Amicus Curiae Brief — Teck Cominco Metals, Ltd. v. Pakoototas (No. 06-1188)

(e) FILED

No. 06-1188 MAY 0 2 2097

IN THE OFFICE OF THE CLERK

SUPREME COURT, U.S.

Supreme Court of the Gnited States

TECK COMINCO METALS, LTD.,

Petitioner,

Vv.

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

BRIEF FOR AMICI CURIAE NATIONAL MINING

ASSOCIATION AND NATIONAL ASSOCIATION OF

MANUFACTURERS IN SUPPORT OF PETITIONER

Of Counsel:

HAROLD P. QUINN, JR. CATHERINE E. STETSON

TAWNY A. BRIDGEFORD Counsel of Record

NATIONAL MINING ASSOCIATION JESSICA L. ELLSWORTH

101 Constitution Avenue, N.W. HOGAN & HARTSON L.L.P.

Suite 500 East 555 Thirteenth Street, N.W.

Washington, D.C. 20001 Washington, D.C. 20004

(202) 463-2600 (202) 637-5600

JAW S. AMUNDSON

QUENTIN RIEGEL

NATIONAL ASSOCIATION

OF MANUFACTURERS

1331 Pennsylvania Avenue, N.W.

Washington, D.C. 20004

(202) 637-3000

Counsel for Amici Curiae

WiILSON-EPES PRINTING CO., INC. — (202) 789-0096 -— WASHINGTON, D.C. 20002

(i)

TABLE OF CONTENTS

ce Gigs ete |. ii

STATEMENT OF INTEREST

NEE SiR FIREIAED sevsecevesoresencssssesorseoveseeseoenesestoesenewess l

DREMEPILy OF ARGUMENT ......ccccrcessoscesesessssverooneeees 3

REASONS FOR GRANTING THE WRIT .................... 6

I. THE NINTH CIRCUIT’S DECISION INVITES

RETALIATION AGAINST AMERICAN

BUSINESSES AND FOSTERS UNCERTAINTY

AND DISCORD FOR NUMEROUS .

AMERICAN INDUSTRIES .......cccccsocosssossessseeresseress 6

A. The Ninth Circuit’s Decision Distorts The

Meaning Of The Presumption Against

Extraterritorial Application Of U.S. Law............. 6

B. The Ninth Circuit’s Decision Flouts The

International Mechanisms Long Deemed

Appropriate For Resolving Transboundary

LE iccildiicchibanaeesevvisatveevcieseveeeeceoses 9

C. The Ninth Circuit’s Decision Will Precipitate -

Retaliation, Uncertainty, And Discord

Throughout American Industries....................006 12

I]. THIS COURT’S REVIEW IS NEEDED TO

ESTABLISH NATIONAL UNIFORMITY ON

THE QUESTION OF ARRANGER

ct iatisiveesasancedvestsereveseveversoneneseenavere 17

ais lccsurersvevetexesanevesvcexserevesvsensnsesess 20

ii

TABLE OF AUTHORITIES

Page

CASES:

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

Oe Bde FP 8 Ce CR, FG wrnerisnicncthenecenescaneaperiveenii 8

American Banana Co. v. United Fruit Co.,

BAe Cl OE Ie ecisihicaintiaineehiniciniscietialine 6

American Cyanamid Co. v. Capuano,

Se a le ee wicictinieinidhsseaaiensniaianiainsiins 18

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

Be ha Ce TTD sciiesionsaasiniescttphedbiiietsshsdiandaiiechdnchadissanaed

Bowen v. Massachusetts, 487 U.S. 879 (1988)...............

Deaton v. United States, 541 U.S. 972 (2004)............0. 2

E.E.O.C. v. Arabian American Oil Co.,

TE ha APE SF iciiinetiesiliasibectlaeitiancetasaitieaialiolaa 4,6, 7

Engine Mfrs. Ass'n v. South Coast Air Quality

Mami. Dist., 539 U.S. 914 (2003) ........ccscccrccessseesees 2

F. Hoffman-La Roche Ltd. v. Empagran S.A.,

SIE Shen 6 ee ee cindsiedideacceabatcdnivaneidsiachncdaniiens 7

Hartford Fire Ins. Co. v. California,

FO ie Fe ee cetaceans aiisabaiiadaciincancciniasiaeia 7

Iselin v. United States, 270 U.S. 245 (1926)...........:2000 19

Lamie v. United States Tr., 540 U.S. 526

CF ccinincsttnccomeieaigdiadiibc: deena igsumcuaateans 19, 20

Mobil Oil Corp. v. Higginbotham,

436 U.S. 618 6 EUR eae ETRE aE eC 20

Murray v. Schooner Charming Betsy,

Fee rice iecaievcccenensepesericctaeens 6-7

Robinson v. Shell Oil Co.,

FER as Bee CT iciecenncniieiailiniiee ceipticteteudoa 19

Small v. United States, 544 U.S. 385 (2005)... 7

ill

TABLE OF AUTHORITIES—Continued

South Florida Water Mgmt. Dist. v. Montalvo,

Be Pe re ls Fe iccrircnisncitecnnssscsorovesectones

United States v. 150 Acres of Land,

204 F.3d 698 (6th Cir. 2000).................ccsccseccsrcsersees

United States v. CDMG Realty Co.,

Pe Fe le PP ortcrcrstvctecccnsevecssnesseasvonsacons

United States v. Township of Brighton,

153 F.3d 307 (6th Cir, 1998) ..ccccccccccccccsccecccsccccsesssee

Washington State Dep’t of Social & Health

Servs. v. Guardianship Estate of Keffeler,

Sa as Pe TIT do cessdikencechunabutceeninsieivendatintronniacetuand

STATUTES:

a ielielssedl

OR I i ececstnincenstdenisnannecestesininacnsnc

HD USE, 5 POD IR) geaneccccecececccceccccevesecccccecesscorosees Mise

42 U.S.C. § 9607(a)(3) -.cceccssecscseescsseecserscsseccssesesesecsseceen

GRATE BGI on icccsescscesnsnevscsnencecsnsormnsone

Cole. Rev. Bt. GE 13-0. S- 108 66 26. cscccccveccccsecsccconvnececoees

Mich. Laws Ann. §§ 324.1801 ef Seq. ........:eeeeeseeeeeeeees

Or. Rev. Stat. §§ 468.078 €f 5€G. ..ccccccccssssesscsesssseeessesessees

REGULATIONS:

| Cee em ne eee enue nS

oi icone

Page

19

1V

TABLE OF AUTHORITIES—Continued

RULES:

A 5 EERE prune P nan Feo Eore MCC eee ONE a Pet RO oe

CI IN aaa asia hci tiseusiooscceebucseaeuseusalvbiapeadaateasee

LEGISLATIVE MATERIALS:

S. Rep. No. 93-906 (1974) ........ a

Sen. Bill No. 906 (110th Cong.) (introduced

Ne i MIND iid oink sSeniitdaatitaeciaaeseighinitiosaaniseedalasaaieiii

TREATIES:

Agreement Concerning the Traisboundary

Movement of Hazardous Waste,

Oct. 28, 1986, TIAS No. 11099, Art. 7.........000....

OTHER AUTHORITIES:

John W. Boscariol, An Anatomy of A Cuban Pyjama

Crisis: Reconsidering Blocking Legislation in

Response to Extraterritorial Trade Measures of

the United States, 30 Law & Pol’! Int’] Bus. 439

SE iisesicSibisisincsscksseveionniadinibciguessadasdulsntucaanuumusecceoc

Letter from Paul Cellucci, Ambassador of the

United States of America to Canada to Michael

O. Leavitt, Administrator, U.S. Environmental

Protection Agency (June 15, 2004) ........... eee eee

Clean Air Report, /ndustry Calls for Relaxed Haze

Rule Following New Emissions Study (Mar. 9,

2006), available at 2006 WLNR 3888059................

Decl. of the United Nations Conf. on the Human

Env't, Principie 22 (June 16, 1972)..........cceseccoseseseess

Vv

TABLE OF AUTHORITIES—Continued

Page

ECC, “The Role of ECC,” available at

http://www.env.gov.bc.ca/spd/ecc/role. html............ 1]

EPA Press Release, “Canada and U.S. Move

Forward to Reduce Air Pollutants” (Apr. 13,

2007), available at http://www.epa.gov/

airmarkets/progsregs/usca/pressrelease. html ............ 10

Leta Hong Fincher, Voice of America News:

Worldwatch Institute—16 of the World’s Most-

Polluted Cities in China (June 28, 2006)....700.......... 15-16

Foreign Extraterritorial Measures Act, R.S.C..,

ID decatincitiereeesccpsinwcneenevsveccssvcnesosenns 14

Gut Dam Arbitration/Settlement (U.S. v. Can.),

reprinted in 8 1.L.M. 118 (1969) 0.00... eee eceseeeeeeees 10

Shi-Ling Hsu & Austen L. Parrish, “Litigating

Canada-U.S. Transboundary Harm:

International Environmental Lawmaking and the

Threat of Extraterritorial Reciprocity,” 48 Va. J.

of Int’ L. 1 (publication forthcoming Oct. 2007),

available at http://ssrn.com/abstract=9675 19 .......... 13-14

IJC, “Transboundary Air Pollution, Detroit and St.

Clair River Areas” (1972), available at http://

www. ijc.org/php/publications/pdf/1D380.pdf........... 9

IJC, “Transboundary Impacts of the Missisquoi Bay

Causeway and the Missisquoi Bay Bridge

Project” (2005), available at http://www.

ijc.org/php/publications/pdf/1D1570.pdf................... 9

Michael Ilg, Environmental Harm and Dilemmas of

Self-Interest: Does International Law Exhibit

Collective Learning?, 18 Tul. Envtl. L.J. 59

SUIT Secs whsssaiichnsciabiosicoiisibiewssdenssisatiladenctaapaalasmdedeeiasanieas 15

vi

TABLE OF AUTHORITIES—Continued

Page

Christopher L. Ingrim, Choice-of-Law Clauses:

Their Effect on Extraterritorial Analysis—A

Scholar's Dream, A Practitioner’s Nightmare,

28 Creighton L. Rev. 663 (1995) 00.0.0... ceeeseseeeeeeees 17

Nancy Kubasek & Jay Threet, Cooper Industries, Inc.

v. Aviall Services, Inc.: Time for a Legislative

Response to Restore Voluntary Remediation, 51

St. Louis U. L.J. 165 (2006).........eceeseeseeecseeseeneesenees 15

Manitoba, Transboundary Pollution Reciprocal

Access Act, C.C.S.M., 1985, c. T145..................00000 11

NMA, The Economic Contributions of the

Mining Industry in 2005 (2007).............:-eeeeeeee 2

Prince Edward Island, Transboundary Pollution

(Reciprocal Access) Act, R.S.P.E.I., 1988,

Wh Sole aiiceiceiscaaicaildidnsalabebncananaiiabbaiiaisicisiahialakabiliadtinieiataokic 1]

Province of Ontario Amicus Br., United States

v. Cinergy Corp., Case No. 06-1224 (7th Cir.)

Ge St WS snescstsictasinincisieimdiainbetiiniisiiniosniees 14

Rokjin J. Park, et al., “Natural and Transboundary

Pollution Influences on Sulfate-Nitrate-

Ammonium Aerosols in the United States,”

109 J. of Geophysical Research D15204 (2004)....... 15

Austen L. Parrish, 7rail Smelter Deja Vu:

Extraterritoriality, International Environmental

Law, and the Search for Solutions to Canadian-

U.S. Transboundary Water Pollution Disputes,

ee ele Es i ce I citaesintcnichtnncemtientorevcconnes 13

Rio Decl. on Env’t and Dev., Principle 13

8 ERIE IY Reirson rine at Oe 10

Trail Smelter Arbitral Tribunal (U.S. v. Can.)

(Mar. 11, 1941), 35 Am. J. Int’] L. 684 (1941)......... 10

Vii |

Tas E OF AUTHORITIES—Continued

Page

Trail Smelter Arbitral Tribunal (U.S. v. Can.)

(Apr. 16, 1938), 33 Am. J. Int’! L. 182 (1939).......... 10

Uniform Transboundary Pollution Reciprocal

Access Act (Uniform Act), 9C U.L.A. 387 (2001)... 11

United Nations, Int’] Law Comm’n, Draft Principles

on the Allocation of Loss in the Case of

Transboundary Harm Arising Out of Hazardous

Activities, 56th Session, Principles 4, 6

CAF AIL BGE) CY ZIO®) .ccreceserccsesovsecccestacsesersesens 11

United States Department of State, Background Note:

Canada (Mar. 2007), available at :

http://www.state.gov/r/pa/ei/bgn/2089.htm................ 9

IN THE

Supreme Court of the Gnited States

No. 06-1188

TECK COMINCO METALS, LTD.,

Petitioner,

v.

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

BRIEF FOR AMICI CURIAE NATIONAL MINING

ASSOCIATION AND NATIONAL ASSOCIATION OF

MANUFACTURERS IN SUPPORT OF PETITIONER

STATEMENT OF INTEREST

OF AMICI CURIAE!

The National Mining Association (“NMA”) is a national

trade association that represents all aspects of the mining

industry, including producers of most of America’s coal,

metals, industrial and agricultural minerals; manufacturers of

mining and mineral processing machinery and supplies; bulk

transporters; mineral processors; financial and engineering

' No counsel for any party authored this brief in whole or in

part, and no person or entity, other than amici curiae and their

members, made a monetary contribution to the preparation or

submission of this brief. S. Ct. Rule 37.6. Consent letters from all

parties have been filed with the Clerk.

2

firms; and other businesses related to mining. The mining

industry produces vital resources needed to fuel our economy

and manufacture virtually all commodities sold in domestic

and foreign markets. In 2005, the U.S. mining industry

produced $78.4 billion of finished mineral, metal and fuel

products; these products were in turn used to create an

additional $2 trillion worth of consumer and industrial goods.

See The Economic Contributions of the Mining Industry in

2005 at 3, prepared for National Mining Association (2007).

The National Association of Manufacturers (“NAM”) is the

nation’s largest industrial trade association, representing

small and large manufacturers in every industrial sector and

in all 50 states. Its mission is to enhance the competitiveness

of manufacturers by shaping a legislative and regulatory

environment conducive to U.S. economic growth and to

increase understanding among policymakers, the media, and

the general public about the vital role of manufacturing to

America’s economic future and living standards.

Amici regularly represent their members’ interests before

Congress, state legislatures, and federal and state courts and

have participated as amici in numerous cases pending before

this Court, including cases involving application of the

Comprehensive Environmental Response, Compensation and

Liability Act (“CERCLA”) and other environmental laws.

—See, e.g., Engine Mfrs. Ass’n v. South Coast Air Quality

Mgmt. Dist., No. 02-1343, 539 U.S. 914 (2003) (NAM);

Deaton v. United States, No. 03-701, 541 U.S. 972 (2004)

(NMA).

Amici have a substantial interest in this case. Their

members own or operate facilities located near the U.S.

borders with Canada and Mexico and adjacent to cross-

boundary bodies of water. The Ninth Circuit concluded that

applying CERCLA to petitioner Teck Cominco Metals, Ltd.

(“Teck”), a Canadian corporation, for conduct occurring

solely in Canada was not an extraterritorial application of

3

CERCLA. The Ninth Circuit’s unprecedented application of

CERCLA liability—and its contorted interpretation of the

presumption against extraterritorial application of US.

laws—threatens to disrupt the cooperative diplomatic

approach traditionally, and successfully, employed to address

transboundary environmental issues.

Of crucial importance to amici, the Ninth Circuit’s decision

also may trigger reciprocal actions by foreign nations and

their citizens against United States companies—including

amici’s members—for conduct within the United States

alleged to harm foreign natural resources. Such actions could

adversely irapact amici’s members and other United States

companies and generate conflict and confusion over which

laws govern their activities within the United States. Amici’s

members favor an interpretation of CERCLA that establishes

a clear and predictable scope for liability under the statute—

and avoids the business uncertainty that would result if

conduct in the United States in full compliance with federal

and state environmental laws could nonetheless lead to

liability imposed in foreign courts based on foreign laws.

SUMMARY OF ARGUMENT

This CERCLA case arises because of activities allegedly

undertaken by Teck, a Canadian corporation, at a smelter

located in Canada. Respondents allege that hazardous

substances from that smelter have migrated along the

Columbia River from Canada into the State of Washington.

The District Court acknowledged that imposing liability on

Teck “involves an extraterritorial application of CERCLA to

conduct occurring outside U.S. borders,” because the alleged

contamination “in the United States ‘would not exist without

the activity at the smelter located in British Columbia.” Pet.

App. 37a, 38a. But it nonetheless held that applying

CERCLA to Teck was appropriate. The Ninth Circuit

affirmed on the wholly different ground that imposing

liability on Teck was merely a “domestic” application of

4

CERCLA—even though Teck is indisputably a foreign

corporation and is not alleged to have engaged in any

conduct inside the United States. Pet. App. 14a.

The Ninth Circuit’s decision extends “domestic”

applications of CERCLA liability to cover any actions by any

entity around the globe that allegedly result in hazardous

substances reaching U.S. shores. Such a reading of the

presumption against extraterritoriality seriously undermines,

to the point of gutting, the “long-standing principle of

American law ‘that legislation of Congress, unless a contrary

intention appears, is meant to apply only within the territorial

jurisdiction of the United States..” E.E.O.C. v. Arabian

American Oil Co. (“Aramco”) 499 U.S. 244, 248 (1991)

(citation omitted). This principle protects “against unintended

clashes between our laws and those of other nations which

could result in international discord.” /d. And adhering to

the presumption against extraterritoriality is particularly

appropriate in this context, because transboundary pollution

is a matter of quintessential international concern—and has

consistently been recognized as such.

Transboundary pollution issues have traditionally been ~

addressed through diplomatic discourse and bilateral

agreements. The Ninth Circuit’s holding sets two

countries—and businesses on both sides of the U.S.-Canada

border—on a path away from cooperative diplomacy in the

resolution of cross-border environmental issues and toward

piecemeal litigation by private parties under CERCLA that

will (indeed, already has) upset diplomatic relations between

the United States and Canada. And the import of the Ninth

Circuit’s decision is by no means limited to foreign conduct

in Canada. The court’s rationale applies to conduct occurring

across the border with Mexico, or for that matter in any

foreign country, that allegedly causes adverse effects in the

United States. Air and water migrate without regard to

international boundaries, and science is increasingly capable

of tracking the flow of environmental contaminants. The

5

Ninth Circuit’s decision effectively opens United States

courts to claims under CERCLA with respect to conduct the

world over, potentially inviting unintended clashes with the

interests of numerous sovereigns and the businesses

operating within their boundaries.

American businesses will suffer the consequences of the

international discord generate. by the decision below.

Applying CERCLA to foreign companies operating on

foreign soil will inevitably encourage retaliatory actions by

foreign countries and foreign citizens against U-S.

businesses. And the prospect that the environmental laws of

foreign countries may govern the activities of a company’s

domestic operations will add to the complex regulatory

requirements that U.S. businesses already must navigate

under United States law. American businesses should not be

subjected to those added burdens unless they are expressly

contemplated by Congress—and CERCLA evidences no

such express directive. This Court should grant the petition

for a writ of certiorari to examine—and reverse—the Ninth

Circuit’s unprecedented and far-reaching ruling.

There is an additional reason to grant certiorari. The Ninth

Circuit split with the First Circuit over the contours of the

“arranger” liability provision of CERCLA. This split means

that the category of parties potentially subject to arranger

liability is now defined differently—even for the same

company—depending where in the country a company is

operating. Given the stringent liability standard codified in

CERCLA, it is particularly important that the requirements

for arranger liability be clear, predictable, and consistent

across the Nation. .

6

REASONS FOR GRANTING THE WRIT

I. THE NINTH CIRCUIT’S DECISION INVITES

RETALIATION AGAINST AMERICAN

BUSINESSES AND FOSTERS UNCERTAINTY

AND DISCORD FOR NUMEROUS AMERICAN

INDUSTRIES.

A. The Ninth Circuit’s Decision Distorts The

Meaning Of The Presumption Against

Extraterritorial Application Of U.S. Law.

There is a strict presumption against extraterritorial

application of U.S. law. It can only be overcome by a “clear

statement” of Congressional intent to do so. Aramco, 499

U.S. at 259. The Ninth Circuit circumvented that strict

presumption by finding that application of CERCLA liability

to Teck—a Canadian company whose conduct occurred

solely in Canadian territory—was a domestic application of

U.S. law. This holding departs wildly from this Court’s

precedents. It also undercuts the fundamental principles on

which those precedents are based, and it denigrates the

bilateralism that has traditionally characterized the U.S.-

Canadian approach to resolving transboundary pollution

issues. A grant of certiorari is warranted.

The presumption that a domestic statute applies only

domestically protects against “international discord” by

preventing clashes of United States and foreign law.

Aramco, 499 U.S. at 248. As Justice Holmes explained, an

act’s lawfulness “must be determined wholly by the law of

the country where the act is done.” American Banana Co. v.

United Fruit Co., 213 U.S. 347, 356 (1909). Anything else is

“unjust” and “an interference with the authority of another

sovereign.” Id.’

2 , ‘ “a

“ A related canon of construction is also relevant here. “[A]n

act of congress ought never to be construed to violate the law of

nations if any other possible construction remains.” Murray v.

j

A party arguing in favor of the extraterritorial application

of a law has the burden to show that Congress intended that

expansive reach. Aramco, 499 U.S. at 250. This is a

significant burden indeed; for there must be “affirmative

evidence” that Congress “clearly expressed” its intent that the

statute at issue apply abroad. /d. at 258; Benz v. Compania

Naviera Hidalgo, S.A., 353 U.S. 138, 147 (1957). It is well-

established that “Congress ordinarily intends its statutes to

have domestic, not extraterritorial, application.” Small v.

United States, 544 U.S. 385, 388 (2005); see also id. at 400

(Thomas, J., dissenting) (“extraterritoriality canon” restricts

“federal statutes from reaching conduct beyond U.S.

borders”) (emphasis in original). When Congress intends to

depart from ordinary domestic application, it has explicitly

done so. Aramco, 499 U.S. at 258 (citing examples).

The District Court concluded that there was “no direct

evidence that Congress intended extraterritorial application

of CERCLA to conduct occurring outside the United States.”

Pet. App. 57a. That is, of course, correct; and no court has

concluded otherwise. But undeterred by this clear lack of

affirmative Congressional intent to impose CERCLA liability

for conduct occurring abroad, the Ninth Circuit found

another way around the presumption. It concluded that the

presumption did not come into play because CERCLA was

actually being applied “domestic[ally}” to Teck—a Canadian

company operating in Canada. Pet. App. 14a.

In reaching this curious conclusion, the Ninth Circuit

focused exclusively on whether a “release” occurred in the

Schooner Charming Betsy, 6 U.S. (2 Cranch) 64, 118 (1804)

(Marshall, C.J.). Under this canon of “prescriptive comity,” F.

Hoffman-La Roche Ltd. v. Empagran S.A., 542 U.S. 155, 165

(2004), “statutes should not be interpreted to regulate foreign

persons or conduct if that regulation would conflict with principles

of international law.” Hartford Fire Ins. Co. v. California, 509

U.S. 764, 815 (1993). It is an established principle of international

law that nations not intrude on each other’s sovereign interests.

8

United States. /d. at 19a, 20a. It neglected the other text in

CERCLA’s liability provision. CERCLA liability _ is

premised on finding that a person within one of four

delineated categories of liable parties had the required nexus

to a vessel or facility from which there is a release. For the

third category of liable parties—“arrangers”—liability is

imposed where: (1) the person arranged (by contract,

agreement, or otherwise) for disposal or treatment at a

facility; and (2) there was a release or threatened release of a

hazardous substance from that facility. 42 U.S.C. § 9607(a).’

Thus, a “domestic” application of arranger liability

requires both that there be a release from a domestic

facility—which the Ninth Circuit found had occurred—and

that the party by contract, agreement, or otherwise arranged

for disposal at that domestic facility. The Ninth Circuit

never addressed this point, even though no one—not the

EPA, the District Court, or the Ninth Circuit—has ever

disputed that whatever “arranging” is allegedly attributable to

Teck did not occur in the United States. Holding Teck liable

under U.S. law for conduct it performed solely within

> The arranger-liability provision states in relevant part: “any

person who by contract, agreement, or otherwise arranged for

disposal or treatment * * * of hazardous substances * * * at any

facility * * * from which there is a release * * * of a hazardous

substance, shall be liable” for certain costs. Jd. § 9607(a)(3), (4)

(emphases added). The phrase beginning “from which there is a

release” modifies subparagraphs |-4, even though it follows

subparagraph 4. See, e.g., United States v. Township of Brighton,

153 F.3d 307, 328 n.8 (6th Cir. 1998).

* Courts have repeatedly held that the term “disposal” does not

include the passive migration of materials; it requires “active

human conduct.” United States v. 150 Acres of Land, 204 F.3d

698, 705-706 (6th Cir. 2000) (noting CERCLA’s distinction

between the definitions of “disposal” and “release”); accord ABB

Indus. Sys., Inc. v. Prime Tech., Inc., 120 F.3d 351, 358 (2d Cir.

1997); United States v. CDMG Realty Co., 96 F.3d 706, 714 (3rd

Cir. 1996).

9

Canada—and that was authorized by Canadian law—plainly

implicates the presumption against extraterritoriality.

B. The Ninth Circuit’s Decision Flouts The

International Mechanisms Long Deemed

Appropriate For Resolving Transboundary

Pollution Issues.

The Ninth Circuit decision does a grave disservice to the

United States’ history of addressing transboundary pollution

through diplomatic channels and international agreements.

Congress enacted CERCLA in 1980 against the backdrop of

a settled international framework for addressing

transboundary pollution issues—including issues relating to

the very smelter at issue in this case. There is no indication

whatsoever that Congress sought to meddle with that

established framework when it enacted CERCLA.”

For nearly a century, the United States and Canada have

looked to bilateral, diplomatic resolutions of transboundary

pollution issues. See generally United States Department of

State, Background Note: Canada (Mar. 2007) (“The U.S.

and Canada also work closely to resolve transboundary

environmental issues, an area of increasing importance in the

bilateral relationship.”). In the Boundary Waters Treaty of

1909, the two nations created the International Joint

Commission (“IJC”’) to resolve disputes over boundary

waters. The IJC has since played a crucial role in resolving

transboundary pollution issues. See, e.g., IJC, “Trans-

boundary Impacts of the Missisquoi Bay Causeway and the

Missisquoi Bay Bridge Project” (2005); IJC, “Transboundary

Air Pollution, Detroit and St. Clair River Areas” (1972).

In 1939, when emissions from the Canadian smelter

involved in this case were alleged to be damaging property in

the United States, the two nations agreed to an arbitration

’ Congress is presumed to know the state of existing law when

it legislates. Bowen v. Massachusetts, 487 U.S. 879, 896 (1988).

10

procedure that gave nse to one of the seminal decisions on

international pollution—the “Trail Smelter Arbitration.”

Trail Smelter Arbitral Tribunal (U.S. v. Can.) (Apr. 16,

1938), 33 Am. J. Int’l L. 182 (1939); Trail Smelter Arbitral

Tribunal (U.S. v. Can.) (Mar. 11, 1941), 35 Am. J. Int’) L.

684 (1941). The United States did not unilaterally assess

liability for acts within the sovereign nation of Canada. It

employed the traditional method of resolving sensitive

questions of transboundary environmental harm through

international channels, not private litigation.

The list goes on; this Nation’s history is replete with other

examples of the United States’ bilateral approach to

transboundary harms. The United States and Canada used

international arbitration to resolve harms to U.S. citizens

caused by flooding and erosion from a Canadian dam. See

Gut Dam Arbitration/Settlement (U.S. v. Can.), reprinted in

8 I.L.M. 118 (1969). A few years later, the United States and

Mexico negotiated resolution of a longstanding controversy

over the increased salinity of water reaching Mexico via the

Colorado River. See S. Rep. No. 93-906 (1974). The United

States and Canada signed an agreement twenty years ago to

resolve issues of moving hazardous waste across their shared

border. Agreement Concerning the Transboundary Move-

ment of Hazardous Waste, Oct. 28, 1986, TIAS No. 11099,

Art. 7. And, just last month, the United States and Canada

announced they were negotiating an annex to the 1991 U.S.-

Canada Air Quality Agreement (Pet. 11) to “reduce[e] the

cross-border flow of air pollution and its impact on the health

and ecosystems of Canadians and Americans.” See EPA

Press Release, “Canada and U.S. Move Forward to Reduce

Air Pollutants” (Apr. 13, 2007).°

; Beyond this Nation’s own history of bilateralism, international

compacts confirm that an active international framework for

addressing transboundary pollution exists. See, e.g., Decl. of the

United Nations Conf. on the Human Env’t, Principle 22 (June 16,

1972); Rio Decl. on Env’t and Dev., Principle 13 (June 14, 1992).

1]

Local governments likewise have treated transboundary

pollution as an international diplomatic issue. In 1982, for

example, the National Conference of Commissioners on

Uniform State Laws and the Uniform Law Conference of

Canada proposed a Uniform Transboundary Pollution

Reciprocal Access Act, 9C U.L.A. 387, 388 (2001). This

Act allows a citizen who is injured by pollution emanating

from another state to sue in the source state’s courts as

though he lived in the source state. /d. at 394. The plaintiff

has the same rights as anyone else in the source jurisdiction.

Id. at 394-395. The Act has been adopted by several U.S.

states and Canadian provinces. See, e.g., Colo. Rev. St.

§§ 13-1.5-101 et seg.; Mich. Laws Ann. §§ 324.1801 et seq.;

Or. Rev. Stat. §§ 468.078 et seg.; Manitoba Transboundary

Pollution Reciprocal Access Act, C.C.S.M., 1985, c. T145;

Prince Edward Island Transboundary Pollution (Reciprocal

Access) Act, R.S.P.E.1., 1988, c. T-5." And its position—that

the source jurisdiction’s laws govern—was also adopted by

the United Nations. See United Nations, Int’] Law Comm’n,

Draft Principles on the Allocation of Loss in the Case of

Transboundary Harm Arising Out of Hazardous Activities,

56th Session, Principles 4, 6 (A/CN.4/L.662) (July 2004).*

’ Although neither the State of Washington nor the Province of

British Columbia has adopted the Uniform Act, these two entities

created the Environmental Cooperation Council (“ECC”) in 1992

to deal with transborder environmental issues. The ECC acts as a

“significant catalyst to cooperative environmental management”

between British Columbia and Washington, and has a Task Force

dedicated to air and water quality issues in the Columbia River

Basin. See ECC, “The Role of ECC,” available at http://www.

env.gov.bce.ca/spd/ecc/role. htm}.

* In other words, even if this transboundary pollution issue were

to be resolved under the domestic law of one of the two sovereigns

involved in the dispute, the relevant domestic law that should

apply is Canadian law—not CERCLA.

12

This long history reinforces the conclusion that countries

can best address and resolve sensitive transboundary

pollution problems through diplomatic channels or traditional

international law mechanisms, such as arbitration tribunals,

that can balance complex diplomatic issues alongside

environmental and private interests. Permitting private

plaintiffs to bring actions challenging foreign conduct would

disrupt the international framework that has long been

successfully employed to _ resolve transboundary

environmental disputes.

C. The Ninth Circuit’s Decision Will Precipitate

Retaliation, Uncertainty, And Discord

Throughout American Industries.

Applying CERCLA to foreign companies acting wholly in

a foreign country will not only disrupt the settled

international framework for resolving transboundary

pollution disputes; it also is likely to trigger backlash and

retaliation against American companies.

1. Canada reacted to the EPA’s Order in this case by

pointing to the serious international ramifications of

extending CERCLA beyond U.S. borders. The Canadian

Government issued a formal Diplomatic Note expressing

“concern[]}” that the United States would attempt to enforce

CERCLA against a Canadian company operating in

Canadian territory under Canadian law. 9th Cir. ER 72. The

Diplomatic Note emphasized that “issuance of the Unilateral

Administrative Order may set an unfortunate precedent, by

causing transboundary environmental liability cases to be

initiated in both Canada and the United States.” /d. And it

requested that the United States rescind the UAO in favor of

“develop[ing] a mutually acceptable and enforceable

agreement, in the spirit of the long history of joint Canada-

U.S. stewardship of our shared environment.” /d.

The diplomatic arm of the Executive Branch—in a break

from EPA—separately voiced its own concerns over the

unilateral extraterritorial enforcement of CERCLA. The

13

United States Ambassador to Canada asked the EPA to

withdraw the UAO. Letter from Paul Cellucci, Ambassador

of the United States of America to Canada to Michael O.

Leavitt, Administrator, U.S. Environmental Protection

Agency (June 15, 2004). His letter explained that “pursuing

a clean-up program through legal action under [CERCLA]

has the potential, because of its unilateral nature, to cause

significant harm to our otherwise productive and cooperative

bilateral environmental relationship.” /d. He echoed the

same concern voiced by the Canadian Government: “The

Government of Canada could use this precedent to justify its

own unilateral decisions regarding U.S. companies whose

actions inside the U.S. impact on Canadian watersheds.” /d.

The EPA eventually responded to the concerns raised by

Canada and the Executive Branch and rescinded the UAO.

Pet. App. 9a n.10. The rescission of the UAO demonstrates

the importance and efficacy of fostering bilateral resolutions

of transboundary pollution issues—but it did not resolve this

case. For even if EPA rescinds a UAO, it is in no position to

extinguish the process to which private parties such as

respondents here have access under CERCLA. See id.

2. If the Ninth Circuit’s decision remains in place,

American businesses will face uncertainty and potential

retaliation not only from Canada, but from other countries

around the globe. “Tt.e specter of reciprocity is a very real

concern because transboundary pollution flows both ways.”

Austen L. Parrish, Trail Smelter Deja Vu: Extraterritoriality,

International Environmental Law, and the Search for

Solutions to Canadian-U.S. Transboundary Water Pollution

Disputes, 85 B.U. L. Rev. 363, 410-411 (2005). Applying

CERCLA to a Canadian company for conduct in Canada

invites the government and citizens of Canada to turn the

tables and do the same, with United States businesses as the

defendants. See Shi-Ling Hsu & Austen L. Parrish,

“Litigating Canada—U.S. Transboundary Harm: International

Environmental Lawmaking and the Threat of Extraterritorial

14

Reciprocity,” 48 Va. J. of Int’] L. 1 (publication forthcoming

Oct. 2007), available at http://ssrn.com/abstract=9675 19

(arguing that Canada is likely to turn to extraterritorial

application of its environmental statutes to address U.S.

pollution causing cross-border harm).

Canada has reacted strongly in the past when it has

perceived the United States to be encroaching on its

sovereign affairs—and the decision below encourages it to do

so again.’ This concern is not hypothetical. About forty-five

percent of rivers on the U.S.-Canadian border, for example,

flow from the United States into Canada. Parrish, supra, at

410. Industrial emissions from the United States are

allegedly causing environmental harm to Canadian Inuit and

Arctic wildlife. /d And the Province of Ontario recently

argued to the Seventh Circuit that its air quality is

compromised by U.S. pollution, pointing out that “[mJore

than 50% of the air pollution in Ontario is generated by U.S.

sources.” Province of Ontario Amicus Br. 18, United States

v. Cinergy Corp., Case No. 06-1224 (7th Cir.) (filed May 9,

2006). The Province argued that the “cost of transboundary

air pollution in Ontario in human, environmental and

economic terms is considerable,” including more than $3.7

billion (CDN) in human costs and more than $1 billion in

environmental costs. /d. at 19.

7 In 1985, for example, reacting to the United States’

extraterritorial enforcement of its antitrust laws, Canada enacted

blocking legislation (titled the Foreign Extraterritorial Measures

Act, or FEMA). See R.S.C., ch. F-29 (1985) (Can.). FEMA grants

Canada’s Attorney General broad authority to prevent

extraterritorial encroachments on Canadian sovereignty with

respect to antitrust proceedings. Throughout the 1990s, the

Canadian Attorney General issued orders under FEMA prohibiting

Canadian compliance with the United States’ extraterritorial efforts

to block trade with Cuba. See John W. Boscariol, An Anatomy of

A Cuban Pyjama Crisis: Reconsidering Blocking Legislation in

Response to Extraterritorial Trade Measures of the United States,

30 Law & Pol’l Int’] Bus. 439, 452-454 (1999).

15

Numerous other nations similarly have contended that U.S.

industrial practices have caused environmental

contarnination; indeed, many sources suggest that the United -

States is the world’s largest polluter. See, e.g., Nancy

Kubasek & Jay Threet, Cooper Industries, Inc. v. Aviall

Services, Inc.: Time for a Legislative Response to Restore

Voluntary Remediation, 51 St. Louis U. L.J. 165, 181 (2006)

(stating that the United States Department of Defense “is the

world’s largest polluter, producing more hazardous waste per

year than the five largest United States chemical companies

combined”); Michael Ilg, Environmental Harm and

Dilemmas of Self-interest: Does International Law Exhibit

Collective Learning?, 18 Tul. Envtl. L.J. 59, 68 (2004).

Even Congress has acknowledged that the United States is a

net exporter of certain types of transboundary pollutants.

See, e.g., Sen. Bill No. 906 (110th Cong.) (introduced Mar.

15, 2007) (proposing mercury regulation based on findings

that mercury is a transboundary pollutant and the United

States is a net exporter of mercury worldwide).

United States industry—including members of amici—

will, of course, bear the brunt-of private enforcement actions

brought by citizens of a foreign nation against companies

operating in the United States for perceived violations of

foreign environmental laws. The potential for U.S.

businesses to face private environmental enforcement efforts

will extend far beyond Canada, because science is

increasingly capable of documenting the long-range transport

of pollutants.'” The Ninth Circuit’s decision permits the

'° See, e.g., Rokjin J. Park, ef al., “Natural and Transboundary

Pollution Influences on Sulfate-Nitrate-Ammonium Aerosols in

the United States,” 109 Journal of Geophysical Research D15204

(2004) (tracking transboundary pollutants from Canada, Mexico,

and Asia to the United States and contribution of transboundary

pollutants from United States to Europe and North Africa); Leta

Hong Fincher, Voice of America News: Worldwatch Institute—16

of the World’s Most-Polluted Cities in China (June 28, 2006)

16

source of pollution to be held liable wherever it ultimately

lands, so long as science can document the long-range

transport of the pollution.

And this is so even if the company’s conduct was fully in

accord with the governing law of the sovereign nation in

which it operates. Amici’s members regularly operate under

permits from the EPA. At present, they can be confident that

if their operations conform to their government-approved

permits, they will not be violating federal environmental

laws. See, e.g., 33 U.S.C. § 1342(k) (compliance with a

permit issued under the Clean Water Act is deemed

compliance with that Act); 42 U.S.C. § 7661c(f) (compliance

with a permit issued under the Clean Air Act is deemed

compliance with that Act); see also, e.g., 30 C.F.R. § 780.15

(outlining air pollution control plan required to obtain surface

mining permit); 30 C.F.R. § 780.18 (outlining reclamation

plan required for surface mining permit, including steps to be

taken to comply with the Clean Air Act, Clean Water Act,

and other environmental laws and regulations).

The Ninth Circuit’s ruling, if it stands, will embolden

foreign plaintiffs to sue U.S. businesses for purported

environmental wrongs—as dictated by the standards of their

own environmental law regimes, not United States law. As a

result, companies in the United States, which currently

expend vast resources ensuring that their businesses operate

in accordance with our Nation’s law, would have to devote

even more substantial efforts, money, and personnel to

examining environmental law around the world, and to

attempting to protect or insure against potential liability

under all of those laws as well. And the price of

noncompliance with one or more foreign sovereign’s laws

(discussing atmospheric transport of pollution to the United States

from China); Clean Air Report, /ndustry Calls for Relaxed Haze

Rule Following New Emissions Study (Mar. 9, 2006) (discussing

study finding transboundary pollution from Canada, Mexico, and

Asia makes “large contributions” to haze in the United States).

17

could be steep indeed: the same discharge or emission could

result in exponential liability in numerous countries,

depending on how far science is able to follow the trail

around the globe. This in turn will introduce grave

unpredictability about potential environmental liability from

foreign environmental laws. And that instability in turn will

necessarily hamper trade and economic growth. See, e.g.,

Christopher L. Ingrim, Choice-of-Law Clauses: Their Effect

on Extraterritorial Analysis—A Scholar’s Dream, A

Practitioner’s Nightmare, 28 Creighton L. Rev. 663, 664

(1995) (legal uncertainty is “inherently disturbing to the

international business community which requires a

reasonable amount of certainty and predictability in order to

trade freely and efficiently in today’s global economy”).

To say the least, this is not a happy prospect for United

States industry. The Ninth Circuit’s ruling is not just an ill-

considered and indefensible textual interpretation of

CERCLA. It was issued without regard to the diplomatic

sensitivities that must inform the menu of available remedies

in any instance of transboundary pollution, and without

regard to the prospect that many stalwart American industries

may now be subjected to exponential foreign liability for

their daily domestic operations—all depending on which way

the wind blows or the water flows. Certiorari should be

granted to address and resolve this issue.

Il. THIS COURT’S REVIEW IS NEEDED TO

ESTABLISH NATIONAL UNIFORMITY ON

THE QUESTION OF ARRANGER LIABILITY.

The circuit split on the scope of arranger liability under

§ 107(a)(3) is ripe and merits review. See S. Ct. Rule. 10(a);

see also South Florida Water Mgmt. Dist. v. Montalvo, 84

F.3d 402, 406(11th Cir. 1996) (noting that courts have

“struggled with the contours of ‘arranger’ liability under

§ 107(a)(3)”). The First and Ninth Circuits have taken

diametrically o » osed positions on what the term “by any

other party or entity” modifies—which in turn determines

18

who is within the third category of “covered persons” under

CERCLA’s liability provision.

When presented with the question who is included in the

scope of arranger liability, the First Circuit turned to the

“sentence structure” of § 107(a)(3)}—which it found “makes

it clear” that the provision attaches when the party who owns

or possesses the hazardous material arranges with another

party for disposal or treatment of that material. American

Cyanamid Co. v. Capuano, 381 F.3d 6, 24 (1st Cir. 2004). In

reaching its conclusion, the First Circuit expressly rejected an

interpretation of the statute that would have required editing

the operative provision of the statute to add a new word—

“or’—not in the text. The First Circuit thus declined to read

CERCLA so as to “make liable any person who arranged for

the disposal of a hazardous substance ‘owned or possessed

by such person [or] by any other party or entity.’ ” Jd. at 23-

24 (emphasis added).

The Ninth Circuit had no such compunction about

retrofitting the statute to suit its preferred interpretation.

Within the Ninth Circuit, arranger liability extends to “any

person who * * * arranged for disposal or treatment * * * of

hazardous substances owned or possessed by such person

[or] by any other party or entity.” Pet. App. 24a (emphasis

added). The Ninth Circuit thus has eliminated any

requirement that a party “arrange” with a third party for

disposal before arranger liability attaches, while the First

Circuit has upheld the requirement of third-party

'' The arranger liability provision states in relevant part that:

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

disposal or treatment ** * of hazardous substances 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 certain costs. 42 U.S.C.

§ 9607(a)(3), (4) (emphasis added to disputed clause).

19

participation.'* Amici’s members, who have operations in

both the First and Ninth Circuits, now face national business

uncertainty about the scope of arranger liability.

The starting point for interpreting a statute is always the

plain and unambiguous meaning of the statute. Robinson v.

Shell Oil Co., 519 U.S. 337, 340 (1997). That a statute “is

awkward, and even ungrammatical” does not mean it is

ambiguous on the point at issue. Lamie v. United States Tr.,

540 U.S. 526, 534 (2004). The Ninth Circuit, in the guise of

employing a “liberal judicial interpretation” of CERCLA

(Pet. App. 26a), added the word “or” to the liability

provision. Its stated reason: adhering to the plain language

of the statute would create a gap in the liability regime. /d.

Perhaps, or perhaps not. But it is not the province of a Ninth

Circuit panel to remedy a perceived legislative oversight.

The Ninth Circuit’s reading “is not a construction of a

statute, but, in effect, an enlargement of it by the court, so

that what was omitted, presumably by inadvertence, may be

included within its scope.” Jselin v. United States, 270 U.S.

245, 251 (1926). But as this Court made clear long ago, “[t]o

supply omissions transcends the judicial function.” Jd.

Courts may not “read an absent word into the statute” when

2 Further support for the First Circuit’s holding—and further

confirmation that the Ninth Circuit erred—can be found in the

established interpretive cannons of noscitur a sociis and ejusdem

generis. Under these canons, “[w]jhere general words follow

specific words in a statutory enumeration, the general words are

construed to embrace only objects similar in nature to those objects

enumerated by the preceding specific words.” Washington State

Dep’t of Social & Health Servs. v. Guardianship Estate of

Keffeler, 537 U.S. 371, 384 (2003) (quotation omitted). Applied

here, the term “otherwise arranged”—as the last item in the

sequence “by contract, agreement or otherwise arranged”—should

have the same requirement of two-party conduct shared by the

preceding terms, “contract” and “agreement.” That is the First

Circuit’s interpretation, and it is the far better reasoned one.

20

there is a “plain, nonabsurd meaning in view.” Lamie, 540

U.S. at 538; Mobil Oil Corp. v. Higginbotham, 436 U.S. 618,

625 (1978) (courts “have no authority to substitute [their]

views for those expressed by Congress in a duly enacted

statute”). By adding the word “or” the Ninth Circuit

radically expanded the scope of arranger liability. Its

decision merits review. The arranger-liability requirements

shouwid be the same in all federal courts and should be based

on clear, predictable rules. The conflict created by the

decision below will directly affect companies and industries

that operate in multiple states, including amici’s members

who now face varying rules and potentially different

outcomes with respect to a crucial liability determination.

The Court should grant certiorari and establish national

uniformity on this important question presented.

CONCLUSION

For the foregoing reasons, as well as those presented in the

petition, the petition should be granted.

Respectfully submitted,

Of Counsel:

HAROLD P. QUINN, JR. CATHERINE E. STETSON

TAWNY A. BRIDGEFORD Counsel of Record

NATIONAL MINING ASSOCIATION JESSICA L. ELLSWORTH

101 Constitution Avenue, N.W. HOGAN & HARTSON L.L.P.

Suite 500 East 555 Thirteenth Street, N.W.

Washington, D.C. 20001 Washington, D.C. 20004

(202) 463-2600 (202) 637-5600

JAN S. AMUNDSON Counsel for Amici Curiae

QUENTIN RIEGEL

NATIONAL ASSOCIATION

OF MANUFACTURERS

1331 Pennsylvania Avenue, N.W.

Washington, D.C. 20004

(202) 637-3000