author: HENRY, Circuit Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Corley AYERS, Defendant-Appellee.
    No. 95-2032.
    United States Court of Appeals, Tenth Circuit.
    May 22, 1996.

      John J. Kelly, U.S. Attorney and David N. Williams, Assistant U.S. Attorney, Office of United States Attorney, Albuquerque, NM, for Plaintiff-Appellee.
    Michael Gordon Katz, Federal Public Defender and James P. Moran, Assistant Federal Public Defender, Office of the Federal Public Defender, District of Colorado and Wyoming, Denver, CO, for Defendant-Appellant.
    Before SEYMOUR, McKAY, and HENRY, Circuit Judges.
   HENRY, Circuit Judge.

For the reasons set forth below, we affirm the district court’s decision that the defendant-appellant Corley Ayers is not entitled to a reduction in his offense level under 3B1.2 of the United States Sentencing Guidelines (USSG).

Mr. Ayers pleaded guilty to violating 21 U.S.C. 841(a)(1) and 841(b)(1)(B) by possessing with the intent to distribute more than five grams of cocaine. Prior to sentencing, Mr. Ayers objected to certain sections of the presentence report, arguing that his limited involvement in the crime warranted a reduction of the offense level. Additionally, the government requested a downward departure under USSG 5K1.1 because Mr. Ayers had agreed to cooperate in the prosecution of another defendant.

The district court granted the government’s motion for downward departure but denied Mr. Ayers’s request for a reduction of the offense level. The court sentenced Mr. Ayers to seventy months imprisonment followed by four years supervised release.

On appeal, Mr. Ayers argues that district court erred in declining to decrease his offense level based on his role in the offense under USSG 3B1.2. We review the district court’s findings for clear error. United States v. Santistevan, 39 F.3d 250, 253 (10th Cir.1994); United States v. Chavez-Palacios, 30 F.3d 1290, 1295 (10th Cir.1994). Under USSG 3B1.2, it is the defendant’s burden to establish by a preponderance of the evidence that he or she is entitled to an offense reduction. Santistevan, 39 F.3d at 254.

Section 3B1.2 “vests the district court with discretion to grant a base offense level reduction if it finds a defendant is less culpable relative to other participants in a given offense.” Santistevan, 39 F.3d at 254. Subsection 3B1.2(a) authorizes a four-level reduction if the defendant was a “minimal participant” in the crime. Subsection 3B1.2(b) authorizes a two-level reduction for a “minor participant” in the crime. The commentary to 3B1.2 explains that minimal participants are “defendants who are plainly among the least culpable of those involved in the conduct of a group.” USSG 3B1.2 comment. n.l. “[T]he defendant’s lack of knowledge or understanding of the scope and structure of the enterprise and of the activities of others is indicative of a role as minimal participant.” Id.

The commentary also lists several examples of minimal participants: “someone who played no other role in a very large drug smuggling operation than to offload part of a single marihuana shipment, or in a case where an individual was recruited as a courier for a single smuggling transaction involving a small amount of drugs.” USSG 3B1.2 comment, n.2. A downward adjustment for minimal participants should be made infrequently. Id.

In this case, the presentence report concluded that several weeks before his arrest in September 1992, Mr. Ayers rented an apartment in Albuquerque, New Mexico and that a Mr. Paul Markland helped him pay for it. According to the report, Mr. Ayers knew that Mr. Markland was selling cocaine and using the apartment to prepare and store crack cocaine, contact potential buyers, and store money. Rec. vol. V, ¶¶23, 30. The report stated that Mr. Ayers acknowledged “that he had sometimes traveled with Mark-land to pick up money, and had sold cocaine for Markland on occasion over a period of several months.” Id. ¶ 23. At the time of his arrest, police discovered 90.8 grams of crack cocaine, .4 grams of powdered cocaine, and 3 grams of marijuana in Mr. Ayers’s apartment. Id. ¶20.

In his objections to the presentence report, Mr. Ayers stated that during the period in which he leased the apartment, he did not sell or transport drugs for Mr. Markland. He added that the first time he noticed any drugs in the apartment was on the day of his arrest, when Mr. Markland appeared to have crack cocaine in his possession. However, Mr. Ayers admitted that when he rented the apartment, “[he] did realize that Mr. Mark-land was involved in narcotic trafficking and had accompanied him on several occasions when Mr. Markland received payments which Mr. Ayers constructively believed were for drug debts.” Rec. doc. 107, at 2.

This circuit has not yet addressed the application of 3B1.2 to individuals such as Mr. Ayers who allow their residences to be used by others for drug trafficking. However, with regard to drug couriers, we have refused to adopt a per se rule allowing downward adjustments. See United States v. Rangel-Arreola, 991 F.2d 1519, 1524 (10th Cir.1993); United States v. Calderon-Porras, 911 F.2d 421, 422 (10th Cir.1990). We have recognized that “[g]iven the important function of couriers in drug distribution networks, ... [they] often are not minor participants.” United States v. Montoya, 24 F.3d 1248, 1249 (10th Cir.1994).

The reasoning of these cases is applicable here. Although there is no indication in the presentence report that Mr. Ayers arranged drug sales or made deliveries during the time he leased the apartment, the district court could properly conclude that Mr. Ayers played a significant role in facilitating Mr. Markland’s drug trafficking scheme. In particular, Mr. Ayers’s admitted knowledge of Mr. Markland’s drug dealing, his accompanying Mr. Markland in the collection of debts, and his allowing Mr. Markland to use the apartment are all factors supporting the inference that Mr. Ayers knowingly permitted Mr. Markland to use the apartment to sell drugs. It was therefore not clearly erroneous for the district court to find that, like the couriers we described in Montoya, Mr. Ayers served an “important function ... in [a] drug distribution network[ ],” id., such that he was not entitled to an offense level reduction under USSG 3B1.2.

Accordingly, the decision of the district court is AFFIRMED.

      . In his appellate brief, Mr. Ayers cites several decisions granting reductions in offense levels under 3B1.2 to defendants sharing a residence with drug traffickers: United States v. Tabares, 951 F.2d 405, 410 (1st Cir.1991); United States v. Hall, 949 F.2d 247, 248-49 (8th Cir.1991); United States v. Hagan, 913 F.2d 1278, 1283 (7th Cir.1990). For several reasons, these decisions do not support Mr. Ayers’s argument that he is entitled to an offense level reduction. First, like our courier cases, these decisions acknowledge that the application of 3B1.2 is " 'heavily dependent upon the facts of the particular case.’ ” Hagan, 913 F.2d at 1283 (quoting USSG 3B1.2, comment., (backg'd)). In addition, in each of these decisions, the courts of appeals affirmed the district court's finding regarding 3B1.2. The same deference to the district court’s findings is warranted here.


source: Caselaw Access Project

author: PER CURIAM:

license: Public Domain

text:
    Robert Dewey GLOCK, Petitioner-Appellant, v. Harry K. SINGLETARY, Respondent-Appellee.
    No. 91-3528.
    United States Court of Appeals, Eleventh Circuit.
    May 15, 1996.
    Rehearing and Suggestion for Rehearing En Banc Denied July 18, 1996.
    Martin J. McClain, Chief Assistant Capital Collateral Representative, Gail E. Anderson, Office of the Capital Collateral Representative, Tallahassee, Florida, for Appellant.
    Robert J. Landry, Assistant Attorney General, Department of Legal Affairs, Tampa, Florida, for Appellee.
    Before TJOFLAT, Chief Judge, and KRAVITCH and HATCHETT, Circuit Judges.
   PER CURIAM:

In Glock v. Singletary, 36 F.3d 1014 (11th Cir.1994), we rejected petitioner’s constitutional attacks on his first degree murder conviction but directed that the writ issue with respect to his sentence, concluding that under Espinosa v. Florida, 505 U.S. 1079, 112 S.Ct. 2926, 120 L.Ed.2d 854 (1992), petitioner was entitled to a new sentencing proceeding. The en banc court disagreed with our conclusion, finding that petitioner’s Espi-nosa claim was barred by the nonretroactivity principle of Teague v. Lane, 489 U.S. 288, 109 S.Ct. 1060, 103 L.Ed.2d 334 (1989). We now address petitioner’s remaining attacks on his capital sentence.

Petitioner claims that his sentence should be set aside because (1) the trial court refused to sever his sentencing proceeding from his co-defendant’s, thereby depriving him of individualized sentencing; (2) the trial court failed to find three non-statutory mitigating circumstances; (3) the trial court’s charge to the jury shifted to petitioner the burden of proof on the appropriateness of the death sentence; (4) the trial court’s charge to the jury “diluted” the jury’s sense of responsibility for the sentence petitioner would receive; and (5) petitioner’s attorney rendered ineffective assistance of counsel in failing to discover through routine investigation mitigating evidence and to present that evidence at the separate sentencing proceedings before the jury and the court.

We find no merit in the first four claims and therefore affirm the district court’s denial of relief thereon. Petitioner’s fifth claim has heretofore been resolved on the record, without an evidentiary hearing. The district court, echoing the Florida courts, Glock v. Dugger, 537 So.2d 99 (Fla.1989), rejected this claim as meritless on its face. See Glock, 36 F.3d at 1020. We conclude that the claim is not meritless on its face; hence, an evidentia-ry hearing must be held to resolve the historical facts concerning counsel’s performance and the mitigating evidence that petitioner contends should have been presented.

We therefore remand the case for an evi-dentiary hearing, and findings of fact and conclusions of law, on petitioner’s ineffective assistance of counsel claim.

SO ORDERED.

      . All of petitioner's claims are brought under the Eighth and Fourteenth Amendments.


author: BY THE COURT:

text:
    Larry Grant LONCHAR, Petitioner-Appellee, v. Tony TURPIN, Warden, Georgia Diagnostic and Classification Center, Respondent-Appellant.
    No. 95-8821.
    United States Court of Appeals, Eleventh Circuit.
    May 16, 1996.
    Michael J. Bowers, Attorney General, State of Georgia, Mary Beth Westmoreland, Asst. Atty. General, Atlanta, GA, for Appellant.
    John Matteson, Office of John Matteson, Atlanta, Georgia, Clive Stafford Smith, Office of Clive Stafford Smith, New Orleans, Louisiana, for Appellee.
    May 16, 1996.
    Before TJOFLAT, Chief Judge, and COX and DUBINA, Circuit Judges.
   BY THE COURT:

This case is before us on remand from the Supreme Court following a ruling and judgment vacating the judgment of this court. It is ordered that the case is remanded to the district court for further proceedings consistent with the Supreme Court’s opinion.


author: TJOFLAT, Chief Judge:

text:
    Steven W. FLOHR; Susan Flohr, Plaintiffs-Appellees, v. Joseph MACKOVJAK, Defendant-Appellant.
    No. 93-6956.
    United States Court of Appeals, Eleventh Circuit.
    May 31, 1996.

      Claude Harris, D. Wayne Rogers, Jr., Asst. U.S. Attys., Birmingham, AL, Barbara L. Herwig, Marc Richman, Dept, of Justice, Civil Div., Washington, DC, for appellant.
    Steven J. Shaw, Huntsville, AL, for appel-lees.
    Before TJOFLAT, Chief Judge, BARKETT, Circuit Judge, and CLARK, Senior Circuit Judge.
   TJOFLAT, Chief Judge:

This case involves a federal employee who was sued in state court for a negligent act committed while he was acting within the scope of his employment. The employee removed the case to district court and, represented by the United States Attorney, moved the court to substitute the United States as the party defendant. See 28 U.S.C. § 2679(d) (1994). The district court denied the motion to substitute and remanded the case to the state court. Because we conclude that the court erred in denying substitution, we reverse the denial of the motion to substitute.

I.

The facts are not in dispute. Lt. Colonel Steven W. Flohr was an officer of the United States Army stationed at the Redstone Arsenal in Huntsville, Alabama. Joseph Mackov-jak was a civilian engineer working for the Department of the Army at the Redstone Arsenal. In May, 1992, Flohr, Mackovjak, and a third man were given a week-long temporary duty assignment to attend a conference in Hawthorne, California. The Army gave the men a per diem allowance for their expenses, including the cost of meals. Flohr obtained a rental car for their use at government expense; Mackovjak was also authorized to drive the car. There were no restrictions on their after-hours use of the rental car.

At around 4:00 p.m. on May 19, after a day at the conference, the three men returned to their hotel, changed clothes, and then drove to a restaurant in Redondo Beach for dinner. After dinner, at 8:22 p.m., as he was driving the rental car back to the hotel, Mackovjak made a left turn in front of oncoming traffic. The car was struck broadside and Flohr sustained injuries.

On May 17, 1993, Flohr and Ms wife brought a negligence action against Mackov-jak in the Circuit Court of Madison County, Alabama. On June 21, Mackovjak, acting through a private attorney, removed the case to the United States District Court for the Northern District of Alabama. The case was removed pursuant to 28 U.S.C. § 1442(a)(1) on the ground that Mackovjak was an officer of the Urnted States Air Force. The appel-lees, correctly arguing that Mackovjak was not an Air Force officer, moved the district court to remand the case back to state court. Mackovjak opposed the motion to remand on the ground that the removal was proper under section 1442(a)(1) because Mackovjak was an “employee of the Department of the Army ... acting ‘under color of office’ at the time of the incident.”

Because Mackovjak realized that the ap-pellees’ claims might be covered by the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b), 2671-2680, he eventually performed the acts necessary to be represented by the United States Attorney for the Northern District of Alabama, as required by 28 U.S.C. § 2679(c). On July 30, the United States Attorney moved the district court to substitute the Urnted States as the party defendant, pursuant to 28 U.S.C. § 2679(d). To that end, the United States Attorney certified that Mackovjak was acting “within the scope of his office or employment at the time of the incident out of which the claim arose.” 28 U.S.C. § 2679(d)(1). Section 2679(d)(1) provides that upon such certification the tort claim “shall be deemed an action against the United States under the provisions of [title 28 of the United States Code] and all references thereto, and the United States shall be substituted as the party defendant.” However, on August 10, the appellees moved to strike the United States Attorney’s certificate on the ground that Mackovjak was not acting within the scope of his employment at the time of the accident, and asked the court to deny the motion to substitute the United States and to remand the case to state court.

On October 7, after a pretrial conference, the district court granted the appellees’ motion to strike the certificate, denied the appellant’s motion to substitute, and ordered the case remanded to state court on the ground that the district court was “without subject matter jurisdiction of this matter.” Mackovjak now appeals the denial of his motion to substitute and the order of remand.

II.

A.

We consider first whether we have jurisdiction over this appeal. With one exception not relevant here, “[a]n order remanding a ease to the State court from which it was removed is not reviewable on appeal or otherwise.” 28 U.S.C. § 1447(d). It has long been the case, however, that an order precedent to and separate from an order of remand is itself appealable. See City of Waco v. United States Fidelity & Guaranty Co., 293 U.S. 140, 143, 65 S.Ct. 6, 7, 79 L.Ed. 244 (1934). In Loftin v. Rush, we reviewed a district court’s order dismissing a claim against the United States and remanding the pendent claims against the remaining defendants to state court on the ground that “[i]n logic and in fact the decree of dismissal preceded that of remand and was made by the District Court while it had control of the cause.” 767 F.2d 800, 803 (11th Cir.1985) (quoting City of Waco, 293 U.S. at 143, 55 S.Ct. at 7). For the same reason, the district court’s denial of substitution in this case is appealable despite the fact that the case has been remanded to state court. Our resolution of this issue in the context of a substitution order is in accord with the decisions of several other courts of appeals. See Kimbro v. Velten, 30 F.3d 1501, 1503 (D.C.Cir.1994); Jamison v. Wiley, 14 F.3d 222, 238 (4th Cir.1994); Aliota v. Graham, 984 F.2d 1350, 1353 (3d Cir.1993); Mitchell v. Carlson, 896 F.2d 128, 132-33 (5th Cir.1990).

We may thus take jurisdiction over Maekovjak’s appeal, provided that the denial of his motion to substitute is a “final order” within the terms of 28 U.S.C. § 1291. Under the collateral order doctrine of Cohen v. Beneficial Indus. Loan Corp., a court of appeals may, under section 1291, review decisions

which finally determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.

337 U.S. 541, 546, 69 S.Ct. 1221, 1225-26, 93 L.Ed. 1528 (1949). The remedy provided by the Federal Tort Claims Act to a plaintiff for injury arising from the negligence of a federal employee acting within the scope of his employment is “exclusive, of any other civil action or proceeding for money damages by reason of the same subject matter against the employee whose act or omission gave rise to the claim.” 28 U.S.C. § 2679(b)(1). This means that if the United States is substituted in this action, Mackovjak will be immune from any other civil action by the plaintiffs arising from the accident. Refusing to substitute the United States as a defendant is thus equivalent to denying immunity to the federal employee. See Aliota, 984 F.2d at 1354. Orders denying absolute or qualified immunity are embraced within the collateral order doctrine of Cohen. See Mitchell v. Forsyth, 472 U.S. 511, 528-29, 105 S.Ct. 2806, 2816-17, 86 L.Ed.2d 411 (1985). Likewise, Mackovjak must be able to have this court review an order that effectively forces him to defend this claim in state court when it is possible that the claim is precluded by the Federal Tort Claims Act. See Mitchell v. Carlson, 896 F.2d at 133. We therefore take jurisdiction of the appeal of the denial of substitution and proceed to review the district court’s decision.

B.

Under 28 U.S.C. § 2679(d)(1), upon the Attorney General’s certification of scope of employment, the pending action “shall be deemed an action against the United States ..., and the United States shall be substituted as the party defendant.” Despite this seemingly commanding language, the Supreme Court has held, in Gutierrez de Martinez v. Lamagno, — U.S.-,-, 115 S.Ct. 2227, 2236, 132 L.Ed.2d 375 (1995), that the Attorney General’s certification is reviewable by the district court. We had previously held this to be the case in S.J. & W. Ranch, Inc. v. Lehtinen, 913 F.2d 1538, 1541 (11th Cir.1990), amended, 924 F.2d 1555 (11th Cir.), cert. denied 502 U.S. 813, 112 S.Ct. 62, 116 L.Ed.2d 37 (1991). In that case, we also held that although the Attorney General’s certification is prima facie evidence that the employee acted within the scope of his employment, the district court was to decide the issue de novo. Id. at 1543. However, “[t]he burden of altering the status quo by proving that the employee acted outside the scope of employment is ... on the plaintiff.” Id.

The question of whether an employee’s conduct was within the scope of his employment “is governed by the law of the state where the incident occurred.” See S.J. & W. Ranch, 913 F.2d at 1542; Williams v. United States, 350 U.S. 857, 76 S.Ct. 100, 100 L.Ed. 761 (1955) (per curiam), vacating 215 F.2d 800 (9th Cir.1954); 28 U.S.C. § 1346(b). California’s law of respondeat superior thus controls in this ease. The California Supreme Court recently summarized the state’s law of respondeat superior in Mary M. v. City of Los Angeles, 54 Cal.3d 202, 285 Cal. Rptr. 99, 814 P.2d 1341 (1991) (in bank), as follows:

Under the doctrine of respondeat superi- or, an employer may be held vicariously liable for torts committed by an employee within the scope of employment. [See Cal. Civ.Code § 2338.] ... Respondeat superi- or is based on a deeply rooted sentiment that it would be unjust for an enterprise to disclaim responsibility for injuries occurring in the course of its characteristic activities.
For the doctrine of respondeat superior to apply, the plaintiff must prove that the employee’s tortious conduct was committed within the scope of employment. A risk arises out of the employment when in the context of the particular enterprise an employee’s conduct is not so unusual or startling that it would seem unfair to include the loss resulting from it among other costs of the employer’s business. In other words, where the question is one of vicarious liability, the inquiry should be whether the risk was one that may fairly be regarded as typical of or broadly incidental to the enterprise undertaken by the employer.
Tortious conduct that violates an employee’s official duties or disregards the employer’s express orders may nonetheless be within the scope of employment. So may acts that do not benefit the employer, or are willful or malicious in nature.

285 Cal.Rptr. at 101-02, 814 P.2d at 1343-44 (citations and internal quotation marks omitted). This outline of the doctrine is familiar, but we are unable to find a case decided by a California court that is directly on point. Yet, as the Ninth Circuit has noted in this context:

Even a brief review of the myriad of California cases in this area demonstrates that the possible permutations of relevant circumstances are so infinite that decision by classification or rule of thumb would invariably lead to arbitrary and unjust results.

United States v. Romitti, 363 F.2d 662, 665 (9th Cir.1966). According to that court, “no single relevant factor is necessarily controlling,” but rather “ ‘[i]n the last analysis, each case must be determined on its own peculiar facts and circumstances.’ ” Chapin v. United States, 258 F.2d 465, 467 (9th Cir.1958) (quoting 32 Cal.Jur.2d Master & Servant § 117), cert. denied, 359 U.S. 924, 79 S.Ct. 607, 3 L.Ed.2d 627 (1959). “[T]he results reached in other decisions are helpful, but not necessarily controlling.... In each case involving scope of employment all of the relevant circumstances must be considered and weighed in relation to one another.” Loper v. Morrison, 23 Cal.2d 600, 145 P.2d 1, 3 (1944). Given that “California’s rule as to course and scope of employment is broad,” see Proietti v. Civiletti, 603 F.2d 88, 90 (9th Cir.1979), we believe that a California court with this case before it would hold that Mackovjak’s conduct was within the scope of his employment.

The facts support our decision. The men were in California at the instruction of the United States Army to attend a conference related to their work. The Army paid for all of their expenses while they were away, including their meals and the cost of renting an automobile. The men appear to have received no instructions to drive or not to drive to any particular location for their meals. It is reasonable to assume that the Army expected the men to use the automobile it provided to drive not only to and from the conference but also to a place where they could purchase meals, which were also paid for by the Army. The men’s conduct was not “so unusual or startling that it would seem unfair to include the loss resulting from it among other costs of the employer’s business.” Mary M., 285 Cal.Rptr. at 102, 814 P.2d at 1344. Rather, the activity “may fairly be regarded as typical of or broadly incidental” to the enterprise undertaken by the Army. Id. The enterprise in this case was the sending of Army personnel to California for several days to attend meetings related to the Army’s business.

The policies behind California’s doctrine of respondeat superior also support our decision to make the United States defend this action. The California Supreme Court has outlined three reasons for applying the doctrine of respondeat superior:

(1) to prevent recurrence of the tortious conduct; (2) to give greater assurance of compensation for the victim; and (3) to ensure that the victim’s losses will be equitably borne by those who benefit from the enterprise that gave rise to the injury.

Mary M., 285 Cal.Rptr. at 101, 814 P.2d at 1343. First, the Army is clearly in a position to control the use of vehicles by personnel sent on business trips so as to limit the risk of accidents. Second, holding the United States hable in this sort of case does greatly increase the chance of recovery by a plaintiff. Finally, because the United States presumably benefits from the participation by Army personnel in conferences relating to its work, the United States ought equitably to bear the losses arising out of such participation.

We thus find that the United States Attorney properly certified Maekovjak as acting within the scope of his employment. Upon that certification, the district court should have granted the motion to substitute the United States as party defendant in accordance with 28 U.S.C. § 2679(d)(1). See S.J. & W. Ranch, 913 F.2d at 1544.

III.

After it denied the motion to substitute, the district court remanded this case to state court, where it now remains. The question arises as to whether our decision to reverse the denial of the motion to substitute will be given any effect. Unless the United States is substituted as the party defendant and the case is returned to federal district court, our decision will amount to nothing more than an unconstitutional advisory opinion.

This case can be returned to the district court in one of two ways. The United States Attorney, acting pursuant to 28 U.S.C. § 2679(d)(2), can certify that Maekovjak was acting within the scope of his employment, whereupon the case “shall be removed ... by the Attorney General to the district court ... and the United States shall be substituted as the party defendant.” Alternatively, in the exercise of our inherent power to issue such orders as may be necessary to effectuate relief in cases properly brought before this court, we can direct the district court to vacate its order of remand. If the United States Attorney does not proceed pursuant to section 2679(d)(2), we shall entertain a petition for a writ of mandamus to require the district court to vacate its order and substitute the United States as party defendant.

REVERSED.

      . Section 1442(a) provides as follows:
      A civil action or criminal prosecution commenced in a State court against any of the following persons may be removed by them to the district court of the United States for the district and division embracing the place wherein it is pending:
      (1) Any officer of the United States or any agency thereof, or person acting under him, for any act under color of such office....

      . In effect, Mackovjak sought to amend his removal papers to assert a new ground for removal of the case to federal court.

      . Throughout these proceedings the United States Attorney has acted for the Attorney General. Under 28 C.F.R. § 15.3(a) (1995), the Attorney General has delegated to the United States Attorneys her authority under 28 U.S.C. § 2679.

      . Section 2679, as amended by the Act of Sept. 21, 1961 (Federal Drivers Act), Pub.L. No. 87-258, § 1, 75 Stat. 539, and the Federal Employees Liability Reform and Tort Compensation Act of 1988 (Westfall Act), Pub.L. No. 100-694, §§ 5-6, 102 Stat. 4563, 4564-65, provides that the remedy against the United States provided by the Federal Tort Claims Act, 28 U.S.C. § 1346(b), for “injury or loss of property, or personal injury or death arising or resulting from the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment" shall be “exclusive of any other civil action or proceeding for money damages by reason of the same subject matter against the employee whose act or omission gave rise to the claim or against the estate of such employee.” 28 U.S.C. § 2679(b)(1). To this end, subsections (c) and (d) set out the procedures that are to be followed in cases in which claims covered by the Federal Tort Claims Act are brought against a federal employee:
      (c) The Attorney General shall defend any civil action or proceeding brought in any court against any employee of the Government or his estate for any such damage or injury. The employee against whom such civil action or proceeding is brought shall deliver ... all process served upon him ... to his immediate supervisor ... and such person shall promptly furnish copies of the pleadings and process therein to the ... United States attorney for the district embracing the place wherein the proceeding is brought....

        (d)(1) Upon certification by the Attorney General that the defendant employee was acting within the scope of his office or employment at the time of the incident out of which the claim arose, any civil action or proceeding commenced upon such claim in a United States district court shall be deemed an action against the United States under the provisions of [title 28 of the United States Code] and all references thereto, and the United States shall be substituted as the party defendant.
      (2) Upon certification by the Attorney General that the defendant employee was acting within the scope of his office or employment at the time of the incident out of which the claim arose, any civil action or proceeding commenced upon such claim in a State court shall be removed without bond at any time before trial by the Attorney General to the district court of the United States for the district and division embracing the place in which the action or proceeding is pending. Such action or proceeding shall be deemed to be an action or proceeding brought against the United States under the provisions of [title 28 of the United States Code] and all references thereto, and the United States shall be substituted as the party defendant. This certification of the Attorney General shall conclusively establish scope of office or employment for purposes of removal.
      28 U.S.C. § 2679(c), (d)(lM2).
      In his motion to substitute the United States as defendant, the United States Attorney cited subsection (d)(2), which gives the Attorney General the authority to remove personal injury cases brought against federal employees in state court. This case, however, as noted above, had already been removed to federal district court (on an unrelated ground); hence, subsection (d)(2) was inapplicable. We believe that the United States Attorney's motion for substitution should have been made under subsection (d)(1), which applies to "any civil action or proceeding commenced ... in a United States district court." It seems clear that this section governs not only actions that are "commenced” in district court (under any statute giving the court subject matter jurisdiction to hear the case) but also any case properly removed to district court (under a removal statute other than 28 U.S.C. § 2679(d)).

      . The district court disposed of the appellant’s motion to substitute the United States and the appellees’ motion to strike the certificate by stamping "overruled” and "granted,” respectively, directly on the moving papers.

      . On October 14, 1993, Mackovjak moved the district court to stay its order of remand pending an appeal of the denial of the motion to substitute. The district court denied this motion. In addition to taking this appeal, Mackovjak petitioned this court for a writ of mandamus ordering the district court to vacate its order of remand on the ground that it was beyond the power of the district court to remand the case. A panel of this court denied the petition “without prejudice to renewal after [this appeal] is resolved.” In re Mackovjak, No. 94-6676 (11th Cir. Oct. 24, 1994). We resolve the issue of the district court’s remand order in this appeal.

      . The defendant's conduct would appear to fall within the scope of his employment for purposes of California’s worker’s compensation law. See IBM Corp. v. Workers' Compensation Appeals Bd., 77 Cal.App.3d 279, 142 Cal.Rptr. 543 (1978) (adopting the "commercial traveler rule”). The rationales behind the doctrine of respondeat superior and worker’s compensation law are similar, in that both doctrines seek to make an employer liable under certain circumstances for the negligent conduct of an employee. But the California Supreme Court has stated that the tests for scope of employment under each are not identical. See Hinman v. Westinghouse Elec. Co., 2 Cal.3d 956, 88 Cal.Rptr. 188, 471 P.2d 988, 991 n. 3 (1970) (in bank). Thus, "although worker’s compensation cases can be helpful in determining the employer’s vicarious liability for its employee's torts, they are not controlling precedent ‘when liability is predicated upon respondeat superior principles.’" Perez v. Van Groningen & Sons, Inc., 41 Cal.3d 962, 227 Cal.Rptr. 106, 719 P.2d 676, 678 n. 2 (1986) (citations omitted).

      . This is, perhaps, not true for the appellees in this case. The parties anticipate that the Feres doctrine, under which the United States is not liable for injuries to servicemen arising out of activity incident to military service, will bar any recovery by the plaintiffs if the United States becomes the defendant in this action. See Feres v. United States, 340 U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152 (1950). The appellees insist that we take this into account when deciding the question of scope of employment under California's law of respondeat superior. The Feres doctrine, however, concerns only an exception to the waiver of sovereign immunity contained in the Federal Tort Claims Act, and thus cannot affect our analysis of California's law of torts.

      . Such a directive would not constitute a review of the order of remand in violation-of 28 U.S.C. § 1447(d), but rather a valid exercise of our power, if not our duty, to effectuate the relief granted to the appellant by today's decision and avoid rendering an advisory opinion. See 28 U.S.C. § 2106 ("The Supreme Court or any other court of appellate jurisdiction may affirm, modify, vacate, set aside or reverse any judgment, decree, or order of a court lawfully brought before it for review, and may remand the cause and direct the entry of such appropriate judgment, decree, or order, or require such further proceedings to be had as may be just under the circumstances.”); 28 U.S.C. § 1651(a) ("The Supreme Court and all courts established by an Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.”); Texaco, Inc. v. Chandler, 354 F.2d 655, 657 (10th Cir.1965) (court has the “power and inescapable duty, whether under the all-writs statute, 28 U.S.C. § 1651, or under its inherent powers of appellate jurisdiction, to effectuate what seems to [the court] to be the manifest ends of justice") (internal quotation marks omitted), cert. denied, 383 U.S. 936, 86 S.Ct. 1066, 15 L.Ed.2d 853 (1966).

      . In the absence of a directive from this court, it is unlikely that the district court, whether acting sua sponte or on the motion of the United States Attorney, has the jurisdiction to vacate its remand order and to return the case to federal court. See Seedman v. United States Dist. Court, 837 F.2d 413, 414 (9th Cir.1988); Three J Farms, Inc. v. Alton Box Board Co., 609 F.2d 112, 115 (4th Cir.1979), cert. denied, 445 U.S. 911, 100 S.Ct. 1090, 63 L.Ed.2d 327 (1980).


text:
    Robert L. BROWN, and all those similarly situated, Plaintiff-Appellant, v. The ENSTAR GROUP, INC., Richard J. Grassgreen, Perry Mendel, Defendants-Appellees.
    No. 94-6908.
    United States Court of Appeals, Eleventh Circuit.
    May 31, 1996.

      James L. North, James L. North & Associates, Birmingham, AL, John W. Haley, Bruce J. McKee, Alex W. Newton, Hare, Wynn, Newell & Newton, J. Timothy Francis, North & Associates, Birmingham, AL, for Appellant.
    Richard J. Movillo, Pamela J. Hicks, Cro-well & Moring, Washington, D.C., John M. Bolton, III, David B. Byrne, Jr., Robinson & Belser, P.A., Montgomery, AL, for Appellees.
    Before TJOFLAT, Chief Judge, and CARNES, Circuit Judge.

       Senior Circuit Judge Frank M. Johnson heard argument in this case but did not participate in this decision. This decision is rendered by quorum. 28 U.S.C. § 46(d).

   TJOFLAT, Chief Judge:

This appeal presents the issue of what must be proven to establish “controlling person” liability under section 20(a) of the Securities Exchange Act of 1934 (the “Act”), ch. 404, 48 Stat. 881, 899, 15 U.S.C. § 78t(a) (1994). We adopt the district court’s test, and affirm its grant of summary judgment in favor of appellee.

I.

In the late 1960s, appellee Perry Mendel founded what became Kinder-Care, Inc. (“KCI”), a publicly held corporation. He served as president of the child-care company until 1985, when he became chairman of the board of directors. In 1987, KCI established Kinder-Care Learning Centers, Inc. (“KCLC”) as a wholly owned subsidiary and Mendel undertook the responsibilities of chairman of KCLC’s board of directors in addition to his responsibilities as chair of KCI’s board. Not long after KCLC was formed, the management of KCI began to plan a spin-off of the subsidiary, and in 1988, KCI caused KCLC to conduct a public offering of its common stock, reducing KCI’s holdings to 87 percent of KCLC’s common stock. On May 29, 1989, KCI announced plans for a corporate restructuring which would completely separate KCLC from KCI.

Part of this restructuring called for separate boards of directors for the two companies; to that end, Mendel resigned as chairman of KCI’s board effective May 29, 1989. He remained chairman of KCLC’s board, however. The uncontroverted evidence is that Mendel had very little contact with KCI’s board after his resignation, and retained only a 2.6 percent interest in KCI. Richard Grassgreen, who had been president of KCI since 1985, became KCI’s chairman, and continued to plan for the spin-off of KCLC.

Problems with the proposed restructuring developed, and in September of 1989, KCI’s board met to discuss alternative plans. Mendel was invited to and did attend this meeting, but no new plan was adopted. At a subsequent meeting, which Mendel did not attend, KCI’s board adopted a new plan, which it announced on September 22, 1989. The new plan called for the issuance to KCI shareholders of rights to purchase KCI’s shares of KCLC stock.

In connection with the new restructuring plan, KCI issued a Prospectus to its shareholders on October 4, 1989. The Prospectus was prepared primarily by KCI’s attorney. There is no evidence that Mendel personally participated in the preparation of the Prospectus. On October 5, Mendel sent a letter to KCLC’s shareholders, advising them of the restructuring and enclosing a copy of the Prospectus for their information. In the letter, Mendel stated that the Prospectus had been “jointly prepared” by KCI and KCLC. Shortly after the restructuring was completed, KCI changed its name to The Enstar Group, Inc. (“Enstar”).

Appellants are shareholders of KCI/Enstar who bought KCLC stock from KCI as part of the restructuring. They brought a three-count complaint against Enstar, Grassgreen, and Mendel, alleging material omissions and fraud in the dissemination of the Prospectus. Enstar and Grassgreen subsequently filed for bankruptcy, and appellants dismissed all claims against those defendants, proceeding against Mendel alone.

Count one of appellants’ complaint alleged that, in failing to disclose material facts in the Prospectus, Mendel violated section 10(b) of the Act, 48 Stat. at 891,15 U.S.C. § 78j(b) (1994), and rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.10b-5 (1995), which together provide an implied private right of action for misrepresentations in the purchase or sale of securities. In addition, appellants alleged that Mendel was secondarily hable for any violations of the Act by KCI because he was a “controlling person” of KCI within the meaning of section 20(a) of the Act. That count further contended that if Mendel was not hable as a controlling person under section 20(a), then he aided and abetted KCI in connection with the 10b-5 violation. Count two alleged a violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-1964 (1994); this count was dismissed by the district court and is not at issue here. Count three alleged that Mendel committed fraud in violation of Alabama law. No aider and abettor liability was asserted in this last count.

The district court granted summary judgment to Mendel, holding that “the facts cannot legally support a finding that Mendel was a ‘controlling person’ of KCI” at the time of the issuance of the Prospectus. Brown v. Mendel, 864 F.Supp. 1138, 1140 (M.DAla.1994). The court also found that Mendel was not personally involved in the alleged fraud, that he owed no duty to disclose any information to appellants in the Prospectus, and that therefore he could not be liable for fraud under Alabama law. Id. at 1147.

II.

We review the district court’s grant of summary judgment de novo, applying the same legal standards that bound the district court. See Reserve, Ltd. v. Town of Longboat Key, 17 F.3d 1374, 1377 (11th Cir.1994), cert. denied, — U.S.-, 115 S.Ct. 729, 130 L.Ed.2d 633 (1995). In making this determination, we view all evidence in the light most favorable to the non-moving party. See Sammons v. Taylor, 967 F.2d 1533, 1538 (11th Cir.1992). Summary judgment is appropriate in cases in which there is no genuine issue of material fact. Fed.R.Civ.P. 56(c). For the reasons that follow, we affirm the district court’s grant of summary judgment in favor of Mendel.

With respect to the first count of their complaint, appellants effectively concede that Mendel is liable for violations of the Act only if he is a “controlling person” within the meaning the Act. Section 20(a) provides:

Every person who, directly or indirectly, controls any person liable under any provision of this chapter or of any rule or regulation thereunder shall also be liable jointly and severally with and to the same extent as such controlled person to any person to whom such controlled person is liable....

15 U.S.C. § 78t(a). The regulations promulgated under the Act define control as “the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person.” 17 C.F.R. § 230.405 (1995). The burden is on the plaintiff to show that a defendant is a controlling person. The courts of appeals, however, do not agree on exactly how a plaintiff is to meet this burden.

The Eighth Circuit has developed what has become the most widely used test for determining whether a defendant is liable as a controlling person. That court’s two-prong test requires a plaintiff to establish that “the defendant ... actually participated in (i.e., exercised control over) the operations of the corporation in general ... [and] that the defendant possessed the power to control the specific transaction or activity upon which the primary violation is predicated.” Metge v. Baehler, 762 F.2d 621, 681 (8th Cir.1985) (internal quotation marks and citation omitted), cert. denied, 474 U.S. 1057, 106 S.Ct. 798, 88 L.Ed.2d 774 (1986). Metge’s test has been cited approvingly by a number of courts of appeals. See, e.g., Harrison v. Dean Witter Reynolds, Inc., 974 F.2d 873, 887, 881 (7th Cir.1992), cert. denied, 509 U.S. 904, 113 S.Ct. 2994, 125 L.Ed.2d 688 (1993); Abbott v. Equity Group, Inc., 2 F.3d 613, 619-20 (5th Cir.1993), cert. denied, — U.S. -, 114 S.Ct. 1219, 127 L.Ed.2d 565 (1994); Sanders Confectionery Prods., Inc. v. Heller Fin., Inc., 973 F.2d 474, 486 (6th Cir.1992); cert. denied, 506 U.S. 1079, 113 S.Ct. 1046, 122 L.Ed.2d 355 (1993); First Interstate Bank v. Pring, 969 F.2d 891, 898 (10th Cir.1992), rev’d on other grounds sub nom. Central Bank v. First Interstate Bank, — U.S. -, 114 S.Ct. 1439, 128 L.Ed.2d 119 (1994).

As the district court noted, our court has not formulated its own test for controlling person liability, nor have we adopted all or part of the Eighth Circuit’s test. Two decisions of the former Fifth Circuit provide us with guidance in formulating a test, however. In 1980, we found that a defendant who did not have the power to control the management of a company or the company itself could not be liable as a controlling person under section 20(a). Pharo v. Smith, 621 F.2d 656, 670 (5th Cir.1980). A year later, we found a defendant liable as a controlling person because the evidence established that he “had the requisite power to directly or indirectly control or influence corporate policy.” G.A. Thompson & Co. v. Partridge, 636 F.2d 945, 958 (5th Cir.1981).

The district court devised a test that is a combination of the requirements outlined in Pharo and Thompson. We find the reasoning of the district court persuasive, and so adopt the test set forth in its dispositive order. In this circuit, a defendant is liable as a controlling person under section 20(a) if he or she “had the power to control the general affairs of the entity primarily liable at the time the entity violated the securities laws ... [and] had the requisite power to directly or indirectly control or influence the specific corporate policy which resulted in the primary liability.” Brown v. Mendel, 864 F.Supp. 1138, 1145 (M.D.Ala.1994). Of course, the plaintiff must also establish that the controlled person violated the securities laws.

There is no evidence in the record that Mendel had any power over KCI at the time of the issuance of the Prospectus. Appellants insist that because Mendel was chairman of KCI’s board of directors at the time KCI decided to restructure, he was a controlling person of KCI. The only fraud alleged, however, is fraud in the preparation and dissemination of the Prospectus. Appellants allege no violation of the Act in connection with the restructuring itself. Thus, for Mendel to be liable as a controlling person in this case, he must have had the power to control KCI at the time the Prospectus was issued. The district court correctly held that Mendel was not a controlling person of KCI, and thus cannot be secondarily liable for KCI’s alleged securities law violations.

We likewise affirm the district court’s grant of summary judgment in favor of Mendel on appellants’ count three state-law claims. Under Alabama law, fraud is the “[sjuppression of a material fact which the party is under an obligation to communicate.” Ala.Code § 6-6-102 (1995). There is no evidence in the record that Mendel was under any obligation to communicate anything to the appellants that would support appellants’ state law claims. Appellants were shareholders of KCI, not KCLC. As previously discussed, Mendel had no role in the management of KCI at the time the Prospectus was issued, and thus he did not stand in a fiduciary relationship to KCI’s shareholders with respect to the issuance or the contents of the Prospectus.

AFFIRMED.

      . The district court certified a plaintiff class with respect to appellants' federal securities law claims (count one). The court denied appellants' motion to certify a class with respect to appellants' state law claims (count three).

      . Appellants’ original complaint referred to Mendel as the chairman of the board of KCI. The district court allowed them to amend their complaint to remedy this error. We refer to the amended complaint as the "complaint.”

      . Appellants also assert that, if Mendel is not liable for the 10b-5 violations as a "controlling person” of KCI, then he is liable as an aider and abettor. It is clear from the record, however, that appellants abandoned all aider and abettor claims well before trial. In their response to Mendel’s interrogatories, appellants stated unequivocally, "Plaintiff[s] no longer contend[] that Mendel is liable as an 'aider and abettor.' ” Appellants maintained at oral argument that the aiding and abetting allegation was dropped only with respect to the 10b-5 claim. It was only with respect to the 10b-5 claim, however, that appellants raised aiding and abetting allegations. There was no mention in the complaint of aider •or abettor liability with respect to the state law claims. We find that appellants abandoned any claim that defendant Mendel was an aider and abettor.

      . In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (en banc), this court adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to October 1, 1981.

      . We do not find footnote 7 of Rosen v. Cascade Int’l, Inc., 21 F.3d 1520, 1525 n. 7 (11th Cir.1994), to be contrary to our holding in the instant case. The Rosen footnote is not only dictum, it is also contrary to G.A. Thompson & Co., 636 F.2d at 958 (“Neither [the regulation] nor the statute appears to require participation in the wrongful transaction.”), which is binding authority on this court. See also Abbott v. Equity Group, Inc., 2 F.3d 613, 620 n. 18 (5th Cir.1993) (noting that Thompson rejected a “culpable participation" requirement).

      . There is an important distinction between the test we adopt today and the Eighth Circuit's test discussed above. The Eighth Circuit's test requires a plaintiff to prove that a defendant actually exercised power over the entity primarily liable. Because we hold infra that Mendel neither possessed nor exercised power over KCI at the time the Prospectus was issued, we do not need to decide here whether “power to control the general affairs of the entity primarily liable” means simply abstract power to control, or actual exercise of the power to control.


text:
    FIRST NATIONAL BANK OF BOSTON, successor-in-interest of Brown Transport Corp., Plaintiff-Appellee, Cross-Appellant, v. THOMSON CONSUMER ELECTRONICS, INC., Defendant-Appellant, Cross-Appellee.
    No. 94-9025.
    United States Court of Appeals, Eleventh Circuit.
    May 31, 1996.

      Mark S. Marani, Small White & Marani, Atlanta, Georgia, Steven G. Cracraft, Stewart & Irwin, Indianapolis, IN, for Appellant.
    Arthur B. Seymour, Office of Arthur B. Seymour, Atlanta, GA, for Appellee.
    Before TJOFLAT, Chief Judge, CARNES, Circuit Judge, and FAY, Senior Circuit Judge.
   TJOFLAT, Chief Judge:

First National Bank of Boston, having acquired the accounts receivable of Brown Transportation Corp., a bankrupt motor carrier, brought this action against Thomson Consumer Electronics, Inc., to collect for transportation services that Brown had performed for Thomson. Thomson sought to avoid the entry of judgment by asserting several claims for recoupment, which, in total, exceeded the amount that it owed for Brown’s services. The district court, to which this case was removed from state court, allowed some, but not all, of Thomson’s claims for recoupment, and gave the bank judgment for the difference. We conclude that the applicable state law required the court to honor all of Thomson’s claims. We therefore vacate the court’s judgment and remand the case for the entry of a judgment of no liability in favor of Thomson.

I.

In March of 1988, Brown and Thomson entered into a one-year transportation contract, effective April 1, 1988, under which Brown would provide shipping services for Thomson; the contract was later extended for another year, effective April 1, 1989. On December 30, 1988, Brown and the Bank entered into a security agreement in which Brown granted to the Bank a security interest in all of its accounts receivable. The Bank perfected its security interest on January 3, 1989. On October 31, 1989, Brown filed a petition for relief under Chapter 11 of the Bankruptcy Code, see 11 U.S.C. §§ 301, 1101-1174 (1994); on January 8, 1990, the case was converted into a Chapter 7 liquidation and a trustee was appointed, see 11 U.S.C. §§ 701-766, 1112. On the Bank’s application, the bankruptcy court lifted the automatic stay, see 11 U.S.C. § 362, thus allowing the Bank to collect Brown’s accounts receivable. On September 3,1992, the trustee and the Bank agreed to a settlement, according to which the Bank would withdraw all of its claims against the bankrupt’s estate in return for, among other things, Brown’s interest, if any, in its accounts receivable. The bankruptcy court approved the settlement agreement on January 28,1993.

On October 19,1992, before the settlement was approved, the Bank sued Thomson in Georgia state court to recover $205,595.82 in unpaid shipping invoices Brown had issued to Thomson for over one thousand shipments made between September 1, 1988, and December 12,1989. In its answer to the Bank’s complaint, Thomson sought recoupment under the transportation contract for shipments lost in transit on November 19 and December 9,1988, and on June 30,1989. As noted, the case was subsequently removed to the district court.

On July 29, 1994, after a bench trial, the district court issued its final judgment. The court found that the Bank had proven that Thomson owed it $99,282.65 for unpaid shipping charges. The court also found that Thomson had proven its claims for lost shipments in the amount of $394,692.44. However, applying North Carolina law, see N.C.Gen.Stat. § 25-9-318(1), the court did not allow Thomson to recoup the value of shipments that were lost after January 3, 1989, the date the Bank perfected its security interest in Brown’s accounts receivable. The allowable claims, amounting to $62,-242.44, reduced the amount that Thomson owed to the Bank to $37,040.21. The court also awarded $15,935.38 in pre-judgment interest, and therefore entered judgment for the Bank in the amount of $52,975.59.

Thomson appeals the denial of its claims for recoupment that accrued after January 3, 1989. The Bank cross-appeals, arguing that Thomson suffered no damage irom the lost shipments and should not prevail on any of its claims for recoupment. We address both of these appeals in turn.

II.

The Bank asserts that it has a perfected security interest in the subject accounts receivable that gives it priority over any subsequent recoupment claims of a third party by virtue of the general priority rules of Article 9 of the Uniform Commercial Code, as adopted in North Carolina. See N.C.Gen. Stat. § 25-9-201. Thomson, however, argues that the applicable rules are found in N.C.Gen.Stat. § 25-9-318(1), which deals specifically with the rights of an “assignee” against those of an “account debtor.” Section 25-9-318(1) provides as follows:

Unless an account debtor has made an enforceable agreement not to assert defenses or claims arising out of a sale as provided in [N.C.GemStat. §] 25-9-206 the rights of an assignee are subject to
(a) all the terms of the contract between the account debtor and assignor and any defense or claim arising therefrom; and
(b) any other defense or claim of the account debtor against the assignor which accrues before the account debtor receives notification of the assignment.

N.C.Gen.Stat. § 25-9-318(l)(a)-(b). Thomson is clearly an “account debtor,” which is defined as a “person who is obligated on an account.” N.C.Gen.Stat. § 25-9-105(l)(a). The accounts in this case are the accounts receivable that were created by Thomson’s obligation to pay Brown for services Brown rendered as a motor carrier. See N.C.Gen. Stat. § 25-9-106. Provided that the Bank is an “assignee,” the Bank’s right to recover on the accounts receivable is subject to “all the terms of the contract between the account debtor and assignor and any defense or claim arising therefrom” and “any other defense or claim of the account debtor against the assignor which accrues before the account debtor receives notification of the assignment.” N.C.Gen.Stat. § 25—9—318(l)(a)—(b).

The Bank argues that section 25-9-318 does not apply because it is not an assignee of Brown’s accounts receivable, but rather a secured party with a perfected security interest therein. Thomson claims that the district court was correct in finding that section 25-9-318 applies, but that the district court erred in applying subsection (l)(b) rather than subsection (l)(a).

A.

We take the Bank’s argument first. It is not clear to us that the Bank remains a secured party, since, with the approval of the settlement agreement, the underlying debt has been extinguished and the collateral—the accounts receivable—is no longer owned by the debtor. See, e.g., In re Advanced Aviation, Inc., 101 B.R. 310, 313 (Bankr.M.D.Fla.1989). But we need not decide whether the Bank does or does not remain a secured party, since section 25-9-318 applies in either ease.

The instrument that gave the Bank its security interest in the accounts receivable also, by its very terms, assigned the accounts receivable to the Bank. The security agreement read, in part, as follows:

§ 1. GRANT OF SECURITY INTERESTS, ETC. [Brown] hereby ... pledgefs] and assign[s] to the [Bank] ... and grant[s] to the [Bank] ... a continuing security interest in and lien on all of the accounts of [Brown], and all the proceeds and products thereof....

Brown clearly assigned to the Bank all of its accounts, including its accounts receivable, making the Bank an “assignee” within the meaning of section 25-9-318. Had the security agreement not provided for an assignment, however, the Bank surely became the assignee of the accounts receivable by virtue of its settlement with the trustee of the bankruptcy estate, when all of the accounts of the bankrupt and the proceeds thereof were turned over to the Bank.

If, as' the Bank claims, it has only a perfected security interest in the accounts receivable, it is nevertheless still an “assign-ee” within the meaning of section 25-9-318. “For purposes of [U.C.C. § 9-318], the courts and the UCC have made no distinction between a party with a security interest in a debtor’s accounts receivable and a party who is an assignee of a debtor’s accounts receivable.” Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1190 (7th Cir.1990) (applying Wisconsin’s identical version of U.C.C. § 9-318). It seems clear that “a secured party with a security interest in accounts or general intangibles is the assign-ee under [U.C.C.] § 9-318.” In re Otha C. Jean & Assocs., Inc., 152 B.R. 219, 222-23 (Bankr.E.D.Tenn.1993) (applying Tennessee’s identical version of U.C.C. § 9-318). This interpretation is in accord with the purpose of section 25-9-318, which is to govern the third-party rights that arise when contract rights are assigned as part of a secured transaction. The district court was thus correct in applying the rules of section 25-9-318. to determine the Bank’s rights as an assign-ee of the accounts receivable.

B.

The district court was not correct, however, when it applied subsection (l)(b) of section 25-9-318 rather than subsection (l)(a). Subsection (l)(a) makes the assignee of a contract right subject to “all the terms of the contract between the account debtor and assignor and any defense or claim arising therefrom.” Subsection (l)(b) makes an as-signee subject as well to “any other defense or claim,” but only if those defenses or claims accrue “before the account debtor receives notification of the assignment.” The district court found that Thomson’s recoupment claims arose out of the transportation contract between Thomson (the account debtor) and Brown (the assignor). Nonetheless, the court allowed Thomson to assert only those recoupment claims that accrued before the perfection of the Bank’s security interest, that is, before Thomson supposedly received notification of the assignment. This would have been an appropriate holding if the claims were “any other” claims within the meaning of subsection (l)(b). But Thomson’s claims arose out of the terms of the transportation contract within the meaning of subsection (l)(a), and thus all of them should have been allowed. Cf. Equitable Factors Co. v. Chapman-Harkey Co., 43 N.C.App. 189, 258 S.E.2d 376, 378-79 (1979) (applying N.C.Gen. Stat. § 25-9-318(l)(a)), cert. denied, 298 N.C. 805, 262 S.E.2d 1 (1979).

The district court explained that its decision to disallow Thomson’s post-perfection recoupment claims was necessary in order to take into account the Bank’s “dual role as a perfected security holder.” We find no principled reason not to follow the explicit language of section 25-9-318 when that section is squarely applicable. As the official comment to section 25-9-318 makes clear, “[w]hen the account debtor’s defenses on an assigned claim arise from the contract between him and the assignor, it makes no difference whether the breach giving rise to the defense occurs before or after the account debtor is notified of the assignment.” N.C.Gen.Stat. § 25-9-318 comment 1. We therefore reverse the decision of the district court and hold that the Bank’s right to recover on the accounts receivable is subject to all of Thomson’s claims for recoupment that arise out of the transportation contract.

III.

In its cross-appeal, the Bank argues that Thomson cannot make claims for recoupment because the General Electric Company (and not Thomson) was the party damaged by the lost shipments. This is a question of fact. The district court found that Thomson was a party to the transportation contract with Brown and that Thomson was both the party liable on the contract for the shipping charges and the party entitled to assert claims under the contract for the lost shipments. We have reviewed the evidence relied on by the court and have considered the Bank’s arguments on this issue; we hold that the district court’s finding is not “clearly erroneous.” See Fed.R.Civ.P. 52(a). We therefore affirm the court’s decision that Thomson was the injured party and could validly make claims for recoupment under the transportation contract.

IV.

The district court found that Thomson’s claims for recoupment, which we now allow in full, amount to $394,692.44. The Bank’s total claim against Thomson for the unpaid shipping charges, which is undisturbed by this appeal, is $99,282.65. Because the amount of Thomson’s recoupment claims exceeds the amount of the Bank’s claim, we VACATE the district court’s judgment and REMAND the case for the entry of judgment in favor of Thomson on the Bank’s claim.

SO ORDERED.

      . Diversity of citizenship existed between the parties; hence, the case was removable under 28 U.S.C. § 1441(a) (1994).

      . The district court reduced the Bank's $205,-595.82 claim to take into account discounts that Brown had awarded Thomson and unpaid shipping invoices that were issued outside of the statute of limitations period. See O.C.G.A. § 46-9-5 (three-year limitation on actions for recovery of intrastate shipping charges).

      . The district court did not determine whether Georgia or North Carolina law generally applies in this case. However, the Uniform Commercial Code, as adopted in both states, provides that in the case of intangible collateral, such as accounts receivable, "[t]he law (including the conflict of law rules) of the jurisdiction in which the debtor is located governs the perfection and the effect of perfection or nonperfection of the security interest,” and that "[a] debtor shall be deemed located ... at his chief executive office if he has more than one place of business.” O.C.G.A. § 11-9-103(3)(b), (d); N.C.Gen.Stat. § 25-9-103(3)(b), (d); see U.C.C. § 9-103(3)(b), (d). The debtor in this case (Brown) was located in North Carolina. The district court thus concluded that, by operation of the law of either state, North Carolina’s law governs the Bank’s right to collect the accounts receivable. The parties do not challenge this conclusion.

      .Thomson had proven claims for $62,242.44 that accrued on December 9 and October 19, 1988, and claims for $332,450 that accrued on June 30, 1989.

      . The Bank continues to argue on appeal that the only contracts between Brown and Thomson were the individual freight bills for each of the more than one thousand shipments involved in this case. According to the Bank, none of these so-called contracts provides a basis for a recoupment claim. The district court, however, found that “while the shipments are evidenced by the freight bills, the shipments were made pursuant to the terms of the overall [Brown-Thomson] contract” and that Thomson’s recoupment claims for the lost shipments "relate equally to and arise equally from the same contract between (Thomson] and Brown and not separate, unrelated contracts." Nothing in the evidence or in the Bank's argument on appeal persuades us to disturb this finding.

      . Because we hold that § 25-9-318(l)(b) does not apply to the claims involved in this case, we need not address the question of whether the perfection of a security interest is sufficient “notification” within the meaning of subsection (l)(b).

      . The claims for recoupment are not claims for affirmative relief. Rather, Thomson merely seeks to set off against the Bank's claim an amount equal to that claim.

      . Thomson acquired the consumer electronics business of General Electric on January 1, 1988.


author: BLACK, Circuit Judge:

text:
    The SOUTH FLORIDA WATER MANAGEMENT DISTRICT, New Farm Inc., Plaintiffs, v. Juan MONTALVO, Chemairspray, Inc., Chemspray, Inc., Glades Formulating Corp., Defendants-Third Party Plaintiffs-Appellants, CIBA-GEIGY CORP., Du Pont (E.I.) De Nemours & Co., Monsanto Co., Rohm & Hass Co., Coca-Cola Co., Griffin Corp., Sherwin-Williams Co., Boyton (J.T.) Farms, Inc., Camayen Cattle Co., Gulf & Western Inc., Hatton Bros., Inc., Robert (C) Hatton, Manatee Plantations, Inc., Sod Co., Seminole Sugar Corp., Sugar Cane Growers, Corp., Tailisman Sugar Corp., Trucane Sugar Corp., United Cane Cooperation Assoc., Hercules Inc., Camayen Farms Co., Double D Properties Inc., Defendants-Third-Party Defendants-Appellees. The South Florida Water Management District, New Farm Inc., Plaintiffs, v. Juan MONTALVO, Chemairspray, Inc., Chemspray, Inc., Glades Formulating Corp., Defendants-Third-Party Plaintiffs-Appellants, Ciba-Geigy Corp., Du Pont (E.I.) De Nemours & Co., Monsanto Co., Rohm & Hass Co., Defendants-Third-Party Defendants, Coca-Cola Co., Defendant-Third-Party Defendant-Appellee, Griffin Corp., Sherwin-Williams Co., Boyton (J.T.) Farms, Inc., Camayen Cattle Co., Gulf & Western Inc., Hatton Bros., Inc., Robert (C) Hatton, Manatee Plantations, Inc., Sod Co., Seminole Sugar Corp., Sugar Cane Growers, Corp., Tailisman Sugar Corp., Trucane Sugar Corp., United Cane Cooperation Assoc., Hercules Inc., Camayen Farms Co., Double D Properties Inc., Defendants-Third-Party Defendants.
    Nos. 93-5113, 94-4397.
    United States Court of Appeals, Eleventh Circuit.
    June 3, 1996.

      Philip M. Burlington, West Palm Beach, FL and James R. Hubbard, West Palm Beach, FL, for appellants.
    Arnold L. Berman, West Palm Beach, FL, Anthony Dimatteo, West Palm Beach, FL, Boynton, Camayen, Miami Sugag Cane, Tru-cane, United Cane, Cooper Assoc., and Jonathan D. Gerber, Shutts & Bowen, West Palm Beach, FL, for Double D Management & Double D Properties.
    ■ Patricia T. Barmeyer, Carol M. Wood, Atlanta, GA, for The Coca-Cola Company.
    Before HATCHETT and BLACK, Circuit Judges, and CLARK, Senior Circuit Judge.
   BLACK, Circuit Judge:

In this appeal, we are asked to define the limits of “arranged for” liability under § 107(a)(3) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), 42 U.S.C. § 9607(a)(3). Third-Party Plaintiffs Juan Montalvo, Chemairspray, Inc., Chemspray, Inc., and Glades Formulating Corporation (collectively, “the Sprayers”) sued a group of landowners in south Florida (the Landowners) claiming the Landowners were liable under CERCLA for cleaning up property in Palm Beach County, Florida, that had become contaminated with pesticide wastes. The district court dismissed the Sprayers’ CERCLA claim after concluding the Sprayers had failed to allege the Landowners “arranged for” the disposal of hazardous substances within the meaning of § 107(a)(3). We affirm, concluding the allegations of the Sprayers’ third-party complaint do not state a claim for relief under CERCLA against the Landowners.

I. BACKGROUND

For an undisclosed number of years, Chemspray and Chemairspray provided pesticide formulating and aerial spraying services in south Florida. The location of their businesses, the “Chemairspray Site,” is comprised of two separate pieces of realty in Palm Beach County. Chemairspray, the company providing spraying services, leased a 10-acre parcel on which it maintained an airstrip. The other corporation, Chemspray, owned a 14-acre plot adjacent to the airstrip with a hangar and storage facilities. Chem-spray formulated pesticides from chemicals supplied by chemical manufacturers. Juan Montalvo allegedly controlled both Chem-spray and Chemairspray while they were in business.

Chemairspray contracted with farmers and ranchers throughout south Florida to spray their lands with aerial pesticides and herbicides. As a result of Chemairspray’s operations, the Site became contaminated with pesticide wastes. This contamination was due in part to pesticides being spilled on the airstrip and surrounding land during the mixing and loading of pesticides into the applicating tanks of planes. Pesticide wastes were also released when, after spraying runs, the applicating tanks of the planes were rinsed out, and the contaminated rinse water was allowed to drain onto the Site.

The property leased by Chemairspray was eventually purchased by New Farm, Inc. In 1985, Florida Department of Environmental Regulation sued New Farm to compel a clean up of the Site. As part of its investigation, New Farm discovered the contamination had spread to adjacent lands owned by New Farm and the South Florida Water Management District (SFWMD).

In 1988, New Farm and SFWMD initiated the present litigation when they sued Che-mairspray, Chemspray and Montalvo claiming they were liable under CERCLA for cleaning up the Site and neighboring lands. By the time this suit was filed, both Che-mairspray and Chemspray had been dissolved. New Farm and SFWMD later joined Glades Formulating Corporation as a defendant alleging the company was a successor corporation to Chemspray, the pesticide formulator. All four defendants, the Sprayers, eventually admitted their liability under CERCLA. Following a bench trial, the district court found the Sprayers jointly and severally liable for 75% of the costs incurred in cleaning up the Site.

The Sprayers thereafter filed their third-party complaint seeking contribution under CERCLA from, among other parties, various farming and ranching corporations that had contracted with the Sprayers for aerial spraying services. The allegations supporting CERCLA liability against each of these eompanies are virtually identical, alleging that each corporation:

contracted with Third-Party Plaintiffs [the Sprayers] to apply and/or distribute herbicides, insecticides and/or pesticides ... which [the defendant] owned throughout the application and/or distribution processes. The generation of hazardous wastes from these products was a necessary incident of the application and/or distribution processes by virtue of mixing and loading the products into the aerial applicating plane at the CHEMAIRSPRAY site, as well as rinsing out the applicating tanks at the CHEMAIRSPRAY site following application to [the defendant’s] land. Third-Party Plaintiffs’ actions in handling, storing and disposing of such hazardous wastes at the CHEMAIRSPRAY site were performed as agents/independent contractors for [the defendant]. By virtue of its contracts and commercial relationships with the Third-Party Plaintiffs, industry practices, and all other relevant circumstances [the defendant] arranged for the disposal of such wastes.

A number of the farming and ranching companies, whom we collectively refer to as “the Landowners,” moved to dismiss the Sprayers’ CERCLA claim under Fed. R.Civ.P. 12(b)(6). The district court granted the Landowners’ motion concluding the Sprayers had not alleged facts stating the Landowners had “arranged for” the disposal of hazardous substances within the meaning of § 107(a)(3) of CERCLA. In particular, the district court found the Sprayers had not alleged any “substantial ties” between the Landowners and the Sprayers’ disposal of pesticide wastes. The court entered final judgment on the CERCLA claim against the Landowners from which the Sprayers now appeal.

II. STANDARD OF REVIEW

In reviewing de novo a dismissal pursuant to Rule 12(b)(6), we apply the same standard as did the district court. Marshall County Bd. of Educ. v. Marshall County Gas Dist., 992 F.2d 1171, 1174 (11th Cir.1993) (citation omitted). The factual allegations of the plaintiffs complaint are accepted as true for the purposes of a motion to dismiss. Id. The motion must be denied unless it is clear the plaintiff can prove no set of facts in support of the claims in the complaint. Id.

III. DISCUSSION

The Sprayers brought their contribution claim against the Landowners under §§ 107(a) and 113(f) of CERCLA, 42 U.S.C. §§ 9607(a), 9613(f). Section 113(f) provides “[a]ny person may seek contribution from any other person who is liable or potentially liable under section 9607(a) [107(a)] of this title....” 42 U.S.C. § 9613(f). To prevail on their claim under § 113(f), the Sprayers must demonstrate the Landowners are members of one or more of the four classes of responsible parties amenable to suit under § 107(a). Id.

The allegations of the Sprayers’ third-party complaint attempt to portray the Landowners as parties who “arranged for” the disposal of hazardous substances at the Che-mairspray Site. Section 107(a)(3) of CERC-LA imposes liability on:

any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at any facility or incineration vessel owned or operated by another party or entity and containing such hazardous substances.

42 U.S.C. § 9607(a)(3). Since the Sprayers have not alleged the Landowners expressly agreed to dispose of hazardous substances at the Site, the question becomes whether the Landowners, by virtue of their contracting with the Sprayers for aerial spraying services, are parties who “otherwise arranged for” the disposal of hazardous substances.

As we have noted before, CERCLA does not define the phrase “arranged for.” Florida Power & Light Co. v. Allis Chalmers Corp., 893 F.2d 1313, 1317 (11th Cir.1990) [hereinafter FP & L]. Congress has left this task to the courts, and the courts have at times struggled with the contours of “arranger” liability under § 107(a)(3). When analyzing whether a particular transaction amounted to an arrangement to dispose, courts have focused on various factors. For example, where the transaction involved a sale, courts have asked whether there was a transfer of a “useful” or “waste” product. See AM Int'l, Inc. v. International Forging Equip. Corp., 982 F.2d 989, 999 (6th Cir.1993); Prudential Ins. Co. v. United States Gypsum, 711 F.Supp. 1244, 1264 (D.N.J.1989). In several cases, courts have considered whether the defendant intended to dispose of a substance at the time of a transaction. See Amcast Indus. Corp. v. Detrex Corp., 2 F.3d 746, 751 (7th Cir.1993), cert. denied, — U.S. -, 114 S.Ct. 691, 126 L.Ed.2d 668 (1994); United States v. Cello- Foil Prods., Inc., 848 F.Supp. 1352, 1357 (W.D.Mich.1994); Edward Hines Lumber Co. v. Vulcan Materials Co., 685 F.Supp. 651, 654-56 (N.D.Ill.), aff'd, 861 F.2d 155 (7th Cir.1988). Courts have also looked to whether a defendant made the “crucial decision” to place hazardous substances in the hands of a particular facility. See United States v. A & F Materials Co., 582 F.Supp. 842, 845 (S.D.Ill.1984).

Citing these and other reported cases, litigants have at times elevated factors courts found pertinent in particular contexts to the status of bright-line rules for defining arranger liability. See, e.g., FP & L, 893 F.2d at 1317-18 (citing the reasoning from A & F Materials). In FP & L, however, we rejected any attempt to substitute a per se rule for the phrase “arranged for” as used in § 107(a)(3)’s text. Id. at 1318. When determining whether a party has “arranged for” the disposal of a hazardous substance, courts must focus on all of the facts in a particular ease. Id. at 1317-18. While factors such as a party’s knowledge (or lack thereof) of the disposal, ownership of the hazardous substances, and intent are relevant to determining whether there has been an “arrangement” for disposal, they are not necessarily determinative of liability in every case.

Since this case comes to us on a motion to dismiss, we accept as true the facts as pled in the Sprayers’ third-party complaint. The Sprayers assert the following supports finding the Landowners “arranged for” the disposal of pesticide wastes at the Chemairspray Site: (1) the Landowners contracted with the Sprayers to have pesticides applied to their property; (2) the Landowners owned the pesticides throughout the application process; (3) the generation of hazardous wastes was a necessary incident to the application process; and (4) the Sprayers acted as the Landowners’ agents and/or independent contractors in applying the pesticides and handling the pesticide wastes.

The only link alleged between the Landowners and the Sprayers is the Landowners’ contracting with the Sprayers for aerial spraying services. The Sprayers contend this is sufficient to establish liability, given the Landowners owned the pesticides during the application process and the generation of hazardous wastes was a necessary part of the process. We disagree. The Landowners contracted to have pesticides applied to their property. They did not agree to have pesticides and contaminated rinse water spilled onto the Chemairspray Site.

For the Landowners to have “arranged for” the disposal of the pesticide wastes, they must have done more than simply contracted for aerial spraying services. The Sprayers must demonstrate the Landowners took some affirmative act to dispose of the wastes. AM Int’l, 982 F.2d at 999. The allegations in the Sprayers’ complaint do not disclose the Landowners took such an act. The Landowners did not assist the Sprayers in loading the planes or rinsing out the applicating tanks. Indeed, the Sprayers have not even alleged the Landowners knew about the spills at the Site. Nor have the Sprayers alleged the Landowners had either the duty or authority to monitor or control the Sprayers’ activities. In other words, there are no allegations from which we can infer the Landowners implicitly agreed to the disposal of these wastes.

The Sprayers analogize this case to the Eighth Circuit’s decision in United States v. Aceto Agric. Chems. Corp., 872 F.2d 1373 (8th Cir.1989), to demonstrate the Landowners effectively controlled the disposal of wastes at the Site. In Aceto, the United States and the State of Iowa sued a group of chemical manufacturers under CERCLA to recover costs incurred in cleaning up the site of a pesticide formulation business. Id. at 1375. The plaintiffs alleged the manufacturers sent raw chemicals to the formulator for mixing and conversion into commercial pesticides. Id. at 1378. “Inherent” in the formulating process was the generation of hazardous wastes through “spills, cleaning of equipment, mixing and grinding operations, production of batches which [did] not meet specifications, and other means.” Id. According to the complaint, the manufacturers specified what pesticides they wanted produced, and retained ownership of the chemicals throughout the formulating process. Id. Once the pesticides had been formulated, they were either shipped back to the manufacturers or forwarded to their customers. Id. at 1375. Under these circumstances, the Eighth Circuit concluded the plaintiffs in Aceto had stated a claim for “arranged for” liability under CERCLA, and upheld the denial of the manufacturers’ motion to dismiss. Id. at 1382.

The service contracted for in Aceto bears little resemblance to the service the Landowners purchased in this case. The chemical manufacturers in Aceto contracted for formulating services requiring the mixing of active and inactive chemicals according to the manufacturers’ specifications. Since the manufacturers provided the chemicals to the formulator, specified what pesticides the formulator was to mix, and retained ownership of the chemicals and pesticides throughout the formulating process, it was possible to infer the manufacturers exercised some control over the formulator’s mixing process. See id. at 1381-82.

In contrast, the Landowners contracted with the Sprayers to have formulated pesticides sprayed on their property. That the Landowners owned the pesticides during the application process does not, by itself, imply the kind of control over the Sprayers’ application procedures that the chemical manufactures had over the formulator’s process in Aceto.

In Aceto, the mixing and packaging of pesticides “inherently” involved the creation of hazardous wastes such that the manufacturers should have expected the formulator would have to dispose of these wastes as part of the service they were purchasing. The service the Sprayers contracted for — aerial pesticide spraying — does not obviously involve the creation and disposal of hazardous wastes. Granted, the Sprayers have alleged the generation of pesticide wastes was a “necessary incident” to the application process. This may be so, but the Sprayers have not alleged the Landowners knew about this incidental by-product of the service they were purchasing. Whereas it was possible to infer the chemical manufacturers in Aceto knew about the creation of hazardous wastes given the service they were being provided, we cannot infer the Landowners had similar knowledge that spraying their crop and pasture lands with pesticides entailed the spilling of pesticides and draining of contaminated rinse water. Without this knowledge, the Landowners cannot be said to have acquiesced to the Sprayers’ disposal of the wastes.

In the past, we have stated that “arranged for” must be liberally construed to promote CERCLA’s remedial scheme. FP & L, 893 F.2d at 1317 (citing United States v. Northeastern Pharm. & Chem. Co., 810 F.2d 726, 733 (8th Cir.1986), cert. denied, 484 U.S. 848, 108 S.Ct. 146, 98 L.Ed.2d 102 (1987)). CERCLA liability, however, is not boundless. The Sprayers cannot escape the fact they were the parties who spilled the hazardous substances that contaminated the Chemairspray Site. While there may be circumstances where the Landowners could be deemed to have arranged for the disposal of these wastes under § 107(a)(3), the Sprayers have not alleged these circumstances exist here. Essentially, the Sprayers seek to hold the Landowners liable merely because the Landowners contracted for a service that involved the application of hazardous substances. We think this stretches the meaning of “arranged for” too far.

At the same time, we decline the Landowners’ invitation to broadly exclude from CERCLA’s reach cases where a plaintiff seeks to hold a defendant liable because the defendant contracted for a service involving the use and disposal of hazardous substances. We emphasize that whether or not a party has “arranged for” the disposal of a hazardous substance depends on the particular facts of each case. In upholding the district court’s dismissal of the Sprayers’ complaint against the Landowners, we are not endorsing the view that parties who contract for services involving the application of hazardous substances can never be found liable under § 107(a)(3). Rather, we conclude the Sprayers have simply not alleged the Landowners had sufficient knowledge of or control .over the Sprayers’ disposal practices to be held liable under this provision.

IV. CONCLUSION

After reviewing the allegations of the Sprayers’ third-party complaint, we agree with the district court’s conclusion the Sprayers can prove no set of facts supporting then-contribution claim against the Landowners under CERCLA. Dismissal under Rule 12(b)(6) was therefore proper.

AFFIRMED.

      . As the current owner of the property. New Farm was found to be a "covered person” under § 107(a)(1) of CERCLA, 42 U.S.C. § 9607(a)(1), and held liable for 25% of the clean-up costs.

      . The district court’s orders finding the Sprayers liable and proportioning damages between the Sprayers and New Farm are not at issue in this appeal.

      . The Sprayers' amended third-party complaint divides the third-party defendants into two groups: "manufacturers/suppliers" and "landowners.” The "manufacturers/suppliers” are chemical companies which allegedly supplied the Sprayers with chemicals for formulating into commercial pesticides and herbicides. The Sprayers generally allege that each of these defendants contracted with the Sprayers to formulate, package and distribute pesticides, and that this activity resulted in contamination at the Site. The Sprayers assert CERCLA and state common law indemnity and contribution claims against these defendants. The Sprayers’ claims against the "manufacturer/supplier" defendants are not at issue in this appeal.
      Listed as "landowner” defendants are the following: Boyton (J.T.) Farms, Inc., Camayen Cat-tie Co., Camayen Farms Co., Double D Management Co., Double D Properties, Inc., Gulf & Western Inc., Hatton Brothers, Inc., Hatton (Robert C.), Inc., Manatee Plantations, Inc., Miami Sod Co., Seminole Sugar Corp., Sugar Cane Growers Cooperative of Florida, Talisman Sugar Corp., Trucane Sugar Corp., and United Cane Cooperative Association. Coca-Cola is listed as a "manufacturer/supplier” in the amended third-party complaint, but the Sprayers conceded in the district court that the company should be treated as a "landowner.” The Sprayers assert only a CERCLA claim against the "landowner” defendants.

      . Boyton (J.T.) Farms, Inc., Camayen Cattle Co., Camayen Farms Co., Hatton (Robert C.), Inc., Manatee Plantations, Inc., Miami Sod Co., Seminole Sugar Corp., Sugar Cane Growers Cooperative of Florida, and Trucane Sugar Corp. moved to dismiss on August 1, 1989. Double D Management Co. and Double D Properties, Inc., filed a separate motion to dismiss on September 25, 1989. The district court consolidated these motions for the purpose of ruling on them.
      Coca-Cola moved for judgement on the pleadings in July 1991. The court granted this motion on the same grounds as it did the earlier motions to dismiss.

      . The court further reasoned CERCLA's "pesticide exemption” of § 107(i), 42 U.S.C. 9607(i), supported its finding that a party cannot be deemed to have "arranged for” the disposal of hazardous waste when it has merely contracted for the application of pesticides.

      . As the Eighth Circuit has noted, CERCLA's legislative history offers us little guidance in ascertaining the meaning of "arranged for.” United States v. Aceto Agric. Chems. Corp., 872 F.2d 1373, 1380 n. 8 (8th Cir.1989).

      . Contrary to the Sprayers’ belief, this Court in FP & L did not reject the reasoning and holding in A & F Materials. In FP & L, the manufacturers of electrical transformers argued A & F Materials identified a bright-line rule for when a party could be deemed to have arranged for the disposal of a hazardous substance. FP & L, 893 F.2d at 1318. Rather than disagreeing with the decision in A & F Materials, we simply declined to adopt its reasoning as establishing a per se rule of liability. Id. We agree with the reasoning of A & F Materials to the extent that, in certain cases, who made the decision of when and where a substance was disposed of is relevant to determining liability under § 107(a)(3).

      . This last allegation—that the Sprayers acted as the Landowners’ agents/independent contractors—adds nothing to the Sprayers' claim. The Sprayers have not alleged any basis for an agency relationship beyond the Landowners having contracted for spraying services. Characterizing this act as creating an agency between the parties does not lead to the conclusion the Landowners "arranged for” the disposal of hazardous wastes. While common law principles of agency are relevant in determining CERCLA liability in some instances, see Aceto, 872 F.2d at 1382; Edward Hines Lumber Co. v. Vulcan Materials Co., 861 F.2d 155, 157 (7th Cir.1988), they add nothing to the analysis here. The Sprayers must establish the Landowners "arranged for” the disposal of the pesticide wastes. Whether or not the Landowners’ conduct also created an agency/independent contractor relationship is irrelevant.

      . The Sprayers erroneously contend that in FP & L we approved of the entire analysis and holding in Aceto. In FP & L, we agreed with the Eighth Circuit’s statement that courts must look behind the parties’ characterizations of a transaction to determine whether there has been an arrangement for disposal of a hazardous substance. FP & L, 893 F.2d at 1318 (citing Aceto, 872 F.2d at 1381). This limited reference to Aceto's reasoning cannot be interpreted as a wholesale adoption of Aceto as the law of this circuit.

      . The Landowners contend this allegation is an unwarranted assumption contradicted by a prior finding of the district court. In granting partial summary judgment in favor of New Farm and SFWMD on the issue of the Sprayers’ liability under CERCLA, the district court concluded the spilling of pesticides at the Chemairspray Site was not an "integral act[]” in the application of pesticides. (Order of Partial Summ.J. filed Nov. 7, 1988, at 6). The Sprayers attached a copy of this summary judgment order as an exhibit to their third-party complaint against the Landowners.
      As a general rule, conclusory allegations and unwarranted deductions of fact are not admitted as true in a motion to dismiss. Associated Builders, Inc. v. Alabama Power Co., 505 F.2d 97, 100 (5th Cir.1974) (citation omitted). While the Landowners urge us to ignore the Sprayers’ allegation that the generation of hazardous wastes was a "necessary incident” of the service they provided, we find it unnecessary to do so in this case. Even assuming the truth of this allegation, we find the Sprayers have not stated a claim under CERCLA.

      . Our conclusion that the Landowners’ act of contracting for spraying services does not by itself amount to an arrangement for disposal of hazardous substances is bolstered by CERCLA’s "pesticide exemption.” This provision states in relevant part:
      No person ... may recover under the authority of this section for any response costs or damages resulting from the application of a pesticide product registered under the Federal Insecticide, Fungicide, and Rodenticide Act.”
      42 U.S.C. § 9607(i).
      The pesticide exemption does not, standing alone, absolve the Landowners of liability under CERCLA. The contamination at the Chemair-spray Site did not result from the application of pesticides to the Landowners’ property. Rather, it resulted from spills while loading planes and the drainage of contaminated rinse water following spraying runs. If the Landowners were being sued for contamination of their own property caused by the application of pesticides, then the Landowners’ liability would end at § 107(i).
      While this is not the case, the pesticide exemption lends credence to the view that the Sprayers have failed to state a claim of "arranged for" liability against the Landowners. The Landowners contracted with the Sprayers "to apply and/or distribute" pesticides. Again, the only reasonable assumption based on the allegations of the Sprayers’ complaint is the Landowners contracted to have pesticides applied to their property — not spilled on the Chemairspray Site. Given § 107 (i) insulates the Landowners from liability for any contamination resulting from the application of pesticides to their property, it would be inconsistent to read § 107(a)(3) as imposing liability based on the Landowners having contracted to have pesticides applied to their property.