BULLETIN NO. 01-27
OCTOBER 31, 2001
FEDERAL COURT OF APPEALS DEEMS PASSIVE SOIL
MIGRATION NOT “DISPOSAL”
On October 25, 2001, the federal Court of Appeals for the
contaminants from the definition of “disposal” under CERCLA
Ninth Circuit issued an important ruling, en banc, that clarifies
in most cases. This decision will free from Superfund liability
the parties liable under section 9607(a)(2) of the Comprehensive
numerous parties in the chain of title of a property and also will
Environmental Response, Compensation, and Liability Act
protect neighboring property owners. It also takes on added
(CERCLA or Superfund), 42 U.S.C. 9601 et seq. The decision,
importance because it rejects a controversial decision issued by
Carson Harbor Village, Ltd. v. Unocal Corp. , 2001 WL
a Ninth Circuit panel last year that held that passive migration
1269178 (9th Cir. 2001), excludes passive soil migration of
does constitute “disposal” under CERCLA.
DECISION REDUCES CERTAIN PROPERTY OWNERS’ ENVIRONMENTAL LIABILITY
Specifically, this ruling impacts practitioners and property
against neighboring property owners where contamination
owners in the following ways:

simply migrated onto their property.
It limits the ability of plaintiffs to bring CERCLA actions

against interim property owners (i.e., those in the chain of title
between the owner that affirmatively contaminated the

By analogy, these limits might be extended to state
environmental laws.

Although this ruling protects interim owners from passive
property and the owner at the time contamination was
soil migration, it does not protect them from liability for
discovered).
leaking tanks and barrels on the property during their period
It limits the ability of plaintiffs to bring CERCLA actions
of ownership.
DISCOVERY OF HAZARDOUS SUBSTANCES LED TO LITIGATION AGAINST PAST OWNER
The case arose from the environmental cleanup of a
contaminated wetlands site used originally for petroleum
production and later as a mobile home park.
The current
for petroleum production.
In 1993, Carson Harbor discovered hazardous substances
consisting of tar-like and slag materials in the wetlands area of
property owner, Carson Harbor Village, Ltd. (Carson Harbor),
the property.
owns and operates a mobile home park on 70 acres in the City
materials were a waste by-product of petroleum production and
of Carson, California. An undeveloped open-flow wetlands
had been on the property for several decades prior to its
area covers approximately 17 acres of the site. From 1977 until
development as a mobile home park. Carson Harbor brought
1983, prior to Carson Harbor’s ownership, defendant Carson
suit, principally under CERCLA, for reimbursement of costs
Harbor Village Mobile Home Park, a general partnership (the
associated with the cleanup of the site. The Partnership was
Partnership), owned the property.
The Partnership also
named as a defendant because it was a past owner of the
operated a mobile home park on the property. Beginning over
property and allegedly the contamination migrated through the
30 years earlier, however, from 1945 until 1983, Unocal
soil during the period of its ownership.
Corporation held a leasehold interest in the property and used it
Subsequent investigations revealed that the
NINTH CIRCUIT CONSTRUES PLAIN MEANING IN CASE OF FIRST IMPRESSION
To determine whether the Partnership was a potentially
“instead of focusing solely on whether the terms are ‘active’ or
responsible party (PRP), the court needed to decide whether
‘passive,’ we must examine each of the terms in relation to the
there was a “disposal” of hazardous substances during its
facts of the case and determine whether the movement of
ownership of the property. CERCLA includes as a PRP “any
contaminants is, under the plain meaning of the terms, a
person who at the time of disposal of any hazardous substance
‘disposal.’
owned or operated any facility at which such hazardous
deposit, injection, dumping, spilling, leaking or placing’] fit the
substances were disposed of. . . .” 42 U.S.C. 9607(a)(2)
hazardous substance contamination at issue?” Carson Harbor,
(emphasis added). The definition of “disposal” in this context
2001 WL 1269178 at 13.
Put otherwise, do any of the terms [‘discharge,
is a major source of controversy throughout the federal courts.
After applying each of these terms to the facts, the court
The Ninth Circuit resolved this issue by basing its analysis on
noted that “leaking” is the only term that might remotely
the plain meaning of the statute.
describe the passive soil migration in this case -- but the court
In order to determine whether the plain meaning of
concluded that the Carson Harbor site’s circumstances are not
“disposal” includes “passive soil migration” or the “passive
those of the leaking barrel or underground storage tank
movement of contamination,” the court looked to CERCLA’s
envisioned by Congress. Accordingly, the court held that the
reliance on the definition of “disposal” in the Resource
alleged passive migration of contaminants through the soil was
Conservation and Recovery Act, 42 U.S.C. 6901 et seq. Under
not a “disposal” within the plain meaning of that term under
that definition, a “disposal” has occurred when there has been a
CERCLA section 9607(a)(2). The court further concluded that
“discharge, deposit, injection, dumping, spilling, leaking or
“[t]his plain meaning approach is consistent with the statute as a
placing.”
whole and its legislative history.” Id. at 21.
The
court
rejected
the
absolute
binary
“active/passive” distinction used by some courts, stating that
WHAT IS NEXT?
Federal circuit courts across the country differ in their
will happen remains to be seen. However, given the differing
definition and application of the term “disposal” under
views taken by the federal circuit courts, the Supreme Court
CERCLA. Following the issuance of the court’s ruling, counsel
might very well have the final word. Until that time, this ruling
for the current property owner suggested that plaintiff might
should help many property owners avoid CERCLA liabilities.
seek review by the United States Supreme Court. Whether that
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The Bulletin is only a general review of the subjects covered and does not constitute an opinion or legal advice. © 2001 Pillsbury Winthrop LLP
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