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California v. Celtor Chem. Corp.

ELR Citation: 26 ELR 20480
Nos. No. C93-0642 FMS, 901 F. Supp. 1481/(N.D. Cal., 02/21/1995)

The court holds that a material issue of fact precluding summary judgment exists as to whether the president of a chemical corporation is an "operator" liable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and the California Hazardous Substance Account Act (HSAA) for cleanup costs incurred at a site within the boundaries of a Native American reservation. California brought an action against the corporation and its president under CERCLA and HSAA seeking to recover cleanup costs for contamination on a parcel of land lying within a Native American reservation that occurred during the corporation's operation of an ore processing plant. The court first holds that the corporate officer is an "operator" and liable under CERCLA and HSAA if he has the authority to control the cause of the contamination at the time the hazardous substances were released. During the entire period that the corporation operated the contaminated site, its president acted as the corporation's president, sat on its board of directors, and frequently visited the site. In previous unrelated hearings, the president made statements indicating that he exercised a high degree of control and played a primary role in managing the site. The court holds that a reasonable juror could find that the president had the authority to control the day-to-day operations at the site and, accordingly, finds that a genuine issue of material fact exists as to whether the president is liable as an "operator."

The court next finds, in relation to the statute of limitations, that the government's cleanup action consists of two phases. The first constitutes a "removal action," which began in January 1983 when the state took soil samples, and ended in September 1985 when the U.S. Environmental Protection Agency (EPA) signed the record of decision. The court holds that all of the cleanup activities that took place within this period constitute a single removal action. The second phase constitutes a "remedial action," which began in October 1987 when the on-site cleanup activities started for a second time. The court next holds that the state's action to recover the costs of the remedial action is not time barred, because the statute of limitations to recover these costs ran in October 1993, and the action was filed in February 1993. The court holds that the state's claim for its removal action costs is also not time barred. The statute of limitations for those costs ran in September 1988. The state can recover these costs under CERCLA §113(g)(2)(B) if the remedial action is initiated within three years after the completion of the removal action. The removal action ended in September 1985, and the remedial action began less than three years later. The court then holds that the state's action under the HSAA is also not barred by the statute of limitations. The HSAA provides the same statute of limitations for the recovery of costs of removal actions and remedial actions, and the state filed its action less than three years after the remedial action was certified.

The court also holds that the state's oversight costs are recoverable under CERCLA because such costs fall within the statutory definitions of removal and remedial costs. Because CERCLA requires that liable parties pay all costs of removal or remedial actions incurred by a state and then mandates that the state be intimately involved with EPA's decisions, the court concludes that the state's oversight costs are necessary to make these decisions. The court further holds that CERCLA has not preempted the state's claim under the HSAA because the president does not assert that the state's participation was incompatible with federal regulation under CERCLA, or that tribal sovereignty is infringed by this participation. Moreover, the president failed to assert any inconsistencies between the HSAA and either CERCLA or tribal interests as reflected in federal law, and the state's prayer for relief under the HSAA is based on the same factors and is for the same amount as its prayer for relief under CERCLA.

Counsel for Plaintiffs
Daniel E. Lungren, Attorney General
Attorney General's Office
455 Golden Gate Ave., Ste. 6200, San Francisco CA 94102
(916) 703-1985

Counsel for Defendants
Kenneth E. Keller
Bronson, Bronson & McKinnon
505 Montgomery St., San Francisco CA 94111
(415) 986-4200