*1 cost and com- relating economic evidence will also be responsibility carrier

mon by the Board. to and considered

presented tar- rejection petitioners’ Board’s considera- precluded such would

iffs the five reason

tion, it is Ac- challenged are unlawful. herein

orders vacated and this orders are

cordingly, these Aeronautics the Civil remanded to is

case Federal under the for such action

Board opin- with this Act as consistent

Aviation

ion. ordered.

So et OIL COMPANY

AMOCO

al., Petitioners PROTECTION

ENVIRONMENTAL

AGENCY, Respondent.

No. 74-2131. Appeals,

United States Court Circuit.

District Columbia 8, 1975.

Argued Dec. July

Decided July

As Amended jurisdictional hand, pealed, the CAB’s determination the other economic or common-carrier- upheld.) responsibility With all economic and common- considerations are raised fu- removed, carrier-responsibility filings, would, held, considerations the CAB ture as we have longer required pro- powerless except through proce- no would be to act the Board 1002(d) rejec- safety regardless section because its section ceed under dures of of its any event, longer legisla- jurisdiction. would involve the tion orders no for the moment a required hearing rules and af- tive determination of to decide at least the CAB regard fecting responsibility/safety jurisdic- carriers’ safe- rates. With carrier common legislative ty, question all such determinations would raised if for noth- footnote If, completely ing of FAA/DOT. hands else. *2 D.C.,

Washington, with whom Wallace H. Gen., Johnson, Atty. Zener, Asst. V. Robert E.P.A., Counsel, Gen. Edmund B. Clark and Zagone, N. Attys., Dept, of Raymond Jus- D.C., tice, Washington, were on the brief respondent. for WRIGHT, Before MacKINNON and ROBB, Judges. Circuit the court Opinion for filed Circuit Judge MacKINNON.

Dissenting opinion filed by Judge Circuit WRIGHT. J. SKELLY MacKINNON, Judge: Circuit We here review for the time regu- second promulgated lations Administrator Agency of the Environmental Protection (EPA) protection for the catalytic con- pursuant verter emission control devices 211(c)(1)(B)of the section Clean Air Act of 1970, provides: (c)(1) The may, Administrator from time on the to time basis of information (b) under subsection of this sec- obtained or other information available to tion him, by prohibit control or regulation, manufacture, into introduction com- merce, sale, offering any or sale of for use in a motor fuel or fuel additive engine or motor vehicle vehicle (B) products if emission fuel or impair significant will fuel additive performance degree emission system is in gen- device or use, the Administrator finds eral or which developed point where has been in a general it would be in time reasonable regulation promul- to be were such use gated. 1857f-6c(c)(l)(B) (1970). Be- U.S.C. op- lead interfere with the cause emissions Davis, D.C., Washington, James F. catalytic converters now in- eration D.C., Simon, Washington, whom William cars,1 on most new the Administra- stalled brief, petitioners.

was on the 1973 issued January tor on Shawaker, Atty., requiring of Jus- the sale unleaded Dept, Edward J.

tice, Carothers, E.P.A., Those reg- A. those devices.2 Atty., protection and Leslie (Jan. Fed.Reg. EPA, 2. 38 1254-56 1. See Amoco Oil Co. v. published proposed regulations had been on n.3, 166 & F.2d & n.3 23, 1972, February Fed.Reg. re- sections branded an irrebuttable challenged by presump- were ulations here, of refiner finers, including the even petitioners fault: if prove (hereafter I) Amoco could contamination resulted v. EPA3 in Amoco Oil an unforeseeable act of vandalism respect by one upheld in all but unpreventable party from an a third Amoco I court May 1974. The court *3 by of contract a distributor or breach a of the first liability the sections invalidated he would liable.5 jobber, still be held liability upon imposed which a regulations (leaded) of I, for sales contaminated Following refiner the in decision Amoco the irrespec- a retailer by as unleaded gasoline Administrator redrafted the section the refiner.4 In regulations the actual fault of the and reissued it.6 It tive of of subject found that reaching such conclusion we the this section which is the of this incorporated into improperly appeal.7 EPA had the Except provided solicited from paragraph which time comments were lation. as in section, Hearings public. held in (b)(2) were thereafter three this shall of the refiner be appear regulations irrespective The final 40 cities. deemed in violation of whether (1975). refiner, retailer, part distributor, any 80 C.F.R. or other purchaser-consumer regulations wholesale or em- at here must be distin- The issue refiner, distributor, agent any ployee retailer, guished or those has from which issued purchaser-consumer Act, 211(c)(1)(A) or Air wholesale of the Clean under section )(A) (1970), protect permitted 1857f-6c(c)( have caused or violation. 1 § 42 U.S.C. trade, (Dec. 6, (2) corporate, Fed.Reg. public or health. 38 33741 Where brand gasoline any regulations, 1973). limit latter which of a refiner or of its mar- The name keting appear gasoline, of all not on lead content elsewhere subsidiaries does by upheld displayed pump this in a divided been Ethyl Corp. court vote. stand and at the retail is not EPA, U.S.App.D.C. purchaser-consumer or wholesale fa- outlet sold, (1976). cility gasoline F.2d from which was dis- sale, pensed, retailer or offered for or (1974). U.S.App.D.C. 501 F.2d 722 3. 163 purchaser-consumer any and wholesale dis- regulations which there under review person gasoline who tributor sold that con- opinion. an are set out as addendum to that Id supplied storage in the which tained tank at 501 F.2d 753-57. at pump at of the violation the time shall 80.23(a)(1), (a)(2) (1973). §§ 4. 40 C.F.R. be deemed violation. any (b)(1) In in which a retailer or case at 501 F.2d at 748. gaso- any purchaser-consumer wholesale and or would be in line refiner distributor viola- Fed.Reg. (Dec. 5, 1974); Fed.Reg. 6. 39 (a)(1) (2) paragraphs under or this (Dec. regulation The new section, purchaser- the retailer or wholesale appears in 40 C.F.R. 80.23 The re- § if he can shall not be demon- consumer liable proposed vised section was first a by caused that the violation strate was I, our month before Fed.Reg. decision in Amoco see 39 employee agent. him or or his (April 1974), because the any a retailer or In case in which petitioners’ “EPA has that certain of concluded purchaser-consumer, (if a reseller wholesale objections Amoco are and [in valid should I] gasoline any any), refiner would recognized provision apportion- (a)(1) paragraph violation under sec- liability.” ment of The Amoco I court Id. took tion, the refiner not be deemed in viola- shall proposed revisions, note of the but observed tion if he can demonstrate: litigation.” were “not before us in this (i) by That the not caused was violation n.3, at 189 F.2d employee agent; him or his or n.3. (ii) by That the was caused violation act Liability 80.23 (other for violations. in violation part), than the Act or this law vandalism, Liability sabotage, paragraph (a) or an act violations of or commingling 80.22 shall be deliberate leaded and determined as unlead- follows: (a)(1) trade, gasoline, corporate, ed Where or whether or not such acts are brand gasoline any jurisdiction name keting a refiner or of its violations law where mar- appears pump requirements subsidiaries on violation of the of this oc- displayed curred, stand or is at the retail outlet or or purchaser-consumer facility (iii) by wholesale That the from violation was caused sold, gasoline dispensed, which the supplied by or action of reseller or a retailer sale, pur- reseller, offered for chaser-consumer, the retailer or wholesale such in violation of a contractual (if any), undertaking imposed the reseller by the refiner on such gasoline designed action, such refiner shall be deemed in vio- prevent reseller such case, remaining issue in the character- two argu- made originally petitioners par- section; “retail dealer” issue ized as the but against the new ments ties, requires again this court to consider argument, our following oral appeal which a be held extent parties agreed met and suggestion, of retail for the actions dealers who liable a modification arguments.8 products. those sell mooted one of despite the refiner efforts demonstrate violation was not reasonable compli- employee agent. periodic sampling) (such to insure him or his or as obligation, (e)(1) or contractual case which a or his ance with (iv) agent purchaser- was caused employee the violation That or a wholesale or directly supplied employee agent of a retailer who action by consumer or or intro- reseller), (and gasoline pump leaded from a duced sold, substantial- gasoline assets facilities dispensed, whose ly leaded refiner, leased, owned, or controlled sale, into a which is motor vehicle offered undertaking im- of a contractual in violation posed equipped with a tank filler inlet de- *4 designed by retailer on such the refiner gaso- signed introduction unleaded for the of action, despite prevent and reasona- such to line, only purchaser- retailer or wholesale the by (such periodic as the refiner ble efforts shall be deemed in violation. consumer compliance sampling) with such to insure (2) purchaser- a retailer or a wholesale If obligation, or contractual establishes that the conduct re- consumer by (v) was caused the the violation That paragraph (e)(1) in of this section ferred to subject ato contract of a distributor action response requirements was of a transportation refiner for the with (such emergency gaso- as the bona fide when distributor, retailer or a from a terminal to empty line of a vehicle almost and no tank purchaser-consumer, in violation wholesale gasoline is available within a sever- unleaded imposed undertaking by the of a contractual radius), pur- al the retailer or mile wholesale designed pre- to on such distributor refiner will not chaser-consumer be deemed viola- action, despite reasonable ef- such and vent however, Provided, tion: That the amount of (such periodic by as sam- the refiner forts pling) gasoline which into leaded was introduced compliance with such con- to insure the was limited to no more than was vehicle obligation, or tractual reasonably required to alleviate the circum- (vi) by the was caused a That violation particular emergency of the situa- stances carrier) (such a common not as distributor subject tion. with the to a contract refiner but transportation gaso- engaged by him for objected provisions 8. Petitioners the new distributor, a from a terminal to retailer line required refiner, regulations which in order to a purchaser-consumer, despite or wholesale prove liability, affirmatively that avoid strict (such by efforts the refiner as reasonable by party. “was caused” the violation another equipment) inspection specification or 80.23(b) (2) (ii) (vii), supra § See C.F.R. — action, prevent such or provides note 7. Because the Clean Air Act (vii) occurred That the violation at a liable, that are to be held 42 U.S.C. “violators” purchaser-consumer facility: Pro- wholesale (1970), 1857f-6c(d) argued that was § however, vided, pur- if such wholesale That statute not allow the Administrator does reseller, supplied by a chaser-consumer was impose who fails to absolute on one must that the refiner demonstrate the viola- prove he is not a There- that “non-violator.” prevented by not been such tion could fore, petitioners regula- maintained that compliance with a contractual un- reseller’s tions be revised make it clear that the should dertaking imposed by the refiner on such proof with burden of lies the Administrator. provided paragraph (b)(2)(iii) reseller as court, suggestion parties At of this this section. argument following oral and drafted the met any (c) in which a In case retailer or following additional subsection which reseller, purchaser-consumer, a wholesale agree disposes proof’ of the issue in “burden of any gasoline be in refiner would violation and satisfactory to a both sides: manner 80.23, (a)(1) paragraph §of reseller under (ii) through (vi) (viii) subparagraphs In in violation if shall not deemed he can hereof, the term “was caused” means that that the violation demonstrate was reasonably by must the refiner demonstrate by employee agent. him or caused or by showings specific direct or circumstantial (d) case in which retailer or that was caused or purchaser-consumer any gaso- evidence violation and wholesale by caused another. must have been be in violation under line distributor would paragraph section, appear (a)(2) will in 40 C.F.R. The new subsection distribu- 80.23(b)(2)(viii). if not be deemed violation he can tor will acts “retailer dealer” issue centers of contamination on the of the (b)(2)(iv) reg provisions subsection around retailer under C.F.R. ulation, 80.23(b)(2)(iv) (1975), 40 C.F.R. 80.23(b)(2)(ii) 80.23(e) (1975).10 or §§ escape gen the refiner allows regulation by under means liability imposed by 80.23(a) section eral negli- avoid refiner can directly-supplied retail acts of distribu acts of his gent directly-sup- or inadvertent products its if it can demonstrate tors retailers, however, prove is to plied under question violation in was not that (iv) 80.23(b)(2)(i) §§ 40 C.F.R. employee agent, it or or by and: caused following are true: caused violation was not (1) (iv) That the violation caused agent; employee who is supplied the action a retailer (2) violation was (and directly by the refiner (non-lessee) of an action reseller), and whose assets facilities retailer; and owned, leased, substantially or con inwas viola- (3) retailer’s action refiner, trolled in violation of a undertaking im- a contractual undertaking imposed by contractual upon the retailer by the refiner posed designed pre action; prevent such designed to action, despite vent such reasohable (such efforts as periodic reasonable made refiner had sampling) compliance insure with such compliance insure efforts obligation contractual obligation. contractual *5 (Emphasis added). supra. note 7 See to objection regulation that, this new is Our petitioners object to provision which is the assuming the fault even of the lessee can be the phrase allows refiner escape not we do believe that proved, lessee’s liability only if it can show that the guilty imputed can be to the refiner negligence is one “whose retailer assets facilities are The second element which all cases. must owned, leased, substantially or con- (b)(2) under section in order for proved by the trolled Under provi- refiner.” this escape liability is that the refiner sion, always would be liable for independent was caused an violation the actions a retailer who his leases Thus, retailer. if condition (non-lessee) refiner, station from a unless one of the because retailer’s is met facilities exceptions special ap- refiner, escape to him the are leased petitioners object plied.9 this blan- (b)(2)(iv) can provisions of subsection never imposition liability as ket mandated upon if the apply even refiner has imposed (b)(2)(iv). agree subsection We that undertaking a strict contractual language goes imposing far in liability too avoid contamination every and made hu- proof of fault and that it without should be possible to compliance insure man effort regulation. from the stricken result is arbitrary. it. Such Initially, it should be made clear that we are concerned capricious here with the of the results11 In defense die-. negligent contamination, rule, for since the re- this EPA tated the dissent observes finer is able to escape liability for deliberate itself, striking “this, ground is no that actually 80.23(b)(2)(ii), 80.23(e) 9. See who controls §§ C.F.R. the retailer’s facilities? (1975), supra initially the refiner note 7. that installed The fact certainly equipment dispositive, pre- argues “the The dissent lessee has it, owner of the refiner “remains the whether opportunities cious few to cause non-deliberate charged continuing depend with its care” will —negligent—contamination. The refiner both agree- terms of individual lease gasoline station controls deliveries of ment. maintains substantial tank truck . Act, equipment that will control over the handle the 11. Under the Administrative Procedure 706(2) (1970), we are to “hold unlaw- at the . . Dissent U.S.C. station^ -, U.S.App.D.C. agency This", at ful set aside 543 F.2d at actions 28Ó. course, very (A) arbitrary, point capricious, issue here: assumes found to abuse a blanket impose liability. ed” to Employers use regulation. down —to nothing in statutory grant There is example of vicarious lia most common responsible every day power “by regulation Administrator held bility —are prohibit manufacture, control or even where employees torts of [to] commerce, into steps injury.” offering to avoid the possible introduction taken at ---, sale, any or sale fuel or fuel additive for Dissent argued It 543 F.2d at 270-280. in motor vehicle or motor vehicle use impute liability ,” is entitled to engine . . . U.S.C. 1857f- ground on the that “vica generally 6c(c)(1), expressly or impliedly autho imposed . . because liability is rious alter settled law rizes him to between govern properly authorized some respective and lessee as their re lessor court, legislature, or administrative in tort12 so as to make sponsibilities ment — that such an alloca determined body liable for lessees as —has society’s serve responsibility will tion of though they were mere subservient employ ends,” dissent single fact a refiner may ees. added), (emphasis and that 543 F.2d at certain real estate and appurte have leased is, doubt, beyond properly au the “EPA to an individual who sells prod nances body choose the standards thorized not, more, without any ucts does furnish purposes will best achieve legal basis for logical imposing blanket Clean Air Act.” Dissent 177 U.S.App.D.C. upon the owner for responsibility offenses at ---, (emphasis F.2d at 282 acts committed or tortious the lessee on added). authority in the But where is the In the premises. absence indica statute to alter the settled law relevant specific of a intent on the legal responsibility establishes the tort,”13 Congress to create a “new the tra true, course, parties? It is the instant common law rules of ditional vicarious lia imposed despite is often apply. bility must Isbrandtsen Co. v. John to whom party fact that the son, 779, 783, 1011, 1014, U.S. S.Ct. possible imputed steps has taken all (1952). The authority given 96 L.Ed. 1294 gen But that injury or harm. avoid by Congress to the EPA did not vest the *6 the EPA’s justify does not action eralization power supplant with to those EPA rules here, goes since the Administrator’s rule well the doctrine liability. of strict There the bounds of traditional vicarious beyond body defined of law is a well which deter liability. negligence may imputed when be mines and party one to another it is there starting point, a it should be not As judge this law that we must look to “properly EPA is not authoriz- fore to the ed that discretion, negligent nothing otherwise not accordance of contamination. There is new justifies disposi- the law.” That standard with tion we merchandising— tort. It is as old as about this case. make of appears it and from time to time new forms. dissenting opinion radically the would That lightly and Generally, responsible for the landlord is not change long implicitly established law is injuries conditions which or harm caused at---(cid:127), admitted 177 F.2d pos- develop the tenant after or are created change infra. The is mas- premises) (and over the session thus control legislative Congress transferred; sive and character and if re- nor is the landlord has been impose liability sponsible carries activities which the tenant to such wants without fault it W. Pros- the land after the transfer. proper way; can be authorized in a gress but Con- ser, (4th also ed. See Law of Torts 63§ existing has not done so in the act. How (Second) of Torts 355-56 §§ 2 Restatement liability imposing for another’s tort on one who premises (1965). often a the is Control over may operate “society’s fault without to serve 360; Restatement, supra, at § factor. 2 decisive ends,” dissent 177 Steffen, Independent and the Good Contractor 281, explained. F.2d at is not Actually, the 501, Life, 2 U.Chi.L.Rev. objective strengthen is to arbitrary real the agency hand ease dissenting colleague speaks its a “new burden of of 13. Our penalties. collecting really attempts bring to he tort” but what tort, e., liability for an old i. about is a new lessee, regu- vicariously the landlord is not liable legality liability of the EPA’s lations. which occur thereon unless he accidents premises.18 has control over the retained Generally, rule, here Ignoring ancient non-negligent person by a imposed upon regard- hold lessor-refiners seeks to liable closely integrated relation reason of some relationship less the true nature of their of negli and the ship existing between him In the complex with their retailers. gent party.14 The essence of such relation us, situation difficult now before we are person negli ship is that the to whom raise prepared general as a rule imputed gence sufficient control over liability; complete bar on the negligent party justify the acts of the hand, do other we feel it means vicari- responsible that he is the conclusion imposed ous cannot be on all refin- happened.15 what facts and circum negligent ers for and all contamina- each case must be stances of examined indi regardless of tions which occur the circum- vidually to determine whether relation degree of stances and control exerted ship in question necessary exhibits the de over imputation retailer-lessee. gree justify negligence from one that a sells party to other. mere fact a refiner’s For example, court must decide in em products and leases his facilities from the ployment negligent situations whether the compel- themselves such refiner are employee, party negligence was an whose ling of control refiner as to evidence may be imputed employer, his imputation conclusive justify the refiner independént contractor, for whose actions negligence. company Oil retailer’s no will to the employer.16 attach required are not to follow agreements lease Similarly, details of an relation prescribed pattern. a No some lease doubt ship must be examined before agreements may strong contain evi- imputed principal.17 will be justify refiner as dence of control imposition liability; but presents The case now us before possible equally that the lease affirm question of whether vicarious liability can independence retail- protect imposed on a for the negligent lessor In the of some demonstrated lessee who er.19 absence prod acts sells lessor’s agreement a de- Traditionally, ucts. rule has been that between link lease premises passes control of the control over retail- gree once of actual Prosser, supra (8th 1963); See NLRB, W. note at 458. Peter v. F.2d 86 Cir. California, F.Supp. Union Oil Co. Liability Douglas, 15. See As- Vicarious (N.D.Cal.1971); Oil United States Richfield sumption Risk, (1929); 38 Yale L.J. affd, (S.D.Cal.), Co., F.Supp. 288-89 Harper, Immunity The Basis an Em- 96 L.Ed. U.S. S.Ct. Contractor, ployer Independent of an 10 Ind. *7 (1951) (1935); Morris, of L.J. 494 The Torts an Inde- . our use of these anti The dissent criticizes Contractor, 339, pendent Ill.L.Rev. 343 29 “nothing saying as whatever about (1935); Steffen, trust cases Independent Contractor and liability.” Life, imposition 177 of vicarious Dissent (1935). the 2 Good 501 U.Chi.L.Rev. -, (foot U.S.App.D.C. at 543 at F.2d 283 Prosser, 12, generally supra 16. See W. note at eliminated). only But we cite them for the note §§ 70-71. some, many, proposition that deal if retail entrepre the indicia ers all most of of “have Prosser, 12, supra 467; 17. See W. note at W. 20, Simpson, supra, 377 U.S. at 84 neurs.” Seavey, 138, Agency, (1964). Law of 142 Supreme Court in these 1056. The S.Ct. at supra. 18. See rela note 12 individual refiner-lessee cases examined tionships the and found that lessee was See, g., Simpson 19. e. v. Union Oil Co. of Cali- This, although cer independent businessman. fornia, 13, 20, 1051, 1056, 377 U.S. 84 12 S.Ct. dispositive present in tainly the issue the of (1964); Refining L.Ed.2d 98 v. Sinclair FTC finding case, upon the EPA’s cast doubt does Co., 463, 450, 473-75, 453-54, 261 U.S. 43 S.Ct. appendages the mere of lessees are that all (1923); Gray Co., 67 L.Ed. 746 Shell Oil v. 469 refiner. (9th 1972); F.2d 742 Cir. Site Oil Co. of Mo. v.

277 neg- imputing their justify attempting are not now the ers define na- sufficient refiner-lessor, we conclude ligence relationship justify which will ture regulation impose the EPA cannot imposition liability.20 of vicarious Rath- liability upon refiners for all of the blanket is er, are the EPA must saying all we negligent acts of their lessees the sale indicia each examine control refin- applicable of the stat- gasoline in violation and relationship find it to be suffi- er-lessee regulations. ute and the negli- to hold the liable for cient negligence of the lessee before the gence attempts to dissenting opinion imputed promul- to the refiner. In may be position on point our as characterize here, it regulation review gating under “high degree” control requiring a true that is found over lessee before “sufficient control of facilities owned 177 have imputed. Dissent may be prevent at 280. is an F.2d at That or leased them contamination ”21 holding. gasoline. . . But interpretation of our We of unleaded incorrect Young using “closely integrated” (1942), Unemploy- the term and v. Bureau of In relationship Comp., Ga.App. must be which characterize ment S.E.2d 412 employer compare (1940); Riley, and his shown to exist between and Co. v. Wolff --, “employee,” (1945), text 177 163 P.2d 179 with v. Wash.2d State Goessman, supra, only signify 13 Wash.2d F.2d "that P.2d 201 we relationship State, meet the le- (1938), must traditional their gal and McDermott v. 196 Wash. imposition By defending of blan- tests. 82 P.2d 568 liability upon acts refiners for the unemployment ket vicarious the federal Under insurance retailer-lessees, demon- statute, 3306(i) dissent 3121(d)(2), (1970), of their 26 U.S.C. §§ that it is unfamiliar the factors strates are if the common law rules used to determine employment rela- which establish relationship elements per- between worker and the equivalent. tionship or its statutes performs whom he the services is the son for compensation unemployment employer employee. decisions legal relationship of example. good area furnish Generally, relationships been have found incorporated Many person their un- into states for whom services to exist when employment right a three-fold test performed insurance statutes has the to control and are employer-employee worker, rela- constitutes an what to the result to direct the as See, g., tionship. 19- accomplished by § e. 11 Del.Code Ann. work but also as to the (1975); 3302(9)(A) 54- § 16 Code Ga.Ann. such result ac- means which is details and complished. 657(h)(6) (1975 Supp.); Bums Treas.Reg. 31.3121(d)-l(c) Ind.Stat.Ann. § 22-4-8-l(a) (1974); 23 La.Rev.Stat. range § (1956). A and elements wide factors Md.1957, (1950); 1472(12)(E) 8A Ann.Code finding § that bear on a control discussed 95A, 20(6) Supp.); (1975 48 Neb.Rev. Art. Security Handbook, (SSA) § No. DHEW in Social 604(5) (1971 Supp.); 9 Ann. Stat. Va.Code 73-10135, (5th 1974). § 804-24 Under the ed. §§ 60.1-14(b) (1973); § Rev.Code Wash. 50.- statute, Revenue Service federal Internal 108.02(3)(b) (1958); 17 Wis.Stat.Ann. 04.140 (1974). found service station lessees to be several test, employer can Under this company, “employees” lessor oil but has prove employment relationship exists no employees. others not to be also found Com- by showing (1) is free from the worker 70-443, g., pare, e. Rev.Rul. 1970-2 Cum.Bull. performance of his or direction control with Rev.Rule. 1969-1 Cum.Bull. fact, his contract service and work under United Oil 259. See also States Wholesale (2) is outside usual course the service (10th Co., It F.2d 745 Cir. is thus performed, or it of the business arbitrary action to decree refiners are places performed of all the outside busi- negligent for the acts of their lessees. liable enterprise such service ness performed, (April 11, 1974) Fed.Reg. App. [J. customarily worker is explained The EPA the bases its con- 11]. trade, independently engaged established in an as follows: clusions about profession is ex- occupation, or business. It that branded refiners determination likely many great tremely service station that a *8 ability to control have control or held meet test thus be would this lessees product branded con- of distribution sumer, employees In of the refiner-lessor. not to be upon (1) relied the branded refin- fact, independent have been found lessees legal obligation a as of trade- ers’ marketers where the nec- under these statutes contractors nationally product to essary marked and advertised and direction elements control Co., prod- protect quality of Compare the trademarked lacking. Great Tea Huiet v. A&P uct, (2) quality system 602, (1942), control Ga.App. with extensive 693 66 18 S.E.2d 638, already by compa- Huiet, operated Ga.App. oil 21 the branded S.E.2d Johnson v. contrary required by result our No support for this in the is no conclusion there in Indeed, admits, prior opinion striking this case. In down as the dissent record. liability provisions previous regu- of the sample submitted a single a “[n]ot I, in Amoco we lations held that U.S.App. Dissent agreement.” lease and distributors must have the [rjefiners -, at 283. The bur- D.C. 543 F.2d agency regulation from supporting to demonstrate freedom opportunity den by control lessors rests ... A refiner which can evidence of fault. employees, agents, or les- upon and not the refiners. show upon sees did doubt, not cause the contamination at agreement the lease is the Without issue, and that the contamination could important establishing factor in single most prevented been not have a reasonable relationship, including lessor-lessee oversight, may of contractual program degree of control exerted the former not be held liable yet, And without consider- over the latter. lease,

ing single EPA has here con- a U.S.App.D.C. at 501 F.2d at 749 cluded that all degree refiners exercise a omitted, added). (footnote emphasis Curi- over all their lessees sufficient control ously, passage the dissent reads application justify mean that a refiner can be held “plainly” every case. This the thrust of our responsible in when results contamination degree of control holding; negligent lessee, what “suffi- act of from a dissent question cient” is a we do not now 177 543 F.2d at 280, and in goes its footnotes address. even further protect obligation and control over their retailers nies to meet this sufficient to be held will, yet good responsible for misconduct business success affirmative Company developing American Oil still determine that there is sufficient control to procedures negligent implementing quality control refiners liable for the actions hold the gasoline. distribution of unleaded lessees. their Fed.Reg. (April 1974) App. 9], argues that the EPA relied on an The dissent [J. Anticompetitive Report that the have in the Thus the EPA’s decision on Practices FTC Marketing pre- demonstrating “sufficient control” over their lessees to of Gasoline as abstract, power vent contamination was made “coercive which the short-term lease particulars gives marketing prac without descent to the of the indi- refiners to control at-n.11, relationships. vidual contractual appears The EPA also tices.” Dissent 177 interpreted willingness however, read, to have 543 F.2d at 282 n.11. When the quality report point significance: of a refiner to stand behind the makes one product operate pursuant of its branded as evidence that retail dealers to leases that option refiner controls the actions of its retailers. 39 at the can be cancelled lessor-re 11, 1974) 11], seriously Fed.Reg. (April App. doubt whether such a [J. finer. We provision While that providing indicate a commitment toward could be relied lease system possible, provisions the best distribution of other exclusion detail day-to-day responsibility demonstrate control of does not the division the station’s speculations operations. operations; and we note In contrast these the statement agency, general report quoted we note the disclaimer the dissent deals responsibility price-fixing for the actions of retailers is- rather than with over with equipment refiners, id., proce and the EPA’s own maintenance station sued regarding possible The sort of comments its amendments to the dures. control over the proposed new section: otherwise retail dealer which the condemns, proposed qualified Report the li- and which the dissent The amendments FTC See, illegal. g., ability upon, of branded refiners violations relies been held e. California, by illegal Simpson acts and for certain viola- v. Union Oil of U.S. L,Ed.2d occurring jobber Since oil tions distribution 84 S.Ct. response likely wary engaging proposal chain. This refiners are to be they objections to vio of branded refiners future in conduct which has been held laws, sufficient control of the branded dis- the antitrust the EPA’s total reliance lacked late case, prevent Report justified. affirmative mis- is not we tribution chain to on this resulting generalized or distributors statement such conduct retailers do not think as justify imposing a violation. this would retail-lessees; (December 1974) App. Fed.Reg. the facts and circumstanc on all [J. interesting accept relationship the EPA could individual must be exam It is es of the 2]. the refiners’ argument do ined. *9 to this court every merely it mean that he owns by interpreting because held, of the record then before premises “on the basis products leases his where it, showing made a EPA had sufficient that sold. re justify placing

to Judgment accordingly. contam narrow context —for this finers —in Dissent by lessees.” ination SKELLY, WRIGHT, Judge J. Circuit at - n.1, - n.9, F. U.S.App.D.C. (dissenting): however, n.1, We, can 282 n.9. 2d at 280 only issue The left in this case is whether opinion in that addressed language find no may be held vicariously liable for showing or to the EPA’s sufficiency of gasoline negli- contamination unleaded can be held when question gently caused their lessee-retailers. It lessee; the actions his nor does liable for dispatched to be ought in one sentence. precision some the outer with it “state already has court ruled on it in This favor liability regulations the new boundaries EPA, petitioners and all the current promulgate.” Dis was sure parties were lawsuit. Amoco - Oil n.1, 543 at sent 177 U.S.App.D.C. EPA, U.S.App.D.C. Co. 501 F.2d “plainly” passage The n.1. F.2d at (Amoco I). In Amoco I we only the issue then before this addresses original liability provisions— on the passed court, e., circumstances under which a i. were too set strict —and we forth goes held It no may not be liable.22 carefully provisions limits further. n would have meet: Therefore, existing regu- validate the Refiners distributors must have the lations, phrase “whose assets or facili- to demonstrate freedom opportunity from owned, leased, substantially not ties are A can show fault. distributor which refiner” stricken by the must be controlled employees agents did not cause 80.23(b)(2)(iv) (1975). This 40 C.F.R. § may contamination at issue escape liability refiners to permit will then * * held liable *. A refiner can prove if can the contamination agents, its employees, show les- directly-sup- the action of a was caused did not cause the contamination sees at Otherwise, regulation ex- plied lessee. issue, and that the contamination could authority conferred on the Ad- ceeds prevented by have been reasonable statute, by the 42 U.S.C. ministrator oversight, of contractual program 1857f-6c(c)(l), and is “arbitrary . * * held liable *. not be not in accordance with law.” 5 U.S.C. [and] 706(2). we view the law the refiner at As 501 F.2d omitted; added).1 (footnote emphasis held liable for the cannot be petitioners given a held fact that these a refiner can be liable for the actions * * * agency lesseej.] ‘plainly’ passage in Amoco I to attack the record ad- chance * * * there, regulations circumstances at issue which were dresses un- for the down, thought deprive a refiner not be held liable. It cannot be der which struck goes Majority op. right evidentiary U.S.App. further.” to attack basis no of a them I, regulations. (emphasis D.C. at at 279 After Amoco F.2d the new objec- original; petitioners’ omitted). footnote well aware of imposition majority passage of vicarious tions that For the to read the sufficiently supported by say the record. was not is mechanical the least. fashion Of I, passage go Though See Amoco course the does further. opinion fairly negative, plainly imports phrased 731. Our cannot be read F.2d at petitioners again holding. To allow raise I otherwise. affirmative The Amoco court was opportu- statutory question presented question after the EPA had an of what with liability regulations nity the record is no “ambush.” limits to correct and constitutional original meet. The court found must limits, makes much of the fact that this exceeded the but it did on, negatively: phrased holding; passage stop I from Amoco that bare it went with * * * judicial language principles can find no [Amoco “We accordance sound * * * question precision economy, of when to state with some out- I] addressed *10 passage equipment stalled the and remains the own- relied on this expressly it, its new promulgating charged continuing in with its opinion er of care. from our (De- Fed.Reg. 42357-42358 regulations. importantly, majority over- More regulations 5,1974), 2-3. Those JA cember showing required society states before They our mandate. precisely to conform impose validly liability, vicarious may demonstrate opportunity to give refiners an speculation on then relies that finds no sup- fault, they also hold re- but freedom from the record in order to in conclude port contamination re- responsible when finers requirements have not been its overblown negligent employee, act of an from the sults on points. take issue both met. I agent, or lessee. majority indicates that there must be The Petitioners, refining companies eleven closely integrated relationship”3 “some or among petitioners in Amoco who “compelling evidence of control” re before challenge regulations new now vicariously held liable. Ma finers be something other than we meant assert that jority op. at -, 177 U.S.App.D.C. in the earlier case. plainly what we said F.2d 276. We assume that the Due merit, if their assertion had Even Process Clause of the Fifth Amendment this fashion. It should pressed cannot and the Administrative Procedure Act’s ban petition rehearing on a for have been raised arbitrary capricious action, petitioners never filed in Amoco I. (1970), require U.S.C. do degree some they petition, nor did seek further of relationship and control predicate as a judg- That of bur decision there. review imposing vicarious liability, but the ma final, it controls this case. ment jority why never reveals it insists on such a has, Assuming, majority as the that we very high degree. anew, consider the matter I still find are to majority express does some shock at regulations unquestionably EPA’s liability may that vicarious the notion occa- place, dispute rages In the first valid. sionally result loss to a refiner that has very small class of contamination over every possible” human effort “made negli- lessee caused incidents —those Majority op. U.S. avoid contamination. deliberately brings If the lessee gence. App.D.C. contamination, escapes F.2d at 274. the refiner li- But about itself, this, ground striking is no 80.23(b)(2)(H)or ability under 40 C.F.R. § regulation. Employers down the use 80.23(e) (1975).2 pre- And the lessee has —to example common the most vicarious lia- to cause non-delib- opportunities few cious responsible bility every day held negligent The re- —are erate — —contamination. employees even where gasoline torts controls deliveries of finer both possible steps truck, injury. taken all to avoid the by tank JA the station Prosser, very passage Dean of his maintains substantial over majority, cited that will handle treatise makes this equipment station, initially unsurprising proposition since the refiner in- entirely clear.4 liability regulations er for the new 3. The cites Dean boundaries Prosser for this re- promulgate. speaks only quirement, EPA was sure to And Prosser but of “some held, quoted passage requirement the court on the basis of no and breathes hint of a relation” it, closely integrated. the record then before that EPA had made a relation be W. justify showing placing Prosser, (4th sufficient Law of Torts 458 ed. liability on refiners —in this narrow context— lessees. I find it for contamination negligent, “Imputed negli- A is B is not. anyone impossible that, to understand how could be gence” means reason some rela- stylistic negative phras- misled choice of existing B, between A and ing; passage clearly provide meant B, charged against although B of A is to guidance for EPA as it considered it, affirmative nothing played no has done regulations. it, encourage to aid whatever or indeed possibly prevent has done all that he can to regulations are set out in full in footnote 2. The ** * jf majority opinion. 7 of the the chances that les- which itself minimizes longer liability is no Employers’ negligence will result in contamination. see suggests that its im- No one controversial. thus plainly para- serve the arbitrary either or unconstitu- position protecting goal consumer and mount entitled to conclude that *11 EPA was tional. emission control devices function- keeping make vicarious lia- which factors same ing properly. also acceptable torts employee bility more limited EPA’s much acceptable render majority though acts as the tests responsi- refiners shall assume ruling that liability have been cast in con- vicarious contamination. bility for lessee-caused crete, though always must turn liability as dichotomy familiar between em- upon the liability other forms Vicarious —like independent contractor.7 This ployee imposed not because strict —is well be a serviceable distinction when control,” evidence of “compelling there responsi- to exonerate the refiner of applied properly some authoriz- rather because but bility negligent by for most torts committed legisla- government court, ed — employees. or the lessee’s lessee-retailer ture, body deter- or administrative —has simply does apply But it here. EPA responsibil- an allocation of mined that such trying every hold refiners liable for The determi- society’s ends. ity will serve injury by personal lessees or their judgment that it is may rest on nation regulations Its employees. narrowly are impose liability party on the just more evil, specific on one and in this focused knowing of the entered the business who area, because of realities of the limited hazards, leaving rather than risk general system, JA distribution injured par- innocent loss on the the entire liability of refiner-lessors is a vicarious sen- importantly pur- for our ty.5 Or —more permissible strategy. control sible judgment from the may derive poses —it regulations designed are liability will create incentives EPA’s deter vicarious run, lead, reducing neg- amounts to a “new tort” —call it long what negligent impair- injuries.6 hardly ligent Here it is irra- contamination or number lia- an emission control device.8 It making ment of is a tional to conclude neg- injury form of which has resulted for contamination caused from ble lessee advancing technology coupled to reduce ligence will serve contamination. increas- regulations given public Contrary refiners are demand for clean air. ing Under intimations, majority’s repeated their incentive to choose lessees care- clear governing respon- to refuse to renew the leases of is no “settled law” fully and there particular poor sibility narrowly-defined contamination records. for this operators with Moreover, injuries. regulations Nothing work to encour- in the Constitu- class Act, tion, Air or the equipment refiner-owners to install the Clean Administra- age the entirely Perhaps Prosser, supra (emphasis it is not accurate consider note at 458 W. regulations “tort” added). EPA’s under rubric. purport alter the standards EPA does Smith, Detour, 459; Frolic and See id at govern private brought, in a that would suit 452-457 & n.34 Colum.L.Rev. catalytic example, convert- someone whose gasoline. It fouled contaminated er was Calabresi, The Decision for Accidents: 6. See governed by appears still that such suits will Costs, Approach to Nonfault Allocation of An law rules which the traditional common Seavey, (1965); 727-728 78 Harv.L.Rev. invokes, tirelessly depending, Superior”, “Respondeat Speculations as course, upon of the state where the law James, quoted in H. Shulman & F. Cases Rather, injury EPA’s im- occurs. (2d ed. Torts 116-118 Materials on liability only penal- pose for the civil vicarious 211(d) Congress authorized under ties rules are of 7. The traditional Act, 1857f-6c(d) Air 42 U.S.C. of the Clean deciding whether EPA’s ac- course relevant (1970). This is all the more reason to refrain with the Constitution and the tion here accords importing into the administra- wholesale Act, Procedure but Administrative law distinction be- the common tive scheme dispositive. no means employees and contractors. tween This court is not to Air Act. Clean that the liabili- Act dictates Procedure tive only second-guess EPA’s decision.10 Our precisely to must conform here ty rules to assure that EPA acted within function ap- continue to liability rules that set limits down statute and the broad familiar, inju- other, types of more ply to We check to see that the Constitution. ries. reveals sufficient the record years in the of recent experience lessee-retailers that EPA’s im- refiners over ought prompt cau- liability field products liability on the refiners is neither position of rigid as adopts a stance as before one arbitrary capricious. Bowman nor See field, strict majority’s. Transportation, Inc. v. Arkansas-Best found, of recent in an avalanche been Inc., 281, 285-286, System, 419 U.S. Freight cases, society’s ends better than the serve (1974); 95 S.Ct. L.Ed.2d *12 warranty and privity that old doctrines Volpe, Park v. to Preserve Overton Citizens a only years entrenched few solidly seemed 402, 814, 416, 91 S.Ct. 28 L.Ed.2d 401 U.S. changed— standards Those ago.9 (1971). 136 response to dramatically rapidly —in refiners have explicitly EPA found that advancing technology, new and more re- control of facilities owned or “sufficient manufacturers relationships between mote prevent contamination of by them to leased consumers, percep- changing societal * * Fed.Reg. 39 unleaded justly burden should about where the tions 11, 1974), support (April JA 11. As 13177 fall, emerging views about what strate- lessee-op- that at position its EPA noted for injuries. In a similar best deter gies would stations it is the refiner-owners who erated vein, certainly ought to consider with one respecting the “basic decisions condi- make possibility compara- open mind gasoline,” particu- of unleaded tions of sale might appropriate make differ- ble factors larly equipment. decisions about Id. EPA the nar- liability standards for ent vicarious a sufficient refiner “has also observed rowly limited class of “torts” exposure limit his control to focused. EPA course, may, seek such cases indem- 13178, JA 12. nity.” Id. at doubt, is, properly au- beyond choose the stan- body support supplies adequate thorized The record purposes achieve the My colleagues that will best EPA’s determinations.11 dards 3, 654-658; Prosser, supra note at dollars to several thousand. These dealers See W. (Second) (1965); operate pursuant of Torts 402A Restatement stations to leases which Citadel, Prosser, Upon option may 69 Yale The Assault at the of the lessor. be cancelled Prosser, (1960); cases, great majority The Fall of the L.J. 1099 Cita- In the the duration (1966). del, year. 791 50 Minn.L.Rev. is one the lease A dealer whose lease is terminated at responsible I observe that where no 10. would frequently option supplier’s finds himself act, government agency this is authorized financial set-back. He faced with may severe past imposed on lessors a court has in the high itself money in- have a considerable sum of responsibility to lessees and to standard of equipment for which he cannot vested Realty public. See Javins v. First National what he considers the true market obtain 369, 1071, Corp., 428 F.2d 138 or which he use in whatever value cannot 186, denied, 925, 400 U.S. 91 S.Ct. cert. The location he be able to secure. L.Ed.2d 185 good-will employee relation- customer years up ships he has built over the are example, The Federal Trade Commis- 11. For completely lost unless he can obtain a new Anticompetitive Report on Practices in sion’s marketing Marketing part within the same area. location was made a of Gasoline And, complainants allege, dealers termi- JA the record before EPA. 130-204. FTC supplier “sugges- power which the short-term for failure follow noted the coercive nated marketing price] frequently gives refiners to control are un- lease tions” to retail [as practices. suppliers JA 158-164. It wrote: from other to obtain leases able reputation.” of “bad approximately because two There hundred thou- Eire concluded; today’s operating gaso- The FTC JA 160-161. dealers sand lessee marketing practices on the position Their individual investments in As a result line market. range suppliers, dealer’s from a few hundred the retail their businesses illustrating relationships concede that some lease ments those themselves even “strong agreements pertinent.” Reg. contain evidence where Fed. submitted op. Majority the refiner.” 13178, JA 12. at F.2d at furnish cases cited on, however, speculate They go support position. They no better may affirm “possible” that a lease is is drastically contexts. To arose different paucity of record independence. lessee extent relate of lessee issue speculation striking. Al- support all, they independence decide of refiners commented on though a number sufficiently independent justi- are lessees regulations, only one even proposed of the antitrust fy particular applications the lessee- specifically refer bothered Co., laws, g. Simpson v. Oil e. Union refiner— JA 34-36. That issue. 13, 1051, 84 S.Ct. L.Ed.2d U.S. petitioner here —rested who is not a content Co., F.Supp. v. Oil (1964); Peter Union of control generalized disclaimer with a 1971); (C.D. Cal. States United single refiner sub- Not a over lessees. Corp., F.Supp. 293-294 Richfield Oil agreement lease mitted sample affirmed, Cal.), (S.D. U.S. 72 S.Ct. support that would other documentation (1951), 96 L.Ed. 1334 or that lessees do so They failed to de- disclaimer. employ- sufficiently their request, notice spite careful EPA’s *13 employees of the will be considered ees rulemaking, that “comments ad- proposed under the labor laws. Site Oil Co. v. relationships brand- between dressed NLRB, (8th 319 F.2d Cir. The other distri- ed refiners elements nothing imposi- about say cases whatever system specific be factual bution liability.12 or other of vicarious That lessees are examples that contracts docu- against largely an serf holding. that of economic rather than EPA * * independent expressly holding that of businessman. relied on that promulgat- ing regulations, the new and no doubt 30, 1967, report is June JA 172. The FTC dated helped shape reliance EPA’s decisions about nothing suggests in the record but what kind of information place seek and to respects changed in relevant situation surely in the record. We would faced with a intervening years. different considering record had EPA been petitioners matter de novo. For now to am- majority EPA for it re- criticizes what EPA with adequacy bush an attack on the record, espe- gards as deficiencies very point entirely on this record unwar- partic- cially to the for EPA’s failure to descend majority get away For the to let them ranted- agreements lease of individual used ulars deeply distressing. with it is Perhaps writing if EPA were on a each refiner. slate, grounds for de- there would blank manding 12. Petitioners have also invoked cases wherein complete although I a more record— impose liability declined to on courts refiners that even in that no means concede case personal injuries caused the tortious inadequate. But the would be record here point of lessees. But cases behavior these likewise EPA did not write on a blank slate. is that point. This is clear very exami- already presented beside substantial It had Co., v. I, of Smith Cities Service Oil nation in Amoco and the court record to this court (7th 1965), Cir. the case re- that, record, F.2d 349 based on the I there Amoco held petitioners’ principal reliance in A ceives young brief. justified imposing EPA was vicarious liabili- boy was burned of a as a result Michi- ty refiners for contamination les- operator’s gan station while he re- U.S.App.D.C. at 501 F.2d at sees. 163 749. boy’s family paired family’s car. The certainly sued entitled to conclude that the EPA was resolved, judicial the refiner which station and whose ap- owned question it had was products Michigan were sold there. law imposing Under proval for on refin- contamination, not be the refiner-lessor would liable unless the ers for lessee-caused operator could be refin- again compile considered the have to a massive record station did not performing agent in already er’s the activities that question led resolve a settled. injuries. gives petitioners court undertook a careful here an entire- that, inquiry ly gift. They parties and decided factual cumstances, under the cir- undeserved They litigation. permitted Service did come within judg- Cities Amoco I Michigan requirements. Id. at 352. final without a ment to become murmur pur- for some limited independent judged mean must be obviously does not

poses CERTIFIED MANUFACTURERS COLOR ASSOCIATION, al., Appellants, pur- fully et considered poses. properly “sufficient control” found MATHEWS, Secretary F. David holding negli- liable for justify HEW, Department of et al. lessee-operated sta-

gent contamination No. 76-1120. proper standard of re- Applying tions. view, has no basis whatever for this court Appeals, United States Court of arbitrary action irrational or finding EPA’s District of Columbia Circuit. Transportation, capricious. Bowman See Argued April Freight Inc., System, Inc. v. Arkansas-Best July Decided 6 supra. dissent. respectfully I *14 engaged applying relationship But the court there equivalent” or its imposing before already by Michigan standards established law. liability. Id. at footnote 20. case, by contrast, empowered In our EPA is One scan the Air Clean Act in vain for responsibility create the standards for any Congress hint that meant EPA to take such place. first There is no reason whatever to Instead, Congress a crabbed gave of its role. view application Michigan think that Smith’s law authority pro EPA broad to “control or statutory marks the outer constitutional and manufacture, hibit merce, introduction into com essentially legislative boundaries for the deci- sale, offering or sale of fuel or sion entrusted to EPA. impair fuel additive” found to emission control 1857f-6c(c)(1) (1970). devices. 42 U.S.C. § Perhaps key majority’s misappre liability regulations merely are a —a hension of the real issues in this case lies in its necessary part logical and EPA’s control —of appreciate failure to this distinction between Moreover, Congress strategy. authorized applying given establishing standards and “by regulation.” to control such additives Id. repeatedly though Congress ones. It acts as Rulemaking hardly provides opportu EPA the stock, apply lock, had directed EPA to — nity perform impossible majori task the barrel —the traditional standards of vicarious apparently require: ty would “EPA must exam liability. I do not know what else to make of ine the indicia of control each refiner-lessee majority’s repeated invocation of such Majority op. relationship.” law,” phrases as “settled “traditional vicarious (emphasis 543 F.2d at 277 added). rule,” liability,” majority op. and “ancient see 200,000 (There approximately lessee-oper U.S.App.D.C. at -, -, country. 160.) Plainly and footnotes stations in the JA ated Congress 275, 276 12 & 543 F.2d at and footnotes 12 & quasi-legisla did entrust EPA with a apparent By nor can understand its treating I otherwise tive EPA’s role as one of task. employment application, find insistence that EPA must “the mere takes far too narrow a view.