Opinion ID: 3012864
Heading Depth: 4
Heading Rank: 1

Heading: Ownership or Possession

Text: The District Court addressed the issue of ownership or possession, and found that “the record evidence shows” that Tenneco did not own or possess the PVM that was processed at the plant. (App. at 12-13). The Court based its finding on two conclusions. First, the Court reasoned that whether Tenneco purchased the PVM through a broker or from the plant directly, the “ownership” alleged by Morton was a bookkeeping function done solely for the purpose of minimizing the plant’s financial risk in the volatile mercury market. And second, the Court determined that there was not a “showing that Tenneco was the necessary source of the PVM,” or that “Tenneco was a manufacturer of PVM.” Id. at 13. We will look first at the District Court’s conclusion that the “toll” or “conversion” transactions used by the plant were solely for the purpose of minimizing the plant’s financial risk in the volatile mercury market. One problem 18 with this conclusion is that it is an inference drawn in favor of Tenneco rather than Morton, the party opposing the motion. Another problem is that the conclusion inappropriately resolves a material factual dispute. Citing the plant brochure and the deposition testimony of several former plant managers, Morton explains that the plant customers, including Tenneco, had the option of supplying their own PVM and storing it in the plant’s vault or purchasing it directly from the plant. If the customer chose the first option, the plant would charge for the processing of the PVM into ROM or YOM and for insuring the mercury while it was stored at the plant, but the customer owned the mercury “at the beginning, middle, and end of the process.” (Morton Brief at 13) (citing App. at 660, 881, 458). In fact, one plant manager testified that when customers supplied PVM for processing, the customers continued to hold title to it while it was at the plant. Id. (citing App. at 238-240). Morton asserts that Tenneco was “a major conversion customer” from at least 1963 to 1973, and that it supplied significant amounts of PVM to the plant for processing. (Morton Brief at 13-14) (citing, inter alia, numerous weekly Physical Inventories and weekly Customer Ownership Reports documenting the number of Tenneco-owned pounds of mercury stored at the plant and converted into ROM and YOM). To be sure, Tenneco disputes Morton’s contention that it owned the PVM throughout the process. Tenneco contends that the plant used certain billing methods (which look like “conversion” or “toll” agreements) “to protect itself from the price volatility of the mercury market and the associated financial risk . . . .” (Tenneco Brief at 6). Tenneco also asserts that the PVM it allegedly owned was never segregated or labeled as belonging to it at any point in the process. Id. at 21-22 (citing App. at 533-34). In fact, Tenneco maintains that the customer-delivered PVM was not the actual mercury used to manufacture that customer’s ROM and YOM because mercury is homogeneous; instead the mercury was added to the plant’s inventory, like money in a bank. Id. at 22-23 (citing App. at 635-38, 533-34, 472-73). (Thus, Tenneco’s ownership of the PVM that was converted at the plant on 19 Tenneco’s behalf is very much in dispute. Morton has submitted evidence, including plant records and the testimony of former plant managers, from which it is fair to infer that Tenneco owned the PVM (regardless of whether it purchased it from the plant or a third party) throughout the conversion process. Proof of ownership, of course, is one of the principal factors in the “arranger liability” analysis. Therefore, this evidence is sufficient to withstand Tenneco’s motion for summary judgment.7