After the Edward Hines Lumber Co. sold its wood processing plant in Mena, Arkansas, to Mid-South Wood Products, Inc., the Environmental Protection Agency concluded that the site had been contaminated by toxic substances. Invoking its powers under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. §§ 9601-75 (CERCLA or the Superfund Act), the EPA first put the Mena site on the national priority list for attention, 42 U.S.C. § 9605(a)(8)(B), and then asked Hines and Mid-South to remove the offending chemicals, 42 U.S.C. §§ 9604(a), 9606. They signed a consent decree promising to do so and have almost completed work, at a cost close to $5 million. Hines filed this suit to recover from the suppliers of wood preserving chemicals
Hines initially sought to recover from its suppliers under state tort law. The district court concluded that Hines’s suit was untimely,
Any person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title, during or following any civil action under section 9606 of this title or under section 9607(a) of this title. Such claims ... shall be governed by Federal law. In resolving contribution claims, the court may allocate response [ = cleanup] costs among liable parties using such equitable factors as the court determines are appropriate. Nothing in this subsection shall diminish the right of any person to bring an action for contribution in the absence of a civil action under section 9606 or section 9607 of this title.
Hines may require Osmose to chip in to the decontamination effort only if Osmose is a “person who is liable or potentially liable” under the Act. Osmose’s potential liability arises, if at all, under § 107(a)(2) of CERC-LA, 42 U.S.C. § 9607(a)(2), which provides that (with some defenses and exceptions) “any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of” must pay the costs of getting rid of them.
So everything turns on whether Osmose “owned or operated” the Mena plant. At this point the statutory chain comes to an end, for § 9601(20)(A)(ii) informs us that “[t]he term ... ‘owner or operator’ means ... in the case of an onshore facility or an offshore facility, any person owning or operating such facility”. This is circular, although it does imply that if Mena is neither “onshore” nor “offshore” — perhaps because in outer space? — then an owner or operator is not a statutory “owner or operator”. The definition of “owner or operator” for purposes of earthbound sites must come from a source other than the text. The circularity strongly implies, however, that the statutory terms have their ordinary meanings rather than unusual or technical meanings.
A pause for the facts will put the question in perspective. Hines had been preserving wood at its 57-acre site using several different chemicals for nine years before it contracted with Osmose to build an additional plant. Osmose is experienced in using chromated copper arsenate, which, when applied under heat and pressure, makes wood suitable for prolonged exposure to the elements. (The principal product of the plant Osmose built at Mena is 2 X 4 beams used in the construction industry.) For $135,840, Osmose designed and built a plant for Hines’s use at Mena; Os-mose trained Hines's employees to operate the machinery; it also licensed Hines to use its trademark in connection with treated wood. Hines promised to buy its next five years’ requirements of chromated copper arsenate from Osmose and gave Osmose “full and immediate access to the plant and to all chemical processes and products located thereon or produced thereby for the purposes of insuring quality control according to the OSMOSE standards”. Osmose promised to construct a closed-loop system, so that the toxic preservative would not escape; it also built the plant on a concrete platform, the better to trap any leaking chemicals. Hines operated the plant between 1976 and 1978; Mid-South has run it since. In 1981 the Arkansas Department of Pollution Control and Ecology found residues of chromated copper arsenate and
Osmose designed and built the plant, furnished the toxic chemical, trained Hines’s employees, and reserved a right to inspect ongoing operations. This must be enough, Hines submits, to make Osmose an “operator” within the meaning of the Superfund Act. It is easy to see the attraction of sweeping Osmose into the category of responsible persons. Since the facts and inferences must be taken favorably to Hines, the party resisting the motion for summary judgment, we must assume that Osmose came up with a defective design, did not build the plant to standard, trained Hines’s employees poorly in how to control the toxic chemicals, and hid all of this from the management at Hines and its successor Mid-South so that they omitted steps that could have rectified the problem sooner and cheaper. When the liability may be large— it is costly to clean up polluted sites — there is a chance that one or more of the firms that have caused the problem will not have the assets necessary to set things right. The prospect of a shortfall in assets means that someone else (the public at large) must incur cleanup costs; victims may be left to bear their own losses; thinly-capitalized firms may take too few precautions. The designation of additional firms as responsible ameliorates this problem and so helps to achieve statutory aims. The prospect of liability under CERCLA would induce a firm in Osmose’s position to take greater care in design, construction, and training, all of which would be beneficial (if it did not lead to excessive precautions, which it might).
It is not our function to design rules of liability from the ground up, however. We are enforcing a statute rather than modifying rules of common law. Osmose surely was not an “owner” of the Mena site, so it is potentially liable only if it was an “operator”. The statute does not fix liability on slipshod architects, clumsy engineers, poor construction contractors, or negligent suppliers of on-the-job training — and the fact that Osmose might have been all four rolled into one does not change matters. The liability falls on owners and operators; architects, engineers, construction contractors, and instructors must chip in only to the extent they have agreed to do so by contract. To the point that courts could achieve “more” of the legislative objectives by adding to the lists of those responsible, it is enough to respond that statutes have not only ends but also limits. Born of compromise, laws such as CERCLA and SARA do not pursue their ends to their logical limits. See
Covalt v. Carey Canada, Inc.,
The statute does not define “operator”, and we turn to common law analogies, as the sponsors of the legislation anticipated. See
Colorado v. ASARCO, Inc.,
One potential analogy is the distinction between co-venturer and independent contractor. At common law, the employer of an independent contractor is not liable for the contractor’s torts, and the contractor is not liable for the employer’s. (SARA has turned that outcome 180°, for if the analogy is sound the independent contractor is not an “operator” of the offending
facility
and therefore escapes liability, but the wisdom of this choice is not ours to question.) The dominant characteristic of the independent contractor is day-to-day control of its own operations.
United States v. Orleans,
A different analogy is the joint venture, which is the one Hines favors. We may assume that the principal operator’s co-venturer would be a statutory “operator”. Hines thinks that Osmose was so wrapped up in the chromated copper arsenate process that it must be a joint venturer. It offers as the clincher Osmose’s contractual right to inspect the plant. The common law definition of a joint venture has at least three elements missing from the arrangement between Hines and Osmose, however: willingness to be joint venturers, shared control, and division of the profits and losses. For cases reciting these elements, among others, see, e.g.,
Secon Service System, Inc. v. St. Joseph Bank & Trust Co.,
So neither the analogy to independent contractors nor the analogy to joint ventures assists Hines. Its reply brief asks us to come up with a new definition, blending elements of common law doctrines to produce one more favorable to Hines. Such efforts often produce nothing but confusion, however. See
Kungys v. United States, - U.S. -,
The desire of operators to minimize their own liability will lead them to pay close attention to their designers and suppliers. When they lack the expertise to supervise closely, they can induce their contracting partners to take care by insisting on warranties and indemnification. To the extent they anticipate the risks involved-as Hines and Osmose surely knew of the risks of contamination-the outcome of this process is not fundamentally different from the outcome produced by a rule of liability. R.H. Coase,
The Problem of Social Cost,
3 J.L. & Econ. 1 (1960). The Superfund Act places liability on the “owner or operator”
AFFIRMED.
