Boeing Company v. Cascade Corporation

• Decision Date: 24 March 2000
• Docket Number: Nos. 96-35246,96-35304,OPINION-A,s. 96-35246,96-35304
• Parties: (9th Cir. 2000) BOEING COMPANY, Plaintiff-Appellee-Cross-Appellant, v. CASCADE CORPORATION, Defendantppellant-Cross-Appellee
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1177

207 F.3d 1177 (9th Cir. 2000)

BOEING COMPANY, Plaintiff-Appellee-Cross-Appellant, v. CASCADE CORPORATION, Defendant OPINION-Appellant-Cross-Appellee.

Nos. 96-35246,96-35304

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Argued and Submitted March 2, 1999

Decided March 24, 2000

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

Peter Bunch (briefed) and George W. McKallip Jr. (briefed and argued), Kennedy, King & Zimmer, Portland, Oregon, for defendant-appellant-cross-appellee Cascade Corporation.

David A. Bledsoe (briefed), Paul T. Fortino (briefed), and Mark W. Schneider (argued), Perkins, Coie, Portland, Oregon, for plaintiff-appellee-cross-appellant The Boeing Company.

Appeals from the United States District Court for the District of Oregon; Malcolm F. Marsh, District Judge Presiding. D.C. No. CV-89-00119-MFM

Before: Andrew J. Kleinfeld and Michael Daly Hawkins, Circuit Judges, and William W. Schwarzer, ¹ District Judge.

KLEINFELD, Circuit Judge:

This case involves an action for contribution under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The Boeing Company and Cascade Corporation contaminated porous soil, called an aquifer. The contamination overlapped. Both companies spent a great deal of money investigating and beginning the cleaning. The issue in this case is how their respective expenses ought to be allocated in a contribution action.

FACTS

Boeing sued Cascade for contribution to offset Boeing's higher expenses so far, and for a declaratory judgment allocating future expenses. The case was tried to the court without a jury. Boeing won, though not all it sought. Both sides appeal.

The district court determined that the fairest way to allocate costs between the companies was by the quantity of toxic chemicals each company put into the ground. Cascade was judged liable for seventy percent of the costs, Boeing for thirty percent. Cascade argues that the 70:30 allocation is erroneous and that the district court lacked jurisdiction to enter a declaratory judgment imposing the 70:30 ratio on future expenses. Boeing argues that Cascade was allowed to apply too much of what it had spent to its seventy percent share, and was erroneously given credit against its share for a settlement Boeing collected from a third party. We affirm in part and remand in part the district court's judgment.

Boeing owns land about 200 feet northwest of Cascade's land near Portland, Oregon. Because the ground slopes down to the north, liquid in the ground flows from Cascade's property towards Boeing's. Boeing manufactures airplane parts on its 151 acres and Cascade manufactures lift truck attachments on its 6 acres. Both companies and their predecessors have used chlorine-based solvents to clean machine parts and for vapor degreasers. Some of the solvents spilled or were dumped and contaminated the soil at each site. Nobody claims that there were any laws prohibiting them from disposing of the solvents in such a way at the time. Public authorities eventually grew concerned that contaminated groundwater flowed north towards the Columbia River, and towards water wells operated by the City of Portland as a supplemental source of drinking water. Neither Boeing nor Cascade has been accused of any legal wrongdoing and the evidence indicates that both companies have been diligently attempting to remedy the problem since learning of it.

In 1985, Boeing drilled monitoring wells on its property for another project and discovered the contaminated aquifer. An aquifer is a relatively porous soil layer, such as sandstone, that holds water, something like a sponge. In 1986, Boeing signed a consent order with the Environmental Protection Agency requiring Boeing to investigate the extent of the contamination and to identify its potential sources. Boeing installed monitoring wells, sampled groundwater and soil gas, and conducted pump and tracer tests to determine the sources and extent of the contamination. Sixteen of the wells, in Boeing's southeast corner (the part of its property closest to Cascade's), yielded samples suggesting that contaminated groundwater was flowing from Cascade's property into Boeing's.

Cascade learned of contamination in its industrial supply well a little later than Boeing, in 1986. For the next two years, Cascade tested the well and sent the results to the Oregon State Department of Environmental Quality. In 1987, Cascade tested the waste in the underground tanks it used to store waste oil and coolants, and discovered chlorine-based chemicals in the waste. Cascade removed the contaminated soil from the site and, in 1988, entered into a consent order with the Department of Environmental Quality to evaluate the extent and source of contamination at its site. Cascade, like Boeing, investigated the potential sources of the contamination, and has been trying to eliminate it.

In 1989, Boeing and Cascade began working together on investigation and cleanup under the supervision of the Oregon Department of Environmental Quality. In 1993, Boeing and Cascade entered into a joint consent order that directed the parties to control the contaminant plume and to learn more about the area so as to protect Portland's water supply. Their cooperation has continued since.

There are three aquifers separated by two confining units or aquitards. An aquitard is a relatively impermeable layer that retards the flow of water. Thus, the structure is something like three wet sponges separated by dishes. The top sponge is called the Troutdale gravel aquifer. Beneath it is an aquitard, then the second sponge, called the Troutdale sandstone aquifer. The sandstone layer has an upper more uniform part, and a lower, more varied part. A second aquitard lies below it, then a third aquifer. The second aquifer down, the sandstone layer, holds the Boeing and Cascade contamination at issue.

Because the aquifers and aquitards are natural dirt and rock, not sponges and dishes, they are irregular. Each layer contains "lenses," or points within it that may hold water or retard its flow differently from the surrounding oil and rock. Some water flows along an aquitard, then seeps around a lens and through breaks and discontinuities into the aquifer below. In some areas, erosion and geologic stresses have removed the top aquifer and aquitard, leaving the sandstone aquifer immediately below the surface. Over the northeast portion of the Boeing land the top aquitard disappears, so groundwater flowing north toward the river in the gravel aquifer on top seeps without hindrance into the sandstone aquifer below it. The slope of the underground formations makes the water flow south instead of north for a stretch, then breaks it into two separate flows north toward the river.

There is a north-south separation in the sandstone aquifer on Boeing's property. The parties agree that groundwater west of it has been contaminated solely by Boeing, while groundwater east of it was contaminated by Cascade and possibly by Boeing as well. One of Boeing's experts, Dr. Henry Landau, testified that pumping from wells operated by the city may have pulled some of the contaminants across the separation. When a well is pumping, it pulls water toward it. The City of Portland's wells draw groundwater toward them from more than two miles away. A local water district, the Rockwood Wells District, also draws from wells in the area and pulls water. Boeing started to pump and treat the groundwater in 1989, pulling some of the contaminated groundwater from the gravel aquifer so that it did not flow into the sandstone aquifer.

Both the gravel and sandstone aquifers are contaminated. Boeing and Cascade are separately cleaning up the gravel aquifers on their respective property and those costs are not at issue in this case. But contamination from the gravel aquifer has seeped past the top aquitard into the sandstone, as explained above. The dirty water plume extends beyond Boeing's and Cascade's properties and may have seeped past the second aquitard into the third aquifer down, the sand and gravel aquifer. The flow of contaminants could eventually reach the City of Portland wells if nothing were done about it.

The contamination of the sandstone aquifer is the subject of this case. The contaminant plume is generally north of the Cascade property, and extends both northeast and northwest of Cascade. The northwest portion of the plume extends under part of Boeing's property. The eastern portion of the plume contains groundwater that flowed north from Cascade, and is solely attributable to Cascade. The westernmost portion of the plume is solely attributable to Boeing and its predecessors. A portion of the plume in between contains contaminated groundwater from both Boeing and Cascade.

The contaminants in the groundwater are chlorinated solvents known as volatile organic compounds. The major contaminants in the Sandstone Aquifer are trichloroethene, 1,2dichloroethene, and perchloroethene or tetrachloroethane. Freon, 1,1,1-trichloroethane, and 1,1-dichloroethene are also present in lesser concentrations. These compounds, the findings say, share common properties such as high toxicity, low solubility, and high mobility in the environment.

The contaminants came from solvents used by Boeing and its predecessors and Cascade. Boeing and its predecessors used trichloroethene as their primary degreaser solvent until 1980, and then switched to 1,1,1-trichloroethane. They stored waste solvents in storage tanks and dumped them into the ground or stored them in barrels underground. Based on evidence available at trial, the original contaminant mass in the gravel aquifer at Boeing was about 4500 pounds. As of the time of trial, 2560 pounds had been extracted, leaving 2046 pounds.

Cascade's vapor degreaser used trichloroethene from 1961 until 1975 when it switched to non-chlorinated solvents. Cascade also stored waste solvents...