ELR Citation: ELR 21279
No(s). 92-56562 (9th Cir. Jul 14, 1994)

The court affirms a district court decision dismissing claims that holders of pipeline easements burdening contaminated property qualify as "owners" or "operators" under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The court first holds that an easement holder can be an "operator" under CERCLA if the easement holder actively participates in managing a facility that releases hazardous materials. The court, while noting that CERCLA's definition of "facility" includes "pipelines," points out that plaintiff, rather than alleging that defendants' pipelines are leaking toxic waste, alleges that defendants were in a "position to prevent" the contamination because defendants' pipelines crossed plaintiff's property. The court holds the latter allegation insufficient to render the defendants operators. Merely exercising the right to pass a pipeline over someone's property is far from the active participation required before an easement holder will be liable as an operator under CERCLA. The court next holds that easement holders are not "owners" for purposes of CERCLA liability. The court interprets CERCLA §101(20)(A) as incorporating the common-law definition of "owner" because the circularity of the statutory definition strongly implies that the term is to be given its ordinary meaning rather than an unusual or technical one. The common law consistently distinguishes between ownership of an easement and ownership of the burdened land. Further, sound public policy supports construing CERCLA in this manner because to do otherwise would dramatically increase the potential number of CERCLA defendants, many of whom would be legitimate, nonpolluting entities. Finally, the court rejects plaintiff's attempt to draw a broad negative inference from the security interest exemption in §101(20)(A)(iii) that anyone else holding "indicia of ownership" in a hazardous waste facility is covered as an owner or operator even if the party does not participate in management.

Counsel for Plaintiff
Mark C. Allen III
Wise, Wiezorek, Timmons & Wise
3700 Santa Fe Ave., Ste. 300, Long Beach CA 90810
(310) 834-5028

Counsel for Defendants
Gary J. Smith
Beveridge & Diamond
One Sansome St., Ste. 3400, San Francisco CA 94104
(415) 397-0100

Before Trott and Williams,^* JJ.