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Tosco Corp. v. Koch Indus., Inc.

Citation: 30 ELR 20554
No. No. 98-6209, 210 F.3d 1273/50 ERC 1509/(10th Cir., 05/02/2000)

The court affirms a district court decision holding the former owner of an abandoned refinery responsible under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for 15 percent of all past and future response costs and damages a subsequent owner incurred and will incur while investigating and remediating the site. The court first holds that the district court did not err in holding the former owner liable under CERCLA. Ample record evidence supports the district court's findings that the former owner disposed of hazardous waste at the refinery. The evidence also demonstrates a connection between the former owner's waste handling practices at the refinery and the resulting hazardous waste contamination. In addition, because hazardous wastes commingled with the petroleum products in the soil and floating on the groundwater beneath the refinery, the CERCLA petroleum exclusion is inapplicable. The court next holds that the district court did not abuse its discretion by allocating 15 percent of the total response costs to the former owner based on the former owner's relative duration of refinery ownership and control. The former owner claims it should be responsible for no more than 1.5 percent of the total response costs, but record evidence places the former owner's fair share in the range of 15 to 37 percent.

The court then holds that the district court did not err in holding the former owner liable for damages to the subsequent owner under Oklahoma public nuisance law. The former owner cites no legal authority or factual evidence supporting its claim that the presence of petroleum hydrocarbons in the groundwater under the refinery does not constitute a public nuisance. Further, the subsequent owner's nuisance claim is not barred by the two-year statute of limitations because although the limitations period is fixed for private nuisance claims, the limitations period is flexible for public nuisances. Additionally, the subsequent owner suffered a special injury sufficient to maintain a public nuisance action. The court also holds that the district court did not abuse its discretion by admitting the results of scientific tests that the subsequent owner concucted after the discovery cutoff that were not disclosed to the former owner until the eve of trial. These tests were conducted as part of the subsequent owner's ongoing remedial investigation and feasibility study at the refinery, and the former owner was aware several months in advance that the subsequent owner intended to present the test results at trial. Last, the court holds that the district court was not obligated to conduct a "fairness hearing" on the terms of a settlement entered into by the subsequent owner and a third party prior to determining the former owner's liability. The former owner cited no persuasive authority for this proposition and offered no evidence that the subsequent owner would enjoy a windfall.

Counsel for Plaintiff
John J. Lyons
Latham & Watkins
633 W. 5th St., Los Angeles CA 90071
(213) 485-1234

Counsel for Defendant
J. Kory Parkhurst
Koch Industries, Inc.
4111 E. 37th St. N., Wichita KS 67220
(316) 828-5500

J. William Conger
Hartzog, Conger & Cason
201 Robert South Kerr Ave., Ste. 1600, Oklahoma City OK 73102
(405) 235-7000

Before McWilliams and Henry, JJ.