**NO COPY OF THIS TRANSCRIPT MAY BE MADE PRIOR TO 5-11-2009 

 UNITED STATES DISTRICT COURT 

 FOR THE DISTRICT OF NEW HAMPSHIRE 

 * * * * * * * * * * * * * * * * * * 

 * 

 UNITED STATES OF AMERICA * 

 * 06-CV-354-PB 

 v. * November 10, 2008 

 * 9:55 a.m. 

 GENERAL ELECTRIC COMPANY * 

 * 

 * * * * * * * * * * * * * * * * * * 

 TRANSCRIPT OF BENCH TRIAL - DAY FOUR 

 ORAL ARGUMENTS 

 BEFORE THE HONORABLE PAUL J. BARBADORO 

 APPEARANCES: 

 For the Government: Catherine A. Fiske, Esq. 

 Peter M. Flynn, Esq. 

 Laura J. Rowley, Esq. 

 Donald G. Frankel, Esq. 

 U.S. Department of Justice 

 For the Defendant: Peter A. Biagetti, Esq. 

 William M. Cowan, Esq. 

 Mintz, Levin, Cohen, Ferris, 

 Glovsky & Popeo, PC 

 Ignacia Moreno, Esq. 

 Thomas H. Hill, Esq. 

 General Electric Company 

 Court Reporter: Susan M. Bateman, CSR, RPR, CRR 

 Official Court Reporter 

 United States District Court 

 55 Pleasant Street 

 Concord, NH 03301 

 (603) 225-1453 

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 2 

 I N D E X 

 ORAL ARGUMENTS: PAGE 

 By Ms. Fiske 24 

 By Mr. Biagetti 71 

 ORAL RULING: 

 By The Honorable Paul J. Barbadoro 137 

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 1 P R O C E E D I N G S 

 2 THE CLERK: Court is in session and has for 

 3 consideration a bench trial in United States of 

 4 America versus General Electric Company, civil case 

 5 number 06-CV-354-PB. 

 6 THE COURT: All right. Let's do some 

 7 housekeeping first. I have read everything that the 

 8 parties have asked me to read, although it took me 

 9 about ten hours to do it. And I wish that they could 

 10 have given me less to read, but I extend the courtesy 

 11 to the parties to actually read everything that they 

 12 send to me. So we need to make sure that everything 

 13 that is on that cart is included in the record and so 

 14 that all of the exhibits have been identified and 

 15 those depositions that have been -- where you have 

 16 made designations and asked me to read the 

 17 designations -- are part of the record. So what I 

 18 need to make sure the Clerk does is go through the 

 19 list of admitted exhibits with the parties after we're 

 20 done today and make sure that those items are all in 

 21 the record. Any exhibits that the parties ask me to 

 22 admit during the trial and that they, in fact, 

 23 presented to me during the trial should also be 

 24 admitted, and you need to have a record of that. 

 25 Okay. Now, there may be other exhibits that 

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 1 the parties agreed to admit but that you didn't ask me 

 2 to read and didn't show to me. In my view, those 

 3 should be stricken and not included in the record 

 4 because I made clear to you that anything on which you 

 5 wanted me to base the decision should be presented to 

 6 me. And so I want to clean that up and remove 

 7 anything that was not shown to me from the record. So 

 8 those will be treated as ID exhibits that were not, in 

 9 fact, introduced. The Clerk needs to make that 

 10 distinction clear. 

 11 Finally, there may be some unresolved 

 12 objections to the admissibility of some of the 

 13 materials that you presented to me. Perhaps not. 

 14 Perhaps you've agreed that all of those things can be 

 15 admitted, but if there are any -- if anyone is 

 16 asserting that I should not base my decision on any of 

 17 the materials you asked me to read because some of 

 18 those materials are inadmissible, you should stand up 

 19 now, identify what it is that needs to be stricken, 

 20 make your argument, and I will decide whether to 

 21 exclude it or not. Otherwise, I'm going to treat all 

 22 of that as admissible, notwithstanding any objections 

 23 that had been previously made to it, either in the 

 24 final pretrial submissions or in a motion in limine or 

 25 anything like that, okay? So if you want anything 

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 1 stricken from the record that you presented to me to 

 2 read on Friday, stand up now. Otherwise we're going 

 3 to include it in the record. 

 4 MR. FLYNN: Your Honor, as you know, we have 

 5 the pending motion in limine for Neil Shifrin. 

 6 THE COURT: I just want to be clear so 

 7 there's no doubt about this. There are no pending 

 8 motions to strike anything that you asked me to read. 

 9 Now is your time to orally stand up and tell me, we 

 10 want you to strike Shifrin's deposition in its 

 11 entirety and here are the reasons why. So speak now 

 12 and I will rule now. So if you don't speak now and if 

 13 you can't even remember why you objected, how do you 

 14 expect me to know. So tell me what you're objecting 

 15 to, why you're objecting to it and I will rule, and 

 16 otherwise I will admit, okay? 

 17 So what do you want to strike in the 

 18 materials that were given to me? 

 19 MR. FLYNN: The United States would like you 

 20 to strike the deposition testimony and the report of 

 21 GE's expert, Neil Shifrin. 

 22 THE COURT: And what's the basis for the 

 23 objection? 

 24 MR. FLYNN: Essentially -- there's a few 

 25 bases, but if I can summarize, the general basis is 

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 1 pretty much what he talks about is it's not something 

 2 that an expert needs to testify about. It's common 

 3 sense. It's something that -- 

 4 THE COURT: It's within the cannon of the 

 5 judge, and therefore is not properly the subject of 

 6 expert testimony. 

 7 MR. FLYNN: Correct. 

 8 THE COURT: All right. Anything else you 

 9 want to say about that? 

 10 MR. FLYNN: We do think he's also unqualified 

 11 for some of the areas that he was proffered as an 

 12 expert in. He's an environmental engineer who 

 13 testified strictly about basic transport issues, and 

 14 here he's testifying about the regulations governing 

 15 disposal, about whether it makes commercial sense for 

 16 Fletcher to pick up material at GE, and then he 

 17 ultimately testifies on the ultimate issue of the 

 18 case, whether the scrap Pyranol is a useful product. 

 19 THE COURT: Okay. I overrule your objection. 

 20 The Shifrin deposition will be admitted. I found it 

 21 to be of almost no value to me and haven't really -- 

 22 and don't intend to rely on it in making any decisions 

 23 because it either says things that I already 

 24 understand, says things about which there are not 

 25 conflicts, or says things that I don't feel are 

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 1 material to the analysis of the problem that you've 

 2 asked me to resolve so I don't intend to rely on it. 

 3 I'm going to admit it. I just don't deem it to be 

 4 persuasive on any point. Of course, subject to the 

 5 defendant making some argument to me in closing that 

 6 helps me understand why it is valuable to me. 

 7 All right. Your objection is overruled. 

 8 What's the next thing you want to try to move to 

 9 strike, if anything? Anything else? 

 10 MR. FLYNN: I think that's it, your Honor. 

 11 THE COURT: All right. Do the defendants 

 12 want me to strike anything -- or any portion of 

 13 anything that they have submitted to me to review 

 14 here? 

 15 MR. BIAGETTI: No, your Honor. 

 16 THE COURT: Okay. So those will all be 

 17 admitted then, Vinny. And I think, therefore, we have 

 18 the record on which we're deciding the case. The 

 19 record consists of the testimony of those witnesses 

 20 who testified live, the videotaped deposition, the 

 21 excerpts that were designated and played and/or read 

 22 by me in the deposition that was submitted to me, any 

 23 exhibits that were admitted during the course of the 

 24 witness testimony or that were admitted during 

 25 interludes between witness testimony where the parties 

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 1 offered an exhibit and either did so by agreement or 

 2 there was objection and I ruled and admitted in whole 

 3 or in part the exhibit, and those materials that have 

 4 been submitted to me for review that I have read in 

 5 preparation for the closing arguments today. 

 6 That comprises the record on which I will -- 

 7 the evidentiary record on which I will decide the 

 8 case. Everybody agree? 

 9 MR. FLYNN: Your Honor, I apologize. My 

 10 colleague just reminded me that we had one other 

 11 objection that we would like to bring to your 

 12 attention. 

 13 THE COURT: What is that? 

 14 MR. FRANKEL: Your Honor, I believe that your 

 15 Honor designated certain portions of the Lloyd 

 16 Papageorge deposition where Mr. Papageorge testifies 

 17 concerning a market for used Aroclor, and we objected 

 18 to it based partly on your Honor's own ruling. You 

 19 struck this evidence at the time of the summary 

 20 judgment proceeding on the ground that you found it 

 21 was based on hearsay and not based on his personal 

 22 knowledge. So we would raise the same objection at 

 23 this point. 

 24 THE COURT: I don't frankly remember, but are 

 25 you speaking about the deposition testimony that -- 

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 1 and I may be confusing the witnesses' names -- who 

 2 testified that it was useful as an extender or -- 

 3 which one testified that it was useful as an extender 

 4 and which one testified that it was useful as a 

 5 plasticizer? 

 6 MR. FRANKEL: Well, your Honor, I believe Mr. 

 7 Papageorge, who was a Monsanto employee, testified 

 8 that he believed there was a market for used Aroclor, 

 9 and basically if you read the -- 

 10 THE COURT: I didn't find any testimony about 

 11 the market for scrap Pyranol -- expert testimony to be 

 12 useful, and I'm just not going to consider it. It 

 13 doesn't persuade me of anything, subject to the 

 14 defendants telling me why it does. I found the expert 

 15 testimony extremely unhelpful on both sides. It was 

 16 useful in telling me something I already knew from 

 17 other witnesses, which is that there are uses of 

 18 Aroclors as plasticizers and there were at the time 

 19 but as far as it said anything else -- the only thing 

 20 that I could glean from the depositions from the 

 21 experts that was useful was something that I already 

 22 knew, which is when you make a batch of something 

 23 using an Aroclor as a plasticizer, the Aroclor 

 24 comprises, by volume and by cost, a very small 

 25 percentage of the batch of whatever it is that you're 

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 1 producing, and therefore it is very risky to use scrap 

 2 Pyranol as a substitute for virgin Aroclor because if 

 3 there's any contaminant in there that makes the batch 

 4 unsuitable to save two bucks, you may lose $2,000. So 

 5 that businesses don't ordinarily do that kind of thing 

 6 when the constituent that they're using as a 

 7 substitute comprises such a small part of the cost of 

 8 the batch they're producing. The risks are simply too 

 9 great. Now, I didn't need an expert for that. I 

 10 already knew that based on other testimony so it just 

 11 says something I already knew but -- that was useful, 

 12 but pretty much everything else was -- either I 

 13 already understood or it was not useful to me. 

 14 All right. So I overrule your objection. I 

 15 certainly don't mean to be inconsistent with what I 

 16 did in the summary judgment, but to the extent I don't 

 17 find it to be useful to me, it's a ruling of no 

 18 consequence, okay? 

 19 MR. FRANKEL: Okay, your Honor. 

 20 THE COURT: All right. Anything else? Okay. 

 21 So we now have identified the record. I'm ready to 

 22 hear closing arguments, but I want to ask the parties 

 23 before I do, is the government in its closing argument 

 24 going to have a discussion about the correct 

 25 interpretation of the phrase "otherwise arranged for 

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 1 disposal", or are you done with that discussion and 

 2 are you going to focus solely on the facts? 

 3 MS. FISKE: Your Honor, we have understood 

 4 you to articulate a standard by which the government 

 5 can establish that scrap -- GE arranged for the use 

 6 and disposal of scrap Pyranol through its transfers to 

 7 the Fletcher site; meaning that the government must 

 8 establish by a preponderance of the evidence that GE 

 9 intended or had constructive intent that Fletcher's 

 10 would dispose of at least some of its scrap Pyranol. 

 11 The Court further articulated that 

 12 constructive intent is established if GE knew that 

 13 disposal was a substantial certainty at the time of 

 14 the transaction, and I will be presenting evidence to 

 15 you, your Honor, today -- or discussing the evidence 

 16 today in the context of that legal standard. 

 17 THE COURT: All right. So you're not going 

 18 to argue -- to the extent in the past you argued for a 

 19 broader standard, you preserved your right to argue 

 20 that, but you're not going to, in this closing 

 21 argument, try to advocate for that. 

 22 MS. FISKE: That's exactly correct. 

 23 THE COURT: Okay. Then before we get into 

 24 the closing arguments, let me just explore with you -- 

 25 because once I get on a case I start thinking about it 

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 1 24 hours day before I'm done with it. 

 2 I wanted to ask a couple of questions about 

 3 the government, and then if the defendant has any 

 4 input on this. 

 5 The Burlington Northern case seems to me to 

 6 be wrongly decided, and I'm trying to understand and 

 7 explain and reconcile that with my own view that if, 

 8 for example, there is, in fact, an arrangement for 

 9 disposal, that is, GE knows that spills -- GE intends 

 10 to dispose of the waste Pyranol and knows that spills 

 11 will result, that those spills do qualify as a 

 12 disposal, but that the spills of virgin chemicals to 

 13 be used in a manufacturing process would not be. 

 14 Because Burlington Northern suggests that those are -- 

 15 an arrangement for disposal occurs when there is an 

 16 arrangement to transport a virgin hazardous substance 

 17 and the transporter knows that spills will result. 

 18 That is, I think, wrong, and I think I have 

 19 an understanding as to why, under the language of the 

 20 statute, it is wrong, but my analysis about how 

 21 disposal works with a waste chemical is correct, and I 

 22 want to just ask a couple of questions and then make a 

 23 statement and get your reaction to it. 

 24 In order for there to be an arrangement for 

 25 disposal, CERCLA incorporates the definition of 

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 1 disposal that's in the -- what's the solid waste -- 

 2 what's the name of the act? 

 3 MS. FISKE: RCRA, your Honor. 

 4 THE COURT: It's the RCRA definition of 

 5 disposal. 

 6 MS. FISKE: Solid Waste Disposal Act. 

 7 THE COURT: Solid Waste Disposal Act. And 

 8 therefore a disposal means discharge, deposit, 

 9 injection, dumping, spilling, leaking or placing of -- 

 10 and this is what I want to talk to you about -- solid 

 11 waste or hazardous waste into or on any land or water, 

 12 et cetera, et cetera. 

 13 So an arrangement for disposal must be an 

 14 arrangement for discharge, et cetera, of a solid waste 

 15 or a hazardous waste. A hazardous waste must be a 

 16 solid waste by the definition. You can't have a -- it 

 17 can't be a hazard -- in order to be a hazardous waste, 

 18 you must be a solid waste. If anyone doubts that, 

 19 I've got the definitions. I thought I brought it down 

 20 here. Where's my cart? Right here. Hazardous -- 

 21 The RCRA definition -- or excuse me. The 

 22 Solid Waste Disposal Act definition of hazardous waste 

 23 is a solid waste or combination of solid wastes 

 24 which -- blah, blah, blah. So it's not a hazardous 

 25 waste unless it's a solid waste, and the definition of 

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 1 solid waste is garbage, refuse, sludge -- skipping 

 2 over some things -- or other discarded material, and 

 3 the regulations interpreting the Solid Waste Disposal 

 4 Act define a solid waste as any discarded material 

 5 that is not excluded. And a discarded material is any 

 6 material which is abandoned, recycled, considered 

 7 inherently waste-like, et cetera. 

 8 So I think there's a way -- and I don't know 

 9 if this has been explored -- but it seems to me that 

 10 an otherwise arranged for disposal of a hazardous 

 11 substance cannot occur unless the disposal is the 

 12 disposal of a solid waste, and a solid waste is an 

 13 abandoned or discarded material. And therefore, 

 14 Burlington Northern, in my view, is wrongly decided 

 15 because what you are arranging to transport is not a 

 16 solid waste. It is a hazardous substance but not a 

 17 solid waste. The argument that the government might 

 18 make that -- well, spilling makes it a solid waste, 

 19 but that would be an entirely circular definition 

 20 because spilling of a hazardous substance 

 21 automatically made it a solid waste -- you wouldn't 

 22 have the definition of disposal that requires spilling 

 23 of a solid waste. 

 24 So the way to distinguish Burlington Northern 

 25 -- and I think consistent with the purposes of CERCLA 

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 1 -- is to say that an agreement to transport a chemical 

 2 that is to be used in the manufacturing process is an 

 3 agreement that does not involve an agreement for 

 4 disposal because the substance -- although it's a 

 5 hazardous substance -- is not a solid waste; and the 

 6 spilling of it in that process does not make it a 

 7 solid waste, and therefore the agreement, even if it 

 8 includes or contemplates a spilling, is not spilling 

 9 of a solid waste and therefore it's not an arrangement 

 10 for disposal. So Burlington Northern was wrongly 

 11 decided, even though it is true, in my view, that an 

 12 arrangement for transport of a solid waste under 

 13 circumstances where the arranger knows that spilling 

 14 will occur is an arrangement for disposal of a 

 15 hazardous substance. 

 16 Do you see that distinction? Does the 

 17 government see that distinction? 

 18 MS. FISKE: Your Honor, I would like to make 

 19 two points in response to that. 

 20 THE COURT: First, do you see that 

 21 distinction? 

 22 MS. FISKE: Yes, I see the distinction. 

 23 THE COURT: And it's a way to say even my -- 

 24 how I'm applying it here is right, and you don't have 

 25 to agree that Burlington Northern was right in order 

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 1 for you to reach the conclusion that I'm reaching, 

 2 okay? Now, what comment do you want to make? 

 3 MS. FISKE: Thank you, your Honor. First of 

 4 all in this case, as we've shown in our summary 

 5 judgment motion, that this material is a RCRA 

 6 hazardous waste because of the TCE content in the 

 7 material, and then the second point -- 

 8 THE COURT: You're missing the point, okay? 

 9 It is not necessarily a hazardous waste simply because 

 10 of the TCE content. It has to be a solid waste to be 

 11 a hazardous waste, and a waste requires -- it's what 

 12 you're going to do with it. It isn't a waste unless 

 13 it's abandoned, discarded, recycled or blah, blah, 

 14 blah. There are certain chemicals that are inherently 

 15 waste-like, and they're defined in the regulations. 

 16 Now, maybe you can say that this is 

 17 inherently -- meets the -- the regulation talks 

 18 about- -- if you get into -- this isn't in the 

 19 statute. This is in 40 C.F.R. 261, 2(d). Inherently 

 20 waste-like material: "The following materials are 

 21 solid wastes when they are recycled in any manner.", 

 22 and it lists hazardous waste numbers FO20, F021; under 

 23 certain circumstances, F022, 23, 26 and 28. Now, 

 24 maybe TCE is one of those wastes, is it? Is it one of 

 25 those substances? Is it a 21, 20, 22? 

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 1 MS. FISKE: Yes, it is. 

 2 THE COURT: I'm not an expert in 

 3 environmental regulations. Do you know what those 

 4 numbers mean, FO20, FO21, FO22? 

 5 MS. FISKE: That's a reference to a list. 

 6 THE COURT: And is TCE one of those? 

 7 MS. FISKE: Yes. 

 8 THE COURT: So if it involves recycling of 

 9 TCE, it is a hazardous waste because it's deemed to be 

 10 a solid waste so, yes, but not inherently, okay? 

 11 Aroclor is not a solid waste unless it is to be 

 12 abandoned, et cetera, et cetera. TCE is not a solid 

 13 waste unless it is to be recycled. That's my point, 

 14 okay, and that's why -- because none of you have been 

 15 doing environmental law as long as I have. Back in 

 16 the early ages of environmental law was when I was an 

 17 environmental lawyer, and we always thought about 

 18 arranger liability as generator liability, but it 

 19 isn't and it's clear when you look at the statute that 

 20 it isn't. And you cite a piece of legislative history 

 21 that suggested that Congress wanted generator 

 22 liability, but the language that he used very clearly 

 23 draws a line between generators and arrangers for 

 24 disposal. 

 25 It might have decided -- and indeed many 

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 1 people argued that it should have allocated costs with 

 2 the person that creates the substance, but they did 

 3 not, and if they did something different and they 

 4 wanted to put the concept of polluter pays -- 

 5 identifies the polluter not as the generator but the 

 6 person that arranges for disposal. And the problem 

 7 with Burlington Northern is it gets very close to 

 8 saying the manufacturer of a hazardous substance is an 

 9 arranger for disposal because -- as almost anybody who 

 10 does environmental law knows -- all hazardous or 

 11 environmental chemicals will spill at some point, and 

 12 everybody knows that. You could simply say all 

 13 manufacturers of hazardous waste arrange for 

 14 the disposal -- of hazardous substances arrange for 

 15 the disposal of it because they know that spilling is 

 16 certain to result, and that's an overly expansive, 

 17 unrealistic definition of the arranger liability 

 18 standard. 

 19 Why is all of that important to me? Because 

 20 the definition that I am employing here is one that I 

 21 think is consistent with the overall purposes of 

 22 CERCLA. It does not expand liability so broadly that 

 23 it captures generators of waste who know that spilling 

 24 is going to occur. It's a narrower definition that 

 25 requires that there be disposal of a solid waste, and 

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 1 that is an important limiting principle on the 

 2 definition that I'm using because otherwise it would 

 3 expand the definition in the way that Burlington 

 4 Northern has. In a way that I think is 

 5 unrealistically broad. All right? So that if 

 6 Burlington Northern is reversed by the Supreme Court, 

 7 it does not necessarily follow that the standard that 

 8 I'm using is incorrect because I am using a different 

 9 standard that I think is narrower, that I think is 

 10 more consistent with the purposes of CERCLA and better 

 11 reflects the actual language of the statute that I'm 

 12 required to interpret. 

 13 Does anybody not understand me, or does 

 14 anybody want to say anything about what I have said? 

 15 MS. FISKE: I understand, your Honor. 

 16 MR. BIAGETTI: I agree with what you said, 

 17 your Honor, and I would only add that the articulation 

 18 you gave us on Thursday was not only narrower but more 

 19 demanding than Burlington Northern. 

 20 Burlington Northern talked about to avoid 

 21 imposing arranger liability on anybody that 

 22 manufactured -- that in that case, they decided there 

 23 was necessary, immediate, inevitable spillage out of a 

 24 process under the arranger's control. 

 25 What your Honor has I think articulated to us 

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 1 on Thursday was GE would have to know and understand 

 2 that not all of it would be able to be used and that 

 3 substantial quantities of it would have to be disposed 

 4 of. There's the increment of extra demand that I 

 5 think allows you, in your words, to avoid your huge 

 6 Burlington Northern problem. 

 7 THE COURT: It's two things. It is that -- 

 8 it is my view that arranged for disposal complicates 

 9 both cases in which the objective of the arrangement 

 10 is disposal and cases in which the arrangement is such 

 11 that the arranger knows that disposal will result from 

 12 the arrangement. That is narrower in the sense that 

 13 Burlington could be interpreted to suggest that even 

 14 where the arranger doesn't know it, but it is in fact 

 15 inevitable that he's conclusively presumed to know it, 

 16 the government -- that's the government's kind of 

 17 constructive knowledge standard that I think goes one 

 18 step too far in defining arranger liability. 

 19 Second, and equally important to distinguish 

 20 in Burlington Northern, I think the arrangement must 

 21 involve the discharge, deposit, injection, dumping, 

 22 spilling, leaking or placing of a solid waste. And a 

 23 chemical that is being used in a manufacturing process 

 24 is not at that point a solid waste, and it does not 

 25 become a solid waste merely because it is spilled. A 

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 1 waste has got to be a -- a solid waste has to be 

 2 discarded, abandoned, recycled or inherently 

 3 waste-like or a military munition identified in the 

 4 statute not otherwise accepted under the regulations. 

 5 And ordinarily if I make Aroclor -- for example, when 

 6 Monsanto sells Aroclor to GE, Monsanto knows when it 

 7 sells Aroclor to GE that GE is going to spill it. 

 8 They know it. It will happen. Does that mean the 

 9 arrangement to sell Aroclor to GE is an arrangement 

 10 for disposal? It is not because Aroclor is not a 

 11 solid waste. And so I think those are two important 

 12 limiting principles on my understanding of the phrase 

 13 "otherwise arranged for disposal" that distinguish 

 14 Burlington Northern and in my view cabin the 

 15 definition in such a way that is consistent with the 

 16 purposes of CERCLA, one of the principal purposes 

 17 being polluter pays; and as that concept has 

 18 developed, it is the person not that manufacturers but 

 19 that arranges for disposal that is identified in this 

 20 context as the polluter. 

 21 And so I am using that narrower definition, 

 22 and I have arrived at it by trying to be true to the 

 23 text of the provision that I am interpreting. Now, to 

 24 resolve this case I don't need to give a 

 25 finely-developed definition of that phrase. I think 

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 1 I've identified it with enough specificity to permit 

 2 the parties to argue how the evidence supports or 

 3 doesn't support that definition, and I think it gives 

 4 me enough specificity to apply the facts to the 

 5 phrase, as I've identified it, in such a way as to be 

 6 able to decide this dispute the parties have presented 

 7 to me, and that's all I need to do. The appellate 

 8 court might be more -- need to be more specific in how 

 9 it applies it. 

 10 All right. Does anybody want to say anything 

 11 more about the legal standard? If not, we can turn to 

 12 the closing arguments on the facts. 

 13 MR. BIAGETTI: Just, your Honor, as to the 

 14 wrestling over TCE versus Pyranol. There's no 

 15 evidence in this record that PCBs from either source 

 16 were found at this site, even when the EPA arrived, 

 17 and no evidence on this record that there was any 

 18 discarding done by Fletcher of anything in any drums, 

 19 as opposed to a release, which is a very different 

 20 portion of the statute. Release includes abandonment. 

 21 Disposal, discard, does not. 

 22 THE COURT: Well, an arrangement for disposal 

 23 by itself does not make somebody liable for clean up 

 24 costs, okay, but the issues that you've just cited to 

 25 me may be evidence about whether there was an 

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 1 arrangement for disposal, but they aren't dispositive 

 2 of the question. Because as I think we all have 

 3 agreed at this point, what matters is what was the 

 4 nature of the arrangement and what did the arranger 

 5 understand would be the result of the arrangement. 

 6 That's all I need to focus on. What actually happened 

 7 may have some relevance in trying to give meaning to 

 8 that problem, but I'm not examining here whether 

 9 Fletcher disposed of scrap Pyranol at the site. 

 10 That's not the issue because you conceded the other 

 11 elements of being liable here for arranger liability. 

 12 The only test is did GE otherwise arrange for 

 13 disposal of scrap Pyranol in any -- to any significant 

 14 degree during its arrangement with Fletcher, and on 

 15 that point I think there clearly was an arrangement 

 16 with Fletcher for the -- doing something with the 

 17 scrap Pyranol. I think you agree. So there was an 

 18 arrangement. GE otherwise arranged with Fletcher to 

 19 do something with the scrap Pyranol. It's a question 

 20 of what was the nature of the arrangement? Did GE 

 21 arrange for disposal of it, as I've identified that 

 22 term, and that's where the focus needs to be today 

 23 because that's the only question that I'm going to 

 24 resolve. 

 25 All right. So with that in mind, the 

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 1 government can go ahead. Present your argument. 

 2 MS. FISKE: Your Honor, can we ask the focus 

 3 to be switched over to the U.S.? 

 4 THE COURT: Okay. 

 5 MS. FISKE: This is a case about arrangements 

 6 for the use and disposal of GE's hazardous waste at 

 7 the Fletcher's Superfund site in Milford, New 

 8 Hampshire. 

 9 GE arranged for the transfer of scrap Pyranol 

 10 to Fletcher that GE knew was a rare and unpredictable 

 11 mix of hazardous substances, including spent TCE. 

 12 Fletcher's never used any more than two to 

 13 three drums a year of this material for his own 

 14 manufacturing operations. The balance was transferred 

 15 to third parties, including a company by the name of 

 16 Webtex or Webster. Some of it was also disposed of by 

 17 Fletcher's on the site, and much of the scrap Pyranol 

 18 remained unused for many years from leaking drums on 

 19 the site. 

 20 At the time GE did not care whether 

 21 Fletcher's used any of this scrap Pyranol or disposed 

 22 of it all. Mr. Abbe admitted that during his video 

 23 deposition that GE -- he would have transferred it all 

 24 to him even if he knew Fletcher's was using it all as 

 25 a weed killer, insecticide or dust suppressant. This 

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 25 

 1 is because scrap Pyranol was a hazardous waste 

 2 disposal problem for GE. GE dumped it in the Hudson 

 3 River, put it in landfills or gave it to people to 

 4 dump on the ground as a dust suppressant, defoliant or 

 5 insecticide. All that the corporation cared about was 

 6 removing it in the most economical manner possible. 

 7 THE COURT: Well, the most damaging statement 

 8 in Abbe's deposition is the following: "I don't think 

 9 that that was of any concern. We just hoped he was 

 10 able to use some of it, and the balance of it he could 

 11 dispose of it." That's the one sentence in Abbe's 

 12 deposition testimony that is the most damaging 

 13 statement to GE in this case. Don't you agree? 

 14 MS. FISKE: Yes, I do, your Honor. Most 

 15 importantly, not only did GE not care whether 

 16 Fletcher's used or disposed of it, but GE knew or 

 17 intended that hundreds of drums would be disposed of 

 18 by Fletcher's. The United States asks this Court to 

 19 find GE liable for the cost of cleaning up the 

 20 hazardous substances found in the scrap Pyranol at the 

 21 Fletcher's site. 

 22 As you indicated earlier, the only discussion 

 23 before you today is whether GE's transfer of the scrap 

 24 Pyranol to Fletcher's constituted an arrangement for 

 25 the disposal of hazardous substances within the 

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 26 

 1 meaning of section 10783, as you have defined the 

 2 issue, and for purposes of today the United States 

 3 will be discussing the evidence to show that by a 

 4 preponderance of the evidence, the United States 

 5 easily meets the standard that you have articulated. 

 6 In terms of the framework for my argument 

 7 today, my presentation will start with the discussion 

 8 of the nature of scrap Pyranol itself. Second, I will 

 9 review a chronology of the shipment from GE to 

 10 Fletcher's and what happened to the material at the 

 11 site. And then finally, I'll turn to a discussion of 

 12 the evidence that shows by a preponderance that GE 

 13 intended or had knowledge that disposal was a certain 

 14 result of its arrangements for some of the material. 

 15 In terms of the scrap Pyranol, the reason I 

 16 start with the discussion of that is because you can't 

 17 even meaningfully discuss the chronology and the 

 18 transfers without a foundation and an understanding of 

 19 what scrap Pyranol was. In addition, your Honor has 

 20 noted that what GE knew about the nature of scrap 

 21 Pyranol has a direct bearing on the credibility of 

 22 GE's claims that it believed at the time that all of 

 23 it would be used by Mr. Fletcher. 

 24 THE COURT: To me one of the key questions 

 25 is: What did GE know was in the drums? There are 

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 27 

 1 several questions that I think you need to ask 

 2 yourself to try to resolve this. What was the 

 3 arrangement with Fletcher? That is, what were its 

 4 terms? What did the parties understand the 

 5 arrangement to contemplate? That's one question you 

 6 need to answer. 

 7 A second central question is: What was in 

 8 the drums? Because GE knew what was in the drums. So 

 9 what was in the drums? 

 10 A third question you need to ask yourself is: 

 11 What did GE know about Fletcher? 

 12 A fourth question you need to ask yourself 

 13 is: What did GE know about the potential uses for 

 14 scrap Pyranol? And so what did GE, itself, do with 

 15 scrap Pyranol that did not go to Fletcher and what did 

 16 it understand it was -- were potential uses for scrap 

 17 Pyranol? 

 18 Those questions, to me, seem to be the 

 19 central questions that one needs to ask in order to be 

 20 able to answer the question: Was this an arrangement 

 21 for disposal? That's how I ordered my analysis as I'm 

 22 thinking through the problem. 

 23 MS. FISKE: Exactly, and I'll turn to 

 24 answering your question: What did GE know about what 

 25 was in the drums? That's one of the questions that 

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 28 

 1 you've asked. Scrap Pyranol represented a large 

 2 volume of waste generated by GE. The United States 

 3 acknowledges that some of the drums were pure -- 

 4 virtually pure PCBs. Mr. Hooper has described that 

 5 material as being relatively thick, almost like 

 6 molasses. 

 7 THE COURT: Reading the depositions, here's 

 8 what I understand. There were some occasions where 

 9 Pyranol would be -- where they would attempt to refine 

 10 Pyranol from Aroclor, and for whatever reason they 

 11 couldn't get it to the standard that they wanted and 

 12 they would have to scrap the batch. 

 13 In those cases the result would be a 

 14 relatively pure Pyranol that simply didn't meet the 

 15 standards, and when a batch like that has to be 

 16 scrapped and drummed, there may be a number of drums 

 17 that are Aroclor -- something relatively close to 

 18 Aroclor or relatively close to Pyranol with a 

 19 relatively small number of contaminants in it. Do you 

 20 agree with that? 

 21 MS. FISKE: I do, your Honor. 

 22 THE COURT: So there were occasions where 

 23 they couldn't get a batch to meet standard. In that 

 24 case it hasn't fallen on the floor. It hasn't mixed 

 25 with TCE, mineral oil and that kind of stuff. It 

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 29 

 1 hadn't gotten a lot of metal in it. It simply did not 

 2 get to the standard they want. They tried. They 

 3 processed it with the fuller's earth. They can't get 

 4 it up to spec and they decide to declare it scrap. 

 5 That would be the kind of drums that would contain 

 6 stuff that would be pretty close to Aroclor without a 

 7 lot of other junk in it. 

 8 MS. FISKE: Exactly. There's a possibility 

 9 in that scenario that it might have been put in a 

 10 secondhand or used drum that also contained a material 

 11 of a different sort but I -- 

 12 THE COURT: Sometimes, yes, but if there were 

 13 a whole batch, they're going to have more than 55 

 14 gallons of it. So you're going to have to fill 

 15 multiple barrels with it in order to get rid of the 

 16 batch. Sometimes they put the batch into the river 

 17 but sometimes they drum it, and I think it's fair to 

 18 say that that would happen. 

 19 MS. FISKE: I absolutely agree with that. 

 20 THE COURT: Although -- let me ask you this. 

 21 I also understood that there was a scrap Pyranol tank 

 22 that was sometimes used, and that that would 

 23 accumulate over time with Pyranol from a variety of 

 24 sources. What can you tell me about that? 

 25 MS. FISKE: I agree with that also, your 

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 30 

 1 Honor, and I think that tank may have also included 

 2 sometimes mineral oil, which was another dielectric 

 3 fluid that was sometimes in capacitors. Sometimes 

 4 that material could get mixed into that scrap Pyranol 

 5 tank or possibly TCE used to clean out the tanks might 

 6 also become mixed with that, and that would be a 

 7 scenario where you might have a case where Fletcher's 

 8 chemist -- you heard Mr. Hooper testify that the 

 9 chemist would open the drum and couldn't even decipher 

 10 what was in there because there was so little PCB. 

 11 That material might have come from a scrap Pyranol 

 12 tank or come from other sources. 

 13 THE COURT: All right. I think there is 

 14 evidence to suggest that at least some of the Pyranol 

 15 was contaminated in a way that made it unusable as a 

 16 dielectric for GE but did not include large quantities 

 17 of other contaminants, such as mineral oil, TCE, dirt, 

 18 other -- water -- other matters that would 

 19 contaminate. 

 20 MS. FISKE: I agree with that also, your 

 21 Honor. 

 22 In terms of quantities, there was testimony 

 23 that some of the drums contained as much as 22 percent 

 24 TCE, and that was demonstrated by Monsanto's testing. 

 25 You heard Mr. Hooper also -- 

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 1 THE COURT: Let's be clear about this. 

 2 Everybody knows this, but just for the record, TCE was 

 3 a commonly used degreaser that was used to clean parts 

 4 that had been exposed to other kinds of substances 

 5 during the manufacturing process, and TCE was used 

 6 extensively in this process to clean the capacitors 

 7 after they had been infused with Pyranol, and TCE was 

 8 used in such a way that it would result in being -- 

 9 getting into drip pans, spilling Pyranol with TCE in 

 10 it, and I think significantly GE did use TCE 

 11 distillers that took TCE that had been mixed with 

 12 Pyranol and distilled off TCE, leaving a residue which 

 13 had to be cleaned out periodically from the TCE 

 14 distillers that was largely a sludge of Pyranol and 

 15 whatever other chemicals were in there and whatever 

 16 TCE didn't get fully recycled. And so it was vitally 

 17 important to GE's manufacturing process that there be 

 18 no TCE in the dielectric fluid that was used in the 

 19 capacitors so any Pyranol with TCE in it would have to 

 20 be discarded. 

 21 MS. FISKE: Exactly, your Honor. 

 22 You also heard testimony through deposition 

 23 transcript of a GE employee -- 

 24 THE COURT: Can you tell me about -- I read 

 25 about -- and I'm not sure I fully understand this, but 

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 32 

 1 in addition to the use of Pyranol to infuse 

 2 capacitors, they talked about -- in one deposition -- 

 3 about it being used as a pump fluid. Can you tell me 

 4 about that, it being used as pump oil? It almost 

 5 sounded like it was in the hydraulic pump that was 

 6 used during the manufacturing process, and that that 

 7 would periodically have to drained and cleaned, as is 

 8 always the case with those kinds of pumping fluids. 

 9 Do you agree that Pyranol was used for that purpose? 

 10 MS. FISKE: Your assumption on that is the 

 11 same as mine. Monsanto sold Aroclors as hydraulic 

 12 fluids, and I assume, as you have, that it was used in 

 13 pumps. 

 14 THE COURT: Well, I'm not assuming. There 

 15 was testimony in one of the depositions from a GE 

 16 employee who talked about it being used in the pumping 

 17 process. So that would be another area in which you 

 18 would have contaminated Pyranol that is not Pyranol 

 19 that's used in the infusing or impregnating process 

 20 but is actually used as a hydraulic-type fluid. 

 21 MS. FISKE: Exactly, and that is material 

 22 that was also scrapped and labeled scrap Pyranol on 

 23 it. 

 24 THE COURT: Okay. 

 25 MS. FISKE: You also heard testimony from GE 

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 33 

 1 employee Stanley Huchro that some of the drums of 

 2 scrap Pyranol contained as little as 25 to 30 percent 

 3 PCBs. As Mr. Hooper testified, you only had to shake 

 4 the drum to tell that some of them were thin and some 

 5 of them were extremely thick, and as I mentioned 

 6 earlier -- 

 7 THE COURT: What do you understand Hooper to 

 8 mean when he talks about thin and thick? Are you 

 9 talking about viscosity or specific gravity? 

 10 MS. FISKE: I think, as you indicated 

 11 earlier, the witnesses used thin and thick sometimes 

 12 as a proxy for specific gravity. They are two 

 13 different concepts. 

 14 THE COURT: See, I think they use thin and 

 15 thick to refer to differing viscosity and that they 

 16 used a hydrometer to measure specific gravity, but 

 17 when they talk about thin and thick Pyranol, they're 

 18 talking about things with differing viscosity 

 19 because -- I don't know if you know -- TCE is a 

 20 substance with very low viscosity. Aroclor is 

 21 something, according to the testimony -- I've never 

 22 seen it -- but that has a heavier viscosity and that's 

 23 what -- I understood Hooper to be talking about 

 24 differences in viscosity when he talks about thick or 

 25 thin because he would talk about heavy or light if he 

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 34 

 1 were talking about specific gravity. 

 2 MS. FISKE: I agree with you, your Honor. 

 3 THE COURT: Okay. 

 4 MS. FISKE: We've been discussing the various 

 5 types of material that could be found in a drum of 

 6 scrap Pyranol, but there's no evidence in the record 

 7 that GE made any effort to distinguish between grades 

 8 of scrap Pyranol. It was all treated the same. 

 9 Without distinction, some of it was sent to landfills, 

 10 some was dumped into the Hudson, some was sent to 

 11 municipalities for use as dust suppressants, and as we 

 12 know, some of it was transferred to Fletcher's. 

 13 THE COURT: There's some hint in the record 

 14 that at various times GE explored the possibility of 

 15 sending Pyranol back to Monsanto to see if it could be 

 16 reclaimed. What can you tell me about that? 

 17 MS. FISKE: I believe, your Honor, that some 

 18 of it was, in fact, sent back to Monsanto to be 

 19 reclaimed, and it was the higher quality material that 

 20 was sent back -- the type of material that we talked 

 21 about initially. 

 22 THE COURT: Isn't that an effort at sorting 

 23 then that you say never occurred? 

 24 MS. FISKE: Okay. That's a fair point. I 

 25 should say with respect to the material that was 

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 35 

 1 transferred to Fletcher's, there was no effort to 

 2 distinguish between the types of material -- 

 3 THE COURT: I thought the Monsanto effort was 

 4 ultimately deemed unproductive because the cost of 

 5 trying to recycle it was greater than the potential 

 6 benefit to Monsanto so it didn't end up doing that to 

 7 any substantial degree. Have I got that wrong? 

 8 MS. FISKE: I would agree with that and there 

 9 were -- yes, I think you have that right. 

 10 THE COURT: All right. 

 11 MS. FISKE: The commonly understood use for 

 12 scrap Pyranol at the time was to apply it to the 

 13 ground as a dust suppressant, weed killer or 

 14 insecticide. Several GE employees knew it was being 

 15 used for that purpose, including Mr. Abbe. GE 

 16 employees also knew there was no market for the 

 17 material and that except for Fletcher's, no one wanted 

 18 it; with a possible exception for use as a dust 

 19 suppressant. 

 20 THE COURT: There was testimony that it was 

 21 used in road oiling -- in effect, dirt road oiling by 

 22 communities, but that is an arrangement for disposal. 

 23 Under the statute, road oiling is clearly an 

 24 arrangement for disposal. And so the only 

 25 transactions that I can see that GE engaged in with 

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 36 

 1 Pyranol that did not involve -- potentially did not 

 2 involve disposal was Fletcher. Everything else that 

 3 they did with Pyranol was arrangement for disposal, 

 4 and so leaving arguable whether its transactions with 

 5 Fletcher were different or whether they were like all 

 6 of the other arrangements which GE had for scrap 

 7 Pyranol, which were arrangements for disposal. 

 8 MS. FISKE: Exactly, your Honor, and we do 

 9 acknowledge that Fletcher's used a small amount of 

 10 scrap Pyranol in a specific type of paint that 

 11 Fletcher's made. 

 12 THE COURT: And there is evidence in the 

 13 record that GE understood that Fletcher had a use for 

 14 it that involved its use as a plasticizer in certain 

 15 kinds of paints. I think there's evidence to suggest 

 16 that Clark knew that, Abbe knew that, others knew 

 17 that. 

 18 MS. FISKE: I don't think Mr. Clark had ever 

 19 heard the term plasticizer before, but we'll get to 

 20 discussion of that. 

 21 THE COURT: Okay. I may have that wrong. 

 22 MS. FISKE: Our paint expert, Richard Benito, 

 23 who was in the paint industry for over 45 years, 

 24 thought it would be disastrous to add scrap Pyranol to 

 25 paint. The reason for this is because of the 

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 37 

 1 inconsistent and variable nature of scrap Pyranol. It 

 2 wasn't that one drum of it might theoretically be able 

 3 to be added to paint if it was all the same, but 

 4 because of the incredible varying nature, it was like 

 5 a Russian roulette, what -- 

 6 THE COURT: Well, but the important point is 

 7 how risky is it depends upon what's the potential 

 8 savings per batch to substitute. And because it 

 9 comprises less than 5 percent of the batch, the 

 10 difference in cost versus the cost of the entire batch 

 11 is such that it would render the transaction highly 

 12 risky from an economic perspective. 

 13 If you were going to use 95 percent Aroclor 

 14 in the application and you substituted 95 percent 

 15 scrap Pyranol, you might be much more willing to take 

 16 a risk because if you could save -- since scrap 

 17 Pyranol was sold to Fletcher at less than 1/50th of 

 18 the cost of Aroclor, if you could use it as a 

 19 substitute -- and even if you had to throw out ten 

 20 batches to get one good batch, it might still be 

 21 economically viable, but because its use as a 

 22 plasticizer comprises such a small percentage of the 

 23 total cost of the batch, it is truly a kind of Russian 

 24 roulette to put it in there. Because if you lose one 

 25 batch, you have to gain a huge savings on all of the 

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 38 

 1 other batches to make up for the cost. That's the 

 2 problem. 

 3 MS. FISKE: That's exactly right, your Honor, 

 4 and that's probably why -- even though GE was making 

 5 coatings at the same time in Schenectady, New York 

 6 that included Aroclors as an ingredient, it's probably 

 7 why GE never tried to use scrap Pyranol in any of 

 8 its -- 

 9 THE COURT: You can draw inferences from 

 10 several different things. That GE never used it. 

 11 That GE never found a person willing to use it or 

 12 another person never approached GE who was willing to 

 13 use it, and that the amount that Fletcher paid was so 

 14 low relative to the cost. All of those things suggest 

 15 that what your expert says is likely to be true and 

 16 you could argue would be understood to be true by GE 

 17 at the time it was engaging in the relationship 

 18 because these were all things that were known to GE. 

 19 GE knew it wasn't using it in its paint 

 20 operations. GE knew no other customer had come 

 21 forward willing to buy scrap Pyranol. GE knew what it 

 22 was charging Fletcher for the scrap Pyranol. GE knew 

 23 what Aroclor cost GE. All of those things are 

 24 knowable to the people at GE who are interested in 

 25 making a profit and are able to process that 

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 39 

 1 information in a reasonable economic way. So those 

 2 are the arguments I think you would draw from what GE 

 3 knew and knew all of those things, and I think that's 

 4 the way you try to make that argument about what GE's 

 5 position was at the time. 

 6 MS. FISKE: I agree with that, your Honor. 

 7 In addition, from a layman's perspective, it defies 

 8 common sense that all this scrap Pyranol could be 

 9 added to paint. Some of it was thick. Some of it was 

 10 thin. Some of it was black specks. Some of it was 

 11 amber. Some of it had cigarette butts. It may be 

 12 possible to imagine adding nearly pure Pyranol to 

 13 paint but not the mix that was being sent to 

 14 Fletcher's, and even Mr. Abbe agreed -- 

 15 THE COURT: Your expert doesn't say that -- I 

 16 didn't read your expert to say that TCE, itself, was 

 17 incompatible with a paint usage. What I understood 

 18 him to be saying was unless you know how much TCE is 

 19 in there, you can't get the formula right because TCE 

 20 might substitute for another solvent that you're 

 21 using -- a hydrocarbon solvent you're using, but 

 22 unless you know how much is in there, the adjustment 

 23 of your paint formula is not going to be right and you 

 24 run the risk of it being too thin if there's too much 

 25 TCE in a given batch. 

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 1 MS. FISKE: That's exactly right, your Honor, 

 2 but Mr. Abbe, himself, admitted that he was curious at 

 3 the time how such a small paint company could have 

 4 been using these large quantities of scrap Pyranol to 

 5 make paint and thought they would have wanted it to be 

 6 clean, and I interpret that to mean, you know, a 

 7 consistent material. 

 8 But with that background on scrap Pyranol, I 

 9 would like to now turn to a timeline that we prepared 

 10 for you marking out the chronology of the shipments of 

 11 scrap Pyranol to Fletcher's. That's Exhibit 78. 

 12 THE COURT: What do you need? You're not 

 13 seeing it on your screen? 

 14 MS. FISKE: I wasn't, but it's on now, your 

 15 Honor. 

 16 THE COURT: Okay. 

 17 MS. FISKE: The timeline is helpful to 

 18 demonstrate that at certain points during the 

 19 GE/Fletcher's relationship there was no question that 

 20 GE knew or intended that Fletcher's dispose of some of 

 21 the scrap Pyranol that GE did not want and that 

 22 Fletcher's could not use or did not want. 

 23 Starting at the beginning you heard Mr. 

 24 Hooper testify that in 1953 free loads of scrap 

 25 Pyranol arrived at the Fletcher's Milford site from 

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 41 

 1 GE. You heard Mr. -- 

 2 THE COURT: Couldn't that just be a product 

 3 sample? A company that wants to sell a chemical to a 

 4 company to be used saying, here, let me give some of 

 5 this to you for free and see if you like it. 

 6 MS. FISKE: Exactly, and if that was the 

 7 beginning and the end of the relationship and those 

 8 were the only drums that Fletcher's ever received, we 

 9 might not be here today, but that's how the 

 10 relationship started. 

 11 You heard Mr. Fletcher's son explain that Mr. 

 12 Fletcher was a junk dealer. He liked to trade in 

 13 chemicals, and his son even referred to him as a 

 14 chemical junky. 

 15 You heard Mr. Hooper testify that he didn't 

 16 think that Mr. Fletcher bought that material to use to 

 17 make paint but that he wanted to make a dime on it. 

 18 So during the intervening years from '53 to 

 19 '56 Mr. Fletcher starts looking for a customer who 

 20 might be interested in buying this material from him, 

 21 and ultimately Mr. Fletcher does find Webtex as a 

 22 customer. 

 23 THE COURT: I think GE could make a little 

 24 more from Hooper's testimony than that. I gathered 

 25 that even before he found Webtex he was getting rid of 

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 42 

 1 some of the Pyranol. He talked about some of it being 

 2 shipped even before the Webtex relationship, implying 

 3 that there might be other customers. I don't think we 

 4 can rule that out from the Hooper testimony. 

 5 MS. FISKE: I agree with that. There is 

 6 testimony to that effect. 

 7 In 1956 Fletcher starts taking its first 

 8 trips to GE to pick up scrap Pyranol from the Hudson 

 9 Falls and Fort Edwards facilities. When Mr. Hooper 

 10 first goes there, he meets a man named Mr. Metevier 

 11 who is in charge of the scrap salvage yard. During 

 12 the course of his relationship with Mr. Metevier, 

 13 Webster complains about the quality of the scrap 

 14 Pyranol, that it's too thin and junky. These 

 15 complaints are conveyed to Mr. Fletcher, who agrees -- 

 16 these complaints are conveyed to Mr. Metevier who 

 17 agrees that to compensate for the poor, junky, scrap 

 18 Pyranol he's going to give more of the same scrap 

 19 Pyranol to Fletcher's, and that was an acceptable 

 20 arrangement at that time between Fletcher's and GE -- 

 21 THE COURT: The key fact you're omitting is 

 22 that none of it would be returned to GE so that if 

 23 Fletcher is saying, it's too thin, I can't use it, and 

 24 they say, okay, we'll compensate by giving you some 

 25 free loads and it isn't returned, what inference does 

Case 1:06-cv-00354-PB Document 107 Filed 02/10/09 Page 42 of 158
 43 

 1 GE draw from what communications it had with Fletcher 

 2 about things that could not be used? Now, I think 

 3 GE's argument would be, well, there's testimony about 

 4 mixing and that he could mix it together and still get 

 5 it to a sufficient quantity. That's one possible 

 6 interpretation, and another is even if he understood 

 7 that these -- this scrap Pyranol was not all of 

 8 sufficient quantity to be usable by Fletcher -- 

 9 MS. FISKE: We favor the latter 

 10 interpretation and inference. 

 11 THE COURT: I thought you would. 

 12 MS. FISKE: Somewhere in the 1963-1964 time 

 13 period Mr. Varnum succeeds Mr. Metevier as foreman of 

 14 the scrap and salvage yard. During this era Mr. 

 15 Varnum no longer agrees to give free loads of scrap 

 16 Pyranol to Mr. Fletcher to compensate for the poor 

 17 quality. As a result, Mr. Fletcher instructs his 

 18 drivers to come to the site prepared with a hydrometer 

 19 to test the drums to make sure they achieve a specific 

 20 gravity that's desirable to Webster. 

 21 THE COURT: Have you figured out -- I'm still 

 22 baffled by the specific gravity analysis because if 

 23 thin meant light and TCE were the principal 

 24 contaminant in many of the drums, according to the 

 25 testimony I saw, TCE has a higher specific gravity 

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 44 

 1 than Pyranol. It's thinner, less viscous, but has a 

 2 higher specific gravity. So I don't know how you can 

 3 tell anything meaningful about -- through a hydrometer 

 4 analysis if the problem is to avoid contaminants. 

 5 MS. FISKE: Mineral oil and pump oil I 

 6 believe -- 

 7 THE COURT: Do have lower gravities. 

 8 MS. FISKE: And water. 

 9 THE COURT: As does water, obviously, but I 

 10 really never really understood how the hydrometer 

 11 really -- 

 12 MS. FISKE: I agree with your Honor that it's 

 13 somewhat of a puzzle, and I was surprised when I first 

 14 observed that TCE was heavier than water, but I think 

 15 in the context -- the really important thing is that 

 16 GE observes that some drums are being rejected and 

 17 that that's what really matters. That they see the 

 18 drums being tested. 

 19 THE COURT: That's a good point. Okay. So 

 20 during that period there was rejection. You argue 

 21 during the following period there was sending -- 

 22 uncritical sending of samples that resulted in the 

 23 complaint so GE knew that certain of the drums would 

 24 not meet Mr. Fletcher's standards but sent them to him 

 25 anyway. 

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 45 

 1 MS. FISKE: That's exactly right, your Honor, 

 2 and we'll move to the final time period. In 1956 Mr. 

 3 Varnum retires. Hooper has no recollection of going 

 4 back to the site after Mr. Varnum has retired. 

 5 In 1968 Mr. Fletcher writes a letter to GE, 

 6 that's Exhibit 5, and during this time period he 

 7 explains that a contract truck has been picking up 

 8 material. There's no Fletcher's employee at the GE 

 9 site to supervise what type of material is put on the 

 10 truck and, as a result, GE takes the opportunity to 

 11 indiscriminately load -- and as Mr. Fletcher refers to 

 12 it as -- everything in God's green earth onto the 

 13 truck and he complains that the material that he's 

 14 gotten is badly contaminated. 

 15 THE COURT: Your view is that "your man" -- 

 16 Fletcher got it wrong. It's Fletcher's man hired as 

 17 an independent rather than GE. 

 18 MS. FISKE: My view is that "your man" is a 

 19 GE scrap and salvage employee who is indiscriminately 

 20 loading material onto a contract truck -- 

 21 THE COURT: Put that excerpt back up. Oh, 

 22 okay. Is this from the same letter? 

 23 MS. FISKE: Yes, it is, your Honor. 

 24 THE COURT: So this is the explanation of the 

 25 "your man" question I raised during the question? 

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 1 MS. FISKE: Yes. 

 2 THE COURT: And as I understand those two 

 3 pieces together, your position is that Fletcher stops 

 4 sending his own men. Fletcher arranges for a 

 5 contractor to take it. Fletcher's contractor got out 

 6 of business. GE arranged for a contractor to haul the 

 7 stuff and "your man" references to Fletcher talking 

 8 about your contractor who brought the stuff. 

 9 MS. FISKE: Right. Either your contractor or 

 10 your people in the scrap and salvage area. Either 

 11 one. There's no Fletcher's representative at the GE 

 12 plants to supervise and test what's going on the 

 13 trucks. 

 14 THE COURT: But your man has been hauling 

 15 refers to the hauler, not the man on the loading dock. 

 16 MS. FISKE: That's correct. 

 17 THE COURT: So I think the sensible way to 

 18 put that together is to say that the chronology was 

 19 after Fletcher stops sending his own trucker -- he 

 20 originally had a contract trucker. That contract 

 21 trucker went out of business. GE found another 

 22 contract trucker for him and started sending stuff, 

 23 and it was during this period of contract truckers 

 24 that Fletcher was getting what he decided was 

 25 insufficient quality Pyranol and he's blaming GE 

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 1 because the men at the loading dock would use that 

 2 opportunity to foist on them all of the scrap Pyranol 

 3 they had when they knew, because of rejections during 

 4 the Varnum era, that only certain Pyranol would be 

 5 useful to Fletcher. 

 6 MS. FISKE: That is exactly right, your 

 7 Honor. You heard a -- well, let's now look at the 

 8 Abbe/Clark memo, which is Exhibit 7. So this letter 

 9 comes in and you have Mr. Abbe -- I'm sorry, Mr. Clark 

 10 authoring a memo analyzing this issue and determining 

 11 that Mr. Fletcher has a valid claim and it's cited 

 12 that some of the material contains up to 22 percent 

 13 TCE and water. 

 14 THE COURT: It's your position that the 

 15 material that was sampled is scrap Pyranol from the GE 

 16 scrap Pyranol area, not materials that were actually 

 17 in Fletcher's possession. 

 18 MS. FISKE: That's correct, but it's 

 19 analogous material -- is what I would argue. 

 20 THE COURT: Okay. 

 21 MS. FISKE: And Mr. Abbe and Mr. Clark 

 22 discuss this problem and agree -- and from Mr. Abbe's 

 23 deposition you read not only do they find that 

 24 Fletcher's had a valid claim and didn't see any reason 

 25 to dispute any aspect of the letter, but also -- can I 

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 1 see slide one, the quote that you read to me before -- 

 2 they decide that they'll just give him all of the 

 3 material for free because we hoped he was able to use 

 4 some of it, and the balance of it he could dispose of 

 5 it, and that's how the relationship ends, with GE just 

 6 giving Fletcher's 1,800 drums, many of which he 

 7 doesn't want and cannot use, and they're transferring 

 8 the responsibility for disposing it to him, even 

 9 though in that letter he requests, please, can I pay 

 10 for this material to come back to you? I want you to 

 11 pay the return freight and then I'll pay you for the 

 12 good stuff that I want, and GE says, no, that's not 

 13 worth the hassle for us. You just keep it all. It's 

 14 your problem to figure out how to dispose of it, and 

 15 by that way, as the Clark and Abbe memo memorializes, 

 16 GE has avoided the cost of its own disposal of this 

 17 material and put it onto Fletcher's. 

 18 In terms of wrapping up the chronology of 

 19 what actually happened at the Fletcher site to the 

 20 remainder of this material, for many years after 

 21 1968 -- I should say he loses Webster as a customer 

 22 sometime in '68, and then from the time period we 

 23 heard Mr. Hooper testify -- from '68 to sometime in 

 24 the '80s, when Mr. Kamieniki removes the material, 

 25 there's no significant customer from Mr. Fletcher for 

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 1 this material; and maybe a few people take it to 

 2 remove it for dust suppressant, but the majority of it 

 3 remains on the site. 

 4 THE COURT: Well, Fletcher's son says they 

 5 also used some of it as a dust suppressant at the 

 6 site. 

 7 MS. FISKE: Yes. Exactly. To describe that 

 8 a little more graphically, they would punch a hole in 

 9 this 55 gallon drum, load it on a forklift and drive 

 10 it around the site during the summer months to 

 11 suppress the dust in the yard. 

 12 We also heard testimony -- there's a 

 13 stipulation on this -- that during the filter blending 

 14 process scrap Pyranol spilled on the ground, and of 

 15 course some of it also spilled on the ground when the 

 16 trucks were washed out. 

 17 By 1978 TSCA banned the use of PCBs in 

 18 anything other than a totally enclosed application, 

 19 such as a capacitor. So after that scrap Pyranol had 

 20 no known legal use. 

 21 From the day that Fletcher's first received 

 22 the scrap Pyranol in '53 until 1978, he never used any 

 23 more than two or three drums of it a year in his own 

 24 paint manufacturing process, and even then he could 

 25 only use the thicker, higher quality Pyranol. 

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 1 So now that we've discussed the chronology, I 

 2 want to turn back to some of the evidence that we 

 3 believe supports a finding under your legal standard 

 4 that you've articulated; that GE arranged for the use 

 5 and disposal of some of this scrap Pyranol at the 

 6 Fletcher's paint site. 

 7 Throughout these proceedings your Honor has 

 8 expressed interest in the evidence that shows what GE 

 9 knew or intended with respect to this scrap Pyranol 

 10 that would be disposed of by Fletcher's; and with that 

 11 question in mind, there are two areas to explore, the 

 12 first is GE's actions, and in a case like this what GE 

 13 actually does with the material is more probative than 

 14 after the fact characterization. Here you're going to 

 15 see actions speaking louder than words. 

 16 The second area to explore is not just what 

 17 GE did but what GE said it thought at the time and 

 18 what it knew at the time, but let's start with the 

 19 first category, action. What did GE actually do with 

 20 the material? You've seen this chart before. It's 

 21 Exhibit 69. 

 22 THE COURT: Can I ask you, for the benefit of 

 23 my court reporter, how much longer do you thing you're 

 24 going to be? 

 25 MS. FISKE: Ten minutes. 

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 1 THE COURT: Okay. We'll go until you finish 

 2 and then take a break. 

 3 MS. FISKE: What did GE actually do with this 

 4 material? Some of it was discharged to the Hudson 

 5 River, some discarded into various landfills; and this 

 6 was all during the same time period that the material 

 7 is being transferred to Fletcher's. It was also 

 8 transferred to municipalities for use as a dust 

 9 suppressant and given to employees for use as a weed 

 10 killer and removed by scavengers for out of sight, out 

 11 of mind disposal. 

 12 Also important in a case like this is the 

 13 absence of action. It's also a compelling indicator 

 14 of what GE really thought about this material. GE 

 15 claims that it was selling this as a useful commercial 

 16 product, but GE never undertook even the most 

 17 rudimentary QA/QC on the material, such as seeking out 

 18 floor sweeping. GE never distributed scrap Pyranol 

 19 from anyplace other than the scrap yard. GE did not 

 20 place scrap Pyranol in clean, new drums or give it a 

 21 catchy name like plasticizer Pyranol. At the time no 

 22 one at GE ever called it anything except scrap or 

 23 waste Pyranol. 

 24 THE COURT: Well, I don't think there's any 

 25 dispute here that GE considered scrap Pyranol to be a 

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 1 waste. It did not conceive of scrap Pyranol as being 

 2 a means by which GE could turn a profit through the 

 3 sale of it. That it was able to generate very small 

 4 amounts of income through the sale of Pyranol to 

 5 Fletcher was virtually incidental. Everyone concedes 

 6 that GE's objective was to be rid of the Pyranol, not 

 7 to make money through the sale of it. It simply 

 8 wouldn't have taken the time to filter it, label it, 

 9 market it, because it didn't see the scrap Pyranol as 

 10 being a line of products for GE. It was a nuisance to 

 11 be gotten rid of, and I don't think there's any 

 12 dispute about that. 

 13 MS. FISKE: That's exactly right, and the 

 14 same with respect to the warnings that were provided 

 15 to certain products, such as capacitors and 

 16 transformers, but not on the drums of scrap Pyranol 

 17 that were transferred to Fletcher's. So you've come 

 18 to the exact same conclusion that I was advocating 

 19 with respect to what GE wasn't doing. 

 20 Turning to the comment you made about how GE 

 21 didn't see this as a product with any economic 

 22 value -- 

 23 THE COURT: It was able to make some money 

 24 from selling it, but it wasn't something that was a 

 25 line of business that GE was interested in being in 

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 1 because it couldn't make any kind of profit that 

 2 mattered from it. It was an economical way to be rid 

 3 of what it saw as a waste product; but at the same 

 4 time it is -- I think the only way to interpret the 

 5 evidence is to attribute to GE an understanding that 

 6 at least some of it would be used by Fletcher in a way 

 7 that justified Fletcher paying for it, and I think 

 8 there's that evidence and there's evidence that at 

 9 least some GE employees understood that he was using 

 10 it as a plasticizer in paint. 

 11 MS. FISKE: If I may, I would like to direct 

 12 your attention to the price that GE was charging for 

 13 scrap Pyranol. GE claims that this material was 

 14 valuable because Fletcher's was willing to pay for it 

 15 and let's -- I would like to just focus on that for a 

 16 minute. When GE didn't simply give it to Fletcher's, 

 17 GE charged approximately 4 cents per gallon of scrap 

 18 Pyranol, and that's discounting for the value of the 

 19 drums that it came in. That price that Fletcher's 

 20 paid per -- 

 21 THE COURT: So you're assuming a drum is 

 22 worth a buck twenty-five? 

 23 MS. FISKE: Correct. 

 24 THE COURT: Okay. So if we assume that, you 

 25 would get per gallon cost of scrap Pyranol is four 

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 1 cents versus three dollars for virgin Aroclor. 

 2 MS. FISKE: Exactly, but even that is an 

 3 overstatement of the economic value of scrap Pyranol. 

 4 Can I see Exhibit 79, please? This exhibit 

 5 is based on the Siebel affidavit where she summarizes 

 6 and reconciles GE's accounts of the volume of scrap 

 7 Pyranol that's sent to the Fletcher's site. 

 8 The free initial shipment is not included on 

 9 her affidavit, nor is the free shipments given by 

 10 Metevier, but the material from '66 to '67 that's 

 11 ultimately given to Fletcher's for free, that volume 

 12 is reflected in her affidavit and it's pretty stark. 

 13 THE COURT: Where are you getting the number 

 14 for the free initial shipment and the -- 

 15 MS. FISKE: Those are based on -- the number 

 16 for the free initial shipment is based on a 

 17 conservative estimate that Mr. -- 

 18 THE COURT: Hooper's number of barrels that 

 19 came in? 

 20 MS. FISKE: Yes. 

 21 THE COURT: What's the Metevier adjustment? 

 22 What's the basis for that number? 

 23 MS. FISKE: You will notice that I shaded 

 24 that slightly different because it is just based on 

 25 witness testimony and -- this actually comes out of 

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 1 EPA's determination where estimates were based on 

 2 volumes for a past year compared to the years when 

 3 Metevier was giving it for free, but it's not really 

 4 significant. The real thing that you can focus on 

 5 here where it's uncontroverted, based on GE's own 

 6 30(b)(6) affidavit, are the two columns that I've 

 7 noted where it's documented by GE's own ledgers, and 

 8 you can see that roughly half -- maybe slightly more 

 9 than half of the material was simply given to 

 10 Fletcher's for free. 

 11 THE COURT: Okay. 

 12 MS. FISKE: The final two years of the 

 13 relationship are the most significant. By 1965 

 14 Fletcher's was on a list of cash in advance only 

 15 customers. He was supposed to pay cash in advance, 

 16 but for two years he obtained scrap Pyranol for no 

 17 payment at all. This was extremely unusual to have an 

 18 accounts receivable spread out for such a long period 

 19 of time, especially for a cash in advance person -- 

 20 THE COURT: Again, I don't think there's 

 21 going to be any dispute about this. GE was 

 22 accumulating scrap Pyranol, needed to get rid of it 

 23 and was glad to have Fletcher take it off its hands. 

 24 Certainly it wanted to get any money Fletcher could 

 25 pay for it, but its principal goal was to get that 

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 1 stuff out of there; and if it could get it out of 

 2 there without cost, it's ahead of the game when 

 3 compared to the cost it would have to incur to have 

 4 somebody haul it out of there. So that's what I -- I 

 5 don't think there's going to be any real dispute about 

 6 that. 

 7 MS. FISKE: And GE was pleased to simply give 

 8 the scrap Pyranol to Fletcher's for free because it 

 9 meant GE didn't have to pay for its disposal. 

 10 Now I would like to turn to another area to 

 11 explore, which is what did GE know at the time and 

 12 what did they say at the time? Perhaps the most 

 13 single important factor of the whole case is what GE 

 14 knew about the nature of scrap Pyranol itself -- the 

 15 varying nature of the mixture of hazardous substances 

 16 that it was transferring to Fletcher's. Some of it 

 17 could have been relatively pure, but some of it could 

 18 not be used to make paint. 

 19 GE knew it made no effort to distinguish 

 20 between quality and scrap Pyranol. It gave it all 

 21 indiscriminately, especially during the last contract 

 22 truck years. It was all indiscriminately loaded on 

 23 the trucks and sent to Fletcher's. This fact has 

 24 direct relevance on the credibility of GE's claims 

 25 that GE intended or knew that all of it was being used 

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 1 by Fletcher's. 

 2 Both Mr. Clark and Mr. Abbe admit that they 

 3 thought Fletcher's was a small paint manufacturing 

 4 company. Mr. Hooper testified it had four or five 

 5 full-time employees, maybe more during the summer 

 6 part-time. Not one senior level GE employee ever 

 7 asked Fletcher what he was doing with the material. 

 8 Moreover, even if Mr. Fletcher had answered, oh, I 

 9 pour some of it on the ground to keep down the dust in 

 10 the summer, GE would have continued to have given it 

 11 to him. 

 12 Mr. Abbe testified that he didn't care if 

 13 Fletcher's was using some of it as a dust suppressant, 

 14 insecticide or weed killer. In his own words, he 

 15 didn't care what it was being used for, and I quote 

 16 again from the excerpt that you read earlier, "We just 

 17 hoped he was able to use some of it, and the balance 

 18 of it he could dispose of it.". 

 19 THE COURT: You keep suggesting that GE 

 20 employees knew that Fletcher was using it as a dust 

 21 suppressant and/or insecticide or herbicide. I know 

 22 there was an Abbe statement in a deposition that was 

 23 later disavowed by Abbe that still is in one of the 

 24 exhibits that was admitted, the summary that -- 

 25 prepared by and testified about in the Siebel 

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 1 affidavit, but other than that, is there any actual GE 

 2 testimony from any employee that said, we knew he was 

 3 using it for that purpose? 

 4 MS. FISKE: No, your Honor. 

 5 THE COURT: Okay. 

 6 MS. FISKE: But Mr. Abbe's description during 

 7 his deposition and the Abbe/Clark memo make explicit 

 8 what has been implicit in the relationship between GE 

 9 and Fletcher's all along, which is that GE would 

 10 transfer scrap Pyranol to Fletcher's with the fortuity 

 11 that maybe he could use some of it to make paint, 

 12 which he didn't really care, and with the 

 13 understanding that much of it would not be able to be 

 14 used by Mr. Fletcher. 

 15 This corporate attitude is best summarized in 

 16 GE's own words, turning to Exhibit 9. Here is a 1970 

 17 survey explaining GE's past disposal practices, and 

 18 here GE explains that much of the material has been 

 19 removed by scavengers who dispose of it in an out of 

 20 sight, out of mind manner. If you read this entire 

 21 memo on how GE removed waste Pyranol, nowhere is there 

 22 any discussion of sales of scrap Pyranol as a useful 

 23 product to make paint. 

 24 GE just didn't think of it that way at the 

 25 time. GE just thought of it as being removed by 

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 1 scavengers for some unknown purpose that did not 

 2 matter. It was out of sight, out of mind. 

 3 THE COURT: Well, they knew that people were 

 4 using it as a dust suppressant so it could be valuable 

 5 to scavengers as a dust suppressant. The idea of 

 6 insecticide is a little harder for me to understand. 

 7 The idea of an herbicide is easier to understand -- 

 8 you pour oil on the plants and they die -- but the 

 9 principal use for these kinds of waste oils was to go 

 10 around -- waste oils and products like waste oils like 

 11 PCBs -- was to go on roads and put it down on dirt 

 12 roads because they would get dusty otherwise. It's 

 13 called oiling the roads. That's what they used to do 

 14 with all of this stuff. So GE well understood it 

 15 would be valuable for scavengers for that use because 

 16 it knew, and it's witnesses testified, that some of it 

 17 was used for the town in that way in the area. 

 18 MS. FISKE: Exactly. Similarly, I would like 

 19 to turn to a 1975 survey. That's Exhibit 19. You see 

 20 this one during our opening statement -- 

 21 THE COURT: Again, significantly, in my view, 

 22 the way I understand the law, dust suppressant uses 

 23 are disposals. So that all of the uses that GE was 

 24 aware of, other than whatever Fletcher was doing, were 

 25 disposals. 

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 1 MS. FISKE: That's exactly right, your Honor. 

 2 Here you have -- again, as my co-counsel, Mr. Flynn, 

 3 has indicated, you are the company you keep -- and 

 4 here you see method and place of disposal throughout 

 5 that time period as being to landfills and to 

 6 Fletcher's. Also in -- 

 7 THE COURT: Wait, wait. I couldn't glean 

 8 that much from it because the chart seems to say where 

 9 disposed, and then it was modified to say method and 

 10 place of. 

 11 MS. FISKE: That's correct. 

 12 THE COURT: And how do I glean from this -- 

 13 what does it tell me about method of disposal? 

 14 MS. FISKE: Method, I think, is determined by 

 15 where it is sent. I think it's implicit in where it's 

 16 sent. 

 17 THE COURT: One of them is explicit. It 

 18 says, disposed of in landfill located on the west side 

 19 of South Glenn Falls, right? 

 20 MS. FISKE: Yes. 

 21 THE COURT: And the others are not explicit. 

 22 Is there evidence to believe that GE understood that 

 23 Rockland Environmental Service, Chem-Trol, were land 

 24 fillers of the waste? 

 25 MS. FISKE: I believe they're chemical waste 

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 1 disposal companies. 

 2 THE COURT: Is there evidence in the record 

 3 that GE understood that? 

 4 MS. FISKE: It depends on your -- I know 

 5 there was deposition testimony that we have designated 

 6 on this point. I don't know whether those were 

 7 included in the material -- 

 8 THE COURT: I don't remember. It might be. 

 9 I read an awful lot of this stuff. 

 10 MS. FISKE: I don't remember myself. I know 

 11 it's in the greater record that was filed by the 

 12 parties, but I'm not sure if it was focused 

 13 specifically or drawn to your attention. 

 14 THE COURT: Okay. 

 15 MS. FISKE: Given the various facts and 

 16 circumstances I've discussed above, including the 

 17 nature of scrap Pyranol, it's clear that GE intended 

 18 or knew that it was absolutely certain that at least 

 19 some of the material would be disposed of. At the 

 20 same time we expect GE to assert that its employees 

 21 believed that all this material would be used to make 

 22 paint, but, your Honor, the only testimony that GE can 

 23 submit to support that position is that of Mr. Clark. 

 24 Mr. Clark is a loyal GE employee who was the 

 25 only one brought to trial -- and whether you find his 

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 1 testimony credible or whether you find that it was -- 

 2 had an objectively reasonable basis to believe all of 

 3 this material was used to make paint, he is a 

 4 tangential figure who has no personal knowledge of all 

 5 that occurred and he was only at the GE plant for a 

 6 short period of time; and as you have recognized, he 

 7 specifically admits that his primary purpose -- what 

 8 he was concerned about more than anything else was 

 9 making sure that this material was removed from the GE 

 10 facilities. 

 11 So I'm getting close to my closing, and I 

 12 want to make just a couple of final points again about 

 13 the last years of the relationship. The evidence in 

 14 the record shows that the last two years GE sent 

 15 Fletcher's scrap Pyranol by contract truck. Due to 

 16 the use of the contract truck there was no Fletcher's 

 17 employee at the time to supervise what material was 

 18 being loaded on the truck. By this time GE knew that 

 19 Fletcher's could not use a portion of the scrap 

 20 Pyranol being shipped to Fletcher's. Fletcher's had 

 21 previously informed Metevier that he didn't want 

 22 junky, thinned-out versions. Then under Mr. Varnum's 

 23 years, GE witnessed Mr. Fletcher refusing to take bad, 

 24 thinned-out, junky material, and so by 1966, when GE 

 25 sent Fletcher's material by contract truck, GE 

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 1 indiscriminately loaded all of this material onto the 

 2 truck knowing that Mr. Fletcher was not going to be 

 3 able to use all of it and would not want all of it to 

 4 make paint. 

 5 As Fletcher wrote to GE, GE loaded everything 

 6 under God's green earth onto the truck and then 

 7 expected Fletcher's to pay for it, although it didn't 

 8 even matter if Fletcher's paid for it or not. 

 9 The United States agrees with your Honor that 

 10 GE is liable if only one transaction for one drum of 

 11 scrap Pyranol was an arrangement for disposal. The 

 12 evidence here has shown at trial that for at least two 

 13 years GE sent approximately 1,800 drums of scrap 

 14 Pyranol to Fletcher's where much of it he did not want 

 15 and could not use. 

 16 THE COURT: Do you think there's any evidence 

 17 in the record that when GE made this arrangement with 

 18 Fletcher at any point that any GE employee desired 

 19 that the scrap Pyranol be discharged, deposited, 

 20 injected, dumped, spilled, leaked or placed into or on 

 21 land so that the waste may enter the environment? Do 

 22 you think that they desired that? That there's any 

 23 evidence that that was, in fact, the objective? What 

 24 we want to do is we want to cause Pyranol to be put 

 25 into the environment? 

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 1 MS. FISKE: Your Honor, the closest to that 

 2 testimony is Mr. Abbe's testimony where he said the 

 3 rest of it Mr. Fletcher could dispose of however he 

 4 wanted to. 

 5 THE COURT: We knew that that would happen, 

 6 but I'm trying to make this distinction between that 

 7 which is your objective. The objective of a 

 8 conspiracy is to distribute drugs, say. I don't think 

 9 that there's any evidence in the record that would 

 10 suggest that any GE employee involved in this 

 11 arrangement with Fletcher desired this disposal; and I 

 12 think if desired disposal were the standard, you would 

 13 have almost no case in which there would be arranger 

 14 liability. It's undisputed that GE's principal 

 15 objective was to be rid of the scrap Pyranol. It 

 16 seems to me the evidence suggests that GE was 

 17 indifferent as to whether it would be used in a 

 18 product or released into the environment. 

 19 The disputed question is was it aware that 

 20 it -- or substantially certain that it would be 

 21 disposed of, but I don't see any evidence that anyone 

 22 at GE desired the release of this hazardous substance 

 23 into the environment. Only that it wanted to be rid 

 24 of it and was indifferent to whether it was disposed; 

 25 of; and perhaps as you're arguing, that it understood 

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 1 and was aware that disposal would be substantially 

 2 certain to follow. 

 3 MS. FISKE: Your Honor, I think we win our 

 4 case on constructive intent, as you suggest, and not 

 5 actual intent. 

 6 THE COURT: If you define intent to be 

 7 equivalent to purpose, that is objective -- that is, 

 8 this is what I want to happen -- as I said, almost no 

 9 chemical disposer -- when they put something in a 

 10 landfill, they're not desiring that it be released 

 11 into the environment. They want to be rid of it. 

 12 Now, you could argue somebody who uses it as 

 13 a dust suppressant actually desires its release into 

 14 the environment, but those applications are very 

 15 limited. Most people that arrange for disposal do not 

 16 desire the release of it into the environment. They 

 17 desire to be rid of it. 

 18 The term disposal is commonly understood. 

 19 It's not the Solid Waste Disposal Act definition. 

 20 It's to be rid of, and certainly they all desired to 

 21 be rid of it, but that isn't sufficient. And so 

 22 putting those terms together, that's why I reach the 

 23 conclusion that the only reasonable way to construe 

 24 arranged for disposal is to see that term as 

 25 encompassing cases in which -- there isn't evidence 

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 1 that they desired release into the environment but 

 2 that they understood that released into the 

 3 environment would inevitably follow from the 

 4 arrangement that they have made. Otherwise it becomes 

 5 almost a meaningless provision and captures almost 

 6 nobody, and that is inconsistent with the concept of 

 7 polluter pays. 

 8 For example, you could have somebody under 

 9 that definition who takes its hazardous waste and 

 10 conceals it in the trash that the waste company hauls 

 11 and still have that person not be guilty as an 

 12 arranger if they testified, and the fact finder 

 13 believed them, we didn't care what happened to it. We 

 14 just didn't want to have it anymore. Did you know it 

 15 would get into the environment? Yes. That's not what 

 16 we desired. We knew it would happen but -- that has 

 17 to be an arrangement for disposal, doesn't it? If 

 18 somebody goes to the waste company that they know is 

 19 landfilling the waste and they conceal hazardous waste 

 20 in with non-hazardous waste knowing that the contract 

 21 doesn't permit that, but they aren't an arranger 

 22 because they didn't desire to put it into the ground? 

 23 They just were indifferent to it and wanted to be rid 

 24 of it? That can't be what arranger means. I think 

 25 that is why GE has essentially conceded that that kind 

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 1 of very limited definition of arranger liability is 

 2 incompatible with the language and purpose of CERCLA. 

 3 MS. FISKE: I agree with that. I'm almost -- 

 4 one more page. 

 5 THE COURT: Finish up and then we'll break 

 6 early for lunch. I don't want to have to interrupt 

 7 your presentation. It would be too hard to come back 

 8 without a lunch break. 

 9 MS. FISKE: We're focusing on these last two 

 10 years where GE has been loading everything under God's 

 11 green earth onto the contract truck knowing that 

 12 Fletcher's does not want all of this material and has 

 13 specifically rejected some of it, and then at the 

 14 close of this time period Mr. Fletcher writes a letter 

 15 to GE saying, I want you to -- I'll pay you for this 

 16 material that you gave me, although I only want some 

 17 of it. I only want the good stuff. I want you to pay 

 18 for the return of the material I don't want. You can 

 19 come check it out. You can look and see what I have, 

 20 and you can -- we'll go through it drum by drum and 

 21 I'm not hiding anything. There's a lot of this stuff 

 22 here that is junk. 

 23 GE analyses this claim and decides that it's 

 24 valid but that it's not worth the hassle to pursue. 

 25 So at this point -- the point of this letter -- Mr. 

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 1 Abbe and Mr. Clark confer, and this is a 

 2 contemporaneous decision about sale and disposal. 

 3 They decide it's not worth it to collect the money 

 4 from Mr. Fletcher. Instead they're just going to give 

 5 it all to him for free. They're not going to bother 

 6 to come get the stuff that he doesn't want and cannot 

 7 use. Instead, they're going to leave the problem of 

 8 how to dispose of it to Mr. Fletcher. 

 9 THE COURT: Let me ask a hypothetical 

 10 question. If the evidence were such that up until 

 11 that point it's undisputed that GE thought every bit 

 12 of Pyranol was going to be used in paint and only 

 13 discovered for the first time when it got Fletcher's 

 14 letter that Fletcher couldn't use all of it in paint, 

 15 does GE's decision to write off the debt count as an 

 16 arrangement for disposal? Because it's already 

 17 transferred title to Fletcher. It's just a refusal to 

 18 take it back. And if that's the first knowledge it 

 19 had that it was not usable by Fletcher -- suppose 

 20 Fletcher had written a contract that said I am 

 21 disposing of every bit of this by putting it into 

 22 paint and I certify under oath that that's what I've 

 23 done with every drop up until now, and then he writes 

 24 this letter and GE does what it does. Is GE an 

 25 arranger at that point? 

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 1 MS. FISKE: That's a harder decision. 

 2 THE COURT: Yeah. That is a more interesting 

 3 question. You could argue that if there's a -- if the 

 4 contract terms are such that you could only deliver 

 5 Pyranol of a certain quality and you deliver Pyranol 

 6 of a bad quality, that you have an obligation under 

 7 the contract to take it back, and your refusal to take 

 8 it back under circumstances where you know disposal 

 9 will result makes you an arranger. You could make 

 10 that argument, but it seems to me that the point 

 11 you're making is that this evidence is useful because 

 12 it is consistent with our view of the case, which is 

 13 GE knew when it put those barrels on the truck that it 

 14 would not be usable, that it was going to be disposed 

 15 of, and this merely confirmed what GE knew from the 

 16 beginning. Fletcher is now calling them on it. The 

 17 barrels that you knew were garbage when you put them 

 18 on my truck and knew that they would have to be 

 19 disposed of, I want you to take back, and they didn't 

 20 take them back. 

 21 MS. FISKE: That's right. In addition, you 

 22 heard testimony from both Mr. Clark and Mr. Abbe that 

 23 even after they had written off this debt, they were 

 24 both still hoping that Mr. Fletcher would continue the 

 25 relationship and continue to remove more of this 

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 1 material. 

 2 THE COURT: Well, GE says they did continue 

 3 the relationship and they did remove it. 

 4 MS. FISKE: Either way, I'm not sure the 

 5 evidence actually reflects that, but even if it were 

 6 true, it seems to me that it helps our argument 

 7 because right smack in the middle of it then is this 

 8 contemporaneous decision that, oh, you can have it all 

 9 for free and I'm not going to bother to come get it. 

 10 Especially I'm doing this so you promise to come get 

 11 more of this stuff. You know, maybe we'll give you 

 12 more of this stuff that you don't want and cannot use. 

 13 I think that fact helps us in showing that 

 14 what has been implicit all along is now explicit. 

 15 That GE just hopes to remove this stuff and give it to 

 16 Fletcher's. Good, if he can use some of it, but if he 

 17 can't, then he can just figure out how to dispose of 

 18 it, and that's a win/win situation for GE. 

 19 GE transferred the problem of disposing of 

 20 its hazardous waste from GE to Fletcher's. Here GE's 

 21 actions and words show GE cared only about removing 

 22 the material from its facilities, not about selling a 

 23 useful product. GE knew that Fletcher could not use 

 24 and did not want some of the material but gave it to 

 25 him anyway. Scrap Pyranol now contaminates the site, 

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 1 and for this period during the contract truck years, 

 2 GE should be found liable. 

 3 In closing, when the Court considers all of 

 4 the evidence underlying the relationship between 

 5 Fletcher's and GE, the United States has established 

 6 by a preponderance of the evidence that GE knew that 

 7 Fletcher's would dispose of some of this scrap 

 8 Pyranol. 

 9 It was predictable that Fletcher's would not 

 10 be able to apply all of the scrap Pyranol to any 

 11 useful purpose. GE knew what was in those random 

 12 drums of mixture of waste material. Fletcher's also 

 13 told GE at least three times, once through Mr. 

 14 Metevier, once through Mr. Varnum and finally in the 

 15 1968 letter, that he did not want and could not use 

 16 thin, junky Pyranol but GE gave it to him anyway. So 

 17 the inevitable came to pass, and now the United States 

 18 asks that you find GE responsible for cleaning up its 

 19 hazardous wastes at the Milford Superfund site -- 

 20 Fletcher's Superfund site. 

 21 THE COURT: All right. It's 11:53 so let's 

 22 take a lunch break until 1:15, and then GE can make 

 23 its presentation, and then I'll take a break and I'll 

 24 give you my ruling. All right? 

 25 (Recess) 

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 1 THE COURT: Okay. Counsel. Go ahead. 

 2 MR. BIAGETTI: Your Honor, first of all on 

 3 behalf of me and the trial team, as well as Mr. Hill 

 4 and Ms. Moreno here from GE, we thank you very much 

 5 for your time, the extra time over the weekend and 

 6 most especially for the scrutiny that I know that you 

 7 have given to the evidence, to the record because I 

 8 think in this case, in particular, the proven facts 

 9 proven by a preponderance, are the most important 

 10 element here, and when your Honor reviews the 

 11 evidence, it will be clear, we believe, that on the 

 12 facts proven by a preponderance -- not where evidence 

 13 is in equipoise and not where it favors GE -- that the 

 14 inferences you may draw from those facts do not meet 

 15 the standard that your Honor has set out. 

 16 There's a case called Ricci, your Honor, in 

 17 the First Circuit which counseled district court 

 18 judges that they are not to superimpose their own 

 19 ideas of likelihood or probability, no matter how 

 20 reasonable those ideas may be. 

 21 THE COURT: What does that mean? 

 22 MR. BIAGETTI: It means, your Honor, 

 23 respectfully, that as you sit here today in 2008 and 

 24 look at the evidence and make connections between it, 

 25 that those connections may not be substituted for 

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 1 immediately drawn inferences from the proven facts, 

 2 and I'll give you a couple of examples. 

 3 THE COURT: Well, I think I'm supposed to do 

 4 the same thing I instruct jurors to do, which is to 

 5 base your verdict solely on the evidence but to use 

 6 your common sense in interpreting the evidence. 

 7 That's part -- both of those things are standard jury 

 8 instructions. Base the evidence totally on the 

 9 testimony of the witnesses, the exhibits, the direct 

 10 evidence that is produced during the trial and then 

 11 draw inferences that are reasonable in light of your 

 12 daily experience and your common sense. Use both, in 

 13 other words, direct evidence and circumstantial 

 14 evidence. 

 15 When it comes to an issue of intent or a 

 16 scienter, generally -- almost always that has to be 

 17 based largely on circumstantial evidence so it seems 

 18 to, by definition, require making inferences -- 

 19 inferences that are based on the evidence and that are 

 20 reasonable in light of daily experience and common 

 21 sense. 

 22 MR. BIAGETTI: Of course. 

 23 THE COURT: So certainly I wouldn't 

 24 substitute my own ideas for evidence, but I think that 

 25 I have to use common sense in trying to interpret the 

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 1 evidence. 

 2 MR. BIAGETTI: Of course, and inferences 

 3 based on facts proven by a preponderance. Let me give 

 4 one example. This small but frankly pivotal -- 

 5 especially after hearing the government's closing -- 

 6 evidence about whether GE sent its man to haul -- can 

 7 we put up the excerpt from the Fletcher letter? You 

 8 remember this one, Judge. Some trucker, who you 

 9 evidently called, has been hauling to us, and our 

 10 office has been paying him $150 per load. An 

 11 important fact in the case -- an important piece of 

 12 evidence because the government says it was after this 

 13 that GE started sending it everything under God's 

 14 green earth. Mr. Fletcher says though -- first of 

 15 all, you would have to take that statement for the 

 16 truth that it happened, but it's defied by the record. 

 17 The proven facts -- 

 18 THE COURT: Give me the whole exhibit because 

 19 I didn't gather that until they put up the exhibit. 

 20 What the government says is that there's a reference 

 21 earlier on in that letter that makes clear that what 

 22 Fletcher was saying is, first, I sent my own people. 

 23 Then I had a contractor of mine who went out of 

 24 business. Then you found a contractor and the 

 25 reference to "your man" is the reference to the 

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 1 contractor that GE supplied. So that they are not 

 2 saying that it was a GE truck. They're saying it was 

 3 a private contractor that had been found by GE and 

 4 that that's how to interpret the letter. 

 5 MR. BIAGETTI: Yes, they are. 

 6 THE COURT: You said that's wrong. The 

 7 letter can't be interpreted that way. 

 8 MR. BIAGETTI: Not only is that wrong, 

 9 there's no evidence to support it. 

 10 THE COURT: What's the exhibit number? 

 11 MR. BIAGETTI: The exhibit is 15. 

 12 THE COURT: All right. I'll have my clerk 

 13 hand me up the actual physical copy. It may be in a 

 14 pile over here, Vinny. I don't know. Let me take a 

 15 moment and reread it. Okay. So the government 

 16 contends that the phrase "your man" in Exhibit 15 

 17 refers to a contract trucker hired by -- or found by 

 18 GE but paid for by Fletcher. You say that that's not 

 19 true, and make your argument. 

 20 MR. BIAGETTI: Defied by the record evidence. 

 21 Hooper, at page 41, recalled that only he and an 

 22 independent trucker hired by Fletcher named Ross made 

 23 any such deliveries. Whitney recalled that only 

 24 Hooper -- at page 48, Whitney recalled that only 

 25 Hooper and an independent trucker named Madsen hired 

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 1 by Fletcher made any -- 

 2 THE COURT: That's kind of a fine 

 3 distinction. In the letter it's clear that Fletcher 

 4 paid for all of the truckers, whether they were found 

 5 by GE or not. So an employee well understood the 

 6 trucker to be hired by Fletcher. He just wasn't found 

 7 by Fletcher. That's what the "your man" reference is. 

 8 Why does it even matter? The important thing is 

 9 somebody other than a Fletcher employee was up there, 

 10 and during that time they were loading bad barrels on 

 11 the truck. 

 12 MR. BIAGETTI: And there's no evidence, 

 13 Judge. That, respectfully, is a leap. There's no 

 14 evidence that the testing stopped simply because a 

 15 load or two was picked up by somebody like Madsen or 

 16 by Ross. There's no testimony to that effect. Mr. 

 17 Hooper -- 

 18 THE COURT: Where's the evidence that there 

 19 was testing of any drum that was taken by any contract 

 20 hauler? The only evidence I heard of hydrometer 

 21 testing was by Fletcher employees. 

 22 MR. BIAGETTI: Hooper says that he and the 

 23 crew did the testing at GE, and then that some was 

 24 done back at Fletcher. There's no evidence that 

 25 Hooper -- 

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 1 THE COURT: Yeah, but there's no evidence to 

 2 suggest that at any point while a contract trucker was 

 3 used that hydrometer testing was done at the GE dock 

 4 before they were loaded onto the trucks, and Hooper 

 5 says that it wasn't done and that's why they have 

 6 the -- excuse me -- Fletcher says in his letter that 

 7 it wasn't done and that's why I got garbage Pyranol. 

 8 So there's no evidence to suggest that that's wrong. 

 9 MR. BIAGETTI: There are 17 shipments, Judge, 

 10 during that time period where Fletcher claims he's 

 11 paying $150 a load now, in this letter, to haul to his 

 12 factory. If you look at the dunning letter that is 

 13 Exhibit 13, 17 pick-ups are made during this time 

 14 period, Judge, 70 drums per pick up, and we are 

 15 supposed to believe that Fletcher paid 150 bucks for 

 16 every one of those bad loads, accepted every one of 

 17 those bad loads and never made a peep about their 

 18 quality until -- not coincidentally -- after he is 

 19 dunned for payment a couple weeks before this letter 

 20 by Mr. Clark. That's the evidence. 

 21 THE COURT: All right. That's a different 

 22 point. You want me to say that this letter is -- that 

 23 Fletcher is making this up to avoid having to pay, 

 24 right? That's your interpretation of this. That 

 25 there really wasn't a problem with any of the loads. 

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 1 It only comes up after Fletcher is asked to pay and he 

 2 doesn't want to pay. All right. I understand that. 

 3 The problem with that is that the testing 

 4 that was done of a similar kind of Pyranol at the 

 5 scrap Pyranol facility by -- at GE's direction by 

 6 Monsanto corroborated the claim that a lot of the 

 7 Pyranol was junk, and your witness so acknowledged in 

 8 the letter to Mr. Clark. 

 9 That's some evidence to actually support the 

 10 idea that this stuff was -- a lot of it was of 

 11 unacceptable quality, isn't it? 

 12 MR. BIAGETTI: The Pyranol that was tested by 

 13 Monsanto was Pyranol that Fletcher had not selected to 

 14 take back to Fletcher. We know that. It was at GE -- 

 15 THE COURT: I don't know that because the 

 16 evidence is that no selecting was going on at that 

 17 time. So this was not rejected Pyranol by Fletcher, 

 18 and indeed, why would GE, in trying to determine 

 19 whether they should press Fletcher for payment, test 

 20 barrels that he rejected? The most logical inference 

 21 is they tested representative, sample barrels because 

 22 that's what they're trying to do, confirm or refute 

 23 the contention that the barrels Fletcher got were 

 24 junk. If they were testing barrels that Fletcher 

 25 rejected, they wouldn't be confirming or refuting the 

Case 1:06-cv-00354-PB Document 107 Filed 02/10/09 Page 78 of 158
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 1 claim that Fletcher was making. It was only if they 

 2 took representative samples that would allow them to 

 3 confirm or refute. 

 4 How does saying we tested barrels that 

 5 Fletcher rejected, and it turned out they were 

 6 correctly rejected. Therefore, we can infer that 

 7 Fletcher's claim that he got a lot of junk from us is 

 8 valid. That doesn't make any logical sense. 

 9 MR. BIAGETTI: There's no evidence, your 

 10 Honor, that the testing at GE that Mr. Varnum had 

 11 required ever stopped. We have evidence that Mr. 

 12 Varnum retired. There is not a wit of evidence that 

 13 any of the testing that Mr. Varnum had required ever 

 14 stopped. 

 15 THE COURT: I don't believe there's any 

 16 evidence that Mr. Varnum ever required testing. The 

 17 evidence is that Fletcher required testing in order to 

 18 address a problem that Varnum created when, as Hooper 

 19 testified, he would require Fletcher to pay for every 

 20 drum that was taken, and Fletcher then concluded we 

 21 have to test drums before we take it. Varnum won't 

 22 make allowances like Metevier had in the past. 

 23 There's no evidence that Varnum ever required that 

 24 testing be done. 

 25 MR. BIAGETTI: I take your point. There's no 

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 1 evidence of the circumstances created during the 

 2 Varnum years changed after that. None. 

 3 THE COURT: I would like to see some evidence 

 4 that there was any testing done of any Pyranol shipped 

 5 by a private contractor because there's no evidence in 

 6 the record that it was ever done. 

 7 MR. BIAGETTI: Then we get back to the 

 8 preponderance, Judge. At worst that evidence is in 

 9 equipoise. You cannot draw an inference that no 

 10 testing was done after Varnum was hired. 

 11 THE COURT: He asserts that no testing was 

 12 done because he says, I got a lot of junk that I 

 13 wasn't getting when I was doing testing. 

 14 MR. BIAGETTI: And his own employee who 

 15 picked up all of this stuff, Hooper, says that the 

 16 quality never changed throughout this time, and Clark 

 17 says that he never got a complaint from Fletcher until 

 18 Clark -- 

 19 THE COURT: That second point I think is 

 20 something I need to consider. I understand that 

 21 argument, and I think it's a valid argument. 

 22 MR. BIAGETTI: And he accepted 17 pick-ups 

 23 during this time, 70 drums each, a savvy businessman, 

 24 and never makes a peep. Instead, he pays 150 bucks a 

 25 load for what he claims is junk. It makes no sense, 

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 1 respectfully. 

 2 THE COURT: If he's getting it for free, 150 

 3 bucks is great. If he can get a couple of barrels of 

 4 good Pyranol, even if he's got a bunch of bad barrels, 

 5 but if he has to start paying for every barrel, then 

 6 it becomes a problem. 

 7 MR. BIAGETTI: And of course the evidence in 

 8 the case is that every single one of these barrels -- 

 9 even if you believe that the Monsanto analysis of 

 10 drums back at GE is reflective of what Mr. Fletcher 

 11 got, we have the expert testimony unrebutted of 

 12 Girard. 

 13 In fact, Mr. Portfolio, the United States' 

 14 expert, agrees that even Pyranol contaminated with up 

 15 to 22 percent of TCE, precisely what's described by 

 16 the Monsanto analysis, is usable for the purpose that 

 17 Fletcher was selling it, as an extender and roof 

 18 coating. It is useful for that purpose -- 

 19 THE COURT: What evidence is there on the 

 20 record that GE understood that Fletcher was selling 

 21 this as an extender and roof coating? 

 22 MR. BIAGETTI: There is none that he 

 23 understood it was being done for that, but when you 

 24 get to the government's point about the inevitable 

 25 came to pass, there's no evidence that discard or 

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 1 uselessness ever came to pass. All of the evidence is 

 2 to the contrary. 

 3 THE COURT: There's one damning piece of 

 4 evidence of intent, and that's Mr. Abbe's own 

 5 statement that, we hoped he could use some of it and 

 6 thought he would dispose of the rest. That's pretty 

 7 damning to you, isn't it? 

 8 MR. BIAGETTI: That's not the Abbe testimony, 

 9 respectfully. 

 10 THE COURT: Well, let's get out the actual 

 11 quote. I've read it, and maybe I wrote it down 

 12 incorrectly, but put it up there. 

 13 MR. BIAGETTI: The balance of it he could 

 14 dispose of -- Abbe 77 -- he could dispose of. She 

 15 then asks him -- she tries to refresh him three times 

 16 on what he knew on the subject, Judge, and he says at 

 17 page 54, "The only thing I knew he was doing with it 

 18 was adding it to paint." That's what Mr. Abbe tells 

 19 the government agent back in 1992 in Exhibit 80, 

 20 Judge. He says, "The only thing I knew was that he 

 21 had a use for it." 

 22 On page 56, "The only thing I knew for sure 

 23 was that they were adding it to paint." On page 93, 

 24 "Do you remember learning from anybody from GE or 

 25 Fletcher that Fletcher was disposing of some 

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 1 quantity?" Answer: "No." 

 2 Now, when you challenge the government on 

 3 what evidence there was that GE knew that Fletcher was 

 4 using it for something else, and Ms. Fiske pointed to 

 5 Richard Fletcher. He was using it on dust. Richard 

 6 Fletcher, at page 64, says that Fletcher was using 

 7 Aroclor on dust. He never says he was using 

 8 Pyranol -- 

 9 THE COURT: He wasn't using Aroclor. That's 

 10 the most implausible, silly argument I've ever heard. 

 11 He's going to buy Aroclor at $3 a gallon to use as a 

 12 dust suppressant when he's got thousands of barrels of 

 13 Pyranol? That just strains -- I mean that doesn't 

 14 pass the straight face test. 

 15 MR. BIAGETTI: It's the only evidence of any 

 16 knowledge of any other use -- 

 17 THE COURT: I think the argument you should 

 18 be making, which is a much more potent argument, is 

 19 that this whole issue of dust suppressant is a red 

 20 herring because there's no evidence that anyone in GE 

 21 ever knew that Fletcher was ever using it as a dust 

 22 suppressant, but to say that Fletcher was using 

 23 Aroclor as a dust suppressant when he was drowning in 

 24 contaminated Pyranol is absurd. 

 25 MR. BIAGETTI: Judge, we made it clear in the 

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 1 opening. We showed you a graph and we proved that GE 

 2 only knew that Fletcher made paint, and he added 

 3 plasticizer to paint. 

 4 THE COURT: There's no evidence to suggest 

 5 that GE knew that Fletcher was using this as a dust 

 6 suppressant. 

 7 MR. BIAGETTI: None. It's simply an 

 8 illustration -- and I will move on -- that you have to 

 9 look at the evidence and decide whether or not 

 10 inferences may be drawn from it. 

 11 THE COURT: Your example you give is a good 

 12 one in which a judge cannot throw common sense out the 

 13 window, okay? People -- he was referring to Aroclor 

 14 as the generic name for the scrap Aroclor he was 

 15 getting from whatever sources, which includes Sprague 

 16 and other places. 

 17 MR. BIAGETTI: Thank you. 

 18 THE COURT: He wasn't using it to refer to 

 19 Aroclor that was bought from Monsanto at $3 a gallon 

 20 because you don't pour money down the drain when you 

 21 don't need to. That's common sense. Do I have direct 

 22 evidence? Is there a witness who said, no, we didn't 

 23 use Aroclor from Monsanto as a dust suppressant? I 

 24 don't need to have somebody testify that, you know, 

 25 when he's talking about Aroclor, he's talking about 

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 1 scrap Aroclor, which includes Pyranol. It isn't 

 2 virgin Aroclor because it's -- I'm entitled to use 

 3 common sense and say, people don't behave 

 4 irrationally. You have free Pyranol you've already 

 5 got -- whatever you paid for you've got there. You're 

 6 going to go to the store and buy $3 a gallon Aroclor 

 7 to pour on the ground? No. That's an example of how 

 8 a judge can use common sense to understand the 

 9 evidence. That's not substituting my own theories for 

 10 facts. That's using common sense. 

 11 MR. BIAGETTI: I understand, and you made the 

 12 point, your Honor, that the evidence showed that Mr. 

 13 Fletcher was also buying used Aroclor from Sprague and 

 14 Aerovox so that could have been what was going on, as 

 15 well. 

 16 THE COURT: That's correct. 

 17 MR. BIAGETTI: The point is the evidence, if 

 18 it's in equipoise, the fact is not proven. If the 

 19 fact is not proven, then an inference may not be drawn 

 20 reasonably from it. 

 21 On a bigger issue -- and I think your Honor 

 22 recognized this in the comments before Ms. Fiske that 

 23 we had -- you must find that GE knew or must have 

 24 known of an event that did not, in fact, occur; 

 25 namely, a disposal, a discarding by Fletcher. 

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 1 THE COURT: Wait. I think we're on a 

 2 completely different understanding. What the 

 3 government has to prove is otherwise arranged for 

 4 disposal. The government doesn't have to prove 

 5 disposal to prove they otherwise arranged for 

 6 disposal. So to the extent you're suggesting that 

 7 disposal never happened, the government can't prove 

 8 that disposal ever happened. Therefore, it cannot 

 9 prove that GE otherwise arranged for disposal. No, 

 10 that does not logically follow from the other. 

 11 In fact, you don't have to prove a disposal 

 12 to prove that GE arranged for disposal. To ultimately 

 13 prove liability here, you have to establish that, but 

 14 you've conceded that part of it and that part is not 

 15 an issue in this case. So I don't buy the proposition 

 16 that you win unless the government has proved here 

 17 more likely than not that there was a disposal of 

 18 scrap Pyranol at the Fletcher paint work site. 

 19 MR. BIAGETTI: Whether or not there was, in 

 20 fact, a disposal by Fletcher is probative of what GE 

 21 knew. 

 22 THE COURT: It is probative. It is not 

 23 conclusive. I said that earlier. 

 24 MR. BIAGETTI: We agreed but that is another 

 25 inference that will have to be drawn here. There is 

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 1 nothing inevitable about discard of what Fletcher had 

 2 because the experts agree -- can we put up that 

 3 graphic -- the experts agree that all of the Pyranol 

 4 that was sold, to the extent we have evidence of 

 5 descriptions of it, was usable for the purposes to 

 6 which Fletcher and Webster were putting it, and we 

 7 point out that even up to 22 percent PCB, what the 

 8 Monsanto folks report that they found in the drums 

 9 back at GE, would not have presented a problem in the 

 10 roof coating, as PCB and TCE are good solvents for 

 11 asphalt and both faster drying than mineral spirits. 

 12 We have the testimony of Mr. Hooper that they 

 13 would add -- 

 14 THE COURT: I think the roof coating is 

 15 another complete red herring. There's no evidence 

 16 that GE knew about this potential use as an extender. 

 17 There's no evidence that it was understood in the 

 18 market that Aroclor was, in fact, used this way. 

 19 There's no evidence that Fletcher ever told anybody it 

 20 was being used in this way. So to suggest that it is 

 21 theoretically possible that it could be used for an 

 22 extender says nothing of value in the case. 

 23 MR. BIAGETTI: I respectfully disagree. 

 24 First of all, we just agreed that whether or not 

 25 Fletcher discarded is probative of whether or not GE 

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 1 knew that. It is probative that Fletcher never 

 2 discarded because he had a customer who was buying all 

 3 the thin stuff. You have the testimony of Mr. Hooper, 

 4 for example, your Honor, who said that they 

 5 deliberately -- 

 6 THE COURT: Hooper never testified that he 

 7 bought all of the scrap Pyranol on the Fletcher site, 

 8 thousands of barrels, they bought it all and used it 

 9 as extender. That's fantasy land. There's no 

 10 evidence of that. 

 11 MR. BIAGETTI: Hooper's testimony is that 

 12 Webster received a lot of the thin stuff. A lot. 

 13 That Kamieniki took a lot of what was left, even after 

 14 1968, and that of course everything else was either 

 15 usable by Fletcher as plasticizer or he sold it to 

 16 several customers. That was Hooper's testimony. The 

 17 good stuff -- 

 18 THE COURT: I think there was evidence to 

 19 suggest that it may have been sold to multiple 

 20 customers early on and there was -- there was evidence 

 21 to suggest that some -- certainly not all -- was sold 

 22 to the predecessor, to Webtex, but that vast 

 23 quantities, the vast bulk of it, remained on the site 

 24 well past the days when Fletcher was operating it as a 

 25 viable paint business. The evidence seems almost 

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 1 undisputed on that point. 

 2 MR. BIAGETTI: There's no evidence that it 

 3 was vast quantities, but to whatever extent -- 

 4 THE COURT: You stipulated that there were 

 5 over 3,000 barrels of Pyranol taken to the site from 

 6 GE. You stipulated to that. You stipulated to an 

 7 amount of Pyranol that produces at least 3,500 barrels 

 8 more than that -- I'm using a very conservative 

 9 number -- stipulated to that. So the idea that there 

 10 isn't evidence that there were vast quantities brought 

 11 to the site is silly. There clearly were. 

 12 MR. BIAGETTI: I misheard you, Judge. Those 

 13 quantities were brought to the site. I thought you 

 14 meant there was evidence that those sat at the site. 

 15 THE COURT: And most of the scrap Aroclor 

 16 that was purchased came from GE, not from the other 

 17 sources. And there were thousands of barrels at the 

 18 site well past the 1970s when there were no further 

 19 operations. We saw pictures of it. Now, some of 

 20 those could have been other things other than Pyranol, 

 21 but the witness testified that was in the area where 

 22 he knew Pyranol was stored because he worked there. 

 23 MR. BIAGETTI: And the same witness said that 

 24 was the area where they piled Aroclor that came from 

 25 Aerovox. 

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 1 THE COURT: But the bulk of it came from GE. 

 2 MR. BIAGETTI: And was stored along with 

 3 Aroclor from Sprague and Aerovox, resins, oils, 

 4 linseed oil, paint, other products that Fletcher was 

 5 buying. There was not one witness -- Racicot, Hooper, 

 6 Whitney -- who was able to say that he could identify 

 7 any marks of any kind on any of those drums after '68 

 8 to identify them as GE's. I mention that there's no 

 9 chemical evidence that even establishes that there 

 10 were PCBs in any of those drums, let alone that they 

 11 were scrap Pyranol, let alone that it was GE's. No 

 12 evidence of that. The evidence is -- 

 13 THE COURT: Not because they were tested and 

 14 found not to contain that, right? Because the barrels 

 15 were all removed before there was testing, right? So 

 16 let's be careful we don't create confusion about the 

 17 reality. Nobody tested the barrels and found them not 

 18 to be PCBs. The barrels were removed, right, so 

 19 nobody could test them? 

 20 MR. BIAGETTI: The barrels were removed by 

 21 EPA. 

 22 THE COURT: EPA removed the barrels? You 

 23 never tested the barrels? 

 24 MS. FISKE: Your Honor, Mr. Kamieniki removed 

 25 many of the barrels in 1983 after TSCA had been 

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 91 

 1 passed. And then in addition, EPA tested the drums 

 2 that were remaining and removed them. 

 3 THE COURT: And none of those were PCB. 

 4 MS. FISKE: Some of those did contain PCB. 

 5 THE COURT: Well, then what's he saying when 

 6 they didn't? Because that's not the phase of the 

 7 trial we're involved with. That's not what's being 

 8 proved today, but don't tell me that there's no 

 9 evidence that any of the drums contained PCBs if they 

 10 were sampled and shown to contain PCBs. 

 11 MR. BIAGETTI: I said there was no evidence 

 12 in the record of this case, your Honor. 

 13 THE COURT: That's really bad, counsel. 

 14 Don't do that to me. 

 15 MR. BIAGETTI: But here is the more important 

 16 point -- 

 17 THE COURT: That's way too tricky. Do not 

 18 mislead courts. That's not a good thing. 

 19 MR. BIAGETTI: I'm not trying to mislead you, 

 20 Judge. I'm trying to make the point that none of 

 21 those witnesses -- Racicot, Hooper, Whitney -- 

 22 identified any of the barrels as GE's barrels, okay? 

 23 THE COURT: I accept that. 

 24 MR. BIAGETTI: Okay, but more importantly, we 

 25 know that Fletcher, after February of 1968, did not 

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 1 discard a single one of these barrels. He stored them 

 2 on pallets. He cared for them. Mr. Whitney said we 

 3 would even go into the pile to check for leakers and 

 4 fix them. He sold some to -- 

 5 THE COURT: I saw the picture of the barrels 

 6 turned on their side and stacked four and five deep by 

 7 the hundreds. I saw the picture. We were able to 

 8 date the picture based on the age of the kids that 

 9 were there. The guy that took the picture, it was 

 10 from his yard looking at the piles of barrels that he 

 11 testified to he was involved in putting there, which 

 12 included the Pyranol. 

 13 MR. BIAGETTI: Judge, not a single barrel 

 14 discarded. There's no argument that there was a 

 15 release here. That's why we're here. I'm not trying 

 16 to be tricky, respectfully. There was a release. 

 17 There was not discarding or disposal by Fletcher. 

 18 There was quite the opposite. Even in 1974 when he 

 19 tries to sell it through Hub Fabric, the letter from 

 20 Hub says he's trying to sell it because of the current 

 21 plasticizer shortage. He valued this product as a 

 22 plasticizer substitute. He cared for it in that way. 

 23 He tried to sell it in that way. There is no 

 24 evidence, your Honor, that he tried to discard a drop 

 25 of it. 

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 1 THE COURT: Your client is a sophisticated 

 2 company, right? 

 3 MR. BIAGETTI: Yes, sir. 

 4 THE COURT: They're in the business to make a 

 5 profit, right? 

 6 MR. BIAGETTI: Of course. 

 7 THE COURT: They understand chemicals, right? 

 8 They had a paint business, didn't they? 

 9 MR. BIAGETTI: In another part of the 

 10 country. 

 11 THE COURT: Okay. If the Aroclor that this 

 12 product, in your view, is a complete substitute for 

 13 sold for $3 a gallon, right? The answer is yes 

 14 because you stipulated that or it's in the record. 

 15 MR. BIAGETTI: Yes. Stipulated. 

 16 THE COURT: GE paid or received from 

 17 Fletcher, for the stuff he paid for, four cents a 

 18 gallon. That's a little less than 1/100th the cost, 

 19 okay. If this was a valuable substitute for Aroclor, 

 20 would a sophisticated company like GE let it get out 

 21 of its hands for 1/100th of the cost of Aroclor? 

 22 MR. BIAGETTI: Yes. There are several -- 

 23 because there are several leaps there in terms of what 

 24 was actually happening from '53 to '68. First of all, 

 25 you have men in a capacitor department in upstate New 

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 1 York. They have a product that is of no further use 

 2 to them for their very demanding purposes. They find 

 3 a way -- Abbe called it wonderful, exceptional -- to 

 4 make a profit on the sale of this stuff. Why? 

 5 Because the customer was going to use it. 

 6 THE COURT: I'm not buying your expert's 

 7 theory that this is in its form, right out of the 

 8 barrel, could be brought to a paint company and pumped 

 9 into batches of paint as a plasticizer and be used as 

 10 an Aroclor substitute. 

 11 MR. BIAGETTI: Of course that's exactly what 

 12 Hooper says happened to the '53 batch. 

 13 THE COURT: Let's assume that's true. Your 

 14 company -- we have to look at what does your company 

 15 do with its scrap Pyranol. We know it dumps it into 

 16 the river. We know it landfills it. We know it gives 

 17 it away for free to local towns to use on roads, and 

 18 we know he sells it to Fletcher. All of the uses 

 19 except selling to Fletcher are disposals for which GE 

 20 can earn nothing and for some of which it has to pay. 

 21 What it gives to Fletcher it gives at 1/100th the cost 

 22 of virgin Aroclor. If I accept your expert's 

 23 interpretation as you describe it, that scrap Pyranol 

 24 can simply be mixed in with batches of paint and serve 

 25 as an effective substitute for Aroclor, I must assume 

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 1 that GE is one of the least rational, least 

 2 sophisticated companies in the world because they're 

 3 just throwing away what they can sell to the paint 

 4 industry for many, many, many multiples of what it's 

 5 selling it to Fletcher, and of course compared to what 

 6 it gives it away for when it dumps it in the river or 

 7 pays somebody to haul it away for when it landfills 

 8 it, it just doesn't make any sense. 

 9 MR. BIAGETTI: Now, you are, Judge, 

 10 respectfully, superimposing the 2008 -- 

 11 THE COURT: That's baloney, okay. That is 

 12 complete baloney, and I can tell you the Court of 

 13 Appeals will not agree with you on that point. I 

 14 guarantee that 100 percent. That's what fact finding 

 15 is. To suggest that that is substituting my own views 

 16 is absurd. 

 17 MR. BIAGETTI: Two men in upstate New York in 

 18 1953 -- 

 19 THE COURT: That's fact finding. That is 

 20 exactly what juries do every day in the United States. 

 21 They take facts. What did Fletcher pay for it? They 

 22 take facts. What did GE do with it? They take facts. 

 23 What was the price of Aroclor? And they test it 

 24 against the reasonableness of an expert's testimony 

 25 that this could be used as an Aroclor substitute and 

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 1 that it was used widely as an Aroclor substitute, and 

 2 it says the facts don't support that claim. That's 

 3 why that expert's claim is not credible, to the extent 

 4 he says something that extreme. 

 5 MR. BIAGETTI: Your Honor, when GE finds in 

 6 upstate New York a customer, Fletcher, okay, they are 

 7 told that he's going to be using it in paint. Those 

 8 folks in 1953 in upstate New York are not part of GE's 

 9 paint business. They don't know what the conglomerate 

 10 GE is doing in another part of the country. All they 

 11 see is a tremendous opportunity to make -- to solve 

 12 two problems. 

 13 THE COURT: So they don't know that there is 

 14 any market for -- you're telling me -- any market for 

 15 scrap Pyranol for use as a plasticizer anywhere in the 

 16 world except at Fletcher Paint because you're telling 

 17 me they have no knowledge of the market of paints for 

 18 plasticizer. So if I accept that. I must accept the 

 19 proposition that the only potential use that they 

 20 could foresee of this was as a use by Fletcher in his 

 21 small little paint business of paint as a plasticizer. 

 22 MR. BIAGETTI: That is the state of evidence, 

 23 yes. 

 24 THE COURT: Okay. If that is true, then we 

 25 know they think Fletcher is a small paint manufacturer 

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 1 that is using a plasticizer, which is a minor 

 2 ingredient in a certain subset of paints, and to the 

 3 tune of 3,500 barrels of Pyranol is using that in his 

 4 little paint business. 

 5 MR. BIAGETTI: He keeps coming back for more. 

 6 Yes, your Honor. He keeps coming back for more. 

 7 Now, both Clark and Abbe testified that they 

 8 had no idea how much plasticizer went into paint or 

 9 whether or not Fletcher made other paints. We know 

 10 from the Fletcher witnesses that he made roof coating, 

 11 that the pool paint was the same formula card as the 

 12 rubber based paint so it could well have been used in 

 13 that; and of course we know that Fletcher is also 

 14 selling it to Webster. Why is that important, even if 

 15 GE doesn't know it? Because it puts into context what 

 16 GE was hearing from Fletcher at the time. An 

 17 important piece of evidence, Judge, that the United 

 18 States has seized on that I would ask you to take 

 19 another close look at, is Hooper at 31. This is when 

 20 he's talking about the Metevier deal, such as it is. 

 21 It's a piece of evidence that the government comes 

 22 back to again and again. Now, for circumstantial 

 23 knowledge of what GE knew. And what Hooper says is -- 

 24 when he's talking about Metevier -- well, he said that 

 25 he understood that we were getting drums that were not 

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 1 Pyranol or were so thinned out that it was not usable. 

 2 Well, first of all, Metevier understood that, 

 3 from whom? From Fletcher, of course, and Fletcher is 

 4 telling a half truth there. Fletcher is saying it's 

 5 of no use but he's not -- 

 6 THE COURT: Wait a second. Are you trying to 

 7 display something for me? 

 8 MR. BIAGETTI: No. I was just reading to you 

 9 from Hooper 31. 

 10 THE COURT: Okay. I just wanted to be sure I 

 11 wasn't missing something. 

 12 MR. BIAGETTI: No. Hooper 31. He understood 

 13 that we were getting drums that were not Pyranol or 

 14 were so thinned out that it was not usable. Fletcher 

 15 is telling this to Metevier. Fletcher is saying it's 

 16 not usable. It wasn't usable to Fletcher. It was too 

 17 thin for the use as a plasticizer, but he, of course, 

 18 is selling all of it at a cheaper price to Webster. 

 19 He's telling Metevier something to, frankly, play him 

 20 in the same way that he does with Mr. Clark years 

 21 later. He buys all of the Pyranol. 

 22 We have a stipulation in this case, Judge, 

 23 that what Fletcher could not use, Fletcher attempted 

 24 to sell to other customers. He had a useful purpose 

 25 for every drop of this Pyranol. 

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 1 THE COURT: Let's focus for a while on what 

 2 was actually in the drums. I have a witness who 

 3 testified that it was used -- that Pyranol was used as 

 4 a -- he called it pump oil. Do you agree with that? 

 5 MR. BIAGETTI: Yes. I believe that that was 

 6 Mr. Huchro on the fact that oil could get in 

 7 occasionally with some of the -- 

 8 THE COURT: Also, Flexon said it about 

 9 booster pumps as diffusion pump oil. 

 10 MR. BIAGETTI: Yes. 

 11 THE COURT: That it was used to infuse 

 12 capacitors. We know that, right? 

 13 MR. BIAGETTI: Yes. 

 14 THE COURT: That Aroclor was treated at GE to 

 15 make Pyranol, right? 

 16 MR. BIAGETTI: Aroclor was treated at GE. 

 17 THE COURT: To make Pyranol. 

 18 MR. BIAGETTI: Yes. 

 19 THE COURT: Both filtered and had 

 20 additives to it. 

 21 MR. BIAGETTI: They made a higher standard of 

 22 purity than Monsanto. 

 23 THE COURT: Well, it had additives to it, and 

 24 depending on the type of Pyranol, the additive could 

 25 constitute in excess of 25 percent by volume of the 

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 1 whole product, right? 

 2 MR. BIAGETTI: Correct. 

 3 THE COURT: So at various times, particularly 

 4 Pyranol 2, there were substantial additives put into 

 5 the Aroclor by GE. 

 6 MR. BIAGETTI: Which had no effect on the 

 7 purposes for which Fletcher used it, but yes. 

 8 THE COURT: For which GE used -- we can talk 

 9 about Fletcher later on -- we know that there would be 

 10 mineral oil on these capacitors, right? 

 11 MR. BIAGETTI: Yes. 

 12 THE COURT: We know that there were drip pans 

 13 to collect drippings of Pyranol as it was coming off 

 14 the capacitors that would sit for several days before 

 15 they were emptied, right? 

 16 MR. BIAGETTI: Yes. 

 17 THE COURT: We know there were troughs in the 

 18 floor that collected Pyranol, right? 

 19 MR. BIAGETTI: Yes. 

 20 THE COURT: We know TCE was applied as a 

 21 degreaser to degrease the capacitors? 

 22 MR. BIAGETTI: Yes. 

 23 THE COURT: We know TCE and Pyranol would mix 

 24 together and collect in these various repositories. 

 25 One time they called it a pit. Sometimes they called 

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 1 it a trough. Sometimes they called it a drip pan, 

 2 right? You're nodding your head. And they also would 

 3 use -- they would try to reclaim some of the TCE in a 

 4 still that they would have to periodically clean out 

 5 and empty the bottom of these stills that would have 

 6 the residue of Pyranol, mineral oil, metals, other 

 7 matters that would not be distilled out when the TCE 

 8 was distilled out, right? 

 9 MR. BIAGETTI: Yes. 

 10 THE COURT: That when you use Pyranol as a 

 11 pump oil, pumps break, pumps need to be cleaned, pumps 

 12 have other kinds of contaminants in them so we know 

 13 that that Pyranol would have that. We know that the 

 14 Pyranol that would be drained out of a defective 

 15 capacitor would be collected, and that that would 

 16 contain metals and other substances. We know that 

 17 Pyranol would be spilled. Sometimes it would be 

 18 cleaned with Speedy Clean. The Speedy Clean would 

 19 be -- the liquid would be put into a scrap Pyranol 

 20 barrel and the Speedy Clean would be put into another 

 21 barrel, right? 

 22 MR. BIAGETTI: Yes. 

 23 THE COURT: Okay. So what we've got is -- we 

 24 also know there would be certain batches of this that 

 25 could not be brought up to spec. That they would try 

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 1 their best when they were making the Pyranol from the 

 2 Aroclor and they couldn't get it up to spec so they 

 3 would dump the whole batch. 

 4 MR. BIAGETTI: Right. 

 5 THE COURT: There was a scrap Pyranol tank in 

 6 which quantities of scrap Pyranol were accumulated for 

 7 significant periods, and when full it would be drained 

 8 into 55 gallon drums, right? 

 9 MR. BIAGETTI: 500 to a thousand gallon tank, 

 10 yes. 

 11 THE COURT: Okay, and that would contain 

 12 mixtures of Pyranol from wherever the scrap Pyranol 

 13 would be collected, and that would be drained into 55 

 14 gallon drums. We also know that there would be scrap 

 15 Pyranol placed directly into 55 gallon drums, and so 

 16 the scrap Pyranol that was being sold to Fletcher's 

 17 was Pyranol from all of these sources, right? 

 18 MR. BIAGETTI: It could have been, yes. 

 19 We're going to talk about what was actually picked up 

 20 at Fletcher in a minute, but go ahead. 

 21 THE COURT: That's what we know about where 

 22 it came from. 

 23 MR. BIAGETTI: What it could have contained, 

 24 yes. 

 25 THE COURT: What we know from Hooper and from 

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 1 Fletcher's letter and from Monsanto's testing of the 

 2 barrels is that, in fact, they varied greatly in terms 

 3 of what was in them, and substantial amounts of TCE 

 4 would be in the barrels. Water would be in the 

 5 barrels. Dirt would be in the barrels. Pyranol would 

 6 be of different color and different thicknesses from 

 7 barrel to barrel. We all know that, right? Do you 

 8 disagree with that? 

 9 MR. BIAGETTI: Do not disagree. 

 10 THE COURT: That's what we know about what 

 11 was in the barrels, right? 

 12 MR. BIAGETTI: That's what we know could be 

 13 in the barrels as they were created at GE, and if I 

 14 may for the moment -- if we could talk about the state 

 15 of the evidence about what Fletcher picked up? 

 16 THE COURT: Okay. 

 17 MR. BIAGETTI: Just one more point on the 

 18 Fletcher matter, of course. He says that prior to 

 19 this period of hauling by someone that Metevier was 

 20 very careful to make sure that Fletcher received what 

 21 he called the right material. So through the Metevier 

 22 years from Fletcher's mouth we have -- 

 23 THE COURT: What I'm getting is that you 

 24 divided into several periods. The first period GE 

 25 just delivered stuff. The second period Fletcher 

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 1 picked it up from Metevier. It varied greatly in 

 2 quality. When he got a lot of bad barrels, he called 

 3 Metevier. Metevier would make an adjustment and give 

 4 him extra barrels for free. Then there was a period 

 5 of Varnum. Varnum required him to pay for every 

 6 barrel that went off the site. So after a while he 

 7 went into hydrometer testing for specific gravity to 

 8 take the barrels that he wanted. That doesn't mean 

 9 that everything would be usable from it, but he would 

 10 take the barrels he wanted and leave behind the ones 

 11 that he would not. Then there was the post-Varnum 

 12 period where, as I understand it, Fletcher used 

 13 contract haulers to haul scrap Pyranol from GE and 

 14 that these amounted to over a thousand barrels that 

 15 came during this period and that Fletcher did not pay 

 16 for these barrels at all, was hounded about payment, 

 17 responded by saying the barrels contain a lot of junk 

 18 barrels, garbage, that I don't want and can't use, 

 19 that GE had some testing done by Monsanto of a 

 20 representative sample of drums from the scrap Pyranol 

 21 area, which GE concluded corroborated Fletcher's 

 22 explanation. And that all of that, therefore, 

 23 suggests that there were, throughout this period, a 

 24 large number of barrels, in the thousands, that were 

 25 of varying quality. Many of which were not of 

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 1 acceptable quality to be used even for the uses that 

 2 Fletcher was trying to put it to. That's what I'm 

 3 taking from the evidence about what was actually in 

 4 the barrels. What do you see there that I've 

 5 overlooked? 

 6 MR. BIAGETTI: I'm going to get to it in one 

 7 second because the evidence of the independent hauling 

 8 is that Hooper recalled that he did it throughout and 

 9 occasionally Ross may have. Whitney said that Hooper 

 10 did it throughout and it was possible that on a couple 

 11 of occasions Madison did. 

 12 THE COURT: Do you think I'm, as a matter of 

 13 law, precluded from believing what's in Fletcher's 

 14 statements in this letter? 

 15 MR. BIAGETTI: As a matter of law, no, but as 

 16 a matter of weighing the evidence on whether or not 

 17 what Fletcher is saying is true, I don't think you can 

 18 draw the inference that it is. 

 19 Let me move on to what Fletcher picked up. 

 20 First of all, what we did on the left hand side here, 

 21 your Honor, is to summarize, as best we could, the 

 22 evidence of places where the Pyranol could have come 

 23 from at GE. You mentioned a couple of these already. 

 24 You talked about the TCE, and we know that that was 

 25 used for cleaning. We also know that Fletcher knew he 

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 1 was buying Pyranol with TCE. Hooper recalled they 

 2 would get some with a degreaser. Hooper also recalled 

 3 that they would occasionally add -- Fletcher would add 

 4 some Tri-Clean D into the thick Pyranol so that it 

 5 could be tested and used. So Fletcher knew, yes, some 

 6 of it had Tri-Clean D, TCE, but Fletcher knew he was 

 7 getting that and kept buying it. He bargained with 

 8 Metevier to get that lower cost on the thin stuff, but 

 9 he was selling it to Webster and it was usable by 

 10 Webster for Webster's purpose. See the government's 

 11 expert, Portfolio. 

 12 We know that -- in terms of order of 

 13 magnitude, Judge, how much of this stuff was coming 

 14 from those tanks of what we call off-spec Pyranol, the 

 15 stuff that having been recycled several times through 

 16 the fuller's earth, no longer met GE's demanding 

 17 specifications. They had no use for it. 

 18 It is Huchro and Murray, the two chemical 

 19 engineers at Hudson Falls for the entire period in 

 20 question here, who described that for us. Murray is 

 21 the guy that says there were these 500 gallon tanks 

 22 that would on occasion be drummed up and marked as 

 23 scrap Pyranol. 

 24 Huchro says, yes, there was some that was 

 25 collected from the drip pans. About four drums a year 

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 1 came from that process. So we have some sense, too, 

 2 of order of magnitude of where the scrap Pyranol was 

 3 coming from that ends up on the dock at GE. GE 

 4 admittedly, after finding Fletcher, does not treat 

 5 this stuff as junk. GE stores it. GE puts it in a 

 6 separate area. Clark said this. GE labels it -- 

 7 THE COURT: But he said we're drowning in 

 8 Pyranol. We've got to get rid of this stuff. 

 9 MR. BIAGETTI: I know your Honor talked about 

 10 the dual purpose. If the only thing that GE wanted to 

 11 do was solve its space problem, why not dump 

 12 the contents and sell the drums? They're worth $1.25 

 13 each. The government was talking in their closing 

 14 arguments about the value of the drums. Why not dump 

 15 the Pyranol in the river or whatever and sell the 

 16 drums for a buck twenty-five? Why not -- we had the 

 17 evidence -- the letter about the mobile landfill 

 18 operations. In that same letter when Abbe is talking 

 19 about drowning in Pyranol, he says can he go and use a 

 20 normal dumpster operation? Why not resort to a normal 

 21 dumpster operation? Because GE had a buyer which it 

 22 reasonably believed was using and buying more. 

 23 THE COURT: GE did landfill scrap Pyranol. 

 24 Why would it do that? The Hudson Falls plant -- I 

 25 don't know the other plant, but I know the location of 

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 1 the Hudson Falls plant because I drove by it two weeks 

 2 ago, as their witness described to me. It's right 

 3 next to the river. If they wanted to, they could have 

 4 poured it in. Why did they pay to landfill it 

 5 instead? We don't know the answer to that. I don't 

 6 know that I need the answer, but certainly a plausible 

 7 answer is GE was becoming more environmentally 

 8 conscious, and by the 70s it's reasonable to assume 

 9 that GE, because people were starting to complain in 

 10 the 70s about PCB, didn't want to be seen as a bad 

 11 neighbor in pouring thousands of gallons of chemicals 

 12 into the river. So it stopped doing that but it paid 

 13 people after that to landfill it and it gave it away 

 14 to others. If it had a use for it where it could sell 

 15 it, it would have sold it. 

 16 MR. BIAGETTI: And in the 50s and 60s of 

 17 course, it did, and you might draw the inference that 

 18 what it was selling to Fletcher was a Racicot, Hooper, 

 19 Whitney of a higher quality. Why? Because of the 

 20 second column here, what Fletcher picked up. This is 

 21 the evidence of what Fletcher actually picked up and 

 22 was using or selling. Hooper, real Pyranol was thick, 

 23 heavy. That's the stuff that he says they got in that 

 24 first shipment. Remember? 1953 he sold it to several 

 25 customers, Hooper said. When they ran out of 

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 1 plasticizer at the factory, Hooper said Fletcher said, 

 2 go out back, use that stuff, and that's what they did. 

 3 He used so much of it he wanted to come back for more 

 4 from GE and he bought from Sprague and Aerovox. 

 5 THE COURT: I'm not buying, used so much of 

 6 it. It's a 5 to 7 percent additive to a batch of very 

 7 limited quality of rubberized paints and roof coating 

 8 that Fletcher made infrequently compared to his other 

 9 painting businesses, and I don't believe they used 

 10 much of it. They used some, but I don't believe the 

 11 evidence suggests they used much of it at the site. 

 12 MR. BIAGETTI: Fair enough. The undisputed 

 13 evidence is that he came back for more to GE, and he 

 14 bought from Sprague and Aerovox at a higher price 

 15 during that period. 

 16 THE COURT: Do we know what they paid Sprague 

 17 and Aerovox for scrap Aroclor? 

 18 MR. BIAGETTI: I don't know exactly. I 

 19 thought there might have been -- but it was more. So 

 20 that's the heavy thick stuff. I would submit to you 

 21 that's the stuff Fletcher is talking about even in his 

 22 posturing letter about the Metevier years. That was 

 23 the right material -- the stuff that he says Metevier 

 24 was careful that Fletcher got, and to the extent 

 25 that -- and this is a stipulation, as well, Judge, in 

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 1 the case. Metevier did not give for free loads. 

 2 Metevier gave additional amounts, per the stipulation, 

 3 to make up for the thinner loads. Again, Fletcher was 

 4 telling Metevier half truths. It's too thin for me to 

 5 use. 

 6 THE COURT: When I said free, that's what I 

 7 meant. 

 8 MR. BIAGETTI: Thank you. 

 9 THE COURT: He would give free barrels 

 10 because that's what that is. When you give extra 

 11 barrels on a load for which you do not charge, you're 

 12 giving free barrels to make it up. 

 13 MR. BIAGETTI: You heard Clark. This was a 

 14 single exceptional valued customer. They made 

 15 concessions to cultivate the continued demand by 

 16 Fletcher. 

 17 THE COURT: You're overstating. I mean GE 

 18 wouldn't have been in business if this were -- are 

 19 what they would call one of their prime valued 

 20 customers. This was a scrapper who was taking away 

 21 scrap Pyranol. GE was a very profitable, very 

 22 successful capacitor maker on an international scale. 

 23 To call Fletcher a preferred customer for that kind of 

 24 business is a big stretch. 

 25 MR. BIAGETTI: GE was a profit seeker and it 

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 1 was making pure profit now on something that in the 

 2 past it had to dispose of. A pure profit seeking 

 3 motive, and everything they did was consistent with 

 4 that. 

 5 Now we get to the thinner Pyranol that had 

 6 things mixed in it. Okay. So now we're talking 

 7 about, oh, boy, this is the cigarette butts, the soda 

 8 cans. What are we talking about? Whitney tells us -- 

 9 and I believe it was in response to questions from you 

 10 about the filtering process -- all of the barrels go 

 11 into the big tank. Remember, they cut it in half and 

 12 they poured it in. They pump it because it's thick. 

 13 They pump it through these filters. I think he said 

 14 sometimes it took overnight. 

 15 THE COURT: They also mixed and pumped. 

 16 MR. BIAGETTI: They mixed and pumped. 

 17 THE COURT: That's a partial answer to the 

 18 varying quality because they tried to homogenize the 

 19 quality by mixing and filtering. 

 20 MR. BIAGETTI: Yes, and what comes out? 

 21 What's left? Whitney recalled it. Black specks. 

 22 That's it. No gloves. No shoes. No soda cans. 

 23 Black specks. No evidence any of that was hazardous. 

 24 That's what came out. So that's what we know about 

 25 what Fletcher picked up. 

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 1 THE COURT: I think the soda cans and gloves 

 2 and cigarette butts argument is a little bit strained. 

 3 That stuff might have found its way in there. That 

 4 wasn't the problem with the Pyranol. That could have 

 5 been filtered out, I suspect. The problem is not 

 6 that. The problem is the dirt, the oil residues, the 

 7 mineral oil, the TCE, the metal contaminants. All 

 8 those things. I don't know if you've ever taken apart 

 9 a hydraulic pump or seen a TCE still or seen a 

 10 chemical tank that has to be cleaned out periodically. 

 11 If you ever did, you would know, it's not like -- I 

 12 used to do TCE cases in Silicone Valley, and I've been 

 13 in clean rooms. It's not like a clean room that 

 14 they're operating here. This is a manufacturing 

 15 operation. I'm not saying GE did it in any kind of 

 16 substandard way, but it's a very dirty business but 

 17 it's not -- the problem is not that there's soda cans 

 18 floating in the Pyranol. I agree with you on that. 

 19 MR. BIAGETTI: And what Fletcher got, Judge, 

 20 based on this evidence from the Fletcher employees, is 

 21 probative of what Fletcher was picking up at GE, which 

 22 is probative of what GE saw Fletcher picking up, which 

 23 is probative of GE's knowledge of whether or not it 

 24 was -- to use Ms. Fiske's word -- inevitable that 

 25 there would be a disposal by Fletcher. 

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 1 Lastly, what Fletcher did with it, okay? We 

 2 know that the real heavy stuff he uses that substitute 

 3 and sold it to several customers. I mentioned that. 

 4 The thinner stuff -- we know from Hooper -- he sold as 

 5 is -- or as Whitney pointed out, after some blending 

 6 and filtering he sold at a cheaper price but he sold 

 7 it. We know that there were these other drums. He 

 8 said there was a mixture in a few drums of something 

 9 that not even the chemists -- not even the paint 

 10 chemists at Fletcher knew what it was, and those were 

 11 set aside. 

 12 They were asked on direct by the government, 

 13 do you know what happened to those drums, and they 

 14 answered no. So no evidence that they were disposed 

 15 of, but you may infer that since the Fletcher Paint 

 16 chemists didn't know what it was, it wasn't Pyranol. 

 17 It wasn't TCE. 

 18 THE COURT: Do you have a theory as to why it 

 19 would be relevant for Fletcher to know the specific 

 20 gravity of the drum of scrap Pyranol? 

 21 MR. BIAGETTI: My theory would be customer 

 22 satisfaction for Webtex. 

 23 THE COURT: If you have something that's a 

 24 mixture -- some things that are heavier than Pyranol, 

 25 denser than Pyranol, some things that are less dense 

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 1 than Pyranol and Pyranol -- what does the specific 

 2 gravity of the drum tell you about the contents? It 

 3 doesn't necessarily tell you is this pure Pyranol? Is 

 4 this a mixture of Pyranol and TCE and water? Pyranol, 

 5 mineral oil, TCE and water? It doesn't tell you. No 

 6 one has been able to answer that question for me, and 

 7 I wondered if you had one, which is why is he 

 8 bothering to test this thing for specific gravity? I 

 9 guess if he got one that was close to the specific 

 10 gravity of Pyranol, he's going to draw a beneficial 

 11 inference that it's probably mostly Pyranol? 

 12 MR. BIAGETTI: I don't know the answer. 

 13 Hooper is no chemist. All Hooper knows is that he's 

 14 doing some testing. There are chemists, Bishop and 

 15 McNulty, who, as Mr. Racicot testified, are using 

 16 syringes and doing other kinds of testing, and you may 

 17 infer that was to please -- first of all, to make sure 

 18 some of it -- to get to your point about the risk -- 

 19 is this a good enough load for Fletcher to use in his 

 20 paint, roof coating, pool paint, rubber-based paint, 

 21 or is it the thinner stuff that he can sell to his 

 22 customer, Webster? 

 23 THE COURT: Let's spend a minute on that 

 24 because I thought that was an important point. You 

 25 don't seem to think much of this, but paints are made 

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 1 from -- it's chemistry. They're made from formulas, 

 2 and there was interesting testimony -- I can't recall 

 3 which of the experts it was about -- about the nature 

 4 of Aroclor and how it binds with various resins and 

 5 how it is effective or not. And so I'm -- but the 

 6 problem I'm having is paint is made from a recipe, 

 7 essentially. Aroclor comprises a small part of the 

 8 recipe in those paints that call for it, 5 percent or 

 9 less. The vast bulk of the formula are other things, 

 10 the cost to the manufacturer. If you don't know 

 11 what's in the Aroclor substitute that you're using, 

 12 for example if it's half TCE and half Aroclor and you 

 13 put in the amount called for as if it were full 

 14 Aroclor, you won't get the quality of the plasticizer 

 15 effect to the extent you need to. So that batch will 

 16 end up being defective simply because half of it is 

 17 TCE and half of it is Aroclor. 

 18 If you have other contaminants in there, it 

 19 might interfere with the ability of the mixture to mix 

 20 appropriately. It might affect the drying time for 

 21 the formula which, depending upon what you're using it 

 22 for, is very important. 

 23 You can't deliver a product to specification 

 24 if you don't know what you're putting in the product. 

 25 That seems to be problematic when what you're trying 

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 1 to do is save a little on a 5 percent constituent and 

 2 running at risk the whole load. What do you have to 

 3 say about that? 

 4 MR. BIAGETTI: First of all, Judge, you're 

 5 wrestling with all of this why? The folks at the 

 6 capacitor crew at GE Hudson Falls don't know a darn 

 7 thing about paint chemistry. You're wrestling with it 

 8 because what Fletcher could do with it is probative of 

 9 what GE knew about what Fletcher was doing, first of 

 10 all, and the evidence is quite clear that while 

 11 Fletcher was using some of the thick stuff, the really 

 12 thick stuff -- Hooper said he liked that -- as a 

 13 fairly safe Aroclor substitute -- remember the first 

 14 thing he does in '53 to '56 is he tries it as an 

 15 Aroclor substitute, and we may infer it works because 

 16 he consumes or resells all of it. So he knows the 

 17 good stuff is going to work and he's got McNulty and 

 18 Bishop, his chemists, to confirm that, however they 

 19 do. He's got no risk there. 

 20 All of the rest of it, I submit the evidence 

 21 shows, he's selling to Webster, and there he's triple 

 22 dipping. First he's got somebody who will take the 

 23 thinner stuff for roof coatings. Is it usable for 

 24 that purpose? The government's expert, Portfolio, 

 25 tells us, absolutely. So number one, he's making 

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 1 money on the stuff that he can't use in his own paint. 

 2 Two, he's going back to Metevier and to Clark and he's 

 3 telling them, I can't use this. It's too thin. They 

 4 know some of it is thin. They think he's using it in 

 5 paint. They cultivate and provide a price concession. 

 6 He buys at a lower price and, three, we have the 

 7 testimony -- 

 8 THE COURT: You're saying GE thought they 

 9 could use it all, but they made concessions to him 

 10 anyways. They knew that they were being scammed, and 

 11 yet they just allowed themselves to be scammed. 

 12 MR. BIAGETTI: If I said I knew they were 

 13 being scammed, I didn't mean to. Quite the opposite. 

 14 THE COURT: So GE thought, in fact, when 

 15 Metevier told them, I've got scrap Pyranol that I 

 16 can't use, that they understood that he couldn't use 

 17 it and that's why they made him concessions? 

 18 MR. BIAGETTI: When Fletcher gave Metevier 

 19 the understanding that some of it Fletcher could not 

 20 use, that may -- first of all, that's hearsay. 

 21 THE COURT: Why isn't that an admission that 

 22 the barrels that were provided by GE to Fletcher 

 23 were -- at least some of them were being provided for 

 24 disposal because GE knew that Fletcher couldn't use 

 25 those barrels? 

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 1 MR. BIAGETTI: Because Fletcher keeps coming 

 2 back for more. He makes 70 trips, Judge, according to 

 3 the documents. Not once on the return trip to Hudson 

 4 does he bring back any that he, in fact, cannot use. 

 5 Not once. He's using or selling every drop -- 

 6 THE COURT: Because GE would never take back 

 7 these barrels because it was trying to dispose of it. 

 8 MR. BIAGETTI: It never came up. 

 9 THE COURT: In the simple, 

 10 commonly-understood sense of, get rid of it, right? 

 11 They didn't think that these barrels would be valuable 

 12 to GE. They wanted to get rid of it to the point that 

 13 they were willing to forfeit their $1.25 deposit that 

 14 they would make on barrels of Aroclor that they got 

 15 from Monsanto. Because Monsanto would charge them -- 

 16 my understanding is -- a $1.25 deposit per barrel. GE 

 17 is willing to ship it out and lose the $1.25 per 

 18 barrel because it doesn't want this stuff back because 

 19 they know they can't use it and they don't want the 

 20 scrap yard to fill up with scrap Pyranol. 

 21 MR. BIAGETTI: The evidence is Abbe, Clark, 

 22 the only thing they knew for sure Fletcher was doing 

 23 was using it in paint. They had no idea how much. 

 24 Metevier says, when you get right down to it, 

 25 that I understood from Fletcher that some of it was 

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 1 thin, give me some more. We have a stipulation in the 

 2 case that that's precisely what GE did, additional 

 3 loads to make up for it. And finally, again, we have 

 4 the testimony of -- I believe it was Racicot or 

 5 Whitney -- that Fletcher was then taking the Webster 

 6 paint, the roof coating that was being made with the 

 7 thinner stuff, slapping a Fletcher Paint label on it 

 8 and selling it at Fletcher stores. He's making money 

 9 three different ways on the thinner stuff. 

 10 The last thing that we know that Hooper and 

 11 Whitney recalled that Fletcher got was some barrels 

 12 that had TCE and he said -- you know, the usual 

 13 Fletcher, always the entrepreneur. He sold those. 

 14 That was valuable stuff, and he sold it. So when we 

 15 look at what Fletcher actually picked up -- 

 16 THE COURT: Where's the reference to that he 

 17 was selling the barrels of TCE he got from -- 

 18 MR. BIAGETTI: I'll have it for you in a 

 19 second, Judge. I don't have it at my fingertips. 

 20 THE COURT: Okay. It's up now. Whose 

 21 testimony is that? 

 22 MR. BIAGETTI: That was Hooper, I believe. 

 23 THE COURT: Hooper? 

 24 MR. BIAGETTI: Correct. Hooper at 254. 

 25 THE COURT: Okay. 

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 1 MR. BIAGETTI: So that's what was actually 

 2 happening to the scrap Pyranol that Fletcher was 

 3 taking and, to a certain extent, reselling. 

 4 Finally, we had some testimony about some 

 5 stuff that was set aside -- placed to one side. And 

 6 again, they were asked directly on examination whether 

 7 they knew what was done with that. They said they did 

 8 not -- 

 9 THE COURT: Who is Kamieniki? 

 10 MR. BIAGETTI: Kamieniki was a businessman 

 11 who -- the testimony is from Hooper -- came by 

 12 sometime later -- sometime after 1968 and took, quote, 

 13 a lot of those barrels that had been set aside. 

 14 THE COURT: Did either of you ever find him, 

 15 track him down, know what he did with the barrels or 

 16 anything like that? 

 17 MS. FISKE: Your Honor, our investigator 

 18 located his widow, and there is testimony -- I'm not 

 19 sure if it's in the record or not. 

 20 THE COURT: I won't consider it. I was just 

 21 curious about whether you followed up to see what 

 22 happened to him. 

 23 MS. FISKE: He ran various -- a garden shop 

 24 known as The Junk Man. He came and picked up the 

 25 stuff. There's no evidence in the record that he paid 

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 1 the man, as opposed to maybe Fletcher paying him. It 

 2 was sometime in the early 80s. 

 3 THE COURT: And no evidence as to what he did 

 4 with it? 

 5 MS. FISKE: We have not been able to 

 6 determine that from conversations with his widow. 

 7 THE COURT: Okay. There's nothing in the 

 8 record on that and I don't want to -- 

 9 MR. BIAGETTI: There was a question asked 

 10 whether anybody knew -- of one of the witnesses -- 

 11 whether they knew what Kamieniki's business was, and 

 12 the answer was no. 

 13 The point is this. Again, back to no discard 

 14 by Fletcher. Fletcher -- once Webster dried up as a 

 15 customer, Fletcher could have taken the barrels and 

 16 poured out the contents, sold the empty drums for a 

 17 buck fifty. He doesn't do it. He stacks them on 

 18 clean pallets. He checks them for leaks. He has his 

 19 crew -- Hooper says, we were supposed to check them. 

 20 He stores them. He tries to sell them during the 

 21 plasticizer shortage of 1974 as a substitute for 

 22 plasticizer. He sells some to Kamieniki. 

 23 THE COURT: When was it banned for use as a 

 24 plasticizer? 

 25 MS. FISKE: 1978. 

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 1 THE COURT: 1978. 

 2 MR. BIAGETTI: That's in the Shifrin report. 

 3 But again, in terms of all the evidence of how 

 4 Fletcher valued this stuff, he could have poured it 

 5 out, sold the drums, did not. Stored them, stacked 

 6 them, fixed them, tried to sell them. No 

 7 preponderance of evidence of any discard by Fletcher. 

 8 Was there eventually a release 20 years 

 9 later? Of course. Is there any evidence that any of 

 10 that was from drums of GE's Pyranol? None, your 

 11 Honor. We know that Fletcher stacked these along with 

 12 drums from Aerovox, from Sprague, his own resins, his 

 13 own linseed oil, et cetera, and there's no evidence 

 14 that anything that was released was hazardous. 

 15 THE COURT: I don't know anything about the 

 16 site work done here -- and this may not be in the 

 17 record. Are there any PCBs in the groundwater? 

 18 MS. FISKE: Yes. 

 19 MR. FLYNN: Yes. 

 20 THE COURT: I assume that's why you're going 

 21 after these guys, right? 

 22 MR. FLYNN: Yes. There's PCBs in the 

 23 groundwater, in the soil, and we have a stipulation 

 24 that shows it's 400, but half of the drums that were 

 25 tested contain PCBs. Exhibit 55 of the United States 

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 1 exhibit list. 

 2 MR. BIAGETTI: Judge, I just want to touch on 

 3 two more points, if I may, about GE's reason to know 

 4 what was going on. First, we have GE's -- what GE saw 

 5 during what we're going to call the Metevier years, 

 6 and we tried to put together for you here -- can we 

 7 move it to the left a little bit -- a timeline where 

 8 we have the pick-ups beginning -- if we could move to 

 9 the left a little bit, yeah, there it is. That first 

 10 shipment we talk about in 1953, it's more than a 

 11 hundred drums and it's all either used or sold. He 

 12 comes back for more. 

 13 By '55 the sales to Webster begin, and now 

 14 the pick-ups by Fletcher begin. This is what GE sees, 

 15 a pick-up in '56 of 20 drums; 17 pick-ups in '57; 12, 

 16 11, 12. There are complaints during this time, 

 17 according to Metevier, only about two things. One, 

 18 short loads. You didn't give me enough. You didn't 

 19 sell me enough. Or two, stuff is so thin that I can't 

 20 use it, and so additional makeup loads are provided. 

 21 That's our stipulation that you see down here, and so 

 22 the pick-ups continue throughout the Metevier period. 

 23 There is never a return of a barrel. Hooper says that 

 24 the quality never changed during this period. 

 25 Fletcher says that this was the period in which GE was 

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 1 careful to give us the right material. 

 2 And the only other point I believe we have 

 3 during the Metevier years is the tour, when Metevier 

 4 goes to Fletcher Paint. You heard the questioning on 

 5 that subject. All Metevier could see at that time was 

 6 a bustling paint operation. He couldn't see the 

 7 stockpile of drums, to the extent it existed, because 

 8 the walls were too high and he couldn't see it when he 

 9 was in Mr. Fletcher's office. But what if he had? 

 10 What if he had? He would have simply seen Fletcher 

 11 storing on pallets his -- maintaining his inventory. 

 12 He would not have seen discard. Again, no willful 

 13 blindness. To the extent that they did ask, they were 

 14 told it was being used in paint, we have that 

 15 testimony. And even if they had seen, all they would 

 16 have seen was storage and care, not discard. 

 17 After the Metevier years -- can we move it 

 18 over? That's perfect. Thank you. We have Metevier 

 19 retiring and we have the testimony that Varnum came 

 20 aboard and said, basically, if you haul it, you bought 

 21 it, and so the testing at GE begins. 

 22 What did Hooper say? They saw the testing -- 

 23 that GE's crew on the dock and Mr. Varnum saw the 

 24 testing with the beaker and the hydrometer, saw the 

 25 selection and rejection by Fletcher's crew. And 

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 1 again, at the risk of bringing it up for the third 

 2 time -- 

 3 THE COURT: Doesn't that show that GE 

 4 understood that not all of the waste Pyranol it 

 5 produced was of acceptable quality for Fletcher? 

 6 Therefore, in years where barrels were being shipped 

 7 without hydrometer testing, either before the time 

 8 when they were doing it or after when they were 

 9 getting shipments by a contract shipper, that GE well 

 10 understood that not all of the Pyranol was usable for 

 11 Fletcher? 

 12 MR. BIAGETTI: I don't think so, Judge, 

 13 because the quality stayed the same, Hooper tells us 

 14 that, and the pick-ups continue. If you look at '66 

 15 and '67, even in the years when, according to Hooper 

 16 and Whitney, it is possible that there were a couple 

 17 of independent contractor shipments by a guy hired by 

 18 Fletcher, that's the state of evidence -- 

 19 THE COURT: The pick-ups went on during the 

 20 Metevier years because Metevier gave free barrels in 

 21 compensation for bad barrels. They went on in the 

 22 Varnum years because Fletcher was able to reject 

 23 on-site the barrels that it didn't want. And they 

 24 went on in the contractor years because Fletcher was 

 25 getting the barrels without paying for them because he 

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 1 just refused to pay the invoices until they started to 

 2 go after him. Then he complained and he ended up 

 3 getting them for free. So that's why it went on even 

 4 though during the Metevier and pre-Metevier years they 

 5 knew they were getting bad barrels, and in the 

 6 post-Varnum years they knew they had gotten bad 

 7 barrels because they didn't have to pay for any of 

 8 them. That's why -- that's I guess why you and I are 

 9 seeing this case in very different ways. 

 10 MR. BIAGETTI: You are focusing a lot on what 

 11 ends up being the Fletcher letter. In the Metevier 

 12 years we know we have some complaints about short 

 13 loads, about thin stuff and we have some make-up 

 14 barrels being shipped. That, respectfully, Judge, 

 15 does not equate to evidence that Fletcher was not 

 16 using what he had. He was -- we know he was using the 

 17 thick stuff. The rest he was reselling. He wasn't 

 18 telling GE about the reselling. GE only knew about 

 19 the use. 

 20 THE COURT: He could have been filtering and 

 21 blending it and using it all, as you're suggesting. 

 22 That's one possible argument I understand you to be 

 23 making on that. He could have been selling it all as 

 24 an extender and lying to Metevier and lying to Clark 

 25 or whoever he wrote the letter to. 

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 1 MR. BIAGETTI: Clark. 

 2 THE COURT: That's another possibility. Or 

 3 it could be as he was representing, which is, I can't 

 4 use a lot of this stuff. I'm not going to give it 

 5 back to you. I'll keep it here even though I can't 

 6 use it, but I want allowances made for the fact that I 

 7 can't use it. Those are the three possibilities. You 

 8 discount the last one, but it seemed to focus on the 

 9 other two. 

 10 MR. BIAGETTI: Well, I discount the last one 

 11 to the extent that all of his behavior after that is 

 12 inconsistent with this notion that he can't use. He 

 13 keeps buying the paint. During the Metevier years 

 14 he's buying and paying for. He's never returning any. 

 15 During the post-Metevier years the testing is going 

 16 on. He's taking what he thinks are good barrels, and 

 17 then we come to the Clark letter, and so I want to get 

 18 to that next, if we can. 

 19 THE COURT: I've got to give my reporter a 

 20 rest soon. Are you getting close to being done? 

 21 MR. BIAGETTI: Can I have ten minutes? 

 22 THE COURT: Can my reporter go another ten 

 23 minutes? She says yes. Ten minutes, and then we'll 

 24 take a break. 

 25 MR. BIAGETTI: Unless you want to take the 

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 1 break now. 

 2 THE COURT: No. I'm fine. 

 3 MR. BIAGETTI: First of all, there's things 

 4 that we know that he even in this letter concedes, 

 5 we've had good relations with your company. Metevier 

 6 used to be careful that the drums that were shipped 

 7 were reasonably clean. He took care that he did not 

 8 receive drums that were only partially filled or had a 

 9 lot of water. When our truck was picking up, folks 

 10 were careful to give us the right material. We have 

 11 been through that. Now we get to his contentions -- 

 12 and, again, remember, Clark's testimony is I had a 

 13 conversation with him in January. He never -- and I'm 

 14 trying to cultivate -- I'm trying to encourage more 

 15 buying. I know that he hasn't paid. I mention that 

 16 in the call but at the end. That's in January. 

 17 Within a couple of weeks for the first time ever 

 18 during the Clark years there's a complaint, and here's 

 19 what it is. The first contention: About two or three 

 20 years ago something happened -- or shall we say a 

 21 variety of things happened. Well, we know, first of 

 22 all, Hooper says nothing happened. Quality stayed the 

 23 same throughout, and we know that during this period 

 24 Fletcher made 26 more pick-ups of 2,500 drums without 

 25 a complaint. Without a peep. 

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 1 THE COURT: Go on. 

 2 MR. BIAGETTI: Thank you. You put the 

 3 Pyranol in badly contaminated drums containing coal 

 4 tar emulsion. Well, that's not what Murray or 

 5 Dashinaw are saying. They saw the drums and said they 

 6 were new. Mumblo said they were new. Clark recalls 

 7 that they were new. 

 8 THE COURT: I don't know that there's any 

 9 evidence that coal tar emulsion was ever used. I had 

 10 a lot of coal tar cases, too, and it's generally a 

 11 residue of coal gasification, and it's not something 

 12 that would be a product or a by-product of a capacitor 

 13 manufacturer so I don't know what that is. 

 14 MR. BIAGETTI: Nor are we. And remember, 

 15 Fletcher recognizes in this letter through the whole 

 16 thing, unknown to me this has been going on for some 

 17 time. So he is, at best, guessing and wrong and, at 

 18 worst, posturing. One more. You have shipped drums 

 19 one-quarter and one-half full. Well, we know, again, 

 20 after the Metevier years there was testing that went 

 21 on at GE and only drums that were selected by Hooper 

 22 came back. Clark recalls no previous complaints on 

 23 this subject either. 

 24 Next. And here we have this other trucker. 

 25 Again, Hooper and Whitney say, it was only Hooper who 

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 1 did the pick-ups or a couple of times Fletcher may 

 2 have hired Ross or Fletcher may have hired Madsen. No 

 3 evidence that there was any hauling by GE. No 

 4 evidence that there was any billing of 150 bucks a 

 5 load by GE or payment by Fletcher of $150 a -- 

 6 THE COURT: And Fletcher doesn't contend 

 7 that. His letter contends he paid for it all. 

 8 MR. BIAGETTI: Right. Yes, he does. So 

 9 we have to believe during that time period, when those 

 10 loads were coming -- again, it was 70 drums a load. 

 11 They came 17 times in 1966 and 1967. They were 

 12 garbage, according to savvy businessman Fletcher, and 

 13 he accepted every single one of them without a peep. 

 14 GE reasonably disbelieved this letter. How 

 15 do we know? One, Clark and Abbe say it; but two, they 

 16 do the Monsanto test. Why test material if you're 

 17 laying down -- if your state of mind is, this is 

 18 garbage, we found this out, that's the end of that. 

 19 No. They didn't believe it. They challenged its 

 20 validity. That's why they do -- the very fact of the 

 21 Monsanto test is evidence of GE's state of mind that 

 22 they did not believe what Fletcher was saying in this 

 23 letter, or to use Clark's words, that the stuff was 

 24 anywhere near as bad as Fletcher said. We believed he 

 25 could continue to use it. 

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 1 Abbe and Clark then decide on the write-off. 

 2 Why? They don't want to spend GE's money -- GE the 

 3 profit maximizer -- on sending a chemist for a week. 

 4 And most importantly, they want to keep Mr. Fletcher 

 5 happy. They want to cultivate him. They want him to 

 6 resume buying. Abbe believes that it worked. His 

 7 testimony is that he did continue to buy. Hooper 

 8 says, I continued to make pick-ups up until my 

 9 gallbladder operation in 1970. So that was GE's state 

 10 of mind. We don't believe it. We think he'll 

 11 continue to buy and use. Let's cultivate and get him 

 12 to do it. And that's what they did. 

 13 So you don't get to, respectfully, any 

 14 inference of an intent by GE to arrange for a disposal 

 15 here unless you make several ambitious inferences. 

 16 There's no direct evidence of the state of mind of GE 

 17 knowing that Fletcher was going to dispose. They 

 18 thought he was using it in paint. 

 19 There's no evidence that Fletcher did 

 20 discard. He cared for everything. He put it on 

 21 pallets. He tried to sell it. He never dumped out 

 22 the contents and sold those drums for a buck and a 

 23 quarter. He was storing his inventory because it had 

 24 value to him. 

 25 You would have to find, Judge, or infer in 

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 1 order to find circumstances here of intent to arrange 

 2 for disposal would be at least this: That the testing 

 3 did indeed end sometime before November of 1967. That 

 4 those 17 loads that came afterwards came without any 

 5 scrutiny at all, but we know that the quality didn't 

 6 change at that time. We know that Hooper continued to 

 7 make the pick-ups and Hooper was on the stand. The 

 8 government never asked him, did you continue to do the 

 9 testing after? Because his recollection was that he 

 10 did continue to make pick-ups, that Varnum continued 

 11 to work there -- that was Hooper's recollection -- 

 12 that there were no other people that did it and that 

 13 the testing continued. 

 14 You would have to find that of those drums 

 15 that came in those two years of an independent hauler 

 16 or two, that the quality in them declined 

 17 dramatically, so dramatically that it was actually 

 18 below what the Monsanto test reported. Namely, up to 

 19 22 percent because we know from the government's 

 20 expert, Portfolio, and our experts, that anything even 

 21 as described by Monsanto was usable in roof coating, 

 22 which Fletcher made, and was usable in the products 

 23 that Fletcher was selling to Webster. 

 24 So there would be no stockpiling after that 

 25 unless the stuff in there had declined in quality so 

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 1 dramatically that it was even worse than what Monsanto 

 2 had reported. And again, Fletcher never makes a peep 

 3 during this time about uselessness. 

 4 THE COURT: If you were to tick off the five 

 5 strongest points to suggest in your view that this 

 6 arrangement between GE and Fletcher was an arrangement 

 7 for sale of Pyranol that was to be used rather than 

 8 disposed of, I think one of them would be Fletcher 

 9 paid for the product. Another would be Fletcher told 

 10 various people at GE that he was using it as a 

 11 plasticizer in paints. 

 12 MR. BIAGETTI: Yes. 

 13 THE COURT: Give me the other three points 

 14 that you think support your interpretation. Not 

 15 arguments that they can't prove that, but what 

 16 evidence do you have that -- affirmative evidence that 

 17 that is what the arrangement was? 

 18 MR. BIAGETTI: What GE saw of Fletcher's 

 19 conduct at the -- both in doing the testing and 

 20 selecting and rejecting at the GE dock, and before 

 21 that seeing that Fletcher was only complaining about 

 22 short loads, wanting more. That's consistent with 

 23 knowledge of putting it to a useful purpose. The 

 24 expert -- 

 25 THE COURT: So that he bought and that he 

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 1 continued to buy over a multi-year period. 

 2 MR. BIAGETTI: Yes. 

 3 THE COURT: If he were just experimenting and 

 4 thought he might be able to use it, he might have 

 5 bought one load, but you wouldn't see him coming back 

 6 buying more loads. So I think you would say not only 

 7 did he pay for it, but that he paid for it on multiple 

 8 occasions over a multiple-year period suggests use. 

 9 MR. BIAGETTI: Yeah, and that he kept 

 10 bargaining. He complained when he didn't get enough. 

 11 That he paid two prices. He was pushing as hard as he 

 12 could to drive the best bargain because, he had -- at 

 13 least in his eyes he had a use. I would add the 

 14 unanimity among the experts that this was indeed 

 15 useful and usable for the purposes that Fletcher was 

 16 using them for and that Fletcher, in turn, was making 

 17 money on. It was not inevitable that there was going 

 18 to be any discard here because it was all usable. It 

 19 was all usable. 

 20 And finally, I would say the way that GE 

 21 treated the product, okay? It segregated it on the 

 22 dock. It labeled it. It held it there. It didn't 

 23 dump it into the Hudson River. It didn't sell the 

 24 empty drums. It held it for Fletcher to buy and 

 25 cultivated Fletcher whenever it could to continue to 

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 1 buy more. 

 2 Lastly, Judge, to the extent that you decide 

 3 that there was something more than a release here, 

 4 that there was a disposal -- 

 5 THE COURT: I'm not going to decide today 

 6 whether there was a disposal, okay? That was not what 

 7 I was asked to do. I'm not doing that. 

 8 MR. BIAGETTI: But you would have to find 

 9 that this was something more than a mere abandonment 

 10 of drums after Fletcher dies in 1983. Up until that 

 11 time he cared for them, put them on a pallet, checked 

 12 them for leaks. Sometime thereafter there was 

 13 leaking. There's no evidence that it's GE's drums 

 14 that leak, and there's no evidence that Fletcher had 

 15 that or contemplated that or had it in mind. The 

 16 evidence is quite the opposite. 

 17 So there again, Judge, there's no evidence 

 18 that either GE or Fletcher was using any of this as, 

 19 to use the statutory term that your Honor was talking 

 20 about before, a solid waste. This stuff was being 

 21 used, as far as GE knew, in a manufacturing process by 

 22 its one valued client as to whom it was making a 

 23 hundred percent profit on, essentially, and that was 

 24 Fletcher. There was no discard. There was no 

 25 recycling by Fletcher of that product, and there was 

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 1 no knowledge by GE that that's what Fletcher was doing 

 2 with it. 

 3 All GE saw was Fletcher buying, bargaining, 

 4 complaining when he didn't get enough and coming back 

 5 for more, and we believe that that proof establishes 

 6 facts from which you must infer that there was no 

 7 knowledge on GE's part at the time, '53 to '68, that 

 8 this was being -- that it was substantially certain 

 9 that Fletcher was going to take this stuff and dispose 

 10 of it. May I have one moment? 

 11 THE COURT: Yes. 

 12 MR. BIAGETTI: Thank you for your time. 

 13 THE COURT: Thank you. I want to commend 

 14 counsel for both sides. I think you've -- 

 15 particularly GE has tried to present every single fact 

 16 that could possibly be presented to support its side 

 17 of the case, and I respect that. I think on a couple 

 18 of occasions in your oral argument today you reached a 

 19 little further than I would have in trying to ask for 

 20 further inferences to be drawn, but I do respect the 

 21 fact that you have zealously represented your client 

 22 and tried to bring to my attention every single fact 

 23 that could possibly support your position that the 

 24 government has not proved that there was an 

 25 arrangement for disposal here. I'm going to take a 

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 1 break and then I'll come back and give you a decision 

 2 in ten or fifteen minutes. 

 3 (Recess) 

 4 THE COURT: The sole issue I'm going to 

 5 decide today is whether GE "otherwise arranged for 

 6 disposal" of a hazardous substance when it arranged 

 7 with Mr. Fletcher to transfer waste Pyranol from GE to 

 8 Mr. Fletcher and his businesses. 

 9 As I've previously explained, the government 

 10 has the burden of proving by a preponderance of the 

 11 evidence that GE did otherwise arrange for disposal of 

 12 the scrap Pyranol. I've also explained that it's my 

 13 interpretation of the phrase "otherwise arranged for 

 14 disposal", that the phrase means -- that the phrase 

 15 means entered into an arrangement in which disposal 

 16 was the desired outcome; that is, the objective and 

 17 cases in which the person who arranges for disposal 

 18 knows that disposal is substantially certain to result 

 19 from the arrangement. 

 20 I believe that I should consider the totality 

 21 of relevant circumstances in making this determination 

 22 and not treat any one piece of evidence as 

 23 dispositive. Using this test I find by a 

 24 preponderance of the evidence that the government has 

 25 proved in this case that GE otherwise arranged for the 

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 1 disposal of waste Pyranol. Let me explain my 

 2 reasoning. 

 3 I think we need to examine several matters in 

 4 order to try to resolve this dispute. We need to ask 

 5 ourselves: What was in the drums of waste Pyranol 

 6 that GE transferred to Mr. Fletcher? We need to ask 

 7 ourselves: What did GE do with the scrap Pyranol that 

 8 it did not transfer to Mr. Fletcher? 

 9 We need to ask ourselves: What did GE 

 10 understand about Mr. Fletcher's business when it 

 11 entered into the arrangement with him? We need to 

 12 understand what was GE's understanding of the 

 13 potential uses of waste Pyranol at the time it entered 

 14 into the arrangement, and we need to understand the 

 15 precise contours of the arrangement between GE and Mr. 

 16 Fletcher as it evolved over time. 

 17 I want to start with asking: What is it that 

 18 was in the barrels of scrap Pyranol that were 

 19 transferred to Fletcher? I think we know that scrap 

 20 Pyranol came from several sources within the GE 

 21 manufacturing process. GE purchased Aroclors from 

 22 Monsanto. It then filtered those Aroclors and added 

 23 things to them. What they added changed over time as 

 24 the composition of the Pyranol changed to meet 

 25 changing specifications. GE would filter the Aroclors 

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 1 with fuller's earth and add things to it to make 

 2 Pyranol. At one time, for example, as much as 25 

 3 percent of Pyranol would be comprised of a different 

 4 compound, PCB, and there were other additives used at 

 5 different times during the process of producing 

 6 Pyranol. 

 7 Pyranol was used by GE primarily to -- I'm 

 8 going to use the term -- infuse capacitors. It was 

 9 used as a dielectric fluid and it was placed inside 

 10 the capacitors. During the manufacturing of 

 11 capacitors, waste Pyranol could be produced in a 

 12 variety of different ways. There were occasions in 

 13 which GE was not able to bring a batch of Pyranol up 

 14 to specification and would have to declare the entire 

 15 batch a waste product. It would regularly be the case 

 16 that Pyranol would spill during the manufacturing 

 17 process and have to be recovered sometimes with Speedy 

 18 Clean being poured on the spill; other times the spill 

 19 being collected in other ways. The liquid portions 

 20 would be treated as scrap Pyranol. 

 21 Scrap Pyranol would be collected in drip pans 

 22 that would be placed at various points along the 

 23 manufacturing process. Scrap Pyranol would be 

 24 collected from troughs that were cut into the floor. 

 25 Scrap Pyranol would be recovered after TCE was 

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 1 distilled for reuse. TCE is a degreaser that was used 

 2 to clean the capacitors during the manufacturing 

 3 process, and frequently you would find TCE mixed with 

 4 Pyranol. And when that occurred, the Pyranol would 

 5 have to be treated as scrap Pyranol. 

 6 Scrap Pyranol would contain TCE. It would 

 7 contain water. It would contain mineral oil. It 

 8 would contain metal. It would contain dirt and debris 

 9 that would find its way into the drip pans and the 

 10 troughs and on the floor when spills would occur. It 

 11 was also produced when capacitors were tested and 

 12 found to be defective. They would have to be drained 

 13 and the Pyranol would be treated as scrap Pyranol. 

 14 Scrap Pyranol was collected in a scrap 

 15 Pyranol tank in which scrap Pyranol from a variety of 

 16 sources would be deposited into the tank until it was 

 17 filled to a sufficient degree that it would be poured 

 18 off into 55 gallon drums. On other occasions scrap 

 19 Pyranol would be placed in the drums directly. When a 

 20 sufficient amount of scrap Pyranol was collected in 55 

 21 gallon drums, it would be removed to a scrap area and 

 22 it would be labeled as scrap Pyranol. It would be 

 23 retained in the scrap area with other kinds of scrap 

 24 materials. 

 25 What do we know about the content of that 

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 1 scrap Pyranol? I believe that it varied dramatically 

 2 in quality from barrel to barrel. When barrels were 

 3 composed primarily of a batch of Pyranol that didn't 

 4 meet a specification, it would be relatively 

 5 uncontaminated. When it came from other sources, it 

 6 might have much higher degrees of contamination. 

 7 I forgot to mention another source of scrap 

 8 Pyranol would be the use in pumps -- they sometimes 

 9 refer to them as oil pumps -- and those pumps would 

 10 leak or have to be cleaned and the oil in the pumps 

 11 would be Pyranol, and that would be scrapped, as well. 

 12 The 55 gallon drums contained a variety of 

 13 substances, including Pyranol, and the composition of 

 14 each barrel would vary from barrel to barrel. We know 

 15 this both from -- we know it from Mr. Hooper's 

 16 testimony. We know it from Mr. Fletcher's complaints 

 17 to Mr. Metevier. We know it from the fact that Mr. 

 18 Fletcher had to do testing of barrels during the 

 19 Varnum regime where he was being required to pay for 

 20 every barrel that he took. We know it from Mr. 

 21 Fletcher's complaints to GE when he was asked to pay 

 22 for drums that he hadn't paid for that had been 

 23 shipped using a private contractor and for which, in 

 24 my view, no testing at the loading dock had been done 

 25 as had been with the Varnum barrels, and we know it 

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 1 from the Monsanto test results from the representative 

 2 sample of drums from the GE scrap area. 

 3 So we know that it would vary dramatically in 

 4 its composition and would contain, in some cases, more 

 5 than 20 percent TCE, would contain water, would 

 6 contain mineral oil, would contain metals, would 

 7 contain other substances, would contain dirt and 

 8 debris. And so we know that the scrap Pyranol was 

 9 really far, far different from the Aroclor that would 

 10 be purchased by GE from Monsanto. 

 11 In fact, although some efforts were made 

 12 initially or at some point to get Monsanto to reclaim 

 13 the Pyranol, it was deemed not feasible to do so, and 

 14 it simply could not in that form have been used as a 

 15 substitute for Aroclor; certainly as a dielectric 

 16 fluid or, as I'll explain later, as a plasticizer in 

 17 paints. 

 18 What do we know about GE's uses of scrap 

 19 Pyranol? I believe it's unquestioned in this case 

 20 that GE viewed scrap Pyranol as a waste. It was a 

 21 by-product of its manufacturing process. It was 

 22 something to be gotten rid of by GE. It was not 

 23 something that GE saw as a profit center -- a way to 

 24 make money through the sale of a product. 

 25 We know this because every other use that GE 

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 1 made of scrap Pyranol unquestionably qualifies as a 

 2 disposal. We know GE dumped it into the river. 

 3 That's an arrangement for disposal. We know GE 

 4 landfilled it. That's an arrangement for disposal. 

 5 We know GE gave it to local communities for use as a 

 6 dust suppressant, and we know that that's a disposal. 

 7 There isn't a single instance of GE entering into an 

 8 arrangement to use scrap Pyranol for anything other 

 9 than things that would amount to disposal in this 

 10 record. And the only question is: Did its 

 11 arrangement with Fletcher amount to something other 

 12 than an arrangement for disposal? It is highly 

 13 relevant that all of the other arrangements that GE 

 14 made with respect to waste Pyranol were arrangements 

 15 for disposal. 

 16 Now, what do we know about GE's understanding 

 17 about what Fletcher did? Fletcher was a small paint 

 18 manufacturer and chemical scrapper, and GE understood 

 19 him to be such. A small paint manufacturer and 

 20 chemical scrapper. 

 21 I don't believe there's persuasive evidence 

 22 in the record to suggest that GE knew that Fletcher 

 23 was using Pyranol, himself, as a dust suppressant, 

 24 although clearly GE knew that others used scrap 

 25 Pyranol for that purpose. I don't believe there's 

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 1 persuasive evidence in the record to suggest that GE 

 2 knew that Fletcher was using it as -- would use it as 

 3 an herbicide or insecticide, although GE knew that 

 4 others were using scrap Pyranol for that purpose. 

 5 I don't believe that there's any evidence in 

 6 the record to suggest that GE knew that Fletcher was 

 7 selling scrap Pyranol to anyone else; and certainly no 

 8 evidence in the record to suggest that GE was aware of 

 9 sales of scrap Pyranol to Webtex or its predecessor 

 10 company. 

 11 I think it is worth at least noting what, in 

 12 fact, we know about what Fletcher did with the Pyranol 

 13 at the site, but to me that's less important than what 

 14 GE understood when it entered into the arrangement 

 15 with Fletcher. There is evidence -- and finally, I 

 16 think there is evidence to suggest that GE understood 

 17 that Fletcher was using at least some of it in a paint 

 18 manufacturing process as a plasticizer. 

 19 Now, what, in fact, did we know about what 

 20 Fletcher used the Pyranol for? Fletcher did use the 

 21 Pyranol as a plasticizer in a rubber-based pool paint 

 22 or a cement surface paint and perhaps in some roof 

 23 coating that he manufactured. These were very small 

 24 quantities in comparison to Mr. Fletcher's other paint 

 25 making operations and so I can't precisely identify 

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 1 how much was used, but a very, very small proportion 

 2 of the more than 3,500 barrels of Pyranol that -- 

 3 scrap Pyranol that Mr. Fletcher obtained from GE were 

 4 used for these purposes. 

 5 Scrap Pyranol was sold by Mr. Fletcher to 

 6 Webtex's predecessor. The precise use to which it was 

 7 being put is not clear to me, although it may have 

 8 been used in roofing materials, and there is some 

 9 evidence to suggest that some quantities were also 

 10 sold by Fletcher to other customers. 

 11 I am -- it is my judgment, and I believe the 

 12 government has proved that only a very small 

 13 proportion of the very large quantity of Pyranol that 

 14 was received by Mr. Fletcher was ever used for any of 

 15 these purposes. The vast majority of it was never 

 16 used and remained on-site until it was hauled away. 

 17 What do we know about what Mr. Fletcher 

 18 actually physically did with the waste Pyranol when it 

 19 got to his site? We know that some of it was blended 

 20 and filtered. Light Pyranol was mixed with heavier 

 21 Pyranol. It was filtered and some of it was used. We 

 22 know that early on many of the barrels were stored on 

 23 their side behind what was the Fletcher paint factory. 

 24 Later, after some fill was added to that site, barrels 

 25 were stored on pallets and stacked vertically. The 

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 1 barrels were also stored at other locations on that 

 2 site and another site Mr. Fletcher owned. The other 

 3 site they were placed on their sides, stacked two, 

 4 three, four, five on top of each other. 

 5 Over time -- the quantity of Pyranol at the 

 6 site would fluctuate somewhat -- but over time it 

 7 tended to grow rather than diminish, and certainly 

 8 there were thousands of barrels of waste Pyranol that 

 9 were at the site. And we do know that Mr. Fletcher 

 10 purchased scrap Aroclor from two other companies, 

 11 Aerovox and Sprague, but these were small in 

 12 comparison to the numbers of scrap Pyranol barrels 

 13 that he was purchasing from GE. 

 14 What do we know about the potential uses for 

 15 scrap Pyranol? Again, I think what's most important 

 16 here to me is what did GE understand at the time, but 

 17 since the parties have spent significant effort trying 

 18 to establish what potential uses for this product 

 19 were, let me comment on that and make certain findings 

 20 concerning that subject. 

 21 Aroclor, which was used to make Pyranol, did 

 22 have recommended uses as a plasticizer in certain 

 23 kinds of paint products that called for plasticizers. 

 24 Where it was used, it was a relatively small 

 25 constituent of the paint product that was being 

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 1 manufactured. Five percent or less would be the 

 2 plasticizer. 

 3 Aroclor was recommended for use as a 

 4 plasticizer in certain kinds of paint, and there was a 

 5 market for the use of certain Aroclors as plasticizer 

 6 in certain kinds of paint. And it's conceivable that 

 7 the Aroclors that GE was purchasing could also have 

 8 been used as a plasticizer in certain kinds of paints, 

 9 although I need to be clear that Monsanto used Aroclor 

 10 as a trade name that covered a variety of different 

 11 kinds of products and not every product would be a 

 12 substitute for every other kind of Aroclor. 

 13 Indeed, some Aroclors were not even PCBs, as 

 14 I understand it, but I do think it's at least 

 15 conceivable that some of the Aroclors that GE 

 16 purchased did have a use -- alternative use as a 

 17 plasticizer in certain kinds of paints. 

 18 It is theoretically possible that scrap 

 19 Aroclor, at least some of it, could have been used as 

 20 plasticizer for certain kinds of paint; and as I've 

 21 already suggested, I think Mr. Fletcher used it for 

 22 this purpose. 

 23 It does not appear to me that there was any 

 24 market at the time for scrap Pyranol -- market of any 

 25 size for scrap Pyranol as a plasticizer in paints, and 

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 1 it doesn't make to me any economic sense that there 

 2 would be such a market for the reasons testified by 

 3 one of the experts; that because it's such a small 

 4 constituent part of a batch of paint where a 

 5 plasticizer is called for and because the quality of 

 6 the scrap Pyranol varied so radically and because 

 7 paints have to be produced in accordance with specific 

 8 formulas, it would be simply too risky given the 

 9 potential limited cost savings of substituting scrap 

 10 Pyranol for Aroclor to take the risk of ruining an 

 11 entire batch of paint with that kind of substitute 

 12 product. 

 13 I also don't see any evidence that there was 

 14 any -- there's no evidence in this record to suggest 

 15 that anybody anywhere in the world, other than Mr. 

 16 Fletcher was using scrap Pyranol as a plasticizer in 

 17 paints or selling it for that purpose. Certainly GE 

 18 was not doing that. There's no evidence that GE did 

 19 with any of the Aroclor -- scrap Aroclor it had at its 

 20 facilities. As I explained, it disposed of it in 

 21 every other case other than, as we're discussing here, 

 22 the transfers to Mr. Fletcher. 

 23 GE was a sophisticated company. It had paint 

 24 making operations. It's reasonable to assume that if 

 25 scrap Aroclor were a viable substitute for scrap -- 

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 1 scrap Pyranol were a viable substitute for Aroclor, 

 2 that GE would have used it as such or identified a 

 3 potential market for it as such. 

 4 Mr. Fletcher was paying such a low price for 

 5 it that if there were any significant market for the 

 6 use of scrap Pyranol as a substitute for Aroclor, one 

 7 would have expected that there would be alternative 

 8 customers. There's no evidence in the record here 

 9 that anyone ever approached GE or GE was ever able to 

 10 find anyone else who was interested in taking this 

 11 product for use as a plasticizer. 

 12 So what do we know about the nature of the 

 13 arrangement between GE and Mr. Fletcher? We know the 

 14 relationship spanned a number of years. It began in 

 15 the 50s and continued for a number of years, well into 

 16 the 60s. We know that the arrangement was -- although 

 17 the initial transfers appeared to be no charge 

 18 transfers, that at some point thereafter Mr. Fletcher 

 19 entered into an arrangement where he agreed to send 

 20 his men to the facility to take the scrap Pyranol and 

 21 to pay for the scrap Pyranol. There is evidence to 

 22 suggest that certain GE employees understood or 

 23 believed that Mr. Fletcher was using it in paint 

 24 operations, although there's also testimony to suggest 

 25 that Mr. Fletcher went to some length to conceal from 

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 1 GE what he was using the product for. 

 2 I don't think there's any evidence in this 

 3 record to suggest that GE, when it entered into the 

 4 arrangement, required Mr. Fletcher to dispose of it. 

 5 There's no evidence to suggest that GE required Mr. 

 6 Fletcher to use it as plasticizer in paints. There's 

 7 no evidence to suggest that GE desired that it be 

 8 disposed of. That is, that it was the conscious 

 9 object to release it into the environment. 

 10 It is absolutely clear to me that GE -- its 

 11 objective was to be rid of what it believed was a 

 12 waste product and to do it in the most economically 

 13 viable way. If it could charge for it, it would. If 

 14 it could not charge for it, it would find the least 

 15 expensive acceptable way to dispose of it and it would 

 16 get rid of it. And so there's no evidence to suggest, 

 17 though, that it desired that it be released into the 

 18 environment. Rather, it was indifferent to what 

 19 happened to it after it got to the Fletcher's 

 20 property. 

 21 The arrangement did change somewhat over 

 22 time. As I suggested initially, it was an 

 23 arrangement -- excuse me. The initial shipment was a 

 24 no charge shipment. Then at some point after that Mr. 

 25 Fletcher agreed to pay for the product. He sent his 

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 1 men to pick up the product or the scrap Pyranol -- I 

 2 think product is probably a mischaracterization -- to 

 3 pick up the scrap Pyranol. He would pick it up in a 

 4 truck that -- his men would pick it up in a truck that 

 5 had between 18 and 20 -- could carry between 18 and 20 

 6 barrels at a time, and he would pick it up and the 

 7 arrangement was, between GE and Fletcher, when GE had 

 8 scrap Pyranol that it wanted to get rid of and Mr. 

 9 Fletcher wanted to take the scrap Pyranol, he could 

 10 arrange to come to the factory and take it and bring 

 11 it back to his site and pay a price which, after 

 12 deducting the cost of the used barrels, about four 

 13 cents a gallon. 

 14 The arrangement continued for a number of 

 15 years. Over the course of the life of the 

 16 arrangement, Mr. Fletcher acquired several thousand 

 17 barrels. I believe at least 3,500, and probably more 

 18 than that, based on the parties' stipulation as to the 

 19 amount of Pyranol that he acquired. When his men 

 20 would pick it up initially, they would not test it at 

 21 the site. As I mentioned, the Pyranol varied 

 22 dramatically in quality, and Mr. Fletcher found that 

 23 certain barrels were not usable for him. He told Mr. 

 24 Metevier about that. Mr. Metevier agreed to adjust 

 25 the arrangement such that certain barrels would be 

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 1 provided at no cost in compensation for the barrels 

 2 that Mr. Fletcher could not use. No barrels were 

 3 returned. Mr. Fletcher kept the barrels. GE 

 4 understood that Mr. Fletcher did not return the 

 5 barrels even though they were not usable to him. 

 6 After Mr. Metevier left, Mr. Varnum assumed 

 7 his responsibilities and Mr. Varnum had a somewhat 

 8 different arrangement with Mr. Fletcher. He required 

 9 Mr. Fletcher to pay for every barrel that he took. No 

 10 more concessions were made. 

 11 As a result, Mr. Fletcher, because he could 

 12 not use every barrel of scrap Pyranol -- certainly the 

 13 barrels were not of sufficient quality to use -- did 

 14 send his men out at the loading dock to test that, and 

 15 they took barrels that they thought were useful and 

 16 rejected barrels they did not find useful, and GE 

 17 understood that not all of the barrels that it wanted 

 18 Mr. Fletcher to take were usable by him. It certainly 

 19 understood that during the time with Mr. Metevier 

 20 since Mr. Metevier made adjustments to compensate for 

 21 unusable barrels. 

 22 After Mr. Varnum there was a period of time 

 23 in which Mr. Fletcher had a contractor take barrels -- 

 24 a private contractor take barrels from the GE site to 

 25 Fletcher. Apparently -- and I find his letter to be 

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 1 credible on this point. At some point during the 

 2 process, the contractor he had found went out of 

 3 business and GE was able to find a contractor that Mr. 

 4 Fletcher could retain to transport the barrels. 

 5 A large number of barrels were transported 

 6 during this phase of the operation. Mr. Fletcher did 

 7 not pay for the barrels, although he was billed for 

 8 them, he did not pay for them for a substantial period 

 9 of time, and when he was confronted about this, he 

 10 made clear in a letter that the barrels were not -- 

 11 many of the barrels were not of sufficient quality to 

 12 be usable by him. 

 13 He proposed that the parties negotiate a 

 14 settlement of what is owed, or that they were willing 

 15 to go through all of the drums with your chemist 

 16 present and pay for materials such as we used to 

 17 receive in our agreement over the 12 years prior to 

 18 the last three years. And he said, we shall expect 

 19 freight from your place to Milford and we shall ask 

 20 for freight for returning what is necessary to return 

 21 to you. 

 22 No barrels were, in fact, returned as a 

 23 result of this complaint. GE did not want the barrels 

 24 back. GE investigated the matter. It had samples -- 

 25 representative samples taken of scrap Pyranol from its 

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 1 own scrap Pyranol area. They were analyzed by 

 2 Monsanto and that testing tended to substantiate Mr. 

 3 Fletcher's complaints about the unacceptable quality 

 4 of the barrels. GE agreed to write off the debt 

 5 because in comparison to taking the barrels and 

 6 disposing of them, it was more profitable for GE to 

 7 write off the debt than to do that. 

 8 What are we to glean from the nature of this 

 9 agreement? As I have suggested, the agreement was for 

 10 Mr. Fletcher to take the barrels away. Take barrels 

 11 when GE had them and Mr. Fletcher wanted them. The 

 12 arrangement did not require Mr. Fletcher to use the 

 13 barrels of scrap Pyranol in any manufacturing process. 

 14 They did not prohibit Mr. Fletcher from disposing of 

 15 the barrels. 

 16 GE did not -- in entering into the 

 17 arrangement -- desire that the barrels be disposed of. 

 18 That was not the objective of the arrangement. The 

 19 objective was to be rid of the barrels. So what does 

 20 all this evidence tell me about what GE understood 

 21 when it entered into the arrangement with Mr. 

 22 Fletcher? What it tells me is that GE understood that 

 23 while Mr. Fletcher hoped to make productive use of 

 24 some of the Pyranol, he clearly could not make 

 25 productive use of much of it. That GE understood when 

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 1 it entered into this relationship that the Pyranol 

 2 varied so much in quality that it could -- much of it 

 3 was not usable for any purpose, although some of it 

 4 could be used by mixing it with better quality 

 5 Pyranol, still there would be much of it that would 

 6 not be usable and GE understood this from the 

 7 beginning. 

 8 This was a waste product. GE knew it. GE 

 9 believed that some of it might be able to be used by 

 10 Mr. Fletcher, but the vast bulk of it would not have 

 11 been usable by him and would have to be disposed of. 

 12 I think Mr. Abbe's statement best captures 

 13 what GE really understood about this matter -- and I 

 14 don't have the exact quote in front of me, but I think 

 15 I have it pretty close. We just hope that he was able 

 16 to use some of it, and the balance of it he could 

 17 dispose of it. I think that is really what this case 

 18 is all about, that GE understood from the beginning 

 19 here, and therefore, in my judgment, GE did otherwise 

 20 arrange for the disposal of the scrap Pyranol when it 

 21 entered into its relationship with Mr. Fletcher. And 

 22 just to emphasize these key points in my mind, Mr. 

 23 Metevier knew that GE -- excuse me -- that Fletcher 

 24 could not use all of the scrap Pyranol because Mr. 

 25 Fletcher told him and Mr. Metevier made adjustments 

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 1 for it. After Mr. Varnum was out at the site -- 

 2 excuse me. During the time Mr. Varnum was in charge, 

 3 GE knew that Mr. Fletcher could not use all of the 

 4 scrap Pyranol that it was producing and wanting him to 

 5 take because it sent out people to test it when they 

 6 took the samples and they took some and rejected 

 7 others. 

 8 And yet in the period that followed GE 

 9 shipped large quantities of Pyranol that was so 

 10 severely contaminated that it could not be used even 

 11 though it understood from the transactions during the 

 12 Varnum and the Metevier period that not all of this 

 13 Pyranol was usable by Mr. Fletcher, and I think all of 

 14 that suggests to me that -- and does prove and -- 

 15 frankly, I don't think it's a particularly difficult 

 16 case. The evidence is quite clear to me and proves to 

 17 me quite strongly that GE understood that this was an 

 18 arrangement with Mr. Fletcher that would result in Mr. 

 19 Fletcher disposing of substantial quantities of the 

 20 scrap Pyranol at the site, and he did so. 

 21 Does anyone need me to make any additional 

 22 specific findings or rulings? I'm happy to spend as 

 23 much time as anyone wants me to going over the 

 24 specific requests for findings and rulings, but I 

 25 believe I've addressed most of them through my oral 

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 1 decision today. 

 2 If I have not, though, and people want me to 

 3 address anything, speak up now. I'll be happy to go 

 4 through it and tell you what I find or don't find. 

 5 Does the government want me to do any of that? 

 6 MR. FLYNN: No, your Honor. 

 7 THE COURT: Does the defendant want me to do 

 8 any of that? 

 9 MR. BIAGETTI: No. 

 10 THE COURT: Okay. So I think that ends this 

 11 phase of the case. Why don't I suggest that the 

 12 parties take, say, 30 days and reassess your 

 13 positions, and if you aren't able to reach a 

 14 settlement within 30 days, come back to me and propose 

 15 a schedule for the completion of any issues that need 

 16 to be completed in the case. All right? 

 17 Anything else we need to deal with today? 

 18 Again, I want to thank the parties. I know that it 

 19 can be somewhat brutal trying to deal with me when I 

 20 go through this process. I want you to understand 

 21 that in my view I only push people that I respect. If 

 22 I don't respect you, if I don't think you can give me 

 23 useful information, I just don't talk to you. So to 

 24 some extent the more I push you, the more respect I 

 25 have for you and your views. And I think this case 

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 1 was well presented, and I do feel that every possible 

 2 argument on either side was developed and fully 

 3 tested, and that's really what you should do in a 

 4 trial like this when the parties want me to confront 

 5 and resolve a question like the one that you've 

 6 presented to me. So I think you've all done good 

 7 work. I appreciate your work and the help that you've 

 8 given me. 

 9 I hope that this decision allows you to move 

 10 on and find a way to resolve the case, but if you 

 11 don't, come back and see me in another month and we'll 

 12 see where we go from there. 

 13 (Conclusion of hearing at 4:10 p.m.) 

 14 

 15 C E R T I F I C A T E 

 16 

 17 I, Susan M. Bateman, do hereby certify 

 18 that the foregoing transcript is a true and accurate 

 19 transcription of the within proceedings, to the best 

 20 of my knowledge, skill, ability and belief. 

 21 

 22 Submitted: 5-11-09 /s/ Susan M. Bateman 

 SUSAN M. BATEMAN, CSR, RPR, CRR 

 23 

 24 

 25 

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