3550 Stevens Creek Associates, a Limited Partnership v. Barclays Bank of California

PREGERSON, Circuit Judge,

dissenting:

I dissent. The majority’s opinion is based on a numbing, highly technical analysis of CERCLA definitions and provisions. “CERCLA is essentially a remedial statute designed by Congress to protect and preserve public health and the environment.” Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805 F.2d 1074, 1081 (1st Cir.1986). Congress enacted CERCLA “to provide a comprehensive response to the problem of hazardous substance release.” Wickland Oil Terminals v. Asarco, Inc., 792 F.2d 887, 890 (9th Cir.1986). The purposes underlying this remedial statute should not be frustrated by the narrow interpretations inflicted on it by the majority opinion.

CERCLA provides several complementary mechanisms to effectuate hazardous substance removal.1 The legislation also addresses the problems of compensation and liability in the wake of a release or threatened release of a hazardous substance.2 Private cost recovery actions for clean up costs are a central part of CERC-LA.3 The availability and independence of these causes of action are now clearly recognized by the courts. See id. at 892 (“private enforcement actions under section 107(a) ... [are] independent of governmental actions financed by Superfund").

Section 107(a)(2) remedies apply only to a narrow private class of property owners who may be held responsible for the effects of a hazardous substance they caused to be placed on their property and failed to remove when they later sold the property. As argued by the United States in its ami-cus brief, the government has an interest in encouraging private parties to respond to releases of hazardous substances, be*1366cause private cleanups conserve the resources of EPA and the Superfund, and enhance EPA’s effort to deal with the massive problem of improper disposal of hazardous substances.4

I cannot agree that Congress “effectively precluded private party response actions through its ‘disposal’ requirement.” Majority opinion at 12527.5 The “disposal” requirement does not clearly show that Congress intended to preclude private party liability for installing the hazardous substance — asbestos—within private structures. Interpretation of the term “disposal” to include installation of asbestos insulation and fire retardants in private buildings lies .at the heart of the issue of potential liability under 107(a)(2). Depending on the facts, the installation of asbestos in private structures could fall within the definition of “disposal” and thus result in potential liability under section 107(a)(2) for clean up cost recovery. Because the district court never addressed this issue, we should remand the matter with directions to determine whether the facts of this case satisfy the “disposal” requirement.

The widespread use of asbestos in private building structures presents an extensive problem for which there is no common law remedy.6 Precisely because of the *1367widespread nature of the problem, government Superfund resources are not sufficient to deal with these clean-up costs. Thus, without recognition of a statutory remedy of a private cause of action under section 107(a)(2), there will be no effective remedy for the damage and injury caused by the existence of asbestos in private structures.

Underlying the majority’s refusal to recognize section 107(a)(2) private actions in the context of asbestos removal from private structures is the argument that there is no case law to support the action. Given that this is an issue of first impression in the circuits, and one not at all settled among the district courts, this argument carries little water. If recent cases are any example, neither the courts nor the litigants are clear about how to proceed when private structure asbestos clean up issues arise under CERCLA. Some of the cases are brought under common law tort and property theories, using CERCLA language as a guide to liability. See, e.g., First United Methodist Church v. United States Gypsum Co., 882 F.2d 862 (4th Cir.1989), cert. denied, — U.S. -, 110 S.Ct. 1113, 107 L.Ed.2d 1020 (1990); Elec. Power Bd. v. Westinghouse Elec. Corp., 716 F.Supp. 1069 (E.D.Tenn.1988). Others merely announce a CERCLA private cause of action as one of several claims against a potentially liable defendant. See, e.g., Mercer Univ. v. Nat’l Gypsum Co., 258 Ga. 365, 368 S.E.2d 732 (1988).

Finally, the majority’s concern that a finding of private liability under section 107(a)(2) would cause far-reaching financial and practical problems is misplaced. The extensive use of asbestos materials in commercial properties has already had a “profound, continuing economic impact on the real estate industry.” 19 Env’t Rep. (BNA) 1154 (Oct. 7, 1988) (remarks of H.L. Van Varick, executive vice president of the American Savings Bank of New York City to Senate Environment and Public Works Subcommittee on Hazardous Wastes and Toxic Substances). “Asbestos is a deal killer.” 19 Env’t Rep. (BNA) 1664 (Dec. 16, 1988) (remarks of Robert Andre of the Seattle law firm of Ogden, Ogden, Murphy & Wallace). Recognition of an effective, statutory remedy for dealing with asbestos clean-up costs in private structures could at least give the parties to a real estate transaction a tool for apportioning clean up responsibilities.

I believe section 107(a)(2) creates a private cause of action in certain situations for the recovery of clean up costs of asbestos installed in the structure of private buildings. The issue whether 3550 Stevens Creek Associates has satisfied the requirements of the section and can prevail in the private action should be remanded to the district court.

.The federal government may conduct its own removal of hazardous substances or remedial actions necessary for such removal by using money from the Superfund. 42 U.S.C. § 9604. In certain instances the federal government may compel the parties responsible for the release of hazardous substances to clean up the site where the hazardous substances are found. 42 U.S.C. § 9606.

. Either the federal government or a private party may recover the costs of response action from parties determined to be liable under section 107 of the Act. 42 U.S.C. § 9607.

. "[T]he liability provisions of section 107 are an essential part of the structure established by CERCLA because the resources of the Fund alone are simply insufficient to provide an adequate remedy to the national problem of hazardous waste disposal.” Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805 F.2d 1074, 1082 (1st Cir.1986).

. "Asbestos is a known human carcinogen that causes lung cancer, mesothelioma (a cancer of the chest and abdominal lining) and is also linked to other cancers. It has been estimated that 3,300 to 12,000 cancer cases a year occur in the United States as a result of past exposure to asbestos; almost all of these cancer cases are fatal. In addition, asbestos causes asbestosis (a serious lung disorder). About 65,000 persons in the United States are estimated to be suffering from asbestosis today." 51 Fed.Reg. 3738 (1986) (introduction to proposed rule on ban of asbestos products).

Because of the health risks presented by the release of asbestos fibers into the environment, the EPA has for the first time used its authority under section 6 of the Toxic Substances Control Act to place a comprehensive ban on a dangerous substance. See 20 Env't Rep. (BNA) 534 (July 14, 1989) (reporting EPA Administrator William K. Reilly's remarks at a press conference announcing the ban) (emphasis added). Determining that "piecemeal control of the risks [presented by airborne asbestos fibers] is not satisfactory; only elimination of asbestos to the extent feasible will produce acceptable reduction of risks,” 51 Fed.Reg. 3738, the EPA has issued a rule which will prohibit the manufacture and distribution of asbestos in this country for 94% of present asbestos product uses by 1996. 20 Env’t Rep. (BNA) 534 (July 14, 1989); see 40 C.F.R. Part 763.

. The majority bases its analysis on the questionable proposition that "disposal” refers only to the placement of "hazardous wastes,” not of "hazardous substances.” This proposition fails to take into account the very language of the statute which refers repeatedly to the "disposal of hazardous substances.” See §§ 107(a)(2), (a)(3) and (a)(4). The specific reference in the section to hazardous substances overrides the borrowed Solid Waste Disposal Act's limited definition of disposal. See Hartigan, Asbestos Abatement Cost Recovery Under the Comprehensive Environmental Response, Compensation, and Liability Act, 14 Harv.Envtl.L.Rev. 253, 258-60 (1990) (contending that recovery of costs for removal of asbestos from buildings properly fits within the plain language and congressional intent of CERCLA). Case law also tends to use the terms "hazardous waste" and "hazardous substance” interchangeably when referring to CERCLA requirements. See New York v. General Elec. Co., 592 F.Supp. 291, 296 (N.D.N.Y.1984) ("[I]t appears that Congress sought to deal with every conceivable area where hazardous substances come to be located_") (emphasis added); Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805 F.2d 1074, 1081 (1st Cir.1986) ("[A liberal] reading of the statute serves ... congressional purposes by preserving the limited resources of the Fund and by ensuring that liability will be apportioned among parties responsible for the release of hazardous substances whenever possible.”) (emphasis added); Cadillac Fairview/California v. Dow Chemical Co., 840 F.2d 691, 693 (9th Cir.1988) ("Section 107(a)(2)(B) expressly creates a private claim against any person who owned or operated a facility at the time hazardous substances were disposed of at the facility for recovery of necessary costs of responding to the hazardous substances incurred consistent with the national recovery plan.”) (emphasis added).

.Recovery for damages caused by asbestos in the private sector is uncertain. Where exposure to friable asbestos has caused personal injury, individual parties have been able to sue asbestos manufacturers under traditional tort theories. See, e.g., Beshada v. Johns-Manville Prods. Corp. 90 N.J. 191, 447 A.2d 539 (1982); Borel v. Fibreboard Paper Prods. Corp., 493 F.2d 1076 (5th Cir.1973), cert. denied, 419 U.S. 869, 95 S.Ct. 127, 42 L.Ed.2d 107 (1974). But tort litigation for property damages and economic loss due to asbestos installations is more problematic. Generally speaking, the problem of "rooting out the asbestos that is now an unwelcome resident in thousands of structures throughout the United States,” W. Rogers, Environmental Law: Pes*1367ticides and Toxic Substances § 6.8, at 460 (1988), does not fall within the classic tort parameters of culpable party and innocent victim.