FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
STATE OF CALIFORNIA
DEPARTMENT OF TOXIC SUBSTANCES
CONTROL, a State Agency, No. 09-55389
Plaintiff-Appellee, D.C. No.
v. 8:06-cv-00987-VBF-
HEARTHSIDE RESIDENTIAL MLG
CORPORATION, a Delaware OPINION
Corporation,
Defendant-Appellant.
Appeal from the United States District Court
for the Central District of California
Valerie Baker Fairbank, District Judge, Presiding
Argued and Submitted
June 9, 2010—Pasadena, California
Filed July 22, 2010
Before: Dorothy W. Nelson and Ronald M. Gould,
Circuit Judges, and James S. Gwin, District Judge.*
Opinion by Judge Gould
*The Honorable James S. Gwin, United States District Judge for the
Northern District of Ohio, sitting by designation.
10551
CALIFORNIA v. HEARTHSIDE RESIDENTIAL 10553
COUNSEL
Edmund G. Brown, Jr., Attorney General, Donald A. Robin-
son (argued), Supervising Deputy Attorney General, Los
Angeles, California, for the plaintiff-appellee.
Marc C. Forsythe, Goe & Forsythe, LLP, Irvine, California,
for the defendant-appellant.
10554 CALIFORNIA v. HEARTHSIDE RESIDENTIAL
OPINION
GOULD, Circuit Judge:
This appeal presents a question of first impression whether
“owner and operator” status under the Comprehensive Envi-
ronmental Response, Compensation, and Liability Act
(“CERCLA”), 42 U.S.C. § 9607(a)(1), is determined at the
time that cleanup costs are incurred or instead at the time that
a recovery lawsuit seeking reimbursement is filed. We hold
that the owner of the property at the time cleanup costs are
incurred is the current owner for purposes of determining
CERCLA liability.
I
In 1999, Hearthside Residential Corporation (“Hearthside”)
bought an undeveloped tract of wetlands known as the Field-
stone Property in Huntington Beach, California. The Field-
stone Property was adjacent to several residential parcels
(“Residential Site”) that Hearthside never owned or occupied.
When Hearthside purchased the Fieldstone Property, it knew
that the property was contaminated with polychlorinated
biphenyls, or PCBs, a man-made substance considered toxic
to humans and animals.
In 2002, Hearthside entered into a consent order with the
State of California Department of Toxic Substance Control
(“Department”) by which Hearthside agreed to remediate the
PCB contamination on the Fieldstone Property. The Depart-
ment determined that the adjacent Residential Site was also
contaminated with PCBs, which the Department alleged had
leaked onto the Residential Site from the Fieldstone Property.
The Department considered Hearthside responsible for inves-
tigating and remediating the Residential Site in addition to the
Fieldstone Property, but Hearthside disagreed that it bore
responsibility for the Residential Site and limited its cleanup
to the Fieldstone Property. The Department certified that the
CALIFORNIA v. HEARTHSIDE RESIDENTIAL 10555
Fieldstone Property cleanup was complete on December 1,
2005, and within the same month Hearthside sold the Field-
stone Property to the California State Lands Commission.
Following Hearthside’s disclaimer of responsibility for the
PCBs on the Residential Site, the Department itself contracted
to clean those parcels and incurred cleanup expenses between
July 2002 and October 2003. In October 2006, the Depart-
ment filed a complaint against Hearthside seeking, in relevant
part, reimbursement for the Residential Site cleanup on the
basis of (1) the Department’s allegation that the Fieldstone
Property was the source of the Residential Site contamination,
and (2) Hearthside’s ownership of the Fieldstone Property at
the time the Residential Site was cleaned. Under the Depart-
ment’s view, Hearthside was the “owner” of the contamina-
tion source at the time of the cleanup, and thus was
responsible for the remediation costs under CERCLA. See 42
U.S.C. § 9607(a). Hearthside disputed liability, arguing that
“owner” status was determined at the time the recovery suit
was filed—not at the time cleanup costs were incurred—and
that Hearthside was not responsible for the Residential Site
cleanup costs because it sold the Fieldstone Property before
the Department filed suit.
The district court granted partial summary judgment in
favor of the Department on the limited issue of whether
Hearthside was an “owner and operator” of the Fieldstone Prop-
erty.1 After finding a “dearth of meaningful or controlling
case law,” the district court concluded that the purposes of
CERCLA support a holding that “owner” status is determined
at the time a response-recovery claim accrues, not at the time
the lawsuit is initiated. The district court also granted the par-
ties’ joint request that the question be certified for immediate
appeal, and we exercised our discretion to permit the appeal.
1
The district court originally ruled for Hearthside on the ownership
issue, but changed course after a renewed motion for summary judgment
by the Department that focused more expansively on this issue.
10556 CALIFORNIA v. HEARTHSIDE RESIDENTIAL
See 28 U.S.C. § 1292(b). We review pure questions of law
decided on summary judgment de novo. Bjustrom v. Trust
One Mortgage Corp., 322 F.3d 1201, 1205 (9th Cir. 2003).
II
[1] CERCLA imposes “strict liability for environmental
contamination” upon four classes of potentially responsible
parties. Burlington N. & Santa Fe Ry. Co. v. United States,
129 S. Ct. 1870, 1878 (2009). CERCLA liability is joint and
several, meaning that a responsible party may be held liable
for the entire cost of cleanup even where other parties contrib-
uted to the contamination. Fireman’s Fund Ins. Co. v. City of
Lodi, 302 F.3d 928, 945 (9th Cir. 2002). The party saddled
with the cleanup costs may, in turn, sue other potentially
responsible parties for contribution. Id.
[2] At issue here is one type of potentially responsible
party: “the owner and operator of a vessel or a facility.” 42
U.S.C. § 9607(a)(1). We interpret this category to refer to
“current” owners or operators. See Carson Harbor Vill., Ltd.
v. Unocal Corp., 270 F.3d 863, 881 (9th Cir. 2001) (en banc);
accord, e.g., United States v. Capital Tax Corp., 545 F.3d
525, 530 (7th Cir. 2008); ITT Indus., Inc. v. BorgWarner, Inc.,
506 F.3d 452, 456 (6th Cir. 2007). CERCLA’s definition of
“owner,” however, does not specify the proper date from
which to measure ownership. See 42 U.S.C. § 9601(20). In
this regard, the statute is silent. It is the measurement date that
is at issue in this appeal.
A
There is no controlling or persuasive precedent that
answers the precise question before us. Both parties direct us
to cases containing a rule statement phrased in their favor.
The cases marshaled by the Department state that ownership
is measured from the cleanup date, but a review of those deci-
sions reveals that the statements were made in passing, where
CALIFORNIA v. HEARTHSIDE RESIDENTIAL 10557
the critical date was not in dispute. See, e.g., AM Int’l, Inc. v.
Int’l Forging Equip. Corp., 982 F.2d 989, 997 (6th Cir. 1993)
(stating in passing that property ownership is measured “at the
time of its cleanup” in a case where the ownership date was
not at issue); Nurad, Inc. v. William E. Hooper & Sons Co.,
966 F.2d 837, 840-41, 845 (4th Cir. 1992) (stating that the
current owner is the one who “undertakes the task of cleaning
up the environmental hazard,” though the ownership date was
not at issue because the same owner both cleaned up the prop-
erty and filed the reimbursement suit).2 We regard these state-
ments as dicta rather than as “an intended choice of a rule,”
and therefore decline to accord them persuasive weight. See
Pakootas v. Teck Cominco Metals, Ltd., 452 F.3d 1066, 1082
(9th Cir. 2006).
The same can be said of the Eleventh Circuit’s opinion in
United States v. Fleet Factors Corp., 901 F.2d 1550 (11th Cir.
1990), which Hearthside heavily relies upon in support of its
view that ownership is measured from the date a recovery
action is filed. In Fleet Factors, the owner at the time the
United States filed its recovery lawsuit was exempt from lia-
bility under CERCLA because it was a county government
that had involuntarily acquired the title to the contaminated
property. Id. at 1555 (citing 42 U.S.C. § 9601(20)(A)(iii)).
While the Eleventh Circuit did state that it “construe[s] the
present owner and operator of a facility as that individual or
entity owning or operating the facility at the time the plaintiff
initiated the lawsuit by filing a complaint,” id. at 1554, the
thrust of the court’s analysis was its interpretation of the
phrase “immediately beforehand” in CERCLA’s ownership
definition, as that provision fixes liability when the current
2
The district court noted that the only case containing some analysis of
the ownership-measurement issue is Elementis Chemicals, Inc. v. T H
Agriculture & Nutrition, L.L.C., 373 F. Supp. 2d 257 (S.D.N.Y. 2005).
The Elementis court, unlike the other cases cited by the parties, did iden-
tify and analyze the issue here presented. Nonetheless, as with the other
cases, that discussion was not necessary or germane to the holding because
the issue of ownership was not disputed. See id. at 267-69.
10558 CALIFORNIA v. HEARTHSIDE RESIDENTIAL
owner is a state or local government immune from cleanup
liability, id. at 1555. Thus, because the county government
could not be held liable, the Eleventh Circuit had no occasion
to decide the question now before us: Which of two poten-
tially responsible parties—one that owned the property when
the recovery claim accrued and the other that owned it when
suit was filed—is the “current owner” under CERCLA?
Instead, the Eleventh Circuit’s statement of law was made
casually, without analysis, and as “a prelude to another legal
issue that command[ed] the panel’s full attention,” and we do
not find the statement persuasive.3 See United States v. John-
son, 256 F.3d 895, 915 (9th Cir. 2001) (en banc) (Kozinski,
J., concurring). As with the other cases cited by the parties
that contain a bare rule statement and no supporting analysis,
we do not believe Fleet Factors squarely considered this issue
and we decline to adopt its language. See id.
B
[3] In determining in the first instance when current-
ownership status is measured under CERCLA, we observe
that the definition of “owner and operator” is silent on the
date from which ownership is measured. See 42 U.S.C.
3
We also disagree with Hearthside’s argument that Congress necessarily
“approved” of the ownership-measurement language in Fleet Factors
when it amended CERCLA in response to the Fleet Factors holding
regarding the liability of property managers. See Monarch Tile, Inc. v. City
of Florence, 212 F.3d 1219, 1221 n.2 (11th Cir. 2000) (discussing the rea-
son for the CERCLA amendment). We have been directed to no part of
the legislative history of the 1996 amendments indicating congressional
approval of Fleet Factors’s “lawsuit filing” language, and our independent
review reveals none. See CERCLA Lender and Fiduciary Liability Limita-
tions Amendments, Pub. L. 104-208 § 2502(a)-(b), 110 Stat. 3009-462 to
-467 (amending 42 U.S.C. §§ 9601, 9607 with the limited scope of provid-
ing protections to certain fiduciaries and managers). Therefore, “those
who use legislative history to help discern congressional intent will see the
history here as silent, hence a neutral factor, that simply confirms the obvi-
ous, namely, that Congress did not consider the issue.” See Small v. United
States, 544 U.S. 385, 393 (2005).
CALIFORNIA v. HEARTHSIDE RESIDENTIAL 10559
§ 9601(20). Because the plain text of the statute does not
admit of a clear answer to this dispute, we look to the statu-
tory context and CERCLA’s purposes to determine how Con-
gress intended ownership to be measured.4 See, e.g., Carson
Harbor Vill., 270 F.3d at 880 (describing CERCLA as a com-
plex regulatory regime that requires us to “examine the statute
as a whole, including its purpose and various provisions”).
[4] Considering first the broader context of CERCLA lia-
bility, we conclude that the Department’s view that ownership
is measured at the time of cleanup best aligns with CER-
CLA’s statute of limitations. The parties agree, as they must,
that the applicable statute of limitations for a cost-recovery
action is triggered (1) at the completion of a “removal” action,
or (2) at the initiation of an on-site “remedial” action.5 42
U.S.C. § 9613(g)(2). Because statutes of limitations are
intended in part to protect defendants, it is reasonable to
assume that Congress meant the statute of limitations to run
against (and protect) the owner of the property at the time
cleanup occurs. See, e.g., United States v. Hagege, 437 F.3d
943, 955 (9th Cir. 2006) (statutes of limitations ensure “that
the defendant is given the protections of predictability and
promptness”). If Hearthside’s argument were adopted as law,
then an owner could sell a recently cleaned piece of property
to an innocent owner one day before the statute of limitations
runs, with the result that the new owner would bear full
cleanup liability under CERCLA if a recovery action was
later timely filed. Such an unwise and untoward result would
4
As we have previously observed, the direct evidence of CERCLA’s
legislative history includes “few truly relevant documents,” perhaps
because of the last-minute compromise that resulted in a “hastily assem-
bled” final bill. Carson Harbor Vill., 270 F.3d at 885 & nn.13-14. Thus,
we will look to the statutory scheme and the purposes animating CERCLA
to determine congressional intent.
5
Although these events trigger the statute of limitations, a remediator
need not wait until removal is complete or remediation is initiated to file
suit. A CERCLA recovery action accrues “at any time after [recovery]
costs have been incurred.” 42 U.S.C. § 9613(g)(2).
10560 CALIFORNIA v. HEARTHSIDE RESIDENTIAL
undermine the general aim of statutes of limitations to provide
notice and predictability to a defendant and to ensure that the
defendant is in possession of the evidence needed to defend
against the claim. See In re Hanford Nuclear Reservation
Litig., 534 F.3d 986, 1009 (9th Cir. 2008) (“Statutes of limita-
tions are intended to provide notice to defendants of a claim
before the underlying evidence becomes stale.”). We con-
clude that Congress’s decision to activate the statute of limita-
tions at the time of cleanup is strong contextual evidence that
Congress intended the owner at the time of cleanup to be the
“current owner” in a subsequent recovery suit.
[5] An analysis of CERCLA’s purposes yields the same
conclusion—that current ownership is measured at the time of
cleanup. First, CERCLA encourages responsible parties to
remediate hazardous facilities without delay. Burlington N. &
Santa Fe Ry. Co., 129 S. Ct. at 1874; Fireman’s Fund Ins.
Co., 302 F.3d at 947 (“A fundamental purpose and objective
of CERCLA is to encourage the timely cleanup of hazardous
waste sites.”). This policy weighs in favor of the Depart-
ment’s position because a landowner that knows it will ulti-
mately be responsible for the cleanup costs has no incentive
to delay the completion of that process once it has begun.
Conversely, under the view of liability urged by Hearthside,
a landowner seeking to avoid liability by transferring the
property before a lawsuit is filed has every incentive to delay
completing the cleanup process until it has found a buyer; the
recovery suit is likely to be filed once cleanup is complete and
the total cost is known. See generally Anthony R. Chase &
John Mixon, CERCLA: Convey to a Pauper and Avoid Cost
Recovery Under Section 107(A)(1)?, 33 Envtl. L. 293, 301-06
(2003) (hypothesizing a scenario in which “an owner may
avoid cost-recovery liability by conveying the site to a willing
pauper after learning about contamination, but before becom-
ing specifically and personally obligated for cost recovery”).
Any contrived delay that an owner might employ to find a
buyer before the recovery lawsuit is filed would contravene
CERCLA’s purpose of efficient cleanup, and this consider-
CALIFORNIA v. HEARTHSIDE RESIDENTIAL 10561
ation favors the Department’s view that ownership is deter-
mined when cleanup costs are incurred and not when the
recovery suit is filed.
[6] Another important purpose of CERLCA is to encour-
age early settlement between potentially responsible parties
and environmental regulators. See, e.g., Carson Harbor Vill.,
270 F.3d at 880, 884 (discussing CERLCA’s policies of “en-
couraging early settlement” and promoting the “expeditious
and efficient cleanup of hazardous waste sites”); Fireman’s
Fund Ins. Co., 302 F.3d at 948 (approvingly discussing “early
settlement” under CERCLA, which allows “energy and
resources to be directed at site cleanup rather than protracted
litigation”). The importance of settlement within the CER-
CLA scheme undercuts Hearthside’s argument for two rea-
sons. First, measuring ownership from the date that the
recovery lawsuit is filed requires that a recovery lawsuit be
filed. A rule that produces a lawsuit in every case is the oppo-
site outcome that CERCLA seeks to promote. Second, one of
the most critical elements of a CERCLA settlement is the
agreed remedial action plan that the responsible party agrees
to undertake. See Alfred R. Light, CERCLA Law and Proce-
dure 211 (1991). Because the owner at the time of cleanup
can help determine the scope of the cleanup and select from
among the reasonably effective remedial alternatives, id., it
follows that the same owner should be responsible for the cost
of the remediation program that it had the opportunity to
influence. CERCLA seeks to include property owners in the
technical consulting process, and this policy is best served by
a rule that sets current ownership at the time cleanup occurs.
[7] Hearthside contends that the lawsuit-filing date would
establish a simple and clear date from which to measure.
Hearthside urges that measuring ownership from the time of
cleanup would require factual determinations about when
cleanup commenced, when cleanup was completed, and when
enough response costs were incurred so as to give rise to a
recovery cause of action. We agree that in some cases factual
10562 CALIFORNIA v. HEARTHSIDE RESIDENTIAL
determinations may be necessary to determine current owner-
ship.6 Nonetheless, we are not persuaded that the limited fact-
finding required to determine when a recovery action accrued
is burdensome enough to require a different outcome. As we
previously noted, a CERCLA recovery action accrues at the
point that recovery costs are incurred, and the statute of limi-
tations runs from the time a removal action is completed or
a remedial action is begun on the site. 42 U.S.C. § 9613(g)(2).
Thus, factual questions surrounding the relevant cleanup dates
are a routine and familiar component of CERCLA actions,
and courts are well equipped to resolve such factual questions
without great difficulty. Given that CERCLA’s policies pro-
moting settlement and efficient cleanup support the Depart-
ment’s position, we are not persuaded that the possible
necessity of determining the accrual date is sufficient to tip
the balance in favor of Hearthside’s preferred construction.
We hold that current ownership for purposes of liability under
42 U.S.C. § 9607(a)(1) is measured from the time the recov-
ery action accrues. Because there is no dispute that Hearthside
was the owner of the Fieldstone Property at all times relevant
to the remediation of the Residential Site, Hearthside is a cur-
rent owner under 42 U.S.C. § 9607(a)(1).
III
For the foregoing reasons, we affirm district court’s partial
summary judgment grant and remand for further proceedings
not inconsistent with this opinion.
6
No factual determinations are needed to determine current ownership
in this case. Hearthside owned the Fieldstone Property at the time the
Department requested remediation of the Residential Site, as well as dur-
ing the entire cleanup of the Residential Site by the Department. There-
fore, there is no question that Hearthside was the current owner of the
Fieldstone Property at the time the Residential Site was remediated. We
express no view, of course, on the remaining questions about whether the
Fieldstone Property actually leaked contaminants onto the Residential Site
or whether other responsible parties, as defined by 42 U.S.C. § 9607(a),
may be liable for cleanup costs.
CALIFORNIA v. HEARTHSIDE RESIDENTIAL 10563
AFFIRMED AND REMANDED.