964 F.2d 252 (3rd Cir. 1992), 91-5481, United States v. Alcan Aluminum Corp.

Docket Nº:91-5481.
Citation:964 F.2d 252
Party Name:UNITED STATES of America v. ALCAN ALUMINUM CORP., BASF Corp.; Beazer Materials and Services, Inc.; Borg-Warner Corp.; Carrier Corp.; Chemical Leaman Tank Lines, Inc.; Chemical Management, Inc.; Chrysler Motors Corp.; Dana Corp.; Dart Industries, Inc.; Exxon Corp.; Ford Motor Company; Goulds Pumps, Inc.; Hitchcock Gas Engine Company, Inc.; Ingersoll
Case Date:May 14, 1992
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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964 F.2d 252 (3rd Cir. 1992)

UNITED STATES of America

v.

ALCAN ALUMINUM CORP., BASF Corp.; Beazer Materials and

Services, Inc.; Borg-Warner Corp.; Carrier Corp.;

Chemical Leaman Tank Lines, Inc.; Chemical Management,

Inc.; Chrysler Motors Corp.; Dana Corp.; Dart Industries,

Inc.; Exxon Corp.; Ford Motor Company; Goulds Pumps,

Inc.; Hitchcock Gas Engine Company, Inc.; Ingersoll-Rand;

Neapco, Inc.; Rome Strip Steel Co., Inc.; the Stanley

Works, Inc.; TRW, Inc.; United Technologies Chemical

Management, Inc., Counter-claimant.

CHEMICAL MANAGEMENT, INC. Cross-claimant,

v.

UNITED STATES of America Counter-defendant,

Alcan Aluminum Corp.; BASF Corp.; Beazer Materials and

Services, Inc.; Borg-Warner Corp.; Carrier Corp.;

Chemical Leaman Tank Lines, Inc.; Chrysler Motors Corp.;

Dana Corp.; Dart Industries, Inc.; Exxon Corp.; Ford

Motor Company; Goulds Pumps, Inc.; Hitchcock Gas Engine

Company, Inc.; Ingersoll-Rand; Neapco, Inc.; Rome Strip

Steel Co., Inc.; the Stanley Works, Inc.; TRW, Inc.

UNITED TECHNOLOGIES; Cross-defendants,

Neapco, Inc.; Counter-claimant.

Neapco, Inc.; Cross-claimant,

v.

UNITED STATES of America Counter-defendant,

Alcan Aluminum Corp.; Basf Corp.; Beazer Materials and

Services, Inc.; Borg-Warner Corp.; Carrier Corp.;

Chemical Leaman Tank Lines, Inc.; Chemical Management,

Inc.; Chrysler Motors Corp.; Dana Corp.; Dart Industries,

Inc.; Exxon Corp.; Ford Motor Company; Goulds Pumps,

Inc.; Hitchcock Gas Engine Company, Inc.; Ingersoll-Rand;

Rome Strip Steel Co.; Inc.; the Stanley Works, Inc.; TRW,

Inc.; United Technologies Cross-defendants,

Alcan Aluminum Corporation Appellant.

No. 91-5481.

United States Court of Appeals, Third Circuit

May 14, 1992

Argued April 6, 1992.

Rehearing and Rehearing In Banc

Denied July 27, 1992.

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[Copyrighted Material Omitted]

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Lawrence A. Salibra, II (argued), Cleveland, Ohio, for appellant Alcan Aluminum Corp.

Barry M. Hartman, Acting Asst. Atty. Gen., Michael D. McIntyre, J. Carol Williams, Elizabeth Ann Peterson, John T. Stahr (argued), Attys., U.S. Dept. of Justice, Washington, D.C., for appellee U.S.

Norman W. Bernstein (argued), David L. Anderson, Laurel A. Bedig, Shea & Gould, Washington, D.C., for appellees BASF Corp., Beazer Materials and Services, Inc., Exxon Corp., and Ford Motor Co.

Stuart W. Axe, Lester, Schwab, Katz & Dwyer, New York City, for appellee Chrysler Motors Corp.

John B. Lewis, Arter & Hadden, Cleveland, Ohio, for amici curiae Operation Oswego County, Inc., County of Oswego, Greater Oswego Chamber of Commerce, Inc., City of Oswego, Mohawk Cent. School Dist., Richfield Springs Cent. School Dist., Mount Markham Cent. School Dist., and New Hartford Cent. School Dist.

Hosmer Culkin, Operation Oswego County, Inc., Oswego, N.Y., for amicus curiae Operation Oswego County, Inc.

Bruce N. Clark, Oswego, N.Y., for amicus curiae County of Oswego.

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Michael Stanley, Oswego, N.Y., for amicus curiae Greater Oswego Chamber of Commerce, Inc.

Gay Williams, Sullivan & Williams, Oswego, N.Y., for amicus curiae City of Oswego.

Alan S. Burstein, Scolaro, Shulman, Cohen, Lawler & Burstein, Syracuse, N.Y., for amici curiae Mohawk Cent. School Dist., Richfield Springs Cent. School Dist., Mount Markham Cent. School Dist., and New Hartford Cent. School Dist.

James R. Griffith, Felt, Hubbard, & Bogan, Utica, N.Y., for amici curiae Russell Blackstone, Feminine Touch Fabrics, Clinton Auto Ser., True Value Hardware, Brandy Keg Kennels, and Herkimer Elks Club.

Constantine L. Trela, Laura L. Leonard, Carolyn K. Gerwin, Sidley & Austin, Chicago, Ill., Robin S. Conrad, National Chamber Litigation Center, Inc., Washington, D.C., for amicus curiae U.S. Chamber of Commerce.

Before: GREENBERG and SCIRICA, Circuit Judges, and DEBEVOISE, District Judge. [*]

OPINION

GREENBERG, Circuit Judge.

This matter is before the court on appeal by Alcan Aluminum Corporation ("Alcan") from a summary judgment entered in favor of the United States (the "Government") for response costs incurred by the Government in cleaning the Susquehanna River.

On November 24, 1989, the Government filed a complaint in the United States District Court for the Middle District of Pennsylvania under section 107(a) of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9607(a) ("CERCLA") against 20 defendants, including Alcan, for the recovery of clean-up costs it incurred in response to a release of hazardous substances into the Susquehanna River. On October 11, 1990, the Government moved for summary judgment against Alcan, the only non-settling defendant, and on November 13, 1990, Alcan cross-moved for summary judgment.

The district court, after receiving a report and recommendation from a magistrate judge, issued a memorandum and order granting the Government's motion for the reasons set forth in United States v. Alcan Aluminum Corp., 755 F.Supp. 531 (N.D.N.Y.1991) (hereinafter called "Alcan New York "), another CERCLA case involving the release of hazardous substances generated by Alcan but at a different location. Accordingly, on May 8, 1991, the court entered judgment against Alcan in the amount of $473,790.18, which was the difference between the full response costs the Government had incurred in cleaning the Susquehanna River and the amount the Government had recovered from the settling defendants.

For reasons that follow, even though we largely agree with the district court's interpretation of the relevant provisions of CERCLA, we will vacate the judgment of May 8, 1991, and will remand the case for further factual development concerning the scope of Alcan's liability.

I.

FACTS AND PROCEDURAL HISTORY

Virtually all of the facts in this case to the extent developed at this point are undisputed. The Butler Tunnel Site (the "Site") is listed on the National Priorities List established by the Environmental Protection Agency ("EPA") under section 105 of CERCLA, 42 U.S.C. § 9605. See 52 Fed.Reg. 27,620 (July 22, 1987). The Site includes a network of approximately five square miles of deep underground mines and related tunnels, caverns, pools and waterways bordering the east bank of the Susquehanna River in Pittston, Pennsylvania. The mine workings at the Site are drained by the Butler Tunnel (the "Tunnel"), a 7500 foot tunnel which feeds directly into the Susquehanna River.

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The mines are accessible from the surface by numerous air shafts or boreholes. One borehole (the "Borehole") is located on the premises of Hi-Way Auto Service, an automobile fuel and repair station situated above the Tunnel. The Borehole leads directly into the mine workings at the Site.

In the late 1970's, the owner of Hi-Way Auto Service permitted various liquid waste transport companies, including those owned and controlled by Russell Mahler (the "Mahler Companies"), to deposit oily liquid wastes containing hazardous substances into the Borehole. 1 The Mahler Companies collected the liquid wastes from numerous industrial facilities located in the northeastern United States and, in total, disposed of approximately 2,000,000 gallons of oily wastes containing hazardous substances through the Borehole. 2 Apparently, it was contemplated that the waste would remain at the Site indefinitely.

Alcan is an Ohio corporation which manufactures aluminum sheet and plate products in Oswego, New York. From 1965 through at least 1989, Alcan's manufacturing process involved the hot-rolling of aluminum ingots. To keep the rolls cool and lubricated during the hot-rolling process, Alcan circulated an emulsion through the rolls, consisting of 95% deionized water and 5% mineral oil. At the end of the hot-rolling process, Alcan removed the used emulsion and replaced it with unused emulsion.

During the rolling process, fragments of the aluminum ingots, which also contained copper, chromium, cadmium, lead and zinc, hazardous substances under CERCLA, broke off into the emulsion. In an effort to remove those fragments, Alcan then filtered the used emulsion prior to disposing of it, but the filtering process was imperfect and hence some fragments remained. According to Alcan, however, the level of these compounds in the post-filtered, used emulsion was "far below the EP toxic or TCLP toxic levels and, indeed, orders of magnitude below ambient or naturally occurring background levels. Moreover, the trace quantities of metal compounds in the emulsion [were] immobile...." Appellant's Br. at 4. The Government does not specifically challenge Alcan's assertion that the used emulsion contained only low levels of these metallic compounds, as it contends that this fact is irrelevant to Alcan's liability under CERCLA.

From mid-1978 to late 1979, Alcan contracted with the Mahler Companies to dispose of at least 2,300,950 gallons of used emulsion from its Oswego, New York, facility. During that period, the Mahler Companies disposed of approximately 32,500-37,500 gallons (or five 6500-7500 gallon loads) of Alcan's liquid waste through the Borehole into the Site. 3

In September 1985, approximately 100,000 gallons of water contaminated with hazardous substances were released from the Site into the Susquehanna River. It appears that this discharge was composed of the wastes deposited into the Borehole in the late 1970's. Between September 28, 1985, and January 7, 1987, EPA incurred significant response costs due to the release and the threatened release of hazardous substances from the Site. According to the Government, EPA's response actions included "containing an...

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