The Plaintiff's Burden in CERCLA Contribution Actions: Unscrambling the First Circuit's Acushnet Decision

John M. Hyson¹

In Acushnet Co. v. Mohasco Corp.,² the U.S. Court of Appeals for the First Circuit affirmed a district court's action in granting summary judgment to defendants on their Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) contribution claims without first conducting a full "equitable allocation" hearing. In its opinion, the First Circuit rejected the "causation" basis for the district court's ruling but nevertheless affirmed the district court's ruling because "the record was insufficient to permit a meaningful equitable allocation of remediation costs against any of these defendants under § 9613(f)."³

The issue in Acushnet is important. Those who undertake the cleanup of hazardous substances (whether voluntarily or involuntarily) often must incur enormous, multimillion dollar response costs. Not surprisingly, those who incur such costs are eager to obtain at least partial reimbursement of their costs by means of contribution claims under CERCLA § 113(f)(1). But the cost of litigating such claims is substantial because a district court may allocate a portion of the plaintiff's response costs to a defendant only if such allocation is justified by "such equitable factors as the court determines are appropriate." A full equitable allocation hearing thus requires: (1) the presentation of arguments as to the equitable factors that are appropriate, (2) the presentation of evidence regarding each of the appropriate factors that are determined to be appropriate, and (3) the evaluation and weighing of these factors by the court.⁴ All of this is needed in order for a court to determine a defendant's "equitable share" of the plaintiff's response costs. And all of this takes time and money.⁵

The high transaction costs involved in fully litigating contribution claims present a number of practical consequences. If there is no method by which defendants can avoid the high costs of an equitable allocation hearing, they will have a strong incentive to make settlement offers to the plaintiff.⁶ Similarly, plaintiffs will be inclined to assert such claims even when they believe that any ultimate judicial allocation to a particular defendant would be small because defendants, in order to avoid the high transaction costs of litigation, would rationally offer to settle for an amount that is less than the transaction costs (even if such amount would be higher than any expected judicial allocation after a full allocation hearing).

And it is not just defendants who wish to avoid the high costs of equitable allocation hearings. Courts are also eager to avoid such burdens⁷ by encouraging negotiation and mediation and by seeking to resolve such claims through dispositive motions, such as motions for summary judgment.

But when is it appropriate for a district court to grant summary judgment to a defendant in a contribution claim? The answer to this question requires an understanding of: [31 ELR 10181] (1) the elements of a plaintiff's contribution claim (i.e. what the plaintiff must prove in order for a defendant to be liable in a contribution action), (2) the equitable factors that a court may consider in imposing a portion of the plaintiff's response costs on a defendant, and (3) when it can be said that the plaintiff's evidence with respect to such elements of liability or such equitable factors is insufficient and thus warrants the allowance of summary judgment to a defendant because there is no genuine issue of material fact.

The First Circuit was faced with these questions in Acushnet.⁸ However, the court's opinion is deficient in two significant respects. First, though the court's opinion rejects the "causation" basis for the district court's award of judgment to the defendants, the court fails to address the precise causation analysis of the district court, mixes together a number of distinct causation questions that are presented in CERCLA litigation, and, as a result, muddles rather than clarifies the extent to which proof of causation is an element of a plaintiff's contribution claim. Second, though the court states that it is affirming the district court's action in granting judgment for the defendants because of the insufficiency of the record "to permit a meaningful equitable allocation" of the plaintiff's response costs to the defendants, the court fails to explain what it means by a "meaningful allocation," fails to explain on a principled basis why the record is insufficient, and, perhaps most significantly, fails to address the creative "threshold of significance" standard underlying the district court's ruling. In short, rather than clarifying the nature of a plaintiff's burden of proof in a CERCLA contribution action, the First Circuit's opinion creates uncertainty and confusion.

This Article begins with a description of the district court's reasoning in granting summary judgment and judgment as a matter of law to the defendants in the Acushnet litigation. The Article then describes the arguments presented in the parties' briefs to the First Circuit, and the reasoning in the First Circuit's opinion is summarized. Next, the Article looks at the inadequacies of the First Circuit's consideration of the "causation" basis for the district court's granting of judgment to the defendants. The Article then discusses the First Circuit's reasoning in support of its conclusion that the evidence presented by the plaintiff was insufficient "to permit a meaningful allocation" of the plaintiff's response costs to the defendants. In particular, the Article examines the First Circuit's failure to address the innovative reasoning of the district court. Finally, the Article addresses the basic question presented—the nature of a plaintiff's burden of proof in a CERCLA contribution action. Specifically, the Article examines when a court in such an action may properly grant summary judgment to a defendant.

The Acushnet Litigation—the Rulings of the District Court

The Acushnet case involved contribution claims by potentially responsible parties (PRPs) who had cleaned up a site pursuant to a consent decree.⁹ These PRPs—the Sullivan's Ledge Group (SLG)—sought to recover part of their cleanup costs against various entities who were alleged to be liable parties under CERCLA. With one exception, the defendant PRPs had not been identified as PRPs by the U.S. Environmental Protection Agency (EPA)¹⁰; with that same one exception, the defendant PRPs were responsible for very small amounts of hazardous substances at the contaminated site. The district court rejected the SLG's contribution claims against certain of the defendants, granting summary judgment to one defendant, and judgment as a matter of law to three others.

The District Court's Reasoning in Granting Summary Judgment to NETT

In granting summary judgment to one defendant, the New England Telephone & Telegraph Company (NETT), the district court stated that summary judgment was warranted because NETT had proffered "uncontradicted expert testimony asserting that NETT did not and, in fact, could not have caused the Plaintiffs to incur any 'response costs.'"¹¹ The district court thus concluded, as a matter of law, that a plaintiff can not recover against a defendant on a CERCLA contribution claim if it is undisputed that the defendant did not cause the plaintiff to incur response costs.

SLG's contribution claim against NETT was grounded on its assertion that NETT had disposed of utility pole "butts" at the Sullivan's Ledge site. These butts had been coated with creosote, a liquid wood preservative that contains polycyclic aromatic hydrocarbons (PAHs), a listed "hazardous substance" under CERCLA. Tests at the site confirmed that some of the soil was contaminated with high levels of PAHs. However, the district court stated that "the majority of the contamination that has migrated from the former quarry [where the disposal took place] to neighboring properties and adjacent water courses consists of polychlorinated biphenyls (PCBs)."¹² The creosote in NETT's pole butts did not contain PCBs and the PAH contamination [31 ELR 10182] at the site was limited to the quarry itself; there was no PAH contamination on neighboring properties. This led the court to conclude that "the pollution at issue in this motion is limited to PAH contamination in the soil within the former quarry, itself."¹³

NETT offered expert evidence in support of its motion for summary judgment. The expert "testified that PAHs in used creosote-treated utility pole butts could not have leached into the surrounding soil to create a level of PAHS in the soil greater than the pre-existing background levels of PAHs already in the soil."¹⁴ Based on this evidence, NETT asserted that "the elevated levels of PAHs in the soil at the Site must have been caused by waste other than utility pole butts."¹⁵ Thus, according to NETT, the butts "could not have contributed to any response costs incurred by the Plaintiffs."¹⁶

The district court recognized that it could not apply the standard for summary judgment—whether the materials presented by the parties "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law"¹⁷—without first deciding the legal standards that govern CERCLA contribution claims.¹⁸ In particular, the court was required to address NETT's argument that a plaintiff in a CERCLA contribution action must prove that its response costs were caused (at least in part) by a defendant. In addressing this question, the district court considered the text of § 107 (CERCLA's liability provision), the structure of § 107, the legislative history of CERCLA, judicial decisions interpreting CERCLA, and "common-law precedents."

With respect to the text of § 107(a), the court first considered SLG's contention that "causation is irrelevant in this case because '[a] causation requirement is not included within the plain language of section 107.'"¹⁹ The court asserted that "silence of a statute on a particular matter is not conclusive as to the meaning of a statute in relation to that matter"²⁰ and that, in this case, "one can reasonably say no more than that the asserted silence is ambiguous, and for that reason, it is not alone conclusive against (sic) Plaintiffs' argument that no causation need be proved under CERCLA."²¹ Furthermore, the court rejected SLG's argument that § 107(a) was silent with respect to causation, pointing out that the text "limits liability to response costs that are caused by a release or a threatened release."²² The court also relied on Dedham Water Co. v. Cumberland Farms Dairy, Inc. (Dedham II),²³ in which the First Circuit "affirmed summary judgment awarded to a defendant when the plaintiff was unable to prove that his response costs were caused by a release or a threatened release by the defendant."²⁴

Next, the district court rejected an argument by SLG that was grounded on the "structure of § 107"—in particular, the provisions of § 107(b) that afford a defense to those "otherwise liable" if they can prove that "the release or threat of release of a hazardous substance and the damages resulting therefrom were caused solely by" an "act of God," "an act of war," or "an act or omission of a third party."²⁵ SLG had relied on a Second Circuit decision—New York v. Shore Realty Corp.²⁶—in which the court had stated that "interpreting section [107(a)] as including a causation requirement makes superfluous the affirmative defenses provided in section [107(b)], each of which carves out from liability an exception based upon causation."²⁷ In other words, the Second Circuit concluded that, since § 107(b) provides that a defendant [31 ELR 10183] may avoid liability by proof that it did not cause the release (and resulting response costs), it would seem to follow that a plaintiff seeking to recover such response costs is not required to prove that a defendant did cause the release. The district court in Acushnet asserted that "the relationship between § 107(a) and § 107(b) is sufficiently complex that § 107(b) need not necessarily be interpreted as impliedly negating the inference that § 107(a) imposes a restriction on scope of the prima facie case."²⁸ According to the district court, § 107(b) simply provided an opportunity for a defendant to limit the scope of liability imposed by § 107(a).²⁹

The district court also rejected SLG's argument based on "legislative history"—in particular, Congress' rejection of proposed language that would have clearly required a plaintiff to prove that a defendant's actions had caused the release (and resulting response costs). According to the district court, SLG had "proffered no documentary support for [its] assertion that Congress, by not including a specific phrase [requiring a plaintiff to prove that defendant's action caused a release] … in the enacted CERCLA, manifested a total rejection of any limitation on the scope of strict liability."³⁰

The district court rejected SLG's argument that its position—that it was not required to prove that a contribution defendant had caused it to incur response costs—was supported by judicial decisions.³¹ As will be more fully discussed below,³² the district court, in discussing various judicial decisions, failed to recognize that the issues presented in those cases differed from the causation issue presented by NETT's motion for summary judgment.

Finally, the district court addressed SLG's argument that "their position is supported in common-law developments."³³ According to the court, "strict liability [under the common law] is not …, and never has been, 'liability without causation.'"³⁴

In summary, the district court, having concluded that SLG, as a plaintiff in a CERCLA contribution action, was required to prove that a defendant's actions caused SLG's response costs, granted summary judgment to NETT because NETT had supported its motion with evidence (the expert testimony previously described) that showed that there was no dispute that PAHs from NETT's pole butts did not cause the response costs incurred by SLG.

The District Court's Reasoning in Granting Judgment as a Matter of Law to AFC, Mohasco, and Ottaway

The district court granted judgment as a matter of law to three other defendants³⁵ at the conclusion of the plaintiffs' case-in-chief.³⁶ The court's ruling rested on "two independent grounds." The second ground was the same as that which was the basis for the district court's award of summary judgment to NETT: the failure of SLG to prove that any of the three defendants caused SLG's response costs.³⁷ The first ground was set forth in what the district court called "An Unfinished Set of Keys to Comprehending Contribution Actions."³⁸

The court began by acknowledging the difficulty in understanding the circumstances under which judgment as a matter of law is appropriate when the governing legal standard for the award of relief is as open-ended as the "equitable factors" standard of § 113(f)(1):

Even though a legal test fashioned consistently with statutory and decisional guidelines may be in some respects an elements test that prescribes bright-line objective criteria of historical fact that must be satisfied, at least one part of the test (one "element") will require of the court … an evaluative weighing of multiple factors to determine whether the inference may and should be drawn that the plaintiffs have satisfied the "equitable factors" requirement.³⁹

What is tricky, in other words, in considering a motion for judgment as a matter of law (or motion for summary judgment) in a CERCLA contribution action is that the applicable legal standard for the award of relief is not, like most legal standards, a statement of bright-line elements that must be proved by the plaintiff. Rather, the standard is a multifactor test in which the court is to weigh a number of different factors for the purpose of determining whether it is "equitable" to order the defendant to reimburse the plaintiff for a portion of its response costs.

As the district court explained, the "equitable factors" standard "is a statement of law of a very high order of [31 ELR 10184] generality."⁴⁰ And, though it is the responsibility of the courts to flesh out this general standard by developing "more particularized legal tests," the work of the courts in meeting this responsibility is "far from complete."⁴¹ The courts seem to be in agreement, however, in looking to the so-called Gore Factors as a starting point for identifying the appropriate "equitable factors."⁴²

The district court concluded that a plaintiff in a CERCLA contribution action has the burden of satisfying a "threshold requirement" in order to be entitled to contribution from a defendant and that requirement is "equitable" in nature—which the court understood to mean "fair and reasonable."⁴³ The court provided the following general description of this threshold requirement:

The "equitable factors" mandate is appropriately interpreted as at least authorizing, if not mandating for this case, making comparisons between plaintiffs in a contribution action and defendants whom they allege to be potentially responsible parties, by considering evidence before the court … for the purpose of determining whether the nature and extent of their respective ties to the hazards to persons, property, and the environment make it fair and reasonable to order that a defendant, or defendants … reimburse the plaintiffs in some amount or some share of "contribution," allocated on an equitable basis reasoned from evidence concerning all the "equitable factors" for the application of which in this case some evidentiary basis exists.⁴⁴

Such, in other words, is the prima facie case that a plaintiff must present (at trial or in opposing a motion for summary judgment)—a case that demonstrates that it is "fair and reasonable," taking into account all the equitable factors as to which evidence has been presented, to require the defendant to reimburse the plaintiff for a portion of its response costs.

The court then spelled out more precisely the nature of the plaintiff's burden:

Since … the primary relief sought by plaintiffs against each defendant in a contribution action is an order that the defendant pay to plaintiffs an equitably determined share in partial reimbursement, plaintiffs must proffer evidence sufficient to support a finding that hazardous substances traceable to that defendant were (in nature, quantity, and durability) sufficient to invoke an exception [to the] fundamental principle … that courts are to leave harms and losses where they find them.⁴⁵

The court described this burden as proof of a "minimum standard of significance of [a] defendant's responsibility as a source of one or more hazardous substances at the site."⁴⁶ And, in what may be the most important part of its rationale, the court noted the following "corollary" of this "minimum standard of significance" requirement:

Plaintiffs must show reasons for court intervention that outweigh the public interest against recognizing causes of action the enforcement of which exceed the added resources that would be tapped for waste-site remediation. They must make out a prima-facie showing that equitable allocation may occur without placing on the defendant a burden proportionally inequitable to the burden remaining on plaintiffs after collection of contribution. The plaintiffs' assertion that this prima-facie showing has been made must be supported by the evidence before the court at the close of the plaintiffs' case.⁴⁷

The court then provided a more precise explanation of the burden imposed on a contribution plaintiff by this "threshold of significance" requirement:

Plaintiffs must proffer sufficient evidence as to a particular defendant to satisfy a minimum standard of significance of that defendant's responsibility as a source of one or more hazardous substances deposited at the site. Absent such a showing, even the least stringent formulation of a legal test including an "equitable factors" component would require a determination that it is inequitable to put the defendant to the burden of defending itself when the predictable outcome as to the claim for allocation of an equitable share of contribution, in the event of an outcome as favorable to plaintiffs as can be reasoned from evidence, would be a share so small that the public interest in remediation of hazardous waste sites would have been disserved because of the commitment of public and private resources to litigation over that alleged [31 ELR 10185] share of contribution.⁴⁸

As it applied the preceding principles to the evidence before it, the court candidly acknowledged that it could not "finally answer" the question: "What is the law as to a threshold-of-significance standard that plaintiffs must satisfy to defeat a motion for judgment as a matter of law?"⁴⁹ But it emphasized that "one circumstance that weighs heavily in favor of judgment for these defendants concerns the quantity … of hazardous substances deposited and found at the Sullivan's Ledge site."⁵⁰ With respect to American Flexible Conduit (AFC), the court noted that the steel conduit cable that AFC disposed of at the site "would have occupied two cubic yards" and that "that amount of mass is thousands of times less than the remaining contributions of others necessary to fill the enormous quarry pits" at the site.⁵¹ AFC's share of the volume of the waste at the site "was no more than one share in thousands, probably many thousands," and "if we were to use a $ 50,000,000 estimate of response costs potentially involved in plaintiffs' claims for contribution as a basis for comparison, AFC's one share would be a small fraction of the litigation costs of plaintiffs alone in pressing their claim against AFC, even if successful."⁵² But the court stated that "this comparison is only one among many comparisons that would be relevant as factors in any allocation based on 'equitable factors'" and listed as examples "comparisons based on the nature, quantities, toxicities, and durability (or persistence in the environment) of any hazardous substances" at a site.⁵³

Concluding that the evidence presented by SLG did not meet the "minimum standard of significance" as to AFC, Mohasco Corporation (Mohasco), and Ottaway Newspapers, Inc. (Ottaway), the court granted the motions of these defendants for judgment as a matter of law.

The district court's rationale confronts head-on the question that has perplexed courts that are confronted with numerous contribution claims filed by government-targeted PRPs who, in an effort to recoup massive cleanup costs, sue anyone who has had any possible relationship with the contaminated site. The court's answer is simple and direct: a court may grant summary judgment to a defendant where the plaintiff has failed to present evidence that the plaintiff's likely recovery will outweigh the burdens, both public and private, that will be incurred in litigating the plaintiff's contribution claim. As the court explained, when a district court is faced with a defendant's motion for judgment prior to the conclusion of a full allocation hearing, a court is to consider—as one of the § 113(f)(1) "equitable factors"—the public and private cost in proceeding to a full hearing as compared with the likely amount of any ultimate allocation after such a hearing. And, as the court made clear, the plaintiff has the burden of presenting evidence relating to this factor.

It is not clear how a plaintiff is to present evidence that will meet this burden. In Acushnet itself, the court had already conducted 17 days of a hearing on the plaintiff's contribution claims against AFC, Mohasco, and Ottaway. The court therefore had a fairly clear idea of the nature and quality of the waste at the site, the amount of waste attributable to each of the defendants, and the likely duration of a completed hearing on the claims. But how would a district court apply the "threshold-of-significance" standard to a motion for summary judgment?

A contribution defendant who moves for summary judgment must present materials in support of that motion.⁵⁴ Presumably, the defendant could present evidence relating to the total quantity of hazardous substances at the site, the nature of the different types of hazardous substances at the site, the nature and amount of hazardous substances for which the defendant was responsible, and the nature of the contamination that has caused (or will cause) the plaintiff to incur response costs. All of this information should be readily available when the plaintiff is seeking response costs that have been incurred in implementing a remedial action that has been selected after a thorough remedial investigation and feasibility study. But, under the district court's "minimum standard of significance" approach, it is not clear whether the defendant must also submit evidence relating to the expected duration and cost of a full equitable allocation hearing on the plaintiff's claim so that a comparison can be made between the amount of any likely recovery by a contribution plaintiff and the costs of proceeding with a full allocation hearing. Perhaps if a defendant supports a motion for summary judgment with evidence that any likely allocation against it would be small (for example, evidence that the defendant is responsible for a very small quantity of material at the site), this would be sufficient to satisfy the defendant's [31 ELR 10186] "initial responsibility," and the burden of producing evidence with respect to the cost of litigation (in order to withstand the defendant's motion for summary judgment) would shift to the plaintiff.⁵⁵ It is doubtful that either party would be able to present, with any degree of precision, evidence relating to the costs of a full hearing. However, it is not clear that the district court's "minimum standard of significance" test requires precision in comparing the amount of any likely allocation with the costs of an equitable allocation hearing.⁵⁶

Under the district court's "minimum standard of significance" approach, a court, in granting summary judgment to a defendant, is not deciding that, if it were to conduct a full hearing, the defendant's equitable share would be zero. Rather, the court is deciding that the likely amount of any share determined after a hearing would be less than the private and public costs that would be incurred in conducting the hearing. An "equitable factors" analysis undertaken at the conclusion of a full allocation hearing would not include an assessment of the costs of the hearing; but, under the "minimum standard of significance" approach adopted by the district court in Acushnet, an "equitable factors" analysis applied in ruling on a motion for summary judgment includes a comparison of the likely costs of a full hearing as compared with the likely share that would be imposed on a defendant after the hearing. The test applied at both points—on summary judgment and after a full hearing—is, as a general matter, the same "equitable factors" test of § 113(f)(1). But the specific "equitable factors" to be considered differ depending on the time at which the court is undertaking its analysis.

The district court's "minimum standard of significance" approach for evaluating motions for summary judgment in CERCLA contribution claims benefits only those contribution defendants whose relationship to the hazardous substances at the site is so insignificant that the likely share that would be imposed, after a full allocation hearing, would be small in comparison with the costs of the litigation. Where a contribution defendant is responsible for large amounts of hazardous substances at the site, it will be the rare situation in which the defendant will be able to prevail on a motion for summary judgment and thereby avoid the burdens of a full equitable allocation hearing.⁵⁷

The Arguments on Appeal⁵⁸

SLG's principal argument on appeal was quite simple: a plaintiff seeking to recover its response costs is not required to prove that a defendant's actions caused the plaintiff to incur response costs. Rather, all that the plaintiff need prove, as to each defendant, are the elements of liability under § 107(a): (1) that the Sullivan's Ledge site was a "facility"; (2) that there has been a release or threatened release of a hazardous substance from the Sullivan's Ledge site; (3) that such release or threatened release has caused SLG to incur response costs; and (4) that each defendant is a "covered person" under one of the four categories of liability set forth in § 107(a).⁵⁹ SLG's argument was grounded primarily on the text of § 113(f)(1), which provides that "any person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title."⁶⁰ According to SLG, the emphasized language meant that a plaintiff in a contribution action need only prove, as against each contribution defendant, the elements of liability under § 107(a); once the plaintiff had proved these elements of liability, a district court was required to conduct a full equitable allocation hearing in order to determine the amount of each defendant's "equitable share." Thus, according to SLG, the district court erred in granting summary judgment to NETT and judgment as a matter of law to the other three defendants because the district court incorrectly concluded that SLG was required to prove that each defendant's actions caused SLG to incur response costs.⁶¹

The briefs of the defendants set forth a number of distinct arguments.⁶² First, the three defendants who had been [31 ELR 10187] granted judgment as a matter of law argued that SLG had failed, in its brief, to challenge one of the "independent grounds" for the court's ruling—that SLG had failed to present evidence as to each defendant that satisfied the district court's "minimum standard of significance" requirement."⁶³ Accordingly, these defendants argued, SLG had waived any challenge to this independent ground. Alternatively, assuming that SLG had not waived its challenge to this independent ground, these defendants argued, in somewhat varying ways, that the district court properly granted judgment to the defendants because of SLG's failure to satisfy the "minimum standard of significance" that the district court described.

NETT argued that the district court, in granting its motion for summary judgment, had correctly concluded that a plaintiff in a contribution action is required to prove that a defendant's actions had caused the plaintiff to incur response costs. NETT asserted that the district court had properly based this conclusion on the First Circuit's earlier decision in Dedham Water Co. v. Cumberland Farms Dairy, Inc. (Dedham I).⁶⁴ Alternatively, NETT relied on Second and Third Circuit decisions that held that a defendant could avoid liability for any response costs incurred by a plaintiff if it could prove that its actions did not cause the release that was the basis for the plaintiff's response costs.⁶⁵ In other words, NETT argued alternatively that (1) a plaintiff in a contribution action had the burden of proving that a defendant caused the plaintiff to incur response costs, and (2) even if a plaintiff did not have such a burden of proof, a defendant could avoid liability by proving that its actions did not cause the plaintiff to incur response costs. Either way, NETT argued that the district court properly granted summary judgment to NETT because, on the record before the court, there was no genuine issue as to whether NETT had caused SLG's response costs (i.e., it was undisputed that NETT had not caused such costs).

SLG spent much of its reply brief responding to the contention that, in its original brief, it had failed to challenge one of the independent grounds for the district court's ruling in granting judgment as a matter of law to AFC, Mohasco, and Ottaway. SLG argued that this alternative ground—the failure of SLG to meet the "threshold of significance" described by the district court—"is nothing more than the resurrection of 'causation' by another name."⁶⁶ In other words, as SLG saw it, both grounds stated by the district court in support of its ruling in granting judgment as a matter of law to the three defendants included (incorrectly) a requirement that a plaintiff in a contribution action must prove that a defendant caused the plaintiff to incur response costs.

Thus, the issues as argued in the briefs seemed fairly clear:

(1) Did the district court, in granting summary judgment to NETT and judgment as a matter of law to the other three defendants, properly conclude that a plaintiff in a contribution action was required to prove that each defendant had caused the plaintiff to incur response costs? More specifically, were the defendants correct in asserting that this conclusion was supported by the First Circuit's earlier decision in Dedham I?

(2) Even if the district court was incorrect in its conclusion that a plaintiff in a contribution action must prove that each defendant caused the plaintiff to incur response costs, should the rulings of the district court nevertheless be affirmed on the alternative ground that SLG had failed to present evidence of "equitable factors" that would justify the imposition of an equitable share of SLG's response costs on each defendant? More specifically, was the district court correct in concluding that the "equitable factors" test of § 113(f)(1) required that a plaintiff, in order to withstand a motion for judgment as a matter of law, present evidence satisfying a "minimum standard of significance?"

The First Circuit's Opinion—The Court's Confusion Regarding the District Court's Ruling on Causation

The Court's Reasoning in Rejecting the "Causation" Basis for the District Court's Rulings

The First Circuit affirmed the district court's rulings in granting summary judgment to NETT and judgment as a matter of law to the three other defendants. The court, in the introduction of its opinion, summarized its holding as follows:

We affirm, but on somewhat different grounds than the district court. As we understand it, the district court ruled principally that the defendants deposited so little waste at the site that it could not reasonably be said that they caused plaintiffs to incur response costs. To the extent that the court's ruling may be interpreted to incorporate into CERCLA a causation standard that would require a polluter's waste to meet a minimum quantitative threshold, we disagree. Nevertheless, we conclude that the record was insufficient to permit a meaningful equitable allocation of remediation costs against any of the defendants under § 9613(f).⁶⁷

After describing the facts of the case and the proceedings below,⁶⁸ and after explaining the general contours of the "strict liability" scheme of CERCLA,⁶⁹ the court set forth its understanding of SLG's arguments as appellant:

[31 ELR 10188]

[SLG's] arguments on appeal are broad-brushed in nature, focusing almost entirely on the legal meaning of "causation" and CERCLA's underlying policy goals. First, plaintiffs insist that reading any causal element into CERCLA is inconsistent with the principle of strict liability. Second, they contend that doing so would run counter to the remedial purpose of CERCLA because, among other things, it will let smaller polluters off the hook and discourage responsible parties from entering into consent agreements with the government.⁷⁰

With respect to SLG's first argument, the court begins by expressing "strong reservations about interpreting the statute's causation element to require that a defendant be responsible for a minimum quantity of hazardous waste before liability may be imposed."⁷¹ The court states that "the text of the statute does not support such a construction"⁷² and that "our own decisions provide no basis for such an approach."⁷³ The court notes, however, that its rejection of a "minimum quantity" requirement for the imposition of liability "does not mean … that the de minimis polluter must necessarily be held liable for all response costs."⁷⁴ Rather, relying on the Second Circuit's decision in United States v. Alcan Aluminum Corp.,⁷⁵ the court explains how a defendant may limit its liability, or escape liability altogether, by proof of "divisibility"—that is, proof of distinct harms. The court concludes its analysis of CERCLA's "causation element" with the following statement:

We therefore hold that a defendant may avoid joint and several liability for response costs in a contribution action under § 9613(f) if it demonstrates that its share of hazardous waste deposited at the site constitutes no more than background amounts of such substances in the environment and cannot concentrate with other wastes to produce higher amounts. This rule is not based on CERCLA's causation requirement, but is logically derived from § 9613(f)'s express authorization that a court take equity into account when fixing each defendant's fair share of response costs.⁷⁶

The Inadequacies of the First Circuit's Discussion of "Causation"

The most striking inadequacy of the First Circuit's discussion of "causation" is that the court fails to identify and address the precise issue before it—whether a plaintiff in a contribution action is required to prove that a defendant caused the plaintiff to incur response costs. The court states that "as we understand it, the district court ruled principally that the defendants deposited so little waste at the site that it could not reasonably be said that they caused plaintiffs to incur response costs." Although this is a correct statement of the basis for the district court's ruling on NETT's motion for summary judgment and of the alternative basis for the district court's ruling in granting judgment as a matter of law to the other three defendants, the court then mischaracterizes the district court's ruling when it states "that the [district] court's ruling may be interpreted to incorporate into CERCLA a causation standard that would require a polluter's waste to meet a minimum quantitative threshold." At no point did the district court hold that, in order for a defendant to be liable in a CERCLA contribution action, the defendant's (or "polluter's") waste must "meet a minimum quantitative threshold." The First Circuit is certainly correct when it concludes that there is no such requirement. But that conclusion has nothing to do with the issue before the court.⁷⁷

The court's discussion of the "causation" issue fails to recognize that there are several distinct causation questions under CERCLA and that many of the decisions relied on by SLG and the defendants relate to causation issues that are distinct from the causation issue that is before the court. And, because the court fails to focus on the precise issue before it and to distinguish the causation issues addressed in the decisions relied on by the parties, the court's stated "holding" makes no sense.

"Causation" Issues Under CERCLA

Court decisions under CERCLA have identified the following distinct causation issues relating to a defendant's liability for response costs:

Causation issue 1—Must a plaintiff seeking to recover its response costs prove that its response costs were caused by a release (or threatened release) of a hazardous substance?

Causation issue 2—Must a plaintiff seeking to recover its response costs against a particular defendant prove that its response costs were caused by that defendant?

Causation issue 3—Is causation relevant with respect to whether a defendant is jointly and severally liable for a plaintiff's response costs and, if so, how?

Causation issue 4—Is causation one of the "equitable factors" that a court may (or must) consider in determining whether a contribution defendant must reimburse a contribution plaintiff for a share [31 ELR 10189] of the plaintiff's response costs and, if so, how is causation to be considered?

The second and fourth issues were presented in the Acushnet litigation. But the First Circuit's discussion cites and relies on decisions that address the first and third questions without recognizing the distinct nature of these questions—without recognizing, in particular, that these decisions (and their underlying reasoning) are irrelevant to the issues before the court.

The place to begin, in seeking to resolve the various causation questions under CERCLA, is, of course, the text of CERCLA. That text provides clear answers to two of the causation questions—the first and the second—and leaves the others for resolution by the courts.

As the First Circuit recognized,⁷⁸ CERCLA § 107(a) imposes liability on four categories of entities: (1) owners of a facility; (2) past owners at the time of disposal of a hazardous substance; (3) those who arranged for disposal of a hazardous substance at the facility; and (4) those who transported hazardous substances to the facility. In order for any one within these categories to be liable there must be "a release, or threatened release which causes the incurrence of response costs, of a hazardous substance."⁷⁹ If such a release (or threatened release) causes the incurrence of response costs, those who fit within a category of liability are liable for response costs incurred by government entities and "necessary costs of response incurred by any other person."

The First Causation Question—Must a Plaintiff Establish That a Release or Threatened Release Caused the Plaintiff to Incur Response Costs?

Section 107(a) provides a clear answer to the first causation question: in order to recover response costs, a plaintiff (whether a government entity or a private party) must prove that its response costs were caused by a release or threatened release of a hazardous substance. But that question was not before the court in Acushnet. It was undisputed that there had been a release of a hazardous substance and that the release had caused SLG to incur response costs. The question in Acushnet was whether the defendants could be held liable in a contribution claim in the absence of evidence that their actions had caused any of SLG's response costs.

Nevertheless, the First Circuit discusses decisions that consider when it can be said that a release has caused the incurrence of response costs. These decisions are of two types—one represented by the Fifth Circuit's decisions in Amoco Oil Co. v. Borden, Inc.⁸⁰ and Licciardi v. Murphy Oil U.S.A., Inc.,⁸¹ and the other by the First Circuit's own opinion in Dedham I.⁸² In Amoco and Licciardi, the Fifth Circuit held that a plaintiff must establish that a release poses "a threat to the public health or the environment" before it can be said that the release has caused the incurrence of response costs.⁸³ In Dedham I, the question was whether certain costs incurred at one site had been caused by a release (or threat of release) at another site.

Neither of these decisions is relevant to the situation in Acushnet. SLG's cleanup costs were incurred at a site where there was admittedly a release (and thus there was not the two-site problem of causation involved in Dedham I),⁸⁴ and there was no question that the release at the Sullivan's Ledge site was sufficiently severe to justify—that is, "cause"—SLG to incur response costs (and thus there was not the issue presented in Amoco and Licciardi).⁸⁵

The Second Causation Question—Must a Plaintiff Seeking to Recover Response Costs Prove That Its Costs Were Caused by a Particular Defendant?

Courts are generally in agreement that the text and structure of CERCLA § 107 make it clear that a plaintiff seeking to recover its response costs is not required to prove that its response costs were caused by a specific defendant. Relying on the text of § 107(a), courts have held that a plaintiff need only prove that its response costs were caused by a release or threatened release of a hazardous substance. Indeed, in order [31 ELR 10190] to establish liability against a specific defendant, a plaintiff is not required to prove that its response costs were caused by a hazardous substance of the type that the defendant sent to the site.⁸⁶

Courts have concluded that this reading of § 107(a) is supported by the structure of § 107—in particular, by the provision of four defenses in § 107(b). A defendant who is "otherwise liable" (i.e., liable under § 107(a)) may avoid liability if it "can establish by a preponderance of the evidence that the release or threat of a release of a hazardous substance and the damages resulting therefrom were caused solely by" an act of God, an act of war, an act of a third party, or any combination of the preceding.⁸⁷ Thus, under § 107, the plaintiff in an action to recover response costs is not required to prove that a defendant caused the plaintiff's response costs; however, the defendant may avoid liability if it can prove lack of such causation (i.e., that the release and the plaintiff's resulting response costs were caused solely by some event other than the defendant's actions).⁸⁸

This liability scheme is contrary to the common law where, even under a strict liability scheme, a plaintiff seeking to recover damages must prove that a defendant's actions (or omissions) caused harm to the plaintiff. Yet courts have generally recognized that the language and structure of § 107, supported by legislative history, clearly reject and override this basic requirement of common-law liability.⁸⁹

Section 107 imposes liability on those who fall within one of the four specified categories of § 107(a) not only for government response costs but also for costs of response incurred by "any other person."⁹⁰ When a private entity seeks to recover its response costs and that entity is itself a PRP (i.e., liable under § 107(a)), its action is an action for contribution—that is, an action under § 113(f)(1).⁹¹ The relationship between § 113(f)(1) and the liability provisions of § 107(a) is made clear by the initial language of § 113(f)(1) that provides that "any person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title."⁹² Thus, a defendant is liable in a contribution action if it is liable under § 107.

As previously explained,⁹³ the First Circuit failed to address the reasoning of the district court. Instead of addressing the causation analysis of the district court, the First Circuit focused on an argument of its own creation—whether it should interpret "the statute's causation element to require that a defendant be responsible for a minimum quantity of hazardous waste before liability can be imposed."⁹⁴ This question was not presented by the district court's analysis or by the defendants' arguments in support of the district court's rulings. The district court had supported the entry of judgment for the defendants because SLG had failed to present evidence that any of the defendants had caused SLG to incur response costs.⁹⁵ The district court had not based its rulings on SLG's failure to prove that the defendants were responsible for a minimum quantity of waste.

Section 113(f)(1) imposes contribution liability on any person who is liable under § 107(a). The language and structure of § 107, reinforced by legislative history, support the conclusion that a plaintiff in a contribution action is not [31 ELR 10191] required to prove that a defendant's actions caused the plaintiff's response costs.⁹⁶ The district court in Acushnet was incorrect in concluding to the contrary, and the First Circuit failed to address the district court's conclusion and the district court's reasoning in support of that conclusion.

The Third Causation Question—Is Causation Relevant With Respect to Whether a Defendant Is Jointly and Severally Liable for a Plaintiff's Response Costs and, if so, How?

The question of joint and several liability under CERCLA—and the relevance of causation in determining such joint and several liability—was not before the First Circuit in Acushnet. The question of joint and several liability arises in government actions to recover response costs. SLG's action was a contribution action in which SLG sought a determination that each defendant was required to reimburse SLG for a portion of its privately incurred response costs. A defendant's liability in such a contribution action is several, not joint and several.⁹⁷ SLG had not contended that the defendants were jointly and severally liable; SLG recognized that the extent of each defendant's liability was to be determined in accordance with the standard set forth in § 113(f)(1)—"such equitable factors as the court determines are appropriate."

Nevertheless, the defendants, in seeking the entry of judgment in SLG's contribution action, relied on decisions in which courts had dealt with the relevance of causation in determining joint and several liability in government cost recovery actions.⁹⁸ And, SLG, in opposing the defendants' motions for entry of judgment, had relied on statements made by the First Circuit in O'Neil v. Picillo,⁹⁹ a government cost recovery action in which the court considered the question of joint and several liability.

The First Circuit in Acushnet should have recognized that the discussion of the relevance of causation to joint and several liability was simply distinct from, and irrelevant to, the precise causation issue before it—whether a plaintiff in a CERCLA contribution claim must prove that a defendant's actions caused the plaintiff to incur response costs. Because it failed to recognize this distinction, much of the court's discussion of joint and several liability is irrelevant and its express "holding" makes no sense.

[] Basic Principles of Joint and Several Liability Under CERCLA.¹⁰⁰ The text of CERCLA provides no guidance with respect to the third causation question identified—the relevance of causation to the question of whether a defendant is jointly and severally liable for the response costs incurred by a plaintiff. The courts are in agreement that Congress, though rejecting the express statutory imposition joint and several liability, intended to leave to the federal courts the task of developing a federal common law of joint and several liability in government cost recovery actions.¹⁰¹ In developing such a federal common law, the courts have looked primarily to the Restatement of Torts (Second). However, the courts have recognized that in their freedom to develop a federal common law, they are not required to follow all of the principles set forth in the restatement.

In O'Neil,¹⁰² the First Circuit rejected defendants' argument that in order for a defendant to be jointly and severally liable for a government entity's response costs, it is necessary for the government to prove that the defendant was a "'substantial' cause of the harm." The court stated that even if the Restatement of Torts imposed such a requirement for joint and several liability (which the court questioned), the imposition of such a burden on a government entity would be inconsistent with "Congress' concern that cleanup efforts not be held hostage to the time-consuming and almost impossible task of tracing all the waste found at a dump [31 ELR 10192] site."¹⁰³

The courts (including the First Circuit in O'Neil) have held, however, that a defendant in a government cost recovery action can avoid joint and several liability if it can establish "divisibility" in accordance with the provisions of § 433A of the restatement. Section 433A(1) provides:

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.

And Restatement of Torts § 433B is clear in imposing the burden of proving apportionment (i.e., the burden of proving "divisibility" and thereby avoiding joint and several liability) on the defendant.

So it is federal common law, developed in accordance with congressional intent, that has provided an answer to the third causation question identified—the question of whether causation is relevant in determining a defendant's joint and several liability under CERCLA. This case law provides that in a government cost recovery action, the government-plaintiff is not required to prove that a defendant caused the "harm" (i.e., the release of hazardous substances and the resulting response costs) in order for the defendant to be jointly and severally liable. Rather, the burden of avoiding joint and several liability is on the defendant who can satisfy that burden (i.e., the burden of proving "divisibility") only by proof of distinct harms or by proof of a reasonable basis for determining the contribution of each cause to a single harm. And the courts—in particular, the Second and Third Circuits in their Alcan decisions¹⁰⁴—have stated that the divisibility defense under § 433A of the Restatement of Torts would permit a defendant, under certain circumstances, to avoid any liability for a government's response costs if it could prove that it did not cause the harm that is the basis for the government's response costs.

[] The First Circuit's Treatment of Joint and Several Liability in Acushnet. In its brief in support of the district court's allowance of its motion for summary judgment, NETT relied on the Second Circuit's Alcan decision as support for the proposition that a contribution defendant is not subject to liability if it can prove that it did not cause the plaintiff's response costs.¹⁰⁵ And, in its brief, SLG countered this argument by relying on the First Circuit's decision in O'Neil.¹⁰⁶

As previously stated, the First Circuit should have recognized that the joint and several liability decisions were not relevant to the issue before it. A PRP is subject to joint and several liability only when a government entity seeks to recover its response costs. In Acushnet, a private entity SLG was seeking to recover its response costs, and the private entity was itself a responsible party under § 107. In such a situation, the extent of the defendant's liability is governed by § 113(f)(1). The liability of a defendant is limited to its equitable share of the plaintiff's response costs.¹⁰⁷ Since the liability of the defendants in Acushnet was not joint and several, the statements in the Alcan decisions relied on by NETT—as to when a defendant can avoid joint and several liability in a government cost recovery action—are irrelevant [31 ELR 10193] to the Acushnet litigation. Similarly, the statements in O'Neil relied on by SLG—whether a government plaintiff must prove that a defendant was a "substantial cause" of the government's response costs in order for the defendant to be jointly and severally liable—are irrelevant to the Acushnet litigation.

Nevertheless, the First Circuit in Acushnet discusses the federal common law of joint and several liability, including the availability of a divisibility defense. After rejecting the argument that a plaintiff seeking to recover its response costs must prove that a defendant is responsible for a "minimum quantity of waste," an argument that defendants did not make and the district court did not adopt,¹⁰⁸ the court states that "this does not mean the de minimis polluter must be held liable for all response costs."¹⁰⁹ The court then expresses agreement with the joint and several liability and divisibility analysis of the Second Circuit in Alcan.¹¹⁰ This leads the court to "hold" that "a defendant may avoid joint and several liability for response costs in a contribution action under § 9613(f) if it demonstrates that its share of hazardous waste deposited at the site constitutes no more than background amounts of such substances in the environment and cannot concentrate with other wastes to produce higher amounts."¹¹¹ The court then states that "this rule is not based on CERCLA's causation requirement, but is logically derived from § 9613(f)'s express authorization that a court take equity into account when fixing each defendant's fair share of response costs."¹¹² And the court, by way of footnote, adds the following:

Because contribution may only be had from a joint tortfeasor, a defendant in a contribution action arguably would have two bites at the apple: he could try to show that (a) the harm is divisible (a function of the causation inquiry) and that he is thus liable only for his share of the damage; and (b) even though he may be a joint tortfeasor, he ought not bear full liability due to one or more equitable reasons. It may or may not make sense to allow a divisibility of harm defense in a § 9613(f) action, see e.g., Redwing Carriers, Inc. v. Saraland Apartments, 94 F.3d 1489, 1513-14 [27 ELR 20028] (11th Cir. 1996) (holding that divisibility of harm is not available as a defense in contribution actions), even though many of the same considerations would come into play under the rubric of equity.¹¹³

The most basic problem with the preceding statement has already been stated: the common law of joint and several liability, including the availability of a defense of divisibility, is totally irrelevant in an action such as Acushnet where the plaintiff is seeking contribution. A defendant's liability in such an action is several, not joint and several. Therefore, it does not "make sense," as the Eleventh Circuit recognized in Redwing Carriers, Inc. v. Saraland Apartments, Ltd.,¹¹⁴ to allow a divisibility defense in a § 9613(f) action. And, therefore, the First Circuit's "holding" as to when a defendant may "avoid joint and several liability … in a contribution action under § 9613(f)" also makes no sense.¹¹⁵

The First Circuit is also incorrect in stating that "this rule"—the rule as to when a defendant may avoid joint and several liability—is "logically derived from § 9613(f)'s express authorization that a court take equity into account when fixing each defendant's fair share of response costs."¹¹⁶ The law of joint and several liability, including the divisibility defense, has nothing to do with § 113(f). That law is, as previously explained, a product of federal common law.¹¹⁷

In sum, the First Circuit's comments about joint and several liability are not relevant to the issue before it and its explanation of when a divisibility defense is available to a defendant in a contribution action makes no sense. However, the court is persuasive to the extent that it suggests that, in a contribution action, a district court may consider "under the rubric of equity" whether a plaintiff's response costs were caused by a particular defendant. But that question is distinct from the question of joint and several liability (including the availability of a divisibility defense). It is the [31 ELR 10194] fourth causation question that I have identified and to which I now turn.

The Fourth Causation Question—Is Causation One of the "Equitable Factors" That a Court May (or Must) Consider in Determining Whether a Contribution Defendant Must Reimburse a Contribution Plaintiff for a Share of the Plaintiff's Response Costs and, if so, Does the Absence of Evidence of Causation Justify the Entry of Judgment for a Defendant?

The First Circuit in Acushnet affirmed the district court's rulings in granting summary judgment to NETT and judgment as a matter of law to the other three defendants because, even though it rejected the district court's ruling "to the extent that the court's ruling may be interpreted to incorporate into CERCLA a causation standard that would require a polluter's waste to meet a minimum quantitative threshold,"¹¹⁸ the court nevertheless concluded that "the record was insufficient to permit a meaningful equitable allocation of remediation costs against any of these defendants under § 9613(f)."¹¹⁹ The court's brief explanation as to why the record was insufficient does not deal directly with the fourth causation question—whether causation is one of the "equitable factors" that a court may consider in determining whether a contribution defendant must reimburse a contribution plaintiff for a portion of the plaintiff's response costs.

On appeal, SLG argued that the first sentence of § 113(f)(1) made it clear that a plaintiff in a contribution action is required only to prove that a defendant is liable under § 107; the plaintiff is not required to prove that a defendant's actions caused the plaintiff's response costs.¹²⁰ Further, SLG argued that once it had demonstrated the defendants' liability under § 107, the district court was obligated to conduct a full "allocation hearing" in which it determined the appropriate equitable factors and an allocation based on such factors.¹²¹

SLG's argument failed to take into account the two provisions in § 113(f)(1) that limit a court's ability to order a contribution defendant to reimburse a plaintiff for a portion of its response costs. Under the first sentence of § 113(f)(1), a contribution plaintiff has the burden of proving that a defendant is liable under § 107(a). It is clear, for reasons previously stated, that the elements of liability set forth in § 107(a) do not include a requirement that a plaintiff prove that a defendant caused the plaintiff's response costs.¹²² But § 113(f)(1) also provides that "in resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate." The court may allocate response costs only when there is evidence of "equitable factors" that support the allocation of a portion of the plaintiff's response costs to a defendant. If the plaintiff fails to present evidence of "equitable factors" that justify an allocation of a portion of plaintiff's response costs to a defendant, the defendant is entitled to judgment—not because the defendant is not a liable party, but because the plaintiff has not presented sufficient evidence to support a finding that it is entitled to relief.

Though proof of causation (i.e. proof that a defendant caused the plaintiff to incur response costs) is not required to satisfy the first component of § 113(f)(1)—that is, to demonstrate that a defendant is liable under § 107(a)—the question is whether such proof constitutes an "equitable factor" that is "appropriate" for a court's consideration in determining whether to allocate part of a plaintiff's response costs to a defendant. The answer to this question seems quite obvious: a court faced with a contribution claim may consider any "equitable factor" that it determines to be "appropriate." This broad grant of discretion encourages district courts to introduce fairness or equity considerations into a statutory scheme that, prior to the allocation of response costs, can be "unfair" in that it imposes liability (and, by virtue of federal common law, presumptive joint and several liability)¹²³ without any requirement that a plaintiff prove that a defendant caused the plaintiff to incur response costs. Contribution claims provide a fairness safety valve for the arguably unfair statutory liability scheme.¹²⁴ There is certainly nothing in § 113(f)(1)—or the overall structure of CERCLA—that precludes a district court from considering causation in a contribution claim.¹²⁵

Even if it is clear that a court may consider evidence of causation in a contribution action, it is less clear whether a court must consider evidence of causation (if offered by a [31 ELR 10195] plaintiff), or lack of causation (if offered by a defendant). Although the language of § 113(f)(1) leaves to the court's discretion a determination of the equitable factors that are "appropriate" for consideration, it would seem that evidence relating to causation would always be relevant to whether it is equitable (or fair) to allocate part of plaintiff's response costs to a defendant, and, thus, it would be an abuse of discretion for a court to exclude such evidence if offered by one of the parties.¹²⁶

If evidence of causation clearly may be considered, and arguably always must be considered (when offered by one of the parties), the next question is whether a court may ever properly determine that causation is a determining factor. Presumably, there are circumstances in which a court could reasonably decide that, since the undisputed facts demonstrate that a defendant did not cause the plaintiff to incur any response costs, it would be inequitable to allocate any of the plaintiff's response costs to that defendant. Such a decision would certainly be reasonable if, for example, no evidence was presented with respect to any other factor.¹²⁷

In light of the preceding analysis, the district court in Acushnet might have granted summary judgment for NETT based on the following reasoning. The court might have determined that causation (i.e., evidence as to whether NETT's actions caused SLG's response costs) was an appropriate equitable factor for the district court to consider in deciding whether to order NETT to reimburse SLG for a portion of its response costs. The court might then have noted that NETT's motion for summary judgment was supported by evidence that NETT's disposal of pole butts at the site had not caused SLG to incur response costs.¹²⁸ NETT's motion could be viewed as supported by an argument that the court should determine that causation was a determining (or at least presumptively determining) equitable factor¹²⁹ and that, since NETT had supported its motion with evidence that its activities had not caused SLG to incur response costs, the burden shifted to SLG (under the rules governing summary judgment) to present evidence of "equitable factors" that would support an allocation of a portion of SLG's response costs to NETT.¹³⁰ SLG might have met this burden in either of two ways: (1) by introducing evidence that contradicted NETT's evidence (i.e., evidence that demonstrated that NETT's disposal of pole butts did cause SLG to incur response costs)¹³¹; or (2) by introducing evidence of other appropriate "equitable factors" that would support an allocation of a portion of SLG's response costs to NETT.¹³² But SLG did neither. It simply relied, incorrectly, on the position that its only burden of proof in a CERCLA contribution claim was to establish that NETT was a liable party under § 107. Since SLG did not meet its obligation to oppose NETT's motion for summary judgment with evidence that showed that there was a "genuine issue" as to the "material fact" of whether it would be "equitable" to allocate a portion of SLG's response costs to NETT, the district court could properly grant NETT's motion for summary judgment.

Though the preceding process of reasoning might properly support the granting of summary judgment for a defendant in a contribution action, it is clear that the district court in Acushnet did not rely on the preceding reasoning.¹³³ And, as I will seek to explain in the next part, this reasoning also did not underlie the First Circuit's affirmance of the district court's rulings.

[31 ELR 10196]

The First Circuit's Affirmance of the District Court's Rulings in Granting Judgment for the Contribution Defendants Under the Equitable Factors Principle of Allocation

As explained above, the First Circuit purported to reject the "causation" rationale that underlay the district court's allowance of NETT's motion for summary judgment and that provided an alternative rationale in support of the district court's allowance of the motions for judgment as a matter of law by AFC, Mohasco, and Ottaway.¹³⁴ Nevertheless, the court affirmed the district court's rulings in granting summary judgment to NETT and judgment as a matter of law to AFC, Mohasco, and Ottaway. With respect to NETT's motion for summary judgment, the First Circuit stated that "a finding of no liability on the part of NETT is … justified under the principle of equitable allocation under § 9613(f)."¹³⁵ As to all of the defendants, the court stated that "the record was insufficient to permit a meaningful allocation of remediation costs against any of these defendants under § 9613(f)."¹³⁶

As we have seen, the district court's decision in granting judgment as a matter of law to AFC, Mohasco, and Ottaway was grounded on reasoning that was creative and original.¹³⁷ The district court concluded that the "equitable factors" standard of § 113(f)(1) authorized a district court to order a defendant to pay a portion of a plaintiff's response costs only when such an order would be "fair and reasonable." This reading of the "equitable factors" standard lead the district court to conclude that, when faced with a motion for judgment as a matter of law, a district court should look to see whether a plaintiff's evidence met a "minimum standard of significance"—in particular, whether the plaintiff had presented evidence that the likely allocation to a defendant, after a full allocation hearing, would exceed the public and private costs of the hearing itself.

In relying on the "equitable factors" standard in § 113(f)(1) to affirm the district court's rulings, the First Circuit apparently agreed with the district court that a defendant is entitled to judgment in a contribution action when the plaintiff has not presented evidence of "equitable factors" that is sufficient to justify an order requiring the defendant to reimburse a plaintiff for a portion of its response costs. However, the First Circuit's reasoning in support of affirmance fails to discuss (much less support) the district court's derivation of a "minimum standard of significance" test from the "equitable factors" standard of § 113(f)(1). And the First Circuit's reasoning fails to set forth a clear and adequate explanation of why an "equitable factors" analysis supported the granting of judgment to the defendants in the Acushnet case.

The First Circuit's Reasoning in Affirming the Granting of Judgment as a Matter of Law to the Defendants

The First Circuit begins its discussion of the "equitable factors" basis for affirming the district court's rulings by noting that its rejection of a "minimum quantity" requirement for the imposition of liability (i.e., the court's rejection of the district courts "causation" basis for its ruling) "does not mean … that the de minimis polluter must necessarily be held liable for all response costs."¹³⁸ Rather, the court states the following "holding":

We therefore hold that a defendant may avoid joint and several liability for response costs in a contribution action under § 9613(f) if it demonstrates that its share of hazardous waste deposited at the site constitutes no more than background amounts of such substances in the environment and cannot concentrate with other wastes to produce higher amounts. This rule is not based on CERCLA's causation requirement, but is logically derived from § 9613(f)'s express authorization that a court take equity into account when fixing each defendant's fair share of response costs.¹³⁹

The court then sets forth "several reasons why, after all is said and done, an otherwise responsible party may be liable for only a fraction of the total response costs or escape liability altogether."¹⁴⁰ First, "§ 9613(f) expressly contemplates that courts will take equity into account in resolving contribution claims."¹⁴¹ Second, "there is nothing to suggest that Congress intended to impose far-reaching liability on every party who is responsible for only trace levels of waste."¹⁴² And third, "allowing a CERCLA defendant to prevail on issues of fair apportionment, even at the summary judgment stage, is consistent with Congress' intent that joint and several liability not be imposed mechanically in all cases."¹⁴³ More specifically, the court states that "to require an inconsequential polluter to litigate until the bitter end … [31 ELR 10197] would run counter to Congress' mandate that CERCLA actions be resolved as fairly and efficiently as possible."¹⁴⁴

Having dealt generally with SLG's argument, the court then addressed the district court's specific rulings, focusing first on the district court's granting of summary judgment to NETT.¹⁴⁵ The court describes how NETT supported its motion for summary judgment "with extensive expert evidence to the effect that the concentration of PAHs from NETT telephone poles … was negligible."¹⁴⁶ The court then affirms the district court's allowance of summary judgment to NETT with the following reasoning:

We have already rejected the district court's reasoning inasmuch as it may have been rooted in a theory of causation that required some quantitative threshold. But even if NETT may be said to have caused plaintiffs to incur response costs, plaintiffs failed to rebut NETT's evidence showing that it should bear no more than a de minimis share of the remediation expenditures under § 9613(f). NETT essentially offered evidence tending to prove that its equitable share would amount to zero; plaintiffs gave only a non-responsive rejoinder, mostly by insisting (wrongly) that causation is irrelevant.¹⁴⁷

The court then turns to the district court's ruling granting judgment as a matter of law to the other three defendants.¹⁴⁸ The court upholds the district court's ruling with the following reasoning:

We affirm the judgment on the basis that the evidence was inadequate to permit a rational factfinder to make a quantifiable allocation of response costs to AFC, Mohasco, or Ottaway under § 9613(f)….

While no precise allocations were made in this case, a trial court's perspective is nevertheless instructive as to the equitable considerations most relevant to the task at hand. Here, the court found the respective quantities of hazardous materials attributable to each defendant, the toxicity of the respective wastes, and their durability to be highly relevant to fixing an equitable share. Within this general framework, the court assessed the Sullivan's Ledge Group's evidence and found it inadequate. We agree.¹⁴⁹

The Inadequacy of the First Circuit's Reasoning

The First Circuit's Misunderstanding of the "Equitable Factors" Basis for the District Court's Ruling in Granting Judgment as a Matter of Law

The First Circuit misunderstood the "equitable factors" basis for the district court's ruling in granting judgment as a matter of law to AFC, Mohasco, and Ottaway. The district court did not conclude that "the evidence was inadequate to permit a rational factfinder to make a quantifiable allocation of response costs to AFC, Mohasco, and Ottaway." And the "equitable considerations" that the district court took into account were not limited to "the respective quantities of hazardous materials attributable to each defendant, the toxicity of the respective wastes, and their durability." Rather, as we have seen,¹⁵⁰ the district court considered, and relied heavily on, an additional "equitable factor"—the likelihood that the private and public burdensinvolved in a full allocation hearing would exceed the amount of any share (of the plaintiff's response costs) that might be assigned to the defendants at the end of such a hearing. This factor was the basis for the district court's conclusion that a contribution plaintiff has the burden of presenting evidence that meets a "minimum standard of significance"—that is, evidence that demonstrates that the plaintiff's likely recovery, after a full hearing, would exceed the costs of the hearing.

The First Circuit indirectly recognizes this "burden of litigation" factor when it states that "to require an inconsequential polluter to litigate until the bitter end … would run counter to Congress' mandate that CERCLA actions be resolved as fairly and efficiently as possible." But the court does not explain how this observation is to affect a court's ruling on a defendant's motion for summary judgment (or judgment as a matter of law) in a CERCLA contribution action. The district court, on the other hand, was quite clear. The congressional "mandate" acknowledged by the First Circuit is to be honored by recognizing that the cost of a full allocation hearing (in relation to the likely amount of any ultimate share) is an "equitable factor" that a court is to consider when faced with a motion for summary judgment (or judgment as a matter of law).

Further, the First Circuit is incorrect in suggesting that the district court granted judgment as a matter of law "on the basis that the evidence was inadequate to make a quantifiable allocation of response costs to AFC, Mohasco, or Ottaway under § 9613(f)." The district court thought that, after a full allocation hearing, a quantifiable allocation could be made to each of the defendants but that the likely amount of any such allocation would be less than the private and public costs involved in conducting the hearing.

The First Circuit's Inadequate and Confused Statement of When "Equitable Factors" Justify the Allowance of Judgment as a Matter of Law

The First Circuit's opinion displays considerable confusion in locating an "equitable factors" analysis within the liability scheme of CERCLA. The court "holds" that "a defendant may avoid joint and several liability for response costs in a contribution action under § 9613(f) if it demonstrates that its share of hazardous waste deposited at the site constitutes [31 ELR 10198] no more than background amounts of such substances in the environment and cannot concentrate with other wastes to produce higher amounts."¹⁵¹ However, as previously stated, a defendant in a contribution action is not subject to joint and several liability. Liability in contribution action is several, limited to an amount determined in accordance with "such equitable factors as the court determines are appropriate."

The court's statement of "several reasons why … an otherwise responsible party may be liable for only a fraction of the total response costs or escape liability altogether" is not helpful in providing principles to resolve the issue before the court—whether the district court properly granted summary judgment and judgment as a matter of law to contribution defendants. The court's first two reasons are of no assistance whatsoever. The court is certainly correct in stating that § 113(f) "contemplates that courts will take equity into account in resolving contribution claims" and that "there is nothing to suggest that Congress intended to impose far-reaching liability on every party who is responsible for only trace levels of waste." But these observations do not help to explain when a court may grant summary judgment or judgment as a matter of law on contribution claims.

The First Circuit's third reason is more clearly related to the issue before the court. According to the court, "allowing CERCLA defendants to prevail on issues of fair apportionment, even at the summary judgment stage, is consistent with Congress' intent that joint and several liability not be imposed mechanically in all cases."¹⁵² This statement at least speaks to the issue of summary judgment even though it continues to reflect the court's mistaken belief that a contribution defendant is subject to joint and several liability. The court's statement that "to require an inconsequential polluter to litigate until the bitter end … would run counter to Congress' mandate that CERCLA actions be resolved as fairly and efficiently as possible"¹⁵³ is also generally relevant to the question of whether a contribution defendant should be able to avoid such "bitter end" litigation through summary judgment or judgment as a matter of law. But such a general statement provides no principles to guide a court in deciding when summary judgment or judgment as a matter of law would be appropriate.

The First Circuit's Standard for Affirming the Allowance of Summary Judgment and Judgment as a Matter of Law Is Incoherent

Ultimately, the First Circuit's affirmance of the district court's allowance of summary judgment and judgment as a matter of law is grounded on the First Circuit's determination that "the record was insufficient to permit a meaningful allocation of remediation costs against any of the defendants under § 9613(f)."¹⁵⁴ But the court never explains what considerations (or factors) enter into a determination of whether any possible allocation would be "meaningful." More fundamentally, the court never explains how its "meaningful allocation" test fits within basic principles of summary judgment and judgment as a matter of law. The court never explains how, in other words, the inadequacy of the record to permit a "meaningful allocation" supports the conclusion that there is no genuine issue of material fact.

The inadequacies of the court's general statement of its "meaningful allocation" standard are not clarified by the court's application of the standard to the specific motions of the defendants. With respect to NETT's motion for summary judgment, the court stated that the motion was supported by expert evidence "to the extent that the concentration of PAHs from NETT telephone poles, if in fact such poles were left at the site, was negligible."¹⁵⁵ Acknowledging that it had already "rejected the district court's reasoning inasmuch as it may have been rooted in a theory of causation that required some quantitative threshold,"¹⁵⁶ the court stated:

But even if NETT may be said to have caused plaintiffs to incur response costs, plaintiffs failed to rebut NETT's evidence showing that it would bear no more than a de minimis share of the remediation expenditures under § 9613(f). NETT essentially offered evidence tending to show that its equitable share would amount to zero; plaintiffs gave only a non-responsive rejoinder, mostly by insisting (wrongly) that causation is irrelevant.¹⁵⁷

The preceding statements are incorrect, or at least confused, regarding NETT's contention, and the statements fail to explain why, when a defendant supports its motion for summary judgment with evidence that it has deposited "negligible" amounts of hazardous substances at a site, the plaintiff is required to "rebut" in order to preclude the granting of the defendant's motion.

First, NETT's argument, supported by expert evidence, was that the concentrations of PAHs at the site that were attributable to NETT's pole butts were lower than background levels, and, for that reason, it was clear that NETT had not caused SLG to incur any response costs.¹⁵⁸ NETT's legal argument was not that it should "bear no more than a de minimis share" or that "its equitable share would amount to zero." NETT's legal argument was that it was not liable in a contribution action because its actions had not caused SLG to incur response costs.

Second, the court's statements about the nature of NETT's evidence and arguments are inconsistent. On the one hand, the court refers to NETT's evidence "showing that it should bear no more than a de minimis share," but then it states "that NETT essentially offered evidence that its equitable [31 ELR 10199] share would amount to zero." The two statements are not the same—a zero share is not the same as a de minimis share. And the court provides no explanation why a party would be entitled to summary judgment—that is, a judgment of no liability—because of evidence "that it should bear no more than a de minimis share." One would expect that such evidence would justify a small allocation, not a determination that the defendant is not liable.¹⁵⁹

Finally, though the court is clear in stating that SLG had the obligation to "rebut" NETT's evidence—if SLG wished to preclude the grant of summary judgment—the court fails to explain (1) why NETT's evidence was sufficient to impose a burden of rebuttal on SLG, and (2) how SLG might have successfully rebutted NETT's evidence. The court fails to explain, in other words, why NETT's evidence was sufficient to meet its initial burden of demonstrating that there was no genuine issue of material fact. Indeed, the court fails even to identify the "material fact" as to which, according to the court, NETT had demonstrated there was no dispute. And, since the court fails to identify the "material fact," it is completely unclear how SLG could have met its burden of rebutting that material fact.

The First Circuit's reasons for affirming the district court's allowance of judgment as a matter of law to AFC, Mohasco, and Ottaway are no more helpful in explaining the court's "meaningful allocation" standard. The court reviewed the evidence relating to each defendant and concluded that it was "inadequate to permit a rational factfinder to make a quantifiable allocation of response costs" to any of the three defendants. According to the First Circuit, the district court considered—as appropriate "equitable factors"—"the respective quantities of hazardous materials attributable to each defendant, the toxicity of the respective wastes, and their durability."¹⁶⁰ Accordingly, the First Circuit rejects SLG's argument that "equitable determinations played no role in the court's decision."¹⁶¹ The First Circuit characterized the district court's ruling as follows:

While the judge was not making specific allocations, it is plain to us he was holding that, in light of the equitable factors he would apply should he make explicit findings, plaintiffs' evidence showed too little pollution to justify compelling defendants to take on any meaningful share of the response costs. We read him to say that if he had to make an allocation for AFC, Mohasco, and Ottaway, the evidence dictated that each of their shares for response costs would be zero.¹⁶²

Again, the First Circuit misunderstood the rationale underlying the district court's ruling. Although the First Circuit is correct in saying that the district court "was not making specific allocations," the district court was not saying that, if it were to make an allocation for defendants, the allocation would be zero. The district court was saying that, on a motion for judgment as a matter of law, one of the "equitable factors" to be considered is the cost of proceeding to a full allocation hearing as compared with the amount of any likely allocation to a defendant. As to the latter, the district court did not say that any likely allocation—made after a full hearing—would be zero; rather the district court said that any likely allocation would be very small. And the smallness of that likely allocation, when contrasted with the high cost of a full allocation hearing, was a determining equitable factor that justified the district court's ruling in granting judgment as a matter of law to the defendants.

In sum, though the First Circuit asserted that it was affirming the district court's rulings in granting summary judgment to NETT and judgment as a matter of law to the other defendants, the court provides no principled, coherent explanation of the standard that it is applying and, thus, provides no coherent explanation of why it concludes that the district court's rulings should be affirmed under the equitable factors standard of CERCLA § 113(f)(1). Most importantly, the First Circuit fails to discuss the district court's "minimum standard of significance test" for resolving motions for judgment by contribution defendants. Although there may be some practical difficulties in applying the district court's test, the test was intellectually coherent and merited careful consideration by the First Circuit.

The Availability of Summary Judgment in CERCLA Contribution Actions

As stated at the outset of this Article, the issue before the First Circuit in the Acushnet litigation was an important one: When can a defendant in a CERCLA contribution action avoid the high transaction costs of a full CERCLA allocation hearing by prevailing on a motion for summary judgment? To answer this question, it is necessary to have a clear understanding of (1) the plaintiff's burden of proof in establishing a contribution defendant's liability, (2) the defendant's burden of proof in establishing any defenses to liability, and (3) the plaintiff's burden of proof in establishing its right to obtain an order requiring the defendant to reimburse a portion of its response costs. And, since the question involves the availability of summary judgment, it is necessary, of course, to understand the burdens imposed on those seeking, and those opposing, summary judgment.

For the reasons described above, the First Circuit's opinion in Acushnet fails to provide a clear and persuasive answer. However, the unscrambling of the court's opinion does assist in providing some answers.

[31 ELR 10200]

A Defendant in a CERCLA Contribution Action Is Entitled to Summary Judgment if It Can Demonstrate That, on the Undisputed Facts, It Is Not Liable Under CERCLA § 107(a)

Section 113(f)(1) provides that "any person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title." So it is clear that a defendant in a contribution claim is entitled to summary judgment if it is undisputed that the defendant is not a liable party under § 107(a).¹⁶³

The district court in Acushnet was incorrect in its conclusion that a defendant in a contribution action is entitled to summary judgment if it is undisputed that defendant's actions did not cause the plaintiff to incur response costs. The language of § 107(a), together with the overall structure of § 107 (particularly, § 107(b)'s of a lack of causation defense), make it clear that a plaintiff does not have the burden of proving such causation in order to establish a defendant's liability under § 107(a)—and thus, by virtue of § 113(f)(1), a defendant's liability in a CERCLA contribution claim.

However, a defendant is entitled to summary judgment if it can demonstrate that it is undisputed that the plaintiff's response costs were not caused by a release, or threatened release, of a hazardous substance at (or from) the facility as to which the defendant is alleged to be a responsible party. Section 107(a) clearly limits liability to those who fit within one of the four categories with respect to a facility "from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance." The Fifth Circuit's decisions in Amoco and Licciardi involve situations in which the contamination at a site did not justify (and thus did not cause) the incurrence of response costs. Accordingly, where such circumstances are undisputed, a defendant is entitled to summary judgment. Similarly, the situation in Dedham I & II was a two-site situation in which it was determined that the plaintiff had incurred its costs not because of a release or threatened release from the defendant's site but because of existing contamination that was determined not to have been caused by the defendant. So, in a two-site situation, where it is undisputed that plaintiff's costs were not caused by a release or threatened release from another site as to which the defendant is alleged to be a responsible party, the defendant is entitled to summary judgment.

A Defendant in a CERCLA Contribution Action Is Entitled to Summary Judgment if It Can Demonstrate That, on the Undisputed Facts, It Is Entitled to a Defense Under § 107(b)

Since liability in a CERCLA contribution action is dependent on whether a defendant is liable under § 107(a), a defendant is entitled to summary judgment if, on a motion for summary judgment, it can establish that it is undisputed that it qualifies for a defense under § 107(b)—for example, the third-party defense of § 107(b)(3).¹⁶⁴

It will be the unusual situation in which a defendant will be able to persuade a court that all the elements of that defense are undisputed. If the legal basis for a defendant's motion for summary judgment is an asserted defense under § 107(b), the defendant, since it has the burden of proof with respect to a defense, will have the initial burden of presenting evidence supporting all the elements of the defense.

The First Circuit in Acushnet was incorrect in stating that a defendant is entitled to judgment in a contribution action when it can demonstrate that the harm (i.e., the release) that caused the plaintiff to incur response costs is "divisible." Evidence of divisibility is relevant as a defense to the imposition of joint and several liability and it is clear that a defendant's liability in a contribution action is not joint and several.

A Defendant in a CERCLA Contribution Action Is Entitled to Summary Judgment if It Can Demonstrate That, on the Undisputed Facts, It Would Not Be Equitable to Require the Defendant to Reimburse the Plaintiff for a Portion of the Plaintiff's Response Costs.

SLG, the plaintiff in the Acushnet litigation, argued that, if it was clear that a defendant in a contribution action was liable under § 107(a), the court was obligated to conduct a full equitable allocation hearing—that is, the court could not grant summary judgment or judgment as a matter of law. But both the district court and the First Circuit correctly recognized that, in order for a contribution plaintiff to be entitled to relief (i.e., an order requiring a defendant to reimburse the plaintiff for a portion of its response costs), the plaintiff has the burden of proving that such relief is justified by "such equitable factors as the court determines are appropriate." Thus, a defendant in a contribution action is entitled to summary judgment if it can demonstrate that, on the undisputed facts, it would not be equitable to require the defendant to reimburse the plaintiff or a portion of the plaintiff's response costs.

In order for a defendant to obtain summary judgment on an "equitable factors" basis, it would be necessary for the defendant to persuade the court that one equitable factor (or, at most, a few factors) is potentially dispositive with respect to whether it would be equitable to require the defendant to reimburse a portion of the plaintiff's response costs. For example, there is at least one decision in which a court has upheld the grant of summary judgment to a defendant where the plaintiff failed to present evidence that the defendant's [31 ELR 10201] actions caused the plaintiff's response costs.¹⁶⁵ In Acushnet itself, NETT's argument in support of its motion for summary judgment was that because the PAH concentrations in its pole butts were below background levels, it could not have caused the plaintiff's response costs. The district court was incorrect in accepting NETT's argument that in order to establish NETT's liability, SLG was required to prove that NETT's actions caused its response costs. But the award of summary judgment to NETT might have been upheld on the ground that SLG was not entitled to relief (an order requiring reimbursement) because, on the undisputed facts, SLG had not met its burden of demonstrating that equitable factors justified an order requiring reimbursement by NETT. In other words, once NETT demonstrated, in support of its motion for summary judgment, that it had not caused SLG's response costs, a court could appropriately conclude that such demonstration, if unrebutted, would support the conclusion that it would not be equitable to require reimbursement by NETT. In the face of such a demonstration, SLG could avoid the award of summary judgment to NETT either (1) by producing evidence that NETT did cause SLG to incur response costs (in which case there would be a factual dispute with respect to the equitable factor of causation) or (2) by producing evidence of other equitable factors that, even in the face of NETT's demonstration of lack of causation, would justify an order requiring NETT to reimburse a portion of SLG's response costs.

The district court in Acushnet suggested another circumstance in which summary judgment might be awarded because of a plaintiff's failure to present evidence that it would be equitable to impose an order of reimbursement on a defendant: when the public and private costs of conducting a full allocation hearing would exceed the amount of any likely reimbursement order. In such a situation, a defendant moving for summary judgment is not grounding its motion on undisputed evidence of lack of causation. Rather, a defendant is conceding that it is responsible for a small amount of hazardous substances that may well have caused some small amount of the plaintiff's response costs. But the defendant is arguing that the amount of any likely allocation, imposed after a full allocation hearing, would be less than the costs of the hearing itself.

The district court in Acushnet decided as a matter of law that such a comparison of the amount of a likely allocation with the costs of a full allocation hearing was a determining "equitable factor" in that the court relied on that factor alone in granting judgment to defendants. The court's reasoning in support of this conclusion has persuasive force.¹⁶⁶ It is unfortunate that the First Circuit failed to address this reasoning.¹⁶⁷

Conclusion

The First Circuit's decision in Acushnet purports to deal with the important issue of when a defendant in a CERCLA contribution action is entitled to judgment without having to go through an expensive and time-consuming equitable allocation hearing. But, as this Article has sought to demonstrate, the First Circuit's opinion does not focus clearly on the precise issue before the court and, as a result, the court [31 ELR 10202] relies on decisions and principles that are unrelated to the issue before it. Furthermore, the court's affirmance of the district court's rulings fails to consider the district court's creative and potentially helpful "minimum standard of significance" test and fails to articulate a coherent standard for resolving motions for summary judgment by contribution defendants. It is to be hoped that other circuits will disregard the First Circuit's Acushnet decision and that the First Circuit will, in the near future, revisit the issue of when a contribution defendant is entitled to summary judgment.

1. John Hyson is a Professor of Law at Villanova Law School and a Visiting Scholar at the Environmental Law Institute (Spring 2001). He wishes to express his gratitude to Dean Mark Sargent of Villanova Law School for a summer research grant that supported the preparation of this Article; and to Luke Repici, Villanova Law School 2002, who provided valuable research assistance.

2. 191 F.3d 69, 30 ELR 20071 (1st Cir. 1999).

3. 191 F.3d at 72 n.3, 30 ELR at 20071 n.3. CERCLA § 113(f)(1) provides, in relevant part, as follows:

Any person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title …. In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate.

42 U.S.C. § 9613(f)(1), ELR STAT. CERCLA § 113(f)(1).

4. Since those who have incurred substantial response costs have a strong incentive to obtain as much reimbursement of these costs as possible, they will be inclined to bring contribution claims against a large number of entities who are at least arguably liable. (In United States v. Atlas Minerals & Chems., Inc. (Atlas Minerals), No. 91-5118, 1995 WL 510304 (E.D. Pa. Aug. 22, 1995), the parties that had incurred cleanup costs filed contribution claims against "approximately 60" defendants.) If there are a large number of contribution defendants, an equitable allocation bearing aimed at determining the equitable shares of each defendant will be even more complex and lengthy as the various defendants assert their individual views of the equitable factors that are "appropriate" and as they present evidence regarding the factors that are determined to be appropriate by the court. In such a multiparty allocation hearing, where each defendant is at odds with other defendants, the transaction costs of litigation escalate.

5. In Atlas Minerals, a number of potentially responsible parties (PRPs) were ordered by EPA, pursuant to CERCLA § 106(a), to implement a remedial action at a contaminated site. In complying with this order, the PRPs incurred total costs in an amount "close to $ 25 million." These cleanup PRPs then brought contribution claims against "approximately 60" other PRPs. All but two of the defendant PRPs settled with the plaintiffs. The court was required to conduct a full equitable allocation hearing on the plaintiff's claims against the two remaining contribution defendants. This hearing, as stated in the district court's opinion, "lasted approximately 50 days." The court stated that it had "heard testimony from about 80 witnesses and received nearly 700 exhibits." The court's opinion, explaining the basis for the equitable share imposed on the defendants, was over 260 pages long and contained 734 findings of fact.

6. In Atlas Minerals, all but 2 of the 60 original contribution defendants entered into settlements.

7. See supra note 5 for a description of the burdens borne by the court in the Atlas Minerals litigation.

8. In Acushnet, the First Circuit was called on to review a grant of summary judgment to one defendant (NETT) and the grant of judgment as a matter of law, at the conclusion of the plaintiff's evidence, to three other defendants. A court applies the same standard on motions for summary judgment and judgment as a matter of law: Has the plaintiff presented sufficient evidence to support the entry of judgment in the plaintiff's favor? For an explanation of the relationship between motions for summary judgment and motions for judgment as a matter of law, see Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986). Thus, the First Circuit, in determining whether the plaintiff had presented sufficient evidence to withstand the three defendants' motions for judgment as a matter of law, was also determining whether the plaintiff's evidence would have been sufficient to withstand a motion for summary judgment.

9. The Sullivan's Ledge Group (SLG) consisted of 13 corporations that had cleaned up the Sullivan's Ledge site pursuant to a consent decree. 191 F.3d at 71-72, 30 ELR at 20071.

10. The one exception was Cornell-Dubilier Electronics, Inc. (CDE), against whom SLG obtained an order of contribution after a full allocation hearing. Acushnet Co. v. Coaters, Inc., 972 F. Supp. 41, 28 ELR 20367 (D. Mass. 1997).

11. Acushnet Co. v. Coaters, Inc., 937 F. Supp. 988, 992, 27 ELR 20311, 20313 (D. Mass. 1996).

12. Id. at 991, 27 ELR at 20312.

13. Id.

14. Id. at 992, 27 ELR at 20313.

15. Id.

16. Id. (emphasis in original). The court went on to say:

The response costs that have been incurred … have been … required, not because of PAH levels to which NETT contributed in any way, but because of contamination as to which there is no proffer of evidence that NETT contributed in any way.

Id. at 992-93, 27 ELR at 20313.

17. Fed. R. Civ. P. 56(c).

18. As the district court stated, "a fact is 'material' only when it possesses the capacity, if determined as the nonmovant wishes, to alter the outcome of the lawsuit under the applicable legal tenets." 937 F. Supp. at 991, 27 ELR at 20312 (quoting Roche v. John Hancock Mut. Life Ins. Co., 81 F.3d 249, 253 (1st Cir. 1996)).

19. Id. at 993-94, 27 ELR at 20314 (citation omitted).

20. Id. at 994, 27 ELR at 20314.

21. Id. Presumably the court intended to say that the asserted silence of the statute with respect to causation was not conclusive in support of plaintiffs' contention that no causation need be proved underCERCLA.

22. Id. (emphasis in original).

23. 972 F.2d 453, 23 ELR 20062 (1st Cir. 1992).

24. Id. As will be more fully explained below, the district court failed to recognize that Dedham Water involved a causation question that was distinct from the causation question before it.

25. 937 F. Supp. at 994-96, 27 ELR at 20314-15. CERCLA § 107(b) provides as follows:

(b) Defenses

There shall be no liability under subsection (a) of this section for a person otherwise liable who can establish by a preponderance of the evidence that the release or threat of release of a hazardous substance and the damages resulting therefrom were caused solely by—

(1) an act of God;

(2) an act of war;

(3) an act or omission of a third party other than an employee or agent of the defendant, or than one whose act or omission occurs in connection with a contractual relationship, existing directly or indirectly, with the defendant (except where the sole contractual relationship arises from a published tariff and acceptance for carriage by a common carrier by rail), if the defendant establishes by a preponderance of the evidence that (a) he exercised due care with respect to the hazardous substance concerned, taking into consideration the characteristics of such hazardous substance, in light of all relevant facts and circumstances, and (b) he took precautions against foreseeable acts or omissions of any such third party and the consequences that could foreseeably result from such acts or omissions; or

(4) any combination of the foregoing paragraphs.

42 U.S.C. § 9607(b), ELR STAT. CERCLA § 107(b).

26. 759 F.2d 1032, 15 ELR 20358 (2d Cir. 1985).

27. Id. at 1044, 15 ELR at 20363.

28. 937 F. Supp. at 994, 27 ELR at 20314.

29. As the district court explained:

The exceptions listed in § 107(b) explicitly carve out from the scope of liability that might otherwise exist under § 107, any responsibility for parts of a practically indivisible harm if the party otherwise liable, and perhaps jointly liable, for some harm nevertheless makes the showing that another part of the harm was "solely caused" in one of the designated ways, and also meets other requirements (e.g., "he exercised due care").

Id. at 995, 27 ELR at 20314.

30. Id. at 996, 27 ELR at 20315.

31. Id. at 996-99, 27 ELR at 20315-17.

32. See infra notes 84 and 89.

33. 937 F. Supp. at 999-1001, 27 ELR at 20317.

34. Id. at 999, 27 ELR at 20317. It is not clear why SLG argued that its position was supported by "common-law developments." Section 107(a) states expressly that the liability established by that section exists "not withstanding any other provision or rule of law." The principles of liability established by CERCLA are, in many respects, contrary to the common law. The district court was clearly correct in rejecting SLG's argument that the imposition of liability without proof of causation was consistent with common-law principles of strict liability.

35. The three defendants were American Flexible Conduit (AFC), Mohasco Corporation (Mohasco), and Ottaway Newspapers, Inc. (Ottaway).

36. Acushnet Co. v. Coaters, Inc. (Acushnet II), 948 F. Supp. 128, 27 ELR 20652 (D. Mass. 1996).

37. Id. at 139, 27 ELR at 20658. The district court's statement of this alternative basis for its ruling was somewhat perfunctory. The court did not state the basis for its conclusion that SLG had failed to present evidence that the defendants's disposal activities had caused SLG to incur response costs.

38. Id. at 134, 27 ELR at 20655 (emphasis in the original).

39. Id.

40. Id.

41. Id.

42. As the district court explained:

The Gore Factors were proposed by then-[Rep. Al Gore (D-Tenn.)] for inclusion in an amendment to H.R. 7020, to provide guidance to courts as to whether to impose joint and several liability. The House passed that proposal in 1980, but the bill did not become law.

Id. at 135, 27 ELR at 20655. Though the Gore Factors were not adopted as principles for imposing joint and several liability, they have been adopted by federal courts as representative of the "equitable factors" that courts should consider in making allocations under § 113(f)(1). See generally United States v. R.W. Meyer, Inc., 932 F.2d 568, 21 ELR 21062 (6th Cir. 1991).

The Gore Factors are:

(1) the ability of the parties to demonstrate that their contribution to a discharge, release or disposal of a hazardous waste can be distinguished;

(2) the amount of the hazardous waste involved;

(3) the degree of toxicity of the hazardous waste involved;

(4) the degree of involvement by the parties in the generation, transportation, treatment, storage, or disposal of the hazardous waste;

(5) the degree of care exercised by the parties with respect to the hazardous waste concerned, taking into account the characteristics of such hazardous waste; and

(6) the degree of cooperation by the parties with Federal, state, or local officials to prevent any harm to the public health or the environment.

H.R. 253, 99th Cong. § 19 (1985).

43. 948 F. Supp. at 135, 27 ELR at 20656. As the district court explained more fully:

Both the statutory mandate for "equitable factors" and the precedents invoking Gore Factors suggest that courts must use, in deciding a particular case, a threshold requirement that is equitable in nature….

"Equitable" as used in the statutory text …, and as explained in the Gore Factors and in precedents governing civil actions for contribution under CERCLA, is … appropriately determined as meaning fair and reasonable.

Id., 27 ELR at 20655-56.

44. Id. at 135-36, 27 ELR at 20656.

45. Id. at 136, 27 ELR at 20656.

46. Id.

47. Id.

48. Id. Later in its opinion, the court explained that the comparison of burdens required under the court's "threshold of significance" standard is grounded on its interpretation of the "equitable factors" that Congress intended a court to consider:

It seems unlikely we should construe an Act of Congress, permitting plaintiffs to proceed against a defendant to establish a right to contribution on the basis of "equitable factors," as authorizing a claim for a share as small as AFC's share would turn out to be, even if plaintiffs were to win, when the proof of entitlement to that share would require a trial of the length of this trial, extending to 30 court days or more, at a cost in public and private resources at least tens and perhaps hundreds of times more than the share for which judgment would then be entered.

Id. at 138, 27 ELR at 20657.

49. Id.

50. Id.

51. Id. The district court focused on AFC because, with respect to quantity, "the proffered evidence relevant to plaintiffs' claims against [AFC] is somewhat more substantial than that bearing on claims against Mohasco and Ottaway Newspapers." Id.

52. Id.

53. Id.

54. In Celotex Corp. v. Catrett, 477 U.S. 317 (1986), the U.S. Supreme Court held that a party moving for summary judgment

always bears the initial responsibility of informing the district court of the basis for its motion, identifying those portions of "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any," which it believes demonstrate the absence of a genuine issue of material fact.

Id. at 323 (quoting Fed. R. Civ. P. 56(b)).

55. Federal Rule of Civil Procedure 56(e) provides that "when a motion for summary judgment is made and supported as provided in this rule, … the adverse party's response … must set forth specific facts showing that there is a genuine issue for trial." Under Celotex, it is clear that the moving party has the "initial obligation" to show that there is no dispute that it would be inequitable to proceed with a full equitable allocation hearing. Once the moving party satisfies this initial obligation, Rule 56(e) makes it clear that the burden shifts to the nonmoving party. What is unclear is the nature of a moving party's initial obligation under the district court's "minimum standard of significance" approach.

56. The district court in Acushnet did not make a precise calculation of the costs of a full equitable allocation hearing on SLG's contribution claims against AFC, Mohasco, and Ottaway. If a district court is permitted to grant a motion for summary judgment based on a rough comparison of the amount of any likely allocation with the costs of an equitable allocation hearing, it is not clear that there could be effective appellate review of the district court's ruling. It would be difficult for a court of appeals to establish a principled basis for reviewing such a rough comparison.

57. One could hypothesize a situation in which a defendant is responsible for large amounts of hazardous substances at a site but these hazardous substances have not been a significant cause of the plaintiff's response costs. In such a situation, the defendant might argue that, in light of this minimal causational relationship between the plaintiff's response costs and the defendant's actions, any likely equitable allocation to the defendant (after a full equitable allocation hearing) would be small in comparison with the costs of the hearing.

58. The following statement of the arguments in the parties' briefs is not intended to be exhaustive. It is intended rather to highlight the principal arguments presented by the parties and thereby provide assistance in attempting to understand the reasoning of the First Circuit.

59. SLG Original Brief at 16ff, Acushnet Co. v. Mohasco Corp. (1st Cir. 1996) (No. 97-2138).

60. 42 U.S.C. § 9613(f)(1), ELR STAT. CERCLA § 113(f)(1) (emphasis added).

61. SLG argued that its position—that a contribution plaintiff is not required to prove that a defendant's activities caused the plaintiff to incur response costs—was supported by the First Circuit's decision in O'Neil v. Picillo, 883 F.2d 176, 20 ELR 20115 (1st Cir. 1989). The relevance of the O'Neil decision is discussed in this Article, infra at the section, Basic Principles of Joint and Several Liability Under CERCLA. SLG also argued that the district court had improperly relied on the First Circuit's decision in Dedham Water Co. v. Cumberland Farms, Inc., 889 F.2d 1146, 20 ELR 20334 (1st Cir. 1989). The relevance of the Dedham Water Co. decision is discussed infra at note 84 and accompanying text.

62. Ottaway was the only one of the three defendants who argued that it was not a liable party under § 107(a) and, thus, that even under SLG's view of the law, it was entitled to judgment as a matter of law.

63. The nature of this requirement is discussed supra notes 35-62 and accompanying text.

64. 889 F.2d 1146, 20 ELR 20334 (1st Cir. 1989). The relevance of the Dedham Water Co. decision is discussed infra at note 84.

65. The decisions relied on by NETT were United States v. Alcan Aluminum Corp., 964 F.2d 252, 22 ELR 21124 (3d Cir. 1992) and United States v. Alcan Aluminum Corp., 990 F.2d 711, 23 ELR 20706 (2d Cir. 1993). Both of the Alcan decisions involved defenses to joint and several liability in government cost recovery actions. The relevance of the Alcan decisions to the issues presented in the Acushnet litigation is discussed infra at notes 108-117 and accompanying text.

66. SLG Reply Brief at 11, Acushnet Co. v. Mohasco Corp. (1st Cir. 1996) (No. 97-2138).

67. Acushnet Co. v. Mohasco Corp., 191 F.3d 69, 72, 30 ELR 20071 (1st Cir. 1999) (internal citation omitted).

68. Id. at 72-74, 30 ELR at 20071-72.

69. Id. at 74-75, 30 ELR at 20072-73.

70. Id. at 75, 30 ELR at 20073. These two arguments relate to the "causation" basis for the district court's rulings. The First Circuit also states the following third argument: "to the extent the district court may have considered equitable factors in ruling in favor of Mohasco, Ottaway, and AFC, plaintiffs claim that the court did so without providing a 'full and fair allocation trial' within the meaning of section 9613(f)." Id. See infra, notes 123-39 and accompanying text, for a discussion of an "equitable factors" basis for granting summary judgment or judgment as a matter of law.

71. 191 F.3d at 76, 30 ELR at 20073.

72. Id.

73. Id. The court discusses its prior decisions in Dedham Water Co. and O'Neil.

74. Id. at 77, 30 ELR at 20073.

75. 990 F.2d 711, 23 ELR 20706 (2d Cir. 1993).

76. 191 F.3d at 77, 30 ELR at 20074 (internal footnote omitted).

77. The question whether CERCLA requires "a polluter's waste to meet a minimum quantitative threshold" has nothing to do with "causation." The courts are in agreement that a plaintiff is not required, in order to establish a defendant's liability under CERCLA, to prove that the defendant is responsive for a "minimum quantity" of hazardous substances. See, e.g., United States v. Alcan Aluminum Corp., 964 F.2d 252, 260-61, 22 ELR 21124, 21127-28 (3d Cir. 1992); Amoco Oil Co. v. Borden, Inc., 889 F.2d 664, 669, 20 ELR 20281, 20283 (5th Cir. 1989).

78. 191 F.3d at 74, 30 ELR at 20072.

79. It is generally agreed that the phrase "from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance" modifies all four subparagraphs of § 107(a), even though it is physically incorporated only into subparagraph (4). See New York v. Shore Realty Corp., 759 F.2d 1032, 1043 n.16, 15 ELR 20358, 20362 n.16 (2d Cir. 1985).

80. 889 F.2d 664, 20 ELR 20281 (5th Cir. 1989).

81. 111 F.3d 396, 27 ELR 21045 (5th Cir. 1997).

82. 889 F.2d at 1146, 20 ELR at 20334.

83. Amoco, 889 F.2d at 670-71, 20 ELR at 20284; Licciardi, 111 F.3d at 399, 27 ELR at 21046-47.

84. In Dedham I, the question was whether a release or threatened release from the defendant's site had caused the plaintiff to incur response costs. In that context, the First Circuit stated that "under CERCLA the question is whether the release or threatened release by a defendant caused a plaintiff to incur response costs." 889 F.2d at 1153, 20 ELR at 20336. NETT relied on this statement to support its argument that a plaintiff must prove that a defendant's actions caused the plaintiff to incur response costs. And the district court relied on Dedham I to support its conclusion to the same effect. However, the issue in Dedham I was whether the plaintiff had incurred certain costs in response to actual contamination of the plaintiff's wells or as a result of a release or threatened release from the defendant's site. In that context, the First Circuit held, quite correctly, that the plaintiff must prove that its response costs were caused by a release or threatened release from the defendant's site. The focus of the court was on whether the plaintiff's response costs had been caused by a release (as opposed to existing contamination), not whether the release had been caused by a particular defendant. The court in Dedham I did not address the question presented in Acushnet—whether, where it is clear that a release has caused the plaintiff to incur response costs, the plaintiff must, in order to establish a defendant's liability in a contribution action, prove that the defendant's actions caused the release and plaintiff's resulting response costs.

In its opinion in Acushnet, the First Circuit does not directly address the district court's and NETT's reliance on Dedham I.

85. In Acushnet, the First Circuit, in a footnote, states that "the Fifth Circuit's approach [in Amoco and Licciardi], which demands a finding that defendant's pollution 'posed a[ ] threat to the public threat to the public or the environment' before it may be said that he has caused plaintiff to incur response costs, goes too far." 191 F.3d at 78 n.9, 30 ELR at 20074 n.9. The emphasized language reflects the court's misunderstanding of the issue in Amoco and Licciardi. The issue was whether a release posed such a threat that it could be concluded that the release caused the plaintiff to incur response costs. The issue was not, as the First Circuit's statement suggests, whether "he"—i.e., a particular defendant—caused the plaintiff to incur response costs.

86. In United States v. Wade, 577 F. Supp. 1326, 14 ELR 20096 (E.D. Pa. 1983), one of the earliest decisions under CERCLA, the court undertook a careful analysis of the language of § 107(a) in support of its conclusion that, in order to establish a defendant's liability under CERCLA, it is not necessary for a plaintiff to prove that the defendant's actions caused the plaintiff to incur response costs. For a recent decision reaching the same conclusion (and collecting other decisions that reach the same conclusion), see Kalamazoo River Study Group v. Menasha Corp., 228 F.3d 648, 655-56 (6th Cir. 2000).

87. The complete text of CERCLA § 107(b) is set forth supra note 25.

88. Courts have also relied on legislative history to support this reading of § 107. When Congress enacted CERCLA in 1980, it rejected a House Committee bill that imposed liability on "any person who caused or contributed to the release." H.R. 7020, 96th Cong. § 3071(a) (1980). For a discussion of this legislative history, see Wade, 577 F. Supp. at 1337-38, 14 ELR at 20100.

89. The initial language of § 107(a) expressly states that the liability imposed by § 107 applies "notwithstanding any other provision or rule of law." 42 U.S.C. § 9607(a), ELR STAT. CERCLA § 107(a). The district court in Acushnet rejected SLG's argument that the language of § 107(a), the overall structure of § 107 (in particular, the specific provision of a lack of causation defense in § 107(b)), together with legislative history, demonstrate that the liability scheme of § 107 rejects and overrides the common-law requirement that a plaintiff must prove that its harm was caused by the defendant's actions. See supra notes 11-39 and accompanying text, for a description of the district court's reasoning. The district court's conclusion to the contrary is at odds with the views of most courts.

The district court in Acushnet cited Farmland Indus. v. Morrison-Quirk Grain Corp., 987 F.2d 1335, 23 ELR 20869 (8th Cir. 1993) as providing support for its conclusion that a plaintiff in a CERCLA contribution action must prove that a defendant's actions caused the plaintiff to incur response costs. In particular, the district court relied on the following statement in Farmland Industries:

[A] private party cannot predicate a claim for contribution or indemnity solely upon section 9607(a) liability to the government, but must also prove causation.

987 F.2d at 1340, 23 ELR at 20871, quoted in Acushnet Co. v. Coaters, Inc., 937 F. Supp. 988, 999, 27 ELR 20311, 20316 (D. Mass. 1996).

90. Section 107(a) provides that those who fit within any one of the four specified categories of liability are liable for "any other necessary costs of response incurred by any other person consistent with the national contingency plan." 42 U.S.C. § 9607(a)(4)(B), ELR STAT. CERCLA § 107(a)(4)(B).

91. Until fairly recently, it was unclear whether CERCLA provided a PRP with the right to bring a "private cost recovery action" that was separate and distinct from a contribution action. PRPs who had incurred response costs sought to bring private cost recovery actions—rather than contribution actions—because they hoped that, in such private cost recovery actions, the defendants would be held to be jointly and severally liable for the plaintiff's response costs. In contrast, it is clear that the liability of a defendant in a contribution action is several—that is, the burden is on the plaintiff to establish the defendant's appropriate share of the plaintiff's response costs. Recent decisions have made it clear that when a PRP sues another PRP for response costs, the action is necessarily one for contribution and that a defendant's liability is not joint and several. Pinal Creek Group v. Newmont Mining Corp., 118 F.3d 1298, 27 ELR 21211 (9th Cir. 1997); Centerior Serv. Co. v. Acme Scrap Iron & Metal Corp., 153 F.3d 344, 29 ELR 20065 (6th Cir. 1998).

92. 42 U.S.C. § 9613(f)(1), ELR STAT. CERCLA § 113(f)(1).

93. See supra notes 77-79 and accompanying text.

94. 191 F.3d 69, 76, 30 ELR 20071, 20073 (emphasis added).

95. This was the only ground that the district court stated in support of its allowance of NETT's motion for summary judgment. See supra notes 11-39 and accompanying text. It was an alternative ground stated by the district court in support of its allowance of the motions for judgment as a matter of law by AFC, Mohasco, and Ottaway.

96. In its brief on appeal, NETT argued that the Supreme Court's reasoning in United States v. Bestfoods, 118 S. Ct. 1876, 28 ELR 21225 (1998), supported the district court's conclusion. In Bestfoods, the Supreme Court relied on "the rule that 'in order to abrogate a common-law principle, the statute must speak directly to the question addressed by the common law.'" 118 S. Ct. at 1885, 28 ELR at 21227 (quoting United States v. Texas, 505 U.S. 529, 534 (1993)). The Court concluded that CERCLA did not speak directly to the question of when a parent corporation is liable for the acts of its subsidiaries. Accordingly, the Court held that CERCLA did not abrogate state common-law "veil-piercing" principles that limit the circumstances in which a parent is liable for the acts of its subsidiaries.

Certainly, the rule stated in Bestfoods applies as well to the question addressed by the district court in Acushnet. Under that rule, in order for CERCLA to abrogate thecommon-law rule that requires a plaintiff to prove that its harm was caused by the defendant, CERCLA must speak directly to the issue. It seems quite clear that, contrary to the reasoning of the district court in Acushnet, CERCLA does speak directly to this issue—in the language and structure of § 107.

In its original brief on appeal, SLG relied on the First Circuit's decision in O'Neil v. Picillo, 883 F.2d 176, 20 ELR 20115 (1st Cir. 1989), to support its contention that a plaintiff in a contribution action is not required to prove that a defendant caused the plaintiff's response costs. O'Neil was a government cost recovery action in which the court rejected a defendant's contention that a defendant was a "substantial cause" of the release (that had caused the government's response costs) in order for the defendant to be jointly and severally liable. The issue presented in O'Neil is distinct from the issue addressed by the district court in Acushnet: whether a plaintiff in a contribution action must prove that a defendant's action caused the plaintiff to incur response costs. For a discussion of whether causation is relevant in establishing joint and several liability, see infra notes 100-22 and accompanying text.

97. Pinal Creek Group v. Newmont Mining Corp., 118 F.3d 1298, 1303, 27 ELR 21211, 21213 (9th Cir. 1997); Centerior Serv. Corp. v. Acme Scrap Iron & Metal Corp., 153 F.3d 344, 348, 29 ELR 20065 (6th Cir. 1998).

98. Defendants, and NETT, in particular, had relied primarily on the Second Circuit's decision in United States v. Alcan Aluminum Corp., 990 F.2d 711, 23 ELR 20706 (2d Cir. 1993).

99. 883 F.2d 176, 20 ELR 20115 (1st Cir. 1989).

100. For a more complete discussion of these principles, see John M. Hyson, "Fairness" and Joint and Several Liability in Government Cost Recovery Actions Under CERCLA, 21 HARV. ENVTL. L. REV. 137, 150-60 (1997). The leading case setting forth these principles is United States v. Monsanto Co., 858 F.2d 160, 19 ELR 20085 (4th Cir. 1988).

101. See, e.g., Monsanto Co., 858 F.2d at 171, 19 ELR at 20089.

102. 883 F.2d at 176, 20 ELR at 20115.

103. The court's complete statement regarding the defendant's argument was as follows:

Citing the Restatement (Second) of Torts § 433B, appellants [defendants] contend that before joint and several liability may be imposed, the government has the initial burden of showing that the defendants were a "substantial" cause of the harm. If the government cannot prove that the defendants were substantial contributors, then joint and several liability may not be imposed and the defendant's burden of demonstrating that the harm is divisible never arises. We reject this approach.

Even assuming that a strict application of the Restatement would allow appellants to escape joint and several liability in a case such as this one—something which is far from clear, appellants having provided us with no common law tort precedents tosupport their reading of the Restatement formulation—we would nonetheless decline to place this threshold burden on the government in CERCLA actions. As we noted earlier, Congress intended for the federal courts to develop a uniform approach to govern the use of joint and several liability. The Restatement is one source for us to consult. While courts have generally looked to the Restatement for guidance, they have declined to place the burden of showing that defendants are "substantial" contributors on the government, recognizing Congress' concern that cleanup efforts not be held hostage to the time-consuming and almost impossible task of tracing all of the waste found at a dump site.

Id. at 179 n.4, 20 ELR at 20117 n.4.

104. United States v. Alcan Aluminum Corp., 964 F.2d 252, 22 ELR 21124 (3d Cir. 1992); Alcan, 990 F.2d at 711, 23 ELR at 20706.

105. This argument was an alternative argument to NETT's basic argument that the plaintiff in a contribution action has the burden of proving that a defendant's actions caused the plaintiff's response costs. The alternative argument, grounded on the Alcan decisions, was that, even if the plaintiff did not have the burden of proving that a defendant's actions caused the plaintiff's response costs, the defendant could avoid liability in a contribution action if it could demonstrate that its actions did not cause the plaintiff's response costs. Since, as previously explained (see supra notes 92-96 and accompanying text), contribution actions can be brought against any one who is liable under § 107(a), it is clear that a contribution defendant can avoid liability if it can make the demonstrations required by the third-party defense set forth in § 107(b)(3). But the invocation of that defense requires not only a demonstration that the defendant did not cause the release (and resulting response costs) but also that the defendant exercised "due care" and took "precautions." For the text of § 107(b)(3), see supra note 25. The Alcan decisions, however, state that a defendant can avoid joint and several liability (not basic liability) by simply proving that it did not cause the plaintiff's response costs.

106. SLG relied on the statement in O'Neil that, in a government cost recovery action, the government plaintiff was not required to prove that a defendant was a "substantial cause" of the government's response costs. See supra note 103.

107. In Browning-Ferris Indus. of Ill., Inc. v. Ter Maat, 195 F.3d 953, 30 ELR 20135 (7th Cir. 1999), the court held that joint liability is "optional" in a contribution action. According to the court, "it is up to the district judge, guided only by equitable considerations—a broad and loose standard—to decide … where such considerations weigh heavily in favor of joint liability." Id. at 957, 30 ELR at 20137.

The court in Browning-Ferris was apparently stating that, in a particular contribution case, a district court, in applying the "equitable factors" standard for allocating the plaintiff's response costs, might conclude that equity supports the imposition of joint liability on the contribution defendants. But, as the court states, joint liability is, at most, an "option" in a contribution action; it is not automatic, as it is in a government cost recovery action. In Acushnet, there is no indication that SLG, the plaintiff, had contended that the court should invoke the option of imposing joint liability on the various defendants. Thus, the question of divisibility—a question that is presented only when a defendant is seeking to avoid joint and several liability—was simply not presented in Acushnet.

108. See discussion supra notes 77-79 and accompanying text.

109. 191 F.3d at 77, 30 ELR at 20073.

110. 990 F.2d at 711, 23 ELR at 20706.

111. 191 F.3d at 77, 30 ELR at 20074.

112. Id. at 77-78, 30 ELR at 20074.

113. Id. at 78 n.8, 30 ELR at 20074 n.8. The court concludes by noting that "since the trial court here rendered no definitive findings as to the divisibility of the environmental damage at Sullivan's Ledge, and because a definitive view on the matter is not required to resolve this appeal, we leave this question for another day." Id. The district court rendered no findings with respect to divisibility because it apparently recognized (unlike the First Circuit) that divisibility is not an issue in a contribution action where a defendant's liability is several, not joint and several.

114. 94 F.3d 1489, 27 ELR 20028 (11th Cir. 1996). The Eleventh Circuit held that the district court had erred in undertaking divisibility analysis in a contribution action. As the court stated:

The district court's underlying legal analysis … illustrates how courts and practitioners often misinterpret the nature of liability under § 113(f). The court reasoned that prior to allocating costs based on "such equitable factors as the court determines are appropriate," it first had to find the harm at the Saraland Site was "divisible." In finding the harm at the Site was divisible, the court relied on United States v. Monsanto Co., 858 F.2d 160, 171-72 (4th Cir. 1988), … where the Fourth Circuit adopted the rule of § 433A of the Restatement (Second) of Torts for determining when to impose joint and several liability on parties found liable to federal and state governments under § 107(a) of CERCLA…. Through its reliance on Monsanto and other cases involving governmental plaintiffs, the district court improperly imported the "divisibility" defense to joint and several liability under § 107(a) into the analysis for equitable allocation under § 113(f).

Id. at 1512-13, 27 ELR at 20039 (emphasis added). The First Circuit in Acushnet made the same mistake as the district court in Redwing Carriers.

115. In Kalamazoo River Study Group v. Menasha Corp., 228 F.3d 648 (6th Cir. 2000), the court questioned the First Circuit's concern in Acushnet about joint and several liability in a contribution action since "liability under § 113 is ordinarily not joint and several, but several only." Id. at 658 n.6.

116. Acushnet, 191 F.3d at 77-78, 30 ELR at 20074.

117. See discussion supra notes 103-07 and accompanying text.

118. 191 F.3d at 72, 30 ELR at 20071. As explained supra at notes 77-79 and accompanying text, this is not a correct statement of the "causation standard" stated in the district court's ruling.

119. 191 F.3d at 72, 30 ELR at 20071.

120. See supranotes 92-96 and accompanying text for a discussion of how the first sentence of § 113(f)(1) states that contribution claims may be brought against any person who is liable under § 107.

121. As to the district court's stated alternative ground in granting judgment at the conclusion of SLG's evidence—the failure of SLG's evidence to meet a "minimum standard of significance" (see supra notes 35-62 and accompanying text)—SLG argued that this standard was erroneous as a matter of law in that, like the first alternative ground, it incorporated a requirement that a contribution plaintiff present evidence that a defendant caused the plaintiff's response costs. See SLG Reply Brief, supra note 66.

122. See discussion supra notes 89-91 and accompanying text.

123. As explained supra at notes 103-11 and accompanying text, a party who is liable under § 107(a) is jointly and severally liable in a government cost recovery action. Such joint and several liability is "presumptive" in that the defendant can avoid joint and several liability if it can prove that the harm (i.e., the release that caused the government's response costs) is divisible.

124. The imposition of liability in the absence of proof of causation seems "unfair" in that it is inconsistent with common-law standards of liability. The imposition of presumptive joint and several liability seems "unfair" in that it subjects a defendant to the risk of disproportionate liability—that is, liability in an amount that exceeds the defendant's fair share of the costs for cleaning up a contaminated site. Contribution actions permit a district court to remedy both types of unfairness by permitting a court to determine the fair shares of each liable party in accordance with "equitable factors" that include evidence of the extent to which defendant contributed to—was a partial cause of—the contamination and the resulting cleanup costs.

125. As previously explained, see supra note 42, courts have looked to the "Gore Factors" as a starting point in determining the "equitable factors" that are "appropriate." Several of the Gore Factors involve a consideration of whether, and to what extent, a defendant's actions were a contributing cause to the release and resulting response costs incurred by a plaintiff. The Gore Factors are set forth supra note 42.

126. As previously explained, see supra note 42, several of the Gore Factors involve a consideration of whether, and to what extent, a defendant's actions were a contributing cause to the release and resulting response costs incurred by a plaintiff. There appears to be no reported case in which a court has excluded evidence of causation as an "equitable factor."

127. In Environmental Transp. Sys. v. ENSCO, Inc., 969 F.2d 503, 22 ELR 21361 (7th Cir. 1992), the court set forth numerous factors (including the Gore Factors) that a district court might consider in making an allocation determination in a contribution action. The court then stated:

In enumerating the different factors that court may consider in making equitable allocations we are in no way requiring or even suggesting that courts must make specific findings as to each factor we have mentioned. Therefore, in any given case, a court may consider several factors, a few factors, or only one determining factor, as the district court did in this case, deciding on the totality of circumstances presented to the court.

Id. at 509, 22 ELR at 21363-64 (emphasis added). In Environmental Transp. Sys., the court upheld the grant of summary judgment to a contribution defendant because of the district court's conclusion that the release and resulting response court's were the "fault" of the plaintiff's employee—that is, the district court concluded that it was undisputed that the release and resulting response costs were caused by the plaintiff's employee, not by the defendant.

128. See supra notes 14-18 and accompanying text for a description of the expert evidence offered in support of NETT's motion for summary judgment. NETT argued that this evidence demonstrated that the PAH that leached into the soil from NETT's utility pole butts could not have caused a concentration in excess of background levels and thus could not have caused SLG's response costs.

129. See supra note 127, for a discussion of a district court's discretion, in appropriate circumstances, to conclude that a particular equitable factor is a "determining factor."

130. Federal Rule of Civil Procedure 56(e) provides that "when a motion for summary judgment is made and supported as provided in this rule … the adverse party's response … must set forth specific facts showing that there is a genuine issue for trial."

131. SLG might have opposed NETT's motion with conflicting expert evidence as to whether the PAHs in NETT's pole butts could have caused PAH concentrations in excess of background levels and thus could have caused SLG to incur response costs. This first method of opposing SLG's motion for summary judgment would have implicitly conceded that causation was an appropriate determining factor but would have asserted that there was a genuine issue of fact with respect to this factor.

132. This second method of opposing NETT's motion for summary judgment would have challenged NETT's assertion that it would be appropriate for the court to consider causation as the determining factor in deciding whether the plaintiff was entitled to relief. In so opposing NETT's motion, SLG would have been asserting that it was appropriate for the court to consider several equitable factors in determining whether to grant SLG relief; that the materials submitted by SLG demonstrated that there was a genuine issue with respect to whether an evaluation of the appropriate factors supported the granting of relief (i.e., an order of reimbursement) to SLG; and that the court should therefore deny NETT's motion for summary judgment.

133. The district court's reasoning in granting NETT's motion for summary judgment is explained supra notes 11-39 and accompanying text. The district court's reasoning in granting the motions for judgment as a matter of law by AFC, Mohasco, and Ottaway is set forth supra notes 39-54 and accompanying text.

134. As previously explained, see supra notes 35-42 and accompanying text, the district court set forth two rationales in support of its allowance of the motions for judgment as a matter of law by AFC, Mohasco, and Ottaway. As explained above, the First Circuit misunderstood the district court's causation rationale. See supra notes 77-79 and accompanying text.

135. Acushnet Co. v. Mohasco Corp., 191 F.3d 69, 76, 30 ELR 20071, 20073 (1st Cir. 1999). An appellate court may, of course, affirm a district court's rulings for reasons other than those relied on by the district court.

136. Id. at 72, 30 ELR at 20071.

137. For an explanation of the district court's reasoning, see supra notes 35-66 and accompanying text.

138. 191 F.3d at 77, 30 ELR at 20073.

139. Id. at 77, 30 ELR at 20074 (internal footnote omitted). As previously stated, this "holding" makes no sense. A defendant in a contribution action is not being threatened with liability for "all response costs." It is not, in other words, subject to joint and several liability. It is subject to an order requiring the defendant to reimburse the plaintiff in an amount to be determined in accordance with the "equitable factors" standard of § 113(f)(1). The second sentence of the paragraph recognizes this point but the first does not.

140. Id. at 78, 30 ELR at 20074.

141. Id.

142. Id. The court cites Licciardi v. Murphy Oil Co., 111 F.3d 396, 27 ELR 21045 (5th Cir. 1997) in support of this proposition. As previously explained, see supra notes 84-88 and accompanying text, the issue in Licciardi has nothing to do with "equitable factors" analysis in a contribution action. The issue in Licciardi was whether the plaintiff's response costs had been caused by a release.

143. 191 F.3d at 78, 30 ELR at 20074.

144. Id. at 79, 30 ELR at 20074.

145. Id. at 79-80, 30 ELR at 20074-75.

146. Id. at 79, 30 ELR at 20074.

147. Id.

148. Id. at 80-82, 30 ELR at 20075. The court first noted that there was some "slight confusion as to whether the trial judge's decision for these defendants was based on Rule 50 (judgment as a matter of law) or Rule 52 (findings of fact and conclusions of law in support of a judgment on the merits)." Id. at 80, 30 ELR at 20075. The court then concluded that it was "sufficiently clear that the court intended to employ judgment as a matter of law as its principal lens for viewing plaintiffs' claims." Id.

149. Id.

150. See supra notes 35-62 and accompanying text.

151. 191 F.3d at 77, 30 ELR at 20074 (emphasis added).

152. Id. at 78, 30 ELR at 20074.

153. Id. at 79, 30 ELR at 20074.

154. Id. at 72, 30 ELR at 20071.

155. Id. at 79, 30 ELR at 20074.

156. Id.

157. Id.

158. As we have seen, see supra notes 14-24 and accompanying text, NETT's view was that a plaintiff in a contribution action must prove that a defendant caused the plaintiff to incur response costs.

159. The district court's "minimum standard of significance" test provides an explanation why such evidence would support the award of judgment to the defendant. Under the district court's test, one of the equitable factors that a court may consider, on a motion for summary judgment or motion for judgment as a matter of law, is whether the cost of conducting a full equitable allocation hearing outweighs any likely allocation to the defendant. See explanation of the district court's ruling supra notes 35-62 and accompanying text.

160. 191 F.3d at 80, 30 ELR at 20075.

161. Id. at 81, 30 ELR at 20075.

162. Id.

163. So, for example, in Acushnet, one basis on which Ottaway moved for judgment was its assertion that SLG had not presented evidence that it had disposed of hazardous substances at the Sullivan's Ledge facility and thus it was undisputed that Ottaway was not a liable party under § 107(a)(3), the basis on which SLG alleged that Ottaway was liable.

164. As explained supra notes 109-21 and accompanying text, a defendant in a contribution action cannot invoke, in support of a motion for summary judgment, a lack of causation divisibility argument since the question of divisibility is not presented in a contribution action where liability is not joint and several.

165. See supra note 127.

166. See supra notes 35-62 and accompanying text for the district court's reasoning.

167. In Kalamazoo River Study Group v. Menasha Corp., 3 F. Supp. 2d 799 (W.D. Mich. 1998), rev'd, 228 F.3d 648 (6th Cir. 2000), the district court granted summary judgment to defendants in a CERCLA contribution action. The court suggested that it was relying, at least in part, on the "threshold-of-significance standard" adopted by the district court in Acushnet. 3 F. Supp. 2d at 806. On appeal, the Sixth Circuit, in reversing, criticized the district court's reliance on the Acushnet "threshold-of-significance standard." 228 F.3d at 655-57. Specifically, the Sixth Circuit characterized the district court's reasoning as follows:

The district court in the instant case suggested … that CERCLA contribution actions may be subjected to a different liability standard than cost recovery actions under § 107. Rather than holding that causation is an element of liability under § 107, … the district court seems to have "fashioned the 'threshold of significance' standard to impose a causation requirement only on parties seeking contribution under Section 113(f)." Br. of Appellant at 37.

Id. at 656.

As we have seen, see supra notes 35-62 and accompanying text, the Acushnet "threshold of significance" standard is not a standard that imposes a causation requirement on parties seeking contribution under § 113(f). Yet the Sixth Circuit is correct in stating that the district court in Kalamazoo River seemed to treat it as if it were. Thus, in holding that the district court erred in imposing a causation requirement on parties seeking contribution, the Sixth Circuit did not reject the Acushnet "threshold of significance" standard, as properly understood; rather, the court rejected the district court's incorrect understanding that the "threshold of significance" standard imposes a causation requirement on parties seeking contribution under CERCLA.

The Sixth Circuit went on to consider whether the district court's ruling in granting summary judgment on equitable grounds:

It has been suggested that the district court's decision could be affirmed on the basis that the court's "threshold of significance standard," rather than reflecting a determination as to liability, may simply have been a determination based on the exercise of its equitable powers under § 113(f) that, even if the defendants were liable, they should nevertheless bear a zero allocation of costs.

Id. at 657. The court rejected this basis for affirming the district court because the district court had granted summary judgment at a time when it was considering only the liability phase of a bifurcated trial—that is, the district court had deferred resolution of the allocation of response costs until after there had been a resolution of the defendants' liability. Thus, the Sixth Circuit concluded that it could not affirm the district court's ruling on equitable grounds because "any exercise of its [the district court's] equitable powers at this first [liability] phase of a bifurcated trial would have been improper." Id. at 657-58.

Thus, though the Sixth Circuit in Kalamazoo River speaks disapprovingly of the Acushnet district court's "threshold of significance" standard, what it disapproves is not the standard itself but rather the incorrect interpretation of that standard by the Kalamazoo district court. And, in rejecting the suggestion that the district court's ruling could be affirmed on equitable grounds, the Sixth Circuit was not rejecting the Acushnet "threshold of significance" standard as an appropriate equitable ground for granting summary judgment; rather, the court was simply rejecting any equitable ground for granting summary judgment in a case that was still in the liability phase of a bifurcated trial.

In the Kalamazoo River decisions, both the district court and the Sixth Circuit make frequent reference to the Acushnet district court's "threshold of significance" standard. What is striking, however, is that neither the district court nor the Sixth Circuit undertakes a careful examination of the precise nature of that standard.