RYMER, Circuit Judge:
3550 Stevens Creek Associates appeals the entry of judgment on the pleadings in its action for recovery of costs incurred in the voluntary removal of asbestos during remodeling of a commercial building against Barclays Bank of California, a predecessor-in-interest who owned the building at the time materials containing asbestos were installed. The United States as Amicus Curiae has filed a brief on behalf of Stevens Creek. The question on appeal is whether a private party may recover its response costs for clean-up of asbestos installed in a commercial building under section 107(a)(2)(B) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. § 9607 (CERCLA). We hold that CERCLA does not permit such an action, and affirm.
In 1963, First Valley Corporation constructed a building, located at 3550 Stevens Creek Boulevard in San Jose, California, which contained asbestos insulation and fire retardants. In 1969, Barclays Bank acquired First Valley's assets. First Valley Corporation was dissolved in 1971, when Barclays acquired title to the property. Barclays sold the property to Stevens Creek in 1984. From 1984 through 1986, Stevens Creek remodeled the building, spending more than $100,000.00 in removing asbestos.
Stevens Creek brought this suit in district court under CERCLA, 42 U.S.C. §§ 9601-9657. It sought damages under section 107(a), 42 U.S.C. § 9607(a) for removal costs incurred. On Barclay's motion the district court granted judgment on the pleadings, holding that no authority exists for the award of such relief.
A judgment on the pleadings is a decision on the merits which we review de novo. General Conference Corp. of Seventh-Day Adventists v. Seventh-Day Adventist Congregational Church, 887 F.2d 228, 230 (9th Cir.1989), cert. denied, ___ U.S. ___, 110 S.Ct. 1134, 107 L.Ed.2d 1039 (1990); McGlinchy v. Shell Chem. Co., 845 F.2d 802, 810 (9th Cir.1988). Judgment on the pleadings is proper when there are no issues of material fact, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 12(c). The district court's interpretation of CERCLA is also reviewed de novo. Idaho v. Hanna Mining Co., 882 F.2d 392, 395 (9th Cir.1989). We may affirm the district court's decision on any ground supported by the record. Marino v. Vasquez, 812 F.2d 499, 508 (9th Cir.1987); Hatch v. Reliance Ins. Co., 758 F.2d 409, 414 (9th Cir.), cert. denied, 474 U.S. 1021, 106 S.Ct. 571, 88 L.Ed.2d 555 (1985).
CERCLA was enacted to "provide for liability, compensation, cleanup, and emergency response for hazardous substances released into the environment and the cleanup of inactive hazardous waste disposal sites." Pub.L. No. 96-510, 94 Stat. 2767 (1980). It generally imposes strict liability on owners and operators of facilities at which hazardous substances were disposed. 42 U.S.C. § 9607(a); Hanna, 882 F.2d at 394. To promote these objectives, Congress created a private claim for certain "response costs" against "various types of persons who contributed to the dumping of hazardous waste at a site." Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1152 (9th Cir.1989) (citations omitted).
CERCLA employs a bifurcated mechanism to promote the cleanup of hazardous waste sites, hazardous spills, and releases of hazardous substances into the environment. Through the creation of Superfund, the federal government is empowered to respond to hazardous waste disposal. 42 U.S.C. §§ 9604-05, 9611-12. The statute also authorizes private parties to institute civil actions to recover the costs involved in the cleanup of hazardous wastes from those responsible for their creation. 42 U.S.C. § 9607(a)(1-4). See Wickland Oil Terminals v. Asarco, Inc., 792 F.2d 887, 890-92 (9th Cir.1986); Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805 F.2d 1074, 1081 (1st Cir.1986); Walls v. Waste Resource Corp., 823 F.2d 977, 980-81 (6th Cir.1987); Prudential Ins. Co. of America v. United States Gypsum, 711 F.Supp. 1244, 1251 (D.N.J.1989); United States v. Reilly Tar and Chem. Corp., 546 F.Supp. 1100, 1112 (D.Minn.1982); H.R. Rep. No. 1016 at 22, reprinted in 1980 U.S.Code Cong. & Admin.News 6119, 6125.
A private party may recover its "response costs"
There is no question that section 107(a)(2)(B) "expressly creates a private cause of action." Wickland Oil Terminals, 792 F.2d at 890. Accord Walls, 823 F.2d at 980-81. To prevail in a private cost recovery action, a plaintiff must establish that (1) the site on which the hazardous substances are contained is a "facility" under CERCLA's definition of that term, Section 101(9), 42 U.S.C. § 9601(9);
Stevens Creek argues that it has sufficiently pleaded all the allegations necessary for a claim under section 107, and that its cause of action is properly brought under the actual language of that section. In its view section 107 is not subject to any relevant limitations, particularly to a limitation on governmental responses to release from products which are part of the structure of a building set out in section 104(a)(3). Barclays contends that its predecessors-in-interest did not "dispose" of a hazardous substance within the meaning of section 107, and that the response limitations in section 104 are persuasive authority that removal of building materials containing asbestos is outside the scope of CERCLA.
We agree with Stevens Creek that the limitation on governmental response in section
We therefore begin by considering the plain language of the statute. American Tobacco Co. v. Patterson, 456 U.S. 63, 68, 102 S.Ct. 1534, 1537, 71 L.Ed.2d 748 (1982). To be liable under Section 107(a)(2)(B), there must have been a "release" or "threatened release" of a hazardous substance, and the defendant must be a person "who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of." 42 U.S.C. § 9607(a)(2) and (4).
"Release" is defined in section 101(22) as "any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment...."
"Facility" is a "building [or] structure ... where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located." 42 U.S.C. § 9601(9). Barclays does not contend that a structure built with asbestos insulation and fire retardants is not a "facility" within the meaning of CERCLA.
"Hazardous substance" is defined in section 101(14), 42 U.S.C. § 9601(14).
"Disposal" is defined by reference to the Solid Waste Disposal Act.
"Solid waste" is "any garbage, refuse, sludge, ... and other discarded material...." 42 U.S.C. § 6903(27), and "hazardous waste" is that subset of "solid waste" which poses a particularly great threat to human health or the environment, see 42 U.S.C. § 6903(5). Regulations issued by the Environmental Protection Agency similarly define "solid waste" as "any discarded material" which is "abandoned, ... recycled, ... or inherently wastelike." 40 C.F.R. § 261.2(a). The terms do not include materials which are "used or reused as ingredients in an industrial process to make a product...." 40 C.F.R. § 261.2(e)(1)(i).
On its face "disposal" pertains to "solid waste or hazardous waste," not to building materials which are neither. There is no suggestion that Barclays or its predecessors-in-interest discarded asbestos insulation and fire retardants; rather they were used to construct the building. Nor can the construction of a building using these materials fit into "the discharge, deposit, injection, ... or placing into or on any land or water" specified in the definition. There is no question that the asbestos materials in this case were built into the structure, not placed "into or on any land or water." Finally, there is no indication that materials containing asbestos installed as part of the structure of a building, as here, are such that asbestos fibers "may enter the environment or be emitted into the air." Even when action is taken that makes the asbestos friable, the resulting hazard is within the building.
This reasoning is unpersuasive for two reasons. First, Congress could have defined "disposal" for purposes of CERCLA any way it chose; it chose to import the meaning provided in SWDA. That meaning is clear. All CERCLA definitions, including for "disposal," are set forth in section 101 and apply to all subsequent sections, some of which also speak of "hazardous substances." No reason appears in the statutory scheme to give a term one meaning for one section but another for another. Second, the fact that "hazardous substance" and "hazardous waste" may be used interchangeably goes to show that asbestos in non-waste form, such as insulation, was not meant to be covered: "both the terms hazardous substance and hazardous wastes are used, and their use is often interchangeable, because in the context of CERCLA, hazardous substances are generally dealt with at the point when they are about to, or have become, wastes." Injuries And Damages From Hazardous Wastes — Analysis And Improvement Of Legal Remedies: A Report To Congress In Compliance With Section 301(e) of [CERCLA] By The "Superfund Section 301(e) Study Group", Part 1, p. 26.
Stevens Creek points to no authority construing "disposal" as it suggests. However courts in other circuits have construed "disposal" for purposes of section 107(a)(3)
Stevens Creek argues that CERCLA is to be broadly construed and that
CERCLA was designed to deal with the problem of inactive and abandoned hazardous waste disposal sites. U.S.Code Cong. & Admin.News 1980, at 6119, 6125; State of New York v. Shore Realty Corp., 759 F.2d 1032, 1040 (2d Cir.1985) (quoting F. Anderson, D. Mandelker, & A. Tarlock, Environmental Protection: Law and Policy 568 (1984)). Necessarily it was the product of many compromises. Shore Realty, 759 F.2d at 1040. Section 107 could have, but did not, explicitly provide for the problem of the release of asbestos fibers from materials that are part of the structure of a building.
The legislative history shows that Congress intended just what CERCLA provides on its face. Id.
CERCLA directly addresses the issue of removal of substances which are part of the structure of buildings in only one place: section 104(a)(3)(B) limits the authority of the President to respond "to a release or threat of release ... from products which are part of the structure of, and result in exposure within, residential buildings or business or community structures."
Stevens Creek argues that since section 104(a)(3)(B) limits only governmental authority to respond to the presence of asbestos in the structure of a building, by inference, Congress intended that private parties would be able to recover under section 107(a). By the same token, it contends, the exception to the limitation provided in section 104(a)(4) that permits the President to act only if "no other person" is able to respond to a release or threatened release makes sense only if private parties are permitted to respond to these situations even if the federal government usually cannot.
We disagree. Congress has effectively precluded private party response actions through its "disposal" requirement in sections 107(a)(2) and (4). Even apart from this, there is no basis for inferring Congress' intent to create such a far-reaching private cause of action under section 107(a).
The only discussion of asbestos removal in the legislative history of CERCLA occurred during consideration of the Superfund
S.Rep. No. 11, 99th Cong., 1st Sess. 16-17 (1985), reprinted in 1986 U.S.Code Cong. & Admin.News 2835.
A similar provision limiting response to releases of materials used in the structure of buildings appeared in § 117 of H.R. 2817, a bill passed by the House of Representatives on December 20, 1985. See Cooke, The Law of Hazardous Waste — Management, Cleanup, Liability and Litigation § 12.04[e] at 12-68 (1988); see also H.R.Rep. No. 253, 99th Cong., 1st Sess. 91, reprinted in 1986 U.S.Code Cong. & Admin.News 2835, 2873. After the bills were resolved in conference, the Conference Report discussed the limitation in terms specific to the President and to Section 104:
2.Conf.Rep. No. 962, 99th Cong., 2d Sess. (Joint Explanatory Statement of Conference Committee) 190 (1986); reprinted in 1986 U.S.Code Cong. & Admin.News 3276. As the committee report also indicated, the committee adopted the exact language of § 112(b) of Senate Bill S. 51, without indicating that it intended to modify the original meaning in any way. Id.
Whether or not Senate Report No. 11 is an authoritative guide to the legislative intent underlying this section,
To recognize a private cause of action under Section 107(a)(2) for the voluntary removal of asbestos from a commercial building would have substantial and far-reaching legal, financial, and practical consequences. As the Fourth Circuit has observed:
First United Methodist Church, 882 F.2d at 869 (citation and footnote omitted). Accord Retirement Community Developers v. Merine, 713 F.Supp. 153, 158 (D.Md.1989).
PREGERSON, Circuit Judge, dissenting:
I dissent. The majority's opinion is based on a numbing, highly technical analysis of CERCLA definitions and provisions. "CERCLA is essentially a remedial statute designed by Congress to protect and preserve public health and the environment." Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805 F.2d 1074, 1081 (1st Cir.1986). Congress enacted CERCLA "to provide a comprehensive response to the problem of hazardous substance release." Wickland Oil Terminals v. Asarco, Inc., 792 F.2d 887, 890 (9th Cir.1986). The purposes underlying this remedial statute should not be frustrated by the narrow interpretations inflicted on it by the majority opinion.
CERCLA provides several complementary mechanisms to effectuate hazardous substance removal.
Section 107(a)(2) remedies apply only to a narrow private class of property owners who may be held responsible for the effects of a hazardous substance they caused to be placed on their property and failed to remove when they later sold the property. As argued by the United States in its amicus brief, the government has an interest in encouraging private parties to respond to releases of hazardous substances, because
I cannot agree that Congress "effectively precluded private party response actions through its `disposal' requirement." Majority opinion at 12527.
The widespread use of asbestos in private building structures presents an extensive problem for which there is no common law remedy.
Underlying the majority's refusal to recognize section 107(a)(2) private actions in the context of asbestos removal from private structures is the argument that there is no case law to support the action. Given that this is an issue of first impression in the circuits, and one not at all settled among the district courts, this argument carries little water. If recent cases are any example, neither the courts nor the litigants are clear about how to proceed when private structure asbestos clean up issues arise under CERCLA. Some of the cases are brought under common law tort and property theories, using CERCLA language as a guide to liability. See, e.g., First United Methodist Church v. United States Gypsum Co., 882 F.2d 862 (4th Cir.1989), cert. denied, ___ U.S. ___, 110 S.Ct. 1113, 107 L.Ed.2d 1020 (1990); Elec. Power Bd. v. Westinghouse Elec. Corp., 716 F.Supp. 1069 (E.D.Tenn.1988). Others merely announce a CERCLA private cause of action as one of several claims against a potentially liable defendant. See, e.g., Mercer Univ. v. Nat'l Gypsum Co., 258 Ga. 365, 368 S.E.2d 732 (1988).
Finally, the majority's concern that a finding of private liability under section 107(a)(2) would cause far-reaching financial and practical problems is misplaced. The extensive use of asbestos materials in commercial properties has already had a "profound, continuing economic impact on the real estate industry." 19 Env't Rep. (BNA) 1154 (Oct. 7, 1988) (remarks of H.L. Van Varick, executive vice president of the American Savings Bank of New York City to Senate Environment and Public Works Subcommittee on Hazardous Wastes and Toxic Substances). "Asbestos is a deal killer." 19 Env't Rep. (BNA) 1664 (Dec. 16, 1988) (remarks of Robert Andre of the Seattle law firm of Ogden, Ogden, Murphy & Wallace). Recognition of an effective, statutory remedy for dealing with asbestos clean-up costs in private structures could at least give the parties to a real estate transaction a tool for apportioning clean up responsibilities.
I believe section 107(a)(2) creates a private cause of action in certain situations for the recovery of clean up costs of asbestos installed in the structure of private buildings. The issue whether 3550 Stevens Creek Associates has satisfied the requirements of the section and can prevail in the private action should be remanded to the district court.
"Remove" and "removal" are defined at Section 101(23) of CERCLA, 42 U.S.C. § 9601(23):
Section 1004 of the Solid Waste Disposal Act, 42 U.S.C. § 6903, provides, in pertinent part:
The United States, appearing as Amicus Curiae, urges us to take the opposite view, and conclude that section 104(a) limits only the federal government's ability to respond.
Even though as a general matter, "[t]he interpretation of an agency charged with the administration of a statute is entitled to substantial deference, if it is a sensible reading of the statutory language, ... and if it is not inconsistent with the legislative history," Lawrence Co. v. Lead-Deadwood School Dist., 469 U.S. 256, 262, 105 S.Ct. 695, 83 L.Ed.2d 635 (1985), we feel no such obligation in this case. As counsel for Amicus conceded during argument, the EPA has not formulated an official interpretation of section 107(a)(2)(B) as it applies to the removal of asbestos from the structure of a commercial building. The litigation arguments of the United States in its amicus brief, which lists an EPA lawyer as "of counsel," are not an "agency interpretation" of CERCLA such as to invoke the customary rule of deference.
In any event we believe it is unnecessary for us to decide whether section 104(a)(3)(B) is a limitation on private parties as well as the government. We simply consider it along with all other relevant legislative history.
Because of the health risks presented by the release of asbestos fibers into the environment, the EPA has for the first time used its authority under section 6 of the Toxic Substances Control Act to place a comprehensive ban on a dangerous substance. See 20 Env't Rep. (BNA) 534 (July 14, 1989) (reporting EPA Administrator William K. Reilly's remarks at a press conference announcing the ban) (emphasis added). Determining that "piecemeal control of the risks [presented by airborne asbestos fibers] is not satisfactory; only elimination of asbestos to the extent feasible will produce acceptable reduction of risks," 51 Fed.Reg. 3738, the EPA has issued a rule which will prohibit the manufacture and distribution of asbestos in this country for 94% of present asbestos product uses by 1996. 20 Env't Rep. (BNA) 534 (July 14, 1989); see 40 C.F.R. Part 763.