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June 19, 1991

LEVIN METALS CORP., et al., Plaintiff,
PARR-RICHMOND TERMINAL CO., a dissolved corporation, et al., Defendants. PARR-RICHMOND TERMINAL CO., a dissolved corporation, et al., Counter-complainants, v. RICHARD LEVIN, LEVIN METALS, et al., Counter-defendants. LEVIN METALS CORP., et al., Plaintiffs, v. PARR-RICHMOND TERMINAL CO., et al., Defendants

Samuel Conti, United States District Judge.

The opinion of the court was delivered by: CONTI

I. Introduction

 Montrose Chemical Corporation of America ("Montrose") and Stauffer Chemical Company ("Stauffer"), defendants in these consolidated actions, move this court for partial summary judgment pursuant to Fed.R.Civ.P. 56 on the issue of their liability. Claims are filed against Montrose and Stauffer under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. § 9601, et. seq. ("CERCLA") for costs associated with cleanup of real property located in Richmond, California ("the Heckathorn site").

 Levin Enterprises and Levin Richmond Terminal Corporation ("Levin"), Parr Richmond Terminal Company and John Parr Cox ("PRTC"), and Fred Parr Cox ("Cox") filed oppositions to Montrose's motion. Prentiss Drug & Chemical Company joined Levin's opposition. Cox's opposition also opposes Stauffer's motion for summary judgment. The Sherwin-Williams Company, Mobay Corporation, Olin Corporation, and John Powell & Co., Inc. filed statements of non-opposition to Montrose and Stauffer's motions. Puregro Corporation filed a statement of non-opposition to Montrose's motion.

 Montrose and Stauffer seek partial summary judgment on all CERCLA claims asserted against them, including claims by PRTC, Cox, the Sherwin-Williams Company, Stauffer, Olin Corporation, Shell Oil Company, Mobay Corporation, Heckathorn & Co., Chemwest, and Prentiss Drug & Chemical Company.

 Levin alleges that Montrose "arranged for disposal" of hazardous substances owned by Montrose at the Heckathorn site by providing technical grade DDT to Heckathorn as part of an arrangement whereby Heckathorn formulated 75% DDT wettable powder to fulfill Montrose's contracts with government health agencies. Levin alleges that Montrose is liable for the cost of remediating the Heckathorn site because waste generation and improper disposal allegedly were "inherent" in the formulation process. Levin also alleges that Montrose is liable as an owner or operator of the Heckathorn site. Montrose moves for summary judgment on the grounds that its dealings with the Heckathorn site did not constitute arranging for the disposal of hazardous substances it owned or possessed, and that it was not an owner or operator of the Heckathorn facility.

 Stauffer claims that the nature of its dealings with the Heckathorn site is similar to that of Montrose, and thus joins in Montrose's motion for summary judgment, adopting the arguments presented by Montrose. As a preliminary matter, the court finds the fact situations of Montrose and Stauffer sufficiently similar to rule on both motions together herein. In the discussion that follows, reference to "the chemical companies" will signify both Montrose and Stauffer.

 II. Background

 This action involves the cleanup of hazardous wastes on property which is known as the "Heckathorn site." Plaintiffs and counter-defendants, Levin Metals Corporation and Levin-Richmond Terminal Corporation ("Levin"), purchased the Heckathorn site from Parr-Richmond in 1981 and subsequently discovered that the property was contaminated with hazardous substances. Levin then sued Parr-Richmond for fraud in state court. In turn, Parr-Richmond removed the action to this court on the ground that it stated a claim under CERCLA, and it subsequently filed this action for indemnity and contribution against Montrose, Stauffer and other parties.

 Under virtually identical arrangements, Montrose and Stauffer paid the Heckathorn companies to grind and mix raw technical grade chemicals into pesticides according to each chemical company's specifications, and to deliver the finished pesticides to the chemical company's customers. Tests conducted in the 1980's demonstrate that the Heckathorn site is contaminated with certain of these chemicals, including DDT, in excess of levels permitted by state and federal law.

 For over twenty years, Montrose regularly used Heckathorn to prepare DDT insecticides it supplied under contract to the government. Under a similar agreement, Stauffer dealt with Heckathorn for many years. Montrose contracted with Heckathorn to grind technical grade DDT supplied by Montrose and blend it to produce 75% DDT wettable powder, containing 75% pure DDT by weight. Such contracts, common in the pesticide industry, were called "toll charge" or custom grinding agreements. As part of the toll charge arrangements, Montrose supplied excess technical grade DDT in an amount about 1% to 2% of the total.

 Montrose shipped its technical grade DDT to Heckathorn to be processed into commercial grade DDT, packaged in a Montrose-labeled container, and delivered to a location designated by Montrose. The technical grade DDT, in the form of lumps, flakes or chips, was dumped from the original Montrose bags into a blender, where it was milled for subsequent grinding. High speed air mills then broke the material down into flour-like particles. The powder was combined with inert ingredients to produce the final product. The process produced layers of dust throughout the facility. The workers wore respirators and protective clothing. During the DDT grinding process, waste materials accumulated on the equipment, creating a residue which was washed out of the building and into the environment.

 Levin now claims that it is entitled to recover its response costs of cleaning up the DDT released in the vicinity from Montrose and Stauffer as liable parties under Section 107(a) of CERCLA. Montrose and Stauffer deny any liability under this ...

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