California v. Summer del Caribe

No. C-89-3754 SAW (N.D. Cal. June 30, 1992)

The court holds that solder dross, a by-product generated in manufacturing cans, is not a solid or hazardous waste regulated under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The court holds that solder dross does not fit the U.S. Environmental Protection Agency's (EPA's) definition of "solid waste" under the "accumulated speculatively" category. Nor is solder dross a "hazardous waste" under CERCLA, because under that definition, a material cannot be a hazardous waste unless it is a solid waste. The court holds that the defendants are not liable for delivering solder dross for reclamation.

Counsel for Plaintiff
Susan Fiering, Deputy Attorney General
Attorney General's Office
2101 Webster St., Oakland CA 94612
(510) 286-3892

Counsel for Defendants
Sarah Flanagan
Pillsbury, Madison & Sutro
P.O. Box 7880, San Francisco CA 94120
(415) 983-1000

[23 ELR 20298]

Weigel, J.:

Memorandum and Order

Plaintiff sues defendants for the cost of an environmental cleanup under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§ 9601 et seq. ("CERCLA"). Defendants are seventeen can companies, a metal reclamation facility, two individual officers of that facility, and a corporation that operated a site adjacent to the facility. This Court stayed the action against sixteen of the can companies pending the results of an investigation into the nature and extent of contamination at the site in question. Plaintiff now moves for summary judgment against Castle & Cook, the can company as to which no stay was issued. Plaintiff seeks a declaration that by selling a manufacturing by-product containing hazardous material to the reclamation facility, Castle & Cook "arranged for [the] disposal or treatment . . . of [a] hazardous substance[]" and is therefore liable for the costs of the cleanup under CERCLA § 107(a)(3), 42 U.S.C. § 9607(a)(3).¹ Castle & Cook ("defendant") cross-moves for summary judgment on the ground that the by-product is not a substance for which liability attaches under the relevant statutory definitions.

I. Facts

Defendant is an Hawaiian corporation that grows and cans pineapple through a subsidiary, Dole Packaged Foods. In the process of manufacturing its cans defendant generates a by-product known as "solder dross." This solder dross consists of one-third tin and lead that can be recovered and reused as solder. The remaining two-thirds are an unusable material containing high levels of lead and zinc compounds. From 1975 to mid-1982 defendant sold its solder dross to Summer del Caribe ("Summer"), which operated a reclamation facility in Richmond, California. Summer melted the dross sold to it by defendant and other can companies to recover and resell the reusable portion. The unusable remainder of the dross was placed into drums and stored in drums on the site of Summer's facility. The drums remained on the site from 1975 through 1982. By late 1982, the drums were corroded and the dross was leaking onto the site. Summer therefore dug a pit on the site and buried a portion of the dross in the pit. Plaintiff learned of Summer's storage and burial of the drums in late 1982. Test samples taken by plaintiff in December 1982 showed that the drums of dross inside and outside the pit contained hazardous levels of zinc and lead. Plaintiff eventually spent over $1.6 million in partially cleaning up the site. The site has not yet been fully cleaned.

II. Discussion

Cleanup liability under CERCLA attaches to any party who "arranged for disposal or treatment . . . of hazardous substances" that party owned or possessed. 42 U.S.C. § 9607(a)(3)-(4). "Hazardous substances" under CERCLA include, inter alia, any substances so designated by the Administrator of the Environmental Protection Agency ("listed" hazardous substances) and any waste having certain characteristics set out and defined by EPA. 42 U.S.C. § 9601(14); see 40 C.F.R. §§ 261.20 et seq. "Disposal" and "treatment" are defined in CERCLA, 42 U.S.C. § 9601(29), by reference to the definitions of those terms in the Solid Waste Disposal Act, 42 U.S.C. §§ 6901 et seq. ("SWDA"). "Disposal" is defined as:

the discharge, deposit, injection, dumping, spilling, leaking, or placing of any solid waste or hazardous waste into or on any land or water so that such solid waste or hazardous waste or any constituent thereof may enter the environment or be emitted into the air or discharged into any waters, including groundwaters.

42 U.S.C. § 6903(3) (emphasis added). "Treatment" is defined as:

any method, technique, or process, including neutralization, designed to change the physical, chemical, or biological character or composition of any hazardous waste so as to neutralize such waste or so as to render such waste nonhazardous, safer for transport, amenable for recovery, amenable for storage, or reduced in volume.

42 U.S.C. § 6903(34) (emphasis added). "Arranged" is an undefined term.

Defendant does not dispute that the solder dross stored at the Summer site contained some hazardous material. Plaintiff's investigations of samples taken from the site showed that the dross exhibited the requisite degree of toxicity to be considered hazardous under the CERCLA definition and corresponding regulations.² Defendant contends, however, that since the terms "disposal" and "treatment" are defined by reference to SWDA, and not CERCLA, only those substances qualifying as "solid waste" or "hazardous waste" under SWDA can create disposal or treatment liability under CERCLA. For this proposition defendant relies on the opinion of the Ninth Circuit in 3550 Stevens Creek Associates v. Barclays Bank of California, 915 F.2d 1355, 1361-62 [21 ELR 20011] (9th Cir. 1990), cert. denied, 111 S. Ct. 2014 (1991). The Stevens Creek court ruled that the placement of insulation that contained asbestos in a building did not render the builder liable under CERCLA for "disposal of a hazardous substance." The court assumed that the insulation was a "hazardous substance" under CERCLA but ruled that the SWDA definition permitted CERCLA liability only for the disposal of "solid waste or hazardous waste," not for building materials. Id. at 1361. The court also held that the use of a substance to construct a building did not constitute a "disposal" under the SWDA definition, and rejected the argument that CERCLA's use of the term "hazardous substance" overrode the SWDA definition of "disposal" limited to "hazardous waste." Id. at 1361-62. The decision focused equally on what constitutes "disposal" and what constitutes "waste" for liability under CERCLA § 107(a)(3).

Defendant urges that under Stevens Creek only the disposal of those substances designated as "solid wastes" or "hazardous wastes" and regulated under the SWDA can create CERCLA liability. A close reading of the Stevens Creek opinion and its context suggests that the Ninth Circuit's decision did not intend or require such a far-reaching implication; the essence of the ruling is that "disposal" means the discarding of a substance rather than its use or sale. In reaching its decision, however, the court did apply the SWDA definitions of "waste" to find that the substance at issue — and not just how it was used — exempted the builder from liability under the statute. 915 F.2d at 1362. Thus, while the Stevens Creek court did not explicitly rule that only those wastes regulated by SWDA can create disposal liability under CERCLA, the court implicitly held that only those substances defined as wastes under SWDA can create such liability. CERCLA itself, moreover, defines "hazardous waste" by reference to the SWDA definition. 42 U.S.C. § 9601(29). Plaintiff's insistence that CERCLA liability is not circumscribed by the SWDA definitions relies entirely on cases from other jurisdictions, most of which treat different CERCLA provisions. This Court therefore has no choice but to follow both the Ninth Circuit and the apparent intention of CERCLA and determine [23 ELR 20299] whether the solder dross was a "solid waste" or "hazardous waste" under the provisions of SWDA and relevant EPA regulations.³

"Solid waste" is defined in SWDA as "any garbage, refuse, sludge . . . and other discarded material." 42 U.S.C. § 6903(27); Stevens Creek, 915 F.2d at 1361. Regulations issued by EPA define "discarded" material as any material that is "abandoned, . . . recycled, . . . or inherently wastelike." 40 C.F.R. § 261.2(a)(2); Stevens Creek, 915 F.2d at 1361. Plaintiff argues that defendant's solder dross fits this definition as material that was "recycled" since, during the years the solder dross was kept by defendant prior to its sale to Summer, it was "accumulated speculatively" under the meaning of 40 C.F.R. § 261.2(c)(4). This argument fails. By definition, materials that are "accumulated speculatively" no longer fit that category once they are "removed from accumulation for recycling." 40 C.F.R. § 261.1(c)(8). Defendant's alleged liability arises out of its delivery of solder dross to Summer for reclamation. The contamination occurred at the Summer site. Any prior accumulation of the solder dross at defendant's premises would not make the material at the Summer site "solid waste" under the "accumulated speculatively" category.⁴

Nor is the solder dross "hazardous waste" under the statutory definition. The SWDA defines hazardous waste as that subset of solid waste that poses a particularly great threat to human health or the environment. 42 U.S.C. § 6903(5); Stevens Creek, 915 F.2d at 1361. As noted above, CERCLA expressly adopts that definition. 42 U.S.C. § 9601(29). Under that definition a substance cannot be a hazardous waste unless it is a solid waste. The court has just found that solder dross is not a solid waste under the relevant definition and regulations; it therefore cannot be a hazardous waste. Solder dross is thus not a hazardous substance for which liability can attach under CERCLA § 107(a)(3).

The court is not unmindful of the broad remedial purposes of CERCLA and the license for liberal construction of its provisions. See, e.g., Wilshire Westwood Associates v. Atlantic Richfield, 881 F.2d 801, 804 [19 ELR 21313] (9th Cir. 1981). Application of the provisions cannot, however, fly in the face of statutory definitions, administrative regulations, and Ninth Circuit precedent interpreting both. Moreover, evidence submitted by defendant suggests that EPA itself never considered solder dross to be a solid waste or hazardous waste. In its preamble to the final rule, EPA stated that "only sludges and by-products listed in 40 C.F.R. § 261.31 and 261.32 are solid waste when reclaimed. 50 Fed. Reg. 614 (1985) (emphasis added). It is undisputed that defendant's solder dross was a "by-product" under the relevant definition.⁵ It is also undisputed that defendant sold its solder dross to be "reclaimed,"⁶ and that solder dross is not listed in the specified sections. Solder dross is thus not a solid waste under this EPA pronouncement, which should be accorded great deference. See Wickland Oil Terminals v. Asaro, Inc., 792 F.2d 887, 891 [16 ELR 20754] (9th Cir. 1986). As a by-product sent for reclamation solder dross is, in fact, expressly excluded from the definition of a solid waste under 40 C.F.R. § 261.2(c)(3).⁷

Any lingering doubt on the issue is resolved by reference to statements by EPA officials about solder dross. A letter written by an EPA official in 1985 in response to a specific inquiry about the regulatory status of solder dross states:

[S]older drosses are defined as by-products under the hazardous waste rules. . . . Since unlisted by-products (which this material is) sent for reclamation are not defined as solid waste, these materials are not hazardous wastes.

Two declarations by former directors of EPA's Office of Solid Waste confirm that solder dross is not a solid waste or hazardous waste under EPA regulations.⁸ Recent statements by the EPA assistant administrator who manages the national CERCLA program confirm this conclusion. See Clay Letter of 12/3/91; cf. Example No. 10 to 1986 Guidance Manual (Exhs. A & B to Krajewski Decl.).

In sum, all the available evidence compels the conclusion that the solder dross defendant sold to Summer was neither a solid waste nor a hazardous waste under SWDA and corresponding regulations. According to Stevens Creek, defendant therefore cannot be liable under CERCLA § 107(a)(3).⁹

Accordingly,

IT IS HEREBY ORDERED THAT:

(1) Plaintiff's motion to substitute plaintiff is GRANTED;

(2) Plaintiff's motion to strike is DENIED;

(3) Plaintiff's motion for summary judgment is DENIED;

(4) Defendant's motion for summary judgment is GRANTED.

1. Plaintiff also moves, pursuant to Federal Rule of Civil Procedure 25(c), to substitute the Department of Toxic Substances Control as plaintiff in place of the Department of Health Services. Since the proposed substitute plaintiff is the successor in interest to a division of the original plaintiff, and the motion is unopposed, the court finds the substitution warranted and grants the motion.

2. Defendant does argue, however, that plaintiff's testing of the site did not follow the appropriate EPA requirements, that plaintiff tested dross samples that were not necessarily those sent to Summer by defendant, and that the relevant toxicity standard did not apply to solder dross.

3. SWDA was amended by the Resource Conservation and Recovery Act of 1976 ("RCRA"). The two titles "SWDA" and "RCRA" are often used interchangeably. The relevant administrative regulations refer to RCRA.

4. Plaintiff also proposes that the solder dross fits the definition of solid waste that existed in the regulations in 1980, at the time defendant was still sending its dross to Summer. See 40 C.F.R. § 261.2(a) and (b) (1980). Under those same regulations, however, reclaimed or recycled by-products qualified as solid waste only if they were "sometimes discarded." Id. § 261.2(b)(3) and (c). Plaintiff has presented no evidence that defendant "sometimes discarded" the solder dross during the years it sold it to Summer. Moreover, the 1980 definition of solid waste was only an interim final regulation. See 45 Fed. Reg. 33094 (1980). In 1983, EPA published the proposed changes [sic] its interim final definitions of solid waste and hazardous waste. 48 Fed. Reg. 14472 (1983). In 1985, the proposed rule became final. 50 Fed. Reg. 614 (1985). It is the final rule on which defendant relies, and which the court finds most probative.

5. "A 'by-product' is a material that is not one of the primary products of a production process and is not solely or separately produced by the production process. Examples are process residues such as slags or distillation column bottoms. The term does not include a co-product that is produced for the general public's use and is ordinarily used in the form it is produced by the process." 40 C.F.R. § 261.1(c)(3).

6. "A material is 'reclaimed' if it is processed to recover a usable product, or if it is regenerated. Examples are recovery of lead values from spent batteries and regeneration of spent solvents." 40 C.F.R. § 261.1(c)(4).

7. Figure 1 of Appendix I to 40 C.F.R. § 260, cited by plaintiffs, apparently contradicts this regulation by defining all by-products as solid wastes unless they are specifically excluded under § 261.4(a). Since Figure 1 purports to represent § 261.2, the court can only assume that the diagram and its explanatory preamble are in error on this point.

8. Plaintiff moves to strike these declarations since they offer legal conclusions. Expert opinions and conclusions regarding ultimate issues of fact and legal principles are, however, fully appropriate and admissible. See Federal Rules of Evidence 702 and 704; Securities Investor Protection Corp. v. Vigman, 908 F.2d 1461, 1469 (9th Cir. 1990), reversed on other grounds, Holmes v. Securities Investor Protection Corp., 112 S. Ct. 1311 (1992).

9. Defendant also argues that by selling its solder dross to Summer for reclamation, it did not arrange for "disposal" or "treatment" of the dross under the meaning of § 107(a)(3). In light of its disposition the court need not reach this argument.