Opinion ID: 3011247
Heading Depth: 2
Heading Rank: 3

Heading: The Act's Effect on The Summary Judgment

Text: Having concluded that the Superfund Recycling Equity Act applies retroactively, the next issue is whether the Act exempts appellants from liability. Under the Act, a person who arranged for recycling of a recycling material is exempt from CERCLA liability with respect to that material. See 42 U.S.C. S 9627(a)(1). The Act defines a r ecyclable material to include, inter alia, spent lead-acid batteries. See id. S 9627(b). That definition is not limited to the lead contained in spent lead-acid batteries, nor to its casing, nor to any other individual or combination of individual components. The Act plainly and unambiguously defines the entire spent lead-acid battery as a r ecyclable material. See id. [A] transaction involving spent lead-acid batteries . . . shall be deemed to be arranging for recycling if the 16 person who arranged for the transaction (by selling[the lead-acid batteries] or otherwise arranging the r ecycling of [the lead-acid batteries]) can demonstrate by a preponderance of the evidence that at the time of the transaction: (1) The [spent lead-acid battery] met a comm ercial specification grade. (2) A market existed for the [spent lead-acid b attery]. (3) A substantial portion of the [spent lead-ac id battery] was made available for use as feedstock for the manufacture of a new saleable product. (4) The [spent lead-acid battery] could have been a replacement or substitute for a virgin raw material, or the product to be made from the [spent lead-acid battery] could have been a replacement or substitute for a product made, in whole or in part, fr om a virgin raw material. Id. S 9627(c), incorporated by reference into S 9627(e)(1).2 The parties' primary disagreement on this issue concerns whether the spent lead-acid batteries in question could have been a replacement or substitute for a vir gin raw material as the fourth element requires. Appellants argue that the requirement applies only to those portions of a spent lead-acid battery that are recyclable. Gould, on the other hand, argues that the replacement or substitute provision applies to the whole battery and that the Act does not apply unless every component of the spent leadacid battery at issue is recyclable, and each component can be a replacement or substitute for a vir gin material. Appellee's Br. at 38-54. Stated differently, Gould concedes the third element requires only that a `substantial portion' of the recyclable material was in fact made available for use as a feedstock in a manufacturing process. Appellee's Br . at 38 (emphasis added). But Gould argues that the fourth element requires _________________________________________________________________ 2. The Act's additional requirements for exemption from liability are not at issue in this case. See 42 U.S.C. S 9627(c), incorporated by reference in S 9627(e)(1); id. S 9627(i)(e)(2)(A). 17 a purported recycler seeking the protection of the statute to show that all, not just a `substantial portion' as in element 3, of the recyclable material `could have been' either a direct or indirect replacement for a raw material. Id. (emphasis added). Thus, Gould concludes, appellants are not covered by the Act because they sold Marjol spent leadacid batteries made with non-recyclable rubber casings. Gould's argument, and therefore its conclusion, fail for several reasons. First, the language of the Act itself belies Gould's argument. As previously noted, the Act defines a recyclable material to include the entir e spent lead-acid battery. It makes no distinction between spent lead-acid batteries that are wholly recyclable, and those that contain non-recyclable components. This lack of distinction is all the more significant when considered in light of the Act's purposes, and the context in which it was passed. For instance, one of the Act's purposes is to r emove the disincentives and impediments to recycling cr eated as an unintended consequence of the 1980 Superfund liability provisions. S. 1948 S 6001(a)(3), as enacted at 113 Stat. 1501A-598-99. In other words, Congress intended the Act to overrule court decisions holding bona fide sellers of recyclable materials liable under CERCLA. See, e.g., 145 Cong. Rec. S10391-01, S10431 (August 5, 1999) (Statement of Senator Lott) (noting that the Act was intended to remove[ ] an unintended consequence of the Superfund statute including court decisions holding that recyclables are materials that have been disposed of and ar e therefore subject to Superfund liability). Second, it is clear from the Act's legislative history that Congress realized not all components ofrecyclable materials, including spent lead-acid batteries, are recyclable. For instance, the legislative history placed on the record for S. 1528 explains that: for a transaction to be deemed arranging for r ecycling, a substantial portion, but not all, of the r ecyclable material [e.g., a spent lead-acid battery] must have been sold with the intention that the material would be used as a raw material, in place of a virgin material, in the manufacture of a new product. 18 145 Cong. Rec. S14986-03, S15049 (November 19, 1999) (emphasis added). Other unequivocal evidence that Congress did not intend to require that a recyclable material be 100% recyclable can be found throughout the Act's six-year legislative history. According to that history: The first part of [the fourth element] acknowledges the fact that modern technology has developed to the point where some consuming facilities exclusively utilize recyclable materials as their raw material feedstock and manufacture a product that, had it been made at another facility, may have been manufactur ed using virgin materials. Thus, the fact that the recyclable material did not directly displace a virgin material as the raw material feedstock should not be evidence that the requirements of [S 9627(c)] were not met. Secondary feedstocks may compete both dir ectly and indirectly with virgin or primary feedstocks. In some cases a secondary feedstock can directly substitute for a virgin material in the same manufacturing pr ocess. In other cases, however, a secondary feedstock used at a particular manufacturing plant may not be a dir ect substitute for a virgin feedstock, but the pr oduct of that plant competes with a product made elsewhere from virgin material. For example aluminum may be utilized at a given facility using either vir gin or secondary feedstocks meeting certain specifications. In this case, the virgin and secondary feedstock materials compete directly. A particular steel mill, however, may only utilize scrap iron and steel as a feedstock because of the design restrictions of the facility. If that mill makes a steel product that competes with the steel product of another mill, which utilizes a vir gin feedstock, the conditions of this paragraph have been met. In this example, the two streams of feedstock materials do not directly compete, but the pr oduct made from them do. It is the intent of this paragraph that the person be able to demonstrate the general use for which the feedstock material was utilized. It is not 19 the intent that the person show that a specific unit was incorporated into a new product Id. Thus, the language of the fourth element is intended to explain when a recycling transaction is deemed to displace the use of virgin raw materials, not to r estrict the Act's coverage to materials that are 100% recyclable.