Dtsc, California v. Burlington Northern ( 2008 )

Volume 1 of 2
FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, 
Plaintiff,
and
DEPARTMENT OF TOXIC SUBSTANCES
CONTROL, STATE OF CALIFORNIA,
Plaintiff-Appellant,
No. 03-17125
v.
D.C. Nos.
BURLINGTON NORTHERN & SANTA
FE RAILWAY COMPANY, as
 CV-92-05068-OWW
CV-96-06226-OWW
successor in interest to the CV-96-06228-OWW
Atchison, Topeka & Santa Fe
Railway Company; UNION PACIFIC
TRANSPORTATION COMPANY, as
successor in interest to the
Southern Pacific Transportation
Company; SHELL OIL COMPANY,
Defendants-Appellees.

2887
2888 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
UNITED STATES OF AMERICA, 
Plaintiff-Appellant,
and
DEPARTMENT OF TOXIC SUBSTANCES
CONTROL, STATE OF CALIFORNIA,
Plaintiff,
v. No. 03-17153
BURLINGTON NORTHERN & SANTA
FE RAILWAY COMPANY, as
 D.C. No.
CV-92-05068-OWW
successor in interest to the
Atchison, Topeka & Santa Fe
Railway Company; UNION PACIFIC
TRANSPORTATION COMPANY, as
successor in interest to the
Southern Pacific Transportation
Company; SHELL OIL COMPANY,
Defendants-Appellees.

DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2889
UNITED STATES OF AMERICA; 
DEPARTMENT OF TOXIC SUBSTANCES
CONTROL, STATE OF CALIFORNIA,
Plaintiffs-Appellees,
v.
BURLINGTON NORTHERN & SANTA No. 03-17169
FE RAILWAY COMPANY, as D.C. No.
successor in interest to the CV-92-05068-OWW
Atchison, Topeka & Santa Fe
Railway Company; UNION PACIFIC  ORDER
AMENDING
TRANSPORTATION COMPANY, as OPINION AND
successor in interest to the AMENDED
Southern Pacific Transportation OPINION
Company,
Defendants,
and
SHELL OIL COMPANY,
Defendant-Appellant.

Appeal from the United States District Court
for the Eastern District of California
Oliver W. Wanger, District Judge, Presiding
Argued and Submitted
September 12, 2005—San Francisco, California
Submission Withdrawn September 14, 2005
Resubmitted March 16, 2007
Filed March 16, 2007
Amended September 4, 2007
Second Amendment March 25, 2008
2890 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
Before: Betty B. Fletcher, John R. Gibson,* and
Marsha S. Berzon, Circuit Judges.
Order;
Dissent to Order by Judge Bea
Opinion by Judge Berzon
*The Honorable John R. Gibson, Senior United States Circuit Judge for
the Eighth Circuit, sitting by designation.
2894 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
COUNSEL
Aaron P. Avila, Department of Justice, Washington, D.C.,
argued the case for appellant EPA; Kelly Johnson, Acting
Assistant Attorney General, David C. Shilton, James R.
MacAyeal, and John T. Stahr, Department of Justice, Envi-
ronment and Natural Resources Division, Washington, D.C.,
Allyn Stern, Office of Regional Counsel, EPA, were on the
briefs for appellant EPA.
Reed Sato, Deputy Attorney General of the State of Califor-
nia, Sacramento, California, argued the case and was on the
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2895
briefs for appellant California Department of Toxic Sub-
stances Control; Bill Lockyer, Attorney General of the State
of California, Tom Greene, Chief Assistant Attorney General,
and Theodora P. Berger, Senior Assistant Attorney General,
Sacramento, California, were on the briefs for appellant Cali-
fornia Department of Toxic Substances Control.
John F. Barg, San Francisco, California, argued the case for
appellees Burlington Northern & Santa Fe Railway Company
and Union Pacific Transportation Company; Marc A. Zeppe-
tello, San Francisco, California, was on the briefs for the
appellees.
Michael K. Johnson, San Francisco, California, argued the
case for appellee-cross-appellant Shell Oil Company; Randall
J. Heldt, Shell Oil Company, Houston, Texas, was on the
briefs for appellee-cross-appellant Shell.
ORDER
The full court has been advised of the petitions for rehear-
ing en banc. A judge of the court requested a vote on en banc
rehearing. The majority of the active judges have voted to
deny rehearing the matter en banc. Fed. R. App. P. 35(f).
The panel has voted to amend its opinion and to deny
appellees’ petitions for rehearing with the following amend-
ments.
The opinion filed March 16, 2007 and amended September
4, 2007, published at 502 F.3d 781 (9th Cir. 2007), is hereby
further amended as follows:
1. On page 790, add a new footnote 5 after reading:
2896 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
Shell was deeply involved in the delivery process:
The district court found that Shell determined and
arranged for the means and methods of delivery of
D-D to the Arvin plant and detailed loading and
unloading procedures. It also found that the trucking
companies with which Shell contracted for delivery
did the transfers for most of the relevant period. It
was only in the early 1980s that Shell dictated that
B&B personnel should instead do the unloading.
2. Renumber footnote 7 on page 792 as footnote 8 and
replace its text with <0.9 acres 4.7 acres = 0.191 (19.1%).>.
3. In the last paragraph on page 792, replace
with .
4. In the first paragraph on page 793, replace
with .
5. In the first full paragraph on page 794, replace with .
6. Replace with
in the second-to-last sentence of footnote 16 on page 795.
7. Replace the paragraph beginning on page 795 and continu-
ing to page 796 with:
The question, then, is what the uniform federal
law should be. Once again, all the circuits that have
addressed this question have followed Chem-Dyne,
holding that the appropriate starting point for a com-
mon law rule of apportionment applicable to CER-
CLA cases is Section 433A of the Restatement of
Torts. See Hercules, 247 F.3d at 716 & n.9, 717
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2897
(noting that courts support the divisibility doctrine as
borrowed from the Restatement); Bell Petroleum, 3
F.3d at 895 (relying on the Restatement); Chem-
Dyne, 572 F. Supp. at 810 (establishing this method).
We agree that harm may be apportioned when “there
exists a reasonable basis for divisibility” of a single
harm or when several “distinct harms” are present.
Hercules, 247 F.3d at 717.18
Because CERCLA’s statutory liability scheme dif-
fers from the common law in important respects,
however, our sister circuits have recognized that its
principles must be somewhat modified to fit the
CERCLA context. See, e.g., Bell Petroleum, 3 F.3d
at 902 (“Restatement principles must be adapted,
where necessary, to implement congressional intent
with respect to liability under the unique statutory
scheme of CERCLA.”); Hercules, 247 F.3d at 717
(The Restatement is “the starting point . . . . [but]
only to the extent that it is compatible with the provi-
sions of CERCLA.”).We concur in this general con-
clusion and acknowledge, in particular, that there are
two areas where the Restatement approach is a
somewhat poor fit and requires slight modifications
to ensure that its approach comports with the liability
18
We of course agree with our sister circuits that, if adequate informa-
tion is available, divisibility may be established by “volumetric, chrono-
logical, or other types of evidence,” Hercules, 247 F.3d at 719 (citing Bell
Petroleum, 3 F.3d at 895-96), including appropriate geographic consider-
ations, see United States v. Township of Brighton (“Brighton II”), 282
F.3d at 919-20 (6th Cir. 2002), Bell Petroleum 3 F.3d at 903-04. We hold
only that, in this case, Shell and the Railroads failed to show that “expert
testimony and other evidence establishes a factual basis for making a rea-
sonable estimate that will fairly apportion liability.” Bell Petroleum, 3
F.3d at 903. “[A]pproaches to divisibility will vary tremendously depend-
ing on the facts and circumstances of each case,” Hercules, 247 F.3d at
717, and approaches that were inappropriate or inadequately supported in
this case may be available in other circumstances.
2898 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
and remediation scheme of CERCLA. First, as we
describe infra, there are important distinctions
between causation as conceived in the Restatement
and causation in the context of CERCLA. Unlike the
Restatement’s common law causation, CERCLA
affixes liability based upon its PRP provisions,
which define classes of liable parties based upon a
party’s statutorily-defined nexus to the contaminated
site. And second, the concept of “harm” in the
Restatement as actual injury does not correspond
easily to CERCLA’s priorities. Contamination and
the cost of remediation are both relevant for the
“harm” analysis under CERCLA. Finally, we recog-
nize that the Restatement’s emphasis on objective
considerations to determine whether apportionment
is justified in a given case comports with CERCLA’s
strict liability scheme. Equitable considerations may
play a role in a later contribution action amongst lia-
ble parties, but not in an action such as this where
the only relevant issue is whether there is a reason-
able basis, founded in record evidence, to apportion
damages amongst defendants.
8. In the first full paragraph on page 796, replace
<§ 433A(1)(b) and thereby incorporated a modified concept
of causation.> with <§ 433A(1)(b).>.
9. Add before
in the paragraph beginning on page 796 and continuing to
page 797.
10. In the second full paragraph on page 797, replace with:
The statute thus departs from Restatement princi-
ples by abjuring the traditional “causation” princi-
ples in favor of a nexus concept defined by its PRP
provisions. Where, as here, the pertinent PRP status
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2899
is as landowner, the landowner can establish divisi-
bility by demonstrating a reasonable basis for con-
cluding that a certain proportion of the
contamination did not originate on the portion of the
facility that the landowner owned at the time of the
disposal.
11. Add the following text after the last full paragraph on
page 798:
In so holding, we begin from the fundamental dif-
ference between apportionment and contribution.
Apportionment, which is the relevant question in this
case, looks to whether defendants may avoid joint
and several liability by establishing a fixed amount
of damage for which they are liable. Section 433A
of the Restatement speaks to this issue. Contribution
is a distinct concept. If there is insufficient evidence
to support apportionment, jointly and severally liable
PRPs may still seek to recover from each other in a
later contribution action. See, e.g. RESTATEMENT
(THIRD) OF TORTS § 23(a) (2000) (“When two or
more persons are or may be liable for the same harm
and one of them discharges the liability of another
by settlement or discharge of judgment, the person
discharging the liability is entitled to recover contri-
bution from the other, unless the other previously
had a valid settlement and release from the plain-
tiff.”). As we explain below, CERCLA permits equi-
table considerations to be taken into account in a
contribution action amongst PRPs, but CERCLA’s
strict liability scheme does not permit equitable con-
siderations to have any bearing in an action to deter-
mine whether defendants have presented sufficient
evidence to apportion liability.
12. Beginning on page 798 and continuing to page 799,
replace with:
2900 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
Section 9613(f), added to CERCLA in 1986, pro-
vides for contribution actions among PRPs once lia-
bility to the plaintiffs has been determined. That
provision describes, quite generally, the consider-
ations applicable in a contribution action for deter-
mining whether one PRP can collect from another a
portion of the costs for which it has been held liable:
“In resolving contribution claims, the court may allo-
cate response costs among liable parties using such
equitable factors as the court determines are appro-
priate.” § 9613(f) (emphasis added).26 In contrast,
CERCLA contains no provision explicitly providing
for initial apportionment of liability. And
§ 433A(1)(b) of the Restatement and the appended
commentary concerning divisibility are silent as to
equitable considerations.27
As noted, this circuit heretofore has not addressed
divisibility analysis. But the implication from our
cases deciding § 9613(f) contribution issues is that
the proper time to focus on such factors is at the con-
tribution phase, not the liability phase. See, e.g.,
Carson Harbor Vill., 270 F.3d at 871 (noting that the
26
Among the equitable factors used in CERCLA contribution cases are
the so-called “Gore factors.” See Hercules, 247 F.3d at 718. Those factors
are derived from the amendment that then-Representative Gore introduced
in 1980 to alleviate the harshness of mandatory apportionment, which at
that time was a part of the bill. See 126 CONG. REC. 26782 (1980) (state-
ment of Rep. Gore). Although these factors are appropriate in contribution
cases, they are not, for the reasons discussed in the text, appropriate con-
siderations at the liability stage.
27
The only mention of equity in Restatement § 433A is in comment h,
regarding “[e]xceptional cases.” Comment h suggests that in cases of
insolvent defendants, when an “innocent plaintiff would be forced to bear
the share of the loss due to the defendant from whom he could not collect
damages,” courts may refuse to allocate harm to avoid “injustice to the
plaintiff.” Because we determine that there is no reasonable basis for
apportioning the defendants’ harm, we do not reach the question of
whether the considerations of comment h are applicable here.
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2901
“contribution provision aims to avoid a variety of
scenarios by which a comparatively innocent PRP
might be on the hook for the entirety of a large
cleanup bill”); Pinal Creek, 118 F.3d at 1301 (“A
PRP’s contribution liability will correspond to that
party’s equitable share of the total liability and will
not be joint and several.”).
Other circuits have been careful to delineate the
difference between the equitable considerations per-
tinent to contribution under § 9613(f) and the objec-
tive considerations pertinent to divisibility under
§ 9607(a). See Hercules, 247 F.3d at 718; Township
of Brighton, 153 F.3d at 318; Bell Petroleum, 3 F.3d
at 901. As the Sixth Circuit has noted, divisibility
analysis, unless carefully limited, has the potential to
eviscerate the strict liability principles of CERCLA
entirely, “because defendants who can show that the
harm is divisible, and that they are not responsible
for any of the harm” could whittle their liability to
zero.
13. In the paragraph beginning on page 799 and continuing
to page 800, replace with .
14. In the second full paragraph on page 801, strike <, and
the original . . . from the Railroads>.
15. In the second full paragraph on page 801, replace with .
16. In the paragraph beginning on page 801 and continuing
to page 802, replace with
.
2902 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
17. Renumber footnote 27 on page 802 as footnote 29 and
replace with
.
18. Add a new footnote 30 on page 803 following reading:
In its discussion of the Railroads’ apportioned liabil-
ity, the district court found that B&B used the Rail-
road parcel as part of its total agricultural-chemical
operations, and it earlier cited approvingly to docu-
ments describing the land as “an integral part of the
adjacent farm chemical distribution facility.” The
dissent from denial of rehearing en banc therefore
wrongly characterizes our description of the site as
“appellate fact-finding.” See Dissent at 16-18.
19. In the first full paragraph on page 804, replace with .
20. Renumber footnote 32 on page 811 as footnote 35, strike
following , and add
after
21. Renumber all footnotes in sequential order.
* * * * *
No further petitions for rehearing or rehearing en banc will
be entertained. The mandate shall issue in due course.
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2903
BEA, Circuit Judge, with whom KOZINSKI, Chief Judge,
O’SCANNLAIN, KLEINFELD, GOULD, TALLMAN,
CALLAHAN, and N.R. SMITH, Circuit Judges, join, dissent-
ing from the order denying the petition for rehearing en banc:
The panel applies CERCLA1 in a novel and unprecedented
way to impose impossible-to-satisfy burdens on CERCLA
defendants. The panel’s interpretation of CERCLA “arranger”
liability2 creates intra- and inter-circuit conflicts in an area of
the law where uniformity among circuits is of paramount
importance. See Panel Op. at 2939 (noting CERCLA’s “pol-
icy favoring national uniformity so as to discourage illegal
dumping in states with lax liability laws” (citation omitted)).
Further, the panel’s unreasonable application of CERCLA
apportionment law imposes joint and several liability on
CERCLA defendants where Congress did not so intend.
Our national policy on toxic spills or disposals is quite
clear; it does not allow for dithering. Anyone who owned or
used the land when or after the pollution entered it is poten-
tially liable for its clean-up.3 It does not matter how the toxic
materials entered the land; that others may also be potentially
liable or that reasonable stewardship was exercised are simply
not defenses.
But “potentially liable” does not mean “totally liable.” Just
as CERCLA allows the landowner or the land user to prove
the pollution entered the land before he had anything to do
1
Comprehensive Environmental Response, Compensation, and Liability
Act of 1980 (“CERCLA”), 42 U.S.C. §§ 9601-9675.
2
Under CERCLA, an entity that “arrange[s] for disposal or treatment
. . . of hazardous substances” is strictly liable for the clean-up costs. 42
U.S.C. § 9607(a)(3).
3
In addition, CERCLA imposes liability on persons who “arranged for
disposal or treatment . . . of hazardous substances,” and persons who
accepted “hazardous substances for transport to disposal or treatment
facilities.” 42 U.S.C. § 9607(a)(3), (4).
2904 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
with the land, he can also prove others caused the pollution,
in whole or in part,4 and that he is liable only for his appor-
tioned share of the pollution.
The panel’s recent amendments to its opinion do take a step
in the right direction by aligning the Ninth Circuit with our
sister circuits on CERCLA apportionment law.5 As the
amended panel opinion notes, courts follow Restatement
(Second) of Torts (“Restatement”) principles in apportioning
the harm between defendants held strictly liable under CER-
CLA. See Panel Op. at 2945. Under the Restatement, and now
the amended panel opinion, apportionment is permissible so
long as the evidence allows the court to make “a reasonable
estimate that will fairly apportion liability.” Id. at 2939-40
n.18 (citation omitted).
But although the panel’s amended opinion pays lip-service
to the Restatement test, the panel then proceeds effectively to
disregard it. Purporting to require only a “reasonable esti-
mate” for apportionment, the panel imposes joint and several
liability for the entire clean-up cost of a contaminated facility
on an absentee landlord who leased a parcel: (1) that consti-
tuted 19.1% of the facility that caused the contamination; (2)
for only 13 of the 29 years during which the contamination
occurred (45% of the time); and (3) the contamination on
which could have caused no more than 10% of the overall
contamination. See United States v. Atchison, Topeka & Santa
Fe Ry. Co., Nos. CV-F-92-5068 OWW, CV-F-96-6226
OWW, CV-F-96-6228 OWW, 2003 WL 25518047, at *88
4
See 42 U.S.C. § 9607(b)(3).
5
Henceforth, CERCLA apportionment in the Ninth Circuit will be
governed—not by a test that allows a landowner to avoid joint and several
liability only with “perfect information” that portions of the contamination
are “in no respect traceable” to its land—but by a “reasonable basis” test
under the Restatement (Second) of Torts § 433A(1)(b). See Panel Op. at
2943 (holding a landowner can “establish divisibility by demonstrating a
reasonable basis for concluding that a certain proportion of the contami-
nation did not originate” on its facility (emphasis added)).
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2905
(E.D. Cal. July 15, 2003). If this evidence does not provide a
“reasonable estimate” for apportionment of liability, I do not
see how—short of “perfect information” sufficient to trace
every molecule of pollution to the landlord’s parcel6 —
apportionment could ever be possible under CERCLA.
The panel’s amendments thus go only half way by adopting
the correct prism through which to look at the evidence. But
it is not enough to use new spectacles. One must still look at
the evidence. The fact remains, and as the panel expressly
holds, the district court did not commit clear error in finding
a reasonable basis for apportionment of liability. See Panel
Op. at 2952 (“[W]e do not fault the district court’s factfinding
. . . .”). Regardless, the panel rejects the meticulous apportion-
ment determinations of the district court, issued in a 191-page
opinion, as “legally insufficient” for relying on “the simplest
of considerations.” Id. at 2952, 2956.
To denigrate by adjectives is not to reason, much less to
explain. Holding the district court’s calculations are “simple”
does not even begin to determine whether those calculations
were clear error, or whether the calculations provide a “rea-
sonable estimate” to apportion liability. As Justice Oliver
Wendell Holmes, Jr., said, “I would not give a fig for the sim-
plicity this side of complexity, but I would give my life for
the simplicity on the other side of complexity.”7 The panel
turns Justice Holmes’s eloquent statement on its head: Instead
of commending the district court for finding simplicity after
navigating 191 pages of complexity, the panel rebukes the
district court, contending that the district court’s careful find-
ings of fact—though not clear error—are not worth a fig.
6
For the same result, albeit with a different, and now abandoned, verbal
formulation, see the panel’s original opinion: United States v. Burlington
Northern & Santa Fe Ry. Co., 502 F.3d 781, 801 (9th Cir. 2007) (allowing
CERCLA apportionment only with proof by “perfect information” “that
portions of the contamination are in no respect traceable” to the landown-
er’s facility), amended by order denying petition for rehearing en banc.
7
http://en.wikiquote.org/wiki/Oliver_Wendell_Holmes%2C_Jr.
2906 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
While at it, the panel imposes “arranger” liability on Shell
Oil for agricultural fertilizers that were spilled on the site by
the buyer of Shell’s product, shipped by a common carrier in
non-defective truck tankers, F.O.B. delivery point.8 The
panel’s imposition of arranger liability on a mere seller, which
relinquished control over its products upon delivery and
before spillage occurred, goes far beyond the statutory lan-
guage and creates inter- and intra-circuit splits. See AM Int’l,
Inc. v. Int’l Forging Equip. Corp., 982 F.2d 989, 999 (6th Cir.
1993) (“[C]ourts . . . have consistently held that the mere sale
of a product is not ‘arranging for disposal’ under [CER-
CLA].”); United States v. Shell Oil Co. (“McColl”), 294 F.3d
1045, 1055, 1057 (9th Cir. 2002) (requiring “actual control”
over the hazardous products as a “crucial element” of arranger
liability). The panel further holds Shell jointly and severally
liable for the entire contamination on the facility—including
contamination from products Shell did not even sell. See
Panel Op. at 2957-60.
True, the land on which the facility operator spilled the
toxic fluids encompassed only 4.7 acres. But the panel’s legal
errors will spread over this Circuit’s nine states and 1.3 mil-
lion square miles, to lots large and small.
I respectfully dissent from our decision not to rehear this
case en banc.
I.
This case involves environmental contamination caused by
a now-defunct company, Brown & Bryant (“B & B”), which
owned and operated an agricultural chemical distribution
facility (“B & B parcel”) from 1960 to 1989. Panel Op. at
8
“FOB” means “free on board” and “when the term is F.O.B. the place
of destination, the seller must at his own expense and risk transport the
goods to that place and there tender delivery of them.” U.C.C. § 2-
319(1)(b).
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2907
2929. In 1975, fifteen years into its operation, B & B leased
from the Defendant-Railroads (“the Railroads”) a contiguous
parcel of land (“the Railroad parcel”) located west of the
B & B parcel. Id. at 2929. The B & B parcel comprised 3.8
acres; the Railroad parcel comprised 0.9 acres. Id. At its facil-
ity, B & B stored the chemicals D-D, Nemagon, and Dinoseb.
Atchison, 2003 WL 25518047, at *4. Throughout its opera-
tion, B & B discharged contaminated wastewater into a sump
that was used to wash agricultural equipment and into a pond,
both of which were located on the B & B parcel. Id. at *12,
*16. Neither the sump nor the pond were, at first, lined so as
to be impervious. See id. at *8.
The government asserted B & B’s activities on the Railroad
parcel may have contaminated the groundwater through: (1)
focused infiltration of contaminants into the groundwater; and
(2) drainage from the Railroad parcel onto the pond located
on the B & B parcel. Id. at *10-12. As to the first theory, the
government could not identify any areas on the Railroad par-
cel where infiltration into the groundwater actually occurred.
Id. at *11. Indeed, it was “undisputed that the pond, the sump,
and the dinoseb spill area, all of which are located on the
B & B parcel, were and are the primary sources of the
groundwater contamination.” Id. at *12. As to the second the-
ory, the district court found a “substantial dispute” remained
over whether rainfall was “sufficient to generate the quantity
of runoff that would have been necessary” for drainage of
chemicals from the Railroad parcel to the B & B parcel. Id. at
*11.
The district court found “[t]he levels of chemical contami-
nation on and under B & B parcel are substantially higher
than any of the reported detections on and under the Railroad
parcel.” Id. Specifically, the district court found:
[R]eleases at the Railroad parcel could not have con-
tributed more than ten [percent] (10%) of the overall
site contamination given the fact that the predomi-
2908 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
nant activities conducted on the Railroad parcel
through the years were storage and some washing
and rinsing of tanks, other receptacles, and chemical
application vehicles. Mixing, formulating, loading,
and unloading of ag-chemical hazardous substances,
which contributed most of the liability causing
releases, were predominantly carried out by B & B
on the B & B parcel.
Id. at *88.
B & B purchased the agricultural product D-D from Shell
pursuant to a non-exclusive marketing agreement for the
resale of Shell D-D. Id. at *4-5. Shell shipped D-D to the
B & B facility by common carrier trucks “FOB Destination.”
Id. at *5. There was no evidence the transportation caused any
leakage or that the tanks carried by the trucks leaked. Upon
arrival, the contents of the trucks were transferred to B & B’s
storage tanks, during which D-D spills regularly occurred. Id.
at *20. The district court found the “stewardship” of D-D
passed to B & B when the common carrier arrived at the
B & B facility, and before the transfer of D-D was attempted
to B & B’s storage tanks.9 Id. at *23. Nevertheless, the panel
holds Shell exercised control over the transfer process.
Pursuant to their authority under CERCLA, the California
Department of Toxic Substances Control (“DTSC”) and the
U.S. Environmental Protection Agency (“EPA”) cleaned up
the contamination on the B & B facility. Panel Op. at 2931.
9
The amended panel opinion notes the common carrier, and not B & B
employees, transferred the D-D from the trucks to the storage tanks before
the early 1980s. See Panel Op. at 2930 n.5. The panel states it was only
in the early 1980s that B & B employees started conducting the transfer
themselves. Id. This is of no material consequence. If, as the district court
found, the stewardship of the D-D passed to B & B before the transfer
occurred, it is irrelevant whether B & B employees or the common carrier
employees executed the transfer. In either case, B & B, not Shell, retained
“stewardship” over the D-D and the transfer process.
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2909
“None of the contamination requiring immediate remediation
was on the Railroad parcel.” Id. Thereafter, EPA and DTSC
filed this CERCLA action against B & B, the Railroads, and
Shell for reimbursement of their clean-up costs.
The district court held the Railroads and Shell liable under
CERCLA. The district court apportioned 9% of the clean-up
costs to the Railroads based on the following: (1) the Railroad
parcel constituted 19.1% of the entire B & B facility; (2) the
Railroad parcel was leased to B & B for 13 of the 29 years the
B & B facility operated, or 45% of the time; and (3) the frac-
tion of the hazardous products attributable to the Railroad par-
cel was 66%. Id. at 2932. The multiplication of these three
proportions, rounded upwards, resulted in 6% liability. Id. at
2933. To account for any error, the district court assumed a
50% error rate and raised the Railroads’ liability to 9%.10 Id.
at 2933. The district court fixed Shell’s liability at 6%, which
represented the proportion of D-D spills that occurred during
deliveries to the total amount of D-D spills on the facility. Id.
at 2933.
DTSC and EPA appealed. Id. Shell cross-appealed the dis-
trict court’s holding that it was liable under CERCLA as an
“arranger.” Id. The Railroads did not contest their liability on
appeal. The panel affirmed Shell’s liability under CERCLA as
an “arranger” but reversed the district court’s apportionment
of liability, holding the Railroads and Shell jointly and sever-
ally liable for the entire clean-up cost. Id. at 2929.
II.
The panel first holds the contamination on the B & B facil-
ity is theoretically capable of apportionment. Id. at 2950. The
panel reasons that some of the contamination occurred before
the Railroads leased their parcel to B & B. Id. Further, “[o]nly
10
Thus, if anything, the district court was over-generous to the govern-
ment in its apportionment calculations.
2910 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
some of the toxic substances were stored on the Railroads’
parcel, and only some of the water on the facility washed over
the Railroads’ site.” Id.
Second, the panel addresses whether the district court
clearly erred in finding that the Railroads actually established
a basis for apportionment. See id. at 2950 (“[W]e review for
clear error whether the defendant submitted evidence suffi-
cient to establish a reasonable basis for the apportionment of
liability.”). The panel does not hold that the district court’s
findings are clearly erroneous. See id. at 2952 (“[W]e do not
fault the district court’s factfinding . . . .”); id. at 2956
(“[M]any of the district court’s calculations were factually
correct . . . .”). Nevertheless, while baiting it would review for
clear error whether the district court found sufficient evidence
to justify apportionment, the panel switches, by characterizing
the issues as legal, to apply de novo review. The panel
achieves this sleight of hand by holding, without any citation
of authority, that the district court’s reliance on “the simplest
of considerations” (i.e., “percentages of land area, time of
ownership, and types of hazardous products”) is “legally
insufficient” to support apportionment under the Restate-
ment’s reasonable basis test. Id. at 2952, 2956.
Not so fast. Aren’t these so-called “simplest of consider-
ations” precisely the considerations the panel’s amended
opinion itself holds are sufficient for apportionment?: “We
. . . agree . . . [that] divisibility may be established by volu-
metric, chronological, or other types of evidence, including
appropriate geographic considerations.” Id. at 2939-40 n.18
(citations omitted). Percentage of land ownership (a “geo-
graphic” consideration) and period of ownership (a “chrono-
logical” consideration) provide a “reasonable basis” to
apportion liability to the Railroads, which is all the Restate-
ment, our sister circuits, and indeed the panel’s amended
opinion itself require. As the district court observed:
The concept that a passive owner of a contiguous
parcel, not representing more than 19% in area of a
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2911
CERCLA site, operated less than 44% of the time,
where substantially smaller volumes of hazardous
substance releases occurred, should be strictly liable
for the entire site remediation, because no other
responsible party is judgment-worthy, takes strict
liability beyond any rational limit.
Atchison, 2003 WL 25518047, at *87.
This evidence is not good enough for the panel. Instead, the
panel requires “adequate records” detailing “the amount of
leakage attributable to activities on the Railroad parcel, how
that leakage traveled to and contaminated the soil and ground-
water under the [B & B facility], and the cost of cleaning up
that contamination.”11 Panel Op. at 2954. In a feat of self-
deprecating candor, the panel then admits, “records that sepa-
rate out, with any precision, the amount of toxic chemicals
stored on one part of a facility as opposed to another would
have had little utility to B & B, the operator of the facility,
and none to the Railroads, the owners of the parcel.” See id.
at 2955. Even though the panel recognizes “the failure to keep
these records is quite understandable,” the panel nonetheless
saddles the defendants with joint and several liability for lack
of such records.12 See id. at 2955.
11
“. . . cost of cleaning up that contamination.”? How could B & B,
Railroads, or Shell have kept such records when it was the government
agencies that cleaned up the contamination, rather than the facility opera-
tor, the partial lessor, or the materials seller?
12
The panel also notes, “[w]hile it may seem unfair to hold a partial
owner liable for all of the contamination cleanup costs, that perceived
unfairness is the result of CERCLA’s expansive statutory liability
scheme.” Panel Op. at 2948. The panel is incorrect. CERCLA’s “expan-
sive” liability scheme, as the panel itself admits, is silent as to whether
defendants held strictly liable under the statute are also jointly and sever-
ally liable for the entire harm, or only severally liable for the harm attrib-
utable to them. Id. at 2937-38. As the panel correctly notes, Congress
declined to mandate joint and several liability in CERCLA and intended
courts to follow Restatement principles in apportioning the harm between
defendants held strictly liable. Id.
2912 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
A.
First, the panel holds that the district court’s reliance on the
percentage of the B & B facility owned by the Railroads
(19.1%) cannot support apportionment. Id. at 2952-53. The
panel reasons that percentage of ownership does not “provide
a minimally reliable basis for tracing [the activities on the
Railroad parcel to] the proportion of leakage” associated with
the entire parcel because the B & B facility, including the
Railroad parcel, is an inseparable facility with a “dynamic,
unitary operation.” Id. at 2953.
The panel’s conclusions are erroneous for two reasons.
First, the panel got the law wrong: The district court’s reli-
ance on percentage of land ownership as a proper factor in
apportioning damages finds support from the Restatement and
our sister circuits. A comment to Restatement (Second) of
Torts § 433A(1), which has been relied on by other circuits to
apportion CERCLA liability13 and which the panel itself
quotes, Panel Op. at 2941 n.20, describes an analogous sce-
nario:
In this case, the panel was not asked to determine whether the
Defendant-Railroads were liable. Instead, the panel was charged with
deciding whether the Defendant-Railroads, who were strictly liable under
CERCLA, should be held jointly and severally liable for the entire clean-
up cost. By conflating the establishment of liability and apportionment of
liability questions, the panel disregards a basic tort principle: Strict liabil-
ity is not mandatorily joint and several liability. Thus, the “unfairness” of
holding a partial owner liable for the entire clean-up cost results, not from
CERCLA’s strict liability scheme, but the panel’s unreasonable applica-
tion of the Restatement apportionment principles to the facts of this case,
affected perhaps by its confusion between strict (negligence free) liability
and joint and several (apportionment free) liability.
13
See, e.g., In re Bell Petroleum Servs., 3 F.3d 889, 903 (5th Cir. 1993)
(relying on this Restatement comment to reject the argument that absolute
certainty is required for apportionment of CERCLA liability).
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2913
There are other kinds of harm which, while not so
clearly marked out as severable into distinct parts,
are still capable of division upon a reasonable and
rational basis, and of fair apportionment among the
causes responsible. Thus where the cattle of two or
more owners trespass upon the plaintiff’s land and
destroy his crop, the aggregate harm is a lost crop,
but it may nevertheless be apportioned among the
owners of the cattle, on the basis of the number
owned by each, and the reasonable assumption that
the respective harm done is proportionate to that
number.
Restatement (Second) of Torts § 433A(1) cmt. d.
Even though it is not possible to determine the precise harm
caused by each animal (e.g., one owner’s cattle might have
idly stood by while the rest destroyed the crops; one owner’s
cattle might have more heavy-footed bulls, and less light-
footed heifers), the Restatement would permit apportionment
because there is a reasonable basis (i.e., the number of cattle
owned) to apportion liability.14 See Bell Petroleum Servs., 3
F.3d at 903. Importantly, the Restatement, unlike the panel,
does not require “adequate records” of the harm caused by
each animal; the farmer is not required to stand by his crop
at all times and meticulously record each step taken by each
14
The Restatement specifically contemplates the use of the cattle hypo-
thetical in the context of pollution damages:
Such apportionment is commonly made in cases of private nui-
sance, where the pollution of a stream, or flooding, or smoke or
dust or noise, from different sources, has interfered with the
plaintiff’s use or enjoyment of his land. Thus where two or more
factories independently pollute a stream, the interference with the
plaintiff’s use of the water may be treated as divisible in terms
of degree, and may be apportioned among the owners of the fac-
tories, on the basis of evidence of the respective quantities of pol-
lution discharged into the stream.
Restatement (Second) of Torts § 433A(1) cmt. d.
2914 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
animal, to trace the harm done back to the individual cattle own-
ers.15 Indeed, this is precisely what the “reasonable basis”
standard is designed to avoid: The whole point of Restatement
§ 433A is that no specific evidence is required for apportion-
ment so long as the evidence and method used are “reason-
able.”16 Further, the Restatement embraces “simple”
considerations rejected by the panel—the number of cattle
owned is a “simple,” yet sufficient, basis for apportionment.
Even though it is impossible to determine the exact propor-
tion of the contamination attributable to the Railroad parcel,
the percentage of land ownership, like the number of cattle,
provides one reasonable factor upon which to apportion liabil-
ity under the Restatement. See United States v. Twp. of Brigh-
ton, 282 F.3d 915, 919-20 (6th Cir. 2002) (holding that
geographic divisibility may provide a basis for apportionment
of CERCLA liability); United States v. Hercules, Inc., 247
F.3d 706, 717-18 (8th Cir. 2001) (same).
Second, the panel got its facts wrong, or more precisely,
invented convenient facts. The district court’s findings of fact,
which the panel does not find to be clearly erroneous, contra-
dict the panel’s appellate factfinding that the B & B facility
was a “dynamic, unitary operation.” See Panel Op. at 2954;
15
Under the Restatement, the burden is on the plaintiff (i.e, the farmer)
to prove each defendant was a “substantial factor” in causing a single
harm. See O’Neil v. Picillo, 883 F.2d 176, 179 n.4 (1st Cir. 1989). Under
CERCLA, our sister circuits have placed the burden of showing a reason-
able basis for apportionment on the defendant. Id. Nevertheless, that the
burden rests with the CERCLA defendant to establish a reasonable basis
for apportionment, has no bearing on what the apportionment test is and
what proof is required to meet that test.
16
“Records” are not a required type of proof for apportionment under
the Restatement, unlike other areas of substantive law where specific evi-
dence is required—e.g., for conveyance of an interest in land, a memoran-
dum in writing signed by the party to be charged is required, see, e.g., Cal.
Civ. Code § 1624, and treason requires the testimony of two witnesses to
the same overt act, U.S. Const. art. III, § 3, cl. 1.
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2915
see also Amadeo v. Zant, 486 U.S. 214, 228 (1988) (rebuking
the appellate court for ignoring the dictates of the clear error
standard and engaging in “impermissible appellate factfind-
ing”). The panel’s labeling the operations on the B & B facil-
ity as “dynamic” and “unitary” is a convenient blanket under
which to hide the failure to look the facts in the face.
The facts found by the district court show quite different
operations took place on the Railroad parcel:
Relatively fewer activities that could result in
releases were conducted on the Railroad parcel.
Daily operations that resulted in releases of hazard-
ous substances occurred on the B & B parcel. Past
releases at the Railroad parcel could not have con-
tributed more than ten [percent] (10%) of the overall
site contamination given the fact that the predomi-
nant activities conducted on the [0.9 acre] Railroad
parcel through the years were storage and some
washing and rinsing of tanks, other receptacles, and
chemical application vehicles. Mixing, formulating,
loading, and unloading of ag-chemical hazardous
substances, which contributed most of the liability
causing releases, were predominantly carried out by
B & B on the [3.8 acre] B & B parcel.
Atchison, 2003 WL 25518047, at *88 (emphasis added). The
district court’s findings not only undermine the panel’s asser-
tion that the B & B site was an inseparable facility with a “dy-
namic, unitary operation,” but also provide a reasonable basis
for separating the Railroad parcel from the rest of the facility
to apportion liability.17 The appendix, an overhead image of
17
The panel contends apportionment is not possible because the district
court found “B & B used the Railroad parcel as part of its total
agricultural-chemical operations.” Panel Op. at 2954 n.30. That is painting
with a broad brush over the details; the details give the true picture. The
panel’s contention merely begs the apportionment question. That B & B
2916 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
the B & B facility, tellingly shows how, as the district court
found, substantially fewer contamination-causing activities
were conducted on the Railroad parcel (labeled “Leased Prop-
erty”), as compared to the B & B parcel (labeled “Brown &
Bryant Property”).
I also note the panel’s original opinion held that the B & B
parcel “is distinct from the portion leased from the Railroads,”
which further supports the district court’s apportionment cal-
culations on the basis of percentage of land ownership. See
Burlington Northern, 502 F.3d at 801. Recognizing, no doubt,
that this finding undermines its position, the panel excises this
finding from its amended opinion, without explanation.
B.
Second, the panel holds that the period the Railroads leased
their parcel (13 years) as compared to the entire period of
contamination (29 years) is a legally insufficient basis for
apportionment. Panel Op. at 2955, 2956. The panel reasons
there is an “evidentiary vacuum” about the contamination
attributable to the pre-lease period, and no evidence suggests
contamination was constant over the entire period. Id. at 2956.
The panel errs in concluding there is an “evidentiary vacu-
um” regarding the pre-lease contamination. The panel itself
notes some contamination occurred before B & B leased the
Railroad parcel. Id. at 2951. Further, B & B implemented pro-
cedures to reduce contamination after it leased the Railroad par-
used the Railroad parcel as part of its operations says nothing about
whether liability may be apportioned between the Railroad parcel and the
B & B parcel. The answer to that question lies in the undisputed findings
of the district court that different operations took place on each parcel and
the contamination on the Railroad parcel could have caused no more than
10% of the overall contamination. See Atchison, 2003 WL 25518047, at
*88.
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2917
cel.18 Thus, the district court’s assumption of constant
contamination over the entire period not only provides a rea-
sonable basis to apportion liability, but, if anything, overesti-
mates the contamination attributable to the Railroad parcel.
Further, the district court’s reliance on period of ownership
finds support from the Restatement hypothetical discussed
above. Just as it is reasonable to assume that each of the cattle
caused an equal amount of harm even though some of the cat-
tle may have done no harm to the land, it is also reasonable
to assume that each year of ownership caused an equal
amount of contamination, even though the contamination may
have been worse in some years than in others. See also Bell
Petroleum Servs., 3 F.3d at 903-04 (holding apportionment is
possible among the sequential owners of a chrome-plating
site, even though the records of the chrome-plating activities
were incomplete); Hercules, 247 F.3d at 718 (noting appor-
tionment is possible where “two defendants, independently
operating the same plant, pollute a stream over successive
periods of time” (citation omitted)). Thus, the panel also errs
in rejecting apportionment based on period of ownership.19
In sum, despite two bases for apportionment of liability
approved by the Restatement and our sister circuits—
18
In the first twenty years of its operations (from 1960 to 1980), B & B
“took almost no precaution to prevent the release of hazardous agricultural
chemicals into the environment.” Atchison, 2003 WL 25518047, at *26.
At trial, a B & B executive testified that in 1980, B & B lined the sumps
with concrete boxes, and in 1984, B & B built a contained area for rinsing
equipment to prevent chemicals from draining to the sumps.
19
The only clear error the panel finds is the district court’s exclusion of
D-D from the contamination attributable to the Railroad parcel. Panel Op.
at 2956. The panel so holds because there was evidence that D-D leaked
on the Railroad parcel and no evidence that it did not. Id.; see Atchison,
2003 WL 25518047, at *90. I do not disagree with this holding, but note
that this error merely alters the proportion of liability attributable to the
Railroads and perhaps may be a basis for remand. It has no impact on the
ultimate conclusion that the Railroads cannot be jointly and severally lia-
ble for the entire clean-up cost.
2918 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
percentage of land ownership and period of ownership—the
panel erroneously imposes joint and several liability on the
Railroads for the entire clean-up cost of the B & B facility.
III.
Unlike the Railroads, Shell contested its liability on appeal.
The panel holds Shell liable as an “arranger,” which is
defined as any person who “arranged for disposal or treat-
ment . . . of hazardous substances owned or possessed by such
person.” 42 U.S.C. § 9607(a)(3) (emphases added). CERCLA
does not define “arranged for.” We have interpreted “arranged
for” to rest on two alternate bases for liability: “direct” and
“broader” arranger liability. McColl, 294 F.3d at 1054-55.
The latter is at issue here because no one claims Shell directed
the dumping of hazardous substances onto the B & B facility.
Under “broader” arranger liability, an entity need not have
direct involvement in an arrangement for the disposal of
waste; liability may be imposed if the entity had “sufficient
control over the process that created the waste.” Id. at 1055.
We have no clear test for establishing broader arranger liabil-
ity. Id. at 1055-56. Nevertheless, “actual control” over the
hazardous substance is a “ ‘crucial element’ ” of broader
arranger liability, and mere “authority to control,” were it
actually established by the evidence, simply does not suffice.
See id. at 1055, 1057.
The panel imposes arranger liability on Shell as a seller of
the agricultural product D-D to B & B, which then contami-
nated its facility in part with Shell’s product. The panel notes
that because unintentional practices like “leaking” are
included within the definition of “disposal” under CERCLA,
“disposal” need not be purposeful. Panel Op. at 2963. Thus,
according to the panel, “an entity [like Shell] can be an
arranger even if it did not intend to dispose of the product.”
Id. at 2963.
 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2919
The panel’s statutory interpretation is unpersuasive. Even
though the definition of “disposal” may include unintentional
practices, mere “disposal” does not constitute arranger liabil-
ity. Instead, arranger liability requires the defendant to have
“arranged for” such disposal (not just arranged for the sale).
This connotes an intentional action toward achieving the pur-
pose: disposal. See Webster’s Third New International Dictio-
nary 120 (1993) (defining “arrange” as “to make preparations
for”). It is an oxymoron for an entity unintentionally to make
preparations for disposal.
Further, the statutory definition of “disposal” does not
cover the “sale” of a hazardous substance, which was the
exclusive purpose of the contract between Shell and B & B.
That leakage may occur during the transfer of D-D from the
common carrier to B & B’s storage tanks cannot mean that
Shell, as a seller, arranged for such leakage.20 By imposing
arranger liability on a mere seller, the panel stretches the
meaning of arranger liability beyond any cognizable limit and
creates inter-circuit splits. See, e.g., AM Int’l, 982 F.2d at 999
(“[C]ourts . . . have consistently held that the mere sale of a
product is not ‘arranging for disposal’ under [CERCLA].”);
Fla. Power & Light Co. v. Allis Chalmers Corp., 893 F.2d
1313, 1317 (11th Cir. 1990) (“If a party merely sells a prod-
uct, without additional evidence that the transaction includes
an ‘arrangement’ for the ultimate disposal of a hazardous sub-
stance, CERCLA liability [can]not be imposed.”).
Even assuming a defendant can be held liable as an
arranger for the mere sale of a product, the panel’s holding is
inconsistent with McColl, which requires actual control over
the hazardous product as a crucial element of arranger liabil-
ity. See McColl, 294 F.3d at 1055. In McColl, the United
20
The panel’s conclusion is tantamount to saying that a bartender “ar-
ranges for the disposal” of bourbon onto the bar when he sells a glass of
bourbon F.O.B. patron, who, while carelessly lifting the glass, spills the
bourbon.
2920 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
States was sued under CERCLA for the clean-up costs of a
site contaminated with fuel. The site was used to manufacture
war supplies for the United States under government con-
tracts, and the United States was aware that waste was being
produced. Id. at 1050-51. We held the United States could not
be liable as an arranger because it did not exercise actual con-
trol over the disposal of fuel, even though it had the authority
to control such disposal. Id. at 1057-58. The panel creates an
intra-circuit conflict by reducing McColl’s actual control
requirement from a “crucial element” for arranger liability to
a mere “pertinent consideration,” which is “informative only
in light of additional considerations.” Panel Op. at 2966-67.21
The panel holds Shell liable as an arranger because:
(1) [D-D] [s]pills occurred every time the deliveries
were made; (2) Shell arranged for delivery and chose
the common carrier that transported its product to the
Arvin site; (3) Shell changed its delivery process so
as to require the use of large storage tanks, thus
necessitating the transfer of large quantities of chem-
icals and causing leakage from corrosion of the large
steel tanks; (4) Shell provided a rebate for improve-
ments in B & B’s bulk handling and safety facilities
and required an inspection by a qualified engineer;
(5) Shell regularly would reduce the purchase price
of the D-D, in an amount the district court concluded
was linked to loss from leakage; and (6) Shell dis-
tributed a manual and created a checklist of the man-
21
The panel’s attempt to sidestep McColl is inapposite. The panel notes
that McColl viewed control as a “crucial element” of arranger liability
only because the United States in that case, unlike Shell here, never owned
the hazardous substances before disposal. Panel Op. at 2967. Even though
the panel may have wished it were otherwise, McColl’s holding is not so
limited: “We agree with the Oil Companies and the district court that con-
trol is a crucial element of the determination of whether a party is an
arranger under § 9607(a)(3).” McColl, 294 F.3d at 1055 (emphasis
added).
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2921
ual requirements, to ensure that D-D tanks were
being operated in accordance with Shell’s safety
instructions.
Id. at 2966 (emphasis in original).
This is insufficient to establish Shell’s “actual control” of
the D-D transfer from the tank-trucks to B & B’s storage
tanks. This evidence at best establishes Shell’s influence over
the transfer process (e.g., through rebates, the provision of
manuals and checklists, etc.), which falls far short of the
actual control required by McColl. Shell did not own or oper-
ate the B & B facility, nor did any Shell employees play a role
in the D-D transfer. The evidence in fact establishes that Shell
relinquished control over the D-D once the common carrier
arrived at the B & B site and before the transfer of D-D.
The district court found, and the panel does not dispute,
“stewardship” of D-D passed to B & B when the common
carrier arrived at the B & B facility. Atchison, 2003 WL
25518047, at *23. The Conditions of Sale stated B & B would
“furnish and maintain facilities for receiving and storing all
Products delivered, which are safe, adequate and in compli-
ance with all applicable governmental requirements and shall
unload each delivery promptly and at Buyer’s own risk and
expense.” See id. at *68 (emphasis added). Thus, Shell did not
have “actual control” over the transfer of D-D and cannot be
held liable as an arranger.22
22
The panel also imposes joint and several liability on Shell, rejecting
as legally insufficient the district court’s apportionment calculations based
on the amount of D-D spilled during the transfer process. Panel Op. at
2957-60. Even assuming Shell can be held liable as a CERCLA arranger,
the panel errs in holding Shell jointly and severally liable for the entire
contamination, including contamination from products Shell did not sell
to B & B.
The panel notes it does not hold Shell liable for the clean-up of the
“Dinoseb hot spot,” a discrete area on the east side of the B & B parcel
2922 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
IV.
En banc rehearing was necessary because the panel’s broad
definition of arranger liability and its erroneous application of
CERCLA apportionment principles impose CERCLA liability
where Congress did not intend. The panel decision creates
disorder in CERCLA jurisprudence by causing intra- and
inter-circuit conflicts in an area where uniformity over the
interpretation of the federal statutory law, based on common-
law principles, is of the utmost importance.
Under the panel’s CERCLA apportionment analysis, a
landowner who leases a lot to an outfit that contaminates the
land while going broke will be stuck with the entire clean-up
bill—notwithstanding the leased lot’s size compared to the
overall facility at which pollution disposal occurred, the
length of the lease compared to the period of the contamina-
tion, or the contamination actually attributable to the leased
lot. That is, the lessor will pay all clean-up costs unless he
comes up with records that show how much was spilled,
where, and when—although the panel candidly acknowledges
that no one could be expected to keep such records. The lessor
will also pay unless he can come up with records of the clean-
up and the cost thereof, even if he did not do the clean-up.
that was contaminated by a major Dinoseb (a Dow product) spill in 1983.
See id. at 82 & n.35. According to the panel, this means Shell is not liable
for contamination from products it did not sell. Id. The panel is quite
incorrect. First, the panel still holds Shell liable for Dinoseb spills outside
the discrete “Dinoseb hot spot” and elsewhere on the B & B facility, even
though Shell did not manufacture or sell Dinoseb. See Atchison, 2003 WL
25518047, at *91 (“Th[e] [EPA’s] removal action [on the “Dinoseb hot
spot”] was intended to remediate only the [D]inoseb that contaminated the
[“Dinoseb hot spot”], not the entire site.”); Panel Op. at 2957-60. Second,
Shell’s arranger liability is premised solely on the D-D spills, not spills of
Nemagon or Dinoseb. See Panel Op. at 2957-67. Regardless, the panel
holds Shell jointly and severally liable for the contamination resulting
from all three products—Nemagon, Dinoseb, and D&D—spilled on the
B & B facility. See id. at 2957-60.
 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2923
Further, under the panel’s novel definition of “arranger” lia-
bility, sellers of chemical products will be saddled with the
entire clean-up cost of a facility contaminated in part with
their products, even if they lacked control over the products
spilled following the sale.
Accordingly, I respectfully dissent from the denial of
rehearing en banc.
2924 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
APPENDIX
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2925
Volume 2 of 2
2928 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
OPINION
BERZON, Circuit Judge:
A now-defunct company, Brown & Bryant, Inc. (B&B),
owned and operated a facility at which toxic chemicals were
stored and distributed. Part of the land on which the chemical
operation was located was owned by two railroad companies
(the Railroads), and some of the chemicals used by B&B were
supplied and delivered to the facility by Shell Oil Company
(Shell). Because toxic chemicals remaining at the facility
threatened groundwater and may continue to do so in the
future, the United States Environmental Protection Agency
(EPA) and the State of California’s Department of Toxic Sub-
stances Control (DTSC) spent a considerable amount of
money to clean up the site and may need to spend more in the
future. The two agencies sought to recover these response
costs under the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. §§ 9601 9675,1
(CERCLA), but the district court held the Railroads and Shell
liable for only a minor portion of the total cleanup costs. B&B
was defunct by that time, and so could not contribute to the
cleanup costs. The agencies were thus left holding the bag for
a great deal of money.
1
Unless otherwise noted, all statutory citations are to Title 42 and the
2000 edition of the U.S. Code.
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2929
Seeking to hold the Railroads and Shell jointly and sever-
ally liable for the entire judgment, the agencies appeal. Shell
cross-appeals, claiming that it was not an “arranger” under
CERCLA, § 9607(a)(3), and therefore is not a party on whom
any cleanup liability can be imposed. We reverse the portion
of the judgment that declined to impose full joint and several
liability on the Railroads and Shell and affirm the portion of
the judgment that imposed liability on Shell as an arranger.2
I. Background
Beginning in 1960, B&B operated an agricultural chemical
storage and distribution facility in Arvin, California on a 3.8-
acre parcel of land (the B&B parcel). In 1975, B&B’s agricul-
tural chemical distribution business outgrew that parcel, and
B&B began leasing a 0.9-acre parcel of land adjacent to its
own parcel. The 0.9-acre parcel (the Railroad parcel) was
jointly owned by the Railroads — Atchison, Topeka & Santa
Fe Railroad Co., the predecessor in interest to Burlington
Northern & Santa Fe Railway Co., and Southern Pacific
Transportation Co., the predecessor in interest to Union
Pacific Transportation Co. B&B used the Railroad parcel
principally to park fertilizer rigs.
The Railroad parcel comprised the western portion of the
Arvin site.3 Directly to the east of the Railroad parcel sat
B&B’s warehouse. The Railroad parcel, like the rest of the
Arvin site, was graded toward a drainage pond on the B&B
parcel.
2
The Railroads have requested judicial notice of the EPA proceedings
concerning their suit for reimbursement from the government and of the
stay of those proceedings pending the determination of joint and several
liability in this case. These proceedings do not “ ‘have a direct relation to
matters at issue.’ ” United States ex rel. Robinson Rancheria Citizens
Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992) (citation omit-
ted). We therefore deny the Railroads’ request for judicial notice.
3
We refer to the B&B and Railroad parcels together as the “Arvin site.”
2930 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
B&B used the Railroad parcel as an integral part of its
overall agricultural chemical facility. From its facility B&B
sold local growers agricultural chemical products produced by
various manufacturers. In particular, B&B purchased,
received delivery of, stored on the Arvin site, and distributed
two Shell-produced agricultural chemicals: the soil fumigants
D-D and Nemagon. D-D and Nemagon — members of a class
of chemicals called nematocides — are designed to kill nema-
todes, microscopic worms that attack the roots of crops.
Nematocides work by penetrating the soil and then dispersing.
B&B also stored on the Arvin site dinitro (dinoseb) weed
killer, purchased from Dow Chemical Company.
During the 1960s and 1970s, Shell strongly encouraged its
customers, including B&B, to purchase D-D in bulk, a policy
requiring customers to maintain large storage tanks. Shell
delivered the bulk D-D to B&B “FOB Destination” via com-
mon carrier trucks.4 When the trucks carrying D-D arrived at
the Arvin facility, the contents of the trucks were transferred
to B&B’s large tanks by hoses.5 The process was quite messy,
with frequent spills.
To apply D-D to growers’ fields, B&B used rigs loaded
with the chemical. The rigs were stored on the Railroad par-
cel, as were bulk containers of dinoseb and, occasionally,
empty fertilizer cans. Chemicals also reached the Railroad
parcel through water flow from the B&B parcel.
4
“FOB Destination” means “free on board” and “when the term is
F.O.B. the place of destination, the seller must at his own expense and risk
transport the goods to that place and there tender delivery of them.”
U.C.C. § 2-319(1)(b) (2003).
5
Shell was deeply involved in the delivery process: The district court
found that Shell determined and arranged for the means and methods of
delivery of D-D to the Arvin plant and detailed loading and unloading pro-
cedures. It also found that the trucking companies with which Shell con-
tracted for delivery did the transfers for most of the relevant period. It was
only in the early 1980s that Shell dictated that B&B personnel should
instead do the unloading.
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2931
In 1978, after a windstorm destroyed the bulk D-D storage
tank used to store Shell D-D, B&B began using converted
stainless steel milk trailers to store the bulk D-D. The chemi-
cal, which is highly corrosive and eats through steel, can
cause leakage in steel tanks only a few years old. B&B kept
these leak-prone tanks all over the Arvin facility, including on
the Railroad parcel.
D-D, when it leaks, evaporates quickly if exposed to air but
is highly soluble in water. When D-D infiltrates the ground,
it moves through the soil by molecular diffusion, dispersing
in all directions. A slight pull from gravity, however, makes
the chemical a bit more likely to flow downward into ground-
water than laterally through the soil. Dinoseb, similarly, tends
to move to the groundwater table if there is water movement
in that direction. No toxic chemicals can reach the groundwa-
ter level currently used as a source of drinking water because
of an impermeable layer of soil. The next highest level, how-
ever, is a potential source of drinking water, and contamina-
tion can reach that level.
After more than twenty years of leakage and dissemination
of hazardous materials, the DTSC in 1983 found B&B in vio-
lation of several hazardous waste laws. The EPA investigated
separately and found evidence of substantial soil and ground-
water contamination at B&B’s Arvin facility. The EPA and
DTSC (the Governments) began to remedy the contamination
pursuant to their cleanup authority under CERCLA, incurring
substantial remediation costs. In 1991, the EPA ordered the
Railroads to take specific preventative steps on the Railroad
parcel, including installing groundwater monitoring wells.
None of the contamination requiring immediate remediation
was on the Railroad parcel.
In 1992, the Railroads filed an action against B&B and cer-
tain of its principals for contribution for costs incurred in the
EPA-ordered cleanup. Four years later, the Governments each
filed CERCLA actions against B&B, the Railroads, and Shell
2932 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
for reimbursement of their investigation and cleanup costs.6
The district court consolidated the three cases and, after a
twenty-seven day bench trial, issued an exceedingly detailed
185-page Findings of Fact and Conclusions of Law, thereafter
slightly amended.7
The district court found the Railroads liable as owners of
the Arvin facility and as persons who “at the time of disposal
of any hazardous substance owned or operated any facility at
which such hazardous substances were disposed of.
§ 9607(a)(1), (2). Shell was held liable as a “person who . . .
arranged for disposal . . . of hazardous substances.”
§ 9607(a)(3). Turning to whether the Railroads and Shell were
liable for all or only a portion of the cleanup costs, the district
court found that the harm to the Arvin site was capable of
apportionment and proceeded to apportion it. The Railroads
and Shell had, by acknowledging no liability at all, taken what
the district court termed a “ ‘scorched earth,’ all-or-nothing
approach to liability,” and so provided little assistance on the
apportionment issue. The district court nonetheless proceeded
to “perform the equitable apportionment analysis demanded
by the circumstances of the case.”
For the Railroads, the court multiplied three proportions:
(1) the percentage of the overall site that was owned by the
Railroads, 19.1%;8 (2) the percentage of time that the Rail-
roads leased the parcel in relation to B&B’s total operations,
45%;9 and (3) the fraction of hazardous products attributable
6
The relevant statutory sections covering contribution and reimburse-
ment actions, § 9613(f) and § 9607, are quoted later in this opinion.
7
Quotations from and discussion of the district court’s ruling in this
opinion concern the district court’s Amended Findings of Fact and Con-
clusions of Law unless otherwise noted.
8
0.9 acres ÷ 4.7 acres = 0.191 (19.1%).
9
B&B began operations in 1960. The Railroad parcel was leased start-
ing in 1975. In 1988, B&B ceased its operations at Arvin. Thus, the Rail-
road parcel was part of the Arvin site for 13 of 29 years, or 45% of the
time B&B operated the facility.
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2933
to the Railroad parcel, 66%.10 This calculation resulted in a
determination of 6% liability. Then, to account for any “cal-
culation errors,” the district court assumed 50% error and
raised the Railroads’ proportion of the total liability to 9%.
For Shell, the district court approximated the percentages
of leakage from various activities attributable to Shell and
multiplied them together to set Shell’s proportion of the total
liability at 6%.11 Shell was also assigned, in the contribution
action, 6% of the costs incurred by the Railroads in their
cleanup effort.12
DTSC and the EPA timely appealed the district court’s
judgment. Shell timely cross-appealed the finding that it was
liable as an “arranger” under CERCLA.
II. Standards of Liability Under CERCLA
[1] CERCLA was enacted in 1980 to provide for effective
responses to health and environmental threats posed by haz-
ardous waste sites. See generally Mardan Corp. v. C.G.C.
Music, Ltd., 804 F.2d 1454, 1455 (9th Cir. 1986). Under
CERCLA, state and federal governments can first begin the
cleanup of toxic areas, see § 9604(a)-(d), and then sue poten-
tially responsible parties (PRPs) for reimbursement, see
§ 9607(a). A key purpose of this scheme is “shift[ing] the cost
of cleaning up environmental harm from the taxpayers to the
10
There were three pertinent chemicals: D-D, Nemagon, and dinoseb.
The district court found that although there was some D-D contamination
attributable to the Railroad parcel, that “slight contamination is offset by
the fact that the [Arvin] Site is graded towards the southeast pond [on the
B&B parcel] and the levels of chemical contamination on the B&B parcel
are substantially higher than the reported detections on the Railroad par-
cel.” On that reasoning, the district court removed all D-D from the equa-
tion.
11
B&B, albeit insolvent, was assigned 100% joint and several liability.
12
The Railroads do not challenge the percentage of liability assigned to
Shell.
2934 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
parties who benefitted from the disposal of the wastes that
caused the harm.” EPA v. Sequa Corp. (In the Matter of Bell
Petroleum Servs., Inc.), 3 F.3d 889, 897 (5th Cir. 1993) (cit-
ing United States v. Chem-Dyne Corp., 572 F. Supp. 802,
805-06 (S.D. Ohio 1983)).
[2] In accord with this purpose, CERCLA creates a system
of strict liability. Under its provisions, parties can be liable for
cleaning up toxic chemicals if they fit into one or more of the
four PRP categories set out in § 9607(a):
(1) the owner and operator of . . . a facility,
(2) any person who at the time of disposal of any
hazardous substance owned or operated any facility
at which such hazardous substances were disposed
of,
(3) any person who by contract, agreement, or oth-
erwise arranged for disposal or treatment, or
arranged with a transporter for transport for disposal
or treatment, of hazardous substances owned or pos-
sessed by such person . . . , and
(4) any person who accepts or accepted any haz-
ardous substances for transport to disposal or treat-
ment facilities . . . .
A “facility” is defined in § 9601(9)(B) as “any site or area
where a hazardous substance has been deposited, stored, dis-
posed of, or placed, or otherwise come to be located; but does
not include any consumer product in consumer use or any ves-
sel.”13 The statute’s basic liability provision, in turn, provides
that “subject only to the defenses set forth in subsection (b)
13
The district court found that the entire Arvin site, including the Rail-
road parcel, was a single facility for the purposes of § 9607. The Railroads
do not appeal that finding.
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2935
of this section [PRPs shall be liable for] — (A) all costs of
removal or remedial action incurred by the United States
Government or a State or an Indian tribe not inconsistent with
the national contingency plan . . . .” § 9607(a). Thus, PRPs
can be responsible for the costs of cleaning up hazardous
waste sites without any finding that they were negligent or
that they caused the contamination, unless they can establish
the third-party defense set out in § 9607(b)(3).14
A. Validity of Apportionment
[3] CERCLA does not address the question whether, as
between PRPs who are liable for cleanup costs, liability is
joint and several — meaning that each PRP responsible for all
cleanup costs at a facility is liable for such costs — or sever-
able — meaning that cleanup costs at a single facility can be
apportioned among PRPs on some basis.
14
Section 9607(b) reads:
There shall be no liability under subsection (a) of this section
for a person otherwise liable who can establish by a preponder-
ance of the evidence that the release or threat of release of a haz-
ardous substance and the damages resulting therefrom were
caused solely by—
...
(3) an act or omission of a third party other than an employee
or agent of the defendant, or than one whose act or omission
occurs in connection with a contractual relationship, existing
directly or indirectly, with the defendant (except where the sole
contractual arrangement arises from a published tariff and accep-
tance for carriage by a common carrier by rail), if the defendant
establishes by a preponderance of the evidence that (a) he exer-
cised due care with respect to the hazardous substance concerned,
taking into consideration the characteristics of such hazardous
substance, in light of all relevant facts and circumstances, and (b)
he took precautions against foreseeable acts or omissions of any
such third party and the consequences that could foreseeably
result from such acts or omissions.
(Emphasis added). Section 9607(b) also provides defenses for “an act of
God” and “an act of war.” § 9607(b)(1), (2).
2936 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
In this circuit, liability is joint and several when the harm
is indivisible. Fireman’s Fund Ins. Co. v. City of Lodi, 302
F.3d 928, 945 (9th Cir. 2002); see also Carson Harbor Vill.,
Ltd. v. Unocal Corp., 270 F.3d 863, 871 (9th Cir. 2001) (en
banc). Thus, a defendant “may be held fully liable for the
entire clean-up costs at a site despite the fact that the defen-
dant PRP was in fact responsible for only a fraction of the
contamination.” Fireman’s Fund, 302 F.3d at 945.
We have also referred in general terms to the possibility of
apportioning liability. See id. (noting the use of “federal com-
mon law principles” of apportionment); Carson Harbor Vill.,
270 F.3d at 871 (stating that once liability has been found,
“the defendant may avoid joint and several liability by estab-
lishing that it caused only a divisible portion of the harm”).
Yet, in none of our cases has there been an actual dispute
regarding whether liability should be apportioned among the
liable PRPs.15 This case squarely presents that question. To
determine whether the district court was correct to apportion
liability in this case, we thus must address, initially, the gen-
eral propriety of severability.16 In line with every circuit that
15
The major cases addressing division of PRP liability under CERCLA
in the Ninth Circuit instead have been contribution cases among PRPs,
decided after joint liability was established, see, e.g., Carson Harbor Vill.,
270 F.3d at 871; Pinal Creek Group v. Newmont Mining Corp., 118 F.3d
1298, 1301 (9th Cir. 1997), or have addressed a different issue entirely,
see, e.g., Fireman’s Fund, 302 F.3d at 945 (analyzing the possibility that
CERCLA preempts state laws).
16
DTSC argues that the apportionment question is not properly before
us because it was not properly raised in the pretrial order, but we do not
agree. To preserve a claim, a party must put forward a position in the pre-
trial statement in a manner sufficient to put the opposing party on notice
and allow the trial court to consider its merits. See Cripe v. City of San
Jose, 261 F.3d 877, 886 n.9 (9th Cir. 2001) (refusing to hold that defen-
dants had waived an affirmative defense by mislabeling it, because the
court and plaintiffs were on notice of the real issue); Arizona v. Compo-
nents Inc., 66 F.3d 213, 217 (9th Cir. 1995) (noting that argument must
be raised sufficiently for the court to rule on it). Notice to the district court
is not an issue in this case, as the final decision addresses apportionment.
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2937
has addressed the issue, we hold that apportionment is avail-
able at the liability stage.
In so ruling we rely, as have the other circuits that have
analyzed the issue, on a seminal case decided in 1983 in the
Southern District of Ohio, Chem-Dyne. After reviewing the
evolution of the statute, Chem-Dyne concluded that liability
under § 9607(a) may be joint and several even though the
statute does not expressly so provide. Chem-Dyne, 572 F.
Supp. at 810. Suggesting that Congress intended to leave the
matter to the usual common law rules, adjusted to CERCLA
as necessary, Chem-Dyne held that courts should look to the
Restatement (Second) of Torts, as well as to other sources of
federal common law, for the principles of joint and several
liability applicable under CERCLA. See id. at 809-10. Later,
circuit court cases endorsed this approach. See Chem-Nuclear
Sys., Inc. v. Bush, 292 F.3d 254, 259-60 (D.C. Cir. 2002);
United States v. Hercules, Inc., 247 F.3d 706, 717 (8th Cir.
2001); United States v. Township of Brighton, 153 F.3d 307,
318 (6th Cir. 1998); Bell Petroleum, 3 F.3d at 895-96; United
States v. Alcan Aluminum Corp. (Alcan-PAS), 990 F.2d 711,
721-22 (2d Cir. 1993); United States v. Alcan Aluminum
Corp. (Alcan-Butler), 964 F.2d 252, 268-69 (3d Cir. 1992);
United States v. Monsanto Co., 858 F.2d 160, 171-72 (4th Cir.
1988).
[4] As Chem-Dyne persuasively recounts, the history of
§ 107(a) of CERCLA, 42 U.S.C. § 9607(a), indicates that
While the Governments claim to have been unaware that they needed to
address the apportionment issue, their assertion is not supported by the
record. Both the Railroads and Shell directly addressed the apportionment
issue in their pretrial orders. The Railroads “den[ied] that they are jointly
and severally liable for the response costs claimed by the Government”
but argued that, if liable, they should only be responsible for that fraction
of the total mass of groundwater contamination proven to be traceable to
their parcel. Shell noted that joint and several liability is not mandatory
and cited cases regarding apportionment. As a result, we conclude that the
issue of apportioning liability was not waived and is properly before us.
2938 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
although Congress declined to mandate joint and several lia-
bility, it did not intend by doing so “a rejection of joint and
severable liability.” Chem-Dyne, 572 F. Supp. at 808. Instead,
recognizing the difficulties inherent “ ‘in prescribing in statu-
tory terms liability standards which will be applicable in indi-
vidual cases,’ ” id. at 806 (quoting 126 CONG. REC. S14964
(Nov. 24, 1980) (remarks of Sen. Randolph)), Congress meant
“to have the scope of liability determined under common law
principles, where a court performing a case by case evaluation
of the complex factual scenarios associated . . . will assess the
propriety of applying joint and several liability on an individ-
ual basis,” id. at 808. We agree with this account of Con-
gress’s intent and hold that apportionment can be appropriate
under CERCLA.
B. Standards for Apportionment
Because we hold that apportionment is available at the lia-
bility stage in CERCLA cases, we must determine the appro-
priate standards for determining when apportionment is
available and, when it is, how to ascertain the proper division
of damages among defendants. Again, we draw on the experi-
ence of our sister circuits.
[5] The circuits that have addressed these questions have
looked to common law principles of tort in general, and the
Restatement in particular, for guidance as to when and how
to impose joint and several liability under § 9607(a). We
agree that this approach is proper and adopt it here. We also
follow Chem-Dyne and all of the courts of appeals that have
addressed the question in holding that the resulting standard
must be a uniform federal rule. See, e.g., Aviall Servs., Inc. v.
Cooper Indus., Inc., 312 F.3d 677, 684 (5th Cir. 2002) (hold-
ing that apportionment of CERCLA liability “is . . . a matter
of federal common law”), reversed on other grounds by 543
U.S. 157 (2004); United States v. Burlington N. R. Co., 200
F.3d 679, 697 (10th Cir. 1999) (same); Township of Brighton,
153 F.3d at 329 (same); Monsanto Co., 858 F.2d at 172
 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2939
(same). As Chem-Dyne noted, the legislative history of CER-
CLA supports such an approach, as does its policy favoring
national uniformity so as to discourage “illegal dumping in
states with lax liability laws.” Chem-Dyne, 572 F. Supp. at 809.17
[6] The question, then, is what the uniform federal law
should be. Once again, all the circuits that have addressed this
question have followed Chem-Dyne, holding that the appro-
priate starting point for a common law rule of apportionment
applicable to CERCLA cases is Section 433A of the Restate-
ment of Torts. See Hercules, 247 F.3d at 716 & n.9, 717 (not-
ing that courts support the divisibility doctrine as borrowed
from the Restatement); Bell Petroleum, 3 F.3d at 895 (relying
on the Restatement); Chem-Dyne, 572 F. Supp. at 810 (estab-
lishing this method). We agree that harm may be apportioned
when “there exists a reasonable basis for divisibility” of a sin-
gle harm or when several “distinct harms” are present. Hercu-
les, 247 F.3d at 717.18
17
The parties here have assumed that the apportionment standard must
be one of uniform federal common law. As stated above, every federal cir-
cuit to address the issue, including those decided after O’Melveny &
Myers v. FDIC, 512 U.S. 79 (1994), and Atherton v. FDIC, 519 U.S. 213
(1997), has shared that understanding. Although Atchison, Topeka &
Santa Fe Ry. Co. v. Brown & Bryant, Inc., 159 F.3d 358, 362-64 (9th Cir.
1997), questioned whether O’Melveny & Myers and Atherton upset Ninth
Circuit law with regard to the adoption of uniform federal common law
regarding successor liability under CERCLA, very different considerations
govern with respect to apportionment. In Atchinson, resolution of the
question of successor liability would resolve who was liable under
CERLA, an inquiry with roots in state corporate law. Here, the inquiry
diverges from state law completely. As we explain in this section, the
reach of CERCLA liability is sui generis, so there is no state law directly
applicable. The resulting apportionment analysis therefore requires a simi-
larly unique set of considerations, married to the statute’s functions and
purpose.
18
We of course agree with our sister circuits that, if adequate informa-
tion is available, divisibility may be established by “volumetric, chrono-
logical, or other types of evidence,” Hercules, 247 F.3d at 719 (citing Bell
Petroleum, 3 F.3d at 895-96), including appropriate geographic consider-
2940 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
Because CERCLA’s statutory liability scheme differs from
the common law in important respects, however, our sister
circuits have recognized that its principles must be somewhat
modified to fit the CERCLA context. See, e.g., Bell Petro-
leum, 3 F.3d at 902 (“Restatement principles must be adapted,
where necessary, to implement congressional intent with
respect to liability under the unique statutory scheme of CER-
CLA.”); Hercules, 247 F.3d at 717 (The Restatement is “the
starting point . . . . [but] only to the extent that it is compatible
with the provisions of CERCLA.”).We concur in this general
conclusion and acknowledge, in particular, that there are two
areas where the Restatement approach is a somewhat poor fit
and requires slight modifications to ensure that its approach
comports with the liability and remediation scheme of CER-
CLA. First, as we describe infra, there are important distinc-
tions between causation as conceived in the Restatement and
causation in the context of CERCLA. Unlike the Restate-
ment’s common law causation, CERCLA affixes liability
based upon its PRP provisions, which define classes of liable
parties based upon a party’s statutorily-defined nexus to the
contaminated site. And second, the concept of “harm” in the
Restatement as actual injury does not correspond easily to
CERCLA’s priorities. Contamination and the cost of remedia-
tion are both relevant for the “harm” analysis under CER-
CLA. Finally, we recognize that the Restatement’s emphasis
on objective considerations to determine whether apportion-
ment is justified in a given case comports with CERCLA’s
strict liability scheme. Equitable considerations may play a
ations, see United States v. Township of Brighton (“Brighton II”), 282
F.3d at 919-20 (6th Cir. 2002), Bell Petroleum 3 F.3d at 903-04. We hold
only that, in this case, Shell and the Railroads failed to show that “expert
testimony and other evidence establishes a factual basis for making a rea-
sonable estimate that will fairly apportion liability.” Bell Petroleum, 3
F.3d at 903. “[A]pproaches to divisibility will vary tremendously depend-
ing on the facts and circumstances of each case,” Hercules, 247 F.3d at
717, and approaches that were inappropriate or inadequately supported in
this case may be available in other circumstances.
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2941
role in a later contribution action amongst liable parties, but
not in an action such as this where the only relevant issue is
whether there is a reasonable basis, founded in record evi-
dence, to apportion damages amongst defendants.
1. Causation
[7] Section 433A of the Restatement allows for apportion-
ment of damages where “(a) there are distinct harms,[19] or (b)
there is a reasonable basis for determining the contribution of
each cause to a single harm.”20 RESTATEMENT (SECOND) OF
TORTS § 433A(1) (1965) (emphasis added). CERCLA, how-
ever, does not require causation as a prerequisite to liability
(except with regard to the third-party defense, see § 9607(b),
19
Comment b of section 433A notes:
Distinct harms. There are other results which, by their nature, are
more capable of apportionment. If two defendants independently
shoot the plaintiff at the same time, and one wounds him in the
arm and the other in the leg, the ultimate result may be a badly
damaged plaintiff in the hospital, but it is still possible, as a logi-
cal, reasonable, and practical matter, to regard the two wounds as
separate injuries, and as distinct wrongs. The mere coincidence
in time does not make the two wounds a single harm, or the con-
duct of the two defendants one tort. There may be difficulty in
the apportionment of some elements of damages, such as the pain
and suffering resulting from the two wounds, or the medical
expenses, but this does not mean that one defendant must be lia-
ble for the distinct harm inflicted by the other.
20
Comment d of section 433A notes:
Divisible harm. There are other kinds of harm which, while not
so clearly marked out as severable into distinct parts, are still
capable of division upon a reasonable and rational basis, and of
fair apportionment among the causes responsible. Thus where the
cattle of two or more owners trespass upon the plaintiff’s land
and destroy his crop, the aggregate harm is a lost crop, but it may
nevertheless be apportioned among the owners of the cattle, on
the basis of the number owned by each, and the reasonable
assumption that the respective harm done is proportionate to that
number. Where such apportionment can be made without injus-
tice to any of the parties, the court may require it to be made.
2942 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
not at issue here). Nonetheless, most of the leading cases on
joint and several liability under CERCLA have addressed
divisibility under § 433A(1)(b).21 See, e.g., Bell Petroleum, 3
F.3d at 902-03; Monsanto, 858 F.2d at 172; Chem-Dyne, 572
F. Supp. at 810.
Notably, these cases often dealt with simpler facts than
those we confront. Chem-Dyne, for instance, assumed a case
quite different from this one. There, the court stated that
“[t]ypically . . . there will be numerous hazardous substance
generators or transporters who have disposed of wastes at a
particular site.” 572 F. Supp. at 810. It was in that context —
that is, where the question was apportionment among defen-
dants who all disposed of wastes themselves — that Chem-
Dyne determined that courts could follow the divisibility prin-
ciples of the Restatement and remain true to CERCLA. In a
situation in which the several defendants are all polluters
themselves, divisibility under the Restatement standard is
indeed a relatively straightforward analysis, and one in which
traditional causation concepts are useful. If the court can esti-
mate with some confidence the amount of waste that each
defendant disposed of and has a basis for determining that the
extent of contamination of the site is proportional to the
amount of waste disposed of, then the Restatement approach
to apportionment works nicely.
The situation here is different.22 The three “responsible”
21
The sections of the Restatement that courts have used to establish the
rules of joint and several liability under CERCLA are found in the negli-
gence division of the Restatement. As these courts recognize, CERCLA is
a strict liability statute. See, e.g., Hercules, 247 F.3d at 716; Township of
Brighton, 153 F.3d at 318. Because there is no comparable divisibility rule
in the strict liability portion of the Second Restatement, courts have
adapted the negligence rules to strict liability by declining to rely on the
portion of the Restatement section that places an initial burden as to causa-
tion on the plaintiff. Compare Hercules, 247 F.3d at 717, and Bell Petro-
leum, 3 F.3d at 896, with RESTATEMENT (SECOND) OF TORTS § 433B(1).
22
One commentator has noted that trying to apply the Restatement to
CERCLA in most cases is like “pushing a round peg through a square
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2943
parties are: the now-insolvent majority owner and operator of
the site; the mostly absentee landlord of a portion of the site;
and a seller of chemicals shipped to and stored at the site.
Each party had an entirely different role in the contamination
process, with overlapping effects, and not all “caused” con-
tamination in any meaningful sense.
[8] Most notably, PRP status premised on ownership of a
facility does not require any involvement in the disposal of
hazardous substances. Thus, to speak of a PRP “causing” con-
tamination of its land simply by owning land on which some-
one else disposes of hazardous wastes is to indulge in
metaphor. At the same time, to allow CERCLA defendants,
especially landowner PRPs, to prove through traditional cau-
sation analysis that they were not entirely liable would be to
undermine the premise on which the statute designated them
as PRPs to begin with. CERCLA requires a connection — for
example, that the PRP be a landowner “at the time of dispos-
al,” see § 9607(a)(2) — but no further causation. The statute
thus departs from Restatement principles by abjuring the tra-
ditional “causation” principles in favor of a nexus concept
defined by its PRP provisions. Where, as here, the pertinent
PRP status is as landowner, the landowner can establish divis-
ibility by demonstrating a reasonable basis for concluding that
a certain proportion of the contamination did not originate on
the portion of the facility that the landowner owned at the
time of the disposal. The arranger nexus is more straightfor-
ward, with a focus not on ownership of the facility but rather
on the relevant, arranged disposals in light of other contami-
nation at the facility.
hole. Traditional tort law principles falter in the CERCLA context because
CERCLA is so unlike a typical tort law cause of action.” Lynda J. Oswald,
New Directions in Joint and Several Liability Under CERCLA?, 28 U.C.
DAVIS L. REV. 299, 360 (1995).
2944 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
2. Harm
[9] A second difficulty that results from relying on tort
principles in a scheme not based on tort law concerns the
application of the term “harm,” used in the Restatement, as
applied to CERCLA. See RESTATEMENT (SECOND) OF TORTS
§ 433A. The CERCLA cost recovery section does not focus
on “harm,” but rather on “costs of removal or remedial
action” and “necessary costs of response.”23 § 9607(a). Thus,
when applying the Restatement in the context of CERCLA,
the question becomes: What is the “harm” that we are
attempting to divide?
There are three possible kinds of “harm” in actions for
remediation costs under CERCLA: the initial disposal, the
resulting contamination, and the costs of remediating the con-
tamination. Actual injury to individuals or to property, the
usual “harms” in a tort suit, are not a pertinent consideration;
the statute is concerned with averting future injury by
remediating contamination, not with compensation for past
injuries.
If the harm were the disposal, then divisibility based on
volume of discharge by operators or by parcel would always
make sense, because disposal occurs in specific amounts at
specific places. If the harm were contamination, then some
attempt would have to be made either to justify a direct corre-
lation between disposal and contamination under the specific
circumstances or to separate out the leakage that remained as
contamination from leakage that either evaporated, was ade-
quately diluted, or for other reasons did not remain on the
property in toxic form.24 If the harm is the cost of remediation,
23
The statute also mentions “damages for injury to, destruction of, or
loss of natural resources” and “costs of any health assessment or health
effects study.” § 9607(a)(C), (D). These provisions may be informative
with regard to the nature of the harm in other cases but are not here appli-
cable.
24
In many instances, of course — as in Chem-Dyne — the various pol-
luters will dispose of the same substance in the same location, so there will
be a basis for assuming that each polluter’s pro rata share of the hazardous
waste disposed of and of the resulting contamination is the same. See also
Bell Petroleum, 3 F.3d at 903.
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2945
then divisibility would have to be based on the pro rata cost
of cleaning up each defendant’s contribution to the contami-
nation. That pro rata cost will sometimes differ from the pro-
portion of contamination caused by each defendant, because
the cost of removing contamination can vary with geographi-
cal considerations, degree of toxicity, the means of extraction
used for different toxic substances, or other factors.
[10] In light of a CERCLA liability suit’s central purpose
— recovering the cost of eradicating contamination — we
conclude that it is most useful for purposes of determining
divisibility to view the “harm” under CERCLA as the con-
tamination traceable to each defendant. Disposal itself is not
the focus of the statute, unless it results in contamination. And
the cost of cleaning up the contamination is most analogous
to the damages recovered in a tort suit, not to the injury on
which liability is based.25
3. Equity
[11] Because this case is one in which the harms are not
distinct, apportionment must be under Restatement
§ 433A(1)(b) if it is to be allowed at all. That is, there must
be a reasonable basis for determining the contribution of each
PRP to the harm. While nothing in the statute directly
addresses the question whether equitable factors are appropri-
ate for purposes of apportioning liability among joint tortfea-
sors, all the other circuits that have addressed the issue have
held that they are not. We again follow their lead.
25
The cost of cleanup of different toxic substances or in different areas
of the facility will often be a useful measure of the proportion of the perti-
nent contamination allocable to each defendant. That cost will depend
upon factors such as which contamination was serious enough to merit
remediation and how thoroughly the soil was contaminated in various
areas. Thus, the “harm” allocation analysis may in some instances usefully
focus initially on the proportion of costs associated with remedying vari-
ous aspects of the contamination.
2946 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
In so holding, we begin from the fundamental difference
between apportionment and contribution. Apportionment,
which is the relevant question in this case, looks to whether
defendants may avoid joint and several liability by establish-
ing a fixed amount of damage for which they are liable. Sec-
tion 433A of the Restatement speaks to this issue.
Contribution is a distinct concept. If there is insufficient evi-
dence to support apportionment, jointly and severally liable
PRPs may still seek to recover from each other in a later con-
tribution action. See, e.g. RESTATEMENT (THIRD) OF TORTS
§ 23(a) (2000) (“When two or more persons are or may be lia-
ble for the same harm and one of them discharges the liability
of another by settlement or discharge of judgment, the person
discharging the liability is entitled to recover contribution
from the other, unless the other previously had a valid settle-
ment and release from the plaintiff.”). As we explain below,
CERCLA permits equitable considerations to be taken into
account in a contribution action amongst PRPs, but CER-
CLA’s strict liability scheme does not permit equitable con-
siderations to have any bearing in an action to determine
whether defendants have presented sufficient evidence to
apportion liability.
Section 9613(f), added to CERCLA in 1986, provides for
contribution actions among PRPs once liability to the plain-
tiffs has been determined. That provision describes, quite gen-
erally, the considerations applicable in a contribution action
for determining whether one PRP can collect from another a
portion of the costs for which it has been held liable: “In
resolving contribution claims, the court may allocate response
costs among liable parties using such equitable factors as the
court determines are appropriate.” § 9613(f) (emphasis
added).26 In contrast, CERCLA contains no provision explic-
26
Among the equitable factors used in CERCLA contribution cases are
the so-called “Gore factors.” See Hercules, 247 F.3d at 718. Those factors
are derived from the amendment that then-Representative Gore introduced
in 1980 to alleviate the harshness of mandatory apportionment, which at
that time was a part of the bill. See 126 CONG. REC. 26782 (1980) (state-
ment of Rep. Gore). Although these factors are appropriate in contribution
cases, they are not, for the reasons discussed in the text, appropriate con-
siderations at the liability stage.
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2947
itly providing for initial apportionment of liability. And
§ 433A(1)(b) of the Restatement and the appended commen-
tary concerning divisibility are silent as to equitable consider-
ations.27
As noted, this circuit heretofore has not addressed divisibil-
ity analysis. But the implication from our cases deciding
§ 9613(f) contribution issues is that the proper time to focus
on such factors is at the contribution phase, not the liability
phase. See, e.g., Carson Harbor Vill., 270 F.3d at 871 (noting
that the “contribution provision aims to avoid a variety of sce-
narios by which a comparatively innocent PRP might be on
the hook for the entirety of a large cleanup bill”); Pinal Creek,
118 F.3d at 1301 (“A PRP’s contribution liability will corre-
spond to that party’s equitable share of the total liability and
will not be joint and several.”).
Other circuits have been careful to delineate the difference
between the equitable considerations pertinent to contribution
under § 9613(f) and the objective considerations pertinent to
divisibility under § 9607(a). See Hercules, 247 F.3d at 718;
Township of Brighton, 153 F.3d at 318; Bell Petroleum, 3
F.3d at 901. As the Sixth Circuit has noted, divisibility analy-
sis, unless carefully limited, has the potential to eviscerate the
strict liability principles of CERCLA entirely, “because
defendants who can show that the harm is divisible, and that
they are not responsible for any of the harm” could whittle
their liability to zero. Township of Brighton, 153 F.3d at 318.
Additionally, as Township of Brighton also noted in rejecting
a fairness-based approach, divisibility analysis is not an invi-
27
The only mention of equity in Restatement § 433A is in comment h,
regarding “[e]xceptional cases.” Comment h suggests that in cases of
insolvent defendants, when an “innocent plaintiff would be forced to bear
the share of the loss due to the defendant from whom he could not collect
damages,” courts may refuse to allocate harm to avoid “injustice to the
plaintiff.” Because we determine that there is no reasonable basis for
apportioning the defendants’ harm, we do not reach the question of
whether the considerations of comment h are applicable here.
2948 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
tation to “split the difference” and come up with a “compro-
mise amount.” Id. at 319.
While it may seem unfair to hold a partial owner liable for
all of the contamination cleanup costs, that perceived unfair-
ness is the result of CERCLA’s expansive statutory liability
scheme. Assuring fairness among PRPs is the proper subject
of the contribution stage, not of apportionment at the liability
stage. See United States v. Rohm & Haas Co., 2 F.3d 1265,
1280-81 (3d Cir. 1993), overruled on other grounds by United
States v. E.I. Dupont de Nemours & Co., 432 F.3d 161, 162-
63 (3d Cir. 2005) (en banc). At the liability stage, CERCLA
simply assigns liability to statutorily responsible parties so as
to assure that, as between those with some connection to the
contamination — and who have, it may be assumed, benefit-
ted from the contamination-causing process — and those with
none, such as the taxpayers. Any court-created structure that
would allow PRPs to whittle their share to little or nothing
and leave the taxpayers holding the bag may seem more equi-
table to some PRPs but would violate the basic structure of
the CERCLA statutory scheme. Because of such concerns,
courts have generally refrained from using an equity-based
allocation analysis, so as not to weaken further the strict lia-
bility principle basic to CERCLA.
[12] We agree that while joint and several liability need not
be universally applied, see Bell Petroleum, 3 F.3d at 897, the
inquiry as to whether such liability is appropriate must focus
strictly on whether there is a reasonable basis for apportion-
ment, see, e.g., id. at 901-04. Consequently, in an action under
§ 9607(a), a court is not to look to equitable considerations,
such as relative fault, in determining whether liability is to be
joint and several or apportioned.
III. Analysis of Railroads’ and Shell’s CERCLA
Liability
We now proceed to apply these fairly straightforward prin-
ciples to the circumstances of this case. Here, the Railroads
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2949
were found to be PRPs under § 9607(a)(2), as the owners of
a “facility at which . . . hazardous substances were disposed
of,” and Shell was found to be a PRP under § 9607(a)(3), as
a person who “arranged for disposal . . . of hazardous sub-
stances owned or possessed by such person.” The first ques-
tion we address is whether the Railroads and Shell are liable
for all the cleanup costs at the Arvin site, or, as the district
court held, only some of them. The second question,
addressed later, is whether Shell is liable for any of the harm,
as an “arranger.”
A. Apportionment of Liability
1. Standard of Review and Burden of Proof
Because we have not heretofore faced a CERCLA appor-
tionment issue directly, there is no Ninth Circuit precedent
concerning the standard of appellate review for such an issue.
Three circuits have addressed the question, and two separate
approaches have emerged.
The Fifth and Eighth Circuits look first to whether there is
a reasonable basis for apportioning the harm, an inquiry they
consider a question of law reviewed de novo. See Hercules,
247 F.3d at 718-19; Bell Petroleum, 3 F.3d at 896, 902. These
two circuits then examine, as a question of fact reviewed
under the clearly erroneous standard, precisely how damages
are to be divided. See Hercules, 247 F.3d at 718 (holding that
“actual apportionment” of damages is a question of fact); Bell
Petroleum, 3 F.3d at 896 (same).
In contrast, the Sixth Circuit considers divisibility as a
whole a factual matter of causation, reviewed entirely under
the clearly erroneous standard. Township of Brighton, 153
F.3d at 318 n.13. This view, however, disregards a distinction
between conceptual divisibility and actual allocation that we
find both persuasive and useful. The latter inquiry can involve
2950 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
the resolution of credibility issues and of conflicting evidence,
while the former ordinarily does not.
We believe the most appropriate approach, and the one we
therefore adopt here, is the one adopted in Hercules and Bell
Petroleum, with a refinement suggested by Judge Parker’s
dissent in Bell Petroleum. Judge Parker thought that the
majority confused the distinction between the “legal burden
that the single harm at issue caused is of a type capable of
apportionment, and the factual burden of proving the amount
of harm attributable to a particular party.” Bell Petroleum, 3
F.3d at 909 (Parker, J., concurring in part and dissenting in
part). We are not sure that there was any such confusion.
Rather, an aspect of clear error review is the legal determina-
tion whether the party with the burden of proof met that bur-
den; if the party did not and the district court nonetheless
ruled for it, then the district court clearly erred. See Lloyd v.
Schlag, 884 F.2d 409, 415 (9th Cir. 1989) (reviewing
“whether the district court committed clear error by holding
that [plaintiff] had not met his burden of proof”). Thus,
although the harm may be capable of apportionment, the
harm may not actually be apportionable in the particular case
as a factual matter, given the evidence produced, because the
party advocating apportionment has not come forward with
the minimum showing needed to meet its burden of proof as
to the proper division of liability.
We therefore proceed as follows: We inquire, first, whether
the particular harm at issue in the case is theoretically capable
of apportionment — i.e., whether it could ever be apportioned
or whether it is, by nature, too unified for apportionment. That
question is one of law, reviewed de novo. Cf. Taisho Marine
& Fire Ins. Co. v. M/V Sea-Land Endurance, 815 F.2d 1270,
1274 (9th Cir. 1987). Second, we review for clear error
whether the defendant submitted evidence sufficient to estab-
lish a reasonable basis for the apportionment of liability, tak-
ing into account that the burden of proof is on the party
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2951
seeking allocation, as well as the district court’s actual divi-
sion of liability.
There is no dispute here on the first, purely legal question
— whether the harm is capable of apportionment. See Bell
Petroleum, 3 F.3d at 896; Chem-Dyne, 572 F. Supp. at 810.
Some of the contamination on the B&B site occurred before
the Railroads’ parcel became part of the facility. Only some
of the toxic substances were stored on the Railroads’ parcel,
and only some of the water on the facility washed over the
Railroads’ site. As to Shell, only some of the toxic substances
spilled on the facility were sold by the company. The different
toxic substances vary in their likelihood to leak and in the
manner and speed in which they disseminate in ground water.
So, conceptually, the contamination traceable to the Railroads
and Shell, with adequate information, would be allocable, as
would be the cost of cleaning up that contamination.
The questions, then, are whether the district court clearly
erred in finding that the Railroads and Shell established a
“reasonable basis” for apportionment, Bell Petroleum, 3 F.3d
at 901, and whether, having so found, the district court prop-
erly apportioned the harm.
We recognize that the district court at one point stated that
the Railroads failed to “meet their burden of proof” as to
divisibility. But its overall ruling was necessarily to the con-
trary, as the court also stated that it “independently found [in
the record] a reasonable basis for apportionment in spite of
the parties[’] presentations.” Thus, while the district court
rejected both defendants’ theories as to divisibility, it used
record evidence it found persuasive to determine apportion-
ment. Whether the district court was correct in this regard is,
as we have noted, part of the review of the factual decision
regarding apportionment, discussed hereafter. The burden of
proof issue thus melds with the merits of the apportionment
issue, rather than barring us from considering it.
2952 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
2. The Railroads
As we have established, if apportionment is to be allowed
under the Restatement approach, there must be a reasonable
basis for calculating the connection between the Railroads’
PRP status and the relevant harms. Again, the harm we con-
sider is the contamination on the Arvin site. Where, as for the
Railroads, the PRPs’ responsibility under the statute derives
solely from their status as landowner, the PRPs can establish
divisibility by demonstrating that discrete portions of the con-
tamination did not originate on land they owned at the time
of the toxic disposal.
Here, the district court’s severability analysis — after 191
pages of an amended opinion that included over 80 pages of
factual findings — ultimately relied on the simplest of consid-
erations: percentages of land area, time of ownership, and
types of hazardous products. Although we do not fault the dis-
trict court’s factfinding — its numbers are mostly correct —
its legal conclusion that these three factors alone suffice to
support apportionment cannot stand.28 We address each factor
below to show why.
a. Land Area
The only court of appeals case that has fully addressed
divisibility of landowner liability takes a relatively strict
approach to apportionment on the basis of land area. In
United States v. Rohm and Haas Co., 2 F.3d 1265 (3d Cir.
1993), the most analogous CERCLA divisibility case to this
one, the Third Circuit held, as do we, that “simply showing
28
We emphasize that our conclusion does not rest simply on the fact that
the district court’s calculation of the Railroads’ share of liability was, as
the court recognized, “rough[ ].” It is neither unusual nor fatal to the valid-
ity of the resulting allocation that an apportionment determination includes
estimates of contribution to contamination based on extrapolation of
record facts, as long as the basis for the extrapolation is explained, is logi-
cal, and does not disregard other record facts.
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2953
that one owns only a portion of the facility in question is [not]
sufficient to warrant apportionment.” Id. at 1280.
Like this case, Rohm and Haas concerned a landowner PRP
and changes in landownership over time. Although the Third
Circuit’s divisibility analysis is fairly cursory, its reluctance to
apportion landowner liability on the basis of land boundaries
is informative. Rohm and Haas indicates that the mere per-
centage of land owned by one PRP relative to the entire facil-
ity cannot alone be a basis for apportionment, as it does not
provide a minimally reliable basis for tracing the proportion
of leakage, contamination, or cleanup costs associated with
the entire parcel.
Contrary to Rohm and Haas, the district court’s analysis
gave star billing to the percentage of land ownership, even in
a unified facility.29 We agree with Rohm and Haas that this
approach, seemingly straightforward though it is, fails in most
circumstances to comport with the “reasonable basis” test, as
the facts of this case illustrate.
[13] The Arvin site was a single facility. CERCLA prem-
ises landowner liability on ownership of a facility, not on
ownership of a certain parcel of land that is part of a facility.
The operations on the site were dynamic, with fertilizer rigs
stored on the Railroad parcel and filled up on the B&B parcel.
Empty pesticide cans were stored on the Railroad parcel
before they were crushed and disposed of. After the 1978
windstorm, tanks were stored all over the facility, including
on the Railroad parcel. A simple calculation of land owner-
29
Judge Moore, concurring in the result in Township of Brighton,
asserted that a court can never apportion liability for contamination at a
single facility on the basis of geography. Township of Brighton, 153 F.3d
at 331 n.12 (Moore, J., concurring in result). We do not agree with Judge
Moore in this regard.
2954 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
ship does not capture any data that reflect this dynamic, uni-
tary operation of the single Arvin facility.30
In addition, the synergistic use of different parts of the
Arvin site makes division based on percentage of land owner-
ship particularly untenable. The record shows that B&B
leased the Railroad parcel to accommodate its expanding
operations. The Railroad parcel added an unquantifiable and
perhaps exponential amount to B&B’s soil contamination.
Were the Railroad parcel not part of the facility, there would
have been less overall storage capacity. One can assume that
a smaller amount of toxic chemicals would have been deliv-
ered to, and spilled on, the Arvin site. The fertilizer rigs, for
example, were stored almost exclusively on the Railroad par-
cel. Had that parcel not been available, less fertilizer might
have been delivered to — and leaked onto — the Arvin par-
cel. As these descriptions suggest, nothing in the record sup-
ports a conclusion that the leakage of contaminants that ended
up on the B&B parcel occurred on each parcel in proportion
to its size.
[14] Instead, given the circumstances of this case, more
pertinent comparisons would be the proportion of the amount
of chemicals stored, poured from one container to another, or
spilled on each parcel. For example, were adequate records
kept, it would be possible to estimate the amount of leakage
attributable to activities on the Railroad parcel, how that leak-
age traveled to and contaminated the soil and groundwater
under the Arvin parcel, and the cost of cleaning up that con-
tamination.
30
In its discussion of the Railroads’ apportioned liability, the district
court found that B&B used the Railroad parcel as part of its total
agricultural-chemical operations, and it earlier cited approvingly to docu-
ments describing the land as “an integral part of the adjacent farm chemi-
cal distribution facility.” The dissent from denial of rehearing en banc
therefore wrongly characterizes our description of the site as “appellate
fact-finding.” See Dissent at 2914-16.
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2955
[15] But none of this data is in the record. It may well be
that such information is, as a practical matter, not available
for periods long in the past, when future environmental
cleanup was not contemplated. Unlike records concerning the
amount of toxic chemicals produced by a given operator of a
facility, records that separate out, with any precision, the
amount of toxic chemicals stored on one part of a facility as
opposed to another would have had little utility to B&B, the
operator of the facility, and none to the Railroads, the owners
of the parcel. This observation is true in spades for the more
directly pertinent data, such as the amount of leakage on the
Railroad parcel, the amount of that leakage that flowed onto
the B&B parcel, and the amount of that residue that remained
as contamination under the B&B parcel when the cleanup
began.
[16] So the failure to keep these records is quite under-
standable. But these practical considerations cannot justify a
“meat-axe” approach to the divisibility issue, premised on
percentages of land ownership, as a means of adjusting for the
difficulties of proving divisibility with precision when PRP
status is based on land ownership alone. Such an approach
would be tantamount to a disagreement with the imposition of
no-fault land ownership liability. Congress, however, created
precisely such liability, placing the responsibility to pay for
environmental cleanup on parties, such as the Railroads, that
profited from the circumstances giving rise to the contamina-
tion so that the taxpayers are not left holding the tab. The risk
of lack of adequate information for meaningful division of
harm therefore must rest on the responsible parties, even
when that information is extremely hard to come by.
b. Period of Ownership
[17] Just as the district court’s land area calculations did
not correspond to the harms in this case, its simple fraction
based on the time that the Railroads owned the land cannot be
a basis for apportionment. The fraction it chose assumes cons-
2956 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
tant leakage on the facility as a whole or constant contamina-
tion traceable to the facility as a whole for each time period;
no evidence suggests that to be the case. Again, if adequate
information were available, it would make sense to eliminate
the Railroads’ liability for the period before B&B leased the
Railroad parcel. See, e.g., Rohm and Haas, 2 F.3d at 1280.
The evidentiary vacuum concerning the amount of contamina-
tion traceable to the pre-lease period, however, precludes any
such calculation here.
c. Types of Hazardous Products
[18] While many of the district court’s calculations were
factually correct but legally insufficient, its decision to assign
a two-thirds fraction to represent the present types of hazard-
ous products contains a basic factual error. All three chemi-
cals were on the Railroad parcel at some time. There is no
evidence as to which chemicals spilled on the parcel, where
on the parcel they spilled, or when they spilled. Yet, there is
evidence that there may well have been leakage on the Rail-
road parcel of D-D, the chemical the district court excluded
from its calculations. Given the record, the district court
clearly erred in its attempt to rely on the proportion of hazard-
ous products present on the Railroad parcel.
d. Conclusion
It will often be the case that a landowner PRP will not be
able to prove in any detail the degree of contamination trace-
able to activities on its land. A landowner PRP need not be
involved at all in the disposal of hazardous chemicals and so
will often have no information concerning that disposal or its
impact. The net result of our approach to apportionment of
liability, consequently, may be that landowner PRPs, who
typically have the least direct involvement in generating the
contamination, will be the least able to prove divisibility. And
contribution “is not a complete panacea since it frequently
will be difficult for defendants to locate a sufficient number
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2957
of additional, solvent parties.” O’Neil v. Picillo, 883 F.2d 176,
179 (1st Cir. 1989).
While the result may appear to fault a landowner PRP for
failing to keep records proving the minor connection of its
land to the contamination on the facility as a whole, CERCLA
is not a statute concerned with allocation of fault. Instead,
CERCLA seeks to distribute economic burdens. Joint and
several liability, even for PRPs with a minor connection to the
contaminated facility, is the norm, designed to assure, as far
as possible, that some entity with connection to the contami-
nation picks up the tab. Apportionment is the exception, avail-
able only in those circumstances in which adequate records
were kept and the harm is meaningfully divisible.
[19] In sum, although most of the numbers the district court
used were sufficiently exact, they bore insufficient logical
connection to the pertinent question: What part of the contam-
inants found on the Arvin parcel were attributable to the pres-
ence of toxic substances or to activities on the Railroad
parcel? We therefore reject the district court’s apportionment
calculation and hold that the Railroads have failed to prove
any reasonable basis for apportioning liability for the costs of
remediation.
3. Shell
Shell’s contribution to the contamination of the Arvin site
is easier to isolate than that of the Railroads’, as it involved
ascertainable pollutants entering the soil in a specific way.
Shell thus had a greater prospect of succeeding on divisibility
than did the Railroads, as there is some volumetric basis for
comparing its contribution to the total volume of contamina-
tion on the Arvin site.
Nonetheless, the evidence actually produced was insuffi-
cient to allow even a rough approximation of the contamina-
tion remaining on the facility, either directly or through the
2958 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
presumption that the pro rata cost of remediating contamina-
tion is likely to be equivalent to a PRP’s pro rata share of con-
tamination. Indeed, Shell produced only evidence concerning
leakage.
[20] Such leakage or disposal evidence cannot suffice in
the present circumstances as a basis for apportioning the harm
in question. As we have explained, contamination — as dis-
tinct from leakage — is the necessary consideration. Where
there is disposal of multiple contaminants, courts have
demanded a “showing [of] a relationship between waste vol-
ume, the release of hazardous substances, and the harm at the
site.” Monsanto, 858 F.2d at 172. Factors such as “relative
toxicity, migratory potential, and synergistic capacity of the
hazardous substances” are relevant to demonstrating this rela-
tionship. Id. at 172 n.26. Alternatively, volumetric calcula-
tions of contaminating chemicals — those remaining in the
environment and requiring cleanup — could be sufficiently
specific for apportionment. See Hercules, 247 F.3d at 719;
Bell Petroleum, 3 F.3d at 903. But Shell provided no evidence
regarding such factors. It thus failed to prove whether its
leaked chemicals contaminated the soil in any specific propor-
tion as compared to other chemicals spilled at the site. See
United States v. Agway, Inc., 193 F. Supp. 2d 545, 549
(N.D.N.Y. 2002) (noting that defendants whose products have
become commingled in the soil “face an uphill battle in
attempting to demonstrate that volumetric contribution is a
reasonable basis for apportioning liability of a single harm”).
To fill these evidentiary gaps, the district court assumed
equal contamination and cleanup cost from all the chemicals’
leakage. This methodology entirely failed to account for the
possibility that leakage of one chemical might contribute to
more contamination than leakage of another, because of their
specific physical properties. Similarly, the cost of cleanup
depends upon which contaminants are present; some contami-
nants are more expensive than others to extract from the soil.
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2959
Moreover, even as an approximation of leakage, the district
court’s calculations were too speculative to support apportion-
ment. Chem-Nuclear is informative in this regard. In Chem-
Nuclear, the defendant disposed of drums of hazardous waste
at several facilities. 292 F.3d at 255. At least eighty drums
found at a single site were attributable to the defendant. Id.
The defendant could not prove, however, that it was responsi-
ble only for those eighty drums, and therefore was not entitled
to apportionment. Id. at 259-61. Although the defendant pro-
vided evidence supporting inferences regarding where its
drums went, the court refused to accept these inferences as
sufficient proof. Id. at 260.
Here, the court estimated the volume of Shell’s chemicals
that leaked from each transfer based on data samples that do
not readily extrapolate to total leakage over the entire twenty-
three-year period that Shell supplied B&B with D-D. The
court used figures from only six years of B&B’s purchases of
Shell D-D to calculate the average D-D transferred at the
Arvin site each year, yet provided no basis for assuming equal
purchases each year. The court then based its estimate of the
amount of D-D spilled during each transfer on guesses by wit-
nesses.31 Also, although D-D was known to leak when sight
gauges on D-D rigs broke, the court had no evidence of how
much D-D leaked under these circumstances and, therefore,
did not add any quantity for sight gauge leakage into the cal-
culation. Even if each of these estimates alone might have
been reasonable, the resulting combined estimate is too specu-
lative to serve as an accurate basis for ascertaining leakage,
let alone contamination or the costs of cleaning up the contami-
nation.32
31
For the quantity of D-D that spilled during transfer from Shell’s carri-
ers’ trucks to the D-D rigs, for example, the court relied on estimates of
witnesses that the spill was between a cup and a quart. It then calculated
“3 cups x 23 years = 2,691 cups => 168 gallons of D-D.”
32
There is something of a circuit split on the degree of specificity of
proof necessary to establish the amount of liability apportioned to each
2960 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
Again, Shell’s harm was capable of apportionment. Shell
could have provided data showing the volume of chemicals
shipped to B&B every year, or more precise estimates of the
average volume of leaked chemicals during the transfer pro-
cess. Data connecting the properties of the various chemicals
leaked at the site to the likelihood that they contributed to the
contamination could have been presented and considered. But
the record before us provides none of that information, most
likely because Shell put its eggs in the no-liability basket.
[21] In the end, the district court’s apportionment analysis
with regard to Shell came closer to meeting the legal standard
than the method it used with respect to the Railroads. We
hold, nonetheless, that on the facts of this case as the district
court found them, there was no reasonable basis for appor-
tioning the pertinent harm caused by Shell.
B. “Arranger” Liability
[22] Under CERCLA, “any person who by contract, agree-
ment, or otherwise arranged for disposal or treatment, or
PRP. According to some courts, proving up the precise proportion attribut-
able to each PRP is a “very difficult proposition,” Control Data Corp. v.
S.C.S.C. Corp., 53 F.3d 930, 934 n.4 (8th Cir. 1995), requiring “concrete
and specific” evidence in support of any proposed apportionment, Hercu-
les, 247 F.3d at 718. The defendant cannot rely on a “chain of possible
inferences.” Chem-Nuclear, 292 F.3d at 260. In contrast, other courts have
permitted informal estimates or data rather than more exact calculations.
See Bell Petroleum, 3 F.3d at 903-04 (allowing estimation of the propor-
tion of contamination produced by each of a series of successive operators
of a facility, where reliable approximations were simple because there was
a single chemical produced by the successive operators each of whom
operated the facility similarly); see also Hercules, 247 F.3d at 719 (relying
on Bell Petroleum, 3 F.3d at 895-96, and holding that the defendant need
not show that there was no possibility that it contributed to the harm,
because certain approximations can suffice). Aside from noting, as we
have, supra n.27, that logical, supportable inferences from the record facts
are, as always, permissible, we need not weigh in on this dispute, as the
district court’s extrapolations could not be upheld under even a forgiving
standard.
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2961
arranged with a transporter for transport for disposal or treat-
ment, of hazardous substances owned or possessed by such
person” is liable. § 9607(a)(3). Shell claims that (1) the dis-
trict court applied the wrong legal standard in determining
whether Shell was an “arranger” under § 9607(a); (2) the
“useful product” doctrine precludes imposition of “arranger”
liability on Shell; (3) Shell lacked ownership and control over
the chemicals at the time of the transfers and thus the district
court could not find that it had arranged them; and (4) because
D-D evaporates or disperses rather than remaining in toxic
form in the soil, the district court erred when it determined
that Shell contributed to the groundwater contamination. We
reject these contentions and affirm the district court’s ruling
on the “arranger” issue.
We review the district court’s interpretation of CERCLA to
determine the legal standard for arranger liability as a ques-
tion of law, reviewed de novo. Carson Harbor Vill., 270 F.3d
at 870. We review the district court’s factual determinations
regarding Shell’s operations for clear error. W. Prop. Serv.
Corp. v. Shell Oil Co., 358 F.3d 678, 685 (9th Cir. 2004).
1. Requirements for “Arranger” Liability
CERCLA does not define “arrange[ ].” We have avoided
giving the term “arranger” too narrow an interpretation to
avoid frustrating CERCLA’s goal of requiring that companies
responsible for the introduction of hazardous waste into the
environment pay for remediation. Pakootas v. Teck Cominco
Metals, Ltd., 452 F.3d 1066, 1081 (9th Cir. 2006); Cadillac
Fairview/Cal., Inc. v. United States, 41 F.3d 562, 565 n.4 (9th
Cir. 1994) (per curiam) (citing with approval United States v.
Aceto Agric. Chems. Corp., 872 F.2d 1373, 1380 (8th Cir.
1989)); see also Jones-Hamilton Co. v. Beazer Materials &
Servs., Inc., 973 F.2d 688, 694-95 (9th Cir. 1992) (discussing
Aceto, 872 F.2d at 1390). Accordingly, we have recognized,
in addition to “direct” arranger liability, a “broader” category
of arranger liability, see United States v. Shell Oil Co., 294
2962 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
F.3d 1045, 1054-55 (9th Cir. 2002), in which disposal of haz-
ardous wastes is a foreseeable byproduct of, but not the pur-
pose of, the transaction giving rise to PRP status.
“Direct” arranger liability — also referred to as “ ‘tradi-
tional’ direct” arranger liability — involves transactions in
which the central purpose of the transaction is disposing of
hazardous wastes. See id.; see, e.g., Cadillac Fairview, 41
F.3d at 563-65 (involving rubber companies that transferred
contaminated styrene to Dow Chemical for reprocessing);
Catellus Dev. Corp. v. United States, 34 F.3d 748, 749-50
(9th Cir. 1994) (involving a company that sold used automo-
tive batteries to a lead reclamation plant). In contrast, “broad-
er” arranger liability involves transactions that contemplate
disposal as a part of, but not the focus of, the transaction; the
“arranger” is either the source of the pollution or manages its
disposal. See Shell Oil, 294 F.3d at 1058. In the “broader”
arranger liability cases, such as Shell Oil, we examined the
connection between the alleged arranger transaction and the
disposal and decided whether the transaction necessarily con-
stituted an arrangement for disposal of hazardous substances,
whatever immediate form it may have taken.
These broader arranger cases can involve situations, like
the present one, in which the alleged arrangers did not con-
tract directly for the disposal of hazardous substances but did
contract for the sale or transfer of hazardous substances,
which were then disposed of. See, e.g., Fla. Power & Light
Co. v. Allis Chalmers Corp., 893 F.2d 1313, 1315, 1318 (11th
Cir. 1990) (involving purchaser and recycler that sued manu-
facturer of transformers for cleanup costs from later disposal);
Mathews v. Dow Chemical Co., 947 F. Supp. 1517, 1519-20
(D. Colo. 1996) (involving neighbors of chemical company
who sued manufacturer of paint thinner for contamination
resulting from packaging paint thinner); Courtaulds Aero-
space, Inc. v. Huffman, 826 F. Supp. 345, 347-48, 353-54
(E.D. Cal. 1993) (involving neighbor of smelting plant who
sued companies that contracted with plant for burning and
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2963
smelting of copper wire for resulting contamination). There
are no Ninth Circuit cases in this category.33
[23] The inclusion of such circumstances within the “ar-
ranger” concept, however, accords with the statutory language
and structure as a whole. To be an “arranger,” one must “ar-
range[ ] for disposal or treatment, or arrange[ ] with a trans-
porter for transport for disposal or treatment, of hazardous
substances . . . .” § 9607(a)(3). CERCLA’s definition of “dis-
posal,” in turn, includes “the discharge, deposit, injection,
dumping, spilling, leaking, or placing of any solid waste or
hazardous waste into or on any land or water so that such
solid waste or hazardous waste or constituent thereof may
enter the environment or be . . . discharged into any waters,
including ground waters.” § 6903(3) (referred to by
§ 9601(29)). That “disposal” includes such unintentional pro-
cesses as “leaking” indicates that “disposal” need not be pur-
poseful. See Carson Harbor Vill., 270 F.3d at 880 (holding
that “leaking” may not “require affirmative . . . conduct”
(internal quotation marks omitted) (quoting and adopting
interpretation of United States v. CDMG Realty Co., 96 F.3d
706, 714 (3d Cir. 1996))). Thus, an entity can be an arranger
even if it did not intend to dispose of the product. Arranging
for a transaction in which there necessarily would be leakage
or some other form of disposal of hazardous substances is suf-
ficient.
33
Although Shell Oil involved “broader” arranger liability, it concerned
“arranger” liability of a customer, rather than a producer, of hazardous
materials. 294 F.3d at 1056. There, the defendant oil companies sought to
hold the United States liable as an “arranger” because the federal govern-
ment had purchased large quantities of high octane fuel for military use;
the process used by the oil companies to refine the fuel resulted in toxic
waste that the oil companies later dumped at a site in California. Id.
Because the United States was the end purchaser, never owned the inter-
vening toxic products used in the refining process, and did not contract out
the crucial, waste-producing intermediate step, we held that it was not an
arranger under § 9607(a)(3). Id. at 1056-59.
2964 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
2. “Useful Product” Doctrine
[24] While adopting a generally expansive view of arranger
liability, we have refused to hold manufacturers liable as
arrangers for selling a useful product containing or generating
hazardous substances that later were disposed of. See, e.g.,
3550 Stevens Creek Assocs. v. Barclays Bank of Cal., 915
F.2d 1355, 1362-65 (9th Cir. 1990). As Stevens Creek and
other “useful product” cases recognize, liability cannot extend
so far as to include all manufacturers of hazardous substances,
on the theory that there will have to be disposal of the sub-
stances some time down the line, after it is used as intended.
See, e.g., Stevens Creek, 915 F.2d at 1362-65 (refusing to hold
manufacturer liable for costs of removing asbestos from
building); Fla. Power & Light, 893 F.2d at 1318-19 (refusing
to hold manufacturer of transformers liable for subsequent
release of chemicals upon disposal of transformers). Also, the
asserted liability in “useful product” cases generally involved
only the normal use of those chemicals. See, e.g., Jordan v.
S. Wood Piedmont Co., 805 F. Supp. 1575, 1577 (S.D. Ga.
1992) (involving the sale of chemicals to treat wood and the
contamination from the wood treatment process); Edward
Hines Lumber Co. v. Vulcan Materials Co., 685 F. Supp. 651,
653 (N.D. Ill. 1988) (same).
[25] The useful product cases have no applicability where,
as here, the sale of a useful product necessarily and immedi-
ately results in the leakage of hazardous substances. In that
circumstance, the leaked portions of the hazardous substances
are never used for their intended purpose. See Zands v. Nel-
son, 779 F. Supp. 1254, 1262 (S.D. Cal. 1991) (stating that
“gasoline is no longer a useful product after it leaks into, and
contaminates, the soil”); see also Aceto, 872 F.2d at 1381
(rejecting application of the useful product doctrine where
“waste is generated and disposed of contemporaneously with
the process” (emphasis added)).
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2965
Here, although Shell sold B&B a useful product, leakage of
some of that product before B&B could use it was both inher-
ent in the transfer process arranged by Shell and contempora-
neous with that process.34 Shell arranged for delivery of the
substances to the site by its subcontractors; was aware of, and
to some degree dictated, the transfer arrangements; knew that
some leakage was likely in the transfer process; and provided
advice and supervision concerning safe transfer and storage.
Disposal of a hazardous substance was thus a necessary part
of the sale and delivery process.
Put another way, the district court did not assign arranger
liability to Shell for contamination resulting from the applica-
tion of Shell’s useful products to the soil as fertilizers or fumi-
gants, or for disposal of contaminated soil after the products
were used. Instead, the district court assigned arranger liabil-
ity on the portion of product that never made it to the fields
for its intended use but was disposed of prior to use. Because
Shell’s liability here stems from the leaked chemicals rather
than the fertilizer that was used as fertilizer, the useful prod-
uct doctrine is not applicable.
3. Control and Ownership
Much of the district court’s analysis relies on the factual
determination that spills would necessarily occur during the
transfer of Shell’s chemicals to B&B. Shell maintains that this
finding was inadequate, because Shell did not itself transport
the chemicals or participate in transferring the chemicals to
B&B’s containers. Central to this contention is Shell’s insis-
tence that it lacked ownership and control of the chemicals at
34
For this reason, we also reject Shell’s argument that, because manu-
facturers are taxed to provide money for the Superfund, Congress could
not, without more, have intended for them to be subject to liability as
arrangers. See 26 U.S.C. §§ 4661, 4662. Shell’s liability derives not from
its role as a manufacturer of a useful product but rather from its role in
leakage prior to use. The Superfund tax is wholly irrelevant to the latter
imposition of liability and certainly does not bar it.
2966 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
the time of transfer and so could not be an “arranger.” We do
not agree that the district court’s findings about Shell’s
involvement were insufficient to support “arranger” liability.
There was evidence before the district court that: (1) Spills
occurred every time the deliveries were made; (2) Shell
arranged for delivery and chose the common carrier that
transported its product to the Arvin site; (3) Shell changed its
delivery process so as to require the use of large storage tanks,
thus necessitating the transfer of large quantities of chemicals
and causing leakage from corrosion of the large steel tanks;
(4) Shell provided a rebate for improvements in B&B’s bulk
handling and safety facilities and required an inspection by a
qualified engineer; (5) Shell regularly would reduce the pur-
chase price of the D-D, in an amount the district court con-
cluded was linked to loss from leakage; and (6) Shell
distributed a manual and created a checklist of the manual
requirements, to ensure that D-D tanks were being operated
in accordance with Shell’s safety instructions.
The parties vigorously dispute whether, given these facts,
Shell owned the pesticide during the transfer and controlled
the transfer process. Although the district court addressed
these questions and resolved them against Shell, we do not
enter this controversy. The text of the statute does not require
that the arranger own the hazardous wastes, either at the time
the “arranger” arranged for the transaction or at the time of
transfer of ownership. See Pakootas, 452 F.3d at 1081.
Indeed, to require ownership at the time of disposal “would
make it too easy for a party, wishing to dispose of a hazardous
substance, to escape by a sale its responsibility to see that the
substance is safely disposed of.” Catellus, 34 F.3d at 752. Nor
is control a statutory requirement, Cadillac Fairview, 41 F.3d
at 565, although it has been viewed as a pertinent consider-
ation in cases quite different from this one.
Where an owner of hazardous substances directly “ar-
ranges” for disposal — by, for example, using a hazardous
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2967
substance disposal company — that owner is plainly an “ar-
ranger” even if it has nothing more to do with disposal. See,
e.g., Catellus, 34 F.3d at 752. In “broader” arranger liability
cases, however, we have tended to view control as a “crucial
element” in determining whether the party arranged for dis-
posal. Shell Oil, 294 F.3d at 1055. We also have viewed own-
ership of hazardous substances at the time of disposal as an
important factor in nontraditional, indirect arranger liability
cases. See Jones-Hamilton, 973 F.2d at 695 (relying on Aceto,
872 F.2d at 1380).
None of these cases, however, indicates that ownership or
control at the time of transfer are the sine qua non of nontradi-
tional arranger liability. Instead, ownership and control at
time of disposal are useful indices or clues toward the end of
“look[ing] beyond defendants’ characterizations to determine
whether a transaction in fact involves an arrangement for the
disposal of a hazardous substance.” Aceto, 872 F.2d at 1381.
In Shell Oil, for example, the government never owned the
chemicals before disposal occurred, so control over the sub-
stances was an important factor in determining whether or not
the government could have “arranged” for disposal. Shell Oil,
294 F.3d at 1057-59.
[26] Here, ownership at the time of disposal is not an infor-
mative consideration, and control is informative only in light
of additional considerations. Unlike in Shell Oil, where the
absence of any ownership or control was a clue concerning
whether the sales transaction necessarily contemplated dis-
posal as an inherent part of the transaction, Shell here owned
the chemicals at the time the sale was entered into. The statute
requires nothing more in terms of ownership. We therefore
need not determine the precise moment when ownership
transferred to B&B. As to the control question, the district
court’s findings, recited above, demonstrate that Shell had
sufficient control over, and knowledge of, the transfer process
to be considered an “arranger,” within the meaning of CER-
CLA, for the disposal of the chemicals that leaked.
2968 DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN
4. Groundwater Contamination
Shell, finally, contends that the court erred when it deter-
mined that it contributed to the groundwater contamination,
maintaining that D-D evaporates or disperses rather than
remaining in toxic form in the soil. The district court’s analy-
sis on this issue is factually complex and based on several
weeks of testimony. The district court made specific findings
that D-D can indeed enter groundwater. Those findings are
based on the testimony of experts whom the court found per-
suasive. In light of the complexity of the science and the sub-
stantial expert evidence supporting the finding, the district
court’s determination was not clearly erroneous.
IV. Conclusion
The district court erred in determining that the harm in this
case could be apportioned on this record. Given the district
court’s erroneous approach and the paucity of record evi-
dence, there is no reasonable basis for apportioning the dam-
ages attributable to the Railroads’ activity. Shell’s liability is
a closer call, but the evidence on the record in that regard is
also insufficient to support apportionment.
The district court followed the proper analysis in finding
that Shell is liable as an arranger. Shell arranged for the sale
and transfer of chemicals under circumstances in which a
known, inherent part of that transfer was the leakage, and so
the disposal, of those chemicals.
We therefore reverse as to the district court’s finding on
apportionment. We affirm the district court’s findings regard-
ing both the Railroads’ and Shell’s liability. The Railroads
and Shell are jointly and severally liable for the harm at the
Arvin site, except with regard to the so-called “Dinoseb hot
spot.”35 We remand for further proceedings not inconsistent
35
The district court found that the “Dinoseb hot spot” was a discrete
area contaminated by Dinoseb (a Dow product) as the result of a major
DEP’T OF TOXIC SUBSTANCES v. BURLINGTON NORTHERN 2969
with this opinion.
REVERSED in part and AFFIRMED in part.
spill in 1983, that Shell did not manufacture or ship that product, and that
Shell thus bore no responsibility for any part of the $1.3 million cost of
cleaning up this discrete spill. The governments did not challenge this
finding on appeal. That finding therefore stands, and the district court
should not include the $1.3 million cleanup costs for the “Dinoseb hot
spot” in the calculation of Shell’s liability. Because we therefore do not
hold Shell liable for this Dow product, the dissent from denial of rehearing
en banc is wrong when it claims we err by holding Shell liable for “con-
tamination from products Shell did not sell to B&B.” Dissent at 2921-22
n.22.