## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N o. 07

- 3744 U NI T ED S TATE SOF A MERI CA, P la intif f-A pp ellee, v. C APIT AL T AX C ORPO RA T I ON, D e f e ndan t

-Appe l l ant
.
A pp eal from the United S t ates Di strictC our t fo r the N o rthernDi stricto f Illino is, Eas tern Div isi on. No . 04 C4138

— George M. Marovich, Judge .
A RG UE D M AY 5, 2008

— D ECI DE D S EP TE MBE R 19, 2008

Befo re C UDAH Y, P OSNERa nd R OV NER, C ircu it Judges . C UDAH Y, Cir cu i tJudg e . Cap i talT ax C or pora ti on ( Cap i tal Tax) i s a n I l l i noi s co m pany thatpurchase s di str essed re ales tat e pr oper ties and r ese l l s them f orpro fi t. A t a Cook County sca venge r sal e in Octobe r 2001 , Capit alTax su c c e s s fu l l y b i d o n t a x c e r t i fi c a t e s t o a d e r e l i c tp a i nt f a c t o r y o n th e so u th s i d e o fC h i c a g o . C a p i t a lT a x c l a i ms that i t then entere d i nto an agre em ent to sel lthe proper ty to a m an n am ed M er vy n D u ka tt . Pu rs u an t t o th is al l eged c o nt r ac t, Ca pi ta lTa x e xe r ci se d i ts o pti o n o n the2 N o. 07

- 3744 tax deed and del i ver ed p os ses si on o fthe proper ty to Du kat t. Capit alTax r eta i ned l ega lti tl e t o the pr oper ty, how eve r, as se curi ty f orthe re m ai nd ero fthe pu rchas e pr i ce . Duk at t ne ve r made an o ther pa y m en t, l ea ving Cap i talTax w i th ti tl e t o an unw anted pro perty
. Bo ththe Chi ca g o De par tmento fthe Env i r o nm en t ( C DO E ) a n d th e E n v i r o n me n t a lP r o t e c t i o n Ag e n c y ( E P A) we r e c a l l e d t o th e o l d p a i ntf a c t o r y a ft e r r e c e i v i n gc o mpl aint s th att o xi c paintpr o duct s wer e l eaki ngo uto fthe f ac to r y i nt o ne arbys tr ee ts a nd sewer s. The i ns pec ti o ns r ev ea l ed thous an ds o fr us tya nd l ea k i ngb ar r el s co ntaini ng haza rdous w ast e. The EPA order ed Cap i talT ax to di spo se o fthe was te b utCa pi tal T ax r efus ed; the EPA cl ea ne d up the s i te i ts el f

. The Go ve r nm en t th enb r o ug ht thi s s uitunder S ecti on 1 07( a) o fthe Com prehe n sive En vi ro nm entalResponse , Com pensati o n, a nd Li abi l i ty A ct of 1 98 0 (C E R C L A ) for t h e r e s p o n se co st s itinc u rre d

. See 42 U
. S. C
. § 9607(a). T h e d istri ct cou rt grante d sum m ary j udg m en t i n f av o r ofthe Go ve r nm en t o n b o thl i ab i l i tya nd d am ag es . C ap ita l T ax n ow ap p e a ls, ra isin g t w o b as ic ar gum ents. Fi rs t, i t cl ai m s that i t i s no t l i abl e under CE RC LA bec ause i t i s no t the “ ow ner” o fthe f aci l i ty. Se c on d , e v en if it is lia b le, C ap ita l T ax cla im s t h at it is o nly r e s po ns ib l e f o r the c l e a nu p o fthe p a r c e l s i to wne d.

I. The ha zardou s was te s i te f ac i l i tya t i ss ue i n the pr es en t case i s an ol d pai nt m anufa cturing f aci l i ty l oca ted at74 11- 74 31 Sou th Gr ee n S tr ee t i n Chi ca g o , I l l i no i s. F o r many yea rs , thi s f aci l i ty w as oper ate d by the N ati onalLac q uer and Pai nt Com pany, Inc. , w hi ch pro du ced pai nt pro du ctsN o. 07

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Par c e l 5 c o n t a i n e d th e wa r e h o u s e ; P a r c e l 2 6 c o n t a i n e d t he 1 m ai n o ffi c e an d the ware hous e yar d; Pa rc el8 c ont ai ne d the m ai n m i xi ng r oom ; Pa rc el 9 c ont ai ne d the ro l l er m i l l r oom an d par tofthe s t or age yar d; Par c el 10 c ont ai ne d the pi gm en tr oom an d p art o f the sto r a g e y ard ; P arc el 11 con tain ed the w ash depa rt m en tan d par tofthe s t or age ya rd; an d Par c el12 c onta in ed th e b a r m ill ro o m . The c he m i c al s i nc l uded the f ol l ow i ng s ubs t anc es : e thyl 2 ac et at e, x yl en e, m e th yl en e c hl or i de, m ethyl e thyl ke t one , m ethyl (co n tin u ed ...) and sto re d the chem i cal s a n d m ate ri al s use d to produce th e m. T hi s f a c i l i t y, wh i c h we c a l lthe “ Nat i o na lLa cquer site, ” con sists of fou r t w o-story building s, tw o one-story bui l dings and two yar ds; i t i s s i tu at ed on o ne acr e o f land i n a m i xed i nd ustr i al, co m m er ci aland re si denti al ar ea ofChica go. A l thou gh t he si te i s no w di vi ded i nto seve n parce l s (Pa rc els 5, 26 , 8, 9, 10 , 11 and 12) , i t was hi sto ri cal l y o perat ed as a s i ngl e pl ant. W h en v i ew ed on 1 a m ap , th e s ev en r e c t an gu lar p ar c els are st ac ke d n ea tly o n t o p o fo n e a n o th e r . E a c h p a r c e li s c o n n e c t e d t o t he o th er s b y a fi r e d o o r o r p a s s a g e wa y, a n d s e v e r a lo fthe parce l s s hare co m m on y ar ds. InD ec em b e r 1 9 95 , W illiam L er c h an d Ste ve n P ed i, thro ugh thei r new l y c re ate d com pany, N ati onalLacquer Company( N at i o na lLacque r ) , purc ha se d the as se ts ofthe ol d N ati onalLacquer and Pai nt C om p an y. Fr om 19 95 to 2002 , N ati onalLacquer re cl ai m ed pai nt, m anufa cture d p aint s an d c o at i ng s, a nd pe r f o r m ed fur ni tu r e st r i ppi ng oper ati ons at the s i te. The co m pany used a num bero f differ ent haz ar dous m ate ri al s, wh i ch were sto re d al lo ver the si te. I t i s undis pu ted thathaza rdous m ate ri al s l eak ed

24 N o. 07

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(
. . . c on t i nu e d) 2 is obu tyl ketone and p h osphoric aci d. All ofthe se s ub st ances a re list ed as “ h a z a rd o u s su b sta n ce s” u n d er C E R C L A
. S ee 40 C .F .R . § 3 0 2 .4 (2 0 0 2 ). or w er e s p illed on to th e g ro u n d th ro u gh ou t t h is p er iod . In J anuary 1998 , f or exam ple , the CD OE i nspected th e s i te an d fo u n d “ h u n d r e d s o fr u s t y, d a ma g e d a n d l e a k i ng pai l s, cans and j ar s. ” N ot onl y w er e these pai nt pro du cts spi l l i ng o nto the fl oo r, r ai nw ate r fro m a l eaky ro ofm i xed wi ththe pa i nta nd fl ow ed a cr o ss the fl o o r i nt o dr ains and sewers and eventual l y into the s tr eet
. By 200 1, N ati onalLacquer had fa l l en be hi nd o n i ts proper ty taxes , and Cook Co u n ty m ad e fi ve ofthe seve n parce l s a vai l abl e forsa l e ( Pe d i reta i ned ti tl e t o Parce l s 8 and 10)

. A t t ax sca venge r sal es, p ote nti albuye rs bi d on the del i nquen t taxes, and the w i nning bi dd err ecei ves a ta x ce rt ifica te for th e p ro p er ty . I f th e o rig i n a l ow n er fails t o re de e m t he de l i nque ntt a xe s wi thin a s t a t ut o r y p e r i o d, th e tax sale bi d d er then has th e ri gh t to p e t it ion f or a tax deed t o the proper ty. T ax certi fi cate s d o not pass ti tl e; th eya r e si m i l art o an o pti o n t o l at ero bt ain t i tl e i fthe ce r ti fi ca te ho l dercho o se s to e xe r ci se tha t o pti o n. Re pr es en t a t i v e s o fCa pi t a lT a x v i s i t e d the Na t i o na lLa c qu e r s i te bef or e the sc aveng ersal e and cond ucted a l i m i ted i nspecti on. W hi l e they w er e not abl e to enterthe proper ty, i t was appa r en t to the m tha t th e prop ertywas a f o r m erpa i nt f acto ry . Capit alTax then succes sfully b i d on the tax cer ti fi cate s. Af t e r pu r c ha s i ng the t a x c e r t i fi c a t e s b ut b e f o re o btaini ng the tax d ee d s, Capit alTax cl ai m s that i t s tr uck aN o. 07

- 3744 5

D ukatt m et the sher iff’s d ep art m ent w hen itarri ved to carr y 3 outthe e vi c t i on and r epr es en t ed h i m s el ft o be an“a ge nt ” o f C a p ita l T a x. dea lwi thDuk at t i n whi chCa pi ta lTax ag r ee d to o bt ain the ta x d ee d s t o th e pr op er ty an d to co n ve y t h em to D u ka tt in exchange f orabo ut $25 , 000. N o w ri tte n agr eem ent was ev er m ad e. B ec au se C ap ita l T ax d i d n otty p ica lly ob ta in the t ax deeds unti ltheyhad a b uyer, Dukatt ga ve Capit al Ta x a $15, 00 0 ch ec ko st en sibl ya s par ti alpa y m en t f o r the proper ty. On October30 , 20 01, Ca pit alTax ob tained tax d ee d s fo r fou r of th e p ar c els . On Fe b ru ar y 1 4, 20 02 , i t obt ai ned a ta x deed f orthe fi fth par cel . C ap ita l Tax al so o bt ained a n or dero fe vi ct i o n t o s ec ur e po ss es si o n o fthe si te fro m i ts previ ous ow n er, Lerc h. A fterthat, Capit al 3 Tax had ver y l i ttl e t o do w i th the pro perty
. Duk at t, ho wev er, was fr eque nt l y a t the s i te
. He h ad th e key s t o the pr oper ty and the o ffi ce. Capit alTax defer re d to him on allm atters rega rd ing the site. D uk att hired w orkers who, o ve r the c ou rs e o ft wo o r thr ee wee k s, c utup an d re m ove d the p a i ntma c hine s tha th a d b e e n i n the g a r a ge. The y a l so pr epa r ed an d r epl ac ed a n o ve r he ad do o r a nd knock ed dow n tw o w al l s. T hi s w or k al l ege dlyco st Du kat t $1 0,0 00 . In A p ril 20 02 , th e C D O E res p on d ed to a c all c on c er n in g a sp ill of ha za rd ou s m at er ials atth e s i t e. It disc ove re d that paint co ntai ners had re centl y b een m ove d fr o m pa r c e lt o p a r c e l ; t r a i l s o fs pi l l e d p r o du ct tr aced the m ove m en t of these substa nces. I t i s uncl ear w hetheri t was Dukatt, Lerc h orper haps a t h i rd party w ho m oved the co ntai ners . The CD OE , however, not ed that Cap i talTax had m ade l i ttl e e ffor t to secure the s i te6 N o. 07

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an d i t i ss ue d Ca pi ta lTa x a no ti ce ofvi o l at i o n fo r “ al l o wi ng a s pil lo fhaza rdous substa nces du e t o conta i n erm ove m en t a t t h e S i t e .” O n Ju ly 2 3, 20 03 , th e C D O E offic ially re quested thatCapit alTax cl ean u p the si te. Capit alTax r efus ed. I t l at ere xpl aine d tha t i t “di dn’ t ca r e” a bo utthe s i t e b e c a u s e i tc o n s i d e r e d i tt o b e D u k a t t ’ s p r o b l e m. The CD OE r efer re d t h e m att erto the EPA
. On J uly31 , 20 03 , the EPA c o nduc te d i ts o wn i ns pec ti o n o fthe s i te
. The EPA f ound m or e than 10, 000 conta i ners o fvar i ous s i zes , i nc l udi ngg al l o n dr um s, s to r ag e ta nk s, c y l i ndr i ca lmix i ng tan ks, vats , bu cket s, com p ressed gas cyli nd ers, laboratory j ar s a nd bo ttl es

— mo s to fwh i c h c o n t a i n e d h a z a r d o us su bs ta nc es . M an y o f th e co nt aine r s wer e uns ea l ed, l ea k i ng or o the r wi s e de t e r i o r a t i ng . T he EP A a l s o f o un d e v i dence o ft r es pas singon th e si te
. On Augus t 15 , 2 00 3, the EPA i s s ue d a Uni l a t e r a lAdmi ni s t r a t i v e Or de r ( UAO) de man din g t h at C ap ita l T ax cle an its fiv e p ar c els . C ap ita l T ax d id not com ply

. S o, o n Octobe r 6, 2003, the EPA r em ove d the h azardous m ate ri al s i tse l f

. The EPA al so cl eaned m an holes an d pits, ex cav ated the top f oot of storage yard so il, b ac kfille d an d p lan te d th e sto ra ge ya rd w ith gr as s. It sealed the tan ks an d pres su re w ash ed i nt erior fl oors an d wal l s to r emov e po te nt i alc o nt ami na ti o n. Th e Go v e r nme ntthe n fi l e d s ui ta g a i ns t Ca pi t a lT a x, P e di an d Le r chunde r CERCLA to recove r the c o st s o fthe c l e a n u p . Th e G ov er n m en t a lso so u gh t c ivil p en alt ies , see 42 U .S.C § 96 06 (b ), an d p u n itiv e d am ag es , see4 2 U. S
. C. § 9 607( c) ( 3) , ag ai nst Cap i tal Tax f orf ai l i ng to co m plywith the UA Os. Capit alTax deni ed th at i t was l i abl e under CE RC LA , r ai si ng the “s ecuri ty i nter est ” exem pti on under 42 U
. S. C
. § 9601(20)(A ) an d an “inn ocen t land ow ne r”N o. 07

- 3744 7 defen se unde r 4 2 U. S
. C. § 9 60 7(b) ( 3)
. On Apri l11 , 2 00 6, the Gover nm ent m ove d fo r parti al s um m ar y j ud gm ent o n l i abi l i ty, wh i ch the d istr i ct c ourtgr anted. On A ugust 2 4, 2006 , the Gover n m en t m ove d fo r sum m ar y j ud gm ent o n da ma g e s , wh i c h th e d i s t r i c tc o u r ta l s o g r a n t e d , fi ndi ng Capi ta lTa x j o i nt l y a nd s ev er al l y l i ab l e to the Go ve r nm en t for $2 ,68 1,3 3 7 .7 9 in res p on se co st s. It als o a ss es se d civ il penal ti es i n the am ount o f$2 30, 250. 00.

II. The fi rs t m aj ori ssue here i s Capi talTax’ s l i abi l i ty und er § 1 07 (a) o fCE RC LA f orthe re sponse cos ts i ncurr ed by the Gove rnm ent in the cl eanup ofthe N ati onalLacquer si te. U nd er42 U .S.C
. § 9606 ( a) , the Gover nm ent m ay o r derpo te nt i al l y r es po ns ibl e par ti es to c l ea n up ha za r do us w ast e s i tes
. Fur ther , u n d er 42 U
. S. C. § 9 604( a) , the Gover n m en t i s a uthor i zed to co nd uct i ts own cl eanups of hazar do us wa s t e s i t e s u s i ngthe Ha z a r do us Was te Su p erfund

. The Governm ent c an then bring an acti on u n d er § 10 7(a ) to rec ov er d am a g es from p ot en tia lly re sp on sib le p ar tie s. See 4 2 U
. S. C. § 9 607( a)
. In ei thercas e, th e “p ollu te r p ay s.” C f. U nited Sta tes v. B urlin gto n N o rthern & Sa nt eFeRy. Co. , 520 F.3d 918 , 941 (9th C ir. 2008). To e st ab l i shl i abili tyunde r § 1 07 ( a) , the Go ve r nm en t m ust s how that : ( 1) “t h e s i te i n questi on i s a ‘ f aci l i ty’ as d efin ed in § 10 1(9 ); th e (2 ) th e d efe n d an t is a re sp on sib le partyunder § 107( a) ; ( 3) a re l eas e o r a threa tened r el eas e ofa hazar dous substance has occurr ed; and ( 4) the re l eas e o r thr ea te ne d r el ea se ha s ca us ed th e pl aint i fft o i nc ur re sponse cos ts. ” Ker r -M cGe eChe m . Corp. v. Le f t on Ir on &8 N o. 07

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Cap it al Tax concedes thatthe N ati onal Lacquer s it e i s ei ther 4 a “ f ac i l i t y” or, i n i t s vi ew, s eve ra l di fferent “f ac i l i t i es . ” Th e “r el ea s es ” i n thi s c as e i nc l uded, am ong othe r thi ngs , the l ea ki ng and evapo rat ion oftox ic paint prod ucts and chem ic als s tore d in l eaky and de te ri o rating contai ners . Final ly, no one disputes tha t t h e E P A incu rred ov er tw o m illion d olla rs in resp on se co sts w h en it c le a n ed u p th e N a tio n a l L a cq u er sit e. M e t al Co. , 14 F. 3d 321, 32 5 ( 7th Ci r. 1994)
. Capit alTax c oncedes thre e of these el em ents. The onl y el em en t in 4 iss u e h er e is t h e s e c o n d ele m en t: w h et h er C ap ita l T ax is a resp ons ibl e pa rty un d er § 107(a). C E R C L A is st ric t liab ility st at u te
. S e e Nut r as we e t Co. v. XL Eng’g Co. , 227F.3d 77 6, 78 4 (7 th C ir. 20 00 ). L iab ility is im p os ed w h en a p ar ty is fou n d to h av e a s t a t u to rily defined “connect i on” w i th the f aci l i ty; thatco nnectio n m ak es th e p ar ty res p on sib le re ga rd les s o f ca u sa tio n . See U nited Sta tes v. Hercules , 247 F.3d 7 0 6 , 7 16 (8th C ir. 2001). Se c tio n 10 7(a ) lists fou r d iffer en t c at eg o r i e s o f p ot en tia lly re sp on sib le p ar tie s. See 4 2 U. S
. C. § § 96 07 ( a) ( 1)

- ( 4)
. The only cate gory i n issu e here is spe cifi ed by § 107(a)(1) , w h ich m ak es th e c u rre n t “ ow n er an d o p e ra to r of . .

. a fac ility ” lia b le for cle an u p co st s. See 42 U
. S. C
. § 9607 (a)( 1). The Gover nm ent has notclaim ed i n thi s co urt that Capi talTa x “ o per at ed” the f ac i l i tyi n a ny way . Thu s, the Gover nm ent’ s a rgum ent i s that C ap ital Tax i s l i abl e for re sponse cos ts si m plybec ause i t i s the cur re nt “owner” of th e facil ity. 42 U
. S. C
. § 9607(a)(1)
. The r e i s ve r y l i tt l e we c ang l ea n fr o m the s ta tu te abo ut the m eani ng o fo w ners hi p. CE RC LA defi nes “ ow ner” asN o. 07

- 3744 9 “an y pe rson ow nin g” a facil ity. 42 U .S.C. § 9601 (20)( A ). The c i r cul ar i tyi n the s ta tu to r y l an g ua g e su g g es ts tha t “the sta tutory t er m s hav e thei r or d inarym eani ngs r ather tha n un us ua lo r t e c hn i c a lme a ning s . ” Sid ney S. Ars tCo. v. Pipe f i t t e rs We l

f areEduc
. Fu nd, 25 F. 3d 417, 41 9 n.1 ( 7th C ir. 1994). T he gene rali ty of th e term of the term “ow ne r” a l s o s u g g e s t s th a tC o n g r e s s i nt e nd e d u s t o tu r n t o “ c o mm on l aw anal ogi es. ” Edward H i nes Lu m b e rCo. v. Vul ca n M at e r i al s Co. , 861 F.2d 15 5, 15 7 (7 th C ir. 19 88 ). C on gr es s d id sta te, h ow ev er, thatthe defini ti on o f“o w ner does not i nc l ude a p erso n who , wi th o utpa r ti ci pat i ngi n the manag em en t o f a . .

. fac ility , ho ld s in d icia of ow n er sh ip pri m ar i l y t o prot ect hi s s ecuri ty i nter esti n the vess el or fac ility .” 42 U .S.C . § 96 01 (20 )(A ) (em p h as is a d d ed ). A “se curi ty i nter est ” i s “ a r i ght und er a m or tga ge, deed of tr ust, ass i gnm ent, j ud gm ent l i en, ple dge, secur i ty agree
m en t, f ac to r ing ag r ee m en t, o rl ea se a nd a ny o th err i g ht accr uingto a p erson to secur e the r epaym ent o fm oney, the per f or m ance o fa du ty, o r any o thero bl i gat i on b y a n on affilia te d p er so n .” 42 U .S.C
. § 9 60 1(2 0)(G )(v i). T h is ha s be co m e k no wn as the “s ecuri tyi nt er es t” e xc l us i o n, and the party see ki ng to ass er t i t bear s the b u rd en o f es ta b lish in g it. SeeM o n arch Tile, Inc. v City of Flore nce, 21 2 F.3d 121 9, 1222 ( 11th Cir. 2000). T he G overn m en t claim s th at C ap ital T ax i s the “ow ne r” unde r § 1 07 ( a) ( 1) b ec au se i t hol ds l eg alt i tl e to fi ve o fthe seve n parce l s a t the N ati onalLacqu er s ite. Capit alTax do es no t di spu te th at i t ha s l eg al ti tl e to th o se pa r ce l s an d thus hol ds “ind i ci a o fo w ners hi p. ” Capi talTax co ntends, how eve r, thati t s ol d the p arcel s t o Du kat t. A ccor ding to Cap i talTax, i t o nl y ho l ds l ega lti tl e t o t he pro pertyas10 N o. 07

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se cur i tyf o r the b al an ce o fthe purchas e pri ce unde r the cont ra c t. See 42 U
. S. C
. § 9601(20)(A ). Th e d istri ct cou rt rej ecte d thi s arg u m ent. I t e m phasi zed thatCapit alTax had not t ake n the ti tl e in or der to secur e a lo an. Indeed, as the d istr i ct c ourtnot ed, Capit alTax had neverl oaned m o ne y to anyone

— no t Duk at t, no t Pe di a nd no t Ler ch

. B ecau se C ap ital T a x w a s not a “lend er, ” the district cou rt re aso ned, i ts i nter esti n the property w as not a s ecuri ty i nter est
. W e agree w ith t h e d istrict cou rt that Ca p ital T ax ’s ar gum ent i s som etim es confusi ng. But the basi c l ega l pr i nc i pl e unde r l y i ngCa pi ta lTa x’ s ar g um en t

— that equi tabl e o w ners h ip p ass ed fro m Capit alTax to Dukatt w hen the l and s al e contr act w as ex ecuted

— ha s a l ong history at com m on l aw . “Th e rule i n the vastm aj or i ty ofj uri sd ictions is th at on ente ring i nt o a c o n t r a ct for the p urch as e o fl an d, the pur ch as eri s th e o wneri n e qui tyo fthe l and, and the sel l erhol ds l ega lti tl e a s s ecuri ty f orpaym ent o fthe pu rcha se p ri ce. ” 1 7 R I CHA RD A. L O RD , W I LL I S T ON ON C O NTRA CT S § 50 : 42 ( 4th ed. 20 00)
. Echo i ng thi s r ule , w e h ave hel d i n the bankr up tcy conte xt that ani ns t a l l men tl a nd s a l e s c o nt r a c ti s “ mer e l y a s e c uri ty agr ee men twh e r e the v e nd o r h o l ds l e g a lt i t l e i n t r ust sol el y a s s ecuri ty f orthe paym ent o fthe pu rchas e pr i ce.” In re Stree ts & Beard Farm Pa rt nership , 882 F. 2d 233, 235 ( 7th C ir. 1989) (app ly in g Il linois law ). Perh ap s C ap ital T ax ’s const ant r efer ence to the “secur i ty i nter est ” e xcepti on has ca used so m e co nfusi on her e, f orCapit alT ax i s no t aN o. 07

- 3744 11

Capi t al Tax doe s ha ve a c ol or abl e ar gum en tr eg ar di ng the 5 “se c ur i t y i nt e r e s t ” e x c l us i on . Th e e x c l us i onc ov e r s m or e than “ty p ical” lend ing scena rios: it co v ers “a ny . . . righ t accru ing to a pe rs on t o s ec ur e the repa ym en tofm one y, the pe rfor m anc e of a d u ty , or a n y o t h er o b lig a tio n .” 4 2 U .S.C . § 9 6 0 1 (2 0 )(G )(v i). Furthe r, the ex cl usi on expli ci tl y recognize s thata pers on can h o l d “ i n d i c i a o f o wn e r s h i p , ” s u c h a s l e g a l t i t l e , a n d y e t n otbe th e o w n er u n d e r C E R C L A
. Id

. As one courthas st ated, “und er the s ec ur i t y i nt er est e xc ept i on the c our tm us tdet er m i ne why [ a p arty] holds s uch indici a ofow ners hip. ” In reBergso e M et al C orp ., 91 0 F .2d 66 8 , 67 1 (9t h C ir . 19 9 0 ). typ ical cred itor. Ca p ital T a x ’s argum en t w ou ld be m ore 5 eas i l y unders too d if it s im plyar gued that i t i s the fo rm er own ero fthe f aci l i ty

— no t t he current own er

— an d thus n otliab le u n d er § 10 7(a )(1) . Th is, of c ou r s e , i s a cla ss ic “e qui tabl e con ve r si o n” a r g um en t. Al th o ug h the r e m i g ht be s om e m er i t in th e di str i ct’ s co urt’ s co ncl usi on that Capi tal T ax i s no t a “s ec ur ed cr edi to r, ” we thi nkthe m or e a pp ro p ria te m etho dol ogyunder the par ti cul ar f ac ts pr es en te d he r e i s to a ddr es s th e i ss ue unde r the ow ne rship prov isi on of § 107(a)( 1). The c en tr alque st i o n he r e i s what r o l e, i fa ny, the do ct r i ne of equ itable conve rsion p lays i n t h e d efi nition of ow ne rsh i p unde r CE R C L A. As we ha ve a l r ea dy ex pl aine d, the sta tute gi ves l i ttl e concre te gui dance on the i ssue. Congr ess i ntended court s, i n defi ni ng § 107( a) ( 1) , to draw anal ogi es to c om m on la w , see E dw a rd H ines , 86 1 F
. 2d at 157, and to th e ord in ar y m ea n in g of th e t er m ow n er sh ip , s e eSi dney S
. A rst, 25 F. 3d at 419 n. 1. I t i s no tabl e that tw o c ou rt s o f appeal s have hel d that publi c or quasi

- pu bl i c co m p an i es12 N o. 07

- 3744 th atho l d l eg alt i tl e to pr o per tyi n or dert o s ec ur e th e re coupm ent ofd eve l opm ent c ost s a re not“o w ners ” under C E R C L A
. S e eM on ar c h Ti le, 212 F.3d at12 22 ; In reBe rgs oe, 910 F. 2d at 671. M or e s peci fi cally, a n um bero fdi str i ct cour ts have appli ed the doctr i ne o fequi tabl e co n ve rs ion i n CER CLA c a s e s , b o th un de r § 1 0 7 ( a ) ( 1 ) ’ s “ o wne r s hi p” p ro vis ion an d u n d er th e “ se c u rit y in te re st ” e x c lu sio n . See, e.g., U nited Sta tes v. U nio n C o rp . , 25 9 F
. S up p. 2d 35 6, 39 5 ( E.D. Pa. 20 03 ); K. C. 19 86 Lt d. P’s hip v . Re adeM f g. , 33 F. Su p p . 2 d 8 20 , 834 (W .D . M o. 19 98 ). U ni t e d S t at e s v. We b ze b Ent e rs . , Inc . , 809 F. Sup p . 646, 652 (S. D
. Ind

. 1992); Sne di ke rD e vs . Ltd
. P’s hip v . Evans , 77 3 F
. S up p. 98 4, 98 7- 88 ( E.D. M i ch. 19 91)
. Thus, i t i s di fficu l t t o dism i ss Cap i tal Ta x’ s a r g ume nto uto fh a nd

. S o we m us t determ in e whethe r, i n a ppl y i ngthe doctr i ne o fequi tabl e co nver si on in the CE RC LA co ntext, w e s houl d atte m pt to fa shi on o ur o w n federa lr ule o r l oo k t o a p p lica b le Illino is law as th e fe d er al s ta n d ar d

. See U ni t e d S t at e s v. Ki m b e ll F o o ds, Inc . , 44 0 U.S
. 71 5, 72 7- 28, 99 S
. Ct
. 1 44 8, 1 45 7- 58 , 5 9 L. Ed. 2d 71 1 ( 19 79 )
. The r e i s no ne ed to e sc al at e th e sc o pe o fthe i nqu i r yb y a tt empti ng to ap p ly a fed er al com m on law h er e; in st ea d , w e m e re ly l oo k t o sta te l aw f or g u id ance in i nter preting the st atute
. O f co u rs e, fed er al la w , as a form al m at te r, u ltim at ely go ve rn s t h e d efin itio n of ow n e r s h ip u n d er § 10 7(a ). Id

. at 72 6, 99 S. C t. 14 48 . B u t t h is c as e p re se n ts a p ar tic u lar ly str ong case f orthe em plo ym ent o fr el evants tate l aw as th e p ro p er gu id e t o th e fe d e ra l st an d ar d

. Cf. Re dwin g C arri ers, Inc. v . Saraland Ap artm ents , 94 F. 3d 1489 (11th Cir. 1996 ) ( adopti ng st ate partners hi p l aw as the federa l stan d ar d to de term ine ow ne rship un d er CE R C L A ).N o. 07

- 3744 13

W e thin k the re aso na b le ap p ro ach is si m p ly to loo k to state 6 law for g u id an ce in in terp retin g the statu te. Th is con clu sion also f o l l o w s fr o m Un i t e d S t a t e s v . Ki mb e l l F o o d s , Inc . , 440 U.S
. 715, 7 2 7 -2 8 , 99 S. C t. 1 4 4 8 , 59 L . E d .2d 71 1 (19 7 9 ). Fi rs t, we not e thatst at e l aws ar e al re ady ge ne ra l l y uni f or m on the poi nt ra i s ed h er e; s t at es ar e i n s ubs t ant i al ag re em en tabo ut th e o p e r a t i o n o f th e d o ct ri n e o f eq u ita b le co n v er sio n . S ee 17 R I CHA RD A. L ORD , W ILLI S TO N ON C ONTRACTS § 50 :42 (4th ed . 20 0 0 ). (co n tin u ed ...) Pro pertyr el ati ons have h i sto ri cal l y b een g ove rned by s t a t e l a w. Se e, e . g. , B utn er v. U nited Sta tes , 44 0 U.S
. 48 , 99 S. Ct. 91 4, 59 L. Ed

. 2d 136 ( 1979 ) ; O r egon ex re l
. St at eLa nd Boardv. Cor val l i s Sa nd & Gr ave l Co. , 42 9 U.S. 363, 37 8, 97 S
. Ct
. 5 82 , 5 0 L. Ed. 2d 55 0 ( 19 77 )
. W he n Co ng r es s i nstr ucted cour ts to l oo k t o the t ra dit i onal, co m m on- l aw m eani ng o fo w ners hi p i n i nter preting CER C L A , i t was ce r ta i nl y a war e o fthi s hi st o r y . And Co ng r es s g av e no in d ica tio n th at it in te n d ed to ta ke a n ew co u rs e. C f. U nited St at e s v. Be s t

f oods , 5 2 4 U. S
. 5 1 , 6 2 , 1 1 8 S
. Ct. 18 7 6 , 1 4 1 L. Ed

. 2d 43 ( 1998 ) ( “nothi ng i n CE RC LA purport s t o rej ect thi s b e dr o c kp r i nc i pl e [ o fc o r po r a t e l a w] , a nd a g ai nst thi s v ener abl e co m m on- l aw bac kdro p, the congres si onal si l ence i s a ud ibl e”)
. The underst anding t hat s tat e l aw gov er ns pro pertyand the expec tati ons bui l t a ro und that un d erstan d ing stron g ly sugg est th at th e federa l stan d ard s h o u l d b e r o o t e d i n a n a d o p t i o n o f s t a t e p r o p e r t y l a w. Thi s co nc l us i o n i s bo l stered b y the f ac t th atthe r e i s no pract i calal tern at ive to thi s a pp ro ach. To invent o ut o f w h o l e clo th a d ist in c tly fed er al la w of p ro p er ty w ou ld be inapp ro pri ate , i fnoti m possibl e. 614 N o. 07

- 3744

(
. . . c on t i nu e d) 6 Se c ond, CERC LA pol i cy w ou ld notbe unde rm i ne d by a referen ce to state law

. It is hig hly un likely tha t states w o u ld al t erc or e pri nc i pl es ofpr operty la w or am en d the i r s t atut es of f ra ud i n o rde r t o a ffec tthe i r i m p ac tonpol l ut i on l i abi l i t y. Ch an g es t o the bas i c pr i nc i pl es ofpr ope rty l aw would po t en tially ha v e w id e-ran g ing effects tha t w ou ld b e d ifficu lt to lim it. It is unl i ke l y thats t at es woul d at t em ptt o m ani pul at e these d octr ines to affect resp on sibility f or env iron m en tal v iola tion s. Th i r d, w e be l i e ve th a tdev i a t i onf r om s t a t e l a w he r e m i gh tbe i nequ itabl e. Ci t i ze ns na t ur al l y l ook t o s t at e l aw t o de t er m i ne the i r re l at i ve ri ght s an d obl i gat i ons with r es pec tt o the i s s ue ofprop erty. Itw ould s eem unfai r f or a party who w as not an “ow ner” u nd er s tat e l aw to f ace li abili ty und er a federal sta tu te b a se d o n “o w n er sh ip .” The I l l i noi s doct rine o fe q uit abl e co nver si on pro vi des th at a v a l i d la n d sa le a gr ee m en t t ra n sfe rs eq u ita b le t itle to th e p u rc h as er . S e e S ha y v . P enro se, 25 I l l

. 2d 447, 18 5 N
. E
. 2d 218, 219-20 (1962 ). Th us , “ w h e n the ow ne r enters i nto a val i d a nd enf or ceabl e contr act f orthe sal e o fr eal ty, the s ell erco nti nues to hol d l ega lti tl e, but i n tr ust for th e buy er ; the b uy erb ec o m es the e qui tabl e o wnera nd hol ds the pu rchas e m oneyi n tr ust forthe sel ler

. ” In re E stat e of M a rtinek, 14 0 I l l

. A pp . 3d 62 1, 48 8 N
. E.2 d 1332, 13 36 (Ill . C t. A p p . 198 6). B u t “ [t]h e d oc tr in e o f eq u ita b le conve rs i on does not a p p l y where equi tabl e co nsi deratio n s in te rv en e o r w h er e th e p ar tie s in te n d oth er w ise .” Eadev. Br ownl ee, 2 9 Ill. 2d 214, 193 N
. E
. 2d 786, 788 (1963 ). Inad d itio n, in or d e r to inv ok e t h e d oc tr in e o f eq u ita b le conve rs i on, the party m ust show that “ a va l i d and enfo rce -N o. 07

- 3744 15

Because C apital Tax

— the seller of the p ro p erty

— is seekin g to 7 estab lish the v alid ity a nd enfor cea b ility of the co n tract, it mus ta l s o es t a b l i s h th a ti th a s p a r t i a l l y p e r f o r me d i t s o wn o b lig a tio n s u n d er th e c o n tr a ct
. S ee R ESTA TEMENT (S ECO ND ) OF C ONTRACTS § 129 c m t. e (1979)
. In f act, Cap it al Tax has purp or ted to sho w tha t it h as fully p erform ed : no t on ly d id it ob tain the t ax deed s as pr om i s ed, i tal s o s ec ur ed a n o rde r pl ac i ng Dukat ti n pos s es s i on ofthe pr ope rty. ab le c on tr ac t [h as be e n ] en te re d int o.” Sh ay, 25 I l l

. 2d 447, 185 N
. E.2 d at 2 20. Thi s pre sents an obsta cl e fo r Cap i talTax b ec au se , un d er t h e I l lin ois Sta tu te of Fra u d s, a v alid contr act f orthe sal e o fl and m ust g ener ally be i n w ri ti ng. See 74 0 I LL . C OM P . S T AT . 8 0/2 ( 20 04 )
. Ca pi ta lTa x has no such w ri tte n agr eem ent; i t co ncedes t h at the c ontr act w as ora l. I l l i noi s co urts , however, have al so ro ut inel y r eco gni zed exce pt i o ns t o the S t a t ut e o fF r a ud s . T he r e l e v a nte xc e pti o n he re is par t per f o r m an ce . UnderI l l i no i s l aw, a c o ntr act i s t ake n outsi de the St atute o fFr auds i fthe buyer m ake s whole o r p ar ti alpaym ent o fthe pu rchas e pr i ce, tak es poss es si on o fthe proper ty andm ake s s ubstanti al and l ast i ng i m prove m ents to i t. See M anias v. Yeck, 11 Ill. 7 2d 51 2, 14 4 N .E .2d 59 6, 6 0 0 (1 9 57 ); Tho m a s v. M o o re, 55 Ill. A p p . 3d 90 7, 37 0 N .E .2d 80 9, 81 2 (Ill. C t. A p p . 197 7); M eyer v. Surkin , 262 I ll

. A p p . 83, 90 (I ll

. A p p . Ct
. 1931). Fu rthe r, the e vi dence m ust be “ re fer abl e” to the c ontr act

— that i s, i t m ust a ctual l y s ugges t the exi ste nce o fa a s al es agr eem en t. M cC a llister v. M cC a llister, 342 I l l

. 231, 173 N .E . 745, 74 8 (1 93 0); Wei r v. Wei r, 2 8 7 I l l

. 4 9 5 , 5 0 1

- 0 2 , 1 2 2 N. E.16 N o. 07

- 3744 868 (1919 ). I f th e actions that pu rp ort to s how pa rt pe rf o r man c e a r e e a s i l y e xp l a i ne d wi tho utr e fe r e nc e to a contr act, the St atute o fFr auds i s no t s ati sfi ed. A pp ro pri ate par o le vi den ce mustl ea ve “ no r ea so nabl e d ou bt in the mi nd o fthe c o ur t ” tha ta c o nt r a c th a s b e e n f o r med

. Wei r, 28 7 I l l

. at50 2, 12 2 N
. E. 868. C ap ita l T ax has p resen ted som e evide nc e to sup p ort each e l em ent o fpartper f or m ance

— parti alpaym ent, posse ssi on a nd valuabl e im prove m ents. B ut the proba ti ve valu e ofthe evi dence i s uncl ear . W i th r espectto part i al paym ent, Cap i tal Tax asse rt s that Dukattga ve Cap i talTax a chec k for $ 15 ,000. The checkst ate d that i s was f or “taxe s, ” which Capit alTax cl ai m s t o be a r efer ence to th e “ t a x e s” com p one nt of th e pu rch ase p rice. Sti ll, there i s no e vi den ce tha t th e ch ec ks pec i fi ca l l y r efe r s to the N at ion a l L ac q u er sit e. D u ka tt w or ke d w ith th e p rin c ip als ofCapit alTax on othe r d eal s a nd with o therpro perti es; th e c h ec k c ou ld ea sily h av e re fer re d to so m e o th er d ea l. Although i t m ayv ery wel ldi spl ayhi s si g na tu r e, the ch ec k is actual l y no t fro m Dukatt; i t i s fro m an e nti ty c a l l e d “ S n o wb a l l ’ s P l a z a . ” G i v e n the se u n c e r t a i n t i e s , we fi nd i t perp lexi ng tha t Capi talTax di d not a sk Du kat t a t hi s deposi ti on wh y he had w ri tte n the check. Cap i talTax al so ass er ts that Du kat t t oo k pos ses si on o f the pr oper ty and did w or k o n the gar ag e. It is uncl ear whethe r thi s wor kwoul d c o ns ti tu te “ l as tinga nd v aluabl e” i m prove m ents und er I l l i noi s l aw . M or e i m port antl y, again, w e d ou bt w he th er th is activi ty w as act ua ll y “referabl e ” t o the c o nt r a c t
. Du k a t t wa s l o o s e l y a ffi l i a t e d w i th Cap i talTax

— a “ fri end” ofthe cor pora ti on

— and, at ti m es,N o. 07

- 3744 17 he e ve n r epr es en te d hi m se l ft o b e “a g en t” of C ap ita lTa x. D u ka tt h ad freq u en t c on ve rs at ion s w ith th e p ri n c ip als ofCapit alT ax a bout the f aci l i ty. Per haps Du kat t, wh en he di d w or k o n the gar age , was w or ki ng under C api tal T a x’s d irection. W hile w e d o not kn ow the ex act n atu re ofthe re l ati onshi p between the parti es, Dukatt’ s pre sence atthe s i te do es notne ce ss ar i l y i m pl y tha t he was a ct i ng as i f h e o w n ed th e s ite
. The di s t r i c t c o ur t di d no t a ddr e s s the s e i s s ue s g i ven its d isp os itio n of th e c a s e . From th is re c or d , i t is d ifficu lt f o r u s t o d e t e r mi n e wh e th e r C a p i t a l T a x h a d a v a l i d a nd en for c ea b le c on tr ac t fo r th e s ale of lan d u n d er Ill i n ois l aw. I fthe r e i s no v al i d c o nt r ac t, the n Ca pi ta lTa x i s th e “o w n er ” u n d er § 10 7(a )(1) an d is liab le u n d er C E R C L A . I f ther e i s a val i d contr act and i fequi tabl e co nver si on appli es, Capit alTax i s no t the “o w n er ” un der § 10 7( a) ( 1) an d is n o t lia b le u n d er C E R C L A . Th e c as e w ill l ike ly tu rn on w h et h er th e fa c ts sh ow th at D u ka tt w as , in fac t, a bona fi de buyer

. Esp eci al l y g i ven the subst anti all i abi l i ty i n thi s ca se and the uncer tain ty s u rrounding m any o f the i ssu e s , i ti s n o tf o r u s t o r e s o l v e the m i n the f i rs t i nstance
. W e m ust r em and to the d i str i ct c ourtto gi ve fre sh and fullco nsi derat i on t o the quest i on wh ether Cap i talTax had an enf or ceabl e lan d sa l es contr act und er I l l i no i s l aw a nd whe th erthe do ct r i ne o fequ itabl e co nver si on a pp l i es i n thi s ca se.

III
. W e no w co ns i derCa pi ta lTa x’ s al te r na ti ve argum en t that i t s ho ul d no t b e he l d j o i nt l y a nd s e v e r a l l y l i ab l e f or18 N o. 07

- 3744

W e re i t er at e thatwe fo l l ow t he Res t at em en tan d co m m on 8 l aw “on l y to the e xt en tthat[ the y a re ] c om pat ibl e with the prov is ions ofCE R CL A
. ” Hercule s , 24 7F .3d at 71 7
. all the re m ova l cos ts and instea d b e f ound l i abl e f or on ly a por ti on o ftho se cos ts. U nl i ke the fi rs t i ssue, we can an swe r the di visibi l i tyque st i o n o n the r ec o r d b efo r e us be ca us e th er e ar e no s ubs ta nt ial di sa g r ee m en ts abo utthe f ac ts
. Onc e a par tyi s f o und to be l i ab l e unde r CERCLA, the p a r t y i s jointly and severally li able for allof th e E PA ’s re sp on se co st s , “r eg ar d les s o f th at p ar ty ’s re lat ive fau lt.” M e t ropol i t an Wat e rRe cl am at i on D i s t
. of Gr e at e rChi cago v . N or t h Am e r i ca n Gal vanizi ng & Coat i ng, Inc . , 473 F. 3d 824, 827 (7 thCi r . 2 00 7)
. Co ur ts , ho wev er, do r ec o g ni ze o ne j u d ici al l y c re ate d excepti on t o j oi nt and se ver all i abi l i ty un d er § 10 7(a). If a liable p arty can es tablish th at th e harm i s d ivis ible

— tha ti s , tha tthe r e i s a r e a s o nab l e me a ns o f appor ti o ni ng th e ha r m among th e r es po ns ibl e p arti es

— the n tha tp a r t y i s n o ts ubj e c tt o j o i nta nd s e v er al liab ility

. S e eUn i t e d S t a t e s v . To wn s h ip o f Br ight on , 15 3 F.3d 307, 317-18 (6th C ir. 1998). The conce pt ofdi vi sibi l i ty has l ar ge ly been deri ved fro m § 43 3A of th e R es ta te m en t (Sec on d ) of T or ts
. See, e . g. , U nit e d S ta tes v. A lca n A lum inu m C o rp . (A lcan III) , 31 5 F.3 d 17 9, 18 6 (2d C ir . 2 0 0 3 ); U ni t e d S t at e s v. M ons ant o Co. , 858 F. 2d 160, 17 1- 72 ( 4th Ci r. 1988 )
. S om e co urts have n ot ed th at th e “ fit” be tw ee n § 43 3A an d C E R C L A is a c t ua l l y qui t e u nc l e a r : § 4 3 3 A f o c us e s o n c a usati on w hi l e CER CL A i s a st ri ct l i abi l i ty sta tute. Se eBur l i ngt on 8 N o rthern , 520 F.3d at93 7-3 9; Hercules , 2 4 7 F
. 3 d a t71 5- 16.N o. 07

- 3744 19

Divi s ib ility ana l ys i s “br i ngs c aus at i on pri nc i pl es i nt o the 9 case

— thr ough the bac kdoor, aft erbe i ng de ni ed e nt ry atthe f ront door. ” U n ited S tates v . A lcan A lum . C orp . ( A lcan II) , 990 F. 2d 711, 722, ( 2d C ir
. 1993) ( quotati ons om it ted)

. It“has the potenti al to ev isc er a te th e str ic t lia b ili ty p ri n ci p le s o fC E R C L A ,” B u rl i n gton Norther n , 52 0 F
. 3d a t94 0, “becau s e defen dant s who can sho w tha t the h arm is d iv isible .

. . c o u ld w hittle th eir li abili ty t o zero. ” Tow nship of Bright on , 15 3 F .3d at 31 8. Th u s, w e h a v e st a te d th a t d iv isi b ili ty is a “r a re sce n a ri o .” M et ropoli tan Water, 473 F. 3d at 827 n. 3. The Resta tem ent doe s s ugges t, however, thatl i abi l i ty c an b e a pp or ti oned i fCapit alTax can s how thati ts p or tio n of th e d a m ag es is su sc ep tib le of a “re as on ab le est i m ate
. ” In re B ell P etroleu m Servs. , 3 F. 3d 88 9, 904 ( 5th Ci r . 1 99 3)
. Di vi sibi l i tyi s th e ex ce pti o n, ho wev er, no t th e rul e. M e t rop o lita n Wa ter, 4 73 F
. 3d at8 27n. 3. Thu s, the 9 burden ofes tabl i shi ng di vi sibility i s o n the defe nd ant. SeeAlcan III

, 31 5 F
. 3d at 185. O n e me th o d o fc r e a t i nga r e a s o n ab l e e s t i ma t e o fd a mag es is t o s h ow th at th e c on ta m in at ion atth e fa c ility is ge og ra p h i c a l ly d ivis ible

. Se e, e . g. , C hem -N uc lea r Sy stem s, Inc
. v. B ush , 292 F. 3d 254, 255 (C. A
. D.C. 20 02)
. A l andow ner c an es ta b lish d ivis ibilit y b y “ d em on st ra tin g a rea so n ab le ba si s f o r conc ludingtha t a ce r ta i n pr o po r ti o n o fthe conta m i nati on di d not o ri gi nate on the p or ti on o f the f aci l i ty that the l andow ner own ed. ” Bur l ington Nor t hern , 5 20 F
. 3d at9 38
. Ty pi ca l l y, this w i l li nv o l ve s ho wi ng th at th e “ sit e c on sis ts of n on - c o n tig u ou s a re as of so il c o nt a mi na t i o n. ” H e r cu les , 2 47F
. 3d at7 17

- 18 ( quo ta ti o ns o m i tt ed)

. I t i s di ffi cul t to pr ove d i vi sibi l i tywhenthe20 N o. 07

- 3744 fac ility fu n c tio n ed as a “d yn am ic, u n i t ar y op er at ion ” in whi c h mat e r i a l s we r e mo v e d fr o m l o c a t i o n t o l o c ati on d u rin g t h e p ro d u c tio n p ro c es s. B urlin gto n N o rthern , 52 0 F. 3d at 958. Fur ther, the “m i gr ato ryp ote nti al ” and “a ctual mi g r a t i o n” o f the r e s ul t i ng t o xi c s ub s t a nc e s c a n pre c l ud e a fin d in g of d ivis ibilit y. SeeO ’Nei l , 88 3 F
. 2d at 178- 79. C om m in glin g a n d cr os s -c on ta m in at ion w ill ofte n ind ic at e a n ind ivis ible fac ility

. SeeAlcan III , 31 5 F
. 3d at 186. C ap ita l T ax ’s a rg u m e n t t h at th e h ar m is d ivis ible in thi s c a s e i s b a s e d e nt i r e l y o n pr o pe r t y l i ne s . Ca pi tal Tax ar gue s th at i t ca nno t be l i ab l e f o r th e two par ce l s o f la nd that i t doe s no t o w n. But the EPA has bro ad di scr eti on i n defi ni ngthe b o unda r i es o fa pa r ti cul arf ac i l i ty, a nd the boundar i es a r e no r m al l y b as ed o n the e xt en t o fthe c o nta m i n a t i o n . Se eTowns hip of Br ight on , 1 53 F
. 3d at3 13
. The b o un da r i e s o fthe f a c i l i t y do n o tn e c e s s a r i l y r e fl e ct p r o pe rt y b ou n d ar ies , s e ei d. , a nd l i ab i l i tyc ane xt en d b ey o nd w h at th e d efe n d an ts ac tu ally ow n . Se eBur ling t on N o rthern , 52 0 F
. 3d at 943- 44 ( re sponsibl e par ty own ed 19 % of th e fa c ility ); U ni t e d St at e s v. Rohm & Haas Co. , 2 F. 3d 12 65 ( 3d Ci r . 1 99 3) ( r es po ns ibl e party o wned 1 0% o fthe facil ity). I n th e p r e s e ntc a s e , c o nt a mi na t i o n wa s f o un d o n al m os t ev er y par celo fthe f aci l i ty. Fur ther, al lo fthes e p ar c els are co n ti g u o u s. C ap ita l T ax ’s p ar c els are ac tu ally i nter spers ed w i th Ler ch’s p ar cel s. P ar cel s 8 and 10, wh i ch ar e o wned b y Le r ch, f o r m ed the m ai n mi xi ngr o o m a nd the pi gm ent r oo m . P ar cel9, wh i ch i s o w ned by Capi tal Tax, con ta in ed the ro l l erm i l lr oo m and w as si tuate d ri ght b etween Par cel s 8 and 10. Door s co nnected the thre e parce l s, and the r oll erm i l lr oo m and the pig m ent r oo mN o. 07

- 3744 21 both em pti ed out onto the sto ra ge ya rd . Furthe r, Capit al Ta x o wned th e par ce l to th e no r th o f Pa r ce l s 8 an d the parce lto the so uth ofPar cel10
. The EPA ’ s S i te Sk etch r ev ea l s th at, whi l e co nt aine r s wer e f o und a l lo ve r the prem i ses , m any were co ncentr ate d on thes e three parce l s a nd i n the sto ra ge yar d sh ared by Cap i talTax an d Le r ch

. W hen the f acto rywas i n oper ati on, m ate ri al s pass ed thro ugh al lthes e r oo m s a t s om e point i n the producti on proce ss

— th at is, it w as a “d yn a m i c , un ita ry op er at ion .” B urlin gto n No rthern , 520 F. 3d at 958. A s th e d istri c t c o u rt note d, Cap i tal Tax’s m i sta ke i s i n att em pti ng to apport i on li abili ty base d on w he re the h aza r d ou s m aterials w ere l o cate d on th e daythe y wer e r emov ed. Tho se ha za r do us m ate ri al s co uld e asily h ave or i gi nated i n another part of the pl ant. A s in the gam e o f“m usi cal c h airs, ” the f act th at the chem i cal s ca m e t o re st i n any parti cul arpl ace w hen producti on e nd ed w as l ar gel y happenstance

. Thus, Cap i talTax c an n ot show that the haz ar dous subst ances f ound j ust o utsi de i ts proper ty l i nes d id not “ or i gi nate” on its p ro p er ty
. B urlin gto n N o rthern , 52 0 F
. 3d at 938. M o r e i m po r ta nt l y, the r e i s undi spu te d evi den ce tha t th e products a n d chem i cal s co nti nued to m i gr ate betw een par ce l s afte r o per at i o ns at th e f ac i l i ty ha d ce as ed. Co nt ainer s wer e det er i o r at i nga nd l ea k i ng . Inde ed, p ainta nd o th erc he m i ca l s m i xe d wi thr ain wat erfr o m the l ea k i ng r o o fa nd wer e was he d to otherpa r ts o fthe b ui l di nga nd ont o the stree ts. C he m icals w ou ld evap o r a t e i nt o the air, leav i ngr es i n tha t co ul d e as i l y t r av elt o c o nt i g uo us pa rcels. Fu rthe r, i t is un d ispu ted that i nd ivi d ua ls w ere22 N o. 07

- 3744

ac tu al l y movingc o nt aine r s fr o m pa r ce lt o pa r ce l, s pi l l i ng pai nt and othersubst ances i n the proce ss. I t i s i m m ate ri al whethe r Ca pi ta lTa x a ctua l l y move d a ny o fthe se c o ntainers bec ause i t f ai l ed to se cure the p re m i ses fro m th i r d pa r ti es a nd, i n g en er al, tur ne d a b l i nd eye t o the proper ty. Beca us e we h a v e c o m m i ngl i ng, cr oss - conta m i natio n an d m igr at io n oc c u rrin g on a sit e t h at form er ly o per at ed as a s i ng l e, uni ta r y o per at i o n, there i s no b as is for ap p or tio n m en t. See B urlin gto n N o rthern , 52 0 F
. 3d at 956- 58. F i na l l y, Ca pi ta lTa x b el i ev es tha t the co st s ca n b e r ea so nab l y a ppo r ti o ne d b ec au se the EPA t r ac k ed an d do cum en te d a l lth e c ont aine r s th atwer e r emov ed fr o m the si te. W e no te that the r el evant docum ent doe s no t a pp ear to i ncl ud e the co sts as soc i ate d w i th cl eani ng the f aci l i ty, ex ca va ting th e co nt ami na te d g r o und o r se al i ng o ff th e tanks

. N ordoes i t incl ud e t ra velco sts , payr ol lco sts , i nd i re ct c ost s, Departm ent o fJ usti ce e nfo rce m ent c ost s or i nt erest. M ore i m p ortan tly, the fact th at con tainers w er e a ctual l y m ove d fr om parc elto parc elr ai ses r eal doubt s ab o ut the r e l e v a nc e o f whe r e a l l the c o nt a i ne rs o f wa s t e we r e o n the da t e o fr e mov a l

. P utsi mpl y, a CER CLA own erm ay not m ove b ar re l s o fhaza rdous substa nces ac ro ss p ro p er ty line s ( o r a l l o w th em to be so m ov ed ) in o r d e r t o r e d u c e i t s l i ab i l i t y u n d e r C E R C L A.

I V. C ap ita l T ax als o a rg u es t h a t th e d ist ric t jud ge err ed in ass ess i ng co sts and p enal ti es base d on the re m ova lo f was te fr o m pa rcels 8 a nd 1 0. On Augus t 15 , 2 00 3, the E PA i ssu ed a U A O directing Ca p ital T ax to “pe rformN o. 07

- 3744 23

r emov ala ct i o n wi th i n the S i te whi chi s o wned b y Re spo nden t o r t o whi chRe spo nde ntha s m o ve d ha za r do us w astes
. ” C ap ital Ta x fail ed to com p ly w ith th is or d er. C E R C L A p ro vid es th at an y p er so n “w h o, w ith ou t s u ffic i e nt c a us e , wi l l ful l y v i o l a t e s , o r f a i l s o r r e fus es to com plywith, any or der ofthe Pres i dent u nd ersubse cti on ( a) o fthi s S ecti on m ay . . . be fi ned not m or e than [ $27, 500] f orea ch d ay in w hi ch such vi ol ati on o ccurs o r such fai l u r e t o c om p ly c on tin u es .” 42 U .S.C . § 96 06 (b ) (1). A “s u fficie n t c au se ” f o r f ailin g t o c om p ly is a rea so n ab le b e l i e fth a to n e i s n o t l i ab l e u n d e r C E R C L A. See U nited St at e s v. Barkm an , N o. CIV. A
. 96- 6395 , 1998 W L 96201 8, at * 17( E. D. Pe nn. De c. 17, 1 99 8)
. Be ca us e we a r e r emandi ng th i s ca se to di st r i ct co ur t o n th e i ss ue o f l i ab i l i ty, we f in d i t appr o pr i at e to v ac at e th e awar d o fda m ages. The d ist ric t c ou rtm ay rea ss es s th e is su e o f p en a l t i es , i f it deem s that a cti on nece ssa ry, after r eso l vi ng the l i abi l i ty i ssue.

V. For the r ea so ns di sc us se d abo ve , the de ci si o n o fthe dist ri ct c ourti s V ACATED and the c as e R EMAND ED f or fur th erpr o ce eding s i n a cc o r d wi ththi s o pi ni o n.

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