Ascon Properties, Inc. v. Mobil Oil Co.

Decision Date31 January 1989
Docket NumberNo. 87-5807,87-5807
Citation866 F.2d 1149
Parties, 57 USLW 2472, 12 Fed.R.Serv.3d 1467, 19 Envtl. L. Rep. 20,374 ASCON PROPERTIES, INC., Plaintiff-Appellant, v. MOBIL OIL COMPANY; Shell Oil Company; TRW; Douglas Oil Company; Edgington Oil Company; Aluminum & Magnesium Inc.; Routh Transport/IT Corporation; Southern California Edison Company; Sabre Refining Company; Dow Chemical Company; BKK Corporation; SoCal Oil & Refining Company; Signal Companies & Signal Oil Company, Defendants-Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

Raphael Metzger, Seal Beach, Cal., for plaintiff-appellant.

Ward L. Benshoof, McClintock, Kirwan, Benshoof, Rochefort & Weston, and Lori Huff Dillman, Sidley & Austin, Los Angeles, Cal., for defendants-appellees.

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

Before WALLACE, FARRIS and WIGGINS, Circuit Judges.

WALLACE, Circuit Judge:

Ascon Properties, Inc. (Ascon) appeals from a judgment dismissing its action brought against certain alleged generators and transporters of hazardous waste (Mobil). The district court dismissed Ascon's first claim brought under section 107(a) of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Sec. 9607(a) (CERCLA), for failure to state a claim upon which relief could be granted. Ascon's second claim, brought under the Resource Conservation Recovery Act, 42 U.S.C. Sec. 6972(a) (RCRA), was dismissed for lack of subject matter jurisdiction or for failure to state a claim--the record is unclear. Ascon also appeals the district court's denial of leave to amend. We have jurisdiction pursuant to 28 U.S.C. Sec. 1291. We reverse the dismissal of Ascon's CERCLA claim, and affirm the dismissal of the RCRA claim.


According to its second amended complaint, Ascon purchased a 37-acre parcel of land in Huntington Beach, California (property) on February 8, 1983, which it intended to develop. Between 1938 and 1972, the property was used as an active disposal site for waste from both industrial sources and oil field operations. Although Ascon knew that the property had been used as a landfill for waste material, it allegedly did not know that hazardous wastes had been deposited there.

The California Department of Health Service (Department) was assigned the "lead agency" role by the Environmental Protection Agency (EPA) to clean up hazardous waste sites in California. The Department declared the property a hazardous waste site through publication of its State Priority Ranking List on January 10, 1984. On October 1, 1984, Ascon sent a letter to Mobil requesting a "sum certain" to cover the costs of cleaning up the property. The Department issued a demand letter on October 29, 1984, to some of the parties potentially liable for clean-up costs. On February 21, 1985, the Department demanded that Ascon submit a hazardous substance response plan, or Remedial Action Master Plan, for the property. Ascon prepared and submitted a remedial plan, which the Department then directed Ascon to implement. Ascon estimates that it will cost between $251,780,580 and $268,075,100 to clean up the property.

On June 27, 1985, Ascon filed suits in state and federal courts. In the federal complaint, Ascon named numerous oil companies as alleged generators of hazardous waste deposited on the property, and other companies as alleged transporters of waste to the property. Ascon sought indemnification compensatory, special and punitive damages, and injunctive and declaratory relief. Ascon's complaint contained claims under two federal statutes--CERCLA and RCRA--as well as state law claims of negligence, nuisance, and ultrahazardous activities.

A week after filing its initial complaint, Ascon filed a first amended complaint, which contained only minor changes. Mobil filed a flurry of motions seeking, among other things, dismissal of all of Ascon's claims. A hearing on these motions was held before the district judge on December 1, 1986. In an order filed December 17, 1986, the district court dismissed Ascon's pendent state law claims, dismissed Ascon's CERCLA claim for failure to state a claim for which relief could be granted, and dismissed Ascon's RCRA claim for lack of subject matter jurisdiction. The court granted Ascon leave to amend its complaint. The court's 13-page order offered guidance on how Ascon could properly allege claims under CERCLA and RCRA.

Ascon filed its second amended complaint on January 12, 1987. Mobil again moved to dismiss, arguing that none of the deficiencies identified by the court had been corrected. Another hearing was held on February 23, 1987. At the close of the hearing, the district judge dismissed Ascon's CERCLA and RCRA claims with prejudice, and denied Ascon leave to amend the complaint again.


Ascon first argues that the district court erroneously dismissed its CERCLA claim for failure to state a claim for which relief could be granted. We review the dismissal independently. Cadillac Fairview/California v. Dow Chemical Co., 840 F.2d 691, 693 (9th Cir.1988) (Cadillac Fairview ). We must accept Ascon's material allegations in the complaint as true and construe them in the light most favorable to Ascon. Wickland Oil Terminals v. Asarco, Inc., 792 F.2d 887, 889-90 (9th Cir.1986) (Wickland ). We may affirm the district court's dismissal "only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d 59 (1984) (Hishon ).

Mobil advances three arguments for upholding the district court's dismissal of Ascon's CERCLA claim: (1) the claim fails to allege all the prima facie elements of a CERCLA claim; (2) even if Ascon's complaint alleges every prima facie element, it consists entirely of conclusory allegations and contains insufficient facts to survive a Rule 12(b)(6) motion; and (3) Ascon disregarded the instructions embodied in the district court's order dismissing Ascon's first amended complaint.


Congress passed CERCLA in 1980 to facilitate the cleanup of leaking hazardous waste disposal sites. Exxon Corp. v. Hunt, 475 U.S. 355, 359-60, 106 S.Ct. 1103, 1108-09, 89 L.Ed.2d 364 (1986); see Wickland, 792 F.2d at 890 (describing structure and purposes of CERCLA). To this end, 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. 42 U.S.C. Sec. 9607(a); Cadillac Fairview, 840 F.2d at 693.

To state a claim under 42 U.S.C. Sec. 9607(a), a plaintiff must allege that (1) the waste disposal site is a "facility" within the meaning of 42 U.S.C. Sec. 9601(9); (2) a "release" or "threatened release" of any "hazardous substance" from the facility has occurred, id. Sec. 9607(a)(4); and (3) such "release" or "threatened release" has caused the plaintiff to incur response costs that are "consistent with the national contingency plan," id. Secs. 9607(a)(4) & (a)(4)(B). See United States v. Conservation Chemical Co., 619 F.Supp. 162, 184 (W.D.Mo.1985); see also State of New York v. Shore Realty Corp., 759 F.2d 1032, 1043 (2d Cir.1985) (Shore Realty ). In addition, the defendant must fall within one of four classes of persons subject to CERCLA's liability provisions:

(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 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....

42 U.S.C. Sec. 9607(a)(1)-(4); see Shore Realty, 759 F.2d at 1043. In this suit, Ascon has sued various companies as generators of waste under section 9607(a)(3), and various transporters under section 9607(a)(4).

Ascon's second amended complaint alleges each of these material elements. Paragraphs 1 and 27, when read together, allege that the property is a "facility" within the meaning of CERCLA. Paragraphs 14, 15, 17, and 25 allege a "threatened release" or "release" of "hazardous wastes and substances" from the property. Paragraphs 25 and 29 allege that Ascon has incurred "response costs." In paragraph 14, Ascon alleges that the alleged generator companies "disposed of ... hazardous wastes and substances on the [property]," conduct which includes them in the category of defendants authorized by section 9607(a)(3). The alleged transporters are brought within the scope of section 9607(a)(4) by Ascon's allegations in paragraphs 17 and 18, including Ascon's allegation that the transporters "selected" the property for disposal. Thus, Ascon's second amended complaint pleads all of the above core elements of a prima facie claim under section 107(a) of CERCLA.


Mobil argues, however, that Ascon's second amended complaint is deficient because it neither specifically alleges (1) the manner in which a "release" or "threatened release" has occurred, nor (2) details the types of response costs incurred. It is unclear whether Mobil contends that these more specific allegations are elements of a prima facie case under CERCLA, or simply additional factual allegations necessary to complement the broader prima facie elements outlined above. To the extent Mobil argues the latter, we will address that argument in the next section. We now consider whether a CERCLA claim requires, as a prima facie element, a specific...

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