A & W Smelter and Refiners, Inc. v. Clinton

• Decision Date: 24 June 1998
• Docket Number: No. 97-15596,97-15596
• Citation: 146 F.3d 1107
• Parties: , 28 Envtl. L. Rep. 21,341, 98 Cal. Daily Op. Serv. 4864, 98 Daily Journal D.A.R. 6868 A & W SMELTER AND REFINERS, Inc, a California corporation, Plaintiff-Appellant, v. William J. CLINTON, in his official capacity as President of the United States; Carol M. Browner, in her official capacity as Administrator of the U.S. Environmental Protection Agency; Environmental Protection Agency, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1107

146 F.3d 1107

98 ERC 1918, 28 Envtl. L. Rep. 21,341,

98 Cal. Daily Op. Serv. 4864,

98 Daily Journal D.A.R. 6868

A & W SMELTER AND REFINERS, Inc, a California corporation, Plaintiff-Appellant, v. William J. CLINTON, in his official capacity as President of

the United States; Carol M. Browner, in her official

capacity as Administrator of the U.S. Environmental

Protection Agency; Environmental Protection Agency,

Defendants-Appellees.

No. 97-15596.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Feb. 10, 1998.

Decided June 24, 1998.

Matthew J. Nasuti, McQuaid, Metzler, McCormick & Van Zandt, San Francisco, California, for the plaintiff-appellant.

John T. Stahr, Department of Justice, Environment and Natural Resources Division, Washington, DC, for the defendants-appellees.

Appeal from the United States District Court for the Northern District of California; Susan Yvonne Illston, District Judge, Presiding. D.C. No. CV-96-01374-SI/BZ.

Before: GOODWIN, KOZINSKI and THOMPSON, Circuit Judges.

KOZINSKI, Circuit Judge.

The Environmental Protection Agency ordered plaintiff to dispose of ore containing gold and silver because it also contained small quantities of lead. We must resolve various questions of statutory etymology on the way to deciding who must pay for this disposal. ¹

The Ore in Motion and at Rest

"Ore Pile # 2" (O2P) at A & W Smelter's processing facility in the Mojave Desert contained ore that had been piling up since the Sixties. The ore included small amounts of silver and gold, not quite enough to justify smelting by A & W's methods. Unhappily for A & W, the ore also contained some naturally-occurring lead, with some slag mixed in as well. Slag is a waste product of smelting.

Under pressure from state and federal authorities, A & W decided to move O2P. To that end, it contracted with Roelof Mining Company to process the ore in Baja, Mexico. A & W packed the ore into drums and started shipping it, but several trucks were stopped at the border and their contents labeled hazardous because of the lead. Several months later, Mexico returned these trucks to the United States. The EPA ordered A & W to take this ore back within three days, but A & W was unable to arrange a pickup on short notice. EPA then declared the ore abandoned, brought it to a storage facility and issued Order 93-06 directing A & W to dispose of the ore in an approved landfill.

After seeing some of its trucks impounded, A & W diverted other trucks. Six truckloads wound up in Nevada. A & W claims this was a temporary resting place as the ore waited to be processed at the nearby Durga Mine facility. The EPA found this ore as well and issued Order 93-03 directing A & W to ship it to a hazardous waste landfill. ²

A & W complied with both disposal orders and then filed a complaint seeking reimbursement of its compliance costs. See 42 U.S.C. § 9606(b)(2). The EPA and its co-defendants moved for summary judgment, which the district court granted. See A & W Smelter & Refiners, Inc. v. Clinton, 962 F.Supp. 1232 (N.D.Cal.1997). ³

The Statutory Framework

The Comprehensive Environmental Response, Compensation, and Liability Act regulates cleanup and disposal of hazardous substances. CERCLA gives the EPA several mechanisms for enforcing the Act against violators. Under one of these, 42 U.S.C. § 9606(a), "when the President determines that there may be an imminent and substantial endangerment to the public health or welfare or the environment because of an actual or threatened release of a hazardous substance from a facility," he may issue orders, as the EPA did here in his name. Those who violate such orders face fines of up to $25,000 a day. See 42 U.S.C. § 9606(b)(1).

Those who pay for the cleanup, but believe they should not have, may petition for reimbursement of reasonable costs incurred. See 42 U.S.C. § 9606(b)(2)(A). If the EPA refuses, they may sue in district court, see 42 U.S.C. § 9606(b)(2)(B), as A & W did here. A & W is entitled to reimbursement if it was not liable for response costs under section 9607(a). See 42 U.S.C. § 9606(b)(2)(C). Even if otherwise liable, it may be reimbursed if the order was arbitrary and capricious. See 42 U.S.C. § 9606(b)(2)(D). A & W claims reimbursement on both of these grounds.

The EPA claims A & W is responsible for the cleanup costs pursuant to sections 9607(a)(3) & (4), which hold liable "any person who by contract, agreement, or otherwise arranged for disposal or treatment ... of hazardous substances owned or possessed by such person ... from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance...." We must ponder the meaning of several of these statutory words and phrases: "hazardous substance," "release," "disposal," "treatment," "waste" and "imminent and substantial endangerment." ⁴

"Hazardous substance"

EPA labeled O2P a hazardous substance because it contained lead. All agree that at some level of concentration lead is hazardous. But is it hazardous at this level? CERCLA defines hazardous substance as "any substance designated pursuant to" several other statutes, or to EPA regulations promulgated under CERCLA. See 42 U.S.C. § 9601(14). The EPA points to regulations promulgated under CERCLA at 40 C.F.R. § 302.4, where lead is listed, along with various lead compounds. ⁵ The EPA also points to Clean Water Act regulations listing lead. See 33 U.S.C. § 1321(b)(4); 40 C.F.R. § 401.15.

A & W asks us to read a minimum level requirement into the statute and regulations. It argues that trace levels of hazardous substances are present just about everywhere. Read as the EPA suggests, CERCLA seems to give the agency carte blanche to hold liable anyone who disposes of just about anything. Drop an old nickel that actually contains nickel? A CERCLA violation. Throw out an old lemon? It's full of citric acid, another hazardous substance.

It's not surprising that an agency would urge an interpretation which gives it such broad discretion. Perhaps more surprising is that CERCLA leaves us little choice but to agree. Section 9601(14) refers simply to "any substance" designated under one of the various regulations, and the regulations in turn give no minimum levels. The table in 40 C.F.R. § 302.4 does list reportable quantities, but this refers to notification requirements under 42 U.S.C. §§ 9602 & 9603. Under these sections, anyone who owns a facility which stores hazardous substances and releases a quantity of a substance above the reportable level must notify the EPA. Nothing in the law suggests that quantities of a hazardous substance below its reportable level render it no longer hazardous. The Second, Third and Fifth Circuits have faced this very question and all agree that CERCLA's definition of hazardous substance has no minimum level requirement. See United States v. Alcan Aluminum Corp., 990 F.2d 711, 720 (2d Cir.1993) (Alcan II); United States v. Alcan Aluminum Corp., 964 F.2d 252, 260-63 (3d Cir.1992) (Alcan I); B.F. Goodrich Co. v. Murtha, 958 F.2d 1192, 1199-1201 (2d Cir.1992); Amoco Oil Co. v. Borden, Inc., 889 F.2d 664, 669 (5th Cir.1989). We see no basis for parting company.

The Fifth Circuit has imposed a minimum level requirement through the back door. It did so by focusing on language in section 9607(a)(4) which defines a liable person as one responsible for a release "which causes the incurrence of response costs." 42 U.S.C. § 9607(a)(4) (emphasis added); see Amoco, 889 F.2d at 669. The Fifth Circuit held that the release causes the EPA's response only if it poses a serious enough threat to justify the response; otherwise, the response is caused by the agency's overzealousness. See id. at 671. In our view, this reads much too much into the word "causes" in section 9607(a)(4). Where a party is responsible for a particular release, ⁶ that party is a cause of any response to that release, although on occasion EPA overzealousness may be another cause as well. The Fifth Circuit rather explicitly adopted this strained definition of the causation requirement as a way of getting around the lack of a minimum level requirement. See id. at 670. We sympathize, but we believe it is not our function to read into the statute a limitation that Congress did not put there. ⁷ Other circuits agree. See Alcan II, 990 F.2d at 721 (collecting cases).

"Release"

To issue an order under section 9606(a), there must be "an actual or threatened release of a hazardous substance." Release is defined as "any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment (including the abandonment or discarding of barrels, containers, and other closed receptacles containing any hazardous substance or pollutant or contaminant)...." (whew) 42 U.S.C. § 9601(22). For the shipment left near Durga Mine there was unquestionably a release: Wind was blowing particles from the pile; A & W does not dispute this.

There is a serious question, though, as to the shipment the government sent to the Appropriate Technologies facility. As to this shipment, there was no release into the environment (in the ordinary sense): The lead-bearing ore stayed safely within the shipping drums. The government, however, claims that A & W abandoned the ore, which is one form of release under the statute. The EPA's abandonment theory rests on A & W's failure to move the shipment within the time allowed by the EPA. A & W claims that it intended to retrieve the material, but as a small company it couldn't respond within the three days the EPA allowed. The question is whether the agency can deem the shipment abandoned (and therefore released) for purposes of CERCLA because A & W failed to move it within the time allotted by the EPA.

We are unaware of caselaw defining abandonment under section 9601(22). ⁸ Nor is this a term of art specific to CERCLA. Rather, it's a...