The Alcan Decisions: Causation Through the Back Door

Linda L. Rockwood and James L. Harrison

Editors' Summary: When Congress passed CERCLA, it chose to omit specific reference to joint and several liability in the statute, intending courts to determine the scope of liability on a case-by-case basis. Since then, courts have applied common-law principles, set forth in the Restatement (Second) of Torts, to cases involving multiple defendants responsible for contamination at CERCLA sites. These principles call for imposition of joint and several liability on multiple tortfeasors unless the harm is divisible or there is a reasonable basis for apportionment. Two recent decisions by the U.S. Courts of Appeals for the Second and Third Circuits, both captioned United States v. Alcan Aluminum Corp., may provide some relief to CERCLA defendants seeking to escape joint and several liability. The Third Circuit held that divisibility of harm should be determined at the initial liability phase of a case, affording CERCLA defendants an opportunity to obtain an earlier determination of their liability and reduce their litigation costs. The Second Circuit held that although CERCLA does not require plaintiffs to prove causation, defendants who prove that their pollutants do not exceed background levels or thresholds established by EPA may escape liability.

The authors examine the development of CERCLA case law addressing joint and several liability as background to understanding the two Alcan decisions. They then analyze the decisions and their implications. They suggest how defendants may use the decisions in attempting to limit or avoid CERCLA liability and conclude that the CERCLA defendants who will benefit most from these decisions will be those who are active in the administrative process for establishing hazardous substance thresholds and who use experts effectively to prove divisibility of harm.

Ms. Rockwood and Mr. Harrison are shareholders and directors of Parcel, Mauro, Hultin & Spaanstra, P.C. in Denver, Colorado. Ms. Rockwood specializes in environmental law and has substantial experience in both single and multiparty Superfund proceedings. Her practice also focuses on permitting and compliance work, particularly in the areas of hazardous waste and water quality regulation. Mr. Harrison specializes in litigation, with a particular emphasis on environmental cases, including complex multiparty Superfund actions.

[23 ELR 10542]

The Comprehensive Environmental Response, Compensation, and Liability Act¹ (CERCLA or Superfund) was enacted more than 12 years ago. Although no longer new, the statute, and the case law interpreting it, continue to astonish and frustrate trial lawyers and their clients. Most, if not all, courts that have decided CERCLA cases have determined that liability attaches for disposal activities that were perfectly legal when performed.² Traditional affirmative defenses are generally unavailable.³ Moreover, liability attaches regardless of the quantity of hazardous substances disposed of and notwithstanding [23 ELR 10543] the fact that the quantity is less than that necessary to trigger CERCLA § 103⁴ reporting requirements.⁵ The huge costs associated with hazardous waste cleanups have driven defendants to litigate these and other issues extensively to avoid CERCLA liability. For the most part, those efforts have been unsuccessful. In fact, the more one follows CERCLA case law, the more one wonders whether a defendant who throws a penny on the ground at a national priorities list (NPL) site may be liable for significant response costs.⁶ Despite the pleas that Congress could not have intended virtually every material (including tap water) to be a hazardous substance, little hope existed for a more rational, measured approach — until quite recently.

Two recent decisions captioned United States v. Alcan Aluminum Corp., one by the U.S. Court of Appeals for the Second Circuit (Alcan-New York)⁷ and one by the U.S. Court of Appeals for the Third Circuit (Alcan-Butler),⁸ have created a chink in the government's (and private plaintiffs') CERCLA armor. The opinions provide defendants with additional weapons to limit or avoid potential CERCLA liability. Whether these decisions ultimately expose the soft underbelly of the Superfund dragon, or simply inflict an insignificant scratch, remains to be seen. However, at least for the time being, the terms of the CERCLA dialogue have shifted, and those defendants who can take advantage of the Alcan arguments may be in a better position to succeed in litigation or to negotiate favorable settlements.

This Article traces the development of the CERCLA case law on the critical issue addressed in the Alcan opinions — joint and several liability — and describes the Alcan decisions. The Article suggests how defendants might use these decisions in attempting to limit or avoid CERCLA liability in certain cases.

The Development of Joint and Several Liability Under CERCLA

CERCLA § 107(a) gives a right of action to the United States, to the states, and to private parties. The statute defines four classes of potentially liable parties, and then declares that those parties are liable for, inter alia:

(A) all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe not inconsistent with the national contingency plan;

(B) any other necessary costs of response incurred by any other [party]….⁹

The legislative history of the statute reflects that Congress considered whether to make liability under § 107(a) joint and several.¹⁰ In United States v. Chem-Dyne Corp.,¹¹ the U.S. District Court for the Southern District of Ohio explained that Congress deleted the scope of liability and the term joint and several liability from the language of the bill to avoid a mandatory legislative standard that might produce inequitable results in some cases. Congress omitted the term, not as a rejection of joint and several liability, but in order to have courts determine the scope of liability on a case-by-case basis under common-law principles.¹²

The court concluded that the issue of whether to apply joint and several liability should be determined by reference to the common law, and adopted the approach taken in the Restatement (Second) of Torts.¹³ The Restatement provides:

§ 433A. Apportionment of Harm to Causes

(1) Damages for harm are to be apportioned among two or more causes where

(a) there are distinct harms, or

(b) there is a reasonable basis for determining the contribution of each cause to a single harm.

(2) Damages for any other harm cannot be apportioned among two or more causes.

§ 881. Distinct or Divisible Harms

If two or more persons, acting independently, tortiously cause distinct harms or a single harm for which there is a reasonable basis for division according to the contribution of each, each is subject to liability only for the portion of the total harm that he has himself caused.¹⁴

In the court's language, "[t]hese rules clearly enumerate the analysis to be undertaken when applying 42 U.S.C. § 9607 and are most likely to advance the legislative policies [23 ELR 10544] and objectives of the Act."¹⁵ Applying these Restatement provisions, the Chem-Dyne court denied the defendants' motion for partial summary judgment that their CERCLA liability was not joint and several, because unresolved factual questions existed surrounding, inter alia, the intermixing of waste, the source of groundwater contamination, the degree of waste migration, and the health hazard posed by the particular wastes.¹⁶

Since Chem-Dyne, numerous courts have adopted the Restatement approach, reasoning that it is most consistent with the goals of CERCLA. In United States v. Wade,¹⁷ the U.S. District Court for the Eastern District of Pennsylvania explained that the Chem-Dyne/Restatement approach does not unfairly hamper the government's ability to recover costs it incurred in cleaning up hazardous waste dump sites, and helps to ameliorate the harshness of CERCLA's liability provisions.¹⁸ Also, "it appears to embody the general congressional intent of placing liability for toxic waste clean-up as nearly as possible on those responsible for creating the hazard."¹⁹

The Chem-Dyne/Restatement approach was not universally adopted. In Allied Corp. v. Acme Solvents Reclaiming, Inc.,²⁰ the U.S. District Court for the North District of Illinois rejected a pure divisibility test and adopted what it called a "moderate approach." The court stated that

[t]he moderate approach involves employing the Chem-Dyne - Restatement rule as a general rule susceptible to exceptions. Under the moderate approach, if the court finds that the injury is indivisible, the court has the discretion to hold the defendants jointly and severally liable. The court may, on the other hand, reject joint and several liability, regardless of the indivisibility of the harm, where the peculiar facts of the case point to a more fair apportionment of liability.²¹

Under this "moderate approach," where the harm is indivisible, the factors relevant to the issue of joint and several liability are the considerations commonly referred to as the "Gore factors."²²

It is noteworthy that this "moderate approach" was developed in a private-party action. The principal argument advanced by the government in favor of joint and several liability — that cleanups of hazardous waste sites would be slowed if the government were required to bring all potentially responsible parties (PRPs) into cost recovery litigation — holds considerably less weight when the government is not the plaintiff.²³ Given the potential liability a PRP might have to the government, the PRP's decision whether to conduct a CERCLA cleanup most likely will not be affected by whether the PRP is entitled to joint and several liability in a contribution or cost recovery action against other PRPs.²⁴

The "moderate approach" did not find favor with other courts, even in other private-party actions. Therefore, notwithstanding that joint and several liability is not automatic under the Chem-Dyne/Restatement approach

[t]he practical effect of placing the burden on defendants has been that responsible parties rarely escape joint and several liability, courts regularly finding that where wastes of varying (and unknown) degrees of toxicity and migratory potential commingle, it simply is impossible to determine the amount of environmental harm caused by each party.²⁵

[23 ELR 10545]

The Alcan Cases

Alcan-Butler

The Third Circuit's decision in Alcan-Butler resulted from the cleanup of the Butler Tunnel NPL site in Pittston, Pennsylvania. The site was originally a series of deep underground mine workings that were drained by the Butler Tunnel into the Susquehanna River. The mines were accessible at various surface locations, including a borehole located on the premises of Hi-Way Auto Service. During the late 1970s, Hi-Way's owner permitted numerous liquid waste transport companies to dispose of approximately two million gallons of liquid waste into the borehole.

Alcan operated an aluminum sheet and plate manufacturing facility in Oswego, New York. Alcan's manufacturing process involved hot-rolling aluminum ingots. To keep the rolls cool and lubricated during the process, Alcan circulated an emulsion through the rolls. Ninety-five percent of the emulsion consisted of deionized water; five percent consisted of mineral oil. At the end of the process, Alcan removed the used emulsion and replaced it with unused emulsion.²⁶

During the manufacturing process, small fragments of the aluminum ingots, contaminated with traces of copper, chromium, cadmium, lead, and zinc,²⁷ broke off into the emulsion. Approximately 35,000 gallons of the used emulsion were disposed of in the borehole. In 1985, approximately 100,000 gallons of water containing hazardous substances were released from the site into the Susquehanna River. The U.S. Environmental Protection Agency (EPA or the Agency) incurred response costs in responding to the release and brought suit under CERCLA § 107(a) against 20 defendants. Nineteen of the defendants entered into consent decrees to settle their liability.²⁸ The government then moved for summary judgment against Alcan Aluminum Corp. The district court granted the motion, holding that Alcan was jointly and severally liable for all of the government's unreimbursed response costs.²⁹

Alcan appealed to the Third Circuit, arguing numerous grounds for reversal, almost all of which the court rejected. Alcan first argued that CERCLA liability cannot be imposed unless a generator's waste contains a threshold level of hazardous substances. The court rejected this argument on the grounds that the statutory language imposes no quantitative requirement, the legislative history supports no such requirement, and the overwhelming weight of CERCLA authority has rejected the argument.³⁰ Alcan next argued that generic compounds listed in Table 302.4³¹ without reference to reportable quantities or Chemical Abstract Service Registry Numbers (CASRNs) are not CERCLA hazardous substances. The court rejected this argument as well, stating that the generic compounds were clearly "listed," and that the CASRNs were provided for the convenience of the user only. Referring to EPA's position that generic categories of substances are considered hazardous substances, the court stated that deference to the Agency's interpretation of the statute was required because the interpretation was reasonable and consistent with the language of the statute.³²

Alcan argued that the district court's interpretation of the statute was flawed "because it imposes liability on generators of allegedly 'hazardous substances' although the substances pose no real threat to the environment."³³ The court rejected this argument, stating that it is the "release alone that must justify the response costs, not the particular waste generated by one given defendant."³⁴ The court added that

the fact that a single generator's waste would not in itself justify a response is irrelevant in the multi-generator context, as this would permit a generator to escape liability where the amount of harm it engendered to the environment was minimal, though it was significant when added to other generators' waste.³⁵

Alcan also argued that the government must demonstrate that Alcan's waste caused or contributed to the release or the government's incurrence of response costs. The government responded that the statute only requires the government to show that the release caused the incurrence of response costs. The court again rejected Alcan's argument, finding that it was at odds with both the language of the statute and its legislative history. The court noted that virtually every court that had addressed the issue had rejected Alcan's argument.³⁶

The court then acknowledged that Alcan's concerns of unlimited CERCLA liability were not unfounded. The court noted that without a threshold of some sort, the statutory definition of hazardous substances would include federally [23 ELR 10546] approved drinking water.³⁷ The court stated that since CERCLA plaintiffs need not prove specific causation, "CERCLA seemingly would impose liability on every generator of hazardous waste, although that generator could not, on its own, have caused any environmental harm."³⁸

The court also stated that the government had a legitimate concern that '"each defendant in a multi-defendant case could avoid liability by relying on the low concentrations of hazardous substances in its waste, while the plaintiff is left with the substantial clean-up costs associated with the defendant's accumulated wastes.'"³⁹ According to the court, "the common law principles of joint and several liability provide the only means to achieve the proper balance between Alcan's and the Government's conflicting interests and to infuse fairness into the statutory scheme without distorting its plain meaning or disregarding congressional intent."⁴⁰

As had the Chem-Dyne court, the Alcan-Butler court turned to the Restatement (Second) of Torts for guidance, and particularly §§ 433A and 881.⁴¹ Under these Restatement provisions, "of critical importance in this analysis is whether a harm is divisible and reasonably capable of apportionment, or indivisible, thereby subjecting the tortfeasor to potentially far-reaching liability."⁴² The court rejected the government's argument that the harm was indivisible simply because the wastes were commingled, and concluded that a hearing was necessary to determine whether the harm was divisible.⁴³ Alcan argued that a hearing was unnecessary. It asserted that it was technically impossible for its waste to have contributed to a release, because its waste diluted the other waste at the site, and the metals in its waste were below ambient levels. The court rejected this argument, holding that the proper forum for the argument was the district court and noting "the intensely factual nature of the 'divisibility' issue."⁴⁴

The court held that on remand the district court must give Alcan the opportunity to prove that the harm is divisible and that the damages can be reasonably apportioned. The government need not prove that Alcan's emulsion caused the release or the response costs.⁴⁵ However, "if Alcan proves that the emulsion did not or could not, when mixed with other hazardous wastes, contribute to the release and the resultant response costs, then Alcan should not be responsible for any response costs."⁴⁶ The court held that divisibility is best resolved at the initial liability phase of the case and not at the contribution phase.⁴⁷ "[I]f the defendant can prove that the harm is divisible and that it only caused some portion of the injury, it should only be held liable for that amount."⁴⁸

The court noted that resolution at the liability phase would prevent a defendant from being "strong-armed" into settlement where other defendants had settled but there had been no ruling on divisibility. Thus, in effect, the court ruled that divisibility of harm can be either a complete or a partial affirmative defense to CERCLA liability.

Alcan-Butler is not a revolutionary new approach to the issue of joint and several liability. The holding is essentially the same as that in Chem-Dyne, written almost 10 years earlier. In both cases, the courts noted that divisibility is a factual issue, resolution of which depends on the nature of the waste and the conditions of the site at which the waste was disposed of. However, two aspects of the opinion stand out as staking new ground in CERCLA law. First is the court's refusal to adopt the familiar refrain that commingling of waste automatically means indivisible harm. Second is the court's acknowledgement that a defendant who is liable under § 107(a) and does not qualify for any of the § 107(b)⁴⁹ affirmative defenses may nonetheless escape liability altogether by showing that its waste could not, when mixed with other hazardous substances, have contributed to the release.

This latter holding is particularly significant because CERCLA cases are now routinely bifurcated or even trifurcated. The court's ruling provides a defendant who must otherwise proceed through an allocation trial with the opportunity for an "early out" at the liability phase. Furthermore, it provides a defendant with the opportunity for an early determination that its liability is limited to certain costs, and thus may allow the defendant to limit its subsequent participation in the case. This may lead to a significant savings in transactions costs.

Alcan-New York

The Second Circuit's decision in Alcan-New York arose from the disposal of the same waste disposed of in Alcan-Butler, but at a different location. In Alcan-New York, the United States and the state of New York brought an action under CERCLA § 107(a) to recover costs incurred in cleaning up the Pollution Abatement Services site in Oswego County, New York, where approximately 4.6 million gallons of Alcan's emulsion had been disposed of. The government sued 83 defendants and entered into consent decrees with 82 of them. The government then moved for summary judgment against Alcan, the sole remaining defendant. The district court granted the motion, holding that Alcan was liable for all the government's unreimbursed response costs.

Alcan presented the same arguments to the Second Circuit [23 ELR 10547] as it had to the Third Circuit, and the Second Circuit reached a similar conclusion. It rejected Alcan's causation and quantitative threshold arguments and adopted the divisibility analysis of the Restatement (Second) of Torts. The court held that

Alcan may escape any liability for response costs if it either succeeds in proving that its oil emulsion, when mixed with other hazardous wastes, did not contribute to the release and the clean-up costs that followed, or contributed at most to only a divisible portion of the harm.⁵⁰

The court acknowledged that its ruling, in effect, reintroduced causation:

[W]e candidly admit that causation is being brought back into the case — through the backdoor, after being denied entry at the frontdoor — at the apportionment stage. We hasten to add nonetheless that causation — with the burden on the defendant — is reintroduced only to permit a defendant to escape payment where its pollutants did not contribute more than background contamination and also cannot concentrate. To state this standard in other words, we adopt a special exception to the usual absence of a causation requirement, but the exception is applicable only to claims, like Alcan's, where background levels are not exceeded. And we recognize this limited exception only in the absence of any EPA thresholds.⁵¹

As did the Third Circuit in Alcan-Butler, the Second Circuit held that "commingling is not synonymous with indivisible harm."⁵² The court concluded that "the choice as to when to address divisibility and apportionment are questions best left to the sound discretion of the trial court in the handling of an individual case."⁵³

Whether or not the holdings in the two Alcan cases are identical is unclear. Both cases hold that commingling of waste is not synonymous with indivisibility of harm. However, the language in Alcan-New York suggests that a defendant can escape all liability only if the levels of hazardous substances in its waste do not exceed either background levels or an EPA "threshold." Alcan-Butler is not so explicitly limited.

Furthermore, Alcan-New York is ambiguous on the issue of whether a defendant may limit its liability under a divisibility theory, as opposed to escaping liability altogether. Given the ambiguity, defendants should expect the government to argue that the Alcan-New York divisibility defense is available only to generators whose waste contains levels of hazardous substances below background and below any EPA thresholds. The more reasonable reading seems to be that, as under Alcan-Butler, the defendant has the opportunity to demonstrate a reasonable basis for apportioning liability. Relevant evidence will include "relative toxicity, migratory potential, degree of migration, and synergistic capacities of the hazardous substances at the site."⁵⁴

Alcan-New York goes further than Alcan-Butler in one respect. The Second Circuit appears to have created a "safe harbor" for generators in certain circumstances.⁵⁵ The court stated that a defendant can escape liability altogether if it can show that "its pollutants did not contribute more than background contamination and also cannot concentrate."⁵⁶ In another respect, however, Alcan-New York does not go as far as Alcan-Butler. The Second Circuit stated that the trial court should exercise its discretion to determine whether to address divisibility in an initial liability phase or in a later allocation phase.

The issue of when divisibility will be addressed is significant for defendants and can dramatically impact the course of litigation. If, as the Third Circuit held in Alcan-Butler, divisibility is addressed at the liability phase, defendants will know early on whether their liability is joint and several and can construct their trial and settlement strategies accordingly. If divisibility is not addressed until a later stage of trial, defendants face significantly greater uncertainty and transaction costs, as a result of not knowing which issues they must litigate and which they need not.

Because a defendant could escape liability altogether under the Alcan cases, divisibility should generally be addressed during the initial liability phase of trial. The issue of whether a defendant's waste could have caused any harm at the site is closely related to the issue of whether a reasonable basis exists for determining the contribution of each defendant's waste to the harm. Consequently, in most cases, it would be appropriate to address all divisibility issues during the liability phase, thus preventing significant duplication of evidence in the different phases.⁵⁷

In Alcan-New York, the Second Circuit refused to state that divisibility issues should be addressed at the liability phase because this might be "contrary to the statutory dictates of CERCLA."⁵⁸ However, the court's analysis does not adequately explain how the purposes of CERCLA would be compromised by deciding divisibility issues at the liability stage of litigation. In fact, to the extent that one of CERCLA's purposes is to "expedite civil actions,"⁵⁹ resolution of divisibility issues early in the litigation will likely accomplish that purpose, because it will resolve what are usually the most significant issues that impede settlement.

The issue of the burden of proof placed on the defendant in the Alcan cases requires further definition. Once EPA proves a release and the presence of a hazardous substance in the waste contributed by a PRP, the PRP must establish the distinct or divisible nature of the harm. At that point, does the burden shift back to EPA to establish that the PRP's waste may concentrate or create synergistic effects?

Defendants in private-party actions may also want to challenge whether they should bear the burden of proof on divisibility. In determining that the defendant should bear [23 ELR 10548] that burden, Alcan-Butler relied on the Restatement (Second) of Torts § 433B, comment d.⁶⁰ That comment states that burden shifting is appropriate because "[a]s between the proved tortfeasor who has clearly caused some harm, and the entirely innocent plaintiff, any hardship due to lack of evidence as to the extent of the harm should fall upon the former."⁶¹ In most private-party actions, the plaintiff will not be entirely innocent, and thus the defendant may be able to challenge the burden shifting.

Alcan and Future Litigation

The Alcan cases themselves merit close monitoring to see if Alcan Aluminum Corp. can "pass" the tests established by the appellate courts when the evidentiary hearings are held in the trial courts. The size of the hurdle created by the Alcan decisions has yet to be defined.

The Alcan opinions provide limited guidance on how to prove a divisibility defense, except with respect to generators whose waste contains only levels of inorganics below background concentrations. The inquiry will be factual and site-specific.⁶² The "background" defense is available only if the EPA has not established other, more stringent "thresholds."⁶³ Generators are well-advised to monitor closely the administrative process as it relates to any thresholds that EPA might establish. Such thresholds could represent the difference between no liability and full joint and several liability.⁶⁴

The question of whether the waste content exceeds background levels and can concentrate may not be as simple as it might appear. First, whether or not the waste is below background levels depends on sampling and averaging methods that may raise additional issues.⁶⁵ Second, whether or not a waste can "concentrate" may be difficult to determine. For example, some substances in a liquid slurry may be adsorbed into adjacent soils, causing an increase in the levels in those soils. However, as a result, the water phase of the waste may then have lower concentrations than existed in the waste originally. How this will sort out is unclear.

For those generators who disposed of waste that contains substances that are not naturally occurring, or disposed of waste that contained naturally occurring substances at higher than background levels, the task of proving divisibility may be more difficult. As a threshold issue, the defendant should determine whether its argument is based on the fact that there exists a distinct harm that results from its waste, or whether it is arguing that there is a reasonable basis for "dividing" the harm. Although neither Alcan case addressed this distinction, it appears clearly in the Restatement.⁶⁶ A defendant that can show a distinct harm may have a better chance of success in avoiding joint and several liability. In cases in which the defendant must show divisibility of harm, where wastes are commingled, the defendant should emphasize that its burden is to demonstrate a reasonable basis for apportionment, and that the intent of Congress was to have responsible parties pay for harm that their actions caused or contributed to.

Physical Divisibility

A defendant whose waste was placed at a different location and requires a different cleanup than other wastes is in a good position to argue that the harm from its waste is distinct and therefore its liability should be limited to the costs of cleaning up its waste. For example, a generator whose waste was disposed of in drums that have not leaked could effectively argue that its liability should be limited to the investigation of the drums and their removal.

In some cases, the nature of the waste might be such that a defendant could argue that its liability should be limited to cleaning up particular environmental media. For example, if a certain waste has contributed to soil contamination but has not been detected in groundwater, the generator of that waste might effectively maintain that it should bear no liability for groundwater cleanup.⁶⁷

In other circumstances, a defendant might successfully limit its liability to cleaning up only a portion of one medium. For example, if a generator of polychlorinated biphenyls (PCBs) is involved at a site where there is widespread soil contamination, but its PCBs were disposed of only in a small area, the generator might succeed in limiting its liability to the portion of the soil removal necessitated by its waste.⁶⁸

Type of Response Action

CERCLA authorizes two types of response actions: removal and remedial actions. Removal actions are short-term cleanups to remedy a situation that poses an imminent hazard.⁶⁹ Remedial actions are longer term and are designed to permanently remedy the environmental injury.⁷⁰ At many sites, [23 ELR 10549] both types of response actions are taken. Where a removal action is necessary because of an imminent hazard posed by the presence of one defendant's waste, and EPA conducts the removal, other defendants may be able to argue successfully that the harm from their waste is distinct and that they should have no liability for the removal action.

Take, for example, a situation in which an abandoned waste disposal site is now leaching contaminants into an adjacent stream. EPA conducts a removal action to prevent further contamination of the stream, and then conducts a remedial investigation/feasibility study to evaluate long-term remedial action. A PRP that could demonstrate that its waste did not migrate to the stream, and that its waste could not be expected to migrate there in the reasonably foreseeable future, might successfully argue that it should not be liable for the costs of removal.

These are only a few examples of arguments that defendants might make. Others may be available, depending on the circumstances of the individual case. Creativity is clearly called for, both from counsel and from experts, who will be critical in developing any divisibility theory.

Conclusion

The Alcan decisions have provided PRPs with significant opportunities to limit their CERCLA liabilities. The PRPs who will benefit most are those who are active in the administrative process and who use experts effectively in litigation. Whether or not the Alcan decisions ultimately result in additional fairness in the statutory scheme remains to be seen.

1. 42 U.S.C. §§ 9601-9675, ELR STAT. CERCLA 007-075.

2. See e.g., United States v. Northeastern Pharmaceutical & Chem. Co., 810 F.2d 726, 732-33, 17 ELR 20603, 20606 (8th Cir. 1986), cert. denied, 484 U.S. 848 (1987); Kelley v. Thomas Solvent Co., 714 F. Supp. 1439, 1443-45 (W.D. Mich. 1989); United States v. Mottolo, 695 F. Supp. 615, 621, 19 ELR 20442, 20445 (D.N.H. 1988).

3. CERCLA § 107(a), 42 U.S.C. § 9607(a), ELR STAT. CERCLA 024, states that liability is imposed on four classes of parties "subject only to the defenses set forth in subsection (b)." Subsection (b) sets forth three affirmative defenses: act of God, act of war, and, in very limited circumstances, acts or omissions of third parties. 42 U.S.C. § 9607(b), ELR STAT. CERCLA 025. The issue of whether CERCLA permits other equitable, affirmative defenses has been litigated frequently, and most courts have ruled that the only affirmative defenses available under CERCLA are those specified in § 107(b). See, e.g., United States v. Kramer, 757 F. Supp. 397, 424-28, 21 ELR 20879, 20890-92 (D.N.J. 1991); Versatile Metals v. Union Corp., 693 F. Supp. 1563, 1572, 19 ELR 20472, 20475 (E.D. Pa. 1988). But see Mardan Corp. v. C.G.C. Music, Ltd., 600 F. Supp. 1049, 15 ELR 20370 (D. Ariz. 1984), aff'd on other grounds, 804 F.2d 1454, 17 ELR 20209 (9th Cir. 1986) (court allows assertion of equitable defense of unclean hands).

4. 42 U.S.C. § 9603, ELR STAT. CERCLA 011.

5. CERCLA § 107(a) imposes liability for disposal of "hazardous substances" as defined in § 101(14), 42 U.S.C. § 9601(14), ELR STAT. CERCLA 007. The courts have consistently held that § 101(14) imposes no quantitative threshold for CERCLA liability to attach. See, e.g., Amoco Oil Co. v. Borden, Inc., 889 F.2d 664, 669, 20 ELR 20281, 20283-84 (5th Cir. 1989); City of New York v. Exxon Corp., 744 F. Supp. 474, 483, 21 ELR 20248, 20252 (S.D.N.Y. 1990); United States v. Western Processing Co., 734 F. Supp. 930, 936, 20 ELR 20990, 20992 (W.D. Wash. 1990); United States v. Conservation Chem. Co., 619 F. Supp. 162, 238, 16 ELR 20193, 20227 (W.D. Mo. 1985).

6. Cf. United States v. Atlas Minerals & Chems., Inc., 797 F. Supp. 411, 419, 23 ELR 20288, 20291 (E.D. Pa. 1992) (court states that its ability to take into account the nature of the defendant's waste, the care exercised by the defendant, and "traditional equitable principles" allows it to answer in the negative the question of whether one who throws a penny in a landfill is liable for cleanup costs). Of course, these inquiries have often been left to the allocation or contribution phase of CERCLA litigation, thus exposing the generator to significant litigation costs and risks before these factors are considered by the court.

7. 990 F.2d 711, 23 ELR 20706 (2d Cir. 1993)

8. 964 F.2d 252, 22 ELR 21124 (3rd Cir. 1992).

9. CERCLA § 107(a)(4), 42 U.S.C. § 9607(a)(4), ELR STAT. CERCLA 024. Courts have universally acknowledged that CERCLA § 107 creates a strict liability scheme. See, e.g., New York v. Shore Realty Corp., 759 F.2d 1032, 1044, 15 ELR 20358, 20363 (2d Cir. 1985); United States v. Northeastern Pharmaceutical & Chem. Co., 579 F. Supp. 823, 844, 14 ELR 20212, 20221 (W.D. Mo. 1984), aff'd in part and rev'd in part, 810 F.2d 726, 17 ELR 20603 (8th Cir. 1986); United States v. Consolidated Rail Corp., 729 F. Supp. 1461, 20 ELR 20737 (D. Del. 1990). Strict liability, however, does not mean that the statute contains no causation requirement. See Louisiana-Pacific Corp. v. Beazer Materials & Servs., 811 F. Supp. 1421, 1430 (E.D. Cal. 1993) ("There is nothing about strict liability which compels a diminished causation standard….").

10. Joint and several liability is a judicial doctrine under which one defendant is liable for all of the plaintiff's damages, notwithstanding that other parties were also responsible for the harm. The fact that a defendant is jointly and severally liable does not automatically mean that it will ultimately pay the full amount of the damages; the defendant may have a right of contribution from other responsible parties. See generally W. PAGE KEETON ET AL., PROSSER AND KEETON ON THE LAW OF TORTS §§ 47-50 (5th ed. 1984).

11. 572 F. Supp. 802, 13 ELR 20986 (S.D. Ohio 1983).

12. Id. at 808, 13 ELR at 20988.

13. RESTATEMENT (SECOND) OF TORTS §§ 433A, 433B, 875, 881 (1977).

14. RESTATEMENT (SECOND) OF TORTS §§ 433A, 881 (1979) [hereinafter RESTATEMENT (1979)]. See also RESTATEMENT § 433B (regarding burden of proof).

15. Chem-Dyne, 572 F. Supp. at 810, 13 ELR at 20988.

16. Id. at 811, 13 ELR at 20989.

17. 577 F. Supp. 1326, 14 ELR 20096 (E.D. Pa. 1983).

18. Id. at 1339, 14 ELR at 20100.

19. Id. at 1339, 14 ELR at 20100-01. Other courts adopting the Chem-Dyne/Restatement approach in cases involving the United States or a state include O'Neil v. Picillo, 883 F.2d 176, 20 ELR 20115 (1st Cir. 1989); United States v. Monsanto Co., 858 F.2d 160, 19 ELR 20085 (4th Cir. 1988), cert. denied, 490 U.S. 1106 (1989); United States v. Arrowhead Refining Co., 25 Chem. Waste Lit. Rep. 725 (D. Minn. 1992); In re National Gypsum Co., 139 B.R. 397, 22 ELR 20783 (N.D. Tex. 1992); United States v. Hardage, 761 F. Supp. 1501, 21 ELR 20706 (W.D. Okla. 1990); United States v. Velsicol Chem. Corp., 19 Chem. Waste Lit. Rep. 440, 443 (W.D. Tenn. 1989); Idaho v. Bunker Hill Co., 635 F. Supp. 665, 16 ELR 20879 (D. Idaho 1986).

20. 691 F. Supp. 1100, 19 ELR 21254 (N.D. Ill. 1988).

21. Id. at 1116, 19 ELR at 21261.

22. The Gore factors are waste volume and toxicity, distinguishable contribution to the problem, degree of involvement in waste management practices, degree of care exhibited, and degree of cooperation with the government. See United States v. A & F Materials Co., Inc., 578 F. Supp. 1249, 1256, 14 ELR 20105, 20108 (S.D. Ill. 1984). In the context of CERCLA private-party contribution actions, these factors have been applied by a number of courts to apportion costs. See, e.g., United States v. R. W. Meyer, Inc., 932 F.2d 568, 576-78, 21 ELR 21062, 21066-67 (6th Cir. 1991); Weyerhaeuser Co. v. Koppers Co., 771 F. Supp. 1420, 1426, 22 ELR 20168, 20170-71 (D. Md. 1991); A & F Materials Co., 578 F. Supp. 1249, 1256, 14 ELR 20105, 20108 (S.D. Ill. 1984); see also Environmental Transp. Sys., Inc. v. ENSCO, Inc., 969 F.2d 503, 507-09, 22 ELR 21361, 21362-63 (7th Cir. 1992) ("[t]he Gore factors are neither an exhaustive nor exclusive list").

23. In Colorado v. Asarco, Inc., 608 F. Supp. 1484, 1491, 15 ELR 20523, 20526-27 (D. Colo. 1985), the court stated that joint and several liability is a "powerful tool" to expedite hazardous waste damages, because it avoids the delays inherent in litigation involving all PRPs. It is not clear that the fact of such litigation would necessarily slow remedial action at an NPL site. Furthermore, litigation involving numerous PRPs need not necessarily be long and protracted. See Order Approving Settlements: 1993-10, City and County of Denver et al. v. Adolph Coors Co. et al., Civil Action No. 91-F-2233 (D. Colo. May 7, 1993) (court explains procedures used to resolve complex, multiparty Superfund litigation in one year).

24. As a general rule, joint and several liability is not available in a contribution action. See United States v. Conservation Chem. Co., 619 F. Supp. 162, 229, 16 ELR 20193, 20222-23 (W.D. Mo. 1985) ("No tortfeasor can be required to make contribution beyond his own equitable share of the liability," quoting RESTATEMENT (SECOND) OF TORTS § 886A.). However, there is considerable confusion in the case law over whether an action by a private PRP who performs a cleanup at an NPL site against other PRPs is a § 107(a) cost recovery action, where joint and several liability may be available, or a § 113(f) contribution action in which joint and several liability is not available. Compare Dravo Corp. v. Zuber, 804 F. Supp. 1182, 1189, 23 ELR 20317, 20321 (D. Neb. 1992) (response cost claim is "indistinguishable" from claim for contribution) and Transtech Indus., Inc. v. A & W. Septic Clean, 798 F. Supp. 1079, 1086 (D.N.J. 1992) (claim against one liable party by another liable party who incurred response costs is claim for contribution) with Allied Corp. v. Acme Solvents Reclaiming, Inc., 691 F. Supp. 1100, 1117-18, 19 ELR 21254, 21262 (N.D. Ill. 1988) (rejecting argument that all cost recovery claims among PRPs are essentially contribution claims). Analysis of this complex issue is beyond the scope of this Article.

25. O'Neil v. Picillo, 883 F.2d 176, 178-79, 20 ELR 20115, 20116-17 (1st Cir. 1989); see also United States v. Stringfellow, 661 F. Supp. 1053, 1060, 17 ELR 21134, 21135 (C.D. Cal. 1987) (joint and several liability appropriate because of the "synergistic effects" of the commingling of wastes; court finds it impossible to determine which defendant's wastes contributed in what manner to releases and threats of release); City of New York v. Exxon Corp., 766 F. Supp. 177, 197-98, 22 ELR 20145, 20154-55 (S.D.N.Y. 1991) (generator jointly and severally liable because commingling of waste precluded finding that harm was divisible because of impossibility of distinguishing one generator's waste from another's); Central Ill. Pub. Serv. Co. v. Industrial Oil Tank & Line Cleaning Serv., 730 F. Supp 1498, 21 ELR 20076 (W.D. Mo. 1990). But see United States v. Ottati & Goss, 24 ERC 1152, 11 Chem. Waste Lit. Rep. 752 (D.N.H. 1986) (court apportions liability for surface cleanup based on number of drums of waste sent to site, which was "reasonable basis" for apportionment).

26. United States v. Alcan Aluminum Corp., 964 F.2d 252, 256, 22 ELR 21124, 21125 (3d Cir. 1992).

27. Listed as hazardous substances in 40 C.F.R. § 302.4, Table 302.4 (1992).

28. The court noted that if judgment were entered against Alcan for the full amount of the government's unreimbursed response costs (i.e., the amounts not collected from settlors), Alcan would be liable for over 36 percent of the total response costs, although Alcan comprised only 1 of 20 defendants. 964 F.2d at 270, n.29, 22 ELR at 21134, n.29. Alcan's waste volume amounted to only 1.5 percent of the total waste volume at the site.

29. CERCLA § 113(f)(2), 42 U.S.C. § 9613, ELR STAT. CERCLA 039, provides that

[a] person who has resolved its liability to the United States or a State shall not be liable for claims for contribution regarding matters addressed in the settlement. Such settlement does not discharge any of the other potentially liable persons unless its terms so provide, but it reduces the potential liability of the others by the amount of the settlement.

Thus, Alcan could not bring a contribution action against any of the settlors for costs associated with matters addressed in the settlements.

30. Alcan-Butler, 964 F.2d at 260-61, 22 ELR at 21127-28.

31. 40 C.F.R. § 302.4, Table 302.4 (1992).

32. Alcan-Butler, 964 F.2d at 262-63, 22 ELR at 21129-30. The court also rejected Alcan's argument that the district court erred in failing to determine whether the compounds exhibit the characteristics of hazardous waste under 40 C.F.R. §§ 261.20-24 (1992).

33. Id. at 264, 22 ELR at 21130.

34. Id. (Emphasis in original.)

35. Id.

36. The Third Circuit took pains to distinguish Amoco Oil Co. v. Borden, Inc., 889 F.2d 664, 20 ELR 20281 (5th Cir. 1989), on the ground that Amoco involved a one-generator site. 964 F.2d at 265-66, 22 ELR at 21131. The court rejected Louisiana-Pacific Corp. v. Asarco, Inc., 735 F. Supp. 358, 20 ELR 21452 (W.D. Wash. 1990), stating, "With all due respect, we believe that the court reached its conclusion based on an incorrect analysis of Dedham Water Co. v. Cumberland Farms Diary, Inc. … and Amoco Oil Co. v. Borden, Inc. … and we decline to follow it." Alcan-Butler, 964 F.2d at 266 n.23, 22 ELR at 21131, n.23 (citations omitted).

37. Alcan-Butler, 964 F.2d at 267, 22 ELR at 21132.

38. Id. at 267, 22 ELR at 21132.

39. Id. (quoting government's brief at 32). The precise scope of this concern is unclear. The government argues that a defendant should not be able to avoid liability by claiming that its waste, if it were the only waste disposed of at the site, would not have required remediation. However, if all defendants' wastes are at such low concentrations that they would not require remediation, it is difficult to imagine that the site would pose a risk that would justify placement on the NPL.

40. Id. at 268, 22 ELR at 21133.

41. RESTATEMENT (1979), supra note 14, §§ 433A, 881.

42. Alcan-Butler, 964 F.2d at 269, 22 ELR at 21133-34. The court expressly noted comment d to Restatement § 433A, in which the following statement appears: "Such apportionment is commonly made in cases of private nuisance, where the pollution of a stream … has interfered with the plaintiff's use and enjoyment of his land." The Third Circuit described this by stating that "the drafters of the Restatement found that joint pollution of water is typically subject to the divisibility rule." Id. at 269 n.27, 22 ELR at 21133, n.27.

43. Id. at 270 n.29, 22 ELR at 21134, n.29.

44. Id. at 269, 22 ELR at 21133-34.

45. Id. at 270, 22 ELR at 21134.

46. Id. at 270, 22 ELR at 21134 (emphasis in original).

47. Id. at 270 n.29, 22 ELR at 21134, n.29.

48. Id. at 270 n.29, 22 ELR at 21134, n.29 (emphasis in original).

49. 42 U.S.C. § 9607(b), ELR STAT. CERCLA 025.

50. United States v. Alcan Aluminum Corp., 990 F.2d 711, 722, 23 ELR 20706, 20711 (2d Cir. 1993).

51. Id.

52. Id.

53. Id. at 723, 23 ELR at 20712.

54. Id. at 722, 23 ELR at 20711.

55. This "safe harbor" may be available principally to generators whose waste contains only metals and no organics, because generally there are no naturally occurring levels for most hazardous organics.

56. Alcan-New York, 990 F.2d at 722, 23 ELR at 20711.

57. If the court rules that not all divisibility issues should be resolved in the liability phase, defendants would be wise to consider trial techniques that will avoid duplicative testimony at different phases and will streamline trial procedures. See generally In re Air Crash Disaster at Stapleton Intern., 720 F. Supp. 1493 (D. Colo. 1989).

58. Alcan-New York, 990 F.2d at 723, 23 ELR at 20711.

59. See id. at 723, 23 ELR at 20711.

60. Alcan-Butler, 964 F.2d at 269, 22 ELR at 21133-34.

61. RESTATEMENT (1979), supra note 14, § 433B, comment d.

62. See Alcan-Butler, 964 F.2d at 270, 22 ELR at 21134; Alcan-New York, 990 F.2d at 722-23, 23 ELR at 20711-12.

63. Alcan-New York, 990 F.2d at 722, 23 ELR at 20711.

64. The risk assessment process may be particularly important in this regard, as this is often the means by which EPA establishes such thresholds. The identification of applicable and relevant and appropriate standards (ARARs) will also be of considerable importance. See Amoco Oil Co. v. Borden, Inc., 889 F.2d 664, 20 ELR 20281 (5th Cir. 1989).

65. For example, the overall concentration of a metal in a waste may range from 5 to 50 parts pers million (ppm), with the average being 15 ppm. The concentration of that metal in background soils may range from 15 to 35 ppm, with the average being 25 ppm. On average, the level of that metal in the waste is below background. However, the level in any one sample of waste may exceed the average background soil concentration and may even exceed the highest background soils level.

66. See RESTATEMENT (1979), supra note 14, § 433A.

67. In many circumstances, the waste will either be mobile or will have the capacity to be mobilized. In circumstances in which a defendant's divisibility argument might be jeopardized by further migration of its waste, the defendant may want to take steps to ensure prompt remedial action, so that its waste does not impact another medium.

68. The course of the administrative process may affect the likelihood of prevailing with this argument. If there is a separate investigation and remediation of PCB-contaminated soils, the defendant's argument is more likely to succeed than if the investigation and remediation covers all soils, or the entire site. In the latter cases, the generator might argue for a formula under which its share of total soils investigation and remediation is the ratio of the volume of PCB-contaminated soils to total contaminated soils. This argument might be less persuasive if the cleanup of the PCB-contaminated soil is more expensive than cleanup of soils contaminated by other substances.

69. CERCLA § 101(23), 42 U.S.C. § 9601(23), ELR STAT. CERCLA 008-009.

70. CERCLA § 101(24), 42 U.S.C. § 9601(24), ELR STAT. CERCLA 009.