Opinion ID: 1036612
Heading Depth: 3
Heading Rank: 2

Heading: “Past Owner” Liability

Text: The District Court did not err in finding that the United States Appellees are not “past owners” based on their involvement at the Columbia Aircraft manufacturing site; they are PRPs only because they arranged for the disposal of hazardous substances that may have eventually been released at the JANR warehouse. A party may be liable as a past owner when, “at the time of disposal of any hazardous substance,” it “owned or operated any facility at which such hazardous substances were disposed of.” 42 U.S.C. § 9607(a)(2). CERCLA defines “facility” broadly as: (A) any building, structure, installation, equipment, pipe or pipeline (including any pipe into a sewer or publicly owned treatment works), well, pit, pond, lagoon, impoundment, ditch, landfill, storage container, motor vehicle, rolling stock, or aircraft, or (B) any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located. 26 42 U.S.C. § 9601(9). The District Court found that there were only two relevant “facilities” at which hazardous substances had been disposed in this case—the Litgo Property (as a “site or area”), and the vapor degreasers used to clean the precision parts (as “equipment”). It found that the United States Appellees did not own either of those facilities. The Litgo Appellants raise two challenges to the District Court’s determination. First, they argue that the evidence shows that the government-owned equipment leased by Columbia Aircraft—which clearly falls within the definition of a “facility”—was cleaned using TCE, and this constitutes a disposal of hazardous waste. Second, they claim that the United States Appellees’ ownership of some of the equipment used in Columbia Aircraft’s manufacturing process is sufficient to subject them to ownership liability. The Litgo Appellants’ first challenge is meritless. The District Court found that the precision parts manufactured by Columbia Aircraft were degreased using TCE as a solvent, but it rejected the claim that TCE was used to clean the equipment used in the manufacturing process. The Litgo Appellants’ expert did testify that TCE was commonly used at the time to service electrical motors and other parts of machinery. This testimony, however, was focused on the use of TCE to degrease airplane parts. When asked whether TCE would have been used “on the equipment itself,” the expert responded only that it was a “possibility.” He also testified that other solvents, like acetone, could have been used instead of TCE. Thus, the District Court’s factual determination that there was no direct relationship between the government- 27 owned equipment and the TCE solvents was not clearly erroneous. The Litgo Appellants also claim that the United States Appellees were “owners” of a facility where TCE was disposed during the 1940s because they owned part of a “process installation”—that is, they owned machinery and equipment that was a necessary part of the manufacturing process. In particular, the United States Appellees owned some of the equipment that Columbia Aircraft used to manufacture precision parts, and Columbia Aircraft disposed of TCE when it degreased those parts later in the production process, using separate machinery (vapor degreasers). The Litgo Appellants, relying primarily on United States v. Saporito, 684 F. Supp. 2d 1043 (N.D. Ill. 2010),8 argue that this is enough to subject the United States Appellees to past owner liability. We disagree. 8 The Litgo Appellants also rely on American International Specialty Lines Insurance Co. v. United States, 2010 WL 2635768 (C.D. Cal. June 30, 2010), which states that there need not be evidence that any specific piece of equipment owned by the defendant was responsible for a specific release; “[i]t is enough that the components owned by the defendant were ‘a necessary part’ of the manufacturing process.” Id. at  (citing Saporito, 684 F. Supp. 2d at 1056). However, in American International Specialty Lines, some of the government-owned equipment was directly involved in the release of hazardous waste. For example, the government owned “grinders” that created perchlorate dust, one of the waste products at issue in the case. Id. at −9. These grinders were then cleaned with VOCs, including TCE. Id. 28 Under the Litgo Appellants’ view, if a party owns any equipment used at a manufacturing site, it can be held responsible for the disposal of hazardous waste that occurs at other pieces of equipment elsewhere at the site, as long as the two pieces of equipment are part of the same overarching “process.” This broad definition of facility finds no support in CERCLA. The term “process installation” is not used in CERCLA’s definition of “facility,” although “installation” is mentioned.9 Installation generally means “a thing installed, in particular: a large piece of equipment installed for use.” Concise Oxford American Dictionary 464 (2006); see also Random House Dictionary of the English Language 988 (2d ed. 1987) (defining installation as “something installed, as machinery or apparatus placed in position or connected for use”). It is a physical item: a piece of machinery or equipment that has been installed. This fits well with the other types of “facility” listed in the definition, all of which are physical. See Dole v. United Steelworkers of Am., 494 U.S. 26, 36 (1990) (“[W]ords grouped in a list should be given related meaning.”). The Litgo Appellants’ attempt to define “installation” more conceptually—as a process, potentially made up of various discrete pieces of machinery that may or may not be located near each other or used together—is not supported by the statutory language. 9 “Process installation,” as far as we can tell, is simply a phrase used by the Litgo Appellants’ counsel and expert during the expert’s testimony. See App. 2757. It does not appear in other cases, and the Litgo Appellants do not explain the term’s origin. 29 It may nevertheless be possible for two pieces of equipment to be sufficiently close in relation to each other that they should be considered components in a larger piece of machinery (which may, itself, be “equipment” or an “installation”). See, e.g., Saporito, 684 F. Supp. 2d at 1057 (determining that the party was liable based on ownership of necessary equipment in a plating line). Here, however, the District Court reasonably determined that no such relationship between the government-owned equipment and the vapor degreasers existed. There is no suggestion that the equipment owned by the United States Appellees was in any way attached to the vapor degreaser tanks that disposed of waste or used in close connection with them. The only relationship between the vapor degreasers and the United States Appellees’ equipment is that both were used by Columbia Aircraft to manufacture precision parts. They were not, however, used at the same stage of the production process. Accordingly, we will uphold the determination that there was insufficient evidence to connect the equipment owned by the United States Appellees to the disposal or release of hazardous substances, and that the United States Appellees thus were not past owners under CERCLA.