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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1995
- **Citation:** 513 U.S. 1103

## Text

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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

_
Wy

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

i
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.

ee

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

iv

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 )

Vv

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
il

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

vi

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

ix
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

x
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

xi
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

es

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

2

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.

4

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

5

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

6

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.

7

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
(C) of section 101(14), and that slag, which contained and
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.

8

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.

9

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).

10

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

1]

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

12

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

13

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
(C) extends, as it were, throughout all of section
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.

14

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.

15

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.

16

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.

17

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

18

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

19

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).

20

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. ,

21

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).

22

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

23

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

24

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).

25

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

26

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.

27

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).

28

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.

29

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.

30

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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_0778%3A1. Public record. Not legal advice.