                  UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT
                                           

No. 92-2150

             THE JOHN S. BOYD COMPANY, INC., ET AL.,

                      Plaintiffs, Appellees,

                                v.

                   BOSTON GAS COMPANY, ET AL.,

                      Defendants, Appellees,

                                           

               NEW ENGLAND ELECTRIC SYSTEM, ET AL.,

                     Defendants, Appellants.

                                           

           APPEAL FROM THE UNITED STATES DISTRICT COURT

                FOR THE DISTRICT OF MASSACHUSETTS

           [Hon. Joseph L. Tauro, U.S. District Judge]
                                                     

                                           

                              Before

                    Torruella, Cyr and Boudin,

                         Circuit Judges.
                                       

                                           

     Scott  P. Lewis,  with  whom Palmer  &amp;  Dodge, and  John  F.
                                                                 
Sherman III, were on brief for appellants.
           
     Gerald  P. Tishler,  with whom  James W. Stoll,  Jonathan J.
                                                                 
Kane, Brown, Rudnick, Freed &amp;  Gesmer, Lawrence E. McCormick, and
                                                            
Wendy B. Levine, were on brief for appellees.
               

                                           

                           May 26, 1993
                                           

          TORRUELLA, Circuit Judge.   In this appeal we determine
                                  

whether  appellants must pay the  entire cost of  cleaning up two

different  environmental hazards:    coal gas  waste and  oil gas

waste.   As  the district  court correctly  apportioned liability

under the governing principles of the Comprehensive Environmental

Response, Compensation  and Liability Act of  1980 ("CERCLA"), 42

U.S.C.   9601 et seq., and the Massachusetts Superfund Act, Mass.
                     

Ann. L. ch. 21E (1993), we affirm.

                              FACTS
                                   

          The  Lynn  Gas Light  Co.  began  manufacturing gas  in

Massachusetts in the mid-1800's.  The Lynn Electric Light Co., an

electric utility, began operation some thirty years later.  These

companies merged in 1888, by legislative decree, to form the Lynn

Gas and Electric Co.   That company continued to  manufacture gas

from  coal ("coal  gas")  in large  quantities  until 1951,  when

natural  gas became  available.   After that  date, Lynn  Gas and

Electric Co. and  the successor to its gas  business manufactured

gas from oil ("oil  gas") in small quantities, to  supplement the

supply  of  natural  gas  during  peak  periods  of  use.    This

manufacture, called peak shaving, continued until 1972.

          New England Electric System ("NEES"), a holding company

owning various utilities  and an appellant  in this case,  bought

about 97% of the Lynn Gas and Electric Company in 1957.  In 1959,

NEES  created a  new  company,  called  the  Lynn  Gas  Co.,  and

structured a transaction between the new company and the Lynn Gas

and  Electric Co.  In this transaction, the Lynn Gas Co. acquired

                               -2-

the gas portion of  the Lynn Gas and  Electric Co.  Lynn Gas  and

Electric  Co. kept the electric  portion and changed  its name to

Lynn  Electric Co.     Lynn  Gas  Co. became  part  of NEES'  gas

division.   In 1962, Lynn  Electric merged into the Massachusetts

Electric  Company ("Mass.  Electric"), a  subsidiary of  NEES and

also an appellant in this case.  

          In the  1959 Separation  Agreement, Lynn Gas  agreed to

assume "all the duties  and liabilities of Lynn Gas  and Electric

related to such gas  business."  The Agreement spelled  out those

duties  and liabilities,  but  did not  mention environmental  or

other contingent  liabilities.  Nonetheless, Lynn  Gas Co. agreed

to "indemnify  and save harmless  Lynn Electric Company  from any

duty  or  liability  with respect  to  the  gas  business."   The

separation of the Lynn Gas Co. from Mass.  Electric was not truly

completed  by the Agreement.  Mass. Electric conveyed much of the

gas-related real estate to Lynn Gas  in 1962, more than two years

after  the  separation  occurred,  and continued  conveying  gas-

related parcels of land to  Lynn Gas until 1970.   Mass. Electric

never transferred other parcels.

          In  1964 the SEC ordered  NEES to divest  itself of its

gas  holdings under the Public Utilities  Holding Company Act, 15

U.S.C.    79a et seq.   The Supreme Court  affirmed.  SEC  v. New
                                                                 

England Electric System, 390 U.S. 207 (1968).  NEES finalized the
                       

divestiture in 1973  by selling  Lynn Gas and  several other  gas

companies  to Boston Gas, a  company unaffiliated with  NEES.  In

the  Purchase   Agreement,  Boston  Gas  agreed   to  assume  the

                               -3-

liabilities of Lynn Gas "as then existing."  A similar clause  in

the later  document entitled  Assumption of  Liabilities provided

that Boston Gas would assume all liabilities "outstanding  at the

date hereof."  The Lynn Gas Co. was dissolved in 1980.

          Some of the land upon which the Lynn Gas &amp; Electric Co.

and Lynn Gas  Co. manufactured  gas was taken  by eminent  domain

from Boston  Gas and Mass. Electric  in 1981 and  sold to outside

buyers.   When  these buyers  discovered  that the  property  was

contaminated   by  coal   gas   waste,  they   sued  NEES,   NEES

subsidiaries, and  Boston Gas under CERCLA  and its Massachusetts

parallel.1  During  the course of  the suit,  Boston Gas filed  a

claim  against NEES because oil gas  waste, generated after 1951,

contaminated property it acquired in the Lynn Gas Co. deal.

          The case  proceeded  in two  phases.   The first  phase

resulted  in  a  partial  consent decree  holding  the  utilities

jointly  and severally liable to plaintiffs for the cleanup.  The

second  phase concerned liability among the utilities, and is the

subject of  this appeal.  In the second phase, the court assigned

full  liability to Mass. Electric,  as the successor  of the Lynn

Gas  and  Electric Co.,  for  the cleanup  of  coal gas  waste on

plaintiffs' property.    The  court  also ordered  NEES  and  its

subsidiary  New England Power Service  Co. ("NEPSCO")2 to pay for

                    

1   Plaintiffs also raised other claims, but their disposition is
not at issue on appeal.

2     NEPSCO   is   a  service   company  devoted   to  providing
administrative,  engineering,   and   other  services   to   NEES
companies.

                               -4-

the  cleanup of  oil gas  waste  on Boston  Gas' property.   This

appeal followed.

                               -5-

                            DISCUSSION
                                      

          Under CERCLA3, four parties  may be responsible for the

costs  of an environmental  cleanup.   These are:   the  owner or

operator  of a  contaminated vessel  or facility;  the  owner and

operator  of a facility at  the time it  became contaminated; any

person who  arranges for the  transport or disposal  of hazardous

wastes;  and  any person  who  accepts hazardous  wastes  for the

purposes of transport or disposal.   42 U.S.C.   9607(a).  Courts

have interpreted  this statute to include  successor corporations

in a  merger situation,  e.g.,  Anspec Co.  v. Johnson  Controls,
                                                                 

Inc.,  922 F.2d  1240,  1245 (6th  Cir. 1991);  Louisiana-Pacific
                                                                 

Corp.  v. Asarco, Inc., 909  F.2d 1260, 1262-63  (9th Cir. 1990),
                      

and  parent corporations  when the  parent can  be  considered an

operator,  United States v.  Kayser-Roth Corp.,  910 F.2d  24, 26
                                              

(1st Cir.  1990), cert.  denied, 111  S.  Ct. 957  (1991), or  an
                               

owner,  United States v. Kayser-Roth  Corp., 724 F.  Supp. 15, 23
                                           

                    

3   Although we  primarily  discuss CERCLA  in  the body  of  the
opinion, we have not overlooked  the fact that the  Massachusetts
Superfund Act  is also a part  of this case.  CERCLA  "is in many
ways analogous to the  Massachusetts statute."  Acme Laundry  Co.
                                                                 
v. Secretary of Environmental Affairs,  410 Mass. 760, 575 N.E.2d
                                     
1086,  1092 (1991); see also Dedham Water Co. v. Cumberland Farms
                                                                 
Dairy,  Inc., 889 F.2d 1146, 1156  (1st Cir. 1989) (Massachusetts
            
statute "is  patterned after  the federal CERCLA  statute").   As
such,  the  Massachusetts courts  construe  it in  line  with the
Federal decisions  "absent compelling reasons to  the contrary or
significant  differences  in  content."    Rollins  Environmental
                                                                 
Services,  Inc. v. Superior Court, 368 Mass. 174, 330 N.E.2d 814,
                                 
818  (1975) (discussing  rules  of procedure).    Of course,  the
Massachusetts statute differs from CERCLA  in some respects.  See
                                                                 
Griffith v. New England Telephone &amp; Telegraph Co., 414 Mass. 824,
                                                 
610 N.E.2d  944 (1993)  (defining owner and  operator differently
for  the  purposes of  strict liability).    We will  not discuss
Massachusetts law unless it becomes relevant to the case.

                               -6-

(D. R.I. 1989).

          The  list  of  responsible  parties  reflects  CERCLA's

"essential  purpose"  of making  "those responsible  for problems

caused by the  disposal of  chemical poisons bear  the costs  and

responsibility   for  remedying   the  harmful   conditions  they

created."   Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805
                                                            

F.2d  1074,  1081  (1st Cir.  1986).4    CERCLA  thus makes  such

parties  liable to the government or to other private parties for

the costs of a cleanup.  Id.
                            

          If   9607(a)  imposes liability on  a party, then  that

party cannot escape liability by means of a contract with another

party.    42 U.S.C.     9607(e)(1)  provides  that "[n]o  .  .  .

agreement  or conveyance shall be  effective to transfer from the

owner  or operator of  any vessel or facility  or from any person

who may be  liable for a release or threat  of release under this

section, to any  other person  the liability  imposed under  this

section."  That is, the government or a private  party can pursue

any responsible party it desires.  

          Two  or more  parties,  however, can  allocate ultimate

responsibility among  themselves by  contract.  The  same statute

states that "[n]othing in this subsection shall bar any agreement

to  insure, hold harmless, or indemnify a party to such agreement

                    

4  In Dedham Water, we recognized one other fundamental policy of
                  
CERCLA:    "Congress  intended  that the  federal  government  be
immediately given the tools necessary for  a prompt and effective
response  to the  problems of  national magnitude  resulting from
hazardous waste disposal."  805 F.2d at 1081.  That policy is not
implicated in this appeal.

                               -7-

for any liability under this section."  Id.  Such agreements have
                                           

been  described as  "tangential"  to the  enforcement of  CERCLA.

Jones-Hamilton Co.  v. Beazer  Materials and Services,  Inc., 973
                                                            

F.2d 688, 692 (9th Cir. 1992).

          Appellants  contend that  the  district court  erred in

imposing  the full cost of cleanup  in this case on them because,

as companies separate from the  Lynn Gas and Electric Co.  or the

Lynn  Gas Co.,  they are  not  responsible parties  under CERCLA.

Rather, the district court  should have imposed the full  cost of

cleanup  on appellee  Boston  Gas.    Appellants arrive  at  this

conclusion in two steps.  First, they argue that the Lynn Gas Co.

is the  direct successor to the  gas portion of the  Lynn Gas and

Electric  Co.,  and  assumed  its  coal  gas  liability.    Next,

appellants  argue that Boston Gas,  as the successor  of the Lynn

Gas Co., assumed its  coal and oil gas liabilities.   We disagree

with appellant on all points.

                                I.

          We first  discuss who is  responsible for the  coal gas

waste  created before  any of the  present parties  were involved

with  the  Lynn  Gas and  Electric  Co.    To accept  appellant's

conclusion,  we must  find  that the  liability shifted  from the

independent Lynn Gas and Electric Co., to the NEES-owned Lynn Gas

and Electric Co. (renamed the Lynn Electric Co.), to the Lynn Gas

Co., and finally to Boston Gas.  We cannot do so, as the district

court  correctly found that the  chain of liability  for coal gas

waste broke at the link between NEES and the Lynn Gas Co.

                               -8-

          When  NEES  bought  Lynn   Gas  and  Electric  Co.,  it

maintained  that company  as  a separate  entity with  continuing

liability under CERCLA for the waste it created before 1951.  See
                                                                 

42  U.S.C.    9607(a)(1) (owner  and  operator  of  a  vessel  or

facility is a responsible party).  When NEES sold the gas portion

of  Lynn Gas and Electric Co.  to the newly-created Lynn Gas Co.,

the environmental liabilities  of Lynn Gas  and Electric did  not

disappear.

          Consistent with CERCLA's policy  of holding the company

that sullied  the property responsible for the  costs of cleanup,

see  Dedham  Water, supra,  those  liabilities  travelled to  the
                         

successor, if  any, of Lynn  Gas and Electric.   See 42  U.S.C.  
                                                    

9607(a)(2) (owner or operator of facility at time of discharge is

a responsible party); Smith Land  &amp; Improvement Corp. v.  Celotex
                                                                 

Corp., 851  F.2d 86, 91  (3d Cir. 1988),  cert. denied, 488  U.S.
                                                      

1029 (1989).

          Initially, Lynn Gas and  Electric Co. and Lynn Electric

Co. were  the same entities.   That fact is  reflected not merely

because  of a  simple  name change,  but  also because  the  Lynn

Electric Co. kept  Lynn Gas  and Electric's property.   As  noted

above, the Lynn  Electric Co.,  which by then  merged into  Mass.

Electric,  conveyed the gas-related property  to the Lynn Gas Co.

at various  points  between 1962  and  1970.   By  virtue of  the

merger,  Mass.  Electric  became  the  heir  to  the  assets  and

liabilities of the Lynn Electric Co.  See Smith Land, 851 F.2d at
                                                    

91  ("In case  of merger  . . . where  one corporation  ceases to

                               -9-

exist  and  the other  corporation  continues  in existence,  the

latter corporation is  liable for the debts,  contracts and torts

of the former").

          The  question,  then,  is  whether  the  Lynn  Gas  and

Electric   Co.  transferred   to  the   Lynn  Gas   Co.  ultimate

responsibility  for  environmental  hazards  by  contract.    The

relevant document is the  Separation Agreement (the  "Agreement")

entered  into between the parties  on September 9,  1959; a later

indenture  also  bears  on  the   issue.    As  neither  document

apportions  CERCLA  liabilities explicitly,  we must  discern the

intent of  the parties.  We  do this by reference  to other cases

dealing with nonexplicit assumptions of liability in order to set

a standard by which to measure that intent.

          We note  at  the outset  that  the district  court  was

uncertain whether  to use a state rule of contract interpretation

or a uniform federal rule.  Indeed, while federal law governs the

validity of  liability agreements  in the CERCLA  context, Mardan
                                                                 

Corp. v. C.G.C. Music, Ltd., 804 F.2d 1454, 1457 (9th Cir. 1986),
                           

courts have wrestled with what the content of that law should be.

The  majority  of courts  have turned  to  state contract  law to

provide the substantive rule, so long as it is not hostile to the

federal interests animating  CERCLA.  E.g., id.; United States v.
                                                              

Hardage, 985 F.2d 1427, 1433 (10th Cir. 1993); Jones-Hamilton Co.
                                                                 

v. Beazer Materials &amp;  Services, Inc., 973 F.2d 688,  692-93 (9th
                                     

Cir.  1992);  Olin Corp.  v. Consolidated  Aluminum Corp,  807 F.
                                                        

Supp. 1133, 1141 (S.D.N.Y. 1992); Rodenbeck v. Marathon Petroleum
                                                                 

                               -10-

Co., 742 F. Supp. 1448, 1456-57 (N.D. Ind. 1990).   But see Mobay
                                                                 

Corp.  v. Allied-Signal,  Inc., 761  F. Supp.  345, 352  (D. N.J.
                              

1991); Wiegmann &amp; Rose Int'l Corp. v. NL Industries, 735 F. Supp.
                                                   

957, 961-62 (N.D. Cal. 1990).  

          This circuit recently reached the same conclusion in an

analogous situation.   American  Policyholders  Insurance Co.  v.
                                                             

Nyacol  Products, Inc.,  No. 92-1949,  slip op.  at 16  (1st Cir.
                      

Feb. 24,  1993)  (rejecting  use  of  "uniform  federal  rule  of

decision to govern interpretation  of an insurance policy's scope

of  coverage  vis-a-vis CERCLA  liability"); see  also Robertshaw
                                                                 

Controls Co. v.  Watts Regulator Co., 807  F. Supp. 144, 153  (D.
                                    

Me. 1992)  (applying state rather  than federal law  to interpret

whether settlement agreement shifted CERCLA liability).

          We  thus  look to  Massachusetts  law  for guidance  in

interpreting the  Agreement with  respect to  CERCLA liabilities.

Two principles strike us as particularly  relevant.  First, "laws

enacted  after the  execution of  an  agreement are  not commonly

considered to become part of  the agreement unless its provisions

clearly  establish  that  the  parties  intended  to  incorporate

subsequent enactments  into their agreement."   Arthur D. Little,
                                                                 

Inc.  v. Commissioner of Health and Hospitals, 395 Mass. 535, 481
                                             

N.E.2d  441, 452  n.13 (1985)  (quoting Feakes  v.  Bozycako, 373
                                                            

Mass. 633, 369  N.E.2d 978, 980 (1977)); see  also Mayor of Salem
                                                                 

v.  Warner-Amex Cable  Communications, Inc.,  392 Mass.  663, 467
                                           

N.E.2d 208, 210 (1984).   Second, "a general  release . . . is to

be given effect, even if the parties did not have in mind all the

                               -11-

wrongs which existed at the time of the release," so  long as the

language  of  that release  is  broad  enough to  encompass  such

contingent liability.   Naukeag Inn,  Inc. v. Rideout,  351 Mass.
                                                     

353, 220 N.E.2d 916, 918 (1966).

          These  principles   essentially   lead  to   one   rule

applicable to  the present case.   To transfer  CERCLA liability,

the Agreement must contain  language broad enough to allow  us to

say  that the  parties  intended to  transfer either  contingent,

environmental liability,  or all  liability.  The  Agreement must

recognize the  possibility of  future liability or  dispense Lynn

Gas and Electric  of all  liabilities in  the form  of a  general

release.    Unfortunately for  appellants,  the  language of  the

Agreement is not drafted in such broad terms.

          While initially the Agreement  provides that "Lynn  Gas

will assume and take over all the duties and liabilities" related

to the gas business, the Agreement later lists those obligations.

The series  contains obligations pertaining only  to the existing

business,  such  as obligations  to  serve  gas customers,  honor

contracts  for the  purchase  and  sale  of new  facilities,  and

provide  reserves to account for bad debt and depreciation on the

gas  plant.   No reference  is made  to any future  or contingent

liabilities.  

          An indenture entered into by the parties several months

later  contains  a  similar  list.    A  catch-all  provision  on

liability refers to the liabilities "indicated in summary form by

the  balance sheet" attached to the document, revealing an intent

                               -12-

that the only liabilities assumed were those known, existing, and

somehow accounted  for at the time of execution.  It is true that

the indenture states that the liabilities specifically assumed by

Lynn Gas are "without  implied limitation."  But it  is one thing

to  say that  the list  of liabilities  is not  all-inclusive and

quite  another  to  assume  that the  obligations  not  specified

include then non-existent environmental liabilities to be created

under CERCLA and unforeseeable when the agreement was made.

          We must  conclude that  neither document  evidences the

intent to transfer environmental liability in the requisite broad

language.  The responsible  party in this case, as  between Mass.

Electric  and Boston Gas, is  Mass. Electric --  the successor to

the Lynn Gas and Electric Co.  See ante at 7-8.
                                       

                               II.

          We now discuss who is responsible for the oil gas waste

contaminating  the property  owned by  Boston Gas.   To  find for

appellants,  we must determine  that Boston Gas  agreed to assume

the environmental  liabilities of the  oil gas waste  produced by

Lynn  Gas Co.  between  1951 and  1970.   Happily,  the  contract

principles that steered  our analysis  on the issue  of coal  gas

waste steer  most of our  analysis on this  issue also.   We must

determine  whether  Boston  Gas agreed  to  assume  environmental

liabilities in its agreement to buy Lynn Gas Co.5

                    

5  Technically, NEES sold  the Lynn Gas Co. first to  Eastern Gas
and Fuel Associates, the  parent company of Boston Gas.   Eastern
then sold Lynn Gas to  Boston Gas on the same day.   Because this
intermediate  transaction does  not alter  any liability  in this
case  by statute, contract, or any other norm, we discuss Eastern

                               -13-

          The contract  governing the sale of Lynn  Gas to Boston

Gas,  the Closing Agreement, provides an easier case than did the

Agreement  discussed  above.    The Closing  Agreement  expressly

limited the liabilities assumed  by Boston Gas to those  "as then

existing."   A similar  clause in  the Assumption  of Liabilities

document  provided  that  Boston  Gas  would  assume  only  those

liabilities  "outstanding at  the  date hereof."   Such  language

fairly  obviously  forecloses  the possibility  that  Boston  Gas

agreed  to  assume  any  contingent liabilities,  much  less  the

environmental  liabilities  at  issue   here.    Nothing  in  the

remaining documents changes this conclusion.  

          Apart from  the language of the  contract, the district

court found several other facts convincing in finding that Boston

Gas lacked the intent to assume the liability here at issue.  For

example,  the  parties did  not discuss  oil  gas waste  in their

negotiations.  Indeed,  it does  not appear that  Boston Gas  was

informed about the oil gas waste at all.   Furthermore, there was

no  communication  between  the  parties  about   any  contingent

liabilities not  appearing on  the  balance sheet.   These  facts

bolster  our confidence  in concluding  that Boston  Gas did  not

accept those liabilities.

          Although  we are  convinced that  Boston Gas  cannot be

held liable for the oil gas waste, we must determine whether  the

district court  was correct to  impose those liabilities  on NEES

and  NEPSCO.   In other  words, are  NEES and  NEPSCO responsible

                    

no further.

                               -14-

parties?

          In  Kayser-Roth, 910  F.2d  at 26,  we determined  that
                         

parent  companies can  be  held liable  for  CERCLA liability  as

operators  of   a  contaminated   facility  under  42   U.S.C.   

9607(a)(2).6   Such liability is  direct; it does  not require us

to pierce the  corporate veil.  Id. at 27  ("Kayser is being held
                                   

liable for its activities as an operator, not the activities of a
              

subsidiary").  In contrast, piercing the corporate veil is a form

of  owner liability.   Kayser  Roth,  724 F.  Supp. at  23.   The
                                   

district  court  determined that  Kayser  was liable  both  as an

operator and an owner.  Id. at 22-24.  When the case came  before
                           

our court, we left  open the question of owner  liability because

our   finding   on  operator   liability   resolved  the   issues

satisfactorily.  910 F.2d at 28 n.11.  

          We envisioned in Kayser that holding a parent liable as
                                 

an operator would  be somewhat unusual.   Id. at  27.  "To be  an
                                             

operator  requires more  than merely  complete ownership  and the

concomitant general  authority or  ability to control  that comes

with ownership.  At  a minimum it requires active  involvement in

the activities of the  subsidiary."  Id.  This  standard requires
                                        

an  investigation into  the relationship  between the  parent and

subsidiary,  in order to reveal  the requisite level of corporate

involvement.    As  the  question is  fact-laden,  we  review the

district court's findings only for clear error.  Id.
                                                    

                    

6   That  section holds  liable "any  person who  at the  time of
disposal  of  any  hazardous  substance  owned  or  operated  any
facility at which such hazardous substances were disposed of."

                               -15-

          The relationship  among the relevant companies  in this

case amply demonstrates that  operator liability burdens NEES and

NEPSCO  with the responsibility to  purge the oil  gas waste from

Boston Gas'  property.  We recite  only a few of  the facts which

the district  court  found dispositive,  and  which we  too  find

important.

          NEES   continually  maintained  a  presence  among  the

officers and  directors of Lynn Gas.   The president of  Lynn Gas

was also the president of NEES' gas division; he was appointed by

the  chairman of  NEES and reported  directly to  NEES officials.

NEES selected the directors of Lynn Gas,  and a senior officer of

NEES approved Lynn Gas' budget.  Lynn Gas needed approval for all

expenditures over $5,000.   NEPSCO provided extensive services to

Lynn Gas, such as controlling the checking  account, handling the

purchase  of the oil used  in peak shaving,  and maintaining Lynn

Gas property.  NEPSCO employees were  also well represented among

Lynn's officers and directors.  

          Given  the almost overwhelming  evidence, we cannot say

that  the district court clearly  erred in finding  that NEES and

NEPSCO  were  operators of  the Lynn  Gas  facilities.   NEES and

NEPSCO  are responsible  parties  for the  oil gas  waste created

while they were linked to the Lynn Gas Co.

                               III.

          We must resolve several residual matters, but they need

not detain us long.

          Appellants   contend  that  under   the  principles  of

                               -16-

successor liability, Boston Gas must be liable for the cleanup of

the waste sites.  Appellants' argument has initial appeal in that

Boston Gas, and Lynn Gas before it, took over the gas business of

other companies.   This argument, however,  does not reflect  the

successor corporation  doctrine.   In  Dayton v.  Peck, Stow  and
                                                                 

Wilcox Co., 739 F.2d 690, 692 (1st Cir. 1984), we identified four
          

situations in which successor liability is appropriate:  when the

buyer  agrees to  assume liability;  when  a consolidation  or de

facto merger occurs; when  the buyer is merely a  continuation of

the  seller;  and  when the  transaction  is  a  fraud to  escape

liability.  

          We have  already determined  that Boston Gas,  and Lynn

Gas  before it, did not  agree to assume environmental liability.

Furthermore, there is no allegation of fraud in  this case.  Only

the merger  and continuation situations remain to bind Boston Gas

as successor to the gas liabilities in this case.   There was, of

course,  no formal  merger  by which  Lynn Gas  Co. --  and later

Boston  Gas -- assumed the  liabilities of Lynn  Gas and Electric

Co., so appellants  would have to prove a de  facto merger claim.

Central  to a  de  facto merger  or  continuation of  the  seller

corporation  claim, however,  is  a  finding  that  shareholders,

officers and directors continued into the buyer corporation.  Id.
                                                                 

at 693.  Boston Gas, however, did not share any such  continuity.

The  successor corporation  doctrine  actually supports  imposing

liability on  appellants, as the requisite  continuity existed in

their corporate structures.

                               -17-

          Appellants also argue that  Mass. Gen. L. ch. 164    98

requires  the  assumption  by  Boston Gas  of  the  environmental

liabilities at issue here.  That brief statute states that "[t]he

purchasing  or consolidated company shall . . . be subject to all

the duties, liabilities and  restrictions, of the company selling

or merged  as aforesaid, so  far as  they are  applicable to  the

purchasing or  consolidated company."   The district  court found

that  the statute  simply serves  to allocate  the rights  of the

public  with respect to the  utilities, and does  not curtail the

rights  of  contracting parties  to  allocate  ultimate liability

between themselves.

          We find no error in the district court's interpretation

of   98.  The documents transferring the gas business to Lynn Gas

Co. and  later selling Lynn Gas  Co. to Boston Gas  both refer to

  98.  The documents proceed to list the present liabilities owed

by  the companies to customers  and other members  of the public.

The  parties thus  understood  the statute  to allocate  certain,

existing liabilities only.  The liabilities at issue in this case

are not among them.

          Finally,  appellants argue that  equity requires Boston

Gas  to share  in  the cost  of  the cleanup.    We find  nothing

inequitable  in  imposing  those   costs  solely  on  appellants,

however.    The policy  underlying CERCLA  --  to make  those who

befouled  the  environment  responsible  for its  cleanup  --  is

certainly  equitable.  See  Dedham Water, 805  F.2d at  1081.  We
                                        

have found that appellants were the proper responsible parties in

                               -18-

this case, and it is equitable for them to clean up the property.

          Affirmed.
                  

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