Petition for Writ of Certiorari — Carson Harbor Village, Ltd. v. Braley

supreme Court, U.<

FILED

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Y 011091 yan 22 2002

No.

i nN LL LT TTY EE APPEAR

In the Supreme Court of the Anited States

CARSON HARBOR VILLAGE, LTD.,

Petitioner,

V.

RICHARD G. BRALEY, WALKER SMITH, JR., AND

CARSON HARBOR VILLAGE MOBILE HOME PARK,

Respondents.

On Petition for Writ of Certiorari to the

United States Court of Appeals for the Ninth Circuit

PETITION FOR WRIT OF CERTIORARI

M. MILLER BAKER

Counsel of Record

RICHARD B. ROGERS

MICHAEL S. NADEL

RICHARD H. CLOSE

FRANK GOOCH III

THOMAS W. CASPARIAN

GILCHRIST & RUTTER

PROFESSIONAL CORPORATION

1299 Ocean Avenue, Suite 900

Santa Monica, California 90401

(310) 393-4000

MCDERMOTT, WILL & EMERY

600 13th Street, N.W.

Washington, D.C. 20005

(202) 756-8000

CHRIS M. AMANTEA

MCDERMOTT, WILL & EMERY

2049 Century Park East

Los Angeles, California 90067

(310) 277-4110

Attorneys for Petitioner Carson Harbor Village, Ltd.

January 22, 2002

ee ee

QUESTIONS PRESENTED

The petitioner, a landowner with environmental

liabilities resulting from a predecessor in title’s placement of

environmental contaminants directly on and in the soil,

brought this action under the Comprehensive Environmental

Response, Compensation, and Liability Act (“CER.CLA”),

42 U.S.C. § 9601 ef seq., for contribution against the prior

owners in the chain of title. One of the prior owners was an

intermediate owner in the chain of title (also not responsible

for the original placement of contaminants on the property)

that owned the property while the contaminants gradually

migrated “passively” (without the assistance of active human

conduct) through the soil and spread throughout and beyond

the property.

CERCLA, commonly known as Superfund, provides

that such an intermediate prior owner may be subject to

contribution liability if there is a “disposal” on the property

during the time of ownership. The en banc Ninth Circuit

held that although the passive soil migration of contaminants

originating from Jeaking containers would constitute a

“disposal” under CERCLA, the gradual passive soil

migration of contaminants originating from the placement of

contaminants directly on or in the soil would not constitute a

“disposal” under CERCLA.

The questions presented are:

(1) Whether the passive soil migration of contaminants

constitutes a “disposal” within the meaning of CERCLA;

and, if so,

(2) Whether the gradual passive soil migration of

contaminants that were originally placed directly in or on the

soil constitutes a “disposal” within the meaning of CERCLA.

a a

ll

PARTIES TO THE PROCEEDING

The parties to this proceeding in this Court are: Petitioner

Carson Harbor Village, Ltd., a California limited partnership,

and Respondents Richard G. Braley, Walter Smith, Jr., and

Carson Harbor Village Mobile Home Park, a California

general partnership.

The following parties were parties to this case in the

District Court and in the Ninth Circuit but do not have a

- direct interest in the questions presented and thus have not

been named as Respondents: Unocal Corporation; the

County of Los Angeles; the City of Compton, California;

and the City of Carson, California.

The following person was a party to this case in the

District Court but not in the Ninth Circuit, does not have an

interest in the questions presented, and thus has not been

named as a Respondent: James W. Van Loben Sels, in his

capacity as Director of the California Department of

Transportation.

iii

TABLE OF CONTENTS

QUESTIONS PRESENTED..............ccsccsssecseccesseresceeseerseseesess i

PARTIES TO THE PROCEEDING. ..............ccccssccsecssecesceeees il

TABLE GP CORT III sevccescsecsovsversccsecsssveoscoccesoresesevsocnvenes ill

TABLE OF AUTHORITIES ......ccccccccsccsocccccccecsseseocsrosceesseees vi

PETITION FOR WRIT OF CERTIORARI............:ccecesesseeees 1

ED HI OE ocvcnccosssisecceseovoreversercncnsecosnancenestonsevvosoreees 1

JURISDICTIONAL STATEMENT..........:cscesessessesseerceneenees 2

FEDERAL STATUTORY PROVISIONS

INVOLVED IN THIS CASE. ....cecsccocosscccccscceesecosovsesseceee 2

STATEMENT OF THE CASE. .....c.ccsvscccccecccercescosecsssvecceorees -

BCR A Qi IW cacccccsicsccceccccccssesscccseccevvecescsssenrces 4

II. Background Facts........ ileal aeailcnsitdaciibelichatbiidinbomneinnin 5

III. The District Court Decision ..............:sseseeseeeeeeeeneees 6

IV. The Ninth Circuit Panel Decision s Saeocasineeliananaes 7

V. The Ninth Circuit En Banc Decision ..............:e000+ 7

REASONS FOR GRANTING THE WRIT ...........:cccscesseeseees 8

I. The Circuits Are in Disarray As to Whether, and

to What Extent, the Passive Soil Migration of

Contaminants Constitutes a “Disposal” Under

al daerianemiopeniiatebinnen 8

iv

A. The Fourth Circuit: Passive Soil Migration of

Contaminants Constitutes a CERCLA

IS csiiceisicchtilliccnnsiiiiteiinssealibaniettetieaeeiicilbiaiveninhiniodee 8

B. The Third Circuit: “Disposal” Is Probably

Limited to Active Migration, But Even If It

Includes Some Forms of Sudden Passive

Migration, It Never Includes Gradual Passive

Migration of Contaminants Placed Directly

BE elas cnseitshceniosianstccegeninasnsiacintedieincietnnaceteninn 9

C. The Second Circuit: “Mere Passive

Migration” of Contaminants Is Not a

CERCLA Disposal, Except Possibly for

oe i ascekitecstiniossaleesincecnietsisnticedeicicisekimcinsantancen 9

D. The Sixth Circuit: Passive Migration Is Never

1 Ce I siccnitiesctcinsimnccirinbeinitintitaipeinbinianitcs 10

E. Summary of the Disarray in the Circuits.................. 10

II. The Question Presented Is Crucial to CERCLA

Enforcement and Affects the Rights and

Liabilities of Governmental and Private Parties

I scree ieinticnsaahiaiscetsasiicibiitai dita iiiasiaiaiies 11

III. The Ninth Circuit’s En Banc Holding That the

Gradual Passive Migration of Contaminants

Originally Placed Directly In or On the Soil Does

Not Constitute a CERCLA “Disposal” Is

Erroneous and Nonsensical..............:.ssssssssssssssssceesees 15

A. The Plain and Ordinary Meaning of the

Relevant Terms Includes the Gradual Passive

Migration of Contaminants Originally Placed

Diswctly tes cr One Cat Seb nnn aicccecccecicnsewcessccconsesees 15

B. The Ninth Circuit En Banc Decision

Frustrates the Purposes of CERCLA and

i OD FE Be ccccecescvetnntscccrsctiocscnnnvencesisse 17

ae PI TT viisicnntiksectenisntionnibhenesinsentitsnntsenutvametttanihieninndtnes 21

vi

TABLE OF AUTHORITIES

Federal Cases

ABB Industry Sys., Inc. v. Prime Tech., Inc.,

eR Be RE, , Ee an 9

Crofton Ventures Ltd. P’ship v. G&H P'’ship,

you 5 wf Sy) nn eT 9

Nurad, Inc. v. Wm. E. Hooper & Sons Co.,

“966 F.2d 837 (4th Cir. 1992)... eee eeteeeeeeeee 4, 5, 8, 20

United States v. 150 Acres of Land,

204 F.3d 698 (6th Cir. 2000)......... cece eeceeeeeeeeeeeeeeeees 10

United States v. CDMG Realty Co.,

96 F.3d 706 (3d Cir. 1996)..........cccceccesccesteeessceeeeeeeeeeees 9

United States v. Aceto Agric. Chems. Corp.,

Fe ae FSCO Cy Ne Rititcerthcseinintnssiinnnanemnes 11

Federal Statutes

Fe ae ID crcisnenictesernnvviieveiistivinausetisteiayititeaiiatiibbaihaizinun 3,15

ae IE Suiterencicccidasenncnieiinnieineeneibileaniiedaddatdaadnabienisa 3, 4, 15

ee aU ihicicicinieinicseeicneeinmiielaiaiielaiiatisaanitiialailinili y

OR Bivins ce es 5

Vii

State Statutes

CAL. HEALTH & SAFETY CODE §§ 25323.5, 25113.............. 14

DEL. CODE ANN., tit. 7, §§ 6302, 9103 ....ccscsescsessesscssecseeesees 14

i, CO RIE, © SI weeneccnsticcsnreecastenittiininsanitncmeniins 14

SAIN COB SII icccccstncsrensscviccerecnncnsrensnstnoniemepoeneins 14

ME. REV. STAT. ANN., tit. 38, §§ 1317, 1319-C ....... eee 14

WH. REV. STAT. ADO. 8 DOTS cccccccecscscsersccecerecesssocesncossses 15

N.Y. ENVTL. CONSERV. LAW § 27-0901 ..........:cccsccssseesseeees 15

OHIO REV. CODE ANN. § 3734.01 ...........:cccsssceessecesseeeeeeeesees 15

Die; CURR A. Bw icireitcscinnisccintatiicnmnnntcnmnivien 15

Miscellaneous

Michael J. Gergen, The Failed Promise of the

“Polluter Pays” Principle: An Economic

Analysis of Landowner Liability for Hazardous

Waste, 69 N.Y.U. L. REV. 624 (1994) ........ccccceseseeeeees 14

Andrew R. Klein, Hazardous Waste Cleanup and

Intermediate Landowners: Reexamining the

Liability-Based Approach, 21 HARV. ENVTL. L.

Pe re ee casei Raiiceabescntinctcsstcicininttormmenisinindson 12

SB DP, NO DEG CGS) seerscccsctoncccsvensvnsecccnvccvccosvvcvocovene 11

WEBSTER’S NEW COLLEGIATE DICTIONARY (1980)............. 17

No.

In the Supreme Court of the Anited States

CARSON HARBOR VILLAGE, LTD.,

Petitioner,

Vv.

RICHARD G. BRALEY, WALKER SMITH, JR., AND

CARSON HARBOR VILLAGE MOBILE HOME F ARK,

Respondents.

On Petition for Writ of Certiorari to the

United States Court of Appeals for the Ninth Circuit

PETITION FOR WRIT OF CERTIORARI

Carson Harbor Village, Ltd., respectfully petitions for a

writ of certiorari to review the judgment of the United States

Court of Appeals for the Ninth Circuit in this case.

OPINIONS BELOW

The en banc decision of the Court of Appeals is reported

as Carson Harbor Village, Ltd. v. Unocal Corporation, 270

F.3d 863 (9th Cir. 2001), and is reprinted in the Appendix

(“App.”) at 1-60.

The prior panel decision of the Court of Appeals is

reported as Carson Harbor Village, Ltd. v. Unocal

Corporation, 227 F.3d 1196 (9th Cir. 2000), and reprinted at

App. 61-99. The order of the Court of Appeals granting

rehearing en banc and withdrawing the panel opinion is

2

reported at 240 F.3d 841 (9th Cir. 2001), and reprinted at

App. 100.

The en banc decision of the Court of Appeals affirmed

in part, and reversed in part, the District Court’s decision

granting summary judgment to all defendants, which is

reported as Carson Harbor Village, Ltd. v. Unocal Corp.,

990 F. Supp. 1188 (C.D. Cal. 1997), and is reprinted at App.

101-22.

JURISDICTIONAL STATEMENT

The United States Court of Appeals for the Ninth

Circuit entered its judgment and opinion on October 24,

2001. This Court has jurisdiction over this matter pursuant

to 28 U.S.C. § 1254(1).

FEDERAL STATUTORY

PROVISIONS INVOLVED IN THIS CASE

42 U.S.C. § 9607(a) provides, in pertinent part:

Notwithstanding any other provision or rule of law, and

subject only to the defenses set forth in subsection (b) of this

section —

(1) the owner and operator of a vessel or a facility,

(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,

(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

3

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

(4) any person who accepts or accepted any hazardous

substances for transport to dispo.al 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 for —

(A) all costs of removal or remedial action incurred

by the United States Government or a State or an

Indian tribe not inconsistent with the national

contingency plan;

(B) any other necessary costs of response incurred

by any other person consistent with the national

contingency plan;

(C) damages for injury to, destruction of, or loss of

natural resources, including the reasonable costs

of assessing such injury, destruction, or loss

resulting from such a release; and

(D) the costs of any health assessment or health

effects study carried out under section 104(i).

42 U.S.C. § 9601(29) provides:

The terms “disposal”, “hazardous waste”, and “treatment”

shall have the meaning provided in section 1004 of the Solid

Waste Disposal Act [42 U.S.C. § 6903].

42 U.S.C. § 6903(3) provides:

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.

STATEMENT OF THE CASE

I. CERCLA Overview

The issue in this case is whether a prior owner of

property is liable, pursuant to the Comprehensive

Environmental Response, Compensation, and Liability Act

(“CERCLA”), 42 U.S.C. § 9601 et seq., for contribution to

the costs of cleaning up environmental contamination that

spread without any active human involvement during the

time of the prior owner’s ownership. Five circuits that have

examined the question have reached an array of standards of

liability for such intermediate prior owners, i.e., owners who

neither owned the property at the time of an initial placement

of hazardous substances nor are the current owners of the

property.

Congress enacted CERCLA, commonly known as

Superfund, “to address the increasing environmental and

health problems associated with inactive hazardous waste

sites.” Nurad, Inc. v. Wm. E. Hooper & Sons Co., 966 F.2d

837, 841 (4th Cir.), cert. denied, 506 U.S. 940 (1992). The

statute “encourages private cleanup of such hazards by

providing a cause of action for the recovery of costs-incurred

in responding to a ‘release’ of hazardous substances at any

‘facility.”” Jd. (citing 42 U.S.C. § 9607). Under CERCLA’s

purposefully broad liability provisions, a person who incurs

such cleanup costs is entitled to seek contribution from

anyone who qualifies as a potentially “responsible person”

5

under the statute. See 42 U.S.C. § 9607(a); 42 U.S.C. §

9613(f). Potentially “responsible persons” include, in

relevant part, any person who owned or operated the facility

at the time of the “disposal” of a hazardous substance.

Nurad, 966 F.2d at 841 (citing 42 U.S.C. § 9607(a)(2)).

Such persons are strictly liable for responding to cleanup

costs, subject only to the affirmative defenses set forth in the

statute. Jd. The court has the equitable authority to allocate

response costs among the liable parties. Jd.

II. Background Facts

Petitioner owns a seventy-acre mobile home park (the

“property”) in Carson, California. App. 3. In 1983,

Petitioner purchased the property from Respondents Richard

G. Braley, Walker Smith, Jr., and Carson Harbor Village

Mobile Home Park, a California general partnership

(collectively, the “Partnership Defendants”), who had

developed the property_as_a mobile home park after

acquiring it in 1977. Id. Before the Partnership Defendants

acquired the property, Unocal Corporation held a leasehold

interest in a portion of the property from approximately 1945

and continuing until 1983, which overlapped the six years

(1977-1983) that the Partnership Defendants owned the

property at issue. Jd. Throughout the period of Unocal’s

leasehold, Unocal used its portion of the property for

petroleum production, “operating a number of oil wells,

pipelines, above-ground storage tanks, and production —

facilities.” Jd.

While attempting to refinance the property in 1993,

Petitioner undertook an environmental investigation, which

revealed the presence of hazardous substances on the

property. App. 4. Additional environmental assessment and

investigation revealed that tar-like and slag materials, a

waste or by-product of petroleum production, had been

6

placed directly on and in the soil at the facility decades

before the Partnership Defendants developed it into a mobile

home park. App. 4. Soil around and beyond the tar-like and

slag waste materials contained hydrocarbons and lead that

had migrated from the original placement of the waste

materials. Jd. These findings triggered state law reporting

requirements. Jd.

The Petitioner’s environmental consultants reported

their findings to various governmental agencies, as required,

and proposed a cleanup plan. Jd One of those agencies

approved the cleanup plan after imposing more stringent

cleanup standards than those originally proposed by

Petitioner. Jd In accordance with the cleanup plan,

Petitioner excavated approximately 1,043 tons of tar and slag

material in 1995. App. 6.

Ill. The District Court Decision

In 1997, Petitioner filed this action in the United States

District Court for the Central District of California against

the Partnership Defendants and other defendants alleging

various causes of action, including liability under CERCLA

for contribution to the costs of cleanup of the property and

various state law claims.’

After extensive discovery, the parties cross-moved for

summary judgment. On November 6, 1997, the District

Court entered summary judgment in favor of the Partnership

Defendants on Petitioner’s CERCLA contribution claim on

the basis that the passive migration of contaminants during

the time of the Partnership Defendants’ ownership did not

' The District Court’s and the Ninth Circuit’s disposition of

the various state law claims are not presented for review in this

Petition.

7

constitute a “disposal” within the meaning of CERCLA.

App. 109-11.

IV. The Ninth Circuit Panel Decision

Petitioner appealed to the United States Court of

Appeals for the Ninth Circuit, which heard argument on

September 13, 1999, and ruled on September 14, 2000. The

Ninth Circuit panel reversed the trial court’s grant of

summary judgment to the Partnership Defendants. The

panel, following the Fourth Circuit’s decision in Nurad, held

that the term “disposal” in CERCLA comprehended the

passive migration of contaminants. App. 78-80. District

Judge Charles Weiner, sitting by designation, dissented from

this holding on the basis that the term “disposal” in

CERCLA was limited to the active migration of

contaminants (i.e., migration resulting from some human

act). App. 94-99.

V. The Ninth Circuit En Banc Decision

Upon petition by the Partnership Defendants, the Ninth

Circuit ordered that the panel decision be vacated and the

? The District Court also entered summary judgment in favor

of all of the defendants, including the Respondent Partnership

Defendants, on Petitioner’s CERCLA contribution claims on the

basis that the Petitioner’s cleanup of the hazardous substances had

not been “necessary” under CERCLA. App. 105-08. The Ninth

Circuit panel reversed, unanimously holding that there was a

genuine issue of material fact as to whether the Petitioner’s

cleanup costs had been “necessary.” App. 68-78; App. 94. The en

banc court unanimously agreed with the panel’s treatment of this

issue. App. 10-16; App. 48. This Petition does not present the

question of whether Petitioner’s cleanup was “necessary” under

CERCLA.

8

case reheard en banc. App. 100. The en banc court heard

argument on June 19, 2001, and ruled on October 24, 2001.

The en banc court held that although the term “disposal”

in CERCLA may comprehend the passive soil migration of

contaminants in circumstances where the original

contaminants had been placed in leaking containers or

vessels, App. 27-28, it did not do so where, as here, the

contaminants had simply been placed directly into or on the

soil and thereafter gradually migrated. Jd Judge Betty

Fletcher, the author of the original panel decision, filed a

dissent on this issue that was joined by two other judges of

the en banc court. App. 48-60.

REASONS FOR GRANTING THE WRIT

I. The Circuits Are in Disarray As to Whether, and

to What Extent, the Passive Soil Migration of

Contaminants Constitutes a “Disposal” Under

CERCLA.

A. The Fourth Circuit: Passive Soil Migration

of Contaminants Constitutes a CERCLA

“Disposal.”

In Nurad, the Fourth Circuit held that the term

“disposal” in CERCLA has “a range of meanings, including

not only active conduct, but also the reposing of hazardous

waste and its subsequent movement through the

environment.” 966 F.2d at 845 (emphasis added) (citing and

following United States v. Waste Indus., 734 F.2d 159, 164

(4th Cir. 1984)). More recently, the Fourth Circuit has

adhered to Nurad and ruled that there is a “disposal” for

purposes of CERCLA “when hazardous waste was either

placed on the site or leaked into the environment from a

source on the site, whether or not such owner or operator

9

was the cause of the disposal, or indeed, even had knowledge

of it.” Crofton Ventures Ltd. P’ship v. G&H P’ship, 258

F.3d 292, 297 (4th Cir. 2001) (emphasis added). Nothing in

Nurad or Crofton suggests that the term “disposal” only

includes the passive migration of contaminants from a

container, as opposed to migration from contaminants placed

directly on or in the soil.

B. The Third Circuit: “Disposal” Is Probably

Limited to Active Migration, But Even If It

Includes Some Forms of Sudden Passive -

Migration, It Never Includes Gradual Passive

Migration of Contaminants Placed Directly

On or In the Soil.

In United States v. CDMG Realty Co., 96 F.3d 706, 714

(3d Cir. 1996), the Third Circuit held that the gradual

passive migration of contaminants was never a “disposal” for

purposes of CERCLA, at least when the migration originated

from the direct placement of contaminants in or on the soil.

Although ‘the court stated that it was inclined to view

“disposal” as always limited to “active” migration, id., it

recognized (without deciding the issue) the potential that

some sudden forms of passive migration might constitute a

disposal. Jd. The court also reserved judgment on “whether

continuous seeping of contaminants from a hole in a drum

constitutes [a] ‘disposal.’” Jd. at n.3.

C. The Second Circuit: “Mere Passive

Migration” of Contaminants Is Not a

CERCLA Dispesal, Except Possibly for

Leaking Barrels.

In ABB Industry Systems, Inc. v. Prime Technology,

Inc., 120 F.3d 351, 359 (2d Cir. 1997), the Second Circuit

held that “mere passive migration” during ownership does

10

not trigger CERCLA liability. This seemingly bright-line

holding, however, was qualified by a footnote in which the

court stated that it expressed “no opinion” on whether

leaking barrels might constitute a CERCLA disposal. See id.

at 358 n.3.

D. The Sixth Circuit: Passive Migration Is

Never a CERCLA Disposal.

In United States v. 150 Acres of Land, 204 F.3d 698 (6th

Cir. 2000), the Sixth Circuit held that the term “disposal”

under CERCLA is confined to the “movement of hazardous

substances” in which there is “human activity involved.” Id.

at 706. The Sixth Circuit did not provide any qualification to

this bright-line rule.

E. Summary of the Disarray in the Circuits

The incongruous decisions of the five circuits that have

addressed the issue of passive disposal indicate no

consensus, nor even a trend. Rather, one is left with a

bewildering array of views.

At one end of the continuum, the Fourth Circuit holds

that passive soil migration constitutes a “disposal” for

CERCLA purposes without qualification. The Ninth Circuit

in this case held that whether gradual passive soil migration

constitutes a “disposal” for CERCLA purposes depends upon >

whether or not the contaminants were originally placed in a

container or vessel. The Third Circuit states that “disposal”

under CERCLA is probably limited to strictly “active” forms .

of contaminant migration, but that even if some sudden

forms of passive migration are included in the term

“disposal,” the gradual passive soil migration of

contaminants originally placed directly in or on the soil

definitely does not, and reserves judgment on whether the

11

gradual migration of contaminants from _ containers

constitutes a “disposal.” The Second Circuit holds that

“mere passive migration” does not constitute a CERCLA

“disposal,” but reserves judgment on whether passive

migration from leaking barrels constitutes a “disposal.” At

the other end of the continuum, the Sixth Circuit adheres to

the bright-line rule that passive migration is never a

CERCLA “disposal.”

II. The Question Presented Is Crucial to CERCLA

Enforcement and Affects the Rights and Liabilities

of Governmental and Private Parties Across the

Nation.

The overriding purpose of CERCLA is to protect human

health and the environment from the dangers posed by

hazardous substances. See S. REP. No. 96-848, at 51-63

(1980) (stating that paramount purpose for response

authority provided by S. 1480 is protection of health,

welfare, and environment). The two principal goals of the

statute are to clean up hazardous waste sites promptly and

effectively, and to ensure that those whom the statute defines

as responsible parties bear the costs for remedying harmful

conditions. United States v. Aceto Agric. Chems. Corp., 872

F.2d 1373, 1380 (8th Cir. 1989) (quoting United States v.

Reilly Tar & Chem. Corp., 546 F. Supp. 1100, 1112 (D.

Minn. 1982)). Congress determined that both goals were

important federal interests. The United States’ ability to

achieve those goals depends on CERCLA’s effective

implementation and enforcement, as well as clarity in the

interpretation of the statute’s liability provisions.

Specifically, CERCLA cannot be effectively implemented or

enforced without clarity as to the meaning of the term

“disposal” as it is used in the statute.

12

The question of liability for intermediate landowners is

certain to arise again and again. The government estimates

there may be as many as 600,000 waste sites requiring

cleanup. See Andrew R. Klein, Hazardous Waste Cleanup

and Intermediate Landowners: Reexamining the Liability-

Based Approach, 21 HARV. ENVTL. L. REV. 337, 338 (1997).

Each of those sites is the potential subject of litigation,

initiated either by private parties or by the government. Each

piece of litigation is likely to draw in intermediate

landholders. On an important issue, such as this, where the

circuits are in disarray, the sheer magnitude of the problem

in controversy demands resolution by this Court.

As matters now stand, whether or not an intermediate

prior landholder must help bear the costs for cleaning up

hazardous substances that passively migrated through soil

depends on the judicial circuit in which the litigation is

brought. Properly, however, it should depend on a clear

understanding of what Congress meant by the term

“disposal” when it enacted CERCLA. The lower courts

cannot agree on that meaning, so it is up to this Court to

achieve stability in the law on this crucial question.

Until that happens, literally thousands (perhaps tens or

even hundreds of thousands) of Carson Harbor Villages —

innocent landholders who clean up their properties, who

thereafter seek contribution from prior owners as provided

for by CERCLA — will face great uncertainty and may be left

paying cleanup costs while intermediate landowners

similarly situated pay nothing. In the Ninth Circuit (and the

other circuits that have taken similar positions), landowners

may be understandably reluctant to undertake cleanup

efforts, knowing they may not recover their loss. Indeed,

landowners might be better off by simply ignoring potential

environmental conditions on their property and selling it,

rather than running the risk of undertaking expensive

13

remediation efforts. In this scenario, the “last one holding

the bag” pays, resulting in a game of musical chairs in which

similarly situated parties fare differently based solely on

where they stand in the chain of title.

Outside of the circuits that have ruled on this question,

the uncertainty over what constitutes a CERCLA “disposal”

looms over virtually every commercial real estate and

financing transaction, as well as corporate acquisitions and

mergers. In these other circuits where the courts have not

spoken on the issue, virtually every commercial transaction

will amount to a “Russian roulette” of environmental risks

until this question is clarified. Buyers and sellers will not

know the full panoply of potential environmental liabilities

to which a transaction might expose them, and counsel

advising such buyers and sellers will have to advise that any

number of outcomes (as exemplified by the disarray in the

circuits) are possible.

Moreover, the importance of the meaning of “disposal”

is not limited to private litigants. The federal government’s

“ability to protect the environment and public health depends

in a significant manner on the scope of the term ‘disposal’ as

it is used in CERCLA.” Brief Amicus Curiae for the United

States in Support of Appellant at 2, filed in Carson Harbor

Village, 270 F.3d 863. This is so because Congress has

entrusted the EPA with the authority to enforce CERCLA.

Id. (citing 42 U.S.C. § 9604(a)). The EPA undertakes a large

number of hazardous substance cleanups under CERCLA

and brings cost recovery actions under 42 U.S.C. § 9607(a)

to spread the costs of the cleanups to responsible parties.

The meaning of “disposal” affects the government’s ability

to recover the EPA’s cleanup costs against prior owners and

operators of sites contaminated by hazardous substances

because defendants in that class can be liable under

14

CERCLA only if they owned or operated the site at the time

of the disposal. Jd.

Frankly, the federal government needs the ability to

recover costs from intermediate landholders. CERCLA

cleanup costs may exceed half a trillion dollars. See Michael

J. Gergen, The Failed Promise of the “Polluter Pays”

Principle: An Economic Analysis of Landowner Liability for

Hazardous Waste, 69 N.Y.U. L. REV. 624, 624 (1994). The

obvious rejoinder is that if Congress needs money from

intermediate landholders, it should create a statutory scheme

under which intermediste prior landholders in_ the

Partnership Defendants’ circumstances are expressly

identified as potentially responsible parties. But if the Ninth

Circuit panel and the Fourth Circuit are correct, Congress

already has expressed its intent. Before Congress can amend

the law to enhance its effectiveness, this Court must declare

what the law is, given the diverging interpretations in the

circuits.

Finally, several states have adopted CERCLA’s

definition of “disposal” or a closely analogous definition for

determining who is a potentially responsible party under

their own environmental cleanup laws. For example, the

California environmental cleanup statute provides that

“‘responsible party’ or ‘liable person,’ for the purposes of

this chapter, means those persons described in Section 107(a)

of [CERCLA] (42 U.S.C. Sec. 9607(a)).” CAL. HEALTH &

SAFETY CODE § 25323.5; see also id. § 25113. Other states

have followed suit.? The uncertainty as to the meaning of

> The following states employ a definition of “disyosal”

identical (or nearly identical) to CERCLA’s: Delaware, see DEL.

CODE ANN., tit. 7, §§ 6302, 9103; Georgia, see GA. CODE ANN. §

12-8-62; Idaho, see IDAHO CODE § 39-4403; Maine, see ME. REV.

STAT. ANN. tit. 38, §§ 1317, 1319-C; New Hampshire, see N.H.

15

“disposal” thus has a ripple effect by creating uncertainty in

the enforcement of state environmental cleanup laws that are

predicated on CERCLA’s statutory scheme.

Ill. The Ninth Circuit’s En Banc Holding That the

Gradual Passive Migration of Contaminants

Originally Placed Directly In or On the Soil Does

Not Constitute a CERCLA “Disposal” Is

Erroneous and Nonsensical.

A. The Plain and Ordinary Meaning of the

Relevant Terms Includes the Gradual

Passive Migration of Contaminants

Originally Placed Directly In or On the Soil.

CERCLA explicitly incorporates the definition of

“disposal” from the Resource Conservation and Recovery ,

Act (“RCRA”). 42 U.S.C. § 9601(29). RCRA in turn

defines “disposal” as

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 constitute 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) (emphasis added).

REV. STAT. ANN. § 147-B:2; New York, see N.Y. ENVTL.

CONSERV. LAW § 27-0901; Ohio, see OHIO REV. CODE ANN. §

3734.01; Pennsylvania, see 35 PA. CONS. STAT. § 720.103.

16

The Ninth Circuit en banc agreed that most of the

relevant terms in this definition of “disposal” include both

passive and active connotations. See App. 26.

Notwithstanding this conclusion, the en banc court held that

“the gradual passive migration of contamination of soil . . .

was not a ‘discharge, deposit, injection, dumping, spilling,

leaking, or placing’ and, therefore, was not a ‘disposal’

within the meaning of § 9607(a)(2).” App. 27. In making

this assertion, which Judge Betty Fletcher in dissent aptly

characterized as an “ipse dixit,” see App. 50, the en banc

court failed to cite a single dictionary to determine the plain

and ordinary meaning of the terms “discharge,” “deposit,”

“spilling,” and “leaking.”

Dictionary definitions confirm that each of these four

terms comprehends the gradual passive migration of

contaminants originally placed directly in or on the soil. For

example, the Webster’s Third New Int’l Dictionary of the

English Language (“Webster's 3d”) defines “discharge” as

“to give outlet to; pour forth: emit . . . to release or give vent

to . . . to emit or give vent to fluid or other contents.” App.

51 n.3. In this case, the tar-like and slag waste material that

was originally placed directly in or on the soil emitted lead

and hydrocarbons that spread through and beyond the

surrounding soil.

The definition of “deposit” in the Oxford English

Dictionary includes “the laying down of substances held in

solution, and of similar operations wrought by natural

agencies.” App. 50 (emphasis added). Similarly, Webster’s

3d defines “deposit” as “to lay down or let fall or drop by a

natural process: foster the accretion or accumulation as of a

natural deposit.” Jd In this case, lead and hydrocarbons

spread from the tar-like and slag waste material by natural

agencies of soil migration.

17

Webster's New Collegiate Dictionary (1980)

(“Webster's Collegiate”) defines “spilling” as “to spread

profusely or beyond bounds” and to “flow, run, or fall out,

over or off and become wasted, scattered, or lost.” This

describes exactly what happened in this case: lead and

hydrocarbon particles spread beyond their original bounds in

tar-like and slag waste materials by a process of natural

migration through the soil.

Webster’s Collegiate defines “leak” as “to enter or

escape through an opening, usually by a fault or mistake.”

Here, lead and hydrocarbons spread through the soil from

their original location in the tar-like and slag waste material

by natural openings in the material and in the soil. Hence,

the migration of lead and hydrocarbons through such

openings could be characterized as a “leak.” Had the waste

material or the soil been impermeable, the lead and

hydrocarbons would not have spread, and there would have

been no “leak.” But here, the waste material and the soil

were permeable and lead and hydrocarbons spread through

them in a form of leakage.

In sum, the en banc court simply erred in holding that

the plain and ordinary meanings of the terms “discharge,”

“deposit,” “spilling,” and “leaking” do not comprehend the

passive migration of contaminants originally placed directly

in or on the soil. The dictionary definitions of these terms .

confirm that their plain and ordinary meanings do encompass

such passive migration of contaminants that were so placed.

B. The Ninth Circuit En Banc Decision Frustrates

the Purposes of CERCLA and Leads to

Absurd Results.

As Judge Betty Fletcher observed in dissent, the Ninth

Circuit en banc decision frustrates CERCLA’s purpose of

18

ensuring prompt and effective cleanup of environmental

contamination. See App. 53. The en banc decision holds

that contaminants that migrate through the soil after being

placed directly in or on the soil do not constitute a

“disposal,” but that the very same contaminants, if placed in

leaking drums, -would constitute a disposal triggering

CERCLA liability because that would constitute a “spill” or

“leak.” In the former case, under the en banc decision the

landowner has no incentive to clean up the problem, but

instead has every incentive to sell the property and thereby

escape liability completely.

It makes no sense, as the en banc decision has decided

the issue, to hinge the CERCLA liability of intermediate

landowners on whether the initial placement of the

hazardous substances was in a container such as an

underground storage tank or whether it was placed directly

into or on the soil. It is equally senseless to interpret

“disposal” as turning on the relative speed of the migration

of contaminants. Whether initially contained or not, and

whether the migration is sudden or gradual, hazardous

contaminants pose a threat, and the goal of Congress was to

effectuate a cleanup. Indeed, the uncontained material of

necessity must pose a greater and more immediate threat, but

the en banc decision produces the absurd result of taking

away any incentive for intermediate landowners to deal

responsibly with the greater hazard of uncontained

substances.

The Ninth Circuit en banc decision also frustrates

CERCLA’s purpose of ensuring that parties responsible for

environmental contamination bear their fair share of cleanup

costs. See Judge Fletcher’s dissent at App. 54-59. Under the

en banc decision, a unique category of landowners —

intermediate owners of lands where hazardous wastes were

placed directly onto or in the soil — are completely

— ©

19

immunized from any CERCLA liability, which reduces the

pool of parties that might contribute to cleanup costs.

Necessarily, it must also increase the liabilities of current

owners like Carson Harbor who are as free from fault as such

intermediate owners.* It cannot have been Congress’s

purpose to treat similarly situated parties so differently.

Finally, in Nurad, the Fourth Circuit explained how

CERCLA’s purposes would be frustrated by an interpretation

of “disposal” that was limited to active migration. The

Fourth Circuit’s analysis by Judge Wilkinson equally applies

to the Ninth Circuit’s interpretation, which at most permits a

finding of “disposal” when passive migration results from

the placement of contaminants into containers or vessels:

It is easy to see how the district court’s

requirement of active participation would

frustrate the statutory purpose of encouraging

“voluntary private action to remedy

environmental hazards.” Under the district

court’s view, an owner could avoid liability

simply by standing idle while an

environmental hazard festers on his property.

Such an owner could insulate himself from

liability by virtue of his passivity, so long as

he transfers the property before any response

costs are incurred. A more conscientious

owner who undertakes the task of cleaning up

* As Judge Fletcher also noted in dissent, the en banc court’s

decision was not necessary to preserve the innocent landowner

defense found at 42 U.S.C. § 9601(35)A). An intermediate

landowner who purchased the property while passive migration

was underway (the “disposal”) would still be able to invoke the

defense by proving that he or she purchased the property after the

“placement” of the hazardous wastes. See App. 55-57.

20

the environmental hazard would, on the other

hand, be liable as the current owner of the

facility, since “disposal” is not a part of the

current owner liability scheme under 42

U.S.C. § 9707(a)(1). The district court’s view

thus introduces the anomalous situation where

a current owner, such as Nurad, who never

used the storage tanks could bear a substantial

share of the cleanup costs, while a former

owner who was similarly situated would face

no liability at all. A CERCLA regime which

rewards indifference and_ discourages

voluntary efforts at waste cleanup cannot be

what Congress had in mind.

The district court’s view of the CERCLA

definition of disposal is also at odds with

CERCLA’s strict liability emphasis. The

trigger to liability under § 9707(a)(2) is

ownership or operation of a facility at the

time of disposal, not culpability or

responsibility for the contamination. We

must decline therefore to engraft onto the

statute additional prerequisites to the

reimbursement of response costs which

Congress did not place there.

Nurad, 966 F.2d at 845-46 (emphasis added and citations |

omitted).

21

CONCLUSION

For the reasons provided above, the Court should grant

the petition for a writ of certiorari.

Respectfully submitted,

M. MILLER BAKER

Counsel of Record

RICHARD B. ROGERS

MICHAEL S. NADEL

McCDERMOTT, WILL & EMERY

600 13th Street, N.W.

Washington, D.C. 20005

(202) 756-8000

RICHARD H. CLOSE

FRANK GOOCH III

THOMAS W. CASPARIAN

GILCHRIST & RUTTER

PROFESSIONAL CORPORATION

1299 Ocean Avenue, Suite 900

Santa Monica, California 90401

(310) 393-4000

CHRIS M. AMANTEA

MCDERMOTT, WILL & EMERY

2049 Century Park Easi

Los Angeles, California 90067

(310) 277-4110

Attorneys for Petitioner

Carson Harbor Village, Ltd.