U.S. v. Rohm and Haas Co.

Decision Date22 October 1993
Docket NumberNo. 92-1517,92-1517
Citation2 F.3d 1265
Parties, 62 USLW 2104, 23 Envtl. L. Rep. 21,345 UNITED STATES of America v. ROHM AND HAAS COMPANY; Rohm and Haas Delaware Valley, Inc.; Chemical Properties, Inc.; Bristol Township Authority, Appellants.
CourtU.S. Court of Appeals — Third Circuit

Vicki A. O'Meara, Acting Asst. Atty. Gen., John Stahr, Anna Thode, Dept. of Justice, Environment & Natural Resources Div., Michael M. Baylson, U.S. Atty., James G. Sheehan, Chief, Civ. Div., Debra L.W. Cohn (Argued), Asst. U.S. Atty., Philadelphia, PA, of counsel: Sheila Igoe, U.S. E.P.A. Office of Gen. Counsel, Judith Hykel, U.S. E.P.A., Office of Regional Counsel, for appellee.

John G. Harkins, Jr. (Argued), Harkins Cunningham, David Richman, Pepper, Hamilton & Scheetz, Philadelphia, PA, Gerald P. Norton, Harkins Cunningham, Washington, DC, John T. Subak, Ellen S. Friedell, Rohm and Haas Co., Philadelphia, PA, for appellants Rohm and Haas Co., Rohm and Haas Delaware Valley, Inc., Bristol Tp. Authority.

Philip L. Hinerman (Argued), A. John May, III, Michael Bramnick, Pepper, Hamilton and Scheetz, Philadelphia, PA, for appellant Chemical Properties, Inc.

Kenneth A. Rubin, Michael W. Steinberg, Hunter L. Prillaman, Morgan, Lewis & Bockius, and David F. Zoll, Dell E. Perelman, Jacqueline A. Sincore, Chemical Mfrs. Ass'n, Washington, DC, for Chemical Mfrs. Ass'n.

G. William Frick, William H. Crabtree, John Wagner, American Petroleum Institute, Washington, DC, for American Petroleum Institute.

Karl S. Bourdeau, Aaron H. Goldberg, Beveridge & Diamond P.C., Washington, DC, for American Iron and Steel Institute.

Tony K. Allen, Douglas H. Green, Piper & Marbury, Washington, DC, for Edison Elec. Institute, the American Public Power Ass'n, and the National Rural Elec. Co op. Ass'n.

Robin S. Conrad, National Chamber Litigation Center, Inc., Washington, DC, for Chamber of Commerce of the U.S.

William H. Crabtree, Thomas R. Merlino, Motor Vehicle Mfrs. Ass'n of the U.S., Inc., Detroit, MI, for Motor Vehicle Mfrs. Ass'n.

Cynthia H. Evans, American Paper Institute, Washington, DC, for American Paper Institute, for amici curiae in support of appellant.

Before: STAPLETON and COWEN, Circuit Judges, and BARRY, District Judge *.


STAPLETON, Circuit Judge:

This case presents an important issue of first impression regarding the extent of a responsible party's liability under Sec. 107 of the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. Sec. 9607 (1988). We are asked to decide whether costs incurred by the government in overseeing a hazardous waste cleanup performed and paid for by a private party pursuant to the Resource Conservation and Recovery Act ("RCRA") are recoverable under CERCLA's liability provision which provides for recovery of all costs of removal and remedial action incurred by the United States. In so doing, we also must

reach the more fundamental question of whether CERCLA's provision allowing recovery of federal removal and remedial costs contemplates the recovery of costs incurred overseeing a private party's removal and remedial action. Defendant Chemical Properties also raises separate issues relating to whether an owner of part of a CERCLA facility should be jointly and severally liable for response costs incurred at the entire facility. This appeal involves no challenge to the district court's findings of fact.

I. Factual Background

This case arises from the cleanup of hazardous wastes from a 120-acre landfill in Bristol Township, Pennsylvania, next to the Delaware River. Rohm and Haas ("R & H") owned the entire site from 1917 to 1963. In 1963, it sold 14.5 acres to the Bristol Township Authority ("BTA") and in 1968 and 1971 it sold a total of 10.94 acres to Chemical Leasing Corporation, now known as Chemical Properties, Inc. ("CP"). In 1978, R & H transferred the remainder of the site to its wholly owned subsidiary, Rohm and Haas, Delaware Valley, Inc. ("R & H-DVI").

From 1917 to 1975, R & H used the site for disposal of general refuse, process wastes, and offgrade products from R & H's plastics and chemical manufacturing plants. In 1981, R & H-DVI notified EPA that 309,000 tons of waste were disposed of at the site including at least 4,600 tons of hazardous substances as defined by 42 U.S.C. Sec. 9601(14). From 1970 to 1984, a tank-truck hauling facility operated at CP's portion of the site; trucks were dispatched, maintained, and occasionally cleaned at this facility. Beginning in 1979, EPA began monitoring the site and the defendants' activities at the site. Investigations by both EPA and the defendants found hazardous substances present at the site in the air, soil, and groundwater. These hazardous substances were present at portions of the site owned by R & H-DVI, BTA, and CP.

On April 10, 1985, EPA proposed to add the site to the National Priorities List and on August 28, 1986, EPA sent R & H-DVI a draft consent order under Sec. 106 of CERCLA, 42 U.S.C. Sec. 9606, requiring certain work to be done at the site and providing for reimbursement of all of the government's response and oversight costs. R & H-DVI did not sign, but rather sent a letter to EPA on October 10, 1986, stating that, in R & H-DVI's opinion, the site was inappropriate for handling under CERCLA, under published policy, but rather should be managed under RCRA. 1 Because R & H-DVI was willing to take corrective action and clean up the site at its own expense, EPA agreed. On February 4, 1987, EPA informed R & H-DVI that it had decided to manage the site under RCRA. New personnel from EPA's RCRA office were assigned and the site was subsequently removed from the proposed National Priorities List.

On February 6, 1989, R & H-DVI and EPA entered into an Administrative Consent Order under Sec. 3008(h) of RCRA, 42 U.S.C. Sec. 6928(h). This order provided for R & H-DVI to perform various cleanup related activities on all portions of the site, including those owned by BTA and CP. It did not provide for reimbursement of the government's costs in implementing the order. Pursuant to this order, R & H-DVI has performed required work at the site and continues to do so. 2 This work has been, and continues to be, overseen by EPA.

In November, 1990, the United States brought this action pursuant to CERCLA Sec. 107, 42 U.S.C. Sec. 9607, attempting to recover from the defendants all costs incurred by the government in connection with the site since 1979, and seeking declaratory judgment On appeal, defendants argue that oversight costs incurred by the government are not recoverable under CERCLA Sec. 107; thus, they suggest that they are not liable for most of the government's costs, including all those incurred after February 4, 1987. In addition, defendant CP argues that it should not be jointly and severally liable for the full costs incurred by the government. We have appellate jurisdiction over this case pursuant to 28 U.S.C. Sec. 1291, and because there are no disputed facts on appeal and the resolution of the case turns exclusively on matters of law, our review is plenary.

                declaring recoverable all future costs incurred at the site. 3  Most of these costs were incurred by the government after it had notified R & H-DVI, in February 1987, that it would be managing the site under RCRA rather than CERCLA. 4  The district court found in favor of the government against all four defendants, holding that all the elements of CERCLA liability were met and that none of the five defenses offered were applicable.  It therefore issued an order holding defendants liable for $401,348.78 and for "all costs properly incurred under CERCLA thereafter."  United States v. Rohm & Haas, 790 F.Supp. 1255 (E.D.Pa.1992)
II. Statutory Context

The Resource Conservation and Recovery Act ("RCRA") was originally passed in 1976. Its primary purpose is regulatory: to regulate the storage, transportation, and disposal (STD) of hazardous wastes through a permit system. To obtain a treatment, storage or disposal permit, an applicant must demonstrate that it will conduct its activities in compliance with strict standards. RCRA's permitting program is prospective. It applies only to active STD facilities and to STD facilities that closed after November 19, 1980.

RCRA has been amended several times since its enactment, and as part of its intended "cradle-to-grave" regulatory system for hazardous waste, the statute contains a number of provisions designed to correct the problems posed by existing hazardous waste. These provisions contemplate monitoring and "corrective action" to be performed and paid for by private parties.

Section 3013 of RCRA, adopted in 1980, gives EPA the right to order owners or operators to monitor, test, and analyze facilities in order to ascertain the extent of any environmental hazards. If the owner is unable to do so to EPA's satisfaction, EPA can perform the work itself and have its costs reimbursed from the owner. If EPA conducts its own testing and such tests confirm the results of testing conducted by a private party pursuant to an EPA order, EPA cannot order the party to reimburse EPA's costs. See 42 U.S.C. Sec. 6934 (1988).

Section 7003 of RCRA, the "imminent hazard" provision of RCRA, has existed since RCRA's initial enactment in 1976 but was enhanced by amendments in 1980 and 1984. If EPA finds that any solid or hazardous waste presents an "imminent and substantial endangerment to health or the environment," the current version of the statute permits EPA to bring suit to force any person who has contributed, or is contributing, to the problem to take appropriate corrective action. The section also permits EPA to issue administrative orders as necessary. See 42 U.S.C. Sec. 6973 (1988).

The RCRA corrective action program, added to the statute by the Hazardous and Solid Waste Amendmen...

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