# Petition for Writ of Certiorari — Atlantic Richfield Co. v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_0496%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2003 - **Citation:** 537 U.S. 1147 ## Text FILED (i) Supreme Court, U.S. woOZ 500 SEP 26 2002 INTHE OFFICE OF THE CLERK Supreme Court of the Giited States ATLANTIC RICHFIELD COMPANY AND TEXACO, INC., Petitioners, V. UNITED STATES OF AMERICA, ef al, _Respondents. Petition for a Writ of Certiorari to the United States Court of Appeals for the Ninth Circuit oe JOINT PETITION FOR A WRIT OF CERTIORARI JEAN A. MARTIN CARTER G. PHILLIPS* ATLANTIC RICHFIELD SIDLEY AUSTIN BROWN & COMPANY WOOD LLP 333 South Hope Street 1501 K Street, N.W. Los Angeles, CA 90071 Washington, DC 20005 (213) 486-0761 (202) 736-8000 Counsel for Petitioner Atlantic Richfield Company KATHERINE L. ADAMS DAVID H. BECKER CHARLES G. LAMBERT SIDLEY AUSTIN BROWN & CHEVRONTEXACO WOOD LLP CORPORATION 787 Seventh Avenue 2613 Camino Ramon New York, NY 10019 San Ramon, CA 94583 (212) 839-5300 (925) 973-4546 Counsel for Petitioners Counsel for Petitioner Atlantic Richfield Company Texaco, Inc. and Texaco, Inc. September 25, 2002 * Counsel of Record (202) 789-0096 — WASHINGTON, D. C. 20001 WILSON-EPES PRINTING Co., INC. — WX) ay \u\ \ os ES EE CT ERE TER CN INE TI NTT SEN RACY ERP ERS ease ets SERA IE ch ee AAS eaDy — PAR, aaa NEE we CoE ae RNR EN RE A Se a ol QUESTION PRESENTED Whether the United States is liable as a party who “ar- ranged” for the disposal of hazardous waste under Section 107(a)(3) of the Comprehensive Environmental Response, Compensation, and Liability Act when, in the exercise of its war powers, the United States exerted pervasive and coercive control over the manufacture of aviation gasoline necessary for World Wai II military operations and deprived the manu- facturers of the resources necessary properly to dispose of hazardous waste generated in the manufacturing process. (i) ii STATEMENT REQUIRED BY RULES 14.1 AND 29.6 Pursuant to Supreme Court Rule 14.1, the Petitioners state that the parties to the proceedings below were the United States of America, the State of California ex re/. California Department of Health Services, Hazardous Substance Ac- count and Hazardous Cleanup Fund, Shell Oil Company, Union Oil Company of California, Atlantic Richfield Com- pany, Texaco, Inc., Los Coyotes Estates Ltd., Ramparts Research & Financial Corporation, and Mcauley LCX Corpo- ration. Pursuant to Supreme Court Rule 29.6, Petitioner Atlantic Richfield Company states that its parent company is BP America Inc., which owns all the common stock of Atlantic Richfield Company. Petitioner Texaco, Inc. states that its parent company is ChevronTexaco Corporation, formerly known as Chevron Corporation, which owns all the common stock of Texaco, Inc. TABLE OF CONTENTS RUE IEe © IIE SEED 5.05 sss sseccesssnssccvassecssosessssanonns STATEMENT REQUIRED BY RULES 14.1 AND ge a ravens bind ans Go vans eaokinnas nedstnararse I GI PF MINE ORs sn sisscssisncseecssscccsnessnsenrnens ied cdicanasvetirsvesivier vonckexsoasrtansneresons lobes phtstacnsrsikvaenasdenensasscensexenxns RELEVANT CONSTITUTIONAL AND STATU- a ios cel sesehsysnsaesescssnnnconssaameattcenove STATEMEN! OF THE CASE ..........................00...... a 655s The Vertac cross-claimant, Hercules, was in a similar position to the Oil Companies, having been issued a federal directing [sic] ordering it to accelerate its production and delivery of Agent Orange, which resulted in Hercules’ total devotion of its manufacturing plant to the production of Agent Orange. 45a transportation for the raw materials, there can be no question but that it is “supplying” the raw materials within the meaning of Aceto. Further, the Government’s control, even daily control, over the output of avgas produced by the Oil Company defendants, was pervasive and omnipotent. The Government, through its various departments, boards and commissions, coerced the Oil Companies into producing avgas, knowing full well that the acid sludge would be dumped. Undisputed evidence pre- sented to this Court exists that during the relevant times the Government knew acid wastes were being dumped, and the Government attempted to divert the wastes, but its efforts were ultimately unsuccessful. When it was either unable or unwilling to allocate resources for the proper disposal of the wastes, the Government turned a blind eye to the problem. This is exactly the conduct that Congress intended to condemn, albeit retroactively, when it enacted CERCLA. 2. Did the Government Retain Ownership or Control of Avgas During Production? There is no question of fact with respect to the Government’s control over the production of avgas. It is undisputed that the Government, on a regular basis, controlled the specifications, quantities, delivery, and price of avgas. The undisputed facts reveal that the actions of the United States resulted in, as a practical matter, almost total control over the production of avgas. C. Under Traditional Notions of Arranger Liability Furthermore, certain facts have been presented to the Court upon which the Court could rest a traditional finding of arranger liability. The Government began to arrange for the disposal of acid wastes, by undertaking the responsibility for disposing of the sludge. Stip. Facts. at 87 (letter from PAW stating “sludge disposal problem was being left with WPB 46a since they have the over-all responsibility for industrial uses of acid’). The Government even undertook the rental of a storage tank, known as the Wilshire Storage Tank, for the disposal of some acid wastes. /d. at 78 (letter from WPB directing that DSC rent the storage tank from Wilshire). The Wilshire Tank stored spent alkylation acid for a short while, but, once filled to capacity, no other arrangements were made. As a result of a tank car shortage, the spent alkylation acid and the acid sludge were both dumped. The case law certainly supports the proposition that once an entity undertakes to arrange for disposal or treatment, it cannot abdicate responsibility when the disposal becomes infeasible. D. Conclusion as to the United States’ Arranger Liability Pursuant to CERCLA Section 107(a)(3) Accordingly, the Court finds that the Government acted as an arranger with respect to the production and output of avgas during World War II and is thus liable as an arranger under CERCLA. ORDER Based on the pleadings filed herein and pursuant to Fed. R. Civ. P. 56(c), the Court finds: (1) no genuine issues of material fact remain with respect to the United States’ immunity under CERCLA. Accordingly, the United States’ Motion for Partial Summary Judgment Based on Sovereign Immunity is DENIED; (2) no genuine issues of material fact remain with respect to the Government’s liability as an arranger under CERCLA Section 107(a)(3). Therefore, the Oil Companies’ Motion for Partial Summary Judgment Against the United States for Liability Under CERCLA Section 107(a)(3) is GRANTED. The United States’ Cross-Motion for Partial Summary Judgment on CERCLA Counterclaims is DENIED. 47a IV. OTHER MATTERS PENDING BEFORE THE COURT The United States’ Motion directed to benzol and toluene, with the consent of the parties, is declared moot. The United States’ Motion for Partial Summary Judgment on the Pleadings to Dismiss Counterclaims Six Through Twelve is taken under submission. This case is over four years old and has been the subject of protracted discovery. This Court has issued rulings regarding the liability of the principal parties in this litigation. From the Court’s perspective, the bulk of the issues remaining pertain to liability apportionment. Accordingly, pursuant to Local Rule 23.4, the Court orders the parties to participate in a Mandatory Settlement Conference. The Clerk is directed to initiate the procedure designated by Local Rule 23.5.4. It is ordered that within fifteen days of the date of this order, the parties shall submit a concise, joint status report, not to exceed ten pages, which shall disclose that which is required by Local Rule 6.4.2. It is further ordered that the parties shall file a Supplemental Joint Status Report, not to exceed three pages, within fifteen days of the settlement conference. The Supplement Joint Status Report shall inform the Court, quite specifically, of the posture, status and feasibility of settlement. All further proceedings in this litigation shall proceed forthwith. IT IS SO ORDERED. DATE: Sept 18, 1995 /s/ Robert J. Kelleher ROBERT J. KELLEHER SR. UNITED STATES DISTRICT JUDGE 48a APPENDIX C UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA [Filed Oct 12, 1999] CASE NO. Civ. 91 0589 RJK(Ex) FINAL JUDGMENT PURSUANT TO RULE 54(b) FRCP UNITED STATES OF AMERICA, et al., Plaintiffs, V. SHELL OIL COMPANY, et al., Defendants, AND RELATED ACTIONS WHEREAS this Court entered partial summary judgment on behalf of Plaintiffs, the United States of America and the State of California, against Defendants, Shell Oil Company, Inc., Atlantic Richfield Company, Texaco, Inc. and Union Oil Company of California (hereinafter the “Oil Companies”) on liability pursuant to the Complaint on September 29, 1993, in relation to the McColl Superfund Site located in the City of Fullerton, in Orange County, California; WHEREAS this Court entered a “Partial Consent Decree Among Plaintiffs and Oil Company Defendants Regarding Certain Cost Claims and Order” on December 12, 1994, which resolved Plaintiffs’ claims for recovery of costs incurred through approximately June 1990, which claims were paid by the Oil Companies in the ameunt of $18,000,000; and 49a WHEREAS the Partial Consent Decree, entered December 12, 1994, provides at paragraph 10 that the Judgment and Order filed by the Court on September 28, 1993, constitutes a declaratory judgment pursuant to 42 U.S.C. § 9613(g) (2) in favor of Plaintiffs against the Defendant Oil Companies for further response costs, which include all response costs with regard to the McColl Superfund Site incurred by the Plaintiffs after approximately June 1990; WHEREAS this Court entered partial summary judgment on behalf of the Oil Companies against the United States as Counterdefendant on liability pursuant to Claims I and II of the Oil Companies’ Counterclaim on September 18, 1995; WHEREAS this Court entered a Memorandum and Order on August 12, 1998, allocating 100% of the liability for CERCLA response costs at the McColl Superfund Site to the United States as Counterdefendant; WHEREAS the United States as Counterdefendant and the Oil Companies have stipulated to the response costs incurred or paid by the Oil Companies up to and including October 1998, in accordance with the terms of a “Stipulation” signed by the United States and the Oil Companies, dated September 30, 1999 (“Stipulation’’); WHEREAS the United States and the State of California, as Plaintiffs, have outstanding demands against the Oil Companies for response costs incurred by the Plaintiffs for the period beginning in approximately June 1990, plus prejudgment interest from the applicable dates of demand, which costs have not yet been stipulated to by the parties; WHEREAS the United States is presently responsible for 100% of the response costs incurred by the Plaintiffs, as a result of the Court’s Memorandum and Order of August 12, 1998; 50a WHEREAS the Plaintiffs have continued to incur response costs in relation to the McColl Superfund Site and intend to assert additional cost recovery claims against responsible parties; WHEREAS the parties have not completed their review of supporting documentation for the Plaintiffs’ outstanding response cost claims, but have established a schedule to do so in the near future; WHEREAS, subject to appeal, allocation of said response costs will be in accord with this Court’s Memorandum of Decision and Order entered August 12, 1998, and proceedings with respect to the determination of said costs will continue in this Court under its continuing jurisdiction until resolved by stipulation or further proceedings; WHEREAS the parties agree that Plaintiffs retain all their rights to pursue their claims for response costs to judgment in this Court, and the Oil Companies retain the right to seek allocation of those costs and additional response costs incurred since September 1, 1998, in accord with the Memorandum of Decision and Order entered August 12, 1998; WHEREAS on April 28, 1997, the Oil Company defendants on one side and defendant McAuley LCX Corporation on the other dismissed with prejudice cross claims filed against each other; WHEREAS on January 16, 1997, this Court entered a First Amended Consent Decree between Plaintiffs and Defendant, McAuley LCX Corporation, adjudicating all rights between said parties; WHEREAS on or about March 12, 1993, the Plaintiffs and the Defendant Oil Companies dismissed without prejudice their claims against defendants Los Coyotes Estates, LTD, and Ramparts Research & Financial Corp.; and Sla WHEREAS, based upon these circumstances, the Court finds that judicial efficiency will be promoted by the entry of a final judgment pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, as described below: THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED that: 1. Subject to its right to appeal the Court’s Orders dated September 18, 1995 and August 12, 1998, the United States as Counterdefendant shall pay to the Oil Companies the amount specified in the Stipulation, on the schedule and in accordance with the contingencies and other terms set forth in the Stipulation. Said payment shall represent response costs incurred by the Oil Companies, including amounts paid to the plaintiffs, up to and including October 1998. Interest shall be determined and payable as provided by U:S.C. § 9607. 2. The Court will retain jurisdiction over outstanding consent decrees and claims not yet adjudicated. 3. The Court determines under Rule 54 (b) of the Federal Rules of Civil Procedure that there is no just reason for delay in entering final judgment upon the Plaintiffs’ complaint and the Oil Companies’ counterclaim based on the partial summary judgments, consent decrees, orders, dismissals and stipulations heretofore described, and hereby expressly directs that final judgment be entered, and the same here is entered. Dated: Oct. 8, 1999 /s/ Robert J. Kelleher The Honorable Robert J. Kelleher UNITED STATES DISTRICT JUDGE Judgment entered. 52a STIPULATION 1. This STIPULATION (“Stipulation”) is entered into as of the 30th day of September 1999 between the Parties, the Plaintiff and Counterclaim-Defendant, UNITED STATES OF AMERICA (“United States”) and the Defendants and Counterclaim-Plaintiffs, Shell Oil Company, Inc., Atlantic Richfield-Company, Texaco, Inc. and Union Oil Company (hereinafter the “Oil Companies”). 2. The Parties hereby acknowledge that the United States is reserving all rights to appeal the Court’s Orders dated September 18, 1995 and August 12, 1998 (the “Orders”), and that the Oil Companies are reserving all rights to appeal the Court’s Order of September 29, 1993, and that nothing in this Stipulation shall in any way prejudice such rights of appeal. 3. In order to avoid any further litigation regarding the amount of the Oil Companies’ claimed response costs under Counts I and II of the Counterclaim in this matter, the Parties stipulate in compromise that the Oil Companies’ total claimed response costs (excluding interest but including payments made by the Oil Companies to Plaintiffs) through October 31, 1998 consists of the sum of $64,219,514.46. 4. If the orders are affirmed by a final order of a Federal district court from which there is no further appeal (hereafter, “final order”), or if the time for appeal from a final order runs without an appeal being filed, the United States shall pay to the Oil Companies the sum of $64,219,514.46. Such payments shall occur as soon as reasonably practicable after the United States receives notice of any final order, or upon the expiration of time for appeal without an appeal being filed. Interest shall be determined and payable as provided by 42 U.S.C. § 9607. In the event that the Orders are not affirmed in full, the Parties shall again negotiate in good faith to attempt to reach a stipulated payment for response costs. 53a 5. The parties stipulate that payment shall be in the form of Electronic Funds Transfer in accordance with instructions provided by the Oil Companies. 6. In the event that payments specified by this Stipulation are not made within one hundred and twenty days (120) days of the United States’ receipt of notice of a final order affirming the Orders, or upon the expiration of time for appeal without an appeal being filed, post-judgment interest on the unpaid balance shall be paid at the rate established pursuant to section 107(a) of CERCLA, 42 U.S.C. § 9607(a), com- mencing on the date the United States receives notice, or upon expiration of time for appeal, and accruing through the date of the payment. 7. The Parties to this Stipulation recognize and acknowledge that the payment obligations of the United States can only be paid from appropriated funds legally available for such purpose. Nothing in this Stipulation shall be interpreted or construed as a commitment or requirement that the United States obligate or pay funds in contravention of the Anti-Deficiency Act, 31 U.S.C. § 1341, or any other applicable provision of law. FOR THE UNITED STATES Lois J. SCHIFFER ASSISTANT ATTORNEY GENERAL ENVIRONMENT & NATURAL RESOURCES DIVISION Dated: 9/30/99 By: /s/ Joshua M. Levin JOSHUA M. LEVIN MICHAEL J. ZEVENBERGEN Environmental Defense Section United States Department of Justice 54a ALEJANDRO N. MAYORKAS United States Attorney JOHN RUBINER Assistant United States Attorney Central District of California Counsel for the United States of America FOR THE OIL COMPANY DEFENDANTS MUNGER TOLLES & OLSON Dated: 9-28-99 By: /s/ Ronald L. Olson RONALD L. OLSON PETER R. TAFT CYNTHIA L. BURCH Counsel for Shell Oil Company, Union Oil Company of California, Atlantic Richfield Company and Texaco, Inc. 5Sa APPENDIX D UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA [Filed Nov. 2, 1998] NO. CV 91-0589-RJK UNITED STATES OF AMERICA, Plaintiff, V. SHELL OIL Co., et.al., Defendants. MEMORANDUM OF DECISION AND ORDER RE GOVERNMENT’S MOTION FOR A NEW TRIAL The Government’s Motion for a New Trial is DENIED. Having reviewed the moving and opposition papers, the Court considers there are three issues that warrant brief discussion. The first issue involves the so-called “cost-plus” contracts. The Government and the Court are not defining the term “cost-plus” the same way, but the semantic distinctions between these definitions are unimportant. It remains true that different prices were paid to different manufacturers based upon their estimated costs. Whether one chooses to call these “cost-plus” contracts or “estimated cost-plus” contracts is of no moment. Each definition reflects that the Government’s need for the maximum quantity of avgas superseded its desire to keep costs to a fixed price, supporting the proposition that the Government would readily have assumed CERCLA costs had they been contemplated. The second issue involves benzol waste. The Government claims that its concession of liability for benzol waste was a 56a concession of some liability, not full liability. Even assuming that the Government did not concede any liability for benzol waste, the Court still allocates 100 percent of the cost of cleanup of benzol waste to the Government. The Oil Com- panies treated Government-owned benzol in the production of cumene, an avgas additive. Responsibility for the waste is fully allocable to the Government for the same reasons that avgas sludge is fully allocable to the Government. The third issue involves post-war dumping at the McColl Site. The Government contends that the liability for cleanup of avgas sludge ended when hostilities ended. This is clearly wrong for many reasons: the contract contained no such termination date; production of avgas for Government use continued for the entire period during which avgas sludge was produced; the production continued under the same Government dictated controls as applied during hostilities; War Production Board regulations continued for more than a year thereafter. It should go without saying that the economic relationship between the United States Government and American businesses did not instantly revert to a typical peacetime “market” economy on V-J Day. That some dump- ing occurred several months after the end of the war was considered by the Court in preparing the Memorandum of Decision and Order (“Order”). In any event, the record demonstrates that the Oil Companies turned to alternative disposal methods as rapidly as they became practicable. Accordingly, the Motion for New Trial is DENIED. The Oil Companies shall submit a Proposed Judgment. IT IS SO ORDERED. DATE: OCT 30, 1998 /s/ Robert J. Kelleher ROBERT J. KELLEHER United States District Judge 57a APPENDIX E UNITED STATES DISTRICT COURT C.D. CALIFORNIA. [Aug 11, 1998] No. CV 91-0589-RJK UNITED STATES OF AMERICA, Plaintiff, 5 SHELL OIL COMPANY, et al., Defendants. MEMORANDUM OF DECISION AND ORDER KELLEHER, District Judge. The Court has presented for adjudication the question of the allocation of liability for the cost of cleanup of the McColl Superfund Site, a significant and deleterious by-product of the World War II aviation gasoline program. The United States of America (“the Government”) has incurred substantial response costs in its attempts to clean up the McColl Site and seeks by this action to recover those costs from Shell Oil Company, Union Oil Company, Atlantic Richfield Company, and Texaco, Inc. (herein referred to as “Shell,” “Union,” “ARCO,” and “Texaco,” respectively and “the Oil Companies,” collectively). Recovery is sought pursuant to Section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), Pub.L. No. 96-510, as amended by the Superfund Amend- ments and Reauthorization Act of 1986 (“SARA”), Pub.L. 99-499, codified at 42 U.S.C. § 9607. 58a This Court has previously granted summary judgment holding both the Government and the Oil Companies liable as “arrangers” as this term is used in 42 U.S.C. § 9607. See U.S. v. Shell Oil Co., 841 F.Supp. 962, 975 (C.D.Cal.1993) (holding Oil Companies liable); September 18; 1995, Order (holding Government liable). Having found both the United States and the Oil Com- panies liable, all that remains is a determination, pursuant to 42 U.S.C. § 9613, of the proper allocation of response costs between the Government and the Oil Companies. The Court needs to determine only the percentage of liability allocable to the Government and the percentage of liability allocable to the Oil Companies.' The allocation issue was tried to the Court on February 17, 18, 19, 20, 23 and 24, 1998. Post-trial briefs were filed on April 2, 1998, and the matter stood submitted at that time. There is presented the task of deciding and determining a factual issue in a manner different from any previously encountered by this Court. The difference arises from the unique and unusual discretion reposed in this Court by statute, — which provides in relevant part: In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate. 42 U.S.C. § 9613(f)(1). Courts have consistently recognized the broad discretion afforded by this statute to the District Court both in the selection of equitable factors to be applied and in the application of those factors. In United States v. R.W. Meyer, Inc., 932 F.2d 568 (6th Cir.1991), the court noted: ' The Court need not determine the total amount of response costs nor determine the percentage of liability allocable to each individual company, -as the Oil Companies have reached an agreement as to how their liability will be apportioned among them. 59a Congress reemphasized that the trial court should invoke its moral as well as its legal sense by providing that the court use not just ‘equitable factors,’ which phrase already implies a large degree of discretion, but ‘such equitable factors as the court determines are appro- priate.’ This language broadens the trial court’s scope of discretion even further. Id. at 572. Thus, the Court finds itself in an unusual position—it is to act not only as a discretionary finder of fact but as a “finder of law” in a manner different from any usually required of a judicial officer acting in a non-jury proceeding insofar as the Court must choose which equitable factors are applicable-to this case. It is appropriate to consider early on the meaning, significance and proper application of the Court’s function in these circumstances. This function is something other, dif- ferent and more than the mere application of the rules of contract law to uncontested facts (as is largely the case here). In one sense, this case requires this court to determine in an unusual manner the rights, duties and obligations inter se of parties to a contract. But the problem is not that simple. In the fullest sense the Court is here faced with an unusual contract entered into in unusual times for unusual purposes under drastically different circumstances. The Court must here decide the relative obligations between the parties to a contract which is silent on the question here presented. Indeed, the question presented arises because of liability imposed by a statute enacted long after the contract was entered into and more than a generation after the contract was fully performed. This is a case in which the Court is required to take a long delayed hindsight view and make an appraisal of what was done to win a war. The Court is not to determine how well it 60a was done, nor who deserves praise or criticism for what was done— it was done magnificently. We won the war, and what was here done was essential in that accomplishment. This is a case in which allocating “fault” as such is inappropriate. No one was at fault. Each party did what was necessary to achieve a common, paramount goal: victory in World War II. Nevertheless, this matter calls for the allocation per statute of responsibility for the cleanup of the McColl Site. BACKGROUND The McColl Superfund Site comprises roughly twenty-two acres in Fullerton, California. The hazardous waste located at the McColl Site consists primarily of acid sludge byproducts resulting from alkylation and other acid treating processes used in the manufacture of 100-octane aviation gasoline (“avgas’’) and other refinery products during World War II. During the war, the Oil Companies produced avgas, the most critically needed refinery product for the war effort, in extraordinary quantities at the demand of, and in fulfillment of contracts with, the Government. As noted above, these contracts were silent on the question of who should bear the burden of waste treatment. The wartime economy A survey of the relevant legislative enactments and Executive Orders of the time shows the degree of control exercised by the Government over the wartime economy generally and the petroleum industry specifically. In May 1940, a National Defense Advisory Commission (“NDAC”) was established to render non-binding advice on procurement policy. The NDAC was succeeded in 1941 by the Office of Production Management (“OPM”), which established an early priorities system to expedite delivery of essential materials to the Army and Navy. In August 1941, the Supply Priorities and Allocation Board (“SPAB”’) was estab- 6la lished to coordinate scarce material deliveries among com- peting agencies of the United States. Shortly after the December 7, 1941, bombing of Pearl Harbor by the Japanese, Congress enacted the First War Powers Act “to expedite the prosecution of the war effort,” 55 Stat. 838, 839 (1941) (codified at 50 U.S.C.App. § 611 (repealed 1966)). This Act gave broad power to the President to issue Executive Orders concerning the war effort. In Jaruary 1942, President Roosevelt issued Executive Order 9024, which established the War Production Board. Pursuant to Executive Order 9024, the Chairman of the WPB was empowered to issue directives to industry in connection with war procurement and production, including directives with respect to purchasing, contracting, specification, construction, requisitioning, plant expansion, conversion and financing. At this time, the OPM and SPAB were eliminated and their duties were consolidated within the WPB. A subsequent order, Executive Order 9040, conferred upon the WPB the powers previously delegated to the Office of Production Management (“OPM”) which, under Executive Order 8629, included the authority to “[fJormulate and execute in the public interest all measures needful and appropriate in order . . . to increase, accelerate, and regulate the production and supply of materials, articles and equipment and the provision of emergency plant facilities and services required for the national defense’” and to “(flormulate plans for the mobilization for defense of the production facilities of the Nation, and to take all lawful action necessary to carry out such plans.” The WPB’s task was principally accomplished through use of intricate nationwide priority rankings system, under which the WPB ? To this end, the WPB maintained a short list of critical war products that were essential for combat activity. Avgas was on that list for the entire war. 62a reviewed requirements for goods appearing to be scarce, determined how much of each product or raw material was needed, and identified facilities to help meet this demand. Facilities were required to give priority to military contracts, and the President was authorized to regulate the flow of scarce raw materials where the use of such materials for national defense resulted in a supply shortage. Under Executive Order 9040, the WPB was delegated the authority vested in the President of the United States by Section 120 of the National Defense Act of 1916, ch. 143, 39 Stat. 213 (1916), previously conferred upon OPM under Executive Order 8629, to seize the plants which did not comply with production orders and to enforce production orders under threat of criminal penalties. The WPB’s authority was again expanded by Executive Order 9125, which delegated to the WPB the powers vested in the President by Title III of the Second War Powers Act, ch. 199, 56 Stat. 176 (1942). This act, passed in March 1942, authorized the WPB to allocate not just “materials” deemed to be in scarce supply, but “facilities” as well. Additionally, the WPB could require a company to produce a good needed for the war effort where it was within the company’s physical and technical capacity to do so. Executive Order 9125 provided that the Chairman of the WPB could exercise “the powers, authority, and discretion conferred upon him by this and any other Order through such officials or agencies . . . and in such manner as he may determine.” Additionally, there was a regulatory framework in place that specifically governed the petroleum industry. The United States set up the Office of Petroleum Coordinator for National Defense (“OPC”) in May 1941 under the President’s con- stitutional powers as Commander in Chief of the Army and x¢ x 4 F “ai s oy & y & & ai EMIS EPC SS EIRENE NOIRE UC ERI oN S88 F- Fo Sts AO. BEES PIX Sales RTN etn 63a Navy. The OPC’s early authority was limited to the issuance of “Recommendations.” In practice, as far as allocation of materials was concerned, the OPC and the OPM (later, the WPB), instituted a procedure by July 1941 whereby the OPC made priority determinations as to supplies for the petroleum industry and as to requirements for petroleum. On December 2, 1942, President Roosevelt issued Executive Order 9276, which established the Petroleum Administration for War (“PAW”), a successor to the OPC, “in order to coordinate and centralize the war policies and actions of the Government relating to petroleum with a view toward providing adequate supplies of petroleum for the successful prosecution of the war and for other essential purposes.” The order provided for the appointment of a Petroleum Admin- istrator whose duties included, inter alia, “establish[ing] basic policies and formulat[ing] plans and programs to assure for the prosecution of the war the conservation and most effective development and utilization of petroleum in the United States and its territories and possessions,” and “issu[ing] necessary policy and operating directives to parties engaged in the petroleum industry,” provided that no directive of the Admin- istrator conflict with any direction issued by the Chairman of the War Production Board. Thus, the petroleum industry was subject not only to the general oversight of the WPB, which set policy for and issued mandatory regulations for the acquisition and disposition of scarce materials, but to the more specific oversight of the PAW, which instituted a petroleum blending program under which it dictated the quantity and quality of avgas and required quarterly inventory reports from all refineries, authorized purchase of certain quantities of raw materials, and > Not until after the end of World War II was there a separate entity known as the Air Force. During all times here involved, the Army and the Navy each had its own aerial combat units. 64a instructed refineries with respect to manufacturing specifi- cations. The purpose of the these actions was to maximize the amount of avgas available to the Government for purchase in order to pursue the war effort. Throughout the war, policies and directives issued by the PAW remained technically subject to the review and approval of the WPB, but, in practical effect, the PAW’s authority as an allocation agency was al! but co-equal with the WPB. Indeed, with respect to some raw materials (such as sulfuric acid for alkylation), the authority of the WPB and the PAW overlapped. Suffice it to say, the petroleum industry was essentially required to cooperate with the Government in providing essential resources to support our fighting forces and was subject to pervasive oversight by the WPB, PAW and other agencies of the federal Government. Under the wartime regulatory regime, the WPB could compel a refinery to maximize -its existing capacity to produce avgas if that refinery had the ability to manufacture avgas. If the company refused to cooperate with the WPB or PAW, it would have been subject to takeover, and individuals who interfered with the Government’s regulation of industry and acquisition of supplies would have been subject to criminal prosecution.“ The existence of an extensive degree of oversight of the petroleum industry and its avgas program by the Government is corroborated by thousands of pages of deposition testimony and documentary evidence submitted in this case and simply cannot be disputed. It is at least of passing interest to note that this total and pervasive degree of oversight and control was exercised by * For example, when a rent dispute threatened to shut down 16,000 to 18,000 barrels a day of avgas production at a Cities Service refinery in 1945, the Government promptly seized the refinery in order to protect avgas production. 65a the executive branch of the Government. It was at all times the statutorily conferred power of the President that was exercised. In addition to this power, the President as Com- mander in Chief of the Army and Navy exercised his constitutionally granted power to run the war. It was he who decided that we should build and send to war thousands of fighting aircraft. It was he who announced in his 1942 State of the Union Address that the United States would build 45,000 fighting aircraft in 1942.° Despite the wartime circumstances and the attendant oversight of the Oil Companies by the Government, the relationship between the Government and the Oil Companies was a contractual one. The Government employed the Defense Supplies Corporation (“DSC”) to finance alkylation facilities and to enter into three-year supply contracts for the purchase of avgas on behalf of the military. These three-year contracts were used both as financial incentives for building new facilities and to establish a centralized purchasing program over the entire output of avgas. These contracts were of the “cost-plus” variety, meaning that the Government would reimburse the Oil Companies for all the costs of avgas production plus a small profit, typically between 6 and 7 percent of costs. Thus, different prices were paid to different avgas manufacturers, depending on the costs of production. These prices were negotiated individually with each refiner after the submission of detailed production costs by the refiner. Each of the Oil Companies entered into one or more such contracts with the DSC. Integral to the success of the avgas program was the Aviation Gas Reimbursement Plan (“AGRP”). The AGRP was a response to the Government’s recognition that the rapid expansion of avgas production would require manufacturers * In actuality, approximately 25,000 combat aircraft were constructed during 1942, and approximately 57,000 more were built in 1943. 66a to undertake extraordinary modes of operation which were often uneconomical and unanticipated at the time of the refiners’ entry into their avgas contracts. Among the activ- ities for which reimbursement could be sought under the AGRP were the shifting of gasoline components from refineries to others better able to utilize them, the readjust- ment of plant facilities and equipment, production of goods whose specifications. were frequently and uneconomically changed by the military, and the use of cumene to meet new specifications or to increase production from existing com- ponents. The AGRP provided that the Government would compensate refiners directly, and fully, for extraordinary expenditures in connection with these activities. These reimbursements were paid to permit maximum production and utilization of avgas, irrespective of cost, and to shift the burden of unforeseen losses from the Oil Companies to the Government.° The Government’s constantly growing demand for avgas became so great that the Oil Companies were hard pressed to meet that demand. Production increased from 40,000 barrels per day in December 1941 to 514,000 barrels per day in 1945. In order to meet demand, the Oil Companies were required to increase greatly their use of sulfuric acid, albeit not quite as dramatically as the production numbers might seem to indicate.’ As a byproduct of the enormous volume of fuel produced and acid used, the Oil Companies were confronted with quantities of spent alkylation acid and acid sludge that were too great to be reused, treated or disposed of under then- ® Indeed, the parties have stipulated that this was explicitly stated by PAW Administrator Ickes, who noted: “I know that maximum production may often result in uneconomic operations, but the provisions of the Aviation Gasoline Reimbursement Plan have been designed to permit Government to assume the burden of any such losses.” ’ The increase in sulfuric acid use was five-fold. 67a existing circumstances.* With at least tacit approval from the Government, the Oil Companies contracted with Eli McColl to transport waste away from their refining facilities and dump it at the McColl Site.? This dumping began in June 1942 anc continued until September 1946. Avgas production and avgas waste There were three types of waste dumped at the McColl site: (1) acid sludge from benzol production; (2) other acid sludge; and (3) spent alkylation acid. In a contract separate from the avgas program, Shell manufactured benzol for the Govern- ment. This process yielded acid sludge. The Government does not contest its liability for the benzol waste, which makes up between 5 and 6 percent of the waste at the McColl Site. The other two types of waste can be traced to the pro- duction of avgas. To meet the exacting octane and volatility requirements of the high-compression aircraft engines used at the time, the Oil Companies'” would blend several different elements to create the special fuel used in our nation’s high- performance aircraft in World War II. The first element was aviation base stock, which was similar to normal motor gasoline and composed 40 to 50 percent of avgas. Also added were iso-pentane, cumene and tetra-ethyl lead. These components made up between 10 and 35 percent of avgas. The final element (and the most important for purposes of this proceeding) was alkylate, which was produced by a process known as alkylation and composed 25 to 40 percent of avgas. * Prior to World War II, waste had been transported to and acceptably disposed of at other sites. ° On June 8, 1942, Eli McColl obtained a permit from the City of Fullerton to dump acid sludge at the McColl Site. It is undisputed that the dumping was legal at the time. '° Each of the Oil Companies named as parties operated one or more refineries in the vicinity of Wilmington, California, for the production of, among other things, avgas. 68a Alkylation involved combining molecules of lighter weight petroleum fractions to produce iso-octane. The most efficient method of producing alkylate was to mix iso-butane with butylene in the presence of 98 percent sulfuric acid.'' This process yielded the alkylate and a by- product of 89 percent spent alkylation acid. The spent alkylation acid was put to several productive uses by the Oil Companies. One such use was the acid treatment of avgas base stocks to remove sulfur compounds and thus improve the quality of the stocks. Another was the acid treatment of certain components before they entered the alkylation process in order to remove impurities and improve their quality. Additionaiiy, the spent alkylation acid was used by the Oil Companies in the manufacture of other, non-avgas products. All of these uses of the spent alkylation acid produced acid sludge. Thus, from the time it entered the refinery as “fresh” 98 percent sulfuric acid until its departure in the form of acid sludge, the acid could perform two functions: (1) alkylation, which would turn the acid into 89 percent spent alkylation acid and (2) acid treating of avgas components or other refinery products, which would transform the 89 percent spent alkylation acid into acid sludge. However, the quantity of spent alkylation acid on hand would, at times, exceed (often greatly) the amount that could be used for acid treating. This resulted in the dumping of 89 percent spent alkylation acid before it was used for acid treating. ANALYSIS As far as the application of relevant equitable factors is concerned, there are two determinations to be made that are of '' Sulfuric acid is used by refineries primarily as a catalyst or for treatment of product. Generally, it is not incorporated into products leaving the refinery. Thus, virtually ali of the acid coming into the refinery must leave the refinery after use. 69a obvious and overriding importance: (1) the percentage of the McColl Site waste attributable to the avgas program; and (2) the percentage of that waste for which each party is responsible. The first inquiry seeks to do by reason that which cannot be done by scientific trial; namely, to take a teaspoon, scoop up a measure of sludge and, through analysis of the sample, determine what percentage of the sludge in that teaspoon is avgas sludge. The second inquiry is more conventional. Once a percentage is affixed to the amount of sludge attributable to avgas production, it seeks to determine how much respons- ibility for that sludge the Government and Oil Companies each must bear. A. The Government's uncontested liability In this analysis where much is contested, but one of the few points of agreement is that the Government is wholly responsible for acid waste resulting from acid treating in the production of benzol. The parties have Stipulated that 9 percent of Shell’s waste sent to the McColl Site resulted from the acid treatment of benzol. The parties agree that Shell contributed at least 61 percent of the total waste at the McColl site.'* Thus, the Government is wholly responsible for that 5.5 percent (61 percent of 9 percent) of the total waste at the McColl Site. ' There are three different estimates of the percentage amount of Shell’s contribution, but 61 percent is the lowest estimate. 70a B. A minimum, but incomplete, estimate of the percentage of waste attributable to the avgas program 1. Spent alkylation acid The parties have agreed that the spent alkylation acid dumped at the McColl Site between late 1944 and early 1945 is entirely attributable to the avgas program. This consti- tutes approximately 12 percent of the total waste at the McColl Site. 2. Acid sludge The Court heard expert testimony from Robert Anderson, a refinery operations expert, who testified that 13 percent of the sludge at the McColl Site can be attributed to the avgas program. For reasons more fully explained in Section C, infra, the Court is not satisfied that this represents a complete accounting of waste attributable to the avgas program, but it is quite useful in providing at least a minimum estimate. C. 100 percent of the non-benzol waste at the McColl Site is attributable to the avgas program During the period in question, avgas was not the only product manufactured by the Oil Companies that required acid treating. The Oil Companies also produced motor fuel, kerosene, and lubricating oils, all of which were acid treated using spent alkylation acid.'? Thus, in the course of its transformation from 98 percent “fresh” sulfuric acid to acid sludge, the acid assisted in the manufacture of both avgas and other products. Not surprisingly, the parties have fundamentally different views as to how much of the sludge is attributable to avgas and how much is attributable to other products. 'S Althdugh some of these products were manufactured for the Government, to hold the Government liable on an arranger’ theory for sludge attributable to these products is beyond the scope of this case. See September 18, 1995, Order at 19. 71a 1. The Oil Companies’ “branding theory” The Oil Companies contend that all alkylation acid that was in any way a part of the manufacture of avgas should be attributed completely to the avgas program. The Government has, somewhat derisively, referred to this a the “branding theory’—that all sludge that has been involved in any way in the manufacture of avgas is to be “branded” as avgas sludge. Although this label is somewhat pejorative, it is precisely what the Oil Companies suggest. 2. The Government's “sponge theory” The Government’s theory can perhaps best be summarized by reference to an example used by their expert witness, Robert Anderson. Anderson testified that it is possible to determine what percentage of the acid sludge at the McColl Site is attributable to the avgas program by comparing the actual amount of sludge present with the amount that would have been present had the Oil Companies been using fresh acid instead of spent alkylation acid in the acid treatment of non-avgas products. He likened this increase to use of a wet sponge as opposed to-a dry sponge: Let’s consider [the sulfuric acid] to be a sponge. So we are soaking up all these bad molecules into the sponge, which is the acid water mixture. When that sponge becomes saturated with bad molecules, we’ve got to throw it away and we’ll throw it away at McColl. Now, had we started with fresh acid, we would have started with a dry sponge. It would have become saturated and we would have thrown away a sponge at McColl... Now, we are starting not with fresh acid, but with spent acid, which means it’s a damp sponge. It’s already got some bad molecules in it. When we saturate that, we wouldn’t be able to pick up as much because the 72a sponge started out damp. So at the damp sponge starting point we need a bigger sponge. (Tr. 558:13-559:2) 3. The Court’s theory Not surprisingly, the competing theories yield attribution results that are highly favorable to their proponents and come nowhere near adding up to 100 percent. The Court is not satisfied with either of the competing attribution theories proposed by the parties. The problem with the branding theory is that the acid was used—at least in part—to treat non-avgas products. The extent to which the waste problem at the McColl Site was aggravated due to this secondary use of the acid is ignored entirely by the branding theory. With respect to the Government’s theory, the assumption is that the same amount of acid treating of non-avgas products would have occurred irrespective of the existence of the avgas program. This is utterly implausible. The evidence shows with unquestionable certainty that the acid- treating of avgas base stock in the amount demanded by the Government was going to happen as it in fact happened irrespective of what the Oil Companies did with the leftover spent alkylation acid. The Companies had massive surpluses of spent alkylation acid that they would not have had but for the avgas program. It is surely the case that much of the acid treating of non- avgas products, acid treating that often was not necessary but merely preferable, occurred solely because the acid was on hand and had to be put to some use or dumped.’* It must also be true that greater quantities of non-avgas products subjected to acid treating were produced solely due to the presence of enormous excess quantities of spent alkylation acid and the ' Indeed, the spent alkylation acid could not even have been recycled due to the unavailability of tank cars and/or regenration plants. See Sections D2 and D3, infra. 73a increase in crude oil throughput at the refineries occasioned by the avgas program. In sum, both the Oil Companies’ and the Government’s attribution theories operate on the premise that the proper starting point for the analysis is 100 percent attribution to the other party. The Government’s theory then uses a “marginal waste created” (for lack of a better term) analysis in an attempt to determine the most favorable (i.e.smallest) attribution of waste to avgas. Essentially, the Government’s theory poses the question “Assuming (1) that all of the Oil Companies non-avgas use of acid would have occurred as it in fact did occur irrespective of the avgas program and (2) the sludge created from this amount of use is wholly attributable to the Oil Companies, how much extra waste did the acid treatment of avgas stocks create?” The Oil Companies’ theory poses the question “What percentage of the acid at the McColl Site ever went through the alkylation unit?” In the Court’s view, the proper question is “Given that all of the treatment of avgas stocks was going to occur as it in fact did occur irrespective of the Oil Companies’ plans to make other products using spent alkylation acid, how much additional waste was created by the Oil Companies secondary use of the acid?” In the thousands of pages of documents, deposition transcripts, and trial transcripts submitted in this action, this question goes unanswered. However, one important fact is clear: the primary contaminant at the McColl Site is the Hs Essentially, this adopts the baseline starting point set forth by the Oil Companies and the “marginal waste created” method of analysis set forth by the Government. Instead of applying that analysis to avgas (as the Government advocates), the Court seeks to apply that analysis to non- avgas products. 74a sulfuric acid. This. acid would be present in the same (or slightly greater) quantities irrespective of whether the Oil Companies had chosen to make secondary use of the acid for non-avgas products. Had the waste dumped at the McColl Site been purely spent alkylation acid, the Court (and presumably the parties) would readily attribute 100 percent of that waste to the avgas program. Without persuasive evidence that the secondary use of the spent alkylation acid substantially aggravated the waste cleanup problems at the McColl Site beyond what they would have been in the absence of that secondary use, the Court cannot say that the secondary use of the spent alkylation acid by the Oil Companies materially aggravated the waste treatment prob- lems at the McColl Site. Although the Court does not accept the Oil Companies’ attribution theory, it does adopt the result sought by the Oil Companies and finds that 100 percent of the non-benzol waste at the McColl Site is attributable to the avgas program. D. The Government should bear 100 percent responsibility for waste attributable to the avgas program After reviewing the evidence and applying such equitable factors as appear appropriate, the Court is convinced that the Government should bear total responsibility for any waste attributable to the avgas program for three reasons: (1) sucha result simply places a cost of the war on the United States and thus on society as a whole, (2) the Oil Companies were unable to transport avgas waste to Richmond for recycling due to the unavailability of tank cars, and (3) the Oil Companies were unable to construct treatment plants due to the WPB’s refusal to issue priorities. Each of these reasons appears to the Court to be a compeilingly appropriate equitable factor to support the Court’s conclusion. 75a 1. The sludge and the cost of its cleanup were costs of World War II This case is similar in many respects to FMC Corp. v. U.S. Department of Commerce, 786 F.Supp. 471 (E.D.Pa.1992), affirmed at 29 F.3d 833 (3rd Cir.1994). FMC involved a Virginia facility that manufactured high tenacity rayon for use in World War II. In 1982, inspections revealed that carbon bisulfide, a chemical used in the manufacture of high tenacity rayon, was present in the ground water in the vicinity of the plant. Consequently, the EPA began cleanup operations and notified FMC of its potential liability under CERCLA. In 1990, FMC filed suit, alleging that, as a result of the Government’s activities during World War Il, the United States was jointly liable with FMC as an “owner” and “operator” of the facility, and as an “arranger for disposal” of hazardous wastes there, within the meaning of 42 U.S.C. § 9607(a). In particular, FMC claimed that the Government became involved so pervasively in the facility that it effectively operated the plant along with American Viscose (the prior owner of the plant) and, accordingly, should share in the response costs. This argument prevailed in the District Court. In affirming the District Court’s finding of government liability,'° the Third Circuit wrote: Furthermore, we point out that at bottom our result simply places a cost of the war on the United States, and thus on society as a whole, a result which is neither untoward nor inconsistent with the policy underlying CERCLA. 29 F.3d at 846. '© In FMC, no allocation trial was held as the parties reached a settlement with respect to the allocation issues. 76a This statement is-of equal force in the context of this allocation proceeding. As discussed above, the avgas program is one in which the degree of Government oversight was extraordinarily high. Indeed, had the Oil Companies’ performance in the supply of avgas fallen short of requirements, the Government could have gone so far as to seize the plants. An allocation to the Government of liability for waste that is attributable to a war-time program is wholly consistent with the policy underlying CERCLA (as discussed in both the Third Circuit’s FMC opinion and this Court’s September 18, 1995, Order) and indeed simply places a cost of the war on the United States and thus on society as a whole. So long as responsibility being allocated is responsibility only for waste attributable to avgas production, it stands to reason that just as the American public stood to benefit from the successful prosecution of the war effort, so too must the American public bear the burden of a cost directly and inescapably created by the war effort, the production of avgas waste. 2. Tank cars were unavailable to the Oil Companies Furthermore, even if the Court were of the view that, during the pendancy of the war, the Oil Companies were responsible for facilitating the proper disposal of avgas waste, the Court is convinced that the Oil Companies had no reasonable recourse to on-land dumping of the sludge due to the conduct of the WPB. The Oil Companies have made a strong showing that this was indeed the case. In the years prior to the war effort, acid sludge was routinely transported in special lead-lined tank cars to the Shell Point facility in Richmond, California, for reprocessing into fertilizer. Between 1936 and 1939, when tank cars were available, the Oil Companies transported more than 86,000 tons of sludge to the Shell Point facility. 77a During the war, the lead-lined tank cars were needed by the Government for war purposes.’ Thus, the cars were rarely available for the transportation of sludge to Shell Point.'® Indeed, in his testimony before the Los Angeles Planning Commission in May 1942, Eli McColl stated that the reason he was applying for permit to dump waste at the McColl Site was that the Government would not allow his or the companies he represented to use tank cars to ship acid to northern California for use as fertilizer. Between 1941 and 1943, the total amount of sludge transported to Shell Point dropped to less than 2,000 tons. As soon as tank cars again became readily available near the end of the war,-the large-scale transportation of sludge to Shell Point-via tank cars resumed. Given the pattern of transport both before and after the war, one can be sure that had lead- lined tank cars been available throughout the war years, the Oil Companies would have made use of them. 3. The Government repeatedly rebuffed the Oil Com- panies’ attempts to obtain priorities to build regen- eration plants. From the beginning of the avgas program, the Government was aware that spent alkylation acid and acid sludge were produced in the manufacture of avgas and that increasing production of avgas would increase the amount of spent alkylation acid and acid sludge produced. The construction of new facilities to reprocess these avgas byproducts required WPB approval because without WPB approval the materials '7 Tronically, the primary war-related use for the lead-lined tank cars appears to be the transportation of fresh sulfuric acid. A WPB publication dated December 9, 1944, stated that it was not just sulfuric acid that was in short supply, but that “tank cars are more critical than the product they ” carry. '8 For the months of December 1943 through May 1944, Shell and Union were able to obtain tank cars to ship sludge to Shell Point. 78a needed for construction could not be obtained. Decisions on the construction of such plants were made pursuant to the WPB’s powers to allocate resources for the war effort. During the war, Shell sought to build a spent alkylation acid decomposition plant in Houston. It sought to spend more than $1 million of its own funds to this end. On October 13, 1944, the Inorganic Acids Committee of the WPB rejected this request on the ground that when considering the need for fresh acid, an original sulfuric acid plant could be built with fewer resources than a spent acid decomposition plant. Similarly, the stipulated facts establish than Texaco sought to build an acid reconcentrator to treat both spent acid and acid sludge as part of a larger proposal. The WPB eliminated this portion of the proposal on the ground that the acid requirements of Texaco could. be provided from other sources. After review of evidence of the denial of these two attempts to obtain priorities for the construction of treatment plants, as well the evidence submitted concerning the denial of the Tidewater request and the grant of the Stauffer request, it is clear that the Government’s policy with respect to spent acid or acid sludge was not to grant priorities unless the plant was needed to provide fresh acid for use in the manufacture of avgas. : It is likely that this policy was that which best furthered the war effort. However, it came at the expense of the environment as, in combination with the unavailability of tank cars, it left the Oil Companies with no reasonable choice but to dump acid sludge. Simply put, the Government’s war requirements created the waste and Government acts or omissions foreclosed the reasonable alternative methods of disposal (transportation via tank cars for recycling or construction of regeneration plants) of the waste. Having created the problem and foreclosed the possible solutions, the 79a Government will receive a 100 percent allocation of waste attributable to the avgas program. E. The benefits the Oil Companies received from the avgas program do not warrant any offset in favor of the Government. In addition to the profits the Oil Companies received under their avgas contracts, ii is clear from the evidence that the Oil Companies received economic benefits from the avgas program. Chief among these benefits was accelerated amortization of new facilities constructed during the war. This tax benefit allowed the Oil Companies to defer taxation. The Government contends that this is an equitable factor to be counted against the Oil Companies. The Court disagrees. The extent of this and other benefits is hotly contested, but the existence of the Renegotiation Acts greatly simplifies the inquiry. After the entry of the United States into World War II, Congress enacted the Renegotiation Act of 1942, or “First Renegotiation Act,” 56 Stat. 245 (1942). This act called for the renegotiation of wartime contracts after the end of the war and provided for the retention by the Government or repayment to the Government of excessive profits realized by those who entered into contracts with the Government “whenever, in-the opinion of the Secretary of a Department, the profits realized or likely to be realized . . . may be excessive...” Seeking to make administration more uniform, Congress rewrote the Renegotiation Act on February 25, 1944 (“Second Renegotiation Act”). The Second Renegotiation Act '9 The benefits of the accelerated amortization afforded by a Certificate of Necessity were among the profits considered under the Renegotiation Acts. 80a established a central War Contracts Price Adjustment Board, consisting of officials from contracting agencies. Pursuant to the regime set forth in the Renegotiation Acts, matters relating to profits from the contracts between the Government and the Oil Companies, termination costs, and all other issues concerning the instant contracts were settled between the parties in the late 1940s. Although this renegotiation does not legally estop the Government from contending that the Oil Companies garnered excessive profits, it strongly indicates that this was not the case. To be sure, the Oil Companies are, by any measure, very successful business entities. However, the Court is ill positioned to attempt to trace the profitability of the Oil Companies back to their avgas contracts. To the extent the Court considers it can make an independent determination of the profitability of the Oil Companies’ participation in the avgas program, it appears that the Oil Companies did not excessively profit. The accelerated depreciation allowances granted the Oil Companies can be viewed as merely part of the price of seeking the hasty construction of new avgas facilities in wartime, facilities predominantly built with the Oil Companies’ own money that would be far less expensive and better constructed if built in peacetime. Indeed, the tax advantages were available only to facilities built pursuant to Certificates of Necessity, which is to say that it had been determined that the construction, reconstruction, erection, installation, or acquisition of the facility was necessary in the interest of national defense. Furthermore, if a facility was determined to have full post- war value, it would not receive a Certificate of Necessity. Those facilities with limited post-war value would only receive Certificates of Necessity for costs in excess of post- war value. 8la The Government considered the tax advantages and other benefits received by the Oil Companies at least twice: once in the course of dealing during the war and once when the contracts were renegotiated shortly after the war. Each time, the Government determined that it was getting a fair deal, which is to say that the Oil Companies were not receiving undue benefits from the bargain at taxpayer expense. These determinations having been twice made by factfinders better situated both spatially and temporally than this Court, the Court will not revisit these determinations. In any event, the Government has failed to produce adequate evidence in these proceedings that it is entitled to an offset. Accordingly, the Court determines that the Government is not entitled to any © offset based upon benefits received by the Oil Companies. CONCLUSION In the final analysis, the Court has taken to heart as well as to mind the extraordinary problems here presented by World War II and this action. The Court has taken to heart and to mind the unusual mandate of the Congress to “us[e] such equitable factors as the Court determines are appropriate.””” In doing so, the Court has invoked “its moral as well as legal sense.”! CERCLA in its broad application discloses a long-delayed recognition by Congress that something drastic must be done about pollution of the earth and the atmosphere. The broad discretionary role assigned by Congress to judges presiding in allocation proceedings discloses recognition of the special need to avoid drastic and unfair imposition of liability on innocent parties. 9 42 U.S.C. § 9613(f)(1). 2! See United States v. R.W. Meyer, Inc., supra. 82a In looking at the CERCLA statute, it appears to the Court that Congress must thereby have had in mind unusual cases such as this. At very least, Congress appears to have decided to allow the District Judge to recognize an unusual case which calls for an unusual disposition. The benefits of avgas to the war effort were such that the United States was willing to incur almost any cost to obtain the maximum quantity and quality of avgas. Indeed, the Government paid substantially higher prices for gasoline produced by Government-built and- owned plants than it did to the party Oil Companies in order to meet its requirements. This willingness to absorb all costs irrespective of the impact on the final price of avgas was reflected in the both the “cost- plus” contracts for avgas and the existence of the AGRP. During World War II, neither the Government nor the Oil Companies foresaw that the method of disposal of acid waste to land at the McColl Site, which was done in a manner acceptable at the time, would years later be declared illegal and be subjected to a regulatory cleanup process. Despite the size of the response costs, the Court is confident that, had the future CERCLA regime been foreseen by the parties, the Government would have agreed to pay for the costs of cleanup of the McColl Site (or any other unforeseen cost) in the blink of an eye, just as it agreed to reimburse the Oil Companies for extraordinary expenditures under the AGRP. At one level, this case can be viewed as a sort of extension of the regime that included cost-plus contracts, the AGRP plan, and the Renegotiation Acts. This is a regime that sought to win a war at any dollar cost without allowing those whose cooperation was needed to make excessive profits. After the war, it was determined that the Oil Companies profits were not excessive but merely reasonable. The post hoc imposition of the costs here at issue more than fifty years after full performance of the contracts would surely alter that determination. 83a In conclusion, the war caused the problem and like myriad others the burden must rest on the United States, which is all of us. The United States won the war and all of us paid the costs at the time. This is another such cost merely long delayed. Having found that (1) 100 percent of the benzol-related sludge at the McColl Site is attributable to the United States, (2) 100 percent of the non-benzol sludge at the McColl Site is attributable to the avgas program and (3) the United States is wholly liable for all sludge at the McColl Site that is attributable to the avgas program, the Court finds, pursuant to 42 U.S.C. § 9613(d), that the proper allocation of response costs between the Government and the Oil Companies is as follows: 100 percent allocation of liability to the United States and zero percent allocation of liability to the Oil Companies. The foregoing factual recitals and determinations shall constitute the Court’s Findings of Fact and Conclusions of Law. Each such finding of fact and conclusion of law has been considered and used by the Court in reaching its allocation of response costs. Judgment will be entered accordingly. IT IS SO ORDERED. 84a APPENDIX F UNITED STATES DISTRICT COURT C.D. CALIFORNIA [Filed Sept. 28, 1993] No. CV 91-0589-RJK UNITED STATES OF AMERICA, et al., Plaintiffs, V. SHELL OIL Co., et al., Defendants. And Related Claims. MEMORANDUM OF DECISION AND ORDER KELLEHER, District Judge. In this action, the governments of the United States and the State of California (collectively “the governments”) seek to recover costs incurred, and declaratory relief as to liability for costs yet to be incurred, in responding to the presence of hazardous wastes at a site in Fullerton, California known as - the McColl Site (“the Site”). Recovery of response costs is sought pursuant to section 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), Pub.L. No. 96-510, as amended by the Superfund Amendments and Reauthorization Act of 1986 (“SARA”), Pub.L. 99-499, codified at 42 U.S.C. § 9607(a). Declaratory relief is sought pursuant to CERCLA section 113(g)(2), codified at 42 U.S.C. § 9613(g)(2). The governments seek recovery from: Shell Oil Com- pany (“Shell”), Union Oil Company of California (“Union” or “Unocal”), Atlantic Richfield Company (“Arco” or 85a “Richfield”), and Texaco, Inc. (“Texaco”) (collectively “the oil companies”) and McAuley LCX Corporation (“McAuley”).! The oil companies are charged as successors in interest to the corporations that generated the. hazardous wastes and arranged for their disposal at the McColl Site. McAuley is charged as an owner or operator of part of the McColl Site. The governments move the Court for partial summary judgment as to Defendants’ liability for response costs at the McColl Site under section 107 of CERCLA.” The parties also have filed opposing motions for bifurcation and _trifur- cation of various phases of this litigation. These relate to the order in which the governments’ cost recovery phase and the Defendants’ counterclaims and cross-claims are resolved. By this Memorandum of Decision and Order the Court disposes of all these pending matters. BACKGROUND The McColl Superfund Site comprises roughly twenty-two acres in Fullerton. It is bordered by housing developments, a country club golf course, a regional park, and an oil field. The Site is divided into two distinct areas: the Ramparts area and the Los Coyotes area. The Ramparts area occupies vacant land. It contains six large pits, or sumps. The Los ' The governments originally named Ramparts Research & Financial Corporation (“Ramparts”); and Los Coyotes Estates, Ltd. (“Los Coyotes”) as defendants as well. There is no indication in the record that either Ramparts or Los Coyotes was ever served, and neither has appeared in the case. On March 11, 1993, the governments voluntarily dismissed their claims against Ramparts and Los Coyotes. On March 15, 1993, the oil companies voluntarily dismissed their cross-claims against LCE and Ramparts. Thus, Ramparts and Los Coyotes are no longer defendants in this action. The governments filed separate parallel motions for summary judg- ment as to the liability of the oil companies and McAuley. 86a Coyotes area is land that once was part of the Los Coyotes Country Club golf course. It contains six sumps which underlie what were portions of the golf course. The hazardous waste located at the McColl Site consists of acid sludge byproducts of alkylation processes used by the oil companies during World War II to produce high octane aviation fuel. During the war, the oil companies produced this aviation fuel in extraordinary quantities at the demand of, and in fulfillment of supply contracts with, the federal government. The oil companies have submitted many thousands of pages of deposition testimony and documentary evidence to illustrate the degree of oversight exercised by the federal government over the oil companies’ production of this aviation fuel. A clear picture emerges from this evidence of the backdrop of federal governance over the oil companies during the war. In addition, the Court possesses considerable first-hand familiarity with the manner in which the govern- ment regulated industry during the war. As part of the United States’ war effort during World War II, the federal government implemented a regulatory regime under which all industries were required to cooperate with the government in providing the necessary armaments and supplies to support our fighting forces. Not unlike other industrial sectors, the petroleum industry was subject during the war to pervasive oversight by agencies of the federal government. Under the wartime regulatory regime, an oil company that refused to cooperate with the federal gov- ernment would have been subject to government takeover. And individuals who interfered with the government’s regulation of industry and acquisition of supplies would have been subject to criminal prosecution. Notwithstanding the government’s intrusive regulatory power over the oil companies during the war, it is beyond 87a dispute that the oil companies entered into their contracts to supply the federal government with aviation fuel volitionally. In what measure the oil companies’ willingness to enter into these supply contracts was due to a sense of civic duty, as opposed to the evident profitability of the contracts, is impossible to determine and immaterial to the issues presently before the Court. During the war the government’s constantly growing demand for aviation fuel became so great the oil companies were hard pressed to meet that demand. As a byproduct of the enormous volume of fuel produced, the oil companies were confronted with quantities of acid sludge waste too great to be treated or disposed of in their existing facilities. The government urged the oil companies not to allow the accumulation of this waste to interfere with the production of aviation fuel. With at least tacit approval from the gov- ernment, the oil companies disposed of their waste problem by contracting with Eli McColl to transport the acid sludge away from their refining facilities and dispose of it by dumping it in the unlined pits, or “sumps,” on the plot of land in Fullerton now referred to as the McColl Site. Although the government was aware, and in some measure approved, of the oil companies’ disposal of the acid sludge, the choice to arrange for waste disposal in the manner described was made by the oil companies. The dumping of acid sludge at the McColl Site ceased shortly after the end of World War II. In the 1950s, the City of Fullerton requested that McColl fill in the acid sludge- filled sumps in preparation for residential development in the immediate vicinity of the Site. McColl requested and received assistance from the oil companies, who acknowl- edged their responsibility for the presence of the acid sludge in those sumps. Some time after the sumps had been covered over, the Los Coyotes Country Club was built and part of the Site was 88a developed into a portion of the club’s golf course. McAuley subsequently purchased the club, which it has owned and operated for over a decade. Prior to purchasing the club, McAuley was made aware of the presence of the sumps beneath the golf course and commissioned an environmental assessment in late 1980, shortly before purchasing the club. For over a decade, the acid sludge at the McColl Site has been oozing up through the surface of the ground. -There are approximately 100,000 cubic yards of waste and contam- inated soils at the Site. The waste at the Site includes benzene, toluene, xylene, arsenic, sulfur dioxide, hydrogen sulfide, and tetrahydrothiopene. STANDARD OF REVIEW In ruling on a motion for summary judgment, the Court must determine whether, viewing the evidence in the light most favorable to the nonmoving party, there are any genuine issues of material fact. Fed.R.Civ.P. 56(c); Federal Deposit Ins. Corp. v. O'Melveny & Myers, 969 F.2d 744, 747 (9th Cir.1992) (citing Gizoni v. Southwest Marine, Inc., 909 F.2d 385, 387 (9th Cir.1990), aff'd, 502 U.S. 81, 112 S.Ct. 486, 116 L.Ed.2d 405 (1991)). Summary judgment is appropriate whenever the pleadings and evidence establish that there are no genuine issues as to any material fact. Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986); Manzanita Park v. Insurance Co. of North America, 857 F.2d 549 (9th Cir.1988). Thus, summary judgment should be granted so long as the evidence before the court demonstrates that after adequate time for discovery, there is an absence of evidence to support the nonmoving party’s case. Celotex Corp. v. Catrett, 477 U.S. 317, 322-25, 106 S.Ct. 2548, 2552-54, 91 L.Ed.2d 265 (1986). There is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a “reasonable jury” to return 89a a verdict for that party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-51, 106 S.Ct. 2505, 2510- 11, 91 L.Ed.2d 202 (1986). Evidence that is merely colorable or that is not “significantly probative” does not raise a genuine issue of material fact and the mere possibility that the nonmoving party may discredit the moving party’s testimony at trial will not suffice to defeat a properly presented motion. United Steelworkers of America v. Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir.1989) (en banc) (citing Anderson, 477 U.S. at 249-50, 106 S.Ct. at 2510-11). Courts have readily granted summary judgment as to various issues, including liability, in the context of potentially intractable CERCLA cases. E.g., Amoco Oil Co. v. Borden, - Inc., 889 F.2d 664, 668 (Sth Cir.1989); United States v. Stringfellow, 661 F.Supp. 1053, 1058 (C.D.Cal.1987). DISCUSSION In order to establish liability for response costs pursuant to section 107 of CERCLA, the governments must establish four elements: (1) the McColl site is a “facility”; (2) a “release” or “threatened release” of a “hazardous substance” from the site has occurred; (3) the release or threatened release has caused the governments to incur response costs; and (4) the defend- ants fall within at least one of the four classes of covered persons. ) CERCLA “generally imposes strict liability on owners and operators of facilities at which hazardous substances were disposed.” 3550 Stevens Creek Assocs. v. Barclays Bank of California, 915 F.2d 1355, 1357 (9th Cir.1990). Section 107(a) provides in pertinent part: Notwithstanding any other provision or rule of law, and subject only to the defenses set forth in subsection (b) of this section— 90a (1) the owner and operator of a... facility, (3) any person who . . . arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at any facility or incineration vessel owned or operated by another party or entity and containing such hazardous substances, ... ... from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance, shall be liable for-- (A) all costs of removal or remedial action incurred by the United States or a State . . . not inconsistent w’th the national contingency plan... . 42 U.S.C. § 9607. Congress intended that responsible parties, not the general citizenry, “bear the costs of protecting the public from hazards produced in the past by a generator, transporter, consumer, or dumpsite owner or operator. . . .” Senate Comm. on Environment and Public Works, S.Rep. No. 848, 96th Cong., 2d Sess. 98, (1980) reprinted in, 1 CERCLA Leg.Hist. at 405 (1980). And Congress intended to make parties covered by section 107(a) strictly liable, in that no showing of fault is required, for response costs, subject only ~ to the limited affirmative defenses set forth in section 107(b). New York v. Shore Realty, 759 F.2d 1032, 1042 (2d Cir.1985) (citing 126 Cong.Rec. 30,932 (statement of Sen. Randolph)). Among responsible parties, that is all parties covered by the four classes, liability is joint and several. E.g., United States 9la v. American Cynamid Co., 786 F.Supp. 152, 164 (D.R.1.1992); United States v. Stringfellow, 661 F.Supp. 1053, 1060 (C.D.Cal.1987); United States v. Chem-Dyne Corp., 572 F.Supp. 802, 811 (S.D.Ohio 1983), cited with approval in House Committee on Energy & Commerce, H.Rep. No. 253, 99th Cong., 2nd Sess. Pt. 1, at 74 (1985) 1986 U.S.Code Cong. & Admin.News pp. 2835, 2856. The Court construes CERCLA’s liability provisions liberally with a view toward facilitating the statute’s broad remedial goals. Kaiser Aluminum & Chemical Corp. v. Catellus Dev. Corp., 976 F.2d 1338, 1340 (9th Cir. 1992); Wickland Oil Terminals v. ASARCO, Inc., 792 F.2d 887, 892 (9th Cir. 1986). A. The McColl Site is a Facility under Section 101(9) Under section 101(9) of CERCLA “facility,” as used in CERCLA, includes within its meaning “any . . . well, pit, pond, lagoon, impoundment, ditch, landfill, storage container, _.. Or... any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located... .” 42 U.S.C. § 9601(9). An area or site is a facility within the meaning of CERCLA if a hazardous substance is placed there or has otherwise come to be located there. 3550 Stevens Creek Assocs. v. Barclays Bank of California, 915 F.2d 1355, 1360 (9th Cir.1990), cert. denied 500 U.S. 917, 111 S.Ct. 2014, 114 L.Ed.2d 101. An affidavit attesting to the presence at a site of hazardous substances including toluene and xylene is sufficient to establish that the site is a “facility” for CERCLA purposes. United States v. Hardage, 761 F.Supp. 1501 (W.D.OkI.1990). The waste in the pits is characterized by low pH, high sulfur and high organic content. Among other arguably hazardous substances contained in the waste at the McColl site are benzene, toluene and xylene. Declaration of John 92a Blevins at 5, Exhibit 10 at 186. It is beyond dispute that at least these three substances are hazardous substances under CERCLA. See 40 C.F.R. § 261.33(e)-(g) (1992). The listing of a substance as hazardous, not its concentration or amount, controls the identification of hazardous substances under CERCLA. City of New York v. Exxon Corp., 744 F.Supp. 474 (S.D.N.Y.1990). Thus, there can be no dispute that the so-called sumps filled with acid sludge on the McColl Site contain hazardous substances and so constitute a facility under section 101(9). Thus, the Court concludes the McColl Site is a facility for purposes of section 107 liability. B. Release or Threatened Release of Hazardous Sub- stances at the McColl Site Arguably, the dumping of the acid sludge into the unlined pits on the McColl Site itself constitutes a release within the meaning of section 101(22). But the Court need not reach that issue. Since at least 1980, when the EPA became involved in the site, the acid sludge—a black, viscous, tar- like material—has been seeping up through the soil cover to the surface. Blevins Declaration at 5, Exhibit 10 at 186; Deposition of John Blevins at 74- 75, 98-101, 102-04, Exhibit 11 at 193-94, 200-03, 204-06; see also Exhibit A of Blevins Declaration, Exhibit 10 at 190-91 (color reproductions of photographs showing lava-like flows of the sludge at various places on the McColl site, some quite close to residences). These seeps clearly are releases into the environment, and the fact that they continue to occur presents an ongoing threat of further release of hazardous substances into the environment. In addition, once the sludge breaks the ground surface benzene, toluene, xylene, and hydrogen sulfide are released into the atmosphere—another release of hazardous substances into the environment. 93a Finally, there is some evidence that substances in the acid sludge deposited at the McColl Site may have migrated into groundwater 230 feet below the surface. The fact that the sludge was dumped into unlined pits, the shown tendency of the sludge to migrate through strata of soil, and the detection of volatile substances known to be present in the sludge in groundwater are sufficient to establish at least a threatened release of hazardous substances into the groundwater. In light of this showing, the Court concludes that there is no genuine dispute regarding the fact that releases of hazardous substances from the McColl Site have occurred and a continuing threat of further releases exists. C. Governments’ Costs in Responding to the Release or Threatened Release of Hazardous Substances at the McColl Site Defendants do not dispute, and the record manifests beyond dispute, that the governments have incurred response costs at the McColl Site within the meaning of section 107(a). D. Defendants’ Status as “Covered Persons” Under Section 107(a) The record before the Court establishes beyond dispute that the oil companies generated the hazardous waste dumped at the McColl Site, and that they contracted with Eli McColl to transport the waste to, and dump it in the sumps on, the McColl Site. Consequently, the oil companies are properly charged as generators and arrangers under section 107(a)(3), 42 U.S.C. § 9607(a)(3). In addition, it is undisputed that McAuley is the present owner of a portion of the McColl Site containing much of the - hazardous waste. Moreover, McAuley is the operator of a country club with a golf course on that portion of the McColl Site. Thus, McAuley is properly charged as an owner and operator under section 107(a)(1), 42 U.S.C. § 9607(a)(1). 94a Thus, the Court concludes as to all Defendants there is no genuine issue regarding any of the four elements under section 107(a). However, Defendants have raised a number of defenses to the imposition of liability, and the Court now turns to those defenses not previously stricken. II. Section 107(b) Defenses Defendants assert both the act of war defense under section 107(b)(2) and the acts of a third party defense under section 107(b)(3) of CERCLA. With CERCLA’s basic remedial purposes in mind, the Court narrowly construes the defenses provided under section 107(b). New York v. Shore Realty, 759 F.2d 1032, 1048-49 (2d Cir.1985); Kelley v. Thomas Solvent Co., 727 F.Supp. 1532, 1540 n. 2 (W.D.Mich.1989); see also Pinhole Point Properties, Inc. v. Bethlehem Steel Corp., 596 F.Supp. 283, 286 (N.D.Cal.1984) (contrasting “extremely limited” defenses under section 107(b) with “extremely broad” scope of liability under section 107(a)). Moreover, “in light of the ‘sole cause’ limitation,” the defenses enumerated in section 107(b) are viewed as extremely restricted. See 2 The Law of Hazardous Waste: Management, Cleanup, Liability Litigation § 14.01[8][b] at 14-160.3 (Susan M. Cooke, ed.). A. Act of War Defense Section 107(b)(2) of CERCLA provides an exemption from liability for an otherwise liable party where the defendant can establish by a preponderance of the evidence that the release was “caused solely by . . . an act of war.” 42 U.S.C. § 9607(b)(2). The oil companies invoke this defense on the ground the federal government’s requisitioning of aviation fuel and regulation of the production of aviation fuel’s production during World War II constitutes an act of war under section 107(b)(2). The oil companies do not squarely confront the formidable hurdle of the “sole cause” 95a requirements for all section 107(b) defenses. However, the oil companies maintain they dumped the acid sludge at the McColl Site only because the government required them to produce quantities of aviation fuel so great that they had no alternative means of disposing of the waste produced by the alkylation process. The Court has found no judicial construction of section 107(b)(2). The term “act of war” is undefined in CERCLA and, though familiar from common usage, does not disclose its parameters on its face. Nor is there any precedent clearly defining the term. Therefore, the Court looks to the structure and purpose of CERCLA, the legislative history, and a decisional law addressing the applicability of the term “act of war” in other contexts. In addition, as the term “act of war” appears to be a term of art borrowed from international law, the Court looks to sources addressing the meaning of “act of war” in that field. Insofar as CERCLA’s overall structure may shed light on the proper construction of the act of war defense, the Court notes that the provisions imposing liability under CERCLA are sweeping in their language and scope, while the provisions exempting parties from liability are narrowly drawn. Compare 42 U.S.C. § 9607(a) (imposing liability) with 42 U.S.C. § 9607(b) (providing three narrow and purportedly exclusive defenses to liability) and 42 U.S.C. § 9601(35)(A)(i) (narrow provision for “innocent landowner” defense added by SARA). This counsels against the expan- sive construction of “act of war” urged on the Court by the oil companies. The legislative histories of CERCLA and SARA are devoid of any explanation of what Congress meant by its use of the term “act of war.” However, the legislative histories of both CERCLA and SARA indicate beyond any doubt that CERCLA’s sponsors intended the scheme of liability under CERCLA to be, in effect, one of strict liability and the 96a defenses enumerated in section 107(b) to be narrowly construed.’ Moreover, in amending CERCLA through SARA, Congress expressly endorsed judicial construction of section 107(a) that imposed strict liability. See H.Rep. No. 253, Pt. | at 74 (quoting with approval United States v. Chem-Dyne Corp., 572 F.Supp. 802, 810 (S.D.Ohio 1983)), reprinted in 1986 U.S.C.C.A.N. pp. 2835, 2856. On the basis of the legislative history, and with CERCLA’s overall slant in favor of imposing liability, one leading commentator has opined that the act of war defense presumes “governmental sponsorship” and “formalization of hostil- ities,” and contemplates “a confrontation of organized forces, acts of state, massive violence, and overwhelming influence that are unlikely to be found in the domestic Superfund context.” 4 William H. Rodgers, Jr., Environmental Law: Hazardous Wastes and Substances § 8.13(C)(3)(c) (1992) (pointing to “the environmental terrorism inflicted on the air and water of the Persian Gulf by the troops of Saddam Hussein” as an archetypal example). Another commentator takes the not dissimilar view that the “act of war” defense contemplates “man-made catastrophes beyond the control of any responsible party.” 2 The Law of Hazardous Waste: Management, Cleanup, Liability Litigation § 14.01[8][b] at 14-160.3 (Susan M. Cooke, ed.). . Cong.Rec.—House H11787, Dec. 3, 1980 (remarks of Rep. Florio) (“The standard of liability . . . is intended to be the same as that provided in section 311 of the Federal Water Pollution Control Act; that is strict liability.”), reprinted in 2 Superfund: A Legislative History 168 (Helen Cohn Needham, ed. 1984); id. at 11788 (view of Dept. of Justice expressed in letter to Rep. Florio) (“Caselaw construing section 311 clearly indicates that not only are the defenses to be narrowly construed but the plain meaning of the regime establishes a strict liability standard.”), reprinted in Superfund, supra at 169; S.Rep. No. 848, 96th Cong., 2d Sess. 13, reprinted in 2 Superfund, supra at 483; H.Rep. No. 1016, 96th Cong., 2d Sess. 33, reprinted in 1980 U.S.C.C.A.N. pp. 6119, 6136; H.Rep. No. 253, Pt. | at 74 (SARA) (“liability under CERCLA is strict, that is, without regard to fault or willfulness”). 97a As noted above, the Court has been unable to uncover any judicial precedent defining the term “act of war” either in the CERCLA context or that of environmental law generally. Even looking beyond the realm of environmental law, decisional law provides no clear authoritative definition of the term “act of war.” Recent caselaw evidences a habit of merely using the term as a conclusory label. F.g., Koohi v. United States, 976 F.2d 1328, 1334 (9th Cir.1992) (shooting down of Iranian passenger jet by United States constituted an act of war); Agee v. Muskie, 629 F.2d 80, 97 n. 12, 115 (D.C. Cir.1980) (MacKinnon, J., dissenting) (seizure by Iranians of United States embassy in Tehran characterized as an act of war). Both the governments and Defendants reach farther back, claiming support for their respective interpretations of “act of war” from the decision in Farberwerke Vormals Meister Lucius Bruning v. Chemical Foundation, Inc., 283 U.S. 152, 51 S.Ct. 403, 75 L.Ed. 919 (1931). Farberwerke concerned the seizure during World War I of patents belonging to supporters of Germany pursuant to the Trading With the Enemy Act, 40 Stat. 411, 420, 421, 459, 460, 1020, 1021, 50 U.S.C.A. Appendix §§ 7(c), 10(f), 12. Under Farberwerke, it is clear that the seizure of property from supporters of an enemy nation in time of war, for the purpose of weakening that enemy, constitutes an act of war. 283 U.S. at 160-62. The Court finds little guidance in Farberwerke, however, regarding the applicability of the term “act of war” to the federal government’s requisition of aviation fuel and close regulation of fuel production during World War Il. Fortunately, earlier decisional law provides more guidance as to the proper construction of “act of war” in this case. First, the Court notes that the seizure or capture of property belonging to or benefitting an enemy nation has been authoritatively distinguished from situations in which there is some element of contractual relationship—i.e., an express or 98a implied agreement to compensate the owner—in the govern- ment’s use or possession of property. See, e.g., Juragua Iron Co. v. United States, 212 U.S. 297, 308, 29 S.Ct. 385, 389, 53 L.Ed. 520 (1909) (no act of war where agreement to pay for use of property may be implied); United States v. Winchester & Potomac River Co., 163 U.S. 244, 255, 16 S.Ct. 993, 997, 41 L.Ed. 145 (1896) (distinguishing seizure with no implication of compensation of railroad used for benefit of - Confederacy, which constituted an “act of war,” from situation where property is taken or used by federal government under an implied agreement that owner should be compensated). In this case, of course, the federal government’s procure- ment of aviation fuel occurred through express contracts. This undermines Defendants’ effort to characterize the federal government’s close regulation of the oil companies’ production of aviation fuel as an “act of war.” Another helpful line of decisional law arose in the wake of the Civil War as a consequence of the court of claims’ delineation of acts of war for which the federal government could not be held liable under the Bowman Act, ch. 116, 22 Stat. 485 (Mar. 3, 1883). The court consistently distinguished cases in which the government appropriated property in order to supply the military, which were compensable, from cases in which the government seized or destroyed property for the purpose of injuring or weakening the enemy. See, e.g., White v. United States, 33 Ct.Cl. 368, 375, 1800 WL 2081, (1898) (distinguishing between appropriation of stores and supplies for the use of the military from the “destruction of property as an act of war”); Conard and Twenty Others v. United States, 25 Ct.Cl. 433, 436-37, 1800 WL 1869 (1890) (taking of property properly characterized as act of war where primary purpose was not to supply the military, but rather to injure enemy); Beasely v. United States, 21 Ct.Cl. 225, 227, 1800 WL 1484 (1886). In this case, there can be no question but 99a that the federal government’s primary purpose in acquiring and regulating production of aviation fuel from the oil companies was to supply the military. Lastly, the Court observes that the term “act of war,” while nowhere clearly defined in American law, appears to be borrowed from international law. In the realm of interna- tional law, the term is defined clearly as a “use of force or other action by one state against another” which “[t]he state acted against recognizes . . . as an act of war, either by use of retaliatory force or a declaration of war.” James R. Fox, Dictionary of International and Comparative Law 6 (1992); - Union Académique Internationale, Dictionnaire de la Terminologie du Droit Internationale 12-13 (1960). None of these guides to the proper interpretation of “act of war” as used in section 107(b)(2) of CERCLA supports the novel, expansive construction urged by Defendants. While the Court recognizes that the federal government’s regulation of the production of aviation fuel during World War II was exceptionally far reaching, the Court concludes the term “act of war” as used in section 107(b)(2) of CERCLA cannot reasonably be construed to cover either the government's wartime contracts to purchase aviation fuel from the oil companies or its regulation of the oil companies’ production of aviation fuel. Thus, Defendants’ invocation of the act of war defense to section 107(a) liability must fail. B. Acts of a Third Party The oil companies claim the United States, Japanese, and German governments are third parties who bear sole responsibility for the presence of the hazardous waste at the McColl Site. This claim must fail. “[SJection 107(b)(3) provides a defense to liability only where a totally unrelated third party is the sole cause of the release or threatened release of a hazardous substance.” United States v. String- fellow, 661 F.Supp. 1053, 1061 (C.D.Cal.1987). 100a As noted above the oil companies entered into volitional contracts with the United States for the sale of aviation fuel. It was within the context of this contractual relationship with the United States that the oil companies arranged to have the waste disposed of at the McColl Site. Section 107(b)(3) expressly precludes invocation of the third party defense in such a scenario. Therefore, Defendants’ endeavor to invoke the third party defense under CERCLA section 107(b)(3) must fail as a matter of law. III. Innocent Landowner Defense Although undeniably the present owner of part of the McColl Site, McAuley attempts to assert the so-called “innocent landowner” defense under section 101(35) of CERCLA. Originally, CERCLA imposed strict liability on all owners of contaminated property regardless of the circumstances of their ownership. This aspect of section 107(a) became controversial as a result of several cases in which apparently “innocent” landowners were held liable for response costs greatly in excess of the value of the land. £E.g., United States v. Maryland Bank & Trust Co., 632 F.Supp. 573 (D.Md.1986). In response to this controversy, Congress introduced a so-called “innocent landowner” defense to liability in SARA. Congress created this new exception by modifying the definition of “contractual relationship” in section 101(35), 42 U.S.C. § 9601(35). Amended section 101(35) excepts from the term “contractual relationship” a landowner defendant who shows by a preponderance of the evidence that “[a]t the time the defendant acquired the facility the defendant did not know and had no reason to know that any hazardous substance which is the subject of the release or threatened release was disposed of on, in, or at the facility.” 42 U.S.C. § 9601(35)(A)(i). 10la Congress was careful, however, to ensure that the innocent landowner exception is narrow. Thus, section 101(35)(B) requires: “To establish that the defendant had no reason to know ..., the defendant must have undertaken, at the time of acquisition, all appropriate inquiry into the previous owner- ship and uses of the property consistent with good com- mercial or customary practice in an effort to minimize liability.” 42 U.S.C. § 9601(35)(B). Furthermore, in evalu- ating whether a defendant has fulfilled this requirement, the Court is directed to “take inté account any specialized knowledge or experience on the part of the defendant, the relationship of the purchase price to the value of the property if uncontaminated, commonly known or reasonably ascer- tainable information about the property, the obviousness of the presence or likely presence of contamination at the property, and the ability to detect such contamination by appropriate inspection.” Jd. In order to establish its entitlement to exemption from liability under the innocent landowner exception, McAuley must establish the following four elements: (1) “{a]t the time [McAuley] acquired the facility [McAuley] did not know and had no reason to know” that the property was contaminated, 42 U.S.C.A. § 9601(35)(A)(i); (2) no hazardous substances were disposed of on the property during McAuley’s ownership of the site, 42 U.S.C. § 9601(35)(A); (3) McAuley exercised “due care with respect to the hazardous substances” once it acquired the property, 42 U.S.C. § 9607(b)(3)(a); and (4) McAuley” by any act or omission, [did not] cause[ ] or contribute[ ] to the release or threat [of] release of a{ny] hazardous substance” on the site, 42 U.S.C. § 9601(35)(D). 102a Consistent with the general rule that defenses to CERCLA are narrowly construed, these criteria are strictly construed and failure to carry its burden with regard to any one of them will defeat a defendant’s attempt to assert the innocent landowner defense. CPC International, Inc. v. Aerojet- General Corp., 777 F.Supp. 549, 581 (W.D.Mich.1991); Washington v. Time Oil Co., 687 F.Supp. 529, 531 (W.D. Wash.1988). Here, there is overwhelming evidence that not only did McAuley have ample reason to know of the presence of hazardous wastes at the country club, it had actual knowledge of that fact prior to its purchase of the club. The only “evidence” to the contrary is the bald assertion in Mr. McAuley’s declaration that he did not know and had no reason to know that there was hazardous waste at the McColl Site. This declaration is patently incredible, as McAuley commissioned an environmental assessment of the Site in 1980. Moreover, prior to making this declaration, Mr. McAuley testified at his deposition that he either had no recollection concerning the environmental assessment he commissioned or was not present during the fall of 1980. Pursuant to Radobenko v. Automated Equip. Corp., 520 F.2d 540, 544 (9th Cir.1975), Mr. McAuley’s subsequent contra- dictory declaration is entitled to no consideration. Because McAuley fails to satisfy the exacting standard set forth in section 101(35)(B), 42 U.S.C. § 9601(35)(B), it fails completely to establish any genuine issue as to the first element of the innocent landowner defense. Thus, the Court concludes that McAuley’s invocation of the innocent landowner defense must fail. III. Assaults on the Constitutionality of CERCLA Defendants attack the application of CERCLA section 107(a) in this case as violative of both the Due Process Clause and the Takings Clause of the Fifth Amendment. Neither of these claims has merit. 103a A. Retroactive Application of CERCLA The oil companies argue that retroactive application of CERCLA in this case would violate the Due Process Clause of the Fifth Amendment. The Court disagrees. Retroactive application of CERCLA has uniformly been held not to violate the Due Process Clause. £.g., United States v. Monsanto Co., 858 F.2d 160, 174 (4th Cir.1988); United States v. Northeastern Pharmaceutical & Chemical Co., 810 F.2d 726, 732-34 (8th Cir.1986), cert. denied 484 U.S. 848, 108 S.Ct. 146, 98 L.Ed.2d 102 (1987); United States v. Atlas Minerals & Chemicals, Inc., 797 F.Supp. 411 (E.D.Pa.1992); United States v. Dickerson, 640 F.Supp. 448, 451 (D.Md. 1986) (“The courts have consistently ruled that CERCLA’s language and legislative history overrule the presumption against retroactive application of statutes, and have rejected similar constitutional attacks upon the Act.”). The Court finds no basis on which to distinguish this case from the broad spectrum of others in which retroactive application of CERCLA has been upheld. Indeed, much of the decisional law regarding CERCLA involves the disposal of hazardous wastes that occurred decades before the statute was enacted. Both CERCLA’s language and legislative his- tory reveal Congress’ conscious intent to compel correction of the careless disposal of hazardous waste in the past by the nation’s industries. NEPACCO, 810 F.2d at 732-33 (noting past tense of § 107’s language referring to actions and conditions); United States v. Kramer, 757 F.Supp. 397, 430 (D.N.J.1991). Therefore, the Court concludes retroactive application of CERCLA in this case does not violate the Due Process Clause of the Fifth Amendment. B. Application of CERCLA as an Unconstitutional Taking Defendants contend imposition of section 107(a) liability in this case constitutes an unconstitutional taking. This attack 104a on government cost recovery actions under section 107 has been raised and rejected by courts. E.g., NEPACCO, 810 F.2d 726, 734 (8th Cir.1986). CERCLA, as amended by SARA, clearly provides a mechanism by which parties held liable for response costs under section 107(a) may allocate those costs among themselves through contribution suits under section 113(f), codified as amended at 42 U.S.C. § 9613(f). Chem- ical Waste Management, Inc. v. Armstrong World Industries, Inc., 669 F.Supp. 1285, 1295 (E.D.Pa.1987). In view of the statutorily provided right of contribution, CERCLA’s provision for allocating liability for the cleanup of public hazards cannot fairly be characterized as a taking at all. Thus, the Court concludes that the imposition of section 107 liability on the defendants in this action does not constitute an unconstitutional taking. IV. Bifurcation of Defendants’ Counterclaims and Cross- Claims Federal Rule of Civil Procedure 42(b) authorizes the Court to order a separate trial of any claim including counterclaims, cross-claims, or any other issue for purposes of convenience, avoiding prejudice, expedition, or judicial economy. ‘The principal goal of Rule 42(b) is to promote efficient judicial administration, and only one of the conditions set forth in the rule need be served to justify a separate trial. Under CERCLA, the governments may recover response costs that are necessary and consistent with the National Contingency Plan (“NCP”). 42 U.S.C. § 9607(a)(4)(B). Thus, all that remains to the cost recovery phase of this litigation is the Court’s determination whether the govern- ments’ response costs are consistent with the NCP. Defendants assert numerous counterclaims against the United States, including several which assert that the United States is liable under § 107 of CERCLA due to the alleged 105a control the United States exercised over the petroleum industry during World War II. The oil companies also seek recovery of $12 million in response costs they claim to have incurred in connection with the contamination of the McColl Site. In addition, Defendants have filed cross-claims against each other. The bringing of such claims and actions in pursuit of contribution is expressly provided for in section 113(f) of CERCLA. 42 U.S.C. § 9613(f). The purpose of section 1 13(f) is to mitigate the harshness of section 107 by providing for an eventual equitable sharing of costs among responsible parties. However, it was not intended and the Court will not allow it to be used as a tool to delay the securing of CERCLA’s benefits to society. CERCLA clearly provides that cost recovery can be sought before any counterclaims are resolved. And the legislative history of CERCLA indicates that Congress intended for the government to be entitled to recover its costs prior to the resolution of any counterclaims or cross-claims for con- tribution. (“The Government should obtain the full costs of cleanup from those it targets for enforcement, and leave remaining costs to be recovered in private contribu- tion actions”.) £.g., 132 Cong.Rec. $14,903 (daily ed. Oct. 3, 1986). The possibility of a future finding of partial liability on the part of the governments ought not stand as a bar to expeditious recovery of response costs, as Defendants will be reimbursed in the event the governments are found liable. U.S. v. Western Processing Company, 734 F.Supp. 930, 939- 40 (W.D.Wash.1990). The Court is of the opinion that allowing the governments to recover their response costs before resolving Defendants’ counterclaims and cross-claims will not unduly prejudice Defendants as they will be reimbursed in the future for any costs paid to the Superfund that are properly attributable to other parties. In contrast, the 106a Court takes the view that litigating the cost recovery together with the cross and counterclaim aspects of the action would inappropriately prejudice the public welfare by slowing replenishment of the Superfund. = Therefore, the Court concludes that bifurcation of Defend- ants’ counterclaims and cross-claims from the remaining portion of the cost recovery phase of this litigation will best serve the Court’s and litigants’ economy of time and effort. CONCLUSION Wherefore, the Court hereby ORDERS: 1. Because the oil companies have failed to raise any genuine issue of material fact as to their liability, summary judgment as to the liability of the oil companies under section 107(a) of CERCLA, 42 U.S.C. § 9607(a), is GRANTED in favor of Plaintiffs United States of America and the State of California and against Defendants Shell Oil Company, Union Oil Company of California, Atlantic Richfield Company, and Texaco, Inc.; and 2. Because McAuley has failed to raise any genuine issue of material fact as to its liability under 42 U.S.C. § 9607(a), the governments’ motion for summary judgment as to liability of McAuley is GRANTED in favor of Plaintiffs United States of America and the State of California and against McAuley LCX Corporation; and 3. Having granted summary judgment against all remaining defendants as to liability under section 107(a) and finding the purposes of CERCLA best served by separating the remaining aspects of the cost recovery phase of the action from Defendants’ numerous counterclaims and cross-claims for contribution, the Court ORDERS Defendants’ counter- claims and cross-claims bifurcated from the remainder of the cost recovery phase; and 107a 4. Litigation of Defendants’ counterclaims and cross-claims for contribution is stayed pending completion of the governments’ cost recovery phase of this action. The Clerk shall send, by United States mail, copies of this Memorandum of Decision and Order to all parties to this action. IT IS SO ORDERED. JUDGMENT For the reasons set forth in the Memorandum and Decision and Order filed contemporaneously herewith, IT IS HEREBY ORDERED AND ADJUDGED: Judgment shall be entered in favor of Plaintiffs United States of America and the State of California and against Defendants Shell Oil Company, Union Oil Company of California, Atlantic Richfield Company, Texaco, Inc., and McAuley LCX Corporation on the issue of liability under section 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. § 9607(a). The Clerk shall send, by United States mail, copies of this Judgment to all parties to this action. 108a APPENDIX G 42 U.S.C. § 9607. Liability. (a) Covered persons; scope; recoverable costs and damages; interest rate; “comparable maturity” date Notwithstanding any other provision or rule of law, and subject only to the defenses set forth in subsection (b) of this section— (1) the owner and operator of a vessel or a facility, (2) any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of, (3) any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at any facility or incineration vessel owned or operated by another party or entity and containing such hazardous substances, and (4) any person who accepts or accepted any haz- ardous substances for transport to disposal or treatment facilities, incineration vessels or sites selected by such person, from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance, shall be liable for— (A) all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe not inconsistent with the national ’ contingency plan; (B) any other necessary costs of response incurred by any other person consistent with the national contingency plan; 109a (C) damages for injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing such injury, destruction, or loss resulting from such a release; and (D) the costs of any health assessment or health effects study carried out under section 9604(i) of this title. The amounts recoverable in an action under this section shall include interest on the amounts recoverable under subparagraphs (A) through (D). Such interest shall accrue from the later of (i) the date payment of a specified amount is demanded in writing, or (ii) the date of the expenditure concerned. The rate of interest on the outstanding unpaid balance of the amounts recoverable under this section shall be the same rate as is specified for interest on investments of the Hazardous Substance Superfund established under subchapter A of chapter 98 of Title 26. For purposes of applying such amendments to interest under this subsection, the term “comparable maturity” shall be determined with reference to the date on which interest accruing under this subsection commences. * * * * (Pub.L. 96-510, Title I, § 107, Dec. 11, 1980, 94 Stat. 2781; Pub-L. 99-499, Title 1, §§ 107(a) to (d)(2), (e), (f), 127(b), (e), Title II, §§ 201, 207(c), Oct. 17, 1986, 190 Stat. 1628 to 1630, 1692, 1693, 1705; Pub.L. 99-514, § 2, Oct. 22, 1986, 100 Stat. 2095; Pub-L. 103-429, § 7(e)(2), Oct. 31, 1994, 108 Stat. 4390; Pub.L. 104-208, Div. A, Title II, § 2502(a), Sept. 30, 1996, 110 Stat. 3009-462; Pub.L. 104-287, § 6(j)(2), Oct. 11, 1996, 110 Stat. 3400; Pub.L. 107-118, Title I, § 102(a), Title Il, §§ 221, 222(b), Jan. 11, 2002, 115 Stat. 2356, 2368, 2371.) 110a APPENDIX H UNITED DISTRICT DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA Case No. Civ. 91 0589 RJK (Ex) UNITED STATES OF AMERICA, ef ai., Plaintiffs, V. SHELL OIL COMPANY, et al., Defendants. AND RELATED ACTIONS STIPULATED FACTS OF THE PARTIES RELATING TO PENDING MOTIONS FOR SUMMARY JUDGMENT AND RELATED MOTIONS Date: [No Hearing] Time: [None] Ctrm: Honorable Robert J. Kelleher 4. During World War II, the most critically needed refinery product was 100 octane aviation gasoline, often referred to herein as “avgas.” [col3] 8. To meet avgas requirements, the refineries would blend several different elements: the first element was aviation base stock—generally 40% to 50% of avgas: at the start of the war, this was similar to a normal motor gasoline with an octane rating of 72 to 75. [col7] lila 9. A second avgas element was alkylate—generally 25% to 40% of avgas: This was produced by a process called alkylation which involved combining molecules of lighter weight petroleum fractions to produce iso-octanes. The most efficient process was to mix iso- butane with butylene in the presence of 98% sulfuric acid. Butylene and iso-butane each had four carbon atoms and would combine to make iso- octane, which had eight carbon atoms. Because of the presence of other hydrocarbons, alklate had an octane rating of 92 to 94. [col8] 51. The WPB’s power included the authority to “increase, accelerate, and regulate the production and supply of materials, articles and equipment . . . required for national defense [and to] formulate plans for the mobilization for defense of the production facilities of the Nation, and to take all lawful action necessary to carry out such plans.” [us221] 52. The WPB’s task was principally accomplished through use of a nationwide priority rankings system, under which the WPB reviewed requirements for goods appearing to be scarce, determined how much of each such product or raw material was needed, and identified facilities to help meet this demand. [us222] 53. The WPB acted primarily through the allocation of scarce materials and equipment under an intricate system of priorities. [co9] 54. The WPB exercised authority (delegated from the Presi- dent) under several wartime statutes. [us223] 55. The Priorities and Allocations Act of 1940 (“Priorities Act”], as amended, required facilities to give priority to military contracts and authorized the President to regulate the flow of scarce raw materials where the use of such materials for national defense resulted in a supply shortage. [us224] _ 12a 56. The Second War Powers Act, passed in March 1942, authorized the WPB to allocate not just “materials” deemed to be in scarce supply, but “facilities” as well. [us225] 57. The Second War Powers Act enabled the WPB to require a company to produce a good needed for the war effort where it was within the company’s physical and technical capacity to do so. [us226] 58. Presidential powers under the Second War Powers Act were delegated to the Chairman of the War Production Board in April 1942. [us227] 59. The Selective Training and Service Act of 1940, Pub. L. No. 76-783, 54 Stat. 885, 892 (1940), .and the Second War Powers Act authorized the United States to required companies to produce goods needed for war where it was within a company’s physical and technical capacity to do so, and such requirements were backed by civil and criminal penalties and the possibility of seizure. [col 1] 168. The cost estimates used to arrive at a negotiated price for the avgas contracts with DSC permitted an estimated profit between 6 and 7 percent. [us104] 175. The first wartime facilities built by Richfield for the manufacture of 100 octane gasoline at Wilmington were completed in February 1943. [us25] 176. Richfield’s expanded facilities were financed through 75% loans from the Defense Supplies Corporation, through advances repayable by deliveries of gasoline over a three year period. [us26] 177. Richfield entered into another contract with the DSC [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_0496%3A1. Public record. Not legal advice.