State of RI v. Env. Tech.

United States Court of Appeals
For the First Circuit
No. 00-1234, 00-1342, 00-1343, 00-1344, 00-1345, 00-1399, 00-1400, 00-
1401, 00-1402, 00-1403, 00-1404
UNITED STATES OF AMERICA,
Plaintiff, Appellee,
v.
WILLIAM M. DAVIS, et al.,
Defendant, Appellee.
________________________
ASHLAND, INC., et al.,
Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. Ernest C. Torres, U.S. District Judge]
Before
Lipez, Circuit Judge,
Zobel and Woodlock, District Judges.*
Denis V. Brenan for appellant Ashland, with whom Neal J. McNamara
and Morgan, Lewis & Bockius LLP were on the brief; Gerald J. Petros for
appellants Acco Bristol and Gar Electroforming Division, with whom
Christopher R. Bush, Charles D. Blackman, and Hinckley, Allen & Snyder
LLP were on the brief; Gregory L. Benik and Robin L. Main for
appellants Morton International, Inc. and Perkin-Elmer Corporation,
with whom Karen A. Mignone and McGovern Noel & Benik, Inc. were on the
brief.
Robert E. Maher, attorney, U.S. Department of Justice, for
appellee United States, with whom Joan M. Pepin, Susan M. Akers, Scott
D. Bauer, attorneys, U.S. Department of Justice, and Lois J. Schiffer,
Assistant Attorney General, were on the brief.
R. Bradford Fawley for appellee United Technologies Corporation,
with whom Bruce C. Palmer, Robert A. Miller, and Downs Rachlin & Martin
were on the brief; Alok Ahuja for appellees BFI Waste Systems of North
America, Inc., Michael A. Macera, Robert A. Cece, and Macera Brothers
Container Service, Inc., with whom Harold I. Kessler, Friedman &
Kessler, William G. Beck, and Lathrop & Gage, L.C., were on the brief;
Craig M. Scott for appellee City of New Jersey, with whom Duffy &
Sweeney, LTD was on the brief; Mark T. Reynolds for appellee
Electroformers, Inc., with whom Boyer, Reynolds & Demarco, LTD was on
the brief.
August 17, 2001
* Of the District of Massachusetts, sitting by designation.
Table of Contents
I Background
II The Consent Decrees
A. Background
1. Consent Decree I
2. Consent Decrees II, III, IV, and Capuano
3. The District Court Approval
B. Reviewing the Approval of the Consent Decree
1. Standard of Review
2. Case or Controversy
3. Fairness
a. Procedural
b. Substantive
4. Reasonableness
5. Statutory Fidelity
6. Unconstitutional Taking
III The Declaratory Judgment
A. Background on CERCLA Contribution Actions
B. The District Court's Declaratory Judgment Ruling
C. The Parties' Challenges to the Declaratory Judgment
1. Proof that the Defendants Disposed of Hazardous
Waste
a. Ashland
b. Acco-Bristol
c. Black & Decker a/k/a Gar
d. Perkin-Elmer
2. Wilbert Jones's Testimony
a. Grounds for Exclusion
b. Grounds for Disbelieving
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3. Exclusion of Master Chart
a. Procedural Posture
b. Admissibility of the Chart
4. Proof that Defendants' Waste Caused or
Contributed to Cleanup Costs
5. The Entry of a Declaratory Judgment under 42
U.S.C. § 9613 (g)(2) and the Declaratory
Judgment Act
6. Morton's Liability
a. Claims of Clearly Erroneous Factual
Findings
b. Claims of Legal Error
7. Successor-in-Interest Liability for Gar
8. UTC's Appeal
a. The Judgment in Favor of Macera
i. Transporter Liability
ii. Arranger Liability
b. The Judgment in Favor of the City of New
Jersey
c. The Government's $6 Million Enforcement
Costs
IV Conclusion
Appendix I A Roster of Parties, Principals, and Witnesses
Appendix II A Summary of Relevant Monetary Sums
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LIPEZ, Circuit Judge. This appeal concerns the third phase
of litigation under the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq.,
stemming from the disposal of hundreds of thousands of gallons of
hazardous waste in the late 1970s at a site in Smithfield, Rhode Island
owned by William and Eleanor Davis. This phase concerns an action by
United Technologies Corporation (UTC) under CERCLA's contribution
provision, 42 U.S.C. § 9613(f). In 1995, UTC was found jointly and
severally liable for costs incurred by the United States for the
cleanup of the Davis site. Hoping to relieve itself of some of the
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burden of that judgment, UTC sued several dozen other potentially
responsible parties. Most of these parties, as well as UTC, signed
partial consent decrees with the United States in which they agreed to
pay a share of the cleanup costs. Several parties, however, did not
settle, and in 1998 UTC took them to trial. One of the non-settlors,
Ashland, Inc., appeals the district court's entry of the partial
consent decrees. Ashland and four other non-settlors also appeal the
court's entry following trial of a declaratory judgment holding them
liable for disposing of hazardous waste at the Davis site and
allocating to them shares of responsibility for cleanup costs.
Finally, UTC appeals three aspects of the court's ruling.
We affirm, with one exception -- a remand for clarification
of the district court's ruling that UTC may be solely responsible for
$6 million in government enforcement costs.
I. Background
We describe the facts in the light most favorable to the
judgment.1 During the 1970s, William Davis operated a waste disposal
site on ten acres of land in Smithfield, Rhode Island.2 In 1982, the
1To assist the reader of this opinion, there are two appendices
attached. The first identifies the roles of the multiple parties to
this appeal and the roles of the key principals and witnesses. The
second breaks down the liability and settlement amounts referred to in
the case.
2Forest borders the Davis site to the east and west, and wetlands
and swamp border it to the north and south. When the United States
filed suit in 1990, there were about 100 homes within one mile of the
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Environmental Protection Agency (EPA) placed the Davis site on its
National Priorities List of hazardous waste sites. After undertaking a
remediation investigation and completing a feasibility study, the EPA
issued a Record of Decision in 1987 describing the cleanup work that it
deemed necessary to mitigate the environmental damage caused by the
hazardous waste disposal. As described by the EPA, the cleanup
required the government to "(1) complete a water line to supply
drinking water to areas where the drinking water wells already are
contaminated and to areas where the contaminated groundwater plume
threatens additional wells; (2) clean contaminated groundwater; and (3)
excavate and clean contaminated soils that continue to contaminate the
groundwater and other environmental media at the Site." The EPA
estimated the cost of this work at about $3 million for the water line,
$13 million for groundwater cleanup, and $14 million for soil
remediation. The government began the work of constructing water lines
to nearby residents, but took no action on the soil or groundwater
cleanups. See United States v. Davis, 11 F. Supp. 2d 183, 192 (D.R.I.
1998) (Davis II).
In 1990, the United States brought an action under 42 U.S.C.
§ 9607 for recovery of past and future response costs at the Davis
site. This provision of CERCLA allows the government to bring a "cost
site, and about 3,800 residents within three miles. The site lies
within a 20-mile radius of Providence, Rhode Island.
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recovery action" against an owner or operator of a facility at which
hazardous substances were disposed, against a transporter of hazardous
waste, and against a party who arranged for the disposal or transport
of hazardous waste. 42 U.S.C. § 9607(a).3 The government sued William
3 Section 9607(a) states:
Notwithstanding any other provision or
rule of law, and subject only to the defenses set
forth in subsection (b) of this section--
(1) the owner and operator of a vessel
or 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 otherwise arranged for disposal or
treatment, or arranged with a transporter for
transport for disposal or treatment, of hazardous
substances owned or possessed by such person, by
any other party or entity, at any facility or
incineration vessel owned or operated by another
party or entity and containing such hazardous
substances, and
(4) any person who accepts or accepted
any hazardous substances for transport to
disposal or treatment facilities, incineration
vessels or sites selected by such person, from
which there is a release, or a threatened release
which causes the incurrence of response costs, of
a hazardous substance, shall be liable 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;
(B) any other necessary costs of
response incurred by any other person consistent
with the national contingency plan;
(C) damages for injury to, destruction
of, or loss of natural resources, including the
reasonable costs of assessing such injury,
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Davis as an owner-operator; Eleanor Davis as an owner; United
Sanitation, Inc. and A. Capuano Brothers Inc. as transporters and
arrangers; and Ciba-Geigy Corporation, Clairol Inc., Pfizer Inc., The
Providence Journal Company, and UTC as arrangers.4
The district court trifurcated the government's case. Phase
I would determine whether the defendants were liable for response
costs. Phase II would establish the amount of response costs incurred
by the United States. Phase III, which is at issue in these appeals,
would deal with all remaining claims, including claims for
contribution, indemnification, and allocation of responsibility.
In 1991, with the government's case against it pending, UTC
sued some of its co-defendants and 88 other companies under 42 U.S.C.
§ 9613(f), which allows one potentially responsible party (PRP) to
bring an action for contribution against other PRPs.5 Some of these
destruction, or loss resulting from such a
release; and
(D) the costs of any health assessment
or health effects study carried out under section
9604(i) of this title.
4The court at times referred to the arranger defendants as
"generators." United States v. Davis, 882 F. Supp. 1217, 1219 (D.R.I.
1995) (Davis I).
5 In its original form, CERCLA did not expressly provide that a
party who was liable for cleanup costs under § 9607 could seek
contribution from other PRPs. See Keytronic Corp. v. United States,
511 U.S. 809, 816 (1994). In 1986, Congress expressly created a
"contribution action" by amending CERCLA with the Superfund Amendments
and Reauthorization Act (SARA). 42 U.S.C. § 9613(f). Section 9613(f)
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third-party defendants impleaded additional fourth-party defendants,
bringing a total of 138 defendants into the litigation. The United
States did not sue these parties directly.
In a 1994 partial consent decree, Clairol Inc., Ciba-Geigy
Corporation, Pfizer Inc., and The Providence Journal Company agreed
collectively to pay the United States $5.625 million, plus interest
accruing from the date of the settlement, toward the Davis site
cleanup. UTC, however, did not settle, and the government took it to
trial in 1995.6 After a bench trial, the district court found that UTC
had dumped wax and solvent waste at the Davis site and held UTC jointly
and severally liable for all past and future cleanup costs. See Davis
I, 882 F. Supp. at 1225.
While preserving the right to appeal that judgment, UTC
states in relevant part:
(1) Contribution
Any person may seek contribution from any other person who
is liable or potentially liable under section 9607(a) of
this title, during or following any civil action under
section 9606 of this title or under section 9607(a) of this
title. Such claims shall be brought in accordance with this
section and the Federal Rules of Civil Procedure, and shall
be governed by Federal law. In resolving contribution
claims, the court may allocate response costs among liable
parties using such equitable factors as the court determines
are appropriate.
6 The claims against William and Eleanor Davis, United Sanitation,
and A. Capuano Brothers were not settled "but for reasons that are not
entirely clear . . . were held in abeyance." Davis II, 11 F. Supp. 2d
at 186.
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stipulated that the response costs incurred by the EPA before September
30, 1987, and the enforcement costs incurred by the Department of
Justice before September 30, 1994 -- the cut-off dates set by the court
for determining the government's costs -- totaled $9.1 million. See
id. UTC and the United States also stipulated that the $5.8 million
($5.625 million plus interest) paid by the four settlors would be
deducted from UTC's liability. These stipulations eliminated the need
for a Phase II trial.
The case next proceeded to the Phase III claims for
contribution, indemnification, and allocation of responsibility against
the third and fourth-party defendants.7 By April 1996, the government
said that it had incurred $19 million in response costs for site study
and partial construction of waterlines and $6 million in litigation
enforcement costs. See id. at 192. It projected future costs of $3
million to complete the water lines, $14 million for soil remediation,
and $13 million for groundwater remediation, bringing the total
response and enforcement costs at the site to $55 million. See id.In settlement negotiations, the government assigned PRPs to
two groups according to their estimated share of liability, with
settlement amounts based on the strength of the evidentiary case
against each party. Eighty PRPs settled claims by joining one of five
7 In August 1997, Judge Pettine took inactive senior status, and
the case was transferred to Judge Torres, who then presided over Phase
III of the litigation.
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partial consent decrees, which also afforded the parties contribution
protection against other PRPs. The first and largest of these consent
decrees involved the United States, UTC, and 49 third and fourth-party
defendants. See id. at 185. The parties agreed to pay $13.5 million
plus $440,000 in oversight costs, of which UTC would pay $2.8 million.
In addition, UTC agreed to perform the soil cleanup for the Davis site.
While the cost of the soil work was estimated at $14 million, UTC
agreed to accept the risk that the work might in fact cost more. UTC's
liability is reduced, however, by the other partial consent decrees,
which provide for payments to UTC of up to $5.364 million. The
district court approved the consent decrees in 1998 and 1999, finding
them fair, both procedurally and substantively, reasonable, and
consistent with CERCLA's objectives.8 Soil remediation efforts began
in July 1997. United States v. Davis, 31 F. Supp. 2d 45, 52 (D.R.I.
1998) (Davis IV). To avoid recontamination, the groundwater cleanup
will begin after the soil work is completed.
Several defendants chose not to participate in any of the
consent decrees. UTC prepared to try its claims for contribution
against the non-settling defendants, including William Davis as owner
and operator of the Davis site; Eleanor Davis as owner;
8The consent decrees are described in greater detail in Part II
of this opinion.
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Chemical Waste Removal (CWR),9 Chemical Control Corporation (CCC),10 and
Macera Brothers Container Service, Inc. (Macera) as transporters;11 and
Acco Bristol Division of Babcock Industries (Acco), Ashland Chemical,
Inc. (Ashland), Gar Electroforming Division (Gar), a/k/a Black &
Decker,12 Perkin-Elmer Corporation (PE), Thiokol, a/k/a/ Morton
International Inc. (Morton), and the City of New Jersey as arrangers.13
Before trial began, the district court said that the trial would
adjudicate UTC's "request to determine the 'equitable contribution
share of liability' for past and future response costs at the Site."
However, when UTC admitted at the start of trial that it had not begun
to incur costs for soil remediation by the close of discovery, the
9
UTC also brought claims against CWR's principal, Emanuel Musillo,
and against CWR's corporate predecessor and its principal, Drum
Automation and Michael Musillo. The district court found Emanuel
Musillo liable with CWR. The court dismissed the claims against Drum
Automation and Michael Musillo. UTC did not appeal these rulings.
10UTC also brought claims against CCC's principal, William
Carracino. The district court found Carracino liable with CCC.
11
UTC also brought claims against BFI Waste Systems of North
America as Macera's corporate successor.
12UTC brought claims against Black & Decker and Electroformers as
Gar's possible corporate successors. The district court found Black &
Decker liable as Gar's successor and dismissed the claims against
Electroformers. Black & Decker appeals that ruling, as we discuss
infra.
13UTC brought claims against several other defendants which the
district court dismissed. UTC did not appeal these rulings.
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court narrowed the trial's focus to UTC's right to contribution for
future rather than past costs. It defined future costs as those that
UTC had incurred since the close of discovery and those that it would
incur as it completed the soil remediation.
On September 28, 1998, following a 26-day bench trial, the
court partially granted a motion for judgment made by some of the
defendants based on partial findings pursuant to Federal Rule of Civil
Procedure 52(c). The court ruled that while Macera had transported
hazardous waste to the Davis site, it was not liable as a matter of law
because UTC failed to prove that Macera "selected" Davis as a disposal
site, as § 9607(a)(4) requires to hold a transporter of hazardous waste
liable. See United States v. Davis, 20 F. Supp. 2d 326, 334 ( Davis
III). The court also dismissed UTC's case against the City of New
Jersey, finding that the city was immune from liability under 42 U.S.C.
§ 9607(d)(2). Id. at 335.
On December 15, 1998, the court issued a declaratory judgment
holding appellants Ashland, Acco, Gar, Morton, and PE liable for
arranging for the disposal of their waste at the Davis site.14 With the
exception of Morton, the court allocated to each defendant a share of
responsibility for UTC's future cleanup costs. Davis IV, 31 F. Supp.
14The court also found William Davis liable as an owner-operator,
Eleanor Davis liable as an owner, and CWR, CCC, and Capuano liable as
transporters. Those parties have not appealed the judgments against
them.
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2d at 69.
The appeals currently before us result from the district
court's entry of the Phase III consent decrees, its rulings for some of
the defendants pursuant to Rule 52(c), and its declaratory judgment in
favor of UTC. Ashland appeals the district court's approval of the
consent decrees. Ashland, Acco, Gar, Morton, and PE appeal several
aspects of the declaratory judgment. Specifically, four appellants
(Ashland, Acco, Gar, and PE) argue that UTC failed to prove by a
preponderance of the evidence that they arranged for the disposal of
waste at the Davis site. These four appellants also argue that the
district court abused its discretion by admitting and crediting the
testimony of CWR driver Wilbert Jones. Acco and Gar also argue that
the district court abused its discretion by excluding a "Master Chart"
of the parties' claims compiled by UTC's lawyers to prepare the witness
designated by UTC to testify on behalf of the corporation pursuant to
Federal Rule of Evidence 30(b)(6). Three appellants (Ashland, Acco,
and Gar) contend that UTC failed to prove by a preponderance of the
evidence that their respective waste contained hazardous substances and
so caused the incurrence of cleanup costs. These three appellants also
argue that the court's entry of a declaratory judgment was improper.
Appellant Gar, a/k/a Black & Decker, challenges the court's finding of
corporate successor liability. Finally, UTC contests the court's
dismissal of the case against the City of New Jersey and Macera, and
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its ruling that UTC was solely responsible for $6 million in government
enforcement costs incurred during Phase I and II of the litigation. We
will discuss each of these challenges in turn.
II. The Consent Decrees
A. Background
1. Consent Decree I
Ashland's appeal focuses on Consent Decree I, the primary
settlement between the United States and UTC, which began consent
decree negotiations with the United States as an alternative to
pursuing an appeal of the judgment in Davis I. In discussions with
UTC, the EPA assigned possibly settling PRPs (generators and
transporters of waste) to two groups, "carve-out" and "non-carve-out."
The carve-out entities were deemed primarily responsible for the waste
at the Davis site, and so were compelled to negotiate individual
settlements with the United States. Non-carve-out third parties were
encouraged to negotiate a possible global settlement among themselves,
with the assistance of liaison counsel.
On July 14, 1995, following the Phase I settlement with four
parties, the United States offered to settle with all remaining parties
for about $16 million plus the performance of site soil cleanup using
low-temperature thermal desorption technology. UTC provisionally
agreed to the United States's settlement offer and pursued its
contribution claims. Ultimately, UTC, carve-outs Olin Hunt and
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American Cyanamid, and about fifty other parties joined this
settlement. The parties paid a total of $13.5 million to the United
States, plus $440,000 in oversight costs. Of that amount, Olin Hunt
and American Cyanamid paid $2.75 million each (with some portion going
to resolution of state claims), non-carve-out parties paid a total of
$7.2 million, and UTC paid the remaining balance, about $2.8 million.15
Furthermore, UTC took responsibility for the entire expense
of site soil remediation, an estimated cost of about $14 million.
Under the settlement, UTC and the United States each receive half of
future contribution recoveries, with UTC's recovery capped at $5.364
million after deducting 15 percent of contribution recoveries for
attorneys' fees incurred in contribution litigation after March 1996.
Finally, the settling parties received complete contribution protection
from claims by other PRPs. Separate recoveries by the United States
would not be subject to contribution sharing.
While the predicted cost of cleaning up the Davis site has
varied over the years, the most recent estimate, from 1997, took into
account new remediation technology and set the total at $55 million.
This amount guided the United States in determining the settlement
amounts. In addition, the allocations to Clairol and the other parties
15The allocation among the non-carve-outs was initially
confidential, though the payment amounts have now been disclosed.
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in the earlier Phase I, $5.625 million settlement provided a
"benchmark" for the amounts requested from potential settlors in the
later consent decrees. Davis II, 11 F. Supp. 2d at 191.
2. Consent Decrees II, III, IV and Capuano
The remaining consent decrees included 27 additional parties
and involved UTC's settlement of claims for contribution from other
PRPs, resulting in some additional payments to the United States
pursuant to UTC's agreement with the United States in Consent Decree I.
In Consent Decree II, 23 parties paid a total of $4.135 million, with
individual party liability detailed in briefs to the district court.
Consent Decree III involved National Starch, which paid $5 million.
Consent Decree IV involved a $150,000 payment by Swan Engraving and a
$50,000 payment by Power Semiconductors. All parties to these
settlements received complete contribution protection from future
claims. Finally, Capuano Brothers paid $200,000 to the government,
plus a like amount for settlement of cleanup costs at another Superfund
site.
3. The District Court Approval
To assist in its assessment of Consent Decree I, t he district
court held a two-day hearing to determine whether the proposed
settlement was fair, both procedurally and substantively, reasonable,
and consistent with CERCLA's objectives. United States v. Cannons
Eng'g Corp., 899 F.2d 79, 84 (1st Cir. 1990). Procedurally, the court
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found that "[t]he negotiations were conducted openly and all parties
were given an opportunity to participate." Davis II, 11 F. Supp. 2d at
189. Substantively, the court concluded that the consent decree met
all requirements because the "proposed settlement reflects a rational
method of allocating liability in a manner that reasonably approximates
each party's share of responsibility; the method is applied
evenhandedly with respect to all PRP's and sufficient information is
presented to enable the Court to determine whether that has been done."
Id. at 192.
In assessing the reasonableness of the consent decree, the
court's chief concern was "whether the public can be adequately
compensated by a settlement in which the United States receives only a
portion of the remediation cost from a party previously adjudged liable
for the entire cost," id. at 186, a reference to the release of UTC
from the Phase I judgment. According to the district court, under the
terms of the settlement the United States would receive $27.5 million,
plus the $5.8 million from the original defendants, leaving a $21.7
million shortfall in compensation for the projected cost of the
cleanup. This issue distinguished the Davis case from others in which
the United States settled before judgment. "In those cases,
compromising for a fraction of the response costs with a PRP that is
potentially liable for the entire cost usually is justifiable on the
ground that litigation might result in the United States recovering no
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response costs at all." Id. at 192.
The court thus framed the reasonableness question in terms
of "whether the amount by which the judgment has been discounted
reasonably reflects the risk of reversal [on appeal]," and called this
"a very close question." Id. at 193. The court acknowledged some
"remaining, albeit diminished, litigation risk associated with the
claim against UTC." Id. The court also suggested that concern about
releasing UTC from the judgment was mitigated by the fact that the
United States could still sue the non-settlors for the $21.7 million
shortfall, but recognized that this course of action seemed to involve
"much greater litigation risk" than simply pursuing the judgment
against UTC. Id.In resolving the issue, the court considered factors beyond
an assessment of litigation risks. The court noted that "the financial
obligations imposed on UTC are considerably greater than the
obligations assumed by the other 'carve-out' settlors," reinforcing
UTC's substantial responsibility. Id. It also noted that "given the
deference accorded to the EPA's judgment in such matters, it cannot be
said that the proposed discount is unreasonable." Id. The court said
that the consent decree avoided an unduly harsh result for UTC, whereas
the judgment would have "saddled [it], unfairly, with liability for
remediation costs that far exceed its fair share." Id. Acknowledging
that UTC could pursue contribution actions against other PRPs, the
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court still concluded that the consent decree was reasonable given the
great "difficulty of establishing entitlement to contribution." Id.Finally, the court found the consent decree to be consistent with the
statute because it advanced "the overriding goal of promptly and
efficiently cleaning up hazardous waste sites." Id.Pursuant to its thorough opinion, the district court approved
Consent Decree I on February 13, 1998, and entered final judgment on
December 9, 1999. Consent Decrees II, III, IV and the Capuano decree
were each summarily approved subsequently. Final judgment was also
entered on these decrees in December 1999. On appeal, Ashland, a non-
settling PRP, lodges numerous objections to the approval of the consent
decrees, including a jurisdictional objection. We assess these
arguments.
B. Reviewing the Approval of the Consent Decrees
1. Standard of Review
Considerable deference is involved in the review of CERCLA
consent decrees. Indeed, appellate review is "encased in a double
layer of swaddling." Cannons, 899 F.2d at 84. First, there is
deference to the administrative agency's construction of the
settlement. "That so many affected parties, themselves knowledgeable
and represented by experienced lawyers, have hammered out an agreement
at arm's length and advocate its embodiment in a judicial decree,
itself deserves weight in the ensuing balance." Id. at 84. Second, the
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appellate court can only review a district court's approval of a
consent decree for abuse of discretion, characterized by "a serious
error of law" or a "meaningful lapse of judgment." United States v.
Charles George Trucking, 34 F.3d 1081, 1085 (1st Cir. 1994); United
States v. DiBiase, 45 F.3d 541, 544 (1st Cir. 1995). "Because an
appellate court ordinarily cannot rival a district court's mastery of
a factually complex case -- a mastery often, as in this instance,
acquired through painstaking involvement over many years -- the
district court's views must also be accorded considerable respect."
Charles George, 34 F.3d at 1085. This double deference "places a heavy
burden on those who purpose to upset a trial judge's approval of a
consent decree." Cannons, 899 F.2d at 84.
2. Case or Controversy
As a preliminary matter, Ashland contends that the district
court had no jurisdiction under Article III to approve the consent
decrees because, "with the exception of UTC, the U.S. never sued any of
the third or fourth-party defendants settling in Consent Decrees I-IV.
Moreover, approximately 34 entities who were signatories to Consent
Decree I were never sued by any party to this action." In Ashland's
view, this circumstance means that there was no "case or controversy"
to be resolved by the district court. We conclude that, even if there
were parties not sued by the United States involved in the consent
decrees, their inclusion would be permissible because the Supreme Court
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has allowed unpleaded claims to be part of consent decrees, and thus,
there is no "case or controversy" concern.
In Local 93, Int'l Ass'n of Firefighters v. City of
Cleveland, 478 U.S. 501, 525 (1986), the Supreme Court ruled that a
consent decree must (1) spring from and serve to resolve a dispute
within the court's subject matter jurisdiction; (2) come within the
general scope of the case based on the pleadings; and (3) further the
objectives of the law on which the claim is based. Although
Firefighters involved a challenge to the scope of a consent decree
rather than an Article III case or controversy argument, satisfying the
criteria set forth in that case resolves any case or controversy claim.
The district court found that the criteria were satisfied by Consent
Decree I:
The United States's claims against the settling
third and fourth-party defendants spring from and
fall well within the scope of the controversy
described in the pleading; . . . Furthermore, the
United States and all of the settling PRP's are
parties to the action16 and the consent decree
resolves the dispute among them. Finally, . . .
approval of the consent decree also furthers the
objectives of CERCLA by facilitating the prompt
and efficient remediation of a major hazardous
waste site.
Davis II, 11 F.Supp. 2d at 188.
16We understand the court's reference to "parties to the action"
to include those initially sued by the United States, defendants to the
UTC contribution claims, as well as the numerous parties named in suits
among the third and fourth-party defendants.
- 23 -
We have applied the Firefighters test in the CERCLA context
before. In Charles George, we found that claims not expressly set out
in the pleadings may be addressed in a consent decree as long as they
fall within the pleadings' general scope. 34 F.3d at 1089-91.
Likewise, unpleaded claims that could not be brought against third-
party defendants pursuant to a case management order (CMO) were
appropriately included in the consent decree. Id. at 1091. Here, the
purported failure to file complaints contemporaneous with the consent
decrees does not defeat the legitimacy of the settlements. As we wrote
in Charles George:
[T]he Supreme Court has made clear that there is
no per se prohibition against consent decrees
that exceed the possible bounds of a decision
issued directly by the trial court. Because a
consent decree is animated not only by the
parties' legal claims but also by the parties'
consent, a court is 'not necessarily barred from
entering a consent decree merely because the
decree provides broader relief than the court
could have awarded after trial.'
Id. at 1091 (quoting Firefighters, 478 U.S. at 525).
The district court allowed the inclusion of parties not sued
by the United States in the consent decrees, finding that UTC's
contribution claims "are based on the same body of evidence and raise
the same issues as the United States' claims against the settling third
and fourth-party defendants." Davis II, 11 F. Supp. 2d at 188. Like
a settlement that is greater in scope than the originally pled claims,
the inclusion of various third and fourth-party defendants, as well as
- 24 -
interested non-parties, is permissible pursuant to Firefighters.17
Indeed, any conclusion to the contrary would disrupt the goals of
CERCLA, which seeks early settlement with as many PRPs as possible to
further expeditious remediation.
3. Fairness
a. Procedural
Assessing fairness in the CERCLA settlement context has both
procedural and substantive dimensions. "To measure procedural
fairness, a court should ordinarily look to the negotiation process and
attempt to gauge its candor, openness, and bargaining balance."
Cannons, 899 F.2d at 86. The EPA has ample authority to structure its
settlement negotiations, including "broad discretion to structure
classes of PRPs." Id. A finding of procedural fairness may also be an
acceptable proxy for substantive fairness, when other circumstantial
indicia of fairness are present. See Charles George, 34 F.3d at 1089.
Ashland asserts that the consent decrees failed to meet the
criteria of procedural fairness because the establishment of party
categories inhibited the openness of negotiations; discovery relating
to the settlement terms was inadequate; and the United States abdicated
to UTC its responsibility to conduct the negotiations under CERCLA.
17 Ashland further contests the inclusion of "successors in
interest" and "corporate affiliates" within the scope of Consent Decree
I. Given the potential liability of such entities, this inclusion is
appropriate.
- 25 -
Ashland also argues that information fundamental to evaluation of the
consent decrees was not disclosed by the United States, including: (1)
the United States' total past and estimated future costs of
remediation; (2) the strength of the United States' case against each
settlor; (3) the type, volume and toxicity of the waste for which each
settlor was responsible and a correlation to site cleanup costs; (4)
the formula by which the settlement amounts were calculated, and
evidentiary support for the formula.
These arguments are unpersuasive. All identified players in
the hazardous waste site were notified of early opportunities for
settlement with the United States, and later, with UTC. There is no
reason to doubt that the consent decrees were the result of "arm's
length, good faith bargaining" between sophisticated parties. United
States v. Comunidades Unidas Contra la Contaminacion, 204 F.3d 275, 281
(1st Cir. 2000). PRPs were offered the assistance of a magistrate
judge and an alternative dispute resolution administrator in the
negotiation of their settlements. In addition, the early
classification of carve-outs and non-carve-outs was an attempt at
settlement management within the discretion of the United States.
The district court also found no breach of the requirement
for public disclosure, concluding that the parties offered "facts
sufficient to enable one to determine whether" the terms of the
agreement were fair. Davis II, 11 F. Supp. 2d at 194. The proposed
- 26 -
decrees lodged with the court "set[] forth, at length, all of the terms
of the settlement." Id. They were published in compliance with 42
U.S.C. § 9622(d)(2)(A)-(B), making the decrees available to non-parties
and the public for comment in a timely manner. Furthermore, the
district court noted that "there is no indication that the United
States misrepresented or withheld any material facts." Id. at 189.
There is no error in any of these findings. Ashland's argument that
the identified information had to be available is not supported by the
law, which makes significant allowances for gaps in information, given
the sometimes impossible task of deriving this data.
b. Substantive
Substantive fairness involves concepts of corrective justice
and accountability, concentrating on "the proposed allocation of
responsibility as between settling and non-settling PRPs." Charles
George, 34 F.3d at 1088. "[T]he proper way to gauge the adequacy of
settlement amounts to be paid by settling PRPs is to compare the
proportion of total projected costs to be paid by the settlors with the
proportion of liability attributable to them." Id. at 1087. Ashland
asserts that the formula used by the government to assess liability
among the carve-out and non-carve-out parties, settling or not, was
arbitrary and capricious, unrelated to comparative fault and
inconsistently applied across consent decrees.
The law on this issue is clear. The EPA formula should be
- 27 -
upheld "so long as the agency supplies some plausible explanation for
it, welding some reasonable linkage between factors it includes in its
formula or scheme and the proportionate shares of the settling PRPs."
Cannons, 899 F.2d at 87. In assessing the formula applied, the quality
of the information available to the government and settling parties
informs the fairness analysis because data on the total extent of harm
and the respective liabilities of various PRPs are often unavailable.
See id. at 88. Such difficulties will not preclude a court from
entering a consent decree. See Charles George, 34 F.3d at 1089. The
calculation of liability and the allocation of that responsibility is
specially within the scope of the Agency's and parties' expertise. "As
long as the data the EPA uses to apportion liability for purposes of a
consent decree falls along the broad spectrum of plausible
approximations, judicial intrusion is unwarranted . . . . Having
selected a reasonable method of weighing comparative fault, the agency
need not show that it is the best, or even the fairest, of all
conceivable methods." Cannons, 899 F.2d at 88.
In this case, the EPA assessed liability based on "its
estimate of the volume of waste attributable to each PRP." Davis II,
11 F. Supp. at 190. The EPA also considered the strength of the cases
against the respective PRPs, taking "into account that there was direct
and credible evidence linking some of the PRP's to the Site and that
the evidence with respect to other PRP's was almost entirely
- 28 -
circumstantial and varied in probative value." Id. The district court
found the interplay of these factors in this case to be "rational" and
"especially appropriate in cases like this where the wastes have been
intermingled and it is virtually impossible to attribute discrete
portions of the cleanup costs to particular wastes." Id. The court
further observed that, in accord with the precedent, "assessing
relative responsibility is an imperfect process because it requires
subjective judgments based on evidence that is not completely developed
and may be disputed. However, . . . the evidence need not be
exhaustive or conclusive in order to determine whether a proposed
settlement is substantively fair." Id. at 191.
We agree with the district court's analysis supporting the
substantive fairness of the liability allocation among carve-outs and
non-carve-outs, settlors and non-settlors alike. In arguments before
the district court, the government attorney and others noted that the
settlements involved "roughly half of the parties paying somewhat more
than half of the costs." In its decision, the district court stressed
the parity of the amounts paid by settling PRPs and non-settling PRPs,
both carve-outs and non-carve-outs. Davis II, 11 F. Supp. 2d at 191.
The court wrote:
Comparing the amounts paid by the settling
'carve-out' PRP's to the Clairol benchmark and
to the demands made upon the non-settling 'carve-
out' PRP's supports the conclusion that the
proposed settlement apportions liability in a
manner that roughly approximates a rational
- 29 -
estimate of the relative responsibilities borne
by both the settling and non-settling PRP's.
Id. at 190.
The court proceeded to compare the settlement offered to
American Cyanamid and Olin Hunt with the settlements paid in the
Clairol agreement and demands made of eight non-settling carve-out
PRPs, all of which fell between $2.75 million and $3 million. See id.
at 191. Interestingly, the court also noted that the government
demanded $8.25 million from the State of New Jersey, BFI and Ashland,
averaging to a total of $2.75 million each, though Ashland "was
expected to pay a larger share because EPA determined that Ashland
produced a high volume of hazardous waste and that a significant amount
of evidence existed linking Ashland to the Davis site." Id. at 191
n.7. Finally, the court noted "an even closer correlation between the
amounts paid by settling 'non-carve-out' PRP's and the amounts demanded
from non-settling 'non-carve-out' PRP's" -- $13.5 million demanded of
eighty-five non-carve-out PRPs, averaging $158,800 apiece, compared
with the $7.2 million proposed settlement with forty-seven non-carve-
out PRPs, amounting to $152,200 each. Id. at 191. The court also
pointed out that the allocation assessed to UTC was a considerably
greater financial obligation than that imposed on any non-settling
carve-out party. See id.In addition, the ultimate measure of accountability "is the
extent of the overall recovery, not the amount of money paid by any
- 30 -
individual defendant." Charles George, 34 F.3d at 1086. Accordingly,
a consent decree need not specify each generator's or transporter's
degree of culpability. It is appropriate for classes of PRPs to be
assigned aggregate settlement amounts to allocate among themselves.
See id. In Charles George we said: "Realistically, a government
agency, in the midst of negotiations, is in no position to put so fine
a point on accountability. We, therefore, endorse, in general, EPA's
practice of negotiating with a representative group of PRPs and then
permitting the group members to divide the burden of the settlement
among themselves." Id.Ashland's challenge to the group allocations in these
settlements is meritless. Our prior observation remains pertinent:
"[A]s is true of consent decrees generally, they are built upon
compromise and compromise in turn is a product of judgment."
Comunidades Unidas, 204 F.3d at 282. We agree with the district
court's conclusion that a "rational" method of allocating liability was
"evenhandedly" applied. Davis II, 11 F. Supp. 2d at 192.
4. Reasonableness
In considering the reasonableness of Consent Decree I, the
district court addressed the novel issue of whether the public can be
adequately compensated by a settlement in which the United States
receives only a portion of the remediation cost from a party previously
adjudged liable for the entire cost. See Davis II, 11 F. Supp. 2d at
- 31 -
186. Arguing that adequate compensation is not possible under such
circumstances, Ashland asserts that the consent decrees do not comport
with the objectives of CERCLA.
The assessment of reasonableness focuses on several elements:
the effectiveness of the decree as a vehicle for cleaning the
environment; providing satisfactory public compensation for actual (and
anticipated) costs of remediation; and accounting for the relative
strength of the parties' litigating positions and foreseeable risks of
loss. See Cannons, 899 F.2d at 89-90. In making these assessments, a
court must once again allow for the agency's lack of "mathematical
precision," as long as the figures derive from a plausible
interpretation of the record. Id. at 90. Furthermore, effective
remediation demands a more pragmatic meaning than whether the
settlement meets a scientific ideal or approximates the projected costs
of cleanup. See Charles George, 34 F.3d at 1085; United States v.
Charter Int'l Oil Co., 83 F.3d 510, 521 (1st Cir. 1996) ("A district
court's reasonableness inquiry, like that of fairness, is a pragmatic
one."); Comunidades Unidas, 204 F.3d at 281.
Although the UTC allocation in Consent Decree I does not pay
for the entire expense of the cleanup, UTC assumed the full cost of
soil remediation (mitigated by contribution from later settlors), even
if that estimated cost ultimately exceeds projections. Furthermore,
the consent decrees staved off litigation risks associated with the
- 32 -
settling parties, including a possible appeal by UTC of the judgment
against it. See Davis II, 11 F. Supp. 2d at 192. In addition, as the
district court observed, "fundamental fairness prohibits the imposition
of liability that is totally disproportionate to UTC's share of
responsibility." Id. at 193.
Discounts on maximum potential liability as an incentive to
settle are considered fair and reasonable under Congress's statutory
scheme. See DiBiase, 45 F.3d at 546; see also Interim CERCLA
Settlement Policy, Environmental Protection Agency, 50 F.R. 5034
(February 5, 1985). A PRP's assumption of open-ended risks, such as
the full cost of a component of the cleanup, may merit a discount. See
Cannons, 899 F.2d at 88. Also, party-specific discounts may reflect
the chances of the United States's success in litigation against a
given PRP. See id. It is appropriate "to factor into the equation any
reasonable discounts for litigation risks, time savings, and the like
that may be justified." Charles George, 34 F.3d at 1087.
The United States received a significant sum from the initial
settlors, Consent Decree I settlors and contributions from settlors in
Consent Decrees II-IV and Capuano. Indeed, the United States fulfilled
60 percent of its $55 million claim through the consent decrees,
including the earlier $5.625 million settlement with Clairol and other
parties. The United States also retains the option of pursuing future
cost-recovery actions against other non-settling PRPs. In light of the
- 33 -
role of the consent decrees in expediting the remediation work, the
substantial cost recovery by the United States, and the strength of the
cases against the various PRPs, we agree with the district court that
the consent decrees met the test of reasonableness.
5. Statutory Fidelity
The purposes of CERCLA include expeditious remediation at
waste sites, adequate compensation to the public fisc and the
imposition of accountability. "[I]t would disserve a principal end of
the statute -- achievement of prompt settlement and a concomitant head
start on response activities -- to leave matters in limbo until more
precise information [is] amassed." Cannons, 899 F.2d at 88; see also
DiBiase, 45 F.3d at 545 ("[S]ettlements reduce excessive litigation
expenses and transaction costs, thereby preserving scarce resources for
CERCLA's real goal: the expeditious cleanup of hazardous waste
sites."). Additionally, there is a "strong public policy in favor of
settlements, particularly in very complex and technical regulatory
contexts." Comunidades Unidas, 204 F.3d at 280. Importantly, even
though it was not obligated to do so, UTC began the process of remedial
soil treatment in July 1997, well before the approval of Consent Decree
I. This task included: excavation, removal and proper disposal of more
than 1,000 drums of waste and 10,000 small jars, containers and vials;
removal of more than 750,000 tires; and sampling and chemical analysis
of over 65,000 cubic yards of soil. This head-start on repair of a
- 34 -
hazardous waste site is the sort of good-faith cooperation that CERCLA
seeks to encourage via settlement. To find this progress inadequate
would frustrate the statute's purpose.
In asserting that the consent decrees are not faithful to the
purposes of CERCLA, Ashland focuses on the contribution protection
afforded the parties to the consent decrees, fearing that a handful of
non-settlors (i.e., Ashland and the other appellants), foreclosed from
contribution actions because they did not join the consent decrees,
could be held liable for a disproportionate share of the $21.7 million
in as-yet unrecovered costs if the United States pursued them in cost
recovery actions. CERCLA provides that "[a] person who has resolved
its liability to the United States or a State in an administrative or
judicially approved settlement shall not be liable for claims for
contribution regarding matters addressed in the settlement." 42 U.S.C.
§ 9613(f)(2); see also 42 U.S.C § 9622(f)(2). Despite this "matters
addressed in the settlement" language of the statute, Ashland says that
the "matters addressed" language of the decrees here is overreaching
because they include, quoting the consent decrees, "response costs
incurred and to be incurred by any person or entity other than the
United States for response actions related to the site or identified in
the remedy." Ashland complains that, "[a]s written, the 'matters
addressed' provision of three partial consent decrees have been
expanded to include all costs, whether the costs are incurred by the
- 35 -
U.S. or by a private party. This is clearly impermissible under
CERCLA." Facing exposure to performance of the groundwater remedy,
which may represent 40 percent of the total site costs, Ashland worries
that parties like itself will bear disproportionate liability because
they are unfairly barred from seeking contribution from earlier-
settling parties.
The practice of encouraging early settlements by providing
broad contribution protection is provided by statute. 42 U.S.C. §
9613(f)(2); see also Charter, 83 F.3d at 522; UTC v. Browning-Ferris
Ind., Inc., 33 F.3d 96, 103 (1st Cir. 1994) ("This paradigm is not a
scrivener's accident."). CERCLA also seeks to induce settlements at
higher amounts by allowing settlors to seek contribution from those who
have not yet settled. See 42 U.S.C. § 9613(f)(3)(B); Charter, 83 F.3d
at 522. Still, EPA policy encourages the court reviewing a consent
decree incorporating contribution protection to seek "a demonstration
that this result is fair to potential contribution plaintiffs whose
rights would be extinguished." DOJ/EPA Memorandum, Defining "Matters
Addressed" in CERCLA Settlements, March 14, 1997. In a case such as
this, where UTC assumes an open-ended cost for soil remediation, and
takes the lead in coordinating settlements and beginning the cleanup
effort, the benefit of contribution protection is appropriate. Also,
as UTC points out in its brief, Ashland's preoccupation with the
potential of disproportionate liability "ignores the fact that UTC,
- 36 -
which was allocated responsibility for 1.54 percent of the liability by
the trial court, will perform the source control remedy, which will
amount to over one-fourth of the total costs of remediating the site."
UTC draws from this fact an appropriate conclusion: "This comparison
shows that CERCLA can impose harsh results on PRPs; it also shows that
these contribution defendants [Ashland and other non-settlors] may bear
a burden roughly comparable to that of UTC."
The point we made in an earlier decision remains apt: "As
to the extinguished contribution claims of non-settlors or later round
settlors, protection against those claims was a reasonable benefit [the
settlor] acquired in exchange for settling before those others."
Charter, 83 F.3d at 522. The result of non-settlors possibly bearing
disproportionate liability for the open-ended cost of remediation is
therefore consistent with the statute's paradigm, which encourages the
finality of early settlement. See Browning-Ferris, 33 F.3d at 103.
6. Unconstitutional Taking
To the extent that CERCLA authorizes the contribution
protection to which Ashland objects, Ashland asserts that this
protection could result in an unconstitutional taking of the
protectable property interests of non-settling parties because they
will be prohibited from seeking contribution from earlier-settling
parties. Indeed, Ashland points out, CERCLA recognizes that in a
settlement "limiting any person's right to obtain contribution from any
- 37 -
party," the result could be "a taking without just compensation" under
the Fifth Amendment. 42 U.S.C. § 9657.
Ashland's argument in support of this takings claim is so
perfunctorily developed that we deem it unworthy of response. See
United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990) ("[I]ssues
adverted to in a perfunctory manner, unaccompanied by some effort at
developed argumentation, are deemed waived."). In support of its
takings argument, set forth in two-and-a-half pages at the end of an
85-page brief, Ashland relies entirely on a brief description of the
recent Supreme Court decision in Eastern Enterprises v. Apfel, 524 U.S.
498 (1998), a case in which a deeply divided Supreme Court struck down
retroactive application of the Coal Industry Retiree Health Benefit Act
of 1992. The takings analysis put forth by the plurality opinion in
that case did not command a majority of the court, a fact which, as the
government notes in its brief, severely limits the precedential value
of that takings analysis. See Hertz v. Woodman, 218 U.S. 205, 213-14
(1910) ("[T]he principles of law involved not having been agreed upon
by a majority of the court sitting prevents the case from becoming an
authority for the determination of other cases, either in this or in
inferior courts.") As Justice Kennedy noted in his concurring opinion
in Eastern Enterprises, where he disavowed the takings analysis of the
plurality: "Cases attempting to decide when a regulation becomes a
taking are among the most litigated and perplexing in current law."
- 38 -
524 U.S. at 541. We will not assay the takings issue on the basis of
the insubstantial argument put forth by Ashland.18
III. The Declaratory Judgment
A. Background on CERCLA Contribution Actions
When an innocent party, usually the government, brings a cost
recovery action under § 9607, CERCLA imposes strict liability for the
costs of cleanup on a party found to be an owner or operator, past
operator, transporter, or arranger. See Acushnet Co. v. Mohasco Corp.,
191 F.3d 69, 74 (1st Cir. 1999).19 A party found liable under § 9607
may in turn bring an action for contribution against other polluters
under § 9613(f). In other words, while CERCLA allows for full recovery
of costs from a party sued successfully under § 9607, it also permits
that party to seek contribution from other parties that have helped
create a hazardous waste problem. See Control Data Corp. v. S.C.S.C.
Corp., 53 F.3d 930, 936 (8th Cir. 1995). The statute thus provides
that a court may, in its discretion, "allocate response costs among
liable parties using such equitable factors as the court determines are
appropriate." 42 U.S.C. § 9613(f). As the Ninth Circuit has said,
"[a] PRP's contribution liability will correspond to that party's
18We note that the Sixth Circuit recently rejected a takings
argument addressed to CERCLA and premised on Eastern Enterprises in
Franklin County Convention Facilities Auth. v. Am. Premier
Underwriters, Inc., 240 F.3d 534, 552 (6th Cir. 2001).
19 A few affirmative defenses are available, but they are
difficult to satisfy. See Acushnet, 191 F.3d at 74.
- 39 -
equitable share of the total liability and will not be joint and
several." Pinal Creek Group v. Newmont Mining Corp., 188 F.3d 1298,
1301 (9th Cir. 1997).
The standard for contribution liability is the same as the
standard for cost recovery liability. See Acushnet, 191 F.3d at 75.
A plaintiff seeking contribution under § 9613(f) must prove that (1)
the defendant falls within one of the four categories of covered
entities (i.e. is a current or past owner or operator, a transporter,
or an arranger); (2) a "release or threatened release" of hazardous
waste involving the defendant's facility occurred; (3) the release or
threatened release caused the incurrence of response costs by the
plaintiff; and (4) the plaintiff's costs were "necessary costs of
response . . . consistent with the national contingency plan." 42
U.S.C. § 9607.20B. The District Court's Declaratory Judgment Ruling
The district court found that UTC had unquestionably proven
that the Davis site was a hazardous waste facility, that a release of
hazardous waste had occurred, and that this release caused the
incurrence of response costs because of the necessary cleanup. The
20 The National Contingency Plan promulgated by the EPA, 40 C.F.R.
pt. 300 (1988), "establish[es] procedures and standards for responding
to releases of hazardous substances." Because the district court
reserved challenges to UTC's specific expenditures for later
proceedings, the compliance of UTC's cleanup plan with the National
Contingency Plan is not at issue in this case.
- 40 -
court thus focused on the only remaining issue for CERCLA liability:
"[W]hether the defendants are liable for those response costs on the
grounds that they either operated the facility, transported the
hazardous substances to the site, or arranged for the hazardous
substances to be disposed of at the Site." Davis IV, 31 F. Supp. 2d at
61. Since each of the appellants was found to be an arranger, we focus
on that aspect of the court's ruling.
The court began by considering the evidence that CWR, the
Bridgeport, Connecticut waste transport company used by Ashland, Acco,
Gar, and PE, disposed of waste at the Davis site. The court found that
in 1977, "all of CWR's waste was taken, initially, to Sanitary
Landfill," another Rhode Island disposal site, but that sometime after
May 1977, Anthony and Jack Capuano, owners of Sanitary Landfill, began
diverting some of CWR's waste to the Davis site. Id. at 53. Based on
receipts kept by William Davis and offered into evidence by UTC, the
court found that "the Capuanos directed CWR drivers to the Davis Site
on fifteen separate occasions." Id. The Davis receipts show that
these CWR deliveries took place between May 13 and July 7.21
The court said that CWR had two drivers, Wilbert Jones and
Johnny Granfield, who collected 55-gallon drums of waste from
21Davis testified that dumping occurred on his property between
1976 and the first part of 1977. However, he was only able to locate
receipts for the period between January 10, 1977 and July 7, 1977. As
a result, that is the time period relevant to the district court's
findings.
- 41 -
customers. Both Jones and Granfield sometimes drove a 40-foot flatbed
truck that carried a full load of 79 drums and was "used to haul drums
to Rhode Island." Id. at 52-53. Based on the testimony of Jones and
of Emanuel and Michael Musillo, the principals of CWR, the court made
findings about CWR's pickup and disposal practices:
If a full load was collected early in the day,
the drums, sometimes, would be taken directly to
Sanitary Landfill. Usually, however, the truck
would return to CWR, and the load of drums would
be taken to Sanitary Landfill on the following
day. If less than a full load was collected, the
drums would be kept at CWR until seventy-nine
drums had accumulated. Those drums then would be
loaded onto the flatbed and driven to Sanitary
Landfill.
Drums were collected with such regularity that
they never remained on CWR's premises for more
than three days.
Id. at 53.
Following the theory that CWR disposed of waste within three
days of collecting it from a customer, the district court matched the
dates of CWR waste pickups from appellants Ashland, Acco, Gar, and PE
to the dates of waste deliveries to the Davis site. CWR kept bills of
lading that recorded the dates on which it picked up wastes from
customers. Some of the appellants kept parallel invoices. William
Davis's receipts included the dates of waste deliveries. Based on this
evidence, the district court determined when an arranger's waste was
picked up within three days of a delivery to the Davis site. The court
then concluded that it was "reasonable to infer" that this waste was in
- 42 -
fact disposed of at the Davis site. Id. at 56. For example, the court
held Ashland liable for a 79-drum load that CWR picked up from Ashland
on June 1, 1977 because a Davis receipt showed that CWR driver Wilbert
Jones delivered 79 drums to Davis on June 2. Id.The court next turned to allegations that transporter CCC,
the company used by Morton, disposed of waste at the Davis site. The
court found that CCC made 47 trips to the Davis site between May 1977
and the first week of July and that Morton's waste was included in some
of those deliveries. Id. at 55.
Finally, the district court allocated responsibility for
cleanup costs that UTC had incurred or would incur in completing the
soil remediation. The chief factor in the court's determination was
the volume of waste disposed at the Davis site that could be attributed
to each defendant based on the evidence about specific deliveries.
Davis IV, 31 F. Supp. 2d at 64. For example, the court found that CWR
made two 79-drum deliveries containing 8,690 gallons of Ashland's waste
to the Davis site, and so allocated to Ashland a share of
responsibility for cleanup costs based on that volume. Id. at 67.
Based on its calculations of waste volume, the court allocated 1.03
percent of UTC's future cleanup costs to Ashland, .16 percent to Acco,
.03 percent to Gar, and .57 percent to PE. Id. at 69. The court also
allocated 1.54 percent of responsibility to UTC. Id. Because the
court found no evidence of specific deliveries yielding data about the
- 43 -
volume of Morton waste disposed, it did not allocate a share of future
cleanup costs to Morton. Id. at 65.
C. The Parties' Challenges to the Declaratory Judgment
1. Proof that the Defendants Disposed of Hazardous Waste
We review the district court's factual findings pursuant to
a clear error standard. See Dedham Water Co., Inc. v. Cumberland Farms
Dairy, Inc., 972 F.2d 453, 457 (1st Cir. 1992). Clear error review
means that:
Findings of fact will be given effect unless,
after reading the record with care and making due
allowance for the trier's superior ability to
gauge credibility, the reviewing court form [sic]
a strong, unyielding belief that a mistake has
been made . . . . The same high level of respect
attaches whether the conclusions of the trial
court depend on its election among conflicting
facts or its choice of which competing inferences
to draw from undisputed basic facts.
Id. (internal quotation marks omitted). Importantly for this case,
"[w]hen the evidence supports conflicting inferences, the district
court's choice from among the several inferences cannot be clearly
erroneous." Id. at 462. We also note that findings of fact, even if
brief, are sufficient as long as they permit a clear understanding of
the grounds for the decision below. See Applewood Landscape & Nursery
Co., Inc. v. Hollingsworth, 884 F.2d 1502, 1503 (1st Cir. 1989). With
those standards in mind, we address each party's claims separately.
a. Ashland
In 1977, Ashland operated a chemical manufacturing plant in
- 44 -
Great Meadows, New Jersey, generating waste that contained nitrating
acid, sulfuric acid, nitric acid, and solvents composed of isopropyl
alcohol, methyl alcohol, toluene, benzene, and xylene. It is
undisputed that Ashland contracted with CWR to dispose of this waste,
and the record supports the district court's finding that CWR
transported waste to the Davis site. While Michael Musillo of CWR
testified that between 1975 and 1977 the company took all of its waste
initially to the Sanitary Landfill owned by the Capuanos, Jack Capuano
testified that after April 1977, when the landfill began getting
complaints about odor, his brother Anthony Capuano began diverting some
of CWR's waste to the Davis site.
CWR's pickup slips and billing records, as well as Ashland's
disposal logs, show that during May and June of 1977, CWR picked up
thirteen tanker loads and four flatbed loads from Ashland. Each of the
flatbed loads contained 79 55-gallon drums. One of the flatbed pickups
took place on June 1 and another occurred on June 30. Davis receipts
bearing the name "Capuano," signed by Wilbert Jones, and recording 79-
drum loads, show that CWR deliveries were diverted from Sanitary
Landfill to the Davis site on June 2 and July 5. Based on its theory
that CWR delivered its waste within three days of accumulating a full
flatbed load, and the explanation that the intervening weekend and July
4th holiday accounted for the five-day gap between June 30 and July 5,
the district court found Ashland liable for the waste that CWR
- 45 -
delivered to the Davis site on June 2 and July 5.
There is evidence in the record to support the court's
conclusion. Emanuel Musillo, principal of CWR, testified that when a
driver picked up a full 79-drum load early in the day, he would go
straight to Rhode Island to dispose of it. When a driver picked up a
full load late in the day or picked up only a partial load, he would
park the load at CWR overnight. The next day the driver would either
continue to Rhode Island if the truck was full, or collect waste from
another customer if it was not. While Musillo did not definitively
testify that CWR always delivered waste within three days of collecting
it, he said that when a driver accumulated a full 79-drum load, the
drums would be taken to Rhode Island "within a few days, I would
imagine." CWR driver Wilbert Jones also testified that after picking
up a complete load, he would leave it at CWR overnight and then leave
for Rhode Island early the next morning.
Ashland challenges the court's factual findings on several
grounds.22 Ashland begins by pointing out that UTC presented no direct
evidence, such as drums or other containers bearing Ashland's name and
22Ashland titles the section of its brief challenging the district
court's factual findings "As a Matter of Law, Ashland Could not Be
Found Liable." This attempt to win de novo review fails.
"[A]ppellant's plaint boils down to little more than thinly veiled
dissatisfaction with the district court's factual findings." Dedham
Water, 972 F.2d at 460. Ashland's alternate theories about why the
court should have made other findings and inferences are factual rather
than legal theories and so are subject to the clear error standard.
- 46 -
found at the Davis site, to show that Ashland's waste was on the CWR
deliveries to the Davis site. While Ashland is correct, direct
evidence is not a prerequisite to proving the elements of liability in
a contribution action. See 42 U.S.C. § 9613(f) (setting forth elements
of liability).
To attack the district court's finding that CWR disposed of
waste within three days of collecting it, Ashland offers alternative
scenarios. Ashland's most plausible theory is based on Jones's
testimony that the Musillos sometimes "offloaded" nonflammable liquid
waste by pouring it from drums into a tanker truck or underground
storage facility at CWR.23 Ashland argues that its waste thus was
likely unloaded at CWR's Bridgeport site after pickup and either mixed
with other waste or stored there for an indefinite period.
Additional testimony by Jones and the Musillos calls this
theory into question. Jones was asked this question: "[L]et's suppose
that you brought back some drums from one or more customers to
Bridgeport, and that you offloaded those drums. Let's say it wasn't a
full load. Typically, how long would it take before those offloaded
23 Jones said in response to a question about whether CWR mixed
waste collected at different times: "Things, anything that could be
mixed and wouldn't explode, catch a fire, put it in the tanker. Then
when the tanker is full take it to Rhode Island." Jones also said "if
there was, let's say, an overflow of drums, there were more pickups to
be made, and we couldn't handle it because the truck was full, and they
had to be made, we would take them off, put them in the warehouse until
we get a trip to go up to Rhode Island."
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drums would find their way to Rhode Island to be dumped?" Jones
answered: "No more than three days." Jones also said that the
Musillos, not he, did most of the mixing work. Emanuel Musillo
testified that offloading was not CWR's normal practice because of the
"double work" involved. He said that when drums were offloaded, they
usually contained waste oil that CWR could resell. Musillo also said
that occasionally other kinds of waste were stored at CWR, but only
until the next delivery trip to Rhode Island. Michael Musillo
corroborated aspects of his brother's account.
In light of this testimony, the district court did not err
in finding that it was more likely than not that the waste CWR
collected from Ashland on June 1 and June 30 was the waste the
transporter delivered to the Davis site on June 2 and July 5. Since
both pickups from Ashland were full 79-drum loads, it seems
particularly unlikely that CWR drivers would have taken a full load off
the flatbed truck on one day, only to deliver a full load of different
drums to the Davis site on the next business day. Ashland's
alternative scenarios are simply "competing inferences" that the
district court chose not to draw. Dedham Water, 972 F.2d at 457. Such
a choice cannot be clear error.
Ashland's other alternative scenarios also run afoul of the
clear error standard. First, Ashland argues that CWR often kept waste
at its Bridgeport facility for unspecified periods, making it unlikely
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that the transporter delivered Ashland's waste to the Davis site within
three days of collecting it. Ashland cites evidence that 13,000 drums
of waste were stockpiled at CWR in the fall of 1977. However, since
Emanuel Musillo testified that stockpiling did not begin until CWR's
disposal sites were shut down after the summer of 1977, the evidence on
this point does not undermine the district court's findings. Second,
Ashland argues that the June 2 and July 5 disposals that CWR made at
Davis likely contained waste generated by an unknown source that CWR
picked up from an unidentified parking lot in the New Jersey
Meadowlands. While Jones testified that he picked up drum loads of
waste from a parking lot somewhere in the Meadowlands not "more than
eight or ten times" during 1977, he did not remember the dates of those
pickups. His testimony thus lacks the specifics necessary to link the
Meadowlands pickups to the June 2 and July 5 deliveries to the Davis
site. Finally, Ashland argues that the June 2 and July 5 disposals
contained waste that CWR picked up from CCC customers. There is no
evidence to show that CWR picked up waste for CCC during the relevant
time period.24
24 Ashland and PE also argue that the district court's finding
that CWR had an established practice of delivering waste within three
days of collecting it conflicts with United States v. Newman, 982 F.2d
665 (1st Cir. 1992). However, Newman is inapposite to the case at
hand. In that case, we held that a trial judge did not abuse his
discretion by excluding material habit evidence under Federal Rule of
Evidence 406 when that evidence "did not require the conclusion that
the putative practice was followed with the necessary regularity." Id.
at 669 (emphasis added). Newman thus concerns the standards for the
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In short, while the testimony by Jones and the Musillos
contains some minor ambiguities, the district court did not err by
inferring that CWR regularly disposed of waste within three days of
collecting it, or by inferring that CWR transported Ashland's waste to
the Davis site on June 2 and July 5.25
b. Acco-Bristol
admission of habit or routine practice. Here, by contrast, the
testimony from the Musillos and Jones was admitted without objection by
the appellants, who now argue that this evidence is not sufficient to
establish CWR's pickup and delivery practices. This argument fails.
Once routine practice evidence has been admitted, Rule 406 does not
limit the district court's consideration of such evidence, or the
weight that it may be given.
25Ashlandalso mounts a misnomer defense, arguing that UTC did not
name the proper party in its pleadings when it sued "Ashland Chemical
Inc." rather than "Ashland Chemical Co." According to stipulations of
fact by the parties, Ashland Chemical Inc. was incorporated in 1989 and
merged into Ashland Oil Inc. in 1993. In 1996, Ashland Oil Inc.
changed its name to Ashland Inc. Ashland Chemical Co., which operated
the Great Meadows, New Jersey facility from which CWR transported
hazardous waste, was a division of Ashland Oil Inc. in 1977. While
Ashland Chemical Inc. may technically be an inaccurate reference to
Ashland Chemical Co., there is no question that Ashland received
adequate notice that it was being sued, and that it owned the Great
Meadows facility from which the liability at issue here stemmed. Cf.
Fed. R. Civ. Proc. 15(c)(3), Advisory Committee Notes 1991 Amendment
("An intended defendant who is notified of an action within the period
allowed . . . for service of a summons and complaint may not under the
revised rule defeat the action on account of a defect in the pleading
with respect to the defendant's name . . . . [A] complaint may be
amended at any time to correct a formal defect such as a misnomer or
misidentification."); Hill v. Shelander, 924 F.2d 1370, 1374 n.2 (7th
Cir. 1991) ("Plainly, the new language [of Rule 15(c)(3)] comprehends
a situation where the original complaint sues the correct party but
identifies him by a technically incorrect name."). There is no
question here that UTC sued the correct party and that judgment was
entered against that party. As a result, we reject Ashland's misnomer
defense.
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Acco-Bristol Division of Babcock Industries maintained a
manufacturing facility in Waterbury, Connecticut in 1977. This
facility produced controls for oil and gas lines through processes
involving electroplating, soldering, welding, and degreasing machine
parts. Wastes produced by Acco included 1,1,1-TCA, a soap and cyanide
waste stream, and acid sludge. Acco typically put the waste in 55-
gallon drums for disposal.
CWR twice picked up waste from Acco during the spring and
summer of 1977, collecting 50 drums on April 6 26 and 24 drums on June
28. On June 29, CWR received a check in the amount of $324 for these
pickups. A "Capuano Dumping Charge Slip," also dated June 29,
indicates that CWR delivered a full load of 79 drums to the Davis site.
The evidence at trial indicated that drivers directed to the Davis site
by the Capuanos at Sanitary Landfill sometimes presented Capuano
dumping receipts to William Davis. Davis testified that he used these
slips to verify the amount of waste dumped on his property and to help
him prepare invoices for Sanitary Landfill. In keeping with this
practice, Davis sent a bill to Sanitary Landfill on June 29 for 79
gallons of waste.
Based on this evidence, the district court inferred that the
24 drums of Acco waste went to the Davis site in CWR's shipment on June
26 The district court declined to infer that the shipment picked
up by CWR on April 6 went to the Davis site because there were no Davis
slips within three days of that date.
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29. We cannot conclude that this determination is clearly erroneous.
Acco points out that on June 27 and 28, CWR picked up 99 drums of waste
from various customers -- 20 drums more than were dumped at the Davis
site. However, at least 17 of those drums were picked up from
customers who frequently disposed of waste oils. Because CWR tended to
sell waste oil to salvagers, as we have noted, the district court's
conclusion that the 24 drums of Acco's waste were part of the 79 drums
sent to the Davis site on June 29 was reasonable.
Acco argues that the district court erred in relying on the
Capuano slip to infer the presence of Acco's waste at the Davis site
because the slip does not specify a transporter. Specifically, Acco
claims that CCC or another waste company, rather than CWR, Acco's only
transporter, could have brought the waste delivered on June 29.
However, testimony at trial makes clear that by June 1977, CCC was
dumping waste directly at the Davis site without stopping at Sanitary
Landfill first. Thus, it is not likely that the June 29 Capuano
Dumping Charge Slip accounted for waste hauled by CCC. As a result, we
cannot say that the district court's findings that the Capuano slip
referred to waste dumped by CWR, and that Acco's waste was part of that
delivery, was clearly erroneous. See Dedham Water, 972 F.2d at 463.
c. Black & Decker a/k/a Gar
Gar operated an electroplating business in Danbury,
Connecticut. Its waste contained nitric acid, copper, nickel, and
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cyanide. According to CWR records, the transporter picked up five
loads of waste from Gar on May 6 (13 drums), June 20 (5 drums), June 27
(2 drums), September 2 (7 drums), and September 30 (11 drums). A Davis
receipt shows that on June 21, the day after the five-drum pickup, CWR
disposed of 60 drums of waste at the Davis site. The five drums
collected on June 20 contained 275 gallons of waste. Based on this
evidence, the district court found Gar liable for dumping 275 gallons
of waste at the Davis site.
Gar poses two challenges to the court's factual findings.27
It notes that CWR picked up more than 300 drums28 from Connecticut and
New Jersey customers on the three business days before June 21, and
concludes that in light of those pickups it is not mathematically
likely that Gar's five drums were among the 60 drums that CWR delivered
to Davis on June 21. Admittedly, the collection of more than 300 drums
in the days leading up to the June 21 delivery to Davis means that it
is less likely that Gar's five drums were among those delivered than it
is, for example, that the 79 drums picked up from Ashland on June 1
were the 79 drums delivered to the Davis site on June 2.
27Gar also argues, like Ashland, that there was no direct evidence
that its waste ended up at Davis, and that CWR regularly offloaded its
customers' waste at its property for unspecified periods of time and
also mixed different customers' waste at its Bridgeport facility.
These arguments fail for the same reasons discussed above.
28Gar says that CWR picked up 352 drums on the three business days
before the June 21 delivery. UTC counts 326 drums and 13 smaller
containers collected between June 17 and June 22.
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Nonetheless, the evidence that Gar emphasizes does not lead
us to conclude that the district court's findings were clear error. As
UTC points out, the Davis receipts show that CWR delivered a total of
219 drums to the Davis site on June 21, June 22, and June 23,
increasing the likelihood that Gar's five drums were among those
delivered. In addition, 62 of the 300-plus drums collected on the
preceding days came from customers that sent waste oil to CWR, and so,
according to Emanuel Musillo's testimony, would likely have been
offloaded and stored for resale rather than being delivered to the
Davis site.
To cast further doubt on the district court's findings, Gar
points out that the Davis slip from June 21 says "SOLIDS" for solid
waste, and that Gar produced liquid waste. Davis's testimony at trial
undermines the significance of the solids designation. Davis said that
he distinguished between solid and liquid waste because he poured
liquid waste out of the barrels and resold them. Because he could not
resell the barrels containing solids, he charged more for solid waste
(one dollar per barrel) than he did for liquid waste (50 cents per
barrel). Davis therefore had a financial incentive to classify drums
of waste as solid rather than liquid. Davis also testified that he
considered anything "solid" that did not pour easily, including any
sludge or residue left in the drums. Also, there is no evidence that
Davis examined each barrel before classifying a shipment.
- 54 -
Finally, Gar notes that while the evidence shows that CWR
driver Johnny Granfield made the June 21 delivery to the Davis site,
there is no evidence concerning which CWR driver picked up Gar's waste
on June 20. This matters because each CWR driver only drove waste to
the Davis site that he himself collected. Thus Gar argues that the
possibility that Wilbert Jones, the other CWR driver, picked up its
waste on June 20 lessens the likelihood that its waste was among the 60
drums delivered to the Davis site on June 21. However, since there is
no evidence to show that Granfield was not the driver who collected
Gar's waste on June 20, and since the evidence did establish that the
driver who delivered waste to the Davis site had picked it up, the
district court could have inferred that Granfield collected the waste
from Gar, and that this waste was on his truck when he made the June 21
delivery to Davis.
d. Perkin-Elmer
PE operated four Connecticut facilities in 1977, at which it
generated waste that included methylene chloride, 1,1,1-TCA, and
toluene.29 PE acknowledges that these hazardous substances were
identified at the Davis site.
29 PE operated facilities at four locations: (1) a primary
manufacturing facility in Norwalk; (2) a research facility at 50
Danbury Road in Wilton; (3) a manufacturing and research facility at 77
Danbury Road in Wilton; and (4) and Qualitron Corporation's
manufacturing facility in Danbury. Qualitron became a wholly-owned
subsidiary of PE in May 1984. PE does not contest its responsibility
for Qualitron's environmental liability in this case.
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PE's records show that CWR picked up waste from one of PE's
facilities seven times during the spring and early summer of 1977: on
May 26, June 20, June 22 (from three facilities), June 27, and July 1.
Davis slips indicated that CWR delivered drums to the site on May 27,
June 21, June 23, June 29, and July 5, 6, and 7. Based on the theory
that CWR delivered waste within three days of collecting it, the
district court inferred that the PE pickup on May 26 was dumped at the
Davis site on May 27; the pickup on June 20 was dumped on June 21; the
pickups on June 22 were dumped on June 23; the pickup on June 27 was
dumped on June 29; and the pickup on July 1 was dumped on July 5, 6, or
7.
PE objects to the district court's finding of liability on
numerous grounds. First, it argues that the court erred in not
"locating and identifying" PE's waste at the Davis site. As PE notes,
the district court said in articulating the proof required by CERCLA:
"In the context of this case, proof that a defendant generator's
hazardous waste 'can be located and identified at the Davis Site' is a
sina qua non in establishing arranger liability." Davis IV, 31 F.
Supp. 2d at 61 (quoting Davis I, 882 F. Supp. at 1221). PE argues
unpersuasively that the district court intended with this language to
create a new and higher standard of liability under CERCLA, requiring
that UTC establish waste deposits with direct evidence such as
containers bearing PE's name and containing residue of a hazardous
- 56 -
waste PE generated. We have already rejected an interpretation of
CERCLA that "would cast the plaintiff in the impossible role of tracing
chemical waste to particular sources in particular amounts, a task that
is often technologically infeasible due to the fluctuating quantity and
varied nature of the pollution at a site over the course of many
years." Acushnet, 191 F.3d at 76.
PE also points out that the number of drums of waste picked
up by CWR in any three-day period before PE's waste was allegedly
delivered to the Davis site is not the same as the number of drums
noted on the Davis slip for that day. However, as we have discussed
above, some of those drums from other customers contained waste oil
which CWR often salvaged and so likely would not have delivered to the
Davis site. Thus, the discrepancy between the number of barrels picked
up and delivered by CWR does not undermine the court's conclusion that
PE's waste went to the Davis site.
PE also argues that its waste was not dumped at the Davis
site because it produced only liquid waste, and all of the Davis slips
linking its waste to the site indicated that the barrels dumped by CWR
contained solid waste. PE's contention that it only produced liquid
waste is contradicted by evidence in the record. Joseph Rabideau,
designated by PE to testify on behalf of the corporation, testified
that CWR disposed of waste for PE that included "a solidified scrape
off type material" and that waste picked up by CWR in open-top five
- 57 -
gallon pails was "solidified material." Rabideau also explained that
PE's use of methylene chloride as a solvent produced "still bottoms"
that were disposed of "in a fairly solidified form." PE also produced
a semi-solid paint residue sludge as part of its paint operation.
Moreover, as we have discussed, Davis's testimony at trial
demonstrated that his classification of waste as solid or liquid was
not an exact process. Thus, the district court did not clearly err in
concluding that waste classified as a liquid by PE might nonetheless be
considered a solid by Davis if the barrel contained any residue that
could not be easily poured. Based on this evidence, it was not clear
error for the district court to conclude that Davis could have
characterized a shipment of 79 barrels as "solid" even though some --
or even most -- of the drums he did not examine actually contained
liquids.
In sum, all of PE's objections to the district court's
finding of liability are essentially disputes about the court's finding
of the facts and the inferences drawn from CWR's established waste
practices. We must uphold these findings and inferences unless they
are clearly erroneous. See Dedham, 972 F.2d at 457. For the reasons
we have explained, evidence in the record amply supports the district
court's determinations.
2. Wilbert Jones's Testimony
Acco, Ashland, Gar, and Perkin-Elmer all argue that the
- 58 -
district court erred in admitting and crediting the deposition
testimony of Wilbert Jones, one of the two drivers who hauled waste for
CWR. At the time of his deposition in June 1996, Jones was unemployed
and very ill. He died in May 1997. UTC paid Jones approximately $30
per hour as compensation for the time he spent preparing and
testifying, for a total of between $700 and $800.30
At trial, the defendants argued that UTC's payments to Jones
raise an inference that Jones's testimony was improperly influenced by
UTC and should be excluded for that reason. The district court
rejected this argument in a ruling from the bench, finding that "under
these circumstances it's a reasonable amount to have paid him." The
defendants appeal this ruling to admit the testimony.
Citing two grounds for disbelieving Jones's testimony, the
defendants argue further that the district court should not have
credited Jones's testimony. First, they state that the payments UTC
made to Jones -- if they do not render his testimony inadmissible --
should have caused the district court to reject his account of CWR's
practices. Second, the defendants argue that Jones should not be
believed because he signed affidavits prepared for other litigation
that they claim are inconsistent with his testimony in this case.
30The defendants claim that UTC did not timely or adequately
disclose the details of the payments it made to Jones. However, the
issue of his compensation was raised during the June 1996 deposition
and the defendants had the opportunity to cross-examine Jones on the
issue of compensation at that time.
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a. Grounds for Exclusion
We first consider whether the district court abused its
discretion in admitting Jones's deposition testimony.31 To the extent
that the defendants argue that the payments to Jones rendered him
incompetent as a witness, their effort fails. Federal Rule of Evidence
601 provides: "Every person is competent to be a witness except as
otherwise provided in these rules."32 See also United States v. Devin,
918 F.2d 280, 292 (1st Cir. 1990) ("It is a well-established principle,
embodied in Fed. R. Evid. 601, that witnesses are presumed competent to
testify."). A district court's determination to allow a witness to
testify is overturned only for abuse of discretion. See Devin, 918
F.2d at 292; United States v. Hyson, 721 F.2d 856, 864 (1st Cir. 1983)
31The defendants cite Rule 3.4(b) of the Rhode Island Rules of
Professional Conduct for the proposition that a lawyer shall not "offer
an inducement to a witness that is prohibited by law." This ethical
rule does not advance their argument. The rule only prohibits
compensation given to a witness in violation of law. For reasons we
explain here, reasonable compensation to witnesses is not prohibited by
law and does not render their testimony inadmissible.
32 As the district court recognized, the defendants' challenge to
Jones's competency is not a challenge to his competency "in the sense
of whether he had all of his [mental] faculties." While "competency"
generally refers to a witness's mental capacity to perceive events and
comprehend the obligation to tell the truth, see, e.g., United States
v. Devin, 918 F.2d 280, 292 (1st Cir. 1990) (affirming district court's
determination that a witness with a history of psychiatric episodes was
competent), the concept of competency has been used to challenge
testimony where it is alleged that a witness's credibility is so poor
as to render his or her testimony inadmissible, see, e.g., United
States v. Bedonie, 913 F.2d 782, 799 (10th Cir. 1990) (rejecting the
argument that prior inconsistent statements rendered a witness
incompetent to testify under Rule 601).
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("The competency of a witness to testify is for the trial judge.").
We have been reluctant to exclude testimony based only on the
fact that a witness was paid. For example, in United States v. Cresta,
where an informant had been paid by the government, we said: "Rather
than adopting an exclusionary rule for a particular factual situation,
irrespective of the mode of payment, we prefer the rule that would
leave the entire matter to the jury to consider in weighing the
credibility of the witness-informant." 825 F.2d 538, 547 (1st Cir.
1987) (quoting United States v. Grimes, 438 F.2d 391, 396 (6th Cir.
1971)). See also Borges v. Our Lady of the Sea Corp., 935 F.2d 436,
440 (1st Cir. 1991) (assuming without deciding that even if a witness's
statements were obtained improperly, "such impropriety in the means of
obtaining a statement would not automatically bar admission of the
statement at trial."). Since the witness in Cresta had received most
of his compensation prior to trial, his payment was not contingent upon
the conviction of any of the defendants. See id. Because the witness
had been thoroughly cross-examined about the nature of his agreement
with the government and the jury had been told to consider his
testimony with care, the admission of the testimony was upheld on
appeal. While Cresta involved a payment to a government informer
rather than to a witness deposed in a civil action, the reasoning of
Cresta applies here. The defendants have not claimed that the payment
to Jones was contingent upon a finding that the defendants were liable.
- 61 -
Additionally, the district court was fully informed about the payments
made to Jones -- as the jury was in Cresta -- and considered those
payments as part of its assessment of Jones's credibility. The
defendants have not attempted to distinguish Cresta from the instant
matter.33
b. Grounds for Disbelieving
The defendants argue that even if the payments Jones received
did not render his testimony inadmissible, those payments should have
caused the district court to discredit Jones's testimony.
Specifically, they say that Jones's total compensation is excessive in
light of the fact that he was elderly, ill, and unemployed at the time
of the deposition. They claim that the time spent testifying did not
divert Jones from any other lucrative pursuits and that payments at a
rate of $30 per hour constituted a windfall to him and raise an
inference that the payments were intended to improperly influence his
testimony. The district court explicitly considered these arguments
and rejected them. Reviewing the court's decision to credit Jones's
33 The case cited by the defendants for the proposition that
payment to a fact witness to testify at depositions violated a state
ethics rule prohibiting lawyers from offering inducements to witnesses
is Golden Door Jewelry Creations, Inc. v. Lloyds Underwriters Non-
Marine Assoc., 865 F. Supp. 1516, 1526 (S.D. Fla. 1994). Golden Door
is easily distinguished from the present case because the payments to
two witnesses totaled over $400,000 and $100,000. See id. Indeed,
Golden Door itself acknowledges that "[p]ayments made to fact witnesses
as actual expenses as permitted by law will not be disturbed or set
aside." Id. at 1526 n.11.
- 62 -
testimony for clear error, see United States v. Rostoff, 164 F.3d 63,
71 (1st Cir. 1999), we find none.34 Although Jones was ill and
unemployed when he gave his testimony, $30 per hour is not a payment so
outrageously high as to raise an inference that his testimony was
influenced. As the district court stated from the bench when it ruled
on this issue: "Everybody's time is worth something."
The defendants also argue that the district court should have
discredited Jones's deposition testimony because he allegedly made
prior inconsistent statements in affidavits he signed for litigation
known as the Picillo Superfund case. See generally O'Neil v. Picillo,
883 F.2d 176 (1st Cir. 1989). Jones signed these Picillo affidavits in
September 1995. Four of the affidavits were admitted into evidence at
the Davis trial. The affidavits all said in similar language that
Jones dumped waste at the site known as the "Picillo Pig Farm" in
Coventry, Rhode Island during 1977. For example, the affidavit
relating to PE states the following:
One of the Musillo customers I went to was Perkin
Elmer in Norwalk, Connecticut. Each week, during
34The defendants attempt to avoid this deferential standard of
review by arguing that the district court was not in a position to
evaluate Jones's credibility firsthand because Jones's testimony at
trial was submitted by reading lengthy excerpts from his deposition.
However, it is well-settled that the court's credibility findings
regarding deposition testimony are still entitled to deference on
appeal. See Amer. Foreign Ins. Ass'n v. Seatrain Lines of Puerto Rico,
Inc., 689 F.2d 295, 298 (1st Cir. 1982) (applying clearly erroneous
standard of review to factual findings of the trial court even where
the record consisted only of photographs and deposition testimony).
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the year 1977, I would haul 15 to 20 drums, 55
gallon size . . . . I would haul these same drums
of waste to the Chemical Waste Removal yard in
Bridgeport where they were stored until a full
flatbed trailer load of 79 drums was accumulated.
I would then dispose of these Perkin Elmer drums
of waste at Picillo Pig Farm.
Attorneys for the defendants questioned Jones about these statements
during his deposition and asked him to reconcile the affidavits with
his testimony in the Davis litigation. He explained that he never
dumped at the Davis site again after he began dumping at the Picillo
site in 1977. Therefore, Jones's deposition testimony in this case and
the Picillo affidavits may be interpreted to provide a consistent
account of his dumping practices during 1977: Jones dumped at the Davis
site until Davis stopped accepting waste in September, at which time he
began dumping at the Picillo pig farm. Moreover, even without this
explanation, the affidavits are not facially inconsistent with Jones's
testimony because the affidavits do not mention the Davis site at all,
leaving open the possibility that Jones dumped at both sites during
1977, but at different times. In sum, the statements in the Picillo
affidavits are not, as the defendants contend, flatly contradictory or
inconsistent with Jones's testimony in the Davis litigation.
Particularly in light of the documentary evidence offered at trial --
consisting of Davis slips, bills of lading, and other ledgers and
receipts -- and the testimony of the Musillo brothers that corroborated
much of what Jones said, we cannot conclude that the district court
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clearly erred in choosing to credit some of Jones's testimony.
3. Exclusion of Master Chart
Acco and Gar argue that the district court erred in excluding
a 120-page chart captioned "Contentions of the Contribution Plaintiffs"
that UTC's lawyers prepared for the Rule 30(b)(6)35 testimony of UTC's
corporate designee, Troy Charlton. The chart summarized information
UTC obtained during discovery about the claims and theories of various
parties to the litigation, most of whom were third or fourth-party
defendants. More specifically, the chart, organized by party name,
listed information about the dates of disposal at the Davis site, the
volume of waste, the hauler used by that party, and the hazardous
substances contained in the waste. The chart also identified pertinent
documents and testimony for each of the parties. Charlton referred to
the chart to answer questions throughout his deposition and
occasionally read from it verbatim.
35 Fed. R. Civ. P. 30(b)(6) provides:
A party may in the party's notice and in a subpoena name as
the deponent a public or private corporation or a
partnership or association or governmental agency and
describe with reasonable particularity the matters on which
examination is requested. In that event, the organization so
named shall designate one or more officers, directors, or
managing agents, or other persons who consent to testify on
its behalf, and may set forth, for each person designated,
the matters on which the person will testify. A subpoena
shall advise a non-party organization of its duty to make
such a designation. The persons so designated shall testify
as to matters known or reasonably available to the
organization.
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a. Procedural Posture
UTC claims that Acco and Gar cannot appeal the exclusion of
the chart from evidence because they did not move for its admission
below. Only Sealed Air Corporation (SAC) and Morton moved to introduce
the chart at trial, arguing that it constituted an admission by UTC.
See Fed. R. Evid. 801(d)(2) (defining admissions by a party-opponent as
"not hearsay"). Neither SAC nor Morton appealed the district court's
denial of their motions, although Acco and Gar now argue that the
district court erred in excluding the chart. Acco and Gar are not
precluded from making this claim despite their failure to do so below.
The plain language of Fed. R. Evid. 103(a)(2), written in the passive
tense, does not require a party to have made an offer of proof at trial
in order to preserve the right to appeal. Rather, Rule 103(a)(2)
states that an offer of proof is adequate when: "In case the ruling is
one excluding evidence, the substance of the evidence was made known to
the court by offer or was apparent from the context within which
questions were asked." Fed. R. Evid. R. 103(a)(2) (emphasis added).
In considering whether an adequate offer of proof was made at trial, we
have focused on whether the proof sufficed to notify the court of the
significance of the evidence such that the record was developed
adequately for appeal. See, e.g., Harrison v. Sears, Roebuck & Co.,
981 F.2d 25, 30 (1st Cir. 1992) (Rule 103(a)(2) requires an offer of
proof "to ensure that the trial judge and the appellate court can
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evaluate the matter fully"). Morton and SAC made an adequate offer of
proof in attempting to admit the master chart into evidence. They
filed motions to admit the chart, as well as lengthy memoranda of law,
and argued orally before the district court that it was admissible as
an admission by UTC. Accordingly, Acco and Gar may appeal the district
court's decision to exclude the chart.36
b. Admissibility of the Chart
In moving to introduce the chart at trial, SAC and Morton
argued that it constituted a party admission by UTC. See Fed. R. Evid.
801(d)(2). Ruling on this motion from the bench, the district court
concluded that the chart was UTC's statement but found that it did not
qualify as an admission. Noting that there must be "some indication of
reliability" for the statement to be an admission, the court found that
a party cannot be "bound by statements that simply relate to hearsay
information received regarding matters clearly outside the scope of the
corporations knowledge or statements that describe evidence compiled
from third-party sources by the corporation in preparation for trial."
The district court then explained its view of the statements contained
in the master chart, noting first that it appeared "to contain a
36 UTC cites only one case to support its argument that Acco and
Gar may not appeal the ruling to exclude the chart. See United States
v. Long, 706 F.2d 1044, 1052 (9th Cir. 1983) (finding that defendant
who did not move to admit an affidavit at trial had waived his right to
do so on appeal, although his co-defendant had moved for its
admission). In light of the plain language of Fed. R. Evid. 103 and
our precedent on this issue, we do not find Long persuasive.
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mixture of different things." The court described the chart as
follows:
Information that UTC received from a variety of
third-party sources. For example, it consisted
primarily of things like what UTC has summarized
as being contained in documents obtained from Mr.
Davis and others; what Mr. Carracino and others
may have said according to UTC in their
depositions. They all - they also contain, in
addition to this . . . information, which seems
to be dominant, they also contain a significant -
significant number of unattributed statements
[or] inferences based on the first category of
information.
Accordingly, the district court denied Morton and SAC's motions to
admit the master chart, concluding: "it is impossible to determine
exactly what all this information is and in a sense it clearly appears
that most of it is simply information obtained from third-party sources
and compiled in preparation for trial."
"[A] trial court enjoys considerable discretion in connection
with the admission or exclusion of evidence." Udemba v. Nicoli, 237
F.3d 8, 15 (1st Cir. 2001). The decision not to admit the chart in
this case is reviewed for abuse of discretion. See Udemba, 237 F.3d at
15; Williams v. Drake, 146 F.3d 44, 47 (1st Cir. 1998). With respect
to party admissions, we have noted the following:
For a statement to be an admission under Rule
801(d)(2), the statement must be made by a party,
or by a party's agent or servant within the scope
of the agency of employment. . . . Each link in
the chain must be admissible, either because it
is an admission and thus not hearsay or under
some other hearsay exception. . . . While there
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may be controversy over whether admissions must
be based on personal knowledge, . . .
unattributed statements repeated by party-
opponents cannot be admissible. As the original
declarant is unknown, it is impossible to
determine whether the original declarant also
fits within the party-opponent definition, and
thus the exclusion of [the challenged statements]
was proper.
Vazquez v. Lopez-Rosario, 134 F.3d 28, 34 (1st Cir. 1998) (emphasis
added). Acco and Gar must establish that the chart prepared by UTC is
grounded in admissible evidence.37 They have not done so. The chart
was prepared by UTC's lawyers and contained information UTC had
developed from discovery, including inferences from third-party
information. The chart also contained a number of unattributed
statements. Acco and Gar have not attempted to identify the source of
these statements or specify which of the statements might be
admissible. Accordingly, we affirm the district court's decision to
exclude the chart from evidence.
4. Proof that Defendants' Waste Caused or Contributed to
Cleanup Costs
37Summary charts offered pursuant to Fed. R. Evid. 1006, governing
charts summarizing voluminous writings, must also be grounded in
admissible evidence. See United States v. Nivica, 887 F.2d 1110, 1126
(1st Cir. 1989); United States v. Sorrentino, 726 F.2d 876, 884 (1st
Cir. 1984) ("[P]urported summaries containing assertions not otherwise
supported by the record are not admissible."). While Acco and Gar have
not identified the master chart as a summary chart under Rule 1006,
seeking to admit it as an admission of UTC instead, the master chart --
more than 100 pages long -- summarizes a large quantity of information,
and whether it is deemed a party admission or a summary chart, Acco and
Gar must prove that the statements in the chart are admissible.
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Ashland and Acco argue that there is no evidence
concerning the quality or quantity of hazardous substances in the
Ashland and Acco drums found at the Davis site, and thus no evidence
that disposal of the drums can cause UTC to incur cleanup costs. Gar
makes two additional lack of causation arguments, contending that: (1)
there is no evidence that the company contributed more than background
levels of contamination since it was found liable for only five drums
of waste; and (2) that its waste, which contained metals, has not
contributed to UTC's soil remediation costs because the remediation is
directed only at cleaning up volatile organic compounds. We review for
clear error the court's factual finding that the appellants' waste
triggered cleanup costs. See Dedham Water, 972 F.2d at 457.
In discussing the environmental damage at the Davis site, the
district court found that three categories of waste were present in the
soil and ground or surface water at greater than background levels:38
"volatile organic compounds (VOCs), semi-volatile organic compounds
(SVOCs), and metals." See Davis IV, 31 F. Supp. 2d at 51. The VOCs
included "benzene, methyl ethyl ketone (MEK), methylene chloride,
perchloroethylene a/k/a tetrachloroethylene (PCE), 1,1,1,
tricloroethane (1,1,1-TCA), trichlorethylene (TCE), toluene, and
38The background level of a hazardous substance is measured in
parts per million or parts per billion, and reflects the level that
presents an acceptable degree of health risk, according to scientific
judgments.
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xylene." Id. The metals included "cadmium, copper, cyanide, and
nickel." Id.The court found that Acco, which manufactured controls for
oil and gasoline lines, produced waste containing 1,1,1,-TCA, cadmium,
copper, and nickel compounds, cyanide, and hydrochloric or sulfuric
acid. See id. at 55. Ashland, a chemical manufacturer, generated
waste that contained nitrating acid, composed of sulfuric acid and
nitric acid, as well as solvents composed of isopropyl alcohol, methyl
alcohol, toluene, benzene, and xylene. See id. at 56. Gar, which "was
in the electroplating business," generated wastes containing nitric
acid, copper, nickel, and cyanide. Id.The court found that "[s]ince the hazardous waste deposited
at the Davis site has been commingled into an essentially homogeneous
'witches' brew,' it is impossible to allocate discrete portions of the
cleanup cost to any particular type of waste or any particular party."
Id. at 64. As a result, the court made a general finding that "the
evidence does establish hazardous substances produced by Acco-Bristol,
Ashland, Gar, and Perkin-Elmer as well as Morton were deposited at the
Davis Site, that each of them contracted for the disposal and that the
release and threatened release of those kinds of substances triggered
response costs." Id. at 62.
In finding that the appellants' waste contributed to UTC's
cleanup costs, the district court drew a reasonable inference based on
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the evidence. Evidence about the defendants' manufacturing processes
in 1976 and 1977 supports the finding that each defendant generated
waste that contained one or more of the hazardous substances identified
at the Davis site at concentrations exceeding background levels. See
id. at 51. Evidence about the commingling of these substances in the
water and soil at the site supports the finding that the harm caused by
each individual substance could not be remediated separately. The court
thus concluded that the defendants had caused or contributed to cleanup
costs at the site.
The appellants' arguments to the contrary rely on a highly
selective reading of Acushnet Co. v. Mohasco Corp., 191 F.3d 69 (1st
Cir. 1999). The passage they cite states:
It might, of course, make sense to say that a
defendant's release did not 'cause' the
incurrence of response costs when the monies were
expended for purposes wholly unrelated to
responding to environmental contamination. And
we suppose it may even be accurate to say that a
generator or transporter of waste did not cause
a plaintiff to incur remediation costs when that
person did not actually cause any alleged
contamination, or perhaps even where clean up
efforts were directed at cleaning up toxins other
than those attributed to the defendant.
Acushnet, 191 F.3d at 77 n.7 (citation omitted). Based on this
language, the appellants assert that CERCLA contribution plaintiffs
must prove that a defendant's waste contributed more than background
contamination levels and is the type of waste being cleaned up at the
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site. Their attempt to somehow raise the threshold for proving
causation, however, misconstrues the holding of Acushnet.
In Acushnet, a settling defendant brought a contribution
action against a non-settler. The non-settler admitted that it had
discarded waste containing a substance called PAH at the site in
question, but moved for summary judgment on the ground that the
quantity of PAH it disposed was far less than the background level and
tiny in comparison to the amount of PAH dumped by other parties. The
district court granted summary judgment because the plaintiff failed to
create a triable issue of fact about whether the defendant's disposal
of PAH caused cleanup costs to be incurred. We affirmed "on somewhat
different grounds," saying that "[t]o the extent that the court's
ruling may be interpreted to incorporate into CERCLA a causation
standard that would require a polluter's waste to meet a minimum
quantitative threshold, we disagree." Id. at 72. We explained:
To read a quantitative threshold into the
language 'causes the incurrence of response
costs' would cast the plaintiff in the impossible
role of tracing chemical waste to particular
sources in particular amounts, a task that is
often technologically infeasible due to the
fluctuating quantity and varied nature of the
pollution at a site over the course of many
years. Moreover, it would be extremely
difficult, if not impossible, to articulate a
workable numerical threshold in defining
causation. . . . Our own decisions provide no
basis for such an approach. . . . [W]e have never
discussed CERCLA causation in quantitative terms.
Id. at 76-77.
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To be sure, CERCLA allows a defendant to assert a defense
that the liability attributable to it is divisible from that borne by
other parties. See id. at 77 ("[W]here environmental harms are
divisible, a defendant may be held responsible only for his
proportional share of the response costs"). However, once the
plaintiff has established that a defendant disposed of hazardous waste,
Acushnet put the burden of proof on the defendant to show that this
waste did not contribute to cleanup costs. See id. Other courts faced
with the commingling of chemicals that inevitably occurs at many
hazardous waste sites have followed a similar approach. See Tosco
Corp. v. Koch Indus., Inc., 216 F.3d 886, 891 (10th Cir. 2000) ("The
plaintiff in a CERCLA response cost recovery action involving multiple
potentially responsible persons need not prove a specific causal link
between costs incurred and an individual responsible person's waste.");
Control Data Corp. v. S.C.S.C. Corp., 53 F.3d 930, 936 (8th Cir. 1995)
("[A] plain reading of [CERCLA] leads us to the conclusion that once a
party is liable, it is liable for its share, as determined by Section
9613(f), of 'any' and all response costs, not just those costs 'caused'
by its release."); United States v. Alcan Aluminum Corp., 964 F.2d 252,
264-66 (3d Cir. 1992); Amoco Oil Co. v. Borden, Inc., 889 F.2d 664, 670
n.8 (5th Cir. 1989) ("[I]n cases involving multiple sources of
contamination, a plaintiff need not prove a specific causal link
between costs incurred and an individual generator's waste.").
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Neither Acco nor Ashland have any evidence to show that the
many hazardous substances contained in their waste "constitute[] no
more than background amounts of such substances in the environment and
cannot concentrate with other wastes to produce higher amounts."
Acushnet, 191 F.3d at 77. Gar also has no evidence to show that the
copper, cadmium, and cyanide it generated are present below background
levels.
Acushnet also disposes of Gar's additional arguments that its
waste has not contributed to UTC's cleanup costs. Gar's contention
that its five drums of waste were insufficient to contribute more than
background levels of waste presupposes a minimum quantitative threshold
for liability, which Acushnet rejected. See id. at 77.39 Gar also
argues that it should not have to pay for a cleanup directed at VOCs
when its waste contained only metals. The record shows that while the
EPA plan for the Davis site, which drives UTC's cleanup efforts,
focuses primarily on VOCs, it also aims to mitigate the other
pollutants present at the site. According to testimony at trial, UTC
will have to take additional steps to reduce metal contaminants if
those contaminants are still present in the soil at greater than
39 The district court took Gar's relatively minor waste
contribution into account by allocating to the company only .03 percent
of UTC's cleanup costs. Gar itself calls this allocation "minuscule."
At oral argument, it became apparent that the real concern of Gar and
the other appellants is that the government will use the judgment
against them here in a future § 9607 action for the costs of the
groundwater and well remedies which have not yet been recovered.
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background levels after VOC levels have abated. Gar thus has failed to
show that the harm caused by its waste is divisible from the harm
treated in UTC's soil remediation.
5. The Entry of a Declaratory Judgment under § 9613(g)(2) and
the Declaratory Judgment Act
The appellants argue that the district court's entry of a
declaratory judgment was improper because: (1) CERCLA does not provide
for declaratory relief in a contribution action for future cleanup
costs; and (2) the Declaratory Judgment Act does not provide for
declaratory relief in this case because no case or controversy existed
between the parties. To support the latter claim, the appellants argue
that UTC failed to prove that it was likely to incur more than its fair
share of future cleanup costs and that UTC's settlement with the
government did not extinguish the appellants' liability.40 We discuss
each argument in turn.
The appellants argue that CERCLA's declaratory relief
provision, § 9613(g)(2), does not permit UTC to receive declaratory
40The appellants also argue that UTC failed to request declaratory
relief. This argument is easily disposed of. As the district court
pointed out, UTC need not have used the magic word "declaratory
judgment" in its pleading to put the defendants on notice that its
claims could be resolved with a grant of declaratory relief. See Davis
IV, 31 F. Supp. 2d at 60. UTC's complaint asked the court to enter a
judgment to "determine . . . the equitable contribution share of
liability . . . properly allocated to each [party.]" The court's case
management order before trial used similar language. This language
gave the defendants sufficient notice that declaratory relief might be
granted.
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relief for cleanup costs that it incurred after the close of discovery
and continues to incur as it completes the soil remediation. They
correctly point out that the amount that UTC will ultimately pay for
soil remediation is unknown. While the EPA projected a cost of $14
million for soil remediation, this estimate is several years old.
Rather than allowing into evidence more recent figures on the amount of
ongoing and future cleanup costs, the court relied on the EPA estimates
for purposes of the Phase III adjudication, saying that the defendants
could challenge specific expenditures in post-trial proceedings.41
The district court dismissed UTC's claims for past cleanup
costs on the ground that the company had not paid for any cleanup
before the close of discovery.42 See Davis III, 20 F. Supp. 2d at 330.
The court expressed doubts about whether UTC was entitled to
declaratory relief for future costs given the ongoing nature of the
payments and their unknown total amount, but ultimately concluded that
"the evidence presented is sufficient to enable the Court to make a
meaningful allocation based upon the facts presently available." Davis
41The district court "retain[ed] jurisdiction for the purpose of
revising this allocation if and when additional facts are discovered
that were not reasonably available to the parties at the time of trial
and that clearly demonstrate a change in circumstances so significant
that the allocation would be rendered manifestly inequitable." Davis
IV, 31 F. Supp. 2d at 69.
42 UTC's indemnification claims were dismissed "for the same
reason" and because the district court determined that UTC "was not
entitled to indemnification under Rhode Island law." Davis IV, 20 F.
Supp. 2d at 330.
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IV, 31 F. Supp. 2d at 59. The court thus granted declaratory relief
pursuant to CERCLA, 42 U.S.C. § 9613(g)(2), and the Declaratory
Judgment Act, 28 U.S.C. § 2201.
To determine whether the court's grant of declaratory relief
was proper under § 9613(g)(2), we begin with the plain language of the
statute. See United States v. Rivera, 131 F.3d 222, 224 (1st Cir.
1997). Section 9613(g)(2) provides that "[i]n any such action
described in this subsection, the court shall enter a declaratory
judgment on liability for response costs or damages that will be
binding on any subsequent action or actions to recover further response
costs or damages." 42 U.S.C. § 9613(g)(2). The statute does not
explicitly provide for declaratory relief for a contribution action for
future or past response costs. However, nothing in the statute
precludes an interpretation that declaratory relief is available in
both instances. See Boeing Co. v. Cascade Corp., 207 F.3d 1177, 1191
(9th Cir. 2000). The statute suggests this interpretation by adopting
a flexible time line, providing that "[a] person may seek contribution
. . . during or following any civil action under . . . section 9607(a)
of this title." 42 U.S.C. § 9613(f)(1) (emphasis added). This
language anticipates that a defendant in a § 9607 cost recovery action
may initiate a contribution action before its own liability is
established. Consistent with this scheme, a § 9607 defendant whose
liability has been established may be awarded declaratory relief before
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that liability has been fully discharged.
The district court acknowledged that a few courts have held
that § 9613(g)(2) applies to actions brought under § 9607, the vehicle
for an innocent party to recover cleanup costs, and not to actions
brought under § 9613(f), the vehicle for a non-innocent party to seek
contribution from other polluters. See Davis IV, 31 F. Supp. 2d at 590
(citing Reichhold Chems., Inc. v. Textron, Inc., 888 F. Supp. 1116,
1123-24 (N.D. Fla. 1995) and Sun Co. v. Browning-Ferris, Inc., 919 F.
Supp. 1523, 1532 (N.D. Okla. 1996), overruled in part by 124 F.3d 1187(10th Cir. 1997)). However, the Ninth and Tenth Circuits have taken
the position, as we do here, that § 9613(g)(2), the declaratory
judgment provision of CERCLA, applies to § 9613(f) contribution actions
for both past and future response costs. In Boeing Co. v. Cascade
Corp., the Ninth Circuit said:
CERCLA was intended to encourage quick response
and to place the costs on those responsible.
Declaratory relief serves these purposes because
parties, like those in this case, will know their
share of costs before they are incurred . . . .
The costs and time involved in relitigating
issues as complex as these where new costs are
incurred would be massive and wasteful.
Declaratory relief allocating future costs is
therefore consistent with the broader purposes of
CERCLA.
207 F.3d at 1191; see also Tosco Corp., 216 F.3d at 897 ("[W]here, as
here, a responsible party chooses to go to trial and future response
costs are likely to be incurred, but the exact amount remains unknown,
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a judgment on proportional liability is an appropriate remedy.").43 We
agree with these rationales. As the district court said, in this case
"allocation helps to alleviate the hardship that would be visited upon
the [PRP] seeking contribution if that PRP was, in effect, required to
finance the entire cleanup operation before getting a determination
regarding the shares attributable to the other PRP's." Davis IV, 31 F.
Supp. 2d at 58.
Since we find that § 9613(g)(2) applies to § 9613(f)
contribution actions for both past and future response costs, we need
not address in detail the appellants' arguments that the district
court's entry of a declaratory judgment was improper under the
Declaratory Judgment Act because there was no case or controversy
permitting the court to act. We address the arguments only because
they apply, at least by implication, to the availability of declaratory
relief under § 9613(g)(2).
First, the appellants say that there was no controversy
between the parties, as the Act requires, because UTC did not prove
that it would pay more than its fair share of cleanup costs. They
argue that UTC cannot prove that it is likely to pay more than its fair
43Other courts have also reasoned that declaratory relief furthers
CERCLA's goals in finding that the entry of such relief is mandatory in
§ 9607 cost recovery actions. See Dent v. Beazer Materials & Servs.,
Inc., 156 F.3d 523, 532 (4th Cir. 1998); Kelley v. E.I. DuPont De
Nemours & Co., 17 F.3d 836, 844 (6th Cir. 1994) ("The fact that future
costs are somewhat speculative is no bar to a present declaration of
liability.") (internal quotation marks omitted).
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share of cleanup costs because it began incurring those costs only
shortly before trial and offered no evidence about the amount of those
costs.
The Declaratory Judgment Act provides: "In a case of actual
controversy within its jurisdiction . . . any court of the United
States, upon the filing of an appropriate pleading, may declare the
rights and other legal relations of any interested party seeking such
declaration, whether or not further relief is or could be sought." 28
U.S.C. § 2201. Here, the district court observed:
the premise underlying UTC's request for a
judgment 'determining . . . the equitable
contribution share of liability for the site
properly allocated to each [party]' is that, at
some time in the future, it is likely that UTC
will be required to pay more than its fair share
of the alleged common liability; and, therefore,
that it will be entitled to contribution from the
defendants.
Davis IV, 31 F. Supp. 2d at 58 (alterations in original). For the
principle that a PRP seeking contribution must prove that it has paid
more than its fair share, the court relied on United Tech. Corp. v.
Browning-Ferris Indus., Inc., 33 F.3d 96, 100 (1st Cir. 1994) (holding
that CERCLA allows a non-innocent party bringing a § 9613(f) action
"only to seek recoupment of that portion of his expenditures which
exceeds his pro rata share of the overall liability--in other words, to
seek contribution rather than complete indemnity"). The district court
set UTC's share as 1.54 percent of the total waste at the Davis site
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based on the volume of its waste established by the evidence. See
Davis IV, 31 F. Supp. 2d at 67. The court translated this 1.54 percent
liability share into $754,600, using an estimate of $55 million for
total cleanup and enforcement costs. See id. at 69. Reasoning that
UTC was bound by the proposed consent decrees to pay at least $10.35
million, the court found that UTC had necessarily incurred more than
its fair share of cleanup costs.44 See id.The appellants' argument to the contrary fails for the same
reasons that led us to reject the argument that the district court had
no authority to enter a consent decree. UTC's agreement in Consent
Decree I to make a cash payment and perform the soil remediation
created a fixed obligation subject only to the court's approval. UTC
did not have to actually make the payments to which it agreed to show
that it was liable for more than its fair share of the total costs of
cleanup. The ongoing nature of the work and the fact that its ultimate
cost was not known at trial did not affect the district court's ability
to consider the evidence that other PRPs contributed to the waste in
the soil, and to determine whether some of UTC's costs should thus be
allocated to them.
The appellants also argue that there is no case or
44The court reached this figure by deducting the amounts that UTC
can recoup from other PRPs pursuant to the other partial consent
decrees from the $16.8 million it agreed to pay pursuant to Consent
Decree I. We note without resolving the issue that the government sets
UTC's minimum payment at $9.3 million.
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controversy between the parties because UTC has not extinguished their
entire liability. As we have discussed, the partial consent decrees do
not cover an estimated $21.7 million of the government's projected
response costs. Because the government can still seek to recover those
costs from them, the appellants argue that "[p]ermitting UTC to recover
from the defendants under these circumstances would expose the
defendants to the CERCLA equivalent of 'double jeopardy.'" In support
of their position, the appellants cite United Techs. Corp., which
defined the term "contribution" as "a claim by and between jointly and
severally liable parties for an appropriate division of the payment one
of them has been compelled to make." 33 F.3d at 99 (internal quotation
marks omitted).
The appellants' argument that UTC is not entitled to
contribution because it has not extinguished the appellants' entire
liability fails in light of the plain language of § 9613(f):
A person who has resolved its liability to the
United States or a State in an administrative or
judicially approved settlement shall not be
liable for claims for contribution regarding
matters addressed in the settlement. . . .
A person who has resolved its liability to the
United States or a State for some or all of a
response action or for some or all of the costs
of such action in an administrative or judicially
approved settlement may seek contribution from
any person who is not party to a settlement
referred to [above].
42 U.S.C. § 9613(f)(2) & (3)(B) (emphasis added). CERCLA clearly
anticipated that some settlements, like the one in this case, would
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cover only a portion of the total cleanup costs for a hazardous waste
site. The statute does not impose a requirement that a contribution
action plaintiff must settle the entire cost of cleaning up a site
before it can seek contribution.
The appellants' complaint that they may bear a
disproportionate share of the total liability if the government chooses
to bring further proceedings against them is part of the risk they
assumed in choosing not to settle. As we have said before:
CERCLA seeks to provide EPA with the necessary
tools to achieve prompt cleanups. One such tool
is the ability to foster incentives for timely
settlements. To this end, 42 U.S.C. § 9613(f)(2)
provides that a party who settles with the
government 'shall not be liable for claims for
contribution regarding matters addressed in the
settlement.' Because only the amount of the
settlement, not the pro rata share attributable
to the settling party, is subtracted from the
aggregate liability of the nonsettling parties,
section 9613(f)(2) envisions that nonsettling
parties may bear disproportionate liability.
This paradigm is not a scrivener's accident. It
was designed to encourage settlements and provide
PRPs a measure of finality in return for their
willingness to settle.
United Techs. Corp., 33 F.3d at 102-03 (citations and internal
quotation marks omitted); see also Charles George, 34 F.3d at 1086("non-settling defendants . . . are potentially liable for the full
difference between the costs of cleanup and the total amount paid by
the settling PRPs"). While our precedents on CERCLA consent decrees
are attentive to the fairness of the settlements for settling versus
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non-settling PRPs, they do not go so far as to protect PRPs who choose
not to settle from the consequences of non-settlement imposed by CERCLA
itself. See Charles George, 34 F.3d at 1088. In sum, the district
court's entry of a declaratory judgment was proper.
6. Morton's Liability
The district court found Morton International liable for
hazardous waste dumped by Thiokol Corporation Chemical Division
(Thiokol) at the Davis site. For purposes of this case, Morton has
stipulated that it is a successor to Thiokol's liabilities.
a. Claims of Clearly Erroneous Factual Findings
Morton's liability, unlike that of other parties whose waste
was hauled by CWR, depends on the court's findings about the waste
practices of CCC. Thiokol was one of the approximately 130 companies
from whom CCC collected waste during 1976 and 1977. Reasoning that
since CCC made 47 deliveries to Davis, and since "there is no reason to
believe that CCC handled Thiokol's waste any differently than the waste
of its other 130 customers," the district court found that Thiokol's
waste went to the Davis site, and thus found Morton liable as an
arranger. Davis IV, 31 F. Supp. 2d at 55. However, because there was
no evidence regarding the volume of Thiokol's waste transported by CCC,
or the volume of waste from other customers that CCC transported to the
Davis site, the court concluded that it was unable to allocate to
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Morton a share of the cleanup costs.45 See id.We begin with the evidence about CCC's practices. CCC was
located in Elizabeth, New Jersey and was owned and operated by William
Carracino. Carracino testified that CCC began sending waste to Rhode
Island in 1977, initially to Sanitary Landfill. Beginning in May, the
Capuanos began diverting the CCC waste to the Davis site, and the CCC
drivers proceeded straight there without stopping first at Sanitary
Landfill. CCC continued to bring waste to the Davis site until
September, when Davis refused to accept the waste and seized CCC's
truck because CCC was overdue in its payments. Based on the 47 trips
CCC made to the Davis site between May and the first week of July, and
the volume of waste transported during those weeks, the district court
estimated that CCC delivered a total of 441,450 gallons of waste to the
Davis site. Testimony by Carracino and CCC driver John Mayo about
these trips to Rhode Island was corroborated by toll receipts and petty
cash vouchers.
CCC began collecting Thiokol's waste in 1971. This waste,
generated by three separate plants in New Jersey, averaged
approximately 22,000 gallons per year. Much of the waste was
identified on shipment forms prepared by Thiokol simply as
45As became clear at oral argument, Morton still appeals because
of its concern that the government will use the judgment of liability
in this case to pursue a § 9607 action for the cost of the groundwater
and well remediation that remains unallocated.
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"miscellaneous chemical waste." Testimony by a former Thiokol employee
indicated that Thiokol did not separate its waste. In particular,
Thiokol did not separate its chlorinated waste until 1979. The waste
was disposed of primarily in 55-gallon drums, but Thiokol used drums of
smaller sizes, as well as 5-gallon pails. The waste contained
flammable liquids and spent solvents, including methylene chloride,
methyl ethyl ketone (MEK), and 1,1,1-TCA, all of which were found at
the Davis site. Other waste picked up on a more occasional basis
included urethane, filter cakes used in producing plasticizers, and
lubricating oil.
CCC handled waste it collected in a variety of ways. It sold
some liquid waste to salvagers, burned some of the flammable liquids in
an incinerator on the Elizabeth site, transported waste to various dump
sites, and stored some waste on the premises for future disposal.
Carracino testified that solid waste, polymers, and sludges were sent
straight from CCC to disposal sites because of their tendency to clog
the incinerator. CCC employee John Prahm, who operated the
incinerator, corroborated that testimony. Waste shipment forms confirm
that CCC picked up polymers from Thiokol.
Evidence at trial indicated that CCC's incinerator did not
effectively destroy many chemicals -- particularly chlorinated waste --
because it did not operate at a sufficiently high temperature. An
expert witness testified that the incinerator produced a sludge or
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residue, which was itself a hazardous waste, because of this
inefficient operation. Prahm testified that this residue from the
incinerator was placed in drums for disposal. Evidence regarding
Thiokol's disposal practices supports an inference that some of its
flammable waste likely went to the Davis site as residue from the
incinerator. More specifically, Thiokol did not separate chlorinated
waste from unchlorinated waste, and chlorinated waste was not
effectively destroyed in the incinerator because it required a higher
temperature. Thus, we cannot conclude that the district court erred in
finding that at least some of Thiokol's waste "consisted of flammable
solvents that probably were incinerated," Davis IV, F. Supp. 2d at 55,
and that because there is no basis for finding that Thiokol's waste was
treated differently from other waste at CCC, the hazardous residue
produced by the incineration of such waste was likely placed in drums
and transported to the Davis site.
Thiokol's disposal of waste in 5-gallon pails further
supports the district court's finding of liability. UTC offered the
deposition testimony of a former Thiokol employee, Melvin Schulman,
that Thiokol disposed of some liquid waste in spring-top, 5-gallon
cans. Waste shipment forms indicate that CCC picked up these cans for
disposal. A notation on at least one cancelled check drawn on CCC's
account reads "5 gal. pails to RI, 6/8/77." Carracino confirmed in his
deposition testimony that the notation was in his writing and that the
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check was payment for dumping waste. Davis also testified at trial
that he recalled receiving loads of waste in which 5-gallon pails,
containing liquid waste, had been transported to his site on top of 55-
gallon drums. Davis specifically recalled that these shipments came
from New Jersey. While the testimony regarding these 5-gallon pails
does not establish conclusively that Morton's waste was dumped at the
Davis site, the district court was not clearly erroneous in crediting
this testimony and considering it part of the evidence tending to
establish that it was more probable than not that Morton's hazardous
waste was shipped by CCC to the site.
Morton argues that "the mere presence of 1,1,1-TCA in
Morton's waste and its presence at the Davis site does not, without
more, establish that Morton's waste was located at the Davis site."
However, the district court did not base its finding that Morton was
liable solely on the presence of that chemical at the site. Rather,
the district court inferred from other evidence that Thiokol's waste
was taken to the Davis site and noted that such an inference "finds
some support" in the fact that the chemical was found at the site.
Davis IV, 31 F. Supp. 2d at 55.
b. Claims of Legal Error
Morton argues that the district court improperly shifted the
burden of proof to Morton, requiring it to show that it had not dumped
waste at the Davis site, rather than requiring UTC to prove each
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element of its claim for contribution. Morton cites New Jersey
Turnpike Auth. v. PPG Indus., Inc., 197 F.3d 96, 105 (3d Cir. 1999) for
the proposition that UTC "must offer some proof that [the defendants]
deposited, or caused the disposal of, [the waste] at each of the sites
at issue in this case." Morton seems to construe this requirement of
"some proof" as a requirement for direct, not circumstantial proof.
However, for reasons explained above, UTC introduced adequate
circumstantial evidence that Thiokol deposited waste at the Davis site.
That circumstantial evidence distinguishes this case from New Jersey
Turnpike Authority, where the plaintiff introduced no evidence
regarding the transporters the defendants may have used and relied only
on "the conceded large scale production of [the waste] by the
appellees, the need for its local disposal, the proximity of the
appellees' production facilities to the sites at issue, and the use of
this material as fill over the years." Id. at 109. Here, UTC
introduced evidence of Thiokol's production of hazardous waste, CCC's
records regarding pickups of waste and deliveries to the Davis site,
and CCC's practices in handling different kinds of waste. We do not
agree with Morton that the district court engaged in an improper
burden-shifting analysis in finding, based on this evidence, that some
of Thiokol's waste was dumped at the Davis site.
Finally, Morton argues that it was impermissible for the
district court to find it liable as an arranger because the court
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declined to allocate to Morton a specific share of responsibility.
However, Acushnet, 191 F.3d 69, precludes this argument. Acushnet
emphasizes the broad discretion of a district court in allocating
responsibility: "A court, in evaluating contribution claims under §
9613(f), is 'free to allocate responsibility according to any
combination of equitable factors it deems appropriate.'" Id. at 78
(quoting O'Neil v. Picillo, 883 F.2d at 183). The district court here
found that "the fairest, and most practical, measure of relative
responsibility is the quantity or volume of hazardous waste
attributable to each party." Davis IV, 31 F. Supp. 2d at 64. Because
there was no way to calculate the volume of waste Thiokol dumped at the
Davis site, the court declined to allocate a share of responsibility to
Morton. This determination was well within the district court's broad
discretion.
Morton argues that the district court's decision not to
allocate a share of responsibility to Morton should have compelled a
finding that Morton was not liable because Thiokol's waste could not be
located and identified at the Davis site.46 However, as we have noted,
we said in Acushnet that there is no minimum quantity threshold for
imposing liability on polluters, 191 F.3d at 76, adding that "[i]n an
46Morton also claims that the district court erred in finding
liability without applying a standard of "locating and identifying" its
waste at the Davis site. We have already rejected an interpretation of
§ 9613(f) that would require an arranger's waste to be specifically
located at the Davis site with direct evidence.
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appropriate set of circumstances, a tortfeasor's fair share of the
response costs may even be zero, id. at 78. The district court's
decision not to allocate responsibility to Morton is consistent with
Acushnet, and Morton has not even attempted to explain why the
principles of that opinion should not apply here.
7. Successor-in-Interest Liability for Gar
Black & Decker ("B & D") argues that the district court erred
in finding that it, rather than Electroformers, Inc., is Gar's
corporate successor-in-interest and thus liable for Gar's disposal of
waste at the Davis site. Gar's corporate history is as follows. In
1977, MITE Corporation owned Gar Electroforming Division, the
manufacturing facility in Danbury, Connecticut that generated the
hazardous waste disposed of at the Davis site. In November 1978, MITE
agreed to sell Gar's assets to Electroformers, Inc., which had
incorporated a month earlier. The Asset Purchase Agreement signed by
the parties in January 1979 provided that Electroformers would buy
certain accounts receivable, furniture, fixtures, machinery, equipment,
trademarks and trade names, business records, inventory and customer
lists. Electroformers used the name "Gar Electroformers Division" for
a time after the sale, subleased the Danbury facility from MITE, and
continued to make the same product with the same manufacturing process
and to use the same employee pension plan. MITE agreed not to compete
with Electroformers in its area of business for ten years. The Asset
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Purchase Agreement provided that the "[b]uyer will not assume any of
the liabilities of the Gar Electroforming Division existing on the date
of the closing and MITE agrees to defend any claims relating thereto
presented against Buyer and to save Buyer harmless from any such
claims." MITE also represented that, to its knowledge, it was not in
violation of any environmental or pollution-related law or ordinance.
In 1985, the Emhart Corporation bought MITE. In 1989, B & D acquired
Emhart, which continues to exist as B & D's wholly owned subsidiary.
UTC sued both B & D and Electroformers for contribution as
Gar's successor-in-interest. Both defendants filed motions for summary
judgment. The district court referred to a magistrate judge the
question of which entity, B & D or Electroformers, should be liable as
Gar's successor. The magistrate judge discussed the choice between the
state law and federal common law tests for determining corporate
successor liability, and found that B & D was liable under either
analysis because Electroformers bought Gar's assets from MITE through
a true assets purchase agreement. The district court adopted this
recommendation.
On appeal, B & D argues that the federal common law
"substantial continuation" test should determine corporate successor
liability under CERCLA, and that Electroformers should be found liable
using this test. Electroformers and UTC47 argue that Connecticut's
47 UTC took the opposite position before the district court.
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"mere continuation" test should apply,48 and that Electroformers should
not be found liable using either the "substantial continuation" or the
"mere continuation" tests. We begin with the choice of law question,
which we review de novo. See Kukias v. Chandris Lines, Inc., 839 F.3d
860, 861 (1st Cir. 1988).
The "mere continuation" test is an exception to the common
law rule that the buyer of a corporation's assets (as opposed to its
stock) does not incur liability for the divesting corporation's debts.
See Ed Peters Jewelry Co. v. C & J Jewelry Co., 124 F.3d 252, 266 (1st
Cir. 1997). The test is designed to protect creditors from sales that
seek to evade valid claims. See id. Successor liability is an
equitable doctrine, and courts traditionally consider five factors: (1)
the divesting corporation's transfer of assets; (2) payment by the
buyer of less than fair market value for the assets; (3) continuation
by the buyer of the divesting corporation's business; (4) a common
officer of the buyer and divesting corporations who was instrumental in
the transfer; and (5) inability of the divesting corporation to pay its
debts after the assets transfer. See id. at 268.
The federal "substantial continuation" test, which has been
adopted in past cases by a few circuits, see B.F. Goodrich v. Betkoski,
99 F.3d 505, 519 (2d Cir. 1996); United States v. Carolina Transformer
48The Asset Purchase Agreement calls for application of
Connecticut law, and the parties do not argue that another state's law
should apply.
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Co., 978 F.2d 832, 837 (4th Cir. 1992), requires courts to consider
eight factors: "(1) retention of the same employees [by the buyer]; (2)
retention of the same supervisory personnel; (3) retention of the same
production facilities in the same location; (4) production of the same
product; (5) retention of the same name; (6) continuity of assets; (7)
continuity of general business operations; and (8) whether the buyer
holds itself out as a continuation of the" divesting corporation,
Carolina Transformer Co., 978 F.2d at 838. In general, before creating
a federal rule courts must consider whether federal interests require
a nationally uniform body of law, whether applying state law would
frustrate or conflict with a specific federal objective, and the extent
to which a federal rule would disrupt commercial relationships
predicated on state law. See United States v. Kimbell Foods, Inc., 440
U.S. 715, 728-29 (1979). In adopting the "substantial continuation"
test, courts have cited CERCLA's "broad remedial purpose" and the
"importance of national uniformity." See B.F. Goodrich, 99 F.3d at
519; Carolina Transformer Co., 978 F.2d at 837.
Other courts, however, have rejected the need for a federal
test. See, e.g., Redwing Carriers, Inc. v. Saraland Apartments, 94
F.3d 1489, 1501-02 (11th Cir. 1996); City Mgmt. Corp. v. U.S. Chem.
Co., Inc., 43 F.3d 244, 253 n.12 (6th Cir. 1994). These cases heed the
Supreme Court's warnings that courts should presume that matters left
unaddressed are subject to state law when a "comprehensive and
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detailed" federal statutory regime is at issue, and that cases in which
the creation of a "special federal rule would be justified" generally
are "few and restricted." See O'Melveny & Meyers v. Fed. Deposit Ins.
Corp., 512 U.S. 79, 85 & 87 (1994).
We have concluded that the majority rule is to apply state
law "so long as it is not hostile to the federal interests animating
CERCLA," and have applied Massachusetts contracts law to determine an
issue of successor liability. John S. Boyd Co., Inc. v. Boston Gas
Co., 992 F.2d 401, 406 (1st Cir. 1993). Recent Supreme Court precedent
confirms that Boyd's approach is correct. The Court applied state
corporation law in a recent CERCLA case involving the potential
liability of a parent corporation for its subsidiary and left little
room for the creation of a federal rule of liability under the statute.
See United States v. Bestfoods, 524 U.S. 51, 63 (1998) ("CERCLA is . .
. like many another congressional enactment in giving no indication
that the entire corpus of state corporation law is to be replaced
simply because a plaintiff's cause of action is based upon a federal
statute.") (internal quotation marks omitted). The Court's statements
in Bestfoods and O'Melveny demonstrate that to justify the creation of
a federal rule, "there must be a specific, concrete federal policy or
interest that is compromised by the application of state law."
Atkison, Topeka & Santa Fe Railway Co. v. Brown & Bryant, Inc., 159
F.3d 358, 363-64 (9th Cir. 1998) (internal quotation marks omitted).
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We see no evidence that application of state law to the facts of this
case would frustrate any federal objective. Connecticut's "mere
continuation" test thus is the correct test for determining successor
liability for the hazardous waste disposed by Gar.
In applying the "mere continuation" test, the magistrate
judge recommended successor liability for B & D rather than
Electroformers based on the following facts: (1) MITE and
Electroformers did not share a common officer or director who was
involved in the transfer; (2) MITE received fair compensation for Gar;
(3) MITE continued to operate its other businesses; (4) MITE remained
financially viable.49 B & D did not challenge these factual findings,
but objects to the magistrate's conclusion that Electroformers
purchased Gar's assets through a true asset purchase agreement on the
grounds that Electroformers shared certain commonalities with Gar and
essentially continued its business. In support of this position, B &
D notes that Electroformers made the same product that Gar made when
MITE owned it, employed the same supervisory employees, used the same
production facility and the same customer base, and initially operated
under Gar's name.
The facts emphasized by B & D do not outweigh those cited by
the magistrate judge to support the finding that Electroformers merely
49The magistrate judge also found B & D liable under the federal
law "substantial continuation" test. Because we apply the state law
test, we do not reach this issue.
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bought Gar's assets from MITE. MITE's receipt of fair compensation for
the Gar division and the lack of common officers and directors between
the two entities indicate that its sale of Gar's assets to
Electroformers was an arms-length deal. Moreover, MITE continued as a
financially viable business following the sale, leaving little reason
to except it from the rule that successor liability does not transfer
when one company buys another's assets. See Ricciardello v. J.W. Gant
& Co., 717 F. Supp. 56, 59 (D. Conn. 1989) ("A sale of assets by one
corporation to another, in good faith and for valuable consideration,
does not impose any liability on the buyer for the debts of another.")
(citing Davis v. Hemming, 127 A. 514, 518 (Conn. 1925)). The district
court did not err in adopting the magistrate judge's recommendation
imposing successor liability on B & D rather than Electroformers.50
8. UTC's Appeal
a. The Judgment in Favor of Macera
After UTC rested its case, the district court rendered a
bench decision granting judgment as a matter of law pursuant to Fed. R.
Civ. P. 52(c) in favor of BFI and Macera. Macera Brothers Container
50B & D also argues that the magistrate judge's recommendation of
successor liability for B & D rather than for Electrofomers conflicts
with the magistrate judge's recommendation of successor liability for
BFI, the purchaser of Macera. Since the district court did not adopt
the magistrate judge's recommendation of liability for BFI, any
disparity between the two recommendations, if there is one, lacks legal
significance.
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Service, Inc.51 hauled waste to various facilities for disposal.
Michael Macera and Robert Cece were two principals in the corporation.
BFI Waste Systems of North America, Inc. is in this action only as
successor to Macera.52
The court explained its reasons for the judgment in a written
memorandum and order after the trial concluded. See Davis III, 20 F.
Supp. 2d at 329.53 UTC appeals this ruling on two grounds. First, UTC
claims that it proved Macera was liable as a transporter under CERCLA.
Second, UTC argues that it proved Macera was liable as an arranger of
hazardous waste, and that its claim of liability on this theory was
timely asserted. Finally, BFI argues that if this Court finds that the
district court erred in granting the judgment in favor of BFI and
Macera, BFI is still not liable because it is not Macera's corporate
successor. For the reasons that follow, we affirm the district court's
judgment on partial findings in favor of BFI and do not reach BFI's
51Macera Brothers Container Service, Inc. changed its name to
Macera Disposal, Inc. in 1984. In 1987, Macera Disposal was merged
into M & C Enterprises, Inc. BFI purchased the assets of M & C
Enterprises in July 1987.
52We will refer collectively to Macera Brothers Container Service,
Michael Macera, Robert Cece, and BFI as "Macera" when discussing the
claims regarding transporter and arranger liability.
53We review for clear error the factual findings made as part of
the district court's judgment on partial findings. "Findings of fact,
whether based on oral or documentary evidence, shall not be set aside
unless clearly erroneous." Fed. R. Civ. P. 52(a) (emphasis added).
See also Touch v. Master Unit Die Prods., Inc., 43 F.3d 754, 757 (1st
Cir. 1995).
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claim regarding successor liability.
1. Transporter Liability
CERCLA imposes transporter liability on "any person who
accepts or accepted any hazardous substances for transport to disposal
or treatment facilities, incineration vessels or sites selected by such
person" from which there is a release of hazardous substances. 42
U.S.C. § 9607(a)(4) (emphasis added). Noting that the statute itself
does not define the term "selected," the district court in this case
stated: "a person 'selecting' a site is a person who chooses that site
from a group of possible sites." Davis III, 20 F. Supp. 2d at 333.
Adopting a standard of "[a]ctive and substantial participation," the
court ruled that "determining whether, or to what extent, a transporter
made or actively participated in the site selection decision turns on
the nature of the dealings between the transporter and the generator."
Davis III, 20 F. Supp. 2d at 333-34. The court found that UTC had
failed to present sufficient evidence regarding the negotiations
between Macera and the generators for whom it hauled waste. Moreover,
because there was evidence that some of the waste hauled by Macera came
from UTC, the court found that UTC should have presented evidence
regarding its own dealings with Macera in order to prove that Macera
actively participated in the selection of the Davis site for UTC's
waste. See Davis III, 20 F. Supp. 2d at 334.
The district court applied the correct legal standard in
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determining whether Macera is a transporter under CERCLA. See Tippins
Inc. v. USX Corp., 37 F.3d 87, 94 (3d Cir. 1994). In Tippins, the
court stated:
[W]e believe that a person is liable as a
transporter not only if it ultimately selects the
disposal facility, but also when it actively
participates in the disposal decision to the
extent of having had substantial input into which
facility was ultimately chosen. . . The
substantiality of the input will be a function,
in part, of whether the decisionmaker relied upon
the transporter's special expertise in reaching
its final decision.
37 F.3d at 94-95 (citation omitted). See also B.F. Goodrich, 99 F.3d
at 520; United States v. USX Corp., 68 F.3d 811, 820 (3d Cir. 1995).
In contrast to a transporter who actively participated in the selection
of a site, Tippins described circumstances where a transporter that
merely followed the orders of a generator would not be liable:
We emphasize that for liability to attach, a
transporter must be so involved in the selection
process that it has substantial input into the
disposal decision. A transporter clearly does
not select the disposal site merely by following
the directions of the party with which it
contracts. . . . In such cases, the transporter
is no more than a conduit of the waste and its
connection with the material is the most
attenuated among potentially responsible parties.
. . . Congress intended such transporters to
avoid liability.
37 F.3d at 95 (citations and internal quotation marks omitted). See
also Interstate Power Co. v. Kansas City Power & Light Co., 909 F.
Supp. 1284, 1289 (N.D. Iowa 1994) (granting summary judgment to party
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alleged to be a transporter where evidence showed the party had no
discretion in hauling waste to the site but merely followed the orders
of a waste generator). Thus, Tippins distinguishes between
transporters that actively participate in the selection decision or
have substantial input in that decision, and transporters that merely
follow the directives of the generator. UTC has not explained why we
should not follow the approach in Tippins. Accordingly, we examine the
facts to determine whether the district court was clearly erroneous in
concluding that Macera did not actively participate in the decision to
transport waste to the Davis site.
The only evidence of Macera's participation in selecting the
Davis site was the testimony of William Davis regarding his dealings
with Robert Cece. Davis testified that he had known Cece for a long
time, and that Cece visited the site on one occasion to discuss the
possibility of dumping waste there. Davis also stated that he was paid
by Macera for this dumping. The following excerpt from the district
court's opinion summarizes its reasoning regarding the inferences that
could be drawn from this evidence:
The fact that Cece approached Davis and made
arrangements to dump at the Site could support a
reasonable inference that Cece actively and
substantially participated in the selection of
the Site. On the other hand, it also would be
reasonable to infer that Cece was acting at the
direction of UTC, the generator of the waste.
Ordinarily, the former inference might be more
plausible. However, under these circumstances,
its plausibility is eroded by the dearth of
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evidence regarding the dealings between the
Macera defendants and UTC.
Davis III, 20 F. Supp. 2d at 334. The district court's determination
on this matter is essentially a refusal to choose between two equally
plausible inferences where there is no reason to support one inference
over the other. Because rulings under Rule 52(c) are reviewed for
clear error, see Fed. R. Civ. P. 52(a), we defer to the district
court's decision not to draw any inference.
In an attempt to evade the clear error standard of review for
factual findings of the district court, UTC claims that the district
court made an error of law by impermissibly drawing an adverse
inference regarding UTC's failure to present evidence of its
negotiations with Macera about the hauling of its waste. UTC quotes
the following language from the court's written opinion in support of
this claim:
Since evidence of the dealings between UTC and
the Macera defendants was readily available to
and under the control of UTC, UTC's failure to
present that evidence or to explain why it was
unable to do so, gives rise to an inference that
the evidence would have been unfavorable to UTC.
. . . In short, the absence of evidence regarding
the Macera defendants' dealings with UTC and the
fact that such evidence was within UTC's control
cause this Court to find that UTC has failed to
establish that Macera Brothers 'selected' the
Davis Site.
Davis III, 20 F. Supp. 2d at 334 (citation omitted). The case cited by
the district court in support of this inference provides that two
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conditions must be satisfied before an adverse inference about the non-
production of evidence may be drawn. See Commercial Ins. Co. v.
Gonzalez, 512 F.2d 1307, 1314 (1st Cir. 1975). The evidence must be
"specially available" to the non-producing party, and that party must
have "had some reason to suppose that non-production would justify the
inference." Id. UTC argues that "specially available" means evidence
within its control but not within the control of Macera. Thus, UTC
claims that the inference cannot apply in this case because Macera also
has knowledge of any negotiations between Macera and UTC regarding the
disposal of UTC's waste. Cf. Kean v. Comm'r of Internal Revenue, 469
F.2d 1183, 1187 (9th Cir. 1972) ("Where a potential witness is equally
available to both parties, no inference should be drawn from the
failure of a party to call such witness.").
We conclude that UTC, with its reliance on the "adverse
inference" argument, misses the essential point of the district court's
analysis. The district court expressed its concern over UTC's overall
failure to present any evidence whatsoever about Macera's relationship
with generators -- both UTC and other unidentified parties -- for whom
it hauled waste. Several paragraphs before discussing the inference
drawn against UTC, the court stated: "UTC has failed to present
sufficient evidence regarding those dealings [between Macera and
generator defendants] to sustain its burden of proving that Macera
Brothers 'selected' the Davis Site." Davis III, 20 F. Supp. 2d at 334.
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The district court's conclusion about the insufficiency of the evidence
at this point in its analysis makes the propriety of the adverse
inference irrelevant. The court found against UTC simply because UTC
failed to meet its burden of proof. In light of that finding, any
adverse inference that might be drawn from UTC's failure to produce
evidence of its own negotiations with Macera was not necessary to the
district court's conclusion. We conclude, therefore, that the district
court did not rely improperly on an adverse inference and affirm its
finding that UTC did not present sufficient proof that Macera selected
the Davis site.
2. Arranger Liability
UTC also argues that it proved that Macera was liable as an
arranger of waste under CERCLA. Macera claims that UTC's assertion of
an arranger claim is untimely. In the 1991 third-party complaint
originally naming Macera as a defendant, UTC alleged only that Macera
was liable as a transporter of waste. The district court entered a
case management and scheduling order in December 1995 providing that
"[a]ll cross-claims and counterclaims are deemed made and denied,
except that contractual claims for indemnity must be specifically
plead." The order also specified that amendments to third-party
complaints had to be filed before January 2, 1996.
After the case was transferred to Chief Judge Torres, he
entered an order in January 1998 providing:
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On December 14, 1995, an order was entered
providing that all parties were deemed to have
asserted claims, cross-claims and counterclaims
against all other parties for contribution and/or
indemnity without the need for specifically
pleading such claims.
Whereas it is impossible to determine what
parties, in fact, are asserting such claims, the
nature of any such claims or the basis for any
such claims . . .
it is hereby ORDERED that on or before February
15, 1998, each party asserting a claim, cross-
claim or counterclaim for contribution and/or
indemnity shall, if such party has not already
done so, file and serve pleadings setting forth
such claim. Such pleadings shall specify the
precise nature and basis of each claim asserted.
Relying on that order, UTC filed an amended third-party complaint
against Macera, alleging for the first time that Macera was also liable
as an arranger. In its answer, Macera objected to this amendment as
untimely. For reasons that are unclear, the issue of whether UTC
timely pled an arranger claim against Macera was not resolved before
trial. However, the district court addressed this dispute during oral
argument on Macera's Rule 52 motion for judgment after UTC rested its
case. When UTC's lawyer first mentioned arranger liability, the
following exchange occurred:
THE COURT: Arranger didn't come into this until
much later. There is nothing about, there is no
arranger liability theory pled in the original
complaint against Cece, was there?
UTC'S COUNSEL: There was no arranger liability
pled in our original complaint. We did take
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advantage of Your Honor's invitation to correct
the pleadings in [January].
THE COURT: Not correct the pleadings, not to
correct the pleadings. Make it clear who was
asserting claims against whom, that was the -
After additional discussion on the issue, the district court stated:
And I certainly don't think that the attempt to
include the arranger theory in the specific
claims that the Court required parties to assert
just before the case went to trial, I don't think
that that invitation or requirement that the
parties plead their - let the Court know who they
were asserting claims against constituted a
license to amend the pleadings and raise new
theories, and there is no question that arranger
liability is significantly different from hauler
liability.
Thus, the district court ruled that its order of January 1998 did not
authorize UTC to assert a belated claim of arranger liability. We
defer to this interpretation because the district court was uniquely
positioned to explain the meaning of its own pretrial order. See
Martha's Vineyard Scuba Headquarters, Inc. v. Unidentified, Wrecked &
Abandoned Steam Vessel, 833 F.2d 1059, 1066-67 (1st Cir. 1987) ("We
have noted before the special role played by the writing judge in
elucidating the meaning and intendment of an order which he
authored."); Lefkowitz v. Fair, 816 F.2d 17, 22 (1st Cir. 1987)
("[U]ncertainty as to the meaning and intendment of a district court
order can sometimes best be dispelled by deference to the views of the
writing judge."). We reject UTC's argument that the order authorized
it to amend its complaint.
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Next, UTC argues that the district court erred in denying UTC
permission to amend its complaint to conform to the evidence offered at
trial. "When issues not raised by the pleadings are tried by express
or implied consent of the parties, they shall be treated in all
respects as if they had been raised in the pleadings." Fed. R. Civ. P.
15(b). "Such late pleading amendments may be allowed under Rule 15(b)
at the discretion of the court, but only to the extent that the party
opposing the amendment will not be unduly prejudiced." Campana v.
Eller, 755 F.2d 212, 215 (1st Cir. 1985) (emphasis added). Where the
party seeking amendment of the pleadings has shown no justification for
its delay in doing so, we have affirmed the trial court's ruling to
deny the amendment. See id. at 216. UTC has not even attempted to
explain its failure to amend the pleadings at an earlier date.
Still, UTC argues that we should reverse the district court's
determination on this issue because Macera did not suffer prejudice as
a result of UTC's untimely pleading of the arranger claim. UTC insists
that "the evidence admitted to prove 'transporter' liability was no
different than the proof that established 'arranger' liability."
However, any lack of prejudice to Macera is irrelevant because the
district court gave other reasons for its ruling. We consider
prejudice to the non-moving party as one factor to be weighed in
permitting an untimely amendment to the pleadings. See, e.g., Campana,
755 F.2d at 215. In other words, a finding that the non-moving party
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would not be prejudiced by an untimely amendment does not compel a
determination that the amendment is appropriate.
UTC also argues that Macera consented to being tried as an
arranger by failing to object to evidence tending to establish arranger
liability at trial. The district court rejected this claim, citing its
recollection that Macera had objected to the use of the term
"arranger." We affirm this determination. "Consent to the trial of an
issue may be implied if, during the trial, a party acquiesces in the
introduction of evidence which is relevant only to that issue." DCPB,
Inc. v. City of Lebanon, 957 F.2d 913, 917 (1st Cir. 1992) (emphasis
added). As just noted, UTC asserted that Macera would not be
prejudiced by a ruling that it consented to being tried as an arranger
because the evidence proving Macera's liability as an arranger of
hazardous substances was the same evidence proving Macera's liability
as a transporter. This argument about lack of prejudice forecloses
UTC's claim regarding trial by consent: "The introduction of evidence
directly relevant to a pleaded issue cannot be the basis for a founded
claim that the opposing party should have realized that a new issue was
infiltrating the case." Id. Where, as here, the evidence regarding
Macera's transport of waste to the Davis site was directly relevant to
transporter liability, and, according to UTC, arranger liability, we
find no error in the court's conclusion that Macera did not consent to
being tried on an arranger theory by not objecting to the admission of
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that evidence.54
b. The Judgment in Favor of the City of New Jersey
UTC brought a contribution claim against the City of New
Jersey (Jersey City) for disposing of approximately 2,000 drums
abandoned on a city pier and containing corrosive, toxic and flammable
substances found at the Davis site. The district court found Jersey
City immune from liability under § 9607(d)(2) of CERCLA, which provides
immunity for local governments from costs and damages resulting from
their emergency response to the potential release of hazardous
substances.55 See Davis III, 20 F. Supp. 2d at 335. On appeal, UTC
argues that the district court erred in applying § 9607(d)(2) by
failing to consider whether Jersey City voluntarily removed the 2,000
54Even if we concluded that UTC introduced evidence that was
relevant only to prove that Macera was liable as an arranger, we agree
with the district court's determination that Macera did not acquiesce
to being tried on that theory. As the district court noted in its
ruling from the bench, Macera objected to the use of the word
"arranger" at least twice during the trial.
55 Section 9607(d)(2) provides:
No state or local government shall be liable under this
Title for costs or damages as a result of actions taken in
response to an emergency created by the release or
threatened release of a hazardous substance generated by or
from a facility owned by another person. This paragraph
shall not preclude liability for costs or damages as a
result of gross negligence or intentional misconduct by the
State or local government. For the purposes of the
proceeding sentence, reckless, willful, or wanton misconduct
shall constitute gross negligence.
42 U.S.C. § 9607(d)(2).
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drums.
The facts relating to Jersey City's waste disposal are not
disputed. On a night in February 1977, Jersey City police caught Perk
Chemical Company dumping waste at an abandoned city warehouse at a pier
on the Hudson River. After police discovered approximately 2,000 drums
of waste, the city secured the warehouse. City officials quickly
contacted the New Jersey Department of Environmental Protection (DEP),
which determined that the drums contained potentially explosive
hazardous chemicals that could cause serious environmental harm. Both
Jersey City and the New Jersey DEP agreed that the waste required
prompt disposal, but disputed who should finance the cleanup.
Two weeks later, the DEP obtained a judgment ordering Jersey
City to fund the cleanup. After contacting state-recommended
contractors and expediting the normal bidding process, the city quickly
hired a contractor to remove the waste. Within a few weeks all of the
waste was successfully removed from the warehouse. The contractor hired
by the city subcontracted with CCC to transport the waste for disposal.
UTC argues that the statute contains a requirement of
voluntary action that Jersey City did not satisfy because it only acted
to dispose of the drums after the state obtained a judgment ordering
the city to pay for the cleanup.56 We review the district court's
56UTC also argues that Jersey City is not exempt because it owned
the pier warehouse in which the waste was dumped, meaning that the
waste cannot be "from a facility owned by another person," as the
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application of § 9607(d)(2) de novo. See Rivera, 131 F.3d at 224. To
construe the statute, we look at its plain language. See id. If the
meaning of the language is clear, our inquiry need go no further.
See id. We construe the statutory language within the context of
CERCLA as a whole. See id. at 225; Conroy v. Aniskoff, 507 U.S. 511,
515 (1993) ("[T]he meaning of statutory language, plain or not, depends
on context.").
According to the plain language of § 9607(d)(2), state and
local governments are immune except in cases where their handling of
the waste amounts to "gross negligence or intentional misconduct."
Although UTC concedes that Jersey City was not grossly negligent and
did not engage in intentional misconduct, it argues that CERCLA's broad
remedial purpose requires us to read a voluntariness requirement into
the statute.
There is nothing in the plain language of § 9607(d)(2) that
supports UTC's argument. Indeed, UTC seeks to add to the statutory
language on policy grounds. There is no basis for doing so. This is
not the rare case in which applying the plain language of the statute
will produce an absurd or irrational result, Conservation Law Found. v.
Busey, 79 F.3d 1250, 1267 (1st Cir. 1996), or one that is "demonstrably
at odds with the intention of its drafters," United States v. Ron Pair
statute requires. 42 U.S.C. § 9607(d)(2). However, the statute also
offers immunity if the hazardous waste at issue was "generated by . .
. another person," as was the case here. Id.- 110 -
Enters., 489 U.S. 235, 242 (1989).57 We thus affirm the district
court's ruling that Jersey City is immune from liability under §
9607(d)(2).
c. The Government's $6 Million Enforcement Costs
UTC appeals the district court's apparent ruling that it is
solely responsible for $6 million in government enforcement costs,
arguing that the ruling is "insufficiently clear for purposes of the
application of estoppel and res judicata," and that there is no
competent evidence to support the conclusion that UTC caused all of the
government's enforcement costs. The appellants respond that the court
"properly exercised its discretion in allocating $6 million in
government enforcement costs to UTC," either based on equitable
contribution or divisibility principles, and that there is evidence in
the record to support this ruling.
The "enforcement costs" at issue are the government's
expenditures for litigating the cost recovery action against UTC and
the other original eight defendants through the Phase I trial against
57 Our application of the statute is consistent with the 6th
Circuit's opinion in United States v. Cordova Chem. Co., 113 F.3d 572(6th Cir. 1997), vacated on other grounds sub nom United States v.
Bestfoods, 524 U.S. 51 (1998). In Cordova, the 6th Circuit found the
Michigan Department of Natural Resources immune from liability under §
9607(d)(2) for the costs of a hazardous waste site cleanup. See id. at
582. We note that the facts of Cordova indicate that the Michigan
department received immunity for an emergency response that was
considerably less efficient and effective then Jersey City's here.
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UTC.58 The district court made two statements about UTC's
responsibility for these costs. In its September 28, 1998 judgment
based on partial findings, the court said:
In this case, calculating UTC's pro rata share of
the total response costs requires that the
enforcement cost component and the cleanup cost
component be considered separately. The $6
million in enforcement costs is attributable,
almost entirely, to the Phase I litigation
between the government and UTC. The defendants
did not participate in that phase of the
litigation and it was necessitated because UTC
denied that any of its waste was deposited at the
Davis site. Accordingly, UTC bears 100% of the
responsibility for those enforcement costs.
Davis III, 20 F. Supp. 2d at 338. The court also discussed the issue
of enforcement costs in its December 15, 1998 declaratory judgment,
saying:
It appears that the [$6 million] enforcement
costs are attributable almost entirely to
expenses incurred by the government in the Phase
I litigation against UTC, and that, therefore,
they should be borne entirely by UTC. However,
that issue need not be decided in order to
determine the likelihood that UTC will be
required to pay more than its fair share.
58The parties do not contest that $6 million is an accurate
estimate of the amount of the government's costs to that point.
However, UTC argues that the precise figure for the costs --
$5,855,812.01, according to the government's written submission in
support of entry of its consent decree with UTC and other settling
parties -- as well as other evidence about who bears responsibility for
these costs comes from the consent decree proceedings, and so is not
part of the record in the declaratory judgment appeals. Because we
remand to the district court for clarification, we do not reach this
issue.
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Davis IV, 31 F. Supp. 2d at 69. The court denied UTC's motion seeking
amendment or clarification of these statements.
UTC argues that the "the equivocal language that the district
court used and the context of the issue it was deciding indicate it was
only engaging in a presumption, based on extra-record evidence, to test
whether it should issue declaratory relief." It asks us to construe the
court's statements as "argumentative presumptions without preclusive
effect."
We agree that the intended effect of the court's statements
is insufficiently clear. The court discussed UTC's responsibility for
the government's enforcement costs only in terms of its assessment of
whether UTC paid more than its fair share of the total response costs
for the Davis site. On the one hand, the court's initial statement
that "UTC bears 100% of the responsibility for those enforcement costs"
suggests that the court may have intended a ruling that obligates UTC
to pay the government $6 million on top of the payments agreed to in
the settlement. On the other hand, the court's later statement that
the issue of UTC's responsibility for the costs "need not be decided"
suggests that the court ultimately refrained from reaching this
question.
Moreover, it is not clear how the court's statements fit with
its other Phase I and Phase III rulings. Did the court intend merely
to restate the joint and several liability findings against UTC
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following the Phase I trial, which indisputably included liability for
an estimated $49 million in cleanup costs and $6 million in enforcement
costs?59 Or did the court intend to allocate the enforcement costs to
UTC, irrespective of the consent decree settlement and the finding that
UTC should bear 1.54 percent share of the total liability?
The appellants argue that an equitable allocation to UTC of
the government's enforcement costs would lie within the district
court's broad discretionary authority under CERCLA. See Acushnet, 191
F.3d at 77. However, we are not willing to assume that the court made
such a finding of causation or equitable allocation without a more
complete explication. As a result, we instruct the district court on
remand to explain the intended effect of its statements about UTC's
responsibility for the government's enforcement costs.60 In remanding
for clarification of this issue, we do not retain jurisdiction of the
case. See Clauson v. New England Ins. Co., 254 F.3d 331, 342 (1st Cir.
59By order of May 5, 1995, UTC was adjudged liable for "all
unreimbursed costs that have been incurred by the United States of
America related to the Davis Liquid Waste Site."
60This remand does not disturb the district court's finding that
UTC paid more than its fair share of the total enforcement costs. As
we have noted, the court translated UTC's 1.54 percent share of
liability into $754,600 and said that UTC will pay the government at
least $10.35 million after contribution is received from the settling
third and fourth-party defendants. Thus "even if the $6 million in
enforcement costs is viewed as an additional part of UTC's contribution
threshold, the threshold clearly is exceeded by UTC's settlement
obligation of at least $10.35 million." Davis IV, 31 F. Supp. 2d at
69.
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2001).
IV. Conclusion
As a final note, we wish to acknowledge the district court's
careful attention to this unusually complex case. Its skillful
management of the case and its cogent decisions over many years
considerably aided our disposition of this ganglion of appeals.
For all of the reasons discussed herein, we affirm the
determinations of the district court, with the exception of that
concerning the issue of whether UTC is solely responsible for $6
million in government enforcement costs. On that issue, we remand for
a clarification of the district court's position. Each party is to
bear its own costs.
So ordered.
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APPENDIX I
A Roster of Parties, Principals, and Witnesses
Acco-Bristol: defendant found liable for dumping
Ashland: defendant found liable for dumping; also
appeals the consent decrees
BFI: alleged to be corporate successor of
Macera Brothers; won judgment on partial
findings at the close of UTC's evidence
Black & Decker: found to be corporate successor of Gar
Anthony Capuano: principal of Sanitary Landfill
Jack Capuano: principal of Sanitary Landfill
William Carracino: principal of CCC
Robert Cece: principal of Macera Brothers
Chemical Control
Corporation (CCC): waste hauler located in New Jersey
Chemical Waste
Removal (CWR): waste hauler located in Connecticut
William Davis: owner of the Davis site
Electroformers: found not to be corporate successor of
Gar
Johnny Granfield: driver for CWR
Wilbert Jones: driver for CWR
Macera Brothers: waste hauler that dumped at the Davis
site; won judgment on partial findings
at the close of UTC's evidence
John Mayo: driver for CCC
Morton: defendant found liable for the dumping
of Thiokol; acknowledges successor
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liability for Thiokol
Emanuel Musillo: principal of CWR
Michael Musillo: principal of Drum Automation, CWR's
corporate successor
City of New Jersey: won judgment on partial findings at the
close of UTC's evidence
Perkin-Elmer (PE): defendant found liable for dumping
John Prahm: employee of CCC
Qualitron: corporation that dumped at the Davis
site; PE acknowledges successor
liability for Qualitron
Sanitary Landfill: landfill where CWR and CCC dumped waste
before dumping at the Davis site
United Technologies
Corporation (UTC): found liable in Phase I; sued third and
fourth-party defendants in Phase III
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APPENDIX II
A Summary of Relevant Monetary Sums
Estimated Total Cost: $55 million
Initial EPA response costs: $19 million
Initial DOJ enforcement costs: $6 million
Soil remediation: $14 million
Groundwater cleanup: $13 million
Water line extension: $3 million
Phase I
Partial Consent Decree: approximately $5.625 million
Clairol: $3 million, plus interest
Pfizer: $1.5 million, plus interest
Providence Journal: $650,000, plus interest
Ciba-Geigy: $475,000, plus interest
Phase II
Consent Decree I: $13.5 million, plus $440,000 for government
oversight costs and the expense of soil remediation
American Cyanamid: $2.75 million (portion to settle state claims)
Olin Hunt: $2.75 million (portion to settle state claims)
Forty-seven non-carve-out parties: $7.2 million
UTC: Remainder of settlement, approximately $2.8 million
Soil remediation, estimated at $14 million
(UTC contribution action recoveries to be split with the
United States after deduction of attorneys' fees; UTC
recovery capped at $5.364 million)
Consent Decree II: $4.135 million (part to U.S. and part to UTC)
Twenty-three non-carve-out parties: $4.135 million
Consent Decree III: $5 million (part to U.S. and part to UTC)
National Starch: $5 million
Consent Decree IV: $200,000 (part to U.S. and part to UTC)
Swan Engraving: $150,000
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Power Semiconductors: $50,000
Capuano Consent Decree: $200,000
Capuano Brothers: $200,000
Total from Partial Consent Decrees, Phase I and II: approximately $33
million (not including interest on escrowed amounts)
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