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United States v. Aceto Agric. Chem. Corp.

Citation: 19 ELR 21038
No. Nos. 88-1580 et al., 872 F.2d 1373/29 ERC 1529/(8th Cir., 04/25/1989) Aff'd in part, rev'd in part & remanded

The court holds that pesticide manufacturers may be liable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and the Resource Conservation and Recovery Act (RCRA) for hazardous substance contamination resulting from releases occurring during the pesticide formulation process. The formulation process takes the manufacturers' technical grade pesticides and mixes them with inert ingredients using specifications provided by the manufacturer; the resulting commercial grade product is packaged by the formulator and either shipped back to the manufacturer or shipped directly to the manufacturer's customers. The court first holds that the manufacturers "arranged for" the disposal of hazardous substances within the meaning of CERCLA § 107(a)(3). The generation of hazardous waste is inherent in the pesticide formulation process, and thus the manufacturers could not hire the formulator without also "arranging for" disposal of the waste. Congress used broad language in providing for liability for different classes of persons, and § 107(a)(3) does not require an intent to dispose of waste. The phrase must be interpreted in light of CERCLA's two primary goals: that the federal government have the tools for prompt and effective cleanup and that those responsible for problems caused by chemical disposal bear the costs of cleanup. That the manufacturers characterize their relationship with the formulator as a seller-buyer relationship does not prevent the court from looking beyond this characterization to analyze the transaction itself. This case differs from cases where a substance is sold to another party who then incorporates that substance into a product that is later disposed of, since the manufacturers in this case retained ownership of the pesticides throughout the formulation process and the entire process was conducted for the manufacturers' benefit. The court holds that the district court did not err in looking [19 ELR 21039] to common law and that the common law supports the imposition of liability on the manufacturers.

The court then holds that the manufacturers are liable under RCRA § 7003. The court holds that the Environmental Protection Agency was not required to sue under § 7003's imminent and substantial endangerment provision before cleaning up the hazardous waste site, since this would be absurd and unnecessary in the context of a reimbursement action. The court holds that the manufacturers "contributed to" the disposal of hazardous waste arising from the formulation process within the meaning of RCRA § 7003. Legislative reports reviewing RCRA after enactment state that the phrase is to be liberally construed, and RCRA, like CERCLA, is a remedial statute. The court holds that no explicit allegation that a defendant have control over the waste-producing process is required. From the facts provided in the complaint, a trier of fact could reasonably infer that the manufacturers had authority to control the pesticide formulation process. Moreover, the plain dictionary meaning of "contributing to" entails less involvement than might be required by the meaning of the phrase "arrange for"; thus, if the complaint sufficiently alleges that the defendants arranged for the disposal of hazardous substances under CERCLA § 107(a)(3), it logically also sufficiently alleges that they contributed to disposal under RCRA § 7003.

[The district court's decision is published at 18 ELR 21008. Briefs in this case are digested at ELR PEND. LIT. 65964, 66006, and 66026.]

Counsel for Plaintiffs
Patricia Kablach Casano
Land and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 633-4358

Counsel for Defendants
Theodore L. Garrett, Keith A. Teel
Covington & Burling
1201 Pennsylvania Ave. NW, Washington DC 20044
(202) 662-6000

Edward W. Remsburg
Ahlers, Cooney, Dorweiler, Haynie, Smith & Allbee
100 Court Ave., Ste. 600, Des Moines IA 50309
(515) 243-7611

Before HEANEY* and BEAM, Circuit Judges, and LARSON,** Senior District Judge.