ELR Citation: ELR 20677
No(s). 91-15054 (9th Cir. Mar 12, 1992)

The court holds that a chemical formulator's contractual obligation to indemnify a wood treatment company for liability under state environmental cleanup orders issued to the formulator bars an action by the formulator against the treatment company for contribution under §113(f) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The contract under which the formulator provided services to the treatment company requires the formulator to indemnify the treatment company against "all losses, damages, and costs resulting from any failure of the formulator" to comply with applicable law. Relying on precedent in the circuit, the court first holds that enforcement of the indemnification agreement would not violate public policy under CERCLA. The court holds that the district court properly refused to consider evidence submitted by the formulator that it promised to indemnify the treatment company only for liability arising from the formulator's failure to comply with labor and industrial health and safety laws. The court holds that the district court erred in granting summary judgment for the treatment company, because factual issues exist as to the scope of that company's involvement in the disposal of toxic substances at the contaminated site. The court also holds that the district court erred in denying the formulator's motion for summary judgment on whether the treatment company had "arranged for disposal" of toxic substances and was thus itself liable under CERCLA §107. Under the agreement the treatment company retained ownership of all materials it supplied to the formulator, materials it supplied included substances classified as hazardous under CERCLA, and the agreement contemplated spillage. Finally, the court vacates the district court's award of attorney fees to the treatment company and orders the lower court to reconsider the issue after the lower court has determined the extent of each party's responsibility for cleanup costs.

[The district court's opinion is published at 21 ELR 20475.]

Counsel for Plaintiff-Appellant
John L. Boos
Pettit & Martin
101 California St., 35th Fl., San Francisco CA 94111
(415) 434-4000

Counsel for Defendants-Appellees
James L. Meeder
Beveridge & Diamond
2 Embarcadero Cr., Ste. 1705, San Francisco CA 94111
(415) 397-0100

Before Goodwin and Brunetti, JJ.