ELR Citation: ELR 20767
No(s). CIV. S-89-871 LKK (E.D. Cal. Jan 27, 1993)

The court rules that private investigative costs, not approved by the U.S. Environmental Protection Agency (EPA) and incurred after EPA announced its own investigation, are not recoverable in a private cost recovery action under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The owner of a sawmill site in Oroville, California, brought a private cost recovery action against the operator of an adjacent log processing plant that dumped large amounts of pentachlorophenol into water flowing between the properties. The plaintiff used the contaminated water in its operation of the mill. The court notes that private parties may only recover response costs that are necessary and consistent with the national contingency plan (NCP). The court rules that costs not authorized by EPA and incurred after EPA initiates its own investigation generally are duplicative and, thus, not recoverable. Costs incurred solely to defend against the government's action are not necessary. The court grants the defendant summary judgment that the plaintiff may not recover its investigative costs incurred after it received notice of EPA's investigation. The court next rejects both parties' argument that proof of CERCLA liability requires proof that the release at issue caused incurrence of response costs. CERCLA §107(a)(4) imposes liability when, inter alia, "there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance. . . ." The court holds that the clause "which causes the incurrence of response costs" modifies only the phrase "threatened release." Thus, the court holds that CERCLA does not impose a causation element as a predicate to liability when there has been an actual release. The court notes, however, that if a private plaintiff "is unable to demonstrate some nexus between the defendant and the incurred response costs, those costs are not necessary and are unlikely to have been incurred in response to the NCP." Because the plaintiff has met its burden of showing a nexus between the defendant's releases and the plaintiff's incurrence of response costs, the court holds that the defendant is not entitled to judgment premised on a failure to prove proximate cause. Next, the court declines to treat the site as several separate facilities, which, the court notes, would have the effect of imposing a causation requirement. Finally, the court holds that the defendant's lack of control over released hazardous substances is no defense to liability.

Counsel for Plaintiff
James C. Collins, Greg M. Block
Thelen, Marrin, Johnson & Bridges
Two Embarcadero Ctr., Ste. 2200, San Francisco CA 94111
(415) 392-6320

Counsel for Defendants
Gregory P. Stone, Patrick J. Cafferty
Munger, Tolles & Olson
33 New Montgomery St., 19th Fl., San Francisco CA 94105
(415) 512-4000