Court Opinion

ID: 194703
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:23:07+00
Date Added: 2024-06-11T17:26:37.487741
License: Public Domain

May 4, 1993
                                           
No. 92-1040
             IN RE HEMINGWAY TRANSPORT, INC., ET AL.,
                             Debtors,

                                    

             JUNIPER DEVELOPMENT GROUP, ETC., ET AL.,

                           Appellants,

                                v.

                      HERBERT C. KAHN, ETC.,

                            Appellee.

                                           
No. 92-1095

             IN RE HEMINGWAY TRANSPORT, INC., ET AL.,
                             Debtors,

                                    

             JUNIPER DEVELOPMENT GROUP, ETC., ET AL.,

                                v.

                      HERBERT C. KAHN, ETC.,

                            Appellant.

                                           
No. 92-1289

             IN RE HEMINGWAY TRANSPORT, INC., ET AL.
                             Debtors,

                                    

             JUNIPER DEVELOPMENT GROUP, ETC., ET AL.,

                           Appellants,

                                v.

                      HERBERT C. KAHN, ETC.,

                            Appellee.

                                           

No. 92-1290

             IN RE HEMINGWAY TRANSPORT, INC., ET AL.,

                             Debtors,

                                    

             JUNIPER DEVELOPMENT GROUP, ETC., ET AL.,

                            Appellees,

                                v.

                      HERBERT C. KAHN, ETC.,

                            Appellant.

                                           

          APPEALS FROM THE UNITED STATES DISTRICT COURT

                FOR THE DISTRICT OF MASSACHUSETTS

             [Hon. Rya W. Zobel, U.S. District Judge]
                                                    

                                           

                              Before

                    Torruella, Cyr and Boudin,

                         Circuit Judges.
                                       

                                           

   Roy P. Giarrusso with  whom Louis N. Massery and  Cooley, Manion,
                                                                    
Moore & Jones, P.C. were on brief for appellants.
                 
   William F. Macauley  with whom  Martin P. Desmery  and Craig  and
                                                                    
Macauley were on brief for appellee.
      
   Martin P. Desmery for trustee appellee in cross-appeal.
                    

                                           

                                           

          CYR, Circuit  Judge.   The bankruptcy  court disallowed
          CYR, Circuit  Judge.
                             

the contingent claim Juniper  Development Group ("Juniper") filed

against the consolidated chapter 7 estate of Hemingway Transport,

Inc.  ("Hemingway") and Bristol  Terminals, Inc.  ("Bristol") for

anticipated  response costs  for the  removal and  remediation of

hazardous substances discovered  on property previously purchased

by Juniper from  the Hemingway-Bristol chapter  11 estate.   Jun-

iper's  companion claim  for  cleanup-related  attorney fees  was

disallowed  as well.   The  district court  affirmed and  Juniper

appeals.   The  chapter 7  trustee ("trustee")  cross-appeals the

allowance of Juniper's  priority claim for past  cleanup costs as

an administrative expense.

                                I

                            BACKGROUND
                                      

          Between 1963  and 1982, Hemingway and  Bristol continu-

ously  owned or  operated a  trucking  business conducted  from a

twenty-acre  parcel  of  land  located  in Woburn,  Massachusetts

("facility").1   In  May  1980, the  Massachusetts Department  of

Environmental  Quality  Engineering  (DEQE) discovered  seventeen

corroded drums  leaching a semi-solid, tar-like  substance onto a

13.8 acre "wetlands" area at the facility.  DEQE informed Heming-

way that  the substance  contained petroleum constituents.   DEQE

                    

     1Hemingway began business operations at the facility shortly
after  acquiring it in 1963. In 1974, Hemingway sold the facility
to Woburn Associates, but  continued to occupy it under  a lease-
back arrangement with Woburn.   In 1980, Bristol, a  wholly owned
Hemingway subsidiary, acquired the facility from Woburn.

                                4

received  assurances  from  Hemingway  that the  drums  would  be

removed.  The drums were still at the facility when DEQE conduct-

ed its last site inspection, in August 1982.

          In July  1982, Hemingway  and Bristol filed  chapter 11

petitions.  With the approval of the  bankruptcy court, appellant

Juniper,  a local  land  developer, purchased  the facility  from

debtor-in-possession Bristol for $1.6  million on April 29, 1983.

Prior to the purchase, Juniper's representatives conducted an on-

site inspection but did not walk the wetlands area where DEQE had

discovered  the drums;  Juniper contends that  the area  was sub-

merged at the time.  Seven months  after the sale, the Hemingway-

Bristol chapter  11 reorganization proceeding was  converted to a

chapter 7  liquidation proceeding,  and a  chapter 7 trustee  was

appointed.

          In April  1985, drums  containing various  solvents and

pesticides classified as "hazardous substances" under the Compre-

hensive  Environmental Response, Compensation,  and Liability Act

("CERCLA"),  42 U.S.C.    9601-9657,  9601(14) (1981),  were dis-

covered at the facility, in the same wetlands area, by the United
                                                  

States  Environmental Protection  Agency ("EPA").   The following

December,  Juniper, then  the "owner"  of the  facility, received

notice that the EPA considered Juniper a "potentially responsible

party" ("PRP") under CERCLA, see id.   9607(a).  Shortly thereaf-
                                    

ter the EPA issued  an administrative order requiring Juniper  to

remove  the  hazardous substances  from the  facility at  its own

                                5

expense.  See  id.   9606.   Juniper claims  $92,088 in  response
                  

costs incurred pursuant to the EPA administrative order.2

          Juniper initiated  an adversary proceeding  against the

Hemingway-Bristol   estate  for  CERCLA  response  costs  already

incurred  under  the  EPA  administrative order  and  for  future

response costs  required to complete the  anticipated cleanup and

remediation.   Initially, the bankruptcy court  denied the trust-

ee's  motion for summary judgment on Juniper's CERCLA claim.  The

court  determined  that  Juniper's CERCLA  claim,  if  ultimately

allowed, would be entitled to priority payment from the chapter 7

estate as  an administrative  expense of  the chapter  11 estate,

since Juniper's exposure to CERCLA liability had arisen  from its

postpetition agreement to purchase  the facility from the chapter

11 estate.    In re  Hemingway Transp.,  Inc., 73  B.R. 494,  505
                                             

(Bankr. D. Mass. 1987) (citing Reading Co. v. Brown, 391 U.S. 471
                                                   

(1968)).3

                    

     2Juniper alleges  that an engineering firm  was paid $30,208
to remove the drums;   an environmental consulting firm  was paid
$7,880 to monitor  the removal  action; and a  law firm was  paid
$54,000 to ensure adequate compliance with the EPA order.
     In April 1988, EPA demanded $2.1 million in CERCLA contribu-
tion  from Juniper  for costs  incurred by  EPA in  assessing and
evaluating the site.   The PRP notice advised that  Juniper would
be  notified  of future  "cleanup response  costs"  as well.   In
February  1989, EPA sent PRP notices to Hemingway and Bristol, as
former owner-operators of the facility.  See infra note 9.
                                                  

     3Although count I of the original Juniper  complaint did not
assert a right to CERCLA contribution, when the trustee's  motion
for summary judgment on  count I was denied the  bankruptcy court
allowed Juniper to amend count I  to assert a claim for contribu-
tion under 42 U.S.C.   9607(a).  In re Hemingway Transp., 73 B.R.
                                                        
at 507-08. See  also infra note  20.  The  court entered  summary
                          
judgment for the trustee  on count II, which alleged  a breach of
warranty by Bristol, and on Count III, which sought rescission of

                                6

          The trustee renewed the  motion for summary judgment on

Juniper's claim for  future response costs, and  moved for recon-
                           

sideration of the  "administrative expense priority" ruling  pre-

viously entered by  the bankruptcy court.   The bankruptcy  court

then  disallowed  Juniper's  claim  for  future  response  costs,
                                               

pursuant to Bankruptcy  Code   502(e)(1)(B), 11  U.S.C.   502(e)-

(1)(B), on the ground that Juniper was the holder of a contingent

CERCLA  contribution claim  based on  a debt  owed EPA  for which

Juniper,  Hemingway,  and  Bristol  were  jointly  and  severally

liable, in connection  with which  Juniper had yet  to incur  any

liability  by the  time of  the allowance  of its  claim.   In re
                                                                 

Hemingway Transp.,  Inc., 105 B.R.  171, 176-78 (Bankr.  D. Mass.
                        

1989).    The  bankruptcy  court reaffirmed  its  earlier  ruling

entitling Juniper to administrative expense priority on its claim

for past response costs.
        

          Following trial  on Juniper's $92,088 claim  for CERCLA

response costs previously  incurred, the  bankruptcy court  ruled

that Hemingway  and Bristol were responsible  parties "liable" to

the EPA,  as they either  owned or  operated the facility  at the

                    

the land-sale agreement on  the ground of fraudulent misrepresen-
tation.  As  to count II, the bankruptcy court  held that Juniper
had  forfeited any  right to  recover for  breach of  warranty by
representing in the contract  that it had "made all  such inspec-
tions of the premises as [it] wishe[d] to make."  Id. at 506.  As
                                                     
to  count III, the bankruptcy  court held that  Juniper failed to
allege fraud with the requisite particularity.  Id. (holding that
                                                   
Massachusetts  law  requires  more  than proof  of  the  seller's
nondisclosure  of  a known  defect;  it requires  proof  that the
seller  deliberately  concealed,  or  prevented  the  buyer  from
discovering,  known defects).   Juniper  does not  challenge this
bankruptcy court ruling.

                                7

time a passive "disposal" of hazardous substances occurred at the

facility.    In re  Hemingway Transp.,  Inc.,  108 B.R.  378, 380
                                            

(Bankr.  D. Mass.  1989) (holding  that CERCLA  liability arising

from  "disposal"  need  not  result from  affirmative  acts,  but

encompasses "leaking" of previously deposited waste during  PRP's

ownership) (citing  United States v. Waste Indus., Inc., 734 F.2d
                                                       

159, 164 (4th Cir. 1984)).  Significantly, however, the bankrupt-

cy  court noted no  evidence that Hemingway  or Bristol, notwith-

standing their continuous ownership or possession of the facility

for  a  period of  twenty  years, either  generated  or deposited

hazardous wastes at the facility.  Id. at 380.
                                      

          The bankruptcy  court allowed Juniper's  claim for past

response  costs in  the amount  of $38,763  as  an administrative

expense entitled to priority payment, id. at  382, but disallowed
                                         

the  $54,000 claim  on  the ground  that  attorney fees  are  not

recoverable in a private  action under 42 U.S.C.   9607(a)(4)(B).

Id. at 383.  Juniper appealed the rulings   disallowing its claim
   

for future response  costs and  for attorney fees.   The  trustee

cross-appealed  the order  allowing  Juniper's  $38,763  priority

claim for  administrative expense.  The  district court affirmed.

In re Hemingway Transp., Inc., 126 B.R. 656 (D. Mass 1991).
                             

                                II

                            DISCUSSION
                                      

A.   Juniper's Appeal:  Disallowance of Future
     Response Costs (11 U.S.C.   502(e)(1)(B).
                                            

     1.   The Intersection of CERCLA and the Bankruptcy Code.
                                                            

                                8

          Juniper  finds  itself  stranded  at  the  increasingly

crowded  "intersection"  between the  discordant  legislative ap-

proaches embodied  in CERCLA and the Bankruptcy  Code.  See In re
                                                                 

Chateaugay  Corp., 944 F.2d 997,  1002 (2d Cir.  1991).  CERCLA's
                 

settled policy  objectives, reemphasized in the  Superfund Amend-

ments  and  Reauthorization  Act  of 1986  ("SARA"),  prominently

include the expeditious cleanup  of sites contaminated or threat-

ened  by hazardous  substance  releases which  jeopardize  public

health and safety, and the equitable allocation  of cleanup costs

among all  potentially responsible persons ("PRPs").   See United
                                                                 

States  v.  Cannons Eng'g  Corp., 899  F.2d  79, 90-91  (1st Cir.
                                

1990); see  also B.F. Goodrich Co. v. Murtha, 958 F.2d 1192, 1198
                                            

(2d Cir. 1992).   The PRP class broadly encompasses,  inter alia,
                                                                

past and current owners or operators of a contaminated  facility.

See 42 U.S.C.   9607(a). To  foster CERCLA's primary objective   
   

promotion of spontaneous private  cleanup initiatives    all PRPs

are deemed strictly  liable for the total response costs required

to  remediate the contaminated  facility.   See United  States v.
                                                              

Kayser-Roth Corp., 910  F.2d 24,  26 n.3 (1st  Cir. 1990),  cert.
                                                                

denied, 111 S. Ct. 957 (1991).  Strict liability is normally both
      

joint and several.  See O'Neil v. Picilli, 883 F.2d 176, 178 (1st
                                         

Cir. 1989), cert. denied, 493 U.S. 1071 (1990); see also New York
                                                                 

v. Shore Realty Corp., 759 F.2d 1032, 1042 (2d Cir.  1985).4  And
                     

                    

     4The defendant in  an EPA enforcement  action would have  an
especially heavy burden to establish that the shared responsibil-
ity of  the PRPs is divisible, so as to elude imposition of joint
and  several liability.  Cf.  O'Neil, 883 F.2d  at 178-79 ("[R]e-
                                    

                                9

the  EPA  is invested  with  broad  administrative discretion  to

compel PRPs  to undertake immediate cleanup  measures, a preroga-

tive largely  insulated from judicial review  at the pre-enforce-

ment stage.  See  42 U.S.C.   9606; see also  42 U.S.C.   9613(f)
                                            

(PRPs who settle with EPA are immune from subsequent contribution

                    

sponsible  parties rarely  escape  joint  and  several  liability
[because] it  is [often] impossible  to determine  the amount  of
environmental  harm  caused by  each  party.");  see also  United
                                                                 
States  v. Chem-Dyne Corp., 572  F. Supp. 802,  808-10 (S.D. Ohio
                          
1983).  However, in a  CERCLA contribution action among responsi-
                                                       
ble parties who are  jointly and severally liable, the  burden of
proof  is  less  demanding,  though the  court  nevertheless  may
undertake a comparable allocation  of the relative  responsibili-
ties of the joint  obligors.  See 42 U.S.C.    9613(f)(1) ("[T]he
                                 
court may allocate response costs among liable parties using such
equitable factors as the court determines are appropriate."); see
                                                                 
also  Smith Land & Improvement  Corp. v. Celotex  Corp., 851 F.2d
                                                       
86, 90  (3d Cir. 1988), cert.  denied, 488 U.S. 1029  (1989).  In
                                     
approaching these divisibility and  apportionment determinations,
the  courts  have relied  on  various  guideposts, including  the
legislative history in general,  and the so-called "Gore Factors"
in particular:

     (i)  the ability  of  the parties  to demonstrate  that
     their  contribution to a discharge, release or disposal
     of a hazardous waste can be distinguished;
     (ii) the amount of the hazardous waste involved;
     (iii)  the degree  of toxicity  of the  hazardous waste
     involved;
     (iv) the degree  of involvement by  the parties in  the
     generation,  transportation,   treatment,  storage,  or
     disposal of the hazardous waste;
     (v) the degree  of care exercised  by the parties  with
     respect to the hazardous  waste concerned, taking  into
     account  the characteristics  of such  hazardous waste;
     and
     (vi)  the degree  of  cooperation by  the parties  with
     Federal, State  or local officials to  prevent any harm
     to the public health or the environment.

Environmental Transp.  Sys., Inc. v.  Ensco, Inc., 969  F.2d 503,
                                                 
508-09 (7th  Cir. 1992)  ("Gore factors" provide  a nonexhaustive
but  valuable roster  of equitable  apportionment considerations)
(quoting United States v. A & F Materials Co., Inc., 578 F. Supp.
                                                   
1249, 1256 (S.D. Ill. 1984)).

                                10

claims); In re CMC  Heartland Partners, 966 F.2d 1143,  1148 (7th
                                      

Cir. 1992).

          At the  same time,  however, CERCLA section  9613(f) is

aimed  at promoting equitable  allocations of financial responsi-

bility by authorizing PRPs subjected to pending  or completed EPA

enforcement actions under 42  U.S.C.    9606 and 9607(a)(4)(A) to

initiate private  actions for  full or partial  contribution from
                                                            

nonsettling  PRPs by way  of impleader or  an independent action.

See  42 U.S.C.   9613(f).5   Thus, targeted PRPs,  relying on the
   

ultimate financial accountability  of more  "culpable" PRPs,  are

encouraged  to initiate  prompt  response efforts,  at their  own

expense,  in cooperation with  the EPA.   See H.R. Rep.  No. 253,
                                             

99th Cong.,  1st Sess.  80, reprinted  in 1986 U.S.C.C.A.N.  2835
                                         

("Private  parties may be  more willing  to assume  the financial

responsibility for some or all of the cleanup if they are assured

that  they can  seek contribution  from others.");  In re  Dant &
                                                                 

Russell, Inc., 951 F.2d 246, 248 (9th Cir. 1991).
             

                    

     5Section 9613(f)(1) provides:

     Any person may seek  contribution from any other person
     who is  liable  or  potentially  liable  under  section
     [9607(a)], during or  following any civil action  under
     section [9606] or under section [9607(a)].  Such claims
     shall be  brought in  accordance with this  section and
     the  Federal Rules  of  Civil Procedure,  and shall  be
     governed  by Federal  law.   In  resolving contribution
     claims,  the court  may allocate  response costs  among
     liable  parties  using such  equitable  factors as  the
     court  determines  are appropriate.    Nothing  in this
     subsection shall  diminish the  right of any  person to
     bring an action  for contribution in  the absence of  a
     civil action under section [9606] or section [9607].

42 U.S.C.   9613(f).

                                11

          On the other hand, Bankruptcy Code   502(e)(1)(B) often

serves  to forestall  CERCLA's intended  equitable allocation  of

responsibility,  as occurred  in  this case  when the  bankruptcy

court disallowed  Juniper's estimated  claim for $6.2  million in

anticipated future  CERCLA response costs.   Section 502(e)(1)(B)

provides, in pertinent part:

          [T]he  court  shall  disallow any  claim  for
          reimbursement  or  contribution of  an entity
          [viz., Juniper] that is liable with the debt-
               
          or [Hemingway-Bristol] on or has secured, the
          claim of a creditor [EPA], to the extent that

          . . . .

               (B) such claim for reimbursement or con-
               tribution is  contingent as of  the time
               of  allowance  or  disallowance of  such
               claim for  reimbursement or contribution
               . . . .

11  U.S.C.   502(e)(1)(B).  There  can be little  doubt that, but

for  section 502(e)(1)(B),  the  Hemingway-Bristol  estate  would

share some measure of financial responsibility for the anticipat-

ed $6.2 million  in future  response costs on  which the  Juniper

claim is based.

          Nevertheless, section 502(e)(1)(B) would mandate disal-

lowance  of  the  Juniper  claim  against  the  Hemingway-Bristol

chapter 7 estate if Juniper is jointly liable with the Hemingway-

Bristol  estate on the  same "debt"  for estimated  future CERCLA
                            

response  costs to  EPA, and  Juniper's right  to payment  on its

claim    denominated a claim for reimbursement or contribution   

remained "contingent" at the time of its disallowance.  See In re
                                                                 

                                12

Provincetown-Boston Airlines, 72 B.R.  307, 309 (Bankr. M.D. Fla.
                            

1987).  The bankruptcy  court, citing In re Charter Co., 862 F.2d
                                                       

1500 (11th Cir. 1989), held that the Juniper  claim met all three

criteria for  disallowance  under section  502(e)(1)(B).   First,

Juniper  denominated its  claim as  one for  "indemnification" or

"contribution."  But see  infra  note 22.    Second, Juniper  and
                               

Hemingway-Bristol  are  "liable" to  the  EPA  for future  CERCLA

response costs (hereinafter:   the "EPA debt") because  all three

entities were designated  PRPs by  the EPA.   Third, the  Juniper

claim  is  "contingent" because  the  EPA has  issued  no further

cleanup orders against Juniper;  hence, additional cleanup of the

facility may not be required.  In re Hemingway Transp., 105  B.R.
                                                      

at 177-78.

     2.   Applicability of Section 502(e)(1)(B) to CERCLA Claims.
                                                                

          Section 502(e)(1)(B) was enacted for one purpose    "to

prevent[] competition  between a  creditor and his  guarantor for
                                                             

the  limited proceeds of  the estate."   H.R. Rep. No.  595, 95th

Cong., 1st  Sess. 354  (1977); S.  Rep. No.  989, 95th Cong.,  2d

Sess. 65 (1978) (emphasis added).  Normally, section 502(e)(1)(B)

is invoked against claims  based on debts or  obligations arising

from voluntary contractual relationships.  Even in the context of

a CERCLA-based,  quasi-"tort" obligation, however,  the practical

need  for section  502(e)(1)(B)  is  evident;  that is,  but  for

section 502(e)(1)(B),  see infra note  6, an estimation  of Juni-
                                

per's claim for anticipated response costs, see 11  U.S.C.   502-
                                               

(c)(1), would entitle Juniper to share in the distribution of the

                                13

insolvent  chapter 7  estate under  Bankruptcy Code    726(a), 11

U.S.C.   726(a), see, e.g.,  In re Butterworth, 50 B.R.  320, 322
                                              

(Bankr. W.D. Mich. 1984), notwithstanding that its claim remained

"contingent" until such time  (if ever) as EPA were  to call upon

Juniper to  pay  any future  CERCLA response  costs incurred  for

further cleanup or remediation of the facility.

          The  Code's expansive  definition  of  "claim"  permits

automatic allowance  of most "contingent" claims,  see Bankruptcy
                                                      

Code    101(4),  502(a), 11  U.S.C.    101(4), 502(a),  against a

chapter 7 estate upon timely filing, see id.    501, 726; Fed. R.
                                            

Bankr. P.  3002(c).   The bankruptcy  court simply  estimates the

amount  of the  claim  for purposes  of  its allowance,  see  id.
                                                                 

  502(c)(1), discounting its value  to reflect the uncertainty of

the  contingency, in order  to enable the holder  to share in the

distribution  of the insolvent estate.6  On the other hand, where

                    

     6Under CERCLA   9607(a)(4)(B), see pp. 32-35 infra, "contri-
                                                       
bution"  relief is restricted to  damages for past response costs
                                                  
(i.e., costs  already "incurred").   On  the other  hand, section
     
9613(g)(2) authorizes a declaratory  judgment action to determine
liability  for response  costs  which  "will  be binding  on  any
subsequent action or actions to recover further response costs or
damages," a  form of relief plainly  encompassed within Juniper's
amended  complaint.  See In re Chateaugay Corp., 944 F.2d at 1008
                                               
(noting  that, notwithstanding  CERCLA's  ban on  pre-enforcement
judicial review,  a bankruptcy  court may estimate  CERCLA claims
pursuant to Bankruptcy Code    502(c)(1), "with ultimate liquida-
tion of the claims to await the outcome of normal CERCLA enforce-
ment  proceedings").    A  "contingent" claim  predicated  on  an
otherwise valid  declaratory judgment  entered  pursuant to  sec-
tion 9613(g)(2) would  be subject to estimation.   See Bankruptcy
                                                      
Code   502(c)(1), 11 U.S.C.   502(c)(1) ("There shall be estimat-
ed for purposes of allowance under this section . . . any contin-
gent  or unliquidated claim, the fixing  or liquidation of which,
as  the case may be, would unduly delay the administration of the
case. . . .").

                                14

the filing  of a contingent claim for  contribution or reimburse-

ment entails risk that the assets of the chapter 7 estate will be

exposed  to "double-dipping"  by holders  of the  same underlying

claim  against the estate,  section 502(e)(1)(B)  mandates disal-

lowance  of the  contingent claim.   The  sole purpose  served by

section 502(e)(1)(B) is to preclude redundant recoveries on iden-

tical  claims  against  insolvent  estates in  violation  of  the

fundamental  Code policy  fostering equitable  distribution among

all  creditors of the same class.  The "double-dipping" threat in

the present  case would result from the  allowance and estimation

of Juniper's contingent claim, and the allowance of an EPA claim,

for the same future  CERCLA response costs against the  chapter 7

estate.

          Section 502(e)(1)(B) is a  fair and reasonable  measure

as applied  against a contract  guarantor or surety.   Confronted

with the prospect that its contingent  claim for reimbursement or

contribution  against a chapter 7 debtor estate may be subject to

disallowance under  section 502(e)(1)(B), an entity  may elect to

cause its contingent  contract claim to  become "fixed" prior  to

disallowance, see Bankruptcy Code   502(e)(2), by itself satisfy-
                 

ing the debt due the creditor  of the debtor estate, leaving  the

entity as the sole holder of a claim against the  estate based on

that debt.7  See, e.g., In re Baldwin-United Corp., 55 B.R.  885,
                                                  

                    

     7Section 502(e)(2) provides:

     A claim  for reimbursement  or contribution of  such an
     entity that becomes fixed after the commencement of the
     case shall  be determined,  and shall be  allowed under

                                15

895 (Bankr.  S.D. Ohio  1985).  On  the other  hand, the  section

502(e)(2)  "fixing"  option  presents  an   especially  difficult

dilemma for an owner or operator of a  targeted facility, such as

Juniper,  involved  in  a  Superfund contribution  action.    The

onerous CERCLA  remediation process  may take years  to complete,

leaving  PRPs  holding  the  bag; that  is,  holding  unallowable
                                                                 

contingent claims for contribution  or reimbursement against  the

chapter 7 estate, claims  typically totaling millions of dollars.

In such  circumstances, section 502(e)(1)(B) may  operate to pre-

clude innocent PRPs from recovering CERCLA response costs from  a

chapter 7  estate even though  the estate clearly  is responsible

for all or  part of the environmental contamination.   If the EPA

opts  to refrain from participating  in any distribution from the

chapter 7 estate, as  it may do simply  by not filing a proof  of

claim,  Juniper may end up as the only potential EPA enforcement-

action target still left standing and  solvent.8  Thus, sometimes

                    

     subsection (a), (b),  or (c) of this section, or disal-
     lowed under subsection (d) of this section, the same as
     if such claim had  become fixed before the date  of the
     filing of the petition.

11 U.S.C.   502(e)(2).

     8EPA  enforcement actions  generally are  excepted  from the
automatic stay  provisions.  See Bankruptcy  Code   362(b)(4), 11
                                
U.S.C.   362(b)(4); New York v. Exxon Corp., 932 F.2d 1020, 1024-
                                           
25  (2d Cir. 1991).  Even were the  EPA to reduce to judgment its
claim  for prepetition  damages  against the  chapter 7  debtors,
however,  the  judgment  would  not be  enforceable  against  the
debtors' estate  except through  the normal claim  allowance pro-
cess.   See Bankruptcy  Code   362(b)(5), 11  U.S.C.   362(b)(5).
           
Moreover, corporate debtors cannot receive a discharge, see id.  
                                                               
727(a)(1),  11 U.S.C.    727(a)(1)  ("The court  shall grant  the
debtor a  discharge, unless . . . the debtor is not an individual
. . . .").   Consequently, virtually all such  chapter 7 proceed-

                                16

the fundamental policy embodied in Bankruptcy Code   502(e)(1)(B)

may  promote  an  expeditious  administration of  the  chapter  7

estate, see In re  American Continental Corp., 119 B.R.  216, 217
                                             

(Bankr.  D. Ariz. 1990), at  the expense of  a fundamental CERCLA

policy:  the equitable  allocation of environmental cleanup costs

among all responsible parties.

          Although  section  502(e)(1)(B) may  have  been devised

primarily  with  contract-based  codebtor  relationships  in mind
         

(e.g., guaranties,  suretyships), however, its  language ("liable
     

with")  has been found too  plain and inclusive  to exempt "joint

and several" tort-based obligations from disallowance, see, e.g.,
                                                                

In re American  Continental, 119 B.R. at 217;  In re Pacor, Inc.,
                                                                

110  B.R. 686, 688 (E.D. Pa. 1990);  In re Wedtech Corp., 87 B.R.
                                                        

279,  284 (Bankr. S.D.N.Y.  1988), and the  Bankruptcy Code else-

where carves  out no exception for this variety of co-obligation.

Moreover, even though CERCLA  and SARA postdate the  enactment of

Bankruptcy Code   502(e), and  plainly envision private rights of

action for  CERCLA  contribution as  inducements  to  spontaneous

private cleanup  efforts by PRPs,  neither environmental  statute

alludes to the Bankruptcy Code,  let alone exempts CERCLA contri-

bution claims  from the Code's  normal claim  procedures.   Thus,

notwithstanding the purposive liberality with which courts are to

construe CERCLA's remedial provisions,  see Kayser-Roth, 910 F.2d
                                                       

at 26 ("'[W]e will  not interpret section 9607(a) in any way that

                    

ings  end with the debtor  in dissolution and  its corporate cup-
board bare.

                                17

apparently frustrates the statute's goals.'") (citation omitted),

Bankruptcy Code   502(e)(1)(B) obliges a  construction consistent

with  its plain terms.   See Norwest Bank  Worthington v. Ahlers,
                                                                

485 U.S. 197,  206 (1988) ("[W]hatever equitable powers remain in

the  bankruptcy courts must and  can only be exercised within the

confines of the Bankruptcy Code.").

          Finally, we discern no inherent incompatibility between

section  502(e)(1)(B) and  the congressional  policies underlying

CERCLA,  such as might enable a court reasonably to conclude that

Congress   implicitly   exempted  CERCLA   co-obligation  claims.

Although on  occasion  section 502(e)(1)(B)  may impede  CERCLA's

subsidiary policy of promoting equitable allocations of  environ-
          

mental  cleanup costs  among  responsible  parties,  pre-"fixing"

disallowance  does not  conflict  with CERCLA's  primary goal    
                                                        

encouraging targeted PRPs to  initiate cleanup efforts as expedi-

tiously as  practicable in the expectation  that their contingent

claims may  become  "fixed" in  time  for allowance  against  the

debtor estate.   See In re Charter Co., 862  F.2d at 1504 (noting
                                      

obvious environmental  benefit from efforts  to "fix"  contingent

claims prior to  the closing  of the bankruptcy  case); see  also
                                                                 

supra note 7.
     

          Accordingly, we  conclude that Congress did  not exempt

CERCLA claims from disallowance under section 502(e)(1)(B).

     3.   Burdens of Proof in Section 502(e)(1)(B) Litigation.
                                                             

          In the  litigation of a  section 502(e)(1)(B) objection

                                18

to a contingent claim, however, the proper allocation of  burdens

of proof  and production may be decisive.  A proof of claim which

comports with  the requirements  of Bankruptcy Rule  3001(f) con-

stitutes prima facie evidence  of the validity and amount  of the
                    

claim.  See Fed. R.  Bankr. P. 3001(f).  The interposition  of an
           

objection does  not deprive  the proof  of  claim of  presumptive

validity unless  the objection  is supported by  substantial evi-
                                                                 

dence.  Norton Bankruptcy Law & Practice, Bankruptcy Rules at 191
                                                          

(1992); see also  In re Beverages  Int'l, Ltd., 50 B.R.  273, 276
                                              

(D. Mass. 1985).   Once the trustee manages the initial burden of

producing substantial  evidence,  however, the  ultimate risk  of

nonpersuasion as  to the allowability  of the claim  resides with

the  party asserting the claim.  See Bankruptcy Rules, at 191-92;
                                                     

see also  In re VTN, Inc.,  69 B.R. 1005, 1006  (Bankr. S.D. Fla.
                         

1987).  In the present case, therefore, the chapter 7 trustee was

required to come forward with substantial evidence that Juniper's

claim is one for CERCLA "contribution," which would implicate two

related questions:  (1) whether Hemingway-Bristol is contingently

"liable"  to the EPA for  future response costs,  and (2) whether

Juniper is "liable" to the EPA on the same "debt."

     4.   Hemingway-Bristol "Liability" on Joint Obligation.
                                                           

          At  the time it  allowed Juniper's claim  for past res-
                                                            

ponse  costs,  the bankruptcy  court  determined  that Hemingway-

Bristol  had  owned or  operated  the facility  when  the passive

"disposal" of  hazardous substances occurred  and that Hemingway-

                                19

Bristol  had  actual knowledge  of  the presence  of  the leaking

barrels.  Hence, Hemingway-Bristol is a "covered person," strict-

ly  liable to the  EPA for future  response costs  pursuant to 42

U.S.C.   9607(a)(4)(A).

          Juniper  nonetheless  suggests  that  the  term "liable

with" should  be interpreted in light of the singular legislative

purpose  underlying the  section  502(e)(1)(B)  contingent  claim

disallowance provision.   Like any other  claim for contribution,

says Juniper,  its claim for  future CERCLA response  costs could

pose  no  "double-dipping"  threat  were the  EPA,  for  whatever

reason, not to participate in any distribution from the chapter 7

estate.   Moreover, the  EPA has elected  not to  assert a  claim

against the  estate, despite  considerable  prodding by  Juniper.

Rather, the EPA repeatedly has manifested its intention to forego

any  immediate claim  against the  chapter 7  estate in  favor of

administrative enforcement  actions against  other PRPs,  such as

Juniper.9   The  trustee responds  that  the literal  language of

section  502(e)(1)(B)  directs  disallowance  of  the  codebtor's

[Juniper's] contingent  claim even though the  creditor [EPA] has

not filed  a proof of claim  by the time the  codebtor's claim is

considered for allowance.

          Section 502(e)(1) directs disallowance  of the claim of

a  codebtor who  is liable  with the  debtor on  the "claim  of a
                                            

                    

     9In a May 1987 letter to  Juniper, the EPA suggested that it
had already exercised its discretion to refrain from asserting an
enforcement action against the  chapter 7 estate, at least  as of
that time.  Two years later, however, the EPA sent PRP notices to
Hemingway and Bristol.

                                20

creditor."   The pivotal terms     "claim" and  "creditor"    are

defined.  A "claim" is  a "right to payment, whether or  not such
                                

right is reduced  to judgment,  liquidated, unliquidated,  fixed,

contingent,  matured,  unmatured,  disputed,  undisputed,  legal,

equitable, secured, or unsecured."   Bankruptcy Code   101(4), 11

U.S.C.    101(4) (emphasis  added).   A "creditor" is  an "entity

that has a claim against the debtor that arose at the time  of or

before  the order for relief concerning the debtor."  Id.    101-
                                                         

(9), 301 ("The commencement  of a voluntary case under  a chapter

of  this  title  constitutes  an  order  for  relief  under  such

chapter.").

          The EPA  presumably holds a  prepetition claim  against

the chapter  7 estate,  since its  contingent "right to  payment"

accrued while Bristol and Hemingway owned or operated the facili-

ty at which the  hazardous waste "disposal" occurred.   Cf. In re
                                                                 

Chateaugay, 944 F.2d  at 1002-06 (EPA  claim for CERCLA  response
          

costs  is a prepetition claim if the contamination occurred prior

to the petition, without regard to when EPA discovered contamina-

tion, or incurred response costs).  Although section 502(e)(1)(B)

plainly does  not require that a   creditor's right to payment be

evidenced by a  timely proof  of claim, or  a previously  allowed

claim, see In re Wedtech Corp., 85 B.R. 285, 289 (Bankr. S.D.N.Y.
                              

1988), it is nonetheless incumbent on the trustee to produce sub-

stantial  evidence of the existence of a  right to payment on the

part of the creditor.

          The co-liability  clause  in section  502(e)(1),  viz.,
                                                               

                                21

"liable with the  debtor," interpreted in  light of its  singular

purpose, might permit allowance of a non-fixed codebtor claim for

CERCLA contribution if the creditor were foreclosed from partici-
                                                   

pating in any  distribution from the estate under Bankruptcy Code

  726(a).   Nevertheless, though we reject  the trustee's conten-

tion that  the EPA might yet demonstrate "excusable neglect" war-

ranting  an extension  of time  to file  a  proof of  claim,10 we

must  examine other means which  may remain open  to EPA's parti-

cipation in any chapter 7 distribution.

          The EPA may participate  in a distribution to unsecured

creditors under section 726(a)(2)(C) if it was never scheduled as

a "creditor" of the  estate, and had  no actual knowledge of  the

proceedings in time to  file a proof of claim.   See In re Global
                                                                 

Precious  Metals, Inc., 143  B.R. 204,  205-06 (Bankr.  N.D. Ill.
                      

1992) (chapter  7).11   Thus, a remote  "double-dipping" prospect

                    

     10In a chapter 7 case, proofs of  claim must be filed within
ninety days  after the first  date set for  the first  meeting of
creditors.   Fed. R.  Bankr. P. 3002(c).  See In re  Chirillo, 84
                                                             
B.R. 120,  122 (Bankr. N.D. Ill.  1988).  Since the  EPA could no
longer satisfy any  of the  six conditions for  extension of  the
ninety-day bar date set  forth in Bankruptcy Rule 3002(c),  it is
precluded from  asserting a  timely proof  of  claim against  the
chapter  7  estate.   See  Fed. R.  Bankr.  P. 9006(b)(1).   Rule
                         
9006(b) plainly precludes resort  to Rule 9006(b)(1) to  extend a
time period prescribed in Rule 3002(c), except "to the extent and
under  the conditions stated in [Rule 3002(c)]."  Id. at 9006(b)-
                                                     
(3).

     11Bankruptcy  Code   726(a)(2)(C)  provides for  "payment of
any allowed  unsecured claim, other than a claim of a kind speci-
fied  in paragraph (1), (3), or (4)  of this subsection, proof of
which  is . . . tardily filed under section 501(a) of this title,
if (i) the creditor that holds such claim did not  have notice or
actual knowledge of the case in time for timely filing of a proof
of  such claim under section 501(a) of this title; and (ii) proof
of such claim is filed in time to permit payment  of such claim."

                                22

would remain  if Juniper's  claim were to  be allowed,  as it  is

conceivable that EPA might yet file an allowable claim.12

          In this case, however,  the harsh results occasioned by

Bankruptcy Code   502(e)(1)(B) are mitigable through  recourse to

Bankruptcy Code    501(c), which provides that,  "[i]f a creditor

does not timely file a proof of such creditor's claim, the debtor

or the trustee may file a proof of such claim."  See also Fed. R.
                                                         

Bankr.  P. 3004.   Although  section  501(c) is  permissive ("may

file"),  rather than  mandatory, and  is designed  principally to

prevent creditors  from depriving  debtors  of the  benefit of  a

discharge under Bankruptcy Code   727, 11 U.S.C.   727, cf. supra
                                                                 

note 8, in these circumstances there are sound reasons to require

the chapter 7 trustee  to shoulder the initial burden of filing a

surrogate claim in behalf of the EPA as a precondition to obtain-

                    

11 U.S.C.   726(a)(2)(C).  The appellate record does not disclose
whether EPA  was listed as a  creditor.  In addition,  it is con-
ceivable,  though  unlikely, that  EPA's  CERCLA  claim might  be
entitled to  share in any subordinate  distribution under section
726(a)(3),  as an  "allowed  unsecured claim  proof  of which  is
tardily filed," even if  EPA was scheduled, or had  actual notice
of the case prior to the bar date.  See In re Melenyzer, 140 B.R.
                                                       
143, 156 n.42 (Bankr. W.D. Tex. 1992) (chapter 7).

     12Of  course,  the  bankruptcy  court  might  condition  its
allowance  of a codebtor's claim  on the ultimate  failure of the
creditor to file a proof of claim.  See Bankruptcy Code   502(j),
                                       
11  U.S.C.   502(j) ("A claim that has been allowed or disallowed
may be  reconsidered for cause.").   Instead of  automatic disal-
lowance,  some courts  have suggested  that the  bankruptcy court
sharply  discount the  codebtor's  claim to  offset this  all-or-
nothing  contingency,  or direct  that  any  distribution to  the
codebtor be  placed in trust, to  be expended only to  reduce the
common debt.  See In re Allegheny Int'l., Inc., 126 B.R. 919, 924
                                              
(W.D. Pa. 1991),  aff'd, 950 F.2d  721 (3d Cir. 1991).   However,
                       
these  options find little support in the categorical language of
section 502(e)(1)(B).

                                23

ing simultaneous disallowance of Juniper's contingent claim under

section 501(e)(1)(B).

          First, even if the chapter 7 trustee were to decline to

act  as an EPA surrogate, Juniper could force the trustee's hand.

Under a parallel Code provision, Juniper itself  would be permit-

ted to file  a surrogate claim for the EPA.   See Bankruptcy Code
                                                 

  501(b),  11  U.S.C.   501(b)  ("If  a creditor  [EPA]  does not

timely file a proof of such creditor's claim, an entity [Juniper]

that is liable to such creditor  with the debtor . . . may file a

proof of such  claim.").13  Were it  to resort to  the surrogate-

claim procedure,  Juniper would be  required to show  simply that

                    

     13The equitable considerations underlying the section 501(b)
surrogate-claim procedure have been described as follows:

     Section  501(b) and  Rule  3005  protect  the  codebtor
     against the  danger that  the creditor, faced  with the
     bankruptcy of the prime debtor, might decide to rely on
     the solvency of the  codebtor and therefore, to abstain
     from filing  a proof of claim.   In such a  case, while
     there might be a prospect of securing at  least partial
     satisfaction from the assets  of the debtor, the credi-
     tor would  forego this  possibility and merely  proceed
     with his claim against  the codebtor.  By the  time the
     creditor decided to take  such action, any period fixed
     for the  filing of claims might have  elapsed.  Indeed,
     the debtor's estate might  have been fully administered
     by  the trustee  so  that the  codebtor  would be  left
     without the possibility  of even partial  reimbursement
     to the extent he  has satisfied the claim of  the debt-
     or's creditor.  The debtor's discharge would remove the
     possibility  that  his codebtor  could  secure indemni-
     fication  from him  at  some future  time. . . .  [T]he
     unwillingness of  th[e] creditor to take  the necessary
     steps in  the administration  of  bankruptcy to  insure
     . . .  participation [in  distribution of  the debtor's
     assets] would not  deny the ability of  the codebtor to
     do so.

See  Lawrence D. King, Collier  on Bankruptcy    509.02, at 509-6
                                             
(15th ed. 1991) [hereinafter Collier on Bankruptcy].
                                                  

                                24

"the  original  debt  [due  EPA by  Hemingway-Bristol  would]  be

diminished  by the amount of the distribution  [to the EPA on the

surrogate claim]."  Fed. R.  Bankr. P. 3005(a).  Of course,  even

this  modest burden would be obviated if the surrogate claim were

to be superseded by the  EPA's filing of its own proof  of claim.

See id. 14
       

          More  importantly,  mandatory resort  to  the trustee's

option  to file a surrogate  proof of claim  under section 501(c)

more  readily comports with the allocation of the burden of proof

under section  502(e)(1)(B), which  would require the  trustee to

come  forward with  substantial support  for the  section 502(e)-
                               

(1)(B) objection to Juniper's proof of claim, and hence, substan-

tial evidence  that Hemingway  and Bristol  were "liable" to  the

EPA.   See supra  Section II.A.3.   In addition,  the trustee has
                

title and  ready access to  the debtors' records,  see Bankruptcy
                                                      

Code    521(4), 11 U.S.C.   521(4) ("[D]ebtor shall . . . surren-

der to  trustee  all property  of  the estate,  including  books,

documents, records, and papers . . . ."); In re Bentley, 120 B.R.
                                                       

                    

     14Although  the EPA can no  longer file a  "timely" proof of
claim now  that the bar date  has passed, see supra  note 10, its
                                                   
forbearance triggers the trustee's and Juniper's rights to file a
proof of claim  in EPA's behalf.  Under Bankruptcy Rules 3004 and
3005(a),  the trustee and Juniper normally would have only thirty
days  from  the bar  date to  file their  surrogate claims.   But
insofar as  EPA "did not  have notice or actual  knowledge of the
case in  time  for timely  filing  of a  proof  of . . .  claim,"
Bankruptcy  Code   726(a)(2)(C)(i),  see also  supra note  11 and
                                                    
accompanying text, the EPA  can yet file a belated claim that can
receive payment along with  other timely-filed unsecured  claims,
so long  as "proof  of  such claim  is filed  in  time to  permit
payment  of such  claim."   Id.    726(a)(2)(C)(ii).   Thus,  the
                               
trustee and Juniper,  as EPA surrogates, can avail  themselves of
the section 726(a)(2)(C) "extended filing" provision.

                                25

712, 714 (S.D.N.Y. 1990),  and the right to require  the debtors'

officers to submit to examination,  see Bankruptcy Code   521(3),
                                       

11  U.S.C.   521(3)  ("[D]ebtor shall  . .  . cooperate  with the

trustee  as necessary to enable the trustee to perform the trust-

ee's  duties .  . . ."); Fed.  R. Bankr. P.  4002(4) (Debtor must

"cooperate with the trustee in . . . the examination of proofs of

claim . . . .");  In re Neese, 137 B.R. 797, 801 (C.D. Cal. 1992)
                             

("'[C]ooperate'  is a broad term . . . .").  Thus, the trustee is

in  a far  better position  than Juniper  to ferret  out evidence

relevant to the EPA's claim against the debtors.

          Although  disallowance of Juniper's  CERCLA claim under

section 502(e)(1)(B) is not  strictly foreclosed by EPA's failure

to file timely proof  of its claim, we  cannot overlook the  fact

that the trustee's reliance  on section 502(e)(1)(B) may occasion

a pointless financial loss to Juniper and result in a windfall to

the chapter  7 estate, notwithstanding Juniper's  best efforts to

induce EPA to file its claim.  In  this vein, we note that resort

to subsections 501(b)  and (c) would not  compel EPA's participa-

tion in the bankruptcy proceedings, cf. In re Hemingway  Transp.,
                                                                

70 B.R.  549 (Bankr. D.  Mass. 1987) (finding  sovereign immunity

would preclude mandatory joinder of EPA as party); cf. also infra
                                                                 

note  26, but  nevertheless would  compel a  set-aside  for EPA's

benefit at the time of distribution regardless of its decision to

refrain from filing a  claim against the chapter  7 estate.   The

distribution  to EPA  would result  in a  reduction in  the total

indebtedness  to EPA for which  Juniper and the  chapter 7 estate

                                26

are  alleged to be  co-liable.  In  our view, the  EPA's recalci-

trance,  whatever its  administrative justification,  provides no

relevant  legal or  equitable  basis for  barring  resort to  the

alternative  surrogate-claim  filing  procedure authorized  under

subsections 501(b) and (c).

          Accordingly,  we  vacate  the  bankruptcy  court  order

disallowing  Juniper's claim  under  section  502(e)(1)(B).    On

remand, the  bankruptcy court  should prescribe a  reasonable bar

date by which the chapter 7  trustee must elect whether to file a

surrogate EPA claim pursuant to Bankruptcy Code   501(c), without

prejudice to  Juniper's right to  submit a surrogate  claim under

subsection  502(b)  as well.15   Should  the  trustee not  file a

timely surrogate  claim  (and  should Juniper  not  do  so),  the

section 502(e)(1)(B) objection should be dismissed, and the court

should  estimate Juniper's  direct  claim against  the chapter  7

estate  pursuant  to  normal  claim-allowance  procedures.    See
                                                                 
Bankruptcy Code   502(c).

                    

     15Unlike a creditor filing  in its own behalf, or  a trustee
seeking to  avail the debtor of  the full benefit of  a chapter 7
discharge, in this  case the  chapter 7 trustee  may have  little
incentive  to maximize any surrogate claim in behalf of EPA, thus
depleting  any  pro-rata  dividend available  to  other unsecured
creditors.   A similar problem may arise if any superseding proof
of claim filed by EPA were to  understate (in Juniper's view) the
chapter 7  debtors' share of  the CERCLA obligation.   We  do not
construe  subsections  501(b)  and  (c) as  suggesting  that  the
trustee could  preempt a  surrogate  EPA claim  by Juniper  under
section  501(b)  asserting that  the  chapter  7 estate's  CERCLA
liability to EPA is  greater than that asserted in  the trustee's
section  501(c) surrogate  claim.   Rather, the  bankruptcy court
should  entertain evidence from the trustee  and Juniper, for the
purpose  of estimating the value  of the EPA  claim under section
502(c).

                                27

     5.   Juniper's "Liability" on Joint Obligation.
                                                   

          In the event the trustee  should file a surrogate claim

in behalf of the EPA pursuant to sections 501(c) and 726(a)(2)(C)

following  remand, we  outline the  standards governing  its con-

sideration by the bankruptcy court.

          Juniper's "contribution" claim differs in one important

respect from codebtor claims  normally subjected to  disallowance

under section 502(e)(1)(B).  In the typical contractual relation-

ship  between  a  principal  and its  surety  or  guarantor,  the

codebtor's  (surety's  or guarantor's)  obligation on  the common

debt  arises at  the same  time as  the creditor's  (principal's)

"right  to payment"  from  the debtor     during  the prepetition
                                                                 

period     which necessarily means that both the creditor and the
      

codebtor  hold prepetition  claims  against  the  debtor  estate.
                          

Here, on the other hand, regardless whether the EPA has a prepet-

ition or a postpetition claim, Juniper's  "right to payment" from

Hemingway-Bristol arose,  at the earliest, when  it purchased the
                                         

facility from  the Hemingway-Bristol  chapter 11 estate  in April

1983.   Only then did Juniper  become an "owner and  operator" of

the contaminated  facility, hence a "covered  person" under CERC-

LA.16   Since  Juniper undeniably  holds a  postpetition "claim,"
                                                        

Bankruptcy  Code    101(9),  301, 11  U.S.C.    101(9),  301, its

                    

     16The  bankruptcy court implicitly acknowledged as much when
it  approved Juniper's  request  for past  response  costs as  an
                                         
administrative expense:  "Juniper's  cause of action under CERCLA
arose when the property  containing the drums was  transferred to
Juniper  or, alternatively,  when Juniper  expended money  in re-
sponse to  the  EPA's administrative  order."   In  re  Hemingway
                                                                 
Transp., 73 B.R. at 503.
       

                                28

"proof of claim" under Bankruptcy Code    501 and 502 is no  less

readily     and presumably even more  accurately    characterized

as "a  request for payment  of an  administrative expense"  under

Bankruptcy  Code    503(a).   See  Bankruptcy  Code   348(d),  11
                                 

U.S.C.   348(d)  (providing that claims arising  after the filing

of a chapter 11 petition and before conversion to chapter 7 shall

be treated as prepetition claims, unless  they qualify as "admin-

istrative expenses" under section 503(b)).17

                    

     17Courts  have  long  recognized  a  category  of  allowable
administrative expenses resulting  in no  discernible benefit  to
the  debtor estate, see In re Charlesbank Laundry, Inc., 755 F.2d
                                                       
200  (1st Cir.  1985),  in instances  where fundamental  fairness
required that  the claimant's  right to distribution  take prece-
dence over the  rights of general creditors.   See Reading Co. v.
                                                              
Brown,  391 U.S. 471 (1968).  In Reading, several business firms,
                                        
whose premises were damaged  by a fire negligently caused  by the
receiver appointed  to operate  a Chapter XI  business, requested
that their fire-loss claims be allowed as administrative expenses
of  the  Chapter XI  estate,  notwithstanding the  fact  that the
losses sustained as a result of the fire resulted in no "benefit"
to  the  Chapter XI  estate.    Noting the  "decisive,  statutory
objective [of] fairness to all persons  having claims against the
insolvent," Reading, 391 U.S. at 477, the Supreme Court held that
                   
the  claims for postpetition fire loss were allowable as costs of
administration.  Its  rationale was equitable  in nature:   unse-
cured creditors  in a  Chapter XI reorganization  anticipate that
their agreement to defer receipt of payment  on their prepetition
claims   may  facilitate  the  reorganization  debtor's  ultimate
rehabilitation, thereby enhancing their prospects for recovery on
their prepetition claims.   Unlike holders of prepetition claims,
however, the firms  whose business premises  were damaged by  the
postpetition  fire negligently  caused by  the receiver  had "the
insolvent business [involuntarily] thrust upon them  by operation
of law."  Id.  Similarly, in  Charlesbank, we extended Reading to
                                                              
postpetition fines imposed on a  chapter 11 estate for deliberate
disregard of an injunction. See Charlesbank, 755 F.2d at 203.
                                           
     In citing Reading and Charlesbank as support for its  provi-
                                      
sional decision granting Juniper administrative  priority for its
postpetition  contribution claims,  the bankruptcy  court focused
entirely on  the debtors'  failure to disclose  the environmental
                        
risk  prior to the 1983  sale, and the  perceived "unfairness" in
the "debtor attempting to transfer its liability or potential for
liability  under state  or federal  environmental laws"  in those

                                29

          Bankruptcy  Code    503(a)(1)(A) enables  an  entity to

file a request for payment  of an administrative expense, includ-

ing  "the actual, necessary costs and  expenses of preserving the

estate."   "As a general rule, a request for  priority payment of

an administrative  expense pursuant to  Bankruptcy Code    503(a)

may qualify if (1) the right to payment arose from a postpetition

transaction with the  debtor estate, rather  than from a  prepet-

ition  transaction with  the  debtor, and  (2) the  consideration

supporting the right to  payment was beneficial to the  estate of

the  debtor."  In re Hemingway Transp.,  Inc., 954 F.2d 1, 5 (1st
                                             

Cir. 1991) (citing  In re Mammoth Mart,  Inc., 536 F.2d 950,  954
                                             

(1st Cir. 1976)).  The trustee argues that administrative expense

priority  under Mammoth Mart is  wholly unavailable to Juniper on
                            

its claims for past and future response costs, as Juniper's right

to  contribution from the chapter  7 estate was  not supported by

consideration (i.e.,  Juniper's outlay  of response  costs) which
                   

could  "benefit" the estate.   Thus, the trustee  points out that

the contaminated facility  was no longer property  of the chapter

                    

circumstances. See In re Hemingway Transp., 73 B.R. at 504.  Thus
                                          
interpreted, Reading  might permit Juniper to  recover the entire
                    
cost of  its extant "injury"     or the past and  future costs of
remediation    despite the fact that  it has yet to incur some of
these  response costs.  Unlike the injured parties in Reading and
                                                             
Charlesbank, however, Juniper dealt  voluntarily on a contractual
                                                
basis  with the chapter 11  estate.  No  principle of fundamental
fairness would  entitle Juniper  to administrative  priority over
other unsecured  creditors of the Hemingway-Bristol  estate if it
failed to  exercise due  diligence in  all  the circumstances  to
protect itself, from the outset, against any imposition of CERCLA
joint  and several liability.  In addition, lack of due diligence
would, for reasons explained below at pp. 36-38,  prevent Juniper
from escaping  the strictures of  section 502(e)(1)(B)'s "fixing"
requirement.

                                30

11 estate, hence Juniper's incurrence of response costs would not

bring the estate  into compliance with federal  or state environ-

mental regulations.  Cf. In re  Stevens, 68 B.R. 774, 783 (D. Me.
                                       

1987)  (finding  that  the  State's claim  for  cleanup  expenses

incurred in substitute fulfillment of the trustee's legal obliga-

tion was  entitled to administrative expense  priority, where the

trustee, who would  be prohibited  from exercising  his power  of

abandonment  in contravention  of state  environmental protection

laws, was still  in "possession" of property  posing an "imminent

and identifiable danger" to public health and safety; contrasting

case in  which trustee had  already been "dispossessed"  of waste

site at  time of government-financed  cleanup); In  re T.P.  Long
                                                                 

Chem., Inc., 45 B.R.  278, 284-85 (Bankr. N.D.  Ohio 1985).   Nor
           

could the CERCLA response costs incurred by Juniper "benefit" the

chapter 11 estate while the estate remained jointly and severally

liable on the EPA debt.   Although we agree that Juniper's incur-

rence of CERCLA response  costs might not benefit the  estate, on
                               

the facts of this case we cannot agree that Mammoth Mart priority
                                                        

is altogether unavailable to Juniper.

          In  the  context  of  their  arm's-length purchase-sale

transaction in 1983, we must presume that Juniper and the chapter

11  estate were cognizant of  the federal and state environmental

laws then in effect,  and that, notwithstanding Juniper's result-

ing  status as an "owner or operator" of the contaminated facili-

ty,  the chapter 11 estate  could remain liable  for any response

costs later incurred by Juniper and for which the debtors (or the

                                31

debtor  estate)  were liable  under  CERCLA  section 9607(a),  an

obligation explicitly  provided for  presently in 42  U.S.C.    -

9607(a)(4)(B) and 9613(f).   See O'Neil, 883 F.2d at  179 (noting
                                       

that  SARA contribution provisions  merely "codif[ied] [a remedy]

that  most courts had concluded  was implicit in  the 1980 Act");

Marden Corp. v. C.G.C. Music, Ltd., 804 F.2d 1454,  1457 n.3 (9th
                                  

Cir.  1986) (collecting  pre-SARA  caselaw  recognizing  implicit

right  of contribution in CERCLA).   There is  no record evidence

that the  estate either  contracted away  its obligation  to con-

tribute, or  bargained for a right to  indemnification from Juni-

per.   See  42 U.S.C.    9607(e) (purported  transfers of  CERCLA
          

liability cannot exonerate transferor, but indemnification agree-

ments are permissible).   Similarly, to the extent that  the $1.6

million purchase price for  the facility presumptively  reflected

the parties'  allocation of the risks relating to these contribu-

tion costs, the $1.6 million constituted "consideration" support-

ing  Juniper's right  to  payment for  contribution for  response

costs from the  estate.  Obviously, this  substantial infusion of

cash benefitted the chapter 11 rehabilitation effort.  Thus,  the

$1.6 million  in purchase monies constituted  the requisite base-

line  "consideration" for  Juniper's right  to  contribution; and

response costs subsequently incurred by Juniper a mere maturation

of that right, immaterial for Mammoth Mart purposes. 
                                          

          On the  other hand, we agree that Mammoth Mart priority
                                                        

is unavailing to Juniper insofar as its right to contribution for

future  response costs remains "contingent" at the time the bank-

                                32

ruptcy court considers Juniper's  claim for allowance against the

debtor  estate.    Only  "actual"  administrative  expenses,  not

contingent  expenses,  are  entitled  to priority  payment  under

Bankruptcy Code    503(b)(1)(A).   Even  though  Juniper's  post-

petition contribution  claim, once allowed, would  be entitled to
                                          

priority  treatment under  section 503(b), the  parallel restric-

tions in section 502(e)(1)(B)  pose an additional hurdle.   Under

its clear terms, section  502(e)(1)(B) does not apply exclusively

to  "creditors," or  in other  words, to  holders of  prepetition
                                                                 

claims for reimbursement  or contribution.  Section  502(e)(1)(B)

refers  to  the holder  of the  claim as  an  "entity," not  as a

"creditor"  of the  estate.18   Accordingly,  Juniper's  priority

"claim for  reimbursement or contribution" would  be allowable if

either:  (1) Juniper and the chapter 11  estate are not strictly,
      

jointly, and severally liable  ("liable with the debtor") on  the

EPA debt under the liability provisions of the CERCLA statute, or
                                                                 

(2)  Juniper's response  costs have  become "fixed"  and "actual"

(i.e., have been expended by Juniper for remediation or paid over
     

to the EPA) by the time  Juniper's claim is considered for disal-

lowance.  As Juniper's contingent claim for future response costs

is, by definition, not "fixed," Juniper cannot escape  the conse-

quences of  section 502(e)(1)(B)  unless it  is not strictly  and

jointly  "liable" with Hemingway-Bristol  on the  EPA debt.   Cf.
                                                                 

infra Section II.C.  (Mammoth Mart administrative expense priori-
                                  

                    

     18"Creditor" means an "entity that has a claim that arose at
the  time of  or before  the order of  relief."   Bankruptcy Code
  101(9), 11 U.S.C.   101(9).

                                33

ty would  attach to  Juniper's  "fixed" claim  for past  response
                                                       

costs).  We turn, therefore, to the question of Juniper's alleged

liability to the EPA.

          The threshold  question is whether Juniper  is even as-

serting  a direct CERCLA claim  against the chapter  7 estate, or
                 

merely a derivative claim  for "contribution" from the chapter  7
                   

estate.  CERCLA section 9613(f) is the sole statutory basis for a

right  to "contribution," see supra note 5 and accompanying text,
                                   

but CERCLA prescribes other remedial  provisions as well.  Unlike

section 9613(f), a  private right of  action for CERCLA  response

costs under  section 9607(a)(4)(B)  is available to  "any person"
                                                                

who incurs necessary response costs, presumably without regard to

whether  the plaintiff is an EPA target,  i.e., a PRP or "covered
                                              

person" under section 9607(a).   See 42 U.S.C.   9601(21)  ("per-
                                    

son"  includes  "corporation").    Section  9607(a)(4)(B)  simply

requires the private-action plaintiff to prove that (1) a release

of a  "hazardous substance" from the  subject "facility" occurred

or  is threatened;  (2) the  defendant comes  within any  of four

categories of "covered persons,"  which include current owners or

operators of the facility, see 42 U.S.C.   9601(9)(B), as well as
                              

the owners  and operators  of the facility  at the time  the con-

tamination occurred;  (3) the  release or threatened  release has

caused  (or may cause)  the claimant  to incur  response costs;19

                    

     19"Response  costs,"  42  U.S.C.    9601(25),  include costs
incurred in "removal" actions, which address immediate threats to
public  health  and safety  caused  by  hazardous substances,  42
U.S.C.    9601(23), and  costs  incurred in  "remedial"  actions,
directed at long-term or  permanent remediation of the contamina-

                                34

and (4)  the response costs are "necessary"  and "consistent with

the  national contingency plan."  See Dedham Water Co. v. Cumber-
                                                                 

land Farms Dairy, Inc., 889 F.2d 1146, 1150 (1st Cir. 1989).20
                      

          For instance, a neighboring landowner, who is neither a
                                     

current  nor a past owner or operator of the contaminated facili-

ty, hence not strictly liable as a "covered person" under section

9607(a), may incur  response costs  as a result  of a  threatened

release and  potential migration of hazardous  substances from an

adjoining  property,  and may  assert  a  right of  action  under

section 9607(a)(4)(B).   See,  e.g.,  Dedham Water,  889 F.2d  at
                                                  

1146-48 (noting  that water  utility would  have cause  of action

under  section 9607(a)(4)(B)  against neighboring  property owner

for response costs relating to threatened release).  On the other

hand, in the event the private-action plaintiff  itself is poten-

tially "liable" to the  EPA for response costs, and  thus is akin

to a joint "tortfeasor," section 9607(a)(4)(B) serves as the pre-
                                                                 

                    

tion, 42 U.S.C.   9601(24).

     20Section 9607(a) provides, in pertinent part:

     (1)  [T]he owner  and operator of a vessel or a facili-
     ty,
     (2)  [A]ny person who  at the time  of disposal of  any
          hazardous substance owned or operated any facility
          at  which such hazardous  substances were disposed
          of . . . shall be liable for   

          (A)  all costs of removal or  remedial action
               incurred by the United States Government
               or a State . . .
          (B)  any  other  necessary costs  of response
                                                       
               incurred by any other  person consistent
                                            
               with the national contingency plan.

42 U.S.C.   9607(a)(2)(B) (emphasis added).

                                35

enforcement analog to the "impleader" contribution action permit-
           

ted  under section 9613(f).  See 42 U.S.C.   9613(f) ("Nothing in
                                

this subsection shall diminish  the right of any person  to bring

an action for contribution in the absence of a civil action under

section [9606] or section [9607].");  see also Wickland Oil  Ter-
                                                                 

minals  v. Asarco,  Inc., 792  F.2d 887,  890-91 (9th  Cir. 1986)
                        

(holding  that section  9607(a)(4)(B)  grants  private  right  of

action  for  response costs,  without  regard  to  any prior  EPA

enforcement actions).

          Because  Juniper's initial  complaint  in  the  instant

adversary  proceeding invoked  generic claims  for "contribution"

and  "indemnification,"  without  attribution  to  any  statutory

source, the bankruptcy  court specifically requested  Juniper "to

amend Count I [of its complaint] to include the statutory prereq-

uisite [sic] of 42 U.S.C.   9607(a)(4)(B)."  Although the amended

complaint represents  at best  an imperceptible  improvement over

its predecessor, the  bankruptcy court  apparently considered  it

adequate to assert  such a claim.21   Juniper's amended complaint

bears  this out.  It alleges that  (1) Juniper is a current owner

of  the facility,  but not that  it is  a "covered  person" under

section 9607(a); (2) Hemingway and Bristol fraudulently concealed

the presence of  hazardous wastes  at the facility  prior to  the

1983 sale; and (3) Juniper neither knew nor had "reason to  know"

                    

     21The bankruptcy court opinion  states:  "In the  context of
this case, it is possible to view Juniper as a direct creditor of
Hemingway and as an  entity jointly liable with the  Debtor."  In
                                                                 
re Hemingway Transp., 105 B.R. at 175.
                    

                                36

of the contamination until 1985.

          The  bankruptcy court  concluded that  Juniper, as  the

current "owner" of the facility, undoubtedly would be "liable" to

the  EPA in an enforcement  action simply by  virtue of its prima
                                                                 

facie  status  as  a  "covered  person"  under section 9607(a).22
     

The undefined  term "liable" is  common to both  CERCLA   9607(a)

and Bankruptcy Code   502(e)(1)(B).   Its construction presents a

question of law subject to  plenary review.  See In re  Erin Food
                                                                 

Servs., Inc., 980  F.2d 792, 794  (1st Cir. 1992)  (citing In  re
                                                                 

LaRoche, 969 F.2d 1299, 1301 (1st Cir. 1992)).
       

          Of  course,  not  all  "covered  persons" are  strictly

liable  for  response costs.   The  harsh  effects of  the strict

liability  rule  are  subject  to mitigation  through  resort  to

certain affirmative defenses.  Section 9607(b) expressly provides

that "[t]here shall be no liability under section [9607](a) . . .
                                   

for a person otherwise  liable who can establish by  a preponder-

                    

     22The bankruptcy court based  its section 502(e)(1)(B)  dis-
allowance  on the ground that Juniper had denominated its claim a
derivative claim  for "contribution,"  thereby conceding  its co-
liability with  the Hemingway-Bristol estate  for future response
costs.  In our view, this ruling exalts  form over substance, and
ignores both  the liberality  with which  pleadings must  be con-
strued and the  right to plead  alternative or seemingly  "incon-
sistent" claims.   See Fed.  R. Bankr. P.  7008(a) (incorporating
                      
Fed. R. Civ. P. 8(e), providing that "[a] party may set forth two
or more statements of  a claim or defense alternatively  or hypo-
                                                       
thetically  . . . regardless  of consistency  . . . .") (emphasis
                                            
added); cf. also Schott Motorcycle Supply, Inc. v. American Honda
                                                                 
Motor Co., 976 F.2d 58, 61-62 (1st Cir. 1992).  Given the compar-
         
ative breadth of the  section 9607(a)(4)(B) remedy, and Juniper's
explicit allegation that it had  no actual or constructive knowl-
edge  of the contamination at the time it purchased the facility,
we think the trustee must come forward with  substantial evidence
from  which the bankruptcy court could conclude that Juniper is a
"covered person" liable to the EPA for future response costs.

                                37

ance  of the evidence [the following defenses] . . . ."  See also
                                                                 

Environmental  Transp. Sys. v. Ensco, Inc., 969 F.2d 503, 504 n.3
                                          

(7th  Cir. 1992).    Section 9607(b)(3)  would afford  a complete

defense to CERCLA liability if Juniper were to establish that (1)

it acquired the facility after the initial deposit of the hazard-

ous substances;  (2) at the  time of its acquisition,  it did not

know and had "no reason to know" that any hazardous substance was
                               

deposited  at  the facility;  and (3)  once  the presence  of the

hazardous substance  became known, Juniper exercised  due care in

the  circumstances.  The statute  defines the term  "no reason to

know" as follows:

          [T]he  [buyer] must  have undertaken,  at the
          time of acquisition, all  appropriate inquiry
                                                       
          into the previous  ownership and uses of  the
          property consistent with  good commercial  or
          customary practice in  an effort to  minimize
                                                       
          liability.   For  purposes  of the  preceding
                   
          sentence  the court  shall take  into account
          any  specialized  knowledge or  experience on
          the  part of the [buyer], the relationship of
                                                       
          the purchase price to  the value of the prop-
                                                       
          erty  if  uncontaminated,  commonly known  or
                                                       
          reasonably  ascertainable  information  about
                                                
          the property, the obviousness of the presence
                                                       
          or  likely presence  of contamination  at the
                                               
          property,  and  the  ability to  detect  such
          contamination by appropriate inspection.

42 U.S.C.   9601(35)(B) (emphasis  added); see also United States
                                                                 

v. Pacific  Hide & Fur Depot,  Inc., 716 F. Supp.  1341, 1347 (D.
                                   

Idaho  1989);  cf. 42  U.S.C.    9622(g)  (de minimis  settlement
                                                     

provisions  not  applicable to  owners  who  purchased land  with

actual  or  constructive  knowledge  of contamination).    As  an

acquiring party and an owner of  the facility during a period  of

                                38

"passive"  disposal,23 Juniper  would  be held  to an  especially

stringent level of  preacquisition inquiry    on  the theory that

an acquiring party's failure to make adequate inquiry  may itself

contribute to a prolongation of the contamination.24

          Thus,  under  either  section  501(e)(1)(B)  or section
                                                         

503(a),  Juniper's  participation in  any  distribution from  the

chapter 7 estate hinges entirely on the validity of its "innocent

landowner" defense.  Notwithstanding its relevance, the "innocent

landowner" defense  was never explicitly considered  by the bank-

ruptcy court in connection with the trustee's motion for  summary

judgment  disallowing Juniper's CERCLA  claim pursuant to section

502(e)(1)(B),  nor in  connection  with its  earlier  provisional

ruling on Juniper's entitlement  to administrative priority.  Cf.
                                                                 

supra note 17.  The  record contains mixed signals on the  "inno-
     

cent  landowner" defense.  In  a May 19, 1987  letter to Juniper,

the EPA opined  that Juniper would not be entitled  to the "inno-

                    

     23The parties  do not challenge the  bankruptcy court ruling
that the  Hemingway-Bristol estate is "liable"  for the "passive"
disposal at the facility (i.e., the leaking  of previously gener-
                              
ated  or deposited  containers of  hazardous waste),  even absent
evidence that  the chapter 7 estate contributed to the generation
or the deposit of the hazardous substances in the first instance.
Furthermore, the chapter 7  estate could not establish  an "inno-
cent owner" defense:   the 1982 DEQE notice afforded  the debtors
actual knowledge that  drums of contaminants were located  at the
      
facility.  On  the other  hand, the bankruptcy  court found  that
"none of  the interested parties, including  the Trustee, Juniper
and the two  courts that approved the sale,  were apprised of the
presence of hazardous  wastes on the  property, despite the  DEQE
action."  In re Hemingway Transp., 73 B.R. at 501-02.
                                 

     24The  EPA  informed Juniper  in May  1987 that  its alleged
contribution to the passive disposal was undetermined because the
extent of the  post-1983 "contaminant plume" at the  facility had
yet to be ascertained.

                                39

cent landowner"  defense, for several reasons:   Juniper (1) knew

in 1983  that the facility was in close proximity (200 feet) to a

larger Superfund  site already included on  the national priority

list;  (2) made no preacquisition inquiry of EPA or DEQE concern-

ing  possible contamination in the  area; and (3)  did not obtain

available maps  showing an unpaved  access road to  the allegedly

inaccessible portion of the facility where the drums were found.

          The EPA  opinion is  not necessarily dispositive  as to

the allowability of a claim or an administrative expense request.

Nevertheless, after  trial on the issue  of Hemingway's liability

for  past response  costs, the  bankruptcy court  noted (notwith-

standing  Juniper's contention that the drums  were located in an

area which was inaccessible  at the time of  the 1983 sale)  that

"easy access to the location of the barrels is possible along the
            

City  of  Woburn's  sewer  easement,  which  parallels  the  MBTA

tracks."  In  re Hemingway  Transp.,  108 B.R.  at  380 (emphasis
                                   

added).  The record further suggests that Juniper, an experienced

land  developer in the Woburn  area, may have  been familiar with

the environmental risks posed by its acquisition of the facility,

and  therefore may  have  been cognizant  that  the $1.6  million

purchase price  reflected a discount  due to contamination.   Cf.
                                                                 

Smith Land & Improvement Corp. v. Celotex  Corp., 851 F.2d 86, 90
                                                

(3d Cir.  1988) (in allocating responsibility  between vendor and

purchaser, court may consider any implicit discount in sale price

as reflecting assumption of risk of contamination).

          On  the  other  hand,  the record  indicates  that  the

                                40

bankruptcy court may have considered Juniper's responsibility for

any contamination extremely minimal,  especially in comparison to

Hemingway-Bristol.  For example, in  allowing Juniper's contribu-

tion  claims for past response  costs, the bankruptcy court allo-
                     

cated  total financial  responsibility to  Hemingway-Bristol, see
                                                                 

supra  note 4,  despite  the fact  that the  court also  found no
     

evidence that Hemingway-Bristol,  throughout twenty years'  occu-

pancy,  ever  generated  or  deposited hazardous  wastes  at  the

facility.   The bankruptcy court  further found that  Juniper was

never "apprised  of the presence of hazardous  wastes. . . ."  In
                                                                 

re Hemingway Transp., 73  B.R. at 501.  And, of  course, discount
                    

prices are not  uncommon in forced sales of  the assets of insol-

vent estates.

          Since the bankruptcy court's disallowance  of Juniper's

claim must be vacated  on independent grounds, see supra  Section
                                                        

II.A.4, on  remand the  trustee will  have the  burden to  file a

surrogate  claim in  behalf  of the  EPA and  the burden  to come
                                            

forward with substantial evidence that Juniper is not entitled to

an "innocent landowner" defense.  The ultimate burden of proof on

that defense, however, will remain  with Juniper.  The bankruptcy

court  should determine  whether Juniper  made  "all appropriate"

preacquisition  inquiry  pursuant  to  42  U.S.C.    9601(35),  a

factual finding  which  would be  subject to  clear error  review

only.  Should the bankruptcy court find that Juniper did not have

notice  or actual knowledge of  the contamination at  the time it

purchased  the facility  in 1983,  Juniper's  claim for  past and

                                41

future  response  costs  should  be estimated25  and  allowed  as

administrative  expenses entitled  to priority.26   On  the other

hand,  if Juniper did not  take all appropriate  steps to protect

itself from CERCLA liability, its lack of diligence exposed it to

the  harsh consequences  of strict,  joint and  several liability

                    

     25Because of  its earlier  section 502(e) disallowance,  the
bankruptcy court refused to  permit Juniper to introduce evidence
of anticipated future cleanup costs.  Although we need not decide
the issue at  this juncture,  we note that  the EPA's  nonbinding
preliminary  allocation  of  responsibility may  be  inadmissible
evidence as to the  value of Juniper's claim for  future response
costs, see 42 U.S.C.   9622(e)(3)(C) ("The nonbinding preliminary
          
allocation of responsibility shall  not be admissible as evidence
in  any proceeding  . . .  [nor] constitute  an apportionment  or
other statement on the divisibility of harm or causation."), and,
on remand, that  it may be incumbent on  Juniper to present other
evidence of the extent of its "injury."

     26The determination of  Juniper's CERCLA "liability" by  the
bankruptcy court is required solely for purposes of the allowance
or disallowance of Juniper's proof of claim, a core proceeding in
bankruptcy, and  the court cannot ignore the possibility that the
EPA might  yet maintain  a successful enforcement  action against
Juniper.   But  unlike  the holder  of  a prepetition  claim  for
                                                     
contribution,  which normally must await final distribution under
Bankruptcy Code    726, Juniper would enjoy  a distinct distribu-
tional advantage  should it succeed in  establishing its entitle-
ment  to the  "innocent  landowner" defense  under section  9607-
(b)(3).  The court properly could provide for the immediate, pre-
                                                           
distribution payment of Juniper's "claim" in trust, see, e.g., In
                                                                 
re Allegheny Int'l, Inc., 126  B.R. at 924 ("Creation of a  trust
                        
to be expended on  contingent claims is a frequently  used mecha-
nism  for  insuring that  such  funds  are properly  disbursed.")
(citing  In re Johns-Manville Corp., 68  B.R. 618, 625-26 (Bankr.
                                   
S.D.N.Y. 1986,  aff'd, 78  B.R. 407 (S.D.N.Y.  1987), aff'd,  843
                                                           
F.2d  636 (2d  Cir.  1988)), exclusively  for "necessary"  future
response  costs at  the facility.   See  3 Collier  on Bankruptcy
                                                                 
  503.01, at 503-5 (citing In re Verco Indus., Inc., 20 B.R. 664,
                                                   
665  (Bankr. 9th  Cir. 1982) (holding  that bankruptcy  court has
discretion to order early payment of an administrative expense));
cf. supra note 12.  In this manner, the EPA debt would be reduced
         
pro tanto by  any disbursement  from the  trust account,  thereby
         
effecting a de  facto "fixing" of  the EPA debt should  EPA later
                     
attempt to  file a claim against the chapter 7 estate.  See supra
                                                                 
note 7.

                                42

under CERCLA.  In that event, Juniper's claim would be subject to

the section 502(e)(2) "fixing"  requirement and Juniper would not

be entitled  to administrative  expense priority with  respect to

any allowable CERCLA claim.

B.   Juniper's Appeal: Disallowance of
     Attorney Fees (42 U.S.C.   9607(a)).
                                        

          Juniper argues  for an award of  attorney fees pursuant

to 42 U.S.C.   9607(a)(4)(B), which makes no reference to "attor-

ney fees"  in private  cost recovery  actions.   Juniper contends

that  the term  "necessary costs of  response" should  be broadly

construed  to encompass  attorney  fee awards  so  as to  advance

CERCLA's  remedial  purposes by  inducing  PRPs  to cooperate  in

initiating  prompt cleanup  efforts.   We affirm  on  the grounds

advanced  in the well-reasoned district court opinion.  See In re
                                                                 

Hemingway Transp., Inc., 108 B.R. at 383.
                       

          Absent an explicit statutory  authorization, a party is

not entitled to recover attorney fees simply because it prevailed

in the  litigation.  Runyon v. McCrary, 427 U.S. 160, 185 (1976).
                                      

CERCLA  contains explicit  provisions  authorizing  attorney  fee

awards in certain other types of actions.  See, e.g., 42 U.S.C.  
                                                    

9610(c)  (employee-whistleblowers  may  recover  "all  costs  and

expenses  (including attorney's fees") .  . . .");  id.   9659(f)
                                                       

(prevailing parties in private citizen suits may recover costs of

litigation,  "including reasonable  attorney  and expert  witness

fees"). Moreover, Congress  did not  consider, and  SARA did  not

include,  any  attorney fee  award  amendment  applicable to  the

                                43

private  cost recovery  provision in  section 9607(a)(4)(B).   We

therefore  conclude that  Congress has  elected not  to authorize

attorney fee awards in these actions.  Cf. Dedham Water, 972 F.2d
                                                       

at  461  ("[L]itigation-related  expenses  are,  of  course,  not

compensable as  response costs incurred by  private parties under

CERCLA   [9607].")  (citing Regan v.  Cherry Corp., 706  F. Supp.
                                                  

145, 149  (D.R.I. 1989)).  Although  a strong case  might be made

that attorney fee awards in private cost recovery actions promote

CERCLA's remedial  aims, see, e.g.,  General Elec. Co.  v. Litton
                                                                 

Indus. Automation  Sys., Inc.,  920  F.2d 1415  (8th Cir.  1990),
                             

cert. denied,  111 S. Ct. 1390  (1991), that case is  one for the
            

legislative  venue.   Alyeska  Pipeline Serv.  Co. v.  Wilderness
                                                                 

Soc'y, 421  U.S. 240,  263-64 (1975)  ("[I]t would be  difficult,
     

indeed, for the court,  without legislative guidance, to consider

some  statutes  important and  others  unimportant  and to  allow

attorneys' fees only in  connection with the former.");  see also
                                                                 

U.S.  Steel Supply Inc.  v. Chatwins Group,  Inc., No. 89-C20241,
                                                 

1992 U.S. App. LEXIS 13722, at 45-46 (N.D. Ill. Sept. 9, 1992).

          Juniper argues, nonetheless, that only a small  portion

of  its attorney fees were  incurred in preparation  for the "re-

sponse  cost"  recovery  litigation itself,  the  greater portion

having  been incurred to ensure  that Juniper's "response" was in

compliance with the administrative  order issued by the EPA.   We

conclude  that the present claim was waived.  At trial, Juniper's

attorney fee billings  were admitted in  evidence.  Juniper  sug-

gested no  distinction between  attorney fees incurred  for liti-

                                44

gative  and  administrative  purposes.27   Juniper's  failure  to

advance  the present  contention  below  deprived the  bankruptcy

court  of an  opportunity  to consider  it,  thereby waiving  the

claim.   See In re LaRoche,  969 F.2d 1299, 1305  (1st Cir. 1992)
                          

(arguments  not raised in  bankruptcy court cannot  be raised for

first time on appeal); In re 604 Columbus Ave.  Realty Trust, 968
                                                            

F.2d 1332, 1343 (1st Cir. 1992) (same).28 

C.  The Trustee's Cross-Appeal:  Administrative
    Expense Priority for Past Response Costs.
                                            

          The trustee appeals  the allowance  of Juniper's  claim

for past response costs as  an administrative expense entitled to

priority distribution.  The bankruptcy court ruled that Juniper's

CERCLA liability  resulted from its postpetition  purchase of the

facility from Hemingway-Bristol, debtor in possession, during the

course  of the chapter 11 proceeding.  The bankruptcy court found

that it would be  fundamentally "unfair" not to allow  Juniper to

                    

     27Prior  to  admitting  Juniper's  attorney  fee billing  in
evidence, the bankruptcy judge stated:  "[A]ssuming  only for the
moment  that  legal services  are  a compensable  item  of damage
[under CERCLA], then aren't  all reasonable fees incurred by  the
plaintiff  resulting  from  the  alleged harm,  aren't  they  all
compensable? . . . [D]idn't [Juniper's attorneys] perform servic-
es as a result of  the acts of the defendant if I find the defen-
dant  liable?"  Thus, the court plainly signaled its intention to
treat Juniper's entire attorney fee request as either compensable
or noncompensable.

     28Even  assuming  the issue  was  preserved,  the record  on
appeal does not enable reliable appellate review.  It is impossi-
ble to determine with  reasonable confidence whether the attorney
fees incurred  by Juniper were reasonably  "necessary" to facili-
tate  its compliance  with  the EPA  administrative order,  or to
discover  the existence or whereabouts of other PRPs who might be
amenable to suit by Juniper in an action for contribution.

                                45

receive  payment of  its contribution claim  in advance  of other

creditors.  See supra note 17 (noting court's reliance on Reading
                                                                 

Co. v. Brown, 391 U.S. 471 (1968)).
            

          We  affirm the  allowance of  Juniper's claim  for past

response costs as an  administrative expense entitled to priority

distribution under Bankruptcy Code    503(b)(1)(A), 507(a)(1) and

726(a)(1).  See  Norris v.  Lumbermen's Mut. Cas.  Co., 881  F.2d
                                                      

1144,  1151-52 (1st Cir. 1989) (appellate court may affirm on any

ground supported by the record).  As concerns Juniper's claim for

CERCLA  response  costs previously  incurred, its  entitlement to

priority  does not  hinge  on the  court's  determination of  the

merits  of  Juniper's  "innocent  landowner" defense.    Even  if

Juniper and  the Hemingway-Bristol estate are  co-"liable" on the

EPA  debt, Juniper's claim  for past  response costs  escapes the

section  502(e)(1)(B)  co-liability  problem encountered  by  its

claim  for  future response  costs,  because  Juniper's right  to

payment  for past  response costs  became "fixed"  upon Juniper's

incurrence of  actual and necessary  response costs prior  to the

time its claim was considered for  allowance.  On the other hand,

if Juniper and  the estate are  not co-"liable" on the  EPA debt,

because  Juniper  has the  benefit  of  the "innocent  landowner"

defense, both its  past and future response costs are recoverable

as priority administrative expenses  under either Mammoth Mart or
                                                              

Reading.
       

                               III

                            CONCLUSION
                                      

                                46

          We vacate the  bankruptcy court's section  502(e)(1)(B)

disallowance of  Juniper's claim for  future response costs.   On

remand,  the bankruptcy court shall permit  the chapter 7 trustee

and  Juniper a  reasonable time  within which  to  file surrogate

claims in  behalf of the EPA  under sections 501(b) or  501(c) of

the  Bankruptcy Code.  Should the trustee file a timely surrogate

claim,  and  should  Juniper  choose to  press  for  simultaneous

allowance  of  its so-called  "direct"  claim,  the court  should

determine  whether  Juniper would  be  entitled  to an  "innocent

landowner"  defense  pursuant to  42  U.S.C.    9601(35)(B).   If

Juniper is  so entitled, its  claim for "contribution"  should be

allowed  as an administrative expense.   If not  so entitled, its

claim  should be disallowed unless  and until Juniper "fixes" its

right  to contribution  by actually  incurring any  such response

costs by the time its claim  is considered for allowance.  If the

chapter  7 trustee  elects not  to file  a surrogate  claim under

section 501(b), thereby waiving  the section 502(e)(1) (B) objec-

tion  to Juniper's direct claim against the chapter 7 estate, the

court should receive evidence relating to the extent of Juniper's

anticipated response costs and should allow Juniper's claim as an

administrative expense of the chapter 11 estate.

          The order  disallowing an  award of attorney  fees, and
                                                                 

the  order allowing Juniper's claim for past response costs as an
                                                                 

administrative  expense,  are affirmed.    The  order disallowing
                                                                 

Juniper's claim for future response costs is vacated and remanded
                                                                 

to the  bankruptcy court for further  proceedings consistent with
                                                                 

                                47

the opinion herein; costs to neither party.
                                          

                                48