United States v. CDMG Realty Co.

Opinions of the United

1996 Decisions States Court of Appeals

for the Third Circuit

9-27-1996

USA v. CDMG Realty Co

Precedential or Non-Precedential:

Docket 95-5505

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UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

___________

NO. 95-5505

___________

UNITED STATES OF AMERICA

v.

CDMG REALTY CO., a limited partnership; HELEN E. RINGLIEB,

individually, and as general partner in CDMG REALTY CO.;

HMAT ASSOCIATES, INC.; TOWNSHIP OF PARSIPPANY-TROY HILLS;

ALLIED-SIGNAL, INC; BEAZER MATERIALS & SERVICES, INC.;

CIBA-GEIGY CORPORATION; HOECHST CELANESE CORP.; OCCIDENTAL

CHEMICAL CORP.; PFIZER, INC.; CARL GULICK, INC.; BECTON

DICKINSON, INC.; WARNER-LAMBERT COMPANY; AMERICAN TELEPHONE

AND TELEGRAPH COMPANY; BROWNING-FERRIS INDUSTRIES OF NORTH

JERSEY, INC.; INDUSTRIAL CIRCUITS COMPANY; AUTOMATIC SWITCH

COMPANY; ROWE INTERNATIONAL INC.; HOSOKAWA MICRON INTERNATIONAL

INC.; SCOVILL INC.; K-H CORPORATION ON BEHALF OF MAGOR CAR;

LESLIE CONTROLS COMPANY, INC.; NESOR ALLOY CORPORATION; SANDOZ

PHARMACEUTICALS CORPORATION; KIDDE INDUSTRIES, INC. (named

in the complaint as Hanson Industries); RAYONIER INC.,

(formerly ITT Rayonier, Inc.); WAGNER ELECTRIC CORPORATION

(named in the Complaint as Cooper Industries, Inc.); THE

SHERWIN-WILLIAMS COMPANY; KDI/TRIANGLE ELECTRONICS, INC.;

STATE OF NEW JERSEY DEPARTMENT OF TRANSPORTATION; JOHN DUSENBURY

COMPANY; SAFETY LIGHT CORPORATION, (named in the Complaint as USR

Industries, Inc.); THE BOC GROUP, INC.; L.E. CARPENTER & CO.;

THE MENNEN COMPANY; METEM CORPORATION; NSK CORPORATION; CERAMIC

MAGNETICS, INC.; AIR PRODUCTS & CHEMICALS, INC.; ROCKLAND

CORPORATION; SIKA CORPORATION; CARBONE USA CORPORATION;

NEW JERSEY TRANSIT CORPORATION; NEW JERSEY BUS OPERATIONS, INC.

v.

THE SHARKEY LANDFILL AGREEMENT GROUP, an organization of

Defendants in Civil Action Number 89-4246 (NHP), for

themselves and on behalf of other Settling Defendants whose

contribution claims they may assert pursuant to an

assignment of rights and HOECHST CELANESE CORPORATION, one of

its members; BEAZER MATERIALS & SERVICES, INC.; OCCIDENTAL

CHEMICAL

CORPORATION; HMAT ASSOCIATES, INC.,

Third-Party Plaintiffs

v.

ADRON, INC.; AMERACE CORPORATION and SEQUA CORPORATION;

AIR PRODUCTS & CHEMICALS, INC.; BASIC, INC.; THE BOC GROUP, INC.;

CARBONE U.S.A. CORP.; CERAMIC MAGNETICS, INC.; COLLOID CHEMICAL,

INC.; COOPER INDUSTRIES, INC.; HANSON INDUSTRIES; INTERNATIONAL

ENGRAVING CORP.; INTERNATIONAL PAPER COMPANY; ITT RAYONIER, INC.;

JOHN DUSENBURY COMPANY, INC.; KDI/TRIANGLE ELECTRONICS INC.;

L.E. CARPENTER & CO.; LITTON SYSTEMS, INC.;

THE MENNEN COMPANY; METEM CORPORATION;

NEW JERSEY TRANSIT CORPORATION; NEW JERSEY TRANSIT BUS COMPANY,

INC.; NSK CORPORATION; OLD DEERFIELD FABRICS, INC.;

PANTASOTE INC.; PQ CORPORATION; PRECISION MANUFACTURING CO., INC;

ROCKLAND CORPORATION; SANDOZ PHARMACEUTICALS CORPORATION; THE

SHERWIN-WILLIAMS COMPANY; SIKA CORPORATION; USR INDUSTRIES, INC.

and TOWNSHIP OF BLOOMFIELD; TOWN OF BOONTON; TOWNSHIP OF BOONTON;

BOROUGH OF BUTLER; TOWNSHIP OF THE BOROUGH OF CALDWELL;

TOWNSHIP OF CHATHAM; CITY OF CLIFTON; TOWNSHIP OF DENVILLE;

TOWN OF DOVER; TOWNSHIP OF EAST HANOVER; COUNTY OF ESSEX;

TOWNSHIP OF FAIRFIELD; TOWNSHIP OF GLEN RIDGE BOROUGH;

BOROUGH OF HALEDON; TOWNSHIP OF HANOVER; CITY OF JERSEY CITY;

BOROUGH OF KINNELON; BOROUGH OF LINCOLN PARK;

TOWNSHIP OF LITTLE FALLS; TOWNSHIP OF LIVINGSTON; TOWNSHIP

OF MILLBURN; TOWNSHIP OF MINE HILL; TOWNSHIP OF MONTCLAIR;

TOWNSHIP OF MONTVILLE; TOWNSHIP OF MORRIS; TOWN OF MORRISTOWN;

BOROUGH OF MOUNTAIN LAKES; TOWNSHIP OF PEQUAMNOCK; BOROUGH OF

POMPTON LAKES; BOROUGH OF PROSPECT PARK; TOWNSHIP OF RANDOLPH;

BOROUGH OF RIVERDALE; TOWNSHIP OF ROCKAWAY; CITY OF SUMMIT;

BOROUGH OF TOTOWA; BOROUGH OF VICTORY GARDENS; TOWNSHIP OF WEST

CALDWELL; TOWNSHIP OF WEST ORANGE; BOROUGH OF WHARTON; VINCENT

APICE AND SON; FRANK M. BACE DISPOSAL, INC.; CALDWELL TRUCKING

CO., INC.; CARNER BROS., INC.; CENTRAL WASTE AND MILL SERVICE,

INC.; CHATHAM DISPOSAL COMPANY; CHEM-QUID DISPOSAL, INC.;

CARMEL CHIULLO; JOHN COSTA; JOSEPH DEFRIETAS; DELL & SONS;

DENVILLE DISPOSAL CO., INC.; DIMARCO SANITATION; SAM FIORENZO;

FRANK'S SANITATION SERVICE; GARBCO ASSOCIATES, INC.; B. HORSTMANN

SEPTIC TANK SERVICE; DANIEL JACKSON; J.M.S. SANITATION CO.;

R. LOBOSCO AND SONS, INC.; MARANGI SANITATION, INC.;

FRANK J. MARINARO; MERCER WASTE REMOVAL CO.;

ANTHONY MIELE; MORRIS COUNTY; WEST ESSEX DISPOSAL CO., INC.;

STATE OF NEW JERSEY DEPARTMENT OF TRANSPORTATION;

HELEN ELAINE RINGLIEB and TOWNSHIP OF ESSEX FELLS;

HARDING TOWNSHIP; MADISON BOROUGH;

BOROUGH OF NEW PROVIDENCE; ROSELAND BOROUGH; UNION COUNTY;

WAYNE TOWNSHIP; DOWEL ASSOCIATES, a general partnership;

HERBERT M. IRIS, individually and as a general partner in DOWEL

ASSOCIATES; LESTE Z. LIEBERMAN, individually and as general

partner in DOWEL ASSOCIATES,

Third-Party Defendants

(Newark N.J. D.C. Civil No. 89-cv-04246)

STATE OF NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION

v.

CIBA-GEIGY CORPORATION, INC.; CURTISS-WRIGHT CORPORATION;

HOECHST-CELANESE CORPORATION; KETCHAM AND MC DOUGALL, INC.;

PFIZER, INC.; OCCIDENTAL PETROLEUM CORPORATION; KOPPERS

COMPANY, INC.; SHARKEY FARMS, INC.; NICHOLAS ENTERPRISES,

INC.; PARKER CHEMICAL COMPANY; CHEMICAL WASTE MANAGEMENT, INC.

(NEWARK N.J. D.C. Civil No. 89-cv-04281)

HMAT Associates, Inc., Appellant

_________________________________________

On Appeal From the United States District Court

For the District of New Jersey

_________________________________________

Argued: March 18, 1996

Before: BECKER, McKEE, and McKAY,

Circuit Judges.

(Filed September 27, l996)

JAMES J. PERICONI, ESQUIRE (ARGUED)

Periconi & Rothberg, P.C.

230 Park Avenue, Suite 615

New York, NY 19169

Attorneys for Third-Party Plaintiff/Appellant

R. BRUCE MORRISON, ESQUIRE

DAVID B. FARER, ESQUIRE (ARGUED)

JOHN P. QUIRKE, ESQUIRE

Farer Siegal Fersko

A Professional Association

600 South Avenue

P.O. Box 580

Westfield, NJ 07091

Attorneys for Third-Party Defendants/Appellees

_________________________

OPINION OF THE COURT

_________________________

BECKER, Circuit Judge.

This appeal requires us to determine the meaning of the word

"disposal" in the Comprehensive Environmental Response,

Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601 et

seq. Plaintiff HMAT Associates, the current owner of

contaminated property, was sued by the United States under CERCLA

for the costs of cleaning up the site. HMAT sought contribution

from Defendant Dowel Associates, the company that sold the land

to HMAT, on the ground that Dowel was a prior owner "at the time

of disposal," see 42 U.S.C. § 9607(a)(2). HMAT concedes that no

one dumped waste at the property during Dowel's ownership, but

offers two reasons why "disposal" took place during Dowel's

tenure. HMAT first advances a "passive" disposal theory: that

"disposal" occurred because contamination dumped in the land

prior to Dowel's purchase of the property spread during Dowel's

ownership. HMAT also offers an "active" disposal theory: that a

soil investigation conducted by Dowel to determine whether the

land could support construction caused the dispersal of

contaminants, and that this constitutes "disposal."

On cross-motions for summary judgment, the district court

ruled in favor of Dowel. The court rejected HMAT's argument that

the spread of contamination unaided by human conduct can confer

CERCLA liability and held that any disturbance of contaminants

caused by Dowel's soil testing was too insignificant to amount to

"disposal." HMAT appeals the court's grant of Dowel's summary

judgment motion and the denial of its own motion.

We hold that the passive migration of contamination dumped

in the land prior to Dowel's ownership does not constitute

disposal. Finding it unnecessary to reach the question whether

the movement of contaminants unaided by human conduct can ever

constitute "disposal," we conclude that the language of CERCLA's

"disposal" definition cannot encompass the spreading of waste at

issue here. This conclusion is based on an examination of

CERCLA's text, is supported by the structure of the statute, and

is consistent with CERCLA's purposes.

Regarding Dowel's soil testing, we hold that there is no

threshold level of disturbance required to constitute "disposal,"

and that HMAT has identified evidence that would justify a

factfinder's conclusion that contaminants were spread in the

testing. We also hold, however, that because CERCLA clearly

contemplates that prospective purchasers be allowed to conduct

soil investigations to determine whether property is

contaminated, a plaintiff must show not only that a soil

investigation has caused the spread of contaminants, but also

that the investigation was conducted negligently.

Thus, although we agree with the district court that HMAT's

passive theory is not viable, HMAT may be able to proceed on its

active theory. Accordingly, we will vacate the district court's

grant of summary judgment to Dowel and remand for further

proceedings consistent with this opinion.

I. Facts and Procedural History

The property at issue in this case, a ten-acre parcel of

land in Morris County, New Jersey, was once part of the Sharkey's

Farm Landfill (Sharkey's Landfill). Sharkey's Landfill operated

as a municipal landfill from 1945 until 1972. During its

operation, the landfill received waste from several counties in

northern New Jersey. In addition to accepting municipal solid

waste, the landfill received approximately 750,000 pounds of

hazardous chemical waste from Ciba-Geigy Company, a large

pharmaceutical concern. Additional chemical waste from other

sources may also have been deposited there. For example, Koppers

Chemical Company allegedly disposed of about 3,000,000 gallons of

wastewater of unknown composition in the landfill. Between 1966

and 1972, county and state agencies received steady complaints

about odors, smoke from fires, lack of proper cover, and the

presence of dead animals in the landfill. The landfill was

closed to further disposal in 1972.

The Environmental Protection Agency (EPA) and the New Jersey

Department of Environmental Protection and Energy (NJDEPE) began

investigating Sharkey's Landfill in the mid to late 1970s. In

1982, the EPA placed Sharkey's Landfill on the National

Priorities List of Hazardous Waste Sites.

In December 1981, Dowel purchased the property. The land

was vacant at the time of purchase, and it remained vacant during

Dowel's ownership. Neither Dowel nor any other person deposited

waste at the site during Dowel's term of ownership. Dowel's only

activity on the land was a soil investigation, conducted in

September 1981 (three months prior to finalizing its purchase) to

determine the land's ability to support construction. The soil

investigation, which was performed by Thor Engineering, involved

nine drill borings, each twelve to eighteen feet into the ground.

Thor's logs show that its equipment bored through various waste

materials and groundwater and that several of the boreholes

"caved" during the testing. App. 120.

In November 1983, the NJDEPE notified Dowel that it was

investigating the property and that Dowel should cease any

planned activities at the site. In 1984, the EPA notified Dowel

that Dowel was potentially liable for the cleanup costs of the

site and invited it to undertake voluntary cleanup. App. 273.

In 1987, Dowel sold the property to HMAT. In the contract

of sale, Dowel fully disclosed that the property was part of the

Sharkey Landfill, that the landfill was under investigation by

state and federal environmental authorities, and that the

property was part of a possible Superfund site. App. 282.

In October 1989, EPA and NJDEPE commenced actions against

parties potentially liable for the costs of cleaning up the

Sharkey Landfill and seeking a declaration of future liability.

HMAT, as the current owner of the property, was named as a

defendant under CERCLA § 107(a)(1), 42 U.S.C. § 9607(a)(1).

Dowel was not sued. However, HMAT filed a third-party suit

against Dowel, seeking contribution from Dowel as a former owner

of the property "at the time of disposal" pursuant to CERCLA §§

107(a)(2) and 113(f). HMAT also pled state law claims.

Dowel moved for summary judgment, arguing that under CERCLA,

prior owners are only liable if they actively engage in waste

disposal during their ownership of the property. HMAT also moved

for summary judgment. HMAT challenged Dowel's reading of CERCLA,

contending that prior owners are liable if they fail to stop the

migration of contaminants on their property. In addition, HMAT

argued that Dowel actively engaged in waste disposal within the

meaning of CERCLA: HMAT submitted an affidavit from Laura

Truettner, an expert environmental consultant, which asserted

that Dowel's drill borings exacerbated contamination by mixing,

shifting, and spreading waste materials. In response, Dowel

submitted an affidavit from Peter Wilner, the principal of Thor

Engineering, stating that the boring did not spread or mix any

materials. HMAT then submitted another affidavit from Truettner,

which contended that Wilner's affidavit contains misleading

statements and directly contradicts the contemporaneous record of

the drilling.

As we have noted, the district court granted Dowel's motion

in full and denied HMAT's cross-motion. The court reasoned that

mere ownership of previously contaminated property does not

trigger liability under CERCLA, and that, even accepting HMAT's

version of the facts, Dowel's drilling activities did not cause a

significant enough disturbance to trigger liability. HMAT

appeals the district court's rulings on its CERCLA claims

(although it accepts the district court's conclusion that Dowel

is not liable under state law). We exercise plenary review over

the district court's summary judgment rulings. See, e.g., United

States v. Capital Blue Cross, 992 F.2d 1270, 1271-72 (3d Cir.

1993).

II. Passive Spreading in a Landfill as Disposal

A. Introduction

CERCLA is a broad and complex statute aimed at the dangers

posed by hazardous waste sites. Among other things, CERCLA

provides a cause of action to recover "response costs" incurred

in remedying an environmental hazard, 42 U.S.C. § 9607, and

allows those liable for response costs to seek contribution from

other liable parties, id. § 9613(f). A plaintiff must meet four

elements to establish CERCLA liability: (1) that hazardous

substances were disposed of at a "facility"; (2) that there has

been a "release" or "threatened release" of hazardous substances

from the facility into the environment; (3) that the release or

threatened release has required or will require the expenditure

of "response costs"; and (4) that the defendant falls within one

of four categories of responsible parties. Id. § 9607(a); seeUnited

States v. Alcan Aluminum Corp., 964 F.2d 252, 258-59 (3d

Cir.), reh'g and reh'g in banc denied, 964 F.2d 271 (3d Cir.

1992). If these requirements are met, responsible parties are

liable for response costs regardless of their intent. See id. at

259 ("CERCLA imposes strict liability on responsible parties.").

The parties agree that the first three requirements are met.

Their dispute concerns whether Dowel is a responsible party.

CERCLA makes four classes of people liable for response costs or

contribution: the current owner or operator of a facility, id. §

9607(a)(1); any person who owned or operated the facility "at the

time of disposal" of a hazardous substance, id. § 9607(a)(2); any

person who arranged for disposal or treatment, or arranged for

transport for disposal or treatment of hazardous substances at

the facility, § 9607(a)(3); and any person who accepts or

accepted hazardous substances for transport to sites selected by

such person, Id. § 9607(a)(4). HMAT contends that Dowel is

liable as a person who owned or operated the facility "at the

time of disposal" of a hazardous substance.

CERCLA defines "disposal" by incorporating the definition

used by the Resource Conservation and Recovery Act (RCRA). See42 U.S.C. §

9601(29) ("The terms 'disposal', 'hazardous waste',

and 'treatment' shall have the meaning provided in section 1004

of the Solid Waste Disposal Act."). Under RCRA,

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.

42 U.S.C. § 6903(3). Focusing on the breadth of this definition,

HMAT reads "disposal" to encompass the passive migration of

contaminants. HMAT offers no evidence that any passive migration

has occurred here but asks us to take judicial notice that waste

tends to spread once it is put in the ground, See Office of

Remedial Response, United States Environmental Protection Agency,

Superfund Exposure Assessment Manual 8 (1988) [Hereinafter

Superfund Manual] (waste in landfills tends to migrate due to,

inter alia, rain, groundwater movement, and wind) and waste

therefore must have spread during the six years Dowel owned the

property. Several courts have been sympathetic to this argument.

See United States v. Waste Indus., Inc., 734 F.2d 159, 164-65

(4th Cir. 1984) (migration of hazardous substances can constitute

disposal under RCRA); CPC International, Inc. v. Aerojet-General

Corp., 759 F. Supp. 1269, 1278 (W.D. Mich. 1991) (the unchecked

spread of contaminated groundwater qualifies as disposal under

CERCLA); Stanley Works v. Snydergeneral Corp., 781 F. Supp. 659,

662-64 (E.D. Cal. 1990) (ongoing migration of hazardous

substances constitutes disposal under CERCLA); United States v.

Price, 523 F. Supp. 1055, 1071 (D.N.J. 1981) (spreading of

hazardous substances constitutes disposal under RCRA), aff'd, 688

F.2d 204 (3d Cir. 1982); cf. Nurad, Inc. v. William E. Hooper &

Sons Co., 966 F.2d 837, 845-46 (4th Cir.) (leaking from tanks

that were deposited prior to the defendants' ownership

constitutes disposal subjecting the defendant to CERCLA

liability), cert. denied sub nom. Mumaw v. Nurad, Inc., 506 U.S.

940 (1992); State of New York v. Almy Bros., Inc., 866 F. Supp.

668, 676-77 (N.D.N.Y. 1994) (gradual leaking from drums deposited

prior to the defendants' ownership constitutes disposal under

CERCLA); In re Hemingway Transport, Inc., 108 B.R. 378, 382

(Bankr. D. Mass. 1989) (leaking drums constitute CERCLA

disposal), aff'd, 126 B.R. 650 (D. Mass. 1991), aff'd, 954 F.2d 1

(1st Cir. 1992).

We are unpersuaded. A thorough examination of the text and

structure of CERCLA convinces us that the passive migration of

contaminants alleged here does not constitute disposal. Our

conclusion is based on the plain meaning of the words used in the

disposal definition and is supported by the structure of CERCLA's

liability scheme. We also believe that our interpretation is

consistent with CERCLA's purposes.

B. The Language

1. The Definition of "Disposal"

The definition of disposal begins with "the discharge,

deposit, injection, dumping, spilling, leaking, or placing of any

solid waste or hazardous waste into or on any land or water." 42

U.S.C. § 6903(3). Courts holding that passive migration can

constitute disposal have focused on the words "leaking" and

"spilling," terms that generally do not denote active conduct.

See CPC International, Inc. v. Aerojet-General Corp., 759 F.

Supp. 1269, 1278 (W.D. Mich. 1991); United States v. Price, 523

F. Supp. 1055, 1071 (D.N.J. 1981), aff'd, 688 F.2d 204 (3d Cir.

1982).

We think there is a strong argument, however, that in the

context of this definition, "leaking" and "spilling" should be

read to require affirmative human action. Both "leaking" and

"spilling" also have meanings that require some active human

conduct. "Leak" can be defined as "to permit to enter or escape

through a leak." Webster's Third New International Dictionary,

Unabridged 1285 (Philip Babcock Gove & the Mirriam-Webster

Editorial Staff eds., 1986) [hereinafter Webster's]. Similarly,

"spill" can mean "to cause or allow to pour, splash, or fall

out." Id. at 2195. Meaning derives from context, hence the

constructional canon noscitur a sociis, which states that one may

infer meaning by examining the surrounding words. The words

surrounding "leaking" and "spilling" -- "discharge," "deposit,"

"injection," "dumping," and "placing" -- all envision a human

actor. In the context of these other words, then, Congress may

have intended active meanings of "leaking" and "spilling." SeeEcodyne

Corp. v. Shah, 718 F. Supp. 1454, 1457 (N.D. Cal. 1989);

Robert L. Bronston, Note, The Case Against Intermediate Owner

Liability for Passive Migration of Hazardous Waste, 93 Mich. L.

Rev. 609, 616 (1994).

But we need not address this question in the broad terms of

whether disposal always requires active human conduct. Even if

it does not, we conclude that the passive migration at issue in

this case cannot constitute disposal. While "leaking" and

"spilling" may not require affirmative human conduct, neither

word denotes the gradual spreading of contamination alleged here.

A common definition of "leak" -- and the one most favorable to

HMAT -- is "to enter or escape through a hole, crevice, or other

opening." Webster's, supra at 1285. This definition requires

that a substance "leak" from some opening. For example, the

definition would encompass the escape of waste through a hole in

a drum. But HMAT has offered no evidence of leaking drums.

Compare, e.g., Nurad, Inc. v. William E. Hooper & Sons Co., 966

F.2d 837, 846 (4th Cir.) (the plaintiff presented evidence

showing that tanks had leaked), cert. denied sub nom. Mumaw v.

Nurad, Inc., 506 U.S. 940 (1992). And there is no other evidence

that waste escaped from any opening during Dowel's ownership.

The definition of "spilling" is also unavailing. Although

"spilling" too sometimes denotes the movement of liquid in the

absence of human action, such a definition does not cover the

spreading of waste at issue here. Passive definitions of "spill"

suggest a rapid torrent, not gradual passive migration over the

course of several years. See Webster's, supra at 2195 (defining

"spill" as, inter alia, "to flow, run, or fall out, over, or off

with waste, loss, or scattering as the result" and as "to come,

go, or pass with a turbulent rush[; to] pour in an unrestrained,

profuse, or disorderly manner"). Consider, for example, an "oil

spill."

2. A Comparison With "Release"

It is especially unjustified to stretch the meanings of

"leaking" and "spilling" to encompass the passive migration that

generally occurs in landfills in view of the fact that another

word used in CERCLA, "release," shows that Congress knew

precisely how to refer to this spreading of waste. A prior owner

who owned a waste site at the time of "disposal" is only liable

in the event of a "release" or "threatened release." 42 U.S.C. §

9607. CERCLA defines release in relevant part as follows:

The term "release" means any spilling, leaking,

pumping, pouring, emitting, emptying, discharging,

injecting, escaping, leaching, dumping, or disposing

into the environment (including the abandonment or

discarding of barrels, containers, and other closed

receptacles containing any hazardous substance or

pollutant or contaminant) . . . .

42 U.S.C. § 9601(22). The definition of "release" is thus

broader than that of "disposal": "release" encompasses

"disposing" and some elements of the "disposal" definition and

also includes some additional terms.

Most importantly, the definition of "release" includes the

term "leaching," which is not mentioned in the definition of

"disposal." "Leaching" is "the process or an instance of

separating the soluble components from some material by

percolation." Webster's, supra at 1282. Leaching of

contaminants from rain and groundwater movement is a principal

cause of contaminant movement in landfills, see Superfund Manual,

supra at 8, and is the most predominant cause of groundwater

contamination from landfills, Edward Repa & Charles Kufs,

Leachate Plume Management 2 (1985). The word "leaching" is

commonly used in the environmental context to describe this

migration of contaminants. See, e.g., Steven Ferrey, The Toxic

Time Bomb: Municipal Liability for the Cleanup of Hazardous

Waste, 57 Geo. Wash. L. Rev. 197, 207 n.34 (1988) ("Leachate is

liquid or water soluble contaminated substances that migrate away

from the point source of contamination in groundwater or surface

water, often influenced by rain and normal water table

activities. Such a phenomenon is described as 'leaching' of

contaminants.") Congress's use of the term "leaching" in the

definition of "release" demonstrates that it was aware of the

concept of passive migration in landfills and that it knew how to

explicitly refer to that concept.

. Yet Congress made prior owners liable only if they owned

land at the time of "disposal," not at the time of "release."

3. "At the Time of Disposal"

Our conclusion that the meaning of the words in the

"disposal" definition cannot cover the passive migration alleged

in this case is buttressed by the language of CERCLA's liability

provision. If the spreading of contaminants is constant, as HMAT

would have us assume, characterizing liable parties as "any

person who at the time of disposal . . . owned or operated any

facility," 42 U.S.C. § 9607(a)(2), would be a rather complicated

way of making liable all people who owned or operated a facility

after the introduction of waste into the facility. See Snediker

Developers Ltd. Partnership v. Evans, 773 F. Supp. 984, 989 (E.D.

Mich. 1991); Ecodyne Corp. v. Shah, 718 F. Supp. 1454, 1457 (N.D.

Cal. 1989); In re Diamond Reo Trucks, Inc., 115 B.R. 559, 565

(Bankr. W.D. Mich. 1990). Furthermore, there would be no need

for the separate responsible party category of current owner or

operator, id. § 9607(a)(1). See Ecodyne Corp., 718 F. Supp. at

1457. Although CERCLA is not written with great clarity, we

will not impute to Congress an intent to set up a simple

liability scheme through a convoluted methodology.

C. Structure: The Innocent Owner Defense

Our conclusion that the language of CERCLA's definition of

"disposal" does not include the passive migration alleged here is

also supported by a significant aspect of CERCLA's liability

scheme, the innocent owner defense. Since the 1986 Superfund

Amendments and Reauthorization Act (SARA), Pub. L. No. 99-499,

100 Stat. 1613 (1986) (codified at 42 U.S.C. §§ 9601-9675),

CERCLA has exempted certain "innocent owners" from liability.

CERCLA provides a defense to liability if the defendant can

prove that the release or threatened release was caused solely by

an act or omission of a third party. 42 U.S.C. § 9607(b)(3).

The defense is generally not available if the third party causing

the release is in the chain of title with the defendant. See 42

U.S.C. § 9601(35)(A). However, the defense is available in such

circumstances if the person claiming the defense is an "innocent

owner." To establish the innocent owner defense the defendant

must show that "the real property on which the facility is

located was acquired by the defendant after the disposal or

placement of the hazardous substance on, in, or at the facility"

and that "[a]t the time the defendant acquired the facility the

defendant did not know and had no reason to know that any

hazardous substance which is the subject of the release or

threatened release was disposed of on, in, or at the facility."

Because CERCLA conditions the innocent owner defense on the

defendant's having purchased the property "after the disposal" of

hazardous waste at the property, "disposal" cannot constitute the

allegedly constant spreading of contaminants. Otherwise, the

defense would almost never apply, as there would generally be no

point "after disposal." See United States v. Petersen Sand and

Gravel, Inc., 806 F. Supp. 1346, 1351-52 (N.D. Ill. 1992); In re

Diamond Reo Trucks, Inc. v. City of Lansing, 115 B.R. 559, 566

n.3 (Bankr. W.D. Mich. 1990); Bronston, supra at 627-28. We

think it unlikely that Congress would create a basically useless

defense.

The innocent owner defense's apparent limitation to current

owners also supports the conclusion that "disposal" does not

encompass the passive spreading alleged here. The provision

establishing the innocent owner defense states: "Nothing in this

paragraph or in section 9607(b)(3) of this title [, which

provides the causation defenses including the third party

defense,] shall diminish the liability of any previous owner or

operator who would be otherwise liable under this chapter." 42

U.S.C. § 9601(35)(C). This language certainly suggests that the

innocent owner defense is unavailable to prior owners or

operators.

While the question whether the innocent owner defense is

available only to present owners is not before us -- and we do

not decide the issue -- we note that such a limitation makes

sense only if passive spreading of waste in a landfill is not

included in disposal. If passive migration is excluded from

"disposal," past owners will generally only be liable as owners

"at the time of disposal" when they have committed or allowed

affirmative acts of disposal on their property. They would thus

have little need for the innocent owner defense, which requires,

inter alia, that a defendant did not "cause[] or contribute[] to

the release or threatened release," 42 U.S.C. § 9601(35)(D);

"exercised due care with respect to the hazardous substance

concerned," id. § 9607(b)(3)(a); and "took precautions against

foreseeable acts or omissions of any such third party [causing

the release] and the consequences that could foreseeably result

from such acts or omissions," id. § 9607(b)(3)(b). On the other

hand, if prior owners were liable because waste spread during

their tenure and the innocent owner defense is available only to

current owners, prior owners would be in a significantly worse

position than current owners: they would be liable for passive

migration of waste even if they had no reason to know of the

waste's presence. We do not believe that this was Congress's

intent.

D. CERCLA's Purposes

We have explained our confidence that the meaning of the

words defining "disposal" does not encompass the gradual

spreading of waste in a landfill and that this conclusion is

supported by the structure of the innocent owner defense. We

also conclude that this reading of "disposal" is consistent with

CERCLA's purposes.

Congress enacted CERCLA with two principal goals in minds --

to facilitate the cleanup of potentially dangerous hazardous

waste sites, Tippins Inc. v. USX Corp., 37 F.3d 87, 92 (3d Cir.

1994), and to force polluters to pay the costs associated with

their pollution, United States v. Alcan Aluminum, 964 F.2d 252,

257-58 (3d Cir. 1992). See United States v. USX Corp., 68 F.3d

811, 814 (3d Cir. 1995). Our holding is clearly consistent with

the latter purpose. Those who owned previously contaminated

property where waste spread without their aid cannot reasonably

be characterized as "polluters"; excluding them from liability

will not let those who cause the pollution off the hook. And,

many of these owners will pay for the pollution: if they

disclose the fact that the land contains waste, their selling

price will reflect the cost of CERCLA liability. If they have

knowledge of contamination and do not disclose it to a

transferee, they are liable for response costs even after the

transfer. 42 U.S.C. § 9601(35)(C). The only prior owners who

will not pay any cleanup costs are those who bought and sold the

land with no knowledge that the land is contaminated.

And our holding will not undermine the goal of facilitating

the cleanup of potentially dangerous hazardous waste sites. Even

if owners of previously contaminated land can evade liability by

transferring the land, ample incentives remain to promote

cleanup. See United States v. Petersen Sand and Gravel, Inc.,

806 F. Supp. 1346, 1353 (N.D. Ill. 1992); Bronston, supra at 637-

40. Present owners and operators remain strictly liable for

the costs of cleanup, 42 U.S.C. § 9607(a)(1), as do some prior

owners, id. § 9607(a)(2), people who arranged for disposal, id. §

9607(a)(3), and transporters of hazardous substances, id. §

9607(a)(4). Moreover, a number of provisions ensure that

contamination will be discovered and the fact of contamination

disclosed if the land is transferred. CERCLA imposes criminal

liability (including prison sentences) for failure to report a

"release" of hazardous substances above a certain threshold. See42 U.S.C.

§ 9603. As mentioned, if an owner transfers land that

it knows to be contaminated without disclosing the contamination,

it remains liable even after the transfer. 42 U.S.C. §

9601(35)(C). In addition, the innocent owner defense encourages

potential buyers to investigate the possibility of contamination

before a purchase. See 42 U.S.C. § 9601(35)(B) (in order to

claim the innocent owner defense, a defendant must have

undertaken all appropriate inquiry).

Thus, for the reasons we have stated, we agree with the

district court that HMAT cannot proceed on its "passive" theory

of disposal: the movement of contaminants alleged here does not

constitute "disposal." However, because we conclude that HMAT

may proceed on its "active" theory of disposal, the issue to

which we now turn, we will vacate the court's order granting

summary judgment to Dowel on HMAT's CERCLA claim.

III. Soil Investigation as Disposal

Having concluded that passive migration does not constitute

disposal, we now consider HMAT's other asserted basis of

liability. HMAT argues that Dowel's soil investigation, which

was meant to determine the land's ability to support

construction, caused the mixing, shifting, and spreading of

contaminants and that this constitutes disposal. Although the

district court suggested that HMAT's evidence of spreading was

"speculative," it did not resolve whether the evidence was

sufficient to allow a factfinder to conclude that the drilling

caused any subsurface mixing. Instead, the court concluded that

even accepting HMAT's version of events, Dowel's drilling "fell

short of that conduct accepted as being enough of a disturbance

to constitute disposal." According to the district court, only

"significant disturbance of already contaminated soil constitutes

disposal."

A. No Threshold to Disposal

We disagree with the district court's reading of "disposal."

Under 42 U.S.C. § 6903(3), "disposal" is defined in part as the

"discharge" or "placing" of waste "into or on any land or water."

"Disposal" thus includes not only the initial introduction of

contaminants onto a property but also the spreading of

contaminants due to subsequent activity. See Webster's, supra at

644 (defining "discharge" in part as "to set at liberty,"

"release from confinement, custody, or care," "pour forth," or

"emit"); id. at 1727 (defining "place" in part as "cause to rest

or lie"); Kaiser Aluminum & Chemical Corp. v. Catellus

Development Corp., 976 F.2d 1338, 1342-43 (9th Cir. 1992)

("CERCLA's definition of 'disposal' expressly encompasses the

'placing of any . . . hazardous waste . . . on any land.' 42

U.S.C. § 6903(3). Congress did not limit the term to the initial

introduction of hazardous material onto property."); Tanglewood

East Homeowners v. Charles-Thomas, Inc., 849 F.2d 1568, 1573 (5th

Cir. 1988) ("[T]his definition of disposal does not limit

disposal to a one-time occurrence -- there may be other disposals

when hazardous substances are moved, dispersed, or released

during landfill excavations and fillings.").

Although the cases cited above involved a greater

disturbance of contaminants than that alleged here, the dispersal

of contaminants need not reach a particular threshold level in

order to constitute "disposal." "Disposal" consists of "the

discharge . . . or placing of any solid waste or hazardous waste

into or on any land or water." 42 U.S.C. § 6903(3) (emphasis

added). There is no exception for de minimis disturbances. Cf.United

States v. Alcan Aluminum Corp., 964 F.2d 252, 260 (3d Cir.

1992) ("[C]ourts that have addressed this issue [whether the term

"hazardous substance" includes any quantitative requirement] have

almost uniformly held that CERCLA liability does not depend on

the existence of a threshold quantity of a hazardous

substance."). The fact that a defendant's dispersal of

contaminants is trivial may provide a ground to allocate less

liability to that defendant, but it is not a defense to

liability.

B. The Evidence

The evidence presented by both parties shows that a genuine

issue of material fact remains as to whether Dowel's drilling

caused the dispersal of contaminants. HMAT presented the

drilling logs and report of Thor Engineering, the firm that

performed Dowel's soil test. According to these documents, Thor

made nine drill borings twelve to eighteen feet into the ground

and extracted columns of soil for study. The drill bored through

garbage, miscellaneous fill from the dump, cinders, a black

substance that appeared to be petroleum-based, and ground water.

The documents show that al least three of the holes "caved"

during drilling. App. 120.

HMAT also submitted an affidavit from Laura Truettner, an

expert environmental consultant, which asserted that Dowel's

drilling spread contamination. First, because Thor's logs show

that the drill encountered waste materials, natural soil, and

groundwater, and that several boreholes "caved," Truettner

concludes that mixing of these materials occurred. Second,

Thor's report and logs show no evidence that the drilling

equipment was decontaminated between boreholes and before the

equipment was moved from the landfill. Thus, Truettner

maintains, it is probable that contaminated material was spread

between boreholes and along roads used for access by the drilling

equipment.

Dowel, in response, submitted an affidavit from Peter

Wilner, the principal of Thor Engineering. Wilner states that he

personally directed and oversaw the drilling at issue. He

asserts that "no drills were used; no 'cuttings' were generated;

no soils or other materials were in any way spread around the

premises; and no holes were left open, allowing for any

infiltration of foreign materials." He also claims that "The

'open' boring method used for the . . . borings performed at the

Premises does not cause the underground mixing or shifting of

subsurface materials."

HMAT then submitted another affidavit from Truettner.

Truettner contends that Wilner's affidavit contains misleading

statements and directly contradicts the contemporaneous record of

the drilling. She first casts doubt on Wilner's claim that he

was present during the drilling, pointing out that the drilling

logs indicate the presence of several people but make no mention

of Wilner. She represents that it is industry practice to list

all representatives at the site during the drilling.

Truettner then states that, although Wilner's statement that

no drills were used is technically correct because a "split spoon

sampler" was used, the distinction is irrelevant: materials were

disturbed and a hole was created. According to Truettner, "anytype of

sampling activity generates cuttings because the split

spoon sampler knocks material off the borehole walls."

Furthermore, Truettner attacks the implications of Wilner's

statement that no holes were left open. According to Truettner,

in order for the holes to have been closed one of three things

would have had to occur: (1) the holes were filled with material

brought from off-site; (2) they were filled with material from

the site itself; or (3) they were allowed to collapse in on

themselves. Truettner contends that the first scenario is

unlikely in light of the documentary evidence: the cost estimate

of the drilling does not reflect the costs of fill material and

labor. And, if either of the other two scenarios occurred, the

act of filling the holes would cause mixing of materials on the

property.

Finally, Truettner asserts that Wilner's statement that

Thor's boring method does not cause mixing of subsurface of

material is contradicted by the drilling logs, which show that at

least three of the holes "caved." "The process of caving,"

Truettner states, "will absolutely cause the mixing and shifting

of subsurface materials."

Given this evidence, a genuine dispute remains as to whether

Dowel's drilling caused the dispersal of contaminants. A factual

dispute is genuine if the evidence is such that a reasonable

factfinder could find in favor the nonmoving party. Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). HMAT's evidence

that Thor's equipment went through waste, soil, and groundwater

and that several boreholes "caved", in combination with its

expert's opinion, is sufficient to support a finding that a

dispersal of contaminants occurred. Dowel's evidence, that

despite the contact between its equipment, waste, soil, and

groundwater, its boring method caused no mixing, is sufficient to

support the opposite finding. Thus summary judgment in favor of

either party is inappropriate.

C. Soil Investigation

As we have explained, HMAT has identified evidence from

which a factfinder could conclude that Dowel has caused a

dispersal of contaminants. Ordinarily, that would be sufficient

to submit the question of whether a "disposal" occurred to a

factfinder. However, this is not an ordinary case: the alleged

act of disposal consists of a soil investigation, and CERCLA

clearly contemplates that some soil investigation be allowed to

examine contaminated property. Thus, it is not enough for a

plaintiff to show that a soil investigation has caused the spread

of contaminants. Rather, we conclude that in order to establish

that "disposal" has occurred based on a soil investigation, a

plaintiff must also show that the investigation was conducted

negligently.

CERCLA's innocent owner defense encourages prospective

property buyers to conduct soil investigations. The innocent

owner defense requires, inter alia, that "[a]t the time the

defendant acquired the facility the defendant did not know and

had no reason to know that any hazardous substance which is the

subject of the release or threatened release was disposed of on,

in, or at the facility." 42 U.S.C. § 9601(35)(A)(i) (emphasis

added). CERCLA provides explicit guidance on how a defendant is

to establish that it had "no reason to know" of a prior disposal:

To establish that the defendant had no reason to

know . . . the defendant must have undertaken, at the

time of acquisition, all appropriate inquiry into the

previous ownership and uses of the property consistent

with good commercial or customary practice in an effort

to minimize liability. For purposes of the preceding

sentence the court shall take into account any

specialized knowledge or experience on the part of the

defendant, the relationship of the purchase price to

the value of the property if uncontaminated, commonly

known or reasonably ascertainable information about the

property, the obviousness of the presence or likely

presence of contamination at the property, and the

ability to detect such contamination by appropriate

inspection.

Id. § 9601(35)(b). CERCLA thus contemplates that prospective

purchasers "undertake[] . . . all appropriate inquiry" and will

engage in "appropriate inspection."

In order to give effect to the innocent owner defense and

its requirement that prospective purchasers engage in appropriate

inquiry and inspection, an "appropriate" soil investigation

cannot itself trigger CERCLA liability. Otherwise, prospective

purchasers who by diligently inspecting for contamination cause

the dispersal of any contaminants will find themselves liable for

causing a "disposal." And the innocent owner defense would offer

such prospective purchasers no protection: if they buy the

property after discovering contamination, they will be ineligible

for the defense because they will not be "innocent" (i.e., they

will "know and ha[ve] reason to know" of a prior disposal, id. §

9601(35)); if they do not buy the property, they will be

ineligible for the defense because they will not be "owners"

(i.e., they will not have "acquired the facility" as required by

42 U.S.C. § 9601(35)(A)). In order to give the defense effect,

then, an "appropriate" soil investigation cannot constitute

disposal.

But a party cannot escape liability for performing a soil

investigation negligently and thereby unnecessarily spreading

pollution. Several CERCLA provisions suggest that persons

otherwise insulated from CERCLA liability may nonetheless become

liable if they act negligently. In order to take advantage of a

third-party defense (i.e., that a release was caused solely by a

third party), a defendant must show that "he exercised due care

with respect to the hazardous substance concerned, taking into

consideration the characteristics of such hazardous substance, in

light of all relevant facts and circumstances." 42 U.S.C. §

9607(b)(3)(a). And another provision, 42 U.S.C. § 9607(d)(1),

insulates from liability actions consistent with the National

Contingency Plan unless they are negligently performed:

[N]o person shall be liable under this subchapter for

costs or damages as a result of rendering care,

assistance, or advice in accordance with the National

Contingency Plan ("NCP") or at the direction of an

onscene coordinator appointed under such a plan, with

respect to an incident creating a danger to public

health or welfare or the environment as a result of any

releases of a hazardous substance or threat thereof.

This paragraph shall not preclude liability for costs

or damages as the result of negligence on the part of

such person.

42 U.S.C. § 9697(D)(1). These provisions are themselves

inapplicable to the issue at hand. However, they express a

useful principle for determining when an action that is exempted

from liability becomes so inconsistent with CERCLA's purposes

that it is no longer so insulated, and this informs our judgment.

We conclude that only "appropriate" soil investigations -- i.e.,

those that do not negligently spread contamination -- fall

outside the definition of "disposal." Such a rule best

harmonizes CERCLA's clear intention to allow soil investigations

and its goal of remedying hazardous waste sites.

We recognize that the soil investigation at issue here was

not meant to discover the presence of contamination but was aimed

at assessing the land's ability to support construction.

However, we conclude that the purpose of the investigation is

irrelevant. Determining the motive of the investigating party

seems a costly and difficult inquiry. Moreover, we do not wish

to deter the productive use of property by discouraging soil

investigations aimed at assessing development possibilities.

In addition to applying the wrong test of "disposal," the

district court did not focus on whether Dowel's soil testing was

negligently performed, and we believe that the parties should

have a chance to add to the record on this issue. Therefore, we

will vacate the district court's order dismissing HMAT's CERCLA

claim and remand for further proceedings.

IV. Conclusion

For the foregoing reasons, the passive spreading of

contamination in a landfill does not constitute "disposal" under

CERCLA. Soil testing that disperses contaminants, however, may

constitute "disposal" and HMAT has identified evidence that would

justify a factfinder's conclusion that contaminants were

dispersed in Dowel's testing. Nevertheless, because CERCLA

contemplates that some soil investigation be allowed, HMAT must

show not only that the soil investigation caused the spread of

contaminants but also that the investigation was conducted

negligently. The judgment of the district court will therefore

be vacated and the case remanded for further proceedings

consistent with this opinion.