address it here i will then briefly address one point on our counter claim for operator liability and one point on our remedy selection challenge in the phase one bench trial the trial court erred when it concluded that sterling explicitly and implicitly assumed the circle liabilities of lava cap gold mining corporation under california law specifically the swenson case laws that are in acted after parties execute a contract do not become part of that contract unless the parties clearly indicate that that was their intent in the language of the one thousand nine hundred and fifty two asset purchase agreement there is not a clear indication that sterling intended to assume the  unknown and non existent circle liability of lava cap indeed that agreement says nothing about environmental liability at all but it doesn't say there's a limit to the liability they under actually disagree with that characterization in the text of the agreement except itself it contrasts the assumption of all of the assets with the liabilities that they've been duly advised of and so there is some matter however i guess i'm having a tough time with that one because the liabilities without any limitation in the agreement or elsewhere most logically includes all of them we recognize that here there's there is a reading of the agreement where the agreement may be ambiguous you know there's a lot hanging on the word however the california standard is that there must be an clear intention to assume the liabilities and a they're going to get all liabilities of mail so you see without any limit there was no limitation in the agreement no limitation elsewhere why would it not be all we disagree that there is no limitation on where sure the liabilities that were assumed there's no indication that environmental liability was taken you're talking about the financial statements yes the financial statements as well as the indication that the agreement would assume the worker's comp a bill worker's compensation liability as well as insurance and so here the trial court did look at extrinsic evidence such as the conduct of the parties as well as the some contemporaneously executed letters to it seems to me that one would not necessarily expect indeterminant contingent liabilities to be in the financials that may be true but here and therefore if they're not there i don't know why the financial statements would be somehow a limitation well the financial statements do show a limitation on the type of liabilities that the parties were thinking about at the time the agreement was executed this is a lie under four and that what i'm trying to figure out suggesting however each one of those cases seem defined narrow language and it was about that narrow language those expressly the purchaser's assumption of the liability language there is narrow language because in many of the cases we've cited when courts have found that circle liability was assumed by a priest circle a contract if you will something that existed before circle w in nearly all cases the word all liabilities are something very similar to that such as liabilities known on the date of closing and arising there after or something to that extent and that language is not in the  agreement but what else would have been excluded so what libelous did this through well certainly we would see contingent liabilities such as the ones we're talking about here would be excluded but also it's important to remember the type of the agreement that's in place here where there is a parent and a subsidiary so this is not a circumstance where there may be no environmental liability at all but to the extent that the parties knew about it which the trial court did look at two california pollution laws at the time or nuisance liability those sorts of owner liabilities would be running to keystone in this case not sterling ok but then then then you've got then you run headlong into the other findings and conclusions issued by the district court about whether you were the person who assume those liabilities being the corporate owner sure and that actually moves very nicely to this rack i thought you could direct part and direct operator liability because i would push back that there were findings that i've just run headlong into and the reason being this is not an indirect liability case and under the best food standard justice souter tried to fair part and was very clear to distinguish between direct operator liability where you look at what the parent was doing at the site versus indirect liability where you look at what the parents doing with the subsidiary there was no piercing of the corporate veil in this case the government did not proceed under that theory of indirect liability and so to the ex as i was so i'm sorry i thought that the district  court found ample evidence that sterling was and was involved here and involved directly quoting including evidence of you know what personnel were involved what letterhead was used and so on so we have a number of findings of fact so are you contesting those findings the fact that yes and let me be clear about this specific to the direct operator liability standard we are contending that the trial court committed a clear error on its factual findings ok which findings specifically going to which hat gilbert was wearing at the time can you give me the paragraph that you believe the where the district or commit a clear or that would be helpful sure i actually don't have those but during my rebuttal i will be happy to bring them to your attention  specific findings but here what happened was the trial court concluded that it was unclear as to whether gilbert was involved with keystone in one thousand nine hundred and seventy nine when responding to the cleanup an abatement order but that he was an officer and director of sterling and that is the exact opposite of what the government's expert testified to and that testimony can be found in the record at seven hundred and thirty four t thousand eight hundred and thirty six why would you need expert testimony on whether somebody is an officer and a director isn't that isn't that just a factual issue their expert at the time was testifying about documents that are in the record so for example we do have sterling board meeting minutes that show that he becomes the executive vice president of sterling after the clean up and abatement orders issued we also do have a  that was executed by gilbert as the president of keystone in one thousand nine hundred and seventy eight so we do have i agree with you there it's a factual issue there are documents in the record that are being testified about but the reason this is so significant is because there's only a two month window where there's actual onsite activity taking place in response to a cleanup an abatement order and during those two months october and november of one thousand nine hundred and seventy nine gilbert only had one hat to wear and it was a keystone hat and the documents are consistent with this the clean up in a beam in order was issued to keystone gilbert retained cranmer engineering cranmer responds to the regional water control board saying keystones hired me to respond to this and then kramer comes on site and does the work to address the cleanup and abatement order and that's all entirely consistent with gilbert acting in his capacity as president for keystone well it's interesting that the stuff that this record relies on the gilbert directed response or actions by using the sterling letterhead was often addressed in his capacity as a sterling official at the regional water board mailed its order to enforce the water monitoring t gilbert in canada addressing it to him as a sterling official capacity that gilbert directed the response using the sterling letterhead that he was dressed as a sterling official throughout the process and in fact that he acted on sterling's behalf that is actions benefit to sterling and not keystone that he spent over twenty million on oil and gas development rather than in fixing the dam yes your honor there are no those are the way that the district court and those are the clear error things that i've got to find were wrong while your honor the timing of those factual findings are significant because bestfoods is very clear that it's entirely appropriate for a parent and a subsidiary to have shared directors their officers and so later in time particularly in response to the water monitoring for example which happens in one thousand nine hundred and two gilbert was a dual officer but the actions that are being taken at the site are not contrary to keystone interests in fact they are if in fact they should have spent twenty million on getting rid of fixing that them and instead they were off doing their oil and gas development but the record that we have here is a report from cranmer explaining the steps that were taken in november of one thousand nine hundred and seventy nine to respond to the cleanup and abatement order no further communications from the water board until three years later when they ask for water monitoring this is arguing the evidence all we're talking about is their clear error in what the district court found you've got lots of evidence on your side but i'm now looking at clear error of you well i was a district court judge and i don't want the th circuit reach down and picking out their own understand i had facts there under which supported what i do we understand your honor but here we're challenging that there was a direct clear error about the characterization of go brit's role in nine hundred and seventy nine dollars and that that really does impact the legal presumption that we're allowed to have under bestfoods about which hat someone's wearing later in time i see my time starting to wind down side like to briefly address the operator what ability or the government yes th two the trial court erred when it determined that the united states was not an operator under l two hundred and eight under bestfoods an operator must have managed directed or conducted operations specifically related to pollution and here under the clear terms of l two hundred and eight which was specifically applied to live a cat mine lab the cap was prohibited from using any material or equipment to remove waste from the site above or below ground that is direction under the best standards was there any exception under the l to await order that would have allowed them to address any and emergency situation there was an exception in l two hundred and eight but the exception was limited to maintaining buildings machinery and equipment in repair and and keeping the access and development working safe and accessible under a plain reading about all to a way that does not encompass waste was the was was any entity of the federal government physically on site there no evidence that they were presumably what the war production board was doing was it was actually trying to get the mining equipment move someplace else right it's not really interested in stopping goal there's no reason for the for the government to be to be to be stopping gold what they're trying to do is encourage the mining of something else and probably needed the equipment elsewhere we actually don't know if they needed the equipment or the personnel but what we do know is that gold was not an essential met well for the war effort and so yes there was a policy to  mining of something else but this this whole thing sounds in sort of modern vernacular is more like a regulatory taking than it really sounds like the government coming in and operating anything on side there was no evidence of any of anybody being physically on site and i don't know how you say the government in any reasonable sense or conversational sense of the term operating was operating the mine i think they issued an order and said stop it to two points on that the st is even the government's recognized in its briefing that you don't need to be physically present on a site to operate it and the nd point is that justice souter chose his words carefully in the best foods decision and he used manage direct conduct you could direct from afar you could set policies and here is there any any correspondence between the mind of the war production board after after l two it was issued just one letter your honor and what that is this is the most general of orders applies to all gold mines no place that your mind is mentioned while the the language of l two hundred and eight is general however several months after all two it was issued there is a letter directly addressed to lava cap which cancels lava caps serial number and it's that specific decision to apply to the mine which has language directing what can be done with the waste that constitutes operator liability i see my time is up so please the court my name is alan brabender with the united states department of justice and with me at counsel table is john everett with the california department of justice but i will be using all fifteen minutes today for the belly's we think the most important consideration here is the standard of review sterling is approaching this case as if this court were the fact finder as to the liability or the agency as to the remedy but of course this court is not conducting an overall review on sterling's liability or s remedy decision this court is reviewing the trial court's liability findings under the highly deferential clear air standard in the agency's ramiele we're really talking about sterling's liability in that situation as well as the remedy for sterling right direct we're not really talking about the government's liability when we're talking about that no that's that's an issue different issue that's a different issue that's reviewed i just want to make sure i just want to make sure you're not trying to give the district  response costs on three dollars different grounds any one of which is sufficient to find sterling liable direct liability assumption of liability and liability by way of de facto merger so let's start with direct liability sterling is directly liable because it directed the response to the water board's clean up and abatement order following the collapse of the logjam in one thousand nine hundred and seventy nine under united states the best foods if any act operating the facility is done on behalf of the parent corporation the parent corporation is directly liable so one of the questions at trial was whether jack gilbert who directed the response whether he did so soley on behalf of keystone or whether he took any act and he acted all on behalf of sterling and after hearing the evidence and the testimony for four days the trial court found that gilbert directed the response on sterling's behalf much if not all of the time which makes sterling directly liable and there was significant evidence for the trial court's finding st there was the expert testimony of dr quick who looked at the historical records he is a corporate historian he looked at the corporate records and found that in his view sterling was acting on or sorry gilbert was acting on sterling's behalf indeed gilbert was contractually obligated to act on sterling's behalf gilbert used sterling's funds to pay for the cleanup because keystone was essentially insolvent and couldn't pay for the cleanup and this is important because gilbert conducted an insufficient response to the cleanup an abatement order he didn't follow through on the physical improvements that were required by the water board this as the trial court found freed up funds for sterling's resource exploration and exposed keystone to additional liability in addition the contractor conducting the cleanup again and the water board itself addressed gilbert as a sterling official and sterling obliged by responding on sterling liabilities both those known and unknown and we take that issue not yet known and unknown was in the agreement correct that's correct that's a that's a trial court finding and in fact what we really have to say about that is that if we agree with the trial court that the arguments of the appellant and the appellant's make have no basis because otherwise we would interpret the contract differently correct because it's really a contract interpretation that's correct you think and it's language of the contract is clear and unambiguous it is it says sterling assumes the liabilities but i think that is what is clear is that the liabilities and the financial statements don't say anything about these liabilities and nothing in the documents suggest anything about the liability how can one suggest that it is clear that they then assume those liabilities well under california law a clear intent of the parties can be found not just by looking at the contract of course you start with the contract and review the contract as a whole but you also look to the to to see if the contract language to you your interpretation of the contract language and the contract again is quite clear it's a sterling assumes the liabilities and it reserves no liabilities for de facto merger are present there was a complete continuity of shareholders here because sterling purchased la the cap was shares of sterling stock and the courts ha there was a continuity of assets there was a continuity of location and there was a continuity of management because while the cap directors became at least to lobby cap directors became sterling directors so really there's three grounds for liability here any one of which is sufficient and unless the court has any questions about sterling's liability i will switch to the issue about the united states is a liability to the united states never operated mine an operator is someone who's manager has to be in office you don't have to be on mine you need an operator under circle that's true you don't have to be physically present we would concede that because obviously you can direct the workings of the mind from canada for instance but you do have to have direct and specific involvement in the facility itself well wanted how can it be more direct and specific and quit mining and quit disposing of any waste well i would argue that's indirect and general involvement because it's it's it came from a generally applicable order an order of nationwide effect that was not directed the lava cap mine it was directed to all gold mines are you just running the country all you are doing is regulating it's right here to the united states to get around united states versus shell oil that's our case says it doesn't matter whether the government was regulating or not indeed the only question is whether the government's actions were enough just like a private entity to make it an operator well and you have anything to do with regulating we don't look at that anymore based on sh know and sell of the facts are quite different because what i do not i know what the facts are in shell oil but i'm looking at what was the holding their own it seems to me that i don't look at whether when they're merely regulating i have to see whether the government's actions were enough just like a private entity to make an operator and i'm having a tough time understanding when you tell them what they can and cannot do that you don't make that leap well shell oil doesn't stand for the proposition that mere regulatory acts issued from washington d c result an operator of liability there was specific involvement in shell oil with that particular facility so it may be the act of a regulator but there were it was direct involvement with that specific facility there is no direct involvement by the war board in the lava cap mine it simply issued an order of nation wide effect generally a political orders do not result in circle because of l two away not because of the letter itself right it's oftentimes that you are an agency will issue a regulation and then send out letters informing the regulator community about the regulation i mean that's that happens in almost every case  so i don't find that letter to be persuasive but are we going to what are we going to do with kaiser which says that it's authority to control test would make the government li loan that have the responsibility to keep the facility in safe and in good working condition and that would include remedying any public nuisances on the property so do we know what the effect of l two away was although than to stop the mine and we  whether mining equipment was was moved elsewhere or personnel moved elsewhere we do not know but isn't the fact even finding the government to be an operator does not give the government a liability correct all it says is at that point somebody is going to go back and determine if an operator did they have control in this particular situation with the other three factors you've got time for the circle liability correct but if the government and therefore if i find because of this order and because of the letter of the government is in fact on the hook or could be the government still has plenty of defenses in this particular action that they can give we didn't do anything we this this is not enough and what can you prove we even did that the leak even occurred or any of that now unfortunately that's not how circuit works circles a strict liability statute so if the government is an operator the government would be on the hook for some share of response costs well i'm not what that share is we don't just a minute if i if i look at rd place it seems to me that you've got to prove for things to make that right you have to show a release you have to shorts a facility but those those elements nobody is disputing that those elements are present at the law of cap mine so it really comes down to is sterling or is the government an operator and if either party is an operator they're on the hook for response costs can they both be operators of the same time yes there are you can be sure multiple operators of any sort of inside terminating operator you're suggesting then that  determining operator under the government's view if one is an operator there already responsible they don't have to be proved to have done something to cause this to happen well they have to meet the other elements of  to prove it's a facility or that there is a release or threaten release of a hazardous substance yes but those all are elements not being disputed with respect to the lava cap by so with respect to lob a cap of mine if one is an operator one is releases now unless the court has any additional questions about any of the other issues well i guess there is the question of why the government chose a remedy that was two and a half related to the ground water remedy it's not related to this particular decision to cook some homes up to a pipeline to provide clean public water it has to be remembered that if you took this  this action because people were drinking water contaminated with arsenic and it looked at three different alternatives and it compared the advantages and disadvantages of each of those alternatives against the required factors and it shows to hook these homes up to the public water supply because it was the most perfect protective alternative and would be the most protective alternative day in and day out for decades to come and both the state and the affected community preferred that alternative that was a reasonable rational choice that is thoroughly explained in the record and i see my time is up if the court has any additional questions like mr bender i'll give you i know that we consumed your time production board made the specific decision to apply it to lava katmai and the serial number for the mine was cancelled effective june one thousand nine hundred and forty three so the mine was allowed to continue operating for some period of time after the issued not until it specifically applied to it is it cancelled and that is sufficient direction under bestfoods because it directed how the waste was to be handled and very briefly and or you to hear e p a s remedy was arbitrary and capricious because it did not achieve the principal objective of preventing residents from drinking contaminated ground water because it did not require those residents to cease using their wells and we know from the record that at least one