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United States Code/Title 42/Chapter 103/Section 9601

§ 9601. Definitions CERCLA § 101

For purpose of this subchapter—
 * (1) The term “act of God” means an unanticipated grave natural disaster or other natural phenomenon of an exceptional, inevitable, and irresistible character, the effects of which could not have been prevented or avoided by the exercise of due care or foresight.
 * (2) The term “Administrator” means the Administrator of the United States Environmental Protection Agency.
 * (3) The term “barrel” means forty-two United States gallons at sixty degrees Fahrenheit.
 * (4) The term “claim” means a demand in writing for a sum certain.
 * (5) The term “claimant” means any person who presents a claim for compensation under this chapter.
 * (6) The term “damages” means damages for injury or loss of natural resources as set forth in section 9607 (a) or 9611 (b) of this title.
 * (7) The term “drinking water supply” means any raw or finished water source that is or may be used by a public water system (as defined in the Safe Drinking Water Act [42 U.S.C. 300f et seq.]) or as drinking water by one or more individuals.
 * (8) The term “environment” means
 * (A) the navigable waters, the waters of the contiguous zone, and the ocean waters of which the natural resources are under the exclusive management authority of the United States under the Magnuson-Stevens Fishery Conservation and Management Act [16 U.S.C. 1801 et seq.], and
 * (B) any other surface water, ground water, drinking water supply, land surface or subsurface strata, or ambient air within the United States or under the jurisdiction of the United States.
 * (9) The term “facility” means
 * (A) any building, structure, installation, equipment, pipe or pipeline (including any pipe into a sewer or publicly owned treatment works), well, pit, pond, lagoon, impoundment, ditch, landfill, storage container, motor vehicle, rolling stock, or aircraft, or
 * (B) any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located; but does not include any consumer product in consumer use or any vessel.
 * (10) The term “federally permitted release” means (A) discharges in compliance with a permit under section 402 of the Federal Water Pollution Control Act 33 U.S.C. 1342, (B) discharges resulting from circumstances identified and reviewed and made part of the public record with respect to a permit issued or modified under section 402 of the Federal Water Pollution Control Act and subject to a condition of such permit, (C) continuous or anticipated intermittent discharges from a point source, identified in a permit or permit application under section 402 of the Federal Water Pollution Control Act, which are caused by events occurring within the scope of relevant operating or treatment systems, (D) discharges in compliance with a legally enforceable permit under section 404 of the Federal Water Pollution Control Act [33 U.S.C. 1344], (E) releases in compliance with a legally enforceable final permit issued pursuant to section 3005(a) through (d) of the Solid Waste Disposal Act [42 U.S.C. 6925 (a)–(d)] from a hazardous waste treatment, storage, or disposal facility when such permit specifically identifies the hazardous substances and makes such substances subject to a standard of practice, control procedure or bioassay limitation or condition, or other control on the hazardous substances in such releases, (F) any release in compliance with a legally enforceable permit issued under section 1412 of title 33 of [1] section 1413 of title 33, (G) any injection of fluids authorized under Federal underground injection control programs or State programs submitted for Federal approval (and not disapproved by the Administrator of the Environmental Protection Agency) pursuant to part C of the Safe Drinking Water Act [42 U.S.C. 300h et seq.], (H) any emission into the air subject to a permit or control regulation under section 111 [42 U.S.C. 7411], section 112 [42 U.S.C. 7412], title I part C [42 U.S.C. 7470 et seq.], title I part D [42 U.S.C. 7501 et seq.], or State implementation plans submitted in accordance with section 110 of the Clean Air Act [42 U.S.C. 7410] (and not disapproved by the Administrator of the Environmental Protection Agency), including any schedule or waiver granted, promulgated, or approved under these sections, (I) any injection of fluids or other materials authorized under applicable State law (i) for the purpose of stimulating or treating wells for the production of crude oil, natural gas, or water, (ii) for the purpose of secondary, tertiary, or other enhanced recovery of crude oil or natural gas, or (iii) which are brought to the surface in conjunction with the production of crude oil or natural gas and which are reinjected, (J) the introduction of any pollutant into a publicly owned treatment works when such pollutant is specified in and in compliance with applicable pretreatment standards of section 307(b) or (c) of the Clean Water Act [33 U.S.C. 1317 (b), (c)] and enforceable requirements in a pretreatment program submitted by a State or municipality for Federal approval under section 402 of such Act [33 U.S.C. 1342], and (K) any release of source, special nuclear, or byproduct material, as those terms are defined in the Atomic Energy Act of 1954 [42 U.S.C. 2011 et seq.], in compliance with a legally enforceable license, permit, regulation, or order issued pursuant to the Atomic Energy Act of 1954.
 * (11) The term “Fund” or “Trust Fund” means the Hazardous Substance Superfund established by section 9507 of title 26.
 * (12) The term “ground water” means water in a saturated zone or stratum beneath the surface of land or water.
 * (13) The term “guarantor” means any person, other than the owner or operator, who provides evidence of financial responsibility for an owner or operator under this chapter.
 * (14) The term “hazardous substance” means
 * (A) any substance designated pursuant to section 311(b)(2)(A) of the Federal Water Pollution Control Act [33 U.S.C. 1321 (b)(2)(A)],
 * (B) any element, compound, mixture, solution, or substance designated pursuant to section 9602 of this title,
 * (C) any hazardous waste having the characteristics identified under or listed pursuant to section 3001 of the Solid Waste Disposal Act 42 U.S.C. 6921 (but not including any waste the regulation of which under the Solid Waste Disposal Act [42 U.S.C. 6901 et seq.] has been suspended by Act of Congress),
 * (D) any toxic pollutant listed under section 307(a) of the Federal Water Pollution Control Act 33 U.S.C. 1317 (a),
 * (E) any hazardous air pollutant listed under section 112 of the Clean Air Act 42 U.S.C. 7412, and
 * (F) any imminently hazardous chemical substance or mixture with respect to which the Administrator has taken action pursuant to section 7 of the Toxic Substances Control Act 15 U.S.C. 2606. The term does not include petroleum, including crude oil or any fraction thereof which is not otherwise specifically listed or designated as a hazardous substance under subparagraphs (A) through (F) of this paragraph, and the term does not include natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas).
 * (15) The term “navigable waters” or “navigable waters of the United States” means the waters of the United States, including the territorial seas.
 * (16) The term “natural resources” means land, fish, wildlife, biota, air, water, ground water, drinking water supplies, and other such resources belonging to, managed by, held in trust by, appertaining to, or otherwise controlled by the United States (including the resources of the fishery conservation zone established by the Magnuson-Stevens Fishery Conservation and Management Act [16 U.S.C. 1801 et seq.]), any State or local government, any foreign government, any Indian tribe, or, if such resources are subject to a trust restriction on alienation, any member of an Indian tribe.
 * (17) The term “offshore facility” means any facility of any kind located in, on, or under, any of the navigable waters of the United States, and any facility of any kind which is subject to the jurisdiction of the United States and is located in, on, or under any other waters, other than a vessel or a public vessel.
 * (18) The term “onshore facility” means any facility (including, but not limited to, motor vehicles and rolling stock) of any kind located in, on, or under, any land or nonnavigable waters within the United States.
 * (19) The term “otherwise subject to the jurisdiction of the United States” means subject to the jurisdiction of the United States by virtue of United States citizenship, United States vessel documentation or numbering, or as provided by international agreement to which the United States is a party.
 * (20)
 * (A) The term “owner or operator” means
 * (i) in the case of a vessel, any person owning, operating, or chartering by demise, such vessel,
 * (ii) in the case of an onshore facility or an offshore facility, any person owning or operating such facility, and
 * (iii) in the case of any facility, title or control of which was conveyed due to bankruptcy, foreclosure, tax delinquency, abandonment, or similar means to a unit of State or local government, any person who owned, operated, or otherwise controlled activities at such facility immediately beforehand. Such term does not include a person, who, without participating in the management of a vessel or facility, holds indicia of ownership primarily to protect his security interest in the vessel or facility.
 * (B) In the case of a hazardous substance which has been accepted for transportation by a common or contract carrier and except as provided in section 9607 (a)(3) or (4) of this title,
 * (i) the term “owner or operator” shall mean such common carrier or other bona fide for hire carrier acting as an independent contractor during such transportation,
 * (ii) the shipper of such hazardous substance shall not be considered to have caused or contributed to any release during such transportation which resulted solely from circumstances or conditions beyond his control.
 * (C) In the case of a hazardous substance which has been delivered by a common or contract carrier to a disposal or treatment facility and except as provided in section 9607 (a)(3) or (4) of this title,
 * (i) the term “owner or operator” shall not include such common or contract carrier, and
 * (ii) such common or contract carrier shall not be considered to have caused or contributed to any release at such disposal or treatment facility resulting from circumstances or conditions beyond its control.
 * (D) The term “owner or operator” does not include a unit of State or local government which acquired ownership or control involuntarily through bankruptcy, tax delinquency, abandonment, or other circumstances in which the government involuntarily acquires title by virtue of its function as sovereign. The exclusion provided under this paragraph shall not apply to any State or local government which has caused or contributed to the release or threatened release of a hazardous substance from the facility, and such a State or local government shall be subject to the provisions of this chapter in the same manner and to the same extent, both procedurally and substantively, as any nongovernmental entity, including liability under section 9607 of this title.
 * (E) Exclusion of lenders not participants in management.—
 * (i) Indicia of ownership to protect security.— The term “owner or operator” does not include a person that is a lender that, without participating in the management of a vessel or facility, holds indicia of ownership primarily to protect the security interest of the person in the vessel or facility.
 * (ii) Foreclosure.— The term “owner or operator” does not include a person that is a lender that did not participate in management of a vessel or facility prior to foreclosure, notwithstanding that the person—
 * (I) forecloses on the vessel or facility; and
 * (II) after foreclosure, sells, re-leases (in the case of a lease finance transaction), or liquidates the vessel or facility, maintains business activities, winds up operations, undertakes a response action under section 9607 (d)(1) of this title or under the direction of an on-scene coordinator appointed under the National Contingency Plan, with respect to the vessel or facility, or takes any other measure to preserve, protect, or prepare the vessel or facility prior to sale or disposition,
 * if the person seeks to sell, re-lease (in the case of a lease finance transaction), or otherwise divest the person of the vessel or facility at the earliest practicable, commercially reasonable time, on commercially reasonable terms, taking into account market conditions and legal and regulatory requirements.
 * (F) Participation in management.— For purposes of subparagraph (E)—
 * (i) the term “participate in management”—
 * (I) means actually participating in the management or operational affairs of a vessel or facility; and
 * (II) does not include merely having the capacity to influence, or the unexercised right to control, vessel or facility operations;
 * (ii) a person that is a lender and that holds indicia of ownership primarily to protect a security interest in a vessel or facility shall be considered to participate in management only if, while the borrower is still in possession of the vessel or facility encumbered by the security interest, the person—
 * (I) exercises decisionmaking control over the environmental compliance related to the vessel or facility, such that the person has undertaken responsibility for the hazardous substance handling or disposal practices related to the vessel or facility; or
 * (II) exercises control at a level comparable to that of a manager of the vessel or facility, such that the person has assumed or manifested responsibility—
 * (aa) for the overall management of the vessel or facility encompassing day-to-day decisionmaking with respect to environmental compliance; or
 * (bb) over all or substantially all of the operational functions (as distinguished from financial or administrative functions) of the vessel or facility other than the function of environmental compliance;
 * (iii) the term “participate in management” does not include performing an act or failing to act prior to the time at which a security interest is created in a vessel or facility; and
 * (iv) the term “participate in management” does not include—
 * (I) holding a security interest or abandoning or releasing a security interest;
 * (II) including in the terms of an extension of credit, or in a contract or security agreement relating to the extension, a covenant, warranty, or other term or condition that relates to environmental compliance;
 * (III) monitoring or enforcing the terms and conditions of the extension of credit or security interest;
 * (IV) monitoring or undertaking 1 or more inspections of the vessel or facility;
 * (V) requiring a response action or other lawful means of addressing the release or threatened release of a hazardous substance in connection with the vessel or facility prior to, during, or on the expiration of the term of the extension of credit;
 * (VI) providing financial or other advice or counseling in an effort to mitigate, prevent, or cure default or diminution in the value of the vessel or facility;
 * (VII) restructuring, renegotiating, or otherwise agreeing to alter the terms and conditions of the extension of credit or security interest, exercising forbearance;
 * (VIII) exercising other remedies that may be available under applicable law for the breach of a term or condition of the extension of credit or security agreement; or
 * (IX) conducting a response action under section 9607 (d) of this title or under the direction of an on-scene coordinator appointed under the National Contingency Plan,
 * if the actions do not rise to the level of participating in management (within the meaning of clauses (i) and (ii)).
 * (G) Other terms.— As used in this chapter:
 * (i) Extension of credit.— The term “extension of credit” includes a lease finance transaction—
 * (I) in which the lessor does not initially select the leased vessel or facility and does not during the lease term control the daily operations or maintenance of the vessel or facility; or
 * (II) that conforms with regulations issued by the appropriate Federal banking agency or the appropriate State bank supervisor (as those terms are defined in section 1813 of title 12 [2] or with regulations issued by the National Credit Union Administration Board, as appropriate.
 * (ii) Financial or administrative function.— The term “financial or administrative function” includes a function such as that of a credit manager, accounts payable officer, accounts receivable officer, personnel manager, comptroller, or chief financial officer, or a similar function.
 * (iii) Foreclosure; foreclose.— The terms “foreclosure” and “foreclose” mean, respectively, acquiring, and to acquire, a vessel or facility through—
 * (I)
 * (aa) purchase at sale under a judgment or decree, power of sale, or nonjudicial foreclosure sale;
 * (bb) a deed in lieu of foreclosure, or similar conveyance from a trustee; or
 * (cc) repossession,

if the vessel or facility was security for an extension of credit previously contracted;
 * (II) conveyance pursuant to an extension of credit previously contracted, including the termination of a lease agreement; or
 * (III) any other formal or informal manner by which the person acquires, for subsequent disposition, title to or possession of a vessel or facility in order to protect the security interest of the person.
 * (iv) Lender.— The term “lender” means—
 * (I) an insured depository institution (as defined in section 1813 of title 12);
 * (II) an insured credit union (as defined in section 1752 of title 12);
 * (III) a bank or association chartered under the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.);
 * (IV) a leasing or trust company that is an affiliate of an insured depository institution;
 * (V) any person (including a successor or assignee of any such person) that makes a bona fide extension of credit to or takes or acquires a security interest from a nonaffiliated person;
 * (VI) the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Federal Agricultural Mortgage Corporation, or any other entity that in a bona fide manner buys or sells loans or interests in loans;
 * (VII) a person that insures or guarantees against a default in the repayment of an extension of credit, or acts as a surety with respect to an extension of credit, to a nonaffiliated person; and
 * (VIII) a person that provides title insurance and that acquires a vessel or facility as a result of assignment or conveyance in the course of underwriting claims and claims settlement.
 * (v) Operational function.— The term “operational function” includes a function such as that of a facility or plant manager, operations manager, chief operating officer, or chief executive officer.
 * (vi) Security interest.— The term “security interest” includes a right under a mortgage, deed of trust, assignment, judgment lien, pledge, security agreement, factoring agreement, or lease and any other right accruing to a person to secure the repayment of money, the performance of a duty, or any other obligation by a nonaffiliated person.
 * (21) The term “person” means an individual, firm, corporation, association, partnership, consortium, joint venture, commercial entity, United States Government, State, municipality, commission, political subdivision of a State, or any interstate body.
 * (22) The term “release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment (including the abandonment or discarding of barrels, containers, and other closed receptacles containing any hazardous substance or pollutant or contaminant), but excludes
 * (A) any release which results in exposure to persons solely within a workplace, with respect to a claim which such persons may assert against the employer of such persons,
 * (B) emissions from the engine exhaust of a motor vehicle, rolling stock, aircraft, vessel, or pipeline pumping station engine,
 * (C) release of source, byproduct, or special nuclear material from a nuclear incident, as those terms are defined in the Atomic Energy Act of 1954 [42 U.S.C. 2011 et seq.], if such release is subject to requirements with respect to financial protection established by the Nuclear Regulatory Commission under section 170 of such Act 42 U.S.C. 2210, or, for the purposes of section 9604 of this title or any other response action, any release of source byproduct, or special nuclear material from any processing site designated under section 7912 (a)(1) or 7942 (a) of this title, and
 * (D) the normal application of fertilizer.
 * (23) The terms “remove” or “removal” means the cleanup or removal of released hazardous substances from the environment, such actions as may be necessary taken in the event of the threat of release of hazardous substances into the environment, such actions as may be necessary to monitor, assess, and evaluate the release or threat of release of hazardous substances, the disposal of removed material, or the taking of such other actions as may be necessary to prevent, minimize, or mitigate damage to the public health or welfare or to the environment, which may otherwise result from a release or threat of release. The term includes, in addition, without being limited to, security fencing or other measures to limit access, provision of alternative water supplies, temporary evacuation and housing of threatened individuals not otherwise provided for, action taken under section 9604 (b) of this title, and any emergency assistance which may be provided under the Disaster Relief and Emergency Assistance Act [42 U.S.C. 5121 et seq.].
 * (24) The terms “remedy” or “remedial action” means those actions consistent with permanent remedy taken instead of or in addition to removal actions in the event of a release or threatened release of a hazardous substance into the environment, to prevent or minimize the release of hazardous substances so that they do not migrate to cause substantial danger to present or future public health or welfare or the environment. The term includes, but is not limited to, such actions at the location of the release as storage, confinement, perimeter protection using dikes, trenches, or ditches, clay cover, neutralization, cleanup of released hazardous substances and associated contaminated materials, recycling or reuse, diversion, destruction, segregation of reactive wastes, dredging or excavations, repair or replacement of leaking containers, collection of leachate and runoff, onsite treatment or incineration, provision of alternative water supplies, and any monitoring reasonably required to assure that such actions protect the public health and welfare and the environment. The term includes the costs of permanent relocation of residents and businesses and community facilities where the President determines that, alone or in combination with other measures, such relocation is more cost-effective than and environmentally preferable to the transportation, storage, treatment, destruction, or secure disposition offsite of hazardous substances, or may otherwise be necessary to protect the public health or welfare; the term includes offsite transport and offsite storage, treatment, destruction, or secure disposition of hazardous substances and associated contaminated materials.
 * (25) The terms “respond” or “response” means [3] remove, removal, remedy, and remedial action;,[4] all such terms (including the terms “removal” and “remedial action”) include enforcement activities related thereto.
 * (26) The terms “transport” or “transportation” means [3] the movement of a hazardous substance by any mode, including a hazardous liquid pipeline facility (as defined in section 60101 (a) of title 49), and in the case of a hazardous substance which has been accepted for transportation by a common or contract carrier, the term “transport” or “transportation” shall include any stoppage in transit which is temporary, incidental to the transportation movement, and at the ordinary operating convenience of a common or contract carrier, and any such stoppage shall be considered as a continuity of movement and not as the storage of a hazardous substance.
 * (27) The terms “United States” and “State” include the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the United States Virgin Islands, the Commonwealth of the Northern Marianas, and any other territory or possession over which the United States has jurisdiction.
 * (28) The term “vessel” means every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water.
 * (29) The terms “disposal”, “hazardous waste”, and “treatment” shall have the meaning provided in section 1004 of the Solid Waste Disposal Act [42 U.S.C. 6903].
 * (30) The terms “territorial sea” and “contiguous zone” shall have the meaning provided in section 502 of the Federal Water Pollution Control Act [33 U.S.C. 1362].
 * (31) The term “national contingency plan” means the national contingency plan published under section 311(c) [5] of the Federal Water Pollution Control Act or revised pursuant to section 9605 of this title.
 * (32) The terms “liable” or “liability” under this subchapter shall be construed to be the standard of liability which obtains under section 311 of the Federal Water Pollution Control Act [33 U.S.C. 1321].
 * (33) The term “pollutant or contaminant” shall include, but not be limited to, any element, substance, compound, or mixture, including disease-causing agents, which after release into the environment and upon exposure, ingestion, inhalation, or assimilation into any organism, either directly from the environment or indirectly by ingestion through food chains, will or may reasonably be anticipated to cause death, disease, behavioral abnormalities, cancer, genetic mutation, physiological malfunctions (including malfunctions in reproduction) or physical deformations, in such organisms or their offspring; except that the term “pollutant or contaminant” shall not include petroleum, including crude oil or any fraction thereof which is not otherwise specifically listed or designated as a hazardous substance under subparagraphs (A) through (F) of paragraph (14) and shall not include natural gas, liquefied natural gas, or synthetic gas of pipeline quality (or mixtures of natural gas and such synthetic gas).
 * (34) The term “alternative water supplies” includes, but is not limited to, drinking water and household water supplies.
 * (35)
 * (A) The term “contractual relationship”, for the purpose of section 9607 (b)(3) of this title, includes, but is not limited to, land contracts, deeds, easements, leases, or other instruments transferring title or possession, unless the real property on which the facility concerned is located was acquired by the defendant after the disposal or placement of the hazardous substance on, in, or at the facility, and one or more of the circumstances described in clause (i), (ii), or (iii) is also established by the defendant by a preponderance of the evidence:
 * (i) At the time the defendant acquired the facility the defendant did not know and had no reason to know that any hazardous substance which is the subject of the release or threatened release was disposed of on, in, or at the facility.
 * (ii) The defendant is a government entity which acquired the facility by escheat, or through any other involuntary transfer or acquisition, or through the exercise of eminent domain authority by purchase or condemnation.
 * (iii) The defendant acquired the facility by inheritance or bequest.
 * In addition to establishing the foregoing, the defendant must establish that the defendant has satisfied the requirements of section 9607 (b)(3)(a) and (b) of this title, provides full cooperation, assistance, and facility access to the persons that are authorized to conduct response actions at the facility (including the cooperation and access necessary for the installation, integrity, operation, and maintenance of any complete or partial response action at the facility), is in compliance with any land use restrictions established or relied on in connection with the response action at a facility, and does not impede the effectiveness or integrity of any institutional control employed at the facility in connection with a response action.
 * (B) Reason to know.—
 * (i) All appropriate inquiries.— To establish that the defendant had no reason to know of the matter described in subparagraph (A)(i), the defendant must demonstrate to a court that—
 * (I) on or before the date on which the defendant acquired the facility, the defendant carried out all appropriate inquiries, as provided in clauses (ii) and (iv), into the previous ownership and uses of the facility in accordance with generally accepted good commercial and customary standards and practices; and
 * (II) the defendant took reasonable steps to—
 * (aa) stop any continuing release;
 * (bb) prevent any threatened future release; and
 * (cc) prevent or limit any human, environmental, or natural resource exposure to any previously released hazardous substance.
 * (ii) Standards and practices.— Not later than 2 years after January 11, 2002, the Administrator shall by regulation establish standards and practices for the purpose of satisfying the requirement to carry out all appropriate inquiries under clause (i).
 * (iii) Criteria.— In promulgating regulations that establish the standards and practices referred to in clause (ii), the Administrator shall include each of the following:
 * (I) The results of an inquiry by an environmental professional.
 * (II) Interviews with past and present owners, operators, and occupants of the facility for the purpose of gathering information regarding the potential for contamination at the facility.
 * (III) Reviews of historical sources, such as chain of title documents, aerial photographs, building department records, and land use records, to determine previous uses and occupancies of the real property since the property was first developed.
 * (IV) Searches for recorded environmental cleanup liens against the facility that are filed under Federal, State, or local law.
 * (V) Reviews of Federal, State, and local government records, waste disposal records, underground storage tank records, and hazardous waste handling, generation, treatment, disposal, and spill records, concerning contamination at or near the facility.
 * (VI) Visual inspections of the facility and of adjoining properties.
 * (VII) Specialized knowledge or experience on the part of the defendant.
 * (VIII) The relationship of the purchase price to the value of the property, if the property was not contaminated.
 * (IX) Commonly known or reasonably ascertainable information about the property.
 * (X) The degree of obviousness of the presence or likely presence of contamination at the property, and the ability to detect the contamination by appropriate investigation.
 * (iv) Interim standards and practices.—
 * (I) Property purchased before may 31, 1997.— With respect to property purchased before May 31, 1997, in making a determination with respect to a defendant described in clause (i), a court shall take into account—
 * (aa) any specialized knowledge or experience on the part of the defendant;
 * (bb) the relationship of the purchase price to the value of the property, if the property was not contaminated;
 * (cc) commonly known or reasonably ascertainable information about the property;
 * (dd) the obviousness of the presence or likely presence of contamination at the property; and
 * (ee) the ability of the defendant to detect the contamination by appropriate inspection.
 * (II) Property purchased on or after may 31, 1997.— With respect to property purchased on or after May 31, 1997, and until the Administrator promulgates the regulations described in clause (ii), the procedures of the American Society for Testing and Materials, including the document known as “Standard E1527–97”, entitled “Standard Practice for Environmental Site Assessment: Phase 1 Environmental Site Assessment Process”, shall satisfy the requirements in clause (i).
 * (v) Site inspection and title search.— In the case of property for residential use or other similar use purchased by a nongovernmental or noncommercial entity, a facility inspection and title search that reveal no basis for further investigation shall be considered to satisfy the requirements of this subparagraph.
 * (C) Nothing in this paragraph or in section 9607 (b)(3) of this title shall diminish the liability of any previous owner or operator of such facility who would otherwise be liable under this chapter. Notwithstanding this paragraph, if the defendant obtained actual knowledge of the release or threatened release of a hazardous substance at such facility when the defendant owned the real property and then subsequently transferred ownership of the property to another person without disclosing such knowledge, such defendant shall be treated as liable under section 9607 (a)(1) of this title and no defense under section 9607 (b)(3) of this title shall be available to such defendant.
 * (D) Nothing in this paragraph shall affect the liability under this chapter of a defendant who, by any act or omission, caused or contributed to the release or threatened release of a hazardous substance which is the subject of the action relating to the facility.
 * (36) The term “Indian tribe” means any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village but not including any Alaska Native regional or village corporation, which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.
 * (37)
 * (A) The term “service station dealer” means any person—
 * (i) who owns or operates a motor vehicle service station, filling station, garage, or similar retail establishment engaged in the business of selling, repairing, or servicing motor vehicles, where a significant percentage of the gross revenue of the establishment is derived from the fueling, repairing, or servicing of motor vehicles, and
 * (ii) who accepts for collection, accumulation, and delivery to an oil recycling facility, recycled oil that
 * (I) has been removed from the engine of a light duty motor vehicle or household appliances by the owner of such vehicle or appliances, and
 * (II) is presented, by such owner, to such person for collection, accumulation, and delivery to an oil recycling facility.
 * (B) For purposes of section 9614 (c) of this title, the term “service station dealer” shall, notwithstanding the provisions of subparagraph (A), include any government agency that establishes a facility solely for the purpose of accepting recycled oil that satisfies the criteria set forth in subclauses (I) and (II) of subparagraph (A)(ii), and, with respect to recycled oil that satisfies the criteria set forth in subclauses (I) and (II), owners or operators of refuse collection services who are compelled by State law to collect, accumulate, and deliver such oil to an oil recycling facility.
 * (C) The President shall promulgate regulations regarding the determination of what constitutes a significant percentage of the gross revenues of an establishment for purposes of this paragraph.
 * (38) The term “incineration vessel” means any vessel which carries hazardous substances for the purpose of incineration of such substances, so long as such substances or residues of such substances are on board.
 * (39) Brownfield site.—
 * (A) In general.— The term “brownfield site” means real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant.
 * (B) Exclusions.— The term “brownfield site” does not include—
 * (i) a facility that is the subject of a planned or ongoing removal action under this subchapter;
 * (ii) a facility that is listed on the National Priorities List or is proposed for listing;
 * (iii) a facility that is the subject of a unilateral administrative order, a court order, an administrative order on consent or judicial consent decree that has been issued to or entered into by the parties under this chapter;
 * (iv) a facility that is the subject of a unilateral administrative order, a court order, an administrative order on consent or judicial consent decree that has been issued to or entered into by the parties, or a facility to which a permit has been issued by the United States or an authorized State under the Solid Waste Disposal Act (42 U.S.C. 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. 1321) [33 U.S.C. § 1251 et seq.], the Toxic Substances Control Act (15 U.S.C. 2601 et seq.), or the Safe Drinking Water Act (42 U.S.C. 300f et seq.);
 * (v) a facility that—
 * (I) is subject to corrective action under section 3004(u) or 3008(h) of the Solid Waste Disposal Act (42 U.S.C. 6924 (u), 6928 (h)); and
 * (II) to which a corrective action permit or order has been issued or modified to require the implementation of corrective measures;
 * (vi) a land disposal unit with respect to which—
 * (I) a closure notification under subtitle C of the Solid Waste Disposal Act (42 U.S.C. 6921 et seq.) has been submitted; and
 * (II) closure requirements have been specified in a closure plan or permit;
 * (vii) a facility that is subject to the jurisdiction, custody, or control of a department, agency, or instrumentality of the United States, except for land held in trust by the United States for an Indian tribe;
 * (viii) a portion of a facility—
 * (I) at which there has been a release of polychlorinated biphenyls; and
 * (II) that is subject to remediation under the Toxic Substances Control Act (15 U.S.C. 2601 et seq.); or
 * (ix) a portion of a facility, for which portion, assistance for response activity has been obtained under subtitle I of the Solid Waste Disposal Act (42 U.S.C. 6991 et seq.) from the Leaking Underground Storage Tank Trust Fund established under section 9508 of title 26.
 * (C) Site-by-site determinations.— Notwithstanding subparagraph (B) and on a site-by-site basis, the President may authorize financial assistance under section 9604 (k) of this title to an eligible entity at a site included in clause (i), (iv), (v), (vi), (viii), or (ix) of subparagraph (B) if the President finds that financial assistance will protect human health and the environment, and either promote economic development or enable the creation of, preservation of, or addition to parks, greenways, undeveloped property, other recreational property, or other property used for nonprofit purposes.
 * (D) Additional areas.— For the purposes of section 9604 (k) of this title, the term “brownfield site” includes a site that—
 * (i) meets the definition of “brownfield site” under subparagraphs (A) through (C); and
 * (ii)
 * (I) is contaminated by a controlled substance (as defined in section 802 of title 21);
 * (II)
 * (aa) is contaminated by petroleum or a petroleum product excluded from the definition of “hazardous substance” under this section; and
 * (bb) is a site determined by the Administrator or the State, as appropriate, to be—
 * (AA) of relatively low risk, as compared with other petroleum-only sites in the State; and
 * (BB) a site for which there is no viable responsible party and which will be assessed, investigated, or cleaned up by a person that is not potentially liable for cleaning up the site; and
 * (cc) is not subject to any order issued under section 9003(h) of the Solid Waste Disposal Act (42 U.S.C. 6991b (h)); or
 * (III) is mine-scarred land.
 * (40) Bona fide prospective purchaser.— The term “bona fide prospective purchaser” means a person (or a tenant of a person) that acquires ownership of a facility after January 11, 2002, and that establishes each of the following by a preponderance of the evidence:
 * (A) Disposal prior to acquisition.— All disposal of hazardous substances at the facility occurred before the person acquired the facility.
 * (B) Inquiries.—
 * (i) In general.— The person made all appropriate inquiries into the previous ownership and uses of the facility in accordance with generally accepted good commercial and customary standards and practices in accordance with clauses (ii) and (iii).
 * (ii) Standards and practices.— The standards and practices referred to in clauses (ii) and (iv) of paragraph (35)(B) shall be considered to satisfy the requirements of this subparagraph.
 * (iii) Residential use.— In the case of property in residential or other similar use at the time of purchase by a nongovernmental or noncommercial entity, a facility inspection and title search that reveal no basis for further investigation shall be considered to satisfy the requirements of this subparagraph.
 * (C) Notices.— The person provides all legally required notices with respect to the discovery or release of any hazardous substances at the facility.
 * (D) Care.— The person exercises appropriate care with respect to hazardous substances found at the facility by taking reasonable steps to—
 * (i) stop any continuing release;
 * (ii) prevent any threatened future release; and
 * (iii) prevent or limit human, environmental, or natural resource exposure to any previously released hazardous substance.
 * (E) Cooperation, assistance, and access.— The person provides full cooperation, assistance, and access to persons that are authorized to conduct response actions or natural resource restoration at a vessel or facility (including the cooperation and access necessary for the installation, integrity, operation, and maintenance of any complete or partial response actions or natural resource restoration at the vessel or facility).
 * (F) Institutional control.— The person—
 * (i) is in compliance with any land use restrictions established or relied on in connection with the response action at a vessel or facility; and
 * (ii) does not impede the effectiveness or integrity of any institutional control employed at the vessel or facility in connection with a response action.
 * (G) Requests; subpoenas.— The person complies with any request for information or administrative subpoena issued by the President under this chapter.
 * (H) No affiliation.— The person is not—
 * (i) potentially liable, or affiliated with any other person that is potentially liable, for response costs at a facility through—
 * (I) any direct or indirect familial relationship; or
 * (II) any contractual, corporate, or financial relationship (other than a contractual, corporate, or financial relationship that is created by the instruments by which title to the facility is conveyed or financed or by a contract for the sale of goods or services); or
 * (ii) the result of a reorganization of a business entity that was potentially liable.
 * (41) Eligible response site.—
 * (A) In general.— The term “eligible response site” means a site that meets the definition of a brownfield site in subparagraphs (A) and (B) of paragraph (39), as modified by subparagraphs (B) and (C) of this paragraph.
 * (B) Inclusions.— The term “eligible response site” includes—
 * (i) notwithstanding paragraph (39)(B)(ix), a portion of a facility, for which portion assistance for response activity has been obtained under subtitle I of the Solid Waste Disposal Act (42 U.S.C. 6991 et seq.) from the Leaking Underground Storage Tank Trust Fund established under section 9508 of title 26; or
 * (ii) a site for which, notwithstanding the exclusions provided in subparagraph (C) or paragraph (39)(B), the President determines, on a site-by-site basis and after consultation with the State, that limitations on enforcement under section 9628 of this title at sites specified in clause (iv), (v), (vi) or (viii) of paragraph (39)(B) would be appropriate and will—
 * (I) protect human health and the environment; and
 * (II) promote economic development or facilitate the creation of, preservation of, or addition to a park, a greenway, undeveloped property, recreational property, or other property used for nonprofit purposes.
 * (C) Exclusions.— The term “eligible response site” does not include—
 * (i) a facility for which the President—
 * (I) conducts or has conducted a preliminary assessment or site inspection; and
 * (II) after consultation with the State, determines or has determined that the site obtains a preliminary score sufficient for possible listing on the National Priorities List, or that the site otherwise qualifies for listing on the National Priorities List; unless the President has made a determination that no further Federal action will be taken; or
 * (ii) facilities that the President determines warrant particular consideration as identified by regulation, such as sites posing a threat to a sole-source drinking water aquifer or a sensitive ecosystem.


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158 he was accustomed to obey or to be obeyed. He was thus naturally led to consider as the best method of government that passive obedience which, as a military chief, he used to exact from his subordinates. This system succeeded in the struggle with the French; why then should it fail when applied to the administration? Of a hasty and petulant temper the new ruler of Haiti was as quick in forming a decision as in its execution; in consequence, he did not tolerate any discussion of his orders. Hence he ruled the State as he was wont to command his soldiers as an absolute master. As a matter of fact, his rule was not far removed from the despotism of the French. The various Governors-General never had shown any respect for civil or political liberty. They relied upon the army and knew no restraint. To their minds the rights of the people were of no account. Having from his earliest years lived in such an atmosphere it was hardly possible to expect to find in Dessalines a liberal-minded ruler. And the purely rudimentary knowledge of his subordinates made them incapable of tempering the dictatorial power intrusted to him. A few of his economic and financial combinations were of necessity imperfect. In course of time these mistakes might have been remedied; and civil as well as political liberty would have prevailed. But Dessalines's contemporaries were very hasty men; his lieutenants took umbrage at the very tyranny they had contributed to create; and as the news spread that the most important amongst them were about to be arrested, they plotted a conspiracy. The discontent which some of the administrative measures had provoked among the people was taken full advantage of. The insurrection broke out on the 8th of October in the neighborhood of Port-Salut in the Southern Department. The insurgents acknowledged Henri Christophe, who was then Commander-in-Chief of the Army, as their leader. Pétion joined the revolt and caused the defection of the troops under his command. Port-au-Prince ceased accordingly to acknowledge Dessalines's authority. The Emperor,

license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/


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Rh unaware of these events, had left Marchand, his capital, on October 15, en route for the South, where he was going to reestablish peace and order. On his way soldiers had been set by the conspirators; without the least suspicion of the trap set for him, he continued his way in full confidence, paying no heed to the warning which Colonel Léger, one of his aides-de-camp, gave him, as he was approaching Pont Rouge, at a short distance from Port-au-Prince, on the 17th of October, 1806. He did not realize the danger until he was completely surrounded on all sides. He tried to defend himself; but Garat, a young soldier, fired; Dessalines's horse fell to the ground. Charlotin Marcadieu, one of his aides-de-camp, hastened to his assistance. Just at that moment a volley of musketry was fired and Dessalines ceased to exist. Thus expired the liberator of Haiti, a victim of the sad customs of his time and of the very cause of liberty of which he had been the successful defender.


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The cries of "Liberty forever!" "Down with tyranny!" were heard on all sides as Dessalines fell dead. In the Western and Southern provinces, where the insurrection had inflamed the people's minds, the Emperor's death provoked a strong reaction against the political regime he had established. The discipline of the army felt the effect of this reaction; soldiers deserted their regiments. And the citizens seemed to think that there was no longer any restraint to their will. There was but little show of authority and it looked as though license had replaced Dessalines's absolutism. This state of affairs was far from being satisfying to Christophe, who had become Chief of the Provisional Government. In reality he had the same ideas as Dessalines concerning the prerogatives of a ruler. Moreover, the insurrection had not had time to


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Gelpcke v. City of Dubuque

 * Gelpcke v. City of Dubuque (68 U.S. 175), ( 17 L.Ed. 520 ), ( 1 Wall. 175 )
 * Gelpcke v. City of Dubuque (68 U.S. 220), ( 17 L.Ed. 530 ), ( 1 Wall. 220 )

title: Gelpcke v. City of Dubuque


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Rh enter the Northern province, which was under his command; thus he was able to maintain the severe discipline which he had established there. Like his former chief, Christophe thought that for the time being absolute power was the only system possible in Haiti. Therefore, he intended to pursue the same plan of action which Dessalines had instituted. In consequence he was distrustful of the new ideas current in the Western and Southern provinces, where they were discussing the advisability of restricting the powers of the ruler of the country and of taking precautions against a possible restoration of tyranny. Fixing his suspicions upon the originators of this movement he cautiously remained with his army at Cap.

Alexandre Pétion was undoubtedly the leading spirit among the generals who were planning to limit the authority of the ruler of Haiti. Great was the contrast between the two men whom coming events were going to set at enmity one against the other. Pétion's father was a white Frenchman by the name of Sabès; he owed to the accident of his birth the advantage of a cultivated mind. Of a sickly constitution he was phlegmatic and easy-tempered; his tastes were simple and he was known for his kindness and his benevolence. Christophe, born and raised in slavery, was very little inclined to pity. Of a tall and muscular build, with bright and intelligent eyes as his most striking feature, he seemed the very embodiment of force. One of his defects was the love of ostentation; when he was a French general his home at Cap-Français was celebrated for its luxurious richness, and his mode of entertainment was pompous. He was of a sanguine and


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New York v. National Services Industries

On remand at, Summary judgment granted by, Complaint dismissed at New York v. Nat'l Serv. Indus., 380 F. Supp. 2d 122 (E.D.N.Y., 2005)

Appeal from the grant by United States District Court for the Eastern District of New York (Jacob Mishler, District Judge) of plaintiff's motion for summary judgment. New York v. Nat'l Servs. Indus., 134 F. Supp. 2d 275 (E.D.N.Y., 2001)

Vacated and remanded.

PEDRO MEDINA, Assistant Attorney General (Eliot Spitzer, Attorney General of the State of New York, Deon Nossel, Assistant Solicitor General, Gordon J. Johnson, Assistant Attorney General, on the brief), New York, NY for Plaintiff-Appellee.

PATRICIA T. BARMEYER, King & Spalding, LLP (Griffin B. Bell, Beverlee E. Silva, Lewis B. Jones, on the brief), Atlanta, GA for Defendant-Appellant.

William F. Krebs, Galland, Kharasch, Greenberg, Fellman & Swirsky, P.C., (Steven John Fellman, David K. Monroe, on the brief), Washington, D.C. for Amicus Curiae Textile Rental Services Association of America, Inc.

Jeffrey N. Martin, Hunton & Williams, Washington, D.C., (Eric J. Murdock, Henry V. Nickel, Douglas S. Burdin, Hunton & Williams, David S. Biderman, Jan S. Amundson, Washington, D.C., Steven Helm, Jo Lynn White, Scottsdale, AZ, on the brief), for Amici Curiae Allied Waste Industries, Inc., National Solid Wastes Management Association, and National Association of Manufacturers.

Before: WALKER, Chief Judge, LEVAL, and KATZMANN, Circuit Judges. Judge Leval concurs in the majority opinion and in a separate concurring opinion.


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User talk:99.69.174.191

Please do not add nonsense to Wikisource; it is considered vandalism. If you would like to experiment, use the sandbox. Thank you. George Orwell III (talk) 00:08, 29 September 2010 (UTC)

title: User talk:99.69.174.191


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New York v. National Services Industries/Opinion of the Court

[p683] JOHN M. WALKER, JR., Chief Judge:

New York State sued National Service Industries, Inc. Click for Enhanced Coverage Linking Searches("NSI") under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S.C. §§ 9601 et seq., to recover the costs of closure and remediation of the Blydenburg Landfill in Islip, New York. In granting summary judgment for New York, the District Court for the Eastern District of New York (Jacob Mishler, District Judge) applied the substantial continuity test for successor liability articulated in B.F. Goodrich v. Betkoski, 99 F.3d 505 (2d Cir. 1996), and held that NSI, which had purchased all of Serv-All Uniform Rental Corporation, Inc.'s ("Serv-All") assets, was the successor to Serv-All and was therefore responsible for Serv-All's CERCLA liability. See New York v. Nat'l Servs. Indus., 134 F. Supp.2d 275, 280-81 (E.D.N.Y. 2001). NSI appeals the grant of summary judgment in favor of New York on the basis that, among other reasons, Betkoski is no longer good law after the Supreme Court's decision in United States v. Bestfoods, 524 U.S. 51, 141 L. Ed. 2d 43, 118 S.C.t. 1876 (1998). We agree that, after Bestfoods, the substantial continuity test cannot be applied to determine successor liability under CERCLA.

BACKGROUND
Because our resolution of this appeal does not involve analysis of most of the underlying facts of this case, we provide only a sketch of the events which led to the present suit and direct those who may be interested in greater detail to the opinion below. See Nat'l Servs. Indus., 134 F. Supp.2d at 276-77.

From 1962 to 1988, Serv-All operated an industrial garment rental service. Id. at 276. As part of its business, it dry cleaned garments at a facility that was owned separately by Serv-All's two principals. In June 1978, Serv-All arranged for the disposal of several 55-gallon drums of liquid waste that contained perchloroethylene ("PCE"), a solvent used in the dry-cleaning process. The drums were deposited at the Blydenburgh Landfill in Islip, New York. In 1983 the landfill was listed in the New York Registry of Hazardous Waste Sites and in 1987 it was added to the federal National Priority List of contaminated sites. As of September 13, 2001, New York had spent at least $ 10,894,271 to clean up the landfill. The parties agree that because Serv-All arranged for disposal of wastes at the landfill, it is "potentially responsible" for the cost of cleaning up the landfill.

In 1988, NSI (then known as "Initial Service Investments Click for Enhanced Coverage Linking Searches") entered into an "Asset Sale Agreement," whereby it agreed to purchase Serv-All's customer contracts, customer lists, service inventory, accounts receivable, trucks, insulated jackets bearing the name Serv-All and the right to use or retire Serv-All's name. Id. at 278-79. Serv-All warranted that the asset transfer would be "sufficient to meet the needs" of Serv-All's customers. The sale price was based on Serv-All's revenues as an ongoing operation, as determined by the weekly revenues for the six weeks preceding and following the purchase. The purchase price was approximately $ 2,229,000. The owners of Serv-All covenanted that they would not compete with NSI for seven years.

[p684] On the date of the purchase, Serv-All adopted a plan of liquidation, which it carried out shortly thereafter. Id. at 279. NSI tried to make the transition from Serv-All to NSI as seamless as possible by employing the Serv-All drivers, using trucks which still bore the name Serv-All, using Serv-All on its letterhead and taking over the Serv-All telephone number. Id.

The district court held that "NSI's operations were a substantial continuation of Serv-All's business, and thus, NSI is subject to successor liability for Serv-All's environmental infractions." Id. at 280-81. In particular, the district court held that NSI was liable under CERCLA for the clean-up cost at the Blydenburgh Landfill. Id.

DISCUSSION
We are faced with the question of whether, in the context of CERCLA, the substantial continuity rule for successor liability that we adopted in Betkoski remains good law after the Supreme Court's decision in Bestfoods. We hold that it does not.

CERCLA makes any "person" who is the present or past owner or operator of a contaminated facility or a generator or transporter of the hazardous substances that pollute a facility, liable for the cost of cleaning up the facility. 42 U.S.C. § 9607 (a). "Person" is defined by CERCLA to include corporations and other business organizations. See id. § 9601(20)-(21). However, CERCLA does not provide rules for when corporations that are related to the responsible corporation should be held liable.

In the instant case, as it was in Betkoski, the question is whether a corporation that purchased the assets of a company liable for environmental response costs under CERCLA should be held liable for those same costs as a successor corporation. In Bestfoods, the question was somewhat different: it asked when a parent corporation should be held responsible for the CERCLA liabilities of its subsidiary. Bestfoods, 524 U.S. at 55. Because the analysis of parent-subsidiary liability in Bestfoods bears on our analysis of successor liability here, we consider whether the rule of successor liability we adopted in Betkoski is consistent with the Supreme Court's analysis in Bestfoods.

A. Bestfoods
Bestfoods involved an effort by the United States to recover under CERCLA the cost of remediating a facility near Muskegon, Michigan. Id. at 57-58. In 1957, Ott Chemical Company had begun to manufacture chemicals at the facility. Id. at 56. In 1965, the Bestfoods corporation (then known as CPC International, Inc.), created a subsidiary corporation that purchased Ott Chemical. The subsidiary corporation (also called Ott Chemical) continued to manufacture chemicals until 1972, when Bestfoods sold it to an unrelated company. Id. The district court held that Bestfoods was liable under CERCLA because it had "operated" the facility through its subsidiary. CPC Int'l, Inc. v. Aerojet-Gen. Corp., 777 F. Supp. 549, 572 (W.D. Mich. 1991). In particular, the district court reasoned that Bestfoods had operated the facility through its subsidiary because it had selected the subsidiary's board and populated its executive ranks with Bestfoods officials. Id. at 573. The Sixth Circuit reversed en banc. United States v. Cordova Chem. Co., 113 F.3d 572 (1997). It held, seven judges to six, that a parent corporation could only be liable for the actions of its subsidiary if the state common law rules for piercing the corporate veil were met or if the parent had directly [p685]  participated in the operation of the facility. Id. at 580.

The Supreme Court vacated the circuit's en banc opinion and remanded. The Court held that "CERCLA is [] like many another congressional enactments in giving no indication that 'the entire corpus of state corporation law is to be replaced simply because a plaintiff's cause of action is based upon a federal statute.'" Bestfoods, 524 U.S. at 63 (quoting Burks v. Lasker, 441 U.S. 471, 478, 60 L. Ed. 2d 404, 99 S.C.t. 1831 (1979)). The "failure of [CERCLA] to speak to a matter as fundamental as the liability implications of corporate ownership demands application of the rule that 'in order to abrogate a common-law principle, the statute must speak directly to the question addressed by the common law.'" Id. (quoting United States v. Texas, 507 U.S. 529, 534, 123 L. Ed. 2d 245, 113 S.C.t. 1631 (1993)). The Supreme Court rejected the district court's test for a parent corporation's derivative liability because that test "disregarded entirely . . . time-honored common law rule[s]." Id. at 70.

B. Betkoski and the Substantial Continuity Test
In considering the substantial continuity test, we take from Bestfoods the principle that when determining whether liability under CERCLA passes from one corporation to another, we must apply common law rules and not create CERCLA-specific rules. Because the substantial continuity test adopted in Betkoski departs from the common law rules of successor liability, Betkoski is no longer good law.

As we described in Betkoski, the "traditional common law rule states that a corporation acquiring the assets of another corporation only takes on its liabilities if any of the following apply: the successor expressly or impliedly agrees to assume them; the transaction may be viewed as a de facto merger or consolidation; the successor is the 'mere continuation' of the predecessor; or the transaction is fraudulent." 99 F.3d at 519 (quoting United States v. Carolina Transformer Co., 978 F.2d 832, 838 (4th Cir. 1992)); see also Fletcher, Cyclopedia of the Law of Private Corporations § 4892.75. The exception at issue here is the "mere continuation" exception. See Betkoski, 99 F.3d at 519. Betkoski described the "mere continuation" test as the "common law test (sometimes referred to as the identity test), which requires the existence of a single corporation after the transfer of assets, with an identity of stock, stockholders, and directors between the successor and predecessor corporations." Id. at 519 (citing Carolina Transformer, 978 F.2d at 838).

Noting that the substantial continuity test (sometimes referred to as the "continuity of enterprise" approach) had been followed by the Supreme Court in the labor law context, in Betkoski we contrasted that doctrine with the mere continuation rule. Rather than considering ownership, the substantial continuity test focuses on the continuity of the business: Whether the "successor maintains the same business, with the same employees doing the same jobs, under the same supervisors, working conditions, and production processes, and produces the same products for the same customers." Id.

We adopted the substantial continuity test because "CERCLA is entitled to a construction that advances its primary goals [and] the substantial continuity test is more consistent with [those] goals [and is thus] superior to the older and more inflexible 'identity' rule." Id. Accordingly, we held the substantial continuity test to be "the appropriate legal test for successor liability under CERCLA." Id. In Betkoski we were not applying general common law [p686]  principles of corporate law but rather adopting a special rule for use in CERCLA cases that departed from those principles.

New York argues that the substantial continuity test is simply a refined version of the traditional mere continuation exception. New York is correct that, unlike the novel rule adopted by the district court in Bestfoods, there is some prior precedent for the substantial continuity rule and the rule is generally presented as a variant of the mere continuation exception. However, the substantial continuity test is not a sufficiently well established part of the common law of corporate liability to satisfy Bestfoods' dictate that common law must govern. We briefly describe the current state of the substantial continuity doctrine.

Within federal law, the substantial continuity doctrine is well established in the area of labor law. See, e.g., Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 43-45, 96 L. Ed. 2d 22, 107 S.C.t. 2225 (1987). However, the labor law cases are particular to the labor law context and therefore have not been and cannot easily be extended to other areas of federal common law. In Textile Workers Union v. Lincoln Mills, the Supreme Court held that section 301 of the Labor Management Relations Act "authorizes federal courts to fashion a body of federal law for the enforcement of [] collective bargaining agreements." 353 U.S. 448, 451, 1 L. Ed. 2d 972, 77 S.C.t. 912 (1957). Thus, the rules that federal courts and the Supreme Court have adopted in the labor law context do not necessarily reflect general federal common law but rather represent law fashioned for the purpose of enforcing section 301. See Golden State Bottling Co. v. NLRB, 414 U.S. 168, 182 n.5, 38 L. Ed. 2d 388, 94 S.C.t. 414 (1973) (contrasting the "perimeters of the labor-law doctrine of successorship" with the general rules governing asset purchase agreements).

Furthermore, some of the labor law substantial continuity cases have not involved asset purchases. See John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 551, 11 L. Ed. 2d 898, 84 S.C.t. 909 (1964) (using "substantial continuity" in the case of a merger to assess whether labor agreement should apply after the merger). Thus, in the labor law context the doctrine is not part of the common law "mere continuation" exception. Finally, even where the labor cases did involve an asset purchase, the focus was not on whether the successor corporation should be responsible for general corporate liabilities but whether the successor had a duty to bargain with the same workforce which had previously voted to bargain collectively with the predecessor corporation. Thus, in Fall River Dyeing & Finishing Corp v. NLRB, the test was employed to determine whether "those employees who have been retained will understandably view their job situations as essentially unaltered." 482 U.S. at 43 (1987)(quoting Golden State Bottling Co., 414 U.S. at 184).

The substantial continuity doctrine has also been applied in a few product liability cases. In Betkoski, we pointed to ''Mozingo v. Correct Mfg. Corp.'', where the Fifth Circuit applied the doctrine to hold an asset purchaser liable for an injury that occurred before the purchase. 752 F.2d 168, 175 (5th Cir. 1985). The Fifth Circuit characterized the doctrine as "in the nature of an expansion of the mere continuance exception to the rule of non-liability" for asset purchasers. Id. But the Mozingo Court was applying Mississippi law and in Betkoski we were relying on federal common law. See also [p687] Cyr v. B. Offen & Co., 501 F.2d 1145, 1153-54 (1st Cir. 1974) (adopting substantial continuity doctrine where New Hampshire law applied to hold asset purchaser liable for product injuries of predecessor). Perhaps if the substantial continuity doctrine were widely adopted among the states, it might be considered absorbed into federal common law and thus applied under CERCLA pursuant to the reasoning in Bestfoods in whatever states had not adopted it. However, at present the doctrine has been adopted by only a handful of states. See Fletcher, Cyclopedia of the Law of Private Corporations § 4892.75 ("A few states have loosened the traditional 'mere continuation' exception in strict liability cases to focus on continuity of the business or enterprise . . . [but] most courts that have considered the continuation of enterprise exception have refused to adopt it.").

We thus find that the substantial continuity doctrine is not a part of general federal common law and, following Bestfoods, should not be used to determine whether a corporation takes on CERCLA liability as the result of an asset purchase. Our holding is consistent with dicta by the only other Court of Appeals that has considered whether the substantial continuity doctrine survives Bestfoods. See United States v. Davis, 261 F.3d 1, 54 (1st Cir. 2001) (noting that Bestfoods "left little room for the creation of a federal rule of liability under the statute").

Because we find that the substantial continuity doctrine of Betkoski is no longer good law and reject the argument that the doctrine is part of the federal common law for CERCLA purposes, we must vacate the district court's grant of summary judgment for plaintiff New York State.

CONCLUSION
For the forgoing reasons, we VACATE the grant of summary judgment for plaintiff and REMAND for further proceedings.


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New York v. National Services Industries/Concurrence Leval

LEVAL, J., concurring

I agree completely with my colleagues that, after the Supreme Court's ruling in United States v. Bestfoods, 524 U.S. 51, 141 L. Ed. 2d 43, 118 S.C.t. 1876 (1998), the CERCLA liability of a seller of assets may no longer be imposed on the purchaser of those assets on the basis of the "substantial continuity" test several federal courts have adopted for such situations. See B.F. Goodrich v. Betkoski, 99 F.3d 505, 519 (2d Cir. 1996); United States v. Mexico Feed & Seed Co., 980 F.2d 478, 487 (8th Cir. 1992); United States v. Carolina Transformer Co., 978 F.2d 832, 838 (4th Cir. 1992). The Supreme Court made clear in Bestfoods that in the absence of a statutory authorization, courts are not free to impose federal statutory liability under standards that depart from the well established principles [p688]  of common law. Under common law rules, a purchaser of assets does not succeed to the liabilities of the seller, except in narrow circumstances. The "substantial continuity" test fashioned by the federal courts for CERCLA liability is unquestionably a significant deviation from the common law rules. Nor is authority for it to be found in the terms of the CERCLA statute. The judgment of the district court therefore must be set aside. I agree with my colleagues that the Bestfoods principle is altogether adequate to dispose of this case.

I write separately to note my belief that, even if the CERCLA substantial continuity test could survive Bestfoods, the judgment of the district court nonetheless could not stand because the court misunderstood the requirements of the test. I believe it is worthwhile noting this alternative basis for overturning the district court's ruling, for three reasons. First, notwithstanding our judgment that the test has been dispatched by Bestfoods, it could remain with us. In Bestfoods, the Supreme Court did not address the issue of successor liability; it ruled on a question of subsidiary liability. Although the principles of Bestfoods appear to us fully applicable to our question, there is as yet no holding of the Supreme Court that speaks directly to it. Second, and perhaps more important, even assuming that Bestfoods has laid this court-devised test to rest, the test might be resuscitated by legislative action. Courts developed the test because they believed it advanced the goals of CERCLA. If Congress shares that view, Congress might wish to give express statutory authorization for the test. Third, a substantial continuity test for successor liability might be devised by courts for use in connection with another federal statute that does confer proper authorization. In any of these circumstances, the test may be employed once again after Bestfoods. The test has caused substantial confusion. In view of the possibility of its return, it seems worth the trouble to explore how the test should be understood.

In a small number of contexts, courts have fashioned rules, notwithstanding the contrary principles of common law, to impose a liability incurred by a previous operator of a business on a successor in the operation of that business. Courts have described these rules in terms of a "substantial continuity" test for successor liability. The objective was in each case to further the policies of the particular statute under consideration, or prevent its circumvention. It would be quite mistaken to view these instances as involving the use of a pre-existing test of clear, well-understood contours, which courts have plugged into first one, then another statutory scheme. To the contrary, in the case of each statutory scheme, the courts, perceiving the inadequacy of the common law rules to support the objectives of the particular statute, have groped case by case toward a new standard, sometimes following the lead of the administrative agency charged with front-line administration of the statute. The test developed for use with each statute reflects considerations peculiar to that statute. As a result, the test developed for one statute differs from the test developed for another. Although courts have often identified these as tests of "substantial continuity," substantial continuity is not the entirety of any such test, but merely an element. Nor is the concept of substantial continuity satisfied in the same way in each circumstance, regardless of the statute whose objectives are being advanced. Notwithstanding some common ground, it is a different test, designed to achieve different purposes, depending on the statute for which it was developed.

[p689] For example, over a period of years, in the interpretation of the National Labor Relations Act ("NLRA"), 29 U.S.C. §§ 151 et seq., the Supreme Court, generally following the lead of the National Labor Relations Board ("NLRB"), developed a doctrine shaping the bargaining obligations of an employer who takes over a business formerly conducted by another employer, together with a significant part of the predecessor's workforce. Where the predecessor had been obligated to bargain with the union certified as the representative of its workforce, the Court imposed on the successor the predecessor's duty to bargain with that union. The facts and reasoning of these cases clearly indicate that they are responsive to the specific concerns of § 8(a)(5) of the NLRA, and are not intended to fashion a general principle of successor liability applicable in other contexts. See NLRB v. Burns Int'l Sec. Svcs., Inc., 406 U.S. 272, 32 L. Ed. 2d 61, 92 S.C.t. 1571 (1972); Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 96 L. Ed. 2d 22, 107 S.C.t. 2225 (1987). In Burns International, Burns had won a competitive bid to oust another company, Wackenhut, as provider of security services to a Lockheed plant. Within the previous few months, the Wackenhut employees had selected the United Plant Guard Workers Union ("UPG") as their bargaining representative, and the UPG had been certified by the NLRB as their exclusive bargaining agent. 406 U.S. at 274-75. To perform the job it had won, Burns hired many of the workers Wackenhut was laying off, enough to make up a majority of its workforce assigned to that job. Burns regarded the newly hired workers as covered by its collective bargaining agreement with a different union, which encompassed workers in similar employment at other sites. It refused to bargain with UPG. The NLRB found that this refusal violated §§ 8(a)(5) and 8(a)(1) of the NLRA, 29 U.S.C. §§ 158(a)(5) and (a)(1), and ordered that Burns bargain with UPG with respect to the former Wackenhut employees. The Supreme Court upheld the order. The Court focused on whether the Wackenhut "bargaining unit," which the NLRB had certified for representation by UPG, remained intact after the change in employer, and found that it did because the same employees were performing the same tasks under the same conditions. Id. at 278-80. The Court explained, "The source of [Burns'] duty to bargain with the union is . . . the fact that it voluntarily took over a bargaining unit that was largely intact and that had been certified within the past year." Id. at 287. The court noted furthermore, "It would be a wholly different case if the [NLRB] had determined that because Burns' operational structure and practice differed from those of Wackenhut, the Lockheed bargaining unit was no longer the appropriate one." Id. at 280.

Just as the considerations guiding the test are distinct in the context of duty to bargain under the NLRA, so the remedy is also particular to that context. The Court explicitly ruled that Burns was not bound to the substantive terms of the collective [p690]  bargaining agreement the UPG had negotiated with Wackenhut. Its sole "successor" obligation was to bargain with UPG. It remained free to fashion its own demands over such substantive terms as "changes in corporate structure, composition of the labor force, work location, task assignment, and nature of supervision." Id. at 287-88. It is quite clear that the considerations that guided the Court in fashioning both the test and the remedies under the test were uniquely tailored to the particular labor law context and are of little relevance to a CERCLA dispute over succession to cleanup liabilities.

Fifteen years later, the Supreme Court refined the test in Fall River Dyeing, making even more clear its intent to rest the analysis of successor duties on the specific concerns of the NLRA. Fall River, a newly formed company, had purchased a portion of the assets of a recently shut-down dyeing works, and hired enough of the former company's unionized employees to make up a majority of its workforce. The NLRB ordered Fall River to bargain with the union that had the workers had chosen while employed by the predecessor company. The Supreme Court affirmed the NLRB's order. While employing what it called a "substantial continuity" test and noting that the duty to bargain was inherited when the successor company "acquired substantial assets of its predecessor and continued, without interruption or substantial change, the predecessor's business operations," 482 U.S. at 43, the Court focused on the fact that where the successor company retained the same employees in the same positions, "those employees who have been retained will understandably view their job situations as essentially unaltered." Id. The Court explained that the viewpoint of the workers provided the touchstone for application of the test, because

"emphasis on the employees' perspective furthers the Act's policy of industrial peace. If the employees find themselves in essentially the same jobs after the employer transition and if their legitimate expectations in continued representation by their union are thwarted, their dissatisfaction may lead to labor unrest."

Id. at 43-44. As in Burns, the application of a "substantial continuity" test focused on the composition of the workforce, and the employees' "legitimate expectations" of being represented by the union they had selected under the terms of the NLRA, while employed together in the same positions and in the same location, although under a different employer.

In Golden State Bottling Co. v. NLRB, 414 U.S. 168, 38 L. Ed. 2d 388, 94 S.C.t. 414 (1973), the Supreme Court considered a different question also arising under the National Labor Relations Act: "whether the bona fide purchaser of a business, who acquires and continues the business with knowledge that the predecessor had committed an unfair labor practice in the discharge of an employee, may be ordered by the [NLRB] to reinstate the employee with backpay." Id. at 170. All American Beverages, Inc., had purchased the assets of Golden State's soft drink bottling and distribution business with knowledge of the NLRB's prior order to Golden State to remedy an unfair labor practice it had committed in discharging an employee. All American had continued Golden State's operations without interruption and employed its labor force. The Board ordered All American to reinstate with back pay the employee wrongfully dismissed by Golden State. The Supreme Court affirmed the Board's order. The judgment was based on considerations particular to the labor context. First was the primary interpretive role of [p691]  the NLRB, which had issued the reinstatement order, and enjoyed "broad discretion to fashion . . . relief adequate to achieve the ends, and effectuate the policies, of the [NLRA]." Id. at 176. Second, the "objectives of national labor policy," which include "protection to the employees from a sudden change in the employment relationship," appropriately "balanced" the "prerogative of owners independently to rearrange their businesses." Id. at 182. Third, as in Fall River, "The employees' legitimate expectation is that the unfair labor practices will be remedied [and thus] a successor's failure to do so may result in labor unrest." Id. at 184. In sum, then,

"Avoidance of labor strife, prevention of a deterrent effect on the exercise of rights guaranteed [by] the Act, and protection for the victimized employee - all important policies subserved by the [NLRA] - are achieved at a relatively minimal cost to the bona fide successor."

Id. at 185. The particular substantial continuity test applied was thus substantially shaped by the objectives of the NLRA.

Against this background, and in similar fashion, after the passage of CERCLA courts began to perceive a need to extend successor liability beyond the scope of the conventional common law rules lest the objectives of the Act be frustrated. The courts reasoned in a manner similar to the opinions reviewed above, with the important distinction that their reasoning concerned the objectives of CERCLA, rather than those of the labor relations Act.

Carolina Transformer dealt with successor liability in a case in which the parties had manipulated the corporate form to continue a company's operations while evading its liability. Carolina Transformer was solely owned by one individual, who was its president until being succeeded by his son. In its business of repairing and rebuilding electrical transformers, the company disposed of chemical wastes in a manner that caused it to accrue CERCLA liability. After the Environmental Protection Agency performed a CERCLA cleanup on its site, Carolina Transformer sold most of its assets to FayTranCo, a company founded and owned by the children of the Carolina Transformer owner, including the son who had succeed his father as president of Carolina Transformer. FayTranCo substantially continued the operations of Carolina Transformer. The district court ruled that FayTranCo was a successor of Carolina Transformer for purposes of CERCLA liability, and the Fourth Circuit affirmed.

The court began by enumerating eight factors, which dealt exclusively with the degree of continuity of the enterprise. It went on from there, however, to focus on whether "the transfer . . . was part of an effort to continue the business of the former corporation yet avoid its existing or potential state or federal liability." Carolina Transformer, 978 F.2d at 838 (emphasis added). In its recitation of the facts justifying imposition of liability, the court clearly focused on the fact that the form of succession was designed to continue the business in largely the same hands while effectively defeating the CERCLA liability the predecessor corporation had incurred. The court's explanation emphasized that assets of the predecessor corporation were transferred to the successor at below-market prices or with only nominal compensation. Id. at 838-41. The transaction was seen as a manipulation of the corporate form to defeat existing and potential liabilities. The court's reasoning in no way suggests that continuity alone would have been sufficient for the imposition of successor liability, if the facts had [p692]  not included manipulation to defeat the CERCLA liability of the predecessor corporation.

United States v. Mexico Feed & Seed Co. adhered even more clearly to the same approach. The asset purchaser and the seller were both in the business of collecting and hauling waste oil. The purchaser acquired the assets of the seller and continued its operations. Among the assets sold were a handful of tanks that had previously leaked waste oil onto a CERCLA cleanup site. Id. at 482-84. Despite the buyer's substantial continuation of the seller's business, the court declined to impose successor liability. The Eighth Circuit stressed that "the purpose of corporate successor liability . . . is to prevent corporations from evading their liabilities through changes of ownership." Id. at 487. The court noted, "The cases imposing 'substantial continuation' successorship have correctly focused on preventing those responsible for the wastes from evading liability through the structure of subsequent transactions." Id. at 488. The court contrasted Carolina Transformer, where successor liability had been imposed upon facts suggesting a manipulative effort to escape liability by creating a new corporate entity in substantially the same hands as the predecessor. Id. at 488-89. The Mexico Feed court concluded, notwithstanding the new owner's substantial continuation of the seller's business, that no successor liability would be imposed where the purchaser had "no knowledge of the offending tanks" or of its seller's potential CERCLA liability, and where the sale of assets, on which the successor liability was assertedly predicated, had been an arm's-length transaction for "adequate consideration" and "between two competitors, not a cozy deal where responsible parties merely changed the form of ownership yet in substance remained the same." Id. at 489-91. Nor was the transaction one "where a purchasing corporation either in collusion with the seller, or independently, bought only 'clean' assets, and knowingly left 'dirty' assets behind with an insufficient asset pool to cover any potential liability. " Id. at 489-90. While such manipulations of the corporate form might have justified imposing liability, the court concluded that mere continuation of an enterprise by a good-faith purchaser of assets did not.

These two decisions make several things clear. First, while courts have used the term "substantial continuity test" to designate tests in both labor law and CERCLA, the test is different in each context. In the labor law context, it is guided by the question how the imposition or non-imposition of successor liability would affect important policies of the national labor law. Crucial to such decisions are issues such as the structure of the bargaining unit, the legitimate expectations of employees, and the goal of labor peace - issues that have no bearing on whether to impose successor CERCLA liability. Likewise, in the [p693]  CERCLA context, courts have relied on factors that have no bearing on imposition of successor liability under labor law. Second, while the courts have used the shorthand term "substantial continuity" to refer to the test that causes a predecessor's CERCLA liability to be visited on a successor, that is merely a shorthand name. The test is not merely one of substantial continuity. More than substantial continuity is required to place the predecessor's liability on the successor to its business. Although (as in Carolina Transformer) the courts have recited a series of factors relating solely to the issue of continuity, those factors were only part of the test. The courts' ultimate decisions whether to impose successor liability have turned on additional factors involving whether failure to impose liability on the successor would undermine the objective of the Act to impose liability on responsible parties.

The district court in the case under review misunderstood what conditions are necessary for imposition of successor liability under the substantial continuity test. According to the district court's view the eight factors cited in Carolina Transformer, which relate solely to continuity, are alone sufficient to make the purchaser liable for the seller's CERCLA obligations. Because NSI continued Serv-All's business making little change, this justified imposing Serv-All's liability on NSI as its "legal successor."

If a seller's CERCLA liability could be imposed on a purchaser of assets merely because it continued in substantially unchanged form the operations of the seller, the rule would result in disastrously unfair consequences, which furthermore would be harmful to the economy as a whole. In many circumstances, a purchaser of assets, buying with the intention of continuing the business being sold, would have no knowledge, and no reasonable way of learning, that the assets were burdened with liability. Businesses that engage in illegal dumping of toxic wastes often do so in [p694]  secret, arranging for furtive nocturnal dumping by unlicensed carriers. Such a seller will have no records of its illegal dumping and will certainly not volunteer the information to the purchaser of its assets. In addition, in many instances the dumping that gives rise to liability was done long in the past, at a time when such activities were unregulated and no records were maintained. Even assuming good faith among all participants in the purchase and sale, there may be no reasonable way for the purchaser to learn about the seller's history of disposal of toxic wastes because none of the present employees of the seller were employed when the disposal occurred and the seller has no records of the disposal.

Thus, a good faith buyer of assets, who does all reasonable due diligence, and has no reason to suspect liability, may learn too late that assets purchased at full going-business value came with a hidden liability that might vastly exceed their value. Business assets purchased in good faith for $ 1 million might easily bring liabilities of $ 5 million or $ 10 million in cleanup costs.

A rule of successor liability that threatened good-faith buyers with huge, unpredictable liability would also impose serious systemic costs on the economy. Such a rule would depress the price purchasers would be willing to pay for assets, as buyers would risk acquiring massive hidden liability. At the very least, buyers would need to purchase expensive liability insurance, which would reduce the market value of assets offered for sale. Asset purchasers might also favor piecemeal purchases at breakup value, in preference to purchasing at going-business value to continue the operation, resulting in both depression of the market value of the assets and the destruction of the jobs of those previously employed in the seller's operation. Nor is the unfairness that would result from the imposition of such capricious, arbitrary liabilities on innocent good faith purchasers nullified by the theoretical availability of insurance. This is so for at least three reasons. First, as noted, insurance would impose premium costs on all purchasers, thus diminishing the value of the assets being sold. Second, insurance policies have limits on the amount of coverage. Cleanup costs can be so extraordinarily high as to exceed the available coverage. Third, an arbitrary and unfair imposition of a substantial liability on a blameless party is no less unfair or arbitrary (although less drastic) when its impact is dispersed by the insurance mechanism among numerous blameless parties.

In conclusion, both the governing caselaw and good sense teach that, as to CERCLA liability, the so-called "substantial continuity" test for successor liability requires more than substantial continuity in the seller's business operations. It requires also the presence of factors justifying the conclusion that the objectives of CERCLA would be improperly circumvented if such liability were not imposed. The exact nature of such liability-justifying facts was not fully developed in the few cases that had considered the question before the Supreme Court's Best Foods decision brought the process to a halt. If the so-called "substantial continuity" test should either survive Bestfoods or be reincarnated in new legislation, it is of great importance that it be correctly understood as requiring not merely continuity but also the presence of such CERCLA-defeating conduct as justified imposition of liability in Carolina Transformer and guided the refusal to impose liability in Mexico Feed.

For the reasons well expressed in the opinion of Chief Judge Walker, as well as those expressed in this concurrence, I join [p695]  in the court's ruling that the judgment of the district court must be vacated.


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162 passionate nature, chafing easily under the slightest restraint. Pétion was often actuated by his heart, whilst Christophe rarely allowed himself to be thus ruled. The former trusted the people, in the welfare of whom he was deeply interested; he contemplated granting them wise liberties and thought that it would be possible to instil into them a liking for work by making them the owners of the land they had watered with their blood. Christophe had very little faith in the improvement of the people through the enjoyment of liberty; he was convinced that an iron hand would more easily and more quickly compel the people to work. Two men of such vastly different natures could not possibly have the same political ideas. It was no wonder then that whilst Pétion was thinking of establishing a republican form of government, Christophe, if he were not inclined to the maintenance of the monarchy, wished at least to create a strong and forcible executive power. On account of this difference of opinion the two Generals were already at odds when on November 3, 1806, Christophe, in his capacity of Chief of the Provisional Government, summoned the citizens in order to elect a Constituent Assembly which was to meet at Port-au-Prince on the 30th of the same month. In the province of the North and in the Artibonite, which were under Christophe's direct influence, there were more parishes than in the West and in the South. The Chief of the Provisional Government was therefore sure of having in the Assembly a majority willing to support him. In consequence, he caused a draft of a constitution suitable to his ideas to be prepared. To counteract Christophe's plans Pétion authorized the election of Deputies in many small towns in the Western and Southern departments, which had hitherto never been represented. He himself became a member of the Constituent Assembly, the majority of which he had now secured; and in his turn he prepared the draft of a constitution. By increasing the number of the members of the


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Rh Assembly, Pétion had unquestionably disregarded the authority of the Chief of the Provisional Government. The latter was not disposed to suffer any such infringement of his prerogatives and when, on the 18th of December, 1806, the Assembly met in the church at Port-au-Prince, the breach between the two Generals was complete. The Deputies from the Northern and Artibonite provinces at once protested against the presence of those whom they considered as unlawfully elected. But no notice was taken of their protest. A committee, of which Pétion was appointed the chairman, was commissioned to draw up and to submit to the Assembly the draft of the Constitution. In a proclamation of December 24 Christophe openly declared many of the most important members of the Assembly to be rebels; he then prepared to march against Port-au-Prince. Yet on the 27th of December Pétion submitted the report of the committee to the Assembly and that same day the Constitution was adopted. Immediately the Deputies from the Northern and Artibonite provinces despatched to Christophe a written protest against the "so-called Constitution, the consequence of intrigue and malevolence, and against all that may follow until the dissolution of the Assembly." The Constitution of 1806 established a republican form of government; as an evidence of the distrust then existing against Christophe, exaggerated precautions were taken against the Chief of the Executive Power, whose authority was greatly curtailed. All the powers were centred in one body, the Senate, which had the entire possession of all executive, legislative, and military functions. The Senate alone had the right to appoint the civil and military functionaries, to determine their duties and the place of their residence; it had the direction of the foreign affairs and was, in consequence, authorized to draw up all treaties; it had the initiative in the matter of laws and legislative measures; it assumed also the privileges of a Supreme Court. The President of the Republic, elected for four years, was