Petition for Writ of Certiorari — ASARCO Inc. v. Louisiana-Pacific Corp.

Supreme Court brief1995

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No. OrFrics OF Fe CLERK

In the Supreme Court

OF THE

United States

OCTOBER TERM, 1994

ASARCO INCORPORATED,

Petitioner,

¥.

LOUISIANA-PACIFIC CORPORATION, et al.,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

M. LAURENCE POPOFSKY

Counsel of Record

PETER A. WALD

STEVEN S. ANDERSON

HELLER, EHRMAN, WHITE &

McAULIFFE

333 Bush Street

San Francisco, California 94104-2878

(415) 772-6000

Attorneys for Petitioner

No.

In the Supreme Court

OF THE

United States

OCTOBER TERM, 1994

ASARCO INCORPORATED,

Petitioner,

Vv.

LOUISIANA-PACIFIC CORPORATION, et al.,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

M. LAURENCE POPOFSKY

Counsel of Record

PETER A. WALD

STEVEN S. ANDERSON

HELLER, EHRMAN, WHITE &

MCAULIFFE

333 Bush Street

San Francisco, California 94104-2878

(415) 772-6000

Attorneys for Petitioner

QUESTIONS PRESENTED

The Comprehensive Environmental Response,

Compensation and Liability Act of 1980, 42 U.S.C. §§ 9601-

9675 (1988) (“CERCLA”) imposes liability on persons "who

... arrange[] ... for disposal ... of hazardous substances ...."

42 U.S.C. § 9607(a)(3). The questions presented are:

1. Whether wastes that have been excluded from

regulation as CERCLA “hazardous substances" under section

101(14)(C), 42 U.S.C. § 9601(14)(C), because they are

generated in large volumes but pose low environmental

hazards ("Bevill wastes"), may nonetheless be regulated as

CERCLA “hazardous substances” under the remaining

subparts of section 101(14) because of their hazardous

constituents, where it is demonstrated that such a construction

of section 101(14) nullifies the subpart (C) exclusion for

Bevill wastes altogether.

2. Whether manufacturers who recycle industrial by-

products by selling them in good faith to other parties for

productive use can be found liable under CERCLA for "waste

disposal,” where those by-products turn out to be defective

for their intended use.

PARTIES TO THE PROCEEDING

B & L Trucking and Construction Co., Respondent

Cascade Timber Co., Respondent

Eagle Trucking, Inc., Respondent

Executive Bark, Inc., Respondent

Industrial Mineral Products, Inc., Respondent

Louisiana-Pacific Corporation, Respondent

Murray Pacific Corp., Respondent

Port of Tacoma, Respondent

Portac, Inc., Respondent ;

Wasser & Winters Co., Respondent .

Willaim B. Fjetland, Respondent

‘RULE 29.1 LISTING

Pursuant to Rule 29.1, petitioners disclose the following

subsidiaries and affiliates of petitioner ASARCO Incorporated, |

as well as ASARCO Incorporated, have issued shares to the :

public:

Asarco Australia Limited |

Grauer & Weil :

Meltex

Grupo Mexico, S.A. de C.V.

M.I.M. Holdings Limited

Minto Exploration Ltd.

Neptune Mining Company

TABLE OF CONTENTS

Page

eo ee i

PARTIES TO THE PROCEEDING ............. ii

RB ee eae eee ii

pe a re iii

py 8 ee ys Ea vii

PETITION FOR WRIT OF CERTIORARI ......... 1

a cee eb 1

Fate tS NL a a 2

STATUTORY PROVISIONS INVOLVED ......... 2

ee ee es ae er rrr 3

MN Area fig okay hig ee ebb be 6 4

STATI Gr, GGA ok ec 5

pe 5

RE ae 6

REASONS FOR GRANTING THE PETITION ....... 9

I. The CERCLA Exclusion For Bevill Wastes ...... 9

A. The Ninth Circuit’s Construction Cannot Be

Said To Follow From The Statute’s “Plain

Meaning” Because That Construction Would

Nullify One Of the Statute’s Essential

GE it 2S) a 11

B. The Ninth Circuit’s Decision Conflicts With

The D.C. Circuit’s Opinion In Eagle-Picher ... 13

C. The Legislative History Unambiguously

Confirms Congress’ Intention To Exclude

Bevill Wastes From CERCLA Regulation

Notwithstanding Their Hazardous

I aS yg s 4 0 eo 0 88 15

TABLE OF CONTENTS

(cont’d) ;

Page

D. The Ninth Circuit Improperly Deferred To

The EPA’s Interpretation Of Section 101(14) .. . 17

E. The Question Presented Is An Important

One With Far-Reaching Implications For

The Industries Affected ............... 19

II. CERCLA "Arrange For Disposal" Liability ...... 21

A. The Ninth Circuit’s Decision Cannot Be

Reconciled With The Statutory Scheme

Governing “Waste Disposal” Liability ....... 23

B. The Ninth Circuit’s Decision Conflicts With

The D.C. Circuit’s Decision In American

Mining And Adds To The Existing

Confusion Regarding "Arrange For

Disposal" Liability Under CERCLA ........ 26

C. The Ninth Circuit’s Decision Seriously

Undermines Important Congressional

Policies Favoring Recycling ............. 29

CONGLIIIIINE i cc ee ee eee 30 )

TABLE OF CONTENTS

APPENDICES

(Bound Separately)

Appendix A: bro, of Fact and Conclusions of Law

of the United States District Court for the

Western District of Washington at

Tacoma:

Judgment, dated June 3, 1991;

Instructions to the Jury on Issue #1

dated January 23, 1991;

Special Verdict Form, Issue #1,

dated January 23, 1991;

Transcript of Trial, Oral Rulings by

the Honorable Robert J. Bryan,

dated February 25, 1991.

Appendix B: Order and Amended Opinion of the

United States Court of Appeals for the

Ninth Circuit, filed August 30, 1994.

Appendix C: Order of the United States Court of

Appeals for the Ninth Circuit denying

Petition for ——. with Suggestion for

Rehearing En Banc, filed August 29,

1994.

Appendix D: Excerpts from the Comprehensive

Environmental Response, a

and Liability Act of 1980 ("C RCLA"),

42 U.S.C §§ 9601-9675

§ 9601. Definitions

§ 9605. National Contingency Plan;

preparation, contents, etc.

§ 9607. Liability

§ 9613. Civil Proceedings

TABLE OF CONTENTS

APPENDICES

(cont’d)

Appendix E: Excerpts from the Solid Waste Disposal

Act (“SWDA"), 42 U.S.C. §§ 6901-6992

§ 6901. Congressional findings

§ 6902. Objectives and national

policy

§ 6903. Definitions

§ 6921. Identification and listing of

hazardous waste

§ 6982. Special Studies; plans for

research, development,

and demonstrations

PIII EF ISD CL ANE SS

vii

TABLE OF AUTHORITIES

Cases Page

Amcast Indus. Corp. v. Detrex Corp.,

2 F.3d 746 (7th Cir. 1993),

cert. denied, __ U.S. __, 114 S. Ct. 691 (1994) .. . 23

AM Int'l, Inc. v. International Forging Equip. Corp.,

982 F.2d 989 (6th Cir. 1993) ....--- +--+ eee: 23

American Mining Congress v. United States EPA,

824 F.2d 1177 (D.C. Cir. 1987) ...------: passim

Catellus Dev. Corp. v. United States,

34 F.3d 748 (9th Cir. 1994) .....---- ++: passim

Chemical Mfrs. Ass’n v. NRDC,

a ee 11

Chevron, U.S.A. v. NRDC,

467 U.S. 837 (1984) ......----: Se rere one 18

Dayton Indep. Sch. Dist. v. U.S. Mineral Prods. Co.,

906 F.2d 1059 (Sth Cir. 1990) ....----->:- 23, 28

Eagle-Picher Indus., Inc. v. United States EPA,

7159 F.2d 922 (D.C. Cir. 1985) ..-.-----:- passim

Exxon Corp. v. Hunt,

a ee 9

Florida Power & Light Co. v. Allis Chalmers Corp..,

893 F.2d 1313 (11th Cir. 1990) ....--------> 23

Garcia v. United States,

a 17

Green v. Bock Laundry Mach. Co.,

ee 41S. SOA CISD) 2. ww tes 12

Griffin v. Oceanic Contractors, Inc.,

458 U.S. 564 (1982) ....---- eee ere 11, 13

Vili

TABLE OF AUTHORITIES

(cont’d)

Page |

INS v. Cardoza-Fonseca,

re ie I Go ns 3-5 hs es eek 17, 18

Key Tronic Corp. v. United States,

cc, As eee BAO Os Se ewe Os 9

NLRB v. United Food & Commercial Workers

Union, Local 23,

OOP Ua Bis Ce 8 a el 68S 18, 19

Owen Elec. Steel Co. v. Browner,

No. 93-2195, 1994 WL 554656

ee ee Re ae, eee eer 23, 28, 29

Pennsylvania v. Union Gas,

i ea ee ee 9

Public Citizen v. United States Dept. of Justice,

Pt Vie 6 eA EOE Ot TS we 11

Reiter v. Sonotone Corp.,

Ue ie Se 6 Bs oe tw SS Ue 14 Ges 11

Solite Corp. v. United States EPA,

ee Ee Oe ae) re ar 15

Steel Mfrs. Ass’n v. EPA

BF Fe Oe Gees TR ik ee LA. 27

3550 Stevens Creek Assocs. v. Barclays Bank,

915 F.2d 1355 (9th Cir. 1990),

cert. denied, 500 U.S. 917 (1991) ......... passim

Thornburg v. Gingles,

$76 U5. Fe (FOES... OWES PUA 24 SRG 17

TABLE OF AUTHORITIES

(cont’d)

United States v. A&F Materials Co.,

582 F. Supp. 842 (S.D. Ill. 1984) ..

United States v. Aceto Agric. Chems. Corp.,

872 F.2d 1373 (8th Cir. 1989).....

United States v. American Trucking Ass'n,

pf aR 2. re

United States v. Brown,

8 BS)

United States v. Bryan,

po ge RS -> G), . Se

United States v. Iron Mountain Mines, Inc.,

812 F. Supp. 1528 (E.D. Cal. 1992) .

United States v. Menasche,

.' ik > Pt, . - ) rr

United States v. Nordic Village, Inc.,

__ U.S. __, 112 S. Ct. 1011 (1992) .

Wart v. Alaska,

"op A) |

Young v. Community Nutrition Inst.,

yee ey Gt. Se

Zuber v. Allen,

396 U.S. 168 (1969),

cert. denied sub nom.

Allen v. Hardin, 396 U.S. 1013 (1970)

Page

TABLE OF AUTHORITIES

(cont’d)

Page

Constitutions

OF 0 SO OU ee ee eae 8, 22

Federal Statutes

Air Pollution Prevention and Control Act, 42 U.S.C. §§ 7401 -

7671 ("Clean Air Act")

section Lid, 42 USA. @ POS 2c cc cc cebin 3, 16

Comprehensive Environmental Response, Compensation and

Liability Act of 1980, 42 U.S.C. §§ 9601 - 9675 ("CERCLA")

(1988)

Section 101(14), 42 U.S.C. § 9601(14) ...... passim

Section 101(14)(C), 42 U.S.C. § 9601(14)(C) .. passim

Section 101(29), 42 U.S.C. § 9601(29) ........ 3, 21

Section 101(33), 42 U.S.C. § 9601(33) ......... 20

Sects Wa, ae Ue ee oe bce cca st 3

Section 104(a)(1)(B), 42 U.S.C. § 9604(a)(1)(B) ... 20

Soces Fe Ge ers EE cece ee aaeas 20

Squteh: ets Me, ss ba tnsesscivas 19

Section 107(a)(3), 42 U.S.C. § 9607(a)(3) ... 6,7, 29

Section 107(a)(3)(B), 42 U.S.C. § 9607(a)(3)(B) ... 4

Section 111(a), 42 U.S.C. § 9611(a) .......... 20

Section 113(b), 42 U.S.C. § 9613(0) .......... 6

TABLE OF AUTHORITIES

(cont’d)

Page

Federal Water Pollution Control Act , 33 U.S.C §§ 1251 - 1387

("Clean Water Act”)

Ee 16

Ee 3

eee 16

Section 311, 33 U.S.C. § 1321(b)(2)(A) ........ 3

Judiciary and Judicial Procedure, Supreme Court - Jurisdiction,

28 U.S.C. §§ 1251 - 1259

OS 5 Gy 55. ee 2

Resource Conservation and Recovery Act of 1976 , 42 U.S.C.

§§ 6901 - 6992k ("RCRA")

Section 1002(c), 42 U.S.C. § 690l(c) ......... 29

Section 1003(a)(6), 42 U.S.C. § 6902(a)(6) ...... 29

Section 1004, 42 U.S.C. § 6903 ...........-. 3, 4

Section 1004(3), 42 U.S.C. § 6903(3) ....... 4, 21

Section 1004(5), 42 U.S.C. § 6903(5) ......... 21

Section 1004(27), 42 U.S.C. § 6903(27) ...... 4, 21

Section 3001, 42 U.S.C. § G921............- 3

Section 3001(b)(2)(A), 42 U.S.C. § 6921(b)(2)(A) . . 15

Section 3001(b)(3)(A), 42 U.S.C. § 6921(0)(3)(A) 4, 21

Section 3001(b)(3)(A)(i)-{iii), 42 U.S.C.

§ GO21@)GMAMI-M) ww ee eee 15

Section 3001(b)(3)(C), 42 U.S.C. § 6921(6)3)(C) . . 15

Section 8002(p), 42 U.S.C. § 6982(p) ......... 15

xii

TABLE OF AUTHORITIES

(cont’d)

Page

Toxic Substances Control Act, 15 U.S.C. §§ 2601 - 2692,

("TSCA")

section 7, 15 USA. So eee « kvl ld eV aes 3, 16

Regulations

Solid Waste, Identification and Listing of Hazardous Waste, 40

C.F.R. § 261 (1992)

eC ere eee eS re ee ee os eT 24

cS eereerer a Soe rere ee ar 26

+ & Peers Cees 24, 26

FE id oaks 4 ota See ee ee 26

S POL) i-s ee 64d OM eR Pe HR 20

Hazardous Waste Management System; Definition of Solid

Waste, 50 Fed. Reg. 614 - 668 (1985)

Sees ees cer ea eee eee eee 24

Final Regulatory Determination for Special Wastes from Mineral

Processing (Mining Waste Exclusion)

56 Fed. Reg. 27,300 - 27,330 (1991)

pe ET ee ee ed a ee 20, 24

xiii

TABLE OF AUTHORITIES

(cont’d)

Washington Statutes

Washington Products Liability Act ("WPLA"),

ak Re ee er

Legislative Material

Pub. L. No., 89-272, 79 Stat. 997 (1965),

Solid Waste Disposal Act ("SWDA") .........

Pub. L. No., 91-512, 84 Stat. 1288 (1976),

Resource Conservation and Recovery Act

foo fe) 9 i a a

Pub. L. No. 96-482, 94 Stat. 2334 (1980),

The Solid Waste Disposal Act Amendments of 1980 .

H.R. 85, 96th Cong., Ist Sess. (1979),

Ee ee ee

H.R. 7020, 96th Cong., 2nd Sess. (1980),

POP IE et ee

S. Bill 1480, 96th Cong., 2d Sess. (1979),

FOSSETT STR

Page

xiv

TABLE OF AUTHORITIES

(cont’d)

Page

S. Rep. No. 848, 96th Cong., 2nd Sess. (1980),

Vapramad 02 5 SE 6 ok cee akeaandaeen 17

EPA: Report to Congress, Wastes from the Extraction and

Beneficiation of Metallic Ores, Phosphate Rock, Asbestos,

Overburden from Uranium Mining, and Oil Shale (1985) . 19

EPA: Investigation of Superfund and Agency Abuses (Part 2)

Hearings Before the Subcomm. on Oversight and Investigations

of the Comm. on Energy and Commerce,

Fe Comn.s 00) GO. Te Ge 6 tec pee tee ckn 18

Other Authorities

I Environmental Law Institute, Superfund: A Legislative History

(i902) C ON Da ce C5) KB ee ee eee 16

Roger K. Ferland and Marilyn D. Cage, Using RCRA to

Interpret CERCLA Liability: What is “Arranging for

Disposal”?, 23 Ariz. St. L.J. 445 (1991) .......... 29

Frank P. Grad, A Legislative History of the Comprehensive

Environmental Response, Compensation and Liability Superfund

Act of 1980, 8 Colum. J. Envtl. L. 1 (1982) ..... 12, 16

Staff, Div. of Mineral Comm., Recycled Metals In the United

States (U.S. Dept. of Int., Bureau of Mines 1993) ..... 26

In the Supreme Court

OF THE

United States

OCTOBER TERM, 1994

ASARCO INCORPORATED,

Petitioner,

LOUISIANA-PACIFIC CORPORATION, et al.,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Petitioner ASARCO Incorporated ("Asarco") respectfully

petitions for a writ of certiorari to review the judgment of the

United States Court of Appeals for the Ninth Circuit.

OPINION BELOW

The findings of fact and conclusions of law of the United

States District Court for the Western District of Washington

are unreported, and are reprinted in Appendix A of the

separately bound Appendix to this Petition ("Pet. App.”) at

A-1 through A-16. The United States Court of Appeals for

the Ninth Circuit issued an opinion in this matter on

September 23, 1993. Following a timely petition for

rehearing with suggestion for rehearing en banc, the court

amended that opinion on January 13, 1994. Following a

second petition for rehearing with suggestion for rehearing en

banc, the court withdrew its January 13, 1994 amended

opinion and filed a new opinion on April 28, 1994

("Opinion"). Following a third and final petition for

rehearing with suggestion for rehearing en banc, the court

amended its Opinion on August 30, 1994. That amended

Opinion is reported at 24 F.3d 1565 and reprinted in

Appendix B to this Petition at B-1 through B-39.

JURISDICTION

The Ninth Circuit’s judgment and Opinion were rendered

on April 28, 1994. By Order dated August 29, 1994, the

Ninth Circuit denied Asarco’s timely petition for rehearing

with suggestion for rehearing en banc. A copy of that Order

is reprinted in Appendix C to this Petition at C-1 through C-

2. This Court’s jurisdiction is invoked under 28 U.S.C.

§ 1254(1).

STATUTORY PROVISIONS INVOLVED

Principally at issue here are certain provisions of the

Comprehensive Environmental Response, Compensation and

Liability Act of 1980, 42 U.S.C. §§ 9601 - 9675 (1988)

("CERCLA"), and related provisions of the Resource

Conservation and Recovery Act of 1976, 42 U.S.C. §$§ 6901

- 6992k ("RCRA") (amending the Solid Waste Disposal Act

of 1965).

A. CERCLA'

DEFINITIONS

Section 101. For purpose of this subchapter-

(14) The term “hazardous substance” means (A)

any substance designated pursuant to section

1321(b)(2)(A) of Title 33, (B) any element,

compound, mixture, solution, or substance designated

pursuant to section 9602 of this title, (C) any

hazardous waste having the characteristics identified

under or listed pursuant to section 3001 of the Solid

Waste Disposal Act (but not including any waste the

regulation of which under the Solid Waste Disposal

Act has been suspended by Act of Congress), (D) any

toxic pollutant listed under section 1317(a) of Title

33, (E) any hazardous air pollutant listed under

section 112 of the Clean Air Act, and (F) any

imminently hazardous chemical substance or mixture

with respect to which the Administrator has taken

action pursuant to section 2606 of Title 15. The

term does not include petroleum, including crude oil

or any fraction thereof which is not otherwise

specifically listed or designated as a hazardous

substance under subparagraphs (A) through (F) of

this paragraph, and the term does not include natural

gas, natural gas liquids, liquified natural gas, or

synthetic gas usable for fuel (or mixtures of natural

gas and such synthetic gas).

(29) The terms “disposal,” "hazardous waste,”

and “treatment” shall have the meaning provided in

section 1004 of the Solid Waste Disposal Act [42

U.S.C.A. § 6903].

42 U.S.C. § 9601(14) and (29) (emphasis added).

‘All relevant provisions of CERCLA are reprinted in

Appendix D to this Petition at D-1 through D-13.

LIABILITY

Section 107(a). Notwithstanding any other provision or

rule of law, and subject only to the defenses set forth in

subsection (b) of this section-

(3) any person who by contract, agreement, or

otherwise arranged for disposal ... of hazardous

substances ... shall be liable for - —

(B) any other necessary costs of response

incurred by any other person consistent with the

national contingency plan.

42 U.S.C. § 9607(a)(3)(B).

B. RCRA’

; DEFINITIONS

Section 1004. As used in this chapter:

(3) The term "disposal" means the discharge,

deposit, injection, dumping, spilling, leaking, or placing

of any solid waste or hazardous waste into or on any

land or water so that such solid waste or hazardous waste

or any constituent thereof may enter the environment or

be emitted into the air or discharged into any waters,

including ground waters.

(27) The term “solid waste” means any garbage,

refuse, ... and other discarded material ... .

42 U.S.C. § 6903(3) and (27) (emphasis added).

IDENTIFICATION AND LISTING

OF HAZARDOUS WASTE

Section 3001(b)(3)(A). Notwithstanding the

provisions of paragraph (1) of this subsection, each waste

listed below shall ... be subject only to regulation under

other applicable provisions of Federal or State law in lieu

?All relevant provisions of RCRA are reprinted in

Appendix E to this Petition at E-1 through E-24.

————————

_ ye ee

of this subchapter until at least six months after the date

of submission of the applicable study required to be

conducted ... and after promulgation of regulations in

accordance with subparagraph (C) of this paragraph:

(ii) Solid waste from the extraction, beneficiation,

and processing of ores and minerals ... .

42 U.S.C. § 6921(6)(3)(A) (emphasis added).

STATEMENT OF THE CASE

A. Factual Summary.

Petitioner Asarco owns and, until 1985, operated a

copper smelter in Tacoma, Washington. Copper smelting

necessarily produces a by-product called “slag” -- the residual

ore that is separated from the molten copper in the smelter

reverberatory furnaces. After cooling, slag is a dense, heavy,

rock-like material consisting primarily of iron and silicate, as

well as small levels of arsenic, copper, lead, and zinc.

Before 1973, Asarco sold approximately one-quarter of

its slag for a variety of commercial applications and, pursuant

to an agreement with the Metropolitan Park District of

Tacoma, placed the remainder of the slag in Commencement

Bay as fill for a breakwater. In 1973, Asarco, with strong

encouragement from the Washington Department of Ecology

(“WDOE"), began to expand its commercial slag sales.

Asarco entered into an exclusive distributorship contract with

Black Knight, Inc., which contracted to purchase all of

Asarco’s slag, and leased a portion of the property at

Asarco’s Tacoma smelter to process the slag for resale.

Black Knight continued to sell slag to Asarco’s previous

customers, but also began promoting slag for use as ground-

stabilizing ballast on logyards. For eight years, respondent

logyards purchased large quantities of slag, instead of

competing products like gravel, because slag functioned

exceedingly well in this application; it was durable, supported

the weight of the logs and the heavy equipment used to move

them, and “keyed” together to form a firmer foundation than

gravel, while still providing good drainage.

In late 1980, the United States Environmental Protection

Agency ("EPA") found elevated concentrations of heavy

metals in a sample of surface runoff water from one of the

logyards, and relayed the information to the WDOE.

Ultimately, it was discovered that complex, unanticipated

interactions among physical and chemical forces operating in

the logyard environment had caused the slag to leach its

heavy metal constituents, contaminating respondents’

properties. In 1986, the WDOE issued the first of a series of

orders concerning remediation of the sites.

Thereafter, the parties filed suit against one another in

United States District Court for the Western District of

Washington, seeking recovery for remediation costs under

CERCLA, and also asserting state statutory and common law

causes of action.’

B. Proceedings Below.

CERCLA section 107(a)(3) imposes liability on persons

"who ... arrange[] ... for disposal ... of hazardous substances

..." 42 U.S.C. § 9607(a)(3). CERCLA section 101(14)

defines "hazardous substance” by incorporating in subparts

(A) through (F) various substances that have been designated

for regulation under other specified environmental statutes.

42 U.S.C. § 9601(14). Section 101(14)(C) provides that

CERCLA “hazardous substances” include hazardous wastes

that have been designated as such in RCRA, "(but not

including any waste the regulation of which under [RCRA]

has been suspended by Act of Congress)." 42 U.S.C. §

9601(14)(C) (emphasis added). Subpart (C) thus excludes

‘Jurisdiction in the district court was invoked under 42

U.S.C. § 9613(b), which confers exclusive original

jurisdiction in the United States district courts over all

CERCLA controversies.

from the definition of CERCLA “hazardous substances”

certain wastes (known as “Bevill wastes”) that were excluded

from regulation as RCRA “hazardous wastes” because they

are generated in large volumes but pose low environmental

hazards.

At trial,“ Asarco argued that it was not liable under

CERCLA (1) because slag, a Bevill waste, is exempt from

regulation as a CERCLA “hazardous substance” under section

101(14)(C), and (2) because in selling slag to the logyards for

use as ground-stabilizing ballast, Asarco had not “arranged for

disposal" of slag within the meaning of section 107(a)(3), 42

U.S.C. § 9607(a)(3).

The district court rejected these arguments and imposed

CERCLA liability on Asarco. The court held that the

CERCLA exclusion for Bevill wastes was limited to subpart

had leached its heavy metal constituents, qualified as a

“hazardous substance" under subsections (A), (B), and (D) of

section 101(14). In so holding, the court rejected Asarco’s

argument that such a construction of section 101(14) nullifies

the exclusion for Bevill wastes set forth in subpart (C), since

it was undisputed on the record that all Bevill wastes contain

and will release constituent elements that qualify as

“hazardous substances” under the remaining subparts of

section 101(14).

The district court also found that Asarco’s sale of slag

constituted a "waste disposal" within the meaning of section

107(a)(3), 42 U.S.C. § 9607(a)(3), notwithstanding that the

jury had previously found by special verdict that slag was a

“product” for purposes of the Washington Products Liability

Act ("WPLA"), R.C.W. ch. 7.72, possessing "intrinsic value”

“The CERCLA claims were tried to the court, Pet. App.

at A-2, while all remaining state law claims were tried to a

jury.

and having been "produced for introduction into trade or

commerce." The district court rejected Asarco’s argument

that the jury’s "product" verdict (and subsequent imposition of

liability under WPLA) precluded the court, under the Seventh

Amendment to the United States Constitution, U.S. Const.

amend. VII, from finding that Asarco had “disposed” of a

"solid waste" as those terms are specifically defined in

CERCLA, holding simply that "this so-called product was so

bad that it, in my view, was never really a legitimate

product.” Pet. App. at A-14.

The Ninth Circuit affirmed both of the district court’s

CERCLA liability rulings. With respect to the Bevill waste

issue, the Ninth Circuit found that "the plain language and

structure” of section 101(14) make clear that “the specific

exception for slag in subsection (C) applies only to that

subsection." Pet. App. at B-18. The Ninth Circuit dismissed

Asarco’s argument that such a construction would nullify the

subpart (C) exclusion for Bevill wastes, observing simply that

"Asarco’s argument is based on a false premise. It assumes

that Congress meant for the statute to say something other

than what it plainly says." Pet App. at B-20. Alternatively,

the court deferred to the construction advanced by the EPA,

which had “interpreted section 9601(14) to mean that the

Bevill Amendment exception in subsection (C) refers only to

that subsection." Pet. App. at B-20.

With respect to the “waste disposal" issue, the Ninth

Circuit affirmed the district court’s holding, though on

different grounds. The Ninth Circuit held that Asarco’s sale

of slag to the logyards simultaneously could constitute the sale

of a defective "product" for purposes of state products

liability law, and the “disposal” of a “solid waste" for

CERCLA purposes, because slag was “at best a by-product”

with “nominal commercial value." Pet. App. at B-22.

REASONS FOR GRANTING THE PETITION

This Petition presents two questions of substantial

importance continuously arising under CERCLA, which have

never been addressed by this Court but have been the subject

of extensive and inconsistent treatment by the Circuit Courts

of Appeals.°

I. The CERCLA Exclusion For Bevill Wastes

The Ninth Circuit’s construction of section 101(14)

nullifies Congress’ express exclusion of Bevill wastes from

CERCLA regulation under subpart (C), and thereby overturns

the carefully-balanced scheme of environmental regulation that

Congress adopted. It was undisputed on the record below

that all Bevill wastes contain constituent elements that meet

the definition of “hazardous substance” under the remaining

subparts of section 101(14). Thus, if the Ninth Circuit’s

construction of section 101(14) is accepted, and the CERCLA

exclusion for Bevill wastes limited to subpart (C), that subpart

is deprived of all meaning.

The Ninth Circuit’s reliance on the statute’s purported

“plain language and structure,” notwithstanding the clear

nullification of subpart (C) that its construction effects, cannot

be reconciled with prior decisions of this Court governing

application of the "plain meaning” doctrine, and directly

conflicts with the opinion of the United States Court of

Appeals for the District of Columbia Circuit in Eagle-Picher

‘This Court has issued only three opinions dealing with

CERCLA, none of which involved the critical liability issues

addressed here. Key Tronic Corp. v. United States, _ U.S.

__, 1148S. Ct. 1960 (1994) (attorneys’ fees are not

recoverable under CERCLA); Pennsylvania v. Union Gas,

491 U.S. 1 (1989) (states may be sued for money damages

under CERCLA); Exxon v. Hunt, 475 U.S. 355 (1985)

(CERCLA pre-empts state tax fund designed to compensate

for expenses reimbursed by Superfund).

Indus., Inc. v. United States EPA, 759 F.2d 922 (D.C. Cir.

1985). Given such nullification, the court was obligated but

failed to consider the statute’s legislative history, which

unambiguously confirms Congress’ understanding that Bevill

wastes contain and can leach hazardous constituents, and its

intention nonetheless to exclude Bevill wastes from CERCLA

regulation. Because section 101(14) is fairly susceptible to an

interpretation that gives effect to subpart (C), and that is

unambiguously reflected in the legislative history, the Ninth

Circuit should have adopted that construction.

The Ninth Circuit’s decision, alternatively, to defer to the

EPA’s construction conflicts with prior decisions of this Court

governing the circumstances under which such deference is

appropriate. Since Congress’ intention to exclude Bevill

wastes from CERCLA regulation is clear from the legislative

history, the Ninth Circuit erred in deferring to the EPA’s

contrary construction. Furthermore, the EPA’s now-professed

construction of section 101(14) directly contradicts the view

the EPA expressed to Congress immediately following

CERCLA’s passage.

The question presented -- whether Congress intended

that Bevill wastes be excluded from regulation as CERCLA

“hazardous substances” -- is an important one. The Bevill

Amendment was central to the cost-benefit balance of

environmental regulation that Congress struck in CERCLA,

reflecting Congress’ concern that the costs of such regulation

not be imposed on the mining, utility and cement industries

until the need for such regulation was established. The Ninth

Circuit’s decision, if allowed to stand, would rework the

compromise that Congress reached, and adversely affect a

significant portion of American commerce.

—_— One

Ee a ee

A. The Ninth Circuit’s Construction Cannot Be Said

To Follow From The Statute’s "Plain Meaning"

Because That Construction Would Nullify One Of

The Statute’s Essential Provisions.

This Court repeatedly has emphasized that "[i]n

construing a statute we are obliged to give effect, if possible,

to every word Congress used.” Reiter v. Sonotone Corp.,

442 U.S. 330, 339 (1979); accord United States v. Nordic

Village, Inc., U.S. __, 112 S. Ct. 1011, 1015 (1992);

United States v. Menasche, 348 U.S. 528, 537 (1955). The

Ninth Circuit declined to address this cardinal principle of

statutory construction, dismissing its application here as

"based on a false premise. It assumes that Congress meant

for the statute to say something other than what it plainly

says." Pet. App. at B-20.

This analysis is completely circular. If the Ninth

Circuit’s construction would nullify a part of the statute, then

that construction cannot be deemed to follow from the

statute’s “plain meaning.” United States v. Bryan, 339 U.S.

323, 338 (1950); United States v. Brown, 333 U.S. 18, 26-27

(1948). Indeed, evidence of such nullification is offered

precisely to show that the statute cannot have the "plain

meaning” that the court’s construction would ascribe to it, and

that an alternative reading must be considered. See Chemical

Mfrs. Ass'n v. NRDC, 470 U.S. 116 (1985); cf Griffin v.

Oceanic Contractors, Inc., 458 U.S. 564, 575 (1982)

("interpretations of a statute which would produce absurd

results are to be avoided if alternative interpretations

consistent with the legislative purpose are available”).

In such circumstances, this Court historically “has looked

beyond the words” to “other evidence of congressional

intent.” United States v. American Trucking Ass'n, 310 U.S.

534, 543 (1940); accord Public Citizen v. United States Dep't

of Justice, 491 U.S. 440, 454-55 (1989). If such evidence

demonstrates that Congress had some purpose in mind other

than that which would result from a literal reading of the

Statute’s text, then a departure from the "plain meaning” may

be justified. Green v. Bock Laundry Mach. Co., 490 U.S.

504, 509 (1989) (Scalia, J., concurring).

The legislative history indisputably demonstrates that

Congress intended to exclude Bevill wastes altogether from

regulation as CERCLA "hazardous substances,”

notwithstanding their hazardous constituents. Since section

101(14) is fairly susceptible to a construction that gives effect

to Congress’ intention,® as reflected in the legislative history,

*The Ninth Circuit relied principally on the fact that the

CERCLA exclusion for Bevill wastes was placed within

subpart (C), and not, like the petroleum exclusion, at the end

of section 101(14). Pet. App. at B-18. However, such

placement is rationally explained by the structure and history

of section 101(14) itself. First, RCRA “hazardous wastes"

are designated for CERCLA regulation in subpart (C); not

surprisingly, that is also where Congress incorporated in

CERCLA the RCRA exclusion for Bevill wastes. United

States v. Iron Mountain Mines, Inc., 812 F. Supp. 1528,

1539 (E.D. Cal. 1992). Second, there was no comparable

exclusion for petroleum products under any of the pre-existing

environmental statutes whose definitions of "hazardous" or

"toxic" substances are incorporated in section 101(14). Thus,

unlike the Bevill waste exclusion, the petroleum exclusion was

particularly drafted for section 101(14). Third, the

differences in placement are attributable to the fact that the

petroleum exclusion emanated from a separate bill, and was

subsequently merged into the legislative draft of section

101(14). Frank P. Grad, A Legislative History of the

Comprehensive Environmental Response, Compensation and

Liability Superfund Act of 1980, 8 Colum. J. Envtl. L. 1, 3-

10 (1982). Finally, mere placement of the CERCLA

exclusion for Bevill wastes need not, by itself, be given

conclusive effect. See Young v. Community Nutrition Inst.,

476 U.S. 974, 980-81 (1986).

cama

that construction should have been adopted. Nordic Village,

112 S. Ct. at 1015; Oceanic Contractors, 458 U.S. at 575.

B. The Ninth Circuit’s Decision Conflicts With The

D.C. Circuit’s Opinion In Eagle-Picher.

The Ninth Circuit’s construction of section 101(14)

purports to follow the D.C. Circuit’s decision in Eagle-Picher

Indus., Inc. v. United States EPA, 759 F.2d 922 (D.C. Cir.

1985). While the two decisions appear facially consistent

they in fact conflict, because as the D.C. Circuit recognized,

the “plain meaning” doctrine must yield if, on the record

presented, its application would nullify a statutory provision.

In Eagle-Picher, the D.C. Circuit, like the Ninth Circuit,

purported to rely on the "plain meaning of the entire statutory

provision" in determining that the CERCLA exclusion for

Bevill wastes was limited to subpart (C). Jd. at 927. In

reaching its conclusion, the court acknowledged that the

Senate Report, which accompanied the legislative draft of

section 101(14), infra at 16-17, unambiguously reflects

Congress’ intention to exclude Bevill wastes altogether from

the definition of CERCLA “hazardous substances,"

notwithstanding their hazardous constituents:

It is beyond reasonable debate that the language of the

Senate Report is clear, and that the import of that

language is that the exception set forth in subparagraph

101(14).

Id. at 928 (emphasis added). Yet, the court found that the

language of section 101(14) was equally clear. Given a

conflict between the “plain meaning” of the statute on the one

hand, and the legislative history on the other, the court

concluded that “the statute must control,” id. at 929, and "the

exclusionary exception should be limited to subparagraph

(C)." Id. at 928.

Critically, the court recognized that:

[i]f there were very clear legislative history indicating

that Congress had an intent contrary to that expressed in

the statute, and particularly if application of the language

would lead to an irrational result that Congress could not

have intended, courts might well be justified in departing

from the clear language and structure of the statute.

Id. at 929 (emphasis in original; footnote omitted). On the

record presented, however, the D.C. Circuit found that

petitioners had “cited nothing ... demonstrating that all or

virtually all mining wastes and fly ash have constituents

which are ‘hazardous substances.” We have nothing more than

petitioners’ bare assertions on this point." Jd. at 928.

In contrast to the petitioners in Eagle-Picher, Asarco

made just such a showing here. At trial, Asarco introduced

testimony from Dr. Twidwell, a metallurgical engineer

specializing in the treatment of industrial waste materials. In

a seventeen-page affidavit, Dr. Twidwell concluded that “all

or virtually all" Bevill wastes contain constituent elements that

qualify as “hazardous substances” under the remaining

subparts of section 101(14); such elements are simply

ubiquitous in the earth’s crust, from which Bevill materials

are derived. This conclusion was undisputed, either in the

trial court or on appeal.

In view of this showing, which establishes that the

regulatory exclusion for Bevill wastes would be nullified if

limited to subpart (C), the D.C. Circuit clearly would have

reached a different result had it been presented with this

record. Review by this Court is necessary to resolve the

conflict in the treatment accorded this issue by the Ninth and

D.C. Circuits, which is far too important to turn on the

fortuity of where the issue arises.

C. The Legislative History Unambiguously Confirms

Congress’ Intention To Exclude Bevill Wastes

From CERCLA Regulation Notwithstanding. Their

Hazardous Constituents.

On October 21, 1980, Congress enacted the Solid Waste

Disposal Act Amendments of 1980, Pub. L. No. 96-482, 94

Stat. 2334 (1980), which included the Bevill Amendment.’

The Bevill Amendment suspended from regulation as RCRA

“hazardous wastes” all “[s]olid waste from the extraction,

beneficiation, and processing of ores and minerals” (which

includes copper smelting slag), as well as cement kiln dust,

utility fly and bottom ashes, and petroleum drilling fluids. 42

U.S.C. § 6921(b)(2)(A), (6)(3)(A)(i)-(iii). ~The EPA was

directed to study any adverse health and environmental effects

from these wastes, to submit its report to Congress by

October 21, 1983, 42 U.S.C. § 6982(p), and within six

months of that report, either to "determine to promulgate

regulations” governing these wastes, or to “determine that

such regulations are unwarranted.” 42 U.S.C. §

6921(b6)(3)(C); see also Solite Corp. v. United States EPA,

952 F.2d 473, 478 (D.C. Cir. 1991).°

At the same time Congress was incorporating the Bevill

Amendment into RCRA, it was drafting the final version of

"The Bevill Amendment amended RCRA, which was

itself an amendment to the Solid Waste Disposal Act of 1965,

Pub. L. No. 89-272, 79 Stat. 997 (1965), as amended by

Pub. L. No. 91-512, 84 Stat. 1288 (1976).

"RCRA subtitle C regulates the treatment, storage and

disposal of “hazardous wastes." RCRA subtitle D regulates

“non-hazardous” solid wastes, and provides less stringent

treatment and disposal requirements than subtitle C. Bevill

wastes excluded from regulation as “hazardous wastes” under

RCRA subtitle C remain subject to regulation as “non-

hazardous” solid wastes under RCRA subtitle D.

the “Superfund” toxic and hazardous waste cleanup bill that

was to become CERCLA. Frank P. Grad, A Legislative

History of the Comprehensive Environmental Response,

Compensation and Liability Superfund Act of 1980, 8 Colum.

J. Envtl. L. 1 (1982) ("A Legislative History"). There were

three bills that contributed provisions to the legislation as

finally enacted: two House bills, H.R. 7020 and H.R. 85, and

one Senate bill, S. 1480. A Legislative History at 2. S. 1480

emerged from the Senate Committee on Environment and

Public Works ("Senate Committee") and contained what was

to become CERCLA’s "hazardous substance” definition. I

Environmental Law Institute, Superfund: A Legislative

History, xvii (1982) ("Superfund").

In June, 1980, the Senate Committee held a markup

session on S. 1480. That bill, like the final version of

section 101(14), defined CERCLA "hazardous substances” by

incorporating substances that had been designated "hazardous"

or "toxic" under a variety of other environmental statutes. In

particular, subpart (C) incorporated wastes that had been

designated as "hazardous" under RCRA. See generally S.

1480, 96th Cong., 2d Sess. (1980), reprinted in Superfund at

10.2 During this session, Senator Bentsen introduced an

amendment adding to the subpart (C) definition of “hazardous

substance” the qualifier, "(but not including any waste, the

regulation of which under the Solid Waste Disposal Act has

been suspended by Act of Congress)." Environment and

Public Works Committee Mark Up Session on Toxic

°The remaining subparts of section 101(14) incorporated

materials designated "hazardous" or "toxic" as follows:

subparts (A) and (D) incorporated sections 307 and 311 of the

Clean Water Act; subpart (E) incorporated section 112 of the

Clean Air Act; subpart (F) incorporated section 7 of the

Toxic Substances Control Act; and subpart (B) provided a

generic definition to capture materials designated as

“hazardous” in the future.

Chemical Compensation, June 18, 1980, 96th Cong., 2d Sess.

(1980). This qualifier thereby incorporated in CERCLA the

RCRA exemption for Bevill wastes.

Significantly, the Committee Report accompanying S.

1480 explicitly rejected the notion, later entertained by the

courts, that Bevill wastes could be regulated as CERCLA

“hazardous substances” notwithstanding the exclusion set forth

in subpart (C), because they contain hazardous constituents:

It should be noted that any substance or material for

which regulation is specifically suspended by Act of

Congress under the Solid Waste Disposal Act is excluded

from designation as a hazardous substance for the pur-

pose of S. 1480, notwithstanding the presence in such

substance of any hazardous or toxic chemical.

S. Rep. No. 848, 96th Cong., 2d Sess. 28, reprinted in

Superfund at 12 (emphasis added). Committee reports are the

most authoritative source of legislative history because they

"represent[] the considered and collective understanding of

those Congressmen involved in drafting and studying

proposed legislation." Zuber v. Allen, 396 U.S. 168, 186

(1969) (emphasis added); accord Thornburg v. Gingles, 478

U.S. 30, 43-44 & nn.7-8 (1986); Garcia v. United States,

469 U.S. 70, 76 (1984).

D. The Ninth Circuit Improperly Deferred To The

EPA’s Interpretation Of Section 101(14).

The Ninth Circuit’s deference to the EPA’s

interpretation of section 101(14), as an alternative basis for its

holding, was flawed for two separate reasons — one

procedural, and one substantive. Procedurally, the Ninth

Circuit failed meaningfully to consider the legislative history,

discounting that history as the source of potential ambiguity,

rather than a means to its resolution. Pursuant to well-settled

authority, the Ninth Circuit should have attempted to

determine congressional intent using “the traditional tools of

Statutory construction” before deferring to the EPA. JNS v.

Cardoza-Fonseca, 480 U.S. 421, 446-48 (1987). Those tools

include the statute’s “words, structure and history." NLRB v.

United Food & Commercial Workers Union, Local 23, 484

U.S. 112, 124 (1987) (emphasis added); see INS, 480 U.S. at

446. Yet, the Ninth Circuit failed even to address the Senate

Committee Report. Because the legislative history clearly

establishes Congress’ intention to exclude Bevill wastes from

CERCLA regulation, notwithstanding their hazardous

constituents, the Ninth Circuit’s deference to the EPA’s

contrary interpretation was both premature and erroneous.

Chevron, U.S.A., Inc. v. NRDC, 467 U.S. 837, 842-43

(1984); INS, 480 U.S. at 421.

Substantively, even if the legislative history were not

dispositive here, deference to the EPA’s interpretation of

section 101(14) would be inappropriate because the

interpretation now advanced by the EPA contradicts the

position that the EPA took in 1982-83, immediately after the

Bevill Amendment was incorporated into CERCLA. During

the congressional hearings on Superfund, several

representatives of the EPA, including its then-acting

administrator, testified that (1) the language and structure of

section 101(14) are susceptible to more than one

interpretation; (2) any interpretation limiting the CERCLA

exemption for Bevill wastes to subparagraph (C) would

effectively nullify the exemption, because all such wastes

contain constituents that would be deemed “hazardous” under

the remaining subparts of the section; (3) Congress intended

to exempt Bevill wastes from CERCLA regulation altogether,

notwithstanding the presence of hazardous constituents; and

(4) that conclusion is powerfully supported by the legislative

history. EPA: Investigation of Superfund and Agency Abuses

(Part 2) Hearings Before the Subcomm. on Oversight and

Investigations of the Comm. on Energy and Commerce, 98th

Cong., Ist Sess. 158-161 (1983); see also United States v.

Iron Mountain Mines, Inc., 812 F. Supp. 1528, 1557-1558

(1992). Given these prior positions, the EPA’s present view

is entitled to little or no deference. See Wart v. Alaska, 451

U.S. 259, 273 (1981). Indeed, the EPA’s earlier and

04. pvencetal aes

contemporaneous view, if anything, is entitled to greater

weight. NLRB, 484 U.S. at 124 n.20.

E. The Question Presented Is An Important One

With Far-Reaching Implications For The

Industries Affected.

The issue presented here is of pressing concern, not only

to the parties but to several industries. By its express terms,

the Bevill Amendment applies to a wide range of mining and

mineral processing wastes and by-products, certain utility

wastes, and cement kiln dust. All of these materials share a

common characteristic: they are by necessity created in large

volumes, but pose very little threat to the environment. They

are, in the EPA’s words, “high volume, low hazard” wastes.'°

CERCLA imposes unique burdens on those falling within

its reach. All parties potentially responsible for the disposal

of a "hazardous substance” are strictly liable, on a joint and

several basis, for the costs of removal and remediation. 42

U.S.C. § 9607. In imposing such costs, Congress relied on

the common law notion that those who knowingly engage in

ultrahazardous activities must be held strictly liable for the

consequences. At the same time, Congress expressly

excluded "high volume/low hazard" Bevill wastes from

CERCLA’s strict joint-and-several liability regime. The

Ninth Circuit’s decision upsets this determination, and

threatens serious adverse consequences for the affected

industries.

“For example, since 1910, the mining industry has

generated 50 million metric tons of waste annually, only 5%

of which tests as “hazardous” under EPA standards. EPA,

Report to Congress, Wastes from the Extraction and

Beneficiation of Metallic Ores, Phosphate Rock, Asbestos,

Overburden from Uranium Mining, and Oil Shale at ES-12

(1985).

Significantly, honoring Congress’ decision to exclude

Bevill wastes from CERCLA regulation, notwithstanding their

hazardous constituents, does not threaten environmental

interests. First, in 1991, the EPA published its Regulatory

Determination and Final Rule for Special Wastes From

Mineral Processing ("Final Regulatory Determination"),

permanently exempting copper smelting slag -- together with

19 other mineral processing wastes -- from regulation as a

"hazardous waste” under Subtitle C of RCRA. 56 Fed. Reg.

27,300, 27,307 (1991)."' The EPA’s Final Regulatory

Determination thus confirms what Congress understood when

it passed the Bevill Amendment and incorporated the

exclusion for Bevill wastes in CERCLA: copper smelting slag

should not be regulated as a CERCLA “hazardous substance."

Second, under CERCLA, the EPA has substantial legal

authority and financial resources to respond to releases of

"pollutants and contaminants" -- even if they fall outside the

statute’s definition of "hazardous substances."'? 42 U.S.C.

§§ 9604(a)(1)(B), 9605, 9611(a). Finally, Bevill wastes

‘All other mineral processing wastes were deleted from

the Bevill exemption, 40 C.F.R. § 261.4(0)(7), and are

therefore subject to regulation as “hazardous” materials under

both RCRA and CERCLA.

'2"*Pollutant or contaminant’ is broadly defined in section

101(33)" to include “basically, any substance which may

reasonably be anticipated to cause harm to the environment."

Eagle-Picher Indus., Inc. v. United States EPA, 759 F.2d,

922, 931 (D.C. Cir. 1985); see 42 U.S.C. § 9601(33). The

definition contains no exemption for Bevill wastes.

Hazardous constituents of Bevill wastes released into the

environment are “pollutants or contaminants" within the

meaning of CERCLA section 101(33), 42 U.S.C. § 9601(33).

Eagle-Picher, 759 F.2d at 933. ,

continue to be regulated under “other applicable provisions of

Federal or State law ... .". 42 U.S.C. § 6921(b)(3)(A).

Il. CERCLA "Arrange For Disposal" Liability

The Ninth Circuit’s resolution of the second question

presented -- whether CERCLA "waste disposal” liability can

be imposed for the good faith sale of an industrial by-product,

which turns out to be defective for its intended use -- cannot

be reconciled with the statutory provisions governing such

liability, conflicts with the D.C. Circuit’s decision in

American Mining Congress v. United States EPA, 824 F.2d

1177 (D.C. Cir. 1987), contributes to the significant

confusion currently reigning in the federal judiciary over the

meaning of the CERCLA phrase “arrange for disposal,” and

seriously undermines important congressional policies designed

to encourage the recycling of materials with hazardous

constituents.

CERCLA section 101(29) defines “disposal” by

incorporating the RCRA definition of that term. 42 U.S.C. §

9601(29). “Disposal” is defined in RCRA as “the discharge,

deposit, injection, dumping, spilling, leaking, or placing of

any solid waste or hazardous waste into or on any land ... ."

42 U.S.C. § 6903(3). “Solid waste,” in turn, is defined as

"garbage, refuse, ... and other discarded material." 42

U.S.C. § 6903(27) (emphasis added).”

By incorporating RCRA’s carefully limited definitions of

"disposal" and "solid waste," Congress sought to insure that

CERCLA “waste disposal” liability would attach only to the

“affirmative act of discarding” a substance as “waste,” and

not to the “productive use” of that substance. 3550 Stevens

Creek Assocs. v. Barclays Bank, 915 F.2d 1355, 1361-62 (9th

Cir. 1990). Here, the jury found by special verdict that

'*"Hazardous waste” is a subset of “solid waste,” and is

comprised of wastes that are hazardous to human health or the

environment. 42 U.S.C. § 6903(5).

Asarco’s slag was a “product” for purposes of the WPLA,

possessing “intrinsic value” and having been "produced for

introduction into trade or commerce.” The jury also found

Asarco liable under the WPLA for selling a defective product.

Nonetheless, the district court imposed CERCLA "waste

disposal" liability on Asarco.

Implicitly recognizing the serious Seventh Amendment

problems inherent in the district court’s treatment of this

issue, the Ninth Circuit affirmed the district court’s holding,

but on different grounds. In so doing, the court fashioned a

new rule for CERCLA “waste disposal” liability, holding that

the "productive use” test applies only to "principal business

products," and not to “by-products.” This rule finds no basis

in the statutory definitions that dictate the "productive use"

test, directly conflicts with the D.C. Circuit’s decision in

American Mining, and does violence to the statutory limits on

CERCLA “waste disposal" liability that Congress has

imposed.

In American Mining, the court dealt conclusively with the

status of recycled by-products under RCRA (and hence under

CERCLA), holding that the EPA’s regulatory authority under

RCRA is limited to materials that are actually "discarded,

disposed of, thrown away, or abandoned." Jd. at 1190. The

court concluded that Congress purposefully chose to limit the

EPA’s authority, in order to encourage national recycling

activities. In a subsequent decision, the D.C. Circuit held

that these statutory definitions create a jurisdictional bar to the

EPA’s regulation of recycled industrial by-products.

The Ninth Circuit’s decision here, which is premised on

the conclusion that by-products inherently are "wastes,"

regardless of their subsequent use, stands in direct conflict

with these decisions from the D.C. Circuit, and the statutory

definitions on which they are premised. Indeed, following the

Ninth Circuit’s decision, a different panel of that court,

concerned about the viability of Asarco’s attempted distinction

between “principal business products” and “by-products,”

a Lm Ratha inet LS A

ee ce Oe Tce, ee

sought to limit that holding to circumstances where the by-

products are recycled in their "identical state,” rather than

being "reprocessed." This further distinction, like the one

announced in Asarco itself, is simply detached from any

Statutory mooring.

It is critical that the rules governing CERCLA “arrange

for disposal” liability be clearly articulated if Congress’ goal

of encouraging the recycling and reuse of products and by-

products is to be realized. Indeed, a recent decision from the

United States Court of Appeals for the Fourth Circuit, Owen

Electric Steel Co. v. Browner, No. 93-2195, 1994 WL

554656 (4th Cir. Oct. 12, 1994), suggests yet another test for

CERCLA "waste disposal" liability, further underscoring the

degree of confusion surrounding this issue, and the need for

guidance by this Court.

A. The Ninth Circuit’s Decision Cannot Be

Reconciled With The Statutory Scheme Governing

"Waste Disposal" Liability.

Numerous courts, including the Ninth Circuit, have

expressly recognized that CERCLA “waste disposal” liability

requires the release of a "solid waste" as defined under

RCRA, and thus “refer{s] only to an affirmative act of

discarding a substance as waste, and not to the productive use

of the substance." Stevens Creek, 915 F.2d at 1362

(emphasis added; citations omitted). Accordingly, courts have

held that the sale of a “useful product” does not constitute an

“arrangement for disposal." Amcast Indus. Corp. v. Detrex

Corp., 2 F.3d 746, 751 (7th Cir. 1993); accord AM Int'l,

Inc. v. International Forging Equip. Corp., 982 F.2d 989,

999 (6th Cir. 1993); Dayton Indep. Sch. Dist. v. U.S.

Mineral Prods. Co., 906 F.2d 1059, 1065 (5th Cir. 1990);

Florida Power & Light Co. v. Allis Chalmers Corp., 893

F.2d 1313, 1317 (11th Cir. 1990); United States v. Aceto

Agric. Chems. Corp., 872 F.2d 1373, 1381 (8th Cir. 1989).

As these courts have recognized, the “productive use” test

emanates from the statutory definitions themselves, which

reflect Congress’ deliberate choice to limit CERCLA liability

to instances of “waste disposal,” as those terms are defined in

RCRA. Stevens Creek, 915 F.2d at 1362.

On appeal, the Ninth Circuit rejected Asarco’s argument

that the jury’s special "product" verdict under the WPLA,

which was predicated on its finding that slag had been sold as

a “useful product,” precluded the imposition of CERCLA

"waste disposal” liability. The Ninth Circuit distinguished the

“productive use” cases on grounds that they “involved

products that were produced as the producers’ principal

business products, not by-products that the producers had to

get rid of.""* Pet. App. at B-22 n.6 (emphasis added).

The. Ninth Circuit’s purported distinction between

"principal business products” and “by-products” as

In reaching this conclusion, the Ninth Circuit relied

heavily on United States v. A&F Materials Co., 582 F. Supp.

842 (S.D. Ill. 1984), and other older cases holding under then-

existing regulations, that by-products constituted “waste” if they

were "sometimes discarded.” However, the Ninth Circuit’s

reliance on A&F Materials, and on the EPA’s regulations

implementing RCRA, was entirely ill-founded. First, the

regulation relied on in A&F Materials was amended in 1985,

and now provides that by-products “used or reused as effective

substitutes for commercial products” are not solid wastes --

significantly, slag was used as a commercial substitute for

gravel. 40 C.F.R. § 261.2(e)(ii), as amended by 50 Fed. Reg.

664 (1985). Secend, and even more broadly, these regulations

apply only to RCRA subtitle C “hazardous wastes,” 40 C.F.R.

§ 261.1(b)(1) -- a fact that the EPA has expressly recognized.

Hazardous Waste Management System; Definition of Solid

Wastes, 50 Fed. Reg. 627 (1985). Indisputably, copper

smelting slag is not a RCRA “hazardous waste.” Final

Regulatory Determination, 56 Fed. Reg. 27,300, 27,307 (1991).

determinative of CERCLA “waste disposal” liability simply

cannot be reconciled with the “productive use” test, or the

Statutory definitions on which that test is premised. Under

CERCLA, the controlling and only relevant inquiry is

whether the material was “discarded” as a “waste” or put to a

"productive use” -- a test that does not discriminate between

"principal business products” and “by-products.”

Significantly, while Asarco’s final petition for rehearing

and suggestion for rehearing en banc was pending before the

Ninth Circuit, a different three-judge panel of that court

issued an opinion, Catellus Dev. Corp. v. United States, 34

F.3d 748 (9th Cir. 1994), which recognizes the problems

inherent in Asarco’s attempted line-drawing, and seeks to

limit Asarco by forging a new test. The Catellus court

acknowledged, as Asarco had argued in its petition for

rehearing, that Asarco could not, on its face, be reconciled

with the applicable statutory provisions governing “waste

disposal” liability, or with the Ninth Circuit’s own recognition

of the “productive use” test in Stevens Creek. Id. at 750

(quoting Pet. App. at B-22). The Catellus court therefore

attempted to limit Asarco by finding that:

Asarco did not consider whether a by-product that is

intended for recycling should be classified as waste for

the purpose of section 107(a)(3) liability. Rather, the

facts [in Asarco] limited the scope of its statements to the

situation where the by-product being sold will have to

continue to be used in its identical state until it is

disposed of.

Id. at 751 (emphasis added).

Under Carellus’ suggested limitation of Asarco, unless a

by-product is “re-processed” or sold for use in other than its

“identical state, it is a solid waste.” However, this additional

distinction -- like Asarco’s original distinction between

“principal business products” and “by-products” -- is without

foundation in the statutory definitions governing CERCLA

“waste disposal” liability, has no relevance to the “productive

use" inquiry,’* and potentially threatens a wide variety of

current recycling activities.’

B. The Ninth Circuit’s Decision Conflicts With The

D.C. Circuit’s Decision In American Mining And

Adds To The Existing Confusion Regarding

"Arrange For Disposal" Liability Under CERCLA.

In American Mining, the D.C. Circuit held that the EPA

lacked RCRA authority to regulate by-products “that are

‘It should be noted that Catellus’ attempt to limit Asarco

to circumstances where the by-product has been sold in its

"identical state" is without factual basis in the Asarco record.

All of the slag at issue in this case was, in fact, processed

before being sold. Pet. App. at B-13. Furthermore, the EPA

regulations upon which the Catellus court relied, do not support

the distinction between materials recycled in their “identical

state," and those that are "reprocessed." Rather, the EPA

broadly exempts from its "solid waste" definition both by-

products “used or reused as ingredients in an industrial process

to make a product," and by-products “used or reused as

effective substitutes for commercial products.” 40 C.F.R. §

261.2(e)(i) and (ii).

‘For example, there are, at present, a significant number

of metals, classified as hazardous substances, that are

extensively recycled in the United States. See Staff, Div. of

Mineral Comm., Recycled Metals In the United States vi (U.S.

Dep’t Int., Bureau of Mines 1993). Under Catellus,

transferring those metals to a recycling facility may subject the

transferor to CERCLA "waste disposal" liability, unless they are

reprocessed into a new material, rather than utilized in their

"identical state” as secondary metals. Other materials recycled

in their identical state, such as off-specification chemical

products, which are currently exempt from RCRA regulation, 40

C.F.R. § 261.33, also may now be subject to CERCLA under

Catellus.

recycled and reused in an ongoing manufacturing or industrial

process.” 824 F.2d at 1186 (emphasis added). In so

holding, the court focused on the fact that such materials --

although not the primary object of manufacture -- were

neither “disposed of” nor “discarded,” and therefore did not

meet the definition of "solid waste” upon which RCRA

jurisdiction turns. /d. at 1185. The court rejected the EPA’s

argument that in RCRA, Congress had employed the concept

of “waste” in an open-ended manner that embraced materials

not technically “discarded, disposed of, thrown away, or

abandoned.” Jd. at 1190. Rather, the court found that

"RCRA was enacted ... in an effort to help States deal with

the ever-increasing problem of solid waste disposal by

encouraging the search for and use of alternatives to existing

methods of disposal (including recycling) ... ." Jd. at 1185-

86. The court found, therefore, that materials “destined for

beneficial reuse or recycling" may not be regulated as solid

wastes by the EPA because they “have not yet become part of

the waste disposal problem.” Jd. at 1186.'’ Under

American Mining, a by-product cannot be considered to have

been “disposed of” for CERCLA purposes if it has been

"In a later decision, the D.C. Circuit described these

limitations as a “jurisdictional bar” against the regulation of

“non-discarded” materials. Steel Mfrs. Ass'n v. EPA, 27 F.3d

642, 646 (D.C. Cir. 1994).

recycled and put to a “productive use." Asarco is

fundamentally irreconcilable with that decision.

Recently, the Fourth Circuit added yet another approach

to the “by-product-as-waste” issue in Owen Electric Steel Co.

v. Browner, No. 93-2195, 1994 WL 554656 (4th Cir. Oct.

12, 1994). Owen recycled and sold slag ~ a by-product of

its steel production -- to the construction industry for use as

aggregate in roadbeds. Before it was sold, however, the slag

was stored on the ground for up to six months. /d. at *4.

Purporting to rely on American Mining and subsequent case

law, the Fourth Circuit concluded that “the fundamental

inquiry in determining whether a byproduct has been

‘discarded’ is whether the byproduct is immediately recycled

for use in the same industry"; the court found that slag,

stored for ultimate sale to others as aggregate, was therefore

"discarded material.” Jd. Thus, under Owen, the sale of a

by-product can be regulated as a “waste disposal,” unless the

by-product is (i) immediately recycled, (ii) for use in the

same industry. As with Asarco and Catellus, the statutory

definitions governing CERCLA “waste disposal” liability

provide no foundation for the Owen holding.

"This conclusion is not altered by the fact that the by-

product turns out to be defective for its intended use. Absent

proof that the seller has employed a “deceptive guise” to dispose

of a hazardous substance in order to escape “waste disposal” |

liability, see Dayton Indep. Sch. Dist. v. U.S. Mineral Prods. |

Co., 906 F.2d 1059 (Sth Cir. 1990), it is improper to

superimpose CERCLA “waste disposal” liability on the sale of

products or by-products, even if they turn out to be defective;

such transactions remain the exclusive province of state products

liability laws and common law remedies. Neither the district

court nor the Ninth Circuit analyzed this as a “deceptive guise”

case, nor made any such finding.

Asarco, Catellus, and Owen simply add to the existing

confusion regarding the meaning of the CERCLA phrase

“arrange for disposal,” which already permeates the federal

judiciary. See Roger K. Ferland & Marilyn D. Cage, Using

RCRA to Interpret CERCLA Liability: What is “Arranging for

Disposal” ?, 23 Ariz. St. L.J. 445, 461 (1991) (noting that

"courts have been unsuccessful in devising a consistent or

coherent interpretation of CERCLA liability based solely on

the language of section 107(a)(3),” and that at least six

divergent lines of authority have evolved, most of which do

not refer to the applicable statutory definitions). This case

presents a timely and important opportunity for this Court to

provide much-needed guidance regarding the meaning of this

phrase, and CERCLA’s application to recycled materials.

C. The Ninth Circuit’s Decision Seriously Undermines

Important Congressional Policies Favoring

Recycling.

The importance of recycling is emphasized throughout

RCRA, and by extension, in CERCLA. In enacting RCRA,

Congress found that millions of tons of recoverable materials

are disposed of each year as waste, and that these materials,

if recovered and resold, could help reduce the national deficit.

42 U.S.C. § 6901(c). RCRA therefore established a national

policy of resource recovery that was to be implemented “by

encouraging ... materials recovery [and] properly conducted

recycling and reuse ... ." 42 U.S.C. § 6902(a)(6); see also

American Mining, 824 F.2d at 1185 (recounting RCRA’s

legislative history). The Ninth Circuit’s decision seriously

undermines these policies by subjecting good faith recycling

efforts to CERCLA’s strict joint-and-several liability regime —-

in clear derogation of Congress’ carefully chosen limitations

on such liability.

CONCLUSION

For these reasons a writ of certiorari should issue to

review the judgment and Opinion of the Ninth Circuit.

Respectfully submitted this 7th day of November, 1994.

M. Laurence Popofsky

Counsel of Record

Peter A. Wald

Steven S. Anderson

Heller, Ehrman, White & McAuliffe

Attorneys for Petitioner

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.