FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA;

CALIFORNIA DEPARTMENT OF TOXIC 

SUBSTANCES CONTROL,

Plaintiffs-Appellees,

v.

STERLING CENTRECORP INC.,

Defendant-Appellant,

and

STEPHEN P. ELDER; ELDER 

DEVELOPMENT, INC.,

Defendants.

No. 18-15585

D.C. No.

2:08-cv-02556-

MCE-DB

OPINION

Appeal from the United States District Court

for the Eastern District of California

Morrison C. England, Jr., District Judge, Presiding

Argued and Submitted October 25, 2019

San Francisco, California

Filed October 5, 2020
2 UNITED STATES V. STERLING CENTRECORP.

Before: Michael J. Melloy,* Jay S. Bybee, and

N. Randy Smith, Circuit Judges.

Opinion by Judge Melloy;

Partial Concurrence and Partial Dissent by 

Judge N.R. Smith

SUMMARY**

CERCLA

The panel affirmed the district court’s judgment in a case 

brought by the United States and the California Department 

of Toxic Substances Control against Sterling Centrecorp, 

Inc. under the Comprehensive Environmental Response, 

Compensation, and Liability Act of 1980 (“CERCLA”) to 

recover cleanup costs incurred at a Superfund site – the Lava 

Cap Mine located in Nevada County, California.

Strict CERCLA liability arises when four key elements 

are satisfied: (1) the site in question is a “facility” as defined 

by CERCLA; (2) a “release” or “threatened release” of a 

hazardous substance has occurred; (3) the release or 

threatened release requires expenditures that are consistent 

with a national contingency plan; and (4) the defendants fall 

within one of four categories of “covered persons” subject to 

liability. “Covered persons” include prior operators of the 

* The Honorable Michael J. Melloy, United States Circuit Judge for 

the U.S. Court of Appeals for the Eighth Circuit, sitting by designation.

** This summary constitutes no part of the opinion of the court. It 

has been prepared by court staff for the convenience of the reader.
UNITED STATES V. STERLING CENTRECORP. 3

facility. 42 U.S.C. § 9607(a)(2). Sterling conceded the first 

three elements of CERCLA liability prior to trial.

The panel held that the record supported the district 

court’s finding that Sterling was an “operator” of the Site 

because Sterling maintained pervasive control of the Site. 

The record also supported the finding that Jack Gilbert, the 

man tasked with directing the response to the Regional 

Water Board’s Cleanup and Abatement Order, wore his 

Sterling “hat” while doing so. The record also supported the 

conclusion that Gilbert acted on Sterling’s behalf. Finally, 

the record reflected that Sterling must have made the 

environmental response decisions at the Site. The panel 

concluded that Sterling was subject to CERCLA liability as 

a prior operator of the Mine.

The panel held that the United States was not subject to 

CERCLA liability as a prior operator. The record showed 

that, through Order L-208, the United States instructed the 

Mine to shut down its operations, and that was the extent of 

its involvement. The record does not show that the United 

States ever managed, directed, or conducted operations 

specifically related to pollution at the facility.

The panel held that the interim remedy selected by the 

Environmental Protection Agency to supply noncontaminated drinking water at the Site was not arbitrary and 

capricious or otherwise not in accordance with law. The 

panel further held that Sterling failed to overcome the 

presumption of consistency with the National Contingency 

Plan.

Judge N.R. Smith concurred with the majority’s 

conclusions that Sterling was liable for response under 

CERCLA, and the EPA’s selection of the interim remedy 
4 UNITED STATES V. STERLING CENTRECORP.

was not arbitrary and capricious or otherwise inconsistent 

with the National Contingency Plan. He dissented from the 

majority’s conclusion that the United States was not an 

“operator” under CERCLA because the majority 

misinterpreted and misapplied controlling Supreme Court 

precedent.

COUNSEL

Kaitlyn D. Shannon (argued) and Gary J. Smith, Beveridge 

& Diamond P.C., San Francisco, California, for DefendantAppellant.

Allen M. Brabender (argued), Patricia L. Hurst, Paul Cirino, 

and Peter Krzywicki, Attorneys; Eric Grant, Deputy 

Assistant Attorney General; Jeffrey H. Wood, Acting 

Assistant Attorney General; Environment & Natural 

Resources Division, United States Department of Justice,

Washington, D.C.; Xavier Becerra, Attorney General; Sally 

Magnani, Senior Assistant Attorney General; Edward 

Ochoa, Supervising Deputy Attorney General; Olivia Karlin 

and John W. Everett, Deputy Attorneys General; Office of 

the Attorney General, San Diego, California; for PlaintiffsAppellees.
UNITED STATES V. STERLING CENTRECORP. 5

OPINION

MELLOY, Circuit Judge:

The United States and the California Department of 

Toxic Substances Control (collectively, Plaintiffs) 

designated the former Lava Cap Mine (Mine), located in 

Nevada County, California, as a Superfund Site (Site)1

known to be polluted by elevated and potentially dangerous 

levels of arsenic generated through mining operations. 

Starting in the mid-1990s, Plaintiffs undertook efforts to 

clean up and remediate the arsenic contamination and its 

effect on the local groundwater, inhabitants, and 

environment. Plaintiffs later sued Defendant, Sterling 

Centrecorp, Inc. (Sterling), under the Comprehensive 

Environmental Response, Compensation, and Liability Act 

of 1980, 42 U.S.C. § 9601, et seq. (CERCLA), to recover 

response costs incurred at the Site. Sterling contested 

Plaintiffs’ claims and filed a counterclaim arguing the 

United States was itself liable for response costs under 

CERCLA as a prior “operator” of the Mine during World 

War II.

After bifurcating the case between liability and damages, 

the district court held a bench trial as to liability and found 

Sterling liable for response costs. As to damages, the district 

court concluded on summary judgment that Plaintiffs could 

recover all response costs because the remedy selected by 

the Environmental Protection Agency (EPA) was not 

arbitrary and capricious, and that the United States was not 

1 Hereinafter, this opinion will use “Mine” to describe the Lava Cap 

Mine before it was designated a Superfund Site and use “Site” to describe 

the same location once it was designated to be an environmental hazard. 

For most purposes, the titles are interchangeable.
6 UNITED STATES V. STERLING CENTRECORP.

liable as an “operator” under CERCLA. Sterling appeals the 

district court’s final judgment. We have jurisdiction under 

28 U.S.C. § 1291 and affirm the district court’s rulings.

I. BACKGROUND

Between 1934 and 1943, the Lava Cap Gold Mining 

Corporation (LCGMC) owned and operated the Lava Cap 

Mine. The Mine was located in the foothills of the Sierra 

Nevada Mountains and, at the time, was one of the largest 

gold and silver mining operations in California. Mining 

operations produced two kinds of mining waste: waste rock 

and mill tailings. The waste rock was piled up next to the 

Mine. The mill tailings required more care. Because mill 

tailings are fine-grained materials with high concentrations 

of arsenic and are particularly susceptible to being carried 

away by water, LCGMC built two log dams to hold the 

tailings in place.

The United States entered World War II in 1941. It was 

“apparent to those in charge of the Nation’s defense 

mobilization that [the United States] faced a critical shortage 

of nonferrous metals, notably copper, and a comparable 

shortage of machinery and supplies to produce them.” 

United States v. Cent. Eureka Mining Co., 357 U.S. 155, 157 

(1958). On January 16, 1942, President Roosevelt created 

the War Production Board (Board), Exec. Order No. 9024 

¶ 2, 7 Fed. Reg. 329, 329–30 (Jan. 17, 1942), to “promote 

the national defense” and convert various civilian industry 

to wartime production, Limitation Order L–208, 7 Fed. Reg. 

7992, 7992–93, 1942 WL 49008 (Oct. 8, 1942). The Board 

“issued a series of Preference Orders” classifying copper 

mines as essential to the war effort and classifying gold 

mines as nonessential. Cent. Eureka Mining, 357 U.S. 

at 157. At first, these orders merely prevented nonessential 

mines from acquiring new machinery or supplies. Id. 
UNITED STATES V. STERLING CENTRECORP. 7

Eventually, the Board needed to address “a severe shortage 

of skilled labor” in the nonferrous metal mines. Id.

To that end, on October 8, 1942, the Board issued 

Limitation Order L–208, which provided requirements for 

the gold mining industry.

It directed each operator of a gold mine to 

take steps immediately to close down its 

operations and, after seven days, not to 

acquire, use or consume any material or 

equipment in development work. The order 

directed that, within 60 days, all operations 

should cease, excepting only the minimum 

activity necessary to maintain mine 

buildings, machinery and equipment, and to 

keep the workings safe and accessible. 

Applications to the [Board] were permitted to 

meet special needs and several exceptions 

were made under that authority. Small mines 

were defined and exempted from the order. 

The [Board] did not take physical possession 

of the gold mines. It did not require the mine 

owners to dispose of any of their machinery 

or equipment.

Id. at 158–60.2

 Under subsection (b)(3) of Order L–208, 

following the 60-day mark, gold mines were not allowed to 

2 See Limitation Order L–208, 7 Fed. Reg. 7992, 7992–93, 1942 WL 

49008 (Oct. 8, 1942); see also Cent. Eureka Mining, 357 U.S. at 158 n.4 

(providing the full text of Order L–208). In Central Eureka Mining, the 

Supreme Court addressed the history and scope of Order L–208 in the 

context of a takings claim. It held that the issuance of Order L–208 did

not amount to a Fifth Amendment taking because “the Government did 

not occupy, use, or in any manner take physical possession of the gold 
8 UNITED STATES V. STERLING CENTRECORP.

“acquire, consume, or use any material, facility, or 

equipment to remove any ore or waste from such mine, 

either above or below ground, or to conduct any other 

operations in or about such mine, except to the minimum 

amount necessary to maintain its buildings, machinery, and 

equipment in repair, and its access and development 

workings safe and accessible.” Limitation Order L–208, 

7 Fed. Reg. 7992, 7993, 1942 WL 49008 (Oct. 8, 1942). The 

Board amended Order L–208 several times to reflect 

additional instructions related to machinery. In a letter dated 

May 12, 1943, the Board advised LCGMC that as of June 1, 

1943, the Lava Cap Mine would be subject to Order L–208.

On June 30, 1945, the Board revoked Order L–208. 

However, LCGMC never resumed mining operations. In 

1952, LCGMC was acquired by Sterling, a Canadian 

corporation then known as Goldvue Mines Limited, through 

its wholly owned subsidiary, Keystone Copper Corporation 

(Keystone). Sterling took no actions at the Mine for decades.

In 1979, one of the dams built to contain the mill tailings 

partially collapsed, triggering a release of contaminated 

waste into the local water system. Following the collapse, 

the Central Valley Regional Water Quality Control Board 

investigated complaints by the Mine’s downstream 

neighbors regarding the pollution and issued a Cleanup and 

Abatement Order (CAO) to Keystone, as title holder to the 

Site. The CAO instructed Keystone to stop the discharge 

immediately and provide a report detailing needed 

mines or of the equipment connected with them.” Cent. Eureka Mining, 

357 U.S. at 165–66.
UNITED STATES V. STERLING CENTRECORP. 9

improvements to the structural integrity of the dam.3 

Keystone failed to comply. Neither Keystone nor its parent 

company, Sterling, conducted the required evaluation of the 

dam. The dam remained in poor condition through the 

remainder of Keystone’s ownership of the Mine. Through 

Keystone, Sterling eventually sold the Mine to an entity 

controlled by Stephen Elder in 1989.

In 1997, catastrophic flooding completely collapsed the 

log dam and washed an estimated 10,000 cubic yards of 

arsenic-contaminated mill tailings into the local water 

system. Following this event, the EPA and the California 

Department of Toxic Substances Control (California DTSC) 

conducted an extensive response action under CERCLA to 

remove hazardous materials from the Site and to protect 

local residents from the contamination. The EPA officially 

designated the Site as a Superfund site in January 1999. The 

EPA split the Site into four operable units, including as is 

relevant here, Operable Unit 2 (OU2). In OU2, groundwater 

wells were contaminated, and the EPA was concerned with 

providing a safe and reliable source of drinking water to 

local residents. Because a long-term solution would be years 

in the making, the EPA constructed a pipeline to connect 

residences to an uncontaminated public water supply as an 

interim remedy. Pipeline construction cost an estimated 

$3.795 million. To date, total response costs at all four 

operable units at the Site have totaled more than $32 million.

3 The California Department of Fish and Game also investigated and 

warned of a future catastrophic failure of the decaying dam if not 

properly repaired.
10 UNITED STATES V. STERLING CENTRECORP.

The United States and California DTSC sued Sterling 

and Elder4 under CERCLA seeking contribution for 

response costs incurred at the Site. In addition to asserting 

multiple defenses, Sterling filed a contribution counterclaim 

against the United States, alleging Order L–208 made the 

United States liable as a prior operator.

The district court bifurcated the litigation into a

jurisdiction and liability phase, followed by a damages 

phase. After a four-day bench trial for the first phase, the 

court ruled that it had personal jurisdiction over Sterling, and 

Sterling was liable under CERCLA for response costs under 

three separate theories: (1) Sterling directly operated the 

Mine at the time of the disposal of hazardous substances, 

(2) Sterling assumed the liabilities of LCGMC, and 

(3) Sterling’s acquisition of LCGMC was a de facto merger.

In phase two, proceeding on cross-motions for summary 

judgment, the district court concluded Order L–208 did not 

subject the United States to CERCLA liability as an 

“operator” of the Mine. It found that other than closing the 

Mine, the United States had no involvement with the Mine’s 

operations or the disposal of mill tailings. The district court 

also concluded, again on separate cross-motions, that 

Plaintiffs were entitled to recover all response costs. The 

district court then issued a judgment of roughly $32 million 

against Sterling and Elder. This appeal followed.

II. DISCUSSION

Sterling appeals the district court’s rulings on (1) its own 

liability; (2) the liability of the United States; and 

4 The companion appeal is also filed today in United States v. Elder,

No. 18-15878.
UNITED STATES V. STERLING CENTRECORP. 11

(3) response costs related to the EPA’s interim remedy in 

OU2. Following a bench trial, we review the district court’s 

legal conclusions de novo and factual findings for clear 

error. Lentini v. Cal. Ctr. for the Arts, Escondido, 370 F.3d 

837, 843 (9th Cir. 2004). We will accept the factual findings 

unless we are “left with the definite and firm conviction that 

a mistake has been committed.” Id. (citations omitted). We 

review de novo the district court’s grant of summary 

judgment and interpretation of CERCLA. Carson Harbor 

Vill., Ltd. v. Unocal Corp., 270 F.3d 863, 870 (9th Cir. 2001) 

(en banc).

A. CERCLA Liability

In 1980, Congress enacted CERCLA as a “response to 

the serious environmental and health risks posed by 

industrial pollution.” United States v. Bestfoods, 524 U.S. 

51, 55 (1998). “As its name implies, CERCLA is a 

comprehensive statute that grants the President broad power 

to command government agencies and private parties to 

clean up hazardous waste sites.” Key Tronic Corp. v. United 

States, 511 U.S. 809, 814 (1994). We construe CERCLA 

liberally in order to effectuate its two primary goals: “(1) to 

ensure the prompt and effective cleanup of waste disposal 

sites, and (2) to assure that parties responsible for hazardous 

substances [bear] the cost of remedying the conditions they 

created.” Carson Harbor, 270 F.3d at 880.

CERCLA authorizes the EPA to finance cleanup efforts 

at hazardous sites that meet certain statutory criteria, 

42 U.S.C. § 9604; Bestfoods, 524 U.S. at 55, and to recover 

costs from liable parties. Strict CERCLA liability arises 

when four key elements are satisfied: (1) the site in question 

is a “facility” as defined by CERCLA; (2) a “release” or 

“threatened release” of a hazardous substance has occurred; 

(3) “such release or ‘threatened release’ will require the 
12 UNITED STATES V. STERLING CENTRECORP.

expenditure of response costs that are ‘consistent with the 

national contingency plan’”; and (4) the defendants fall 

within one of four categories of “covered persons” subject to 

liability. See Cose v. Getty Oil Co., 4 F.3d 700, 703–04 (9th 

Cir. 1993). Relevant here, “covered persons” include prior 

operators of the facility, defined as “any person who at the 

time of disposal of any hazardous substance . . . operated any 

facility at which such hazardous substances were disposed 

of.” 42 U.S.C. § 9607(a)(2).

1. Liability of Sterling

After conducting the bench trial, the district court 

concluded Sterling is liable for response costs as a prior 

“operator” under CERCLA because it directed operations 

related to pollution at the Site. Sterling appeals this ruling. 

We agree with the district court.5

Sterling conceded the first three elements of CERCLA 

liability prior to trial. Therefore, only one element was 

contested and is contested on appeal: whether Sterling was 

an “operator” of the Site when hazardous substances were 

disposed there. See 42 U.S.C. § 9607(a). CERCLA defines 

“operator” circularly as “any person . . . operating [a] 

facility.” 42 U.S.C. § 9601(20)(A)(ii). We look to common 

law for additional guidance. City of Los Angeles v. San 

Pedro Boat Works, 635 F.3d 440, 443 (9th Cir. 2011).

In Bestfoods, the Supreme Court defined “operator” 

when determining whether a parent corporation was liable 

under CERCLA for a subsidiary’s actions. Looking to the 

5 Because we do so, Sterling’s argument as to a lack of personal 

jurisdiction is no longer viable. Indeed, the parties agreed in briefing 

that if Sterling was found liable as an operator, Sterling’s contacts with 

the forum would be sufficient to establish personal jurisdiction.
UNITED STATES V. STERLING CENTRECORP. 13

ordinary meaning of the term, Bestfoods, 524 U.S. at 66, and 

the context of CERCLA’s environmental focus, the Court 

stated that “an operator must manage, direct, or conduct 

operations specifically related to pollution, that is, 

operations having to do with the leakage or disposal of 

hazardous waste, or decisions about compliance with 

environmental regulations,” id. at 66–67. Bestfoods

emphasized that any determination as to whether an entity is 

liable as an operator must turn on the relationship between 

the potentially responsible party and the waste-producing 

facility at issue. Id. at 68. Such liability may be inferred 

from the totality of the circumstances; it need not be proven 

by direct evidence. Tosco Corp. v. Koch Indus., Inc., 

216 F.3d 886, 892 (10th Cir. 2000).

Whether Sterling is liable as a prior operator under 

CERCLA is a fact-intensive inquiry, and we therefore 

review the district court’s post-bench trial determinations for 

clear error. See United States v. Depew, 210 F.3d 1061, 1067 

(9th Cir. 2000) (indicating that a “fact-intensive inquiry” 

will generally be reviewed for clear error). The record 

supports the district court’s finding that Sterling was an 

“operator” of the Site because “Sterling maintained 

pervasive control over operations at the [Site], including 

direct management of the environmental response to the 

1979 partial dam collapse and disposal of arsenic 

contaminated tailings and water.” The factual record 

supports the district court’s finding that Jack Gilbert, the 

man tasked with directing the response to the Regional 

Water Board’s Cleanup and Abatement Order (CAO) 

regarding the hazardous substances at the Site, wore his 

Sterling “hat” while doing so. Gilbert directed compliance 

with the CAO using Sterling letterhead, received 

communications related to the response addressed to him in 

his capacity as a Sterling official, and rarely mentioned 
14 UNITED STATES V. STERLING CENTRECORP.

Sterling’s subsidiary in his correspondence regarding the 

CAO. The record also supports the district court’s 

conclusion that Gilbert acted on Sterling’s behalf since 

Gilbert’s actions “benefitted Sterling, to Keystone’s 

detriment,” and were thus “contrary to the interests of the 

subsidiary yet nonetheless advantageous to the parent.” See 

Bestfoods, 524 U.S. at 70 n.13. Sterling’s involvement is 

further shown by the fact that compliance reports regarding 

the monitoring orders were sent directly to Sterling for a 

time. Finally, the record reflects that Sterling must have 

made the environmental response decisions at the Site, 

because Keystone did not have the financial wherewithal to 

do so. Therefore, Sterling is subject to CERCLA liability as 

a prior operator of the Mine.6

2. Liability of the United States

Sterling also challenges the district court’s summary 

judgment ruling as to whether, by issuing Order L–208, the 

United States acted as an “operator” and is therefore liable 

for response costs. Sterling argues that the United States was 

an operator because of the all-encompassing nature of Order 

L–208. This argument proves too much. The definition of 

“operator” in Bestfoods clarifies that actual participation in 

6 The district court concluded Sterling could also be liable under two 

separate theories: (1) the transaction between Sterling and its predecessor 

was a de facto merger, thus subjecting Sterling to successor liability; and 

(2) Sterling expressly assumed its predecessor’s environmental 

liabilities. We agree that the evidence at trial also supports these theories 

as alternative bases for holding Sterling liable for response costs. 

However, our analysis focuses only on direct operator liability as that is 

the typical basis for CERCLA liability in these circumstances, and it is 

dispositive of the issue. See McMurtrey v. Ryan, 539 F.3d 1112, 1132 

(9th Cir. 2008) (noting that where one issue is dispositive, the court need 

not address the remaining issues).
UNITED STATES V. STERLING CENTRECORP. 15

decisions related to pollution is necessary for a finding of 

operator liability. We have similarly held that “[t]o be an 

operator of a hazardous waste facility, a party must do more 

than stand by and fail to prevent the contamination. It must 

play an active role in running the facility, typically involving 

hands-on, day-to-day participation in the facility’s 

management.” Long Beach Unified Sch. Dist. v. Dorothy B. 

Godwin Cal. Living Tr., 32 F.3d 1364, 1367 (9th Cir. 1994). 

The Bestfoods standard confirms that operator status has a 

nexus requirement. That is, it requires that an operator’s 

relationship to the facility at issue must, at least in part, focus 

on “operations specifically related to pollution.” Bestfoods, 

524 U.S. at 66. Therefore, operator liability requires 

something more than general control over an industry or 

facility. It requires some level of direction, management, or 

control over the facility’s polluting activities.

The record shows that, through Order L–208, the United 

States instructed the Mine to shut down its mining 

operations. That is the extent of its involvement. The record 

does not show that the United States ever managed, directed, 

or conducted operations specifically related to pollution at 

the facility. Nor does the record show that the United States 

even had knowledge of the Mine’s mill tailings disposal or 

the log dam structures that held the mill tailings. Cf. PPG 

Indus. Inc. v. United States, 957 F.3d 395, 404 (3d Cir. 2020) 

(stating that “knowledge of a practice is not the same as 

undertaking that practice for the purposes of operator 

liability under CERCLA”). Order L–208 included no 

requirements as to “operations specifically related to 

pollution.” Bestfoods, 524 U.S. at 66. Its terms cannot make 

the United States liable as a prior operator.
16 UNITED STATES V. STERLING CENTRECORP.

Further, the record does not show that the United States 

ordered the abandonment of existing pollution controls. 

Rather, subsection (b)(3) of Order L–208 specifically 

allowed for the Mine to continue minimal operations “to 

maintain its buildings, machinery, and equipment in repair, 

and its access and development workings safe and 

accessible.”7 This exception makes clear that, while Order 

L–208 was in effect, the Mine retained control over its own 

maintenance and safety operations. It had the ability to 

maintain structures such as the mill tailings dams and 

otherwise keep its own investment safe. This included 

taking necessary steps related to pollution and waste. 

Therefore, while the United States had general regulatory 

authority over the mining industry during World War II, by 

issuing Order L–208 and applying it to the Mine, it did not 

“manage, direct, or conduct . . . operations having to do with 

the leakage or disposal of hazardous waste, or decisions 

about compliance with environmental regulations.” 

Bestfoods, 524 U.S. at 66–67.

Taking into consideration, as we must, the broad 

remedial nature of CERCLA, the undisputed facts in the 

record show that, by issuing Order L–208, the United States 

did not “manage, direct, or conduct operations” specifically 

related to pollution at the Lava Cap Mine Site. Bestfoods, 

524 U.S. at 66. Therefore, the United States is not subject to 

CERCLA liability as a prior operator.

7 Limitation Order L–208, 7 Fed. Reg. 7992, 7993, 1942 WL 49008

(Oct. 8, 1942); see also Cent. Eureka Mining, 357 U.S. at 158 n.4 

(providing the full text of Order L–208).
UNITED STATES V. STERLING CENTRECORP. 17

B. Remedy Selection

Finally, Sterling challenges the district court’s ruling as 

to the EPA’s interim remedy in OU2. Sterling argues the 

decision to create a pipeline to provide residents with safe 

water was arbitrary and capricious because the pipeline 

failed to achieve its primary objective, and a cheaper 

alternative existed. Sterling argues the EPA should have 

installed point-of-use wellhead treatment instead of 

constructing the pipeline, thus saving nearly $3 million in 

response costs. Sterling also argues the EPA improperly 

weighed certain criteria under 40 C.F.R. § 300.430.

The National Contingency Plan (NCP) holds “the 

organizational structure and procedures for preparing for and 

responding to . . . releases of hazardous substances.” Wash. 

State Dep’t of Transp. v. Wash. Nat. Gas Co., Pacificorp, 

59 F.3d 793, 799 (9th Cir. 1995) (quoting 40 C.F.R. 

§ 300.1). A party subject to CERCLA liability is responsible 

for “all costs of removal or remedial action incurred by the 

United States . . . or a State . . . not inconsistent with the 

[NCP].” 42 U.S.C. § 9607(a)(4)(A). Once Plaintiffs 

established a prima facie case that their response costs were 

incurred in connection with the release of hazardous 

substances from the Site, such costs were presumed to be 

consistent with the NCP, and the burden shifted to Sterling 

to prove otherwise. United States v. Chapman, 146 F.3d 

1166, 1170–71 (9th Cir. 1998).

The interim remedy selected by the EPA to supply noncontaminated drinking water at the Site was not “arbitrary 

and capricious or otherwise not in accordance with law.” 

See 42 U.S.C. § 9613(j)(2) (providing the standard of 

review). The EPA’s interim remedy achieved its 

objective—to provide clean drinking water to the impacted 

residents—and was not contrary to the evidence. See
18 UNITED STATES V. STERLING CENTRECORP.

Chapman, 146 F.3d at 1170–71; see also Wild Fish 

Conservancy v. Salazar, 628 F.3d 513, 521 (9th Cir. 2010) 

(explaining that the court’s role is to confirm that the 

agency’s decision is rational and based on the record). 

Further, the response costs were not inconsistent with the 

NCP. Based on its careful evaluation of the required criteria, 

the EPA concluded the comparative benefits justified the 

higher cost of the selected remedy because the pipeline 

“provides much greater protectiveness by permanently 

removing the exposure pathway,” and by “eliminat[ing] the 

requirement for long-term federal and state management of 

individual residents’ drinking water.” Although the pipeline 

was the more expensive alternative, the EPA met its 

obligation to consider the cost-effectiveness of each 

alternative and to, in the end, select a cost-effective remedy. 

40 C.F.R. § 300.430(f)(1)(ii)(D) (“Each remedial action

selected shall be cost-effective.”); see also Franklin Cty. 

Convention Facilities Auth. v. Am. Premier Underwriters, 

Inc., 240 F.3d 534, 546 (6th Cir. 2001) (affirming the 

selection of a more expensive, yet cost-effective alternative 

as consistent with the NCP).

Contrary to Sterling’s arguments, the EPA did not 

improperly weigh the statutory criteria under 40 C.F.R. 

§ 300.430. Instead, the record shows that the EPA 

conducted the required comparative analysis before 

concluding that the pipeline “provides the best balance of 

tradeoffs in terms of . . . balancing criteria, while also 

considering . . . State and community acceptance.” For these 

reasons, and because there was a rational connection 

between the record and the EPA’s selection of the interim 

remedy, Sterling fails to overcome the presumption of 

consistency with the NCP.
UNITED STATES V. STERLING CENTRECORP. 19

III. CONCLUSION

We affirm the rulings of the district court.

AFFIRMED.

N.R. SMITH, Circuit Judge, concurring in part1 and 

dissenting in part:

Because Supreme Court case law makes clear that the 

United States is an “operator” at the Site, I cannot join the 

majority opinion on this issue.

I.

To promote the national defense during World War II, 

the Office of Production Management and its successor, the 

War Production Board, issued a series of orders prioritizing 

the acquisition of certain nonferrous metals, notably copper. 

See United States v. Cent. Eureka Mining Co., 357 U.S. 155, 

156–157 (1958). These orders gave “those mines, which 

were deemed important from the standpoint of defense or 

essential civilian needs, a high priority in the acquisition” of 

mining machinery. Id. at 157. “Gold mines were classified 

as nonessential and eventually were relegated to the lowest 

priority rating” for obtaining mining machinery, meaning 

that these mines had to use only the machinery and supplies 

they had on hand. Id. The Lava Cap Gold Mine, the Site at 

issue in this case, was thus not deemed important from the 

1 I agree with the majority’s conclusions that (1) Sterling is liable 

for response costs under CERCLA, and (2) the EPA’s selection of the 

interim remedy was not arbitrary and capricious or otherwise 

inconsistent with the National Contingency Plan.
20 UNITED STATES V. STERLING CENTRECORP.

standpoint of defense or essential civilian needs and 

therefore could not obtain machinery.

The shortage of supplies for the war effort soon spread 

beyond machinery as the “expanding need for nonferrous 

metals,” together with the “depletion of mining manpower 

as a result of the military draft and the attraction of higher 

wages paid by other industries,” caused a “severe shortage 

of skilled labor.” Id. at 157. To remedy this labor shortage, 

the War Production Board issued Limitation Order L–208 in 

1942. Id. at 158. The Order was addressed exclusively to 

the “nonessential” gold mining industry and directed all 

operations to cease, “except to the minimum amount 

necessary to maintain its buildings, machinery, and 

equipment in repair, and its access and development 

workings safe and accessible.” Limitation Order L–208, 

7 Fed. Reg. 7992, 7992–93 (Oct. 8, 1942) [hereinafter Order 

L–208]. Although the “[War Production Board] did not take

physical possession of the gold mines,” Cent. Eureka 

Mining Co., 357 U.S. at 160, it just as well have; it expressly 

prohibited the “use [of] any material, facility, or equipment 

to remove any ore or waste” from the mine, or the 

conducting of “any other operations in or about such mine,” 

Order L–208 at 7993 (emphasis added).

The Order became specifically applicable to the Lava 

Cap Gold Mine on May 12, 1943, when the War Production 

Board sent a letter stating that “operation of the Lava Cap 

Gold Mine is no longer essential to the war effort. Your 

Serial Number 31-197-T is cancelled, effective June 1, 

1943.” Under threat of imprisonment, those charged with 

operating the Mine were thus directed to cease removal of 

“any ore or waste from such mine,” Order L–208 at 7993 

(emphasis added), until the Order was revoked in 1945, see 
UNITED STATES V. STERLING CENTRECORP. 21

Limitation Order L–208, Revocation, 10 Fed. Reg. 8110 

(June 30, 1945).

In its counterclaim to the government’s claims below, 

Sterling argued that, through the issuance of the Order, the 

United States is potentially subject to CERCLA liability as 

an “operator” of the Site. The district court entered summary 

judgment for the United States on Sterling’s counterclaim, 

finding that the Order did not render the United States an 

“operator” of the Site. We review that conclusion de novo. 

See Cal. Dep’t of Toxic Substances Control v. Westside 

Delivery, LLC, 888 F.3d 1085, 1090 (9th Cir. 2018).

II.

CERCLA imposes liability for incurred response costs to 

“any person who at the time of disposal of any hazardous 

substance owned or operated any facility at which such 

hazardous substances were disposed of.” 42 U.S.C. 

§ 9607(a)(2). In this case, it is uncontested that the Site is a 

“facility” under 42 U.S.C. § 9601(9). Furthermore, we 

assume based on the parties’ representations that there was a 

“disposal of hazardous substances” at the facility when the 

Order was in effect.2

 Thus, if the United States is an operator 

of the Site, it is subject to CERCLA liability.

The majority concludes that the United States is not an 

“operator” under CERCLA. The majority’s analysis is 

wrong, because it misinterprets and misapplies controlling 

Supreme Court precedent. Let me explain.

2 Though the district court did not address this question, counsel for 

the United States conceded that point both in the briefing, and at oral 

argument.
22 UNITED STATES V. STERLING CENTRECORP.

The Supreme Court’s opinion in United States v. 

Bestfoods, 524 U.S. 51 (1998) outlines what actions are 

required to be an “operator” under CERCLA. “[T]o operate” 

under CERCLA “mean[s] something more than mere 

mechanical activation of pumps and valves, and must be read 

to contemplate ‘operation’ as including the exercise of 

direction over the facility’s activities.” Bestfoods, 524 U.S. 

at 71 (emphasis added). Thus, the Bestfoods Court 

elaborated, an “operator is simply someone who directs the 

workings of, manages, or conducts the affairs of a facility.” 

Id. at 66. Under Bestfoods, then, a party that merely 

“direct[s] . . . operations specifically related to pollution” 

would be an “operator.” Id. Or, to use the majority’s 

definition, “operator liability . . . requires some level of 

direction, management, or control over the facility’s 

polluting activities.” Maj. Op. 15.

The majority concludes that the United States cannot be 

held liable as an “operator” in this case, because it merely 

“instructed the Mine to shut down its mining operations.” Id. 

Thus, the majority posits, “[t]he record does not show that 

the United States ever managed, directed, or conducted 

operations specifically related to pollution at the facility.” 

Id. The majority errs, because it attempts to draw a 

distinction where there is none. To “instruct,” as the United 

States did, literally means “[t]o give orders to; direct.” 

Instruct, American Heritage Dictionary (5th ed. 2012). 

There can be no dispute that the United States exercised 

direction over the facility’s activities. Thus, there is no real 

distinction in this case between “instruct[ing] the mine to 

shut down,” and exercising “some level of direction, 

management, or control over the facility’s polluting 

activities.” Maj. Op. at 15.
UNITED STATES V. STERLING CENTRECORP. 23

By directing the mine to cease operations and prohibiting 

the removal of ore waste from the facility, the United States 

(through the issuance of the Order) prohibited the very 

activity which led to the pollution at the Site; it expressly 

prohibited the “remov[al] of any ore or waste” from the 

mine. Order L–208 at 7993. The United States thus 

“direct[ed] the workings of . . . a facility[’s] . . . operations 

specifically related to pollution.” Bestfoods, 524 U.S. at 66. 

Accordingly, the majority’s assertion that “Order L–208 

included no requirements as to ‘operations specifically 

related to pollution,’” Maj. Op. 15 (quoting Bestfoods, 

524 U.S. at 66), is flatly wrong; shutting all operations down 

necessarily involved the direction of “polluting activities.” 

The Order directed the Lava Cap Gold Mining Corporation 

(“LCGMC”) to cease removal of any waste from the mine. 

Order L–208 at 7993. Shutting down all operations certainly 

exercises direction over the activities of the facility. Indeed, 

it is hard to imagine a circumstance where a party could 

exercise more authority over a facility’s operations related 

to pollution than to completely shut down those operations 

as the United States did here, specifically forbidding the 

removal of toxic ore waste from the mine.

The majority argues that the United States should not be 

held liable, because Lava Cap Gold Mining Corporation 

(“LCGMC”) retained authority over “existing pollution 

controls.” Maj. Op. 16. To be sure, LCGMC may have 

retained some authority over safety and any leaks at the Site. 

But that fact does not absolve the United States from 

liability, because the United States still directed operations 

having to do with the disposal of hazardous waste. Indeed, 

regardless of what limited authority LCGMC retained, 

operator liability extends to all those who “direct . . .

operations having to do with the leakage or disposal of 
24 UNITED STATES V. STERLING CENTRECORP.

hazardous waste.” Bestfoods, 524 U.S. at 66–67 (emphasis 

added).

Moreover, it is inconsequential that the authority of the 

United States was “general” or “regulatory” in nature. Maj. 

Op. 16. Any reliance on the nature of the United States’s 

action in determining that it was not an “operator” of the Site 

is misplaced, as we have held that the capacity in which the 

government acts is irrelevant to determining whether it is an 

“operator” under CERCLA. See United States v. Shell Oil, 

294 F.3d 1045, 1053 (9th Cir. 2002) (noting that there is no 

“distinction between the [government’s] exercise of private 

. . . and regulatory powers” in determining whether the 

United States is liable under CERCLA (second alteration in 

original) (quoting East Bay Mun. Util. Dist. v. United States 

Dep’t of Commerce, 142 F.3d 479, 482 (D.C. Cir. 1998))). 

Rather, the “relevant . . . question under CERCLA” is simply 

“whether [the government’s] activities, however 

characterized, are sufficient to impose liability on the 

government as an owner, operator, or arranger.”3 Id.

(alterations in original) (quoting FMC Corp., 29 F.3d at 841–

42). We have thus disposed of any distinction between 

regulatory actions and other actions in the context of 

CERCLA liability.4 294 F.3d at 1053 (noting that we align 

3 “This is true even if no private party could in fact engage in those 

specific activities.” FMC Corp. v. United States Dep’t of Commerce, 

29 F.3d 833, 840 (3d Cir. 2002) (in banc) (noting that “the government 

can be liable when it engages in regulatory activities extensive enough 

to make it an operator of a facility . . . even though no private party could

engage in the regulatory activities at issue”).

4 This language from Shell Oil indicates that we should reexamine 

our approach to determining CERCLA operator liability in light of 

Bestfoods. Pre-Bestfoods, and in addition to the Long Beach Unified Sch. 

5 Dist. v. Dorothy B. Godwin Cal. Living Tr., 32 F.3d 1364, 1367 (9th 
UNITED STATES V. STERLING CENTRECORP. 25

our approach with the Third Circuit’s analysis in FMC 

Corp., 29 F.3d at 841–42 and the D.C. Circuit’s analysis in 

East Bay Mun. Util. Dist., 142 F.3d at 482). Regardless of 

the capacity in which the government acts, it is an operator 

Cir. 1994) standard (which is not necessarily at odds with Bestfoods), we 

applied an incredibly expansive “authority to control” standard for 

CERCLA operator liability. See Kaiser Aluminum & Chem. Corp. v. 

Catellus Dev. Corp, 976 F.2d 1338, 1341 (9th Cir. 1992). While 

Bestfoods does not require hands-on participation in day-to-day 

operations, Bestfoods does make clear that an “operator” must take some 

action—“an operator must manage, direct, or conduct operations 

specifically related to pollution”—and not merely possess the authority 

to do so. 524 U.S. at 66 (emphasis added). Moreover, in light of Shell 

Oil Co., 294 F.3d at 1053, Kaiser’s “authority to control” standard would 

subject the United States to CERCLA liability as an operator nearly any 

time there was a disposal of toxic substances whether it actually acted or 

not, merely because it had (as it almost always has in the case of 

environmental contamination) the “authority to” step in and control the 

substance or facility.

Our decision today does not turn on Kaiser. However, our circuit’s 

post-Bestfoods restatement of Kaiser’s “authority to control” standard in 

City of Los Angeles v. San Pedro Boat Works, 635 F.3d 440, 451 n.9 (9th

Cir. 2011) creates confusion as district courts seek to apply the correct 

standard for determining CERCLA “operator” liability. Particularly 

because we restated Kaiser’s standard in dicta—indeed, the issue of 

CERCLA operator liability was not at issue in either case, see id. at 

443—we should make some effort to clean up these inconsistencies; any 

confusion resulting from them falls on our shoulders for failing to 

critically analyze how our circuit’s pre-Bestfoods precedent comports 

with Bestfoods before summarily restating that case law in dicta. See 

Barapind v. Enomoto, 400 F.3d 744, 759 (9th Cir. 2005) (en banc) 

(Ryder, J., concurring in the judgment in part and dissenting in part) (per 

curiam). Therefore, we should reexamine Kaiser’s “authority to control” 

standard to the extent it is inconsistent with Bestfoods, and ensure that 

the standard we do articulate comports both with the direction we have 

been given by the Supreme Court in Bestfoods and our precedent.
26 UNITED STATES V. STERLING CENTRECORP.

so long as it “directs the workings of, manages, or conducts

the affairs of a facility.” Bestfoods, 524 U.S. at 66.

Put differently, had a private entity exerted control over 

the Site coextensive with that exercised by the United States 

through the issuance of the Order—completely shutting 

down mining and waste disposal operations at the Site—it 

would assuredly be considered an “operator” under the 

Bestfoods standard. Merely because the Order was issued by 

the War Production Board in furtherance of the national 

defense during World War II does not protect the United 

States from liability. As we have stated in a similar context, 

“placing ‘a cost of war on the United States, and thus on 

society as a whole, [constitutes] a result which is neither 

untoward nor inconsistent with the Policy underlying 

CERCLA.’” Cadillac Fairview/California, Inc. v. Dow 

Chemical Co., 299 F.3d 1019, 1029 (alteration in original) 

(quoting FMC Corp., 29 F.3d at 846). Thus, the United 

States cannot escape that same fate merely because it 

operated pursuant to its general regulatory authority. See 

Shell Oil, 294 F.3d at 1053.

Finally, the majority’s reliance on PPG Industries Inc. v. 

United States, 957 F.3d 395 (3d Cir. 2020) is misplaced. See 

Maj. Op. 15. In fact, that case actually supports the 

proposition that the United States should be held liable here. 

In PPG Industries, the polluter was forced to argue that there 

was some “nexus” between the government’s activities and 

waste disposal activities at the site, because there was “no 

evidence that the Government specifically controlled 

operations related to pollution.” 957 F.3d at 403. There is 

no such attenuated relationship in this case. Indeed, it cannot 

be denied that the United States “specifically controlled 

operations related to pollution” and thereby involved itself 

with the pollution-creating waste dumping. See id. Thus, 
UNITED STATES V. STERLING CENTRECORP. 27

unlike in PPG Industries, the United States exercised direct 

control over “operations specifically related to pollution” at 

the Site. Bestfoods, 524 U.S. at 66. Under the Bestfoods

standard, the United States is therefore subject to CERCLA 

liability as an “operator” of the Site.