670 F.3d 377 (1st Cir. 2012), 11-1034, United States v. General Elec. Co.

Docket Nº:11-1034.
Citation:670 F.3d 377
Opinion Judge:TORRUELLA, Circuit Judge.
Party Name:UNITED STATES of America, Plaintiff, Appellee, v. GENERAL ELECTRIC COMPANY, Defendant, Appellant.
Attorney:Peter A. Biagetti, with whom Colin G. Van Dyke, Jeffrey R. Porter, Andrew Nathanson, and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., were on brief for appellant. Robert H. Oakley, U.S. Department of Justice, Environmental & Natural Resources Division, with whom Robert Dreher, Acting Assi...
Judge Panel:Before TORRUELLA and THOMPSON, Circuit Judges, and SARIS,[*] District Judge.
Case Date:February 29, 2012
Court:United States Courts of Appeals, Court of Appeals for the First Circuit

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670 F.3d 377 (1st Cir. 2012)

UNITED STATES of America, Plaintiff, Appellee,



No. 11-1034.

United States Court of Appeals, First Circuit.

February 29, 2012

Heard July 29, 2011.

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[Copyrighted Material Omitted]

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Peter A. Biagetti, with whom Colin G. Van Dyke, Jeffrey R. Porter, Andrew Nathanson, and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., were on brief for appellant.

Robert H. Oakley, U.S. Department of Justice, Environmental & Natural Resources Division, with whom Robert Dreher, Acting Assistant Attorney General, Lisa E. Jones, Catherine A. Fiske, Laura Rowley, and Ruthann Sherman, Senior Enforcement Counsel, U.S. Environmental Protection Agency, was on brief for appellee.

Before TORRUELLA and THOMPSON, Circuit Judges, and SARIS,[*] District Judge.

TORRUELLA, Circuit Judge.

Defendant-Appellant General Electric Company (" GE" ) appeals from a district court judgment holding it liable under the Comprehensive Environmental Response, Compensation, and Liability Act (" CERCLA" ), 42 U.S.C. § 9607(a)(3), for response costs incurred by the United States Environmental Protection Agency (" EPA" ) in the unfinished cleanup of the Fletcher's Paint Works and Storage Facility Superfund Site in Milford, New Hampshire (the " Fletcher Site" or the " Site" ). GE also appeals the district court's judgment awarding the United States certain costs incurred in connection with the Fletcher Site's cleanup pursuant to 42 U.S.C. § 9613(g)(2). For the reasons stated herein, we affirm the judgment of the district court on both issues.

I. Background and Procedural History

" Pyranol" is an insulating material once used extensively in electric equipment. Made from polychlorinated biphenyls (" PCBs" ), Pyranol was prized for its dielectric properties— i.e., it conducts electricity poorly or not at all— and was widely used in the 1950s and 1960s in the manufacture of transformers, capacitors, and other devices. Time, however, was not kind to Pyranol— as PCBs became associated with serious health risks,1 Pyranol and other products containing these chemicals were stringently regulated and their use in manufacture drastically curtailed. See, e.g., 42 U.S.C. § 9601(14); 15 U.S.C. § 2605(e).

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For some thirty years, GE manufactured electric capacitors containing Pyranol at its plants located in Hudson Falls and Fort Edward, New York (respectively, " Hudson Falls" and " Fort Edward" ). GE met its Pyranol needs by purchasing " virgin" PCBs that the Monsanto Company (" Monsanto" ) marketed under the name " Aroclors." GE then refined the Aroclors it purchased from Monsanto until the PCBs attained the level of purity necessary for use in electric capacitors. The end result was Pyranol.

To be of use to GE, the processed Pyranol had to meet and retain demanding purity specifications. Pyranol that fell short of these standards was deemed " scrap Pyranol" and was stored away in 55-gallon drums in designated scrap areas.

Over time, GE accumulated a glut of scrap Pyranol, a development that somehow brought GE into contact with Frederic H. " Fred" Fletcher (" Fletcher" ), local manufacturer, " chemical scrapper," and businessman.2 Between 1953 and 1967, Fletcher owned a number of paint manufacturing and storage businesses in Milford, New Hampshire, which varyingly operated under the names Fletcher's Paint Works or Milford Paint Works. Like GE, Fletcher also routinely purchased Aroclors from Monsanto but used the unrefined PCBs as a " plasticizer" additive for his paints. Seemingly recognizing a mutually-advantageous situation, Fletcher and GE gravitated toward each other and entered into an informal agreement whereby Fletcher purchased scrap Pyranol from GE at bargain prices for his industrial needs.

For approximately ten years ending in 1967, Fletcher regularly purchased 55-gallon drums of scrap Pyranol from GE. GE records indicate that in this period, Fletcher availed himself of over 200,000 gallons of GE's scrap Pyranol. Accordingly, for the better part of a decade, 55-gallon drums full of scrap Pyranol— about 3,600 worth of them— routinely traveled by truck from Hudson Falls and Fort Edward to the Fletcher Site. Initially, Fletcher sent one of his employees to either of the GE plants to retrieve scrap Pyranol in 18-barrel increments. However, as transfers increased, Fletcher and GE contracted with third-party cargo services to haul scrap Pyranol barrels between locations in larger trucks.

Of the more than 200,000 gallons of scrap Pyranol that made the journey from GE's plants to the Fletcher Site in this ten-year time frame, almost half did so between early 1966 and November 1967, when Fletcher received the final shipment. The catalyst for this climactic increase in Pyranol transfers is unclear, but the coinciding denouement of the GE-Fletcher relationship is well-documented. GE records show that, beginning in February 1966, Fletcher regularly missed payments on almost-monthly shipments of scrap Pyranol. By August 1967, when GE notified him by means of a collection letter, Fletcher's account was delinquent in over six thousand dollars for failure to pay for fourteen shipments of scrap Pyranol. GE delivered three more shipments of scrap Pyranol after sending this collection letter, the last of which Fletcher received on November 10, 1967.

In early 1968, GE account officers communicated with Fletcher in an attempt to collect on his outstanding debt to GE. Fletcher riposted with a letter informing GE that the quality of the scrap Pyranol

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he received had markedly declined in recent years. Fletcher's letter stated that many of the scrap Pyranol drums at the Site were unusable, proposed an arrangement whereby GE would retrieve those drums he could not use while he paid for those he could, and refused to receive any additional scrap Pyranol unless GE could ensure it would provide materials of higher quality. GE did not follow up on Fletcher's proposal. For all intents and purposes, Fletcher's letter marked the end of his relationship with GE.

In 1987, EPA found hundreds of drums containing scrap Pyranol and other chemicals at the Fletcher Site. The drums were unmarked and several had leaked. Subsequent testing detected hazardous substances at the Site, including tricholoroethylene (" TCE" ), trichlorobenzene (" TCB" ), and PCBs. As a result, EPA placed a temporary cap on the Site and, in 1989, added it to its National Priorities, or " Superfund," List.3

In 1991, the United States initiated an action against GE to recoup costs associated with the Fletcher Site's cleanup (the " 1991 Action" ).4 See 42 U.S.C. § 9607(a)(3). The United States requested relief for past costs incurred and declaratory judgment establishing that GE would be liable " for all response costs to be incurred" in connection with the Site. Compl. at 10, United States v. Gen. Elec. Co., No. 91-467-D (D.N.H. Oct. 7, 1991). In February 1994, the parties resolved this controversy by means of a consent decree stipulating that GE would remunerate EPA for costs incurred through April 30, 1993. GE did not concede liability and reserved all defenses and possible counterclaims. The United States' declaratory judgment claim was dismissed without prejudice. Correspondingly, the United States reserved its right to seek additional compensation for future cleanup costs.

In 2006, the government commenced this suit against GE in the District Court for the District of New Hampshire. Claiming that GE had " arranged for disposal" of hazardous substances at the Fletcher Site in violation of 42 U.S.C. § 9607(a)(3), the United States sought recovery of cleanup costs incurred since 1993 and revived its request for declaratory judgment against GE for future related expenses. After a four-day bench trial held in November 2008, the district court announced its decision that GE had arranged to dispose of hazardous substances at the Fletcher Site and was liable for response costs incurred by EPA.

The district court's bench ruling against GE did not end the proceedings below. On May 4, 2009, before the district court had entered final judgment in this case, the Supreme Court issued its decision in Burlington Northern & Santa Fe Railway Co. v. United States, 556 U.S. 599, 129 S.Ct. 1870, 173 L.Ed.2d 812 (2009). Arguing that Burlington Northern foreclosed the principal theory of liability upon which the district court relied in issuing its oral order, GE then filed a motion for judgment requesting that the court below withdraw its findings. The district court denied this motion on October 28, 2009.

The litigants and the district court then focused on the issue of identifying the

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response costs for which GE could be held liable. The parties stipulated costs related to the Fletcher Site's cleanup— $13,103,095 (including interest) through October 20, 2009— but GE argued that the United States' claim over $1,305,921 of these was barred by CERCLA's statute of limitations. See 42 U.S.C. § 9613(g)(2). In cross-motions for summary judgment, the parties disputed whether the current litigation constituted a " subsequent action" as defined in § 9613(g)(2), in which case all of the United States' claims for cost recovery would be timely.

On December 3, 2010, the district court granted the United States' cross motion for summary judgment. United States v. Gen. Elec. Co., No. 06-cv-354-PB, 2010 WL 4977478 (D.N.H. Dec. 3, 2010). Final judgment issued on December 6, 2010, and an amended judgment was entered on December 14, 2010. This appeal followed.

II. Discussion

GE appeals the district court's judgment on two grounds. First, GE contends that the district court...

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