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Tanglewood E. Homeowners v. Charles-Thomas, Inc.

ELR Citation: 18 ELR 21348
Nos. No. 87-6097, 849 F.2d 1568/28 ERC 1260/(5th Cir., 07/28/1988)

The court holds that companies involved in the development of a subdivision contaminated with hazardous wastes prior to the subdivision's construction may be held liable for response costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), and that the Resource Conservation and Recovery Act (RCRA) allows subdivision property owners to file a claim for injunctive relief based on past or present conduct. The court first holds that the lending institution, developers, construction companies, and realtors are covered persons within the meaning of CERCLA §107(a). The court rules that §107(a)(1) applies to current owners of contaminated sites, and not just to the past owner responsible for disposing the waste at the site. The Tanglewood East subdivision clearly is a covered facility under CERCLA, since hazardous substances have been deposited there, and a lending institution was found to be a current owner and operator in United States v. Maryland Bank & Trust Co., 16 ELR 20557. Moreover, it is not necessary for CERCLA liability that a person have both owned and operated the facility. The court rules that "disposal" within the meaning of CERCLA §107(a)(2) can include activities, subsequent to the original disposal, in which the wastes are moved or released in landfill excavations or fillings. The court holds that "treatment" within the meaning of CERCLA §§107(a)(3) and (4) can include the filling and grading of the site's preexisting creosote pools to render the wastes nonhazardous. The court holds that defendants have not demonstrated for the purposes of a motion to dismiss that CERCLA covers only persons actually engaged in the chemical and hazardous materials industry.

The court holds that the same conclusions apply to the property owners' RCRA citizen suit claim, since RCRA's statutory definitions are the same as CERCLA's. The court also declines to dismiss the claim because of actions taken by the Environmental Protection Agency (EPA). Although EPA has completed a remedial investigation/feasibility study at the subdivision, the correctness of EPA's methodology or its diligence in cleanup efforts are unresolved factual issues. Moreover, RCRA §7002 does not bar claims against permit violators, and the applicability of RCRA's permit requirements also remains unresolved. The court rules that government approval is not a prerequisiite for a private CERCLA cost recovery action. EPA has indicated that no such approval is required in the preamble to the rules amending the National Contingency Plan, and there is no mechanism or procedure by which a private party could seek approval of a cleanup program. The court holds that the property owners' relocation, investigatory, and dike construction costs are recoverable response costs. The court holds that RCRA §7002 allows for injunctive relief for both past and present conduct, and that the property owners are not required to demonstrate the likelihood of their success or that they will suffer irreparable injury since they are requesting a permanent, rather than a preliminary, injunction.

Counsel for Plaintiff-Appellee
Tobi A. Taylor, Mark J. Airola
Royston, Rayzor, Vickery & Williams
2200 Texas Commerce Tower, Houston TX 77002
(713) 224-8380

Counsel for Defendants-Appellants
Craig D. Ball, Timothy F. Lee
Schmidt & Matthews
1000 Louisiana St., Suite 2140, Houston TX 77002
(713) 651-1133