In the United States Court of Federal Claims
Consl. Ct. No. 06-141 C
Filed: January 6, 2017*
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*
*
* Comprehensive Environmental Response,
SHELL OIL COMPANY, ATLANTIC * Compensation, and Liability Act,
RICHFIELD COMPANY, TEXACO INC., and * 42 U.S.C. § 9601 et seq.;
UNION OIL COMPANY OF CALIFORNIA, * Damages Caused By Breach Of Contract;
* Federal Rules of Evidence (“FRE”) 702
Plaintiffs, * (Experts);
* Remand.
v. *
*
THE UNITED STATES, *
*
Defendant. *
*
*
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Michael William Kirk, Cooper & Kirk, PLLC, Washington, D. C., Counsel for Plaintiffs.
Stephen Carl Tosini, United States Department of Justice, Civil Division, Washington, D.C.,
Counsel for the Government.
MEMORANDUM OPINION AND FINAL ORDER ON REMAND
REGARDING BREACH OF CONTRACT DAMAGES
BRADEN, Judge.
This case was filed almost a decade ago, after the United States (“the Government”)
reneged on contractual promises made during World War II to American oil companies that
voluntarily agreed to “work night and day,” without regard to shareholder obligations, to increase
the production of military aviation gas. In 2014, the United States Court of Appeals for the Federal
Circuit held the Government was liable for a breach of contract, but instructed this court to
ascertain whether that breach caused damages and, if so, the amount. After affording the parties
additional discovery and an evidentiary hearing, the court has determined that the above captioned
oil companies collectively are entitled to $99,590,847.32, including $30,991,111.02 in interest
which the U.S. taxpayers could have avoided paying, if the Government had lived up to its
obligations, instead of wasting years in litigation.
* On December 30, 2016, the court forwarded a sealed copy of this Memorandum Opinion
And Final Order On Remand Regarding Breach Of Contract Damages to the parties to note any
citation or editorial errors requiring correction. On January 4, 2017, the above captioned oil
companies submitted proposed editorial changes. The court has incorporated those changes and
corrected or clarified certain portions herein. The Government did not submit any changes.
To facilitate review of this Memorandum Opinion and Final Order On Remand Regarding
Breach Of Contract Damages, the court has provided the following outline:
I. THE CRITICAL ROLE ASSUMED BY THE OIL COMPANIES DURING WORLD
WAR II TO INCREASE PRODUCTION OF MILITARY AVIATION GASOLINE AND
RELATED ACID WASTE DISPOSAL ISSUES (1940–1946).
II. THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND
LIABILITY ACT LITIGATION (1991–2005).
III. THE BREACH OF CONTRACT LITIGATION (2005 TO THE PRESENT).
A. Initial Proceedings Before The United States Court of Federal Claims (2005–2009).
B. The First Appeal To The United States Court Of Appeals For The Federal Circuit
(2009–2010).
C. The First Remand To The United States Court Of Federal Claims (2010).
D. The Second Appeal To The United States Court Of Appeals For The Federal Circuit
(2010–2012).
E. The Second Remand To The United States Court Of Federal Claims (2012–2013).
F. The Third Appeal To The United States Court Of Appeals For The Federal Circuit
(2014).
G. The Third Remand To The United States Court Of Federal Claims (2014 To The
Present).
IV. DISCUSSION.
A. Jurisdiction.
B. Standing.
C. Evidence Adduced At The Remand Proceeding.
1. Crude Oil Was Processed Into Aviation Gasoline And Other Petroleum By-
Products, Both Of Which Resulted In “Acid Waste.”
2. Spent Alkylation Acid And Acid Sludge Are Components Of “Acid Waste” And
Both Were Disposed Of At The McColl Site.
a. The Opinion Of The Oil Companies’ Petroleum Engineering Expert.
i. Spent Alkylation Acid Was Disposed Of At The McColl Site.
ii. Acid Sludge Was Disposed Of At The McColl Site.
2
b. The Opinion Of The Government’s Petroleum Engineering Expert.
i. Little Or No Spent Alkylation Acid Was Disposed Of At The McColl Site.
ii. Acid Sludge Was Disposed Of At The McColl Site.
c. The Court’s Findings.
3. The McColl Site.
a. The Physical Properties Of The McColl Site.
b. “Contaminants Of Concern” At The McColl Site.
c. The Remediation Solution Elected By The Environmental Protection Agency
For The McColl Site.
D. All Of The Acid Waste Disposed Of At The McColl Site Was “By Reason Of” The
Avgas Contracts.
1. The Relevant Causation Standard.
2. In 1942, It Was Reasonably Foreseeable To The Government That The Taxes
Clause Of The Avgas Contracts Could Be Invoked In the Future To Compensate
The Oil Companies For “New Charges” Required To Remediate Acid Waste At
The McColl Site.
3. The Requirements Of The Avgas Contracts Were A “Substantial Causal” Factor In
The Remediation Of Acid Waste At The McColl Site.
4. The Breach of Contract Damages Have Been Established With “Reasonable
Certainty.”
a. The Oil Companies’ Proffer And Argument.
b. The Government’s Response.
c. The Oil Companies’ Reply.
d. The Court’s Resolution.
V. CONCLUSION.
COURT APPENDICES
COURT EXHIBIT A – The Record On Remand
COURT EXHIBIT B – Evidentiary Rulings Regarding Admissibility Of Exhibits And
Written Direct Testimony
3
COURT EXHIBIT C
Plaintiffs’ Damages Exhibit 1
Plaintiffs’ Damages Exhibit 2
Plaintiffs’ Damages Exhibit 3
Plaintiffs’ Damages Exhibit 4
Plaintiffs’ Damages Exhibit 5
* * *
4
I. THE CRITICAL ROLE ASSUMED BY THE OIL COMPANIES DURING
WORLD WAR II TO INCREASE PRODUCTION OF MILITARY AVIATION
GASOLINE AND RELATED ACID WASTE DISPOSAL ISSUES (1940–1946).1
In August 1940, the Reconstruction Finance Corporation (“RFC”) established the Defense
Supplies Corporation (“DSC”) to buy, sell, and produce 100 octane military aviation gasoline
(“avgas”) and make loans to private companies to construct avgas production facilities. DX 1054
(Dr. Brigham) at 18, 44. On August 16, 1940, the DSC was authorized to spend $50 million to
purchase avgas for resale to the United States Army and Navy. PX 1298 (9/27/40 letter from RFC
to Secretary of Navy).2
On March 11, 1941, the Lend-Lease Act was enacted to provide military supplies and
equipment to Great Britain and other nations, at war with Germany, as well as to the Republic of
1
The historical background of this protracted litigation most recently was discussed in:
Shell Oil Co. v. United States, 751 F.3d 1282, 1285–88 (Fed. Cir. 2014) and in new evidence
adduced at an evidentiary hearing on breach of contract damages that took place on February 16,
17, and 19, 2016, in Washington, D.C. (TR 1-642), during which Plaintiffs’ Exhibits (PX 1–1308)
and the Government’s Exhibits (DX 1–1056) were introduced. The court has admitted all of these
exhibits, except for certain portions of PX 17, and the entirety of PX 612 and PX 613. Court
Exhibit A (The Record on Remand) at 32; see also Court Exhibit B (Evidentiary Rulings
Regarding Admissibility Of Exhibits And Written Direct Testimony).
At that February 2016 evidentiary hearing, the Government proffered two historical experts
to supplement the record that the appellate court considered in 2014. Dr. Jay L. Brigham holds a
Ph.D. in United States history from the University of California, Riverside and an M.A. degree in
United States history from the University of Maryland, College Park DX 1054 (Dr. Brigham) at
1. His dissertation concerned the electrification of the United States in the early twentieth century.
DX 1054 (Dr. Brigham) at 1. His M.A. thesis focused on American Isolationism in the years
preceding World War II. DX 1054 (Dr. Brigham) at 1. Since 1997, he has worked at a public
history and public policy firm known as Morgan, Angel & Associates. DX 1054 at 1. Dr. Brigham
was proffered by the Government as an expert on twentieth-century United States history, focusing
particularly on economics and World War II. TR at 280.
Dr. Rochelle Bookspan holds a B.A. degree in History from Ohio State University; a M.A.
degree in American History from the University of Arizona; a M.A. degree in City Planning from
the University of Pennsylvania; and a Ph.D. in History from the University of California, Santa
Barbara. DX 1055 (Dr. Bookspan) at 2. She is as an independent consulting historian and, in the
past, has operated the consulting company of PHR Environmental Consultants, Inc. DX 1055 (Dr.
Bookspan) at 3. Dr. Bookspan was proffered by the Government as an expert in the “history of
the petrochemical industry and its practices” before and during World War II. TR at 367.
The court has determined that Dr. Brigham and Dr. Bookspan are experts in their respective
fields and qualified to testify as such. See FRE 702.
2
This fact conflicts with the Government’s expert testimony that the DSC was not
authorized to purchase avgas until at least January 1, 1943. DX 1054 (Dr. Brigham) at 46.
5
China, at war with Japan. See An Act To Promote The Defense Of The United States, Pub L. No.
77-11, ch. 11, § 3, 55 Stat. 31, 31 (1941) (authorizing the Government to provide military supplies
and equipment to “any country whose defense the President deems vital to defense of the United
States”); see also H.R. Rept. No. 77-18, pt. 1, at 6–7 (1941) (same); H.R. Rept. No. 78-188, pt. 1,
at 3–4 (1943) (reporting two years after the enactment of the Lend-Lease Act that the Government
provided approximately $8.9 billion of military aid to 43 countries, including Great Britain, the
Republic of China, and the Soviet Union).
In July 1941, the Office of the Petroleum Coordinator (“OPC”) sent telegrams to refining
companies to ascertain their interest in and ability to increase the production of avgas. DX 1054
(Dr. Brigham) at 19. Among those that responded were four refineries in Southern California: the
Shell Oil Company (“Shell”); Atlantic Richfield Company (“Richfield”); the Texas Company (a
predecessor to Texaco, Inc.) (“Texaco”); and Union Oil Company of California (“Union”),
collectively referred to in this opinion as “the Oil Companies”. DX 1054 (Dr. Brigham) at 19.
In November 1941, the RFC, the Army, the Navy, and the OPC delegated authority to the
DSC to purchase military avgas to be resold to the Army and Navy; the price, however, would be
set by the OPC. DX 1054 at 45 (Dr. Brigham). Extensive negotiations about the price of avgas
ensued. DX 1054 (Dr. Brigham) at 20–39.
On December 8, 1941, the United States declared war on Japan. On December 11, 1941,
the United States declared war on Germany.
On January 6, 1942, the DSC was authorized to make advance payments to several oil
refineries to purchase 100-octane aviation gasoline. PX 1308 (1/6/42 letter from Federal Loan
Agency to the DSC).3 In January 1942, President Roosevelt created the War Production Board
(“WPB”), the government agency responsible for allocating materials to all domestic industries
involved in war production. DX 1054 (Dr. Brigham) at 41.
3
The fact that the DSC was authorized to make payments to the Oil Companies for avgas
on January 6, 1942 also contradicts the Government’s expert testimony that the DSC was not
authorized to purchase avgas until at least January 1, 1943. DX 1054 (Dr. Brigham) at 46.
6
Beginning on January 17, 1942, the DSC entered into contracts with Shell,4 Richfield,5
Texaco,6 and Union7 requiring each oil refinery “to work night and day” to expand their facilities
to increase the production of avgas required in the war effort (“the Avgas Contracts”).
Each of the Avgas Contracts included a Taxes Clause that provided:
Buyer shall pay . . . any new or additional taxes, fees, or charges, other than income,
excess profits, or corporate franchise taxes, which Seller may be required by any
municipal, state, or federal law in the United States or any foreign country to collect
or pay by reason of the production, manufacture, sale or delivery of the
commodities delivered hereunder.
PX 3 at JA016 (emphasis added).8
In June 1942, a former Shell employee, Eli McColl, who had been employed by the Oil
Companies for several years to dispose of refinery waste as an independent contractor, was
informed by Riverside County officials that no additional disposal activities could be undertaken,
without their approval. DX 1054 (Dr. Brigham) at 17. In response, Eli McColl relocated disposal
activities to a new area in Orange County to accommodate the increase in oil refinery waste
anticipated by the production of increased avgas required by the Avgas Contracts. DX 1054 (Dr.
Brigham) at 17. On June 8, 1942, Eli McColl received a permit from the City of Fullerton,
California, to use this new area for the disposal of oil refinery waste (“the McColl Site”). DX 1054
(Dr. Brigham) at 17. On June 23, 1942, Eli McColl signed a contract with Shell to dispose of at
least 50,000 barrels of “acid sludge, alkylate acid, and [pressure-distillate] acid sludge” at the
4
On April 10, 1942, Shell entered into a contract to sell avgas to the DSC. PX 3. On May
1, 1943, Shell entered into a second contract to sell avgas to the DSC. PX 7.
5
On February 3, 1942, Richfield entered into a contract to sell avgas to the DSC. PX 2. On
February 20, 1943, Richfield entered into a second contract to sell avgas to the DSC. PX 10. In
addition, DSC agreed to advance Richfield a portion of the cost to build a “full size fluid catalytic
cracker.” DX 1054 (Dr. Brigham) at 26–27.
6
On January 17, 1942, Texaco entered into a contract to sell avgas to the DSC. PX 1. On
February 8, 1943, Texaco entered into a second contract to sell avgas to the DSC. PX 8.
7
On December 31, 1942, Union entered into a contract with DSC to sell avgas. PX 5. On
May 1, 1943, Union Oil entered into a second contract to sell avgas to the DSC. PX 6.
8
Although there were minor differences in the text of the individual contracts with the Oil
Companies, the United States Court of Appeals for the Federal Circuit has determined they were
“insignificant.” Shell Oil, 751 F.3d at 1290–91.
7
McColl Site until June 30, 1943. DX 19 (Shell/McColl Contract) at 1. Performance was to
commence on July 1, 1942. PX 1130 (July 7, 1942 letter from Shell Legal Department).9
In December 1942, the OPC was renamed the Petroleum Administrator For War (the
“PAW”). DX 1054 (Dr. Brigham) at 18. The PAW was responsible for setting the price at which
avgas was sold to the DSC under the Avgas Contracts. DX 1054 (Dr. Brigham) at 20.
On December 19, 1942, the Army, Navy, DSC, and PAW agreed that the War and Navy
Departments would advance the DSC $100 million to purchase 100-octane aviation gasoline, as
well as to pay for certain oil refining company expenses, including the cost of building new
facilities to refine avgas; this agreement became effective on January 1, 1943. DX 1054 (Dr.
Brigham) at 46–47.
As the following table demonstrates, the Oil Companies significantly increased avgas
production during the war:
PX 901 (Mr. Kipp Ex.).
World War II ended on September 2, 1945, with the formal surrender of Japan.
On April 29, 1946, Eli McColl received notice from Shell that the June 23, 1942 disposal
contract would be terminated on June 30, 1946. PX 1191 (5/2/46 letter from Eli McColl to Shell
acknowledging receipt of April 29, 1946 termination letter) at 1. On September 6, 1946, the
McColl Site closed and Eli McColl’s waste disposal permit expired. PX 701 (5/9/51 letter from
Eli McColl to City of Fullerton reporting that his disposal permit expired on September 6, 1946)
at 11.
II. THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION,
AND LIABILITY ACT LITIGATION (1991–2005).
In 1991, forty-five years after the McColl Site was closed, the Government and the State
of California filed an action in the United States District Court for the Central District of California
9
In late 1943, Union Oil and Richfield joined Shell in disposing acid waste at the McColl
Site. TR (Dr. Bookspan) at 377, 382. Texaco, however, did not dispose of acid waste at the
McColl Site until late 1944. See Shell Oil, 751 F.3d at 1288.
8
(“District Court”) against the Oil Companies for violating the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, 42 U.S.C. §§ 9604–75 (“CERCLA”), seeking
to recover “substantial response costs [incurred in the] attempts to clean up the McColl Site.” See
United States v. Shell Oil Co., 13 F. Supp. 2d 1018, 1019–20 (C.D. Cal. 1998). This case
concerned three types of waste: acid sludge from the production of benzol; acid sludge from the
production of other petroleum products (including avgas); and “spent alkylation acid.”
Id. at 1023–24.
On August 11, 1998, the District Court issued a Final Opinion, determining that:
(1) 100 percent of the benzol-related sludge at the McColl Site is attributable to
the [DSC] (2) 100 percent of the non-benzol sludge at the McColl Site is
attributable to the avgas program and (3) the [DSC] is wholly liable for all
sludge at the McColl Site that is attributable to the avgas program. . . .
[Therefore,] 100 percent allocation of liability to the [DSC] and zero percent
allocation of liability to the Oil Companies.
Id. at 1030.
On February 11, 2002, the United States Court of Appeals for the Ninth Circuit reversed
the District Court’s determination that the DSC was an “arranger” for the non-benzol wastes. See
United States v. Shell Oil Co., 281 F.3d 812, 815 (9th Cir. 2002). On March 28, 2002, the Oil
Companies and the Government filed petitions for rehearing.
On June 28, 2002, the United States Court of Appeals for the Ninth Circuit denied both
petitions, withdrew the February 11, 2002 Opinion, and held that
We reverse the holding of the district court that the [DSC] is liable for the non-
benzol waste cleanup costs as an arranger under § 9607(a)(3). Because the [DSC]
is not liable as an arranger, the question of allocation of liability for the non-benzol
waste between the [DSC] and the Oil Companies under § 9613(f)(1) is
moot. . . . We affirm the holding of the district court that 100% of the cleanup costs
for the benzol waste should be allocated to the [DSC].
United States v. Shell Oil Co., 294 F.3d 1045, 1048–49 (9th Cir. 2002).10
On August 12, 2003, the Oil Companies and the Government stipulated that the
Government’s share of responsibility for response costs under CERCLA for the benzol sludge
deposited at the McColl Site was 6.25%. Joint Request For Status Conference, Shell Oil Co., No.
CV-91-00589 BRO (C.D. Cal. Aug. 12, 2003), ECF No. 507.
10
On January 13, 2003, the United States Supreme Court denied the Oil Companies’ joint
petition for a writ of certiorari. See Shell Oil Co. v. United States, 537 U.S. 1147 (2003).
9
On July 16, 2004 the Government filed a Motion to Dismiss the Oil Companies’ breach of
contract counterclaims, arguing that the District Court lacked subject matter jurisdiction. On
December 14, 2004, the District Court granted the Government’s Motion To Dismiss the Oil
Companies’ breach of contract counterclaims. See Min. Order, United States v. Shell Oil Co., No.
CV-91-0589 BRO (C.D. Cal. Dec. 14, 2004), ECF No. 525.
On June 30, 2005 the District Court transferred the Oil Companies’ breach of contract
counterclaims to the United States Court of Federal Claims. See Transfer Order, Shell Oil Co. v.
United States, No. 05-704 (Fed. Cl. June 30, 2005).11
III. THE BREACH OF CONTRACT LITIGATION (2005 TO THE PRESENT).
A. Initial Proceedings Before The United States Court Of Federal Claims (2005–
2009).
On July 28, 2005, the Oil Companies filed an Amended Complaint in the United States
Court of Federal Claims. On September 22, 2005, however, the Oil Companies voluntarily
dismissed the July 28, 2005 Amended Complaint. See Notice, Shell Oil Co. v. United States, No.
05-704 (Fed. Cl. Sept. 22, 2005). On November 23, 2005, the Oil Companies filed a claim with
the General Services Administration (“GSA”), seeking $66,283,698.40 in response costs under
Section 113(a) of the Contract Settlement Act of 1944. On February 15, 2006, the GSA informed
the Oil Companies that they had “no basis for recovery.”
On February 24, 2006, the Oil Companies filed a Complaint in the United States Court of
Federal Claims alleging that the Avgas Contracts with the DSC required reimbursement for 100%
of the response costs, subject to the CERCLA litigation. ECF No. 1 ¶¶ 23–27. This case was
assigned to the Honorable Loren Smith.
On March 31, 2009, the United States Court of Federal Claims granted summary judgment
for the Oil Companies and awarded $84,536,763.65 to the Oil Companies, i.e., 100% of the
CERCLA response costs plus statutory interest through June 30, 2008. See Shell v. United States,
86 Fed. Cl. 470, 475 (2009). Therein, the parties were ordered to calculate any remaining costs
11
As a result of the United States Court of Appeals for the Ninth Circuit’s affirmance of
the District Court’s CERCLA determination regarding the benzol waste, the Government was held
liable to the State of California for response costs incurred at the McColl Site because of the benzol
waste. See Shell Co., 294 F.3d at 1062 (“We affirm the holding of the district court that 100% of
the cleanup costs for the benzol waste should be allocated to the United States.”). On July, 10,
2009, the State of California resolved its CERCLA cost recovery claim against the Government
for the period of October 1990 through June 2008. See Partial Consent Decree, Shell Oil Co. v.
United States, CV-91-00589 BRO (C.D. Cal. July 10, 2009), ECF No. 619 ¶ 4(a). On March 16,
2012, the State of California also resolved an additional CERCLA cost recovery claim against the
Government for the period of July 2008 through June 2011. See Partial Consent Decree, Shell Oil
Co., CV-91-00589 BRO (C.D. Cal. Mar. 16, 2012), ECF No. 622 ¶ 4(a).
On December 6, 2013, the parties filed a Joint Status Report regarding the remaining claims
in the CERCLA litigation. Shell Oil Co., CV-91-00589 BRO (C.D. Cal. Dec. 6, 2013), ECF No.
630.
10
from July 1, 2008 to the present and provide a final proposed order to the court. Id. On October
30, 2009, a final judgment was entered granting $87,344,345.70 to the Oil Companies. ECF No.
53. On December 10, 2009, the Government filed a Rule of the United States Court of Federal
Claims (“RCFC”) 60(b) Motion For Relief From Judgment And Recusal to vacate the court’s
October 30, 2009 judgment, because Judge Smith’s wife owned stock in Chevron Corporation, the
parent company of Texaco and Union. ECF No. 61.
B. The First Appeal To The United States Court Of Appeals For The Federal
Circuit (2009–2010).
On December 28, 2009, the Government filed an appeal to the United States Court of
Appeals for the Federal Circuit. ECF No. 62. On May 19, 2010, the case was remanded, so that
Judge Smith could consider the Government’s December 10, 2009 RCFC 60(b) Motion.
ECF No. 73.
C. The First Remand To The United States Court Of Federal Claims (2010).
On May 27, 2010, Judge Smith issued an Order severing Texaco and Union from the case
and vacating the court’s March 31, 2009 Opinion and October 30, 2009 final judgment. ECF No.
74. On August 4, 2010, the court entered judgment granting the remaining Oil Companies
$68,849,505.88. ECF No. 80.
D. The Second Appeal To The United States Court Of Appeals For The Federal
Circuit (2010–2012)
On September 17, 2010, the Government again filed an appeal to the United States Court
of Appeals for the Federal Circuit. ECF No. 82. On March 7, 2012, Judge Smith’s August 4, 2010
judgment was vacated and remanded with instructions that the case be reassigned to a different
judge. See Shell Oil Co. v. United States, 672 F.3d 1283, 1294 (Fed. Cir. 2012).
E. The Second Remand To The United States Court Of Federal Claims (2012–
2013).
On remand, the Honorable Thomas C. Wheeler was assigned this case. On January 14,
2013, the court granted summary judgment in favor of the Government, determining that CERCLA
response costs were not subject to the Taxes Clause of the Avgas Contracts. See Shell Oil Co. v.
United States, 108 Fed. Cl. 422, 425 (2013) (“The ‘Taxes’ [C]lause in [the Oil Companies’]
contracts does not trump the California courts’ CERCLA result.”)
F. The Third Appeal To The United States Court Of Appeals For The Federal
Circuit (2014).
On April 28, 2014, the United States Court of Appeals for the Federal Circuit reversed the
January 14, 2013 summary judgment decision, holding that the Taxes Clause required the
Government to reimburse the Oil Companies for “CERCLA costs arising from avgas production.”
11
Shell Oil, 751 F.3d at 1296. This case again was remanded to the United States Court of
Federal Claims,
[t]o determine how much acid waste at the McColl Site was “by reason of” the
avgas contracts.
Id. at 1303.
G. The Third Remand To The United States Court Of Federal Claims (2014 To
The Present).
On September 11, 2014, the undersigned judge was assigned to adjudicate this case on
remand. ECF No. 118. On November 12, 2014, the court entered a Scheduling Order, setting the
close of additional discovery requested by the parties for August 15, 2015. ECF No. 121.
On March 12, 2015, the court convened a telephone status conference to discuss the
Government’s new request for discovery of the Oil Companies’ environmental liability insurance.
ECF No. 128. On March 23, 2015, the court entered a Scheduling Order, setting deadlines for the
Oil Companies to file a Motion For A Protective Order and for the Government to file a Response.
ECF No. 123.
On April 10, 2015, the Oil Companies filed a Motion For A Protective Order, Motion For
Partial Summary Judgment, and A Memorandum In Support seeking to prevent discovery of the
Oil Companies’ insurance policies and any coverage settlements. ECF No 129, 130.
On May 15, 2015, the Government filed an Opposition To [The Oil Companies]’ Motion
For Protective Order And For Partial Summary Judgment. ECF No. 135. On that same day, the
Government also filed a Cross-Motion For Partial Summary Judgment against Shell and Richfield,
arguing that they recovered pending cleanup remediation costs from their insurers. ECF No. 135.
On August 27, 2015, the court scheduled an evidentiary hearing on the remand for the week
of February 17, 2016, at the United States Court of Federal Claims in Washington, D.C. ECF No.
151.
On September 3, 2015, the Government filed a Motion For Leave To Amend the February
25, 2008 Answer to assert new affirmative defenses and counterclaims, based upon the Special
Plea in Fraud, 28 U.S.C. § 2514, and the antifraud provision of the Contract Settlement Act of
1944, 41 U.S.C § 119. ECF No. 153.
On October 30, 2015, the court issued a Memorandum Opinion And Order granting the Oil
Companies’ April 10, 2015 Motion For Partial Summary Judgment, determining that
Government’s insurance offset was an affirmative defense that had to be asserted no later than
February 25, 2008, when the Government filed an Answer. See Shell Oil Co. v. United States, 123
Fed. Cl. 707, 720 (2015). In addition, the court determined that the Government was now barred
from engaging in discovery about the Oil Companies’ insurance policies. Id. at 727–28.
Consequently, the court denied the Oil Companies’ April 10, 2015 Motion For A Protective Order,
as moot. Id. The court also denied the Government’s May 15, 2015 Cross-Motion For Summary
Judgment and denied the Government’s September 3, 2015 Motion, because allowing the
12
Government to amend the February 25, 2008 Answer to assert fraud counterclaims many years
after the onset of the litigation would “substantially change[] the theory on which the case has been
proceeding.” Id. at 727 (quoting Cencast Services, L.P. v. United States, 729 F.3d 1352, 1364
(Fed. Cir. 2013)).
On November 17, 2015, the Oil Companies filed a Motion In Limine To Exclude Evidence
Relating To Insurance Proceeds And The Testimony Of The Government’s Insurance Expert,
because the Government insisted it still intended to call an expert witness to testify about the
insurance settlements and make a proffer regarding Richfield and Shell’s “recovery of amounts
subject to the claim at issue here.” ECF No. 164 at 2. On December 4, 2015, the Government
filed a Response. ECF No. 165. On December 11, 2015, the Oil Companies submitted a Reply.
ECF No. 167. On December 14, 2015, the court granted the Oil Companies’ Motion In Limine.
ECF No. 168. On December 16, 2015, the court issued an additional scheduling order, setting the
close of discovery for January 26, 2016. ECF No. 170.
On January 8, 2016, the Oil Companies filed a Witness List and Exhibit List. ECF No.
172–73. On January 11, 2016, the Oil Companies filed a Motion To Compel Responses To The
Oil Companies’ December 24, 2015 Final Set Of Discovery Requests. ECF No. 174. On January
13, 2016, the court convened a conference to resolve the Oil Companies’ January 11, 2016 Motion
To Compel and issued an Order denying that motion, because the response time for the documents
requested by the Oil Companies’ December 24, 2015 Final Set Of Discovery Requests exceeded
the January 26, 2016 date for close of discovery. ECF No. 175.
On January 29, 2016, the Government filed a Memorandum Of Contentions Of Fact And
Law, an Exhibit List, and a Witness List. ECF Nos. 176–78. On February 5, 2016, the Oil
Companies filed Notice Of Amended Exhibit List to include six additional trial exhibits (ECF No.
179), and filed Notices Of The Written Direct Testimony Of Edmond F. Bourke and The Written
Direct Testimony Of Gregory G. Kipp, PE. ECF Nos. 179–81.
On February 10, 2016, the Government filed a Notice Of Objections To The February 5,
2016 Written Testimony of Oil Companies’ experts, Mr. Kipp and Mr. Bourke, arguing that, it
was improper for them to render opinions based on the Stipulations and Proposed Findings of Fact
from earlier stages in the litigation and to discuss the written report of a Government “may-call”
witness. ECF No. 183. On February 11, 2016, the Oil Companies filed Notice Of Amended
Exhibit List to correct a discrepancy in the January 8, 2016 Exhibit List. ECF No. 184. That
same day, the Government filed Notices Of The Direct Testimony Of Dr. Jay Brigham, Ph.D., the
Direct Testimony Of Dr. Allen Medine, Ph.D., and the Direct Testimony Of Dr. James Kittrell,
Ph.D. ECF Nos. 185–87. On February 12, 2016, the Government also filed Notice Of Direct
Testimony Of Dr. Shelley Bookspan, Ph.D. ECF No. 188. On February 15, 2016, the Oil
Companies filed a Response to the Government’s February 10, 2016 Objections. ECF No. 189.
13
On February 16–19, 2016, the court convened an evidentiary proceeding on causation and
breach of contract damages in Washington, D.C. TR 1–642.12
On February 26, 2016, the court convened a conference to discuss the post hearing briefing
schedule that was entered on March 1, 2016. ECF No. 194.
On March 23, 2016, the Government filed Objections To The Oil Companies’ February
17, 2016 Exhibit List. ECF No. 201.
On April 8, 2016, the Oil Companies filed Proposed Findings Of Fact And Conclusions Of
Law, and a Post Trial Damages Brief (“Pl. DBr.”). ECF No. 202. On April 15, 2016, Kenneth J.
Sheehan, Esq.. filed a Notice Of Appearance on behalf of the American Fuel & Petrochemical
Manufacturers (“AFPM”). ECF No. 203. On that same day, AFPM filed a Motion For Leave To
File Amicus Brief (“Amicus Br.”), that the court granted on April 18, 2016. ECF No. 204.
On April 22, 2016, the Oil Companies filed a Response to the Government’s March 23,
2016 Objection. ECF No. 207.
On May 23, 2016, the Government filed Proposed Findings Of Fact And Conclusions Of
Law. ECF No. 210 (“Gov’t DBr.”). On May 25, 2016, the Government filed a Notice of
Additional Authority citing Northrup-Grumman Computing Systems, Inc. v. United States, 823
F.3d 1364 (Fed. Cir. 2016), for the proposition that each of the Oil Companies had to establish the
amount of damages sustained from the Government’s breach of the Avgas Contracts. ECF No.
211.
On June 10, 2016, the Oil Companies filed a Reply to the Government’s May 23, 2016
Post-Trial Brief. ECF No. 212 (“Pl. Reply Br.”). ECF No. 212.
On October 18, 2016, the Oil Companies filed a Motion To Supplement The Record to
include a complete copy of the 1993 Environmental Protection Agency (“EPA”) Record of
Decision (“ROD”) that included all tables and figures. ECF No. 214.13
On November 21, 2016, the court convened closing oral arguments at the United States
Court of Federal Claims. ECF No. 218 (11/21/16 TR 1–81).
On December 2, 2016, the Oil Companies filed a Supplemental Response To The Court’s
Questions During Oral Argument (“Pl. Supp.”). ECF No. 219. On December 9, 2016, the
12
On February 17, 2016, the Oil Companies filed a comprehensive List of Exhibits that
the court admitted into evidence. ECF No. 190. On February 19, 2016, the Government filed an
Amended Exhibit List to include written direct examinations of the Government’s expert witnesses
that the court also admitted into evidence. ECF No. 191.
13
The text of the 1993 ROD offered by both parties as evidence, i.e., PX 517 and DX 208,
did not include the attached figures and tables. The court grants the Oil Companies’ October 18,
2016 Motion To Supplement The Record to include the tables and figures.
14
Government filed a Response (“Gov’t Resp. To Supp.”). ECF No. 220. On December 16, 2016,
the Oil Companies filed a Reply. (“Pl. Supp. Reply”) ECF No. 222.
IV. DISCUSSION.
A. Jurisdiction.
The United States Court of Federal Claims has jurisdiction, pursuant to the Tucker Act, 28
U.S.C. § 1491, “to render judgment upon any claim against the United States founded either upon
the Constitution, or any Act of Congress or any regulation of an executive department, or upon
any express or implied contract with the United States, or for liquidated or unliquidated damages
in cases not sounding in tort.” 28 U.S.C. § 1491(a)(1). The Tucker Act, however, is “a
jurisdictional statute; it does not create any substantive right enforceable against the United States
for money damages. . . . [T]he Act merely confers jurisdiction upon [the United States Court of
Federal Claims] whenever the substantive right exists.” United States v. Testan, 424 U.S. 392,
398 (1976).
To pursue a substantive right under the Tucker Act, a plaintiff must identify and plead an
independent contractual relationship, constitutional provision, federal statute, and/or executive
agency regulation that provides a substantive right to money damages. See Todd v. United States,
386 F.3d 1091, 1094 (Fed. Cir. 2004) (“[J]urisdiction under the Tucker Act requires the litigant to
identify a substantive right for money damages against the United States separate from the Tucker
Act[.]”); see also Fisher v. United States, 402 F.3d 1167, 1172 (Fed. Cir. 2005) (en banc) (“The
Tucker Act . . . does not create a substantive cause of action; . . . a plaintiff must identify a separate
source of substantive law that creates the right to money damages. . . . [T]hat source must be
‘money-mandating.’”) (citations omitted). Specifically, a plaintiff must demonstrate that the
source of substantive law upon which he relies “can fairly be interpreted as mandating
compensation by the Federal Government.” United States v. Mitchell, 463 U.S. 206, 216 (1983)
(quoting Testan, 424 U.S. at 400). And, the plaintiff bears the burden of establishing jurisdiction
by a preponderance of the evidence. See Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746,
748 (Fed. Cir. 1988) (“[O]nce the [trial] court’s subject matter jurisdiction [is] put in question . . .
[the plaintiff] bears the burden of establishing subject matter jurisdiction by a preponderance of
the evidence.”).
The February 24, 2006 Complaint alleges that the Oil Companies entered into Avgas
Contracts that were breached by the Government. Compl. ¶¶ 27, 29. As such, the court has
jurisdiction to adjudicate the Oil Companies’ claims.
B. Standing.
The United States Supreme Court has held that “the question of standing is whether the
litigant is entitled to have the court decide the merits of the dispute or of particular issues.”
Warth v. Seldin, 422 U.S. 490, 498 (1975). Standing must be determined “as of the
commencement of suit.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 570 n.5 (1992). The party
invoking federal jurisdiction bears the burden of establishing standing. Id. at 560–61. Specifically,
“a plaintiff must show [that] it has suffered an ‘injury in fact’ that is . . . concrete and particularized
and . . . actual or imminent, not conjectural or hypothetical; . . . the injury is fairly traceable to the
15
challenged action of the defendant; and . . . it is likely, as opposed to merely speculative, that the
injury will be redressed by a favorable decision.” Friends of the Earth, Inc. v. Laidlaw Envtl.
Serv., Inc., 528 U.S. 167, 180–81 (2000).
The February 24, 2006 Complaint alleges that the Oil Companies suffered an “injury in
fact” that is “concrete,” “particularized,” and “fairly traceable” to the Government’s breach of the
Avgas Contracts. Compl. ¶¶ 27, 29. The injury sustained by the Oil Companies can be redressed
by a monetary award.
For these reasons, the court has determined that the Oil Companies have standing to seek
an adjudication of the claims alleged in the February 24, 2006 Complaint.
C. Evidence Adduced At The Remand Proceeding.14
The specific instructions of the United States Court of Appeals for the Federal Circuit to
the United States Court of Federal Claims, on the third remand, was
[t]o determine how much acid waste at the McColl Site was ‘by reason of’ the
[A]vgas Contracts.
Shell Oil, 751 F.3d at 1303.
1. Crude Oil Was Processed Into Aviation Gasoline And Other Petroleum
By-Products, Both Of Which Resulted In “Acid Waste.”
The first step in the remand analysis requires understanding that crude oil was processed
into avgas and other petroleum by-products, both of which resulted in “acid waste.”15
14
Court Exhibit A, attached to this Memorandum Opinion and Final Order, provides a
comprehensive list of all witness testimony and documents admitted into evidence in the remand
proceeding. Court Exhibit B provides Evidentiary Rulings Regarding Admissibility of Exhibits
and Written Direct Testimony.
15
Both parties proffered expert petroleum engineers to testify about these issues to
supplement the record that the appellate court considered in 2014.
The Oil Companies’ expert petroleum engineer was Gregory G. Kipp. Mr. Kipp is a
Professional Engineer and General Manager of Geomega, Inc., an environmental consulting firm.
PX 17 (Mr. Kipp) at 1. In 1996, Mr. Kipp received a B.S. in Geological Engineering from the
University of Minnesota and, in 2009, a M.S. in Geological Engineering from the South Dakota
School of Mines. PX 17 (Mr. Kipp) at A014. He also had over 20 years of experience specializing
in environmental geochemistry, hydrology, and contaminant transport. PX 17 (Mr. Kipp) at 1.
Mr. Kipp’s work included “evaluating the sources and causes of contaminant releases,” requiring
an “intimate knowledge of the processes that led to the releases and how those processes have
changed[.]” PX 17 (Mr. Kipp) at 1. Mr. Kipp was proffered as an expert in: geology;
geochemistry; environmental chemistry; industrial process chemistry; engineering; and World
16
When crude oil arrives at a refinery it is sent to a distillation tower, where it is subjected to
extreme heat that breaks down crude oil into constituent hydrocarbons—the heaviest of which
settle near the bottom of the tower, while the lighter hydrocarbons rise to the top, according to
their boiling points. PX 17 (Mr. Kipp) at 6–7; DX 1053 (Dr. Kittrell) at 17–18. As hydrocarbons
rise in the distillation tower, they are cooled, condensed, and then removed from the tower. DX
1053 (Dr. Kittrell) at 18. Those that are not further processed are known as “straight run”
distillates. DX 1053 (Dr. Kittrell) at 18.
DX 1053(Dr. Kittrell) at 18, Figure 1.
Hydrocarbons that reached a boiling between 100 F to 295 F were used to make avgas.
DX 1053 (Dr. Kittrell) 18. But, other petroleum by-products, such as kerosene and heating oil,
also could be converted into the lighter hydrocarbons and used in avgas production through a
War II oil refinery operations. TR at 110. The Government objected to Mr. Kipp being offered as
an expert in World War II oil refinery operations. TR at 116.
The Government’s expert petroleum engineer was James R. Kittrell, Ph.D. Dr. Kittrell
received a B.S. in Chemical Engineering from Oklahoma State University, and a M.S. and Ph.D.
in Chemical Engineering from the University of Wisconsin, where he continued post-doctoral
studies. DX 1053 (Dr. Kittrell) at 67. Dr. Kittrell currently is the President of KSE, Inc., a firm
in the business of invention, development, and licensing of new technology, primarily for
application in the petroleum, chemical, and environmental industries and holds over 50 U.S.
patents. DX 1053 (Dr. Kittrell) at 67. The Government proffered Dr. James Kittrell as an expert
in: chemical engineering; petroleum refinery operations; historical refinery operations from 1920
to the present; refinery waste management; and environmental remediation. TR at 497–98.
The court has determined that Mr. Kipp and Dr. Kittrell are both experts in their respective
fields and qualified to testify as such. See FRE 702.
17
process known as “cracking.” PX 17 (Mr. Kipp) at 8. “Cracking” was the preferred method of
manufacturing avgas “base stock,” one of the principal ingredients in avgas. PX 17 (Mr. Kipp) at
9; DX 1053 (Dr. Kittrell) at 38 (“100-octane aviation gasoline was a blend of components, the first
of which would be an aviation base stock.”). There are two types of cracking.
Thermal cracking is a heat and pressure process that was used prior to World War II. PX
17 (Mr. Kipp) at 8. Thermal cracking resulted in a petroleum by-product known as “pressure
distillate.” DX 1053 (Dr. Kittrell) at 18–19; PX 17 (Mr. Kipp) at 63. Pressure distillates can be
further distilled into lighter hydrocarbons or fractions with a boiling point of 100 F to 295 F that
can be used to produce avgas. DX 1053 (Dr. Kittrell) at 18. Fractions with a 100 F to 400 F
boiling point can be used to manufacture motor gasoline. DX 1053 (Dr. Kittrell) at 18.
By 1942, a more advanced process known as “catalytic cracking” was developed that used
a catalyst to cause a chemical reaction transforming heavier hydrocarbons into components of
avgas. PX 17 (Mr. Kipp) at 8. Catalytic cracking allowed refineries to produce greater quantities
of lighter hydrocarbons and increase avgas production. DX 1053 (Dr. Kittrell) at 21 (“The
performance of the [catalytic crackers] was so superior to thermal crackers that many refineries
installed [catalytic cracking] units during WWII, during the 1942-1945 time period.”). This
technology was an “important contributor to high octane avgas.” DX 1053 (Dr. Kittrell) at 21.
Thermal and catalytic cracking, however, were not the only way to produce avgas from
crude oil. Another process used 98% fresh sulfuric acid as a catalyst in a device known as an
alkylation unit, that yielded alkylate—a “critical” component of avgas, generally comprising 25%–
40% of avgas. PX 17 (Mr. Kipp) at 8–9; DX 1053 (Dr. Kittrell) at 39; TR (Dr. Kittrell) at 500.
This process resulted in a “dramatic increase in the amount of 100 octane avgas that could be
produced, without any increase in the amount of crude oil that was processed.” DX 1053 (Dr.
Kittrell at 39). The sulfuric acid used during the alkylation process, however, became diluted as
impurities were emulsified and could not be separated from the acid, resulting in a waste product
known as spent alkylation acid, that had a 89%–90% acid content. PX 17 (Mr. Kipp) at 9–10; DX
1053 (Dr. Kittrell) at 39–40. Spent alkylation acid was not suitable for further alkylation, without
reprocessing, but could be reused to “acid treat” distillates to remove impurities and unwanted
sulfur compounds. DX 1053 (Dr. Kittrell) at 19 (“[M]any [p]ressure [d]istillate products require[d]
further [acid] treatment to improve color and odor, and to remove sulfur compounds and olefin
compounds[.]”). In addition, spent alkylation acid could be used to produce other non-avgas
petroleum by-products. PX 17 (Mr. Kipp) at 10–11 (“Acid treatment was also regularly used in
the creation of products other than avgas.”). After spent alkylation acid was used for acid
treatment, the result was “acid sludge,” a waste product with a 35%–65% acid content that had no
further petroleum refining use, but could be used to manufacture fertilizer or burned as fuel. PX
17 (Mr. Kipp) at 10–11; DX 1053 (Dr. Kittrell) at 22–23. In the alternative, it required disposal.
DX 1053 (Dr. Kittrell) at 23.
Since both of the parties’ petroleum engineering experts essentially agreed on how crude
oil was processed into avgas and other petroleum by-products, the court has adopted their findings.
18
2. Spent Alkylation Acid And Acid Sludge Are Components Of “Acid
Waste” And Both Were Disposed Of At The McColl Site.
The second step in the remand analysis requires understanding that both spent alkylation
acid and acid sludge are components of “acid waste” and were disposed of at the McColl Site.
a. The Opinion Of The Oil Companies’ Petroleum Engineering
Expert.
i. Spent Alkylation Acid Was Disposed Of At The McColl
Site.
Catalytic cracking produced an avgas base that then was subjected to alkylation, using 98%
sulfuric acid, but this process resulted in a component of acid waste, known as spent alkylation
acid. PX 17 (Mr. Kipp) at 29. As avgas production increased, however, a proportionally higher
output of spent alkylation acid resulted. PX 17 at 29–30 (Mr. Kipp). For example, in 1941, Shell
generated 36,421 barrels of spent alkylation acid; in 1944, when avgas production was at its
highest, Shell generated 203,147 barrels of spent alkylation acid or a 458% increase. PX 17 (Mr.
Kipp) at 29.
Therefore, on June 20, 1942, the Stauffer Chemical Company (“Stauffer”) applied for
permission from the OPC to construct a new 200-ton-per-day spent alkylation acid reprocessing
facility in Dominguez, California. PX 1129 (Stauffer letter to OPC) at 1. Stauffer explained that,
because of increased avgas production, Shell would have “an excess of alkylation waste acid on
January 1, 1943, and a very large excess by September 1943.” PX 1129 at 1–2. Shell sent a letter
in support of Stauffer’s application, reporting that production of avgas under its contract with the
DSC would generate spent alkylation acid of “approximately 100 tons per day,” but that disposal
would be “physically very difficult.” PX 1132 (9/26/42 Shell letter to OPC in support of Stauffer)
at 1; PX 1123 (4/28/42 Shell memo reflecting that “the volume of surplus spent alkylation acid
will be so great that [disposal] will be extremely difficult”) at 1.
By late 1943, Stauffer opened plants in Dominguez, California, and in Torrance, California,
but the Stauffer II plant did not open until December 9, 1944.16 PX 17 (Mr. Kipp) at 31–32.
Unfortunately, the Stauffer II plant immediately had operational issues. PX 1165 (7/11/44 Stauffer
Board Minutes discussing problems with Stauffer II). In addition, the General Chemical Company
plant in El Segundo, California (“the El Segundo plant”) increased reprocessing, but did not
operate at full capacity until mid-1944. PX 1158 (1/6/44 WPB Memo reporting that the El
Segundo plant would be completed on April 1, 1944). In addition, the Oil Companies’ spent
alkylation acid storage tanks were full by December, 1944. PX 11 at Stip. 373 (“The storage
capacity for all the [Oil Companies] as of December 27, 1944, was full.”); PX 1175 (Jan. 1945
WPB Report reflecting that all of the Oil Companies’ storage tanks were full).
16
Texaco also asked permission to build a reprocessing plant in 1943, but permission was
denied. PX 1140 (3/23/43 WPB letter denying Texaco’s request to build a reprocessing plant);
PX 1144 (5/19/43 Texaco Letter to WPB concerning denial of request).
19
Although the Oil Companies used as much spent alkylation acid as possible to acid treat
non-avgas petroleum by-products, they still were left with an “unprecedented” amount of spent
alkylation acid that could not be reprocessed or stored by the existing facilities in Southern
California at that time. PX 17 (Mr. Kipp) at 30–36, 84–85, 88. Therefore, without sufficient
reprocessing or storage facilities, the Oil Companies turned to the McColl Site to dispose of excess
spent alkylation acid. PX 17 (Mr. Kipp) at 88.
To determine the amount of spent alkylation acid that was disposed of at the McColl Site,
Mr. Kipp used January and February 1945 Government survey reports,17 containing the “Spent
Alkylation Situation Forecast” for Southern California. PX 17 (Mr. Kipp) at 87 (citing PX 1175
(Jan. 1945 Skinner Report); PX 1178 (Feb. 1945 Skinner Report)). Next, Mr. Kipp estimated: (1)
the daily amount of excess spent alkylation acid produced by the Oil Companies from November
1944 to April 10, 1945 (PX 906–Mr. Kipp Ex.);18 (2) the capacity in Southern California to
reprocess spent alkylation acid during that same period (PX 908–Mr. Kipp Ex.);19 and (3) the Oil
Companies’ storage capacities for spent alkylation acid.20
17
These reports were prepared with the assistance of a WPB employee, Paul Skinner, and
are known as the “Skinner Reports.” PX 17 (Mr. Kipp) at 87.
18
Because the Skinner Reports did not include data for November and December 1944,
Mr. Kipp assumed that the Oil Companies would have had the same amount of spent alkylation,
acid in those months, as they did in January, 1945. PX 17 (Mr. Kipp) at 89. Mr. Kipp’s
calculations took account of spent alkylation acid produced by the Standard Oil Company: this
company did not dispose of acid waste at the McColl Site, but the spent alkylation acid it generated
took up reprocessing capacity. PX 17 (Mr. Kipp) at 89.
19
Because the Stauffer II plant did not open until December 9, 1944 and immediately had
operational problems, Mr. Kipp estimated that Stauffer II had much less acid reprocessing capacity
from February 1945 to April 10, 1945 than was forecasted in the Skinner Reports. PX 17 (Mr.
Kipp) at 91–92. Therefore, Mr. Kipp estimated that Stauffer II had a capacity of 60 tons/day during
March 1945, instead of the 100 tons/day forecast by the Skinner Reports. PX 17 (Mr. Kipp) at 92
20
Mr. Kipp also assumed that the Oil Companies’ storage tanks were empty during
November 1944, because the Skinner Reports did not report on storage data. PX 17 (Mr. Kipp) at
93. But, Mr. Kipp estimated that the storage tanks were full by December of 1944, based on
stipulations entered into by the parties and a January 1945 Skinner Report. PX 17 (Mr. Kipp) at
93 (citing PX 11 at Stip. 373 (“The storage capacity for all the [Oil Companies] as of December
27, 1944, was full.”); PX 1175 (Jan. 1945 Skinner Report)). On April 11, 1945, the Wilshire Oil
Company’s spent alkylation acid storage tank also came online in Los Angeles, California, making
15,000 tons of storage available to the Oil Companies and creating sufficient capacity to handle
excess spent alkylation acid afterwards. PX 17 (Mr. Kipp) at 93; PX 1187 (4/6/45 Shell Contract
with Wilshire for storage of “dilute [sulfuric] acid . . . resulting from [Shell’s] alkylation plant
operations”).
20
The amount of excess “spent alkylation acid” that Mr. Kipp estimated was disposed of at
the McColl Site from November 1944 through April 10, 1945 is set forth in the following chart:
PX 910 (Mr. Kipp Ex.).
As shown above, Mr. Kipp estimated that a total of 11,643 tons of “spent alkylation acid”
was deposited at the McColl Site from November 1944 through April 10, 1945. PX 17 (Mr. Kipp)
at 95. Mr. Kipp then converted tons into pounds and pounds into barrels, to ascertain that
approximately 45,480 barrels of “spent alkylation acid” was disposed of at the McColl Site by the
Oil Companies, other than Shell,21 from November 1944 through April 10, 1945. PX 17 (Mr.
Kipp) at 87–96, 103.
PX 911 (Mr. Kipp Ex.)
ii. Acid Sludge Was Disposed Of At The McColl Site.
As the Oil Companies increased throughput from 1942 until late 1944 to increase avgas
production, they also produced more non-avgas petroleum by-products. PX 17 (Mr. Kipp) at 43.
When these by-products were acid treated with spent alkylation acid, the resulting waste product
was “acid sludge,” a “thicker, viscous, and ultimately solid matter.” PX 17 (Mr. Kipp) at 39. The
relationship between increased avgas production and increased acid sludge can be “demonstrated
empirically,” by comparing Shell’s acid sludge production in 1944, the peak of avgas production,
with 1946, when Shell was no longer producing large amounts of avgas. PX 17 (Mr. Kipp) at 44.
For example, in 1944, Shell produced 68 barrels of acid sludge for every 10,000 barrels of non-
21
During this time, Shell was able to reprocess all of its spent alkylation acid at Stauffer’s
Dominguez plants. PX 17 (Mr. Kipp) at 103.
21
avgas by-product produced. PX 17 (Mr. Kipp) at 45; PX 1104 (1944 Shell Operating Report) at
38, 133. In 1946, however, Shell produced only 20 barrels of acid sludge for every 10,000 barrels
of non-avgas by-products produced. PX 17 (Mr. Kipp) at 45; PX 1104 (1946 Shell Operating
Report) at 313, 395.
As the following chart shows, Shell produced proportionally more acid sludge in 1944 than
it did in 1946:
PX 954 (Mr. Kipp Ex.).
To produce more revenues and reduce the need for disposal, Shell reprocessed as much
acid sludge into fertilizer as possible. PX 930 (Mr. Kipp exhibit showing acid sludge sent from
Shell refineries to Shell Point fertilizer facility); PX 1157 (1943 Sulfuric Acid Report reflecting
that “P.D. [Pressure Distillate] Acid Sludge” was sent to Shell Chemical’s Ammonium Sulfate
Plant to be converted into fertilizer) at A01037; PX 1104 (1944 Shell Operating Report) at 133;
PX 1104 (1945 Shell Operating Report) at 264.22
Because of its toxicity, however, acid sludge needed to be transported by rail in specialized
tank cars. But, these tank cars were tightly regulated during the war by the WPB. PX 17 (Mr.
Kipp) at 48–49. As Eli McColl testified in May 1942, “[w]e cannot ship [acid sludge] from Los
Angeles to San Francisco anymore,” because “the [G]overnment will not allow us to use the tank
22
Union Oil also reprocessed acid sludge at a General Chemical reprocessing plant at El
Segundo, California. PX 1113 at 4 (Dec. 1941 Sulfuric Acid Survey Table); PX 1131 at 17 (8/8/42
PAW Sulfuric Acid Survey); PX 1157 (12/11/43 Sulfuric Acid Report) at A01045.
22
cars for that purpose.” PX 1126 (5/6/42 Transcript Of San Jose District Disposal Permit Hearing)
at LEV00846.
Acid sludge also could be burned as a heat source, but it was an inefficient fuel. PX 1105
(4/3/39 Shell Memo reflecting that acid sludge had only limited utility as a fuel source).23 Burning
acid sludge, however, caused the emission of sulfur dioxide and odorous fumes.24
Because not all of the acid sludge could be used to make fertilizer or burned, the Oil
Companies disposed of acid sludge at the McColl Site as follows:
Shell began to dispose of acid sludge at the McColl Site during the second half of
1942. PX 17 (Mr. Kipp) at 118; PX 1103 (1942 Shell Operating Report reflecting
that Shell sent 2,030 barrels of sludge to disposal from Wilmington and 98,310
barrels of sludge to disposal from Dominguez).25 Shell also disposed of acid sludge
in 1943, in 1944, and in 1945. PX 1103 (1943 Shell Operating Report reflecting
that Shell sent 7,825 barrels of acid sludge from Wilmington and 104,542 barrels
from Dominguez at 808); PX 1104 (1944 Shell Operating Report reflecting that
Shell sent 17,194 barrels of acid sludge from Wilmington and 48,825 barrels from
Dominguez) at 133; PX 1104 (1945 Shell Operating Report reflecting that Shell
sent 180 barrels from Wilmington and 1,222 barrels from Dominguez) at 264.
The Texas Company did not dispose of acid sludge at the McColl Site until early
1945, because it was burned until late 1944. PX 17 (Mr. Kipp) at 116; PX 1113
(Dec. 1941 PAW report stating that the Texas Company “Burned” acid sludge); PX
1131 (8/8/42 OPC report stating that that the Texas Company burned acid sludge);
PX 1157 (12/14/43 Smith Report stating that the Texas Company’s acid sludge was
“Burned at Refinery”) at 1046; TR (Dr. Bookspan) 381; DX 92 (Minutes of a 1957
meeting between the Oil Companies, reporting that Texaco disposed of
23
Richfield burned some of its acid sludge prior to 1944. PX 1113 (Dec. 1941 Sulfuric
Acid Survey table showing that Richfield burned some of its sludge) at 2; PX 1157 (12/11/43
Richard C. Smith Sulfuric Acid Report to WPB that Richfield burned its acid sludge at the refinery)
at A01045. Texaco burned all of its acid sludge until late 1944. PX 1113 (Dec. 1941 Sulfuric Acid
Survey Table showing that Texaco burned all of its acid sludge) at 4; PX 1131(8/8/42 PAW
Sulfuric Acid Survey showing that Texaco burned all of its acid sludge) at 17.
24
PX 1107 (8/11/39 Shell memo reporting that the burning of acid sludge at Shell’s
Dominguez refinery was “creating a menace through the discharge of large amounts of sulfur
dioxide”); PX 1126 (5/6/1942 Transcript of San Jose District Disposal Permit Hearing) at
LEV00843–4 (stating that burning of sludge “produced an odor”).
25
Because the McColl Site did not accept sludge from Shell until at least July 1, 1942, it
is likely that no more than 50% of Shell’s 1942 acid sludge was sent to the McColl Site. DX 19
(Shell/McColl Contract); PX 1130 (7/7/42 letter from Shell Legal Department reflecting that
performance of disposal contract was to begin July 1, 1942).
23
approximately 5,000 barrels or roughly 1% of the acid sludge at the McColl Site,
but does not state when).
Union did not dispose of acid sludge at the McColl Site until “late 1943,” because
it was reprocessed either at General Chemical or Shell Point. PX 1113 (Jan. 1942
Union response to Government Sulfuric Acid Survey stating that acid sludge was
“given away”); PX 1228 (10/5/42 Union Memorandum discussing quality of acid
sludge delivered to General Chemical for reprocessing); PX 1157 (12/8/43 Smith
Report reflecting the disposal of 450 tons of acid sludge) at A01044.
Richfield did not dispose of acid sludge at the McColl Site until “late 1943.” TR
at 377 (Dr. Bookspan). Richfield burned some “acid sludge,” and also used a site
in Gardena, California for disposal from 1940 to July 1943. TR at 377 (Dr.
Bookspan); PX 1113 (Dec. 1941 Sulfuric Acid Survey Table) at 2; PX 1131 (8/8/42
PAW Sulfuric Acid Survey) at 17; PX 1157 (12/11/43 Sulfuric Acid Report) at
A01045.
b. The Opinion Of The Government’s Petroleum Engineering
Expert.
i. Little Or No Spent Alkylation Acid Was Disposed Of At
The McColl Site.
Dr. Kittrell agreed with Mr. Kipp that “spent alkylation acid increased during WWII” and
“as the production of avgas was ramped up during the war, the production of spent alkylation acid
increased proportionately.” DX 1053 (Dr. Kittrell) at 11, 42. But, Dr. Kittrell testified that spent
alkylation acid was not disposed of at the McColl Site from 1943–1945, because he found no Shell
records or Avgas Gasoline Subcommittee reports confirming that activity and rail cars were
available from December 1944 to April 10, 1945 that could have transported spent alkylation acid
for further processing. DX 1053 (Dr. Kittrell) at 12, 48. Dr. Kittrell, however, conceded that spent
alkylation acid was used to treat straight run and pressure distillates, so that some spent alkylation
acid may have remained in the “substantial sludge production of the acid treatment of distillates”
and was disposed of at the McColl Site. DX 1053 (Dr. Kittrell) at 13. But, “little or no spent
alkylation acid” ever reached the McColl Site. DX 1053 (Dr. Kittrell) at 11.
ii. Acid Sludge Was Disposed Of At The McColl Site.
In Dr. Kittrell’s opinion, almost all of the acid sludge at the McColl Site was “created by”
the acid treatment of pressure distillate and straight run distillate “to improve their properties for
use in refinery products other than avgas.” DX 1053 (Dr. Kittrell) at 14, 28.26 The increase in
avgas production, however, did not cause an increase in non-avgas products, such as motor
26
Dr. Kittrell testified that the amount of acid sludge generated from acid treating of
pressure distillate or straight run distillate decreased from 1942 to 1945. DX 1053 (Dr. Kittrell) at
27–28 (citing PX 1103 (Shell Operating Report 1943) at 808; PX 1104 (1944 Shell Operating
Report) at 133; PX 1104 (1945 Shell Operating Report) at 164).
24
gasoline, that required acid treating and resulted in acid sludge. DX 1053 (Dr. Kittrell) at 43-44.
This is so, because avgas was manufactured, not only using crude oil, but also other petroleum
products shipped to refineries, such as “blend sources, including natural gasoline, blend stocks,
intermediate feedstocks, and petroleum fractions[.]” DX 1053 (Dr. Kittrell) at 44. In addition,
“around 1940,” Shell developed a new process that pre-treated feedstock that was used for gasoline
and did not create sludge. DX 1053 (Dr. Kittrell) at 12. In addition, from 1943 through August
1945, hydrogenation replaced acid treatment for the purification of non-avgas products, resulting
in no sludge waste. DX 1053 (Dr. Kittrell) at 12.27 This explains why as avgas production
increased, particularly in 1943 and 1945, crude oil throughput did not increase proportionately.
DX 1053 (Dr. Kittrell) at 45. And, it explains why as avgas production and spent alkylation acid
increased, acid sludge production did not, but remained constant and declined by the end of the
war. DX 1053 (Dr. Kittrell) at 6–7, 45.
Although the Avgas Contracts led to an increase in the production of spent alkylation acid,
as the following chart shows, “[t]he [acid] sludge that was formed in the Oil Companies Refineries
was equal in amount and quality to that which would have been formed had [the DSC] purchased
no avgas during the time period.” DX 1053 (Dr. Kittrell) at 47.
DX 1039.28
27
But, later in his direct testimony, Dr. Kittrell admitted that, although Shell installed a
hydrogenation unit in 1944, it appears not to have produced “cat cracked stock that was
hydrogenated” until 1945. DX 1053 (Dr. Kittrell) at 13 (citing PX 1104 (1945 Shell Operating
Report) at 195).
28
DX 1039 is based on data from: (1) PX 1103 (Shell Operating Reports 1939–1943); PX
1104 (Shell Operating Reports 1944–1947); and (2) PX 604 (3/31/97 Decl. of Robert G. Anderson
25
Finally, Dr. Kittrell testified that the amount of acid sludge attributable to the Avgas
Contracts and disposed of at the McColl Site can be calculated by tracking the amount of “red oil.”
DX 1053 (Dr. Kittrell) at 40, 42. Roughly 5% to 10% of spent alkylation acid used to make avgas
contained red oil. DX 1053 (Dr. Kittrell) at 53. To calculate the amount of red oil at the McColl
Site, Dr. Kittrell first determined the total number of barrels of avgas produced by the Oil
Companies under the DSC contracts. DX 1053 (Dr. Kittrell) at 51. DX 1025 (table summarizing
purchases of 100 octane avgas by the DSC). Then, he applied each of the Oil Companies internal
formulas for producing avgas29 to calculate how many tons of red oil were used in alkylation
during avgas production. Based on the 72,600 cubic yards of sludge that EPA reported was found
at the McColl Site, Dr. Kittrell estimated that at best only 0.95% of the acid sludge at the McColl
Site can be attributed to the use of spent alkylation acid. DX 1053 (Dr. Kittrell) at 13, 42.
c. The Court’s Findings
To ascertain whether both spent alkylation acid and acid sludge were disposed of at the
McColl Site, the court defers to the May 15, 1996 EPA Superfund Record of Decision (“ROD”)
as the best and most reliable evidence of the fact that “[d]uring the operation of the [McColl]
disposal site, various oil refining companies disposed of refinery waste, predominantly spent
sulfuric acid catalyst.” DX 269 (1996 EPA Superfund ROD) at Part I, § B (emphasis added).
Clearly, this was a reference to the fact that spent alkylation acid was used to produce avgas. DX
269 (1996 EPA Superfund ROD) at Part I, § B; PX 513 (Jan. 1992 EPA Report stating that, “The
[McColl Site] was used from 1942-1946 for the disposal of acidic sludges resulting from the
alkylation and product-treating processes used in the refining of aviation gasoline” (emphasis and
bold added)) at 2; PX 706 (9/21/1990 Dep. of John McColl stating that “watery” acid waste, i.e.,
spent alkylation acid, was disposed of at the McColl Site) at 29; PX 1173 (12/11/44 Minutes of
Aviation Gasoline Advisory Committee reporting that, “on the West Coast sometimes spent
alkylation acid is [disposed of] in a pit as a means of disposal.”); DX 19 (6/23/42 Shell/McColl
Contract reflecting that Eli McColl was expected to accept at least 50,000 barrels of “alkylate acid”
reflecting “amount of used acid sent to disposal by Shell’s Wilmington and Dominguez
refineries”);
But, Dr. Kittrell excluded from DX 1039, the amount of acid sludge from which
recoverable oil could be removed, because “[u]sing the [amount of sludge plus the amount of
sludge from which recoverable oil could be removed] would raise the acid sludge numbers, but
not change the dissimilarity between the two trends. DX 1053 (Dr. Kittrell) at 46 n. 35. As a
result, Dr. Kittrell’s chart does not show the actual production of sludge.
29
For the avgas formulations for Richfield, Dr. Kittrell relied on PX 1115 (Jan., 1942
Richfield cost report) at 49; PX 1248 (12/10/44 PAW Report on avgas production) at 74; and PX
1259 (7/10/44 PAW Report on avgas production). For Texaco, Dr. Kittrell relied on PX 1248
(12/10/44 PAW Report on avgas production) at 79 and PX 1259 (7/10/44 PAW Report) at 24. For
Union, Dr. Kittrell relied on PX 1143 (May 1945 Union Oil cost report), as well as PX 1248
(12/10/44 PAW Report on avgas production) at 81 and PX 1259 (7/10/44 PAW Report) at 27.
26
and “acid sludge” from Shell).30 PX 517 (6/30/93 EPA ROD) (“[f]rom 1942 through 1946,
approximately 72,600 cubic yards of waste sludge was disposed of into the 12 Ramparts and Los
Coyotes sumps at the McColl Site.”) at Part II, § 2 (emphasis added). Therefore, regardless of Dr.
Kittrell’s views to the contrary, spent alkylation acid was disposed of by the Oil Companies at the
McColl Site.
For these reasons, the court finds that both spent alkylation acid and acid sludge are
components of acid waste that were disposed of at the McColl Site by the Oil Companies.
3. The McColl Site.
The third step in the remand analysis requires understanding the physical properties of the
McColl Site, how both types of acid waste were disposed of at the McColl Site, and the EPA’s
election and cost of remediation.31
30
PX 518 (2/1/94 Environmental Solutions Phase V Final Report, McColl Site Treatability
Study) at 1 (stating that contamination was due “to disposal, in pits, of spent sulfuric acid sludge
from the production of aviation fuel”); PX 527 (10/31/96 GeoSyntec Consultants & Parsons
Engineering Science Report to EPA) at 5 (stating that “sulfuric-based alkylation sludge[]” was
disposed of at McColl) (emphasis added)).
31
Both parties proffered environmental engineering experts to supplement the record that
the appellate court considered in 2014. The Oil Companies proffered Edmond F. Bourke as an
expert in environmental engineering, the assessment of hazardous waste sites, and the design,
implementation and maintenance of remedies for hazardous waste sites. TR 392. Mr. Bourke
holds an undergraduate degree from San Diego State University in Applied Arts and Sciences,
with a specialty in Environmental Design, and is the Founder and President of C2 REM, Inc., (“C2
REM”) an environmental management company. PX 18 (Mr. Bourke) at 2. Since 2002, C2 REM
has supervised operations, maintenance, and monitoring at the McColl Site. PX 18 (Mr. Bourke)
at 1. Another company, McAuley, LCX, is responsible for site security. PX 18 (Mr. Bourke) at 2.
As of November 2015, these companies received a combined $4,982,759.64 from the Oil
Companies. PX 18 (Mr. Bourke) at 1.
Although Mr. Bourke was not a chemical engineer nor a geologist, he has 30 years of
“hands-on” practical experience, gained “an understanding and working knowledge” of the
chemical properties of waste materials, and has worked on dozens of Superfund remediation
projects. PX 18 (Mr. Bourke) at 2–3. As a result, he has been approved by the EPA as a Project
Coordinator. PX18 (Mr. Bourke) at 1. The projects where Mr. Bourke has worked include: the
remediation of the Del Amo Superfund site in Los Angeles, involving the construction of a cover
system to remediate contamination from World War II disposal of benzene; and the remediation
of the OII Superfund in Monterey Park, California, involving the construction of a cover system
to control acidic waste. PX 18 (Mr. Bourke) at 3.
The Government objected to Mr. Bourke being offered as an expert in environmental
engineering. TR 403. In particular, the Government argued that Mr. Bourke’s groundwater
remediation testimony should not be afforded any weight, because he is not a Certified California
Civil Engineer and is not qualified to propose a remediation for the McColl Site, because under
27
California law, “[a]ll civil (including structural and geotechnical) engineering plans, calculations,
specifications, and reports . . . shall be prepared by, or under the responsible charge of, a licensed
civil engineer.” See CALIFORNIA BUSINESS AND PROFESSIONAL CODE (“CBPC”) § 6735. In
addition, Mr. Bourke may not have taken organic chemistry or differential equations college
classes, which, according to the Government, is important because of differential equations
“underpins all engineering specialties,” and remediation of the McColl Site involves organic
chemistry. Gov’t DBr. at 60. But, the Government conceded at trial that Mr. Bourke is an
“engineering contractor.” TR at 402.
The Government proffered Dr. Allen J. Medine as an expert in environmental engineering,
environmental chemistry, and hazardous waste management. TR 308. Dr. Medine holds a Ph.D.
in Environmental Engineering from Utah State University, a M.S. in Civil and Sanitary
Engineering from the University of California, Berkeley, and a B.S. from the University of Illinois.
DX 1056 at 5. He is a registered Civil Engineer in California and a registered Professional
Engineer in Colorado. DX 1056 at 5. Dr. Medine’s water quality and environmental management
experience includes: analytical evaluation of trace chemicals in water; the design of industrial
waste treatment facilities; cost evaluations; and “restoration of damaged ecosystems.” DX 1056 at
6. In addition, he has served as a Project Manager and Senior Environmental Engineer at waste
sites and has personal experience with acid spill cleanup and studied spills and discharges of acid
at twenty sites. DX 1056 at 6–7. Dr. Medine is not an expert in petroleum engineering or avgas
production. TR (Dr. Medine) at 313. Dr. Medine has never visited the McColl Site. TR (Dr.
Medine) at 313. Dr. Medine has, however, previously analyzed petroleum wastes in the laboratory
setting while working as the technical director of Eneseco’s Rocky Mountain Analytical Division.
TR (Dr. Medine) at 316.
The court has determined that Mr. Bourke and Dr. Medine are experts and qualified to
testify in their respective fields. See FRE 702.
28
a. The Physical Properties Of The McColl Site.
The McColl Site consists of two parcels of land: an eastern parcel (“the Ramparts parcel”)
and a western parcel (“the Los Coyotes parcel”). PX 18 (Mr. Bourke) at 7; DX 1056 (Dr. Medine)
at 8. Each parcel contained 6 pits, known as “sumps,” into which acid waste from the Oil
Companies was disposed from June 23, 1942 until September 6, 1946, the date of closure. PX 18
(Mr. Bourke) at 7; DX 1056 (Dr. Medine) at 8.
Typical sumps at the Ramparts and the Los Coyotes parcels are depicted below:
DX 1046 (Dr. Medine) Figure 4.
DX 1047 (Dr. Medine) Figure 5.
29
Each sump contained a bottom layer of char that is a “black, friable material similar to coal
or asphaltic cement.” PX 18 (Mr. Bourke) at 11; DX 1056 (Dr. Medine) at 9. Char is formed by
acid waste that solidifies by chemical reactions over time. PX 527 at 9, 11 (10/31/96 Report by
GeoSyntec & Parsons Engineering Science for EPA).32 Char is very acidic33 and releases sulfur
dioxide and volatile organic compounds (“VOCs”), such as benzene and tetrahydrothiophene
(“THT”), when exposed to the atmosphere. PX 18 (Mr. Bourke) at 12 (citing PX517 (6/30/93 EPA
ROD) at Part II, § 7.0); DX 1056 (Dr. Medine) at 15. Char comprised the majority of the acid
waste at the McColl Site. DX 277 (2002 C2 REM Annual Report re McColl Site) at 9 (“The
majority of the waste has been characterized as a hard, black char with low pH.”).
Each sump also contained tar. PX 18 (Mr. Bourke) at 12; DX 1056 (Dr. Medine) at 9. Tar
is an intermediate product formed by the same chemical reactions that transforms acid sludge into
char. PX 527 (10/31/96 Report by GeoSyntec & Parsons Engineering Science For EPA) at 11
(“The flowable tar material is suspected as being an intermediate product of the reaction
mechanisms occurring at the site.”). Unlike char, tar waste is fluid and can migrate through the
soil. PX 517 (6/30/93 EPA ROD) at Part II, § 7.0.
Three sumps located on the eastern Ramparts Parcel also contained drilling muds. PX 18
(Mr. Bourke) at 13 (citing PX 517 (6/30/93 EPA ROD) at Part II, § 2.0). Drilling muds have the
consistency of soft clay. PX 517 (6/30/93 EPA ROD) at Part II, § 7.0. Drilling muds were
deposited at these sites in the 1950s and 1960s to cover up the sumps and reduce harmful odors.
PX 18 (Mr. Bourke) at 9; TR (Dr. Medine) at 318. Drilling muds alone, however, would not have
required remediation, but did at the McColl Site, because of contaminant concentration. TR (Dr.
Medine) at 320.
Each of the sumps also contained contaminated soils consisting of underlying and cover
soils mixed with acid waste. PX 18 (Mr. Bourke) at 14. Arsenic-contaminated soil was also
32
A 1996 report prepared for the EPA concerning the chemical conditions at the McColl Site
summarized these reactions as follows:
Three reaction types have been proposed for conversion of the original waste into
char: (i) acid-catalyzed polymerization and polycondensation of organic material,
(ii) acid-catalyzed polymerization and polycondensation of organic material,
accelerated by acidified clay and reaction with clay, and (iii) acid-catalyzed
polymerization and polycondensation of organic material, accelerated by auto-
oxidation. These reactions are irreversible under existing conditions at the site.
PX 527 (10/31/96 Report by GeoSyntec & Parsons Engineering Science For EPA) at 11.
33
Acidity and basicity is measured on the pH scale: a pH range of 1 to 6 is considered
acidic, pH 7 is neutral, and pH 8 to14 is considered basic. TR (Dr. Medine) at 332. The pH levels
at McColl were below 1 in certain samples, i.e., highly acidic. TR (Dr. Medine) at 333. There
also were samples with a pH approaching a level of 8. TR (Dr. Medine) at 333. The average pH
level at the Los Coyotes sumps was approximately 2; and the average pH level of the Rampart
sumps was 3. TR (Dr. Medine) at 334.
30
present, but only at one sump. PX 517 (6/30/93 EPA ROD) at Part II, §§ 2.0, 7.0. PX 18 (Mr.
Bourke) at 14.
The average area of each sump was approximately 15,000 square feet (100 feet x 150 feet),
180,000 square feet for all 12 sumps. PX 510 (2/15/83 Radian Corp. Technical Memorandum for
EPA), at 1-1, 3-6, 4-3; PX 18 (Mr. Bourke) at 52. Each sump was approximately 20 feet deep
with a slope on each side. PX 512 (2/12/91 Environ Solutions Inc. McColl Report) at 2-7; PX 18
(Mr. Bourke) at 52. The Ramparts 1 sump and the Los Coyotes 1 sump were significantly larger
with areas of 27,022 square feet34 and 28,128 square feet,35 respectively. PX 510 (2/15/83 Radian
Corp. Technical Memorandum for EPA) at 3–7.36
b. “Contaminants Of Concern” At The McColl Site.
Contaminants of Concern (“COCs”)37 are chemicals that pose a risk to human health and
the environment. DX 1056 (Dr. Medine) at 19. At the McColl Site, the COCs found in the soil,
groundwater, and air include: sulfur dioxide; arsenic; benzene; tetrahydrothiophenes (“THTs”);
and metals (aluminum, beryllium, cadmium, manganese, nickel, and vanadium). PX 18 (Mr.
Bourke) at 15–23; PX 517 (6/30/93 EPA ROD) at Part II, § 4.0 (“[T]he principal threats at the Site
[include] benzene, sulfur dioxide, and arsenic.”). Sulfuric acid was not considered as a COC, but
34
The Ramparts 1 sump contained 581,000 cubic feet of waste (area of 27,022 square feet
x depth of 21.5 feet). PX 510 (2/15/83 Radian Corp. Technical Memorandum for EPA) at 3-9.
This 581,000 cubic feet of acid waste yields approximately 21,518 cubic yards of waste (581,000
cubic feet/27 cubic feet per cubic yard).
35
The Los Coyotes 1 sump contained 85,644.8 cubic feet of waste or 6,875.7 cubic yards.
PX 510 (2/15/83 Radian Corp. Technical Memorandum for EPA) at 3-9.
36
The McColl Site was opened for operation on July 1, 1942, but the record does not
include documents showing how many sumps existed or the order in which they were dug and
filled. The Oil Companies cite the April 11, 1984 EPA ROD that states “[i]n 1942 Eli McColl had
12 pits constructed.” PX 511 (4/11/84 EPA ROD re McColl) at § II; PX 18 (Mr. Bourke) at 51;
PX 1009 (1947 aerial photo showing 12 pits).
The Government insists that one sump at a time was excavated and filled, before a second
sump was excavated, based on the inconclusive testimony of Eli McColl’s son about events that
took place forty-eight years earlier. PX 706 (9/21/90 John McColl Dep.) at 58. Although the
record is not definitive, the court has determined that the preponderance of evidence weighs in
favor of the EPA’s conclusion that 12 sumps were dug and in existence in 1942. PX 511 (4/11/84
EPA ROD re McColl) at § II.
37
Contaminants of Concern also are referred to in the record as “constituents of concern”
or “chemicals of concern.” See, e.g., PX 18 (Mr. Bourke referring to COCs as “chemicals of
concern”) at 14; DX 277 (C2 REM Report referring to COCs as “constituents of concern”) at 9–
10.
31
was “a substance that contributes to the chemical conditions within the sumps;” and “may be
dangerous [to humans] upon exposure.” DX 1056 (Dr. Medine) at 19.
Sulfur dioxide is formed by a chemical reaction that separates sulfate (SO4) into water
(H2O) and sulfur dioxide (SO2). PX 18 (Mr. Bourke) at 18. Sulfuric acid was present both in the
spent alkylation acid and the acid sludge38 and was the source of “almost all” the sulfate molecules
that broke down to form sulfur dioxide. PX 18 (Mr. Bourke) at 18.
In addition, metals naturally present at the site became COCs when they were dissolved by
the sulfuric acid and “mobilized.” PX 18 (Mr. Bourke) at 20. After being mobilized, the metals
migrated through the soil and contaminated water in the perched aquifers. PX 18 (Mr. Bourke) at
20 (citing PX521 (ICF Technology Inc. Nov. 1995 Baseline Risk Assessment for McColl
Superfund Site) at §11 at 7-4); DX 1056 (Dr. Medine) at 30. In addition, arsenic naturally found
in the soil at the McColl Site also was mobilized by the sulfuric acid. PX 18 (Mr. Bourke) at 21–
22.
Benzene also was present in the soil at the McColl Site, because of the disposal of benzol
sludge but, typically, microorganisms living in soil break the benzene down into a “harmless by-
product.” PX 18 (Mr. Bourke) at 17. At the McColl Site, however, these microorganisms were
killed by the sulfuric acid in the acid waste, so they were unable to break down the benzene. PX
18 (Mr. Bourke) at 17; TR (Dr. Medine) at 335.
The Government’s expert, Dr. Medine testified that remediation was required, because of
the presence of “benzene, THT, sulfur dioxide, and arsenic, among other contaminants, rather than
sulfuric acid.” DX 1056 (Dr. Medine) at 26 (emphasis added); DX 1053 (Dr. Kittrell) at 14.
Benzene and THT also were considered COCs, because of the existence of a complex mix of
carbon molecules and organic sulfates found in acid sludge. DX 1056 (Dr. Medine) at 28–29.
“Leaching of contaminants from the petroleum wastes [present in the acid sludge, however,] would
have occurred regardless of the presence of sulfuric acid. Hydrocarbons soluble in water,
including, for example, aromatics (benzene), aliphatics, phenols, cresols would interact with
precipitation and surface water runoff to result in contaminant migration.” DX 1056 (Dr. Medine)
at 29. Likewise, THT was a COC, because of the fractions used in Straight Run (SR) Distillate
and Pressure Distillate (PD) processes that lead to the creation of acid sludge. DX 1056 (Dr.
Medine) at 28.
Dr. Medine conceded that sulfur dioxide could be formed by the decomposition of organic
sulfates, within the acid sludge, as a result of reactions that took place in the alkylation unit, where
sulfuric acid reacted with conjunct polymers formed from olefins known as “Red Oils.” DX 1056
(Dr. Medine) at 26. And, Dr. Medine agreed that sulfuric acid present in the acid waste advanced
chemical reactions that mobilized metals and arsenics naturally present in the soil, leading to a
threat of groundwater contamination. DX 1056 (Dr. Medine) at 27. But, considering the potential
eight to one ratio of acid sludge to spent alkylation acid, any potential spent alkylation acid
38
Dr. Medine agreed that acid sludge was “very complex in nature due to the variety of
reactions among petroleum components and concentrated sulfuric acid.” DX 1056 (Dr. Medine)
at 13.
32
disposed of at the McColl Site would have added to the size of the sumps, but would not have
materially altered the chemical reaction conditions within each sump. DX 1056 (Dr. Medine) at
27, 32. Although the spent alkylation acid was of a higher acid strength then the acid sludge (87%–
90% strength as compared to 35%–65% strength), both were still “extremely acidic” and the
greater amount of acid sludge correspondingly led to a greater amount of sulfur dioxide release.
DX 1056 (Dr. Medine) at 27.
The components of the acid sludge, “including high acidity, high organic carbon, metals,
organic sulfates, and sulfate, and the associated degradation of organic sulfates to sulfur dioxide,
[were] the most significant contributor to the site risks.” DX 1056 (Dr. Medine) at 28. To the
extent that the acid sludge resulted in char formation, the presence of spent alkylation acid in the
sumps also would increase char formation. DX 1056 (Dr. Medine) at 31.
Finally, Dr. Medine testified that, if only spent alkylation acid was disposed of at the
McColl Site, remediation, although necessary, would have been reduced in cost. Based on his
experience with past acid spills, Dr. Medine estimated that over time the spent alkylation acid
would come into contact with naturally occurring neutralizing elements in the subsurface soil and
water. DX 1056 (Dr. Medine) at 33; TR (Dr. Medine) at 361. This data indicated that spent
alkylation acid had only a limited effect on the subsurface, as the pH levels were “near neutral.”
DX 1056 (Dr. Medine) at 34. This data collected also demonstrated the continued existence of
high pH neutralizing capacity (alkalinity) within the subsurface. DX 1056 (Dr. Medine) at 34
(citing DX 261, DX 262). If only spent alkylation acid was disposed of in the 1940s, subsurface
migration and neutralization would reduce the cost of remediation required seventy years later.
DX 1056 (Dr. Medine) at 34.
c. The Remediation Solution39 Elected By The Environmental
Protection Agency For The McColl Site.
Because sulfur dioxide (SO2) was found both in the soil and air at the McColl Site, the EPA
elected a remediation solution using a cover system to prevent both hazardous emission and water
infiltration. PX 524 (3/4/96 GeoSyntec & Parsons Engineering Science Report) at 1–2, 7–2. PX
517 (6/30/93 EPA ROD re McColl Site) at Part I, § 4.2. In addition, sub-surface barriers (“slurry
walls”) were constructed to prevent lateral migration of the COCs, together with a reinforced
earthen slope to protect the stability of the cover system. PX 517 (re same) at Part I, § 4.2. This
remediation solution also included the construction of water infiltration controls and periodic
monitoring of groundwater. PX 18 (Mr. Bourke) at 30–31; DX 1056 (Dr. Medine) at 4 (“[I]f sulfur
dioxide and benzene were removed, the remedy would likely be different . . . excavation could
39
Although prior court decisions refer to the costs incurred by the Oil Companies to address
the environmental issues at the McColl Site, as “recovery costs,” the solution elected by the EPA
more accurately is described as remediation. Section 9601 of CERCLA provides that: “(24) The
terms “remedy” or “remedial action” means those actions consistent with permanent remedy
taken instead of or in addition to removal actions[.]”. 42 U.S.C. § 9601 (emphasis added).
33
have been implemented to remove and destroy contaminants rather than leave them in place with
a containment facility.”); DX 1056 (Dr. Medine) at 26–27 (same).
D. All Of The Acid Waste Disposed Of At The McColl Site Was “By Reason Of”
The Avgas Contracts.
1. The Relevant Causation Standard.
To obtain breach of contract damages, the plaintiff bears the burden of establishing: “(1) a
valid contract between the parties; (2) an obligation or duty arising out of the contract; (3) a breach
of that duty; and (4) damages caused by the breach.” San Carlos Irrigation & Drainage Dist. v.
United States, 877 F.2d 957, 959 (Fed. Cir. 1989) (emphasis added). Since the United States Court
of Appeals for the Federal Circuit has held that the Government breached the Avgas Contracts, the
court now must determine whether the damages claimed by the Oil Companies were caused by
that breach. To satisfy this fourth element, the plaintiff also must show that: “(1) the damages
were reasonably foreseeable by the breaching party at the time of contracting; (2) the breach is a
substantial causal factor in the damages; and (3) the damages are shown with reasonable certainty.”
Indiana Michigan Power Co. v. United States, 422 F.3d 1369, 1373 (Fed. Cir. 2005).
2. In 1942, It Was Reasonably Foreseeable To The Government That The
Taxes Clause Of The Avgas Contracts Could Be Invoked In the Future
To Compensate The Oil Companies For “New Charges” Required To
Remediate Acid Waste At The McColl Site.
In 1926, the Oil Companies formed the Refiners Committee On Waste Disposal to
ascertain how to arrange for the long term disposal of acid waste from their refineries in the
Southern California. DX 5 at ¶¶ 45, 47; DX 67 (Sept. 1930 Oil Bulletin “Committees’
Investigators Trace Chief Cause For Complaints To Incomplete Combustion of “Acid Tar” At
Refineries; Now Being Remedied By Installation Of Special Equipment”); DX 76 (10/2/34
Minutes of Committee Of Refinery Odors); DX 1055 (Dr. Bookspan) at 6. To handle and dispose
of acid waste produced by their refining processes, the Oil Companies contracted with several
companies, such as the trucking company owned by Eli McColl. DX 1054 (Dr. Brigham) at 15–
16; DX 1055 (Dr. Bookspan) at 5–6.
In April 1942, the DSC entered into contracts with the Oil Companies to purchase avgas
and resell it to the Army and Navy. See Shell Oil Co. v. United States, 751 F.3d at 1286. Each
contract included the Taxes Clause was required by the Oil Companies and agreed to by the
Government, anticipating the fact that “new . . . charges . . . may be required by . . . federal law.”
PX 1 (1/17/42 Contract between DSC and Texaco) at JA159; PX 2 (2/3/42 Contract between DSC
and Richfield) at JA112; PX 3 (4/10/42 Contract between DSC and Shell) at JA16; PX 5 (12/31/42
Contract between DSC and Union) at JA61. This contractual provision was agreed to by both
DSC and PAW officials, because as former oil company executives and/or top employees they
were very aware of the relationship between the increased production of avgas, resulting acid
34
waste, increasing environmental problems,40 and the cost of disposal. DX 1054 (Dr. Brigham)
at 18–19.
In addition, the fact that the price of avgas under the Avgas Contracts was set at a 6%–7%
profit margin over the “base price” evidences that the Government was aware that the Oil
Companies had to maximize revenues from all non-avgas petroleum by-products or be at risk of
having to ask the Government to increase their profit margins, that consequently would raise the
price of avgas. Since it was expensive to dispose of acid waste, the Oil Companies also were
required to make every effort to recycle and reuse both spent alkylation acid and acid sludge to
keep the costs of avgas production down. PX 1126 (5/6/42 testimony of Eli McColl that disposal
was considered a “last resort”). The Government was successful in containing the price of avgas,
but this resulted in the manufacture and sale of increased non-avgas petroleum by-products that
substantially increased the amount of both spent alkylation acid and acid sludge, requiring
disposal.
For these reasons, the court has determined that, in 1942, it was reasonably foreseeable to
the Government that the Taxes Clause could be invoked in the future to compensate the Oil
Companies for “new charges” required to remediate acid waste at the McColl Site.
3. The Requirements Of The Avgas Contracts Were A “Substantial
Causal” Factor In The Remediation Of Acid Waste At The McColl
Site.
The United States Court of Appeals for the Federal Circuit remanded this case to United
States Court of Federal Claims to determine how much of the acid waste disposed of at the McColl
Site was “by reason of the [A]vgas [C]ontracts.” Shell Oil, 751 F.3d at 1303. In Burrage v. United
States, 134 S. Ct. 881 (2014), the United States Supreme Court observed that “[i]n common talk .
. . the phrase, ‘by reason of,’ requires at least a showing of ‘but for’ causation.’” Id. at 889. In
Energy Northwest v. United States, 641 F.3d 1300 (Fed. Cir. 2011), our appellate court restated
that a plaintiff seeking damages for a breach of contract “must submit a hypothetical model
establishing what its costs would have been [to a reasonable certainty] in the absence of breach . .
. by comparing this hypothetical ‘but for’ scenario with the [plaintiff’s] actual conduct[.]” Id. at
1305, 1307; see also Yankee Atomic Electric Co. v. United States, 536 F.3d 1268, 1273 (Fed. Cir.
2008) (“Without record evidence about [the plaintiff’s] condition with full Government
performance, the [United States Court of Federal Claims] could not perform the necessary
comparison between the breach and non-breach worlds and thus could not accurately assess the
[the plaintiff’s] damages.”).
According to the Government, the “evidence is abundantly clear” that the Oil Companies
would not have shut down their refineries [but for the Avgas Contracts], and instead would have
conducted “normal refinery operations,” resulting in the production of non-avgas products and
acid sludge. Gov’t DBr. at 51. (“[The Oil Companies] merely would have continued their
40
At this time, one of the disposal sites used by Oil Companies was the Thomas Ranch,
but it was reaching capacity and a local ordinance was being considered that would ban all future
“sludge dumping.” DX 1054 (Dr. Brigham) at 16–17.
35
decades’ long practice of [disposing of] acid sludge into pits in the ground, regardless of the
existence of the avgas contract[.]”). Therefore, the Government argued that, “under the correct
but-for analysis, the operative question to ask is whether the refineries would have shut down[,]
but for the avgas contracts.” Gov’t DBr. at 62. This “operative question,” however, ignores the
relevance of the Government’s obligations in the Avgas Contracts and misstates the but-for
causation standard that does not require the Oil Companies to establish that spent alkylation acid
and/or acid sludge would not have been produced “but for” the Avgas Contracts --- but instead,
how much acid waste disposed of at the McColl Site was caused by the increased avgas production
and need to maximize the manufacture and sale of non-avgas petroleum by-products --- required
by the terms of the Avgas Contracts.
Recognizing this problem, the Government took a different tack in its closing argument,
asserting that 1941 is the appropriate “but-for” year in which to examine the non-breach world,
because that year reflects “normal” refinery operations before the Avgas Contracts were signed.
11/21/2016 TR at 65. But, by early 1940, the Oil Companies already began to increase the
production of military avgas. PX 1298 (9/27/40 letter from the head of the RFC reflecting that on
August 16, 1940, President Roosevelt authorized the DSC to allocate $50 million to purchase 100
octane-aviation gasoline and that the DSC had “been ready since [August 29, 1940] to buy the
gasoline” for resale to the Army and Navy). And, shortly afterward, the Lend-Lease Act was signed
in March, 1941, whereby the Government increased supplying other countries with essential war
materials, such as avgas. In 1945, however, the war ended and the Avgas Contracts expired in
1946. PX 1104 (1945 Shell Operating Report stating that “Cancellation of Government contracts
at the end of the war necessitated broad changes in the refinery operating program[.]”) at 159; PX
17 (Mr. Kipp) at 44 (“avgas production plummeted in 1946 to pre-Contract levels.”
For these reasons, the court has determined that 1946 is the appropriate year to measure
the amount of acid waste that would have been sent to the McColl Site in a non-breach world. But,
none of the Oil Companies disposed of acid waste at the McColl Site in 1946.41 Before
determining causation, the court also decided to consider the relevance of the following new
evidence not previously considered by the United States Court of Appeals for the Federal Circuit.
In November 1941, the OPC conducted a nationwide survey of refineries’ sulfuric acid
usage to prepare for the “large required expansion of alkylation processes” associated with
increased avgas production. PX 1112 at 1. The survey asked: “If consumption [of sulfuric acid]
is to be increased, what provisions will be made for securing additional acid and for handling
resultant [acid] sludge?” PX 1112 at Sheet 3 (emphasis and bold added). This evidences that the
Government expected that “additional acid” i.e., spent alkylation acid resulting from the
production of avgas and its use to acid treat non-avgas petroleum products, would result in acid
sludge and require disposal. In December 1941, Shell informed OPC that it anticipated additional
alkylation facilities at its Dominguez Refinery, but cautioned that “[d]isposal of sludge has not
been arranged.” PX 1114 (Refinery Sulfuric Acid Survey Responses) at 0622FL. On January 9,
41
The record reflects that Shell did not dispose of any of the acid sludge that it generated
in 1946, after the war was over and the Avgas Contracts expired. PX 1104 (1946 Shell Operating
Report) at 302, 395. Instead, acid sludge produced in 1946 was sent for reprocessing via tank cars
or pipelines. PX 1104 (1946 Shell Operating Report) at 302, 395.
36
1942, Shell advised the OPC that it would dispose of acid sludge at its refineries “by contractor.”
PX 1113 (1/9/42 OPC Table Summarizing Refinery Sulfuric Acid Survey Responses) at 3. As
such, before the Avgas Contracts were executed, the Government knew and expected that the
increased production of avgas required thereunder would entail disposal of both types of acid
waste. Although the Government may not have known the specific place of disposal would be the
McColl Site, the Government was aware that disposal likely would take place at a location in the
Southern California area, as had been the case since at least the 1930s.
The record also reflects that some of the avgas that Shell produced from January 1943, to
May 1943 was sold to non-DSC customers. PX 1148 (8/20/43 DSC letter reflecting the percentage
of avgas Shell sold to non-DSC customers decreased from 13.2% in January 1943 to 3.6% in May
1943). The record, however, does not establish that any of the spent alkylation acid that resulted
from the sale of this avgas was disposed of at the McColl Site at this time. PX 1103 (1943 Shell
Operating Report reflecting that Shell’s spent alkylation acid was sent to reprocessing facilities)
at 686. The record, however, reflects that for the entire year 1943, Shell disposed of 112,367
barrels of sludge at the McColl Site, an unknown amount of which could be attributed to non-DSC
customers. PX 1103 at 686.
Divided by 112,367 barrels of acid sludge
27 cubic x 42 gallons per barrel
feet per x .13 cubic feet of acid sludge
cubic yard
613,524 cubic feet of acid sludge = 22,723.1 cubic yards of
acid sludge
The total remediation cost for 72,600 cubic yards at the McColl Site was $64,219,514.46
or $884.57 per yard. Thus, assuming that all of that sludge was associated with non-contract avgas
and all of Shell’s 1943 sludge was disposed of at McColl Site, $20,100,092.76 could be considered
as a deduction from Shell’s damages, together with associated interest.
But, the record also reflects that Shell only sold 13.2% of its avgas to non-DSC customers
in January 1943, and this amount decreased by roughly 10% by May 1943. PX 1148 (8/20/43
DSC Letter). And, the DSC “continue[d] to urge Shell to reduce further its direct [i.e., non-DSC]
sales.” PX 1148. Therefore, what the record evidences is that Shell produced a total of 2,940,000
barrels of avgas in 1943. PX 1189 (1945 Report To WPB summarizing avgas production for the
entire war).
37
Assuming that Shell uniformly reduced non-DSC avgas sales by 2.4% each month and
produced avgas at a uniform monthly rate, beginning in January 1943, Shell would have sold
105,840 barrels of non-DSC avgas in 1943, as summarized in the following table:
The 105,840 barrels of non-DSC avgas represents 3.6% of the total 2,940,000 barrels of
the avgas that Shell produced in 1943. Assuming that 3.6% of that avgas also generated 3.6% of
the sludge produced in 1943, a total of 818 cubic yards of sludge nominally could be attributed to
Shell’s 1943 non-DSC avgas sales. At $884.75 per yard, this yields $723,578.26.
But the remediation solution elected by the EPA utilized a closure system for each of the
12 sumps that did not differentiate between spent alkylation acid or acid sludge disposed of by the
Oil Companies at the McColl Site. In other words, the cost to remediate acid waste at the McColl
Site, resulting from the increased production of avgas, under the Avgas Contracts, was the same
whether it was composed of spent alkylation acid or acid sludge, or a combination of both, or acid
sludge generated from non-DSC avgas sales. PX 517 (EPA 6/30/93 ROD re McColl Site) at Part
I, § 4.2. As the Government’s expert environmental engineer testified, the remediation solution
elected by the EPA was based on the entire McColl Site, so “it matters little if you remove any one
COC[.]” DX 1056 (Dr. Medine) at 26; TR (Dr. Medine) at 327 (“The remedy is designed to
address all of the contaminants of concern, not just the primary ones.”) (emphasis added). The
bottom line is “[t]he uncertainty in the migration of any one of the COCs . . . dictates that the site
be managed as a single entity.” DX 1056 (Dr. Medine) at 26.
For these reasons, the court has determined that the Avgas Contracts were a “substantial
causal” factor in the remediation of the acid waste at the McColl Site and “but for” the
Government’s breach of the Avgas Contracts, the Government would have been required to pay
all of the environmental remediation costs at the McColl Site, because of the solution elected by
the EPA. Therefore, the Oil Companies are entitled to damages reflecting all of the costs they paid
to remediate the McColl Site. See Indiana Michigan Power Co. v. United States, 422 F.3d 1369,
38
1373 (Fed. Cir. 2005) (“The remedy for breach of contract is damages sufficient to place the
injured party in as good a position as it would have been had the breaching party fully
performed.”).
4. The Breach of Contract Damages Have Been Established With
“Reasonable Certainty.”
a. The Oil Companies’ Proffer And Argument.
The Oil Companies proffered the following evidence to establish the environmental
remediation costs incurred were established with “reasonable certainty:”
(1) PX 12 – October 13, 1999 Stipulation entered into during the CERCLA litigation
before the United States District Court for the Central District of California (“PX 12”).
(2) PX 14 – July 11, 2008 Defendant’s Responses To Plaintiffs’ Proposed Findings Of
Uncontroverted Fact submitted to the United States Court of Federal Claims (“PX
14”).
(3) PX 15 – September 7, 2012 Defendant’s Response To Plaintiffs’ Proposed Findings
Of Uncontroverted Fact submitted to the United States Court of Federal Claims.
(4) PX 101–03 – Declarations of Edmond F. Bourke, President of C2 REM. PX 101
(9/6/2008 Bourke Decl.); PX 102 (July, 2010 Bourke Decl.); PX 103 (6/26/2016
Bourke Decl.).
(5) PX 104–264 – Invoices submitted by C2 REM to the Oil Companies from November
11, 2002 to January 6, 2016. PX 104–221 (C2 REM Invoices for the McColl Site
from November 11, 2002 to May 31, 2012); PX 222–63 (C2 REM Invoices from July
9, 2012 to Nov. 30, 2015); and
(6) PX 271–83 – Payments to McAuley, LCX from June 24, 2003 to May 1, 2015.
On October 13, 1999, the Oil Companies and the Government stipulated that the Oil
Companies incurred $64,219,514.46 in remediation costs through October 31, 1998. PX 12 at
JA610. The $64,219,514.46 included $18,000,000 that the Oil Companies had paid to the
Government and to the State of the California, pursuant to a December 12, 1994 Consent Decree
entered by the United States District Court for the Central District of California. PX 14 at ¶14.
The remaining $46,219,514.46 balance was paid by the Oil Companies on or before November 1,
1997, when the EPA concluded that “construction had been completed according to specifications
and the remediation had been successfully implemented.” PX 14 at ¶15. The $64,219,514.46
amount stipulated to on October 13, 1999 excluded any interest. PX 12 at JA610.
The Oil Companies claim that they are also entitled to a simple annual interest rate of 2.5
percent on both the initial $18,000,000 December 12, 1994 payment and on the stipulated
$64,219,514.46 for remediation costs, under the Contract Settlement Act,
39
41 U.S.C. § 106(f) (repealed 2011).42 The Oil Companies claim 2.5% interest on $18,000,000
from January 1, 1995 through October 31, 1997, or a total interest payment of $1,275,000.
Plaintiffs’ Damages Exhibit (“Pl. Dm. Ex.”) 5.43 Since the Government did not dispute that the
Oil Companies paid an additional $46,219,514.46 by November 1, 1997 for remediation costs, the
Oil Companies also claim 2.5% interest on the $64,219,514.46 total stipulated amount, from
November 1, 1997 through November 30, 2015, or an additional interest payment of
$29,032,573.22. Pl. Damages Ex. 5; see also PX 14 at ¶15.
The Oil Companies do not claim any damages incurred between November 1, 1998 and
August 2002, other than statutory interest, because, during this time, the EPA supervised all
42
Section 106(f) of the Contract Settlement Act (“CSA”) of 1944 provides that,
Each contracting agency shall allow and pay interest on the amount due and unpaid
from time to time on any termination claim under a prime contract at the rate of 2
½ per centum per annum for the period beginning thirty days after the date fixed
for termination and ending with the date of final payment, except that (1) if the
prime contractor unreasonably delays the settlement of his claim, interest shall not
accrue for the period of such delay, (2) if interest for the period after termination
on any advance payment or loan, made or guaranteed by the Government, has been
waived for the benefit of the contractor, the amount of the interest so waived
allocable to the terminated contract or the terminated part of the contract shall be
deducted from the interest otherwise payable hereunder, and (3) if after delivery of
findings by a contracting agency, the contractor appeals or sues as provided in
section 113 of this title, interest shall not accrue after the thirtieth day following the
delivery of the findings on any amount allowed by such findings, unless such
amount is increased upon such appeal or suit. In approving, ratifying, authorizing,
or making termination settlements with subcontractors, each contracting agency
shall allow interest on the termination claim of the subcontractor on the same basis
and subject to the same conditions as are applicable to a prime contractor.
41 U.S.C. § 106(f) (repealed 2011) (emphasis added).
In 2011, the CSA was repealed and replaced by An Act To Enact Certain Laws Relating
To Public Contracts, Pub. L. 111–350, 124 Stat. 3677. The 2011 Act contained a savings clause
providing that, “[t]he laws . . . are repealed except for rights and duties that matured, penalties that
were incurred, and proceedings that were begun before the date of enactment of this Act.” Pub.
L. No. 111–350, § 7(b), 124 Stat. 3677, 3855 (2011) (emphasis added). Consequently, the Oil
Companies may still recover for interest on the environmental remediation costs they have
incurred, as the Oil Companies right to be reimbursed for environmental remediation costs under
the Avgas Contracts matured prior to 2011.
Plaintiff’s Damages Exhibits 1–5, attached hereto as Court Exhibit C, summarize the
43
amount of statutory interest that has accrued, on the initial $18 million December 13, 1994
payment and the subsequent October 13, 1999 $64,219,514.46 stipulated remediation cost figure,
divided among the Oil Companies.
40
operations, maintenance, and monitoring work at the McColl Site. Pl DBr. at 125–26 (citing DX
275 (2000 & 2001 McColl Superfund Site Annual Reports) at ES-1).
In June 2002, the Oil Companies retained C2 REM to supervise future operations,
maintenance, and monitoring (“OM&M”) work at the McColl Site. PX 18 (Mr. Bourke) at 72.
C2 REM submitted its first invoice to Shell on November 11, 2002. PX 104 (C2 REM Invoice).
From November 11, 2002 to June 30, 2012, the Oil Companies incurred $2,935,846.26 that was
paid to C2 REM, in addition to $348,316.68 in interest on those payments. Pl. Dam. Exs. 1–4; PX
104–221 (C2 REM Invoices). From July 1, 2012 to November 30, 2015, the Oil Companies
incurred an additional $1,105,975.58 that was paid to C2 REM in addition to $293,208.51 in
interest on those payments. Pl. Dam. Exs. 1–4; PX 223–263 (C2 REM Invoices) PX 300–301
(tables summarizing amounts paid to C2 REM and accrued interest).
Beginning in 2003, the Oil Companies also paid McAuley, LCX an annual lump sum of
$20,000 to provide surface maintenance and site security for the McColl Site. PX 18 at 72 (Bourke
Direct); TR at 408 (Bourke).44 From June 24, 2003 to June 30, 2012, the Oil Companies also
incurred $198,000.00 paid to McAuley, LCX, in addition to $22,733.38 in interest on that amount.
Pl. Dam. Exs. 1–4; PX 271–80 (Records of Payment to McAuley, LCX). From July 1, 2012 to
November 30, 2015, the Oil Companies paid an additional $59,400.00 to McAuley, LCX, and
$19,279.23 in interest was accrued on those costs. Pl. Dam. Exs. 1–4; PX 281–83 (records of
payment to McAuley, LCX); PX 303–04 (tables summarizing costs paid to McAuley, LCX and
accrued interest).
In sum, the Oil Companies claim that they are entitled to:
(1) $64,219,514.46 in total remediation costs, including $18 million paid on December
12, 1994 and an additional $46,219,514.46 paid by November 1, 1997.
(2) $37,500 in interest each month on the $18 million paid on December 12, 1994, from
January 1, 1995 to October 31, 1997, for a total of $1,275,000;
(3) $133,790.66 in in interest each month on the $64,219,514.46 total remediation costs,
from November 1, 1997 to November 30, 2015, for a total of $29,032,573.22;
(4) $4,683,347.03 in costs with interest paid to C2 REM; and
(5) $299,412.61 in costs with interest paid to McAuley, LCX.
In sum, the Oil Companies claim a total of $99,509,847.32 in breach of contract damages,
including accrued interest. Pl. DBr. at 170.
44
One percent of the amount McAuley received was paid by another refining company,
ConocoPhillips, and is not claimed as damages by the Oil Companies. Pl. DBr. at 126.
41
The Oil Companies have divided the damages payable to each Plaintiff, as summarized in
the following table:
Pl. DBr. at 170.45
b. The Government’s Response.
The Government responds that the Oil Companies failed to prove damages to a degree of
“reasonable certainty” and instead seek damages that are merely “speculative.” Gov’t DBr. at 65.
The United States Court of Appeals for the Federal Circuit’s third remand permitted the
Government to “challeng[e]” the amount of damages owed, and consequently, the Oil Companies
were required to submit evidence of damages. Gov’t DBr. at 65 (citing Shell Oil Co., 751 F.3d at
1303). The Stipulation relied on by the Oil Companies to establish their pre-November 1, 1999
damages is inadmissible. Gov’t DBr. at 66; see also PX 12 at JA610 (10/13/99 Stipulation that
the Government could owe the Oil Companies $64,219,514.46 for remediation costs, if the United
States District Court for the Central District of California’s Final Judgment Order was affirmed on
appeal). Because the Stipulation is inadmissible, the Oil Companies have provided no evidence
of damages. Gov’t DBr. at 66.
Second, the Oil Companies failed to establish how any particular “charge” was incurred by
each of the Oil Companies “by reason” of the Avgas Contracts. Gov’t DBr. at 67. For example,
Shell did not dispose of any spent alkylation acid, but did dispose of acid sludge during the relevant
period. Gov’t DBr. at 67.
Third, the Oil Companies’ division of the remediation costs is an assignment of contractual
rights, violating the Anti-Assignment Act.46 Gov’t DBr. at 3–4, 67. Nothing in the Avgas
45
The amount paid and interest due for each Oil Company is also summarized in Pl. Dam.
Exs. 1–5, attached hereto as Court Exhibit C.
46
Section 3727(b) of the Anti-Assignment Act provides,
(b) An assignment [of a claim against the federal government] may be made only
after a claim is allowed, the amount of the claim is decided, and a warrant for payment
of the claim has been issued. The assignment shall specify the warrant, must be made
freely, and must be attested to by 2 witnesses. The person making the assignment shall
acknowledge it before an official who may acknowledge a deed, and the official shall
certify the assignment. The certificate shall state that the official completely explained
42
Contracts authorizes an assignment of rights and the Oil Companies may not assign their respective
recovery rights to each other. Gov’t DBr. at 67.
Fourth, the Oil Companies failed to proffer the “best evidence” of allocating actual
damages incurred by reason of the DSC avgas production and the production of all other products.
Gov’t DBr. at 67.
Finally, the United States Court of Appeals for the Federal Circuit’s recent decision
Northrop-Grumman Computing Sys., Inc. v. United States, 823 F.3d 1364, 1368 (Fed. Cir. 2016),
requires that the Oil Companies establish how much of the costs were allocated to each company
and the Oil Companies failed to meet this burden. Gov’t Notice of Supplemental Authority, ECF
No. 211, at 2; Gov’t Supp. Resp. at 1–2.
c. The Oil Companies’ Reply.
The Oil Companies reply that the October 13, 1999 Stipulation in the CERCLA litigation
(PX 12 at JA 610) is a judicial admission that is both admissible and binding on the parties. Pl.
Reply Br. at 49. In any event, the Stipulation has been incorporated by the Government’s
subsequent admissions in this case that are admissible and binding on the Government. Pl. Reply
Br. at 49 (citing PX 13–15).
As to the Oil Companies allocation, Mr. Bourke, President of C2 REM and issuer of the
invoices to the Oil Companies, testified that the Oil Companies have “have allocated the costs they
have incurred in the following manner: Shell (58.58 percent); Union (18.94 percent); Richfield
(18.94 percent); and Texaco (3.54 percent).” Pl. Reply Br. at 50 (citing PX 18 (Mr. Bourke) at 76).
The Government has presented no evidence that the Oil Companies did not properly divide the
costs among themselves. Pl. Reply Br. at 51. And, the Oil Companies have not violated the Anti-
Assignment Act, because they have not assigned anything. Pl. Reply Br. at 51.
In specific response to the Government’s argument that Oil Companies have not allocated
their damages between those costs incurred by reason of the production of avgas and those incurred
by reason of the production of other products, the Oil Companies repeat that all costs were incurred
“by reason” of the production of avgas, due to the nature of avgas production and the remediation
solution elected by the EPA. Pl. Reply Br. at 52.
Finally, Northrop-Grumman did not hold that plaintiffs must prove how damages suffered
by a group of plaintiffs should be allocated among them. Pl. Supp. Reply at 1. Instead, the United
States Court of Appeals for the Federal Circuit held that, where “[t]he undisputed facts show that
[the plaintiff] has suffered no harm,” the plaintiff cannot recover damages based on harm suffered
by a party not before the court. See Northrop-Grumman, 823 F.3d at 1368. In this case, the Oil
Companies submitted evidence of the costs of environmental remediation incurred and paid by the
reason of the Government’s breach of the Taxes Clause of the Avgas Contracts. Finally, the
the assignment when it was acknowledged. An assignment under this subsection is
valid for any purpose.
31 U.S.C. § 3727.
43
Government cites no precedent suggesting that an award of lump-sum damages to a group of
plaintiffs is prohibited. Pl. Supp. Reply at 1.
d. The Court’s Resolution.
With respect to the Government’s argument that the Oil Companies relied on inadmissible
evidence to establish their pre-1999 damages, the court has ruled today that the October 13, 1999
Stipulation (PX 12 at JA 610), although not a binding admission, is relevant, admissible, and
reliable evidence. Court Exhibit B, Court Rulings Regarding Admissibility of Exhibits And Direct
Testimony at 5.
With respect to the Government’s argument that the Oil Companies failed properly to
allocate damages among themselves, as a matter of law, damages in a breach of contract action
must be established to a “reasonable certainty,” but need not be established with “absolute
exactness or mathematical precision.” See San Carlos Irr. & Drainage Dist. v. United States, 111
F.3d 1557, 1563 (Fed. Cir. 1997) (“[W]here responsibility for damages is clear, it is not essential
that the amount thereof be ascertainable with absolute exactness or mathematical precision[.]”
(citation omitted)). To require individual Oil Companies to track how each barrel of spent
alkylation acid or acid sludge affected the cost of a remediation solution implemented decades ago
would require “absolute exactness or mathematical precision.” The remediation solution elected
by the EPA was to be accomplished by a cover system built over each of the twelve sumps with
slurry walls. PX 524 (3/4/96 GeoSyntec Consultants Report discussing cover system solution for
the McColl Site) at 1–2, 7–2. As such, the cost of remediation was the same regardless of the
percentage of spent alkylation acid, acid sludge, other COCs deposited in each sump, or origins of
the acid waste.
With respect to the Government’s argument about the Anti-Assignment Act, the Oil
Companies did not assign their rights to receive reimbursement for the Government’s breach of
the Avgas Contracts to any third parties. Instead the Oil Companies presented evidence of how
they determined the percentage of damages that each of the Oil Companies were owed based on
the payments of remediation made.
With respect to the Government’s “best evidence” argument, the agreement among the Oil
Companies as to the appropriate amount each company should pay for the required environmental
remediation is relevant, admissible, and reliable evidence of how reimbursement by way of
damages should be made.
Finally, Northrop-Grumman concerned whether a plaintiff could recover damages for
breach of contract, after it privately assigned rights under a contract to third parties, in exchange
for payment in an equivalent amount of plaintiff’s anticipated profits under the contract. See 823
F.3d at 1366–67. Since the plaintiff in that case received payment from an assignee that was
equivalent to expected profits under the contract, the plaintiff could not establish that it was in a
“financially worse position,” because of the Government’s breach. Id. at 1368. In other words,
the plaintiff in that case did not suffer any compensable harm. In this case, however, the Oil
Companies did not assign any of their rights under the Avgas Contracts. And, even if Northrup-
Grumman stood for the principle that a group of plaintiffs must establish damages “particular to
44
each plaintiff,” the Oil Companies have met that burden, through their record of payments, as
reflected in testimony of Mr. Bourke.
V. CONCLUSION.
For these reasons, the court has determined that all of the of the acid waste disposed of at
the McColl Site was “by reason of” the Avgas Contracts, and that the Plaintiffs in this case have
established, with reasonably certainty, damages for the Government’s breach of the Avgas
Contracts in the amount of $99,509,847.32, including interest, for the period of December 12, 1994
to November 13, 2015.
The court also has determined that the $99,509,847.32 is to be reflected in separate
judgments to be entered and payable to each Plaintiff in the following amount as designated:
Shell Oil Company $58,292,868.56
Union Oil Company of California $18,847,165.08
Atlantic Richfield Company $18,847,165.08
Texaco, Inc. $ 3,522,648.60
IT IS SO ORDERED.
s/ Susan G. Braden
SUSAN G. BRADEN
Judge
45
COURT EXHIBIT A
COURT EXHIBIT A: THE RECORD ON REMAND
The record on remand includes the following:
I. Trial Testimony.
The testimony admitted during the three-day evidentiary hearing held at the United States
Court of Federal Claims on February 16, 17, and 19, 2016. See Trial Volume 1 (Mar. 4, 2016),
ECF No. 196; Trial Volume 2 (Mar. 8, 2016), ECF No. 198; Trial Volume 3 (Mar. 8, 2016), ECF
No. 200.
II. Exhibits.
The parties also moved into evidence, without objection, the following exhibits. See
Plaintiffs’ List of Exhibits Moved Into Evidence (Feb. 17, 2016), ECF No. 190; Defendant’s
Exhibit List (Feb. 19, 2016), ECF No. 191; Plaintiffs’ Motion to Supplement the Record (Oct. 18,
2016), ECF No. 214. After the evidentiary hearing, the Court required the parties to submit, by
March 23, 2016, “any objections to the admissibility of any exhibits introduced during trial.” See
Scheduling Order (Mar. 1, 2016), ECF No. 194. Neither party objected to the admissibility of
these exhibits; thus, any objection is waived, and the following exhibits are admitted into evidence:
A. Plaintiffs’ Exhibits.
PX1 Texas Avgas Contract (Jan. 17, 1942)
PX2 Richfield Avgas Contract (Feb. 3, 1942)
PX3 Shell Avgas Contract (Apr. 10, 1942)
PX4 Tidewater Avgas Contract (June 10, 1942)
PX5 Union Avgas Contract (Dec. 31, 1942)
PX6 Union Avgas Contract (May 1, 1943)
PX7 Shell Avgas Contract (May 1, 1943)
PX8 Texas Avgas Contract (Feb. 8, 1943)
PX9 Tidewater Avgas Contract (Feb. 18, 1943)
PX10 Richfield Avgas Contract (Feb. 20, 1943)
Def.’s Resp. to Pls.’ First Set of Requests for Admission, Shell Oil Co. et al. v.
PX16
United States (Dec. 9, 2015) (No. 06-141C)
Portions of the Written Direct Testimony of Gregory G. Kipp, Shell Oil Co. v.
United States (Feb. 5, 2016) (No. 06-141C) to which the Government has not
objected in Defendant’s Objections to Plaintiffs’ Written Testimony, at 5–10
PX17
and 15–16 (Feb. 10, 2016), ECF No. 183 (i.e., all but portions of pages 4, 9, 10,
12, 14, 15, 27–29, 32–34, 40, 41, 48, 49, 51, 56, 58–60, 69, 73–76, 84–87, 92,
93, 95, 101, 102, 104, 115–17, and 122).
Portions of the Written Direct Testimony of Edmond F. Bourke, Shell Oil Co. v.
United States (Feb. 5, 2016) (No. 06-141C) to which the Government has not
PX18 objected in Defendant’s Objections to Plaintiffs’ Written Testimony, at 5–10
and 15–16 (Feb. 10, 2016), ECF No. 183 (i.e., all but portions of pages 5, 10,
23, 48, 49, 72–74, and 76).
Decl. of Edmond F. Bourke, Shell Oil Co. et al. v. United States (June 20,
PX101
2008)
PX102 Decl. of Edmond Bourke, Shell Oil Co. et al. v. United States (July 2010)
PX104–264 C2REM Invoices for McColl Site OM&M Costs (2002–2015)
PX271–83 Annual Payments to McAuley for M&S Costs, C2REM (2002–2015)
PX299 C2REM Costs Incurred from July 1, 2012 to Nov. 30, 2015 (Jan. 8, 2016)
Interests on C2REM Costs Paid Between July 1, 2012 & Nov. 30, 2015 (Jan. 8,
PX300
2016)
New Interest Accrued on C2REM Costs Paid Prior to July 1, 2012 (Jan. 8,
PX301
2016)
PX302 McAuley Costs Incurred from July 1, 2012 to Nov. 30, 2015 (Jan. 8, 2016)
Interest on McAuley Costs Paid Between July 1, 2012 and Nov. 30, 2015 (Jan.
PX303
8, 2016)
New Interest Accrued on McAuley Costs Paid Prior to July 1, 2012 (Jan. 8,
PX304
2016)
McColl Phase II: Physical & Chemical Characterization & Distribution of the
PX510
Waste at the McColl Site, Radian Corp. (Feb. 15, 1983)
PX511 EPA Superfund Record of Decision: McColl (Apr. 11, 1984)
Selective Excavation Treatment & RCRA Equivalent Closure Report, Environ
PX512
(Feb. 12, 1991)
PX513 Technology Evaluation Report, USEPA (Jan. 1992)
PX514 Baseline Public Health Evaluation, IFC Technology (May 1992)
Baseline Public Health Evaluation, IFC Technology Inc. & Clement Int’l
PX515
Protection Agency (May 1992)
2
Demonstration of a Trial Excavation at the McColl Superfund Site, USEPA
PX516
(Oct. 1992)
PX517 Record of Decision: McColl, USEPA (June 30, 1993)
PX517A [Complete] Record of Decision: McColl, USEPA (June 30, 1993)
Phase V Final Report, McColl Superfund Site Treatability Study,
PX518
Environmental Solutions (Feb. 1, 1994)
Final Remedial Investigation Report, Groundwater Operable Unit, Environ
PX519
(Dec. 29, 1995)
PX520 Full-Scale Treatability Study Report Draft, McColl Site Group (May 1995)
Baseline Risk Assessment for the McColl Superfund Site, ICF Technology, Inc.
PX521
(Nov. 1995)
Fate & Transp. of Tetrahydrothiophenes at the McColl Site, McColl Site Group
PX522
(Dec. 18, 1995)
PX523 Feasibility Study Report Groundwater Operable Unit, USEPA (Feb. 7, 1996)
Draft Integrated Conceptual Design Report, GeoSyntec & Parsons Engineering
PX524
Science (Mar. 4, 1996)
PX525 1996 Record of Decision, USEPA (May 9, 1996)
PX526 EPA Superfund Record of Decision: McColl, USEPA (May 15, 1996)
Final Material Compatibility Laboratory Testing Report, GeoSyntec & Parsons
PX527
Engineering Science (Oct. 31, 1996)
PX528 OM&M Plan McColl Superfund Site, Parsons (Oct. 15, 1997)
PX529 Remedial Action Report McColl Superfund Site, Parsons (Apr. 1998)
PX530 Superfund Closeout Report, Parsons (June 30, 1998)
PX531 EPA Superfund Explanation of Significant Differences: McColl (Sept. 1, 2005)
PX534 Letter from Refiner’s Committee on Waste Disposal to Towler (July 5, 1956)
PX537 Aerial Photo (1981)
PX544 Aerial Photo (2012)
Decl. of John McColl, Shell Oil Co. v. Accident & Casualty Ins. Co., et al., No.
PX701
278953 (Super. Ct. Cal. Sept. 25, 1987)
Deposition of Bruce Dunbar, United States v. Shell Oil Co., No. 91-0589-RJK
PX704
(Aug. 18, 1992)
3
Deposition of John McColl, Protective Nat’l Ins. Co. of Omaha v. Union Oil
Co., No. C-514-463 (Sept. 21, 1990), supplemented to include additional pages
PX706
as stated in Defendant’s Objections to Plaintiffs’ Exhibits, at 10 (Mar. 23,
2016), ECF No. 201
Deposition of James V. Willacy, United States v. Shell Oil Co., No. 91-0589-
RJK (Aug. 20, 1992), supplemented to include additional pages as stated in
PX707
Defendant’s Objections to Plaintiffs’ Exhibits, at 10 (Mar. 23, 2016), ECF No.
201
PX802 Methods of Mixing Sludge, George Pfau & C. A. Barrere (June 1931)
Sludge Conversion Process Improves Refinery Acid Recovery, F. J.
PX803
Bartholomew (1933)
PX805 Burning Various Types of Oil Refinery Fuels, A. L. Wilson (1939)
PX808 Patent US2368063 (Jan. 23, 1945)
Chemical Refining of Petroleum, Vladimir Kalichevsky & Bert Allen Stagner
PX809
(1942)
A History of the Petroleum Administration for War, John W. Frey & H.
PX811
Chandler Ide (1946)
PX812 Petroleum Refinery Engineering, W. L. Nelson (1949)
Analysis of Sulfuric Acid & Acid Sludges from Petroleum Processes, F. T.
PX814
Weiss et al. (1953)
PX816 Sulfuric Acid Use and Handling, Fasullo (1965)
PX817 Groundwater, R. Allen Freeze & John A. Cherry (1979)
PX818 Statistical Methods 8th ed., George G. Snedecor & William G. Cochran (1989)
Decomposition of Spent Alkylation Sulfuric Acid to Produce Sulfur Dioxide &
PX820
Water, Stephen Sung et al. (1993)
Analytic Element Modeling of Ground-Water Flow & High Performance
PX822
Computing, USEPA (May 2000)
PX823 Acid Runaways in a Sulfuric Acid Alkylation Unit, Liolios (Nov. 2001)
Corrosion & Fouling in Sulfuric Acid Alkylation Units, Jeff Caton et al. (Sept.
PX830
2008)
PX831 Handbook of Petroleum Processing, David S. Jones & Peter A. Pujadó (2008)
PX833 SULFURIC ACID 93% Material Safety Data Sheet, Rhodia (Jan. 2009)
PX836 Light Alkylate Naphtha (petroleum), USEPA (2015)
4
PX841 Patent US1954488 (Apr. 10, 1934)
PX851 Patent US2399805 (May 7, 1946)
PX852 Patent US2404452 (July 23, 1946)
Expert Report Table 1.1 Production of High Octane Aviation Gasoline
PX901
(Barrels), Gregory G. Kipp (Oct. 19, 2015)
Expert Report Table 1.2 Increase in Avgas Production Over 1942 Levels,
PX902
Gregory G. Kipp (Oct. 19, 2015)
Expert Report Table 2 Spent Alkylation Acid Generated at Shell Dominguez
PX903
(Barrels), Gregory G. Kipp (Oct. 19, 2015)
Revised Table 3.1 Destination of Acid Sludge and Spent Alkylation Acid at
PX904
Shell’s Refineries (Barrels), Gregory G. Kipp (Oct. 19, 2015)
Expert Report Revised Table 3.2 Distribution of Acid Sludge and Spent
PX905 Alkylation Acid at Shell's Refineries during WWII, Edmond F. Kipp (Oct. 19,
2015)
Expert Report Table 4.1 Spent Alkylation Acid Available for Reprocessing,
PX906
Gregory G. Kipp (Oct. 19, 2015)
Expert Report Table 4.2 Net Available Capacity at General Chemical After
PX907 Reprocessing Standard’s Spent Alkylation Acid (Tons of Pure Acid/Day),
Gregory G. Kipp (Oct. 19, 2015)
Expert Report Table 4.3 Acid Reprocessing Capacity of Los Angeles Chemical
PX908
Companies, Gregory G. Kipp (Oct. 19, 2015)
Expert Report Table 4.4 Los Angeles Refineries Spent Alkylation Acid Storage
PX909 Capacities: November 1944–April 1945 (Tons of Pure Acid), Gregory G. Kipp
(Oct. 19, 2015)
Expert Report Table 4.5 Total Spent Alkylation Acid Sent to McColl Site
PX910
(Tons), Gregory G. Kipp (Oct. 19, 2015)
Expert Report Table 4.6 Barrels of Spent Alkylation Acid Sent to McColl Site,
PX911
Gregory G. Kipp (Oct. 19, 2015)
Expert Report Table 5 Acid Sludge Productions Rate at Shell’s Refineries:
PX912
1944 vs. 1946 (Barrels), Gregory G. Kipp (Oct. 19, 2015)
Expert Report Revised Table 6 Sulfuric Acid Usage at the Continuous Acid
PX913
Treater, Gregory G. Kipp (Oct. 19, 2015)
Expert Report Figure 1 Overview of Distillation Process, Gregory G. Kipp
PX914
(Oct. 19, 2015)
PX915 Expert Report Figure 2 Petroleum Flow Chart, Gregory G. Kipp (Oct. 19, 2015)
Expert Report Revised Figure 3 Comparison of Spent Alkylation Acid
PX916
Generated and Avgas Produced, Gregory G. Kipp (Oct. 19, 2015)
Expert Report Figure 4 Fresh Sulfuric Acid Usage at Shell Wilmington and
PX917
Dominguez: Alkylation vs. Other Processes, Gregory G. Kipp (Oct. 19, 2015)
5
Expert Report Figure 5 Spent Alkylation Acid Generated at Shell Dominguez,
PX918
Gregory G. Kipp (Oct. 19, 2015)
Expert Report Figure 6 Destination of Acid Sludge & Spent Alkylation Acid at
PX919
Shell’s Refineries, Gregory G. Kipp (Oct. 19, 2015)
Expert Report Figure 7 Average Sulfuric Acid Usage of Various Refinery
PX920
Processes (Shell 1942-1945), Gregory G. Kipp (Oct. 19, 2015)
Expert Report Figure 8 Comparison of Total Sulfuric Acid Usage: Alkylation
PX921
vs. Acid Treatment (Shell 1942-1945), Gregory G. Kipp (Oct. 19, 2015)
Expert Report Figure 9 Proportion of Crude Suitable for Avgas v. Other
PX922
Products at Shell’s Refineries (1944), Gregory G. Kipp (Oct. 19, 2015)
Expert Report Appendix 1: Number of Carbon Atoms in Organic Molecules,
PX923
Gregory G. Kipp (Oct. 19, 2015)
Rebuttal Report Figure 1 Increase in Avgas Production & Crude Throughput
PX924
Over 1941 Levels at Shell’s Refineries, Gregory G. Kipp (Dec. 21, 2015)
Rebuttal Report Figure 2 Avgas Production Increase Statistically Correlates
PX925 with Crude Throughput with 95% Confidence in Shell’s Refineries. Gregory G.
Kipp (Dec. 21, 2015)
Rebuttal Report Figure 3Sludge Production at Shell’s Refineries (1941-1946),
PX926
Gregory G. Kipp (Dec. 21, 2015)
Rebuttal Report Figure 4 Sulfuric Acid Usage at Continuous Acid Treater,
PX927
Gregory G. Kipp (Dec. 21, 2015)
Rebuttal Report Figure 5 Spent Alkylation Acid Procedure & Sent for
PX928 Reprocessing: Shell’s Refineries (1942-1945), Gregory G. Kipp (Dec. 21,
2015)
Rebuttal Report Figure 6 Use of Synthetic Hydrocarbons, Gregory G. Kipp
PX929
(Dec. 21, 2015
Rebuttal Report Figure 7Acid Sludge Sent to Shell from Shell’s Refineries,
PX930
Gregory G. Kipp (Dec. 12, 2015)
Rebuttal Report Figure 8 Contribution of Sulfate to the McColl Site, Gregory
PX931
G. Kipp (Dec. 21, 2015)
Rebuttal Table 1 Crude Throughput at Shell’s Refineries, Gregory G. Kipp
PX932
(Dec. 21, 2015)
Rebuttal Table 2 Confidence in Correlation Between Avgas Production and
PX933
Crude Throughput Shell 1941-1946, Gregory G. Kipp (Dec. 21, 2015)
Rebuttal Table 3 Catalytic Cracker & Hydrogenation Capacity Offset Acid
PX934 Treatment of Pressure Distillate & Reduce Sludge Production at Shell’s
Refineries (bbls), Gregory G. Kipp (Dec. 21, 2015)
Rebuttal Table 4 Sulfuric Acid Usage at the Continuous Acid Treaters at
PX935
Shell’s Refineries, Gregory G. Kipp (Dec. 21, 2015)
Rebuttal Table 5.1 Quantities of Sulfuric Acid, Sodium Hydroxide, and Sodium
PX936 Carbonate Used in the Continuous Acid Treater, Gregory G. Kipp (Dec. 21,
2015)
Rebuttal Table 5.2 Percent of Sulfuric Acid Neutralized at the Continuous Acid
PX937
Treater, Gregory G. Kipp (Dec. 21, 2015)
6
Rebuttal Table 6 Shell Alkylate Produced and Shipped Off-Site for Use by
PX938
Other Refineries, Gregory G. Kipp (Dec. 21, 2015)
Rebuttal Table 7 Comparison of Wartime & Post-War Avgas Operations
PX939
(bbls/day), Gregory G. Kipp (Dec. 21, 2015)
Rebuttal Report Table 8.1 Percent Sulfate in Sulfuric Acid, Gregory G. Kipp
PX940
(Dec. 21, 2015)
Rebuttal Report Table 8.2 Percent of Spent Alkylation Acid and Acid Sludge
PX941
Composed of Sulfate from Sulfuric Acid, Gregory G. Kipp (Dec. 21, 2015)
Rebuttal Report Table 8.3 Percent of Spent Alkylation Acid and Acid Sludge
PX942
Composed from Organic Material, Gregory G. Kipp (Dec. 21, 2015)
Rebuttal Report Table 8.4 Contribution of Sulfate Sulfuric Acid v. Organic
PX943
Material, Gregory G. Kipp (Dec. 21, 2015)
Rebuttal Report Table 9.1 Calculation of Non-Benzol Acid Waste, Gregory G.
PX944
Kipp (Dec. 21, 2015)
Rebuttal Report Table 9.2 Acid Strength Calculations, Gregory G. Kipp (Dec.
PX945
21, 2015)
Rebuttal Report Table 9.3 Calculations of Acid Mass, Gregory G. Kipp (Dec.
PX946
21, 2015)
Rebuttal Report Table 10.1 Avgas Produced at Shell's Refineries in 1942,
PX947
Gregory G. Kipp (Dec. 21, 2015)
Rebuttal Report Table 10.2 Calculations of Acid Waste at McColl Site, Gregory
PX948
G. Kipp (Dec. 21, 2015)
Rebuttal Report Table 10.3 Percentage of Oil Companies' Acid Sludge Dumped
PX949
at McColl in 1942, Gregory G. Kipp (Dec. 21, 2015)
Revised Rebuttal Report Table 10.4 Percentage of Oil Companies' Acid Sludge
PX950 Generated by Non-DSC Contract Avgas Production in 1943, Gregory G. Kipp
(Dec. 21, 2015)
Rebuttal Report Table 11 Calculation of Alleged Non-DSC Acid Mass,
PX951
Gregory G. Kipp (Dec. 21, 2015)
PX952 Waste to Disposal at Shell's Refineries, Gregory G. Kipp (1942-1946)
Percentage of Shell’s Acid Waste Sent to McColl, Gregory G. Kipp (Dec. 8,
PX953
2016)
Acid Sludge Production Rate at Shell's Refineries 1944 vs. 1946 (Barrels),
PX954
Gregory G. Kipp
Acid Sludge Production Rate at Shell's Refineries 1944 vs. 1946 (Bar Graph),
PX955
Gregory G. Kipp,
PX956 Gregory G. Kipp CV (Oct. 19, 2015)
Percentage of Shell’s Acid Waste Sent to McColl (1942–1945) (Pie Chart)
PX957
(Feb. 16, 2016)
The Generation of McColl Non-Benzol Acid Waste in Avgas Production (Feb.
PX958
16, 2016)
7
PX959 Schematic of the Typical Production of Avgas at the Refineries (Feb. 16, 2016)
Expert Report Table 1: Spent Alkylation Acid Thickness in Sumps, Edmond F.
PX1001
Bourke (Oct. 19, 2015)
Expert Report Figure 1.0: Illustrations of Sumps Configuration, Edmond F.
PX1002
Bourke (Oct. 19, 2015)
Expert Report Figure 2 Conceptual Site Model, Edmond F. Bourke (Oct. 19,
PX1003
2015)
Expert Report Figure 5.0: Sulfuric Acid Specific Gravity vs. Concentration,
PX1006
Edmond F. Bourke (Oct. 19, 2015)
Expert Report Figure 6 Sulfuric Acid & Neutralization Graph, Edmond F.
PX1007
Bourke (Oct. 19, 2015)
Expert Report Appendix Photo 1 Aerial Imagery 1938, Edmond F. Bourke
PX1008
(Oct. 19, 2015)
PX1009 Expert Report App. Photo 2 Aerial Imagery, Edmond F. Bourke (1947)
Expert Report Appendix Photo 3 Aerial Imagery 1963, Edmond F. Bourke
PX1010
(Oct. 19, 2015)
Expert Report Appendix Photo 4 Aerial Photography Current Conditions,
PX1011
Edmond F. Bourke (Dec. 19, 2015)
Rebuttal Report Table 1.0: Comparison of Physical & Chemical Characteristics
PX1012
of Spent Alkylation Acid & Acid Sludge, Edmond F. Bourke (Dec. 21, 2015)
Rebuttal Report Table 2.0: Capture Zone Analysis Input Parameters, Edmond
PX1013
F. Bourke (Dec. 21, 2015)
Rebuttal Report Table 3.0: Capital Cost Estimate for Remedial Alternative 4,
PX1014
Edmond F. Bourke (Dec. 21, 2015)
Rebuttal Report Table 4.0: Annual O & Groundwater Monitoring Cost Estimate
PX1015
for Remedial Alternate 4, Edmond F. Bourke (Dec. 21, 2015)
Rebuttal Report Table 5.0: Present Worth Cost Estimate Summary, Edmond F.
PX1016
Bourke (Dec. 21, 2015)
Rebuttal Report Figure 1 Water Flow Unit Cross-Section, Edmond F. Bourke
PX1018
(Dec. 12, 2015)
Rebuttal Report Figure 2 Groundwater Monitoring Contour Map - December
PX1019
2014 D Flow Unit, Edmond F. Bourke (Dec. 21, 2015)
Rebuttal Report Figure 3.0: Model Run Iterations Illustrating Extent of Capture,
PX1020
Edmond F. Bourke (Dec. 21, 2015)
Rebuttal Report Figure 4 Capture Zone Analysis for the Model #4-10 Wells at
PX1021
50 GPM Each; Total of 500 GPM, Edmond Bourke (Dec. 21, 2015)
Rebuttal Report Figure 5 Proposed Hydraulic Containment Action D Flow
PX1022
Unit, Edmond F. Bourke (Dec. 21, 2015)
Rebuttal Report Figure 6 Process Flow Schematic Groundwater Treatment
PX1023
System, Edmond F. Bourke (Dec. 21, 2015)
Rebuttal Report Figure 7.0: 30-Year Groundwater Remedy Estimated
PX1024
Underdiscounted Cash Flow Profile, Edmond F. Bourke (Dec. 21, 2015)
8
PX1025 Edmond F. Bourke CV (Oct. 19, 2015)
Letter from Cumming to Morgan re Acid Situation on West Coast and
PX1101
Approved Reprocessing Plants
PX1102 Table of West Coast Reprocessing Plants to be Completed in 1944
PX1103 Shell Wilmington & Dominguez Refineries Operating Reports (1939-1943)
PX1104 Yearly Operating Reports Wilmington Refinery, Shell Oil Co. (1944–1947)
PX1105 Memo from Shell Oil Co. to Shell Development Co. (Apr. 3, 1939)
PX1106 Memo from Ludwig Rosenstein to C. B. deBruyn (May 8, 1939)
PX1107 Memo from Ludwig Rosenstein to J. F. M. Taylor (Aug. 11, 1939)
Manual of Operations and Job Information for Alkylation Plant, UNOCAL
PX1108
(1940)
PX1109 Fine Owner of Sump in Oil Overflow, Gardena Valley News (Mar. 20, 1941)
PX1110 Minutes of Conference of Petroleum Indus. (Oct. 20, 1941)
PX1111 Shell Memo re Spent Acid Neutralization (Dec. 15, 1941)
PX1112 Refinery Sulfuric Acid Survey, Office of Petroleum Coordinator (Dec. 1941)
PX1113 Refinery Sulfuric Acid Survey Table, Refining Comm. Dist. 5 (Dec. 1941)
Refinery Sulfuric Acid Survey Responses & Survey Results, Dist. 5 (Dec.
PX1114
1941)
Richfield Oil Corporation--100-Octane Aviation Gasoline Cost Analysis and
PX1115
Breakdown (Jan. 1942)
Texas Co.--100-Octane Aviation Gasoline Cost Analysis and Breakdown (Jan.
PX1116
1942)
PX1119 LA Health Department Report on Complaint, Young (Mar. 17, 1942)
PX1120 Memo from Bruce Brown to Reese H. Taylor (Mar. 31, 1942)
Tidewater Oil--100-Octane Aviation Gasoline Cost Analysis and Breakdown
PX1121
(Apr. 1942)
100-Octane Aviation Gasoline Privately Owned Plants Cost Analysis and
PX1122
Breakdown, Bruce K. Brown et al. (Apr. 22, 1942)
PX1123 Acid Regeneration, Shell Development Co. (Apr. 28, 1942)
9
Letter from Harold A. Young, Director, Bureau of Sanitation, to William J.
PX1124
Fox, Chief Engineer, the Regional Planning Committee (May 5, 1942)
Minutes Regular Meeting of Board of Directors of Stauffer Chemical
PX1125
Company, Stauffer BOD (May 6, 1942)
Transcript of Hearing Regarding M-3 Permit Case No. 210—Rubbish Dump
PX1126
San Jose District (May 6, 1942)
PX1127 Letter from Regional Planning Commission to Eli McColl (June 18, 1942)
Application for Certificate of Necessity (Shell Oil Co.), J. W. Watson (June 18,
PX1128
1942)
Letter from A. C. Mohr, Stauffer Chemical Co., to C. W. Blazer, Office of
PX1129
Petroleum Co-Ordinator (June 20, 1942)
Letter from Shell Oil Co. Legal Dep’t to Shell Oil Co. Head Office
PX1130
Manufacturing (July 7, 1942)
Sulfuric Acid Survey—Estimated Requirements of Petroleum Refiners 1942,
PX1131
Office of Petroleum Coordinator for War (Aug. 8, 1942)
Letter from Shell Oil Co. to George Parkhurst, Office of Petroleum Coordinator
PX1132
for War (Sept. 26, 1942)
PX1133 Meeting Minutes, AGAC (Nov. 24, 1942)
PX1134 Memo from Cragin to Apjohn re Spent Acid Disposal (Dec. 1, 1942)
PX1135 Memo from Cragin to DW Wilson re Spent Acid Disposal (Dec. 7, 1942)
PX1136 Letter to Levy re Stauffer Necessity Application, Parkhurst (Jan. 15, 1943)
PX1137 Texas Co.--Reasonableness of Price Quoted (Feb. 5, 1943)
Production of War Products at Humble Oil & Refining Co.’s Baytown
PX1138
Refinery, Humble Oil Co. (Feb. 5, 1943)
Memo from Cragin to Cumming re Actual Production 100 O.M. Aviation
PX1139
Gasoline 1942 (Mar. 3, 1943)
PX1140 Letter from George Parkhurst to M. Halpern (Mar. 23, 1943)
PX1141 Reasonableness of Price Quoted--Tidewater Oil (Apr. 21, 1943)
Richfield Oil Corporation--100-Octane Aviation Gasoline Cost Analysis and
PX1142
Breakdown (May 1943)
Union Oil Company of California--100-Octane Aviation Gasoline Cost
PX1143
Analysis and Breakdown (May 1945)
PX1144 Letter from M. Halpern to George Parkhurts (May 19, 1943)
Letter to Refining Cmte. re Maximizing Avgas Production, Ickes (June 28,
PX1146
1943)
10
PX1148 Memo from George Parkhurst to George Stoner (Aug. 20, 1943)
PX1150 Letter from Robert Cragin to A. L. Elder (Sept. 4, 1943)
Meeting Minutes, Aviation Gasoline Subcomm. of Dist. 5 Refining Comm.
PX1151
(Oct. 19, 1943)
Letter from R. G. Follis, Aviation Gasoline Subcomm. Dist. 5, to V. Stapleton,
PX1152
The Texas Co. (Oct. 22, 1943)
PX1153 Letter from Robert Cragin to Walter Whitman (1943)
PX1154 Letter from Robert Cragin to Walter Whitman (Nov. 3, 1943)
Memo to GN McCluskey re New West Coast Reprocessing Facilities, Morgan
PX1155
(Nov. 20, 1943)
PX1156 Reasonableness of Price Quoted--Shell Oil Co. Wood River (Nov. 29, 1943)
PX1157 General Summary—Sulfuric Acid Reports, R. C. Smith (Dec. 11, 1943)
Letter from D. P. Morgan, Director, to G. N. McCluskey, Acting Director (Jan.
PX1158
6, 1944)
PX1160 Letter from R. G. Follis to Robert B. Cragin (Apr. 24, 1944)
PX1164 Letter from Holaday to Bayer (June 8, 1944)
Minutes of Regular Meeting of Bd. of Dirs., Stauffer Chemical Co. (July 11,
PX1165
1944)
PX1166 Letter from Bayer to Holaday (June 25, 1944)
PX1167 The Richfield Refinery, Richfield Oil Corp. (Aug. 1944)
PX1168 Meeting Minutes, Aviation Gasoline Subcomm. Dist. 5 (Aug. 16, 1944)
Minutes Regular Meeting of Board of Directors of Stauffer Chemical
PX1169
Company, Stauffer BOD (Aug. 22, 1944)
PX1170 Letter from Culbertson to Bayer (Aug. 23, 1944)
PX1171 Letter from Bayer to Culbertson (Sept. 9, 1944)
PX1172 Minutes of Meeting, Aviation Gasoline Subcomm. (Nov. 14, 1944)
Minutes of the Twenty-Fourth Meeting, Aviation Gasoline Advisory Comm.
PX1173
(Dec. 11, 1944)
PX1174 Meeting Minutes, AGAC (Dec. 27, 1944)
11
PX1175 Spent Alkylation Acid Situation Forecast First Quarter (1945)
Recap of Aviation Gasoline Subcomm. (Dist. 5) Questionnaires Spent
PX1176
Alkylation Acid Situation (Dec. 1944)
PX1177 Letter from T. W. Rosebaugh from Asiatic Petroleum Co. (Jan. 24, 1954)
PX1178 Spent Alkylation Acid Situation Forecast February, March & April (1945)
Recap of Aviation Gasoline Subcomm. (Dist. 5) Questionnaires Spent
PX1179
Alkylation Acid Situation (Feb. 1945)
Telegram to Davidson re Spent Alkylation Acid Situation, Boardman (Feb. 15,
PX1180
1945)
PX1181 Telegram from Davidson to DW Boardman (Feb. 16, 1945)
PX1182 Minutes of Meeting, Aviation Gasoline Subcomm. (Feb. 21, 1945)
PX1183 Memo from J. W. Wizeman to W. H. Whitman (Feb. 24, 1945)
Minutes of Regular Meeting of Bd. of Dirs., Stauffer Chemical Co. (Feb. 27,
PX1184
1945)
PX1186 Letter from J. W. Wiseman to P. J. Byrne (Mar. 14, 1945)
PX1188 Minutes of Meeting, Aviation Gasoline Subcomm. Dist. 5 (Apr. 11, 1945)
PX1189 Aviation Gasoline Report to the War Production Board (Sept. 17, 1945)
PX1190 Union Wilmington Monthly Operating Report (Aug. 1945)
PX1191 Letter from Eli McColl to Shell Oil Co. (May 2, 1946)
PX1192 Letter from Eli McColl to Mayor & City Council of Fullerton (May 15, 1946)
PX1193 Meeting Minutes, Fullerton City Council (May 21, 1946)
Examination of Waste Acids from Houston Texas as to Suitability for
PX1196
Ammonium Sulfate Manufacture, F. W. Heath (Mar. 1948)
PX1199 Refiner’s Waste Water Committee Meeting Minutes (June 29, 1956)
PX1200 Refiner’s Waster Water Committee Meeting Minutes (July 11, 1957)
PX1201 Memo from H. M. Ellis to J. E. Sherborne (Aug. 16, 1957)
PX1206 Summary of Application for Necessity Certificate, Parkhurst (Oct. 1943)
12
PX1207 Sulfuric Acid Position--Pacific Coast (Oct. 22, 1943)
Incorporated Wilmington and Dominguez Refineries Operating Report for Year
PX1211
(1940), Shell Oil Co. (1940)
Incorporated Wilmington and Dominguez Refineries Operating Report for Year
PX1218
1941 (Part 1 of 2), Shell Oil Co. (1941)
Incorporated Wilmington and Dominguez Refineries Operating Report for Year
PX1219
1941 (Part 2 of 2), Shell Oil Co (1941)
Incorporated Wilmington and Dominguez Refineries Operating Report for Year
PX1223
1942 (Part 1 of 2), Shell Oil Co. (1942)
Incorporated Wilmington and Dominguez Refineries Operating Report for Year
PX1224
1942 (Part 2 of 2), Shell Oil. Co (1942)
PX1228 Memo to D. E. Carr (Oct. 5, 1942)
Incorporated Wilmington and Dominguez Refineries Operating Report for Year
PX1232
1943 (Part 2 of 2), Shell Oil Co. (1943)
Incorporated Wilmington & Dominguez Refineries Operating Report: Part 2,
PX1233
Shell Oil Co. (1943)
Acid Recovery Facilities for the Texas Company 100 Octane Plant at
PX1236
Wilmington, California, Griswold (Mar. 17, 1943)
Wilmington and Dominguez Operating Report (Part 1 of 2), Shell Oil Co.
PX1250
(1944)
Wilmington and Dominguez Operating Report (Part 2 of 2), Shell Oil Co.
PX1251
(1944)
Fluid Catalytic Cracking Operations for the Month of September 1944 (Sept.
PX1258
1994)
PX1264 Telegram, Halper (Dec. 30, 1944)
Yearly Operating Reports Wilmington and Dominguez, Shell Oil Co. (1944-
PX1265
1947)
PX1266 Telegram from Halpern (Jan. 6, 1945)
PX1270 Sulfuric Acid for the Los Angeles Area, Reuter (May 7, 1945)
PX1273 Minutes of Meeting, Avgas Subcomm. (May 23, 1945)
PX1275 Minutes of Meeting, Dist. 5 Avgas Subcomm. (July 18, 1945)
Incorporated Wilmington and Dominguez Refineries Operating Report for Year
PX1279
1946, Shell Oil Co. (1946)
PX1282 Memorandum to File, Bretizus (Nov. 25, 1953)
Incorporated Wilmington and Dominguez Refineries Operating Report Year
PX1284
1945, Shell Oil Co. (Apr. 28, 2005)
13
PX1298 Letter from Jesse H. Jones to E.R. Stettinius, Jr. (Sept. 27, 1940)
Memo from Bruce K. Brown to Ralph K. Davies re 100 Octane Aviation
PX1307
Gasoline New Plants Program (Dec. 12, 1941)
PX1308 Letter from Jesse H. Jones to H.A. Mulligan (Jan. 6, 1942)
B. Defendant’s Exhibits.
DX1 Declaration of C. Satterfield with attachments (CERCLA) (01/05/1995)
DX2 Declaration of R. Anderson with attachments (CERCLA) (02/16/1995)
DX3 Shatterfield Report II - CERCLA (03/14/1997)
DX4 Declaration of R. Anderson with attachments (CERCLA) (03/31/1997)
Findings of fact and conclusions of law in Western Properties Serv. Corp. v. Shell
DX5
Oil (C.D. Cali. Mar. 31, 1999) (03/01/1999)
DX6 Complaint, Ct. No. 06-141C (Fed. Cl.) (02/24/2006)
Plaintiff's Opposition to Motion to Dismiss and Cross Motion for Partial Summary
DX7 Judgment in Shell Oil Co. v. United States (Ct. Fed. Cl. June 30, 2006)
(06/30/2006)
Plaintiff's Reply ISO Cross Motion for Partial Summary Judgment in Shell Oil Co.
DX8
v. United States (Ct. Fed. Cl. Sept. 1, 2006) (09/01/2006)
Reply Brief of Appellants, Shell Oil Co., et al. in Western Properties Servs. Corp.
DX9
v. Shell Oil Co. , 2002 WL 32302276 (9th Cir. 2002). (11/09/2010)
Pl.’s Resp. to Def.’s 1st Set Of Requests For Admission and Interrogatories, dated
DX10
March 16, 2015 (03/16/2015)
DX11 Pl.’s Resp. to Def.’s 2d Set of Interrogs., dated Apr. 27, 2015 (04/27/2015)
Exxon Mobil Corp. v. United States, C.A. Nos. H-10-2386, H-11- 1814, 2015 WL
DX12
3513949 (S.D. Tex. June 4, 2015) (06/04/2015)
DX13 Pl.’s Resp. to Def.’s 4th Set of Discovery., dated Oct. 1, 2015 (10/01/2015)
DX14 Plaintiffs' Supp Respose to 2d Set of Interrogatories (10/29/2015)
Plaintiffs' responses to Defendant's Fifth set of Discovery Requests in Shell Oil
DX15
Co. v. United States (Ct. Fed. Cl.) (11/24/2015)
Contract between Defense Supplies Corporation and The Texas Company, Jan.
DX16
17, 1942 (01/17/1942)
Contract between Defense Supplies Corporation and Shell Oil Company, Inc.,
DX17
Apr. 10, 1942 (04/10/1942)
14
Contract between Defense Supplies Corporation and Tidewater Assoc. Oil Co.,
DX18
June 10, 1942 (06/10/1942)
DX19 Shell-McColl Contracts - 1942-1944 (06/23/1942)
DX20 Agreement between the Army, Navy, DSC, and PAW (12/19/1942)
Contract between Defense Supplies Corporation and Union Oil Company, Dec.
DX21
31. 1942 (12/31/1942)
Contract between Defense Supplies Corporation and Richfield Oil Corporation,
DX22
Feb. 3, 1942 (02/03/1943)
Contract between Defense Supplies Corporation and The Texas Company, Feb. 8,
DX23
1943 (02/08/1943)
Contract between Defense Supplies – Richfield (Watson Refinery – Second
DX24
Contract), 2/20/1943, “Revised 2/16/1943 (02/16/1943)
DX25 Contract between Defense Supplies Corporation and Tidewater (02/18/1943)
Contract between Defense Supplies Corporation and Richfield Oil Corporation,
DX26
Feb. 20, 1943, revised 3/23/43 (03/23/1943)
DX27 Gray Trucking - Shell Contract -1933 (02/27/1943)
Contract between Defense Supplies Corporation and Union Oil Company, revised
DX28
July 29, 1943 (07/29/1943)
Contract between Defense Supplies Corporation and Shell Oil Company, Inc.,
DX29
revised January 1, 1944 (01/01/1944)
“Shell Oil Company, Wilmington and Dominguez Refineries, Operating Report,
DX30
Year 1939 (12/31/1939)
Shell Oil Company,Wilmington and Dominguez Refineries, Operating Report,
DX31
Year 1940 (excerpt) (01/01/1941)
Shell Oil Company, Wilmington and Dominguez Refineries, Operating Report,
DX32
Year 1941 (01/01/1942)
DX33 Richfield Operations Report (09/14/1942)
Shell Oil Co., Wilmington and Dominguez Refineries, Operating Report, 1942
DX34
(1905)
Shell Oil Company, Wilmington and Dominguez Refineries, Operating Report,
DX35
Year 1943 (1905)
DX36 Wilmington and Dominguez Refineries Operating Report, 1944 (1905)
Shell Oil Company, Wilmington and Dominguez Refineries Operating Report,
DX37
1945 (1905)
Shell Oil Company, Wilmington and Dominguez Refineries Operating Report,
DX38
1946 (04/04/1947)
DX39 Richfield Annual Report 1939
15
DX40 Richfield Annual Report 1940
DX41 Shell Union Oil Corp., Annual Report For the Year Ended, December 31, 1941
DX42 Richfield Annual Report 1941
DX43 Richfield Annual Report 1942
DX44 Richfield Annual Report 1943
Richfield Annual Report - 1944 Shell Oil Company, Incorporated, Wilmington
DX45
and
DX46 The Texas Co. Annual Report 1943
DX47 Richfield Annual Report 1945
DX48 Richfield Annual Report 1946
DX49 The Texas Company, 1946 Annual Report
DX50 The Texas Company and Subsidiary Companies, Annual Report, 1950
DX51 Richfield Oil Company, Annual Report for 1950
The Oil and Gas Journal , Refineries Operating In the United States - 1938
DX52
(05/31/1938)
DX53 Refineries Operating In the United States - 1943 (03/25/1943)
The Oil and Gas Journal , Refineries Operating In the United States - 1945
DX54
(03/31/1945)
DX55 Refinery Sulphuric Acid Survey, Douglas Oil & Refinery Co. (01/14/1942)
Refinery Sulphuric Acid Survey, The Texas Company - Los Angeles Works
DX56
(12/09/1941)
DX57 Refinery Sulphuric Acid Survey, Wilmington Refinery (Shell) (12/15/1941)
DX58 Refinery Sulphuric Acid Survey, Martinez Refinery (Shell) (12/15/1941)
DX59 Refining Committee District 5 Sulfuric Acid Survey (01/07/1942)
Refinery Sulfuric Acid Survey, Petroleum Coordinator for War, Refining
DX60
Committee—District 5 (01/09/1942)
DX61 Refining Committee - District 5, Refinery Sulfuric Acid Survey (01/09/1942)
16
“Sulfuric Acid Survey, Estimated Requirements of Petroleum Refiners 1942,”
DX62 compiled by Office of Petroleum Coordinator for War, Refining Division,
Construction Section (08/08/1942)
DX63 E.L. Hildebrand, The Oil and Gas Journal , “Handling Sulfuric Acid Sludges”
Memorandum for A.W. Raine Re: Amounts and Concentration of Separated
DX64
Sludge Acid Available for Recovery (06/29/1923)
J.B. Rather, National Petroleum News , “Acid Sludge Disposal Remains Unsolved
DX65
Problem to Refining Plants” (02/22/1928)
DX66 Refiner and Natural Gasoline Manufacturer, “Burning Acid Sludge” (08/01/1931)
DX67 H. Wade, Oil Bulletin, “ Air Pollution at Long Beach” (09/01/1930)
A. Anderson, Refiner and Natural Gasoline Manufacturer, “Recent Acid Sludge
DX68
Burner Research” (03/01/1932)
DX69 Shell Oil Co., Gray Trucking Co. Contract Docs (1933-1935)
DX70 Nuisance Letter - 1932 (05/11/1932)
DX71 Minutes of refiners' committee on waste disposal (07/12/1932)
B. Stagner, Refiner and Natural Gasoline Manufacturer , “Sulfur Dioxide and
DX72
Fresh Sulfuric Acide From Refinery Acid Sludge” (02/01/1936)
DX73 Gray Trucking Nuisance Petitions - 1936 (08/31/1936)
DX74 Westminster Gazette, “Health Officer Says Fumes Are Deadly” (09/24/1936)
DX75 Minutes of committee on refinery odors (10/02/1934)
DX76 Gray Trucking Nuisance Letter - 1936 (11/04/1936)
June 1938 Advertisement in Petroleum World, cited in Bookspan Report at 12.
DX77
(06/01/1938)
DX78 Acid Sludge Memorandum from L. Rosenstein to C. deBruyn (05/08/1939)
J. Hill, Industrial and Engineering Chemistry, “Waste Problems in the Petroleum
DX79
Industry” (11/01/1939)
DX80 Gray Trucking Nuisance Report - 1940 (06/20/1940)
Shell Letter from Supt. Of Watson Refinery to Coyle and Sullivan re: Sludge
DX81
(11/13/1941)
DX82 Newspaper articles re Thomas Ranch (1942)
17
M-3 Permit Case No. 210 - Rubbish Dump, San Jose District - Testimony and
DX83
supporting documents (05/06/1942)
DX84 News report and fish and game reports re: illegal dumping/overflows (1941-1943)
DX85 L. Burroughs, Petroleum Refiner , “Disposal of Refinery Wastes” (07/01/1946)
DX86 Shell dumping request - 1948 (12/02/1948)
DX87 Memo from J. Partia to R. King re: petroleum industries’ waste (03/02/1949)
DX88 intentionally omitted
DX89 Letter from E. McColl to N. Hiltscher (05/09/1951)
DX90 McColl 1951 Dumping Letter (09/25/1951)
DX91 Memo to file by D. Bretisus re: Shell Dominguez plant (11/25/1953)
DX92 Minutes of area refineries meeting re: Nuisance Acid Sludge (07/11/1957)
Internal Union Oil memo from J. Sherborne to H. Ellis re: refinery acid sludge
DX93
disposal in Fullerton sumps (08/16/1957)
Letter from P. Merkus, Shell Oil refinery manager, to various oil companies re:
DX94
rehab of acid sludge disposal ponds by E. McColl (08/22/1957)
Letter to T. Edwards re: oil companies' plan to loan money to E. McColl (with
DX95
attached correspodence and meeting minutes) (08/23/1957)
Declaration of John McColl, July 29, 1987, Shell Oil Co. vs. Accident and
DX96
Casualty Insurance Company, et al . (07/29/1987)
Declaration of John McColl with exhibits, July 29, 1987, Shell Oil Co. vs.
DX97
Accident and Casualty Insurance Company, et al. (07/29/1987)
Image of 1,200 and 2,400 Barrel Agistators, ca. 1916, source: Bacon, R.F.; and
DX98
Hamor, W.A., The American Petroleum Institute, Volume II (1916)
DX99 C. Ellis, “Process for Making Motor Fuel,” U.S. Patent 1,318,061 (10/17/1919)
DX100 intentionally omitted
C. Kettering, National Petroleum News, “Automotive Developments Held Back
DX101
by Lack of True Anti-Knock Fuels” (04/30/1930)
A. Claydon, National Petroleum News, “Automobile Engineers to Rate Knocking
DX102
by Octane Number” (06/04/1930)
G. Vaughn, The Oil and Gas Journal, “Fuel Problems in Aviation Engines”
DX103
(09/25/1930)
W. Ziegenhain, The Oil and Gas Journal “Many 1932 Model Cars Will Need
DX104
Gasoline of Higher Octane Number” (12/24/1931)
18
C. Wilson, The Oil and Gas Journal, “Car Manufacturers Want Higher Octanes”
DX105
(04/28/1932)
The Oil and Gas Journal, “New Airplanes Demand 100 Octane Number Motor
DX106
Fuel for Starting,” (07/04/1935)
DX107 Letter from J. Doolittle to Bureau of Aeronautics (10/23/1935)
National Petroleum News, “Air Corps Buys 900,000 Gallons of Super-Fuel in
DX108
1935” (01/08/1936)
National Petroleum News, “Royal Dutch Shell Operations In U.S. Profitable in
DX109
1935 (04/15/1936)
H. Ralph, The Oil and Gas Journal, “Three Industries Cooperate to Advance
DX110
Aviation” (05/20/1937)
American Petroleum Institute Quarterly, “3,000 Oil Men Discuss Industry at
DX111
Institute’s Eighteenth Annual Meeting” (partial) (01/01/1938)
DX112 Dubbscracking advertisement, Petroleum World (06/01/1938)
W. Platt, National Petroleum News, “Oil Industry Prepared to Meet Wartime
DX113
Demands for Products, No Runaway Market is Expected” (09/06/1939)
DX114 intentionally omitted
J. Collins, Petroleum World, “Now—Desulphurizaton Without Sludge”
DX115
(01/01/1940)
National Petroleum News , “Defense Plan Begins to Shape Up,” “Ickes Studies
DX116 War-Oil Plan,” “See Aviation ‘Gas’ Civil Demand Rise,” and “Fueling of
Warplane Fleet Studied By Defense Group” (06/12/1940)
DX117 Memorandum re District 5 Products Sold to Federal Government 1942-45
Letter from Shell to Petroleum Coordinator for National Defense re: avgas
DX118
production, capacity, properties, and compositions (07/25/1941)
Letter from Texas Company to Subcommittee on Aviation Gasoline re: avgas
DX119
Questionnaires (10/03/1941)
D.W. Wilson, Memorandum for the Files re: 100 octane aviation gasoline
DX120
(10/06/1941)
Letter from W. Gary, Director of Refining, to A. Fraser, Shell Oil, re: potential
DX121
increase in avgas production (11/04/1941)
D.W. Wilson, Memorandum of Conference re: Union Oil production of toluene
DX122
and 100 octane avgas (11/17/1941)
Excerpt from transcript of Conference of Petroleum Industry Committee
DX123
Chairmen re: alkylation royalty rates (10/20/1941)
Letter from W.H. Geis, Union Oil, to W. Gary, OPC, re: expected 100 octange
DX124
avgas production (12/16/1941)
Letter from H. Sinclair, Richfield Oil, to DSC re: erection of additional refinery
DX125
facilities in Watson, California (01/05/1942)
19
Letter from M. Halpern, Texas Company, to W. Gary, OPC, re: estimated costs of
DX126
100 octane avgas (01/06/1942)
Letter from E. Isom, Richfield Oil, to W. Gary, OPC, re: 100 octane avgas prices
DX127
(01/08/1942)
Letter from Chairman, Richfield Oil, to R. Davies, Deputy Petroleum Coordinator
DX128 for National Defense, re: proposal to erect additional facilities to manufacture
avgas (01/13/1942)
Letter from M. Halpern, Texas Company, to W. Gary, OPC, re: estimated costs of
DX129
100 octane avgas production (01/13/1942)
Memo to file by B. Brown, G. Parkhurst, and W. Gary re: Sinclair and Richfield
DX130
avgas contract negotiations (01/26/1942)
Internal OPC memo from D. Wilson to W. Gary re: Richfield Price Negotiations
DX131
(02/03/1942)
Internal OPC memo from D. Wilson to W. Gary re: proposed Union Oil avgas
DX132
plant (02/04/1942)
Letter from R. Taylor, Union Oil, to H. Ickes, Petroleum Coordinator for National
DX133
Defense, re: submitted avgas contract (02/05/1942)
DX134 Memo from B. Brown re: avgas supply and capacity (03/06/1942)
Internal OPC memo from D. Wilson to W. Gary re: conference with Shell Oil re:
DX135
100 octane avgas (04/08/1942)
100-Octane Aviation Gasoline Cost Analysis and Breakdown prepared by Shell
DX136
Oil for DSC (04/08/1942)
Avgas Price Negotiation Memo by B. Brown, D. Wilson, and G. Parkhurst of
DX137
OPC - 1942 (04/22/1942)
Letter from R. Herndon, Texas Company, to R. Cragin, OPC, re: Navy
DX138
Department avgas contracts (06/09/1942)
Letter from R. Isom, Richfield Oil, to R. Davies, Department of Interior, re:
DX139
proposal for supplying 100 octane avgas (06/24/1942)
Internal OPC memo from G. Parkhurst to B. Brown re: proposed Richfield Oil
DX140
avgas expansion (06/25/1942)
Letter from W. Stewart, Union Oil, to B. Brown, OPC, re: Union's preference to
DX141
negotiate directly with Army and Navy (08/19/1942)
DX142 Various Reports on Refining and Refined Products, PAW District 5 (1942)
Internal OPC memo from G. Parkhurst to B. Brown re: 100 octane avgas Richfield
DX143
Oil (09/01/1942)
Letter from R. Gragin to G. Parkhurst re: Army and Navy base prices for 100
DX144
octane avgas (10/15/1942)
Letter from R. Taylor, Union Oil, to R. Davies, Deputy Petroleum Coordinator for
DX145
War, proposing Executive Order (with attachment) (10/16/1942)
Letter from M. Halpern, Texas Company, to E. Cumming, OPC, re: proposal to
DX146
consturct additional avgas facilities (12/05/1942)
20
Letter from W. Stewart, Union Oil, to G. Parkhurst, Office of Petroleum
DX147
Adminstration for War, re: avgas contract terms (12/22/1942)
DX148 PAW District 5 Summary Report (11/19/1942)
Internal OPC memo from B. Brown to R. Davies re: avgas discusisons with
DX149
Sinclair Refining Co. (02/03/1943)
DX150 Shell Oil Co. table re: value of current 1942-43 contracts (02/17/1943)
Letter from M. Halpern, Texas Company, to G. Parkhurst, PAW, re: 100 octane
DX151
avgas (05/19/1943)
DX152 PAW memo re: Richfield Oil price negotiation (05/24/1943)
Internal OPC memo from G. Skerritt to K. Stone re: DSC avgas purchase,
DX153
Jan./Feb. 1943 (06/19/1943)
DX154 Aviation Gasoline Subcommittee Meeting Minutes- 8.10.43 (08/10/1943)
Letter from Union Oil to Paymaster General of Navy re: avgas contract deliveries
DX155
in August 1943 (09/03/1943)
Memo of recommendation from G. Parkhurst, PAW, re: Union Oil avgas contract
DX156
(09/13/1943)
DX157 Various requests for PAW exceptions, 1943-45 (10/09/1943)
Letter from V. Stapleton, Akylation Subcommittee Chairman, to R. Follis, District
DX158
5 Technial Subcommittee, re: District 5 acid (circa 10/9/1943)
DX159 Aviation Gasoline Subcommittee Meeting Minutes 10.19.43 (10/19/1943)
Letter from R. Follis, District 5 avgas subcommittee chairman, to V. Stapleton,
DX160
Texas Co., re: sulfuric acid for alyklation district 5 (10/22/1943)
W. Tidwell & B. O'Callaghan, Monograph: The Role of DSC in the Wartime
DX161
Aviation Gasoline Program (05/01/1905)
“General Summary—Sulfuric Acid Reports,” November 29, 1943-December 14,
DX162
1943; Exhibit Smith-4, 8-1080, Defendant’s Exhibit 280 (1943)
DX163 Various acid reports from R. Smith to P. Blakemore (1943)
DX164 PAW May-June Petroleum Supply Program (circa 1943)
DX165 Refinery Committee District 5 Minutes (01/20/1944)
DX166 PAW press release re: Peacetime Uses (04/06/1944)
DX167 PAW press release re: rumors of over abundance of motor fuel (04/13/1944)
Letter from R. Follins, District 5 Avgas Subcommittee, to R. Cragin, PAW, re:
DX168
efficient use of sulfuric acid (04/24/1944)
21
DX169 PAW press release re: Motor Gas (05/26/1944)
Agreement Extending and Modifying The Aviation Gasoline Reimbursement
DX170
Plant+C166 and the Four-Party Purchase Agreement (07/01/1944)
Letter from M. Halpern, Texas Company, to G. Parkhurst, PAW, re: historical
DX171
avgas data (08/18/1944)
DX172 District 5 Avgas Subcommittee Meeting Minutes (09/20/1944)
DX173 District 5 Avgas Subcommittee Meeting Minutes (09/20/1944)
Memo from H. Stiles to F. Jayne re: unit prices for 100 octane avgas 1935-41
DX174
(12/12/1944)
DX175 Avgas subcommittee meeting minutes (12/27/1944)
DX176 Science Newsletter, “Better Postwar Cars” (01/27/1945)
DX177 Avgas subcommittee meeting minutes (02/21/1945)
Detail of Petroleum demand data - PAW District 5, Statistical Section
DX178
(02/17/1945)
DX179 District 5 avgas subcommittee meeting minutes (02/21/1945)
DX180 Various letters from district 5 to PAW (1945)
DX181 Shell Wilshire Agreement (04/06/1945)
DX182 District 5 avgas subcommittee meeting minutes (04/11/1945)
Statements of Tank Car Shipments from District 5 to District 1 and District 3
DX183
(1943)
DX184 District 5 avgas subcommittee meeting minutes (05/23/1945)
DX185 District 5 avgas subcommittee meeting minutes (07/18/1945)
Letter from P. Byrne, PAW, to M. Yonker, District 5, re: sulfuric acid
DX186
(07/19/1945)
DX187 Telegram from P. Davies, PAW, to all refiners re: end of war (08/15/1945)
Telegram from A. Frame, director of refining, to H. Gallagher, district 5 director,
DX188
re: end of war (08/18/1945)
E.L. Hildebrand, The Oil and Gas Journal, “Handling Sulfuric Acid Sludges”
DX189
(09/30/1948)
DX190 Advertisement, Torrace (CA) Herald, September 20, 1945 (09/20/1945)
22
DX191 E.F. Lindsley, Scientific American , “Fuels Rated By Performance” (03/01/1946)
A.P. Frame, “Postwar Effects of Refinery Wartime Construction,” Oil and Gas
DX192
Journal (03/30/1946)
J. Carmical, “New Oil Processes Benefit Motorists,” New York Times , Apri 21,
DX193
1946 (04/21/1946)
B. Pierce, New York Times , “Shortages Restrict Production of the Fuel Which
DX194
New Cars Are Designed to Use” (12/22/1946)
DX195 V. Biske, Institute of Petroleum Review , “Acid Sludge Disposal” (1947 circa)
New York Times , “Unfilled Backlog for Autos Grows: Record Production this
DX196
Year Will Not Satisfy Demand” (03/14/1948)
DX197 New York Times , “Output Held High in Auto Industry” (07/17/1949)
New York Times , “New Engine for Buicks: High-Compression Design Will Use
DX198
the Latest Octane Fuels” (12/19/1949)
DX199 Science News Letter, “Car Industry Looks Ahead” (01/28/1950)
DX200 Shell News, “Wilmington Refinery to Serve the West” (03/01/1950)
DX201 Octane Number Data (Blade 1955) (1955)
E. Welty and F. Taylor, The Black Bonanza, The Fabulous Life and Times of the
DX202
Union Oil Company of California (excerpt) (1958)
C. Jones, From the Rio Grande to the Artic, The Story of the Richfield Oil Corp.
DX203
(excerpt) (1972)
DX204 M. Gladstone, L.A. Times , “Gas Seeping Into Mobile Home Park” (12/09/1982)
DX205 Texaco Website, 1901-2014 timeline (12/11/2015)
DX206 McColl pre-SARA Record of Decision (ROD) (04/11/1984)
DX207 L.A. Times, “State Orders Cleanup of Old Gardena Dump Site” (07/09/1992)
DX208 McColl Source Record of Decision (ROD) (06/30/1993)
J. Gary & G. Handwerk, Petroleum Refining Technology and Economics (3d ed)
DX209
(excerpt) (1994)
DX210 HF alkylation description and block diagram
DX211 McColl Groundwater Record of Decision (ROD) (05/15/1996)
S. Howarth, A Century of Oil, The “Shell” Transport and Trading Company,
DX212
1897-1997 (excerpt) (1997)
23
DX213 EPA, “McColl Superfund Site -- Five-Year Review Complete” (06/01/2008)
DX214 Octane History Chart (03/12/2013)
U.S. Energy Info Administration, “Alkylation is an important source for octane in
DX215 gasoline,” available at http://www.eia.gov/todayinenergy/detail.cfm? id=9971
(10/08/2015)
Shell Oil Co., “Post-war expansion,” available at
DX216 http://www.shell.com/global/aboutshell/who-we-are/ourhistory/post-war-
expansion.html (12/04/2015)
California Energy Comm'n, “California Oil Refinery History,” available at
DX217
http://energyalmanac.ca.gov/petroleum/refinery_history.html (12/14/2015)
Shell Oil Co., “Shell in Carson Southern California, About Carson,” available at
DX218 http://www.shell.us/about-us/projects-andlocations/shell-in-carson-southern-
california/about-carson.html (12/14/2015)
DX219 EPA Overview of Ralph Gray Trucking Co. superfund site (12/28/2015)
DX220 Appendix C, Brownfield Property Listing
DX221 1940 California road map (1940 circa)
Snedecor & Cochran, Statistical Methods , Chapter 10: Correlation (8th ed.1989)
DX222
(1989)
DX223 Excerpts of record in Western Properties Servs. Corp. v. Shell Oil Co . (9th Cir.)
EDR Aerial Photo Decade Package, McColl Superfund site in Fullerton,
DX224
California (Undated)
V. Kalichevsky & B. Stagner, Chemical Refining of Petroleum, “Chapter III:
DX225 Sulfuric Acid Sludge and Hydrogen Sulfide; Recovery and Manufacture of
Sulfuric Acid” (revised ed.) (1942)
DX226 Spent alkylation acid situation forecast, Q1 1945 (1945)
DX227 Spent alkylation acid situation forecast, February-April 1945 (1945)
DX228 W. Nelson, Petroleum Refinery Engineering (3d ed.) (excerpt) (1949)
F. Weiss et al., Analytical Chemistry , “Analysis of Sulfuric and Acid Sludges
DX229
from Petroleum Processes” (02/01/1953)
DX230 Aerial photograph 1963 (1963)
DX231 Aerial photographs 1968-1981 (1968-1981)
EPA Report, “Trace Elements Associated with Oil Shale and its Processing”
DX232
(05/01/1977)
24
Radian Corp., Technical Memo: “McColl Phase II, Physical and Chemical
DX233 Characterization and Distribution of the Waste at the McColl Site” (submitted to
California Department of Health Services) (02/15/1983)
L. Streebin et al., U.S. Department of Commerce, “Land Treatment of Petroleum
DX234
Refinery Sludges” (11/01/1984)
DX235 EPA Superfund Record of Decision (ROD) McColl site (04/11/1984)
EPA Research Symposium, “Land disposal, remedial action, incineration and
DX236
treatment of hazardous waste” (08/01/1986)
DX237 CH2M Hill, McColl Site Field Report for EPA (10/09/1987)
DX238 CH2M Hill, McColl Site Field Report for EPA (10/09/1987)
DX239 W. Cullen & K. Reimer, “Arsenic Speciation in the Environment” (07/12/1988)
B. Puri & K. Irgolic, “Determination of arsenic in crude petroleum and liquid
DX240
hydrocarbons” (09/27/1989)
DX241 Aerial photo (1990)
Environmental Solutions, Inc., McColl Superfund Site: Selective Excavation
DX242
Treatment and RCRA Equivalent Closure Report (02/12/1991)
Clement Int'l Corp., Addendum to the Baseline Public Health Evaluation for
DX243
McColl Superfund Site (prepared for EPA) (07/01/1992)
Clement Int'l Corp., Baseline Public Health Evaluation for McColl Superfund Site
DX244
(prepared for EPA) (05/01/1992)
EPA Demonstration of a Trial Excavation at the McColl Superfund Site,
DX245
Applications Analysis Report (10/01/1992)
ICF Technology Inc., Public Health Evaluation of Remedial Alternatives at
DX246
McColl Superfund Site, Vol. 1 (prepared for EPA) (05/01/1992)
ICF Technology Inc., Public Health Evaluation of Remedial Alternatives at
DX247
McColl Superfund Site, Vol. 2 attachments (prepared for EPA) (05/01/1992)
E. Calabrese & P. Kostecki, Principles and Practices for Petroleum Contaminated
DX248 Soils , “Chapter 9: Mathematical Hydrocarbon Fate Modeling in Soil Systems”
(1993)
S. Sung et al., Ind. Eng. Chem. Res. , “Decomposition of Spent Alkylation
DX249
Sulfuric Acid to Produce Sulfur Dioxide and Water” (08/02/1993)
DX250 EPA Superfund Record of Decision (ROD) McColl site (06/30/1993)
DX251 Aerial photographs 1994-2005 (1994-2005)
McColl Superfund Site Treatability Study, Phase V Final Report (prepared for
DX252
EPA) (02/01/1994)
DX253 McColl site aerial photographs 1995-1998 (1995-1998)
25
Environ Corporation, Fate and Transport of Tetrahydrothiophenes at the McColl
DX254
Site (12/18/1995)
Environ Corporation, Quarterly Groundwater Monitoring Report Q1 Sampling
DX255
Period (1994) at McColl Site (03/02/1995)
ICF Technology, Inc., Final Baseline Risk Assessment for McColl Superfund Site
DX256
Groundwater Operable Unit (prepared for EPA) (11/01/1995)
Environ Corporation, Quarterly Groundwater Monitoring Report Q2 Sampling
DX257
Period (1995) at McColl Site (prepared for EPA) (04/27/1995)
Environ Corporation, Quarterly Groundwater Monitoring Report Q3 Sampling
DX258
Period (1995) at McColl Site (prepared for EPA) (07/27/1995)
F. Manning & R. Thompson, Oilfield Processing Volume Two: Crude Oil ,
DX259
“Chapter 2: Characterization of Crude Oils” (Undated)
Memo from M. Rorty, ICF Technology Inc., to M. Wolfram, EPA; re: period and
DX260
regional aquifer wells, McColl groundwater (06/14/1995)
Environ Corporation, Final Remedial Investigation Report Groundwater Operable
DX261
Unit at McColl Site (prepared for EPA) (12/29/1995)
Environ Corporation, Final Remedial Investigation Report Groundwater Operable
DX262
Unit at McColl Site - Appendicies (prepared for EPA) (12/29/1995)
Environ Corporation, Final Remedial Investigation Report Groundwater Operable
DX263
Unit at McColl Site - Overize figures (prepared for EPA) (12/29/1995)
Environ Corporation, Final Remedial Investigation Report Groundwater Operable
DX264
Unit at McColl Site - Additional oversize figures (prepared for EPA) (12/29/1995)
The McColl Site Group, Task 4 Full-Scale Treatability Study Report Draft for
DX265
McColl Site (prepared for EPA) (05/01/1995)
GeoSyntec Consultants, Task 13.4 Final Material Compatibility Laboratory
DX266
Testing Report for McColl Superfund Site (prepared for EPA) (10/31/1996)
EPA Feasibility Study Report Groundwater Operable Unit at McColl Site
DX267
(02/07/1996)
GeoSyntec Consultants, Task 14.2 Draft Integrated Conceptual Design Report for
DX268
McColl Superfund Site (prepared for EPA) (03/04/1996)
DX269 EPA Superfund Record of Decision (ROD) McColl site (05/15/1996)
Parsons Engineering Science, Operations and Maintenance Plan at the McColl
DX270
Superfund Site (prepared for EPA) (10/15/1997)
DX271 EPA Superfund Closeout Report for McColl Superfund Site (06/20/1998)
Parsons Engineering Science, Remedial Action Report at the McColl Superfund
DX272
Site (prepared for EPA) (04/01/1998)
J. Matschullat, The Science of the Total Environment , “Arsenic in the geosphere -
DX273
a review” (2000)
Montgomery Watson Harza, McColl Superfund Site Five-Year Review Report
DX274
(prepared for U.S. Army Corps of Engineers) (11/01/2002)
Montgomery Watson Harza, McColl Superfund Site Annual Reports 2000 & 2001
DX275
(prepared for U.S. Army Corps of Engineers) (10/01/2002)
26
DX276 EPA First 5-Year Review Report at McColl Superfund Site (09/30/2002)
C2REM, 2002 Operations, Maintenance & Monitoring Annual Report at McColl
DX277
Superfund Site (prepared for McColl Site Group) (05/01/2003)
C2REM, Draft 2003 Operations, Maintenance & Monitoring Annual Report at
DX278
McColl Superfund Site (prepared for McColl Site Group) (02/06/2004)
EPA Superfund Explanation of Significant Differences at McColl Site
DX279
(09/01/2005)
C2REM, Draft 2004 Operations, Maintenance & Monitoring Annual Report at
DX280
McColl Superfund Site (prepared for EPA) (02/01/2005)
C2REM, Final 2005 Operations, Maintenance & Monitoring Annual Report at
DX281
McColl Superfund Site (prepared for EPA) (03/01/2006)
C. Duyck et al., Spectrochimica Acta Part B , “The determination of trace
DX282 elements in crude oil and its heavy fractions by atomic spectrometry”
(05/03/2007)
U.S. Army Corps of Engineers, Final Second 5-Year Review Report for McColl
DX283
Superfund Site (prepared for EPA) (09/25/2007)
C2REM, 2007 Operations, Maintenance & Monitoring Annual Report at McColl
DX284
Superfund Site (prepared for EPA) (04/01/2008)
DX285 Aerial photographs 2009-2010 (2009-2010)
C. Reimann et al., Applied Geochemistry , “Arsenic distribution in the
DX286
environment: The effects of scale” (04/18/2009)
Alberta Research Council, Final Report: Potential Release of Heavy Metals and
DX287 Mercury from the UOG Industry into the Ambient Environment - Literature
Review (prepared for Petroleum Technology Alliance Canada) (10/16/2009)
DX288 Aerial photograph 2012 (2012)
U.S. Army Corps of Engineers, Third 5-Year Review Report for McColl
DX289
Superfund Site (approved by EPA) (09/28/2012)
G. Hu et al., Journal of Hazardous Materials , “Recent developments in the
DX290
treatment of oily sludge from petroleum industry” (07/29/2013)
J. Speight, The Chemistry and Technology of Petroleum (5th ed) (excerpt)
DX291
(Undated)
DX292 Kalichevsky, Petroleum Refining With Chemicals (1956)
DX293 Shell Annual Report (03/08/1951)
DX294 Large Gasoline Order for Planes (10/05/1932)
DX295 Refineries Operating In United States (1941) (03/27/1941)
DX296 Refineries Operating In United States (1942) (03/24/1942)
27
DX297 General Summary - Sulfuric Acid Reports (11/29/1943)
DX298 NARA Folder - District 5 PAW Directive of 9/29/43 - Reports (circa 1943)
Skerrit to Stone - DSC Purchases 100 Octane, January and February 1943
DX299
(06/19/1943)
Petroleum World , Petroleum Administrator Orders Cur In Civilian Gasoline
DX300
Consumption (11/01/1943)
NARA Folder - Detail of Demand Data Reported to US Bureau of Mines (1943-
DX301
1945)
DX302 NARA Folder - Docs of the Stat. Com. Of Dist. 5 1942-1945 (1942-1945)
NARA Folder - Records Related To The Storage And Supply Of Petroleum
DX303
Products for the Navy 1943-1945 (1943-1945)
PAW Comparison Of Estimated With Actual Demand, Refinery Operations and
DX304
Crude Production (circa 1945)
DX305 NARA Folder - PAW District 5 Reports on Refining and Refined Products
DX306 Oil Industry Says It Can Meet Military Demands For Gasoline (09/27/1950)
DX307 Inspector's Report (10/26/1958)
DX308 Gas Seeing Into Mobile Home Park (12/09/1982)
DX 1000 Bookspan Table 1
DX 1001 Bookspan Table 2
DX 1002 Bookspan Table 3
DX 1003 Bookspan Table 4
DX 1004 Bookspan Figure 1
DX 1005 Bookspan Figure 2
DX 1006 Brigham Table One
DX 1007 Brigham Table Two
DX 1008 Brigham Table Three
DX 1009 Brigham Table Four
28
DX 1010 Brigham Table Five
DX 1011 Brigham Table Six
DX 1012 Brigham Table Seven
DX 1013 Brigham Figure Three (One)
DX 1014 Brigham Figure Two
DX 1015 Brigham Table Eight
DX 1016 Brigham Figure Three
DX 1017 Brigham Appendix One
DX 1018 Kittrell Initial Report Image of 1,200 and 2,400 Barrel Agitators ca. 1016
DX 1019 Kittrell Initial Report Figure 1
DX 1020 Kittrell Initial Report Figure 2
DX 1021 Kittrell Initial Report Figure 3
DX 1022 Kittrell Initial Report Figure 4
DX 1023 Kittrell Initial Report Figure 5
DX 1024 Kittrell Initial Report Table 1
DX 1025 Kittrell Initial Report Table 2
DX 1026 Kittrell Initial Report Table 3
DX 1027 Kittrell Initial Report Table 4
DX 1028 Kittrell Initial Report Table 5
DX 1029 Kittrell Initial Report Table 6
DX 1030 Kittrell Initial Report Table 7
DX 1031 Kittrell Initial Report Table 8
29
DX 1032 Kittrell Initial Report Table 9
DX 1033 Kittrell Initial Report Table 10
DX 1034 Kittrell Initial Report Table 11
DX 1035 Kittrell Rebuttal Report Figure 1
DX 1036 Kittrell Rebuttal Report Figure 2
DX 1037 Kittrell Rebuttal Report Figure 3
DX 1038 Kittrell Rebuttal Report Table 1
DX 1039 Kittrell Rebuttal Report Figure 4
DX 1040 Kittrell Rebuttal Report Table 2
DX 1041 Kittrell Rebuttal Report Table 3
DX 1042 Kittrell Rebuttal Report Table 4
DX 1043 Medine Figure 1
DX 1044 Medine Figure 2
DX 1045 Medine Figure 3
DX 1046 Medine Figure 4
DX 1047 Medine Figure 5
DX 1048 Medine Table 1
DX 1049 Medine Table 2
DX 1050 Medine Table 3
DX 1051 Medine Table 4
DX 1052 Medine Table 5
DX 1053 Dr. James Kittrell, Ph. D. Direct Testimony
30
DX 1054 Dr. Jay Brigham, Ph. D. Direct Testimony
DX 1055 Dr. Shelley Bookspan, Ph. D. Direct Testimony
DX 1056 Dr. Alan Medine, Ph. D. Direct Testimony
In addition, on December 21, 2016, the Government moved to enter the following
exhibit, cited by the Government’s expert James R. Kittrell, Ph.D., into evidence.
PX1259 Ultimate Production of Aviation Grade Gasoline On Completion Of Presently
Approved Facilities (July 10, 1944). .
The Government objected, in whole or in part, to the admissibility of certain Exhibits
introduced by Plaintiffs. See Defendant’s Objections to Plaintiffs’ Written Testimony (Feb. 10,
2016), ECF No. 183, and Defendant’s Objections to Plaintiffs’ Exhibits (Mar. 23, 2016), ECF No.
201. Plaintiffs responded by arguing that those exhibits were all admissible into evidence in their
entirety, see Plaintiffs’ Post-Trial Proposed Findings of Fact and Memorandum of Law 150–70
(Apr. 8, 2016), ECF No. 202; Plaintiffs’ Response to Defendant’s Objections to Plaintiffs’ Exhibits
(Apr. 22, 2016), ECF No. 207; Plaintiffs’ Response to Defendant’s Objections to the Written
Testimony of Plaintiffs’ Experts (Feb. 15, 2016), ECF No. 189.
The following Exhibits have been deemed admissible and part of the record
PX11 CERCLA Stipulations
Judgment and Stipulation as to pre-October 31, 1998 costs incurred (Oct. 13,
PX12
1999)
Def.’s Resp. to Pls.’ Proposed Findings of Uncontroverted Fact, Shell Oil Co. v.
PX13
United States (Aug. 11, 2006) (No. 06-141C)
Def.’s Resp. to Pls.’ Proposed Findings of Uncontroverted Fact, Shell Oil Co. v.
PX14
United States (July 11, 2008) (No. 06-141C)
United States, 2012 Gov't Responses to Pls.' Proposed Findings of
PX15
Uncontroverted Fact (Sept. 7, 2012)
The Government objected to portions of Written Direct Testimony of Edmond
F. Bourke, Shell Oil Co. v. United States (Feb. 5, 2016) (No. 06-141C), as
PX18
identified in Defendant’s Objections to Plaintiffs’ Written Testimony, at 5-10
and 15-16 (Feb. 10, 2016), ECF No. 183
Decl. of Edmond F. Bourke, Shell Oil Co. et al. v. United States (June 26,
PX103
2012)
PX297 Total Costs Incurred, With Interest (Jan. 8, 2016)
PX298 Additional Interest on Pre-October 31, 1998 Costs (Jan. 8, 2016)
31
Transcript of CERCLA Allocation Trial, United States v. Shell Oil Co., No. 91-
PX605
589-RJK (Feb. 17, 1998)
Transcript of CERCLA Allocation Trial, United States v. Shell Oil Co., No. 91-
PX606
589-RJK (Feb. 18, 1998)
Transcript of CERLCA Allocation Trial, United States v. Shell Oil Co., No. 91-
PX607
589-RJK (Feb. 19, 1998)
Transcript of CERCLA Allocation Trial, United States v. Shell Oil Co., No. 91-
PX609
589-RJK (Feb. 20, 1998)
Transcript of CERCLA Allocation Trial, United States v. Shell Oil Co., No. 91-
PX610
589-RJK (Feb. 23, 1998)
Transcript of CERCLA Allocation Trial, United States v. Shell Oil Co., No. 91-
PX611
589-RJK (Feb. 24, 1998)
The following have been deemed inadmissible.
PX17 Portions of Written Direct Testimony of Gregory G. Kipp, as identified in
Defendant’s Objections to Plaintiffs’ Written Testimony, at 1718 (Feb. 10,
2016), ECF No. 183.
The Oil Companies’ Post-Trial Br. for the Allocation Trial, United States v.
PX612
Shell Oil Co., No. 91-589-RJK (Mar. 31, 1998) (No. 91-0589)
United States’ Post-Trial Br. for the Allocation Trial, United States v. Shell Oil
PX613
Co., No. 91-589-RJK (Apr. 2, 1998) (No. 91-0589)
32
COURT EXHIBIT B
COURT EXHIBIT B: EVIDENTIARY RULINGS REGARDING ADMISSIBILITY OF
EXHIBITS AND WRITTEN DIRECT TESTIMONY
I. BACKGROUND.
The Government objects, in whole or in part, to the admissibility of certain Exhibits
introduced by the Oil Companies. On February 10, 2016, the Government filed Objections To
Plaintiffs’ Written Direct Testimony. ECF No. 183 (“Gov’t Test. Obj.”). On February 15, 2016,
the Oil Companies filed a Response. ECF No. 189. (“Pl. Resp.”). On February 25, 2016, the
Government filed a Reply. ECF No. 192 (“Gov’t Reply”).
On March 23, 2016, the Government filed Objections To Plaintiffs’ Exhibits. ECF No.
201 (“Gov’t Ex. Obj.”). On April 8, 2016, the Oil Companies responded to the Government’s
March 23, 2016 Objections in the Plaintiffs’ Post-Trial Proposed Findings of Fact And
Memorandum Of Law. ECF No. 202 (“Pl. DBr.”); see also Plaintiffs’ Response To Defendant’s
Objections To Plaintiffs’ Exhibits, ECF 207 (stating that “[t]o avoid repetitive briefing” the Oil
Companies wished to rely upon their post-trial brief as a response to the Government’s objections
to exhibits).
II. DISCUSSION.
A. Stipulations And Trial Testimony In United States v. Shell Oil Company, et
al., No. Civ. 91-0589 (C.D. Cal.)—PX 11, PX 605, PX 606, PX 607, PX 609,
PX 610, PX 611.
1. The Government’s Argument.
The Government argues that the stipulations (PX 11)1 that the parties agreed to in, and the
argument and sworn trial testimony from the CERCLA litigation, United States v. Shell Oil
Company, et al., No. Civ. 91-0589 (C.D. Cal.) (PX 605, PX 606, PX 609, PX 610, and PX 611),2
1
PX 11 contains several documents:
(A) the June 23, 1995 Stipulated Facts Of The Parties Relating To Pending Motions For
Summary Judgment And Related Motions in United States v. Shell Oil Company, et al.,
No. Civ. 91-0589 (C.D. Cal.) (“the CERCLA case”). PX 11 at JA377–475.
(B) the July 31, 1995 Supplemental Stipulated Facts Of The Parties Relating To Pending
Motions For Summary Judgment And Related Motion in the CERCLA Case. PX 11 at
JA476–78;
(C) the December 11, 1997 Preliminary Draft Pretrial Order in the CERCLA case. PX 11
at JA479–88; and
(D) the December 11, 1997 Supplemental Stipulated Facts Of The Parties Relating To
Pending Trial To Allocate Response Costs Between The Oil Companies And The United
States in the CECLA case PX 11 at JA489–550.
2
PX 605 is a February 17, 1998 Transcript of the CERCLA Motions in Limine and
Opening Statements.
PX 606 is a February 18, 1998 Transcript of CERCLA trial testimony.
are not relevant and otherwise not admissible, in the case pending before the United States Court
of Federal Claims. Gov’t Ex Obj. at 1–3. “It is axiomatic that, for a stipulation to bind the parties
in different litigation, it ‘must explicitly express this intent[.]’” Gov’t Ex. Obj. at 2–3 (citing
RESTATEMENT (SECOND) OF JUDGMENTS § 27 cmt. (e) (2016)). The parties agreed that the
CERCLA stipulations were intended solely for summary judgment and trial. Gov’t Ex. Obj. at 2
(citing PX 11 at JA380, 476, 489). And, because the CERCLA stipulations (PX 11) are
inadmissible, the CERCLA trial testimony and argument (PX 605, PX 606, PX 607, PX 609, PX
610, and PX 611), based on the stipulations, are inadmissible as well. Gov’t Ex. Obj. at 1.
2. The Oil Companies’ Response.
The Oil Companies respond that the Government’s objections that the CERCLA
stipulations are not binding in this case are belied by Government’s prior representation to the
court that the stipulations are “binding fact[s] on the parties.” 12/18/2012 TR at 57 (Hearing On
Cross-Motions For Summary Judgment) ECF No. 111 at 57. Therefore, the doctrine of judicial
estoppel is applicable. See Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1565 (Fed. Cir. 1996)
(holding that “where a party successfully urges a particular position in a legal proceeding, it is
estopped from taking a contrary position in a subsequent proceeding where its interests have
changed”). In the alternative, the CERCLA stipulations are binding “judicial admissions,” because
they are formal concessions that “have the effect of withdrawing a fact from issue.” Pl. DBr. at
152, 164 (citing Christian Legal Soc’y v. Martinez, 561 U.S. 661, 677–78 (2010) (holding that
facts stipulated at the summary-judgment stage were binding “judicial admissions”)). In addition,
the parties agreed that the CERCLA stipulations were binding and “true for purposes of this
litigation.” PX 11 at JA491 (Dec. 11, 1997 CERCLA Stipulation Amendments). And, the breach
of contract claims are a continuation of the CERCLA litigation. Pl. DBr. at 164. In any event, the
CERCLA Stipulations are admissible evidence, even if they are not binding, because they are prior
PX 607 is a February 19, 1998 Transcript of CERCLA trial testimony.
PX 609 is a February 20, 1998 Transcript of CERCLA trial testimony.
PX 610 is a February 23, 1998 Transcript of CERCLA trial testimony.
PX 611 is a February 24, 1998 Transcript of CERCLA trial testimony.
2
statements of a party-opponent and are public records. Pl. DBr. at 165; see FRE 801(d)(2)3 and
FRE 803(8)4).
3. The Court’s Resolution.
Plaintiff argues that the CERCLA stipulations are binding on the parties, because they are
judicial admissions, i.e., a “formal waiver of proof that relieves an opposing party from having to
prove the admitted fact and bars the party who made the admission from disputing it.” BLACK’S
LAW DICTIONARY 49 (7th ed. 1999); see also 32 CORPUS JURIS SECUNDUM, EVIDENCE § 550 (2016)
(“[A] stipulation constitutes a judicial admission of the fact in issue.”). But, the “duration of [a
stipulation’s] effect, no less than its scope, depends, after all, on the intent of the parties.” 9
WIGMORE, EVIDENCE 3d Ed. § 2593 at 594 (1940). In PX 11, the parties specifically stated that
the stipulations were “for purposes of the summary judgment and other motions [then] currently
pending before the [district] [c]ourt” and “purposes of this litigation.” PX 11 at JA380, JA491.
Although the pending case before the court includes the same parties and related facts, it is not the
same litigation in which the CERCLA stipulations were made. The Oil Companies voluntarily
dismissed the breach of contract counterclaim filed in the United States District Court of Central
California and filed a new Complaint in the United States Court of Federal Claims. See Shell Oil
Co. v. United States, 751 F.3d 1282, 1289 (Fed. Cir. 2014) (“The [Oil Companies] voluntarily
3
Rule 801(d)(2) of the Federal Rules of Evidence (“FRE”) provides that:
[a] statement that meets the following conditions is not hearsay: . . . The statement
is offered against an opposing party and . . .
(A) was made by the party in an individual or representative capacity;
(B) is one the party manifested that it adopted or believed to be true;
(C) was made by a person whom the party authorized to make a statement on the
subject;
(D) was made by the party's agent or employee on a matter within the scope of that
relationship and while it existed; or
(E) was made by the party's coconspirator during and in furtherance of the
conspiracy.
FRE 801(d)(2).
4
FRE 803(8) provides that:
The following are not excluded by the rule against hearsay, regardless of whether
the declarant is available as a witness . . .
(8) Public Records. A record or statement of a public office if:
(A) it sets out:
(i) the office's activities;
(ii) a matter observed while under a legal duty to report, but not including, in a
criminal case, a matter observed by law-enforcement personnel; or
(iii) in a civil case or against the government in a criminal case, factual findings
from a legally authorized investigation; and
(B) the opponent does not show that the source of information or other
circumstances indicate a lack of trustworthiness.
FRE 803(8).
3
dismissed the transferred Complaint without prejudice, exhausted their administrative remedies
with the General Services Administration . . . and filed a new Complaint in the Court of Federal
Claims, seeking reimbursement for the CERCLA costs.”(emphasis added)). Therefore, as a matter
of law, the CERCLA stipulations are not binding on the parties or the court in this case.
But, judicial admissions in one case may be evidentiary admissions in another case. See
Higgins v. Mississippi, 217 F.3d 951, 954–55 (7th Cir. 2000) (“[A] judicial admission binds only
in the litigation in which it is made. . . . In any other suit . . . it operates merely as an evidentiary
admission.”). As a matter of law, evidentiary admissions are not binding, but are admissible and
the factfinder is “free to weigh [them] against the other evidence adduced at trial.” See Paice
LLC v. Toyota Motor Corp., 504 F.3d 1293, 1312 (Fed. Cir. 2007); see also Tzu Wei Chen Food
Co., Ltd. v. Chia-Chi Enters., Inc., No. 94-1527, 1995 WL 714589 at *4 (Fed. Cir. 1995)
(“[E]vidential admissions are not binding; instead, they merely constitute admissible evidence to
be considered in combination with all other relevant evidence.”).
For these reasons, the court has determined that the CERCLA stipulations (PX 11) are
relevant,5 and are admissible evidentiary admissions, and reliable evidence of the underlying
amount of damages at issue. Likewise, the trial testimony (PX 605, PX 606, PX 607, PX 609, PX
610, and PX 611) is admissible as a public record. See FRE 803(8).
B. Stipulation In CERCLA Litigation As To Pre-October 31, 1998 Costs
Incurred And The Declaration Of Edmond F. Burke—PX 12, PX 103.
1. The Government’s Argument.
PX 12 reflects that parties entered into an agreement in the CERCLA litigation “to allow a
final appealable judgment . . . in the [United States District Court for the Central District of
California.]” Gov’t Ex. Obj. at 3 (citing PX 12 at 6). This agreement provided that, “in the event
that the Orders are not affirmed in full, the Parties shall again negotiate in good faith to attempt to
reach a stipulated payment for response costs.” PX 12 at 6. The United States Court of Appeals
for the Ninth Circuit, however, reversed the district court’s judgment, terminating the agreement.
Gov’t Ex. Obj. at 3. As such, PX 12 and the part of PX 103 (Edmond F. Bourke Decl.) that repeats
PX 12 is not relevant in this case. Gov’t Ex. Obj. at 3.
In addition, PX 12 and 103 are not admissible under FRE 408(a),6 that “adopts a rule
excluding factual admissions made in the course of settlement negotiations.” Gov’t Ex. Obj. at 4
(quoting Eid v. Saint-Gobain Abrasives, Inc., 377 F. App’x 438, 445 (6th Cir. 2010)).
5
FRE 401 provides: “Evidence is relevant if: (a) it has any tendency to make a fact more
or less probable than it would be without the evidence; and (b) the fact is of consequence in
determining the action.” FRE 401.
6
FRE 408 provides:
4
2. The Oil Companies’ Response.
PX 12 is “a stipulation, not a settlement offer” that, “the Government . . . adopted . . . during
the 2008 summary judgment proceedings before this [c]ourt.” Pl. DBr. at 165–66 (citing PX 14
at ¶ 13). PX 103 is also not a settlement offer, but a declaration of the Oil Companies’ expert
Edmond Bourke that provides a summary of interest due on costs incurred and stipulated in PX
12. PX 103 at JA 668.
3. The Court’s Resolution.
PX 12 is a stipulation that “constitutes a judicial admission of the fact in issue.” 32 CORPUS
JURIS SECUNDUM, Evidence § 550. But, a judicial admission binds the parties “only in the
litigation in which it is made. . . . In any other suit . . . it operates merely as an evidentiary
admission.” Higgins, 217 F.3d at 954–55 (internal citations omitted). Although evidentiary
admissions are not binding, they are admissible evidence. See Paice LLC, 504 F.3d at 1312
(attorney’s statement that was an “evidential admission” could be weighed by factfinder against
other evidence adduced at trial); see also Tzu Wei Chen Food Co., Ltd., No. 94-1527, 1995 WL
714589 at *4 (“[E]vidential admissions are not binding; instead, they merely constitute admissible
evidence to be considered in combination with all other relevant evidence.”).
For these reasons, the court has determined that PX 12 is an evidentiary admission of the
pre-November 1, 1998 costs incurred and is relevant, admissible, and reliable evidence. PX 103
is also admissible.
(a) Prohibited Uses. Evidence of the following is not admissible--on behalf of any
party--either to prove or disprove the validity or amount of a disputed claim or to
impeach by a prior inconsistent statement or a contradiction:
(1) furnishing, promising, or offering--or accepting, promising to accept, or
offering to accept--a valuable consideration in compromising or attempting to
compromise the claim; and
(2) conduct or a statement made during compromise negotiations about the claim-
-except when offered in a criminal case and when the negotiations related to a claim
by a public office in the exercise of its regulatory, investigative, or enforcement
authority.
(b) Exceptions. The court may admit this evidence for another purpose, such as
proving a witness's bias or prejudice, negating a contention of undue delay, or
proving an effort to obstruct a criminal investigation or prosecution.
FRE 408.
5
C. The Government’s Responses To Proposed Findings Of Fact In Support Of
Summary Judgment In The United States Court Of Federal Claims—PX 13,
PX 14, PX 15.
1. The Government’s Argument.
PX 13, PX 14, and PX 15 are the Government’s responses to the Oil Companies’ proposed
findings of fact in support of the June 30, 2006, June 20, 2008, and June 29, 2012 Motions For
Summary Judgment in the United States Court of Federal Claims, but are inadmissible, because
the court never issued a Rules of the United States Court of Federal (“RCFC”) 56(g) order.7 Gov’t
Ex. Obj. at 4–8. RCFC 56 allows the court to consider proposed facts as “undisputed for purposes
of the motion.” Gov’t Ex. Obj. at 4 (quoting RCFC 56(e)(2) (emphasis added)). If summary
judgment is denied, however, RCFC 56(g) allows the court to “enter an order stating any material
fact . . . that is not genuinely in dispute and treating the fact as established in the case.” Gov’t Ex.
Obj. at 5 (quoting RCFC 56(g) (emphasis added)). The practice of not deeming facts, proposed
under RCFC 56, as evidence for purposes of trial encourages summary judgment and, thus,
comports with the RCFC 1 goal of fostering “the just, speedy, and inexpensive determination of .
. . action[s] and proceeding[s].” Gov’t Ex. Obj. at 7 (quoting RCFC 1). In this case, the court did
not adopt the Oil Companies’ proposed facts when the motion for summary judgment was denied
and did not enter a RCFC 56(g) order, “thereby leaving all issues related to damages open.” Gov’t
Ex. Obj. at 7. Instead, the court observed that the issue of whether all or some of the Plaintiff’s
CERCLA liability was incurred “by reason of” their avgas production was a “blank slate.” Gov’t
Ex. Obj. at 7 (quoting Shell Oil Co. v. United States, 108 Fed. Cl. 422, 447 (2013)).
In addition, the United States Court of Appeals for the Federal Circuit has held that “the
prior CERCLA litigation does not preclude the Government from challenging the amount of acid
waste attributable to the avgas contracts.” Gov’t Ex. Obj. at 7 (quoting Shell Oil, 751 F.3d at
1303). Therefore, in keeping with the mandate, the court set a trial for damages. Gov’t Ex. Obj.
at 8.
2. The Oil Companies’ Response.
The Oil Companies respond that the Government’s responses to the proposed findings of
fact are binding judicial admissions. Pl. DBr. at 152 (citing Reliable Contracting Grp., LLC v.
Department of Veterans Affairs, 779 F.3d 1329, 1334 (Fed. Cir. 2015) (“[J]udicial admissions . . .
‘have the effect of withdrawing a fact from issue and dispensing wholly with the need for proof of
the fact[.]’”). The test is whether the admission was “clear, deliberate, and unambiguous.”
Centillion Data Sys., LLC v. Qwest Commc’ns Int’l, Inc., 547 F. App’x 980, 985 (Fed. Cir. 2013).
The United States Supreme Court has held that joint stipulations submitted by the parties on
summary judgment are “judicial admission[s]” and added that “[t]he power of the court to act in
7
PX 13 is an August 11, 2006 Defendant’s Responses To Plaintiffs’ Proposed Findings Of
Uncontroverted Fact.
PX 14 is a July 11, 2008 Defendant’s Responses To Plaintiffs’ Proposed Findings Of
Uncontroverted Fact.
PX 15 is a September 7, 2012 Defendant’s Responses To Plaintiffs’ Proposed Findings Of
Uncontroverted Fact.
6
the disposition of a trial upon facts conceded by counsel is as plain as its power to act upon the
evidence produced.” Christian Legal Soc’y, 561 U.S. at 677–78 (holding that a joint stipulation
withdraws facts from issue). Therefore, judicial admissions “may not be controverted at trial or
on appeal of the same case,” including “admissions . . . in motions for summary judgment.” 30B
WRIGHT, MILLER & GRAHAM, FEDERAL PRACTICE & PROCEDURE § 7026 (2014 ed.).
In this case, the Government had weeks, if not months, to consider its responses to the Oil
Companies’ proposed findings of uncontroverted facts. Pl. DBr. at 154. Moreover, the
Government was on notice that when it admitted facts during summary judgment, they may be
deemed “established in the action.” Pl. DBr. at 156 (citing RCFC 56(d)(1)). In addition, the cases
cited by the Government are not precedential. Pl. DBr. at 156.8
RCFC 56(g) and its predecessors provide that admissions made at summary judgment are
binding throughout the entire litigation. Pl DBr. at 157. RCFC 56(g) clarifies that the court has
the power to enter an order to that effect, but does not state that, in the absence of such an order, a
party will not be bound by its formal admissions of fact. Pl. DBr. at 157. Neither Judge Wheeler
nor the Federal Circuit suggested that the Government’s prior judicial admissions in this case are
not binding. Pl. DBr. at 157–58. Instead, the United States Court of Appeals for the Federal
Circuit held that the “prior CERCLA litigation does not preclude the Government from challenging
the amount of acid waste attributable to the avgas contracts.” Pl. DBr. at 158 (quoting Shell, 751
F.3d at 1303). And, the Government did so at the evidentiary hearing in this case.
In the alternative, the Government’s admissions are admissible. Pl. DBr. at 158. Although
the Government argues that the proposed findings of fact are irrelevant under FRE 401, because
they were filed in connection with summary judgment, the Government fails to cite any precedent
in support. Pl. DBr. at 159. The Government’s response to the Oil Company’s proposed findings
of fact at the summary judgment stage are instead admissible as statements of party-opponents and
as public records. Pl. DBr. at 159–60 (citing FRE 801(d)(2) and FRE 803(8)).
3. The Court’s Resolution
PX 13, PX 14, and PX 15 are the Government’s Responses to the Plaintiffs’ Proposed
Findings of Fact, that were filed in response to three separate RCFC 56 Motions For Summary
8
Gov’t Ex. Obj. at 4–5 (citing Brown v. Navarro, 2012 WL 3987427, at *3 (N.D. Ill. Sept.
11, 2012); Fisher v. Ciba Specialty Chemicals Corp., 2007 WL 2995525, at *9 (S.D. Ala. Oct. 11,
2007); Chen v. Mayflower Transit, Inc., 2004 WL 2535258, at *3 (N.D. Ill. Sept. 23, 2004)). The
only case that the Government cites from the United States Court of Federal Claims does not
provide a categorical rule, and instead determined that a party’s admissions in a proposed findings
of fact “are not necessarily binding upon the parties or the Court at the trial to follow.” Bell BCI
Co. v. United States, 72 Fed. Cl. 164, 166 n.2 (2006) (emphasis added).
7
Judgment: a 2006 Motion For Partial Summary Judgment,9 a 2008 Motion For Summary
Judgment,10 and a 2012 Motion For Summary Judgment.11
RCFC 56 provides that the court may consider facts not addressed or supported as
undisputed, for purposes of a motion, but if the court does not grant summary judgment, the court
nevertheless may enter an order stating that certain material facts have been established. See RCFC
56(e)(2), (g). In this case, the court granted summary judgment on these motions, in favor of the
Oil Companies regarding the 2006 and 2008 Motions For Summary Judgment, and in favor of the
Government on the 2012 Motion For Summary Judgment. But, all of these orders now are vacated.
See Shell Oil Co. v. United States, 108 Fed. Cl. 422 (2013) (denying the Oil Companies’ 2012
Motion For Summary Judgment), rev’d and remanded, 751 F.3d 1282 (Fed. Cir. 2014); see also
Shell Oil Co. v. United States, 86 Fed. Cl. 470 (2009) (granting the Oil Companies’ 2008 Motion
For Summary Judgment), vacated by Order of May 27, 2010; Shell Oil Co. v. United States, 80
Fed. Cl. 411 (2008) (granting the Oil Companies’ 2006 Motion for Partial Summary Judgment),
vacated by Order of May 27, 2010.
The United States Supreme Court has held that stipulations jointly submitted at the
summary judgment stage nevertheless are binding on appeal. See Christian Legal Society, 561
U.S. at 677. The Court’s reasoning relied upon a “leading legal reference,” the Corpus Juris
Secundum, that provides:
Where the parties agree on a statement of facts that will determine the case, and there is
nothing in agreement expressly limiting its operation to the particular trial at which it is
made, the stipulation is admissible in a later trial of the same case between the same parties,
especially where it consists largely of matters of record. However, a stipulation of an agreed
statement of facts, to be used in the trial of a cause, that “shall constitute the evidence in
the trial of said cause,” does not prevent the introduction of further evidence at a second
trial.
83 CORPUS JURIS SECUNDUM STIPULATIONS § 92 (internal citations omitted).
The Corpus cites Imhoff v. Whittle, 84 S.W. 243 (Tex. Civ. App. 1904), as the source of
this rule. In Imhoff, the parties stipulated to certain facts at trial, but the opinion of the trial court
was reversed, and the case was remanded for another trial. Id. The appellate court determined
that the previously stipulated facts were admissible, but not binding, in the remand trial, because
“[t]here is no stipulation in the agreement to the effect that neither party should have the right, in
See Shell Oil Co. v. United States, 80 Fed. Cl. 411 (2008) (granting the Oil Companies’
9
2006 Motion For Partial Summary Judgment), vacated by Order of May 27, 2010, ECF No. 74.
See Shell Oil Co. v. United States, 86 Fed. Cl. 470 (2009) (granting the Oil Companies’
10
2008 Motion For Summary Judgment), vacated by Order of May 27, 2010, ECF No. 74.
See Shell Oil Co. v. United States, 108 Fed. Cl. 422 (2013) (denying the Oil Companies’
11
2012 Motion For Summary Judgment), rev’d and remanded, 751 F.3d 1282 (Fed. Cir. 2014).
8
the event of a second trial, to introduce testimony to prove additional facts; nor do we believe that
it was the purpose of the parties to deprive themselves of such right.” Id.
In this case, the Government’s Responses to Plaintiffs’ Proposed Findings Of Fact were
not “jointly submitted” nor contain any indication that the parties intended to be bound by the
Proposed Findings Of Fact beyond the summary judgment stage. Proposed Findings Of
Uncontroverted Fact (2006), ECF No. 11; Proposed Findings Of Uncontroverted Fact (2008), ECF
No. 32; Proposed Findings Of Uncontroverted Fact (2012), ECF No. 95.
For these reasons, the court has determined that PX 13-15 are not binding, but are relevant,
admissible, and reliable.
D. Demonstratives Alleging Total Costs—PX 297 and PX 298.
1. The Government’s Argument.
The Government argues that PX 297 and PX 298 are inadmissible, because the Oil
Companies did not lay a proper foundation with respect to these demonstratives showing pre-2002
costs. Gov’t Ex. Obj. at 8. 12
2. The Oil Companies’ Response.
The Oil Companies respond that, when a moving party fails to cite authority, “the moving
party’s poorly developed argument is deemed waived.” Pl. DBr. at 167 (citing Puffer v. Allstate
Ins. Co., 675 F.3d 709, 718 (7th Cir. 2012) (holding that a conclusory argument that was not
developed before the district court was waived upon appeal)).
In any event, PX 297 and PX 298 are admissible charts under FRE 1006,13 “so long as the
proponents ‘make the originals or duplicates available for examination or copying, or both, by
other parties at a reasonable time and place.’” Pl. DBr. at 168 (citing FRE 1006).
3. The Court’s Resolution.
FRE 1006 provides that “[t]he proponent may use a summary, chart, or calculation to prove
the content of voluminous writings, recordings, or photographs that cannot be conveniently
12
The Government did not provide a specific citation to the FRE.
13
FRE 1006 provides:
The proponent may use a summary, chart, or calculation to prove the content of
voluminous writings, recordings, or photographs that cannot be conveniently
examined in court. The proponent must make the originals or duplicates available
for examination or copying, or both, by other parties at a reasonable time and place.
And the court may order the proponent to produce them in court.
FRE 1006.
9
examined in court.” FRE 1006. PX 297 and PX 298 are demonstrative summary charts of the
total costs incurred prior to 2002, plus interest that the Oil Companies claim as damages.
For these reasons, the court has determined that PX 297 and PX 298 are relevant and
admissible.
E. Spreadsheet Dated 1998 Tallying “Shell Chemical Receipts Of Sludge”—PX
608.
1. The Government’s Argument.
The Government argues that PX 608 lacks foundation, because it does not identify the
source of the numbers cited in the spreadsheet. Gov’t Ex. Obj. at 9.14 In addition, “the only
identifying mark, ‘Peter R. Taft’ refers to [the Oil Companies’] counsel in the district court
CERCLA case.” Gov’t Ex. Obj. at 9 (citing Shell Oil Co. v. United States, 294 F.3d 1045, 1047
(9th Cir. 2002) (identifying “Peter R. Taft, Munger, Tulles & Olson LLP”)).
2. The Oil Companies’ Response.
The Oil Companies did not respond to the Government’s objection.
3. The Court’s Resolution.
Because the Government’s objection to PX 608 was not opposed, the court has determined
that PX 608 is not reliable.
F. CERCLA Litigation Post-Trial Briefs—PX 612 and PX 613.
1. The Government’s Argument.
The Government argues that PX 612 and PX 613, post-trial briefs from the CERCLA case,
are inadmissible. Gov’t Ex. Obj. at 9 (quoting Lockformer Co. v. PPG Indus., Inc., No. CIV.A. 99-
C-6799, 2003 WL1563703, at *2 (N.D. Ill. Mar. 25, 2003) (“Judicial opinions and parties’ own
briefs are not evidence.”), aff’d, 138 F. App’x 314 (Fed. Cir. 2005)).
2. The Oil Companies’ Response.
The Oil Companies respond that the Government’s CERCLA brief, PX 613, is admissible
either as a judicial or evidentiary admission. Pl. DBr. at 169. 15 In the alternative, the
Government’s brief is admissible as a statement of party opponent. Pl. DBr. at 169–70 (citing
14
The Government did not provide a specific citation to the FRE.
15
PX 612 is the Oil Companies’ CERCLA post-trial brief. The Oil Companies did not
respond to the Government’s objection regarding PX 612.
10
FRE 801(d)(2)). In addition, PX 613 is admissible as a public record. Pl. DBr. at 169 (citing FRE
803(8)).
3. The Court’s Resolution.
The Oil Companies seek to introduce as evidence PX 613, the Government’s Post-Trial
Brief, in the 1998 CERCLA litigation. It is well established that trial court pleadings in one case
may be admissible as nonbinding evidentiary admissions of that party in another case. See FRE
801(d)(2); see also Massing v. Secretary of Dept. of Health and Human Services, 19 Cl. Ct. 511,
515 (1990) (“[A]dmissions made in pleadings in prior litigation are admissible in evidence in a
subsequent suit.”). No rule, however, governs whether briefs are admissible as evidence.
Although evidence is relevant if it has “any tendency to make the existence of any fact that
is of consequence more or less probable,” the court may exclude relevant evidence, “if its probative
value is substantially outweighed by a danger of . . . unfair prejudice[.]” FRE 403. Briefs filed in
another case create a danger of unfair prejudice, because they are advocacy. Cf. Dartez v. Owens-
Illinois, Inc., 910 F.2d 1291, 1293 (5th Cir. 1990), cert. denied, 504 U.S. 955 (1992) (“Because . .
. briefs are restricted to the facts in the record, characterizing a brief’s summary of record facts as
an admission ‘is bound to be uncertain in the best of circumstances and dangerously misleading in
most others.’”) (citation omitted); see also Kassel v. Gannett Co., Inc., 875 F.2d 935, 952 n. 17
(“[The United States Court of Appeals for the First Circuit] share[s] the reluctance of the [United
States Court of Appeals for the] Fifth Circuit routinely to treat . . . briefs submitted by a party in
one action as evidentiary admissions against that party in another action.”).
For these reasons, the court has determined that PX 612 and PX 613 are not admitted into
evidence.
G. The Government’s Supplementation Request For The Depositions Of John
McColl And James Willacy.
1. The Government’s Argument.
The Government also designated pages 5, 27, 40, and 57–58 from the deposition transcript
of John McColl (PX 706) and pages 95–98 from the deposition transcript of James Willacy, PX
707, as additional deposition page pursuant to RCFC 32(a)(6).16 Gov’t Ex. Obj. at 10.
2. The Oil Companies’ Response.
The Oil Companies’ did not respond to this request.
16
RCFC 32(a)(6) provides: “If a party offers in evidence only part of a deposition, an
adverse party may require the offeror to introduce other parts that in fairness should be considered
with the part introduced, and any party may itself introduce any other parts.”
11
3. Court’s Resolution.
Because the Government’s request was unopposed, the court has determined that PX 706
and PX 707 are supplemented to include the additional pages designated by the Government.17
See Court Exhibit B.
H. The Court’s Rulings Regarding The Government’s February 10, 2016
Objections To Written Testimony.
Most of the evidentiary objections raised in the Government’s February 10, 2016
Objections To Written Testimony have been addressed. Stipulations from the prior litigation are
admissible evidence. Likewise, the Government’s Responses to the Plaintiffs’ Proposed Findings
of Fact are admissible. Accordingly, the Oil Companies’ experts may rely upon those stipulations
and Responses to Proposed Findings of Fact in their direct testimony.
1. The Government’s Argument Regarding Mr. Matthew Low’s Report.
In support of portions of his expert opinion, the Oil Companies’ expert Gregory G. Kipp
relies on and discusses an expert report prepared by a “may call witness” for the Government,
Matthew Low. Gov. Test. Obj. at 17. Mr. Low is an expert on allocation of response costs in
CERCLA matters. Gov. Test. Obj. at 17. Mr. Low’s Report was not proffered by the Government
or the Oil Companies, and is hearsay. Gov. Test. Obj. at 17. Although an expert may rely on
inadmissible evidence to support an opinion, he may do so only when “experts in the particular
field would reasonably rely on those kinds of facts or data in forming an opinion on the subject.”
FRE 703. Therefore, Mr. Kipp can rely on Mr. Low’s Report only if Mr. Kipp is an expert in a
field that would reasonably rely on reports prepared by CERCLA experts. Gov. Test. Obj. at 17.
Mr. Kipp is a geological engineer and geochemist, and does not present himself as an expert who
would reasonably rely on reports prepared by those with CERCLA response cost expertise. Gov.
Test. Obj. at 18.
2. The Oil Companies’ Response.
The Oil Companies respond that “[e]xperts like Mr. Kipp routinely rely upon the analysis
of other experts in the same or closely connected fields.” Pl. Resp. at 20. Furthermore,
[I]t is common in technical fields for an expert to base an opinion in part on what a
different expert believes on the basis of expert knowledge not possessed by the first
expert; and it is apparent from the wording of Rule 703 that there is no general
requirement that the other expert testify as well.
Dura Auto. Sys. Of Indiana, Inc. v. CTS Corp., 285 F.3d 609, 613 (7th Cir. 2002). In short, Mr.
Kipp may rely upon the otherwise inadmissible report of Mr. Low under FRE 703.
These pages were attached as exhibits to the Government’s March 23, 2016 Motion as
17
ECF No. 201-1 (John McColl) and ECF No. 201-2 (James V. Willacy).
12
3. The Court’s Resolution.
An expert may rely upon inadmissible evidence, if experts in the same field reasonably rely
on those kinds of fact or data. See FRE 703.18 The Oil Companies proffered Mr. Kipp as an expert
in geology; geochemistry; environmental chemistry; industrial process chemistry; engineering;
and World War II oil refinery operations. TR 110. Mr. Low was described by the Oil Companies
as an expert in “cost allocation at historical waste sites” (Pl. Resp. at 20), and by the Government
as an expert “on allocation of response costs in CERCLA matters.” Gov. Test. Obj. at 17. The Oil
Companies, however, have not demonstrated how an expert in geology; geochemistry;
environmental chemistry; industrial process chemistry; engineering; and World War II oil refinery
operations “reasonably rely upon” cost allocation expertise.
Therefore, the following portions of Mr. Kipp’s Written Direct Testimony are therefore
inadmissible:
“[T]he Government’s allocation expert has conceded that the sludge resulting
from these processes is directly attributable to avgas production.” PX 17 at
15–16.
“As discussed, the Government’s allocation expert has conceded that the
sludge from treatment of avgas components is ‘directly attributable’ to avgas
production.” PX 17 at 41.
“Mr. Low’s analysis assumes that no significant amount of acid waste was
dumped at McColl after the war.” PX 17 at 83.
In addition, certain portions of Mr. Kipp’s Written Direct Testimony titled “Response to
Matthew Low’s Calculation of Acid Sludge Dumped At the McColl Site Allegedly Generated By
Non-DSC-Contract Avgas” are inadmissible. PX 17 at 113–115, 119–122. The court considers
these portions of Mr. Kipp’s expert testimony as not relevant, because the Government elected not
to call Mr. Low as an expert at trial.
18
FRE 703 states that:
[a]n expert may base an opinion on facts or data in the case that the expert has been
made aware of or personally observed. If experts in the particular field would
reasonably rely on those kinds of facts or data in forming an opinion on the subject,
they need not be admissible for the opinion to be admitted. But if the facts or data
would otherwise be inadmissible, the proponent of the opinion may disclose them
to the jury only if their probative value in helping the jury evaluate the opinion
substantially outweighs their prejudicial effect.
FRE 703.
13
COURT EXHIBIT C
1
2
3
4
5