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Kaiser Aluminum & Chemical Corp. v. Catellus Development Corp., 976 F.2d 1338, 35 ERC 1689, 61 USLW 2226, 23 Envtl. L. Rep. 20,020

Facts

Catellus's predecessor sold land to the City of Richmond, which hired Ferry to excavate and grade the site for a housing development. During the excavation, Ferry spread contaminated soil, which included hazardous substances like paint thinner and lead, over uncontaminated areas of the property. Richmond subsequently sued Catellus for cleanup costs, leading Catellus to file a third-party complaint against Ferry, alleging that Ferry exacerbated the contamination.

Catellus's predecessor, Santa Fe Land Improvement Company, sold 346 acres of land to the City of Richmond, California (“Richmond”). Richmond hired Ferry to excavate and grade a portion of the land for a proposed housing development. While excavating the development site, Ferry spread some of the displaced soil over other parts of the property. This soil contained hazardous chemical compounds, including paint thinner, lead, asbestos, and petroleum hydrocarbons.

Issue

Whether James L. Ferry & Son could be held liable under CERCLA as an 'operator' and 'transporter' of hazardous substances for the contamination caused during excavation and grading operations.

Whether James L. Ferry & Son could be held liable under CERCLA as an 'operator' and 'transporter' of hazardous substances for the contamination caused during excavation and grading operations.

Rule

Under CERCLA, liability can be imposed on any person who is an owner or operator of a facility where hazardous substances are disposed of, or who arranged for the disposal or treatment of hazardous substances, or who accepted hazardous substances for transport to disposal sites.

To prevail in an action for contribution under CERCLA, a plaintiff must show, among other things, that the defendant falls within one of four classes of persons subject to liability under 42 U.S.C. § 9607(a).

Analysis

The court found that Catellus's allegations were sufficient to establish that Ferry was an 'operator' of the facility because it had control over the excavation and grading process that led to the contamination. Additionally, the court determined that Ferry's actions of moving and spreading the contaminated soil constituted 'disposal' under CERCLA. Furthermore, the court concluded that Ferry's actions also qualified as 'transportation' of hazardous substances, as it moved the contaminated soil within the property.

We conclude that Catellus's allegations are sufficient to state a claim against Ferry under sections 9607(a)(2) and (4). A defendant may be liable under 9607(a)(2) for the cost of cleaning up a contaminated facility if, 'at the time of disposal of any hazardous substance [he] owned or operated [the] facility at which [the] hazardous substances were disposed of.'

Conclusion

The Court of Appeals reversed the district court's dismissal of Catellus's third-party complaint against Ferry and remanded the case for further proceedings.

We reverse the dismissal of Catellus's third-party complaint and remand this cause to the district court for further proceedings.

Who won?

Catellus Development Corporation prevailed in the appeal because the court found sufficient grounds to hold Ferry liable under CERCLA for its role in exacerbating the contamination.

Catellus prevailed in the appeal because the court found sufficient grounds to hold Ferry liable under CERCLA for its role in exacerbating the contamination.

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