is seventeen one six nine five shell oil company faces united states mr white between the waste that was produced as a result of that gas production from the waste that was produced are you challenging the use of the three part test from indiana michigan power that's  federal claims you were were challenging thier interpretation of the taxes clause itself this is that different year but you're not challenging the use of the test now you are not challenging the use of a test for how you determine damages and that of a breach what we're arguing here is that the taxes clause itself cannot be interpreted in a way that results in the government's being responsible for not only the waste generated as a result of afghans production but also the waste that was generated through production of all the commercial products it seems like there are two types of non av gas contract related things that could be at issue dumping related to waste created while making gas for non government contracts and dumping related waste created while making petroleum products type products made from the residual from government contract would still fall under the government's responsibility for for cleanup no and that's that's our primary contention in this case your honor is that the language of the taxes clause which says the charges that the oil companies are required to pay by reason of fraction of the pro a lot of what you're saying is well the war started december eighth nine hundred forty one fact they did the december seventh when congress declared war and prior to that there was i think that's a fair summary of what you're saying right correct but the there isn't a lack of historical context there you've heard the phrase great arsenal of democracy the british were trying to defend their isles and gave them an advantage in their fighter defense and two were getting ready to go to war and the united states is and has imposed in peacetime draft is massively ramping up production of a fighter plane all that you've that's a sparkle factor it's all going on and yes your honor but this is contract law these were sophisticated parties that made contracts with the government for the sale of  t there was recognition in these contracts that other products were going to be made and sold at a profit by the oil companies the very fact that the contract referred to those other products but yet in the taxes clause has no language which sweep into the charges that the government's responsible for the the waste that is created through the production of those other products means that  unfair and on reasonable interpretation of this contract to hold that the government had agreed to do that despite the historical context tell me if you know  d for a process and and and they want it and they wanted to do that and the government refused to provide those those specialized cars were those being taken for like the manhattan project that i don't know the answer to your honor i do know that in the circle litigation district court and also in the court of federal claims decision there was a recognition it was used to acid treat the other refinery products such as motor oil and kerosene and all the other products that were being needed and sold by but that was in the that was in the government's knew it and to the government and impressed in all those other products being provided to the public the government did have an interest in that in only in the sense that well there were shortages of some of these other products during the war years and also because when there was rationing and in the contracts themselves there were there were price escalation clauses which would have permitted the o companies to see of cost to the basic price of a half gas in circumstances where unexpected changes to their normal after a fiery operations would have increased their cost so the government did have an interest now but it's not an interest that was reflected in what the government paid for through the taxes clause which was very very specific it's under stand the government's argument it's about how if there had not been any avgas contacts of these oil but ok but let me go a little farther i think i understand claims courts reasoning to be well with these afghans contracts the oil companies were put under tremendous stress to produce maximum have gas maximum amounts of after us and to do that they had to dramatically increase their crude for food product in their refineries which necessarily resulted in a lot more volume of than non afghan's petroleum products also being produced along with the afghans products that were being produced and it was that scale that extra dimension of sludge that was being produced by all these different products that needed to be refined to do maximum production of av jass that was just too much for the oil companies at the time to handle through reprocessing through transporting it away so that they had ultimately no choice due to the scale of the requirements put on it by the government to then do for earlier that was their normal operation it wasn't any different in terms of finding a pit in the ground and dumping also the facts were found by the trial court that there had been dumping at this particular site the macaw site prior to any deliveries of afghans to the government under this contract and that there had been dumping relating to the production of afghans that wasn't sold to the government through these contracts so even at that afghans production is partially brazelton increases in other products that increased other waste no there was no allocation new sense of trying to determine what those proportions were we did propose in introduced a trial or offered a trial appeal was it said it's a theory that is based on the testimony of the government expert witness and i mean that the government tried to chop it up in the sense that at trial where they tried to explain even if you don't agree with the government that the government shouldn't have to clean up any sludge from the non afghan's products there is still a way to do some more smaller refined form of apportionment it was our first duty to the inevitability of some amount of sludge that would have been downed regardless of whether these afghan us contract forced the oil companies to produce dramatically more amount of products in general the yard the argument was that you could allocate this by looking at what increased amount of acid sludge was created by the fact that the oil companies were beginning their production of the other refinery products with a lower quality spen again at a lower purity to treat the other products would increase slightly the amount of sludge that was produced so i don't think then the what the oil companies should tab for that cleanup if they had to give me and i think i may be mis stating your question but i think you're saying that if the government is saying that the calculation acid  in the production of the other products is not the government's responsibility are we saying that they should have dumped the spent out collation accept acids that were right and then the government your you would say would be responsible for that because  due to the production of africa yes the government has never taken the position that if spent out collation acid was directly dumped at mccall that the government would be responsible for that in the light of the interpretation were they were wrong to do it our position is that the whether they were right or wrong the taxes clause does not make that waste stream one which is by reason of av gas delivered under the contract and that the interpretation of the contract has to stop with that so if the spent out glacial as it is created and dumped the government is on the hook if the what if the government is selling those other products are shell or selling those other products to the government it wouldn't matter if it was under the products that were delivered under that contract  defined in the taxes clause are the afghans do it was purchased through those contracts so if the rest of that by product was used for military purposes it would be a roll up right in the same way that we recognize that there was that was sold under these contracts and the waste it was created and dumped from that it was time for it but i want to follow up i want go back to your carefully worded statement that the theory regarding apportionment was presented at trial was the argument itself may i think you're talking about when you say theory you're talking about an expert witness right i'm like i might in my mind i'm thinking about the government's post trial brief this may have been the argument in the pretrial of briefs as well but it certainly was presented to the poor prior to the decision as a method of potentially allocating this in a manner different from well that this there were reply briefs in response to the party's post trial briefs and so my recollection is that there is a response to the government's argument from shel afghanistan under the contracts that issue that question obviously track directly from the relevant contractual language and the first one i'd like to make your honour's is that my friend mr white with all due respect is adding words to the contractual language we're entitled to all charges that were incurred by reason of the production of after he's asking you to add the words to the end of that sentence and not having any connection whatever whatsoever with any non afghan's products well that's not what the law sets it's under the circumstances of the times and it's a logical  entity because of what i said that is that in the words of the people of the time don't you know there is a war on everything once  more munitions it was often said you're absolutely correct the record before the trial court was such that the government hasn't come close to showing that the court's finding that all of the ways that the recall side was there by reason of the production of that gets they haven't come close to showing that that's clearly erroneous and there's really a couple of different ways i would suggest that pork look at this question are you saying that there was zero dumping of the calls right before the contracts were entered into that is correct your honor the contracts were entered in the first half of one thousand nine hundred two the site was opened i believe in the last week of june of one nine hundred forty two and the first dumping was there after now of the government has made an argument which i think judge wallach referenced in one of his questions to my friend that there was a small amount of waste that was dumped at the site after it was opened and after the contracts that were entered that the government says was not generated as part of the manufacture of ad gas under these contracts ok it was abkhaz that was manufactured to fill out some remaining contracts that they've had with different parts of the government i think the armed forces prior to entering this exclusive contract with the s c submission on that judge chan is that if the small portion of waste that was dumped before production begins under these contracts and by the way it was only shout of the four companies that had dumped that the other three did not begin dumping until much later when production under these contracts was a dish but we would say that that small amount of ways that was dumped that was the result of nine contractual afghan's production is irrelevant for two different reasons first the court below thousand and the government has a challenge that they don't believe that the oil companies opened the mccall's site in anticipation of the enormous volume of massive ways that would be generated by have gas production when you have your i ask the question to my friend we did quickly scour the stipulations and you are know that it's been agreed for twenty five years in this case that the government controlled which is a known historical fact and the government did not permit them to use the ones in existence during the early years by the later years of the war they do ordered war manufactured but i don't know what they were using them for cents it may very well been and if especially in the early because the oil companies opened the site in anticipation of all of the ways that would be generated by production under these contracts if i was the same without of existed and the the small amount of pre contract for waste would barrels it was i don't believe it was two hundred thousand barrels but if it was a relatively small percentage of the total what percentage point five percent it's more than that  contract will add gas and the number that the court came up with was seven hundred twenty three thousand five hundred seventy eight dollars twenty six cents so it's a very precise figure basically the court calculated this by determining the amount of non contractual not come back that but if you're not convinced by both of my arguments and you feel that this must be taken into account i would strongly urge the court rather than remaining in this case for yet another round the damage proceedings inevitably followed by yet another and i believe it would be the fourth appeal to this court i would strongly urge you to instead of remanding simply modify the judgment in light of the court's finding quantify that number and affirming the judgment as modified so that we can finally bring this case to an end and i said it was a realm for two reasons first being they would invoke the site but for the massive amount of production under the contracts there's a second reason the court of federal claims found that the relatively small portion i really didn't have a number of the tip of my tongue gesture and did not affect the remediation costs incurred by the oil companies and was therefore irrelevant essentially what the court found was that the remedy was what the environmental scientists call a containment remedy where they built this structure that went down the sides and over the top and because the waste was dumped evenly across the twelve sumps at the site they would have had to build the same remedy regardless of whether this small additional amount of waste was there or not and so that to my mind is a second reason why you can disregard this  hundred forty six the court found that there was no waste whatsoever sent to mccall after the instant afghan's production and the evidence showed that the reason for that was that afghans production in multiple different ways i think there were a total of five of them and those are set out with references to the testimony in page twenty eight twenty nine of the redgrave but in all these different ways the fact that you producing m p s necessarily ramps up tremendously the amount of acid sludge was produced in fact a total if you compare the throughput in one nine hundred forty six when there is no six on a per barrel basis every ten thousand barrels of throughput is only generating twenty barrels so by stopping at gas production you start you reduce sludge production by sixty percent and you have the real cars available and you have the real part and that's because no and additional benefit that's absolutely right are twelve and here's the other critical point of this it's not as though during the war that all of the acid waste that was being generated was being dumped to the contrary by recent using recycling and reprocessing to the extent plants were available to the extent take cars were available they the oil companies successfully reuse preprocessor recycled seventy two percent of the waste that were generated what's more the court found that dumping was the last resort they only dumped if they couldn't make any of these other solutions to the problem work so if you think about it all they have to do and dumping is reduce the generation of the acid waste by twenty eight percent if all of this is true then why was there any dumping at all going on in the late thirties and very early one nine hundred forty s a very  very interesting statistic there would have been no dumping in that time either the answer to that question is threefold euro three three different factors that are number one in the early one nine hundred forty s forty one forty two forty three technology for addressing for minimizing the generation of waste took a leap forward there were two key points in this one was the development of catalytic crackers and the second was the development of a process called hybrid high hydro generation i'm not saying it right but it's in the record those two things like those two things together very much reduced the amount of waste being produced on a per war progressed well it took some longer than it should have because of the necessary delays because the government had other wartime priorities those resources came on line and began to to produce the problem in technology in the early one nine hundred forty s one more than support that finding and defeat any argument that it was clearly erroneous to look to after the war as opposed to before the war for your comparison and government have to second way to look at the problem besides the buy for analysis you can look at the process by which it was generated and i think judge and again you had some questions about this that really went to this point it's important to recognize that the government has admitted of it was real use that we've had the space argument on the one hand gas products but it's important to understand that when the party standard these contracts they fully understood that refined reser integrated entities and that the manufacture of amp gas necessarily carry with it the manufacture of these not have gas products i would refer the court to the contract itself that specifically says in this joint appendix of fourteen seventy five that normal operation of the refinery result in substantial quantities of motor fuel and other products that must necessarily be produced installed in connection with the production of one hundred octane yet isn't affected something  still yes that's exactly right what judge was talking about is when the crew first enters they have the still that breaks the crude into fractions fully seventy nine percent of the fractions are not usable when you make after it's only the best twenty one percent of fractions can be used for add gas but you've still got this other all these other fractions that you have to do something with and the only thing you can do wit hadn't done that i would have just taken the plan away you get your honor that's exactly right thank you thank you your hon the idea that the government is responsible under the taxes clause for waste that had nothing to do with the waste stream from that construction from the production at gas because mccall was open the patient of the have gas contracts again this is contract law and the taxes clause cannot be interpreted in a manner that expands this to include not only these products that are not have gas and the waste from those products but also the waste that was created and dumped at a time when its true it was after the contracts were signed or at least after the first ten tracks were signed but before any of have gas was actually delivered to the government under these contracts when they were dumping other products so that all of those even agree that all of those contracts are subject to but still there's there is a very precise requirement in this clause and i vote for you recall i'm sure the testimony i think was written interview of  administrator who said if they hadn't done what i said i wouldn't just taken the plant away but that doesn't create a basis your honor for basically saddling the taxpayers with a all of the waste that was created during the war time that related in a small percentage to the can that the production of add gas in a large percentage to the acid sludge that was created through the other products this is the result of the court of federal claims decision is that the government was in for a little so owes everything and that's what we contend is inconsistent with the pla language of the clause lot of these facts are really not that relevant what was relevant here was the interpretation again when we were here the last time in twenty thirteen the interpretation was well can the taxes clause itself extend beyond taxes to circular remediation cost in this court said it could now the question is and this is fundamental was case is can the taxes cla reach the waist of circlip remediation cost that wasn't created as a direct result of the production of that ad gas there is a historical context we agree there also the fact that there was a way stream which by its very nature was going to result to a certain extent in the waste product of ab gas production being used to produce other products but none of that changes gas products you know well it would have been a very high percentage because the amount of spent now collation acid was roughly a very small percentage it would have been under fifteen percent  because we're not going to argue with those facts but the percentage is very small even in this court's prior decision it recognizes that eighty two percent of the waste that was dumped related to  sludge from the non gas products so largely the government's being asked to take on eighty percent more or eighty percent in addition to the amount which would responsible for everything but if the court was quote was looking at this with an eye towards allocation we disagree with the idea that one nine hundred forty six after the war is the appropriate but for here for a lot of reasons including the fact that these  companies were really in a totally different world and with new facilities and everything was different by nine hundred forty six and we should be more concerned with what they would have done the warriors in the absence of their upgraded facilities that