Wickland Oil Terminals v. Asarco, Inc.

Decision Date20 June 1986
Docket NumberNo. 85-1962,85-1962
Citation792 F.2d 887
Parties, 55 USLW 2029, 16 Envtl. L. Rep. 20,754 WICKLAND OIL TERMINALS, a California corporation, Plaintiff-Appellant, v. ASARCO, INC., a New Jersey corporation, and State Lands Commission of California, Defendants-Appellees.
CourtU.S. Court of Appeals — Ninth Circuit

Joseph A. Darrell, Thelen, Marrin, Johnson & Bridges, San Francisco, Cal., for plaintiff-appellant.

C. MacNeil Mitchell, Breed, Abbott & Morgan, New York City, and Ellyn S. Levinson, Deputy Atty. Gen., San Francisco, Cal., for defendants-appellees.

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

Before WALLACE, KENNEDY, and FARRIS, Circuit Judges.

WALLACE, Circuit Judge:

Wickland Oil Terminals (Wickland) appeals from a judgment dismissing its claims for damages and for declaratory and injunctive relief against Asarco, Inc. (Asarco) for failure to state a claim upon which relief could be granted. The central question on appeal is whether a governmentally authorized cleanup program is a prerequisite to a private action under section 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), 42 U.S.C. Sec. 9607(a). Wickland also appeals from a judgment in favor of the State Lands Commission of California (the Commission) on Wickland's claim for declaratory relief. We have jurisdiction pursuant to 28 U.S.C. Sec. 1291. We reverse the dismissal of Wickland's claims against Asarco and remand the case, and we dismiss Wickland's appeal against the Commission for lack of jurisdiction.

I

Wickland's complaint advises us that from approximately 1886 through 1970, Asarco conducted smelting operations for the extraction of lead, zinc, and other metals on two contiguous parcels of land in Selby, California (the Selby site). Asarco owned one of the parcels. It occupied the other parcel under license until 1951, when the State of California became owner of the parcel; thereafter, Asarco leased the parcel from the Commission, which acted as custodian for the State of California. Wickland alleges that in the course of Asarco's smelting operations, Asarco deposited up to one million metric tons of smelter slag above the surface of the Selby site, and deposited an unascertained amount of slag below the surface. The slag remains on the Selby site.

Wickland purchased the parcel owned by Asarco in 1977. Wickland alleges that in April 1980 it learned for the first time that the slag abandoned by Asarco on the Selby site might contain hazardous concentrations of various metals. In July 1980, the California Department of Health Services (the Health Department) informed Wickland that the slag constituted a potentially serious environmental hazard and ordered Wickland "not [to] excavate, remove or recover the slag waste without written approval" from the Health Department. In October 1980, the Health Department notified Wickland that a Health Department study indicated that the Selby site contained hazardous waste; it further advised Wickland that Wickland was responsible for cleanup measures on the Selby site. Working with the Health Department and other state agencies, Wickland then developed and conducted testing on the Selby site of the groundwater concentrations of heavy metals and of the migration of slag particles.

In July 1981, Wickland leased the second parcel from the Commission. In the summer and fall of 1981, Wickland assembled a task force consisting of personnel from Wickland, the Health Department, and other state and federal bodies to conduct tests to evaluate the hazard posed by the slag. In December 1981, the Health Department and other state agencies mandated additional testing of the slag as a precondition to further commercial redevelopment of the Selby site by Wickland. By early 1982, Wickland had expended approximately $150,000 on slag testing required by state agencies. In January 1983, the Selby site ranked 21st on the Health Department's Priority Ranking of Hazardous Waste Sites. See generally 42 U.S.C. Sec. 9605(8)(B).

Wickland brought suit in district court against Asarco and the Commission under CERCLA, 42 U.S.C. Secs. 9601-9657. Wickland brought three federal claims against Asarco: it sought damages under section 107(a) of CERCLA, 42 U.S.C. Sec. 9607(a), for testing costs incurred; it requested a declaration that, as between Wickland and Asarco, Asarco was solely and entirely liable under CERCLA for any release of hazardous substances on the Selby site; and it asked for an order requiring Asarco to initiate cleanup of the Selby site. Wickland also sought a declaration that the Commission was liable under CERCLA for any release of hazardous substances on the Selby site.

On Asarco's motion, the district court dismissed Wickland's three claims against Asarco for failure to state a claim upon which relief could be granted. Wickland Oil Terminals v. Asarco, Inc., 590 F.Supp. 72 (N.D.Ca.1984) (Wickland ). Wickland then voluntarily dismissed its claim against the Commission. The district court entered final judgments in favor of both defendants.

II

We review de novo the district court's dismissal of Wickland's three claims against Asarco for failure to state a claim upon which relief could be granted. Guillory v. County of Orange, 731 F.2d 1379, 1381 (9th Cir.1984). We must accept all material allegations in the complaint as true and construe them in the light most favorable to Wickland. North Star International v. Arizona Corporation Commission, 720 F.2d 578, 580 (9th Cir.1983). We cannot uphold the dismissal unless it appears to a certainty that Wickland would be entitled to no relief under any state of facts that could be proved. Halet v. Wend Investment Co., 672 F.2d 1305, 1309 (9th Cir.1982).

A.

Wickland pleaded a claim for damages against Asarco pursuant to section 107(a)(2)(B) of CERCLA, 42 U.S.C. Sec. 9607(a)(2)(B), for approximately $150,000 in costs incurred in testing the Selby site for hazardous substances. The district court ruled that "an authorized governmental cleanup program, initiated by the EPA or by state authorities pursuant to a cooperative agreement, must commence before a private party can state a claim for damages under CERCLA." Wickland, 590 F.Supp. at 77. Determining that Wickland had not alleged satisfaction of this prerequisite, the district court dismissed the damages claim. Id. at 77-78.

Congress enacted CERCLA in 1980 to provide a comprehensive response to the problem of hazardous substance release. CERCLA implements this plan through an array of mechanisms. Section 105 of CERCLA authorizes the President to incorporate into the national contingency plan "procedures and standards for responding to releases of hazardous substances." 42 U.S.C. Sec. 9605. Section 221 establishes the Hazardous Substance Response Trust Fund, popularly known as Superfund. 42 U.S.C. Sec. 9631. Superfund monies finance response measures by the federal government that are consistent with the national contingency plan. CERCLA Secs. 104, 111(a)(1), 42 U.S.C. Secs. 9604, 9611(a)(1). They also finance private response costs that are approved under the national contingency plan and are federally certified. CERCLA Sec. 111(a)(2), 42 U.S.C. Sec. 9611(a)(2). In addition, under section 106 the federal government may seek judicial relief from the actual or threatened release of a hazardous substance. 42 U.S.C. Sec. 9606. Section 107(a)(1-4)(A) makes certain parties responsible for the presence of hazardous substances liable to federal and state governments for response costs. 42 U.S.C. Sec. 9607(a)(1-4)(A). Similarly, section 107(a)(1-4)(B) makes responsible parties liable to private persons for response costs. 42 U.S.C. Sec. 9607(a)(1-4)(B).

Section 107(a) of CERCLA is the focal point of our inquiry. This section states in part:

Notwithstanding any other provision or rule of law, and subject only to the defenses set forth in subsection (b) of this section--

(2) any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of, ... shall be liable for--

(A) all costs of removal or remedial action incurred by the United States Government or a State not inconsistent with the national contingency plan; [and]

(B) any other necessary costs of response incurred by any other person consistent with the national contingency plan....

42 U.S.C. Sec. 9607(a)(2)(A), (B).

Section 107(a)(2)(B) expressly creates a private cause of action for damages. See Walls v. Waste Resource Corp., 761 F.2d 311, 318 (6th Cir.1985) (Walls ). We must address whether the district court correctly determined that a governmentally authorized cleanup program is a precondition to maintaining this private cause of action.

Asarco makes two basic arguments in support of the district court's ruling. Its first argument rests on the phrase "other necessary costs of response" (emphasis added) in section 107(a)(2)(B). Asarco asserts that when sections 107(a)(2)(A) and 107(a)(2)(B) are read together, the word "other" in subsection (B) indicates that the incurrence of governmental response costs under subsection (A) is a prerequisite to the recovery of "other" response costs incurred by a private party. Asarco contends this interpretation is necessary so that the word "other" does not become surplus.

We see no basis for grafting on this ordinary word the critical role suggested for it by Asarco. We conclude that Asarco's interpretation is not correct and that the word "other" has an alternative, more plausible purpose. The word "other" in section 107(a)(2)(B) reasonably functions to distinguish between government response costs in subsection (A) and private response costs in subsection (B). Our interpretation is consistent with a broader view of the statute which demonstrates that Congress in CERCLA was able...

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