Rehearing En Banc Denied December 11, 1989.
BOWNES, Circuit Judge.
This is an appeal by plaintiff-appellant Dedham Water Company from a judgment of the district court holding that defendant-appellee Cumberland Farms Dairy, Inc. was not liable to plaintiff under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), the Clean Water Act (CWA), the Resource Conservation and Recovery Act (RCRA), and the Massachusetts Oil and Hazardous Material Release Prevention and Response Act (Mass.Gen.L. ch. 21E).
On October 21, 1982, Dedham Water filed suit in district court against Cumberland Farms alleging violations of CERCLA, CWA, RCRA and state statutory and common law environmental requirements. The suit sought injunctive relief, response costs, and damages due to Cumberland Farms' unlawful releases and threatened releases of hazardous substances. In 1985, the district court dismissed the case, but on appeal that order was reversed, and the claims were reinstated on November 14, 1986. Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805 F.2d 1074 (1st Cir.1986).
Dedham Water (and its successor, the Dedham-Westwood Water District), a regulated public water utility, supplies drinking water to approximately 40,000 persons in the towns of Dedham and Westwood in Massachusetts. The primary source of plaintiff's water supply is the White Lodge Well Field, consisting of four wells, located on the west bank of the Neponset River in Westwood. Cumberland Farms has a truck maintenance facility located in Canton, Massachusetts, approximately 1,000 feet south of the White Lodge Well Field, on the east bank of the Neponset River. The Shield Packaging Company is also located in Canton on the east bank of the Neponset River, approximately 2,000 feet southwest of the White Lodge Well Field, in what is called the Industrial Park area. Also nearby is the New Neponset Valley Sewer, operated by the Massachusetts Water Resources Authority, which runs south to north along the east bank of the Neponset River.
Cumberland Farms, in servicing its trucks, used substantial quantities of solvents and degreasers containing volatile organic chemicals (VOCs).
It has been stipulated that in early March, 1979, Dedham Water discovered that White Lodge Wells # 3 and # 4, the wells closest to the Cumberland Farms' facility, were contaminated with VOCs, including trichloroethane, trichloroethylene, dichloroethane, dichloroethylene, and tetrachloroethylene. Based upon a survey it made of the surrounding surface waters, Dedham Water believed that Cumberland Farms was the source of the contamination of White Lodge Wells # 3 and # 4. Dedham Water informed the Massachusetts Department of Environmental Quality Engineering (DEQE) of the problem, which then assumed responsibility for the investigation. In April, 1979, Dedham Water removed Wells # 3 and # 4 from service, and the DEQE issued a notice that these wells were not to be used to supply water for drinking.
Cumberland Farms continued to dispose of solvents and degreasers directly into its drains after it was made aware of the contamination at the White Lodge Well Field. After Dedham Water notified Cumberland Farms of the contamination of Dedham's wells, the DEQE, in June, 1979, notified Cumberland Farms that tests the DEQE had conducted in June 1979 revealed that Cumberland Farms' own well was contaminated with trichloroethane and trichloroethylene. Following a meeting between the DEQE and Cumberland Farms on August 22, 1979, the DEQE informed Cumberland Farms by letter dated September 4, 1979, that Cumberland Farms was to analyze the water coming from Cumberland Farms' own production well, and was to send the results to the DEQE, so that any levels in excess of the drinking water standards could be determined and appropriate action taken. Cumberland Farms analyzed water samples from its well in September, 1979, and the results showed that its well was contaminated with VOCs. Cumberland Farms has conceded that until April, 1982, when its well was permanently shut down, it continued to use the contaminated well water for washing its trucks and continued to discharge the water into its catch basins which flowed into the NWSSO.
The DEQE conducted further investigations in 1981-1982. It is undisputed that the samples from the NWSSO discharge, the Cumberland Farms' well, and the Cumberland Farms' manhole, all revealed extremely high levels of VOCs. A representative of the DEQE testified at trial: that the DEQE had concluded that several of the VOCs found in White Lodge Well # 3 were also found in the discharge from the Cumberland Farms storm drain; that there was a hydrogeological connection across the river, so that any water pumped from the White Lodge Well Field would be drawn from the other side of the river; and that Cumberland Farms was a source of groundwater VOC contamination of the White Lodge Well Field. In February, 1982, the Massachusetts Attorney General and Cumberland Farms entered into an agreement under which Cumberland Farms was to conduct a hydrogeological study of the Cumberland Farms' site. Cumberland Farms, however, never conducted such a study. On April 8, 1982, the DEQE and the Massachusetts Attorney General brought suit in Suffolk County Superior Court against Cumberland Farms to stop the discharge of hazardous substances from the Cumberland Farms' NWSSO, alleging violations of various environmental regulations. This suit was eventually settled in August, 1987, by a consent decree.
In 1985, Dedham Water approved Metcalf & Eddy's earlier recommendation for a water treatment plant, and the plant went into service on March 25, 1987.
The District Court Opinion
The district court held that the Cumberland Farms facility was not the source of contamination of the White Lodge Well Field. The court found that the Shield Packaging Company and the New Neponset Valley Sewer were "probable" causes of the White Lodge Well Field VOC contamination. It held that under CERCLA, in "two-site" cases, a plaintiff has to prove that the hazardous wastes released by a defendant have actually migrated to and contaminated the plaintiff's site in order for the defendant to be found liable. The court also held that this type of causal nexus had to be present for the CWA, RCRA, and Massachusetts statutory claims as well. Because the court found that Dedham Water had not proven that the contaminants released by Cumberland Farms had migrated to the wells of Dedham Water, it held that Cumberland Farms was not liable for the expenses incurred by Dedham Water in investigating the cause of the pollution to its wells and rectifying it.
The Issues on Appeal
Dedham Water has not appealed the finding made by the district court that hazardous substances released by Cumberland Farms did not physically migrate onto Dedham Water's well field and contaminate it. It is Dedham Water's position that the actual releases of hazardous substances by Cumberland Farms onto its own property, even if they did not migrate to the wells owned by Dedham Water, and the threatened releases of hazardous substances by Cumberland Farms, caused the response costs that it incurred and that these costs are recoverable.
We reject Cumberland Farms' contention that the issue of response costs for actual and threatened releases was not brought up in the proceedings below. This issue was specifically raised in: the Complaint;
The central question on appeal is whether, under CERCLA, the plaintiff must prove that a hazardous substance released by the defendant's facility physically migrated onto the plaintiff's property, causing contamination of the well field, or whether it is sufficient for the plaintiff to prove that there were releases or threatened releases of a hazardous substance from defendant's facility which caused the plaintiff reasonably to incur response costs, regardless of whether physical migration actually occurred. We vacate the judgment of the district court and remand.
The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), 42 U.S.C. § 9601, et. seq. (1983 and Supp.1989), was enacted to address the growing problem of toxic wastes. It is a broad response and reimbursement statute. It imposes strict liability on responsible parties. See, e.g., United States v. Monsanto, 858 F.2d 160, 167 (4th Cir.1988) ("We agree with the overwhelming body of precedent that has interpreted [CERCLA] as establishing a strict liability scheme."), cert. denied, ___ U.S. ___, 109 S.Ct. 3156, 104 L.Ed.2d 1019 (1989); Violet v. Picillo, 648 F.Supp. 1283, 1290 (D.R.I.1986) ("Courts have universally acknowledged that ... Congress created a strict liability scheme.").
The statute specifically provides for a private right of action. There are four elements necessary for a prima facie case in a private-party lawsuit under CERCLA:
A. Covered Persons
The "liability" section of CERCLA states:
42 U.S.C. § 9607(a). Thus, current owners, former owners, generators, or transporters, may be held liable if there is a release or threatened release of a hazardous substance from the relevant facility. See, e.g., State of New York v. Shore Realty Corp., 759 F.2d 1032, 1043 (2d Cir.1985).
There is no dispute that Cumberland Farms was at all times relevant to this case the "owner" or "operator" of the Cumberland Farms' Canton facility. The parties have stipulated that the Cumberland Farms' facility, including the truck maintenance building and the various surface and subsurface drainage systems, is a "facility" within the meaning of CERCLA. 42 U.S.C. § 9601(9).
Thus, Cumberland Farms, as the owner and operator of the Cumberland Farms' facility, fits into one of the four categories of persons who may be liable under CERCLA.
B. Release or Threatened Release
CERCLA states that: "the owner and operator ... of a facility ... from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance, shall be liable...." 42 U.S.C. § 9607(a).
A "hazardous substance" is defined in CERCLA by reference to its provisions and that of other environmental statutes.
A "release" is defined by CERCLA as "any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment...." 42 U.S.C. § 9601(22). The courts have construed CERCLA's definition of "release" broadly. See, e.g., State of New York v. Shore Realty Corp., 759 F.2d at 1045 (2d Cir.1985) ("releases" include leaking tanks and pipelines, the continuing leaching and seepage from earlier spills, and leaking drums); United States v. Wade, 577 F.Supp. 1326, 1334 (E.D.Pa.1983) ("releases" include the leaching of hazardous substances into the soil).
(2) Threatened Releases
CERCLA has created two alternative liability-creating events: the "release" or the "threatened release" of a hazardous substance. See 42 U.S.C. § 9607(a)(4) (if "there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance, [a covered person] shall be liable....") (emphasis added). While other environmental statutes, e.g. the Clean Water Act, make parties liable only for actual releases, CERCLA expressly expanded liability to also cover threatened releases.
Threatened releases have been found to include: a defendant's mere ownership of "corroding and deteriorating tanks," a defendant's "lack of expertise in handling hazardous waste," or a defendant's "failure to license the facility." Shore Realty, 759 F.2d at 1045. See also United States v. Medley, 13 Chem. Waste Lit.Rep. 143, 146 (D.S.C. Nov. 4, 1986) ("The emitting or release of volatile organics into the ambient air and the storage of hazardous substances in deteriorating or leaking drums and unlined lagoons at the Medley Farm site clearly constituted a `release' or `substantial threat' of release of hazardous substances into the environment.").
The district court ruled, and the defendant argues, that since actual contamination of the plaintiff's property by the defendant's releases of hazardous substances did not occur, the liability requirement has not been met, and therefore the defendant is not liable under CERCLA. The plaintiff argues that the only causation that is required under CERCLA is that defendant's releases or threatened releases cause response costs by the plaintiff; it is not required that the defendant cause actual contamination of plaintiff's property.
(1) Statutory Language:
CERCLA states: "the owner and operator ... of a facility [or the past owner of a facility, or the generator who transported to a facility, or the transporter to a facility] ... from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance, shall be liable...." 42 U.S.C. § 9607(a). A literal reading of the statute imposes liability if releases or threatened releases from defendant's facility cause the plaintiff to incur response costs; it does not say that liability is imposed only if the defendant causes actual contamination of the plaintiff's property.
(2) Congressional History:
The Congressional history of CERCLA makes it clear that strict liability was intended for releases or threatened releases which cause response costs. The original House bill imposed liability on "any person who caused or contributed to the release or threatened release." H.R. 7020, 96th Cong.2d Sess. § 3071(a)(1)(C) (1980) 126 Cong.Rec. 26, 779, reprinted in 2 A Legislative History of CERCLA, at 39 (1983).
H.R.Rep. No. 1016, 96th Cong.2d Sess. 33 (1980), reprinted in 1980 U.S.Code Cong. & Admin.News, 6119, 6136-37. But, this causation language was deleted from the final bill that was passed. See 126 Cong.Rec. 31, 981-82, reprinted in 1 Legislative History of CERCLA at 821-24. Instead, the statute that was passed imposed liability on classes of persons, i.e. owners, former owners, generators, or transporters, (see § A. Covered Persons, supra), without reference to whether they caused or contributed to the release or threat of release. The release or threat of release only need have emanated from the facility which they owned, or to which they transported.
(3) Case Law
The pertinent case law recognizes that under CERCLA the question is whether the release or the threatened release by a defendant has caused a plaintiff to incur response costs. In State of New York v. Shore Realty Corp., 759 F.2d 1032, defendants had argued that even if there had been releases at defendant's facility, the existence of hydrogeological and other physical factors prevented the releases from contaminating the drinking water. The court stated:
759 F.2d at 1038, n. 4. See also Artesian Water, 659 F.Supp. at 1281-82, aff'd 851 F.2d 643 (3d Cir.1988) (neighbors of a site on which hazardous wastes have been deposited may recover response costs incurred as the result of the threat that such wastes could migrate into their wells, even though the wells were not yet contaminated); United States v. Mottolo, 695 F.Supp. 615, 623 (D.N.H.1988) (In response to defendant's argument that plaintiffs had failed to establish the existence of threatened releases because plaintiffs lacked evidence of off-site pollution, the court held that there was no such requirement in CERCLA).
Artesian Water Co. v. Government of New Castle County, 659 F.Supp. 1269 (D.Del.1987), aff'd, 851 F.2d 643 (3d Cir.1988) is particularly apropos to the instant case. In Artesian, a water utility company which provided drinking water to the city, sued the owner of a landfill, seeking to recover response costs as a result of a release or threatened release of hazardous substances from the landfill (the Site), which was located 3,000 feet from the well field. Groundwater pollution had been discovered in the vicinity of the well field, but not in the well field itself, and the state had begun an aquifer monitoring program and concluded that the most likely source of the pollution was the landfill Site. There also existed a second waste disposal facility (DS & G), owned by a different entity, which was located several hundred feet from the well field and which defendant asserted was the source of the contamination. Under these facts, which are virtually identical to those in the instant case, the court held that the plaintiff had made a showing of release or threatened release of hazardous substances from the Site sufficient to satisfy its burden on summary judgment. Id. at 1281. The court went on to state:
Id. at 1282.
To our knowledge, every court that has addressed this issue, with the exception of the district court in the instant case, has held that it is not necessary to prove actual contamination of plaintiff's property by defendant's waste in order to establish liability under CERCLA.
Since the district court failed to properly consider Dedham's claim that even if Cumberland's releases did not cause the contamination of Dedham's wells, Cumberland's releases and threatened releases caused it to incur response costs, there must be a new trial.
CERCLA does provide for defenses. 42 U.S.C. § 9607(b) states:
Defenses (1) and (2) obviously do not apply and under the stipulated and uncontested facts the viability of defense (3) seems dubious. The determination of the application of defenses is, however, a matter for the district court in the first instance.
E. Response Costs
Under CERCLA, if the release or threatened release of a hazardous substance "causes the incurrence of response costs," 42 U.S.C. § 9607(a)(4), a covered person shall be liable for the "necessary costs of response incurred by any other person consistent with the national contingency plan." 42 U.S.C. § 9607(a)(4)(B).
CERCLA states that the promulgation of a revised national contingency plan (NCP) "shall include a section ... to be known as the national hazardous substance response plan which shall establish procedures and standards for responding to releases of hazardous substances, pollutants, and contaminants...." 42 U.S.C. § 9605. The NCP, 40 C.F.R. § 300.1 et seq., prepared by the Environmental Protection Agency, states:
40 C.F.R. § 300.71.
CERCLA defines "response" as "remove, removal, remedy, and remedial action...." 42 U.S.C. § 9601(25). "Remove" or "removal" means:
42 U.S.C. § 9601(23). "Remedy" or "remedial action" is defined as:
42 U.S.C. § 9601(24).
Dedham Water asserts that it incurred $19 million in response costs, including the testing and monitoring of the White Lodge Well Field and surrounding areas, and the construction and operation of a water treatment facility. If, on remand, the district court finds that Cumberland Farms was responsible for the response costs incurred, it must determine the amounts of such costs as come within the statutory framework: § 9607(a)(4)(B) (costs consistent with the national contingency plan); and § 9601(23)(24) and (25).
The district court found that Cumberland Farms was not liable under the other statutes that plaintiff invoked on the same liability theory it applied to the CERCLA claim.
A. Massachusetts Oil and Hazardous Material Release Prevention and Response Act
The Massachusetts Oil and Hazardous Material Release Prevention and Response Act, Mass.Gen.L. ch. 21E, § 4-5 is patterned after the federal CERCLA statute.
For the same reasons discussed in the CERCLA section supra, we conclude that the plaintiff does not need to prove that
B. The Clean Water Act
The CWA (as amended February 4, 1987) provides that a violation "with respect to which a State has commenced and is diligently prosecuting an action under a State law comparable to this subsection ... shall not be the subject of a civil penalty action under ... § 1365 of this title [the CWA citizen suit provision.]" 33 U.S.C. § 1319(g)(6)(A)(ii). The institution, prosecution and settlement of the action brought by DEQE against Cumberland Farms is a bar to the CWA action by Dedham Water.
C. Resource Conservation and Recovery Act
RCRA has a similar provision to that of the CWA barring a private suit, "if the Administrator or State has commenced and is diligently prosecuting a civil or criminal action in a court of the United States or a State to require compliance with such permit, standard, regulation, condition, requirement, prohibition, or order." 42 U.S.C. § 6972(b)(1)(B). The DEQE action, therefore, bars this claim under RCRA.
D. Attorney's Fees
Dedham Water has asked for attorney's fees under the Clean Water Act, RCRA and Mass.Gen.L. ch. 21E.
Mass.Gen.L. ch. 21E, § 15 provides:
On remand, therefore, if the district court finds that Dedham Water is entitled to response costs under Mass.Gen.L. ch. 21E it may award costs and attorney's fees to Dedham Water.
Vacate the judgment of the district court and Remand for further proceedings consistent herewith.
Costs awarded to Dedham Water.
MEMORANDUM AND ORDER
Contrary to the defendant, Cumberland Farms' assertion, the panel did not overlook the undisputed evidence. This was an action brought under CERCLA, which provides that if there has been a "release or threatened release" from defendant's facility, 42 U.S.C. §§ 9607(a)(4), 9601(14) & (22), which caused a plaintiff to incur "response costs," id. § 9607(a)(4), the plaintiff may recover those costs provided they are necessary and "consistent with the national contingency plan," id. §§ 9607(a)(4)(B), 9601(23)-(25). The district court in this case held that the defendant's "releases" did not, in fact, contaminate the plaintiff's wells. Dedham Water Co. v. Cumberland Farms, Inc., 689 F.Supp. 1223, 1235 (D.Mass.1988). But, the district court did not consider the additional question of whether defendant's releases (or threatened releases) might nonetheless have caused the plaintiff to incur "response costs" even though those releases did not in fact contaminate the wells. (A plaintiff, for example, under certain circumstances might reasonably think that a particular release would prove likely to contaminate his wells and reasonably spend money to avoid the contamination even though no actual contamination occurs.) Because the case was brought under CERCLA, we remanded the case so that the district court could make findings relevant to this CERCLA claim.
The defendant now petitions for rehearing. It says that the "undisputed evidence" reveals that, under the circumstances here present, it could not have happened
The defendant goes on to say that the parties stipulated that the plaintiff incurred response costs because of "actual" contamination of its well field. The stipulation to which defendant refers says:
We are not persuaded at this stage of the proceedings, however, that we can interpret this stipulation definitively as disposing of the issue, particularly when the district court, in its opinion, nowhere suggested that a stipulation lay behind its failure to make findings on other than the "actual contamination" question. We therefore think it appropriate to leave the meaning of the stipulation to the district court on remand.
We also note that liability in respect to costs caused by releases (or threatened releases) that do not in fact contaminate wells exists only where the statutory requirements are met; and the relevant standards are objective. See 42 U.S.C. § 9607(a). Obviously, a New Jersey well owner who began to make local-area contamination studies because of releases occurring in California could not claim, objectively speaking, that the California releases "cause[d]" the costs, see id. § 9607(a)(4), or that his expenditures were "necessary" and "consistent with the national contingency plan," id. § 9607(a)(4)(B). Equally obvious, there can be circumstances where a defendant causes "costs" but does not cause actual contamination. Indeed, how else could a "threatened release" ever cause a "response cost?"
As we have said, on remand the district court should decide this as-yet-undecided CERCLA issue. In doing so, it is free to consider, and to take appropriate account of, the stipulation to which defendant refers.
The petition for rehearing is denied.
State of New York v. Shore Realty Corp., 759 F.2d 1032, 1043 n. 16 (2d Cir.1985).
42 U.S.C. § 9601(14). See United States v. Carolawn Co., 21 Env't Rep.Cas. (BNA) 2124, 2125 (D.S.C. June 15, 1984) ("By its express terms, [§ 9601(14)] requires only that a substance be designated as hazardous or toxic under one of the referenced statutory provisions to be a hazardous substance under CERCLA.").
659 F.Supp. at 1282." This quotation, however, offers no support for the district court's conclusion that there must be a causal nexus between the defendant's conduct and the contamination of the plaintiff's property. Rather, the Artesian Water court explicitly states that there must be a causal connection between the defendant's conduct and the plaintiff's incurrence of costs. Thus, the district court's holding that in two-site cases the plaintiff must prove that the defendant's releases physically migrated to the plaintiff's site, is not supported by the Artesian Water case. The district court's reliance on Shore Realty, 759 F.2d at 1044 n. 17, is equally misplaced. Indeed, Shore Realty repeats over and over again, that a showing of causation [of actual contamination] is not required under CERCLA. Also, the district court's invocation of Bunker Hill, 635 F.Supp. at 674, is not relevant to the instant case for the reasons discussed supra in footnote 7.
Chapter 21E, § 5(a) states in relevant part: