Appendices — Alcan Aluminum Corp. v. United States

APPENDIX

TABLE OF CONTENTS

APPENDIX A Order of the Court of Appeals

Denying Petition for Rehearing

And Petition for Rehearing En

Banc,

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APPENDIX B Opinion of the Court of Appeals,

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APPENDIX C Opinion of the District Court,

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APPENDIX A

IN THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

No. 01-6008

UNITED STATES

v.

ALCAN ALUMINUM CORP.

April 21, 2003

A petition for rehearing and a petition for rehearing en banc

having been filed herein by the appellant Alcan Aluminum

Corporation,

Upon consideration by the panel that decided the apveal, it is

ordered that said petition for rehearing is DENIED.

It is further noted that the petition for rehearing en banc has

been transmitted to the judges for the court in regular active

service and to any other judge that heard the appeal and that no

such judge has requested a vote be taken thereon.

FOR THE COURT

ROSEANN B. MACKECHNIE, Clerk

By:

: /s/

Arthur M. Heller, Motions Staff Attorney

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APPENDIX B

IN THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

No. 01-6008

UNITED STATES OF AMERICA; STATE OF NEW

YORK,

Plaintiffs-Appellees,

v.

ALCAN ALUMINUM CORPORATION,

Defendant-Appellant.

January 7, 2003

\

Before CARDAMONE, STRAUB, and KATZMANN, Circuit

Judges.

CARDAMONE, Circuit Judge:

Defendant Alcan Aluminum Corporation (Alcan, company or

appellant) appeals from a judgment of the United States District

Court for the Northern District of New York (McAvoy, J.)

entered on November 14, 2000, finding the company jointly and

severally liable to plaintiffs United States of America and the

State of New York (collectively, the government), for response

costs incurred at two hazardous waste sites. It might be said

that in writing this opinion we cover ground we have already

worked. On a prior occasion we thought that we had

thoroughly plowed the field of CERCLA liability, which is the

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subject of this appeal. But, on reading the briefs of the parties

and those filed by amici supporting appellant’s arguments

urging reversal, we think it is obviously necessary to plow the

same field again.

Background

This appeal is the latest round of litigation to result from the

efforts of the United States and the State of New York to

recover response costs incurred in remedying environmental

contamination at two hazardous waste disposal sites in Oswego

County, in central New York. This case has had a long litigation

history, detailed in numerous judicial opinions.' Because we

assume the readers’ familiarity with the facts and procedural

history set out in those opinions, our recounting of what has

been earlier explained will be brief.

This litigation began in 1987 when the government filed suit

against 83 business entities to recover response costs under

§ 107 of the Comprehensive Environmental Response,

Compensation and Liability Act (CERCLA), 42 U.S.C. § 9607

(as amended), in connection with the cleanup of an inactive

hazardous waste site formerly owned by Pollution Abatement

Services of Oswego, Inc. From 1970 to 1977, Pollution

Abatement Services operated a waste disposal and treatment

facility on 15 acres of land in Oswego County, New York.

Chemical wastes from a variety of sources were stored,

' See, e.g., United States v. Alcan Aluminum Corp., 755 F. Supp. 531

(N.D.N.Y. 1991), aff'd in part, rev'd in part and remanded, 990 F.2d 711

(2d Cir. 1993); United States v. Alcan Aluminum Corp., Nos. 87-CV-920,

91-CV-1132, 1996 WL 637559 (N.D.N.Y. Oct. 28, 1996); United States v.

Alcan Aluminum Corp., Nos. 87-CV-920, 91-CV-1132, 1997 WL 727506

(N.D.N.Y. Aug. 20, 1997); United States v. Alcan Aluminum Corp., 49 F.

Supp. 2d 96 (N.D.N.Y. 1999); United States v. Alcan Aluminum Corp., 97 F.

Supp. 2d 248 (N.D.N.Y. 2000). Similar issues have been addressed in

litigation in the Third Circuit involving identical Alcan waste disposed of at

a different site. See, e.g., United States v. Alcan Aluminum Corp., 964 F.2d

252 (3rd Cir. 1992), on remand, United States v. Alcan Aluminum Corp.,

892 F. Supp. 648 (M.D. Pa. 1995), aff'd, 96 F.3d 1434 (3d Cir. 1996).

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processed, and disposeu <i «here. Unfortunately, owing to

liquid waste spills, waste lagoon overflows, and structural

deterioration, the site became contaminated. Heavy metals and

polychlorinated biphenyls (PCBs) are two of the several

contaminants detected there. In 1976 the government began

response and cleanup activities at the Pollution Abatement

Services site (PAS).

Alcan, a manufacturer of aluminum sheet and plate products

in Oswego, New York, used PAS during the 1970s and

arranged for disposal or treatment of 4.6 million gallons of its

waste emulsion at the PAS site. Although this emulsion, which

resulted from Alcan’s manufacturing processes, consisted

mainly of water and oil, it also contained aluminum, cadmium,

chromium, copper, lead, and zinc, substances designated as

“hazardous” under CERCLA.

Of the 83 entities charged as potentially responsible parties in

the government’s 1987 lawsuit, only defendant Alcan declined

to become a party to the consent decree proposed by the

government. On January 15, 1991 the district court granted

summary judgment in favor of the government against Alcan,

finding Alcan jointly and severally liable for the balance of the

government’s response costs that had not been reimbursed to it —

by the other 82 parties to the consent decree. See United States

v. Alcan Aluminum Corp., 755 F. Supp. 531 (N.D.N.Y. 1991)

(Alcan-PAS). On appeal before this Court in 1993, we affirmed

the grant of summary judgment with respect to Alcan’s liability,

but reversed the finding on the joint and several scope of

Alcan’s liability and remanded to the district court for further

proceedings relating to the potential divisibility ofharm and the

apportionment of damages. United States v. Alcan Aluminum

Corp., 990 F.2d 711 (2d Cir. 1993) (Alcan).

At the time we decided Alcan another case, United States v.

Alcan Aluminum Corp., 91-CV-1132 (Alcan-Fulton), was

pending before the district court. At issue were cleanup costs

incurred by the government at a Superfund site in Fulton, New

ih —__.

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York. The Fulton Terminal operated from 1972 to 1977 as a

staging and storage area for hazardous waste scheduled for

incineration at PAS. Approximately 70,000 gallons of Alcan’s

waste emulsion were shipped directly to the Fulton site from

Alcan’s Oswego manufacturing plant during 1972 and 1973.

On December 1, 1993 the district court consolidated Alcan-PAS

and Alcan-Fulton.

Following consolidation of the PAS and Fulton cases, the

district court granted the government’s summary judgment

motion only or: the issue of Alcan’s liability to the government

for its response costs at Fulton. See United States v. Alcan

Aluminum Corp., 1996 WL 637559 (N.D.N.Y. Oct. 28, 1996).

The trial court refused to rule on the divisibility of harm and the

apportionment of damages with respect to either site at the

summary judgment stage. To decide these issues it held a five-

day bench trial beginning on October 4, 1999. With the

assistance of a court-appointed expert the district court found

Alcan jointly and severally liable for response costs at both PAS

and Fulton. See United States v. Alcan Aluminum Corp., 97 F.

Supp. 2d 248 (N.D.N.Y. 2000) (Alcan-Consolidated). On the

basis of post-trial submissions the district court entered a final

judgment in favor of the United States in the amount of

$12,201,929.30 and in favor of the State of New York in the

amount of $1,422,155.39. Alcan appeals from this judgment.

We affirm.

Discussion

On appeal Alcan challenges essentially every aspect of the

district court’s many rulings. After carefully reviewing Alcan’s

arguments we are not persuaded that any of them warrant

reversal of the judgment. In the following discussion we

address the two we consider the most important issues raised on

appeal, namely, the divisibility of the harm at PAS and Fulton

and the constitutionality of retroactive CERCLA liability. We

think it unnecessary to address the remainder of Alcan’s

arguments either because they have been sufficiently addressed

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in the district court’s decisions or because we find them to be

wholly without merit.’

I. Divisibility of Harm

A. Statutory Threshold for Liability

CERCLA § 9607 is a strict liability statute. It imposes

liability on “any person who by contract, agreement, or

otherwise arranged for disposal or treatment” of hazardous

substances “from which there is a release, or a threatened

release which causes the incurrence of response costs.”

§ 9607(a)(3) and (4). As we have explained previously, the

plain meaning of this provision permits the government to

recover response costs from a defendant like Alcan if the

government proves “(1) there was a release or threatened

release, which (2) caused incurrence of response costs, and (3)

* * * the defendant generated hazardous waste at the clean-up

site.” Alcan, 990 F.2d at 721. The government is not required

to show that a specific defendant’s waste caused the incurrence

of cleanup costs in order for strict liability to attach to that

defendant. Jd.

At this juncture in the instant litigation it has been

established that Alcan is liable to the government under the

clear language of CERCLA § 9607 for response costs incurred

at both PAS and Fulton. Alcan and the government have

stipulated that there was a release of contaminants at PAS, that

the government incurred costs in response to this release, and

that Alcan generated a waste emulsion that was disposed of at

the site. The parties have also stipulated that Alcan’s waste

2 Those arguments are: (1) that expert testimony was improperly admitted;

(2) that res judicata barred the government from introducing on remand

evidence that Alcan’s emulsion contained additional hazardous substances;

(3) that the district court applied an incorrect standard in deciding the motion

for reconsideration; and (4) that the district court erred in not considering its

contention that the government’s response measures were inconsistent with

the National Contingency Plan.

Se = a ee Oe ee -

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emulsion contained cadmium, chromium, copper, lead, and

zinc. Alcan does not dispute that these elements and their

respective compounds are identified as “hazardous substances”

under CERCLA. The district court —- ruling on summary

judgment motions of the United States and the State of New

York more than a decade ago — found Alcan liable for

response costs at PAS. Alcan-PAS, 755 F. Supp. 531. We

affirmed this ruling when the case came before us the first time.

Alcan, 990 F.2d at 719-21.

With respect to Fulton, Alcan and the government have

similarly stipulated that a release occurred there, that this

release resulted in the incurrence of government response costs,

and that Alcan generated waste that was delivered to the site.

Because the Alcan waste emulsion shipped to Fulton was

identical to the waste emulsion shipped to PAS — and thus

contained the hazardous substances cadmium, chromium,

copper, lead, and zinc — Alcan is also liable pursuant to

CERCLA § 9607 for the government’s response costs incurred

at Fulton.

B. Divisibility Standard

A determination holding Alcan liable under CERCLA § 9607

for response costs incurred by the government at PAS and

Fulton does not resolve the issue of liability completely. As we

explained previously, courts have added a “common law gloss”

to the statutory framework of CERCLA. Alcan, 990 F.2d at

721. More specifically, we noted that courts “have at once

adopted a scheme of joint and several liability but at the same

time have limited somewhat the availability of such liability

against multiple defendants charged with adding hazardous

substances to a Superfund site.” Jd. at 721-22 (citing O'Neil v.

Picillo, 883 F.2d 176, 178-79 (ist Cir. 1989) (under some

circumstances it is impossible to determine which party caused

harm); United States v. Chem-Dyne Corp., 572 F. Supp. 802,

808 (S.D. Ohio 1983) (courts decide liability under common-

law principles on a case by case basis)).

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The Restatement (Second) of Torts § 433A (1965), is

frequently cited by those courts endeavoring to determine

whether a party that has contributed hazardous substances to a

multi-party waste site should be held jointly and severally liable

for the remediation costs incurred there. See, e.g., United States

v. Alcan Aluminum Corp., 964 F.2d 252, 268-69 (3rd Cir. 1992)

(Alcan-Butler),; O'Neil, 883 F.2d at 178; United States v.

Monsanto, 858 F.2d 160, 171-73 (4th Cir. 1988). Indeed, we

referred to the Restatement in our previous decision regarding

this case. Alcan, 990 F.2d at 722. According to the

Restatement, where “two or more Causes have combined to

bring about harm,” damages from the harm are to be

apportioned among the causes if “there are distinct harms” or

“there is a reasonable basis for determining the contribution of

each cause to a single harm.” § 433A(1) & cmt. 2.

Based upon the common law principles of divisibility and

apportionment embodied in the Restatement, we identified in

our previous decision precisely how the issue of Alcan’s

liability was to be resolved. We stated that Alcan may escape

joint and several liability “if it either succeeds in proving that its

oil emulsion, when mixed with other hazardous wastes, did not

contribute to the release and clean-up costs that followed, or

contributed at most to only a divisible portion of the harm.”

Alcan, 990 F.2d at 722 (citing Alcan-Butler, 964 F.2d at 270).

Our previous decision presented two additional qualifications

material to the district court’s liability determination. First,

although we declared that it would be possible for Alcan to

avoid liability entirely, we specified that such would be a

“special exception” that would permit Alcan to escape payment

only if the company could prove that “its pollutants did not

contribute more than background contamination and also

cannot concentrate.” Jd. Second, in the event that Alcan did

not qualify for the special exception, we ruled that the company

could nonetheless “present evidence relevant to establishing

divisibility of harm.” Jd. We identified several types of proof

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that would be relevant to such a showing of divisibility,

including “relative toxicity, migratory potential, and synergistic

capacities of the hazardous substances at the site.” Jd. (citing

Alcan-Butler, 964 F.2d at 270 n. 29, 271; Monsanto, 858 F.2d

at 172 n. 26).

Further, our previous Alcan opinion made it clear that Alcan -

bears the ultimate burden of establishing a reasonable basis for

apportioning liability and that the government has no burden of

proof with respect to what caused the release of hazardous

waste and triggered response costs. 990 F.2d at 722. We also

emphasized that apportionment is “an intensely factual

determination.” Jd. And, as the Third Circuit observed, the

burden to show divisibility is “substantial.” Alcan-Butler, 964

F.2d at 269.

C. Alcan Standard Applied

Alcan’s divisibility burden has grown heavier as this

litigation has progressed. In this case’s earliest stages Alcan’s

liability was premised on the presence of metals in the

company’s waste emulsion, specifically cadmium, chromium,

copper, lead and zinc. See Alcan-PAS, 755 F. Supp. at 540. In

subsequent proceedings the government adduced evidence that

Alcan’s waste emulsion was also contaminated with nickel and

PCBs. See Alcan-Consolidated, 97 F. Supp. 2d at 261-66.

Although Alcan strongly disputes the district court’s findings

of fact with respect to the presence of nickel and PCBs in its

waste emulsion, we review the district court’s findings of fact

for clear error and a finding of fact is only “clearly erroneous”

when “the reviewing court on the entire evidence is left with the

definite and firm conviction that a mistake has been

committed.” United States v. United States Gypsum Co., 333

U.S. 364, 395 (1948). Having thoroughly reviewed ike record,

we find that whatever Alcan’s assertions of factfinding error

amount to they are not sufficiently persuasive for us to conclude

that the district court’s findings are mistaken. On the contrary,

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the record contains ample evidence to support the trial court’s

finding that Alcan’s waste emulsion contained nickel and

PCBs. Our review of the trial court’s divisibility analysis, infra,

is predicated on these facts.

The finding that Alcan’s waste emulsion contained PCBs is

particularly significant because — as the district court properly

ruled — it disqualifies Alcan from escaping all CERCLA |

liability. See Alcan-Consolidated, 97 F. Supp. 2d at 268-69.

The “special exception” that we created when this case was :

previously before us was intended to excuse a responsible party

from all CERCLA liability only in instances where (1) a party

contributed hazardous substances to a site in quantities that did

not exceed background levels and (2) the hazardous substances

were incapable of concentrating. See Alcan, 990 F.2d at 722.

We created this exception based on an awareness that some

CERCLA hazardous substances, like metals, occur in the

environment naturally. The narrow exception carved out was

aimed to shield from liability those entities that have

contributed “hazardous” substances — defined as such in the

law — to a site but whose contribution — in the absence of

EPA thresholds — did not exceed natural background levels,

and did not themselves trigger the incurrence of response costs.

Because Alcan’s emulsion was contaminated with PCBs, which

are man-made substances without natural background levels,

Aican cannot escape liability under the special exception this

court articulated.

Even though the company is not permitted to escape liability

altogether, we have also recognized that Alcan can nonetheless

limit its liability by demonstrating that the harm incurred at

PAS or Fulton was divisible. Alcan, 990 F.2d at 722. In order

to avoid the imposition of joint and several liability under

CERCLA, the company must (1) demonstrate that the harm

caused by its emulsion was “distinct” from the harm caused by

other contributors at PAS and Fulton or (2) proffer a reasonable

basis for determining the proportional contribution of its

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emulsion to what may be conceived of as a single harm at each

site. Restatement (Second) of Torts § 433A. We had previously

stated that proof of “relative toxicity, migratory potential,

degree of migration, and synergistic capacit[y]” of the

hazardous substances at the site is relevant to establishing the

divisibility of harm. Alcan, 990 F.2d at 722.

We agree with the district court that Alcan failed to

demonstrate that the harm done at PAS and Fulton was

divisible. Alcan does not claim tha the harm caused by its

emulsion was somehow distinct from the harm caused by other

hazardous substances at the sites, nor does the company make

any real effort to identify the extent to which its waste

contributed to a single harm. Rather, both at trial and again on

appeal, Alcan simply contends that its waste emulsion was

benign and “really * * * just like homogenized milk.” It argues

therefore that its contribution to the harm and appropriate

portion of the damages is readily identifiable; and that its

portion is zero. Appellant also presents this argument in an

alternative form, analyzing the properties of the constituents of

its waste emulsion separately and contending that such analysis

similarly supports a conclusion that its emulsion did not

contribute to the harm at PAS or Fulton.

In our view appellant’s argument on the divisibility of the

harm at PAS and Fulton is untenable in two critical respects.

First, in light of the district court’s conclusion that the waste

emulsion contained PCBs, it is unreasonable for Alcan to

continue to insist that its waste emulsion was harmless.

Second, appellant’s analysis — focusing individually on each

constituent of its waste — does not provide an acceptable basis

for establishing divisibility. CERCLA cases typically involve

numerous hazardous substance generators and the disposal of a

variety of wastes at ¢ -‘ngle site. Because the various wastes

frequently commingle and interact, “the fact that a single

generator’s waste would not in itself justify a response is

irrelevant * * * as this would permit a generator to escape

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liability where the amount of harm it engendered to the

environment was minimal, though it was significant when

added to other generators’ waste.” Alcan-Butler, 964 F.2d at

264.

The same logic that prevents a polluter from considering the

effects of its waste in isolation from the other contaminants at a

site also prevents the company from analyzing the constituents

of its waste individually without regard to the effects of the

“emulsion as a whole.” See Alcan-Consolidated, 97 F. Supp.

2d at 269; United States v. Alcan Aluminum Corp., 892 F. Supp.

648, 651 (M.D. Pa. 1995). Because Alcan, which carried the

burden of proof, did not comprehensively and persuasively

address the effects of its waste emulsion at PAS and Fulton, it

cannot be said that the company either established that the harm

caused by its emulsion was distinct or proffered a reasonable

basis for dividing the harm and apportioning liability. Stated

another way, appellant did not satisfy its substantial burden

with respect to divisibility because it failed to address the

totality of the impact of its waste at each of the sites; it ignored

the likelihood that the cumulative impact of its waste emulsion

exceeded the impact of the emulsion’s constituents considered

individually, and neglected to account for the emulsion’s

chemical and physical interaction with other hazardous

substances already at the site.

Our conclusion that Alcan is jointly and severally liable for

the harm caused at PAS and Fulton is based upon the district

court’s finding that

[t]he evidence suggested that Alcan’s emulsion was a

more aggressive solvent than either water * * * or oil *

* * because, in an emulsion phase, oil and water have a

greater capacity to absorb contaminants than either

water or oil alone. Alcan’s emulsion, therefore,

absorbed the contaminants at the sites and facilitated

their transport throughout. In so doing, Alcan’s

emulsion contributed to the breadth of contamination at

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both PAS and Fulton. In other words, even if the

hazardous substances in Alcan’s emulsion themselves

did not contribute to the response costs at the sites

(which the PCBs and nickel did), the emulsion as a

whole contributed to both the release and response

costs.

Alcan-Consolidated, 97 F. Supp. 2d at 270. Our holding finds

further support by decisions in the Third Circuit that similarly

found Alcan jointly and severally liable for cleanup costs

incurred at a site where waste emulsion from the company’s

Oswego, New York facility was discharged. See United States

v. Alcan Aluminum Corp., 892 F. Supp. 648, 651 (M.D. Pa.

1995), aff'd, 96 F.3d 1434 (3d Cir. 1996). Having made a

determination regarding joint and several liability, we turn to

the second issue.

II. Constitutionality of CERCLA

Before this case went to trial on the issue of divisibility,

Alcan moved to dismiss the government’s complaint pursuant

to Fed. R. Civ. P. 12(b)(6) asserting that, in light of the

Supreme Court’s decision in Eastern Enterprises v. Apfel, 524

U.S. 498 (1998), the retroactive application of CERCLA to

Alcan’s waste disposal activities constitutes an unconstitutional

taking under the Takings Clause of the Fifth Amendment and a

violation of the Due Process Clause of the Fourteenth

Amendment. The district court denied appellant’s motion to

dismiss. See United States v. Alcan Aluminum Corp., 49 F.

Supp. 2d 96 (N.D.N.Y. 1999).

In Eastern Enterprises a deeply divided Supreme Court

struck down retroactive application of the Coal Industry Retiree

Health Benefit Act of 1992 (Coal Act), 26 U.S.C. §§ 9701-22.

524 U.S. at 537-38 (plurality op.), 547-50 (Kennedy, J.,

concurring in judgment). At issue was a Coal Act allocation

formula that assigned the provision of employee retirement

benefits, including guaranteed health care benefits established

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by a series of collective bargaining agreements in the 1970s, to

employers that had left the industry before those agreements

became operative. Eastern Enterprises challenged the Coal Act

on both takings and due process grounds and a plurality of four

justices held that the Act, as applied to Eastern, violated the

Takings Clause of the Fifth Amendment. Id. at 537-38. A

concurring opinion by Justice Kennedy — that joined the

plurality’s judgment, but which rejected its takings analysis in

favor of a substantive due process approach — supplied the

fifth vote necessary to deem the applicable section of the Coal

Act unconstitutional under the circumstances of that case. Jd. at

539-50 (Kennedy, J., concurring in the judgment and dissenting

in part).

Alcan’s invocation of the Eastern Enterprises decision puts a

new spin on an old argument: many potentially responsible

parties have challenged the constitutionality of retroactive

CERCLA liability. A review of the case law reveals that,

historically, this has not been a winning argument. Prior to the

decision in Eastern Enterprises, a number of courts held that

CERCLA applies retroactively, and that such construction did

not violate the Constitution. See, e.g., United States v. Olin

Corp., 107 F.3d 1506, 1511-15 (11th Cir. 1997); O’Neil, 883

F.2d at 183 n. 12; Monsanto, 858 F.2d at 173; United States v.

Northeastern Pharm. and Chem. Co., 810 F.2d 726 (8th Cir.

1986); Raytheon Co. v. McGraw-Edison Co., 979 F. Supp. 858,

863-64 (E.D. Wis. 1997); Cont’l Title Co. v. Peoples Gas Light

& Coke Co., 959 F. Supp. 893, 893-901 (N.D. Ill. 1997); Ninth

Ave. Remedial Group v. Fiberbond Corp., 946 F. Supp. 651,

651-64 (N.D. Ind. 1996); Nova Chems., Inc. v. GAF Corp., 945

F. Supp. 1098, 1100-05 (E.D. Tenn. 1996); United States v.

Kramer, 757 F. Supp. 397, 428-31 (D.N.J. 1991); Kelley v.

Thomas Solvent Co., 714 F. Supp. 1439, 1442-45 (W.D. Mich.

1989).

Given the extensive case law addressing and upholding the

constitutionality of retroactive CERCLA liability, the question

RRR AOS PRA A

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is whether Eastern Enterprises has changed the constitutional

terrain and effectively overruled prevailing authority. The

district court thought not, see United States v. Alcan Aluminum

Corp., 49 F. Supp. 2d 96, 99-101, and we do not think so either.

Although a majority in Eastern Enterprises was willing to

declare the retroactive liability scheme of the Coal Act

unconstitutional, no single rationale commanded a majority.

Only four justices voted to strike down the statute as

unconstitutional based upon a takings clause analysis. See E.

Enter., 524 U.S. at 537. The fifth vote required to reach that

result came in a concurrence that specifically rejected the

plurality’s takings analysis, but found the - statute

unconstitutional based on a violation of substantive due

process. Jd. at 539, 550. “When a fragmented Court decides a

case and no single rationale explaining the result enjoys the

assent of five Justices, ‘the holding of the Court may be viewed

as that position taken by those Members who concurred in the

judgments on the narrowest grounds.’” Marks v. United States,

430 U.S. 188, 193 (1977) (quoting Gregg v. Georgia, 428 US.

153, 169 n. 15 (1976)). This rule only works in instances where

“one opinion can meaningfully be regarded as ‘narrower’ than

another — only when one opinion is a logical subset of other,

broader opinions,” King v. Palmer, 950 F.2d 771, 781 (D.C.

Cir. 1991) (en banc), that is to say, only when that narrow

opinion is the common denominator representing the position

approved by at least five justices. When it is not possible to

discover a single standard that legitimately constitutes the

narrowest ground for a decision on that issue, there is then no

law of the land because no one standard commands the support

of a majority of the Supreme Court. See Rappa v. New Castle

County, 18 F.3d 1043, 1058 (3rd Cir. 1994).

With respect to the Supreme Court’s analysis in Eastern

Enterprises, it is difficult to discern a general principle of law

that supports appellant’s claim that retroactive CERCLA

liability is unconstitutional. Because the substantive due

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process reasoning presented in Justice Kennedy’s concurrence

is not a logical subset of the plurality’s takings analysis, no

“common denominator” can be said to exist among the Court’s

opinions. The only binding aspect of such a splintered decision

is its specific result, and so the authority of Eastern Enterprises

is confined to its holding that the Coal Act is unconstitutional as

applied to Eastern Enterprises.

Significantly, two appellate courts have failed to hold the

Coal Act unconstitutional as it applies to other coal mining

corporations. See Anker Energy Corp. v. Consolidation Coal

Co., 177 F.3d 161, 168 (3d Cir. 1999); Ass'n of Bituminous

Contractors, Inc. v. Apfel, 156 F.3d 1246, 1247 (D.C.Cir.

1998). If the holding of Eastern Enterprises is so specific that

it does not support a finding that the Coal Act’s retroactive

liability provision is unconstitutional as applied to coal

operators not in the same position as Eastern Enterprises, then it

may not be said to stand for the much broader proposition that

the application of retroactive CERCLA liability to Alcan runs

afoul of the Constitution.

As noted, courts considering the issue prior to the Eastern

Enterprises decision consistently agreed that the retroactive

liability scheme of CERCLA is constitutional. Like this Court,

several other courts have been asked to reconsider this

precedent in light of Eastern Enterprises. Those courts have

uniformly held that CERCLA continues to pass constitutional

muster. See United States v. Dico, Inc., 266 F.3d 864, 879-80

(8th Cir. 2001); Franklin County Convention Facilities Auth. v.

Am. Premier Underwriters, Inc., 240 F.3d 534, 550-53 (6th Cir.

2001); United States v. Manzo, 182 F. Supp. 2d 385, 407-08

(D.N.J. 2000); Combined Prop./Greenbriar Ltd. P’ship v.

Morrow, 58 F. Supp. 2d 675, 677-82 (E.D. Va. 1999); United

States v. Vertac Chem. Corp., 33 F. Supp. 2d 769, 784-85 (E.D.

Ark. 1998), rev’d on other grounds sub nom. United States v.

Hercules, Inc., 247 F.3d 706 (8th Cir. 2001).

17a

Weare in accord with this consistent authority that both pre-

and post-dates Eastern Enterprises. As a consequence, holding

Alcan jointly and severally liable under CERCLA for the

cleanup costs incurred at PAS and Fulton does not result in an

unconstitutional taking adverse to Alcan, or a deprivation of its

right to due process.

Conclusion

For the reasons stated, the judgment of the district court is

affirmed.

18a

APPENDIX C

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF NEW YORK

Nos. 87-CV-920, 91-CV-1132

UNITED STATES OF AMERICA, and THE STATE OF

NEW YORK,

Plaintiffs,

v.

ALCAN ALUMINUM CORPORATION, et ai.,

Defendants.

May 1, 2000

MEMORANDUM — DECISION & ORDER

McAVOY, District Judge:

I. Procedural History

On June 10, 1987, the United States of America and the State

of New York (collectively “the government”) initiated an action

against 83 business entities to recover response costs pursuant

to Section 107 of the Comprehensive Environmental Response,

Compensation and Liability Act (“CERCLA”) as amended, 42

U.S.C. § 9601, et seg., in connection with the clean-up costs of

a hazardous waste site formerly owned by Pollution Abatement

Services of Oswego, Inc. (“PAS”). Shortly after

commencement of that action, the government entered into a

19a

consent decree with 82 of the defendants, recovering

approximately $9.1 million of the approximately $12.3 million

in response costs incurred through April 1, 1987. The present

litigation proceeded against Alcan Aluminum Corporation

(“Alcan”), the only non-settling defendant.

In February 1988, Alcan commenced a third-party action

against Cornell University (“Cornell”). That action sought a

declaration that Cornell was jointly and severally liable for the

response costs incurred by the government relative to PAS and

an order directing Cornell to contribute its fair share of the

costs.

In January of 1991, this Court granted summary judgment in

favor of the government, holding Alcan jointly and severally

liable for approximately $4 million in response costs at PAS.

See United States v. Alcan, 755 F. Supp. 531 (N.D.N.Y. 1991)

(“Alcan-PAS”). The Court also granted Alcan’s motion against

third-party defendant, Cornell, and found that a hearing was

necessary to determine Cornell’s fair share of response costs.

See id.

On November 19 and 20, 1991, the Court held a hearing to

determine Cornell’s fair share of the response costs incurred by

the government at PAS. The Court adopted the six-factor fair

share allocation test set forth in United States v. R.W. Meyer,

Inc., 932 F.2d 568 (6th Cir. 1991), and found Comell liable for

six percent of the response costs recovered. from Alcan and,

thus, the Court awarded Alcan $310,540.92.

On appeal, the Second Circuit affirmed the grant of summary

judgment with respect to the imposition of liability against

Alcan for response costs at PAS and the finding that Alcan was

entitled to contribution from Cornell. See United States v.

Alcan, 990 F.2d 711 (2d Cir. 1993). However, the Second

Circuit reversed the Court’s finding that the government was

entitled to summary judgment on the issue of damages. See id.

In “essentially” adopting the reasoning of the Third Circuit in

20a

United States v. Alcan Aluminum Corp., 964 F.2d 252, 267-271

(3d Cir. 1992) (“Alcan-Butler”), the court found that the

common law scheme of joint and several liability applies to

CERCLA. Under this rubric,

where two or more tortfeasors act independently and

cause a distinct or single harm, for which there is a

reasonable basis for division according to the

contribution of each, then each is liable for damages

only for its own portion of harm. In other words, the

damages are apportioned. But where each tortfeasor

causes a single indivisible harm, then damages are not

apportioned and each is liable in damages for the entire

harm. 5

990 F.2d at 722 (citing Restatement (Second) of Torts § 433(A)

(1965)). The Second Circuit “candidly admitted” that its

holding brought causation into CERCLA, a strict liability

statute, through the back door, but limited the “special

exception to the usual absence of causation” to situations where

a defendant’s “pollutants did not contribute more than

background contamination and also cannot concentrate.” Jd.

Thus, the court held:

Alcan may escape liability if it either succeeds in

proving that its oil emulsion, when mixed with other

hazardous wastes, did not contribute to the release and

the clean-up costs that followed, or contributed at most

to only a divisible portion of harm.

Id. (citing Alcan-Butler, 964 F.2d at 270). The court further

instructed that Alcan “may present evidence relevant to

establishing divisibility uf harm, such as, proof disclosing the

relative toxicity, migratory potential, degree of migration, and

synergistic capacities of the hazardous substances at the site” to

show that the harm at PAS was divisible. Jd. (citing Alcan-

Butler, 964 F.2d at 270 n. 29, 271; United States v. Monsanto,

Co., 858 F.2d 160, 172 n. 26 (4th Cir. 1988), cert. denied, 490

2la

US. 1106 (1989)). Finally, the court held that if Alcan can

show divisibility of harm they must also provide a “reasonable

basis for apportionment of liability.” Jd.

At that time, the case United States v. Alcan Aluminum, 91-

CV-1132 (“Alcan-Fulton”), involving clean-up costs at a

superfund site in Fulton, New York was also pending before the

Court. On December 1, 1993, the Court consolidated Alcan-

Fulton with the PAS case.

In May of 1996, the government moved for summary

judgment against Alcan on two issues: (1) liability in the Alcan-

Fulton case and (2) divisibility of harm and apportionment of

costs in Alcan-PAS. Alcan opposed this motion, cross-moved

for summary judgment on the same issues, and moved to

dismiss for lack of subject matter jurisdiction, claiming that

CERCLA (1) cannot be applied retroactively and (2) is violative

of the Commerce Clause. On October 28, 1996, the Court

granted the government’s motion for summary judgment with

respect to liability at the Alcan-Fulton site,’ denied Alcan’s

motion to dismiss for lack of subject matter jurisdiction, and

reserved decision pending rebriefing on the issues of divisibility

and apportionment of harm. See United States v. Alcan

Aluminum Corp., 1996 WL 637559 (N.D.N.Y. Oct. 28, 1996).

After considering the supplemental briefing submitted by

both parties, the Court denied the government’s motion for

' To establish liability under CERCLA the government must establish that:

(1) a defendant is in one of the four categories of covered persons listed in

42 U.S.C. § 9697(a) as liable for costs of remedial action; (2) the site of the

cleanup is a facility within 42 U.S.C. § 9601(9)’s definition; (3) there is a

release or threatened release of hazardous substances at the facility; (4) as a

result of which plaintiff has incurred response costs; and (5) the costs

incurred conform to the National Contingency Plan under 42 U.S.C. §

9607(a)(4)(a) as administered by the Environmental Protection Agency. See

Alcan, 990 F.2d at 719-20 (citing B.F. Goodrich Co. v. Murtha, 958 F.2d

1192 (2d Cir. 1992)). Alcan did not contest these elements and, thus, the

Court granted the government’s motion for summary judgment on this issue.

See Alcan, 1996 WL 637559, at *7.

22a

summary judgment; finding that genuine issues of fact existed

with respect to the constituents of Alcan’s emulsion;’ whether

the emulsion contributed to the response costs and clean-up;

and whether the metals in Alcan’s emulsion could have

concentrated and, thus, posed an environmental threat. See

United States v. Alcan, 1997 WL 727506, at *4(N.D.N.Y. Aug.

20, 1997).

On October 29, 1998, Alcan moved to dismiss the Complaint

pursuant to Fed. R. Civ. P. 12(b)(6), asserting that the

retroactive application of CERCLA is unconstitutional in light

of the Supreme Court’s decision in Eastern Enter. v. Kenneth S.

Apfel, 524 U.S. 498 (1998). The Court denied this motion in a

Memorandum-Decision & Order dated May 11, 1999. See

United States v. Alcan Aluminum Corp., 49 F. Supp. 2d 96

(1999).

Cornell was released from this case by a stipulation signed

September 29, 1999.

The Court held a bench trial in this action during October 4-

8, 1999 to determine whether Alcan could avoid or limit

liability.’ At trial, the government argued that Alcan could not

avoid liability because: (1) Alcan could not prove that its

emulsion, when mixed with hazardous substances, did not

contribute to the release or clean-up costs or contributed to a

divisible portion of the harm; (2) Alcan’s emulsion contained

polychlorinated biphenyls (“PCBs”), Volatile Organic

2 Alcan claimed that its emulsion contained only (1) cadmium; (2)

chromium; (3) copper; (4) lead; and (5) zinc whereas the government

claimed that the emulsion also contained (6) aluminum; (7) nickel; (8)

polychlorinated biphenyls (“PCBs”); and (9) volatile organic compounds

(“VOCs”). See Alcan, 1997 WL 727506, at * 4.

> With the parties consent, the Court appointed an expert pursuant to Fed. R.

Evid. 706 to assist it in evaluating the scientific evidence. The Court’s

expert, Professor Charles Driscoll, Ph.D., is associated with the Department

of Civil and Environmental Engineering at Syracuse University. The

expert’s report is part of the record in this case.

}

23a

Compounds (“VOCs”), and above background levels of metals,

which contributed to the release and clean-up costs; and (3) the

metals in Alcan’s emulsion were capable of concentrating.

Alcan, on the other hand, argued that: (1) its emulsion did not

contain PCBs, VOCs, or above background levels of metals; (2)

the metals did not concentrate; (3) that the legal standard

adopted by this Court is incorrect; and (4) it could establish

divisibility of harm by looking at the relative toxicity of

hazardous substances at the PAS and Fulton Sites and

demonstrating that the emulsion contained only background

metals that did not concentrate. Alcan did not address the effect

of its emulsion as a whole on the response costs at PAS and

Fulton; instead, it focused on the individual constituents of its

emulsion.

II. Findings of Fact

A. Alcan’s Plant and the Hot Rolling Process

Alcan operates a hot mill, including a hot rolling line which

processes aluminum ingots‘ into sheets of aluminum. The

process uses an oil and water emulsion to lubricate and cool the

ingot and the steel rolls used to reduce the ingot’s width. The

emulsion picks up fragments of the ingots during the rolling

process. Although the emulsion is filtered before disposal, the

filtration process does not remove all of the metal fragments.

As aresult, Alcan’s emulsion contains aluminum as well as the

impurities in the ingot, cadmium, chromium, copper, lead,

nickel, and zinc.

Before the ingot is placed on the hot rolling line, it is heated

in “pusher furnaces” (also called homogenizing furnaces or

soaking pits). In the 1970s, Alcan cleaned the ingot with 1,1,1,

Trichloroethane (“TCA”) before placing it in these furnaces.

‘ The aluminum ingots are composed of recycled beverage containers and

scrap aluminum that are melted down and cast into ingots. See Lagoe

Testimony. The ingots are not pure aluminum; impurities include cadmium,

chromium, copper, lead, nickel, and zinc.

24a

After it is heated, the ingot is placed on the hot rolling line

where it passes through an edging mill, two rolling mills, and

various shears.

The first rolling mill, the 120 inch reversing mill (the “120

inch mill”), reduces the thickness of the ingot by approximately

one half inch each time the ingot passes through. A!can uses a

two to three percent oil’ and water emulsion as a lubricant and

coolant in this mill (the “120 inch mill emulsion”). After the

ends are sheared, the ingot travels to the 100 inch mill (also

called the finishing mill or tandem mill) (the “100 inch mill”),

which further reduces its thickness. An emulsion composed of

about six percent oil in water is used to cool and lubricate the

rolls in the 100 inch mill (the “100 inch mill emulsion”).

The used emulsion is collected in sumps underneath each of

the mills. The scum-like top layer of the emulsion is removed

with a skimming system before the bulk of the emulsion is

pumped into the system’s “dirty compartment” for storage. The

emulsion is then sent through a belt type skimmer, and next, to

a recirculation system. See Government Ex. 36, at p. 1.

Distilled water is added to the emulsion to keep the

concentration of oil and water constant. The emulsion is

recirculated for up to one year before it is deposited in a waste

emulsion collection system in the hot mill area and pumped to a

central storage facility for processing and disposal. The sumps

underneath the rolling mill are not continuous. There are walls

or other barriers separating the 100 inch mill emulsion from the

120 inch mill emulsion. When the emulsions are sent to waste,

however, they are combined. See Lagoe Testimony, Tr. at 168.

At the time of disposal, the waste emulsion was composed of

approximately eighty percent emulsion from the 100 inch mill,

* At the time Alcan disposed waste at PAS and Fulton, they used Farbest oil

in the emulsion. The Farbest oil contained oil and unknown proprietary

additives.

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25a

ten percent emulsion from the 120 inch mill, and ten percent

hydraulic, lubricating, and bearing oils. See id. at 149.

The floor and wall areas underneath the roll table and shear

pits are cleaned only once per year; thus, the areas are not

subject to a constant flushing of coolant during production. See

Government Ex. 24.

Until the mid-1980s, in addition to the hot rolling line, the

hot mill area contained a plate mill (also called the flat sheet

line and cut-to-length line). The plate mill converted the rolls

of aluminum created by the hot mill into flat sheets of

aluminum. Alcan used rags soaked with TCA to clean the

rollers on this line. See Lagoe Testimony, Tr. at 52.

Other than the discontinuation of use of certain materials like

TCA and fluid containing PCBs, there were no major changes

on the hot rolling line from 1970 to 1989. In 1978, however,

Alcan installed an ultra filtration unit. The ultra filtration unit

processes the emulsion so that less material is sent out for

disposal and more is recycled in house. See Lagoe Testimony,

Tr. at 18. In the ultra filtration process, the emulsion is

circulated through a membrane system, yielding two by-

products: “the ultra filtration concentrate which is subsequently

used as a fuel and a permeate which then flows to an on-site

lagoon for further treatment.” See Government Ex. 36, at p. 2.

Sometime in 1978, the ultra filtration unit was connected to

outfall 002, which discharged treated permeate into Lake

Ontario. See Lagoe Testimony, Tr. at 187; Government Ex. 3.

B. PAS

From 1970 to 1977, Pollution Abatement Services operated

PAS, a high temperature liquid chemical waste incineration

facility on fifteen acres in the City of Oswego, New York. Lake

Ontario lies almost directly North of PAS and the entire site

area slopes toward Lake Ontario. The site lies between two

creeks (Wine Creek and No Name Creek), which interseci. The

creeks collect surface water and carry it to Lake Ontario. See

26a

Appendix 1. A million gallon lagoon was located in the

southern portion of the site, at the highest level of elevation.

Leakage from the lagoon’s North side and overflow flowed

North toward Lake Ontario. The middle area of PAS contained

thousands of drums of “various chemicals in various

conditions.” MacDonald Testimony, Tr. at 586. The lower

portion of PAS contained a number of storage tanks and an

incinerator. The incinerator stopped working at some point

during PAS’s operation and waste that was meant to be

incinerated was combined and stored in on-site lagoons. See

MacDonald Testimony, Tr. at 585.

Several liquid waste spills and lagoon overflows occurred

while PAS operated the site. The combination of high rain fall

and overflowing and leaking lagoons led to three oil spills in

1976. In April, the United States Coast Guard (“USCG”)

responded to PAS to investigate an oil spill. Commander

MacDonald, the investigating officer, found that the site was

significantly contaminated. “Some of [the] drums were holding

liquids. Some of the drums had completely disintegrated,

leaving a jelly type of consistency that was intact. The ground

was covered. The ground was — there were pools of

contamination on the grounds. There was oil on the grounds.

This facility had become a dumping ground.” MacDonald

Testimony, Tr. at 586; see also Freestone Testimony, Tr. at 659;

Yezzi Testimony, Tr. at 673; Government Exs. 86-54, 86-65 to

86-69, 86-84, 86-85. In response to the April 1976 spill, the

USCG constructed a secondary lagoon (the “Coast Guard

Lagoon”) on the Northern portion of the site to contain spilled

waste, instituted a recycling system that returned run off to the

million gallon lagoon, and employed absorbent beams to collect

oil from the surface of the adjacent creeks. See Government

Exs. 85, 125.

In June of 1976, a second oil/chemical spill resulted from a

combination of heavy rains, surface run-off, leaching from the

lagoons, and spillage from the million gallon lagoon. The

27a

EPA’s testing confirmed a USCG report that the oil/chemical

mixture included PCBs. See Government Ex. 85, at p. 2.

In December 1976, a third spill occurred after which the EPA

took control of the site and built a tertiary lagoon (the “EPA

lagoon’) in a further attempt to contain run-off.

In March of 1977, the situation at PAS became critical, due

in part to heavy rain and water flow from the spring thaw. All

of the on-site lagoons were in danger of overflowing and/or

bursting; the influx of water from the spring thaw was greater

than PAS’s discharge and/or diversionary capacity; and there

was a high chance of continued precipitation. See Government

Ex. 125. Testing conducted at the behest of the EPA indicated

that the million gallon lagoon leaked and that the Coast Guard

and EPA lagoons were potentially unstable.

The State of New York constructed a drainage ditch to divert

uncontaminated surface run-off to Wine Creek. However, the

pollutant saturated ground contaminated the ditch and further

contaminated Wine Creek.

Reducing the level of the million gallon lagoon was a

primary concern, see Government Ex. 015, because its leakage

contributed to the hazardous run-off and oily spills. See Yezzi

Testimony, Tr. at 672. (The million gallon lagoon overflowed

and material continuously leaked through the lagoon’s base and

walls.); see also Government Ex. 62-004; 62-010; 62-011; 62-

013; 62-030. The overflow and leakage from the lagoon flowed

down through the barrel storage area prior to reaching the Coast

Guard Lagoon: See MacDonald Testimony, Tr. at 610; Yezzi

Testimony, Tr. at 688 (“Any material from the lagoon would

come down what we, in this case, named the valley of the

drums. You have the drums that were leaking and deteriorating

and it would commingle with the waste coming down [from the

million gallon] lagoon. We tried to put in some drainage

ditches around to kind of control the — the spread of

contamination [ ] along the surface of the site * * *.”

28a

Portions of the ground at the site contained so much

contamination that “walking on the site was [to some degree

like walking] on a wet sponge, a very wet sponge. To the North

side of the lagoon wall, the area there was very, very saturated

with contaminated materials.” Yezzi Testimony, Tr. at 678.

Recovery wells dug to collect material flowing through the

underground soil filled up rapidly with contaminated liquids.

See Yezzi Testimony, Tr. at 690. Once the contaminants

commingled, they could not be separated such that you could

identify or treat an individual generator’s waste. See id. at 691.

PAS abandoned the site in 1977, leaving approximately

12,000 drums of liquid waste and 100,000 gallons of bulk -

chemical waste on the site. Metals, VOCs, and PCBs were

found in the lagoons and in drums removed from the site.

Hazardous substances were released from the site into the soils,

surface waters, stream sediments, and groundwater at and

outside of the site. The results of testing at PAS indicated that

contamination was significant and widespread but nonuniform

across the site. The soils, surface water, and sediments at PAS

were contaminated with VOCs‘ and metals’ and the soil was

contaminated with PCBs.’ See Government Ex. 73. The

® Surface water testing found concentrations of 0-150 parts per billion

(“ppb”) of 1,1 dichloroethane; 0-6.9 ppb of 1,1 dichloroethylene; 0-51 ppb

of 1,1 trichloroethane, and 11-80 ppb of vinyl chloride. See Government Ex.

73, at Table 4-11. Results of sediment testing are listed in Table 4-12 of

Government Exhibit 73. Soil sampling results can be found in Government

Exhibit 77 Table 5-1.

7 Metals found in soil samples included chromium (range 9.8-2.5 > >g/g);

copper (range 8.4-64 g/g); lead (range 2.9-9.1 g/g); nickel (range 6.6-27

ug/g); and zinc (range 19-61 g/g). See Government Ex. 73, at Table 4-10;

see also Government Ex. 77, Table 5-5. Complete metal results for surface

water are located in Table 4-11 of Government Exhibit 73. Results of

sediment testing are listed in Table 4-12.

® PCB contamination in the soil ranged from 300-22,000 ppb. See

Government Ex. 73, at Table 4-10; see also Government Ex. 77, at Table 5-

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29a

recorded values of PCBs and VOCs found in the soil “suggest

that contamination was a result of a multitude of separate

sources since no clear areal distribution pattern of

contamination was discovered.” See Government Ex. 73, at p.

4-16; see also Government Exs. 78, 79. The high level of

metals found in the soil were generally consistent with both off-

site samples and background soil levels for the eastern region of

the United States. See, e.g, Government Ex. 72, 78, and 79.

Nickel was found in PAS’s groundwater at concentrations that

exceeded applicable clean-up and background levels. See

Stipulated Fact No. 93; Government Ex. 79, at p. 8 (nickel

appears to be the only site-related metal in the groundwater);

Government Ex. 72, at pp. 58-60 (nickel was noteworthy

because of its widespread appearance at high concentrations).

At least some of the 4,607,380 gallons of hazardous’ liquid

waste Alcan sent to PAS for treatment and disposal was stored

in the million gallon lagoon. Alcan’s waste constituted

approximately twenty-five percent of the total volume of waste

sent to PAS. See Lagoe Testimony, Tr. at 230. Numerous tnal

witnesses testified that the million gallon lagoon contained

three distinct layers of waste: “a 10-14 in. deep 300,000

[gallon] viscous oily layer on top, a 3-5 ft. deep 500,000

[gallon] aqueous layer which contained an intense blood-red

colored liquid with a high solids content, a Total Organic

Carbon (“TOC”) content of approximately 1.5% and high metal

ion concentrations” and a bottom layer of semi-solid sludge.”

Government Ex. 125. Testing indicated that PCBs

contaminated the lagoon’s top layer. See Government Ex. 62-

025; 62-033; 62-051; 62-052; and 62-136; 84; and 85, at p. 2.

* The Court previously determined that Alcan’s emulsion was hazardous

within the meaning of CERCLA. See Alcan, 755 F. Supp. at 535.

' Tests of the aqueous layer indicated the presence of: .075 ppb PCB; 10

parts per million (“ppm”) aluminum; 500 ppb cadmium; 20 ppb chromium;

30 ppb copper; 5 ppm lead; 70 ppm nickel and 25 ppm Zinc. See

Government Ex. 125, Table II.

30a

Hydrochloride gas, which may facilitate the breakdown of an

emulsion, was also disposed of in the lagoon.

After taking control of PAS, the EPA contracted with

Sealand Environmental Services to remove oil containing

liquids from the million gallon lagoon and a 20,000 gallon pit.

Sealand vacuumed off the oily PCB contaminated layer of the

million gallon lagoon and sent the waste for incineration. After

exploring numerous alternatives, the EPA brought in a Mobile

Physical Chemical Treatment unit to treat the aqueous layer of

the lagoon. See Government Ex. 62-052 (the only alternative

left for treating liquid wastes in an environmentally acceptable

manners was to pass the full contents through a column). The

carbon filtration unit (the “Blue Magoo”) used at PAS is a

mobile physical chemical treatment system designed and built

by Envirex in combination with the EPA. After conducting a

“treatability study,” where Envirex determined “what kinds of

inoculant [the government] should use to settle out suspended

solids and dissolved metals,” and a “pilot plan study to

determine what [the government’s] carbon utilization rate [and

loading] should be,” the government processed waste water

from the containment lagoons at PAS multiple times. See

Freestone Testimony, Tr. at 652-53; see also Government Ex.

125. The government also used the Blue Magoo to treat the

aqueous layer of the million gallon lagoon, which contained

Alcan’s emulsion. Jd. The liquid was treated with a process

“consisting of PH adjustment, flocculation, mixed-media

filtration and carbon adsorption,” Government Ex. 125, such

that organics and suspended solids were removed. The organic

materials included in the treated layer included oils. /d.

Although the volume of organic materials in the treated layer

led to a “very high carbon utilization rate,” the treatment

cleaned the water substantially. Jd. at 656. This treatment was

3la

part of a court ordered remedy at PAS.'' See Government Ex.

63.

After the aqueous layer was treated, the sludge-like layer was

removed and sent to a landfill site. Approximately fifty

compressed gas cylinders were discovered in the lagoon when

the sludge was partially removed. See, e.g., Government Ex.

85, at p. 7. Before the cylinders were disposed of, they were

examined, cleaned, and when necessary, emptied. Testing of

the sludge layer revealed the presence of .50 ppm cadmium;

31.00 ppm chromium; 136.00 ppm lead; and numerous VOCs.

See Government Ex. 91, at Table I, Government Ex. 98, at

Table 3-3. The clean-up of PAS continued from 1978 through

1981. Underground storage tanks and drums filled with

hazardous materials, including PCBs were discovered and

removed.

In 1981, the surficial clean-up of PAS began. The clean-up

included the demolition and disposal of on-site facilities,

removal of approximately 8,000 remaining drums, and the

drainage and disposal of approximately 80,000 gallons of liquid

chemical waste from on-site bulk storage tanks. See

Government Ex. 73, at 4-2. In 1982, oily waste continued to

permeate PAS’s soils and surface water.

In November of 1982, the New York State Department of

Environmental Conservation (“DEC”) hired URS Company to

perform a complete site investigation, characterize the

remaining contamination, recommend remedial actions, and

"On August 26, 1977, a federal district court in Auburn, New York ordered,

inter alia, that the EPA remove the liquid contents from the containment

lagoons and process the material on-site through some sort of filtration

system such that the EPA could safely discharge the effluent into Wine

Creek. That court also ordered the EPA to remove as much liquid from the

million gallon lagoon as necessary to eliminate overflow or leakage from the

lagoon. See Government Ex. 63 (United States v. Pollution Abatement

Services of Oswego Inc., H. Willard Pierce and Jack Miller, 77-CV-271),

see also Government Ex. 85, at p. 4.

32a

design the remedial program for PAS. Pollution reports filed by

the EPA indicated that despite significant clean-up efforts, PAS

still posed a serious environmental threat and in September

1983, PAS was placed on the National Priorities List. See 42

U.S.C. § 9605(a)(8)(b); 40 C.F.R. Part 300, Appendix B.

In 1984, the EPA issued a Record of Decision (“ROD”)

selecting the remedial action to be implemented at PAS. The

ROD provided for: 1) containment of hazardous substances at

PAS through construction of a soil bentonite slurry wall; 2)

construction of an impermeable cap; 3) installation of a leachate

collection system within the slurry wall, and d) installation of a

groundwater recovery system and on-site treatment of the

recovered leachate and groundwater. See Government Ex. 84.

By 1986, the DEC completed all of its remedial activities other

than the on-site treatment system. The EPA and DEC

continued to monitor PAS and in 1990, the EPA issued an

administrative order on consent to PAS’s potentially

responsible parties (“PRPs”), other than Alcan, to perform a

supplemental remedial investigation. In September 1993, (after

considerable work had been done) the EPA issued a

supplemental ROD for PAS to address outside contamination.

A group of PRPs conducted a Supplemental Pre-Remedial

Design Study at PAS. On August 10, 1998, the Court approved

a Consent Decree between the EPA and 80 PRPs, which

required the non-de minimis PRPs" to implement the remedy in

the Supplemental ROD and reimburse the EPA for $963,300 in

past costs and the first $500,000 of future response costs. The

de minimis PRPs paid the EPA their volumetric share of past

costs, totaling $86,269, and agreed to pay their volumetric share

of future work and response costs plus a premium.

\2 The EPA determined that those PRPs who sent a total waste volume of

less than 1% to PAS, provided that the waste was not significantly more

toxic than other waste sent to the site, were de minimis PRPs.

33a

In September of 1997, the EPA issued a second supplemental

ROD for PAS to address PCB contamination in adjacent creeks

and wetlands. The ROD recommended no further action to

remediate the contamination other than long term monitoring of

PCB levels.

C. Fulton Terminals

From 1972-1977, Fulton Terminals, Inc., a subsidiary of

PAS, operated a staging and storage area for materials awaiting

incineration at PAS (“Fulton”). Fulton consists of

approximately 1.6 acres in a light industrial/commercial area of

the City of Fulton in Oswego County, New York. The Fulton

Site housed five above-ground storage tanks, one partially

buried storage tank, and two below-ground storage tanks. See

Appendix 2. Essentially, Fulton housed waste that PAS could

not accept because it was over capacity. The contamination at

Fulton was due primarily to leaks in the storage tanks. See

Rotola Testimony.

The Court previously determined that Alcan’s waste

emulsion was stored at Fulton and that the emulsion was

hazardous within the meaning of CERCLA. See Alcan, 1996

WL 637559, at *3, *15. The parties have stipulated that

Alcan’s waste was stored in Tank One, which was an above-

ground tank located in the site’s South West corer. See

Appendix 2. Although sample analyses indicated significant

PCB contamination at Fulton, tests of the waste remaining in

Tank One found less than .01 pg/g PCB. See Rotola

Testimony; Government Ex. 98, Table 3-1; see also

Government Exs. 88-90. Tests of the soil and groundwater near

Tank One revealed VOC and metal contamination. VOC

contamination included vinyl chloride, TCA, and 1,1

dichloroethene, while heavy metal contamination included

cadmium, lead, nickel, and chromium. See Rotola Testimony.

The metal contamination may have been naturally occurring as

the sample results generally fell within typical values for soil

reported in eastern regions of the country. See id.; see also

34a

Government Exs. 100, 101 (finding that in general, on-site

metal findings are “well within typical values for the eastern

region.”), and 102. The EPA listed both nickel and vinyl

chloride as “contaminants of concern” at Fulton. See Rotola

Testimony.

D. Possible Constituents of Alcan’s Emulsion

From 1970-1977, Alcan sent 4,607,380 gallons of used

emulsion to PAS. Between August 1972 and January 1973,

Alcan shipped approximately 70,000 gallons of emulsion to

Fulton. No samples of Alcan’s emulsion were taken prior to its

disposal.’ Accordingly, the parties and the Court looked to

samples of Alcan’s emulsion taken between 1981 and 1989;

Alcan’s use and purchase of materials in its Oswego facility; the

contamination of Alcan’s facility; and the results of government

samples taken from PAS, Fulton, Butler Tunnel,'* and Sealand’®

'3 Alcan employee David Lagoe offered a “souvenir sample” of emulsion

allegedly taken in 1978 as evidence that Alcan’s emulsion did not contain

PCBs at this time. Lagoe testified that he retained this sample as a souvenir

from the start up of the ultra filtration process. Lagoe further testified that he

retained the keepsake in his desk until the issue of whether Alcan’s emulsion

contained PCBs in the early 1970s arose in this litigation. See Lagoe

Testimony, Tr. at 116-117. Testing of the sample conducted by O’Brien &

Gere found less than 1,000 parts per billion of PCBs (the detection limit was

1,000 ppb). See Lagoe Testimony, Tr. at | 17; Alcan Ex. A 8.

Lagoe testified that the emulsion in the sample did not look any different

than that used at the plant today.

Significantly, Lagoe did not have the sample analyzed in 1981 when tests

first indicated that PCBs .aay have contaminated the hot roll system. Further,

Lagoe did not have the sample analyzed in 1983 when Alcan began an in-

house investigation, including extensive testing of the hot mill system to

determine the source and extent of PCB contamination, to be discussed later.

Instead, Lagoe sent the sample for analysis in 1985 after he was aware that

Alcan would likely be a defendant in a number of CERCLA lawsuits.

Based on this information, the Court finds that the sample lacks

credibility and assigns it no evidentiary weight.

'4 In the late 1970s, approximately 2,000,000 gallons of oily waste was

disposed of at the Butler Tunnel Site. Alcan’s used oil emulsion accounted

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to determine the likely constituents of Alcan’s emulsion.

Samples from Butler Tunnel and Sealand are relevant because

Alcan sent waste emulsion to these sites in the late 1970s and

early 1980s. Because no major changes occurred in Alcan’s hot

rolling process between 1970 and 1989, the waste sent to Butler

Tunnel and Sealand is representative of that sent to PAS and

Fulton.

1. Metals

This Court has previously determined, and the parties now

stipulate, that, in addition to oil and water, Alcan’s emulsion

contained aluminum, cadmium, chromium, copper, lead, and

zinc. The metal in the emulsion resulted from fragments or

“fines” of the ingot breaking away into the emulsion during the

rolling process. Impurities in the aluminum ingot included

nickel. There is no scientific reason to expect that nickel would

behave differently from the other metals in the ingot. In other

words, if the other metals made their way into the emulsion

for approximately 35,000 gallons of this waste. Because the Court will

recount only those details necessary for its analysis, further details regarding

Alcan’s involvement in the Butler Tunnel site can be found at Alcan-Butler,

964 F.2d 252.

' Sealand operated from 1978-1980. See Nunes Testimony, Tr. at 335. The

site became an environmentai problem in 1980 when waste contaminated an

adjacent wetland area. The DEC determined that improper mixing of waste

and soil in the land spread area led to hazardous run-off. Alcan sent

approximately two million gallons of waste oil emulsion for disposal via land

spread at Sealand. This represents approximately seventy-two percent of the

total waste that was land spread at the site. Waste sent for land spreading

was either placed directly into the land spreader or into a storage tank to

await disposal. See Nunes Testimony, Tr. at 344. Tests of Sealand’s land

- spread area and storage tank indicated the presence of PCBs. Insignificant

levels of VOCs were found in the soil and no detectable levels of VOCs

were identified in the storage tank. See Government Ex. 115, at 4-3; Nunes

Testimony, Tr. at 352.

Alcan’s waste was also disposed of in Sealand’s disposal cell area where

tests revealed relatively high concentrations of VOCS, including TCA, DCA,

and vinyl chloride. See Government Ex. 115, Table 3-2.

36a

during the rolling process, there is no reason to expect that

nickel would not have done the same thing. See Meyer

Testimony, Tr. at 758; Driscoll. Alcan had the opportunity to

test its emulsion for nickel, yet offered no evidence other than

the absence of testing by the government to contradict

testimony suggesting that the emulsion contained nickel. The

Court is not aware of any sampling results that indicate nickel

was not in the emulsion. On the basis of Dr. Meyer’s testimony

and the opinion of the Court appointed expert, the Court finds

that it is more likely than not that Alcan’s waste emulsion

contained nickel. See id.

2. PCBs

The government argued that the Court should find that PCBs

contaminated Alcan’s emulsion in the 1970s, when Fulton and

PAS were in operation, based on the totality of the

circumstances. This argument works backwards from Alcan’s

discovery of PCB contamination in its Oswego Plant in 1981

and is supported by the temporal circumstances surrounding the

use and availability of PCBs and the extent of the

contamination at Alcan’s plant. Alcan, on the other hand,

argued that the emulsion sent to PAS and Fulton did not contain

PCBs. Alcan’s argument is supported by the testing for PCBs

conducted at PAS, Fulton, and Butler Tunnel and the absence of

sampling data prior to 1981.

The evidence shows that Alcan purchased hydraulic fluids

and lubricants containing PCBs in the late 1960s and 1970 from

Monsanto and E.F. Houghton & Co. Alcan used these fluids in

the casting pits in the remelt area and in transformers in various

area of the Oswego plant, including the recycling center, remelt

area, the homogenizing furnaces, and the cold mill. Monsanto,

the sole domestic manufacturer of PCBs, ceased production of

PCB containing fluids in 1972 and, thus, PCB fluids were not

commercially available in the United States after this date. See

Kraft Testimony, Tr. at 317.

37a

In October of 1976, Congress passed the Toxic Substances

Control Act (“TSCA”), 15 U.S.C. §§ 2601 et seg. and the EPA

promulgated implementing regulations, which applied to all

types of hydraulic equipment. The regulations allowed

continued use and topping off of systems containing less than

50 ppm PCBs through 1984; required the draining of systems

containing more than 50 ppm PCBs; and prohibited the

introduction of any PCB fluids in new hydraulic systems after

1979. See Kraft Testimony, Tr. at 315-16. Because PCB

containing hydraulic fluids were not commercially available

domestically after 1972 and the TSCA and its implementing

regulations strictly limited the percentage of PCBs in hydraulic

equipment, the evidence suggests that PCB concentration in

hydraulic equipment was lower in the 1980s than in the 1970s.

See Kraft Testimony. In fact, in the early 1980s, the EPA

conducted testing of industrial hydraulic equipment to ensure

compliance with the TSCA and the highest concentrations

discovered measured around 3,000 ppm. See id.

The evidence further suggests that Alcan complied with the

TSCA and that an internal policy prohibiting the purchase of

PCB materials or things known to contain PCBs curtailed

Alcan’s use of PCBs. See Lagoe Testimony, Tr. at 183. Thus,

the Court finds that the concentration of PCBs in Alcan’s

hydraulic equipment mimicked that of industry in general

insofar as the percentage of PCBs in the equipment was lower

in the 1980s than the 1970s. See Kraft Testimony, Tr. at 324.

The results of internal testing of Alcan’s hydraulic equipment,

which found minimal levels of contamination in two units in

1983 (2-3 ppm) and no contamination in 1987, support this

conclusion. See Government Ex. 21.

In June of 1980, the DEC detected PCBs in Alcan’s

' processed water discharge outfall 002. See Government Exs. 3,

6, Lagoe Testimony, Tr. at 188. Alcan subsequently

investigated the source of the PCB contamination under DEC’s

supervision and discovered contamination in the ponds and

38a

wetlands the water passed through en route to outfall 002.

Alcan traced this contamination to the use of PCB hydraulic

oils in the remelt operation in the late 1960s and 1970. See

Lagoe Testimony, Tr. at 244.

Despite the unavailability of PCB fluids and strict guidelines

on PCB use, in-house testing of Alcan’s waste emulsion

conducted in 1981 showed PCB contamination." In 1983,

testing revealed PCB contamination (1 ppm to 45 ppm range)

throughout Alcan’s entire waste oil system. See Government

Fx. 20.7 The waste oil contamination resulted from

contamination in the concrete below the hot roll mill — PCBs

residing in the concrete leached into the emulsion.” See, e.g.,

Lagoe Testimony, Tr. at 390-91.

6 In 1981, tests found from 9.7 to 14.6 ppm of PCBs in the Reclaimed oil

and 8.2 ppm of PCBs in the ultra filtration concentrate. See Government

Exs. 8, 13.

7 Tests of the hot mill sludge found PCB contamination: October 1986—29

ppm; October 1987—350 ppm. See Government Ex. 20; see also

Government Ex. 16.

'8 In 1987, Alcan did an in-house study of the extent of contamination,

analyzing approximately 100 samples of sludge and concrete throughout the

hot line. The results of this analysis indicated that PCBs had contaminated

the concrete floors and walls beneath the hot line. The roll table floor

contained the following levels of PCBs: between the beginning of the hot

line and the Edger (“Section A”) there was an average PCB concentration of

23,425 ppm (range < 15.0-51,000 ppm); the area between the edger and the

120 inch mill (“Section B”) had an average PCB concentration of 960 ppm

(range 410-2,000 ppm); the area between the 120 inch mill and the 8 inch

shear (“Section C”) had an average PCB concentration of 12,589 ppm (range

155-28,000 ppm); the area between the 8 inch shear and the one and one half

inch shear (“Section D”) had an average PCB concentration of 24,944 ppm

(Range 1,200-64,000 ppm); and the area between the one and one half inch

shear and the 100 inch mill (“Section E”) had an average PCB concentration

of 318 ppm (range < 15.0-630 ppm). The side walls contained the following

concentrations of PCBs: Section A had an average of 9,375 ppm (range

7,000-13,000 ppm); Section B had an average of 603 ppm (range 210-910

ppm); Section C had an average of 3,650 ppm (range 3,200-4,100 ppm); and

Section D had an average of 14,000 ppm (range 2,000-29,000 ppm). See

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Between 1981 and 1987, Alcan conducted extensive in-house

testing to determine the source and extent of PCB

contamination and in 1988, Alcan solicited bids for a PCB

remediation project. Testing of the contaminated area revealed

extensive contamination in the concrete walls and floor of the

hot line. O’Brien and Gere (“OBG”) conducted tests of the

concrete up to a depth of 3 inches. The parties stipulate that the

tests found consistent PCB contamination at depths up to three

inches in Sections C and D" of the roll table. See Government

Ex. 23. Moreover, the concrete samples from Section D

contained between 1,200 and 64,000 ppm PCBs and the average

concentration of PCB contamination in the roll trench floor was

14,944 ppm PCBs. See id. Samples of the walls of the roll

trench table found an average of 10,142 ppm PCBs. See id.

Further PCB contamination was found on the roof of the hot

line and on a crane located 30 to 45 feet above the hot line. The

parties stipulated that PCB contamination extended to the

height of the ceiling and crane because “fugitive dusts, mists,

and liquids containing PCBs migrated from the Hot Line to

these areas above the Hot Line.” Stipulated Fact No. 37. This

data reveals extensive and widespread contamination in the hot

roll mill that can only be explained by extensive use and/or

spillage of PCB containing materials. According to an expert

witness, approximately 100 to 200 gallons of PCB

contaminated fluid would need to have been spilled to account

for the contamination in the hot line’s floor alone. See

Connolly Testimony, Tr. at 474; Lagoe Testimony, Tr. at 185.

In this litigation, Alcan maintained that the in-house

investigation did not conclusively determine the source of the

Government Ex. 23. Note that walls or barriers separated the sumps

underneath different portions of the hot roll mill such that Section A is

separated from Section D and Section D is separated from Section E. See

Connolly Testimony, Tr. at 476; see also Appendix 3, which contains a

diagram of hot mill’s sections.

'? For a diagram of the roll table, see Appendix 3.

40a

concrete’s contamination. Alcan theorized that the

contamination may have resulted from a spill from hydraulic

equipment in 1983 near Section E of the hot mill as depicted in

Appendix 3. However, Alcan did not report any spills of PCBs

to New York State or the EPA in the 1980s or warn workers

that there may have been a PCB spill during this time period.

See Lagoe Testimony, Tr. at 184. Moreover, tests indicate that

Alcan’s emulsion was contaminated in 1981, two years before

the possible spill, see Government Exs. 8, 13, and that the

relative concentration of PCB contamination in Section E was

lower than Section A.” See Connolly Testimony, Tr. at 477.

Furthermore, in 1988, Alcan did not explain this theory of

contamination to potential bidders on the remediation project.

Instead, Alcan told the bidders that “the probable source of

contamination was its historical use of a PCB fluid on the roll

table system.””! See Government Ex. 23; Government Ex. 25.

20 For details of these calculations see Connolly Testimony, Tr. at 477-82.

2! In a summary of information provided to bidders, OBG employee Pelis

wrote:

By way of general background, Alcan has had a recurring problem

with PCB showing up in their waste oils and various other material

in the Hot Line area for several years. Last fall they finally

discovered where the probable source was within the plant. It was

suspected that the concrete walls and floor underlaying the roll

table were impregnated with PCB contaminated oils as a result of

the weekly cleaning of the mill rollers with a “heat resistant” oil

back in the 1960’s and 1970’s. The plant conducted an in-house

study of the extent of the contamination through an analysis of over

100 samples of sludge and concrete throughout the Hot Line.

The results of the analysis confirmed Alcan’s suspicions. The

highest concentrations were found between the mills where there is

not a constant flushing action of coolant during production. In

these areas the floor is cleaned only once per year during the annual

two week shut down. Government Ex. 23. Pelis obtained this

information from Alcan employees. See Pelis Testimony, Tr. at

404.

The Court relied on this information despite Pelis’s statement at trial that he

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Employees or representatives of Alcan repeated this theory to

bidders. See Government Ex. 25. Moreover, Lagoe testified

that, during the relevant time period, the roll table was cleaned

with emory paper and lubricated with oil once a week. See

Lagoe Testimony, Tr. at 153. Significantly, Lagoe, the only

Alcan witness to testify at trial, did not have personal

knowledge as to what kind of oil was used to lubricate the roll

table; Lagoe was not in charge of environmental compliance in

the 1970s, did not supervise the cleaning of the roll table, and

did not have an office in the direct vicinity of the table. See

Lagoe Testimony.

In combination with the extensive contamination of the

concrete in the hot roll mill, the facts that: (1) Monsanto

stopped producing PCB hydraulic oils in 1972; (2) the EPA

implemented the TSCA regulations severely limiting and

eventually prohibiting the use of PCBs in 1976; (3) testing

identified significant levels of PCBs in Alcan’s waste oil and

ultra filtration concentrate in 1981; (4) only two pieces of

Alcan’s hydraulic equipment had minimal PCB contamination

in 1983; (5) Alcan did not report any PCB spills to government

agencies or its employees in the 1980s; (6) the relative

concentration of PCB contamination in Section E was lower

than Section A; and (7) Alcan explained the probable source of

contamination to bidders on the remediation project as

historical use of PCB oils on the rolling table, the Court finds it

more likely than not that Alcan’s theory that the concrete

became contaminated because of a possible contractor spill by

the 100 inch roll mill in 1983 is not credible and that the

would make this sort of information up to make OBG look better to Alcan.

See id. at 410. Given Pelis’s previous testimony that the information

regarding historical use of PCBs on the roll table must have come from

Alcan employees, see id. at 404-06, the Court finds Pelis’s attempt to

discredit his official writing unpersuasive. OBG also identified historical use

of PCB oils on the hot mill line in their final bid proposal. See Government

Ex. 24. Significantly, Alcan accepted this bid.

42a

historical use of PCBs on the hot roll line caused the PCB

contamination.

Although there is evidence of significant contamination at

Alcan’s facility, testing at Fulton, PAS, and Butler Tunnel did

not identify significant contamination of PCBs in the areas

where Alcan’s waste was deposited. This testing, however,

does not necessitate a conclusion that Alcan’s waste did not

contain PCBs.” A number of factors including, but not limited

to, the variability of waste at the sites, conditions of the sites,

material tested, and the number of samples taken impact the test

results’ value. For example, only one of many samples taken at

Butler Tunnel detected PCBs (.052 parts per billion), see Towle

Testimony, Tr. at 556; Government Ex. 109. However, neither

the actual waste disposed of at Butler Tunnel nor the oily

discharge compelling clean-up action were tested for PCBs.

There [were] probably a number of reasons why there

[were] so few positive detections for PCB. Among them

and most important would be that most of the samples

are being collected at a time when there are not

currently wastes being discharged from the Butler

Tunnel.

Second, there is a large amount of dilution that’s

occurring, so whatever residual wastes that are left

behind are being diluted with a lot of uncontaminated

mine water also coming out of the Butler mine tunnel.

And additionally, the PCB detection was of a water

sample rather than an oil or waste sample, and PCBs are

not readily soluble in water.

Towle Testimony, Tr. at 556-57. In other words, the tests

conducted at Butler Tunnel tested water discharge rather than -

the oily discharge or oily water. The fact that PCBs not readily

soluble in water is not disputed. See, e.g., Lagoe Testimony, Tr.

22 The concerns regarding testing at the superfund sites are equally

applicable to the findings regarding metals and VOCs.

_ 43a

at 219 (slightly soluble); Towle Testimony, Tr. at 556-57.

Accordingly, if PCBs were present in the oily discharge or

waste, one would expect the majority to travel with the oily

waste rather than remain in the water.

Because of limits on testing and the testing conditions at

PAS, it is equally problematic to conclude that the absence of

detection of PCBs at certain locations, specifically the middle

aqueous layer and bottom sludge-like layer of the million gallon

lagoon, indicates the complete absence of PCBs. Early testing

of the Lagoon did not include tests for PCBs because a standard

procedure was not available to test for PCBs in a “mixed-

organic/oil like matrix.” See Government Ex. 119. Later

testing, however, indicated that PCBs contaminated the top oily

layer of waste. See, e.g., Government Ex. 62. The fact that

significant levels of PCBs were found in the top oily layer of

the million gallon lagoon conclusively establishes that PCBs

were present in the lagoon, despite the fact that they were not

evenly distributed throughout the waste layers. Accordingly, it

would be illogical to infer from tests of the middle and bottom

layer of the lagoon, which did not find PCBs, that none of the

waste deposited in the lagoon contained PCBs. Furthermore,

based on the considerable variability of the waste, discussed

below, and testimony regarding the condition of PAS in

general, it is evident that no single generator’s waste remained

in isolated or even recognizable form after disposal. Thus, the

fact that Alcan initially disposed of liquid in an emulsion form

does not mean that Alcan’s waste constituted only the middle

layer of the lagoon. In fact, as discussed in Section II(E), it is

highly unlikely that Alcan’s waste retained its emulsion form

after disposal and, thus, it is more likely than not that some of

Alcan’s waste resided in the PCB contaminated oily layer of the

lagoon.

The considerable variability in the lagoon’s layers casts

further doubt on the conclusiveness of PCB testing. Numerous

witnesses testified that the contents of the million gallon lagoon

44a

had substantial variability both within and without the three

identifiable layers of waste. See Freestone Testimony, Tr. at

651 (“[T]he sludge had variability, depending upon where you

sampled.”); Yezzi Testimony, Tr. at 684-85; and MacDonald

Testimony, Tr. at 584. The high variability of wastes suggests

that different findings may have resulted at different sample

locations.

At Fulton, Alcan’s waste was disposed of in Tank One. At

the time of the clean-up and testing, however, all that remained

in Tank One was a sludge like material, which Potentially

Responsible Parties (“PRPs”) eventually removed with shovels.

While no PCBs were found in the sludge-like material

remaining in the bottom of the tank, Alcan’s emulsion was not

present either. Neither Alcan nor the government suggests that

in the face of evidence that Alcan disposed of emulsion and a

stipulation that this emulsion was stored in Tank One, the Court

should conclude that the absence of the emulsion at the time of

testing suggests that the emulsion was. never there.

Accordingly, the Court will not conclude based on the absence

of PCBs in Tank One’s sludge that the tank never contained

PCBs.

Seventeen of forty soil samples taken from the land spread

area at Sealand tested positive for the presence of PCBs,” as did

23 All but one of the samples had a J qualifier. Generally, a J qualifier

indicates that the concentration given is estimated. See Nunes Testimony,

Tr. at 339; Government Ex. 135. Nunes testified that in this case, J

qualifiers were assigned to data when PCBs were detected between the

specified detection limit and the contract required quantitation limit

(“CRQL”). See Nunes Testimony, Tr. at 341. The CRQL is the level at

which one can reasonably be assured that the compound exists at that

detected level. The detection limit, which is lower than the CRQL, is a level

where it is possible to reliably identify that a substance is present but cannot

reliably identify the concentration at which the substance is present. See

Nunes Testimony, Tr. at 340. The Court finds J qualified data to be a

reliable indication that a substance had been positively identified. See, e.g.,

Cooper Indust., Inc. v. Agway, Inc., 1996 WL 550128, at *15 (N.D.N.Y.

Sept. 23, 1996).

45a

two samples from the storage tank. See Government Ex. 115.

As discussed above, Alcan’s waste emulsion constituted

seventy-two percent of the material land spread at Sealand.

Contrary to the sampling data at Butler Tunnel and Fulton, this

data tends to suggest that Alcan’s emulsion contained PCBs.

Based on the significant PCB contamination of Alcan’s hot

rolling line that resulted from the historical use of PCB fluid on

the rolling table and the facts that availability and use of PCB

fluid was strictly curtailed by the mid-1970s and PCBs in the

concrete leached into Alcan’s waste emulsion, the Court finds

that the government proved, by a preponderance of the

evidence, that PCBs contaminated the emulsion Alcan sent to

PAS and Fulton. See Meyer Testimony, Tr. at 771.

3. VOCs

The government also contends that, at the time Alcan’s

emulsion was disposed of at PAS and Fulton, it was

contaminated with TCA. Again, there are no samples of

Alcan’s emulsion from this period, so the parties and the Court

looked to circumstantial evidence to determine whether Alcan’s

emulsion contained TCA. The government argued that, based

on Alcan’s admitted use and purchase of TCA, the TCA

contamination in the hot mill area at Alcan’s Oswego plant, the

EPA’s 1989 tests finding TCA in the emulsion, and the

presence of TCA and its biological breakdown products at PAS,

Fulton, Sealand and Butler Tunnel, the Court should find that

TCA was present in the emulsion disposed of at PAS and

Fulton. See, e.g., Meyer Testimony. Alcan responds that

because TCA is highly volatile, it would have been impossible

for TCA to get from the scalping area or plate mill, where they

conceded use, into the emulsion. See Lagoe Testimony, Tr. at

63-64. Alcan further argued that the 1989 testing data is

unreliable because the pages relating to TCA had “do not use”

and the data had hand written changes and/or J qualifiers. See

id. at 66-68.

46a

Alcan used TCA as a cleaner and degreaser in the scalping

area and plate mill at the Oswego Plant. See Lagoe Testimony,

Tr. at 51 -52. Alcan also used TCA to clean the rolls in the gear

box on the plate line. Alcan purchased TCA from Ashland

Chemical Company. The use of TCA led to contamination of

ground water at the plant. Alcan believes that the

contamination resulted from a leaking sump adjacent to a

scalper where TCA was used for cleaning purposes. See Lagoe

Testimony, Tr. at 253. In 1978, Alcan had a TCA limitation on

outfall 001, which the DEC implemented after finding TCA in

the outfall. Outfall 001 included a waste stream from the hot

line. See Government Ex. 2; Lagoe Testimony, Tr. at 197.

Over time, TCA biodegrades. The biological breakdown

products of TCA are 1,l dichloroethane (“DCA”), 1,1

dichloroethylene (“DCE”), vinyl chloride, and chloroethane.

See Government Ex. 128, at p. 363; Meyer Testimony, Tr. at

765-70.

Tests conducted in 1989 identified VOCs, including TCA

and two or three of TCA’s biological breakdown products

DCA, chloroethane, and 1,1 Dichloroethene* in Alcan’s

emulsion. See Government Ex. 36; Meyer Testimony, Tr. at

770. The fourth breakdown product, vinyl chloride, boils at a

low temperature and, thus, would likely evaporate and escape

into the atmosphere. See Meyer Testimony, Tr. at 770.

Sampling at Butler Tunnel,” Fulton,” and PAS indicated the

presence of TCA and its biological breakdown products.

24 The Court notes that Government Exhibit 36, lists 1,1 dichloroethylene

rather than 1,1 dichloroethene as one of TCA’s four biological breakdown

products. If the list of biological breakdown products in this exhibit are

correct then, contrary to Meyer’s testimony, the 1989 tests identified two of

the four breakdown products in Alcan’s emulsion.

25 TCA, DCE, and DCA were detected in the Butler Tunnel mine water near

the area wastes were disposed. TCA was also detected in the air circulating

in the mine shaft. See Towle Testimony, Tr. at 557-58. Tests of the

discharge at Butler Tunnel did not test the actual waste discharge, but

47a

Sampling of the land spread area and storage tank at Sealand,

however, did not find detectable concentrations of TCA. See

Lagoe Testimony, Tr. at 68; Nunes Testimony.

Finally, the EPA’s sampling in 1989 indicated the presence

of TCA in Alcan’s emulsion. Alcan argued that this data is

unreliable because data pages contain hand written changes, J

qualifiers, and/or state “do not use.””” See Government Ex. 36.

Kathleen Donnelly, the EPA employee who prepared the data in

question, explained that the EPA’s standard operating

procedures require all usable data in a report to be consolidated

on one page. Thus, the usable data on sheets that read “do not

read” was consolidated on a separate page. The data used in the

report was “QA/QC’d,” which means that all of the EPA’s

“standard operating procedures for insuring that the samples

were analyzed and reviewed in accordance with the highest

standards to make sure that the data [reported] is accurate.” Jd.

at 288. The J qualifier on data does not indicate that it is

suspect, but that a positively identified substance has an

estimated concentration. J qualified results are reliable and

usable. See Government Ex. 135; see also Cooper, 1996 WL

550128, at *15.

Assuming all of the facts asserted by the government to be

true, such that the 1989 tests reliably identified TCA and its

biological breakdown products in Alcan’s emulsion; TCA and

its breakdown products were detected at all four sites under

subsequent water discharge. Jd. at 556. Government Exhibits 105, 106,

109, and 110 set forth analytical data with respect to VOC testing.

2° Sampling of ground water in a monitoring well near Tank One detected

TCA, vinyl chloride, and 1,1 dichloroethene. See Government Ex. 98. Tests

of the sludge in Tank One also detected 1,1 trichloroethane, DCA, and 1,1

dichloroethene. See Government Ex. 91, Table I.

7 Alcan had “split,” or duplicate, samples of those tested by the EPA. See

Donnelly Testimony, Tr. at 280. Alcan had these samples analyzed by an

outside laboratory, see Lagoe Testimony, Tr. at 191, but did not release the

results of any testing.

48a

review; Alcan used TCA near the hot rolling line during the

relevant period; and Alcan’s groundwater and outflow 001

(which connects to the hot roll line) were contaminated with

TCA during the relevant time periods, the Court cannot

conclude that it is more likely than not that the emulsion sent to

PAS and Fulton was contaminated with TCA. Unlike the

evidence presented regarding PCBs, which proved that concrete

at Alcan’s plant must have been contaminated by PCBs in the

early 1970s and that this contamination leached into the waste

emulsion and, thus, provided both a temporal and physical link

between the PCB contamination and Alcan’s plant and the

waste emulsion sent to PAS and Fulton, the evidence did not

adequately link the TCA contamination, temporally or

physically, with the emulsion sent to PAS and Fulton.

E. Physical Characteristics and Interaction of Alcan’s

Emulsion

The emulsion Alcan sent to PAS and Fulton consisted of

approximately 95% deionized mineral water and 5% Farbest

mineral oil. The addition of an unknown emulsifying agent,

which reduced the surface tension or interfacial tensions

between the molecules of water and oil, created the emulsion.

An “emulsion” is defined as “a suspension of small globules

of one liquid in a second liquid with which the first will not

mix, as milk fats in milk.” WEBSTER’S II NEW RIVERSIDE

DICTIONARY (1994). In other words, in emulsion form, oil

and water exist in a single phase whereas in a simple mixture

oil and water exist in separate phases. See Meyer Testimony,

Tr. at 799. Thus, emulsions have different physical properties

than either water or oil alone or a simple oil and water mixture.

Id. To some degree, both water and oil dissolve hazardous

substances. Some substances are more soluble in water than oil

and some substances, like PCBs and VOCs, are more soluble in

oil than water. An emulsion has the ability to dissolve larger

concentrations of substances than either oil or water alone or a

simple oil and water mixture and, thus, an emulsion increases

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49a

the migratory potential of hazardous substances more than

either water or oil. See Meyer Testimony, Tr. at 784; see also

Government Ex. 129; Freestone Testimony, Tr. at 650 (“The

normal solubility of most organic substances in water can be

measured in the parts per billion and sometimes low parts per

million range. For example, Fran Brezenski’s data for the

Coast Guard lagoon shows various concentrations of

contaminants in the parts per billion range. However, the

intermediate layer in the main lagoon had a chemical

bouillabaisse and such a high concentration of organic

materials, in the 1 1/2 percent category. That’s 10,000 to

15,000 parts per million. The only way you’re going to get that

much organic material to stay in water is with some sort of

mechanical or chemical emulsion process.”).

Unlike oil, an emulsion does not float on top of water.

Instead, when added to water, the emulsion will suspend and

form a layer below the surface. However, an emulsion will not

remain in its emulsion phase forever; instead, it eventually

breaks down into its individual components. See Meyer

Testimony, Tr. at 799; Driscoll. Exposure to the environment,

heat, and acid increase the rate at which an emulsion breaks

down. See Meyer Testimony, Tr. at 799; Driscoll. Therefore, it

is unlikely that all of Alcan’s emulsion remained in the

emulsion phase after disposal. Accordingly, the Court finds

that it is more likely than not that Alcan’s waste consisted of

oil, water, and the water and oil emulsion.

III. Conclusions of Law

A. Legal Standard

In the first stage of this action, the liability phase, the

government had the burden of proving, by a preponderance of

the evidence, that Alcan was liable under CERCLA. See infra

note 2. The Court previously found that the government could

introduce evidence at trial to prove that Alcan’s emulsion

50a

contained PCBs, VOCs, and nickel.” Pursuant to the standard

outlined by the Second Circuit, if the government proved bya

preponderance of the evidence that Alcan’s emulsion contained

PCBs, VOCs, or above background levels of metals, Alcan

could no longer escape liability altogether. See Alcan, 990 F.2d

at 722 (“(C]ausation * * * is reintroduced only to permit a

defendant to escape payment where its pollutants did not

contribute more than background contamination and also

cannot concentrate.”). As discussed above, after careful

consideration of the evidence presented at trial the Court found

that the government proved that Alcan’s emulsion contained

PCBs, which are not naturally occurring substances that have

“background levels.” Therefore, Alcan does not fit within the

special category of defendants who can escape all liability under

CERCLA.

Additionally, Alcan is not able to escape all liability because

the Court found that Alcan’s emulsion contained nickel, which

was detected at above background levels at both PAS and

Fulton. This finding, combined with the expert testimony of

Dr. Meyer and Dr. Driscoll, suggests that the metals in Alcan’s

emulsion can and, in this case, did concentrate. See Meyer

Testimony; Driscoll letter. Alcan did not negate this finding or

present evidence sufficient to prove that the nickel in its

emulsion can not coricentrate.

Although Alcan cannot escape liability altogether, it can limit

its liability by showing that the harm at PAS and Fulton was

divisible — that is, it contributed, at most, to a divisible portion

of the harm and that there is a reasonable basis to apportion

liability for this harm. See Alcan, 990 F.2d at 722. To make

this showing, Alcan “may present evidence relevant to

establishing divisibility of harm, such as, proof disclosing the

relative toxicity, migratory potential, degree of migration, and

synergistic capacities of the hazardous substances at the site.”

28 Alcan continues to object to this decision.

Sla

Id. To satisfy its burden of proof, Alcan must look at the

potential effects of its emulsion as a whole rather than the

individual components of the emulsion. Jd.; see also Alcan,

1997 WL 727506, at *4 n. 5; United States v. Alcan Aluminum

Corp., 892 F. Supp. 648 (1995), aff'd, United States v. Alcan

Aluminum Corp., 96 F.3d 1434 (1996), cert. denied, 521 U.S.

1103 (1997). Thus, as previously recognized by this Court,

Alcan “cannot succeed by arguing * * * that it avoids liability

simply because its metals [individually] are below background

levels.” Alcan, 1997 WL 727506, at *4 n. 5 (internal citations

omitted).

Alcan attacked this divisibility standard claiming that it is

inconsistent with scientific principles, procedural and

substantive due process, and Fed. R. Evid. 702. Alcan argued

that it can establish divisibility by comparing the relative

toxicity of its emulsion’s individual components with the

relative toxicity of other hazardous substances disposed of at

PAS and Fulton. See Joint Pretrial Stipulation at 30. This

argument is based on the theory that one cannot scientifically

evaluate the emulsion as a whole, but rather one must “look at

the chemical impact of each of the individually chemically

distinct parts.” Tr. of Sept. 10, 1999 proceedings at p. 12. On

September 13, 1999, the Court denied Alcan’s pre-trial motion

to strike the legal standard set forth by the Second Circuit and

replace it with Alcan’s proposed standard; the Court will not

rehash the issue here. See id. It is sufficient to note, as the

Third Circuit did when faced with the same argunient, that:

the government responds to ‘releases’ that threaten

environmental safety. Thus, itis the release alone that

must justify the response costs, not the particular waste

generated by one given defendant. Here, there is no

question but that a release occurred. Second, the fact

that a single generator’s waste would not in itself justify

a response is irrelevant in the multi-generator context,

as this would permit a generator to escape liability

52a

where the amount of harm it engendered to the

environment was minimal, though it was significant

when added to other generator’s waste.

Alcan-Butler, 964 F.2d at 264. Accordingly, in determining

whether Alcan proved divisibility, the Court will apply the

standard set forth by the Second and Third Circuits, which

requires Alcan to analyze its emulsion as a whole rather than

focusing on the individual constituents of the emulsion.

B. Divisibility

The burden on Alcan to show divisibility is substantial. See

Alcan-Butler, 964 F.2d at 269. Courts are well aware that

“ft}he practical effect of placing the burden on defendants [to

prove divisibility] has been that responsible parties rarely

escape joint and several liability. [C]ourts regularly [find] that

where wastes of varying (and unknown) degrees of toxicity and

migratory potential commingle, it simply is impossible to

determine the amount of environmental harm caused by each

party.” See O'Neil v. Ficillo, 883 F.2d 176, 178-79 (1st Cir.),

cert. denied, 493 U.S. 1071 (1998) (citing United States v.

Chem-Dyne, 572 F. Supp. at 811; Monsanto, 858 F.2d at 172-

73). Courts recognize that the imposition of joint and several

liability frequently results in one defendant paying more than its

fair share of clean-up costs. Jd. In the case at bar, the task of

proving divisibility is complicated by the fact that neither the

parties nor the Court know exactly what was disposed of at

either PAS or Fulton or what was in Alcan’s emulsion.

Although Alcan tangentially addressed “synergy” and

“mixing” at trial,” see, e.g., Lagoe Testimony, Tr. at 120-24, it

2° Lagoe testified that the mixing of wastes would not create any new

problematic chemicals and that there was no evidence of synergism at the

site that caused a problem. See Lagoe Testimony, Tr. at 122-24. In his

testimony, Lagoe used Webster’s Seventh New Collegiate Dictionary’s

definition of synergism: “the cooperative action of discrete agencies, such

that the total effect is greater than the sum of the effects taken

independently.” Jd. at 123. Lagoe’s examples indicate that he considered

53a

did not provide evidence to negate the fact that its emulsion had

a mobilizing effect on other hazardous wastes. As previously

discussed, the Court found that Alcan’s emulsion increased the

migratory potential of hazardous substances at PAS and Fulton.

In so finding, the Court rejected Alcan’s analogy that the

emulsion was synonymous to rain or milk added to cornflakes.

Alcan’s analogy suggests that, like rain, Alcan’s emulsion

contributed only volume to the waste at the sites. Alcan did

not, however, prove that its emulsion was identical to rain in

that it contributed only volume. Nor did Alcan prove that its

emulsion was benign. In fact, the evidence suggested that

Alcan’s emulsion was a more aggressive solvent than either

water (rain) or oil (milk) because, in an emulsion phase, oil and

water have a greater capacity to absorb contaminants than either

water or oil alone. Alican’s emulsion, therefore, absorbed the

contaminants at the sites and facilitated their transport

throughout. In so doing, Alcan’s emulsion contributed to the

breadth of contamination at both PAS and Fulton. In other

words, even if the hazardous substances in Alcan’s emulsion

themselves did not contribute to the response costs at the sites

(which the PCBs and nickel did), the emulsion as a whole —

contributed to both the release and response costs. Rain, unlike

Alcan’s emulsion, would not have absorbed the quantity of

organic substances, including VOCs and PCBs, which Alcan’s

emulsion could have.

The extreme conditions at PAS further complicate Alcan’s

burden of proving divisibility. At least a portion of Alcan’s

emulsion was dumped into the million gallon lagoon at PAS,

chemical rather than physical synergism. Lagoe considered whether Alcan’s

waste, when mixed with other wastes, would combine to form hazardous

substances rather than considering whether the addition of Alcan’s waste

increased the migration of the waste resulting in an increase in total

contamination. In fact, Lagoe testified that he did not view the fact that

water dissolved water soluble chemicals as an example of synergy. See id. at

123-24.

54a

which witnesses described as, among other things, a chemical

bouillabaisse. See Freestone Testimony. Waste from the

million gallon lagoon leaked through a compromised liner on

the bottom, pushed through the sides, and overflowed over the

top of the lagoon. The leaking waste flowed throughout the site

intermingling with, among other things, waste from leaking

drums in the drum storage area. At the time the government

commenced a clean-up, the ground was so saturated by liquid

waste that, according to one witness, it was like walking on a

wet sponge.

As the Second Circuit recognized, however, the fact that

Alcan’s waste commingled with other wastes at PAS and

Fulton does not mean that the harm at the sites is indivisible.

See Alcan, 990 F.2d at 722. The Second Circuit adopted the

Restatement (Second) of Torts’ definition of divisibility, which

states that harm is divisible where “joint tortfeasors act

independently and cause a distinct harm, for which there is a

reasonable basis of division according to the contribution of

each.” Prosser and Keeton explain that where two or more

_ causes combine to produce a single indivisible result, liability

cannot be apportioned. See Prosser & Keeton on Torts, § 52, p.

347 (Sth Ed. 1984). Further, the conduct of multiple tortfeasors

need not be simultaneous to cause an indivisible harm, “[oJne

defendant may create a situation upon which the other may act

. later to cause damage.” Jd., at 348. For example, “[i]f two

defendants, struggling for a single gun, succeed in shooting the

plaintiff; there is no reasonable basis for dividing the liability.”

Id., at 345. Moreover, if two defendants shoot the plaintiff

“independently, with separate guns, and the plaintiff dies from

the effect of both wounds, there can still be no division.” Jd.

Thus, where two independent causes combine to cause an

aggregate harm which exceeds the sum of the individual harms

such that the harm attributable to each PRP becomes

indistinguishable, the harm is not divisible. Such is the case at

PAS where Alcan’s emulsion provided a mode of transport for

55a

other wastes that may not have been carried by rain or surface

run off such that the emulsion contributed significantly to

PAS’s overall contamination. Thus, although the emulsion

alone may have caused a specific harm and the waste deposited

by other PRPs may have caused specific harms, the extent of

the release at PAS is due to the combination of Alcan’s waste

with other wastes at the site. Accordingly, Alcan failed to

prove that the harm at PAS is divisible.

Similarly, Alcan failed to prove that the harm at Fulton was

divisible. At Fulton, the soil contamination was caused in large

part by leaking storage tanks. Alcan’s emulsion contributed to

this leaking and the resulting contamination. Again, Alcan

presented evidence that it should not be liable for any costs

because its waste emulsion, in isolation, is nontoxic. The

Court’s findings negate this argument. Alcan did not provide

any other evidence which proved that the harm at Fulton was

divisible. Moreover, as discussed below, Alcan did not provide

a reasonable basis for apportionment of either the response or

investigative costs at Fulton and PAS. )

C. Reasonable Apportionment

Assuming, arguendo, that the costs at PAS and Fulton were

divisible, the Court will address Alcan’s apportionment

arguments. The Second Circuit instructed that Alcan could

limit liability even if it contributed to the clean-up costs by

providing a reasonable basis for apportioning liability. See

Alcan, 990 F.2d at 722. Alcan attempted to provide such a

basis by arguing that certain remediation techniques employed

by the government did not address its emulsion.” The Court’s

™ The Court recognizes that Alcan also presented evidence suggesting that

the relative toxicity of its waste, when compared to other wastes at PAS, was

negligible. Alcan thus argued that it did not contribute to the toxicity of the

site and should not be held liable for clean-up costs. As discussed above,

however, the Court is looking to Alcan’s emulsion as a whole and

considering both the chemical and physical interaction of the emulsion with

other wastes at the site. Accordingly, even taking Alcan’s proposition that

56a

findings that the emulsion contained PCBs and nickel and

facilitated the transport of hazardous substances limit the

potential “reasonable basis” of apportionment of harm.

1. Remediation Techniques

Alcan offered testimony that specific remediation techniques

employed at PAS and Fulton did not address its waste.

Specifically, Alcan argued that it should not be held liable for

certain costs at PAS including the construction of a slurry wall,

collection of oil with absorbent beams, and treatment of liquid

waste with a carbon filtration system because these response

ections did not, or could not, effectively address its waste.

Further, on the same basis, Alcan argued that it was not

responsible for the cost of low temperature thermal desorption

soil treatment at Fulton.

Section 113(j)(2) of CERCLA states that courts “shall uphold

[the EPA’s] decision in selecting the response action unless the

objecting party can demonstrate, on the administrative record,

that the decision was arbitrary and capricious or otherwise not

in accordance with law.” 42 U.S.C. § 9613(j)(2). Section

107(a) further provides: “Notwithstanding any other provision

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

subsection (b) of this section,” a potentially responsible party

“shall be liable for * * * all costs of removal or remedial action

incurred by the United States government * * * not inconsistent

with the National Contingency Plan [“NCP”].” 42 U.S.C.

§ 9607(a). “Agency action will be set aside only if: ‘the agency

has relied on factors which Congress has not intended it to

consider, entirely failed to consider an important aspect of the

problem, offered an explanation for its decision that runs

counter to the evidence before the agency, or is so implausible

that it could not be ascribed to a difference in view or the

its waste contained only oil, water, and background metals as true, the Court

cannot conclude that the emulsion did not contribute to the release and clean-

up costs at PAS.

57a

product of agency expertise.’” United States v. Burlington N.

R.R. Co., 200 F.3d 679, 689 (10th Cir. 1999) (quoting Motor

Vehicle Mfrs. Ass'n of U.S. v. State Farm Mut. Ins. Co., 463

U.S. 29, 43 (1983)). Together, courts have read these

provisions to mean that PRPs, like Alcan, challenging response

actions must show “that the costs incurred were inconsistent

with the NCP, an issue that is judicially reviewed under the

arbitrary and capricious standard of review for agency action.”

State of Minnesota v. Kalman W. Abrams Metals, Inc., 155 F.3d

1019, 1023 (8th Cir. 1998); see also Burlington, 200 F.3d at

692 (citing United States v. Hardage, 982 F.2d at 1442); United

States v. Chromalloy Am. Corp., 158 F.3d 345, 352 (Sth Cir.

1998), reh’g denied, 174 F.3d 200 (Sth Cir. 1999) (“As long as

the government’s choice of response is consistent with the

NCP, costs are presumed to be recoverable.”) (citing United

States v. Northeastern Pharm. & Chem. Co., 810 F.2d 726, 748

(8th Cir. 1986), cert. denied, 484 U.S. 848 (1987)).

Alcan did not argue that the government’s response actions

were arbitrary and capricious or inconsistent with the NCP.

Rather, Alcan argued that certain remediation techniques did

not address its waste emulsion. In a multi-generator CERCLA

case, allowing a defendant to divide liability on this basis strays

dangerously close to requiring the government to prove that a

specific defendant caused a specific clean-up cost, a

requirement the Second and Third Circuits have previously

rejected. Alcan, 990 F.2d 711 at 720; Alcan-Butler, 964 F.2d at

264 (“[I]t is the release alone that must justify the response

costs, not the particular waste generated by one defendant.”).

Moreover, allowing a defendant to avoid response costs at the

apportionment phase simply by proving by a preponderance of

the evidence that a certain remediation technique did not

address the problems caused by its waste rather than reviewing

the government’s choice to employ certain techniques under an

arbitrary and capricious standard, as required by the plain

language of CERCLA, see 42 U.S.C. § 9607(a), 42 U.S.C.

58a

§ 9613(j)(2), may open the “backdoor” to causation further than

the Second Circuit intended. Nevertheless, the facts of this case

show that the remediation techniques under attack did address

environmental problems contributed to by Alcan’s emulsion.

Accordingly, it is unnecessary for this Court to determine how

far the Second Circuit intended causation be reintroduced to

this analysis.

(a) Slurry Wall

Alcan first argued that the presence of its emulsion at the site

did not influence the size of the slurry wall. See Lagoe

Testimony, Tr. at 106-08. To build a slurry wall, a trench is

dug until a naturally impermeable layer is reached. The trench

is then filled with clay to make an impermeable wall. The

slurry wall creates an impermeable barrier on the perimeter ofa

contaminated site, diverts groundwater away from the site, and

isolates groundwater contaminants on-site. See Government

Ex. 70. Alcan argued that because PAS’s geography defined

the depth of the slurry wall and PAS’s operations determined

the slurry wall’s other dimensions, the slurry wall would have

been constructed in the same way even if Alcan had not sent

waste to the site. |

In a multi-generator context, a PRP cannot avoid liability by

showing that the government would have taken action absent a

single generator’s waste. As noted by the Third Circuit in

Alcan-Butler:

[T]he fact that a single generator’s waste would not in

itself justify a response cost is irrelevant in the multi-

generator context, as this would permit a generator to

escape liability where the amount of harm it engendered

to the environment was minimal, though it was

significant when added to other generator’s waste.

964 F.2d at 264. Therefore, to avoid liability Alcan must show

that its emulsion, when mixed with other hazardous wastes, did

not contribute to the response costs — in this case, the need for

59a

the slurry wall. It is insufficient to show that the slurry wall

would have been necessary but for Alcan’s waste. See Alcan,

990 F.2d at 722.

Given the prior findings of this Court that Alcan’s emulsion

contained PCBs, contributed to above background levels of

nickel in PAS’s groundwater, had the capacity to absorb and

transport hazardous substances and, thus, contributed to the

migration of hazardous materials at PAS, the Court concludes

that the government erected the slurry wall, in part, to address

problems contributed to by the emulsion. Accordingly, Alcan is

jointly and severally liable for the cost of the slurry wall.

(b) Absorbent Beam

Alcan next argued that because it disposed of oil emulsion,

which does not float on top of the water, the use of an oil

absorbent beam did not address its waste. As discussed,

however, it is highly unlikely that all of Alcan’s emulsion

remained in the emulsion phase after disposal. It is more likely

than not that when exposed to the environment some of the

emulsion broke down into water and oil. Alcan did not prove

that the emulsion did not contribute to the intense saturation of

PAS with oily waste. Thus, the oil absorbent beam remediated

a portion of Alcan’s waste. It is unreasonable to apportion the

cost of the beam by comparing how much of Alcan’s oil the

beam absorbed compared to how much oil from other sources it

collected. Neither the Court nor the parties know how much of

Alcan’s emulsion was incinerated, how much remained in the

emulsion phase, and how much separated into oil and water.

Moreover, as discussed above, the Court cannot interpret

CERCLA to allow divisibility of harm based on a theory that

although a certain remediation technique addressed a PRPs

waste, the technique would have been required absent that

waste. Accordingly, Alcan is jointly and severally liable for the

cost of the absorbent beam.

60a

(c) Carbon Filtration System

Alcan next argued that the use of a carbon filtration system at

PAS would not effectively remediate its waste because the oil

in the emulsion would coat the carbon granules and prevent

absorption.

The evidence demonstrated that the government successfully

treated waste, including Alcan’s, with a carbon filtration

system. The evidence further suggested that the high organic

content of the aqueous layer of the lagoon was attributable, in

part, to the presence of Alcan’s emulsion, which absorbed more

organics than water alone could. Moreover, the carbon

filtration system was employed as part of a court ordered

remedy.

The fact that carbon filtration may not have been the most

effective way to treat the emulsion, due to its oil content, does

not mean that Alcan is not liable for the cost of treatment. As

discussed above, Alcan can only escape liability for the cost of

a specific remediation technique that addressed its waste by

demonstrating that the technique is inconsistent with the NCP, a

decision which is reviewed under the arbitrary and capricious

standard. See, e.g., Kalman W. Abrams Metals, 155 F.3d at

1023. Alcan’s arguments regarding the effectiveness of the

method did not indicate the government's actions were

inconsistent with the NCP or that the choice of remediation

technique was arbitrary and capricious. Because Alcan has not

sustained its burden of proof and demonstrated that the cost of

carbon filtration was reasonably apportionable, it is jointly and

severally liable for the costs associated with the water

treatment.

(d) Low Temperature Thermal Desorption

Alcan further argued that because low temperature thermal

desorption is not an effective remedy for metals, this remedy

did not address its emulsion at Fulton. See Lagoe Testimony,

Tr. at p. 113. Low temperature thermal desorption involves

6la

digging up soil and heating it to volatilize organic materials.

Leaking storage tanks primarily caused the soil and water

contamination at Fulton. The parties stipulated that Alcan’s

emulsion was stored in Fulton’s Tank One. The groundwater

samples near Tank One showed the highest contamination

levels, which suggests that material, including Alcan’s

emulsion, leaked from Tank One and contributed to the

surrounding contamination. Although Alcan’s emulsion itself

may not have contributed VOCs to the soil around Tank One

(groundwater analysis indicated the presence of, among other

things, vinyl chloride, TCA, and 1,1, dichloroethene), Alcan did

not prove that its emulsion did not mobilize hazardous wastes

disposed of in Tank One and, thus, contribute to the soil

contamination. Therefore, Alcan is jointly and severally liable

for the cost of low temperature thermal desorption.

D. Investigative Costs

The government argued that even if Alcan proved that the

harm at Fulton and PAS were divisible, the costs incurred in

investigating the environmental situation at PAS and Fulton are

indivisible and, thus, incapable of reasonable apportionment.

Section 104(b)(1) of CERCLA requires the EPA to conduct

studies and investigations as:

necessary and appropriate to identify the existence and

extent of the release or threat thereof, the source and

nature of the hazardous substances, pollutants or

contaminants involved, and the extent of danger to the

public health or welfare or to the environment.

42 U.S.C. § 9604(b)(1). The NCP requires the EPA to

characterize the nature and content of contamination at a

specific site to determine the nature of, and threat posed, by any

hazardous materials. See 40 C.F.R. § 300.430(d)(2). In cases

where the EPA’s information regarding the waste disposed of at

a specific site is limited, the government argued that the EPA is

obligated to sample for all the contaminants listed on the EPA’s

62a z

Target Compound List (“TCL”). The government concluded

that:

(In cases where sites are contaminated with

commingled waste, it is logically infeasible to use a

sampling plan whereby sampling is divided into

operable geographic units or into studies of a PRP’s

potential contributions to the contamination. Instead, [a

Remedial Investigation Feasibility Study (“RIFS”)]

investigates the presence of contaminants on the [TCL]

by a random sampling plan. By its very nature, a

random sampling plan does not lend itself to

apportionment between individual defendants.

Governments Trial Brief at 21 n. 11. The testimony of

Nicoletta Diforte, who acted as a remedial project manager at

Fulton and PAS, supports this conclusion. See DiForte

Testimony (stating that work done in the RIFS stage is general,

focusing on the specific features of the site rather than a specific

generator’s waste).

Alcan does not dispute this argument, but, rather, it argued

that it “will demonstrate that this position is inconsistent with

the law” as stated in Licciardi v. Murphy Oil, 111 F.3d 396 (Sth

Cir. 1997). Licciardi, however, does not refute the

government’s argument that the EPA’s RIFS costs are not

divisible. In Licciardi, a private homeowner brought a

CERCLA cost recovery action against a neighboring oil refinery

seeking to recover expenses for sampling and testing. The Fifth

Circuit found that the Plaintiff's testing did not establish that

any regulatory standards had been breached and held that in the

absence of any such breaches or any other evidence, “a finding

of hazardous substances ‘above background levels’” is

insufficient grounds on which to base CERCLA liability.*' Id.

3! in a number of cases including this one, the Second Circuit has ruled that

CERCLA liability can be premised on a finding of hazardous substances

even when the substances are found below background levels, further

reaffirming the principle that “quantity or concentration is not a factor” in

63a

at 399. The Fifth Circuit’s holding was based on the finding

that the fourth element of a CERCLA cost recovery action, that

“the release or threatened release of hazardous material must

have caused plaintiff to incur response costs,” had not been

proven. Jd. at 398-99. The decision did not address divisibility

of harm or apportionment of costs. Here, however, the Court

has previously determined Alcan is liable under CERCLA and,

thus, has determined that, pursuant to CERCLA section 107(a),

Alcan is jointly and severally liable for “all costs of removal or

remedial action” at PAS and Fulton absent proof of divisibility

and a reasonable basis of apportionment. See Alcan, 990 F.2d

at 722; Alcan, 1996 WL 637559; Alcan, 755 F. Supp. 531.

Accordingly, this case is outside of Licciardi’s ambit.

It is well-settled that investigation and sampling costs are

recoverable under CERCLA section 107(a), see, @.g., B.F.

Goodrich, 99 F.3d at 528; Lansford-Coaldale Joint Water Auth.

v. Tonolli Corp., 4 F.3d 1209, 1218 (3d Cir. 1993) (“It is well-

established that under this provision a plaintiff can recover its

monitoring and evaluation costs from a release or threatened

release without proving that its property was actually

contaminated by the defendant.”), and, thus, the question before

the Court is limited to whether RIFS costs are ever divisible.

The Court does not have to answer this question, however,

because Alcan failed to satisfy its burden of proof. Alcan did

not present any evidence regarding divisibility of the RIFS costs

or any “reasonable basis” on which the Court could apportion

such costs. Therefore, Alcan is jointly and severally liable for

the RIFS costs at Fulton and PAS.

E. Remaining Arguments

Alcan did not present any other evidence proving a

reasonable basis of apportionment of costs at either PAS and

interpreting CERCLA’s definition of hazardous substances. Alcan, 990 F.2d

at 720 (citing CERCLA § 9601(14); Murtha, 958 F.2d at 1200; accord

Alcan-Butler, 964 F.2d at 259-61.)

64a

Fulton. The arguments not discussed by the Court addressed

the individual constituents of Alcan’s emulsion and/or Alcan’s

emulsion in isolation rather than the effect of the emulsion as a

whole when mixed with other hazardous wastes at the site. As

discussed above, these arguments are inconsistent with both the

legal standard set forth by the Second Circuit and the policies

behind CERCLA. As demonstrated by the evidence before the

court a singularly non-toxic substance can physically interact

with other substances and contribute to release and response

costs. Arguments that ignore this combined effect, therefore,

do not provide a reasonable basis for apportionment.

Moreover, given the finding that the emulsion contained PCBs

and nickel, Alcan’s argument that its emulsion alone was

harmless cannot succeed.

Accordingly, the Court finds that Alcan failed to prove that

the harm at Fulton and PAS was divisible, that it was liable for

only a divisible portion of the harm, or that there was a

reasonable basis for apportionment of harm and, thus, Alcan is

jointly and severally liable for all costs recoverable under

CERCLA. ;

IV. Conclusion

The Court finds that the government satisfied its burden of

proving that Alcan’s emulsion contained PCBs and nickel. The

Court further finds that Alcan did not satisfy its burden of proof

on divisibility or provide this Court with a reasonable basis of

apportionment of costs. Accordingly, Alcan is jointly and

severally liable for response costs at Fulton and PAS. The

- government is ORDERED to submit an accounting of costs

and settlements incurred at each:site to date within 14 days of

the date of this order such that the Court can quantify the

damages award.

IT IS SO ORDERED.