-
USCA1 Opinion
yFebruary 15, 1995UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
_________________________
No. 94-1841
UNITED STATES OF AMERICA,
Plaintiff, Appellee,
v.
UGO DIBIASE, ETC., ET AL.,
Defendants, Appellants.
_________________________
ERRATA SHEET ERRATA SHEET
The opinion of the Court issued on January 25, 1995, is
corrected as follows:
On cover sheet, line 6, change "Louis" to "Lois"
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
_________________________
No. 94-1841
UNITED STATES OF AMERICA,
Plaintiff, Appellee,
v.
UGO DIBIASE, ETC., ET AL.,
Defendants, Appellants.
__________________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. A. David Mazzone, U.S. District Judge] ___________________
__________________________
Before
Selya, Circuit Judge, _____________
Bownes, Senior Circuit Judge, ____________________
and Stahl, Circuit Judge. _____________
__________________________
Stephen M. Leonard, with whom Mintz, Levin, Cohn, Ferris, ___________________ ____________________________
Glovsky & Popeo was on brief, for appellants. _______________
John E. Darling, with whom Joseph C. Correnti, Ellen M. ________________ ____________________ _________
Winkler, and Serafini, Serafini and Darling were on brief, for _______ _______________________________
defendant-appellee South Essex Sewerage Dist.
Joan M. Pepin, with whom Lois J. Schiffer, Assistant _______________ __________________
Attorney General, David C. Shilton, Catherine Adams Fiske, and _________________ ______________________
Andrea Nervi Ward Attorneys, U.S. Dept. of Justice, Environment & _________________
Natural Resources Div., and John T. McNeil, Sr. Asst't Regional ______________
Counsel, U.S. Environmental Protection Agency, were on brief, for
the United States.
_________________________
January 25, 1995
_________________________
SELYA, Circuit Judge. The United States negotiated a SELYA, Circuit Judge. ______________
settlement with a potentially responsible party, the South Essex
Sewerage District (SESD), fixing SESD's share of certain
emergency removal costs incurred by the government in the cleanup
of a Superfund site.1 The district court placed its imprimatur
on the settlement by entering a consent decree (the SESD decree).
Appellant, Ugo DiBiase, a non-settling responsible party left to
hold the bag for the remainder of the emergency removal costs,
prosecuted this appeal in hopes of convincing us that the consent
decree is unfair. We are not persuaded.
I. BACKGROUND I. BACKGROUND
The Salem Acres Superfund Site (the Site) consists of
five acres of undeveloped land containing wetlands and a brook,
located in Salem, Massachusetts. From 1946 until 1969, James
Grasso owned it. During that interval, Grasso permitted SESD to
dump at the Site. SESD deposited sewerage wastes into unlined
"sludge pits" which were surrounded by earthen berms and fences.
SESD maintained the Site, including the berms and interior
fencing, during the period that Grasso permitted it to dump
there.
In December of 1969, Grasso sold a large tract of land
that encompassed the Site to Salem Acres, Inc., a corporation
____________________
1At that point in time, the emergency removal costs totalled
$2,258,893. They comprised sums already spent by the United
States for containment and capping work at the Site, together
with interest and costs of enforcement. See 42 U.S.C. 9604, ___
9607.
3
owned jointly by two brothers, Ugo and Elio DiBiase.2 Unaware
that the property had changed hands, SESD transported a shipment
of solid wastes to the sludge pits early in 1970. When appellant
learned of this occurrence, he informed SESD that he would not
tolerate disposal at the Site in the future. SESD refrained from
further dumping.
During the 1970s, appellant received correspondence
from various municipal agencies, including the Board of Health
and the Fire Department, expressing concern over the unrestricted
access to the Site and the random dumping that was taking place.
Appellant responded by erecting gates at the entrances to the
property, but he did not thereafter maintain them. Consequently,
intermittent dumping by unknown parties continued.
Appellant claims that he had no direct knowledge of the
sludge pits until 1980, when a state agency notified him that
legal action would be taken unless he rectified conditions at the
Site. Even when confronted with this threat, appellant failed to
take meaningful action. He agreed to install new gates, but, in
the end, neglected to do so. And although the earthen berms and
interior fencing around the sludge pits had completely decayed,
____________________
2In 1982, Elio DiBiase divested himself of any beneficial
interest in the property, and the corporation transferred title
to the Site to DiBiase Salem Realty Trust, an entity under
appellant's sole control. Hence, the defendants in the
underlying action include DiBiase Salem Realty Trust; Ugo
DiBiase, in his capacity as trustee; and Ugo DiBiase,
individually. For ease in reference, we ignore both Elio's
passing involvement and the inclusion of the trust as a
defendant, and treat Ugo DiBiase as the property owner and sole
appellant.
4
appellant made no discernible effort to investigate the situation
or ameliorate the obvious hazards (or so the district court
supportably found).
In 1987, an easily foreseeable contretemps occurred.
Heavy rains caused the sludge pits to overflow and release
deleterious substances into the nearby wetlands (including the
brook). The United States Environmental Protection Agency (EPA)
reacted to the release by conducting the two emergency removal
actions that underlie this appeal. After completing that work,
the government sued appellant and SESD, seeking not only to
recover EPA's emergency removal costs but also to secure a
declaration of the defendants' liability for future cleanup
costs.
In due season, the district court granted the
government's motion for partial summary judgment against
appellant, finding him liable for past and future response costs
at the Site under the Comprehensive Environmental Response,
Compensation, & Liability Act (CERCLA), 42 U.S.C. 9601-9675.
The government lodged a similar motion against SESD, but the
district court never ruled on it. Thus, at the time it signed
the consent decree, SESD remained a potentially responsible party
(PRP) rather than a demonstrably responsible party (like DiBiase)
whose liability had been judicially established.
Throughout the proceedings, the government endeavored
to arrange a global settlement. Though EPA's negotiations with
appellant came to naught, its negotiations with SESD bore fruit.
5
After notice, opportunity for public comment, and an in-court
hearing, the district court, over appellant's vigorous objection,
entered the SESD decree on April 5, 1994. Under it, SESD agreed,
inter alia, to reimburse the United States for 85% of the past _____ ____
removal costs calculated as of the settlement date. SESD's
payment amounted to $1,822,775.
On May 6, 1994, the district court entered judgment
against appellant for $494,207, representing the unremunerated
portion of the government's historic removal costs calculated as
of that date.3 After the court denied DiBiase's motion for
reconsideration, this appeal ensued.
II. STANDARD OF REVIEW II. STANDARD OF REVIEW
The legislative history of the Superfund Amendments and
Reauthorization Act of 1986 (SARA), P.L. 99-499, 101 et seq., __ ____
clearly indicates that, when reviewing a proposed consent decree
in the CERCLA context, a trial court does not write on a pristine
page. Instead, its function is circumscribed: it must ponder
the proposal only to the extent needed to "`satisfy itself that
the settlement is reasonable, fair, and consistent with the
purposes that CERCLA is intended to serve.'" United States v. _____________
Cannons Eng'g Corp., 899 F.2d 79, 85 (1st Cir. 1991) (quoting ___________________
House Report).
This circumscription has important ramifications for
appellate oversight. We elucidated the standard of review
____________________
3The amount also includes incremental interest and
enforcement costs arising after the effective date of the
settlement between SESD and the United States. See supra note 1. ___ _____
6
governing the entry of CERCLA consent decrees in Cannons, and _______
reaffirmed that standard in United States v. Charles George ______________ _______________
Trucking, Inc., 34 F.3d 1081 (1st Cir. 1994). We noted that, by ______________
the time CERCLA consent decrees reach this court,
they are "encased in a double layer of
swaddling." In the first place, a trial
court, without abdicating its responsibility
to exercise independent judgment, must defer
heavily to the parties' agreement and the
EPA's expertise . . . . The second basis
for deference is equally compelling. Because
an appellate court ordinarily cannot rival a
district court's mastery of a factually
complex case . . . the district court's views
must be accorded considerable respect.
Largely in consequence of these layers
of protective swaddling, an appellate
tribunal may overturn a district court's
decision to approve or reject the entry of a
CERCLA consent decree only for manifest abuse
of discretion. [In other words], the
decision below stands unless the objectors
can show that, in buying into [the decree],
the lower court made a serious error of law
or suffered a meaningful lapse of judgment.
Id. at 1085 (quoting and citing Cannons, 899 F.2d at 84). It is ___ _______
this yardstick which must be used to measure the lower court's
acceptance of the SESD decree.
III. DISCUSSION III. DISCUSSION
On appeal, DiBiase does not attack the district court's
liability determination. Rather, he fires a rifle shot aimed
strictly and solely at the appropriateness of the court's
allocation of the emergency removal costs. The shot misses the
mark.
In actuality, appellant draws a bead on an even tinier
target. He virtually concedes that two of the three criteria for
7
the approval of an environmental consent decree have been
satisfied, and snipes only at the fairness vel non of the SESD ___ ___
decree. Moreover, while fairness in respect to CERCLA
settlements has both a procedural and a substantive aspect, see ___
Cannons, 899 F.2d at 86, appellant does not train his sights on _______
any alleged procedural unfairness. Since our inquiry must be
limited accordingly, the issue before us reduces to whether the
SESD decree, as approved below, is substantively fair.
Substantive fairness has a protean quality and,
therefore, is often discussed in general terms. In Cannons, we _______
wrote:
Substantive fairness introduces into the
equation concepts of corrective justice and
accountability: a party should bear the cost
of the harm for which it is legally
responsible. The logic behind these concepts
dictates that settlement terms must be based
upon, and roughly correlated with, some
acceptable measure of comparative fault,
apportioning liability among settling parties
according to rational (if necessarily
imprecise) estimates of how much harm each
PRP has done . . . .
Whatever formula or scheme EPA
advances for measuring comparative fault and
allocating liability should be upheld so long
as the agency supplies a plausible
explanation for it, welding some reasonable
linkage between the factors it includes in
its formula or scheme and the proportionate
shares of settling PRPs.
Id. at 87 (citations omitted). Viewing the SESD decree in this ___
deferential perspective, we find EPA's rationale for the proposed
allocation to be plausible, and also find the district court's
endorsement of that rationale to be well within the parameters of
8
fundamental fairness.
In the first instance, the allocation reflects EPA's
determination that both SESD and DiBiase are legally responsible
to reimburse the public fisc for the emergency removal costs. It
is impossible to quarrel with this determination. SESD, though
not adjudged liable, no longer contests its liability. By like
token, DiBiase has not appealed the district court order
adjudging him liable for the damages; and, legally, the liability
of responsible parties in a CERCLA case is joint and several, see ___
O'Neil v. Picillo, 883 F.2d 176, 178-79 (1st Cir. 1989), cert. ______ _______ _____
denied, 493 U.S. 1071 (1990). ______
Next, the allocation fashioned by EPA reflects the
agency's assessment that SESD, as the generator and transporter
of most of the toxic waste dumped in the sludge pits, is chiefly
responsible for the offending conditions. The consent decree
recognizes this primary responsibility by assigning the lion's
share of the removal costs to SESD. The flip side of the same
coin is that the consent decree implicitly recognizes appellant's
lesser involvement by leaving a relatively small share of the
removal costs (15%) to be collected from him.
The district court concluded that this apportionment is
fair. The court cited its earlier judgment on liability, noted
appellant's utter failure to take any action either to
investigate conditions or to ameliorate danger during almost two
decades of involvement in Site ownership and more than seven
years of actual knowledge about the sludge pits, and specifically
9
rejected appellant's claim that he "did no wrong." Appellant
importunes us to set aside the district court's order. Despite
having been adjudged liable, appellant stubbornly refuses to
recognize his own culpability and maintains that it is unfair to
expect him to bear any of the removal costs. His importuning ___
fails for no fewer than five reasons.
In the first place, appellant does not cite and we
have been unable to locate any CERCLA case in which a
demonstrably liable party has been held entitled to safe passage ______
in a global settlement. We think it is counterintuitive to
suppose that any such entitlement exists.
Second, and relatedly, we regard appellant's argument
as a surreptitious attempt to relitigate his "innocent landowner"
defense, see 42 U.S.C. 9607(b)(3) (exonerating PRPs who ___
"exercised due care" and can demonstrate, inter alia, that a _____ ____
release was caused "solely" by a third party's act or omission);
see also Westwood Pharmaceuticals, Inc. v. National Fuel Gas ___ ____ ________________________________ __________________
Distrib'n Corp., 964 F.2d 85, 89-91 (2d Cir. 1992) (discussing _______________
operation of innocent landowner defense),4 rejected by the
____________________
4For purposes of this statutory provision, a PRP is
responsible for the acts and omissions of his employees, agents,
or other persons who have a "contractual relationship" with him.
42 U.S.C. 9607(b)(3). The term "contractual relationship"
includes relationships involving "land contracts, deeds, or other
instruments transferring title," 42 U.S.C. 9601(35), subject to
certain exceptions. One such exception is for innocent
landowners, that is, acquirers of land who, having made "all
appropriate inquiry" into the condition of the property at the
time of acquisition, id. 9601(35)(B), nevertheless "had no ___
reason to know" that any environmental problem might exist, id. ___
9601(35)(A).
10
district court when it granted the government's motion for
partial summary judgment. We have no warrant to entertain a
collateral attack on that judgment. It follows that, as a party
jointly and severally liable for payment of all the emergency
removal costs, appellant cannot reasonably expect others to foot
the entire bill.
In the third place, the allocation proposed by EPA and
ratified by Judge Mazzone does not strike us as either
substantially disproportionate or manifestly unfair. To be sure,
SESD played a leading role in the contamination of the Site and
appellant, who came on the scene later, played an appreciably
less prominent role. But, an actor cast in a bit part is not to
be confused with a mere spectator, whose only involvement is to
lounge in the audience and watch events unfold. Appellant
contributed to the 1987 incident in a variety of ways. Despite
being warned of a potentially dangerous condition, he twiddled
his thumbs: he failed to safeguard the Site, thus permitting
third parties to dump at will and exacerbate an already parlous
situation; fiddled while the earthen berms deteriorated; and
turned a blind eye to evolving public health and safety concerns.
Allocating 15% of the historic removal costs as appellant's share
seems commensurate with these shortcomings and with the quantum
of comparative fault fairly ascribable to him.
Fourth, appellant's concept which seems to be that
liable parties should go scot free in environmental cases if
other parties are considerably more culpable runs at cross-
11
purposes with CERCLA's policy of encouraging settlements as
opposed to endless court battles. See H.R. Rep. No. 253, 99th ___
Cong., 1st Sess., pt. 5, at 58-59 (1985), reprinted in 1986 _________ __
U.S.C.C.A.N. 3124, 3181-82; see also United Technologies Corp. v. ___ ____ _________________________
Browning-Ferris Indus., Inc., 33 F.3d 96, 102-03 (1st Cir. 1994) ____________________________
(explaining the interface between settlement and liability).
Such settlements reduce excessive litigation expenses and
transaction costs, thereby preserving scarce resources for
CERCLA's real goal: the expeditious cleanup of hazardous waste
sites.
In most instances, settlement requires compromise.
Thus, it makes sense for the government, when negotiating, to
give a PRP a discount on its maximum potential liability as an
incentive to settle. Indeed, the statutory scheme contemplates
that those who are slow to settle ought to bear the risk of
paying more if they are eventually found liable. See 42 U.S.C. ___
9613(f)(2) - (3); see also Cannons, 899 F.2d at 91-92. Congress ___ ____ _______
apparently thought that paradigm fair, and so do we.
This case illustrates the point. The government gave
SESD a 15% discount on its maximum potential exposure. This
proved to be a sufficient incentive to achieve a settlement,
despite the fact that SESD's liability had not yet been
adjudicated. Appellant who, unlike SESD, already had been
found liable received ample opportunities to buy peace, but
took no advantage of them. Against this unsympathetic backdrop,
appellant cannot rewardingly complain that he must now shoulder a
12
larger share of the overall expense than might have been the case
if he had moved faster or if SESD had proven intransigent.
Fifth, and last, fairness rarely can be described in
absolute terms. There is no litmus test for it and no one
allocation that will, in a CERCLA case, comprise the only fair
allocation. Rather, fairness is a mutable construct that
"tak[es] on different forms and shapes in different factual
settings." Cannons, 899 F.2d at 85. Absent a mistake of law _______
and we see none here this reality, coupled with the twice-
insulated deference afforded CERCLA consent decrees, see Charles ___ _______
George Trucking, 34 F.3d at 1085; Cannons, 899 F.2d at 84, places _______________ _______
a heavy burden on an objector who strives to convince an
appellate court that error inheres in the entry of such a
decree.5 In this case, the burden has not been carried. Judge
Mazzone's finding that the SESD decree falls within the wide
universe of fair solutions is abundantly supported.
IV. CONCLUSION IV. CONCLUSION
We need go no further.6 Because appellant has neither
____________________
5This burden is particularly weighty when the district judge
is called upon to assess the comparative fault of different
classes of PRPs. So it is here. The court below had to contrast
the fault ascribable to a generator and transporter (SESD) with
the fault ascribable to a landowner (DiBiase). In such
circumstances, the trial judge is in effect forced to compare
apples with oranges. Accordingly, his prolonged exposure to the
litigation and his firsthand knowledge of the case's nuances
become extremely important, heightening the need for deference.
6This appeal presents no issues anent cleanup costs over and
above the emergency removal costs. The parties informed us at
oral argument that all issues of that nature have been resolved
amicably.
13
offered any compelling reason to brand the consent decree unfair
nor persuaded us that the district court blundered in approving
it, his appeal falters.
Affirmed. Affirmed. ________
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Document Info
Docket Number： 94-1841
Filed Date： 1/25/1995
Precedential Status： Precedential
Modified Date： 3/3/2016