On the first prong, the field of hazardous waste regulation, the insurance companies argued that, even though the Ninth Circuit had previously held that CERCLA did not foreclose other hazardous waste laws, (661) the combination of CERCLA and HSAA occupied the entire field.
For the second prong of preemption, conflict preemption, the insurance companies asserted that seven particular sections of MERLO conflicted with either CERCLA or HSAA.
First, the court found that MERLO's provision authorizing Lodi to recover for natural damages (671) was not preempted because neither CERCLA nor HSAA abrogated Lodi's proprietary interest in natural resources or its ability to protect these resources by recovering damages.
After looking at CERCLA and HSAA, which both allow contribution claims, the Ninth Circuit found that if the district court on remand found that Lodi was a PRP, then the provisions of MERLO preventing contribution claims against the city would be preempted.
Third, under MERLO the PRP's burden of proof to demonstrate that the harm is divisible is by clear and convincing evidence, (673) while under CERCLA and HSAA the burden is only by a preponderance of evidence.
The Ninth Circuit found that MERLO's provision was not, in fact, less strict than the NCP with regard to the Lodi site and was not in conflict with CERCLA or HSAA.
Sixth, the Ninth Circuit held that Lodi had "independent authority to promulgate information-gathering legislation pursuant to its traditional police powers" and that these powers did not conflict with CERCLA or HSAA.