Petition for Writ of Certiorari — Teck Cominco Metals, Ltd. v. Pakoototas (No. 06-1188)

Supreme Court, U.S.

pLey

96118355227 2007

NOMFFICE OF THE CLERK

IN THE

Suprene Court of the United States

TECK COMINCO METALS. LTD..

Petitioner.

Y.

JOSEPH A. PAKOOTAS. DONALD R. MICHEL.

AND STATE OF WASHINGTON,

Respondents.

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

PETITION FOR A WRIT OF CERTIORARI

THOMAS A. CAMPBELI THLODORE B. OLSON

KEVIN M. FONG Counsel of Record

GFRALD F. GEORGE RAYMOND B. LUDWISZLEWSKI

PILLSBURY WINTHROP MARK A. PERRY

SHAW PITTMAN LLP Matruew D. MCGILL

SO Fremont Street GIBSON, DUNN & CRUTCHER LLP

San Francisco. CA 94104 1050 Connecticut Avenue, N.W.

(415) 983-1000 Washington. D.C. 20036

(202) 955-8500

Counsel for Petitioner

QUESTIONS PRESENTED

The Comprehensive Environmental Response,

Compensation, and Liability Act (CERCLA) makes liable

“any person who ... arrange[s] for disposal . . . of hazardous

substances . . . by any other party or entity, at any facility .. .

from which there is a release . . . of a hazardous substance.”

42 U.S.C. § 9607(a)(3)-(4). Petitioner, a Canadian company,

disposed of hazardous substances at its facility in Canada in

accordance with that country’s laws, and without the

assistance of any “other person or entity.” Some of those

substances were carried to the United States by the flow of

surface water. The questions presented are:

1. Whether the Ninth Circuit erred in concluding, in

derogation of numerous treaties and established diplomatic

practice, that CERCLA (and, by extension, other American

environmental laws) can be applied unilaterally to penalize

the actions of a foreign company in a foreign country

undertaken in accordance with that country’s laws; and

2. Whether the Ninth Circuit erred in concluding, in

direct and acknowledged conflict with the First Circuit, that

“arranger” liability under CERCLA does not require the

involvement of any “other party or entity.”

PARTIES TO THE PROCEEDING

AND RULE 29.6 STATEMENT

The caption contains the names of all parties to the pro-

ceeding below.

Pursuant to this Court’s Rule 29.6, undersigned counsel

state that Teck Cominco Metals, Ltd. is a Canadian corpora-

tion; the parent corporation of Teck Cominco Metals, Ltd. is

Teck Cominco Limited, also a Canadian corporation.

TABLE OF CONTENTS

Se NTN caches tanlniescnanigensiinnicouicmaianiamininels

RET siecieriinichiaicaatiniainnsnialciiidadisilibiiaiaiiatiaiaiiaidiaganisadion l

STATUTORY PROVISIONS INVOLVED.........0...00.. eee l

SPS Fa PAE A -suieshsntecsciocannesasianabastapeiensdlimanavaagssbaiamaddndae 2

REASONS FOR GRANTING THE PETITION ................... 9

|. THE NINTH CIRCUIT’S APPLICATION OF U.S.

LAW TO CANADIAN CONDUCT DISREGARDS

CORE PRINCIPLES OF INTERNATIONAL

eI ciscsihensidibiascabebarisaicatie aie tase 9

A. The Decision Below Upsets A Century-

Old Tradition Of Bilateral Solutions To

Transboundary Pollution Problems ................ 10

B. The Decision Below Improperly

Disregards The Presumption Against

Extraterritonial Application Of U.S. Law ....... 12

C. The Decision Below Misconstrues

CERCLA’s Text and Structure....................... 18

D. The Decision Below Threatens To

Disrupt The Foreign Policy Of The

United States........ oe Leet POR NO 21

Il. THE NINTH CIRCUIT’S DECISION CONFLICTS

WITH THE FIRST CIRCUIT’S CONCLUSION

THAT “ARRANGER” LIABILITY REQUIRES

THE INVOLVEMENT OF A THIRD PERSON ............... 25

CEPR I eiiiesistictiwcesciieisaaapsssictncticdilacnnbeacsinanlatesasielel 29

iV

TABLE OF AUTHORITIES

Page(s)

Cases

ABB Indus. Sys., Inc. v. Prime Tech., Inc.,

RG ks | Re ee 20

American Banana Co. v. United Fruit Co.,

Fe Ne I a sacintes dalccsaibncticetentidinecondisinosonspannensices 12

American Cyanamid Co. v. Capuano,

Pe ee titanate cecpcesencinnersarsccen passim

Barclays Bank PLC v. Franchise Tax Bd. of

COR, FA Wrtis AW Ci eniecernceciesnceresecerseserseneens 23

Benz v. Compania Naviera Hidalgo, S.A.,

ee Bae CET inotittchoainctnstibiecnldaceenicdiinainicin 13, 14, 22

Bowen v. Massachusetts, 487 U.S. 879 (1988)..............:200e 12

Cadillac Fairview/California, Inc. v. United

States, 41 F.3d 562 (Sth Cir. 1994) ...........ccccccsssrssseeeerees 26

Carson Harbor Vill., Ltd. v. Unocal Corp.,

ee I iitidcsctcnttcncesuenncnectotnisienainn 20

Chew Heong v. United States,

ee Te EE iak.ahsaunccniveierndanisnadntecsicbnnsenevcieneniestibd 12

Chicago & S. Air Lines, Inc. v. Waterman S.S.

CII FD ic Fe CR vec stcectenscicresssscvrsansiinnes 14, 22

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

Fe Pe La ckhesii i ceiiecsnsctcninssncsnnstnatoni 19

Cooper Indus., Inc. v. Aviall Services, Inc.,

i ee E cnttineiesicorcsinsieicnnctlicsnaneasoncenstcoonitin 4,18

Dedham Water Co. v. Cumberland Farms Dairy,

Inc., 889 F.2d 1146-(1st Cir. 1989) ....2.ccoccrccrcsesssescecseers 19

Vv

EEOC v. Arabian Am. Oil Co.,

Ale BO EET vreccieceanhsnteasiersscesonenseesneie 6, 12, 13, 15

Environmental Def, Fund, Inc. v. Massey,

Pe Ee ae, CO, FIGS) exiceassnntenvcurnasenssceversesnsencss 16

Eulitt v. Maine, 386 F.3d 344 (1st Cir. 2004)... ee. 26

F.. Hoffmann-LaRoche Ltd. v. Empagran S.A.,

PU Ry Ft IE eiticiestitsaiaatentidaicesentianaperamnanian passim

Foley Bros. v. Filardo, 336 U.S. 281 (1949) oo... eeeeeeeeeeees 12

GenCorp, Inc. v. Olin Corp.,

Fe ED Ce CAE, BE cssccniescseccnsrssnerssnssessesintortinss 26

Hartford Fire Ins. Co. v. California,

ee Fe i crnncacsds eins diaeaivicetaivevtsnedorinsion ly Bes

BIOS YF, FAL GB. BB OOD) wsccccscivsecereosncsosesestentavanes 29

McBee v. Delica Co.,

BEF FB TOF LIME, BGO) snstncetcsvcacasercnvrsenesissreceriianes 17

Morton Int'l, Inc. v. A.E. Staley Mfg. Co.,

Ee Ee OF CE Ba rrvvnrctisorarcsccncrensinivsaneiaced 26, 29

Murray v. Schooner Charming Betsy,

EE Oe Rr OO EE hretesesievscscccccrestarsevasoeceareanebna 21

New York v. Shore Realty Corp.,

Fae cd PTE CO SGD) ocicccctnccrsssoccsnciveeneanssoies 18, 19

Pritikin v. Dep’t of Energy,

ee Uk FOE ae BO) ci rtictsctsersitsintevasnpaseainss Pe

Raytheon Constructors Inc. v. Asarco Inc.,

SOS FB TEE4 (IO CW. 2OUF) eccseccrnctnvssciacossncrtasvvnticis 26

Sale v. Haitian Ctrs. Council Inc.,

Fr Gh PND esirnsssinsphaninenpetronnsbancdiactinnse 13, 14, 18

Small v. United States, 544 U.S. 385 (2005)............ 14, 16, 21

Smith v. United States, 507 U.S. 197 (1993)... eee 12, 15

Vi

Steele v. Bulova Watch Co., 344 U.S. 280 (1952) ........0.00.2. 17

United States v. 150 Acres of Land,

ie Fe Gils I crriccenesccescccncninesiésnscesvnsowsneen 20

United States v. Alcan Aluminum Corp.,

et ee I, FIER taesnttinsectncnesscncevcceonoericnecnintn 19

United States v. Atlantic Research Corp.,

I eal tanicacseciesiunctienepesubocengions 28

United States v. Bestfoods, 524 U.S. 51 (1998) ...........e eee 27

United States v. CDMG Realty Co.,

Be civ cncipccevssncevrevenrsinoneetavencns 20

United States v. Cello-Foil Prods., Inc.,

BOD FSS 1227 (GEE Car. T9DG) ..ccccessveresevencevecovcerscososevens 28

United States v. Palmer,

Pe rE PO 0 ROD visiceincesscieinicenisesiscnianenebiion 16

United States v. Temple, 105 U.S. 97 (1881)............... eee 28

United States v. Vertac Corp.,

ce Oe Ny Ci aiiciicissnceesvnssetncoeveineseniaitinvans 26

Vanity Fair Mills Inc. v. T. Eaton Co.,

Be a Ue Tats SE chicaserincansvesesanense Snssnecicrintpetuiniian 17

Rules

SS cee et onan nent EIN et 21

Statutes and Treaties

SENT IIIT ince aclivsdehivisciinievouniicetnensatmounessichainteseaividdinpnaibedl l

Rs III 12sec siidjncnissitco pasting Seeadnoodionoidesstcavinsainonbaioiad 4, 16

Ne I is sini cstedcinesovenvinsnrpnenssciapmisbatuavnieusenbaisaiien 3,5

III STII ica ch cs ic cdugaionemeniardheimadiiobmounaleanionsiinn passim

5 aL , SER eco ae eeR aE MR en Arey 23

ra TEE vicnccacctivtnin vpnciieaneicllnadensensdelebinbverssouiiboniiariaiis 5

Vil

Agreement Between the Government of the

United States of America and the

Government of Canada on Air Quality, U.S.-

oe SS, me 8 Se |) Renee 11

Great Lakes Water Quality Agreement, U.S.-

ee ee LTE Sy eb: Arne 11

North American Free Trade Agreement, Dec. 17,

es cae Ry A icniannicidccilliiatastavendintetencncictisienccsnciebes 12

Treaty Between the United States and Great

Britain Relating to Boundary Waters

Between the United States and Canada, U:S.-

Gr. Brit., Jan. 11, 1909, 36 Stat. 2448 0. 10, 11

United States-Canadian Negotiations on Air

Quality, Pub. L. No. 95-426,

ee OE iia ticcescocnsiapnbsentiessiteeniesisicisnentegpbartansh 12

Other Authorities

D. H. Dinwoodie, The Politics of International

Pollution Control: The Trail Smelter Case,

re BE eT Oo Fe ite titdiiintstndastsnsinseniitcsessnintiinntin 10

Environment Canada, Acid Rain and the facts ..............0+. 9,24

Noah Hall, Bilateral Breakdown: U.S.-Canada

Pollution Disputes, 21-SUM Nat. Resources

Pg ERR IRR Arn oN a RTE 9

Press Release, President Bush Discusses Global

Cipmate Ctramae (Fume €1, 2001 } .wcccccccsreccsvececccassssreestere 22

John E. Read, The Trail Smelter Dispute, | Can.

bf og tM eo: RRR De eet oem mnereneeT Oe 10

Restatement (Third) of the Foreign Relations

Law of the United States (1987)..............ccccsecccsccessereeees 11

Vill

Michaet J. Robinson-Dorn, The Trail Smelter: Is

What's Past Prologue? EPA Blazes a New

Trail For CERCLA, 14.N.Y.U. Envtl. L. J.

BaF CEE sacimnervesscninitihcabiabhanladaididaiadidahdiaracteasnmeenii 9

Douglas J. Steding & A. Russell Flegal, Mercury

Concentrations in Coastal California

Precipitation: Evidence of Local and Trans-

Pacific Fluxes of Mercury to North America,

107 J. Geophysical Res. ACH 11-1 (2002)... 23

Superfund Technical Assessment and Response

Team, Region 10, U.S. EPA, TD: 01-02-

0028, Upper Columbia River Expanded Site

SeNGUCTNE TUAOEE CISD acsccscnvesscncstcnentvsssicescorsisnnesaieiecen 2

PETITION FOR A WRIT OF CERTIORARI

Petitioner Teck Cominco Metals, Ltd. respectfully sub-

mits this petition for a writ of certiorari to review the judg-

ment of the United States Court of Appeals for the Ninth Cir-

cuit.

OPINIONS BELOW

The opinion of the court of appeals (App., infra, la-28a)

is reported at 452 F.3d 1066. The opinion of the district

court (App., infra, 29a-59a) is not officially reported but is

electronically reported at 2004 WL 2578982.

JURISDICTION

The judgment of the court of appeals was entered on

July 3, 2006. A timely petition for rehearing was denied on

October 30, 2006. App., infra, 60a-61a. On January 12, Jus-

tice Kennedy extended the time within which to file a peti-

tion for writ of certiorari to and including February 27, 2007.

No. 06A686. The jurisdiction of this Court is invoked under

28 U.S.C. § 1254(1).

STATUTORY PROVISIONS INVOLVED

Section 107(a) of the Comprehensive Environmental Re-

sponse, Compensation, and Liability Act (CERCLA), 42

U.S.C. § 9607(a) provides in relevant part:

§ 9607. Liability

(a) Covered persons...

(3) any person who by contract, agreement, or otherwise

arranged for disposal or treatment, or arranged with a trans-

porter for transport for disposal or treatment, of hazardous

substances owned or possessed by such person, by any other

party or entity, at any facility or incineration vessel owned or

operated by another party or entity and containing such haz-

ardous substances, and

2

(4) any person who accepts or accepted any hazardous

substances for transport to disposal or treatment facilities,

incineration vessels or sites selected by such person, from

which there is a release, or a threatened release which causes

the incurrence of response costs, of a hazardous substance,

shall be liable... .

Other pertinent provisions of CERCLA are reproduced

in the appendix, infra, at 62a-67a.

STATEMENT

1. Petitioner is a Canadian corporation that owns and

operates a smelting and refining complex in the city of Trail,

which is in the province of British Columbia, in the sover-

eign nation of Canada. The Trail Smelter is located along the

banks of the Upper Columbia River, approximately ten miles

north of Canada’s border with the United States. Today it is

the largest lead-zinc smelter in the world. App., infra, 106a.

For nearly a century after it was built in 1895, waste

generated by the Trail Smelter—known as “slag”-—-was dis-

charged into the Upper Columbia River. Such disposal ac-

tivities were, at all times, conducted in accordance with ap-

plicable laws of Canada and British Columbia—the govern-

mental entities with authority to regulate operations at the

Trail Smelter. During the twentieth century, such disposals

were common among industrial plants sited along the Cana-

dian and American banks of the Upper Columbia River. See

App., infra, 71a (“Sources [of pollution in the Upper Colum-

bia River] ... include releases from mining and milling op-

erations, fertilizer production, smelting operations, pulp and

paper production, sewage treatment plants, and other indus-

trial activities”).

The Trail Smelter stopped discharging slag directly into

the river in 1995. See Superfund Technical Assessment and

Response Team, Region 10, U.S. EPA, TD: 01-02-0028, Up-

per Columbia River Expanded Site Inspection Report 2-13

(2003) (“2003 Report’).

3

Residents of Washington State have periodically com-

plained of pollution emanating from the Trail Smelter. In the

1920s, for example, air currents regularly carried sulfur diox-

ide emissions from the Trail Smelter south into the United

States, tnggering complaints by the citizens of Northport,

Washington. Those complaints were resolved by diplomatic

negotiations and, eventually, binding arbitration between

governments. See infra at 10-11.

In 1999, the Confederated Tribes of the Colville Indian

Reservation, which is located in Washington State, petitioned

the U.S. Environmental Protection Agency (“EPA”) to con-

duct an assessment of hazardous-substances contamination of

the Upper Columbia River and surrounding lands in north-

eastern Washington. App., infra, 70a. The petition alleged

that the Upper Columbia River had been polluted by Cana-

dian and American smelters, pulp mills, and mining opera-

tions. /d. at 72a. In 2003, EPA issued findings that the U.S.

portion of the Upper Columbia River had been contaminated

by hazardous substances and that slag discharged from the

Trail Smelter, carried downstream by surface water, was the

primary source of that contamination. 2003 Report at 8-2.

In December of 2003, EPA issued a Unilateral Adminis-

trative Order (“UAO”) pursuant to CERCLA § 106(a), 42

U.S.C. § 9606(a) (App. infra, 63a-65a), ordering petitioner—

a Canadian company with no operations in the United

States—to undertake a Remedial Investigation/Feasibility

Study (“RI/FS”) of the portion of the Upper Columbia River

located in the United States. App., infra, 68a-69a. Section

106(a) of CERCLA permits the President to issue “such or-

ders as may be necessary to protect public health and welfare

and the environment” from an “actual or threatened release

of a hazardous substance from a facility.” 42 U.S.C.

§ 9606(a) (App., infra, 63a). EPA concluded that the “Upper

Columbia River Site”’—defined as “the areal extent of con-

tamination in the United States associated with the Upper

Columbia River, and all suitable areas in proximity to the

4

contamination necessary for implementation of response ac-

tion”’—was a CERCLA “facility.” App., infra, 69a, 75a

(emphasis added); see 42 U.S.C. § 9601(9) (defining a “facil-

ity” as “any site or area where a hazardous substance has

been deposited, stored, disposed of, or placed, or otherwise

come to be located”) (App., infra, 62a). EPA further deter-

mined that the “potential migration of hazardous substances

currently located at or emanating from the Site, . . . constitute

actual and/or threatened ‘releases.’” App., infra, 75a; see 42

U.S.C. § 9601(22) (defining “release” as “any spilling, leak-

ing, pumping, pouring, emitting, emptying, discharging, in-

jecting, escaping, leaching, dumping, or disposing into the

environment”) (App., infra, 62a-63a).

The President’s authority to issue investigation or reme-

diation orders under CERCLA § 106(a) properly extends

only to “responsible parties.” See Cooper Indus., Inc. v. Avi-

all Servs., Inc., 543 U.S. 157, 161 (2004). EPA declared pe-

titioner to be a “responsible party” subject to presidential au-

thority under 42 U.S.C. §§ 9604, 9607, and 9622, which lay

out the scope of the President’s authority to order remedial

actions. App., infra, 76a. This legal conclusion was predi-

cated on EPA’s factual finding that petitioner had “arranged

for disposal of its hazardous substances” by discharging slag

“into the Columbia River through several outfalls at the Trail

Smelter,” located in Canada. Id. at 72a.

Soon after the entry of the UAO, the Canadian govern-

ment sent a diplomatic note to the U.S. State Department,

expressing grave concern over EPA’s “attempt[ ] to enforce

... [CERCLA] on Teck Cominco Metals, a Canadian com-

pany operating in Canadian territory.” App., infra, 100a.

The Canadian government warned that “issuance of the Uni-

lateral Administrative Order may . .. caus[e] transboundary

environmental liability cases to be initiated in both Canada

and the United States.” /bid. Canada urged the United States

to withdraw the UAO and to negotiate outside of the coercive

framework of CERCLA toward a “mutually acceptable and

5

enforceable agreement” based on Teck Cominco’s longstand-

ing offer “to undertake an environmental and health risk as-

sessment.” Jd. at 100a-101a.

Petitioner thereafter notified EPA that it would not com-

ply with an order premised on the American President’s

regulatory authority under CERCLA, but reiterated its will-

ingness to enter into an “unequivocal[ ]” and “enforceable”

agreement “to assume voluntarily the costs of investigation

of the alleged contamination from the Trail Smelter, and the

costs of appropriately addressing risks from that contamina-

tion.” App., infra, 103a. EPA never moved to enforce the

UAO and in June 2006, EPA and a U.S.-based affiliate of

Teck Cominco reached a settlement—outside the CERCLA

framework—under which the affiliate would conduct a study

of the Site under EPA’s supervision. /d. at 120a. Pursuant to

that settlement, EPA withdrew the UAO. Jbid.

2. In July 2004, two residents of the Colville Reserva-

tion, Joseph A. Pakootas and Donald R. Michel, brought a

citizen suit against petitioner, seeking to compel petitioner to

comply with the UAO and to impose on petitioner statutory

penalties for its alleged noncompliance. App., infra, 10Sa-

112a; see also 42 U.S.C. § 9659(a) (providing for citizen

suits to enforce “any ... order which has become effective

pursuant to this chapter”) (App., infra, 67a); id. § 9606(b)(1)

(providing for fines of up to $25,000 per day for failure to

comply with “any order of the President under [Section

9606(a)]”) (App., infra, 63a). The State of Washington later

intervened as a plaintiff, filing a complaint in intervention

substantially identical to that filed by Pakootas and Michel.

App., infra, 113a-119a.

The two complaints closely tracked the UAO’s factual

findings and legal conclusions. They alleged that petitioner

disposed of slag “directly into the Columbia River” in Can-

ada, and that some portion of those hazardous substances mi-

grated “downstream into waters of the United States.” App.,

6

infra, 1\07a, 115a. The plaintiffs further alleged that a “sig-

nificant volume” had accumulated on the U.S. side of the

border, and that decay of the slag was releasing hazardous

substances into the U.S. environment. /bid.

Petitioner moved to dismiss the complaints on the

ground, inter alia, that it was not a “responsible party” under

CERCLA § 107(a). Se 42 U.S.C. § 9607(a) (App., infra,

65a). Petitioner argued, first, that in light of the strong pre-

sumption against the extraterritorial application of U.S. law

(e.g., EEOC v. Arabian Am. Oil Co., 499 U.S. 244, 248

(1991) (ARAMCO)), CERCLA should not be construed to

extend to a foreign party operating exclusively in a foreign

country in compliance with that country’s laws. Second, pe-

titioner explained that it could not be liable as an “arranger”

under CERCLA because there was no allegation that any

“other party or entity” participated in the petitioner’s disposal

of waste in Canada.

a. The district court denied the motion to dismiss, con-

cluding that petitioner was a potentially responsible “ar-

ranger” subject to presidential authority under CERCLA.

App., infra, 29a-59a.

The district court acknowledged that, because peti-

tioner’s disposal activities took place only “at [petitioner’s]

‘facility’ in Canada,” App., infra, 51a, its ruling amounted to

an “extraterritorial application of CERCLA.” /d. at 55a. Al-

though the district court could locate “‘no direct evidence that

Congress intended extraterritorial application of CERCLA to

conduct occurring outside the United States,” id. at 57a, it

nevertheless found that “extraterritorial application of

CERCLA is appropriate in this case.” Jd. at 44a. The pre-

sumption against extraterritorial application of U.S. law does

not apply, the court reasoned, whenever “failure to extend the

scope of the statute to a foreign setting will result in adverse

effects within the United States.” Jbid.

The district court also rejected petitioner’s argument that

one cannot be a covered “arranger” unless a third party dis-

poses of the hazardous substances generated by the purported

“arranger.” The district court recognized that “[t]he ‘plain

language’ of § 9607(a)(3) would appear to require another

party, other than just the defendant, be involved in the dis-

posal of the hazardous substances.” Jd. at 47a. Nevertheless,

the district court held that “‘arranger’ liability under

CERCLA cannot be ruled out for [petitioner].” Jd. at 49a.

b. The Ninth Circuit affirmed.! Addressing the pre-

sumption against extraterritorial application of U.S. law, the

Ninth Circuit interposed the “threshold question” of “whether

this case involves a domestic or extraterritorial application of

CERCLA.” App., infra, 12a. Rejecting the view of the dis-

trict court, the Ninth Circuit concluded that the UAO repre-

sented only a “domestic application of CERCLA,” because

“the operative event creating a liability under CERCLA is the

release ... of a hazardous substance,” id. at 19a, and “the

actual or threatened release here, the leaching of hazardous

substances from slag that settled at the [Upper Columbia

River] Site, took place in the United States.” /d. at 2la. The

court of appeals opined that the “location where a party ar-

ranged for disposal or disposed of hazardous substances is

not controlling for purposes of assessing whether CERCLA

is being applied extraterritorially.” /d. at 20a. Accordingly,

the Ninth Circuit did not address petitioner’s argument—

supported by the Governments of Canada and British Co-

lumbia as amici curiae—that the definitions of “covered per-

sons” set out in Section 9607(a) should not be considered to

apply to a foreign entity operating only in a foreign country

in accordance with that country’s laws.

1 As a threshold matter, the court of appeals concluded that EPA’s

June 2006 withdrawal of the UAO had not affected its jurisdiction. App.,

infra, 9a n.10. Whatever effect the withdrawal might have had on re-

spondents’ claims for injunctive and declaratory relief, “Pakootas’s

claims for civil penalties and for attorneys’ fees are not moot.” /bid.

-

8

The Ninth Circuit also rejected petitioner’s argument

that “arranger” liability under Section 9607(a)(3) requires the

involvement of a third party. App., infra, 23a-28a. The

Ninth Circuit declared that the statute “does not make literal

or grammatical sense as written,” and that the phrase “by any

other party or entity” was “ambiguous” and susceptible to

multiple interpretations. /d. at 23a-24a, 26a. The court of

appeals acknowledged that the phrase could be read as modi-

fying the earlier phrase, “disposal or treatment,” such that the

statute would require “any other party or entity”—i.e., some-

one other than the person who “owned or possessed” the haz-

ardous substance—to be involved in the “disposal or treat-

ment.” /d. at 25a. But the court held that “by any other party

or entity” also could be read as expanding the clause imme-

diately preceding it, “owned or possessed by such person.”

This construction “require[d] reading the word ‘or’ into the

provision,” thus “modif[ying]” “[t}]he text of § 9607(a)(3)” to

encompass “‘any person who ... arranged for disposal or

treatment ... of hazardous substances owned or possessed

by such person [or] by any other party or entity ....””

Id. at 24a (emphasis and alteration in original). In electing to

rewrite the statute in this fashion, the Ninth Circuit departed

company from the First Circuit, which had rejected precisely

the textual modification embraced by the Ninth Circuit, and

had concluded that “for arranger liability to attach, the dis-

posal or treatment must be performed by another party or en-

tity.” American Cyanamid Co. v. Capuano, 381 F.3d 6, 24

(1st Cir. 2004); see also App., infra, 25a-26a (rejecting First

Circuit’s conclusion). CERCLA, the Ninth Circuit said, re-

quired “‘‘a liberal judicial interpretation.’” /d. at 26a.

REASONS FOR GRANTING THE PETITION

The Ninth Circuit has decided that American environ-

mental laws can be applied to the activities of a foreign com-

pany in a foreign country in compliance with that country’s

laws. That holding is based on a clear misreading of

CERCLA and departs widely from this Court’s interpretation

of statutes. It also departs from the bilateral diplomacy that

has traditionally marked U.S.-Canadian relations and threat-

ens to disrupt our ties with Canada, a key military and eco-

nomic ally. Moreover, the Ninth Circuit has held that “ar-

ranger’ liability can attach to the unilateral acts of a com-

pany in the absence of any arrangement. In so doing, «the

court of appeals created a direct and acknowledged split with

the First Circuit.

I. THE NINTH CIRCUIT’S APPLICATION OF U.S. LAW

To CANADIAN CONDUCT DISREGARDS CORE

PRINCIPLES OF INTERNATIONAL COMITY

The United States and Canada share a five-thousand-

mile border, including approximately 150 rivers and lakes,

which constitute over 90 percent of North America’s and 20

percent of the world’s fresh surface water. Noah Hall, Bilat-

eral Breakdown: U.S.-Canada Pollution Disputes, 21-SUM

Nat. Res. & Env’t 18, 18 (2006). Both are highly industrial-

ized nations and economic activity in one country will have

an inevitable impact upon the environment of the other. In-

deed, it has been said that “pollution respects no borders.”

Michael J. Robinson-Dorn, The Trail Smelter: Is What's

Past Prologue? EPA Blazes a New Trail For CERCLA, 14

N.Y.U. Envtl. L. J. 233, 235 (2006). That pollution can

travel long distances means that pollution generated in one

nation often will cause effects in another. See, e.g., Envi-

ronment Canada, Acid Rain and the facts, http://www.ec.gc.

ca/acidrain/acidfact.html (last visited Feb. 25, 2007) (noting

that sulfur dioxide emissions from the United States contrib-

ute to “acid rain” conditions in Eastern Canada).

10

A. The Decision Below Upsets A Century-Old

Tradition Of _ Bilateral Solutions To

Transboundary Pollution Problems

Since the Industrial Revolution, the United States and

Canada have resolved their transboundary pollution problems

bilaterally, including government-to-government diplomatic

negotiations and, occasionally, arbitrations between the sov-

ereigns. In the 1909 Boundary Waters Treaty, Great Britain

(on behalf of Canada) and the United States established an

International Joint Commission (“IJC”) and granted it juris-

diction over not only “cases involving the use or obstruction

or diversion” of the navigable waters shared by the two na-

tions, but also “any other questions or matters of difference

arising between them involving the rights . . . of either in re-

lation to the other or to the inhabitants of the other, along the

common frontier.” See Treaty Between the United States and

Great Britain Relating to Boundary Waters Between the

United States and Canada, U.S.-Gr. Bnit., Jan. 11, 1909,

(“1909 Boundary Waters Treaty”), 36 Stat. 2451-52.

In the late 1920s, when sulfur dioxide emissions from

the Trail Smelter—the very same smelter at issue in this

case—were carried by air currents to Northport, Washington,

the United States presented an official complaint to the Gov-

ernment of Canada. See D. H. Dinwoodie, The Politics of

International Pollution Control: The Trail Smelter Case, 27

Int’| J. 219, 221-22 (1971-72). Later that year, the United

States suggested that the dispute be submitted to the IJC cre-

ated by the 1909 Boundary Waters Treaty. See John E. Read,

The Trail Smelter Dispute, 1 Can. Y.B. Int'l L. 213, 214

(1963). In 1932, the IJC recommended an award for dam-

ages, but the United States rejected the award as insufficient.

Dinwoodie, supra, at 227. After two more years of unfruitful

bilateral negotiations, the countries agreed to submit the dis-

pute to binding arbitration before a three-member tribunal.

Read, supra, at 214. The tribunal ultimately affirmed the

IJC’s award of damages. /d. at 214.

1]

The Trail Smelter Case established the now-rudimentary

principle of international environmental law that every nation

“is obligated to take such measures as may be necessary, to

the extent practicable under the circumstances, to ensure that

activities within its jurisdiction or control ... are conducted

so as not to cause significant injury to the environment of

another state ....” Restatement (Third) of the Foreign Rela-

tions Law of the United States § 601(1) (1987); see also 1909

Boundary Waters Treaty, 36 Stat. 2450 (“waters flowing

across the boundary shall not be polluted on either side to the

injury of health or property on the other’). When the inhabi-

tants of one nation do cause injury to the environment of an-

other, the injured nation may seek reparations “either through

diplomatic channels or through any procedure to which the

two states have agreed.” Restatement (Third) of the Foreign

Relations Law of the United States § 902(1) (emphasis

added).

In keeping with these foundational principles of interna-

tional law, the United States and Canada have continued to

search out cooperative solutions to environmental issues of

shared concern. In 1978, confronting the pollution of the

Great Lakes shared by the two nations, the United States and

Canada developed a comprehensive agreement to clean up

and protect those natural resources. See Great Lakes Water

Quality Agreement, U.S.-Can., Nov. 22, 1978, 30 U.S.T.

1383. Later, the United States and Canada entered into an

agreement that specifically provided that disputes between

the United States and Canada on air quality 1ssues should be

handled diplomatically in the first instance, and if intractable,

should be submitted by the sovereigns to binding arbitration.

See Agreement Between the Government of the United States

of America and the Government of Canada on Air Quality,

U.S.-Can., Mar. 13, 1991, 30 I.L.M. 676. And after the rati-

fication of the North American Free Trade Agreement, the

United States, Canada, and Mexico entered into a series of

side agreements that provide for environmental cooperation

12

and, significantly, stipulate procedures by which the coun-

tries can address another nation’s failure to enforce its own

environmental laws. See North American Free Trade

Agreement, Dec. 17, 1992, 32 I.L.M. 289 (pts. 1-3); 32

I.L.M. 605 (pts. 4-8) (entered into force Jan. 1, 1994).

It was against this backdrop of cooperative solutions to

transboundary environmental problems—a backdrop of

which Congress certainly was aware, see United States-

Canadian Negotiations on Air Quality, Pub. L. No. 95-426,

92 Stat. 990 (1978) (recognizing that “the United States and

Canada have a tradition of cooperative resolution of issues of

mutual concern which is nowhere more evident than in the

environmental area”)}—that Congress enacted CERCLA. Cf

Chew Heong v. United States, 112 U.S. 536, 550 (1884)

(“When the act of 1882 was passed, congress was aware of

the obligation this government had recently assumed, by sol-

emn treaty”); see generally Bowen v. Massachusetts, 487

U.S. 879, 896 (1988) (“Congress understands the state of ex-

isting law when it legislates”’).

B. The Decision Below Improperly Disregards

The Presumption Against Extraterritorial

Application Of U.S. Law

This Court has consistently adhered to the “longstanding

principle of American law” that “legislation of Congress,

unless a contrary intent appears, is meant to apply only

within the territorial jurisdiction of the United States.’”

ARAMCO, 499 U.S. at 248 (quoting Foley Bros. v. Filardo,

336 U.S. 281, 285 (1949)). This presumption against extra-

territoriality flows naturally from the “commonsense notion

that Congress generally legislates with domestic concerns in

mind,” Smith v. United States, 507 U.S. 197, 204 n.5 (1993),

and, as this Court explained in ARAMCO, “serves to protect

against unintended clashes between our laws and those of

other nations.” 499 U.S. at 248; see also American Banana

Co. v. United Fruit Co., 213 U.S. 347, 356 (1909) (Holmes,

J.) (explaining that “if [another jurisdiction] should happen to

13

lay hold of the actor, to treat him according to its own no-

tions rather than those of the place where he did the acts, not

only would be unjust, but would be an interference with the

authority of another sovereign, contrary to the comity of na-

tions, which the other state concerned justly might resent”).

This case represents a very real “clash” between the laws

of separate sovereigns. Canada (at the national level) and

British Columbia (at the provincial level) regulate peti-

tioner’s Canadian operations, including discharges from the

Trail Smelter. Those governments have made clear through

both diplomatic and judicial channels that they do not agree

with EPA’s attempt to exercise unilateral authority over peti-

tioner pursuant to CERCLA. See, e.g., Gov’t of Canada C.A.

Br. 3 (“The Government of Canada has a strong interest in

preserving from interference, by private litigation in U.S.

courts, its sovereign right to regulate Canadian persons and

companies operating in Canada”); see also App., infra, 101a.

Only if the statute unequivocally required the exercise of

such authority would the Judiciary be warranted in disregard-

ing the views of our neighbors to the North. Of course it

does not.

To overcome the presumption against extraterritoriality,

the intention of Congress to apply the statute beyond the bor-

ders of the United States must be “clearly expressed.”

ARAMCO, 499 U.S. at 248 (internal quotation omitted). The

“possibility” that Congress anticipated an extraterritorial ap-

plication “is not a substitute for the affirmative evidence of

intended extraterritorial application that our cases require.”

Sale v. Haitian Ctrs. Council, Inc., 509 U.S. 155, 176 (1993);

see also Benz v. Compania Naviera Hidalgo, S.A., 353 U.S.

138, 147 (1957) (holding that Labor Management Relations

Act did not apply to a labor dispute involving a foreign-

flagged ship because Congress had not “clearly expressed”

its “affirmative intention” to reach such conduct). A clear

expression of congressional intent is needed because a deci-

sion to apply U.S. law extraterritorially inevitably reverber-

14

ates through the “delicate field of international relations.”

Benz, 353 U.S. at 147. “The Judiciary has neither aptitude,

facilities nor responsibility” for decisions of this nature.

Chicago & §. Air Lines, Inc. v. Waterman S.S. Corp., 333

U.S. 103, 111 (1948).

A corollary to this requirement of “affirmative evidence”

of congressional intent, see Sale, 509 U.S. at 176, is that

courts must strictly construe statutes in light of the presump-

tion against extraterritoriality. Thus, in Small v. United

States, 544 U.S. 385 (2005), the Court held that a general

term such as “any court” presumptively “refers only to do-

mestic courts, not to foreign courts.” Jd. at 394. And in

F. Hoffmann-LaRoche Ltd. v. Empagran S.A., 542 U.S. 155

(2004), this Court instructed that as long as a “statute’s lan-

guage reasonably permits an interpretation ” that avoids ex-

traterritorial application, a court “should adopt it.” Jd. at 174.

Indeed, even where “the more natural reading of the statutory

language” would permit extraterritorial application of the

statute, courts should reject that construction unless the lan-

guage itself demonstrates that the court “must accept that

reading.” /bid.

1. The Ninth Circuit held that the imposition of liability

on a Canadian corporation for disposal activities undertaken

exclusively in Canada “involves a domestic application of

CERCLA,” and thus that the presumption against extraterri-

toriality did not apply. App., infra, 3a. That conclusion is

incorrect for at least three reasons.

First, the notion that the court of appeals was applying

CERCLA only domestically is bottomed on its deeply flawed

premise that “the operative event creating a liability under

[Section 9607(a)(3) of] CERCLA is the release or threatened

release of a hazardous substance.” App., infra, 19a. Based

on that premise, the Ninth Circuit concluded that “(t]he loca-

tion where a party arranged for disposal or disposed of haz-

ardous substances is not controlling for purposes of assessing

15

whether CERCLA is being applied extraterritorially.” Jd. at

20a. But contrary to the Ninth Circuit’s reasoning, CERCLA

does not create, upon the release of a hazardous substance, “a

liability” in the abstract. Section 9607 of CERCLA—entitled

“Liability’—imposes liability for cleanup costs on “any per-

son” who engages in particular categories of conduct. See 42

U.S.C. § 9607(a) (App., infra, 65a). To be sure, just as there

can be no crime of murder without a death, there can be no

liability under CERCLA without a release. See id.

§ 9607(a)(4). But that a release is necessary for CERCLA

liability, or a death necessary for murder liability, hardly

makes either sufficient to establish that liability. Liability

under CERCLA is triggered only by the conduct described in

Section 9607(a)—which, in this case, occurred entirely in

Canada.

Second, and relatedly, this Court often enough has rec-

ognized that the canon against extraterritorial application of

U.S. law applies whenever the statute purports to proscribe

conduct outside of the United States. See Smith, 507 U.S. at

203-04 (applying canon to hold that Federal Tort Claims Act

does not apply to claims arising in Antarctica); ARAMCO,

499 U.S. at 249-51 (applying canon to hold that Title VII of

the Civil Rights Act of 1964 does not regulate the employ-

ment practices of American firms employing American citi-

zens abroad). If, as in Smith and ARAMCO, the extraterrito-

riality canon can prevent a U.S. statute from reaching the

overseas conduct of a U.S. person, it applies a fortiori to re-

strict statutes from reaching the overseas conduct of foreign

persons. See, e.g., Empagran, 542 U.S. at 174 (applying

canon against extraterritoriality to Sherman Act claim against

foreign defendant for price-fixing activities outside of the

United States).

Third, even if the Ninth Circuit were correct that the ap-

plication of CERCLA in this case was, in some sense, do-

mestic, it would not follow that the court of appeals was at

liberty to disregard the canon against extraterritoriality. In

16

Small, this Court recognized that “the presumption against

extraterritorial application does not apply directly to thfe]

case” (which reviewed a criminal conviction for being a

felon in possession of a firearm in the United States), but

nevertheless found that an “ordinary assumption” “about the

reach of domestically oriented statutes” necessarily guided its

construction of the general term “any court.” 544 US. at

389-90. In the absence of any indication that Congress in-

tended the general term to include foreign courts, this Court

held that the term must be construed to “refer[ |] only to do-

mestic courts, not to foreign courts.” Jd. at 394.2

2. Respondents also argued below—as the district court

had held, App., infra, 38a—that the presumption against ex-

traterritorial application of U.S. law did not apply “where the

failure to extend the scope of the statute to a foreign setting

will result in adverse effects in the United States.” Pakootas

C.A. Br. 20 (quoting Environmental Def. Fund, Inc. v.

Massey, 986 F.2d 528, 531 (D.C. Cir. 1993)). Respondents

argued that this exception, which supposedly is triggered

2 Addressing Small, the court of appeals appeared to hold that Con-

gress intended to include foreign corporations within CERCLA’s general

term “any person.” App., infra, 17a; see also 42 U.S.C. § 9601(21) (de-

fining “person”). But the question before the court of appeals was

whether Congress intended the term “any person who arranges for dis-

posal or treatment” to include persons who dispose of waste outside of

the United States. Tellingly, the Ninth Circuit avoided any straightfor-

ward or detailed analysis of this Court’s decision in Small, preferring

instead to determine whether application of CERCLA to foreign corpora-

tions would pass muster under United States v. Palmer, 16 U.S. (3

Wheat.) 610 (1818), on which “[t}he decision in Small was based in part.”

App., infra, 16a. Small, however, cited Palmer only in a six-case string

cite. And Palmer itself dealt with the reach of a statute addressing piracy

on the high seas. 16 U.S. at 630. The Court concluded that a crime of

robbery on the high seas on a vessel belonging to a foreign state against

foreign persons was not within the ambit of the relevant statute. /d. at

633-34. Palmer is thus another example of a case in which the Court did

not read Congress as intending a statute to reach acts undertaken in a for-

eign jurisdiction.

17

whenever a plaintiff alleges that foreign conduct has adverse

effects in the United States, is rooted primarily in this Court’s

decision in Steele v. Bulova Watch Co., 344 U.S. 280, 287-88

(1952). Pakootas C.A. Br. 21-23; see also App., infra, 19a.

But Steele does not remotely establish the encompassing ex-

ception which the district court envisioned.

In Steele, the Court confronted a trademark infringement

action brought against a U.S. citizen and resident who manu-

factured and sold counterfeit watches in Mexico. 344 U.S. at

284-85. Stressing that the United States can “govern[ ] the

conduct of its own citizens ... in foreign countries,” the

Steele Court noted that Steele’s “purchases in the United

States ... were essential steps in the course of business con-

summated abroad.” Jd. at 285-86, 287 (emphasis added).

The Court further noted that “by his own deliberate acts, here

and elsewhere, [Steele has] brought about forbidden results

within the United States.” /d. at 288 (internal quotation

marks omitted and emphasis added). Holding him liable for

such acts, the Court concluded, would not “impugn foreign

law” or “interfere{ |] with the sovereignty of another nation.”

Id. at 285. In contrast, petitioner is not a U.S. citizen, did not

commit any acts in the U.S., and holding it liable would dis-

rupt foreign relations. In these circumstances, Steele does

not apply. See Vanity Fair Mills, Inc. v. T. Eaton Co., 234

F.2d 633, 642 (2d Cir. 1956); McBee v. Delica Co., 417 F.3d

107, 118 (ist Cir. 2005).

Moreover, even when Congress has made clear that a

statute applies to foreign conduct—as it has with the

Sherman Act, see Hartford Fire Ins. Co. v. California, 509

U.S. 764, 796 (1993}—the presumption remains relevant to

determining the extent of a statute’s extraterritorial reach.

See Empagran, 542 U.S. at 173-74 (applying presumption to

limit Sherman Act’s application to foreign conduct). Particu-

larly where the extraterritorial application advanced by a

party will cause “unreasonable interference with the sover-

eign authority of other nations,” id. at 164, in the absence of

18

“affirmative evidence” that Congress intended the statute to

reach the foreign conduct at issue, Sale, 509 U.S. at 176, a

court “must accept” any “reasonably permi[ssible]” reading

of the statutory language that will avoid that discordant re-

sult. Empagran, 542 U.S. at 174 (emphasis in original).

C. The Decision Below Misconstrues

CERCLA’s Text and Structure

Here, CERCLA’s “statutory language” not only “rea-

sonably permits an interpretation” that avoids its extraterrito-

rial application, but the relevant statutory language indis-

putably compels that interpretation.

Petitioner cannot be held liable under CERCLA unless it

is a “covered person” under Section 9607(a). See Cooper

Indus., 543 U.S. at 161. The court of appeals held that peti-

tioner is a “covered person” because Section 9607(a)(3) “ap-

plies to ‘any person’ who arranged for the disposal of haz-

ardous substances.” App., infra, 16a. This reading badly

misapprehends the statutory text.

In relevant part, Section 9607(a)(3) is a sentence frag-

ment that provides that “any person who by contract, agree-

ment, or otherwise arranged for disposal ... of hazardous

substances owned or possessed by such person, by any other

party or entity, at any facility.” 42 U.S.C. § 9607(a)(3).

Subsections (a)(1) and (a)(2) likewise are sentence frag-

ments. See, e.g., 42 U.S.C. § 9607(a)(1) (“the owner and op-

erator of a vessel or a facility”). The courts of appeals uni-

formly have recognized that the last clause of Section

9607(a)(4)-—“from which there is a release ... of a hazard-

ous substance, shall be liable for’—modifies a// four sub-

parts of Section 9607(a). See, e.g., New York v. Shore Realty

Corp., 759 F.2d 1032, 1043 n.16 (2d Cir. 1985).3 Thus, the

arranger liability provision actually reads as follows:

3 As the Second Circuit explained: “The phrase ‘from which there is a

release, «*" a threatened release which causes the incurrence of response

costs, 01 « hazardous substance’ is incorporated in and seems to flow as if

19

any person who by contract, agreement, or other-

wise arranged for disposal ... of hazardous sub-

stances owned or possessed by such person, by any

other party or entity, at any facility ...from which

there is a release . . . of a hazardous substance, shall

be liable for—.

42 U.S.C. § 9607(a)(3)-(4).

To be a covered “arranger,” therefore, one must “ar-

range[ | for disposal ... of hazardous substances ... at any

facility ... from which there is a release.” Id. (emphases

added). This language makes absolutely clear that the “dis-

posal” must take place at the same “facility” “from which

there is a release.” The statutory text does not permit liability

to attach when a person arranges for disposal at one “facil-

ity,” and the pertinent “release” emanates from some other

“facility.” Yet that is precisely the allegation in this case:

The “disposal” occurred at a “facility” in Canada, while the

“release” emanated from a different “facility” entirely within

the United States. See App., infra, 14a (“The Order defines

the facility as being entirely within the United States’’).

With plaintiffs and the Ninth Circuit having defined the

relevant “facility . .. from which there is a release” as being

“entirely within the United States,’ App., infra, 37a,

CERCLA “arranger” liability could attach only if petitioner

“arranged for disposal” of its hazardous substances at that

same U.S. facility. But the Ninth Circuit’s opinion is ex-

[Footnote continued from previous page]

it were a part only of subparagraph (4), but it is quite apparent that it also

modifies subparagraphs (1)-(3) inclusive.” Shore Realty Corp., 759 F.2d

at 1043 n.16. The Second Circuit reviewed the relevant statutory history

and noted that originally “the commencing clause ‘from which there is a

release’ was printed as a new line.” /bid.; see also Control Data Corp. v.

S.C.S.C. Corp., 53 F.3d 930, 934 n.7 (8th Cir. 1995) (same); United

States v. Alcan Aluminum Corp., 964 F.2d 252, 257 n.4 (3d Cir. 1992)

(same); Dedham Water Co. v. Cumberland Farms Dairy, Inc., 889 F.2d

1146, 1151 n.4 (Ist Cir. 1989) (same).

20

pressly premised on the allegation that “Teck .. . arrang[ed]

in Canada for disposal of the slag.” /d. at 16a (emphasis

added). And rightly so: The UAO is absolutely clear that

petitioner’s disposal activities took place in Canada “through

several outfalls at the Trail Smelter,” id. at 72a, and the op-

erative complaints similarly acknowledge that, only after pe-

titioner disposed of its waste slag in Canada, was it “carried

downstream into the waters of the United States.” Jd. at

107a, 115a. Where the CERCLA “facility” is located in the

United States, a correct reading of CERCLA’s “arranger”

liability provision does not permit disposal activities outside

of the United States to trigger liability.4

It was only by reading Section 9607(a)(3) in isolation

from the last clause of subsection (a)(4)—contrary to the oth-

erwise unanimous view of the Circuits—that the Ninth Cir-

cuit could find that petitioner’s disposal of slag in Canada

could make petitioner liable for a subsequent release from a

facility in the United States. By construing CERCLA’s ar-

ranger liability provision to reach persons who dispose of

4 Any suggestion that, because it knew some portion of its slag would

be carried into the United States, Teck Cominco shou:d be deemed to

have disposed of its waste in the United States would have been legally

defective. Such a suggestion would require a court to consirue the term

“disposal” to include passive migration of waste subsequent to its initial

introduction into the environment. The en banc Ninth Circuit rejected a

similar passive migration claim in Carson Harbor Vill., Ltd. v. Unocal

Corp., 270 F.3d 863 (9th Cir. 2001). See also App., infra, 19a n.17

(“‘passive’ terms ... are not included in the definition of ‘disposal’”)

(quoting Carson Harbor Vill., 270 F.3d at 878 (internal quotation marks

omitted)); see also United States v. 150 Acres of Land, 204 F.3d 698, 706

(6th Cir. 2000) (concluding that absent “any evidence that there was hu-

man activity involved in whatever movement of hazardous substances

occurred on the property,” there is no “disposal”); ABB Indus. Sys., Inc. v.

Prime Tech., Inc., 120 F.3d 351, 357-58 (2d Cir. 1997) (“gradual spread-

ing of hazardous chemicals already in the ground” is not “disposal’’);

United States v. CDMG Realty Co., 96 F.3d 706, 722 (3d Cir. 1996)

(“[T]he passive spreading of contamination in a landfill does not consti-

tute ‘disposal’ under CERCLA”).

——

21

waste outside the United States, the Ninth Circuit disregarded

this Court’s clear instruction that, in the absence of evidence

of congressional intent to the contrary, general terms should

be construed to refer only to domestic persons or conduct.

See Small, 544 U.S. at 394. And by rejecting a construction

of the statute limited to domestic conduct that was not only

“reasonably permi[ssible],” but indeed compelled by the

plain text of the statute, the Ninth Circuit disregarded this

Court’s teaching that courts “should adopt” such construc-

tions. Empagran, 542 U.S. at 174. The Ninth Circuit’s re-

fusal to faithfully apply these controlling authorities warrants

this Court’s review. See Sup. Ct. R. 10(c).

D. The Decision Below Threatens To Disrupt

The Foreign Policy Of The United States

if there were any doubt that CERCLA should not be

construed to apply to the foreign operations of a foreign

company conducted pursuant to foreign law, it would be dis-

pelled by the longstanding rule that American statutes should

not be read as transgressing the law of nations. See, e.g.,

Hartford Fire Ins., 509 U.S. at 815 (“statutes should not be

interpreted to regulate foreign persons or conduct if that

regulation would conflict with principles of international

law”); Murray v. Schooner Charming Betsy, 6 U.S. (2

Cranch) 64, 118 (1804) (“an act of Congress ought never tc

be construed to violate the law of nations if any other possi-

ble construction remains”).

The Ninth Circuit’s conclusion that EPA can unilaterally

impose CERCLA liability on a Canadian company doing

business in Canada in compliance with Canadian law, over

the strong objections of the Canadian national and provincial

governments, would wreck the elegant bilateralism that has

distinguished U.S.-Canadian environmental relations for the

past century. The Ninth Circuit’s decision, if allowed to

stand, would usurp the foreign-relations powers of the polliti-

cal branches and could provoke retaliatory actions against

American interests by Canada or her courts. And it would do

22

so entirely unnecessarily, because the ordinary presumption

against the extraterritorial effect of American law is suffi-

cient cause to construe the statute in a way that both effectu-

ates the intent of Congress and avoids a crisis of international

comity.

Private litigation over this and similar transboundary

pollution disputes would place at risk the President’s ability

to conduct foreign policy, because the Executive’s reasoned

policy decisions regarding America’s dealings with other na-

tions would be supplanted by the choices of self-interested

litigants. Particularly where environmental issues are con-

cerned, the formulation of foreign policy requires the balanc-

ing of many possibly conflicting considerations. See, e.g.,

Press Release, President Bush Discusses Global Climate

Change (June 11, 2001) (last visited Feb. 25, 2007),

http://www. whitehouse. gov/news/releases/2001/06/print/200

10611-2.html (observing that adherence to the Kyoto Proto-

col on global climate change would have a negative eco-

nomic impact within the United States). And indeed, in

some circumstances, the President’s foreign policy goals may

dictate the temporary subordination of environmental con-

cerns so that other more pressing matters may be addressed.

For example, the President might find it difficult to press the

Canadian government to continue its military presence in Af-

ghanistan if Canadians were preoccupied with the prospect of

being sued by EPA and private U.S. parties in American

courts for conduct that occurred in Canada and in compliance

with Canadian law.

While the President (and Congress) are well suited to the

balancing of several policy considerations, it is universally

acknowledged that “the Judiciary has neither aptitude, facili-

ties nor responsibility,” Chicago & S. Air Lines, 333 U.S. at

111, to navigate “the[se] possibilities of international dis-

cord.” Benz, 353 U.S. at 147. Yet “international discord” is

precisely what the Ninth Circuit’s decision has sown, and

will continue to sow. See Gov’t of Canada C.A. Br. 3. With

23

a single decision, a three-judge panel of one intermediate ap-

pellate court has deeply undermined the elaborate bilateral

framework agreed to by sovereign governments over long

decades of negotiations.

Moreover, it is not just American relations with the gov-

ernment of Canada that could be affected by extraterritorial

application of CERCLA. The United States shares a long

southern border with Mexico. Many of America’s coastal

States (Alaska, for instance) are close to territory controlled

by other sovereigns. And mercury emitted by smokestacks

in Asia can ride the prevailing winds across the Pacific

Ocean before being deposited in the lakes and streams of

California. See, e.g., Douglas J. Steding & A. Russell Flegal,

Mercury Concentrations in Coastal California Precipitation:

Evidence of Local and Trans-Pacific Fluxes of Mercury to

North America, 107 J. Geophysical Res. ACH 11-1, 11-6

(2002). Even if only a relatively small amount of the hazard-

ous substances were attributed to the Asian source, that could

be enough both to convert that foreign entity into a “poten-

tially responsible party” subject to Section 113 contribution

actions and to permit imposition of liability for cleanup costs.

See 42 U.S.C. § 9613(f)(1) (App., infra, 66a). The Ninth

Circuit’s decision thus threatens to interfere the Executive’s

ability to conduct foreign policy not only within North Amer-

ica, but anywhere air and ocean currents may carry pollut-

ants—potentially, anywhere in the world.

Committing transboundary pollution disputes to private

litigation would, in the long run, have a deleterious effect on

U.S. interests. The Ninth Circuit’s extraterritorial application

of CERCLA could cause other nations to enact or interpret

reciprocal laws to make US. polluters liable for the foreign

effects of their U.S. activities. See, e.g., Barclays Bank PLC

v. Franchise Tax Bd. of California, 512 U.S. 298, 324 n.22

(1994) (noting the “retaliatory legislation” enacted by Great

Britain in response to California’s enactment of worldwide

income reporting requirement). And, given the Ninth Cir-

24

cuit’s large size and the great length of its borders with Can-

ada and Mexico, that would remain the case even if no other

American court adopted the Ninth Circuit’s construction of

the statute. Indeed, the Canadian government has already

foreshadowed such a result, warning in its diplomatic note

that the UAO “may set an unfortunate precedent, by causing

transboundary environmental liability cases to be initiated in

both Canada and the United States.” App., infra, 100a (em-

phasis added).

U.S. interests would suffer gravely under the Ninth Cir-

cuit regime. The United States is a net exporter of certain

types of pollution. See, e.g., Environment Canada, supra,

(observing that, in the year 2000, the United States emitted

six times as much sulfur dioxide as Canada). It accordingly

stands to reason that U.S. polluters may cause more envi-

ronmental problems in foreign nations than foreign polluters

cause in the United States. If Canada and other nations were

to enact or enforce legislation similar to the court of appeals’

interpretation of CERCLA, U.S. interests could send abroad

more money to clean up foreign lands than they would re-

cover from foreign entities for the cleanup of American

lands.

The decision below thus portends both to constrain the

President’s ability to conduct foreign policy and to consign

U.S. firms to underwrite massive environmental cleanup ef-

forts in Canada and beyond. The fact that the Ninth Circuit

proffered no basis whatever for believing that Congress in-

tended such hugely significant and untoward results marks

this case as one of exceptional importance warranting this

Court’s review.

a2

Il. THE NINTH CIRCUIT’S DECISION CONFLICTS

WITH THE FIRST CIRCUIT’S CONCLUSION THAT

* ARRANGER” LIABILITY REQUIRES THE

INVOLVEMENT OF A THIRD PERSON

Even if this case did not raise an exceedingly grave

question of international relations, which it does, it would

warrant review because the decision below creates a direct

conflict of federal appellate authority on one of CERCLA’s

core liability provisions.

1. In American Cyanamid Co. v. Capuano, 381 F.3d 6

(1st Cir. 2004), the First Circuit considered whether brokers

of waste—individuals who facilitated the disposal of waste

generated by another party—could be liable as “arrangers.”

The defendants argued that, under the plain language of Sec-

tion 9607(a)(3), they could not be liable as an arranger unless

they “owned or possessed” the hazardous substances that

were subsequently released in the environment. 381 F.3d at

23; see also 42 U.S.C. § 9607(a)(3) (“any person ... who

arrange[s] for disposal . . . of hazardous substances owned or

possessed by such person”). The plaintiff, on the other hand,

argued that the defendants could be held liable as an “ar-

ranger” whether or not they “owned or possessed” the haz-

ardous substances. 381 F.3d at 23-24. The plaintiff con-

tended that the clause “by any other party or entity” expands

disjunctively the preceding clause—“owned or possessed by

such person”—such that “any person” could be liable for ar-

ranging for the disposal of hazardous substances “owned or

possessed by such person [or] by any other party or entity.”

Id. at 23; see also Am. Cyanamid Co. v. Capuano, No. 03-

2143, Br. of Appellee at 67-68.

The First Circuit flatly rejected the plaintiff's argument.

“The sentence structure of § 9607(a)(3),” the First Circuit

concluded, “makes it clear” that “’by any other party or en-

tity’”’ “modiflies] the words ‘disposal or treatment,’” and

“clarifies that, for arranger liability to attach, the disposal or

26

treatment must be performed by another party or entity.”

381 F.3d at 24 (emphasis added). The “plain language of the

statute” mandates that an “arranger” have owned or pos-

sessed the hazardous substances in issue. /d. at 23-24.9

The First Circuit’s construction, moreover, was in accord

with the substantially uniform view of the Circuits. Gen-

Corp, Inc. v. Olin Corp., 390 F.3d 433, 448 (6th Cir. 2004)

(“the statute requires ownership or possession of the waste”);

Morton Int'l, Inc. v. A.E. Staley Mfg. Co., 343 F.3d 669, 677

(3d Cir. 2003) (“First, proof of ownership, or at least posses-

sion, of the hazardous substance is required by the plain lan-

guage of the statute”); Raytheon Constructors Inc. v. Asarco

Inc., 368 F.3d 1214, 1219 (10th Cir. 2003) (“To be held li-

able under CERCLA as an arranger, a party must... . ‘own’

or ‘possess’ the hazardous substance at issue”); United States

v. Vertac Chem. Corp., 46 F.3d 803, 810 (8th Cir. 1995)

(“Liability under § 9607(a)(3) requires, among other things,

that the hazardous substances be ‘owned or possessed by’ the

person who arranged for the disposal”). But see Cadillac

Fairview/Cal., Inc. v. United States, 41 F.3d 562, 565 (9th

Cir. 1994) (“Liability is not limited to those who own the

hazardous substances, who actually dispose of or treat such

substances, or who control the disposal or treatment proc-

ess”).

5 Notwithstanding the plaintiffs’ erroneous construction of the statute,

the First Circuit affirmed the district court’s imposition of “arranger”

liability, holding that the facts found by the district court sufficed to es-

tablish defendants’ “constructive possession of the waste.” Jd. at 25. The

court’s conclusion that “the disposal or treatment must be performed by a

third party,” cannot, however, be dismissed as mere dicta. Id. at 24. That

conclusion followed ineluctably from the First Circuit’s interpretation of

“by any other party or entity” as modifying “disposal or treatment’”—a

construction that is binding on the courts subject to the First Circuit’s

appellate supervision. See, e.g., Eulitt v. Maine, 386 F.3d 344, 349 (Ist

Cir. 2004).

27

2. The Ninth Circuit looked at the same text as the First

Circuit and adopted precisely the construction that the First

Circuit rejected. App., infra, 25a-26a. Echoing the reason-

ing of the First Circuit, petitioner argued that the clause “’by

any other party or entity’” modifies “’disposal or treatment

and “clarifies that, for arranger liability to attach, the disposal

or treatment must be performed by another party or entity.”

American Cyanamid, 381 F.3d at 24; see Pet. C.A. Br. 38-9.

The Ninth Circuit rejected that construction, holding that,

rather than modify “disposal or treatment,” “by any other

party or entity” should be read as a disjunctive clause ex-

panding upon “owned or possessed by such person.” App.,

infra, 24a.6

In the Ninth Circuit’s view, “[t]he text of § 9607(a)(3)”

should be “modified” to read, “any person who .. . arranged

for disposal or treatment . . . of hazardous substances owned

or possessed by such person [or] by any other party or en-

tity ....” App., infra, 24a (emphasis in original). The Ninth

Circuit thus expressly—and unilaterally—inserted into the

statute a word that the political branches did not see fit to in-

clude, in derogation of the settled principle that “[courts]

999

6 The Ninth Circuit justified its textual modification, in part, on the

basis that the First Circuit’s construction “would leave a gaping and il-

logical hole in the statute’s coverage.” App., infra, 26a. Specifically, the

court of appeals fretted that a generator of waste who “disposed of the

waste on the property of another”’—the so-called “midnight dumper”—

could escape liability. /bid. It is well-established, though, that a person

who disposes of waste on another’s property may be held liable as an

“operator” of that “facility” under 42 U.S.C. § 9607(a)(2) (App., infra,

65a). See, e.g., American Cyanamid, 381 F.3d at 23; see also United

States v. Bestfoods, 524 U.S. 51, 66 (1998) (defining operators as those

who “manage, direct, or conduct operations specifically related to pollu-

tion”). And, contrary to the suggestion in the decision below, in the

Ninth Circuit at least, a generator who transports his own waste may be

held liable as one who “accepted any hazardous substances for transport”

under 42 U.S.C. § 9607(a)(4). See Pritikin v. Department of Energy, 254

F.3d 791, 795 (9th Cir. 2001).

28

have no right to insert words and phrases, so as to incorporate

in the statute a new and distinct provision.” United States v.

Temple, 105 U.S. 97, 99 (1882).

The Ninth Circuit thus adopted exactly the textual

“modifi[cation]” that the First Circuit rejected as “clear[ly]

... [in]correct.” Am. Cyanamid, 381 F.3d at 24. The appel-

late adoption of mutually exclusive interpretations of a provi-

sion of CERCLA is, of course, a sufficient basis for a grant

of certiorari. See, e.g., United States v. Atlantic Research

Corp., 127 S.Ct. 1144 (2007) (order granting certiorari).

Here, furthermore, the need for this Court’s review is ampli-

fied by the fact that the First and Ninth Circuits’ mutually

exclusive interpretations of “by any other party or entity”

implicate two separate aspects of CERCLA “arranger” liabil-

ity.

First, in adopting its countertextual construction, the

Ninth Circuit—concededly—set itself at loggerheads with

the First Circuit’s conclusion that the “by any other party or

entity” clause confirmed that a third party—someone other

than he who “otherwise arrange[s] for disposal”—must dis-

pose of the hazardous substances at issue. Compare App.,

infra, 28a (“the arranger element can be met when disposal is

not arranged ‘by any other party or entity’”) with Am. Cy-

anamid, 381 F.3d at 24 (“the disposal or treatment must be

performed by another party or entity’); cf United States v.

Cello-Foil Prods., Inc., 100 F.3d 1227, 1231 (6th Cir. 1996)

(“‘[o]therwise arranged’ is a general term following in a se-

ries of two specific terms and embraces the concepts similar

to those of ‘contract’ and ‘agreement’”).

Second, in holding that “‘by any other party or entity’ re-

fers to ownership of the waste, such that one may be liable

under § 9607(a)(3) if they arrange for disposal of their own

waste or someone else’s,” App., infra, 28a, the Ninth Circuit

deepened a pre-existing circuit conflict on the question

whether an “arranger” must have owned or possessed the

29

waste at issue. As noted supra at 26, in the First, Third,

Eighth, and Tenth Circuits (at least), arranger liability ex-

tends only to persons who “owned or possessed” the hazard-

ous substances.” E.g., Morton Int'l, 343 F.3d at 677 (“First,

proof of ownership, or at least possession, of the hazardous

substance is required by the plain language of the statute’’).

In the Ninth Circuit, however, arranger liability may reach to

any person who “otherwise arrange[s] for disposal or treat-

ment ... hazardous substances,” regardless of their owner-

ship or possession of the waste.’

Thus, as things now stand, one can be held liable in the

Ninth Circuit as a responsible “arranger” absent both the in-

volvement of a third party and any ownership or possession

the hazardous substances in issue;.but that same person, if

sued in the First Circuit, could not be held so responsible. A

single company with nationwide operations, therefore, could

be subject to CERCLA penalties if sued in Washington but

not in Maine—even for the identical conduct. Such a state of

affairs is antithetical to the uniform remedial scheme that

Congress envisioned in enacting CERCLA. This direct and

acknowledged conflict warrants review and resolution by this

Court.

CONCLUSION

In light of the patent incorrectness of the decision below,

the conflict it creates with prior decisions, and its potential to

disrupt international relations, the petition for a.writ of certio-

rari should be granted. At minimum, the Court should invite

the Solicitor General to explain whether the President actu-

7 This construction seems to have rendered irrelevant the Statutory

phrase “owned or possessed by such person [or] by any other party or

entity.” On the Ninth Circuit’s view, omission of that language does not

alter the ambit of the statute. But this Court has long held that that “{a]

statute should be construed so that effect is given to all its provisions, so

that no part will be inoperative or superfluous, void or insignificant.”

Hibbs v. Winn, 542 U.S. 88, 101 (2004) (internal quotation omitted).

30

ally supports such an unprecedented, and potentially deleteri-

ous, expansion of American authority, in derogation of the

statute enacted by Congress and the canons of construction

adopted by this Court.

Respectfully submitted.

THOMAS A CAMPBELL THEODORE B. OLSON

KEVIN M. FONG Counsel of Record

GERALD F. GEORGE RAYMOND B. LUDWISZEWSKI

PILLSBURY WINTHROP MARK A. PERRY

SHAW PITTMAN LLP MATTHEW D. MCGILL

50 Fremont Street GIBSON, DUNN & CRUTCHER LLP

San Francisco, CA 94105 1050 Connecticut Avenue, N.W.

(415) 983-1000 Washington, D.C. 20036

(202) 955-8500

Counsel for Petitioner

February 27, 2007

APPENDIX .

la

APPENDIX A

Joseph A. PAKOOTAS, an individual and enrolled mem-

ber of the Confederated Tribes of the Colville Reserva-

tion; Donald R. Michel, an individual and enrolled mem-

ber of the Confederated Tribes of the Colville Reserva-

tion; State of Washington, Plaintiffs—Appellees,

Vv.

TECK COMINCO METALS, LTD.,

a Canadian corporation,

Defendant—Appellant.

No. 05-35153.

United States Court of Appeals,

Ninth Circuit.

Argued and Submitted Dec. 5, 2005.

Filed July 3, 2006.

Kevin M. Fong, Pillsbury Winthrop Shaw Pittman LLP,

San Francisco, CA, for defendant-appellant Teck Cominco

Metals, Ltd.

Richard A. Du Bey, Paul J. Dayton (argued) and Daniel

F. Johnson, Short Cressman & Burgess PLLC, Seattle, WA,

for plaintiffs-appellees Joseph A. Pakootas and Donald R.

Michel.

Alexandra K. Smith, Steven J. Thiele, and Kristie E.

Carevich, Assistant Attorneys General, Washington State

office of the Attorney General, Olympia, WA, for plain-

tiff/intervenor-appellee State of Washington.

Loren R. Dunn, Riddell Williams PS, Seattle, WA, for

amici Washington Environmental Council, Washington, Pub-

2a

lic Interest Research Group, and Citizens for a Clean Colum-

bia.

Rex S. Heinke, Akin Gump Strauss Hauer & Feld LLP,

Los Angeles, CA, for amici Canadian Chamber of Commerce

and the Mining Association of Canada.

Brian Hembacher, Deputy Attorney General, Los Ange-

les, CA, for amici People of the State of California ex rel.

Bill Lockyer, Attorney General for the State of California,

and the States of Arizona, Idaho, Montana and Oregon.

Margaret K. Pfeiffer, Sullivan & Cromwell LLP, Wash-

ington, D.C., for amicus Government of Canada.

Carter G. Phillips, Sidley Austin Brown & Wood LLP,

Washington, D.C., for amicus Chamber of Commerce of the

United States of America.

Rob Roy Smith, Morisset Schlosser Jozwiak & McGaw,

Seattle, WA, for amicus Okanagan National Alliance in sup-

port of plaintiffs-appellees.

Catherine E. Stetson, Hogan & Hartson LLP, Washing-

ton, D.C., for amici National Mining Association and the Na-

tional Association of Manufacturers.

Martin Wagner, Earthjustice, Oakland, CA, for amici Si-

erra Club and Sierra Club of Canada.

Shannon D. Work, Funke & Work, Coeur d’Alene, ID,

for amicus Spokane Tribe of Indians.

Appeal from the United States District Court for the

Eastern District of Washington; Alan A. McDonald, Senior

District Judge, Presiding. D.C. No. CV-04—00256—-AAM.

Before: RONALD M. GOULD and MARSHA S. BER-

ZON, Circuit Judges, and WILLIAM W SCHWARZER,"*

District Judge.

* The Honorable William W Schwarzer, Senior United States District

Judge for the Northern District of California, sitting by designation.

3a

GOULD, Circuit Judge:

Joseph A. Pakootas and Donald R. Michel (collectively

“Pakootas”) filed suit to enforce a Unilateral Administrative

Order (Order) issued by the United States Environmental

Protection Agency (EPA) against Teck Cominco Metals, Ltd.

(Teck), a Canadian corporation. The Order requires Teck to

conduct a remedial investigation/feasibility study (RI/FS) in

a portion of the Columbia River entirely within the United

States, where hazardous substances disposed of by Teck have

come to be located. We decide today whether a citizen suit

based on Teck’s alleged noncompliance with the Order is a

domestic or an extraterritorial application of the Comprehen-

sive Environmental Response, Compensation, and Liability

Act (CERCLA), 42 U.S.C. §§ 9601-9675. Further, we ad-

dress Teck’s argument that it is not liable for having “ar-

ranged for disposal” of hazardous substances because it dis-

posed of the hazardous substances itself, rather than arrang-

ing for disposal “by any other party or entity.” § 9607(a)(3).!

We hold that because CERCLA liability is triggered by an

actual or threatened release of hazardous substances, and be-

cause a release of hazardous substances took place within the

United States, this suit involves a domestic application of

CERCLA. Further, we reject Teck’s contention that it is not

liable under § 9607(a)(3) because it disposed of the hazard-

ous substances itself.

We consider an interlocutory appeal of the denial of

Teck’s motion to dismiss.2 In August of 1999, the Colville

Tribes petitioned the EPA under § 9605 to conduct an as-

| Unless otherwise indicated, statutory citations herein are to Title 42

f the United States Code.

2 Because this appeal follows denial of a motion to dismiss, we take

the facts as stated in the complaint as true and in the light most favorable

to Pakootas. See Campanelli v. Bockrath, 100 F.3d 1476, 1479 (9th Cir.

1996).

4a

sessment of hazardous substance contamination in and along

the Columbia River in northeastern Washington state. The

EPA began the site assessment in October 1999, and found

contamination that included “heavy metals such as arsenic,

cadmium, copper, lead, mercury and zinc.” /n re Upper Co-

lumbia River Site, Docket No. CERCLA—10—2004-0018, at

2 (Unilateral Administrative Order for Remedial Investiga-

tion/Feasibility Study Dec. 11, 2003), available at

http://yosemite.epa.gov/R10/CLEANUP.NSF/UCR/Enforce

ment [hereinafter UAO]. The “EPA also observed the pres-

ence of slag, a by-product of the smelting furnaces, contain-

ing glassy ferrous granules and other metals, at beaches and

other depositional areas at the Assessment Area.” /d. at 2-3.

The EPA completed its site assessment in March of 2003,

and concluded that the Upper Columbia River Site (the Site)?

was eligible for listing on the National Priorities List (NPL).4

Teck owns and operates a lead-zinc smelter (“Trail

Smelter”) in Trail, British Columbia.5 Between 1906 and

3 The ‘*‘Upper Columbia River Site’’ includes ‘‘the areal extent of con-

tamination in the United States associated with the Upper Columbia

River, and all suitable areas in proximity to the contamination necessary

for implementation of a response action.”’ UAO at 2.

4 The NPL ‘‘is a compilation of uncontrolled hazardous substances

releases in the United States that are ‘priorities’ for long-term evaluation

and response.’’ 4 William H. Rodgers, Jr., Environmental Law: Hazard-

ous Wastes and Substances § 8.7(C) (Supp. 2005). ‘‘Inclusion of a site or

facility on the list requires no action, assigns no liability, and does not

pass judgment on the owner or operator.... [T]he key consequence of

being listed is that only NPL sites qualify for [Superfund]-financed reme-

dial action.’’ Jd.

5 This is not the first time the Trail Smelter has been in a dispute over

transboundary environmental pollution. See generally Michael J. Robin-

son-Dorn, The Trail Smelter: Is What's Past Prologue? EPA Blazes a

New Trail for CERCLA, 14 N.Y.U. Envtl. L.J. 233, 241-53 (2006) (de-

scribing factual and procedural background of the Trail Smelter Arbitra-

tion, which concerned sulfur dioxide emissions from the Trail Smelter

that migrated into the United States in the early twentieth century).

Sa

1995, Teck generated and disposed of hazardous materials, in

both liquid and solid form, into the Columbia River. These

wastes, known as “slag,” include the heavy metals arsenic,

cadmium, copper, mercury, lead, and zinc, as well as other

unspecified hazardous materials. Before mid—1995, the Trail

Smelter discharged up to 145,000 tons of slag annually into

the Columbia River. Although the discharge took place

within Canada, the EPA concluded that Teck

has arranged for the disposal of its hazardous

substances from the Trail Smelter into the

Upper Columbia River by directly discharging

up to 145,000 tonnes of slag annually prior to

mid—1995. Effluent, such as slag, was dis-

charged into the Columbia River through sev-

eral outfalls at the Trail Smelter. . .. The slag

was carried downstream in the passing river

current and settled in slower flowing quies-

cent areas.©

Id. at 3. A significant amount of slag has accumulated and

adversely affects the surface water, ground water, sediments,

and biological resources of the Upper Columbia River and

Lake Roosevelt. Technical evidence shows that the Trail

Smelter is the predominant source of contamination at the

Site. The physical and chemical decay of slag is an ongoing

process that releases arsenic, cadmium, copper, zinc, and lead

6 The complaint alleges that the Trail Smelter discharged up to

145,000 tons of slag annually, but the EPA alleges that the Trail Smelter

discharged up to 145,000 tonnes annually. A “ton” is equivalent to 2,000

pounds. A “tonne,” or metric ton, is equivalent to 1,000 kilograms, or

2,205 pounds. Thus, 145,000 tonnes, each with 205 pounds more than an

American “ton,” is equivalent to about 160,000 tons. Either way, the

Trail Smelter discharged a ton of slag in the colloquial sense, and the

difference between the two figures is immaterial for our purposes. Be-

cause we take the facts as alleged by Pakootas, we use his figure of

145,000 tons.

6a

into the environment, causing harm to human health and the

environment.

After the EPA determined that the Site was eligible for

listing on the NPL, it evaluated proposing the Site for place-

ment on the NPL for the purpose of obtaining federal funding

for evaluation and future cleanup. At that time Teck

Cominco American, Inc. (TCAI)’ approached the EPA and

expressed a willingness to perform an independent, limited

human health study if the EPA would delay proposing the

Site for NPL listing. The EPA and TCAI entered into nego-

tiations, which reached a stalemate when the parties could

not agree on the scope and extent of the investigation that

TCAI would perform. The EPA concluded that TCAI’s pro-

posed study would not provide the information necessary for

the EPA to select an appropriate remedy for the contamina-

tion, and as a result the EPA issued the Order on December

11, 2003. The Order directed Teck to conduct a RI/FS® un-

der CERCLA for the Site. To date Teck has not complied

with the Order, and the EPA has not sought to enforce the

Order.

Pakootas filed this action in federal district court under

the citizen suit provision of CERCLA. § 9659(a)(1). Pa-

kootas sought a declaration that Teck has violated the Order,

injunctive relief enforcing the Order against Teck, as well as

penalties for non-compliance and recovery of costs and fees.

Teck moved to dismiss the complaint pursuant to Federal

Rule of Civil Procedure 12(b)(1) and 12(b)(6) for failure to

7 TCALis a wholly-owned American subsidiary of Teck.

8 “The purpose of the remedial investigation/feasibility study (RI/FS)

is to assess site conditions and evaluate alternatives to the extent neces-

sary to select a remedy. Developing and conducting an RI/FS generally

includes the following activities: project scoping, data collection, risk

assessment, treatability studies, and analysis of alternatives. The scope

and timing of these activities should be tailored to the nature and com-

plexity of the problem and the response alternatives being considered.”

40 C.F.R. § 300.430(a)(2).

Ta

state a cause of action under CERCLA and lack of subject

matter jurisdiction, on the ground that the district court could

not enforce the Order because it was based on activities car-

ried out by Teck in Canada. Teck also moved to dismiss for

lack of personal jurisdiction over Teck, a Canadian corpora-

tion with no presence in the United States. After Teck filed

its motion to dismiss, the State of Washington moved to in-

tervene as of right as a plaintiff in the action, The district

court granted the motion to intervene, and considered Teck’s

pending motion to dismiss to apply to both Pakootas’s com-

plaint and the State of Washington’s complaint-in-

intervention.

The district court denied Teck’s motion to dismiss. It

held that because the case arises under CERCLA “there is a

federal question which confers subject matter jurisdiction on

this court.” Because there was a federal question, and be-

cause Pakootas’s claims were not insubstantial or frivolous,

the district court held that dismissal under Federal Rule of

Civil Procedure 12(b)(1) was inappropriate. The district

court also held that “[t]he facts alleged in plaintiffs’ com-

plaints establish this court’s specific, limited personal juris-

diction over the defendant.”

Much of district court’s order was devoted to analyzing

Teck’s argument that the suit involved an impermissible ex-

traterritorial application of CERCLA, and thus whether dis-

missal for failure to state a claim under CERCLA was appro-

priate. The district court first acknowledged that “there is

some question whether this case really involves an extraterri-

torial application of CERCLA.” However, the district court

assumed that the case involved an extraterritorial application

of CERCLA, and considered whether extraterritorial applica-

tion was permissible here.

In addressing the question of extraterritorial application,

the district court acknowledged that “Congress has the au-

thority to enforce its laws beyond the territorial boundaries of

8a

the United States,” but that it is “a longstanding principle of

American law ‘that legislation of Congress, unless a contrary

intent appears, is meant to apply only within the territorial

jurisdiction of the United States.’ ” (quoting EEOC v. Ara-

bian Am. Oil Co. (“Aramco”), 499 U.S. 244, 248, 111 S.Ct.

1227, 113 L.Ed.2d 274 (1991)). However, the district court

concluded that the presumption against extraterritoriality was

overcome here, because

there is no doubt that CERCLA affirmatively

expresses a clear intent by Congress to rem-

edy ‘domestic conditions’ within the territorial

jurisdiction of the U.S. That clear intent,

combined with the well-established principle

that the presumption [against extraterritorial-

ity] is not applied where failure to extend the

scope of the statute to a foreign setting will re-

sult in adverse effects within the United

States, leads this court to conclude that extra-

territorial application of CERCLA is appro-

priate in this case.

Further, the district court held that Teck was a “person” un-

der the meaning of § 9601(21), and held that Teck’s liability

as a “generator” of hazardous waste and/or as an “arranger”

of the disposal of hazardous waste could not be ruled out un-

der § 9607(a)(3).?

The district court sua sponte certified its order for im-

mediate appeal to us pursuant to 28 U.S.C. § 1292(b). There-

9 CERCLA defines an arranger as:

any person who by contract, agreement, or otherwise arranged for

disposal or treatment, or arranged with a transporter for transport for

disposal or treatment, of hazardous substances owned or possessed

by such person, by any other party or entity, at any facility or incin-

eration vessel owned or operated by another party or entity and con-

taining such hazardous substances.

§ 9607(a)(3).

9a

after, Teck petitioned for permission to appeal, which we

granted. While Teck’s petition for permission to appeal was

pending before us, the district court granted Teck’s motion to

stay further proceedings in the district court pending the out-

come of this interlocutory appeal. !°

On this appeal, Teck does not challenge the district

court’s determination that it had personal jurisdiction over

Teck. And although Teck “disputes the conclusion” that the

district court had subject matter jurisdiction to hear the case,

it does not argue in its briefing that the district court was

without subject matter jurisdiction. Rather, Teck argues that

the district court should have dismissed Pakootas’s complaint

10 After this appeal was submitted for decision, Teck filed a request for

us to take judicial notice of a settlement agreement between Teck and

EPA, in which the EPA agreed to withdraw the Order that is the subject

of this appeal. Neither Pakootas nor the State of Washington, who are the

plaintiff and plaintiff-intervenor in this litigation, was a party to the set-

tlement agreement. We take notice that the settlement between Teck and

the EPA was reached, but we do not take notice of supplemental argu-

ments urged by Teck relating to the agreement.

The parties are agreed that the settlement between Teck and the EPA

does not render this action moot. Teck argues that this settlement renders

moot Pakootas’s claims for injunctive relief to enforce the Order and for

declaratery relief that Teck is in violation of the Order, but that Pa-

kootas’s claims for civil penalties “for each day” that Teck violated the

Order and for attorneys’ fees, are not moot. Pakootas disputes that the

settlement is self-executing and that it necessarily renders moot the

claims for injunctive and declaratory relief. For purposes of this appeal,

it is sufficient for us to note that Pakootas’s claims for civil penalties and

for attorneys’ fees are not moot, and that we must proceed to decision of

the appeal. On remand, we leave for the district court to decide in the

first instance whether the claims for injunctive and declaratory relief are

moot,

We further deny Teck’s request for us to take judicial notice on this

appeal of the following documents: (1) Order Granting Motions to Lift

Stay, issued by the district court on October 25, 2005; (2) Plaintiffs’

Amended Complaint, filed November 7, 2005; and (3) State of Washing-

ton’s First Amended Complaint in Intervention, filed November 4, 2005.

10a

under Federal Rule of Civil Procedure 12(b)(6) for two rea-

sons. First, Teck argues that to apply CERCLA to Teck’s

activities in Canada wouid be an impermissible extraterrito-

rial application of United States law. Second, Teck argues

that it is not liable as a person who “arranged for disposal” of

hazardous substances under § 9607(a)(3).

II

We review de novo a district court’s decision on a mo-

tion to dismiss for failure to state a claim pursuant to Federal

Rule of Civil Procedure 12(b)(6). Decker v. Advantage Fund

Ltd., 362 F.3d 593, 595-96 (9th Cir. 2004). We review ques-

tions of law de novo. Torres-Lopez v. May, 111 F.3d 633,

638 (9th Cir. 1997).

iil

We begin by considering how this litigation fits within

the CERCLA statutory framework. CERCLA sets forth a

comprehensive scheme for the cleanup of hazardous waste

sites, and imposes liability for cleanup costs on the parties

responsible for the release or potential release of hazardous

substances into the environment. See Pinal Creek Group v.

Newmont Mining Corp., 118 F.3d 1298, 1300 (9th Cir.

1997); see also Gen. Elec. Co. v. Litton Indus. Automation

Sys., Inc., 920 F.2d 1415, 1422 (8th Cir. 1990) (stating that

“two ... main purposes of CERCLA” are “prompt cleanup of

hazardous waste sites and imposition of all cleanup costs on

the responsible party”) (cited with approval in Meghrig v.

KFC W., Inc., 516 U.S. 479, 483, 116 S.Ct. 1251, 134

L.Ed.2d 121 (1996)).

To ensure the prompt cleanup of hazardous waste sites,

CERCLA gives four options to the EPA:!! (1) the EPA can

investigate and remediate hazardous waste sites itself under §

11 CERCLA vests this authority in the President, who in turn has dele-

gated most of his functions and responsibilities to the EPA. See 40 C.F.R.

§ 300.100.

Lla

9604, and later seek to recover response costs from the po-

tentially responsible parties (PRPs) under § 9607; (2) the

EPA can initiate settlement negotiations with PRPs under

§ 9622; (3) the EPA can file suit in federal district court to

compel the PRPs to abate the threat if there is an “imminent

and substantial” threat to public health or welfare under

§ 9606(a); or (4) the EPA can issue orders directing the PRPs

to clean up the site under § 9606(a). In this case, the EPA

chose the fourth approach, and issued the Order to Teck un-

der § 9606(a).

If a party receives an order and refuses to comply, en-

forcement options are available. See generally Solid State

Circuits, Inc. v. EPA, 812 F.2d 383, 387 (8th Cir. 1987).

First, the EPA may bring an action in federal district court to

compel compliance, using the contempt powers of the district

court as a potential sanction for non-compliance. § 9606(a).

Second, the EPA may bring an action in federal district court

seeking to impose fines of up to $25,000 for each day that the

party fails to comply with the order. § 9606(b)(1). Third, the

EPA may initiate cleanup of the facility itself under § 9604,

and the party responsible for the pollution is potentially liable

for the response and cleanup costs, plus treble damages.

§ 9607(c)(3).

Here, the EPA has not sought to enforce the Order

through any of the mechanisms described above.!2 Rather,

Pakootas initiated tis suit in federal district court under

§ 9659, the citizen suit provision of CERCLA. Section

9659(a)(1) provides a cause of action for any person to com-

mence a civil action “against any person ... who is alleged

to be in violation of any standard, regulation, condition, re-

quirement, or order which has become effective pursuant to

this chapter.” Section 9659(c) gives the district court the

12 So far as we can tell from the record, the EPA did not take any for-

mal action against Teck between issuing the Order on December 11, 2003

and settling with Teck on June 2, 2006.

12a

power “to order such action as may be necessary to correct

the violation, and to impose any civil penalty provided for

the violation.” Further, § 9613(h)(2), the “timing of review”

provision of CERCLA, grants federal courts jurisdiction to

review an order issued under § 9606(a) when a party seeks to

enforce the order.

Having placed this litigation in context, we turn to the

merits.

IV

Teck’s primary argument is that, in absence of a clear

statement by Congress that it intended CERCLA to apply

extraterritorially, the presumption against extraterritorial ap-

plication of United States law precludes CERCLA from ap-

plying to Teck in Canada. We need to address whether the

presumption against extraterritoriality applies only if this

case involves an extraterritorial application of CERCLA. So

a threshold question is whether this case involves a domestic

or extraterritorial application of CERCLA.

Unlike other environmental laws such as the Clean Air

Act, 42 U.S.C. §§ 7401-7671q, Clean Water Act, 33 U.S.C.

§§ 1251-1387, and Resource Conservation and Recovery Act

(RCRA), 42 U.S.C. §§ 6901-6992k, CERCLA is not a regu-

latory statute. Rather, CERCLA imposes liability for the

cleanup of sites where there is a release or threatened release

of hazardous substances into the environment. See Carson

Harbor Vill., Ltd. v. Unocal Corp., 270 F.3d 863, 881 (9th

Cir. 2001) (en banc) (“CERCLA holds a PRP liable for a

disposal that ‘releases or threatens to release’ hazardous sub-

stances into the environment.”). CERCLA liability attaches

when three conditions are satisfied: (1) the site at which there

is an actual or threatened release of hazardous substances is a

“facility” under § 9601(9); (2) a “release” or “threatened re-

lease” of a hazardous substance from the facility has oc-

13a

curred, § 9607(a)(4); and (3) the party is within one of the

four classes of persons subject to liability under § 9607(a).!3

CERCLA defines the term “facility” as, in relevant part,

“any site or area where a hazardous substance has been de-

posited, stored, disposed of, or placed, or otherwise come to

be located.” § 9601(9). The Order defines the “facility” in

this case as the Site, which is described as the “extent of con-

tamination in the United States associated with the Upper

Columbia River.” UAO at 2 (emphasis added); see also UAO

at 5 (“The Upper Columbia River Site is a ‘facility’ as de-

fined in Section 101(9) of CERCLA, 42 U.S.C.

13 There is a question whether the elements of CERCLA liability out-

lined in § 9607(a) are the same elements that the EPA must allege when

issuing an order under § 9606(a). That is, § 9606(a) authorizes the EPA

to issue “such orders as may be necessary to protect public health and

welfare and the environment,” but does not specify exactly what the EPA

must allege before issuing such orders. Section 9606(b)(1) states that the

EPA can seek fines for non-compliance in federal district court unless the

person who refuses to comply with the order has “sufficient cause.”

The Eighth Circuit, the only federal court of appeals to address the

issue, has held that “sufficient cause” includes a defense that “the appli-

cable provisions of CERCLA, EPA regulations and policy statements,

and any formal or informal hearings or guidance the EPA may provide,

give rise to an objectively reasonable belief in the invalidity or inapplica-

bility of the clean-up order.” Solid State Circuits, 812 F.2d at 392. We

need not here decide whether a party that is not liable under § 9607(a)

necessarily has “sufficient cause” to refuse to comply with an order is-

sued under § 9606(a) because, as we hold below, Teck is potentially li-

able under § 9607(a).

However, one element of § 9607(a) liability does not apply here. In

private cost recovery actions under § 9607(a), the claimant must incur

response costs that are both “necessary” and “consistent with the national

contingency plan.” § 9607(a)(4). See Carson Harbor Vill., 270 F.3d at

871-72. Because Pakootas filed a citizen suit under § 9659 rather than a

private cost recovery action under § 9607(a), the requirement that a pri-

vate party incur response costs before filing suit does not apply here.

14a

§ 9601(9).”).!4 The slag has “come to be located” at the Site,

and the Site is thus a facility under § 9601(a). See 3550 Ste-

vens Creek Assocs. v. Barclays Bank of California, 915 F.2d

1355, 1360 n.10 (9th Cir. 1990) (“[T]he term facility has

been broadly construed by the courts, 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 quotation

marks omitted)). The Order defines the facility as being en-

tirely within the United States, and Teck does not argue that

the Site is not a CERCLA facility. Because the CERCLA

facility is within the United States, this case does not involve

an extraterritorial application of CERCLA to a facility

abroad. The theory of Pakootas’s complaint, seeking to en-

force the terms of the Order to a “facility” within the United

States, does not invoke extraterritorial application of United

States law precisely because this case involves a domestic

facility.

The second element of liability under CERCLA is that

there must be a “release” or “threatened release” of a hazard-

ous substance from the facility into the environment. See

§ 9607(a)(4). To determine if there is an actual or threatened

release here, we consider the statutory definition of release.

CERCLA defines a “release,” with certain exceptions not

relevant here, as “any spilling, leaking, pumping, pouring,

emitting, emptying, discharging, injecting, escaping, leach-

ing, dumping, or disposing into the environment.”

§ 9601(22).

Here, several events could potentially be characterized

as releases. First, there is the discharge of waste from the

Trail Smelter into the Columbia River in Canada. Second,

14 Because the EPA and Pakootas in seeking enforcement of the EPA’s

order do not characterize either the Trail Smelter or the Columbia River

in Canada as a facility, we need not and do not reach whether these sites

are facilities for purposes of CERCLA.

l5a

there is the discharge or escape of the slag from Canada

when the Columbia River enters the United States. And

third, there is the leaching of heavy metals and other hazard-

ous substances from the slag into the environment at the Site.

Although each of these events can be characterized as a re-

lease, CERCLA liability does not attach unless the “release”

is from a CERCLA facility.

Here, as noted, the Order describes the facility as the

Site; not the Trail Smelter in Canada or the Columbia River

in Canada. Pakootas has alleged that the leaching of hazard-

ous substances from the slag that is in the Site is a CERCLA

release, and Teck has not argued that the slag’s interaction

with the water and sediment of the Upper Columbia River is

not a release within the intendment of CERCLA. Our prece-

dents establish that the passive migration of hazardous sub-

stances into the environment from where hazardous sub-

stances have come to be located is a release under CERCLA.

See A & W Smelter & Refiners, Inc. v. Clinton, 146 F.3d

1107, 1111 (9th Cir. 1998) (holding that wind blowing parti-

cles of hazardous substances from a pile of waste was a

CERCLA release); United States v. Chapman, 146 F.3d

1166, 1170 (9th Cir. 1998) (affirming summary judgment

where the Government presented evidence that corroding

drums were leaking hazardous substances into the soil); see

also Coeur d’Alene Tribe v. Asarco, Inc., 280 F.Supp.2d

1094, 1113 (D. Idaho 2003) (“Th[e] passive movement and

migration of hazardous substances by mother nature (no hu-

man action assisting in the movement) is still a ‘release’ for

purposes of CERCLA in this case.”). We hold that the leach-

ing of hazardous substances from the slag at the Site is a

CERCLA release. That release—a release into the United

States from a facility in the United States—is entirely domes-

tic.

The third element of liability under CERCLA is that the

party must be a “covered person” under § 9607(a). Teck ar-

gues that it is not a covered person under § 9607(a)(3) be-

l6a

cause it has not “arranged for disposal” of a hazardous sub-

stance “by any other party or entity” as required by

§ 9607(a)(3), because Teck disposed of the slag itself, and

without the aid of another. Alternatively, Teck argues that if

it is an arranger under § 9607(a)(3), then basing CERCLA

liability on Teck arranging for disposal of slag in Canada is

an impermissible extraterritorial application of CERCLA.

Assuming that Teck is an arranger under § 9607(a)(3),!>

we consider whether the fact that the act of arranging in Can-

ada for disposal of the slag makes this an extraterritorial ap-

plication of CERCLA. Teck argues that because it arranged

in Canada for disposal, that is, the act of arranging took place

in Canada even though the hazardous substances came to be

located in the United States, it cannot be held liable under

CERCLA without applying CERCLA extraterritorially.

The text of § 9607(a)(3) applies to “any person” who ar-

ranged for the disposal of hazardous substances. The term

“person” includes, inter alia, “an individual, firm, corpora-

tion, association, partnership, consortium, joint venture, [or]

commercial entity.” § 9601(21). On its face, this definition

includes corporations such as Teck, although the definition

does not indicate whether foreign corporations are covered.

Teck argues that because the Supreme Court recently held

that the term “any court” as used in 18 U.S.C. § 922(g){1)

does not include foreign courts, we should interpret the term

“any person” so as not to include foreign corporations. See

Small v. United States, 544 U.S. 385, 390-91, 125 S.Ct.

1752, 161 L.Ed.2d 651 (2005).

The decision in Small was based in part on United States

v. Palmer, 16 U.S. (3 Wheat.) 610, 4 L.Ed. 471 (1818), in

which Chief Justice Marshall held for the Court that the

words “any person or persons,” as used in a statute prohibit-

15 We address in the next section Teck’s contention that it is not a per-

son for § 9607(a) purposes because it has not “arranged for disposa!” of

hazardous substances “by any other party or entity.”

17a

ing piracy on the high seas, “must not only be limited to

cases within the jurisdiction of the state, but also to those ob-

jects to which the legislature intended to apply them.” Jd. at

631. The Court held that “any person or persons” did not

include crimes “committed by a person on the high seas, on

board of any ship or vessel belonging exclusively to subjects

of a foreign state, on persons within a vessel belonging ex-

Clusively to subjects of a foreign state.” /d. at 633-34. How-

ever, the Court held that even though the statute did not spe-

cifically enumerate foreign parties as “persons,” the statute

did apply to punish piracy committed by foreign parties

against vessels belonging to subjects of the United States.

See id.

Palmer relied upon two benchmarks for determining

whether terms such as “any person” apply to foreign persons:

(1) the state must have jurisdiction over the party, and (2) the

legislature must intend for the term to apply. See id. at 631.

Regarding jurisdiction, Teck argued in the district court that

there was no personal jurisdiction over it. The district court

held that there was personal jurisdiction, and Teck has not

appealed that determination. Because a party can waive per-

sonal jurisdiction, we are not required to consider it sua

sponte. See Smith v. Idaho, 392 F.3d 350, 355 n.3 (9th Cir.

2004) (citing the “longstanding rule that personal jurisdic-

tion, in the traditional sense, can be waived and need not be

addressed sua sponte”). Nevertheless, we agree with the dis-

trict court that there 1s specific personal jurisdiction over

Teck here.!© Because there is specific personal jurisdiction

16 We do not decide whether there is general personal jurisdiction over

Teck. Rather, we adopt the district court’s conclusion that there is spe-

cific personal jurisdiction over Teck here, based on Washington State’s

long-arm statute, which applies to “the commission of a tortious act”

within Washington, Wash. Rev. Code § 4.28.185, and our case law hold-

ing that “personal jurisdiction can be predicated on (1) intentional actions

(2) expressly aimed at the forum state (3) causing harm, the brunt of

which is suffered—and which the defendant knows is likely to be suf-

18a

over Teck here based on its allegedly tortious act aimed at

the state of Washington, the first Palmer benchmark is satis-

fied, and we can appropriately construe the term “any per-

son” to apply to Teck.

The second Palmer benchmark is that the legislature

must intend for the statute to apply to the situation. Except

for the statutory definition of “any person,” CERCLA is si-

lent about who is covered by the Act. But CERCLA is clear

about what is covered by the Act. CERCLA liability attaches

upon release or threatened release of a hazardous substance

into the environment. CERCLA defines “environment” to

include “any other surface water, ground water, drinking wa-

ter supply, land surface or subsurface strata, or ambient air

within the United States or under the jurisdiction of the

United States.” § 9601(8) (emphasis added). CERCLA’s

purpose is to promote the cleanup of hazardous waste sites

where there is a release or threatened release of hazardous

substances into the environment within the United States.

See ARC Ecology v. U.S. Dep't of the Air Force, 411 F.3d

1092, 1096-98 (9th Cir. 2005) (citing legislative history

demonstrating that Congress intended CERCLA to apply to

cleanup hazardous waste sites in the United States). Because

the legislature intended to hold parties responsible for haz-

ardous waste sites that release or threaten release of hazard-

[Footnote continued from previous page]

fered—in the forum state.” See Core—Vent Corp. v. Nobel Inds. AB, 1}

F.3d 1482, 1486 (9th Cir. 1993).

AT & T v. Compagnie Bruxelles Lambert, 94 F.3d 586 (9th Cir.

1996), is not to the contrary. There, AT & T claimed that Compagnie

Bruxelles Lambert was liable under CERCLA because its subsidiary op-

erated a site from which hazardous substances were released. /d. at 590—

91. We held that there was no specific jurisdiction over the parent com-

pany because (1) the parent company had insufficient independent con-

tacts with the United States to establish personal jurisdiction, and (2) the

subsidiary was not acting as the parent company’s alter ego. /d. Here,

Teck has sufficient independent personal contacts with the forum state to

justify specific personal jurisdiction.

19a

ous substances into the United States environment, the sec-

ond Palmer benchmark is satisfied here.

Although the Palmer analysis supports the proposition

that CERCLA applies to Teck, Palmer of course does not

address the distinction between domestic or extraterritorial

application of CERCLA. The Palmer analysis, however, in

what we have termed its second benchmark, brings to mind

the “domestic effects” exception to the presumption against

extraterritorial application of United States law. See Steele v.

Bulova Watch Co., 344 U.S. 280, 287-88, 73 S.Ct. 252, 97

L.Ed. 319 (1952) (finding jurisdiction in a trademark suit

against a person in Mexico who manufactured counterfeit

Bulova watches that then entered and caused harm within the

United States). The difference between a domestic applica-

tion of United States law and a presumptively impermissible

extraterritorial application of United States law becomes ap-

parent when we consider the conduct that the law prohibits.

In Steele the prohibited conduct, the unauthorized use and

reproduction of Bulova’s registered trademark, took place in

Mexico but the harm, the dilution of Bulova’s trademark,

took place in the United States. /d. at 287, 73 S.Ct. 252. The

Court therefore held that there was jurisdiction in that case.

Here, the operative event creating a liability under

CERCLA is the release or threatened release of a hazardous

substance. See § 9607(a)(4). Arranging for disposal of such

substances, in and of itself, does not trigger CERCLA liabil-

ity, nor-dees actual disposal of hazardous substances.!? A

17 The terms “disposal” and “release” are each defined in CERCLA.

“Disposal” is defined by reference to RCRA § 6903(3), which defines

“disposal” as “the discharge, deposit, injection, dumping, spilling, leak-

ing, 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.” CERCLA defines “release” as

“any spilling, leaking, pumping, pouring, emitting, emptying, discharg-

ing, injecting, escaping, leaching, dumping, or disposing into the envi-

20a

release must occur or be threatened before CERCLA is trig-

gered. A party that “arranged for disposal” of a hazardous

substance under § 9607(a)(3) does not become liable under

CERCLA until there is an actual or threatened release of that

substance into the environment. Arranging for disposal of

hazardous substances, in itself, is neither regulated under nor

prohibited by CERCLA. Further, disposal activities that

were legal when conducted can nevertheless give rise to li-

ability under § 9607(a)(3) if there is an actual or threatened

release of such hazardous substances into the environment.

See Cadillac Fairview/California, Inc. v. United States

(Cadillac Fairview/California I), 41 F.3d 562, 565-66 (9th

Cir. 1994) (holding that a party that sold a product to another

party “arranged for disposal” of a hazardous substance);

Cadillac Fairview/California, Inc. v. Dow Chem. Co. (Cadil-

lac Fairview/California II), 299 F.3d 1019, 1029 (9th Cir.

2002) (characterizing the conduct at issue in Cadillac Fair-

view/California | as “legal at the time’’).

The location where a party arranged for disposal or dis-

posed of hazardous substances is not controlling for purposes

of assessing whether CERCLA is being applied extraterrito-

rially, because CERCLA imposes liability for releases or

threatened releases of hazardous substances, and not merely

for disposal or arranging for disposal of such substances. !8

[Footnote continued from previous page]

ronment ....” § 9601(22). “[F]rom these definitions, we can conclude

that ‘release’ is broader than ‘disposal,’ because the definition of ‘release’

includes ‘disposing’ (also, it includes ‘passive’ terms such as ‘leaching’

and ‘escaping,’ which are not included in the definition of ‘disposal’).”

Carson Harbor Vill., 270 F.3d at 878.

18 CERCLA is a strict liability statute, and liability can attach even

when the generator has no idea how its waste came to be located at the

facility from which there was a release. See O'Neil v. Picillo, 883 F.2d

176, 183 & n.9 (Ist Cir. 1989). The three statutory defenses enumerated

in § 9607(b), including defenses for “‘an act of God,” “an act of war,” or

“an act or omission of a third party other than an employee or agent of the

defendant,” are “the only [defenses] available, and . . . the traditional eq-

2la

Because the actual or threatened release of hazardous sub-

stances triggers CERCLA liability, and because the actual or

threatened release here, the leaching of hazardous substances

from slag that settled at the Site, took place in the United

States, this case involves a domestic application of CER-

CLA.

Our conclusion is reinforced by considering CERCLA’s

place within the constellation of our country’s environmental

laws, and contrasting it with RCRA:

Unlike [CERCLA], RCRA is not principally

designed to effectuate the cleanup of toxic

waste sites or to compensate those who have

attended to the remediation of environmental

hazards. RCRA’s primary purpose, rather, is

to reduce the generation of hazardous waste

and to ensure the proper treatment, storage,

and disposal of that waste which is nonethe-

less generated, “so as to minimize the present

and future threat to human health and the en-

vironment.”

Meghrig, 516 U.S. at 483, 116 S.Ct. 1251 (quoting

§ 9602(b)) (internal citation omitted). RCRA regulates the

generation and disposal of hazardous waste, whereas CER-

CLA imposes liability to clean up a site when there are actual

or threatened releases of hazardous substances into the envi-

[Footnote continued from previous page]

uitable defenses are not.” California ex rel. Cal. Dep't of Toxic Sub-

stances Control v. Neville Chem. Co., 358 F.3d 661, 672 (9th Cir. 2004).

There is no requirefnent that the generator of hazardous substances intend

that the waste come to be located at a CERCLA facility. “In the case of

an actual release, the plaintiff need only prove that the defendant’s haz-

ardous materials were deposited at the site, that there was a release at the

site, and that the release caused it to incur response costs.” Carson Har-

bor Vill., Ltd. v. Unocal Corp., 287 F.Supp.2d 1118, 1186 (C.D. Cal.

2003) aff'd sub nom. Carson Harbor Vill., Ltd. v. County of Los Angeles,

433 F.3d 1260 (9th Cir. 2006).

22a

ronment. It is RCRA, not CERCLA, that governs prospec-

tively how generators of hazardous substances should dis-

pose of those substances, and it is the Canadian equivalent of

RCRA, not CERCLA, that regulates how Teck disposes of its

waste within Canada.

Here, the district court assumed, but did not decide, that

this suit involved extraterritorial application of CERCLA be-

cause “[t]o find there is not an extraterritorial application of

CERCLA in this case would require reliance on a legal fic-

tion that the ‘releases’ of hazardous substances into the Up-

per Columbia River Site and Lake Roosevelt are wholly

separable from the discharge of those substances into the Co-

lumbia River at the Trail Smelter.” However, what the dis-

trict court dismissed as a “legal fiction” is the foundation of

the distinction between RCRA and CERCLA. If the Trail

Smelter were in the United States, the discharge of slag from

the smelter into the Columbia River would potentially be

regulated by RCRA and the Clean Water Act. And that pro-

spective regulation, if any, would be legally distinct from a

finding of CERCLA liability for cleanup of actual or threat-

ened releases of the hazardous substances into the environ-

ment from the disposal site, here the Upper Columbia River

Site. That the Trail Smelter is located in Canada does not

change this analysis, as the district court recognized.

CERCLA is only concerned with imposing liability for

cleanup of hazardous waste disposal sites where there has

been an actual or threatened release of hazardous substances

into the environment. CERCLA does not obligate parties

(either foreign or domestic) liable for cleanup costs to cease

the disposal activities such as those that made them liable for

cleanup costs; regulating disposal activities is in the domain

of RCRA or other regulatory statutes.

We hold that applying CERCLA here to the release of

hazardous substances at the Site is a domestic, rather than an

extraterritorial application of CERCLA, even though the

23a

original source of the hazardous substances is located in a

foreign country.

V

We next address Teck’s only other argument—that it is

not covered by § 9607(a)(3) because it has not “arranged for

disposal ... of hazardous substances ... by any other party

or entity” because, if the facts in the complaint are taken as

true, Teck disposed of the slag itself. Preliminarily, we note

that neither Pakootas, nor the Order, specifically allege that

Teck is an arranger under § 9607(a)(3). Rather, the Order

states that Teck is a “responsible party under Sections 104,

107, and 122 of CERCLA, 42 U.S.C. §§ 9604, 9607, and

9622.” UAO at 6. The parties have, however, focused in

their arguments solely on § 9607(a)(3).!9

Section 9607(a)(3) holds liable parties that arranged for

the disposal of hazardous substances. It states, in relevant

part, the following:

any person who by contract, agreement, or

otherwise arranged for disposal or treatment,

or arranged with a transporter for the transport

for disposal or treatment, of hazardous sub-

stances owned or possessed by such person,

by any other party or entity, at any facility or

incineration vessel owned or operated by an-

other party or entity and containing such sub-

stances .. . shall be liable for. . .

certain costs of cleanup. § 9607(a)(3). We have previously

said that “neither a logician nor a grammarian will find com-

fort in the world of CERCLA,” Carson Harbor Vill., 270

F.3d at 883, a statement that applies with force to

§ 9607(a)(3). Section 9607(a)(3) does not make literal or

19 The parties have not briefed or argued whether Teck may be liable

under § 9607(a)(1), (2), or (4). We accordingly express no opinion on

whether Teck may be liable under these subsections.

24a

grammatical sense as written. It is by no means clear to what

the phrase “by any other party or entity” refers. Pakootas ar-

gues that it refers to a party who owns the waste; and Teck

argues that it refers to a party who arranges for disposal with

the owner. To make sense of the sentence we might read the

word “or” into the section, which supports Pakootas’s posi-

tion, or we might delete two commas, which supports Teck’s

position. Neither construction is entirely felicitous.

Section 9607(a)(3)’s phrase “by any other party or en-

tity” can be read to refer to “hazardous substances owned or

possessed by such person,” such that parties can be liable if

they arranged for disposal of their own waste or if they ar-

ranged for disposal of wastes owned “by any other party or

entity.” This would mean that a party need not own the

waste to be liable as an arranger. But it would require read-

ing the word “or” into the provision, so that the relevant lan-

guage would read “any person who .. . arranged for disposal

or treatment . . . of hazardous substances owned or possessed

by such person [or] by any other party or entity... .”

We followed this approach in Cadillac Fairview/California I,

where we said with forcible reasoning:

Liability is not limited to those who own the

hazardous substances, who actually dispose of

or treat such substances, or who control the

disposal or treatment process. The language

explicitly extends liability to persons “other-

wise arrang[ing]” for disposal or treatment of

hazardous substances whether owned by the

arranger or “by any other party or entity, at

any facility or incineration vessel owned or

operated by another party or entity.”

41 F.3d at 565 (quoting § 9607(a)(3)) (alteration in original);

see also Kalamazoo River Study Group v. Menasha Corp.,

228 F.3d 648, 659 (6th Cir. 2000) (holding that defendant

was potentially liable as an arranger when it discharged haz-

ardous substances into a river).

25a

The text of § 9607(a)(3) can also be modified to support

a different meaning, the one that Teck advances on this ap-

peal. Teck argues that the phrase “by any other party or en-

tity” refers to “or otherwise arranged for disposal or treat-

ment,” and so, the argument runs, arranger liability does not

attach unless one party arranged with another party to dis-

pose of hazardous substances. If we accept this position,

then a generator of hazardous substances who disposes of the

waste alone and with no other participant may defeat CER-

CLA liability, because the generator had not “arranged” with

a second party for disposal of the waste. But this interpreta-

tion would appear to require the removal of the two commas

that offset the phrase “by any other party or entity,” so that

the relevant language would read “any person who ... ar-

ranged for disposal or treatment ... of hazardous sub-

stances owned or possessed by such person[ | by any other

party or entity[ }.” In Kaiser Aluminum & Chemical Corp.

v. Catellus Development Corp., 976 F.2d 1338 (9th Cir.

1992) we perhaps implicitly, albeit summarily, suggested that

this reading might be appropriate, stating: “Nor has [Plain-

tiff] alleged that [Defendant] Ferry arranged for the contami-

nated soil to be disposed of ‘by any other party or entity’ un-

der 9607(a)(3). Ferry disposed of the soil itself by spreading

it over the uncontaminated areas of the property.” Jd. at

1341; see also Am. Cyanamid Co. v. Capuano, 381 F.3d 6,

24 (ist Cir. 2004) (“The clause ‘by any other party or entity’

clarifies that, for arranger liability to attach, the disposal or

treatment must be performed by another party or entity, as

was the case here.”). Thus it can be argued that an implica-

tion from Kaiser Aluminum supports Teck’s view.

Teck’s argument relying on implication from Kaiser

Aluminum would create a gap in the CERCLA liability re-

gime by allowing a generator of hazardous substances poten-

tially to avoid liability by disposing of wastes without involv-

ing a transporter as an intermediary. If the generator dis-

posed of the waste on the property of another, one could ar-

26a

gue that the generator would not be liable under § 9607(a)(1)

or (a)(2) because both subsections apply to the owner of a

facility; as we described above the relevant facility is the site

at which hazardous substances are released into the environ-

ment, not necessarily where the waste generation and dump-

ing took place. Liability as a transporter under § 9607(a)(4)

might not attach because transporter liability applies to “any

person who accepts or accepted any hazardous substance for

transport.” Although we do not here decide the contours of

transporter liability, one could argue that a generator who

owns hazardous substances cannot “accept” such hazardous

substances for transport because they are already held by the

generator. We hesitate to endorse a statutory interpretation

that would leave a gaping and illogical hole in the statute’s

coverage, permitting argument that generators of hazardous

waste might freely dispose of it themselves and stay outside

the statute’s cleanup liability provisions. We think that was

not what was intended by Congress’s chosen language and

statutory scheme.

The ambiguous phrase “by any other party or entity”

cannot sensibly be read to refer both to the language urged by

Pakootas and to that urged by Teck in their differing theories

of statutory interpretation. In interpreting the turbid phrase

and punctuation on which the parties have vigorously pressed

contradictory theories, we necessarily navigate a quagmire.

Yet, in the face of statutory ambiguity, § 9607(a)(3) “must be

given ‘a liberal judicial interpretation... consistent with

CERCLA’s overwhelmingly remedial statutory scheme.”

Cadillac Fairview/California I, 41 F.3d at 565 n.4 (quoting

United States v. Aceto Agric. Chem. Corp., 872 F.2d 1373,

1380 (8th Cir. 1989) (alteration in original)).

Pakootas and the State of Washington suggest that we

can resolve the inconsistent and mutually-exclusive language

in Cadillac Fairview/California I and Kaiser Aluminum by

dismissing as ambiguous or as dicta the statement in Kaiser

Aluminum that “{njor has [Plaintiff] alleged that Ferry ar-

27a

ranged for the contaminated soil to be disposed of ‘by any

other party or entity’ under 9607(a)(3).” 976 F.2d at 1341.

The argument is that it is unclear whether we meant in Kaiser

Aluminum that we did not need to reach the question because

Plaintiff had not alleged that Ferry was an arranger, or in-

stead that Plaintiff had alleged that Ferry was an arranger but

that we rejected that interpretation.

We conclude that Pakootas and the State of Washington

are correct. The two sentences from Kaiser Aluminum

quoted above are the only two sentences in that opinion to

discuss arranger liability. The opinion contains no analysis

of the text of § 9607(a)(3), and does not discuss arguments

for or against interpreting § 9607(a)(3) to require the in-

volvement of another party or entity for arranger liability to

attach. The ambiguous discussion of § 9607(a)(3) liability

was not in our view a holding, but rather a prelude to discuss-

ing why the defendant in Kaiser Aluminum was potentially

liable as an owner of a facility under § 9607(a)(2) or as a

transporter under § 9607(a)(4). And perhaps most impor-

tantly, the statement in question may be simply a description

of what was not alleged by a party, rather than our court’s

choice of a rule of law.

Further, the statement in Kaiser Aluminum bears the

hallmarks of dicta. See United States v. Johnson, 256 F.3d

895, 915 (9th Cir. 2001) (en banc) (Kozinski, J., concurring)

(“Where it is clear that a statement is made casually and

without analysis, where the statement is uttered in passing

without due consideration of the alternatives, or where it is

merely a prelude to another legal issue that commands the

panel’s full attention, it may be appropriate to re-visit the is-

sue in a later case.”).29

20° Moreover, a characterization of the statement in Kaiser Aluminum as

a dictum, or as merely reflecting the absence of an allegation by the plain-

tiff, is consistent with our preexisting circuit authority, not addressed in

Kaiser Aluminum, which had suggested that a generator could be liable

under § 9607(a)(3) even if a second party was not involved. See Ascon

28a

Because we view the statement in Kaiser Aluminum as

offhand, unreasoned, and ambiguous, rather than as an in-

tended choice of a rule, we consider the Ninth Circuit’s law

to be represented by Cadillac Fairview/California I. And

under Cadillac Fairview/California I, the phrase “by any

other party or entity” refers to ownership of the waste, such

that one may be liable under § 9607(a)(3) if they arrange for

disposal of their own waste or someone else’s waste, and that

the arranger element can be met when disposal is not ar-

ranged “by any other party or entity.” We hold instead that

Teck is potentially liable under § 9607(a)(3), and we reject

Teck’s argument that it is not liable under § 9607(a)(3) be-

cause it did not arrange for disposal of its slag with “any .

other party or entity.”

VI

In conclusion, we hold that the district court correetly

denied Teck’s motion to dismiss Pakootas’s complaint for

failure to state a claim, and reject Teck’s arguments to the

contrary. Applying CERCLA to the Site, as defined by the

Order issued by the EPA, is a domestic application of CER-

CLA. The argument that this case presents an extraterritorial

application of CERCLA fails because CERCLA liability

does not attach until there is an actual or threatened release of

hazardous substances into the environment; the suit concerns

actual or threatened releases of heavy metals and other haz-

ardous substances into the Upper Columbia River Site within

the United States. We reject Teck’s argument that it is not

liable under § 9607(a)(3) because it did not arrange for dis-

posal of hazardous substances “by any other party or entity.”

AFFIRMED.

[Footnote continued from previous page]

Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1156 (9th Cir. 1989) (re-

versing the district court’s dismissal of Ascon’s complaint for failure to

state a claim because Ascon alleged that “the eleven oil company defen-

dants and four transporter defendants deposited hazardous waste onto the

property”).

29a

APPENDIX B

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF WASHINGTON

JOSEPH A. PAKOOTAS, an

individual and enrolled member

of the Confederated Tribes of

the Colville Reservation and

DONALD R. MICHEL, an in-

dividual and enrolled member

of the Confederated Tribes of

the Colville Reservation,

No. CV-04-256-AAM

ORDER DENYING

MOTION TO DIS-

MISS

Plaintiffs,

VS.

TECK COMINCO

METALS, LTD.,

a Canadian corporation,

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

Defendant. )

)

BEFORE THE COURT is the defendant’s Motion To

Dismiss (Ct. Rec. 6). The motion was heard with oral argu-

ment on November 4, 2004. Paul J. Dayton, Esq., argued on

behalf of plaintiffs Pakootas and Michel. Steven J. Thiele,

Esq., argued on behalf of intervenor-plaintiff, State of Wash-

ington. Gerald F. George, Esq., and Thomas A. Campbell,

Esq., argued on behalf of defendant.

30a

I. BACKGROUND

Plaintiffs Joseph A. Pakootas and Donald R. Michel are

enrolled members of the Confederated Tribes of the Colville

Reservation who, under the “citizen suit” provision of the

Comprehensive Environmental Response, Compensation,

and Liability Act (CERCLA), 42 U.S.C. Section 9601 et seq.,

have commenceé this action to enforce the Unilateral Admin-

istrative Order for Remedial [nvestigation/Feasibility Study

(UAO) issued to defendant Teck Cominco Metals, Ltd.,

(TCM), on December 11, 2003 by the United States Envi-

ronmental Protection Agency (EPA). The State of Washing-

ton is also a plaintiff, having intervened in the litigation as a

matter of right under CERCLA.

The defendant TCM is a Canadian corporation which

owns and operates a smelter in Trail, British Columbia, lo-

cated approximately 10 Columbia River miles north of the

United States-Canada border. The UAO directs TCM to con-

duct a Remedial Investigation/Feasibility Study (RI/FS) to

investigate and determine the full nature of contamination at

the “Upper Columbia River Site” due to materials disposed

of into the Columbia River from defendant’s smelter. The

“Upper Columbia River Site” includes “all areas within the

United States where hazardous substances from [defendant’s]

operations have migrated or materials containing hazardous

substances have come to be placed.” (UAO at p. 7, Ex. A to

Defendant’s Memorandum).

Defendant moves to dismiss this action, contending the

court does not have subject matter jurisdiction (Fed. R. Civ.

P. 12(b){!)), does not have personal jurisdiction (Fed. R. Civ.

P. 12(b)(2)), and that plaintiffs’ complaints fail to state

claims upon which relief can be granted (Fed. R. Civ. P.

12(b)(6)). Specifically, defendant contends the provisions of

CERCLA cannot be applied to a Canadian corporation for

actions taken by that corporation which occur within Canada.

31a

Il. DISCUSSION

A. Subject Matter Jurisdiction

This case arises under CERCLA and therefore, there is a

federal question which confers subject matter jurisdiction on

this court. See 42 U.S.C. § 9613(b) and § 9659(c).

A claim that a right exists under federal law is enough

for jurisdiction unless the claim is insubstantial or frivolous.

A substantial claim that a remedy may be implied from a

federal statute is enough for jurisdiction. If it is held that fed-

eral law does not provide for the remedy, the dismissal

should be on the merits rather than for want of jurisdiction.

ARC Ecology, 294 F.Supp.2d 1152, 1156 (N.D. Cal. 2003).

Whether the complaint states a cause of action upon which

relief could be granted is a question of law and just like is-

sues of fact, it must be decided after and not before the court

has assumed jurisdiction over the controversy. /d. In ARC

Ecology, the district court found it had subject matter juris-

diction to adjudicate the novel claim that CERCLA applies

extraterritorially. Jd.

Plaintiffs’ CERCLA claims are not insubstantial or

frivolous. This court has subject matter jurisdiction to de-

termine whether plaintiffs’ claims seek to apply CERCLA

extraterritorially and if so, whether that is permissible under

CERCLA. That determination is made infra under Fed. R.

Civ. P. 12(b)(6).

B. Personal Jurisdiction

Absent one of the traditional bases for personal jurisdic-

tion- presence, domicile, or consent- due process requires a

defendant have “certain minimum contacts with [the forum

state] such that the maintenance of the suit does not offend

traditional notions of fair play and substantial justice.” Jnter-

national Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct.

154 (1945). The forum state must have a sufficient relation-

ship with the defendants and the litigation to make it reason-

32a

able to require them to defend the action in a federal court

located in that state. The purpose of the “minimum contacts”

requirement is to protect a defendant against the burdens of

litigating at a distant or inconvenient forum and insure that

states do not reach out beyond the limits of their sovereignty

imposed by their status in a federal system. World-Wide

Volkswagen Corp. v. Woodson, 444 U.S. 286, 291, 100 S.Ct.

559 (1980).

The extent to which a federal court can exercise personal

jurisdiction, absent the traditional bases of consent, domicile

or physical presence, depends on the nature and quality of

defendant’s “contacts” with the forum state. If defendant’s

activities in the forum state are “substantial, continuous and

systematic,” a federal court can, if permitted by the state’s

long-arm statute, exercise jurisdiction as to any cause of ac-

tion, even if unrelated to defendant’s activities within tue

state. Perkins v. Benguet Consolidated Mining Co., 342 U.S.

437, 445, 72 S.Ct. 413 (1952).

Even if a non-resident defendant’s “contacts” with the

forum state are not sufficiently “continuous and systematic”

for general jurisdiction, the defendant may still be subject to

jurisdiction on claims related to its activities there. This

“limited” or “specific” personal jurisdiction requires a show-

ing that: (1) the out-of-state defendant purposefully directed

its activities toward residents of the forum state or otherwise

established contacts with the forum state; (2) plaintiff's cause

of action arises out of or results from the defendant’s forum-

related contacts; and (3) the forum’s exercise of personal ju-

risdiction in the particular case must be reasonable in that it

must comport with “fair play and substantial justice.” Bur-

ger King Corp. v. Rudzewicz, 471 U.S. 462, 473-76, 105

S.Ct. 2174 (1985). The defendant must have purposefully

directed its activities at forum residents, or purposefully

availed itself of the privilege of conducting activities within

the forum state, thus invoking the benefits and protections of

local law. Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct.

33a

1228 (1958). This protects against a nonresident defendant

being haled into local courts solely as the result of “random,

fortuitous or attenuated” contacts. Burger King, 471 U.S. at

475. “(T]he foreseeability that is critical to due process

analysis . . . is that the defendant’s conduct and connection

with the forum state are such that he should reasonably an-

ticipate being haled into court there.” World-Wide Volks-

wagen, 444 U.S. at 297.

Washington’s long-arm statute, found at RCW 4.28.185,

provides!:

(1) Any person, whether or not a citizen or

resident of this state, who in person or through

an agent does any of the acts in this section

enumerated, thereby submits said person... .

to the jurisdiction of the courts of this state as

to any cause of action arising from the doing

of any said acts:

(b) The commission of a tortious act within

this state;

(3) Only causes of action arising from acts

enumerated herein may be asserted against a

defendant in an action in which jurisdiction

over him based upon this section.

If a non-resident, acting entirely outside of the forum

state, intentionally causes injuries within the forum state, lo-

cal jurisdiction is presumptively reasonable. Under such cir-

cumstances, the defendant must “reasonably anticipate” be-

ing haled into court in the forum state. Calder v. Jones, 465

U.S. 783; 790, 104 S.Ct. 1482 (1984). Personal jurisdiction

! A federal district court must look to the law of the forum state in

determining whether it may exercise personal jurisdiction over an out-of-

state defendant. MacDonald v. Navistar International Transp. Corp., 143

F.Supp.2d 918 (S.D. Ohio 2001).

34a

can be established based on: (1) intentional actions; (2) ex-

pressly aimed at the forum state; (3) causing harm, the brunt

of which ts suffered, and which defendant knows is likely to

be suffered in the forum state. Core-Vent Corp. v. Nobel

Inds. AB, \\ F.3d 1482, 1486 (9th Cir. 1994). The “express

aiming” requirement is satisfied when it is alleged the non-

resident engaged in “wrongful conduct targeted at a plaintiff

whom the defendant knows to be a resident of the forum

state.” Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223

F.3d 1082, 1087 (9th Cir. 2000).

The facts alleged in the individual plaintiffs’ complaint

and the State of Washington’s complaint-in-intervention sat-

isfy this three-part test.2 The complaints allege that from ap-

proximately 1906 to mid-1995, defendant generated and dis-

posed of hazardous substances directly into the Columbia

River and that these substances were carried downstream into

the waters of the United States where they have eventually

accumulated and cause continuing impacts to the surface wa-

ter and ground water, sediments, and biological resources

which comprise the Upper Columbia River and Franklin D.

Roosevelt Lake. The allegation is that disposing of hazard-

ous substances into the Columbia River is an intentional act

expressly aimed at the State Washington in which the Upper

Columbia River and Franklin D. Roosevelt Lake are located.

This disposal causes harm which defendant knows is likely to

- Although defendant is the moving party on a motion to dismiss for

lack of personal jurisdiction, plaintiffs are the ones who invoked the

court’s jurisdiction and bear the burden of proving the necessary jurisdic-

tional facts. Flynt Distrib. Co., Inc., v. Harvey, 734 F.2d 1389, 1392 (9th

Cir. 1984). Motions to dismiss under Rule 12(b)(2) may test either the

plaintiff's theory of jurisdiction or the facts supporting the theory. In

evaluating plaintiffs’ jurisdictional theory, the court need only determine

whether the facts alleged, if true, are sufficient to establish jurisdiction.

No evidentiary hearing or factual determination is necessary. Credit

Lyonnais Securities (USA), Inc. v. Alcantara, 183 F.3d 151, 153 (2nd Cir.

1999).

35a

be suffered downstream by the State of Washington and

those individuals, such as Pakootas and Michel, who fish and

recreate in the Upper Columbia River and Lake Roosevelt.

The burden is on the defendant to prove the forum’s ex-

ercise of jurisdiction would not comport with “fair play and

substantial justice.” Amoco Egypt Oil Co. v. Leonis Naviga-

tion Co., 1 F.3d 848, 851-52 (9th Cir. 1993). If a non-

resident has deliberately engaged in significant activities

within the forum state, “it is presumptively not unreasonable

to require him to submit to the burdens of litigation in that

forum as well.” Burger King, 471 U.S. at 476. Furthermore,

if defendant “purposefully had directed his activities at forum

residents . . . he must present a compelling case” that the ex-

ercise of jurisdiction would in fact be unreasonable. /d. at

477.

In determining the “reasonableness” of exercising per-

sonal jurisdiction, the following factors must be considered:

(1) the extent of defendant’s purposeful interjection; (2) the

burden on defendant in defending in the forum; (3) the extent

of conflict with the sovereignty of the defendant’s state; (4)

the forum state’s interest in adjudicating the dispute; (5) the

most efficient judicial resolution to the controversy; (6) the

importance of the forum to plaintiff's interest in convenient

and effective relief; and (7) the existence of an alternative

forum. Core-Vent, 11 F.3d at 1487-88. No one factor is dis-

positive and the court must balance all of the factors. /d. at

1488. The “reasonableness” requirement may defeat local

jurisdiction even if defendant has purposefully engaged in

forum-related activities. Burger King, 471 U.S. at 477-78.

The exercise of jurisdiction over defendant TCM does

not offend traditional notions of fair play and substantial jus-

tice. The burden on defendant in defending in this forum is

not great. Trail, B.C. is located appicximately 10 miles from

the Eastern District of Washington. For reasons discussed

below, the court finds the exercise of personal jurisdiction

36a

over defendant does not create any conflicts with Canadian

sovereignty. It is obvious the State of Washington has a sig-

nificant interest in adjudicating this dispute, as evidenced by

its intervention as a plaintiff, and venue is proper here under

CERCLA (42 U.S.C. § 9613(b) and § 9659(b)(1)).

The facts alleged in plaintiffs’ complaints establish this

court’s specific, limited personal jurisdiction over the defen-

dant.

C. Failure To State A Claim

A Rule 12(b)(6) dismissal is proper only where there is

either a “lack of a cognizable legal theory” or “the absence of

sufficient facts alleged under a cognizable legal theory.”

Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th

Cir. 1990). In reviewing a 12(b)(6) motion, the court must

accept as true all material allegations in the complaint, as

well as reasonable inferences to be drawn from such allega-

tions. Mendocino Environmental Center v. Mendocino

County, 14 F.3d 457, 460 (9th Cir. 1994); NL Indus., Inc. v.

Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). The sole issue

raised by a 12(b)(6) motion is whether the facts pleaded, if

established, would support a claim for relief; therefore, no

matter how improbable those facts alleged are, they must be

accepted as true for purposes of the motion. Neitzke v. Wil-

liams, 490 U.S. 319, 326-27, 109 S.Ct. 1827 (1989).

Defendant contends the UAO cannot be enforced against

a Canadian corporation based on conduct which occurred in

Canada. At the outset, there is some question whether this

case really involves an extraterritorial application of CER-

CLA, notwithstanding that defendant is a Canadian corpora-

tion and its Trail, B.C. smelter is allegedly the source of haz-

ardous substances which have by means of the Columbia

River migrated into the Upper Columbia River and Lake

Roosevelt. “CERCLA’s legislative history reflects a decid-

edly domestic focus.” ARC Ecology v. U.S. Dept. of the Air

Force, 294 F.Supp.2d at 1156. CERCLA provides a mecha-

37a

nism for cleaning up hazardous waste sites and imposes the

cost of clean-up on those responsible for the contamination.

Pennsylvania v. Union Gas Co., 491 U.S. 1, 7, 109 S.Ct.

2273 (1989). “CERCLA . . . addresses the cleanup of haz-

ardous substances released into the environment... .” West-

farm Assoc. Ltd. P’ship v. Int’l Fabricare, 846 F.Supp. 422,

434 (D.Md. 1993).

The Upper Columbia River Site, including Lake Roose-

velt, is entirely within the United States. “The Site will in-

clude all areas in the United States where hazardous sub-

stances from Respondent’s Trail operations have migrated or

materials containing hazardous substances have come to be

placed.” (UAO at pp. 7-8). CERCLA is concerned with the

“release” of hazardous substances into the Upper Columbia

River Site. According to the UAO at pp. 5-6: “The presence

of hazardous substances at the Site or the past, present, or

potential migration of hazardous substances currently located

at or emanating from the Site, constitute actual and or threat-

ened ‘releases.”” Under CERCLA, a “release” means any

spilling, leaking, pumping, pouring, emitting, emptying, dis-

charging, injecting, escaping, leaching, dumping, or dispos-

ing into the environment... . ” 42 U.S.C. § 9601(22). CER-

CLA’s definition of “environment” is limited to waters, land,

and air under the management authority of the United States,

within the United States, or under the jurisdiction of the

United States. 42 U.S.C. § 9601(8).

It is of course true, however, that these “releases” in the

United States would not exist without the activity at the

smelter located in British Columbia, prompting defendant to

argue that what plaintiffs effectively seek to do here with

CERCLA is regulate the discharge of hazardous substances

from the Trail smelter. To find there is not an extraterritorial

application of CERCLA in this case would require reliance

on a legal fiction that the “releases” of hazardous substances

into the Upper Columbia River Site and Lake Roosevelt are

wholly separable from the discharge of those substances into

38a

the Columbia River at the Trail smelter. The court is hesitant

to do that and therefore, will assume this case involves an

extraterritorial application of CERCLA to conduct occurring

outside U.S. borders. In doing so, however, the court does

not find that said application is an attempt to regulate the dis-

charges at the Trail smelter, but rather simply to deal with the

effects thereof in the United States.

Congress has the authority to enforce its laws beyond the

territorial boundaries of the United States. Equal Employ-

ment Opportunity Commission v. Arabian American Oil Co.,

499 U.S. 244, 248, 111 S.Ct. 1227 (1991) (“Aramco”). It is,

however, a longstanding principle of American law “that leg-

islation of Congress, unless a contrary intent appears, is

meant to apply only within the territorial jurisdiction of the

United States.” /Jd., quoting Foley Bros., Inc. v. Filardo, 336

U.S. 281, 285, 69 S.Ct. 575 (1949). This “canon of construc-

tion . . . is a valid approach whereby unexpressed congres-

sional intent may be ascertained.” /d., quoting Foley Bros.,

336 U.S. at 285. “It serves to protect against unintended

clashes between our laws and those of other nations which

could result in international discord.” Jd.

In applying this canon of construction, courts look to see

whether “language in the [relevant Act] gives any indication

of a congressional purpose to extend its coverage beyond

places over which the United States has sovereignty or has

some measure of legislative control.” Jd., quoting Foley

Bros., 336 U.S. at 285 (emphasis added). It is assumed Con-

gress legislates “against the backdrop of the presumption

against extraterritoriality.” /d. Unless the affirmative inten-

tion of Congress is clearly expressed, it must be presumed

Congress “is primarily concerned with domestic condi-

tions.” /d., quoting Foley Bros., 336 U.S. at 285 (emphasis

added).

In Aramco, the Supreme Court held Title VII of the 1964

Civil Rights Act did not apply extraterritorially to regulate

39a

the employment practices of U.S. firms that employ Ameri-

can citizens abroad. 499 U.S. at 259. The discriminatory

conduct that allegedly violated Title VIL occurred within the

jurisdiction of another sovereign (Saudi Arabia), although

perpetrated by a U.S. firm. Since the petitioners advanced a

construction of Title VII that would have logically resulted in

the statute’s application to foreign as well as American em-

ployers, the Supreme Court held the presumption against ex-

traterritoriality was necessary to avoid the inevitable clash

between foreign and domestic employment laws. /d. at 255-

56.

“Extraterritoriality is essentially, and in common sense, a

jurisdictional concept concerning the authority of a nation to

adjudicate the rights of particular parties and to establish the

norms of conduct applicable to events or persons outside its

borders.” Environmental Defense Fund v. Massey, 986 F.2d

528, 530 (D.C. Cir. 1993). The extraterritoriality principle

provides that “[rjules of the United States statutory law,

whether prescribed by federal or state authority, apply only to

conduct occurring within, or having effect within, the ter-

ritory of the United States.” /d., quoting Restatement (Sec-

ond) of Foreign Relations Law of the United States § 38

(1965), and Restatement (Third) of Foreign Relations Law of

the United States § 403, Com. (g) (1987). (Emphasis added).

In Massey, the D.C. Circuit discussed those situations

when the presumption against extraterritorial application of a

statute does not apply. According to the court, the Supreme

Court’s decision in Aramco made explicit that the presump-

tion does not apply where there is an “‘affirmative intention

of the Congress clearly expressed’ to extend the scope of the

statute to conduct occurring within other sovereign nations.”

986 F.2d at 531. Second, “the presumption is generally not

applied where the failure to extend the scope of the statute to

a foreign setting will result in adverse effects within the

United States.” /d. The court noted that two prime examples

of this exception are the Sherman Anti-Trust Act, 15 U.S.C.

40a

§§ 1-7 (1976), and the Lanham Trade-Mark Act, 15 U.S.C.

§ 1051 et seq. (1976), which “have both been applied extra-

territorially where the failure to extend the statute’s reach

would have negative economic consequences within the

United States.” /d. The presumption against extraterritorial-

ity also does not apply when the conduct regulated by the

government occurs within the United States. Jd.3 “By defini-

tion, an extraterritorial application of a statute involves the

regulation of conduct beyond U.S. borders.” /d.

In Massey, the D.C. Circuit concluded there was no issue

of “extraterritoriality” regarding the application of the Na-

tional Environmental Policy Act (NEPA) to agency actions

in Antarctica. The court found that “since NEPA is designed

to regulate conduct occurring within the territory of the

United States, and imposes no substantive requirements

which could be interpreted to govern conduct abroad, the

presumption against extraterritoriality” did not apply. 986

F.2d at 533. Antarctica’s unique status in the international

arena as a “global commons” rather than a sovereign foreign

nation supported the circuit’s conclusion. The court noted

that where the U.S. “has some real measure of legislative

control over the region at issue, the presumption against ex-

traterritoriality is much weaker.” /d. And where there is no

potential for conflict between U.S. laws and the laws of other

nations, the purpose behind the presumption is eviscerated,

and the presumption against extraterritoriality applies with

significantly less force. Jd. According to Massey:

Applying the presumption against extraterrito-

riality here would result in a federal agency

being allowed to undertake actions signifi-

cantly affecting the human environment in

3 These “conduct” and “effects” tests are fundamental principles of

foreign relations law. See Tamari v. Bache & Co., 730 F.2d 1103, 1107-

08 and n.11 (7th Cir. 1984), citing Restatement (Second) Foreign Rela-

tions Law §§ 17 and 18 (1965).

4la

Antarctica, an area over which the United

States has substantial interest and authority,

without ever being held accountable for its

failure to comply with the decisionmaking

procedures instituted by Congress— even

though such accountability, if it was enforced,

would result in no conflict with foreign law or

a threat to foreign policy. NSF [National Sci-

ence Foundation] has provided no support for

its proposition that conduct occurring within

the United States is rendered exempt from

otherwise applicable statutes merely because

the effects of its compliance would be felt in

the global commons.

Id. at 536-37.

Although defendant TCM takes a dim view of Massey,

contending much what is says is mere dicta, the Ninth Circuit

apparently does not share that view. In /n re Simon, 153 F.3d

991, 995 (9th Cir. 1998), the Ninth Circuit noted that “[iJf

Congressional intent concerning extraterritorial application

cannot be divined, then courts will examine additional factors

to determine whether the traditional presumption against ex-

traterritorial application should be disregarded in a particular

case.’ First, “the presumption is generally not applied where

the failure to extend the scope of the statute to a foreign set-

ting will result in adverse effects within the United States.”

Id., quoting Massey, 986 F.2d at 531. Furthermore, the pre-

sumption against extraterritoriality is not applicable when the

4 Intent is analyzed by first examining the language of the act for indi-

cations of intent regarding extraterritorial application. In addition to the

plain statutory words, intent may be discerned with reference to similarly

phrased legislation or the overall statutory scheme. If these inquiries are

inconclusive, examination of legislative history is appropriate. Resort to

administrative interpretations of the law may be employed if the legisla-

tive history is inconclusive. Simon, 153 F.3d at 995, citing Aramco, 499

U.S. at 248, 250-51, and Foley Bros., 336 U.S. at 286-88.

42a

regulated conduct “is intended to and results in, substantial

effects within the United States.” /d., quoting Laker Air-

ways, Ltd., v. Sabena Belgian World Airlines, 731 F.2d 909,

925 (D.C. Cir. 1984). In Simon, the Ninth Circuit found the

district court had properly concluded that as to actions

against a bankruptcy estate, Congress had clearly intended

extraterritorial application of the Bankruptcy Code. Jd. at

996.

In Subafilms v. MGM-Pathe Communications Co., 24

F.3d 1088 (9th Cir. 1994), the Ninth Circuit considered

whether a claim for infringement can be brought under the

Copyright Act when the assertedly infringing conduct con-

sists solely of the authorization within the territorial bounda-

ries of the United States of acts that occur entirely abroad.

The circuit held that such allegations did not state a claim for

relief under the copyright laws of the United States.

The plaintiffs in Subafilms contended the copyright laws

extended to extraterritorial acts of infringement when such

acts result in adverse effects within the United States. The

circuit disagreed. It noted there was an “undisputed axiom”

that the copyright laws of the United States had no applica-

tion to extraterritorial infringement, that said axiom predated

the 1909 Copyright Act, that this principle of territoriality

had been consistently reaffirmed, and that there was no clear

expression of congressional intent in either the 1976 Copy-

right Act or other relevant enactments to alter the preexisting

extraterritoriality doctrine. /d. at 1095-96. Furthermore, in

1976, Congress chose to expand one specific extraterritorial

application of the Act by declaring that the unauthorized im-

portation of copyrighted works constitutes infringement even

when the copies lawfully were made abroad. Thus, “[h]ad

Congress been inclined to overturn the preexisting doctrine

twat mfringing acts that take place wholly outside the United

Staves are not actionable under the Copyright Act, it knew

how to do so.” /d. at 1096. Accordingly, the presumption

against extraterritoriality was fortified by the language of the

43a

Statute as set against its consistent historical interpretation.

Id. Obviously, because the case at bar presents a legal issue

of first impression, there is not an “undisputed axiom,” con-

sistently reaffirmed by the courts, that CERCLA does not

apply to extraterritorial conduct.

The Subafilms court discussed the fact that the “pre-

sumption is generally not applied where the failure to extend

the scope of the statute to a foreign setting will result in [ad-

verse] domestic effects.” J/d., quoting Massey, 986 F.2d at

531. The Ninth Circuit observed that “[iJn each of the statu-

tory schemes discussed by the Massey court, the ultimate

touchstone of extraterritoriality consisted of an ascertainment

of congressional intent; courts did not rest solely on the con-

sequences of a failure to give a statutory scheme extraterrito-

rial application.” Jd. And the circuit further observed that

even “[mJore importantly, as the Massey court conceded, . . .

application of the presumption is particularly appropriate

when ‘it serves to protect against unintended clashes between

our laws and those of other nations which could result in in-

ternational discord.” Jd. at 1096-97, quoting Aramco, 499

U.S. at 248. In a footnote, however, the circuit also conceded

that this was not the sole source of the presumption against

extraterritorial application because the presumption “is

rooted in a number of considerations, not the least of which is

the common-sense notion the Congress generally legislates

with domestic concerns in mind.” /d. At 1097, n.13, quot-

ing Smith v. United States, 507 U.S. 197, 113 S.Ct. 1178,

1183 n. 5 (1993) (emphasis added).

In Subafilms, the circuit found the “international dis-

cord” factor decisive in the case of the Copyright Act, fully

justifying application of the presumption against extraterrito-

riality, even assuming arguendo that “adverse effects” within

the United States “generally” would require a plenary inquiry

into Congressional intent. /d. at 1097. According to the cir-

cuit:

44a

[B]ecause an extension of the extraterritorial

reach of the Copyright Act by the courts

would in all likelihood disrupt the interna-

tional regime for protecting intellectual prop-

erty that Congress so recently described as es-

sential to furthering the goal of protecting the

works of American authors abroad . . . we

conclude that the Aramco presumption must

be applied.

Id. at 1098.

Here, defendant TCM contends the presumption against

extraterritorial application is not defeated because CERCLA

is “bare of any language affirmatively evidencing any intent

to reach foreign sources.” There is no dispute that CERCLA,

its provisions and its “sparse” legislative history, do not

clearly mention the liability of individuals and corporations

located in foreign sovereign nations for contamination they

cause within the U.S. At the same time, however, there is no

doubt that CERCLA affirmatively expresses a clear intent by

Congress to remedy “domestic conditions” within the territo-

rial jurisdiction of the U.S. That clear intent, combined with

the well-established principle that the presumption is not ap-

plied where failure to extend the scope of the statute to a for-

eign setting will result in adverse effects within the United

States, leads this court to conclude that extraterritorial appli-

cation of CERCLA is appropriate in this case.>

Under CERCLA, a “person” means an individual, firm,

corporation, association, partnership, consortium, joint ven-

ture, commercial entity, United States Government, State,

municipality, commission, political subdivision of a State, or

any interstate body. 42 U.S.C. § 9601(21). Defendant notes

5 This case is distinguishable from the situations in Aramco and As-

plundh Tree Expert Company v. National Labor Relations Board, 365

F.3d 168 (3d Cir. 2004), involving American employees working and

physically located in foreign lands (Saudi Arabia and Canada).

45a

that “State” is expressly defined to include the “several States

of the United States” and other possessions or territories of

the United States, § 9601(27), and that “Indian tribe” is de-

fined as a tribe recognized by the United States, § 9601(36).

Plaintiffs, however, are not seeking to enforce the UAO

against the Canadian government. They are attempting to

enforce it against a “corporation,” albeit a Canadian corpora-

tion. “Corporation” is defined g

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