North Shore Gas Company v. Salomon Inc

Who should assume responsibility for the cost of an environmental cleanup is the first messy question in what is generally a messy business. North Shore Gas Company filed suit in Illinois federal district court and sought a declaration that it was not liable for a remediation that was taking place in Colorado. After denying defendant Salomon Inc’s motion to dismiss or transfer the case, the district court granted summary judgment in favor of North Shore Gas. On appeal, Salomon challenges the district court’s decision to entertain this declaratory judgment action, and then raises arguments which require us to decide whether the equitable doctrine of successor liability applies in the context of CERCLA and how far the doctrine reaches. We affirm the denial of the motion to dismiss or transfer, but reverse the declaration that North Shore Gas cannot be held liable for cleanup costs under the doctrine of successor liability.

I. Background

Beginning in the early part of this century, the S.W. Shattuck Chemical Company (Old Shattuck) operated a mineral ore processing plant in Denver, Colorado (the Denver Site). In 1969, Salomon’s predecessor-in-interest purchased Old Shattuck and renamed it the S.W. Shattuck Chemical Company, Inc. (New Shattuck). From 1969 to 1984, New Shat-tuck operated the Denver Site as a mineral processing facility. Unfortunately, the activities at the Denver Site were not without environmental costs. In 1983, the Environmental Protection Agency (EPA) placed the Site on its national priorities list. In 1992, the EPA ordered New Shattuck, the current owner of the Site, to remove certain hazardous substances. See 42 U.S.C. § 9613(f)(1). Salomon subsequently guaranteed the financial performance of New Shattuck, its wholly-owned subsidiary. At the time of this appeal, remediation costs had exceeded $20 million.

After the EPA charged New Shattuck with liability, the company embarked on a search for entities that might contribute to response costs. It discovered that from 1934 to 1942, North Shore Coke & Chemical Company (the Coke Company) owned 60% of Old Shattuck. In the mid-1930s, the Coke Company had formed North Continent Mines, which mined mineral ores containing vanadium and uranium. North Continent Mines regularly transported radium slimes — a waste product as hazardous as its name suggests — to the Denver Site for processing and disposal.

The Coke Company was incorporated in 1927 by William Baehr, the then-manager (and later president) of the North Shore Gas *646 Company (the Gas Company), which supplied gas to communities around Waukegan, Illinois. In 1928, the Coke Company built a coke oven plant in Waukegan. The Coke Company sold all of the gas generated at the Waukegan plant to the Gas Company, furnishing more than 80% of the Gas Company’s total supply. The Coke Company was also a source of coke for the Gas Company, as well as for other purchasers. The ore processed by Old Shattuck and North Continent Mines was not used to manufacture gas or coke.

From 1927 to 1942, the Coke Company and the Gas Company were closely related entities. Virtually all of the Coke Company’s stock was owned by North Continent Utilities Corporation, a holding company that Baehr formed in 1922; North Continent Utilities also owned 100% of the Gas Company’s common stock and 2.28% of its preferred stock. The financial reports of North Continent Utilities listed the Coke Company and the Gas Company as consolidated subsidiaries. And the Coke and Gas Companies had virtually identical officers and directors. 1 The companies even issued joint bonds, which were secured by a hen on the assets of both companies. In 1940, a consultant deftly summarized the companies’ connection:

The actual operations of the properties are interdependent. One is dependent on the other as a source of supply. One company is dependent on the other as a market for one of its primary products. Neither company, from a practical standpoint, can operate without the other. Broadly speaking, the two companies represent a single business enterprise.

As a consequence of the purchase and sale contract and the [bonds], each company is as concerned with the solvency of the other as it is with its own. Therefore, each is subject to a risk largely beyond the control of the Board of Directors of the particular company. Perhaps the success of this involved situation in the past is largely due to the fact that both companies are controlled by the same interests, operated by a single management, and considered from an operating viewpoint largely as a single business enterprise.

Duff & Phelps Rep. at 113-14 (Aug. 1, 1940). The Coke and Gas Companies thus shared far more than the typical arms-length relationship of most purchasers and suppliers.

This happy union began to unravel in 1940. The companies were facing financial difficulties, since they anticipated that they would be unable to redeem the joint bonds that were due to mature in 1942. In addition, the dividend requirements of the Gas Company’s preferred stock were exceeding the company’s earning ability. And a committee representing the preferred stockholders of the Gas Company had asserted various mismanagement claims against the Coke Company, North Continent Utilities and Baehr. The Coke Company had also run afoul of the Public Utility Holding Company Act of 1935, 15 U.S.C. § 79(k), which sought to eliminate nonutility investments from the utility system. In an effort to address these difficulties, the Coke and Gas Companies submitted a “Plan of Reorganization” to the Securities and Exchange Commission in 1941 (the 1941 Plan). Under the Plan, the Coke Company sold all of its assets to the Gas Company— except the stock in North Continent Mines and Old Shattuck, certain debt owed to the Coke Company and $45,000 in cash — in exchange for shares of the Gas Company. The Coke Company transferred its interest in Old Shattuck and North Continent Mines to North Continent Utilities. The Plan also settled all mismanagement claims by the preferred shareholders, refunded the bonds issued by the Gas and Coke Companies, and recapitalized the Gas Company so that it had only a single class of stock (common).

*647 When New Shattuck went looking for parties to contribute to CERCLA costs, it discovered that the Coke Company was liquidated in 1942, pursuant to the 1941 Plan. North Continent Utilities dissolved in 1954. So New Shattuck seized on North Shore Gas — the only company remaining from the once formidable triumvirate — and demanded that it help pay for the cost of cleaning up the Denver Site. Eventually North Shore Gas filed an action against Salomon in an Illinois federal district court, seeking a declaration that it was not liable for remediation costs associated with the Site. Salomon filed a motion to dismiss or, in the alternative, to transfer the case to Colorado. After the district court denied the motion, North Shore Gas and Salomon filed cross motions for summary judgment. The court granted North Shore Gas’ motion and denied Salomon’s.

II. Motion to Dismiss or Transfer Venue

The Declaratory Judgment Act provides that “any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a). As is apparent from the use of the word “may,” the Act does not obligate courts to issue declaratory judgments. Instead, district courts have wide discretion to decline to hear such actions. See In re VMS Securities Litigation, 103 F.3d 1317, 1327 (7th Cir.1996) (collecting cases). Salomon argues that the district court should have exercised this discretion and dismissed the complaint on the grounds that North Shore Gas raced to the courthouse and forum-shopped. We review de novo the district court’s decision to allow the action to proceed. See id. (noting a split in the circuits over the proper standard and that the Seventh Circuit has settled on de novo review).

Salomon correctly argues that district courts should decline to hear declaratory judgment actions that have been filed in an attempt to manipulate the judicial process. See Tempco Elec. Heater Corp. v. Omega Eng’g, Inc., 819 F.2d 746, 750 (7th Cir.1987). However, this action cannot properly be characterized in such negative terms. On January 31, 1994,- New Shattuck’s attorney sent North Shore Gas a letter demanding reimbursement and indemnification for CERCLA cleanup costs. The letter explained that New Shattuck was Salomon’s wholly-owned subsidiary and that Salomon had provided financial assurance to the EPA. Representatives of North Shore Gas, New Shattuck and Salomon then attended two settlement meetings — one on April 27, 1994, and the other on November 2, 1994. At the end of the second meeting, Salomon’s attorney stated that litigation was inevitable, but did not say which entities would be involved or where the litigation would take place. Approximately one month later, North Shore Gas filed this action in Illinois. Notwithstanding Salomon’s arguments to the contrary, North Shore Gas cannot be described as “racing to the courthouse.” Settlement negotiations had reached an impasse after an eleven-month effort, and Salomon and New Shattuck had been afforded ample opportunity to file their own suit. And while Salomon would have us believe that North Shore Gas filed the suit to avoid litigating in Colorado, we do not believe that North Shore Gas engaged in such “blatant” forum shopping. Because there were genuine questions— which are not relevant here — about whether a Colorado court could exercise personal jurisdiction over North Shore Gas, it was not immediately apparent that Salomon and New Shattuck would file suit there. In sum, the district court did not err when it allowed North Shore Gas to clarify its obligations by means of a declaratory judgment action.

Salomon additionally argues that the district court should have dismissed the action because New Shattuck, an allegedly indispensable party, was not part of the case. 2 Rule 19 sets forth a two-part test for ascertaining whether a party is in fact “indispensable.” First, the court must determine (1) if in the person’s absence, complete relief cannot be accorded among those who are already parties, or (2) if the person claims an interest relating to the subject of the action *648 and is so situated that disposition of the action in its absence may (i) impair or impede its ability to protect that interest, or (ii) leave any of the persons already joined subject to a substantial risk of incurring multiple or otherwise inconsistent obligations. See Fed. R.Civ.P. 19(a). If the court concludes that one of the criteria of Rule 19(a) is satisfied, it then decides “whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed.” Fed.R.Civ.P. 19(b). A party is “indispensable” only if the court finds, after a Rule 19(b) inquiry, that the action cannot proceed in its absence. See Moore v. Ashland Oil, Inc., 901 F.2d 1445, 1447 (7th Cir.1990). Here the district court concluded that New Shattuck did not even meet the threshold criteria of Rule 19(a).

To date this circuit has declined to decide whether a de novo or abuse of discretion standard governs review of a Rule 19 determination. See United States ex rel. Hall v. Tribal Dev. Corp., 100 F.3d 476, 478 (7th Cir.1996) (collecting eases). Today we may again postpone that decision, since the district court’s ruling withstands either degree of scrutiny. While Salomon argues that “a judgment entered in the case without Shattuck might be prejudicial to Shattuck,” Appellant’s Br. at 46 (citation and internal quotation marks omitted), Salomon fails to adequately explain why this is so. New Shattuck ceased business operations in 1986 and is bereft of funds. Salomon has assumed responsibility for the costs of remediation. The interests of New Shattuck and Salomon are therefore virtually identical — both want North Shore Gas to contribute to the cost of cleanup. And because New Shattuck is Salomon’s wholly-owned subsidiary, any harm to New Shattuck would most likely mean harm to Salomon as well. Because Salomon’s “motives and ability to defend” mirror that of New Shattuck, there is no risk that New Shattuck will be unfairly prejudiced. See Pujol v. Shearson Am. Express, Inc., 877 F.2d 132, 135 (1st Cir.1989). Accordingly, the district court did not err when it denied Salomon’s motion to dismiss. 3

III. Successor Liability Under CERCLA

Having determined that the action was properly before the district court, we next turn to the grant of summary judgment in favor of North Shore Gas and the question of successor liability. As will become clear, in the discussion that follows we reverse the district court and conclude that North Shore Gas succeeded to the Coke Company’s direct CERCLA liabilities. But we are assuming arguendo, as did the district court, that the Coke Company incurred CERCLA liability as an operator of Old Shattuck and North Continent Mines. See 42 U.S.C. § 9607(a)(2). Given CERCLA’s prohibition on transferring liability (in the absence of an indemnification agreement or similar arrangement), the Coke Company would be unable to divest itself of this direct Lability by conveying the “dirty” businesses to North Continent Utilities. See 42 U.S.C. § 9607(e); Harley-Davidson, Inc. v. Minstar, Inc., 41 F.3d 341, 342, 343 (7th Cir.1994); John S. Boyd Co. v. Boston Gas Co., 992 F.2d 401, 405 (1st Cir.1993). The Coke Company’s liability, however, is by no means a foregone conclusion. See United States v. Bestfoods, — U.S. -,-, 118 S.Ct. 1876, 1887, 141 L.Ed.2d 43 (1998) (explaining that a parent corporation incurs direct liability only if it manages, directs or conducts the operations of the subsidiary’s facility that are specifically related to pollution). On remand, the district court will have to determine whether the Coke Company was in fact an “operator”- — or in other words, whether there were *649 any CERCLA liabilities to which North Shore Gas could succeed. 4

Whether a successor corporation may be liable for the cost of a CERCLA cleanup is a question of first impression in this circuit. The issue is not resolved by the plain language of CERCLA, which imposes liability on “covered persons.” 42 U.S.C. § 9607(a); see also § 9613(f)(1) (“[a]ny person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title”); § 9618(f)(3)(B) (“[a] person who has resolved its liability to the United States or a State ... in an administrative or judicially approved settlement may seek contribution from any [potentially liable person]”). As the Third Circuit has noted, it is unsurprising that “as a hastily conceived and briefly debated piece of legislation,” CERCLA fails to expressly address corporate successor liability. Smith Land & Improvement Corp. v. Celotex Corp., 851 F.2d 86, 91 (3d Cir.1988). However, every circuit confronted with the question has determined that Congress intended successor liability to apply in the context of CERCLA. See B.F. Goodrich v. Betkoski, 99 F.3d 505 (2d Cir.1996); John Boyd, supra; United States v. Carolina Transformer Co., 978 F.2d 832 (4th Cir.1992); United States v. Mexico Feed & Seed Co., 980 F.2d 478 (8th Cir.1992); Anspec Co. v. Johnson Controls, Inc., 922 F.2d 1240 (6th Cir.1991); Louisiana-Pacific Corp. v. Asarco, Inc., 909 F.2d 1260 (9th Cir.1990), overruled on other grounds by Atchison, Topeka & Santa Fe Ry. Co. v. Brown & Bryant, 132 F.3d 1295 (9th Cir.1997); Smith Land, supra. The reasoning of our fellow circuits is persuasive.

CERCLA defines “person” as an “individual, firm, corporation, association, partnership, consortium, joint venture, [or] commercial entity.” 42 U.S.C. § 9601(21). Congress has directed the judiciary to apply certain rules of construction to the United States Code; one is that when the word “company” or “association” is used “in reference to a corporation, [it] shall be deemed to embrace the words ‘successors and assigns of such company or association.’ ” 1 U.S.C. § 5. This rule of construction lends credence to the notion that, when Congress defined “person” by listing a variety of terms that apply to business entities, it “intended to include all known forms of business and commercial enterprises.” Anspec, 922 F.2d at 1247; see Mexico Feed, 980 F.2d at 486. Indeed, successor liability is so well-established in corporate doctrine that the Eighth Circuit has suggested Congress would have to explicitly exclude successor corporations if it intended to place them beyond CERCLA’s reach. See Mexico Feed, 980 F.2d at 486; cf. Bestfoods, — U.S. at ---, 118 S.Ct. at 1884-85 (explaining that CERCLA was not intended to rewrite the common law doctrine of piercing the corporate veil).

This statutory construction comports with the purposes of CERCLA. When Congress enacted CERCLA, it enabled the federal government to provide an efficacious response to environmental hazards and to assign the cost of that response to the parties who created or maintained the hazards. See Anspec, 922 F.2d at 1247. Accordingly, Congress was unlikely to leave a loophole that would enable corporations to die “paper deaths, only to rise phoenix-like from the ashes, transformed, but free of their former liabilities.” Mexico Feed, 980 F.2d at 487; see Betkoski, 99 F.3d at 519. Moreover, there is no concern — at least theoretically— about punishing the successor for the acts (or *650 omissions) of the predecessor; CERCLA is a remedial measure which is aimed only at correcting environmentally dangerous conditions. See Smith Land, 851 F.2d at 91. And holding the successor corporation liable for the cost of cleanup is not necessarily unfair, since the successor and its shareholders likely will have derived some benefit from the predecessor’s use of the pollutant and the savings that resulted from the hazardous disposal methods. We therefore reach the same result as the other circuits that have considered this issue — that Congress intended the equitable doctrine of successor liability to apply under CERCLA. We note, however, that while CERCLA permits successor liability, it does not require it “unless justified by the facts of each case.” Carolina Transformer, 978 F.2d at 837; see also Chicago Truck Drivers, Helpers and Warehouse Workers Union Pension Fund v. Tasemkin, Inc., 59 F.3d 48, 49 (7th Cir.1995) (“Successor liability is an equitable doctrine, not an inflexible command-”).

Most circuits which have construed CERC-LA to incorporate successor liability have concluded that the parameters of the doctrine should be fashioned by federal common law. See Betkoski, 99 F.3d at 519; Carolina Transformer, 978 F.2d at 837-38; Smith Land, 851 F.2d at 92; see also Mexico Feed, 980 F.2d at 487 n. 9 (declining to decide whether federal common law or state law supplied the rule of decision, but noting that the district court was probably correct in relying on federal common law). Of course, the mere fact that CERCLA is a federal statute does not dictate that “the federal courts should fashion a uniform federal rule,” since “[f]requently state rules of decision will furnish an appropriate and convenient measure of the governing federal law.” Atchison, Topeka & Santa Fe Ry. Co. v. Brown & Bryant, 132 F.3d 1295, 1299 (9th Cir.1997). But most circuits have decided that resort to federal common law is warranted because of the need for national uniformity with respect to CERCLA, and the possibility that parties would frustrate the aims of CERCLA by choosing to merge or consolidate under the laws of states “which unduly restrict successor liability.” Smith Land, 851 F.2d at 91.

Until recently, only the Sixth Circuit had concluded that state law provided the rule of decision for successor liability under CERCLA. See Anspec, 922 F.2d at 1248. The Ninth Circuit, however, recently overruled one of its prior decisions and held that it would look to the law of the relevant state to decide issues of successor liability. See Atchison, 132 F.3d at 1301-02, overruling Louisiana-Pacific Corp. v. Asarco, Inc., 909 F.2d 1260 (9th Cir.1990). The Ninth Circuit explained that two recent Supreme Court decisions, O’Melveny & Myers v. FDIC, 512 U.S. 79, 114 S.Ct. 2048, 129 L.Ed.2d 67 (1994) and Atherton v. FDIC, 519 U.S. 213, 117 S.Ct. 666, 136 L.Ed.2d 656 (1997), “call[ed] into question the ease with which Louisiana-Pacific created a set of federal rules for successor liability under CERCLA.” Atchison, 132 F.3d at 1299. Because CERCLA does not clearly indicate that Congress intended the judiciary to formulate federal common law, the three-part test established in United States v. Kimbell Foods, 440 U.S. 715, 99 S.Ct. 1448, 59 L.Ed.2d 711 (1979), determines whether federal common law is appropriate. Kimbell Foods requires a court to decide (1) whether the issue requires “a nationally uniform body of law”; (2) “whether application of state law would frustrate specific objectives of the federal programs”; and (3) whether “application of a federal rule would disrupt commercial relationships predicated on state law.” Kimbell Foods, 440 U.S. at 728-29, 99 S.Ct. 1448. After the Ninth Circuit revisited these three factors with the benefit of O’Melveny and Atherton, it concluded that it had erred in fashioning federal common law to resolve CERCLA successor liability claims. See Atchison, 132 F.3d at 1300-01 (noting that state law is largely uniform and that there is no reason to think that a state will change its law to become a haven for liable companies).

Here the district court decided that federal common law applied to the dispute between Salomon and North Shore Gas. On appeal, both parties have neglected to brief the issue and seemingly assume that federal common law applies. Although we recognize that we have “the independent power to identify and apply the proper construction of governing law,” Kamen v. Kemper Fin. Servs., Inc., 500 *651 U.S. 90, 99, 111 S.Ct. 1711, 114 L.Ed.2d 152 (1991), we think it prudent to.reserve the choice-of-law question until we are confronted with a case in which the parties have argued the issue. Cf. Bestfoods, — U.S. at -n. 9, 118 S.Ct. at 1885-86 n. 9 (declining to decide whether federal common law or state law applies to corporate veil piercing under CERCLA). Accordingly, like North Shore Gas and Salomon, we approach this case on the assumption that federal common law supplies the rule of decision. See Sharpe v. Jefferson Distrib. Co., 148 F.3d 676, 677-78 (7th Cir.1998).

IV. The Potential Successor Liability of North Shore Gas

The intuitive response to the question of North Shore Gas’ liability might be that as a result of the 1941 Plan, North Continent Utilities — not North Shore Gas— received Old Shattuck and North Continent Mines, and that therefore any liability should succeed to North Continent Utilities. But remember that we are assuming that the Coke Company incurred direct CERCLA liability as a result of its activities with respect to Old Shattuck and North Continent Mines. Thus the question that we address in the following discussion is not whether North Shore Gas incurred responsibility for the liabilities of Old Shattuck and North Continent Mines, but instead whether North Shore Gas succeeded to the direct Labilities of the Coke Company. As we explain, the answer to this question is yes. On remand, of course, the district court will have to explore whether such direct liability actually exists.

The general rule is that an asset purchaser such as the Gas Company does not acquire the liabilities of the seller. There are, however, four exceptions to this general rule: (1) the purchaser expressly or impliedly agrees to assume the liabilities; (2) the transaction is a de facto merger or consolidation; (3) the purchaser is a “mere continuation” of the seller; or (4) the transaction is an effort to fraudulently escape liability. See, e.g., Betkoski, 99 F.3d at 519; Carolina Transformer, 978 F.2d at 838; Vernon v. Schuster, 179 Ill.2d 338, 228 Ill.Dec. 195, 688 N.E.2d 1172, 1175-76 (1997). Salomon argues that North Shore Gas is hable under the first, second and third exceptions. The district court, however, decided that none of these exceptions applied and granted summary judgment to North Shore Gas. We review this decision de novo. See National Soffit & Escutcheons, Inc. v. Superior Sys., Inc., 98 F.3d 262, 265 (7th Cir.1996) (reviewing grant of summary judgment where district court applied the equitable doctrines of successor liability and piercing the corporate veil).

The successor liability doctrine serves the purpose of identifying transactions where the essential and relevant characteristics of the selling corporation survive the asset sale, and it is therefore equitable to charge the purchaser with the seller’s Labilities. This overall purpose has particular import for an asset sale such as this one, which was undertaken pursuant to the Holding Company Act and essentially reorganized what “represented] a single business enterprise,” see Duff & Phelps Rep. at 114. In this situation, identity between what entered the transaction and what emerged from it is much more Lkely than in an asset sale between strangers. Cf. Chaveriat v. Williams Pipe Line Co., 11 F.3d 1420, 1424 (7th Cir.1993) (“If, however, the ‘sale’ is simply a corporate reorganization that leaves real ownership unchanged, the liabihties go with the assets.”); see also Tasemkin, 59 F.3d at 49. Stated sLghtly differently, when an asset purchase is more properly described as a reorganization, the “purchaser” will find it difficult to escape liability, because one or more of the successor liabiLty exceptions will suggest that the seUer has survived the sale. As will become apparent, here the transaction between the Coke and Gas Companies effectuated some changes — most obviously the conveyance of the Denver properties to North Continent Utilities. None of these changes, however, diminished the essential identity between what entered and what emerged from the 1941 Plan — a gas utility corporation serving the Waukegan area and controlled by North Continent UtiLties and the Baehr family.

Turning to the exceptions themselves, we agree with the district court that *652 the Gas Company did not agree to assume the Coke Company’s direct CERCLA liabilities. It is well-established that state law determines the rules of contract interpretation, even in the context of CERCLA. See John Boyd, 992 F.2d at 406 (collecting cases); see also LaSalle Nat’l Trust v. ECM Motor Co., 76 F.3d at 140, 144 (7th Cir.1996); GNB Battery Techs., Inc. v. Gould, Inc., 65 F.3d 615, 621 (7th Cir.1995). Illinois law requires the court to give effect to the parties’ intent at the time the agreement was made. See LaSalle, 76 F.3d at 144. If the terms of the contract are unclear, the court must ascertain the parties’ intent solely from the contract itself. If the terms of the contract are ambiguous, however, “the resolution of the ambiguity becomes a question of fact, to be decided by the trier of fact.” See id. at 144-45.

Here we can probably ascertain the intent of the Gas and Coke Companies from the terms of the 1941 Plan alone. While a contract may contemplate CERCLA liability even if it was drafted before passage of the statute, see Kerr-McGee Chemical v. Lefton Iron & Metal Co., 14 F.3d 321, 327 (7th Cir.1994), parties also may structure agreements so as not to touch upon such liabilities, see John Boyd, 992 F.2d at 406-07; cf. South Bend Lathe, Inc. v. Amsted Indus., Inc., 925 F.2d 1043, 1044 (7th Cir.1991). The 1941 Plan provided that the Gas Company “shall take said business, properties and contract and other rights subject to all Kens, claims, and charges thereon, and shall assume liabilities and obligations of every kind and' character (other than the Debentures and interest thereon, hereinafter mentioned) of the [Coke] Company accrued to or existing on the date of transfer.” Plan at § 8 (emphasis added). The use of the word “existing” “fairly obviously forecloses the possibiKty that [the purchaser] agreed to assume any contingent liabihties, much less the environmental liabilities at issue here.” John Boyd, 992 F.2d at 407; cf. Gopher Oil Co. v. Bunker, 84 F.3d 1047, 1052 (8th Cir.1996). As for the use of “accrued to,” Black’s Law Dictionary states that it means “due and payable; vested.” Black’s Law Dictionary 20 (6th ed.1990). Merriam Webster’s defines “accrue” as “to come into existence as a legally enforceable claim.” Merriam Webster’s Collegiate Dictionary 8 (10th ed.1994). The plain language of the 1941 Plan thus suggests that the Gas Company did not intend to assume the liability at issue here. 5 And even if the coupling of “accrued to” and “existing” creates ambiguity about whether the parties intended the terms to have different meanings, the district judge rightly determined that the extrinsic evidence demonstrates that the Gas Company did not intend to assume the sort of liability created by CERCLA. See North Shore Gas Co. v. Salomon, Inc., 963 F.Supp. 694, 701-02 (N.D.Ill.1997).

With respect to the de facto merger exception, although the approach of the district court is understandable, we think an analysis giving more weight to the two statutes that form the backdrop of this case — the Holding Company Act and CERCLA — is in order. As the district court recognized, two of the requirements for a de facto merger are that “there is a continuation of the enterprise of the seller in terms of ... management, personnel, physical location, assets and operations” and that “the purchasing corporation assumes the obKgations of the seller necessary for uninterrupted continuation of business operations.” 6 Louisiana-Pacific, *653 909 F.2d at 1264. The Holding Company Act — one of the primary reasons the companies entered into the Plan — sought to “limit the operations of holding companies] ... to a single integrated public-utility system, and to such other businesses as are reasonably incidental, or economically necessary or appropriate to the operations of such integrated public-utility system.” 15 U.S.C. § 79k(b)(l). The Gas Company therefore did not assume (and could not assume) the Coke Company’s nonutility assets — Old Shattuck and North Continent Mines. 7 Thus, taking a narrow view, the de facto merger exception might not be available because a federal statute, the Holding Company Act, required divestment of the mining businesses. Or, put slightly differently, compliance with the Holding Company Act might effectively defeat ■ CERCLA liability, since the Holding Company Act requires the divestment that may make the de facto merger exception inapplicable. This result would be unsatisfactory for two reasons.

The first relates to what actually happened as a result of the 1941 Plan. If we abandon a “slavish adherence to multi-factor tests” — as North Shore Gas actually encourages us to do, see Appellee’s Br. at 31 — the transaction between the Coke and Gas Companies strongly resembles a de facto merger. Before the 1941 Plan, the Coke and Gas Companies were in effect two divisions of the same utility business. See Duff and Phelps Rep. at 114 (the two companies “[b]roadly speaking ... represented] a singl