# Petition for Writ of Certiorari — Hercules Inc. Inc. v. United States (Nos. 06-865, 06-1014, 06-853) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_1925%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2006 ## Text oupreme Court, U.S rilLlEep 06-855 DEC 14 2006 ) OFFICE OF THE CLERK No. IN THE Supreme Court of the Gnited States HERCULES INCORPORATED, Petitioner, UNITED STATES OF AMERICA, Respondent. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT PETITION FOR WRIT OF CERTIORARI W. GORDON HAMLIN, JR. LAURENCE H. TRIBE \V. ROBERT DENHAM. JR. Counsel of Record POWELL GOLDSTEIN LLP JONATHAN S. MASSEY One Atlantic Center Hauser Hall 420 Fourteenth Floor 1575 Massachusetts Avenue 1201 W. Peachtree Street, N.W. Cambridge, MA 02138 Atlanta, GA 30309-3488 (617) 495-4621 (404) 372-6600 Counsel for Petitioner QUESTIONS PRESENTED 1. Whether the Fifth Amendment to the Constitution permits the unexpected and unforeseeable imposition of over $100 million in retroactive liability that is utterly disproportionate to a party’s conduct, without any consideration of the factors articulated by this Court in Eastern Enterprises v. Apfel, 524 U.S. 498 (1998). 2. Whether the Environmental Protection Agency’s use of its cancer potency factor for dioxin is contrary to the Administrative Procedure Act, 5 U.S.C. § 553, because EPA admittedly has applied this factor inflexibly and without exception for over twenty-five years, effectively creating a legislative rule, but without ever subjecting it to notice-and- comment rulemaking. PARTIES TO THE PROCEEDINGS BELOW In addition to the parties listed in the caption, Crompton Co./CIE (formerly known as Uniroyal Chemical Ltd.) appeared as an appellant in the Court of Appeals. The Arkansas Department of Pollution Control and Ecology appeared as a plaintiff in the District Court. The following parties appeared as defendants or third-party defendants in the District Court: Vertac Chemical Corporation, Velsicol Chemical Corporation, Inter-Ag Corporation, the Department of Defense, Standard Chlorine of Delaware, Inc., BASF Aktiengesellshaft, BASF Corporation, and The Dow Chemical Company. ill RULE 29.6 STATEMENT Petitioner Hercules Incorporated states that it has no parent companies and that no publicly-held company owns 10% or more of its stock. 1V TABLE OF CONTENTS CO ee WRT SURED itscncinyoctassevevertserermensioseontersontins ] PARTIES TO THE PROCEEDINGS BELOW .................. ll PRPs CMe ETAT IEE. essnperilenisocnidcsineitncdebeciersivestiniavnats 1H Pe SAE FAR EER Mee iekedccsenpcttnnsedocccetadivncenbietiunrscn vi I ATT sated stivesdecicernitiprenniehsiioctobonscsuscacnetegnenes 1 Fa I sieateeritiesednbiokansidasucncascidpnbivreptabeierectslecceniin 1 RELEVANT CONSTITUTIONAL AND EPR ERS FRE OO vievcctintchadecosncenvnstvccaoar l DEP AOMREGE SIE ERR ARES ceccsivcceiiscerjnrterssnsveversenessssveins 1 3 III oc cicicosseveisvscoscccouasnicsiindstncasigcveciie 3 2: Generation and Disposal of Wastes By Vertac Under Governmental Supervision After Hercules Had Left eS Eee a MLD A Lp RENO PULTE ROT 5 3 EPA’s Claims Against Hercules .................. 8 4. The Decisions Below ........ccccccsssesesssessseees. 12 REASONS FOR GRANTING THE WRIT .......0.0.0 eee 13 I. REVIEW IS WARRANTED TO ADDRESS THE QUESTION OF THE CONSTITUTIONAL LIMITS ON RETROACTIVE LIABILITY ......:0cccccereees 13 Vv { A. The Eighth Circuit’s Judgment Is Inconsistent With Eastern Enterprises Because It Failed To Apply The Factors Articulated By This Court .............. 14 B. The Eighth Circuit’s Judgment Is Inconsistent With Eastern Enterprises Because It Ignored the Difference Between Facial and As-Applied Challenges ........... 18 [ The Confusion and Division Among the Lower Courts Regarding Eastern Enterprises Underscore the Need for COMI asa: Fcsnrasdevvencaicunacaecapionern 20 IT, REVIEW IS WARRANTED FOR THE SEPARATE REASON THAT EPA’S USE OF ITS POTENCY FACTOR IS INCONSISTENT WITH THE APA AND WITH DECISIONS OF OTHER U.S. COURTS OF GRE TPE sci ssctsnaibrscghiseiibzeriasvsnctnialineenads 24 ee OUAET cparlcsdesestinheessrcdeegeradsatieceinvuadeceienelichcodirmios 30 PRET EMEA AD: Si kvcaclnaiithaetaltvidiiasborndcenieds follows Conclusion vil TABLE OF AUTHORITIES Cases ABB Indus. Sys., Inc. v. Prime Tech., Inc., Se ce Sk Ce FIO) ceskvepanincenbinheepincenuionit 17 Alaska v. DOT, BGS E26 BGT CA, BGG) svi ccessidcinvecsrsevesceieties 28 American Hospital Association v. Bowen, SOA FAG FST CAI EGG) nvvscicenenscniscnserecteenpents 29 Anker Energy Corp. v. Consolidated Coal Co., 177 F.3d 161 (CA3), cert. denied, hc CO AE OED vecitcacianigteosiptenvvcestindeeineeniins 21 Association of Bituminous Contractors, Inc. v. Apfel, 156 FSG 1ZAC(CADC T9FG) ann cccrcvacocccnrsrcvccveensans 21 A.T. Massey Coal Co., Inc. v. Massanari, 305 F.3d 226 (CA4 2002), cert. denied, Fe Ais FI Ae CEP acess cessensosncbnbiesescanndlotcsiabgin 21 Avoyelles Sportsmen's League, Inc. v. Marsh, FE ee OT Ge SOE E vereninrsivteincsponisenniokinns 27-28 Barnhart v. Peabody Coal Co., re Es BPP E biceicicitevadvicivaguletasuimupecbietinndos 23 Batterton v. Marshall, RF re eG AT TD vaveow ester scciiscttcrvicivetieess 28 Chamber of Commerce of the U.S. v. OSHA, G36 F 20 AGE (CADC PSBO) .ccsesvseccesisserrvevesccsiccness 29 Vii Columbia Broadcasting System, Inc. y. United States, SUG Ws GEE CED thine treresaitenandin cebbbiclanieetveviniin 26 Community Nutrition Institute v. Young, 818 F.2d 943 (CADC 1987) (per curiam) .....:........ 28 Eastern Enterprises v. Apfel, Se is Be GND pcin vhccinncasenevvansavicenivetonnetices passim Environmental Integrity Project v. EPA, GES FS Ce SED hoartsterssinensscestiecnsiorcvens 28 Franklin County Convention Facilities Auth. v. American Premier Underwriters, Inc., FE BFE SaW Ce ZOE) eiisvwrtcccocenstsetenatincvectib easy 21 General Elec. Co. v. EPA, FPO CSE STI CATS BOD Asccstincvciesnscitneticiisceiiins 27 G.J. Leasing Co., Inc. v. Union Elec. Co., SF Sie Cea CE tess snverndsinsenccseesisignnintins 16 Golan v. Ashcroft, 310 F. Supp.2d 1215 (D. Colo. 2004) 0. 22 Grutter v. Bollinger, Br ies Tee Gt bs sincivibinctninnccensicersniecbdniaaentiaane 23 Hercules v. United States, SEATS. BET GaN éicciinteinceiiessecsecticcadaiagtetueseiacion 17 Jerri’s Ceramic Arts v. Consumer Product Safety Comm'n, 874 F.2d 205 (CA4 1989)... cecceesseeeees 28 Kelo v. City of New London, Ee Se Dee CD sev desvnicseviesecceies cotoviptiisubinncins 24 Vili Lingle v. Chevron U.S.A. Inc., Sih oF. SEE CICS) scvccesessesnnsnianinigiirnsiavvenisnioiooes 24 McLouth Steel Prod. Corp. v. Thomas, S38 F.2d VST CCA TOCSY cscicsccccissieccscusoreveeeess 26 National Family Planning & Reproductive Health Ass'n, Inc. v. Sullivan, 979 F.2d 227 SATA, USGES csisvissctasionsnsaiatiticeeeepnestnaaledianinae. 29 National Knitwear Manufacturers Ass’n v. Consumer Products Safety Comm'n, GG F Ze Bi COI TOG ED ssrsisicecsiscsperccdicnndctocrnin 28 O’Dell v. Hercules, Inc., FOR FP 26 TIGA IGAR PSG GD sscreistccisinictstaneven 5 Patella v. Ret. Bd. of the R.I. Employees ’ Ret. Sys., E739 .36 SOCAL BOE thinsiccieonnacions 22 Pickus v. United States Board of Parole, SOT FE AG VEGF CAI UGTA D sesssvicerevecisansneriorsecters 28 Planned Parenthood of Southeastern Pa. v. Casey, 947 F.2d 682 (CA3 1991), modified on other grounds, SOS SB. CSS EGIL) cvecsesecsssedevecscoceete 22-23 Purolator Prods. Corp. v. Allied-Signal, Inc., 772 F. Supp. 124 (W. DN.Y. 1991) ...ccscosccoscessacsees 18 S & M Brands, Inc. v. Summers, 2005 WL 3160869 (M.D. Tenn. 2005) .................. 22 Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, SSS £5. FUE CED siccrcticorscetcententroniinitvtceanitiaihes 23 ix United States v. Alcan Aluminum Corp., 315 F.3d 179 (CA2 2003), cert. denied, EGS PETRY bivstsesnntivecsiversissiceseventsesecticsees 21 United States v. CDMG Realty Co., BP IE PAE EGAD EIDO) cvseversivouseroecenvesssesesonsevecsie 17 United States v. Dico, BE OE CAS BOGE) cccsesyscvccccisvocessorvecssesssesee 19 United States v. Hercules, Inc., PE Oe FP GAAS BOIL) ccccvveciccacereccesvoreses 4, 6-7, 12 United States v. Ottati & Goss, Inc., PE Fhe ME CRE. BOIO) sévcccvncssceosvesscecsenseccoscesess 25 United States v. Picciotto, Be ee, PT GMs POE) sevscrsevescecevercocesssvessences 29 United States v. Vertac Chemical Corp., 46 F.3d 803 (CA8), cert. denied, CD ac ciccipecccstnaveverediverserssiteceesene 17 United States v. Vertac Chemical Corp., 855 F.2d 856 (CA8 1988), vacating ee SPP CES P AIR, IGT) avevvessscerensorreceeseess 8 United States vy. Vertac Chemical Corp., 79 F.Supp.2d 1034 (E.D. Ark. 1999) oe. 4,16 United States v. Vertac Chemical Corp., 489 F. Supp. 870 (E.D. Ark. 1980) ...... ce eeeeeeeeees 7 United States v. Vertac Chemical Corp., 756 F. Supp. 1215 (E.D. Ark. 1991), aff'd, EE FICE I CSE) ccccccccscoscrcccsascicnsecsecaeessveces 8 United States Tel. Ass'n v. FCC, BB P36 T2358 CCA BD ccecinsstnctvernnsetstaencvamsaiion 26 U.S. Fidelity & Guar. Co. v. McKeithen, FAME FO GAS CCAS BOGE crccstrtcccienectvincintpiciintonnins 21 Wisconsin Right to Life, Inc. v. FEC, 126 S.Ct. 1016 (2006) (per curiam) .........: cece 19 STATUTORY AND ADMINISTRATIVE MATERIALS: FR Sb SP aEnED: Gccashepecanaicnanieciebiadabbleke mtasabisaatibialid 1,25 Ati: BE PO TAA. decitsnsiniatichcnnanesaelbcanaaa 14 Be RI TE RULE) cisesivisctsenincdbinsntiesecaheteenbinnitiieihecaeliaias ] ee CE, Be scccctiseviccccosivmnesdstrianciageoieaeman 6 Me Gh ads WF TOD Sicckdinnaninintibcbabiaimunaniel 1,3 OE AF cary Oe PE picacvecavesesecsdiccietdensiiaamaiacinn 1, 82 GE FEB Fe hick iibicisnccceiventsshticieanbiciaddcieiilasnddiianaat 16 FO UE, 0 OE chcdecscoinivstasipiecmeninpetintsiceniteeinachciameasels 17 SF Fa ek PI VEE priiitaieinekicsnniaerbeesinianion 7 S. Rep. No. 248, 79th Cong., 2d Sess. (1946) ...... eee 29 4S Ped. Hee. T5597 CGR. 11, TIO) occicsescocsssnsinssovavenivivesonse 6 43. FOG. FO, SARTO CR BG, TIO D cscccnscccsetinesesticincienneceteia 6 X1 MISCELLANEOUS: Stephen Breyer, BREAKING THE VICIOUS CYCLE: TOWARD EFFECTIVE RISK REGULATION EGE A cissiehaccsihcschiaicctlectidieedstibisdicion salsditinas iicekclebaaobeian 2-3, 25 Bruce Howard, “A New Justification for Retroactive Liability in CERCLA: An Appreciation of the Synergy Between Common and Statutory Law,” 42 St. Louis U.L.J. 847 (1998) oe 22 Jan G. Laitos, “The New Retroactivity Causation Standard,” 51 ALA. L. REV. 1123 (2000) .............. 22 National Academy of Sciences, Health Risks from Dioxin and Related Compounds: Evaluation of the EPA Reassessment (July 11, 2006) ..........00... 30 Daniel E. Troy, “Retroactive Legislation” (American Baterprion Wngtitiste 1997} .cccevsccsesscserossovvsvessensessose 22 PETITION FOR A WRIT OF CERTIORARI Petitioner § Hercules Incorporated (“Hercules’’) respectfully petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Eighth Circuit in this case. OPINIONS BELOW The Eighth Circuit’s opinion (Pet. App. la-24a) is published at 453 F.3d 1031 (8th Cir. 2006). The opinion of the district court (Pet. App. 25a-65a) is published at 364 F.Supp.2d 941 (E.D. Ark. 2005). JURISDICTION The Court of Appeals denied a timely petition for rehearing and rehearing en banc on September 19, 2006. (Pet. App. 66a). This Court has jurisdiction pursuant to 28 U.S.C. § 1254(1). RELEVANT CONSTITUTIONAL AND STATUTORY PROVISIONS The Fifth Amendment provides in relevant part: “No person shall . . . be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.” Relevant statutory excerpts from 42 U.S.C. §§ 9607(a), § 9613()(2), and 5 U.S.C. § 553(b) are reprinted in the Appendix (Pet. App. 67a-69a). STATEMENT OF THE CASE In this case, the Eighth Circuit imposed over $100 million in unexpected and unforeseeable retroactive liability on Hercules under CERCLA, the Superfund statute. The Court of Appeals required Hercules to pay cleanup costs for wastes generated at a chemical plant by a third-party purchaser, even though the generation and disposal of those wastes indisputably occurred years afier Hercules had ceased production and sold the plant, and years after Hercules exercised control at the site. In fact, the waste accumulation and disposal occurred when the site was under continuous supervision by a federal court and state and federal environmental agencies. Pet. App. 4a-6a. The Eighth Circuit nonetheless held Hercules liable on the ground that a highly tenuous but-for- causal chain could be constructed between Hercules and the waste at issue. The Court of Appeals opined that, because it had upheld ‘ :e retroactive application of CERCLA in a different case with different facts, it could impose over $100 million in retroactive liability in this case without even considering the principles of Eastern Enterprises v. Apfel, 524 U.S. 498 (1998). The Eighth Circuit further held that the Environmental Protection Agency (“EPA”) was not required to submit its cancer potency factor for dioxin to public comment and rulemaking under the Administrative Procedure Act (“APA”), even though the agency has treated its potency factor as a legislative rule for over two decades at every dioxin site in the country, without exception — resulting in nationwide costs of over $100 billion. EPA’s failure to comply with the basic requirements of notice-and-comment rulemaking has allowed the agency to evade the overwhelming scientific evidence against its potency factor and to avoid accountability for its regulatory and political choices. This is a textbook case of an administrative agency run amok. Yet the Court of Appeals opined that EPA’s potency factor was not a legislative rule because the agency claimed in litigation briefs (but not in the administrative records) that it was only “advisory.” Pet. App. 21a. The Eighth Circuit’s ruling conflicts with administrative law decisions by other courts of appeals, particularly the D.C. Circuit, which has a well-developed body of precedent on the issue of when rulemaking is required. This case is of national significance. The CERCLA statute’s retroactive application of strict, joint and several liability to non-negligent activity is unique in American law and has imposed massive economic costs. See Stephen Breyer, BREAKING THE VICIOUS CYCLE: TOWARD EFFECTIVE RISK REGULATION 18 (1993). The holdings of the Eighth Circuit raise important questions of federal law and conflict with decisions of this Court and of Courts of Appeals outside the Eighth Circuit. The questions presented are independent of each other, and this Court’s plenary review is amply warranted on both. 1. Background. This case is a CERCLA cost recovery action, filed by the United States pursuant to 42 U.S.C. § 9607(a), involving a chemical manufacturing plant known as the Vertac Chemical Corp. (“Vertac”) site in Jacksonville, Arkansas. Hercules acquired the plant in December 1961 from Reasor-Hill Corporation and substantially improved it over the course of the next decade before ceasing production in 1970. Pet. App. 3a-4a. Hercules’ primary products were herbicides known as 2,4-Dichlorophenoxyacetic acid (“2,4-D”) and 2,4,5- Trichlorophenoxyacetic acid (“2,4,5-T”’). These herbicides are synthetic growth hormones that kill weeds or brush by accelerating growth to the point of natural death. Under normal conditioiis, each herbicide biodegrades relatively quickly into harmless substances. They were used as replacements for lead arsenate, a much more lethal herbicide. JA24101-24102. Hercules sold over 90% of its 2,4,5-T production to the Department of Defense under rated orders (which could not be refused) as a component of the defoliant “Agent Orange.” JA24854. (Agent Orange was used by the US military in Vietnam to defoliate the forest canopy which provided cover for enemy troops.) In 1965, Hercules learned that the manufacture of 2,4,5-T created a trace by-product known as | 2,3,7,8-Tetrachlorodibenzo-p-dioxin (“TCDD” or “dioxin”. By contrast, the manufacturing process for 2,4-D did not produce dioxin. While Hercules operated the plant from 1961 until 1970, there was no scientific evidence, anywhere in the world, linking dioxin to cancer. Scientists from The Dow 4 Chemical Company published the first such research paper in 1978. JA24552. The courts below found that Hercules operated the site in an exemplary manner. The Eighth Circuit concluded that “Hercules generally improved the safety and cleanliness of the site and complied with environmental regulations between 1961 and 1971.” United States v. Hercules, Inc., 247 F.3d 706, 712 (CA8 2001). The District Court similarly cited Hercules’ “cooperation with government officials”; explained that “[t]here is no doubt that Hercules’ safety and environmental programs are to be commended”; and opined that “Hercules’ safety and maintenance programs are laudatory.” United States v. Vertac Chemical Corp., 79 F.Supp.2d 1034, 1040 (E.D. Ark. 1999). For example, Hercules installed an underground sewage system to collect chemical wastes, upgraded major items of equipment to prevent leaks and spills, installed curbs and gutters around equipment areas, and took a number of other steps to “tighten up” the production process. JA10473, 24066, 24081-24086, 24090-91. Hercules also took great care in its selection of an onsite burial location for its chemical wastes and carefully monitored nearby creeks to ensure that it was not polluting them. Testing showed that the runoff water was safe enough to drink. JA24101. Hercules never had an accidental death while it ran the plant. In fact, it operated for nearly seven years without a single day of lost time due to an on-the-job-injury and won numerous safety awards. JA24100, 24105. Hercules was the only major manufacturer of 2,4,5-T in the world never to have had an outbreak of chloracne, the signature illness of dioxin exposure, in its workforce. JA10481. Other companies had as many as 200 cases of chloracne. JA24091-95. In the years after Hercules’ operations at the plant ended, residents of the surrounding areas and former workers sometimes alleged in legal proceedings that they had been injured by exposure to dioxin. Hercules prevailed at every trial.' In addition, a NIOSH mortality study found that Hercules’ employees had /ower cancer rates than the general public. JA10214-16, 10235-36, 24129. Extensive testing of residents of Jacksonville and Mabelvale (a nearby community) revealed essentially background concentrations of dioxin — in fact, slightly lower than levels found in most populations in the United States. JA24589-90. 2. Generation and Disposal of Wastes By Vertac Under Governmental Supervision After Hercules Had Left the Site. Notwithstanding Hercules’ best efforts, the Jacksonville plant was not profitable. In fact, in its ten years of operations, Hercules lost $3 million on total sales of about $38 million. JA20666-20668. Because Agent Orange (a non-consumer product manufactured for and sold only to the United States military) consumed nearly the entire productive capacity of the plant for over three years, Hercules lost its domestic customers for herbicides and shifted its sales force and distribution network to other products. JA24075, 24495. When the United States terminated its contracts with Hercules in December 1968, JA10471, 24075, Hercules decided to shut the plant down and seek a buyer or lessee, rather than rebuild its sales and distribution network. In 1970, Hercules ceased production and, as the Court of Appeals found, “cleaned out all of its equipment and production vessels, [legally] buried its waste, and shipped ' For example, in a case known as Keister, former plant workers and family members contended, inter alia, that Hercules had conducted ultrahazardous activities at the plant. Hercules presented extensive medical evidence showing that the representative plaintiffs had normally functioning immune systems and suffered from no injury caused by any chemicals. JA10241-44, 24581-83. The jury returned defense verdicts on all claims. In 1988, another jury returned verdicts for Hercules, finding that it had created no risk of harm for persons residing near the plant site or the two municipal landfills. The Eighth Circuit affirmed that judgment. O'Dell v. Hercules, Inc., 904 F.2d 1194 (CA8 1990). 6 empty drums off-site.” Pet. App. 4a. In 1971, Hercules leased the plant to another company, which later became Vertac, and Hercules required it to comply with all applicable laws and regulations. Vertac purchased the plant outright in 1976. Jd. Under the agreement of sale, Hercules retained no liability for the business or the site, and Hercules believed that its financial responsibilities at the site were over. In 1978, researchers from Dow Chemical published the first paper linking dioxin to any form of cancer (in this case, liver cancer in female, but not male, laboratory rats). JA24552. Vertac voluntarily ceased manufacturing 2,4,5-T on March 15, 1979. Pet. App. 4a. On March 4, 1980, EPA and the Arkansas Department of Pollution Control and Ecology (“ADPC&E”) filed companion actions against Vertac (as a current operator of the site) and Hercules (as a former operator of the site) under the Resource Conservation and Recovery Act, 42 U.S.C. § 6973 et seg. (“RCRA”), seeking injunctive relief, primarily related to the storage and management of waste. One week later, EPA published regulations prohibiting Vertac from disposing of its drummed waste. 45 Fed. Reg. 15592 (Mar. 11, 1980). After a 4-day hearing, the District Court enjoined Vertac from releasing or disposing of its waste. EPA soon issued a final rule, and Vertac was thereafter prohibited from disposing of its waste drums. 45 Fed. Reg. 32676 (May 19, 1980). Vertac (not Hercules) generated approximately 26,000 drums of 2,4-D waste between 1979 and 1986 under the supervision of the District Court, ADPC&E, and EPA. This waste did not even exist when Hercules sold the plant in 1976. Pet. App. 4a, 14a-15a. Vertac (not Hercules) also accumulated approximately 3,000 drums of 2,4,5-T waste (known as “stillbottoms”), the vast majority of which were generated after Vertac purchased the plant from Hercules. The courts below found that Vertac stored the stillbottoms in hopes of recycling the material. Pet. App. 16a, 31a; 247 F.3d at 712; United States v. Vertac Chemical Corp., 489 F. Supp. 870, 875 (E.D. Ark. 1980).’ In 1987, after seven years of constant supervision by the Court, EPA and ADPC&E, Vertac abandoned the site, leaving behind some 26,000 drums of 2,4-D waste, 3,000 ‘stillbottom drums of 2,4,5-T waste, buildings, equipment, pallets, and trash. EPA took over the site, closed down all operations, and decided to incinerate the drums. Pet. App. 4a- 6a. EPA’s decision to incinerate the 26,000 2,4-D drums abandoned by Vertac, however, was not driven by dioxin; rather, EPA’s decision was driven by other risks posed by the drums, as well as the regulatory classification of the waste generated by Vertac. For example, EPA stated that, “fajlthough cross-contamination with dioxin was a consideration in incineration, the driving forces were the ban on land disposal of F-listed wastes, the constant failure of the drums due to their corrosive contents, and the fire and explosion hazard presented by the drummed materials.” JA22911.° EPA’s Project Manager admitted that the agency “could not have disposed of that waste .. . without some type of treatment []regardless of the level of dioxin.” EPA’s own counsel stated that “it would not be relevant” whether the ? The stillbottom drums were remediated in 1979-1980 under RCRA rather than CERCLA. Hercules and Vertac have already paid the RCRA remediation costs. The drums were stored in a specially built shed, and EPA stated in 1980 that they “pose no present threat to health or the environment.” HADD0O007. In the Court of Appeals, EPA admitted that the shed “stopped the drum failure.” EPA Brief at 58. Far from finding that the stillbottom drums leaked, the District Court found in 1980 that the stillbottoms tended to harden into something like a rubber ball. HADDO006. > “F-listed” wastes are defined as certain wastes listed by EPA at 40 C.F.R. § 261 App. VII, and in this case “the wastes generated were F- listed wastes, regardless of the presence of dioxin.” 33 F. Supp.2d at 780. drums contained dioxin because ADPC&E and EPA would have incinerated them anyway. JA27853.° 3. EPA’s Claims Against Hercules. Since 1987, EPA has never collected a penny from Vertac or anyone else directly responsible for the waste in question. ° Instead, it has pursued a cost recovery action against Hercules as a “deep-pocket” target. To be clear, Hercules does not challenge (and has not challenged) EPA’s costs regarding waste generated or disposed of by Hercules. It is undisputed that Hercules cooperated fully with state and federal authorities, spent over $40 million in cleanup costs, remedied (under RCRA) the wastes lawfully buried onsite while it operated the plant, and later committed to operate a groundwater treatment facility until at least 2015. JA24196-99, 24597-615. None of EPA’s costs at issue relate to Hercules’ buried waste. Rather, this case involves EPA’s attempt to recover over $100 million in cleanup costs for waste generated and disposed of by Vertac — after Hercules had ceased its operations at the site. EPA sought recovery from Hercules for costs associated with the incineration of drums accumulated and disposed of by Vertac (not Hercules), operating under the supervision of the District Court, EPA, * Similarly, EPA concluded that the principal perceived threat to human health from the buildings related to asbestos, not dioxin. 1A27254, 27259, 27371-72, 28265-66, 28268-69, 28350-51. ° EPA initially sought an injunction against Vertac’s owners and companies to which they had conveyed assets. The District Court found that Vertac’s owners had fraudulently conveyed assets to evade environmental liabilities. On appeal, the Eighth Circuit reversed because EPA had failed to serve process on the new parties. United States v. Vertac Chemical Corp., 855 F.2d 856 (CA8 1988), vacating, 671 F. Supp. 595 (E.D.Ark. 1987). On remand, EPA settled with Vertac’s assignees. United States v. Vertac Chemical Corp., 756 F. Supp. 1215 (E.D. Ark. 1991), aff'd, 961 F.2d 796 (CA8 1992). However, EPA has never received any funds from that settlement. and ADPC&E. EPA also sought costs from Hercules for the cleanup of Vertac’s buildings, equipment, pallets and trash — including some items that did not even exist when Hercules sold the plant in 1976. EPA’s theory of liability was nothing more than a highly tenuous chain of but-for causation. EPA hypothesized that dioxin created during Hercules’ former operation of the plant might have seeped into the soil and that, many years after Hercules sold the site, such soil might have been placed into some of the drums by Vertac employees and EPA contractors during drum cleanup and over-packing operations. As a result, the employees and _ contractors might have contaminated Vertac’s 2,4-D drums that did not otherwise contain dioxin. Yet EPA ignored the fact that such cross- contamination, if it occurred at all, would have happened years after Hercules’ involvement with the site had ceased, at a time when Hercules was powerless to control any site activities, and during a time when the site was under the supervision of the Court, EPA, and ADPC&E. Indeed, dumping soil into drums would have been directly contrary to the rules under which the cleanup proceeded. Instead, workers were directed to place contaminated soil into separate, special containers.° © EPA’s theory was also a blatant post hoc rationalization. No EPA representative had ever suggested at the time of the cleanup that the drummed waste should be incinerated because of any dioxin-containing dirt that might be inside. No EPA witness ever offered such testimony, either. In fact, there was undisputed evidence that over 17,000 drums of 2,4-D waste (out of a total of 26,000) contained no dirt at all at the time Vertac abandoned the plant. JA24828-31. A 1989 test of a random 30- drum sample of 2,4-D waste indicated no detectable concentrations of dioxin, JA24259, 24870, and the uncontradicted evidence at trial demonstrated the invalidity of every analytical test purporting to find dioxin in the 2,4-D waste drums. JA24248, 24257, 24372, 27809-18, 27859-65, 28137, 28430. 10 Similarly, EPA speculated that dioxin created during Hercules’ former operation of the plant might have remained in various production vessels after they were cleaned and sold to Vertac and might have contaminated Vertac’s production many years later. But the record contained no evidence linking Hercules’ dioxin to any such cross-contamination. Indeed, such a linkage would have been impossible to show, because after the sale Vertac used the production vessels over a 17~year period to manufacture millions of gallons of both 2,4,5-T and 2,4-D. During that time, Vertac mixed the contents of vessels used to make dioxin-containing 2,4,5-T with vessels used to make non-dioxin containing 2,4-D and thereby permanently altered the condition of the vessels as sold by Hercules many years earlier. Moreover, EPA’s speculation was even more flimsy because, after Vertac abandoned the site in early 1987, the only testing of its production vessels was performed by a company convicted of dioxin testing fraud in another state, and EPA itself concluded that the test results were unreliable. JA28230-62. Furthermore, EPA’s own evidence proved the thoroughness with which Hercules cleaned the equipment in 1970’ and showed that any Hercules residual would have long been flushed out by Vertac’s own production.® The District Court ” An EPA witness testified that about 40 men worked on this “really big job” for six months after Hercules stopped its operations in 1970. JA12737-38, 12854. They removed the residues in the vessels with heated water and even fire hoses. They were careful to remove the sediments in the bottom of the vessels. JA27540-41. They disassembled and cleaned the process lines and disconnected the pumps. JA27522-24, 27540-42. The EPA witness added that Hercules was “very professional” and extremely safety conscious. JA12694-95,12707-09. * EPA’s Project Manager for incineration agreed that 10 consecutive batches of 2,4-D production would leave no mure than a few parts per quadrillion of dioxin, even under the assumption of cross-contamination. Tab 115 to MSJ, at 137-148. Another EPA project manager concurred. JA15687-88. Such miniscule levels would have been orders of magnitude below any threshold of regulatory concern. At least five other expert 11 had itself rejected the “lingering dioxin” theory in 1980. HADD0018. In short, there was no evidence to support either of EPA’s theories of liability against Hercules. In addition, EPA based certain cleanup decisions on a scientifically dubious “cancer potency factor” for dioxin that the agency never subjected to rulemaking under the APA. The potency factor is a number used by EPA “‘to calculate the risk and to set dioxin cleanup standards.” Pet. App. 20a. EPA created its potency factor for dioxin in 1980, ratified it in a guidance document known as the 1985 Health Assessment, and has never altered it since. EPA explained that its decisions at the Vertac Site used the “[s]tandard cancer potency factors.” JA22915. The agency stated: “In fact, if EPA had not applied the cancer potency factor uniformly and consistently across the country, .. . the agency could be considered to be acting arbitrarily and capriciously.” JA21228. When Hercules proposed a different potency factor, EPA dismissed the proposal on the ground that it was “not in accordance with EPA policy.” JA16528, 16902-03, 17041. EPA has used the same potency factor across the nation in a uniform and consistent manner. JA16897-98. A survey of administrative Records of Decision (“RODs’’) at 35 dioxin sites, JA16899-902, 17159-540, showed that EPA used its “standard” potency factor at every site. JA22916-17. EPA could not identify any dioxin site since the enactment of CERCLA in 1980 where it had declined to use its standard potency factor. Nor could EPA offer a single piece of paper from the administrative records indicating an express intent to reserve discretion on the issue. To the contrary, EPA repeatedly admitted that it has applied the same potency witnesses agreed conceptually that “flushing” would occur relatively quickly. ” The cancer potency factor for dioxin is expressed as a specific number: 156,000 (mg/kg-day)'. JA16896. 12 factor uniformly and without exception at all sites where dioxin contamination was sufficient to affect remedial choices. JA16899, 17152. Because EPA has relied on an invalid rule to make its response choices, it is not entitled to recover its costs under 42 U.S.C. § 9613(j)(2). 4. The Decisions Below. On October 23, 1998, the District Court granted summary judgment to EPA on the issue of liability and held Hercules jointly and severally liable under CERCLA for all of EPA’s costs for the Vertac site and two municipal landfills. 33 F.Supp.2d 769. The court rejected Hercules’ claim that the retroactive imposition of liability violated the Fifth Amendment. /d. at 785. The court also opined that the potency factor did not need to undergo notice-and-comment rulemaking because it was a statement of “policy.” Jd. at 779. In 2001, the Eighth Circuit reversed the District Court’s summary judgment, opining that “the district court’s analysis of Hercules’s divisibility arguments reflects a fundamental misunderstanding of the doctrine of divisibility. These legal errors clouded the court’s view of the evidence supporting divisibility.”” 247 F.3d at 719. The Court of Appeals remanded for a trial on divisibility of harm without reaching the constitutional or potency factor issues. On remand, the District Court held only a “limited evidentiary hearing,” rather than a full trial, and refused to permit any discovery, even though no expert witness discovery had ever occurred. The court then took three and a half years to issue findings of fact, which essentially reiterated its previous conclusions. On March 30, 2005, the Court effectively reinstated its prior orders and imposed more than $100 million in retroactive liability against Hercules. Pet. App. 65a-66a. This time, the Eighth Circuit affirmed. It adopted EPA’s tenuous cross-contamination theory, opining that: 13 Hercules caused dioxin to enter the environment, thereby disposing of the waste. That Vertac and the EPA overpacked leaking drums in an effort to contain further contamination of the site does not absolve Hercules of CERCLA _iiability. Accordingly, Hercules remains responsible for the ongoing contamination caused by the dioxin.... Pet. App. 15a. The Court of Appeals rejected Hercules’ retroactivity challenge on the ground that it was bound by circuit precedent holding that “CERCLA’s retroactive application remained constitutional after Eastern Enterprises.” Id. at 24a. In addition, the Eighth Circuit upheld EPA’s potency factor for dioxin, even though it has never been subject to notice-and-comment rulemaking. Jd. at 20a-21a. REASONS FOR GRANTING THE WRIT This case presents important issues of federal law. The first issue involves a $100 million question of constitutional retroactivity. The second involves a $100 billion question of agency accountability and the use of science in the regulatory process. On both questions, the judgment of the Eighth Circuit is in conflict with decisions of this Court and of Courts of Appeals outside the Eighth Circuit. This Court’s plenary review is amply warranted. I. REVIEW IS WARRANTED TO ADDRESS THE QUESTION OF THE CONSTITUTIONAL LIMITS ON RETROACTIVE LIABILITY. This case involves the retroactive imposition of astronomical liability on a model corporate citizen that did nothing wrong, caused no harm, and yet has been unjustly saddled with over $100 million in cleanup costs based on circumstances outside its control — namely, the actions of a subsequent purchaser operating under the supervision of federal and state environmental agencies and under the jurisdiction of a federal court. It would be difficult to find a 14 more obvious example of fundamentally unfair retroactive liability. Although Hercules believes that many of the facts found by the District Court and Court of Appeals are clearly erroneous, that disagreement is not material to this petition. This Court’s review is amply warranted even under the facts as found by the courts below. A. The Eighth Circuit’s Judgment Is Inconsistent With Eastern Enterprises Because It Failed To Apply The Factors Articulated By This Court. Certiorari is necessary in this case because the Eighth Circuit’s decision conflicts with Eastern Enterprises v. Apfel, 524 U.S. 498 (1998), which makes clear that, even where a party is causally responsible for a particular harm, a conclusion which in this case is exceptionally tenuous at best, a reviewing court must nonetheless apply a three-factor test to ensure that retroactive liability is reasonably foreseeable and proportionate to the party’s conduct. The Court of Appeals in this case failed to undertake the constitutionally mandated inquiry — in square conflict with this Court’s decision in Eastern Enterprises. Hercuies has not asserted, and does not now assert, a facial challenge to the retroactive application of CERCLA. Rather, Hercules challenges the constitutionality of retroactive liability under CERCLA as applied to the facts of this case, in which the Eighth Circuit failed to undertake the requisite Eastern Enterprises analysis. In Eastern Enterprises, this Court held that, under the Fifth Amendment, the Coal Industry Retiree Health Benefit Act of 1992, 26 U.S.C. §§ 9701-9722, could not be applied retroactively to require a company which had once owned a coal mining business to pay health care benefits to over 1,000 former employees of that business. Although there was no single opinion for the Court, Justice O’Connor, writing for a plurality that included Chief Justice Rehnquist, Justice Scalia, and Justice Thomas, distilled from prior case law three factors of “particular significance” to the Fifth Amendment inquiry: “the economic impact of the regulation, its interference with 15 reasonable investment backed expectations, and the character of the governmental action.” 524 U.S. at 523-24. The remaining Justices applied similar reasoning, although they would have framed the inquiry in terms of Fifth Amendment due process rather than the Fifth Amendment’s Takings Clause. Their point was that such laws are constitutional only if the parties on whom liability is imposed are responsible, in some real sense, for the costs they are being asked to bear. See 524 U.S. at 539 (Kennedy, J., concurring in the judgment and dissenting in part); id. at 556- 58 (Breyer, J., joined by Stevens, Souter, and Ginsburg, JJ., dissenting). The dissenters explained that, “like the plurality,” they “would inquire if the law” as applied retroactively was “fundamentally unfair or unjust.” /d. at 558. “[T]he Due Process Clause can offer protection against legislation that is unfairly retroactive ... for... a law that is fundamentally unfair because of its retroactivity is basically arbitrary.” Jd. at 557 (Breyer, J., dissenting). The Eighth Circuit’s judgment conflicts with this Court’s decision in Eastern Enterprises. The Eighth Circuit made no attempt to apply — or even to consider — any of the factors articulated by any of the Justices in Eastern Enterprises. It never inquired as to “the economic impact of the regulation,” 524 US. at 523, even though the financial impact on Hercules was distinctly more severe than the $50-100 million liability at issue in Eastern Enterprises. After all, Eastern Enterprises had earned substantial profits from coal mining from 1947- 1964 and from its subsidiary thereafter, which more than offset the retroactive liability imposed by the government. See 524 U.S. at 516. Here, by contrast, it is undisputed that Hercules lost over $3 million on its decade of operations (JA20666-68) and has already spent $40 million on cleanup separate and apart from the amounts sought by EPA. Similarly, the Eighth Circuit never inquired as to the second factor cited by the Eastern Enterprises plurality — “interference with reasonable investment backed 16 expectations.” 524 U.S. at 523-24. Even on the facts found by the courts below, this factor should have led the Eighth Circuit to invalidate the astronomical! liability imposed on Hercules. The District Court acknowledged that “Uniroyal and Hercules are left ‘holding the bag’ for Vertac, who at least arguably caused the greatest amount of harm.” United States v. Vertac Chemical Corp., 79 F.Supp.2d 1034, 1036 (ED Ark. 1999). Hercules’ operations at the site ceased a decade before CERCLA took effect on December 11, 1980. See 42 U.S.C. § 9652(a). Hercules had completely severed its connection with the plant before researchers published the first paper linking dioxin to any form of cancer in 1978. Even if dioxin in some of the dirt at the Vertac site had been the trigger for the decision to incinerate the drums, and even if some of the dioxin had originated during Hercules’ prior operations, Hercules plainly had no ability to prevent Vertac or EPA’s contractors from violating cleanup protocols by placing the dirt into Vertac drums, at a time when the District Court, EPA and ADPC&E were supervising Vertac. Further, EPA sought to recover costs for all of Vertac’s trash, pallets, buildings, tanks, vessels, and pipes, whether or not they existed when Hercules sold the plant in 1976, and whether or not dioxin was a factor in EPA’s decision to remediate them. The enormous retroactive liability imposed here thus profoundly interferes with Hercules’ reasonable investment- backed expectations. Until now, the accepted rule has been that the sale of a useful product, building, or piece of equipment does not create CERCLA liability, even if it contains a hazardous substance. G.J/. Leasing Co., Inc. v. Union Elec. Co., 54 F.3d 379, 384 (CA7 1995). Thus, in G./. Leasing, Judge Posner, writing for the court, held that the seller of a plant was not liable for the release of asbestos fibers caused by a third-party contractor’s “ham-handed” job of dismantling the facility, years after the sale. /d. at 385. Judge Posner explained that, “fiji seems to us very odd, even in Superfund 17 Cloudcuckooland, to attribute the negligent, unforeseeable conduct of the buyer’s agents to the seller.” Jd. See also ABB Indus. Sys., Inc. v. Prime Tech., Inc., 120 F.3d 351, 359 (CA2 1997) (holding prior owners not liable despite passive spread of contamination); United States v. CDMG Realty Co., 96 F.3d 706, 722 (CA3 1996) (same). The Eighth Circuit’s ruling thus creates a circuit split, as well as a significant shadow of uncertainty over long- completed transactions that were undertaken against an entirely different background understanding. No one reasonably expected that CERCLA liability could arise in the context of the sale of useful equipment to a purchaser who then employed that equipment to manufacture products and create waste. Heretofore, no court has ever held that the sale of an operating plant constituted a “disposal” of material inside the useful equipment. The decision below threatens to upset the settled expectations of former owners who will be shocked to discover that CERCLA liability may arise even when the subsequent actions of their purchasers are supervised by the government. Imposing liability on Hercules would be every bit as unjust as imposing it on the Department of Defense (“DOD”), which initially developed the site in the 1930s as a munitions plant and owned it during World War Il. Yet DOD has been held not liable for any costs because it did not control the disposal of waste during the Hercules years. United States v. Vertac Chemical Corp., 46 F.3d 803, 809 (CA8), cert. denied, 515 U.S. 1158 (1995). Similarly, this Court has held that the government may not be held responsible for Hercules’ costs incurred in defending and settling tort claims related to Agent Orange, even though DOD prescribed the formula and detailed specifications for manufacture pursuant to the Defense Production Act of 1950, 64 Stat. 798, as amended, 50 U.S.C.App. § 2061 et seg. See Hercules v. United States, 516 U.S. 417, 419 (1996). Precisely the same reasoning shows 18 the arbitrariness and disproportionality of imposing over $100 million in costs on Hercules. The Eighth Circuit also ignored the third Lastern Enterprises factor — “the character of the governmental action.” 524 U.S. at 524. In Eastern Enterprises, the statute’s remedial payment scheme was neither wholly unfamiliar to, nor unforeseeable by, Eastern, which had operated its former coal mining business against the background understanding of a 1946 labor agreement, a 1947 retirement fund, and a 1950 benefit plan. See 524 US. at 505-08. Here, by contrast, the character of the governmental action is extraordinary. “[P]arties could not be expected to have foreseen CERCLA before it was enacted.” Purolator Prods. Corp. v. Allied-Signal, Inc., 772 F. Supp. 124, 132 (W.D.N.Y. 1991). There is no way that Hercules could have foreseen that it could one day be held liable for over $100 million in costs to clean up waste it did not create. Even the dissenting Justices in Eastern Enterprise would find the imposition of CERCLA liability unconstitutional in this case because Hercules is simply not responsible in any real sense for the costs which Hercules is being asked to bear. See 524 U.S. at 556-58, 566-68 (Breyer, J., joined by Stevens, Souter, and Ginsburg, JJ., dissenting). This case is a good vehicle to reaffirm the constitutional principles governing retroactivity because the constitutional violation here is plainer and more obvious than in Eastern Enterprises. The Eighth Circuit’s failure to apply — or even to consider — the three relevant factors is flatly inconsistent with this Court’s governing precedent. B. The Eighth Circuit’s Judgment Is Inconsistent With Eastern Enterprises Because It Ignored the Difference Between Facial and As-Applied Challenges. Instead of applying the Eastern Enterprises factors, the Court of Appeals relied on pnor Eighth Circuit caselaw 19 upholding the retroactive application of CERCLA in a different context. The Court of Appeals stated that “[w]e previously resolved this exact issue in United States v. Dico, in which we held that CERCLA’s retroactive application remained constitutional after Eastern Enterprises.” Pet. App. 24a. The Court of Appeals thus interpreted Eighth Circuit law as holding that all retroactive impositions of CERCLA liability are ipso facto constitutional, regardless of the factual context. The Court treated the retroactivity issue as one solely of CERCLA’s facial constitutionality — ignoring the principle that facial validity does not preclude an as-applied challenge in a given case. E.g., Wisconsin Right to Life, Inc. v. FEC, 126 S.Ct. 1016, 1018 (2006) (per curiam).’° The Eighth Circuit’s judgment is squarely inconsistent with Eastern Enterprises, where all nine Justices concluded that a reviewing court must engage in a fact-intensive inquiry to consider the particular facts and circumstances of individual statutory applications in determining whether the retroactive imposition of liability violates the Fifth Amendment. See 524 U.S. at 523, 528-29 (plurality); id. at 549-50 (opinion of Kennedy, J.); id. at 559, 566-68 (Breyer, J., dissenting). The Court of Appeals created a further conflict with this Court’s precedent by conflating causation with the constitutional command of Eastern Enterprises. The Eighth Circuit opined that, once Hercules “caused dioxin to enter the '° The Eighth Circuit's reliance on United States v. Dico, 266 F.3d 864 (CA8 2001), demonstrates that it has created a rule that the retroactive application of CERCLA is constitutional regardless of the facts of the individual case and the factors prescribed in Eastern Enterprises. Dico involved a completely different situation from this case. There, the defendant had been directly responsible for cleanup costs because it “had for many years used [a solvent] for degreasing and other industnal applications” and released it onto its own site and into the public water supply. 266 F.3d at 868. Unlike Dico, Hercules’ connection to the drums and other wastes created and abandoned by Vertac, a subsequent purchaser of the business, was, at best, tenuous. ee sssseseéeeeeeeeeeeeeeeeeee 20 environment,” it would remain responsible for any “ongoing contamination caused by the dioxin.” Pet. App. 15a. But that sort of “but-for” reasoning is inconsistent with Eastern Enterprises, which makes clear that the constitutional question is not coterminous with the issue of causation. After all, Eastern Enterprises itself was linked to the injury the Coal Act sought to remedy: the company had employed the miners involved, had benefited from their past labor, and was at least partially responsible for their health conditions. Yet retroactive application of the statute to Eastern Enterprises was held unconstitutional. Indeed, all nine Justices in Eastern Enterprises made clear that the Fifth Amendment may sometimes preclude the imposition of disproportionate retroactive liability even if a party is somehow causally responsible for the harm in question. Eastern “could not have contemplated liability” of the magnitude it faced. 524 US. at 531. Even though there was a causal link, it was too “tenuous.” Id.; see also id. at 549-50 (opinion of Kennedy, J.); id. at 558-59, 566-68 (Breyer, J., dissenting). The same reasoning is applicable here, because any connection between Hercules and the costs in question was too remote, too tenuous, and too unforeseeable to support the astronomical retroactive liability imposed. This Court’s review is urgently needed. C. The Confusion and Division Among the Lower Courts Regarding Eastern Enterprises Underscore the Need for Certiorari. A circuit conflict is not a prerequisite to certiorari here. After all, prior to Eastern Enterprises no lower court had invalidated the retroactive application of the Coal Act on constitutional grounds — indeed, an unbroken string of six appellate decisions had upheld the retroactive application of the Coal Act, and this Court had denied certiorari in three of those casés. See 524 U.S. at 519 n.4. Nevertheless, there 1s confusion in the circuits regarding the status of Eastern Enterprises. Just as the Eighth Circuit 21 refused to apply the Eastern Enterprises factors, other circuits have ignored the mandate of Eastern’ Enterprises. In particular, the Second, Third, Fourth, Sixth, and D.C. Circuits have limited Eastern Enterprises to its facts on the misguided theory that there was no common ground between the plurality and Justice Kennedy’s separate opinion. As the Second Circuit has explained: Because the substantive due 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. United States v. Alcan Aluminum Corp., 315 F.3d 179, 189 (CA2 2003), cert. denied, 540 U.S. 1103 (2004)." These dismissive holdings cannot be squared with decisions in other circuits applying Eastern Enterprises. For example, in U.S. Fidelity & Guar. Co. v. McKeithen, 226 F.3d 412, 416-20 (CAS5 2000), the Fifth Circuit applied the three Eastern Enterprises factors to hold that a state workers’ compensation statute altering a funding formula violated the '' See also Franklin County Convention Facilities Auth. v. American Premier Underwriters, Inc., 240 F.3d 534, 552 (CA6 2001) (“Eastern Enterprises has no precedential effect on this case because no single rationale was agreed upon by the Court.”); Association of Bituminous Contractors, Inc. v. Apfel, 156 F.3d 1246, 1253-58 (CADC 1998) (“In short, the government is correct in stating that the only binding aspect of Eastern Enterprises is its specific result — holding the Coal Act unconstitutional as applied to Eastern Enterprises.”); Anker Energy Corp. v. Consolidated Coal Co., 177 F.3d 161, 169-74 (CA3) (quoting D.C. Circuit), cert. denied, 528 U.S. 1003 (1999); A.7. Massey Coal Co., Inc. v. Massanari, 305 F.3d 226, 236-37 (CA4 2002), cert. denied, 538 U.S. 1012 (2003) (citing the D.C. and Third Circuits). 22 Fifth Amendment as applied to pre-enactment insurance contracts of insurers who had withdrawn from the state market or had substantially reduced their underwriting in the state. The First Circuit has also held that Eastern Enterprises has precedential effect with respect to Takings Clause claims. Patella v. Ret. Bd. of the R.J. Employees’ Ret. Sys., 173 F.3d 46, 58 (CAI 1999).' The misguided attempt by the Eighth Circuit and other circuits essentially to ignore Eastern Enterprises warrants this Court’s plenary review. Justice Kennedy represented the fifth vote in Eastern Enterprises holding the retroactive application of the Coal Act unconstitutional under the Fifth Amendment. “Where a Justice or Justices concurring in the judgment in such a case articulates a legal standard which, when applied, will necessarily produce results with which a majority of the Court from that case would agree, that standard is the law of the land.” Planned Parenthood of Southeastern Pa. v. Casey, 947 F.2d 682, 693 (CA3 1991), 2 See also S & M Brands, Inc. v. Summers, 2005 WL 3160869, *9 (M.D. Tenn. 2005) (relying on Eastern Enterprises to hold that the state violated due process regarding escrow of certain funds); Golan v. Ashcroft, 310 F. Supp.2d 1215, 1220 (D. Colo. 2004) (focusing on “Justice Kennedy’s concurrence in Eastern Enterprises for the proposition that retroactive legislation that unfairly burdens individuals and disrupts settled expectations is arbitrary and, thus, violates due process,” in order to deny motion to dismiss due process claim). Commentators have expressed the same view. See, e.g., Bruce Howard, “A New Justification for Retroactive Liability in CERCLA: An Appreciation of the Synergy Between Common and Statutory Law,” 42 St. Louis U. L.J. 847, 847 n.al (1998) ( ‘[T]he decision in Eastern Enterprises makes it clear that courts must be prepared to find that in any given case the particular facts of CERCLA liability, if enforced against an unfortunate party to the limits of the strict, joint, several and retroactive law, will run afoul of the takings and due process clauses of the Constitution.”); Jan G. Laitos, “The New Retroactivity Causation Standard,” 51 ALA. L. Rev. 1123, 1129 n.35 (2000) (“The Eastern Enterprises result raises questions about the constitutional validity of CERCLA”); Damiel E. Troy, “Retroactive Legislation” 85 (American Enterprise Institute 1997) (arguing that retroactive application of CERCLA may be unconstitutional). 23 modified on other grounds, 505 U.S. 833 (1992) (citing Marks v. United States, 430 U.S. 188, 193 (1977)); see Grutter v. Bollinger, 539 U.S. 306, 325 (2003). Nor is it correct to suggest that there was no common rationale in Eastern Enterprises. In the opening paragraph of his separate opinion, Justice Kennedy went out of his way to underscore that he was “in full accord with many of the plurality’s conclusions.” 524 U.S. at 539. He agreed that “(t]he plurality’s careful assessment of the history and purpose of the statute in question demonstrates the necessity to hold it arbitrary and beyond the legitimate authority of the Government to enact.” Jd. The fact that Justice Kennedy viewed the case through the lens of the Fifth Amendment’s Due Process Clause rather than the prism of the Takings Clause neither vitiates the Court’s Fifth Amendment holding nor transforms a 5-4 decision into a 4-1-4 ruling. If it did, the Eastern Enterprises judgment would not have reversed the decision below but would instead have affirmed that decision by an equally divided Court. Indeed, even the dissenters noted that the same three factors articulated by the plurality could properly be applied in the due process rather than the takings context. 524 U.S. at 567 (citing Connolly v. Pension Benefit Guaranty Corp., 475 U.S. 211, 225-27 (1986)). No Justice in Eastern Enterprises disputed that “an unfair retroactive assessment of liability upsets settled expectations, and... thereby undermines a basic objective of law itself,” or questioned the need to inquire whether a law “is fundamentally unfair or unjust” as applied in a particular case. 524 U.S. at 558 (Breyer, J., dissenting). Accordingly, this Court has continued to treat Eastern Enterprises as binding precedent.’? Justice Kennedy has 'S See, e.g., Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302, 324 (2002); Barnhart v. Peabody Coal Co., 537 U.S. 149, 174 (2003) (Scalia, J., joined by O’Connor and Thomas, JJ., dissenting) (“We have held that the Commissioner's use of this power [to require coal companies to pay health benefits} violates the 24 continued to describe his separate opinion in Eastern Enterprises as calling for “heightened scrutiny for retroactive legislation under the Due Process Clause.”'* This case is an ideal vehicle for this Court to clarify the status of Eastern Enterprises and the proper application of the factors articulated in that decision. Il. REVIEW IS WARRANTED FOR THE SEPARATE REASON THAT EPA’S USE OF ITS POTENCY FACTOR IS INCONSISTENT WITH THE APA AND WITH DECISIONS OF OTHER U.S. COURTS OF APPEALS. Certiorari should be granted for the independent reason that the Eighth Circuit’s decision with respect to the potency factor for dioxin involves a. question of exceptional importance and is inconsistent with the holdings of other circuits, particularly the D.C. Circuit. There is no dispute that, for the last 25 years, EPA has applied its “standard” potency factor at every site at which dioxin affected remedial choices. In fact, EPA has affirmatively stated that it would be “arbitrary and capricious” for the agency not to do so. There is no evidence that EPA retained any discretion to use any other number. It reyected Hercules’ proposed alternative on the ground that it was “not in accordance with EPA policy.” JA16528, 16902-03, 17041. Thus, while parties were free to propose alternative potency factors, EPA announced that it would not consider them. JA16164-66. Reminiscent of the imaginary “dirt-eating children” that Justice Breyer has mocked so forcefully in similar contexts, EPA coupled its Constitution to the extent it imposes severe retroactive liability on certain coal companies.”’) (citing Eastern Enterprises). '* Kelo v. City of New London, 125 S.Ct. 2655, 2670 (2005) (Kennedy, J., concurring); Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 548 (2005) (Kennedy, J., concurring) (citing his Eastern Enterprises concurrence for the proposition that “a regulation might be so arbitrary or rational as to violate due process”). 25 potency factor with absurd exposure assumptions in order to justify its response actions in this case.’ Under the APA, 5 U.S.C. § 553(b), an agency is required to submit legislative rules to notice-and-comment rulemaking. Yet the Eighth Circuit held that the potency factor was exempt from this requirement because it was contained in what was “at most only a technical and advisory report.” Pet. App. 21a (quoting the District Court). The Court of Appeals added that EPA had considered Hercules’ comments on the potency factor and rejected them because they “were contrary to EPA’s guidance.” /d. (citation omitted). The court found it immaterial that EPA failed to cite a single deviation from its dioxin “policy” since it was developed in 1980. The Eighth Circuit’s decision is inconsistent with administrative law rulings in other circuits (particularly in the D.C. Circuit) holding that an agency’s uniform and inflexible practice creates a legislative rule and triggers the need for notice-and-comment rulemaking. The bare assertion by an agency in a litigation brief that it has reserved discretion on the matter is immaterial. The Eighth Circuit’s reasoning that an agency can avoid rulemaking by purporting to consider 'S See United States v. Ottati & Goss, Inc., 900 F.2d 429, 441 (CA1 1990) (Breyer, J.) (affirming lower court’s refusal to accept EPA’s target for cleaning up soil contaminated with PCBs). See also BREAKING THE VICIOUS CIRCLE, at 12 (spending $9.3 million to protect “non-existent dirt-eating children” is the problem of “the last 10 percent’’). In this case, EPA assumed that: (1) children would live every moment of their lives between the ages of 2 and 5 on the Jacksonville landfill, (2) from ages 6 through 12, children would spend 56% of their time on the landfill, (3) teenagers would never leave the landfill, and (4) adults would then spend the next 50 years of their lives moored to the landfill. JA16341, 16859. EPA made these assumptions despite the fencing around both the two landfills, the low and declining population densities in the area, the poor drainage and standing water, the location of the landfills in the hundred- year floodplain (which would likely preclude financing for homes), and the fact that no one had ever lived on either landfill. JA16307-08, 16358, 16979-80. 26 comments, and then invariably rejecting them as contrary to agency policy, is inconsistent with this Court’s admonition that “it is the substance of what the [agency] has purported to do and has done which is decisive.” Columbia Broadcasting System, Inc. v. United States, 316 U.S. 407, 416 (1942). As the D.C, Circuit has declared, agency actions speak louder than words: If the agency “will automatically decline to entertain challenges to the statement’s position, then the statement is binding.” McLouth Steel Prod. Corp. v. Thomas, 838 F.2d 1317, 1320 (CADC 1988). In McLouth, the D.C. Circuit rejected EPA’s assertion that it did “not consider itself . . . bound” by a model used to predict levels of hazardous waste and that it “retained discretion to deviate from its use.” Td. (internal quotation marks and citation omitted). The D.C. Circuit held that agency practice proved otherwise and that EPA had created a legislative rule requiring rulemaking: “More critically than EPA’s language adopting the model, its later conduct applying it confirms its binding character.” Jd. at 1321. The D.C. Circuit noted that EPA was “close-minded and dismissive in its denial of a delisting petition,” id.; “the model is not just a ‘musing[ ] about what the [agency] might do in the future’”; “EPA was simply unready to hear new argument”; and “EPA has evidenced almost no readiness to reexamine the basic propositions that make up the” model. Id. (citation omitted; brackets in original). The D.C. Circuit concluded that “[t]he model thus created a norm with ‘present-day binding effect,” even though EPA pointed to four out of 100 cases where it deviated from the model. /d. at 1321. Similarly, in United States Tel. Ass’n v. FCC, 28 F.3d 1232, 1233 (CADC 1994), the D.C. Circuit rejected an agency’s claim that a schedule of penalties was a mere “policy statement” because the agency’s practice showed that it “intend[ed] to use that framework to cabin its discretion.” Id. at 1233. As of January 30, 2001, the name of Uniroyal Chemical Limited was changed to Crompton Co./Cie. For ease and consistency, the Court will continue to use the name Uniroyal. 26a Liability Act of 1980 ("CERCLA"), 42 U.S.C. §§ 9601 et seq. for all response costs incurred and to be incurred by the United States at the Site and related areas, and entered judgment in the amount of $102,878,641.35. United States v. Vertac, 33 F.Supp.2d 769 (E.D.Ark.1998). In what was hoped to be the last decision in this matter, the Court allocated the costs between Hercules and Uniroyal. United States v. Vertac, 79 F.Supp.2d 1034 (E.D.Ark.1999). GENESIS OF THIS DECISION On October 12, 1993, the Court granted the United States' motion for summary judgment and found that Hercules was jointly and severally liable under Section 107(a)(2) and (3) of CERCLA, 42 U.S.C. § 9607(a)(2) and (3) for the response costs incurred by the United States with regard to the Vertac Site. Hercules moved for reconsideration, at which time it argued that disputed issues of fact existed regarding divisibility. The Court, on November 1, 1993, denied the motion for reconsideration, finding, inter alia, that Hercules had failed to present evidence in support of its divisibility of harm argument. On December 19, 1999, Hercules appealed the Court's summary judgment ruling, arguing in part that the harm at the Site is divisible. On April 11, 2001, the Eighth Circuit Court of Appeals reversed the Court's summary judgment against Hercules on the issue of liability and remanded the case for the Court to "address evidence supporting divisibility in light of the proper legal standards." United States v. Hercules, Inc., 247 F.3d 706, 719 (8th Cir.2001).? The Eighth Circuit > The Eighth Circuit's decision is somewhat confusing. The court stated that it was vacating United States vy. Vertac Chem. Corp., 841 F.Supp. 884 (E.D.Ark.1993) ("Vertac V "). Vertac V however dealt only with the liability of the United States. In that case, Vertac, Hercules and the State of Arkansas argued that the United States should be held liable under CERCLA for its role in the production of Agent Orange. The United States filed a motion for partial summary judgment asking that the Court find that it is not liable. The Court found the United States not to be liable, 27a also vacated the Court's judgments on response costs, United States v. Vertac Chem. Corp., 33 F.Supp.2d 769 (E.D.Ark.1998) ("Vertac IX") and allocation, United States v. Vertac Chem. Corp., 79 F.Supp.2d 1034 (E.D.Ark.1999) ("Vertac X") pending the Court's reconsideration of Hercules’ claim of divisibility. 247 F.3d at 721. The Court scheduled a limited evidentiary hearing on the divisibility of harm defense raised by Hercules. The hearing was held between October 9 and 19, 2001 and December 11 and 12, 2001. The parties subsequently filed post-hearing briefs. The record, needless to say, is voluminous, comprising not only the numerous filed documents, but exhibits and transcripts admitted at the evidentiary hearing, exhibits and transcripts of the various trials in this action, evidentiary and deposition testimony of other federal actions involving Hercules, and the 52,000-page Administrative Record (AR) for the Site which has been filed in this action as 8 compact discs (see docket entry 2454). The Court has denying the motions of Vertac, the State of Arkansas, and Hercules and granting the motion of the United States. The Eighth Circuit Court of Appeals affirmed the Court's conclusion that the United States was not liable as an "operator" or "arranger" in United States v. Vertac Chem. Corp., 46 F.3d 803 (8th Cir.1995) ( “Vertac VI"). Vertac V did not grant summary judgment on the United States’ motion for summary sdgmeat against Hercules on the issue of liability and did not address Hercules’ argument concerning divisibility of harm. The finding of joint ané several lability of Hercules was issued in an unpublished decision eaeered on October 12, 1993. (document no. 1826) (granting United States’ motion for partial summary judgment against Hercules on the issu> of liabi‘ity under CERCLA). The subsequent order denying Hercules’ motion for reconsideration on the issue of divisibility, also unpublished, was entered on November I, 1993 (document no. 1875)(denying Hercules’ motion for reconsideration of October 12, 1993 Order). Should the Eighth Circuit again address this case, it might want to clarify the record. It is unclear whether the Court's decision in 841 F.Supp. 884 and affirmed in 46 F.3d 803 concerning the United States’ liability should have been vacated. 28a worked diligently to carefully review the record in considering this case. FACTUAL BACKGROUND The Vertac Chemical Plant Site ("Site") consists of approximately 93 acres in Jacksonville, Arkansas. The Site was originally developed by the federal government in the 1930s as a munitions factory. Around 1948, Reasor-Hill Corporation ("Reasor-Hill"), a now defunct company, purchased the Site and first formulated finished insecticide products, primarily DDT, aldrin, dieldrin, and toxaphene. In the mid-1950s, Reasor-Hill modified the plant and began manufacturing phenoxy herbicides, primarily 2,4, dichlorophenox yacetic acid ("2,4-D"), 2,4,5 trichlorophenoxyacetic acid ("2,4,5-T") and 2,4, 5 trichloropropionic acid ("2,4,5-TP" or "Silvex"). United States v. Vertac Chem. Corp., 489 F.Supp. 870, 873 (E.D.Ark.1980) ("Vertac I"). The chlorinated compound 2,4,5-trichlorophenol (2,4,5-TCP or TCP) was an intermediate in the 2,4,5-T manufacturing process. The manufacture of 2,4,5-T creates a highly toxic byproduct, 2,3,7,8-tetrachlorodibenzo-p-dioxin ("dioxin" or "TCDD") that is now viewed as hazardous to humans. Vertac X7 at 712. All of the herbicide related compounds are listed hazardous wastes under the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. § 6921, 40 C.F. R. § § 261.31, 261.33, and the compounds 2,4,5-T, 2,4,5-TCP, 2,4,5-TP are designated as "Acute Hazardous Wastes" under RCRA. 40 C.F.R. § 261.31. Additionally, all of the phenoxy herbicides and TCP are designated as hazardous substances under CERCLA. See 42 U.S.C. 9601(14); 40 C.F. R § 302.4. Reasor-Hill did not have a process to treat the waste water that was produced. United States v. Vertac Chem. Corp., 966 F.Supp. 1491, 1494 (E.D.Ark.1997) ("Vertac VIII"). While Reasor-Hill operated the Site, an unknown quantity of untreated chemical wastes from the production process flowed through cooling ponds on the west side of the 29a plant into a nearby stream. Reasor-Hill disposed of large quantities of pesticide (insecticide) and phenoxy herbicide wastes by leaving the wastes in drums on the Site. Vertac J at 874. Hercules bought the Site from Reasor-Hill in 1961 and continued to manufacture herbicides, including 2,4-D and 2,4,5-T, at the plant until 1971. United States v. Hercules, 247 F.3d 706, 712 (8th Cir.2001)("Vertac XI"). When it commenced operations at the Plant, Hercules found and then buried on-site thousands of drums of pesticide and herbicide wastes left by Reasor-Hill. Vertac VII at 1494-95. The southeast corner of the Site where Hercules buried the drums was known as the Reasor-Hill drum burial area. Hazardous substances, including insecticides, phenoxy herbic'des and TCDD dioxin, leached and flowed from the Reasor-Hiil drum burial area into Rocky Branch Creek. Until late 1964, Hercules continued Reasor-Hill's practice of discharging untreated wastewater directly into Rocky Branch Creek. Vertac J at 874. The waste water which resulted from the manufacturing of 2,4,5-T or 2,4,5-TP contained dioxin. Jd. In 1964, Hercules constructed a waste water pretreatment system, which consisted of a neutralization trench designed to reduce the acidity of the water, an equalization basin designed to stabilize the rate of flow into the City of Jacksonville's sewage system, and a pump and pipe to deliver the treated waste water to the Jacksonville sewage system. Id. The waste water pretreatment system did not remove the dioxin. The basin frequently overflowed directly into Rocky Branch Creek during heavy rainfalls, and leaked. Hercules manufactured formulations of 2.4,5-T, Silvex and 2,4,-D acids for commercial customers. [t used some of the same equipment to manufacture both 2,4-D and 2,4,5-T products, but the equipment could not manufacture both simultaneously. 30a In 1964, Hercules was awarded a contract to produce Agent Orange for the U.S. Department of Defense ("DOD").* It preduced and supplied Agent Orange to DOD through 1968. Agent Orange was a 50/50 mixture of the butyl esters of 2,4,5-T and 2,4,-D acids; a much more concentrated form of the acids than that sold by Hercules to its commercial customers. Dioxin was formed as a by-product during the production of Agent Orange. Vertac VIII at 1494. Due to strict specifications in the Agent Orange contracts, Hercules was forced to discard as waste more significant quantities of material that did not meet specifications than was discarded during production for commercial customers. At the same time, Hercules continued manufacturing 2,4,5-T, silvex and 2,4-D for its commercial customers. As a result of the increased production, the volume of wastes generated at the Plant also increased. In 1965, Hercules discovered that in the manufacture of 2,4,5-T, dioxin was generated in the process, specifically in the dechlorinator, also known as the "sputnik."” In that same year, it began utilizing a "toluene extraction” system during which dioxin and other impurities that were extracted underwent a distillation process producing a_ residue (stillbottoms). The toluene stillbottoms were contaminated with TCDD and 2,3,7,8-tetrachloro-dibenzo-furan (TCDF). Hercules buried drums of toluene stillbottoms and 2,4-D wastes at the Site and disposed of them in the landfill areas. Vertac VIIT, at 1494. See also Vertac I at 875. The drums were allowed to collect in the process areas, sometimes for several months, before being transported to the drum burial pit. The drums were thin gauge and were in poor » Agent Orange was an herbicide used as a defoliant in Vietnam. United States v. Vertac Chem. Corp., 46 F.3d 803, 805 (8th Cir.1995). > Tr.2001 at 877. The dechlorinator is the vessel in which dioxin in formed during the process of making trichlorophenol. Hercules later increased the number of "sputniks” from one to three. 3la condition. Leakage occurred at the point of storage and in transporting the drums to the drum burial area. Hercules’ practice was to scoop up any contaminated soil around the leaking drum and place it into the drum. Between June of 1964 and May of 1968, Hercules produced almost 3 million gallons of undiluted Agent Orange for DOD. After the Agent Orange contracts terminated in 1968, Hercules continued manufacturing 2,4,5-T, silvex and 2,4-D for commercial customers until June 1970. Vertac VIII at 1495-96. In late 1970, Hercules ceased production at the Site and cleaned it or "mothballed" it for the winter as Hercules began to seek a buyer or lessee of the Plant.° On October 1, 1971, Hercules leased the Site to Transvaal, Inc. ("Transvaal") which later became Vertac Chemical Corporation ("Vertac"). Among the actions Transvaal took prior to starting operations was the redyumming of about 50 to 100 55-gallon drums of 2,4,5-T wastes, some of which were leaking.’ Transvaal continued to manufacture 2,4,-D, 2,4,5-T and 2,4,5-TP and continued to bury wastes on site. In 1975, Transvaal began shipping its 2,4-D waste to off-site landfills and began to store its 2,4,5-T stillbottoms above ground with the hope of recycling the waste.® Vertac XI at 712. All waste burial took place while Hercules owned the plant. In August of 1976, Transvaal purchased the Site from Hercules and reorganized as Vertac. Vertac continued to make 2,4-D, 2,4,5-T and 2,4,5-TP. Vertac J at 874. Vertac continued its operations until 1986, when it abandoned the Site altogether. ® The extent of Hercules’ cleanup of the plant is in dispute and is discussed below. ' December 12, 1988 Deposition of Jerry Keister, p. 6-7. > The drums of the toluene stillbottoms were still on-site when the State of Arkansas ordered them to be redrummed. 2001 Tr. at 734. 32a On February 28, 1979, the Environmental Protection Agency ("EPA") suspended many of the uses of 2,4,5-T. Vertac I at 875. On March 15, 1979, Vertac voluntarily ceased manufacturing 2,4,5-T and 2,4,5-TP and overpacked its 2,4,5-T stillbottom drums. Jd.’ In 1980, Vertac recommenced the manufacture of 2,4-D. It began redrumming, or overpacking, leaking drums that it had accumulated on site.'° Spilled material along with dirt, dust, and debris were scooped up and placed into the overpacking drums. EPA found that the 2,4-D wastes had been contaminated with TCDD. On February 26, 1980, EPA issued a proposed rule under the Toxic Substances Control Act ("TCSA") to prevent Vertac from disposing of TCDD wastes from the Site. The rule, known as the "Vertac Rule," became effective March 11, 1980'' and final May 19, 1980. The Vertac Rule prohibited the off-site shipment of 2,4,- D wastes which contained TCDD.'* However, if Vertac could show that a batch of 2,4-D was manufactured and produced wastes free of dioxins, it could ship those wastes and all subsequent wastes for off-site disposal unless it went back to manufacturing 2,4,5-T. Vertac IX at 780. According to testimony at the hearing on the proposed rule, Vertac had approximately 3200 drums of wastes resulting from the production of 2,4,-D. Analysis by Vertac of three samples from 700 drums of wastes resulting from the initial production of 2,4-D revealed TCDD levels of ® The recontainerization was pursuant to a June 15, 1979 Order by the Arkansas Department of Pollution Control and Ecology ("ADPC & E"). Vertac I at 875-876. '© 2001 Tr. at 354. '! 45 Fed.Reg. 15592. ? Id. 33a approximately twenty parts per billion ("ppb").'* Vertac then sent samples of its 2,4-D wastes to Wright State University and to Monsanto for testing. Monsanto was unable to detect TCDD with its analytical equipment, but Wright State detected TCDD in composite samples taken from 700 drums of "D" wastes of .7 ppb 2,3,7,9-TCDD."* Vertac IX at 780. It subsequently found .5 ppb in another sampling of 1000 drums and a third sampling done on an undisclosed number of drums found .3ppb TCDD."° Finding that dioxin was present in the 2,4-D wastes, Vertac stopped sampling and allowed the "D" wastes to accumulate. Subsequent testing by the State of Arkansas as well as the results of trial burns revealed the presence of TCDDs and TCDFs in the drums. Vertac LX at 781.'° Both TCDD and TCDF were generated exclusively in_ the manufacture of 2,4,5-T and 2,4,5-TP, but not in the manufacture of 2,4-D. The 2,4-D waste drums, because of the acidic nature of their contents and their condition resulting from their storage and handling, failed at a rapid rate. Beside being stored on soil, the drums were also stacked several deep, three high, and unbanded, by the thousands. Vertac ceased operations in 1986 and abandoned the Site 'S 45 Fed.Reg. 32678. 4 Hercules contends that the Monsanto results of non-detect were more reliable than the Wright State University results, although Hercules’ witness Robert Fisher acknowledged that Wright State had a high resolution mass spectrometer which Monsanto did not have. 'S 5001 Tr. at 1647. © See also e.g., 2001 Tr. at 1665-1678 discussing results obtained in 1993 by Richard Ehrhart, EPA Remedial Project Manager for the incineration project of about 400 drums of 2,4-D wastes. | 34a in 1987. Vertac VIII at 1495.'’ When Vertac abandoned the Site in January of 1987, there were nearly 29,000 drums containing waste materials, including 2,4,5-T, 2,4,-D and dioxin. "Many of these drums had corroded and leaked, contaminating more soil, groundwater, and buildings at the site." Vertac XI at 712. Over 15,000 drums stored outside were exposed to the elements. "Drums were stacked three high on deteriorating pallets." Vertac LX at 772. The drums were failing at a rate of between five to 300 per week.'® "EPA determined that the wastes on the site posed a threat to public health and welfare and the environment. Residents in the area could be exposed to hazardous substances and should a large release occur, in the event of a tornado, fire, or continued poor maintenance, the toxic waste could contaminate the environment. EPA initiated a removal action in 1987 to stabilize the drums and tanks and to provide site security." Vertac LX at 772. Some of the drums were labeled "T" waste, some were labeled "D" waste, some were marked "T" and "D" and some were not marked at all. Many of the markings were indistinguishable or unreadable. Vertac, 671 F.Supp. at 606. "The drummed material was considered acutely hazardous waste and was characterized as ‘F-listed’ wasted under applicable ... RCRA regulations, 42 C.F.R. Part 261, App. VII." Vertac IX at 772. EPA chose to dispose of the wastes by incineration. When the incineration of the drums commenced, the contents of the drums were found to have different wastes including 2,4,-D, 2,4,5-T, 2,4,5-TP, dioxins, 'T See also United States v. Vertac Chem. Corp., 671 F.Supp. 595 (E.D.Ark.1987) for a description of Vertac's actions in 1986 and 1987. The Eighth Circuit Court of Appeals vacated the decision because Inter- Ag, the entity who purchased Vertac's assets, had not been joined as a party to the action. 855 F.2d 856 (8th Cir.1988) (Table). '8 4001 Tr. at 1427. Ex. 8073. 35a dibenzofurans, and all sorts of various materials ranging from dirt to broken pipes. EPA completed the on-site incineration of the 2,4-D drummed waste in October, 1994. The remaining 3260 drums of 2,4,5-T wastes were shipped off-site for incineration. Off-site shipment was completed in March, 1996. Vertac IX at 774. SCOPE OF REVIEW Hercules argues that in its latest order the court of appeals vacated all previous findings of fact of this Court. That is, the Court is now free to consider new_evidence and new facts. Hercules basically contends that the only evidence the Court may now consider is that which was introduced at the hearing on divisibility of harm that the Court conducted in 2001. The Court ordered a hearing to consider additional evidence on the issue of divisibility of harm. The Court finds that it can consider the existing record. The Eighth Circuit merely remanded the case for the Court to determine, based on the record, whether Hercules had established a basis for establishing divisibility of harm. The Court of Appeals did not remand for a new tnal. The United States has already established, and the Court has previously found, that there were releases and threats of releases of hazardous substances during the time Hercules owned or operated the Site, which caused the United States to incur response costs. This is sufficient to establish Hercules’ liability under CERCLA for response costs. However, it does not resolve the issue of liability completely. Hercules can "escape joint and several liability" if it can demonstrate that the harm incurred at the Site is divisible. United States v. Alcan Aluminum Corp., 315 F.3d 179, 185 (2d Cir.2003). The universal starting point for divisibility of harm analyses in CERCLA cases is the Restatement (Second) of Torts, which provides for the apportionment of damages among two or more 36a parties when at least one is able to show either (1) "distinct harms" or (2) a "reasonable basis for determining the contribution of each cause to a single harm." Restatement (Second) of Torts § 433A (1965). Vertac XI, at 717. Section 433A of the Restatement (Second) of Torts entitled "Apportionment of Harm to Causes," provides as follows: (1) Damages for harm are to be apportioned among two or more causes where (a) there are distinct harms, or (b) there is a reasonable basis for determining the contribution of each cause to a single harm. In other words, the defendant must prove that "there is a way to determine what portion of the harm (i.e. the hazardous substances present at the facility and the response costs incurred in dealing with them) is fairly attributable to the defendant as opposed to other responsible parties." United States v. Manzo, 279 F.Supp.2d 558, 562 (D.N.J.2003) (quoting United States v. Rohm & Haas Co., 2 F.3d 1265, 1280 (3d Cir.1993)). "Distinct harms' are 'those that may properly be regarded as separate injuries." Vertac XT at 717. The burden is on Hercules to establish that there is a reasonable basis for divisibility of harm. That burden is substantial. United States v. Alcan Aluminum Corp., 315 F.3d 179, 185 (2d Cir.2003). The evidence in support of divisibility "must be concrete and specific." Vertac X7 at 718. "[T]he question whether there is a reasonable basis for apportionment depends on whether there is_ sufficient evidence from which the court can determine the amount of harm caused by each defendant." /n the Matter of Bell Petroleum Svcs., Inc., 3 F.3d 889, 903 (Sth Cir.1993)(Bell Petroleum). "{W)here causation is unclear, divisibility is not 37a an opportunity for courts to 'split the difference’ in an attempt to achieve equity."* /d. A court should not settle on a compromise amount that it believes approximates the relative responsibility of the parties. If in doubt, the court should impose joint and several liability. United States v. Township of Brighton, 153 F.3d 307, 319 (6th Cir.1998). ANALYSIS Hercules advances several arguments in support of its divisibility defense. It advances a type of "geographical apportionment” theory, that is, that the harm at the Site is divisible on the basis of operable units.'? Each operable unit should be considered, according to Hercules, a separate "site." As to these different areas, Hercules argues that it is liable only for the harm that it caused. Different approaches are used, depending on the area. Thus, with regard to the incineration of the drummed wastes, Operable Unit | (plant equipment) ("OU-1") and the Jacksonville and Rogers Road landfills, Hercules contends that it has no liability. As to the remaining sites, Hercules admits that it has some responsibility for contamination of on site soils and groundwater and the Off-Site Areas. It argues, however, that the Court should apply a volumetrics approach for dividing the harm. EPA and Uniroyal assert that Hercules cannot establish that the harm is divisible because of the extensive cross- is Operable unit means a discrete action that comprises an mcremental step toward comprehensively addressing site problems. This discrete portion of a remedial response manages migration, or eliminates or mitigates a release, threat of a release, or pathway of exposure. The cleanup of a site can be divided into a number of operable units, depending on the complexity of the problems associated with the site. Operable units may address geographical portions of a site, specific site probiems, or initial phases of an action, or may consist of any set of actions performed over time or any actions that are concurrent but located in different parts of a site. 40 C.F.R. § 300.5. 38a contamination and commingling of dioxin and other hazardous substances throughout all areas of the Site. They note that Hercules' operations and extensive waste disposals at the Plant and on other areas of the Site from 1961 to 1971 contributed massive amounts of dioxin and other hazardous substances to the Site. Furthermore, Hercules also owned the Plant during the first five years of Transvaal/Vertac's operations there, and it is therefore legally responsible under CERCLA for Vertac's waste disposals during the period from 1971-1976. The EPA divided the Site into separate operable units for purposes of facilitating the remediation. The attempt to apportion the harm based on operable units was rejected by the court in United States v. Manzo, 279 F.Supp.2d 558, 574 (D.N.J.2003). "An operable unit is ‘a discrete action that comprises an incremental step toward comprehensively addressing site problems.’ 40 C.F.R. § 300.5. It is not a site, although it ‘may address geographical portions of a site." Furthermore, in Manzo as here, the operable units did not solely address geographical portions of the Site.” The Court is not persuaded that EPA's selection of remedial actions alone is a basis for dividing the harm. See Washington v. United States, 922 F.Supp. 421, 428 (W.D.Wash.1996)(EPA's selection of remedial actions provides no basis for apportioning harm) The Court will proceed to address the arguments raised by Hercules, and determine whether there is a basis to divide the harm in each of the areas. Drummed Wastes 20 Randal Maud, Hercules’ expert in environmental remediation and Project Manager at the Site, testified that the Site was divided into “logical areas of study." At first Operable Unit 1 was all engineering structures above the land surface and Operable Unit 2 was everything at land surface and below. Ground water was spun off into a separate operable unit for administrative purposes. 2001 Tr. at 2068-69. 39a As discussed above, when EPA arrived at the Site after Vertac abandoned in it found over 28,000 drums of waste stored on the Site. The drummed wastes were incinerated as part of a series of continuing removal actions that the State of Arkansas and the EPA began in 1987. There is no dispute that the 2,4-D waste drums were accumulated on the Site beginning in late 1979, at least three years after Hercules had sold the plant site to Vertac. Had the drums merely contained identifiable 2,4-D wastes, the Court might find that Hercules’ divisibility of harm argument had merit. But, because they contained other hazardous substances which were produced while Hercules owned the plant, Hercules must demonstrate a basis for finding the harm divisible. Hercules makes several arguments to support its contention that it is not liable for the incineration of the drummed wastes. It has consistently contended that the approximately 25,000 drums of 2,4-D waste and approximately 3,000 drums of 2,4,5-T still bottoms left behind when Vertac abandoned the Site on January 31, 1987, were each "distinct" harms, to which Hercules did not cause EPA's response costs. Dioxin was found in the drums. The United States posits two sources of contamination of the 2,4-D drums with TCDD, TCDF,2,4,5-T and 2,4,5-TP One is the cross-contamination from the equipment, especially equipment used in both the production of 2,4-D and 2,4,5-T. The second source is the contaminated soil, trash, debris and other materials placed into the drums during the multiple overpackings. The soil could have been contaminated with dioxin produced during Hercules’ operation of the plant. No one can say that the dioxin in the "D" drums did not come from Hercules. Despite Hercules’ contention that the drums didn't leak, there is ample evidence to show that the drums of 2,4,5-T still bottoms did leak on the ground when Hercules owned the 40a plant.” The on-site soils, especially, in the process area, contained hazardous chemicals.” The soil was contaminated with wastes generated by Hercules and Vertac. The drummed wastes stored on site leaked at one time or another and had to be overpacked. During overpacking, the chemical material that had leaked out on to the soil would be scooped up and put into the overpacked drum. Thus, the D-drums most likely contained soil contaminated by Hercules’ operations which had been scooped up when the corroding drums were overpacked. Hercules argues that it could not have caused the waste to be contaminated through the production process or through the placement of contaminated dirt into the drums at a later date. With regard to the production process, Hercules argues that it thoroughly cleaned out the production vessels in 1970, while looking for a buyer or lessee. The same equipment was used to produce 2,4,-D and 2,4,5-T. Testimony at the hearing revealed that the cleanup of the equipment was not as thorough as portrayed by Hercules, and that the plant equipment was cross-contaminated with 2,4-D, 2,4,5-T and dioxin.” Hercules also relies on a "flushing theory,” i.e., that the thousands of batches of material Vertac ran through the production vessels would have thoroughly flushed the dioxin from the vessels to the point when it would be virtually non- existent.2* Thus, there should not have been, according to 7! Robert Fisher, a chemist with Hercules and Vertac, and one of the persons considered most knowledgeable about Hercules’ operations, testified that the deterioration of the T drums was one of the major sources of dioxin contamination at the Site. 2001 Tr. at 907. *? See e.g. Remedial Investigation and Feasibility Study for OU-2. > See discussion of clean-up of OU-1, infra. ** According to the "flushing theory,” if one makes a batch of 2,4,5-T and leaves 10% of the 2,4,5-T in the process vessel, each subsequent batch of 4la Hercules, any residual contamination in the 2,4-D drums which were generated and stored by Vertac between the fall of 1979 and 1986. Hercules' flushing theory remains just that--a theory. It has not been subjected to scientific testing and validation. Rather the evidence basically disproves the theory. After nearly eight years of only 2,4-D production, dioxin and 2,4,5- T were present in the plant equipment. Hercules contends that the presence of dioxin in the 2,4- D waste drums did not influence the decision to incinerate. Hercules points to testimony by Dr. Phyllis Moore, Director of the ADPC & E, who made the initial decision to incinerate the drums, that the presence of dirt in the drums did not influence the decision to incinerate.” Hercules further argues that the placement of contaminated dirt into the drums would constitute a separate "disposal" of hazardous substances under CERCLA. Additionally, the redrumming efforts took place after August, 1976, when Hercules sold the plant to Vertac and therefore Hercules had nothing to do with the redrumming efforts. None of these arguments withstand scrutiny. A number of witnesses, particularly from the State, testified about the rationale for incineration. There was no doubt that the drummed wastes presented a hazard to the area. EPA and the State of Arkansas were concerned that because of the manner in which the drums were stored, the risk of fire and explosion, as well as the possibility of tornadoes, could spread the dioxin into the environment. Additionally, witnesses testified that because time was of the essence, testing a large number of the 2,4-D made would reduce the amount of 2,4,5-T in the product such that in the period of time from 1971 to 1979 there would be less than one molecule remaining in any initial residual] material. 2001 Tr. at 366-367. *> Dr. Moore testified that the issue of "dirt" did not influence the decision. 2001 Tr. at 279. However, she stated that ine major concern with the drums was the presence of dioxin. 2001 Tr. at 282. 42a drums to determine whether dioxin was present would have been costly and time-consuming.” It was not, as Hercules argues, the dirt in the drums that drove the incineration; rather it was the dioxin in the dirt that drove the incineration of the drums. Hercules also attacks the validity of the tests. The Court is not in a position to discredit the testing procedures or results. Witnesses from all parties maintained different positions with regard to the testing results. The Court cannot find as a matter of law that certain test results were not reliable. Hercules advances other innovative arguments to support its contention that it did not cause some of the drums to be contaminated with dioxin. One of these is that the placement of the dirt into the drums is in itself a separate disposal. "Disposal" under CERCLA has the same meaning as "disposal" under the Solid Waste Disposal Act. 42 U.S.C. § 9601(29) The Solid Waste Disposal Act defines " "disposal" as the discharge, deposit, injection, dumping, spilling, leaking, or placing of any solid waste or hazardous waste into or on any land or water so that such solid waste or hazardous ' waste or any constituent thereof may enter the environment or be emitted into the air or discharged into any waters, including ground waters." 42 U.S.C. § 6903(3). Hercules "disposed of" hazardous substances because it placed those hazardous substances in a manner that allowed them to enter the environment. Attempts to further subdivide actions in an attempt to escape liability borders on the absurd. Hercules also argues that it is relieved of liability under the doctrine of "superseding cause." Restatement (Second) of Torts, § 440. Comment b. It points to a sumber of actions taken which would relieve it of responsibility. 6 See e.g. 2001 Tr. at 542, 1787. 43a The Court cannot find that "superseding cause" is a basis for divisibility. The Restatement must be followed "only to the extent that it is compatible with the provisions of CERCLA." 247 F.3d at 717. Recognizing a "superseding cause" theory in this situation "would not be compatible" with the strict liability provisions of CERCLA. Even assuming the theory is applicable in CERCLA cases, it is not applicable here. The mere fact that other causes intervene between the original act of negligence and the injury for which recovery is sought is not sufficient to relieve the original actor of liability, if the injury is the natural and probable consequence of the original negligent act or omission and is such as might reasonably have been foreseen as probable. Butler v. Arkansas Power & Light Co., 186 Ark. 611, 54 S.W.2d 984 [(1932)]; Arkansas Power & Light Co. v. Marsh [195 Ark. 1135, 115 S.W.2d 825 (1938) ], supra; Hayes v. Missouri Pac. R.R. Co., 208 Ark. 370, 186 S.W.2d 780 (1945). The original act or omission is not eliminated as a proximate cause by an intervening cause unless the latter is of itself sufficient to stand as the cause of the injury. Butler v. Arkansas Power & Light Co., supra; Arkansas Power & Light Co. v. Marsh, supra. The intervening cause must be such that the injury would not have been suffered except for the act, conduct or effect of the intervening agent totally independent of the acts or omissicn constituting the primary negligence. Pollard v. Union Pacific R. Co., 75 Ark.App. 75, 79, 54 S.W.3d 559, 562-63 (Ark.App.2001) Here, the Court cannot find that the harms associated with the drummed wastes, i.e., the contamination, would not have occurred except for the totally independent acts of EPA, the State of Arkansas, or Vertac. 44a "Moreover, the intervening act or omission of a third person is not a superseding cause when the original actor's negligent conduct is a substantial factor in bringing about an injury, if the actor, at the time of his negligent conduct, realized that a third person might so act or if the intervening act is a normal response to a situation created by the actor's conduct and the manner in which it is done is not extraordinarily negligent." Ouachita Wilderness Institute, Inc. v. Mergen, 329 Ark. 405, 415, 947 S.W.2d 780, 785 (Ark.1997). There is no evidence that any action of any other person or entity was "extraordinarily negligent" so as to relieve Hercules of liability. Hercules has not demonstrated that the drums did not contain any hazardous substances that Hercules produced. Hercules cannot show that any of those hazardous substances in the drums that were attributable to Hercules can be distinguished from the hazardous substances in the drums that were attributable to Vertac. There is evidence of cross contamination of equipment. Vertac and Hercules used the same equipment to make 2,4,-D and 2,4,5-T. Subsequent years of only 2,4,-D production did not rid the equipment of dioxin. Dioxin was present in the soils; contaminated soil was placed in the D-drums when they were overpacked. The soil, dust, shredded pallets, shredded trash and the process areas were permeated with TCDD, TCDF, 2,4-D, 2,4,5-T, 2,4,5-TP, chlorinated benzenes and other hazardous wastes. The drum overpacking process therefore added TCDD, TCDF and other hazardous substances into the 2,4-D waste drums. The inner drums continued to corrode, combining the contents of the inner drums with those used in the overpacking. Hercules cannot establish that it was not responsible for the dioxin in the soil which was ultimately placed in the drums. Even Hercules’ expert witnesses, Robert Fisher and Douglas Keilman, both of whom worked for Hercules could not say that the source of the dioxin in the "D" drums did not 45a come from Hercules.”’ The Court finds that Hercules has not provided any concrete and specific evidence that the hazardous substances in the drums were "distinct" such that Hercules should not be held responsible for the costs incurred with the incineration of the drummed wastes. OU-1 (Above Ground Media) Hercules argues that the Court must look to the remedies chosen and the situations which created the need for those remedies to determine whether the harm is divisible with respect to OU-1. Hercules divies up OU-1, declaring that it is responsible for some harm but not for other.”® That is, the several different media should be characterized as "distinct" environmental harms. Hercules contends that it cannot be held responsible for hazardous materials in the tanks, vessels and equipment. It claims that it removed all of its hazardous wastes when it completely disassembled and cleaned out all the plant equipment in 1971. Testimony at the hearing revealed that the cleanup of the equipment was not as thorough as portrayed by Hercules, and that all hazardous wastes were not removed.”” Furthermore, that Hercules cleaned the plant in 1971 is irrelevant, because Hercules is liable as an owner while it leased the plant to Transvaal. As an owner, it is responsible for the contamination attributable to Transvaal's operations. See Nurad, Inc. v. William E. Hooper & Sons Co., 966 F.2d 77 2001 Tr. at 907-908. See also testimony of Steven Quigley, an expert in environmental engineering for Uniroyal, who opined that there is no way to identify the source of the 2,3,7,8-TCDD in the D drums. 2001 Tr. at 1940. *5 it accepts responsibility for the costs related to the spent carbon. *? See testimony of Reedie Ray, a former Hercules plant worker who was involved in the plant cleaning process. 2001 Tr. at 1369. 46a 837, 846 (4th Cir.1992) cert. denied sub nom., Mumaw y. Nurad, Inc., 506 U.S. 940 (1992)(§ 9607(a)(2) imposes liability on owner of facility at time disposal of hazardous waste); United States v. R.W. Meyer, Inc., 889 F.2d 1497, 1507 (6th Cir.1989), cert. denied, 494 U.S. 1057 (1990). In addition to its argument concerning the 1971 plant cleanup, Hercules relies on its "flushing theory" to establish that the hazardous substances found in the equipment were not its own. As discussed above, the theory is not valid. That 2,4,5-T and dioxin were found in the equipment after 8 years of just 2,4-D production disproves Hercules' theory. Similarly, Hercules cannot establish that it was not the source of the contamination on the shredded trash and pallets. The pallets, which were used to store drummed wastes at the site, became contaminated with the 2,4,5-T, 2,4- D and dioxin leaked from the drums.° The pallets also became contaminated because they were in contact with the contaminated soil. Hercules also contaminated the buildings. Dioxin was found in leachate from the buildings.*’ Wipe samples from the buildings in OU-1 revealed reportable quantities of dioxin. Dioxin was found in storage vessels.” The 1974 Sputnik eruption contaminated nearby buildings. Hercules contends that the threat posed by the plant buildings was the threat of collapse, as well as asbestos contained in some building materials. Hercules argues that it did not cause these threats. Vertac, in abandoning the plant and letting it fall into disrepair, was responsible for the possibility of building collapse. The United States was responsible for asbestos being in the buildings when it built 3° See exhibit 1149. 319001 Tr. at 1771. 32 See Exhibits 1149 and 1150. ; 47a them to house the Arkansas Ordnance Plant. Hercules is wrong. Asbestos was not the cause for the remediation. The buildings were demolished because the risk of collapse might cause release and human exposure to herbicide process contamination, including unacceptable levels of TCDD. In sum, Hercules has not presented evidence to demonstrate that it was not the source of the 2,4,5-T and dioxin in the above-ground media, and therefore it is responsible for the costs incurred with regard to OU-1. OU-2 (Soils, Foundations and Underground Utilities) Hercules argues that the harm at OU-2 can be characterized as "successive." Hercules contends that the principles of Bell Petroleum apply with regard to OU-2. According to Hercules, dioxin, a single harm, drove the remedy. Synergistic effects, relative toxicity or differential migratory potential are not factors. The contribution of each harm can be reasonably estimated based on the production volume of 2,4,5-T and 2,4,5-TP. Hercules would apportion harm based on the production records of the 2,4,5-T and 2,4,5- TP that Hercules and Vertac produced during the years each of them owned the plant. According to the OU-2 Record of Decision ("ROD"), extensive dioxin contamination was found in soils in the blowout area, the east drum storage area, around and to the east of the broiler house, in the area of the existing and former chlorination plants, and around the maintenance area. Other contaminants of concern such as_ chlorophehols, chlorobenzenes and chlorophenoxyacids were also found throughout the Site soils, in relative concentrations paralleling dioxin concentrations.” "Where, as in this case, hazardous substances are * See ROD for OU# 2, Exhibit 6815, p. 30-35. 48a commingled, a defendant cannot rely on merely volumetric evidence. Evidence must be produced ‘disclosing the individual and interactive qualities of the substances deposited’ at the Site." United States v. Vertac, 966 F.Supp. 1491, 1504 (E.D.Ark.1997) (quoting United States v. Monsanto Co., 858 F.2d 160, 172 (4th Cir.1988), cert. denied, 490 U.S. 1106 (1989)). Additionally, proof of "relative toxicity, migratory potential, degree of migration and synergistic capacity” of the hazardous substances at the Site is relevant to the divisibility of harm inquiry. United States v. Alcan Aluminum Corp., 315 F.3d 179, 186 (2d Cir.2003) (citation omitted) "[T]he volume of waste of a particular generator is not an accurate predictor of the risk associated with the waste because the toxicity or migratory potential of a particular hazardous substance generally varies independently of the volume ..." United States v. Chem-Dyne Corp. 572 F.Supp. 802, 811 (S.D.Ohio 1983). EPA contends that the Hercules has failed co present accurate production records. Hercules counters that exact numbers are not necessary; estimates suffice if they form a reasonable basis for apportioning the harm. "If the expert testimony and other evidence establishes a factual basis for making a reasonable estimate that will fairly apportion liability, joint and several liability should not be imposed in the absence of exceptional circumstances." Bell Petroleum, 3 F.3d at 903. EPA asserts that Hercules’ reliance on sales records does not establish a reasonable basis for dividing the harm. Estimates of production were made because some of the production records were lost. Unlike the pure volumetric approach in Bell, the sales records fail. to adequately account for all the production. They do not account for product made and not sold, off-spec material disposed of at the Site, or for operational and waste disposal differences. The volumetric approach presupposes that leaks and spills took place at roughly the same amount and same 49a frequency and severity during the production of 2,4,5-T and 2,4,5-TP. Douglas Keilman, Hercules' project manager involved in the remediation and an expert witness for Hercules, conceded that in order to use volumetric evidence, he had to assume that the release of hazardous substances was constant over time.’ If that assumption is correct, then, according to Hercules, the amount of dioxin contributed to the soils would be roughly proportionate to the production volume. Based on its calculations, Hercules contends that it is responsible for 70.74% of EPA's response costs for OU-2. The evidence, however, does not support the assumption on which Hercules relies. There is no way to quantify the releases of wastes at the Site with production volumes, and there was not a constant ratio or direct correlation between the two. Leaks and spills occurred regularly during the years Hercules owned the Site. Production methods differed over the years, resulting in differences in the amount of waste generated. Until 1966, Hercules operated a blower or dryer at the acid plant that spewed dioxin-bearing flaked acid material around the Site. Thus, according to EPA, more TCDD would have been in the waste than in the product after Hercules installed the toluene wash process. The DOD changed the specifications for the formulation of Agent Orange during the tume it was produced, precluding the assumption that the ratio of waste to production volume remained constant. The concentration of active ingredients in the DOD product was different than that in the commercial product. Additionally, waste disposal methods differed, with some methods producing more contamination than others.”° * 2001 Tr. at 1323-24. > For example, Hercules used a “tee-pee” burner to dispose of its filter paper and cardboard drums that were contaminated with hazardous substances. The tee-pee burner was essentially a device for open burning It was a large metal structure with a screen on the top, about 30 to 40 feet tall. 2001 Tr. at 143, 740 The filter paper was coated with 2,4,5- T, 2,4- D, as well as other chlorinated hydrocarbons. 2001T~. at. 345-46. The cardboard drums contained TCB, a chlorinated hydrocarbon which may 50a The sputnik eruptions reveal the difficulty in relying on volumetrics as a basis for divisibility of harm, and point to the conclusion that production is not directly correlated to the release of waste. The evidence reveals that there were as many as twenty sputnik eruptions at the Site while Hercules owned the plant, and another ten when it leased the plant to Transvaal. The eruptions spread dioxin over the Site and Off- Site areas. The worst eruption occurred in 1974 when Transvaal leased the Site from Hercules.*° Here there were differences in the operations, as well as the generation and disposal of wastes, making this situation unlike that in Bell Petroleum, where there was only one media and one manner of disposal. There is no evidence in this case that the generation of waste was proportional to the production of product. The manufacturing process at the Site yielded hazardous substances other than dioxin. Hercules has provided no evidence regarding the effect of these other substances on the migration or transport of dioxin. It has presented no evidence regarding the relationship between the volume of dioxin or other hazardous substances generated, the release of dioxin or other hazardous substances, and the harm at the Site. Hercules did not present evidence of the relative toxicity, migratory potential and degree of migration, and synergistic effects or capacities of the various hazardous substances deposited at the Site. It contends they are irrelevant as the decision to remediate was based solely on dioxin. Thus, these factors did not come into play in the selection and implementation of remedies. produce dioxins when burned. The release of hazardous substances into the air resulting from the burning may have caused an unknown amount of dioxin contamination at the Site. Vertac did not burn any wastes on the Site. *© 2001 Tr. at 885. The most serious process upset was the 1974 spumik eruption in terms of generation of dioxin. Sla Hercules' argument essentially places the burden on EPA to prove it considered the "synergistic effects" and that its failure to include mention of it in the ROD means that there is no need for Hercules to present evidence. While EPA may not have referred to synergistic effects of various contaminants, it did consider the various hazardous substances present at the Site, not relying solely on dioxin. As the court cautioned in Monsanto, "[{vjolumetric contributions provide a reasonable basis of apportioning liability only if it can be reasonably assume, or it has been demonstrated, that independent factors had no substantial effect on the harm to the environment." United States v. Monsanto Co. 858 F.2d 160, 173 n. 27 = (4th Cir.1988)(emphasis added). Hercules has not demonstrated that independent factors had no substantial effect on the harm. For example, according to the testimony at the hearing, the half-life of dioxin is affected by different conditions.’ Hercules did not present any evidence as to the rate the dioxin broke down at the Site and Off-Site areas based on photolysis, dissipation and other factors. It did not present any evidence of possible synergistic effects of the combinations of dioxin with other toxic materials, such as 2,4-D and 2,4,5-T. In sum, the Court finds that Hercules has not established a basis to divide the harm at OU-2. Off-Site Areas The Off-Site areas include soils, the floodplains ard stream sediments of Rocky Branch Creek and Bayou Meto, sanitary sewer lines, and two municipal sewer plants and their structures. Hercules posits that the Off-Site environmental harm can be characterized as "successive." As with OU-2, Hercules states that because the remedy was based entirely on the presence of dioxin, the synergistic effects, relative toxicity, and differential migratory potential were not factors. >” 9001 Tr. at 1195. 52a Hercules argues that the production volumes of Hercules and Vertac for 2,4,5-T and 2,4,5-TP are a basis to find divisibility of harm. Hercules further contends that because Hercules and Vertac never owned or operated these off-site areas, their respective liabilities can only be as an "arranger." That Hercules did not own the off-site areas does not mean that it can only be held liable as an "arranger." CERCLA defines "facility" broadly to include: (A) any building, structure, installation, equipment, pipe or pipeline (including any pipe into a sewer or publicly owned treatment works), well, pit, pond, lagoon, impoundment, ditch, landfill, storage container, motor vehicle, rolling stock, or aircraft, or (B) any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located; but does not include any consumer product in consumer use or any vessel. 42 U.S.C. § 9601(9). The Plant Site and Off-Site areas are not distinct facilities, but are one facility for purposes of liability under CERCLA.. The definition of facility "applies rot only to traditional waste sites ... but also to any ‘area’ in and around which hazardous substances have ‘come to be located ... '™ Axel Johnson, Inc. v. Carroll Carolina Oil Co., Inc. 191 F.3d 409, 417 (4th Cir. 1999) (citations and internal quotations omitted). The Tenth Circuit recently reviewed how federal courts have interpreted "facility" under CERCLA, finding that the circuits that have applied the defined term "facility" have done so with a broad brush. See Uniroyal Chem. Co., 160 F.3d at 245 (applying broad definition of facility in an action under § 107 and stating "[{i]Jn examining the contours of § 9601(9), it is apparent that facility is defined in the broadest possible terms, encompassing far more than 53a traditional waste sites. It expressly includes buildings, pipelines, motor vehicles, rolling stock, wells, and aircraft. 42 U.S.C. § 9601(9)(A).") (emphasis supplied); United States v. Rohm and Haas Co., 2 F.3d 1265, 1279 (3d Cir.1993) (examining liability under § 107 and noting "we think it evident from the broad statutory definition of ‘facility’ that Congress did not intend EPA to be straight-jacketed in this manner in _ situations involving a_ release’ transcending property boundaries"); 3550 Stevens Creek Assocs. v. Barclays Bank of Cal., 915 F.2d 1355, 1360 n. 10 (9th Cir.1990) (determining liability under § 107 and noting broad construction of the term "facility," "such that in order to show that an area is a '‘facility,' the plaintiff need only show that a hazardous substance under CERCLA is placed there or has otherwise come to be located there") (internal citations omitted); New York v. Shore Realty Corp., 759. F.2d 1032, 1043 n. 15 (2d Cir.1985) ("CERCLA defines the term ‘facility’ broadly to include any property at which hazardous substances have come to be located"); see also Quaker State Minit-Lube, Inc. v. Fireman's Fund Ins. Co., 52 F.3d 1522, 1525 (10th Cir.1995) (In a § 9607 action, "[t]he EPA designated the Ekotek Site [consisting of three surface impoundments, piles and pits of waste material, underground tanks, and an underground drain field] a CERCLA facility pursuant to 42 U.S.C. § 9601(9) because of contamination by hazardous substances.") (emphasis Supplied). In a § 107 action, the Fourth Circuit noted that simply because "a property could be divided [into multiple facilities] does not, however, mean that it must be so divided for CERCLA purposes." Axel Johnson, Inc. v. Carroll Carolina Oil Co., 191 F.3d 54a 409, 418 (4th Cir.1999). There, the hazardous substances were not located only in the storage tanks and their associated spill areas; rather, they were located throughout the property. The court, after noting the "untenability of the contention that anything that could be designated as a separate facility must be so designated," applied the broad definition of facility, and noted that "[nJo court has held ... that any area that could qualify as a facility under the definition must be considered a separate facility." Jd. at 417-18 (emphasis supplied); see also Tyson, 299 F.Supp.2d at 709 (treating plant or "an area [that] is managed as a whole ... [as] a single facility for CERCLA purposes"). We recognize that in a § 107 action, the hazardous substances may have contaminated large parts of a plant, while initially being emitted from only one tank. See Axel Johnson, 191 F.3d at 417. However, the underlying purpose of § 103, that is, the alerting of government officials of a potential hazardous substance release that may require federal and local government response assistance, is best served through treating the Dorman Farm as a single facility. Solely owned by Seaboard, it is managed and operated as one facility, with one particular site purpose (producing swine products). See also Akzo Coatings, Inc. v. Aigner Corp., 960 F.Supp. 1354, 1359 (N.D.Ind.1996) (rejecting the argument that each contamination source is a separate facility because such argument "could have disastrous consequences, for ultimately every separate instance of contamination, down to each separate barrel of hazardous waste, could feasibly be construed to constitute a separate CERCLA facility"), aff'd in part, vacated in part by, 197 F.3d 302 (7th Cir.1999); Quaker State Minit-Lube, 52 F.3d at ~~ 55a 1525 (10th Cir.1995) (entire site, which consisted of surface impoundments, piles and pits of waste material, underground tanks, and an underground drain field considered a facility for § 9607); Cytec Indus. v. B.F. Goodrich Co., 232 F.Supp.2d 821, 836 (S.D.Ohio 2002) ("This court concludes t [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_1925%3A1. Public record. Not legal advice.