United States v. Aceto Agricultural Chemicals Corp.

872 F.2d 1373
CourtCourt of Appeals for the Eighth Circuit
DecidedApril 25, 1989
DocketNos. 88-1580 to 88-1583
StatusPublished
Cited by51 cases

This text of 872 F.2d 1373 (United States v. Aceto Agricultural Chemicals Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Aceto Agricultural Chemicals Corp., 872 F.2d 1373 (8th Cir. 1989).

Opinion

LARSON, Senior District Judge.

This case arises from efforts by the Environmental Protection Agency (EPA) and the State of Iowa to recover over $10 million dollars in response costs incurred in the clean up of a pesticide formulation facility operated by the Aidex Corporation in Mills County, Iowa. Aidex operated the facility from 1974 through 1981, when it was declared bankrupt. Investigations by the EPA in the early 1980s revealed a highly contaminated site. Hazardous substances were found in deteriorating containers, in the surface soil, in fauna sam-pies, and in the shallow zone of the groundwater, threatening the source of irrigation and drinking water for area residents. Using funds from the “Hazardous Substance Superfund,” see 26 U.S.C. § 9507, the EPA, in cooperation with the State of Iowa, undertook various remedial actions to clean up the site.

The EPA now seeks to recover its response costs from eight pesticide manufacturers who did business with Aidex, in particular, who hired Aidex to formulate their technical grade pesticides into commercial grade pesticides. The complaint1 alleges it is a common practice in the pesticide industry for manufacturers of active pesticide ingredients to contract with formulators such as Aidex to produce a commercial grade product which may then be sold to farmers and other consumers. Complaint paragraph 46. Formulators mix the manufacturer’s active ingredients with inert materials using the specifications provided by the manufacturer. The resulting commercial grade product is then packaged by the formulator and either shipped back to the manufacturer or shipped directly to customers of the manufacturer. Complaint paragraphs 5-12, 46, 48.

The complaint alleges that although Ai-dex performed the actual mixing or formulation process, the defendants owned the technical grade pesticide, the work in process, and the commercial grade pesticide while the pesticide was in Aidex’s possession. Complaint paragraphs 50, 68. The complaint also alleges the generation of pesticide-containing wastes through spills, cleaning of equipment, mixing and grinding operations, and production of batches [1376]*1376which do not meet specifications is an “inherent” part of the formulation process. Complaint paragraph 47.

The United States and the State of Iowa allege all eight defendants are liable for the response costs incurred at the Aidex site pursuant to section 7003 of the Resource Conservation and Recovery Act (RCRA) because by virtue of their relationships with Aidex they “contributed to” the handling, storage, treatment, or disposal of hazardous wastes. Complaint paragraph 70. See 42 U.S.C. § 6973(a). Plaintiffs further allege that six of the eight companies are liable under section 9607(a)(3) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), because by virtue of their relationships with Aidex they “arranged for” the disposal of hazardous substances. Complaint paragraph 52. See 42 U.S.C. § 9607(a)(3).

The defendants have moved to dismiss the action under Fed.R.Civ.P. 12(b)(6), arguing that they contracted with Aidex for the processing of a valuable product, not the disposal of a waste, and that Aidex alone controlled the processes used in formulating their technical grade pesticides into commercial grade pesticides, as well as any waste disposal that resulted therefrom. The district court granted defendants’ motion under RCRA, holding the absence of an allegation that defendants had authority to control how Aidex handled or disposed of the wastes precluded recovery under section 7003. The court denied the motion under CERCLA, however, holding that principles of common law in conjunction with the liberal construction required under CERCLA could support liability under section 9607(a)(3). 699 F.Supp. 1384.

We granted all parties leave to file interlocutory appeals, and the case is now before us for decision. For the reasons discussed below, we hold plaintiffs’ allegations are sufficient to withstand defendants’ motion to dismiss under both CERC-LA and RCRA, and, accordingly, we affirm the district court’s decision in part, reverse in part, and remand this case for further procéedings.

I. STANDARD OF REVIEW

We review the district court’s order under the well-established standards for deciding a motion to dismiss for failure to state a claim. See Fed.R.Civ.P. 12(b)(6). A complaint should not be dismissed for failure to state a claim unless it appears beyond a doubt that plaintiffs can prove no set of facts in support of their claim which would entitle them to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957); May v. Commissioner of Internal Revenue, 752 F.2d 1301, 1303 (8th Cir.1985); Fusco v. Xerox Corp., 676 F.2d 332, 334 (8th Cir.1982).

The allegations of plaintiffs’ complaint must be assumed to be true, and further, must be construed in their favor. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974); May, 752 F.2d at 1303; Wright v. Anthony, 733 F.2d 575, 577 (8th Cir.1984). The issue is not whether plaintiffs will ultimately prevail, but rather whether they are entitled to offer evidence in support of their claims. Scheuer, 416 U.S. at 236, 94 S.Ct. at 1686. Thus, it is only in the “unusual case” where the complaint on its face reveals some insuperable bar to relief that a dismissal under Rule 12(b)(6) is warranted. Fusco, 676 F.2d at 334 (and authorities cited therein).

II. THE STATUTES

The Resource Conservation and Recovery Act was initially enacted in 1976. Pub. L. No. 94-580, 1976 U.S.Code Cong. & Admin.News (90 Stat.) 2795. The Act represented an attempt by Congress to deal with problems posed by the general disposal of wastes in this country, as well as the particular problems associated with the disposal of hazardous substances. See generally H.R.Rep. No. 1491, Part I, 94th Cong., 2d Sess. 9-11, reprinted in 1976 U.S.Code Cong. & Admin.News 6238, 6246-49. The statute has been amended three times since enactment,2 and provides what Congress [1377]*1377has called a “prospective cradle-to-grave regulatory regime governing the movement of hazardous waste in our society.” H.R.Rep. No. 1016, Part I, 96th Cong., 2d Sess. 17, reprinted in 1980 U.S.Code Cong. & Admin.News 6119, 6120.

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Bluebook (online)
872 F.2d 1373, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-aceto-agricultural-chemicals-corp-ca8-1989.