REAVLEY, Circuit Judge:
In a private action brought under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S.C.A. §§ 9601-9675 (1983 & Supp.1989),
The property at issue is a 114-acre tract of land in Texas City, Texas. For many years, Borden operated a phosphate fertilizer plant on the site. As a by-product of the fertilizer manufacturing process, large quantities of phosphogypsum were produced. The site now contains a large inactive pile of phosphogypsum covering approximately 35 acres.
Phosphogypsum alone contains low levels of radioactivity. More highly radioactive sludges and scales from processing equipment, however, were dumped into the phosphogypsum pile, creating "hot" areas within the pile. Additionally, during processing, radioactive materials became concentrated in manufacturing equipment, pipe, and filter cloths used in production. These materials constitute "off-pile" wastes and were left primarily near a junk-yard on the property and near the abandoned manufacturing buildings. Some of the off-pile sites contain over 500 times the background level of radiation.
In 1977, Amoco became interested in purchasing the property. The parties discussed two prices: $1.8 million for the site "as is," or $2.2 million if Borden would remove the phosphogypsum. Allegedly unaware of the site's radioactivity, Amoco accepted the "as is" option.
Amoco claims it had no knowledge of the radioactive nature of phosphogypsum until it was so informed by the Texas Department of Water Resources in 1978. Amoco then hired several consultants to measure the radioactivity, to determine geology and hydrology, and to characterize the data. The consultant's reports revealed the various elevated radiation levels throughout the site. The site is currently unused and is secured with fences and guards to prevent access. Amoco claims that permanent remedial action will cost between $11 million and $17 million.
In 1982, Amoco brought this action in diversity, alleging various state law claims, including fraud and breach of contract. It later added the CERCLA claim to recover response costs incurred as a result of the radioactive contamination. The state law claims were tried to a jury. The jury found that Borden did not fraudulently misrepresent the condition of the property, but did find that Borden did not deliver the building, equipment, and machinery in a "clean and healthful" condition, as it had expressly warranted. Yet, because the jury also
Amoco continued to pursue its CERCLA cost recovery claim, which the district court bifurcated into liability and remedial phases. Borden's primary defenses against liability were: (1) that it had sold the property on an "as is" basis, and that this fact and the doctrine of caveat emptor should preclude a finding of liability; and (2) that the levels of radiation emanating from the site are not high enough to be considered a release of a hazardous substance within the meaning of CERCLA.
On February 2, 1987, the district court issued a Memorandum and Order denying Amoco's motion for entry of judgment on the CERCLA claim. In that order, the court rejected Borden's caveat emptor argument, holding that common-law defenses do not apply to CERCLA claims and that there can be no implied transfer of CERCLA liability. The court further held, however, that Amoco must prove that some threshold level of radioactivity exists at the site in order to establish CERCLA liability and selected the standards for remedial actions at inactive uranium processing sites, see 40 C.F.R. Part 192 (1988) ("Inactive Tailings Standards"), promulgated by the Environmental Protection Agency ("EPA") under the Uranium Mill Tailings Radiation Control Act, 42 U.S.C.A. §§ 7901-7942 (1983 & Supp.1989), to determine hazardous radionuclide levels.
After hearing evidence at a later trial, the court used data that averaged radiation levels throughout the phosphogypsum pile and concluded that the property's radiation levels did not exceed the Inactive Tailings Standards. It then entered judgment for Borden. Amoco appeals the court's holding that a threshold level of radionuclides must be shown to exist at the site to establish CERCLA liability, the appropriateness of the Inactive Tailings Standards for defining that threshold, and the court's application of that standard.
Congress enacted CERCLA in response to well-publicized toxic waste problems. H.R.Rep. No. 1016, 96th Cong., 2d Sess., pt. I, at 17-18 (1980), reprinted in 1980 U.S.Code Cong. & Admin.News 6119, 6120 [hereinafter House Report]; Developments in the Law— Toxic Waste Litigation, 99 Harv.L.Rev. 1458, 1466 (1986) [hereinafter Developments]. Yet, because the final version was enacted as a "last-minute compromise" between three competing bills, it has "acquired a well-deserved notoriety for vaguely-drafted provisions and an indefinite, if not contradictory, legislative history." United States v. Mottolo, 605 F.Supp. 898, 902, 905 (D.N.H.1985).
CERCLA substantially changed the legal machinery used to enforce environmental cleanup efforts and was enacted to fill gaps left in an earlier statute, the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C.A. §§ 6901-6987 (1983 & Supp.1989), as amended by Solid Waste Disposal Act Amendments of 1980, Pub.L. No. 96-482, 94 Stat. 2334. House Report, at 22, reprinted in 1980 U.S.Code Cong. & Admin.News at 6125; Developments, 99 Harv.L.Rev. at 1470-71. The RCRA left inactive sites largely unmonitored by the EPA unless they posed an imminent hazard. House Report, at 21-22, reprinted in 1980 U.S.Code Cong. & Admin.News at 6124-25. CERCLA addressed this problem "by establishing a means of controlling and financing both governmental and private responses to hazardous releases at abandoned and inactive waste disposal sites." Bulk Distribution Centers, Inc. v. Monsanto Co., 589 F.Supp. 1437, 1441 (S.D.Fla. 1984); see New York v. Shore Realty Corp., 759 F.2d 1032, 1041-42 (2d Cir.1985). Section 9607(a), one of CERCLA's key provisions for furthering this objective, permits both government and private plaintiffs to recover from responsible parties the costs incurred in cleaning up and responding to hazardous substances at those sites.
Because of the complexity of CERCLA cases, which often involve multiple defendants and difficult remedial questions, courts have bifurcated the liability and remedial, or damages, phases of CERCLA litigation. See United States v. Wade, 653 F.Supp. 11, 14-15 (E.D.Pa.1984); cf. United States v. Mottolo, 695 F.Supp. 615, 620-21 (D.N.H.1988) (resolving liability by summary judgment); United States v. Bliss, 667 F.Supp. 1298, 1308-09 (E.D.Mo.1987) (same). In doing so, disputed factual and legal issues pertaining only to liability are resolved before deciding the more complicated and technical questions of appropriate cleanup measures and the proportionate fault of liable parties. Bifurcation and
To establish a prima facie case of liability in a CERCLA cost recovery action, a plaintiff must prove: (1) that the site in question is a "facility" as defined in § 9601(9); (2) that the defendant is a responsible person under § 9607(a); (3) that a release or a threatened release of a hazardous substance has occurred; and (4) that the release or threatened release has caused the plaintiff to incur response costs. See, e.g., Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1152-53 (9th Cir.1989); Southland Corp. v. Ashland Oil, Inc., 696 F.Supp. 994, 999 (D.N.J.), rev'd on rehearing on other grounds, No. 88-0700, 1988 WL 125855 (D.N.J. Nov. 23, 1988) (WESTLAW, Dctu Database). If the plaintiff establishes each of these elements and the defendant is unable to establish the applicability of one of the defenses listed in § 9607(b),
A plaintiff may recover those response costs that are necessary and consistent with the National Contingency Plan ("NCP"). § 9607(a)(4)(B); see 40 C.F.R. Part 300 (1988). Thus, once liability is established, the court must determine the appropriate remedy and which costs are recoverable. The court then must ascertain, under CERCLA's contribution provision, each responsible party's equitable share of the cleanup costs. § 9613(f).
It is undisputed that Amoco's property falls within the statutory definition of a "facility";
1. Hazardous Substance
Radium-226, the primary radioactive waste on the property, decays to form a gas, radon-222, and solid "daughter products."
The plain statutory language fails to impose any quantitative requirement on the term hazardous substance and we decline to imply that any is necessary. Radionuclides meet the listing requirements and therefore the radioactive materials on Amoco's property are hazardous substances within the meaning of CERCLA.
This holding is supported by courts that have considered the definitional requirements of the term and congressional comments contained in the legislative history. See Dedham Water Co. v. Cumberland Farms Dairy, Inc., 889 F.2d 1146, 1151-52 (1st Cir.1989) (listing establishes that a substance is hazardous); Eagle-Picher Indus. v. United States EPA, 759 F.2d 922, 927 (D.C.Cir.1985) ("substance is a `hazardous substance' within the meaning of CERCLA if it qualifies under any of" the statute's definitional requirements); Vermont v. Staco, Inc., 684 F.Supp. 822, 832 (D.Vt.1988) (listing establishes substance is hazardous as a matter of law); T & E Indus., 680 F.Supp. at 709 (presence of a hazardous substance indicated since "radionuclides, such as radium and radon, have been designated as `hazardous substances' under CERCLA"); United States v. Metate Asbestos Corp., 584 F.Supp. 1143, 1147 (D.Ariz.1984) (substance is hazardous if it meets the listing requirements); United States v. Wade, 577 F.Supp. 1326, 1339-41 (E.D.Pa.1983) (listed substance is hazardous regardless of the concentration or amount of any particular discharge); S.Rep. No. 848, 96th Cong., 2d Sess. 24-28 (1980).
The term "release" is defined to mean: "any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment (including the abandonment or discarding of barrels, containers, and other closed receptacles containing any hazardous substance or pollutant or contaminant)...." § 9601(22). As with "hazardous substance," the plain statutory language fails to impose any quantitative requirement on the term "release." We believe that the definition of "release" should be construed broadly, see Shore Realty, 759 F.2d at 1038 & n. 4, 1045 ("release" includes leaking tanks and pipelines); Staco, Inc., 684 F.Supp. at 832-33 ("release" includes migration of hazardous chemicals to public and private sewer systems; "threatened release" includes presence of mercury in septic systems with capability of leaching into the groundwater); Metate Asbestos, 584 F.Supp. at 1149 ("release" includes transport of asbestos by the wind), "to avoid frustrat[ing] the beneficial legislative purposes." Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805 F.2d 1074, 1081 (1st Cir.1986).
Borden's actions met the release requirement in two ways. First, it did so by disposing of the phosphogypsum and highly radioactive wastes on the property. See § 9601(22). Second, the gas emanating from the radionuclides constitutes a release within the meaning of the statute. See 54 Fed.Reg. 22524, 22526 (1989).
3. Response Costs
The statutory provision suggesting a threshold for liability is the requirement that a release or threatened release have "caus[ed] the incurrence of response costs." § 9607(a)(4). Response costs are generally and specifically defined to include a variety of actions designed to protect the public health or the environment.
In our interpretation of the requirement that a release "cause the incurrence of response costs," we are notably entering unexplored territory. As with many of CERCLA's provisions, the legislative history is bereft of discussion about the causal nexus between releases and response costs. Additionally, courts have not been faced with a scenario suggesting that a plaintiff's action was not justified by the hazard posed.
Borden has pointed out that all matter is radioactive to some degree. While harmless at low concentrations, at some point on a continuum it poses an unacceptable risk to human life and the environment. Given CERCLA's broad liability provisions and the pervasive nature of radionuclides, Borden argues that without a quantitative limit CERCLA liability could attach to the release of any substance and theoretically could reach "everything in the United States."
Yet, concerns about the most extreme reach of liability — extending to naturally occurring hazardous substances — are misplaced. Remedial actions taken in response to hazardous substances as they occur naturally are specifically excluded from the NCP and are therefore not recoverable. § 9604(a)(3)(A). The only concern that should support the use of a quantitative measure at the liability phase is potential abuse of the broad provisions, which may subject some defendants to harassing litigation.
Amoco and the EPA argue that CERCLA liability attaches upon the release of any quantity of a hazardous substance and that the extent of a release should be considered only at the remedial phase. However, we must reject this approach because adherence to that view would permit CERCLA's reach to exceed its statutory purposes by holding parties liable who have not posed any threat to the public or the environment.
Section 9621(d) governs the extent of cleanup, which is required "at a minimum [to] assure protection of human health and the environment." § 9621(d)(1). To attain that goal, the scope of remedial action may be established by any "legally applicable or relevant and appropriate ... requirement" ("ARAR"). § 9621(d)(2)(A). ARARs include "any standard, requirement, criteria, or limitation under any Federal environmental law" or any more stringent "State environmental or facility siting law." Id. As these standards define the limits of appropriate response costs, and therefore recoverable expenses, they are also useful for establishing the limits of liability. While not the exclusive means of justifying response costs, we hold that a plaintiff who has incurred response costs meets the liability requirement as a matter of law if it is shown that any release violates, or any threatened release is likely to violate, any applicable state or federal standard, including the most stringent.
Amoco has clearly met this requirement by showing that the radioactive emissions exceeded the limits set in Subpart B of the Inactive Tailings Standards,
40 C.F.R. 192.12 (1988).
Amoco presented evidence that the background level of radium-226 was 0.5 pCi/g. The phosphogypsum pile contains an average radium concentration of 40 pCi/g. Samples from the buildings and the junkyard contained radium levels ranging from 661 pCi/g to 816 pCi/g. Some materials found in the junkyard had concentrations up to 24,000 pCi/g and residue in a pipe between the junkyard and a surge pond contained a concentration of over 60,000 pCi/g. As these measurements clearly exceed an applicable standard, Amoco was justified in incurring response costs as a matter of law. Moreover, the excessive radiation in the hot spots, which exceeds any possible standard protective of public health, justified response actions regardless of any overall measure of the site's radiation.
The district court determined that there was an insufficient release of a hazardous substance based on its application of Subpart A, a less stringent standard. In applying this standard, the district court used an average measure of radiation from the site. Samples from which this average was derived were taken primarily from the pile. While the average included a few measurements from off-pile sites, these samples were apparently not taken from the most highly radioactive areas.
The district court erred initially by using a less stringent standard. The error, however,
Amoco's security measures and site investigation are acceptable response costs within the meaning of CERCLA. See Ascon Properties, 866 F.2d at 1154-56; Cadillac Fairview/Cal. v. Dow Chem. Co., 840 F.2d 691, 695 (9th Cir.1988); Wickland Oil Terminals v. Asarco, Inc., 792 F.2d 887, 892 (9th Cir.1986). As there has been a release of a hazardous substance that justified the incurrence of response costs and the other elements of a prima facie case have been met, Amoco is entitled to summary judgment on the liability issue.
Under CERCLA, a private plaintiff may recover only those response costs that are necessary and consistent with the NCP. § 9607(a)(4)(B). The NCP has been promulgated by the EPA, 40 C.F.R. Part 300 (1988), and "establish[es] procedures and standards for responding to releases of hazardous substances...." § 9605(a). Under the NCP, cleanup efforts are designed to meet CERCLA's goals for cost-effective remedial action that adequately protects public health and the environment. See § 9621(a)-(b). ARARs define the limits of remedial efforts and must be selected from applicable federal standards or more stringent state standards. § 9621(d). Once the applicable ARARs are established, a district court must determine which of the standards will provide remedial action most consistent with the NCP.
While the strictest standard may be used for the purposes of establishing liability, it will not govern remedial actions unless consistent with the NCP. See 40 C.F.R. § 300.68(i) (1988); H.R.Rep. No. 253 pt. V, 99th Cong., 2d Sess. 53-54, reprinted in 1986 U.S.Code Cong. & Admin.News 2835, 3176-77 [hereinafter Amendments Report] (suggesting that barring certain circumstances, the most stringent federal standard must be applied); see also id. at 54, reprinted in 1986 U.S.Code Cong. & Admin.News at 3177 (suggesting that if a cost effective remedial action is feasible and will achieve a more stringent state standard, the state standard should control). The justification standard provides a broad net for establishing liability, consistent with CERCLA's liability provisions, leaving remedial and responsibility determinations for a later stage.
In this case, the district court considered only one possible ARAR, the Inactive Tailings Standards. The court, however, will have to revisit its application of the standard and determine whether other ARARs are more appropriate. See 40 C.F.R. § 300.68(i) (1988). Some other standards to consider include the EPA's new regulations for radionuclide emissions from phosphogypsum piles, which should be finalized soon, see 54 Fed.Reg. 9612, 9612 (1989); the EPA's maximum contaminant levels for Radium-226, adopted under the authority of the Safe Drinking Water Act, 42 U.S.C. § 300g-1, see 40 C.F.R. 141.15 (1988); any appropriate regulations for groundwater contamination; and any Texas standards concerning radiation contamination of soil, vegetation, or groundwater.
The hazard on the property constitutes an indivisible harm. See United States v. Monsanto Co., 858 F.2d 160, 171 (4th Cir.1988), cert. denied, ___ U.S. ___, 109 S.Ct. 3156, 104 L.Ed.2d 1019 (1989). As an owner of a facility that continues to release a hazardous substance, Amoco shares joint and several liability for remedial actions with Borden. Id. at 168-69; Shore Realty, 759 F.2d at 1043-45; see Amendments Report, pt. I, at 74, reprinted in 1986 U.S.Code Cong. & Admin.News at 2856. When one liable party sues another to recover its equitable share of the response costs, the action is one for contribution, which is specifically recognized under CERCLA. See § 9613(f).
Under that provision a court has considerable latitude in determining each party's equitable share. After deciding the appropriate remedial action, the court will have to determine each party's share of the costs. Possible relevant factors include: "the amount of hazardous substances involved; the degree of toxicity or hazard of the materials involved; the degree of involvement by parties in the generation, transportation, treatment, storage, or disposal of the substances; the degree of care exercised by the parties with respect to the substances involved; and the degree of co-operation
Borden does not challenge the caveat emptor holding, but does claim that the equities in this case require Amoco to bear the full cost of cleanup. However, because both parties are liable under CERCLA, this is a question more properly decided by the district court, after it has determined the proper scope of the cleanup efforts. Accordingly, we REVERSE the judgment and REMAND the case for proceedings not inconsistent with this opinion.
REVERSED AND REMANDED.
ON PETITION FOR REHEARING
Our opinion issued December 8, 1989, 889 F.2d 664, is corrected and clarified as follows:
1) Borden correctly points out, contrary to statements in our opinion, that Amoco rather than Borden offered the "as is" purchase option, which was then accepted by Borden. Additionally, the jury found that Amoco knew or should have known of the property's radioactivity prior to April 16, 1978, whereas we stated that the jury only found that Amoco should have known.
2) Borden correctly points out that Subpart B of the Inactive Tailings Standards applies only to off-pile areas, and then argues that our opinion found it liable because radiation on both the pile and the off-pile sites exceeded Subpart B. Borden therefore requests that we reverse the finding of Borden's liability for the pile itself and limit remand to an allocation of costs for cleaning up the off-pile sites.
We decline to do so. Our opinion did not decide Borden's liability with respect to the areas separately. We considered the 114 acre tract and held that Borden was liable for response costs on the 114 acres because radioactivity on the property exceeded an applicable federal standard, namely Subpart B. This is consistent with the justification standard we established, which is met "if it is shown that any release violates ... any applicable state or federal standard ..." 889 F.2d at 672. By deciding liability generally, we intended to leave for the district court the specific questions of appropriate cleanup and equitable apportionment of response costs. Those questions must be resolved during the remedial phase of trial after the district court has determined which standards will govern the cleanup efforts.
When the court proceeds, it must consider the EPA's new standards regulating the radioactivity of phosphogypsum piles as well as any other relevant state or federal standards. See 54 Fed. Reg. 51, 654 (Dec. 15, 1989). After determining which standard(s) will meet CERCLA's remedial goals, the district court must ascertain the appropriate response costs. Response costs will be warranted only for cleaning up areas containing radioactivity exceeding the relevant standards. If the district court finds that remedial action is not required for the phosphogypsum pile, nothing in our opinion precludes the court from limiting cleanup efforts, and therefore response cost liability, to the off-pile areas.
IT IS ORDERED that the petition for rehearing filed in the above entitled and numbered cause is hereby DENIED.
Section 9601(23) defines "remove" or "removal" to include
Section 9601(24) defines "remedy" or "remedial action" to include, among others, "those actions consistent with permanent remedy taken instead of or in addition to removal actions in the event of a release or threatened release of a hazardous substance into the environment, to prevent or minimize the release of hazardous substances so that they do not migrate to cause substantial danger to present or future public health or welfare or the environment."
Under Subpart A cleanup efforts must provide reasonable assurance that the radon flux does not exceed an average release rate of 20 pCi/m