United States v. Monstanto Co.

Brief Fact Summary.

Plaintiffs sued Defendants, claiming violations of CERCLA. Several Defendants settled, but the landowners and three others did not. The district court held all the non-settling defendants jointly and severally liable for the cost of cleaning up the site. Defendants appealed.

Synopsis of Rule of Law.

An owner of land that is used to hold hazardous substances may be liable for all costs of removal or other remedial action if a release or threatened release of a hazardous substance occurs.

Facts.

Seidenberg and Hutchinson were owners of a tract of land that they leased to the Columbia Organic Chemical Company (COCC), a chemical company. COCC stored raw materials and finished products on the land. COCC later began to recycle waste generated by other companies and used the leased land to store and dispose of chemical waste. COCC created South Carolina Recycling and Disposal Inc. (SCRDI) to carry on that business. Federal law defined many of these chemicals as hazardous. Between 1976 and 1980, SCRDI haphazardly stored 7,000 55-gallon drums of waste wherever there was space and without additional protective measures. Many of these drums decayed and leaked their contents into the ground. The various chemicals leaked and interacted with each other, resulting in dangerous fumes, fires, and explosions on multiple occasions. A government investigation found that the facility was filled beyond capacity and that many of the drums were unlabeled or had labels that were unreadable. The United States and the State of South Carolina (Plaintiffs) sued COCC, SCRDI, Seidenberg, Hutchinson, and several off-site chemical producers whose waste was found at the site (Defendants), claiming violation of Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA). Several Defendants settled, but the landowners and three others did not. The district court held all the non-settling defendants jointly and severally liable for the cost of cleaning up the site. Defendants appealed.

Issue.

Whether an owner of land that is used to hold hazardous substances may be held liable for all costs of removal or other remedial action if a release or threatened release of a hazardous substance occurs.

Held.

Yes. The trial court’s ruling is affirmed. An owner of land that is used to hold hazardous substances may be liable for all costs of removal or other remedial action if a release or threatened release of a hazardous substance occurs.

Discussion.

This applies to any person or entity that owned or operated a facility that was used to dispose of hazardous materials and to any person who, by agreement, arranged for the transport of such materials to the destination facility. Liability can attach regardless of the degree of participation in the hazardous waste disposal. Such persons may escape liability by showing that the release or threatened release of hazardous materials and the resulting damages were caused solely by a third party with which the defendant had no direct or indirect contractual relationship, and that the defendant took precautions against foreseeable acts or omissions of such third parties and the potential consequences thereof. Although CERCLA does not prescribe joint and several liability, it is permitted if the harm is indivisible. Here, there is no question that Defendants owned the facilities in question at the time the hazardous materials were deposited on their property and that there was a release of those substances. Furthermore, they failed to show that the contamination occurred because of acts or omissions by third parties with whom they had no contractual relationship. Defendants had a lease with COCC and SCRDI and they did nothing to protect against the conduct of COCC and SCRDI. Defendants’ ignorance of COCC and SCRDI’s conduct is no defense. CERCLA does not absolve negligent, absentee landowners.