dissenting:

With all respect, I cannot agree with two major conclusions reached by the majority. In my view, plaintiff’s attorneys’ fees are properly recoverable under section 107(a)(4)(B) and the amended version of section 101(25) of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. §§ 9607 (a)(4)(B) and 9601(25). In addition, I would not reserve the district court’s establishment of an escrow fund, nor would I reach the question of that court’s power to create such a fund, because I believe that this issue was never properly raised by the defendants in the district court. 1

*1023 Attorneys’ Fees

The plaintiff, Stanton Road, owns land that the defendants contaminated by repeated discharges of perchlorethelene over a period of years. Accordingly, Stanton Road is entitled under section 107(a)(4)(B) of CERCLA to recover from the defendants its “necessary costs of response.” When CERCLA was first enacted, “response” was defined in section 101(25), 42 U.S.C. § 9601 (25), as follows: “ ‘respond’ or ‘response’ means remove, removal, remedy, and remedial action.” Had this case arisen between 1980 and 1986, then, Stanton Road would have been entitled to recover its “costs of remedial action.” Those recoverable costs might reasonably have been interpreted to be only those incurred in the physical cleanup of the site.

In 1986, however, Congress enacted the Superfund Amendment and Reauthorization Act, which amended section 101(25) of CERCLA to provide: “The terms ‘respond’ or ‘response’ means remove, removal, remedy, and remedial action, all such terms (including the terms ‘removal’ and ‘remedial action’) include enforcement activities related thereto.” (Emphasis added). In the scheme of CERCLA, this language must mean that private plaintiffs can recover the attorneys’ fees expended in enforcing the liabilities that CERCLA imposes on polluters.

CERCLA is to a large degree a machine driven by private litigation or the threat of it. As the plurality opinion of the Supreme Court in Pennsylvania v. Union Gas Co., 491 U.S. 1 , 109 S.Ct. 2273 , 105 L.Ed.2d 1 (1989), observed:

Id. at 21-22 , 109 S.Ct. at 2285 . Thus our court has not hesitated to characterize private actions under section 107 of CERCLA as “private enforcement actions.” Wickland Oil Terminals v. ASARCO, Inc., 792 F.2d 887, 892 (9th Cir.1986); Cadillac Fairview/California, Inc. v. Dow Chemical Co., 840 F.2d 691, 694 (9th Cir.1988).

When Congress amended CERCLA to permit such private litigants, among others, to recover the “costs” of “enforcement activities,” it is difficult to imagine what it might have had in mind other than the recovery of attorneys’ fees. The “enforcement” of CERCLA by a private party consists in suing to hold the polluter liable. The lion’s share of the enforcement cost, as opposed to cleanup cost, will lie in attorneys’ fees. Congress cannot have been ignorant of that fact. A private party simply cannot recover its cost of enforcement if it cannot recover its attorneys’ fees. If the language of Congress in sections 107(a)(4)(B) and 101(25) is to be given meaning and effect, those fees must be recoverable.

This is the conclusion reached by the only other circuit to have addressed the question. 2 In General Electric Co. v. Litton Industrial Automation Systems, Inc., 920 F.2d 1415 (8th Cir.1990), the Eighth Circuit ruled:

Id. at 1422 .

The majority here resists reading “costs” of “enforcement activities” to include attorneys’ fees because Congress elsewhere has used the phrase “attorneys’ fees” or, less explicitly, “legal costs.” Of course it would have made our task easier if Congress had used the term “attorneys’ fees” in its amendment to section 101(25). But Congress is not confined to a particular linguistic formula; it need only manifest its clear intention to permit the litigant to recover fees. As the Eighth Circuit convincingly demonstrated, Congress has done so in the 1986 amendments to CERCLA.

The majority invokes the “American rule” upheld in Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 247 , 95 S.Ct. 1612, 1616 , 44 L.Ed.2d 141 (1975), and Runyon v. McCrary, 427 U.S. 160, 182-86 , 96 S.Ct. 2586, 2600-02 , 49 L.Ed.2d 415 (1976), but that is a rule requiring each party to bear its own attorneys’ fees when Congress has not otherwise declared its intent. In Alyeska, the statute in issue said nothing remotely touching upon fees; the Court rejected the proposition that fee awards should follow from the fact that Congress had authorized private lawsuits. Alyeska, 421 U.S. at 263 , 95 S.Ct. at 1624 . In Runyon , the governing statute merely authorized the federal courts to apply the common law when federal law failed “to furnish suitable remedies.” Runyon, 427 U.S. at 184 , 96 S.Ct. at 2601 . Alyeska and Runyon provide the rule when Congress has not indicated an intent; those two cases should not be construed to create a presumption against the award of fees that Congress can only overcome by the use of particular language.

I would give the natural contextual meaning to “costs” of “enforcement activities” and hold that those terms authorize the recovery of Stanton Road’s attorneys’ fees. In so doing, I would avoid the frustration of Congress’s purpose of stimulating private cleanup efforts, and would also avoid an unnecessary conflict between circuits.

Escrow Fund

I find in the record no hint that the defendants objected to the creation of an escrow fund from which disbursements would be made as future cleanup costs were incurred. Indeed, the statements of both sides in district court indicated that they contemplated the establishment of some such fund. I would not now entertain an objection raised by defendants that was not presented to the district court.

It is true, as the majority opinion states, that we may consider issues raised for the first time on appeal “if the issue is one of law and the pertinent record has been fully developed.” United States v. Gabriel, 625 F.2d 830, 832 (9th Cir.1980) (emphasis added). In my view, the record in this case is anything but fully developed on the question of the propriety of an escrow fund to cover future cleanup costs. Because the parties did not dispute the issue, there is no evidence regarding alternatives to such a fund, or the necessity for it in this case, or the alternative methods of ensuring that disbursements will be for necessary expenses only and will be “consistent with the national contingency plan” as required by section 107(a)(4)(B).

The majority has ruled that the district court erred in setting up the escrow fund because that required the defendants to pay damages for cleanup costs that Stanton Road had not yet incurred. But the disbursements were not to be made from the escrow fund until after the costs had been incurred. The majority apparently concludes nonetheless that such an arrangement runs afoul of our holding in Dant & Russell v. Burlington N. R.R. Co., 951 F.2d 246 (9th Cir.1991), that plaintiffs *1025 must “actually incur response costs before they can recover them.” Id. at 250 . But Dant & Russell involved a flat award for future response costs. In holding that costs could not be recovered before they were incurred, we said:

Id. Here the escrow arrangement was based on far more than mere assertions of intended cleanup. The arrangement may be sufficiently concrete to satisfy the definition of costs “incurred.” If it is not, the fault is with the defendants. Had they raised an objection to the escrow arrangement in district court, the escrow conditions could have been modified to require the kind of commitment to cleanup that might well be deemed to render the costs “incurred.”

CERCLA is relatively new legislation, and our experience with it is still unfolding. Escrow arrangements to cover cleanup costs may prove to be a useful device in effectuating Congress’s purposes, particularly when there is a question concerning the continued solvency of the liable polluter. I would not hastily rule out the use of such a tool unless I were convinced that the statute forbade it. I can reach no such conclusion on this scanty record. The issue, I submit, should have been left for a later day, when the parties have properly framed it. Here it has been waived; I would affirm the district court.

. I agree with the majority’s conclusion that the case is not moot, and with its treatment of the validity of the damages award under state law.

. The question whether private parties could recover litigation costs under section 107(a)(4)(B) was recently presented to the Tenth Circuit, but that court declined to address that broad question. See United States v. Hardage, 982 F.2d 1436, 1447 (10th Cir.1992). It affirmed a denial of the fees on the narrower ground that the district court had not erred in its factual determination that the litigation costs had not been necessary. Id. at 1447-48 .