Boeing Company sued Cascade Corporation in a contribution action under section 9613 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)[1] to recover pollution cleanup costs. Cascade appealed, challenging the trial court's determination of causation, the allocation of costs, and the propriety of declaratory judgments in CERCLA contribution actions.[2] Although Boeing received a declaratory judgment allocating costs at the trial court level, it cross-appealed regarding the amount of its judgment.

Both Boeing and Cascade used chlorinated solvents on their adjoining Portland, Oregon properties. The companies historically disposed of the spent solvents using then-acceptable methods of spreading the chemicals on the ground, allowing them to evaporate or drain away, and storing the solvents in underground tanks or barrels. These activities resulted in significant groundwater contamination. By monitoring wells, Boeing discovered the contamination of the underlying aquifer in 1985. The Environmental Protection Agency (EPA) responded to the contamination and ordered an investigation of the contamination source, resulting in the charges that were at issue in the instant case. Similarly, in 1986, Cascade discovered chlorinated solvent pollution on its own land and initiated a cleanup action with the Oregon Department of Environmental Quality. Both companies took prompt action to remedy the pollution.

Cascade did not deny using chlorinated solvents, nor did it deny that some of its solvents were polluting the aquifer. However, Boeing had also used the chlorinated solvents found in the contaminated groundwater. Therefore, Cascade argued that it could not be held liable for EPA's initial response costs under traditional tort concepts of sine qua non--or "but for"[3]--causation. Cascade asserted that CERCLA liability hinges on such causation, and, because Boeing would have incurred response costs irrespective of whether Cascade had polluted the aquifer, no liability attached to Cascade.

CERCLA allows parties who incur the costs of cleanup actions to sue other polluters for contribution when the other party "causes the incurrence of response costs."[4] The Ninth Circuit held that the sine qua non analysis is not the correct method of interpreting CERCLA liability defined by the term "cause[]" in section 9607(a)(4).[5] "[U]nder the rubric of causal overdetermination"[6] adopted by the court in this case, both Cascade and Boeing caused the incurring of response costs as a matter of law. Therefore, because Cascade and Boeing shared the same degree of fault and either company's conduct would have resulted in the same costs, Cascade was liable for its pro rata share of the response costs.

Cascade's second major attack on the district court's judgment focused on the allocation of costs according to the ratio determined by the trial court. The trial court found that each company contributed to the groundwater pollution according to the weight of the amount of chemicals used by the respective companies. This resulted in a 70:30 cost ratio, with Cascade bearing most of the responsibility. Cascade argued that each company should only be liable for the pollution on their respective lands. However, because Cascade is located uphill from Boeing, some amount of Cascade's contamination migrated downhill from Cascade's property onto Boeing's land. After holding that Boeing's accounting of cleanup costs was sufficient under the national contingency plan,[7] the Ninth Circuit examined the 70:30 ratio established by the trial court for the cleanup itself.

CERCLA allows the trial court to determine the allocation of costs in CERCLA response actions.[8] The Ninth Circuit reviewed the selection of factors considered in the apportionment for abuse of discretion. Under this deferential standard, the Ninth Circuit held that volume was an appropriate measure of responsibility in the instant case, and that the trial court was within its discretion to use this measure. The Ninth Circuit further reviewed the allocation for clear error, according to the factors determined by the trial court. Because "[w]ater flows downhill,"[9] the evidence was sufficient to support the trial court's conclusion, and, because most other factors were inapposite to the fact pattern, the Ninth Circuit held that the apportionment was reasonable.

In a third argument, Cascade focused on the equity of the district court crediting Boeing for certain costs when Cascade did not receive credit for the same type of costs. However, Cascade failed to make a cost recovery request to the trial court and did not petition for a correction following the judgment. The issue was not preserved and, therefore, could not be adjudicated by the Ninth Circuit.

Finally, Cascade asserted that the district court lacked the statutory authority to issue declaratory judgments in CERCLA contribution actions. Although case law allows for declaratory judgments under section 9607[10] of CERCLA cost-recovery actions, the Act does not specifically authorize such judgments in the contribution context.[11] However, the Ninth Circuit held that declaratory relief is a useful tool in CERCLA actions and that it is consistent with the purposes of the statute. Furthermore, the panel held that, because CERCLA requires declaratory judgments in one context,[12] it is reasonable to allow such judgments where the statute is silent on the issue. Ultimately, providing declaratory relief is within the discretion of the trial court, and the Ninth Circuit found no abuse of that discretion in the instant case.

Boeing's cross-appeal challenged the inclusion of a settlement that Boeing received against the total costs of the clean up. The trial court deducted the amount of the settlement from the total cleanup cost and then allocated the remainder of the costs to each party. Boeing argued on appeal that the total cost should instead be apportioned between Cascade and Boeing first, and the settlement amount should then be applied to Boeing's liability alone. Essentially, because the settlement came from Boeing's predecessors in interest, and the total share of pollution from Boeing and its predecessors was 30 per cent, the settlement should not be deducted from the overall cleanup costs. Thus, Boeing's total liability would be reduced by the amount of the settlement. Using the 70:30 ratio as a guide, the Ninth Circuit agreed with Boeing that its total contribution to the cleanup should be offset by the amount of the settlement. The panel remanded the case to the district court to correct the judgment.