14 ELR 20895 | Environmental Law Reporter | copyright © 1984 | All rights reserved


United States v. South Carolina Recycling and Disposal, Inc.

No. 80-1274-6 (D.S.C. August 28, 1984)

The court rules that a corporation involved in ongoing hazardous substance disposal over a period of years in various ways, including through the disposal activities of one of its officers, and through its leasehold interest in the land on which disposal occurred, and later its sublease to a related disposal company, is liable as an owner and operator of a disposal site under § 107 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The court notes that defendant Columbia Organic Chemical Company (COCC) is a "person" and the disposal site a "facility" at which hazardous substances were "disposed" and "released" under CERCLA § 107(a). The court rules that a lessee is an "owner" under § 107(a). That it subleased the portion of land used for disposal to another company does not insulate it from liability; indeed, it strengthens the case since those leasing land to others for hazardous activites can be liable as owners under the common law. The court rules that COCC also is an "operator" under § 107(a). The company was directly involved in hazardous waste disposal for a period, a vice president of the company in the open exercise of his corporate authority conducted a hazardous waste disposal business, and the company would in any event be liable under the theory of joint venture. The court then rules that by virtue of disposal activities after the termination of its lease, COCC is a person who arranged for disposal of its hazardous substances at a site owned by another, and a hazardous substance transporter under § 107(a). The court holds COCC, like other defendants earlier found liable, 14 ELR 20272, jointly and severally liable for government response costs incurred at the Bluff Road site.

Counsel are listed at 14 ELR 20272.

[14 ELR 20895]

Simons, J.:

Statement of the Case

This action was brought by the United States of America to recover costs incurred in removing hazardous substances from the surface of a site located along Bluff Road near Columbia, South Carolina (hereafter "the Bluff Road site"). Named as defendants in the case were four hazardous waste generators, the two current property owners, the operator of the site South Carolina Recycling and Disposal, Inc. (hereafter "SCRDI"), and Columbia Organic Chemical Company (hereafter "COCC"). In an order dated February 23, 1984, this court granted summary judgment against all defendants, except COCC, on the issue of their joint and several liability for the government's cleanup costs under Sectionn 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (hereafter "CERCLA"), 42 U.S.C. § 9607(a). Because there appeared to be a factual dispute with respect to COCC's involvement at the Bluff Road site, plaintiff's motion against COCC was denied and trial was set on the outstanding issue of COCC's liability. Proceedings to determine the amount of plaintiff's recovery from liable defendants will be set for a later date.

As a result of the summary judgment proceedings, the issues with respect to COCC's liability have been substantially narrowed. It was established within the context of those proceedings that hazardous substances were disposed of at the Bluff Road site during the years 1972 to 1983 and that there were releases and threatened releases of hazardous substances into the environment from the site. Thus, succinctly stated, the question presently before this court is whether COCC was sufficiently related to the hazardous waste disposal activities at the Bluff Road site to subject the company to liability under Sectionn 107(a) of CERCLA, 42 U.S.C. § 9607(a), for response costs incurred in cleaning up the site's surface. Plaintiff contends that COCC is liable under CERCLA as a site "owner" and as an "operator" under Sectionn 107(a)(2), as a person who arranged for disposal of hazardous substances under Sectionn 107(a)(3), and as a "transporter" under Sectionn 107(a)(4).1 This court agrees.

Findings of Fact

In a trial without jury on March 19-21, 1984, the court made the following findings of fact:

1. Plaintiff is the United States of America, acting on behalf of the Administrator of the United States Environmental Protection Agency ("EPA"), and the defendant is COCC, a South Carolina corporation.

[14 ELR 20896]

2. The subject of this litigation is a hazardous waste storage and disposal facility (the "Bluff Road site"), located along South Carolina State Road 48 ("Bluff Road") near Columbia, South Carolina. The Bluff Road site is approximately four acres in size.

3. COCC is a corporation engaged primarily in the manufacture of chemicals. COCC's offices and main manufacturing facility are located at 912 Drake Street in Columbia, South Carolina (hereafter the "Cedar Terrace plant"). The company was founded in 1944 by Max Gergel, who served as its president until July 26, 1977, and as its Chairman of the Board until approximately 1978. Gergel was the chief executive officer of COCC and had substantial authority over the operations of the company. During his presidency, Gergel and the Board of Directors did not always adhere to COCC's by-laws.

4. In or around late 1972, Max Gergel, by oral agreement with the owners of the property, leased the Bluff Road site on behalf of COCC, initially for the purpose of storing chemicals used in COCC's manufacturing processes. COCC maintained a month-to-month leasehold interest in the site from 1972 through August of 1978.

5. In approximately late 1973, James O. A. McClure and COCC entered into a business relationship for the purpose of reclaiming and recycling saleable materials from the waste products of other concerns. Pursuant to their arrangement, McClure solicited potential customers on behalf of and in conjunction with COCC. McClure discussed the potential offers with Gergel, who could veto any transactions that he believed were not beneficial to COCC's new enterprise. Initially, Gergel often confirmed McClure's offers to potential customers under his own signature on COCC stationery.

6. Approximately 150 fifty-five gallon drums of waste chemicals and hazardous substances gradually accumulated at the parking lot for COCC's Cedar Terrace plant during this early period. Because this storage activity was using too much space at the Cedar Terrace plant, it was decided that the Bluff Road property, which COCC was using at that time to store chemicals used in its manufacturing processes, could be used for such storage. After investigating the site's facilities and physical layout, McClure arranged for the transfer of the waste materials from COCC's parking lot to the Bluff Road property.

7. The business relationship between COCC and McClure was formalized on July 26, 1974 in a written contract signed by Gergel on behalf of COCC and by McClure. Pursuant to the contract, McClure located materials and customers and negotiated contracts with customers for the purchase, sale, recycling and/or disposal of industrial chemical wastes; COCC provided office space, secretarial service, and approved McClure's contracts. Gergel did, at times, refuse to approve a prospective contract, but he approved the vast majority of McClure's proposals. McClure paid COCC $50.00 a month for the rental of the Bluff Road site, where waste chemicals and hazardous substances procured pursuant to the contract were stored. Net profits were divided fifty-fifty between COCC and McClure.

8. Sometime during the first half of 1974, Gergel appointed McClure as a vice president of COCC. He was put in charge of a new division of COCC which was, with Gergel's approval, named the Solvents and Bulk Chemicals Division. McClure purchased 10 shares of COCC stock in 1974 and regularly attended shareholder's meetings. In early 1976, he was elected to the Board of Directors on an interim basis, and in August of that year he was elected as a permanent member. COCC officers and directors, as well as COCC shareholders, were aware that McClure was acting as a vice president of COCC. COCC correspondence in which McClure was represented as a vice president of the company included memoranda to board members, officers, and shareholders, as well as external communications to the South Carolina Department of Health and Environmental Control, the Bankruptcy Court, Western Union, potential customers and the public at large. Copies of external correspondence on COCC stationery signed by McClure as vice president of COCC, were, at one time or another, given to Gergel, Reichlyn, and various other corporate officers. McCluremade reports concerning the activities of his division at numerous shareholders and directors meetings. No one at COCC, including members of the Board of Directors, officers, and shareholders, ever took action to prevent McClure from representing himself as a vice president or agent of COCC.

9. As part of its recycling, reclamation, and disposal enterprise, and with its own trucks or trailers, COCC transported chemical and industrial waste materials of other companies to the Bluff Road site. For the benefit of the enterprise, McClure, representing himself to be a vice president of COCC, obtained a South Carolina Waste Haulers' Permit for exclusive use by COCC. COCC employees were used to pick up waste materials from generating facilities and unload such materials from vehicles at the Bluff Road site. Occasionally, common carriers or a generator's vehicles were used to haul waste to the site.

10. During the period that the Solvents and Bulk Chemicals Division was under McClure's direct supervision the enterprise was profitable for COCC. Through the work of the Division, COCC, using its own trucks, picked up and transported to the Bluff Road site industrial chemical wastes from various companies, including Allied Corporation, General Electric Company, and Arapahoe Chemicals, Inc. These wastes contained such substances as 1,1,1-trichloroethane, acetone, and pyridine, all hazardous wastes listed in 40 C.F.R. § 261.31, and, accordingly, hazardous substances under Sectionn 101(14) of CERCLA, 42 U.S.C. § 9601(14). The wastes also contained cyclohexylamine, a hazardous substance because it exhibits the characteristic of ignitability under 40 C.F.R. § 261.21. Wastes which could not be reclaimed, recycled, and sold were stored and disposed of on the Bluff Road site. Payments by customers for these services were made to COCC, not McClure.

11. During the winter of 1974-1975, COCC cleaned up an abandoned hazardous waste site owned by the Southeastern Pollution Control Company (hereafter "SEPCO") and located near Clover, South Carolina. The People's National Bank of Chester, which held the mortgage on the Clover property, paid COCC $3,800 for the cleanup. Three to four COCC employees worked several days a week over a four to six month period to clean up the site. COCC also used its own equipment, including a special forklift, and leased a tractor and flat bed trailers to assist in the operation. COCC took possession of the waste at the Clover site for sale and disposal.

12. COCC transported four to five flatbed truckloads — approximately 400 fifty-five gallon drums — of wastes from the Clover site to the Bluff Road site. Many of these materials had no immediate market value and were contained in decaying drums. McClure was authorized to move these drums to Bluff Road on behalf of COCC, and Gergel had been aware of the possibility of moving the wastes to Bluff Road before the Clover operation was initiated. The drums of chemical waste from Clover were stored on the Bluff Road site, both inside and outside the warehouses located on the property, and remained there, along with unuseable and unsaleable wastes from other generators, until the time of the cleanup.

13. During the Clover cleanup, McClure was able to identify, by their distinctive odor, acetic acid and butyric acid, both hazardous substances listed pursuant to Sectionn 311 3f the Clean Water Act and incorporated into CERCLA under Sectionn 101(14). At Bluff Road, McClure again recognized acetic acid and butyric acid amongst the material brought from Clover. The unrebutted testimony of Dr. Eugene Meyer, a government expert qualified in the field to physical chemistry, was that acetic acid and butyric acid are among the few hazardous substances that can be readily identified by their distinctive odor. General testing at the Clover site by COCC also identified chlorinated solvents, acetone, organic and inorganic acids, caustics, solvents and glycols — all hazardous substances under Sectionn 101(14) of CERCLA.

14. In June of 1976, Gergel, McClure, and Henry Tischler, another vice president of COCC, formed South Carolina Recycling and Disposal, Inc., a defendant previously found jointly and severally liable in this case. This corporation assumed all of the activities of recycling, reclamation, and disposal formerly performed under the auspices of COCC. Gergel, McClure, and Tischler were the sole stockholders and officers of SCRDI. McClure served as President, Tischler as Vice President, and Gergel as Secretary-Treasurer.

15. In July of 1976, SCRDI, by oral agreement, subleased on a month-to-month basis from COCC that portion of the Bluff Road property which COCC was not using to store materials for use in its manufacturing processes. SCRDI paid rent to COCC, [14 ELR 20897] which then paid the total rental to the landowners. The sublease continued until August of 1978, when SCRDI assumed the entire leasehold interest and paid the landowners directly.

16. After COCC's primary leasehold interest terminated in 1978, COCC continued to manufacture chemicals, including organo-iodine and organo-bromine compounds, some of which were flammable. COCC used water to clean equipment used in the production of organic compounds. This wastewater was contaminated with such substances as methyl iodide, a volatile organic chemical, and was drummed for disposal. According to the unrebutted testimony of Dr. Meyer, methyl iodide is member of the class of halomethanes, which are hazardous substances listed pursuant to Sectionn 307 of the Clean Water Act and incorporated into CERCLA under Sectionn 101(14).

17. COCC contracted with SCRDI for disposal of COCC's drummed wastewater at the Bluff Road site during the period of time following termination of COCC's primary leasehold interest in 1978. On occasion during this time frame, COCC itself transported the wastes to the Bluff Road site, where it would dump the materials. These wastes were not removed from the site prior to the cleanup.

Conclusion of Law

Sectionn 107(a) of CERCLA provides, in pertinent part, as follows:

(a) Notwithstanding any other provision or rule of law, and subject only to the defenses set forth in subsection (b) of this section —

(2) any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of,

(3) any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at any facility owned or operated by another party or entity and containing such hazardous substances, and

(4) any person who accepts or accepted any hazardous substances for transport to disposal or treatment facilities or sites selected by such person, from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance, shall be liable for —

(A) all costs of removal or remedial action incurred by the United States Government or a State not inconsistent with the national contingency plan . . . .

42 U.S.C. § 9607(a). At the outset, it must be noted that COCC is a "person" and that the Bluff Road site is a "facility" at which "hazardous substances" were "disposed" and "relased," within the broad meanings ascribed those terms in Sectionn 101 of CERCLA. With these preliminary determinations aside, the court will evaluate COCC's liability under the above subsections of Sectionn 107(a).

1. COCC was an "owner" of the Bluff Road facility.

In 1972, COCC negotiated an oral lease of the Bluff Road site with the owners of the property. COCC's leasehold interest in the property was continuous from 1972 until the latter part of 1978. During the years 1976 to 1978, COCC, by oral agreement, sublet a portion of the property to SCRDI for its waste disposal and recycling business.Without question, hazardous substances were disposed of at the Bluff Road site during the period of COCC's leasehold.

Apart and distinct from its participation in the operation of the Bluff Road site, COCC, as lessee of the site, maintained control over and responsibility for the use of the property and, essentially, stood in the shoes of the property owners. As evidenced by the definitional provisions of CERCLA, site control is an important consideration in determining who qualifies as an "owner" under Sectionn 107(a). See 42 U.S.C. § 9601(20)(A). Accordingly, site lessees like COCC should, along with the property owners themselves, by considered "owners" for purposes of imposing liability under Sectionn 107(a).2 To conclude otherwise would frustrate Congress' intent that persons with responsibility for hazardous conditions bear the cost of remedying those conditions. See S. Rep. No. 96-848, 96th Cong., 2d Sess. 13 (1980).

The fact that during part of its leasehold COCC sublet a portion of the site does not diminish its responsibility. If anything, it strengthens the case against COCC. As a general rule, a lessor or sublessor who allows property under his control to be used by another in a manner which endangers third parties or which creates a nuisance, is, along with the lessee or sublessee, liable for the harm. See California v. Watt, 520 F. Supp. 1359 [11 ELR 20870] (C.D. Cal. 1981); Daigle v. Continental Oil Co., 227 F. Supp. 875 (W.D. La. 1967). See also Restatement (Second) of Property § 81.1; 49 Am. Jur. 2d. Landlord and Tenant § 898 (1970).

Thus, this court concludes that by virtue of its lessee/sublessor interest in the Bluff Road facility at a time during which hazardous substances were disposed of at the facility, COCC can be held liable as an "owner" pursuant to Sectionn 107(a)(2) of CERCLA, 42 U.S.C. § 9607(a)(2).

2. COCC was an operator of the Bluff Road Facility.

There are three separate bases for concluding that, in addition to and apart from being liable as an "owner" of the Bluff Road facility, COCC is liable as an "operator" of the facility. First, COCC was generally involved in the hazardous waste disposal business, as evidenced by COCC's cleanup of the waste disposal site in Clover, South Carolina and subsequent removal of some of the waste materials from that site to the Bluff Road facility.

Second, the evidence leads this court to conclude that from 1974 to 1976, James Q. A. McClure was an employee and servant of COCC — a vice president in charge of the company's Solvents and Bulk Chemicals Division. In his official capacity as vice president, McClure supervised and directed the storage and disposal of hazardous substances at the Bluff Road site. McClure's authority to conduct these activities was either express or implied by virtue of his positon as vice president. Moreover, even if these activities were not expressly or implicitly authorized by COCC, McClure clearly had the apparent authority to conduct waste storage and disposal activities. Under the principle of apparent authority, "one who holds out another, or allows him to appear as having authority to act, as his agent with respect to his business generally, or with respect to a particular matter, cannot . . . deny that his apparent authority is real." Glens Falls Indemnity Bank Co. v. Palmetto Bank, 23 F. Supp. 844, 848 (W.D.S.C. 1938) (emphasis added). The court in Glens Falls made the following observations:

The public is compelled to rely upon the apparent authority of agents of . . . corporations, especially when as managers or superintendents or executives, they are placed in control or in charge of the corporation's business. The fact that one has on office at the principal place of business of the corporation where its actual operations take place, that he apparently is in charge of the office and the work, that he supervises and gives orders to employees, that he opens the letters of the corporation, that he conducts its correspondence, that he signs the checks, handles the bank accounts, the cash, etc. and all the surrounding facts and circumstances may be considered and taken into account regardless of his title, in determining what his apparent authority is.

The apparent scope of an agent's authority is that authority which a reasonably prudent man, induced by the principal's acts or conduct, and in the exercise of reasonable diligence and sound discretion, under similar circumstances with the party dealing with the agent, and with like knowledge, would naturally suppose the agent to have.

Id.

In this case, a reasonably prudent man would naturally have concluded that McClure had the authority to conduct hazardous waste activities on behalf of COCC. Here, McClure was given office [14 ELR 20898] space and secretarial support by COCC, conducted correspondence relating to hazardous waste activities on COCC stationery, and held himself out to the public, to government agencies, and to potential waste disposal customers as a duly authorized agent of COCC. Because McClure had either the express, implied, or apparent authority to conduct waste storage or disposal activities, COCC is, under the doctrine of respondeat superior, bound by his acts and liable under CERCLA for the results of those acts. E.g., Johns Hopkins University v. Hutton, 422 F.2d 1124 (4th Cir. 1970); Bradley v. Hullander, 272 S.C. 6, 249 S.E.2d 486 (1978).

Finally, even if McClure was not an authorized official of the corporation, COCC would still be liable as an operator under the theory of joint venture. As a general rule, parties to a joint venture are mutually and vicariously liable for injuries or harms caused by their venture. Pritchett v. Kimberling Cove Company, 568 F.2d 570 (8th Cir. 1978); Rowe v. Brooks, 329 F.2d 35 (4th Cir. 1964); Richardson v. Walsh Construction Company, 334 F.2d 334 (3d Cir. 1964); Opco, Inc. v. Scott, 321 F.2d 471 (10th Cir. 1963). Application of this rule of liability to public health and safety statutes like CERCLA seems particularly appropriate.

The Fourth Circuit Court of Appeals has defined a joint venture as "a special combination to two or more persons, where in some specific venture a profit is jointly sought without any actual partnership or corporate designation . . . ." Dexter and Carpenter v. Houston, 20 F.2d 647, 651 (4th Cir. 1927). The Circuit Court has since elaborated that "[a] joint adventure may exist where persons embark in an undertaking without entering on the prosecution of the business as partners strictly, but engage in a common enterprise for their mutual benefits . . . ." Aiken Mills v. United States, 144 F.2d 23, 25 (4th Cir. 1944) (emphasis added). Accord, Spradley v. Houser, 247 S.C. 208, 146 S.E.2d 621 (1966); Gordan v. Rothberg, 70 S.C. 490, 50 S.E.202 (1948).

The leading Fourth Circuit case on joint venture is Rowe v. Brooks, supra. In Rowe, the court found a joint venture where there was an agreement (oral) between parties to the venture, the planned venture was for mutual advantage and profit, each party to the venture was to have a measure of control over and responsibility for the enterprise, and harm was caused by activities within the scope of the enterprise. Id. at 39.

Applying the Rowe analysis to the instant case, this court finds a joint venture between COCC and McClure. Here, COCC entered into a venture with McClure in 1973 to reclaim and recycle chemical waste products. A written contract confirming the relationship was signed by the parties in July of 1974. Pursuant to their agreement, McClure solicited recyclable or reclaimable wastes from generators and COCC had the right to approve or veto transactions proposed by McClure. Moreover, COCC provided office space and secretarial service to McClure, and each party received 50% of the net profits. As a result of their venture, chemical wastes containing hazardous substances were deposited at the Bluff Road property. Under Rowe, COCC is vicariously liable for acts taken by McClure within the scope of their joint venture, including storing and disposing of chemical wastes at the Bluff Road facility, and is therefore liable under Sectionn 107(a)(2) as an "operator" of the facility.

3. COCC is a person who arranged for disposal or treatment of its hazardous substances at a facility owned or operated by another.

In its February 23, 1984 order, this court held that the government's burden of proof under Sectionn 107(a)(3) of CERCLA, 42 U.S.C. § 9607(a)(3), is basically two-fold. It must show (1) that a person arranged for disposal or treatment of hazardous substances at a facility owned or operated by another, and (2) that the facility in question contained that generator's substances or substances of the same type as that generator's. See also United States v. Wade, No. 97-1462, Memorandum Opinion at 9 [14 ELR 20096] (E.D. Pa. December 20, 1983).

At trial, Dr. Svoboda, a vice president of COCC in charge of production, admitted that COCC generated wastewater containing such substances as methyl iodide, a volatile organic chemical and a hazardous substance under Sectionn 101(14) of CERCLA, 42 U.S.C. § 9601(14), and that COCC contracted with SCRDI for disposal of these wastes. McClure confirmed these disposal transactions, testifying that SCRDI disposed of COCC's wastes at the Bluff Road site during the period of time following termination of COCC's primary leasehold interest in 1978. McClure added that on occasion during this time frame COCC transported the wastes to the Bluff Road site itself, where it would dump the materials. Thus, COCC clearly arranged for disposal of a hazardous substance at the Bluff Road site as a time during which the facility was owned and operated by persons other than itself. Moreover, McClure's unrebutted testimony was that COCC wastes were not removed from the site prior to the cleanup. Thus, the site contained such hazardous substances as COCC's. Accordingly, COCC is liable under Sectionn 107(a)(3) of CERCLA, 42 U.S.C. § 9607(a)(3).

4. COCC was a transporter of hazardous substances to the Bluff Road site.

To establish transporter liability under Sectionn 107(a)(4) of CERCLA, the government must prove that a person accepted hazardous substances for transport to a disposal or treatment facility selected by that person. 42 U.S.C. § 9607(a)(4). As stated above, the evidence shows that in 1974 COCC cleaned up a hazardous waste dump in Clover, South Carolina. COCC trucks and personnel were used to remove chemical wastes from the site, and COCC transported four to five truckloads of the Clover wastes to the Bluff Road site. McClure testified that the wastes transported to Bluff Road contained such substances as acetic acid and butyric acid, which are hazardous substances under CERCLA. Apart from the Clover cleanup, it is clear that during the years 1974 to 1976 COCC trucks and personnel were used to pick up hazardous substances from waste generators, including Allied Corporation, General Electric Company, and Arapahoe Chemicals, Inc., and transport such substances to the Bluff Road site. Clearly, then, COCC was a person who accepted hazardous substances for transport to the Bluff Road facility. Furthermore, because McClure directed and supervised these operations, and his acts are imputable to COCC under the alternative theories of respondeat superior or joint venture, COCC participated in the selection of Bluff Road as the site for disposal of hazardous substances. Therefore, COCC is liable as a transporter under Sectionn 107(a)(4).

5. COCC's liability is joint and several.

In its February 23, 1984 order, this court concluded that in circumstances of indivisible injury, liability under CERCLA is joint and several, and that the burden of proving divisibility appropriately rests with CERCLA defendants. Order at 15. See United States v. Chem-Dyne, No. C-1-82-40, Order Denying Defendant's Motion for Partial Summary Judgment at 18 (S.D. Ohio December 11, 1983); United States v. Wade, supra, at 21-22. In the course of granting plaintiff's partial summary judgment motions against the other defendants in this case, this court concluded that the harm at the Bluff Road site was indivisible. Order at 154.

COCC has not presented any evidence that would cause this court to conclude otherwise, Indeed, the evidence in the record supports the conclusion thatt the harm at the Bluff Road site was indivisible. There were thousands of corroded, leaking drums at the site to segregated by source or waste type. Unknown, incompatible materials commingled to cause fires, fumes, and explosions.Because of the constant threat of further fires, explosions, and other reactions, all of the materials at the site were, if not actually oozing out, in danger of being released. It is simply impossible to divide this environmental hazard in any meaningful way among waste generators, transporters, site owners, and site operators. Thus, based on the evidence in the record, this court concludes that the harm at the Bluff Road site was indivisible and that COCC is therefore jointly and severally liable for costs associated with the site.

Conclusion

COCC falls within several of the classes of persons identified in Sectionn 107(a) of CERCLA as liable for response costs associated with the Bluff Road site. Specifically, the company is liable as both an owner and an operator under Sectionn 107(a)(2), as a person who arranged for disposal of its hazardous substances under Sectionn 107(a)(3), and as a transporter of hazardous substances under Sectionn 107(a)(4). Because the harm at the site was indivisible, COCC's liability is joint and several. The question of the amount of recovery to which plaintiff is entitled will be resolved in subsequent proceedings.

AND IT IS SO ORDERED.

1. The complaint does not include a count against COCC under Sectionn 107(a)(4). Nevertheless, plaintiff presented proof at trial relating to COCC's liability under that provision without objection by COCC. Rule 15(b) of the Federal Rules of Civil Procedure provides that "[w]hen issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings . . . . [F]ailure [to move] to amend does not affect the result of the trial of these issues." Because COCC did not object to plaintiff's evidence on the issue of COCC liability under Sectionn 107(a)(4), COCC impliedly consented to trial on this issue, and this court may treat the issue as though it had been raised in the pleadings.

2. For cases in order contexts in which the term "owner" has been construed to include leaseholders, see Hager v. Devils Lake Public School District, 301 N.W.2d 630 (N.D. 1981) (under state constitution, a tenant is entitled to compensation as an "owner"); Allen v. Hall County, 156 Ga. App. 629, 275 S.E.2d 713 (1980) (the term "owner" in condemnation statutory provision includes leaseholders); Elliott v. Joseph, 351 S.W.2d 879 (Tex. 1961) (the term "owner" in condemnation statutory provision includes lessees).


14 ELR 20895 | Environmental Law Reporter | copyright © 1984 | All rights reserved