) (National Cable does not limit the Secretary’s

authority to impose fees as one method of “adjust{ing]” imports,

because the import statute did not pose any conceivable threat to

the non-delegation principle.); see also Weiss v. United States, 510

U.S. 163, 189 n.5 (1994) (Souter, J., concurring) (citing National

Cable in stating that the Court has read certain statutes “narrowly

to avoid annulling them as excessive abdications of constitutional

responsibility”).

that other courts had declined to follow the Third Cir-

cuit’s Rohm & Haas analysis in analogous cases. /d. at

23a-24a (citing United States v. Lowe, 118 F.3d 399, 401-

403 (5th Cir. 1997), and Ailantic Richfield Co. v. Ameri-

can Airlines, Inc., 98 F.3d 564, 568 (10th Cir. 1996)).

Nevertheless, the court of appeals correctly dis- |

cerned that, whatever the merits of the Third Circuit’s

analysis, this case is clearly distinguishable from Rohm

& Haas because it involves “remedial” actions, rather

than “removal” actions. Pet. App. 24a. Echoing the

view of the Tenth Circuit in Atlantic Richfield Co. v.

American Airlines, Inc., 98 F.3d 564, 568 (1996), the

court explained:

(T)he Third Circuit only addressed CERCLA’s lan-

guage defining removal actions under [Section

101(23), 42 U.S.C. 9601(23)]|. CERCLA defines re-

medial actions more breadly to include “any moni-

toring reasonably required to assure that such

actions protect the public health and welfare and the

environment.” [Section 101(24), 42 U.S.C. 9601(24)

(emphasis added by the court)]. This language

provides the specific congressional delegation of

authority to the EPA that the clear statement

doctrine of National Cable, as interpreted in Rohm |

& Haas, seems to require. Thus, even under the |

more restrictive approach advocated by [petitioner],

we would conclude that oversight and indirect costs

are recoverable in remedial actions under

CERCLA.

Pet. App. 24a. Thus, the court of appeals reconciled its

decision with that of the Third Circuit, and there is no

conflict on the issue presented here. The court of -

appeals’ mere criticism of the Rohm & Haas decision

does not give rise to a conflict. See, e.g., Black v. Cutter

Labs., 351 U.S. 292, 297 (1956) (“This Court * * *

reviews judgments, not statements in opinions.”). And

to the extent that the Third Circuit’s Rohm & Haas

decision might give rise to a conflict with other cases

not before the Court, that conflict is not ripe for this

Court’s review. The Third Circuit should be allowed an

opportunity to reconsider its decision in light of the

criticism it has generated.”

b. Petitioner contends (Pet. 22) that the court of

appeals’ decision affirming an award of indirect costs is

“in conflict” with Rohm & Haas, but that contention is

baseless. The Third Circuit expressly stated in Rohm

& Haas that “this case does not involve the issue of

whether indirect, overhead costs associated- with

2 The Tenth Circuit, like the court of appeals in this case,

addressed Rohm & Haas in an action involving only “remedial”

costs and similarly held that it need not reach the National Cable

issue because oversight falls within that term under any standard.

Atlantic Richfield, 98 F.3d at 568. That court nevertheless noted

that Rohm & Haas’s application of National Cable “is question-

able.” Jbid. The Fifth Circuit has rejected Rohm & Haas in an

action involving both removal and remedial costs. See Lowe, 118

F.3d at 401 (1997) (“[w]e agree with the government and find the

interjection of the National Cable doctrine inappropriate to our

consideration of this issue of reimbursement of oversight costs”).

See also New York v. Shore Realty Corp., 759 F.2d 1032, 1042-1043

(2d Cir. 1985) (stating, in a decision prior to Rohm & Haas, and

without discussion of National Cable, that the State of New York’s

monitoring costs “in assessing the conditions of the site and super-

vising the removal of the drums of hazardous waste squarely fall

within CERCLA’s definition of response costs, even though the

State is not undertaking to do the removal”); cf. United States v.

Hyundai Merchant Marine, 172 F.3d 1187, 1190-1191 (9th Cir.),

cert. denied, 528 U.S. 963 (1999) (holding, under a provision of the

Oil Pollution Act that allows the Coast Guard to recover.its costs of

monitoring an oil spill cleanup conducted by responsible parties,

that National Cable “do[es] not apply here”).

government removal or remedial activity at a particular

facility are recoverable under § 107(a).” 2 F.3d at 1273

and n.10. While Rohm & Haas notes that a number of

courts have held that indirect costs are recoverable, it

did not reach the issue, and there accordingly is no

conflict among the court of appeals. To the contrary,

the courts of appeals that have addressed the issue

have uniformly held that indirect costs are recoverable.

See United States v. R.W. Meyer, Inc., 889 F.2d 1497,

1502-1503 (6th Cir. 1989), cert. denied, 494 U.S. 1057

(1990); United States v. Chromalloy Am. Corp., 158

F.3d 345, 352 (5th Cir. 1998); United States,v. Ottati &

Goss, 900 F.2d 429, 445 (1st Cir. 1990); B.F’. Goodrich v.

Betkoski, 99 F.3d 505, 528 (2d Cir. 1996), cert. denied,

524 U.S. 926 (1998); see also United States v. Hardage,

750 F. Supp. 1460, 1502 (W.D. Okla. 1990), aff’d in part

and rev’d in part on other grounds, 982 F.2d 1436 (10th

Cir. 1992), cert. denied, 510 U.S. 913 (1993).

As the Sixth Circuit explained in R.W. Meyer, “the

challenged indirect costs are attributable to its cleanup

site in that they represent the portion of EPA’s over-

head expenses that supported the government’s re-

sponse action on Meyer’s property.” 889 F.2d at 1503.

That court added that “the statute contemplates that

those responsible for hazardous waste at each site must

bear the full cost of cleanup actions and that those costs

necessarily include both direct costs and a proportion-

ate share of indirect costs attributable to each site.” Jd.

at 1504. The court of appeals’ affirmance of the district

court’s award of indirect costs in this case is consistent

with the uniform case law, is correct, and provides no

issue warranting further review.

c. Petitioner relegates to a footnote (Pet. 24 n.7) its

argument that the United States should not be allowed

to recover attorney expenses associated with collecting

its response costs. Petitioner merely asserts that

Rohm & Haas should apply with “equal force” to that

question. The courts of appeals, however, have uni-

formly held that the United States may recover costs of

attorneys’ time and other litigation expenses. Pet. App.

24a-25a; United States v. Chapman, 146 F.3d 1166, 1175

(9th Cir. 1998); B.F. Goodrich v. Betkoski, 99 F.3d at

528." ;

The court of appeals’ decision is correct. As the Ninth

Cireuit stated in Chapman, Section 107(a)(4)(A) of

CERCLA “evinces an intent to provide for attorney

fees because it allows the government to recover ‘all

costs of removal or remedial action’ including ‘enforce-

ment activities’ [under Section 101(25)].” 146 F.8d at

1175; see B.F. Goodrich, 99 F.3d at 528 (under Section

101(25), “the government’s recoverable response costs

properly include not only the obvious costs of remedia-

tion, but also include, inter alia, attorneys’ fees”). The

3 This Court ruled in Key Tronic Corp. v. United States, 511

U.S. 809 (1994), that private parties may not recover litigation-

related fees under CERCLA Section 107(a)(4)(B), which allows

those parties to recover only “necessary costs of response” (42

U.S.C. 9607(a)(4)(B)). See 511 U.S. at 819. The Court left open,

however, the question whether the United States may recover

such fees pursuant to Section 107(a)(4)(A), which entitles the gov-

ernment to “all costs of removal or remedial action” (42 U.S.C.

9607(a)(4)(A)). The Court reasoned that “it would stretch the plain

terms of the phrase ‘enforcement activities’ too far to construe it as

encompassing the kind of private cost recovery action at issue in

this case,” but the Court withheld comment “on the extent to

which that phrase forms the basis for the Government’s recovery

of attorney’s fees through § 107.” Key Tronic, 511 U.S. at 819. Cf.

id. at 824 (Scalia, J., dissenting) (“I would read ‘enforcement activi-

ties’ in [Section 101(25)] to cover the attorney’s fees incurred by

both the government and private plaintiffs successfully seeking

cost recovery under [Section 107] of CERCLA.”).

court of appeals’ decision does not conflict ‘vith any

decision of this Court or another court of appeals and

does not warrant review.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfuliy submitted.