Gould Inc v. A&M Battery ( 2000 )

Opinions of the United
2000 Decisions States Court of Appeals
for the Third Circuit
10-31-2000
Gould Inc v. A&M Battery
Precedential or Non-Precedential:
Docket 99-3294
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Recommended Citation
"Gould Inc v. A&M Battery" (2000). 2000 Decisions. Paper 229.
http://digitalcommons.law.villanova.edu/thirdcircuit_2000/229
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Filed October 31, 2000
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 99-3294
GOULD INC.
v.
A & M BATTERY & TIRE SERVICE; ALBER T NIVERT &
CO.; ALEXANDRIA SCRAP CORPORATION; BEN
WEITSMAN & SON, INC. OF OSWEGO, NY; ALL STA TE
METAL COMPANY; AMERICAN SCRAP CO.; AMSOURCE
(PENN IRON & METAL); B. MILLENS & SONS, INC.;
BARNEY SNYDER, INC.; BRISTOL METAL CO., INC.;
BROCK'S SCRAP & SALVAGE; BROOKFIELD AUTO
WRECKERS, INC.; BROOKFIELD METAL CO.; BUFFERED
JUNK CO.; CAPITOL IRON & STEEL CO., INC.; CAPITOL
SCRAP IRON & METALS; CHARLES BLUESTONE CO.,
INC.; CLAREMONT METAL & PAPER STOCK; CLINTON
METAL CO.; COMMERCIAL IRON & METAL CO.;
CONSERVIT, INC.; COOPER METALLURGICAL CORP.;
COUSINS METAL; CRESTWOOD METAL CORP .; DAVIS
BROS. SCRAP CO., INC.; DAVIS INDUSTRIES; ELMAN
RECYCLING CO.; EMPIRE RECYCLING CORP.; EXETER
METALS CO.; F. SCHANERMAN; FAIRFIELD SCRAP CO.;
FREDERICK JUNK CO.; FULTON IRON & STEEL CO.;
GARBOSE METAL; GELB & CO., INC.; GIORDANO
WASTE MATERIAL CO., in its own capacity and as the
successor to Halpern Metals Company; GREENBLOTT
METAL CO., INC.; GUTTERMAN IRON & METAL CORP.;
H. & D. METAL CO.; H. SHAKESPEARE & SONS, INC.;
HARRY GOLDBERG & SONS; HURWITZ BROS. IRON &
METAL CO.; I. SHULMAN & SON CO., INC.; I. SOLOMON
METAL CO., INC.; INDEPENDENT IRON & MET AL;
INTERSTATE BURLAP & BAG CO.; ITHACA SCRAP
PROCESSORS; J & J METALS, INC.; J. BROOMFIELD &
SON, INC.; J. SEPENUK & SONS, INC.; JAMES
BURROWS COMPANY, INC.; JOE KRENTZMAN & SONS;
JOSEPH FREEDMAN CO., INC.; JOSH STEEL CO.;
KELLEHER BATTERY; KLEIN METAL CO., INC.;
KLIONSKY SCRAP IRON & METAL CO.; LAKE ERIE
RECYCLING; LARAMI METAL CO.; LIBERTY IRON &
METAL CO., INC.; LOUIS COHEN & SON, INC.; LOUIS
KUTZ & SON; LYELL METAL; M. HARTMAN, CO.;
MARLEY'S DIVISION OF ABE COOPER, Liverpool, NY;
MAXNOR META/M. SCHIPPER & SON; MEYER-SABA
METAL, CO.; MID-CITY SCRAP IRON & SALV AGE, CO.,
INC.; MODERN JUNK & SALVAGE, CO.; MONTGOMERY
IRON & METAL CO.; MORGAN HIGHWAY AUTO PARTS;
NEWBURGH SCRAP CO.; OLEAN STEEL SALES &
SERVICE; P. JACOBSON, INC.; P. K. SCRAP METAL CO.;
PASCAP CO., INC.; PENN HARRIS METALS CORP .; PENN
JERSEY RUBBER & WASTE CO.; R & R SALV AGE INC.;
R. L. POETH SCRAPYARD; RIEGEL SCRAP & SAL VAGE;
ROTH BROTHERS SMELTING CORP.; ROTH STEEL
CORPORATION; S & J GENERATORS & ST ARTER CO.; S.
KASOWITZ & SONS, INC.; SAM KAUFMAN & SON
METALS CO.; SEGAL & SONS, INC.; SQUARE DEAL
METAL RECYCLING; STATE LINE SCRAP CO., INC.;
SUISMAN & BLUMENTHAL; TIMPSON SALVAGE CO.;
TWIN CITIES WASTE & METAL; UNITED MET AL
TRADERS, INC.; V. VACCARO SCRAP CO.; W ALDORF
METAL CO.; WALLACE STEEL, INC.; WEINER
BROKERAGE CORP.; WEINER IRON & METAL CORP.;
WEINSTEIN & CO.; WILLIAM F. SULLIVAN & CO.; WIMCO
METALS, INC.; JOINT DEFENSE GROUP; PETTINELI
USED AUTO PARTS; DE MICROMIS GROUP; MARJOL
SITE RETAILERS' JOINT DEFESNE GROUP; MICRO
GROUP; WHITE & WILLIAMS DEFENSE GROUP; MARJOL
SITE DE MINIMUS SCRAPDEALERS GROUP; MARJOL
SITE PRP GROUP; EXXON, INC.; BODOW RECYCLING
CO.; KASSAB BROTHERS STEEL; CHARLES MEYER &
SON; ALLAN INDUSTRIES; ATTONITO RECYCLING
CORPORATION; CRASH'S AUTO PARTS & AUTO
SALES/CAP SURPLUS SCRAP METAL; CHARLES
EFFRON; CHAUNCEY SCRAP METALS; COATSVILLE
SCRAP; H. BIXON & SONS SCRAP & METAL; DA VIS
INDUSTRIES OF ARLINGTON, VA;
2
FRANK H. NOTT, INC.; G. CARLOMANGO, INC.; GEORGE
MARS MKM BUILDERS; HUDSON SCRAP CO.;
JACOBSON METAL CO.; ENOS METALS; KREIGER
WASTE; FIEGLEMAN RECYCLING CO.; LOUIS MACK &
CO. SCRAP METAL; LUKENS METAL CO.; M & M SCRAP
METAL CO.; M. LEVENSON CO., INC.; MARSON MET ALS,
INC.; N. BANTIVOLGLIO SONS PAPER & MET ALS, INC.;
NORWITZ, INC.; P. LEWIS & SONS; P ATCHOGUE SHEET
METAL SHOP; RICHARDSON GRAPHICS;
BLADENSBURG/RIVER ROAD METALS CO.; ST. MARY'S
IRON & STEEL CORP.; ZUCKERMAN SCRAP CO., INC.;
KEARNEY SCRAP CO.; MARLEY'S DIVISION OF ABE
COOPER; RIVERSIDE IRON & STEEL CORP.; A. ALLAN
INDUSTRIES, INC., t/a Allan Industries; A. SHAPIRO &
SONS; ABE COOPER SYRACUSE; ABE
COOPER-WATERTOWN CORP.; ABE E. NATHAN & SONS;
ABE N. SOLOMON, INC.; ACADEMY IRON & METAL CO.;
ACME METALS & RECYCLING, INC.; ACTION MET AL
COMPANY, INC.; ADVANCE AUTO STORES; AMERICAN
BAG & METAL CO., INC.; AMERICAN SCRAP & W ASTE
REMOVAL CO.; AMERICAN SCRAP PROCESSING, INC.,
d/b/a Riverside Iron & Steel; ANNADALE SCRAP
COMPANY; ANNE PIRCHESKY, former shareholder of
Eric's Iron & Steel Corp., a dissolved corporation f/d/b/a
Riverside Iron & Steel Corp.; ARCHBALD WRECKING CO.;
ATLANTIC BATTERY CORPORATION; B. ZEFF COMPANY,
INC.; N. BANTIVOLGLIO METALS, INC., renamed as
Bantivoglio Metal Company a/k/a Bantivolgio Metals and
f/k/a N. Bantivoglio's Sons, Inc.; BEAVER SMELTING
AND REFINING CORP.; BLADENSBURG RIVER ROAD
METALS COMPANY, INC.; CAMBRIDGE IRON AND METAL
CO., INC.; CAPITOL SCRAPYARD; CASH AUTOMOTIVE
PARTS; CHAPIN & FAGIN DIVISION OF GCF INC.;
CHARLES MEYERS & SONS; CHAUNCEY METAL
PROCESSORS, INC.; CLIMAX MANUFACTURING
COMPANY, a/k/a Spevak's Waste Material Company;
COATESVILLE SCRAP IRON & METAL CO., INC.;
COLONIAL METALS; CONTINENTAL METALS
CORPORATION; CROPSEY SCRAP IRON AND METAL;
3
D. KATZ & SONS, INC.; DANIELS & MILLER, INC.;
DECKER BROTHERS, INC.; DENAPLES AUTO PARTS;
DENVER CONSTRUCTION CORP., f/d/b/a Lukens Metal
Co.; DOUGLAS BATTERY MFG., INC.; E. EFFRON & SON;
EISNER BROTHERS; ERIC'S IRON & STEEL
CORPORATION, f/k/a Riverside Iron & Steel Corp; ERIC
PIRCHESKY, former shareholder of Eric's Iron & Steel
Corp., a dissolved corporation f/d/b/a Riverside Ir on &
Steel Corp.; FRANCIS WHITE SCRAP IRON & METAL;
GLICK IRON & METAL CO., INC.; G. CARLOMAGNO
SCRAP; G.M. HONKUS & SONS, INC.; GENERAL
BATTERY CORP.; GENERAL MET ALS & SMELTING CO.;
GEORGE MOSS; HARRY KAUFMAN; GORDON STEEL
CO.; GORDON WASTE CO.; H&B METAL CO., INC.;
HAROLD STRAUSS, in his own capacity and as
distributee of the assets of Denver Construction
Corporation f/d/b/a Lukens Metal Co.; HARRY'S
SCRAPYARD; HUDSON SCRAP METAL, INC.; I. KRAMER
AND SONS, INC.; I. RICHMOND & COMPANY, INC.;
INDUSTRIAL & MILL SUPPLIERS, INC.; IRVING RUBBER
& METAL COMPANY; J.C. PENNEY COMP ANY, INC.;
JACOB SHER, f/d/b/a Hudson Scrap; JEM METAL, INC.;
JULIAN C. COHEN SALVAGE CO.; K MAR T CORP.;
KASMAR METALS, INC.; KASSAB BROS.; KEARNY SCRAP
CO.; KREIGER WASTE PAPER CO.; LANCASTER BATTERY
CO., INC.; LANCASTER IRON & METAL CO., INC., a
former division of Lancaster Steel Co., Inc.; LEVENE'S
SON, INC.; LEVINE'S IRON & METAL, INC.; LEWIS
RAPHAELSON & SON, INC.; LONI-JO METALS, f/t/a
Attonito Recycling Corporation; LOUIS FIEGLEMAN &
CO.; LOUIS LEVIN & CO., INC.; LOUIS MACK CO., INC.;
LUKENS METAL CORP., d/b/a Lukens Metal Co.; M&M
SCRAP CORPORATION; M&P SCRAP IRON & MET AL
CORP.; M.C. CANFIELD SONS, f/k/a and f/t/a Lukens
Metal Corp.; M.H. BRENNER'S INC.; M. BURNSTEIN AND
COMPANY, INC.; M. ROSENBERG & SON, INC.; M.
WILDER & SON, INCORPORATED; METAL BANK OF
AMERICA; NOLTS AUTO PARTS, /Nolt's Factory
Warehouse; NORFOLK RECYCLING CORPORA TION;
NORTHEAST INDUSTRIAL BATTERIES, INC.; NOTT
ENTERPRISES, INC., f/k/a Frank H. Nott, Inc.;
4
NOVEY METAL CO.; PAVONIA SCRAP IRON & METAL
COMPANY, INC.; PEDDLERS JUNK CO.; PERLMAN &
SONS; PHILIP LEWIS & SONS; RIVER ROAD PRODUCTS,
INC.; ROSEN BROTHERS; S. KLEIN METALS CO., INC.;
S. ROME & CO., INC.; S.E.L. METAL CORPORA TION; ST.
MARY'S AUTO WRECKERS; SAMUEL GORDON & SONS,
INC.; SCHIAVONE & SON, INC.; renamed as Schiavone
Corp.; SCHILBERG INTERGRATED METALS, INC.,
f/d/b/a Schilberg Iron & Metal Co., Inc.; SEABOARD
SALVAGE; SITKIN METAL TRADING, INC.; STIKIN
SMELTING & REFINING, INC.; SMITH IRON & MET AL
CO.; SOLA METAL; SONE' ALLOYS, INC., d/b/a Enos
Metals; STAGER WRECKING CO.; STAIMAN INDUSTRIES,
INC.; SYRACUSE MATERIALS RECOVERY CORP .; TED
SCHWEEN; TEPLITZ'S MIDDLETOWN SCRAP, f/t/a
Middletown Scrap Iron, Inc.; THE BEST BA TTERY
COMPANY, INC.; TOWANDA IRON & METAL, INC.; UNION
CORPORATION, f/t/a Jacobson Metal Co.; UNITED
HOLDING CO., INC., a/k/a United Iron & Metal
Company, Inc.; UNITED SCRAP IRON & METAL CO.;
USA; UNIVERSAL WASTE, INC.; VINCENT A. P ACE
SCRAP METALS; VIRGINIA IRON & METAL COMP ANY,
INC., renamed as Virginia Ir on & Metal Company of
Portsmouth, Inc.; VIRGINIA SCRAP IRON & METAL CO.,
INC.; WILLIAM R. SULLENBERGER CO.; WILSON
BATTERY COMPANY, renamed as Wilson Battery & Oil
Company; WM. PORT'S SONS, INC.; ZUCKERMAN
COMPANY, INC.; ZUCKERMAN STEEL COMP ANY, INC.;
MEADVILLE METAL COMPANY; S. KAPLAN & SONS;
BATAVIA WASTE MATERIAL CO., INC.; BATTERY
MARKETING CORPORATION (BMC); BRIDGEPORT AUTO
PARTS, INC. f/d/b/a GREAT LAKES BA TTERY; BUFF &
BUFF, INC.; CAL'S AUTO SERVICE, INC.; CHEMUNG
SUPPLY CORP., d/b/a Otsego Iron & Metal; CHEVRON
CORPORATION, f/t/a Gulf Tire & Supply Co.; CHIDNESE
SCRAP METAL; CORNING MATERIALS, INC.; EXIDE
CORP., f/t/a Bay State Battery and Mid-Atlantic
Distributors; THE GOODYEAR TIRE & RUBBER
5
COMPANY, f/t/a Ameron Auto Centers; HODES
INDUSTRIES, INC.; J. SAX & CO.; JOHN BRUNSES &
SON; KOVALCHICK SALVAGE CO.; MAX BROCK CO.,
INC.; MICHIGAN LEAD BATTERY CO.; MORRIS J.
RADOV, f/d/b/a Meadville Waste Company; N.
BANTIVOLGLIO'S SONS, INC., a/k/a Bantivolglio
Investment Co.; NEW CASTLE JUNK; PETTINELLI IRON &
METAL; QUALITY STORES, INC., d/b/a Quality Far m &
Fleet; SAM KASSAB; SHELL OIL CO., INC.; TEXTRON,
INC.; UNIVERSAL COOPERATIVES, INC.; WESTERN AUTO
SUPPLY CO.; WM. KUGLER & BROS., INC., WORCESTER
METAL & BATTERY; YATES BATTERY CO.; FEDERAL
GOVERNMENT GROUP; THE FIEGLEMAN GROUP;
NAPORANO IRON & METAL CO.; PHILIP MAY CO.
v.
MODERN JUNK & SALVAGE CO.; ALEXANDRIA SCRAP
CORPORATION; BRISTOL METAL CO., INC., HUDSON
SCRAP METAL, INC.; JACOB SHER; BLADENSBURG
RIVER ROAD METALS COMPANY, INC.; JOINT DEFENSE
GROUP; WIMCO METALS, INC.,
Third Party Plaintiffs
v.
PHILLIP A. WEINSTEIN; ESTATE OF JOSEPH WEINSTEIN;
LAWRENCE FIEGLEMAN; UNITED STATES AIR FORCE;
UNITED STATES DEPARTMENT OF THE NAVY;
DEPARTMENT OF DEFENSE; UNITED ST ATES
DEPARTMENT OF THE ARMY; RICHARD B. CHENEY (in
his capacity as Secretary of Defense); H. LA WRENCE
GARRETT, III (in his capacity as Secr etary of the Navy);
DONALD B. RICE (in his capacity as Secretary of the Air
Force); MICHAEL P.W. STONE (in his capacity as
Secretary of the Army); DEFENSE REUTILIZA TION AND
MARKETING SERVICE; JOHN STEWART , COLONEL (in
his capacity as the Director of the Defense Reutilization
and Marketing Service); UNITED STATES DEFENSE
LOGISTICS AGENCY; CHARLES MCCLAUSAND, GENERAL
(in his capacity as head of the Defense Logistics Agency);
RAY ATKINSON; BUFF & BUFF, INC.;
6
BURLINGTON WASTE & METAL; CAPITOL BAG & WASTE
CO., INC.; CAPITOL SCRAP METAL CO.; RAY
CARDAMONE; R. COHEN & SON OF GLENS FALLS, INC.;
ROBERT DAVIS; EASCO WAREHOUSE; FERRO SCRAP
IRON & METAL, INC.; I. FIGELMAN & SON; S.
GARBOWITZ & SON, INC.; ARNOLD GROWICK; NATHAN
H. KELMAN, INC.; NATHAN'S WASTE & P APER STOCK
CO., INC.; NEW YORK TELEPHONE COMPANY; ONT ARIO
SCRAP METAL INC.; LOUIS PERLMAN & SONS, INC.; T .A.
PREDEL & CO., INC.; SAM T. ROSEN, INC., for merly
known as Otsego Iron & Metal Corporation; V ALLEY
STEEL, INC.; WILLIAM ANSETT WASTE CO., INC.; ZEKE'S
ENTERPRISES; LARRY TEITEL; TFCFINANCIAL
CORPORATION; JOHN DOE; JANE DOE; LAWRENCE
FIEGLEMAN; JOSEPH FIEGLEMAN; MARC A. ROBIN;
ANTHONY BONADIO; JOHN DELEO; JOSEPH STRAUB;
ROBERT MCANDREW; WILLIAM SULLENBERGER; M.N.
ADELSON & SONS, INC.; M. BERKOWITZ & COMPANY ,
INC.; GEORGE BERMAN & SON, INC.; JAMES BURROWS
COMPANY; PETER CLAIM; P.J. GRECO & SON, INC.;
JOE'S JUNK COMPANY; MEADVILLE METAL COMP ANY;
MENZOCK SCRAP COMPANY; MILLER ROOT & FUR
COMPANY; BERNARD PIRCHESKY; OSCAR PLATT; MAX
SILVER & SONS; BARNEY SNYDER OF OHIO, INC.,
Third Party Defendants
American Scrap Company; Lake Erie Recycling;
Alexandria Scrap Corporation; R&R Salvage, Inc.,
Appellants
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
(D.C. No. 91-cv-01714)
District Judge: The Honorable Richard P . Conaboy
ARGUED July 19, 2000
BEFORE: SLOVITER, NYGAARD, and FUENTES,
Circuit Judges.
(Filed October 31, 2000)
7
Donald B. Mitchell, Jr., Esq.
(Argued)
Rachel G. Lattimore, Esq.
Arent, Fox, Kintner, Plotkin & Kahn
1050 Connecticut Avenue, N.W.
Washington, DC 20036-5339
Attorneys for Appellants
Dennis R. Suplee, Esq. (Argued)
Schnader, Harrison, Segal & Lewis
1600 Market Street, Suite 3600
Philadelphia, PA 19103
John M. Armstrong, Esq.
Schnader, Harrison, Segal & Lewis
220 Lake Drive East, Suite 200
Cherry Hill, NJ 08002-1165
Attorneys for Appellee
OPINION OF THE COURT
NYGAARD, Circuit Judge.
This case arises from a contribution action initiated by
appellee, Gould, Inc., under S 113 of the Comprehensive
Environmental Response, Compensation and Liability
Act, 42 U.S.C. S 9613. Appellants, Alexandria Scrap
Corporation, R&R Salvage Company, Lake Erie Recycling,
and American Scrap Company, appeal from several District
Court orders in favor of Gould. Although appellants denied
liability on several bases below, the sole issue they raise on
appeal is whether the post-judgment enactment of the
Superfund Recycling Equity Act, Pub. L. No. 106-113, 113
Stat. 1536 (November 29, 1999), requires r eversal of the
judgments entered against them. We conclude that it does,
and will, therefore, vacate the judgment of the District
Court, and remand the cause for further pr oceedings.
I. Background Facts
From 1961 to 1980, the Marjol Battery and Equipment
Company operated a battery breaking (i.e., r ecycling) facility
8
in the Borough of Throop, Lackawana County,
Pennsylvania. Appellants, all scrap metal dealers, each sold
spent lead-acid batteries to Marjol during the 1960s and
1970s for recycling. One appellant, Alexandria Scrap
Corporation, also sold non-battery, or "soft" lead to Marjol.
The lead-acid battery recycling process is referred to as
"breaking" because it literally r equires the recycler to break
open the battery's outer casing and remove its lead and
other recyclable components. Until the 1970s, the battery
casings themselves, which were then made of har d rubber,
were not recyclable. As a consequence, the casings were
simply discarded, often contaminated with various amounts
of residual lead and other toxic substances. Each of the
appellants, like all of Marjol's suppliers at the time, sold
spent lead-acid batteries to Marjol manufactur ed with hard
rubber casings. The vast majority, if not all, of such casings
were eventually dumped into old mine shafts located on
Marjol's property, or otherwise buried on site.
Beginning in the late 1970s, battery manufactur ers
began producing lead-acid batteries with casings made of
polypropylene plastic rather than rubber . Eventually,
battery recyclers such as Marjol found ways to recycle the
plastic casings as well as other components fr om spent
batteries. While trying to develop processes for recycling the
plastic casings, however, Marjol simply stockpiled
innumerable, broken, plastic casings on its pr operty. Like
their hard rubber predecessors, these plastic casings were
contaminated with lead and other toxic substances, and
Marjol made virtually no effort to keep those substances
from migrating through the environment.
As early as the 1960s, the Pennsylvania Department of
Environmental Resources ("DER") began receiving
complaints about emissions from the Marjol site. There is
no question that Marjol's operations contaminated both its
own property and its neighbors'. At the time, however,
environmental law was largely undeveloped, and
enforcement was generally lax.
On March 7, 1967, the DER's Bureau of Air Pollution
Control entered an order requiring Marjol to reduce
emissions from its site to the point that no emissions would
9
be detectable beyond its property line. Marjol repeatedly
violated that order, first by failing to install the necessary
equipment, and then by rendering it inef fective because it
had slowed the speed of battery processing. Between 1975
and 1977, the DER issued a cease operations r equest that
Marjol refused, and several remedial or ders that it generally
ignored.
In early 1980, Gould, Inc., of Ohio, agreed to acquire
Marjol. When the DER learned of the planned acquisition,
it conducted further investigations at the Marjol site and
ultimately issued an "end of the line" or der. That order
essentially required Marjol to comply with the DER's
remedial demands or cease operations. Gould, which was
generally aware of Marjol's history with the DER, went
ahead with the acquisition, and initiated measur es to
comply with the DER's remedial demands. Ultimately,
however, Gould agreed to shut down the Marjol site.
Thereafter, the DER advised Gould that no further
remediation of the Marjol site would be r equired, and no
further enforcement actions taken, unless battery-breaking
operations resumed. Gould performed various forms of
maintenance and "housekeeping" at the Marjol site, but
otherwise generally conducted no activities ther e. Later, the
federal Environmental Protection Agency ("EPA") initiated
investigations of the Marjol site, ultimately deter mining
"that hazardous substances had been r eleased, and that
there was an ``imminent and substantial endangerment' to
the public health, welfare, or the envir onment." Appellee's
Br. at 5-6.
II. Procedural History
In April 1988, Gould entered into a Consent Agr eement
and Order with the EPA under S 106(a) of CERCLA, 42
U.S.C. S 9606. That agreement requir ed Gould to conduct
site stabilization activities relating to lead and other
hazardous substances at and around the Marjol site. In
May 1990, Gould entered into a second consent order, this
time with both the EPA and the Pennsylvania DER. This
second order under the Resource Conservation and
Recovery Act, 42 U.S.C. S 6928(h), requir ed Gould to
10
perform a Facility Investigation and Corrective Measure
Study at the Marjol site.
In December 1991, Gould initiated a civil action seeking
cost recovery from approximately 240 Potentially
Responsible Parties ("PRP's") pursuant toS 107(a)(4)(B) of
CERCLA, or, alternatively, contribution pursuant to S 113.
The defendants moved for partial summary judgment,
arguing that because Gould was a responsible party who
had entered into a consent agreement r esolving its liability
to the government, it was limited to asserting a
contribution claim only. The District Court agr eed, and
granted partial summary judgment in favor of the
defendants. See Gould, Inc. v. A&M Battery & T ire Serv.,
901 F. Supp. 906, 910 (M.D. Pa. 1995).
The District Court held a bench trial on the issue of
allocating response costs among those defendants held
liable to Gould for contribution and held "that Gould
should bear 75% of the clean-up costs and that the
Defendants should bear the remaining 25% . . . ." Gould,
Inc. v. A&M Battery & Tire Serv., 987 F. Supp. 353, 372
(M.D. Pa. 1997). The court then apportioned the
defendants' 25% share according to the amount of waste
each contributed to the Marjol site. See id.
With the exception of the four appellants, Gould
eventually settled with all defendants. After appellants filed
their notice of appeal, Congress passed, and the President
signed, the Superfund Recycling Equity Act . Appellants are
pursuing only their claim that this Act shields them from
contribution liability to Gould. Gould counters that the Act
does not apply to materials that contain non-r ecyclable
components, that it does not apply retr oactively to this
case, and that if it does apply retroactively, it violates the
Fifth Amendment's due process guarantee.
III. Background Law
Under CERCLA:
Notwithstanding any other provision or rule of law, and
subject only to the defenses set forth in subsection (b)
of [42 U.S.C. S 9607] --
11
(3) any person who by contract, agreement, or
otherwise arranged for disposal or treatment . . . of
hazardous substances owned or possessed by such
person, [shall be liable for]
(A) all costs of removal or remedial act ion incurred by
the United States Government or a State or an Indian
tribe not inconsistent with the national contingency
plan;
(B) any other necessary costs of response inc urred by
any other person consistent with the national
contingency plan;
(C) damages for injury to, destruction of, or loss of
natural resources, including the r easonable costs of
assessing such injury, destruction, or loss r esulting
from such a release; and
(D) the costs of any health assessment or health e ffects
study carried out under [42 U.S.C. S 9604(i)].
42 U.S.C. S 9607(a).
After failing to pass several earlier versions, Congress
passed, and on November 29, 1999, the President signed
into law, the Superfund Recycling Equity Act, Pub. L. No.
106-113, Div. B, S 1000(a)(9) [S. 1948, T itle VII, 6001(b)(1)],
113 Stat. 1536 (November 29, 1999). The Act, intended to
clarify liability under CERCLA, provides that a person who
meets certain specified criteria, and "who arranged for
recycling of a recyclable material shall not be liable under
sections 9607(a)(3) and 9607(a)(4) of [42 U.S.C.] with
respect to such material." 42 U.S.C. S 9627(a)(1). The Act
defines a "recyclable material" to include, inter alia, "spent
lead-acid, spent nickel-cadmium, and other spent batteries
. . . ." Id. S 9627(b).
In transactions involving spent lead-acid batteries, the
transaction:
shall be deemed to be arranging for recycling if the
person who arranged for the transaction (by selling
recyclable material or otherwise arranging for the
recycling of recyclable material) can demonstrate by a
preponderance of the evidence that at the time of the
transaction--
12
(1) the person met the criteria set forth in[S 9627(c)]
with respect to the spent lead-acid batteries; and
(2)(A) [t]he person was in compliance with a pplicable
Federal environmental regulations or standards, and
any amendments thereto, regarding the storage,
transport, management, or other activities associated
with the recycling of spent lead-acid batteries[.]"
Id. S 9627(e)(1) & (2)(A).
Although the Act does contain several exclusions, see id.
S 9627(f), only one is at issue here. Mor e a limitation than
an exclusion, S 9627(i) provides that the recycling
exemptions established by the Act "shall not af fect any
concluded judicial or administrative action or any pending
judicial action initiated by the United States prior to
[November 29, 1999]." (emphasis added).
IV. Discussion
A. Retroactivity
By its express language, the Act has no ef fect on "any
concluded judicial or administrative action or any pending
judicial action initiated by the United States prior" to its
enactment. 42 U.S.C. S 9627(i). This section exempts two
categories of action from retroactive application of the Act.
One category exempts all actions concluded as of November
29, 1999, whether administrative or judicial in nature. The
second category exempts pending actions initiated by the
United States prior to November 29, 1999, but only if they
are judicial in nature. By implication or negative inference,
then, Congress intended the Act to apply r etroactively to all
other types of actions. One District Court case, Morton Int'l
Inc. v. A.E. Staley Mfg. Co., 2000 WL 1038176, at *9 (D.
N.J. July 19, 2000) has held that the language of the Act
reflects Congress' intent that the r ecycling exemption apply
to pending private party actions, thus applying retroactively
to, inter alia, judicial and administrative actions that were:
(1) initiated prior to November 29, 1999; (2) initiated by a
party other than the United States; and (3) still pending as
of November 29, 1999. We agree. This case is a judicial
13
action, initiated by a private party, and was pending on
appeal as of November 29, 1999.
Gould argues that whenever a private party initiates a
judicial action following a related federal administrative
action, the causal link between the two requir es the court
to deem the judicial action to have been initiated by the
United States. Gould's proffered construction of S 9627(i) is
belied not only by the Act's plain language, but also by its
legislative history. Beginning in 1994, legislators
introduced, and the two houses of Congr ess considered,
various versions of the Act before finally succeeding in
passing it in November 1999. See, e.g. , 145 Cong. Rec.
S10391-01, S10433 (August 5, 1999) ("The language of this
bill is the culmination of a process that we have been
working on since the 103rd Congress."). Though broadly
supported, congressional approval eluded the Act for
several years because it was attached to lar ger, and far
more controversial, attempts to refor m CERCLA as a whole.
As a consequence of its protracted gestation, much of the
Act's relevant legislative history was cr eated in connection
with its failed predecessors. Nevertheless, the history of
prior bills is not entirely irrelevant to our interpretation of
their enacted successors. In the case of the Super fund
Recycling Equity Act, the history associated with prior
versions is all the more relevant because the proposed
statutory language, as well as the intent of its drafters,
remained consistent throughout the pr otracted effort to
pass it.
The 106th Congress passed the Act as part of an
omnibus legislation package approved near the end of its
1999 Session. See Consolidated Appropriations Act, 2000,
106-113, 113 Stat. 1501, 1501A-598 (November 29, 1999).
The version of the Act ultimately enacted was first
introduced as a stand-alone bill in the Senate, see S. 1528,
reprinted in 145 Cong. Rec. S10391-01, S10432 (August 5,
1999), which ultimately attached it to a lar ger bill pending
before that legislative chamber. See S. 1948, as enacted at
113 Stat. 1501A-521. During discussions of that lar ger bill,
Senator Lott obtained unanimous consent to insert the
14
Act's legislative history into the recor d. See 145 Cong. Rec.
S14986-03, S15048 (November 19, 1999).1
According to that history, the Act "pr ovides for relief from
liability for both retroactive and pr ospective transactions,"
id. at S15049, and "[a]ny pending judicial action, whether
it was brought in a trial or appellate court, by a private
party shall be subject to the grant of relief from liability."
Id. at S15050. The same history further explains that
"Congress intends that any third party action or joinder of
defendants brought by a private party shall be considered
a private party action, regardless of whether or not the
original lawsuit was brought by the United States." Id.
(emphasis added).
If the Act applies retroactively even to private-party
actions prompted by exempted federal judicial actions, it
makes no sense to conclude that it does not apply
retroactively to private actions pr ompted by non-exempt
administrative actions. Thus, these expressions of
congressional intent and others found thr oughout the Act's
legislative history, even if not controlling, clearly support a
common-sense construction of the Act that applies it
retroactively to private judicial actions such as this.
B. Due Process
Gould argues that if the Act applies r etroactively, then it
violates the Fifth Amendment's due process guarantee
because it lacks a rational basis. More specifically, Gould
argues, the Act:
creates an arbitrary classification which r ewards a
recalcitrant PRP who forced the United States to
expend effort and its resources tofile suit, but
penalizes a responsible PRP, like Gould, which agreed
to clean up a battery-breaking site.
_________________________________________________________________
1. Although there might be some question about reliance on a History
prepared by one senator and thereafter inserted with unanimous consent
because it does not appear to have been appr oved in substance by either
a Committee or a majority of the Senate, in this case we rely on Senator
Lott's History because Gould has not objected.
15
Appellee's Br. at 33.
To pass rational-basis review, however , the Act need only
be justifiable on some rational basis. Mor eover, it is not
necessary that Congress have actually articulated a
particular rational basis. Instead, " ``the burden is on the
one attacking the legislative arrangement to negative every
conceivable basis which might support it, whether or not
the basis has a foundation in the recor d.' " Contractors
Ass'n v. City of Philadelphia, 6 F.3d 990, 1011 (3d Cir.
1993) (quoting Heller v. Doe, 509 U.S. 312 (1993)). Here,
the distinction between privately and federally initiated
judicial actions is rationally related to pr eserving the public
fisc. For instance, the distinction ensures that once the
United States has expended public funds to initiate a
judicial action, the Act does not render that expenditure
wasted by exempting an otherwise covered person from
liability. In affording such fiscal pr otection, the Act
rationally distinguishes between the United States, a non-
culpable party, and a party such as Gould who actually
contributed to the contamination underlying its claim for
contribution. That rationale is enough to pass
constitutional muster. Thus, the Act can and does apply
retroactively without violating due pr ocess.
C. The Act's Effect on The Summary Judgment
Having concluded that the Superfund Recycling Equity
Act applies retroactively, the next issue is whether the Act
exempts appellants from liability. Under the Act, a person
who arranged for recycling of a recycling material is exempt
from CERCLA liability with respect to that material. See 42
U.S.C. S 9627(a)(1). The Act defines a "r ecyclable material"
to include, inter alia, spent lead-acid batteries. See id.
S 9627(b). That definition is not limited to the lead
contained in spent lead-acid batteries, nor to its casing, nor
to any other individual or combination of individual
components. The Act plainly and unambiguously defines
the entire spent lead-acid battery as a "r ecyclable material."
See id.
[A] transaction involving spent lead-acid batteries . . .
shall be deemed to be arranging for recycling if the
16
person who arranged for the transaction (by selling[the
lead-acid batteries] or otherwise arranging the r ecycling
of [the lead-acid batteries]) can demonstrate by a
preponderance of the evidence that at the time of the
transaction:
(1) The [spent lead-acid battery] met a comm ercial
specification grade.
(2) A market existed for the [spent lead-acid b attery].
(3) A substantial portion of the [spent lead-ac id
battery] was made available for use as feedstock for
the manufacture of a new saleable product.
(4) The [spent lead-acid battery] could have been a
replacement or substitute for a virgin raw material,
or the product to be made from the [spent lead-acid
battery] could have been a replacement or substitute
for a product made, in whole or in part, fr om a virgin
raw material.
Id. S 9627(c), incorporated by reference into S 9627(e)(1).2
The parties' primary disagreement on this issue concerns
whether the spent lead-acid batteries in question could
have been a replacement or substitute for a vir gin raw
material as the fourth element requires. Appellants argue
that the requirement applies only to those portions of a
spent lead-acid battery that are recyclable. Gould, on the
other hand, argues that the "replacement or substitute
provision" applies to the whole battery and that the Act
does not apply unless every component of the spent lead-
acid battery at issue is recyclable, and each component can
be "a replacement or substitute for a vir gin material."
Appellee's Br. at 38-54.
Stated differently, Gould concedes the third element
requires only that "a ``substantial portion' of the recyclable
material was in fact made available for use as a feedstock
in a manufacturing process." Appellee's Br . at 38 (emphasis
added). But Gould argues that the fourth "element requires
_________________________________________________________________
2. The Act's additional requirements for exemption from liability are not
at issue in this case. See 42 U.S.C. S 9627(c), incorporated by reference
in S 9627(e)(1); id. S 9627(i)(e)(2)(A).
17
a purported recycler seeking the protection of the statute to
show that all, not just a ``substantial portion' as in element
3, of the recyclable material ``could have been' either a
direct or indirect replacement for a raw material." Id.
(emphasis added). Thus, Gould concludes, appellants are
not covered by the Act because they sold Marjol spent lead-
acid batteries made with non-recyclable rubber casings.
Gould's argument, and therefore its conclusion, fail for
several reasons. First, the language of the Act itself belies
Gould's argument. As previously noted, the Act defines a
recyclable material to include the entir e "spent lead-acid
battery." It makes no distinction between spent lead-acid
batteries that are wholly recyclable, and those that contain
non-recyclable components. This lack of distinction is all
the more significant when considered in light of the Act's
purposes, and the context in which it was passed. For
instance, one of the Act's purposes is "to r emove the
disincentives and impediments to recycling cr eated as an
unintended consequence of the 1980 Superfund liability
provisions." S. 1948 S 6001(a)(3), as enacted at 113 Stat.
1501A-598-99. In other words, Congress intended the Act
to overrule court decisions holding bona fide sellers of
recyclable materials liable under CERCLA. See, e.g., 145
Cong. Rec. S10391-01, S10431 (August 5, 1999) (Statement
of Senator Lott) (noting that the Act was intended to
"remove[ ] an unintended consequence of the Superfund
statute" including court decisions holding "that recyclables
are materials that have been disposed of and ar e therefore
subject to Superfund liability").
Second, it is clear from the Act's legislative history that
Congress realized not all components of"recyclable
materials," including spent lead-acid batteries, are
recyclable. For instance, the legislative history placed on
the record for S. 1528 explains that:
for a transaction to be deemed arranging for r ecycling,
a substantial portion, but not all, of the r ecyclable
material [e.g., a spent lead-acid battery] must have
been sold with the intention that the material would be
used as a raw material, in place of a virgin material, in
the manufacture of a new product.
18
145 Cong. Rec. S14986-03, S15049 (November 19, 1999)
(emphasis added).
Other unequivocal evidence that Congress did not intend
to require that a "recyclable material" be 100% recyclable
can be found throughout the Act's six-year legislative
history. According to that history:
The first part of [the fourth element] acknowledges
the fact that modern technology has developed to the
point where some consuming facilities exclusively
utilize recyclable materials as their raw material
feedstock and manufacture a product that, had it been
made at another facility, may have been manufactur ed
using virgin materials. Thus, the fact that the
recyclable material did not directly displace a virgin
material as the raw material feedstock should not be
evidence that the requirements of [S 9627(c)] were not
met.
Secondary feedstocks may compete both dir ectly and
indirectly with virgin or primary feedstocks. In some
cases a secondary feedstock can directly substitute for
a virgin material in the same manufacturing pr ocess.
In other cases, however, a secondary feedstock used at
a particular manufacturing plant may not be a dir ect
substitute for a virgin feedstock, but the pr oduct of
that plant competes with a product made elsewhere
from virgin material. For example aluminum may be
utilized at a given facility using either vir gin or
secondary feedstocks meeting certain specifications. In
this case, the virgin and secondary feedstock materials
compete directly. A particular steel mill, however, may
only utilize scrap iron and steel as a feedstock because
of the design restrictions of the facility. If that mill
makes a steel product that competes with the steel
product of another mill, which utilizes a vir gin
feedstock, the conditions of this paragraph have been
met. In this example, the two streams of feedstock
materials do not directly compete, but the pr oduct
made from them do. It is the intent of this paragraph
that the person be able to demonstrate the general use
for which the feedstock material was utilized. It is not
19
the intent that the person show that a specific unit was
incorporated into a new product
Id. Thus, the language of the fourth element is intended to
explain when a recycling transaction is deemed to displace
the use of virgin raw materials, not to r estrict the Act's
coverage to materials that are 100% recyclable.
V. Conclusions
In summary, we hold that Congress intended the
Superfund Recycling Equity Act to apply r etroactively to
judicial actions initiated by private parties prior to
November 29, 1999, if still pending on that date. Gould's
contribution claims against Appellants meet those criteria.
Thus, the Act applies to Gould's claims, and the District
Court's order granting summary judgment to Gould on the
issue of contribution liability, as well as its judgment
allocating liability, will be vacated. We will remand the
cause to the District Court for it to determine whether
Appellants satisfy the Act's requirements for exemption
from liability.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
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