FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

DAVID BERG; MARGE BERG, 

Plaintiffs-Appellants,

v.

DAVID POPHAM; TSUKIKO POPHAM,

No. 01-35807 Defendants,

D.C. No. and  CV-00-00151-JWS

NORGE CORPORATION, and its

OPINION successors in interest; MAGIC CHEF

CORPORATION; MAYTAG

CORPORATION; ABC INC.; ABC

CO.; ABC CORP.,

Defendants-Appellees. 

Appeal from the United States District Court

for the District of Alaska

John W. Sedwick, District Judge, Presiding

Argued August 7, 2002

Submission Withdrawn October 4, 2002

Resubmitted June 16, 2005

Anchorage, Alaska

Filed June 24, 2005

Before: Betty B. Fletcher, Arthur L. Alarcón, and

Susan P. Graber, Circuit Judges.

Opinion by Judge Alarcón

7531
COUNSEL

Michael W. Flanigan, Walther & Flanigan, Anchorage,

Alaska, for the plaintiffs-appellants. 

I. Franklin Hunsaker, Bullivant Houser Bailey, Portland, Oregon, for the defendants-appellees. 

OPINION

ALARCÓN, Senior Circuit Judge: 

This matter is before us to review the Alaska state law

questions presented by the parties to this dispute.1 This appeal

1

In its notice of removal, Maytag alleged that the district court had federal question jurisdiction pursuant to 28 U.S.C. § 1331, and diversity juris7534 BERG v. NORGE CORP.
presents a novel issue under Alaska law, i.e., is an entity subject to liability under Alaska Statute (“AS”) § 46.03.822(a)(4)

if it manufactured or sold a useful product that, when used as

designed and installed by the manufacturer, releases hazardous substances.

The Maytag Corporation (“Maytag”) moved to dismiss the

second amended complaint filed by David and Marge Berg

(“the Bergs”) for failure to state a claim upon which relief can

be granted pursuant to Rule 12(b)(6) of the Federal Rules of

Civil Procedure. Relying solely on federal decisions interpreting the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. §§ 9601-

9675, Maytag argued that it was not liable under CERCLA or

its Alaska counterpart, AS § 46.03.822(a)(4). The district

court dismissed the second amended complaint without citing

any decision of the Alaska Supreme Court addressing the

issue before this court. 

The Alaska Supreme Court accepted our request for certification for its interpretation of Alaska law. In its response to

our request, the Alaska Supreme Court held that a manufacturer of a useful product can be held liable under

AS § 46.03.822(a)(4) if it was intended to direct a hazardous

substance into a city sewer system. Berg v. Popham, No. S10815, 2005 WL 1189660, at *7 (Alaska May 20, 2005); ___

P.3d ___. Accordingly, we vacate and remand that portion of

the district court’s judgment on the pleadings regarding

Maytag’s potential liability under AS § 46.03.822(a)(4).

diction pursuant to 28 U.S.C. 1332(a). In its order dismissing the second

amended complaint the district court held that it had supplemental jurisdiction pursuant to 28 U.S.C. § 1367(a). It stated that it could not determine if diversity existed between the parties because “the present record

does not afford the court with an adequate basis to evaluate this contention.” The Bergs have not challenged the district court’s subject matter

jurisdiction. The district court had subject matter jurisdiction over the state

law claims whether or not the parties were diverse because the Bergs also

asserted a federal question in their complaint. 28 U.S.C. § 1367(a). 

BERG v. NORGE CORP. 7535
I

The Bergs filed this action in the Superior Court for the

State of Alaska alleging, inter alia, that Maytag was liable for

contribution pursuant to CERCLA and AS § 46.03.822(a)(4)

for a portion of the costs incurred in remediation resulting

from the discovery of percholoroethylene (“PCE”) emanating

from sewer lines in the ground connected to the Bergs’ drycleaning business. 

Maytag removed the action to federal court, alleging federal question and diversity jurisdiction. Maytag moved to dismiss the Bergs’ first amended complaint under Rule 12(b)(6)

of the Federal Rules of Civil Procedure. The Bergs moved for

leave to amend their complaint. The district court granted the

Bergs leave to file a second amended complaint. 

The Bergs alleged in their second amended complaint that

they owned a dry-cleaning business in Anchorage, Alaska,

from 1972 through 1978 and again from 1980 through 1983.

The dry cleaning equipment was purchased from Norge Corporation (“Norge”) before 1972. Maytag is Norge’s successor

in interest.2 Norge recommended that the Bergs use PCE in

the equipment as part of the dry-cleaning process. Norge

designed the layout of the equipment and installed the drycleaning equipment and a water and PCE separator system

that “facilitated spillage, leakage and direction of [PCE] into

the city sewer system.” 

In 1991, highway construction workers for the State of

Alaska discovered PCE in the soil near the Bergs’ former drycleaning business. The State issued notices and filed liens on

the Bergs’ assets to create a pool of funds to be used in decontamination efforts. 

2Maytag denies that it is Norge’s corporate successor and reserves the

right to litigate this issue at trial. However, for purposes of reviewing the

merits of its motion to dismiss and motion for judgment on the pleadings,

Maytag does not dispute that it is Norge’s successor in interest. 

7536 BERG v. NORGE CORP.
Maytag moved to dismiss the Bergs’ second amended complaint for failure to state a claim upon which relief can be

granted. The district court granted Maytag’s motion, in part,

concluding that it could not be liable as an arranger or transporter under CERCLA or AS § 46.03.822(a)(4). Subsequently, the court granted Maytag’s motion for judgment on

the pleadings regarding the Bergs’ remaining state-law claims

pursuant to Rule 12(c) of the Federal Rules of Civil Procedure. The Bergs timely filed a notice of appeal from the district court’s final judgment. This Court has jurisdiction over

this appeal pursuant to 28 U.S.C. § 1291. 

II

The Bergs do not appeal from the portion of the district

court’s judgment dismissing their CERCLA claim. They

assert, however, that the district court erred in dismissing their

claim for contribution against Maytag under AS

§ 46.03.822(a)(4) because “the plain language of the Alaska

‘arranger’ language . . . allows for the present suit, since

Norge did by contract arrange for disposal of PCE through the

piping system it installed at the Bergs’ dry cleaning plant, by

and through the Norge dry cleaning machines it installed

plumbed to the sewers.” 

We review “de novo a district court’s dismissal of a complaint: for failure to state a claim pursuant to Federal Rule of

Civil Procedure 12(b)(6) . . . and for judgment on the pleadings pursuant to Rule 12(c).” Arrington v. Wong, 237 F.3d

1066, 1069 (9th Cir. 2001). “A complaint should not be dismissed unless it appears beyond doubt that the plaintiff can

prove no set of facts in support of the claim that would entitle

it to relief. All allegations of material fact are taken as true

and construed in the light most favorable to the nonmoving

party.” Daniel v. County of Santa Barbara, 288 F.3d 375, 380

(9th Cir. 2002) (quotations and citation omitted). 

[1] AS § 46.03.822(a) imposes strict liability for damages

and “the costs of response, containment, removal, or remedial

BERG v. NORGE CORP. 7537
action incurred” by the State of Alaska on persons responsible

for “an unpermitted release of a hazardous substance.” The

statute also authorizes private parties to file an action to “seek

contribution from any other person who is liable” under the

statute. AS § 46.03.822(j). Persons subject to the statute’s

joint and several liability scheme include owners and operators of facilities “from which there is a release . . . of a hazardous substance.” AS § 46.03.822(a)(2). The Bergs, as

former owners and operators of the dry-cleaning business, are

subject to liability under this subsection and are entitled to

bring an action for contribution against other responsible parties pursuant to AS § 46.03.822(j). 

[2] In addition to imposing liability on “owners” and “operators,” AS § 46.03.822(a)(4) imposes liability on persons who

“arranged” for the disposal of hazardous waste. “Arrangers”

are defined as 

any 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 the

person, other than domestic sewage, or by any other

party or entity, at any facility or vessel owned or

operated by another party or entity and containing

hazardous substances, from which there is a release,

or a threatened release that causes the incurrence of

response costs, of a hazardous substance[.] 

§ 46.03.822(a)(4) (emphasis added). 

[3] CERCLA, by contrast, defines the liability of a person

who arranges the release of a hazardous substance as 

any 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

7538 BERG v. NORGE CORP.
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) (emphasis added). Unlike the Alaska

statute, § 9607(a)(3) does not contain the disjunctive “or”

before the words “by any other party or entity.” 

The Bergs alleged in their second amended complaint that

Maytag installed defective dry-cleaning equipment at the

Bergs’ dry-cleaning business that included a “still system

[that] when used as directed spilled [PCE] into the city sewer

system[ ]” and a “water/[PCE] separator system that when

used as directed, spilled [PCE] into the city sewer system.”

The Bergs argue that the district court erred in determining

that these allegations were insufficient to state a claim for

arranger liability under AS § 46.03.822(a)(4). 

In construing CERCLA, we have recognized that “ ‘[n]o

court has imposed arranger liability on a party who never

owned or possessed, and never had any authority to control or

duty to dispose of, the hazardous materials at issue.’ ” United

States v. Shell Oil Co., 294 F.3d 1045, 1058 (9th Cir. 2002)

(quoting United States v. Iron Mountain Mines, Inc., 881 F.

Supp. 1432, 1451 (E.D. Cal. 1995)). Maytag contends that it

cannot be liable as an arranger because the Bergs have not

alleged that it owned or possessed the hazardous substance

that was released into the sewer system. 

Because we found no controlling precedent in decisions of

the Alaska Supreme Court interpreting the scope of the word

“arranged” as used in AS § 46.03.822(a)(4), we certified the

following two questions to the Alaska Supreme Court: (1)

“Alaska Statute section 46.03.822(a)(4), in contrast to 42

U.S.C. § 9607(a)(3), contains the word ‘or’ preceding the

phrase ‘by any other party or entity.’ In light of the inclusion

of the word ‘or,’ does section 46.03.822(a)(4) require that a

BERG v. NORGE CORP. 7539
person own, possess, have ‘authority to control,’ or ‘have a

duty to dispose of’ the hazardous substance that is released,

before that entity can be subject to arranger liability as is

required under 42 U.S.C. § 9607(a)(3)?;” and (2) “[i]f the

answer to Question 1 is ‘no,’ may an entity be subject to

arranger liability under Alaska Statute section 46.03.822(a)(4)

if it manufactures, sells, and installs a useful product that,

when used as designed, directs a hazardous substance into the

city sewer system?” 

In answering our first certified question, the Alaska

Supreme Court noted that “the Alaska legislature intended

that CERCLA be used as a framework for interpreting section

.822.” Berg, 2005 WL 1189660, at *3 (citing Bill Review letter from Douglas B. Baily, Attorney General, to Governor

Steve Cowper on H.B. 68 (May 11, 1989), in Alaska State

Archives, Series 1185, Record Group 91, Box No. 7892, File

No. 883-89-0039). The Alaska Supreme Court explained that

its review of federal cases, however, “disclosed no federal

decision involving facts truly analogous to those of the present case.” Berg, 2005 WL 1189660, at *4. The Supreme Court

of Alaska noted that, although Alaska law is generally modeled on CERCLA, 

there is an important difference between section .822

and CERCLA. While CERCLA lists four classes of

persons potentially responsible for the release of

hazardous substances, subsection .822(a) lists five.

Those potentially responsible under § 9607(a) are:

(1) the owner and operator of a vessel or a facility

from which hazardous substances were released; (2)

the owner or operator of a facility where hazardous

substances were disposed of, at the time of disposal;

(3) arrangers; and (4) transporters of hazardous substances. Subsection .822(a)(1) adds to CERCLA’s

classes of PRPs “the owner of, and the person having

control over, the hazardous substance at the time of

the release. 

7540 BERG v. NORGE CORP.
Id. (citing 42 U.S.C. § 9607(a) (West 2004)). 

[4] The Alaska Supreme Court explained that, in interpreting AS § 46.03.822(a)(4), “we cannot disregard subsection

.822(a)(1) or render it redundant. Because Alaska treats as

PRPs those who have ownership and control of a hazardous

substance as well as those who arrange for its disposal, these

classifications cannot be synonymous.” Id. The Alaska

Supreme Court explained that 

[t]his difference between Alaska and federal law

reflects our legislature’s intent to expand liability

beyond CERCLA’s standards, even if section .822’s

legislative history is silent as to the interpretation

and application of arranger liability specifically.

While section .822 was modeled on CERCLA generally, it was revised in the months following the

Exxon Valdez catastrophe, so its scope would be

broader than that of its forebear . . . 

In light of the textual distinctions between the federal and state statutes, and based upon our review of

the legislative history of section .822, we adopt a

standard of arranger liability that is broader than that

of the Ninth Circuit. Like most courts assigning

arranger liability under CERCLA, we hold that

arranger liability under AS 46.03.822(a)(4) requires

some “actual involvement in the decision to dispose

of waste” that was substantial or integral. However,

we note that actual involvement in a decision to dispose of waste can encompass involvement in deciding how to dispose of waste or in facilitating such

disposal. Involvement in deciding how to dispose of

waste can, in turn, include actions such as designing,

installing, or connecting a system that disposes of

waste on behalf of a third party. 

Id. at *4 (quoting Gen. Elec. Co. v. AAMCO Transmissions,

Inc., 962 F.2d 281, 286 & n. 27 (2d Cir. 1992) (per curiam)).

BERG v. NORGE CORP. 7541
[5] In interpreting AS § 46.03.822(a)(4), the Alaska

Supreme Court relied upon R.R. Street & Co. v. Pilgrim

Enterprises, Inc., 81 S.W.3d 276 (Tex. Ct. App. 2001). In that

matter, the Texas appellate court held that a dry-cleaning supplier was an arranger under the Texas equivalent of CERCLA

because the defendant “ ‘gave direct advice . . . as to how to

dispose of waste containing PCE,’ ” it thus “ ‘had some actual

involvement in the decision to dispose of the waste.’ ” Berg,

2005 WL 1189660, at *5 (quoting R.R. Street & Co., 81

S.W.3d at 295). In doing so, the Alaska Supreme Court noted:

Like the supplier in R.R. Street, Norge visited and

inspected the Bergs’ business and provided service

and technical advice. While Norge did not actually

conduct tests involving PCE, it did connect the dry

cleaning equipment to the plumbing system. We

apply the “actual involvement” standard articulated

in R.R. Street because this standard conforms with

the intent of the Alaska legislature when it revised

section .822 and broadened arranger liability. 

Berg, 2005 WL 1189660, at *5 (citing R.R. Street & Co., 81

S.W.3d at 284). The Alaska Supreme Court held: 

Alaska Statute 46.03.822(a)(4) does not require that

a person own, possess, have authority to control, or

a duty to dispose of a hazardous substance for that

person to face arranger liability for the release of that

substance. Rather, under 46.03.822(a)(4), any person

who was actually involved in a decision to dispose

of, or a decision on how to dispose of, a hazardous

substance may be liable. 

Berg, 2005 WL 1189660, at *7. 

After answering our first certified question in the negative,

the Alaska Supreme Court resolved our second certified question concerning whether a person or entity lacking ownership,

7542 BERG v. NORGE CORP.
possession, authority, or a duty to dispose can be liable for

making, selling, or installing a useful product that purposely

directs hazardous substances into the environment. In answering this question, the Alaska Supreme Court first discussed

the “useful product” exception, noting that “[federal courts]

have consistently held that a manufacturer who does nothing

more than sell a useful, albeit hazardous, product to an end

user has not arranged for disposal of a hazardous substance.”

Berg, 2005 WL 1189660, at *5 (citations omitted) (internal

quotations omitted). “[E]ven a company distributing a hazardous chemical that later causes environmental harm can avoid

liability as an arranger under CERCLA.” Id. “The key inquiry

is often whether the alleged arranger’s intent was to dispose

of waste or to sell a product.” Id. (citing New York v. Solvent

Chem. Co. Inc., 225 F. Supp. 2d 270, 281-82 (W.D.N.Y.

2002)). 

The Alaska Supreme Court also stated: 

[T]he Alaska legislature clearly intended section

.822 to contain some exception from arranger liability for useful products. . . . The legislature enacted

a law specifically designed to avoid imposing liability on “virtually everyone in the chain of commerce

who had ever handled [a released hazardous] substance, even if that person had absolutely nothing to

do with the release.” 

Berg, 2005 WL 1189660, at *6 (quoting Floor Memo for H.B.

68, Senate Judiciary Committee (undated), in Alaska State

Archives, Box #17568 (alteration in original)). 

The Alaska Supreme Court noted, however, that none of

the federal cases discussing the useful-product exception

applied the doctrine to shield a party whose products or services were known to facilitate another party’s disposal of hazardous materials. 

BERG v. NORGE CORP. 7543
[M]ost federal cases apply the exception to shield

suppliers of tangible physical goods put to further

productive use by their recipients. But this case deals

with machines and services specifically designed to

release hazardous substances as part of their essential function. As we noted above, the water/Perc separator flushed waste water into sewer lines, and postvaporization PCE-contaminated sludge was also

flushed into sewer lines. Thus, we are not persuaded

that the useful product exception to section .822 liability is applicable in this case. 

Berg, 2005 WL 1189660, at *6 (citation omitted). 

[6] The Alaska Supreme Court concluded that “[t]he provider of a ‘useful product’ is not automatically liable under

AS 46.03.822(a)(4) for the subsequent release of a hazardous

substance related to that product. But an entity may be liable

if it manufactures, sells, or installs a useful product that is

intended to direct, and when used as designed, directs a hazardous substance into a city sewer system.” Id. at *7. 

[7] Applying the Alaska Supreme Court’s interpretation of

AS § 46.03.822(a)(4) to this matter, we conclude that the

Bergs alleged sufficient facts to support a claim for arranger

liability under AS § 46.03.822(a)(4). The Bergs alleged in

their second amended complaint that Maytag recommended

that the Bergs use PCE in the equipment as part of the drycleaning process, designed the layout of the equipment and

installed the dry-cleaning equipment and a water and PCE

separator system that “facilitated spillage, leakage and direction of [PCE] into the city sewer system.” Accepting those

allegations as true and construing them in the light most

favorable to the Bergs, it does not appear beyond doubt that

the Bergs can prove no set of facts in support of their claim

that would entitle them to relief. See Daniel, 288 F.3d at 380

(“A complaint should not be dismissed unless it appears

beyond doubt that the plaintiff can prove no set of facts in

7544 BERG v. NORGE CORP.
support of the claim that would entitle it to relief.”). Under the

“actual involvement” approach adopted by the Alaska

Supreme Court, the Bergs have sufficiently alleged a claim

against Maytag for arranger liability under AS

§ 46.03.822(a)(4).

III

The Bergs also contend that the district court erred in dismissing their state law claims for contribution, equitable

apportionment, and implied indemnity, which the Bergs argue

are viable statutory causes of action independent of their

claim for contribution under AS § 46.03.822(a)(4). We disagree. Alaska law does not provide the Bergs a cause of

action under any of these theories. 

[8] The right to contribution in Alaska arises only by operation of statute. Arctic Structures, Inc. v. Wedmore, 605 P.2d

426, 436 (Alaska 1979). Along these lines, the citizens of

Alaska, by ballot initiative, eliminated the statutory right to

contribution for injuries occurring after March 5, 1989. Benner v. Wichman, 874 P.2d 949, 955-56 (Alaska 1994). The

Bergs therefore cannot have a state law claim for contribution

for injury occurring after this date. Prior to March 5, 1989, a

contribution claimant was required to show that 1) the claimant and the contribution defendant are both tortfeasors who

are joint and severally liable for the same injury, 2) the claimant has paid more than its pro rata share of the common liability, 3) the claimant has extinguished the contribution

defendant’s liability, and 4) if the liability is extinguished by

settlement, the amount was reasonable. AS § 09.16.010; Ogle

v. Craig Taylor Equip. Co., 761 P.2d 722, 725-26 (Alaska

1988).3 Here, at least one reason the Bergs’ pre-1989 state law

contribution claim fails is because they did not allege in their

complaint that they have paid more than their pro rata share.

3The change in Alaska tort law enacted in 1986 that was at issue in Ogle

is not relevant in the present case. 

BERG v. NORGE CORP. 7545
[9] The Bergs also lack a valid claim for equitable apportionment under AS § 09.17.080. Equitable apportionment

allows defendants, even after the repeal of the UCTA, “to mitigate their damages by filing third-party claims against other

potentially responsible persons.” Alaska Gen. Alarm, Inc. v.

Grinnell, 1 P.3d 98, 101 (Alaska 2000). Alaska Rule of Civil

Procedure 14(c) establishes “the procedure that defendants

could use for equitable apportionment of damages to third

parties who had no direct liability to the defendant but were

potentially responsible to the plaintiff.” Id. Pursuant to Rule

14(c), a defendant may “add as a third-party defendant any

person whose fault may have been a cause of the damages

claimed by the plaintiff.” The Bergs are not attempting to add

Maytag as a third-party defendant in an existing lawsuit.

Instead, the Bergs have filed a separate action for contribution. A separate action is not a way to seek equitable apportionment under Rule 14(c). The Bergs’ claim for equitable

apportionment therefore fails. 

[10] The Bergs’ claim for indemnity against Maytag also

fails. The Bergs failed to allege in their complaint that Maytag

expressly or impliedly agreed to indemnify them. “Express

and implied contractual indemnity claims require proof of a

contract to indemnify . . . .” AVCP Reg’l Hous. Auth. v. R.A.

Vranckaert Co. Inc., 47 P.3d 650, 655-56 (Alaska 2002).

Additionally, to state a claim for recovery under an implied

contractual indemnity theory, the Bergs were required to

allege that Maytag’s liability was extinguished. Id. at 658.

The Bergs did not allege that Maytag’s potential liability to

the State of Alaska was extinguished.

IV

Finally, the Bergs argue that the district court abused its

discretion in imposing sanctions against their attorney pursuant to 28 U.S.C. § 1927. Because parties lack standing to

appeal an order imposing sanctions against their attorney, we

7546 BERG v. NORGE CORP.
lack jurisdiction to review the award of sanctions. Cabrera v.

City of Huntington Park, 159 F.3d 374, 382 (9th Cir. 1998).

CONCLUSION

We hold that the district court erred in determining that the

Bergs’ allegations that Maytag installed the dry-cleaning

equipment that included a “still system [that] when used as

directed spilled [PCE] into the city sewer system[ ]” and a

“water/[PCE] separator system that when used as directed,

spilled [PCE] into the city sewer system,” were not sufficient

to support a claim for arranger liability under AS

§ 46.03.822(a)(4). We agree with the district court that the

Bergs’ claims for contribution, equitable apportionment, and

implied indemnity do not state a cause of action under Alaska

law. We also decide that the Bergs lack standing to appeal the

district court’s order imposing sanctions against their attorney. 

VACATED and REMANDED in part; AFFIRMED in

part; DISMISSED in part. The parties shall bear their own

costs on appeal. 

BERG v. NORGE CORP. 7547