Chico Serv. Station Inc. v. Sol P.R. Ltd.

• Decision Date: 26 January 2011
• Docket Number: No. 10–1200.,10–1200.
• Parties: CHICO SERVICE STATION, INC. and José Chico, Plaintiffs, Appellants,v.SOL PUERTO RICO LIMITED, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

633 F.3d 20

72 ERC 1772

CHICO SERVICE STATION, INC. and José Chico, Plaintiffs, Appellants,

v.SOL PUERTO RICO LIMITED, Defendant, Appellant.

No. 10–1200.

United States Court of Appeals, First Circuit.

Heard Nov. 3, 2010.Decided Jan. 26, 2011.

Orlando Cabrera–Rodriguez, for appellants.Alejandro J. Cepeda–Díaz, with whom José R. González–Irizarry, Mariana S. Pérez–Cordero, and McConnell Valdés LLC were on brief, for appellee.Before LIPEZ, LEVAL,^* and THOMPSON, Circuit Judges.LIPEZ, Circuit Judge.

This appeal requires us to assess the propriety of Burford abstention in a citizen suit under the federal Resource Conservation and Recovery Act (“RCRA”). Appellants Chico Service Station, Inc. and José Chico brought the suit in an effort to force the cleanup of contamination caused by leaking underground storage tanks (“USTs”) at a former gasoline filling station. Their citizen suit represents the latest in a long-running series of proceedings aimed at addressing contamination at the site. In addition to an investigatory proceeding at the Puerto Rico Environmental Quality Board (“EQB”) that has been ongoing since leaks were discovered in the early 1990s, appellants have filed two lawsuits in commonwealth courts over the past decade related to the contamination of the site.

The pendency of these parallel state administrative proceedings led the district court to abstain from hearing the appellants' federal citizen suit, ordering dismissal on the authority of Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943). Application of the Burford abstention doctrine to RCRA citizen suits is an issue of first impression in this circuit. On careful consideration, we find abstention to be inappropriate, and we therefore vacate the district court's judgment.

I.

A. Factual Background¹

The history of the filling station at the center of this citizen suit stretches back more than four decades. Located on a parcel of land in Río Grande, Puerto Rico, the filling station and associated USTs were in operation between the 1960s and 2001. The site, which is situated on a major road and abuts a small stream, contained five USTs: two 8,000–gallon tanks, two 5,000–gallon tanks, and a fifth tank with a capacity of 550 gallons. Until 1987, the facility was owned and operated by The Shell Company (Puerto Rico) Limited (“Shell”), predecessor to appellee Sol Puerto Rico (“Sol”).² Shell sold the filling station in April 1987 to appellants Chico Service Station, Inc. and José Chico (collectively, “Chico”).³

The UST leak at the filling station first came to light two years after the sale, in 1989, when an environmental consultant for Shell found evidence of gasoline-associated contaminants such as benzene in the soil as well as “free product” (gasoline and related petroleum constituents) floating on top of the groundwater. This discovery led Shell to conduct several environmental studies of the site over the following three years, which further confirmed the soil and groundwater contamination. Shell also installed a skimming device to aid in recovering free product from the surface of the groundwater.

In April 1993, Shell informed the EQB that free product had been found in the groundwater at the filling station.⁴ The EQB added the filling station to its “Leaking Underground Storage Tank List,” marking the beginning of a lengthy investigatory proceeding that continues to this date.

B. EQB Investigation

Over the past seventeen years, there have been no formal enforcement proceedings before the EQB concerning the contamination at the filling station, nor has the EQB held any hearings, issued a final order, or approved a remediation plan for the site. The record discloses no substantive action at all by the EQB for the first eight years after it was notified of the leak. Since then, the EQB's investigation of the contaminated filling station has been conducted primarily by intermittent correspondence between the EQB and Shell, the highlights of which we summarize here.

In February 2001, Shell wrote to the EQB to request that the filling station be removed from the Leaking Underground Storage Tank List, in light of the fact that no free product had been detected in the groundwater for three years prior. The EQB denied the request and directed Shell to conduct additional testing. When Chico ceased active operation of the filling station in July 2001, Shell again wrote to the EQB and requested authorization to remove the idle USTs from the site. The EQB approved the removal, though the five tanks were not actually removed until March 2004 due to a dispute between Chico and Shell over access to the property.

Soil sampling results conducted in conjunction with the removal of the tanks revealed contaminant levels in excess of the applicable limits under the EQB's regulations. In response, the EQB asked Shell to prepare a site characterization plan ⁵ to define the plume of contamination at the site and submit a remediation plan for approval. Shell prepared a characterization plan, which the EQB approved on the condition that Shell conduct additional analysis to determine the direction of water flow at the site.

Shell's testing pursuant to the characterization plan stretched over the following several years, with results reported to the EQB in two installments. In January 2007, defendant Sol—having purchased Shell in the interim—submitted the first and primary report, which provided details on the extent and migration of contamination in soil and groundwater at the site.⁶ Sol submitted a supplemental report in May 2008 disclosing the results of additional testing, which purportedly showed a decrease in soil contaminant levels. Based on these results, Sol contended that no soil remediation would be necessary, and it proposed that the lingering groundwater contamination be addressed through aerobic bioremediation (a technique to accelerate contaminant breakdown by natural processes).

The submission of these results did not, however, signal an end to the investigation. Chico wrote the EQB in May 2008, taking issue with, inter alia, Sol's failure to take samples in the vicinity of the stream abutting the property and the absence of approved guidelines for risk assessment in cases involving USTs. The EQB apparently agreed with the latter point. It wrote to Sol in November 2008 and explained that the EQB was working with the federal Environmental Protection Agency (“EPA”) to develop guidelines for evaluating UST risk assessment studies, and that until those guidelines were finalized—which would necessitate approval by both agencies and a public hearing process—the EQB could not accept Sol's original report. The EQB also identified certain quality control issues with Sol's sampling process that required rejection of the report.

The EQB sent a follow-up letter in January 2009 calling for Sol to prepare a new characterization plan to outline additional testing. Sol met with the EQB in February to discuss the EQB's requests. In April 2009, Sol submitted to the EQB new testing plans, a compiled report summarizing the testing conducted at the filling station to date, and a proposed remediation plan. In the accompanying letter, Sol argued that a plan for additional sampling was unnecessary. There is no indication of further action taken by Sol or the EQB between April 2009 and the present.

C. Commonwealth Legal Proceedings

In August 2003, Chico filed in a commonwealth court the first of three lawsuits relating to the filling station. Primarily a contract action, the suit sought declaratory relief and damages related to Shell's alleged breach of its site improvement obligations under a lease agreement with Chico. Among the remedies requested in the action, however, was an injunction requiring Shell to conduct an environmental site assessment, carry out any necessary remediation, and reimburse Chico for costs attributable to environmental degradation at the site. After Shell moved to dismiss, the parties settled and stipulated to dismissal of the portion of the suit requesting injunctive relief related to the environmental condition of the site. Pursuant to the settlement agreement, Chico agreed to allow Shell access to the filling station to remove the USTs and conduct sampling activities.

Chico amended the complaint in May 2005 to allege the discovery of contamination during removal of the USTs at the filling station, and to request damages for environmental harm and operational losses stemming from the contamination. In 2010, recognizing that the question of the environmental condition of the filling station was before the EQB, the commonwealth court stayed the action pending final EQB action. The stay was subsequently upheld on interlocutory appeal to a commonwealth appeals court.

Chico filed its second action, a mandamus petition directed to the EQB, in a commonwealth court in October 2008. The petition sought an order directing the EQB to require testing for lead at the filling station, in light of evidence that Shell had sold leaded gasoline on the premises up until the 1980s. ⁷ Chico and the EQB quickly reached a settlement in January 2009, under which the EQB agreed to hear Chico's evidence of lead contamination, conduct the “necessary administrative hearings,” and “issue the final resolution” in the case within sixty days.⁸ In turn, Chico agreed to have its concerns heard by the EQB rather than the commonwealth courts. Pursuant to the parties' agreement, the mandamus petition was dismissed as moot.

D. Federal Legal Proceedings

Chico filed the present suit, its third, in the United States District Court for the District of Puerto Rico in April 2009. Brought under RCRA's citizen suit provision, 42 U.S.C. § 6972, the suit rests on three core allegations. First, Chico alleges that Sol is in ongoing violation of a number of Puerto Rico's UST regulations, including those that mandate reporting of a suspected release of...