Reply Brief — Alcan Aluminum Corp. v. United States

Supreme Court brief2004

Ask Donna

What actually matters in this document.

Text

No. 03-433

| Supreme Court, U.S.

FILED

DEC 2 3 2003

OFFICE O

In the Supreme Court of the United States

ALCAN ALUMINUM CORPORATION, PETITIONER

UNITED STATES OF AMERICA;

STATE OF NEW YORK

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

REPLY TO BRIEF IN OPPOSITION

KENNETH W. STARR

ROBERT R. GASAWAY

KANNON K. SHANMUGAM

JOSEPH A. EISERT

KIRKLAND & ELLIS LLP

655 Fifteenth Street, N.W.

Washington, DC 20005

(202) 879-5000

ROBERT H. BORK

6250 Ridge Street

McLean, VA 22101

(703) 288-1174

LAWRENCE A. SALIBRA, II

Counsel of Record

JOHN C. TILLMAN

MARK D. KINDT

ALCAN CORPORATION

6060 Parkland Boulevard

Mayfield Heights, OH 44124

(440) 423-6918

WILLIAM S. SESSIONS

HOLLAND & KNIGHT LLP

2099 Pennsylvania Avenue,

N.W.

Washington, DC 20006

(202) 955-3000

_——$—$———— TE a

WILSON-EPES PRINTING CO., INC. — (202) 789-0096 -— WASHINGTON, D. C. 20001

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES. .............00csscssssssossesersasesseesvoene lil

TTI EIN cvesvnsesvevcesisscsvernsrersionssevenvsnecssonsscouvssevevasasees 1

REASON FOR GRANTING THE WRIT............::ecceeeeeeeseees 2

THE SECOND CIRCUIT ERRED ON TWO

CERCLA QUESTIONS OF EXCEPTIONAL

RPT Aa wv sscsncescsnsecnserverscenesrsnsnnissverninviscesonmnseernivens 2

A. The Second Circuit Erred By Imposing CERCLA

Liability For Disposing Of Waste Even If It

Contains Only Below-Background Levels Of A

Diammmnte POTUII....6.0000:00s0sesssevvcnncevsvensvessrssensesvessees 3

B. The Second Circuit Erred By Imposing Joint and

Several CERCLA Liability Merely For Disposing

Of Harmless Waste, On The Ground That It Could

“Spread” Hazardous Substances In Waste

Disposed Of By Othes...............cecsscsssessessesseseeseseres 8

COIN sserciseinivtassivcivenssensesyscntiviatiebiovensamiisnsttensvennvens 10

ill

TABLE OF AUTHORITIES

Page

CASES

Amoco Oil Co. v. Borden, Inc.,

we TT ee) en 5,6

B.F. Goodrich Co. v. Murtha,

Ee Ne CA, CPF G is eininsassscerscssscrascevesscsesnssensones 5

Babbitt v. Sweet Home Chapter,

515 U.S. 687 (1995)........ Ree pe etnies 2

Commander Oil Corp. v. Barlo Equip. Corp.,

a te Gl, BIE oe ses ycenvensesonnsrsacisnenvnvesenssenseve 2

Control Data Corp. v. S.C.S.C. Corp.,

| eee 10

Eagle-Picher Industries, Inc. v. EPA,

FE CEs Gy BID viccivevsessssveesnsovnnsnsesecsussunsone 5

Licciardi v. Murphy Oil U.S.A., Inc.,

ee Pe GOT, BIT Pevsesencosvvenusvvervesnrvencnsevenenevtenvee 6

Massachusetts v. Blackstone Valley Electric Co.,

67 F.3d 981 (1st Cir. 1995)......... ‘ialdsvicipnnsvneaie 5

Solid Waste Agency of N. Cook Cty. v. Army Corps of

Eng’ rs,

ee a ncsassasevssinaepsininvindagionintgsvansehisuensinenes 2

United States v. Alcan Aluminum Corp.,

ee Gy CI ivivessecisnsnassovesncerseneronunsenennns 5,8

United States v. Bestfoods,

a I cncsanntsasnrussanvarrendvieseisaressennsyncsssenonsivenes 1

Whitman v. American Trucking Assn’s, Inc.,

A I Bo nncssusniiesekexaneseoneninsbsarentionneononensusseusis 2

STATUTES

Be ee ie Be excensnsssnncacssnnnsintsaasvsnosonavanbsvvessevesssenvenenees 4

OTHER AUTHORITIES

Ted Cilwick,

Big Polluters Find Way to Clean Up the Balance Sheet:

Soak the Little Guy,

at Tale Teh, NOW. B, UGGS. ancsessccnsesevissesvccsssavessocsecasens 10

Cathleen Clark,

Should The Butcher, The Baker And The Candlestick

Maker Be Held Responsible For Hazardous Waste?,

SOE CEL... FRE Ber 0 thirst awe 10

Office of Solid Waste and Emergency Response, EPA,

Role of Background in the CERCLA Cleanup Program,

OSWER 9285.6-07P (Apr. 26, 2002) ..........eseeceseesesseeeees 4

Sue Reisinger,

Feds Pay in Superfund Lawsuits,

ee Fae Fn SP 0, Ee etic eiciihaineen l

ne ne a. in i See

INTRODUCTION

The federal government’s brief in opposition does not

seriousiv defend the two legal holdings underpinning the

Second Circuit’s decision: its holding that a company may be

subject to CERCLA liability for disposing of a substance

containing only below-background amounts of manmade

pollutants, and its holding that a company may be subject to

joint and several CERCLA liability on the ground that even

harmless substances, once disposed of, can “spread” the

hazardous substances disposed of by others.

Instead, the government repeatedly attempts to portray the

decision below as doing no more than affirming factual

findings. As the widespread amicus interest in this case amply

demonstrates, however, nothing could be further from the truth.

It is the troubling legal standards employed by the Second

Circuit, not any Alcan-specific findings, that threaten to expose

companies to crushing liability simply for being so bold as to

dispose of harmless substances. Furthermore, even assuming

that there are outstanding factual disputes even after the correct

legal standards have been determined, as the government

contends, those disputes may be resolved on remand, and do

nothing to preclude the Court’s review at this juncture.

This Court’s intervention is urgently needed. The Court has

heard only one CERCLA case in the last ten Terms — and that

involving an issue of relatively narrow significance. See United

States v. Bestfoods, 524 U.S. 51 (1998). No one seriously

contests that the government is increasingly taking a “very

aggressive posture” in CERCLA proceedings. Sue Reisinger,

Feds Pay in Superfund Lawsuits, Nat’| Law J., Dec. 1, 2003, at

8, 10 (internal quotation omitted). Nor does anyone seriously

doubt that a big part of the reason that this Court and the courts

of appeals have thus far been unable to develop workable

CERCLA standards is that the “inordinate liability and

litigation costs associated with defending CERCLA cases,” Br.

of Washington Legal Foundation et al. 20, force many a

defendant to settle even before litigation begins. The lower

courts, including the Second Circuit itself, are crying out for

guidance on what all agree are the many “ambiguit[ies] within

CERCLA’s miasmatic provisions.” Commander Oil Corp. v.

Barlo Equip. Corp., 215 F.3d 321, 326 (2d Cir. 2000) (Walker,

J.). Because this case presents a rare opportunity for the Court

to provide such guidance, certiorari should be granted.

REASON FOR GRANTING THE WRIT

THE SECOND CIRCUIT ERRED ON TWO CERCLA

QUESTIONS OF EXCEPTIONAL IMPORTANCE.

This case raises heretofore-unresolved CERCLA issues of

exceptional importance. When viewed against the backdrop of

similarly important provisions in other environmental statutes,

it is remarkable that, in the almost 25 years after CERCLA’s

enactment, neither this Court nor the government itself has ever

given an authoritative interpretation to CERCLA’s bedrock

provisions (i) defining what constitutes a “hazardous substance”

or (ii) specifying when, if at all, generators may be subject to

joint and several liability on the ground that harmless wastes

they have disposed of might “spread” the hazardous wastes

disposed of by others. Cf., e.g., Whitman v. American Trucking

Assn’s, Inc., 531 U.S. 457 (2001) (interpreting foundational

“national ambient air quality standards” provisions of the Clean

Air Act); Solid Waste Agency of N. Cook Cty. v. Army Corps of

Engrs, 531 U.S. 159 (2001) (interpreting foundational

“navigable waters” provision of Clean Water Act); Babbitt v.

Sweet Home Chapter, 515 U.S. 687 (1995) (interpreting

foundational “take” provisions of the Endangered Species Act).

Nor, given the government’s “very aggressive posture” in

CERCLA proceedings and the “inordinate liability and

litigation costs” associated with defending CERCLA cases, is

this Court likely to have such an opportunity again in the near

future. Certiorari is accordingly warranted.

A. The Second Circuit Erred By Imposing CERCLA

Liability For Disposing Of Waste Even If it

Contains Only Below-Background Levels Of A

Manmade Pollutant.

1. The government’s brief never comes to grips with

Alcan’s fundamental argument in favor of certiorari: namely,

that there is an urgent need for a workable definition of what

constitutes a “hazardous substance” for purposes of imposing

CERCLA liability. As noted in the petition, the government

can, and does, effectively give this key statutory term an absurd

meaning. See Pet. 6-11. Remarkably, the government does not

deny that, because virtually a// material contains below-

background amounts of manmade hazardous substances, its

reading of the statute would afford the government unfettered

discretion to decide whom to prosecute for CERCLA liability.

2. The government makes only halfhearted efforts to

defend the Second Circuit’s holding that generators are exempt

from CERCLA liability in cases in which their waste contains

below-background levels of naturally occurring hazardous

substances, but not in cases in which their waste contains

below-background levels of manmade substances. See Opp.

14-15. Specifically, the government does not challenge — at

least not expressly — the Second Circuit’s earlier holding in

this case that an exemption is appropriate in cases involving

trace levels of naturally occurring hazardous substances. See

990 F.2d 711, 722 (2d Cir. 1993). But it nevertheless defends

the Second Circuit’s refusal in its opinion below to extend this

exemption to manmade hazardous substances — by merely

quoting the Second Circuit’s ipse dixit assertion that its original

exemption was limited to naturally occurring substances. Opp.

15 (quoting Pet. App. 10a).

The government does effectively concede that “manmade

chemicals * * * are also present, in small amounts, throughout

the environment.” /d. This effective concession is

unsurprising, for it reflects acknowledgments already made by

the EPA in its internal policy documents on CERCLA

remediation, see Office of Solid Waste and Emergency

Response, EPA, Role of Background in the CERCLA Cleanup

Program, OSWER 9285.6-07P, at 7 (Apr. 26, 2002), and by at

least one other federal agency in a regulation setting tolerable

levels of PCBs — the particular pollutant at issue here, see 21

C.F.R. § 109.30(a). But even if those statements “do{] not

address the scope of CERCLA liability,” Opp. 15 n.4 — and we

have never contended that they do — they demonstrate that

there is no justification for treating manmade substances

differently from naturally occurring ones, since both have

“background” levels. The only logical conclusion, therefore, is

either (i) that CERCLA liability should attach whenever waste

contains only below-background levels of naturally occurring or

manmade hazardous substances (a position, again, that the

government does not expressly embrace), or (ii) that CERCLA

liability should not attach when waste contains only below-

background levels of naturally occurring or manmade

hazardous substances (as we contend). In either case, the

Second Circuit’s decision misstates the rule — and certiorari is

appropriate to determine the correct rule.

3. The government does suggest that “[c]ourts have

consistently held that CERCLA’s definition of hazardous

substance does not include a ‘[q]Juantity or concentration’

requirement,” id. at 4, and that “courts have * * * concluded,

without exception, that CERCLA liability may arise from the

improper disposal of wastes containing small amounts of

hazardous substances,” id. at 13. But the circuit decisions the

government cites in this regard do nothing to undermine the

critical proposition asserted by Alcan: namely, that CERCLA

liability should not attach when waste contains only below-

background trace concentrations of hazardous substances.

For example, although the Second Circuit, in its earlier

opinion in this case, did state that “‘[q]uantity or concentration

is not a factor’” in the statutory definition of “hazardous

substance,” 990 F.2d at 720 (quoting B.F. Goodrich Co. v.

Murtha, 958 F.2d 1192, 1200 (2d Cir. 1992)), it of course

recognized an exemption from Jiability for waste containing

trace concentrations of naturally occurring hazardous

substances, see id. at 722. Similarly, the Third Circuit has

recognized only that “CERCLA liability does not depend on the

existence of a threshold quantity of a hazardous substance” —

not that CERCLA liability ultimately attaches even when waste

contains only a trace concentration of a hazardous substance.

United States v. Alcan Aluminum Corp., 964 F.2d 252, 260-61

(3d Cir. 1992) (emphasis added). Finally, the Fifth Circuit,

while likewise recognizing that the “plain statutory language

fails to impose any quantitative requirement,” expressly

rejected the proposition that “CERCLA liability attaches upon

the release of any quantity of a hazardous substance,” reasoning

that such an interpretation would “permit CERCLA’s reach to

exceed its statutory purposes by holding parties liable who have

- not posed any threat to the public or the environment.” Amoco

Oil Co. v. Borden, Inc., 889 F.2d 664, 669-70 (Sth Cir. 1989).'

4. The government’s attempts to distinguish the circuit

decisions cited in the petition, see Opp. 16-17, are likewise

unavailing. As to the First Circuit’s decision in Massachusetts

v. Blackstone Valley Electric Co., 67 F.3d 981 (1995), the

government claims that the decision stands only for the

proposition that “it was not sufficient that [ferric ferrocyanide]

falls within a general category of ‘cyanides’ listed under the

Clean Water Act; rather * * * the substance must be more

specifically identified in one of the lists of hazardous substances

' The D.C. Circuit’s decision in Eagle-Picher Industries, Inc. v. EPA, 759

F.2d 922 (1985), is distinguishable. The issue in that case was whether

mining wastes and fly ash could constitute “hazardous substances”

notwithstanding the suspension of regulation of those substances under the

Solid Waste Disposal Act. See id. at 926-27. The court held that they could,

but only on the narrow factual basis that the petitioners failed to demonstrate

that all or virtually all mining waste and fly ash contained only trace amounts

of hazardous substances. See id. at 928.

that Section 101(14) of CERCLA incorporates by reference.”

Opp. 17 (citing 67 F.3d at 984-85). The cited portion of the

First Circuit’s decision, however, merely summarizes the

statutory scheme and the district court decision that was under

review. And in any event, the government’s characterization of

the First Circuit’s holding is inaccurate. Far from holding that

ferric ferrocyanide could not constitute a “cyanide” and thus a

CERCLA-regulated “hazardous substance,” the court merely

rejected the EPA’s “total cyanide” test for determining whether

ferric ferrocyanide did constitute a regulable “cyanide,” see

Blackstone, 67 F.3d at 988-91, and referred the case back to the

EPA for a new determination, see id. at 993. In doing so, the

court reasoned that the EPA’s “total cyanide” test could lead to

“nonsensical results” because many everyday substances

contain cyanide molecules. Jd. at 989-90. It added that such a

test would be “untenably overinclusive” because it would

sweep in substances that “no one, including the EPA, would

categorize * * * [as] within the meaning of * * * CERCLA.”

Id. at 990. The First Circuit’s decision is plainly in tension with

the decision below, which would bring innocuous substances

such as milk and rainwater within CERCLA’s ambit.

As to the Fifth Circuit’s decision in Licciardi v. Murphy Oil

U.S.A., Inc., 111 F.3d 396 (1997), the government contends that

the decision held only that “{the plaintiff] presented ‘no

evidence that the found “release” justified the response costs.”

Opp. 17 (quoting 111 F.3d at 399). Two sentences earlier in the

opinion, however, the court reiterated its earlier holding from

Amoco Oil that “liability does not attach to the release of ‘any

quantity of a hazardous substance.’” 111 F.3d at 399 (quoting

Amoco Oil, 889 F.2d at 670-71); see also id. at 398 (same).

Contrary to the government’s suggestion, therefore, see Opp.

17, the Fifth Circuit did indicate that a company could not be

held liable under CERCLA for disposing of de minimis

amounts of hazardous substances. The Fifth Circuit’s decision

in Licciardi, like the First Circuit’s decision in Blackstone, is in

tension with the decision below.

5. In the end, the government is left only with the weak

suggestion that Alcan presented insufficient evidence below to

establish that its emulsion contained below-background

concentrations of PCBs. See Opp. 15-16, 19. That suggestion

is not only inaccurate, in light of the unrebutted (and

unobjected-to) evidence introduced by Alcan at trial, see, e.g.,

C.A. App. 1196, but also irrelevant. Precisely because of its

holding that CERCLA liability attaches even when waste

contains below-background levels of manmade hazardous

substances, the district court made no factual finding as to the

level of PCBs in Alcan’s emulsion, concluding only that the

government established that Alcan’s emulsion contained some

level of PCBs. See Pet. App. 50a. The Second Circuit agreed.

See id. at 9a-10a. Indeed, if the courts below had concluded, as

a factual matter, that there were above-background PCB levels

in Alcan’s emulsion, they would have had no need to reach the

legai question whether CERCLA liability attaches to disposals

of below-background levels of manmade hazardous substances.

To the extent that there are any factual disputes as to whether

Alcan’s emulsion contained below-background levels of PCBs

— and it is Alcan’s view that there is not, see Pet. 12 — those

disputes could and should be resolved on remand after this

Court establishes the correct legal standards.’ Critically, the

burden of proof on the threshold question of whether a

generator disposed of covered “hazardous substances” — unlike

? Significantly, it is undisputed that the government presented no evidence

below as to the quantity of PCBs in Alcan’s emulsion, but only evidence that

PCB contamination was subsequently found at the plant whence that

emulsion came. See Pet. 12 n.3; Opp. 16. Moreover, although the

government suggests that, even if the PCBs or other substances in Alcan’s

emulsion existed only at below-background levels, they could conceivably

concentrate (say, if water in the emulsion evaporated) and reach above-

background levels. See id. at 16n.5. But the district court ultimately did not

find that such concentration either did occur or was likely to occur, see C.A.

App. 192 n.5, and this issue, too, could readily be addressed on remand.

the burden on the subsequent question of whether damages are

divisible — would presumably lie not with the defendant, but

rather with the government. See, e.g., Alcan, 964 F.2d at 264.

The underlying legal question whether a company could be

subject to CERCLA liability for disposing of substances

containing only trace amounts of manmade pollutants is

therefore squarely before this Court, and certiorari should be

granted to resolve it.

B. The Second Circuit Erred By Imposing Joint and

Several CERCLA Liability Merely For Disposing Of

Harmless Waste, On The Ground That It Could

“Spread” Hazardous Substances In Waste Disposed

Of By Others.

1. The government likewise offers little defense of the

Second Circuit’s further holding that generators may be held

jointly and severally liable even if their waste contains only

trace amounts of hazardous substances, simply because that

waste might “spread” the hazardous substances disposed of by

others. See Opp. 19-20. The government cites no cases for its

assertion, antithetical to common sense, that the fact that waste

has “mobilizing effects” precludes a generator from obtaining

any apportionment of its liability. Instead, the government

contends that “[p]etitioner overlooks the fact that it did not send

a pure oil-water emulsion to the PAS and Fulton sites; rather, it

sent a mixed industrial waste stream, consisting of water, oil,

PCBs and other hazardous substances that, in itself, qualified as

a hazardous substance.” /d. at 20.2 That contention, however,

is entirely unresponsive. Even assuming that the presence of

minimal amounts of PCBs in Alcan’s waste sufficed to

transform that waste into a “hazardous substance,” the Second

> Although the government states that Alcan’s emulsion contained “other

hazardous substances” beyond PCBs, the district court did not find that any

of those other hazardous substances, all of which were naturally occurring,

existed in above-background levels. See, e.g., 755 F. Supp. 531, 536-39

(N.D.N.Y. 1991); Pet. App. 35a-36a; C.A. App. 191 n.5.

Circuit effectively used the presence of those trace amounts as a

bootstrap to subject Alcan to full joint and several liability

without any possibility of apportionment. If the Second

Circuit’s decision is allowed to stand, full joint and several

liability could attach even to companies that have disposed only

of what are undeniably harmless substances.

Nor is there any question that the lower courts’ refusal to

apportion liability rested solely on their determination that the

non-hazardous liquid substances in Alcan’s emulsion —

namely, water and oil — produced “mobilizing effects” on

hazardous substances disposed of by others. See Pet. App. 12a-

13a (Second Circuit); id. at 64a (district court) (noting that “a

singularly non-toxic substance can physically interact with other

substances and contribute to release and response costs”).

There was no specific finding below that the alleged PCBs in

Alcan’s emulsion somehow interacted with any other hazardous

substance in the emulsion, nor that the PCBs in Alcan’s

emulsion interacted consequentially with hazardous substances

produced by others. See Pet. 13. The Second Circuit’s legal

conclusion that apportionment of liability is precluded

whenever non-hazardous components of waste have

“mobilizing effects” is therefore ripe for this Court’s review.*

2. The government also misfires in contending that Alcan

inaccurately characterizes the decision below by suggesting that

it holds Alcan “entirely” liable for the cleanup costs of the two

sites. See Opp. 21. In fact, we have already noted that Alcan

did receive an offset for the share of liability paid by the settling

defendants, even though the Second Circuit refused to further

apportion Alcan’s liability. See, e.g., Pet. 1, 14. Nonetheless,

the mere fact that Alcan’s emulsion “constitute[d]

* As amici Washington Legal Foundation et al. note, it is questionable

whether the fact that waste had “mobilizing effects” even increases the cost

of recovery at all. Such waste “may have actually diluted the hazardous

substances disposed of by others at the site, and thus[] ameliorated any

environmental harm.” Br. of Washington Legal Foundation et al. 16.

approximately 25 percent of the total volume of waste material”

sent to the PAS site, Opp. 21, does not imply that Alcan should

necessarily bear 25 percent of the liability. Such a slavishly

volumetric approach is inappropriate where, as here, the

generator’s waste was never proven to be harmful or give rise to

any remediation costs. Cf Control Data Corp. v. S.C.S.C.

Corp., 53 F.3d 930, 937-38 (8th Cir. 1995) (rejecting strict

volumetric approach on ground that “those who release

substances that are more toxic are more responsible for the

hazardous condition”). And the government does not deny that

a future defendant in Alcan’s position could be liable for most

or even all cleanup costs, should the government choose either

to settle too cheaply with other generators, or, in the extreme

case, not to pursue any other generators at all.

3. Finally, the government claims that Alcan’s assertions

about the current breadth of CERCLA liability are based on

mere “speculation and unsubstantiated anecdotes.” Opp. 13.

Even before the decision below, however, actual examples of

CERCLA’s breadth were not hard to find. See, e.g., Ted

Cilwick, Big Polluters Find Way to Clean Up the Balance

Sheet: Soak the Little Guy, Salt Lake Trib., Nov. 8, 1992, at

A10 (citing, inter alia, contribution action against pizza parlor

for disposing of pizza boxes and other garbage). The Second

Circuit’s decision gives the government a green light to

prosecute virtually anyone for violating CERCLA, and

establishes a rule under which “liability 1s based more on a

defendant’s ability to pay * * * than on culpability.” Cathleen

Clark, Should The Butcher, The Baker And The Candlestick

Maker Be Held Responsible For Hazardous Waste?, 1994 Utah

L. Rev. 871, 874. Given these draconian implications, the

Court’s review is needed.

CONCLUSION

The petition for certiorari should be granted.