ELR Citation: ELR 20180
No(s). 98-55056 et al (9th Cir. Oct 24, 2001)

The court reverses a district court's grant of summary judgment in favor of a petroleum company and the federal government in a suit filed against them for cleanup costs incurred by the current owner of a mobile home park, but affirms the district court's grant of summary judgment in favor of prior owners of the park. The prior owners of the park also used it as a mobile home park. Before their ownership, a petroleum production company owned the site. After cleaning up contamination at the park, the current owner sued the prior park owners, the petroleum company, and the government under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), state nuisance law, indemnity, and various other statutes. The district court dismissed all claims, and the owner appealed. The court first holds that the district court erred in granting summary judgment to the government and the petroleum company on the CERCLA claim. Genuine issues of material fact preclude summary judgment on whether the response costs were "necessary." The touchstone for determining the necessity of response costs is whether there is an actual threat to human health or the environment; that necessity is not obviated when a party also has a business reason for the cleanup. Here, the district court erroneously focused on the ulterior business motive for remediation. The court next holds, however, that as to the prior park owners the district court properly granted summary judgment in their favor on the CERCLA issue. Based on the plain meaning of the statute, there was no disposal during their ownership. Of the terms defining "disposal," the only one that might describe the passive soil migration during their ownership is "leaking," but there was no leaking under the plain and common meaning of the word. Congressional intent further supports this interpretation. Therefore, they are not potentially responsible parties and are not subject to liability. The court further holds, however, that the district court erred in granting the prior park owners' motion for summary judgment on the current owner's indemnity claim based on the sales agreement because there are genuine issues of material fact as to the necessity of the owner's response costs. The court finally holds that the district court properly dismissed the owner's state nuisance claim against the government for water contamination because the claim is precluded by state law.

Prior decisions in this litigation are published at 28 ELR 21201 and 31 ELR 20141.]

Counsel for Plaintiff
Frank Gooch III
Gilchrist & Rutter
Wilshire Palisades Bldg.
1299 Ocean Dr., Ste. 900, Santa Monica 90401
(310) 393-4000

Counsel for Defendant
Charles Jordan
Holley & Galen
800 S. Figueroa St., Ste. 1100, Los Angeles CA 90017
(213) 629-1800

McKeown, J. Before Schroeder, Hug, Kozinski, Nelson, Hawkins, Berzon, and Tallman, JJ., with Fletcher, J., joined by Pregerson and Paez, JJ., concurring in part and dissenting in part.