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United States v. Cello-Foil Prods., Inc.

ELR Citation: 27 ELR 20441
Nos. 94-1419, 100 F.3d 1227/(6th Cir., 11/22/1996) Rev'd

The Sixth Circuit affirms a district court ruling that defendants who left residual amounts of solvents in drums that they returned to the solvent seller must have intended to enter into a disposal arrangement to be liable under §107(a)(3) of the Comprehensive Environmental Response, Compensation, and Liability Act. The district court, however, erred in assuming that intent could not be inferred from defendants' indirect actions and in granting defendants' motion for summary judgment. The court holds that the requisite inquiry is whether a party intended to enter into a transaction that included an "arrangement for" the disposal of hazardous substances. The intent need not be proven by direct evidence, but can be inferred from the totality of the circumstances. The term "otherwise arranged" follows "contract" and "agreement" in §107(a)(3), and indicates the court must inquire into what transpired between the parties and what the parties had in mind with regard to disposition of the hazardous substance. The court holds that in this case, the primary purpose of the drum return arrangement was to regain money paid to the solvent seller as a deposit; however, the district court erred when it concluded that the government offered absolutely no proof that defendants' further purpose was to dispose of the residual wastes returned with the drums. The record reveals genuine issues of material fact regarding whether the parties returned the solvents to the seller with the additional purpose of disposing of the unused solvents. By employing an overly restrictive view on what is necessary to prove intent, the district court overlooked genuine issues of material fact that made the resolution of this issue inappropriate at the summary judgment stage.

Counsel for Plaintiffs
David C. Shilton
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendants
John R. LaParl Jr.
Smith, LaParl, Mequio & Koning
550 W. Centre Ave., Portage MI 49024
(616) 323-0200

Before: JONES and NORRIS, Circuit Judges; DOWD, District Judge.*