Opinion ID: 579513
Heading Depth: 3
Heading Rank: 2

Heading: Was it error to deny the motion?

Text: 28 J-H sought partial summary judgment on the issue of whether Beazer had arranged for disposal of toxic substances, and was thus itself liable under CERCLA. CERCLA imposes liability on 29 any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at any facility owned or operated by another party or entity and containing such hazardous substances ... 30 42 U.S.C. § 9607(a)(3). 31 CERCLA does not define the term arranged for. Disposal is defined as 32 discharge, deposit, injection, dumping, spilling, leaking, or placing of any solid waste or hazardous waste into or on any land or water so that such solid waste or hazardous waste or any constituent thereof may enter the environment or be emitted into the air or discharged into any waters, including ground waters. 33 42 U.S.C. § 6903(3); see also 42 U.S.C. § 9601(29) (adopting definition in 42 U.S.C. § 6903). 34 We have not yet addressed the issue of when liability for arranging for disposal will attach. Several courts of appeal and district courts around the country have, however, considered this question. See, e.g., Florida Power & Light Co. v. Allis Chalmers Corp., 893 F.2d 1313 (11th Cir.1990) (discussed in footnote 2); United States v. Aceto Agric. Chems. Corp., 872 F.2d 1373 (8th Cir.1989) (discussed below); CPC Int'l, Inc. v. Aerojet-Gen. Corp., 759 F.Supp. 1269 (W.D.Mich.1991); B.F. Goodrich Co. v. Murtha, 754 F.Supp. 960 (D.Conn.1991); United States v. Shaner, 1990 WL 115085 (E.D.Pa.1990); United States v. Velsicol Chems. Corp., 701 F.Supp. 140 (W.D.Tenn.1987). 35 An Eighth Circuit case on this issue presents facts very similar to those before us here. In United States v. Aceto Agric. Chem. Corp., 872 F.2d 1373 (8th Cir.1989), that court refused to dismiss the United States' claim against pesticide companies which had hired a formulating company to perform certain processes on pesticides they supplied to the formulator. The pesticide companies retained ownership of the pesticides they supplied. According to the complaint, toxic waste was generated through spills and through the operations of the formulator. The court rejected the pesticide companies' argument that they could be liable only if they intended to dispose of waste, noting that such a narrow reading would frustrate CERCLA's goal of making companies that are responsible for the production of hazardous waste pay for cleanup. Aceto, 872 F.2d at 1380. The court also noted it would go beyond defendants' characterizations to determine whether a transaction in fact involves an arrangement for the disposal of a hazardous substance. Id. at 1381. Finally, noting that the defendants before it owned the toxic substances at issue, it rejected the argument that they were not liable because they had no authority to control the formulator's operations. Id.; see also United States v. Velsicol Chem. Corp., 701 F.Supp. 140 (W.D.Tenn.1987) (refusing to dismiss a case under this provision against companies which had done business with a chemical blending company whose plant was a contaminated site). 36 Here, Aceto and, indeed, the language of the statute itself, suggest that the district court erred in denying partial summary judgment in favor of J-H. No issues of material fact remain. Under the agreement, Beazer retained ownership of all materials it supplied to J-H. Materials it supplied to J-H included pentachlorophenol and tetrachlorophenol, substances ultimately classified as hazardous by CERCLA. The agreement between Beazer and J-H contemplated 2% spillage of materials. Thus, it is clear that under the agreement Beazer arranged for disposal of toxic substances within the meaning of section 9607. 2 37 Therefore, the district court erred in denying J-H's motion for partial summary judgment.III. Attorneys' Fees 38 The district court awarded attorneys' fees to Beazer; Beazer also requests fees on appeal. 39 The California Supreme Court has not yet determined whether an indemnitor can recover attorneys' fees for prosecuting its indemnity claim, and California Courts of Appeal are divided on this issue. Compare Nicholson-Brown, Inc. v. City of San Jose, 62 Cal.App.3d 526, 133 Cal.Rptr. 159 (1976) (awarding indemnitee attorneys' fees for successful suit against indemnitor); Schackman v. Universal Pictures, 255 Cal.App.2d 857, 63 Cal.Rptr. 607 (1967) (same) with Hillman v. Leland E. Burns, Inc., 209 Cal.App.3d 860, 257 Cal.Rptr. 535 (1989) (indemnitee not entitled to attorneys' fees for action against indemnitor to establish right to indemnity); County of San Joaquin v. Stockton Swim Club, 42 Cal.App.3d 968, 117 Cal.Rptr. 300 (1974) (same); Doyle v. Pacific Tel. and Tel., 202 Cal.App.2d 708, 21 Cal.Rptr. 326 (1962) (same). In DeWitt v. Western Pac. R.R. Co., 719 F.2d 1448 (9th Cir.1983), we noted this split in authority, but chose to follow the Schackman line of cases and held that under California law, the indemnitee can recover attorneys' fees for an action against the indemnitor. 3 However, because the district court must determine on remand the outcome of the case, we vacate the district court's award of attorneys' fees and decline to award fees on appeal at this time. While the district court correctly found that Beazer was entitled to indemnity for any liability it incurred as a result of J-H's unlawful acts, it erred in holding that Beazer itself had incurred no liability as a result of its own actions. When it has determined to what extent each party is responsible for cleanup costs, the district court should reconsider the issue of attorneys' fees both for services before the district court and for this appeal.