## Facts

- NEPACCO manufactured hexachlorophene at a facility near Verona, Missouri (1969–1972), generating dioxin-contaminated stillbottom wastes (TCDD).
- NEPACCO’s vice president/technical director (Edwin Michaels) and on-site plant supervisor (John W. Lee) had authority over waste handling and disposal decisions.
- NEPACCO hired an independent hauler (Ronald Mills) to remove waste; drums were secretly buried in trenches on the Denney farm near Verona, Missouri.
- After contamination was discovered, the EPA undertook investigation and cleanup actions, incurring substantial response costs.
- The United States sued NEPACCO (a dissolved corporation), Michaels, Lee, Mills, and others seeking response costs under CERCLA §§ 104, 107 and relief under RCRA § 7003(a).
- The district court imposed CERCLA joint and several liability for post–December 11, 1980 response costs and future costs, denied recovery of pre-enactment costs, rejected RCRA § 7003(a) liability, and denied a jury trial.
- Defendants appealed multiple CERCLA rulings; the United States cross-appealed the denial of pre-enactment costs and the RCRA ruling.

## Issues

1. Whether CERCLA § 107(a) permits recovery of response costs for releases from facilities where disposal occurred before CERCLA’s enactment (retroactivity).
2. Whether corporate officers/employees with authority and actual control over disposal practices may be personally liable as CERCLA “owners or operators.”
3. Whether CERCLA authorizes joint and several liability absent a reasonable basis for apportionment, and who bears the burden to prove divisibility.
4. Whether corporate dissolution bars CERCLA liability for pre-dissolution disposal activities.
5. Whether the United States must prove consistency with the National Contingency Plan (NCP) in its prima facie case, and what standard governs review of response actions.
6. Whether prior settlements reduce the government’s recoverable response costs from remaining defendants.
7. Whether RCRA § 7003(a) permits cost-shifting or other remedial obligations beyond narrowly framed injunctive relief where an imminent and substantial endangerment exists.
8. Whether defendants are entitled to a jury trial in a CERCLA § 107 cost-recovery action.

## Decision

- Affirmed in part, reversed in part, and remanded.
- Held CERCLA § 107(a) applies to response costs incurred due to releases or threatened releases from facilities where disposal occurred before CERCLA’s enactment; reversed the denial of pre–December 11, 1980 costs.
- Affirmed personal liability of Michaels and Lee as “owners or operators” based on their authority to control and their actual control over disposal practices.
- Affirmed joint and several liability; placed the burden on defendants to prove divisibility and a reasonable basis for apportionment, which they failed to do.
- Held NEPACCO’s corporate dissolution did not eliminate CERCLA liability arising from pre-dissolution activities.
- Held the government need not prove NCP consistency in its prima facie case; defendants must show the response action was arbitrary and capricious or otherwise inconsistent with the NCP.
- Rejected an automatic reduction of the government’s recovery based on prior settlements; contribution among responsible parties is the intended adjustment mechanism.
- Reversed in part and remanded the RCRA § 7003(a) issue, concluding the statute was read too narrowly and may allow imposition of abatement-related costs/obligations in appropriate circumstances.
- Held no Seventh Amendment jury-trial right attaches because CERCLA cost recovery is equitable in nature.

## Legal Principles

- CERCLA § 107(a) liability may attach to response costs caused by current releases or threatened releases even if disposal occurred before CERCLA’s effective date.
- Corporate officers and employees can be CERCLA “owners or operators” when they have authority to control hazardous waste handling and actually exercise that control.
- Joint and several liability is appropriate for indivisible environmental harm; once liability and costs are shown, the defendant bears the burden to prove divisibility and apportionment.
- A dissolved corporation may remain liable under CERCLA for environmental obligations arising from pre-dissolution conduct.
- For governmental cost recovery under CERCLA § 107(a)(4)(A), response costs are presumed “not inconsistent” with the NCP unless defendants prove inconsistency; review is under an arbitrary-and-capricious standard.
- Prior settlements do not automatically reduce the government’s CERCLA recovery from other liable parties; allocation is addressed through contribution.
- RCRA § 7003(a) is not confined to narrowly framed injunctions and may support broader abatement obligations, potentially including cost-related relief, where an imminent and substantial endangerment is shown.
- CERCLA § 107 cost-recovery actions seek equitable reimbursement and do not carry a right to jury trial.

## Conclusion

The court upheld expansive governmental cost-recovery authority under CERCLA, including retroactive application, personal liability for controlling corporate officials, and joint and several liability absent proof of divisibility, while remanding for reconsideration of RCRA § 7003(a) relief under a broader reading of the statute.


United States v. Ne. Pharm. & Chem. Co., 810 F.2d 726 (8th Cir. 1986)