UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

United States of America, and State of New Hampshire Department of Environmental Services, Plaintiffs

v. Case No. 22-cv-0289-SM-AJ Opinion No.

McCord Corporation, Defendant

O R D E R

In September, 2022, Plaintiffs, the United States of

America, acting on behalf of the Regional Administrator of the

United States Environmental Protection Agency (“EPA”) for Region

1, and the State of New Hampshire, Department of Environmental

Services, filed a consolidated action against the McCord

Corporation pursuant to Section 107 of the Comprehensive

Environmental Response, Compensation, and Liability Act

(CERCLA),

, and New Hampshire law, N.H. Rev.

Stat. Ann. 147-A and 147-B. Plaintiffs contend that McCord is

liable for environmental cleanup costs associated with Davidson

Rubber’s automobile parts manufacturing plant in Farmington, New

Hampshire, (the “Plant”) now known as the Collins and Aikman

Plant (Former) Superfund Site (the “Site”). From the 1960s through the 1980s, operators of the Plant

discharged wastewater into the surrounding area, contaminating

the groundwater with volatile organic compounds. Wastewater

from the Plant was first discharged directly into a tributary of

a nearby brook, and later discharged directly into the ground on

the north side of the Plant, and finally, discharged into the

groundwater through lagoons constructed by the Plant’s

operators.

Costs associated with environmental remediation of the Site

are significant. Plaintiffs contend that defendant is liable

for those costs as a former operator of the Plant. Defendant

disagrees. Both parties have filed cross-motions for summary

judgment as to liability, asserting that there are no genuinely

disputed facts, and claiming entitlement to judgment as a matter

of law.

Standard of Review

“Summary judgment is appropriate only if ‘there is no

genuine dispute as to any material fact and the movant is

entitled to judgment as a matter of law.’” Gattineri v. Wynn

MA, LLC,

(1st Cir. 2024) (quoting Fed. R. Civ.

P. 56(a)). A genuine factual dispute exists if “the evidence is

such that a reasonable jury could resolve the point in the favor

of the non-moving party,” and a material fact is one “that has

2 the potential of affecting the outcome of the case.” Hamdallah

v. CPC Carolina PR, LLC,

(1st Cir. 2024)

(internal quotation marks omitted). To decide a summary

judgment motion, the court draws all reasonable inferences in

favor of the nonmoving party from the properly supported facts

in the record. Lech v. von Goeler,

(1st Cir.

2024).

Cross motions for summary judgment are reviewed under the

same standard but separately, drawing reasonable inferences in

favor of the non-moving party in turn. Jespersen v. Colony Ins.

Co.,

(1st Cir. Mar. 25, 2024). When a

plaintiff moves for summary judgment on her own claims, to

succeed, she must provide conclusive evidence that shows “no

reasonable fact-finder could find other than in [her] favor.”

Scottsdale Ins. Co. v. Torres,

(1st Cir. 2009);

see also In re Buscone,

(1st Cir. 2023);

Asociacion de Suscripcion Conjunta del Seguro de Responsabilidad

Obligatorio v. Juarbe-Jimenez,

, 50 n.10 (1st Cir.

2011); Brookline Opportunities, LLC v. Town of Brookline,

, 178 (D.N.H. 2023).

Factual Background

The period relevant to the parties’ dispute extends from

1964 through 1986, during which McCord Maine and Ex-Cell-O were

3 the corporate parents of Davidson Rubber. Much of the current

factual record is sourced from evidence produced during

insurance coverage litigation between Ex-Cell-O, McCord, and

Davidson, and its insurers (including the Fireman’s Fund

Insurance Companies), in the late 1980s and early 1990s (the

“Fireman’s Fund litigation” or “Fireman’s Fund”). In that case,

Ex-Cell-O, McCord, and Davidson asserted claims for

environmental liability insurance coverage for twenty-two

different sites nationwide, including the Farmington Site. With

respect to the Farmington Site, the companies argued, employing

policy terms, that the pollution was a result of two “sudden and

accidental” “spills of perchlorethylene, one at a storage tank

in 1977 and the other from a pipe rupture in 1978.” Fireman's

Fund Ins. Companies v. Ex-Cell-O Corp.,

(E.D. Mich. 1990). They contended that those “incidents

fulfill[ed] the ‘occurrences’ requirement under the policies.”

The district court disagreed, concluding that the companies

had not “proved an occurrence resulting in property damage at

the Farmington site within the relevant policy periods,” but,

even if they had proven it, the policyholders could not prevail

“because they expected the resulting damage.”

4 The Corporate Entities

Before delving into the relevant factual background, a

brief overview of defendant’s corporate history is helpful. In

1923, McCord Radiator & Mfg. Co. was incorporated in Maine

(“McCord Maine”). The company changed its name to the McCord

Corporation in 1944. In 1964, McCord Maine entered into a Plan

and Agreement of Reorganization with the Davidson Rubber

Company, Inc. (“Davidson”), a New Hampshire corporation that

owned and operated auto parts manufacturing facilities within

the state. Pursuant to the agreement between McCord Maine and

Davidson Rubber, McCord Maine purchased substantially all the

assets of Davidson Rubber and assumed substantially all its

liabilities. Following McCord Maine’s acquisition, in 1965,

Davidson purchased approximately 81-acres of land in Farmington

to construct the Plant.

Davidson remained a McCord Maine subsidiary from 1964

through 1978. On January 27, 1978, Ex-Cell-O Corporation (“Ex-

Cell-O”), a Michigan corporation; XLO, Inc. (a wholly owned

subsidiary of Ex-Cell-O); and McCord Maine entered into an

Agreement and Plan of Merger for the acquisition of McCord

Maine. Pursuant to that acquisition, McCord Maine merged with

and into XLO, Inc., which became the surviving entity and

successor to McCord Maine. XLO, Inc., changed its name to the

5 “McCord Corporation” (and is the same McCord Corporation named

as defendant in the current action). Ex-Cell-O was McCord’s

direct parent and sole owner, while McCord was Davidson Rubber’s

direct parent and sole owner.

In 1986, Textron, Inc. acquired Ex-Cell-O and Ex-Cell-O’s

portfolio, including Davidson, in a transaction characterized as

a merger by Ex-Cell-O’s Board of Directors. Ex-Cell-O was

liquidated, and its shares of McCord were transferred to TX

Financing Corp. 12. McCord continued to own all shares of

Davidson. In 1991, TX Financing Corp. 12 merged into McCord,

currently headquartered in Troy, Michigan.

Finally, McCord concedes that it is Ex-Cell-O’s successor.

The Farmington Plant and McCord Maine

The Farmington Plant began manufacturing automobile parts

in 1966. At that time, effluent from the Plant’s operations

drained into a culvert at the parking lot located at the

southern end of the Plant. The culvert discharged into an

unnamed wetland tributary which drained to the Pokamoonshine

Brook. Discharge from the Plant’s wash and process lines

traveled from the Plant’s interior floor drains to the parking

lot culvert, while noncontact cooling water from the Plant was

6 discharged directly into the Brook. 1 Finally, because the Plant

was not connected to a municipal sewer, sewage wastewater was

either disposed into a septic tank or discharged directly into

the ground. By July, 1971, a contractor estimated that the flow

of effluent from the Plant averaged approximately 60,000 gallons

each day.

In support of their motions for summary judgment, both

parties focus on the role played by Richard Birch with respect

to the Plant’s operations and its wastewater management. Birch

was hired by Davidson Rubber in 1964 to work at its facility in

Dover, New Hampshire. He was deeply involved in construction of

1 Richard Birch, who served as defendant’s Facilities Manager and Safety Director and later its Director of Energy and Environmental Affairs, testified:

We used to monitor the Pokomoonshine Brook because it was a trout stream, and the native people up there would always be coming up to us and telling us about the fish they had caught in the Pokomoonshine Brook. And I always thought it was funny because most of the year you could pour a cup of coffee into the brook and make more liquid than there was water.· It was very close to being an occasional stream, which if it were, it would draw trout, obviously.·

But we used to, in the early days, put noncontact cooling water into it, and we used to watch very carefully to see that we didn't do anything that made an obvious spill there because [the Brook] was something that attracted local attention.

Pls.’ Mot. for Summary Judgment, Exh. 16 (“Pls.’ Exh.”) at 89:1- 14.

7 the original Farmington Plant, and, in that capacity, reviewed

drawings that were prepared by the project’s engineer that

related to the Plant’s sanitary waste disposal and drainage

systems.

In 1967, Birch began working for McCord Maine, and he

relocated to Detroit, Michigan. He was promoted to McCord

Maine’s Manager for Safety and Ecology in 1971. In that

capacity, Birch was charged with inspecting McCord Maine’s

manufacturing plants and assisting facility compliance with the

newly passed Occupational Health and Safety Act (“OSHA”).

McCord Maine described Birch’s role in its 1971 shareholder

report:

Mindful of its responsibilities to protect the natural environment and help improve the communities where it operates plants, McCord expanded its corporate citizenship role this year. An experienced McCord engineer was appointed to a newly created position of manager of safety and ecology. In addition to his safety responsibilities, he is working with divisions on ways to reduce or eliminate any air, water, or noise pollution that McCord manufacturing plants may generate.

Pls.’ Exh. 17, at 62513. Over the next several years, Birch’s

role gradually morphed to become the company’s Facilities

Manager and Safety Director.

In the summer of 1970, employees at the Plant began

noticing discoloration and an odor in their water supply.

8 Davidson began taking water samples in the Plant to determine

the source of the contamination. Initial efforts to remedy the

situation were ineffective, and by mid-July, those water issues

had worsened. At that point, responding to a recommendation

from New Hampshire’s pollution control division, Davidson began

treating both the Plant’s water reservoir and well with

chlorine.

About that same time, the Plant engaged William Fletcher,

P.E., of Environmental Engineering Incorporated (“EEI”) to

investigate the problem. EEI performed several on-site

investigations, collected and analyzed water samples from

several different locations at the Site and nearby areas, and

issued an October 12, 1970, report to Davidson. After meeting

with EEI in early November, the Company implemented a program to

regularly test water from various locations around the Site,

treat the Plant’s cooling water and drains with chlorine, and

monitor effluents into the Plant’s drainage system.

In January, 1971, Davidson again retained EEI to analyze

Farmington’s wastewater discharges on the southern end of the

plant, and to install a weir at the end of the drainage system.

By May, 1971, Robert Hynes, at that time Davidson’s Director of

Personnel (and viewed by some Davidson employees as the

“overseer” of the Plant’s environmental issues), Def.’s Mot. for

9 Summary Judgment, Ex. (“Def.’s Exh.”) 14 at 57:8-14 2) was

concerned that the Plant’s “community relations were coming into

question relative” to the Plant’s wastewater effluent and the

Brook. Pls.’ Exh. 97 at p. 32. Hynes developed an action plan,

pursuant to which the Plant would: (1) request that state

regulators audit the Plant’s wastewater, (2) sample the water in

the Brook, and (3) meet with EEI to review the results of their

study and evaluate Plant wastewater treatment options. EEI

eventually reported back in early July, proposing that the Plant

use a chlorine treatment system to address wastewater issues.

Davidson employees met again with EEI in September, 1971,

when water sampling at the Site revealed increased bacteria

counts. EEI recommended chlorination of the drainage system,

that the Plant remove a weir that was causing ponding, and the

elimination of garbage from the Plant’s dumpster area. The

Plant’s Utility Engineer, Joe McCormack, reached out to another

2 There is evidence in the record that Hynes did not share that view. He testified at deposition that he saw his role as “community relations,” pls.’ exh. 97 at p. 103; was not aware that the well supplying drinking water for the Plant drew from groundwater associated with the Brook, id. at p. 40; did not know when (or if) the Plant began treating its effluents, id. at p. 37; did not know who was responsible for environmental permitting applications in 1974 (although hypothesized it could be “Dick Birch”); id. at 120; and did not participate in the decision-making process that led to selection of the lagoon system for handling effluent, def.’s opp. to pls.’ mot. for summary judgment, exh. (“def.s’ opp. exh.”) 1 at p. 140.

10 consultant, Dr. George Bierman, of H.V. Shuster, Inc. Dr.

Bierman analyzed the Site’s water testing data in September,

1971. He also recommended that the Plant’s drainage system be

treated with chlorine, and the Plant’s drainage lines flushed.

Consistent with those recommendations, Davidson treated their

water drainage system with chlorine, removed the weir causing

ponding, and installed a solid manhole cover in the dumpster

area.

The record does not reveal exactly when Birch was first

looped in on the Plant’s wastewater issues. 3 But, he was copied

on the Plant’s discharge application that McCormack filed with

the Army Corps of Engineers in October, 1971. Pls.’ Exh. 22.

3 On his involvement during this time, Birch testified:

Q. Can you tell me what your position was in 1971 and 1972 so that you attended a meeting with respect to water pollution problems and are cc-d on memos with regard to that subject?

A. I was safety director of McCord at that time.

Q. And what was your connection to the Farmington plant at that time?

A. Well, McCord was -- Farmington was part of McCord.

Pls.’ Exh. 19 at 905:10-24.·

11 And, in November, 1971, Birch sent a memo to Edward Veale, who

was, at the time, the manager of the Farmington Plant. In his

memo, Birch noted that he had reviewed “Joe McCormack’s

collection of data,” and identified several specific issues

relating to bacteria counts in the Plant’s wastewater effluent.

Pls.’ Exh. 23. Birch was concerned that bacterial counts were

“steadily increasing,” and were higher than readings from the

previous year. He concluded that the cause was poor

housekeeping, and directed certain actions be taken on a “crash

basis” to address the issue. Id.

Specifically, Birch directed that the Plant should: (1)

relocate its dumpsters, and direct cafeteria waste to those

dumpsters; (2) clean out a drain line; (2) move the trash

compactor to the shipping area; (4) clean the area surrounding

the trash compactor more frequently; and (5) install a hose bib,

and wash the area around the dumpster with hypochlorite. Hynes

thought that Birch’s “analysis and proposal [made] sense,” and

recommended that the Plant take action immediately “to develop

an approach to the R. Birch proposal.” Def.’s Exh. 16 at 47487.

The Plant implemented four of the five action items Birch had

recommended (moving the trash compactor was not feasible).

Birch visited the Plant a few weeks later, in December,

1971. On December 10, 1971, he met with McCormack, Hynes, Larry

12 Lambert, Davidson’s Industrial Relations Manager, and Bert

Allen, whose title the record does not disclose, so that they

could “develop a long-term solution to the water pollution

problem at the Farmington Plant.” Pls.’ Exh. 26. During the

meeting, attendees agreed that “from a legal and community

relations standpoint,” it was necessary to “develop a facility

that treats all water which passes through the Davidson Water

System and leaves the property via the culvert at the end of the

plant parking lot.” Pls.’ Exh. 26.

Birch proposed construction of a surface-aerated lagoon

between the Plant’s parking lot and the Brook, which would

retain and aerate the effluent prior to discharge. Id. Other

meeting attendees agreed “this appeared to be a feasible

proposal,” and Hynes suggested they ask EEI’s Fletcher to study

whether construction of a lagoon would remediate the Plant’s

effluent issue. Id. If so, the Plant would move forward by

seeking Town and State officials’ approval for the project.

Later that month, Davidson employees met with EEI to

discuss the viability of the lagoon as a water treatment option.

EEI’s recommendation differed slightly from Birch’s, in that EEI

proposed that the lagoon be aerated from the bottom, treated

with chlorine, and the treated water then reused within the

Plant. EEI formally submitted their proposal for installation

13 of a “water re-use reservoir” in January, 1972, pls.’ exh. 28,

which Birch reviewed in February. Pls.’ Exh. 27. Birch

commented that the reservoir proposed by EEI would be adequate

“as long as some provision is made to trap surface oils for

periodic manual removal.” Id. He wrote: “Visible oil films

would negate all of our work[,] should they show up downstream,

and oil and gas runoff from the parking lot and truck dock area

is an ever present possibility.” Id. Other Davidson employees

raised similar concerns. So, Hynes asked Lambert and McCormack

to determine whether EEI’s proposal would address surface oil

removal and, if not, what would be required to add that

capability.

During a January, 1972, meeting, however, Davidson

employees determined that, because EEI’s proposed system

included a chlorination plant that would treat wastewater, a

lagoon was not necessary. Def.’s Opp. Exh. 41. It is not clear

from the record who attended the meeting, which McCormack

summarized in a March, 1972, memo to Veale, besides McCormack

and Veale. Id. In any event, EEI’s cost estimates were

revised, and Davidson prepared and submitted appropriation

request forms to McCord Maine for a water treatment system that

would hold wastewater in a “reinforced concrete chamber” while

it was treated with chlorine. Id.; Def.’s Exh. 23.

14 Yet, no treatment system was constructed. The record does

not disclose what happened with the March, 1972, appropriation

request, but as of April, 1973, the Plant was still discharging

chemically contaminated effluent into the Brook. As a temporary

solution, Davidson began to divert the effluent to the front

(northern) roof drainage system, which drained directly onto the

Site, but not directly into the Brook.

Diverting effluent to the Plant’s northern end did little

to improve matters. In July, 1973, EEI completed an analysis of

the discharged wastewater, and noted that nearly 14,0000 gallons

of wastewater from the Plant’s “washers, paint stripping, wash

dumps and boiler blow down,” which was “dirty grey in color and

contains substantial quantities of paint solids and foam

grindings,” was being discharged on a daily basis from the Plant

to the Site. Pls.’ Exh. 31. EEI now proposed that the Company

construct a water treatment facility to treat its effluent

through PH adjustment with lime, chemical coagulation with alum,

clarification-settling and sand filtration, estimating

installation costs at around $50,000. Def.’s Exh. 27.

Instead of initiating work on EEI’s recommended water

treatment facility, on August 10, 1973, McCormack sent a memo to

John Cochrane, Davidson’s chief engineer, that attached an

appropriation request for $12,000 to cover EEI’s consulting

15 fees, which included $8,000 for EEI’s engineering work, as well

as an additional $4,000 for EEI to evaluate additional treatment

systems. The appropriation request was submitted by Veale on

August 23, 1973, who requested its expedition, writing:

Before [construction of the water treatment facility] can be justified[,]sufficient time and effort must be expended to develop the most economical plan . . . The problem, however, cannot be taken lightly. We are presently discharging wastewater . . . onto our own land. It does, however, finally flow onto adjacent land and continued flow of water in this area will expose us to environmental complaints.

. . .

It seems prudent then that we make the initial investment into the engineering and design study before appropriating funds for a final facility.

Pls.’ Exh. 31. On September 24, 1973, Cochrane echoed Veale’s

request for expediency, writing in a memo to Veale:

I would appreciate anything that can be done to expedite this appropriation since our recent problem with water usage indicates that we are straining our water facilities and should have a comprehensive plan of both sewage and water usage before we proceed. . . . Per his memo, [Birch] intends to visit us some time in the early fall, and I would like to have some definite program committed and under way.

Pls.’ Exh. 30. Despite the requests for expediency, the August,

1973, appropriation request went nowhere, deferred by McCord

Maine “due to unexpected and unusual expenditures as a result of

the energy crisis.” Pls.’ Exh. 39.

16 About the same time, in July, 1973, Birch sent a memo (on

McCord Maine intracompany letterhead) to every McCord Maine

facility, including the Plant, regarding the new Federal Water

Pollution Control Act of 1972 (the “Clean Water Act”). Birch

recommended that each plant “start an aggressive water

conservation program,” and wrote that he planned to visit each

plant to collect effluent samples for analysis. Pls.’ Exh. 30.

He stated: “[t]he results of these analyses and your water

conservation programs should enable us to determine pollution

control process requirements and their associated capital costs

for each location.” Id. Birch volunteered his assistance to

the plants “in any way possible in the development of water

conservation programs.” Id.

During this time, Birch was also an active participant in

Davidson’s permitting endeavors. As previously noted, Birch was

copied on the Plant’s 1971 application for a discharge permit

with the Army Corps of Engineers. And, in February, 1974, Birch

joined Hynes for a conversation with Richard Cavagnero, a

Sanitary Engineer for the United States Environmental Protection

Agency (“EPA”), regarding effluent discharge limitations and

sampling requirements for Davidson’s CWA discharge permit.

Birch was copied on monthly monitoring reports sent by Davidson

to the EPA in 1974 and 1975. The Plant’s permitting programs

17 were directly overseen by McCormack, however, who prepared and

submitted several permit applications on the Plant’s behalf.

In the meantime, wastewater discharge at the Site

continued, unabated. Davidson internal memos from this time

characterized the discharge as “unsightly,” “malodorous,” and

with the potential to “result in extremely adverse community

reactions.” Pls.’ Exh. 39. In April, 1974, Birch visited the

Plant and conducted a field inspection. He observed that

discharge from the roof drains was creating “a foul waste with

very poor visual characteristics, being milky in appearance and

leaving any grass and shrubbery in its path blackened and dead.”

Pls.’ Exh. 40. Birch hypothesized that, during rainy periods,

that foul waste likely drained into the Brook, and wrote:

The community problems that would be raised by general knowledge of such a waste stream and the concomitant poor publicity resulting certainly behoove us to take immediate action to control this condition.

. . .

We are and have been in violation of the law by not applying for an EPA Discharge Permit for this waste.

Id. Birch recommended an “aggressive” water conservation

program be initiated at once, as well as several other

remediative actions. Id. He instructed Davidson to submit

another appropriations request to McCord Maine and asked to be

informed when the appropriation cleared Dover (where Davidson

18 was headquartered). That way, Birch said, he could ensure that

the request did not “get hung up in Detroit.” Id.

The Company resumed discussions with EEI. And, in a letter

dated May 14, 1974, EEI proposed to update its July 1973

proposal, but offered to analyze other treatment options as

well. On May 15, 1974, Cochrane submitted an appropriations

request to Veale, now requesting $11,000 for an engineering

study of potential solutions to Farmington’s “wastewater

problems.” Pls.’ Exh. 39. That request states:

[W[e are now overflowing into neighboring property, exposing the company to civil action, and adverse publicity in a New Hampshire election year. The north discharge is not in violation of E.P.A. regulations at this time, since it currently is not being discharged into a stream . . . However, existence of this condition is known to many, . . . and could lead to serious politically oriented publicity not beneficial to the Davidson Rubber Company.

This program has been reviewed with Dick Birch on two occasions this past year and has his endorsement.

Id. Cochrane’s appropriation request includes a brief history

of Plant’s wastewater issues:

The Farmington plant is currently discharging waste water onto its own property north of the plant, with overflow onto neighboring property. This waste includes PVA, foam grindings, paint grindings, [and] various waxes. . . . The north end discharge . . . represents an “attractive nuisance” since it neither is enclosed nor controlled in any way, and could result in extremely adverse community reactions.

19 . . .

In the spring of 1973, it was discovered during routine inspection of the effluent water that serious pollution was occurring in the Pokamoonshine Brook (south) due to added water wash operations and the addition of Parks wax (an emulsified oil base material) as a mold release for crash pads. . . . An appropriation was requested and approved in May 1973 for the immediate temporary diversion of all sources of illegal waste water from the Pokamoonshine Brook. Such diversion resulted in increased flow to the north end discharge, which is now the source of our problem.

Id.

The appropriations request was approved, and EEI submitted

a Preliminary Engineering Report to Davidson in July, 1974. The

report summarized and evaluated several different wastewater

treatment options, concluding that installation of lagoons was

the Plant’s most cost-effective option. Pls.’ Exh. 43. But,

EEI’s report noted, the lagoons might result in further

groundwater contamination. Cochrane and Veale discussed EEI’s

report. Cochrane noted that a percolating lagoon seemed like

the best option, and that “R. Birch is in general agreement

[with the] report.” Def’s. Exh. 45.

On August 14, 1974, Cochrane submitted another

appropriations request to Veale, this time for $69,000 to cover

the installation of a percolating lagoon system to treat the

Plant’s wastewater. Pls.’ Exh. 44. The appropriation was

20 authorized by McCord Maine, and, on August 19, 1974, the New

Hampshire Water Supply and Pollution Control Commission approved

the system’s construction. Birch was copied on a memo to Veale

from Cochrane that noted the Commission’s approval. Pls.’ Exh.

46. The lagoon treatment system was constructed and operative

by 1975.

All parties agree that Davidson did not directly employ any

individual charged with responsibility for environmental

compliance or pollution management at the Plant until 1976. In

1976, however, Howard Williams, a Davidson employee based out of

their facility in Dover, was promoted to Manager of Safety and

Environmental Affairs for the company.

In 1977, the Plant was expanded, which included

construction of a sewage waste disposal system. The Plant

engaged EEI, Inc., to assist with design and permitting of the

new system. Birch was looped in on EEI’s efforts, and later

testified that he “review[ed] the drawings pertaining to the

waste disposal facilities,” pls.’ exh. 16 at 77:2-6, which had

been submitted to him for approval, pls.’ exh. 48. Beyond being

asked to approve the “plans [and] specs” for the new system,

id., Birch’s role in the Plant’s construction of the new septic

system is not entirely clear from the record. But, the record

does establish that Birch had approval authority over

21 construction of the new sewage waste system, a system which

eventually contributed to groundwater pollution at the Site.

The Ex-Cell-O Years

In 1978, McCord Maine was acquired by Ex-Cell-O and

reorganized as McCord Michigan and Davidson Rubber. The

reorganization brought with it certain changes. For example, in

multiple communications with regulatory officials at the federal

and state level following the reorganization, Davidson Rubber

now represented itself as a “division of Ex-Cell-O,” including

in its Resource Conservation and Recovery Act (RCRA) permit

applications. 4 And, several permits that were issued by state

and federal agencies identified Davidson Rubber as a “division”

of Ex-Cell-O, not a subsidiary.

Ex-Cell-O provided its “divisions,” including Davidson,

with administrative and consulting services, including legal,

human relations, and tax accounting support. For example, Ex-

Cell-O represented Davidson in a commercial breach of contract

case involving a payment dispute. And, in 1983, Ex-Cell-O’s in-

house counsel Walter Vashak, along with Birch, and Howard

4 Defendant points out that, in applying for a RCRA storage permit, the Plant was acting against Birch’s advice, since Birch had instructed that Ex-Cell-O’s plants need not apply for a RCRA permit.

22 Williams, represented Davidson in a CERCLA liability action

connected to the Silresim Superfund site, with Vashak

negotiating Ex-Cell-O’s settlement payment on the Plant’s

behalf. Ex-Cell-O handled Davidson’s SEC reporting obligations,

as well as its insurance coverage. Pursuant to those

obligations, Vashak directed Davidson staff to keep him, and

Birch, advised regarding any methylene chloride disposal issues,

and wrote that it was “imperative” that he be informed regarding

all of Davidson Rubber’s contacts with state and federal

authorities.

Birch now served as Ex-Cell-O’s director of energy and

environmental affairs. In that capacity, Birch implemented an

“environmental audit” program to regularly inspect Ex-Cell-O

facilities, including Farmington, and identify regulatory

violations, and issue corrective actions. Birch described the

audits:

We make -- we submit a report in writing that – [of] - - things we found in the visit [that] are reviewed with the plant management, and a member of the corporate legal staff attends that.

When we get back, we write a report to the division or plant, tell them what we found. We break our recommendations down into three groups; things that they better damn well fix like right now, things that are serious that they should pay attention to, and things that are wrong, but they will only get their wrists slapped for. These are primarily paperwork violations.

23 And then we send them a -- as I say, we send the plant management a letter, and we ask for a reply from them within six weeks giving us a schedule of what they are going to do to correct the item[s].

Pls.’s Exh. 16 at 114:9-23.

Overall, however, Birch’s involvement with the Plant’s

water pollution issues was less extensive during the Ex-Cell-O

years. He was involved in December, 1981, after the New

Hampshire Bureau of Solid Waste Management issued a Regulatory

Order to “Howard Williams, Davidson Rubber Division, Ex-Cell-O

Corporation,” identifying the Plant’s improper disposal of

methylene chloride in steel-bottom drums, and other hazardous

waste concerns. Birch visited the Plant in April, 1982, to

“solve the problem of the drum accumulation.” Pls.’ Exh. 65 at

281:22-282:2. But, Birch’s idea to remediate the problem did

not work, so Davidson made no changes. Later, in 1985, Birch

facilitated an appropriations request for $120,000 from Ex-Cell-

O for Davidson to pay for a waterline for residents whose wells

were contaminated by groundwater pollution from a nearby

landfill where the Plant had sent its waste for disposal.

Other Ex-Cell-O employees addressed pollution problems and

environmental compliance efforts at the Plant. For example, Ex-

Cell-O employee Terrence Filipiak conducted the environmental

audits described above, and regularly took samplings, and

24 conducted Plant inspections. Following New Hampshire’s December

1981 Regulatory Order, Filipiak identified multiple issues

relating to discharges from the Plant, including “discharge of

heat transfer oil and plastisol to the lagoon with a resulting

oil slick and oil soaked lagoon soils;” “water/oil discharge

from the air compressors onto surface soils on the north side of

the plant;” and the “discharge of paint to the northeast plant

storm drain by employees.” Pls.’ Exh. 68. Filipiak instructed

that these discharges cease immediately, be cleaned up, and, in

some circumstances, employees reprimanded.

The Plant continued to discharge contaminated water into

the Site’s lagoon system until 1985 when the lagoons were

finally closed. That closure was largely managed by Davidson’s

employees.

Fireman’s Fund Litigation and Subsequent Events

By 1986, Ex-Cell-O, McCord, and Davidson Rubber were facing

increasing environmental liability under federal environmental

statutes. They sought insurance coverage for various legal

claims relating to the Plant, and other Ex-Cell-O properties.

Litigation ensued, and a several-day bench trial. Fireman’s

Fund Ins. Cos., 750 F. Supp. at 1343–44. As discussed earlier,

Ex-Cell-O, Davidson Rubber and McCord argued that they were

entitled to coverage because the extensive groundwater

25 contamination at the Plant was the result of “two sudden and

accidental chemical spills” in 1977 and 1978. The district

court did not agree, finding that the contamination resulted

from historic, regular operations at the Plant. And, because

the Plant’s operators expected their intentional acts of waste

disposal would result in environmental damage, they were not

entitled to insurance coverage.

In 1987, Davidson Rubber was renamed Davidson Textron,

Inc., and, in 1995 renamed again as “Textron Automotive

Interiors, Inc.” In 2001, Collins and Aikman Products Company

purchased Textron Automotive Interiors, Inc., renaming it

“Collins and Aikman Automotive Interiors, Inc.” Collins and

Aikman Corporation filed for bankruptcy on behalf of itself and

its subsidiaries, including Collins and Aikman Automotive

Interiors, Inc., in 2005. At the time, the New Hampshire

Custodial Trust (the Trust) took title to the Site.

Upon transfer of title to the Trust, plaintiffs

investigated the extent of contamination at the Site. In 2013,

the Site was listed by the EPA on the National Priorities List.

, 75,478 (Dec. 12, 2013). In December 2014,

EPA began a Remedial Investigation of the Site in coordination

with NHDES. So far, the EPA has discovered VOCs in the

groundwater originating from the Farmington Plant, and

26 identified relevant sources of contamination, including an area

near the former percolating lagoons to the east, and the

northwest septic leach field associated with the 1977 Farmington

Plant expansion.

DISCUSSION

CERCLA, which was enacted in 1981 “in response to the

serious environmental and health risks posed by industrial

pollution.” U.S. v. Bestfoods,

, 55–56 (1998),

“establishes a complex statutory scheme for responding to

certain environmental hazards.” Territory of Guam v. U.S.,

(2021) (citations omitted). The Act was

“designed to promote the timely cleanup of hazardous waste sites

and to ensure that the costs of such cleanup efforts were borne

by those responsible for the contamination.” Burlington No. &

Sante Fe Ry. Co. v. U.S.,

(2009) (internal

quotations omitted).

CERCLA “authorizes the EPA to undertake cleanup activities

at designated hazardous sites and then sue to recover costs

incurred from certain liable parties.” United States v. Gen.

Elec. Co.,

(1st Cir. 2012) (citing

(a), 9607(a)) (further citations omitted). It “imposes

strict liability for the costs of cleanup on a party found to be

an owner or operator, past operator, transporter, or arranger.”

27 U.S. v. General Electric. Co.,

(1st Cir. 2012)

(quoting U.S. v. Davis,

(1st Cir. 2001)).

Because CERCLA “is a remedial statute designed to protect and

preserve public health and the environment,” its provisions are

construed “liberally to avoid frustration of the beneficial

legislative purpose.” United States v. Kayser-Roth Corp.,

(1st Cir. 1990) (citations omitted).

For a successful CERCLA claim, plaintiffs must establish:

(1) a release or threatened release of hazardous waste has

occurred, (2) at a facility, (3) causing the EPA to incur

response costs, and (4) the defendant is a responsible party as

defined by

(a). 5 See

(a)(1–4).

Responsible parties include the current owner or operator of a

facility, as well as the owner or operator of a facility at the

time it became contaminated. 42 U.S.C. 107(a).

The parties have stipulated to the majority of CERCLA’s

requirements, i.e.: (1) defendant is a “person” under CERCLA and

New Hampshire law; (2) the Plant is a “facility” under CERCLA

5 Similarly, N.H. Rev. Stat. Ann. 147-B:10 “gives a person who has incurred environmental response costs a right to contribution against a facility's prior owners and operators.” EnergyNorth Nat. Gas, Inc. v. UGI Utilities, Inc., No. CIV. 00- 500-B,

, at *2 (D.N.H. Mar. 28, 2003) (citation omitted).

28 and New Hampshire law; (3) the Plant released hazardous

substances between 1966 and 1986; and (4) plaintiffs have

incurred costs not inconsistent with the National Contingency

Plan (NCP). The parties have further stipulated that (5) McCord

is the successor to McCord Maine; and (6) McCord is the

successor to Ex-Cell-O Corporation. The issue before the court

is whether McCord Maine and/or Ex-Cell-O Corporation “operated”

the Farmington Plant at the time the contamination occurred.

The Supreme Court has directly addressed whether a parent

corporation may “be held liable as operator of a polluting

facility owned and operated by the subsidiary,” in United States

v. Bestfoods, 524 U.S. at 61–62. The Court explained that a

corporate parent is not subject to liability under CERCLA simply

because its subsidiary owns or operates a polluting facility.

However, a parent may be directly liable under CERCLA “in its

own right” if that parent “actively participated in, and

exercised control over, the operations of the facility.

. The Court wrote:

Under the plain language of the statute, any person who operates a polluting facility is directly liable for the costs of cleaning up the pollution. See

(a)(2). This is so regardless of whether that person is the facility's owner, the owner's parent corporation or business partner, or even a saboteur who sneaks into the facility at night to discharge its poisons out of malice. If any such act of operating a corporate subsidiary's facility is done

29 on behalf of a parent corporation, the existence of the parent-subsidiary relationship under state corporate law is simply irrelevant to the issue of direct liability.

.

The Court defined an “operator” for CERCLA purposes as:

someone who directs the workings of, manages, or conducts the affairs of a facility. To sharpen the definition for purposes of CERCLA's concern with environmental contamination, an operator must manage, direct, or conduct operations specifically related to pollution, that is, operations having to do with the leakage or disposal of hazardous waste, or decisions about compliance with environmental regulations.

Bestfoods, 524 U.S. at 66–67 (emphasis added). So, the Court

explained, the operative question “is not whether the parent

operates the subsidiary, but rather whether it operates the

facility, and that operation is evidenced by participation in

the activities of the facility, not the subsidiary.”

.

In the wake of the Bestfoods opinion, our court of appeals

decided United States v. Kayser–Roth Corp.,

(1st

Cir. 2001). In Kayser-Roth, the government asserted that the

parent company defendant was liable for cleanup costs associated

with a Superfund site in Rhode Island as an “operator” under

CERCLA. In applying Bestfoods, Kayser-Roth noted “an arguable

ambiguity” in the Bestfoods opinion, as the Supreme Court

seemingly links the “operational inquiry to the environmental

30 matters noted,” but “[a]t other times, the Court articulates the

relevant parent-facility relationship more broadly, suggesting

an inquiry beyond the parent's direct involvement in pollution-

related activities at the plant.” United States v. Kayser-Roth

Corp.,

(1st Cir. 2001) (citing Bestfoods, 524

U.S. at 66–73). Noting the Supreme Court’s attention to facts

specific to the parent company’s involvement in the subsidiary's

environmental matters, our court of appeals resolved the

ambiguity, stating: “the pollution-related focus is

controlling.” Kayser-Roth,

. Thus, “direct

operator liability requires an ultimate finding of the parent's

involvement with ‘operations having to do with the leakage or

disposal of hazardous waste, or decisions about compliance with

environmental regulations.” Kayser-Roth,

(quoting Bestfoods, 524 U.S. at 66–67).

(1) Defendant’s “Operation” of the Plant Through its Employees

Defendant argues that it is entitled to judgment because

McCord Maine’s and Ex-Cell-O’s role with respect to the Plant

was “ordinary and unremarkable,” and the activities performed

were “typical parent-subsidiary oversight.” Def.’s Mem. in

Supp. of Summary Judgment at 31. McCord Maine and Ex-Cell-O

employees merely provided recommendations and advice, reviewed

and approved capital expenditures, implemented company-wide

31 policies, performed an occasional audit, and shared a

centralized legal department with its subsidiaries, according to

defendant.

Plaintiffs disagree, arguing that the record establishes

that McCord Maine and Ex-Cell-O “operated” the Plant through the

actions of their employees. Plaintiffs focus primarily on

actions taken by Birch and Filipiak.

A. Birch’s Role at the Plant

The parties’ portrayals of Birch’s role with respect to the

Plant and its wastewater issues are quite disparate. Defendant

says that Birch’s involvement with the Farmington Plant was

“minimal,” and “entirely within the typical boundaries of a

parent company conducting routine oversight” of a subsidiary.

Def.’s Mem. in Supp. of Summary Judgment, at 2. Defendant

relies on Birch’s testimony that he had no authority to direct

or control operations at McCord Maine or Ex-Cell-O facilities,

that he served only as a “resource” to the Plant, and that he

acted as a “consultant.”

at 35 (citing Def.’s Exh. 12, at

72:8-16). Defendant argues that Birch’s “suggestions and

recommendations to Davidson were part and parcel of good

parental oversight,” id. at 37, and that management of the

Plant’s environmental compliance fell squarely on Davidson

employees.

32 For their part, plaintiffs do not dispute that Davidson

employees also managed wastewater pollution at the Plant. But,

as they correctly point out, liability under CERCLA and New

Hampshire law is joint and several. See Atl. Richfield Co. v.

Christian,

, 6–7 (2020) (“Responsible parties are

jointly and severally liable for the full cost of the cleanup,

but may seek contribution from other responsible parties.”)

(citing

(f )(1)). Here, plaintiffs say,

defendant is liable because Birch regularly managed and made

decisions about pollution and environmental compliance at the

Plant while acting solely in his capacity as an employee of

McCord Maine and Ex-Cell-O.

The Supreme Court has instructed that “the verb ‘to

operate’” means, in this context, “more than mere mechanical

activation of pumps and valves, and must be read to contemplate

‘operation’ as including the exercise of direction over the

facility's activities.” Bestfoods,

(cleaned up).

The record establishes that, while Birch may have viewed himself

as a “consultant” to the Davidson Plant, in practice, Birch’s

role in the Plant’s environmental compliance efforts and

operations in the 1970s, and specifically those operations

relating to the Plant’s wastewater, was significant and, as a

33 practical matter, authoritative. 6 For example, Hynes (who,

according to defendant, was a “key player in managing the water

pollution issues,” def.’s opp. to pls.’ mot. for summary

judgment at 7) testified:

Q. As of April 17th, 1974, what was R.F. Birch's position with Davidson?

A. I believe he was environmental coordinator, some title like that, out of the Detroit office.

6 While Birch characterizes his role as a “consultant,” other testimony he provided evidences the effective role he generally played with respect to environmental issues at defendant’s subsidiaries. For instance, when asked whether he was responsible “for subsidiaries of Ex-Cell-O Corporation personally,” Birch responded:

Ex-Cell-0 is a very decentralized company, and my relationship with a plant is determined in a large subsidiary such as Davidson Rubber with an environmental person like Howard Williams, my role is that of an overseer; In a small plant without environmental capability: my group or myself would get involved even to the level of design of equipment.

Def.’s Opp. Exh. 2 at 66-67.

As noted supra, Davidson Rubber did not employ an “environmental person” until 1976. So, while Williams may have taken the lead on the Plant’s environmental compliance post- 1976, prior to that point, Birch’s testimony (and other evidence in the record) suggests that he was involved in managing environmental operations at the Plant (“even to the level of design of equipment.” Id.).

34 Q. Was it your understanding that in that position he had some responsibility for environmental matters pertaining to the Farmington plant as well as others? . . . A. I think so.

Q. Was he the corporate environmental coordinator at that time?

. . .

Q. If you know.

A. I think so.

Pls.’ Exh. 97 at 123:18-124:9. And, critically, Hynes

identified Birch as one of the mangers “primarily responsible”

for deciding to employ the lagoon water treatment system option.

See Pls.’ Exh. 21 at 141:10-22 (emphasis added). 7

Birch often commented on environmental issues at the Plant,

generally, and the Plant’s wastewater problems, specifically.

According to defendant, Birch was offering mere

“recommendations,” not directives or orders, and consistently

used “language of advice and support rather than direction and

control.” Def.’s Mem. in Supp. of Mot. for Summary Judgment

7 Defendant objects to Hynes testimony as “speculative” and “lacking foundation.” Def.’s Reply in Supp. of Mot. for Summary Judgment at 6. But, given defendant’s position that Hynes was a key player in managing environmental compliance at the Plant, and the passage of time, Hynes’s memory is certainly relevant and probative.

35 at 36. And, defendant says, plant employees understood that

advice as recommendations, they were free to independently

evaluate and disregard, not mandates.

Birch’s input was not always followed, 8 but, most of the

time, the Plant did as Birch advised. For example, Birch’s 1971

memo, relied upon by defendant, states that the five action

items he proposes “should be done on a crash basis” to address

the Plant’s wastewater issues. Pls.’ Exh. 23. As Birch

instructed, the majority of those items were quickly

implemented. Testimony in the record also reveals that Davidson

employees did not view Birch’s instructions as entirely

optional. For example, Davidson employee Cochrane testified

that, while he was “not quite sure what [Birch’s] position was

in ’71,” Birch frequently visited the Plant, and, after touring,

“usually would leave with reports of what should be done and

would either praise us or tell us that we needed to do certain -

- make corrections, whatever.” Pls.’ Exh 95 at 73:3 – 74:10

(emphasis added).

8 For example, defendant points out that the Plant did not implement one of the five actions that Birch recommended in his November, 1971, memo. The Plant also initially rejected Birch’s suggestion that an aerated lagoon be built to treat wastewater. A concrete chlorination system was developed instead (although, eventually, the lagoons were constructed).

36 Moreover, other testimony in the record shows that Birch

himself did not view his “suggestions” as optional. For

example, in Birch’s description of the Ex-Cell-O auditing

process, he refers to the audit findings as “recommendations,”

but also testified that certain audit findings were categorized

as “things that [the Plant] better damn well fix like right

now,” and that the Plant was required to provide a schedule

within six weeks detailing exactly how identified problems would

be corrected. Pls.’ Exh. 16 at 114:9-23. So, as described by

Birch, implementation of action items arising from Ex-Cell-O’s

audits was neither optional nor discretionary.

The record establishes that, while Davidson employees were,

of course, also involved in management of the Plant’s water

pollution, Birch played a significant, influential, and

effective role as well. Indeed, the factual record establishes

that Birch worked closely with Davidson employees on the Plant’s

wastewater pollution problem, and he did so authoritatively.

Birch frequently visited the Plant (at least quarterly, see

pls.’ exh. 95 at 73:16-21), and was fully familiar with the

Site, its manufacturing equipment, and its production processes

(having overseen its construction as a Davidson employee). He

attended and participated in meetings to devise solutions to the

Plant’s wastewater pollution issues, and he was frequently

37 copied on memos and notes from EEE, Inc., proposing potential

solutions. In 1974, Birch directed Plant employees to prepare

an appropriations request for a wastewater treatment facility at

the Plant, and he promised that he would ensure that request

“cleared Detroit.” He also directed Plant employees to

implement short-term treatment steps in the meantime. The

appropriations request later submitted by the Plant noted

Birch’s endorsement. Birch had approval authority over the

design of the Plant’s 1977 septic system expansion, a system

which ultimately contributed to the contamination of the Site’s

groundwater. 9 And, finally, as previously noted, Hynes testified

that Birch was one of the individuals “primarily” responsible

for selection of the lagoon water treatment system. Birch was

plainly an integral and authoritative member of a team making

decisions about how to handle the Plant’s pollution problems.

9 Defendant argues that any assistance Birch provided regarding the design of the septic system is irrelevant, and, in support, cites to Am. Premier Underwriters, Inc. v. Gen. Elec. Co.,

(6th Cir. 2021), where the Court of Appeals for the Sixth Circuit stated: “design is insufficient by itself to generate liability; CERCLA liability attaches to operators, not designers.” Defendant’s reliance is misplaced. EEI designed the septic system, not Birch, but Am. Premier is distinguishable. There, GE served merely as a “service provider,” performing a contractual duty, with “no say on matters related to waste disposal and environmental compliance.”

; see also

(“nothing [plaintiff] points to shows that GE told Penn Central what to do with the [hazardous substance].”).

38 His participation and his ability to influence decisions and

actions carried the full weight of the parent company – a

practical reality that was no doubt not misunderstood by

Davidson management and employees.

Birch was also directly involved in the Plant’s

environmental compliance efforts, specifically those efforts

relating to its wastewater disposal practices. Following the

Clean Water Act’s passage, Birch addressed its requirements with

Plant employees. Cochrane testified that, as a result, the

Plant “started programs of following [Birch’s] recommendations

of monitoring and reducing and all those things that he had

recommended.” Pls.’ Exh. 95 at 75:9-14. Cochran also testified

that Birch personally reviewed the results of the Plant’s

effluent monitoring:

Q. In monitoring the makeup of the effluents, what was being looked for?

A. I can't specifically recall. I know that there [were] specific criteria that would be monitored, and the results were being reviewed by people such as [EEI’s William] Fletcher and Birch and giving us advice as to what to be done.

Pls.’ Exh. 95 at 76:21-77:1. Compare Pls.’ Exh. 97 at 93:5-20

(Hynes responding “no” when questioned whether he reviewed water

sample reports from time to time);

at 96:11-17 and 98:13-19

(Hynes testifying that he did “not recall” receiving information

39 as to “whether or not maximum bacterial contamination levels”

were found in water samples, and that he “would not know if it

was or not”).

Birch weighed in on other environmental issues at the Plant

as well. He was instrumental in bringing about the Plant’s

decision to segregate solid and liquid wastes for disposal. See

Pls.’ Exh. 95 at 85:14-22. (“Q: At some point, did you

personally decide that it was necessary to segregate solid and

liquid wastes for disposal? [Cochrane:] I don't think I made

that decision. I think it was made as a decision of the group,

a meeting with Dick Birch, et cetera.”). In 1975 or 1976, he

investigated the “feasibility of the incineration of the

Farmington plant waste,” “seeking a person to manufacture an

incinerator so that we could take care of Farmington wastes

ourselves.” Pls.’ Exh. 103 at 990:13-991:3. Birch was copied

on monthly monitoring reports sent to the EPA in 1974 and 1975,

and at least one of the Plant’s discharge permit applications

(in 1972). And, when asked who was responsible for “drafting

permit applications under environmental statutes and

regulations” for Davidson in 1974, Hynes responded: “Could be

Dick Birch,” pls.’ exh. 97 at 120:19-24, which suggests that

Birch was, at a minimum, involved in the Company’s permitting

efforts. Finally, Birch visited the Plant to resolve the

40 pollution-related drum storage issue in 1982, and he worked to

resolve the Plant’s potential CERCLA liability arising out of

waste disposal at the Silresim Superfund Site.

Given all the above, characterizing Birch’s involvement as

“casual” or “occasional” would understate the circumstances to

the point of substantial distortion. The record establishes

Birch’s active, sustained, detailed, authoritative and effective

participation in the Plant’s decisions regarding its wastewater

disposal practices, and his involvement in the Plant’s ongoing

environmental compliance efforts. Moreover, Birch’s

recommendation and approval of the lagoons as a wastewater

treatment option (and, potentially, his approval of the 1977

septic system) undoubtedly contributed directly to the Plant’s

pollution of the Site’s groundwater.

B. Other McCord Maine/Ex-Cell-O Employees

Other McCord Maine and Ex-Cell-O employees participated in

the Plant’s environmental compliance efforts and wastewater

management. But, none of their efforts (at least as reflected

in the current record) were as extensive or authoritative as

Birch’s with respect to the Plant. Vashak, for example,

provided advice and legal assistance to the Plant with respect

to environmental compliance and litigation. However, the

Plant’s reliance on Ex-Cell-O’s legal department is fairly

41 typical parent-subsidiary interaction and does not raise an

eyebrow. See, e.g., Trinity Industries, Inc. v. Greenlease

Holding Company,

(3d Cir. 2018) (parent’s

provision of “legal advice regarding compliance with

environmental laws” is “typical” of parent-subsidiary

relationship).

Filipiak’s role, however, is more notable. As discussed,

Filipiak, an Ex-Cell-O employee, oversaw environmental audits of

the Plant, and, in that capacity, visited regularly to conduct

sampling and inspections. Following a visit to the Plant in

October, 1982, Filipiak identified several problematic

environmental practices at the Plant, and instructed that those

practices be stopped immediately. He wrote:

Other areas which require attention noticed during my visit include: The continued buildup of methylene chloride contaminated foam with no solution for disposal, material substitutions and/or provisions for secure storage. This situation is subject to fine by the EPA because of the current poor storage practice used.

The discharge of heat transfer oil and plastisol to the lagoon with a resulting oil slick and oil soaked lagoon soils must be stopped immediately, with cleanup of soils and surface waters or face a citation from local environmental agencies. Disposal of this material must be made through a waste processor or hazardous waste facility.

The water/oil discharge from the air compressors onto surface soils on the north side of the plant is a violation of EPA 40CFR112 and is subject to citation.

42 An oil separation tank should be placed to collect all discharges, with the periodic draining of the floating oils to a waste oil holding area for reclaim.

The discharge of paint to the northeast plant storm drain by employees must be halted immediately, with the reprimand of those responsible employees. The State of New Hampshire forbids the discharge of any foreign materials into a storm water system other than storm water, the impact on area waters could be devastating (fish kill, stream discoloration, etc.).

Pls.’ Exh. 68 (emphases added).

Filipiak’s October, 1982, memo is noteworthy because it

discloses an Ex-Cell-O employee directing the Plant to take

specific action with respect to the Plant’s wastewater disposal

practices. Defendant argues that Filipiak had “no authority” to

direct Plant employees to take action. See Def.’s Opp. to Pls.’

Mot. for Summary Judgment at 37. While that may be correct as a

matter of corporate law, as a practical matter, Filipiak would

only bother visiting the Plant, inspecting the Plant, and then

firmly instructing Plant employees that certain action must be

taken, only if he carried the authority of, and directive intent

of the parent company. Howard Greenlaw, Farmington’s utilities

group leader, later testified that the Plant did comply with at

least some of Filipiak’s instructions. See Def.’s Opp. Exh. 31

at 208:12-23 (“We implemented his recommendation, it refers to

here, the oil separation tank.”). Filipiak’s role, then, like

Birch’s, establishes that McCord Maine and Ex-Cell-O

43 substantially and effectually participated in managing the

environmental issues and pollution contamination at the Plant.

C. Frequency of Employee Involvement

Defendant contends that it is entitled to summary judgment

because, whatever involvement its employees may have had with

the Plant, that involvement was “too sporadic” to establish

CERCLA operator liability. Def.’s Reply in Supp. of Summary

Judgment at 9. Defendant argues that, for CERCLA liability to

attach, an operator must make decisions on a frequent, day-to-

day basis. 10

10 In support, defendant relies largely on City of Wichita v. Trs. of APCO Oil Corp. Liquidating Trust,

(D. Kan. 2003). City of Wichita is distinguishable because the court was examining whether a company’s officers and directors could be considered “operators” for purposes of CERCLA. Similarly, in City of N.Y. v. N.Y. Cross Harbor R.R. Terminal Corp., No. 98CV7227ARRRML,

(E.D.N.Y. Jan. 17, 2006), another case upon which defendant relies, plaintiff sought to hold the defendant’s owner/corporate officer liable as an operator under CERCLA.

In that context, the court in Wichita wrote: “courts applying the actual control test have consistently required more than casual or occasional involvement in such decisions. Instead, an operator under CERCLA must make the relevant decisions on a frequent, typically day-to-day, basis.” (emphasis added) (citations omitted). A strict frequency requirement makes sense when assessing an individual’s personal liability. But, that is not this case.

In addition, defendant does not explain the “actual control” test cited by the court in Wichita, or whether it applies here. And finally, nearly every one of the cases cited

44 To be sure, Birch and Filipiak were not participating in or

influencing decisions about environmental compliance for the

Plant on a daily basis. But, defendant’s argument that day-to-

day activity is required to support a finding of CERCLA operator

liability contradicts Bestfoods and subsequent precedent in this

Circuit. In United States v. Kayser-Roth Corp.,

(D.R.I. 2000), aff'd sub nom. United States v. Kayser-

Roth Corp.,

, the district court noted that Bestfoods

“makes clear that the imposition of operator liability does not

require a finding that the parent directly participated in the

day-to-day activities at the hazardous waste facility.

Bestfoods recognizes that operator liability may be imposed when

the parent controls the manner in which a subsidiary manages the

facility.”

What’s more, by focusing on the frequency of the parent

company’s involvement, defendant misses the forest for the

trees. Because “[o]perator liability requires an ultimate

finding of involvement with operations having to do with the

leakage or disposal of hazardous waste,” Am. Cyanamid Co. v.

by the Wichita court in support of the statement upon which defendant relies predates Bestfoods.

For all those reasons, defendant’s reliance is misplaced.

45 Capuano,

, 23 (1st Cir. 2004) (cleaned up) (internal

quotations omitted), the focus of the operator inquiry is broad.

The frequency of the parent’s involvement is relevant, to be

sure, but the “degree and detail” of the parent company’s

involvement matters much more. Bestfoods,

.

Imagine that a parent company directs its subsidiary to dump all

hazardous waste directly into a lake abutting their property,

and the subsidiary complies with that directive The parent

company could hardly avoid CERCLA “operator” liability by

arguing that it was only involved on one solitary occasion.

In any event, with respect to Plant operations involving

hazardous waste and environmental compliance, Birch’s

involvement can be fairly characterized as “regular” and

“ongoing,” influential, directive, and authoritative. City of

N.Y. v. N.Y. Cross Harbor R.R. Terminal Corp.,

,

at *13, especially given Birch’s consistent involvement with the

Plant’s activity related to its effluent disposal practices in

the early 1970s. For that reason as well, defendant’s argument

is not persuasive.

46 (2) Treatment as an Internal Division: Relationship Between Davidson & McCord Maine/Ex-Cell-O

Plaintiffs offer an alternative theory of liability:

Because defendant treated Davidson as an internal division and

disregarded corporate formalities, the court should treat

Davidson as an internal division and hold defendant directly

liable on that basis. In support of that argument, plaintiffs

contend that defendant held Davidson out as its division to the

public and regulators. Ex-Cell-O, specifically, plaintiffs say,

failed to observe corporate norms when it identified itself as

the owner and operator of the Plant in permit applications

submitted to government agencies, and by repeatedly describing

Davidson Rubber as its “division,” instead of its subsidiary, in

annual reports, Board of Director materials, and company

correspondence.

Plaintiffs draw further support from Ex-Cell-O’s

appropriation request procedures, which required Ex-Cell-O

approval for seemingly modest expenditures, and that Davidson

Rubber employees, including a Rule 30(b)(6) witness chosen by

defendant to testify on its behalf, testified that they thought

Davidson was a division of Ex-Cell-O, not a subsidiary.

Finally, plaintiffs point out that defendant has failed to

produce any documents that evidence meetings of the Davidson

Board of Directors, which, they say, “demonstrates a failure to

47 meet and maintain records, and the failure to respect Davidson

Rubber’s independent existence.” Pls.’ Mem. in Supp. of Mot.

for Summary Judgment at 40.

Plaintiffs offer little authoritative support for their

position, and applicable law is to the contrary. Our court of

appeals has expressly noted that “the pollution-related focus is

controlling,” and “direct operator liability requires an

ultimate finding of the parent's involvement with ‘operations

having to do with the leakage or disposal of hazardous waste, or

decisions about compliance with environmental regulations.”

Kayser-Roth,

. And, as noted by the court in

Yankee Gas Servs. Co. v. UGI Utilities, Inc.:

In resolving whether a parent corporation manages, directs, and conducts the operations of a facility that relate to pollution, courts should focus on the parent's interaction with the subsidiary's facility, and not on the relationship between the two corporations. As the Supreme Court put it, “[t]he question is not whether the parent operates the subsidiary, but rather whether it operates the facility, and that operation is evidenced by participation in the activities of the facility, not the subsidiary.” Bestfoods,

.

[ . . . ]

Thus, control of the subsidiary, if it is extensive enough, may give rise to indirect liability via piercing of the corporate veil, but it does not give rise to direct liability as an operator under CERCLA.

48

(D. Conn. 2009) (emphasis added). See

also PPG Indus. Inc. v. United States,

(3d

Cir. 2020) (“operator liability requires something more than

general control over an industry or facility — it requires some

indicia of control over the facility's polluting activities.”);

Frontier Commc'ns Corp. v. Barrett Paving Materials, Inc., No.

CIV.07-113-B-S,

, at *5 (D. Me. Aug. 14, 2009),

report and recommendation adopted, No. CIV.07-113-B-S,

(D. Me. Sept. 22, 2009) (“Evidence that is salient to

this analysis is evidence that depicts the relationship between

the parent and the facility itself, rather than the parent-

subsidiary relationship.”).

Nevertheless, some courts have taken the relationship

between a parent and its subsidiary into account when

determining “whether a parent corporation should incur direct

operator liability at a facility.” United States v. Sterling

Centrecorp Inc.,

(E.D. Cal. 2013),

aff'd,

(9th Cir. 2020) (collecting cases). Those

courts have reasoned that, while “such evidence cannot be

determinative of the issue of direct operator or arranger

liability, evidence of the corporate relationship between

[parent company] and [its subsidiary] is relevant to provide

important factual background in this matter.” Pinal Creek Grp.

49 v. Newmont Mining Corp.,

(D. Ariz.

2005). The district court’s summation of the issue in Yankee

Gas Servs. Co. v. UGI Utilities, Inc., is apt:

Plaintiffs contend that inquiry into the general relationship between [the parent] and its subsidiaries remains important, despite statements in Bestfoods to the contrary. The Court is skeptical of Plaintiffs' claims, since Bestfoods emphatically directs lower courts' attention to the relationship between the parent corporation and the subsidiary's facility, not the relationship between the parent and the subsidiary itself. . . . Nevertheless, since the Supreme Court also indicated that eccentricity or adherence to ordinary corporate norms remains a touchstone of the Bestfoods operator inquiry, the Court begins its discussion with an examination of the overall relationship between [parent] and [its subsidiary].

(D. Conn. 2009).

The court shares the skepticism expressed in Yankee Gas

Servs. But, considering evidence relating to the overall

relationship between Davidson and McCord Maine/Ex-Cell-O for the

limited purpose of providing factual background and context does

not divert the proper legal analysis away from McCord Maine’s

and Ex-Cell-O’s relationship with the Plant’s hazardous waste

disposal actions and environmental compliance efforts.

(3) Eccentricity and Corporate Norms

The critical question remains: Whether McCord Maine and Ex-

Cell-O’s involvement with the Plant’s wastewater pollution

constitutes managing, directing, or conducting “operations

50 specifically related to pollution, that is, operations having to

do with the leakage or disposal of hazardous waste, or decisions

about compliance with environmental regulations.” Bestfoods,

. In that regard, the Supreme Court instructs

that the proper inquiry is “whether, in degree and detail,

actions directed to the facility by the agent of the parent

alone are eccentric under accepted norms of parental oversight

of a subsidiary’s facility.” Bestfoods,

.

Plaintiffs rely heavily on Kayser-Roth, 11 discussed supra,

in which our court of appeals found the parent company liable as

11 Plaintiffs also rely on the report of their expert, Dan Leistra-Jones, who examines the role that Birch played at the Plant during the McCord Maine years. Leistra-Jones concludes that Birch “provided environmental management services, including waste disposal and environmental compliance, for Davidson Rubber, even though he was an employee of McCord ME.” Pls.’ Exh. 5 at p. 27. He notes that, because Birch was an employee of McCord Maine at that time, not Davidson, and because Birch’s involvement with the Plant’s environmental management and regulatory compliance services was so extensive, McCord’s and Davidson’s failure to formally document Birch’s involvement is troubling. Leistra-Jones opines that Birch’s “level of involvement . . . particularly in the absence of a secondment or management services agreement, indicates a failure of Davidson Rubber and McCord ME to follow corporate norms with respect to maintaining separate corporate identities.” Pls.’ Exh. 5 at p. 20.

In rebuttal, defendant relies on its own expert, Dr. Edward Zajac. Dr. Zajac opines that Birch’s role with respect to the Plant’s “water pollution issues and with other environmental and construction matters at Farmington in the 1970s and 1980s was consistent with normal corporate practice.” Def.’s Opp. Exh. 14. But defendant also makes the argument “that expert

51 an operator based on: (1) the parents’ knowledge of the

subsidiaries’ manufacturing process involving hazardous

substances; (2) the parents’ approval of that manufacturing

process, based on cost studies that had been mandated by the

parent; (3) the parents’ legal departments’ request to be

notified of government contact regarding environmental matters;

and (4) the parents’ settlement decisions made on behalf of the

subsidiary in an earlier environmental matter.

Our appellate court’s analysis focused largely on the

activities of Kayser-Roth’s executive vice president, who,

wearing “no hat . . . but the parent’s,” exerted operational

control over environmental matters at the subsidiary’s facility.

Id. at 103 (further quotations omitted). Those activities

included directing that cost studies be conducted to evaluate

various solutions to a wastewater discharge issue; rejecting

testimony is not necessary for the Court to evaluate and rule on the basic principles of corporate governance at issue in this case,” and that, to the extent such testimony is necessary, the case cannot be resolved on summary judgment. Def.’s Opp. to Pls.’ Mot. for Summary Judgment at 17.

The court agrees with defendant on both points. “Competing expert opinions present the ‘classic battle of the experts' and it is up to a jury to evaluate what weight and credibility each expert opinion deserves.” Phillips v. Cohen,

(6th Cir. 2005) (cleaned up). And, expert testimony, while perhaps helpful, is not necessary to resolve the issues in this case.

52 certain treatment options and approving others based on his

assessment; and playing a “critical leadership role” in

settlement of a separate EPA action. The court concluded that

Kayser-Roth’s executive had “played a central role in decisions

about environmental compliance . . . and specifically the

decision to implement that cleaning process,” going “far beyond

the norms of parental oversight, reflecting instead direct

control by the parent at the . . . facility over operations

having to do with the leakage or disposal of hazardous waste, or

decisions about compliance with environmental regulations.” Id.

at 104 (internal citations omitted).

Plaintiffs’ reliance on Kayser-Roth is well-taken, given

its similarities to the facts here. In both cases, a parent

company employee (who was not also an employee of the

subsidiary) played a significant role in the environmental

operations of its subsidiary. Birch, like the executive in

Kayser-Roth, played a central role in the Plant’s decision to

install the lagoon wastewater treatment system, from which

hazardous wastes leached into the Site’s groundwater. And, like

the executive in Kayser-Roth, Birch played a critical role in

driving decisions about environmental compliance at the Plant.

For its part, defendant relies on Trinity Industries, Inc.

v. Greenlease Holding Company,

. In that case,

53 the parent company employed “only a professional staff, such as

accountants, actuaries, and lawyers,” who assisted the

subsidiary with administrative work.

. The Court of

Appeals for the Third Circuit noted that the parent “did not

employ any engineers or persons with technical experience in

manufacturing that could make decisions for [the subsidiary]

with respect to environmental compliance or waste management.”

. Accordingly, it was the subsidiary’s employees, not

the parent’s, who coordinated disposal with outside contractors

and communicated with regulators on environmental matters. But

here, Birch’s technical background in environmental compliance

was significant. And, as discussed repeatedly, his efforts with

respect to the Plant went far beyond providing administrative

assistance, offering legal advice, and monitoring the activities

of the Plant.

The relevant case law is not easily applied in cases like

this. “Because determining operator liability depends so

heavily on the facts of each case, it is difficult to draw

concise analogies between this case and other CERCLA operator

cases.” Union Pac. R.R. Co. v. Oglebay Norton Mins., Inc., No.

EP-17-CV-47-PRM,

, at *7 (W.D. Tex. Apr. 9,

2018). Bestfoods “remains the clearest guiding doctrine in

resolving this dispute.”

As set forth at length herein,

54 even when viewed in the light most favorable to the defendant,

the record simply does not support a finding that Birch’s

involvement with the Plant was “within the typical boundaries of

a parent company conducting routine oversight of a subsidiary’s

operations.” Def.’s Mem. in Supp. of Summary Judgment, at 2.

Instead, with “no hat to wear but the parent’s hat,” Bestfoods,

, Birch worked closely with Davidson’s employees,

in an influential and authoritative manner, over a period of

several years, to address the Plant’s hazardous wastewater

issues. Birch’s activities in that regard cannot plausibly be

characterized as the occasional provision of general advice on

environmental matters. Bestfoods instructs that where an

individual is employed solely by the parent company, and not the

subsidiary, that employee’s actions “were of necessity taken

only on behalf of” the parent company. Bestfoods, 524 U.S. at,

72.

The court finds that McCord Maine’s and Ex-Cell-O’s roles

with respect to management of hazardous waste matters at the

Plant and decisions about environmental compliance went well

beyond activities consistent with a parent’s ownership status,

“such as monitoring of the subsidiary’s performance, supervision

of the subsidiary’s finance and capital budget decisions, and

55 articulation of general policies and procedures.” Defendant’s

motion for summary judgment is therefore denied.

As in many cases, the issues here turn on the realities

presented in the record. Plaintiffs have established McCord

Maine’s and Ex-Cell-O’s “involvement with operations having to

do with the leakage or disposal of hazardous waste, or decisions

about compliance with environmental regulations.” Kayser-Roth

Corp.,

. The material facts are not genuinely

disputed, and plaintiffs are entitled to judgment as a matter of

law. Accordingly, plaintiffs’ motion for partial summary

judgment is granted.

CONCLUSION

For the foregoing reasons, as well as those set forth in

plaintiffs' memoranda (documents no. 38-1, 46-1, and 50),

plaintiffs’ Joint Motion for Partial Summary Judgment (document

no. 38) is GRANTED, and defendant’s Motion for Summary Judgment

on Liability (document no. 39) is DENIED.

SO ORDERED.

____________________________ Steven J. McAuliffe United States District Judge

March 28, 2025

cc: Counsel of Record

56