808 F.3d 342
8th Cir.2015Background
- Dico owned several DES Moines buildings subject to an EPA order for PCB contamination and related conditions.
- Without informing EPA, Dico sold the buildings through Titan Tire to SIM; SIM dismantled them and stored materials in an open area where PCBs were later found.
- The government sued under CERCLA for arranger liability and alleged violation of the EPA order; the district court granted summary judgment on liability and damages.
- EPA had issued a 1994 order requiring removal, encapsulation, and ongoing maintenance of PCB-contaminated insulation; a 1997 report acknowledged some PCBs remained and EPA approved but kept obligations.
- Dico sold Buildings 4–5 and part of other structures to SIM in 2007 for nominal consideration; SIM dismantled, leaving beams and insulation, with PCBs detected in beams and soil.
- The court reversed on arranger liability under CERCLA and punitive damages, but affirmed EPA-order violations and civil penalties, with remand for certain cost-related determinations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Dico arranged disposal under CERCLA | Dico arranged disposal by selling PCB-containing buildings to SIM. | Knowledge of disposal or useful-product sale does not prove arrangement; intent required. | Not as a matter of law; fact-intensive; reverse summary judgment on arranger liability. |
| Whether EPA Order violation is a continuing violation | Disassembly and ongoing failure to maintain encapsulation constitute ongoing violations. | Violations were isolated events. | Continuing violation; civil penalties affirmed. |
| Whether punitive damages were proper based on cleanup costs | Fund incurred costs due to Dico’s violation of the EPA order. | Fund’s costs arose from SIM cleanup, not directly from Dico’s violation. | Punitive damages vacated and remanded; costs did not arise 'as a result of' the violation. |
| Whether civil penalties were properly calculated and imposed | Dico willfully violated the EPA order for 162 days. | Penalties should be limited to days of actual, provable violation with proper basis. | Civil penalties affirmed. |
Key Cases Cited
- Burlington N. & Santa Fe Ry. Co. v. United States, 556 U.S. 599 (Supreme Court 2009) (arranger liability requires more than knowledge of disposal; fact-intensive inquiry)
- Team Enters., LLC v. W. Inv. Real Estate Trust, 647 F.3d 901 (9th Cir. 2011) (knowledge of disposal insufficient; requires intent/meaningful arrangement)
- Consol. Coal Co. v. Ga. Power Co., 781 F.3d 129 (4th Cir. 2015) (multi-factor test for arranger liability; considers value, usefulness, state of product)
- Gen. Elec. Co. v. Gen. Elec. Co., 670 F.3d 377 (1st Cir. 2012) (evidence of profit vs. disposal costs relevant to intent toward disposal)
- NCR Corp. v. George A. Whiting Paper Co., 768 F.3d 682 (7th Cir. 2014) (multi-factor approach to arranger liability; highlights limits of control loss)