Opinion ID: 775487
Heading Depth: 3
Heading Rank: 1

Heading: PRPs, THE MEANING OF DISPOSAL, AND CIRCUIT COURT INTERPRETATIONS

Text: 57 Section 9607(a), which sets out the four PRP categories, provides: 58
59 (2) any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of, 60 (3) any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at any facility or incineration vessel owned or operated by another party or entity and containing such hazardous substances, and 61 (4) any person who accepts or accepted any hazardous substances for transport to disposal or treatment facilities, incineration vessels or sites selected by such person, from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance, shall be liable . . . . 62 42 U.S.C. &#167 9607(a) (emphasis added). Carson Harbor argues that the Partnership Defendants fit within the second PRP category as owners of the property at the time of disposal under &#167 9607(a)(2). 63 CERCLA defines disposal for purposes of &#167 9607(a) with reference to the definition of disposal  in RCRA, see 42 U.S.C. &#167 9601(29), which in turn defines disposal as follows: 64 The term disposal means the discharge, deposit, injection, dumping, spilling, leaking, or placing of any solid waste or hazardous waste into or on any land or water so that such solid waste or hazardous waste or any constituent thereof may enter the environment or be emitted into the air or discharged into any waters, including ground waters. 65 42 U.S.C. &#167 6903(3) (emphasis added). Under this definition, for the Partnership Defendants to be PRPs, there must have been a discharge, deposit, injection, dumping, spilling, leaking, or placing of contaminants on the property during their ownership. Id. 66 Although we have previously concluded that RCRA's definition of disposal is clear, 3550 Stevens Creek Assocs., 915 F.2d at 1362, whether the definition includes passive soil migration is an issue of first impression in this circuit. Other circuit courts have taken a variety of approaches. Those opinions cannot be shoehorned into the dichotomy of a classic circuit split. Rather, a careful reading of their holdings suggests a more nuanced range of views, depending in large part on the factual circumstances of the case. Compare United States v. 150 Acres of Land, 204 F.3d 698, 706 (6th Cir. 2000) (concluding that absent any evidence that there was human activity involved in whatever movement of hazardous substances occurred on the property, there is no disposal), ABB Indus. Sys., Inc. v. Prime Tech., Inc., 120 F.3d 351, 359 (2d Cir. 1997) (holding that prior owners are not liable for the gradual spread of contamination underground), and United States v. CDMG Realty Co., 96 F.3d 706, 722 (3d Cir. 1996) ([T]he passive spreading of contamination in a landfill does not constitute `disposal' under CERCLA.), with Nurad, Inc. v. William E. Hooper & Sons Co., 966 F.2d 837, 846 (4th Cir. 1992) (holding past owners liable for the disposal of hazardous wastes that leaked from an underground storage tank). 67 The first circuit court to face the question was the Fourth Circuit in Nurad. There, the court addressed whether leaking from underground storage tanks is a disposal.  966 F.2d at 844-46. The current owner brought suit against two prior owners for reimbursement costs under CERCLA, claiming that the past owners were PRPs under &#167 9607(a)(2). Id. at 840. The court rejected the active-only approach, stating: 68 [T]his circuit has already rejected the strained reading of disposal which would limit its meaning to active human conduct. United States v. Waste Ind., Inc., 734 F.2d 159, 164-65 (4th Cir. 1984). In Waste Industries, the court held that Congress intended the 42 U.S.C. &#167 6903(3) definition of disposal to have a range of meanings, including not only active conduct, but also the reposing of hazardous waste and its subsequent movement through the environment. Id. at 164. 69 Id. at 845. The Fourth Circuit concluded that &#167 9607(a)(2) imposes liability not only for active involvement in the `dumping' or `placing' of hazardous waste at the facility, but for ownership of the facility at a time that hazardous waste was `spilling' or `leaking.'  Id. at 846; accord Crofton Ventures Ltd. P'ship v. G & H P'ship, 258 F.3d 292, 300 (4th Cir.2001) (holding that, [g]iven the breadth of the statutory definition of `disposal,' the district court must be able to conclude that the buried drums did not leak  when the defendants owned or operated the facility to make a finding that [they] were not liable under &#167 9607(a)(2)). 70 Four years later, in CDMG Realty, the Third Circuit addressed whether the spread of contamination within a landfill is a disposal. 96 F.3d at 710. There, as in Nurad, the current owner of contaminated property sought contribution from the prior owner, asserting that the prior owner was a PRP under &#167 9607(a)(2). Id. The Third Circuit held, based on the plain meaning of the words used to define disposal and the structure and purposes of CERCLA, see id. at 714-18, that the passive migration of contamination dumped in the land prior to [the past owner's] ownership does not constitute disposal, id. at 711. The court specifically declined, however, to reach the question whether the movement of contaminants unaided by human conduct can ever constitute `disposal,'  id., concluding that [w]hile `leaking' and `spilling' may not require affirmative human conduct, neither word denotes the gradual spreading of contamination alleged here.  Id. at 714. 71 The next year, the Second Circuit, in ABB Industrial Systems, similarly addressed whether a current owner could recover cleanup costs under &#167 9607(a)(2) from several companies that had previously controlled the property. 120 F.3d at 353. As in CDMG Realty, the Second Circuit addressed whether there was a disposal where hazardous chemicals continued to gradually spread underground while the defendants controlled the property. Id. at 357. The Second Circuit, relying on the Third Circuit's analysis of CERCLA's langauge, structure, and purposes in CDMG Realty , affirmed the district court's grant of summary judgment to the defendants, holding that prior owners and operators of a site are not liable under CERCLA for mere passive migration. Id. at 359. The court stated: 72 [T]here is no genuine issue of triable fact as to whether the dismissed defendants spilled chemicals or otherwise contaminated the property; moreover, although hazardous chemicals may have gradually spread underground while the dismissed defendants controlled the property (passive migration), we conclude that prior owners are not liable under CERCLA for passive migration . . . . 73 Id. at 354. The Second Circuit, however, express[ed] no opinion on whether prior owners are liable if they acquired a site with leaking barrels [and] the prior owner's actions are purely passive. Id. at 358 n.3. 74 In 150 Acres of Land, the Sixth Circuit interpreted disposal for purposes of the innocent landowner  defense. 204 F.3d at 704-05. In that context, the Sixth Circuit explicitly required active conduct for a disposal. See id. at 706. The court concluded that the current owners, whose status as PRPs arises under &#167 9607(a)(1), acquired the property after the disposal under &#167 9601(35), because there is no disposal [i]n the absence of any evidence that there was human activity involved in whatever movement of hazardous substances occurred on the property since [the current owners] have owned it. Id.; see also Bob's Beverage, Inc. v. Acme, Inc., 264 F.3d 692, 697-98 (6th Cir. 2001). 75 In sum, although all of the cases reference the active/ passive distinction in some manner, there is no clear dichotomy among the cases that have interpreted disposal. Rather, the cases fall in a continuum, with the Sixth Circuit taking an active-only approach in 150 Acres of Land; the Third Circuit, in CDMG Realty, and the Second Circuit, in ABB Industrial Systems, addressing only the spread of contamination (and leaving open whether migration must always be active to be a disposal); and, finally, the Fourth Circuit in Nurad, concluding that disposal includes passive migration, at least in the context of leaking underground storage tanks. 76 We have not addressed whether disposal in &#167 9607(a) includes the passive movement of contamination. We have held, however, that the movement of contamination that does result from human conduct is a disposal. See Kaiser Aluminum & Chem. Corp., 976 F.2d at 1342 (holding that disposal under &#167 9607(a)(2) includes a party's movement and spreading of contaminated soil to uncontaminated portions of property and that Congress did not limit [`disposal'] to the initial introduction of hazardous material onto property). 4 In another context, we have held that disposal refers only to an affirmative act of discarding a substance as waste, and not to the productive use of the substance. 3550 Stevens Creek Assocs., 915 F.2d at 1362 (concluding that there was no disposal of asbestos in a building when it was installed for use as insulation and fire retardant). We have also held that the definition of disposal is the same under &#167 9607(a)(2) and &#167 9607(a)(3). See id. (Because the[`disposal'] definition applicable to actions under &#167 107(a)(2) and (a)(3) is the same, and there is no meaningful difference for purposes of CERCLA between a party who sells or transports a product containing or composed of hazardous substances for a productive use, and a party who actually puts that product to its constructive use, we see no reason to adopt a different definition in this case.).