ELR Citation: ELR 20231
No(s). CV 89-7368-WMB (C.D. Cal. Jan 29, 1993)

The court holds that potentially responsible parties (PRPs) may sue other PRPs for response costs under §107 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) rather than suing for contribution under CERCLA §113, and cities, county and garbage disposal districts, and the California Department of Transportation "arranged" for transportation of waste within the meaning of CERCLA §107(a)(3) and "owned or possessed" the waste for which they arranged disposal. Plaintiffs entered into a consent decree with the U.S. Environmental Protection Agency (EPA) under which they agreed to perform certain work at the OII landfill and to pay approximately $61 million to EPA and California, but reserved the right to assert claims for reimbursement against other PRPs who were not parties to the decree. Plaintiff asserts that right by bringing this action against 14 municipal defendants, one county and five garbage disposal districts, and the state Department of Transportation to recover a fair share of the costs they incurred under the consent decree.

The court first holds that the issue of whether this action can be brought under §107 or must be brought under §113 can be resolved before trial and does not depend on whether defendants may be held jointly and severally liable. The court holds that plaintiff PRPs may sue other PRPs under §107, because §113 does not abrogate §107 but rather codifies the efforts of federal courts to imply a contribution remedy to assist those held jointly and severally liable. The court also holds that public policy considerations and regard for a city's sovereign power to protect the public health, safety, and welfare do not preclude imposition of CERCLA liability. CERCLA does not expressly exclude cities from cleanup cost liability as arrangers for disposal of hazardous substances. The court holds that joint and several liability applies under §107, unless individual defendants can show the harm they cause is divisible, in which case defendants may be entitled to several liability. The court notes, however, that because divisibility of harm cannot be presently resolved, the court's final decision on joint and several liability must wait until it considers evidence relating to the divisibility of harm. The court next holds that the doctrine of de minimis non curat lex is not a defense to CERCLA liability, because it is not enumerated in §107(b).

Addressing whether defendants arranged for transport for disposal, the court first holds that each municipal defendant arranged with a transporter for transport for disposal within the meaning of §107(a)(3). The cities contracted with disposal companies to transport waste for disposal, and it is not important that the contracts at issue did not specifically mention hazardous substances. The fact that no city picked the OII site as the final destination is not determinative. Further, policy arguments do not prevent imposition of CERCLA liability. The court holds that the issuance of business licenses to waste haulers by five municipal defendants also constituted an arrangement subjecting the cities to liability under §107(a)(3). Given these defendants' statutory and common-law duty to assure the pick-up and disposal of residential trash, their licensing of private haulers amounted to an arrangement. The court holds that for the same reasons, each garbage disposal district arranged for transport for disposal of waste. The court also holds that the county defendant arranged for disposal of its governmental waste because it transported that waste in county vehicles. The court also finds that the county arranged for the transport or disposal of residential waste by creating and controlling garbage disposal districts and taking day-to-day responsibility for their operation. The court finds that the Department of Transportation arranged for disposal of material from several sites based on contracts with private companies.

Addressing ownership or possession of waste under §107(a)(3), the court holds that each defendant city actually owned or possessed the governmental waste for which it arranged for transport for disposal. The court holds that examining the cities' exercise of control is the correct means for determining whether they constructively owned or possessed other waste. The court finds that defendant cities constructively owned or possessed residential and commercial waste because they exercised control over the waste. Defendants had a duty to provide for waste disposal, and fulfilled their duty by hiring transporters to haul away residential and commercial waste. Through contractual provisions by which they controlled the person in actual possession of the waste, the cities possessed the waste. In arranging with haulers for waste collection and disposal, defendant cities exercised significant control. It is not determinative that the defendants might not have chosen the site for disposal, because each city selected the hauler, who determined the site, and delegated some amount of autonomy over site selection to that transporter. It is also not determinative that municipal defendants had no proprietary interest in the haulers with whom they arranged for disposal. Some cities billed residents directly for collection costs and others received a percentage of the transporter's billings and/or received free collection service for their governmental waste. The court concludes that defendant cities did own or possess residential and commercial waste collected under the cities' contracts with private rubbish haulers. CERCLA does not permit defendants to avoid liability by simply hiring an outside contractor to perform collection services that the cities have a duty to provide. The court also concludes that plaintiffs have not shown that the defendant cities that arranged for transport for disposal of commercial waste through licenses constructively possessed that waste. Plaintiffs must provide additional evidence showing control by the licensing defendants. The court finds that the county defendants actually owned and possessed county governmental waste. The court also finds that each county defendant constructively owned or possessed residential and commercial waste for which it arranged for transport for disposal. The court further finds that the Department of Transportation owned or possessed waste at the time it arranged for transport. Although CERCLA §101(20)(D) prevents a governmental entity from being held liable when it involuntarily inherits a waste facility, it does not prevent the Department of Transportation from being held liable for acquiring land through eminent domain and then arranging to have material on that land transported for disposal. Finally, the court finds that some of the waste was deposited at the OII site at some relevant time with regard to nearly all defendants.

[Other decisions in this litigation are published at 21 ELR 20826 and 22 ELR 20773.]

Counsel not available at this printing.