

yFebruary 15, 1995UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT

                                             

No. 94-1841

                    UNITED STATES OF AMERICA,
                       Plaintiff, Appellee,

                                v.

                    UGO DIBIASE, ETC., ET AL.,
                     Defendants, Appellants.

                                             

                           ERRATA SHEET                                     ERRATA SHEET

     The  opinion of  the Court  issued on  January 25,  1995, is
corrected as follows:

     On cover sheet, line 6, change "Louis" to "Lois"

                  UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT

                                             

No. 94-1841

                    UNITED STATES OF AMERICA,
                       Plaintiff, Appellee,

                               v. 

                    UGO DIBIASE, ETC., ET AL.,
                     Defendants, Appellants.

                                              

           APPEAL FROM THE UNITED STATES DISTRICT COURT

                FOR THE DISTRICT OF MASSACHUSETTS

           [Hon. A. David Mazzone, U.S. District Judge]                                                                

                                              

                              Before

                      Selya, Circuit Judge,                                                    

                  Bownes, Senior Circuit Judge,                                                        

                    and Stahl, Circuit Judge.                                                      

                                              

     Stephen M.  Leonard, with  whom Mintz, Levin,  Cohn, Ferris,                                                                           
Glovsky &amp; Popeo was on brief, for appellants.                         
     John E.  Darling, with  whom Joseph  C.  Correnti, Ellen  M.                                                                           
Winkler, and  Serafini, Serafini and  Darling were on  brief, for                                                       
defendant-appellee South Essex Sewerage Dist.
     Joan  M.  Pepin,  with  whom  Lois  J.  Schiffer,  Assistant                                                               
Attorney General,  David C.  Shilton, Catherine Adams  Fiske, and                                                                      
Andrea Nervi Ward Attorneys, U.S. Dept. of Justice, Environment &amp;                           
Natural Resources Div.,  and John T. McNeil,  Sr. Asst't Regional                                                     
Counsel, U.S. Environmental Protection Agency, were on brief, for
the United States.

                                             

                         January 25, 1995
                                             

          SELYA, Circuit  Judge.  The United  States negotiated a                    SELYA, Circuit  Judge.                                         

settlement with a potentially  responsible party, the South Essex

Sewerage  District  (SESD),   fixing  SESD's  share  of   certain

emergency removal costs incurred by the government in the cleanup

of a Superfund site.1   The district court placed  its imprimatur

on the settlement by entering a consent decree (the SESD decree).

Appellant, Ugo DiBiase, a  non-settling responsible party left to

hold  the bag for the  remainder of the  emergency removal costs,

prosecuted this appeal in hopes of convincing us that the consent

decree is unfair.  We are not persuaded.

I.  BACKGROUND          I.  BACKGROUND

          The Salem  Acres Superfund Site (the  Site) consists of

five  acres of undeveloped land  containing wetlands and a brook,

located  in Salem, Massachusetts.   From  1946 until  1969, James

Grasso  owned it.  During that interval, Grasso permitted SESD to

dump  at the Site.   SESD deposited sewerage  wastes into unlined

"sludge  pits" which were surrounded by earthen berms and fences.

SESD  maintained  the  Site,  including the  berms  and  interior

fencing,  during  the period  that  Grasso permitted  it  to dump

there.

          In  December of 1969, Grasso sold a large tract of land

that encompassed  the Site  to Salem  Acres, Inc., a  corporation

                                                  

     1At that point in time, the emergency removal costs totalled
$2,258,893.    They comprised  sums already  spent by  the United
States for  containment and capping  work at  the Site,  together
with interest and costs  of enforcement.  See 42  U.S.C.    9604,                                                       
9607.

                                3

owned  jointly by two brothers,  Ugo and Elio  DiBiase.2  Unaware

that the property had changed  hands, SESD transported a shipment

of solid wastes to the sludge pits early in 1970.  When appellant

learned  of this occurrence, he  informed SESD that  he would not

tolerate disposal at the Site in the future.  SESD refrained from

further dumping.

          During  the  1970s,  appellant received  correspondence

from various  municipal agencies,  including the Board  of Health

and the Fire Department, expressing concern over the unrestricted

access to the  Site and the random dumping that was taking place.

Appellant responded  by erecting  gates at  the entrances  to the

property, but he did not thereafter maintain them.  Consequently,

intermittent dumping by unknown parties continued.

          Appellant claims that he had no direct knowledge of the

sludge pits until  1980, when  a state agency  notified him  that

legal action would be taken unless he rectified conditions at the

Site.  Even when confronted with this threat, appellant failed to

take meaningful  action.  He agreed to install new gates, but, in

the end, neglected to do so.  And although the  earthen berms and

interior fencing  around the sludge pits  had completely decayed,

                                                  

     2In 1982,  Elio DiBiase  divested himself of  any beneficial
interest in  the property, and the  corporation transferred title
to  the Site  to  DiBiase Salem  Realty  Trust, an  entity  under
appellant's  sole   control.    Hence,  the   defendants  in  the
underlying  action  include  DiBiase  Salem   Realty  Trust;  Ugo
DiBiase,   in  his   capacity  as   trustee;  and   Ugo  DiBiase,
individually.    For ease  in  reference, we  ignore  both Elio's
passing  involvement  and  the  inclusion  of  the  trust   as  a
defendant, and treat Ugo  DiBiase as the property owner  and sole
appellant.

                                4

appellant made no discernible effort to investigate the situation

or  ameliorate the  obvious  hazards (or  so  the district  court

supportably found).

          In  1987, an  easily foreseeable  contretemps occurred.

Heavy  rains  caused  the  sludge pits  to  overflow  and release

deleterious  substances into  the nearby wetlands  (including the

brook).  The United  States Environmental Protection Agency (EPA)

reacted  to the release  by conducting the  two emergency removal

actions that underlie  this appeal.  After  completing that work,

the  government  sued appellant  and  SESD, seeking  not  only to

recover  EPA's  emergency removal  costs  but  also to  secure  a

declaration  of  the  defendants'  liability  for  future cleanup

costs.

          In  due   season,  the   district  court  granted   the

government's   motion  for   partial  summary   judgment  against

appellant, finding him liable for past  and future response costs

at  the  Site  under  the Comprehensive  Environmental  Response,

Compensation, &amp;  Liability Act (CERCLA), 42  U.S.C.    9601-9675.

The government  lodged a  similar  motion against  SESD, but  the

district court  never ruled on it.   Thus, at the  time it signed

the consent decree, SESD remained a potentially responsible party

(PRP) rather than a demonstrably responsible party (like DiBiase)

whose liability had been judicially established.

          Throughout the proceedings,  the government  endeavored

to arrange a global  settlement.  Though EPA's  negotiations with

appellant  came to naught, its negotiations with SESD bore fruit.

                                5

After  notice, opportunity  for public  comment, and  an in-court

hearing, the district court, over appellant's vigorous objection,

entered the SESD decree on April 5, 1994.  Under it, SESD agreed,

inter  alia, to reimburse the  United States for  85% of the past                     

removal costs  calculated  as of  the  settlement date.    SESD's

payment amounted to $1,822,775.

          On May 6,  1994, the   district court entered  judgment

against  appellant for  $494,207, representing  the unremunerated

portion of the government's  historic removal costs calculated as

of  that  date.3   After the  court  denied DiBiase's  motion for

reconsideration, this appeal ensued.

II.  STANDARD OF REVIEW          II.  STANDARD OF REVIEW

          The legislative history of the Superfund Amendments and

Reauthorization Act of 1986  (SARA), P.L. 99-499,   101  et seq.,                                                                          

clearly indicates that, when  reviewing a proposed consent decree

in the CERCLA context, a trial court does not write on a pristine

page.   Instead, its function  is circumscribed:   it must ponder

the proposal only to  the extent needed to "`satisfy  itself that

the  settlement  is reasonable,  fair,  and  consistent with  the

purposes  that CERCLA is intended  to serve.'"   United States v.                                                                        

Cannons Eng'g Corp.,  899 F.2d  79, 85 (1st  Cir. 1991)  (quoting                             

House Report).

          This  circumscription  has important  ramifications for

appellate  oversight.    We  elucidated the  standard  of  review
                                                  

     3The   amount  also   includes   incremental  interest   and
enforcement  costs  arising  after  the  effective  date  of  the
settlement between SESD and the United States.  See supra note 1.                                                                   

                                6

governing  the entry  of CERCLA consent  decrees in  Cannons, and                                                                      

reaffirmed  that  standard in  United  States  v. Charles  George                                                                           

Trucking, Inc., 34 F.3d 1081 (1st  Cir. 1994).  We noted that, by                        

the time CERCLA consent decrees reach this court,

          they  are  "encased  in  a  double  layer  of
          swaddling."   In  the  first  place, a  trial
          court, without  abdicating its responsibility
          to exercise independent judgment,  must defer
          heavily  to  the parties'  agreement  and the
          EPA's  expertise . . .  .    The second basis
          for deference is equally compelling.  Because
          an  appellate court ordinarily cannot rival a
          district  court's  mastery  of   a  factually
          complex case . . . the district court's views
          must be accorded considerable respect.

               Largely in consequence  of these  layers
          of   protective   swaddling,   an   appellate
          tribunal  may  overturn  a  district  court's
          decision to approve or  reject the entry of a
          CERCLA consent decree only for manifest abuse
          of  discretion.     [In  other   words],  the
          decision  below  stands unless  the objectors
          can  show that, in  buying into [the decree],
          the lower  court made a serious  error of law
          or suffered a meaningful lapse of judgment.

Id. at 1085  (quoting and citing Cannons, 899 F.2d at 84).  It is                                                  

this yardstick   which must be used to  measure the lower court's

acceptance of the SESD decree.

III.  DISCUSSION          III.  DISCUSSION

          On appeal, DiBiase does not attack the district court's

liability determination.   Rather,  he fires a  rifle shot  aimed

strictly  and  solely  at  the  appropriateness  of  the  court's

allocation of the emergency  removal costs.  The shot  misses the

mark.

          In actuality, appellant draws a bead on an  even tinier

target.  He virtually concedes that two of the three criteria for

                                7

the  approval  of  an  environmental  consent  decree  have  been

satisfied, and snipes only  at the fairness vel  non of the  SESD                                                              

decree.     Moreover,  while   fairness  in  respect   to  CERCLA

settlements  has both a procedural  and a substantive aspect, see                                                                           

Cannons, 899 F.2d  at 86, appellant does not train  his sights on                 

any  alleged procedural  unfairness.   Since our inquiry  must be

limited accordingly, the issue  before us reduces to  whether the

SESD decree, as approved below, is substantively fair.

          Substantive  fairness   has  a  protean   quality  and,

therefore, is often discussed  in general terms.  In  Cannons, we                                                                       

wrote:

          Substantive  fairness   introduces  into  the
          equation concepts of  corrective justice  and
          accountability:  a party should bear the cost
          of  the  harm   for  which   it  is   legally
          responsible.  The logic behind these concepts
          dictates  that settlement terms must be based
          upon,  and  roughly  correlated   with,  some
          acceptable  measure   of  comparative  fault,
          apportioning liability among settling parties
          according   to   rational   (if   necessarily
          imprecise)  estimates of  how much  harm each
          PRP has done . . . .

                 Whatever   formula   or   scheme   EPA
          advances for measuring comparative  fault and
          allocating liability should be upheld so long
          as   the   agency   supplies    a   plausible
          explanation for it,  welding some  reasonable
          linkage  between the  factors it  includes in
          its  formula or scheme  and the proportionate
          shares of settling PRPs.

Id. at 87  (citations omitted).  Viewing the  SESD decree in this             

deferential perspective, we find EPA's rationale for the proposed

allocation to be  plausible, and also  find the district  court's

endorsement of that rationale to be well within the parameters of

                                8

fundamental fairness.

          In the  first instance,  the allocation  reflects EPA's

determination that both SESD  and DiBiase are legally responsible

to reimburse the public fisc for the emergency removal costs.  It

is impossible to quarrel with  this determination.  SESD,  though

not adjudged liable, no  longer contests its liability.   By like

token,  DiBiase  has  not   appealed  the  district  court  order

adjudging him liable for the damages; and, legally, the liability

of responsible parties in a CERCLA case is joint and several, see                                                                           

O'Neil  v. Picillo, 883 F.2d  176, 178-79 (1st  Cir. 1989), cert.                                                                           

denied, 493 U.S. 1071 (1990).                

          Next,  the allocation  fashioned  by EPA  reflects  the

agency's assessment  that SESD, as the  generator and transporter

of most  of the toxic waste dumped in the sludge pits, is chiefly

responsible  for the  offending conditions.   The  consent decree

recognizes this  primary responsibility  by assigning  the lion's

share of the removal  costs to SESD.   The flip side of  the same

coin is that the consent decree implicitly recognizes appellant's

lesser  involvement by  leaving a relatively  small share  of the

removal costs (15%) to be collected from him.

          The district court concluded that this apportionment is

fair.  The court  cited its earlier judgment on  liability, noted

appellant's  utter   failure  to   take  any  action   either  to

investigate conditions or to  ameliorate danger during almost two

decades  of  involvement in  Site ownership  and more  than seven

years of actual knowledge about the sludge pits, and specifically

                                9

rejected  appellant's claim  that he "did  no wrong."   Appellant

importunes us to set  aside the district court's order.   Despite

having  been  adjudged liable,  appellant  stubbornly  refuses to

recognize  his own culpability and maintains that it is unfair to

expect him  to bear any  of the  removal costs.   His importuning                                 

fails for no fewer than five reasons.

          In  the first place, appellant  does not cite    and we

have  been  unable  to  locate    any  CERCLA  case  in  which  a

demonstrably liable party has been  held entitled to safe passage                             

in  a  global settlement.   We  think  it is  counterintuitive to

suppose that any such entitlement exists.

          Second, and  relatedly, we regard  appellant's argument

as a surreptitious attempt to relitigate his "innocent landowner"

defense,  see  42  U.S.C.     9607(b)(3)  (exonerating  PRPs  who                       

"exercised due  care" and  can demonstrate,  inter  alia, that  a                                                                  

release  was caused "solely" by a third party's act or omission);

see  also Westwood  Pharmaceuticals,  Inc. v.  National Fuel  Gas                                                                           

Distrib'n Corp.,  964 F.2d 85,  89-91 (2d Cir.  1992) (discussing                         

operation  of  innocent  landowner  defense),4  rejected  by  the

                                                  

     4For  purposes  of  this   statutory  provision,  a  PRP  is
responsible  for the acts and omissions of his employees, agents,
or other persons  who have a "contractual relationship" with him.
42  U.S.C.    9607(b)(3).   The  term "contractual  relationship"
includes relationships involving "land contracts, deeds, or other
instruments transferring title," 42 U.S.C.   9601(35), subject to
certain  exceptions.     One  such  exception   is  for  innocent
landowners,  that is,  acquirers of  land who,  having made  "all
appropriate inquiry" into  the condition of  the property at  the
time  of acquisition,  id.    9601(35)(B),  nevertheless "had  no                                    
reason to know" that any environmental problem might exist, id.                                                                           
9601(35)(A).

                                10

district  court  when  it  granted the  government's  motion  for

partial  summary judgment.   We  have no  warrant to  entertain a

collateral attack on that judgment.  It follows  that, as a party

jointly and  severally liable  for payment  of all the  emergency

removal costs, appellant cannot  reasonably expect others to foot

the entire bill.

          In the third place, the allocation  proposed by EPA and

ratified  by  Judge   Mazzone  does  not  strike  us   as  either

substantially disproportionate or manifestly unfair.  To be sure,

SESD played a leading role in  the contamination of the Site  and

appellant, who  came on  the scene  later, played  an appreciably

less prominent role.   But, an actor cast in a bit part is not to

be confused with a  mere spectator, whose only involvement  is to

lounge  in  the  audience  and watch  events  unfold.   Appellant

contributed to the 1987  incident in a variety of  ways.  Despite

being warned  of a  potentially dangerous condition,  he twiddled

his thumbs:   he failed  to safeguard the  Site, thus  permitting

third parties to dump  at will and exacerbate an  already parlous

situation;  fiddled while  the  earthen berms  deteriorated;  and

turned a blind eye to evolving public health and safety concerns.

Allocating 15% of the historic removal costs as appellant's share

seems commensurate  with these shortcomings and  with the quantum

of comparative fault fairly ascribable to him.

          Fourth, appellant's  concept    which seems to  be that

liable  parties  should go  scot free  in environmental  cases if

other parties  are considerably  more culpable    runs at  cross-

                                11

purposes  with  CERCLA's  policy of  encouraging  settlements  as

opposed to endless court  battles.  See H.R.  Rep. No. 253,  99th                                                 

Cong.,  1st  Sess., pt.  5, at  58-59  (1985), reprinted  in 1986                                                                      

U.S.C.C.A.N. 3124, 3181-82; see also United Technologies Corp. v.                                                                        

Browning-Ferris Indus., Inc., 33 F.3d 96, 102-03  (1st Cir. 1994)                                      

(explaining  the  interface  between settlement  and  liability).

Such  settlements  reduce   excessive  litigation  expenses   and

transaction  costs,  thereby  preserving  scarce   resources  for

CERCLA's real goal:   the expeditious cleanup  of hazardous waste

sites.

          In  most  instances,  settlement  requires  compromise.

Thus, it  makes sense for  the government,  when negotiating,  to

give a PRP a  discount on its maximum  potential liability as  an

incentive to  settle.  Indeed, the  statutory scheme contemplates

that  those who  are slow  to settle  ought to  bear the  risk of

paying more if they are eventually found liable.  See 42 U.S.C.                                                                 

9613(f)(2) - (3); see also Cannons, 899 F.2d at  91-92.  Congress                                            

apparently thought that paradigm fair, and so do we.

          This case  illustrates the point.   The government gave

SESD  a 15%  discount on  its maximum  potential exposure.   This

proved  to be  a  sufficient incentive  to achieve  a settlement,

despite  the  fact   that  SESD's  liability  had  not  yet  been

adjudicated.   Appellant    who,  unlike SESD,  already had  been

found  liable    received ample  opportunities to buy  peace, but

took no advantage of them.   Against this unsympathetic backdrop,

appellant cannot rewardingly complain that he must now shoulder a

                                12

larger share of the overall expense than might have been the case

if he had moved faster or if SESD had proven intransigent.

          Fifth, and  last, fairness  rarely can be  described in

absolute terms.   There  is  no litmus  test for  it  and no  one

allocation  that will, in a  CERCLA case, comprise  the only fair

allocation.    Rather,  fairness  is  a  mutable  construct  that

"tak[es]  on  different forms  and  shapes  in different  factual

settings."  Cannons, 899 F.2d at  85.  Absent a mistake of  law                               

and  we see  none here    this reality,  coupled with  the twice-

insulated deference afforded CERCLA consent  decrees, see Charles                                                                           

George Trucking, 34 F.3d at 1085; Cannons, 899 F.2d at 84, places                                                   

a  heavy burden  on  an  objector  who  strives  to  convince  an

appellate  court  that  error inheres  in  the  entry  of such  a

decree.5  In this case,  the burden has not been carried.   Judge

Mazzone's finding  that the  SESD decree  falls  within the  wide

universe of fair solutions is abundantly supported.

IV.  CONCLUSION          IV.  CONCLUSION

          We need go no further.6   Because appellant has neither

                                                  

     5This burden is particularly weighty when the district judge
is  called  upon to  assess  the comparative  fault  of different
classes of PRPs.  So it is here.  The court below had to contrast
the fault ascribable  to a generator and transporter  (SESD) with
the  fault  ascribable   to  a  landowner  (DiBiase).    In  such
circumstances, the  trial judge  is in  effect forced  to compare
apples with oranges.  Accordingly, his prolonged  exposure to the
litigation  and his  firsthand  knowledge of  the case's  nuances
become extremely important, heightening the need for deference. 

     6This appeal presents no issues anent cleanup costs over and
above  the emergency removal costs.   The parties  informed us at
oral argument that all  issues of that nature have  been resolved
amicably.

                                13

offered any compelling reason to brand the consent decree  unfair

nor persuaded us  that the district court  blundered in approving

it, his appeal falters.

Affirmed.          Affirmed.                  

                                14
