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Los Angeles v. San Pedro Boat Works

ELR Citation: 41 ELR 20117
Nos. No. 08-56163, (9th Cir., 03/14/2011)

The Ninth Circuit held that the holder of a revocable permit to use real property is not an "owner" of that real property for purposes of imposing liability under CERCLA for the cleanup of hazardous substances disposed on that property by others. Under California common law, the holder of a revocable permit has only a possessory interest in the real property governed by the permit—an interest that exists as a result of possession, exclusive use, or a right to possession or exclusive use of land unaccompanied by the ownership of a fee simple or life estate in the property. Given this common law distinction between ownership interests and possessory interests, and the juxtaposition of "owner" and "operator" in CERCLA, the court concluded that Congress intended to give "owner" its common law meaning when it enacted CERCLA. Accordingly, owner liability under CERCLA does not extend to holders of mere possessory interests in land, such as permittees, easement holders, or licensees, whose possessory interests have been conveyed to them by the owners of real property who continue to retain power to control the permittees' use of the real property.