Wilshire Westwood Associates v. Atlantic Richfield Corp.

• Decision Date: 07 August 1989
• Docket Number: No. 88-5708,88-5708
• Citation: 881 F.2d 801
• Parties: , 58 USLW 2123, 19 Envtl. L. Rep. 21,313 WILSHIRE WESTWOOD ASSOCIATES; Platt Development Company, Plaintiffs-Appellants, v. ATLANTIC RICHFIELD CORPORATION; Peter J. Ruddock; John Crawford; Thomas Crawford; and Does 1 through 20, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 801

881 F.2d 801

30 ERC 1065, 58 USLW 2123, 19 Envtl.

L. Rep. 21,313

WILSHIRE WESTWOOD ASSOCIATES; Platt Development Company Plaintiffs-Appellants, v. ATLANTIC RICHFIELD CORPORATION; Peter J. Ruddock; John Crawford; Thomas Crawford; and Does 1 through 20, Defendants-Appellees.

No. 88-5708.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Dec. 9, 1988.

Decided Aug. 7, 1989.

Rene P. Tatro, San Francisco, Cal., for plaintiffs-appellants.

Patrick W. Dennis, Los Angeles, Cal., for Atlantic Richfield.

T. Emmet Thornton, Los Angeles, Cal., for Peter Ruddock.

Gary R. Ricks, Santa Barbara, Cal., for John Crawford, defendants-appellees.

M. Alice Thurston, Washington, D.C., for amicus U.S.

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

Before REINHARDT and O'SCANNLAIN, Circuit Judges, and COYLE, District Judge. ^*

COYLE, District Judge:

Wilshire Westwood Associates and Platt Development Company appeal the district court's dismissal pursuant to F.R.Civ.P. 12(b)(6) of their complaint against Atlantic Richfield Corporation, Peter J. Ruddock, John Crawford and Thomas Crawford. The district court concluded that the petroleum exclusion set forth in Section 101(14) of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. Sec. 9601(14), applies to leaded gasoline. We affirm.

A. Background.

On April 8, 1987 Wilshire Westwood Associates and Platt Development Company (hereinafter referred to as plaintiffs) filed a complaint against Atlantic Richfield Corporation, Peter J. Ruddock, John Crawford and Thomas Crawford (hereinafter referred to as defendants) alleging a claim for response costs from defendants pursuant to Section 107(a) of CERCLA, 42 U.S.C. Sec. 9607(a)(2)(B). ¹ The complaint alleges at paragraph 6 that "[t]he gasoline stored in leaking underground storage tanks ... contained additives with hazardous substances including, but not limited to, benzene, toluene, xylene, ethyl-benzene and lead [which] leaked from the underground storage tanks and contaminated soils...." Paragraphs 30 and 32 respectively allege that "[t]he substances identified in paragraph 6 ... are hazardous substances within the meaning of Section 101(14) of CERCLA, 42 U.S.C. Sec. 9601(14)" and that "[t]here have been releases or threatened releases of hazardous substances, including, but not limited to, those identified in paragraph 6 ... into the environment ... within the meaning of Section 101(22) of CERCLA, 42 U.S.C. Sec. 9601(22). ²

The district court initially denied motions made pursuant to Rule 12(b)(6), Federal Rules of Civil Procedure to dismiss plaintiffs' claim under CERCLA, ruling in pertinent part:

(1) CERCLA's petroleum exclusion covers gasoline as well as its hazardous constituents: benzene, ethylbenzene, toluene and xylene, although said constituents are specifically listed as hazardous substances under CERCLA. This is because whether or not these constituents are fractions of petroleum, to interpret the petroleum exclusion otherwise would render the exclusion meaningless since it would result in no petroleum products coming under the petroleum exclusion.

(2) CERCLA's petroleum exclusion does not cover leaded gasoline because

(a) Lead is an additive to gasoline; it is not 'petroleum, including crude oil or any fraction thereof ...'

(b) Lead is specifically listed as a hazardous substance under CERCLA.

(c) There is no reason to treat lead differently when it is released as a part of gasoline from when it is released in any other form. See United States v. Carolawn Co., 14 Envtl.L.Rep. 20696 (D.S.C. June 15, 1984) (lead is a hazardous substance when released in water-based paint).

The district court subsequently reconsidered this ruling upon motion because of a memorandum dated July 31, 1987 from the General Counsel of the Environmental Protection Agency to the Assistant Administrator for Solid Waste and Emergency Response. Based on this memorandum, the district court ruled on reconsideration that CERCLA's petroleum exclusion applies to leaded gasoline and dismissed plaintiffs' claim under CERCLA. ³

Plaintiffs appeal. The issue presented in this appeal is whether the exclusion from the definition of "hazardous substances" in CERCLA for "petroleum, including crude oil and any fraction thereof not specifically listed as a hazardous substance" includes refined gasoline and all of its components and additives.

B. Request for Judicial Notice.

Rule 201(b)(2), Federal Rules of Evidence, allows the court to take judicial notice of a fact not subject to reasonable dispute because it is "capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned."

It is undisputable that benzene, toluene, xylene, ethylbenzene and lead are hazardous substances, having been specifically listed or designated pursuant to several of the statutes set forth in Section 9601(14)(a)-(F).

We take judicial notice that benzene, toluene, xylene, ethylbenzene and lead also are all indigenous components of crude oil. We also take judicial notice of the meaning of the words "fraction" and "petroleum." Thus, "fraction" is defined in Webster's Third New International Dictionary Unabridged (1981) to mean "one of several portions (as of a distillate or precipitate) separable by fractionation and consisting either of mixtures or pure chemical compounds." "Petroleum" is defined in relevant part as:

[A]n oily flammable bituminous liquid ... that is essentially a compound mixture of hydrocarbons of different types with small amounts of other substances (as oxygen compounds, sulfur compounds, nitrogen compounds, resinous and asphaltic components, and metallic compounds) ... and that is subjected to various refining processes (a fractional distillation, cracking, catalytic reforming, hydroforming, alkylation, polymerization) for producing useful products (as gasoline, naphtha, kerosene, fuel oils, lubricants, waxes, asphalt, coke, and chemicals)

....

C. Standard of Review.

A dismissal for failure to state a claim pursuant to Rule 12(b)(6) is a ruling on a question of law and as such is reviewed de novo. Emrich v. Touche Ross & Co., 846 F.2d 1190, 1198 (9th Cir.1988). Interpretation of a statute is a question of law also subject to de novo review. Trustees of Amalgamated Insurance Fund v. Geltman Industries, Inc., 784 F.2d 926, 928 (9th Cir.), cert. denied, 479 U.S. 822, 107 S.Ct. 90, 93 L.Ed.2d 42 (1986); United States v. Horowitz, 756 F.2d 1400, 1403 (9th Cir.), cert. denied, 474 U.S. 822, 106 S.Ct. 74, 88 L.Ed.2d 60 (1985).

D. Statutory Interpretation.

As noted, the definition of hazardous substance in Section 9601(14) contains an exclusion therefrom commonly referred to as the "petroleum exclusion." The petroleum exclusion provides that the term hazardous substance "does not include petroleum, including crude oil or any fraction thereof which is not otherwise specifically listed or designated a hazardous substance under subparagraphs (A) through (F) of this paragraph...." Neither the term "petroleum" nor "fraction" are defined in CERCLA.

1. Plain Meaning.

The plain language of a statute is the starting point for its interpretation. American Tobacco Co. v. Patterson, 456 U.S. 63, 68, 102 S.Ct. 1534, 1537, 71 L.Ed.2d 748 (1982). "A fundamental canon of statutory construction is that, unless otherwise defined, words will be interpreted as taking their ordinary, contemporary, common meaning." Perrin v. United States, 444 U.S. 37, 42, 100 S.Ct. 311, 314, 62 L.Ed.2d 199 (1979). However, "[d]eparture from a literal reading of statutory language may ... be indicated by relevant internal evidence of the statute itself and necessary in order to effect the legislative purpose." Malat v. Riddell, 383 U.S. 569, 571-72, 86 S.Ct. 1030, 1032, 16 L.Ed.2d 102 (1966). "If the intent of Congress is clear, that is the end of the matter; for the court ... must give effect to the unambiguously expressed intent of Congress." Chevron, U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984). Because "CERCLA is essentially a remedial statute designed by Congress to protect and preserve public health and the environment [, courts] are ... obligated to construe its provisions liberally to avoid frustration of the beneficial legislative purposes ... 'in the absence of a specific congressional intent otherwise.' " Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805 F.2d 1074, 1081 (1st Cir.1986) (citations omitted). However, "[t]his court must look beyond the express language of a statute where a literal interpretation 'would thwart the purpose of the over-all statutory scheme or lead to an absurd result.' " Brooks v. Donovan, 699 F.2d 1010, 1011 (9th Cir.1983) (citations omitted). And "[s]tatutes should not be construed to make surplusage of any provision." Pettis ex rel. United States v. Morrison-Knudsen Co., 577 F.2d 668, 673 (9th Cir.1978).

Plaintiffs contend that the petroleum exclusion's plain and unambiguous terms compel the construction that it does not apply to petroleum, crude oil or any fraction thereof containing any of the components which have been designated as hazardous pursuant to any one of the acts listed in Section 9601(14)(A)-(F).

In our view, however, the application of the standards governing statutory construction to the words of the petroleum exclusion requires us to exclude gasoline, even leaded gasoline, from the term "hazardous substance" for purposes of CERCLA. Any other construction ignores the plain language of the statute and renders the petroleum exclusion a nullity.

Plaintiffs rely upon the canon of statutory construction known as the "doctrine of the last antecedent." The doctrine of the last antecedent states that qualifying words, phrases and clauses must be applied to the words or phrases immediately preceding them and are...