Cadillac Fairview/California, Inc. v. Dow Chemical Co., s. 86-6464

• Citation: 840 F.2d 691
• Decision Date: 25 February 1988
• Docket Number: Nos. 86-6464,86-6733,s. 86-6464
• Parties: , 56 USLW 2523, 18 Envtl. L. Rep. 20,470 CADILLAC FAIRVIEW/CALIFORNIA, INC., a California corporation, Plaintiff- Appellant. v. DOW CHEMICAL CO., a Delaware corporation, et al., Defendants, and United States of America; Gerald P. Carmen, Administrator of the General Services Administration; William Ruckelshaus, Administrator of the Environmental Protection Agency, Defendants-Appellees, Shell Oil Company; Cabot, Cabot & Forbes Interim Company, Respondents. CADILLAC FAIRVIEW/CALIFORNIA, INC., a California corporation, Plaintiff- Appellant, v. DOW CHEMICAL CO., a Delaware corporation; Shell Oil Company, Defendants- Appellees, and Cabot, Cabot & Forbes Interim Company; Thomas Heinsheimer, Chairman of the Board of the South Coast Air Quality Management District; Douglas Ferguson, President of the Central and West Basin Water Replenishment District of the State of California; Peter Rank, Director of the State Department of Health Services of the State of California; Jane Bray, Acting Chairman of the Board of the Regional Water Quality Control Board of the State of California for the Los Angeles Region, Defendants.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 691

840 F.2d 691

27 ERC 1313, 56 USLW 2523, 18 Envtl.

L. Rep. 20,470

CADILLAC FAIRVIEW/CALIFORNIA, INC., a California

corporation, Plaintiff- Appellant. v. DOW CHEMICAL CO., a Delaware corporation, et al., Defendants, and United States of America; Gerald P. Carmen, Administrator

of the General Services Administration; William

Ruckelshaus, Administrator of the

Environmental Protection

Agency, Defendants-Appellees,

Shell Oil Company; Cabot, Cabot & Forbes Interim Company,

Respondents.

CADILLAC FAIRVIEW/CALIFORNIA, INC., a California

corporation, Plaintiff- Appellant, v. DOW CHEMICAL CO., a Delaware corporation; Shell Oil

Company, Defendants- Appellees,

and

Cabot, Cabot & Forbes Interim Company; Thomas Heinsheimer,

Chairman of the Board of the South Coast Air Quality

Management District; Douglas Ferguson, President of the

Central and West Basin Water Replenishment District of the

State of California; Peter Rank, Director of the State

Department of Health Services of the State of California;

Jane Bray, Acting Chairman of the Board of the Regional

Water Quality Control Board of the State of California for

the Los Angeles Region, Defendants.

Nos. 86-6464, 86-6733.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Oct. 6, 1987.

Decided Feb. 25, 1988.

Gregory R. Smith, Irell & Manella, Los Angeles, Cal., for plaintiff-appellant.

Stephen T. Swanson, Lawler, Felix & Hall, Los Angeles, Cal., for defendant-appellee Dow.

Edwin C. Schreiber, Keltner & Schreiber, Inc., Los Angeles, Cal., for defendant-appellee Shell.

Maria A. Iizuka, Dept. of Justice, Washington, D.C., for defendant-appellee United States.

Reed Sato, Deputy Atty. Gen., Sacramento, Cal., for amicus curiae.

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

Before CHAMBERS, WALLACE and POOLE, Circuit Judges.

WALLACE, Circuit Judge:

Cadillac Fairview/California, Inc. (Cadillac Fairview) appeals the district court's judgment dismissing its claims for damages and for declaratory and injunctive relief against Dow Chemical Co. (Dow) and Shell Oil Co. (Shell) for failure to state a claim upon which relief can be granted. Cadillac Fairview also appeals the order granting summary judgment in favor of the Administrator of the General Services Administration (GSA) and the United States of America (federal defendants). On appeal, Cadillac Fairview contends that the district court's order dismissing its claims and granting summary judgment was premised on an erroneous interpretation of section 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), 42 U.S.C. Sec. 9607(a). We have jurisdiction under 28 U.S.C. Sec. 1291 and 28 U.S.C. Sec. 1292(b). We reverse the dismissal of Cadillac Fairview's claims for damages and declaratory relief against Shell and Dow, and we reverse the summary judgment in favor of the federal defendants. We affirm the dismissal of Cadillac Fairview's claims for injunctive relief.

I

Cadillac Fairview's complaint alleges that it is the owner of certain real property (the Site) located in Torrance, California. Cadillac Fairview purchased the Site from CC & F Western Development Co., Inc. (Western) in 1976. It later learned that hazardous substances had been deposited at the Site, and that these substances had migrated into the underlying soil. Cadillac Fairview conducted chemical tests and analyses at the Site, which indicated that the presence of various hazardous substances in the soil threatened to cause substantial environmental and health problems. State officials requested Cadillac Fairview to undertake certain steps to protect neighborhood residents from illnesses that might result from contact with the hazardous substances. Pursuant to the state's request, Cadillac Fairview hired engineers to conduct chemical testing at the Site to evaluate the hazards posed by the substances, erected a fence around the Site, employed a guard service to secure the Site from trespassers, and posted bilingual "no trespassing" signs at the Site. These measures allegedly cost Cadillac Fairview in excess of $70,000.

According to the complaint, the federal government acquired the Site in 1942 and constructed a rubber-producing plant on it. The government contracted with Dow to operate the facility and authorized Dow to dump hazardous by-products from the facility at the Site. In 1955, Shell acquired the Site from the government. During the period of its ownership, Shell allegedly deposited hazardous substances at the Site and took no measures to prevent the release of those substances into the environment.

Shell owned the Site until 1972. It was then owned successively by defendants International Property Development Co. (International) and by Western. Defendant Cabot, Cabot & Forbes (CCF) is the successor in interest to International and Western. None of the latter defendants are parties to this appeal.

Cadillac Fairview sued the federal defendants, Dow, and Shell in district court under CERCLA Sec. 107(a), 42 U.S.C. Sec. 9607(a), to recover its costs of responding to the hazardous substances. Cadillac Fairview also requested a declaration that any cleanup costs or other damages resulting from the presence of the hazardous substances should be borne only by Dow, Shell, the federal defendants, or others who owned the property at the time of the dumping or who were responsible for such dumping. Finally, it requested an injunction requiring Dow, Shell, CC & F, and the GSA to remove hazardous wastes from the Site. Cadillac Fairview also brought state law claims against various defendants.

On the motions of Dow and Shell, the district court dismissed Cadillac Fairview's CERCLA claims for failure to state a claim upon which relief could be granted, and dismissed the pendent state law claims for lack of jurisdiction. The district court certified its order for immediate appeal under section 1292(b). The federal defendants' motion for summary judgment was granted, and the judgment certified for appeal under Fed.R.Civ.P. 54(b). We consolidated the appeals.

II

We review de novo the district court's dismissal of Cadillac Fairview's federal claims for failure to state a claim upon which relief could be granted. Wickland Oil Terminals v. Asarco, Inc., 792 F.2d 887, 889 (9th Cir.1986) (Wickland ). We must accept all the material allegations in the complaint as true and view them in the light most favorable to Cadillac Fairview. Id. at 889-90. The dismissal must be reversed unless it appears to a certainty that Cadillac Fairview is not entitled to relief under any state of facts that it could have proved. Id. at 890.

Section 107(a)(2)(B) expressly creates a private claim against any person who owned or operated a facility at the time hazardous substances were disposed of at the facility for recovery of necessary costs of responding to the hazardous substances incurred consistent with the national recovery plan. See id. at 890; NL Industries, Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir.1986) (NL Industries ). Cadillac Fairview alleged that it incurred "necessary costs" of response within the meaning of section 107(a), and that Dow, Shell, and the federal defendants owned or operated the Site at the time that hazardous substances were deposited there. Despite these allegations, the district court dismissed Cadillac Fairview's suit against the private defendants for failure to state a claim under section 107(a).

The district judge based his decision to dismiss Cadillac Fairview's damages claims on its failure to await governmental action with respect to the Site before bringing suit. The court held that in order for a private response action to be "consistent with the national contingency plan," it must be "initiated and coordinated by a governmental entity, and not by a private individual acting alone." The court also stated that the costs incurred by Cadillac Fairview were not compensable response costs under section 107 because they did not constitute "cleanup costs" within the meaning of the national contingency plan.

In defense of the district court's ruling, Dow argues that a private action under section 107(a) must be preceded by federal governmental action with respect to the property in question. This argument ignores our holdings in Wickland and NL Industries. In Wickland, we rejected the defendant's argument that in order to incur costs "consistent with the national contingency plan," a private party must act pursuant to federal governmental authorization. 792 F.2d at 891-92. Though the national contingency plan describes the role of lead agencies in examining information and determining appropriate responses to environmental hazards, id. at 891, we held that such provisions do not constrain private parties seeking to recover response costs under section 107(a). Id. at 892. We concluded that this reading of section 107(a) was supported both by "the lack of any procedure whereby a private party could seek to obtain prior governmental approval of a cleanup program" and by CERCLA's broad remedial purpose to promote private enforcement actions "independent of governmental actions financed by Superfund." Id. at 892. In NL Industries, we reaffirmed our holding in Wickland, and rejected the argument that response costs cannot be deemed "necessary" in the absence of lead agency approval of the cleanup. 792 F.2d at 898. Because Dow's contention that action by the federal government or by a lead agency is a necessary prerequisite to a private response action under section 107(a) is indistinguishable from the arguments rejected in Wickland and NL Industries, we need not consider it further.

Shell makes a different argument in support of the district court's ruling. Shell argues that although no federal involvement is necessary, some significant state or local governmental action must precede a response action for which recovery is possible under section...