Cadillac Fairview/California, Inc. v. Dow Chemical Company

Nos. 83-7996-LTL(Bx), -8034-LTL(Bx) (C.D. Cal. August 29, 1984)

The court reaffirms, in denying a motion for reconsideration, its prior holding that no private cause of action is available under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) to recover privately incurred response costs absent prior action under CERCLA. This governmental action may be, but need not be, the listing of the site on the national priorities list.

[The original district court opinion in this case appears at 14 ELR 20376.]

Counsel are listed at 14 ELR 20376.

[14 ELR 20716]

Lydick, J.:

Order

This matter is before the Court on the following motions:

1) The motion of plaintiff for reconsideration of the Court's order of March 5, 1984;

2) The motion of plaintiff for leave to amend the complaint;

3) The motion of the GSA, EPA, and the United States ("federal defendants") for summary judgment on the complaint;

4) The motion of defendant Dow Chemical Co. to dismiss the cross-claim of the federal defendants; and

5) The motion of defendant Shell Oil Co. to dismiss the cross-claim of the federal defendants.

We turn first to the motion to reconsider the Court's March 5, 1984 ruling dismissing the complaint as to defendants Shell Oil Co., Dow Chemical Co., and Cabot, Cabot & Forbes Interim [14 ELR 20717] Co., because the parties agree that resolution of this motion against plaintiff will determine the result of the remaining motions.

Local Rule 7.16 governs the motion for reconsideration. Plaintiff invokes the second ground, arguing the emergence of new material facts and a change of law occurring after the time of decision.

The legal change asserted is a policy announcement by the Environmental Protection Agency, the executive body charged with the administration of the Comprehensive Environmental Compensation and Liability Act ("CERCLA") at issue here. Plaintiff asserts that the EPA now takes the position that a private cause of action exists under 42 U.S.C. § 9607 despite the fact the subject site has not been placed on the National Priorities List and no governmental action has been taken to force a party to remove or contain waste on the site. The Court held to the contrary in the dismissal order, holding that a private cause of action, to be "consistent with the national contingency plan" as required by § 9607(a)(4)(B), must be undertaken in response to governmental action to remedy the problem.¹

As a prefatory note, the interpretation given CERCLA by the EPA, the agency charged with its administration, must be given great deference. Hawaiian Electric Co. v. United States EPA, 723 F.2d 1440, 1447 [14 ELR 20328] (9th Cir. 1984). However, this deference only sets the framework of judicial analysis; it does not displace it. Bolton v. Commissioner of Internal Revenue, 694 F.2d 556, 560 (9th Cir. 1982). The Court may not relinquish its duty to conduct an independent analysis of the statute.United Church of Christ v. FCC, 707 F.2d 1413, 1424 (D.C. Cir. 1983). Fortunately, there is no need to decide what degree of deference is necessary, because there is no conflict between the interpretation of the EPA and that of the Court.

The change in law cited has two pieces of evidence which allegedly support it. The first is 49 Fed. Reg. 19480 (May 8, 1984). The EPA, in amending the National Priorities List to include four areas in San Gabriel, California, included some standard language which has been seized upon by the plaintiff to bolster its position. This passage reads: 'Inclusion of a site on the NPL is not necessary for other types of response actions such as removal actions or enforcement actions." 49 Fed. Reg. at 19481. This is certainly true enough, but the removal and enforcement actions must be initiated and coordinated by a government entity, and not by a private individual acting alone. 42 U.S.C. §§ 9604-9696; 40 C.F.R. §§ 300.61-300.68. 49 Fed. Reg. 19480 does not have anything to do with private causes of action under § 9607 and in no way can be read to be an official policy pronouncement on this topic.

The second piece of supporting evidence is the statement by the federal defendants in their motion for summary judgment indicating that the EPA does not agree with the Court's earlier ruling. "EPA's position is that nothing in the NCP prohibitis private parties from bringing actions under CERCLA § 107(a)(4)(B), 42 U.S.C. § 9607(a)(4)(B) with respect to sites not on the NPL." (Memo at p.25, n.9). As noted by defendants, this is merely a gratuitous statement by a litigant, not an interpretation by the EPA. Nor is this at odds with the Court's prior ruling. It was held that a private litigant may not bring a cause of action for damages under CERCLA unless there had been some prior governmental action. Usually this takes the form of listing the site on the NPL for further study as a preliminary to any clean up. It could also take the form of a "lead agency" initiating the clean up, holding the party liable for costs, and then permitting that party to seek damages against others. 40 C.F.R. § 300.68(c) et seq. To have a private cause of action, there must be some governmental action preceding the private suit. No party has offered any authority to the contrary. Even Bulk Distribution Centers, Inc., supra, cited by the federal defendants as authority contra to this Court's holding, reaches this same result, albeit by seizing on the phrase "other response costs" in § 9607(a)(4)(B), which it reads as requiring initial government response costs. Slip. op. at 18.

In its response to the motion, the EPA, while taking no position, disagrees with the Court's holding. Its reasoning is based on a strained reading of 40 C.F.R. § 300.68. Subsections (a) and (b) are ignored, and (c) is emphasized because it provides that "[a]s an alternative or in addition to Fund-financed remedial action, the lead agency may seek, through voluntary agreement or administrative or judicial process, to have those persons responsible for the release clean up in a manner that effectively mitigates and minimizes damage to, and provides adequate protection of, public health, welfare, and the environment." (Emphasis added). Subsection (a) provides in part that [r]emedial actions taken pursuant to this section (other than responses at Federal facilities) are those responses to releases on the National Priorities List that are consistent with permanent remedy . . ." Even if this requirement is ignored, however, subsection (c) clearly places the onus on the lead agency. It does not mention any ability of a private party to bring suit in the absence of any governmental action. This section in no way indicates that a private cause of action is possible in this circumstance.

On a related point, the EPA argues that the expenses incurred to date by plaintiff are compensable under 42 U.S.C. § 9601(23) and (25) as response costs. However, this misses the point that a private cause of action must first be authorized by § 9607 before the question of compensable damages can be reached. Finally, this is not a situation governed by the Supreme Court's opinion in Chevron USA, Inc. v. National Resource Defense Council, Inc., 52 USLW 4845 [14 ELR 20507] (June 25, 1984) because the relevant statute is not silent or ambiguous.

Plaintiff also relies on two changes in factual circumstances. The first is that it has incurred additional expense in conducting a site characterization study. This argument was previously rejected since there is as yet no private cause of action. Additional expenditures along the same lines are merely differences in degree and not in kind.

The second change alleged is the determination of the California DHS to conduct a feasibility study to obtain proposals for waste removal. Plaintiff has been told by the DHS that the "potentially responsible parties [should] consider funding the feasibility study as well as the implementation of the remedial action selected by the Department" and that if such parties fail to fund the study, "the Department would take whatever action necessary to complete the feasibility study and implement the remedial action selected." (Declaration of Joel S. Moskowitz, Exhibit "A" to Plaintiff's Motion to Amend, p.4, lines 16-21). In characterizing this in the proposed amended complaint, the plaintiff alleges that the DHS intends to "force one or more of these alleged 'responsible parties' [plaintiff, Dow, Shell, the GSA] to bear the full expense of the feasibility study." (P22). This situation is similar to that involved in D'Imperio v. United States, 575 F. Supp. 248 [14 ELR 20248] (D.N.J. 1983), where the Government sent plaintiffs a letter saying it was conducting a feasibility study and that the plaintiffs might be liable for the costs of clean up. That suit was held to be premature. Actions for recovery of costs should follow a partial or completed clean up operation. Bulk Distribution Centers, Inc., supra, slip. op. at 18.

In this case the plaintiff has not awaited government authorization of the clean up before bringing suit. The suit also is premature and there are not yet damages incurred "consistent with the national contingency plan" as required by 42 U.S.C. § 9607(a)(4)(B).

The motion for reconsideration is therefore denied.

We next consider the motion to amend. So far as the motion seeks to state a cause of action against the three defendants already dismissed from the suit, the motion is moot because the dismissal was without prejudice. As for the remainder of the motion, it is denied because, as plaintiff recognizes, it does not state a cause of action under the Court's undertanding of CERCLA.

As for the remaining motions, the motion of the federal defendants for summary judgment is granted. We note the plaintiff's consent to such a ruling in view of the previous rulings. The motions of Dow and Shell to dismiss the cross-claims of the federal defendants are granted for the same reasons.

The Clerk of the Court will serve copies of this Order by United States mail upon counsel of record.

1. The Court's order has been mischaracterized by the plaintiff and at least one other court, Bulk Distribution Centers, Inc. v. Monsanto Co., slip. op. (S.D. Fla. 1983), as requiring the site to appear on the National Priorities List. It has not been universally misunderstood. See 14 Environment Reporter 2097 (BNA) (March 23, 1984).