PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

PCS NITROGEN INCORPORATED, 

successor through purchase, name

change and merger to Columbia

Nitrogen Corporation,

Defendant and Third Party

Plaintiff-Appellant,

v.

ASHLEY II OF CHARLESTON LLC,

Plaintiff-Appellee,

ROSS DEVELOPMENT CORPORATION; J

HOLCOMBE ENTERPRISES LP;

KONINKLIJKE DSM NV; DSM

CHEMICALS OF NORTH AMERICA  No. 11-1662

INCORPORATED; ROBIN HOOD

CONTAINER EXPRESS INCORPORATED;

ALL WASTE TANK CLEANING

INCORPORATED, f/k/a PSC Container

Services, LLC, now known as

QualaServices, LLC; J HENRY

FAIR, JR.,

Third Party Defendants-Appellees,

and

JAMES H. HOLCOMBE; CITY OF

CHARLESTON, SOUTH CAROLINA,

Third Party Defendants. 
ROSS DEVELOPMENT CORPORATION, 

Third Party Defendant-Appellant,

v.

PCS NITROGEN INCORPORATED,

successor through purchase, name

change and merger to Columbia

Nitrogen Corporation,

Defendant and Third Party

Plaintiff-Appellee,

and

ASHLEY II OF CHARLESTON LLC,

Plaintiff,  No. 11-2087

J HOLCOMBE ENTERPRISES LP;

KONINKLIJKE DSM NV; ROBIN

HOOD CONTAINER EXPRESS

INCORPORATED; DSM CHEMICALS OF

NORTH AMERICA INCORPORATED;

ALL WASTE TANK CLEANING

INCORPORATED; J HENRY FAIR, JR.;

CITY OF CHARLESTON, SOUTH

CAROLINA; JAMES H. HOLCOMBE,

Third Party Defendants,

PSC CONTAINER SERVICES LLC,

Defendant. 

2 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON
ROBIN HOOD CONTAINER EXPRESS 

INCORPORATED,

Third Party Defendant-Appellant,

v.

PCS NITROGEN INCORPORATED,

successor through purchase, name

change and merger to Columbia

Nitrogen Corporation,

Defendant and Third Party

Plaintiff-Appellee,

ASHLEY II OF CHARLESTON LLC,

Plaintiff-Appellee,

ROSS DEVELOPMENT CORPORATION; J  No. 11-2099

HOLCOMBE ENTERPRISES LP;

KONINKLIJKE DSM NV; DSM

CHEMICALS OF NORTH AMERICA

INCORPORATED; ALL WASTE TANK

CLEANING INCORPORATED; J HENRY

FAIR, JR.,

Third Party Defendants-Appellees,

and

CITY OF CHARLESTON, SOUTH

CAROLINA; JAMES H. HOLCOMBE,

Third Party Defendants,

PSC CONTAINER SERVICES LLC,

Defendant. 

PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON 3
J HOLCOMBE ENTERPRISES LP; 

J HENRY FAIR, JR.,

Third Party

Defendants-Appellants,

v.

PCS NITROGEN INCORPORATED,

successor through purchase, name

change and merger to Columbia

Nitrogen Corporation,

Defendant and Third Party

Plaintiff-Appellee,

ASHLEY II OF CHARLESTON LLC,

Plaintiff-Appellee,

ROBIN HOOD CONTAINER EXPRESS  No. 11-2104

INCORPORATED; ROSS DEVELOPMENT

CORPORATION; KONINKLIJKE DSM

NV; DSM CHEMICALS OF NORTH

AMERICA INCORPORATED; ALL

WASTE TANK CLEANING

INCORPORATED,

Third Party Defendants-Appellees,

and

CITY OF CHARLESTON, SOUTH

CAROLINA; JAMES H. HOLCOMBE,

Third Party Defendants,

PSC CONTAINER SERVICES LLC,

Defendant. 

4 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON
ASHLEY II OF CHARLESTON LLC, 

Plaintiff-Appellant,

v.

PCS NITROGEN INCORPORATED,

successor through purchase, name

change and merger to Columbia

Nitrogen Corporation,

Defendant and Third Party

Plaintiff-Appellee,

ROBIN HOOD CONTAINER EXPRESS

INCORPORATED; ROSS DEVELOPMENT

CORPORATION; KONINKLIJKE DSM  No. 11-2297 NV; DSM CHEMICALS OF NORTH

AMERICA INCORPORATED; ALL

WASTE TANK CLEANING

INCORPORATED; J HOLCOMBE

ENTERPRISES LP; J HENRY FAIR, JR.,

Third Party Defendants-Appellees,

and

CITY OF CHARLESTON, SOUTH

CAROLINA; JAMES H. HOLCOMBE,

Third Party Defendants,

PSC CONTAINER SERVICES LLC,

Defendant. 

Appeals from the United States District Court

for the District of South Carolina, at Charleston.

Margaret B. Seymour, Chief District Judge;

C. Weston Houck, Senior District Judge.

(2:05-cv-02782-MBS)

PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON 5
Argued: December 5, 2012

Decided: April 4, 2013

Before MOTZ, KING, and DIAZ, Circuit Judges.

Affirmed by published opinion. Judge Motz wrote the opinion, in which Judge King and Judge Diaz joined.

COUNSEL

ARGUED: Brian J. Murray, JONES DAY, Chicago, Illinois,

for PCS Nitrogen Incorporated. Thomas Nolen Barefoot,

Bethesda, Maryland, for Ashley II of Charleston LLC; Capers

Gamewell Barr, III, BARR, UNGER & MCINTOSH,

Charleston, South Carolina, for J. Holcombe Enterprises LP

and J. Henry Fair, Jr.; Daniel S. McQueeney, Jr., PRATTTHOMAS WALKER, PA, Charleston, South Carolina, for

Ross Development Corporation; Timothy William Bouch,

LEATH, BOUCH & CRAWFORD, LLP, Charleston, South

Carolina, for Robin Hood Container Express, Incorporated;

Lewis Bondurant Jones, KING & SPALDING, LLP, Atlanta,

Georgia, for Koninklijke DSM NV and DSM Chemicals of

North America, Incorporated. Jason Scott Luck, SEIBELS

LAW FIRM, PA, Charleston, South Carolina, for Allwaste

Tank Cleaning, Incorporated. ON BRIEF: John B. Williams,

COZEN O’CONNOR, Washington, D.C.; Jennifer L. Swize,

Craig I. Chosiad, JONES DAY, Washington, D.C., for PCS

Nitrogen Incorporated. G. Trenholm Walker, PRATTTHOMAS WALKER, PA, Charleston, South Carolina;

Thomas M. Shelley, III, ROGERS, TOWNSEND &

THOMAS, PC, Columbia, South Carolina, for Ross Development Corporation. Amy E. Melvin, LEATH, BOUCH &

SEEKINGS, LLP, Charleston, South Carolina, for Robin

6 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON
Hood Container Express, Incorporated. Randall J. Butterfield,

John L. Fortuna, KING & SPALDING LLP, Atlanta, Georgia, for Koninklijke DSM NV and DSM Chemicals of North

America, Incorporated.

OPINION

DIANA GRIBBON MOTZ, Circuit Judge:

These appeals arise from disputes as to liability for cleanup

of hazardous substances at a former fertilizer manufacturing

site in Charleston, South Carolina. After incurring response

costs, Ashley II of Charleston, Inc., the current owner of a

portion of the site, brought a cost recovery action against PCS

Nitrogen, Inc., under the Comprehensive Environmental

Response, Compensation, and Liability Act ("CERCLA"), 42

U.S.C. §§ 9601-9675 (2006). PCS counterclaimed and also

brought third-party contribution actions against parties with

past and current connections to the site. The district court

bifurcated the case for trial. At the conclusion of the first

bench trial, it found PCS a potentially responsible party

jointly and severally liable for response costs at the site. At

the conclusion of the second bench trial, the court found some

of the other parties, including Ashley, potentially responsible

parties, each liable for an allocated portion of the site’s

response costs. PCS, Ashley, and many of the other parties

now appeal. For the reasons that follow, we affirm the judgment of the district court in all respects.

I.

A.

Congress enacted CERCLA in response to "the increasing

environmental and health problems associated with inactive

hazardous waste sites." Nurad, Inc. v. William E. Hooper &

PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON 7
Sons Co., 966 F.2d 837, 841 (4th Cir. 1992). CERCLA "was

designed to promote the timely cleanup of hazardous waste

sites and to ensure that the costs of such cleanup efforts were

borne by those responsible for the contamination." Burlington

N. & Santa Fe Ry. Co. v. United States, 556 U.S. 599, 602

(2009) (internal quotation marks omitted).

In furtherance of these goals, CERCLA allows "private parties to recover the costs of cleaning up hazardous wastes from

certain defined types of person." Axel Johnson, Inc. v. Carroll

Carolina Oil Co., 191 F.3d 409, 413 (4th Cir. 1999). A

private-party plaintiff establishes a prima facie case for cost

recovery under CERCLA by establishing that (1) the defendant is a potentially responsible person ("PRP"); (2) the site

constitutes a "facility"; (3) a "release" or a threatened release

of hazardous substances exists at the "facility"; (4) the plaintiff has incurred costs responding to the release or threatened

release of hazardous substances ("response costs"); and (5)

the response costs conform to the National Contingency Plan.

42 U.S.C. §§ 9601(9), (22), 9607(a); see ABB Indus. Sys., Inc.

v. Prime Tech., Inc., 120 F.3d 351, 356 (2d Cir. 1997).

Section 9607(a) establishes strict liability. See United

States v. Monsanto Co., 858 F.2d 160, 167 (4th Cir. 1988).

This liability under CERCLA is subject only to a few narrow

defenses and exemptions. See 42 U.S.C. § 9607(b) (defenses);

id. § 9607(o)-(r) (exemptions). Liability is, by default, joint

and several. See Monsanto, 858 F.2d at 171-72.

However, in some circumstances a PRP may mitigate the

sting of CERCLA’s imposition of joint and several liability

by apportionment or allocation of harm. See Axel Johnson,

191 F.3d at 413. Apportionment—also known as division of

damages—assigns a several share of liability to each PRP

based on "traditional and evolving principles of federal common law." Monsanto, 858 F.2d at 171-72. Under these principles, apportionment is available only when a PRP proves that

"there is a reasonable basis for determining the contribution

8 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON
of each cause to a single harm." Burlington Northern, 556

U.S. at 614 (quoting Restatement (Second) of Torts

§ 433A(1)(b) (1963-64)).

In contrast, allocation of harm—also known as contribution

—is available to any party sued under § 9607(a), and allows

the party to "seek contribution from any other person who is

liable or potentially liable under [§] 9607(a)." 42 U.S.C.

§ 9613(f). The district court may then allocate several liability

for "response costs among liable parties using such equitable

factors as the court determines are appropriate." Id.; see Minyard Enters., Inc. v. Se. Chem. & Solvent Co., 184 F.3d 373,

385 (4th Cir. 1999).1

B.

Central to this CERCLA case is the history of the site at

issue here—approximately forty-three acres located in

Charleston, South Carolina. As a result of decades of phosphate fertilizer production, the westernmost thirty-four acres

1

In addition to the fact that apportionment rests on causation principles

and allocation rests on equity principles, the two also differ in function.

Although both technically negate CERCLA’s joint liability by assigning

shares of liability, see Minyard Enters., 184 F.3d at 385; Monsanto, 858

F.2d at 171-72, they differ in how they determine liability for so-called

"orphaned" shares—those shares of "liability attributable to a party who

is insolvent, cannot be located, or cannot be identified," Lyondell Chem.

Co. v. Occidental Chem. Corp., 608 F.3d 284, 303 (5th Cir. 2010). If a

court apportions harm, the party that incurred the response costs bears the

burden of orphaned shares because the apportioned orphan share is necessarily unrecoverable. See Burlington Northern, 556 U.S. at 605, 618-19

(upholding apportionment that left over ninety percent of the harm as an

orphaned share ultimately borne by the government). But when a court

allocates shares it retains the equitable discretion to allocate orphaned

shares (or re-allocate newly orphaned shares) to solvent, available PRPs,

thus shifting the burden of orphaned shares from the party that incurs the

response costs. See Lyondell Chem. Co., 608 F.3d at 303; Pinal Creek

Group v. Newmont Mining Corp., 118 F.3d 1298, 1303 (9th Cir. 1997),

overruling on other grounds recognized by Kotrous v. Goss-Jewett Co. of

N. Cal., 523 F.3d 924, 927 (9th Cir. 2008). 

PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON 9
of the site require remediation of soils contaminated with

arsenic, lead, and other hazardous substances. The evidence

presented at the two bench trials established the following

facts.

1.

From 1884 to the early 1900s, seven phosphate fertilizer

plants operated in close proximity to the site and provided

potential sources for pyrite waste that may have been disposed of on the site prior to 1906.

Planters Fertilizer & Phosphate Company, now known as

Ross Development Corporation, purchased the site in 1906.

Planters manufactured phosphate fertilizer at the site by reacting sulfuric acid with phosphate rock. Planters produced the

sulfuric acid for the process on-site, and stored the acid in

lead-lined tanks. Prior to the 1930s, Planters used pyrite ore

as the primary fuel for its sulfuric acid production. The burning of pyrite ore generated a pyrite slag byproduct containing

high concentrations of arsenic and lead. Planters spread the

slag byproduct to stabilize roads on the site. This accounts for

the vast majority of arsenic and lead contamination found on

the site today.

Planters continued operating its fertilizer production plant

on the site until 1966. During that time, Planters constructed

and repaired several minor buildings and, after a fire

destroyed a significant portion of its original acid plant, constructed a modernized acid plant. On June 30, 1966, Planters

sold the site—including the plant and its equipment—to

Columbia Nitrogen Corporation ("Old CNC").

Old CNC continued operations of the acid and fertilizer

plants until 1970 and 1972, respectively. Although Old CNC

did not use pyrite ore, its superphosphate fertilizer production

generated dust that contained elevated levels of arsenic and

lead, and contributed to arsenic and lead soil contamination

10 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON
on the site. During its operations, Old CNC constructed a new

granulation plant and converted the former granulation plant

into storage.

In April 1971, a wind storm extensively damaged many

buildings on the site, including the acid plant, and dispersed

contaminated materials across the site. Old CNC chose not to

repair, and instead demolished, the damaged acid plant. In the

process, Old CNC disturbed the subsurface soil to a depth of

at least two feet. By October 1972, Old CNC had ceased all

fertilizer production on the site.

The site remained inactive until 1977, when Old CNC

began to dismantle the remaining structures, a process completed in January 1981. All told, Old CNC’s construction and

demolition activities between 1971 and 1981 affected nearly

eighty percent of the area of contaminated soils that needs to

be remediated as part of the site’s cleanup. In May 1985, Old

CNC sold the site to James H. Holcombe and J. Henry Fair

(collectively "Holcombe and Fair"2). But in doing so, Old

CNC apparently did not transfer any of its corporate liabilities

for past actions on the site; thus, as the parties agree, Old

CNC—if still in existence—would be a PRP with respect to

the site. See infra § II.A.

2.

Old CNC did not limit its fertilizer production to the site.

Rather, while owning the site, Old CNC also owned and operated an ammonia and nitrogen fertilizer plant in Augusta,

Georgia. In 1986, over a year after Old CNC had sold its

2Holcombe formed Holcombe Enterprises, Inc., on December 17, 1997

and conveyed his share of the site to Holcombe Enterprises six days later.

Holcombe, Fair, and Holcombe Enterprises are all parties to this appeal,

and were treated as one entity by the district court. For the sake of simplicity, we identify the owners of the site as Holcombe and Fair both before

and after Holcombe’s conveyance of his share of the property to Holcombe Enterprises. 

PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON 11
Charleston site, Old CNC’s parent corporations, Koninklijke

DSM N.V. and DSM Chemicals North America (collectively

"DSM Parties"), decided to shut down Old CNC to benefit

from a $100 million tax advantage in the Netherlands. To do

so, Old CNC sought a buyer for certain "Assets" and its "Acquired Business," including its Augusta plant and operation.

Andlinger & Company, Inc., a firm specializing in the acquisition of businesses, incorporated CNC Corp. ("New CNC")

to purchase Old CNC’s "Assets" and "Acquired Business."

Old CNC and New CNC entered into a series of agreements, and the acquisition closed on November 6, 1986.

Under the Acquisition Agreement, New CNC purchased certain "Assets" and the "Acquired Business" for $50 million, an

approximately sixty percent discount from book value. In

exchange for an additional $5 million discount, New CNC

accepted the acquired business and assets "as is." After closing, New CNC immediately changed its name to "Columbia

Nitrogen Corporation" –- the same name under which Old

CNC operated. At the same time, Old CNC initiated the process of liquidation and dissolution.

After the acquisition, New CNC continued producing

ammonia- and nitrogen-based fertilizers at the Augusta plant.

By virtue of a series of mergers and acquisitions, PCS Nitrogen, Inc., is a successor to New CNC. Neither New CNC nor

PCS ever owned or operated any portion of the Charleston

site at issue in this appeal.

3.

Meanwhile, Holcombe and Fair, who had acquired the

Charleston site from Old CNC in 1985, were unaware of any

contamination at the site. They first became aware of the presence of hazardous substances at the site in 1990.

Holcombe and Fair intended to subdivide and lease the site,

and the record contains no evidence that Holcombe and Fair

12 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON
introduced any new hazardous substances to the site. However, even after learning of the possibility (and ultimate existence) of hazardous substances on the site, Holcombe and Fair

undertook site-wide earth-moving activities, including the

construction of a street extension, the addition of water and

sewer lines, excavation and grading, and the construction of

several detention ponds. As late as 1998, Holcombe and Fair

undertook earth-moving activities in areas with "discolored"

and "contaminated" soils, and destroyed on-site wetlands

along the Ashley River. However, they also added a four-tosix inch limestone run of crusher cover over the majority of

the site, which mitigated risks of acute exposure to the site’s

contaminated soils.

During their ownership, Holcombe and Fair subdivided and

conveyed several parcels from the original site. First, in

December 1987, Holcombe and Fair sold three acres of the

site to Max and Marlene Mast. The Masts sold their parcel to

Allwaste Tank Cleaning, Inc., in August 1988. Allwaste operated a shipping container cleaning and storage business and in

1991 leased two additional acres from Holcombe and Fair for

storage. As part of its operations, Allwaste utilized an underground sump system to capture wastewater generated by the

container-cleaning process and pump it into a treatment system. Allwaste allowed the sumps to deteriorate during its

ownership of the parcel to the extent that the sumps presented

a threat of a release of hazardous substances. Although Allwaste did not introduce arsenic or lead to its parcel, both contaminate the soils in its parcel. Allwaste still owned the parcel

at the commencement of this action.

In December 1990, Holcombe and Fair contracted to sell

two acres of the site to Robin Hood Container Express

("RHCE"). In December 1991, RHCE directed and paid for

the excavation of a 1380-cubic-foot pond, two asphalt driveways, and extended sewer and water lines on the site. Contractors for RHCE also stripped six inches of topsoil and

graded and proof-rolled the land. A month later, Holcombe

PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON 13
and Fair conveyed the two-acre parcel to RHCE’s president,

Robin Hood, who leased it to RHCE to operate a dropyard.

During its tenure, RHCE filled in the pond, and limestone run

of crusher now covers the entire parcel. Although RHCE did

not introduce any arsenic or lead to its leasehold, both contaminate its leasehold’s soil. Robin Hood continued to own,

and RHCE continued to lease, this parcel at the commencement of this action.

In December 1991, Holcombe and Fair conveyed the street

extension they had constructed, totaling 1.28 acres, to the City

of Charleston by quitclaim deed. The City remains the owner

of the street extension today.

Finally, in November 2003, Holcombe and Fair sold their

remaining 27.62 acres of the site to Ashley II of Charleston,

Inc., for $2.7 million. Ashley purchased the site to include it

as a portion of its Magnolia Development—a sustainable,

mixed-use project. As with other parcels within the project,

Ashley purchased the site with knowledge of, and the intent

to remediate, the contaminated soils.

By the time of Ashley’s ownership, the run of crusher

cover had degraded, leaving contaminated soil exposed in

many areas. For several years, Ashley allowed a trash pile to

accumulate on its parcel.

In February 2007—well after the commencement of this

action—Ashley contracted with Allwaste to purchase Allwaste’s three-acre parcel. Ashley engaged in extensive prepurchase environmental assessments of the parcel, and Allwaste conveyed the parcel to Ashley in May 2008.

In investigating and remediating the site, Ashley to date has

incurred response costs totaling at least $194,000.3

3Since 1998, state and federal experts have comprehensively investigated environmental conditions at the site, and have documented arsenic14 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON
C.

On September, 26, 2005, Ashley filed this action, seeking

a declaratory judgment that PCS was jointly and severally liable for response costs as a PRP for the site, and recovery of

response costs already incurred. See 42 U.S.C.

§ 9607(a)(4)(B). Ashley contended that PCS was a successor

corporation to Old CNC, and thus liable as a PRP in Old

CNC’s stead.

PCS denied liability as a successor corporation to Old

CNC, and in the alternative filed a contribution counterclaim

under 42 U.S.C. § 9613(f) against Ashley and third-party

claims against Ross, the DSM Parties, Holcombe and Fair,

Allwaste, RHCE, and the City of Charleston. Those parties in

turn filed counter- and cross-claims against one another under

§ 9613(f), and also sought determination of their rights to

future cost recovery and contribution.

The district court bifurcated the proceedings. The first trial

would determine if PCS was liable to Ashley under § 9607(a).

If so, the second trial would allocate the ultimate responsibility of each party for response costs at the site under § 9613(f).

On September 28, 2007, after a bench trial on PCS’s liability, the court held that PCS was a corporate successor to Old

CNC, and thus jointly and severally liable to Ashley for

response costs as a PRP for the site. A year later, the presiding

and lead-contaminated soils and low soil pH conditions across the site, as

well as two carcinogenic polycyclic aromatic hydrocarbon "hotspots."

Although EPA considered undertaking removal actions during Holcombe

and Fair’s ownership of the site, it did not do so. After Ashley purchased

the site, it asked EPA to notify it if the agency desired "specific cooperation, assistance, access or the undertaking of any reasonable steps with

respect to the Site." In October 2005, EPA determined that the site qualified for a non-time-critical removal action and described its preferred

removal alternatives. To date, however, EPA has not ordered Ashley to

take any remedial actions on the site. 

PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON 15
judge disqualified himself from further participation in the

case, and the case was reassigned to another judge. On June

2, 2009, the successor judge denied PCS’s motion to vacate

the original judge’s order as to PCS’s liability. Shortly thereafter, the court granted summary judgment to the DSM Parties, holding them not liable because "no basis existed" for

imputing Old CNC’s acts to them.

Then, between October 2009 and January 2010, the district

court held a sixteen-day bench trial on the allocation phase.

The court ultimately allocated liability for past and future

response costs at the site to PCS, Ashley, Ross, Holcombe

and Fair, RHCE, and Allwaste in various amounts.

These appeals followed. On appeal, no party disputes that

Ashley incurred response costs for the cleanup of hazardous

substances at the site that were consistent with the National

Contingency Plan. Rather, the parties solely dispute whether

and to what amount each is liable for response costs at the

site.

II.

We first address the appeals of the district court’s determinations as to which parties constitute PRPs for the site.

CERCLA defines four non-mutually exclusive classes of

PRPs liable for costs incurred in responding to a "release" of

hazardous substances at any "facility." 42 U.S.C. § 9607(a);

see Nurad, 966 F.2d at 841. These PRPs include (1) the current "owner" or "operator" of a "facility"; (2) any "person"

who "owned" or "operated" the "facility" at the time of disposal of a hazardous substance; (3) any "person" who "arranged for disposal or treatment" of hazardous substances at

the "facility"; and (4) any "person" who accepts hazardous

substances "for transport to disposal or treatment facilities,

incineration vessels or sites." 42 U.S.C. § 9607(a)(1)-(4);

Nurad, 966 F.2d at 841. The classes of PRPs have an undeni16 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON
ably broad reach. See United States v. Atl. Research Corp.,

551 U.S. 128, 136 (2007). But they nonetheless remain subject to the limitations of derivative liability inherent in corporate law. See United States v. Bestfoods, 524 U.S. 51, 62-64

(1998).

A PRP’s strict liability for response costs is subject only to

CERCLA’s limited defenses and exemptions. Axel Johnson,

191 F.3d at 413. Courts do not consider equity in determining

whether a party is a PRP. Congress, however, did provide for

equitable allocation of liability under § 9613(f) to mitigate

any inequity arising from CERCLA’s strict liability scheme.

Id. at 415.

With these principles in mind, we review the district court’s

determinations of PRP status de novo. See Pneumo Abex

Corp. v. High Point, Thomasville & Denton R.R. Co., 142

F.3d 769, 773 (4th Cir. 1998). We first consider PCS’s appeal

of the determination that it is a PRP. Then, we turn to the

multiple challenges to the determinations of the other parties’

PRP status in the second trial.

A.

The district court held that PCS is a PRP for the Charleston

site as the corporate successor to Old CNC. Although PCS

never owned or operated the site, it admits that it is a successor to New CNC, and that Old CNC—despite dissolving decades ago—would be a PRP.

Under CERCLA, successor corporations may be liable for

the actions of their predecessors. United States v. Carolina

Transformer Co., 978 F.2d 832, 837 (4th Cir. 1992). However, as at common law, a corporation that acquires the assets

of another corporation typically does not acquire its liabilities,

unless "(1) the successor expressly or impliedly agrees to

assume the liabilities of the predecessor; (2) the transaction

may be considered a de facto merger; (3) the successor may

PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON 17
be considered a ‘mere continuation’ of the predecessor; or (4)

the transaction is fraudulent." Id. at 838. In the past, we have

also recognized successor liability where "substantial continuity" exists between a predecessor and successor corporation.

Id.

The district court held PCS liable as a successor to Old

CNC under three theories. We need only address one—that

New CNC either unambiguously, or based on extrinsic evidence, assumed Old CNC’s liabilities for the site under the

1986 Acquisition Agreement. In doing so, we review the district court’s applications of contract principles de novo, and

its findings of fact with respect to extrinsic evidence for clear

error. Hendricks v. Cent. Reserve Life Ins. Co., 39 F.3d 507,

512-13 (4th Cir. 1994). Under the Acquisition Agreement’s

choice of law provision, we apply New York contract law.

New York law enforces unambiguous contracts in accordance with their plain terms. W.W.W. Assocs., Inc. v. Giancontieri, 566 N.E.2d 639, 642 (N.Y. 1990). In determining

whether a contract is ambiguous, a court must

examine the entire contract and consider the relation

of the parties and the circumstances under which it

was executed. Particular words should be considered, not as if isolated from the context, but in the

light of the obligation as a whole and the intention

of the parties as manifested thereby. Form should not

prevail over substance, and a sensible meaning of

words should be sought.

William C. Atwater & Co. v. Panama R.R. Co., 159 N.E. 418,

419 (N.Y. 1927). Thus, when considering isolated, potentially

conflicting provisions, so long as a contract "makes clear the

parties’ over-all intention," a court "should then choose that

construction which will carry out the plain purpose and object

of the [agreement]." Kass v. Kass, 696 N.E.2d 174, 181 (N.Y.

1998) (internal quotation marks omitted). In harmonizing pro18 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON
visions, however, "no provision of a contract should be left

without force and effect." Muzak Corp. v. Hotel Taft Corp.,

133 N.E.2d 688, 690 (N.Y. 1956).

1.

Applying these principles, the district court initially held, as

Ashley maintained, that New CNC unambiguously assumed

Old CNC’s CERCLA liabilities for the Charleston site under

the Acquisition Agreement. We cannot agree.

Section 3.4 of the Agreement, on which the district court

relied, does unambiguously transfer "[a]ll obligations required

to be performed under all court, administrative and regulatory

orders." But § 3.4 does not address, let alone unambiguously

provide, that it covers CERCLA "obligations" arising after

execution of the Agreement.

Ashley alternatively argues that New CNC unambiguously

assumed Old CNC’s CERCLA liability for the site in § 3.6 of

the Agreement. This argument fares no better. All parties recognize that under § 3.6 New CNC did assume unknown,

future CERCLA liability. The liability assumed, however,

was only that "arising out of or in connection with the

Acquired Business or the Purchased Assets."

It is undisputed that the phrase "arising out of or in connection with" would transfer liabilities from businesses or assets

no longer owned by a seller in a stock sale. But typically this

phrase does not transfer such liabilities in an asset sale. See

Honeywell Int’l, Inc. v. Phillips Petroleum Co., 415 F.3d 429,

435-36 (5th Cir. 2005). The Acquisition Agreement does not

clearly establish whether the parties intended an ordinary

asset sale or an atypical asset sale that was to be treated as a

stock sale. Rather, the Agreement ambiguously provides that

New CNC "assume[s] all obligations and liabilities relating to

the Acquired Business . . . as if [Old CNC] were to sell and

[New CNC] were to purchase the stock of [Old CNC] on the

PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON 19
open market." This ambiguity prevents us from concluding

that under the Agreement New CNC unambiguously assumed

Old CNC’s CERCLA liabilities for the Charleston site.

This ambiguity also defeats PCS’s contention that the

Acquisition Agreement clearly provides that New CNC did

not assume Old CNC’s CERCLA liabilities for the site. For

PCS can point to no language in the Agreement which clarifies that, even if this were an atypical stock-like asset sale,

New CNC assumed no CERCLA liabilities for the site.

At its outset, § III of the Agreement does, as PCS contends,

limit the transfer of liabilities and obligations to New CNC to

those "relating to the Acquired Business and Purchased

Assets." But PCS’s heavy reliance on the narrowness of this

"relating to" language at the beginning of § III ignores language at the end of that same section that provides that transferred liabilities include "without limitation, the liabilities and

obligations described below" in §§ 3.1-3.7. Among the liabilities "described below" are those in § 3.4, which provides that

New CNC will assume not only the certain obligations "relating to the Acquired Business and Purchased Assets" but also

those "applicable to the Seller." Where a general provision

like that at the outset of § III conflicts with a specific provision like that in § 3.4, "the specific provision controls."

Muzak Corp., 133 N.E.2d at 690.

Therefore, we cannot accept either party’s arguments that

the Agreement unambiguously determines whether New CNC

assumed Old CNC’s CERCLA liability for the site.

2.

Usually, when we conclude that a district court has erred in

holding a contract unambiguous, we must remand for a factual determination of the parties’ intent based on consideration of extrinsic evidence. See, e.g., Atalla v. Abdul-Baki,

976 F.2d 189, 195 (4th Cir. 1992). However, in this case, the

20 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON
district court has already analyzed the extrinsic evidence

offered by the parties during the bench trial, and alternatively

found based on that evidence that New CNC intended to and

did acquire CERCLA liabilities for the site under the Acquisition Agreement. We review a district court’s factual finding

as to intent for clear error. See Hendricks, 39 F.3d at 512. We

can reverse only if, after reviewing the entire record, we are

"left with the definite and firm conviction that a mistake has

been committed." Easley v. Cromartie, 532 U.S. 234, 242

(2001) (internal quotation marks omitted). This rigorous standard does not permit reversal here.

The district court based its ultimate factual finding that

extrinsic evidence established that New CNC intended to

assume CERCLA liability for the Charleston site on several

predicate findings. When considering ambiguity, the court initially found that even if the "as if" clause in the Agreement

did not evince the parties’ intent to enter into something very

akin to a stock sale, at the very least the clause was ambiguous. Thus, the court considered the extrinsic evidence and

found it demonstrated that the parties did intend to enter into

an agreement "tantamount to a stock sale," i.e., "as if" meant

"equivalent to."

In support of this critical finding, the district relied on the

abundant extrinsic evidence that New CNC knew of Old

CNC’s determination to dissolve by December 31, 1986, to

preserve the $100 million tax advantage. The court found that

New CNC’s knowledge of Old CNC’s paramount aim to avail

itself of this tax advantage supported Ashley’s contention that

the parties—Old CNC and New CNC—agreed that New CNC

would acquire "all of Old CNC that was not specifically

retained or sold to another entity." Given that no one contends

that Old CNC’s CERCLA liability for the Charleston site was

"specifically retained or sold to another entity," the court

found this evidence supported Ashley’s position that Old

CNC transferred this liability to New CNC.

PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON 21
The district court also pointed to the extrinsic evidence that

Old CNC discounted its sale price of $50 million by sixty percent from book value, and discounted an additional $5 million

from the sale price in exchange for New CNC’s assumption

of the business and assets "as is," i.e., including unknown

environmental liabilities. The court noted that New CNC’s

lawyer on the transaction testified that the principals at New

CNC were "comfortable enough with [their] due diligence to

conclude that any unknown liabilities would not exceed $5

million." (To date, of course, the CERCLA cleanup costs for

the site ($194,000) do not approach that number.) The court

concluded that the heavily discounted purchase price further

reduced by the $5 million discount for acceptance "as is" constituted additional extrinsic evidence that New CNC acquired

"all of Old CNC that was not specifically retained or sold to

another entity," i.e., New CNC acquired CERCLA liability

for the Charleston site.

Finally, the court found that New CNC intended to acquire

"substantially all" of Old CNC—including its environmental

liabilities—evidenced by two other agreements that New

CNC entered into at the same time as the Acquisition Agreement. One of these agreements governed future advances, and

the other contained guarantees signed by the chairman of New

CNC. In both, New CNC stated that it was purchasing "substantially all" of Old CNC’s liabilities. The court noted that

these contemporaneous statements by New CNC "contradict[ed]" its after-the-fact litigation position as to the limited

nature of the liabilities acquired.

Based on these facts, the court found that the parties

intended to and in the Acquisition Agreement did transfer all

of Old CNC’s assets and liabilities not explicitly retained or

sold to another entity, including Old CNC’s latent CERCLA

liabilities for the site.

PCS maintains that the district court clearly erred in so

finding. PCS first contends that, contrary to the district court’s

22 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON
conclusions, Old CNC’s foremost intent to dissolve for tax

benefit purposes and its agreement to discount its price if New

CNC assumed the assets "as is" are "irrelevant" as to the

actual scope of the liabilities transferred. That characterization

seems to us to be an overstatement. While these facts are not

dispositive, the district court could certainly find them relevant. PCS also points to evidence that after the sale Old CNC

never transferred to New CNC records relating to the site

(including those regarding environmental contamination); that

New CNC was so cautious about assuming environmental liabilities that it did not acquire the land underlying the Augusta

plant; and that some of the parties involved in the transaction

testified that New CNC only intended to acquire the Augusta

plant and operations. Although these facts are helpful to

PCS’s position, none require a finding in its favor.

Finally, PCS contends that, although Recital B describes

the Agreement "as if" it were a stock sale, at the time the

Agreement was executed witnesses at trial "agreed" that the

sale transferred only assets. If the undisputed evidence at trial

had established such contemporaneous "agreement" between

Old CNC and New CNC, then PCS might well have been

entitled to judgment. But the trial evidence did not establish

this "agreement." In fact, only PCS’s witnesses "agreed" on

this point, and the district court was free to weigh their testimony against the contrary, above-outlined evidence offered

by Ashley.

This is not to say PCS did not present evidence from which

the district court could have resolved the Agreement’s

ambiguity in its favor. But Ashley presented contrary evidence supporting its view as to the meaning of the ambiguous

contract language, and the district court, as fact finder, found

in favor of Ashley. We cannot conclude that the court clearly

erred in doing so. Here, as in many other cases, "both the

intrinsic and extrinsic evidence of intended reach of the agreement might have supported a contrary finding." See Brown v.

Balt. & Ohio R.R. Co., 805 F.2d 1133, 1140 (4th Cir. 1986).

PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON 23
But we are not "left with the definite and firm conviction that

a mistake has been committed." Easley, 532 U.S. at 242

(internal quotation marks omitted). Accordingly, we must

affirm the judgment of the district court holding that in the

Agreement New CNC assumed Old CNC’s CERCLA liabilities for the site and that PCS is therefore a PRP as a successor

to Old CNC’s CERCLA liability for the site.4

B.

Next, we turn to the appeals of other parties challenging the

district court’s determinations that they too constituted PRPs.

As the plaintiff in the allocation action under 42 U.S.C.

§ 9613(f), PCS bore the burden of proving that another party

was a PRP under § 9607(a). See Minyard Enters., 184 F.3d at

385. We consider each defendant’s challenge to PRP status in

turn, reviewing the district court’s ultimate determinations of

PRP status de novo, and its factual findings underlying those

determinations for clear error.

1.

The district court held that Holcombe and Fair are PRPs as

owners of the site at the time of disposal. See 42 U.S.C.

§ 9607(a)(2). The court based its holding on its factual finding

that Holcombe and Fair’s earth-moving and construction

4For the reasons well stated by the successor judge in her written opinion, we reject PCS’s contention that we should vacate the judgment of her

predecessor to remedy that court’s asserted violation of 28 U.S.C.

§ 445(a). We also reject PCS’s contention that the district court erred in

granting summary judgment to the DSM Parties on PCS’s contribution

claims for alleged derivative CERCLA liability for the acts of Old CNC.

Before the district court, PCS merely argued that veil-piercing and single

business enterprise theories rendered the DSM Parties liable. The district

court rejected both contentions. On appeal, PCS contends that the "amalgamation" theory renders the DSM Parties liable. See, e.g., Kincaid v.

Landing Dev. Corp., 344 S.E.2d 869, 874 (S.C. Ct. App. 1986). PCS

waived this argument by failing to raise it before the district court. See

Holland v. Big River Minerals Corp., 181 F.3d 597, 605 (4th Cir. 1999).

24 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON
activities redistributed already-contaminated soils, causing a

disposal of hazardous substances on the site.

Holcombe and Fair do not challenge the legal basis for the

district court’s conclusion. Indeed, Holcombe and Fair accept

that past owners or operators of a facility are liable for "secondary disposals"—that is, the movement or dispersal of

already-once-disposed hazardous substances through earthmoving or construction activities—that occur during their

ownership or operation of the facility. See Tanglewood E.

Homeowners v. Charles-Thomas, Inc., 849 F.2d 1568, 1573

(5th Cir. 1988) ("[CERCLA’s] definition of disposal does not

limit disposal to a one-time occurrence—there may be other

disposals when hazardous materials are moved, dispersed, or

released during landfill excavations and fillings."); see also

Redwing Carriers, Inc. v. Saraland Apartments, 94 F.3d 1489,

1510 (11th Cir. 1996) (same); Kaiser Aluminum & Chem.

Corp. v. Catellus Dev. Corp., 976 F.2d 1338, 1342-43 (9th

Cir. 1992) (same); cf. Westfarm Assocs. Ltd. P’ship v. Washington Suburban Sanitary Comm’n, 66 F.3d 669, 680-81 (4th

Cir. 1995) (refusing to limit "multiple release" disposals to

non-migrating hazardous materials); Nurad, 966 F.2d at 844-

46 (interpreting "disposal" broadly to include passive acts,

such as leaking or spilling).

Instead, Holcombe and Fair challenge the district court’s

finding that a secondary disposal actually occurred during

their ownership of the site. Holcombe and Fair argue that the

court clearly erred because PCS offered no "discrete proof"

that Holcombe and Fair actually moved or dispersed contaminated soils during their earth-moving activities. At best, Holcombe and Fair contend, the evidence demonstrates only that

a disposal "probably" occurred during their ownership of the

site.

To be sure, PCS presented no direct evidence that Holcombe and Fair moved or dispersed any contaminated soils.

However, "CERCLA does not require a smoking gun." NiagPCS NITROGEN INC. v. ASHLEY II OF CHARLESTON 25
ara Mohawk Power Corp. v. Chevron U.S.A., Inc., 596 F.3d

112, 136 (2d Cir. 2010). Instead, "CERCLA liability may be

inferred from the totality of the circumstances [and] need not

be proven by direct evidence." Tosco Corp. v. Koch Indus.,

Inc., 216 F.3d 886, 892 (10th Cir. 2000); see also Franklin

Cnty. Convention Facilities Auth. v. Am. Premier Underwriters, Inc., 240 F.3d 534, 547 (6th Cir. 2001).5

 Thus, as with

any other factual finding, we are bound to affirm any inference of CERCLA liability if "plausible in light of the record

viewed in its entirety." See Davis v. Richmond, Fredericksburg & Potomac R.R. Co., 803 F.2d 1322, 1327 (4th Cir.

1986) (internal quotation marks omitted).

The district court heard evidence showing that Holcombe

and Fair engaged in extensive grading and construction that

affected at least 27.9% of the site during their ownership, and

that even superficial earth-moving activities such as grading

can redistribute contaminated soils. Considering the evidence

of widespread contamination across the site, the court’s inference that Holcombe and Fair’s construction activities at some

point effected a disposal is certainly plausible.

Accordingly, we affirm both the court’s finding that a disposal occurred during Holcombe and Fair’s ownership of the

site, and its holding that Holcombe and Fair are therefore

PRPs for the site under 42 U.S.C. § 9607(a)(2).

5Holcombe and Fair rely on Redwing Carriers for their contention that

a district court needs "discrete proof" to find that a secondary disposal

occurred. But in Redwing Carriers the Eleventh Circuit merely held that

"the only reasonable inference" from the evidence presented did not

include disposal, "[n]o matter how broadly the term is defined." 94 F.3d

at 1510-12. The court did not require "direct evidence" of movement or

dispersal of contaminated soil, but just evidence that would support such

an inference. Such evidence was absent in Redwing Carriers, but is present here. 

26 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON
2.

The district court held that RHCE is a PRP for the site as

a current operator. See 42 U.S.C. § 9607(a)(1). On appeal,

RHCE concedes that it is a current operator,6 but challenges

its PRP status on several grounds—all unavailing.

Most fundamentally, RHCE argues that its leasehold is not

"part of the property for which Ashley sued PCS to remediate." RHCE Br. at 1, 25. This argument misunderstands CERCLA. Whether RHCE’s leasehold is "part of the property for

which Ashley sued PCS to remediate" is simply irrelevant.

The relevant question is whether RHCE’s leasehold is part of

a "facility" as defined by CERCLA. See, e.g., 42 U.S.C.

§ 9607(a)(1) (making liable "the owner and operator of a . . .

facility").

CERCLA defines "facility" to include "any site or area

where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located." Id.

§ 9601(9). The definition is not predicated, as RHCE seems

to believe, on the area targeted for remediation. Instead, the

statutory definition indicates "that the bounds of a facility

should be defined at least in part by the bounds of the contamination." United States v. Twp. of Brighton, 153 F.3d 307, 313

(6th Cir. 1998); see Nurad, 966 F.2d at 842-43 (holding a "facility" includes that portion of a larger property "in and

around the [leaking] storage tanks"). The district court did not

err in finding on the basis of the evidence before it that

RHCE’s leasehold is contaminated as part of a pattern of

widespread contamination across the entire site. That is,

RHCE’s parcel is part of the contaminated "facility" for CERCLA’s purposes.

6The district court also held that RHCE was a PRP as an operator at the

time of disposal under § 9607(a)(2), a holding that RHCE contends constitutes clear error. We need not reach that question because RHCE does not

challenge on appeal the court’s alternative holding that RHCE is a current

operator. 

PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON 27
RHCE’s seeming suggestion that its leasehold—even

though contaminated—should be considered separately from

the rest of the site also fails. "Courts have uniformly refused

to divide widely contaminated properties . . . into separate

facilities in response to a party’s claim to be responsible for

contamination in only certain parts of the property." Axel

Johnson, 191 F.3d at 418; see also United States v. Capital

Tax Corp., 545 F.3d 525, 535 (7th Cir. 2008) ("The boundaries of [a] facility do not necessarily reflect property boundaries, and liability can extend beyond what . . . defendants

actually own." (internal citation omitted)).

In this case, fertilizer production and construction activities

widely contaminated the site, including the area of RHCE’s

leasehold. That the leasehold is less contaminated than some

of the rest of the site and would not require remediation for

its current industrial use makes no difference for purposes of

determining PRP status under CERCLA. This is so because

the hazardous substances located on RHCE’s leasehold are

not distinct from those on the rest of the site. Otherwise, an

operator of a less-contaminated leasehold, like RHCE’s, in a

multiple-parcel facility could always avoid liability for CERCLA response costs for the rest of the facility merely by demonstrating less pollution-sensitive land use on its leasehold.

This would turn § 9607(a)’s strict liability on its head, and

would improperly broaden Congress’ specific exemption from

liability for "innocent" contiguous landowners. See 42 U.S.C.

§ 9607(q).7

7RHCE’s argument that its leasehold cannot be a part of the "facility"

because EPA has neither defined the bounds of the facility nor approved

a final remediation plan for the site is similarly meritless. CERCLA does

not require EPA to have defined an area as a "facility" in order for a private party to bring a recovery action. See 42 U.S.C. §§ 9601(9), 9607(a).

And "governmental approval is not a prerequisite to private recovery for

cleanup costs." Richland-Lexington Airport Dist. v. Atlas Props., Inc., 901

F.2d 1206, 1208-09 (4th Cir. 1990). 

28 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON
Finally, although RHCE does not claim that it meets the

rigorous qualifications necessary to be exempt from PRP status as an innocent contiguous landowner under § 9607(q), it

does assert a defense from liability as an innocent landowner

under § 9607(b)(3). This defense requires a party otherwise

liable as a PRP to prove "by a preponderance of the evidence:

(1) that another party was the ‘sole cause’ of the release of

hazardous substances and the damages caused thereby; (2)

that the other, responsible party did not cause the release in

connection with a contractual, employment, or agency relationship with the defendant; and (3) that the defendant exercised due care and guarded against the foreseeable acts or

omissions of the responsible party." Westfarm Assocs. Ltd.

P’ship, 66 F.3d at 682. The district court rejected RHCE’s

assertion of this defense, holding that it failed on all three

prongs. On appeal, RHCE only challenges the court’s holdings under the first and third prongs of the defense. Because

a party must establish all three prongs of the defense, and

RHCE does not challenge the court’s determination that it

failed the second prong, we must affirm the court’s denial of

RHCE’s innocent landowner defense.

In short, because RHCE is a current operator of a leasehold

that is part of the facility at the site, we affirm the district

court’s determination that RHCE is a PRP for the site as a

current operator under 42 U.S.C. § 9607(a)(1).

3.

The district court also held Ashley to be a PRP for the site

as a current owner. See 42 U.S.C. § 9607(a)(1). In doing so,

the court rejected Ashley’s attempt to establish a bona fide

prospective purchaser ("BFPP") exemption from liability. See

id. §§ 9601(40), 9607(r)(1). On appeal, Ashley again invokes

the BFPP exemption.

In 2002, Congress enacted the BFPP exemption as one in

an array of CERCLA amendments intended "to promote the

PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON 29
cleanup and reuse of brownfields" under the Small Business

Liability Relief and Brownfields Revitalization Act

("Brownfields Act"), Pub. L. No. 107-118, 115 Stat. 2356

(2002). BFPP status exempts from CERCLA liability a party

otherwise liable simply because it is "considered to be an

owner or operator of a facility" under 42 U.S.C. § 9607(a)(1).

See 42 U.S.C. § 9607(r)(1). To qualify for the exemption, a

current owner or operator of a facility must have acquired the

facility after January 11, 2002, must "not impede the performance of a response action or natural resource restoration" at

the facility, and must establish eight criteria by a preponderance of the evidence. See id. §§ 9601(40)(A)-(H), 9607(r)(1).

The district court held that Ashley failed to establish a

number of these eight criteria. Among them is the requirement

that a current owner "exercises appropriate care with respect

to hazardous substances found at the facility by taking reasonable steps to (i) stop any continuing release; (ii) prevent any

threatened future release; and (iii) prevent or limit human,

environmental, or natural resource exposure to any previously

released hazardous substance." Id. § 9601(40)(D). The court

specifically found that Ashley failed to clean out and fill in

sumps that should have been capped, filled, or removed when

related aboveground structures were demolished, and that

Ashley did not monitor and adequately address conditions

relating to a debris pile and the limestone run of crusher cover

on the site. The court concluded that these inactions established that Ashley did not exercise appropriate care at the site.

Ashley argues that the purposes of the Brownfields Act

necessitate that courts apply a less-stringent standard of "appropriate care" and "reasonable steps" than that applied by the

district court. Otherwise, Ashley maintains, landowners will

not undertake voluntary brownfields redevelopment for fear

of becoming fully liable for cleanup costs as a result of minor

mistakes that may not even contribute to harm at the facility.

Even recognizing Congress’ clear intent to promote voluntary

30 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON
brownfields redevelopment in passing the Brownfields Act,

however, Ashley’s argument goes too far.

In particular, Ashley fails to provide a persuasive rationale

for requiring a lower level of "care" from a BFPP under

§ 9607(r)(1), than from an "innocent landowner" under

§ 9607(b)(3). Both the BFPP exemption and the innocent

landowner defense require a demonstration of "reasonable

steps." Compare 42 U.S.C. § 9601(35)(B)(i)(II), with id.

§ 9601(40)(D). Logic seems to suggest that the standard of

"appropriate care" required of a BFPP, who by definition

knew of the presence of hazardous substances at a facility,

should be higher than the standard of "due care" required of

an innocent landowner, who by definition "did not know and

had no reason to know" of the presence of hazardous substances when it acquired a facility. Compare id.

§§ 9601(40)(D), 9607(r)(1) (BFPP exemption and "appropriate care" standard), with id. §§ 9601(35), 9607(b)(3) (innocent

landowner defense and "due care" standard).

We need not here determine whether the BFPP standard of

"appropriate care" actually is higher than the standard of "due

care" mandated elsewhere in CERCLA, because in all events

"appropriate care" under § 9601(40)(D) is at least as stringent

as "due care" under § 9607(b)(3). Accord Office of Enforcement & Compliance Assurance, U.S. Envtl. Prot. Agency,

Interim Guidance Regarding Criteria Landowners Must Meet

in Order to Qualify for Bona Fide Prospective Purchaser,

Contiguous Property Owner, or Innocent Landowner Limitations on CERCLA Liability 9 (March 6, 2003) (stating that

reasonable steps required under the "appropriate care" standard establish "an approach that is consonant with traditional

common law principles and the existing CERCLA ‘due care’

requirement").

We therefore borrow standards from CERCLA’s "due care"

jurisprudence to inform our determination of what "reasonable steps" must be taken to demonstrate "appropriate care."

PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON 31
We agree with the Second Circuit that the "due care" inquiry

asks whether a party "took all precautions with respect to the

particular waste that a similarly situated reasonable and prudent person would have taken in light of all relevant facts and

circumstances." New York v. Lashins Arcade Co., 91 F.3d

353, 361 (2d Cir. 1996) (internal quotation marks omitted).

Under this standard, Ashley’s inactions clearly show that it

failed to exercise "appropriate care." For Ashley’s delay in

filling the sumps—which even Ashley’s expert admitted

should have been filled a full year before Ashley did so—

demonstrates that it did not take the "reasonable steps to . . .

prevent any threatened future release," 42 U.S.C.

§ 9601(40)(D), that "a similarly situated reasonable and prudent person would have taken," Lashins Arcade Co., 91 F.3d

at 361 (internal quotation marks omitted).

Accordingly, the district court did not err in finding that

Ashley failed to demonstrate that it exercised "appropriate

care" at the site. Because a party must establish all eight factors under 42 U.S.C. § 9601(40) to qualify for a BFPP exemption from liability, this failure mandates denial of Ashley’s

claim to BFPP exemption and affirmance of the district

court’s holding that Ashley is a PRP for the site as a current

owner under § 9607(a)(1).

III.

PCS and RHCE challenge the district court’s denial of

apportionment of harm at the site.8 Both argue that the harm

at the site is divisible and thus should be apportioned. We

8We note that some courts have held that apportionment is not available

to parties, like RHCE, sued under § 9613(f), because apportionment is a

defense to joint and several liability, and § 9613 imposes only several liability. See Redwing Carriers, 94 F.3d at 1513. Because no party raises this

argument and RCHE’s apportionment claim fails on the merits, we need

not decide the issue and assume, for purposes of this case, that RHCE may

argue for apportionment to avoid the court’s equitable allocation of harms

under § 9613(f). 

32 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON
review a district court’s determination of whether a harm is

capable of apportionment de novo, and review the factual

findings underlying such a determination for clear error. See

In re Bell Petroleum Servs., Inc., 3 F.3d 889, 902 (5th Cir.

1993).

A.

"While CERCLA does not mandate the imposition of joint

and several liability, it permits it in cases of indivisible harm."

Monsanto, 858 F.2d at 171. The Supreme Court has confirmed that "[t]he universal starting point for divisibility of

harm analyses in CERCLA cases is § 433A of the Restatement (Second) of Torts." Burlington Northern, 556 U.S. at

614 (internal quotation marks omitted); see also Monsanto,

858 F.2d at 172.

"Under the Restatement, when two or more persons acting

independently caus[e] a distinct or single harm for which

there is a reasonable basis for division according to the contribution of each, each is subject to liability only for the portion

of the total harm that he has himself caused. . . . But where

two or more persons cause a single and indivisible harm, each

is subject to liability for the entire harm." Burlington Northern, 556 U.S. at 614 (internal quotation marks and citations

omitted); see Monsanto, 858 F.2d at 171-72. Thus, PRPs can

avoid joint and several liability by establishing either that onsite harms are distinct, or that there exists "a reasonable basis

for apportioning liability" for a single harm "among responsible parties." Monsanto, 858 F.2d at 172 (citing Restatement

(Second) of Torts § 433B (1965)).

By its nature, apportionment necessarily requires a factintensive, site-specific analysis. See United States v. NCR

Corp., 688 F.3d 833, 841-42 (7th Cir. 2012); Bell Petroleum

Servs., 3 F.3d at 895-96; United States v. Alcan Aluminum

Corp., 964 F.2d 252, 269 (3d Cir. 1992). "Not all harms are

capable of apportionment, . . . and CERCLA defendants seekPCS NITROGEN INC. v. ASHLEY II OF CHARLESTON 33
ing to avoid joint and several liability bear the burden of proving that a reasonable basis for apportionment exists."

Burlington Northern, 556 U.S. at 614.

For this reason, CERCLA’s joint and several liability

scheme may be "terribly unfair in certain instances." Bell

Petroleum Servs., 3 F.3d at 897. Nonetheless, "[e]quitable

considerations play no role in the apportionment analysis,"

Burlington Northern, 556 U.S. at 615 n.9, because the availability of contribution actions under 42 U.S.C. § 9613(f) mitigates any inequity arising from the unavailability of

apportionment, see Axel Johnson, 191 F.3d at 415.

B.

The district court found that two factors contributed to the

harm at the site—the amount of hazardous substances each

PRP caused to be contributed to the site, and the amount of

soil each PRP caused to be contaminated through secondary

disposals. The court thus recognized that the harm at the site

was at least "theoretically divisible" if a defendant provided

sufficient evidence to establish a reasonable basis for apportionment based on those two factors.

At trial, PCS offered several bases for apportionment,

including (1) the amount of fill material each PRP added to

the site; (2) the volume of contaminants Planters and Old

CNC introduced to the site; (3) the period of time that Planters and Old CNC produced fertilizers on the site; (4) the percentage of soils each PRP first disturbed on the site; and (5)

the number of contaminated soil samples attributable to each

PRP. According to PCS, these bases produced consistent

results demonstrating PCS was responsible for, at most, six

percent of the harm at the site.

The district court rejected PCS’s proposed bases for apportionment. In doing so, the court identified several flaws systemic to PCS’s proposed bases for apportionment. Most

34 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON
notably, the court found PCS’s methods did not (1) provide

a reasonable estimate of the volume of soil contaminated by

secondary disposals; (2) account for the likelihood of contamination prior to 1906, and thus assumed that Planters was

responsible for all contamination prior to 1945; or (3) compensate appropriately for changes in the type and intensity of

uses and construction on the site over time.

C.

1.

On appeal, PCS first argues that the district court erred in

requiring the establishment of more than a "reasonable basis"

for apportionment, in contravention of the standard applied by

the Supreme Court in Burlington Northern. (RHCE adopts

PCS’s argument on this point.) In Burlington Northern, the

district court sua sponte apportioned the collective harm that

two railroad companies caused at a facility by multiplying

three factors: (1) the percentage of the total area of the facility

the railroads owned; (2) the percentage of time the railroads

leased their parcel to the facility operator; and (3) an estimate

of the percentage of contamination at the facility attributable

to the types of hazardous substances present on the railroads’

parcel. The court then adjusted its calculation by adding a

fifty-percent margin of error, and apportioned nine percent of

the harm at the facility to the railroads. 556 U.S. at 616-18.

After the Ninth Circuit reversed, concluding that these factors

provided an unreliable measure of harm, the Supreme Court

reversed the Ninth Circuit, and upheld the apportionment. The

Supreme Court explained that the record before the district

court provided a "reasonable basis" for the methodology it

had adopted. See id. at 617-18.

Contrary to PCS’s assertion, the district court’s denial of

apportionment here is entirely consistent with Burlington

Northern. To be sure, Burlington Northern demonstrates that

a "reasonable basis for apportionment" need not be mathematPCS NITROGEN INC. v. ASHLEY II OF CHARLESTON 35
ically precise, and may be based on the "simplest of considerations," e.g., time and land area. See 556 U.S. at 617-18; see

also NCR Corp., 688 F.3d at 842. However, Burlington

Northern neither mandates these "simplest of considerations,"

nor establishes their presumptive propriety in every case. See

NCR Corp., 688 F.3d at 842. For the factual scenario in Burlington Northern was relatively simple: "the primary pollution

at the [site] was contained in an unlined sump and an unlined

pond in the southeastern portion of the facility most distant

from the Railroads’ parcel and . . . the spills of hazardous

chemicals that occurred on the Railroad parcel contributed to

no more than 10% of the total site contamination." Burlington

Northern, 556 U.S. at 617. Only "[w]ith those background

facts in mind" did the Court conclude that the district court’s

methodology was reasonable. Id. at 617-18. Clearly, after

Burlington Northern, apportionment necessarily remains a

fact-intensive, site-specific determination. See NCR Corp.,

688 F.3d at 841-42.

Here the district court undertook precisely such a factintensive, site-specific determination. Weighing the facts in

this case, the court held that any reasonable basis for apportionment must include reliable evidence as to both the initial

disposals of hazardous substances and any secondary disposals that occurred over time. Indeed, the court distinguished

Burlington Northern on this ground, emphasizing that in Burlington Northern most of the hazardous substances were

located in unlined sumps and ponds, and that no evidence

indicated that secondary disposals significantly contributed to

the harm. The court further found that PCS’s apportionment

methodologies individually and collectively failed to provide

the evidence as to secondary disposals necessary to "establish

a reasonable basis for apportioning the harm at the Site."

Denying apportionment because a party fails to provide reliable evidence as to one of the factors informing apportionment is in no way at odds with Burlington Northern.

Indeed, as Burlington Northern confirmed, in the face of

uncertain causation of harm, "‘courts have refused to make an

36 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON
arbitrary apportionment for its own sake.’" 556 U.S. at 614-15

(quoting Restatement (Second) of Torts § 433A cmt. i (1963-

64)). An arbitrary apportionment is just what the district court

refused to make, as any apportionment without adequate evidence as to the harm caused by secondary disposals necessarily would have been arbitrary. Therefore, the district court’s

fact-intensive and site-specific analysis underlying its denial

of apportionment entirely accords with Burlington Northern.

2.

PCS and RHCE next argue that, even if the district court’s

apportionment analysis was consistent with Burlington Northern, the court erred in holding that they failed to establish a

reasonable basis for apportionment. Although the court found

that all of the proposed methods of apportionment improperly

assumed Planters’ responsibility for all harm at the site prior

to 1945, PCS and RHCE each maintain that they established

a reasonable basis for apportioning at least their individual

shares of the harm. Because PCS and RHCE are PRPs under

different CERCLA provisions, we consider their arguments

on this point separately.

a.

PCS’s assertion of individual share apportionment presents

the question of whether an owner or operator at the time of

disposal under § 9607(a)(2) must provide a reasonable basis

to apportion all of the harm, or only its share of the harm, to

avoid joint and several liability.

Neither we nor the Supreme Court has ever before considered the question. Contrary to PCS’s suggestion, Burlington

Northern provides no guidance. The district court there apportioned all of the harm, because, in that case, all harm not

caused by the railroads was necessarily caused by the longtime operator of the facility. See Burlington Northern, 556

U.S. at 606.

PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON 37
Nor do traditional and evolving standards of common law

provide clear guidance on the issue. Compare Restatement

(Second) of Torts § 433A(1)(b) (suggesting apportionment is

appropriate only when a defendant can demonstrate that

"there is a reasonable basis for determining the contribution

of each cause to a single harm" (emphasis added)), with

United States v. Rohm & Haas Co., 2 F.3d 1265, 1280 (3d

Cir. 1993) (holding apportionment required a showing "that

there is a way to determine what portion of the ‘harm’ . . . is

fairly attributable to [the defendant], as opposed to other

responsible parties."), overruled on other grounds by United

States v. E.I. Dupont De Nemours & Co., 432 F.3d 161 (3d

Cir. 2005); Chem-Nuclear Sys., Inc. v. Bush, 292 F.3d 254,

259-60 (D.C. Cir. 2002) (holding that a PRP can avoid joint

and several liability by proving "the amount of the harm that

it caused" (internal quotation marks omitted)).

However, we ultimately need not decide today whether a

PRP under § 9607(a)(2) can avoid joint and several liability

by apportioning only its own harm. For, even assuming that

a PRP could do so, the district court did not err in holding that

PCS failed to establish a reasonable basis for apportioning its

own harm in this case. Both primary disposals (from fertilizer

manufacturing) and secondary disposals (from earth-moving

and construction) occurred during Old CNC’s ownership and

operation of the site. Therefore, even to establish its own

share of the harm, PCS (Old CNC’s successor) needed to provide an apportionment methodology that addressed both types

of disposals. Because it did not do so, PCS failed to provide

a "reasonable basis for apportionment" of its own harm (let

alone all of the harm), and we affirm the district court’s denial

of apportionment. See Chem-Nuclear Sys., 292 F.3d at 260

(finding defendant failed to prove its own share of the harm);

Rohm & Haas Co., 2 F.3d at 1280 (same).

b.

RHCE contends that, as a current operator PRP under

§ 9607(a)(1), it can avoid joint and several liability by demon38 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON
strating that no disposal of hazardous substances has occurred

during its operation of the facility, and thus a reasonable basis

exists to apportion it a zero-share of the harm. This argument

clearly fails.

The structure and purposes of CERCLA simply do not permit current owner or operator PRPs to use individual share

apportionment to apportion themselves a zero-share harm.9

Section 9607(a)(1) renders current owners and operators

strictly liable for response costs regardless of their culpability.

42 U.S.C. § 9607(a)(1); Trinity Am. Corp. v. U.S. Envtl. Prot.

Agency, 150 F.3d 389, 395 (4th Cir. 1998). "Innocent" current

owners and operators seeking to avoid CERCLA’s strict liability scheme must meet the requirements necessary to claim

the narrow defenses and exemptions specifically established

by Congress. E.g., 42 U.S.C. § 9607(b); see Trinity Am. Corp,

150 F.3d at 395-96.

Allowing current owner and operator PRPs to avoid joint

and several liability through a zero-share apportionment

because no disposal occurred during their ownership or operation of a facility effectively would render current owner or

operator liability coterminous with liability based on ownership or operation at the time of disposal. Compare 42 U.S.C.

§ 9607(a)(1) (establishing liability for current owners and

operators, regardless of whether disposal occurred during

ownership or operation), with id. § 9607(a)(2) (requiring disposal during ownership or operation for liability).

Such a rule would frustrate the several narrow statutory

defenses and exemptions Congress created to address truly

9That the district court held RHCE was also a PRP as an operator at the

time of disposal under § 9607(a)(2) does not affect this conclusion. It

would defeat the purposes of CERCLA to permit a current operator PRP,

who was also an operator at the time of disposal, to claim individual share

apportionment, while denying this right to a current operator PRP who was

not a PRP at the time of disposal. 

PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON 39
"innocent" landowners. See, e.g., id. § 9601(20)(D), 35(A)

(involuntary acquisition exemption); id. §§ 9601(35),

9607(b)(3) (defense for innocent landowners); id.

§§ 9601(40), 9607(r) (bona fide prospective purchaser exemption); id. § 9607(q) (contiguous property owner exemption).

All of these provisions require much more than a mere showing that no disposal occurred during a current owner or operator’s tenure at a facility. See, e.g., id. §§ 9601(35), 9607(b)(3).

Consequently, allowing such PRPs to apportion solely their

own zero-share of liability would render the heightened

requirements of these narrow defenses and exemptions dead

letters. Where possible, we must interpret a statute to avoid

rendering any of its provisions superfluous. Astoria Fed. Sav.

& Loan Ass’n v. Solimino, 501 U.S. 104, 112 (1991). Our

holding today avoids such redundancy, and preserves Congress’ calculated balance of broad strict liability and narrow

defenses and exemptions under CERCLA.

IV.

Having affirmed the district court’s holding that the harm

at the site is not subject to apportionment, we finally consider

the several appeals of the court’s ultimate allocation of liabilities under 42 U.S.C. § 9613(f). The district court equitably

allocated liability for the response costs to the PRPs as follows: forty-five percent to Ross; thirty percent to PCS; sixteen

percent to Holcombe and Fair; five percent to Ashley; three

percent to Allwaste; one percent to RHCE; and zero percent

to the City of Charleston. As the party bringing the § 9613(f)

action, PCS bears the burden of proving each party’s equitable share of response costs. Minyard Enters., 184 F.3d at 385.

Section 9613(f) allows "[a]ny person [to] seek contribution

from any other person who is liable or potentially liable under

section 9607(a) . . . during or following any civil action . . .

under section 9607(a)." A court "may allocate response costs

among liable parties using such equitable factors as the court

determines are appropriate." 42 U.S.C. § 9613(f)(1). This

40 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON
plain language grants a court significant discretion to choose

which factors to consider in determining equitable allocation

of liability. We review a district court’s choice of factors for

abuse of discretion, and its ultimate allocations of liability for

clear error. See Boeing Co. v. Cascade Corp., 207 F.3d 1177,

1187 (9th Cir. 2000).

In this case, the parties do not challenge the court’s selection of relevant factors in arriving at the appropriate allocation. They only challenge the court’s application of those

factors. PCS, RHCE, and Holcombe and Fair each contend

that the court clearly erred by allocating too much liability to

each of them, and not enough to the other parties.10

Considering, as we must, the record as a whole, we cannot

conclude the district court clearly erred. The court’s ultimate

allocation of liability reasonably weighs relevant factors,

including the degree of involvement each party had in disposals (both primary and secondary) on the site, the degree of

care each party exhibited with respect to hazardous substances, the degree to which each party cooperated with government officials with respect to hazardous substances, and

the benefit each party reaped from disposals of hazardous

substances on the site. Although the record also might have

supported a different allocation, the ultimate "allocation [is]

among the reasonable conclusions supported by the evidence." Boeing, 207 F.3d at 1188. We therefore affirm the

district court’s allocation of liabilities under § 9613(f).11

10We reject Holcombe and Fair’s alternative argument that we remand

for further factual findings because the district court’s analysis assertedly

lacked the detail and exactness required for adequate appellate review. See

Fed. R. Civ. P. 52(a). The district court made over two hundred factual

findings, and specifically referenced the findings it considered important

in its allocation determination for each PRP. This factual analysis adequately satisfies Rule 52(a). 

11Ross challenges the district court’s judgment directing that Ashley

recover from PCS $147,617.02 plus interest, and that PCS recover from

PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON 41
V.

For the foregoing reasons, the judgment of the district court

is

AFFIRMED.

Ross $87,404.82 plus interest. Ross contends that the money judgment

against it is premature because PCS, as the jointly and severally liable

party under 42 U.S.C. § 9607(a), has not yet paid its proportionate share

of allocated liability to Ashley. However, the court’s order denying modification of the money judgment explicitly recognized that PCS cannot

recover from Ross until it has paid more than its proportionate share to

Ashley. Considering the court’s clarification on the record, we find no

error in the form of the money judgment. 

42 PCS NITROGEN INC. v. ASHLEY II OF CHARLESTON