In a question of first impression, the Ninth Circuit Court of Appeals has determined that “owner and operator” status under CERCLA is ascertained as of the time cleanup costs are incurred and not when a recovery suit seeking reimbursement is filed. California v. Hearthside Residential Corp., No. 09-55389 (9th Cir. 07/22/10).
Defendant purchased property in Huntington Beach, California, in 1999, knowing it was contaminated with polychlorinated biphenyls (PCBs). In 2002, defendant entered into a consent order with the state Department of Toxic Substances Control agreeing to remediate contamination on the property. The state agency certified that the property cleanup was complete in December 2005, and defendant thereafter sold the property to the state land commission. After the state environmental agency found contamination on adjoining property, it sued the defendant alleging that the contamination had leached from the property it formerly owned. Defendant argued that “owner” status is determined as of the time the lawsuit was filed, not when cleanup costs were incurred; thus, he was not liable as an owner because he sold the property before suit was filed.
The district court and the appellate court disagreed, ruling that “owner” status under CERCLA is determined at the time a response-recovery claim accrues, not when a lawsuit is initiated. Because defendant owned the property at all times relevant to the remediation, defendant was a current owner under section 107(a)(1) of CERCLA, the court held