F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
JAN 4 2005
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
JACK YOUNG and DEBBIE YOUNG,
Husband and Wife; DAYLE JAMES and
BARBARA JAMES, Husband and Wife,
Plaintiffs-Appellants,
v. No. 02-7133
UNITED STATES OF AMERICA;
CHRISTINE TODD WHITMAN,
Administrator of the United States
Environmental Protection Agency, in her
official capacity; UNITED STATES
ENVIRONMENTAL PROTECTION
AGENCY; GALE NORTON, Secretary of
the Interior, in her official capacity;
UNITED STATES DEPARTMENT OF
THE INTERIOR; J. WILLIAM
MCDONALD, Acting Commissioner of
the United States Bureau of Reclamation,
in his official capacity; UNITED STATES
BUREAU OF RECLAMATION, an
agency of the Department of the Interior;
DONALD EVANS, Secretary of
Commerce, in his official capacity;
UNITED STATES DEPARTMENT OF
COMMERCE, as successor to the
Reconstruction Finance Corporation,
successor to Defense Plant Corporation;
and CITY OF HENRYETTA, an
Oklahoma municipal corporation,
Defendants-Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF OKLAHOMA
(D.C. No. CIV-01-155-S)
Gerald L. Hilsher (Blake K. Champlin with him on the briefs) of Boone, Smith, Davis,
Hurst & Dickman, Tulsa, Oklahoma, for Plaintiffs-Appellants.
Todd S. Kim (Thomas L. Sansonetti, Assistant Attorney General, Eric G. Hostetler,
Angeline Purdy, and R. Justin Smith with him on the brief) of the United States
Department of Justice, Washington D.C., for Federal Defendants-Appellees.
Stephen W. Smith, Henryetta, Oklahoma, for Defendant-Appellee City of Henryetta.
Before KELLY, BALDOCK, and BRISCOE, Circuit Judges.
BALDOCK, Circuit Judge.
Plaintiffs Jack Young, Debbie Young, Dayle James, and Barbara James purchased
property, at a substantially reduced price, adjacent to a superfund site in Henryetta,
Oklahoma. They subsequently discovered hazardous substances on their property, but did
not take any action to contain or cleanup those substances. Instead, Plaintiffs sued the
Federal Government and the City of Henryetta under the Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. §§ 9601-9675, and
Oklahoma law. Plaintiffs sought to recover, among other things, the costs of responding
to the hazardous substances allegedly released from the superfund site.
2
The district court dismissed all Plaintiffs’ claims except their cost-recovery claim
under CERCLA § 107(a), 42 U.S.C. § 9607(a), and then subsequently granted
Defendants’ motion for summary judgment on the cost-recovery claim. The court
concluded Plaintiffs’ cost-recovery claim failed as a matter of law because they were
potentially responsible parties, or “PRPs” in CERCLA nomenclature, and therefore
unable to assert a cost-recovery claim under § 107(a).1 Plaintiffs appeal the district
court’s grant of summary judgment on their cost-recovery claim, arguing they are not
PRPs and therefore able to maintain a cost-recovery claim under § 107(a).2 We have
jurisdiction, 28 U.S.C. § 1291, review the district court’s grant of summary judgment de
novo (applying the same standard as the district court), and affirm, albeit on different
grounds. See Tate v. Farmland Indus., Inc., 268 F.3d 989, 992 n.2 & 3 (10th Cir. 2001).
I.
1
Congress amended CERCLA § 107 in January 2002. See Small Business
Liability Relief and Brownfields Revitalization Act, Pub. L. No. 107-118, § 221, 115 Stat.
2356 (codified as amended at 42 U.S.C. § 9607(q)). Section 107(q) provides an
exception to PRP status under § 107(a)(1)-(2) for “[a] person that owns real property that
is contiguous to or otherwise similarly situated with respect to, and that is or may be
contaminated by a release or threatened release of a hazardous substance from, real
property that is not owned by that person[.]” 42 U.S.C. § 9607(q)(1). We do not address
what effect, if any, § 107(q) would have on Plaintiffs’ cost-recovery claim because both
parties disclaimed any knowledge of § 107(q) at oral argument.
2
Plaintiffs alternatively argue they have a valid defense to liability under
CERCLA § 107(b)(3) and, if they are PRPs, their cost-recovery claim under § 107(a) is
inherently a claim for contribution. Plaintiffs did not raise these arguments in the district
court. We therefore summarily reject Plaintiffs’ alternative arguments under “the general
rule . . . that a federal appellate court does not consider an issue not passed upon below.”
Singleton v. Wulff, 428 U.S. 106, 120 (1976).
3
The material facts are undisputed. Eagle-Picher Industries, along with the Federal
Government briefly during World War II, owned seventy acres of land in Henryetta.
Eagle-Picher conducted smelting operations on the property. The operations
contaminated the property and surrounding areas with lead and arsenic. Eagle-Picher
ceased operations in 1969, demolished its smelting plant, and donated the property to the
City of Henryetta. In 1996, the EPA designated the property as the “Eagle-Picher
Superfund Site” and commenced an action, with cooperating state and local agencies, to
cleanup the property. The agencies completed the cleanup in 1998.
Plaintiffs became interested in a 330-acre parcel of property adjacent to the Eagle-
Picher Superfund Site in 1999. Plaintiffs generally knew about the EPA’s cleanup actions
at the superfund site; however, they never reviewed any public documents concerning the
superfund site or conducted any environmental tests on the property they intended to
purchase. In early 2000, Plaintiffs purchased the 330-acre parcel property adjacent to the
superfund site for considerably less than its appraised value. Plaintiffs thereafter
surveyed their property, hired an environmental consulting company to conduct an
“abbreviated” site investigation, and hired an environmental hydrology and engineering
company to assess the potential risks to humans who worked on their property. They
claim the cost of such actions totaled $237,273.
Plaintiffs’ actions revealed hazardous substances, including lead and arsenic, on
their property. Plaintiffs also learned that a potential health risk existed for workers on
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their property. Plaintiffs maintain that hazardous substances continue to migrate onto
their property from the superfund site. They have not, however, taken any action to
contain the alleged release of, or cleanup, the hazardous substances on their property.
Indeed, Plaintiffs have abandoned their property and do not intend to spend any money to
cleanup the contamination.
II.
CERCLA is not a general vehicle for toxic tort claims. County Line Inv. Co. v.
Tinney, 933 F.2d 1508, 1517 (10th Cir. 1991) (per curiam); see also Gussack Realty Co.
v. Xerox Corp., 224 F.3d 85, 91 (2d Cir. 2000) (per curiam) (explaining “CERCLA does
not provide compensation to a private party for damages resulting from contamination.”).
Instead, “Congress enacted CERCLA to facilitate the expeditious cleanup of
environmental contamination caused by hazardous waste releases[,]” Daigle v. Shell Oil
Co., 972 F.2d 1527, 1533 (10th Cir. 1992), and to establish a “financing mechanism to
abate and control the vast problems associated with abandoned and inactive hazardous
waste disposal sites.” Public Serv. Co. of Colo. v. Gates Rubber Co., 175 F.3d 1177,
1181 (10th Cir. 1999) (internal quotations omitted). Thus, the twin aims of CERCLA are
to cleanup hazardous waste sites and impose the costs of such cleanup on parties
responsible for the contamination. See Meghrig v. KFC Western, Inc., 516 U.S. 479, 483
(1996). The former, under the statutory scheme, must precede the latter. See Gussack
Reality, 224 F.3d at 91.
5
CERCLA “encourage[s] private parties to assume the financial responsibility of
cleanup by allowing them to seek recovery from others.” FMC Corp. v. Aero Indus., Inc.,
998 F.2d 842, 847 (10th Cir. 1993). Specifically, CERCLA “provides two types of legal
actions by which parties can recoup some or all of their costs associated with hazardous
waste cleanup: cost recovery actions under § 107(a), 42 U.S.C. § 9607(a), and
contribution actions under § 113(f), 42 U.S.C. § 9613(f).” United States v. Colorado &
E. R.R. Co., 50 F.3d 1530, 1535 (10th Cir. 1995). To establish a prima facie case under
§ 107(a), a plaintiff must prove (1) the site is a facility, (2) defendant is a responsible
person, (3) the release or threatened release of a hazardous substance has occurred, and
(4) the release or threatened release caused the plaintiff to incur necessary response costs
consistent with the National Contingency Plan (NCP).3 FMC, 998 F.2d at 845.
In this case, Plaintiffs only asserted a cost-recovery claim under CERCLA § 107.
We, unlike the district court, do not determine whether Plaintiffs are PRPs under § 107(a)
3
The circuit courts of appeal are in substantial agreement concerning the elements
necessary to establish a prima facie case of liability under CERCLA § 107(a). See
Village of Milford v. K-H Holding Corp., – F.3d –, –, 2004 WL 2661279, *4 (6th Cir.
Nov. 23, 2004); Goodrich Corp. v. Town of Middlebury, 311 F.3d 154, 168 (2d Cir.
2002); Blasland, Bouck & Lee, Inc. v. City of N. Miami, 283 F.3d 1286, 1302 (11th Cir.
2002); Carson Harbor Village, Ltd. v. Unocal Corp., 270 F.3d 863, 870-71 (9th Cir.
2001); Trimble v. Asarco, Inc., 232 F.3d 946, 956 (8th Cir. 2000); In re Reading Co., 115
F.3d 1111, 1117-18 (3d Cir. 1997); Westfarm Assoc. Ltd., P’ship v. Washington
Suburban Sanitary Comm’n, 66 F.3d 669, 677 (4th Cir. 1995); Town of Munster, Ind. v.
Sherwin-Williams Co., 27 F.3d 1268, 1273 (7th Cir. 1994); Amoco Oil Co. v. Borden,
Inc., 889 F.2d 664, 668 (5th Cir. 1989); Dedham Water Co. v. Cumberland Farms Dairy,
Inc., 889 F.2d 1146, 1150 (1st Cir. 1989).
6
and thus unable to assert a cost-recovery claim under the rule in this Circuit that a
Plaintiff-PRP must proceed under the contribution provisions of CERCLA § 113(f) when
the Plaintiff-PRP sues another PRP for response costs.4 See Morrison Enter. v.
McShares, Inc., 302 F.3d 1127, 1133 (10th Cir. 2002); Sun Co., Inc. v. Browning-Ferris,
Inc., 124 F.3d 1187, 1191 (10th Cir. 1997); Colorado & E. R.R. Co., 50 F.3d at 1536.
Instead, we avoid the difficult question of whether Plaintiffs are PRPs because Plaintiffs’
claim fails even assuming they are not PRPs and thus able to assert a cost-recovery claim
under § 107(a). Plaintiffs’ cost-recovery claim fails because, as discussed below, they
have not incurred any response costs that are necessary and consistent with the NCP.
A.
Under CERCLA § 107(a)(4)(B), a private party may recover “any . . . necessary
costs of response incurred . . . consistent with the national contingency plan.” 42 U.S.C.
§ 9607(a)(4)(B). A plaintiff bears the burden of proving any “response costs” were
necessary and consistent with the NCP. United States v. Hardage, 982 F.2d 1436, 1447
(10th Cir. 1992). “CERCLA ‘response costs’ are defined generally as the costs of
investigating and remedying the effects of a release or threatened release of a hazardous
4
The Supreme Court recently noted that several circuit courts of appeal, including
the Tenth Circuit, have held “a private party that is itself a PRP may not pursue a § 107(a)
action against other PRPs for joint and several liability.” Cooper Indus., Inc. v. Aviall
Serv., Inc., – U.S. –, –, 2004 WL 2847713 (Dec. 13, 2004) (Slip Op. at 10) (citing, among
other decisions, United States v. Colorado & E. R.R. Co., 50 F.3d 1530, 1534-36 (10th
Cir. 1995)). The Court, however, declined to consider whether those decisions correctly
interpreted CERCLA. Id.
7
substance into the environment.” Tinney, 933 F.2d at 1512 n.7 (emphasis added) (citing
42 U.S.C. § 9601(23), (24), (25)). Thus, “response costs are . . . payments by responsible
parties in restitution for cleanup costs.” Atlantic Richfield Co. v. American Airlines, Inc.,
98 F.3d 564, 568 (10th Cir. 1996). The NCP is a set of EPA regulations that “establish
procedures and standards for responding to releases of hazardous substances, pollutants,
and contaminants[.]” 42 U.S.C. § 9605(a); see also 40 C.F.R. §§ 300.1, 300.3.
A response cost must be “necessary to the containment and cleanup of hazardous
releases.” Hardage, 982 F.2d at 1448 (emphasis added); FMC, 998 F.2d at 848. “The
statutory limitation to ‘necessary’ costs of cleaning up is important. Without it there
would be no check on the temptation to improve one’s property and charge the expense of
improvement to someone else.” G.J. Leasing Co., Inc. v. Union Elec. Co., 54 F.3d 379,
386 (7th Cir. 1995). Consequently, several circuit courts of appeal have concluded a
response cost is only “necessary” if the cost is closely tied to the actual cleanup of
hazardous releases. See Ellis v. Gallatin Steel Co., 390 F.3d 461, –, 2004 WL 2382166,
*17 (6th Cir. Oct. 26, 2004) (explaining only work that is “closely tied” to the actual
cleanup of contaminated property may constitute a necessary response cost); Black Horse
Lane Assoc., L.P. v. Dow Chemical Corp., 228 F.3d 275, 297 (3d Cir. 2000) (holding
response costs were not necessary because they did not pertain to a remedial or removal
action on the contaminated property); Gussack Realty, 224 F.3d at 92 (explaining a
necessary cost of response must be incurred in remedying a site); Amoco Oil Co. v.
8
Borden, Inc., 889 F.2d 664, 669-70 (5th Cir. 1989) (explaining that “[t]o justifiably incur
response costs, one necessarily must have acted to contain a release threatening the public
health or the environment.”). We too have recognized costs cannot be deemed
“necessary” to the containment and cleanup of hazardous releases absent some nexus
between the alleged response cost and an actual effort to respond to environmental
contamination. See Hardage, 982 F.2d at 1448.
Any response action must also be “consistent” with the NCP. Bancamerica
Commercial Corp. v. Mosher Steel of Kan., Inc., 100 F.3d 792, 796 (10th Cir. 1996). The
NCP provides “[a] private party response action will be considered ‘consistent with the
NCP’ if the action, when evaluated as a whole, is in substantial compliance with the
applicable requirements in [40 C.F.R. § 300.700(c)(5)-(6)], and results in a CERCLA-
quality cleanup[.]” 40 C.F.R. § 300.700(c)(3)(i) (emphasis added). In turn,
§ 300.700(c)(5)-(6) provide requirements for worker health and safety, documentation of
cost recovery, permit requirements, identification of applicable and appropriate
requirements, remedial site investigation, selection of a remedy, and providing an
opportunity for public comment concerning the selection of a response action. See also
Gates Rubber, 175 F.3d at 1182. A “CERCLA-quality cleanup” results if the response
action protects human health and the environment through the utilization of permanent
solutions and alternative treatment or resource recovery technologies to the maximum
9
extent possible. See Franklin County Convention Facilities Auth. v. American Premier
Underwriters, Inc., 240 F.3d 534, 543 (6th Cir. 2001).
B.
In this case, Plaintiffs claim they incurred $237,273 in responding to the release or
threatened release of hazardous substances from the Eagle-Picher Superfund Site. To be
sure, some of the costs Plaintiffs expended are “classic examples” of preliminary steps
taken in response to the discovery of the release or threatened release of hazardous
substances, such as site investigation, soil sampling, and risk assessment. Other costs
Plaintiffs seek to recover, such as the cost of surveying their property, stretch the statutory
language entirely too far.5 Plaintiffs’ cost-recovery claim fails, however, even if we
assume all costs they incurred could be properly classified as “response costs” because
the costs were neither necessary to the containment and cleanup of hazardous releases nor
consistent with the NCP.
Plaintiffs’ alleged response costs were not “necessary” to the containment or
cleanup of hazardous releases because the costs were not tied in any manner to the actual
cleanup of hazardous releases. Absolutely no nexus exists between the costs Plaintiffs
5
Plaintiffs also claim $201,500 of the total incurred costs were for legal expenses;
however, Mr. Young submitted an affidavit stating Plaintiffs “have not paid any moneys
for attorney fees for handling this case and do not owe [the law firm] any money for
attorney fees for this matter.”
10
expended and an actual effort to cleanup the environmental contamination. To the
contrary, Plaintiffs maintain their property continues to be contaminated. Plaintiffs also
repeatedly testified they do not intend to spend any money to cleanup the contamination
on their property. Plaintiffs’ cost-recovery claim therefore fails as a matter of law
because their alleged response costs were not necessary to either the containment or
cleanup of hazardous releases.
Plaintiffs response actions were also inconsistent with the NCP for essentially the
same reasons. The NCP provides that in a private party remedial cost-recovery action,
such as this, the response action must be in substantial compliance with 40 C.F.R.
§ 300.700(c)(5)-(6) and result in a CERCLA-quality cleanup. The only evidence in the
record that indicates Plaintiffs complied with § 300.700(c)(5)-(6) is the single conclusory
statement by their expert that they incurred “response costs consistent with the NCP
which includes the work performed by my company for the [site investigation].” We
doubt such a statement is sufficient to raise a genuine issue of material of fact, but
assuming it does, Plaintiffs’ response action is still inconsistent with the NCP because it
did not result in any – let alone CERCLA-quality – cleanup. “Because [Plaintiffs] have
incurred no costs consistent with the NCP, CERCLA provides them no remedy.” Tinney,
933 F.2d at 1512.
Plaintiffs argue that they were not required to follow initial site investigation and
monitoring with additional removal or response actions because the source of the
11
hazardous substances is from the superfund site, which is controlled by Defendants.
They argue they could not be expected to trespass onto the superfund site; rather they
brought a civil action. Even if the source is the superfund site, we still lack evidence to
suggest that the expenses were in any way related to containment or cleanup of the
hazardous substances on Plaintiffs’ property. Rather, the costs appear to have been
incurred in connection with preparing for and undertaking this litigation. While costs for
initial investigation and monitoring might be compensable if linked to an actual effort to
contain or cleanup an actual or potential release of hazardous substances, costs incurred
solely for litigation are not. Hardage, 982 F.2d at 1447; Black Horse Lane Assoc., L.P.,
228 F.3d at 295-96; Redland Soccer Club, Inc. v. Dep’t of the Army, 55 F.3d 827, 850
(1995).
III.
Plaintiffs have failed to establish, as a matter of law, an essential element of their
cost-recovery claim under CERCLA § 107(a)(4)(B); namely, that the release or
threatened release of a hazardous substance caused them to incur necessary response costs
consistent with the NCP. Plaintiffs, moreover, sought to recover the costs of responding
to an alleged release of hazardous substances without cleaning up their contaminated
property. Such a result would defeat the main purpose of CERCLA – that hazardous
waste sites actually be cleaned up – and flip the statutory scheme on its head. Because
12
CERCLA is about “cleanup,” and none occurred here, the district court’s order granting
Defendants’ motion for summary judgment is
AFFIRMED.
13