Johnson v. James Langley Operating Co.
| Decision Date | 08 May 2000 |
| Docket Number | No. 99-4036,99-4036 |
| Citation | 226 F.3d 957 |
| Parties | (8th Cir. 2000) DUNN L. JOHNSON; EDDIE JOHNSON; ANNIE POWELL; JANIS AUSTIN; BARBARA ANN CARROLL; JOHN CARROLL; LAVERN CARROLL; JESSE DUNN; BYRON GOODWIN; DERRICK GOODWIN; JO NELL GOODWIN; WILLIE RUTH GRAHAM; BOBBY R. JOHNSON; DANNY ADAM JOHNSON; DRUSELLA LANNETTE JOHNSON; EARL JOHNSON, JR.; EARNEST JOHNSON; HARVEY LEE JOHNSON; HERBERT JOHNSON, JR.; HORACE JOHNSON; JAMES JOHNSON; JERRY WAYNE JOHNSON; JESSE NORISE JOHNSON; JIMMIE L. JOHNSON; JOHNNIE B. JOHNSON; KAREN JOHNSON; LINDA ANNE JOHNSON; REGGIE JOHNSON; RICKY JOHNSON; RONNIE JOHNSON; SAMMY JOHNSON; THOMAS JOHNSON; VIRDIE JOHNSON, JR.; WADE JOHNSON; WILLIE AARON JOHNSON; WILLIE L. JOHNSON; WORDIE B. JOHNSON; LILLY MAE LIAS; PEARLIE ANN LIVINGSTON; JANETTE MASSEY; SHARON ANN MOORE; ESSIE MAE RANKIN; RENESE GOODWIN SMITH; FRANCINE JOHNSON WOOD; LETHELL JOHNSON WOODS; MARSHA L. SMITH SPENCER, PLAINTIFFS - APPELLANTS, v. JAMES LANGLEY OPERATING COMPANY, INC., DEFENDANT, J. C. LANGLEY, INDIVIDUALLY & DOING BUSINESS AS J.C. LANGLEY OIL COMPANY; KLOTE T. POWELL, DEFENDANT - APPELLEES, GROVER SMITH; ZENORA POWELL; MELISSA K. SMITH CARTER; MARTHA KENNEDY SMITH; SARAH MINOR, PLAINTIFFS - APPELLANTS, AJ & K OPERATING COMPANY; CROSS OIL REFINING & MARKETING, INC.; DEFENDANTS - APPELLEES, JAMES LANGLEY OPERATING COMPANY, INC.; LION OIL COMPANY; PHILLIPS PETROLEUM COMPANY; DEFENDANTS. Submitted: |
| Court | U.S. Court of Appeals — Eighth Circuit |
Appeal from the United States District Court for the Western District of Arkansas. [Copyrighted Material Omitted] Before Richard S. Arnold and Heaney, Circuit Judges, and Magnuson1, District Judge.
In January 1998, Dunn L. Johnson and a group of forty-four other holders of interests in real estate in Union County, Arkansas commenced in the district court an action under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. §§ 9607-9675 against a group comprised of persons and entities who leased land for oil and gas production operations. Grover Smith and five additional plaintiffs simultaneously commenced a similar action. After consolidating the cases for trial, the district court granted summary judgment on the CERCLA claims in favor of defendants J.C. Langley, J.C. Langley Oil Company (collectively, Langley), and AJ&K Operating Company. The plaintiffs appeal; we reverse and remand.
In their virtually identical amended complaints, the two sets of plaintiffs alleged that the defendants' oil and gas production activities caused the properties at issue to become contaminated with radioactive scales, salt water, oil and grease, heavy metals and other hazardous substances. As relevant to this appeal, plaintiffs claimed they were entitled to response costs under CERCLA, and added several state-law causes of action.
Following discovery, Langley and AJ&K moved for summary judgment on the CERCLA claim and for dismissal of the state-law claims. With respect to the CERCLA claim, they argued that plaintiffs had failed to make out a prima facie case of CERCLA liability because there was no evidence that plaintiffs had incurred any costs related to cleanup or removal of hazardous substances. Defendants also argued that their crude oil operations were excluded from CERCLA under 42 U.S.C. § 9601(14).
In support of their claims, plaintiffs produced two reports by Edwin Cargill of Radiation Protection Resources, Inc., prepared on August 4, 1999. In the first report, Cargill tells of visiting the Johnson property to perform a number of tests on five different sites within the property's boundaries. Four sites did not display radiation above background levels. The fifth site, an operating well, revealed elevated radiation levels. In a second report, prepared on the same date, Cargill relates that he surveyed ten sites on the Smith property, nine of which indicated only background levels of radiation. At the tenth site, however, Cargill found another area with elevated radiation levels.
Plaintiffs also submitted a paper presented by A.L. Smith in May 1985 at the 17th Annual Offshore Technology Conference in Houston, Texas. In the paper, Smith notes that the water present in a reservoir of oil and gas contains dissolved mineral salts, a small proportion of which may be naturally radioactive. According to Smith, as the oil and gas are depleted through production, water is produced in the reservoir, resulting in the deposit into the oil production system of mineral scales that contain measurable quantities of natural radioactivity. The plaintiffs contended that the process described by Smith had resulted in the contamination of their property with radioactive substances deemed to be hazardous under CERCLA.
In a September 1999 ruling, the court granted in part and denied in part defendants' motion. Relying primarily upon the Fifth Circuit's decision in Amoco Oil Co. v. Borden, Inc., 889 F.2d 664 (5th Cir. 1989), the court concluded:
[I]n order to hold the defendants liable under CERCLA, the plaintiffs in these cases must demonstrate that the levels of hazardous material found on the property pose a threat to the public health or environment. One way to do this would be to demonstrate that the hazardous materials are present at levels that violate applicable state or federal law.
Johnson v. Langley, Nos. 98-1007 & 98-1008, slip op. at 14 (W.D. Ark. Sept. 16, 1999) (footnote omitted) (Order Granting Partial Summ. J.).
The court noted the plaintiffs had failed to provide any concrete evidence that radioactive substances were present on the subject property at levels that violate any applicable state or federal standards. Nevertheless, the court declined to grant summary judgment on the plaintiffs' CERCLA claims "[b]ecause of the serious nature of the allegations," and gave the plaintiffs another chance to produce supporting evidence. Id. at 15. The court instructed the plaintiffs "to submit additional evidence at least sufficient to raise a genuine issue of fact as to whether the release or threatened release of a hazardous substance has caused the incurrence of response costs that are necessary and consistent with the national contingency plan." Id. The court set a one-week deadline for the production of such additional evidence.
The court also rejected as premature the defendants' argument that they were entitled to summary judgment by virtue of CERCLA's petroleum exclusion. While the court acknowledged that CERCLA specifically excludes from its definition of hazardous substances "petroleum, including crude oil or any fraction thereof which is not otherwise specifically listed or designated as a hazardous substance," the court concluded that a fact issue remained as to whether the radioactive material on the property was derived solely from petroleum. Id. (quoting § 9601(14)). Finally, the court granted defendants partial summary judgment on plaintiffs' personal-injury claims, as plaintiffs had failed to produce any supporting evidence.2
The court issued a second ruling in October 1999, in which it evaluated the evidence presented by the parties in light of the legal conclusions of its September ruling. See Johnson v. Langley, Nos. 98-1007 & 98-1008 (W.D. Ark. Oct. 12, 1999) (Order Granting Summ. J.). The court first determined that the substances plaintiffs claimed had been released--Radium-226 and -228, cadmium, lead, and xylenes--were hazardous substances under CERCLA. However, the court ruled that the xylenes were subject to CERCLA's petroleum exclusion. The court noted that xylene had been found in only one of the pits on the property, which supported defendants' claim that any xylenes present were the result of petroleum spillage. By contrast, plaintiffs presented no evidence to support their theory that the xylenes came from the bottoms of crude oil storage tanks and were therefore not subject to the petroleum exclusion.
Next, the court reiterated its earlier ruling that in order to recover response costs, plaintiffs had to create a genuine fact issue as to whether they incurred those costs by acting to contain a release threatening the public health or environment. The court conceded that it might be possible "to conceive of a factual scenario under which a CERCLA plaintiff would be justified for having incurred costs in response to a perceived release or threatened release of a hazardous substance when that substance is not later shown to exist on either the defendant's and/or plaintiffs' property at a level posing a threat to the public health." Id. at 20. However, the court concluded this was not such a case. The court noted that plaintiffs had conducted testing nearly a year and a half after filing suit:
The plaintiffs in these cases did not perform testing responding to a perceived release or threatened release, rather, their purpose for testing was to prove the elements of the plaintiffs' claims against the defendants. Therefore, the Court concludes that if the levels of hazardous substances found on the Johnson and Smith properties pose no risk to the public health, there is no danger presented by the release or threatened release of the substances . . . [and] plaintiffs' responsive actions are not justified, and the defendants may not be held liable . . . .
The court noted that the plaintiffs' expert, Stanley Waligora, opined that based on the data obtained from the sites contamination levels on the properties posed a threat to public health and the environment. However, the court criticized the data upon which Waligora based his conclusion, noting only six of plaintiffs' eight water samples were identified as having been taken from the plaintiffs' property, and there was no evidence that the sampling and analytical test procedures complied with EPA requirements, or that the tests were performed by an EPA-or Arkansas-certified laboratory.
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