
USCA1 Opinion

	




                            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  &  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 &  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                                        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 & 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                                      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 & 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.                                          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  & 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 &  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 & 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.                                         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.                                         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.                    ________                                         -19-
