Pinole Point Properties v. Bethlehem Steel Corp.

• Decision Date: 22 October 1984
• Docket Number: No. C-83-5893-RPA.,C-83-5893-RPA.
• Citation: 596 F. Supp. 283
• Parties: PINOLE POINT PROPERTIES, INC., a California Corporation, Plaintiff, v. BETHLEHEM STEEL CORPORATION, a Delaware Corporation, Defendant.
• Court: U.S. District Court — Northern District of California

596 F. Supp. 283

PINOLE POINT PROPERTIES, INC., a California Corporation, Plaintiff, v. BETHLEHEM STEEL CORPORATION, a Delaware Corporation, Defendant.

No. C-83-5893-RPA.

United States District Court, N.D. California.

October 22, 1984.

Steven N. Roberts, Nossaman, Gutchner, Knox & Elliott, San Francisco, Cal., for plaintiff.

Gary H. Anderson, Patrick L. Finley, Pillsbury, Madison & Sutro, San Francisco, Cal., for defendant.

OPINION AND ORDER

AGUILAR, District Judge.

This is one of the earliest cases in which a federal district court has been called upon to interpret the meaning of the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA" or "the Act"). On the present motion, the Court must determine the extent, if any, to which CERCLA provides for a private cause of action. More specifically, the Court must determine whether the Act contemplates recovery for private clean-up activities that are undertaken at a hazardous waste disposal site in the absence of any governmental action with respect to the particular site.

FACTS:¹

Plaintiff, Pinole Point Properties, is a subsidiary of a small, local steel concern called Pinole Point Steel Company. On or about February 20, 1979, Pinole Point Steel Company purchased a tract of land from defendant Bethlehem Steel Corporation. On or about December 17, 1979, the tract of land was transferred from Pinole Point Steel Company to plaintiff, Pinole Point Properties. Plaintiff still owns the land today.

There is a pond located on the land in question. Plaintiff alleges that from 1965 to 1975 defendant released hazardous substances into the pond. More specifically, plaintiff alleges that the defendant used the pond as a "facility" within the meaning of section 107(a) of CERCLA, 42 U.S.C. § 9607(a). Plaintiff has commenced cleanup operations at the pond.

In this lawsuit, plaintiff seeks a declaratory judgment that defendant will be liable for plaintiff's past, present and future clean-up costs. In addition to seeking recovery under CERCLA, plaintiff also alleges state causes of action under theories of nuisance and ultrahazardous activity.

Defendant moves to dismiss plaintiff's entire complaint for failure to state a claim upon which relief may be based. Fed.R. Civ.P. 12(b)(6). Defendant maintains that plaintiff cannot bring this action under CERCLA for a variety of reasons including: (1) CERCLA does not apply to disposal sites that the government has not acted upon or regulated; (2) plaintiff lacks standing to sue under CERCLA; (3) plaintiff's CERCLA claims are not ripe for adjudication; and (4) CERCLA precludes private claims for damages to natural resources. Defendant also argues that plaintiff's state law claims do not set forth proper causes of action and are barred by the statute of limitations in any event. Plaintiff opposes the motion to dismiss in all respects.

FEDERAL CLAIMS

Defendant's motion to dismiss plaintiff's CERCLA claims, and plaintiff's opposition to the motion, reflect fundamentally opposed views of the purpose of the Comprehensive Environmental Response, Compensation and Liability Act. Essentially, defendant reads the Act as giving the government the authority to respond to the problem of hazardous waste disposal sites. Defendant contends that the Act provides for a single response to the problem of hazardous waste disposal sites, and that the response contemplated is governmental or at least government triggered. In this sense, defendant gives the Act a narrow construction.

Plaintiff, on the other hand, views the Act as a comprehensive response to the hazardous waste disposal problem. Plaintiff maintains that CERCLA provides for a variety of public and private responses to the hazardous waste disposal site problem. Plaintiff argues that the Act contains independent and severable provisions for certain governmental actions, certain private actions, and for recovery from the so-called Superfund under some circumstances. Plaintiff therefore interprets the Act broadly as permitting and even encouraging private initiative in eradicating hazardous waste sites.

The differing views of the general intent of the Act underlie the parties' positions on the motion to dismiss. In determining this motion, then, the Court will be required to take a position on the scope of the Act. Thus, it is appropriate for the court to begin its discussion with an overview of CERCLA.

Overview of CERCLA:

Congress enacted CERCLA on December 11, 1980. The major provisions of the Act are set forth below.

Section 101 of the Act contains the definitions that relate to the Act. The next section, section 102, bestows upon the Administrator of the Environmental Protection Agency (EPA) the authority and obligation to promulgate regulations designating what will be considered a hazardous substance and what level of release must be reported. Section 103 contains the requirements with respect to reporting the existence of a release of hazardous substances.

Section 104 establishes the parameters and procedures of the governmental response to the hazardous waste disposal site problem. Among other things, section 104 gives the President the authority to act in response to the release of hazardous substances. It also puts certain limits on expenditures from the fund created by the Act, and it provides for cooperation between the federal government and state and local governmental authorities.

Section 105 requires that the President prepare a National Contingency Plan (NCP) for the removal of hazardous substances and calls for EPA to devise a comprehensive scheme for addressing the problem of hazardous waste disposal sites. Further, section 105 directs EPA to establish priorities and to reflect those priorities in a national list of priority clean-up sites. (The parties refer to this list as the National Priorities List or NPL.)

Section 106 provides for abatement actions brought by the government in cases involving an imminent and substantial endangerment to public health and welfare. Under section 106, the President may ask the Attorney General to "secure such relief as may be necessary to abate such danger." The EPA is also directed to establish guidelines for the application and use of the procedure in section 106.

Section 107, which is a major focus of the instant motion to dismiss, is the section that assigns liability for the release of hazardous wastes. The reach of the liability is extremely broad. The parties that are liable include owners of vessels, owners of the site at the time of dumping, present owners of the site, anyone who by contract or agreement arranged for the disposal or transport of hazardous wastes to the site, and any person who accepted hazardous wastes for disposal at the site. Under section 107(a), the liable parties are responsible for: (1) all costs of removal incurred by the federal or state governments not inconsistent with the National Contingency Plan (NCP); (2) any other response costs incurred by any other person consistent with the NCP; and (3) damages for injury to or loss of natural resources.

Section 107(b) contains the defenses to liability. The defenses are extremely limited, including only acts of God, acts of war, and acts of an unconnected third party if the liable party can show it exercised due care and took reasonable precautions against foreseeable acts by the third parties.

The remainder of section 107 concerns determinations of the amount of damages that can be recovered from liable parties.

Section 108 provides that parties who are engaged in transporting hazardous waste materials must produce a bond insuring their financial responsibility for any damages that may occur. Section 109 provides civil penalties against any parties who do not comply with the requirements of section 108.

Section 110 protects employees who report the existence of a hazardous waste disposal site. This section is essentially a "whistleblower" protection provision. Whistleblowers are protected from adverse employment actions that may arise from their reporting.

Sections 111 and 112 control the use of the so called "Superfund." Section 111 spells out the authorized uses of the $1.6 billion in the fund. Section 112 establishes the procedures for making claims against the fund.

To date, only a few courts have had occasion to interpret the provisions of CERCLA. Thus, the Court does not have much case authority upon which to rely. Furthermore, the Act's legislative history is not very helpful. The Act passed after a major floor fight in the Senate. Major amendments were proposed and adopted on the floor, and the Court is therefore left without the ordinary sources of legislative history.

In general, the courts that have interpreted CERCLA have given it a broad reading. Judge Magnuson of the federal district court in Minnesota said:

A review of the statute and the Committee Reports reveals at least two Congressional concerns that survived the final amendments to the Act. First, Congress intended that the federal government be immediately given the tools necessary for prompt and effective response to problems of national magnitude resulting from hazardous waste disposal. Second, Congress intended that those responsible for problems caused by the disposal of chemical poisons bear the cost and responsibility for remedying the harmful conditions they created.

United States v. Reilly Tar & Chemical Corp., 546 F.Supp. 1100 (D.Minn.1982).

Based on this reading of Congressional intent, Judge Magnuson concluded that "CERCLA should be given a broad and liberal construction. The statute should not be narrowly interpreted to frustrate the government's ability to respond promptly and effectively, or to limit the ability of those responsible for cleanup costs beyond the limits expressly provided." Reilly Tar, 546 F.Supp. at 1112. Similarly, in United States v. Wade, Judge Newcomer of the Eastern District of Pennsylvania gave the Act...