U.S. v. Chapman

• Decision Date: 02 July 1998
• Docket Number: No. 97-15215,97-15215
• Parties: 28 Envtl. L. Rep. 21,392, 98 Cal. Daily Op. Serv. 5259, 98 Daily Journal D.A.R. 7405 UNITED STATES of America, Plaintiff-Appellee, v. Harold B. CHAPMAN, Jr., Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1166

146 F.3d 1166

28 Envtl. L. Rep. 21,392, 98 Cal. Daily Op.

Serv. 5259,

98 Daily Journal D.A.R. 7405

UNITED STATES of America, Plaintiff-Appellee, v. Harold B. CHAPMAN, Jr., Defendant-Appellant.

No. 97-15215.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Feb. 10, 1998.

Decided July 2, 1998.

Catherine W. Johnson, San Francisco, California, for defendant-appellant Harold B. Chapman, Jr.

Lisa E. Jones, United States Department of Justice, Washington, DC, for plaintiff-appellee United States of America.

Appeal from the United States District Court for the Northern District of California; Charles A. Legge, District Judge, Presiding. D.C. No. CV-94-01033-CAL.

Before: GOODWIN, KOZINSKI, and THOMPSON, Circuit Judges.

DAVID R. THOMPSON, Circuit Judge:

This suit arises out of the storage and release of hazardous substances on property in Palomino Valley, Nevada. Harold B. Chapman, Jr., who owned the property and operated a business on it, was found liable under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9607(a) ("CERCLA"). On appeal, Chapman contends that the district court erred in granting the government's motion for summary judgment because it had failed to demonstrate a release or threatened release of hazardous substances. Chapman further argues that the EPA acted inconsistently with the National Contingency Plan ("NCP") and therefore is precluded from recovering its response costs.

Finally, Chapman appeals the district court's award of attorney fees as part of the government's response costs. This presents a question of first impression in this circuit: Is the federal government entitled to its attorney fees as response costs under CERCLA § 107(a)(4)(A)?

We have jurisdiction pursuant to 28 U.S.C. § 1291. We affirm the district court's award of summary judgment under CERCLA. We also affirm the award of attorney fees under section 107(a)(4)(A), but remand to the district court for a determination of the reasonable amount of such fees.

I FACTS

Harold B. Chapman, Jr. manufactured small metal collars and stored and resold military and commercial surplus chemicals on his five-acre parcel of land in Palomino Valley, Washoe County, Nevada. In 1989, at the request of Washoe County, the EPA began an investigation of Chapman's facility. The EPA hired Ecology & Environment ("E & E") to look into the matter. On October 12, 1989, E & E inspected and photographed the site. This was followed by another inspection by Washoe County one month later.

On December 20, 1989, the EPA's Emergency Response Section and Technical Assistance Team lead by Robert Bornstein, the On Scene Coordinator ("OSC"), conducted a preliminary assessment of the site to determine if a removal action was necessary. They conducted an inventory of all chemical containers and collected samples. There were approximately 2000 5-gallon containers of paint, insulating oil, sulfuric acid, chloroform, alcohols, and other military surplus chemicals on the property. In addition there were 100 55-gallon drums of unknown substances. The majority of the drums were stored outside in an unprotected storage yard. Many of the containers were deteriorated and many of the drums were leaking into the soil. The soil was visibly stained in several areas.

E & E took ten samples of chemicals from the site and tested them. Three samples were flammable, one was a corrosive basic liquid, and four others were combustible.

After the preliminary assessment was completed, the EPA relied upon Washoe County to issue the proper orders to Chapman to bring his property into compliance. In April 1990, Washoe County issued a misdemeanor citation to Chapman for his failure to comply with county orders, and in May 1990 the Washoe County Commissioner revoked Chapman's business license. The County then requested assistance from the EPA.

On May 24, 1990, the EPA issued Order 90-10 pursuant to CERCLA § 106, 42 U.S.C. § 9606(a). This Order stated that the site posed an "imminent and substantial endangerment to the public health or welfare or the environment because of the release or threatened release of hazardous substances...." The Order stated that several contamination threats were identified during the preliminary assessment. Four out of the ten samples had flash points less than 140 degrees Fahrenheit and posed a substantial risk of fire and/or explosion. Many of the drums containing hazardous substances were in poor condition, were leaking into the exposed soil and could migrate causing groundwater contamination. Contamination of the groundwater could result in contamination of the domestic and agricultural aquifer endangering residents and crops. In addition, the site was a danger to the Bureau of Land Management Wild Horse and Burro Adoption Center located a half mile to the south.

The EPA ordered Chapman to take immediate action to secure the site and contain or prevent the release of hazardous substances. Chapman was required to submit site security and safety plans, as well as a detailed Site Removal and Stabilization Plan ("Workplan"). The Order further required Chapman to remove any hazardous substances from the site.

Chapman hired the environmental consulting firm of Jack Quarle & Associates ("JQA") to assist him in complying with the Order. Although JQA submitted a Workplan, it was two months late and found to be inadequate by the EPA because it did not provide for the removal of all hazardous substances from the site or the relocation of hazardous substances to an approved hazardous waste facility. In addition, the EPA found JQA's inventory was incomplete because it failed to account for 25% of the hazardous materials on site.

On January 8, 1991, the on-site coordinator, Bornstein again visited the site. He found that there were several hundred 1-5 gallon containers of paint waste and flammable liquids and approximately 50 55-gallon drums containing flammable liquids remaining on the property. Some of the containers had open tops, and some were leaking. Visible soil stains remained in the areas where other drums had been stored outdoors.

Because Chapman had failed to take the necessary steps to comply with the EPA's Order, the EPA decided to initiate a response action. The EPA sent its contractor to visit the site and determine what actions were necessary to remove the hazardous substances. In February 1991, when the EPA was prepared to begin its response action, Chapman finally began to comply with the Order. Under the supervision of the EPA and E & E, Chapman removed the containers from the site and conducted soil samples which were submitted to the EPA.

In April 1992, the EPA sent demand letters to Chapman requesting $33,946.00 for the response costs it had incurred. Chapman refused to pay the EPA's costs and the United States brought this civil action against Chapman to collect them. The district court granted summary judgment in favor of the government, and this appeal followed.

II DISCUSSION

We review a grant of summary judgment de novo. Forsyth v. Humana, Inc., 114 F.3d 1467, 1474 (9th Cir.), cert. denied, --- U.S. ----, 118 S.Ct. 559, 139 L.Ed.2d 401 (1997); Bagdadi v. Nazar, 84 F.3d 1194, 1197 (9th Cir.1996). We must determine, viewing the evidence in the light most favorable to the nonmoving party (here, Chapman), whether there is any genuine issue of material fact for trial. Forsyth, 114 F.3d at 1474.

A. The EPA's Prima Facie Case

To establish a prima facie case to recover its response costs under CERCLA § 107, the government has to prove: (1) the site is a "facility"; (2) a "release" or "threatened release" of a hazardous substance occurred; ¹ (3) the government incurred costs in responding to the release or threatened release; and (4) the defendant is the liable party. Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1152-53 (9th Cir.1989). Once the government presents a prima facie case for response costs, the burden shifts to the defendant to prove the government's response action was inconsistent with the National Contingency Plan. Washington State Dept. of Transp. v. Washington Natural Gas Co., 59 F.3d 793, 799-800 (9th Cir.1995); United States v. Hardage, 982 F.2d 1436, 1443 (10th Cir.1992).

Chapman argues the government failed to establish a prima facie case sufficient for the court to grant summary judgment, because there is a genuine issue of material fact as to whether Chapman caused a release or a threatened release of a hazardous substance on his property.

Before getting to the merits of his case, however, Chapman asserts a procedural argument. He contends that judicial review of a response action under CERCLA must be limited to the administrative record; therefore, he argues, the district court erred by considering evidence outside of that record--specifically the Bornstein declarations regarding the condition of the site--to find a release or threatened release. ²

We need not consider Chapman's administrative record argument because there is ample evidence in the administrative record to satisfy the government's burden of proof. As the district court stated, the administrative record reflected that

[t]here were consultant reports. And the facts established that two thousand drums were stored on the property. They were reported to have been rusted and corroded, and without tops, and in poor condition. And there was some evidence of visible soil stains, and soil--and actual soil sample contamination.

The administrative record also includes a report from the EPA's contractor, E & E, explaining the number and type of containers found at the site. Attached to the report is an inventory of the site and analytical results from the samples taken. E & E took ten samples of chemicals from the site and tested the samples. Three samples were flammable, one was a corrosive basic liquid, and four others were combustible. These are hazardous substances...