The California Department of Toxic Substances Control (“the State”) brought this cost recovery action under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. §§ 9601 et seq., seeking cleanup costs arising from the release of hazardous substances at a former lead processing facility (“the site”) operated by Aleo Pacific, Inc. and Morris P. Kirk (collectively, “Aleo”). The State asserts that Defendants RSR Corporation (“RSR”), Quemetco, Inc. (“Quemetco”), Davis Wire Corporation (“Davis”), Pasminco, Inc. (“Pasminco”), and P. Kay Metal Supply, Inc. (“PKM”) (collectively “Defendants”) sold lead content materials to Aleo and thus are subject to “arranger” liability for contamination of the site under CERCLA § 107(a)(3), 42 U.S.C. § 9607(a)(3). The district court granted summary judgment for Defendants after concluding as a matter of law that the subject sales fell within the “useful product doctrine” and thus did not constitute arrangements for disposal or treatment of hazardous wastes under CERCLA. California Department of Toxic Substances Control v. Alco Pacific, Inc., No. CV-01-9294 (C.D.Cal., Feb. 6, 2004). We have jurisdiction over the State’s timely appeal under 28 U.S.C. § 1291. We reverse and remand.
BACKGROUND
Aleo operated a lead processing facility on the site from approximately 1950 to 1990. During that period Aleo refined and reclaimed lead from raw materials acquired from thousands of sources. These materials included lead ingots, automobile batteries, scrap metal, wheel weights, dross and slag.
The latter two materials are particularly important in the context of the instant appeal. “Dross” is the material that rises to the surface of melted metal that is not perfectly pure. Dross typically is skimmed off the molten metal and stored for later use or disposal. Depending on the care taken in skimming, the dross thus removed may contain a significant percentage of the metal itself. “Slag” also results from the separation of impurities from metal during the smelting and refining process. Aleo purchased high lead content dross and slag that were by-products of other lead processors’ operations. Material was deemed to have high lead content if it contained approximately thirty percent recoverable lead. The price Aleo paid for the dross, slag and other raw materials it purchased was based upon an analysis of the lead content of the material and the published market price of lead at the time of the transaction, as measured by the commodities price index quoted in daily newspapers.
After processing the materials supplied by Defendants and others, Aleo sold the resulting refined and reclaimed lead in various forms. For example, Aleo cast lead sailboat keels and produced sheet metal and lead anodes. Aleo also sold lead in the form of ingots or babbitts. Aleo disposed of the waste material resulting from its operations — low lead content slag — at a facility authorized to accept hazardous wastes. Aleo did not dispose of dross generated during its operations, but rather used the dross again in its smelting process.
Defendants RSR and Quemetco
RSR is the parent corporation of Quem-etco. RSR did not sell or transfer any materials to Aleo, but it allegedly arranged for the sale of materials to Aleo on behalf of Quemetco. Quemetco is a lead smelter that reclaims lead from scrap and lead-acid automobile batteries. Though Quemetco sold several different types of lead content *933 materials to Aleo, the parties have focused on sales of lead content slag.
Quemetco generates three types of slag: “first run slag” or “reverb slag,” which is produced during the initial processing of scrap through a reverberatory furnace; “second run slag” or “rerun slag,” which has been processed a second time; and “inert slag” or “waste slag,” which has been processed at least twice and is ready for disposal. On October 25, 1988, Quem-etco sold to Aleo 47,920 pounds of “rerun antimonial lead slag.” On October 31, 1988, Quemetco sold to Aleo 49,580 pounds of “rerun antimonial lead slag.” Aleo paid seven cents per pound on both transactions, resulting in total payments of $3,354.40 on the first purchase and $3,470.60 on the second purchase.
Defendant Davis
Davis 1 operated a wire manufacturing company that used molten lead to treat wire. A by-product of this process was lead content dross that was composed of lead and coke. Between 1978 and 1988, Davis periodically sold lead content dross to Aleo at varying prices, depending on the amount of lead contained in the particular shipment. Aleo paid Davis at least $110,000 for lead content dross during this period.
Defendant Pasminco
Pasminco operated a zinc smelting facility. Between 1978 and 1983, Pasminco periodically sold lead content dross and other materials to Aleo.
Defendant PKM
PKM operates a solder manufacturing facility, reclaiming tin and lead in a manner similar to that used by Aleo. PKM reclaims tin, lead and other metals and converts them into solder that it sells to others. PKM sold various materials to Aleo, including lead dross, solder dross and antimonial lead dies. The parties have focused on the dross transactions. Between 1982 and 1989, PKM periodically sold lead and solder dross to Aleo at varying prices. PKM characterizes these transactions as part of a “conversion” agreement whereby Aleo processed the dross to strip it of impurities and then returned the extracted refined metal to PKM. PKM paid a fee for this conversion process.
Contamination of the Site
During Alco’s operations, molten lead, slag and other materials, including dust and residue from the materials, occasionally spilled or otherwise were deposited onto the ground at the site. Additionally, solidified lead and slag were stored on the ground at least temporarily. The State determined that surface dust, soils and slag piles at the site were contaminated with lead. It incurred significant cleanup costs at the site and filed the instant action seeking reimbursement from Defendants on the theory that the above-described transactions constituted arrangements for the disposal or treatment of hazardous waste under CERCLA § 107(a)(3), 42 U.S.C. § 9607(a)(3). The State also seeks declaratory relief with respect to any future cleanup costs.
The district court granted summary judgment for Defendants, concluding as a matter of law that Defendants’ transactions with Aleo were within the scope of the useful product doctrine. The State subsequently reached settlement with the *934 remaining defendants in the case, and the district court entered a final order and consent decree resolving all outstanding issues.
STANDARD OF REVIEW
We review
de novo
a district court’s grant of summary judgment.
Olsen v. Idaho State Bd. of Med.,
DISCUSSION
Under CERCLA, a plaintiff may attempt to recover cleanup costs from four categories of persons, defined at 42 U.S.C. § 9607(a). Only the third category, persons defined as “arrangers,” is at issue here:
[A]ny person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at any facility or incineration vessel owned or operated by another party or entity and containing such hazardous substances....
42 U.S.C. § 9607(a)(3). We recently held that arranger liability encompasses not only transactions in which the central purpose is the disposal of hazardous waste but also “transactions that contemplate disposal as a
part
of, but not the focus of, the transaction.”
United States v. Burlington N. & Santa Fe Ry. Co.,
CERCLA itself does not define the terms “disposal” and “treatment,” but instead incorporates the definitions of those terms as set forth in the Solid Waste Disposal Act (“SWDA”). See 42 U.S.C. § 9601(29). The SWDA defines “disposal” 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 ground waters.
42 U.S.C. § 6903(3). “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).
We have held that these definitions necessarily implicate the concept of “waste,” and have developed a body of case law distinguishing between the disposal or treatment of “waste” and the sale of a “useful product.”
See, e.g., Burlington,
*935
Because the doctrine has developed piecemeal through case law, its contours are not entirely clear. In
Louisiana-Pacific Corp. v. ASARCO, Inc.,
On appeal, we did not refer explicitly to the useful product doctrine, but phrased the question before us as “whether the sale of slag to the logyards can simultaneously be both the sale of a product with intrinsic value in trade or commerce under Washington law, and the disposal of a hazardous substance under CERCLA.” Id. at 1574. We answered this question in the affirmative, concluding that slag was a byproduct of ASARCO’s principal business-copper smelting-and that the slag had only nominal commercial value in that the logging companies paid only $3.50 per ton. Id. at 1575. Prior to attempting to develop a market for its slag, ASARCO had dumped the slag into a nearby bay with the permission of the local park district. Id. We distinguished other cases in which the sale of products was not considered disposal of hazardous waste on the ground that those cases involved “the producers’ principal business products, not by-products that the producers had to get rid of.” Id. at 1575 n. 6. Under the circumstances, ASARCO could be held liable as an arranger for contamination caused by the slag ultimately sold to logyards. Id. at 1575.
In
Catellus Dev. Corp. v. United States,
We declined to read
ASARCO
as announcing a broad rule that any sale of a nonprincipal business product or by-product necessarily is an arrangement for disposal or treatment under § 107(a)(3).
Catellus,
We expressly rejected General’s argument that it could not be held liable as an arranger under CERCLA because it did not control the eventual disposition of the batteries’ remnants.
Catellus,
In
Cadillac Fairview/California, Inc. v. United States,
Citing ASARCO and Catellus, we held that it was not dispositive that the rubber companies did not own the contaminated styrene during the re-distillation process and did not control the re-distillation process that resulted in the release of contaminants. Id. at 565. We likewise held that it was not dispositive that the transactions in question were characterized as sales. Id. at 566. Noting that the question on summary judgment is, “whether the fact-finder could infer from all the circumstances that a transaction in fact involves an arrangement for the disposal or treatment of a hazardous substance,” id. at 565 (internal quotation marks, alterations, and citations omitted), we concluded that, “[a] trier of fact could find the substance of the transactions to have been that the rubber companies paid Dow two cents per pound to remove the contaminants from the used styrene and return the fresh styrene to them-that they simply arranged and paid for treatment of the contaminated styrene by Dow.” Id. at 566. We found that, “[r]e-moval and release of the hazardous substances was not only the inevitable consequence, but the very purpose of the return of the contaminated styrene to Dow.” Id.
In
A & W Smelter & Refiners, Inc. v. Clinton,
We recently commented at length on arranger liability and the useful product doctrine in
United States v. Burlington N. & Santa Fe Ry. Co.,
In discussing the necessity of adopting an expansive view of arranger liability in light of CERCLA’s goals, we observed that even “[a]rranging for a transaction in which there necessarily would be leakage or some other form of disposal of hazardous substances is sufficient” to impose arranger liability. Id. at 1140-41. While acknowledging that we have “refused to hold manufacturers liable as arrangers for selling a useful product containing or generating hazardous substances that later were disposed of,” we held that “[t]he useful product cases have no applicability where, as here, the sale of a useful product necessarily and immediately results in the leakage of hazardous substances.” Id. We concluded that, “[i]n that circumstance, the leaked portions of the hazardous substances are never used for their intended purpose.” Id. Because leakage of the Shell chemicals was inherent in the transfer process arranged by Shell and contemporaneous with that process, the useful product doctrine was inapplicable. Id. We emphasized that, “Shell’s liability derives not from its role as a manufacturer of a useful product but rather from its role in leakage prior to use.” Id. at 1140 n. 31. Shell owned the chemicals at the time the sale was entered into, and had sufficient control over and knowledge of the transfer process to be considered an “arranger” under CERCLA. Id. at 1142.
In the instant case, the district court attempted to synthesize our holdings into a cohesive approach to arranger liability and the useful product doctrine. Relying primarily upon ASARCO and A & W Smelter, the district court crafted a three factor test, and used it to conclude that all of the ingots and other high quality lead sold to Aleo fall within the useful product doctrine. The court noted that the slag and dross sold to Aleo present a more difficult case. However, the court was persuaded *938 that these materials also fall within the useful product doctrine because Aleo paid prices that were tied to the prevailing commodity price of lead and the lead content in the particular dross or slag, and because Aleo purchased the dross and slag as raw materials for its smelting business in lieu of purchasing virgin ore. The court found that although dross and slag were by-products of Defendants’ businesses, on the record before it dross and slag could not be characterized as worthless waste that needed to be disposed of but rather were valuable commodities.
While at this juncture we refrain from expressly adopting or crafting a concrete test for this fact-intensive inquiry, we agree that the factors upon which the district court relied, including (1) “the ‘commercial reality’ and value of the product in question”; (2) “a factual inquiry into the actions of the seller in order to determine the intent underlying the transaction”; and (3) “whether the material in question was a principal product or by-product of the seller,” are among the factors appropriate to consider in determining “whether in light of all the circumstances the transaction involved an arrangement for disposal or treatment of a hazardous waste.”
Cadillac Fairview,
The first factor — the “commercial reality” of the transaction — most strongly supports the district court’s grant of summary judgment, particularly in light of the undisputed fact that the prices at which the dross and slag were sold were linked to the market price of lead. The district court correctly found that the link between the commodities market price of lead and the price paid by Aleo for the Defendants’ dross and slag supported their claim that they were selling a useful product, not disposing of waste. It is not particularly significant that Defendants received only a fraction of the market price: the dross and slag themselves contained only a fraction of lead, and clearly Aleo would have to expend further resources in order to extract whatever portion of that fraction it could ultimately successfully reclaim. Nor does it matter that the prices at which the dross and slag were sold were “low” in some absolute sense. A product does not become waste simply because it is inexpensive. Rather, it is the de-linking of the price of a substance from the market value of whatever might feasibly be extracted from it that supports a conclusion that a price is nominal and a sale only a disguised disposal. There is no conclusive evidence in the record of such de-linking.
Price, however, is only one indicator of whether a transaction was an arrangement for the disposal of waste or the sale of a useful product. Neither a product’s absolute price nor its price in comparison with the value of the materials that might be reclaimed from it is dispositive by itself. Evidence of the frequency and volume of transactions, the parties’ prior dealings, the nature of the processing carried out by the buyer and previous or alternative arrangements for handling the by-products of the seller’s business operations also are potentially relevant. As the district court recognized here, “it is clear that the dross and slag were by-products of the various Defendants,” not their principal product. This finding undercuts the conclusion that the commercial reality factor unambiguously supports summary judgment for the defendants.
See RSR Corp. v. Avanti Dev., Inc.,
On the present record, a reasonable finder of fact could conclude — after a full factual inquiry into the actions of the parties — that almost all of the transactions were intended as arrangements for the disposal or treatment of a hazardous substance. The existence of triable issues of material fact is particularly clear with respect to PKM. PKM’s transactions with Aleo were not straightforward sales; instead they involved a conversion agreement under which Aleo cleaned PKM’s dross of impurities and then returned the extracted refined metal to PKM. PKM paid a fee for this conversion process that was incorporated into the sale price of the dross. These facts are extremely close to those in
Cadillac Fairview,
in which we held that the useful product doctrine would not apply if the true nature of the transactions between the rubber companies and Dow was an arrangement for treatment of contaminated styrene.
Cadillac Fairview,
Similarly, a reasonable fact-finder could conclude that Davis and Pasminco sold slag and dross to Aleo so that Aleo would treat and dispose of the material. Neither company was primarily engaged in the sale of lead products. Davis was engaged in the manufacture and sale of wiring products, not slag and dross. See id. Pasmin-co operated a zinc smelting facility. Even though the transactions between Davis, Pasminco and Aleo were “cast in the form of a sale,” id., a reasonable fact-finder could conclude that Davis and Pasminco sold the by-products of their manufacturing processes primarily for treatment and disposal purposes.
Defendant Quemetco presents a closer question. As the district court recognized, one of Quemetco’s primary business activities was selling recycled lead products to third parties. Accordingly, the State’s claim that Quemetco’s primary intent in contracting with Aleo was to “get rid of’ its slag and dross may be more difficult to prove. Nonetheless, it is undisputed that slag and dross were by-products of Quem-etco’s operations, and thus a fact-finder reasonably could infer that the sales between Quemetco and Aleo at least in part involved arrangements for disposal or treatment of a hazardous substance. Accordingly, we reverse the district court’s grant of summary judgment as to all defendants.
The State requests that we not only determine that the district court erred in granting summary judgment for Defendants but also conclude as a matter of law that the useful product does not apply in this case. The State argues that some spillage and leakage is inevitable during smelting, and that Defendants were well aware of this fact. The State also argues that a significant portion of the dross and slag sold to Aleo necessarily constituted “waste” that would have to be disposed of eventually, and that Defendants in essence shifted this responsibility to Aleo by means of the transactions at issue. However, while these facts obviously are relevant to the appropriate characterization of the transactions as a whole, they are not the only relevant facts; as discussed above, the fact that the pricing of the slag and dross clearly was related to the market value of lead cuts the other way. Thus, the current record is insufficient to establish as a matter of law that the useful product doctrine does not apply in this case. As we held in Cadillac Fairview and discussed above, the trier of fact must consider the totality of circumstances in determining the proper characterization of the relevant transactions. Id.
The State also argues that the useful product doctrine applies only to new
*940
products, manufactured specifically for the purpose of sale, and can never apply to byproducts. The case cited for this proposition,
State of California v. Summer Del Caribe, Inc.,
Finally, relying upon
A & W Smelter,
the State argues that the useful product doctrine applies only if the material in question could be used in the producer’s principal business.
A & W Smelter
does discuss the usefulness of the ore pile at issue in terms of A & W’s principal business, stating that, “[i]f the ore was mixed with enough slag so that it was no longer usable for A
&
W’s principal business, then it was waste.”
A &W Smelter,
At oral argument, Defendants asserted that finding arranger liability here will have adverse effects on the market, because companies with commercially useful by-products will resort to disposal rather than resale to avoid potential CERCLA liability from contamination arising out of subsequent reclamation or manufacturing processes in which they have no part and over which they have no control. While Defendants’ policy argument has some appeal, both the relevant statutory language and our case law support a broad application of CERCLA’s liability provisions.
See Burlington,
*941 Accordingly, we reverse the district court’s grant of summary judgment for Defendants under the useful product doctrine and remand for further proceedings consistent with this opinion. 4
REVERSED AND REMANDED.
Notes
. Prior to its bankruptcy, Davis Wire Corporation was known as Davis Walker Corporation. Davis Wire Corporation sought summary judgment in this action on bankruptcy grounds, but the district court denied that motion, and Davis Wire Corporation voluntarily dismissed its appeal of that ruling. Davis Wire Corporation and Davis Walker Corporation are referred to collectively herein as "Davis.”
. Indeed,
A & W Smelter
recognized that A & W’s contract to have another company process the ore "suggests the material was a useful product,” even though "[s]melting unprocessed ore was A & W’s business” and such a contract was necessary because the ore did not contain enough precious metal to "justify smelting by A & W’s methods.”
A & W Smelter,
. Defendants urge us to affirm the district court’s judgment on the independent ground that the transactions at issue constituted arrangements for recycling of scrap metal and thus fell within the recycling exemption codified at section 127 of the Superfund Recycling Equity Act, 42 U.S.C. § 9627.
See Olsen v. Idaho State Bd. of Med.,
. The State also appealed the district court’s order excluding the testimony of its expert witness, Mr. Brodwin. Because Mr. Brod-win’s proposed testimony concerned the applicability of the recycling exemption, this aspect of the appeal is moot.