977 F.3d 750
9th Cir.2020Background
- Lava Cap Mine (Nevada County, CA) produced arsenic-laden mill tailings; two log dams held tailings. Dam deterioration and collapses (1979 partial, 1997 catastrophic) released contaminated material and groundwater, prompting EPA/CA DTSC cleanup and 1999 Superfund designation.
- EPA/DTSC implemented multi-unit response; OU2 interim remedy was a pipeline connecting homes to uncontaminated municipal water (approx. $3.795M for pipeline; total response costs > $32M).
- United States and California DTSC sued Sterling Centrecorp and successor landowner(s) under CERCLA to recover response costs; Sterling counterclaimed that the U.S. was liable as a prior "operator" because of War Production Board Limitation Order L–208 (1942), which ordered gold mines to cease operations except minimal maintenance.
- District court bifurcated liability/damages, held a bench trial: found Sterling liable under CERCLA as operator (and alternative successor/assumption theories); on summary judgment it held the U.S. not liable as an operator under L–208 and upheld EPA's interim remedy as not arbitrary and capricious.
- Ninth Circuit affirmed: Sterling liable; United States not liable as a prior operator based on Order L–208; EPA’s pipeline remedy was reasonable, cost‑effective, and consistent with the NCP, so full response costs were recoverable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Sterling is a CERCLA "operator" of the Site | Sterling (as successor/parent) exercised pervasive control and directly managed environmental response after the 1979 collapse (via Sterling official Gilbert), so is liable as an operator | Sterling denied operator status; contested personal jurisdiction and scope of control | Affirmed: factual record shows Sterling directed operations related to pollution; liable as a prior operator (also viable successor/assumption theories) |
| Whether the U.S. is a CERCLA "operator" due to War Production Board Order L–208 | Sterling: L–208 effectively directed/shut down mining and prohibited removal of ore/waste, thus the U.S. directed operations related to pollution and is an operator | U.S./Plaintiffs: L–208 merely ordered general cessation of mining; it did not manage, direct, or conduct pollution‑related operations or disposal and left maintenance exceptions in place | Affirmed for U.S.: issuance of L–208 alone insufficient to show management/directing of pollution‑related operations; U.S. not liable as prior operator |
| Whether EPA’s interim remedy (pipeline) was arbitrary and capricious or inconsistent with NCP | Sterling: pipeline failed its primary objective and point‑of‑use wellhead treatment was a cheaper, adequate alternative (agency misweighed criteria) | Plaintiffs/EPA: EPA reasonably evaluated alternatives, found pipeline more protective and permanently removed exposure pathway; selection was cost‑effective under NCP | Affirmed: agency decision was rational, based on record, and consistent with NCP; costs recoverable |
| Recoverability of full response costs under CERCLA/NCP | Plaintiffs: costs incurred are presumptively NCP‑consistent once prima facie case made | Sterling: EPA remedy/costs were not NCP‑consistent and therefore not fully recoverable | Affirmed: presumption stands; Sterling failed to rebut; judgment for full response costs (~$32M) against Sterling/Elder |
Key Cases Cited
- United States v. Bestfoods, 524 U.S. 51 (U.S. 1998) (defines "operator" as one who manages, directs, or conducts pollution‑related operations)
- United States v. Central Eureka Mining Co., 357 U.S. 155 (U.S. 1958) (background on War Production Board orders restricting gold‑mine operations during WWII)
- Carson Harbor Vill., Ltd. v. Unocal Corp., 270 F.3d 863 (9th Cir. 2001) (CERCLA remedial goals and interpretive principles)
- Cose v. Getty Oil Co., 4 F.3d 700 (9th Cir. 1993) (elements of CERCLA liability framework)
- Long Beach Unified Sch. Dist. v. Dorothy B. Godwin Cal. Living Tr., 32 F.3d 1364 (9th Cir. 1994) (operator status requires active role beyond mere failure to prevent contamination)
- United States v. Shell Oil Co., 294 F.3d 1045 (9th Cir. 2002) (government capacity/prerogative does not categorically shield from CERCLA operator analysis)
- Tosco Corp. v. Koch Indus., Inc., 216 F.3d 886 (10th Cir. 2000) (operator liability may be inferred from totality of circumstances)
- PPG Indus. Inc. v. United States, 957 F.3d 395 (3d Cir. 2020) (distinguishes mere governmental knowledge from active undertaking of polluting operations)