James KOTROUS, Individually and doing Business as the Mattress Factory v. GOSS-JEWETT COMPANY OF NORTHERN CALIFORNIA, Inc.; et al.; Bayer CropScience, Inc.; Edward Anselmo; Adobe Lumber, Inc., v. F. Warren Hellman; Wells Fargo Bank NA, as Trustees of Trust A created by the Estate of Marco Hellman
Nos. 06-15162, 06-16019
United States Court of Appeals, Ninth Circuit
April 17, 2008
523 F.3d 924
Argued and Submitted Oct. 18, 2007.
John D. Edgcomb and William D. Marsh, Edgcomb Law Group, San Francisco, CA, for defendant-appellant Bayer CropScience, Inc.
Jeffory J. Scharff, Sacramento, CA, for defendant-appellee Edward Anselmo.
Howard L. Pearlman, Glenn P. Zwang, Robert L. Wainess, Bartko, Zankel, Tarrant & Miller, San Francisco, CA, for plaintiff-appellee Adobe Lumber, Inc.
Thomas M. Donnelly, Heller Ehrman LLP, San Francisco, CA, for defendants-appellants F. Warren Hellman and Wells Fargo Bank, N.A.
Appeal from the United States District Court for the Eastern District of California; Frank C. Damrell, William B. Shubb, District Judges, Presiding. D.C. Nos. CV 02-1520 FCD, CV 05-1510 WBS.
Before: ALEX KOZINSKI, Chief Judge, A. WALLACE TASHIMA, and M. MARGARET McKEOWN, Circuit Judges.
TASHIMA, Circuit Judge:
We are required to consider the continued viability of Pinal Creek Group v. Newmont Mining Corp., 118 F.3d 1298 (9th Cir. 1997), in light of the Supreme Court‘s most recent precedent addressing the Comprehensive Environmental Response, Compensation, and Liability Act,
This opinion addresses two separate appeals, in separate actions, seeking recovery of costs associated with the clean-up of hazardous waste sites.1 In the first appeal, James Kotrous sued numerous defendants, including Bayer CropScience, Inc., seeking contribution under CERCLA for costs he had incurred in cleaning soil and groundwater contamination on land he owned. The district court denied Bayer‘s motion to dismiss Kotrous’ claim under CERCLA
In the second appeal, Adobe Lumber, Inc., the owner of contaminated land, sued the owners of a dry cleaning business run on the property, as well as prior landowners, chemical and equipment manufacturers, and the City of Woodland, for contribution for costs Adobe had incurred in dealing with the contamination. The district court denied the defendants’ motion to dismiss for failure to state a claim. Adobe Lumber, Inc. v. Hellman, 415 F.Supp.2d 1070 (E.D.Cal.2006). The district court subsequently certified its order for appeal. We agreed to hear both interlocutory appeals pursuant to
BACKGROUND2
I. Kotrous
Since October 1995, Kotrous has owned land in Sacramento, California, and operated a business called “The Mattress Factory” on the site. Prior to 1995, the land was owned by numerous defendants.
Goss-Jewett Company operated a dry cleaner supply business on the property from approximately 1970 to 1996. During that period, it stored and distributed the solvent perchloroethylene (“PCE“) and other hazardous substances. Defendant Stauffer Chemical Company and its successors, which includes Bayer, supplied the PCE. Stauffer accidentally released PCE into the soil and groundwater while making its deliveries, resulting in contamination of the property.
In February 2000, the California Regional Water Quality Control Board (“RWQCB“) sent Goss-Jewett a letter requesting that it prepare and submit a work plan for assessment of the site. Goss-Jewett refused to do so. In November 2001, the RWQCB issued a Cleanup and Abatement Order requiring Goss-Jewett to investigate and clean the soil and groundwater at the site. Kotrous was directed to conduct the work if Goss-Jewett failed to do so. When Goss-Jewett failed to act, Kotrous incurred costs performing site characterization and investigation, and identification and investigation of PRPs.
Bayer filed a motion for judgment on the pleadings, which the district court denied. After an unsuccessful motion for reconsideration, Bayer filed a motion for certification under
II. Adobe Lumber
Adobe is the owner of the Woodland Shopping Center in Woodland, California (the “Site“). Over the years, the Site has had a succession of owners: Marco Hellman owned the property from 1971 until his death in 1973; his estate (the “Hellman Estate“) owned the property from 1973 until 1976. F. Warren Hellman (“Hellman“), Marco‘s son, was the trustee of two trusts created by the Hellman Estate and owned the property from 1976 until 1979. As co-trustee to one of the trusts, Wells Fargo Bank also owned the site during that period. The shopping center was owned by various other owners until Adobe purchased the property in 1998.
Between 1974 and November 2001, all of the owners leased part of the property to Harold and Geraldine Taecker (the “Taeckers“), who owned and operated a dry cleaning facility on the property. The3 Taeckers used PCE, produced by several manufacturer-defendants, as a cleaner during that time. Throughout their dry cleaning operations, the Taeckers released and disposed of PCE on the Site. A faulty sewer line also caused discharge of PCE and resultant contamination of the Site.
In August 2001, Adobe voluntarily examined the Site to see whether the Taeckers’ long-time dry cleaning business had affected the soil and groundwater. After discovering elevated levels of chemical pollutants, Adobe reported the contamination to the RWQCB and the County Environmental Health Department. The RWQCB began working with the Taeckers and Adobe to create a work plan for the investigation of soil and groundwater contamination at the Site. During this process, Adobe incurred costs investigating the contamination at the Site.4 A variety of legal actions followed, culminating in this lawsuit.
Adobe filed suit in the district court alleging several federal claims, including claims under the Resource Conservation and Recovery Act,
STANDARDS OF REVIEW
The district court‘s interpretation of a statute is reviewed de novo. Pinal Creek, 118 F.3d at 1300. Similarly, the district court‘s grant of judgment on the pleadings is reviewed de novo. Ventress v. Japan Airlines, 486 F.3d 1111, 1114 (9th Cir.2007). “On review of a judgment on the pleadings, [t]he appellate court must accept all material allegations in the complaint as true and construe them in the light most favorable to [the non-moving party].” Deveraturda, 454 F.3d at 1046 (quoting Turner v. Cook, 362 F.3d 1219, 1225 (9th Cir.2004)) (alterations in original). The district court‘s dismissal for failure to state a claim is reviewed de novo. Pakootas v. Teck Cominco Metals, Ltd., 452 F.3d 1066, 1072 (9th Cir.2006), cert. denied, — U.S. —, 128 S.Ct. 858, 169 L.Ed.2d 722 (2008).
DISCUSSION
“CERCLA is a comprehensive statute that grants the President broad power to command government agencies and private parties to clean up hazardous waste sites.” Key Tronic Corp. v. United States, 511 U.S. 809, 814, 114 S.Ct. 1960, 128 L.Ed.2d 797 (1994). CERCLA
(A) all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe not inconsistent with the national contingency plan;
(B) any other necessary costs of response incurred by any other person consistent with the national contingency plan;
(C) damages for injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing such
injury, destruction, or loss resulting from such a release; and (D) the costs of any health assessment or health effects study carried out under section 9604(i) of this title.
“After CERCLA‘s enactment in 1980, litigation arose over whether ... a private party that had incurred response costs, but that had done so voluntarily and was not itself subject to suit, had a cause of action for cost recovery against other PRPs” under
Congress amended CERCLA in the Superfund Amendments and Reauthorization Act of 1986 (“SARA“), Pub.L. No. 99-499,
Any person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title, during or following any civil action under section 9606 of this title or under section 9607(a) of this title. Such claims shall be brought in accordance with this section and the Federal Rules of Civil Procedure, and shall be governed by Federal law. In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate. Nothing in this subsection shall diminish the right of any person to bring an action for contribution in the absence of a civil action under section 9606 of this title or section 9607 of this title.
In Pinal Creek, we held that
The plaintiff, Pinal Creek Group, was composed of three mining companies that had engaged in the voluntary cleanup of a hazardous waste site. It sought to recover the totality of its costs from other PRPs, asserting that the other PRPs would then be entitled to seek contribution from it (Pinal Creek) for its portion of the costs. Reasoning that the language of
We addressed CERCLA contribution again in Western Properties Service Corp. v. Shell Oil Co., 358 F.3d 678 (9th Cir.2004). Western Properties sought “recovery of response costs and contribution, under
Western Properties also answered a question not decided in Pinal Creek—whether a non-polluting PRP landowner may sue under
In December 2004, the Supreme Court decided Cooper, holding that “a private party who has not been sued under
Cooper involved sites in Texas that had been contaminated by both Aviall Services, Inc., and Cooper Industries, Inc. Aviall cleaned up the properties under the supervision of the State of Texas and subsequently sought contribution, pursuant to
The Court reasoned that allowing a contribution action at any time, “regardless of the existence of a
Aviall contended that, in the alternative to a contribution claim under
In Atlantic Research, the Supreme Court answered the first question left open in Cooper: “whether
The Court examined the structure of
A PRP cannot choose remedies, but must proceed under
The holding in Atlantic Research that a PRP may sue for cost recovery under
Under Atlantic Research, a PRP such as Kotrous or Adobe that incurs costs voluntarily, without having been subject to an action under
Applying Atlantic Research to Kotrous’ claims, the first claim in Kotrous’ complaint sought recovery of his response costs pursuant to
The district court noted the Supreme Court‘s skepticism regarding the implied right to contribution, see Cooper, 543 U.S. at 162, 125 S.Ct. 577, but reasoned that the Court had not overruled the cases recognizing an implicit right to contribution. Because Kotrous had invoked
Although the district court correctly interpreted our precedent as it existed at the time, Atlantic Research has changed the state of the law. The Supreme Court has made it clear that a PRP who has not been subject to a
Turning next to Adobe‘s claims, Adobe‘s complaint sought contribution “for all or a portion of” its response costs pursuant to
CONCLUSION
Atlantic Research overruled our holding in Pinal Creek that an action between PRPs is necessarily for contribution. Under Atlantic Research, Kotrous and Adobe are entitled to bring a claim for recovery of costs under
In each of these appeals, the judgment of the district court is vacated and the case remanded for further proceedings. Each party shall bear its own costs on appeal.
VACATED and REMANDED.
