3550 Stevens Creek Associates v. Barclays Bank of California

• Decision Date: 03 October 1990
• Docket Number: No. 88-15503,88-15503
• Citation: 3550 Stevens Creek Associates v. Barclays Bank of California, 915 F.2d 1355 (9th Cir. 1990)
• Parties: , 59 USLW 2235, 21 Envtl. L. Rep. 20,011 3550 STEVENS CREEK ASSOCIATES, a Limited Partnership, Plaintiff-Appellant, v. BARCLAYS BANK OF CALIFORNIA, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1355

915 F.2d 1355

32 ERC 1105, 59 USLW 2235, 21 Envtl.

L. Rep. 20,011

3550 STEVENS CREEK ASSOCIATES, a Limited PartnershipPlaintiff-Appellant, v.BARCLAYS BANK OF CALIFORNIA, Defendant-Appellee.

No. 88-15503.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Nov. 14, 1989.

Decided Oct. 3, 1990.

Bernard S. Greenfield and Marcia E. Gerston, Levy, Greenfield & Davidoff, San Jose, Cal., Kenneth A. Manaster, Los Altos, Cal., for plaintiff-appellant.

Timothy M. Flaherty, Jordan, Keeler & Seligman, San Francisco, Cal., for defendant-appellee.

Donald A. Carr, Anne S. Almy and David C. Shilton, U.S. Dept. of Justice, Washington, D.C., for amicus.

Appeal from the United States District Court for the Northern District of California.

Before FARRIS, PREGERSON and RYMER, Circuit Judges.

RYMER, Circuit Judge:

3550 Stevens Creek Associates appeals the entry of judgment on the pleadings in its action for recovery of costs incurred in the voluntary removal of asbestos during remodeling of a commercial building against Barclays Bank of California, a predecessor-in-interest who owned the building at the time materials containing asbestos were installed.The United States as Amicus Curiae has filed a brief on behalf of Stevens Creek.The question on appeal is whether a private party may recover its response costs for clean-up of asbestos installed in a commercial building under section 107(a)(2)(B) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. Sec. 9607(CERCLA).We hold that CERCLA does not permit such an action, and affirm.

I

In 1963, First Valley Corporation constructed a building, located at 3550 Stevens Creek Boulevard in San Jose, California, which contained asbestos insulation and fire retardants.In 1969, Barclays Bank acquired First Valley's assets.First Valley Corporation was dissolved in 1971, when Barclays acquired title to the property.Barclays sold the property to Stevens Creek in 1984.From 1984 through 1986, Stevens Creek remodeled the building, spending more than $100,000.00 in removing asbestos.

Stevens Creek brought this suit in district court under CERCLA, 42 U.S.C. Secs. 9601-9657.It sought damages under section 107(a),42 U.S.C. Sec. 9607(a) for removal costs incurred.On Barclay's motion the district court granted judgment on the pleadings, holding that no authority exists for the award of such relief.

II

A judgment on the pleadings is a decision on the merits which we review de novo.General Conference Corp. of Seventh-Day Adventists v. Seventh-Day Adventist Congregational Church, 887 F.2d 228, 230(9th Cir.1989), cert. denied, --- U.S. ----, 110 S.Ct. 1134, 107 L.Ed.2d 1039(1990);McGlinchy v. Shell Chem. Co., 845 F.2d 802, 810(9th Cir.1988).Judgment on the pleadings is proper when there are no issues of material fact, and the moving party is entitled to judgment as a matter of law.Fed.R.Civ.P. 12(c).The district court's interpretation of CERCLA is also reviewed de novo.Idaho v. Hanna Mining Co., 882 F.2d 392, 395(9th Cir.1989).We may affirm the district court's decision on any ground supported by the record.Marino v. Vasquez, 812 F.2d 499, 508(9th Cir.1987);Hatch v. Reliance Ins. Co., 758 F.2d 409, 414(9th Cir.), cert. denied, 474 U.S. 1021, 106 S.Ct. 571, 88 L.Ed.2d 555(1985).

III

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.42 U.S.C. Sec. 9607(a);Hanna, 882 F.2d at 394.To promote these objectives, Congress created a private claim for certain "response costs" against "various types of persons who contributed to the dumping of hazardous waste at a site."Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1152(9th Cir.1989)(citations omitted).

CERCLA employs a bifurcated mechanism to promote the cleanup of hazardous waste sites, hazardous spills, and releases of hazardous substances into the environment.Through the creation of Superfund, the federal government is empowered to respond to hazardous waste disposal.42 U.S.C. Secs. 9604-05,9611-12.The statute also authorizes private parties to institute civil actions to recover the costs involved in the cleanup of hazardous wastes from those responsible for their creation.42 U.S.C. Sec. 9607(a)(1-4).SeeWickland Oil Terminals v. Asarco, Inc., 792 F.2d 887, 890-92(9th Cir.1986);Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805 F.2d 1074, 1081(1st Cir.1986);Walls v. Waste Resource Corp., 823 F.2d 977, 980-81(6th Cir.1987);Prudential Ins. Co. of America v. United States Gypsum, 711 F.Supp. 1244, 1251(D.N.J.1989);United States v. Reilly Tar and Chem. Corp., 546 F.Supp. 1100, 1112(D.Minn.1982);H.R.Rep. No. 1016at 22, reprinted in 1980 U.S.Code Cong. & Admin.News 6119, 6125.

A private party may recover its "response costs"¹ for cleanup of hazardous wastes from a liable party under Section 107(a) of CERCLA, 42 U.S.C. Sec. 9607(a).Section 107(a) provides:

(a) Notwithstanding any other provision of rule of law, and subject only to the defenses set forth in subsection (b) of this section--

(1) the owner and operator of a vessel or a facility (2) any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of,

(3) any person who by contract, agreement, or otherwise arranged for disposal or treatment, 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 cause the incurrence of response costs, of hazardous substance, shall be liable for--

(A) all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe not inconsistent with the national contingency plan;

(B) any other necessary costs of response incurred by any other person consistent with the national contingency plan;

(C) damages for injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing such injury, destruction, or loss resulting from such a release; and

(D) the costs of any health assessment or health effects study carried out under section 104(i).

There is no question that section 107(a)(2)(B)"expressly creates a private cause of action."Wickland Oil Terminals, 792 F.2d at 890.AccordWalls, 823 F.2d at 980-81.To prevail in a private cost recovery action, a plaintiff must establish that (1) the site on which the hazardous substances are contained is a "facility" under CERCLA's definition of that term, Section 101(9),42 U.S.C. Sec. 9601(9);²(2) a "release" or "threatened release" of any "hazardous substance" from the facility has occurred, 42 U.S.C. Sec. 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. Secs. 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).Ascon Properties, 866 F.2d at 1152.

Stevens Creek argues that it has sufficiently pleaded all the allegations necessary for a claim under section 107, and that its cause of action is properly brought under the actual language of that section.In its view section 107 is not subject to any relevant limitations, particularly to a limitation on governmental responses to release from products which are part of the structure of a building set out in section 104(a)(3).Barclays contends that its predecessors-in-interest did not "dispose" of a hazardous substance within the meaning of section 107, and that the response limitations in section 104 are persuasive authority that removal of building materials containing asbestos is outside the scope of CERCLA. ³

We agree with Stevens Creek that the limitation on governmental response in section 104 is not dispositive.At the same time, there is no authority recognizing a private right to relief for the voluntary removal of asbestos from a commercial building.The cases upon which Stevens Creek and the EPA rely concern the disposal or dumping of hazardous substances as waste, and not the removal of asbestos or any other building material from a commercial building.⁴ Even those cases which do involve asbestos relate to its disposal as waste rather than its use as a building material, ⁵ and no federal court which has considered the placement of asbestos as part of the structure of a building has concluded that it falls within the scope of Section 107(a).⁶

A

We therefore begin by considering the plain language of the statute.American Tobacco Co. v. Patterson, 456 U.S. 63, 68, 102 S.Ct. 1534, 1537, 71 L.Ed.2d 748(1982).To be liable under Section 107(a)(2)(B), there must have been a "release" or "threatened release" of a hazardous substance, and the defendant must be a person "who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of."42 U.S.C. Sec. 9607(a)(2) and (4).

"Release" is defined in section 101(22) as "any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment...."⁷The "environment" includes surface and ground waters and "ambient air within the United States."⁸Other courts...