Morton International, Inc. v. A.E. Staley Manufacturing Co. , 343 F.3d 669 ( 2003 )

Opinions of the United
2003 Decisions States Court of Appeals
for the Third Circuit
9-16-2003
Morton Intl Inc v. AE Staley Mfg Co
Precedential or Non-Precedential: Precedential
Docket No. 01-4259
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2003
Recommended Citation
"Morton Intl Inc v. AE Staley Mfg Co" (2003). 2003 Decisions. Paper 233.
http://digitalcommons.law.villanova.edu/thirdcircuit_2003/233
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 2003 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
PRECEDENTIAL
Filed September 16, 2003
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 01-4259
MORTON INTERNATIONAL, INC.; VELSICOL CHEMICAL
CORPORATION; NWI LAND MANAGEMENT CO.; FRUIT
OF THE LOOM, INCORPORATED,
v.
A.E. STALEY MANUFACTURING COMPANY; AIRCO
INDUSTRIAL GASES, a/k/a AIR REDUCTION COMPANY,
INC., f/k/a AIRCO, INC.; ALLIED CHEMICAL
CORPORATION; ALUMINUM COMPANY OF AMERICA
(ALCOA); AMERICAN CYANAMID COMPANY; ARMSTRONG
WORLD INDUSTRIES, INC.; ARSYNCO, INC.; BAILEY
CONTROLS CO., f/k/a BAILEY METER COMPANY;
BECTON-DICKINSON & CO., INC.; BELFORT
INSTRUMENT CO.; BELMONT METALS, INC., f/k/a
BELMONT SMELTING & REFINING WORKS, INC.;
CANADIAN GYPSUM COMPANY, LTD.; CANRAD, INC.,
(c/o Canrad Precision Industries, Inc.); CIBA-GEIGY
CORPORATION; COLUMBIA UNIVERSITY; CONOPCO,
INC., (Cheeseborough Ponds U.S.A. Co. Division); COSAN
CHEMICAL CORP.; CROUSE HINDS SEPCO
CORPORATION, f/k/a CONNECTICUT INTERNATIONAL;
CROWN ZELLERBACH CORP., a/k/a JAMES RIVER
CORPORATION OF NEVADA; CURTISS-WRIGHT; D.F.
GOLDSMITH CHEMICAL & METAL CORPORATION; DAY
& BALDWIN, f/k/a C-P PHARMACEUTICALS, INC.;
DIAMOND SHAMROCK CHEMICALS COMPANY, a/k/a
OCCIDENTAL ELECTROCHEMICALS CORPORATION;
DOW-CORNING CORPORATION; DURA ELECTRIC LAMP
CO., INC.; DURACELL, INC., (as successor to Mallory
Battery Co., Inc.); E.I. DUPONT DE NEMOURS & CO.;
2
EASTERN SMELTING & REFINING CORP.; EAGLEHARD
MINERALS AND CHEMICALS CORPORATION;
ENVIRONMENTAL CONTROL SYSTEMS; EXXON
CORPORATION; FEDERAL AVIATION ADMINISTRATION;
GARFIELD BARING CORPORATION, f/k/a GARFIELD
SMELTING & REFINING CO.; GENERAL ELECTRIC
COMPANY; GENERAL COLOR CO., INC.; GENERAL
SIGNAL CORPORATION; GILMARTIN INSTRUMENT CO.;
HARTFORD ELECTRIC SUPPLY COMPANY, INC.; HENKEL
CORPORATION; HOFFMAN-LAROUCHE, INC.; HUDSAR,
INCORPORATED; INMAR ASSOCIATES, INC.; INMAR
REALTY, INC.; INTERNATIONAL NICKEL, INC.; J.M. NEY
COMPANY; K.E.M. CHEMICAL COMPANY; KOPPERS,
a/k/a BEAZER EAST, INC.; MAGNESIUM ELEKTRON,
INC.; MARVIN H. MAHAN; MALLINCKRODT CHEMICAL,
INC.; MARISOL, INC.; MERCK & CO., INC.; MERCURY
ENTERPRISE, INC., f/k/a MERCURY INSTRUMENT
SERVICE; MINNESOTA MINING AND MANUFACTURING
COMPANY; MOBIL OIL CORPORATION; MT. UNION
COLLEGE; M.W. KELLOGG CO.; NATIONAL LEAD
COMPANY, (Goldsmith Brothers Division); NEPERA, INC.;
NEW ENGLAND LAMINATES CO., INC.; NEW JERSEY
INSTITUTE OF TECHNOLOGY, f/k/a NEWARK COLLEGE
OF ENGINEERING; NEW YORK CITY TRANSIT
AUTHORITY; NORTHEAST CHEMICAL CO., (Northeast
Chemical & Industrial Supply Co., Inc.); OCCIDENTAL
CHEMICAL CORPORATION, (as successor to Diamond
Shamrock Chemical Co., formerly Diamond Shamrock
Corporation); OLIN CORPORATION, f/k/a OLIN
MATHIESON CHEMICAL CORPORATION; PEASE &
CURREN, INC.; PFIZER, INC.; PSG INDUSTRIES, INC.,
f/k/a PHILADELPHIA SCIENTIFIC GLASS, INC.; PHILLIPS
& JACOBS, INC.; PUBLIC SERVICE ELECTRIC & GAS,
(PSE&G); PURE LAB OF AMERICA; RANDOLPH
PRODUCTS COMPANY; RAY-O-VAC DIVISION OF ESB,
INC., (ESB, INC.); REDLAND MINERALS LIMITED;
RHONE-POULENC, INC., f/k/a ALCOLAC CHEMICAL
COMPANY/GUARD CHEMICAL COMPANY; ROYCE
ASSOCIATES, f/k/a ROYCE CHEMICAL; RUTGERS, THE
STATE UNIVERSITY; SCIENTIFIC CHEMICAL
PROCESSING, INC.; SCIENTIFIC CHEMICAL TREATMENT
CO., INC.; SCIENTIFIC, INC.; SEAFORTH MINERAL &
ORE CO.; SPARROW REALTY, INC.; STATE UNIVERSITY
3
OF NEW YORK AT BUFFALO, (S.U.N.Y.A.B.);
SYLVANIA/GTE; TENNECO, INC.; TRANSTECH
INDUSTRIES, INC.; UEHLING INSTRUMENT CO., INC.;
UNION CARBIDE CORPORATION; UNIVERSAL OIL
PRODUCTS CO.; UNIVERSITY OF ILLINOIS; UNIVERSITY
OF MINNESOTA; VAR-LAC-OID CHEMICAL COMPANY,
INC.; W.A. BAUM CO., INC.; WAGNER ELECTRIC
COMPANY; WESTERN MICHIGAN UNIVERSITY;
WESTINGHOUSE ELECTRIC CORPORATION; JOHN DOE
1-100; GEROLD C. THOMPSON, ESQ.; GEORGE VAN
CLEVE, ESQ.; THE CONNECTICUT LIGHT AND POWER
COMPANY, f/k/a HARTFORD ELECTRIC LIGHT
COMPANY; GTE OPERATIONS SUPPORT INCORPORATED;
ALLIEDSIGNAL, INC.; BEAZER EAST, INC.; JERSEY CITY
MANAGEMENT, INC.; MICHAEL RODBURG, Site
Defendants Liasion Counsel; ASHLAND CHEMICAL CO., a
Division of Ashland Oil, Inc.; BASF CORPORATION, and
as successor to Wyandotte Chemical Corp., a/k/a
INMONT CORPORATION; FMC CORPORATION
Morton International, Inc.,
Appellant
On Appeal from the United States District Court
for the District of New Jersey
District Court Judge: Honorable Katherine S. Hayden
(D.C. No. 96-cv-03609)
Argued on July 7, 2003
Before: FUENTES, SMITH, and GREENBERG,
Circuit Judges.
(Opinion Filed: September 16, 2003)
4
Samuel P. Moulthrop
Riker, Danzig, Scherer, Hyland
& Peretti
One Speedwell Avenue
Headquarters Plaza
Morristown, NJ 07962
Joseph S. Justice
Thomas T. Terp
Taft, Stettinius & Hollister
425 Walnut Street
1800 Firstar Tower
Cincinnati, OH 45202
John G. Harkins, Jr. [ARGUED]
Steven A. Reed
Harkins Cunningham
2005 Market Street
2800 One Commerce Square
Philadelphia, PA 19103
Laurence S. Kirsch
Jonathan R. Stone
Frederick R. Anderson
Cadwalader, Wickersham & Taft
1210 F. Street, N.W.
Suite 1100
Washington, D.C. 20004
Attorneys for Appellant
David J. D’Aloia [ARGUED]
Robert B. Nussbaum
Michelle V. Fleishman
Saiber, Schlesinger, Satz &
Goldstein
One Gateway Center
Suite 1300
Newark, NJ 07102
Attorneys for Appellee
Tenneco, Inc.
5
OPINION OF THE COURT
FUENTES, Circuit Judge:
This appeal challenges the grant of summary judgment to
one defendant, Tennessee Gas Pipeline Co. (“Tenneco”), in
an action seeking contribution toward environmental
cleanup costs. These costs have been or will be incurred by
plaintiff-appellant Morton International, Inc. (“Morton”) in
regard to the Ventron/Velsicol Superfund Site in Wood
Ridge, New Jersey (the “Site” or “plant”). Morton and three
other plaintiffs, who are not parties to this appeal, sought
contribution under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980
(“CERCLA”), 42 U.S.C. § 9601 et seq., the New Jersey Spill
Compensation and Control Act (“Spill Act”), N.J.S.A. 58:10-
23.11 et seq., and common law.
Morton argues that Tenneco should be responsible,
under the “arranged for” provision of CERCLA Section
107(a)(3), for some of the cleanup costs because it arranged
for the processing of mercury at the facility for many years,
resulting in the release of hazardous waste into the
environment. Because we agree with Morton that material
factual issues remain with respect to whether Tenneco (1)
owned or possessed prime virgin mercury, (2) had
knowledge of the environmental hazards of mercury
processing at the plant, (3) had control over the hazardous
waste disposal practices at the plant, and (4) shipped its
own “dirty mercury” to the plant, we will remand for further
proceedings consistent with this opinion.
I. Background
A. Factual
The parties dispute many of the facts central to this
appeal, but the following facts are undisputed. From 1929
to 1974, a mercury processing plant was operated at the
Site. The plant was the largest domestic producer of
intermediate inorganic mercury compounds, including red
6
and yellow oxides of mercury (“ROM” and “YOM”). The
compounds were formulated, at least in part, using prime
virgin mercury (“PVM”). In addition, the plant cleaned
mercury that had been contaminated (“dirty mercury”) and
then converted it into intermediate compounds for some of
its customers. The plant released harmful waste into the
environment for decades.
The plant was owned by F.W. Berk & Company from
1929 to 1960. It was transferred to Wood Ridge Chemical
Corporation (its parent company is Velsicol Chemical
Corporation) in 1960, and then again to Ventron
Corporation in 1968. The plant was closed in 1974.
Sometime thereafter, Ventron merged into Thiokol, which
then merged into Morton-Thiokol, which eventually became
Morton.
The parties agree that Tenneco purchased ROM and YOM
from the plant from 1963 until the early 1970’s. The parties
disagree, however, as to the nature of the transactions
between Tenneco and the plant, Tenneco’s knowledge of
waste disposal by the plant, and whether Tenneco shipped
“dirty mercury” to the plant for processing.
B. Prior Litigation
In the 1970’s, the New Jersey Department of
Environmental Protection commenced an action against
Ventron, Velsicol, and other parties for cleanup and
removal of mercury at the Site. Eventually, Velsicol and
Morton were held strictly liable, jointly and severally, for
the cleanup of the Site, and that judgment was upheld
following numerous appeals and successive litigation. See
Morton International, Inc. v. General Acc. Ins. Co. of America,
629 A.2d 831, 880 (N.J. 1993) (concluding that Morton’s
predecessors had intentionally discharged pollutants over a
long period of time); State Department of Environmental
Protection v. Ventron Corp., 468 A.2d 150, 161-62 (N.J.
1983) (finding defendants violated statute prohibiting the
discharge of detrimental material into waters by
intentionally permitting mercury-laden effluent to escape
onto lands surrounding creek). After the enactment of
CERCLA in 1980, and the listing of the Site on the National
7
Priorities List, Morton, as the current owner of the Site,
Velsicol, and various other entities were required to perform
a remedial investigation/feasibility study for the Site. Since
then, Morton has been funding the environmental efforts
under various judicial orders.
C. The present litigation
Morton filed this action in 1996 seeking contribution
from Tenneco and numerous other defendants under
CERCLA, 42 U.S.C. § 9601 et seq., the Resource
Conservation and Recovery Act (“RCRA”), Pub. L. No. 94-
580, § 1, 90 Stat. 2795 (1976), as amended 42 U.S.C.
§ 6901 et seq., the Spill Act, N.J.S.A. 58:10-23.11 et seq.,
and common law.1 Morton argues that the “conversion” or
“toll” agreements, whereby the plant processed the
customers’ PVM into ROM and YOM, and the “dirty
mercury” processing agreements render the customer-
defendants subject to CERCLA liability as “arrangers”
under Section 107(a)(3), 42 U.S.C. § 9607(a)(3). Morton is
trying to recover from other allegedly responsible parties
some of the costs it has incurred and will continue to incur
to clean up the Site.
Tenneco and the other defendants refuse to share
responsibility for the cleanup costs. The defendants argue
that Morton’s characterization of the PVM transactions is
inaccurate; these transactions were nothing more than
straight purchases of finished products (ROM and YOM),
which do not expose them to CERCLA liability. On April 11,
2000, Tenneco and the other defendants moved for
summary judgment in an omnibus motion. The District
Court denied their motion with respect to the CERCLA,
Spill Act, and common law claims because of the varying,
complex fact patterns and material factual disputes with
1. Velsicol and its related entities were plaintiffs below, but have
withdrawn their appeal of the District Court’s order. Because they are no
longer parties to this appeal, we refer only to Morton’s pursuit of these
causes of action against the defendants.
8
respect to each defendant. The District Court granted the
defendants’ motion to dismiss Morton’s RCRA claim.2
Several months later, Tenneco filed a renewed motion for
summary judgment — this time on its own behalf. Morton
responded by incorporating by reference the briefings and
evidence it had submitted in response to the omnibus
summary judgment motion. After hearing oral argument on
Tenneco’s individual motion, the District Court ruled from
the bench and granted summary judgment to Tenneco on
all claims.
II. Jurisdiction
The District Court had jurisdiction over Morton’s federal
claims pursuant to 28 U.S.C. § 1331 and 42 U.S.C. § 9613.
The District Court exercised pendent jurisdiction over
Morton’s state law claim pursuant to 28 U.S.C. § 1367. We
have jurisdiction to hear this appeal from the final order of
the District Court pursuant to 28 U.S.C. § 1291.3III. Analysis
The District Court has asked us to “definitively address”
the standard for “arranger liability” under CERCLA Section
107(a)(3) in this Circuit in order to properly resolve
2. The District Court’s grant of judgment to the defendants on Morton’s
RCRA claim is not before us on appeal.
3. The District Court granted the parties’ joint motion to certify the
dismissal of Tenneco from this action as a final, appealable order
pursuant to Federal Rule of Civil Procedure 54(b). Although the District
Court’s July 17, 2001 order disposed of Morton’s claims only against
Tenneco, leaving in place the claims against the other defendants, the
Court entered a final judgment with respect to Tenneco because: (a)
Morton’s claims against Tenneco are separable from the remaining
claims; (b) this Court will not be required to decide the same issues even
if there are subsequent appeals by other defendants; (c) the standard for
“arranger liability” under CERCLA has not been “definitively addressed”
by this Court; (d) the prospects for final resolution of Morton’s claims
will be improved by a ruling on the standard; and (e) certification of the
judgment in favor of Tenneco will not prejudice the remaining
defendants. (App. at 4-5).
9
Morton’s contribution claims against Tenneco and the other
defendants in this case.4
A. CERCLA “Arranger Liability” Standard
Congress enacted CERCLA in 1980 “in response to the
serious environmental and health risks posed by industrial
pollution.” United States v. Bestfoods, 524 U.S. 51, 55
(1998) (citation omitted).
As its name implies, CERCLA is a comprehensive
statute that grants the President broad power to
command government agencies and private parties to
clean up hazardous waste sites. Sections 104 and 106
provide the framework for federal abatement and
enforcement actions that the President, the EPA as his
delegated agent, or the Attorney General initiates. 42
U.S.C. § 9604, 9606. These actions typically require
private parties to incur substantial costs in removing
hazardous wastes and responding to hazardous
conditions. Section 107 sets forth the scope of the
liabilities that may be imposed on private parties and
the defenses that they may assert. 42 U.S.C. § 9607.
Key Tronic Corp. v. United States, 511 U.S. 809, 814 (1994).
In 1986, Congress amended CERCLA with the Superfund
Amendments and Reauthorization Act (“SARA”) and
included a provision — Section 113 — that expressly
created a cause of action for contribution. See 42 U.S.C.
4. We once came close to stating a standard for “arranger liability” under
CERCLA. In FMC Corporation v. United States Dep’t of Commerce, No. 92-
1945, 1993 WL 489133, at *11 (3d Cir. 1993), this Court adopted the
test for “arranger liability” articulated by the Eighth Circuit in United
States v. Aceto Agricultural Chems. Corp., 872 F.2d 1373, 1379-82 (8th
Cir. 1989). That decision was vacated, however, after the Court granted
rehearing en banc. See FMC Corp., 10 F.3d 1003 (3d Cir. 1994). In the
superseding en banc decision, the Court affirmed the district court’s
judgment holding the government liable as an arranger without
discussion because the Court was “equally divided on this point.” FMC.
Corp., 29 F.3d 833, 846 (3d Cir. 1994). Accordingly, this Court has
neither ruled on the validity of the Aceto test for “arranger liability,” nor
articulated its own test up to this point. See United States v. Occidental
Chem. Corp., 200 F.3d 143, 145 (3d Cir. 1999).
10
§ 9613(f). “A principal goal of Section 113 was to ‘clarif[y]
and confirm[ ] the right of a person held jointly and
severally liable under CERCLA to seek contribution from
other potentially liable parties, when the person believes
that it has assumed a share of the cleanup or cost that
may be greater than its equitable share under the
circumstances.’ ” New Castle County v. Halliburton NUS
Corp., 111 F.3d 1116, 1122 (3d Cir. 1997) (quoting
H.R.Rep. No. 99-253(I), at 79 (1985), reprinted in 1986
U.S.C.C.A.N. 2835, 2861; H.R. Conf. Rep. No. 99-962, at
221 (1986), reprinted in 1986 U.S.C.C.A.N. 3276, 3314).
Accordingly, CERCLA and SARA together create two legal
actions by which parties that have incurred costs
associated with cleanups can recover some or all of those
costs: (1) Section 107 cost recovery actions; and (2) Section
113 contribution actions. Section 113, the cause of action
Morton is pursuing against Tenneco, provides that “[a]ny
person may seek contribution from any other person who is
liable or potentially liable under [Section 107], during or
following any civil action under [Section 107]. . . .” 42
U.S.C. § 9613(f)(1).
Section 107 defines those who are “potentially
responsible persons” (“PRP’s”) as: (1) the current owner or
operator of a facility; (2) any person who owned or operated
the facility at the time of the disposal of any hazardous
substances; (3) “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 . . . at any facility;” and (4) any person
who accepts or accepted hazardous substances for
transport to sites selected by such person, “from which
there is a release, or a threatened release which causes the
incurrence of response costs . . . .” 42 U.S.C. § 9607(a).
Congress did not define the term “arranged for” in the
statute. Thus, our interpretation of the term begins with
the plain meaning. To repeat, Section 107(a)(3) holds
responsible those who “by contract, agreement, or
otherwise arranged for” the disposal or treatment of
hazardous substances. The verb “arrange” is defined (as
relevant to its usage in this section) as “to make
preparations for.” See Webster’s Third New International
11
Dictionary 120 (1993). The dictionary definition of “arrange”
does not shed much light on the proper scope of liability
under this section. However, by including “or otherwise”
after “by contract [or] agreement,” Congress expanded the
means by which a party could possibly “arrange for” the
treatment or disposal of hazardous substances in defining
this category of PRP. We think that this expansive list of
means indicates that Congress intended this category of
PRP to be broadly construed.
Our view that “arranged for” is to be broadly construed is
consistent with Congress’s overall purpose in enacting
CERCLA. Two of the main purposes of CERCLA are “prompt
cleanup of hazardous waste sites and imposition of all
cleanup costs on the responsible party.” General Electric Co.
v. Litton Ind. Auto. Sys., Inc., 920 F.2d 1415, 1422 (8th Cir.
1990), cert. denied, 499 U.S. 937 (1991), abrogated on other
grounds, Key Tronic, 511 U.S. at 814, 819. In enacting
CERCLA, Congress intended that “those actually
‘responsible for any damage, environmental harm, or injury
from chemical poisons [may be tagged with] the cost of their
actions.’ ” Bestfoods, 524 U.S. at 55-56 (quotations and
citations omitted). “The remedy that Congress felt it needed
in CERCLA is sweeping: everyone who is potentially
responsible for hazardous-waste contamination may be
forced to contribute to the costs of cleanup.” Pennsylvania
v. Union Gas Co., 491 U.S. 1, 21 (1989) (plurality op. of
Brennan, J.) (emphasis in original), overruled on other
grounds, Seminole Tribe of Florida v. Florida, 517 U.S. 44(1996); see also Lansford-Coaldale Joint Water Auth. v.
Tonolli Corp., 4 F.3d 1209, 1221 (3d Cir. 1993).
Accordingly, we interpret the term “arranger liability”
broadly in keeping with the plain meaning of Section
107(a)(3) and the remedial statutory scheme of CERCLA.
Almost all of our sister circuit courts have adopted a
standard for “arranger liability,” but the standards adopted
vary. See Geraghty and Miller, Inc. v. Conoco Inc., 234 F.3d
917, 929 (5th Cir. 2001), cert. denied, 533 U.S. 950 (2001);
Freeman v. Glaxo Wellcome, Inc., 189 F.3d 160, 164 (2d Cir.
1999); Pneumo Abex Corp. v. High Point, Thomasville and
Denton R.R. Co., 142 F.3d 769, 775 (4th Cir. 1998); United
States v. Cello-Foil Products, Inc., 100 F.3d 1227, 1231-32
12
(6th Cir. 1996); South Florida Water Management District v.
Montalvo, 84 F.3d 402, 407 (11th Cir. 1996); Amcast
Industrial Corporation v. Detrex Corp., 2 F.3d 746, 751 (7th
Cir. 1993); Jones-Hamilton Co. v. Beazer Materials & Servs.,
Inc., 973 F.2d 688, 695 (9th Cir. 1992); United States v.
Aceto Agricultural Chems. Corp., 872 F.2d 1373, 1381-82
(8th Cir. 1989).
Our review of these decisions leads us to conclude that
the courts are virtually unanimous with respect to two
points. First, the determination of “arranger liability” is a
fact-sensitive inquiry that requires a multi-factor analysis.
Second, courts must look beyond the defendant’s
characterization of the transaction at issue in order to
determine whether the transaction, in fact, involves an
arrangement for the disposal or treatment of a hazardous
substance. We absolutely agree with both of these points.
However, there is not as much agreement among our
sister circuits as to which factors must be considered — or
what priority they should receive — in conducting the
multi-factor “arranger liability” analysis. In fact, some
courts require a showing of intent to dispose of or treat
hazardous substances, see Cello-Foil, 100 F.3d at 1232 (“in
the absence of a contract or agreement, a court must look
to the totality of the circumstances, including any
‘affirmative acts to dispose,’ to determine whether the
Defendants intended to enter into an arrangement for
disposal. . . . [A] party can be responsible for ‘arranging for’
disposal, even when it has no control over the process
leading to the release of substances.”); Amcast, 2 F.3d at
751 (“arranged for” . . . “impl[ies] intentional action.”); while
others require only a demonstration of control and/or
ownership over the hazardous substances that are being
disposed of or treated. See, e.g., Aceto, 872 F.2d at 1380(rejecting reading of Section 107(a)(3) that requires proof
that defendant intended to dispose of a waste, and focusing
on defendant’s ownership of raw materials and control over
formulation process).
There has been some disagreement, too, as to whether
ownership or control over the material being processed is
the more critical factor in the “arranger liability” analysis.
C.f. United States v. Hercules, 247 F.3d 706, 720 (8th Cir.
13
2001) (implying that ownership without control would
suffice and stating that “[c]ontrol . . . is not a necessary
factor”) and Jones-Hamilton, 973 F.2d at 695 (liability based
on ownership without control); with United States v. Shell
Oil Co., 294 F.3d 1045, 1055-56 (9th Cir. 2002) (proof of
ownership not required because actual control is the
“crucial element”).
After carefully examining the language of the statute and
considering the standards adopted by other courts, we
conclude that the most important factors in determining
“arranger liability” are: (1) ownership or possession; and (2)
knowledge; or (3) control. Ownership or possession of the
hazardous substance must be demonstrated, but this factor
alone will not suffice to establish liability. A plaintiff must
also demonstrate either control over the process that
results in a release of hazardous waste or knowledge that
such a release will occur during the process.5 We note, too,
that in conducting this analysis a court should not lose
sight of the ultimate purpose of Section 113, which is to
determine whether a defendant was sufficiently responsible
for hazardous-waste contamination so that it can fairly be
forced to contribute to the costs of cleanup.
5. We do not mean to suggest that no other factors would be relevant to
this analysis. In Concrete Sales and Services, Inc. v. Blue Bird Body Co.,
the court compiled a comprehensive list of factors that courts have
considered in discussing “arranger liability,” including: “(1) whether a
sale involved the transfer of a ‘useful’ or ‘waste’ product; (2) whether the
party intended to dispose of a substance at the time of the transaction;
(3) whether the party made the ‘crucial decision’ to place hazardous
substances in the hands of a particular facility; (4) whether the party
had knowledge of the disposal; and (5) whether the party owned the
hazardous substances.” 211 F.3d 1333, 1336-37 (11th Cir. 2000). See
also State of New York v. Solvent Chem. Co., 225 F. Supp. 2d 270, 280-
81 (S.D.N.Y. 2002) (compiling list of factors considered by other courts).
Depending on the particular circumstances of a case, any of these
factors, and quite possibly others not mentioned here, could be helpful
in determining whether the defendant was sufficiently responsible for
hazardous-waste contamination so that it can fairly be forced to
contribute to the costs of cleanup. We think, though, that the factors we
have identified — ownership or possession, knowledge, and control —
are closely related to most or all of the other factors identified.
14
We believe that ownership or possession, knowledge, and
control are the most critical factors in this analysis for the
following reasons. First, proof of ownership, or at least
possession, of the hazardous substance is required by the
plain language of the statute. See 42 U.S.C. § 9607(a)(3)
(“any person who . . . arranged for disposal or treatment
. . . of hazardous substances owned or possessed by such
person . . . .) (emphasis added). This required factor is the
starting point in determining “arranger liability” because, of
course, with ownership comes responsibility. See Aceto, 872
F.2d at 1382 (imposing “arranger liability” upon defendant
that owned hazardous substance throughout formulation
process because finding otherwise “would allow defendants
to simply ‘close their eyes’ to the method of disposal of their
hazardous substances”).
As we said above, though, we do not think that proof of
ownership or possession alone is a sufficient basis upon
which to ground “arranger liability.” A rule stating that this
factor alone would suffice could broaden the sweep of
Section 107(a)(3) beyond the bounds of fairness. If, for
example, a defendant arranges for a plant to treat a
hazardous substance that it owns or possesses, but has
absolutely no control over the processing and no knowledge
(or even reason to know) that the processing will result in
the release of hazardous waste, it would be unfair to
require that defendant to contribute to the cost of cleanup.
Imposing liability on the defendant under those
circumstances would go beyond Congress’s intent to
require those “actually responsible for any damage,
environmental harm, or injury from chemical poisons” to
share in the cost of cleanup. Bestfoods, 524 U.S. at 55-56(citations omitted).
Second, proof of a defendant’s knowledge that hazardous
waste can or will be released in the course of the process
it has arranged for, provides a good reason to hold a
defendant responsible because such proof demonstrates
that the defendant knowingly (if not personally) contributed
to the hazardous-waste contamination. Thus, general
knowledge that waste disposal is an inherent or inevitable
part of the process arranged for by the defendant may
suffice to establish liability. See Aceto, 872 F.2d at 1384.
15
This factor can be satisfied by proof of either actual
knowledge (e.g., a provision in an agreement estimating the
amount of environmentally harmful spillage inherent in the
processing of the defendant’s materials), or presumed
knowledge (e.g., the defendant is familiar with industry
custom, which is that the processing of the particular
material normally results in the release of harmful wastes).
See Cello-Foil Products, 100 F.3d at 1231 (concluding that
“intent need not be proven by direct evidence, but can be
inferred from the totality of the circumstances” when
evaluating “arranger liability”); Montalvo, 84 F.3d at 409
(indicating that inference that defendants had knowledge
that arranged for activity would entail spilling of pesticides
and draining of contaminated rinse water would expose
defendants to “arranger liability”).6
And third, proof that the defendant had control over the
process could establish that the defendant was responsible
for the resulting release of hazardous wastes. C.f. Shell Oil,
294 F.3d at 1055, 1057 (suggesting that “actual control”
rather than simply “authority to control” must be shown);
General Elec. Co. v. AAMCO Trans., Inc., 962 F.2d 281, 286-
87 (2d Cir. 1992) (implying that obligation to exercise
control alone satisfies “arranger liability” standard). In
many instances, proof of control could also create an
inference that the defendant had knowledge that the
process resulted in the release of hazardous wastes.
6. In Shell Oil, the Ninth Circuit distinguishes between “Direct Arranger
Liability” and “Broader Arranger Liability.” 294 F.3d at 1054-55. The
court describes the former as involving a transaction in which the “ ‘sole
purpose . . . is to arrange for the treatment or disposal of hazardous
wastes.’ ” Id. at 1054 (citation omitted). In other words, “[a] direct
arranger must have direct involvement in arrangements for the disposal
of waste.” Id. at 1055. The scienter required for “Direct Arranger
Liability” appears to be specific intent or at least specific knowledge of
the waste disposal. Either level of scienter is higher than the general
knowledge level that we require. Logically, though, if a plaintiff can prove
that a defendant had specific knowledge or specific intent, the plaintiff
can also prove the defendant had general knowledge. Accordingly, we see
no reason to draw a distinction between direct and broad (or indirect)
“arranger liability.” After all, there is only one category of “arranger
liability” under Section 107(a). We believe that only one set of factors is
required to analyze it.
16
Accordingly, we see these two factors as somewhat
interrelated.
In sum, we conclude that the analysis of “arranger
liability” under Section 107(a)(3) should focus on these
principal factors: (1) ownership or possession of a material
by the defendant; and (2) the defendant’s knowledge that
the processing of that material can or will result in the
release of hazardous waste; or (3) the defendant’s control
over the production process. A plaintiff is required to
demonstrate ownership or possession, but liability cannot
be imposed on that basis alone. A plaintiff is also required
to demonstrate either knowledge or control. We identify
these principal factors to establish the base-line for
analysis of “arranger liability” in this Circuit. It is certainly
possible that other factors could be relevant to this analysis
in a given case, and we encourage consideration of those as
well.
B. Disputed Material Facts With Respect to Morton’s
CERCLA Claims
Tenneco concedes that mercury is a hazardous substance
and that there was a release from the plant which has
caused Morton to incur response costs. Morton asserts that
Tenneco is liable because of two different types of
transactions — those involving PVM and those involving
“dirty mercury” — both of which comprise an arrangement
for the disposal of a hazardous substance under Section
107(a)(3). The District Court found, however, that there was
insufficient evidence supporting Morton’s claims to survive
Tenneco’s summary judgment motion. We will review each
of Morton’s claims under the “arranger liability” standard
articulated above to determine if the District Court correctly
granted judgment to Tenneco.
Our standard of review applicable to an order granting
summary judgment is plenary. See Curley v. Klem, 298
F.3d 271, 276-77 (3d Cir. 2002). We apply the same test
employed by the District Court under Federal Rule of Civil
Procedure 56(c). See Kelley v. TYK Refractories Co., 860
F.2d 1188, 1192 (3d Cir. 1988). Accordingly, the District
Court’s grant of summary judgment in favor of Tenneco was
17
proper only if it appears that “there is no genuine issue as
to any material fact and that [Tenneco] is entitled to a
judgment as a matter of law.” Fed. R. Civ. P. 56(c). In
evaluating the evidence, we “take the facts in the light most
favorable to the nonmoving party, [Morton], and draw all
reasonable inferences in [its] favor.” Doe v. County of
Centre, PA, 242 F.3d 437, 446 (3d Cir. 2001) (citation
omitted).
1. PVM Transactions
Morton alleges that Tenneco engaged in two types of “toll”
or “conversion” transactions with the plant involving PVM,
both of which comprise arrangements for the disposal of
hazardous substances owned by Tenneco under Section
107(a)(3). Basically, Morton contends that Tenneco
purchased the PVM either from the plant or some other
supplier and then paid a fee to the plant for the conversion
of the PVM into ROM or YOM. In either case, Morton
argues, Tenneco owned the PVM throughout the conversion
process, and was aware that the conversion process
inevitably resulted in the release of hazardous waste.
a. Ownership or Possession
The District Court addressed the issue of ownership or
possession, and found that “the record evidence shows”
that Tenneco did not own or possess the PVM that was
processed at the plant. (App. at 12-13). The Court based its
finding on two conclusions. First, the Court reasoned that
whether Tenneco purchased the PVM through a broker or
from the plant directly, the “ownership” alleged by Morton
was a bookkeeping function done solely for the purpose of
minimizing the plant’s financial risk in the volatile mercury
market. And second, the Court determined that there was
not a “showing that Tenneco was the necessary source of
the PVM,” or that “Tenneco was a manufacturer of PVM.”
Id. at 13.
We will look first at the District Court’s conclusion that
the “toll” or “conversion” transactions used by the plant
were solely for the purpose of minimizing the plant’s
financial risk in the volatile mercury market. One problem
18
with this conclusion is that it is an inference drawn in favor
of Tenneco rather than Morton, the party opposing the
motion. Another problem is that the conclusion
inappropriately resolves a material factual dispute.
Citing the plant brochure and the deposition testimony of
several former plant managers, Morton explains that the
plant customers, including Tenneco, had the option of
supplying their own PVM and storing it in the plant’s vault
or purchasing it directly from the plant. If the customer
chose the first option, the plant would charge for the
processing of the PVM into ROM or YOM and for insuring
the mercury while it was stored at the plant, but the
customer owned the mercury “at the beginning, middle,
and end of the process.” (Morton Brief at 13) (citing App. at
660, 881, 458). In fact, one plant manager testified that
when customers supplied PVM for processing, the
customers continued to hold title to it while it was at the
plant. Id. (citing App. at 238-240). Morton asserts that
Tenneco was “a major conversion customer” from at least
1963 to 1973, and that it supplied significant amounts of
PVM to the plant for processing. (Morton Brief at 13-14)
(citing, inter alia, numerous weekly Physical Inventories
and weekly Customer Ownership Reports documenting the
number of Tenneco-owned pounds of mercury stored at the
plant and converted into ROM and YOM).
To be sure, Tenneco disputes Morton’s contention that it
owned the PVM throughout the process. Tenneco contends
that the plant used certain billing methods (which look like
“conversion” or “toll” agreements) “to protect itself from the
price volatility of the mercury market and the associated
financial risk . . . .” (Tenneco Brief at 6). Tenneco also
asserts that the PVM it allegedly owned was never
segregated or labeled as belonging to it at any point in the
process. Id. at 21-22 (citing App. at 533-34). In fact,
Tenneco maintains that the customer-delivered PVM was
not the actual mercury used to manufacture that
customer’s ROM and YOM because mercury is
homogeneous; instead the mercury was added to the
plant’s inventory, like money in a bank. Id. at 22-23 (citing
App. at 635-38, 533-34, 472-73). (Thus, Tenneco’s
ownership of the PVM that was converted at the plant on
19
Tenneco’s behalf is very much in dispute. Morton has
submitted evidence, including plant records and the
testimony of former plant managers, from which it is fair to
infer that Tenneco owned the PVM (regardless of whether it
purchased it from the plant or a third party) throughout the
conversion process. Proof of ownership, of course, is one of
the principal factors in the “arranger liability” analysis.
Therefore, this evidence is sufficient to withstand Tenneco’s
motion for summary judgment.7
b. Knowledge
Although the District Court did not directly address the
knowledge factor, it discussed evidence that is relevant. The
Court referred to a memorandum from the United States
Environmental Protection Agency (“EPA”) cited by Morton
and concluded that the reference therein to Tenneco’s
disposal of mercury by-products was “just not enough”
evidence to survive a motion for summary judgment. (App.
at 14, 15).
Before we discuss the other evidence related to
7. Although we have already identified material disputed facts on the
issue of ownership that warrant remand for further consideration, we
pause to consider Tenneco’s argument that because mercury is
homogenous, it could not have been owned by any particular customer
throughout the oxide processing at the plant. See supra. Tenneco’s own
analogy to money in a bank suffices to demonstrate the
unreasonableness of its argument. When money is deposited in a bank
the depositor does not cease owning the money because the actual
dollars and cents it deposited are fungible and are used by other
customers. Whether the plant segregated each customer’s PVM or simply
added it all together is inconsequential. The ownership or possession
factor can be satisfied by proof that Tenneco owned or possessed the
amount of PVM that it paid to have processed into ROM and YOM. See
App. at 881 (Wood Ridge Chemical Corporation Balance Sheet and
Auditor’s Report, stating: “Since mercury is homogeneous, it is not
possible to physically identify owned from non-owned mercury, but
records are maintained to account for customer-owned quantities.”). Like
ownership of money in a bank, Tenneco’s ownership of a mercury is not
refuted by proof that other customers used the exact PVM it initially
deposited. Cf. Hercules, 247 F.3d at 721 (finding defendant owned
material despite intermingling with other materials during processing).
20
knowledge that was submitted by Morton, we will address
Tenneco’s argument that the EPA memorandum should not
be considered because it is not part of the record. Morton’s
counsel read a portion of the 1971 EPA memorandum
during the summary judgment oral argument, but
neglected to move its admission into the record. Id. at 80-
81. Prior to filing its appellate brief, Morton moved the
District Court to supplement the record with, among other
things, the EPA memorandum. The motion was denied, and
Morton has not appealed that decision. Because the
memorandum is not included in the certified record, even
after Morton’s motion to supplement the record, Tenneco
argues that we should not consider it at all. Tenneco
argues, too, that Morton’s counsel did not provide a copy of
the document to either the District Court or opposing
counsel. Morton asserts, however, that Tenneco produced
this document during discovery. And, because counsel read
the relevant portions of the memorandum into the record
during oral argument without objection from Tenneco and
because the District Court referred to the memorandum in
her ruling, the memorandum is part of the record.
According to Federal Rule of Appellate Procedure 10(a),
the record on appeal is comprised of (1) the original papers
and exhibits filed in the district court; (2) the transcript of
the proceedings; and (3) a certified copy of the docket
entries. “This definition not only includes items admitted
into evidence, but also includes items presented to the
district court and not admitted into evidence.” Waldorf v.
Shuta, 142 F.3d 601, 620 (3d Cir. 1998) (citation omitted).
Here, it is undisputed that the EPA memorandum was
never included in the record in its entirety. Given that the
memorandum does not appear to have been presented to
the District Court, we will not review it in its entirety (which
is not possible as a practical matter in any event because
the document was not included in the appendices). See
Waldorf, 142 F.3d at 620 (“The basic purpose behind the
rule is to prevent parties from supplementing the record on
appeal with items never presented to the district court.”)
The next question is whether we can appropriately consider
the portion of the memorandum that was read by Morton’s
counsel during oral argument and which is found in the
21
transcript. Because we conclude that Morton presented
evidence other than the portion of the EPA memorandum to
establish Tenneco’s knowledge, and because we think that
evidence created disputed facts, we do not need to decide
whether it is appropriate for us to consider the
memorandum on appeal. We leave it to the District Court
to evaluate the admissibility of the document on remand.
As we just mentioned, Morton presented evidence other
than the EPA memorandum to establish Tenneco’s
knowledge that the release of hazardous waste was an
inherent and inevitable aspect of mercury processing.
Specifically, Morton maintains that Tenneco was
knowledgeable about mercury processing because it used
ROM and YOM to manufacture products at its own
facilities, and because it had produced mercury oxide at its
Elizabeth facility in the past. (Morton Brief at 7-8, 9) (citing
App. at 855). Morton contends that Tenneco must have
been aware of the environmental risks inherent in mercury
processing because “the hazards of handling and
processing mercury were well known within the industry
generally,” and because “substantial mercury loss, as well
as known losses in dust and vapor, were an inherent part
of manufacturing mercury intermediates,” and that those
losses were “closely monitored by the Plant and its
customers who provided the mercury.” Id. at 9, 10 (citing
App. at 940, 942, 932-33, 796, 252-53).
Tenneco does not dispute that it used ROM and YOM to
manufacture its own products at its Elizabeth facility or
that it produced mercury oxide at the same facility in the
past. (Tenneco Brief at 24, 27). Instead, Tenneco accuses
Morton of improperly relying on general facts about the
plant’s relationship with its customers rather than facts
specific to the plant’s relationship with Tenneco in
attempting to prove Tenneco’s knowledge that waste was
released during mercury processing.
We think it is fair to infer from Tenneco’s involvement
with mercury oxides at its own facility that Tenneco had
some knowledge about the environmental hazards of
mercury processing. We also think it is fair to rely on
evidence provided by Morton about the plant customers
generally. While Morton did not present evidence showing
22
that Tenneco, specifically, was monitoring the mercury
losses during processing at the plant, it was not required to
do so in order to survive Tenneco’s motion for summary
judgment. After all, Tenneco was undisputably one of the
plant customers, and it is thus reasonable to infer (absent
proof to the contrary) that it had the same kind of
relationship with the plant as did the other customers.
Whether a jury would ultimately be persuaded by this
evidence is uncertain, but that is not the standard we apply
in evaluating a summary judgment motion. Accordingly, we
believe that there are disputed facts with respect to
Tenneco’s knowledge of hazardous waste releases during
the processing of PVM at the plant. Because knowledge is
one of the principal factors in the “arranger liability”
analysis, this evidence is sufficient to withstand Tenneco’s
motion for summary judgment.
c. Control
The District Court did not directly discuss this factor.
But, related to control, the Court observed that it would not
have mattered if Tenneco had shipped PVM directly to the
plant on a regular basis because “it is what happened [at
the plant] and [Tenneco’s] involvement . . . with respect to
what happened [at the plant] that’s important.” (App. at
12). We disagree with the Court’s suggestion that proof that
Tenneco shipped PVM directly to the plan would have been
irrelevant. Such proof could demonstrate Tenneco’s
ownership, or at least possession, of the PVM. More
importantly, though, the parties dispute Tenneco’s level of
control over “what happened” at the plant.
Morton states that “customers such as Tenneco played a
key role in shaping the Plant’s production processes and its
resulting emissions” by approving a new process for
mercury oxide manufacturing in the late 1960’s. (Morton
Brief at 11) (citing App. at 827-28, 923, 952, 953, 406-10).
Morton argues that the customer’s approval of the
production process amounted to some control over the
production process. Tenneco, however, disputes Morton’s
assertion that it had any control over the plant operations
or disposal practices. (Tenneco Brief at 12-13) (citing App.
at 504, 268, 340-42, 244-50).
23
Again, Morton’s evidence about the customers generally
is relevant — Tenneco was undisputably a customer of the
plant. Whether this evidence alone is sufficient to establish
control is another matter. Because we are remanding this
case to be analyzed under the standard articulated above,
we suggest that the District Court consider this evidence in
the subsequent proceedings.
d. Useful Product Defense
The District Court characterized the PVM transactions as
“sales transactions” and referred to the “useful product
defense” discussed in Pneumo Abex Corp. v. High Point,
Thomasville and Denton R.R. Co., 142 F.3d 769, 774 (4th
Cir. 1998). (App. at 13-14). Tenneco argued below, and
continues to argue on appeal, that this defense applies
because the transactions at issue were nothing more than
a sale of a useful product (PVM) and a purchase of finished
products (ROM and YOM). We believe that there are
disputed facts with respect to the critical elements of this
defense.‘’
In Pneumo Abex, the court concluded that “ ‘treatment
. . . of hazardous substances’ as used in CERCLA refers to
a party arranging for the processing of discarded hazardous
substances or processing resulting in the discard of
hazardous substances.” 142 F.3d at 774. Accordingly, the
sale of valuable materials to a processor alone does not
satisfy the requirements for “arranger liability.” See Glaxo
Wellcome, Inc., 189 F.3d at 164; Solvent Chemical Co., 225
F. Supp. 2d at 280.
We agree with Tenneco that the sale of PVM alone or the
purchase of ROM and YOM alone — without evidence of
ownership or possession, knowledge, and control — would
not be sufficient grounds on which to impose “arranger
liability.” Those transactions would either not meet the
standard we have articulated or would fall within the
“useful product defense.” It would be inappropriate at this
stage in the proceedings, however, to conclude that the
transactions between Tenneco and the plant were nothing
more than a sale of PVM or the purchase of ROM and YOM
because of the factual disputes we have described with
24
respect to the key elements of ownership or possession,
knowledge, and control.
2. “Dirty Mercury” Transactions
Morton asserts that Tenneco shipped its own “dirty
mercury” to the plant for processing into usable mercury, a
transaction which clearly qualifies Tenneco for “arranger
liability.” (Morton Brief at 15). Morton contends that it
submitted evidence sufficient to survive summary judgment
on this claim. Tenneco argues that Morton did not present
this claim to the District Court at all.
It is true that Morton did not include the “dirty mercury”
allegation in its Statement of Contested Facts for the
Pretrial Order. (Supp. App. at 2-3). As a general matter, the
pretrial order will “control the subsequent course of the
action unless modified by a subsequent order.” Fed. R. Civ.
P. 16(e). Moreover, the “finality of the pretrial order
contributes substantially to the orderly and efficient trial of
a case.” Petree v. Victor Fluid Power, Inc., 831 F.2d 1191,
1194 (3d Cir. 1987).
Nonetheless, “Rule 16 was not intended to function as an
inflexible straightjacket on the conduct of litigation . . .
instead, it was intended to insure the efficient resolution of
cases and, most importantly, minimize prejudicial
surprise.” Lamborn v. Dittmer, 873 F.2d 522, 527 (2d Cir.
1989) (citations omitted). Accordingly, Morton argues that
the issue is properly addressed on appeal because it raised
the issue in its brief opposing Tenneco’s motion for
summary judgment.
In response to Tenneco’s individual motion for summary
judgment, Morton incorporated its Statement of Material
Facts from the earlier summary judgment proceeding
involving all of the defendants. In paragraph 10 of that
Statement of Material Facts, Morton makes allegations
about PVM and “dirty mercury” transactions against “The
Customers” generally without specifying any customer by
name. (App. at 157). In paragraph 11, Morton asserts that
the “evidence confirming these transactions is
overwhelming” and cites numerous pages of deposition
testimony. Id. One of the cited portions of deposition
25
testimony indicates that Tenneco shipped “dirty mercury”
to the plant. Id. (deposition transcript of Joseph H.
Bernstein at 860).
The critical issue is whether Tenneco was on notice of
Morton’s “dirty mercury” claim during the summary
judgment proceedings despite the fact that the claim was
not included in the Pretrial Order. We find that Tenneco
was sufficiently aware of the claim. Tenneco was
presumably put on notice of Morton’s allegation at the time
of the Bernstein deposition given that Bernstein stated that
he believed that Tenneco shipped “dirty mercury” to the
plant. If not at the time of the deposition, Tenneco was
surely on notice as of the time it received Morton’s
Statement of Material Facts during the first summary
judgment proceeding. Finally, Tenneco was put on notice of
this claim a third time when Morton incorporated its
Statement of Material Facts into its response to Tenneco’s
individual motion for summary judgment. Thus, although
Morton’s failure to include this claim in the Pretrial Order
violates the letter of Rule 16(e), our consideration of this
claim on appeal does not violate the purpose of the rule,
which is primarily to “minimize prejudicial surprise.”
Lamborn, 873 F.2d at 527.
Assuming we would consider the “dirty mercury” claim,
Tenecco argues in the alternative that the District Court
properly granted summary judgment to Tenneco because,
quite simply,“Morton has absolutely no evidence to support
such a claim.” (Tenneco Brief at 57). We disagree.
Morton asserts that Tenneco shipped its own “dirty
mercury” to the plant for processing into usable mercury.
(Morton Brief at 15) (citing Bernstein Dep. at 40, 860).
Morton maintains that the plant’s standard operating
procedure was to store “dirty mercury” in separate flasks
labeled with the customer’s name and date received and
then to purify the mercury by a furnace-operated
distillation process, which produced environmentally
harmful residue. Id. (citing App. at 431-32, 443, 447, 461-
63, 868-69, 954). Morton contends that customers were
apprised of the fact that “a certain percentage of mercury
would be lost in the process.” Id. (citing App. at 963-65,
263). This evidence is sufficient to at least create a disputed
26
fact with respect to each of the principal “arranger liability”
factors — ownership or possession, knowledge, and control.
Therefore, under the standard we have just articulated, this
evidence suffices to survive summary judgment.
3. Spill Act and Common Law Claims
The District Court did not discuss Morton’s Spill Act
claim or its common law contribution claim, but it
nevertheless granted summary judgment to Tenneco on
both. Because the Spill Act is the “New Jersey analog to
CERCLA,” the standards for liability are the same. See SC
Holdings, Inc. v. A.A.A. Realty Co., 935 F. Supp. 1354, 1365
(D.N.J. 1996); State of New Jersey v. Gloucester
Environmental Management Servs., Inc., 821 F. Supp. 999,
1009 (D.N.J. 1993). Therefore, we vacate the District
Court’s grant of summary judgment on the Spill Act claim
for the same reasons that we vacate judgment on the
CERCLA claim. We conclude, however, that the District
Court’s grant of judgment to Tenneco on the common law
contribution claim was appropriate because that claim is
preempted by CERCLA Section 113(f). See In the Matter of
Reading Co., 115 F.3d 1111, 1117 (3d Cir. 1997) (holding
that CERCLA Section 113(f) preempts common law
contribution claim).
IV. Conclusion
Because there are disputed material facts with respect to
Morton’s CERCLA and Spill Act claims against Tenneco, we
will vacate the District Court’s grant of summary judgment
and remand those claims for further proceedings consistent
with this opinion. Because Morton’s common law
contribution claim is preempted by CERCLA, we will affirm
the District Court’s grant of summary judgment to Tenneco.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit