
USCA1 Opinion

	




          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 & 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 &          _________________          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, &  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
