In re Grand Pier Center, L.L.C.
Grand Pier Center, LLC (Grand Pier) seeks reimbursement pursuant to section 106(b)(2)(A) and (C) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of approximately $200,000, which is a portion of the amount Grand Pier expended in complying with a unilateral administrative order issued by the United States Environmental Protection Agency, Region 5 (the Region). CERCLA section 106(b)(2) provides, among other things, that reimbursement shall be granted when the petitioner establishes by a preponderance of the evidence that it is not liable under section 107(a) for response costs. CERCLA section 107(a)(1) states that an "owner" of a "facility" is liable for response costs incurred in responding to a release of a hazardous substance.
Grand Pier argues that it is not liable under section 107(a)(1) for the response costs at issue on the grounds that it does not own the property where the costs were incurred. The costs at issue were incurred in removing thorium radionuclide contamination from property that the parties refer to as the "off-site sidewalk area," which is a parcel adjacent to property that Grand Pier acknowledges it owns--the Grand Pier Site--and for which Grand Pier admits it is liable for costs incurred in complying with the Region's order. Further, Grand Pier agrees that the Grand Pier Site and the offsite sidewalk area are contiguous properties that were contaminated by the same past industrial operation.
The Region argues that Grand Pier is liable under CERCLA section 107(a) for costs incurred throughout the "facility," including costs of responding to thorium contamination at the off-site sidewalk area. Specifically, the Region argues that the"facility" at issue in this case is demarcated by where the thorium contamination has come to be located, which includes both Grand Pier's property and the adjacent off-site sidewalk area.
Held: the Board concludes that Grand Pier failed to sustain its burden of proof under CERCLA section 106(a) that it is not liable as a present owner under section 107(a) for all response costs associated with the relevant CERCLA "facility."
The statutory language provides that the "owner" of a "facility" shall be liable for response costs. Identification of the CERCLA facility is necessary to give meaning to all words in the statutory text, and the relevant case law contemplates identification of the facility as the first element of the analysis. The statute's broad "facility" definition, which is predicated on where the contamination has come to be located, as interpreted in a long line of federal court and Board decisions, compels the Board's conclusion that the relevant CERCLA "facility" in this case consists of both the Grand Pier Site and the adjacent off-site sidewalk area. Nothing in the statute or case law supports Grand Pier's contention that the "facility" must be defined by or be coextensive with an owner's property lines.
Grand Pier admitted ownership of the Grand Pier Site establishes that Grand Pier is liable under CERCLA section 107(a) for response costs incurred at the facility as one of the present owners of that facility. Whether a person has the status of "owner" must typically be determined by reference to the ordinary meaning of the term "owner," which in the case of real property must look to legal or equitable title and related concepts of state property law. Once status as an owner, and hence liability under section 107(a), is established, the extent of that liability is determined under CERCLA, not under state property law. All persons liable under any of the four section 107(a) categories are generally jointly and severally liable for response costs. In particular, owners of only part of the facility are generally jointly and severally liable for all response costs associated with the facility.
In the present case, the CERCLA facility is not limited to Grand Pier's property boundary, but instead is demarcated by where the thorium contamination has come to be located. Grand Pier does not dispute that thorium contamination attributable to a prior industrial operation is found throughout the area the Region demarcated as the "facility" at issue. Grand Pier admits that it owns the Grand Pier Site, which constitutes a significant portion of the contaminated area. Accordingly, under the prevailing case law, Grand Pier's argument that its liability is limited to the boundaries of its property must be rejected, and instead the Board holds that Grand Pier is jointly and severally liable under CERCLA section 107(a)(1) for the response costs incurred at the facility, which includes both the Grand Pier Site and the off-site sidewalk area. Grand Pier has not argued that the harm presented by the thorium contamination at the facility is susceptible to division as a possible exception to joint and several liability. For these reasons, Grand Pier has failed to sustain its burden of proof that it is entitled to recover any portion of its response costs incurred in cleaning up the CERCLA facility.