Appendix — Carson Harbor Village, Ltd. v. Braley

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IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

SITTING EN BANC

| q CARSON HARBOR VILLAGE, LTD.,

a limited partnership dba Carson Harbor Village

Mobilehome Park,

Plaintiff-counter-defendant-Appellant

vz.

UNOCAL CORPORATION,

a Delaware Corporation

Defendant-cross-defendant

and

CITY OF CARSON,

Defendant-cross-defendant-cross-claimant-Appellee

270 F.3d 863

Appeal from the United States District Court

for the Central District of California

Filed October 24, 2001

Before: Mary M. Schroeder, Chief Judge, and

Procter Hug, Jr., Betty B. Fletcher, Harry Pregerson, Alex

Kozinski, Thomas G. Nelson, Michael Daly Hawkins, M.

Margaret McKeown, Richard A. Paez, Marsha S. Berzon,

and Richard C. Tallman, Circuit Judges.

App. 2

McKEOWN, Circuit Judge:

This appeal stems from the environmental cleanup of

a contaminated wetlands site used originally for petroleum

production and later as a mobile home park. The current

property owner, Carson Harbor Village, Ltd. (“Carson

Harbor”), brought suit principally under the Comprehensive

Environmental Response, Compensation, and Liability Act

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

of costs associated with the cleanup. We are called upon to

determine whether, as a matter of law, those cleanup costs

were “necessary” and whether certain of the defendants are

“potentially responsible parties” (“PRPs”) under CERCLA §

107(a), 42 U.S.C. § 9607(a).

The touchstone for determining the necessity of

response costs is whether there is an actual threat to human

health or the environment; that necessity is not obviated

when a party also has a business reason for the cleanup.

Because the district court erred in focusing on the ulterior

business motive for remediation and because there are

genuine issues of material fact regarding whether Carson

Harbor’s response costs were, in fact, “necessary,” we

cannot uphold summary judgment on this ground.

Even if we assume that those costs were necessary,

we still must decide whether defendants Carson Harbor

Village Mobile Home Park, Richard G. Braley, and Walker

Smith, Jr. (the “Partnership Defendants”) are PRPs; if not,

summary judgment was nonetheless appropriate. Parsing the

meaning of the term “disposal” in § 9607(a)(2) lies at the

heart of this question. We conclude that the migration of

contaminants on the property does not fall within the

statutory definition of “disposal.” Thus, on the CERCLA

claim, we affirm the district court’s grant of summary

judgment for the Partnership Defendants. ;

App. 3

We must also address the remaining issues. We

affirm the district court’s grant of summary judgment to

defendants City of Carson, County of Los Angeles, and City

of Compton on Carson Harbor’s state claims. Finally, with

respect to Carson Harbor’s claim for indemnity against the

Partnership Defendants, in view of our holding that there are

genuine issues of material fact regarding the necessity of

Carson Harbor’s response costs, we reverse the grant of

summary judgment.

BACKGROUND

Carson Harbor owns and operates a mobile home

park on seventy acres in the City of Carson, California. From

1977 until 1983, prior to Carson Harbor’s ownership,

defendant Carson Harbor Village Mobile Home Park, a

general partnership controlled by defendants Braley and

Smith (the “Partnership Defendants”), owned the property.

They, like Carson Harbor, operated a mobile home park on

the property. Beginning over thirty years earlier, however,

from 1945 until 1983, Unocal Corporation held a leasehold

interest in the property and used it for petroleum production,

operating a number of oil wells, pipelines, above-ground

storage tanks, and production facilities.

An undeveloped open-flow wetlands area covers

approximately seventeen acres of the site. Properties located

upstream from the property are in the Cities of Carson and

Compton and unincorporated areas within the County of Los

Angeles (i.e., the “Government Defendants”). Storm water

feeds into the wetlands from those properties through storm

drains. California Highway 91 (the Artesia Freeway), which

is operated by the California Department of Transportation

(“Caltrans”), is also located immediately upstream from the

App. 4

property. Runoff from approximately three miles of the

highway drains into the wetlands.

While attempting to refinance the property in 1993,

Carson Harbor discovered hazardous substances on the site.

The prospective lender commissioned an environmental

assessment, which revealed tar-like and slag materials in the

wetlands area of the property. Subsequent investigation

revealed that the materials were a waste or by-product of

petroleum production and that they had been on the property

for several decades prior to its development as a mobile

home park.

Much of the tar-like and slag materials was covered

with soil and vegetation. A portion of the tar-like material,

however, was visibie on the surface in an area measuring

approximately twenty feet wide by thirty feet long. The slag

material appeared to have been deposited on top of the tar-

like material and was visible in an area approximately thirty

feet by 170 feet. Subsequently, it was determined that the

contaminated area covered an area approximately seventy-

five feet wide by 170 feet long and extended from one to five

feet below the surface. The material and surrounding soils

contained elevated levels of petroleum hydrocarbons

(measured in “total petroleum hydrocarbons” or “TPH”) and

lead; and soil samples upgradient of -the materials also

contained elevated levels of lead. These levels exceeded

state reporting limits.

As required by law, Carson Harbor’s environmental

consultants reported their findings to the appropriate

agencies. The Regional Water Quality Control Board (the

“Water Quality Board”) and its Site Cleanup Unit Chief,

James Ross, assumed the lead in the cleanup effort. Carson

Harbor requested a no-further-action letter from the Water

Quality Board before proposing cleanup, and submitted a

App. 5

remedial action plan (“RAP”), proposing to remove the tar-

like and slag materials and impacted soils. Because the

highest concentrations of TPH and lead contamination were

associated with the tar-like and slag materials, the RAP did

not address other areas of elevated TPH and lead

contamination. Ross approved the RAP but required Carson

Harbor to bring the contamination down to a lower level than

that proposed in the RAP.

The tar-like and slag materials were removed from

the property in 1995. Over the course of five days, 1,042

tons of material were removed. In all but four of the soil

samples taken after the cleanup, TPH and lead levels were

within the state-required limits. The Water Quality Board

staff conducted a site visit and independent soil testing. Ross

then sent a closure letter to Carson Harbor, stating that

the removal is complete to the extent required

by this Board. ... We have concluded that all

the requirements established by this Board in

our RAP approval letter . . . have been

complied with. In addition, the contamination

has been successfully removed and the

remaining soil in the bottom of the

watercourse poses no further threat to surface

waters of the State. We, therefore, conclude

that no further action is required at this site.

In 1997, Carson Harbor brought suit against the Partnership

Defendants, the Government Defendants, and Unocal

seeking relief under federal environmental statutes,

' Although Caltrans and James W. van Loben Sels, as the

Director of Caltrans, are also named in the complaint, they are not

identified in any of the causes of action at issue in this appeal.

a |

App. 6

CERCLA, the Resource Conservation and Recovery Act

(“RCRA”), 42 U.S.C. § 6901 ef seg., and the Clean Water

Act (“CWA”), 33 U.S.C. § 1251 ef seg., and for state

common law claims of nuisance, trespass, injury to

easement, indemnity, and negligent nondisclosure. Carson

Harbor sought to recover the costs of its cleanup (which

totaled approximately $285,000) as well as damages arising

from its inability to refinance the property. According to

Carson Harbor, Unocal is responsible for dumping the tar-

like and slag materials on the property; the Partnership

Defendants are liable as past owners of the property; and the

Government Defendants and Caltrans are liable for lead on

the property that resulted from lead-contaminated storm

water runoff, which may have contributed either to the lead

found in the tar-like and slag materials or the elevated lead

levels outside those materials.

The parties stipulated to the dismissal of the

negligent non-disclosure claim and cross-moved for

summary judgment on the remaining claims. The district

court granted the defendants’ motions on all claims except

the state-law nuisance and trespass claims asserted against

Unocal. See Carson Harbor Vill., Ltd. v. Unocal Corp., 990

F. Supp. 1188, 1199 (C.D. Cal. 1997). The court first held

that Carson Harbor’s CERCLA claim fails because it did not

show that its remedial action was “necessary” under 42

U.S.C. § 9607(a)(4)(B) because there was no evidence of an

“actual and real threat” to human health or the environment. —

Id. at 1193-94. In so holding, the district court disregarded

certain evidence to the contrary as inadmissible hearsay. See

id. at 1193 n.4. In the alternative, with respect to the

Partnership Defendants, the district court held that they were

not PRPs within the meaning of 42 U.S.C. § 9607(a)(2)

because “disposal warranting CERCLA liability requires a

showing that hazardous substances were affirmatively

introduced into the environment.” Jd. at 1195. And, with

App. 7

respect to the storm water runoff, there was no direct

evidence that any lead-contaminated storm water entered the

property at any time prior to 1983, when Carson Harbor

purchased the property. Jd.

The district court granted summary judgment on the

RCRA claim because the “evidence shows that there was no

imminent danger” to human health or the environment — a

required element for a RCRA claim. /d. at 1196 (emphasis

added). On the CWA claim, the court concluded that there

was no evidence that the defendants violated a National

Pollutant Discharge Elimination System (“NPDES”) permit,

as required for a CWA violation. Jd. at 1197. With respect

to the common law claims for nuisance, trespass, and injury

to easement against the Government Defendants, the district

court held that CAL. Civ. CODE § 3482, which provides that

nothing done pursuant to express statutory authorization can

be deemed a nuisance, provides a complete defense.

Because Carson Harbor failed to show that the Government

Defendants violated the NPDES permits, the court

concluded, any pollutants discharged into the storm water

were permissible. Jd Finally, the district court rejected

Carson Harbor’s claim for express indemnity against the

Partnership Defendants, because the Water Quality Board

did not require the cleanup. See id. at 1198-99.

Carson Harbor appealed the district court’s rulings on

the CERCLA claim, the state-law claims against the

Government Defendants, and the indemnity claim against the

App. 8

Partnership Defendants.* Following the issuance of a panel

opinion, we agreed to hear this case en banc.’

DISCUSSION

We review de novo the district court’s grant of

summary judgment. Block v. City of Los Angeles, 253 F.3d

410, 416 (9th Cir. 2001). Similarly, “the district court’s

interpretation of a statute is a question of law which we

review de novo.” Pinal Creek Group v. Newmont Mining

Corp., 118 F.3d 1298, 1300 (9th Cir. 1997).

I. CERCLA OVERVIEW

CERCLA “generally imposes strict liability on

owners and operators of facilities at which hazardous

substances were disposed.” 3550 Stevens Creek Assocs. v.

Barclays Bank, 915 F.2d 1355, 1357 (9th Cir. 1990). To

achieve that end, CERCLA “authorizes private parties to

institute civil actions to recover the costs involved in the

cleanup of hazardous wastes from those responsible for their

creation.” Jd.; accord Pinal Creek Group, 118 F.3d at 1300

(“Section 107(a) . . . authorizes suits against certain

statutorily defined ‘responsible parties’ to recover costs

incurred in cleaning up hazardous waste disposal sites.”’)

(internal quotation marks and citation omitted).

To prevail in a private cost recovery action, a

? Carson Harbor did not pursue its appeal of the district

court’s rulings on the RCRA and CWA claims.

> Carson Harbor Vill., Ltd. v. Unocal Corp., 240 F.3d 841

(9th Cir. 2001) (withdrawing Carson Harbor Vill., Lid. v. Unocal

Corp., 227 F.3d 1196 (9th Cir. 2000)).

App. 9

plaintiff must establish that (1) the site on

which the hazardous substances are contained

is a “facility” under CERCLA’s definition of

that term, Section 101(9), 42 U.S.C. §

9601(9); (2) a “release” or “threatened

release” of any “hazardous substance” from

the facility has occurred, 42 U.S.C. §

9607(a)(4); (3) such “release” or “threatened

release” has caused the plaintiff to incur

response costs that were “necessary” and

“consistent with the national contingency

plan,” 42 U.S.C. §§ 9607(a)(4) and (a)(4)(B);

and (4) the defendant is within one of four

classes of persons subject to the liability

provisions of Section 107(a).

3550 Stevens Creek Assocs., 915 F.2d at 1358 (footnote

omitted). The third and fourth of these elements are at issue

here. With respect to the fourth element, 42 U.S.C. §

9607(a) sets out the “four classes of persons subject to the

liability provisions.” Jd. Those persons are “potentially

responsible parties” or “PRPs.” See Pritikin v. Dep't of

Energy, 254 F.3d 791, 795 (9th Cir. 2001). We must decide

in this case whether the Partnership Defendants fit within the

second PRP category; namely, whether they owned the

contaminated property “at the time of disposal of any

hazardous substance.” 42 U.S.C. § 9607(a)(2).

Also relevant to our analysis, although not the basis

of the judgment here, is the fact that even if the plaintiff

establishes the requisite four elements for recovery, a

defendant may assert a variety of defenses to liability. Most

relevant here are the so-called “third party” and “innocent

landowner” defenses, by which a PRP may show that the

release of hazardous substances was caused solely by “an act

or omission of a third party,” 42 U.S.C. § 9607(b)(3), or that

App. 10

“the disposal or placement of the hazardous substance”

occurred before the PRP acquired the property. 42 U.S.C. §

9601(35)(A). In this way, the interpretation of “disposal”

affects the application of these defenses. See infra section III.

B.2.b.

Once liability is established, the defendant may avoid

joint and several liability by establishing that it caused only a

divisible portion of the harm — for example, it contributed

only a specific part of the hazardous substances that spilled.

Even if a defendant cannot do so, it may seek contribution

from other PRPs under 42 U.S.C. § 9613(f)(1). See Pinal

Creek Group, 118 F.3d at 1300 (noting that Congress’s

amendment of CERCLA to include § 9613(f)(1) “clarifies

and confirms” that contribution is available to PRPs). “A

PRP’s contribution liability will correspond to that party’s

equitable share of the total liability and will not be joint and

several.” Jd. at 1301. The contribution provision aims to

avoid a variety of scenarios by which a comparatively

innocent PRP might be on the hook for the entirety of a large

cleanup bill.

II. GENUINE ISSUES OF MATERIAL FACT

PRECLUDE SUMMARY JUDGMENT ON

WHETHER THE RESPONSE COSTS WERE

“NECESSARY” :

Remediation costs are recoverable under CERCLA

only if “necessary.” It is generally agreed that this standard

requires that an actual and real threat to human health or the

environment exist before initiating a response action. See,

e.g., EPA v. Sequa Corp. (In re Bell Petroleum Servs., Inc.),

3 F.3d 889, 905-06 (Sth Cir. 1993); Southfund Partners III v.

Sears, Roebuck & Co., 57 F. Supp. 2d 1369, 1378 (N.D. Ga.

1999); Foster v. United States, 922 F. Supp. 642, 652

(D.D.C. 1996); Yellow Freight Sys., Inc. v. ACF Indus., Inc.,

App. 11

909 F. Supp. 1290, 1299 (E.D. Mo. 1995); G.J. Leasing Co.

v. Union Elec. Co., 854 F. Supp. 539, 561-62 (S.D. IIl.

1994), aff'd, 54 F.3d 379, 386 (7th Cir. 1995).

Although the district court correctly referenced this

standard, it went on to follow the “ulterior motive” analysis

established by the district court in G.J/. Leasing Co., 854 F.

Supp. at 562. There, the court held that, to the extent

cleanup activities are taken for reasons other than because of

“an actual and real public health threat,” cleanup costs are

not “necessary.” Jd Because there was evidence in G.J.

Leasing that the cleanup of asbestos contamination was

motivated by business reasons (specifically, the desire to

convert the property to new uses), the court held that the

cleanup costs were not “necessary.” Accord Foster, 922 F.

Supp. at 652-53; Yellow Freight Sys., 909 F. Supp. at 1299.

In concluding that Carson Harbor’s response costs

were not “necessary,” the district court relied on G.J.

Leasing’s ulterior motive analysis. Specifically, it relied on

the testimony of James Ross, the Water Quality Board Site

Cleanup Unit Chief. Ross testified that he would “not likely”

have required Carson Harbor to cleanup the site if Carson

Harbor had not come to him with a remediation plan:

Q: If the owners had not come to you with a

remediation plan, if they had simply reported

to you that this is what we see here, would

you have required them to develop some

remediation plan?

A: Not likely.

Q: As far as you were concerned, this stuff,

even the slag and tar-like material, could have

just stayed there?

App. 12

A: Very likely.

Q: So, then, basically, this remediation was

done at their initiative for their own reasons

and not because of any environmental or

health problem that was perceived by the

Regional Board?

A: Yes.

Carson Harbor, 990 F. Supp. at 1193.

The district court’s reliance on this testimony

highlights its adoption of the G.J. Leasing analysis and its

decision to disregard evidence that created a genuine issue of

material fact on the linchpin issue of necessity. In

determining whether response costs are “necessary,” we

focus not on whether a party has a business or other motive

in cleaning up the property, but on whether there is a threat

to human health or the environment and whether the

response action is addressed to that threat. It is unrealistic to

believe that clean up is necessarily motivated by

eleemosynary factors. Although a private plaintiff will

almost always have a business or financial motive for

cleaning up a site, such subjective intent is simply not part of

the calculus. Rather, we focus on the objective

circumstances of each case. The issue is not why -the

landowner decided to undertake the cleanup, but whether it

was necessary. See Cadillac Fairview/Cal., Inc. v. Dow

Chem. Co., 840 F.2d 691, 695 (9th Cir. 1988) (necessity is a

factual question). To hold otherwise would result in a

disincentive for cleanup. Indeed, the cleanup may be

motivated by many factors, such as fear of a government

enforcement action, landowner liability, and even self-

serving economic reasons.

App. 13

Nor must a plaintiff show agency action as a

prerequisite to cost recovery. Agency inaction is not

dispositive of the question whether contamination presents

an environmental risk worthy of response. See id. (“The

district court erred in ruling that some governmental entity

must authorize and initiate a response action for that action

to be necessary and consistent with the national contingency

plan.”); NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th

Cir. 1986) (holding that response costs can be “necessary”

even though the agency that required cleanup never

approved the response actions taken). Whether the Water

Quality Board would have ordered remediation is not a

definitive determination of whether there is a health or

environmental risk.

Although agency inaction is not dispositive, an actual

agency cleanup order is highly relevant and, in some cases,

compelling on the necessity question. Here, there was

conflicting evidence on this point. Some evidence in the

record also suggests that the Water Quality Board required

the remediation and that it perceived a threat to public health

or the environment. In his deposition, Ross conceded that

lead contamination from the tar and slag material presented a

threat to surface and groundwater:

Q: Do you agree that this project was a surface

water quality protection issue?

A: In part, yes.

Q: What do you mean “in part”?

A: Well, it also has the potential to be

groundwater.

App. 14

Q: Okay. So do you think that there might be a

threat to groundwater as a result of the

contamination on the property?

A: Certainly occurred to me.

Q: What hazardous substances on the property

did you think were a threat to groundwater?

A: Lead primarily.

Q: Did the levels of lead that were found on

this property have the potential to get into the

groundwater?

A: Yes, the soluble lead.

Ross also testified that the level of lead contamination on the

property “would require something to be done.”

A review of the Water Quality Board’s conduct also

supports the conclusion that it perceived a threat to public

health or the environment: The Board withheld the no-

further-action letter Carson Harbor’s consultant requested

shortly after he sent the initial notice of contamination on the

property. Instead of adopting the consultant’s recommended

cleanup levels, the Board required lower lead levels. And,

after the cleanup, a Board representative inspected the site to

verify that the contamination had been adequately remedied

before it issued the no-further-action letter. Finally, the letter

predicates closure on a finding that “the remaining soil in the

bottom of the watercourse poses no further threat to surface

waters of the State.”

The district court also excluded certain evidence as

hearsay, namely, the testimony of Carson Harbor’s expert,

App. 15

environmental consultant Dr. Hassan Amini, and a

memorandum written by a Unocal employee. In marked

contrast to Ross’s testimony that in the first instance a

remediation would likely not have been required, Amini

testified that the Water Quality Board ordered the cleanup,

and the memorandum corroborates that testimony, as does

correspondence between Amini and Ross.

When properly considered, this evidence of Ross’s

prior inconsistent statements creates a genuine issue of

material fact about whether Carson Harbor’s response costs

were “necessary.” This evidence falls within the “basic rule

of evidence . . . that prior inconsistent statements may be

used to impeach the credibility of a witness.” United States

v. Hale, 422 U.S. 171, 176, 45 L. Ed. 2d 99, 95 S. Ct. 2133

(1975); accord United States v. Bao, 189 F.3d 860, 866 (9th

Cir. 1999) (“Because a declarant’s prior inconsistent

statement is not offered for its truth, it is not hearsay.”). In

addition, experts are entitled to rely on hearsay in forming

their opinions. See FED. R. Evip. 703 (“If [the underlying

facts or data are] of a type reasonably relied upon by experts

in the particular field in forming opinions or inferences upon

the subject, the facts or data need not be admissible in

evidence in order for the opinion or inference to be

admitted.”); United States v. McCollum, 732 F.2d 1419,

1422-23 (9th Cir. 1984) (applying Rule 703 to affirm the

admission of expert testimony based on hearsay). Thus, the

evidence was admissible because it was part of the basis for

Amini’s expert opinion about whether the contamination

posed a threat to public health or the environment such that

the Water Quality Board would require cleanup. The district

court therefore erred by disregarding this evidence.

In light of this conflicting evidence, genuine issues of

material fact preclude summary judgment on the issue of

whether Carson Harbor’s response costs were “necessary.”

App. 16

Therefore, with respect to Unocal and the Government

Defendants the district court erred by granting summary

judgment in their favor on the CERCLA claim. We discuss

the CERCLA claim against the Partnership Defendants,

below.

We decline to address in the first instance the

Government Defendants’ remaining CERCLA arguments,

including their arguments that they are, nevertheless, entitled

to summary judgment because Carson Harbor’s response

costs were not consistent with the national contingency plan,

see 42 U.S.C. § 9607(a)(4)(B); because federally permitted

releases are exempt from CERCLA coverage under 42

U.S.C. § 9607(j); and because the third party defense applies.

We leave these issues for the district court’s consideration on

remand.

Ill. THE CONTAMINANT MIGRATION AT ISSUE

HERE IS NOT A DISPOSAL UNDER CERCLA

The fourth element of Carson Harbor’s cost recovery

action requires a showing “that the defendant falls within one

of four classes of persons subject to liability under 42 U.S.C.

§ 9607(a).” Kaiser Aluminum & Chem. Corp. v. Catellus

Dev. Corp., 976 F.2d 1338, 1340 (9th Cir. 1992); accord 42

U.S.C. § 9613(f)(1) (“Any person may seek contribution

from any other person who is liable or potentially liable

under section 9607(a) ....” ). Those four categories of

persons are “potentially responsible parties” or “PRPs.”

To determine whether the Partnership Defendants are

PRPs, we must decide whether there was a “disposal” during

their ownership of the property. This inquiry rests on our

interpretation of the statutory definition of “disposal.” Based

upon the plain meaning of the statute, we conclude that there

was no disposal during the Partnership Defendants’

App. 17

ownership. Therefore, they are not PRPs, and they are not

subject to liability. Accordingly, the district court did not err

in granting summary judgment in their favor on the

CERCLA issue.

A. PRPs, THE MEANING OF “DISPOSAL,”

AND CIRCUIT COURT

INTERPRETATIONS

Section 9607(a), which sets out the four PRP categories,

provides:

(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 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

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

App. 18

response costs, of a hazardous substance, shall

be liable... .

42 U.S.C. § 9607(a) (emphasis added). Carson Harbor

argues that the Parmership Defendants fit within the second

PRP category as owners of the property “at the time of

disposal” under § 9607(a)(2).

CERCLA defines “disposal” for purposes of §

9607(a) with reference to the definition of “disposal” in

RCRA, see 42 U.S.C. § 9601(29), which in turn defines

“disposal” as follows:

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) (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. /d.

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,

App. 19

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) (“The 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).

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 § 9607(a)(2).

Id. at 840. The court rejected the “active-only” approach,

stating:

This 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. § 6903(3) definition of disposal “to

have a range of meanings,” including not only

activé conduct, but also the reposing of

hazardous waste and its subsequent movement

through the environment. Jd. at 164.

App. 20

Id. at 845. The Fourth Circuit concluded “that § 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.”” Jd at 846; accord Crofton

Ventures Lid. P’ship v. G & H P’ship, No. 00-1517, 2001

WL 829885, at *6 (4th Cir. July 24, 2001) (holding that,

“given 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 § 9607(a)(2)”).

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 § 9607(a)(2). Jd. The Third Circuit

heid, 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

“while ‘leaking’ and ‘spilling’ may not require affirmative

human conduct, neither word denotes the gradual spreading

of contamination alleged here.” Jd. at 714.

The next year, the Second Circuit, in ABB Industrial

Systems, similarly addressed whether a current owner could

recover cleanup costs under § 96U7(a)(2) from several

companies that had previously controlled the property. 120

App. 21

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. /d. at 357. The

Second Circuit, relying on the Third Circuit’s analysis of

CERCLA’s language, 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.” Jd. at 359. The court stated:

There 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 ... .

Id. at 354. The Second Circuit, however, “expressed 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.” Jd. at 358 n.3.

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 § 9607(a)(1), acquired the

property after the “disposal” under § 9601(35), because there

is no “disposal” “in the absence of any evidence that there

was human activity involved in whatever movement of

hazardous substances occurred on the property since [the

App. 22

current owners] have owned it.” Jd; see also Bob's

_ Beverage, Inc. v. Acme, Inc., No. 00-3045, 2001 U.S. App.

LEXIS 19589, at *12-13 (6th Cir. Sept. 4, 2001).

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 /50 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.

We have not addressed whether “disposal” in §

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 “ _iding

that “disposal” under § 9607(a)(2) includes _ party’s

movement and spreading of contaminate: soil to

uncontaminated portions of property and that “Congress did

not limit [‘disposal’] to the initial introduction of hazardous

material onto property”).‘ In another context, we have held

* Similarly, under the Clean Water Act (“CWA”), 33

U.S.C. § 1311(a), the movement of soil in the context of an

agricultural activity called “deep ripping” (i.e., deep plowing) can

be a “discharge” of pollutants into wetlands. See Borden Ranch

P’ship v. United States Army Corps of Eng’rs, No. 00-15700, 2001

WL 914217, at *3 (9th Cir. Aug. 15, 2001). Although we

acknowledge that the CWA is a different statutory scheme from

CERCLA, it is noteworthy that, under both environmental statutes,

App. 23

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 § 9607(a)(2) and § 9607(a)(3).

See id. (“Because the [‘disposal’] definition applicable to

actions under § 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.”).

B. STATUTORY CONSTRUCTION *

When interpreting a statute, “our task is to construe

what Congress has enacted.” Duncan v. Walker, 150 L. Ed.

2d 251, 121 S. Ct. 2120, 2124 (2001). “We look first to the

plain language of the statute, construing the provisions of the

entire law, including its object and policy, to ascertain the

intent of Congress.” Northwest Forest Res. Council v.

Glickman, 82 F.3d 825, 830 (9th Cir. 1996) (internal

quotation marks and citation omitted). We will resort to

there is no question that the movement of soil that results from

affirmative conduct can subject responsible persons to liability.

* Although we would normally address the agency’s

interpretation of the statute, see Chevron U.S.A. Inc. v. Natural

Res. Def. Council, Inc., 467 U.S. 837, 844-45, 81 L. Ed. 2d 694,

104 S. Ct. 2778 (1984), here there is no EPA determination as a

point of reference or deference.

App. 24

legislative history, even where the plain language is

unambiguous, “where the legislative history clearly indicates

that Congress meant something other than what it said.”

Perlman v. Catapult Entm’t, Inc. (In re Catapult Entm't,

Inc.), 165 F.3d 747, 753 (9th Cir. 1999). The plain

meaning of the terms used to define “disposal” compels the

conclusion that there was no “disposal” during the

Partnership Defendants’ ownership, because the movement

of the contamination, even if it occurred during their

ownership, cannot be characterized as a “discharge, deposit,

injection, dumping, spilling, leaking, or placing.” 42 U.S.C.

§ 6903(3). This approach is consistent with CERCLA’s

purposes, minimizes internal inconsistency in the statute, and

presents no conflict with CERCLA’s legislative history.

1. PLAIN MEANING

“We begin, as always, with the language of the statute.”

Duncan, 121 S. Ct. at 2124; accord Perlman, 165 F.3d at

750. In examining the statutory language, we follow the

Supreme Court’s instruction and adhere to the “Plain

Meaning Rule”:

It is elementary that the meaning of a statute

must, in the first instance, be sought in the

language in which the act is framed, and if

that is plain, . . . the sole function of the courts

is to enforce it according to its terms.

Where the language is plain and admits of no

more than one meaning the duty of

interpretation does not arise, and the rules

which are to aid doubtful meanings need no

discussion.

App. 25

Caminetti v. United States, 242 U.S. 470, 485, 61 L. Ed. 442,

37 S. Ct. 192 (1917) (citations omitted); accord Negonsott v.

Samuels, 507 U.S. 99, 104-05, 122 L. Ed. 2d 457, 113 S. Ct. -

1119 (1993).

“When a statute includes an explicit definition, [however,]

we must follow that definition, even if it varies from that

term’s ordinary meaning.” Stenberg v. Carhart, 530 U.S.

914, 942, 147 L. Ed. 2d 743, 120 S. Ct. 2597 (2000).

Therefore, we return to the definition of “disposal.” Under §

6903(3), there is a “disposal” when there has been a

- discharge,

- deposit,

- injection,

Py dumping,

- spilling,

- leaking, or

- placing

of solid or hazardous wastes on the property. 42 U.S.C. §

6903(3). CERCLA does not define these terms, but we gain

some insight into their statutory meaning by examining

CERCLA’s definition of “release,” which includes some of

the words used to define “disposal,” as well as the word

“disposing”:

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)... .

App. 26

42 U.S.C. § 9601(22) (emphasis added). “We must presume

that words used more than once in the same statute have the

same meaning.” Boise Cascade Corp. v. United States Envil.

Prot. Agency, 942 F.2d 1427, 1432 (9th Cir. 1991).

Therefore, from these definitions, we can conclude that

“release” is broader than “disposal,” because the definition

of “release” includes “disposing” (also, it includes “passive”

terms such as “leaching” and “escaping,” which are not

included in the definition of “disposal”). But, at the same

time, the definitions of “disposal “and “release” have several

words in common: “discharge”/"discharging”;

“injection”/injecting”; “dumping”; “spilling”; and

“leaking.”

We thus focus on the plain meanings of the terms

used to define “disposal.” We first note that one can find

both “active” and “passive” definitions for nearly all of these

terms in any standard dictionary.* We therefore reject the

absolute binary “active/passive” distinction used by some

courts. Indeed, the substantial overlap in terms used to

define “disposal” and “release” and the presence of both

“active” and “passive” terms in both definitions suggests that

something other than an active/passive distinction governs

the terms.

® The doctrine of noscitur a sociis is, thus, not particularly

helpful. That doctrine stands for the proposition that “‘a word is

known by the company it keeps.’” United States v. King, 244 F.3d

736, 740 (9th Cir. 2001) (quoting Gustafson v. Alloyd Co., 513

U.S. 561, 575, 131 L. Ed. 2d 1, 115 S. Ct. 1061 (1995)). That is,

“‘words are to be judged by their context and . . . words in a series

are to be understood by neighboring words in the series.” Id. at

740-41 (quoting United States v. "Carpenter, 933 F.2d 748, 750-51

(9th Cir. 1991)).

——

App. 27

Instead of focusing solely on whether the terms are

“active” or “passive,” we must examine each of the terms in

relation to the facts of the case and determine whether the

movement of contaminants is, under the plain meaning of the

terms, a “disposal.” Put otherwise, do any of the terms fit

the hazardous substance contamination at issue?

Examining the facts of this case, we hold that the

gradual passive migration of contamination through the soil

that allegedly took place during the Partnership Defendants’

ownersh‘p was not a “discharge, deposit, injection, dumping,

spilling, leaking, or placing” and, therefore, was not a

“disposal” within the meaning of § 9607(a)(2). The

contamination on the property included tar-like and slag

materials. The tar-like material was highly viscous and

uniform, without any breaks or stratification. The slag

material had a vesicular structure and was more porous and

rigid than the tar-like material. There was some evidence

that the tar-like material moved through the soil and that lead

and/or TPH may have moved from that material into the soil.

If we try to characterize this passive soil migration in plain

English, a number of words come to mind, including gradual

“spreading,” “migration,” “seeping,” “oozing,” and possibly

“leaching.” But certainly none of those words fits within the

plain and common meaning of “discharge, . . . injection,

dumping, . . . or placing.” 42 U.S.C. § 6903(3). Although

these words generally connote active conduct, even if we

were to infuse passive meanings, these words simply do not ©

describe the passive migration that occurred here. Nor can

the gradual spread here be characterized as a “deposit,”

because there was neither a deposit by someone, nor does the

term deposit encompass the gradual spread of contaminants.’

’ The dissent’s construction of “deposit” is so broad as to

include virtually any contamination. As used in the statute, the

term is akin to “putting down,” or placement. Nothing in the

App. 28

The term “spilling” is likewise inapposite. Nothing spilled

out of or over anything. Unlike the spilling of a barrel or the

spilling over of a holding pond, movement of the tar-like and

slag materials was not a spill.

Of the terms defining “disposal,” the only one that

might remotely describe the passive soil migration here is

“leaking.” But under the plain and common meaning of the

word, we conclude that there was no “leaking.” The

circumstances here are not like that of the leaking barrel or

underground storage tank envisioned by Congress, as

discussed infra, or a vessel or some other container that

would connote “leaking.” Therefore, there was no

“disposal,” and the Partnership Defendants are not PRPs. On

this basis, we affirm the district court’s grant of summary

judgment to the Partnership Defendants on the CERCLA

claim.

In adopting this plain meaning construction, we are

mindful that the statute will be applied in a myriad of

circumstances, many of which we cannot predict today. And

although most of the terms generally connote active conduct,

we agree with the Third Circuit that, for example, “‘leaking’

and ‘spilling’ may not require affirmative human conduct,

[although] neither word denotes the gradual spreading of

contamination alleged here.” CDMG Realty, 96 F.3d at 714.

This approach does not rule out the scenario in which

“spilling,” “leaking,” or perhaps other terms in some

circumstances, encompasses passive migration. As discussed

context of the statute or the term “disposal” suggests that Congress

meant to include chemical or geologic processes or passive

migration. Indeed, where Congress intended such a meaning, it

employed specific terminology, such as “leaching,” see 42 U.S.C.

§ 9601 (22).

App. 29

below, this approach is consistent with the purpose of

CERCLA.

2. READING THE STATUTE AS A WHOLE

No statutory provision is written in a vacuum.

Complex regulatory statutes, in particular, often create a web

— or, in the case of CERCLA, perhaps a maze — of sections,

subsections, definitions, exceptions, defenses, and

administrative provisions. Thus, we examine the statute as a

whole, including its purpose and various provisions. See

McCarthy v. Bronson, 500 U.S. 136, 139, 114 L. Ed. 2d 194,

111 S. Ct. 1737 (1991) (“In ascertaining the plain meaning

of [a] statute, the court must look to the particular statutory

language at issue, as well as the language and design of the

statute as a whole.”) (quoting K Mart Corp. v. Cartier, Inc.,

486 U.S. 281, 291, 100 L. Ed. 2d 313, 108 S. Ct. 1811

(1988)).

As outlined in section I, CERCLA is structured in

such a way as to, first, implicate a range of operators,

owners, and transporters as PRPs; second, offer certain of

these PRPs affirmative defenses that allow them to avoid

liability entirely; and third, provide judicial or administrative

mechanisms limiting liability or encouraging early

settlement. The interpretation of “disposal” controls the

scope of parties designated as PRPs; thus, it has ripple

effects on the applicability and effectiveness of the available

defenses and administrative tools that complete the statutory

structure. In examining this statute as a whole, then, we

assess whether our interpretation of “disposal” is in accord

with the statute’s purpose, and creates or minimizes any

internal inconsistency in CERCLA.

App. 30

A. STATUTORY PURPOSE

“CERCLA was enacted to protect and preserve

public health and the environment by facilitating the

expeditious and efficient cleanup of hazardous waste sites.”

Pritikin, 254 F.3d at 794-95 (internal quotation marks and

citation omitted); accord 3550 Stevens Creek Assocs., 915

F.2d at 1357 (“CERCLA was enacted to ‘provide for

liability, compensation, cleanup, and emergency response for

hazardous substances released into the environment and the

cleanup of inactive hazardous waste disposal sites.””)

(quoting Pub. L. No. 96-510, 94 Stat. 2767 (1980)). But

CERCLA also has a secondary purpose — assuring that

“responsible” persons pay for the cleanup:

CERCLA was a response by Congress to the

threat to public health and the environment

posed by the widespread use and disposal of

hazardous substances. Its purpose was [(1)] to

ensure the prompt and effective cleanup of

waste disposal sites, and [(2)] to assure that

parties responsible for hazardous substances

bore the cost of remedying the conditions they

created.

Pinal Creek Group, 118 F.3d at 1300 (quoting Mardan

Corp. v. C.G.C. Music, Ltd., 804 F.2d 1454, 1455 (9th Cir.

1986)). “We construe CERCLA liberally to achieve these ~

goals.” Kaiser Aluminum, 976 F.2d at 1340. At the same

time, we have cautioned that “we must reject a construction

that the statute on its face does not permit, and the legislative

history does not support.” 3550 Stevens Creek Assocs., 915

F.2d at 1363.

Our conclusion that “disposal” does not include

passive soil migration but that it may include other passive

App. 31

migration that fits within the plain meaning of the terms used

to define “disposal” is consistent with CERCLA’s dual

purposes. Holding passive owners responsible for migration

of contaminants that results from their conduct and for

passive migration ensures the prompt and effective cleanup

of abandoned storage tanks, which, as discussed infra, is one

of the problems Congress sought to address when enacting

CERCLA. Indeed, if “disposal” is interpreted to exclude all

passive migration, there would be little incentive for a

landowner to examine his property for decaying disposal

tanks, prevent them from spilling or leaking, or to clean up

contamination once it was found.

B. INTERNAL CONSISTENCY AND

AVOIDING ILLOGICAL

RESULTS

Our plain-language interpretation of “disposal” also

makes sense within the liability provisions of CERCLA --

the sections identifying the parties that are “potentially

responsible.” As explained in section III.A, CERCLA creates

four categories of PRPs: current owners or operators,

owners or operators at the time of a disposal, arrangers, and

transporters. See 42 U.S.C. § 9607(a). This categorization

makes the best sense only under a _plain-meaning

interpretation of “disposal;” the extreme positions on either

side render the structure awkward. For example, had

Congress intended all passive migration to constitute a

“disposal,” then disposal is nearly always a perpetual

process. See, e.g., CDMG Realty, 96 F.3d at 716. Hence,

every landowner after the first disposal would be liable, and

there would be no reason to divide owners and operators into

categories of former and current. See, e.g, id at 715;

Ecodyne Corp. v. Shah, 718 F. Supp. 1454, 1457 (N.D. Cal.

1989). On the other extreme, had Congress intended

“disposal” to include only releases directly caused by

App. 32

affirmative human conduct, then it would make nv sense to

establish a strict liability scheme assigning responsibility to

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

operated any facility.” 42 U.S.C. § 9607(a)(2). Rather, the

statute would have a straightforward causation requirement.

Similarly, our interpretation of “disposal” is sensible

in light of CERCLA’s twin concepts of “disposal,” on one

hand, and “release,” on the other. As explained in section I,

CERCLA holds a PRP liable for a disposal that “releases or

threatens to release” hazardous substances into the

environment. Some courts, examining this structure, note

that it would be reasonable to conclude that Congress meant

“disposal” and “release” to mean entirely different things —

in other words, because “release” clearly requires no

affirmative human conduct, “disposal” must be limited to

affirmative human actions that make possible a “release.”

See, e.g., 150 Acres of Land, 204 F.3d at 706 (“It makes

sense . . . to have ‘disposal’ stand for activity that precedes

the entry of a substance into the environment and ‘release’

stand for the actual entry of substances in to the

environment.”).

Working on a blank slate, it might make sense to

design a statute with such clearcut, distinct, and interlocking

concepts. Sadly, the words of the statute:stand in the way of

such an easy explanation. The definition of “disposal,” as we

have noted, includes the terms “discharge, deposit, injection,

dumping, spilling, leaking, or placing.” 42 U.S.C. § 6903(3).

The definition of “release” includes “spilling, leaking,

pumping, pouring, emitting, emptying, discharging,

injecting, escaping, leaching, dumping, or disposing.” 42

U.S.C. § 9601(22). Even a quick glance reveals two

important aspects of these definitions. First, each term

encompasses some form of five words: “dump,” “spill,”

App. 33

“discharge,” “injection,” and “leaking.” Second, “release”

even incorporates the term “disposing” itself.

This structure defeats the notion that the two terms

are mutually exclusive, or that subtle differences between

them mean that “disposal” always requires affirmative

human conduct and “release” does not. With five terms in

common, the definitions compel the conclusion that there is

at least substantial overlap between “disposal” and “release,”

and the overlap includes some of those terms whose

definitions do not necessarily require human conduct, such

as “spilling” and “leaking.” § Thus, we reject the

interpretation that the difference in the definitions requires us

to put a gloss on “disposal” that would make the terms

mutually exclusive.*

This analysis suggests that the plain-meaning

interpretation of “disposal” makes a good fit with the first

part of CERCLA’s overall structure — the assignment of

presumptive liability to various parties.

CERCLA next allows certain PRPs to avoid liability

by asserting various defenses. Most relevant here is the so-

called “innocent owner” defense, which absolves from

liability landowners who can show that “the real property on

which the facility concerned is located was acquired by the

defendant after the disposal or placement of the hazardous

substance on, in, or at the facility” and that “at the time the

defendant acquired the facility the defendant did not know

* Our assessment does not diminish the real difference

between the two definitions. For example, as the court in CDMG

Realty noted, “leach” is included in the definition of “release,” but

not included in the definition of “disposal.” See CDMG Realty, 96

F.3d at 715.

App. 34

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). Our interpretation of “disposal” preserves the

purpose and role of this defense within the statutory

structure. The alternatives, on the other hand, would render

the defense either impossible to present or entirely

superfluous.

Were we to adopt an interpretation of “disposal” that

encompassed all subsoil passive migration, the innocent

landowner defense would be essentially eliminated. As

discussed above, in all but a tiny fraction of cases,’ such an

interpretation would lead to the conclusion that disposal is a

never-ending process, rendering liable every landowner after

the initial disposal. For those subsequent landowners, the

innocent landowner defense would be available only if one

could show that the land was purchased after the hazardous

. substances were “placed” there. Thus, the defense would

only be available to a small portion of the landowners who

have no actual culpability in the disposal of the hazardous

substances. '

Commentators have written the obituary for the

innocent landowner defense many times since it was created

in 1986. See, eg., Rosemary J. Beless, Superfund’s

“Innocent Landowner” Defense: Guilty until Proven

* Those cases would presumably be limited to subsoil

migration that halts because it reaches an impermeable barrier

(such as a shale layer or retaining wall that completely blocks

migration in any direction). Of course, the availability of the

defense assumes that the landowner would be able to prove that

the contamination hit the impermeable barrier before the land was

purchased, and that migration had halted completely.

App. 35

Innocent, 17 J. LAND RESOURCES & ENVTL. L. 247 (1997);

Shane Clanton, Passive Disposal of the Innocent Landowner

Defense, 9 J. NAT. RESOURCES & ENVTL. L. 255 (1993-

1994); L. Jager Smith, Jr., Note, CERCLA’s Innocent

Landowner Defense: Oasis or Mirage?, 18 COLUM. J.

ENVTL. L. 155 (1993). And, to be sure, Congress intended

the defense to be very narrowly applicable, for fear that it

might be subject to abuse. See infra section III.B.3.b.

Nevertheless, we need not narrow the defense any more than

Congress did in creating it.

The opposite extreme is no better fit. Were we to

interpret “disposal” to include only actions caused by

affirmative human conduct, we would eliminate the need for

an innocent landowner defense altogether. Such an

interpretation of “disposal” would exclude from liability

even a landowner whose facilities “spill” or “leak” without

affirmative human conduct — that is, anything short of an

intentional dump during an owner’s tenure. Under this

interpretation, there would exist no landowner capable of

presenting an innocent landowner defense who would not

already be excluded from liability in the first place." We

doubt, even in the uncertain world of CERCLA, that

Congress went to the trouble of amending the statute to

create a defense that no one would need.

Our interpretation, on the other hand, preserves the

defense and confirms the role chosen for it by Congress. It

'© It is an open question whether the innocent owner

defense is available to only current owners, or both current and

past owners. Compare CDMG Realty, 96 F.3d at 716-17

(suggesting that the defense is only available to current owners)

with ABB Indus., 120 F.3d at 358 (concluding that it is available

to current and past owners).

App. 36

must be acknowledged, however, that our interpretation of

“disposal” does not leave a seamless statute. The defense is

phrased so as to extend to those who purchase property after

“disposal or placement.” 42 U.S.C. § 9601(35)(A) (emphasis

added). Courts facing this wording have read it in a number

of ways. Some have concluded that “or placement” is

surplusage, and can be discarded. See CDMG Realty, 96

F.3d at 716 (concluding that the innocent landowner defense

is available only “after the disposal”); see also Robert L.

Bronston, Note, The Case Against Intermediate Owner

Liability for Passive Migration of Hazardous Waste, 93

MICH. L. REV. 609, 628 (1994). We are bound, though, to

give meaning to every word of a statute. Frustratingly, this

canon of construction leads to the shortest of logical cul-de-

sacs in this case. If we give meaning to both “disposal” and

“placement,” how are the words different, particularly if we _

consider that “placement” is included in the statutory

definition of “disposal”? And if the defense is available to

anyone who purchases after “disposal,” why repeat

“placement” — a mere subcategory of “disposal”?

Clearly, neither a logician nor a grammarian will find

comfort in the world of CERCLA. It is not our task,

however, to clean up the baffling language Congress gave us

by deleting the words “or placement” or the word “disposal”

from the innocent landowner defense. Transported to

Washington, D.C. in 1980 or 1986, armed with a red pen and

a copy of Strunk & White’s Elements of Style, we might

offer a few clarifying suggestions. But in this time and

place, we can only conclude that Congress meant what it

said, and offered the innocent landowner defense to both

those who purchased land after “disposal” or after

“placement,” thereby giving “disposal” its statutory meaning

and “placement” its ordinary one, despite their overlap.

App. 37

In sum, we conclude that the plain-meaning

interpretation of disposal preserves the scope and the role of

the defenses established by Congress.

The third part of CERCLA’s structure includes a

variety of provisions that instruct courts or the agency how

to administer the liability provisions. These provisions, for

example, allow a court to allocate liability on the basis of

culpability, see, e.g., Pinal Creek Group, 118 F.3d at 1300-

01; create a system by which de minimis contributors can

escape joint and several liability, 42 U.S.C. § 9622(g); and

authorize administrative policies encouraging early

settlement with the EPA, shielding the settler from suit by

other parties, see infra note 11. These mechanisms are often

overlooked, but are crucial to the day-to-day realities of

CERCLA administration and litigation. None of them has a

direct impact on the interpretation of the term “disposal,” so

we will not discuss them in detail. But each of them, in

different ways, attempts to ensure that a PRP with minimal

responsibility — such as an owner without culpability but

outside the technical parameters of the innocent owner

defense — does not get stuck with more than his fair share of

the financial responsibility for cleanup. In the real-world

administration of the statute as a whole, these are the

provisions that allow a court or the EPA to ensure that the

parade of horribles — the liability of the five-minute

landowner, the one-drop contributor, or the unknowing

home-buyer -- does not come to pass."

'! See, e.g., U.S. ENVIRONMENTAL PROTECTION AGENCY,

POLICY TOWARD OWNERS OF PROPERTY CONTAINING

CONTAMINATED AQUIFERS (May 24, 1995) (“where hazardous

substances have come to be located on or in a property solely as

the result of subsurface migration in an aquifer . . . EPA will not

take enforcement action . . . . Further, EPA may consider de

minimis settlements . . . where necessary to protect such

App. 38

Based on this analysis, we conclude that the plain

meaning interpretation of “disposal” is consistent with the

statute both in its constituent parts and as a whole.

3. LEGISLATIVE HISTORY

Because the conclusion we reach is compelled by the

plain meaning of the statute’s text, our inquiry into

legislative history is strictly limited. Although the Supreme

Court has advised that recourse to legislative history is not

necessary where a statute’s plain meaning is clear, the Court

does suggest that we review the legislative history to ensure

that there is no clearly contrary congressional intent. See,

e.g., Salinas v. United States, 522 U.S. 52, 57-58, 139 L. Ed.

2d 352, 118 S. Ct. 469 (1997); Dunn v. Commodity Futures

Trading Comm'n, 519 U.S. 465, 471 & n. 8, 473-74, 478

(1997); Darby v. Cisneros, 509 U.S. 137, 147, 125 L. Ed. 2d

113, 113 S. Ct. 2539 (1993); John Doe Agency v. John Doe

Corp., 493 U.S. 146, 155, 107 L. Ed. 2d 462, 110 S. Ct. 471

landowners from contribution suits.”); U.S. ENVIRONMENTAL

PROYECTION AGENCY, MEMORANDUM REGARDING SUPPORT OF

REGIONAL EFFORTS TO NEGOTIATE PROSPECTIVE PURCHASER

AGREZMENTS (PPAS) AT SUPERFUND SITES AND CLARIFICATION

OF "PA GUIDANCE (January 10, 2001) (encouraging use of PPAs

for purchasers of potentially contaminated sites); U.S.

ENVIRONMENTAL PROTECTION AGENCY, POLICY TOWARDS

OWNERS OF RESIDENTIAL PROPERTY AT SUPERFUND SITES (July

3, 1991) (“EPA . . . will not take enforcement actions against an

owner of residential property to require such owner to undertake

response actions or pay response costs, unless the residential

homeowner’s activities lead to a release or threat of a release of

hazardous substances ... .” ).

App. 39

(1989). Here, we scan CERCLA’s legislative history to

determine whether intentions contrary to the plain meaning

are present. Our review reveals no such indication. On the

contrary, the available materials demonstrate that the public,

the EPA, and drafters of the legislation used and understood

the words “discharge, deposit, injection, dumping, spilling,

leaking, or placing” in their ordinary, plain-meaning sense,

encompassing events both caused by affirmative human

conduct and, particularly in the case of “spill” and “leak,”

occurring solely in a passive context as well. Because we

find no indication that Congress intended anything other than

what it said, we present here only a few brief examples.

A. CERCLA

Any inquiry into CERCLA’s legislative history is

somewhat of a snark hunt. Like other courts that have

examined the legislative history, we -have found few truly

relevant documents. See, e.g., CDMG Realty, 96 F.3d at 706

n.2. This is not surprising, given the circumstances

surrounding the bill’s passage.’ One searches in vain for

"2 Accord Perlman, 165 F.3d at 753 (stating that, where

the plain statutory language is unambiguous, we resort to

legislative history only to discern whether there is a clear

indication “that Congress meant something other than what it

said”); 3A NORMAN J. SINGER, STATUTES AND STATUTORY

CONSTRUCTION § 75.05, at 428 (6th ed. 2000) (when interpreting

hazardous waste statutes, “the courts have sought to give effect to

the contemporaneous construction given the act by the legislators,

the EPA and the public and the central focus is on effecting the

intent of Congress as evidenced by legislative history” (footnote

omitted)).

' By November 1980, Congress had considered

emergency response and hazardous substance cleanup proposals

for at least three years. The bill that ultimately became law was an

App. 40

committee reports or floor statements explaining the purpose

of subtle or even dramatic changes from early versions of the

bill to final passage.“ See generally Frank P. Grad, A

Legislative History of the Comprehensive Environmental

Response, Compensation, and Liability (“Superfund”) Act of

1980, 8 COLUM .J. ENVTL. L. 1 (1982). Nevertheless, those

materials that do exist confirm the plain-meaning

interpretation of “disposal.”

As an initial matter, it is evident that CERCLA’s

primary targets included spills and leaks from abandoned

sites — sites at which there was no longer any affirmative

human activity. The two incidents of hazardous substance

eleventh-hour compromise hastily assembled by a bipartisan

leadership group of senators; it was introduced and passed by the

Senate with only days remaining in a lame-duck session, and went

to the House for an up-or-down vote. Statements in both houses

reflected members’ belief that the bill was flawed, but was the best

that might pass given the circumstances; the pressure on both

houses to pass something was compounded by the impending

party switch in the Senate. and the presidency. See Letter from

Senators Robert T. Stafford and Jennings Randolph to

Representative James J. Florio (December 2, 1980), reprinted at |

SENATE COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS,

97TH CONG., A LEGISLATIVE HISTORY OF THE COMPREHENSIVE

ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY

ACT OF 1980 (SUPERFUND) 774-75 (Committee Print 1983)

(hereinafter “COMMITTEE PRINT”).

'* No committee or conference reports address the version

of the legislation that ultimately became law. “It was only last

minute, unrecorded compromises and acceptance of deliberate

ambiguity in some of the bill’s more controversial provisions that

permitted the legislation’s passage into law.” ALLAN J. TOPOL

AND REBECCA SNOW, SUPERFUND LAW AND PROCEDURE § 1.1, at

5 (1992).

App. 41

contamination that most prominently prompted

congressional action — Love Canal and the Valley of the

Drums” -- were both abandoned hazardous waste sites that

were described as spilling or leaking with no affirmative

human conduct.

Hearing testimony further confirmed that both the

EPA and the legislators understood that hazardous

substances legislation would deal with a wide range of

disposal events, not predicated on an “active/passive”

dichotomy. EPA Assistant Administrator Thomas Jorling

testified that one “common problem” is abandoned sites with

“barrels and tanks . . . leaking, allowing contamination of

surface and ground waters and frequently producing a severe

fire or explosion potential . . . The effects of the abandoned

waste disposal sites are similar to spills of hazardous

substances . . . .” Hazardous and Toxic Waste Disposal:

Joint Hearings Before the Subcommittees on Environmental

Pollution and Resource Protection of the Senate Committee

on Environment and Public Works, 96th Cong. 34 (1979)

(statement of Thomas C. Jorling, Assistant Administrator,

'S “During the 1940s and 1950s, Hooker Chemical &

Plastics Corporation used the Love Canal, which was built as part

of an electrical power project, to dispose of hundreds of 55-gallon

drums of chemicals. Hooker then donated the land to the Niagara

Falls Board of Education, which, in turn, constructed a school on

the site.” Topol, supra note 14, § 1.1, at 4n.10. At the “Valley of ©

the Drums” in Kentucky, “users had littered a large ravine with

some twenty thousand drums that were spilling hazardous

materials into the soil. The pollutants were then percolating into

the groundwater.” Jd. § 1.1, at 3. These two high-profile incidents

are often cited as the impetus for Congressional action. See id. §

1.1, at 1 (“In the beginning man created the Valley of the Drums,

Love Canal, and other similar blights upon the earth. Congress

saw these horrors and was not pleased.”).

App. 42

Water and Waste Management, Environmental Protection

Agency), reprinted at 1 COMMITTEE PRINT, supra note 13, at

89-90. Assistant Administrator Jorling further explained

why a leak or discharge can occur without human

interaction:

[Lagoons and ponds] as a group represent a

large potential danger to public health and the

environment. . . . In those areas where

precipitation exceeds evaporation . . . surface

impoundments will eventually either leak or

overflow and discharge to surface waters.

Id. at 88.

In addition, the primary legislative sponsors and

relevant committees regularly used the words “spill” or

“leak” to describe passive events at abandoned sites.

Representative Florio summarized the evils that CERCLA

aimed to fix: “Hundreds, possibly thousands, of neglected,

leaking disposal sites presently dot the country -- threatening

to release their lethal contents, despoiling water supplies and

menacing public health.” 126 CONG. REC. 26377 (1980),

reprinted at 2 COMMITTEE PRINT, supra note 13, at 226."

House committee reports included similar statements

reflecting the passive aspects of “spill” or “leak.”"’ Similar

' See also 126 CONG. REC. 26795 (1980) (statement of

Rep. Goldwater) (“This bill would establish a sizable “superfund”

which would pay for the cleanup costs of inactive or abandoned

dumpsites which leak hazardous wastes .. . .” ), reprinted at 2

COMMITTEE PRINT, supra note 13, at 381.

'” See, e.g., H.R. Rep. No. 96-1016, at 18 (1980) (“At the

Valley of the Drums, thousands of barrels were stacked illegally in

the hauler’s backyard. These drums are in a seriously deteriorating

App. 43

statements were made by individual senators,"* as well as

Senate committee reports.'*

B. SARA

In 1986 - Congress enacted the Superfund

Amendments and Reauthorization Act (“SARA”), aimed at

speeding cleanup and forcing quicker action by the EPA.”

Most significantly for our purposes, Congress created the

innocent landowner defense that we have already discussed.

See 42 U.S.C. § 9601(35)(A). It did not do so, however, by

creating a straightforward exception to CERCLA liability.

In a single stroke, SARA first clarified that one who

purchases land from a polluting owner or operator cannot

present a third-party defense, then set conditions under

state, and some have already burst and spilled their contents on the

ground.”), reprinted at 1 COMMITTEE REPORT, supra note 13, at

49.

'8 See, e.g., 126 Cong. Rec. 30931 (statement of Sen.

Randolph) (1980) (“Last summer, PCB’s leaked from a broken

transformer into animal feed at a feed processing plant. The

leakage was not discovered in time . . . The dangers posed by

buried chemical wastes have only recently begun to make a dent in

our national consciousness, largely as a result of the severe health

problems discovered at Love Canal.”), reprinted at 1 COMMITTEE

PRINT, supra note 13, at 683-84.”

"9 See, e.g., S. Rep. No. 96-848, at 5 (1980) (“Spills have

taken place because of transportation accidents involving

pipelines, trucks, rail cars, and barges or tankers, and also non-

transportation facilities such as storage tanks, holding lagoons and

chemical processing plants.”), reprinted at 1 COMMITTEE PRINT,

supra note 13, at 312.

© For a more complete discussion of the circumstances

surrounding SARA, see Topol, supra note 14, § 1.3 at 14-15.

App. 44

which this limit would not apply — that is, if the property

were purchased after disposal or placement, and the

purchaser did not know and had no reason to know that

hazardous substances were disposed of there. The plain-

meaning interpretation of “disposal” we adopt leaves in

place the narrow applicability of the defense. This reading is

confirmed by floor statements of the defense’s author,

Representative Frank, who indicated that the innocent owner

defense was unavailable to anyone who contributed, actively

or passively, to the release of the substance:

This amendment says that wholly innocent

landowners will not be held liable. We have

had problems before with the leases being

granted improvidently.

This amendment, I must say, is drafted in a

way to make that extremely unlikely. To get a

release from liability under this section, a

landowner must not have himself or herself

allowed or permitted any storage, not have

contributed to the release of any substance

and, and this is very important, the landowner

has the burden of proof to show that this

landowner had neither actual nor constructive

knowledge at the time of purchase that the

property had been used for hazardous waste

materials. In other words, you can get a

release under this only if you can show by the

preponderance of the evidence that you not

only did not contribute to it; you did not even

know when you bought it that it had this there.

131 CONG. REC. 34715 (1985) (statement of Rep. Frank).

Accordingly, the legislative history of the innocent owner

App. 45

defense does not contradict the plain meaning interpretation

of “disposal,” but rather is consistent with this formulation.

C. CONCLUSION

In sum, we hold that, in light of the plain meaning of

the terms used to define “disposal” in § 6903(3), the alleged

passive migration of contaminants through soil during the

Partnership Defendants’ ownership was not a “disposal”

under § 9607(a\(2). This plain-meaning approach is

consistent with the statute as a whole and its legislative

history. The Partnership Defendants are thus entitled to

summary judgment on the CERCLA claim.

IV. OTHER ISSUES

A. STATE CLAIMS AGAINST

GOVERNMENT DEFENDANTS

The district court held that California Civil Code §

3482 precludes Carson Harbor’s state claims against the

Government Defendants. Section 3482 provides that

“nothing which is done or maintained under the express

authority of a statute can be deemed a nuisance.” CAL. Civ.

CODE § 3482. Here, the Water Quality Board issued NPDES

permits to the Government Defendants in 1990 and 1996.

Those permits authorized the discharge of storm water

containing pollutants, and there is no evidence that there was

any lead-contaminated storm water runoff to the property

prior to 1994 or a violation of the permits. Therefore, the

district court properly granted summary judgment to the

Government Defendants on the state law claims.

B. INDEMNITY CLAIM AGAINST

PARTNERSHIP DEFENDANTS

App. 46

The district court granted the Partnership Defendants’

motion for summary judgment on Carson Harbor’s

indemnity claim under the purchase and sale agreement,

based on its conclusion that the response costs were not

“necessary” under § 9607(a)(4)(B). See Carson Harbor, 990

F. Supp. at 1198. Under the purchase and sale agreement,

which the Partnership Defendants and Carson Harbor

executed in 1983, the Partnership Defendants agreed to

indemnify and hold Carson Harbor harmless “from and

against any . . . damage, cost, expense . . . liability .. .

suffered by [Carson Harbor] resulting, directly or indirectly,

from .. . any liability or obligation of [the Partnership

Defendants] which [Carson Harbor] is not specifically

required to assume hereunder.” Thus, the Partnership

Defendants are liable for damages and costs Carson Harbor

suffered in connection with its cleanup of the property if the

Partnership Defendants would have been required to clean

up the property in 1983.

To survive summary judgment on this claim, Carson

Harbor must raise a genuine issue of material fact. Carson

Harbor argues that, because it was required to remove the

hazardous substances in 1995, the Partnership Defendants

would have been required to remove them in 1983. Because

we conclude that there is a genuine issue of material fact

concerning whether Carson Harbor’s 1995 cleanup costs

were “necessary” (i.e., whether the Water Quality Board

perceived a threat to public health or the environment and

whether it required the remediation), we reverse the grant of

summary judgment in favor of the Partnership Defendants.

CONCLUSION

We REVERSE the grant of summary judgment in

favor of Unocal and the Government Defendants on the

CERCLA claim. With respect to the Partnership

App. 47

Defendants, we AFFIRM the grant of summary judgment in

their favor on the CERCLA claim. We also AFFIRM the

grant of summary judgment to the Government Defendents

on the state claims. Finally, we REVERSE the district

court’s grant of summary judgment to the Partnership

Defendants on Carson Harbor’s indemnity claim under the

purchase agreement. The case is REMANDED for further

proceedings consistent with this opinion. Each party shall

bear its own costs on appeal.

AFFIRMED in part, REVERSED in part, and REMANDED.

App. 48

DISSENT:

B. FLETCHER, Circuit Judge, with whom Judges Pregerson

and Paez, Circuit Judges, join, Concurring in Part and

Dissenting in Part.

I agree with the majority that CERCLA’ is not a

model of legislative clarity. Inconsistencies and

redundancies pervade the statute. As a result, our task in

interpreting CERCLA is to search for a construction that

produces the fewest inconsistencies and at the same time

remains true to the statute’s remedial purposes. In holding

that passive migration of hazardous waste through soil in this

case cannot constitute “disposal” under the Act, the majority

misses the mark. If there is a plain meaning in CERCLA’s

definition of “disposal,” it encompasses the sort of passive

migration at issue here. Finding such passive migration as a

form of “disposal” is consistent with CERCLA’s strict

liability scheme, that broadly defines “potentially responsible

parties” as including those who may have done nothing

affirmative to contribute to the contamination of a site and

that requires such parties to disprove causation as an

affirmative defense. By contrast, excluding this sort of

passive migration from the definition of “disposal,” as the

majority does, frustrates CERCLA’s two central purposes:

to encourage prompt, voluntary private action to remedy

environmental hazards and to ensure that those responsible

for the hazards pay their fair share of cleanup costs.

Accordingly, I respectfully dissent from Part III of the

majority’s opinion.

' 1 shall use the majority opinion’s abbreviations

throughout.

App. 49

One of the ways in which CERCLA encourages

current landowners to clean up environmental hazards on

their properties is to allow them to clean up the hazard and

then bring suit to recover clean up costs from those who have

some responsibility for the existence of the hazard. In order

to prevail, the current owner must establish that the

defendant is a “potentially responsible party,” a party who

falls within one of four classes of persons subject to

CERCLA liability. See 42 U.S.C. § 9607(a). In this case,

Carson Harbor argued that the Partnership Defendants are

PRPs because they are persons “who at the time of disposal

of any hazardous substance owned or operated any facility at

which such hazardous substances were disposed of.” Id. §

9607(a)(2). The district court granted the Partnership

Defendants’ motion for summary judgment on Carson

Harbor’s CERCLA claim because it concluded that the

Partnership Defendants did not own the property “at the time

of disposal of any hazardous substances.” Thus, the majority

rightly focuses on the meaning of “disposal” in deciding

whether the district court’s grant of summary judgment was

proper. If there was a “disposal” of hazardous waste during

the period that the Partnership Defendants owned the

property, then, as the majority notes, the Partnership

Defendants are PRPs and the district court was wrong to

grant them summary judgment. Majority Op. at 15085.

CERCLA 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

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) (emphasis added); see id §

9601(29) (referring to § 6903(3) for the definition of

App. 50

“disposal”). Although the majority recognizes that almost all

of the terms defining “disposal” have both active and passive

meanings, it concludes that these terms “simply do not

describe the passive migration that occurred here.” Majority

Op. at 15094. In reaching this conclusion, the majority

purports to engage in a plain meaning analysis. However,

the majority’s analysis is nothing more than ipse dixit.

Remarkably, nowhere does the majority consider the

ordinary, contemporary, common meaning of the terms

defining “disposal.” See Williams v. Taylor, 529 U.S. 420,

431, 146 L. Ed. 2d 435, 120 S. Ct. 1479 (2000) (“We give

the words of a statute their ordinary, contemporary, common

meaning, absent an indication Congress intended them to

bear some different import.” (internal quotation marks and

citation omitted)). Had it done so, the majority would have

discovered that a common meaning of “deposit” exactly “fits

the hazardous substance contamination at issue” in this case.

Majority Op. at 15094.

The Oxford English Dictionary provides the

following as one of the common definitions of the transitive

form of the verb “deposit”: “Said of the laying down of

substances held in solution, and of similar operations

wrought by natural agencies; to form as a natural deposit.”

IV THE OXFORD ENGLISH DICTIONARY (OED) 482 (J.A.

Simpson & E.S.C. Weiner, eds., 2d ed. 1989). Webster’s

Dictionary offers a similar definition: “to lay down or let fall

or drop by a natural process: foster the accretion or

accumulation of as a natural deposit.” WEBSTER’S THIRD

NEW INTERNATIONAL DICTIONARY OF THE ENGLISH

? The OED provides the following illustration, from T.H.

Huxley’s Physiography (1878), of this sense of deposit: “[The

water] deposits more or less of the matter which it holds in

suspension.” IV OED 482 (insertion in original)

App. 51

LANGUAGE (Webster’s) 605 (Philip Babcock Gove, ed.-in-

chief, Unabridged ed. 1993). In addition, both dictionaries

state that an intransitive definition of “deposit” is “to be laid

down or precipitated, to settle.” IV OED 482; see Webster's

605.

The evidence in the record is that the slag and tar-like

waste was located within a 17-acre open-flow wetlands area

of the plaintiff's property. The evidence also indicates that

the slag and tar-like substance had high concentrations of

lead and TPH. In addition, there is evidence that water

flowing through the wetlands carried lead and TPH and that

these hazardous wastes settled in the soil throughout the

wetlands. Thus, contrary to the majority’s conclusory

assertion, the plain meaning of “disposal” that includes

“deposit” exactly describes the spread of hazardous waste

throughout the wetlands: The wastes were carried by the

water flowing through the wetlands and deposited in the

surrounding soil. Cf Majority Op. at 15094 (“Nor can the

gradual spread here be characterized as a ‘deposit,’ because

there was neither a deposit by someone, nor does the term

deposit encompass the gradual spread of contaminants.”).’ n3

The plain meaning of “deposit” applies to the soil

contamination that occurred in this case. Thus, the

Partnership Defendants were owners of the property “at the

time of disposal.” 42 U.S.C. § 9607(a)(2). As a result, the

> Although I focus on the meaning of “deposit,” I note that

the plain meaning of other terms defining “disposal” aptly

describe the spread of hazardous waste at issue in this case. The

term “discharge,” for example, has an especially broad meaning.

See Webster’s 644 (including in the definition of “discharge,” “to

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

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

App. 52

Partnership Defendants are PRPs and the district court was

wrong to grant them summary judgment dismissing Carson

Harbor’s CERCLA claim as to them.

II.

As we have noted, CERCLA has two central purposes: “to

ensure the prompt and effective cleanup of waste disposal

sites, and to assure that parties responsible for hazardous

substances [bear] the cost of remedying the conditions they

created.” Pinal Creek Group v. Newmont Mining Corp., 118

F.3d 1298, 1300 (9th Cir. 1997) (internal quotation marks

and citation omitted). To effectuate the first purpose,

Congress designed CERCLA to broadly define PRPs. See

42 U.S.C. § 9607(a). To effectuate the second purpose,

Congress created affirmative defenses to allow PRPs who

bore no responsibility for the hazardous waste to avoid

liability. See id §§ 9601(35)(A), 9607(b). Also in

furtherance of the second purpose, Congress provided for the

equitable distribution of cleanup costs among PRPs who

cannot avail themselves of an affirmative defense. See id. §

9613(f); United States v. Colo. & E.R.R. Co., 50 F.3d 1530,

1536 n. 5 (9th Cir. 1995) (describing some of the equitable

factors courts consider in determining the proper allocation

of cleanup costs among PRPs). The majority’s exclusion of

parties such as the Partnership Defendants from the class of

PRPs frustrates both of CERCLA’s central purposes.

a. Prompt and Effective Cleanup

While it holds that the “passive soil migration” at

issue in this case does not constitute “disposal,” the majority

also concludes that “disposal” may include other sorts of

passive migration. Majority Op. at 15097. Specifically, the

majority opines that the passive spilling or leaking of

hazardous wastes may count as “disposal.” See, e.g., id. at

App. 53

15097, 15107. The majority notes that counting passive

spilling or leaking as “disposal” furthers CERCLA’s purpose

to encourage prompt and effective cleanup of hazardous

wastes. Id. at 15097. It also notes that were “disposal” read

to exclude passive spilling or leaking, there would be little

incentive for a landowner to examine her property for

hazardous wastes and to clean up any contamination that was

discovered. Jd. at 15097. But, of course, counting the

passive migration at issue in this case as “disposal” also

would encourage prompt cleanup, and excluding it produces

the decreased incentives about which the majority frets: The

majority’s holding would allow a property owner who

discovers hazardous waste passively migrating through the

soil to escape all CERCLA liability simply by selling the

property to another.

The majority’s parsimonious reading of “disposal”

also leads to plainly nonsensical results. Hazardous waste

that is placed directly on or in land and is actively

discharging or depositing waste throughout the soil, as is the

case here, is likely a more immediate and direct

environmental threat than that which is placed into drums or

containment pools which may or may not eventually leak.

Under the majority’s interpretation, however, CERCLA

gives the owner of land on which hazardous waste has

previously been directly placed less of an incentive to clean

up the waste than it does an owner whose land contains

leaking drums. The failure to count the passive migration of ©

contaminants through soil as “disposal” thus frustrates

CERCLA’s first central purpose.

The majority reaches this untenable result for two

reasons. First, it believes that the plain meanings of “spill”

and “leak” describe the passive spread of hazardous waste

but that the plain meaning of “deposit” and other terms in the

definition of “disposal” that could potentially describe the

App. 54

passive migration at issue in this case do not. /d at 33.

Second, the majority relies on statements in CERCLA’s

legislative history that indicate that Congress enacted

CERCLA in part out of concern for the spillage and leakage

of hazardous waste from storage tanks at such places as

Love Canal and the Valley of the Drums. /d. at 36, 48-50.

However, the majority’s plain meaning analysis is

patently flawed: Water, flowing through the wetlands,

carried the hazardous waste and “deposited” it in the soil

throughout the contaminated area. See supra Part I. In

addition, the majority recognizes that its reliance on

legislative history is a weak reed. As the majority itself notes

with candor, “any inquiry into CERCLA’s legislative history

is somewhat of a snipe hunt.” Majority Op. at 15105.

CERCLA was “an eleventh-hour compromise hastily

assembled by a bipartisan leadership.” Jd. at 15104 n.12. As

such, there is precious little congressional commentary

interpreting the bill that eventually became CERCLA. See

id. at 15105 n.13 (“No committee or conference reports

address the version of the legislation that ultimately became

law.”). Thus, while the majority finds isolated statements

from congressional witnesses, senators, and representatives

indicating a concern with the passive spillage or leakage of

hazardous waste, this is hardly evidence that Congress meant

to limit CERCLA’s reach to only those forms of passive

contamination that could be described as “spills” or “leaks.”

b. Fair Share of Remedial Costs

The majority’s refusal to give full effect to the

meaning of “deposit” and other terms also frustrates

CERCLA’s second central purpose: to ensure that the

parties responsible for hazardous waste bear their fair share

of cleanup costs.

App. 55

This case presents a perfect illustration. The

Partnership Defendants owned the property from 1977 until

1983, when they sold it to Carson Harbor. From 1945 until

1983, Unocal Corporation held a leasehold interest in the

property. As the majority notes, Unocal used the property for

petroleum production, operating a number of oil wells,

pipelines, above-ground storage tanks, and production

facilities. Majority Op. at 15073. The evidence in the record

indicates that the slag and tar-like material were placed on

the property some time prior to the Partnership Defendant’s

ownership. Thus both the Partnership Defendants and

Carson Harbor owned the property while lead and TPH from

the tar and slag discharged into the wetlands. The only

significant distinction between Carson Harbor and the

Partnership Defendants is that during the latter’s ownership,

Unocal was actively engaged in petroleum production on the

property. Thus, the Partnership Defendants had more reason

to suspect the possibility of hazardous waste contamination

than did Carson Harbor. But under the majority’s

interpretation of “disposal,” the Partnership Defendants are

completely exempt from liability for the cleanup costs

incurred by Carson Harbor. This is an absurd result. By

contrast, under the interpretation I urge, the Partnership

Defendants would be PRPs and so liable for some of the

cleanup costs unless they were able to establish an

affirmative defense.

The majority appears to believe that counting the sort

of passive migration at issue here as “disposal” would

“essentially eliminate[]” one of a PRP’s central affirmative

defenses: the “innocent landowner” defense. Majority Op.

15099. This defense provides immunity from liability to a

PRP who acquired property “after the disposal or placement

of [a] hazardous substance” if, “at the time the [PRP]

acquired the facility the [PRP] did not know and had no

reason to know that any hazardous substance which is the

App. 56

subject of the release or threatened release was disposed of

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

majority’s reasoning on this point is puzzling. The majority

contends that an interpretation of “disposal” that included

passive soil migration “would lead to the conclusion that

disposal is a never-ending process, rendering liable every

landowner after the initial disposal.” Majority Op. at 15100.

It then notes that for subsequent purchasers, the innocent

landowner defense would be available “only if one could

show that the land was purchased after the hazardous

substances were ‘placed’ there.” Jd. The majority then

concludes that the defense would be available only “to a

small portion of the landowners who have no actual

culpability in the disposal of the hazardous substances.” /d.

But this conclusion is simply a non-sequitur.

Even if we accept for the sake of argument that the

more expansive interpretation of “disposal” implies that

“disposal is a never-ending process,” it just does not follow

that the innocent landowner defense would be available only

to those who have “no actual culpability in the disposal of

* In order to obtain immunity from liability, the PRP must

also demonstrate that “(a) he exercised due care with respect to the

hazardous substance concerned, taking into consideration the

characteristics of such hazardous substance, in light of all the

relevant facts and circumstances, and (b) he took precautions

against foreseeable acts or omissions of any . . . third party and the —

consequences that could foreseeably result from such act or

omissions.” 42 U.S.C. § 9607(b\(3); see 42 U.S.C. § 9601(35 (A).

* The majority’s use of this assumption is highly

questionable. Whether subsoil migration is “a never-ending

process,” is clearly a factual question, the answer to which is not

obvious. However, there is no evidence in the record to support

the majority’s supposition.

App. 57

the hazardous substances.” Majority Op. at 15100 (emphasis

added). Congress made the defense available to any PRP

who purchases property after the disposal or after the

placement of a hazardous substance on the property. 42

U.S.C. § 9601(35)(A). Thus, if a PRP purchases property on

which hazardous waste is passively migrating through the

soil, under my interpretation the innocent landowner defense

is not available to the PRP by virtue of the fact that she did

not purchase the property after the “disposal” of the waste,

since the disposal was on-going. However, if it was a prior

owner who placed the hazardous waste on the property, then

the defense is available to her by virtue of the fact that she

bought the property after the hazardous substance was

initially placed on the property.£ Recognizing that the

dispersal of hazardous waste through soil by water is

“disposal” under the statute does not eliminate the innocent

landowner defense. It “leaves in place the narrow

applicability of the defense.” Majority Op. at 15108.

Nor does the inclusion of passive soil migration give

rise to a parade of horribles. A PRP who cannot avail herself

of an affirmative defense is liable only for her fair share of

cleanup costs. It is up to the district court to apportion costs

equitably among all PRPs. 42 U.S.C. § 9613(f\(1); see

Boeing Co. v. Cascade Corp., 207 F.3d 1177, 1187 (9th Cir.

2000). Among the factors courts consider in allocating

responsibility and liability are:

(i) the ability of the parties to demonstrate that

their contribution to a discharge, release or

disposal of a hazardous waste can be

distinguished; (ii) the amount of the hazardous

® The majority makes this very argument elsewhere in its

opinion. Read its discussion at pages 15100-02.

App. 58

waste involved; (iii) the degree of toxicity of

the hazardous waste involved; (iv) the degree

of involvement by the parties in the

generation, transportation, treatment, storage,

or disposal of the hazardous waste; (v) the

degree of care exercised by the parties with

respect to the hazardous waste concerned,

taking into account the characteristics of such

hazardous waste; and (vi) the degree of

cooperation by the parties with the Federal,

State or local officials to prevent any harm to

the public health or the environment.

Colorado & E.R.R. Co., 50 F.3d at 1536 n.5. Courts also

take into account the existence of contractual or

principal/agent relationships among PRPs, Cadillac

Fairview/California, Inc. v. Dow Chemical Co., Nos. 83-

8034 MRP (Bx), 93-7996 MRP (Bx), 1999 WL 149196, at

*17 (C.D. Cal. Feb. 21, 1997); whether a PRP benefitted

from the disposal of waste at the site, id; whether a PRP has

itself engaged in clean-up efforts, Pinal Creek Group v.

Newmont Mining Corp., 118 F.3d 1298, 1393 n.4 (9th Cir.

1997), and the circumstances surrounding a PRP’s action or

inaction, id., United States v. Shell Oil Co., 13 F. Supp. 2d

1018, 1026-27 (C.D. Cal. 1998); and the relative amount of

time a PRP owned the property, Dant & Russell, Inc. v.

Burlington N.R.R. Co. (In re Dant & Russell, Inc.), 951 F.2d

246, 249 (9th Cir. 1991).? As the majority recognizes,

7 These factors are neither exhaustive nor exclusive. In

apportioning responsibility among PRP’s “a court may consider

several factors, a few factors, or only one determining factor, . . .

depending on the totality of the circumstances presented to the

court.” Colorado & E.R.R. Co., 50 F.3d at 1536 (internal quotation

marks omitted).

App. 59

CERCLA ensures that a PRP’s contribution will be limited

to her equitable share. Majority Op. at 15100-02. Thus,

including as PRPs owners of property in which hazardous

waste is passively migrating through the soil does not expose

such owners to unbounded liability. It merely holds them

accountable for their fair shares of cleanup costs, based upon

the circumstances surrounding their ownership.

Il.

The structure of the statute, despite its redundancies and

inconsistencies, is clear: Liability is not based on causation

or fault. Rather, the liability of previous land owners is

based on ownership at the time hazardous waste is placed or

disposed of on the subject property. The purpose of the

statute is to encourage current owners to clean up and

eliminate the hazard. The “encouragement” contained in the

statute is to allow the current owner to recover aliquot shares

of the cost from prior owners. The statute identifies “PRPs”

as persons who are potentially liable to the current owners.

The statute is clear that PRPs include all persons who owned

or operated any facility at which hazardous substances were

disposed of. Identified PRPs can assert affirmative defenses

to exclude themselves or can advance the reasons why their

share of the cost should be minimal, little, or none.

However, they should not te able to exclude themselves

from PRP status by narrowing or distorting the meaning of

“disposal” as the majority has done. The majority perhaps is

motivated by a sense that the structure of the statute is unfair

by including essentially innocent persons in the process —

requiring them to assert their defenses — but that is the

structure of the statute. Distorting the meaning of “disposal”

under the guise of a “plain meaning” analysis that is

seriously flawed is not appropriate.

- App. 60

The passive migration of hazardous waste through

the soil is a form of “disposal” covered by CERCLA.

Because the Partnership Defendants owned the property “at

the time of disposal,” the district court erred in concluding

that they are not PRPs. I would reverse the district court’s

award of summary judgment to the Partnership Defendants

on Carson Harbor’s CERCLA claim and remand to allow the

Partnership Defendants an opportunity to present an

affirmative defense and, should they be unsuccessful, for

equitable distribution of the cleanup costs. Accordingly, |

respectfully dissent.

App. 61

IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CARSON HARBOR VILLAGE, LTD.,

a limited partnership dba

Carson Harbor Village Mobilehome Park,

Plaintiff-counter-defendant-Appellant

v.

UNOCAL CORPORATION,

a Delaware Corporation,

Defendant-cross-defendant

and

CITY OF CARSON,

Defendant-cross-defendant-cross-claimant-Appellee

227 F.3d 1196

Appeal from the United States District Court

for the Central District of California

Filed September 14, 2000

Before: Betty B. Fletcher and Harry Pregerson, Circuit

Judges, and Charles R. Weiner, District Judge.'

' The Honorable Charles R. Weiner, Senior United States

District Judge for the Eastern District of Pennsylvania, sitting by

designation.

App. 62

B. FLETCHER, Circuit Judge:

The current owner of land contaminated by storm

water runoff and oil production filed this action against prior

owners and operators of the property, as well as certain local

government entities, to recover cleanup costs under, inter

alia, the Comprehensive Environmental Response

Compensation and Liability Act of 1980 (“CERCLA”), 42 ©

U.S.C. § 9607(a), and California common law. The district

court dismissed the case on cross motions for summary

judgment, reasoning that plaintiff failed to meet its burden

on at least one of the CERCLA elements, and that its

common law claims were without merit.2 We have

jurisdiction over plaintiff's appeal pursuant to 18 U.S.C. §

1291, and we reverse in part, affirm in part, and remand for

further proceedings.

I. Factual and Procedural Background :

Carson Harbor Village, Ltd. (“Carson Harbor”) owns

and operates a mobile home park on 70 acres of land in the

City of Carson, California. Carson Harbor Village Mobile

Home Park, a general partnership run by Richard G. Braley

and Walker Smith, Jr. (collectively, the “Partnership

Defendants”), owned the property from 1977 to 1983 and

also operated a mobile home park there. Between 1945 and

1983, Unocal Corporation (“Unocal”) held a leasehold

interest in the property and used it for petroleum production.

Specifically, Unocal operated a number of oil wells,

? Plaintiff's causes of action under the Resource

Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6972(a),

and the Clean Water Act (“CWA”), 33 U.S.C. § 1365, also

rejected by the district court, are not before this court on appeal.

App. 63

pipelines, above-ground storage tanks, and production

facilities.’

An undeveloped open flow wetlands area covers

approximately 17 acres of the property. The wetlands form a

natural drainage course that bisects the trailer park from the

northeast to the southwest. At the northeast edge of the

wetlands, storm water controlled by the City of Carson, the

City of Compton and the County of Los Angeles

(collectively, the “Government Defendants”), feeds into the

wetlands through two storm drains. The drainage area

immediately upstream from plaintiff's property includes

California Highway 91, operated by the California

Department of Transportation (“Caltrans”), as well as mixed

use industrial and residential properties. Runoff from

approximately three miles of the freeway drains to the

wetlands.

In the course of seeking refinancing for the property

in 1993, plaintiff's lender commissioned an environmental _

assessment which revealed slag and tar like material in the

wetlands. Subsequent investigation disclosed (1) that the

material had been on the property for several decades prior

to its development as a mobile home park; (2) that the

material was some form of—waste- or by-product from

petroleum production; (3) that the material was

approximately four feet thick and covered roughly a 30 by

160 foot area in the wetlands; (4) the material and

surrounding soils contained elevated levels of petroleum

hydrocarbons (measured in terms of total petroleum

hydrocarbons or “TPH”) and lead‘; and (5) soil samples

* The property is located within the Dominguez Oil Field

in Los Angeles County.

* Testing revealed the following concentrations:

App. 64

upgradient of the material also contained elevated [**5]

levels of TPH and lead.°

Because the lead concentrations exceeded state

reporting limits,® plaintiffs environmental consultants

informed the appropriate agencies of their findings. The

Regional Water Quality Control Board (“RWQCB”)

assumed the role of lead agency and plaintiff coordinated its

efforts with James Ross, the RWQCB’s Site Cleanup Unit

Chief. Although the parties dispute whether the RWQCB

“ordered” remedial action at the property or merely

concurred in plaintiff's “voluntary” decision to clean up the

tar and slag contamination, its is undisputed that plaintiff's

TPH Tar sample: 120,000 parts per million (“ppm”)

Slag sample: 35 ppm

Underlying soil: 2,300 ppm

Lead Tar sample: 1600 ppm (TTLC)

Slag Sample: 590 ppm (TTLC) and 12 ppm (STLC)

Underlying soil: 2,300 ppm (TTLC) and 86 ppm (STLC)

“TTLC” refers to “total threshold limit concentrations,” and

“STLC” refers to the “soluble threshold limit concentrations.” The

latter reflects water soluble lead concentrations.

5 Upgradient testing revealed the following

concentrations:

TPH 13 to 560 ppm

Lead 11 to 220 ppm (TTLC) and 0 to 23 (STLC)

An off-site sample taken from the highway, 1,000 feet upstream

from the tar and slag material, revealed TPH at 1,900 ppm and

lead at 150 ppm (TTLC).

° The mandatory reporting limits for lead are 1,000 ppm

(TTLC) and 5 ppm (STLC). :

App. 65

environmental consultants requested a “no further action”

letter from the RWQCB before proposing cleanup and

submitting a remedial action plan (“RAP”).’

In the RAP, plaintiff proposed to remove the tar and

slag material and impacted soils without addressing other

areas of elevated TPH and lead contamination in the

wetlands because the highest concentrations were associated

with the tar and slag material. The RAP recommended post-

cleanup levels of 1,000 ppm for TPH and 1,000 ppm

TTLC/S ppm STLC for lead. Ross approved the RAP subject

to the condition that plaintiff bring TTLC lead values down

to 50 ppm, rather 1,000 ppm.*

The cleanup went forward in the summer of 1995 and

over the course of five days 1,042 tons of material were

removed, varying in depth from one to four feet and covering

an area approximately 75 feet by 160 feet. In all but four of

the soil samples taken after the excavation, TPH and lead

levels were within the established limits.? After a site visit

” On August 39, 1994, one month after reporting the

contamination to the RWQCB, plaintiff's environmental

consultant wrote to Ross: “Our goal in reporting [the

contamination] to ti: Regional Board is to comply with the legal

reporting requirements and also to obtain in writing any additional

requirements that the Board may deem appropriate. If no further

action is required, we would appreciate a letter so Statiny;.” No

letter came. Instead, Ross met with the consultant at the property

in October 1994 to discuss remedial options and an RAP was

submitted to the RWQCB by January 1995.

* Ross also stated that a health risk assessment would have

to be performed and that, following cleanup, a no further action

letter would cover only the tar and slag area.

” In the four deviant samples, lead levels were still slightly

above the TTLC and STLC limits. In the closure report, plaintiffs

App. 66

and independent soil testing by RWQCB staff, Ross sent a

closure letter stating:

the ...oval is complete to the extent required

by this Board. . . . We have concluded that all

the requirements established by this Board in

our RAP approval letter dated February 27,

1995, have been complied with. In addition,

the contamination has been successfully

removed and the remaining soil in the bottom

of the watercourse poses no further threat to

surface waters of the State. We, therefore,

conclude that no further action is required at

this site.

Within a year of the “no further action letter,”

plaintiff filed suit against the Partnership Defendants, the

Government Defendants, and Unocal, seeking to recover the

costs of its remedial action as well as damiages arising from

its inability to refinance the property." On cross-motions for

summary judgment the district court rejected all of plaintiff's

theories of recovery. See Carson Harbor Village, Ltd. v.

Unocal Corp., 990 F. Supp. 1188 (C.D. Cal. 1997). On the

CERCLA claim, the district court held that plaintiff could

not show that its remedial action was “necessary” within the

meaning of 42 U.S.C. § 9607 (a)(4)(B) because there was no

environmental consultant indicated that “the elevated lead

concentration at those locations may be attributed to a greater

occurrence from the impacts of runoff” because the samples “were

collected along the western edge of the excavation adjacent to the

wetland portion of the stream channel.”

'° Although Caltrans and James Van Loben Sels are also

named in the complaint, they are not identified in any of the

causes of action at issue in this appeal.

App. 67

evidence of an “actual and real threat” to human health or the

environment and (implicitly referring to plaintiff's quest for

refinancing) “CERCLA . . . was not designed to permit

property owners to clean up their property unnecessarily for

business reasons, and then to shift the costs to prior owners.”

990 F. Supp. at 1193. The district court focused on Ross’s

deposition testimony that the remediation plan was initiated

by plaintiff and that the RWQCB would not have required

remedial action but for plaintiff's proposal. Ross’s

testimony is directly controverted by the testimony and

memoranda of others who were at the site meetings when

remedial options were discussed, but the district court

excluded this evidence as inadmissible hearsay. /d. at n.4.

As to the Partnership Defendants, the district court ruled that

plaintiff failed to show a “disposal” of hazardous substances

during their time of ownership - a prerequisite to prior owner

liability under 42 U.S.C. § 9607(a)(2). The court held that

there was no direct evidence of lead-containing storm water

entering the property at any time before 1994 and the court

rejected the argument that migration of lead and TPH from

the tar and slag into the wetlands soil constituted a

“disposal.” Jd. at 1194-95.

With respect to the common law claims of nuisance,

trespass, and injury to easement against the Government

Defendants, the district court held that California Civil Code

§ 3482 provides a complete defense since from 1990 forward

the storm water runoff systems were covered by National

Pollutant Discharge Elimination System (“NPDES”) permits

issued pursuant to the Clean Water Act, and prior to 1990

there was no direct evidence of lead-containing runoff. J. at

1197. Finally, as to the claim for express indemnity under

the purchase agreement with the Partnership Defendants, the

court reasoned that since the cleanup was not required by the

RWOQCB, plaintiff had not discharged an obligation of the

Partnership Defendants. The indemnity provision covered

App. 68

only losses resulting from “any liability or obligation of

seller which buyer is not specifically required to assume

hereunder.” Jd. at 1198 (quoting indemnity provision).

Il. Standard of Review

A grant of summary judgment is reviewed de novo.

Robi v. Reed, 173 F.3d 736, 739 (9th Cir. 1999), cert. denied,

528 U.S. 952, 145 L. Ed. 2d 293, 120 S. Ct. 375 (1999). Our

review is governed by the same standard applied by the trial

court under Federal Rule of Civil Procedure 56(c). Viewing

the evidence in the light most favorable to the nonmoving

party, we must determine whether there are any genuine

issues of material fact and whether the district court correctly

applied the relevant substantive law. Robi, 173 F.3d at 739.

“Whether the district court correctly construed the

hearsay rule is a question of law reviewed de novo.” United

States v. Bao, 189 F.3d 860, 863 (9th Cir. 1999) (citation

omitted). However, “we review for abuse of discretion the

trial court’s decision to exclude evidence under the hearsay

rule.” Jd. at 864.

III. Discussion

A. CERCLA

1. Necessary Costs of Response

A private party seeking to recover the costs of cleaning up

hazardous waste has the burden of proving:

(1) the site on which the hazardous substances

are contained is a “facility” under CERCLA’s

definition of that term, 42 U.S.C. § 9601(9);

App. 69

(2) a “release” or “threatened release” of any

“hazardous substance” from the facility has

occurred, 42 U.S.C. § 9607(a)(4);

(3) such “release” or “threatened release” has

caused the plaintiff to incur response costs that

were “necessary” and “consistent with the

national contingency plan,” 42 U-S. C. §§

9607(a)(4) and (a)(4)(B); and

(4) the defendant is within one of four classes

of persons subject to the liability provisions of

Section 107(a).

3550 Stevens Creek Assoc. v. Barclays Bank of California,

915 F.2d 1355, 1358 (9th Cir. 1990) (citing Ascon

Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1152 (9th

Cir. 1989)).

In order to reach the conclusion that plaintiff's

response costs were not “necessary” within the meaning of

42 U.S.C. § 9607(a)(4)(B), the district court followed GJ.

Leasing Co., Inc. v. Union Electric Co., 854 F. Supp. 539

(S.D. Ill. 1994), aff'd, 54 F.3d 379 (7th Cir. 1995), and

Yellow Freight System, Inc. v. ACF Indus., Inc., 909 F. Supp.

1290 (E.D. Mo. 1995). Appellees also cite Foster v. United

States, 922 F. Supp. 642 (D.D.C. 1996), in support of the

district court’s holding.

In G.J. Leasing, the seminal case followed in Yellow

Freight and Foster, the district court considered a CERCLA

claim brought by a company that purchased a power plant

and decided to convert the plant buildings into a warehouse, -

transportation terminal, and office space. The salvage

company hired to dismantle and remove the plant machinery

exposed widespread asbestos contamination in the buildings

App. 70

and the new owners decided to have the asbestos removed in

order to accommodate the new uses. The owners then filed a

cost recovery action against the power company.

Following a bench trial, the district court held that

none of the removal costs were “‘necessary’ costs of

response as that term is intended under CERCLA.” GJ.

Leasing, 854 F. Supp. at 563. The court admonished that

“Congress did not intend CERCLA to make injured parties

whole or to create a general vehicle for tort actions.” Jd. at

561 (citations omitted). Thus:

In order to show that any response costs were

necessary under CERCLA, plaintiffs must

demonstrate that they responded to a threat to

public health or the environment. Amoco Oil

Co. v. Borden, Inc., 889 F.2d 664, 669-70 (Sth

Cir. 1989); Louisiana-Pacific Corp. v.

ASARCO, Inc., 735 F. Supp. 358, 362 (W.D.

Wash. 1990). A theoretical threat is not

enough. For response costs to be “necessary,”

plaintiffs must establish that an actual and real

public health threat exists prior to initiating a

response action. See, e.g., Matter of Bell

Petroleum Services, Inc., 3 F.3d 889, 904-06

(Sth Cir. 1993). To show that costs incurred

were “necessary” under CERCLA, a party

must show (1) that the costs were incurred in

response to a threat to human health or the

environment, and (2) that the costs were

necessary to address that threat. Artesian

Water Co. v. Government of New Castle

County, 659 F. Supp. 1269, 1278 (D. Del.

1987).

App. 71

854 F. Supp. at § . <2. Applying this standard to the

asbestos removal, the .wurt went on to hold that the response

costs incurred by the new owners were not necessary

because there was evidence that the remediation was

motivated by business reasons (i.e., the desire to convert the

property to new uses) as opposed to “an actual and real

public health threat,” there was no evidence that asbestos in

the building would reach the outside environment, and

employee exposure to asbestos is not a threat redressible

under CERCLA. /d. at 562-63 (“In this case the evidence

established that plaintiffs had other business reasons for

undertaking site investigations and abatement actions. To the

extent that these actions were taken for purposes other than

responding to an actual and real public health threat, there is

no CERCLA liability.”) (emphasis added).'' Here the district

'" Yellow Freight is another asbestos abatement case. The

owner of a former railroad car manufacturing plant decided to

conduct asbestos abatement and PCB removal in the process of

demolishing buildings to make the site suitable for trucking

operations. 909 F. Supp. at 1299. Finding no evidence that the

contamination was likely to reach the outside environment, and no

evidence of “an immediate threat to public health or the

environment,” the court followed G.J. Leasing’s ulterior motive

analysis:

The evidence showed that Yellow Freight had

business reasons for undertaking the investigation,

sampling and abatement actions at the site... . To

the extent Yellow Freight’s actions were taken for

purposes other than responding to a public health

threat, it cannot establish that its costs expended

were necessary under CERCLA.

Id.

Similarly, in Foster, the owner of contaminated land

decided to remove hazardous waste only after a prospective

App. 72

court followed the G.J. Leasing ulterior motive analysis,

emphasizing Ross’s testimony that the RWQCB would “not

likely” have required remediation if Carson Harbor had not

come forward with a plan. Ross testified as follows:

Q: Now, I’ve got another hypothetical

question: If the owners had not come to you

with a remediation plan, if they had simply

reported to you that this is what we see here,

would you have required them to develop

some remediation plan?

Ross: Not likely.

Q: As far as you were concerned, this stuff,

even the slag and tar-like material, could have

just stayed there?

Ross: Very likely.

Q: So then, basically, this remediation was

done at their initiative for their own reasons

and not because of any environmental or

health problem that was perceived by the

Regional Board?

Ross: Yes.

purchaser abandoned negotiations upon discovering the

contamination. Following G./. Leasing’s ulterior motive analysis,

the court held that the costs incurred were unnecessary because

they were not in response to a public health threat. 922 F. Supp. at

652-53 (“The eventual decision to [act] was not taken in response

to a perceived threat to health or the environment, but in order to

further identify barriers to the development of the Site.”).

App. 73

See Carson Harbor, 990 F. Supp. at 1193.

There are three flaws in the district court’s analysis.

First, however well the ulterior motive analysis fits the facts

of G.J. Leasing and its progeny, we decline to endorse it as a

factor of any significance in the determination whether costs

are incurred in response to a palpable threat to human health

or the environment. In the private cost recovery context, the

plaintiff with no business or financial motive for

investigating and cleaning up a site will be rare indeed. Thus

a court must focus on the nature of the threat presented by

the contamination at issue and whether the response action is

addressed to that threat. These are factual questions

requiring attention to the objective circumstances of each

case, not a party’s subjective intent. See Cadillac

Fairview/California, Inc. v. Dow Chemical Co., 840 F.2d

691, 695 (9th Cir. 1988) (recognizing that necessity is a

factual question). That Carson Harbor discovered

contamination and acted to remedy it as part of an effort to

secure financing is immaterial so long as there is evidence

that the contamination presented a palpable threat to human

health or the environment.

Second, although the district court correctly -noted

that “costs associated with voluntary remediation efforts are

recoverable,” Carson Harbor, 990 F. Supp. at 1193, its focus

on whether the RWQCB would have ordered cleanup

incorrectly suggests that agency inaction is dispositive on the

question whether contamination presents an environmental

risk worthy of response. In NL Indus., Inc. v. Kaplan, 792

F.2d 896, 898 (9th Cir. 1986), we held that response costs

can be “necessary” even though the agency that required

cleanup never approved the response actions taken. And in

Cadillac Fairview, where the agency merely “requested [the

property owner] to undertake certain steps to protect

App. 74

neighborhood residents,” we held that “significant state or

local government action need not precede a response action

for that action to be either ‘necessary’ or ‘consistent with the

national contingency plan.’” 840 F.2d at 692, 694 (emphasis

added); see id. at 695 (“The district court erred in ruling that

some governmental entity must authorize and initiate a

response action for that action to be necessary and consistent

with the national contingency plan.”). NL Industries and

Cadillac Fairview thus stand for the proposition that the

absence of agency directives is not fatal to a cost recovery

suit. That proposition is surely right. That a public agency

fails or refuses to recognize an actionable threat obviously

should not control given the institutional and financial

constraints agency decisionmakers face. This is particularly

so with respect to relatively minor contamination sites which

are unlikely to capture the attention of public officials or

warrant the devotion of scarce resources.”

Finally, it appears that the district court took an

unnecessarily cramped view of the facts. A careful review of

the record demonstrates that there are indeed genuine issues

as to whether the RWQCB ordered the excavation of the tar

and slag material and whether the identified contamination

posed a legitimate threat. Ross’s deposition testimony two

years after the cleanup that he did not require remediation is

'2 This is not to say that government involvement is

altogether irrelevant. As we held in NL Industries, where an

agency requires action, the agency mandate is sufficient to

demonstrate that the costs incurred pursuant to the mandate were

necessary. 792 F.2d at 898 (“Kaplan has alleged that he was

required by state and local agencies to incur the response costs that

he seeks to recover from NL Industries. We find this allegation

sufficient to support a claim that the incurrence of response costs

was ‘necessary’ under section 107(aX(2)(B) of CERCLA.”). We

simply hold that an agency’s failure to act is not dispositive.

App. 75

contradicted by the testimony of Carson Harbor’s

environmental consultant as well as correspondence

contemporaneous with the cleanup memorializing Ross’s

comments at the site meetings."* The district court excluded

this evidence as hearsay, but the evidence falls squarely

within the “basic rule of evidence . . . that prior inconsistent

Stateme:25s may be used to impeach the credibility of a

witness.” United States v. Hale, 422 U.S. 171, 176, 45 L. Ed.

2d 99, 95 S. Ct. 2133 (1975). As we have held:

A prior inconsistent statement is admissible to

raise the suggestion that if a witness makes

inconsistent statements, then his entire

testimony may not be credible; such an

'° In his deposition, plaintiff's consultant, Dr. Hassan

Amini, testified that “Mr. Ross said that the material needed to be -

removed . . . [in] concurrence with our recommendation.” Dr.

Amini’s testimony is corroborated by two letters he sent to Ross

while the RAP was under consideration. In the cover letter

submitted with the RAP Dr. Amini said: “Since our field meeting

with you, and in response to your request, we have collected

additional soil samples surrounding the impacted area and have

developed the attached remediztion workplan for removal of the

waste material and impacted soil.” (Emphasis added). And in a

subsequent letter Dr. Amini again confirmed that “the remediation

being undertaken by Carson Harbor Village, Ltd. is being required

pursuant to our meeting, our conversations and in accordance with

the [RWQCB’s] Water Quality Plan to preserve and enhance

water quality and protect the beneficial uses of all waters within

the basin.” :

Prior to the cleanup a Unocal representative who

participated in the remediation plans also wrote an internal

memorandum stating: “We met with Jim Ross of RWQCB and

confirmed that he wants the ‘slag-like’ and ‘tar-like’ material

removed from the creek bed.”

App. 76

inference does not depend on whether either

the prior statement or the subsequent in-court

statement is true. Therefore, because a

declarant’s prior inconsistent statement is not

offered for its truth, it is not hearsay.

Bao, 189 F.3d at 866 (citing United States v. Arteaga, 117

F.3d 388, 397 n.18 (9th Cir. (1997)). Once Ross’s prior

inconsistent statements are admitted, the credibility of his

deposition testimony is drawn into question and a jury

question arises as to whether he ordered the cleanup or

perceived an environmental threat.

Ross’s testimony is further undermined by other

admissible evidence suggesting that Carson Harbor acted

subject to RWQCB mandates. First and foremost, in the

same deposition in which he answered the hypothetical

question, Ross conceded that lead contamination from the tar

and slag material presented a threat to both surface and

groundwater,“ and that, under the RWQCB’s general

'* Ross testified:

Q: Do you agree that this project was a surface

water quality protection issue?

Ross: In part, yes.

Q: What do you mean “in part”?

Ross: Well, it also has the potential to be

groundwater.

Q: Okay. So do you think that there might be a

threat to groundwater as a result of the

contamination on the property?

Ross: Certainly occurred to me.

App. 77

standards, lead contamination above 5 ppm (STLC) “would

require something to be done.” But, quite apart from Ross’s

post hoc statements, the RWQCB’s overall course of conduct

makes clear that it perceived an environmental threat worthy

of remedial action. At the most basic level, if remedial

action was truly unnecessary there was no reason for the

agency to withhold the no fv ther action letter Carson

Harbor’s consultants requested shortly after sending the

initial notice of contamination on the property - no reason to

invest all the time and energy supervising a costly

remediation. And once the RAP was proposed, the RWQCB

did not simply sign off on the consultant’s recommended

cleanup levels. instead, the agency conditioned site closure

on even lower lead levels, presumably to ensure proper

mitigation of a perceived threat to public health or the

environment. Moreover, when the cleanup was complete,

the agency sent its own staff to the site to verify that the

specifications of the RAP approval had been met before

issuing a no further action letter, and the letter specifically

predicates closure on a finding that “the remaining soil in the

bottom of the watercourse poses no further threat to surface

waters of the State.” (Emphasis added). Drawing all

inferences in favor of the plaintiff, as we must, we are bound

to conclude that the district court erred in finding that there

Q: What hazardous substances on the property did

you think were a threat to groundwater?

Ross: Lead primarily.

Q: Did the levels of lead that were found on this

property have the potential to get into the

groundwater?

Ross: Yes, the soluble lead.

aaa aR a

App. 78

was insufficient evidence of an environmental threat and that

Carson Harbor’s response costs were unnecessary.

2. Active/Passive Disposal

CERCLA creates four categories of potentially

responsible parties (“PRP’s”):

(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 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 disposal

or treatment facilities, incineration vessels or

sites selected by such person... .

App. 79

42 U.S.C. § 9607(a)(1)-(4). Only a party who falls within

one of these classes is subject to liability under the statute."

The district court ruled that the Partnership

Defendants were not PRP’s under § 9607(a)(2) because there

was no evidence of a “disposal” between 1977 and 1983

when they held the property. To reach this conclusion the

court rejected plaintiff's claim that the spread of

contamination from the tar and slag material into the

Surrounding soil constituted a “disposal.” As the court

reasoned:

While CERCLA was intended to reach

broadly, it also clearly expresses limits to the

contemplated statutory liability. To find

otherwise would subject previous owners who

had no knowledge of or control over

hazardous substances on their property to

liability under the statute. This result is in

stark conflict with the intent of CERCLA,

which is to affix the ultimate cost of cleaning

up disposal sites on the parties responsible for

the contamination.

Carson Harbor, 990 F. Supp. at 1195 (citation omitted).

There is a circuit split on the question whether the

statutory definition of disposal encompasses passive

migration of hazardous substances, compare Nurad, Inc. v.

William Hooper & Sons Co., 966 F.2d 837, 844-46 (4th Cir.

1992) (“disposal” includes passive migration); with United

'S Because a PRP may be eligible for one or more of the

defenses set forth in 42 U.S.C. § 9607(b), one’s status as a PRP is

a necessary but not sufficient condition of CERCLA liability.

App. 80

States v. 150 Acres of Land, 204 F.3d 698, 705-06 (6th Cir.

2000) (“disposal” requires active human conduct); ABB

Indus. Sys. Inc. v. Prime Technology, Inc., 120 F.3d 351,

357-59 (2d Cir. 1997) (same); United States v. CDMG Realty

Co., 96 F.3d 706, 713-18 (3d Cir. 1996) (same), and we have

yet to weigh in on the issue. See Kaiser Aluminum &

Chemical Co. v. Catellus Development, 976 F.2d 1338, 1342

n.7 (9th Cir. 1992)."*

As with any question of statutory construction, we

begin with the language and structure of the statute.

CERCLA states that the term “disposal” shall have the

meaning provided in RCRA. 42 U.S.C. § 9601(29).

According to 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). The argument that this definition

encompasses passive migration is straightforward. First, at

least three of the listed terms have well-recognized passive _

' District courts within the Ninth Circuit are divided on

the question. Compare Carson Harbor, 990 F. Supp. 1188 (C.D.

Cal. 1997) (“disposal” requires active human conduct) and

Ecodyne Corp. v. Shah, 718 F. Supp. 1454, 1456-57 (N.D. Cal.

1989) (same), with Stanley Works v. Snydergeneral Corp., 781 F.

Supp. 659, 662-64 (E.D. Cal. 1990) (“disposal” includes passive

migration).

App. 81

meanings. A hazardous waste may plainly “discharge,”

“spill,” or “leak,” without any active human participation.

Although other courts have focused on “spill” and “leak,”

the passive meaning of “discharge” is especially broad. See

WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 644

(Philip Babcock Gove & the Merriam-Webster Editorial

Staff, eds. 1993) (defining 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”). As in Nurad, “the

district court arbitrarily deprived these words of their passive

element by imposing a requirement of active participation as

a prerequisite to liability.” 966 F.2d at 845. Since the

prescribed definition includes passive migration by its own

terms, we are bound to give effect to that definition. See

Meese v. Keene, 481 U.S. 465, 484-85, 95 L. Ed. 2d 415, 107

S. Ct. 1862 (1987); SUTHERLAND, 2A STATUTES &

STATUTORY CONSTRUCTION § 47.07 at 152 (5th ed. 1992)

(“As a rule, a definition which declares what a term means is

binding upon the court.”).

Second, in the context of RCRA - the statute from

which the definition of disposal is imported - the Fourth

Circuit squarely rejected the “strained reading” that would

limit disposal to active human conduct. United States v.

Waste Indus., Inc., 734 F.2d 159, 164-65 (4th Cir. 1984).

And we have previously rejected a PRP’s invitation to

enforce a “crabbed interpretation” of disposal. See Kaiser

Aluminum, 976 F.2d at 1342 (following Fifth Circuit and

holding that “‘disposal’ should not be limited solely to the

initial introduction of hazardous substances onto property.

Rather, consistent with the overall remedial purpose of

CERCLA, ‘disposal’ should be read broadly to include the

subsequent ‘movement, dispersal, or release{ ] [of such

substances] during landfill excavations and _fillings.’”)

(quoting and following Tanglewood East Homeowners v.

App. 82

Charles-Thomas, Inc., 849 F.2d 1568, 1573 (Sth Cir. 1988))

(modifications in original).

Finally, including the passive meaning of the

statutory definition coheres with the structure and purpose of

CERCLA’s liability provisions. As this court has observed:

CERCLA was enacted to “provide for

liability, | compensation, cleanup, and

emergency response for hazardous substances

released into the environment and the cleanup

of inactive hazardous waste disposal sites.”

Pub. L. No. 96-510, 94 Stat. 2767 (1980). It

generally imposes strict liability on owners

and operators of facilities at which hazardous

substances were disposed.

3550 Stevens Creek, 915 F.2d at 1357; see id at 1363

(emphasizing “that [CERCLA] is to be given a broad

interpretation to accomplish its remedial goals”) (citing First

United Methodist Church v. U.S. Gypsum Co., 882 F.2d 862,

867 (4th Cir. 1989); Wickland Oil Terminals v. ASARCO,

792 F.2d 887, 891-92 (9th Cir. 1986)). Thus, while the

- statute was surely designed, as the district court noted, to

impose the costs of cleanup on “responsible parties,” the

imperative was to create a mechanism for prompt cleanup

and Congress was well aware that many directly responsible

parties were insolvent or no longer in existence. For that

reason, traditional causation requirements were abandoned in

favor of a strict liability regime. The categories of PRP’s

incorporated in the liability provisions are correspondingly

broad, sweeping in parties who may have done nothing

affirmatively to contribute to contamination at a site and

forcing them to disprove causation as an affirmative defense.

See 42 U.S.C. § 9607(b)(3). Including as PRP’s owners who

held land while waste passively migrated through the

App. 83

property is entirely consistent with this liability regime. As

the Fourth Circuit held in Nurad:

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 § 9607(a)(2) is

ownership or operation of a facility at the time

of a disposal, not culpability or responsibility

for the contamination. See United States v.

Monsanto, 858 F.2d 160, 167 (4th Cir. 1988)

(“The traditional elements of tort culpability

on which the site-owners rely simply are

absent from the statute.”); New York v. Shore

Realty Corp., 759 F.2d 1032, 1044 (2d Cir.

1985) (noting that Congress specifically

rejected a causation requirement). We must

decline therefore to engraft onto the statute

additional prerequisites to the reimbursement

of response costs which Congress did not

place there.

966 F.2d at 846 (holding that leaking mineral spirits from an

underground storage tank constituted “disposal” under §

9607(a)(2)).

We are not dissuaded from reaching this conclusion

by the thoughtful opinion of the Third Circuit in CDMG or

its progeny. Briefly, in CDMG the Third Circuit highlighted

a number of irrationalities that apparently result from giving

“disposal” a passive meaning. First, according to the canon

noscitur a sociis, “leak” and “spill” must be read together

with the surrounding words in the definition, all of which

“envision a human actor.” 96 F.3d at 714. Reading “leak”

and “spill” as passive when the surrounding words are active

undermines the coherence of the list. Second, giving

App. 84

“disposal” a passive meaning makes the term synonymous

with “release,” which Congress explicitly defined to include

not only “disposal” but terms typically used to describe

passive migration such as “leaching.” /d at 714-15

(“Congress’ 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 if they owned land at the time of ‘disposal,’

not at the time of ‘release.’”).'’ Third, the reference to the

“time of disposal” in § 9607(a)(2) is arguably an awkward

means of creating liability for all owners “after the

introduction of waste into the facility,” if that is all Congress

meant to do. Jd. at 715. Fourth, if “disposal” includes

passive migration, the so-called innocent landowner defense

would be rendered meaningless since no one could show that

he or she acquired the property “after disposal.” Jd. at 716;

see also 42 U.S.C. § 9601(35)(A) (defendant asserting

innocent landowner defense must show that “the real

property on which the facility concerned is located was

acquired by the defendant after the disposal or placement of

the hazardous substance on, in,-or at the facility”). Finally,

under a passive reading of “disposal,” prior owners who had

no knowledge that their land was contaminated would fall

within the statute’s liability provisions. According to the

'7 According to 42 U.S.C. § 9601(22):

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) ....

App. 85

Third Circuit and the district court here, this would not serve

the purpose of “forcing polluters to pay the costs associate:!

with their pollution.” CDMG, 96 F.3d at 717 (citations

omitted); Carson Harbor, 990 F. Supp. at 1195.

Even if we were to concede that these concerns do

indeed arise from reading “disposal” to include passive

migration, it is far from obvious that an “active-only”

interpretation must prevail. Even the CDMG court

recognized that “because of the great haste with which

CERCLA was passed, inconsistencies and redundancies

pervade the statute.” 96 F.3d at 715 n.5 (citing United States

v. Alcan Aluminum Corp., 964 F.2d 252, 258 n.5 (3d Cir.

1992)). Thus, when interpreting CERCLA, the identification

of inconsistency or redundancy in the statute is not

necessarily fatal to a given construction. Nor can one

automatically assume that a construction that appears to

resolve inconsistencies or avoid redundancies is consonant

with the intended design of the statute, especially if the

“saving” construction merely substitutes one form of

inconsistency or redundancy for another.

Returning to the CDMG court’s reasoning, however

tidy the application of noscitur a sociis renders the definition

of “disposal,” it conflicts with the plain meaning of the

passive terms included in the definition. Moreover, insofar

as the canon operates to narrow the definition of “disposal,”

it also conflicts with the well established principle that

remedial statutes are to be broadly construed to effectuate

their salutary purposes. See Louisiana-Pacific Corp. v.

ASARCO, Inc., 24 F.3d 1565, 1575 (9th Cir. 1994). If, as we

will see, the narrow reading eliminates liability for certain

App. 86

prior owners while other similarly situated owners are

covered as PRP’s, the reading must be rejected.”*

As for the redundancy of “release” and “disposal,” it

has long been recognized that “it is not possible to interpret

these two defmitions without some degree of inconsistency”

because both definitions share terms. United States v.

Petersen Sand & Gravel, Inc., 806 F. Supp. 1346, 1351 n.2

(N.D. Ill. 1992). “Whereas ‘release’ includes ‘disposal,’ the

definition of ‘disposal’ includes component events that are

also included in the definition of ‘release.’” Jd.’ The

'§ In any event, the CDMG court does not appear to have

been completely convinced of its noscitur a sociis argument. The

court said only that “Congress may have intended active meanings

of ‘leaking’ and ‘spilling.”” 96 F.3d at 714 (emphasis added).

The court went on to distinguish Nurad not on the theory that the

Fourth Circuit wrongly interpreted disposal to include passive

migration, but rather on the narrower ground that although

disposal must include “leaking” from an underground storage

tank, as in Nurad, disposal clearly does not include the gradual

spread of wastes through a landfill. Id. All very well, except that

in conceding that some forms of passive migration are indeed

covered by the passive terms in the statute, the entire foundation of

the court’s analysis is undermined - all the inconsistencies and

redundancies identified as reasons to avoid a passive reading are

present under its own reading. The court also completely ignored

the passive connotation of discharge.

- Tellingly, as we have seen, the common definition of

“discharge” includes “release.” Other terms in the statute present

similar conundrums. Compare, for instance, CERCLA’s use of

the terms “hazardous substance” and “hazardous waste” on the

question whether CERCLA covers the voluntary removal of

hazardous building material from a commercial building under the

prior owner provision. See 3550 Stevens Creek, 915 F.2d at 1359-

65 (building materials containing hazardous substances not

“disposed” under 42 U.S.C. § 9607(a)(2) until disposed “as

waste”).

App. 87

question is whether Congress intended to avoid the particular

redundancy that would result from reading “disposal” in

accordance with the passive terms in its definition and

whether this particular redundancy is one we should care

about. As elsewhere, we are left to infer answers to these

questions from the consequences that would result from

alternative constructions. Because there is no indication that

the operation of either term in the statute would be

compromised (and the purposes of the statute are served by

reading “disposal” to include passive migration), we reject

the CDMG court’s narrower construction.

The reference to “time of disposal” is neither

awkward nor superfluous under our reading. Rather, the

time of disposal requirement draws an important distinction

in CERCLA’s otherwise capacious liability framework by

making disposal a temporal trigger for prior owner liability:

owners and operators who precede the disposal of hazardous

substances are not covered by the Act, regardless of their

knowledge that selling the property to a certain buyer (take,

for instance, a company that operates landfills or hazardous

waste sites) may result in contamination. The time of

disposal requirement would certainly do more work under an

active disposal interpretation since it would import a form of

causation analysis into § 9607(a)(2), but given that Congress

pushed causation requirements as a general matter into the

statutory defenses, we are loathe to assume that it intended

anything unique in the liability provision governing prior

owners and operators.

And contrary to the CDMG court’s analysis, an active

construction of “disposal” is not required to preserve the

innocent landowner defense. The CDMG court reasoned that

the innocent landowner defense would almost never apply

under a passive migration theory “as there would generally

be no point ‘after disposal.’” 96 F.3d at 716. But on its face,

App. 88

the innocent landowner defense applies if the property “was

acquired after the disposal or placement of the hazardous

substances.” 42 U.S.C. § 9601(35)(A) (emphasis added).

Giving effect to Congress’ explicit use of the disjunctive,

and to the common meaning of “placement,” this defense

applies even though wastes were passively migrating during

a defendant’s ownership so long as he or she acquired the

property after the hazardous wastes were first placed on the

property.”

Finally, an active theory of “disposal” creates

inconsistencies of its own. Under an active theory one must

assume that Congress intended to create a major distinction

between current and former owner/operators. Current

owners are PRP’s without regard to fault, but prior owners

would be completely immune from suit if they did not own

the property during an act of disposal. Even prior owners

who knew or should have known that their property was

contaminated and that the waste was spreading would be

immune.’ One must also assume that Congress intended to

0 The CDMG court dismisses the disjunctive reference to

placement on the grounds that it is redundant since the definition

of disposal includes placement. 96 F.3d at 716 n.7. However, the

redundancy is avoided by assuming that Congress meant what it

said - i.e., that a defendant rieed only show that he or she

purchased the property either (1) after disposal or (2) after

placement.

21 This argument assumes without deciding that the

innocent landowner defense is equally available to current and

former owners and that nothing in 42 U.S.C. § 9601(35\C)

creates liability beyond the class of PRP’s established in §

9607(a). Compare CDMG, 96 F.3d at 716-17 (noting that

innocent landowner defense may not be available to prior owners

under 42 U.S.C. § 9601(35)(C)), with ABB Industrial, 120 F.3d at

358 (citing Westwood Pharmaceuticals v. National Fuel Gas Dist.

App. 89

create an irrational distinction between prior owners. Owners

who held property while contamination was passively

migrating would be categorically exempt even if they (1)

failed to conduct a reasonably diligent review of the

environmental condition of their property (and thereby

allowed readily discoverable contamination to worsen), or

(2) simply allowed known, pre-existing contamination to

remain untreated. On the other hand, prior owners at the

time of an active disposal would be PRP’s along with current

owners even if they were in no way responsible for, or

connected with, the disposal.

Here, the district court’s endorsement of an active

theory would completely immunize the Partnership

Defendants. But there is very little to distinguish the current

owner plaintiff from the Partnership Defendants. Both came

into ownership long after the tar and slag material was

“actively” disposed on the property, and neither directly

caused any contamination by their use of the property as a

mobile home park. Instead, both parties were owners while

lead and TPH from the tar and slag discharged into the

wetlands. The only significant distinction between the

parties is that, during the Partnership Defendants’ ownership,

Unocal was still engaged in oil production on the property.

Thus, if anything, the Partnership Defendants had more

reason to be vigilant about the possibility of contamination

from oil production. Yet by reading “at the time of the

disposal” to require human agency, the Partnership

Defendants would be completely exempt from liability for

Corp., 964 F.2d 85, 91 (2d Cir. 1992), for proposition that the

innocent landowner defense is available to prior owners). But

because the liability provisions speaks to owners and operators,

the argument would not be diminished even if our assumptions

regarding the innocent landowner defense were unwarranted.

App. 90

the cleanup costs incurred by Carson Harbor. Under a

passive theory, by contrast, the Partnership Defendants are

responsible parties unless and until they establish a statutory

defense. A passive theory fits better with Congress’ decision

to eschew a causation-based liability framework and to

ensure prompt cleanup by drawing in all “potentially

responsible parties.” Accordingly, we hold that “disposal”

includes passive migration and that plaintiffs are entitled to

proceed in their CERCLA claim against the Partnership

Defendants.”

3. Other CERCLA Issues

We decline to decide, in the first instance, all but one

of the other issues raised by the Government Defendants to

support summary judgment in their favor on the CERCLA

claim.” The Government Defendants contend that -since

22 We find no error, however, in the district court’s

conclusion that Carson Harbor failed to raise a genuine issue of

fact on the question of active migration during the Partnership

Defendants’ ownership of the property. The record shows that the

tar and slag was dumped in the wetlands area long before 1977

when the Partnership defendants purchased the property.

Moreover, there was no evidence that lead-containing storm water

runoff reached the property between 1977 and 1983, and the

district court properly declined Carson Harbor’s invitation to

assume (by taking judicial notice) that lead-containing runoff

reached the property during those years.

23 We leave it to the district court to resolve on remand the

Government Defendants’ additional claims that plaintiff's

response costs were not consistent with the national contingency

plan (“NCP”), that federally permitted releases are exempt from

CERCLA coverage under 42 U.S.C. § 9607(j), and that the third

party defense applies. Although we will generally uphold

summary judgment on any ground supported by the record, the

App. 91

Carson Harbor only undertook removal of the tar and slag

material and impacted soils, there is no causal nexus between

the response costs incurred and any contamination due to

storm water runoff. This argument fails because it has long

been established that a plaintiff need not “fingerprint” wastes

in order to recover. As the Fourth Circuit has held:

In deleting causation language from section

107(a), we assume as have many other courts,

that Congress knew of the synergistic and

migratory capacities of leaking chemical

waste, and the technological infeasibility of

tracing improperly disposed waste to its

source. .. . See United States v. Wade, 577 F.

third party defense and the federally permitted release exemption

are affirmative defenses as to which the Government Defendants

bear the burden of proof - a burden they have failed to meet on the

record before this court. Moreover, we decline to take up the

Government Defendants’ passing reference to the NCP

consistency issue. We have not only held that substantial

compliance is sufficient to establish that response costs were

incurred consistent with the NCP, see Louisiana-Pacific, 24 F.3d

at 1575-76; NL Indus., 792 F.2d at 898-99 (“consistency with the

national contingency plan does not necessitate strict compliance

with its provisions”); Wickland Oil, 792 F.2d at 891 (observing

that “response costs incurred by a private party may be ‘consistent

with the national contingency plan’ so long as the response

measures promote the broader purposes of the plan”), we have

emphasized that consistency is a question of fact “to be

determined at the damages stage of a section 107(a) action,” see

Cadillac Fairview, 840 F.2d at 695, and is therefore best suited to

resolution at trial, unless there is no question that costs were

incurred in violation of the NCP. On the record before this court,

we cannot say that Carson Harbor failed to comply with the 1990

requirements of the NCP.

CC

App. 92

Supp. 1326, 1332 (E.D. Pa. 1983) (“To

require a plaintiff under CERCLA to

‘fingerprint’ wastes is to eviscerate the

statute.”).

Monsanto, 858 F.2d at 170; see also Amoco Oil, 889 F.2d at

670 n8& (“In cases involving multiple sources of

contamination, a plaintiff need not prove a specific causal

link between costs incurred and an individual generator’s

waste.”) (citations omitted).

B. State Claims Against the Government Defendants

California Civil Code § 3482 provides that “nothing

which is done or maintained under the express authority of a

statute can be deemed a nuisance.” There was no error in the

district court’s decision that this provision precludes all of

Carson Harbor’s state law claims against the Government

Defendants. California courts have read § 3482 to preclude

common law challenges to statutorily authorized conduct.

See Farmers Ins. Exch. v. California, 175 Cal. App. 3d 494,

503, 221 Cal. Rptr. 225 (1985); cf Varjabedian v. City of

Madera, 20 Cal. 3d 285, 572 P.2d 43, 142 Cal. Rptr. 429

(1977). Since the Government Defendants were issued

NPDES permits in 1990 and 1996, and since there is no

evidence of lead-containirg storm ‘water runoff to the

property prior to 1994 (or a violation of the permits),

summary judgment was properly granted as to these claims. _

C. Express Indemnity From the Partnership Defendants

The district court granted summary judgment to the

Partnership Defendants on Carson Harbor’s claim for

indemnity under the purchase agreement because it had

already concluded that the cleanup was not necessary within

the meaning of 42 U.S.C. § 9607(a)(4)(B). The indemnity

App. 93

provision applies only if the Partnership Defendants would

have been obliged to remove the hazardous substances in

1983. In view of our holding that there are genuine issues as

to whether Carson Harbor’s response costs were necessary,

we reverse the grant of summary judgment on the claim for

indemnity.

IV. Conclusion

The district court’s grant of summary judgment in favor of

all defendants on the CERCLA claim is REVERSED. We

also REVERSE the district court’s grant of summary

judgment for the Partnership Defendants on plaintiff's claim

for indemnity under the purchase agreement. The case is

REMANDED for further proceedings consistent with this

opinion. All parties are to bear their own costs.

AFFIRMED IN PART, REVERSED IN PART AND

REMANDED.

App. 94

INER, Senior District Judge, dissenting i :

WEINER, Senior Distric ge, dissen 8 1N Parte,

While I join Parts I, II, III A 1, III B and III C of the

panel opinion, I cannot agree that CERCLA liability extends

to the so-called passive migration of hazardous wastes.

Accordingly, I dissent from Part III A 2.

In adopting the passive migration theory, first

espoused eight years ago by the Fourth Circuit in Nurad, Inc.

v. William Hooper & Sons Co., 966 F.2d 837 (4th Cir. 1992),

but finding no adherents since, the panel opinion casts this

Circuit’s lot with a distinctly minority view of CERCLA

liability. To date, each circuit to have discussed Nurad has

rejected its reasoning and its result. See United States v.

CDMG Realty Co., 96 F.3d 706 (3d Cir. 1996); ABB

Industrial Systems v. Prime Technology, Inc., 120 F.3d 351

(2dCir. 1997); United States v. 150 Acres of Land, 204 F.3d

698, 705-06 (6th Cir. 2000). The reason for this seems clear

to me. As stated by the Third Circuit in CDMG Realty, “[a]

thorough examination of the text and structure of CERCLA

convinces [me] that the passive migration of contaminants

alleged here does not constitute disposal [as that term is used

in 42 U.S.C. §§ 6903(3) and 9607(a)(2)].” 96 F.3d at 713.

To be considered a potentially responsible party

under CERCLA, one must be “the owner or operator at the

time the hazardous substances were disposed” on the

property. Section 9607(a)(2). “Disposal,” in turn, is defined

as the “discharge, deposit, injection, dumping, spilling,

leaking, or placing of any solid waste or hazardous waste

into or on any land or water.” Section § 6903(3). Nurad

held that, under § 9607(a), a landowner can be held to have

disposed of hazardous material if he passively allowed that

material to migrate in the environment during his ownership.

Nurad, 966 F.2d at 846 (“Thus, we hold that § 9607(a)(2)

imposes liability not only for active involvement in the

App. 95

‘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.””).'

To my mind, however, none of the words contained

in the section can be construed to have a passive connotation.

While the panel opinion attempts to define some of the

various verbs found in the statute to imply passive migration

- specifically discharge, spill and leak - I believe that the

statutory scheme requires that even these verbs be

understood to imply some kind of active human conduct.

Accord CDMG Reality, 96 F.3d at 714 (“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.”). To me, something “spills” only

when it is actively emptied or, because of human action or

inaction, is placed in a position where gravity, or the

elements taking their natural course, cause the contents to be

' In Nurad, the prior owners of a property, Hooper and

Mumaw, were held liable under CERCLA for cleanup costs

incurred by

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