Opinion ID: 775487
Heading Depth: 2
Heading Rank: 1

Heading: cercla overview

Text: 17 CERCLA generally imposes strict liability on owners and operators of facilities at which hazardous substances were disposed. 3550 Stevens Creek Assocs. v. Barclays Bank, 915 F.2d 1355, 1357 (9th Cir. 1990). To achieve that end, CERCLA authorizes private parties to institute civil actions to recover the costs involved in the cleanup of hazardous wastes from those responsible for their creation. Id.; accord Pinal Creek Group, 118 F.3d at 1300 (Section 107(a) . . . authorizes suits against certain statutorily defined`responsible parties' to recover costs incurred in cleaning up hazardous waste disposal sites.) (internal quotation marks and citation omitted). 18 To prevail in a private cost recovery action, a plaintiff must establish that (1) the site on which the hazardous substances are contained is a facility  under CERCLA's definition of that term, Section 101(9), 42 U.S.C. &#167 9601(9); (2) a release or threatened release of any hazardous substance from the facility has occurred, 42 U.S.C. &#167 9607(a)(4); (3) such release or threatened release has caused the plaintiff to incur response costs that were necessary and consistent with the national contingency plan, 42 U.S.C. &#167 &#167 9607(a)(4) and (a)(4)(B); and (4) the defendant is within one of four classes of persons subject to the liability provisions of Section 107(a). 19 3550 Stevens Creek Assocs., 915 F.2d at 1358 (footnote omitted). The third and fourth of these elements are at issue here. 20 With respect to the fourth element, 42 U.S.C. &#167 9607(a) sets out the four classes of persons subject to the liability provisions. Id. Those persons are potentially responsible parties or PRPs. See Pritikin v. Dep't of Energy, 254 F.3d 791, 795 (9th Cir. 2001). We must decide in this case whether the Partnership Defendants fit within the second PRP category; namely, whether they owned the contaminated property at the time of disposal of any hazardous substance. 42 U.S.C. &#167 9607(a)(2). 21 Also relevant to our analysis, although not the basis of the judgment here, is the fact that even if the plaintiff establishes the requisite four elements for recovery, a defendant may assert a variety of defenses to liability. Most relevant here are the so-called third party and innocent landowner defenses, by which a PRP may show that the release of hazardous substances was caused solely by an act or omission of a third party, 42 U.S.C. &#167 9607(b)(3), or that the disposal or placement of the hazardous substance occurred before the PRP acquired the property. 42 U.S.C. &#167 9601(35)(A). In this way, the interpretation of disposal affects the application of these defenses. See infra section III.B.2.b. 22 Once liability is established, the defendant may avoid joint and several liability by establishing that it caused only a divisible portion of the harm--for example, it contributed only a specific part of the hazardous substances that spilled. Even if a defendant cannot do so, it may seek contribution from other PRPs under 42 U.S.C. &#167 9613(f)(1). See Pinal Creek Group, 118 F.3d at 1300 (noting that Congress's amendment of CERCLA to include &#167 9613(f)(1) clarif[ies ] and confirm[s] that contribution is available to PRPs). A PRP's contribution liability will correspond to that party's equitable share of the total liability and will not be joint and several.  Id. at 1301. The contribution provision aims to avoid a variety of scenarios by which a comparatively innocent PRP might be on the hook for the entirety of a large cleanup bill. 23 II. GENUINE ISSUES OF MATERIAL FACT PRECLUDE SUMMARY JUDGMENT ON WHETHER THE RESPONSE COSTS WERE NECESSARY 24 Remediation costs are recoverable under CERCLA only if necessary. It is generally agreed that this standard requires that an actual and real threat to human health or the environment exist before initiating a response action. See, e.g., EPA v. Sequa Corp. (In re Bell Petroleum Serv., Inc.), 3 F.3d 889, 905-06 (5th Cir. 1993); Southfund Partners III v. Sears, Roebuck & Co., 57 F. Supp. 2d 1369, 1378 (N.D. Ga. 1999); Foster v. United States, 922 F. Supp. 642, 652 (D.D.C. 1996); Yellow Freight Sys., Inc. v. ACF Indus., Inc., 909 F. Supp. 1290, 1299 (E.D. Mo. 1995); G.J. Leasing Co. v. Union Elec. Co., 854 F. Supp. 539, 561-62 (S.D. Ill. 1994), aff'd, 54 F.3d 379, 386 (7th Cir. 1995). 25 Although the district court correctly referenced this standard, it went on to follow the ulterior motive  analysis established by the district court in G.J. Leasing Co., 854 F. Supp. at 562. There, the court held that, to the extent cleanup activities are taken for reasons other than because of an actual and real public health threat, cleanup costs are not necessary. Id. Because there was evidence in G.J. Leasing that the cleanup of asbestos contamination was motivated by business reasons (specifically, the desire to convert the property to new uses), the court held that the cleanup costs were not necessary. Accord Foster, 922 F. Supp. at 652-53; Yellow Freight Sys., 909 F. Supp. at 1299. 26 In concluding that Carson Harbor's response costs were not necessary, the district court relied on G.J. Leasing's ulterior motive analysis. Specifically, it relied on the testimony of James Ross, the Water Quality Board Site Cleanup Unit Chief. Ross testified that he would [n]ot likely have required Carson Harbor to cleanup the site if Carson Harbor had not come to him with a remediation plan: 27 Q: [I]f the owners had not come to you with a remediation plan, if they had simply reported to you that this is what we see here, would you have required them to develop some remediation plan? 28 A: Not likely. 29 Q: As far as you were concerned, this stuff, even the slag and tar-like material, could have just stayed there? 30 A: Very likely. 31 Q: So, then, basically, this remediation was done at their initiative for their own reasons and not because of any environmental or health problem that was perceived by the Regional Board? 32 A: Yes. 33 Carson Harbor, 990 F. Supp. at 1193. 34 The district court's reliance on this testimony highlights its adoption of the G.J. Leasing analysis and its decision to disregard evidence that created a genuine issue of material fact on the linchpin issue of necessity. In determining whether response costs are necessary, we focus not on whether a party has a business or other motive in cleaning up the property, but on whether there is a threat to human health or the environment and whether the response action is addressed to that threat. It is unrealistic to believe that clean up is necessarily motivated by eleemosynary factors. Although a private plaintiff will almost always have a business or financial motive for cleaning up a site, such subjective intent is simply not part of the calculus. Rather, we focus on the objective circumstances of each case. The issue is not why the landowner decided to undertake the cleanup, but whether it was necessary. See Cadillac Fairview/Cal., Inc. v. Dow Chem. Co., 840 F.2d 691, 695 (9th Cir. 1988) (necessity is a factual question). To hold otherwise would result in a disincentive for cleanup. Indeed, the cleanup may be motivated by many factors, such as fear of a government enforcement action, landowner liability, and even self-serving economic reasons. 35 Nor must a plaintiff show agency action as a prerequisite to cost recovery. Agency inaction is not dispositive of the question whether contamination presents an environmental risk worthy of response. See id. ([T]he district court erred in ruling that some governmental entity must authorize and initiate a response action for that action to be necessary and consistent with the national contingency plan.); NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986) (holding that response costs can be necessary even though the agency that required cleanup never approved the response actions taken). Whether the Water Quality Board would have ordered remediation is not a definitive determination of whether there is a health or environmental risk. 36 Although agency inaction is not dispositive, an actual agency cleanup order is highly relevant and, in some cases, compelling on the necessity question. Here, there was conflicting evidence on this point. Some evidence in the record also suggests that the Water Quality Board required the remediation and that it perceived a threat to public health or the environment. In his deposition, Ross conceded that lead contamination from the tar and slag material presented a threat to surface and groundwater: 37 Q: Do you agree that this project was a surface water quality protection issue? 38 A: In part, yes. 39 Q: What do you mean in part? 40 A: Well, it also has the potential to be groundwater. 41 Q: Okay. So do you think that there might be a threat to groundwater as a result of the contamination on the property? 42 A: Certainly occurred to me. 43 Q: What hazardous substances on the property did you think were a threat to groundwater? 44 A: Lead primarily. 45 Q: Did the levels of lead that were found on this property have the potential to get into the groundwater? 46 A: Yes, the soluble lead. 47 Ross also testified that the level of lead contamination on the property would require something to be done. 48 A review of the Water Quality Board's conduct also supports the conclusion that it perceived a threat to public health or the environment: The Board withheld the no-further-action letter Carson Harbor's consultant requested shortly after he sent the initial notice of contamination on the property. Instead of adopting the consultant's recommended cleanup levels, the Board required lower lead levels. And, after the cleanup, a Board representative inspected the site to verify that the contamination had been adequately remedied before it issued the no-further-action letter. Finally, the letter predicates closure on a finding that the remaining soil in the bottom of the watercourse poses no further threat to surface waters of the State. 49 The district court also excluded certain evidence as hearsay, namely, the testimony of Carson Harbor's expert, environmental consultant Dr. Hassan Amini, and a memorandum written by a Unocal employee. In marked contrast to Ross's testimony that in the first instance a remediation would likely not have been required, Amini testified that the Water Quality Board ordered the cleanup, and the memorandum corroborates that testimony, as does correspondence between Amini and Ross. 50 When properly considered, this evidence of Ross's prior inconsistent statements creates a genuine issue of material fact about whether Carson Harbor's response costs werenecessary. This evidence falls within the basic rule of evidence . . . that prior inconsistent statements may be used to impeach the credibility of a witness. United States v. Hale, 422 U.S. 171, 176 (1975); accord United States v. Bao, 189 F.3d 860, 866 (9th Cir. 1999) ([B]ecause a declarant's prior inconsistent statement is not offered for its truth, it is not hearsay.). In addition, experts are entitled to rely on hearsay in forming their opinions. See Fed. R. Evid. 703 (If [the underlying facts or data are] of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject, the facts or data need not be admissible in evidence in order for the opinion or inference to be admitted.); United States v. McCollum, 732 F.2d 1419, 1422-23 (9th Cir. 1984) (applying Rule 703 to affirm the admission of expert testimony based on hearsay). Thus, the evidence was admissible because it was part of the basis for Amini's expert opinion about whether the contamination posed a threat to public health or the environment such that the Water Quality Board would require cleanup. The district court therefore erred by disregarding this evidence. 51 In light of this conflicting evidence, genuine issues of material fact preclude summary judgment on the issue of whether Carson Harbor's response costs were necessary.  Therefore, with respect to Unocal and the Government Defendants the district court erred by granting summary judgment in their favor on the CERCLA claim. We discuss the CERCLA claim against the Partnership Defendants, below. 52 We decline to address in the first instance the Government Defendants' remaining CERCLA arguments, including their arguments that they are, nevertheless, entitled to summary judgment because Carson Harbor's response costs were not consistent with the national contingency plan, see 42 U.S.C. &#167 9607(a)(4)(B); because federally permitted releases are exempt from CERCLA coverage under 42 U.S.C. &#167 9607(j); and because the third party defense applies. We leave these issues for the district court's consideration on remand. 53